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Filed on September 29, 2009, published the first business day after.
- Dodd’s assurance: No single regulator for CUs
- Fed limits CARD Act minimum payment warnings to credit cards
- NCUA advises CUs on mortgage mods, financial trends
- Inside Washington
- FOM expansion ruling a 'win for all Pa. CUs'
- CUNA to MSN: CU secured loan can build credit
- Developers sue CU for failed condo project
- Pressing Compliance Issues audio conference next week
- National CU Foundation seeks nominations for board
- Fourth leader nominated for CUNA Board
- 500 attend Iowa CU convention
- OpSS Council announces new executive committee
- Team Little Guy's first fundraiser nets $8,000
- CU System briefs
- Market News
- News of the Competition
- Watch for fees on unemployment benefits
- Economy an opportunity to grow card portfolio
Dodd’s assurance: No single regulator for CUs
WASHINGTON (9/30/09)—In a financial regulatory reform hearing conducted by the Senate Banking Committee Tuesday, Chairman Christopher Dodd (D-Conn.) made it resoundingly clear that any plan to combine financial institution regulation under a single regulator does not apply to credit unions.
The hearing was titled ""Strengthening and Streamlining Prudential Banking Supervision."
During the public session, banking panel member Sen. Jeff Merkely (D-Ore.) noted that community banks and credit union are concerned about being rolled into a single regulator.
The Credit Union National Association has stated the credit union case that a separate federal regulator is an imperative for credit unions because their structure and, in some ways, operations are so distinct from banks and thrifts.
Responding to Merkeley, Dodd said: "I want to make it clear that this does not relate to credit unions. Before I get calls from around the country, I wanted to make that point. Credit unions: you are ok."
Sen. Bob Corker (R-Tenn.) said of the exchange, "You have just given evidence to where the real political clout is."
CUNA Vice President of Legislative Affairs Ryan Donovan said after the hearing, "Now the administration, House Financial Services Committee Chairman Barney Frank (D-Mass) and Chairman Dodd appear aligned on keeping NCUA out of a national banking regulator."
Fed limits CARD Act minimum payment warnings to credit cards
WASHINGTON (9/30/09)--Proposed amendments to Regulation Z released by the Federal Reserve today would limit the required minimum payment warning disclosures outlined in the Credit Card Accountability, Responsibility and Disclosure (CARD) Act to credit card accounts.
"The Credit Union National Association (CUNA) has urged the Fed to limit these minimum payment warning disclosures to credit cards for weeks," said Deputy General Counsel Mary Dunn. These disclosures must be provided on periodic statements and must describe the affect that making only minimum payments has on the amount of interest that is paid and the time it takes to repay the balance.
CUNA Senior Assistant General Counsel Jeff Bloch added that CUNA is "pleased that the Fed is using its authority under the Truth in Lending Act to limit these provisions in this manner."
The proposed rule, which would implement the portions of the CARD Act which come into effect on February 22, 2010, is the second stage of CARD Act implementation. Many of these provisions will be similar to Regulation Z rules that addressed open-end lending, which were issued earlier this year.
Under the Fed proposal, credit card issuers would be prevented from increasing a borrower's interest rate during the first year that an account is open.
Consumers that are under 21 years of age will generally require a co-signor to open a credit account under the proposed rules, and the increased fees that can sometimes be associated with so-called "subprime" credit cards will also be limited.
The proposal will also require that payments which exceed the minimum payment must now be allocated to balances with the highest interest rate first.
While most provisions are currently scheduled to come into effect in February or August of next year, Reps. Barney Frank (D-Mass.) and Carolyn Maloney (D-N.Y.) recently introduced legislation that would accelerate the effective date for some portions of the CARD Act to December of this year.
CUNA expects that the Fed's newly-proposed rules, as well as interim final rules that address portions of the CARD Act that came into effect in late August, will be finalized by the end of 2009. Comments on the 900 page proposal are due within 30 days, and CUNA will issue a comment call soon on the new proposal. CUNA will also file a comment letter, working with its Consumer Protection Subcommittee and the CUNA Lending Council.
