RALEIGH, N.C. – Local Government FCU launched an initiative at boosting the local credit markets with a pledge to buy up to $50 million in bonds issued by municipalities and local governments.
"With the credit crisis and everything else going on with the economy right now we’re seeing investors sitting on the sidelines," said Maurice Smith, president of the $840 million credit union. "We are the credit union for municipalities and local governments so we thought this is something we can do about."
By making the pledge and going public with it, Smith said they hope to spur other public investors in the market. He has also called on other North Carolina credit unions to join the effort.
The initiative is the second launched in recent months by a credit union to help add liquidity to the state’s finance. Last summer North Carolina State Employees CU agreed to buy $1.1 billion in bonds from College Foundation, Inc., a state agency that provides funding for federally guaranteed student loans.
North Carolina credit unions have been relatively unscathed by the economic turmoil. Both Local Government and SECU reported strong financial for the first three quarters of the year. Local Government had $4.6 million in net income and SECU $92.6 million in net income for the first nine months.
But the state and its municipal and local governments have all been impacted by the credit crunch and are having difficulty raising money to finance operations.
