NCUA Conserves Three Corporate Credit Unions

Posted by Orb Staff on September 27, 2010 No Comments
Categories : Residential Mortgage

The National Credit Union Administration (NCUA) brought three wholesale credit unions under conservatorship Friday. The credit unions are Members United Corporate Federal Credit Union of Warrenville, Ill.; Southwest Corporate Federal Credit Union of Plano, Texas; and Constitution Corporate Credit Union of Wallingford, Conn.

According to remarks made Friday by Debbie Matz, NCUA's chairwoman of the board, a small number of corporate credit unions no longer meet the NCUA's standards for financial viability.

‘It is in the best interest of credit union members, and the entire credit union system, for NCUA to assume control of these troubled corporates, to ensure the safety of their assets and to stabilize the system,’ Matz said.

Corporate credit unions, such as those conserved by the NCUA Friday, provide administrative and financial services to the smaller, local credit unions. The NCUA seized two corporate credit unions in Kansas and California last year. The seizures are part of the regulator's corporate system resolution plan, which, according to a message posted on Southwest Corporate's website Friday, involves securitizing distressed mortgage-related assets.

The NCUA consulted with the U.S. Treasury Department and the Federal Reserve in developing a set of measures intended to strengthen the credit union system.

‘In short, NCUA is instituting a more rigorous regulatory framework that will require higher levels of capital and place greater controls on risk taking,’ Matz said Friday. ‘We are also strengthening oversight, governance and transparency practices.’

SOURCES: NCUA, Southwest Corporate

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