NCUA advises CUs on mortgage mods, financial trends
ALEXANDRIA, Va. (9/30/09)--In Letter to Credit Unions 09-CU-19, National Credit Union Administration (NCUA) Chairman Deborah Matz advised credit unions on how best to handle the "unprecedented levels" of mortgage defaults.
Matz encouraged credit unions that originate real estate loans to work with their borrowers to modify their loans, if needed. Potential loan modifications suggested by the NCUA supervisory letter include reducing interest rates, extending the maturity date of the loan and/or offering principal forbearance or forgiveness. Credit unions may also waive late fees or reduce or capitalize past due amounts, taxes, accrued interest, insurance, or fees, the agency recommended.
According to NCUA, the objectives of loan modification programs are to help financially distressed members stay in their homes and to minimize default and foreclosure costs for credit unions . The NCUA encourages its examiners to "evaluate the effectiveness" of a credit union's mortgage modification program and "ensure that the program is not masking delinquency or delaying the timely recognition of loan losses."
In a separate Letter to Credit Unions (09-CU-18), NCUA notes that the real estate market continues to affect the credit quality of loans . However, the enclosed report on credit union trends found that the majority of loan growth over the first six months of this year came from the real estate sector.
The report also found that while the credit union industry "remains sound," the impact of the financial crisis "continues to have a negative impact on credit union trends." Matz noted the crucial role of proper risk and asset-liability management for credit unions given the difficulties of this environment and she advised credit unions that originate real estate loans to "remain vigilant and enforce sound underwriting practices."
For the full NCUA letters, use the resource link.
Inside Washington
- WASHINGTON (9/30/09)--Illinois credit union officials attended Thursday's National Credit Union Administration (NCUA) board meeting in Alexandria, Va., and later met their elected officials. The delegates were in the Washington, D.C., area for the Credit Union National Association's Hike the Hill event.
The group also met with NCUA board member Michael Fryzel, who said he was happy to talk with the delegation about issues regarding corporates and member business loans. From left are: Barrie Hendrickson, Cornerstone CU; Carl Sorgatz, Hawthorne CU; Cheri Taylor, Sangamon Schools CU; Ann Duble, NuMark CU; Gail Clore, Cornerstone CU; Fryzel; Geri Burek; South Division CU; John Bratsakis, Baxter CU; Karen Woods, Decatur Earthmover CU; and Don Edwards, Illinois Credit Union League. (Photo provided by the Illinois Credit Union League) ...
Click for larger view - WASHINGTON (9/30/09)--The Federal Deposit Insurance Corp. (FDIC) has adopted a notice of proposed rulemaking that would require insured financial institutions to prepay their estimated quarterly risk-based assessments for the fourth quarter of 2009 and for all of 2010, 2011 and 2012. The assessments will help to replenish the Deposit Insurance Fund, which has dipped to lower levels recently because of several bank failures. So far, 95 have failed this year (Bloomberg Sept. 29). The prepaid assessments are expected to bring in about $45 billion. The board also voted to adopt a three-basis point increase in assessment rates effective Jan. 1, 2011, and extend the restoration period to eight years from seven years. "As of June 30, FDIC-insured institutions held more than $1.3 trillion in liquid balances, or 22% more than they did a year ago," FDIC said in a statement. "Prepaying assessments will put the industry's liquid balances to good use in conserving capital and helping to maintain the capacity of banks to lend while they rebuild the fund" ...
- WASHINGTON (9/30/09)--Ed DeMarco, new head of the Federal Housing Finance Agency (FHFA), said he supports standardized reporting for the Federal Home Loan Banks. The 12 banks have resisted such a move but DeMarco said the goal should be to enhance the "consistency and robustness" of their disclosures to the capital markets. A FHFA proposal that would expand the number of independent directors on the board of the Office of Finance--which issues debt for the banks--is due for comment next week. The proposal also would allow the directors to sit on an audit committee that could establish more standard accounting policies (American Banker Sept. 29). The prospect of the committee has caused some to think the individual bank boards wouldn't have much say in developing accounting standards. However, DeMarco said that would not be the case ...
FOM expansion ruling a 'win for all Pa. CUs'
HARRISBURG, Pa. (9/30/09)--Monday's ruling by a Pennsylvania court--which upheld the state Department of Banking's decision to grant five-county field of membership (FOM) expansions to two credit unions--is significant, according to the Pennsylvania Credit Union Association (PCUA).
