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News Now

Washington
Mica clarifies corporate CUs position
WASHINGTON (12/11/08)—Credit Union National Association (CUNA) President/CEO Dan Mica appeared on Fox Business News Wednesday to help clear up any confusion associated with a federal regulators’ initiative to add liquidity to the corporate credit union system. On Tuesday, National Credit Union Administration (NCUA) Chairman Michael Fryzel unveiled his proposal to create the Credit Union System Investment Program (CU SIP) to strengthen corporate credit union liquidity. CUNA’s Mica made it clear that the NCUA plan is not a credit union bailout, but rather a “credit union back-up.” The need for such a back-up was, Mica said, in part created by the "unintended consequences" of other recent government action that backed other types of corporate entities that operate in the open securities markets, but not the corporate credit unions. Mica explained to his national television audience that corporate credit unions operationally must be involved in the securities markets, and some of that finance involved mortgage-backed securities. The CUNA leader made it clear that the portfolios of the corporate credit unions are strong, but he added, they, like everyone else, are being hit by declining values. Mica also emphasized that the 8,000 natural person credit unions that serve 90 million consumers have "insured deposit, strong capital, are making loans and are doing very well." The NCUA also on Tuesday performed a national unveiling of its Credit Union Homeowner Affordability Relief Program (CU HARP). Under CU HARP, credit unions could work with their members to temporarily lower monthly mortgage payments.


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