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Filed on November 3, 2009, published the first business day after.
- Mica urges Congress to back MBL cap lift
- FTC to delay 'red flag' rule enforcement until June 1
- Exclude CUs from systemic risk legislation, CUNA says
- FBI warns consumers of increased phishing scam attempts
- Inside Washington
- N.Y. Times four page advertorial touts CUs
- New Chrysler program will save CU members thousands
- No action yet on Iowa league's application to buy bank
- Top 10 News Now stories for October
- WOCCU: CU support would increase remittances in Africa
- Business Week, media cover CUs' views on lending, more
- CUNA Mutual discusses reg changes at Lending Council
- Excellence in Lending winners announced
- CUNA Lending Council re-elects executive committee
- CU System briefs
- Market News
- News of the Competition
- Mortgage market has opportunities for consumers
- CO-OP completes acquisition of LoanLink Center
- Syphr launches lead generation site
Mica urges Congress to back MBL cap lift
WASHINGTON (11/4/09)--The Credit Union National Association (CUNA) in a Tuesday letter urged U.S. House members to support increased business lending capacity for credit unions by backing HR 3380, the Promoting Lending for America's Small Business Act, which would raise the amount of money a credit union can devote to business lending.
In the letter, CUNA President/CEO Dan Mica said that HR 3380, if passed, "would enable credit unions to continue to provide significant capital to credit union member-owned small businesses – up to $10 billion in the first year – and create as many as 108,000 new jobs." CUNA has sent similar letters to the Senate, President Barack Obama, and other top administration officials.
As he advocated lifting the lending cap, Mica emphasized that credit unions are financial institutions that "know their members and know how to lend to their members" and "have demonstrated the ability to provide these loans safely and soundly."
"This is common sense legislation that will provide economic stimulus without increasing the size of government or costing taxpayers a dime," he added.
Mica also cited backing for HR 3380 from a number of small business and public policy groups, including Americans for Tax Reform, the Competitive Enterprise Institute, the National Association of Mortgage Brokers, and the National Small Business Association.
HR 3380 would increase the MBL cap to 25% of a credit union's total assets. It also would raise the "de minimis" threshold for a loan to be considered a "member business loan" to $250,000, and exempt loans made to non-profit religious organizations as well as loans made in qualified underserved areas from the cap.
While HR 3380 continues to await Congressional action, small business lending was addressed by the recently passed HR 3354, the Small Business Financing and Investment Act, which House Speaker Rep. Nancy Pelosi said would "comprehensively reform small business lending programs to spur job creation and meet the needs of American small business."
HR 3354, which passed the House by a vote of 389 to 32 on October 29, would give small banks and credit unions "the confidence to open lending to a wider community of entrepreneurs."
"By offering small businesses the tools and resources to endure our current crisis and thrive in the future, we are laying the foundation for our recovery and placing a down payment on our long-term economic growth," Pelosi added.
For the full CUNA letter, use the resource link.
FTC to delay 'red flag' rule enforcement until June 1
WASHINGTON (11/4/09)--The Federal Trade Commission (FTC) on Tuesday announced that it will delay enforcement of its so-called "red flags" rule, which addresses identity theft, until June 1, 2010.
Congress requested that the FTC delay enforcement of the rule, which was developed to implement parts of the Fair and Accurate Credit Transactions (FACT) Act of 2003.
The FTC action would only apply to state-chartered credit unions. Federal credit unions were required to comply with NCUA's red flag regulations on Nov. 1, 2008.
FACTA directed financial regulatory agencies, including the FTC, to promulgate rules requiring those under its supervision that have covered accounts to implement programs to identify, detect, and respond to patterns, practices, or specific activities that could indicate identity theft.
Consumer accounts or other accounts that financial institutions find to have a risk of identity theft are covered by the rule.
The FTC previously delayed the enforcement of the rule until November 1, 2009.
Exclude CUs from systemic risk legislation, CUNA says
WASHINGTON (11/4/09)--In a Tuesday letter to House Financial Services Committee Chairman Barney Frank (D-Mass.) and ranking member Spencer Bachus (R-Ala.), Credit Union National Association (CUNA) President/CEO Dan Mica said that credit unions should not be entangled in the Financial Stability Improvement Act, which is meant to address "too big to fail" institutions and the dangers they impose on the U.S. financial system.
Mica encouraged lawmakers to "consider the effect" that the systemic risk legislation, which was taken up for markup on Tuesday, "would have on credit unions, and whether it is good public policy for member-owned financial cooperatives to be asked to cover the losses of large, complex, for-profit financial companies."
The draft bill, according to a House summary, will "create a mechanism for monitoring and reducing the threats that systemically risky firms pose to the financial system, establish a process for winding down large, financially-troubled non-bank financial institutions in a way that protects American taxpayers and minimizes the impact on the financial system," and "overhaul and update" the current financial regulatory system. Specifically, CUNA objects to portions of the legislation that would require credit unions with over $10 billion in assets to pay fees to the Federal Deposit Insurance Corporation to "insure risky behavior of huge, complex for-profit financial companies," CUNA Vice President of Legislative Affairs Ryan Donovan said.
