At Summit Credit Union (Madison, WI), not all member-owners are equal.
The $2.6 billion credit union announced that more than 46,000 members will share in a a declared $1.9 million dividend. However, this means that over 110,000 members of the credit union will not share in the dividend.
The credit union stated "[i]ndividual member cash payouts were based on the financial success of the credit union as well as how much the member saved and borrowed between October 1, 2015, and September 30, 2016."
In other words, this dividend is part of a loyalty or rewards program. Members who do the most business with the credit union will probably see the largest dividend payment.
If this was true dividend declaration, all member-owners would have received a dividend payment, as they each own a share in the credit union..
Thursday, December 29, 2016
Wednesday, December 28, 2016
Evangelical Christian CU Evicts Church over Almost $22 Million in Unpaid Debt
Evangelical Christian Credit Union (Brea, CA) evicted a Georgia megachurch from its 4,000 seat sanctuary before Christmas over nearly $22 million in debt.
The sanctuary of Higher Living Christian Church (McDonough, GA) will be sold in public auction to the highest bidder for cash on January 3, 2017.
The church building includes a multi-purpose sanctuary with removable seating. It could be modified to accommodate trade shows, graduation ceremonies, cultural events, art displays, or a fellowship hall. The facility also boasted eight classrooms, indoor children's play area, administrative offices, and choir rehearsal room.
Evangelical Christian Credit Union is currently under an enforcement order with the the California Department of Business Oversight.
Read the story.
The sanctuary of Higher Living Christian Church (McDonough, GA) will be sold in public auction to the highest bidder for cash on January 3, 2017.
The church building includes a multi-purpose sanctuary with removable seating. It could be modified to accommodate trade shows, graduation ceremonies, cultural events, art displays, or a fellowship hall. The facility also boasted eight classrooms, indoor children's play area, administrative offices, and choir rehearsal room.
Evangelical Christian Credit Union is currently under an enforcement order with the the California Department of Business Oversight.
Read the story.
Tuesday, December 27, 2016
Visions FCU to Double Size of Corporate HQ
Visions Federal Credit Union (Endwell, NY) will more than double the size of its corporate headquarters over the next two years.
The credit union is constructing a new 91,000-square-foot building behind its current 79,000-square-foot building.
The credit union expects to double in size from $3.5 billion in assets to $7 billion in assets by 2025.
The cost of the project is to be determined.
Read the story.
The credit union is constructing a new 91,000-square-foot building behind its current 79,000-square-foot building.
The credit union expects to double in size from $3.5 billion in assets to $7 billion in assets by 2025.
The cost of the project is to be determined.
Read the story.
Thursday, December 22, 2016
Metsger: Contingent Legal Fee Was the Best Available Option
In a December 20th letter to Rep. Mick Mulvaney (R - SC), National Credit Union Administration (NCUA) Chairman Metsger wrote that "the decision to pursue legal action using a contingency fee arrangement was the best available option" for the agency over the failure of five corporate credit unions that had bought faulty mortgage-backed securities.
The letter was in response to a November 21 letter from Rep. Mulvaney.
NCUA has paid more than $1 billion in legal fees on $4.3 billion in recoveries from legal settlements.
In pursuing its contingent fee arrangement, Chairman Metsger stated that NCUA did not have the in-house resources or expertise to independently pursue its legal strategy.
He also noted that the agency lacked resources to hire law firms on a hourly basis. Therefore, an hourly fee arrangement would have required increased assessments on credit unions, which credit unions would have had difficulty paying.
Metsger contended that a contingency fee arrangement insulated credit unions from most expenses, if the lawsuits failed, and provided significant upside benefit to credit unions, if the agency's legal strategy was successful.
Metsger claimed that the agency could not have brought these complex lawsuits without the contingency fee arrangement.
Metsger pointed out that the recoveries from NCUA's lawsuits "enabled the agency to stop assessing credit unions the cost of the repayment of the Stabilization Fund since 2012."
Metsger also stated that the agency created a website for credit unions to get information regarding the legal settlements.
The letter also addressed the agency's efforts to control expenses and to increase budget transparency.
The letter appears below (click on image to enlarge)
The letter was in response to a November 21 letter from Rep. Mulvaney.
NCUA has paid more than $1 billion in legal fees on $4.3 billion in recoveries from legal settlements.
In pursuing its contingent fee arrangement, Chairman Metsger stated that NCUA did not have the in-house resources or expertise to independently pursue its legal strategy.
He also noted that the agency lacked resources to hire law firms on a hourly basis. Therefore, an hourly fee arrangement would have required increased assessments on credit unions, which credit unions would have had difficulty paying.
Metsger contended that a contingency fee arrangement insulated credit unions from most expenses, if the lawsuits failed, and provided significant upside benefit to credit unions, if the agency's legal strategy was successful.
Metsger claimed that the agency could not have brought these complex lawsuits without the contingency fee arrangement.
Metsger pointed out that the recoveries from NCUA's lawsuits "enabled the agency to stop assessing credit unions the cost of the repayment of the Stabilization Fund since 2012."
