|
March 2009 (updated 12-15-09)
The National Credit Union Administration (NCUA) recently approved a $1 billion injection into U.S. Central, a corporate credit union (a credit union that serves credit unions), and issued a premium on all retail credit unions, like Columbia, to recapitalize the share insurance fund. Columbia supports the NCUA's efforts to strengthen the credit union system.
Why did regulators decide to inject $1 billion into U.S. Central Corporate Credit Union?
The National Credit Union Administration (NCUA), the federal agency that regulates credit unions, took this action because U.S. Central had experienced $1.2 billion in unrealized losses due to collateral damage suffered by investing in mortgage backed securities – the same mortgage backed securities that caused the Wall Street collapse and forced the taxpayer bailout of many banks.
What are corporate credit unions?
Corporate credit unions are the retail credit union's credit union. The corporate credit unions provide services to other retail credit unions, such as loans, check clearing and investments. Corporate credit unions are a cooperative liquidity source for credit unions, much like a Federal Reserve Bank.
Are there any corporate credit unions in Washington state?
No. Credit unions headquartered in Washington are retail credit unions, also known as "natural person" credit unions.
How will this affect my credit union?
The action of the NCUA has no impact on the ability of Columbia or other retail credit unions to continue serving their members. They can and will continue offering a safe place for all their members' deposit and lending needs. However, members may notice a decrease in Columbia's capital as a result of the NCUA required premium payment(s).
The credit union system remains healthy and sound overall. Credit unions are more highly capitalized than any other sector of the U.S. financial market. Many were chartered during the depression in times far worse than these.
Will this affect my deposit insurance at my credit union?
All credit unions in Washington State are federally insured and backed by the U.S. Government. Your deposits continue to be insured up to at least $250,000 through the National Credit Union Share Insurance Fund (NCUSIF) administered by NCUA (similar to FDIC).
» More information about your deposit insurance
» Estimate your deposit insurance coverage
Will the deposit into the NCUSIF use taxpayer funds?
No. NCUA's actions on Jan. 28, 2009 to strengthen the corporate credit union system will be financed by the credit union industry. NCUA announced it will charge an insurance premium to all federally insured credit unions to cover the cost.
What is the financial health of credit unions in Washington State?
The majority of credit unions in Washington are sound and well-capitalized. There are 127 credit unions (both state and federally chartered) headquartered in Washington State with $25.6 billion in assets. The 71 Washington state chartered credit unions have an average capital level of 10.13% of assets as of December 31, 2008 (the most recently published credit union financial statements). Credit unions categorized as "well capitalized" have at least 7% in capital. The majority of Washington's credit unions have the capital sufficient to fund NCUA's January 2009 actions and remain well capitalized.
.
|
