Credit unions

Thomas Bonds, CEO of CorporateAmerica Credit Union, said potential liability of the former board members of WesCorp and the degree to which they will have to pay related legal expenses has become due-diligence issues for anyone considering serving on a corporate's board.

Count NAFCU President Fred Becker among those who believe the WesCorp board member liability issue is unique to that corporate, and not representative of a potentially larger problem.

One analyst with knowledge of the situation related to WesCorp and the potential liability of its former board members said insurance coverage for legal fees is just one issue.

NEW YORK – Last week’s Chapter 11 filing by Ambac Assurance, which provides insurance on billions of dollars of mortgage-backed securities held by corporate credit unions, is likely to add to the price tag of the corporate bailout, just as NCUA is trying to get its hands around a loss estimate for the failure of the five corporates.

ALEXANDRIA, Va. – NCUA announced this afternoon it has separated the toxic assets from two of the latest corporate failures, Members United Corporate FCU and Southwest Corporate FCU, and created so-called bridge corporates to continue their services operations as it sells off and liquidates the investments of the two institutions.

KANSAS CITY – The corporate network announced today it plans to create an alternative to the payment systems now offered by the various corporates, including products such as ACH, national settlement (Automated Settlement), international services, and custody/safekeeping, as well as services formerly offered through subsidiaries of U.S. Central FCU.

ALEXANDRIA, Va. – NCUA is planning to amend its new corporate credit union regulation next week–even as the ink is still drying on the new rule passed just weeks ago--by restricting credit union membership to a single corporate and providing additional sources of revenue for corporates.

BIRMINGHAM, Ala. – Corporate America CU, searching for an accounting for the ill-fated capital conversion at U.S. Central FCU in the winter of 2008, filed suit against NCUA yesterday seeking some 750,000 pages of records related to the failure of the one-time $52 billion corporate credit union.

LOS ANGELES – A dozen former executives and directors of WesCorp FCU being sued by NCUA over the failure of the one-time $34 billion corporate credit union could be left holding the bag for millions of dollars in legal fees under a clause in their Directors and Office liability insurance.

WALL STREET – NCUA is expected this morning to price almost $5.4 billion of NCUA Guaranteed Bonds, by far the biggest of three offerings so far of the securities comprised of cash flows from failed corporate credit unions.

DES MOINES, Iowa-Natural-person credit unions have relied on corporate CUs to be a clearinghouse for capital. The problem, noted Jeff Russell, EVP of The Members Group, is that credit unions eventually became overly reliant on that structure.

FEDERAL WAY, Wash.-NCUA's decision to limit corporate CUs from offering longer-term investments may have opened the door for a new form of credit union cooperation.

WALL STREET-NCUA has increased the second offering of its corporate bailout bonds, expected to price this morning, to $3.76 billion from a planned $2.82 billion.

BROOKFIELD, Wis.-One person sees an emerging market in which the liquidity and payments services offered by corporates will be divided among different providers as the market evolves.

IMGCAP(1)]

WALL STREET – NCUA plans to offer another $5.48 billion of NCUA Guaranteed Notes next week, its third offering over the past month of bonds created from the cash flows of mortgage-backed securities owned by failed corporate credit unions.

LOS ANGELES – Former WesCorp CEO Robert Siravo told a federal court here he is ready to defend himself against charges of managerial negligence in the failure of the one-time $34 billion corporate, but that additional charges brought by NCUA alleging he plotted to pad his retirement benefits by millions are nothing but a “sideshow” to the main event and should be dismissed.

WALL STREET – NCUA has increased the second offering of its corporate bailout bonds, expected to price this morning, to $3.76 billion from a planned $2.82 billion.

LOS ANGELES – Former directors of WesCorp FCU urged a federal court today to dismiss a civil suit brought against them by NCUA, saying the federal regulator was well aware of what WesCorp managers were doing in the build-up to the failure of the one-time $34 billion corporate.

ONTARIO, Calif.-The Corporate Realignment Task Force has been expanded to 12 individuals from eight Western states.