BOSTON - State regulators and examiners from across the country met up at the National Association of State Credit Union Supervisors (NASCUS) Annual Summit here. Credit Union Journal caught up with a few of them to ask: "Where does your biggest concern lie right now when it comes to examining credit unions?"
John P. Smith, Administrator, Kansas Department of Credit Unions: "It varies by credit union to credit union. For most of our credit unions mortgages are not part of our concern. But there have been (members) being laid off; we're looking closely at delinquencies and charge-offs. The difference (from previous recessions) this time is the failure of the corporate system and its impact. So many safeguards failed; we should know — we used to regulate U.S. Central. So there's a real period of uncertainty right now."
Steven L. Antonakes, Commissioner of Banks for the Commonwealth of Massachusetts: "We're focusing on asset quality at these institutions. The biggest concern is the duration of the recession and what extent job losses have on credits. It's the same for credit unions as it is on the banking side of things. Maintaining asset quality is the primary focus, but so far that has remained strong."
Michael Jones, Chief Examiner for the State of Utah: "Right now we're looking at development and construction loans. For all our institutions that is the area where they have the most problem loans. We're just making sure they know what they're doing and not being sold weak loans."
Mary Hughes, Idaho Financial Institutions Bureau Chief: "We're not focusing on one specific area, but we are asking credit union to develop robust mortgage systems and accurately record charge-offs so we can easily see what their balance sheets look like. Our credit unions are overall fairing pretty well; I think we're riding out this crisis. But we want to make sure our credit unions don't loosen their underwriting standards, that they don't just put loans on the books to just put them on there, so we're also focusing on asset quality."
Kathy Stewart, Director, Division of Financial Institutions in Kentucky: "Kentucky is a pretty conservative state — we didn't see the highs of the high and we won't see the lows of the lows. But we do have a very high unemployment rate. That domino effect on our credit unions' portfolios is of some concern, mostly in the area of mortgages, car loans and consumer loans. Still, I think they are doing a fine job so far. They have enough reserves for the losses and we're having a good number of credit unions be receptive to their members in these bad times (with loan modifications and other programs)."
