WASHINGTON – The Government Accountability Office, the congressional auditing arm, is expected to issue a report as soon as today urging greater NCUA scrutiny of the costs of the corporate credit union resolution, which have varied widely since the 2009 takeover of the nation’s two biggest corporates, U.S. Central FCU and WesCorp FCU.
The report also is expected to urge NCUA to adopt additional measurements when monitoring troubled credit unions, rather than the prompt corrective action minimum capital triggers widely used by the agency, according to Capitol Hill sources who have reviewed the document.
The 50-page report is the product of last year’s legislation, which ordered the GAO to review NCUA’s response to the corporate meltdown and to dozens of credit union failures, which have resulted in almost $5 billion of charges passed down to the nation’s credit unions in the way of a corporate stabilization assessment and National CU Share Insurance Fund premiums over the past three years.
The report is expected to hone in on NCUA’s estimates for the resolution of the five failed corporates, including Members United Corporate FCU, Southwest Corporate FCU and Constitution Corporate FCU, as well as U.S. Central and WesCorp, which started at $1 billion in January 2009 and have since grown to as much as $16 billion. Among the expected recommendations are that NCUA’s Office of the Inspector General, which has studied the corporate failures closely, be used to estimate costs of the corporate resolution.
The report will be sent to the Senate Banking Committee, the House Financial Services Committee and the Financial Stability Oversight Council for potential consideration in legislation.
