Headlines via Email
RSS Feed
What is RSS?
News Now Archive
Filed on October 2, 2009–October 4, 2009, published the first business day after.
- CUNA, N.M. CUs combine forces for campaign school
- Visa to Congress: Ignore merchant interchange claims
- Inside Washington
- CUs in media spotlight as ICU Day approaches
- KV FCU moving forward--as a CU
- Microsavings focus of rural microfinance meeting
- Federation awarded $750,000 CDFI Fund grant
- $137,000 fin lit grant OK’d for Vermont CUs
- Missouri honors CU achievements with awards
- Sen. Hagan headlines high school branch opening
- CU System briefs
- Market News
- News of the Competition
- Banks with 20% unpaid loans hit 18-year high
- Act now to lower your '09 tax bill
- CO-OP’s pace for Q3: One new contract a day
- Diebold sells pink vacuum air tube carriers for charity
CUNA, N.M. CUs combine forces for campaign school
WASHINGTON (10/5/09)--The Credit Union National Association (CUNA) last week completed the latest in a series of educational endeavors, holding its New Mexico Campaign School 2009 in conjunction with the Credit Union Association of New Mexico.
The campaign school, which is the second held in New Mexico, was attended by a number of state legislators. State campaign veteran Doug Turner, who is a candidate for the Republican Party's nomination for governor of New Mexico, served as a presenter during the campaign school.
 |
| CUNA Senior Vice President of Political Affairs Richard Gose leads campaign school attendees. (CUNA Photo) |
Former Democratic Governors Association Deputy Political Director Daniel Sena also appeared as a guest speaker during the one-day event, which was held in Albuquerque.
According to Hawkins, the ultimate goal of the campaign schools is to "train future elected officials on how to run professional campaigns and ultimately help elect more credit union members to office."
CUNA's schools have garnered significant results, with campaign school graduate Betty Ireland moving on to become West Virginia Secretary of State. Other successful campaign school alumni include Sharon Frederick, who was elected to the State of Nevada Board of Education, and Bob Kressig, who was elected to the Iowa State House.
CUNA has planned seven more campaign schools for the coming months, and also offers online courses for credit union representatives that are interested in political advocacy.
Visa to Congress: Ignore merchant interchange claims
WASHINGTON (10/5/09)--Visa has become the latest financial institution to weigh in on the interchange debate, saying that legislators and the public should not be swayed by the dramatic delivery by 7-Eleven executives of 15,000 booklets of signatures supporting interchange fee reforms.
The comments from Visa, reported recently in CardLine, echo the sentiments of the Credit Union National Association (CUNA) and other members of the electronic payment coalition. According to Visa, the merchants push toward interchange fee legislation is more about retailers looking to take advantage of consumers by having them help shift the burden of business costs onto themselves in the form of surcharges. Changing the current interchange fee structure would limit consumer options, competition and technological innovation, according to CUNA.
CardLine cited Visa research which found that 78% of consumers said that the benefits of accepting credit and debit cards outweigh the costs of accepting them for many retailers.
A report commissioned by MasterCard found that 80% of people who signed the 7-Eleven petition "mistakenly believed" that consumers would benefit from lower interchange rates. (See related story: MasterCard says 7-Eleven misled consumers on interchange)
Inside Washington
- WASHINGTON (10/5/09)--In a move to put Republicans on the defensive, House Financial Services Committee Chair Barney Frank (D-Mass.) said at a Thursday hearing that the Federal Reserve Board would benefit the most from their opposition to a consumer protection agency. The legislation being pushed by some Democrats would rid the Fed of its consumer protection powers in favor of a separate agency to oversee financial products and services in the market. The Fed has not taken a side on the matter, but it would lose part of its staff if the proposal passes (American Banker Oct. 2). Rep. Spencer Bachus (R-Ala.) said that Republicans do not oppose taking consumer protection responsibilities from the Fed. Rather, they oppose vesting the consumer protection powers into a new agency, which could limit choice. Bernanke said a more comprehensive approach to regulation is needed, and all federal financial supervisors and regulators should monitor risks in the financial system as part of their oversight responsibilities ...
