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) -- The

National Credit Union Administration

late Friday placed three corporate credit unions with assets totaling more than $17 billion into conservatorship.

The unions involved on Friday are Members United Corporate of Warrenville, Ill. with assets of $8.2 billion; Southwest Corporate of Plano, Texas with assets of $7.9 billion; and Constitution Corporate of Wallingford, Conn. with assets of $1.2 billion.

"These corporate credit unions are considered critically undercapitalized and/or have large negative net economic value (NEV) ratios," the NCUA said. "Moreover, the institutions have significant ongoing exposure to additional other-than temporary impairment (OTTI) charges and, thus, no realprospect of recapitalizing absent extraordinary government intervention."

The NCUA had previously placed U.S. Central of Lenexa, Kan., and Western Corporate of San Dimas, Calif. in conservatorship in March 2009, and total assets in conservatorship now stand at roughly $72 billion.

"These five corporates hold more than 90% of the total impaired securities, predominately private-label mortgage-backed securities, in the corporate credit union system," the NCUA added.

The plan from here is to wind down the credit unions. The NCUA said it would continue to provide the services offered by these unions for 24 months, and that it will work with


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to securitize the legacy assets.


Written by Michael Baron in New York.

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