As one of many credit unions struggling to grow with the ball and chain of limited capital shackled to our ankles, seeing the debate over alternative capital for credit unions is an exercise in frustration. There is a lot of talk, but no support from Congress.

Recently, our state examiner attempted to take our management team and board to the wood shed, arguing against our business strategy to regain profitability. He felt we were risking a fall from a well-capitalized status to an adequately capitalized category. The clear message from the Department of Financial Institutions lead examiner was that they would rather see us bleed to death, losing capital each month, as long as the capital ratio stayed above 7.0%.

Of course, that strategy can only last so long. Shrinking our credit union to achieve their goal only positioned us for failure. Our strategy is to protect our long-term capital position by rebuilding our credit union's best income generating assets, loans, to a level that creates the income needed to generate a positive ROA. He agreed that we had above average underwriting, strong loan file integrity and the solid back office operations needed to mitigate the risks associated with lending. Still, he argued against our strategy.