- WASHINGTON (10/5/09)--Jeffrey B. Kindler and James S. Tisch have been elected to the Federal Reserve Bank of New York board as class B directors, the bank announced Thursday. Kindler will serve the unexpired portion of a three-year term until Dec. 31, and Tisch will serve the unexpired portion of a three-year term until Dec. 31, 2010. Kindler is chairman and CEO of Pfizer. Tisch is president/CEO of Loews Corp. The New York Fed board of directors has nine members, three of whom are appointed as Class C directors. The remaining six are Class A and B directors. Class A directors are drawn from the banking community, while Class B and C directors are chosen from outside the business community, and typically represent business, industry, agriculture, labor or consumers ...
- WASHINGTON (10/5/09)--National Credit Union Administration (NCUA) board member Michael Fryzel was named Honorary Grand Marshal of the Pulaski Day Parade held in honor of Polish General Casmir Pulaski, on Sunday. Fryzel is the first Polish American to be named to the NCUA board and to serve as chairman. He was presented with a plaque for his dedication and support of the credit union movement and his
role int the parade. Fryzel also acknowledged the work by Polish and Slavic FCU in Brooklyn, N.Y. "The credit union exemplifies what credit unions do best, give back to the community and provide the support for all types of events," he said. "They provide scholarships, support cultural events and continue to serve their members and meet their financial needs. I commend them for their efforts." From left are: Bodgan Chmielewski, CEO of Polish and Slavic FCU; Curtis Sliwa, CEO of Guardian Angels and grand marshal of the parade; and Fryzel. (Photo provided by the National Credit Union Administration) ...
- WASHINGTON (10/5/09)--Staff from the Credit Union National Association (CUNA) and the chairman of CUNA's Accounting Subcommittee, Scott Waite of Patelco CU, San Francisco, recently discussed credit unions' concerns on several current accounting issues--including expansion of the application of fair value when valuing loans and loan-related accounts such as the allowance for loan losses. They also discussed the range of potential difficulties that credit unions could face if the Financial Accounting Standards Board (FASB) makes such changes to fair value accounting standards. During a conference call with FASB Chairman Robert Herz and several senior FASB members, CUNA outlined some of the key differences between financial reporting of credit unions and of other financial institutions. Proposed changes to the fair value rule, which FASB expects to release as an exposure draft in the coming months, are still in development. On the call, CUNA urged Herz to consider the uniqueness of credit unions as the board proceeds through the rulemaking process. One board member asked CUNA representatives how certain exemptions in the rule might affect credit unions. CUNA is encouraged that FASB is at least aware that many smaller institutions, including credit unions, will have difficulty complying with the impending proposed changes to the fair value rule. Although an exact date has not been set, CUNA representatives said that they have been invited to have additional dialogues with the chairman and other members of FASB staff soon. Representing CUNA on the call were Deputy General Counsel and Senior Vice President Mary Dunn and Regulatory Counsel Luke Martone ...
CUs in media spotlight as ICU Day approaches
MADISON, Wis. (10/5/09)--As credit unions count down the days to Oct. 15--which is International Credit Union Day--some in Ohio and North Carolina are picking up the media spotlight for their efforts.
Ohio's credit unions will be featured this week, sharing their knowledge and resources to help members build sound financial futures, says the Ohio Credit Union League (eLumination Newsletter Sept. 30).
"The week preceding International Credit Union Week, the entire episode of the Ohio News Network's (ONN) Ohio & Company program will be dedicated to consumer finance issues, education and tips, courtesy of Ohio's credit unions and paid for by the Ohio Credit Union League," the league said.
ONN is carried by nearly every cable outlet in the state. The 30-minute news magazine program will feature three segments:
- Budgeting for everyday living and the upcoming holidays;
- Teaching kids money skills using MoneyAndStuff.info's free materials and resources; and
- How credit impacts your life and making smart decisions.
All the information will be available on "The Difference, YOU" website, OhioDifference.com, and viewers will be encouraged throughout the program to visit FindACreditUnion.com to locate a credit union to join.
The program will air Tuesday at 6:30 p.m., Wednesday at 10 a.m., Thursday at 11:30 a.m., and Friday at 11 a.m. and 7:30 p.m., reaching several different viewing audiences.
