Once again, the Credit Union National Association (CUNA) has removed all doubt that it lives in a different reality from the rest of us.
In CUNA's July 12 testimony before the House Financial Service Committee, Jim Nussle, president and CEO of CUNA, stated that during the financial crisis the National Credit Union Share Insurance Fund (NCUSIF) remained well funded -- as the NCUSIF fund ratio was above 1.20 percent of insured deposits over that time period.
However, CUNA is not allowed to rewrite history about what happened during the financial crisis.
CUNA's testimony neglected to mention that the NCUSIF was bailed out by Congress in 2009 with the creation of the Temporary Corporate Credit Union Stabilization Fund (Stabilization Fund). This shifted the cost of the corporate credit union debacle from the NCUSIF to the Stabilization Fund.
Without the creation of the Stabilization Fund, the NCUSIF ratio was going to drop to 0.31 percent for 2009 with the failures of two corporate credit unions, WesCorp and U.S. Central.
Moreover, the NCUSIF ratio would have fallen further, maybe going into the red, because three other corporate credit unions failed.
CUNA also conveniently forgot to mention that the Stabilization Fund borrowed billions of dollars from the U.S. Treasury to help resolve these five failed corporate credit unions. In fact, the Stabilization Fund still has $1 billion in borrowings outstanding.
So, the reality is that the NCUSIF was bailed out during the financial crisis and the industry tapped the Treasury to help resolve the corporate credit union debacle.
Keith -- The left-wing illuminati that have historically led the credit union "movement" at CUNA have been all about spin for decades. They haven't told their own member institutions the truth since before I can remember. -- Marvin U. 07/18/16
ReplyDeleteCorrect Dr. Legget but you leave out that FDIC did not borrow from UST while (as you pointed out) NCUA had to borrow ($28 BILLION).
ReplyDeleteWhile that was occurring, Bill (Robusterian) Hampel was proclaiming the FDIC was insolvent. He made the preposterous claim while comparing FDIC to NCUA insurance.
And that's what we credit unions pay member money for..."leaders" who misrepresent the truth for their own self interest.
Hampel then and Nussle now publicly mislead us.
Why?
Because they feel if we know the truth, we would leave and become banks.
In Nussle's case, it's particularly interesting to consider that he makes this false claim, as a former Congressman, when he has to know that Congress knows the truth BECAUSE THEY APPROVED THE BORROWING.
As my board has concluded, CUNA and Nafcu have to keep lying because they can't deal with the truth.
I guess they think we credit unions don't know this stuff.
He fails to also disclose that the NCUSIF under law confiscated roughly 0.80% of all natural person credit unions assets to fund itself through its front door while it fed the CCU Stabilization Fund out its back door.
ReplyDeleteYes, NCUA did what they had to do, but CUNA should fending for we dues paying cus and make sure none of this is forgotten, or soon the NCUA will be taking our members' money again.
Get ready for medallion assessments
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