Board Action Bulletin
Sale of All Real Estate of Five Failed Corporate Credit Unions Now Complete
ALEXANDRIA, Va. (May 21, 2015) – The National Credit Union Administration Board convened its fifth open meeting of 2015 at the agency’s headquarters today.
The Chief Financial Officer briefed the Board on the performance of the Temporary Corporate Credit Union Stabilization Fund, based on the best available preliminary and unaudited information.
For the quarter ending March 31, 2015, the Corporate Stabilization Fund’s net position increased by $52.7 million to a positive $291.2 million. The change is primarily due to improvements in projected cash flows relating to the legacy assets that secure the NCUA Guaranteed Notes and guarantee fees earned. Outstanding borrowings by the Corporate Stabilization Fund from the U.S. Treasury remained at $2.6 billion during the first quarter.
Congress created the Corporate Stabilization Fund in May 2009 to ease the immediate impact on the credit union system of the cost of resolving the corporate credit union crisis. By law, the fund is scheduled to expire in June 2021.
“At the halfway point, we’re on the right path,” NCUA Board Chairman Debbie Matz said. “The Corporate Stabilization Fund has recorded a positive net position for four straight quarters. Our aggressive recovery strategy, the improving economy and careful management of the fund and the NCUA Guaranteed Notes have all significantly minimized the costs of the corporate resolution. If current projections prevail, credit unions shouldn’t have to pay any more assessments during the fund’s final six years.”
Matz also noted the agency reached a major milestone during the first quarter of this year. NCUA completed the sale of all real estate once owned by the five failed corporate credit unions.
While the Corporate Stabilization Fund continues to have a positive net position, no funds are available to provide federally insured credit unions with an immediate rebate. NCUA must first repay $2.6 billion in outstanding borrowings from the U.S. Treasury.
The improving values of the legacy assets secure the NCUA Guaranteed Notes. Future changes in the economy or the performance of the legacy assets are likely to change the value of the assets NCUA and the Corporate Stabilization Fund can eventually access at the end of the NCUA Guaranteed Notes Program.
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