The actual performance of legacy assets formerly owned by Western Corporate FCU, U.S. Central FCU, Members United Corporate FCU, Southwest Corporate FCU and Constitution Corporate FCU is of interest to federally insured credit unions because losses incurred by the investments are currently being repaid in the form of annual assessments.

“An open, crowdsourcing tracking system gives the credit union community access to the latest data on each corporate's portfolio taken to collateralize the NCUA Guaranteed Notes,” said Filson, founder of Co-Ops for Change and chairman of Callahan & Associates.

Actual or implied cash losses will be posted and totaled on an ongoing basis, he said.

The spreadsheet data can be compared with the latest available other-than-temporary-impairment losses, which each of the five corporates had established as of June 2010, and had expensed from existing capital.

By providing ongoing, transparent, real-time tracking of the assets, Filson said the industry can update the status of the remaining value of each corporate's members' capital, as well as establish the potential for recovery on each credit union's Receiver's Certificate.

“The conservatorship of the assets of the five corporates was the single most-significant event in the credit union system during the financial crisis,” Filson said. “But until now, credit union owners have had to take the wisdom of this action on faith.

The ability for credit unions that owned those assets to review the securities' status is vitally important, added Filson ally, CU*Answers President/CEO Randy Karnes, because it could allow the NCUA and credit unions to learn and avoid costly future missteps among corporates and all credit unions.

“If NCUA doesn't use a more dynamic approach to regulation, where they are studying and learning what the best solution is, then it will destroy both sources of credit union soundness: Member confidence and capital,” Karnes said.

“In the case of the corporates, member confidence was undermined, thus blocking the corporates' only way to rebuild capital,” he said. “That's how the independent cooperative liquidity system was dismantled.”

Karnes said the fact that banks can access the capital markets and promptly raise more capital marks one big difference between banks and credit unions. And it's a key reason why regulators of financial cooperatives should not treat credit unions like banks.

“After a crisis, banks redress their balance sheets as fast as possible, writing off as much as they can up front, to make their go-forward balance sheet and income statement more attractive to new capital investors,” he said. “In this way, banks can rebuild capital quickly by obtaining contributed capital.”

Neither of these options is open to credit unions, Karnes said.

Filson said it's unclear whether the NCUA was aware of the capital consequences of its action – or the devastating impact it would have on a corporate network that most credit unions deeply relied upon for financial services at a reasonable cost.

“Either the consequences were ignored, the regulator was imitating the bank regulators, or it was, in itself, acting like a bank by taking all the conserved corporate takeover losses upfront,” Filson said. “Then the agency could imply it had saved the day as things got better in later years.”