The National Credit Union Administration on August 31 liquidated taxi medallion lender Melrose Credit Union of Briarwood, New York.
Teachers Federal Credit Union, of Hauppauge, New York, immediately assumed all of Melrose’s members and shares as well as some loans and other assets. Teachers Federal Credit Union is a federal credit union that serves 300,541 members and has assets of nearly $6.1 billion, according to the credit union’s most recent Call Report.
The NCUA made the decision to liquidate Melrose and discontinue its operations after determining the credit union was insolvent and had no prospect for restoring viable operations. Troubled taxi medallion loans due to the disruption from ride sharing companies ultimately led to massive losses at the credit union. Click here to review Melrose's mid-year financial performance.
The New York State Department of Financial Services placed Melrose into conservatorship on Feb. 10, 2017, and named the NCUA as conservator.
At the time of liquidation and subsequent purchase by Teachers Federal Credit Union, Melrose served 19,864 members and had assets of approximately $1.1 billion, according to the credit union’s most recent Call Report.
Melrose is the fifth federally insured credit union liquidation in 2018.
Read the press release.
Friday, August 31, 2018
Thursday, August 30, 2018
Vantage Trust FCU Agrees to Settlement over Its Occupancy of Building on Federal Land
Vantage Trust Federal Credit Union (Wilkes Barre, PA) has reached a settlement with the United States over its occupancy of a building on the property of the Wilkes-Barre VA Medical Center after the credit union's license expired.
The United States sued Vantage Trust FCU seeking the removal of the credit union from federal land and to recover money damages.
As part of the settlement, Vantage Trust FCU agreed to turn over the building which previously housed the credit union to the US Department of Veterans Affairs and also to pay to the United States $205,000.
Read the press release.
The United States sued Vantage Trust FCU seeking the removal of the credit union from federal land and to recover money damages.
As part of the settlement, Vantage Trust FCU agreed to turn over the building which previously housed the credit union to the US Department of Veterans Affairs and also to pay to the United States $205,000.
Read the press release.
Turning the Table
Over the last six years, there have been almost two dozen announced or completed deals involving credit unions acquiring banks.
It is time for banks to consider acquiring credit unions as a potential growth strategy.
The board of a credit union, as part of their fiduciary duty, must consider any merger proposal.
Members would benefit from a credit union merger into a bank. Members would receive a one-time payment for their interest in the credit union's net worth.
For example, when Nationwide Federal Credit Union merged with Nationwide Bank, the members of Nationwide FCU received almost $150 for every $1,000 in an account.
However, such a transaction is not without challenges.
A bank will need to find a credit union that would be willing to entertain a merger offer. This could take time, as key decision makers at a credit union are likely to lose roles and responsibilities after the merger.
Also, the National Credit Union Administration's regulation governing a credit union merger into a bank creates obstacles to such deals. Read 12 CFR 708a Subpart C.
To ensure that the transaction is successful, a bank and credit union should have similar cultures and the merger makes sense as a strategic fit.
It is time for banks to consider acquiring credit unions as a potential growth strategy.
The board of a credit union, as part of their fiduciary duty, must consider any merger proposal.
Members would benefit from a credit union merger into a bank. Members would receive a one-time payment for their interest in the credit union's net worth.
For example, when Nationwide Federal Credit Union merged with Nationwide Bank, the members of Nationwide FCU received almost $150 for every $1,000 in an account.
However, such a transaction is not without challenges.
A bank will need to find a credit union that would be willing to entertain a merger offer. This could take time, as key decision makers at a credit union are likely to lose roles and responsibilities after the merger.
Also, the National Credit Union Administration's regulation governing a credit union merger into a bank creates obstacles to such deals. Read 12 CFR 708a Subpart C.
To ensure that the transaction is successful, a bank and credit union should have similar cultures and the merger makes sense as a strategic fit.
Wednesday, August 29, 2018
Kitsap Credit Union Buys Naming Rights to High School Athletic Complex
Kitsap Credit Union (Bremerton, WA) purchased the naming rights to the athletic complex at Central Kitsap High School.
The credit union paid $500,000 for the naming rights and advertising space at the athletic complex. The funds will be used to offset the cost of bleachers at the new football stadium and track.
The athletic complex will be known as Kitsap Credit Union Athletic Complex.
The agreement is for six years.
Read the story.
The credit union paid $500,000 for the naming rights and advertising space at the athletic complex. The funds will be used to offset the cost of bleachers at the new football stadium and track.
The athletic complex will be known as Kitsap Credit Union Athletic Complex.
The agreement is for six years.
Read the story.
Tuesday, August 28, 2018
NCUA Charters New CU to Serve Nepali-American Community
The National Credit Union Administration (NCUA) on August 28 granted a federal charter and Share Insurance Fund coverage to Everest Federal Credit Union in Jackson Heights, New York.
The credit union will serve the approximately 15,000 members of the Non Resident Nepalis National Coordination Council of USA.
Everest Federal Credit Union is the first credit union chartered by NCUA this year.
Read the press release.
The credit union will serve the approximately 15,000 members of the Non Resident Nepalis National Coordination Council of USA.
Everest Federal Credit Union is the first credit union chartered by NCUA this year.
Read the press release.
Wisconsin Regulator Approves Superior Choice CU P&A of Bank
The Wisconsin Department of Financial Institutions' Office of Credit Unions on July 26 approved the purchase and assumption (P&A) of Dairyland State Bank (Bruce, WI) by Superior Choice Credit Union (Superior, WI).
The depositors and borrowers of Dairyland State Bank will become members of Superior Choice Credit Union. The credit union will also purchase and assume the $79.8 million bank's five branches.
According to its most recent Call Report, Superior Choice Credit Union has $417.5 million in assets.
The transaction is expected to close on August 31, 2018.
Read the Credit Union Activity Report.
The depositors and borrowers of Dairyland State Bank will become members of Superior Choice Credit Union. The credit union will also purchase and assume the $79.8 million bank's five branches.
According to its most recent Call Report, Superior Choice Credit Union has $417.5 million in assets.
The transaction is expected to close on August 31, 2018.
Read the Credit Union Activity Report.
Monday, August 27, 2018
MacArthur Foundation Invests $15 Million in Self-Help FCU
The MacArthur Foundation on August 24 invested $15 million in the form of a low-interest loan to Self-Help Ventures Fund (Durham, NC).
The investment is to support the efforts of Self-Help Federal Credit Union to stabilize and grow the recently acquired operations of Seaway Bank, which historically provided banking services in underserved African-American communities on Chicago's South Side.
Read the press release.
The investment is to support the efforts of Self-Help Federal Credit Union to stabilize and grow the recently acquired operations of Seaway Bank, which historically provided banking services in underserved African-American communities on Chicago's South Side.
Read the press release.
Sunday, August 26, 2018
Kern School FCU Buys Naming Rights to Basketball Court
Cal State University Bakersfield Athletics on August 16 unveiled Kern Schools Court.
In February 2018, Kern School Federal Credit Union made a gift to the university to renovate the basketball court.
