The first quarter of 2009 has presented many challenges directly related to the deepening national recession and uncertainty at home with our domestic automobile industry. Nearly every facet of the economy has been hurt by the downturn. Unfortunately, the credit union industry has not been immune to these external pressures.

Much of the latest economic news has focused on government bailouts and the infusion of capital to keep the for-profit banking, investment and insurance sector afloat. We are proud to say the credit union industry has never received money from the government for a bailout. Through responsible lending practices, credit unions have fared well and remain in a great position to lend, serve our members and our community.

At FinancialEdge Community Credit Union we want to assure our members that the credit union is on solid financial ground. Our capital ratio ended the month of February 2009 at the very well capitalized level of 11.35% and we expect to maintain a level above 10% for the remainder of 2009. Having a strong capital base provides your credit union a financial cushion in this tough economic time.  FinancialEdge will continue to responsibly underwrite loans just as we have in the past as evidenced by our delinquency and charge off ratios of .54% and .38% respectively. Both of these ratios are well below our national peer average.

You may have heard recently that the National Credit Union Administration (NCUA), the federal regulatory agency which oversees the nation’s 8,000 plus credit unions, was forced to help stabilize U.S. Central and Western Corporate Credit Unions by placing them into conservatorship. Corporate credit unions are like credit unions for credit unions, similar to Federal Reserve Banks, they are not open to the public. The money used to pay for this stabilization didn’t come from taxpayers, but instead is being paid by natural person credit unions like FinancialEdge from across the country through a special assessment which is expected to be levied on credit unions in September. For our credit union, this is approximately $475,000 as of March 23, 2009.

This unexpected assessment, which has no relation to the safety and soundness of our credit union, is required due to the cooperative manner in which credit union deposits are insured. Credit unions pay into the National Credit  Union Share Insurance Fund (NCUSIF) to insure its member’s deposits up to $250,000, just like the FDIC does for bank deposits. However, similar to other Michigan credit unions, FinancialEdge has a strong capital reserve. Even though this special assessment is expected to create additional pressure on the credit union’s bottom-line this year, as a member of FinancialEdge, you will continue to get the great rates you have come to expect on mortgage loans, auto loans, CD’s and High Yield Savings Accounts. You can also count on great member service and low fees.

Michigan credit unions have shown tremendous resiliency during this tough economic time. Mortgage and auto loans have shown extraordinary growth in the fourth quarter of 2008 and the first quarter of 2009. Rest assured that FinancialEdge Community Credit Union will be there for your financial and lending needs. Your money is safe and secure. If you have any questions, please don’t hesitate to get in touch with us at (989) 892-6088, or by email at info@financialedgeccu.org.