U.S. Government Places Wall Street on Hook for $50 Billion in Corporate CU Losses
February 1, 2011
March 24, 2011
Clearly placing the nation’s financial crisis in the laps of Wall Street bankers, The National Credit Union Administration (NCUA) is threatening to sue several investment banks for their role in packaging bonds backed by poor quality mortgage securities.
The NCUA says that some of the country’s largest investment bankers need to refund more than $50 billion of mortgage-backed securities that were carried on the books of five corporate credit unions. Corporate credit unions do not serve individuals, but act as investment and service institutions for America’s member-owned credit unions.
“The financial crisis was not the fault of credit unions. As not-for-profit, consumer focused organizations, and the smallest segment of the sovereign financial system of the U.S. that is now paying billions or dollars to repair itself, the Justice Department is rightly standing up for not only all credit union members but the American consumer at large,” said Northwest Credit Union Association (NWCUA) CEO John Annaloro.
Northwest credit unions have remained strong despite the financial crisis that gripped the nation in late 2008. The move by the NCUA, however, illustrates again that the federal government is determined to hold Wall Street accountable for its unethical conduct by reimbursing the credit union community.
Oregon and Washington credit unions, like credit unions across the country, have weathered the financial crisis without any taxpayer bailout. Credit unions continue to rebuild their insurance fund out of their own resources.
Credit unions across the country may be able to recoup some of the dollars they have needed to pay to rebuild the insurance fund if the government actions are successful.
“This Government action emphasizes that Wall Street is responsible for much of the nation’s financial problems,” said NWCUA President Troy Stang. “Because credit unions continue to be healthy, sound financial institutions that continue to serve their members, it is becoming increasingly clear that credit unions continue to be a big part of the solution across the country, but especially in the Northwest.