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Government Bails Out Major Credit Unions

4 years ago
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The federal government will bail out a key part of the credit-union industry still reeling from the mortgage crisis two years ago.

The Wall Street Journal reported Friday that regulators moved to stabilize three "wholesale" credit unions, which don't service the public but deal with thousands of other financial institutions.

The National Credit Union Administration will take over the credit unions and manage $50 billion worth of troubled assets inherited from institutions that went under during the crisis, according to the Journal. To pay for it, the agency will issue up to $35 billion in government-guaranteed bonds.

The institutions seized by the government are: Members United Corporate Federal Credit Union in Warrenville, Ill., Southwest Corporate Federal Credit Union of Plano, Texas, and Constitution Corporate Federal Credit Union, Wallingford, Conn.

Last year the government similarly rescued two of the nation's largest wholesale credit unions after it came to light that their losses were greater than previously reported.

Officials told the newspaper that the bailout announced Friday won't cost taxpayers any money.

Filed Under: Economy
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11 Comments

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erikjupiter

How do " We the People" begin to roll back the salaries of congress? They have not done a very good job, and they are as bad if not worse than any union.

September 25 2010 at 5:31 PM Report abuse +6 rate up rate down Reply
conservgirl8

When you believe what this government does is good for the people, it should send up red flags in everyone. While the media has been feeding us propaganda and fluff articles, our government has been conjuring up all sorts of evil things. Not only are our illustreous lawmakers making fun of us, they are spitting on us.

September 25 2010 at 11:58 AM Report abuse +9 rate up rate down Reply
1 reply to conservgirl8's comment
Tom

Not nearly as badly as the Party of NO will do should we be so unfortunate that they would regain control of congress.

September 25 2010 at 5:28 PM Report abuse -8 rate up rate down Reply
kt3059

So after all the bank bailouts, new banking regulations (minus Fannie/Freddie) and now more credit union bailouts. Who is the offical stating it won't cost the taxpayers any money. Are they kidding. Take a look at the debt clock and tell me where they are getting more bailout money.

September 25 2010 at 10:15 AM Report abuse +11 rate up rate down Reply
osmaramor

Are our own elected officials making fun of us? NO TAX PAYERS MONEY FOR THE UNION BAILOUTS???

September 25 2010 at 10:00 AM Report abuse +12 rate up rate down Reply
barney2022

kind of like the GM bailout...just recently dozens of GM union workers were caught on tape drinking and smoking pot during lunch breaks on several occassions. They were caught by a Michigan news affiliate. The news group even approached the group after days of witnessing this behavior and asked them if this is fair that they do this while on the taxpayer dole. Of course, they just ran. This is the type of abuses that happend with free gifts of money, especially to people who dont deserve them. If a company is failing there is usually a reason they are failing.

September 25 2010 at 9:02 AM Report abuse +12 rate up rate down Reply
tausands

Government bonds have no monetary value until they mature. In other words, they are merely a guarantee of cash if the credit unions cannot be made solvent. So, yes...right now it is costing the taxpayers nothing.

September 25 2010 at 12:44 AM Report abuse -9 rate up rate down Reply
Judy

The Government's money is our money - we the taxpayers - we are the government -the government has no money of its own....what a spin!! Who are these officals...

September 24 2010 at 9:37 PM Report abuse +27 rate up rate down Reply
barney2022

wont cost any money?? ya, and Obamacare is going to lower the deficit

September 24 2010 at 9:34 PM Report abuse +27 rate up rate down Reply
skiman1054

USING MONOPOLY MONEY AGAIN

September 24 2010 at 8:08 PM Report abuse +26 rate up rate down Reply
1 reply to skiman1054's comment
tausands

It says they used Government bonds which are only worth money at maturity, like an insurance policy. If the credit unions are not solvent by the maturation of the bonds, they never will be. It isn't pumping money in, it's adding stability.

September 25 2010 at 10:36 AM Report abuse -5 rate up rate down Reply

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