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Two Wisconsin CUs cancel plans to merge

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MILWAUKEE, Wis. (2/20/09)--A proposed merger between two Milwaukee-area credit unions has been called off. The proposal, between $281.7 million asset Guardian CU, based in West Allis, and Prime Financial CU, a $200 million asset credit union in Cudahy, would have created the state's 10th largest credit union (Milwaukee Journal Sentinel Feb. 18). The two had planned to merge to create a wider market area and reduce operating expenses. However, Guardian CU notified the Wisconsin Office of Credit Unions that it was withdrawing from the proposal, said the Journal Sentinel. The newspaper said both credit unions were experiencing financial losses, caused by moving funds into loan-loss reserves to cover loans that potentially might turn bad. Prime Financial has hired Christine Dawe as its chief executive, replacing Richard Koenig. In 2007, Dawe served as a temporary CEO of Allco CU, West Allis, after it suffered losses related to subprime lending.

Federation UNFCU FA team up on services for CDCUs

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LONG ISLAND CITY, QUEENS, N.Y. (2/20/09)--Low- and moderate-income consumers in underserved communities across the country will gain access to a suite of financial programs and products at community development credit unions (CDCUs) through a new alliance between UNFCU Financial Advisors (UNFCU FA) and the National Federation of Community Development Credit Unions. "Our goal is to strengthen the capacity of CDCUs by providing them with the tools, expertise and resources they need to deploy sustainable financial solutions to low-income people," said Stephen J. Ryerson, president of UNFCU FA, a subsidiary of Long Island City, N.Y.-based United Nations FCU. "In this way, UNFCU FA is not only supporting credit unions that directly serve communities in need, but it is also fulfilling the UNFCU Board mandate to contribute towards the betterment of the human condition." The alliance enables the financial advisors group to gain deeper insight into the needs of low-income consumers to tailor programs, products and services for them, and for moderate-income individuals. Among the planned offerings are insurance services, investment and mortgage-related products, and real estate buying and selling assistance. The federation has focused the past several years on building bridges between credit unions of all types and sizes, explained federation President/CEO Cliff Rosenthal. "Our new partnership seeks to leverage our CDCU-members' knowledge of the low-income market with the scale and resources of this larger, more sophisticated financial institution," he said. "This collaboration will allow us to further our mission of helping low- and moderate-income people and communities achieve financial independence through credit unions." "UNFCU has a long history serving underserved members and credit unions throughoutAfrica and Latin America, as well as in low-income areas in the U.S., particularly in New York City," said Pablo DeFilippi, federation director of membership services . "We hope that this type of collaboration will create replicable synergies to better serve low-income communities across the nation." Last year the $2.688 billion asset United Nations FCU became the first credit union in the nation to participate directly in the federation's Community Development Investment Program (CDIP), with a $500,000 investment in CDCUs. CDIP has raised more than $46.2 million to invest in low-income credit unions across the U.S. While most of the federation's investment capital is from social investors, foundations, government, and banks, the federation has increasingly turned to the credit union movement for support. UNFCU was the first credit union in the nation to make a substantial investment.

CU National Mortgage Co. closes

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PINE BROOK, N.J. (2/20/09)--CU National Mortgage Co., based in Pine Brook, N.J., announced last week that it is closing, which will affect some credit unions nationwide (Life is a Highway Feb. 18). The company is a wholly owned subsidiary of U.S. Mortgage Corp., a mortgage banking organization, established in 1996. In 1999, CU National Mortgage was developed as a subsidiary of US Mortgage to serve the credit union industry. A message at the company said it is no longer taking calls.

Pa. banking secretary at budget hearing CUs are healthy

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HARRISBURG, Pa. (2/20/09)--Pennsylvania Secretary of Banking Steve Kaplan made it a point to include credit unions in responding to questions during a budget hearing for the Department of Banking, says the Pennsylvania Credit Union Association (PCUA). In responding to questions on credit cards, payday lending, the state of state-chartered banks and credit unions, Kaplan reassured the committee that all state-chartered credit unions and banks are safe, sound, and healthy (Life is a Highway Feb. 19). He also reiterated the new deposit insurance limits for banks and credit unions. Kaplan assured the committee that credit unions are healthy, but also alluded to the corporate credit union issues, adding that the corporates have been affected indirectly, like all financial institutions, said PCUA. Christina Mihalik, vice president of governmental affairs at the PCUA, attended the hearing.

Former Mexico president to keynote WOCCU conference

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MADISON, Wis. (2/20/09)--Vicente Fox, the former president of Mexico who helped energize that country's economy and strengthen its credit union movement, will keynote the 2009 World Credit Union Conference, the annual event of the World Council of Credit Unions. The conference will be July 26-29 in Barcelona, Spain. Fox is expected to address global economic challenges and the role credit unions can play meeting them. Fox served as Mexico's top elected official from 2000 to 2006 and was the country's first democratically elected president in 70 years. During his tenure, he increased public access to financial services and enacted legislation to strengthen Mexico's credit unions and increase access to their services. He left office with a 70% public approval rating. In 2007, Fox became co-president with Italy's Pier Ferdinando Casini of the Centrist Democrat International, a global coalition of more than 100 Christian Democrat parties. Before taking national office, Fox served as governor of the Mexican state of Guanajuato. During his administration from 1995 to 1999, he helped Guanajuato become the country's fifth most productive state, in certain sectors surpassing the national average. Fox also served as president of Coca-Cola Co. for Mexico and Latin America. For more information about the World Credit Union Conference, use the link.

