Speaking No Evil as CRE Troubles Put Nerves on Edge
The credit union industry is known for its kinship. Few dare to go on record and point fingers at their credit union peers for poor loan performance.
But behind closed doors, there are a handful of credit unions in Texas, California and Nevada that are easily on the radar when it comes to their business lending portfolio. In cases such as the conserved AEA Federal Credit Union in Yuma, Ariz., business loan red flags emerged well before its conservatorship took place in December 2010, industry watchers noticed.
"These numbers tell a story of a vital and growing component of many credit unions’ balance sheets–one which requires careful supervision," Matz penned in a December 2010 Guest Opinion published in a Credit Union Times special report. "Whether or not Congress chooses to raise the cap, NCUA has already increased scrutiny of MBL programs."
The SBA said it will begin accepting refinancing applications on Feb. 28. The program, authorized under the Small Business Jobs Act, will be in effect through Sept. 27, 2012.
Businesses with immediate need due to impending balloon payments before Dec. 31, 2012, will have first access. The SBA said it will revisit the program later and may open it to businesses with balloon payments due after that date or those that can demonstrate strong need in other ways.
"I believe that the weakness in the CRE market requires prompt and robust responses from the regulators to guard against harmful effects on financial institutions and the economy," Dodd said. "I urge you to redouble your efforts to provide appropriate oversight of this vital component of our economy and look forward to working with you to bring much-needed stability to the CRE market."
Dodd cited a Congressional Research Service report that showed commercial mortgage delinquencies had increased from 4% at the end of the third quarter of 2009 to 6% in January.