In return for the gift, the basketball court was named after the credit union.
The amount of the contribution was not disclosed.
Read the press release.
In February 2018, Kern School Federal Credit Union made a gift to the university to renovate the basketball court.
In return for the gift, the basketball court was named after the credit union.
The amount of the contribution was not disclosed.
Read the press release.
Thursday, August 23, 2018
Summit CU Tops Off New HQ Building
Summit Credit Union (Madison, WI) has topped off its new six-story, 152,000 square-foot headquarter's building in Cottage Grove, Wisconsin.
The building will include exercise and meditation rooms, a sand volleyball court, a cafeteria, and walking and biking paths.
The new corporate headquarters is scheduled to open in 2019.
The price tag of this project was not disclosed.
Read the press release.
The building will include exercise and meditation rooms, a sand volleyball court, a cafeteria, and walking and biking paths.
The new corporate headquarters is scheduled to open in 2019.
The price tag of this project was not disclosed.
Read the press release.
Altura Credit Union Provides Emergency Loans to Non-members
Altura Credit Union (Riverside, CA) is providing emergency loans to members and non-members affected by the Holy Fire.
According to the credit union's website, the emergency loan to non-members has:
So, how can this credit union provide loans to non-members?
According to the credit union's website, the emergency loan to non-members has:
- an interest rate of 5.99 percent;
- a maturity of 18 months;
- no pre-payment penalty;
- no loan processing fee; and
- no payment for the first 90 days.
So, how can this credit union provide loans to non-members?
Wednesday, August 22, 2018
Park Community CU Buys Naming Right to University Basketball Court
Park Community Credit Union (Louisville, KY) buys naming rights to the basketball court at Bellarmine University.
The $926 million credit union became the official credit union of the school and the Official Partner of Bellarmine men's basketball and Bellarmine athletics.
The sponsorship includes co-branded spaces on Bellarmine's campus, a Bellarmine University ATM debit card, sponsored events and access to a full suite of financial services.
The basketball court will be known as "Park Community Credit Union Court at Knights Hall."
The price tag of the sponsorship was not disclosed.
The $926 million credit union became the official credit union of the school and the Official Partner of Bellarmine men's basketball and Bellarmine athletics.
The sponsorship includes co-branded spaces on Bellarmine's campus, a Bellarmine University ATM debit card, sponsored events and access to a full suite of financial services.
The basketball court will be known as "Park Community Credit Union Court at Knights Hall."
The price tag of the sponsorship was not disclosed.
Tuesday, August 21, 2018
Raining on the H.R. 1151 Parade
The credit union industry has been celebrating the 20th anniversary of the enactment of H.R. 1151, the Credit Union Membership Access Act of 1998.
H.R. 1151 was signed into law on August 7, 1998.
While H.R. 1151 overturned the Supreme Court decision, a careful review of the law suggests that there are a number of provisions that have been a sore point for credit unions and their trade associations.
H.R. 1151 capped business lending for credit unions at 12.25 percent of assets. Before the bill was enactment, there was not a statutory cap. Over the last twenty years, credit unions and their trade associations have failed in their attempts to raise the cap.
The bill defined net worth and subjected credit unions to statutory net worth requirement and prompt corrective action. It also required complex credit unions to be subject to risk-based net worth requirements.
The bill also imposed the requirement that a well-defined community must be local. Prior to the bill, there was not a local requirement.
The bill gave credit unions the authority to convert to a mutual savings bank charter. Unfortunately, the National Credit Union Administration has erected numerous obstacles to deny credit unions the ability to exercise this authority.
H.R. 1151 was signed into law on August 7, 1998.
While H.R. 1151 overturned the Supreme Court decision, a careful review of the law suggests that there are a number of provisions that have been a sore point for credit unions and their trade associations.
H.R. 1151 capped business lending for credit unions at 12.25 percent of assets. Before the bill was enactment, there was not a statutory cap. Over the last twenty years, credit unions and their trade associations have failed in their attempts to raise the cap.
The bill defined net worth and subjected credit unions to statutory net worth requirement and prompt corrective action. It also required complex credit unions to be subject to risk-based net worth requirements.
The bill also imposed the requirement that a well-defined community must be local. Prior to the bill, there was not a local requirement.
The bill gave credit unions the authority to convert to a mutual savings bank charter. Unfortunately, the National Credit Union Administration has erected numerous obstacles to deny credit unions the ability to exercise this authority.
Monday, August 20, 2018
Cobalt FCU to Switch to State Charter and Add Additional Counties
The Omaha World-Herald is reporting that Cobalt Federal Credit Union, headquartered in Papillion, NE, plans to switch from a federal to a state charter.
The former SAC Federal Credit Union will become an Iowa chartered credit union.
As an Iowa state charter, the credit union will add Lancaster and Dodge Counties in Nebraska to its field of membership (FOM).
The State of Iowa and the National Credit Union Administration have approved the proposed charter change.
The $1 billion credit union had tried twice to add the two counties to its existing FOM as a federal credit union, but was denied by the National Credit Union Administration.
Read the story.
The former SAC Federal Credit Union will become an Iowa chartered credit union.
As an Iowa state charter, the credit union will add Lancaster and Dodge Counties in Nebraska to its field of membership (FOM).
The State of Iowa and the National Credit Union Administration have approved the proposed charter change.
The $1 billion credit union had tried twice to add the two counties to its existing FOM as a federal credit union, but was denied by the National Credit Union Administration.
Read the story.
Friday, August 17, 2018
Conserved Ukrainian Future CU Merged
Ukrainian Future Credit Union (Warren, MI) has merged into Selfreliance Ukrainian American Federal Credit Union (Chicago, IL) on August 17.
Ukrainian Future CU was placed into conservatorship on February 23, 2018.
The Michigan Department of Insurance and Financial Services and the National Credit Union Administration decided that merging Ukrainian Future Credit Union into Selfreliance Ukrainian American Federal Credit Union was in the best interests of the members.
At the time of the merger, Ukrainian Future Credit Union was a federally insured, state-chartered credit union with 3,652 members and assets of $77.9 million. Selfreliance Ukrainian American Federal Credit Union served 20,359 members and had assets of $485.9 million.
Read the press release.
Ukrainian Future CU was placed into conservatorship on February 23, 2018.
The Michigan Department of Insurance and Financial Services and the National Credit Union Administration decided that merging Ukrainian Future Credit Union into Selfreliance Ukrainian American Federal Credit Union was in the best interests of the members.
At the time of the merger, Ukrainian Future Credit Union was a federally insured, state-chartered credit union with 3,652 members and assets of $77.9 million. Selfreliance Ukrainian American Federal Credit Union served 20,359 members and had assets of $485.9 million.
Read the press release.
Q2 Update on NJ CUs with Exposure to Taxi Medallion Loans
The following 3 New Jersey credit unions reported exposure to taxi medallion loans. The disruption of taxi industry by ride sharing companies dented the performance of these credit unions as of mid-year.
Aspire Federal Credit Union (Clark, NJ)
Aspire Federal Credit Union had a credit union service organization that specialized in financing taxi medallions.
