Credit Union Journal Daily Briefing | Tuesday, June 22, 2010
ALEXANDRIA, Va. – Hundreds of credit unions are expected to be driven into the red and dozens will be forced into a net worth restoration plan as a result of the $1 billion corporate credit union stabilization charge assessed by NCUA last week.
“Some of our credit unions are getting beaten up,” said Cliff Rosenthal, head of the National Federation of Community Development CUs, of the member credit unions that are already teetering on the verge of undercapitalization.
According to NCUA, which approved the charge to repay coats accrued by its Corporate CU Stabilization Fund, the charge will push 1,062 credit unions into the red for the second quarter, and force 552 credit unions with positive net income for the first quarter into the red for the year.
At least 63 credit unions will be pushed under the 7% net worth mark, subjecting them to oversight by NCUA and 27 credit unions may be forced under 6%, forcing them to provide a net worth restoration plan to NCUA.
Credit unions big and small will feel the pinch