Mica: Responding To Corporate Stabilization A Lose-Lose Proposition

BOSTON–Responding to NCUA’s corporate stabilization plan, which drove record numbers of credit unions into the red during the first quarter of this year, was a lose-lose proposition, according to CUNA CEO Dan Mica.Mica noted he continues to hear from CEOs who say their credit unions is so adequately capitalized that there is no need for the seven-year period NCUA proposed and Congress OK’d to account for the related costs. Those CUs disagree with CUNA’s support of the plan.“With the corporate stabilization, credit unions were going to be hit with some massive financial write-offs. We were told about 80% of all CUs in the U.S. would have had negative 80% ROA if we had not gotten the seven year (accounting period). Can you or this system withstand a series of articles across the nation about credit unions being reported in a negative light?” As for certain credit unions with very high capital levels, Mica suggested “some of you should take that and spend it on your members.” Mica’s remarks came during CUNA’s America’s Credit Union Conference here.