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CU System
Fed legislation wont boost ATM purchases
CHICAGO and NEW YORK (5/29/09)--The recent federal legislation allowing the National Credit Union Administration (NCUA) and the Federal Deposit Insurance Corp. (FDIC) to borrow funds from the U.S. Treasury to help stabilize the system won't likely boost ATM purchases by credit unions and banks, say several ATM companies. One analyst, Gil Luria of Wedbush Morgan Securities, had suggested that the threat of huge assessments to boost the insurance funds had been a key factor that prevented credit unions and regional and community banks from buying ATMs (ATM&Debit News May 21). The legislation gives NCUA the authority to borrow $6 billion, up from $100 million originally authorized, and provides emergency borrowing authority for up to $30 billion. Because credit unions and banks were facing huge assessments, they essentially froze their budgets, said Luria. However, ATM manufacturers such as Diebold Inc. and NCR Corp. said they expect the economy to reduce sales significantly this year. They and several banks did not agree that the law would free up financial institutions' capital to buy ATMs. One banker noted reduced earnings can affect plans for equipment expansion, but another said he didn't believe that special assessments could be categorically linked to decisions not to buy ATMs. Instead, the assessments will cause financial institutions to prioritize their capital expenditures.
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