Corporate credit unions

WASHINGTON — Credit union leaders agreed there should be a consolidation of corporate credit unions but consensus was elusive on most other aspects of a reform of the corporate system during a symposium held last week by NCUA celebrating the 75th anniversary of the Federal CU Act.

An article in Tuesday's Daily Briefing reported that U.S. Central charged off $800,000 of exposure related to Lehman Brothers and is expected to take additional charges. According to NCUA, U.S. Central wrote off all of its exposure to Lehman Brothers interest rate derivative contracts when the firm filed for bankruptcy in fall 2008 and has no residual loss exposure to any prior Lehman Brothers investment.

NEW YORK – Eight months after the collapse of Lehman Brothers Holdings corporate credit unions are chalking up millions of dollars of additional losses on their exposure to the venerable Wall Street brokerage as the huge case continues to unravel in bankruptcy court.

ATLANTA – The FDIC opted Friday to liquidate the corporate credit union-like Silverton Bank, rather than sell the failed bankers’ bank to a group of private equity firms.

DALLAS – Southwest Corporate FCU said it has introduced an Image Deposit Return service in the Federal Reserve’s 11th District and plans a nationwide roll-out next month.

SAN DIMAS, Calif. – WesCorp FCU, struggling under a massive $7.6 billion loss for 2008, is looking at closing some of its branch item processing facilities as part of a major cost-cutting.

BURLINGTON, Mass. — EasCorp FCU said it raised new equity capital with an $18 million offering of preferred paid-in-capital accounts II, considered Tier One capital under generally accepted accounting principles, or GAAP.

TALLAHASSEE, Fla. — Losses continued to be reported by corporate credit unions last week, with reverberations being felt by groups that included CUNA and the National Credit Union Foundation.

WASHINGTON – It’s not only corporate credit unions that are being affected directly by their investments in membership capital shares at U.S. Central, as CUNA, which is also a member of U.S. Central, said yesterday it charged-off 23% of its MCS, and will probably take additional charges in the future.

TALLAHASSEE, Fla. – Exposure to U.S. Central FCU combined with charge-offs of mortgage-backed securities have forced more corporate credit unions to report big losses in recent days.

DALLAS – Southwest Corporate FCU became the latest corporate credit union to restate its 2008 financials to show a big loss, this one of $624.3 million.

BURLINGTON, Mass. – EasCorp FCU said it raised new equity capital with an $18 million offering of preferred paid-in-capital accounts II, considered Tier One capital under generally accepted accounting principles, or GAAP.

ALEXANDRIA, Va. – NCUA is preparing to transfer the $5.9 billion cost of the corporate credit union bailout from the National CU Share Insurance Fund to the newly created Corporate CU Stabilization Fund, which would allow credit unions to pay off the bailout charge over seven years.

COLUMBUS, Ohio – Corporate One FCU said Friday that charges related to the corporate credit union bailout erased $21.6 million of net income reported earlier for 2008 and created a $18.2 million loss instead.

LAS VEGAS — Credit unions here got their first chance to meet with the acting CEO of WesCorp, which was placed into conservatorship by NCUA earlier this year, and to get an update on what the corporate is doing to right the ship.

ALEXANDRIA, Va. – NCUA said yesterday the $3.2 billion of losses reported by credit unions was almost all related to costs associated with the corporate credit union bailout.

SAN DIMAS, Calif. – The annual report issued by WesCorp FCU last week shows losses so steep that the 1,020 credit union members have virtually no chance of recovering anything on their $2 billion of capital in the failed corporate credit union.

WALLINGFORD, Conn. – Constitution Corporate FCU said the combination of losses on its distressed mortgage securities and the write-down of its shares in U.S. Central FCU has eliminated all of its retained earnings and will cause it to start using its member capital shares to absorb additional losses.

WARRENVILLE, Ill. – Members United Corporate FCU said last week that losses of $511 million it reported the previous month erased $424.7 million of retained earnings and created negative retained earnings of $124.3 million.

ALEXANDRIA, Va. – NCUA agreed Friday to allow corporate credit unions to write-down 23% of their membership capital shares in U.S. Central FCU–instead of 63% estimated earlier–effectively giving corporates $500 million than was expected.