I was disappointed that CUNA and NAFCU have taken the position that converting credit unions should pay future corporate stabilization fund assessments. I see this as an exit tax on credit unions. I see it as contrary to the principles of charter choice and free markets. I object to any exit tax for the following reasons.

Many credit unions paid a huge price for the collapse of the corporate credit union system when they lost the capital that was invested in the corporate credit union system. SAFE lost $13 million of Wescorp Capital. No one is going to recompense SAFE for capitalizing the corporate credit union system. The capital we provided benefited the entire credit union system. In a few short years when the disastrous new NCUA corporate credit union regulation reaps its harvest of unintended natural person credit union investment losses, the credit union movement will understand how much all credit unions benefited from that capital and the corporate credit union system. The corporate system, in hindsight, will be found to have managed investments far better than individual credit unions will manage them. It is a fallacy to argue that imposing an exit fee on converting credit unions to pay for the stabilization costs brings fairness to who pays for the corporate credit union meltdown.

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Peter Westerman


Credit Union Times

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