Corporate Credit Union Failures

http://moneyfeatures.blogs.money.cnn.com/2009/03/23/credit-union-members-dont-panic/

What a crock of crap. The failures of the two corporate credit unions, for a total of $57B, is HUGE. These failures would be similar to one of the Federal Reserve Banks failing. The CU system in the US was just hit with a 100 basis point fee increase to cover the losses, expected to be in excess of $6B. The NCUA had only $4.7B reserved for such losses. The NCUA assessment is likely to force many credit unions into mergers as well as many posting operating losses for the year. The article did not report that the US Central CU was given $1B late last year by the NCUA to cover their $1.5B mortgage backed securities loss. Part of that money is being made up in the 100 basis point assessment.

The days of cheap money from the credit unions is numbered, especially in consumer and business lending, the latter of the two the credit unions have no business being in. And people who write articles like this are idiots. They need to take off their rose colored glasses and realize that credit unions are part of our financial system and have made just as many mistakes as banks. I just hope that when this gets bad enough that the CUs start asking for public funds to help out, they fall under just as much media scrutiny as banks have in the past six months.