Metsger also stated that the agency created a website for credit unions to get information regarding the legal settlements.
The letter also addressed the agency's efforts to control expenses and to increase budget transparency.
The letter appears below (click on image to enlarge)
NCUA Fines 24 CUs for Late Filing 2nd Quarter 2016 Call Reports
The National Credit Union Administration (NCUA) announced that 24 credit unions have agreed to pay civil monetary penalties for late filing their 2nd quarter 2016 Call Reports.
In comparison, 14 credit unions consented to civil monetary penalties a year ago.
The total amount of fines paid were $9,364. Individual penalties ranged from $150 to $1,057. The median penalty was $303.
Of the 24 credit unions agreeing to pay penalties for the second quarter of 2016:
NCUA informed late filing credit unions that their fines could be reduced if they signed a consent agreement.
Read the press release.
In comparison, 14 credit unions consented to civil monetary penalties a year ago.
The total amount of fines paid were $9,364. Individual penalties ranged from $150 to $1,057. The median penalty was $303.
Of the 24 credit unions agreeing to pay penalties for the second quarter of 2016:
- Sixteen had assets of less than $10 million;
- Five had assets between $10 million and $50 million; and
- Three had assets between $50 million and $250 million.
NCUA informed late filing credit unions that their fines could be reduced if they signed a consent agreement.
Read the press release.
Wednesday, December 21, 2016
Corporate CUs Are Required to Disclose Executive Pay, Then Why Not All FCUs
It is time for the National Credit Union Administration (NCUA) to require natural person federal credit unions to disclose senior management compensation.
Let's look at the facts, state-chartered credit unions are required to disclose senior management compensation via Form 990s. Also, NCUA requires a corporate credit union to annually prepare and maintain a disclosure of the dollar amount of compensation paid to its most highly compensated employees, including compensation paid to the corporate credit union's chief executive officer (read the regulation).
NCUA's corporate credit union regulation states that a corporate credit union "must distribute the most current disclosure to all its members at least once a year, either in the annual report or in some other manner of the corporate's choosing."
The regulation also states that "[a]ny member may obtain a copy of the most current disclosure, and all disclosures for the previous three years, on request made in person or in writing. The corporate credit union must provide the disclosure(s), at no cost to the member, within five business days of receiving the request."
The rule allows a corporate credit union to provide supplemental information to add context, such as salary surveys.
If NCUA believes that it is appropriate for corporate credit unions to disclose compensation information to its members, then why hasn't NCUA required natural person federal credit unions to do the same thing.
Clearly, requiring such a disclosure would improve accountability and transparency and would promote good corporate governance.
Let's look at the facts, state-chartered credit unions are required to disclose senior management compensation via Form 990s. Also, NCUA requires a corporate credit union to annually prepare and maintain a disclosure of the dollar amount of compensation paid to its most highly compensated employees, including compensation paid to the corporate credit union's chief executive officer (read the regulation).
NCUA's corporate credit union regulation states that a corporate credit union "must distribute the most current disclosure to all its members at least once a year, either in the annual report or in some other manner of the corporate's choosing."
The regulation also states that "[a]ny member may obtain a copy of the most current disclosure, and all disclosures for the previous three years, on request made in person or in writing. The corporate credit union must provide the disclosure(s), at no cost to the member, within five business days of receiving the request."
The rule allows a corporate credit union to provide supplemental information to add context, such as salary surveys.
If NCUA believes that it is appropriate for corporate credit unions to disclose compensation information to its members, then why hasn't NCUA required natural person federal credit unions to do the same thing.
Clearly, requiring such a disclosure would improve accountability and transparency and would promote good corporate governance.
Monday, December 19, 2016
Supreme Court to Hear Important Patent Troll Case
The Supreme Court last week announced that it would hear the case of TC Heartland v. Kraft, which will be closely watched by banks and credit unions due to its implications for financial institutions facing litigation from patent trolls.
The case hinges on whether patent trolls -- entities that hold patents, often of dubious quality, but use them primarily as the basis for threats of litigation -- can bring cases in any federal court district or must bring them only where defendants are incorporated or doing business.
Last year, 40 percent of patent suits were filed in just one of 94 federal judicial districts: the Eastern District of Texas, known for its friendliness to patent trolls.
The appellate court’s decision in TC Heartland upholds a broad understanding of corporate residence -- rejected by the Supreme Court in a different case -- that would allow patent trolls to continue cherry-picking friendly courts for patent cases against faraway defendants, which increases the pressure on defendants to settle cases.
Read more.
The case hinges on whether patent trolls -- entities that hold patents, often of dubious quality, but use them primarily as the basis for threats of litigation -- can bring cases in any federal court district or must bring them only where defendants are incorporated or doing business.
Last year, 40 percent of patent suits were filed in just one of 94 federal judicial districts: the Eastern District of Texas, known for its friendliness to patent trolls.
The appellate court’s decision in TC Heartland upholds a broad understanding of corporate residence -- rejected by the Supreme Court in a different case -- that would allow patent trolls to continue cherry-picking friendly courts for patent cases against faraway defendants, which increases the pressure on defendants to settle cases.
Read more.
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