NCUA Lawsuits Not Figured Into Loss Projections
The NCUA has not included the possibility that it might recoup any CU losses from litigation aimed at the issuers of failed mortgage backed securities in its corporate rescue fund calculations because that money cannot be quantified or counted upon.
The NCUA Board approved Monday an assessment of 0.25% of insured shares to help pay principal and interest on bonds issued by corporate credit unions.
The agency has four lawsuits pending against firms which sold mortgage backed securities to corporate credit unions. If it was successful, the litigation could return almost $2 billion to the Temporary Corporate Credit Union Stabilization Fund.
But while money might come, the agency said it’s not really counting it or counting on it.
“The new quarterly projections do not include any potential recoveries from settlements or litigation, which would reduce the cumulative total assessment costs,” said NCUA spokesman David Small.
“It is impossible to forecast these potential recoveries or when they would occur, however if any come to fruition, the benefit would be directly passed on to all credit unions,” Small said.