Strength in the Face of Adversity

Credit unions have the ability to serve members through all financial times.  


On Friday, NCUA released the details of its rules and regulations for the corporate credit union system and updated the industry on how it planned to handle the Corporates’ so-called legacy assets. It also placed under conservatorship three more Corporates. In the past 18 months, NCUA has conserved five Corporates, citing not specific data but broad concerns that the Corporates had “no reasonable prospects” of achieving adequate capitalization.

We have not yet obtained sufficient data to provide a thorough analysis of what our regulator’s actions will ultimately mean for the credit union system. Rest assured we are working on a thoughtful, systematic response, one that examines the forest, not the trees.

What is happening within the industry, however, does not negate credit unions’ positive impact on local economies. Even with a battered Corporate system, which has been on the mend, credit unions have remained one of only three consistent institutional providers of net credit to the economy. We’ve had to contend with some bank-like headlines over the past few days (see The New York Times and Wall Street Journal for examples), but our strength does not lie in the fact that we’re not banks; by design, our strength lies in the ability to take the long view and pull members through the worst financial times.

To continue serving members, you must prepare your strategies and balance sheets for 2011. If loans are a priority (and who isn’t looking for loans right now), then check out some interesting statistics about the industry’s top 100 originators in real estate loans and the most productive loan originators. We also have a new article from Mike Sacher, who offers three compelling reasons why the worst in delinquencies and charge-offs is behind us.