As was reported in the Wall Street Journal, Friday, March 20, 2009, The National Credit Union Administration announced late Friday that is has placed U.S. Central Federal Credit Union, Lenexa, Kansas, and Western Corporate (WesCorp) Federal Credit Union, San Dimas, California, into conservatorship to stabilize the corporate credit union system and resolve balance sheet issues.

Service continues uninterrupted at both U.S. Central Corporate Federal Credit Union and WesCorp, and members are free to make deposits and access funds. The member accounts of both credit unions are guaranteed under provisions of the previously announced NCUA Share Guarantee Program, through December 31, 2010. The Program extends NCUSIF coverage to all funds held by the two corporate credit unions.

These two credit unions (U.S. Central Federal Credit Union, Lenexa, KS and WesCorp Federal Credit Union, San Dimas, CA) are not regular credit unions like ours that serve consumers. There are a small number (28) of wholesale institutions that do not serve consumers; they provide liquidity, investment and payments services to credit unions like ours. It was two of these “corporate” credit unions that were placed into conservatorship, which means they are still operating normally but the U.S. government has taken them over. Despite this development, no credit union, corporate or natural person (such as ours) has taken any TARP funds from the bail out program and there are no plans for that to change.

What does all this mean for members of our credit union?   It’s business as usual.  The same level of quality service you receive from our credit union will continue.  Our service to you is not affected by these government actions. In fact the credit union sector overall is solid and healthy. The industry’s federal regulator, Michael Fryzel, said as much on Friday when addressing the corporate situation: "Credit unions that serve consumers remain very strong." Similarly, Congressman Barney Frank, the chairman of the House Financial Services Committee, said recently that "If credit unions made all of the mortgage loans, then there would have been no subprime crisis, and therefore no economic crisis." And just a week ago, the Wall Street Journal published a big feature pointing out that while some of these "corporate" credit unions have had problems, in today’s economy regular credit unions like ours that serve consumers continue to be a safe haven and offer great value.

As a member of SunState Federal Credit Union, you can rest assured we have been operating conservatively and with the credit union’s long-term best interests at heart. Our reserves stand well in excess of 10%, which positions us as one of the better capitalized financial institutions in the country. SunState Federal Credit Union has been serving members, through good times and bad, since 1957; we are here to stay.