Wednesday, April 1, 2015

North Dade Community Development FCU Closed

The National Credit Union Administration (NCUA) on March 31 liquidated North Dade Community Development Federal Credit Union (North Dade) of Miami Gardens, Florida.

NCUA made the decision to liquidate North Dade Community Development Federal Credit Union and discontinue operations after determining the credit union had violated various provisions of its charter, bylaws and federal regulations.

In November 2014, North Dade was fined $300,000 by the Financial Crimes Enforcement Network for violation of the Bank Secrecy Act (BSA).

North Dade reported a loss of $672,414 for 2014.

This is the second credit union to be liquidated in 2015.

Read the press release.

Losing Their Mutuality

Some credit unions are losing their mutuality.

Several weeks ago I wrote about a bill (SB 582) in Oregon that would remove the requirement that an individual open a share account as a condition of credit union membership.

The justification for this provision is that it is costly for a credit union to maintain share accounts and the share account serves no purpose for the member.

Washington-state also does not require a person open a share account for credit union membership.

But allowing a person to join a credit union through solely a credit relationship undermines the concept of mutuality -- that borrowers and depositors are the same individual.

Moreover, I have seen some federal credit unions' credit solicitations that stated that the institutions would pay to open the share account for membership.

Once again, this appears to violate the principle of mutuality.

It seems that credit unions are following the same slippery path as the thrift industry.

One of the reasons cited by Congress in 1951 for removing the thrift tax exemption was that these institutions had had lost their “mutuality,” in the sense that the institutions’ borrowers and depositors were not necessarily the same individuals.

Friday, March 27, 2015

Common Bond of 50 Years of Age or Better

In preparation for a speech, I became aware of a common bond for U.S. Eagle Federal Credit Union (Albuquerque, NM), formerly U.S. New Mexico Federal Credit Union, comprised of people who are 50 years of age or better and residents of New Mexico.

However, a common bond of being 50 years of age or better is overly broad and poorly defined.

Age by itself is not sufficient to show a commonality of interest or interaction among individuals. Also, what does better mean?

Simply said, this group fails to meet the requirement for a common bond.

But what is even more dumbfounding is how the National Credit Union Administration approved this common bond.

This is just further confirmation that this agency is รค rubber stamp for the industry.

Wednesday, March 25, 2015

NEFCU Launches Anti-Bank TV Commercial

Newsday is reporting on a new TV commercial by Nassau Educators FCU (NEFCU) that takes a shot at bankers as uncaring.

The commercial shows three bankers dancing and singing "If I Only Had a Heart" from The Wizard of Oz.

However, after reading online reviews about NEFCU, a couple of the reviews of the $2 billion credit union would question whether this credit union had a heart.

Read the story.

Monday, March 23, 2015

Matz's Comment Undermines Integrity of Rulemaking Process

Despite being in the middle of the risk-based capital proposal comment period, National Credit Union Administration (NCUA) Chairman Debbie Matz announced on March 9 that the agency will issue later this year a proposal to count supplemental capital in full in its risk-based capital numerator.

This announcement seems to undermine the rulemaking process.

NCUA put out for a 90 day comment period its proposed rule with comments due by April 27.

As part of the risk-based capital proposal, the NCUA Board requested comments to several questions about supplemental capital, including "[s]hould additional supplemental forms of capital be included in the risk-based capital ratio numerator and how would including such capital protect the NCUSIF from losses?"

It appears that the agency has already made up its mind on this topic. It will count supplemental capital as part of the risk-based capital ratio numerator.

So much for seeking input from the public on this issue. This agency is making a mockery of rulemaking process.

The agency should have remained silent on this issue until the comment period ended.

Read the proposed rule.

Read Matz's speech.

Sunday, March 22, 2015

Insight CU Pays $400,000 to be Preferred CU for Lake-Sumter State College

Insight Credit Union (Orlando, FL) has been named the preferred credit union for Lake-Sumter State College (LSSC).

The agreement will provide $50,000 annually over the next eight years to the LSSC Foundation.

In addition to the financial support, the partnership will provide for a co-branded debit card; creation and facilitation of a financial literacy program for faculty, staff and students; and specific support for the athletics department, theater program and the LSSC Foundation.

Read the press release.

Thursday, March 19, 2015

Navy FCU to Spend $114.6 Million to Expand Its HQ Operations

Navy Federal Credit Union will invest $114.6 million to expand its headquarters operation in the Town of Vienna in Fairfax County.

The investment will include a new four-story, 234,000-square foot office building and a parking deck on a 10.8-acre site. An elevated walkway will connect the new building to the rest of the headquarters campus.

Governor McAuliffe also approved a $1 million grant from the Governor’s Opportunity Fund to assist Fairfax County with the project.

Furthermore, additional funding and services to support Navy FCU’s employee training activities will be provided through the Virginia Jobs Investment Program.

Read the Governor's press release.

Read Fairfax County Economic Development Authority press release.

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