Also, in North Carolina, Charlotte Metro FCU Chief Marketing Director Nathan Tothrow was featured on WJZY's "Morning Buzz" show, educating listeners about what credit unions are, how they are different, and how one can join.
He also introduced the credit union's promotional spot, "You Can Do Better," that is airing online and in call center channels. The ad has increased membership applications 200%, he told show host Angela Golden. To view the show and the commercial, use the link.
KV FCU moving forward--as a CU
AUGUSTA, Maine (10/5/09)--Kennebec Valley FCU (KV FCU), whose members voted down a proposal to convert to a bank and merge with Kennebec Savings Bank, is looking toward business as usual as a credit union, says KV FCU's president, who said she will continue her plans to step down in March.
Beverly Beaucage, president of the $53 million asset, Augusta, Maine-based KV FCU, expressed "disappointment" at the vote's outcome to a local newspaper Morning Sentinel (Oct. 2). However, the credit union's managers and directors will move on as a credit union without seeking another merger partner, she said.
KV FCU will introduce some new member services that were put on hold during the merger process.
"This is a business, and when you hear from your base that it wants to go in a different direction, that's what you do," she told the newspaper.
She noted that the membership has been "quiet" for years and hadn't attended annual meetings. "In a sense, it's good to hear from the members." she said.
KV FCU Board Chairman Richard Tardiff issued a statement that the board members respect the credit union members' will and the democratic process.
The merger proposal spawned two member advocacy groups. KV Members Matter opposed the proposal and was supported by the Maine Credit Union League, according to league President John Murphy. KV Members Voting Yes for the Merger, which favored the merger, was supported by Kennebec Savings Bank. Both groups debated the merger proposal publicly in a series of letters to the editor of local newspapers.
The vote concluded Sept. 21 and was tallied by a New York City firm, said the article. Credit union officials did not ask for the exact vote tally or the number of members voting, Beaucage said, adding the credit union just wanted direction from its members.
Credit union officials had been planning the conversion for more than a year and had approached the bank about a possible merger. A merger between a bank and a credit union would have been the first of its type in Maine.
Plans were for Beaucage to serve in a management position at the bank if the merger succeeded. However, she planned to retire within months after the merger date. She said the merger has not prompted her retirement. She will leave in March after 21 years.
Microsavings focus of rural microfinance meeting
MEXICO CITY (10/5/09)--More than 500 people from Mexico and six other countries came together last week in Mexico City to learn how credit unions in Mexico are sustainably serving the rural poor, and how other credit unions can do the same.
World Council of Credit Unions (WOCCU) and the Proyecto de Asistencia Técnica al Microfinanciamiento Rural (PATMIR) project of the Mexican Ministry of Agriculture, Livestock, Rural Development, Fishing and Food (SAGARPA), co-hosted the two-day event on Rural Microfinance: Strategies for Reaching the Rural Poor. SAGARPA funds WOCCU's development program in Mexico.
The typical profile of a person living in poverty is that of an individual who understands and is accustomed to a credit culture, said Luis Jara, project director for WOCCU's Mexico program, during a presentation on Wednesday. Donor-funded development programs, as a result, have focused on providing microcredit to alleviate poverty in rural communities.
Recent research on microcredit programs, however, has questioned the effectiveness of this approach. Through the PATMIR project, WOCCU's focus in Mexico is to bring financial services to the poor and help them build assets through savings.
 |
| The general manager and board members of Caja Zongolica CU, located in the mountains of Veracruz state, attend a session on "Creating Opportunities for Rural Areas" by Margarito Saavedra, general manager of Caja Yanga CU at a two-day conference on Rural Microfinance: Strategies for Reaching the Rural Poor, held last week in Mexico City. |
 |
| Meeting after a press conference at a rural microfinance conference Tuesday are, from left, Luis Jara, World Council of Credit Unions; Jeffrey Max Jones, sub-secretary of agri-business strengthening, Mexican Ministry of Agriculture, Livestock, Rural Development, Fishing and Food (SAGARPA); Gabriela Zapata, SAGARPA/ Proyecto de Asistencia Técnica al Microfinanciamiento Rural; and Brian Branch, WOCCU executive vice president and chief operating officer (Photos provided by World Council of Credit Unions) |
"We always knew that people in rural areas save ... that the poor save in real goods such as animals, bricks, even tires," said Brian Branch, WOCCU executive vice president and chief operating officer. "Today, we know more about cash flows in rural households, that they depend on diverse sources of income--some agricultural, some not. With PATMIR's leadership, we have learned how to bring financial services to the member without constructing a branch office in every village. Currently, we are learning how to use technology to lower the costs of service delivery."
