Headlines via Email
RSS Feed
What is RSS?
News Now Archive
Filed on October 27, 2009, published the first business day after.
- Dodd rate-freeze bill may move quickly to a vote
- NCUA slates free Nov. 18 MBL webinar
- CU comments on Fed Card Act rule due soon
- 30-year mortgage rate drops, reports FHFA
- Inside Washington
- USA Today reports on CUs’ save-for-college efforts
- Biz Kid$ beats out Disney, Nickelodeon for green award
- Private insurer: Cumorah acquisition benefits both CUs
- New York league president testifies at state hearing
- Public funds legislation introduced in Ohio
- Maryland official supports fin lit graduation requirement
- Iowa foundation homeowner ed receives state award
- Sacramento CUs on leading edge with scanned deposits
- CUs host holiday webcasts for troops’ families
- CU System briefs
- Expect weak consumer holiday spending, CUNA to AP
- Market News
- Deposit interest rates tied to unemployment rates
- News of the Competition
- Brace for open enrollment changes, price hikes
- Digital Mailer aligns with Standard Register for CUs
- Products and Services brief
Dodd rate-freeze bill may move quickly to a vote
WASHINGTON (10/28/09)--Legislation that would freeze credit card interest rates and fees until the recently-passed Credit Card Accountability, Responsibility and Disclosure (CARD) Act comes into full effect has been fast tracked and could soon be voted on in the Senate.
Commenting on S.1927, introduced on Monday, Sen. Chris Dodd (D-Conn.) said that the bill was an effort to combat the practices of credit card companies that "have been jacking up rates in a last ditch effort to squeeze customers before all of the bill's provisions can take effect."
The legislation would end many of the abuses of credit card companies that are "looking for ways to get around the protections this Congress and the American people demanded" and would "further protect customers today," Dodd added.
The Credit Union National Association is currently analyzing the legislation. "We're taking a look at the bill and talking with our members about the potential impact if would have on their operations," said Ryan Donovan, vice president of legislative affairs.
The House Committee recently passed legislation that accelerates the effective date of the CARD Act from Feb. 22 to Dec. 1, and that legislation is awaiting a vote in the full House or Representatives.
CUNA worked with legislators to add an amendment that would exempt depository institutions with under 2 million credit cards in circulation from the expedited effective dates contained in the bill. CUNA also supported an amendment that would strike expedited effective dates for gift cards from the bill.
NCUA slates free Nov. 18 MBL webinar
Alexandria, Va. (10/28/09)—The National Credit Union Administration (NCUA) Tuesday announced a Nov. 18 webinar to outline the regulators' perspective on member business lending.
The 90-minute webinar, starting at 1 p.m. ET, is free and open to the public.
The session, the agency said in its announcement, will draw from the diverse expertise at the NCUA Central Office, NCUA Regional Offices and state regulators. It will provide "guidance, best practices and insight into examination of member business lending," and the session will be interactive with Q-and-A an integral part of the presentation.
The agency moderator will be board member Gigi Hyland. NCUA Panelists include:
- Linda Jekel, director of Credit Unions for the state of Washington, Division of Credit Unions;
- Erika Eastep, Member Business Lending Program Officer, Office of Examination and Insurance, NCUA; and
- Linda Vick, Agricultural and Commercial Lending Specialist, Region IV, NCUA.
A registration link for the webinar will be posted online at www.ncua.gov with the next few days.
CU comments on Fed Card Act rule due soon
WASHINGTON (10/28/09)--As the Credit Accountability, Responsibility and Disclosure (CARD) Act continues to come under the spotlight on Capitol Hill, it also is the focus of some upcoming regulatory actions.
Credit unions have until Nov. 20 to comment on a Federal Reserve Board plan to implement portions of the CARD Act. The proposal addresses provisions of the CARD Act that limit minimum payment warnings to credit cards and prohibit interest rate increases for existing balances and during the first year the account is opened.
The Fed has also asked for input on portions of the act that require the consent of consumers before fees can be charged on over-the-limit accounts and require co-signors for cardholders less than 21 years of age, unless they can prove that they can make the minimum payments.
In Congress, the compliance date of certain CARD Act provisions could be moved up for some issuers to Dec. 1 by a bill approved by the House Financial Services Committee. An amendment that would exempt depository institutions with under 2 million credit cards in circulation from the expedited effective dates contained in the bill, offered by Rep. Shelley Moore Capito (R-W.V.) and Rep. Brad Sherman (D-Calif.), was added to the legislation via voice vote.
Sherman also joined Rep. David Scott (D-Ga.) to offer an amendment to strike from the bill the expedited effective dates for gift cards. This amendment was also added via voice vote.
The Senate may also soon take up H.R. 3606, the CARD Act Technical Corrections Act, which, if passed by the Senate and signed into law by the President, would clarify that a 21-day disclosure requirement for late payments applies only to credit card accounts and not to all open-end credit.