Iowa league conference features Hyland Hampel

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DES MOINES, Iowa (2/20/09)--National Credit Union Administration (NCUA) Board Member Gigi Hyland was the keynote speaker at the Iowa Credit Union League’s Legislative and Regulatory Issues Conference held Tuesday and Wednesday in Des Moines. Hyland told the 120 participants that the event was her first face-to-face appearance with credit unions since the NCUA’s Corporate Stabilization Program was announced.
Click to view larger image National Credit Union Administration (NCUA) Board Member Gigi Hyland and Keith Morton, NCUA regional director of Region IV, discuss NCUA's Corporate Stabilization Program at the Iowa Credit Union League's Legislative and Regulatory Issues Conference Tuesday and Wednesday in Des Moines. (Photos provided by the Iowa Credit Union League)
Click to view larger image Credit Union National Association Chief Economist Bill Hampel explains the macro economic crisis facing the country and how it impacts credit unions at the Iowa Credit Union League's Legislative and Regulatory Issues Conference earlier this week.
Hyland and C. Keith Morton, NCUA regional director of Region IV, answered questions and provided further detail on the accounting treatments of the NCUA assessment. She said NCUA considered a number of other options to stabilization, including doing nothing, conservatorship and Trouble Asset Relief Program (TARP) funding, and the NCUA Board concluded that stabilization was the best, most immediate and least costly option for credit unions. However, NCUA is still open to reviewing all feasible and legal alternatives, Hyland said. Hyland pointed out the strong capital position of the credit union industry and that its culture has always been to build capital and maintain a relatively high return on assets. She emphasized that credit unions have built their capital in good times so that they could withstand the bad. Now more than ever, credit unions should use their capital to weather the storm and to operate business as usual as much as possible, she said. This sentiment was shared by first day featured speaker, Bill Hampel, Credit Union National Association chief economist. He told credit unions, “You need to let the capital protect you in times like these. Use it as an umbrella when it rains, and right now it’s pouring.” In addition, Hampel reviewed the macro economic crisis facing the country and how it is impacting credit unions. NCUA's Morton said that the National Credit Union Share Insurance Fund (NCUSIF) was developed to aid in challenging times like these. “If you’re not going to use it now, when will you?” He also explained how credit unions need to account for the NCUA assessment on their books. In answering audience questions, Hyland and Morton said NCUA does not know at this time if another assessment will be needed down the road. It largely depends on the performance of the securities in which the corporate credit unions have invested. NCUA examiners will treat the assessment as an “extraordinary event that was out of your control,” Hyland told the group. Regarding NCUA's Advanced Notice of Proposed Rulemaking (ANPR) for the corporate system, Hyland encouraged credit unions to “tell the NCUA how the Corporate Credit Union System is working for you and what you need from it in the future.” She urged credit unions to continue to support corporates now more than ever and said, “Failure to do so would be catastrophic.” Another featured speaker was John Caladim, managing director of CU Investment Solutions, an affiliate of U.S. Central. Caladim explained what caused U.S. Central’s other-than-temporarily-impaired losses and the role the corporate played in NCUA's actions, but reiterated that this is not a corporate credit union or industry-specific issue. “We are talking about a systemic problem that is worldwide,” he said. Iowa Credit Union Division Examiner Supervisor Ann Mulcahy described a letter the division issued Feb. 16 to Iowa credit unions indicating that before credit unions pay dividends on shares and interest on depsosits, they should provide for "required reserves, accrued and unpaid expenses, and established loan and lease losses, and as long as the charges do not cause the credit unions' legal reserve to fall below the required Iowa statutory level and the net worth ratio to fall below the well capitalized category.” Additional conference topics included mortgage lending fraud, federal consumer lending, state legislative panel, CUNA legislative update, and collection issues facing Iowa. On Wednesday evening, more than 150 legislators and credit union representatives attended a legislative reception.

NASCUS 2009 Summit set for Boston in August

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ARLINGTON, Va. (2/20/09)--The National Association of State Credit Union Supervisors (NASCUS) will celebrate the 100th anniversary of the state credit union charter at its annual State System Summit in Boston Aug. 20-22. Federal Deposit Insurance Corp. Board Member Tom Curry, National Credit Union Administration Board Member and NASCUS liaison Gigi Hyland, and Chip Filson of Callahan and Associates are among the event's confirmed speakers. As the nation faces an unprecedented economic environment, the NASCUS summit will offer system-wide collaboration on how state credit unions can continue to provide financial health solutions for the next 100 years and beyond. “For the past 100 years, beginning in Massachusetts in April 1909, state regulators and credit unions have worked together to develop innovative, safe and sound financial services for credit union members,” said Mary Martha Fortney, NASCUS president/ CEO. “We take great pride in this 100th anniversary and look forward to beginning the second century of a strong state credit union system.” Attendees who register early for NASCUS’ 2009 Summit can receive an “Early Bird” rate. Additional savings are available when three or more attendees are from a single organization. For more information, use the link.

