WASHINGTON (2/24/09)--Consumer advocate and three-time presidential contender Ralph Nader and Credit Union National Association (CUNA) senior economist Mike Schenk explain how credit unions have avoided the financial crisis caused by banks in an article in Counterpunch (Feb. 23), a political newsletter. The article, written by Nader, begins: "While the reckless giant banks are shattering like an over-heated glacier day by day, the nation's credit unions are a relative island of calm largely apart from the vortex of casino capitalism." Credit unions didn't invest in speculative derivatives or offer people "teaser rates to sign on for a home mortgage they could not afford," Nader said, adding that credit unions are well-capitalized because they do not have an incentive to go for high-risk, highly leveraged speculation to increase stock values. He quotes CUNA's Schenk, who explained credit unions are portfolio lenders, which means they hold on to the portfolios most of the loans they originate. Although the deepening recession means has affected their surplus and deteriorated their asset quality a bit, most credit unions can live with those conditions without suffering dire consequences, Schenk said.. Nader also discusses the difference between natural person credit unions and corporate credit unions and notes that the credit union model can provide "contemporary lessons" such as "being responsive to consumer loan needs and down to earth with their portfolios." He noted little is being written about how credit unions' regulation, philosophy and behavior have largely escaped the current economic catastrophe. To view the article, use the link.