"This ruling is significant because it is the first time in all of the state litigation that the courts have addressed the 'well-defined local community' analysis employed by the banking department," said Rick Wargo, general counsel for PCUA.
In a 54-page opinion, the Commonwealth Court of Pennsylvania upheld the expansions granted by the banking department to Freedom CU, Warminster, and TruMark Financial CU, Trevose, in 2003. They sought to expand to five counties--Bucks, Chester, Delaware, Montgomery and Philadelphia Counties, all within the Philadelphia metropolitan area.
The opinion addressed the evidence the credit unions presented to the department in support of their community charter notices. It held that the evidence given by the credit unions supported the banking department's conclusion that the credit unions' notices contained evidence that the expansions constituted a "well-defined local community."
The ruling also addressed other banker arguments in the context of litigation. The court found in favor of the banking department and the credit unions on all arguments. (Use resource link to access News Now's article in Tuesday's edition on the decision.)
"It's been a long, hard battle, but worth the cost to establish this type of precedent in the community chartering area for Pennsylvania credit unions," said Jim McCormack, PCUA president/CEO. "Advocacy involving these types of issues is specifically why trade associations exist and is why the association committed its resources and support in this important litigation," he added.
He thanked the association's legal staff, Rick Wargo and Laurie Kennedy, for their "outstanding work on this case," and the credit unions "for persevering and remaining committed to this case during the past five years. This is a win for all Pennsylvania credit unions," McCormack concluded.
The court ruling "may have implications for states with 'wildcard' provisions in their statutes that give state-chartered credit unions parity with the Federal Credit Union Act's field of membership provisions," said Michael Edwards, counsel for special projects at the Credit Union National Association (CUNA).
However, that depends on state law. Many of the state 'wildcard' statutes give wildcard parity for only for "powers"--such as making loans, accepting deposits-- rather than powers and field of membership, as Pennsylvania's statute does, Edwards told News Now.
"The 'well-defined local community' issue has been extensively litigated in federal court with regards to federal credit union FOM expansions, including in federal court in Pennsylvania in a case that concluded last year," Edwards said. But the court "endorsed the Pennsylvania Department of Banking using the NCUA Chartering Manual as, in the words of the court, 'guidelines' instead of following all of the provisions of the manual--which the banks tried to argue the Pennsylvania Banking Department should have done, but the court did not agree."
A number of cases have been brought by Pennsylvania's bankers in state court challenging the validity of the new community charters of credit unions and administrative procedures the state regulator used to approve those charters.
All the cases have ended in a final disposition or been dismissed unless the banks choose to appeal the Commonwealth Court's decision to the Pennsylvania Supreme Court. Other issues were resolved earlier, including:
- On May 21, the court issued an order in the Freedom CU and Trumark Financial CU case that "discontinued" the bankers' challenges on two credit union state taxation issues--whether the state legislature had authority to confer tax-exempt status on credit unions and whether the state's Constitution required "uniformity of taxation" between credit unions and banks.
- On Dec. 18, 2008, in a case involving the community charter application of Belco CU, Harrisburg, the Pennsylvania Supreme Court rejected most of bankers' argument--that they had a right to a hearing and discovery as part of the community charter application process under state regulations. In late March 2009, the Commonwealth Court dismissed the remaining aspects of the matter, effectively ending the case.
CUNA to MSN: CU secured loan can build credit
MADISON, Wis. (9/30/09)--Obtaining a secured loan from a credit union is a good way to improve a person's credit history without using credit cards, the Credit Union National Association (CUNA) told MSN Money Tuesday.
Susan Tiffany, CUNA director of consumer publications, told Liz Pulliam Weston in a column titled "Build Credit Without Credit Cards" that a secured loan from a credit union--often called a "share-secured loan"--may be easier to get than bank loans. This is because credit unions usually are willing to look beyond credit scores when lending, Tiffany added.
"[Credit unions] don't treat credit scores as the only source of information about you," Tiffany told the publication. "They're looking for ways to say yes. Are you responsible with your checking account? Are you demonstrating that you're trying to be a regular saver? Those behaviors can help."
