NCUA Report - November 2012

NOVEMBER 2012 NUMBER 11

WWW.NCUA.GOV

HIGHLIGHTS

2 Chairman’s Corner One Day in the Life of the NCUA Chairman

US CENTRAL BRIDGE CLOSING ENDS
SUCCESSFUL EFFORT TO STABILIZE INDUSTRY
NCUA Now Focuses on Credit Unions’
Emergency Liquidity Needs

4 Board Perspective Repairs Needed

5 NCUSIF’s Financial Position Improves as the Number, Assets of Problem Credit Unions Decline

6 Strong Risk Management Is Essential When Using Cloud Computing Services

8 When Does A Credit Union Need NCUA Approval for a Change in Official or Senior Executive?

10 Private Mortgage Insurance Rules Made Simple

U.S. Central Bridge Corporate Federal Credit Union (U.S. Central Bridge) was shuttered Oct. 29, closing the book on a long, but ultimately successful effort to protect the country’s credit union system from possible collapse as the result of the faulty mortgage-backed securities (MBS) purchased by five failed corporate credit unions.

“The unwinding of U.S. Central Bridge is
the final chapter in our comprehensive plan
to stabilize, resolve and reform the
corporate credit union system in the wake
of the most serious economic downturn
since the Great Depression,” said NCUA
Board Chairman Debbie Matz. “After a
series of decisive actions over the past three
years by NCUA and credit unions, the
credit union system weathered the storm
with no interruption of service and emerged
from the downturn stronger and safer.”
Looking forward, Chairman Matz pointed
out, “New NCUA rules ensure high standards
for corporate credit union investments,
capital and governance. We have created an
entirely new operating environment for
wholesale corporates to serve retail credit
unions. The decisions NCUA and credit
unions made have produced a solid
foundation for the future.”
Based in Lenexa, Kansas, U.S. Central
Bridge was chartered in October 2010 to
assume operations of U.S. Central Federal
Credit Union (U.S. Central). NCUA
established U.S. Central Bridge to maintain
continuity of services to its corporate credit
union members, prevent disruption to the
credit union system, and protect consumers.
U.S. Central was one of five corporate credit
unions devastated by losses incurred
through the purchase of problematic MBS.

NCUA has to date initiated eight legal actions against seven Wall Street securities firms that packaged and sold those faulty securities to the failed corporates, alleging misrepresentation of their risk. NCUA has separately settled with three other firms for