The House of Representatives approved, by a 216-190 vote, an amendment offered by Rep. Scott Garrett (R-N.J.) that would prohibit the Justice Department from using funds for litigation in which it seeks to prove illegal discrimination based on the “disparate impact” theory.
Prior to the vote, bank and credit union trade groups wrote to House members urging their support for the amendment.
“Under the disparate impact theory, even when a lender takes every step to prevent discrimination and treats all consumers fairly and equally, a neutral policy can serve as a basis for very serious and harmful claims in the absence of intentional discrimination,” the trade groups wrote.
“Smaller lenders, in particular, will find it difficult to manage this type of litigation risk,” they said. “Left unchecked, disparate impact enforcement could increase the cost and undermine the availability of credit throughout the economy.”
Read the letter.
Friday, May 30, 2014
Thursday, May 29, 2014
NCUA Approves Five Star CU's Purchase of Bank
The National Credit Union Administration approved the purchase of Flint River National Bank in Camilla, Georgia by $260 million Five Star CU headquartered in Dothan, Alabama.
The deal is scheduled to close in early June.
This is the fifth transaction involving a credit union purchasing a bank in the last two years.
The deal is scheduled to close in early June.
This is the fifth transaction involving a credit union purchasing a bank in the last two years.
Wednesday, May 28, 2014
Navy FCU Sued for Not Paying Overtime
A complaint filed in a U.S. District Court in Nevada alleges that Navy Federal Credit Union (Navy FCU) willfully violated the Fair Labor Standards Act (FLSA) by requiring off-the-clock work by non-exempt employees.
The plaintiff is a Member Services Representative (MSR), who has worked for Navy FCU for almost six years.
The job description for MSRs states the position is non-exempt from overtime.
According to the complaint, Navy FCU maintained a uniform corporate policy to force MSRs to work off-the-clock before and after their shifts.
Plaintiff estimated off-the-clock work was 30 to 45 minutes per shift.
In addition, the complaint alleges that Navy FCU failed to record and maintain accurate timesheets regarding hours worked.
When plantiff complained to Navy FCU's management about not keeping accurate time records, plaintiff's ex-manager used the N-word.
Moreover, Navy FCU's management told plaintiff to stop placing comments on time sheet showing the actual, accurate times worked.
The complaint further alleges that working off-the-clock is still occuring and is part of a company wide practice to decrease non-exempt employees' compensation.
The complaint seeks class certification for all MSRs who performed any uncompensated off-the-clock work for Navy FCU. The size of the class is estimated at 500 employees or more.
The complaint requests a jury trial and is seeking all available damages including but not limited to wages, liquidated damages, attorneys' fees, punitive damages and costs.
The plaintiff is represented by Cogburn Law Offices.
The plaintiff is a Member Services Representative (MSR), who has worked for Navy FCU for almost six years.
The job description for MSRs states the position is non-exempt from overtime.
According to the complaint, Navy FCU maintained a uniform corporate policy to force MSRs to work off-the-clock before and after their shifts.
Plaintiff estimated off-the-clock work was 30 to 45 minutes per shift.
In addition, the complaint alleges that Navy FCU failed to record and maintain accurate timesheets regarding hours worked.
When plantiff complained to Navy FCU's management about not keeping accurate time records, plaintiff's ex-manager used the N-word.
Moreover, Navy FCU's management told plaintiff to stop placing comments on time sheet showing the actual, accurate times worked.
The complaint further alleges that working off-the-clock is still occuring and is part of a company wide practice to decrease non-exempt employees' compensation.
The complaint seeks class certification for all MSRs who performed any uncompensated off-the-clock work for Navy FCU. The size of the class is estimated at 500 employees or more.
The complaint requests a jury trial and is seeking all available damages including but not limited to wages, liquidated damages, attorneys' fees, punitive damages and costs.
The plaintiff is represented by Cogburn Law Offices.
List of Credit Unions that Missed Filing Deadline
As I reported last week, 104 credit unions missed their deadlines for filing their Call Reports.
Below is a link to an excel spreadsheet with the credit union name, asset size, and number of days late.
The largest credit union was Energy One FCU in Tulsa (OK) with $243 million in assets. The credit union with the most days late was Animas Credit Union in Farmington (NM).
