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Filed on September 25, 2009–September 27, 2009, published the first business day after.
- CDFI funding announced, Matz urges participation
- Nance removed as U.S. Central conservator manager
- NCUA names Hunt as corporate CU director
- Inside Washington
- Corporate: Uncertainty sharpens rationale for ALM
- Blanchard named to 2010 Coop Hall of Fame
- One dead, three arrested after CU robbery
- Scammed, Spammed, Stung webinar set for Oct. 21
- Nine named to WOCCU International Exec Volunteer Corps
- ATM skimmers steal funds from 90 people
- Environment a focus for N.C. CUs
- California league to honor six CU leaders
- Indiana awards note service, fin lit, philosophy
- CU System briefs
- Market News
- News of the Competition
- IRS extends deadline to roll over 2009 RMDs
- Northwest FCU revises collection strategy
- Products and Services briefs
CDFI funding announced, Matz urges participation
WASHINGTON (9/28/09)--The U.S. Department of the Treasury this week announced that it will make a total of $113 million in funding available through its Community Development Financial Institutions Fund (CDFI Fund) during the upcoming year.
The Treasury's CDFI Fund helps locally based financial institutions offer small business, consumer and home loans in communities and populations that lack access to affordable credit.
The fiscal 2010 CDFI funding round is the 15th since the program's inception, and was announced 15 years to the day that the CDFI Fund was created by the signing of H.R. 3474, the Riegle Community Development and Regulatory Improvement Act of 1994.
In a statement accompanying the release, CDFI Fund Director Donna Gambrell said that she is "delighted to celebrate the CDFI Fund's 15th Anniversary" by announcing the "largest-ever annually appropriated funding round" of the "cornerstone CDFI Program."
National Credit Union Administration (NCUA) Chairman Debbie Matz in a separate release encouraged credit unions to use the CDFI program as a means to "expand service to low-income consumers."
Consumers across the income spectrum benefit when credit union service is made more accessible, and CDFI has been a reliable partner for many credit unions in making this a reality," Matz added.
According to the NCUA, credit unions that are certified to take part in the CDFI program may apply for as much as $2 million in funding that will help maintain their credit union's presence in the community.
To see the CDFI Fund release, use the resource link.
Nance removed as U.S. Central conservator manager
ALEXANDRIA, Va. (9/28/09)--U.S. Central Senior Vice President and General Counsel Francois Henriquez will step in as interim CEO after the U.S. Central Conservatorship Advisory Board voted to remove James Nance from his position as CEO, the National Credit Union Administration (NCUA) reported on Friday.
Henriquez will oversee the activities of U.S. Central as the corporate credit union searches for a successor to Nance.
In a statement, the NCUA said that while Nance "provided critical management skills" during U.S. Central's conservatorship, the decision to remove Nance from his position "was taken due to divergent views about how to move U.S. Central forward."
In financial statements for the 2008 fiscal year released earlier this month, U.S. Central's auditors reported that the corporate credit union incurred an OTTI charge of $4.9 billion on its investments as of Dec. 31, 2008.
To view an NCUA Frequently Asked Questions (FAQ) regarding the U.S. Central financial statement, use the resource link.
NCUA names Hunt as corporate CU director
ALEXANDRIA, Va. (9/28/09)--The National Credit Union Administration (NCUA) on Friday named Scott Hunt as its Director of the Office of Corporate Credit Unions.
In comments accompanying the announcement, NCUA Chairman Debbie Matz said that Hunt's "talent, knowledge and dedication" to the issues currently faced by corporate credit unions "is well-known and has produced real results." Hunt's "background and skill set" also "make him uniquely qualified for this crucial position," she added.
Hunt most recently served as acting special assistant and, before that, as acting director of the corporate office. Hunt, who joined the NCUA in 1989, has also served in several other roles, including as an examiner and as associate regional director and senior investment officer in the NCUA's Office of Capital Markets.
