Monday, November 12, 2012

$5.1 Billion Owed to Treasury

Buried in the last paragraph of a NCUA press release heralding the repayment of a Medium Term Note for failed Western Corporate FCU, NCUA mentioned that agency has outstanding borrowings of $5.1 billion from the United States Treasury. This is up from $3.2 billion as of June 25, 2012.

This borrowing from the Treasury helped the Temporary Corporate CU Stabilization Fund to handle the front loaded corporate credit union resolution cost.

While credit unions are ultimately responsible for repaying this $5.1 billion in debt and have until 2021 to repay the debt, they should also recognize that they received a significant benefit from the Treasury. This made the cost of corporate credit union bailout resolution more manageable for credit unions.


  1. Guess my math skills need upgrading!
    Your earlier blog says the potential assessments SHRINK to a range of $6-$9 billion.
    BUT, this says we owe treasury $5 billion.
    Are we to assume that the market value of the Legacy Assets in the TCCUSF (-$12 billion, yes that MINUS 12 BILLION) is not our responsibility?
    If not our's than who?
    Keith can you clear up?

  2. This is what NCUA is saying on its Corporate CU Resolution page. Projected resolution cost is between $6 bilion and $8.9 billion. Credit unions have already paid $4.1 billion in assessments. Remaining assessments are between $1.9 billion and $4.8 billion.

  3. How can that be true?
    It doesn't work!
    If we owe treasury 5 billion and there is a market value on the legacy assets that is 12 billion less than book value, that's assessments of perhaps as much as 17 billion....ASSUMING the credit mark doesn't get worse!
    Keith, what are we missing?
    Maybe Issa can look into this too?



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