The National Credit Union Administration (NCUA) announced the creation of two new bridge corporate credit unions assuming the operations of Members United Corporate of Warrenville, Ill., and Southwest Corporate of Plano, Texas.
These actions comprise the next phase in transition of corporate credit unions currently under NCUA conservatorship.
The newly created institutions will be known as Members United Bridge Corporate Federal Credit Union and Southwest Bridge Corporate Federal Credit Union. The first two bridge corporates created by NCUA were U.S. Central Bridge Corporate Federal Credit Union and Western Bridge Corporate Federal Credit Union.
“Creation of the four bridge corporates ensures that 4,600 member credit unions continue to have access to essential liquidity and payment services,” said NCUA Chairman Debbie Matz.
NCUA has implemented a “Good Bank/Bad Bank” model to facilitate the corporate resolution process. Bridge corporate credit unions (“good banks”) are chartered by the NCUA Board to purchase and assume “good” assets and member share deposits from the conserved corporate credit unions (“bad banks”).
Bridge corporate credit unions will be highly liquid and operated to ensure stability and minimize disruption of service to member credit unions.
Other bridge corporate operational highlights include:
The agency says the bridge corporates can’t operate indefinitely. Bridge leadership will consult with members to develop a viable long-term plan that would enable the delivery of services transferring the bridge corporate’s operations to a newly chartered corporate credit union, or selling operations to another entity capable of providing uninterrupted services.
Should a bridge corporate’s members decide not to support the plan or another entity not be identified, NCUA will operate the bridge corporate for sufficient time so that members can find individual solutions.
A U.S. District judge Monday dismissed three lawsuits--including one by the National Credit Union Administration--brought against U.S. Bank National Association and Bank of America, National Association regarding their duties as trustees of residential mortgage-backed securities.