The article includes seven tips and four traps to avoid when trying to build a good credit history. It also links to CUNA's website and its credit union locator to help readers locate a credit union.
For the full article, use the link.
Developers sue CU for failed condo project
DAVENPORT, Iowa (9/30/09)--Two property developers are suing a Moline, Ill.-based credit union for up to $16 million in damages on behalf of a failed condominium complex, according to opening statements in Scott County District Court in Iowa.
IH Mississippi Valley CU is the target of a suit filed by Cypress Point Developments, which claims the credit union wanted out of a $3.5 million loan to develop a condominium complex in Davenport, Iowa. The developers, Niky and Thomas Bowles, seek damages of $16 million--the amount that they thought they would make from the project (Quad City Times Sept. 29).
The Bowleses claim the credit union wanted to get rid of the loan because it had locked in a lower interest rates for them than it would have received from other borrowers. The developers also said the credit union had gone over its regulatory lending limits, the newspaper said.
The credit union had not exceeded its lending cap, according to a 5300 call report from the National Credit Union Administration. Credit unions granting member business loans are not allowed to lend out more than 12.25% of their assets.
Jon Fox, the credit union's attorney, said when IH Mississippi Valley CU decided not to extend the loan and file for foreclosure, the Bowleses began blaming the credit union for the failed project. The Bowleses want to be bailed out from their own mistakes, Fox said.
News Now contacted the credit union, but a spokesperson said it did not wish to comment due to the ongoing litigation.
The trial could last through next week, the newspaper said.
The condominium complex and the land on which it is located have been involved in at least six lawsuits. Several contractors have won suits against the Bowleses for unpaid work and contract disputes (Quad City Times March 18, 2008).
The Bowleses announced plans for the condo development in 2003. Niky Bowles said the development would have 168 townhouses in 14 buildings, with the units priced below $90,000. One building was constructed, with four of the 12 units sold. The condos have sold for prices ranging from $186,700 to $219,770, the Times said.
Pressing Compliance Issues audio conference next week
MADISON, Wis. (9/30/09)--Another "Pressing Credit Union Compliance Issues" audio conference will be offered next week to address new "hot topics" in the compliance area, according to the Credit Union National Association (CUNA).
The conference is set for Wednesday, Oct. 7 from 1 p.m. to 2:30 p.m. CDT (or 2-3:30 p.m. EDT; 12 to 1:30 p.m. MDT; and 11 a.m.-12:30 p.m. PDT).
Participants can:
- Get ready to comply with the Internet gambling regulations, effective Dec. 1--with commonly asked questions;
- Understand what changes must be made in their overdraft programs by year-end (Truth-in-Savings regulations are effective Jan. 1) and get an update on the Fed's Reg E proposal on charging fees on ATM and one-time debit card overdrafts;
- Get a quick review of the Department of Housing and Urban Development's (HUD) amended Real Estate Settlement Procedures Act (RESPA) regulation (effective Jan. 1), and the agency's recently issued "Frequently Asked Questions on RESPA;
- Get an update on a recently issued Currency Transaction Reporting (CTR) Exemption with Frequently Asked Questions;
- Prepare for the new Reg Z open-end lending provisions, with four things your credit union should do now (effective next July); and
- Hear where things stand on the implementation of the Credit Card Act provisions scheduled to go into effect Feb. 22, on proposed regulations and congressional concerns.
Also, CUNA Regulatory Affairs staff will provide quick status updates on:
- Implementation of the Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act's Nationwide Mortgage Licensing System and Registry;
- The Fed's Reg Z proposal on closed-end mortgage lending and home equity lines of credit rules;
- Financial Crimes Enforcement Network's (FinCEN) plan to issue a proposal to apply the Bank Secrecy Act to store value cards; and
- Fair and Accurate Credit Transactions Act (FACTA) rulemaking on risk-based pricing.
Cost is $89 for the live audio conference, which also includes six months' access to the archive. For more information, use the link.
National CU Foundation seeks nominations for board
MADISON, Wis. (9/30/09)–The National Credit Union Foundation (NCUF) is seeking nominations for two board seats: Credit Union Executive or Director, and System Affiliate.
