The Wall Street Journal examined credit unions whose membership have been hit hard by the economic shutdown arising from the coronavirus.
The article noted there are a number of credit unions exposed to casinos, oil, and other industries that have been affected by coronavirus mass layoffs.
According to the Credit Union National Association, almost a third of credit unions are tied to a single employer, industry, or association. This means that these credit unions could see sudden mass layoffs in their membership.
For example, WestStar Credit Union (Las Vegas, NV) is closely tied to the Las Vegas casino industry. On March 18, all casinos were closed by an order from the governor of Nevada. The credit union reported that one in five borrowers have asked for a deferral on a car or home loan.
Provisions for loan and lease losses at WestStar went from $67,300 at the end of the first quarter in 2019 to $553,800 one year later, according to its Financial Performance Report.
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Which is why it's good for Credit Union's to have a diverse field of membership, moving away from traditional single-sponsor FOM's.
ReplyDeleteBut is this not a result of what the bankers have been seeking? Holding credit unions to a 1930s model while banks have state-of-the-art powers? And don't give me the tax issue. Federal credit unions are the only private enterprises NOT eligible for tax credits on payroll taxes enabled by HR 6201.
ReplyDelete