As a CEO, your article: "Losses Mount At NCUSIF" (CU Journal, Sept. 22) is disturbing and disconcerting. Quarterly, the NCUA receives 5300 data. The lights are on but is anyone home at the NCUA?
Looking at the four recent failures in California (CalState 9, Sterlent, Kaiperm and Valley CU) there is no surprise to their demise. The history of 5300 quarterly data from these credit unions should have been a red flag at the NCUA. Today there is a $4-billion NCUSIF insured CA credit union with over 18.0% in classified assets and over $45 million in losses (December 2007 through June 2008).
NCUA continues to be reactive to the plight of these poorly performing credit unions instead of being proactive. The result: the NCUSIF is at risk.
Healthy credit unions will again get stuck with the bill when we receive our next invoice to supplement the NCUSIF fund.
The cozy relationship of regulator and insurer being one in the same is not working. And the NCUA examination focus today is a different red flag-you have got to be kidding. 37.0% of the California credit unions are reporting negative income (as of June 2008). NCUA must get its priorities in order before the NCUSIF goes bankrupt. Seems like the NCUA is rearranging deck chairs on the Titantic.
CEO, Glendale Area Schools FCU
LETTERS TO THE EDITOR
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