NCUSIF Rescue Is 'Unconcsionable'
This "bailout" of the corporate system seems unconscionable and appears to weaken the entire credit union system at a time when the industry cannot absorb the hit. The corporates may survive, but how will credit unions fare? With the GAC just weeks away, could we not have alternatively lobbied 'til we dropped to secure a small slice of the Fed's next bailout distribution rather than feed amongst ourselves?
With the understanding and acknowledgment that we are one credit union system, the year ahead presents us with more "unknowns" than we have ever had to face during our lifetimes. Accordingly, many credit unions, like us, have developed various scenario plans to protect Net Worth to insure our continued viability while continuing to serve our membership with exceptional value. Unfortunately, we had no knowledge of the pending corporate credit union bailout and related costs, and therefore this change was not one of those scenarios we could plan for.
My concern is that the cost of this plan will effectively result in decreased member service, higher member fess, higher loan costs, and so on ultimately blurring the lines of distinction between credit unions and banks and possibly jeopardizing natural person credit union in the next couple of years.
While admittedly the cost of this corporate bailout is a tough pill to swallow, I would implore NCUA to immediately seek to relax the net worth definitions and ramifications of PCA going forward as this would alleviate considerable stress on natural person credit union, and allow us to better serve our members and be a credit union.
Peter Sainato, CEO
Justice FCU, Chantilly, Va.