According to Mica, credit unions should not be addressed by the legislation as they do not pose any systemic risk to the financial system. "In fact," Mica added, "evidence suggests that the small number of credit unions facing challenges today are victims of the crisis, primarily resulting from the markets in which they operate."
Mica said that credit unions "continue to play a vital role in the financial well-being of their members," continue to lend responsibly, and are well capitalized.
The failure of any single credit union or a group of credit unions would not have a systemic impact on the financial system," he added. Additionally, any issues within the greater credit union system have been resolved internally through the National Credit Union Share Insurance Fund (NCUSIF), Mica said.
For the full CUNA letter, use the resource link.
FBI warns consumers of increased phishing scam attempts
WASHINGTON (11/4/09)--The Federal Bureau of Investigation on Tuesday warned consumers that it has "seen a significant increase in fraud involving the exploitation of valid online banking credentials belonging to small and medium businesses, municipal governments, and school districts" over the recent months.
According to the FBI, potential victims of this type of fraud will receive a so-called "spear phishing" e-mail that contains an infected e-mail attachment or a link that sends the e-mail recipient to a website that is infected. Malware which contains a keylogger program is then installed on the victim's computer once they click on the link or attachment.
The keylogger is then used to track account information, and that information is used to steal from the victim via fund transfers or to create additional accounts in the victim's name.
The FBI has found that transferred funds of funds from the created accounts are then diverted into bank accounts of individuals that have been recruited to serve as payment processors through work-at-home advertisements or job search websites. The unwitting individuals then transfer the money that arrives in their accounts to overseas locales through a wire transfer service.
The FBI has advised customers that do their banking online to contact their financial institution to ensure that they are employing all the appropriate security and fraud prevention services their institution offers.
Inside Washington
- WASHINGTON (11/4/09)--The Community Development Advisory Board of the Community Development Financial Institutions (CDFI) Fund will meet Nov. 16 in Washington, D.C. Fifty seats are available. Members of the public can attend the meeting on a first-come, first-served basis. To attend, individuals must contact the CDFI Fund's office by Nov. 11. The CDFI issues community development grants to financial institutions, including credit unions, to help the underserved access affordable financial services ...
- WASHINGTON (11/4/09)--The Federal Home Loan Banks continue to be hurt by losses, despite changes by the Financial Accounting Standards Board (FASB) in March to stop the fallout of other-than-temporary impairment (OTTI) charges at the banks. During the third quarter, the system's credit-related charges were $1.042 billion, more than half of the $1.995 billion charges the system has had this year. Last week, the system said it lost $165 million during the quarter. Despite the losses, financial observers said the situation could be worse, as noncredit-related charges were $84 billion during the first nine months of this year. Before the FASB changes, the banks would have had to deduct that amount from their earnings also (American Banker Nov. 3). Some said the models the banks use to determine charges are too conservative and actual losses are lower. There are potential recoveries because the charges may result from front-end accounting losses, said Jim Vogel, head of fixed-income research at First Horizon National Corp. However, Brian Harris, analyst at Moody's Investors Services, said the losses are real ...
- WASHINGTON (11/4/09)--When FBOP Corp.'s nine subsidiaries collapsed last week, the Federal Deposit Insurance Corp. (FDIC) brought back an old method, cross guaranty, to charge two viable banks--Park National, Oak Park, Ill., and Citizens National Bank, Teague, Texas--for the resolution costs incurred by the other institutions (American Banker Nov. 3). The action reduced the cost of the subsidiaries' failures and may be a move the FDIC will use again to handle insolvencies. Using cross guaranty "could be a wake up call" for some banks, said Kip Weissman, partner at Luse Gorman. Under the law, the FDIC can use its cross guaranty power when it believes the assessment would be the least costly resolution. Usually, the amount of the assessment against viable institutions is equal to what the FDIC would lose in its Deposit Insurance Fund for a failure. Park National and Citizens could not pay the full amount of the resolution costs, so the Office of the Comptroller of the Currency closed them. Neither would have failed without cross guaranty, but observers said the move was justified. Richard Herring, finance professor at Wharton Business School, said the FDIC's move was "perfectly logical," because a bank holding company may not deserve "the benefit of a doubt if they're running some dodgy banks and some better banks" ...
N.Y. Times four page advertorial touts CUs
NEW YORK (11/4/09)--A four-page advertorial in Monday's issue of The New York Times, entitled "Service Before Profits: The Credit Union Revolution," touts credit unions' strengths and service philosophy.
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 Click to download a pdf [2MB] |
For credit union member-owners, said Mica in the article, that means credit unions pay higher interest rates on deposits than do for-profit institutions, and they charge lower interest rates on loans.
He also notes the growing count of credit union members, and says, "We are about Main Street, not Wall Street. We are here to serve Main Street. That is what we do. And that is what a lot of people want today."
