The Federal Reserve reported that outstanding consumer credit at credit unions grew during March 2018, according to the G.19 report.
Total outstanding consumer credit at credit unions rose from $426.4 billion in February to $432.4 billion in March.
Revolving credit at credit unions fell by approximately $300 million during March to $56.9 billion. This was the third consecutive monthly decline in revolving credit.
Nonrevolving credit increased by $6.3 billion during March to $375.5 billion.
Monday, May 7, 2018
Average Chief Executive Compensation at Large State Chartered CUs Tops $1 Million in 2016
Chief executives of state chartered credit unions with at least $1 billion in assets earned on average $1.051 million in total compensation in 2016.
Median compensation in 2016 was $784,360.
This is the third consecutive year in which average chief executive pay topped $1 million.
There were 155 state chartered credit unions with $1 billion or more in assets at the end of 2016. Compensation information was obtained for all but one credit union, DFCU Financial CU (Dearborn, MI).
Compensation data are pulled from Schedule J of Form 990s filed by state chartered credit unions.
Federal credit unions are currently exempt from filing Form 990s and the National Credit Union Administration has not acted upon recommendations to require federal credit unions to disclose senior management compensation.
Total compensation includes base salary, bonus and incentives, other reportable income, retirement and deferred compensation, and nontaxable benefits.
Fifty-three credit union executives reported total compensation of at least $1 million.
Base compensation averaged $485,308. Median base compensation was $475,703. The following graph looks at base pay with respect to asset size.
One hundred thirty-nine executives received bonus and incentive compensation in 2016. For these 139 executives, the average bonus compensation was $185,907 with a median compensation of $133,360. The following graph examines the relationship between bonus and incentive pay and asset size.
Below is information on compensation for chief executives at state chartered credit unions with at least $1 billion in assets (click on image to enlarge).
Median compensation in 2016 was $784,360.
This is the third consecutive year in which average chief executive pay topped $1 million.
There were 155 state chartered credit unions with $1 billion or more in assets at the end of 2016. Compensation information was obtained for all but one credit union, DFCU Financial CU (Dearborn, MI).
Compensation data are pulled from Schedule J of Form 990s filed by state chartered credit unions.
Federal credit unions are currently exempt from filing Form 990s and the National Credit Union Administration has not acted upon recommendations to require federal credit unions to disclose senior management compensation.
Total compensation includes base salary, bonus and incentives, other reportable income, retirement and deferred compensation, and nontaxable benefits.
Fifty-three credit union executives reported total compensation of at least $1 million.
Base compensation averaged $485,308. Median base compensation was $475,703. The following graph looks at base pay with respect to asset size.
One hundred thirty-nine executives received bonus and incentive compensation in 2016. For these 139 executives, the average bonus compensation was $185,907 with a median compensation of $133,360. The following graph examines the relationship between bonus and incentive pay and asset size.
Below is information on compensation for chief executives at state chartered credit unions with at least $1 billion in assets (click on image to enlarge).
Update: an earlier version of this post stated that Lake Michigan Credit Union did not disclose the compensation information for Sandy Jelinski. The credit union in an e-mail reconsidered its position to not disclose this information. Here is the information provided. Base and bonus compensation was $1,638,000, other compensation was $42,735.20, and deferred compensation was $49,950.00.
Sunday, May 6, 2018
Trade Groups Petition FCC for Clarification of Autodialer
A coalition of industry trade groups, including bank and credit union trade associations, asked the Federal Communications Commission (FCC) for new rules that would ensure that customers can receive important communications from their financial institutions and other businesses.
In a joint petition to the FCC, the groups asked the FCC to issue a new interpretation of a key term in the Telephone Consumer Protection Act (TCPA) -- the definition of an “automatic telephone dialing system,” commonly known as an “autodialer.” The TCPA imposes restrictions on calls made by financial institutions and other businesses when using an autodialer.
The petition comes after a federal appellate court in March struck down the portion of a 2015 FCC order that had defined “autodialer” expansively to include, for example, ordinary smartphones -- and potentially covering nearly every type of dialing equipment that a business would use to call its customers.
