NCUA to Issue $178 Million to CUs in March
The NCUA has previously made five rounds of similar distributions since 2020.
In its role as liquidating agent, the NCUA announced Thursday that it will issue $109.6 million to more than “100 membership and paid-in capital shareholders” from the liquidation of the former Constitution and U.S. Central corporate credit unions. Another $68.6 million in dividends will be distributed to more than 2,500 shareholders of Members United and Southwest Corporate credit unions.
According to the NCUA, these amounts will be issued by the end of March.
“This represents the sixth multimillion-dollar distribution as part of the successful Corporate System Resolution Program and is another example of the NCUA fulfilling its fiduciary responsibility to return additional funds to capital holders,” Chairman Todd Harper said. “As we wind down the remaining asset management estates, we will continue to minimize costs and maximize returns. Recipients should use these funds to support the millions of credit union members experiencing economic hardships due to rising interest rates and inflationary pressures and to increase access to safe, fair and affordable financial products and services, especially in under-resourced areas.”
Previous distributions occurred in 2020, 2021 and 2022 to capital holders of Southwest, Members United, Constitution and U.S. Central, according to the NCUA’s announcement. Counting the latest liquidation distribution amount, the NCUA will have returned more than $2.7 billion “to former membership and paid in capital shareholders and more than $360 million in dividends to shareholders.”
The Corporate System Resolution Program was created by the NCUA board to stabilize, resolve and reform the corporate credit union system in the wake of the 2008 financial crisis. “The program allowed the credit union system to absorb the failures of U.S. Central, Western, Southwest, Members United and Constitution corporate credit unions over time,” the NCUA stated.
Harper added, “The Corporate System Resolution was an innovative solution that saved the credit union system far more than it cost. We were the first federal financial institutions regulator to bring lawsuits against the Wall Street securities firms that sold investments in faulty residential mortgage-backed securities. People told us we could never win. We did, and we are using the net proceeds from these settlements to reduce the costs that federally insured credit unions need to pay for the resolution.”
Last August, the NCUA distributed $313 million to more than 400 membership and paid-in-capital shareholders of the former Members United, Constitution and U.S. Central corporate credit unions. It also distributed $82 million in dividends to more than 1,100 shareholders of Southwest Corporate.