A nearly $500 million fourth-quarter other-than-temporary impairment blew through what was left of the $35 billion U.S. Central Federal Credit Union's member capital shares and impaired the NCUSIF's $1 billion capital note by $331 million.
While the loss wasn't a surprise-most retail corporates also reported OTTI on their mortgage-backed securities in the fourth quarter-the impairment of the capital note leaves credit unions wondering if their NCUSIF assessment bill will increase as a result.
NAFCU President/CEO Fred Becker said he doesn't know if the NCUA accounted for the new losses when it estimated last October that this year's corporate stabilization assessment would run between five and 15 basis points. However, according to his math, he thinks the regulator accounted for "at least some" loss on the NCUSIF note.
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