Inside Washington
- WASHINGTON (9/28/09)--Credit quality significantly declined for loan commitments of $20 million or more held by multiple federally supervised financial institutions, according to the 2009 Shared National Credit (SNC) Review. Nonbanks held 47% of classified assets in the portfolio. Criticized assets--those seen as substandard--reached $642 billion, up from $373 billion last year. Classified assets increased to $447 billion from $163 billion. Special mention assets--those that exhibit potential weakness--declined to $195 billion from $210 billion. The severity of criticism increased with the volume of Shared National Credits classified as "doubtful" and "loss rising" to $110 billion, up from $8 billion in 2008 ...
- WASHINGTON (9/28/09)--At a hearing last week, lawmakers urged the Treasury to let the Troubled Asset Relief Program (TARP) expire at year-end, but the Obama administration did not appear to give in. Treasury can extend TARP until Oct. 3, 2010. Several lawmakers said the economy has improved, so the program should end. Some Americans think TARP is becoming status quo, which leads to more government involvement in the marketplace, said Sen. David Vitter (R-La.). Senate Banking Committee Chairman Christopher Dodd said TARP can't be permanent, but did not indicate if the program should be extended. Conversely, House Financial Services Committee Chairman Barney Frank (D-Mass.) told reporters Wednesday that TARP should be extended. Several banks have repaid their capital infusions from TARP back to the Treasury and the Treasury department expects more to be repaid within the next year and a half ...
- WASHINGTON (9/28/09)--Reps. Barney Frank (D-Mass.) and Carolyn Maloney (D-N.Y.) introduced a bill Thursday to enact parts of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act more quickly. The credit card industry has balked at the idea. Some of the CARD Act's provisions gone into effect, with other provisions to be effective Feb. 22. Maloney and Frank's bill would push that date to Dec. 1. Maloney and Frank criticized credit card issuers at a press conference Thursday for claiming that they needed until next spring to prepare for CARD Act rules. Card issuers are using the time to maximize profits by raising rates to make money off of consumers before the new rules are effective, the two legislators said. Frank and other policymakers have discussed moving ahead with the CARD Act compliance date. Frank said he thought the House could pass a bill on the matter within the next few weeks ...
- WASHINGTON (9/28/09)--Rep. Paul Kanjorski (D-Pa.), chairman of the House Financial Services subcommittee on capital markets, insurance, and government sponsored enterprises, announced that he will conduct a hearing to examine reforming the regulation of credit rating agencies. The hearing is scheduled for Sept. 30 at 2 p.m. ET ...
Corporate: Uncertainty sharpens rationale for ALM
DALLAS (9/28/09)--Rampant change is reason enough for credit unions to renew their interest in managing liquidity and interest rate risks, says Southwest Corporate. It lists five reasons a sound asset/liability management (ALM) process makes sense in today's economy:
- ALM is valuable for more than just compliance reasons. Credit unions historically use ALM to assess balance sheet risk, but many haven't incorporated overall risk exposure into their strategic decision-making. They need to begin evaluating the results of their risk analysis as it relates to the credit union's long-term strategies and goals so they can be adept at adjusting near-term decisions, said the corporate. Information gleaned from ALM reports enable credit unions to manage interest-rate risk, assists in strategic planning and budgeting, and helps credit unions respond to member deposit behaviors, said Mark DeBree, Southwest Corporate Investment Services' manager of ALM analysis, in an article on the corporate's website.
- Credit union balance sheets are becoming more complex as mortgage portfolios grow. Credit unions are making fewer vehicle loans and more mortgage loans. In 2008, mortgage loans represented 38% of credit unions' total loan portfolio, a 6% increase from 2005. Vehicle loans for 2008 totaled 21%, or 4% less than in 2005. The growth in mortgages brings concerns about their longer average lives and durations, said DeBree. The average life of a vehicle loan is 2 1/2 years, he said. Mortgages also are more exposed to extension and contraction risk because of the embedded prepayment option. And hybrid mortgages have added complexity to the portfolio.
- Regulators are pressuring financial institutions to understand and accurately measure interest-rate risk. The National Credit Union Administration has expanded the ALM portion of the exam and contends that credit unions familiar with their tools and the information those tools can provide are better prepared when adjustments are called for from economic events, said Southwest Corporate.
