Analysis Indicates Good Prospect for Recovery of Some Losses for Members United and Southwest Corporate Owners; Shows Need for Timely Reporting

WASHINGTON, DC (July 29, 2013) — Co-Ops for Change ( has posted an analysis that breaks down the status of investments made by Members United Corporate FCU and Southwest Corporate FCU from when they were conserved by the NCUA in Sept. 2010 through June 30, 2013. The bottom line: Owner credit unions may be able to recover some losses.

At the time of conservatorship, both corporates had positive regulatory capital – $86.1 million at Southwest and $29.5 million at Members United – after the other-than-temporary-impaired securities had been expensed. Today, the analysis shows these OTTI securities are continuing to perform, with 70 percent for Members United and 54 percent for Southwest loss reserves unused. (Data used for the analysis are from a special Callahan Report and NCUA CUSIP listings.)

“When NCUA conserved Members United and Southwest, the order stated that the action was necessary ‘to protect the interests of the members’ and to ‘conserve the assets’ of each,” said Chip Filson, Founder of Co-Ops for Change and Chairman of Callahan & Associates. “Because their members were issued Claim Receipts for member capital remaining after NGN liabilities have been paid, our analysis shows the likelihood for future payments is promising.”

Before conservatorship, these corporates provided detailed, monthly updates on the activity of these securities, unrealized losses and cumulative OTTI. Yet, NCUA has provided only summary updates twice a year since conserving all five corporates in 2009-10. In Members United’s case, monthly reports during the market disruption clearly show improvement. From the lowest point in the economic downturn to the month before takeover, the corporate’s combined potential losses of OTTI and accumulated other comprehensive income decreased by some $900 million.

“Members can only be confident that their assets are being carefully conserved if timely and complete information is provided,” said Filson. “NCUA also has a responsibility as conservator to be transparent and keep members informed on a timely basis, just as these corporates did. It’s fundamental to the cooperative model.”

The new analysis is being released on the heels of similar, real-time reviews of the actual losses on legacy assets of the now-liquidated U.S. Central Corporate Federal Credit Union and Constitution Corporate Credit Union.

Now available: A “real-time” look at legacy asset losses of Members United and Southwest Corporate. Analysis: Members United and Southwest.

About Co-Ops for Change
Co-Ops for Change is a grassroots movement to increase awareness both within the credit union community and among elected policymakers that our regulatory leadership should understand and support the seven cooperative principles. The regulatory process should consider credit unions’ cooperative character, as well as the shared economic value they create for people and communities. Credit union members, volunteers, professionals and industry supporters can learn more about the campaign at

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