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Filed on September 1, 2009, published the first business day after.
- CUNA analyzes NCUA overdraft, electronic disclosures rule
- Barkdull appointment would enhance Fed's consumer council: CUNA
- SafeAmerica CU to take on liquidated Kaiser Lakeside’s members, assets
- Inside Washington
- Calif. DFI authorizes FI closures for fires, CU closed
- CUs, CUNA featured in Forbes, other major media
- Top 10 News Now stories for August
- Maine CUs’ youth fin ed efforts featured on radio
- Federation notes Mica's work in advocacy
- Calif./Nev. leagues, Hertz offer rental discounts
- Bruen, TUCOEMAS FCU honored for assisting small CUs
- TCUL announces state award recipients
- CU first in Ireland to offer real-time accounts
- CU System briefs
- Market News
- News of the Competition
- New credit rules aim to help young adults, college students
- CUs give Verafin high marks for BSA compliance
- Supervisory Committee/Audit Conference addresses hot topics
CUNA analyzes NCUA overdraft, electronic disclosures rule
WASHINGTON (9/2/09)--The Credit Union National Association (CUNA) has posted a final rule analysis on the recent addition by the National Credit Union Administration (NCUA) of rules that mirror the standards set forth by the Federal Reserve Board's recent additions to Regulation DD of the Truth in Savings Act.
The NCUA amendments are similar in content to existing Fed standards that impose requirements for overdraft protection plan fees and electronic disclosures. Specifically, the NCUA will require credit unions to disclose on periodic financial statements the amount charged for overdraft fees and returned item fees. Credit unions will also be required to provide account balance information through an automated system that discloses only the amount of funds available for withdrawal, without including the additional funds that would be available under an overdraft program.
CUNA reports that there are "no significant differences" between the NCUA and the Fed rules, barring the fact that the NCUA rules apply to credit unions.
The NCUA rules will become effective in January of 2010.
For more detailed analysis of the new rules, use the resource link.
Barkdull appointment would enhance Fed's consumer council: CUNA
WASHINGTON (9/2/09)--American Southwest CU President/CEO Brian Barkdull is the Credit Union National Association's (CUNA) choice to represent credit union interests in the Federal Reserve's Consumer Advisory Council (CAC) following his nomination earlier this week.
Barkdull, who has served as American Southwest CEO for 11 years and has participated in the credit union movement for a total of 21 years, also recently served on CUNA's Consumer Protection Subcommittee.
If appointed, Barkdull would join Idaho CU League President Alan Cameron on the CAC. While Cameron does currently serve on the CAC, CUNA believes that adding an additional credit union representative to the board would enhance the work of the CAC.
In comments accompanying the CUNA nomination letter, CUNA Chairman Kris Mecham said that Barkdull is a "well-respected financial institution leader" who is "extremely knowledgeable and articulate regarding consumer protection issues."
The Fed's Consumer Advocacy Council, which seeks to align the shared interests of consumers, communities, and the financial services industry and advise the Fed on the exercise of its responsibilities under consumer financial protection regulations, is composed of 30 members that serve three-year terms each. The Fed earlier this year requested nominations to the CAC, as 10 of the CAC's 30 members will be leaving the board at the end of the calendar year.
SafeAmerica CU to take on liquidated Kaiser Lakeside’s members, assets
ALEXANDRIA, Va. (9/2/09)--Oakland, Calif.-based Kaiser Lakeside CU early this week was acquired by SafeAmerica CU following a National Credit Union Administration (NCUA)-directed liquidation of the firm.
According to an NCUA release, Pleasanton, Calif.'s SafeAmerica will assume the $24 million in assets and 3,500 members left behind by Kaiser Lakeside's failure. SafeAmerica, which holds $315 million in assets from over 26,000 members, will now serve the former members of Kaiser Lakeside.
Seven federally insured credit unions have liquidated and a further seven have merged with assistance as of August of 2009, an NCUA staffer told News Now. A total of 84 individual banks have failed during this calendar year, according to information available on the Federal Deposit Insurance Corporation's Web site.