- Uncertainty prevails in the market. Interest rates are near historically low levels and the inflation outlook isn't clear. Mortgage delinquencies and foreclosures are rising, and financial institutions are finding it difficult to operate profitably. DeBree noted that given the Federal Reserve's actions Wednesday--plus the addition of a second stimulus package and possible extension of homebuyers' assistance to all homebuyers, "it is not likely we are headed toward a recovery any time soon." Addressing risks embedded in credit union balance sheets is more critical than ever, said the corporate.
- The potential for rising interest rates is high. An economy in recovery means interest rates likely will rise. With stimulus spending and restructuring of consumer and corporate balance sheets, the recovery will see rapidly increasing interest rates. "A quick rise in rates can be tough on financial institutions," said DeBree. "Upward pressure on cost of funds eats into the already narrow net interest margin that has resulted from the fixed-rate loans on the books at recent low rates."
For more detail, use the link to Southwest Corporate's website.
Blanchard named to 2010 Coop Hall of Fame
WASHINGTON (9/28/09)--Credit union pioneer Larry Blanchard was selected for spring induction into the Cooperative Hall of Fame, the Cooperative Development Foundation announced.
He will be recognized at the annual Hall of Fame Dinner and Induction Ceremony at Washington's National Press Club May 5.
Blanchard's nomination was recommended by the Credit Union National Association (CUNA) Cooperative Alliances Committee with the approval of the CUNA board. He was head of communications in CUNA's Washington, D.C., office during the late 1980s and early 1990s before going to CUNA Mutual Group.
Blanchard retired from CUNA Mutual in December 2008 as senior vice president for special projects. He now serves as a consultant for corporate and legislative affairs at CUNA Mutual.
Blanchard was a shaper of today's credit union landscape, the foundation said. He was an employee and organizer of credit unions who worked for every major credit union organization in the U.S. Blanchard also was a credit union development educator who helped guide the evolution of the Campus Credit Union Council.
Blanchard was a leader of Operation Grassroots--an effort to maintain regulatory independence for credit unions.
He was one of four people selected. The others are Glenn English (rural utilities), Werqu Mekasha (agriculture) and David Thompson (general).
One dead, three arrested after CU robbery
TAMPA, Fla. (9/28/09)--Three robbery suspects were apprehended by police and one person was found dead, an apparent suicide, in the aftermath of a Thursday robbery of Grow Financial CU, in Tampa, Fla.
Officers surrounded a Tampa home looking for suspects after receiving a tip that the suspects were driving a Chevrolet Yukon and following the car to a Tampa home (abcactionnews.com Sept. 25) .
Once at the home, police caught one man who ran down the street, while two others ran into the house. The two suspects turned themselves in when a SWAT team arrived. A third man fired several shots at officers during a standoff.
The standoff ended when members of the police tactical response team broke into the house after firing tear gas inside. The third man was found dead by police. He took his own life, according to the medical examiner. He had a bullet wound to his head (St. Petersburg Times Sept. 24).
The 12:24 p.m. robbery prompted lockdowns at area schools while police searched for the robbers.
The incident may be related to a string of robberies by perpetrators who have worn strange disguises--most notably sticking up a pawn shop while wearing beauty shop sinks over their heads, police said.
Scammed, Spammed, Stung webinar set for Oct. 21
MADISON, Wis. (9/28/09)--As part of National Protect Your Identity Week (PYIW) Oct. 17-24, the Credit Union National Association (CUNA) will offer a webinar aimed at helping credit unions protect themselves and their members from identity theft fraud.
The webinar, Scammed, Spammed and Stung: Protect Your Credit Union and Your Members from ID Theft Fraud, is scheduled for Wednesday, Oct. 21, at 1-2:30 p.m. CDT (2-3:30 p.m. EDT, 12-1:30 p.m. MDT, and 11 a.m.-12:30 p.m. PDT). The webinar is sponsored by CUNA Strategic Services, CUNA, and three strategic alliance partners.
Speakers will include:
- Kevin Prince, chief technology officers, Perimeter eSecurity;
- Lynn Scheck, senior vice president of business development for Intersections, an identity theft prevention services;
- Jamie King, president and co-founder of Verafin, a software company specializing in money laundering and fraud detection solutions; and
- Janet Garkey, manager of group education at CUNA's Center for Personal Finance.