WOCCU's development program in Mexico helps credit unions expand services to underserved areas through its rural outreach methodology, semilla cooperativa [cooperative seed], which emphasizes savings mobilization. Credit unions train rural field officers to attract new members, extend financial education, approve small loan applications and bring credit, savings and remittance services directly to people living in remote areas up to 19 miles from branch offices.
New technologies and tools implemented through the program's credit unions debunk the myth that the poor are too expensive and risky to serve, WOCCU said. Personal digital assistants, handheld printers, point-of-service devices and plans for installing ATMs in rural areas help reduce the risks and costs of reaching marginalized communities by making transactions more efficient.
Credit unions also use a WOCCU-developed route-costing tool to identify viable areas for expansion.
The Mexico program is surveying 20,000 people living in rural areas to determine their true financial needs. Preliminary results reveal that 54% of members joined the credit union to access both savings and credit products, compared with 26%, who only wished to access credit.
Of the non-members surveyed, 46% were interested in both savings and loans, whereas 20% desired credit. The survey results will help the program create an accurate member profile and assist credit unions with tailoring their products and services.
"Savings and credit aren't new, but we're making headway in determining the best delivery method, mechanisms and packaging to best meet the needs of the poor," said Gabriela Zapata, director of financial organization strengthening with SAGARPA's PATMIR project.
The semilla cooperativa model outshines typical group lending programs because it is savings-based and serves both men and women, she added.
Many credit unions have said they do not reach out to the poor because it is too dangerous, expensive and difficult, and that it is not their market, Jara said. He explained that if you inspire confidence and trust in members, the credit union will grow.
Nineteen people from five countries also attended the second year of WOCCU's Manager Certification Program, a hands-on regional training program to give credit union managers tools to analyze and forecast the financial condition of their institutions.
Federation awarded $750,000 CDFI Fund grant
MILWAUKEE (10/5/09)--The U.S. Treasury's Community Development Financial Institutions (CDFI) Fund Friday announced awards totaling $52 million to 62 organizations that serve economically distressed communities nationwide, including the National Federation of Community Development Credit Unions and two credit unions.
The federation received a $750,000 award from the program. Neighborhood Trust FCU received $350,000 and Union Settlement FCU received $500,000. Both credit unions are located in New York City.
Financial assistance provided through the program helps CDFIs increase lending activities in underserved areas, according to CDFI Fund Director Donna J. Gambrell, who announced the awards in Milwaukee. It also helps organizations, including credit unions, to provide affordable financial products and services to low-income communities and populations.
"As we celebrate this national award announcement, we are also celebrating the work of these community-based lenders that enables the dreams of entrepreneurs to become realities," she said.
The CDFI Program is funded through an annual appropriation from Congress. The fund receives applications annually and awards funds through a competitive process. The fund has awarded more than $821 million since its inception.
The CDFI Fund received 452 applications from organizations nationwide, requesting more than $529 million in funding under the fiscal year 2009 round of the CDFI Program.
The awards complete the 2009 funding round by awarding the remaining funds to the most highly rated applicants in a pool that included:
- Applicants that submitted applications responding to the Notice of Funds Availability (NOFA) published in the Federal Register April 28; and
- Applicants that applied under the initial 2009 NOFA published Aug. 15, 2009, but did not receive a Recovery Act award in the first funding announcement.
$137,000 fin lit grant OK’d for Vermont CUs
MONTPELIER, Vt. (10/5/09)--A $137,000 federal grant to improve financial literacy among Vermont's high school student population has been approved for use by the Association of Vermont Credit Unions (AVCU).
