Thursday, May 10, 2012

Core Credit Union Business Model

The core credit union business model is consumer lending, not business lending - that is the message from two recent NCUA press releases regarding A. E. A. FCU and Texans CU.

NCUA stated that the agency was in the process of returning these two conserved credit unions "to the core credit union business model."

What these two credit unions have in common is that they both shifted their focus from being consumer lenders and embarked into a disastrous foray in commercial lending. This ultimately required the NCUA to seize the credit unions and to porvide both credit unions with capital assistance.

Read Texans CU preass release. Read A. E. A. FCU press release.


  1. Would that be like the core headlines and subhead in American Banker on March 12, 2012?

    “Commercial Loans Rise on the Books of Failed Banks”
    “The profile of a typical bank failure has taken on a new shape in 2012, with the combustion of construction loan portfolios giving way business loan blowups.”

    Or that the core business media day of the week has become Bank Failure Friday?

    Or more like the Federal Reserve Paper on regulation of systemic risk and the certainty of failures (as in your team’s 2008 crisis) when traditional retail deposits, core liabilities, did not keep pace with asset growth in banks causing risk premium erosion and extraordinary vulnerabilities?

    Or are you just twisting words and making stuff up to fill some core blogspace?

  2. CU Rules & Regs were set up to require expertise in Business Lending in order to offer this type of product. To get this expertise CU's are forced to seek out the expertise from the Banking world. Texans CU made the mistake of creating their Business Lending Program by hiring Bankers that presented themselves as the experts in this area and allowing them to proceed as such. They attended as many events and conferences that they could preaching their expertise to those in the CU world that would listen. Most of us were a little skeptical didn't buy into what they were preaching but unfortunatley there were those that did including those in management at Texans.

    1. Really??? Even credit unions failures in business lending is the bankers fault? Incredible.

  3. why do you leave comment spam - like the immediately previous post - on your blog?



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