Credit unions

LENEXA, Kan.-When U.S. Central FCU surprised everyone last month - including NCUA - with a massive $1.1-billion loss for its recently completed fourth quarter it was precipitated by the implementation of a controversial and often confusing accounting term called other-than-temporary impaired, or OTTI.

GLENDALE, Calif.-For the same reason many believe the best way to remove a Band-Aid is quickly, a number of credit unions are saying they prefer to write down whatever their final tab will be for NCUA's Corporate Stabilization Plan.

LENEXA, Kan.-Several corporate credit unions, already weighed down by losses on their mortgage backed securities, are delaying a final accounting for 2008 as they wait to determine how much of the huge $1.1-billion loss at U.S. Central FCU will flow down to them.

YORBA LINDA, Calif.-Two national CPA firms are delivering much the same advice that was handed down to CUs at the GAC last week: Wait for more details from the NCUA and AICPA before making accounting plans regarding the Corporate Stabilization Plan.

WASHINGTON – The House is expected to vote on an overall spending bill tomorrow that will include an extension of the funding limit for the emergency credit union loan fund, the Central Liquidity Facility, until Sept. 30.

LENEXA, Kan. – When U.S. Central FCU surprised everyone last month–including NCUA–with a massive $1.1 billion loss for its recently completed fourth quarter it was precipitated by the implementation of a controversial and often confusing accounting term called other-than-temporary impaired, or OTTI.

LENEXA, Kan. – Several corporate credit unions, already weighed down by losses on their mortgage backed securities, are delaying a final accounting for 2008 as they wait to determine how much of the huge $1.1 billion loss at U.S. Central FCU will flow down to them.

WASHINGTON-NCUA's decision to inject a $1-billion capital note into U.S. Central and compel natural person credit unions to shore up the share insurance fund to the tune of an estimated $4.7 billion was a "cautious and deliberate" move to revamp the corporate structure, keep open all possibilities and ensure costs did not spiral out of control, says the head of Callahan & Associates.

PORTLAND, Ore.-If enacted, NCUA's proposed corporate bailout plan is going to push hundreds of credit unions to the edge of survivability, according to one analyst.

WASHINGTON-With their hands statutorily "tied," state regulators are mulling their options should the proposed Corporate Stabilization Plan's take effect and push scores of CUs under PCA.

WASHINGTON-NCUA and the credit union lobby were working last week on several angles aimed at stretching out the $5-billion cost of the corporate credit union bailout over numerous years, in order to ease the strain on credit unions.

WASHINGTON – The credit union lobby appears to be coalescing around a proposal to shift the burden of the $5 billion corporate credit union rescue from the National CU Share Insurance Fund to the Central Liquidity Facility, which would stretch out the repayment of the plan and minimize the cost to credit unions.

ARLINGTION, Va.-NAFCU has named Mike Lussier chairman of its new corporate task force, formed in response to an NCUA plan to assess natural-person credit unions to help recapitalize U.S. Central Credit Union.

WASHINGTON-Both CUNA and NAFCU have proposed using funds from the Central Liquidity Facility to bolster the corporate credit union system.

WASHINGTON-Credit unions could step up to the plate to fix the problem themselves in a much less painful way by depositing up to $15 billion in the corporates, providing additional liquidity and obviating need to liquidate underwater assets - and realize all those as-yet unrealized losses - to cover any liquidity demands.

WASHINGTON-CUNA has suggested NCUA seek a portion of the funds that may - or may not - still be available under the Troubled Asset Relief Program (TARP) to help replenish the NCUSIF.

RALEIGH, N.C. - Just as the banking regulators are exploring whether to segregate banks' illiquid assets into a single entity, one CU executive is also proposing an initiative to separate out the bad assets from corporate assets; call it a "good corporate, bad corporate" plan.

WASHINGTON-Priority No. 1 for the credit union trade groups right now: mitigating the cost of rescuing U.S. Central Corporate FCU and the corporate system.

WASHINGTON-CUNA is being scrutinized for its role in the bailout of U.S. Central FCU and the corporate credit union network, which is estimated could cost credit unions $5 billion to fund.

LENEXA, Kan. – U.S. Central FCU yesterday confirmed the departure of a second investment officer, in the face of a $1.1 billion loss on its portfolio fo 2008.