'CU On Steroids' Already Exists
Regarding GTE FCU CEO Bucky Sebastian's proposals for expanded powers for credit unions, which he called a "credit union on steroids" (cujournal.com, Jan. 27): this is a mutual savings bank. The law already permits such a move. Why not acknowledge it and support the directors of a credit union proposing a conversion, and move to the FDIC, rather than interfere in the decision-making as he, the NCUA, and some of the credit union trade associations have in the past?
Someone is bound to ask what the impact would be on the NCUSIF if Mr. Sebastian's credit union had been on steroids. Does that mean his losses would be "steroids-sized" too? Yikes. This is a mutual savings bank.
Federal income taxes, Community Reinvestment Act, enhanced powers, open fields of membership; unlimited lending, risk-weighting of capital, the ability to raise capital from outside sources, and a non-stock, not-for-profit cooperative-everything Mr. Sebastian is asking for.
Now, as far as the volunteer board is concerned, the board of a mutual can be unpaid if it wants to be. As far as taxes are concerned, with the losses facing Mr. Sebastian's credit union, it will be a while before taxes would accrue. If 12% taxes can be justified for the additional powers 25%, 35%, 40% can be justified, and have been, by other organizations credit union and non-credit union making such a strategic shift.
Alan Theriault, President
CU Financial Services, Portland, Maine