With the grant's approval, the association has announced the launch of a state-wide, high school-based financial literacy program (Newslines Express Oct. 2).
"The Concerts for Financial Literacy ... presented by Vermont's Credit Unions" will weave together financial literacy education, music and social media interaction into a cohesive package targeted directly at the lifestyle and values of Vermont's 14- to 18-year-old population, the association said.
The educational components will be delivered through school presentations, social media sites like Facebook, Twitter, and YouTube, and through videos hosted on a new AVCU website dedicated to the program. Students at dozens of Vermont high schools can participate in online contests and special events to win the opportunity of hosting a Concert for Financial Literacy at their high school.
The concerts will feature professional musicians who have their own financial literacy messages to share, and student-musician groups selected from "Battle of the Bands" contests organized through the social media websites.
The concerts will take place in May, and the process will repeat in the fall of next year and the spring of 2011.
Missouri honors CU achievements with awards
JEFFERSON, Mo. (10/5/09)--The Missouri Credit Union Association (MCUA) recognized individuals for their credit union achievements during its convention and expo Sept. 23.
 |
| Longtime credit union volunteer Earl Ogolin, second from left, was honored by the Missouri Credit Union Association for his 60 years of service to the movement. With him are from left, sons Steve and Michael Ogolin and his wife Moni. (Photo provided by the Missouri Credit Union Association) |
MCUA showcased outreach efforts of 24 Missouri credit unions during an awards reception Sept. 22. The association honored winners of the Dora Maxwell Social Responsibility Award, Louise Herring Award for Philosophy in Action, and the Desjardin Youth Financial Education Award at the state level.
First place winners of the Dora Maxwell Social Responsibility Award in their asset categories include:
- Poplar Bluff (Mo.) FCU, $20 million to $50 million in assets;
- Central Missouri Community CU, Warrensburg, $50 million to $100 million;
- Mid Missouri CU, Ft. Leonard Wood, $100 million to $200 million;
- Neighbors CU, St. Louis, $200 million to $500 million; and
- CommunityAmerica, Kansas City, more than $500 million.
First place Louise Herring Award for Philosophy in Action winners were:
- Neighbors CU, $50 million to $250 million asset category; and
- Anheuser-Busch Employees' CU, St. Louis, more than $250 million.
Desjardins Youth Financial Education Award first place winners include:
- Central Missouri Community CU, $35 million to $75 million;
- St. Louis Community CU, $75 million to $250 million; and
- Vantage CU, Bridgeton, more than $250 million.
Electro Savings CU, St. Louis; St. Louis Community CU; and United CU, Mexico, also received platinum "You Make the Difference" achievement awards.
MCUA also honored Earl Ogolin, a long-time credit union volunteer, for more than 60 years of service to the movement. He was named to the Missouri Honor Roll. He has volunteered at First Missouri CU and Southpointe CU, both in St. Louis. His wife, Moni, and sons Michael and Steve, also work in the credit union movement.
Sen. Hagan headlines high school branch opening
GREENSBORO, N.C. (10/5/09)--U.S. Sen. Kay Hagan (D-N.C.) cut the ribbon to celebrate the opening of Allegacy FCU's fourth student-run credit union, Bobcat Student CU, at a local high school Sept. 21.
While celebrating the student branch's opening, Hagan also discussed the details of the Financial Literacy for Students Act of 2009, her first piece of legislation as a U.S. senator (Weekly Update Oct. 1).
"We've got to empower people to make smart financial decisions," Hagan said. She commended Winston-Salem-based Allegacy and R.B. Glenn High School, where Bobcat Student CU is located.
 |
| U.S. Sen. Kay Hagan (D-N.C.), center, cut the ribbon to celebrate the opening of Bobcat Student CU at a Winston-Salem, N.C., high school. The student-run credit union is a branch of Allegacy FCU, also located in Winston-Salem. (Photos provided by the North Carolina Credit Union League). |
 |
| Saving just a dollar or two a week adds up, North Carolina Credit Union League President John Radebaugh told students at the opening of Allegacy FCU's student-run branch at R.B. Glenn High School in Winston-Salem. |
One-third of adults in a recent Harvard University study didn't understand compound interest or how their credit card accounts work, Hagan said. The lack of basic financial knowledge at home underscores the need for financial education in the classroom, she added.
