State credit union exec explains La.’s situation

Dear Editor:

In response to the daily news reports about the trying economy, one positive remains steady – Louisiana’s credit unions.

Each year, credit unions are rated on their overall financial condition. This rating is based on financial statements of the credit union and on-site examination by regulators.

Based on key financial indicators relating to capital, asset quality and earnings, the overall financial condition of credit unions in Louisiana remains extremely sound.

In fact, 72 percent of all credit unions in Louisiana were rated in the highest two categories based on the safety and soundness of their financial institutions in 2007.

Ninety-two percent of all credit unions ranked in the top three categories.

According to the findings of the CAMEL (Capital adequacy, Asset quality, Management, Earnings and Liquidity) ratings, management is experienced, capable and operated under extremely adverse conditions following Hurricanes Katrina and Rita in 2005.

All Louisiana credit unions are covered by the National Credit Union Share Insurance Fund (NCUSIF), which is managed by the National Credit Union Administration, an agency of the federal government.

As a federal deposit insurance fund, the NCUSIF is backed by the full faith and credit of the U.S. government.

The NCUSIF is the only deposit insurance fund that operates on a pay-as-you-go system, which prevents the accumulation of annual losses.

Credit unions are not-for-profit. After expenses are paid and reserves are set aside, surplus earnings are returned to members in the forms of higher dividends, lower loan rates and free or low-cost services.

It is important for Louisiana residents and business people to know that their savings and investments are safe and growing.

While other financial institutions are pushing through an up and down economy, credit unions remain strong, offering good rates on savings accounts and low rates on loans.

In these uncertain economic times, individuals and businesses are looking for a safe, sound place to put their hard-earned money. The credit union is just that place.

Anne Cochran, CLE

Louisiana Credit Union League president/CEO