The National Federation of Community Development Unions has waded into the controversy over how the NCUA should handle the losses at corporate credit unions and has come down firmly in the camp of taking government help.
Meeting in Washington during CUNA's Governmental Affairs Conference, the National Federation Board passed a resolution in favor of making funds from the Troubled Asset Relief Program available to struggling credit unions.
"We are concerned about the consequences of reduced net worth and return on assets that would necessarily result from the measures that the National Credit Union Administration has proposed," said National Federation CEO Cliff Rosenthal.
In addition, the board also passed resolutions in favor of giving corporate credit unions direct access to the Central Liquidity Facility and spreading share insurance premiums out for as long as eight years.
"These actions will help all credit unions," Rosenthal said. "However, it is important to recognize that small and low-income credit unions are especially vulnerable during this crisis. In 2008, the pace of liquidations and mergers of low-income credit unions doubled, and far exceeded that of the rest of the credit union industry. If this trend continues, the capacity our credit unions have painstakingly built up over the last 30 years will be dismantled, leaving many low-income communities with little or no access to affordable financial services."
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