I can report that as of this morning the credit union has removed this impermissible common bond.
Below is a screen shot of this page.
Friday, April 29, 2016
Success: U.S. Eagle Removes Impermissible Common Bond from Online Application
Earlier this week, I wrote that U.S. Eagle Federal Credit Union (Albuquerque, NM) was still listing an impermissible common bond of "50 years of age or better and a resident of New Mexico" on its online membership application.
I can report that as of this morning the credit union has removed this impermissible common bond.
Below is a screen shot of this page.
I can report that as of this morning the credit union has removed this impermissible common bond.
Below is a screen shot of this page.
Thursday, April 28, 2016
Coastal CU Secures Naming Rights to Amphitheatre (Updated)
Raleigh-based Coastal Federal Credit Union has secured the naming rights to Walnut Creek Amphitheatre in Raleigh.
The Triangle’s largest outdoor amphitheater will now be called Coastal Credit Union Music Park at Walnut Creek.
While specific deal terms were not disclosed, a news report indicated that it is a multi-year deal with options to extend it longer.
Coastal FCU has about $2.6 billion in assets.
Update:
The News & Observer is reporting that "[a]ccording to the city, Coastal will pay a total of $1.8 million over five years – $200,000 in 2016 and $400,000 each of the next four years. Raleigh and Live Nation will split the deal’s net proceeds evenly, less costs such as new signs for the venue."
Read the story.
The Triangle’s largest outdoor amphitheater will now be called Coastal Credit Union Music Park at Walnut Creek.
While specific deal terms were not disclosed, a news report indicated that it is a multi-year deal with options to extend it longer.
Coastal FCU has about $2.6 billion in assets.
Update:
The News & Observer is reporting that "[a]ccording to the city, Coastal will pay a total of $1.8 million over five years – $200,000 in 2016 and $400,000 each of the next four years. Raleigh and Live Nation will split the deal’s net proceeds evenly, less costs such as new signs for the venue."
Read the story.
Royal Credit Union to Acquire Saint Paul-based Capital Bank
Royal Credit Union (Eau Claire, WI) has entered into an agreement to acquire Capital Bank (Saint Paul, MN).
Under the terms of the agreement, Royal will assume approximately $35 million in total assets in the transaction. The deal is expected to be completed in the second half of 2016. The acquisition is still awaiting approval of state regulators, the FDIC, and NCUA.
Royal Credit Union has almost $1.8 billion in assets.
In 2010, Royal Credit Union (WI) acquired the 11 branches and $177 million in deposits from Anchor Bank (WI).
Read the press release.
Under the terms of the agreement, Royal will assume approximately $35 million in total assets in the transaction. The deal is expected to be completed in the second half of 2016. The acquisition is still awaiting approval of state regulators, the FDIC, and NCUA.
Royal Credit Union has almost $1.8 billion in assets.
In 2010, Royal Credit Union (WI) acquired the 11 branches and $177 million in deposits from Anchor Bank (WI).
Read the press release.
Investigative Report Examines Quorum's Relationship to Vacation Ownership Interest Company
In a follow up story on Diamond Resorts International, the Southern Investigative Reporting Foundation examines the relationship of Diamond Resorts International, a vacation ownership interest business, and Quorum Federal Credit Union (Purchase, NY).
The investigative report notes that Quorum Federal Credit Union has become a major lender to Diamond Resorts International. Quorum is also financing other vacation ownership interest companies.
Diamond Resorts International has entered into a $100 million loan facility agreement with Quorum FCU through the end of 2017. At the end of 2015, Diamond Resorts International represents 27 percent of Quorum's vacation ownership loans.
A former Quorum official told Southern Investigative Reporting Foundation that Diamond seemed to send its riskier loans to the credit union. Many of the loans went to applicants with credit scores below 660.
The article further points out that Quorum partnered with Diamond and other vacation ownership interest businesses to grow its membership.
According to the report, an association was used to qualify people for membership, who were seeking a timeshare loan from Quorum. When Quorum approved the loan, Diamond Resorts International purportedly deposited $25 in the borrowers savings account.
In addition, the report examines the relationship of Quorum with its credit union service organization, Vacation Ownership Funding Corporation, Inc. (VOFCO). Quorum owns 79 percent of VOFCO.
The article cites Quorum's 2015 annual report that the National Credit Union Administration is scrutinizing Quorum's Vacation Ownership Loan Program and may require Quorum to divest a large portion of its timeshare loans.
Read the report.
The investigative report notes that Quorum Federal Credit Union has become a major lender to Diamond Resorts International. Quorum is also financing other vacation ownership interest companies.
Diamond Resorts International has entered into a $100 million loan facility agreement with Quorum FCU through the end of 2017. At the end of 2015, Diamond Resorts International represents 27 percent of Quorum's vacation ownership loans.
A former Quorum official told Southern Investigative Reporting Foundation that Diamond seemed to send its riskier loans to the credit union. Many of the loans went to applicants with credit scores below 660.
The article further points out that Quorum partnered with Diamond and other vacation ownership interest businesses to grow its membership.
According to the report, an association was used to qualify people for membership, who were seeking a timeshare loan from Quorum. When Quorum approved the loan, Diamond Resorts International purportedly deposited $25 in the borrowers savings account.
In addition, the report examines the relationship of Quorum with its credit union service organization, Vacation Ownership Funding Corporation, Inc. (VOFCO). Quorum owns 79 percent of VOFCO.
The article cites Quorum's 2015 annual report that the National Credit Union Administration is scrutinizing Quorum's Vacation Ownership Loan Program and may require Quorum to divest a large portion of its timeshare loans.
Read the report.
