WASHINGTON-At press time, CUNA was still surveying its member CUs about whether CUs should push for access to TARP. Among the cons for seeking these funds were:
* CUs didn't cause the financial crisis and can be part of the solution. Accepting bailout money from taxpayers at a time when the system is considered by Congress, Treasury and NCUA to be well capitalized would seriously threaten the CU tax exemption.
* Accepting TARP funds would leave CUs more vulnerable to being caught up in the financial regulatory reform legislation that is likely to move through Congress, threatening the existence of a separate, independent federal regulator for CUs, and the CU charter.
* Many credit unions are indeed facing substantial downward pressure on their bottom lines from external forces in their local and national markets. On top of those pressures, the cost of the Corporate Stabilization Program will push many credit unions into negative earnings for the year. However, the vast majority of credit unions will remain well capitalized even after paying for the Corporate Stabilization Program.
* Because CUs have the wherewithal to bear the costs, no matter how painful it may be, it's not worth threatening our political future just to avoid operating in the red for a year.
