LARGEST ETHNIC CREDIT UNION OBJECTS TO BAILOUT
FOR CORPORATE CREDIT UNIONS
Joining the ever-growing chorus of protest by retail credit unions – those made up by millions of Americans who join through their workplace or community – against the National Credit Union Administration’s plan to provide a nearly $5 billion bailout to troubled corporate credit unions, the nation’s largest ethnic credit union today voiced its disapproval of the federal handout.
“Those corporate credit unions have failed on their own, and now they’re passing the buck, literally, to have healthy, successful credit unions pick up the tab,” said Mr. Bogdan Chmielewski of the Polish & Slavic Federal Credit Union. “Why should a strong and well-funded ‘natural person’ credit union like ours, and all the members who are bona fide owners of retail credit unions, be forced to pay for the mistakes that brought down these corporate institutions?”
The Brooklyn-based PSFCU, with nearly 70,000 members and $1.2 billion in assets, has joined similar organizations in supporting
the demand that the NCUA take control of the corporate credit union system to avoid further damage to the cooperative insurance fund that all credit unions pay into. Other large credit unions also expressed their strong objections, and like PSFCU urged the NCUA to permanently remove and isolate the corporate credit unions from the National Credit Union Share Insurance Fund (NCUSIF) and create a separate insurance fund. The agency’s plan to rescue corporate credit unions would in large part be paid for by levying a 56 basis point premium on all credit unions for their payment into the NCUSIF.
“This bailout will actually hurt us, as our insurance premiums to
the NCUSIF will increase approximately $7.5 million just to prop up these failing institutions. Although we remain financially sound and have adequate reserve funds, this is going to negatively impact our bottom line. How is this fair to an organization that has been diligent in avoiding the mistakes that we are all supposed to pay for?” said Chmielewski.
The NCUA will be providing at least $1 billion of the $4.7 billion bailout to U.S. Central following its reported $1.1 billion lost last year.
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