Credit unions

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.

WASHINGTON – CUNA President Dan Mica responded to criticism yesterday of CUNA’s role on the board of U.S. Central FCU, the focus of NCUA’s $5 billion corporate credit union rescue.

WALL STREET – Standard & Poors placed the 10 corporates it rates on its CreditWatch Negative yesterday because its believes the growing opposition to NCUA’s corporate bailout from natural person credit unions may jeopardize the plan.

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 to cost credit unions $5 billion to fund.

BROOKLYN, N.Y. – The chief executive of another billion-dollar credit union called on NCUA yesterday to scrap its $5 billion bailout of the corporate credit union network and urged the federal regulator instead to takeover the corporates.

IRONDALE, Ala. – NCUA’s bailout of the corporate network appears to be creating a rift between the beneficiaries of the plan, U.S. Central FCU and seven large corporates, and the other 19 corporates, most of which only have negligible losses on their investments.

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

WASHINGTON – An outcry over the $5 billion cost of the corporate credit union rescue has prompted the credit union lobby to ask Congress to open up the emergency lending fund, the Central Liquidity Facility, to corporate credit unions in hopes of shifting some of the cost of the huge bailout from the National CU Share Insurance Fund.

WASHINGTON – Recriminations were flying yesterday over responsibility for the bailout of U.S. Central FCU and the corporate network, with executives calling for the ouster of key corporate management, the elimination of the corporate system, and even the removal of the NCUA Board for its role in the unfolding crisis.

MILWAUKEE – A suit filed this week by the credit union owners of Central States Mortgage Co. against the founders of the company, one of the state’s largest mortgage lenders, illustrates some of the perils of the additional roles corporate credit unions have taken on in recent years as they sought new sources of income.

WASHINGTON – A key House panel endorsed a bill yesterday that would stretch out the $5 billion deposit insurance premium credit unions will be charged to pay for the rescue of the corporate credit union network to as long as five years.