LENEXA, Kan. – U.S. Central FCU reported today that a $477 million loss for the fourth quarter and a $1.8 billion loss for the fiscal year erased all of its members' capital and is now eating away NCUA's $1 billion capital infusion of January 2009, with $331 million of that loan now gone.
Losses for U.S. Central, which has been run under NCUA conservatorship since last March 20, were much smaller than 2008's $4.8 billion because of new accounting rules lobbied for by the corporate and other corporate credit unions that only require that they record actual credit losses.
Other-than-temporary impairment charges of $497.9 million for the fourth quarter of 2009 were caused by further deterioration in many of the one-time $52 billion corporate's mortgage-backed securities and U.S. Central is still sitting on $7.3 billion of unrealized losses on its investments. In addition, the corporate is increasing charges on bonds that are privately insured by Ambac, MBIA and Financial Guaranty Insurance, all troubled bond insurers that have warned they will not be able to pay 100% of claims.
The U.S. Central filing illustrates the extraordinary assistance poured into the credit union central bank by NCUA, which includes $9.9 billion provided through the agency's Temporary Corporate CU Liquidity Program and a $5 million loan from the National CU Share Insurance Fund.
