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Fed and Other Regulators Say NCUA Notes Are No-Risk

The mortgage-backed securities from the conserved corporate credit unions that the NCUA is selling have 0% risk and are backed by the full faith and credit of the government, the Federal Reserve and three other regulators concluded.

By Claude R. Marx | Updated on October 13, 2010

The mortgage-backed securities from the conserved corporate credit unions that the NCUA is selling have 0% risk and are backed by the full faith and credit of the government, the Federal Reserve and three other regulators concluded.

Because the bonds are backed by the government, the regulators would “not object to a banking organization’s assignment of a zero percent risk weight,” according to the letter, signed by officials of the Fed, the FDIC , the Office of the Comptroller of the Currency and the Office of Thrift Supervision. The letter was dated yesterday and released today.

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