The South Florida Business Journal is reporting that South Florida Federal Credit Union and its President and CEO Maggie Martinez were hit with a federal lawsuit from two former employees on September 5.
The complaint alleges that the President and CEO of the credit union retaliated against the two former employees for their cooperation with a regulatory investigation into the CEO’s conduct.
The lawsuit alleges sexual misconduct, nepotism, and racial discrimination.
Read the story.
Friday, September 27, 2013
Thursday, September 26, 2013
ABA's Ballentine Talks About Credit Unions
James Ballentine, EVP of Congressional Relations and Public Policy, spoke about removing the credit union tax exemption on Fox Business’ “Markets Now” program.
Watch the video.
Watch the video.
Wednesday, September 25, 2013
Improperly Using an Association to Recruit Members
In a letter on Monday to National Credit Union Administration Chair Debbie Matz, ABA wrote that Kinecta Federal Credit Union in Manhattan Beach, Calif., is “improperly using” a third-party association to recruit members who would not otherwise qualify.
Kinecta allows individuals who are otherwise ineligible to become members by simultaneously joining a consumer group,Consumers Cooperative Society of Santa Monica (CCSSM), and paying a $10 fee that Kinecta passes on to the association.
Kinecta’s online application (see attachment) states “if you are not in any of the categories above, you can join through the Consumers Cooperative Society of Santa Monica. Kinecta will process the enrollment into CCSSM for you. ($10 fee for CCSSM applies).”
“ABA questions whether this transaction meets the requirement of an associational common bond,” the letter said. “Membership . . . needs to be more than the checking of a box on a credit union’s membership application.”
ABA also urged NCUA to notify all federal credit unions about the associational common bond requirement. “Individuals must belong to the association prior to joining the credit union and it is impermissible to sign up an individual for membership in an association at the same time the individual is applying to join the credit union,” ABA said.
Read the letter.
Kinecta allows individuals who are otherwise ineligible to become members by simultaneously joining a consumer group,Consumers Cooperative Society of Santa Monica (CCSSM), and paying a $10 fee that Kinecta passes on to the association.
Kinecta’s online application (see attachment) states “if you are not in any of the categories above, you can join through the Consumers Cooperative Society of Santa Monica. Kinecta will process the enrollment into CCSSM for you. ($10 fee for CCSSM applies).”
“ABA questions whether this transaction meets the requirement of an associational common bond,” the letter said. “Membership . . . needs to be more than the checking of a box on a credit union’s membership application.”
ABA also urged NCUA to notify all federal credit unions about the associational common bond requirement. “Individuals must belong to the association prior to joining the credit union and it is impermissible to sign up an individual for membership in an association at the same time the individual is applying to join the credit union,” ABA said.
Read the letter.
Tuesday, September 24, 2013
Disclosing Stress Testing Results
In a speech at the National Association of State Credit Union Supervisors’ annual State System Summit, National Credit Union Administration Board Chairman Debbie Matz announced the agency is drafting a proposed rule to require annual stress tests at credit unions with assets exceeding $10 billion.
There are currently four credit unions with at least $10 billion in assets with a fifth credit union nearing the threshold.
However, according to the NCUA press release, the agency has not made a decision about requiring the results of the stress test to be made public.
Section 165(i)(2) of the Dodd-Frank Act requires publication of a "summary" of the results of the stress tests for covered institutions. However, credit unions are not covered by this section of the Dodd-Frank Act, so there is not a legislative mandate to publicly disclose the results.
While Matz acknowledges public disclosure would enhance transparency to members, she is worried that the results can be misinterpreted and lead to inaccurate conclusions about a credit union’s financial health.
But are Chairman Matz's concerns about disclosure overblown?
Federal Reserve Chairman Bernanke in an April 8, 2013 speech noted the benefits of disclosure by stating "the disclosure of stress test results and assessments provides valuable information to market participants and the public, enhances transparency, and promotes market discipline."
There are currently four credit unions with at least $10 billion in assets with a fifth credit union nearing the threshold.
However, according to the NCUA press release, the agency has not made a decision about requiring the results of the stress test to be made public.
Section 165(i)(2) of the Dodd-Frank Act requires publication of a "summary" of the results of the stress tests for covered institutions. However, credit unions are not covered by this section of the Dodd-Frank Act, so there is not a legislative mandate to publicly disclose the results.
While Matz acknowledges public disclosure would enhance transparency to members, she is worried that the results can be misinterpreted and lead to inaccurate conclusions about a credit union’s financial health.
But are Chairman Matz's concerns about disclosure overblown?
Federal Reserve Chairman Bernanke in an April 8, 2013 speech noted the benefits of disclosure by stating "the disclosure of stress test results and assessments provides valuable information to market participants and the public, enhances transparency, and promotes market discipline."
