March 24, 2009

Dear Emory Alliance Credit Union Member,

Recently there has been substantial press coverage about two “corporate” credit unions that were taken over by the National Credit Union Administration (NCUA) on Friday, March 20. The NCUA is a federal regulatory agency for credit unions, which is similar to the FDIC for banks. I wanted to give you a better understanding of the situation and reassure you of Emory Alliance Credit Union’s current financial position.

The story being reported involves two credit unions: U.S. Central Federal Credit Union, Kansas, and WesCorp Federal Credit Union, California. These two “corporate” credit unions were placed into conservatorship, which means they are still operating normally but are now being managed the NCUA. Corporate credit unions’ business model is very different from our “natural person” credit union. Corporate credit unions are a small group of wholesale institutions that do not conduct business with the general public. They provide liquidity, investment and payment services to credit unions like ours. Because of the nature of what they do, these corporate credit unions operate in the capital markets and invest in the highest-rated, investment grade securities. But as with so many others, accounting rules have required them to recognize the decline in the market value of their investments. In the case of these two corporate credit unions, the “unrealized” losses were significant enough that NCUA considered it necessary to install conservatorship.

As for members of Emory Alliance Credit Union, it’s business as usual. The same level of quality service you receive from our credit union will continue. Our service to you is not affected by these government actions. The credit union always has and continues to lend and invest responsibly. Despite today’s myriad economic challenges, Emory Alliance Credit Union continues to be a reliable and stable source for financial services and one of the best alternatives to commercial banks available to consumers. Our credit union is healthy and sound. Our members’ money is safe. Deposits in each account are federally insured up to $250,000 and backed by the full faith and credit of the United States Government through the National Credit Union Share Insurance Fund. There has been no credit union member who has ever lost a penny of federally insured funds.

While these events will not affect our service to you or the insurance coverage, they do not come without a cost. Every credit union insured by the National Credit Union Share Insurance Fund will be called upon to replenish the fund and bring it back to the strong level enjoyed before these events occurred. Rest assured that while this will impact the current years earnings your credit union remains well capitalized. We will continue to inform you of our performance and news within credit union industry as necessary. Thank you for the opportunity to serve you and you can feel confident that our credit union remains strong, safe and secure for you.

Sincerely,