DETROIT (7/23/13)--The city of Detroit formally sought federal bankruptcy court protection Thursday when Kevin Orr, the city's appointed emergency manager, made a filing after Michigan Gov. Rick Snyder approved it. The Michigan Credit Union League and area credit unions are poised to help members impacted by the event.
"There is still much uncertainty about what the bankruptcy filing will mean for the city of Detroit, and that includes those credit unions that serve city employees," MCUL & Affiliates CEO David Adams told News Now.
"But what is certain is that those credit unions will continue to support their members through this process. While these are trying times, we hope that this will be the start of a new, more prosperous future for one of America's great cities," he said.
Area credit unions also are uncertain about the bankruptcy's effect. "We don't know what the repercussions are; it is still early for us," Kathy Trembath, president/CEO of Detroit Municipal CU, which serves mostly city employees, told News Now. "We don't know if they will reduce wages more for municipal employees. We may do restructuring of loans or extensions for members.
"We will take any action to help members," she added. "Right now, [the situation] is all over the place as to what will happen. Everyone is speculating on things. We will be proactive to protect our credit union members and assets."
Snyder explained his decision in a letter authorizing the bankruptcy filing by citing key statistics that indicate the city's troubled state (USA TODAY July 19-21).
Lost auto-industry jobs and an escalating crime rate have caused many middle-class citizens to leave Detroit during the past few decades, resulting in the city's population plummeting to 700,000 from a peak of 1.8 million during the 1950s auto-industry boom times, said USA TODAY.