Credit Unions

[muldoon]

Not sure if anyone is interested in this kinda stuff anymore, but this is gonna leave a mark. 

*S&P PUTS ALL US CORPORATE CREDIT UNION RTGS ON WATCH NEGATIVE
*MEMBERS UNITED CORPORATE FED CREDIT UNION STILL MAY BE CUT: S&P
*WESTERN CORPORATE FEDERAL CREDIT UNION MAY BE CUT BY S&P
*U.S. CENTRAL FEDERAL CREDIT UNION MAY BE CUT BY S&P :
*SOUTHWEST CORPORATE FEDERAL CREDIT UNION MAY BE CUT BY S&P
*SOUTHEAST CORPORATE FEDERAL CREDIT UNION MAY BE CUT BY S&P
*EASTERN CORPORATE FEDERAL CREDIT UNION MAY BE CUT BY S&P :1
*CORPORATE ONE FEDERAL CREDIT UNION MAY BE CUT BY S&P :1016Z
*CORPORATE CENTRAL CREDIT UNION MAY BE CUT BY S&P :1016Z US
*CONSTITUTION CORPORATE FEDERAL CREDIT UNION MAY BE CUT BY S&P
*CENTRAL CORPORATE CREDIT UNION MAY BE CUT BY S&P :1016Z US
*10 COUNTERPARTY CREDITS ON CREDIT UNIONS MAY BE CUT BY S&P

- These are the credit unions credit union, the source of funding for credit unions.  (Much like the federal reserve banks are the banks banks, this is the credit unions banks.  By downgrading *ALL* of them, it will squeeze their ability to get credit and make debt rollover difficult.  Credit Unions just got very unsafe.  Keep in mind that credit unions are NOT covered under FDIC, they are covered under NCUA, a different program.  The NCUA is self funded by credit unions paying premiums into the insurance fund. 

What is a corporate credit union?  http://en.wikipedia.org/wiki/Corporate_credit_union

A Corporate credit union, also known as a "central credit union", provides services to natural person (consumer) credit unions. In the credit union industry, they are sometimes referred to as "the credit union's credit union". Corporate credit unions may either be chartered by the National Credit Union Administration (NCUA), or under state authority if permitted under that state's financial services laws.

Corporate credit unions are owned by the credit unions that choose to do business with them and provide short term (Fed Funds) and long term investments (in government approved instruments). Corporate credit unions also provide financial settlement services through the clearing of payments (check clearing), ACH (Automated Clearing House), electronic funds transfers (EFT) and ATM transaction services and networks.


By Brad Skillman
Feb. 10 (Bloomberg) -- Counterparty-credit ratings for 10
corporate credit unions may be reduced by Standard & Poor's
Ratings Services.
Nine of the changes to "creditwatch with negative
implications" were made today, S&P said. Members United
Corporate Fed Credit Union has been listed as creditwatch
negative since Sept. 30,
''This action reflects our concern over some recent public
opposition within the industry to measures taken in support of
corporate credit unions,'' Standard & Poor's credit analyst
Robert B. Hoban Jr. said in a statement.

[glenn kangiser]

Please keep posting this stuff, muldoon.  Our bank just went down and a credit union was one of the two other options in our town. 

They were bought out by Westamerica bank finally - I haven't researched it but have had no money access problems...yet.

[Mike 870]

This is interesting news.  I have always been a huge fan of credit unions because they are non profit and act in the interest of their depositors.  They don't pay expensive executives big bonuses and are generally run by a board of directors.  They are also usually community based and tend to be more of a tight knit organization.

[peternap]

Good Post Muldoon!

I saw that and along with the plethora of other really disturbing economic news that had come out in the last 7 days, I've decided to go fishing.

The bailout program reminds me of the time some Mexican landscape workers found some eggs in a hole in the ground. They were talking to each other and I understand enough Spanish to know they thought whatever bird hatched, would be good to eat.

When they saw me and decided they better give them to me since they were on my payroll.

I knew they had to be snake eggs and told them that they were quite welcome to keep them. In fact, take them home and put them under a warm light.

[muldoon]

The two top credit union clearing houses were seized by the government on Friday.   These 2 institutions handle nearly 100% of all transactions for every corporate credit union in the US and 93% of all credit unions total in the US. 

http://www.reuters.com/article/companyNewsAndPR/idUSN2052552120090321?pageNumber=2&virtualBrandChannel=0

Remember that credit unions are NOT FDIC insured.   Understand your potential exposure to risk. 

Aside from that, how come they cant just seize AIG? 

[ScottA]

AIG is actualy a credit union or least thats how they're regulated. I bet that has something to do with this downgrade.