The Credit Union National Association has also requested comments on the Fed proposal from credit union industry insiders in a recently published comment call. CUNA is accepting comments until November 10, 2009.
To see the CUNA comment call, use the resource link.
30-year mortgage rate drops, reports FHFA
WASHINGTON (10/28/09)—The average interest rate on conventional 30-year, fixed-rate, mortgage loans of $417,000 or less dropped by seven basis points in September, down to 5.23%, the Federal Housing Finance Agency (FHFA) reported yesterday.
The rate for shorter-term loans--15-year, fixed-rate loans of $417,000 or less—averaged an increase of 15 basis points, up to 4.77%.
In its Monthly Interest Rate Survey for September , the FHFA also reported:
- The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 5.15%, which was down from 5.23% in August; and
- The effective interest rate, reflecting the amortization of initial fees and charges, was 5.24%, a decrease of nine basis points from 5.33% the month before;
Use the resource link below to read more.
Inside Washington
- WASHINGTON (10/28/09)—The House Financial Services Committee made the following series of announcements late Tuesday. The committee and U.S. Treasury Department released draft legislation to address the issue of systemic risk and "too big to fail" financial institutions. The draft bill would: Create a monitoring system intended to reduce the threats that systemically risky firms pose to the financial system; establish a process closing large, financially troubled nonbank financial institutions in a way minimizes impact on U.S. taxpayers and the financial system; and overhaul the country's financial regulatory system. The committee also voted 67-1 in favor of the Private Fund Investment Advisers Registration Act of 2009 (H.R. 3818), a bill to require more financial providers to register with the Securities and Exchange Commission. The committee reconvenes today to continue consideration of the discussion draft of the Accountability and Transparency in Rating Agencies Act and the discussion draft of the Investor Protection Act of 2009...
- WASHINGTON (10/28/09)--National Credit Union Administration (NCUA) board member Michael Fryzel visited with Mark E. Easton, deputy chief financial officer for the Department of Defense, and Arty Arteaga, president/CEO of the Defense Credit Union Council, in Washington, D.C. They discussed credit unions' products and services for military members. "Credit unions located on our military bases and at Department of Defense facilities across the globe, are dedicated to providing financial services to the millions of men and women who serve our country," Fryzel told the group. Arteaga, Easton and Fryzel also talked about pending congressional actions on credit card issuers, returned checks and consumer protection that would affect credit unions ...
- WASHINGTON (10/28/09)--The Missouri Credit Union Association (MCUA) traveled to Washington, D.C., Oct. 21-22 to meet with its federal lawmakers. MCUA Senior Vice President of Public and Legislative Affairs Peggy Nalls, and Vice President Amy McLard
followed up on several issues credit unions raised with their lawmakers in August and September. These included the Credit Card Accountability, Responsibility and Disclosures Act; small business lending; the proposed consumer financial protection agency; interchange fees and the Community Reinvestment Act. MCUA met with Rep. Ike Skelton (D); staff of Sens. Christopher Bond (R) and Claire McCaskill (D); U.S. Rep Russ Carnahan (D); U.S. Rep Emanuel Cleaver (D); Rep. Roy Blunt (D) and staffer Brian Diffel; U.S. Rep. Blaine Luetkemeyer (R) and staffer Chris Brown; and staffers from the offices of U.S. Reps. Todd Akin (R), William Clay (D), Jo Ann Emerson (R) and Sam Graves (R). From left are Nalls (left) and Rep. Skelton. (Photo provided by the Missouri Credit Union Association) ...
- WASHINGTON (10/28/09)--Regulators are divided on how to boost the Federal Deposit Insurance Corp.'s (FDIC) Deposit Insurance Fund (DIF). During a meeting, FDIC Chairman Sheila Bair said she supported requiring banks to pre-pay three years' worth of premiums to funnel $45 billion into the fund (American Banker Oct. 27). John Dugan, comptroller of the currency, and John Bowman, acting director of the Office of Thrift Supervision, said it would be better if banks could pay the assessment over time. Jim Marcuccilli, president/CEO of Star Financial Bank, Fort Wayne, Ind., said the DIF should be infused by a credit line from the Treasury. Two other FDIC board members, Marty Gruenberg and Tom Curry, are expected to support the pre-pay assessment plan. Comments on it are due today ...
