Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

CU System Archive

CU System

CU System briefs (01/04/2011)

 Permanent link
* RIVERSIDE, Calif. (1/5/11)--Ron Woodbury, a 25-year former senior executive of Altura CU, an $838.5 million-asset credit union based in Riverside, Calif., announced his candidacy for mayor of Riverside after officially filing Dec. 28 for the June 2012 election. His tenure at Altura made Woodbury “acutely aware of how local, state and national economic conditions pose great challenges and opportunities to our community,” he said on his website, ronwoodburyformayor.com. Woodbury said he would focus on enhancing technology in the city to create jobs and also the city’s commitment to the arts … * BOULDER, Colo. (1/5/11)--Elevations CU has added three new members to its senior management team. Jay Champion has been named chief lending officer. Todd Kern has been named vice president of marketing and Ryan Klassen has been named assistant vice president of credit risk management. Prior to joining Elevations CU, Champion served as executive vice president and chief lending officer for Texans CU, Richardson, Texas. Champion also served as president/CEO of Texans CU’s credit union service organization, Texans Commercial Capital, LLC. Kern comes to Elevations CU from USA FCU, San Diego. Klassen was director of lending services for Bellco CU, Englewood, Colo. … * PROVIDENCE, R.I. (1/5/11)--Leonard Decof, a trial lawyer who at the request of former Rhode Island Gov. Bruce Sundlun represented the state after the collapse of the state's private share insurance system, died Dec. 31. He was 86. Decof prosecuted civil claims after Rhode Island state-chartered credit unions' private share insurer, the Rhode Island Share and Indemnity Corp. (RISDIC), collapsed in 1990. The events resulted in the demise of more than a dozen private share insurance companies. (The Providence Journal Jan. 4) … * TULSA, Okla. (1/5/11)--Harry William Avey, former president of Tulsa, Okla.-based Red Crown FCU, died Dec. 13. He was 78. He began his credit union career at 66 FCU, where he served seven years. He served as president of Red Crown FCU until his retirement in 1993. He was a member of the Credit Union Executives Society and taught credit union courses at Tulsa Community College. He also served as board chairman of Oklahoma Central CU. In 1982, while president of the Magic Empire Chapter of NE Oklahoma Credit Unions, he was one of four founders of a credit union scholarship, which has awarded thousands of dollars every year. Services will be in Jenks, Okla., on Saturday (Tulsa World Jan. 2) …

Lawsuit filed over acquired CUs failed loans

 Permanent link
INDIANAPOLIS (1/5/11)--A credit union that acquired the assets of the now defunct, Michigan-based Capital Community CU has been sued by an Indiana-based credit union that entered a loan participation agreement with a provision for CapCom to buy back the loans if they defaulted. FORUM CU, based in Fishers, Ind., filed the suit in the U.S. District Court for the Southern District of Indiana, Indianapolis Division, on Dec. 15, against Dearborn, Mich.-based DFCU Financial, which acquired CapCom's assets and assumed its liabilities in 2009 in a merger. FORUM acquired 90% interest in the two life insurance policy loans in December 2007 and the loans are worth $6.7 million in principal and interest, according to the complaint filed, which maintains its agreement required CapCom to buy back the loans if they went into default. The loans were made to trusts set up by elderly, wealthy individuals to fund the purchase of high-value life insurance policies. They were intended as short-term loans intended to pay the first few years' premiums after which they would be sold in the open market, FORUM's complaint said. They went into default in 2010 and FORUM requested the repurchase on June 23. "In 2008, there was a material change in the value of the collateral securing the … loans because of changes to the life expectancy tables used to calculate the values of the collateral life insurance policies," said the complaint filed. According to the court documents, Dearborn maintains that a subsequently executed contract does not include a repurchase provision. However, FORUM said the subsequent contract is unrelated to the loans at issue and involved "additional loans FORUM might later agree to fund," said the court document. Dearborn has filed for arbitration with the American Arbitration Association under an arbitration provision but FORUM has moved to stay the arbitration because "arbitration is a matter of contract and a party cannot be forced to arbitrate without its consent."

CUs loan brings Culvers to town

 Permanent link
BATTLE CREEK, Mich. (1/5/11)--Battle Creek, Mich., now has a new Culver's restaurant, thanks to a business loan that OMNI Community CU provided after 28 other financial institutions refused financing for the business.
OMNI Community CU Commercial Services Manager Ed Mounce, left, congratulates Culver's owner Michael Miller on bringing the restaurant to Battle Creek, Mich., with a loan from the credit union. (Photo provided by OMNI Community CU via the Michigan Credit Union League)
The credit union said its business lending has grown by nearly 100% from September 2009 through September 2010 (BattleCreek Enquirer.com Dec. 27 and Michigan Monitor Jan. 3). "Twenty-eight different financial institutions turned me down for financing my business," said Michael Miller, owner/operator of the Culver's in Battle Creek. "OMNI was the only one who gave me the opportunity to make my business a reality in successfully brining Culver's to Battle Creek." OMNI Community CU CEO Ted Parsons told the Enquirer that many businesses can benefit from bringing their relationship to the credit union. The $249 million asset credit union has paid a cashback rebate for the past three years to members. The rebate differentiates the credit union in the marketplace because no other financial institution in Southwest Michigan is offering this, the credit union said. Credit unions, state-level leagues and associations, and the Credit Union National Association have advocated throughout the past year to lawmakers that raising credit unions' member business lending cap to 27.5% of assets from 12.25% would help generate more loans and more jobs without cost to taxpayers.

