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CUNACFA Holiday spending could inch up this year

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WASHINGTON (11/23/10)—With unemployment rates hovering around 10% this year and the economy perhaps working toward a sluggish return to normal, a Credit Union National Association (CUNA)/Consumer Federation of America (CFA) survey has offered a glimpse of some improvement in holiday retail sales. One in ten respondents to a CUNA/CFA holiday spending survey said that they would spend more than they spent last year when making their yearly gift selections. That beats 2009 results when only 8% intended to increase their holdiay spending. The survey, which was presented during a Monday event at The National Press Club in Washington, D.C., was executed between Nov. 11 and 14 and questioned 1000 adults. This is the 11th consecutive year that CUNA and the CFA have partnered to conduct the survey and offer consumer advice on managing holiday debt. Speaking during the Monday press conference, CUNA Senior Economist Mike Schenk said that 23% of respondents said that their financial condition had improved over the past year, indicating that holiday spending could see an upturn. However, 41% of consumers surveyed this year said they intend to cut back their holiday spending, compared to 43% last year. One quarter of respondents said that they were holding back due to concerns over the state of the economy, and 33% said that they were restricting their spending due to their own personal financial situations. Just over one in ten of the respondents said that they were opting to save rather than spend. A total of 47% said that they would spend the same amount they spent last year. CUNA and CFA suggested that consumers can keep their individual levels of holiday debt under control by sticking to a predetermined budget for gifts, holiday foods, party clothes, holiday decor and postage. Consumers will also benefit financially from comparison shopping and paying with cash or lower-interest credit union cards. CUNA and the CFA also noted that while new rules that restricted gift card expiration dates and fees make them a safer gift, those that give gift cards “should still read the fine print.” Consumers can also plan for future holidays by shopping post-holiday sales for next years' gifts and starting a holiday savings account that they will contribute to over the course of the year, or take the novel approach of curbing spending through low- or no-cost ways to celebrate the holidays, CFA Executive Director Stephen Brobeck suggested. Nearly 20 national and local media outlets covered Monday's release of the consumer holiday spending projections. (See related story in today's News Now: Local, national press cover spending survey release.)

NCUA releases U.S. Central details to corporate litigant

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ALEXANDRIA, Va. (11/23/10)—The National Credit Union Administration (NCUA) has provided Corporate America CU with access to approximately 750,000 pages of documents regarding the failed U.S. Central FCU. The documents were sought by Corporate America via a Freedom of Information Act (FOIA) request made in June, after Corporate America had first tried to subpoena these documents in May. Corporate America filed a FOIA lawsuit in the U.S. District Court for the Northern District of Alabama earlier this month seeking to compel NCUA to release the documents, but Corporate America voluntarily withdrew the FOIA lawsuit last week. The NCUA has confirmed that it has “already provided Corporate America with access to documents that were the subject of the lawsuit." "The matter has been resolved and the suit dismissed,” the NCUA added. Corporate America sought these documents in connection with its separate lawsuit against the former directors and officers of U.S. Central, which is also pending in the U.S. District Court for the Northern District of Alabama. That case is slated to go to trial in August 2011 and alleges securities law violations, breach of fiduciary duty, and similar claims against U.S. Central's former management.

Restitution employment ban ordered for two by NCUA

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ALEXANDRIA, Va. (11/23/10)—Two former credit union employees have been banned from future work at any federally insured financial institution, as well as ordered to pay substantial restitutions, under prohibition orders issued by the National Credit Union Administration (NCUA). In a Monday announcement, the NCUA noted the following details of the enforcement orders:
* Eugene Miley, an institution affiliated party of Moonlight CU in Worthington, Pa.; Stanwood Area FCU in New Stanton, Pa.; and Vantage Trust FCU in Wilkes-Barre, Pa., was convicted of theft and sentenced to 58 to 148 months in prison, 300 hours of community service, and will be required to pay more than $2 million in restitution; and * Ira Rudin, a former employee of Central CU in Rego Park, N.Y., was convicted of embezzlement. Rudin was sentenced to 21 months imprisonment, threeyears supervised release, and ordered to pay $175,000 in restitution.
Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million.