For the executive or director seat, each candidate must be an executive officer or director of a credit union serving consumers. The incumbent for the seat is Mark Twisdale, senior vice president of human resources for State Employees' CU in Raleigh, N.C. Twisdale is completing his first three-year term on the NCUF Board.
Volunteers can serve up to three three-year terms on the board as long as they are re-nominated by the NCUF Governance and Nominations Committee and re-elected by the NCUF board.
For the system affiliate seat, each candidate must be an executive officer or director of a national organization that meets all these criteria:
- The organization's primary purpose is to support credit unions or some element of the credit union movement;
- A significant portion of the organization's ownership or membership comes from the credit union system, and;
- The organization has demonstrated a commitment to the purposes of the foundation. NCUF's mission is to "promote and improve consumers' financial independence through credit unions."
The current incumbent in the system affiliate seat is not eligible for re-election. Francois Henriquez, just appointed interim CEO of U.S. Central FCU in Lenexa, Kan., is serving the final year of his third three-year term on the NCUF board.
To apply for either seat, use the resource link and click "Volunteer for our Board." Applications must be received by Nov. 20. The board will vote on the nominees in December. In January, NCUF board members will elect four officers at their organizational meeting.
The 13 voting seats on the NCUF board include representatives of seven consumer credit unions, two national organizations serving credit unions, one corporate credit union, one state credit union foundation, one state credit union league and one at-large seat.
Fourth leader nominated for CUNA Board
MADISON, Wis. (9/30/09)--The Credit Union National Association (CUNA) has received another nomination for its 2009-2010 board elections.
The fourth nominee and district category is Dennis E. Pierce, CommunityAmerica CU, Kansas City, Mo., District 4, Class C.
Already nominated are:
- John A. Graham, Kentucky Employees CU, Frankfort, Ky., District 2, Class A;
- Marla S. Marsh, Kansas Credit Union Association, Wichita, Kan., District 5, Class D; and
- Susan Steifel, Woodstone CU, Federal Way, Wash., District 6, Class A.
The deadline for nominations is Oct. 16. Nominations are being accepted in eight categories:
- District 1, Class C;
- District 2, Class A;
- District 3, Class B;
- District 4, Class C;
- District 5, Classes B and D; and
- District 6, Classes A and D.
Eligible candidates must be an employee or voting board member of the nominating credit union. Nominations must be in writing and seconded in writing by two other credit unions of the same size group from the district.
Only two seconds will be recorded for each candidate. Upon request, a list of credit unions by size group and district will be furnished to candidates to assist in obtaining seconds.
To be an eligible league candidate for a CUNA Director position, individuals must be a league president and be nominated in writing by their league, with a second in writing by at least one other league from the district.
CUNA's Corporate Governance Committee will verify eligibility of each candidate, the credit union's affiliation, size group and district, and date/time of receipt. Voting will begin Oct. 23 and close Dec. 18.
For more information, use the link.
500 attend Iowa CU convention
DES MOINES, Iowa (9/30/09)--More than 500 credit union representatives and vendors attended the Iowa Credit Union Annual Convention held Sept. 23-25 in Des Moines, according to the Iowa Credit Union League (ICUL).
Thursday's opening keynote presenter Bill Hampel, senior vice president of research and policy analysis and chief economist for the Credit Union National Association, offered a perspective on the economic challenges facing the credit union industry.
"Credit unions are collateral damage to the financial crisis and recession," Hampel said. He pointed out that Iowa credit unions are faring far better than credit unions nationwide by maintaining lower delinquency rates and higher savings rates.
Other educational sessions focused on compliance issues, social media, Hispanic outreach, share insurance and compensation.
"As the financial environment evolves in Iowa, credit unions will continue modifying their services to help the next generation of working Iowans," said Patrick S. Jury, league president/CEO. "The league and Iowa's credit unions work together to ensure our industry remains vital and healthy for the benefit of all Iowans."
The league also honored three Iowa credit union representatives for their contributions to the industry.
Kent Strawn, president/manager of First Class CU, West Des Moines, received the 2009 Heritage Award for lifetime achievement within the credit union industry. Strawn has been active in the credit union movement for more than 33 years. Prior to serving as president/manager of First Class CU, Strawn served as director of Central Iowa Chapter of Credit Unions, as past-president, and current chairman of ICUL's Transfer System, and was the chairman of ICUL's board of directors.
