The task force proposal recognizes the critical role the corporates play in the payments and settlements systems for credit unions and in other areas, and foresees some kind of structure to enable that role to continue. But it makes no definite proposals along those lines. There is broad support for some credit union-owned and controlled-entity to perform those functions.
The task force acknowledged the major problem with the corporate restructuring, that is as much as $40 billion of underwater MBSs held in the system, the so-called legacy assets at U.S. Central, WesCorp FCU and several other corporates, but makes no suggestions as to how to deal with those. NCUA said last week it is working on a proposed solution which is believed to be a plan to segregate the legacy assets in a single entity, a so-called bad bank, that would be managed while some of the assets are sold or held to maturity.
The other major issue not addressed is the likely consolidation of the corporate system. The task force members acknowledge that the impetus for any consolidation is going to have to come form the credit union movement and not from NCUA.