As of June 2018, the $154.4 million credit union had $9.95 million in commercial loans not secured by real estate. Presumably most, if not all, of these loans were to finance taxi medallions.
Th credit union reported a mid-year loss of $1.22 million. In comparison, the credit union reported a loss of $1.09 million for the first 3 months of 2018.
As a result of the second quarter loss, the credit union's net worth fell by 1.3 percent to $10.26 million as of June 2018. The credit union was adequately capitalized with a net worth ratio of 6.64 percent.
The credit union reported a 17.9 percent decline in delinquent loans during the second quarter to $5.5 million. As of June 2018, the delinquency rate was 4.76 percent -- down 88 basis points from the prior quarter and 139 basis points from a year ago.
Aspire stated that $2.65 million of delinquent loans were commercial loans to members not secured by real estate. This is down 12.8 percent from the first quarter of 2018 and 44.3 percent from a year ago.
The delinquency rate on non-real estate commercial loans was 26.62 percent.
The credit unions reported net charge-offs of $2.75 million -- up from $1.9 million at the end of the first quarter of 2018. As of June $1.7 million in commercial loans were charged off with no recoveries.
Troubled Debt Restructured (TDR) commercial loans not secured by real estate were almost $3.5 million. This was 7.5 percent from the first quarter of 2018. Delinquent TDR commercial loans were $1.265 million at the end of the second quarter 2018. In other words, 36.5 percent of these loans were past due.
Provisions for loan and lease losses rose by $292,444 during the second quarter to $1.667 million.
However, since net charge-offs rose by more than provisions for loan and lease losses, allowance for loan and lease losses fell by 7.5 percent to $7.36 million. The credit union is over-reserved with a coverage ratio of 133.51 percent as of mid-year 2018.
United Teletech Financial Federal Credit Union (Tinton Falls, NJ)
United Teletech Financial Credit Union posted a mid-year loss of $1.4 million.
The loss was due to an increase in provisions for loan and lease losses. As of the end of the second quarter of 2018, the credit union reported provisions for loan and lease losses of $3.6 million.
Due to the loss, the credit union's net worth fell from $23.1 million at the end of 2017 to $21.7 million at the end of June 2018. The credit union's net worth ratio slipped over the same time frame from 7.23 percent to 7.01 percent. The credit union was barely well capitalized.
The credit union reported $23.7 million in commercial loans not secured by real estate. Presumably most, if not all, of these loans were taxi medallions participation loans to nonmembers.
As of June 2018, the credit union had almost $9.3 million in delinquent loans -- up from $5.3 million from the first quarter of 2018. The delinquency rate rose from 2.01 percent at the end of the first quarter to 3.57 percent as of June 2018.
Delinquent nonmember commercial loans were $4.8 million as of mid-year. The delinquency rate on nonmember commercial loans was 20.35 percent.
At mid-year, net charge-offs were $1.7 million, of which $721 thousand were nonmember commercial loans.
Troubled Debt Restructured (TDR) commercial loans were $12.1 million as of June 2018. The credit union reported that 12.29 percent of TDR commercial loans not secured by real estate were 60 days or more past due.
The increase in provisions for loan and lease losses increased the credit union's allowance for loan and lease losses balance to $12.2 million. Its coverage ratio was 131.89 percent.
First Financial Federal Credit Union (Freehold, NJ)
After posting a loss of $1.7 million for the first quarter of 2018, First Financial FCU reported a loss of $110,377 for the second quarter.
The credit union had $10.8 million in a commercial loans not secured by real estate. Most, if not all, these loans were taxi medallion participation loans to nonmembers.
The credit union reported a 26.2 percent increase in delinquent loans to almost $5.3 million during the second quarter of 2018. The delinquency rate rose 81 basis points during the quarter to 3.96 percent as of June 2018.
The $190 million credit union reported that $2 million in nonmember commercial loans not secured by real estate were 60 days or more past due. this was up from $1.6 million as of March 2018. The delinquency rate on these loans were 18.88 percent, up from 15.03 percent for the prior quarter.
Troubled Debt Restructured (TDR) commercial loans were almost $6 million as of June 2018. Delinquent TDR commercial loans were $1.6 million.
This translates into a delinquency rate on TDR commercial loans of 27.30 percent.
The credit union was undercapitalized as of June 2018 with a net worth ratio of 5.23 percent.
The credit union reported an allowance for loan and lease losses balance of almost $4.9 million. The credit union's coverage ratio (allowance for loan and lease losses to delinquent loans) was 92.61 percent at the end of the second quarter.
Aspire Federal Credit Union (Clark, NJ)
Aspire Federal Credit Union had a credit union service organization that specialized in financing taxi medallions.
As of June 2018, the $154.4 million credit union had $9.95 million in commercial loans not secured by real estate. Presumably most, if not all, of these loans were to finance taxi medallions.
Th credit union reported a mid-year loss of $1.22 million. In comparison, the credit union reported a loss of $1.09 million for the first 3 months of 2018.
As a result of the second quarter loss, the credit union's net worth fell by 1.3 percent to $10.26 million as of June 2018. The credit union was adequately capitalized with a net worth ratio of 6.64 percent.
The credit union reported a 17.9 percent decline in delinquent loans during the second quarter to $5.5 million. As of June 2018, the delinquency rate was 4.76 percent -- down 88 basis points from the prior quarter and 139 basis points from a year ago.
Aspire stated that $2.65 million of delinquent loans were commercial loans to members not secured by real estate. This is down 12.8 percent from the first quarter of 2018 and 44.3 percent from a year ago.
The delinquency rate on non-real estate commercial loans was 26.62 percent.
The credit unions reported net charge-offs of $2.75 million -- up from $1.9 million at the end of the first quarter of 2018. As of June $1.7 million in commercial loans were charged off with no recoveries.
Troubled Debt Restructured (TDR) commercial loans not secured by real estate were almost $3.5 million. This was 7.5 percent from the first quarter of 2018. Delinquent TDR commercial loans were $1.265 million at the end of the second quarter 2018. In other words, 36.5 percent of these loans were past due.
Provisions for loan and lease losses rose by $292,444 during the second quarter to $1.667 million.
However, since net charge-offs rose by more than provisions for loan and lease losses, allowance for loan and lease losses fell by 7.5 percent to $7.36 million. The credit union is over-reserved with a coverage ratio of 133.51 percent as of mid-year 2018.
United Teletech Financial Federal Credit Union (Tinton Falls, NJ)
United Teletech Financial Credit Union posted a mid-year loss of $1.4 million.
The loss was due to an increase in provisions for loan and lease losses. As of the end of the second quarter of 2018, the credit union reported provisions for loan and lease losses of $3.6 million.
Due to the loss, the credit union's net worth fell from $23.1 million at the end of 2017 to $21.7 million at the end of June 2018. The credit union's net worth ratio slipped over the same time frame from 7.23 percent to 7.01 percent. The credit union was barely well capitalized.
The credit union reported $23.7 million in commercial loans not secured by real estate. Presumably most, if not all, of these loans were taxi medallions participation loans to nonmembers.