Denny Skelton, senior vice president of strategic alliances for Veridian CU, Waterloo, received the 2009 Professional Cooperative Spirit Award. Skelton has worked in the credit union industry for more than 30 years.
Iowa State Rep. (D-83) and Veridian CU board member Bob Kressig received the 2009 Volunteer Cooperative Spirit Award. This award recognizes an individual who has exceeded expectations of a credit union leader and who provides outstanding service, commitment and volunteer efforts to improve the Iowa credit union movement. A few of Kressig's involvements include leading the legislative financial services sub-committee, the credit union's policy/education committee and the strategic planning committee.
The 2010 Iowa Credit Union Convention will be held Sept. 22-24 in Bettendorf.
OpSS Council announces new executive committee
Madison, Wis. (9/30/09)--The new executive committee and officers for the CUNA Operations, Sales & Service Council (OpSS) were announced during the council's 12th annual conference, which ends today in San Diego.
Jennifer Lehn, executive vice president, Numerica CU, Spokane Valley, Wash., moved from the vice chair to the chair position, replacing Carolyn Jordan, senior vice president of retail operations at Neighborhood CU, Dallas.
Sue Douglas, senior vice president and chief operating officer, State Employees' CU, Raleigh, N.C. was named to the vice chair position, and Debbie Baumann, chief financial officer and chief operating officer, Mazuma CU, Kansas City, Mo., is the new secretary/treasurer.
Three new executive committee members were elected for three-year terms:
- Dave Tate, vice president, branch operations for Anheuser-Busch Employees' CU, St. Louis;
- Tina McMinn, vice president, operations, Stanford FCU, Palo Alto, Calif.; and
- Robb Keith, senior vice president of retail services, Members 1st FCU, Mechanicsburg, Pa.
The three replace: Chris Lamb, executive vice president and chief operating officer, E1Financial CU, Monterey Park, Calif.; Mike Fanelli, chief financial officer and chief operating officer, Atlantic FCU, Kenilworth, N.J.; and Jordan.
The CUNA OpSS Council executive committee also includes:
- Keith Kauffeld, vice president of operations, Air Academy FCU, Colorado Springs, Colo.;
- Lucy Ito, senior vice president of growth/development, California and Nevada Credit Union Leagues, Ontario, Calif.; and
- Patti Dixon, vice president of service centers, Baxter CU, Vernon Hills, Ill.
Team Little Guy's first fundraiser nets $8,000
GREENSBORO, N.C. (9/30/09)--Team Little Guy, a group of cyclists in North Carolina hoping to raise $100,000 for Hope for the Warriors, a nonprofit that assists and cares for wounded veterans, kicked off the team's first event Saturday and raised nearly $8,000.
North Carolina Credit Union League and Marine FCU are sponsoring the team, which will participate in a series of athletic events to raise money for the Warrior's Hope and Care Center, which will be built near Camp LeJeune (ENCToday.com Sept. 29).
Saturday's event was the Tour to Tanglewood in Greensboro.
Team Little Guy--named after the Credit Union National Association's Little Guy featured in its advocacy and awareness campaign--has been taking part in fundraisers for about three years, according to Eric Gelly, executive vice president and chief operating officer of the league. He told the newspaper that the Little Guy featured on team T-shirts and logos represents the credit union ideal of "looking out for the average everyday folks."
Most of the team work for local credit unions. They range in age from 27 to 63, but most are in their 40s, Gelly said. He added that the group's relationship with Hope for the Warriors is more personal this year. One of the team's veteran riders, Army reserve Lt. Col. Thomas Heyden, shipped out to Iraq on Sunday.
CU System briefs
- LANSING, Mich. (9/30/09)--The Grand River Chapter of the Michigan Credit Union League met with U.S. Rep. and gubernatorial candidate Peter Hoekstra (R-Holland) and six state lawmakers for a legislative breakfast Sept. 21 (Michigan Monitor Sept. 28). Forty-five credit union representatives attended the event, which included a panel discussion on federal and state issues. Issues discussed included President Barack Obama's health care plan, the economy, term limits and a part-time legislature, revenue sharing, education, the state budget and the federal stimulus. In addition to Hoekstra, lawmakers present included State Reps. Roy Schmidt and Robert Dean (both D-Grand Rapids); Dave Hildenbrand (R-Lowell); Tom Pearce (R-Rockford); Kevin Green (R-Wyoming); and Dave Agema (R-Grandville). Staff was present from the office of State Sen. Mark Jansen (R-Grand Rapids) ...
