On Wednesday, the National Credit Union Administration announced a program under which it will temporarily guarantee $80 billion in uninsured member shares or deposits at wholesale or corporate credit unions. Uninsured shares are generally those in excess of the Standard Maximum Share Insurance Amount on the date of a particular corporate credit union’s liquidation, which amount is currently $250,000. Corporate credit unions provide investment, liquidity and clearinghouse services to consumer-owned “retail” credit unions. Credit union deposits are insured by the National Credit Union Share Insurance Fund (“NCUSIF”), a fund overseen by the NCUA. The temporary guarantee will apply to member shares in all corporate credit unions through February of 2009 and will extend on a voluntary basis to all corporate credit unions through December 31, 2010. A Fact Sheet for the program is available at the NCUA’s website. The program is an extension, but not a replacement, of the NCUA’s Corporate Credit Union Guarantee Program announced on October 16, 2008, under which the NCUA provides NCUSIF-insured corporate credit unions with a 100 percent guarantee on new unsecured debt obligations, subject to terms detailed in the program.

Simultaneous with this announcement, the NCUA (i) injected $1 billion of capital into US Central Corporate Federal Credit Union of Lenexa, Kansas, which reported a $1.1 billion loss for 2008; (ii) issued an Advance Notice of Proposed Rulemaking to restructure corporate credit unions; and (iii) declared a 2009 premium assessment to restore NCUSIF’s equity ratio to 1.30 percent