As of June 2018, the credit union had almost $9.3 million in delinquent loans -- up from $5.3 million from the first quarter of 2018. The delinquency rate rose from 2.01 percent at the end of the first quarter to 3.57 percent as of June 2018.
Delinquent nonmember commercial loans were $4.8 million as of mid-year. The delinquency rate on nonmember commercial loans was 20.35 percent.
At mid-year, net charge-offs were $1.7 million, of which $721 thousand were nonmember commercial loans.
Troubled Debt Restructured (TDR) commercial loans were $12.1 million as of June 2018. The credit union reported that 12.29 percent of TDR commercial loans not secured by real estate were 60 days or more past due.
The increase in provisions for loan and lease losses increased the credit union's allowance for loan and lease losses balance to $12.2 million. Its coverage ratio was 131.89 percent.
First Financial Federal Credit Union (Freehold, NJ)
After posting a loss of $1.7 million for the first quarter of 2018, First Financial FCU reported a loss of $110,377 for the second quarter.
The credit union had $10.8 million in a commercial loans not secured by real estate. Most, if not all, these loans were taxi medallion participation loans to nonmembers.
The credit union reported a 26.2 percent increase in delinquent loans to almost $5.3 million during the second quarter of 2018. The delinquency rate rose 81 basis points during the quarter to 3.96 percent as of June 2018.
The $190 million credit union reported that $2 million in nonmember commercial loans not secured by real estate were 60 days or more past due. this was up from $1.6 million as of March 2018. The delinquency rate on these loans were 18.88 percent, up from 15.03 percent for the prior quarter.
Troubled Debt Restructured (TDR) commercial loans were almost $6 million as of June 2018. Delinquent TDR commercial loans were $1.6 million.
This translates into a delinquency rate on TDR commercial loans of 27.30 percent.
The credit union was undercapitalized as of June 2018 with a net worth ratio of 5.23 percent.
The credit union reported an allowance for loan and lease losses balance of almost $4.9 million. The credit union's coverage ratio (allowance for loan and lease losses to delinquent loans) was 92.61 percent at the end of the second quarter.
Thursday, August 16, 2018
Rough Ride for Taxi Medallion Lender Bay Ridge FCU
Bay Ridge Federal Credit Union (Brooklyn, NY) became undercapitalized during the second quarter of 2018 due to losses arising from taxi medallion loans.
The $183 million credit union reported a mid-year loss of almost $4.9 million. In comparison, the credit union recorded losses of $2.3 million for the prior quarter and $2.1 million from a year ago.
The mid-year loss arose from an increase in provision for loan and lease losses of almost $6.1 million, up from $3.1 million for the first quarter of 2018.
Due to the second quarter loss, the net worth for the credit union fell by 20.3 percent during the quarter to $9.8 million. As of June 2018, the credit union was undercapitalized with a net worth ratio of 5.36 percent.
At mid-year, the credit union had almost $68.4 million in commercial loans not secured by real estate. Presumably, many of these loans were to finance taxi medallions.
As of June 2018, the credit union reported $12.1 million in delinquent loans, of which $9 million were commercial loans not secured by real estate.
Bay Ridge's delinquency rate was 7.12 as of mid-year 2018. The delinquency rate on commercial loans not secured by real estate was 13.16 percent.
In addition, troubled debt restructured (TDR) commercial loans not secured by real estate was $19.8 million. Almost $4.8 million of these TDR loans were 60 days or more past due. This means that 24.12 percent of these loans are delinquent.
Net charge-offs were $2.8 million, of which $2.3 million were participation loans. Net charge-offs of TDR commercial loans were $1.383 million.
The credit union increased its allowance for loan and lease losses during the second quarter from $7.45 million to $9.66 million. The credit union's coverage ratio fell from 193.09 percent as of March 2018 to 79.77 percent as of June 2018.
The $183 million credit union reported a mid-year loss of almost $4.9 million. In comparison, the credit union recorded losses of $2.3 million for the prior quarter and $2.1 million from a year ago.
The mid-year loss arose from an increase in provision for loan and lease losses of almost $6.1 million, up from $3.1 million for the first quarter of 2018.
Due to the second quarter loss, the net worth for the credit union fell by 20.3 percent during the quarter to $9.8 million. As of June 2018, the credit union was undercapitalized with a net worth ratio of 5.36 percent.
At mid-year, the credit union had almost $68.4 million in commercial loans not secured by real estate. Presumably, many of these loans were to finance taxi medallions.
As of June 2018, the credit union reported $12.1 million in delinquent loans, of which $9 million were commercial loans not secured by real estate.
Bay Ridge's delinquency rate was 7.12 as of mid-year 2018. The delinquency rate on commercial loans not secured by real estate was 13.16 percent.
In addition, troubled debt restructured (TDR) commercial loans not secured by real estate was $19.8 million. Almost $4.8 million of these TDR loans were 60 days or more past due. This means that 24.12 percent of these loans are delinquent.
Net charge-offs were $2.8 million, of which $2.3 million were participation loans. Net charge-offs of TDR commercial loans were $1.383 million.
The credit union increased its allowance for loan and lease losses during the second quarter from $7.45 million to $9.66 million. The credit union's coverage ratio fell from 193.09 percent as of March 2018 to 79.77 percent as of June 2018.
Wednesday, August 15, 2018
Net Charge-Offs Surge at Taxi Medallion Lender Progressive CU
After posting a profit for the first quarter of 2018, taxi medallion lender Progressive Credit Union (New York, NY) reported a mid-year loss of almost $18 million. For the second quarter, the credit union recorded a loss of $$22.28 million. The loss was due to an increase in provision for loan and lease losses from $3.16 million as of March 2018 to $20.28 million as of June 2018.
Due to the second quarter loss, the credit union's net worth tumbled by 21.1 percent during the quarter to $80.5 million. The credit union's net worth ratio fell to 19 percent as of June 2018 from 21.92 percent at the end of the first quarter 2018.
Assets at Progressive Credit Union fell by 9 percent during the second quarter of 2018 to $423.8 million. A year earlier assets were $511.5 million.
During the quarter delinquent loans edged higher by 1.4 percent during the quarter to $85.7 million. The credit union's delinquency rate rose from 19.55 percent on March 31, 2018 to 21.18 percent on June 30, 2018.
Troubled debt restructured (TDR) commercial loans were $133.2 million at the end of June 2018. The credit union reported that 30.1 percent of its TDR commercial loans were 60 days or more past due.
The credit union reported a surge in net charge-offs from $7.26 million as of March to $28.89 million as of June 2018. At the end of the second quarter, the net charge-off rate was 13.59 percent.
Progressive Credit Union reported a 6 percent decline in its allowance for loan and lease losses balances to $86.5 million, as net charge-offs grew faster than provision for loan and lease losses. The credit union's coverage ratio was 100.89 percent as of June 2018.
The credit union has a buffer to absorb expected and unexpected losses of almost $167 million.
