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News Now

Washington
Mica Bank strain not from CUs
WASHINGTON (11/29/07)—Credit Union National Association (CUNA) President/CEO Dan Mica noted that even with the impact of mortgage-related losses banks continue to post substantial profits. And, banker rhetoric aside, any strains they're feeling are certainly not the result of credit union competition, he said. "As credit unions work to help members of their communities survive the credit crunch caused by the real estate bust, banks clearly need to stop their anti-credit union rhetoric and false claims of unfair competition,” the CUNA leader said. The Federal Deposit Insurance Corp. (FDIC) announced that federally insured commercial banks and savings institutions reported net income of $28.7 billion for the third quarter of 2007. The net income level was a $9.4 billion drop (24.7%) from the third quarter of 2006, according to the FDIC. However, in 2006 banks---for the sixth consecutive year-- scored record-breaking profits. They earned $146 billion last year, up 6.6% from the previous year’s record. According to FDIC Chairwoman Sheila Bair, the banking industry’s performance this quarter was hurt by asset-quality problems and volatility in financial markets. “Almost half of all insured institutions reported year-over-year declines in earnings. Residential mortgage loans were the focal point of asset-quality problems. But delinquency and loss rates were up across all major loan categories," said Bair in a release.


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