WASHINGTON Jan 28 U.S. regulators moved to
guarantee deposits at corporate credit unions on Wednesday and
inject $1 billion into the umbrella entity for these
institutions to offset its losses on securities backed by
The National Credit Union Administration's board said the
actions were designed to support a system facing "unprecedented
strains on liquidity and capital due to extraordinary market
disruptions and the current economic climate."
Corporate credit unions are the retail credit union's
credit union, providing services including lending, and check
and payment clearance services.
U.S. Central Federal Credit Union, with 26 corporate credit
unions as members, said on Thursday it expected a 1.1 billion
loss for 2008 due to a decision to write down $1.2 billion in
"other-than-temporary impairments" in its portfolio.
The NCUA said in a statement it would issue a $1 billion
note to Lenexa, Kansas-based U.S. Central to offset the
In other actions, NCUA said the National Credit Union Share
Insurance Fund would guarantee member shares in corporate
credit unions through February and will extend the guarantee on
a voluntary basis to all corporate credit unions through
December 31, 2010.
The NCUA also proposed restructuring the corporate credit
union system and said it would declare premium assessments to
restore the credit union insurance fund.
The credit union-funded NCUA, with the backing of the U.S.
government, operates and manages the fund insuring nearly 89
million account holders in all federal credit unions and the
majority of state-chartered credit unions.
(Reporting by John Poirier; Editing by Tim Dobbyn)