The short answer to Filson's question is that the CLF stock was a U.S. Central asset. It was converted to cash in October and used to pay out the wholesale corporate's biggest liabilities category: share deposits.

According to its Sept. 30, 2012 5310 report, U.S. Central had a little more than $3 billion on deposit in share accounts, including $2.8 billion worth of daily shares.

NCUA Public Affairs Specialist John Fairbanks provided Credit Union Times with additional information regarding U.S. Central's liquidation, from the Asset Management and Assistance Center. He said U.S. Central was insolvent at the time of liquidation, coming up short by $46 million.

U.S. Central's 5310 reports support that statement. As of Sept. 30, the wholesale corporate had $3.015 billion worth of assets, including $1.165 billion in cash, and $1.845 billion in investments, which represents the CLF stock.

In addition to the $3 billion in shares, U.S. Central also reported liabilities of $2.3 million and negative undivided earnings of $44 million. October's 5310 report has expected numbers: about a $3 billion reduction in assets and shares, with a resulting $45.8 million negative equity.

Fairbanks also explained that a $2 billion medium term note U.S. Central issued in 2009 came due in October 2012; however, CLF stock was not used to repay that borrowing. Rather, he said, the Temporary Corporate Credit Union Stabilization Fund covered the amount, and U.S. Central's financials were not involved.

A net gain on the TCCUSF's 2012 year-end financials also did not involve the redeemed CLF stock. According to Fairbanks, the net gain reported from the asset management estate consisted of $790 million in assessment premiums received, an $807 million improvement in estimated future cash flows on corporate legacy assets that collateralize the NCUA Guaranteed Note program, $85 million in NGN guarantee fees and the $88 million transferred from the NCUSIF to corporate stabilization because the 2012 end-of-year equity ratio exceeded 1.3%.

Anticipating the NCUA's answer that the stock was swallowed up in U.S. Central's liquidation, Filson countered that the stock was CLF equity, and should have been kept separate from the U.S. Central failure.

"They say the credit union that funded it no longer exists, but remember, this was done on behalf of credit unions," he said, referring to the original U.S. Central contribution.

The stock was funded in the early 1980s using existing U.S. Central capital, a portion of what was paid in by member corporates. Annual adjustments kept the CLF's borrowing capacity large enough to serve the industry as it grew.