March 23, 2009

Two days after regulators seized the largest U.S. corporate credit union, the newly installed CEO said he is considering a variety of options, including setting up a "bad bank," to handle a mixture of troubled mortgage assets.Several options are on the table at the $34 billion-asset U.S. Central Federal Credit Union, said new CEO James Nance, who quit as chief administrative officer at Icap Capital Markets Llc in New Jersey to helm the Lenexa, Kansas-based institution at the request of regulators.

In addition to setting up a separate entity, a so-called "bad bank," to take toxic assets off the books of U.S. Central, Nance told Reuters in an interview that he will look at options for securitizing the troubled assets in ways that would allow for them to be held for an extended periods, and he will explore the sale of certain assets to non-credit union buyers."We want to try to avoid having the situation deteriorate," said Nance, who prior to his work at Icap, oversaw asset and liability management at U.S. Central from 1993-1996.