The National Credit Union Administration announced that Montauk Credit Union of New York, New York, has been merged into Bethpage Federal Credit Union of Bethpage, New York.
On September 18, 2015, the New York State Department of Financial Services placed Montauk into conservatorship and appointed the National Credit Union Administration as conservator. The credit union was critically undercapitalized as of the end of 2015. Click here to read my analysis of Montauk's performance at the end of 2015.
Montauk had assets of $162 million and 2,830 members, according to its most recent Call Report.
Bethpage FCU had assets of $6.2 billion at the end of 2015.
It appears that Bethpage FCU has taken a bullet for the credit union industry in order to keep the National Credit Union Share Insurance Fund from recognizing losses associated with problem taxi medallion loans at Montauk.
In my opinion, doing this merger without NCUA assistance is insane and not in the best interest of Bethpage's members.
Read the press release.
Thursday, March 31, 2016
More Community Banks to Be Acquired by Large Credit Unions
The Milwaukee Journal Sentinel has a story about more community banks to be acquired by large credit unions.
The article notes that while these transactions are still rare, they will become more commonplace.
According to Michael Bell, a mergers-and-acquisitions specialist with the law firm of Howard & Howard, this trend is not going to slow down.
In 2014, Landmark Credit Union (New Berlin, WI) acquired Hartford Savings Bank and earlier this year Advia Credit Union (Parchment, MI) announced a deal to take over Janesville-based Mid America Bank.
Bell expects to announce another large credit union acquisition of a community bank in Wisconsin.
However, as I have previously pointed out, these deals should be a two-way street. Unfortunately, the National Credit Union Administration's rules make it almost impossible for banks to acquire credit unions.
In addition, these transactions, where you have a tax exempt credit union take over taxpaying bank, will raise policy concerns about the credit union industry's tax exemption.
Read the story.
The article notes that while these transactions are still rare, they will become more commonplace.
According to Michael Bell, a mergers-and-acquisitions specialist with the law firm of Howard & Howard, this trend is not going to slow down.
In 2014, Landmark Credit Union (New Berlin, WI) acquired Hartford Savings Bank and earlier this year Advia Credit Union (Parchment, MI) announced a deal to take over Janesville-based Mid America Bank.
Bell expects to announce another large credit union acquisition of a community bank in Wisconsin.
However, as I have previously pointed out, these deals should be a two-way street. Unfortunately, the National Credit Union Administration's rules make it almost impossible for banks to acquire credit unions.
In addition, these transactions, where you have a tax exempt credit union take over taxpaying bank, will raise policy concerns about the credit union industry's tax exemption.
Read the story.
Wednesday, March 30, 2016
CUs Sponsor LPGA Symtra Golf Event
A number of New York State credit unions are sponsoring the Danielle Downey Credit Union Classic in Rochester, New York on the LPGA Symetra Tour.
The golf tournament is scheduled for the week of July 11 thru 17.
Credit unions sponsoring the tournament include The Summit Federal Credit Union, St. Pius Federal Credit Union, Advantage Federal Credit Union, Pittsford Federal Credit Union, Reliant Community Credit Union, Family First Federal Credit Union, Visions Federal Credit Union, Xceed Financial Credit Union, Ukrainian Federal Credit Union, SEFCU, Bethpage Federal Credit Union, Empower Federal Credit Union, First Heritage Federal Credit Union, Alloya Corporate Federal Credit Union, and Rochester Area State Employees Federal Credit Union.
Sponsorships range in price from $1,000 to $20,000.
How is the sponsoring of a LPGA golf tournament consistent with the tax exempt purpose of a credit union?
Read the press release.
The golf tournament is scheduled for the week of July 11 thru 17.
Credit unions sponsoring the tournament include The Summit Federal Credit Union, St. Pius Federal Credit Union, Advantage Federal Credit Union, Pittsford Federal Credit Union, Reliant Community Credit Union, Family First Federal Credit Union, Visions Federal Credit Union, Xceed Financial Credit Union, Ukrainian Federal Credit Union, SEFCU, Bethpage Federal Credit Union, Empower Federal Credit Union, First Heritage Federal Credit Union, Alloya Corporate Federal Credit Union, and Rochester Area State Employees Federal Credit Union.
Sponsorships range in price from $1,000 to $20,000.
How is the sponsoring of a LPGA golf tournament consistent with the tax exempt purpose of a credit union?
Read the press release.
Tuesday, March 29, 2016
Veterans Health Administration CU Closed
The State of Michigan Department of Insurance and Financial Services today liquidated Veterans Health Administration Credit Union of Detroit and named the National Credit Union Administration as liquidating agent.
Public Service Credit Union of Romulus, Michigan, immediately assumed Veterans Health Administration Credit Union’s members, assets, and loans and shares.
