Monday, April 22, 2019

Navy FCU Pays $24.5 Million to Settle Improper OD Fee Lawsuit

Navy Federal Credit Union (Vienna, VA) paid $24.5 million to settle overdraft (OD) fee class action lawsuit.

Navy FCU agreed to pay up to $500,000 towards Settlement Administration Cost.

According to the complaint, Navy FCU members were charged overdraft fees under the credit union’s Optional Overdraft Protection Service between July 22, 2012 and Nov. 20, 2017.

The plaintiffs alleged Navy FCU improperly assessed and collected OD fees. Navy FCU also breached its contractual agreement.

It was estimated that if the class action lawsuit went to trial, recoverable damages would have been almost $60 million. The Settlement would provide plaintiffs with a recovery of between 30 and 40 percent of potential damages.

The final approval hearing is set for May 20, 2019.

Click here for documents.

Sunday, April 21, 2019

STCU to Acquire Branch Customers of Banner Bank

Spokane Teachers Credit Union (STCU), headquartered in Liberty Lake, Washington, is acquiring the Bonner County (ID) customers of Banner Bank (Walla Walla, WA).

According to the most recent summary of deposit data, Banner Bank had one branch in Bonner County at Sandpoint with $20.14 million in deposits.

The deal is pending regulatory approval and is expected to close in August.

All employees of the Banner Bank branch in Sandpoint will be offered employment with STCU.

Price of the deal was not disclosed.

This is not the first deal by STCU. In 2003, the credit union acquired a branch and customers of Wheatland Bank.

Read the press release.

Saturday, April 20, 2019

Canvas CU Faces Class Action Lawsuit over OD Fee Practices

Canvas Credit Union (Lone Tree, CO), the former Public Service Credit Union, is being sued over its overdraft (OD) fee practices.

The class action lawsuit, Ronald Brooks v. Canvas Credit Union, alleges that Canvas CU had a routine business practice of (a) assessing overdraft fees on transactions that did not actually overdraw the account; and (b) charging two or three non-sufficient funds fees on a single transaction.

The lawsuit claims that the the credit union violated Colorado consumer protection laws and its disclosures in its account documents.

The lawsuit was filed by Franklin D. Azar & Associates.

Read the press release.

Friday, April 19, 2019

L&N FCU Buys Naming Rights to University Arena

L&N Federal Credit Union (Louisville, KY) recently bought the naming rights to the University of Louisville (UofL) Cardinal Arena.

The $1.2 billion credit union gave a $2 million donation to University of Louisville Athletics to help fund upcoming projects.

In return for the donation, a 1,100-seat venue has been renamed L&N Federal Credit Union Arena.

The facility houses the offices, training and competition facilities for the Cardinals' women's volleyball team.

Read more.

Navy Surpasses $100 Billion in Assets Milestone, as of Q1 2019

Navy Federal Credit Union (Vienna, VA) surpassed the $100 billion threshold.

As of March 31, 2019, the credit union reported $103.2 billion in assets. This is up from almost $97 billion at the end of 2018.

Navy is the first credit union to top $100 billion in assets.

Moreover, Navy reported net income for the first quarter of 2019 of approximately $423.6 million.

Interest income was almost $1.5 billion for the first quarter. Non-interest income was $413.1 million. Operating expenses and dividends were $765.9 million and $207.5 million, respectively.

Review the Statement of Financial Condition.

Review the Statement of Income.

Thursday, April 18, 2019

Survey: No Change In the Percent of Small Businesses Seeking Credit from CUs

The percentage of small businesses with employees applying for financing from credit unions was flat, according to the latest Small Business Credit Survey — a joint effort by the 12 regional Federal Reserve Banks.

The survey had responses from 6,614 small employer firms.

The 2018 survey found that 43 percent of employer firms applied for financing in the previous 12 months.

Traditional bank lending remains the primary source of financing for the nation’s small businesses, although the share of applicants seeking financing from online borrowers has grown markedly.

The survey found that 9 percent of these small businesses applied for loans, lines of credit, or cash advances from credit unions. The same percentage of small businesses sought credit from credit unions in 2016 and 2017.

There was a slightly higher percentage of medium/high credit risk borrowers that sought financing from from credit unions compared to low credit risk borrowers. The survey found 12 percent of medium/high credit risk borrowers sought credit from credit unions versus 9 percent of borrowers with low credit risk.

Among firms that did not apply for credit, 7 percent identified using credit unions regularly for loans, lines of credit, or cash advances. This is up from 5 percent in 2016, but down slightly from 8 percent in 2017.

Review the results of the survey.

Wednesday, April 17, 2019

CUNA Claims MBL Victory, Then Seeks More Holes in MBL Cap

After declaring victory with respect to the member business loan (MBL) fight, the Credit Union National Association (CUNA) appears to have reversed course.

CUNA is claiming that the enactment of S. 2155, Economic Growth, Regulatory Relief, and Consumer Protection Act, and the National Credit Union Administration's amended member business loan rule have given credit unions ample opportunity to make business loans. In fact, CUNA stated that these two events gave credit unions greater business lending authority than they would have received by just raising the MBL cap from 12.25 percent of assets to 27.5 percent of assets.

Here is what CUNA wrote on January 6, 2019:

"Importantly, this legislation ... carried a major charter enhancement provision, exempting one- to four-family non-owner occupied loans from the member business lending cap. Taken together with our success on the NCUA’s MBL rule, which exempts from the cap loan participations purchased from other credit unions, we can officially declare final victory on the system’s 20-year battle to restore credit union business authority. Indeed, these two changes will provide more cap space than we had been seeking in the old Royce-Udall legislation that aimed to raise the cap to 27.5%."

Now, CUNA is supporting a bill that would exclude business loans to veterans from the aggregate MBL cap.

If that was victory, what's next on CUNA's wish list?

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