The plight of cooperativas has received little attention as Congress debates how to help Puerto Rico avoid insolvency.
There's no question the cooperativas – credit unions insured by the Puerto Rican government – are intimately tied up in the debt crisis facing the island. And some would like to see the NCUA step in and provide a backstop for the cooperativas in case they fail.
"It's a huge problem for the co-ops," John Mudd, an attorney in Puerto Rico who represents one cooperativa and has written extensively about the Puerto Rico debt crisis, said. "Most of the credit unions can take the hit. Some of the co-ops cannot take the hit. The problem is that there isn't enough money to cover the deposits."
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