Berger to WSJ: CUs are safe, sound
NAFCU President and CEO Dan Berger responded to a Wall Street Journal article mischaracterizing credit union risk with a letter detailing the industry’s successful handling of risk and the financial crisis.
“The June 6 article ‘Credit Unions Ramp Up Risk’ unfortunately, and inaccurately, casts a negative light on America’s credit unions,” Berger wrote in a letter to the editor submitted Friday. “Credit unions are safe and sound institutions and have successfully weathered the recent financial crisis because of their prudent business model, and they have been widely lauded for it. An integral part of that business model is managing interest rate risk and strict adherence to regulatory requirements.
“As not-for-profit, member-owned financial institutions, credit unions perhaps are even more acutely aware of the importance of risk management than other financial institutions,” he continued. “Any claims to the contrary are simply untrue.”
NCUA Board Chairman Debbie Matz was quoted in the Journal saying she was concerned that credit unions were “choosing not to do anything about” rising interest rates and risk. Berger responded that NCUA should “focus on giving credit unions additional tools and resources, such as increased investment authority, to manage their interest rate risk” instead of focusing on the proposed risk-based capital rule, which NAFCU opposes as unnecessary and burdensome for the industry.continue reading »