Media Advisory

Weekly Corporate Credit Union Update –
May 1, 2009

May 1, 2009, Alexandria, Va. – Normal operations continue without interruption at U.S. Central Federal Credit Union (U.S. Central) and Western Corporate Federal Credit Union (WesCorp).  The following items specific to U.S. Central and WesCorp are of note:

• The reviews of all private label mortgage backed securities by Clayton Fixed Income Services, Inc., at both U.S. Central and WesCorp have been completed. The range of estimated credit losses are as follows:

• The March 31, 2009, financial statements will be released by each corporate credit union within the next week.  The Other-Than-Temporary-Impairment (OTTI) charges to be reflected on the March 31, 2009, financial statements for U.S. Central and WesCorp are $2.3 billion and $5.8 billion respectively.  This will result in extinguishment of all Paid-in-Capital (PIC) and Membership Capital Accounts (MCA) at WesCorp.  For U.S. Central, all PIC and 63% of MCAs will be exhausted.  Guidance will be issued for holders of PIC and MCA accounts in the form of a Letter to Credit Unions.

• Renewed liquidity pressures are mounting from normal seasonal outflows that typically occur during this time period.  Both corporate credit unions have been working to establish contingent market funding sources, which remain limited due to the broader problems in the credit markets.

• Member communication and outreach efforts continue.  The following is a summary of communications efforts for each corporate credit union:

• U.S. Central - Periodic member teleconferences continue.  An in-person member meeting was held on April 29, 2009.
• WesCorp – A webcast is scheduled for next Thursday, May 7, at 11:00 A.M. Pacific Time.  A series of town hall meetings are scheduled to kick off on May 18, 2009.

Chairman Fryzel stated, “NCUA continues to make contingency plans for potential liquidity needs during this period of normal seasonal outflows.  The NCUA Board at its May meeting will be considering changes to the Temporary Corporate Credit Union Liquidity Guarantee Program to provide longer term funding options and other enhancements.  As liquidity pressures mount from seasonal patterns, I encourage all credit unions to continue to support liquidity needs by keeping all surplus funds within the credit union system.”

The National Credit Union Administration charters and supervises federal credit unions. NCUA, with the backing of the full faith and credit of the U.S. government, operates and manages the National Credit Union Share Insurance Fund, insuring the accounts of nearly 89 million account holders in all federal credit unions and the majority of state-chartered credit unions. NCUA is funded by credit unions, not federal tax dollars.

-NCUA-