“The TCPA landscape is dysfunctional and in need of clarity from the FCC,” the groups wrote to the FCC. “The statute, originally intended to target a specific abusive telemarketing practice, has been expanded by courts and the FCC, turning it into a breeding ground for frivolous lawsuits against legitimate businesses trying to communicate with their customers.”
If the FCC reinterprets the term autodialer in line with the TCPA’s text and congressional intent, it would significantly reduce the number of calls made by banks and credit unions that are subject to the TCPA’s restrictions, lowering compliance and litigation costs.
Read the letter.
In a joint petition to the FCC, the groups asked the FCC to issue a new interpretation of a key term in the Telephone Consumer Protection Act (TCPA) -- the definition of an “automatic telephone dialing system,” commonly known as an “autodialer.” The TCPA imposes restrictions on calls made by financial institutions and other businesses when using an autodialer.
The petition comes after a federal appellate court in March struck down the portion of a 2015 FCC order that had defined “autodialer” expansively to include, for example, ordinary smartphones -- and potentially covering nearly every type of dialing equipment that a business would use to call its customers.
“The TCPA landscape is dysfunctional and in need of clarity from the FCC,” the groups wrote to the FCC. “The statute, originally intended to target a specific abusive telemarketing practice, has been expanded by courts and the FCC, turning it into a breeding ground for frivolous lawsuits against legitimate businesses trying to communicate with their customers.”
If the FCC reinterprets the term autodialer in line with the TCPA’s text and congressional intent, it would significantly reduce the number of calls made by banks and credit unions that are subject to the TCPA’s restrictions, lowering compliance and litigation costs.
Read the letter.
Friday, May 4, 2018
Credit Union One to Acquire Hantz Bank
Credit Union One (Ferndale, MI) is acquiring Hantz Bank (Southfield, MI).
Hantz Bank has $220 million in assets and six branches. The bank has paid almost $3 million in applicable income taxes in 2016 and 2017, according to its most recent call reports.
Credit Union One has $1.2 billion in assets and 20 branches.
Terms of the deal were not disclosed. The acquisition is subject to regulatory approval and expected to close later this year.
Read the story.
Hantz Bank has $220 million in assets and six branches. The bank has paid almost $3 million in applicable income taxes in 2016 and 2017, according to its most recent call reports.
Credit Union One has $1.2 billion in assets and 20 branches.
Terms of the deal were not disclosed. The acquisition is subject to regulatory approval and expected to close later this year.
Read the story.
Appeals Court Rejects Lawsuit from Taxi Industry and CUs
In another legal setback for the New York City taxi medallion industry, the Second Circuit Court of Appeals rejected a lawsuit challenging how New York City regulates ride-sharing companies, affirming a lower court decision.
The taxi industry along with credit unions that financed taxi medallions sued the City of New York, the Taxi & Limousine Commission (TLC) and its Chair Meera Joshi for allegedly violating their rights to equal protection and due process and that they suffered a taking.
The court acknowledged that "that the plaintiffs may have suffered a decrease in the value of their medallions as a consequence of regulations imposed by the TLC. But this decrease is not something that violates the Due Process Clause.”
The court noted that "taxi medallions authorize the owners to own and operate taxis." It does not protect them from competition.
The court also ruled that the takings claim was not ripe, because the plaintiffs have failed to avail themselves of state procedures for seeking compensation.
Read the decision.
The taxi industry along with credit unions that financed taxi medallions sued the City of New York, the Taxi & Limousine Commission (TLC) and its Chair Meera Joshi for allegedly violating their rights to equal protection and due process and that they suffered a taking.
The court acknowledged that "that the plaintiffs may have suffered a decrease in the value of their medallions as a consequence of regulations imposed by the TLC. But this decrease is not something that violates the Due Process Clause.”
The court noted that "taxi medallions authorize the owners to own and operate taxis." It does not protect them from competition.
The court also ruled that the takings claim was not ripe, because the plaintiffs have failed to avail themselves of state procedures for seeking compensation.
Read the decision.
Thursday, May 3, 2018
Bill Would Create Postal Bank
U.S. Senator Kirsten Gillibrand (D - NY) introduced legislation (S. 2755) to create a Postal Bank, which would establish a retail bank in all of the U.S. Postal Service’s 30,000 locations.