Due to the second quarter loss, the credit union's net worth tumbled by 21.1 percent during the quarter to $80.5 million. The credit union's net worth ratio fell to 19 percent as of June 2018 from 21.92 percent at the end of the first quarter 2018.
Assets at Progressive Credit Union fell by 9 percent during the second quarter of 2018 to $423.8 million. A year earlier assets were $511.5 million.
During the quarter delinquent loans edged higher by 1.4 percent during the quarter to $85.7 million. The credit union's delinquency rate rose from 19.55 percent on March 31, 2018 to 21.18 percent on June 30, 2018.
Troubled debt restructured (TDR) commercial loans were $133.2 million at the end of June 2018. The credit union reported that 30.1 percent of its TDR commercial loans were 60 days or more past due.
The credit union reported a surge in net charge-offs from $7.26 million as of March to $28.89 million as of June 2018. At the end of the second quarter, the net charge-off rate was 13.59 percent.
Progressive Credit Union reported a 6 percent decline in its allowance for loan and lease losses balances to $86.5 million, as net charge-offs grew faster than provision for loan and lease losses. The credit union's coverage ratio was 100.89 percent as of June 2018.
The credit union has a buffer to absorb expected and unexpected losses of almost $167 million.
Tuesday, August 14, 2018
Taxi Medallion Loans Crash LOMTO FCU
The collapse of the taxi medallion has adversely impacted the performance of LOMTO Federal Credit Union (Woodside, NY). As of mid-year, the credit union was unprofitable and insolvent.
The $156 million credit union was placed into conservatorship on June 26, 2017.
Over the last year, the credit union has shrunk from $218.9 million in assets to $156 million.
LOMTO reported a loss of $11.3 million for the second quarter. As of mid-year 2018, the credit union had a loss of $16.5 million.
The second quarter loss was due to a 64.2 percent increase in provision for loan and lease losses during the quarter to $14.1 million.
Due to the second quarter loss, the credit union's net worth fell by 26.4 percent to almost negative $54 million as of June 2018. The credit union's net worth ratio was minus 34.57 percent.
LOMTO reported delinquent loans of $13.3 million as of June 2018 -- this is down from $18.2 million at the end of March 2018 and $38.4 million from a year ago. As of June, the credit union had a delinquency rate of 10.44 percent.
However, the credit union reported an almost 21 percent increase in early delinquent loans (30 to 59 days past due) during the second quarter to $20.4 million.
As of mid-year, net charge-offs were $11.45 million. The net charge-off rate was 16.34 percent.
Through the first two quarters of 2018, 47 members with $16.75 million in loans have filed for bankruptcy protection.
Troubled debt restructured (TDR) commercial loans grew by 34.8 percent in the second quarter to $19.9 million, of which $8.3 million are 60 days or more past due.
The credit union had a $2.7 million increase in allowance for loan and lease losses in the second quarter to $26.3 million. Its coverage ratio was 197.02 percent.
As of June 2018, LOMTO has drawn all of its line of credit of $100 million from one or more corporate credit unions, which has has been guaranteed by the National Credit Union Share Insurance Fund.
The $156 million credit union was placed into conservatorship on June 26, 2017.
Over the last year, the credit union has shrunk from $218.9 million in assets to $156 million.
LOMTO reported a loss of $11.3 million for the second quarter. As of mid-year 2018, the credit union had a loss of $16.5 million.
The second quarter loss was due to a 64.2 percent increase in provision for loan and lease losses during the quarter to $14.1 million.
Due to the second quarter loss, the credit union's net worth fell by 26.4 percent to almost negative $54 million as of June 2018. The credit union's net worth ratio was minus 34.57 percent.
LOMTO reported delinquent loans of $13.3 million as of June 2018 -- this is down from $18.2 million at the end of March 2018 and $38.4 million from a year ago. As of June, the credit union had a delinquency rate of 10.44 percent.
However, the credit union reported an almost 21 percent increase in early delinquent loans (30 to 59 days past due) during the second quarter to $20.4 million.
As of mid-year, net charge-offs were $11.45 million. The net charge-off rate was 16.34 percent.
Through the first two quarters of 2018, 47 members with $16.75 million in loans have filed for bankruptcy protection.
Troubled debt restructured (TDR) commercial loans grew by 34.8 percent in the second quarter to $19.9 million, of which $8.3 million are 60 days or more past due.
The credit union had a $2.7 million increase in allowance for loan and lease losses in the second quarter to $26.3 million. Its coverage ratio was 197.02 percent.
As of June 2018, LOMTO has drawn all of its line of credit of $100 million from one or more corporate credit unions, which has has been guaranteed by the National Credit Union Share Insurance Fund.
Monday, August 13, 2018
Bad Taxi Medallion Loans Wreck Melrose Credit Union
Defaulting taxi medallion loans have wrecked Melrose Credit Union (Briarwood, NY). The taxi industry has been disrupted by ride sharing companies, such as Uber and Lyft.
Melrose Credit Union was unprofitable and insolvent as of mid-year 2018. It has been under conservatorship, since February 10, 2017.
Over the last year, the credit union's assets have plummeted from $1.62 billion to $1.12 billion.
The credit union reported a mid-year loss of $171.8 million. Melrose recorded a loss of $60.6 million for the second quarter of 2018.
The second quarter loss was due to an increase in provision for loan and lease losses by $57.16 million to almost $159.3 million as of June 2018.
The second quarter loss caused the credit union's net worth to fall by 20.3 percent during the quarter to a negative $359.7 million at the end of 2018. Melrose's net worth ratio was a minus 32.04 percent.
In addition, the credit union reported $359.7 million in delinquent loans. As of June 2018, 28.88 percent of all loans were 60 days or more past due.
Troubled debt restructured (TDR) commercial loans not secured by real estate were $186.1 million as of June 2018 -- down from $227.2 for the prior quarter. Melrose reported that 55.64 percent of these TDR commercial loans were 60 days or more past due.
Net charge-offs experienced a significant increase during the second quarter of 2018. As of June 2018, net charge-offs were $141.5 million -- up from $35.5 million at the end of March 2018.
The credit union reported that 44 members had filed for bankruptcy year-to-date with loans of $47.7 million.
Net charge-offs increased more than provision for loan and lease losses during the second quarter. As a result, the allowance or loan and lease losses fell by 15.2 percent during the quarter to $259.8 million. The credit union's coverage ratio (allowance for loan and lease losses divided by delinquent loans) was 72.23 percent as of June 2018.
In addition, Melrose has drawn $231 million of its $300 million line of credit. The National Credit Union Administration has guaranteed the line of credit from one or more corporate credit unions.
When Melrose goes into receivership, this will most likely be the costliest natural person credit union failure to the National Credit Union Share Insurance Fund.
Melrose Credit Union was unprofitable and insolvent as of mid-year 2018. It has been under conservatorship, since February 10, 2017.
Over the last year, the credit union's assets have plummeted from $1.62 billion to $1.12 billion.
The credit union reported a mid-year loss of $171.8 million. Melrose recorded a loss of $60.6 million for the second quarter of 2018.
The second quarter loss was due to an increase in provision for loan and lease losses by $57.16 million to almost $159.3 million as of June 2018.
