ALEXANDRIA, Va. (March 9, 2023) – The National Credit Union Administration, in its role as liquidating agent, announced today a $109.6 million distribution to more than 100 membership and paid in capital shareholders of the former Constitution and U.S. Central corporate credit unions. The NCUA will also distribute $68.6 million in dividends to more than 2,500 Members United and Southwest Corporate shareholders.
“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 M. 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.”
As liquidating agent of the former corporate credit unions’ asset management estates, the NCUA has previously made five rounds of distributions. In 2020, 2021, and 2022, distributions were made to capital holders of Southwest, Members United, Constitution, and U.S. Central. This latest distribution is scheduled to occur before the end of March 2023. With this new distribution, 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 was an innovative solution that saved the credit union system far more than it cost,” Chairman Harper added. “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.”
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.
Information on the Corporate System Resolution Program, including projections for the Corporate Asset Management Estates Recoveries and Claims, and information on the process for determining when distributions are made to member capital account holders, can be found on the NCUA’s website.