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Tampa Bay expands mortgage loans in refinance surge

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TAMPA, Fla. (4/29/09)--Tampa Bay FCU says it's expanding its real estate lending/servicing division so it can handle the surge in the refinancing market for mortgages serviced by Fannie Mae. "In the first quarter of 2009, we have seen a surge in new clients taking advantage of refinancing their Fannie Mae mortgages," said Dean Clark, manager of real estate lending/servicing for the credit union, a Fannie Mae-approved loan servicer. If Fannie Mae owns the mortgage, "the homeowner can pretty much go with any new finance options, which gives incredible advantages in the declining real estate market," Clark said. (PRNewswire April 27). In March, the Treasury Department released guidelines and updates for a Homeowner Affordability and Stability Plan, which Fannie Mae was quick to adopt with a Refi Plus program. The Refi Plus program provides easier loan-to-value guidelines so more homeowners can take advantage of current lower interest rates. The advantages of a refinancing with the credit union include having a local lender, local servicer and local decision-maker, said the $278 million asset credit union. The Refi Plus loan also lowers closing costs, provides exemption from intangible state tax, includes no origination, underwriting or processing fees, and no third-party broker fees and comes with competitive interest rates, the credit union added.

Peer-to-peer lender back with service to connect FIs

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NEW YORK (4/29/09)--Peer-to-peer lender Prosper Marketplace Inc. Tuesday relaunched a new service, "Open Market," which will enable financial institutions to resell loans to its investors, including small businesses. By offering loans to investors willing to bid on them, banks, credit unions, auto-finance companies and others gain access to funds they could use to make loans to more people, at a time when capital markets have largely been frozen, said the company (The Wall Street Journal April 28). Prosper shut down most of its peer-to-peer lending operations last October, according to the Journal, after it and similar lenders fell under increased scrutiny from regulators. Peer-to-peer lending still contains risks, said the article. The average lender return since the company was established in 2006 is 2.8%, after defaults. In March 2007, Prosper began providing more information about borrowers' credit and employment histories, and that improved lender returns to 4.8%. Prosper says investors benefit with potentially higher interest rates on loans that have already been vetted by a financial institution, are current, or have at least three months' payments already paid. But unlike traditional securitization markets that package loans into complex bundles and sell them to investors, Open Market will provide details about each loan to investors. Because Prosper's registration process is still ongoing with the Securities and Exchange Commission, it is operating under an intra-state exemption from the California Department of Corporations. That means only California residents and businesses can lend or invest in Prosper's loans, although it accepts loan applications from borrowers across the country. After the SEC registration is complete, however, financial institutions and lenders in other states will be able to use Open Market.

CU real-estate loans to grow 12.1 CUNA tells Dow Jones

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WASHINGTON (4/29/09)—Don't rule out credit unions for mortgage loans, Mike Schenk told Dow Jones Tuesday. Schenk is senior economist for the Credit Union National Association (CUNA). At a time when the economy is struggling and mortgage credit from some sources is all but dried up, Schenk noted that credit unions are expecting to increase their overall lending by 6% in 2009, compared to the previous year. He noted that real-estate lending by credit unions is expected to grow 12.1% compared to 2008, according to CUNA projections. Schenk explained that credit unions largely didn't make the kinds of risky subprime loans that have rocked the nation’s economy. And since they engaged in prudent lending practice, Schenk said credit unions are in a better position to lend. Schenk advised consumers to choose a mortgage wisely and to factor in all costs when comparing mortgages. He added the warning: If something seems too good to be true, it probably is. The CUNA economist made his remarks in an article spotlighting that it is becoming harder and more expensive for consumers to get mortgage loans.

Illinois league kicks off legislative day today

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NAPERVILLE, Ill. (4/29/09)--Nearly 160 credit union activists are expected today at the Illinois Credit Union League's (ICUL) annual legislative day and reception in Springfield. At the event, National Credit Union Administration (NCUA) Chairman Michael Fryzel will discuss "Current Issues With NCUA," said the league. Other highlights:
* Robert Meza, director of the state Department of Financial and Professional Regulation Credit Union Division, will provide an update on Illinois' state-chartered credit unions; * Legislative leaders from the Senate and House Financial Institutions committees will discuss issues pending before the committees; and * ICUL staffers Steve Olson, executive vice president, general counsel, and Keith Sias, director of state governmental affairs, will brief participants on current issues critical to credit unions;
Participants also will visit lawmakers at the State Capitol and expect to meet more than 40 lawmakers at a legislative reception. The Illinois General Assembly is scheduled to adjourn its spring legislative session on May 31.