Thursday, September 19, 2013
Westby Co-op to Buy Loans and Deposits at Bank Branch
Citizens Community Bancorp, Inc. of Eau Claire, Wisconsin, parent company of Citizens Community Federal, and Westby Co-Op Credit Union of Westby, Wisconsin today announced they have entered into a deposit and loan assumption agreement whereby Westby will purchase certain assets from, and assume certain deposit liabilities of, the Bank's Wisconsin Dells branch.
Financial terms were not disclosed and the transaction will need regulatory approval.
Financial terms were not disclosed and the transaction will need regulatory approval.
Quorum FCU Dives Into Indirect Timeshare Lending
TimeshareLeaks has started to investigate the ongoing relationship between Quorum Federal Credit Union (Purchase, NY) and The Berkley Group, a leading timeshare developer.
Quorum FCU entered the timeshare lending business in late 2009, when it founded a credit union service organization (CUSO) called Vacation Ownership Funding Company (VOFCO). Quorum owns 79 percent of VOFCO.
In its 2009 Annual Report, Quorum wrote about how VOFCO will help to facilitate the relationship between Quorum and the vacation ownership companies and would fuel future growth of the credit union.
In its 2012 Annual Report, Quorum wrote that it "entered into agreements with several vacation ownership companies to provide indirect loans for the purchase of vacation ownership intervals."
TimeshareLeaks noted that between 2010 and 2011 vacation ownership loans grew by 302 percent and between 2011 and 2012 vacation ownership loans almost doubled, growing by 90 percent.
At the end of 2012, the credit union held $103.5 million in vacation ownership loans, which equated to 18 percent of its loan portfolio.
In fact, almost 94 percent of the growth in the credit union's outstanding loan balances between 2009 and 2012 has come from vacation ownership loans.
No wonder Quorum in a 2011 letter opposed a proposed rule by NCUA that would have subjected its CUSO to additional regulatory oversight.
Quorum FCU entered the timeshare lending business in late 2009, when it founded a credit union service organization (CUSO) called Vacation Ownership Funding Company (VOFCO). Quorum owns 79 percent of VOFCO.
In its 2009 Annual Report, Quorum wrote about how VOFCO will help to facilitate the relationship between Quorum and the vacation ownership companies and would fuel future growth of the credit union.
In its 2012 Annual Report, Quorum wrote that it "entered into agreements with several vacation ownership companies to provide indirect loans for the purchase of vacation ownership intervals."
TimeshareLeaks noted that between 2010 and 2011 vacation ownership loans grew by 302 percent and between 2011 and 2012 vacation ownership loans almost doubled, growing by 90 percent.
At the end of 2012, the credit union held $103.5 million in vacation ownership loans, which equated to 18 percent of its loan portfolio.
In fact, almost 94 percent of the growth in the credit union's outstanding loan balances between 2009 and 2012 has come from vacation ownership loans.
No wonder Quorum in a 2011 letter opposed a proposed rule by NCUA that would have subjected its CUSO to additional regulatory oversight.
Wednesday, September 18, 2013
Unrealized Gains or Losses in AFS Securities
The recent rise in medium-term and long-term interest rates has caused many credit unions to report unrealized losses on their available-for-sale (AFS) securities portfolios. While these unrealized losses on AFS securities do not affect current earnings, they do have implications for future earnings if the securities are sold.
According to NCUA, the accumulated unrealized gain or loss on AFS securities at federally insured credit unions went from an unrealized gain of $2 billion as of March 31, 2013 to a unrealized loss of $614 million at the end of the second quarter of 2013.
Alaska USA FCU reported the largest unrealized loss on AFS securities at almost $63 million. See the table below for the 25 federally insured credit unions with the largest unrealized losses on AFS securities. Click on image to enlarge.
For federally insured credit unions that reported holding AFS securities as of June 2013, the median ratio of unrealized gain or loss on AFS securities to total assets was minus .03 percent. However, 54 credit unions had unrealized losses on AFS securities that were at least 1 percent of the credit union's total assets.
The following table list the 25 credit unions with at least $50 million in assets that have the largest exposure to unrealized losses on AFS securities as a percent of assets.
According to NCUA, the accumulated unrealized gain or loss on AFS securities at federally insured credit unions went from an unrealized gain of $2 billion as of March 31, 2013 to a unrealized loss of $614 million at the end of the second quarter of 2013.
Alaska USA FCU reported the largest unrealized loss on AFS securities at almost $63 million. See the table below for the 25 federally insured credit unions with the largest unrealized losses on AFS securities. Click on image to enlarge.
For federally insured credit unions that reported holding AFS securities as of June 2013, the median ratio of unrealized gain or loss on AFS securities to total assets was minus .03 percent. However, 54 credit unions had unrealized losses on AFS securities that were at least 1 percent of the credit union's total assets.
The following table list the 25 credit unions with at least $50 million in assets that have the largest exposure to unrealized losses on AFS securities as a percent of assets.
Subscribe to:
Posts (Atom)
