It was a shock and it was unprecedented. The NCUA hammer brought down on the legacy assets held by the corporate system during 2010 caused it to reel as never before.
The head of the Credit Union League of Connecticut Monday called "good news" that term deposits held in the pending liquidation of Constitution Corporate Federal Credit Union will be held secure at fixed rate and maturity.
The three corporate credit unions placed into conservatorship Sept. 24 bring the total of seized corporates to five. Operations will continue at all five corporates.
Like other corporate credit unions, Constitution Corporate FCU's investment portfolio performed worse than previously estimated, requiring a new $1 million-plus OTTI as of March 31.
Despite a new $1 million OTTI, the $1.2 billion Constitution Corporate FCU rounded out the first quarter with a net profit of $708,000.
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When Constitution Corporate Federal Credit Union released its December 2009 financials Feb. 8, reporting an inflated $25.2 million prior undivided earnings deficit, the industry wondered if the $1.3 billion corporate was under conservatorship.
The NCUA clarified Constitution Corporate Federal Credit Union's regulatory status to the Credit Union Times, saying the $1.3 billion corporate is not under conservatorship, nor has it received a capital infusion or any other new financial support.
The $1.3 billion Constitution Corporate Federal Credit Union sunk further into insolvency, reporting an additional $24.4 million OTTI in December financials and increasing its unaudited prior undivided earnings deficit to $25.2 million.
If the NCUA's proposed corporate regulations were to take effect as written, the $4 billion Mid-Atlantic Corporate Federal Credit Union would have to replace its entire board.