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News Now

Washington
Policymakers must know CUs remain strong says Mica
WASHINGTON (1/23/08)--Credit union loan quality will continue to feel the strain from the turmoil in today’s economy but remains strong by historical standards, Credit Union National Association (CUNA) President/CEO Dan Mica noted following yesterday’s market activity. “Yes, we will probably see a rise in delinquencies and charge-offs, but nothing like other sectors are experiencing,” said Mica. “It’s important for policy makers, the media and others to view our situation in its proper perspective.” Mica noted, for example, that the credit union delinquency rate remains under 1% and the net charge-off rate is still less than half a percent. First-mortgage charge-offs at CUs in the third quarter were almost zero (0.02%). While these levels are expected to rise later this year and will eat into credit union net income, Mica sees the credit quality issues are manageable, especially given credit unions’ high levels of capital. “In the mortgage market, we’ve said that credit unions are part of the solution, not the problem, and that continues to be the case,” he added. Mica agreed yesterday’s 75 basis-point rate cut by the Federal Reserve would likely help mitigate the effects of the slowing economy (see related story).


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