"It's the same exact issues that have already been covered by industry press, but because it's The Wall Street Journal, it's a new stage with a different readership," said Austin Braithwait, senior vice president for member relations and communications for U.S. Central Credit Union.
Braithwait said the corporate community was buzzing last week as reporter Mark Maremont called from the nation's second-largest daily newspaper requesting interviews. Though corporates didn't know when the story would run or what would be included, the article's biggest surprise was its placement on the front page.
While Maremont did a good job covering the issue, Braithwait and two other corporate representatives, Western Corporate's Chief Financial Officer Jim Hayes, who was sourced in the article, and Members United Chief Marketing Officer Vic Vrigian, all said they wished he had included more positive points.
For example, securities with unrealized losses are still performing as promised, providing a steady revenue stream. Hayes agreed with the analogy that unrealized securities losses are like a drop in home values; unless you're forced to sell, it's not a problem.
"To me, it's important not to just end it the way he did, because we don't want to cause panic," Hayes said. "Yes, even the most risk-averse institutions are feeling pressure, and the problem I have is that he leaves it at that. He's leaving out how we plan to weather the storm, and the danger of only telling half the story is some readers might assume we don't have a plan, when we absolutely do."
However, all three men agreed the reporter probably didn't intend to tell a half-story.
"I think they were attempting to write a balanced story and not make a complicated issue any more complicated," Vrigian said, adding "it was a pretty long story as it was."
The NCUA responded to the article, stating that it will not change its regulatory strategy as a result of the publicity.
"A critical factor in this current depressed mortgage-related securities market is liquidity," the NCUA's official response reads. "The liquidity position of corporate credit unions is strong.
Corporate credit unions have ample liquidity to meet foreseeable liquidity demands. Furthermore, they have established additional liquidity sources in the event of increased liquidity demands from their members."
In addition, Mid-Atlantic Corporate Federal Credit Union sent a letter to its members.
"Mid-Altantic remains as solidly positioned as ever," said the letter, signed by Jay Murray, president/CEO. He said that the corporate does not directly invest in mortgage-backed securities but that it does have some exposure to these types of securities through the funds it holds with U.S. Central. "Currently, U.S. Central is holding their securities portfolio to maturity," Murray said, "and their investment holdings are continuing to earn and perform as expected."