PLANO, Texas — While markets plunged and investors panicked following news that JPMorgan Chase would buy a collapsed Bear Stearns, the impact could create more opportunities for credit unions.
The deal could help credit unions secure the value in their current agency-issued, mortgage-backed securities," said Brian Turner, manager of advisory services at Southwest Corporate Credit Union. Opportunities to invest in "well-structured" products could also arise during a time when term investment yields have fallen 250 basis points since last July.
Fortunately, credit unions have not been felt the aftershocks of the subprime crisis, Turner said.
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"Credit unions have been better insulated from credit losses due their disciplined credit standards especially over the past four years when market opportunists flooded the market with highly questionable loans and related non-agency issued securities [which have led to] to today's troubles."
Even in a weak economic climate, "gold standard" mortgage loans could provide strong relative value to credit union earning streams, Turner noted.
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