Maine CUs well-positioned to absorb corporate plan
KENNEBEC, Maine (2/17/09)--Credit unions in Maine are reassuring a local newspaper that they are well-positioned to absorb any hit in capital they'd take under the National Credit Union Administration's currently proposed Corporate Stabilization Program.
Sebasticook Valley FCU, Pittsfield, noted that a higher premium to absorb losses in the corporate system would deplete its capital and it would have to delay some capital improvements. However, Sebasticook President Jim Lemieux and other credit unions told the Kennebec Journal Morning Sentinel (Feb. 15) that they have enough capital on hand to see them through increases in insurance premiums from the program.
Rick Lachance, president of Maine Education CU, based in Augusta, told the publication the industry as a whole is well-positioned to absorb the premiums "if it comes down to that."
Maine Credit Union League John Murphy told the newspaper that the premium is an issue from a budgeting standpoint. Credit unions nationwide currently have the average equity-capital of 11.2%. Assuming additional insurance fees would reduce the industry average to a 10.5% ratio.
Waterville-based New Dimensions CU also assured the newspaper the credit union was prepared. The credit union, which has $46 million in assets, would see its insurance assessment increase by $305,000 under the stabilization plan, according to President Ryan Poulin.
Augusta-based Maine State CU, with $245.1 million in assets, would likely assume $1.7 million more in insurance premiums in the corporate program. Maine State CEO Norman Dubreiul suggested holding corporate credit unions to the same conservative standards that govern natural person credit unions, according to the Journal.
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