Chairman Matz stated:
"While NCUA has no regulatory authority over privately-insured institutions, they do pose a unique reputation risk to federally-insured credit unions. All financial institutions have been negatively affected by high unemployment, declines in real estate values, and loan losses all arising from the recent, protracted recession. Consumers do not always differentiate between private share insurance and federal share insurance. As a result, any pervasive problems that may develop with privately-insured credit unions could have an impact on federally-insured credit unions.
American Mutual Share Insurance Corporation (ASI) is a private share insurer
incorporated in Ohio. ASI, along with its wholly-owned subsidiary Excess Share
Insurance Corporation (ESI), provides primary share insurance to 152 credit unions in
nine states and excess share insurance to several hundred credit unions, including federally-insured credit unions, in 32 states. ASI has geographic concentration in two states particularly hard hit by the recent recession: California and Nevada."
Matz's statement should garner a lot of attention given the story this last weekend in the Las Vegas Review Journal that focused on the largest privately-insured credit union. Read March 12th blog post.
I wish this USDA hack would go back to the Department of Agriculture. She certainly knows little about financial institutions and even less about accepting blame for her agency's failures. NCUA failed the federally insured CUs that pay in to the NCUSIF with its bad decisions resulting from the lack of examination of St. Paul’s Croatian Credit Union in Cleveland that cost credit unions about $170 million. Credit unions deserve better leadership at its regulatory agency. People with experience dealing with financial services issues. Banks wold not accept a USDA official as the Comptroller of the Currency. Credit unions should not again accept career government bureaucrats as NCUA Board members.
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