Wednesday, May 25, 2011

NCUA's Efforts to Preserve Liquidity in Corporate CU System Worked

In general, I've been an outspoken critic of NCUA and its policies; but today, I would like to point out a policy that worked.

The Inspector General Report on the failure of Members United shows that NCUA's policies to stop the liquidity drain in the corporate credit union system worked and these policies partially reversed the outflow of funds.

"The Temporary Corporate Credit Union Liquidity Guarantee Program stabilized Members United's remaining unsecured borrowing sources. The Temporary Corporate Credit Union Share Guarantee Program restored some confidence in Members United when comparing the 42 percent decline in member shares between March and December 2008, with the 24 percent increase in 2009 and the 3 percent increase though July 2010."

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