Merger official for Pacific CU Self-Help FCU

 Permanent link
VALLEJO, Calif. (1/5/11)--The merger between 1st Pacific CU and Self-Help FCU has received regulatory approval. Effective Jan. 1, the nine Bay Area Calif. branches of 1st Pacific CU, will operate as part of Community Trust, a division of Self-Help FCU. The merger brings 1st Pacific CU, a $161 billion institution, into a family of Self-Help FCU branches operating across California. Self-Help FCU, with $377 million in assets, was chartered in 2008 with a mission of preserving and expanding economic opportunities for families and communities of modest means. With the addition of 1st Pacific CU, Self-Help FCU now has 17 branches. The merger is the sixth for Self-Help FCU in California.

Advantage FCU acquires 1st Priority FCU

 Permanent link
ROCHESTER, N.Y. (1/5/11)--Advantage FCU in Rochester, N.Y., has acquired 1st Priority FCU, which serves employees and students of Rochester Institute of Technology. The acquisition became effective Saturday when 1st Priority took the name of the $148 million-asset Advantage (Rochester Business Journal Jan. 30). Advantage FCU serves city schools and more than 70 select employee groups, including the University of Rochester, Highland Hospital and Rochester General Hospital. Advantage has five branches in the Rochester area.

CU loan balances fall but earnings may rise in 11

 Permanent link
MADISON, Wis. (1/5/11)--Although credit unions’ loan balances declined in November and the past year, their earnings are expected to increase in 2011, according to a Credit Union National Association (CUNA) economist’s analysis of CUNA’s monthly estimates of credit unions.
Click to view larger image Click for larger view
Credit union loans outstanding decreased 0.2% during November, the same as the decrease for October. Unsecured personal loans led loan growth, up 1.6%, followed by fixed-rate mortgages, credit card loans and used-auto loans, which rose 1.5%, 0.9% and 0.3% respectively. Home equity lines of credit declined 0.4%, followed by new-auto loans (1.3%) and adjustable-rate mortgages (3.4%). Credit union loans in November totaled $580.1 billion, compared with $590 billion in November 2009. “Loan balances declined 1.7% over the last year,” Steve Rick, CUNA senior economist, told News Now. “The main cause of the decline was a 17% drop in new-auto loan balances over the last 12 months. The two bright spots in credit union lending were used-auto and credit card loans, which were up 3.6% and 3.1% respectively over the last year.”
Click to view larger image Click for larger view
Credit union savings balances decreased 0.5% in November, compared with a 0.7% increase during October. Money market accounts led savings growth, rising 0.3%. Individual retirement accounts fell 0.1%, followed by one-year certificates (0.3%), regular shares (0.6%) and share drafts (1.5%). Credit union savings in November totaled $799.4 billion--or $34 billion more than the $765.4 billion in November 2009. Credit unions’ 60-day-plus delinquencies increased slightly to 1.8% during November. “The credit union loan delinquency rate has remained essentially unchanged over the last year,” Rick said. “The November delinquency rate came in at 1.77%, one basis point lower than the 1.78% reported in November 2009. The delinquency rate will rise to the mid-1.8% level during the December-to-February time period because of seasonal factors.” The loan-to-savings ratio increased slightly to 73% in November 2010. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities-- remained constant at 19%. The movement’s overall capital-to-asset ratio remained at 10% in November. The total dollar amount of capital is $94 billion. “Over the past 12 months, the growth rate of credit union capital exceeded the growth rate of assets pushing the capital-to-asset ratio up from 9.9% in November 2009 to 10.1% in November 2010,” Rick said. “Credit union earnings are expected to increase in 2011 due to higher net interest margins and falling loan loss provisions.”

2010 bankruptcies up 9 over 2009

 Permanent link
ALEXANDRIA, Va. (1/5/11)--Personal bankruptcies increased 9% to more than 1.53 million in 2010, according to the American Bankruptcy Institute (The Wall Street Journal Jan. 3). The 2010 figure is the highest in any year since 2.04 million bankruptcies were filed in 2005, when Congress revised the bankruptcy statute, making it more difficult for individuals to discharge debt under court protection (Reuters Jan 11, 2006). By comparison, fewer than 600,000 bankruptcies were filed in 2006. Since then, the number of bankruptcies filed has increased each year because the housing slump and recession have pushed unemployment to nearly 10%, said analysts. The Southwestern and the Southeastern regions have been hit particularly hard during the economic crisis. However, in 2010, filings dropped in Tennessee, South Carolina and Alabama. Filings were up dramatically, however, in two Southwestern states. In California, bankruptcies increased by 25%. In Arizona, filings rose nearly 24%.