The second quarter loss caused the credit union's net worth to fall by 20.3 percent during the quarter to a negative $359.7 million at the end of 2018. Melrose's net worth ratio was a minus 32.04 percent.
In addition, the credit union reported $359.7 million in delinquent loans. As of June 2018, 28.88 percent of all loans were 60 days or more past due.
Troubled debt restructured (TDR) commercial loans not secured by real estate were $186.1 million as of June 2018 -- down from $227.2 for the prior quarter. Melrose reported that 55.64 percent of these TDR commercial loans were 60 days or more past due.
Net charge-offs experienced a significant increase during the second quarter of 2018. As of June 2018, net charge-offs were $141.5 million -- up from $35.5 million at the end of March 2018.
The credit union reported that 44 members had filed for bankruptcy year-to-date with loans of $47.7 million.
Net charge-offs increased more than provision for loan and lease losses during the second quarter. As a result, the allowance or loan and lease losses fell by 15.2 percent during the quarter to $259.8 million. The credit union's coverage ratio (allowance for loan and lease losses divided by delinquent loans) was 72.23 percent as of June 2018.
In addition, Melrose has drawn $231 million of its $300 million line of credit. The National Credit Union Administration has guaranteed the line of credit from one or more corporate credit unions.
When Melrose goes into receivership, this will most likely be the costliest natural person credit union failure to the National Credit Union Share Insurance Fund.
Friday, August 10, 2018
Do Credit Unions Serve the Underserved?
A study by two professors at Nova Southeastern University found that underserved households are less, not more, likely to enjoy the services of credit unions.
Credit unions are exempted from federal taxation, because they have a public policy purpose to serve underserved consumers.
The study used data from the Consumer Finance Monthly (CFM) survey. The time period of the study was 2007 thru 2013.
A question in the survey asked respondents if they have a checking or a savings account. If they answer no, then they are treated as unbanked.
The paper found that only 4.3 percent of the respondents have a credit union membership, but are also unbanked.
According to the paper, more educated and well-off households have a higher likelihood of belonging to a credit union. This finding is consistent with credit union industry research.
The authors state that it is possible small, low-income credit unions may serve the underserved; but on average, credit unions do not.
The paper states that its findings indicate that "there is room for the government to fine tune its credit union tax exemption in order to ensure that subsidies flow to the needy rather than to the generally well-off."
Read the study.
Credit unions are exempted from federal taxation, because they have a public policy purpose to serve underserved consumers.
The study used data from the Consumer Finance Monthly (CFM) survey. The time period of the study was 2007 thru 2013.
A question in the survey asked respondents if they have a checking or a savings account. If they answer no, then they are treated as unbanked.
The paper found that only 4.3 percent of the respondents have a credit union membership, but are also unbanked.
According to the paper, more educated and well-off households have a higher likelihood of belonging to a credit union. This finding is consistent with credit union industry research.
The authors state that it is possible small, low-income credit unions may serve the underserved; but on average, credit unions do not.
The paper states that its findings indicate that "there is room for the government to fine tune its credit union tax exemption in order to ensure that subsidies flow to the needy rather than to the generally well-off."
Read the study.
Thursday, August 9, 2018
Quorum FCU Posts Second Quarter Profit, Net Worth Ratio Increases by 61 Basis Points
Quorum Federal Credit Union (Purchase, NY), which participated in taxi medallion loans, posted a profit for the second quarter of 2018.
The credit union's net income was $2.24 million for the second quarter, after posting a loss of $2.74 million for the first quarter of 2018.
As a result of the second quarter profit, the $829 million credit union's net worth rose to $66.8 million as of June 2018 from almost $64.6 at the end of March 2018. The combination of improved earnings and the shedding of almost $38.4 million in assets caused the credit union's net worth ratio to increase by 61 basis points during the quarter to 8.05 percent.
The credit union has approximately $56.7 million in commercial loans not secured by real estate. Presumable most, if not all, of these loans were taxi medallion participation loans.
The credit union saw a 3.4 percent decline in delinquent loans during the second quarter to $41.3 million. But slightly more than 75 percent of all delinquent loans were participation loans.
The delinquency rate was basically unchanged at 5.88 percent.
Troubled debt restructured (TDR) commercial loans rose by 1 percent during the quarter to approximately $23.8 million. The credit union reported that nearly $8.1 million of TDR commercial loans were 60 days or more past due. The delinquency rate on TDR commercial loans was 33.99 percent.
Net charge-offs were almost $10 million at the end of the second quarter, up from $6.9 million from the prior quarter. Net charge-offs of participation loans were $6.8 million as of the end of the second quarter, of which $3 million were TDR commercial loans not secured by real estate.
The net charge-off rate was 2.78 percent as of June 2018.
Provisions for loan and lease losses increased at the credit union by $2.4 million to $8.7 million.
But the increase in provisions for loan and lease losses was outpaced by net charge-offs, this caused the allowance for loan and lease losses to decline by almost 2 percent to $32.9 million. The coverage ratio for the credit union rose to 79.63 percent in June 2018 from 78.44 percent in March 2018.
The credit union's net income was $2.24 million for the second quarter, after posting a loss of $2.74 million for the first quarter of 2018.
As a result of the second quarter profit, the $829 million credit union's net worth rose to $66.8 million as of June 2018 from almost $64.6 at the end of March 2018. The combination of improved earnings and the shedding of almost $38.4 million in assets caused the credit union's net worth ratio to increase by 61 basis points during the quarter to 8.05 percent.
The credit union has approximately $56.7 million in commercial loans not secured by real estate. Presumable most, if not all, of these loans were taxi medallion participation loans.
The credit union saw a 3.4 percent decline in delinquent loans during the second quarter to $41.3 million. But slightly more than 75 percent of all delinquent loans were participation loans.
The delinquency rate was basically unchanged at 5.88 percent.
Troubled debt restructured (TDR) commercial loans rose by 1 percent during the quarter to approximately $23.8 million. The credit union reported that nearly $8.1 million of TDR commercial loans were 60 days or more past due. The delinquency rate on TDR commercial loans was 33.99 percent.
Net charge-offs were almost $10 million at the end of the second quarter, up from $6.9 million from the prior quarter. Net charge-offs of participation loans were $6.8 million as of the end of the second quarter, of which $3 million were TDR commercial loans not secured by real estate.
The net charge-off rate was 2.78 percent as of June 2018.
Provisions for loan and lease losses increased at the credit union by $2.4 million to $8.7 million.
But the increase in provisions for loan and lease losses was outpaced by net charge-offs, this caused the allowance for loan and lease losses to decline by almost 2 percent to $32.9 million. The coverage ratio for the credit union rose to 79.63 percent in June 2018 from 78.44 percent in March 2018.
Wednesday, August 8, 2018
NCUA Files Charges Against Former CEO of Melrose CU
The National Credit Union Administration Board has filed administrative charges against Alan S. Kaufman, former chief executive officer, treasurer, and board member of Melrose Credit Union (Briarwood, NY).
