Good Customer Service at Large Florida CUs May Be an Urban Legend

A new report highlights the decline in customer service at Florida credit unions, as consumer complaints about Florida credit unions continue to rise.

The report looks at the number of consumer complaints filed with the Florida Department of Financial Institutions in 2015. Credit unions accounted for almost one-third of the 626 consumer complaints in 2015.

According to the "2015 FLORIDA BANK COMPLAINT ANALYSIS" by K.H Thomas Associates, LLC, the number of large Florida credit unions in the Top 10 Complaint list has risen over the last three years.

"Three of the 15 or one-fifth of the financial institutions on the Top Ten complaint list (counting ties) in 2013 were credit unions. In 2014, four of the 12 or one-third of the institutions in the Top Ten list (again counting ties) were credit unions. By 2015, five of the 12 or 42% of the institutions in the Top Ten list (again counting ties) were credit unions. Thus, the proportion of credit unions in the Top Ten complaint list increased from 20% to 33% to 42% in the last three years."

In 2015, Suncoast Credit Union tied for third with 32 complaints in 2015, Space Coast Credit Union had 29 complaints, VyStar had 19 complaints, Fairwinds Credit Union had 14 complaints, and MidFlorida Credit Union had 11.

The report also noted that a relatively high levels of complaints at Florida credit unions compared to their market share.

The Bank Complaint Index© or BCI is defined as a financial institution’s relative portion of complaints in a given year divided by its deposit market share as of the midpoint in the year. A BCI of 1.0 means that a bank’s complaints are equal to its market share. Ideally, a financial institution should strive for a BCI of 0.5 or lower. A BCI above 1.0 would suggest a problem.

According to the report, all five of the financial institutions with the highest BCIs in 2015, ranging from 3.8 to 8.8, were credit unions. Space Coast Credit Union had the highest BCI at 8.8, followed by Orlando-based Fairwinds Credit Union at 7.8.

The report stated: "Although credit unions are traditionally known for their good customer service, this complaint analysis ... suggests that this may be somewhat of an “Urban Legend” here in Florida based on these BCI results."

Below is a table listing banks and credit unions with the highest number of complaint in 2015 along with their corresponding BCI.

NCUA Should Publish Board Members Scheduled Speeches to CU Groups

On September 20, National Credit Union Administration (NCUA) Richard Metsger addressed attendees at the National Association of Federal Credit Unions (NAFCU) Congressional Caucus.

However, his remarks are not available on the NCUA website. This is a glaring lack of transparency on the part of this agency.

Individuals should not have to file a Freedom of Information Act to get access to his speech or speech notes.

Can you imagine the Chairman of the Federal Deposit Insurance Corporation giving a scheduled talk to a group the agency regulates and not releasing his/hers comments at the time the speech is giving?

It is inappropriate for the Chairman of the NCUA to give a speech to credit union groups and not make his/hers comments public.

As a society, we need more transparency from our public officials. It is how we hold our public officials accountable.

RBS Settles Lawsuit with NCUA

The National Credit Union Administration (NCUA) will receive $1.1 billion to settle legal claims against Royal Bank of Scotland (RBS) arising from the sale of faulty mortgage-backed securities to two corporate credit unions.

A settlement agreement was reached, and once payment is made, NCUA’s recoveries from various financial institutions will reach $4.3 billion.

The settlement covers claims associated with the failures of Western Corporate Federal Credit Union and U.S. Central Federal Credit Union.

Read the press release.

Wisconsin Governor Announces Major Expansion in UW CU's FOM

Governor Scott Walker joined officials from University of Wisconsin (UW) Credit Union and the Department of Financial Institutions (DFI) to announce a change in the credit union’s field of membership (FOM) eligibility requirements.

The UW Credit Union Board of Directors recently approved a change in membership eligibility. Now, in addition to UW System past or present students, any Wisconsin resident who is currently enrolled or has attended any accredited institution of higher education can do business with the UW Credit Union. The Office of Credit Unions at DFI certified this change on September 8, 2016.

According to the press release, this will provide additional opportunities for the managing educational expenses and refinancing of student loan debt across the state.

Read the press release.

ICBA Lawsuit Prompts Washington CU Regulator to Suspend MBL Rulemaking

Washington Division of Credit Unions has temporarily suspended its member business loan (MBL) rule-making process due to the Independent Community Bankers Association (ICBA) lawsuit challenging the National Credit Union Administration (NCUA) recently adopted final rule related to MBLs.

As a result of the ICBA lawsuit, some Washington state-chartered credit unions requested that the Director of Credit Unions to temporarily suspend the pending rule-making process to update the Washington State MBL Rule.

The Division of Credit Unions concurred with the requests. The state credit union regulator believes temporarily suspending the rule-making will give it time to analyze this lawsuit and its implications for Washington State.

Read the notice.

BECU's Directors Earn $40,000 to $50,000 in 2016, Up Significantly from 2014

Between 2014 and 2016, Boeing Employees Credit Union (BECU) significantly increased the pay of credit union officials.

In 2013, Washington-state authorized allowing state chartered credit unions to provide reasonable compensation to credit union officials.

Starting in 2014, BECU’s directors and audit committee members could earn annual stipends ranging from $14,000 to $25,000, depending on the position and committee service. The board’s chair received $25,000.

In 2016, annual stipends for directors and committee members will range from $40,000 to $50,0000.

The board's chair would see a doubling in compensation to $50,000 compared $25,000 in 2014.

BECU stated that the compensation of directors and audit committee members will "not exceed the median of compensation paid to directors of a peer group of organizations of similar size and complexity, including organizations such as credit unions, other types of financial institutions, financial services companies, and non-profit organizations."

To review the 2016 quarterly stipend schedule approved by the credit union's board, click here.

NYC Medallion Prices Averaged $561,000 for July and August

Taxi medallion prices in New York City averaged almost $561 thousand for the months of July and August. This is slightly higher than the $550 thousand recorded for the months of May and June.

For the months of July and August, there were 7 arm's length transactions, of which 5 were foreclosures.

Six transactions were between $550,000 and $620,000 with three transactions at $620,000. While it appears that taxi medallion values might be stabilizing, taxi medallion pries are significantly below their 2014 values of $1 million.

However, one transaction appears to be an outlier at $350,000. But if New York City taxi medallion prices follow the trends seen in other cities, this $350,000 transaction may become more prevalent in the future.

The evidence indicates that the value of the collateral backing taxi medallion loans have become significantly impaired and the credit unions holding these loans will eventually need to take impairment charges to reflect the decline in the value of the collateral.