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MnCUN to IStar TribuneI CUs well capitalized
MINNEAPOLIS (8/4/09)--Credit unions are well capitalized, Mark Cummins, Minnesota Credit Union Network president/CEO, said in a response to a recent article in the Minneapolis Star Tribune. The newspaper published an article July 27 that highlighted some of the lending challenges credit unions have recently encountered. The newspaper said some credit unions engaged in risky lending and are losing money. The article did not clarify that those credit unions’ difficulties were anomalies in the industry, as only a handful were involved in risky lending practices, Cummins said. “Minnesota credit unions have a long and proud history of lending conservatively to their members,” Cummins said. “In fact, only 2.5% of the state’s credit unions have capital levels that are below what regulators consider to be adequately capitalized.” As of March 31, the capital ratio for Minnesota credit unions was 9.8%, above the 7% threshold set by the National Credit Union Administration, he added. Money that credit union members have on deposit is insured up to $250,000. “There is no problem that could occur in the credit union industry that cannot be handled by the existing deposit insurance system,” Cummins said.
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