Bailout Headlines Greet NCUA Move
NEW YORK – Credit unions awoke Saturday morning to the types of negative headlines that have described failed brokerages and mega-banks the past two years.
“Credit Unions Bailed Out,” blared the lead headline in the Sept. 25 edition of the Wall Street Journal. “US Bails Out Major Credit Unions,” read a headline of a story on Fox News.com.
In the nearly 400 comments filed on the Wall Street Journal story at www.wsj.com, a number of readers attempt to clarify that government funds are not being used and that no “bailout” is occurring. The negative headlines, which imply taxpayer funds are being used to staunch the losses at several corporate credit unions, also had the CEOs of several corporates, with whom Credit Union Journal spoke over the weekend, seeking to clarify what has occurred.
“I don’t understand where they got the term bailout,” said Thomas Bonds, CEO of Corporate America CU in Birmingham, Ala. “When you use the term bailout you imply the Federal government has entered the scene and taxpayers are on the hook. Obviously that is not the case.”
Bailout, according to Bonds, also implies that the entity being bailed out is going to survive. “Well, [the conserved corporates] are not going to survive. They are dead.”
Bonds added that he was not overly concerned the Wall Street Journal headline will cause a great deal of damage to the reputation of the CU movement. But he is concerned about “misinformation” resulting form the story. “Read all the comments [on www.wsj.com] about the story,” Bonds noted. “You can see there is a lot of misinformation.”
Of the Wall Street Journal headline, Lee Butke, CEO of Corporate One FCU in Columbus, Ohio, said, “I hated to see that. Without any question we are doing this on our own. That headline misrepresents the ability of the credit union system to heal itself and will likely lead to a public relations fight I hope we all take on.”