Wednesday, April 27, 2016
Taxi Medallion Participation Loans Adversely Impact Quorum FCU
In its 2015 Annual Report, Quorum Federal Credit Union provides additional details on the performance of its $76.3 million portfolio of taxi medallion participation loans.
Taxi participation loans are collateralized by taxi medallions, primarily in the cities of Philadelphia, New York, Boston, and Chicago. Quorum owns a percentage of each loan, primarily between 80 percent and 90 percent.
Quorum reported that at the end of 2015 almost $6.1 million in taxi medallion participation loans were past due 90 days or more and were in non-accrual status. In addition, $4.35 million in taxi participation loans were 60 to 89 days past due and $2 million in taxi medallion participation loans were 30 to 59 past due.
This means 16.3 percent of all taxi medallion loans were in some stage of delinquency.
Quorum also reported 5 modified taxi medallion participation loans worth almost $6.6 million at the end of 2015.
Quorum further stated in its Annual Report:
In fact, Quorum's first quarter Call Report shows a further erosion in its performance, as more participation loans became delinquent. The credit union posted a loss of almost $3 million for the first quarter after recording a profit of $3.4 million for all of 2015. Quorum reported an increase in provisions for loan and lease losses during the first quarter of 2016 compared to a year ago -- $6.8 million versus almost $2.2 million, respectively.
This explains why Quorum is advertising to hire a commercial workout specialist.
Read the 2015 Annual Report.
Taxi participation loans are collateralized by taxi medallions, primarily in the cities of Philadelphia, New York, Boston, and Chicago. Quorum owns a percentage of each loan, primarily between 80 percent and 90 percent.
Quorum reported that at the end of 2015 almost $6.1 million in taxi medallion participation loans were past due 90 days or more and were in non-accrual status. In addition, $4.35 million in taxi participation loans were 60 to 89 days past due and $2 million in taxi medallion participation loans were 30 to 59 past due.
This means 16.3 percent of all taxi medallion loans were in some stage of delinquency.
Quorum also reported 5 modified taxi medallion participation loans worth almost $6.6 million at the end of 2015.
Quorum further stated in its Annual Report:
Recently, market disruption has occurred in the taxi industry due to new competition. This competition has negatively impacted the taxi industry, its revenues and has caused the value of taxi medallions to depreciate over the past year. Further or prolonged market disruption in the taxi industry may increase our delinquencies and non-accrual loans collateralized by taxi medallions. It is at least reasonably possible that our losses on these loans could increase in the near term due to further or prolonged market disruption impacting the value of taxi medallions.
In fact, Quorum's first quarter Call Report shows a further erosion in its performance, as more participation loans became delinquent. The credit union posted a loss of almost $3 million for the first quarter after recording a profit of $3.4 million for all of 2015. Quorum reported an increase in provisions for loan and lease losses during the first quarter of 2016 compared to a year ago -- $6.8 million versus almost $2.2 million, respectively.
This explains why Quorum is advertising to hire a commercial workout specialist.
Read the 2015 Annual Report.
Tuesday, April 26, 2016
Har-Co CU Once Again Seeks Bank Charter
The American Banker is reporting that Har-Co Credit Union (Bel Air, MD) is seeking approval from state and federal regulators to convert to a state-chartered mutual savings bank, according to legal documents.
If approved, the institution would change its name to Har-Co Community Bank.
This is the second attempt by Har-Co to switch to a mutual savings bank charter. The credit union previously attempted to convert to a bank in 2011. Har-Co members had approved the conversion; but it was never completed.
Read the American Banker story (subscription required).
Read the Notice of Consideration to Convert.
If approved, the institution would change its name to Har-Co Community Bank.
This is the second attempt by Har-Co to switch to a mutual savings bank charter. The credit union previously attempted to convert to a bank in 2011. Har-Co members had approved the conversion; but it was never completed.
Read the American Banker story (subscription required).
Read the Notice of Consideration to Convert.
Job Half Done on Impermissible Common Bond at U.S. Eagle
Over a year ago, I brought to the attention of the National Credit Union Administration (NCUA) that U.S. Eagle Federal Credit Union (Albuquerque, NM) was allowing individuals to join via an impermissible common bond based on age.
NCUA's General Counsel earlier this year issued a legal opinion letter stating that age by itself is an impermissible common bond.
As a result, U.S. Eagle, probably at NCUA's prodding, has removed from its How to Join webpage that being age 50 or better was an eligible common bond (see screen shot below from April 25 and click on image to enlarge).
Unfortunately, NCUA gets an incomplete, as the job is not done.
The credit union still lists being 50 years or better on its online application for a new member. Below is a screen shot of my March 29 e-mail to NCUA's Office of General Counsel bring this issue o NCUA's attention.
As of April 25, U.S. Eagle has not corrected its online application and still lists being 50 years of age or better and a New Mexico resident as a membership requirement. Below is a screen shot of the online application on April 25.
Until the online application is corrected, NCUA has not finished its job enforcing its common bond requirements.
NCUA's General Counsel earlier this year issued a legal opinion letter stating that age by itself is an impermissible common bond.
As a result, U.S. Eagle, probably at NCUA's prodding, has removed from its How to Join webpage that being age 50 or better was an eligible common bond (see screen shot below from April 25 and click on image to enlarge).
Unfortunately, NCUA gets an incomplete, as the job is not done.
The credit union still lists being 50 years or better on its online application for a new member. Below is a screen shot of my March 29 e-mail to NCUA's Office of General Counsel bring this issue o NCUA's attention.
As of April 25, U.S. Eagle has not corrected its online application and still lists being 50 years of age or better and a New Mexico resident as a membership requirement. Below is a screen shot of the online application on April 25.
Until the online application is corrected, NCUA has not finished its job enforcing its common bond requirements.
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