For the second time in less than a year, the board of Montana First Credit Union is asking its members to approve a proposed merger with Horizon Credit Union, a larger Spokane, Washington-based institution.
The first merger attempt was voted down in January by the members of Montana First Credit Union. But the boards of both credit unions reapproved the merger plan this spring.
The results of the vote will be disclosed at a special meeting on June 26.
I guess the boards of the two credit unions are following that old adage -- if at first you don't succeed, try, try again.
Read the article.
Monday, June 11, 2012
Thursday, June 7, 2012
NCUA's Charitable Contribution Rule to Be Abolished
The NCUA Board voted to abolish its charitable contribution rule.
The rule limited charitable contributions or donations by a federal credit union (FCU) to nonprofit organizations located or conducting activities in a community in which the FCU has a place of business, or to organizations that are tax exempt under §501(c)(3) of the Internal Revenue Code and that operate primarily to promote and develop credit unions. The rule further required an FCU’s board of directors to approve charitable contributions based on a determination that the contributions are in the FCU’s best interests and are reasonable given the FCU’s size and financial condition. Under the rule, directors could establish a budget for charitable donations and authorize FCU officials to select recipients and disburse funds.
Now, any FCU can make donations without the prior approval of its board of directors and without regulatory restrictions as to recipients. This represents a 180 degree change in position for the Board. NCUA previously commented it was “not convinced that this exemption should apply to all credit unions. The donation of a credit union’s members’ money to an outside party is a highly sensitive issue.”
This decision by the NCUA Board grants credit union management a huge amount of discretion as to recipients and the size of contributions or donations.
However, in some instances, the interests of management with regard to donations will not align with the interests of their owners/members.
While credit union boards should not micro-manage charitable donations, the boards need to adopt policies on charitable contribution including the amount that can be donated and criteria for recipients.
This will ensure that credit union management is accountable to its members rather than seeking to maximize their own satisfaction.
The rule limited charitable contributions or donations by a federal credit union (FCU) to nonprofit organizations located or conducting activities in a community in which the FCU has a place of business, or to organizations that are tax exempt under §501(c)(3) of the Internal Revenue Code and that operate primarily to promote and develop credit unions. The rule further required an FCU’s board of directors to approve charitable contributions based on a determination that the contributions are in the FCU’s best interests and are reasonable given the FCU’s size and financial condition. Under the rule, directors could establish a budget for charitable donations and authorize FCU officials to select recipients and disburse funds.
Now, any FCU can make donations without the prior approval of its board of directors and without regulatory restrictions as to recipients. This represents a 180 degree change in position for the Board. NCUA previously commented it was “not convinced that this exemption should apply to all credit unions. The donation of a credit union’s members’ money to an outside party is a highly sensitive issue.”
This decision by the NCUA Board grants credit union management a huge amount of discretion as to recipients and the size of contributions or donations.
However, in some instances, the interests of management with regard to donations will not align with the interests of their owners/members.
While credit union boards should not micro-manage charitable donations, the boards need to adopt policies on charitable contribution including the amount that can be donated and criteria for recipients.
This will ensure that credit union management is accountable to its members rather than seeking to maximize their own satisfaction.
Tuesday, June 5, 2012
Kansas CU Regulator Reminds CUs to Adhere to Business Loan Rules
The Kansas Credit Union regulator is reminding Kansas chartered credit unions to follow the rules when it comes to member business loans.
According to an article appearing in the Wichita Eagle, examiners from the Kansas Department of Credit Unions found that several credit unions were not following the NCUA's member business loan regulation.
The bulletin issued by the department highlighted some of the business lending provisions that examiners noted were being violated.
Read the article.
Read the bulletin.
According to an article appearing in the Wichita Eagle, examiners from the Kansas Department of Credit Unions found that several credit unions were not following the NCUA's member business loan regulation.
The bulletin issued by the department highlighted some of the business lending provisions that examiners noted were being violated.
Read the article.
Read the bulletin.
Monday, June 4, 2012
NCUA: Profits, Assets, and Deposits Up
The National Credit Union Administration reported that credit union assets surpassed $1 trillion for the first time in the industry’s history.
Assets grew by 4.2 percent during the quarter to $1,001.8 billion. Deposits (shares) jumped by $38.6 billion to $866.0 billion and credit unions added 667,000 members. However, loans at federally-insured credit unions were largely unchanged – inching up by $532.5 million to $572.0 billion. First mortgages, used vehicles loans, and non-federally insured student loans increased during the quarter, whil other lending products such as credit cards, unsecured loans, and other real estate loans fell. As a result, the loan to deposit ratio at credit unions fell during the quarter from 69.07 percent to 66.05 percent.
Credit unions posted a profit of $2.1 billion during the first three months of 2012 on lower interest expenses and reserving for loan losses and an increase in other operating income. The industry’s return on assets was 0.84 percent – 17 basis points higher than year-end 2011 levels.
Credit union net worth increased by $2.1 billion to $100.3 billion. However, the net worth ratio for credit unions fell by 20 basis points to 10.1 percent, as assets grew faster than net worth. This was the first deline in the net worth ratio in a year.
