SAN DIEGO -- Because it purchased so many "front loaded" investments, Western Corporate Federal Credit Union is expected to report significant permanent impairments in the near future.
Scott Hunt, Director of the NCUA's Office of Corporate Credit Unions, told Town Hall attendees this morning that while U.S. Central Federal Credit Union's investments vary in weighted average life, WesCorp's securities will mature sooner, which gives the market less opportunity to recover.
Hunt was even less optimistic when answering a question from the audience regarding the potential for WesCorp investments to recover losses. He said based on NCUA and third party expertise, WesCorp investments are highly unlikely to perform better than estimated.
The seized WesCorp purchased securities backed by mortgages concentrated in the nation's hardest hit real estate markets, including Los Angeles, Phoenix and Miami, Hunt said. Home values are still sinking in those areas, and lenders have so many foreclosures in the pipeline, they can't even process them all.
Additionally, Hunt said the NCUA currently has no plan to transition either WesCorp or U.S. Central's board back to members. However, NCUA General Counsel Bob Fenner said any member who has a concern about the NCUA's handling of the institution can query Hunt's office, and will receive a response.
Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.
Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking credit union news and analysis, on-site and via our newsletters and custom alerts
- Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, GlobeSt.com and ThinkAdvisor.com
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
