Wednesday, June 26, 2019

Iowa Credit Union to Buy Branches, Loans, and Deposits from First American Bank

GreenState Credit Union (North Liberty, IA) announced on June 25 that it will purchase seven First American Bank (Fort Dodge, IA) branch locations in central Iowa.

The acquisition, which includes the bank's Des Moines metro and Fort Dodge locations, includes approximately $200 million in loans and $500 million in deposits.

GreenState Credit Union was formerly known as University of Iowa Community Credit Union.

GreenState CU is the largest Iowa credit union with almost $5.4 billion in assets.

The transaction is subject to regulatory approval and is expected to close in the fourth quarter.

Earlier this year, First American Bank announced that it was selling its three branches and assets in Florida to MIDFLORIDA Credit Union (Lakeland, FL).

Read the press release.

Senator to NCUA: Proposed Delay of Risk-Based Capital Rule Is Unacceptable

Senator Sherrod Brown (D - OH) criticized the National Credit Union Administration for proposing to delay its risk-based capital rule for two years until January 1, 2022.

This is the second delay of the agency's risk-based capital rule. The risk-based capital rule was initially scheduled to go into effect on January 1, 2019.

In a statement, Senator Brown stated:

“I am disturbed that ten years after the financial crisis, the NCUA is once again delaying important rules to increase capital at large credit unions. I commend Board Member Harper for opposing this unnecessary extension and demanding that NCUA focus on strengthening supervision and identifying risks to credit unions.”

Read the press release.

Tuesday, June 25, 2019

Chartway FCU Buys Naming Rights to ODU Arena

Old Dominion University (ODU) and Chartway Federal Credit Union (Virginia Beach, VA) have signed a 10-year naming rights agreement for the 8,400-seat arena in the Ted Constant Convocation Center complex.

The arena will now be named Chartway Arena in recognition of the $4.25 million agreement. Chartway will also become the official credit union of ODU Athletics.

The agreement also establishes the Chartway-Constant Athletic Scholarship Fund. The fund will award a total of $25,000 in scholarships annually to student-athletes. The fund will continue each year throughout the contract.

Read the press release.

Monday, June 24, 2019

Bill Gives NY CUs Access to Bank Development District Program

The New York Assembly passed legislation (A.3320) allowing credit unions access to the state's Banking Development District Program.

Earlier, the Senate passed the same bill (S.727-A).

The Banking Development District Program was established in 1997 to encourage financial institutions to establish branches in underserved communities throughout New York. Institutions that are approved for a Banking Development District designation are eligible to receive up to $10 million in subsidized public deposits and other benefits, including below market-rate deposits from the state of New York.

The justification to expand the program to credit unions was due to the modest number of applications from banks and other financial institutions.

The bill awaits the signature of Governor Andrew Cuomo.

Read more.

Friday, June 21, 2019

Blinder: Does NCUA and the Federal Reserve Have Same Insight to Systemic Financial Risk?

In an op-ed in the Wall Street Journal, Alan Blinder, a professor of economics and public affairs at Princeton University and a former vice chairman of the Federal Reserve, discusses flaws in the structure of the Financial Stability Oversight Council (FSOC).

The Dodd-Frank Act created FSOC. FSOC is a 10-member panel consisting mainly of the heads of the nation’s top financial regulatory agencies.

However, Blinder questions the design of FSOC.

For example, Blinder wrote:
"[Y]ou might question the FSOC’s voting structure: every agency gets one vote. So it gives equal weight to the chairmen of the Fed and the National Credit Union Administration. Do you think they have equal insight into systemic financial risk?"

Read the op-ed (subscription required).

Thursday, June 20, 2019

NCUA Board Proposes Delaying Risk-Based Capital Rule by Two-Years

The National Credit Union Administration Board on June 20th voted on a proposal to delay by two-years the implementation date of its risk-based capital rule until January 1, 2022.

Currently, the risk-based capital rule was scheduled to go into effect on January 1, 2020.

NCUA staff stated that the delay would not pose undue risk to the National Credit Union Share Insurance Fund.

Also, the delay would allow the NCUA Board to examine whether asset securitization should be accounted for by NCUA's capital standards; whether certain forms of subordinated debt should qualify as capital for risk-based capital purposes; and whether a community bank leverage ratio analog should be integrated into NCUA's capital standard.

NCUA Chairman Hood stated that he intends to bring forth a proposed rule allowing subordinated debt count towards a risk-based capital standard by the end of this year.

NCUA further stated that the delay would benefit credit unions by allowing them to allocate resources to implementing the Financial Accounting Standards Board current expected credit loss (CECL) standard.

Moreover, the time delay would allow NCUA to direct additional time and resources toward modernizing its examination systems.

Board member McWatters and Chairman Hood voted for the proposal.

Board member Harper dissented to delaying the risk-based capital rule and voted no on the proposal.

Read the proposed rule.

Wednesday, June 19, 2019

16 Foreclosed Taxi Medallions Owned by Aspire FCU to be Auctioned

On June 27, 16 New York City taxi medallions foreclosed by Aspire Federal Credit Union (Clark, NJ) will be auctioned.

The minimum bid is $130,000 for unrestricted medallions. At their peak, New York City taxi medallions were valued at more than $1 million.

There are 15 unrestricted medallions. One medallion is for a handicap medallion.

Bidders may present bids for one, multiple, or all medallions.

Read details of the auction.

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