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May 1, 2009 - The National Credit Union Administration (NCUA) announced that a combined $8.1 billion in other-than-temporary-impairment (OTTI) charges will be reflected on the March 31, 2009 financials of WesCorp Federal Corporate Credit Union and US Central Federal Corporate Credit Union.
At WesCorp, $5.8 billion in OTTI will result in extinguishment of all paid-in-capital (PIC) and membership capital accounts (MCA). U.S. Central’s $2.3 billion in OTTI will cause the extinguishment of all PIC and 63 percent of MCAs. NCUA will release guidance to credit unions regarding PIC and MCA extinguishment.
The March 31, 2009 financials are expected from all corporate credit unions next week, stated the NCUA in its May 1 Weekly Corporate Credit Union Update. Clayton Fixed Income Services, Inc. also completed its review of all private label mortgage backed securities. The ranges of estimated credit losses for U.S. Central are $0.6 billion (optimistic); $2.2 billion (base); and $6.5 billion (pessimistic). For WesCorp the ranges are as follows: $3.0 billion (optimistic); $5.6 billion (base); and $7.9 billion (pessimistic).
To view more information, follow this link to the NCUA’s Web site.
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