Almost 11 months after it was due, the NCUA has not given Congress its annual report for 2008, and several sources have said that the reason for the delay is a dispute with its auditing firm, Deloitte and Touche, relating to the problems of the corporate credit unions.
According to two industry sources, the NCUA is attempting to determine how to account for the losses incurred when it placed U.S. Central Corporate Credit Union and Western Corporate Credit Union into conservatorship. Although the agency placed the corporates into conservatorship in March 2009, the Federal Accounting Standards Board changed the accounting standards so that the losses recorded in March 2009 were determined to have occurred in 2008. The agency could issue a combined financial statement that incorporates the finances of U.S. Central and WesCorp with those of the agency.
Another issue is how the agency will identify the corporates' legacy assets as of Dec. 31, 2008. Classification of those assets could have an effect on corporate restructuring and recapitalization going forward.
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