Inside Washington
- WASHINGTON (9/2/09)--Senate Banking Committee Chair Christopher Dodd (D-Conn.) is considering a bill that would consolidate oversight for financial institutions into a single regulator, taking away powers from existing agencies. The bill, which is still being drafted, also would create an interagency systemic risk council (American Banker Sept. 1). Dodd's committee hopes to pass the legislation this year. Dodd last brought up the idea of a single regulator during a hearing Aug. 4, but he wasn't clear how much he would push for it ...
- WASHINGTON (9/2/09)--Sen. Robert Menendez (D-N.J.) is pushing Federal Reserve Board Chairman Ben Bernanke and Treasury Secretary Timothy Geithner to focus on the commercial real estate markets. Tight credit and high vacancy rates are plaguing the markets, the senator said. The government needs to encourage commercial lending and kick-start the market for commercial mortgage-backed securities, Menendez wrote in a letter to Bernanke and Geithner Thursday (American Banker Sept. 1) ...
- WASHINGTON (9/2/09)--The Federal Deposit Insurance Corp. (FDIC) Monday released some tips for financial institutions as they comply with the Credit Card Accountability, Responsibility and Disclosures (CARD) Act. Most of the CARD Act's provisions take effect next year, but some took effect Aug. 20. The Summer 2009 issue of FDIC Consumer News provides information about changes in the rules and what they mean for the public ...
- WASHINGTON (9/2/09)--Federal Deposit Insurance Corp. (FDIC)-insured institutions lost $3.7 billion in the second quarter, according to the FDIC. Total assets of insured institutions declined by $238 billion, and the number of institutions on the FDIC's Problem List rose to 416 from 305 on March 31. Total reserves of the Deposit Insurance Fund stood at $42 billion. Loan losses, which totaled $66.9 billion, have had the greatest impact on industry earnings, according to FDIC Chairman Sheila Bair ...
- WASHINGTON (9/2/09)--Registration is open for the Go Direct campaign's two recognition programs for financial institutions--Go Direct Champions and Go Direct Community Ambassadors. The campaigns encourage consumers to sign up for direct deposit. Deadline for registration is Sept. 30 ...
Calif. DFI authorizes FI closures for fires, CU closed
LOS ANGELES, Calif. (9/2/09)--At least one California credit union closed because its area was evacuated during wildfires raging about 12 miles from Los Angeles, and the California Department of Financial Institutions (DFI) has authorized financial institutions to close for the emergency, if necessary.
CalTech Employees FCU based in La Canada Flintridge was closed, not because of damage but because it is near NASA's Jet Propulsion Laboratory (JPL), which closed as a precaution, the California Credit Union League told News Now.
The laboratory and Mt. Wilson Observatory were in danger from the so-called "Station" fire, but JPL's situation eased on Monday. The fire burning in the Angeles National Forest is near homes on the north side of La Canada Flintridge. The fire was within one-quarter to one-eighth of a mile from JPL on Saturday but retreated.
The 50,000-acre fire doubled in size overnight Monday, charring another 50,000 acres. Tuesday morning Bloomberg.com said conditions are favorable for the fire to spread. The Station fire, which began on Aug. 26, is the largest of eight blazes burning in the state. It was about 5% contained Monday and estimates were that the blaze won't be under control until Sept. 8. Smoke from the fire is visible from the city.
The areas evacuated include: La Canada Flintridge, Acton, Altadena, and La Crescenta. The latter three areas have no credit union branches.
The state's DFI Monday authorized financial institutions located in areas declared to be a state of emergency by the governor to close any or all offices affected by the fires.
Commissioner of Financial Institutions William S. Haraf authorized the closures in these counties: Los Angeles, Mariposa, Monterey, Placer and Yuba. He noted that consumers can have access to their funds through their financial institutions' ATM network, Internet or telephone banking.
He urged financial institutions to review their lending policies in order to grant appropriate latitude to existing member/customers affected by the fire and to expedite the extension of new credit to finance cleanup or building.
Use the link to access a photo of the Station fire.
