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Vermont CUs discuss impact of stabilization plan
SOUTH BURLINGTON, Vt. (2/16/09)--Nearly 75% of Vermont's credit unions connected to a conference call hosted Wednesday by the Association of Vermont CUs (AVCU) on the National Credit Union Administration's (NCUA) Corporate Stabilization Program. Speakers from NCUA, the state regulator's office, and the league's accounting firm joined AVCU President Joe Bergeron in the session (Newslines Express Feb. 13). NCUA Region I Director Mark Treichel gave a brief background of the agency’s rationale for the plan, reiterating that, as mentioned in the Credit Union National Association's nationwide conference call last week, the NCUA board continues to be flexible to alternatives. “As long as they can get over three hurdles, and those hurdles are that they’re realistic, they’re responsible, and that they’re legal,” Treichel said, the NCUA board is “open to whatever scenarios that the credit union industry can come up with." Tricorp FCU CEO Steve Roy, said, “Right now, liquidity is the key." In addition to discussing the current situation, Roy explained that late summer of 2008 was one of the most challenging times for liquidity the corporate had experienced in a very long time. Tricorp performed well through those difficult times and that liquidity in February 2009 is still very good, he said. “We are very appreciative of the support of the membership of Tricorp,” Roy said. “We have all done very well collectively with our liquidity and I hope that continues because that will be the key to us moving through this market.” Tom Candon deputy commissioner of the Vermont Department of Banking, Insurance, Securities and Health Care Administration, which oversees state-chartered credit unions, discussed the effect that the NCUA program would have on Vermont credit unions. Under the current assessment plan, Candon said, two Vermont credit unions would likely drop below 7% capitalization and another 13 would suffer negative returns on assets, resulting in 68% of all state-chartered credit unions being severely adversely affected. “We know that this is a really challenging time here,” Candon said. “We see it on the bank side, our licensed lender side and I was honestly hoping that the credit unions would fair better. They have faired better to date. We need the credit unions there to help make loans to people who are so desperate right now, so this is just one more challenge for you.” Glen Bolster, CPA from the association's accounting firm, A.M. Peisch & Co., said he was in agreement with NCUA’s accounting instructions with respect to 2008 year-end financial statements, but said his opinions may change once the American Institute of Certified Public Accountants issues further guidance.
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