WASHINGTON (4/1/15)--The U.S. Supreme Court heard arguments last week in a case involving the stripping of a second lien when a borrower declares bankruptcy. CUNA has been monitoring this and other similar cases over the past few years because credit unions often make second mortgage loans.
At the heart of the case,
Bank of America v. Caulkett,
are two Florida homeowners who had second mortgages voided during Chapter 7 bankruptcy proceedings.
In its opening statement, Bank of America cited a 1992 Supreme Court case that does not allow a lien to be voided based on the current value of the collateral, arguing that outside of bankruptcy, a financial institution would be entitled to have its lien stay with the property until it is paid in full.
CUNA hopes the court will continue to hold the security interests of a second lien; failing to do so could disincentivize credit unions from offering second liens.
The court is expected to release its ruling before the end of June.
WASHINGTON (4/1/15)--A new mortgage-shopping toolkit that includes forms that will be required starting Aug. 1 has been released by the Consumer Financial Protection Bureau (CFPB).
Creditors must provide the toolkit to mortgage applicants as a part of the application process, and the CFPB encourages other industry participants, including real estate professionals, to provide it to potential homebuyers.
The new toolkit is designed to replace an existing one that creditors are currently required to provide to mortgage applicants.
The bureau's new Truth-in-Lending Act-Real Estate Settlement Procedures Act (TILA-RESPA)
integrated disclosure rule
includes new Loan Estimate and Closing Disclosure forms that lenders must provide starting Aug. 1.
According to the CFPB, the
provides a step-by-step guide to help consumers understand the nature and costs of real estate settlement services, define what affordable means to them and find their best mortgage.
It consists of interactive worksheets, checklists, conversation starters for discussions between consumers and lenders and research tips to help consumers seek out and find important information.
The toolkit can be printed and filled out, but also includes fillable text fields and interactive check boxes in the electronic version. A Spanish language version will also be made available later in 2015.
The CFPB says the release of the toolkit now is intended to give the mortgage industry time to order and receive or print the new toolkit and integrate electronic versions into their mortgage origination systems.
ALEXANDRIA, Va. (4/1/15)--The National Credit Union Administration Tuesday liquidated North Dade Community Development FCU, Miami Gardens, Fla., after determining the credit union had violated "various provisions of its charter, bylaws and federal regulations."
the closure, the NCUA noted that North Dade Community Development FCU served 616 members and had assets of $3 million, according to the credit union's most recent call report. It was chartered in 1997 and served a community field of membership that consisted of residents located in northwest Dade County.
The credit union's officials consented to a cease-and-desist order in 2013, one which required
North Dade Community Development is the second federally insured credit union liquidation in 2015.
Member deposits are federally insured by the National Credit Union Share Insurance Fund. Administered by NCUA, the Share Insurance Fund insures individual accounts up to $250,000, and a member's interest in all joint accounts combined is insured up to $250,000. The Share Insurance Fund separately protects individual and Keogh retirement accounts up to $250,000. The Share Insurance Fund has the backing of the full faith and credit of the United States.
ALEXANDRIA, Va. (4/1/15)--Seven individuals have been prohibited from participating in the affairs of any federally insured financial institution, the National Credit Union Administration announced Tuesday. The individuals have pleaded guilty to crimes such as bank theft, embezzlement and bank fraud or consented to the issuance of an order to avoid the time and expense of administrative litigation.
The individuals are:
- Vytas Apanavicius, a former bookkeeper of Taupa Lithuanian CU, Cleveland, pleaded guilty to the charge of conspiracy to commit theft or embezzlement. Apanavicius was sentenced to 21 months in prison, three years supervised release and ordered to pay restitution in the amount of $962,689;
- John Richards, a former employee of Polk County CU, Des Moines, Iowa, pleaded guilty to the charge of bank theft. Richards received one year of probation and was ordered to pay restitution in the amount of $50,795;
- Michael Rusksenas, a former employee of Taupa Lithuanian CU, pleaded guilty to the charge of conspiracy to commit theft and embezzlement. Rusksenas was sentenced to 17 months in prison, three years supervised release and ordered to pay restitution in the amount of $481,502;
- Saundra Scales, a former employee of First Legacy Community CU, Charlotte, N.C., consented to the issuance of an order of prohibition to avoid the time and expense of administrative litigation;
- Alex Spirikaitis, the former CEO of Taupa Lithuanian CU, pleaded guilty to the charge of conspiracy to commit bank fraud. Spirikaitis was sentenced to 130 months in prison, five years supervised release and ordered to pay restitution in the amount of $15 million;
- Wendy Wall, also known as Wendy Wright, a former employee of Pepsi Cola FCU, Buena Park, Calif., pleaded guilty to the charge of bank fraud. Wall was sentenced to 21 months in prison, four years supervised release and ordered to pay restitution in the amount of $480,273.77; and
- Brandi Ward, a former employee of Dowell FCU, Tulsa, Okla., pleaded guilty to the charge of embezzlement. Ward was sentenced to five years supervised release and ordered to pay restitution in the amount of $105,839.04.
Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million.
NCUA enforcement orders are available
and for inspection at the agency's Office of General Counsel.
ALEXANDRIA, Va. (4/1/15)--Most credit unions should see continued loan growth and improvements in loan quality in 2015, National Credit Union Administration Chief Economist John Worth said in a video released Tuesday. Part of the NCUA's Economic Update series, the video covers credit union results from the end of 2015 and the outlook for 2015.
Worth cited healthy job gains and falling unemployment as positive signs for the economy.
"Credit unions have generally performed well in this relatively benign macro environment," he said. "Performance indicators for 2014 were good, loan growth was strong, overall loan quality improved and net income was solid. We also saw some reduction in long-term investments as loan growth has picked up."
Worth discusses the effect of low oil prices on different states and regions, including the potential negative employment effects in oil producing regions.
The video also recaps the recent Federal Open Market Committee announcement regarding interest rates. (See related story: Improving economy will boost CU earnings: CUNA forecast.)
Federal Reserve interest rate policies will have important implications for credit union interest rate costs, Worth said, adding that more than half of credit union deposits are currently in accounts paying rates that closely follow short-term money market rates like the federal funds rate or the three-month U.S. Treasury bill.
He advised credit unions concerned about interest rate risk to visit the agency's
on that topic.
ALEXANDRIA, Va. (4/1/15)--Comments on the National Credit Union Administration's
are due to the agency by April 29, and to CUNA by April 24. The rule was published in the
this week, kicking off the proposal's 30-day comment period.
The proposed rule would eliminate the limit on fixed assets, currently at 5% of a credit union's total assets, eliminate all fixed-asset waiver provisions and establish a six-year partial occupancy time period for federal credit union premises.
During the NCUA's board meeting in March, when the rule was introduced, the agency said the risks that come with ownership of fixed assets will be addressed through the supervisory process.
A more detailed summary, as well as information on how to comment, can be found on CUNA's fixed-assets proposal