CU Consensus Still Firmly BehindBankruptcy Reform
WASHINGTON - (03/07/05) -- Despite a slight crack in the creditunion consensus behind bankruptcy reform last week there continuesto be near unanimity behind the bankruptcy bill that is movingagain through Congress. That crack appeared when one credit unionleader, Jim Blaine, president of the North Carolina State EmployeesCU, the nation's second-largest credit union, stood next to Sen.Ted Kennedy and other Democratic opponents of the bill during aCapitol Hill news conference to denounce the bill. But Blaineappears to be a lone wolf in the credit union movement. "I thinkthis bill is way over due," Thomas Griffith, president PacificNorthwest FCU, told The Credit Union Journal. Floyd Rummell,president Dakota Territory FCU, said member bankruptcies at his $20million credit union continue to rise, and with them, charge-offs."We have about 12 or 14 bankruptcies a year and about $25,000 incharge-offs. That's a large amount for such a small credit union,"he said. "With some meaningful means testing some of that would berepaid." Bankruptcy, said Kristi Mukumela, president Novation CU,"has become sort of a strategy for some of these young people, sortof a financial planning tool." She said the bill should discouragethis practice. Most of the credit union executives asserted thatbankruptcy-related losses continue to amount to about half of theirannual charge-offs. The Senate is expected to continue last week'sdebate on the bill Monday and hold a final vote on the measurelater this week.