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.

    http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=alsJZqIFuN3k

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aqxHLAHU_m2k

    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.

    ReplyDelete

 

The content is provided for educational purposes only, with the understanding that neither the authors, contributors, nor the publishers of this site are engaged in rendering legal, accounting or other expert or professional services. If legal or other expert assistance is required, the services of a competent professional should be sought.

Comments appearing in response to articles appearing on this site do not necessarily reflect the views of the ABA. ABA makes no representations regarding the truth or accuracy of commentary or opinions that may be posted in response to the articles that appear on this website.

The inclusion herein of any link to a website, either in the text of an article or in a comment, does not denote any approval, sponsorship, or endorsement by the ABA, and ABA is not responsible for the content or opinions expressed on those linked websites or related commentary. This content is not licensed to third parties sites and is not affiliated with any third party site. Any reference to the author or this content on any third party site on the Internet is not authorized by the ABA.

It is the policy of the American Bankers Association to comply fully with all antitrust laws. Certain discussions should be considered off-limits, including those that contain competitively sensitive data such as price and cost information, or statements that could be construed as reflecting an attempt or desire to control or influence a particular market or markets. Future pricing or other prospective competitive information should never be shared.