This has probably been brewing for awhile, and will continue to simmer until all parties meet and work these issues out. What a way to end the year!
Like the FDIC, the NCUSIF fund is broke. They’ve had to borrow money from the treasury, and keep increasing the assessments (Stabilization Fund) to credit unions to keep pace with these losses.
With several corporates going under because of their investments in Mortgage Backed Securities, it has put an undue burden on the shoulders of good Credit Unions around this country who now have to pay assessments for the Corporates mistakes. The bigger issue is…how many more Corporates are still sitting out there with toxic assets on their books?
Speculation is running high as NCUA and it’s current board have become less transparent in and environment that calls for more transparency. Case in point…In previous NCUA administrations annual open budget hearings were held. Such open hearings are now discontinued under now Chairman Matz.
For those conspirators out there, maybe this is designed like the banks to allow the big to get bigger thereby eliminating the smaller institutions. The trends of mergers of both banks and credit unions seem to give one pause.
- Approximately 1000 less credit unions today than there were at the start of 2006. (CUNA)
- Approximately 722 less banks today than there were at the start of 2006. (FDIC)
At the center of the controversy which began brewing over the Christmas holiday and pushed by the CEO of Grand Rapids-based CU*Answers warning of industry demise or stagnation if internal NCUA polices are not quickly changed, is a petition listing five key areas needing immediate reform. So far the petition, circulated widely within CUNA/NAFCU and among the CUSO leadership over the past week, has drawn some 90 names including CEOs of both big and small CUs but also more than 40 anonymous listings.
While emotions are running high, it is prudent for all parties to sit down and negotiate these issues. A lot is at stake and ignoring them is not the answer.
What are some of your thoughts that need to be done?