NCUA Approves $171 Million in Distribution of Southwest Corporate Credit Union’s Estate
Many Northwest credit unions were members of the former corporate and will receive funds in July.
Northwest credit unions that were members of the former Southwest Corporate Credit Union can expect a significant check in July, thanks to an early distribution of $171 million in capital. The National Credit Union Administration approved the distribution at its June meeting — and more money is coming.
“We anticipate that this will be the first of three annual distributions to Southwest Corporate member capital account shareholders,” said John Trull, the Northwest Credit Union Association’s Vice President, Regulatory Affairs. “Next year we would expect a second distribution of approximately $232 million. Finally, we would expect a liquidating dividend to be paid in 2022. This would represent recoveries in excess of all other claims against the estate.”
More than 50 Northwest credit unions are expected to receive the distributions.
The news was well received by NWCUA member credit unions expecting a distribution.
“The expected capital return would, over the length of the payments, increase our capital between 31 and 45 basis points,” said James Collins, CEO of Lacey, Washington-based O Bee Credit Union. “This will allow us to increase our deposits and loans by an additional $11 to 15 million over three years and maintain a safe and sound capital level.”
Southwest Corporate was one of five corporate credit unions that the NCUA conserved during the Great Depression. The assets have been managed by NCUA’s Asset Management Assistance Center (AMAC) for the past decade.
“I appreciate NCUA’s stewardship of these funds over the past 10 years, and the NCUA Board’s recognition that these funds can and should be returned to the member credit unions, especially at a time of economic challenges such as we are experiencing,” said Ken Olson, President and CEO of Old West Federal Credit Union in John Day, Oregon.
The announcement of the substantial distribution was “a success story culminating from the efforts of NCUA and credit union leadership in those times,” according to Rodney Hood, NCUA Chair.
“This is really a shared victory,” Hood said. “The Credit Union Movement can be proud of its resilience and commitment demonstrated to the system of cooperative credit, while NCUA leadership and staff can take pride in effectively managing these assets to maximize recoveries.”
Distributions from some of the other former corporate credit unions — Constitution Corporate Federal Credit Union, Central Corporate Credit Union, and Members United Corporate Federal Credit Union — are also expected. Additional information on the distribution is available on the NCUA’s website.
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