LAS VEGAS – A credit union representative called on Congress this afternoon to review a number of controversial pending NCUA regulations on loan participations, CUSOs, liquidity and troubled debt restructurings to ensure they will not further hinder the dwindling number of healthy Nevada credit unions.
“While a regulation might work well for Midwest and southern credit unions, in Nevada it is simply not the case,” said Susanne Longson, vice president at SCE FCU, who was forced last year to merge her own $60 million Las Vegas credit union, SONEPCO FCU into the larger California credit union amidst the Nevada financial turmoil
The long-time CEO at SONEPCO, which served employees of Southern Nevada Electric Power Co., was testifying this afternoon during a field hearing of the House Financial Services Committee on how to curb the foreclosure crisis. Nevada, one of four “sand states’ devastated by the real estate bust, has lost a fourth of its 28 credit unions since 2007, either through failure of merger, and several more are threatened by continued losses.
“As you are aware, Nevada, and more specifically the greater Las Vegas area, has been ground zero for the unemployment and housing crisis that has plagued our nation for these past years,” said Longson. “Even today, as many other states are beginning to see signs of recovery, Nevada is still in deep troubled times.”
Longson, who now runs the Las Vegas operations for SCE, the Southern California Edison credit union, told lawmakers that Nevada lenders need to be treated differently than those in other states because of the depths of the financial woes here. “The recession and the housing crisis have left credit unions battered and bruised, especially those here in the Silver State,” said Longson.
She said NCUA resisted when her credit union offered an ease of repayment terms and extra forbearance to some of its most troubled members because of the depths of the state’s financial woes. “The regulators insisted that we should foreclose on these homes and place our members on the street. We refused,” said Longson, a third generation credit union executive.
She asked that NCUA be allowed to consider the impact on Nevada’s dire financial condition in the pending regulations on loan participations, CUSOs, troubled debt restructuring and liquidity. “While their mission is to examine credit unions as a whole, circumstances are different in the Silver State,” said the credit union executive. She called on the lawmakers to “review the pending regulations and ensure that they contain flexibility for remaining credit unions in Nevada.”
Longson recommended Congress adopt several pending legislative proposals to help credit unions, including a bill allowing credit unions to raise supplemental capital, a measure to give credit unions greater ability appeal NCUA examinations and an increase in the member business loan limit, and request that the NCUA consider the impact of Nevada’s economic climate in their pending regulations on loan participations, troubled debt restructures, credit union service organizations, liquidity, and derivatives.
The credit union executive was testifying alongside of the director of the state’s Foreclosure Mediation Program; the president of the Neighborhood Housing Services of Southern Nevada; the Nevada Association of Mortgage Professionals and a local realtor.
