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The National Credit Union Administration (NCUA) announced on June 28, 2021, its plan to distribute $865.5 million to 1,800 membership capital account holders of the former Members United, Southwest Corporate and U.S. Central corporate credit unions. It also ended the NCUA Guaranteed Notes program and announced it will continue enforcing its plan to liquidate the remaining post-securitized assets in an orderly manner as well as make additional distributions when available.
According to NCUA Chairman, Todd Harper, “this third round of distributions is the largest to date and another milestone in the NCUA’s successful management of the Corporate System Resolution Program.” He encourages credit unions set to receive a distribution to leverage the money to support members who are suffering financially due to the COVID-19 pandemic, notably individuals of color and individuals living in low-income areas who have been disproportionately impacted by the pandemic.
Since it is acting as the liquidating agent of the former corporate credit unions’ asset management estates, the NCUA has already made two rounds of distributions; the first was made in July 2020 to the former capital holders of Southwest Corporate and the second was made in April 2021 to the former capital holders of Southwest Corporate, Members United and U.S. Central. Each of these former capital holders is set to receive the new distribution before Sept. 30, 2021. After the third distribution has been made, the NCUA will have paid more than $1.3 billion to former membership capital account holders.
If your credit union stands to receive the upcoming distribution and you have questions about how to account for it, contact Doeren Mayhew’s dedicated Financial Institutions Group today.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
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