Credit Union Journal | Wednesday, May 6, 2009
WASHINGTON – CUNA reported yesterday that the declining stock markets pushed it into the red to the tune of $8 million for 2008, up from a $5.2 million loss for 2007.
The 2008 losses do not include any charges on $1 million worth of membership capital shares CUNA holds in U.S. Central FCU, which NCUA has directed corporate members of U.S. Central to mark down by 63%. CUNA avoided the mark down by re-characterizing its U.S. Central holdings from a current asset to a long-term asset.
CUNA controlled two seats on the U.S. Central board, which was removed by NCUA after the $34 billion was taken under conservatorship on March 20.
While CUNA reported an $866,806 operating margin for 2008, market value losses of $8 million on CUNA’s investments and investments in its pension plan erased the margin and largely created the $8 million net loss for the year.
The 2008 loss also include a $926,390 expense for CUNA’s Stracomm 110 project, the "Little Guy" marketing campaign aimed at Capitol Hill.
The two years of losses eliminated 83% of CUNA’s unrestricted net assets (reserves) over the past two years, reducing reserves from $15.8 million at the start of 2007 to just $2.7 million at the end of 2008.