According to the National Foundation for Credit Counseling (NFCC), a sponsor of the PYIW, 45% of U.S. adults--roughly 101 million people--feel at most risk for identity theft when they make a purchase with a credit card that requires the card to be temporarily taken out of their sight.
Only 21% of consumers said they were concerned about falling victim to ID theft when using their card in person.
In 2007, roughly 8.4 million Americans reported ID theft. In 2008, the number increased 19% to 10 million victims, said Susan C. Keating, president/CEO of NFCC. Joining NFCC as full sponsor of PYIW is the Council of Better Business Bureaus.
CUNA is one of the supporting PYIW coalition members.
The webinar costs $99. For more information, use the link.
Nine named to WOCCU International Exec Volunteer Corps
MADISON, Wis. (9/28/09)--World Council of Credit Unions (WOCCU) has welcomed nine credit union professionals to its International Executive Volunteer Corps. (IEVC). Established in 1995, the corps recognizes inductees for their years of international service to WOCCU.
The 2009 inductees are:
- Mike Delker, vice president of credit union relations, the Texas Credit Union League;
- Pat Drennan, president/CEO, 1st Gateway CU, Camanche, Iowa;
- Patrick Jury, president/CEO, Iowa Credit Union League (ICUL);
- Mike Lanotte, senior vice president of association services, Credit Union Association of New York;
- Luis Lopez, executive president, Cooperativa Abraham Rosa, Puerto Rico;
- Sue Mitchell, CEO, Mitchell, Stankovic & Associates, Boulder City, Nev.;
- Murray Williams, chief operating officer, ICUL;
- Vicki Williams, senior executive vice president and chief operating officer, League of Southeastern Credit Unions (formerly Alabama Credit Union League); and
- Gary Wolter, retired president/CEO of the former Alabama league.
"These are individuals who have repeatedly given their time and expertise to credit unions around the world," said Brian Branch, WOCCU executive vice president and chief executive officer. "Their volunteer work enables us to reach out to many more credit unions than we can by ourselves."
IEVC members and other volunteers contribute valuable technical assistance and credit union industry know-how, bolstering WOCCU's efforts in developing countries. Participants also gain international development experience through volunteer service to the global credit union movement.
"Credit unions derive their strength from volunteer efforts," said Pete Crear, WOCCU president/CEO. "Thanks to the generosity of this year's inductees and those who have come before, we've been able to tap into this vital energy and commitment on behalf of credit unions worldwide."
Past inductees into the four-year-old program include: Pat Bodnar, Arizona Credit Union League; Carlos Calderón, OAS Staff FCU; Kathy Chartier, Members CU; David Chatfield, formerly of the California and Nevada Credit Union Leagues (CCUL); Anne Cochran, Louisiana Credit Union League; Letty Cordon-Hernandez, formerly with CCUL;
Richard Ensweiler, Texas Credit Union League (TCUL); John Florian, Ohio Credit Union League; Mary Martha Fortney, National Association of State Credit Union Supervisors (NASCUS); Dana Hofmann-Geye, formerly with the Minnesota Credit Union Network; David Low, OSU FCU; Kurt Lykins, Corporate One FCU;
Rick Myxter, Pennsylvania Credit Union League; Barbara Pogue, NASCUS; Bill Raker, US FCU; Kasey Rockwell, Credit Union Association of Oregon; Marcus Schaefer, Truliant FCU; Sarah Turner, Maryland and District of Columbia Credit Union Association; and Linda Webb-Mañon, TCUL.
ATM skimmers steal funds from 90 people
SAN BERNANDINO, Calif. (9/28/09)--ATM card skimming schemes have compromised accounts at Alaska USA FCU and Arrowhead FCU in California and an area bank.
Police in San Bernardino County, Calif., where the credit union branches are located, suspect that members' accounts have been affected from fraudulent use of ATM cards. At least 90 people in the High Desert area have been affected (San Bernardino Sun Sept. 24).