CUs, CUNA featured in Forbes, other major media
WASHINGTON (9/2/09)--Credit unions and the Credit Union National Association (CUNA) were featured prominently in national media such as The Wall Street Journal, CNBC, and Forbes.com last week.
CUNA served as a key a resource for a positive student lending story in Forbes.com (Aug.26). Entitled "When a Credit Union Beats a Bank," the story advised college students that "it pays to check out the university's not-for-profit credit union."
The story spotlighted several credit unions with university ties--including Princeton FCU, Michigan State University FCU, and the University of Nebraska FCU--as well as the CO-OP Network's surcharge free ATMs. William Jordan of The Sentinel Group told the publication that a few years of loyalty to a national bank does not generate the same benefits as membership in a credit union. He noted credit unions' better rates.
Forbes also included a testimonial from Megan Collins, the first student at the University of Nebraska to open an account at the University of Nebraska FCU.
Other media hits last week included:
- CUNA Chief Economist Bill Hampel was interviewed Thursday on CNBC's "Closing Bell," discussing whether the economy is really recovering and whether the government stimulus funds are playing a role in the signs of recovery so far. Hampel also was interviewed by Reuters about consumer spending (News Now Sept. 1).
- Mary Dunn, CUNA deputy general counsel, was featured in The Wall Street Journal (Aug. 27), discussing the temporarily increase in deposit insurance to $250,000 per person, per account, which some believe may become a permanent change. When consumers are accustomed to a higher level of government protection, "it will be tough to roll it back," she said. The article notes credit unions can help consumers make their cash work hardest, and gave as an example Baton Rouge, La.-based Pelican State CU's eXtra Bonus Checking account, which pays 5.25%.
- Credit unions as payday lending alternatives was the subject of three op-ed pieces by Brett Thompson, president/CEO of the Wisconsin Credit Union League. His articles all appeared Sunday in Wisconsin newspapers--the Capital Times in Madison.; The Northwestern in Oshkosh; and the Milwaukee Journal Sentinel.
Top 10 News Now stories for August
MADISON, Wis. (9/2/09)--Stories about the Credit Card Accountability, Responsibility and Disclosure (CARD) Act, which went into effect last month, dominated five of the 10 top News Now stories for August.
The Credit CARD Act sets rules for card companies including those that arbitrarily change interest rates and terms on cards with existing balances.
A story about Credit Union National Association (CUNA) President/CEO Dan Mica stepping down from his post in 2011 was the 12th most read story of August.
Here are the top 10 most requested News Now stories during July. Use the links to read the stories online.
10. Letter to editor questions CU/bank merger
AUGUSTA, Maine (8/11/09)--A letter to the editor appearing in the Saturday Kennebec Journal questioned Kennebec Valley FCU's proposed merger with Kennebec Savings Bank.
9. Dodd urges Fed to extend CARD Act deadline for CUs
WASHINGTON (8/13/09)--Working closely with the Connecticut Credit Union League, Senate Banking Committee Chairman Chris Dodd (D-Conn.) yesterday urged the Federal Reserve Board to provide relief to credit unions regarding the 21-day rule under the CARD Act as it applies to open-end plans other than credit cards.
8. Eight former CU employees under prohibition orders
ALEXANDRIA, Va. (8/13/09)--The National Credit Union Administration (NCUA) has issued orders prohibiting eight individuals from participating in the business of any federally insured financial institution.
7. Fed to CUNA: CUs have some leeway on 21-day rule
WASHINGTON (8/19/09)--The Federal Reserve Board on Tuesday reiterated that credit unions will be allowed to be technically "inconsistent" with the 21-day requirement under the new Credit Accountability, Responsibility and Disclosure (CARD) Act for a "short period of time."
6. CFA asks Fed to extend CUs' open-end credit deadline
WASHINGTON (8/12/09)--The Consumer Federation of America Tuesday has sent letters asking that credit unions be granted more time to comply with the 21-day Credit CARD Act notice requirement for open-end plans other than credit cards.
