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Mica Corporates are feeling strain but remain strong
WASHINGTON (8/12/08)--Credit Union National Association (CUNA) President/CEO Dan Mica pointed out that yesterday's Wall Street Journal story about corporate credit union balance sheets reports what corporates have been telling their member credit unions for some time--that they do have some investments that are feeling the strain of the mortgage crisis, but the unrealized losses are expected to recover over time as the housing market improves. Mica's comments were in response to Monday's front page Wall Street Journal story entitled "Mortgage-Market Trouble Reaches Big Credit Unions." (Use the link below to access the complete story online.) Mica said the National Credit Union Administration (NCUA) also has been on the case, as evidenced by its June Letter to Credit Unions, which addressed the impact of the current mortgage market on corporate credit unions. It pointed out steps corporate credit unions have been taking to address their continued safety and soundness in the downturn in the housing market. Mica also reiterated, as NCUA's Kent Buckham and the corporate representatives did in the story, that CUNA is confident the likelihood of significant realized losses is very remote. Also, the investments at issue continue to pay interest and principle on schedule. In addition to NCUA, the national rating agencies and the corporates' financial auditors have attested to the fact that corporates remain safe and sound, he added. "Nevertheless, we are keenly aware of the public impact that front-page headlines in the Wall Street Journal can and do have" said Mica. "I am in contact with leaders of the corporate credit union system today, and will be talking to them about continued and clear communication about the issues raised in the article."
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