Saturday, April 28, 2012

Another CU Opposes S 2231

Another credit union CEO expressed opposition to Udall bill (S.2231). Dale Kerslake, president and CEO of Cascade Federal Credit Union, Kent, Wash., in a letter to Senate leaders noted that most credit unions are ill-prepared for such expanded business lending authority and far too many credit unions simply can’t afford the additional risks that business lending poses to their balance sheets. Read the letter below.


  1. No news here. Some would say Mr. Kerslake is against almost everything. Over the years he has argued about mergers, community chartering, name changes, fees, too much capital, business lending, charter changes, salary, zoning changes, and “any new authority”. The major Seattle newspaper once responded to him by saying, “Every industry has its cranks and critics.” Despite occasional curmudgeonly or contrarian points of view, he has many friends and colleagues in the open, welcoming and inclusive credit union sector.

    So if your point is that all must agree before Congress acts, it is flawed logic. Remember that even with dissenting points of view, the entire banking industry was rescued by a split Congress with TARP-CCP funding. What’s news are the shocking Congressional and GAO reports issued in the last 60 days that the bankers are not repaying billions of dollars given to banks by taxpayers.

    If you are illustrating there are risks to manage in any type of lending, you are right. Just look at last week’s news about court proceedings regarding criminal business lending insider activity by bankers that brought down Virginia’s Bank of the Commonwealth. Where were bank regulators, auditors and FDIC on that one? So if suggesting only banks can do business lending correctly, why is the current measure of national business lending delinquency so much higher in banks than credit unions?

    Good that ICBA and ABA have ‘friended’ Dale Kerslake. Credit unions have likewise been ‘friended’ Congress, the American public and the Main Street businesses that are asking for more credit union help – in the wake of the failure and abandonment by so many of your banks.

  2. There are MANY credit unions that don't want the cap increased but are unwilling to buck the trade organizations' and regulator's backing by making their views known. Your heading should be "Another CU PUBICLY Opposes ..."

  3. ok, anonymous, let us not get too carried away.
    credit unions have been friended by congress- then how do you explain no mbl relief, no supplemental capital and, where for art thou CURIA?
    americans have "friended" credit unions- so why was membership growth, in the year of "bank transfer day" 1.5%? this is interesting. the very best campaign ever launched for cus was the idea of a citizen, not CUN-OT! and the result, despite all the miscounts and free publicity is 1.5%.
    Main Street businesses have "friended" credit unions- delusional. name them. must be all those telesis loans that many other credible business lenders passed on (including some credit unions). or perhaps all those norlarco loans.
    expanding business lending capacity to some credit unions would be nice but unfortunately offset by the toxicity of what occurs in cuso's and by scores of credit unions that will try to make this year's roa and loan numbers by buying participations from other credit unions that have proven to be risky and unprepared...ncua is probably praying harder than banks that this does not happen!

    1. Looks like the 5 banks FDIC shut down, just over the weekend, had bigger combined portfolio losses than Norlarco and Telesis; Bank business lending problems following the banking crisis may be thousands of times worse. A reason marketplace alternatives have become a public policy necessity.

  4. If you can't kill the message try killing the messenger. Speaking against MBL makes you a critic and a crank. Add me to the critic and crank club. Kerslake is correct in his assessment of the latest NCUA sponsored risk taking proposal. The NCUA promoted expanded corporate credit union investment authority and now credit unions are paying for it. Now the NCUA promotes increased MBL at a time when 129 credit unions are currently reporting a 10% default rate on MBL. The NCUA Inspector General reported in 2010 business loans were a factor in 7 of the 10 costliest credit union failures. We are now dealing with the failures of: Telesis CU, Chetco FCU & Texans CU. Kerslake is correct and now is not the time to expand MBL authority.

  5. It's too easy to mis-label me as being against everything when you're anonymous.

    Prime example - with regard to community charter,I've said for years it is not WHO you serve, it's HOW you serve.

    Although I've had fun with some of the CU name changes, my only oppositon to name changes is the ridiculous amount of money some CUs pay marketing firms.

    Charter changes - knock yourself out - just don't let management pilfer the member-owned capital.

    Anti - merger? Is that why CFCU is signed up for NCUAs merger program? Some mergers make sense - some are just "bigger is better".

    Call me sometime anonymous so we can update your notes.

    Dale - Cascade FCU



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