Credit Union Journal | Monday, May 9, 2011 By Ray Birch
LAKE BLUFF, Ill.-In the near future credit unions will need to meet an 11% capital minimum to be considered well-capitalized, which could mean job reductions in excess of 50,000 and the end of the independent share insurance fund, according to one analyst.
But not everyone believes the situation will be so dire, although several analysts have withheld expressing an opinion of their own, and CUNA has indicated some sort of increased capital requirements may be in the offing.
Mike Moebs, CEO and economist of Moebs $ervices, told Credit Union Journal that credit union concerns over the Durbin Amendment are small when compared to a looming issue CUs face over the next two years-a need to produce an additional $5.4 billion in annual earnings overall to be considered well capitalized. Moebs said the best way to accomplish the task, with earnings down due largely to corporate assessments, is to cut expenses, including jobs.
Moebs asserted that an 11% capital requirement will be placed on credit unions and makes the bold prediction that the National Credit Union Share Insurance Fund will be rolled into the FDIC.