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Tsunami didnt damage CUs Economy insurance hit
MADISON, Wis. (3/15/11)--Friday's catastrophic earthquake and tsunami in Japan and the resulting tsunami waves that hit Hawaii and the U.S. West Coast did not directly affect credit unions, according to CUNA Mutual Group and the World Council of Credit Unions (WOCCU). Japan has few credit unions. WOCCU said it does not have an affiliated organization in Japan. The Association of Asian Confederation of Credit Unions--which serves a number of Asian countries and is based in Thailand--is a member organization of WOCCU but doesn't have represented credit unions from Japan. In the U.S., credit unions in Hawaii and along the West Coast reported no damages. "Although the damages in Japan are tremendous, both from the earthquake and tsunami, all credit unions CUNA Mutual contacted in Hawaii Friday report they suffered no damages from the tsunami that struck there Friday morning," said Phil Tschudy, media relations manager with CUNA Mutual Group. "We also have no reports of any tsunami-related losses along the West Coast of the continental U.S.," he told News Now. Credit unions are preparing to do what they can to help with relief efforts. Two California-based credit unions that serve Japanese-American communities are waiving fees for wire transfers so members can help families back in Japan. Nikkei CU, a $68 million asset credit union based in Gardena, began immediately eliminating fees that normally accompany outgoing wire transfers to Japan. The fee will be waived until April 30, it said on its website. JACOM CU, an $84 million asset credit union based in Los Angeles, also plans to waive fees. The UW CU in Madison, Wis., announced Monday that its members could donate directly from their Web Branch accounts to the American Red Cross to support the disaster relief. UW CU said that when members log into the Web Branch, they will find a Red Cross icon to click at the top of the main page with instructions for directing money from their accounts to the relief fund. Meanwhile analysts are predicting that the disaster will impact Japan's economy. Some say the impact won't be as severe on the economy of Japan, because it will begin rebuilding. However, it would add to Japan's debt. The country has the world's highest debt at 200% of gross domestic product (USA Today March 14). The New York Times said the economy impact is spreading, with nuclear plant problems threatening to cause an energy squeeze that could set back all sectors of the country's economy. Although power cutbacks and rolling blackouts are expected to last up to two weeks, some analysts say that if longer cutbacks could seriously affect Japan's ability to produce goods for an extended period. The Bank of Japan has already eased monetary policy by expanding an asset buying program, said the Times. The property casualty insurance industry is already estimating the costs of insuring the properties destroyed in the catastrophe. One catastrophe modeler estimated losses would be at $35 billion, according to PropertyCasualty360.com (March 14). Smaller reinsurers may suffer losses that impact their capital positions, said Standard & Poor's MarketScope Advisor. It predicted claims would set new records, and losses from the Japan earthquake and tsunami--as well as other catastrophic events this year--could spark a firming of worldwide insurance and reinsurance rates. The 8.9 earthquake--the largest in Japan and the fifth largest in the world--knocked the island of Japan eight feet closer to the U.S. and produced a 23-foot tall wall of water that slammed into Japan's eastern coast. It also created a multiple nuclear reactor nightmare Thousands are feared dead in Rukuzentakata and Sendai. It also created nuclear reactor concerns about five nuclear plants and forced the evacuation of nearly 200,000 people who lived near one of the reactors (USA Today March 14).


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