NM House votes to move state money to Credit Unions,

[dbackjon]

New Mexico's House of Representatives voted Monday to pass a bill that allows the state to move $2 billion - $5 billion of state funds to credit unions and small banks.

The municipal funds bill was approved 65-0 (roll call - PDF), and is subject to a vote by New Mexico's Senate. Governor Bill Richardson told the bill's sponsor that he supports the legislation.

Credit Union Times, spoke to one banker who believes that the bill got a boost from Huffington Post's Move Your Money campaign:

The altered view of New Mexico lawmakers in favoring local control of state funds, officials said, follows national mention of the New Mexico effort in the "Move Your Money" campaign of New York pundit Arianna Huffington in her online Huffington Post columns.

"I think Huffington gave this bill a little traction," said Juan Fernandez, vice president of government affairs for the Credit Union Association of New Mexico


http://www.huffingtonpost.com/2010/02/0 ... 56043.html

[AZGrizFan]

This seems great on the surface, but here's the problem: Credit unions have not been immune to the problems facing the financial services industry over the past 2 years. Capital ratios have declined dramatically as loan delinquencies and charge-offs have skyrocketed in conjunction with record unemployment and our significant recession. I'm not sure how badly New Mexico credit unions were hurt, but if it's even remotely like those of us in Arizona, I'd (figuratively) run, as fast as I could, from any money the state wanted to deposit in my organization. In fact, our strategic plan over the next 12 months is to SHRINK $40,000,000. This is in an effort to bolster our capital ratio and attempt to stave off a forced merger by the NCUA. There are many, many credit unions across the Southwest that are in our same boat, and a huge influx of cash at this particular point could/would be disasterous. Credit unions haven't had the luxury of having access to TARP funds, so we haven't been able to prop up our capital positions during this banking crisis. We also have NO mechanism for raising secondary capital (stock offerings)....basically, we're screwed. The ONLY way we can build capital is through net earnings. The credit union I run hasn't turned a monthly profit for 27 consecutive months. Our capital ratio has gone from 17.7% to the current 5.67%. We expect it to bottom out at 4% before things turn around. So, like I said, if the State of Arizona came to us and said "hey, we'd like to keep the money local---here's $50,000,000", I'd tell them to go pound sand (in a professional way, of course).

On a positive note, however, through this entire banking debacle, not a SINGLE DOLLAR of taxpayer funds was used to prop up a credit union in America. Not one. Zip. Nada. Zilch.

[Appaholic]

On a positive note, however, through this entire banking debacle, not a SINGLE DOLLAR of taxpayer funds was used to prop up a credit union in America. Not one. Zip. Nada. Zilch.

And yet one more reason I do all banking spread between 3 credit unions....

[AZGrizFan]

On a positive note, however, through this entire banking debacle, not a SINGLE DOLLAR of taxpayer funds was used to prop up a credit union in America. Not one. Zip. Nada. Zilch.

And yet one more reason I do all banking spread between 3 credit unions....

Another positive note: Not a single dollar of credit union members' insured funds has been lost....even with the credit unions that have folded or been absorbed by other, healthier credit unions. Banks can not make the same claim.

[AZGrizFan]

On a positive note, however, through this entire banking debacle, not a SINGLE DOLLAR of taxpayer funds was used to prop up a credit union in America. Not one. Zip. Nada. Zilch.

And yet one more reason I do all banking spread between 3 credit unions....

Fuck. No sooner do i make that statement than I find THIS:


http://www.cutimes.com/News/2010/2/Page ... e-CUs.aspx

The NCUA Board has approved changes to the agency's regulations to allow eligible credit unions to use capital they might access from the Troubled Asset Relief Program.

The Obama Administration has authorized credit unions that have been recognized as community development financial institutions by the U.S. Treasury Department's CDFI Fund to apply for up to 3.5% of their total assets in capital from TARP funds. The NCUA's rule change paves the way for federally insured credit unions to participate in the program.

Granted, this is only available for CDFI's, which have an inherent inability to generate capital because of their low income status, but still...it goes against the grain and cooperative spirit of the credit union movement.