The article also provided viewpoints from:
- Debbie Matz, chairman of the National Credit Union Administration, who emphasizes that members' deposits are safe in credit unions;
- David Wallace of North Carolina-based Global Financial Services, who notes credit unions have stuck to the basics of traditional community financial services. He provides statistics indicating credit unions have fewer charge-offs and says credit unions have money to lend;
- Kam Wong, CEO of Municipal CU of New York, and Frank Pollack, CEO of Pentagon FCU, both of whom provide examples of the service philosophy;
- Jim Park, CEO of Credit Union 24, a Tallahassee, Fla.-based ATM network, who talks about innovation and surcharge-free networks;
- Fred Johnson, CEO of Credit Union Executives Society, discussing continual education;
- Stephen Delfin, executive director of the National Credit Union Foundation, who speaks to credit unions' social responsibility concerns;
- Richard Powers, executive director, MBA programs and Master of Finance Programs at the University of Toronto, on educating boards; and
- Fred Becker, CEO of the National Association of Federal Credit Unions, on members' trust of credit unions.
The advertorial is accompanied by a number of paid ads including one from CUNA that notes that nearly 100 million American consumers will soon belong to the nation's 8,000 credit unions. Use the link to view the advertorial pages.
New Chrysler program will save CU members thousands
LIVONIA, Mich. (11/4/09)--Chrysler Group LLC and America's credit unions are offering new discounts through the "Invest in America" program. The discounts started Tuesday and will run through Nov. 30.
The program will offer "Affiliate Rewards" to credit union members. Knowing the loyalty credit union members have toward domestic vehicles, the partnership is expected to match members with Chrysler Group LLC's line of vehicles.
Credit union members will receive preferred pricing on all 2009 Chrysler, Jeep, Dodge and Ram Truck vehicles and select 2010 vehicles. The discounts are available regardless of where members gain financing. More than 2,000 credit unions in all 50 states have been promoting "Invest in America" discounts, driving members back to domestic automakers.
"The goal of the program is to support U.S. jobs, U.S. families and U.S. companies," David Adams, CEO of CUcorp, a national credit union marketing company, told a teleconference Tuesday. "The program will save credit union members thousands of dollars on eligible 2009 and 2010 vehicles. The preferred pricing for credit union members will be 1% below the dealer invoice price. It will be a ‘no haggling discount.'
"The program will bring savings to 90 million credit union members and also is a tremendous incentive to buy a domestic vehicle," Adams added.
CUcorp research shows that almost 40% of credit union members who bought vehicles through the "Invest in America" program previously owned a competitor's brand. The research also shows that members overwhelmingly found the discount to be very important in their decision to purchase a domestic vehicle.
"Credit unions will benefit from the program because they are the low-cost providers of auto loans and will pick up some auto loans," Adams said. "Hopefully this program will expand into December and also 2010 in some form or another."
All U.S. automakers are reporting an uptick in sales volume because consumers are buying more, Adams added. "We're happy with the progress in sales for domestic automakers and credit unions' involvement in it," he said.
Credit unions' share of auto financing, spurred in part by the "Invest in America" discounts, is growing nationwide, CUcorp said. In Michigan, credit unions' outstanding auto loans grew 32% from June 2008 to June 2009, a record for credit unions. Because of conservative lending strategies and their not-for-profit structure, credit unions are strong and have money to lend to their members, despite the national credit crunch, CUcorp said.
Credit unions have financed more than $3.1 billion worth of vehicles through the "Invest in America" program. Historically, credit unions offer lower loan rates than other financial institutions. The average credit union loan rate is 5.8% compared with 7% for the average bank rate, according to a Datatrac survey of more than 17,000 financial institutions.
"Invest in America" is also offering discounts with General Motors; Sprint; Thor Industries, a U.S. recreational vehicle (RV) manufacturer; and Allied Moving and Storage. FTD Florists and CU Benefits are the newest partners to offer credit union discounts through the "Invest in America" program. Those partnerships' discounts were effective Sunday.
No action yet on Iowa league's application to buy bank
DES MOINES, Iowa (11/4/09)--Bank regulators have yet to rule on the Iowa Credit Union League's application to acquire an Arizona-based bank to possibly provide correspondent services to Iowa's credit unions as the Iowa Corporate Central CU reviews its future.
Both the Federal Reserve Bank in its capacity as the regulator of bank holding companies and the Office of the Comptroller of the Currency (OCC) as the primary regulator of national banks review such applications.
"The regulators try to reach a decision within 60 days of receiving the application and there are still several weeks remaining in that timeframe," said Murray Williams, league chief operations officer, told News Now.
The Iowa corporate, a small but well-capitalized corporate based in Des Moines, has conveyed to its members that it is examining whether it can continue to provide the same competitive products and services in a changing regulatory environment, the league said in an Oct. 6 article in News Now.
The National Credit Union Administration is set to make recommendations regarding corporate credit unions at its November meeting.
