Nearly 900 credit unions that had membership capital shares in the failed Southwest Corporate Federal Credit Union will share in a $171 asset management estate payout anticipated for July, the first of other payments to come from that and other estates from the five corporates that failed during the financial downturn of 2008, the federal credit union regulator said Thursday.
The agency anticipates that former Southwest members will eventually recover 100% of their member capital shares under both the “base” and “adverse” scenarios presented to the agency board during Thursday’s briefing.
Details on these and potential other future payouts resulting from the NCUA Guaranteed Notes program, part of the agency’s program for resolving the five failed corporates, were provided in a briefing during Thursday’s open National Credit Union Administration (NCUA) Board meeting, which was held remotely.
The NCUA issued certificates in claim to Southwest Corporate’s member capital holders in 2010, and the payout anticipated this July represents 42% of the $403.5 million in membership capital held at the time of the corporate’s closure, staff reported. The nearly 900 credit unions included in the payout are what remain of Southwest’s original 1,120 account holders (the rest have since been liquidated, merged, or their assets acquired by other institutions). The NCUA plans to contact payout recipients within the next week.
All projections are based on data as of March 30. As for the other four corporate estates:
- WesCorp: No payouts to former members are expected under any scenario.
- U.S. Central: Payouts totaling as much as 100% of member shares are anticipated under the base scenario; 62% is anticipated under the adverse scenario.
- Members United: 100% recovery of member capital shares is anticipated under the base scenario; 79% under the adverse scenario.
- Constitution: 54% recovery is expected under the base scenario; 14% under the adverse scenario.
NCUA staff noted that assets in the corporate estates are not connected to and do not affect the National Credit Union Share Insurance Fund (NCUSIF).