Puerto Rico CUs, Coops to remain strong in face of bankruptcy
With the recent bankruptcy filing in Puerto Rico, economic concerns are a top priority for the island, but its Cooperative system should remain intact and should continue to support credit unions, which are insured by the NCUA..
In a post-bankruptcy statement by the Association of Cooperative Chief Executive Officers of Puerto Rico, it was made clear that this segment remains strong because it had been preparing for just such a scenario. Puerto Rico has more than 100 cooperativas insured by the territory’s Corporation for the Supervision and Insurance of Cooperatives. The association pledged its support for any cooperativas that face severe economic problems as a result of the bankruptcy filing.
“Even if individual credit unions face major complications, our commitment as a sector is to maintain solidarity and ensure the protection of the assets of all cooperative members,” the association said, in a statement. “We will be there for everyone, as the cooperative values demand.”
According to an article in Credit Union Times, “Last year, then-Governor Alejandro Garcia Padilla warned that the credit union system could collapse because of the financial crisis that faced the island.”
The island-insured credit unions are heavily invested in government bonds issued by Puerto Rico. Last year, an attorney representing 25 cooperativas said that government officials had coerced the financial institutions into investing in government bonds.Read the full article at CU Times.