Since U.S. Central Federal Credit Union released first-quarter financials that showed only a 23% impairment to member capital accounts, not 63% as reported two weeks earlier, financial managers have debated how to record the evolving losses.

In a Letter to Credit Unions released May 22, the NCUA stressed its original credit loss estimate of a 63% MCA impairment has not changed; rather, "discounting the cash flows from these losses in accordance with GAAP results in a reduction in other-than-temporary-impairment (OTTI) charges to $1.8 billion," the agency stated.

Leigh Philibosian, senior vice president of marketing at the $3 billion Mid-Atlantic Corporate Federal Credit Union, said her institution is "kind of in limbo" over the difference between the two U.S. Central MCA loss figures, because the decision is up to audit firms.

Scott Waite, Patelco Credit Union chief financial officer who also serves on a Financial Accounting Standards Board advisory board and CUNA's accounting task force, said Philibosian's "in limbo" description is fitting, because the complexity and change involved in determining losses have made auditors, regulators and even organizations like the AICPA avoid taking a definite position.

"It seems to me credit unions just want to know whether to march left or right," Waite said. "They're saying, 'we might disagree with the decision, but we want to at least all march in the same direction.'"

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