Authorities have noticed a spike in thefts in Apple Valley, Hesperia and Victorville, Calif., the newspaper said.
Card skimming occurs when a thief places a device on the outside of an ATM. The device captures information from a card's magnetic stripe when swiped. The skimmers also use video cameras to watch accountholders enter their personal identification numbers.
The newspaper provided several tips to prevent fraud:
- Inspect ATMs for unusual devices;
- Cover the hand used to enter a personal identification number; and
- Check account balances frequently.
Environment a focus for N.C. CUs
GREENSBORO, N.C. (9/28/09)--Two North Carolina credit unions are partaking in green initiatives to help the environment.
State Employees' Credit Union (SECU), a $16.7 billion asset credit union based in Raleigh, has recently expanded its "green" program offerings to include a Green Second Mortgage.
The new loan product is designed for energy efficient improvements such as replacement windows, heating/air conditioning systems, insulation, solar water systems and Energy Star appliances. As much as $50,000 may be financed for up to 10 years with at least 75% of the proceeds used for energy efficient improvements.
"SECU encourages its membership to seek energy efficient home improvements in order to cut costs and save on their utility bills," said Phil Greer, SECU senior vice president of loan administration. "There are also some federal and state tax credits and utility company rebates to assist homeowners who make energy efficient home improvements, and we recommend that our members take advantage of those as well."
Self Help CU, a $349.3 million asset, Durham-based credit union, said it is offering an Environmental Term Certificate (CD) to environmentally conscious members (Weekly Update Sept. 25). The CD has several maturity terms and gives members a return on their investment while supporting the credit union's Environmental Stewardship initiative. For more information, use the link.
Through the initiative, Self Help was able to provide a loan to Piedmont Biofuels in Pittsboro so it could purchase a truck for collecting grease from area restaurants. The loan allowed Piedmont to begin collecting more grease instead of buying other forms of raw materials for fuel production on the open commodities market. As a result, the company can deliver fuel to its members more inexpensively.
For more information, use the link.
California league to honor six CU leaders
RANCHO CUCAMONGA, Calif. (9/28/09)--The California Credit Union League will honor six credit union leaders at this year's California
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Recipients will be presented with distinguished service awards, volunteer awards and Tomorrow's Star Awards--which are given to credit union professionals under the age of 35.
Judith A. McCartney will receive the 2009 Leo H. Shapiro Lifetime Achievement Award. The award is the league's highest honor and is named after the father of the California credit union movement and founder of the league.
McCartney, a retired CEO from Orange County's CU, Santa Ana, has worked in the credit union movement since the late 1960s when she became CEO of a small credit union in Alaska. She is involved with the World Council of Credit Unions and has served on the California league's board of directors.
Other recipients include:
- Mary Cunningham, CEO, USA FCU, San Diego, Distinguished Service Award;
- Marshall Holloway, board chairman, Desert Valleys FCU, Ridgecrest, Outstanding Volunteer Award;
- Phillip A. Meserve, SAFE CU, board vice chairman, North Highlands, Outstanding Volunteer Award;
- Erin Hodson, Kern Schools FCU, Bakersfield, branch manager, Tomorrow's Star Award; and
- Wendy Zanotelli, UNCLE CU, Livermore, chief operating officer, Tomorrow's Star Award.
The Distinguished Service Award honors leaders who have provided service to the credit union community outside the usual scope of employment. Cunningham has served as a board chairman of Western CUNA Management School, the National Credit Union Foundation, the Richard Myles Johnson Foundation and the Credit Union National Association.
Indiana awards note service, fin lit, philosophy
INDIANAPOLIS (9/28/09)--The Indiana Credit Union League honored credit unions for achievements in community service, credit union philosophy in action, and excellence in youth financial literacy with awards named after credit union pioneers in each area.
First place Dora Maxwell Awards for social responsibility and community service, by asset category, went to:
- Great Horizons FCU, Hammond, less than $5 million assets;
- Evansville (Ind.) FCU, $20 million-$50 million in assets;
- First Trust CU, Michigan City, $50 million-$100 million;
- Industrial FCU, Lafayette, $100 million to $200 million;
- Finance Center FCU, Indianapolis, $200 million to $500 million; and
- Centra CU, Columbus, more than $500 million.
