Credit unions have provided a serious alternative to banking with big banks. Their strength in their communities commands a market share that the big banks want. So this news is ominous. Given what I know about credit unions around the country, the theory of financial problems does not make sense. Besides, we did not seize AIG, Citibank or Goldman Sachs. We just gave and lent them $12 trillion.
If you know the real story here, I would love to hear it.
U. S. seizes top credit union clearinghouse
Excerpt:
WASHINGTON, March 20 (Reuters) – Regulators seized the top clearinghouse for U.S. credit unions, citing a critical deterioration in the finances of the provider of services to thousands of retail credit unions.
The National Credit Union Administration (NCUA) took control of U.S. Central Federal Credit Union, a huge wholesale credit union with about $34 billion in assets based in Lenexa, Kansas.
It also seized Western Corporate (WesCorp) Federal Credit Union of San Dimas, California, another corporate credit union with $23 billion in assets.
WOW!!!
The Feds have just seized control of an institution that provides settlement services to 100 percent of corporate credit unions and 93 percent of all U.S. credit unions. At minimum, this means that local Credit Unions all over the U.S. [one of the only credible atlernatives to money center banks] will now be facing higher costs,
“The immediate costs of the takeover are coming out of a $7 billion industry-maintained insurance fund, but will mean higher premiums levied on retail credit unions.”
This does not smell right. Actually, it STINKS.
Everyone should remember the story from Mar. 17 where the FDIC showed how it views “well run” institutions:
A Massachusetts bank that has defied the odds and remained free of bad loans amid the economic crisis is now being criticized by the Federal Deposit Insurance Corp. for the cautious business practices that caused its rare success.
The secret behind East Bridgewater Savings Bank’s accomplishments is the careful approach of 62-year-old chief executive Joseph Petrucelli.
This Friday night mugging – in one fell swoop – will reportedly raise the cost of EVERY local credit union for doing business. Is a message being sent here?