Volume 29, Number 9 May 30, 2009
Volume 29, Number 9 May 30, 2009
HEADLINE NEWS
NCUA Issues Guidance on PIC and MCA, Updates Corporate Status
The National Credit Union Administration on May 22 issued guidance on matters relating to paid-in capital (PIC) and membership capital (MCA).
According to the guidance found in Letter to Credit Unions 09-CU-10, corporate credit unions have no obligation to restore exhausted PIC or MCA, regardless of whether or not the PIC or MCA is classified as a liability or equity under generally accepted accounting principles, even if the retained earnings “substantially improve.” NCUA also advised that it is “impermissible” to pay dividends to the holders of outstanding PIC and MCA based on the balance of depleted PIC or MCA.
NCUA also said that credit union directors and management must judge for themselves whether their PIC and MCA are impaired and whether that possible impairment is “other-than-temporary.”
Full text of the guidance can be found at http://www.ncua.gov/letters/2009/CU/LTCUs%2009-CU-PIC%205-21%20(FINAL).pdf
Corporate Status Update. In its most recent update on the status of the corporates, NCUA said that reviews of all private label mortgage backed securities held by U.S. Central FCU and Western Corporate FCU (WesCorp) have been completed. The results of these reviews should be released to their members soon.
U.S. Central’s other-than-temporary impairment charges have been determined, and retail corporate credit unions will be required to write down 100% of their PIC investments and 23% of MCA investments as a result. Only one retail corporate CU should have negative retained earnings as a result of its investments at U.S. Central, NCUA added.
The board also predicted that recent actions aimed at enhancing the Temporary Corporate Credit Union Share Guarantee Program and the Temporary Corporate Credit Union Liquidity Guarantee Program should help corporates maintain their liquidity “going forward.”
Details of New Credit Card Act
On May 22, President Obama signed H.R. 627, the Credit Card Accountability, Responsibility and Disclosure Act of 2009. The provisions in the new law are generally effective in 9 months, but two of the provisions will be effective August 20. Starting this summer, credit unions will have to give the 45-day written notice before any increase in the APR or fees and will have to make sure that they mail credit card periodic statements at least 21 days before any due date in order to assess late payment penalties.
The Credit Union National Association (CUNA) has scheduled an audio-conference on June 18 to discuss the requirements of the law. Details and registration procedures will be available in the near future.
To review a summary of the law, go to:
http://www.cuna.org/compliance/member/eguide/eguide_regz_HR627summ2.html.
Matz Nominated as NCUA Chair
Debbie Matz is President Barack Obama's choice to become the new chair of the National Credit Union Administration (NCUA), the White House announced on May 21. Matz is a former member of the NCUA board, confirmed by the Senate on March 22, 2002, for a term ending August 2005, although she remained a few months longer to assure a smooth transition to a new member. Matz was executive vice president and chief operating officer of $800 million-in-assets Andrews FCU, in Suitland, Md., until June 2008. The President’s nominees must go through the confirmation process.
Matz will replace board member Rodney Hood, whose term expired in April. The two remaining board members are current Chairman Michael Fryzel, who took the position in August 2008 and whose term extends to 2013, and Gigi Hyland, confirmed at the same time as Hood, whose term ends in 2011.
MORE NCUA NOTES
NCUA Approves Credit Reporting Act ChangesImpact of Stabilization Law Being Weighed by NCUA
NCUA Chief Financial Officer Mary Ann Woodson will launch an analysis of the cost effect to the agency of newly enacted provisions to create a corporate credit union stabilization program. Just one day after President Barack Obama signed S. 896, The Helping Families Save Their Homes Act, into law, NCUA Vice Chairman Rodney Hood inquired during an open board meeting what the financial impact would be to the agency.
Woodson said she needed to complete her analysis of the final bill and would report back to the board, although she did not address the timing of that report. Under S. 896, NCUA borrowing authority is increased to $6 billion, with a possible further extension to $30 billion under exigent circumstances.
Credit unions may also spread the cost of National Credit Union Share Insurance Fund (NCUSIF) 1% deposit replenishment over seven years and have up to eight years to deal with the cost of a premium assessment that has resulted from losses at wholesale corporate credit unions. Any impairment related to the NCUSIF replenishment may be booked over a seven-year period.
