Banking

NCUA distributing $569 million to resolve corporate credit union failures

The National Credit Union Administration will distribute another $569 million to thousands of credit unions to resolve the failure of four corporate credit unions in the wake of the financial crisis.

The payment is the latest round in an effort that has seen the regulator pay out more than $1.8 billion to former membership capital shareholders and $209.8 million in dividends to shareholders, the NCUA said in a press release Tuesday.

The resolution program was established by the NCUA to stabilize, resolve and reform the corporate credit union system in the wake of the 2008 financial crisis.

“This latest distribution is another important milestone in the successful corporate system resolution program,” NCUA Chairman Todd Harper said in the press release. “As we wind down the remaining asset management estates, we will continue to minimize costs and maximize returns.”

The NCUA said it will distribute $359.2 million to more than 1,000 membership capital shareholders of the former Members United, Constitution and U.S. Central corporate credit unions. The agency will also distribute $209.8 million in dividends to more than 1,100 shareholders of Southwest Corporate.

The NCUA completed capital distributions to Southwest Corporate capital holders last year.

Speaking at the Credit Union National Association’s Governmental Affairs conference this week, NCUA board member Rodney Hood joked that the distribution is the rare case when money is flowing out of Washington rather than the other way around.

The NCUA has previously made three rounds of distributions. In 2020 and 2021, capital holders of Southwest, Members United and U.S. Central received distributions.

Member capital shareholders of Constitution corporate credit union will receive the latest round of distribution before the end of March.



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