5. CUNA, CUs rebut USA TODAY item
NEW YORK (8/4/09)--CUNA is providing resources so leagues and credit unions can answer questions that may be prompted by a front-page article in Monday's USA TODAY that was critical of some credit unions' payday loan alternatives. The article cited the loans of a single credit union in Nevada.
4. CUNA doc helps CUs cope with CARD Act regs
WASHINGTON (8/6/09)--CUNA is working for legislative or regulatory relief for the by-now-well-known 21-day notice provisions for open-end credit plans, other than credit cards set, set to take effect Aug. 20. Meanwhile, however, CUNA has created a compendium of information to help credit unions tackle the "horrendous" compliance challenges that loom ahead.
3. IRS issues a new UBIT opinion
WASHINGTON (8/5/09)--The Internal Revenue Service has released a new Technical Advice Memorandum stating that income derived by state-chartered credit unions from shared-branching arrangements, management services to other credit unions, certain CUSOs, and sales of financial management services and certain insurance products are subject to unrelated business income tax.
2. 21-day rule: CUNA urges CUs ‘document everything'
WASHINGTON (8/20/09)--Starting today, periodic statements sent to members on their open-end loans must be provided at least 21 days before the payment due date in order for a credit union to charge a late fee, report the account as delinquent to credit bureaus, or impose a penalty interest rate.
1. Credit CARD Act: CUNA addresses CUs' FAQs
WASHINGTON (8/18/09)--CUNA has prepared a document to assist state leagues and credit unions with credit unions' questions regarding CARD Act provisions--especially on the 21-day periodic statements provision.
Maine CUs’ youth fin ed efforts featured on radio
WESTBROOK, Maine (9/2/09)--The Maine Credit Union League participated in radio interviews to discuss the teaching and learning opportunities that back-to-school shopping can offer to help children better understand personal finance and money management.
Jon Paradise, league governmental and public affairs manager, told parents how to incorporate simple financial skills and topics into a back-to-school shopping trip. In separate interviews that aired recently on the morning shows of two of the top stations in the Augusta/Waterville radio markets, he discussed setting a budget, taking advantage of coupons and sales, and getting the most value and return on spending.
"Helping children of all ages better understand money does not have to only happen in schools but can be incorporated in simple, everyday events and activities," Paradise said. "Making kids a part of shopping is an easy way to introduce and strengthen fiscal responsibility concepts in a way in which it can be fun and educational."
The interviews also referenced the free resources that the league and Maine's credit unions offer for youth financial education, including fitness fairs held throughout the state, in-school presentations and a growing clearinghouse of resources and ideas on the league's Youth Financial Services link on the league's website.
Jon James, co-host of the Moose Morning Show on 92 MOOSE radio in Augusta, one of the stations that aired the interview, applauded Maine credit unions for "taking the initiative to look for ways in which kids can be exposed to financial education by bringing attention to tasks and activities that parents can talk and work with their children on.
"Credit unions are doing a great service by bringing awareness to this issue and offering ways in which we can engage our children and help them become financially responsible and successful adults," he added. "As a parent, I really appreciate that."
Federation notes Mica's work in advocacy
NEW YORK (9/2/09)--The National Federation of Community Development Credit Unions Monday commented on the strong working relationship it has had with Credit Union National Association (CUNA) President/CEO Dan Mica, who announced he would step down from the position in January 2011.
"It's been a pleasure for the federation to work with Dan Mica and his dedicated team, especially Richard McBride, for more than a decade," said federation President/CEO Cliff Rosenthal.
"In the months before he actually departs, we expect to have an opportunity to express our appreciation and respect more extensively, but for now, we look forward to Dan's continued and vigorous advocacy on behalf of all credit unions at a critical time in our shared history," Rosenthal added.
Others commenting included Missouri Credit Union Association President/CEO Rosie Holub and Pennsylvania Credit Union Association President/CEO Jim McCormack.
Mica "has been a tremendous asset to the credit union movement, and his leadership will be missed. CUNA, under Dan's leadership, has become an exemplary trade association and one of the most respected and influential organizations in our nation's capital," said Holub.
