NCUA Fears CU Shake-Out From HurricaneKatrina
WASHINGTON - (09/21/05) -- NCUA is predicting that financialand physical losses suffered by credit unions after HurricaneKatrina will cause some of the hardest-hit credit unions to eitherfail or be merged out of existence. NCUA Board member Deborah Matzsaid with large amounts of funds being withdrawn from credit unionsfor repairs and other emergency purposes and large amounts ofdeposits being eliminated because of job losses many affectedcredit unions are feeling a tremendous financial strain. "Clearly,some credit unions are not going to survive," Matz told attendeesto NAFCU's annual Congressional Caucus Tuesday. The result, saidMatz, will be a "shake-out" of Gulf-area credit unions, in whichthe weaker and hardest-hit are unable to survive. The strain oncredit unions, Matz predicted, will be felt on the National CUShare Insurance Fund, which is expected to experience lossesrelated to the massive natural disaster in the GulfStates.