Voting ends Friday on ICU MagazinesI CU Hero

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MADISON, Wis. (4/29/09)--Voting for Credit Union Magazine's 2009 Credit Union Hero of the Year will end Friday. Credit union leaders have nominated four credit union heroes:
* Carla Hedrick, CEO, Denver Community FCU; * John Herrera, senior vice president of Latino/Hispanic affairs, Self-Help FCU, Durham, N.C.; * Regina McIlrath, president, Table Rock FCU, Shell Knob, Mo.; and * Cathie Tierney, CEO, Community First CU, Appleton, Wis.
To read about the nominees and vote, use the resource link. The winner will be posted on by June 15 and will be honored at the Credit Union National Association's 2009 America's Credit Union Conference & Expo June 21-24 in Boston.

Schenk Flu has potential to affect economy

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MADISON, Wis. (4/29/09)--The global swine flu outbreak has the potential to impact the economy, according to an economist with the Credit Union National Association. Analysts interviewed in Investor's Business Daily predicted a modest economic impact overall from the virus. Some sectors will be more affected than others. The virus "has the potential to have a significant effect on economic activity," as it hits the airline and tourism industries, said Mike Schenk, senior economist and vice president of economics and statistics at CUNA. The virus could also hurt consumer and investor confidence, he told the publication (April 28). The article pointed out the unfortunate timing of the flu--arriving just as the economy was leaning toward recovery. Concerns that the flu could delay a rebound were reflected in queasy markets, with the Standard & Poor's 500 dropping 1%, the Nasdaq down 0.9% and the Dow down 0.6% on Monday, the article said. Some sectors--such as the pharmaceutical industry--likely will do well during a pandemic, because demand for drugs to treat the flu symptoms would increase, said the article. According to USA Today, all 50 states will have received antiviral drugs by Sunday. On Tuesday, the Centers for Disease Control recommended that U.S. travelers avoid non-essential travel to Mexico, which has been hardest hit by the swine flu. The global airline industry--before the flu hit--was expected to lose $4.7 billion this year. Meanwhile, Tuesday afternoon the World Health Organization (WHO) said that almost all cases of the swine flu outside of Mexico were among people who had recently traveled to Mexico. It upgraded its alert level to phase four, consistent with a sustained human-to-human transmission. A level five would signify a pandemic (ComputerWorld April 27). Gartner Inc. analyst Rick DeLotto told ComputerWorld that WHO's phase-level increase won't affect businesses but could affect decisions to close schools and elderly health care. DeLotto is advising companies to check their telecommuting capabilities and to make sure assistant managers can take over if needed. Pandemic planners warned in the past that high demand from people accessing the Internet at home could lead to online usage restrictions. The U.S. Centers for Disease Control reported Tuesday that the number of confirmed cases in the U.S. jumped to 64 cases in five states Tuesday. New York City has 45 cases; California has 10; Texas, 6; Kansas, 2; and Ohio, 1. The case rate has increased about 20 a day since Sunday. Monday night the cases totaled 48 and Sunday night cases totaled 20. Other cases are reported but have not been confirmed with the centers, said USA Today and The New York Times (April 28).

CUNA offering webinar ItodayI on swine flu

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MADISON, Wis. (4/29/09)--"Swine Influenza Outbreak: What Your Organization Needs to Know Right Now" is the topic of a webinar today from The Credit Union National Association (CUNA). The webinar airs today at 4-5:30 p.m. ET; 3-4:30 p.m. CT; 2-3:30 p.m. MT; 1-2:30 p.m. PT; and 8-9:30 p.m. GMT. Presenters include Michael T. Osterholm, director of the Center for Infectious Disease Research & Policy (CIDRAP) and director of the Minnesota Center of Excellence for Influenza Research and Surveillance within CIDRAP, and Dr. Myles Druckman, vice president, medical services, Americas Region, International SOS Assistance Inc., Santa Monica, Calif. Osterholm and Drucker will answer these questions:
* How concerned should you be? * Can this virus cause a pandemic? * How are national and international leaders responding? * Will we continue to see new cases? * Should you lower your concern level because the new virus is causing mild illness among the cases in the U.S.? * What do likely public health measures such as isolation and quarantine, border closings, and interruptions in travel and trade mean for your business? * What should you do right now? * What if you don't have a plan?
Participants can ask questions during an extended live question and answer period. The webinar is geared to professionals with responsibilities for pandemic influenza and business continuity planning, communications, risk assessment and mitigation, strategic and crisis planning, corporate governance, operations, human resources, supply chains, legal issues, security, employee safety and travel management, and public-private sector partnerships. For more information, use the link.

