There are about 8,000 credit unions (most of them really small – sub-$200 million in assets) and 7,000 banks and S&Ls in the country.
Generically, the credit unions didn’t get into as much trouble as small banks for one reason: they face severe restrictions on underwriting construction and development loans. The credit unions’ SFR portfolios are just as ugly as everyone else’s however. Virtually every small bank that fails this cycle will be as a result of one issue: too heavy a concentration in construction and development loans. It’s that simple. Had C&D loans been restricted to 15% of total loans the housing bubble would have been greatly muted. But, such is life…
