March 20th Corporate Credit Union Conservatorship
On Friday, March 20th, the National Credit Union Administration (NCUA) took into conservatorship two "corporate credit unions," U.S. Central Corporate Federal Credit Union and Western Corporate Federal Credit Union (WesCorp). NCUA is the federal agency that governs federally chartered credit unions, including People's Trust.
Simply put, corporate credit unions are the "credit unions for credit unions." Corporate credit unions do not serve consumers; they serve as central wholesale facilities for natural person credit unions like People's Trust Federal Credit Union. They are chartered to provide products and services to the credit union system. These products and services will continue uninterrupted and there is no direct impact by NCUA's actions on the 90 million credit union members nationwide. Credit unions that serve consumers remain very strong.
According to NCUA, U.S. Central and Wescorp were put into conservatorship "to protect retail credit union deposits and the interest of the National Credit Union Share Insurance Fund (NCUSIF)," and "service continues uninterrupted at both U.S. Central Corporate Federal Credit Union and WesCorp." Under conservatorship, the National Credit Union Administration takes over the operations of both credit unions and assumes the roles of the board of directors and management. The primary reason why both of these corporate credit unions were placed into conservatorship was "an unacceptably high concentration of risk" in their investment portfolios. Like so many others holding mortgage backed securities, both of these corporate credit unions have seen the value of their investments deteriorate in the current economic environment.
People's Trust's President/CEO, Angela McCathran stated that "People's Trust is safe, sound, and financially stable. Deposits are still insured up to $250,000 and backed by the full faith and credit of the United States government. The conservatorship of U.S. Central and Wescorp will not affect People's Trust members as we are "business as usual." In its 74 years of existence, People's Trust has managed its members' deposits with the utmost care."
If you have additional questions about the conservatorship of U.S. Central and Wescorp, please visit www.ncua.gov.
If you have additional questions about People's Trust's financial stability, please feel free to email the Executive Management Team at management@happyun-banking.com.
Sincerely,
Angela S. McCathran, President/CEO
G. Vernon Babilon, Executive Vice President/CFO
Patricia Garcia, Executive Vice President
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Contact us online, give us a call at 713.428.3200 / 800.321.2411, or stop by a service center location for more information about People's Trust FCU.
