Credit Unions to feel the pinch?

One local credit union facing multi-million dollar losses


While the current credit crunch and recession has focused on major for-profit financial institutions, there is another group getting pinched - credit unions.

Recently Time magazine reported on the problems being encountered by these member-owned financial institutions. As reported in their story:

Starting in January, the National Credit Union Administration (NCUA) will tap a $41.5 billion pot of money approved by Congress in September to feed liquidity into corporate credit unions faced with mounting losses on securities tied to home loans and other lending.

Elk Grove New has learned that one of the top five credit unions in the Sacramento region will report losses approaching $20 million this year from defaulting loans. A source at the credit union told EGN that the defaulting loans were not home mortgages, but primarily auto loans.