- WASHINGTON (10/28/09)--Critics of the regulatory reform plan that would place power into one agency should be focusing on the Treasury Department instead of the Federal Reserve Board, financial observers say (American Banker Oct. 27). The Treasury could end up overseeing systemic risk, according to several proposals in Congress. Giving the Treasury a bigger role could ignite political concerns, some observers say, but others say giving Treasury a more direct role makes sense. Douglas Elliott, Brookings Institution fellow, says Treasury will always have the authority in a systemic failure because taxpayers will have to back up the failed institution. The Treasury also could have a hand in deciding which systemically risky firms go into receivership. The Obama administration has proposed giving Treasury the authority to appoint an agency to be the receiver for a systemically important institution. However, critics say that would give the Treasury too much authority. Phillip Swagel, former Treasury assistant secretary for economic policy in the Bush administration, says he disagrees with allowing Treasury to spend money without congressional approval ...
USA Today reports on CUs’ save-for-college efforts
WASHINGTON (10/28/09)--A USA Today article published Tuesday noted credit unions' efforts to help parents and youth save for college in a turbulent economy.
The article, "Banks, credit unions offer help saving for college," mentioned Justice FCU, Chantilly, Va., and Grow Financial FCU in Tampa for their college savings efforts.
Justice offers a discount on loans to pay for college. Grow is donating money to student scholarships based on a local college football team's "return yards"--which is how far a football player runs after receiving a punt or kick (USA Today Oct. 26).
Peter Sainato, CEO of Justice FCU, also told the newspaper that "everyone is feeling the stress of the economic downturn" and that many college savings account values have decreased.
"We are trying to help people through this difficult time," he added.
Justice FCU has $477 million in assets. Grow Financial FCU has $1.7 billion in assets.
Biz Kid$ beats out Disney, Nickelodeon for green award
SEATTLE (10/28/09)--Biz Kid$, the youth-focused and credit union-funded financial education show on public television, received the Environmental Media Award in the category for Children's Live Action Monday, beating out shows from Nickelodeon and Disney.
Biz Kid$ won for its episode, "The Green Economy & You," which first aired on March 5. The episode teaches kids how businesses can go "green" and includes stories of young entrepreneurs, such as a 12-year-old who sells eco-friendly lunch bags.
Also nominated in the category were Disney's Suite Life on Deck and Nickelodeon's iCarly.
Biz Kid$ Executive Producer Jamie Hammond was thrilled to be singled out by the only awards program devoted to celebrating the entertainment industry's creative environmental efforts. "The other shows in the category are so great. We are truly honored," Hammond said.
The award, presented by the Environmental Media Association (EMA) during its 20th anniversary awards ceremony, recognizes the live action children's show that best increases public awareness of environmental issues and inspires personal action on these issues.
"Biz Kid$ is all about educating children about the importance of planning and responsibility. These lessons are as pertinent to financial success as they are to environmental awareness," Hammond said.
Earlier this year, Biz Kid$ was honored with an Emmy Award and the credit union industry's Herb Wegner Award.
Washington Credit Union Foundation Director RoxAnne Kruger helps oversee exclusive underwriting of the first three seasons of Biz Kid$ by America's Credit Unions, a coalition of nearly 200 credit unions, credit union foundations, non-profits, service providers and individuals.
"From this show's inception, credit unions understood what a powerful resource it could be for educating youth. We couldn't be happier that others are seeing that value, too," Kruger said.
The program, which is filmed in Seattle, began airing its second season nationwide in January. It is available to 97% of public television stations.
Private insurer: Cumorah acquisition benefits both CUs
DUBLIN, Ohio (10/28/09)--Credit Union 1's acquisition of Las Vegas-based Cumorah CU is positive because it joins two organizations that can benefit from each other, according to the CEO of Cumorah's private share insurer.
Cumorah was closed Friday by state regulators and its assets and deposit shares were assumed by Credit Union 1, Rantoul, Ill. American Share Insurance (ASI), a private share insurance company in Ohio, is Cumorah's liquidating agent.
"I think [the merger] is a good move," Dennis Adams, CEO of ASI, told News Now. "The right steps were taken to preserve the credit union movement in Nevada and to preserve member service [at the credit union]."
The "marriage" between the two organizations will give the credit unions an opportunity to collaborate using each other's strengths. For instance, while Credit Union 1 specializes in more traditional lending, like auto loans, Cumorah focuses on mortgages. The move will also help them diversify risk, Adams said.
"They can play off each other in a positive way," he added.
Paul Simons, CEO of Credit Union 1, agreed that the acquisition was a good opportunity.
"It's a great way to diversify what we do in Illinois," he told News Now. "There's a lot of opportunity [for both credit unions]."
Simons was appointed interim CEO at Cumorah before the announcement was made that the $574 million asset Credit Union 1 would take over Cumorah's deposits and assets. He said Cumorah experienced delinquencies in its commercial real estate (CRE) loans.
Cumorah is a very well-run credit union that had successfully done commercial real estate lending for years, Simons emphasized. But when the housing market collapsed in Nevada, the credit union suffered losses.