"Dan has done a great job and led us in a new direction. He will be missed," said McCormack.
McBride, who works closely with and was brought to CUNA by Mica, will also step down.
Mica, a former Democratic congressman who represented Florida from 1979 to 1989, has been one of the longest-serving CEOs in CUNA's history.
Calif./Nev. leagues, Hertz offer rental discounts
ONTARIO, Calif. (9/2/09)--California and Nevada Credit Union Leagues staff and member credit unions can receive discounts on rental cars through a partnership with the leagues and Hertz Corp.
Staff and credit union members can receive discounts between 5% and 15%, depending on the vehicle, by using a discount program code--available on the leagues' website-- when they rent cars. The leagues are developing marketing materials for credit unions to advertise the discounts to their members.
Hertz is a rental car company with more than 8,100 locations nationwide and in 148 countries.
Bruen, TUCOEMAS FCU honored for assisting small CUs
RANCHO CUCAMONGA, Calif. (9/2/09)--The California Credit Union League's 2009 Kim Bannan Eternal Flame Awards went to Eric Bruen, CEO of Desert Valleys FCU in Ridgecrest, and to TUCOEMAS FCU, Visalia.
The awards recognize contributions to the success and future of Shapiro Group credit unions through the cooperative spirit of "People Helping People." The Shapiro Group is a league group providing assistance to small credit unions.
Kim Bannan was the league's former vice president of credit union development and research and information.
Bruen, this year's recipient in the individual category, was recognized for his assistance to Shapiro Group credit unions in understanding net worth restoration plans and management of prompt corrective action concerns.
One Shapiro Group credit union he helped was Palm Springs FCU--formerly Palm Springs City Employees FCU. Bruen helped the credit union--among other things--file its quarterly National Credit Union Administration 5300 reports, with its allowance for loan loss calculations. He also assisted and with issues related to the National Credit Union Share Insurance Fund.
Bruen has served on the league board of directors and various league committees, including the Shapiro Group Advisory Committee.
The award recipient in the credit union category, TUCOEMAS FCU, was honored because of assistance it provided to El Futuro CU, Porterville, in handling a Bank Secrecy Act (BSA) annual audit. El Futuro was unable to hire an accountant to complete the audit this year, so TUCOEMAS' certified BSA officer and certified assistant BSA officers visited El Futuro and completed the audit and tested transactions.
Also, TUCOEMAS has agreed to help El Futuro with BSA staff training and using online league resources.
Both will be honored during the California and Nevada Credit Union Leagues' Annual Meeting and Convention Nov. 16-18 in Las Vegas.
TCUL announces state award recipients
FARMERS BRANCH, Texas (9/2/09)--The Texas Credit Union League (TCUL) has announced the Dora Maxwell, Louise Herring and Desjardins award winners.
The awards are sponsored by the league and the Credit Union National Association.
The Austin Chapter of Credit Unions received a first place award in the Dora Maxwell Social Responsibility Award program for its Credit Unions for Kids project. The credit union raised $344,985 for the Children's Medical Foundation for 2008-2009.
Four Texas credit unions also received the award:
- Coastal Community FCU, Galveston;
- Coastal Community and Teachers FCU, Corpus Christi;
- DATCU, Denton; and
- Mobiloil FCU, Beaumont.
Coastal Community was recognized for its efforts to help members during Hurricane Ike last year.
Mobiloil FCU was noted for participating in a forestry project with elementary school students.
Coastal Community and Teachers was honored because of its "Steppin' Up and Out for Kids" fundraiser, while DATCU was recognized for its Apple Tree project to help students from low-income families receive school supplies, clothes and shoes.
DATCU also received first place in the Louise Herring Award for Philosophy in Action for its financial literacy efforts.
A+ FCU in Austin is the Desjardins Youth Financial Education Award recipient for its efforts to teach youth about money and help them develop strong savings habits, TCUL said.
CU first in Ireland to offer real-time accounts
NEWRY, Ire. (9/2/09)--Newry CU is the first credit union in Ireland to offer a "current" or real-time account service for its members.
