WINSTON-SALEM, N.C. — Members Credit Union here expects that in addition to the 51 basis points it is already being assessed by NCUA that it will pay approximately 18% more as a result of the additional assessment.
Bob Donley, EVP, administration and lending, noted that Members CU has "more than adequate capital reserves" to withstand the latest move by the NCUA.
"While we expect the Corporate Stability program will negatively impact our 2009 financial statements, our ability to meet the needs of our membership have not been altered in any way as a result," he said. "We serve our members within a cooperative of cooperatives. While it is clearly not fair to our member owners that their credit union's capital is being used to bail out financial institutions unknown and seemingly unaffiliated with their own, we realize that our role within the system is to pick fellow credit unions up."
Donley said the credit union faces a "formidable challenge" explaining this to its membership, but remains confident that as a result its members will have a better understanding of what it means to be a credit union member "through good times and bad."
"We are cautiously optimistic that the NCUA's latest move signals the beginning of the end regarding losses at corporate credit unions," he said. "That said, we will continue to be conservative with our members' capital. That mindset has prevented this problem from being worse than it is, and will no doubt prevent us from being subject to future economic bubbles."
So far, Members CU has has extremely little member reaction, Donley said.
"We have communication vehicles in place that will be implemented if and when they are necessary," he said. "In October 2008, we launched the 'Ask Jack' blog [a reference to the CU's CEO] to field questions from members regarding financial industry news items. This will be a logical vehicle with which communications will be centralized going forward."