Melrose Credit Union was the largest taxi medallion lending credit union.
The NCUA is seeking a prohibition order against Kaufman and is requesting he be ordered to pay restitution of at least $3.5 million. In addition, the NCUA Board assessed Kaufman with a civil money penalty of $1 million.
Kaufman is accused of breaching his fiduciary duties by putting his own interest above those of the credit unions.
For example,
Read the press release.
Read the notice of charges.
Melrose Credit Union was the largest taxi medallion lending credit union.
The NCUA is seeking a prohibition order against Kaufman and is requesting he be ordered to pay restitution of at least $3.5 million. In addition, the NCUA Board assessed Kaufman with a civil money penalty of $1 million.
Kaufman is accused of breaching his fiduciary duties by putting his own interest above those of the credit unions.
For example,
- Kaufman is alleged to have solicited and accepted free luxury trips from vendors for himself and his wife.
- Kaufman is further charged with soliciting and accepting for more than two years an exclusive rent-free residence from a vendor, member, and borrower of the credit union.
- Kaufman is further accused of approving loans with special terms that were not available to other members, including loans for $60,250,000 and $26,400,000 to a borrower, while he was living in a residence rent-free owned by the borrower.
- Kaufman is charges with misleading the credit union's board with respect to a $2 million naming rights agreement.
Read the press release.
Read the notice of charges.
Tuesday, August 7, 2018
Credit Unions Report An Increase in Consumer Credit in June 2018
Outstanding consumer credit at credit unions grew by $7.4 billion in June to $441.9 billion, according to the Federal Reserve's G.19 report.
Revolving credit at credit unions increased by almost $300 million to $58.6 billion.
Nonrevolving credit expended by $7.1 billion to $383.3 billion in June.
Read the G.19 report.
Revolving credit at credit unions increased by almost $300 million to $58.6 billion.
Nonrevolving credit expended by $7.1 billion to $383.3 billion in June.
Read the G.19 report.
Legislation Introduced to Limit Overdraft Fees
Senators Cory Booker (D-NJ) and Sherrod Brown (D-OH) have introduced The Stop Overdraft Profiteering Act of 2018.
The bill would amend the Truth in Lending Act to limit overdraft fees and to regulate the marketing and provision of overdraft coverage programs.
The legislation would:
The legislation has been endorsed by various liberal advocacy groups, including the Center for Responsible Lending, National Consumer Law Center, Americans for Financial Reform, and Consumer Federation of America.
Read the press release.
Read the bill.
The bill would amend the Truth in Lending Act to limit overdraft fees and to regulate the marketing and provision of overdraft coverage programs.
The legislation would:
- Prohibit overdraft fees on debit card transactions and ATM withdrawals.
- Prohibit financial institutions from charging more than one overdraft fee per month and no more than six overdraft fees in any single calendar year for check and recurring bill payment overdrafts.
- Limit check and recurring bill payment overdrafts fees to an amount that is reasonable and proportional to the financial institution’s costs in providing the overdraft coverage.
- Mandate a three-day waiting period between when an individual opens a new account and when a financial institution may offer overdraft protection.
- Mandate that depository institutions post transactions in a manner that minimizes overdraft and nonsufficient fund fees.
- Increase other consumer disclosures related to overdraft coverage programs.
The legislation has been endorsed by various liberal advocacy groups, including the Center for Responsible Lending, National Consumer Law Center, Americans for Financial Reform, and Consumer Federation of America.
Read the press release.
Read the bill.
Monday, August 6, 2018
Appeals Court Upholds Lower Court Decision to Block NCUA's Lawsuit
The U.S. Court of Appeals for the Second Circuit has upheld a district judge’s decision to bar the National Credit Union Administration from bringing legacy breach of fiduciary duty claims on residential mortgage-backed securities certificates the agency inherited from the failure of five corporate credit unions.
The court found that NCUA gave up its claim over the trust certificates after the agency entered into an indenture agreement with Bank of New York Mellon.
The panel affirmed an order from Southern District Judge Katherine Forrest that dismissed a lawsuit filed by the National Credit Union Administration for lack of standing. The panel also affirmed Forrest’s decision to deny the agency a chance to rework its second amended complaint.
Read the decision.
Read the story in New York Law Journal.
The court found that NCUA gave up its claim over the trust certificates after the agency entered into an indenture agreement with Bank of New York Mellon.
The panel affirmed an order from Southern District Judge Katherine Forrest that dismissed a lawsuit filed by the National Credit Union Administration for lack of standing. The panel also affirmed Forrest’s decision to deny the agency a chance to rework its second amended complaint.
Read the decision.
Read the story in New York Law Journal.
Sunday, August 5, 2018
Update on VyStar CU's Purchase of Downtown Office Tower
On June 7th, I reported on the purchase of a downtown Jacksonville office tower by VyStar Credit Union (Jacksonville, FL).
The Jacksonville Daily Record is reporting that VyStar paid $59 million for the 23-story office tower. The purchase also includes a 612-space parking garage.
The credit union will occupy 11 floors of the 358,278-square-foot tower.
Read the story.
The Jacksonville Daily Record is reporting that VyStar paid $59 million for the 23-story office tower. The purchase also includes a 612-space parking garage.
The credit union will occupy 11 floors of the 358,278-square-foot tower.
Read the story.
Friday, August 3, 2018
Georgia's Own Completes Acquisition of Georgia Bank
Georgia's Own Credit Union (Atlanta, GA) completed its acquisition of State Bank of Georgia (Fayetteville, GA) on August 1, 2018.
Georgia's Own CU had $2.3 billion in assets.
State Bank of Georgia had $90.7 million in assets.
Georgia's Own CU had $2.3 billion in assets.
State Bank of Georgia had $90.7 million in assets.
Problem Taxi Medallion Loans Cause Surge in TDRs at San Francisco FCU
Problem taxi medallion loans cause a surge in troubled debt restructured (TDR)commercial loans at San Francisco Federal Credit Union.
San Francisco FCU is suing the San Francisco Municipal Transportation Agency over the collapse of the taxi medallion market in San Francisco.
The credit union reported $45.2 million in commercial loans not secured by real estate at the end of the second quarter. Presumably most of these loans were to finance taxi medallions.
TDR commercial loans jumped from almost $2 million as of June 2017 to $13 million as of June 2018 (click on image to enlarge). Roughly 29 percent of all commercial loans were TDRs.
As of June 2018, only 2.35 percent of all TDR commercial loans were at least 60 days past due.
The credit union reported that delinquent commercial loans were $1.84 million -- this is down from $2.2 million at the end of the first quarter of 2018 and $4.64 million a year ago. the delinquency rate on commercial loans was 4.08 percent. Delinquent commercial loans were approximately 56 percent of all delinquent loans.
The credit union reported net charge-offs at mid-year of $2.175 million. About $1.68 million of net charge-offs were commercial loans.
Despite the rise in TDR commercial loans, San Francisco FCU was profitable and well capitalized. The credit union reported a net income of $2.23 million through the first two quarters of 2018. Its net worth ratio was 10.09 percent -- up 20 basis points from the prior quarter.
