Now that U.S. Central Federal Credit Union has released its 2008 audit, the wholesale corporate's members, and in turn, their natural person credit union members, can finally close the books on other-than-temporary impairments incurred so far by the corporate network.
But what about the fate of a far greater amount of unrealized losses-$11 billion at U.S. Central alone- which could become permanent impairments should the economy perform worse than anticipated?
CUNA Chief Economist Bill Hampel said the future performance of local housing markets will determine actual corporate losses.
"Everybody wants to know when the losses will come and how much they will be; but, the reality is, nobody will know until the future becomes the present," he said.
Hampel said the housing market is performing better than was predicted earlier this year, and added he thinks the worst markets have already bottomed out.
"The housing market is definitely leveling off," Hampel said. "But whether it's enough to protect corporate owned bonds, I don't know."
However, he did express "some room for optimism" that bonds owned by U.S. Central and WesCorp will perform as expected, and the NCUA's loss estimates will hold true.