Corporate America buys Constitution Corporates CUSO

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ALEXANDRIA, Va. (11/23/10)--Corporate America CU has purchased Constitution Corporate FCU’s credit union service organization, known as Smart Source Solutions, the National Credit Union Administration (NCUA) reported on Monday. Corporate America’s purchase and assumption order was accepted by the NCUA, and that corporate credit union will take control of Smart Source by the end of this month. In a release, the NCUA said that Corporate America’s proposal was accepted following a bidding process in which both credit union and non-credit union entities were involved. The NCUA added that it selected Corporate America’s bid “after determining it offered the best solution for customers of Smart Source Solutions and was in the best interest of the National Credit Union Share Insurance Fund.” The NCUA late last week announced that Constitution Corporate would be liquidated on Nov. 30. The NCUA took control of the mortgage-backed securities on Constitution's balance sheet to facilitate the securitization of those assets. The payment processing systems and members of Constitution Corporate are in the process of being transferred to Members United Bridge Corporate FCU, a bridge corporate created when Members United Corporate FCU was liquidated. Bridge corporates also formed around the liquidations of U.S. Central FCU, Western Corporate FCU, and Southwest Corporate FCU.

Inside Washington (11/22/2010)

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Inside Washington
* WASHINGTON (11/22/10)--Regulators claim they are taking action against mortgage servicers that fail to follow mortgage guidelines, but observers maintain the agencies are ineffective in punishing noncompliant firms. At a House Financial Services housing subcommittee hearing on Thursday, the Treasury Department and the Federal Housing Administration said servicers have failed to comply with the conditions of government programs less than 5% of the time, and those firms for the most part have been ordered to make the necessary improvements to ensure approval (American Banker Nov. 22. But lawmakers like Rep. Maxine Walters (D-Calif.) argued that monetary penalties or sanctions should be leveled against firms that failed to comply with the Home Affordable Modification Program (HAMP). Under the program, the Treasury can deny compensation to noncompliant servicers. Julia Gordon, a senior policy counsel at the Center for Responsible Lending, said that without the threat of penalties, HAMP is unlikely to modify the behavior of consistently noncompliant firms …

Local national global press cover spending survey release

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Click for slide show CUNA Senior Economist Mike Schenk, left, and CFA Executive Director Stephen Brobeck, right, take questions following the release of the 2010 CUNA/CFA Holiday Spending Survey.
WASHINGTON (11/23/10)--Nearly 20 media outlets, ranging from global to local, covered the Credit Union National Association’s (CUNA) and Consumer Federation of America’s (CFA) 11th annual projection of consumers' holiday spending plans. The results of the spending survey, which were gathered between Nov. 11 and 14, were released during a Monday event at The National Press Club in Washington, D.C. CUNA and CFA also pair the results with advice to help consumers keep holiday debt under control. "This press event is another way to keep credit unions and CUNA visible in the national media and reinforce that credit unions are a trusted resource for consumers," said Mark Wolff, CUNA senior vice president of communications. The survey of more than 1,000 adult Americans indicated that overall holiday spending could increase, as 23% of respondents said that their financial condition had improved over the past year. A total of 19% reported improving financial prospects in last year’s survey. Among the television, cable and radio networks, and newspaper groups that attended or covered the press conference:
* NBC News * CNN * CBS News * Bloomberg * FOX News * ABC Radio News * Hearst TV * Dow Jones * The Associated Press
Reporters from the CBS Evening News with Katie Couric, National Public Radio, KNX radio in Los Angeles, a D.C.-area NBC affiliate, Cox TV and The Huffington Post also reached out to CUNA for further information after the event.