WASHINGTON-Here's a look at the questions credit unions had for CUNA and its task force on corporates during GAC:
Tom McDonough, City of Boston CU: What about the fact we are bearing the brunt of burden of credit unions that have been less successful, just by bringing up the issue of accepting TARP money?
Dan Mica: This has been our history in the credit union movement. We have been in this together, and when there is a problem, we deal with it together. If you are federally insured, you have a liability here even if you are the most successful CU in the United States.
Denise Caristi, President/CEO, Granite State Credit Union, New Hampshire: What about the corporate restructuring agreement: will NCUA allow us to see it? We are a member-owner of a very successful corporate and I think this whole crisis is cover for more regulatory control.
Mary Dunn: We did ask if we could see those agreements and the bottom line is that it is a legal agreement between the corporate and NCUA. So we have asked for the parameters of those agreements. We have asked for a summary of the PIMCO report.
Caristi: As a member-owner of a corporate, I would have to advise my corporate not to sign it if I, as an owner, can't see it.
Kent White, VP-Marketing, Amplify CU, Austin, Texas: Why is the option of natural-person buying the damaged assets of corporates off the table, and what about the possibility of doing that in lieu of paying the NCUSIF?
Bill Hampel: The issue in that plan is the assets currently have value significantly below market value. The corporate would then have to recognize the loss, which would defeat the purpose. Only way to work would be for the CU to buy it at a substantial premium, well above current market value. But the natural-person CU would then have to take a substantial writedown on their books. If we could 'force' all CUs in the country to do that, that would be the lower-cost way to do it. But we can't 'force' all CUs to do that.
Christina Brown, CEO, GESA CU, Richland, Wash.: Regarding the legislation proposed that would allow NCUA to extend the payback period beyond five years, where does that stand?
Ryan Fitzpatrick: We expect the House will consider mortgage modifications (cramdown) in bankruptcy proceedings, and as part of that we expect that the bill that has the provision we like, so we face the prospect of a bill we would very much not like to see as law contain a provision we would like to see as law.
Robert Taylor, CEO, Idaho State University FCU: Our members are already starting to pay the price [of the assessment] through lower dividends or canceling initiatives. If we are all in this together what is CUNA willing to concede to help us out?
Mica: Everyone on this stage has given up raises, bonuses, everything. We have laid off eight people, and may have to do some more. We have cut travel and lunches and meetings. So many of you have cut back and asked for fee waivers, that our revenue sunk significantly in the second half of the year. One-hundred-percent of dues money goes to advocacy and core issues. All the other programs are done to help you on a breakeven or slight plus basis.
Unidentified audience member: In five weeks I have to explain to our members why our CU is going to show a loss, and why they shouldn't take their money out of our CU and put it into a bank. What should we tell them?
Mica: We are strong. We give good returns. We did it in the Depression and we do it now. This is as close as I come to being upset, but having one year of a negative ROA when you have good capital levels and serve your community should not be the be-all, end-all. We're the safest, we're the best. Look at the rest of America. The rest of the country would love to be in our position.