The new service means members will have access to direct debits, standing orders, ATM and Visa access at no cost to them. Members will be able to access their funds around the clock both locally and globally and pay for online and in-store purchases (Newry Democrat Aug. 4).
Newry CU Manager Brendan Jackson said the current account is part of the credit union's ongoing aim to tackle financial exclusion.
CU System briefs
- NAPERVILLE, Ill. (9/2/09)--A food drive conducted by the Illinois Credit Union League collected 405 pounds of food for the hungry served by the Northern Illinois Food Bank (NIFB), said the league. "Hunger never takes a vacation and we received a great response by our staff to this first-time event," said Dan Plauda, ICUL president/chief executive officer. NIFB--a member of Feeding America (formerly America's Second Harvest, the Nation's Food Bank Network)--distributed more than 22.5 million pounds of food in 2008 to more than 520 sites in 13 northern Illinois counties ...
- CHICAGO (9/2/09)--Alliant CU Foundation announced its official launch of operations as a 501c3 not-for-profit organization by
presenting a $35,000 grant to Operation HOPE, a national organization promoting financial literacy and economic opportunity. The foundation was established through a $4 million grant from Chicago-based Alliant CU to promote economic empowerment and self sufficiency of people in the communities where Alliant CU members and employees live and work. Pictured at the check presentation are, from left: Patricia Robles, program manager, Operation HOPE Chicago office; John HOPE Bryant, Operation HOPE founder and chairman; David W. Mooney, president/CEO of Alliant CU and foundation president; Wayne Rosenwinkel, foundation vice president; and Mona Leung, Alliant CU senior vice president/chief financial officer. (Photo provided by Alliant CU) ...
Click for larger view - FORT WORTH, Texas (9/2/09)--American Airlines FCU (AA CU) donated $40,000 Friday to the United Way
of Tarrant County after raising the funds through the 13th Annual AA CU Golf Tournament May 15 in Grapevine, Texas, and through several fund-raising activities throughout the year. This year's tournament was sponsored by several credit union partners: CO-OP Financial Services; GlobalVision Systems Inc.; Fiserv; PSCU Financial Services Inc.; DMN3; BIT; Diebold; Intercontinental Warranty Service Inc.; Mercedez Benz USA; Manheim; Prime Alliance Solutions Inc.; Providence Title; and others. Here, Tim McKinney, left, president/CEO of United Way of Tarrant County, receives the check from AA CU President/CEO Angie Owens and AA CU eMarketing Manager Pedro Noda. (Photo provided by American Airlines FCU) ...
Click for larger view - HONOLULU 9/2/09)--Aloha Pacific FCU, Honolulu, announced Monday its second merger of the year, this time with First Insurance FCU (FI FCU), a $2.3 million asset credit union based in Honolulu. Aloha Pacific has more than $575 million in assets. The National Credit Union Administration has approved the deal, Aloha Pacific said. FI FCU was established in 1951 for employees of the insurance company. The combined credit union will have $578 million in assets, 31,000 members, 130 employees, seven branches and 45 ATM locations. Aloha Pacific intends to keep all of First Insurance's employees and a branch in the First Insurance building. Last December, Aloha Pacific merged with Inter-Island FCU (Pacific Business News Aug. 31) ...
- MANITOWOC, Wis. (9/2/09)--Dennis Lombard retired Friday from the position of president of UnitedOne CU, Manitowoc, after 34 years in the position. He is being succeeded by Kim Rooney, former vice president at the $178 million asset credit union. During Lombard's tenure, the credit union's assets grew from $3.1 million to $178 million in assets with 25,000 members in Manitowoc, Kewaunee and Sheboygan counties (htrnews.com Aug. 28) ...
- APPLETON, Wis. (9/2/09)--A 17-year-old former employee of the Green Bay branch of Appleton-based Fox Community CU was charged with robbing the credit union Thursday morning. Julian Rubio is charged with using wearing a bandanna, forcing his way into the credit union when employees opened for business and threatening them with a nine-inch knife. The robber removed money from the vault and escaped but was caught a short time later after employees said they recognized his voice. He had worked at the credit union as a co-op student from a local high school. The money, knife and clothing were recovered after Rubio led officers to a field where the items were buried (Green Bay Press Gazette Aug. 29 and wbay.com Aug. 28) ...