Winners of first place Louise Herring Awards for philosophy in action were:
- Partners 1st FCU, Fort Wayne, $50 million to $250 million assets category; and
- Centra CU, more than $250 million assets.
First place winner of the Alphonse Desjardins Award recognizing excellence in youth financial literacy efforts was Finance Center FCU, Indianapolis.
The state-level winners will proceed on to the national awards competition coordinated by the Credit Union National Association.
CU System briefs
- MONTPELIER, Vt. (9/28/09)--Steven D. Post, CEO of Vermont State Employees CU (VSECU), a $472 million asset, Montpelier, Vt.-based credit union, was profiled in the September issue of Vermont Business People magazine. When Post replaced retiring General Manager Clyde Coffrin Jr. in the early 1990s, the credit union had roughly $80 million in assets, 20 employees and about 16,000 members. Today VSECU has 45,000 members and employs more than 130 people. "The purpose of the credit union is to have it run for the benefit of its members, not for stockholders or making profits," said Joe Bergeron, president of the Association of Vermont Credit Unions, who also was interviewed. "[Post] just naturally has that in front of his mind at all times" ...
- DURHAM (9/28/09)--Latino Community CU, Durham, N.C., has launched its first annual essay writing and photo contest that emphasizes savings. The contest is offered in three age categories: 13-14, 15-16, and 17-18 (HeraldSun.com Sept. 16). The credit union will award $1,000 to first place winners, $500 to second place winners and $250 to third place winners. The money, made possible through a grant from the National Credit Union Foundation, will be given to winners in 24-month share certificates. Submitted photos and essays will be displayed in the credit union's branches and published online. Latino Community CU said it hopes the contests will raise awareness about the importance of building wealth. The credit union has $75 million in assets ...
- VANCOUVER, B.C. (9/28/09)--The merger of two Canadian credit unions will result in the third largest credit union in British Columbia (Vancouver Sun Sept. 23). Envision Financial and Valley First CU announced the members approved the merger. The combined credit union--which will have $5.6 billion in assets, 167,000 members and 1,250 employees--will be known as First West CU. The merger will take effect Jan. 1. Evision President/CEO Gord Huston will be First West's CEO during the transition, while Valley First President/CEO Harley Biddlecomb has been appointed special adviser ...
- PORTLAND, Ore. (9/28/09)--A paroled credit union robber was sentenced in a federal court Wednesday to 115 months (more than nine years) in prison for a string of credit union robberies in Eugene, Ore., and the Portland area. Marc Timothy Rzegocki also was sentenced to three years of supervised release and ordered to pay $23,124 in restitution to the credit unions (Targeted News Service Sept. 23). When the eight robberies at six credit unions occurred between June 27, 2007 and Aug. 20, 2007, he was out on parole from a sentence related to two unarmed robberies stemming from nine credit union robberies in 1986. The new sentence will run concurrently with a parole revocation sentence on the earlier charges ...
Market News
MADISON, Wis. (9/28/09)
- New U.S. home sales edged up in August to the highest level in nearly a year because builders slashed prices at a record pace to compete with foreclosures swamping the previously owned home market, analysts said. Sales rose 0.7% above the July figure to an annualized pace of 429,000 units, according to Commerce Department figures released Friday. The median price of a new house dropped 9.5% for the prior month--the largest decrease since 1963 when such records began, analysts said. With first-time home buyers hurrying to take advantage of tax credits before the November deadline, the worst housing slump since the Great Depression could be coming to a close, analysts said. Policymakers at the Federal Reserve promised Wednesday to maintain borrowing costs at a low level to nurture the recovery beyond the time when government stimulus measures fade out. Also, sales are below the year-ago pace, and months of supply stand at 7.3. Year-over year, the median sales price is down 11.6% (Moody's Economy.com and Bloomberg.com Sept. 25) ...