"Our students need to enter the work force with the skills to make smart financial decisions when applying for credit cards, securing student loans, taking out a mortgage or managing a budget," Hagan said.
Bobcat Student CU will be staffed by 10 student volunteers and a teacher liaison and will be open during lunch three days a week. The volunteers will accept deposits and help student manage their accounts. They also will receive course credit for their work.
North Carolina Credit Union League President John Radebaugh, who attended the opening, encouraged students to join the credit union and save money. "Even if it's only a dollar or two a week, it does add up," he said.
CU System briefs
- RANCHO CUCAMONGA, Calif. (10/5/09)--The Richard Myles Johnson (RMJ) Foundation, the state foundation for credit unions in California and Nevada, has donated $17,200 in two grants for youth financial literacy efforts. Educational Employees CU, Fresno, received $10,000 to help fund the opening of a student credit union branch at Clovis West High School. Junior Achievement (JA) of Sacramento received $7,200 for its classroom presentation program. The funds will help provide financial education to 328 students in 14 elementary school classrooms next May. Volunteers from SAFE CU, North Highlands, and The Golden 1 CU, Sacramento, will present the program. The grant will fund classroom materials for the volunteers ...
- PEARL RIVER, N.Y. (10/5/09)--Palisades FCU, based in Pearl River, N.Y., offered unleaded gasoline at $1.99 per gallon Saturday from 9 a.m. to 1 p.m. as a thank you to the community and its New City neighbors for accepting the credit union into the community and making the New City branch a success. The gas station is diagonally across from the branch. The credit union said before the event it expected a large turnout ...
- HOUSTON (10/5/09)--Houston-based Primeway FCU has created a website to assist Houstonians who have been laid off from their jobs. LaidoffinHouston.com features free financial counseling, links for state unemployment and job searches, and financial advice, as well as resume, interviewing and networking tips. Other information includes how to file for unemployment and what an unemployed individual's next financial steps should be. The credit union has $261 million in assets (Houston Business Journal Oct. 2)...
- INDIANAPOLIS (10/5/09)--FORUM CU, a $1 billion asset credit union based in Indianapolis, has introduced its new Sprout youth savings account for youth ages 0 to 18 to save money for college, car, down payment on a home and more. Sprout is similar to a 529 Plan or Coverdell Education Savings Accounts in that it earns interest and applies certain penalties for early closure or withdrawals. However it does not require the owner to use the money specifically on school. FORUM CU will match 10% of deposited funds per calendar year, based on different tier levels. No minimum deposit is required. The account matures when the account owner turns 18 and automatically transfers into the owner's savings account ...
Market News
MADISON, Wis. (10/5/09)
- The U.S. unemployment rate rose one percentage point to 9.8% in September from 9.7% in August as the economy lost 263,000 jobs--substantially more than the 175,000 expected--according to the Labor Department's monthly report issued Friday. September's figures dampen the prospect of meaningful job growth by the end of the year, analysts said. The biggest job losses were in construction, government, manufacturing and retail trade. September's unemployment rate is the highest since 1983. "Only profitable firms will hire workers, and we don't have any assurance that firms will be profitable for the next year," said Guy LeBas, chief economist at Janney Montgomery Scott LLC. "Consumer spending is going to be constrained by weaker incomes" (Bloomberg.com Oct. 2). Since the beginning of the recession in December 2007, the number of unemployed people has risen by 7.6 million, and the unemployment rate has doubled to 9.8%, analysts said (The New York Times and The Wall Street Journal Oct. 2) ...
- The U.S. future inflation gauge (FIG) for September rose to 90.6 from 89.7 in August, according to the Economic Cycle Research Institute (ECRI). The smoothed annualized growth rate increased to 12.1% from 6.6%. For the past six months, the FIG has been steadily trending higher, although it remains low overall, analysts said. The FIG is starting to indicate nascent inflation pressures down the road, they added. U.S. economic recovery is either near or already underway, but it will be too weak to cause renewed inflation, analysts said (Moody's Economy.com Oct. 2) ...
