Monday, August 24, 2009

A Big Blip: “The Spanish now own the bank and our toll roads.”

Texas Credit Unions on Hold Following Bank Failure


By Jim Rubenstein
Credit Union Times
Copyright 2009

South Texas credit unions were acting cautiously Monday in connection with safety/soundness advertising following the weekend collapse of the $13 billion Guaranty Bank of Austin, the nation’s second largest banking failure in 2009.

“The bank’s troubles have been well known here for a long time and they really are not a factor in this market since most of their operations were elsewhere,” commented Tony Budet, president/CEO of the $1 billion University FCU of Austin. He said his CU has kept up its trusted adviser branding campaign all year and sees no need to alter strategy now.

Similarly, Tommy Seargeant, president/CEO of the $373 million Greater Texas FCU, said it would continue its safety/soundness campaigns in ads and newsletters but at the same time he deplores foreign interests taking over U.S. banks. “We should be able to handle our own,” he said.

A Spanish bank, BBVA Compass Bank, was the winning FDIC bidder Friday to take over Guaranty, which has been under regulatory scrutiny for more than a year because of its large mortgage loan losses in California.

“The Spanish now own the bank and our toll roads,” said Seargeant referring to Madrid-based Cintra SA providing highway funding in Austin and throughout Texas. While Budet of University characterized the Guaranty fallout on the local financial scene as a “blip” because of its California presence, Seargeant countered that “it is a big blip.”

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