Corporate credit unions

WALL STREET – NCUA plans to sell another $1.26 billion of its corporate bailout bonds this week, after last week’s successful offering of $1.51 billion worth. The bonds, with the federal guarantee, have provided popular with investors, who have snapped up more than $20 billion worth since NCUA began selling them to finance the liquidation of five failed corporate credit unions in October. The bonds were created from the cash flow, that is the principal and interest payments, on some $50 billion of toxic mortgage-backed securities held by the five corporate failures, U.S. Central FCU, WesCorp FCU, Members United Corporate FCU, Southwest Corporate FCU and Constitution Corporate FCU. The actual bonds are being held in separate trusts by NCUA. The latest offering is of floating-rate bonds that are backed by floating-rate MBS contained in the trust. The bonds are being offered through lead underwriter Barclays Capital.

ALEXANDRIA, Va. – ASI, the lone surviving private deposit insurer for credit unions, told NCUA its proposal to assess a mandatory “voluntary” corporate system resolution charge to its 150 credit unions in nine states and all non-federally insured credit union corporate members is outside of the federal agency’s legal authority and probably illegal under extortion statutes.

DALLAS – The success or failure of the planned resuscitation of Southwest Corporate FCU, liquidated by NCUA along with four other failed corporate credit unions last fall, will depend on whether members of the one-time $14 billion institution agree to pony up new capital as part of a plan to combine the remnants of Southwest with Georgia Central FCU.

IRONDALE, Ala. — Members of Louisiana Corporate CU would not be required to acquire new capital after their corporate is merged into Corporate America CU, under preliminary plans for a merger of the two corporates.

DALLAS – Members of Southwest Corporate Bridge FCU have approved a reverse merger of the remnants of the failed corporate into Georgia Corporate FCU, one of three pending corporate combinations. In balloting that began at a special meeting held online last week 93% of the 540 voting members of Southwest approved the merger. The vote represented just 39% of the one-time $13 billion corporate’s 1,300 members. Southwest Corporate Bridge represents a shell of its former self after its main asset, its investment portfolio, was liquidated by NCUA following the agency’s Sept. 24 takeover of Southwest and two other corporate failures, Members United Corporate FCU and Constitution Corporate FCU. Consequently, the new corporate will use the Georgia Corporate charter, though Southwest will dominate the board of the new entity, with eight of the nine seats. One of the first steps of the merger plan, which has been submitted to NCUA for approval, is a road show to raise perpetual contributed capital under NCUA’s new corporate regulations. Two other corporate mergers are in the works; Virginia Corporate FCU is being merged into Mid-Atlantic Corporate FCU in Pennsylvania; and Alabama’s Corporate America CU is preparing to combine with Louisiana Corporate CU.DALLAS – Members of Southwest Corporate Bridge FCU have approved a reverse merger of the remnants of the failed corporate into Georgia Corporate FCU, one of three pending corporate combinations.

WASHINGTON — Two credit union trade associations last week called for "significant changes" to NCUA's proposed rules on corporate credit unions.

ALEXANDRIA, Va. – NCUA is expected as soon as today to announced civil charges against third-party entities involved in the failure of WesCorp FCU, expanding the agency’s efforts to recover some of the $7 billion of losses estimated from the failure of the one-time $34 billion corporate.

WASHINGTON – The congressional fog over potential failures of Wall Street giants in the spring of 2009 allowed credit union backers in Congress to quickly pass corporate credit union legislation with no one knowing the full extent of the problems at the corporates, according to the chief sponsor of the bill, longtime credit union champion former Congressman Paul Kanjorski.

Corporate America CU last Friday subpoenaed the records of the corporate credit unions run by the ousted directors of U.S. Central FCU as part of its suit challenging the ill-fated $450 million capital offering by U.S. Central in December of 2008 that was wiped out by losses only weeks later.

WALL STREET – NCUA sold another $1.5 billion of its NCUA Guaranteed Notes yesterday, making a total of $19 billion of corporate bonds sold so far.

IRONDALE, Ala. – Members of Louisiana Corporate CU would not be required to acquire new capital after their corporate is merged into Corporate America CU, under preliminary plans for a merger of the two corporates.

ALEXANDRIA, Va. – NAFCU on Wednesday called on NCUA to step up its efforts to seek recoveries from third parties responsible for the massive losses experienced by corporate credit unions.

BIRMINGHAM, Ala. – Corporate America CU last Friday subpoenaed the records of the corporate credit unions run by the ousted directors of U.S. Central FCU as part of its suit challenging the ill-fated $450 million capital offering by U.S. Central in December of 2008 that was wiped out by losses only weeks later.

WALL STREET – NCUA plans to sell another $1.5 billion of corporate bonds later this week, resuming its efforts to raise funds to finance the corporate credit union bailout.

ALEXANDRIA, Va. – NCUA’s proposal to spread the growing costs of the corporate credit union restructuring to privately insured credit unions, CUSOs and league members of corporates is creating a firestorm, with some promising a legal challenge if the measure is enacted.

WASHINGTON — Is it possible NCUA's actions related to corporates, including its new corporate rule, have actually caused more harm than good? One influential analyst thinks so and believes the time has come for the agency to face some reform of its own.

LOS ANGELES — NCUA told a federal court last week that it will add new charges against directors and officers of WesCorp FCU, even as its efforts to hold leaders of the corporate credit union accountable for the failure of the $34 billion corporate may be slipping away.

PLANO, Texas – More than 1,000 credit union members of Southwest Corporate FCU, now Southwest Corporate Bridge, next week will begin voting at a special meeting on the proposed merger of the remnants of the failed corporate into Georgia Corporate FCU.

LOS ANGELES – NCUA told the federal court yesterday it will add new charges against directors and officers of WesCorp FCU, even as its efforts to hold leaders of the corporate credit union accountable for the failure of the $34 billion corporate may be slipping away.

NEW YORK – A New York appeals court dismissed a lawsuit against MBIA yesterday, potentially clearing a reorganization of the bond insurer that could cost big banks and corporate credit unions billions of dollars on their insured mortgage securities.