The $2.1 billion Constitution Corporate informed members today it will write off 72.4% of member capital, a total of $48.4 million, as of July 31. The balance sheet adjustment will cover Constitution Corporate's accumulated deficit; the Wallingford, Conn.-based corporate reported a -$31.5 million in retained earnings as of May 31, according to its 5310 report.

To maintain safety and soundness, dividends will only be paid on remaining membership capital balances, President/CEO Robert Nealon told members today in an e-mail obtained by the Credit Union Times.

The losses are the result of U.S. Central's second quarter impairments and anticipated credit losses on Constitution's own investment portfolio. As of May 31, Constitution Corporate's unrealized losses totaled nearly $310 million.

The figures are preliminary, but Nealon told members Constitution Corporate has nonetheless shared the loss estimates with the NCUA.

A Thursday morning conference call will review the impairment in detail for members, and additional meetings will be scheduled on site at Constitution Corp so members can discuss capital accumulation options.