I was slightly amused when I opened your Jan. 20 edition to the centerfold and noticed articles from two noted credit union lampreys, Marvin Umholtz and Alan Theriault. As they have done so often in the past, both give the opinion that the credit union community faces severe difficulties. Umholtz focuses on the long-term negative impact that the losses in our corporate credit union system will have on natural person credit unions. Theriault follows that with his usual answer to our dilemma-convert to a bank charter. Rather than point out the self-serving nature of their positions, I think it’s only fair to acknowledge that there is some truth to their basic premise. After all, even hypochondriacs get sick on occasion.

It is true that natural person credit unions will be responsible for repaying billions in losses from corporate system losses. And unless this economy makes a dramatic turnaround, we will very likely be facing hundreds of millions in losses from natural person credit unions in the near future. It is also true that, under current regulations, the only way for most credit unions to foot these bills will be from existing capital or future earnings. Either way, our business plans will be impacted by the limited options afforded us.

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Peter Westerman


Credit Union Times

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