Small CUs 'Not An Endangered Species'

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SAN BERNARDINO, Calif.-Gregg Stockdale, CEO of the $35-million 1st Valley CU, contends small credit unions are "alive and well."

"Yes, we feel the pressure, but we are not the endangered species everyone is building us up to be."

Stockdale told Credit Union Journal that due to numerous small credit unions having strong reserve ratios, many will weather this storm, especially those that have kept services simple and costs and complexity down. "In the next seven years, assuming we are getting a 30-basis-points assessment, that means if my ROA used to be .7, now it's .4. Figure in some of the regs and now you are looking at about .2 ROA. That does not allow much growth, but you are still sitting on strong capital and positive ROA."

Stockdale believes the pressure is on the larger credit unions. "If you are a large credit union and you have all these ancillary services that now have backfired on you and you have to fund the allowance in the millions, now you don't have positive ROA to start with. Figure in the assessment along with the negative ROA and you are sitting there saying, 'Oh my gosh.'"

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