- Reaching its highest level since January 2008, the University of Michigan Consumer Sentiment Index continued to rise in the latter half of September with the final index at 73.5--higher than the preliminary data of 70.2, and above the 65.7 for August. The expectations component was the driving force behind the index's increase from August, although current conditions also show a significant gain, analysts said. Short-term inflation expectations declined. Positive factors boosting consumer sentiment include moderating job losses, a stock market that's trending upward, and public pronouncements that the recession is ending. Negatives include the failure of gasoline prices to drop in late summer as they typically do, and nonexistent growth in wages, analysts said (Moody's Economy.com Sept. 25) ...
- U.S. manufactured durable goods orders fell steeply in August, marking the largest drop in seven months, in part due to lower aircraft demand, the Commerce Department said Thursday. Durable goods are designed to last at least three years. On the heels of July's biggest gain in two years, new orders unexpectedly declined 2.4% in August to a seasonally adjusted $164.4 billion, offsetting only a portion of the previous month's revised 4.8% (previously 4.9%) gain. The decline in new orders was led by a 42% drop in non-defense aircraft. Following July's 2.3% gain, shipments fell 1.4% between July and August (The Wall Street Journal and Moody's Economy.com Sept. 25) ...
News of the Competition
MADISON, Wis. (9/28/09)
- For the eighth consecutive week, the U.S. Federal Reserve's balance sheet grew because of the central bank's continuing purchases of mortgage securities and Treasuries, according to data released Thursday. The Fed's balance sheet liabilities--a wide-ranging measure of its lending to the U.S. financial system--rose to $2.141 trillion Wednesday--a new four-month high from its $2.125 trillion high-water mark the previous week. For the week ended Wednesday, the Fed's holdings rose to $2.16 trillion from $2.14 trillion the prior week. Total discount window borrowing dipped to $109.98 billion Wednesday from $111.88 billion a weak earlier (Reuters and Dow Jones via American Banker Sept. 25) ...
- U.S. banks are on course to hit a record $43.6 billion in fees--highlighted by overdraft fees--charged customers this year--right when federal lawmakers are ready to levy new fee restrictions. U.S. banks pulled in $21.8 billion in service charges on deposit accounts through the first half of 2009--a record for the first half of a year--according to Federal Deposit Insurance Corp. Data. In 2008, banks recorded $39.5 billion in fees revenue--which excluded some fees, such as those for using ATMs. Banks have assessed account fees to mitigate growing losses from loans connected to the U.S. housing downturn and economic recession, analysts said (Dow Jones Newswires Sept. 25) ...
IRS extends deadline to roll over 2009 RMDs
MADISON, Wis. (9/28/09)--Individual Retirement Account (IRA) owners who have already received a 2009 required minimum distribution (RMD) this year are getting a break from the Internal Revenue Service (IRS).
IRS announced Wednesday that individuals have until the later of Nov. 30, or 60 days after the date the distribution was received, to roll over a distribution.
An RMD is the smallest annual amount that must be withdrawn from an IRA or qualified plan once the account owner reaches age 70 1/2.
Late last year, The Worker, Retiree, and Employer Recovery Act of 2008 waived RMDs from IRAs and qualified retirement plans for 2009. Because of this legislation, IRA owners and beneficiaries who would have been required to receive an RMD for 2009 are not required to receive a distribution.
Most financial institutions notified their IRA owners about the waiver and gave them the option of whether to waive the 2009 RMD or receive it as a distribution. But some IRA owners didn't have time to notify their financial institution, didn't realize that they could waive the RMD, or if they received the distribution, didn't know that they had 60 days to roll over the funds. In many cases, the IRA owner had no choice but to keep the RMD and pay taxes on it.
IRS Notice 2009-82 grants relief for these IRA owners by extending the 60-day deadline for rolling over a distribution of the 2009 RMD from an IRA until Nov. 30. However, the extension does not affect the once-a-year rollover rule, so at most an IRA owner can roll over one distribution under this extension.
"The IRS recognized the short amount of time financial institutions had last year to notify their IRA owners about the 2009 RMD waiver and the fact that many IRA owners received 2009 RMDs they may not have wanted and were not required to take," said Dennis Zuehlke, compliance manager for Middleton, Wis.-based Ascensus IRA Services, which serves 80% of credit unions offering IRA programs.
