Federal Subsidies Can't Save SmallCUs

WASHINGTON - (11/29/04) -- An increase in federally subsidizedloans and grants has failed to slow the demise of small creditunions. Though federal assistance, mainly through the TreasuryDepartment's Community Development Financial Institutions Programand NCUA's Community Development Revolving Loan Fund, continues toincrease the number of small credit unions disappearing throughmerger or liquidation continues to rise. Through the first 10months of the year 186 small credit unions, those under $5 millionin assets, have disappeared through mergers and liquidations;that's up from 165 small credit unions eliminated in the first 10months last year. At the same time, small credit unions havereceived a new high of almost $6 million in low interest loans andgrants this year through the CDFI Program and the NCUA loan fund,and as much as $20 million over the past five years. That doesn'tcount additional non federal subsidies, like low-interestnon-member deposits and grants provided to small credit unions fromnon-governmental sources, like banks, other credit unions andcharitable foundations.