On Monday, when local news outlets reported that Cumorah had been closed, members called staff at the credit union to find out what happened. Call volume and branch volume were higher that day, but by 11 a.m., all was "back to normal," Simon said. "[The members] are fine."
It's also important that the term "Cumorah" is kept in the credit union's name. Cumorah is currently being referred to as a "division of Credit Union 1," Simons said.
One change that Cumorah members will see involves rate structures. Credit Union 1 members, regardless of their location, pay the same rates on products and services. Nevada's rates are currently depressed because of a struggling state economy. When the rate pricing structure is adjusted at Cumorah to match Credit Union 1's rates, Cumorah members will benefit, Simons said.
Credit Union 1 doesn't engage in business lending and doesn't plan to in Nevada. It will stick to single-family mortgages and auto loans, Simons said.
Several out-of-state credit union acquisitions have taken place recently--such as Alaska FCU's acquisition of High Desert CU in Apple Valley, Calif. Simons said his credit union's acquisition of Cumorah occurred under unique circumstances.
"I don't see in the future that it will be prevalent," Simons said. "It's a window of opportunity that closes."
Despite Cumorah's failure, ASI's Adams said its insurance funds remain strong. While any loss event will deplete reserves, ASI's group equity ratio will remain in a "good range," Adams said.
As of June, ASI insured 157 credit unions in nine states: Ohio, Indiana, Illinois, Idaho, Nevada, California, Texas, Alabama and Maryland. The Credit Union 1 and Cumorah acquisition is ASI's first.
Cumorah is the third credit union in Las Vegas to fail this year and the first privately insured Nevada credit union to be closed since the nation's financial crisis began (Las Vegas Review Journal Oct. 24).
Cumorah, with $147 million in assets and $129 million in deposits, has 60 employees, two offices in Las Vegas and two in Henderson (Las Vegas Sun Oct. 23).
Credit Union 1 now has 29 branches--four in Nevada, 23 in Illinois, and two in Indiana.
New York league president testifies at state hearing
ALBANY, N.Y. (10/28/09)--Credit Union Association of New York President/CEO William J. Mellin testified on behalf of the credit union community at a state Assembly Banks Committee hearing Friday in New York City.
 |
| Credit Union Association of New York President/CEO William J. Mellin testifies on behalf of the credit union community at a state Assembly Banks Committee hearing Friday in New York City. |
The hearing was called to determine what level of regulatory authority the state should exercise to protect its financial service entities and consumers. Also addressed was the possible enactment of federal legislation that would create a new Consumer Finance Protection Agency.
Others testifying included Richard Neiman, superintendent of the state Banking Department and Michael Smith, CEO of the state bankers association.
During his testimony, Mellin emphasized the unique and important role New York credit unions play in the financial services marketplace and their ability to help New Yorkers recover from the current economic challenges.
He also reminded the committee that credit unions' cooperative, not-for-profit structure and mission of creating financial independence for their members prevented them from contributing to last year's financial crisis.
"Credit unions take great pride in truly knowing their members," Mellin said. "As a result, our mortgages are not packaged and overseen by an institution in a far-off state. In fact, many of our institutions hold substantial mortgage portfolios. It is not a coincidence that credit unions have been lauded as the example of what is right with the financial services industry throughout this downturn in the economy," he added.
When asked about the future of the dual chartering system, Mellin said "the dual regime of state and federal regulators, as well as charter choice, allows for competition, diversity and innovation--elements that remain critical for our state's consumers and financial institutions."
He also referenced President Barack Obama's March 2009 recommendations to Congress (Financial Regulatory Reform: A New Foundation) and encouraged the committee to reaffirm those recommendations. In the report Obama recognized the value of credit unions' dual chartering system and recommended maintaining state supervision, dual chartering and an independent credit union regulator.
"While there is no question that enhancing consumer protection is a laudable goal given the economic climate, it must be accomplished in a manner that builds on existing regulatory success without undue regulatory burden for financial institutions," Mellin concluded.
After his testimony, he said, "The hearing was an excellent opportunity to again highlight the credit union difference and how we are helping millions of New Yorkers in communities across our great state."
Public funds legislation introduced in Ohio
COLUMBUS, Ohio (10/28/09)--As expected, legislation was introduced Oct. 16 in the Ohio House of Representatives to allow Ohio credit unions to be eligible depositories for public funds under state law.
House Bill 317, jointly sponsored by Majority Floor leader Tracy Heard (D-Columbus) and State Rep. Peter Ujvagi (D-Toledo) and 20 additional co-sponsors, would include credit unions as eligible depositories for the state, communities, schools and other public systems (InfoSight Compliance eNewsletter Oct. 26).
The bill also would allow credit unions to participate in the Ohio Department of Development's Minority Business Enterprises Program and Capital Loan Program for small businesses.
Under the provisions of H.B. 317, members would have access to linked deposit programs from the Ohio Treasurer through their credit union.