To review the list, click here. You will get a pop up window asking you to log-in. Close that window and the excel spreadsheet should open.
Below is a link to an excel spreadsheet with the credit union name, asset size, and number of days late.
The largest credit union was Energy One FCU in Tulsa (OK) with $243 million in assets. The credit union with the most days late was Animas Credit Union in Farmington (NM).
To review the list, click here. You will get a pop up window asking you to log-in. Close that window and the excel spreadsheet should open.
Tuesday, May 27, 2014
Chairman Hensarling Challenges Regulators on Reputation Risk
House Financial Services Committee Chairman Jeb Hensarling (R-Tex.) has sent letters to four Federal banking agencies (Fed, OCC, FDIC, NCUA) challenging their use of 'reputation risk' as a factor in supervision of depository institutions.
Hensarling wrote that "it would be an abuse of regulatory discretion to use vague, subjective, and unquantifiable indicators like a firm's reputation to justify regulatory outcomes that could not otherwise be justified under an objective CAMELS analysis."
He goes on to write that the introduction of reputational risk "can all too easily become a pretext for the advancement of political objectives."
He poses three questions to the regulators and request that they respond by no later than June 12th.
Below is Chairman Hensarling's letter to NCUA.
Hensarling wrote that "it would be an abuse of regulatory discretion to use vague, subjective, and unquantifiable indicators like a firm's reputation to justify regulatory outcomes that could not otherwise be justified under an objective CAMELS analysis."
He goes on to write that the introduction of reputational risk "can all too easily become a pretext for the advancement of political objectives."
He poses three questions to the regulators and request that they respond by no later than June 12th.
Below is Chairman Hensarling's letter to NCUA.
Friday, May 23, 2014
Life Line CU Closed
The Virginia State Corporation Commission closed Life Line Credit Union, Inc., of Richmond, Va., and appointed the National Credit Union Administration Board as receiver to act as liquidating agent. Virginia Credit Union, Inc., headquartered in North Chesterfield, Va., assumed all member shares.
The Virginia State Corporation Commission made the decision to close Life Line and discontinue its operations after determining the credit union is insolvent and has no reasonable prospect for restoring viable operations. Life Line CU had a net worth ratio of 4.78 percent as of the first quarter of 2014.
At the time of liquidation and subsequent assumption by Virginia Credit Union, Life Line was a federally insured, state-chartered credit union that served 2,076 members and had assets of $7.9 million, according to its most recent Call Report.
Life Line Credit Union is the fifth federally insured credit union liquidation in 2014.
Read the press release.
Read the order closing the credit union.
The Virginia State Corporation Commission made the decision to close Life Line and discontinue its operations after determining the credit union is insolvent and has no reasonable prospect for restoring viable operations. Life Line CU had a net worth ratio of 4.78 percent as of the first quarter of 2014.
At the time of liquidation and subsequent assumption by Virginia Credit Union, Life Line was a federally insured, state-chartered credit union that served 2,076 members and had assets of $7.9 million, according to its most recent Call Report.
Life Line Credit Union is the fifth federally insured credit union liquidation in 2014.
Read the press release.
Read the order closing the credit union.
104 CUs Late Filing Call Reports, Face Fines
The National Credit Union Administration (NCUA) announced that 104 credit unions were late filing their first quarter 2014 Call Reports.
The agency in January warned credit unions that beginning with the first quarter 2014 Call Report that it would assess civil money penalties against credit unions for filing their Call Reports late.
NCUA is in the process of reviewing each late filing to determine the assessments and whether any mitigating factors exist to warrant forbearance.
NCUA will make public the names of late filers at a later date.
The following table summarizes the number of late filers by charter type, asset size, and days late.
Read the press release.
The agency in January warned credit unions that beginning with the first quarter 2014 Call Report that it would assess civil money penalties against credit unions for filing their Call Reports late.
NCUA is in the process of reviewing each late filing to determine the assessments and whether any mitigating factors exist to warrant forbearance.
NCUA will make public the names of late filers at a later date.
The following table summarizes the number of late filers by charter type, asset size, and days late.
Read the press release.
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