Pennsylvania Credit Union Association

Despite Market Woes, CUs Continue to Thirve

9/18/2008

FOR IMMEDIATE RELEASE

HARRISBURGThis week has been turbulent for financial markets and financial services companies. In the wake of federal bailouts of mortgage giants Fannie Mae and Freddie Mac; banking and securities firm Lehman Brothers; and insurance giant AIG, the good news is that Pennsylvania’s credit unions continue to provide a safe haven for consumers seeking to put their savings or to borrow for personal, student, car, or mortgage loans.

“We understand there is confusion in the financial markets, conflicting news reports, and it is very difficult for consumers to make sense of the turmoil,” said Jim McCormack, Pennsylvania Credit Union Association President/CEO. “Yet at the same time, consumers should know that their local credit union is a safe place for their money and for loans.”

In a non-scientific poll of credit union leaders, virtually all credit unions are reporting increased inflows of consumer deposits, as well as strong demand for consumer loans. Those same credit union leaders reiterated they have not been adversely affected by the problems in the mortgage market and continue to have funds available to make prudent loans to creditworthy borrowers.

Pennsylvania credit unions have not engaged in the risky lending practices like many other players in the financial marketplace,” said Association Chair Diana Roberts, CEO of Hershey Federal Credit Union. “Therefore, we as credit unions have no need to tighten our lending policies since we have always been lending prudently.”

All deposits in Pennsylvania credit unions are federally-insured up to at least $100,000 by the National Credit Union Administration. Deposit insurance coverage for credit unions is the same as FDIC insurance for banks. In addition, Pennsylvania’s credit unions are extremely well capitalized at 11.7 percent, well above the federal regulatory requirement of 7 percent.
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