On-Site Coverage: Credit Unions Responsible for Corporate Crisis, Mercer Says
LAS VEGAS -- Given the current focus on how to replace lost investment revenue, how can corporates promise members they won't again leverage risk and experience a fourth systemic crisis? Jim McKeon, treasurer of the board at New York's $1.6 billion Municipal Credit Union, challenged a corporate credit union breakout panel today, saying that given all the focus on "making money," he thinks anyone who invests in corporates is "out of their minds." His question drew loud applause from attendees.
Panelist Mike Mercer, president/CEO of the Georgia Credit Union Affliates, responded, saying natural person credit unions forced corporates to leverage risk in pursuit of yield. Members would threaten to leave their corporate over just three basis points of returns, he said.
"Whether we want to admit it or not, credit unions made this," Mercer said.
Fellow panelist Bill Hampel added that almost all corporates will require significant recapitalization, so if members no longer trust corporates, they will simply cease to exist.He also said the NCUA's proposed corporate rule that requires credit unions to make their own investments provides the framework to address such concerns.