Sarah Snell Cooke’ s column ["Secondary Capital Prescription," CU Times, April 21] quotes extensively from the NCUA’s recent white paper describing the “mixed results” of the use of secondary capital by low-income credit unions.

The article quotes the figure that 83% of low-income credit unions with secondary capital are “subject to little or no prompt corrective action,” compared to 97% of the general CU population. That sounds like a glass considerably more than half full to me. Low-income credit unions by their very nature are in a higher risk business than credit unions that restrict themselves to more prosperous members. In general, they do not enjoy the same capital levels to begin with as other credit unions. It should not be surprising that more fall into PCA territory.

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Peter Westerman


Credit Union Times

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