"The ability of credit unions to participate in these programs would benefit the citizens, businesses, communities and public entities in Ohio," said John Koslowski, general counsel for the Ohio Credit Union League.
This is the second time the league has tried to pass legislation so credit unions can accept public deposits. The last attempt was in 2004. The league wants to help credit unions accept public deposits because many local communities, schools, municipalities and townships have come to the state's credit unions looking to do business, the league said (News Now Oct. 19).
Maryland official supports fin lit graduation requirement
COLUMBIA, Md. (10/28/09)--Maryland Comptroller Peter Franchot announced his support for a standalone financial literacy course as a high school graduation requirement, a goal supported by the Maryland and District of Columbia Credit Union Association (MDCCUA).
Franchot made the announcement at a Maryland Board of Public Works meeting on Oct. 21. The board consists of Gov. Martin O'Malley and state Treasurer Nancy Kopp, both of whom were present at the meeting, said MDDCCUA (Focus Newsletter Oct. 26).
Franchot noted that the "principles of financial literacy are essential building blocks to a lifetime of economic security, and are every bit as vital to a good education as reading, writing and math. Financial literacy needs to be taught in our schools."
Dr. Charlene Dukes of the Maryland State Board of Education (MSBE) updated the public works board on the progress of the State Task Force on Financial Literacy, especially MSBE's plan to develop a K-12 state curriculum for local use. MSBE hopes to present a draft curriculum to local school superintendents by December.
MDDCUA has been active in its support for financial education, saying it believes financial education should be promoted within Maryland's schools. It is a member of the Maryland Coalition for Financial Literacy and its CEO, Mike Beall, is a member of the coalition's Executive Committee.
Other credit union community members of the coalition include Rob Windsor, CEO, First Financial FCU; Richard Webb, CEO, Atlantic Financial FCU; Dorothea Stierhoff, senior public affairs specialist with MECU; and Kalimah Mathews, business development manager, Signal Financial FCU.
The task force has created two subcommittees, both with credit union input. Chris Conway, MDDCCUA board member and CEO of Educational Systems FCU, is a member of the Advisory Committee, and Brian Tate, MDDCCUA vice president of legislative affairs, is a member of the Design Committee.
Iowa foundation homeowner ed receives state award
DES MOINES, Iowa (10/28/09)--The Iowa Credit Union Foundation (ICUF) was recognized by state Attorney General Tom Miller and the Iowa Home Ownership Education Project (IHOEP) for ICUF's efforts to provide home ownership education.
 |
| The Iowa Credit Union Foundation (ICUF) received an award for its efforts to provide home ownership education from the state and from the Iowa Home Ownership Education Project (IHOEP). From left are Iowa Attorney General Tom Miller, ICUF Executive Director Marybeth Foster, and Stephanie Preusch, IHOEP executive director. (Photo provided by the Iowa Credit Union Foundation) |
The recognition was made during IHOEP's Annual Fall Conference in Des Moines. Marybeth Foster, ICUF executive director, accepted the award on behalf of the foundation.
The foundation's primary focus is to eliminate poverty in the state by helping Iowans build wealth, responsibility and independence through its programs, grants and scholarships.
It offers an individual development account (IDA) program through the state's credit unions. IDAs are matched savings accounts where the depositor's savings are matched by a grant from another organization. The saver earmarks the savings and matching funds to purchase a specific asset--such as a home, a new or expanded business, education or training, or a vehicle to get to work. Participants must meet income guidelines to qualify and must participate in financial education seminars.
"Home ownership is the most popular asset choice in the IDA program," said Foster. "The money saved in an IDA can be used toward down payment, closing costs and other fees associated with buying a home."
Sacramento CUs on leading edge with scanned deposits
SACRAMENTO, Calif. (10/28/09)--Two credit unions in Sacramento, Calif., are on the leading edge in the field of check/share draft deposits, according to a local newspaper.
Earlier this month, Sacramento-based Schools Financial CU announced its new service allowing members to scan checks at home and deposit them into their account via the Internet. The service requires the member to have a digital scanner and a computer with an Internet connection.
Another credit union, Golden 1 CU, introduced scanner-based check deposits in July (The Sacramento Bee Oct. 26). Its Z@piT online deposit service has about 200 members enrolled. The service appeals to people who prefer self-service--such as parents with small children or those who don't want to visit an ATM at 3 a.m., Golden One CEO Teresa Halleck told the newspaper.
Schools Financial CU included safeguards in its program to prevent abuse of the check depositing system. Members must use their secure online banking log-in, and they are limited to two transmissions a day. Users have a time limit in which to scan and deposit the check online, and checks must meet specific requirements before being "deposited." Post-dated, damaged or lightly printed checks that don't scan properly can't be deposited, the credit union told the newspaper.
