Even after NCUA announces its plan to dispose of $50 billion worth of toxic corporate assets, NCUA Chairman Debbie Matz said natural person credit unions must still make tough choices regarding the future of the corporate system.
"You will soon be facing the choice of either recapitalizing a corporate or finding other ways to obtain the same type of services that corporates have provided," Matz told 800 Texas Credit Union League members at their annual meeting yesterday.
"Four giant corporate credit unions" were pushed toward insolvency after the market for mortgage backed securities halted, creating losses on such a grand scale, recapitalization may be difficult for some, she said.
"Some" corporates can meet proposed capital requirements, she said, and those who can't are looking for a new business model. Matz said some have already shared merger discussions with the NCUA, and she expects to "eventually see a shakeout in the corporate system" which will result in "fewer ... but stronger," wholesale credit unions.