The Idiocy of Washington, Part III:

[AZGrizFan]

http://www.ncua.gov/CoporateStabilizati ... rategy.pdf

This is our (credit unions) version of "genius". Our regulatory agency, an a misguided attempt to "save" the corporate credit union world, is going to require a capital infusion from......wait for it........OTHER CREDIT UNIONS!!! Banks stand at the government trough, gleefully pocketing their portion of the $700 Billion, money for which credit unions are not eligible. So, the governments answer is to get the money from other credit unions!!!

Here's a quote from the document regarding estimated cost to each credit union:

The expense of the actions will be passed on proportionately to all federally-insured credit unions through a partial write-off of your existing 1 percent NCUSIF deposit, as well as the assessment of a premium, sufficient to return the NCUSIF’s equity ratio to 1.30 percent. The projected average cost for credit unions for the share guarantee is an approximate 48 basis point decline in annual return on assets and a 43 basis point decline in the net worth ratio. The impact on credit unions for the capital infusion to U.S. Central will be an average additional decline in the return on assets of 14 basis points and 13 basis points of net worth. The combination of both actions results in the average credit union absorbing a total 62 basis point decline in the return on assets and a total 56 basis point reduction in the net worth ratio. Correct regulatory reporting of this action will be included in the supplemental March 31, 2009 Call Report instructions.

Let me translate: For MY credit union, 62 basis points equates to STARTING OUT THE YEAR APPROXIMATELY $2.6 MILLION in the hole. And our Capital ratio will drop from 10.38% to 9.82%. There are many, many credit unions that will be unable to absorb this latest blow to our financial stability. This is getting fcuking crazy, and the dichotomy between the way credit unions and banks are being treated is absolutely disgusting.

They got the gold mine. We got the shaft. Plain and simple.

[ASUMountaineer]

Absolutely the CUs got the shaft. But, they're just going to argue that you guys are not-for-profit, whereas the banks pay taxes.

[AZGrizFan]

Absolutely the CUs got the shaft. But, they're just going to argue that you guys are not-for-profit, whereas the banks pay taxes.

Do they not understand that that money comes from the 90 million CU members that DO pay taxes?

[ASUMountaineer]

Absolutely the CUs got the shaft. But, they're just going to argue that you guys are not-for-profit, whereas the banks pay taxes.

Do they not understand that that money comes from the 90 million CU members that DO pay taxes?

It's Washington. They look at who butters their biggest pieces of toast. Big corporations donate to BOTH parties. This is not a Republican or Democrat thing. It's a big government ideology thing. These idiots in Washington want to keep getting elected and big money (and influence) comes from the banks as opposed to the mostly middle class CU members who pay income taxes. They have name recognition now, so they know they have a good shot at getting those same members to vote for them regardless.

[BigApp]

the gubmint can't buy stock in credit unions, can it?

[AZGrizFan]

the gubmint can't buy stock in credit unions, can it?

There IS no stock. We're member owned cooperatives.

[BigApp]

and there's you're answer! I'm actually HAPPY for you that you didn't take their printed money. You'll be better off for it in the long run.

They can't buy your stock, so they can't tell you what to do (or how much to pay you--you rich b@stard!)