The $34 billion U.S. Central Federal Credit Union and the $23 billion Western Corporate Federal Credit Union both failed NCUA stress testing, but agency spokesman John McKechnie said the rest of the corporate network passed.
"Our review of the situation, combined with other information from the private sector entity we contracted with, doesn't suggest additional (action) is warranted at other corporates, and that's good news," McKechnie said.
Friday's conservatorships were the result of the agency's recent analysis of every corporate's investment portfolio, which concluded that investment losses across the network could reach as high as $16 billion, raising the hit on the NCUSIF from $4.7 billion to $5.9 billion.
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Regardless, the modeling showed that both U.S. Central and WesCorp had "immediate capital concerns to a level necessitating action," said Chairman Michael Fryzel in the agency's letter to credit unions numbered 09-CU-06.
"The remaining 26 corporate credit unions show a level of portfolio risk that NCUA considers manageable from the standpoint of capital adequacy," Fryzel wrote.
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