Corporate Capital Distribution Process

Following the liquidation of five corporate credit unions during the Corporate System Resolution effort, the NCUA Board, as liquidating agent, issued claim certificates to all liquidated corporate credit union membership-capital account (MCA) and paid-in capital (PIC) holders. The claim amounts were based on the balance each credit union holding MCA and PIC was instructed to write off in the year preceding liquidation, during the financial crisis, regarding MCA and PIC balances at corporate credit unions. These certificates represent claims against the individual asset management estates (AMEs) of each failed corporate credit union.

Since then, employees in the NCUA’s Office of General Counsel, Office of Examination and Insurance, the Asset Management and Assistance Center (AMAC), and members of the NCUA Guaranteed Note (NGN) Committee have been working to maximize recoveries to the AMEs. Until the AMEs are closed, an evaluation of recoveries and obligations will be done at least semi-annually to determine if sufficient funds are available for distribution to MCA and PIC holders.

2021 Corporate Credit Union Capital Distributions

An evaluation conducted by the liquidating agent determined that sufficient funds were available for U.S. Central Federal Credit Union (U.S. Central), Members United Corporate Federal Credit Union (Members United), and Southwest Corporate Federal Credit Union (Southwest) AMEs’ MCA holders to receive a distribution. The liquidating agent approved a $951 million distribution based on the June 30, 2021, financial statements and payable by August 31, 2021. (Note this distribution includes $233 million of funds that flow through U.S. Central AME to Members United and Southwest AMEs, providing a source of funds to these estates in addition to their own funds, which are then combined and redistributed to their claimants. On a net basis this results in $951 million to the system.) The following chart shows the distribution as a percentage of each MCA holders original claim against the respective AMEs:

% of original MCA claim U.S. Central Members United Southwest
August 2021 Distribution 46.0%* 54.6%* 34.6%

*The actual distribution amounts increased from the projections announced in June.

This is a pro-rata distribution from the AMEs to credit unions holding MCA claim certificates from each respective AME. Additionally, this is the final distribution for Southwest MCA holders which received a full recovery.

This distribution is to the MCA claim holders of U.S. Central, Members United, and Southwest only; no MCA claimants of other corporate AMEs are eligible for a portion of the distribution. The distribution has no impact on the health or operating level of the Share Insurance Fund.

Per the NCUA regulations, 12 C.F.R. §709.5(e), “[a]ll unsecured claims of any category or class or priority described in paragraphs (b)(1) through (b)(7) of [§ 709.5] shall be paid in full, or provisions made for such payment, before any claims of lesser priority are paid. If there are insufficient funds to pay all claims of a category or class, payment shall be made pro rata. Notwithstanding anything to the contrary in [§ 709.5], the liquidating agent may, at any time, and from time to time, prior to the payment in full of all claims of a category or class with higher priority, make such distributions to claimants in priority categories described in paragraphs (b)(1), (b)(2), (b)(3), (b)(4), and (b)(5) of [§ 709.5] as the liquidating agent believes are reasonably necessary to conduct the liquidation, provided that the liquidating agent determines that adequate funds exist or will be recovered during the liquidation to pay in full all claims of any higher priority. If a surplus remains after making distribution in full on all allowed claims described in paragraphs (b)(1) through (b)(9) of [§ 709.5], such surplus shall be distributed pro rata to the credit union's shareholders.”

After ensuring adequate funds exist to fully pay all prior levels, it was determined that a partial distribution to MCA holders at § 709.5(b)(7) for U.S. Central, Members United, and Southwest is permissible.

Calculating the Capital Distribution

On a quarterly basis, the liquidating agent calculates the anticipated recovery on assets and estimated expenditures for each corporate AME, along with tabulating past actual results. The reports on these calculations for the last four years can be found on the NCUA’s website.

All five corporate AMEs (U.S. Central, Western, Members United, Southwest, and Constitution) still have potential obligations to reimburse the NCUA which represent more senior claims in the payout priorities. NCUA regulations permit distributions to MCA and PIC holders only after all senior claims have been fully satisfied, or sufficient provisions have been made.

The liquidating agent has compared each estate’s cash to its remaining obligations. This analysis, which is completed semi-annually in accordance with standard procedures, shows that funds are available for an interim payout to MCA holders of U.S. Central, Members United, and a final payout for Southwest.

