NCUA to Begin Asset Management Estate Payouts in July

During today’s NCUA Board meeting, members received an update on the Guaranteed Notes Oversight Program (NGN), one of a number of programs created in response to the financial crisis of 2007-2008.

NGN was designed to provide long-term funding for distressed investment securities from 5 failed corporate credit unions. The NCUA is projecting that former capital holders of Kansas-based U.S. Central; Illinois-based Members United Corporate FCU; Texas-based Southwest Corporate FCU, and Connecticut-based Constitution Corporate will collectively receive $2.5 billion.

According to Keith Morton, NCUA Regional Director for the Southern Regional office, “Distribution will begin next month, to former capital holders at Southwest Corporate as they are the only estate currently with sufficient cash on hand to make a meaningful distribution at this time.”

Eugene Schied, NCUA’s Acting CFO, added, “About 900 remaining active account holders who will receive a share of the $171 million interim payout. Our plan is to send a letter to these 900 remaining account holders within the next week notifying them of the amount and other payment details.”

The NCUA said it does not expect any recoveries for Westcorp’s former capital holders.