WASHINGTON – Faced with declining numbers, the National Federation of Community Development CUs is asking NCUA to act to convert some $16 million in low-interest loans through NCUA’s Community Development Revolving Loan Fund into permanent capital.
"We lost about 20 credit unions last year, one of our worst years ever," said Clifford Rosenthal, director of the Federation, of the merged and failed CDCUs in 2008. Rosenthal said he has asked NCUA to move to boost the waning capital in some CDCUs by converting existing loans to capital, either as long-term loans or grants, similar to what the Treasury’s Community Development Financial Institutions Program does.
The Federation believes NCUA can alter the revolving loans to make it capital on its own. If not, said Rosenthal, they are willing to ask Congress to for enabling legislation.
The Federation claims about 200 CDCU members.
