NCUA today placed three corporate credit unions into conservatorship: the $7.4 billion Members United Corporate FCU, the $9.5 billion Southwest Corporate FCU and the $1.2 billion Constitution Corporate FCU.
At all three institutions, top management and volunteers were dismissed from their positions.
The three, along with U.S. Central FCU and Western Corporate FCU, own all of the securities that make up NCUA's $50 billion legacy assets plan. However, the three were not seized just to implement the plan.
Rather, Deputy Executive Director Larry Fazio said NCUA conducted a comprehensive analysis of the entire corporate system, with the assistance of the Federal Reserve, U.S. Treasury, and "lots of bonds experts." The analysis revealed the five corporates would not be able to recover from losses that depleted all or nearly all net worth.
Business will continue as usual in the three newly seized institutions, to enable them to continue to provide products and services to members who depend upon them, he said.
