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	NAFCU's Fred Becker provided a live video update for XCEL FCU's annual board session Friday from his NAFCU office. Becker discussed issues and answered questionson several issues, including market developments affecting credit unions. Member credit unions interested in receiving a live video presentation should send an email to emiller@nafcu.org. – NAFCU photo

June 25, 2012 – NAFCU President and CEO Fred Becker emphasized the need for credit unions to keep an eye on market pressures, particularly in light of Moody's downgrade of 15 of the world's largest banks, during a live video presentation Friday for an XCEL FCU planning session.

Moody's released the ratings downgrades Thursday, and they affect five of the six largest banks in the U.S. Reuters reported that the ratings "gave a competitive advantage to ‘safe-haven' banks that fund themselves with stable, low-cost customer deposits, while worsening the outlook for weaker banks that rely more on capital markets for their funding."

Becker said that illustrates well the continued opportunity for credit unions to increase their market share. He said credit unions may see a sharp influx of deposits in future weeks and months as consumers move funds in a "flight to safety."

Ina letter earlier this month to NCUA Chairman Debbie Matz, Becker touched on the significant fiscal and economic pressures faced by the European Union and individual member states. He also noted widespread reports that Moody's would soon downgrade the credit ratings of some large U.S. banks (which it did).

Large deposit inflows could inflate credit unions' assets and cause a shock decline in net worth, the NAFCU president said. "We strongly urge the NCUA to ask its examiners to discount and disregard a decrease in a credit union's net worth that is solely due to an influx of liquidity as it pertains to recent global economic events," Becker wrote.

Separately, Becker urged the NCUA Board to keep the federal credit union loan-rate ceiling at 18 percent beyond the current expiration date of Sept. 10. Without agency action by then, the cap will fall to the statutory cap of 15 percent.