(March 19, 2021) Payments totaling $368.7 million will be made by April 30 to about 2,000 credit unions that used to be members of three failed corporates, the NCUA Board was told Thursday, as the agency continues winding down the liquidation that began more than 10 years ago of the three institutions.
The board, meeting in its regular monthly meeting for March, was also told that there remains potential for future distributions to the former members of the corporate credit unions, which were U.S. Central, Members United and Southwest.
Capital holders of two other failed corporates – WesCorp and Constitution – should not expect payouts, the board was also told.
According to NCUA staff, those holding membership capital accounts (MCAs) in U.S. Central will receive a total of $150 million in the payout; $126.2 million will go to Members United MCA holders; and $96.5 million will go to Southwest MCA holders.
The payouts represent a partial recovery of the depleted capital at the failed corporates, which were seized by NCUA in 2009 following their failures. According to charts displayed in a staff briefing, the percentage of the recovered depleted capital is 8.9% for U.S. Central, 25.6% for Members United, and 22.9% for Southwest.
Credit union MCA holders are only paid after all senior priority claims have been fully paid or provided, NCUA noted.
The payments will be made to MCA holders that have claim certificates issued by the agency in 2010. At the time of liquidation of the corporates, NCUA said, there were 2,654 MCA holders in the three credit unions, 97% of which were credit unions. However, since 2010, a number of those credit unions have been merged into other credit unions, participated in purchases and acquisitions – and a few others have been liquidated – leaving about 2,000 MCA credit union holders, NCUA said.
The agency said it would notify payout recipients by letter of their individual distributions and other payment details. Distributions will be made via electronic funds transfer by April 30, the agency added.