Wednesday, September 21, 2011

NCUA Tapped Line of Credit at Treasury on July 27

According to the August 29 transcript from the NCUA Board meeting, NCUA tapped its line of credit at the Treasury in July.

NCUA Chief Financial Officer, Mary Ann Woodson, stated:

"On July 27 NCUA borrowed $3.5 billion from Treasury to satisfy the balance of the bridge note payable and other miscellaneous obligations which were paid on October 1, excuse me, which were paid on August 1, 2011."

Mary Ann Woodson also acknowledges that NCUA anticipates borrowing a total of $5.5 billion from the Treasury of its $6 billion line of credit to meet near-term cash flow needs.

While credit unions will ultimately repay this borrowing, tax-exempt credit unions are receiving valuable assistance from the U.S. Treasury and ultimately the American taxpayer.

This borrowing does not count other assistance that came from the Treasury. For example, Treasury lent funds to the Central Liquidity Facility that were funneled to two corporate credit unions to keep them afloat and prevent a systemic collapse of the credit union industry.

So whether credit unions want to recognize it or not, they were bailed out.


  1. Actions within statutory framework at no cost to taxpayers is not a bailout. And the amount is small, nearly invisible, compared to banks'

    $700 billion in capital injections
    $200 billion in bad-for-good collateral swaps
    $208 billion in loss absorption asset guarantees
    $3.74 Trillion in discounted liquidity

  2. Keith.
    when is the GAO investigation of the NCUA due to be released?
    As I recall, GAO was asked by congress to investigate the CCU situation and PCA on NPCU.
    Do you have any information on this?

  3. No later than 1 year after the enactment of the legislation.

  4. GAO looking at NCUA is a mere distraction, as the bank regulators eat their regulated.

    This summer, the FDIC authorized lawsuits against 266 officers and directors in an effort to recoup more than $6.8 billion in losses stemming from the credit crisis. An additional 172 residential malpractice and mortgage fraud lawsuits are pending.

    Meanwhile, the Federal Housing Finance Agency (FHFA), as conservator for Fannie Mae and Freddie Mac, just filed $196 billion in lawsuits against 17 mostly FDIC insured banks and certain of their officers. The suits allege violations of federal securities laws and common law.

    Net difference is potentially another $190 billion in bank losses to potentially be covered by taxpayers, and eventually added to the embarrassing total above. Bailouts? Ha!

  5. By the way, credit unions are paying the same treasury rates as the FDIC as it has the right to borrow $20 billion I believe for its fund. That is in addition to the bailouts referenced above in addition to the $150 billion back in the 1990s that credit unions (as members of the FHLBs) are helping to repay.

    I will take our Chevy Luv backing up to 1500 Pennsylvania Ave vs. the banks' using 18 wheelers to get their cash.



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