NCUA staff has set the range of post-2013 TCCUSF assessments between minus $200 million and $1.6 billion.
In addition, NCUA announced that the range of NCUSIF assessments for 2014 will be between 0 and 5 basis points.
Thursday, November 21, 2013
No TCCUSF Assessments for 2014
NCUA is reporting that there will be no Temporary Corporate Credit Union Stabilization Fund (TCCUSF) assessments for 2014.
NCUA staff has set the range of post-2013 TCCUSF assessments between minus $200 million and $1.6 billion.
In addition, NCUA announced that the range of NCUSIF assessments for 2014 will be between 0 and 5 basis points.
NCUA staff has set the range of post-2013 TCCUSF assessments between minus $200 million and $1.6 billion.
In addition, NCUA announced that the range of NCUSIF assessments for 2014 will be between 0 and 5 basis points.
Wednesday, November 20, 2013
California Coast CU to Pay $3.25 Million for Naming Rights to SDSU's Open Air Theater
California Coast Credit Union has agreed to buy the naming rights to the 4,600-seat Open Air Theatre at San Diego State University pending the approval of the California State University’s Board of Trustees.
The $1.8 billion credit union will pay the university $3.25 million over 10 years under the agreement.
The on-campus amphitheater would be renamed the Cal Coast Credit Union Open Air Theatre starting January 1, 2014.
I have commented on several different occasions that I believe the buying of naming rights by credit unions to arenas and theaters represents a misuse of the credit union federal tax exemption.
Read the story.
The $1.8 billion credit union will pay the university $3.25 million over 10 years under the agreement.
The on-campus amphitheater would be renamed the Cal Coast Credit Union Open Air Theatre starting January 1, 2014.
I have commented on several different occasions that I believe the buying of naming rights by credit unions to arenas and theaters represents a misuse of the credit union federal tax exemption.
Read the story.
Tuesday, November 19, 2013
NCUA Receives over $1.4 Billion in JPMorgan Chase Settlement
The National Credit Union Administration today joined the U.S. Department of Justice and other governmental plaintiffs in a $13 billion settlement with JPMorgan Chase and affiliated companies over sales of faulty mortgage-backed securities.
As part of the settlement, NCUA will receive $1.417 billion. The settlement resolves four lawsuits filed by NCUA as liquidating agent against JPMorgan Chase, Bear Stearns and Washington Mutual for losses incurred by failed corporate credit unions as a result of the purchases of the faulty securities.
NCUA Board Chairman Debbie Matz said: “This resolution, combined with the $335 million already recovered, will enable NCUA to greatly reduce the assessments that all credit unions have to pay."
Read the press release.
As part of the settlement, NCUA will receive $1.417 billion. The settlement resolves four lawsuits filed by NCUA as liquidating agent against JPMorgan Chase, Bear Stearns and Washington Mutual for losses incurred by failed corporate credit unions as a result of the purchases of the faulty securities.
NCUA Board Chairman Debbie Matz said: “This resolution, combined with the $335 million already recovered, will enable NCUA to greatly reduce the assessments that all credit unions have to pay."
Read the press release.
Texas Trust CU Says Adios to International Remittance Business
Texas Trust Credit Union (Mansfield, Texas) is a casualty of the Consumer Financial Protection Bureau's new international remittance rule.
The credit union announced on its website that it can no longer offer international wire transfers, due to recent regulatory changes.
The credit union's September call report stated that the credit union had originated 146 international remittances through the first nine months of 2013.
See the announcement.
The credit union announced on its website that it can no longer offer international wire transfers, due to recent regulatory changes.
The credit union's September call report stated that the credit union had originated 146 international remittances through the first nine months of 2013.
See the announcement.
Monday, November 18, 2013
No Dog Sled Required
I came across an ad by Alaska USA (see below) that said Anyone in Washington can be a member of Alaska USA Federal Credit Union.
Apparently, Alaska USA picked up Washington state as part of its field of membership when it took over a financially troubled Washington chartered credit union in 2010.
Under NCUA's emergency merger powers, the field of membership of the merging credit union may be transferred intact to the continuing federal credit union without regard to any field of membership restrictions.
What is troubling is that the community charter comprises a whole state. NCUA field of membership regulations currently prohibit a federal credit union from having a community charter that encompasses a whole state.
I would feel better if NCUA had found a Washington state credit union that already served all of Washington state as a merger partner than merge the troubled credit union with a federal credit union.
Apparently, Alaska USA picked up Washington state as part of its field of membership when it took over a financially troubled Washington chartered credit union in 2010.
Under NCUA's emergency merger powers, the field of membership of the merging credit union may be transferred intact to the continuing federal credit union without regard to any field of membership restrictions.
What is troubling is that the community charter comprises a whole state. NCUA field of membership regulations currently prohibit a federal credit union from having a community charter that encompasses a whole state.
I would feel better if NCUA had found a Washington state credit union that already served all of Washington state as a merger partner than merge the troubled credit union with a federal credit union.
Friday, November 15, 2013
Fryzel: Goldilocks Risk-Based Capital Requirement
In a speech to the American Association of Credit Union Leagues, NCUA Board Member Michael Fryzel outlined his thoughts regarding risk-based capital requirements for credit unions.
While Fryzel noted that credit unions are not covered by Basel, the capital regime of credit unions is required to be “comparable” to that of the banking industry.
Fryzel's goldilocks moment came when he stated: "I advocate neither an overly stringent nor an overly permissive approach. I advocate “right sizing” NCUA’s risk-based capital rules."
He goes on to state that an undeniable lesson from the financial crisis is that capital needs to be ample, durable, and readily deployable to shore up a balance sheet under duress.
Moreover, the amount of capital (net worth) required by a credit union will ultimately depend on the activities pursued by a credit union.
Read the speech.
While Fryzel noted that credit unions are not covered by Basel, the capital regime of credit unions is required to be “comparable” to that of the banking industry.
Fryzel's goldilocks moment came when he stated: "I advocate neither an overly stringent nor an overly permissive approach. I advocate “right sizing” NCUA’s risk-based capital rules."
He goes on to state that an undeniable lesson from the financial crisis is that capital needs to be ample, durable, and readily deployable to shore up a balance sheet under duress.
Moreover, the amount of capital (net worth) required by a credit union will ultimately depend on the activities pursued by a credit union.
Read the speech.
G-Fees Should Not Be Use as a Piggy Bank
As the congressional budget conference looks for ways to cut spending and increase revenue, bank and credit union trade groups urged them not to consider Fannie Mae and Freddie Mac’s guarantee fees, or g-fees, as a potential revenue source. Congress used a 10 basis point increase in the 2011 g-fee to fund two months of payroll tax relief, for example, which the groups said is already affecting potential homebuyers and refinancers.
“G-fees are a critical risk management tool used by Fannie Mae and Freddie Mac to protect against losses from faulty loans,” the groups said. “Increasing g-fees for other purposes effectively taxes potential homebuyers and homeowners looking to refinance their mortgages.” They added that using g-fees as a revenue tool would constrain congressional options as the House and Senate take up housing finance reform in the coming months.
Read the letter.
“G-fees are a critical risk management tool used by Fannie Mae and Freddie Mac to protect against losses from faulty loans,” the groups said. “Increasing g-fees for other purposes effectively taxes potential homebuyers and homeowners looking to refinance their mortgages.” They added that using g-fees as a revenue tool would constrain congressional options as the House and Senate take up housing finance reform in the coming months.
Read the letter.
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