WesCorp Losses Far Outpace Other Corporates
According to legacy asset loss estimates provided to Credit Union Times by the NCUA, investments made by Western Corporate FCU are generating far more losses than those that were made at other failed corporates.
As of year-end 2012, WesCorp’s estimated losses were $5.73 billion, representing 84.4% of the nearly $6.8 billion in total estimated legacy asset losses. However, according to a chart provided by the NCUA, the corporate formerly located in San Dimas, Calif. contributed just 39% of total legacy assets.
Federally insured credit unions will pay between $1.6 billion to $3.9 billion in remaining corporate assessments and have paid $4.1 billion toward corporate stabilization costs since 2009. The NCUA has estimated the 2013 corporate assessment will be between 8 and 11 basis points. The exact number is expected to be revealed during a month board meeting sometime this summer.
The improved estimated loss figures could revive the debate over whether some corporates–in particular, Southwest Corp and Members United–needed to be seized. Former volunteers from the two corporates, who asked not to be identified, said they still question whether the wholesale credit unions could have recovered if allowed to hold their portfolios to maturity. Chip Filson, Callahan & Associates chairman, has long questioned the need to seize the two, saying in a 2012 report that they were “solvent with positive equity,” and monthly financial reports “showed improving financial conditions both in terms of operating results and market valuations of securities up to the date of the NCUA takeover.” Filson was unable to speak with Credit Union Times by deadline.