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Michigan Credit Union League Home » Information Services » Publications » News Articles  

NCUA Official: 8-11 bps Likely this Year for Corporate Resolution   (Misc News: June 8, 2012)

The NCUA board is expected to vote next month on a corporate assessment of between eight basis points and 11 bps, which would raise between $800 million and $1.05 billion, according to a top agency official.

CU Journal reported that the NCUA is calculating the updated loss assessments for each of the five failed corporate credit unions, minus recoverings from lawsuits and sale of assets, according to Larry Fazio, NCUA deputy director.

If the board approves the charge next month, it will be assessed for the third quarter – as it has been the last two years, when federally insured credit unions paid a total of $3.3 billion to fund the corporate resolution.

NCUA is still pursuing settlements with several Wall Street banks for the sale of mortgage-backed securities to the five corporates and with bond insurers over their coverage of failed bonds held by the corporates, Fazio told the trade paper. Another suit against Wall Street banks is still being reviewed, he said.

The only significant recoveries have been the payments of $145 million by Deutsche Bank, $20.5 million by Citigroup and $5.25 million from HSBC for their sale of MBS to the failed corporates.

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