Top 10 News Now stories for October
MADISON, Wis. (11/4/09)--Stories about the Credit Card Accountability, Responsibility and Disclosure (CARD) Act dominated News Now's Top 10 story list for October.
The five CARD Act stories bumped a story about interchange fees, "Altering interchange fees could reduce consumer choice, CUNA testifies," off the Top 10 list.
The top 10 News Now stories for October are:
10. CEOs at two troubled CUs replaced
LAS VEGAS (10/13/09)--The CEOs at two credit unions in Las Vegas have been replaced, according to local media reports.
9. Changes to CARD Act in view
WASHINGTON (10/8/09)--The Credit Union National Association (CUNA) has advised leaders of the House Financial Services Committee that credit union members may face increased costs and reduced services if technical corrections to the Credit Card Accountability, Responsibility and Disclosure (CARD) Act are not made.
8. Compliance: What an accelerated CARD Act date would mean
WASHINGTON (10/1/09)--Credit unions, faced with the specter of a bill that would accelerate the effective date of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act, have been seeking guidance on what should be done now to prepare for the possibility, said Kathy Thompson, Credit Union National Association senior vice president for compliance.
7. Film director: Take your money out of a bank, put it into a CU
DETROIT (10/27/09)--A Michigan filmmaker is encouraging consumers to take their money out of banks and put it into credit unions.
6. 21-day fix scheduled for House vote Tuesday
WASHINGTON (10/12/09)--A bill intended to fix a troublesome 21-day disclosure provision in the Credit CARD Act is scheduled to be considered by the House tomorrow.
5. Suze Orman: Switch cards to CUs
NEW YORK (10/13/09)--Consumers with credit cards might want to think about doing a balance transfer to a credit union, personal finance expert Suze Orman said on MSNBC's "Morning Joe" program Friday.
4. Corporate CU sues U.S. Central over ‘excess capital'
WASHINGTON (10/21/09)--In legal documents filed late last week, Wisconsin-based Corporate Central CU is seeking the reimbursement of $6 million in excess investments from U.S. Central FCU.
3. Senate fixes 21-day CARD Act problem
WASHINGTON (10/30/09)--Just two weeks after House members approved H.R. 3606, the CARD Act Technical Corrections Act, by voice vote, their colleagues in the Senate voted by unanimous consent to ratify the bill. Next stop for the measure: The president's desk to be signed into law.
2. CARD Act corrections pass House via voice vote
WASHINGTON (10/14/09)--The House of Representatives on Tuesday approved by a voice vote H.R. 3606, the CARD Act Technical Corrections Act, which was introduced by Rep. Peter Welch (D-Vt.) last month.
1. New Dodd bill would set overdraft rules
WASHINGTON (10/20/09)--Sen. Christopher Dodd (D-Conn.), who heads the Senate Banking Committee, unveiled his new bill Monday that would limit the fees financial institutions can charge on overdraft protection services.
WOCCU: CU support would increase remittances in Africa
TUNIS, Tunisia (11/4/09)--More remittance funds would reach more people, especially those in poor rural areas, if Africa's savings and credit cooperatives (SACCOs), or credit unions, were able to better support cost-effective remittance programs, according to the World Council of Credit Unions (WOCCU).
People in developing countries worldwide depend on remittance income--money transfers sent by family members working abroad--to sustain their households, but some countries' financial systems are better able to support such programs than others. African nations have been particularly hard hit because their capabilities are hamstrung by restrictive regulations and dominated by only a few providers, WOCCU said.
"Remittances have become a critical income source for many poor families in developing countries," said Saul Wolf, remittances manager for IRnet, the international remittance program supported by WOCCU Services Group, the association's for-profit arm.
Speaking to attendees at the recent International Fund for Agricultural Development's (IFAD) Global Forum on Remittances in Tunisia, Wolf echoed the findings of a recent IFAD study, noting that lower transfer costs and greater access through microfinance institutions (MFIs) like SACCOs will improve Africa's remittance opportunities.
"High remittance fees take money away from poor recipients who depend on the funds to meet basic needs and improve the quality of their lives," Wolf said. "IRnet's goal is to help African SACCOs gain the capabilities necessary to grow their remittance programs where local laws permit."
Roughly 30 million Africans live outside their country of origin, and many leave to find work, according to the IFAD study. African migrants send about $40 billion in remittances to their families each year. An estimated 30% to 40% of remittances are for recipients in underserved rural areas, many of whom face high transfer fees and the need to travel long distances to receive their funds.
Both hurdles diminish the funds, leaving less for recipients to meet their personal needs. Regulatory restrictions in some African countries also prohibit MFIs, including SACCOs, from participating in electronic funds transfer activities, which support remittance traffic. Market dominance by Western Union and MoneyGram, which the IFAD study estimates control 65% of Africa's remittance market, leave little room for fledgling service providers to grow.
Greater involvement by SACCOs and other MFIs would not only help make remittances more affordable, but foster greater economic stability among Africa's working poor, the study said the study.
