Thoughts From Your Valuation Source

A recent article in Market Watch said that Credit Unions are not experiencing the fallout from recent mortgage woes and are the safer place to be banking. The article praised the way they do business and said that their practices are helping them be the future of banking.

As much as that thought is comforting, a new reality is emerging. What is not being taken into account is the other types of loans as well. Not all loans being defaulted, and adversely affecting the credit of the borrower, are mortgage loans. This is made evident by an Arizona Credit Union, mentioned in an article yesterday.

In a sign financial problems are spreading to credit unions, Arizona Federal last week reported a sizable first-half loss stemming from delinquent auto, credit-card and home-equity loans.

Ron Westad, the credit union's president and chief executive officer, said the poor numbers reflect financial pressures faced by members, many of whom work for city governments around the state.

"Our members are having trouble carrying their obligations and meeting their commitments," he said. "Our members are in harm's way."

Arizona Federal had tried to delay reporting some of the delinquencies in hopes of helping members avoid demerits on their credit reports, "but we just couldn't do it any longer," Westad said.

Delinquent accounts, they're not just for mortgages anymore.