The Credit Union National Association also is discussing the impact of the legislation on credit unions and the agency with NCUA and with accounting professionals. The full monthly NCUSIF report is available online. Access it at http://www.ncua.gov/GenInfo/BoardandAction/DraftBoardActions/2009/May21/09AprilBoard%20.pdf
NCUA Extends Corporate CU Liquidity Guarantee Program
NCUA’s Temporary Corporate Credit Union Liquidity Guarantee Program (TCCULGP) will now provide greater liquidity and “low-cost, stable” funding sources to eligible corporate credit unions over a longer period of time after the NCUA board voted to revise parts of the program during a closed meeting.
The TCCULGP provides a National Credit Union Share Insurance Fund (NCUSIF) guarantee of principal and interest for debt issued under the program.
The revised fee structure should “provide sufficient income to fund any losses related to the TCCULGP,” NCUA Chairman Michael Fryzel said in a statement accompanying the release. The revised terms would also restrict the amount of NCUSIF-covered debt that corporate credit unions could issue.
$250,000 Share Insurance Protection Extended to 2013
The Helping Families Save Their Homes Act of 2009, signed into law May 20, 2009, includes a provision extending $250,000 share insurance coverage provided by the National Credit Union Share Insurance Fund through December 31, 2013. Previously, this level of coverage was set to expire December 31, 2009. The new law also requires NCUA to use the higher $250,000 standard maximum share insurance amount when making decisions about premiums and administering insurance deposit adjustments.
NCUA will update its guidance about share insurance coverage to address the new law’s provisions. Information about NCUA insurance coverage is available in NCUA’s Share Insurance Tool Kit at http://www.ncua.gov/Resources/ShareInsuranceToolkit.aspx.
CU SYSTEM NEWS
2009 CU DAY THEME ANNOUNCED
Your Money, Your Choice, Your Credit Union has been selected as the theme for International Credit Union Day 2009. The theme is to remind people everywhere of the advantages that credit unions provide their members, according to the World Council of Credit Unions. The theme was suggested by Stan Cowan of the A+ Federal Credit Union in Austin, Texas. International Credit Union Day will be celebrated October 15; October is also National Cooperative Month. ICU Day graphics can be downloaded at the World Council’s website: http://www.woccu.org/events/icuday. Promotional materials, such as sample advertisements and speeches, will be available soon.
CU House Annual Report Online
The Credit Union House 2008 Annual Report is now available online at http://www.cuhouse.com/publications.html.
The report highlights several milestones in 2008, including visits from key members of Congress and their staff, the successful renovations of the Credit Union House Annex at 201 C Street, and a record level of contributor support.
The Credit Union House is located two blocks from the U.S. Capitol and serves as a venue for leagues and credit union visitors to hold advocacy events, education seminars, legislative briefings, and strategy sessions.
Top Lobbyists List: Mica Effective for Credit Unions
Dan Mica, president/CEO of the Credit Union National Association (CUNA), remains on the list of Washington's top lobbyists named annually by The Hill newspaper.
It’s the seventh year in a row that Mica has been named to the list. The Hill noted Mica’s long and successful history of advocating for the credit union movement: “Mica is a former member (of Congress) who has been pushing credit union interests effectively for more than a decade.” Under Mica's watch in 2008, credit unions witnessed such developments as:
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A delay in an ultimately unsuccessful bill that would give merchants an antitrust exemption to negotiate interchange fees;
• Regulatory relief measures for credit unions; and
• The beginning efforts that resulted in the corporate credit union stabilization plan signed into law just last week.
The Hill's list of top lobbyists is created based on conversations with aides, other lobbyists and members of Congress. The newspaper covers lobbying and Capitol Hill activities. It is read largely by congressional members and lobbying organizations.