IRnet's program in Kenya has demonstrated that SACCOs can be effective conduits for remittance funds. Currently, 11 SACCOs throughout Kenya distribute remittance funds sent via credit unions in other countries to family members back home.
Kenya's SACCOs processed 1,432 transactions, or about $670,000 in the first nine months of 2009, indicating that the number of transactions and the amounts transferred are increasing.
Kenya is IRnet's first foothold in Africa. The program, which supports credit union-to-credit union funds transfers in seven Latin American countries, accounted for more than 1.2 million transactions totaling roughly $491 million worldwide in 2008. WOCCU would like see both amounts increase, and hopes to bring IRnet services to other African nations through their SACCOs pending increased technological capabilities and favorable regulations in support of such programs, Wolf said.
"IRnet can be a critical link in the chain because it can help facilitate viable low-cost money transfer opportunities for people worldwide," Wolf said. "We want to follow the model we've established in Kenya and expand IRnet to other parts of the world, where high remittance fees remain the norm rather than the exception."
Business Week, media cover CUs' views on lending, more
MADISON, Wis. (11/4/09)--Business Week, a Kiplinger's editor on the radio, and a television station in Dallas all recognized credit unions' views in separate items broadcast the past few days.
Business Week Online Friday carried an item that is scheduled for this week's print edition featuring a member of the CUNA Lending Council executive committee, Gayle Rust Gustafson, vice president of financial services at Rivermark Community CU in Beaverton, Ore.
The article discusses what has happened to the credit machine in the economy and notes that securities--the shadow banking system--may be sputtering back thanks to a boost from the federal government. However, low housing prices have put a dent on home equity loans and lenders are trying to figure out how to be prudent in their lending.
It notes that Rivermark Community CU made 442 auto loans in September, 33% more than the previous year. "I think peoples' confidence is returning, and they are feeling a bit more secure," Gustafson told Business Week. However, Rivermark is tightening its lending standards--it's cutting the amount of items, such as the unpaid balance on a trade-in vehicle, that a borrower can roll into a new-car loan.
Kiplinger's also noted credit unions. Because rates in money market mutual funds are really low, not many people are making money. However, community banks and credit unions are giving regular banks "a run for their money," according to Janet Bodnar, editor of Kiplinger Personal Finance during a radio program Oct. 15 on WTOP News.
"Community banks and credit unions are competing for your money, and they are generally giving you a higher rate of return on your savings," Bodnar said.
She noted that some financial institutions are giving their accountholders interest on checking accounts if accountholders agree to receive their statements through e-mail, use online bill pay and direct deposit, and a debit card for transactions.
"If you're willing to do that, you can make money," Bodnar said. "On deposits of up to $25,000, interest rates are good if you play by the rules."
WFAA in Dallas, a Texas ABC affiliate, also interviewed Sharon Moore, president/CEO of City CU in Dallas, for a segment on interchange fees.
"Interchange is the basis for how we clear electronic transactions, whether they are debit or credit," Moore said. "As a financial institution, we issue cards and we pay interchange for our members' cards. And if someone uses our ATM, we get interchange back. It flows in and out."
The legislation introduced in Congress would govern the interchange system by implementing rate-setting. "It's been a free system that we've benefited from by offsetting the cost for running a card program," Moore added.
Retailers are promising that they're going to lower the fees that financial institutions pay for a debit card transaction. However, the cost will shift to consumers, Moore said. The legislation is not going to be a "free lunch" as some people believe it to be, she added.
CUNA Mutual discusses reg changes at Lending Council
SAN DIEGO (11/4/09)--The era of regulatory change is here to stay, at least for the foreseeable future, which means credit unions should plan accordingly, said William Klewin, associate general counsel at CUNA Mutual Group.
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| Credit unions need to be prepared for changes in the regulatory environment, said William Klewin, CUNA Mutual associate general counsel, during a breakout session at the 15th annual CUNA Lending Council Conference in San Diego last weekend. (Photo provided by CUNA Mutual Group) |
Klewin spoke to attendees during a breakout session, "Practical Steps for Regulatory Compliance for 2010," at the 15th annual CUNA Lending Council Conference in San Diego last weekend. He said the general regulatory environment involving both legislative and regulatory issues requires credit unions to be acutely aware of ongoing changes and their effect on how credit unions do business.
"What you know about, you can plan for," Klewin said.
He stressed the importance of credit unions preparing adequately to deal with regulatory change by knowing what's ahead and incorporating the changes into long-range planning, staffing and budgets.
Challenging economic conditions, and the actions leading to those conditions, have resulted in new consumer-protection legislation regarding credit cards, overdraft protection practices and the proposed Consumer Financial Protection Agency. For credit unions, how credit card applications and solicitations are written are among the more significant changes.
For example, Klewin pointed out that fees assessed for late payments, exceeding credit limit, balance transfers and cash advances must now be disclosed in a table within credit card applications and solicitations. Also, there are new regulations regarding how rates are presented in writing, including specific font size and, in some cases, presented in bold.
