More Trouble for Corporate Credit Unions

The National Credit Union Administration approved a $1 billion charge Thursday to pay for the corporate credit union bailout. The corporate assessment comes after last year's charge of $1.1 billion, which included $337 million for the first year of the corporate bailout and the remainder to replenish reserves for the National Credit Union Share Insurance Fund. This year's corporate assessment amounts to 13.4 basis points and must be accrued by credit unions for the second quarter, and paid by Aug. 30. The corporate assessment is expected to drive as many as 1,068 credit unions into the red for the second quarter and as many as 552 into the red for the year, while pushing about 60 credit unions into undercapitalized territory, according to NCUA. Almost half of the nation's 7,800 credit unions, 49.5%, reported losses for fiscal 2009, many of them because of the NCUA assessments.