A U.S. regulatory analysis shows that senior managers at a major corporate credit union seized last month were preparing to report a credit loss significantly below what an external analysis had revealed, the National Credit Union Administration said on Friday.
The NCUA said Western Corporate (WesCorp) Federal Credit Union's own external analysis resulted in a credit loss estimate more than $500 million greater than WesCorp's internal estimates.
Senior managers at WesCorp were prepared to report an impairment figure for certain securities as of December 31 that was based on the lower internal analysis estimate, the NCUA said.
The credit union regulator seized WesCorp and U.S. Central Federal Credit Union last month after stress tests revealed that losses on their soured mortgage-related investments had reached a critical stage.
(Reporting by Karey Wutkowski; Editing by John Picinich)