Credit Unions With $57 Billion in Assets Seized; 3 Banks Fail

[seemslikeadream]

http://www.bloomberg.com/apps/news?pid=20601087&sid=a.ZsPab..qrI&refer=home

By Margaret Chadbourn and Ari Levy

March 21 (Bloomberg) -- Two corporate credit unions, with combined assets of $57 billion, were seized by the National Credit Union Administration yesterday to stabilize a system used by 90 million customers amid a worldwide financial crisis. Three U.S. banks failed, bringing this year’s total to 20.

U.S. Central Corporate Federal Credit Union, in Lenexa, Kansas, and Western Corporate Federal Credit Union in San Dimas, California, were put into conservatorship, the regulator said in a statement. The credit unions failed so-called stress tests that found an “unacceptably high concentration of risk” from mortgage-backed securities, the agency said.

“Most of the bad assets that we’ve seen in the corporate world reside at these two institutions,” NCUA spokesman John McKechnie said in a telephone interview. “We will be able to resolve them in a more efficient way.”

The U.S. has 28 corporate credit unions, which make loans and provide other services for the retail credit unions that cater to the public. This is the first time a corporate credit union was seized since 1995, when NCUA took control of Capital Corporate, based in Landover, Maryland.

U.S. Central has about $34 billion in assets and serves 26 retail credit unions. Earlier this year, it was granted a $1 billion federal injection in an effort to shore up public confidence.

Western Corporate has $23 billion in assets and about 1,100 retail credit union members, the NCUA said. Yesterday’s two seizures may cost the agency’s insurance fund about $1.2 billion, McKechnie said.

Emergency Borrowing

[Political Heretic]

1. They do this EVERY FRIDAY. They are nationalizing and just not calliing it that. :)

[No.23]

2. Don't always trust the picture that they want you to see.

A reliable source told me that They are concerned about a run of people from the banks to the credit unions.

This may well be a tactic to plug the hole in the dam.

[Gabi Hayes]

3. speaking of pictures, here's one, courtesy of Archae in the Lounge:

looking like a not-too unrealistic gaze into the socio-political-economic crystal ball

[seemslikeadream]

4. ...........

:hi: