NCUA: U.S. Central’s CLF Stock Used to Pay Out Share Deposits

By Heather Anderson

In October 2012, $1.845 billion worth of Central Liquidity Facility stock disappeared from the books of the CLF and U.S. Central Bridge FCU.

That month marked the failed corporate’s Oct. 25 liquidation date, and financial reportsreleased by the NCUA explained that the stock had been redeemed.

However, as Callahan & Associates’ Chairman Chip Filson pointed out in a blistering Feb. 27 opinion piece, the NCUA did not report exactly where the assets had gone.

The short answer to Filson’s question is that the CLF stock was a U.S. Central asset. It was converted to cash in October and used to pay out the wholesale corporate’s biggest liabilities category: share deposits.

According to its Sept. 30, 2012 5310 report, U.S. Central had a little more than $3 billion on deposit in share accounts, including $2.8 billion worth of daily shares.

NCUA Public Affairs Specialist John Fairbanks provided Credit Union Times with additional information regarding U.S. Central’s liquidation, from the Asset Management and Assistance Center. He said U.S. Central was insolvent at the time of liquidation, coming up short by $46 million.

U.S. Central’s 5310 reports support that statement. As of Sept. 30, the wholesale corporate had $3.015 billion worth of assets, including $1.165 billion in cash, and $1.845 billion in investments, which represents the CLF stock.

In addition to the $3 billion in shares, U.S. Central also reported liabilities of $2.3 million and negative undivided earnings of $44 million. October’s 5310 report has expected numbers: about a $3 billion reduction in assets and shares, with a resulting $45.8 million negative equity.

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