The NCUA said said it has it knocked $1.5 billion off its corporate stabilization bill Friday with the payment of medium term notes that were used to stabilize Western Corporate FCU in late 2009.
"This repayment is an important milestone in NCUA's efforts to resolve the failure of five corporate credit unions in an orderly manner and maintain confidence in the credit union system," said Chairman Debbie Matz. "With this final payment completed, we will continue our efforts to mitigate costs to federally insured credit unions over the remaining life of the Stabilization Fund."
Proceeds from credit union assessments, cash on deposit and other assets from the failed corporate credit unions were used to repay the obligation. The WesCorp payment follows the Oct.19, 2012, repayment of $2 billion in medium term note obligations from U.S. Central FCU, which closed Oct. 29.
The loans to WesCorp and U.S. Central were instrumental in stabilizing the two corporates while they were in conservatorship, the NCUA said Tuesday in its announcement. NCUA guaranteed repayment under terms of the Temporary Corporate Credit Union Liquidity Guarantee Program.
The WesCorp and U.S. Central medium term note obligations represent the final fixed repayment liabilities incurred by the Temporary Corporate Credit Union Stabilization Fund as a result of the corporate credit union failures.
The primary remaining obligation of the Stabilization Fund is $5.1 billion in outstanding borrowings from the U.S. Treasury. That balance will be repaid over the remaining life of the Stabilization Fund, which expires in June 2021, primarily by assessments to federally insured credit unions.
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