Thursday, December 11, 2008

Big corporate CU's in need of bailout

I am quite concerned after reading in WSJ (http://online.wsj.com/article/SB122879485373290759.html?mod=rss_markets_main) that the big corporate CU's are in need of a bailout. I went through Tech CU's latest filings with NCUA (the 5300 report), and noticed that $111M of $169M in Total Net Worth is deposited with the corporate CU's (as cash and other investments)


I feel quite comfortable with Tech CU's 13.11% Net Worth ratio (way higher than the 7% needed to qualify as "Well-capitalized"), but that is tempered from the knowledge that 65% of that ratio is tied up in the toxic CDO's that the corporate CU's had invested in.


Credit unions have so far been considered unaffected by the toxic instruments that have been killing the rest, so this revelation is a shock and a concern.

I think a lot of Tech CU members would feel more assured if Tech CU could put out a statement laying out what's going on vis-a-vis the corporate CU's.

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