U.S. Central's audit passes the capital hot potato down to retail corporates, which must now adjust their capital to cover for U.S. Central's losses, as well as their own investment losses.
Most corporates have delayed recording any capital impairments until the $27 billion wholesale corporate's figures had been fully audited.
Representatives from five of U.S. Central's members all confirmed they have already, or will very soon, forward the U.S. Central audit to their own audit firms. A few said they expect to release their own 2008 audited financial statements and adjusted 2009 statements within the next two to four weeks.
When asked if they will follow the NCUA's guidance to deplete member capital accounts 63%, all said they have no reason to doubt U.S. Central's numbers; however, the decision to impair capital is for corporate auditors to decide.
Members United Corporate Federal Credit Union's Todd Adams did go on record with stronger words supporting the NCUA's guidance, saying, "at this time, Members United is following NCUA guidance as outlined in Rules and Regulations 704.2 and Letters to Credit Unions No. 09-CU-10 regarding depletion of capital from the impact of US Central and our own investment OTTI. Further charges related to US Central beyond their announced charges to capital will be decided by discussions with our outside auditors."
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