Market News
MADISON, Wis. (9/2/09)
- For the first time since 2001, contract activity for pending home sales has increased for six consecutive months, according to the National Association of Realtors (NAR). The Pending Home Sales Index--which began in 2001--is a forward-looking indicator. Based on contracts signed in July, the index increased 3.2% to 97.6 from a 94.6 reading in June, and is 12% higher than its 87.1 reading in July 2008. The index is at it highest level since it registered 100.7 in June 2007. The index indicates that housing momentum is on the rise, according to Lawrence Yun, NAR chief economist. "The recovery is broad-based across many parts of the country," he said. "Housing affordability has been at record highs this year with the added stimulus of a first-time buyer tax credit." For Pending Home Sales on a Record Roll, use the link ...
- Spending on U.S. construction dropped slightly in July, the Commerce Department said Tuesday. The best tally for home building in the past 10 months was mitigated by weakness in government projects and nonresidential building, the department said. Following a 0.1% increase in June, July construction spending slipped 0.2%--more than economists anticipated. The drop-off in July happened despite a 2.3% increase in construction for homes and apartments for the month. July experienced the most construction since September 2008 and is a sign that the lengthy U.S. housing slump may be ending, analysts said (The New York Times Sept. 1) ...
- The Institute for Supply Management's (ISM) manufacturing index rose four points to 52.9 in August, after decreasing for 18 straight months. The index is consistent with ISM's forecast of a return of growth in manufacturing and the broader economy in the third quarter. The increase, which is higher than the 50.5 forecast, places the index 10.3 points above its second-quarter average and above the growth threshold of 50 for the first time since January 2008. The August results support future growth as the economy starts to come out of recession, analysts predicted. The index--based on a survey of members of ISM--a trade group of purchasing executives, based in Tempe, Ariz.--included new orders, production, employment, inventories, prices and other factors (Moody's Economy.com and The New York Times Sept. 1) ...
- When a new law designed to limit the fees and penalties that credit card companies can levy on consumers begins later this academic year, college students will not be quite as deluged by credit-card marketers, analysts predicted. The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 will place limits on how credit card companies market their products to anyone under the age of 21. The goal is to lessen the credit card debt that many college students have when they graduate, analysts said. Average credit card debt among all U.S. undergraduate college students was $3,173 for 2008--up from $1,879 in 1998, according to a 2009 study conducted by student loan provider Sallie Mae. The study is titled "How Undergraduate Students Use Credit Cards" (SmartMoney.com Sept. 1) ...
News of the Competition
MADISON, Wis. (9/2/09)
- So far in 2009, only three mutual thrifts have been able to go public. However, the conversions are picking up with two big deals in the pipeline. Northwest Bancorp Inc., a $7 billion asset, Warren, Pa.-based bank, and OmniAmerican Bank, a $1.1 billion asset Fort Worth-based institution have announced their plans to sell stock. The market for mutual conversions and bank and thrift stocks has been rough, analysts said. During the past year, at least four thrifts canceled their conversion deals due to a lack of investor interest. By this time last year, there had been seven conversion offerings, including some first and second steps (American Banker Sept. 1) ...
- The Council of Better Business Bureau's national advertising division has reprimanded U.S. Bank for ads its U.S. Bancorp unit ran in competition with American Express Co. The ads hoped to attract credit card customers who found themselves without reward programs after an airline merger. Both card companies offer cards that feature airline-miles rewards programs to customers of Northwest Airlines--which merged with Delta Airlines. U.S Bank's ads attempted to make its card look better than AmEx's after presenting comparisons between the two, analysts said. After reviewing the U.S. Bank ads, the council did not find their claims valid, and directed the bank to never again make the claims used in the ads. The ad campaign is old and no longer in use, and U.S. Bank will take "into consideration" the council's directive, said a bank spokesman (American Banker Sept. 1) ...