Its service, which is being rolled out gradually, will be available to all members who bank online by mid-November.
The article also noted that a savings bank in the area is allowing its customers to deposit checks with their iPhones by taking photos of both sides of the check with the phone's camera. More than 100,000 checks totaling $61 million have been deposited via iPhone since August.
CUs host holiday webcasts for troops’ families
SAN DIMAS, Calif. (10/28/09)--Families with loved ones stationed overseas in the military can send holiday greetings through the credit union-supported Operation Best Wishes program, which kicked off Monday and will continue for eight weeks.
 |
| Western Corporate FCU (WesCorp) is again sponsoring Operation Best Wishes so families and individuals can send greetings to family stationed overseas in the military. Here, Joe Keller (left) of WesCorp, adjusts a video camera to record a video greeting at Langley FCU, Newport News, Va., where the program launched Monday. (Photo provided by Western Corporate FCU) |
Each credit union in the program will set up a mobile webcast studio with cameras, microphones and monitors to record the greetings. There is no cost, and greetings have an allotted time of 10 minutes. Some recipients will receive the greetings live and can text messages back to the studio.
Operation Best Wishes is supported by each participating credit union and the Defense Credit Union Council, an organization of credit unions whose membership comprises U.S. Department of Defense personnel.
Although troop withdrawals continue in Iraq, there's still a strong interest to support soldiers who are deployed in other areas during the holidays, according to Walt Laskos, WesCorp public relations director and Operation Best Wishes manager.
"It's particularly interesting to see how several of the bases we will visit have already fully booked their recording sessions, doing so much earlier than in previous years," he said. "Obviously the need is clearly there and families are responding to credit union invitations."
CU System briefs
- TULSA, Okla. (10/28/09)--A man who hid in the bushes until an employee of Oklahoma Members First FCU arrived for work robbed the $21 million asset, Tulsa-based credit union Thursday, said police. When the employee opened the door, the masked man jumped out and pressed an object that felt like a gun to the employee's head and forced her inside. He stole money from the vault and fled. Police found pieces of a broken replica gun inside the credit union (Associated Press Newswires (Oct. 22) ...
- KAUNAKAKAI, Hawaii (10/28/09)--A former teller pleaded guilty of embezzling $218,293 from the Molokai Community FCU, based in Kaunakakai, Hawaii. Daniel K. Mahiai, 32, of Molokai, pleaded guilty to one count of embezzlement by removing funds from his teller's drawer. He replaced $55,982 before the thefts were discovered, said the U.S. attorney's office. Mahiai covered up the theft by making false entries in members' accounts and placed some accounts on "no mail" status, which prevented the credit union from sending members' statements reflecting the withdrawals. He faces a maximum 30 years in prison and a fine of up to $1 million (Honolulu Advertiser Oct. 24) ...
- ALLENTOWN, Pa. (10/28/09)--Two men were sentenced to prison for their roles in a Sept. 17, 2007, robbery of First Class FCU, Allentown, Pa. Asharif Tansmore, 36, of Philadelphia, and Terrance T. Meitzler, 31, of Allentown were sentenced Oct. 20 to three to six years each in state prison after pleading guilty to robbery and criminal conspiracy to commit robbery. They also were ordered to pay more than $67,000 in restitution. Three other co-defendants received prison sentences earlier: Adrian Galsgow, 32, sentenced to five to 10 years in prison; Chris Mason, 33, sentenced to 5 1/2 to 11 years; and Gregory Brown, 37, sentenced to seven to 14 years. During the holdup, one robber struck the credit union CEO on the head with what was believed to be a gun. Brown's sentence also involved charges of holding up Paragon FCU, Bethlehem, Pa., on Nov. 7, 2006. (Allentown Morning Call (Oct. 21) ...
- RICHARDSON, Texas (10/28/09)--Texans CU has received the 2009 Employers for Education Excellence (EEE) Gold Award from the Texas State Board of Education. The award honors employers who implement a policy to encourage and support employees actively participating in school activities. Texans CU won based on its employee dedication and commitment to Junior Achievement. The award will be presented during the November State Board of Education meeting in Austin. During the past three years, more than 100 employees have affected the lives of at least 3,200 students by teaching the Junior Achievement curriculum in the classroom. They logged nearly 650 total hours in the classroom, plus an additional 650 hours of travel time to and from the schools ...
- SOUTH BOSTON, Va. (10/28/09)--Rev. William J. Coleman has been hired as the new president/CEO of Tri-County Community Action Agency Inc. and Halifax County Community FCU, a $9 million asset credit union in South Boston, Va. He began his duties on Oct. 19. Coleman replaces William E. Coleman, who served as president/CEO for more than 42 years before retiring this fall. The newly appointed Coleman has worked in several top management positions, including as CEO of his own accounting firm. He most recently served as human resources director of a retirement community in Lynchburg, business auditor for the Campbell County Commissioner of Revenue's office and as finance officer for the Southside Community Services Board in South Boston. He has served as a member of the board and chairman of the delinquent loan committee of Lynchburg-based Beacon CU. The two Colemans are not related (Gazette Virginian Oct. 26) ...
