There was little news revealed in NCUA's Virtual Town Hall today, as the regulator primarily focused on reviewing corporate stabilization events that have occurred so far.
Members of newly named Members United Bridge Corporate FCU and Southwest Bridge Corporate FCU did learn today that NCUA will likely impair their remaining member contributed capital in September financial reports, as NCUA's intervention will trigger a conversion of investments from held to maturity status to available for sale, prompting new OTTI charges.
Members of those and other seized corporates will be issued claim receipts against potential gains from legacy assets, said Deputy Executive Director Larry Fazio. If legacy assets perform better than anticipated, gains could eventually reach corporate capital holders. However, Fazio said gains must first pay off senior positions, which includes the share insurance fund. As a result, credit unions that contributed capital will only receive claims after losses to the share insurance fund, which are estimated to reach as high as $10.5 billion.
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