"These changes affect all of you who are offering credit cards to your members," said Klewin. "So it's critical you're aware of the new regulations and how soon you need to be in compliance."
Klewin also focused on key regulatory issues at the core of credit union business, primarily new rules for multi-featured, open-end lending included in the changes within Regulation Z. He stressed the importance of offering multi-featured, open-end lending to credit union members despite the Reg Z changes.
"There are a lot of reasons why we care about multi-featured, open-end lending," Klewin said. "It provides a superior member experience because it's convenient, requires less paperwork and is a reduced compliance risk. But more than that, it's a marketplace differentiator for us, consistent with building and maintaining member relationships. And those member relationships translate into increased fee income."
Klewin explained the subtle changes within Reg Z and debunked some common myths about multi-featured open-end lending, adding that the myths "should not be reasons to change from multi-featured, open-end lending."
Excellence in Lending winners announced
SAN DIEGO (11/4/09)--Five credit unions were recognized for their lending prowess Monday as recipients of CUNA Mutual Group's Excellence in Lending Awards. The awards were presented at the 15th Annual CUNA Lending Council Conference in San Diego.
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| The winners of CUNA Mutual Group's 2009 Excellence in Lending awards were announced at the 15th Annual CUNA Lending Council Conference. Pictured are front row, from left: Dawn Wolfe, Rogue FCU, Medford, Ore.; Lashonda Moore, St. Louis (Mo.) Community CU; Rita Murphy and Pat Stewart, Mayo Employees FCU, Rochester, Minn.; Yvette Blauvelt, New Orleans Firemen's CU, Metairie, La.; and Carol Laemmerhirt, Erie FCU, Erie, Pa. Back row, from left: Lloyd Gill, CUNA Lending Council chairman and award presenter, City County CU, Fort Lauderdale, Fla.; Kira Orth, Mayo Employees FCU, Rochester, Minn.; Cami Crouchet, New Orleans Firemen's CU, Metairie, La.; Sandi Carangi, Erie (Pa.); and Dan Kaiser, award presenter, CUNA Mutual Group, Madison, Wis. (Photo provided by CUNA Mutual Group) |
CUNA Mutual Group's Dan Kaiser, vice president of credit insurance products, presented the 10th annual awards. Recipients were:
- New Orleans Firemen's CU, Metairie, La.--Consumer Lending, less than $250 million in assets;
- Rogue FCU, Medford, Ore.--Consumer Lending, more than $250 million;
- Mayo Employees FCU, Rochester, Minn.--Mortgage Lending, more than $250 million;
- Erie (Pa.) FCU--Business Lending; and
- St. Louis (Mo.) Community CU--Low to Modest Means.
CUNA Mutual, with support from the CUNA Lending Council, established the Excellence in Lending Awards in 2000 to recognize credit unions that have implemented outstanding lending programs while demonstrating sound financial performance. The awards provide an opportunity for credit unions to share best practices and ideas, build networks and recognize and celebrate lending excellence.
CUNA Lending Council re-elects executive committee
MADISON, Wis. (11/4/09)--The coming year's executive committee and officers for the CUNA Lending Council were announced during the Council's 15th annual conference, which ends today in San Diego, Calif.
This is a result of the most recent annual election by the council membership in the months preceding the conference.
Incumbents re-elected were:
- Lloyd Gill, executive vice president/chief operations officer, City County CU, Margate, Fla.;
- Aaron Bresko, vice president lending, BECU, Tukwila, Wash.;
- Michael Long, executive vice president/chief credit officer, UW CU, Madison, Wis.;
- Dana Rawlings, senior vice president/chief operations officer, Smart Financial CU, Houston, Texas;
- Keith Reynolds, vice president lending/business Services, Citizens Equity First CU, San Jose, Calif.;
- Gayle Rust Gustafson, vice president finance services, Rivermark Community CU, Beaverton, Ore.;
Gill will continue as the chair of the council Executive Committee through 2010 when he completes his two terms on the executive committee. Aaron Bresko will continue as vice chair.
The CUNA Lending Council executive committee also includes:
- Claire Ippoliti, vice president lending, Philadelphia (Pa.) FCU;
- Bonnie Doolin, senior vice president business development, Massachusetts Credit Union League, Marlborough, Mass.
- Gary Smart, vice president business services and lending, Crane FCU, Odon, Ind.;
- Bill Vogeney, senior vice president/chief lending officer, Ent FCU, Colorado Springs, Colo.; and
- Charles Anderson, executive vice president commercial banking, Arizona State CU, Phoenix.
