LEDYARD, Conn. — Credit unions are pretty squeaky clean in their business practices but that won't exempt them from feeling the pinch of the current mortgage markets. However, it could open up some opportunities.
That was the general sense of the diverse set of economists addressing Members United's Economic Forum. Kevin Hassett, an economic adviser for two presidential campaigns, noted that the current housing supply is 18 times the demand in a good year and new home construction "as deep in the tank as we've ever seen." "It's been a test of character for you and you've really come through," Hassett said, highlighting that credit union delinquencies are a fraction of those at banks.
He predicted that delinquencies would rise but credit unions are sure to turn around in this market "because you're the strong actor in a weak place."
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Regarding the Treasury proposal to create one regulator for all financial institutions, Members United's resident economist Nick Perna, suggested that while this makes sense from the stand point of scale, credit unions will want to retain their own insurance fund because their losses are much lower.
David Hale, global economist/chair of China Online, LLC, agreed, "You want to keep your insurance fund as separate as you can as long as you can."
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