In Millions of Dollars
As of June 30, 20211
U.S. Central Western Members United Southwest Constitution
Available Cash 787 0 148 113 0
Cash from U.S. Central Capital Distribution2 0 313 124 109 143
All Remaining Fiduciary Liabilities (12) (2,845) (3) (3) (32)
Distribution Potential 775 (2,814) 269 219 (18)
Approved MCA Distribution (775) 0 (269) (140)4 0
Approved PIC Distribution 0 0 0 0 0

The chart below reflects the potential future distributions to members and capital holders of the liquidated corporates effective December 31, 2021, and beyond. Our projections indicate that additional funds will be available for distribution to U.S. Central, Members United, Southwest, and Constitution in the future. However, until the underlying distressed assets have been monetized, and liabilities paid, there are no guarantees of future performance. The liquidating agent will continue to take whatever actions are needed to safeguard and monetize assets under its management. Evaluations of future distributions will be performed on a semi-annual basis based on June and December financials.

In Millions of Dollars as of June 30, 20211 U.S. Central Western Members United Southwest Constitution
Net Realizable Value Estimate of Remaining Legacy Assets5 851 399 80 133 46
Projected Additional Recovery from US Central AME N/A 45 133 113 15
Projected Funds Available to Distribute 8526 (2,370) 214 325 43
Remaining MCA/PIC to Distribute (1,062) (1,144) (177) 0 (67)
Potential Dividend to Members7 0 0 37 325 0

Corporate Capital Distributions and the Share Insurance Fund

The Temporary Corporate Credit Union Stabilization Fund was established for the corporate credit union liquidations as part of the financial crisis in 2010. The Stabilization Fund was principally responsible for covering losses of the failed corporates until it was closed and the liabilities were assumed by the Share Insurance Fund in 2017.

The payment of insured shares by the Share Insurance Fund becomes a claim against the liquidation estate of the closed institution, under 12 C.F.R. § 709.5(b)(6). Before any funds can be paid out at the (b)(7) level – MCA – all higher levels must be paid in full, or provisions made for such payment.

The Share Insurance Fund has been made whole for the payout of insured member shares with respect to U.S. Central, Members United, and Southwest. Additionally, provisions were made for all anticipated continuing liquidation expenses, including obligations to reimburse the Share Insurance Fund for potential guaranty payments or the funding of other liquidating expenses for these three estates. Thus, the distribution to MCA claim certificate holders of U.S. Central, Members United, and Southwest will have no impact on the Share Insurance Fund.

Electronic Funds Transfer Payments Form

This authorization agreement for electronic funds transfers (EFT) is intended for use by federally insured credit unions, not NCUA vendors or the public.

NCUSIF Authorization for EFT Payments in PDF (28 KB)

This form provides credit unions with a convenient means of providing the liquidating agent with needed information to make electronic payments to credit unions. The completed form can be mailed or faxed to the liquidating agent using the information provided on the bottom of the form.

Any comments or questions should be directed to the NCUA’s Office of the Chief Financial Officer at or hotline 877.452.1463.


1 Numbers may not add due to rounding.

2 The approved U.S. Central capital distribution to the other four AMEs has been included with the June 30, 2021 financial information to allow the calculation to reflect these funds as part of those AME’s Distribution Potential.

3 As the Share Insurance Fund still has valid claims against the WesCorp and Constitution Corporate AMEs, their share of the distribution will be used to pay down the liability owed to the Share Insurance Fund.

4 Approved distribution amount is less than the potential distribution potential since after this distribution capital holders will have received 100 percent. A liquidating dividend payment is anticipated in the first quarter of 2022, based on December 31, 2021 financials.

5 Remaining assets with legal holds (in millions): U.S. Central – $499; Western – $225; Members United – $37; Southwest – $61; and Constitution – $19.

6 As this amount is gross, and the prior line in the chart shows distributions from U.S. Central to the other four corporates, the funds available to distribute excluding the other AMEs equals $546 million. This distribution reflects the remaining projected distribution over time and is subject to the orderly liquidation of remaining securities.

7 Dividends can only be paid after all creditor claims have first been satisfied.

Last modified on