CU System briefs
- DULUTH, Minn. (11/4/09)--Members Cooperative CU (MCCU) has created a non-profit foundation to benefit young people in communities it serves. The Community Youth Foundation will provide educational scholarships, financial literacy education and financial support for organizations and activities for youth. Its focus will be shaped in part by three board members who are 21 years old or younger. The foundation's board consists of 11 members who span the ages from 17 to 74. "This is a youth-focused foundation, so we felt it is critical to have a strong youth presence on our board," said Tammy Heikkinen, president/CEO of MCCU and foundation board member. Seventeen-year-old Logan Pallin, a senior at Cloquet High School and the board's youngest representative, will chair the foundation's Grant Committee. Other board members are Al Alm, the board's oldest member; college students Wing Chan and Kelly Splonskowski; community businesspeople Lisa Heyesen, Pashca Parks and Tim Wigchers; past MCCU President Del Prevost; and current MCCU representatives Ralph Hamman and Adele Hartwick. MCCU Vice President Robbie Thompson will coordinate activities for the foundation. Officers are Hartwick, chair; Parks, vice chair; and Chan, secretary/treasurer ...
- FARMERS BRANCH, Texas(11/4/09)--Gerald R. "Chuck" Sheets, past president of Corpus Christi City Employees CU, died earlier last month in Corpus Christi, according to the Texas Credit Union League (LoneStar Leaguer Nov. 2). He served on the board of directors of the Texas Credit Union League and affiliates from 1983 to 1984, and was named by former Gov. Mark White to the Texas Credit Union Committee for an eight-year-term ending in 1991. He also served as past president of the Coastal Bend Chapter of Credit Unions. He is survived by his wife, one daughter and one son ...
Market News
MADISON, Wis. (11/4/09)
- U.S. chain store sales posted a slight 0.1% gain in the week ending Saturday, marking the sixth consecutive weekly gain, according to the International Council of Shopping Centers sales index. All the weekly gains have been modest, analysts said. Warm, wet weather hurt sales last week, they added. Year-ago growth fell to 1.9% but stayed strong by standards of the past 14 months due to "easier comparisons," analysts said. Consumer fundamentals are mostly weak and unfavorable to spending--although they are not as negative as they were several months ago. Job losses are the biggest and most important drag on sales, analysts said (Moody's Economy.com Nov. 3) ...
- For the fifth time in six months, U.S. factory orders increased in September, signaling that manufacturing likely will fuel the economic recovery, analysts said. For the month, bookings rose 0.9%--exceeding the median forecast of economists surveyed by Bloomberg News. The September gain follows a 0.8% decline in August, according to figures released Tuesday by the Commerce Department. Excluding demand for usually volatile transportation equipment, orders rose 0.8% after a 0.3% August gain. Inventories fell in September, and the inventory-to-sales ratio slid to 1.36 months from 1.38 months. U.S. companies will gear up production because of a record drop in stockpiles and a boost to exports due in part to about $2 trillion in global stimulus, analysts said. Growth in manufacturing will help the boost the economy in the fourth quarter, they added. "Manufacturing is in recovery," said David Sloan, a senior economist at 4Cast Inc. "There's a need to rebuild inventories, and exports are getting stronger. The economy does seem to be in a sustainable recovery now" (Bloomberg.com and Moody's Economy.com Nov. 3) ...
News of the Competition
MADISON, Wis. (11/4/09)
- Private equity investors are looking to invest in struggling banks, analysts said. Last week, two Oregon banks--Cascade Bancorp in Bend and West Cost Bancorp in Lake Oswego--announced recapitalization deals in which private equity firms were participating. After injecting $40 million into Cascade, Donald Marron, head of Lightyear Capital LLC, said his group has met with management teams at about 150 mid-size community banks in the past year. Now is a prime time to invest in banks because the principals in the banking industry are more amenable to restructuring units that are economically sound for future gains, than has been the case previously, Marron said. Also, all the new business being conducted is good business, he added. While private equity investors have been reluctant to return to the banking industry because of regulatory obstacles and uncertainty about when the market would bottom out, they now are more comfortable making investments alongside public capital raises, such as stock sales, analysts said (American Banker Nov. 3) ...
- Some large financial firms--such as Citigroup Inc. and JPMorgan Chase & Co.-- are stockpiling cash as if they are expecting another financial crisis to hit, analysts said. CitiGroup has nearly doubled its cash in the past year, amassing $244.2 billion. The four biggest U.S. banks by assets--Bank of America Corp., Citigroup, JPMorgan Chase and Wells Fargo & Co.--have bolstered their combined liquidity by 67% to $1.53 trillion as of Sept. 30 from $914.2 billion in June 2008--before the bankruptcy of Lehman Brothers Holdings, according to the companies' third-quarter reports. The amount is 21% of banks' assets--up from 15%. In addition to cash, liquidity encompasses deposits at other banks and debt securities that can be pledged as collateral in exchange for overnight borrowings from the Federal Reserve or other banks, analysts said (Bloomberg News via American Banker Nov. 3) ...