CU System briefs (04/28/2009)

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* SAN FRANCISCO (4/29/09)--Ken Burns has been named CEO of San Francisco-based Patelco CU, the $4.1 billion asset credit union announced Monday. His appointment will be effective Friday. Burns succeeds Andy Hunter, who announced in July he intended to retire in mid-2009. Burns is currently serving his 13th year as CEO of the $1.3 billion asset Technology CU, based in San Jose. A former auditor for what is now known as McGladrey and Pullen Accountancy Corp. Burns also has served as chief financial officer at Bay FCU, Santa Cruz, where he was also CEO for six years until 1995. Hunter joined Patelco in 1990 to work under a progressive CEO, the late Ed Callahan. When Callahan retired in 2003, Hunter took the helm. Burns and Hunter will work together for a short period to ensure a smooth transition. Burns is a past chapter president of the California Credit Union League … * NORFOLK, Va. (4/29/09)--A former finance manager at a now defunct used-car dealership has been sentenced to 33 months in prison for defrauding a credit union of more than $500,000. Ashley Wynn, 28, of Virginia Beach, was sentenced after pleading guilty to consipiring to commit credit union fraud. Wynn was the finance manager for Car Store, which operated in Virginia Beach. She regularly obtained car loans for applicants from a credit union by preparing false loan applications and documents regarding their income, expenses, employment and living arrangements. According to the U.S. Attorney's Office for the Eastern District of Virginia, 61 car loans totaling more than $1.1 million were obtained through fraud (The Virginian-Pilot April 27) …

Space Coast announces intent to merge EEFCU

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MELBOURNE, Fla. (4/29/09)--Space Coast CU has announced its intent to merge with a credit union that's in conservatorship, Eastern Financial Florida CU (EFFCU). However, regulators aren't confirming or denying any merger application between the two. "We won't confirm or deny any merger application between Eastern Financial Florida CU and any other institution," said John McKechnie, National Credit Union Administration (NCUA) director of public and congressional affairs. "We will say that, like in any conservatorship, merger is an option, along with liquidation or eventual return of control to its members, and that NCUA is considering all options in the matter," McKechnie told News Now Monday. Space Coast told its members in a letter posted on its website that it had "signed an agreement that states the credit union's intention to merge." A letter of intent merely signals to membership and others that the credit union plans to apply for a merger. If the merger application is approved by members and regulators, the $1.6 billion asset Space Coast, headquartered in Melbourne, Fla., would remain as the surviving institution. Space Coast also said it has "entered into an agreement to function as interim management for EFFCU until the time of a merger." According to Space Coast President/CEO Doug Samuels, a merger would provide both credit unions with expanded service area and branches and ATMs along the I-95 corridor and beyond in Florida. EFFCU, headquartered in Miramar, is a $1.6 billion asset credit union with 22 branches and 193,000 members--the 64th largest credit union in the country. NCUA assumed control of the credit union in an effort to shore up its financial stability and protect its assets after the Florida Office of Financial Regulation placed EFFCU in conservatorship on April 24 (News Now April 27). At the time the conservatorship was announced, Credit Union National Association President/CEO Dan Mica noted the federal regulator's decision to step in and take over the daily operation "demonstrates that the regulatory system put in place to protect the members of our nation's credit unions really works." If a merger is approved, the consolidated credit union would have more than 350,000 members and more than $3 billion in assets. It would boast 60 branches and 150 ATM locations in the state. Space Coast said it would appoint Timothy M. Antonition, its executive vice president of retail operations, to act as integration team leader for the merger application and implementation process. News Now called EEFCU to confirm but had not heard back from the credit union at press time.