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The revelation that NCUA sold $800 million worth of U.S. Central FCU and Western Corporate FCU securities in mid-September disclosed the tail end of a $10 billion covert effort to repay borrowings from the U.S. Treasury.

NCUA applied the $800 million and billions more in proceeds from previous sales of performing investments toward $10 billion in loans made to the two corporates in 2009 in an attempt to shore up liquidity. Without the loans, both WesCorp and U.S. Central would have been forced to sell the bonds while the market was low and write down billions in noncredit losses, said NCUA Deputy Executive Director Larry Fazio.

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Peter Westerman


Credit Union Times

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