The NCUA repaid $10 billion plus interest to the Treasury Department yesterday using proceeds from selling performing assets of U.S. Central and WesCorp.
The agency raised $9.5 billion by selling select assets from U.S. Central FCU in Lenexa, Kan., and Western Corporate FCU of San Dimas, Calif. These sales included securities backed by performing residential and commercial mortgages, credit card receivables, student loans and auto loans.
The proceeds allowed the NCUA to repay a $10 billion loan from the Treasury to the agency's Central Liquidity Facility, which in 2009 transferred the $10 billion to the NCUSIF in order to lend $5 billion each to U.S. Central and WesCorp. Those loans stabilized the two corporate while they were in conservatorship.
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Future borrowings from the Treasury for corporate stabilization will be assigned to the Corporate Stabilization Fund.
"Paying off the $10 billion in loans clears the balance sheets of both the CLF and the Share Insurance Fund," said NCUA Chairman Debbie Matz. "This is a significant first step in NCUA's orderly corporate resolution process."
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