Expect weak consumer holiday spending, CUNA to AP
MADISON, Wis. (10/28/09)--U.S. consumer holiday spending will be weak this year, a Credit Union National Association (CUNA) economist told the Associated Press Tuesday.
"When you look at the consumer, you see a lot of weakness, and you will continue to see a lot of weakness," Mike Schenk, CUNA senior economist, told the news service. "[Shoppers] are sitting here with depleted savings, no safety net in an environment where the labor market continues to deteriorate."
The Conference Board's Consumer Confidence Index released Tuesday fell to 47.7 in October--from a revised 53.4 in September--and far from what is considered healthy by economists, the AP said.
Many economists anticipate that consumer confidence will be mired in the current levels during the important holiday shopping season, the news service said.
To read the story, use the link.
Market News
MADISON, Wis. (10/28/09)
- For a second consecutive month, U.S consumer confidence unexpectedly dropped because Americans are concerned about a lack of jobs, analysts said. The Conference Board's confidence index fell to 47.7 in October from a revised 53.4 in September, according to a report from the private research group. The expectations component led the decline, falling to 65.7 from 73.7--previously 73.3. Also, a measure of the availability of employment eroded to a 26-year low. Rising unemployment could hamper consumer spending as it enters the holiday shopping season, and without a prolonged rebound in the largest part of the U.S. economy, the emerging economic recovery could fail to reach expectations, analysts said (Bloomberg.com and Moody's Economy.com Oct. 27) ...
- Lending evidence that an economic recovery is occurring, August home prices rose for the third consecutive month in 20 U.S cities, analysts said. The S&P/Case-Shiller home-price index increased 1% from the prior month--seasonally adjusted and following a 1.2% July increase. The gauge fell 11.3% from a year earlier--less than forecast. In August, compared with July, only Charlotte, N.C.; Cleveland; and Las Vegas experienced declines. Month-to-month advancers were led by Minneapolis (3.2% gain), and San Francisco (2.8%). Cleveland posted the worst number, dropping 0.5%. Also, 12 of the 20 major metropolitan areas experienced price declines of more than 10% from the same period a year earlier. Nationally, home prices are at levels similar to the autumn of 2003, analysts said (Bloomberg.com and The Wall Street Journal Oct. 27) ...
- Billionaire investor Carl Icahn this week announced a tender offer for CIT Group Inc.'s smaller bondholders. Icahn claims they have been "disadvantaged by the restructuring process and completely ignored" by the troubled commercial lender. Premised on the condition that the bondholders support him in opposing CIT's prepackaged bankruptcy plans, Icahn said he would provide them with protection. CIT is confronting a Thursday deadline for some bondholders to vote on choosing between a plan to file for a prepackaged bankruptcy or a $31 billion debt exchange, analysts said. Under terms of the bankruptcy plan, CIT would seek Chapter 11 protection, with support from a sufficient number of creditors to get a reorganization quickly approved, and emerge from bankruptcy within two months, analysts said (The Wall Street Journal Oct. 27) ...
Deposit interest rates tied to unemployment rates
SAN ANSELMO, Calif. (10/28/09)--Unemployment rates are strongly tied to deposit interest rates, which means that deposit interest rates likely won't go up until the unemployment rate goes down, according to a new study using data for the past five years.
The analysis was performed by Market Rates Insight (MRI) a research firm that tracks rates for deposits, loans and fees for financial institutions (Business Wire Oct. 27).
It found that 79.1% of the variance in the average interest rate for deposits can be explained by the variance in the unemployment rate, said MRI. "This means that when the unemployment rate is going up, the national average annual percentage yield for deposits goes down, and when the unemployment rate drops, deposit rates increase," said MRI's press release.
The unemployment rate in January 2005 was 5.20% and the national average interest for deposits was 2.63%. In March 2007, the unemployment rate declined to 4.20% while the deposit rate average rose to 4.25%. In September 2009, the unemployment rate rose to 9.80% and the interest rate national average for deposits declined to 1.55%.
"Although there may be other factors that affect deposit interest rates, such as inflation, these factors did not have a major impact on deposit interest rates over the last five years," said Dr. Dan Geller, MRI executive vice president.
"Therefore, assuming that there will not be any major change in the inflation rate, it is very likely that the deposit interest rates will not go up until the unemployment rate will go down," he said.
