A debate is brewing regarding the necessity to take U.S. Central Federal Credit Union and Western Corporate Federal Credit Union under conservatorship.
Callahan and Associates President Chip Filson posted a column to the research firm's Web site today, accusing the NCUA of "troubling" actions in three areas, and said at worst, the agency was "creating a crisis where one did not exist."
Filson will lead a Callahan Webinar on the topic today at 4 p.m. Eastern Time. (www.creditunions.com)
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Filson said the drastic swing in the NCUA's estimated corporate losses, prompted by six weeks of staff research and a report from fund management firm PIMCO, should have been questioned by the NCUA Board.
"The impossibility of point estimates is acknowledged by NCUA in their $7 billion to $16 billion range of loss projections presented in [the NCUA's] Webinar," Filson wrote.
"None of these losses have yet occurred. However, the board is asking credit unions to write off their entire 1% deposit in the NCUSIF and for shareholders in US Central and Wescorp to additionally write off their entire MCS-PIC holdings. All this based on a change in a 'point estimate' of at least 500% in six weeks for two of the corporates."
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