When it comes to a government bailout for credit unions, the talk among Missouri credit unions is: don't go there.
At least that was the view at the annual business meeting of the Missouri Credit Union Association last month in Jefferson City when the group's leadership expounded against the industry pushing for government financial relief, even though the group agrees with CUNA's policy to seek NCUSIF backup funds.
Though there are “pockets in the country” where troubled CUs need assistance, “we should be able to handle this ourselves,” declared Betty Clark, the outgoing chairman of MCUA and president/CEO of the $110 million United Credit Union of Mexico, Mo.
“There are too many hands out there” seeking bailout money, and CUs should not be a group in that role, said Clark. She added that she does appreciate the CUNA's policy seeking NCUSIF backup, because CUs should not get passed over when crisis hits.
Agreeing with Clark on her no-bailout view was the newly elected chairman of MCUA, Steve Moeckli, president/CEO of Electro Savings CU of St. Louis. He said the industry's cooperative spirit can be applied “to work together to solve this problem.”
Pointing to the economic crisis and its impact on CUs, he said, “It is raining very hard and when that happens everybody gets wet.” He noted that the capital position of CUs in Missouri and elsewhere remained strong to weather the storm.
On that score, the MCUA returned $500,000 of 2009 association dues and is offering a 23% reduction in fees. The dues give-back was announced earlier this spring.
“That will not cure all ills, but it is something,” said the United CU CEO.
Also at the annual conference, Keith Morton, NCUA region IV director, who also is a U.S. Central Bank conservatorship board member, told the group, “We have to support the corporate system and if we don't, the losses you book now will be nothing.”
“It's a reality of the situation that we are facing,” said Morton. “The natural person credit union, while taking a hit, is very sound and in good position” to recover.
In other state developments, the board of the Pennsylvania Credit Union Association adopted a policy resolution warning it would take “appropriate” legal steps to mitigate the impact of the U.S. Central and WesCorp conservatorships on CUs.
Following up on CUNA threats two weeks ago that it has been looking at suing the agency over its actions, the Pennsylvania trade group said, together with CUNA, it is prepared to “engage in direct advocacy” with the NCUA as well as take on legislative pursuits to diminish the impact of the costly assessments borne by CUs across the U.S.
The PCUA resolution did not spell out what steps it would but said they would be enacted “only if necessary.”
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