LAKE BLUFF, Ill. — Mike Moebs, CEO of Moebs $ervices, believes that the NAFCU and CUNA effort on supplemental capital does not go far enough.
"Neither do bank or White House proposals," offered Moebs, who outlined a system where alternative capital would be allowed from many outside sources, such as hedge funds and investment firms, with the government overseeing the activity and the Fed stepping in to provide capital in instances where a credit union's poor financial condition would not attract interest from outside investors. "It's a simple issue we keep complicating. If we would just build a proposal around a very basic fundamental: assets equal deposits plus capital."
It is critical that the "capital position is defined," continued Moebs, including how potentially impaired capital is valued and dealt with. "We must also be able to define what the central bank can do. And the central bank takes action only after private opportunities of members, stockholders, investment firms, private equity firms, and hedge funds have had shot at it."
