Friday, August 14, 2009

NCUA Borrowed $10 Billion in June from the Treasury

The Federal Financing Bank (FFB) reported NCUA’s Central Liquidity Facility (CLF) borrowed $10.025 billion during the month of June.

Ten billion dollars of the borrowed funds were lent from the CLF to the NCUSIF, which then lent the proceeds to U.S. Central and Western Corporate FCUs – the two failed corporate credit unions.

The two 6-month notes for $5 billion each that mature on December 21, 2009 were borrowed by the CLF at a taxpayer subsidized rate of 0.456 percent.

The rate on 6-month Treasury bill on June 22 was 0.34 percent.

I doubt that these two failed corporate credit unions could borrow at a rate of 11.6 basis points above comparable Treasury debt.

That is a pretty sweet deal.

1 comment:

  1. You conveniently have forgotten to mention the FDIC's own Chairman, Shelia Bair has went on the record stating without additional funding from the banking industry faces potential insolvency by the end of the year.

    The cost of 77 bank failures this year has depleted the fund to the tune of at least $18.2 billion.

    Maybe the ABA should work on cleaning up their own house instead of attacking credit unions.



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