As Prepared for Delivery on March 18, 2021
Thank you, Anthony, Keith, and Eugene, for your presentation. And, a special thanks to your teams, as well, for their careful stewardship of the NCUA Guaranteed Notes program and the asset management estates of the five failed corporate credit unions.
Today marks a critical milestone in the Corporate System Resolution Program. With the last NCUA Guaranteed Note scheduled to mature in June, we are nearing the end of this landmark initiative that allowed the credit union system to absorb over time the failures of U.S. Central, WesCorp, Southwest, Members United, and Constitution corporate credit unions.
A decade ago, very few of us could have imagined the NCUA would return any funds — let alone two rounds of distributions — to the former capital holders at these five failed corporates. And, we still have the potential for other distributions in the future.
The success of the NCUA Guaranteed Notes program is a testament to the leadership shown by previous NCUA Chairmen and Board members, who supported this program and our recovery efforts over the years, even when it seemed the chances were remote for the Corporate System Resolution Program to end with any distributions to capital holders.
This success is also a testament to the efforts of the NCUA staff over the last decade. Their wise actions, careful management, and perseverance gave the NCUA the ability to manage and reduce potential losses to the system. These exceptional efforts contributed to the least-cost resolution of the corporate crisis and have allowed us to recover and return nearly $540 million in depleted capital with more distributions likely to come. Thank you all for a job well done.
To be sure, other factors have contributed to the success of the Corporate System Resolution Program, including a persistent low-rate interest environment and rising housing prices over much of the last decade. The shrewd decision to pursue litigation against the Wall Street firms that sold faulty mortgage-backed securities is also a key reason why we are now making distributions. Indeed, without those legal recoveries, there would be no checks sent to capital holders.
As we wind down the remaining asset management estates, we will continue to minimize costs and maximize returns. In doing so, we will fulfill our fiduciary responsibilities as both the conservator and liquidator of the failed corporate credit unions and return even more funds to capital holders.
That money, in turn, can be used to assist and make loans to the millions of credit union members experiencing economic hardships because of the COVID-19 pandemic, especially to people of color and those in low-income areas disproportionately affected by the pandemic. Given the cooperative philosophy at the heart of the credit union movement, credit unions have a moral obligation to step up and help these communities recover and start anew in the months ahead.
Thank you again, Anthony, Eugene, and Keith, for your briefing today. I now recognize Vice Chairman Hauptman.