Friday, April 17, 2015

Nusenda FCU Buys Naming Rights to Football Stadium

The Albuquerque Public Schools Foundation and Nusenda Federal Credit Union finalized a deal regarding the naming rights to Community Stadium. 

The football stadium is now officially named Nusenda Credit Union Community Stadium.

In exchange for the naming rights the credit union will pay the APS school foundation $79,800 annually over the next eight years for the naming rights.

Read the story.

Thursday, April 16, 2015

Oregon State Credit Union Breaks Ground on New $18 Million HQ Building

Oregon State Credit Union (Corvallis, OR) broke ground this week on a new $18 million, three-story, 62,000-square-foot headquarters building.

Work on the new building is getting underway as the credit union transitions from a federal to state charter and will see an expansion of its service area from 5 Oregon counties to as many as 24 Oregon counties.

Read the story.

Mergers and Net Worth Adjustments

Recently, Pepsico Employees Federal Credit Union (White Plains, NY) was merged into larger USAlliance Federal Credit Union (Rye, NY).

The rationale for the merger was expanded services.

However, what was not disclosed was whether the 3,567 members of Pepsico Employees FCU received any net worth adjustment.

According to the December 2014 call reports, Pepsico Employees FCU had a higher net worth ratio than USAlliance FCU -- 13.95 percent versus 8.57. This is a difference of 538 basis points.

If the combined institution's net worth ratio was maintained at 8.57 percent, then the members of Pepsico Employees FCU should have received approximately $1.92 million net worth payment or slightly more than $65 per $1000 deposited at the credit union.

An e-mail to USAlliance FCU about whether a net worth adjustment was part of the merger agreement was not answered.

I don't know how prevalent such net worth adjustments are when credit unions merge; but if a credit union that merges into another has a higher net worth ratio, then its members should benefit by getting back a portion of the credit union's net worth.

Wednesday, April 15, 2015

Distributional Impact of Changing Assessment Base.

In the NCUA's White Paper on National Credit Union Share Insurance Fund Improvements, the agency proposed changing the assessment base from insured shares and deposits to total assets minus net worth. Read my April 6 blog.

If this proposal was to become law, only 456 natural person credit unions would see their portion of the NCUSIF assessment base increase as of the end of 2014. This would mean these credit unions would pay higher deposit insurance premiums, if assessed and the aggregate premium payments are revenue neutral.

All other credit unions would either see a reduction or no change in their share of the NCUSIF assessment base.

Below is an analysis of credit unions by asset size that would see an increase their share of the NCUSIF assessment base.

Two credit unions with more than $10 billion in assets would see their portion of the NCUSIF assessment base increase with the change.

Eleven credit unions with assets between $5 billion and $10 billion would experience an increase in their portion of the NCUSIF assessment base.

For credit unions with assets between $1 billion and $5 billion, 86 credit unions would encounter an increase in their share of the NCUSIF assessment base.

The portion of the assessment base for 63 credit unions with assets between $500 million and $1 billion would increase.

Sixty-two credit unions with assets between $250 million and $500 million would experience an increase in their share of the assessment base.

For credit unions with between $100 million and $250 million, 85 would see their portion of the assessment base grow.

Finally, 147 small credit union would see an increase in their share of the NCUSIF assessment base.

Tuesday, April 14, 2015

Bill Giving Privately Insured CUs Access to FHLBs Passes House

The Capital Access for Community Financial Institutions Act of 2015 (H.R. 299) passed the House of Representatives by a voice vote on Monday.

The bill would allow privately insured credit unions to join the Federal Home Loan Bank (FHLB) system.

Monday, April 13, 2015

Who Should Pay Associational Dues?

The National Credit Union Administration in its proposed associational common bond rule states that a federal credit union (FCU) "may pay a member’s associational dues if the member has given consent."

However, it seems to me that most, if not all, members would give their consent to an FCU paying their associational dues.

The paying of dues by the member, not the FCU, would show that the member to some degree supports the goals and mission of the association and that they are not just joining the association for the purpose of becoming a member of an FCU.

This payment of dues by the member should be a requirement for fulfilling the totality of the circumstances test for an associational common bond.

Friday, April 10, 2015

Federal Reserve Discount Window Borrowings by CUs, Q1 2013

The Federal Reserve recently released first quarter 2013 data on credit union and bank borrowings from the Federal Reserve's discount window.

The following tables look at individual transactions by credit unions during the first quarter.


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