The Department of Insurance and Financial Services made the decision to liquidate Veterans Health Administration Credit Union and discontinue its operations after determining the credit union was insolvent with no prospect for restoring viable operations on its own.
At the time of liquidation and subsequent purchase by Public Service Credit Union, Veterans Health Administration Credit Union served 1,297 members and had assets of $2 million, according to the credit union’s most recent Call Report. According to the credit union's Financial performance Report, it experienced a significant drop in asset size during the fourth quarter, as assets fell by 46 percent.
Veterans Health Administration Credit Union is the fourth federally insured credit union liquidation in 2016.
Read the press release.
Public Service Credit Union of Romulus, Michigan, immediately assumed Veterans Health Administration Credit Union’s members, assets, and loans and shares.
The Department of Insurance and Financial Services made the decision to liquidate Veterans Health Administration Credit Union and discontinue its operations after determining the credit union was insolvent with no prospect for restoring viable operations on its own.
At the time of liquidation and subsequent purchase by Public Service Credit Union, Veterans Health Administration Credit Union served 1,297 members and had assets of $2 million, according to the credit union’s most recent Call Report. According to the credit union's Financial performance Report, it experienced a significant drop in asset size during the fourth quarter, as assets fell by 46 percent.
Veterans Health Administration Credit Union is the fourth federally insured credit union liquidation in 2016.
Read the press release.
Alabama CU Regulator: Bank, Banker, and Banking Cannot Be Used in CU Ads
In a letter to CEOs of Alabama state chartered credit unions, the Alabama credit union regulator reminded the CEOs that Alabama state chartered credit unions cannot use the words Bank, Banker, and Banking in their advertising.
The March 17 letter was issued because the state regulator became aware of credit unions using these words in their advertisements.
The letter noted that "any violation of this prohibition shall subject the party to penalties of $500 per day up to a maximum of $50,000"
The state regulator wrote that the same restriction applies to any non-credit union entity using the term "Credit Union."
However, the regulator wrote that credit unions may use language to describe a specific product like e-banking or internet banking.
This prohibition does not apply to federal credit unions operating in Alabama.
Read the letter.
The March 17 letter was issued because the state regulator became aware of credit unions using these words in their advertisements.
The letter noted that "any violation of this prohibition shall subject the party to penalties of $500 per day up to a maximum of $50,000"
The state regulator wrote that the same restriction applies to any non-credit union entity using the term "Credit Union."
However, the regulator wrote that credit unions may use language to describe a specific product like e-banking or internet banking.
This prohibition does not apply to federal credit unions operating in Alabama.
Read the letter.
Monday, March 28, 2016
NCUA Agrees to $29 Million Offer of Judgment from Credit Suisse
The National Credit Union Administration (NCUA) announced acceptance of a $29 million offer of judgment from Credit Suisse to resolve claims arising from losses related to purchases of residential mortgage-backed securities by Members United and Southwest corporate credit unions.
The offer of judgment includes $29 million in damages plus prejudgment interest in an amount to be determined by the Court as well as reasonable attorneys’ fees to be determined by agreement between the parties or by the Court.
NCUA has now obtained more than $2.5 billion in legal recoveries in securities cases.
Read the press release.
The offer of judgment includes $29 million in damages plus prejudgment interest in an amount to be determined by the Court as well as reasonable attorneys’ fees to be determined by agreement between the parties or by the Court.
NCUA has now obtained more than $2.5 billion in legal recoveries in securities cases.
Read the press release.
Friday, March 25, 2016
Conserved Clarkston Brandon Community Credit Union Merged into Michigan State University FCU
Clarkston Brandon Community Credit Union, of Clarkston, Michigan, has been merged into Michigan State University Federal Credit Union, of East Lansing, effective March 25, the National Credit Union Administration (NCUA) announced.
At the time of the merger, Clarkston Brandon Community Credit Union was a federally insured, state-chartered credit union with 8,536 members and assets of $68.5 million, according to the credit union’s most recent Call Report.
The State of Michigan Department of Insurance and Financial Services placed Clarkston Brandon Community Credit Union into conservatorship on January 13, 2016 and appointed the National Credit Union Administration as conservator.
The former CFO of Clarkston Brandon Community Credit Union admitted earlier this year to embezzling $20 million from the credit union.
Read the press release.
At the time of the merger, Clarkston Brandon Community Credit Union was a federally insured, state-chartered credit union with 8,536 members and assets of $68.5 million, according to the credit union’s most recent Call Report.
The State of Michigan Department of Insurance and Financial Services placed Clarkston Brandon Community Credit Union into conservatorship on January 13, 2016 and appointed the National Credit Union Administration as conservator.
The former CFO of Clarkston Brandon Community Credit Union admitted earlier this year to embezzling $20 million from the credit union.
Read the press release.
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