Oklahoma CU board approves takeover of CU

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TULSA, Okla. (2/20/09)--The Oklahoma State Credit Union Board has approved the takeover of Tulsa’s Frisco Employees CU, Tulsa, by Western Sun FCU, Broken Arrow. The merger, which will take effect April 1, was approved by the board on Tuesday. The move will help Frisco obtain better services for its 2,109 members, said the Oklahoma Banking Department. Western Sun has 16,659 members (The Journal Record Feb. 18). After the merger, Western Sun will have about $100 million in assets.

County pulls 5 million comp funds from CU

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OREGON CITY, Ore. (2/20/09)--Clackamas (Ore.) County’s decision to withdraw the $5 million it had deposited at Clackamas Community FCU is hurting the credit union. The county had deposited the funds as part of its employee deferred compensation program, but now will invest the withdrawn money with ING, a Dutch financial conglomerate ( Feb. 19). While the county’s decision to consolidate accounts and pare down fees that employees will have to pay is understandable, the matter could have been handled better, credit union officials told the news outlet. The withdrawal of the $5 million was a big hit for the $178.7 million asset, Oregon City, Ore.-based credit union to absorb, Barry Rotrock, Clackamas Community FCU board chairman, said. Rotrock said the credit union could have put together a very strong offer if it had been allowed to bid to manage the account.

IBoston GlobeI CUs paying for others mistakes

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BOSTON (2/20/09)--Credit unions nationwide are paying a price for poor decisions made by others, a Boston Globe columnist wrote Friday. “Why are credit unions suddenly on the hook for an investment meltdown that could easily cost the entire industry the kind of money it earns in a whole year or even more?” wrote columnist Steven Syre. “The answer isn’t about mistakes made by credit unions. Those small institutions are paying a price for decisions made somewhere else by someone else--calls that seemed reasonable at the time but worked out very badly.” Credit unions are being assessed special charges “to help bail out one large institution that serves their industry [U.S. Central] and bolster two dozen more [the other corporate credit unions in the U.S.] like it,” Syre wrote. The declining value of mortgage-backed securities are the main reason for the problem, Syre added. “Compared with the trillion-dollar rescue packages under negotiation in Washington, the new problems facing credit unions look like a rounding error,” Sayre continued. “And the vast majority of credit unions, which tend to maintain high capital cushions, will be able to eat the cost and move on if they must.” However, the corporate stabilization plan will still have repercussions for credit unions by making it harder for them to lend, said Michael Hanson, president of the Massachusetts Share Insurance Corp.--which insures credit union deposits in the state that exceed federal limits. “Recklessness by financial giants caused most of our problems. Your local credit union is paying a price just the same,” Syre concluded.

State lawmakers support Iowa CUs Little Guy

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DES MOINES, Iowa (2/20/09)--Iowa state legislative leaders showed their support for Iowa credit unions and credit union principles represented by the “Little Guy” at the Iowa Credit Union League’s (ICUL) annual Legislative and Regulatory Issues Conference Feb. Tuesday and Wednesday in Des Moines.
Attendees at the Iowa Credit Union League’s annual Legislative and Regulatory Issues Conference included, from left, (front row): Warren Morrow, Coopera Consulting; State Sen. Brian Schoenjahn (D-12); and Marybeth Foster, Iowa Credit Union Foundation. From left, (back row): Dick Noble, University of Iowa Community CU, Iowa City; Andy Hawkinson, DuTrac Community CU, Dubuque; Joe Hearn, Dupaco Community CU, Dubuque; Pat Jury, Iowa Credit Union League president/CEO; and Jason Norton, DuTrac Community CU, Dubuque. (Photo provided by the Iowa Credit Union League)
More than 100 Iowa credit union representatives convened at the conference to learn about legislative issues affecting the credit union industry and to interact with legislators. Conference participants and state legislators were introduced to “The Little Guy,” who represents hard-working men and women of Iowa that credit unions serve. Speakers included U.S. Rep. Bruce Braley (D-1), State Rep. Tom Schueller (D-25), State Rep. Kevin Koester (R-70) and State Sen. Jeff Danielson (D-10). Schueller praised the Iowa credit union movement for providing individual development accounts to help low-income Iowans acquire assets through a matched savings and financial literacy program. Danielson commended the credit union industry’s sustainable, community-oriented business and leadership model. He said he hopes Iowa’s Main Street values come to the forefront in these challenging times. Also, ICUL recognized State Sen. Brian Schoenjahn (D-12) with the league’s Youth Financial Literacy Award, given to state lawmakers instrumental in advocating for financial literacy. Schoenjahn, a former teacher, is passionate about improving the financial well-being of all Iowans through requiring financial literacy instruction in Iowa schools, ICUL said. Last year, historic legislation--Senate File 2216, which requires the teaching of financial literacy in all Iowa schools--was passed with his leadership and direction.