Only a six billion dollar bailout here, chump change compared to other bailouts.-Lou
Economic heat encroaching, credit unions seek U.S. help
Through much of the ongoing financial crisis, credit unions have sidestepped the turmoil swamping the banking industry by sticking to their knitting of making mortgage, auto, consumer and some business loans at good rates to members.
Credit union trade groups like to call the industry a “movement” rather than a business. They can't raise funds selling stock. They grow capital by keeping the earnings from the loans they make. They're loath to take on too much risk.
“They're set up as cooperatives, so they don't have the pressure from shareholders for returns like you might have with a bank,” said David Ely, a banking professor at San Diego State University. “There is a mission to serve their members and do right by them in setting loan rates and deposit rates.”
But as the recession has deepened and layoffs have mounted, even conservative credit unions have been unable to emerge unscathed.
Amid stiff economic head winds from the housing collapse and mounting job losses that have buffeted financial institutions nationwide, only three of the 11 largest credit unions in San Diego County – Mission Federal, Pacific Marine and San Diego County Credit Union – made money in 2008.
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