California CU CEO Laces Into TARP

SAN BERNARDINO, Calif. — Some West Coast credit unions that racked up a dismal performance for 2008 were not afraid last week to speak out about inequities in TARP funds being channeled into banks.For one, Larry Sharp, president/CEO of the $1 billion Arrowhead CU vowed to continue being “a vocal advocate” on directing TARP funds to CUs.“There are states like mine as well as Florida, Arizona and Nevada that have been hit very hard by this recession, and it is simply maddening and irritating that credit unions are treated so very differently from banks considering the vital economic role we play,” said Sharp. Earlier this month he served on a California/Nevada Credit Union League panel that met with congressional and Treasury leaders to complain about the lack of TARP funds.Sharp, joined by seven CEOs from other southern California and Nevada CUs, made new appeals for TARP funds to members of the House Financial Services Committee. The CEO said the economic distress in his area remains dire, making it all the more urgent that lawmakers recognize the need to help CUs.As for Arrowhead, Sharp said earlier this month that the San Bernardino CU was closing four branches, slashing operating expenses by 10%, and freezing or cutting salaries after a $25 million year-end loss.Echoing Sharp, Wally Murray, president/CEO of the $500 million Greater Nevada CU of Carson City, said he was hopeful the Obama administration would agree to “making changes in the law to provide relief on the net worth position” of CUs that “would not cost taxpayers.” Murray said he agrees with Sharp that banks are receiving very favorable treatment under TARP and that CUs should have the option to tap into the funds.Sharp told Credit Union Times he is beginning to see small improvements in the housing sector in his market. “We’re seeing flattening of the housing market and an increase in sales.” The Arrowhead CEO said he was particularly pleased that his own congressman, Rep. Joe Baca (D-Calif.), introduced a TARP amendment to provide a limited form of alternative capital enabling CUs to participate. Still, “I’m mad as hell that Paulson and the Treasury decided to fund our competitors and leave us out in the cold,” said Sharp.–[email protected]