- BIRMINGHAM, Ala. (9/30/09)--Jefferson County Employees CU, based in Birmingham, has made a $5,000 contribution to the County Employees Relief Fund and created a Member Assistance Plan (MAP) to help members through the economy. The fund is for employees affected by furloughs in paying their health insurance premiums in September. Charles Faulkner, CEO, personally contributed $2,500 to the fund, which is managed by the Jefferson County Employees Association, said Patrick Nicovich, board chairman at the $63.1 million asset credit union. MAP was created to help members having trouble making loan payments or needing tips on stretching their budgets, said Faulkner. MAP provides resources, advice and solutions to meet challenges, including loan restructuring, financial counseling, financial review and budgeting resources ...
- DENVER (9/30/09)--David Maus, president/CEO of Public Service CU (PSCU) in Denver, received the 2009 Ally of the Year Award from the Women's Vision Foundation Tuesday at the Colorado Convention Center. He was honored as a senior executive man recognized as a champion for the advancement and support of women within their organization and the community. Maus was recognized for providing multiple education opportunities, understanding the balance between women's professional and personal lives, and fostering women's programs and advancements. He also was praised for support of nonprofit organizations and for making it a priority at the credit union to leave a responsible corporate footprint on the environment (PR Newswire Sept. 29) ...
Market News
MADISON, Wis. (9/30/09)
- In July, home prices in 20 U.S. metropolitan areas rose the most in nearly four years, signaling that the housing slump that engendered the worst recession since the 1930s could be subsiding, analysts said. The S&P/Case-Shiller home-price index increased 1.2% in July from the previous month--the largest jump since October 2005, the group said Tuesday. Los Angeles was up 1.8%, Minneapolis, 4.6%, New York, 0.8%, San Diego, 2.5%, and San Francisco, 3.3%. Also, home values were down 13.3% from a year earlier--less than economists had forecast. Low borrowing costs, government tax credits for first-time buyers and home-price declines driven by foreclosures have helped slow the drop in prices, analysts said. The recent improvement in the house-price indices portend that the worst house-price drops already have happened, although house-price declines could head downward again in coming months, analysts added (Bloomberg.com, Moody's Economy.com and The New York Times Sept. 29) ...
- The Conference Board Index of consumer confidence in September relinquished a small amount of its big August gain, signaling that consumers remain substantially depressed, analysts said. The index fell to 53.1 from an upwardly revised 54.5--previously 54.1. Assessments of current labor market conditions eroded considerably--with the share of respondents saying jobs are plentiful diving to its lowest level since 1983. However, views of future labor market conditions remained mostly unchanged, analysts said. The private research group said this month's decline is due to worries about the labor market and consumers' fears of losing their jobs. The downturn of the reading on consumer confidence led to a weakening in the U.S. stock market Tuesday, analysts said (Moody's Economy.com, The New York Times and The Wall Street Journal Sept. 29) ...
- The U.S.'s reign as an unchallenged economic superpower might be coming to an end, Robert B. Zoellick, the president of the World Bank, said Monday. Also, the dollar is likely to lose its favored position in the world economy, as the euro and Chinese renminbi take on larger roles, he added. "The U.S. would be mistaken to take for granted the dollar's place as the world's predominant reserve currency," Zoellick said in a speech at Johns Hopkins University's School for Advanced International Studies. "Looking forward, there will increasingly be other options to the dollar." (The New York Times Sept. 29) ...
News of the Competition
MADISON, Wis. (9/30/09)
- Citizens Republic Bancorp Inc. said Monday it will more than triple the number of shares it has outstanding to build its capital ratios. Citizens Republic will issue 268 million shares of common stock in exchange for $209 million in notes and securities. The exchange is set to settle today. The Midwest regional bank said the swap will generate roughly $199 million of additional Tier 1 common equity. Citizens Republic has coped with a struggling Michigan economy, which is experiencing one of the highest unemployment rates in the U.S. The $12.1 billion-asset bank reported it experienced a wider loss because of higher write-downs as the company increased its loan-loss provisions. However, Citizens Republic said its total delinquencies plunged from the first quarter (Dow Jones Newswires via The Wall Street Journal Sept. 28 and American Banker Sept 29) ...
