I have been following this issue at some length. I called-in on CUNA's informational conference call, and I just got back from a meeting where CUNA President Dan Mica was the speaker, and this Corporate issue was the #1, #2 and #3 hot topic.
For our credit union, we will be fine, and we can handle this hit (assuming it is a one-time hit). Our projected "hit" (based on 2008 financials) is 70 basis points to return on assets and 61 basis points to net capital to assets. The way I do the math, I suspect that most CDCU (being smaller) will have a much higher ratio of insured shares to total shares than the NCUA average of 77% Our ratio is about 99% of insured share to total shares.
I think just as important (perhaps more important) to CDCUs is the availability and cost of services of Corporate credit unions. These may include lines of credit, share draft processing, investments, electronic transfers, and so on. I believe, for example, that almost all of the services we use from our corporate (VACORP) would either not be available, or would cost a lot more from other providers. Just one example - we have a $100,000 line of credit that we only pay for (at a low interest rate) when we use it would cost a lot more. By having that line of credit, we are able to get a much higher return on investments. If we did not have the line, we would have to keep the $100,000 in overnight investments. The list goes on.
Treasurer, Queen of Peace Arlington FCU
P.O. Box 4509
Arlington VA 22204-0509