- Roughly $6 billion in consumer loan-backed deals were expected to be sold before the loan application deadline Tuesday for the consumer loan-backed portion of the Term Asset-Backed Securities Loan Facility (TALF), which is designed to reinvigorate the asset-backed market, analysts said. Bank of America Auto Trust's $2.03 billion deal is the largest bond eligible for the TALF--through which the Fed offers non-recourse loans at low rates. Among the other deals being sold are auto-sector deals from GMAC's Ally Bank with an $884.9 million bond and Americredit Corp. with a $227 million deal (Dow Jones via American Banker Nov. 3) ...
- U.S. banks face risks of significant new loan losses--especially in the commercial loan market--and some banks may not have enough capital to insulate themselves against setbacks, a Federal Reserve official said Monday. "Two years into a substantial economic downturn, loan quality is poor across many asset classes and ... continues to deteriorate," said Jon Greenlee, an associate director of the Fed's division of banking supervision and regulation. Some of the large regional and community banks that have accumulated unusually high levels of commercial real estate loans will be "particularly affected" by conditions in those markets, Greenlee said (Reuters Nov. 2 and Dow Jones via American Banker Nov. 3) ...
Mortgage market has opportunities for consumers
MADISON, Wis. (11/4/09)--Nearly 6.5 million home owners are deciding whether to stay with their adjustable-rate mortgages or lock in fixed rates (Money November).
In fact, September's 9.4% sales increase was the largest monthly hike in 26 years as buyers moved to qualify for the first-time buyers incentives expiring this month. Nationwide, sales are up nearly 24% since January (MSNBC Oct. 23).
Foreclosures and short sales--where the mortgage exceeds the sales price--have forced prices downward 9% from a year earlier. The median price in September was $174,900, down from $191,200 in September 2008. And prices could fall further if unemployment, expected to rise to 10.5% next year, leads to more foreclosures. Inventories of unsold homes, which fell about 7% in September, are at their lowest level since March of 2007 but could well rise with higher unemployment.
In fact, what is happening in the mortgage market is regional. During the past three years, home prices in metro areas of 23 states recorded gains. The South, the Plains, and most of the non-coastal West showed some ability to weather the stormy mortgage market, according to Fiserv (CNN/Money Oct. 21). Meanwhile, 16 states--those in the Northeast plus California, Florida, Nevada, and Arizona--have posted declines.
For many consumers, the issue is whether to lock in a fixed rate. Roughly 6.5 million homeowners have adjustable-rate mortgages (ARMs) and many of those notes are coming up for adjustment.
For the short term, consumers with ARMs should be fine. But once the economy stabilizes and the government starts to remove policies that are keeping mortgage rates low, rates are likely to rise.
Here are some thoughts about whether to stand pat with your ARM or move to a fixed rate:
- If you plan to move within the next three years, if you have less than 20% equity in your home and home prices have taken a beating in your community, or if you have a jumbo mortgage, you may be better off with your existing ARM.
- If you plan to move in the next three to five years or you have a jumbo mortgage, look at a 5/1 ARM. (A 5/1 ARM locks your interest rate for the first five years and then can adjust annually for the life of the loan.)
- If you plan to stay in your home for more than five years, or you plan to use the equity in your home for college expenses or some other need, you may want to look at a fixed-rate mortgage now; they are not likely to go lower after the next year or so.
- If you have doubts about your future plans, it is usually safer to lock in a low rate while you can.
CO-OP completes acquisition of LoanLink Center
RANCHO CUCAMONGA, Calif. (11/4/09)--CO-OP Financial Services has finished acquiring the LoanLink Center, which provides member and loan services to members of roughly 350 credit unions.
The planned acquisition was first announced Oct. 7 by LoanLink's original owner, CUNA Mutual Group. The transfer was completed at the end of business Saturday.
CO-OP LoanLink will continue to operate in Fort Worth, Texas. No immediate changes are planned for business except a rebranding effort to recognize the service as a CO-OP offering. CUNA Mutual Group and CO-OP will partner in CO-OP LoanLink Center sales.
CO-OP LoanLink employs more than 300 individuals. The center has an exclusive agreement to use CO-OP's Next Generation Network (NGN) platform, which offers credit unions other CO-OP NGN services, including CO-OP Mobile and CO-OP My Deposit.
CO-OP Financial Services, Rancho Cucamonga, Calif., is a credit union service organization that provides credit unions with ATM access, processing, check imaging, shared branching and mobile payment services. The CO-OP Network offers credit unions access to 28,000 surcharge-free ATMs.
Syphr launches lead generation site
FERNDALE, N.Y. (11/4/09)--Credit union service organization Syphr has launched a new loan evaluation website, SaveOnYourLoans.com, which aims to reduce the time consumers spend gathering their billing statements and comparison shopping for reduced loan payments by securing refinancing with a local credit union or community bank.
Syphr built the website with partners EQUIDATA and Innovative Software Solutions to shift the burden of comparison shopping for mortgages and car loans from consumers to retail financial institutions.
"Ultimately, the goal is to reverse the traditional seller-centric methods used by sites like LendingTree and Bankrate, changing the lead generation game as we know it," said Chris Langley, Syphr president.
The website officially launched Monday.
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