By permitting IRA owners extra time to roll over a 2009 RMD distribution, the IRS is helping them avoid taxes on distributions they were not required to take, Zuehlke said.
Notice 2009-82 also provides guidance for qualified retirement plan sponsors and contains sample plan amendments that sponsors may use to stop or continue 2009 RMDs, he said.
Northwest FCU revises collection strategy
HERNDON, Va. (9/28/09)--Northwest FCU has revised its late loan collection payment strategy, with marked success.
The credit union, using Digital Mailer's Automatic Relationship builder, sent out 673 e-mails the week of Aug. 20 to members delinquent on loan payments. About 63% responded and provided payments.
"I think that's pretty good," said Cindy Cherry, Northwest FCU collections manager. "It's definitely improved the success of our collection efforts."
DigitalMailer's e-mail program targets delinquent members with customized e-mail messages. Traditionally, credit unions send notices after 15 days, but Northwest is sending the messages after five days.
Automatic Relationship Builder synchronizes the reports with DigitalMailer's e-mail engine, filling in variable fields. It also collects delivery and open-rate data and input the data into the credit union's collection software.
Credit unions, by using the resources they already have--such as members' e-mail addresses--can find cost-efficient methods to improve their collections, said Ron Daly, DigitalMailer president/CEO.
"There's no doubt today's economy is challenging credit unions as they collect loan payments," he added.
A Federal Reserve statistical release from second quarter 2009 indicates that charge-off and delinquency rates at commercial institutions have increased. The statistics indicate:
- Residential real estate loans grew to 8.84%;
- Credit cards grew to 6.70%; and
- Other consumer loans grew to 3.73%.
"As more credit unions face growing member delinquencies, more are looking for new strategies in the collections area," Daly added.
Based in Herndon, Va., Northwest FCU has $1.7 billion in assets.
Products and Services briefs
- COLUMBUS, Ohio (9/28/09)--Bob Ezell, vice president of product marketing for Computer Service Inc. in Paducah, Ky., was elected president of the Association for Financial Technology (AFT) during its annual meeting Sept. 13-15 in Tucson, Ariz. Other officers elected include: Vice President David Foss, president of ProfitStars, and Treasurer Kevin Tweddle, chief operating officer of bank intelligence solutions at Fiserv. New board members are: Brian Otte, senior vice president of corporate development at Perimeter eSecurity; Kelli Schultz, senior vice president of business development at iPay Technologies; and Tom Shen, board member at CBG Holdings. AFT is a technology-focused association that serves more than 80% of the credit union, banking and thrift market ...
- MERIDEN, Conn. (9/28/09)--The Credit Union League of Connecticut announced its Compliance School for 2010, a six-month program that provides full-day workshops to credit union professionals in the Northeastern U.S. Credit union professionals with credit unions under $20 million in assets can attend at no cost. Others including affiliated credit unions with the Credit Union National Association can pay a fee to attend, or a discounted full-program rate. The school aims to help credit unions with changing compliance obligations in "today's volatile environment," the league said ...
- NORTH CANTON, Ohio (9/28/09)--Delta Community CU, Atlanta, recently incorporated a Diebold Integrated Services outsourcing solution. Diebold is an ATM manufacturer based in North Canton, Ohio. The Diebold solution will allow the credit union to adjust personnel access permissions and create access reports when investigating security incidents and for auditing purposes. Delta has 19 branches in Atlanta and more than 30 ATMs. The solution will allow the credit union to focus on growing the branch and managing staff, Delta said. Outsourcing can help financial institutions focus on core capabilities and avoid expenses associated with acquiring and maintaining security systems, Diebold added ...
- ALBANY, N.Y. (9/28/09)--CUC Mortgage Corp. recently introduced an enhancement to "Application Status," an online resource for borrowers. The update allows loan applicants to check the status of their mortgage applications at credit unions, view outstanding conditions, and access information about the processor, underwriter and those assigned to their applications. Loan applicants also can view and print materials. CUC Mortgage is headquartered in Albany, N.Y., and works with credit unions and their members on mortgages in six Northeastern states ...
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