- Orders for U.S. manufactured goods dropped 0.8% in August after registering a 1.4% rise in July, according to the Census Bureau. Orders, excluding transportation, increased 0.4%. Orders for durable goods fell 2.6% during August, and nondurable goods orders/shipments rose 0.8%. Reversing the July gain, overall shipments fell 0.3% in August. Inventories continued to decrease and the inventory to sales (I/S) ratio slipped down to 1.38 months (Moody's economy.com Oct. 2) ...
News of the Competition
MADISON, Wis. (10/5/09)
- A federal court-appointed examiner is investigating whether the Federal Reserve improperly superseded other creditors in obtaining payment during Lehman Brothers Holdings, Inc.'s $613 million bankruptcy proceedings. The examiner is probing into how the Fed and the New York Fed--which lent $46 billion in cash and securities to Lehman before its bankruptcy filing in September 2008--were quickly paid in full, while the repayment of tens of billions of dollars in other debts were mired in court proceedings (The Wall Street Journal Oct. 2) ...
- The World Bank could find its funding constrained within a year if demands on the bank wrought by crises continue at their record pace, and wealthier countries don't infuse more cash into the system, said bank President Robert Zoellick. The World Bank gave a record $33 billion in the fiscal year through the end of June, and is on track to lend another $40 billion this fiscal year, Zoellick said. The bank currently has $100 billion available for middle-income countries. The poorest countries obtain lending from the World Bank through different means and rates, analysts said. If the bank's money runs short, it may have to ration funds, they added. "By the middle of next year, we will start to face serious constraints," Zoellick said. "We are seeing, as we look into 2011, that we'll go through that $100 billion and probably beyond" (The New York Times Oct. 2) ...
- Bank of America's (BofA) board sanctioned a $713 million dividend payment on preferred stock issued to the Treasury Department--a component of last year's $700 Troubled Asset Relief Program (TARP) sponsored by the federal government. BofA received $45 billion in TARP payments in two stages. In exchange, the government will receive preferred stock in the bank and quarterly dividends. BofA will pay the $713 million in dividends Nov. 16 The New York Times Oct. 2) ...
- A Citigroup Inc. unit will pay a fine to the Commodities Futures Trading Commission (CFTC) for failure to file timely annual reports. Citigroup Private Bank GP Inc.--a commodity pool operator--will pay a $100,000 fine for the violation, CTFC said. Citigroup neglected to file timely reports for fiscal years 2004 through 2007, the commission added. Federal regulations stipulate that annual reports must be filed no later than 90 days from the close of a commodity pool's fiscal year (Dow Jones Newswires via American Banker Oct. 2) ...
Banks with 20% unpaid loans hit 18-year high
NEW YORK (10/5/09)--U.S. lenders unable to collect on at least 20% of their loans now total 26, which is an 18-year high, according to data compiled for Bloomberg News by Charlottesville, Va.-based SNL Financial, a bank research firm.
The number indicates that more failures and losses could slow down the economy's recovery, said Bloomberg News (Oct. 2).
The 26 firms have more than one-fifth of their loans either 90 days overdue or not accruing interest as of June 30. SNL Financial said the level of distress is nearly five times the national average. The firm based its report on Federal Deposit Insurance Corp. (FDIC) data.
Zombie banks may not be forced to close by regulators, but requiring them to raise capital and tighten lending could get in the way of the economic recovery in nine states, said Bloomberg. Seventeen of the 26 banks have been hit with penalties or orders to improve capital and management.
The cost of this year's failures to the FDIC equals 25% of the banks' assets. The 26 lenders on the SNL list--with assets totaling $14.1 billion--could cause $3.5 billion more in losses to FDIC. The agency had 416 companies on its "distressed" list at mid-year.
Non-current loans averaged 4.35% of the total at U.S. banks as of June 30, according to FDIC data. Regulators typically take note at 5%, according to a former state regulator in California.
The last time so many banks had 20% of their loans more than 90 days overdue was in 1991, toward the end of the savings-and-loan crisis. Then the total was 60 banks. In 1991, the number of bank failures was less than half the number at the peak of the 1988 crisis. This year's closings are about four times the number of closings in 2008.