- U.S. Bancorp subsidiary, Elavon, announced Monday it has acquired Citibank's Diners Club Card "merchant location" portfolio in Western Europe--which represents more than 75,000 merchants. This constitutes part of Citigroup's Diners Club credit card processing business, which Citi is shedding as it continues to offload unwanted assets, analyst said. In a separate deal, Elavon also signed an agreement with Diners Club International--a unit of Discover Financial Services. Under conditions of the deal, Elavon said in a statement it will provide funding, processing, and customer services for merchants that accept Diners Club International cards in several foreign countries and areas, including: Benelux, France, Germany, Switzerland and the United Kingdom (TheStreet.com Sept. 28) ...
- The average interest rate on conventional 30-year, fixed-rate mortgage loans of $417,000 or less decreased one basis point to 5.30% in August, the Federal Housing Finance Agency (FHFA) said Tuesday in statement. The average interest rate on 15-year fixed-rate loans of $417,000 or less increased three basis points to 4.92% in August. The rates are calculated from FHFA's Monthly Interest Rate Survey of purchase-money mortgages. Results are for loans closed during Aug. 25-31. Usually, the interest rate is determined 30 to 45 days before the loan is closed, FHFA said ...
Watch for fees on unemployment benefits
NEW YORK (9/30/09)--Thirty-one states have issued prepaid debit cards to reduce their costs to print and mail unemployment checks. While this helps cash-strapped states save money, consumers may end up paying fees on their use (SmartMoney.com Sept. 4).
Prepaid cards typically benefit the state, not the consumer. The state doesn't pay a fee to the banks issuing the card, and can save millions on printing and postage.
The banks get paid by the retailer when the consumer uses the card to make a purchase--in addition to any fees paid by the consumer.
Federal rules allow at least one free ATM withdrawal per benefit payment, but you may get charged up to $1.50 per transaction after that. Some states charge for an automatic transfer to your bank account.
If your transaction is declined because of nonsufficient funds, you also may be charged a fee. It's typically free to check a balance online, but you may pay if you check it at an ATM.
The best way to avoid misusing your unemployment earnings is to know what the rules and options are in your state. Direct deposit is usually a better option because of fewer or no fees. When filing for unemployment, be sure to ask about payment methods and get a copy of the fee schedule before you sign up for a prepaid debit card.
For more information, see "Tough Times Series: Steps Before, During Layoff Make It Easier to Cope" in Home & Family Finance Resource Center.
Economy an opportunity to grow card portfolio
FARMERS BRANCH, Texas (9/30/09)--Consumers have cut their spending given a slower economy, but credit unions have grown their card balances and acquired new cardholders, according to the Texas Credit Union League.
Recent card promotions developed and initiated by TNB Card Services brought in more than $11 million for credit unions and generated hundreds of new cardholders (LoneStar Leaguer Sept. 29). TNB Card Services, a division of Town North Bank, partners with credit unions to provide credit card portfolio services, debit programs and electronic payment solutions.
One of TNB's promotions, Tax Time Convenience Checks, generated $574,000 in new card balances for participating credit unions. The average check amount was $1,019.
One participating credit union, Fort Worth (Texas) Community CU, generated more than $170,000 in new balances.
"There was so much noise in the media about credit cards this spring that it made our members pay attention to our offer," said Rochelle Drake, vice president of marketing. "We brought in $50,000 more than a similar promotion the year before."
Credit unions also generated more than $10 million in new card balances, with an average transfer of $3,490.
The promotions indicate that credit unions can grow their card programs, even if the economy is not growing and consumer spending is down, said Mark Fenner, TNB senior vice president.
TNB provides credit unions with promotional materials. TNB also manages the implementation of the promotion and reports the results back to the credit union so it can focus on serving members, Fenner added.
Copyright © 2009 - Credit Union National Association, Inc.