New credit rules aim to help young adults, college students
NEW YORK (9/2/09)--Young adults stand to be the group most affected by the Credit Card Accountability and Disclosure (CARD) Act of 2009, and it's worth the effort to fully understand the changes (forbes.com Aug. 4).
Although the majority of the CARD Act won't go into effect until Feb. 22, 2010, five sections of the Act are dedicated to the protection of young adults:
- Credit usage. Anyone younger than age 21 must be an authorized user on the parent's account, or show proof indicating an independent means of repaying card debts, or have an adult co-signer.
- Special offers. Creditors may not send prescreened offers to consumers younger than age 21.
- Free gifts. Card companies may not offer free gifts for the completion of an application on or near a college campus and at college-sponsored activities or events.
- Privacy protection. Colleges, universities and alumni associations must disclose details of contracts they sign that allow credit card marketers access to student and alumni contact info.
- Full disclosure. Card issuers must file annual reports with the Federal Reserve Board listing all business, marketing and promotional deals with schools. These reports must detail the terms and conditions, list schools by name, and identify how much the issuer is paying the school.
- Education sessions. A "sense of Congress" provision--not treated as law, but rather a suggestion from lawmakers--recommends that colleges offer credit card and debt education sessions during new-student orientation.
Some provisions became effective Aug. 20. Creditors now must deliver bills 21 days in advance of the due date and provide 45 days notice when changes are made to consumers' credit card agreements (chicagotribune.com Aug. 20).
For more information, read "CARD Act Kicks In, What Will Happen?" in Money Mix: Launch Your Life.
CUs give Verafin high marks for BSA compliance
MADISON, Wis. (9/2/09)--Roughly 90% of Verafin's credit union clients would recommend the CUNA Strategic Service provider's anti-money laundering (AML) and fraud detection solutions to other credit unions, according to a survey.
Verafin, which offers credit unions AML, Bank Secrecy Act (BSA) and fraud detection programs, recently conducted a satisfaction survey of 178 clients. Credit unions said they were "very likely" or "likely" to recommend Verafin. Credit unions cited Verafin's functionality, interface with core systems, customer service and support as top reasons.
Credit unions also said Verafin's support staff and trainers are easy to understand, and Verafin's solutions are user-friendly.
"BSA account monitoring was not really possible under our old system," said Judith Murdoch, associate vice president of compliance and security at University of Illinois Employees CU, Champaign, Ill. "We were building reports and spreadsheets to try and see what our members were doing, but we had no way to do so efficiently. Verafin allows us to see the complete picture for each member and allows us to keep our eye on those members who reveal inconsistencies."
University of Illinois Employees CU has $197 million in assets.
Supervisory Committee/Audit Conference addresses hot topics
MADISON, Wis. (9/2/09)--The CUNA Supervisory Committee and Internal Audit Conference, scheduled for Dec. 6-9 in Las Vegas, will cover hot topics including mortgage market fraud, compliance issues and identity theft, says the Credit Union National Association (CUNA).
At the conference, E. Michael Thomas, executive in charge of Crowe Horwath LLP, will present "Mortgage Market Fraud and Its New Face in Light of the Current Economic Conditions." He will discuss mortgage loan fraud statistics, loan document misrepresentation and mortgage-loan fraud schemes. Crowe Horwath is an accounting and management consulting firm.
Eileen Iles, certified public accountant (CPA) with Crowe Horwath, will host a red flags workshop to explain how credit unions can handle the complications of identity theft prevention programs, red flag rules and the Fair and Accurate Credit Transactions Act.
Credit union representatives also can attend sessions focusing on data protection and compliance. Torpey White, CPA, will present "Is Data Leaking Out of Your Organization?"
Woody Hodgdon, a credit union compliance expert, will discuss compliance problems in "Current Compliance Issues: A Rundown of the Highest Priority Compliance Issues of the Year."
A pre-conference workshop Dec. 5-6 will focus on the fundamentals of being a supervisory committee team member.
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