News of the Competition
MADISON, Wis. (10/28/09)
- PrivateBancorp Inc. said it recorded a third-quarter loss because commercial real estate loan weaknesses caused the Chicago lender to nearly triple its provisions for bad loans. The company also said it will hold a stock offering to raise $175 million. As a result of these two developments, the company's stock dropped 14% in pre-market trading Monday. The company's credit quality continues to decline in the third quarter, and PrivateBancorp added that nonperforming assets could increase for the next several quarters. Proceeds from the share offering may be used for working capital and also for deals backed by the Federal Deposit Insurance Corp., the company said (Reuters Oct. 26) ...
- West Coast Bancorp., based in Lake Oswego, Ore., announced Monday that it received $155 million in capital investments--with $134.2 million of that amount contributed to its wholly owned banking subsidiary, West Coast Bank. "The capital raised enhances West Coast Bank's capital position and increases its pro forma total risk-based capital ratio to 17.01%, considerably above the level required by bank regulators," said CEO/President Robert D. Sznewajs. "This capital raise also will strengthen our liquidity position ..." (Reuters Oct .26) ...
- Overall third-quarter earnings in the banking industry indicate that--while bank stocks were down at the start of this week--the industry's performance is better than anticipated, analysts said. "Most banks are meeting or beating [Wall] Street estimates, with notable margin expansion and a deceleration in credit-quality deterioration," Raymond James & Associates analyst Anthony Polini said Monday. "Although there are certainly pockets of relatively weak performance, the light at the end of the tunnel appears to be getting brighter." If the economy puts out further signals of a real recovery and the high-water mark for credit losses becomes apparent, then in the next few months, bank stocks could continue to remain steady or even trade higher, analysts said (American Banker Oct. 27) ...
Brace for open enrollment changes, price hikes
PHILADELPHIA (10/28/09)--No one knows for sure if health care reform will pass this year, but one thing is certain: Your 2010 health insurance premium will continue to climb. Now experts are issuing new warnings about the high cost of ignoring your open enrollment packet (Philly.com Oct. 20).
If you don't digest the details of your information packet, you may miss important changes. For example, some employers are reducing the number of health plan options offered, and yours may be eliminated; to keep the same physician, you may have to pay higher out-of-network costs. Also, many employers are increasing the co-payment on brand-name medications, while others are requiring--in lieu of co-payments--that you pay a percentage of the actual cost (The New York Times Oct. 10).
If you are in an health maintenance organization (HMO) or preferred-provider organization (PPO), expect out-of-pocket costs, premiums, and co-payments to increase by about 10% in 2010. Some companies are hiking deductibles $50, $100, or more.
Surveys reveal that about one of four employers offers a high-deductible health plan. More employers are pushing these plans because they cost about 20% less than an HMO or PPO. High-deductible plans may have deductibles of $2,500 or as much as $5,000, although some employers contribute $500 to $1,000 into a health savings account that you use to offset the deductible. One important benefit of health savings accounts is that the money stays in the account for next year's expenses if you don't use it all, unlike use-it-or-lose-it flexible spending accounts.
As premiums spike, expect employers to shift those costs your way. The average health care premium will increase to $9,120 in 2010, up from $8,607 in 2009, according to human resources consulting firm Hewitt Associates, Lincolnshire, Ill. (Miami Herald Oct. 18). Out-of-pocket expenses are expected to increase to $4,023, up from $3,656 in 2009.
Bottom line: Read your enrollment packet cover to cover. Don't assume you can keep the same coverage. If you do nothing, your employer may sign you up for what you had before, which may not be the best choice given plan changes, or--worse--drop you altogether, leaving you with no coverage at all.
Digital Mailer aligns with Standard Register for CUs
HERNDON, Va. (10/28/09)--DigitalMailer announced that it has partnered with Standard Register to offer its clients savings of up to 30% on electronic and print rendering services.
The arrangement will benefit credit unions, DigitalMailer said. Under the agreement, DigitalMailer will offer Standard Register's double postcard application, which could save financial institutions more than $400,000 on their daily customer notice volume in one year.
Standard Register clients also can access DigitalMAiler's document management and marketing platform--Customer Communication Center (CCC). CCC will offer an online storage solution that can store document management products.
DigitalMailer provides digital communication services to the financial services industry. Standard Register is a document services provider.
Products and Services brief
- NAPERVILLE, Ill. (10/28/09)--OfficeMax announced that its chairman/CEO Sam Duncan received the 2009 CEO Diversity Leadership Award presented by Diversity Best Practices, an organization that works to promote diversity in the workplace. Duncan was honored at Diversity Best Practices' annual Diversity and Inclusion Leadership Summit and Gala in Washington, D.C. on Oct. 6. During the gala, winners answered questions about and shared best practices on how CEOs embed their commitment to diversity within their companies. OfficeMax Inc. offers business office product solutions and retail office products ...
Copyright © 2009 - Credit Union National Association, Inc.