The story appeared Friday before the FDIC announced the 96th bank closure of 2009, with Michigan's Warren Bank being assumed by Huntington National Bank of Columbus, Ohio.
Act now to lower your '09 tax bill
WASHINGTON (10/5/09)--The government has tweaked the tax laws to give you more opportunity to save on your 2009 taxes.
Don't wait until you file in 2010--act now or you'll miss the full advantage of some of these tax savings (Kiplinger.com Sept. 21).
- Make or increase your 401(k) contributions. Your 401(k) contributions come off your paycheck before taxes are withheld and reduce your taxable income immediately. Many employers match a percentage of your contribution. Take advantage of this opportunity for "free money." You can make regular contributions or a one-time contribution up to $16,500 (plus an extra $5,500 if you're 50 or older) in 2009. In addition to the immediate payoff, within certain income limits you can take advantage of the Saver's Credit to trim your 2009 tax bill up to $1,000 (single filer) or $2,000 (joint filers). The Saver's Credit is available in addition to any other tax savings that apply.
- Buy a house. If you or your spouse haven't owned a home in the past three years, you can qualify for a tax credit of 10% of the purchase price, up to $8,000. You don't have to repay this credit unless you sell the home within 36 months. You must complete your home purchase on or before Nov. 30 (The Leaf Chronicle Sept. 25).
- Buy a new car. If you buy a new car between Feb. 16 and Dec. 31 this year, you may be eligible for special state and local tax deductions. This is true whether or not you itemize deductions on your return. The amount of the deduction phases out if your modified adjusted gross income is between $125,000 and $135,000 (individual filers) or between $250,000 and $260,000 (joint filers).
- Pay college bills. If you pay at least $4,000 in tuition, fees, and course materials in 2009--from a source other than a 529 or Coverdell--you can qualify for the American Opportunity Credit of up to $2,500. The new credit modifies the existing Hope Credit, making it available to more taxpayers than in 2008--those with higher modified adjusted gross incomes (up to $80,000 single filer and $160,000 joint filers) and those who owe no tax. The credit phases out if your income is above these levels.
- Give to a charity. If you itemize deductions, write off your 2009 cash and non-cash donations to charity. You can also deduct transportation and other out-of-pocket costs, such as the costs of ingredients for a dish you make for a nonprofit's soup kitchen.
CO-OP’s pace for Q3: One new contract a day
RANCHO CUCAMONGA, Calif. (10/5/09)--CO-OP Financial Services said it obtained on average more than one new contract from credit unions every day for three months--for a total of 101 contracts--during the third quarter of 2009.
The company signed 202 contracts so far this year from 27 states and the District of Columbia. About 68 were agreements for access to the CO-OP Network, which provides credit union members with access to 28,000 surcharge-free ATMs nationwide.
CO-OP also said it received 14 credit union contracts and six business agreements for CO-OP Mobile, CO-OP's mobile banking software, from July through September.
Based in Rancho Cucamonga, Calif., CO-OP Financial Services is a credit union service organization that offers ATM, debit processing and other products.
Diebold sells pink vacuum air tube carriers for charity
NORTH CANTON, Ohio (10/5/09)--October is Breast Cancer Awareness Month, and ATM manufacturer Diebold is ramping up its "Partners in Pink" campaign to spread awareness and raise money for Susan G. Komen for the Cure Northeast Ohio.
The company will sell pink vacuum air tube (VAT) carriers to customers with Diebold and others' drive-thru systems. One dollar from the sale of each carrier will be donated to the Komen Northeast Ohio Chapter for cancer research. Diebold is based in North Canton, Ohio.
The proceeds donated to Komen also contribute to payments for free mammograms for women in need, the company said.
"It is our goal to blanket the country with pink VAT carriers, and to help spread awareness of the leading cause of death among women, with the hope that every Diebold pink VAT carrier sold will bring the world one step closer to finding a cure for breast cancer," said David Bucci, Diebold senior vice president of customer solutions.
Copyright © 2009 - Credit Union National Association, Inc.