FinCEN Releases 15th Issue of SAR Activity Review
This is a product of continuing dialogue and close collaboration among the nation’s financial institutions, law enforcement officials, and regulatory agencies to provide meaningful information about the preparation, use, and value of Suspicious Activity Reports (SARs) and other Bank Secrecy Act reports filed by financial institutions. You can find the review online at http://www.fincen.gov/news_room/rp/files/sar_tti_15.pdf
Important Notice for BSA E-Filers
On June 27, 2009, FinCEN’s BSA E-Filing system will transition from IBM PureEdge forms to Adobe forms, which impacts BSA E-Filing users in varying degrees. After June 27, 2009, only Adobe forms will be available for download. To read a copy of the Adobe Transition Question and Answer Guide, go to:
http://bsaefiling.fincen.treas.gov/news/BSA EFiling Adobe Transition Questions and Answers Guide.pdf
DELAWARE NOTES
DEL-ONE (DELAWARE FCU) held a ribbon-cutting on May 21 to celebrate the opening of the credit union’s newest branch south of Smyrna – one of seven located throughout the state. CEO Duke Strosser spoke at the ceremony, along with Secretary Collin P. O’Mara from Delaware’s Department of Natural Resources, who congratulated the credit union for utilizing solar energy to provide electricity for the facility. An upcoming issue of Delcu News will feature more details and pictures of this new branch.
NCUA’s “Insurance Report of Activity” for the first three months in 2009 gave details of expansion plans for two Delaware credit unions.
• DIAMOND STATE FCU is merging into SUSSEX COUNTY FCU. Sussex County FCU has a low-income community charter, serving persons who live, regularly work, worship, go to school or participate in associations headquartered in Sussex County. Diamond State FCU has a multi-common bond charter serving groups in the state of Delaware.
• DELAWARE STATE POLICE FCU has expanded its common bond, which serves the law enforcement industry. Their expanded field of membership allows the credit union to serve 16 counties in four states. Specifically, the credit union serves employees of federal, state, county, and municipal agencies engaged in the police protection industry who work in the three counties in Delaware; Caroline, Cecil, Dorchester, Queen Anne’s, Somerset, Talbot, Wicomico, and Worchester Counties in Maryland; Chester and Delaware Counties in Pennsylvania; and Accomack and Northampton Counties in Virginia.
EMPLOYMENT CLASSIFIEDS |
Management Position Sought. Individual with over 20 years in financial institutions seeks a credit union position. The applicant has a CPA and, therefore, has a strong background in accounting and operations. Call Susan Fallon and ask for resume #05-18-09.
EDUCATIONAL OPPORTUNITIES
June/July QuickBites Teleconferences
One-hour sessions run from 11 a.m.-noon:
■ 6/03 Call Centers: Six Common Mistakes
■ 6/22 Designing a Loan Department
■ 6/30 Business Development in Community Charters
■ 7/08 Repossession and Sale of Collateral
■ 7/21 Death of a Member
■ 7/29 Credit Union Employment Issues
The two-hour sessions run from 11 a.m.-1 p.m.
■ 6/16 ACH
■ 7/15 Social Media Marketing
The fee for the one-hour sessions is $99; the two-hour session fee is $169. The deadline to register with Bernadette Hines: one week before the session.
Collection and Bankruptcy Updates Seminar
Wednesday, June 3, from 9 a.m.-4 p.m. Collection council members have a reduced fee of $75 for the first participant and $65 for the second. The fee for non-council members is $195. Call to see if space is still available.
Credit Union Security and Robbery Procedures
Two dates at two separate locations:
■ Tuesday, June 9, at the League office, from 5:30-7 p.m.
■ Wednesday, June 10, at the Delaware State Police FCU, 700 North Bedford Street, Georgetown, from 5-6:30 p.m.
Facilitated by Dean Gray, CUNA Mutual risk manager, the program fee is $55 per person. A light meal will be served one-half hour before the session begins. Registration deadline: June 2.
June Council Meetings
■ Lending Council: Tuesday, June 9. Topics: Loan fraud and Small Business Administration loans.
■ Marketing Council: Monday, June 22. Topic: Student branching and other topics.
Both sessions will be held at the League office from 10 a.m.-noon, followed by lunch. There is no fee for council members; non-members - $100. Call Jane Bailey to enroll for lending by June 3. Call Alice Smith for marketing by June 15.
TOGETHER is published on the 15th and 30th of each month by the Delaware Credit Union League, 4 Quigley Boulevard, New Castle, DE19720. Information to be published should be sent or phoned into the League no later than the Monday of the week preceding the publication date. Telephone: (302) 322-9341 or (800) 292-7875. This newsletter can also be found on the League website: www.dcul.org. Hard copies of the newsletter will be mailed to each credit union CEO/manager for distribution to those without computer access. Readers can receive a reminder when the newest edition is posted to the Web by emailing susan@dcul.org. Editor: Alice Smith (alice@dcul.org).