Earlier this year, the Board of the National Credit Union Administration (NCUA) acted to stabilize a part of the credit union system that is under stress due to dislocations in the mortgage market. These actions resulted in all federally insured credit unions being required to write-off a portion of their deposit in the National Credit Union Share Insurance Fund (NCUSIF), write-off their member capital accounts at Western Corporate FCU and assess a premium in order to maintain a robust and strong federal insurance fund for credit union members.

CU Hawaii’s portion of these mandated actions is estimated at $4 million, which was deducted from 2008 net income. It is important to understand that CU Hawaii did not contribute to the conditions that led to these actions; however, all credit unions are working together to resolve these financial challenges without relying upon any government bailout program. Further, your funds in a NCUSIF-insured credit union, like CU Hawaii, remains backed by the full faith and credit of the United States Government, up to at least $250,000.

While the NCUA’s actions impacted our financial performance in 2008, which was an anomaly over our 53 year history, rest assured that your credit union remains safe, sound and financially strong. As of December 31, 2008, CU Hawaii had over $225 million in assets and $21 million in equity.

Although CU Hawaii’s Board and management views this unfortunate event as outside of our control, these actions are expected to maintain, strengthen and stabilize the credit union industry to benefit credit union members. Should you have any questions, please do not hesitate to contact us at (808) 933-6700.