Between 1910 and 1967, the U.S. Post Office offered banking services. However by the 1950s, the need for the Postal Savings System was being questioned and in 1965 the Postmaster General recommended abolishing the system.
According to Senator Gillibrand, permitting the post office to offer basic banking services would benefit low-income Americans by wiping out the predatory payday lending industry.
According to the press release, the Postal Bank would offer small-dollar checking accounts, small-dollar savings accounts, small-dollar loans, transaction services, and remittance services.
A 2015 survey of consumers by Raddon's National Consumer Research found that 9 percent of consumers would be extremely or very likely to use the post office to access their financial services. These consumers tended to have income below $50,000 and to be 44 years old or younger.
As I wrote in July 28, 2014 blog post, "[t]he danger to banks and credit unions is that this new postal savings bank could be perceived by many as a government-endorsed and preferred provider of financial products and the last thing we need is more government competition with the private sector."
Read the press release.
Between 1910 and 1967, the U.S. Post Office offered banking services. However by the 1950s, the need for the Postal Savings System was being questioned and in 1965 the Postmaster General recommended abolishing the system.
According to Senator Gillibrand, permitting the post office to offer basic banking services would benefit low-income Americans by wiping out the predatory payday lending industry.
According to the press release, the Postal Bank would offer small-dollar checking accounts, small-dollar savings accounts, small-dollar loans, transaction services, and remittance services.
A 2015 survey of consumers by Raddon's National Consumer Research found that 9 percent of consumers would be extremely or very likely to use the post office to access their financial services. These consumers tended to have income below $50,000 and to be 44 years old or younger.
As I wrote in July 28, 2014 blog post, "[t]he danger to banks and credit unions is that this new postal savings bank could be perceived by many as a government-endorsed and preferred provider of financial products and the last thing we need is more government competition with the private sector."
Read the press release.
Tuesday, May 1, 2018
Taxi Medallion TDRs Surge at San Francisco FCU
San Francisco Federal Credit Union reported a surge in troubled debt restructured (TDR) commercial loans during the first quarter of 2018.
TDR commercial loans not secured by real estate increased from $2.9 million at the end of 2017 to almost $9.3 million as of March 31, 2018.
As of March 31, 2018, the credit union reported $48.4 million in commercial loans not secured by real estate. Presumably most of these commercial loans were taxi medallion loans.
While TDR commercial loans increased during the first quarter, delinquent commercial loans fell during the quarter from $6.9 million at the end of 2017 to $2.2 million at the end of the first quarter of 2018. The delinquency rate for commercial loans not secured by real estate was 4.57 percent, as of March 31, 2018.
However, the pipeline of early delinquent commercial loans not secured by real estate (30 to 59 days past due) increased by almost 50 percent to $4 million. This means the delinquency rate for these commercial loans was 8.3 percent.
The credit union reported charging off $911,250 in commercial loans not secured by real estate with recoveries of $68,182 during the first quarter.
San Francisco FCU is suing the San Francisco Municipal Transportation Agency over the collapse of the taxi medallion market in San Francisco.
Despite the increase in commercial loan TDRs, the credit union was profitable and well-capitalized.
TDR commercial loans not secured by real estate increased from $2.9 million at the end of 2017 to almost $9.3 million as of March 31, 2018.
As of March 31, 2018, the credit union reported $48.4 million in commercial loans not secured by real estate. Presumably most of these commercial loans were taxi medallion loans.
While TDR commercial loans increased during the first quarter, delinquent commercial loans fell during the quarter from $6.9 million at the end of 2017 to $2.2 million at the end of the first quarter of 2018. The delinquency rate for commercial loans not secured by real estate was 4.57 percent, as of March 31, 2018.
However, the pipeline of early delinquent commercial loans not secured by real estate (30 to 59 days past due) increased by almost 50 percent to $4 million. This means the delinquency rate for these commercial loans was 8.3 percent.
The credit union reported charging off $911,250 in commercial loans not secured by real estate with recoveries of $68,182 during the first quarter.
San Francisco FCU is suing the San Francisco Municipal Transportation Agency over the collapse of the taxi medallion market in San Francisco.
Despite the increase in commercial loan TDRs, the credit union was profitable and well-capitalized.
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