Credit union reported an improvement in asset quality as both delinquencies and charge-offs declined during the first quarter. Delinquent loans fell by from $9.1 billion at the end of 2011 to almost $8.25 billion at the end of the first quarter. The industry’s delinquency ratio dropped 16 basis points to 1.44 percent.
Net charge-offs fell from $1.3 billion for the fourth quarter of 2011 to $1.1 billion for the first quarter of 2012. As a result, the net charge-off ratio fell 13 basis points to 0.78 percent.
Read the press release.
Assets grew by 4.2 percent during the quarter to $1,001.8 billion. Deposits (shares) jumped by $38.6 billion to $866.0 billion and credit unions added 667,000 members. However, loans at federally-insured credit unions were largely unchanged – inching up by $532.5 million to $572.0 billion. First mortgages, used vehicles loans, and non-federally insured student loans increased during the quarter, whil other lending products such as credit cards, unsecured loans, and other real estate loans fell. As a result, the loan to deposit ratio at credit unions fell during the quarter from 69.07 percent to 66.05 percent.
Credit unions posted a profit of $2.1 billion during the first three months of 2012 on lower interest expenses and reserving for loan losses and an increase in other operating income. The industry’s return on assets was 0.84 percent – 17 basis points higher than year-end 2011 levels.
Credit union net worth increased by $2.1 billion to $100.3 billion. However, the net worth ratio for credit unions fell by 20 basis points to 10.1 percent, as assets grew faster than net worth. This was the first deline in the net worth ratio in a year.
Credit union reported an improvement in asset quality as both delinquencies and charge-offs declined during the first quarter. Delinquent loans fell by from $9.1 billion at the end of 2011 to almost $8.25 billion at the end of the first quarter. The industry’s delinquency ratio dropped 16 basis points to 1.44 percent.
Net charge-offs fell from $1.3 billion for the fourth quarter of 2011 to $1.1 billion for the first quarter of 2012. As a result, the net charge-off ratio fell 13 basis points to 0.78 percent.
Read the press release.
Saturday, June 2, 2012
Privately Insured CU in Illinois Closed
USA One National Credit Union (USA One), located in Matteson, Illinois was closed by the Illinois Division of Financial Institutions on May 31, 2012 due to inadequate capital.
Credit Union 1, of Lombard, Illinois purchased all of USA One’s loans and other assets and assumed all of its share account liabilities.
USA One reported total assets of $38 million as of March 31, 2012 and served 8,000 members. At the end of 2011, the credit union reported a loss of almost $1.2 million and had delinquent loans of $3.5 million.
Read the press release.
Credit Union 1, of Lombard, Illinois purchased all of USA One’s loans and other assets and assumed all of its share account liabilities.
USA One reported total assets of $38 million as of March 31, 2012 and served 8,000 members. At the end of 2011, the credit union reported a loss of almost $1.2 million and had delinquent loans of $3.5 million.
Read the press release.
Friday, June 1, 2012
Telesis Community CU Liquidated
The California Department of Financial Institutions placed Telesis Community Credit Union of Chatsworth, Calif., into liquidation today and appointed the National Credit Union Administration (NCUA) as liquidating agent. Premier America Credit Union of Chatsworth, Calif., immediately purchased and assumed Telesis Community Credit Union’s members, deposits, core facilities, and consumer loans.
The California Department of Financial Institutions decided to liquidate Telesis Community Credit Union and discontinue its operations after determining the credit union was insolvent and had no prospect for restoring viable operations on its own. Telesis Community's financial difficulties arose from commercial real estate loans that had gone bad.
The California Department of Financial Institutions had placed Telesis Community Credit Union into conservatorship March 23, 2012.
At the time of liquidation and subsequent purchase and assumption by Premier America Credit Union, Telesis Community Credit Union served approximately 37,600 members and had $301.3 million in assets.
Telesis Community Credit Union is the fifth federally insured credit union liquidation in 2012.
Read the press release.
The California Department of Financial Institutions decided to liquidate Telesis Community Credit Union and discontinue its operations after determining the credit union was insolvent and had no prospect for restoring viable operations on its own. Telesis Community's financial difficulties arose from commercial real estate loans that had gone bad.
The California Department of Financial Institutions had placed Telesis Community Credit Union into conservatorship March 23, 2012.
At the time of liquidation and subsequent purchase and assumption by Premier America Credit Union, Telesis Community Credit Union served approximately 37,600 members and had $301.3 million in assets.
Telesis Community Credit Union is the fifth federally insured credit union liquidation in 2012.
Read the press release.
Shareholders Approve Sale of Bank to Credit Union
Shareholders of Monadnock Community Bank of Peterborough, New Hampshire approved the sale of the bank to GFA FCU in Gardner, Massachusetts.
Under the terms of the sale, GFA will pay $6.4 million to acquire the bank. This will be the second transaction where a credit union has acquired a bank; but the first deal involving a stockholder-owned bank.
The deal must still be approved by regulators.
Read more.
Under the terms of the sale, GFA will pay $6.4 million to acquire the bank. This will be the second transaction where a credit union has acquired a bank; but the first deal involving a stockholder-owned bank.
The deal must still be approved by regulators.
Read more.
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