I’ve been watching with great interest the $700 billion dollar US Treasury bail-out of our financial system. This is a really tough issue, a classic damned if you do, damned if you don’t.

There was a great article in the CU Journal this morning: Toxic Mortgages, Like Inhaling Second Hand Smoke.

Here are arguments for and against credit unions being included in the government bail-out:

Bucky Sebastian (president of GTE FCU) “You never smoked a day in your life, but you end up with lung cancer from the second hand smoke. Well, we didn’t do any of these things, but we are inhaling second hand smoke.”

Craig Israel, president of First South goes on to say..”I understand that some credit unions and corporates may need some help, but if credit unions are listed as one of the target entities that asked for assistance, I’m not sure that plays well with the laymen. Right now people don’t associate us with this mess, and we’re seeing an in-flow of deposits because people see us as a safehaven.”

Larry Tobin, president of Fairwinds CU in Orlando, Florida says: The alternatives of not doing the bailout plan are far worse than doing the plan,” (they took a $6.5 million mid-year loss). “It allows us to move on.”

and

William DeMare, Bay Gulf CU in Tampa, Florida, “The quicker we can see the increase in liquidity, the quicker the downturn will start to level off and turnaround.”

What do you think? Should credit unions be on this list?

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