In addition, the credit union was over-reserved at the end of the second quarter of 2018 with $16.6 million in allowance for loan and lease losses. Its coverage ratio was 507.71 percent.
San Francisco FCU is suing the San Francisco Municipal Transportation Agency over the collapse of the taxi medallion market in San Francisco.
The credit union reported $45.2 million in commercial loans not secured by real estate at the end of the second quarter. Presumably most of these loans were to finance taxi medallions.
TDR commercial loans jumped from almost $2 million as of June 2017 to $13 million as of June 2018 (click on image to enlarge). Roughly 29 percent of all commercial loans were TDRs.
As of June 2018, only 2.35 percent of all TDR commercial loans were at least 60 days past due.
The credit union reported that delinquent commercial loans were $1.84 million -- this is down from $2.2 million at the end of the first quarter of 2018 and $4.64 million a year ago. the delinquency rate on commercial loans was 4.08 percent. Delinquent commercial loans were approximately 56 percent of all delinquent loans.
The credit union reported net charge-offs at mid-year of $2.175 million. About $1.68 million of net charge-offs were commercial loans.
Despite the rise in TDR commercial loans, San Francisco FCU was profitable and well capitalized. The credit union reported a net income of $2.23 million through the first two quarters of 2018. Its net worth ratio was 10.09 percent -- up 20 basis points from the prior quarter.
In addition, the credit union was over-reserved at the end of the second quarter of 2018 with $16.6 million in allowance for loan and lease losses. Its coverage ratio was 507.71 percent.
Thursday, August 2, 2018
Wings Financial CU Completes Acquisition of 3 Bank Branches
Wings Financial Credit Union (Apple Valley, MN) closed on its purchase of three branches from KleinBank (Chaska, MN).
As part of the transaction, customers at these three branches became members of the credit union.
According to Summary of Deposits data, the three branches had a combined $70.5 million in deposits.
Read the press release.
As part of the transaction, customers at these three branches became members of the credit union.
According to Summary of Deposits data, the three branches had a combined $70.5 million in deposits.
Read the press release.
Financial Trade Associations Push for Strong Data Security Standards
Five financial trade groups on July 31 urged the House Energy and Commerce Committee to advance legislation along with the Financial Services Committee that would set strong data security standards and data breach notification requirements.
In a letter to Rep. Bob Latta (R-Ohio), chairman of the House Energy and Commerce Subcommittee on Digital Commerce and Consumer Protection, the groups called for legislation that would include a flexible, scalable standard equivalent to the Gramm-Leach-Bliley Act requirements for depository institutions; a GLBA-equivalent notification regime; consistent enforcement of the standards by the Federal Trade Commission and state attorneys general; and clear preemption of the often-conflicting patchwork of state breach laws.
“Any legislation enacted into law must ensure that all entities that handle consumers’ sensitive financial data have in place a robust -- yet flexible and scalable -- process to protect data, which must be coupled with effective oversight and enforcement procedures to ensure accountability and compliance,” the groups said. “This standard should apply to all entities that handle sensitive personal and financial data in order to provide meaningful and consistent protection for consumers nationwide.”
The letter was signed by the American Bankers Association, the Consumer Bankers Association, the Credit Union National Association, the Independent Community Bankers of America, and the National Association of Federally-Insured Credit Unions.
Read the letter.
In a letter to Rep. Bob Latta (R-Ohio), chairman of the House Energy and Commerce Subcommittee on Digital Commerce and Consumer Protection, the groups called for legislation that would include a flexible, scalable standard equivalent to the Gramm-Leach-Bliley Act requirements for depository institutions; a GLBA-equivalent notification regime; consistent enforcement of the standards by the Federal Trade Commission and state attorneys general; and clear preemption of the often-conflicting patchwork of state breach laws.
“Any legislation enacted into law must ensure that all entities that handle consumers’ sensitive financial data have in place a robust -- yet flexible and scalable -- process to protect data, which must be coupled with effective oversight and enforcement procedures to ensure accountability and compliance,” the groups said. “This standard should apply to all entities that handle sensitive personal and financial data in order to provide meaningful and consistent protection for consumers nationwide.”
The letter was signed by the American Bankers Association, the Consumer Bankers Association, the Credit Union National Association, the Independent Community Bankers of America, and the National Association of Federally-Insured Credit Unions.
Read the letter.
Wednesday, August 1, 2018
PenFed "No Speed Limit"
The Wall Street Journal is reporting on the aggressive growth strategy of Pentagon Federal Credit Union (McLean, VA) to serve everyone.
James Schenck, chief executive of the credit union, mantra is "No Speed Limit." Pentagon Federal Credit Union (PenFed) has the goal of quadrupling it assets to $75 billion by 2025.
To help fuel its growth, "PenFed has acquired 13 smaller credit unions in a 20-month span between 2015 and 2017, before receiving a regulatory warning about new deals."
The article also points out that anyone can join PenFed by making a one time donation to two troop-supporting organizations. According to the credit union, less than one in five members joined this way.
This would suggests that approximately 300,000 members have been added via these two associations.
However, Robert Taylor, chief executive of Idaho State University Federal Credit Union (Pocatello, ID), worries that credit unions that engage in “expansionism for the sake of expansionism” risk the industry’s reputation.
It could also risk the industry's tax exemption.
Read the story (subscription may be required).
James Schenck, chief executive of the credit union, mantra is "No Speed Limit." Pentagon Federal Credit Union (PenFed) has the goal of quadrupling it assets to $75 billion by 2025.
To help fuel its growth, "PenFed has acquired 13 smaller credit unions in a 20-month span between 2015 and 2017, before receiving a regulatory warning about new deals."
The article also points out that anyone can join PenFed by making a one time donation to two troop-supporting organizations. According to the credit union, less than one in five members joined this way.
This would suggests that approximately 300,000 members have been added via these two associations.
However, Robert Taylor, chief executive of Idaho State University Federal Credit Union (Pocatello, ID), worries that credit unions that engage in “expansionism for the sake of expansionism” risk the industry’s reputation.
It could also risk the industry's tax exemption.
Read the story (subscription may be required).
myCUmortgage Consent Order
The Massachusetts Division of Banks alleged that myCUmortgage (Beavercreek, OH), a credit union service organization (CUSO), had engaged in unlicensed mortgage lending activity prior to obtaining the appropriate license from the state.
According to the July 18 consent order, myCUmortgage
Read the consent order.
According to the July 18 consent order, myCUmortgage
- will pay an administrative penalty of $60,000;
- shall establish, implement and maintain policies and procedures to ensure that the Company refrains from engaging in any business activity that requires approval or licensure from the Division unless and until it obtains the appropriate license or approval from the Commissioner of Banks;
- must establish, implement, and maintain policies and procedures to ensure that all applicable personnel receive adequate instruction and ongoing, periodic training to ensure proper implementation and execution of the revised policies and procedures implemented pursuant to this Consent Order; and
- will implement all corrective actions identified in the October 12, 2017 Report of Examination.
Read the consent order.
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