Title : CUNA's Alternative Reality
CUNA's Alternative Reality
Once again, the Credit Union National Association (CUNA) has removed all doubt that it lives in a different reality from the rest of us.In CUNA's July 12 testimony before the House Financial Service Committee, Jim Nussle, president and CEO of CUNA, stated that during the financial crisis the National Credit Union Share Insurance Fund (NCUSIF) remained well funded -- as the NCUSIF fund ratio was above 1.20 percent of insured deposits over that time period.
However, CUNA is not allowed to rewrite history about what happened during the financial crisis.
CUNA's testimony neglected to mention that the NCUSIF was bailed out by Congress in 2009 with the creation of the Temporary Corporate Credit Union Stabilization Fund (Stabilization Fund). This shifted the cost of the corporate credit union debacle from the NCUSIF to the Stabilization Fund.
Without the creation of the Stabilization Fund, the NCUSIF ratio was going to drop to 0.31 percent for 2009 with the failures of two corporate credit unions, WesCorp and U.S. Central.
Moreover, the NCUSIF ratio would have fallen further, maybe going into the red, because three other corporate credit unions failed.
CUNA also conveniently forgot to mention that the Stabilization Fund borrowed billions of dollars from the U.S. Treasury to help resolve these five failed corporate credit unions. In fact, the Stabilization Fund still has $1 billion in borrowings outstanding.
So, the reality is that the NCUSIF was bailed out during the financial crisis and the industry tapped the Treasury to help resolve the corporate credit union debacle.
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