ALEXANDRIA, Va. (3/3/15)--Loan growth at federally insured credit unions climbed last year to the highest level since 2005, according to fourth quarter data released by the National Credit Union Administration Monday.
Memberships, assets, deposits and net worth saw positive growth in the fourth quarter of 2014, and net interest margins held steady from the first quarters and were slightly higher than the end of 2013.
Mike Schenk, CUNA vice president of economics and statistics, said the NCUA's information reflects results
in CUNA's monthly survey of credit union released last month.
"Strong and broad-based loan growth was clearly one of the defining characteristics of credit union operating results in 2014," Schenk said. "Perhaps more impressive is the fact that credit union memberships grew by an astounding 3.1% in the year. That's the biggest one-year percentage increase in memberships in 20 years and represents growth that is more than three times faster than the rate of U.S. population growth.
"Clearly, an increasing number of Americans recognize credit unions as their best financial partner," he said.
Outstanding loan balances grew 10.4% between the end of 2013 and the end of 2014, and total loans reached $712.3 billion.
- Total first mortgage loans outstanding were up 2% to $292.2 billion from the previous quarter and up 8.8% from the fourth quarter of 2013;
- Second mortgage loans were up 0.7% to $72 billion from the previous quarter and up 2.3% from the end of 2013;
- New auto loans were up 4.8% to $86.3 billion from the previous quarter and up nearly 21% from the fourth quarter of 2013;
- Net member business loan balances were up 2.8% to $51.7 billion from the previous quarter and up 12.4% from the fourth quarter of 2013; and
- Payday alternative loans outstanding were up 16% to $37 million from the previous quarter and up 36.2% from the fourth quarter of 2013.
NCUA Chair Debbie Matz said the loan growth helped credit unions reduce reliance on long-term investments to generate income. Investments declined in all categories except those with maturities of one to three years, which rose by 11.8% from 2013, for a total of $99.7 billion.
Investments with maturities greater than 10 years dropped 21.6% from the end of 2013, to $5.6 billion.
The NCUA has posted
of fourth-quarter call reports, as well as a
of fourth-quarter performance and financial trends
for federally insured credit unions.
WASHINGTON (3/3/15)--A House bill was reintroduced Monday that would both establish a Small Business Advisory Board to the Consumer Financial Protection Bureau, as well as codify the bureau's existing credit union and community bank advisory councils.
The bill was introduced by Reps. Robert Pittenger (R-N.C.) and Denny Heck (D-Wash.).
CUNA Chief Advocacy Officer Ryan Donovan welcomed the bill's introduction, saying, "The engagement that the credit union system has had with the CFPB through the credit union advisory council has been positive and this legislation is important because it would ensure the council continues as a matter of law."
Just last Friday, CUNA President/CEO Jim Nussle sent a
to recommend credit union candidates for the CFPB's Credit Union Advisory Council and Consumer Advisory Board. He noted that membership on CFPB's advisory boards is key to ensuring the unique perspective of credit unions is not only heard, but also taken into consideration as a part of any and all rulemakings affecting credit unions.
The new Small Business Advisory Board, if the bill is enacted, would be charged with providing information on emerging practices of small business concerns that provide eligible financial products or services, including regional trends, concerns, and other relevant information.
WASHINGTON (3/3/15)--Consumer Financial Protection Bureau (CFPB) Director Richard Cordray will deliver the sixth semiannual report to the U.S. House Financial Services Committee today. Cordray's appearance is one of several Congressional hearings CUNA will be paying close attention to this week.
The CFPB director is required by the Dodd-Frank Act to testify on the bureau's activities twice per year. Today's hearing will cover CFPB activities from April 1 to Sept. 30, 2014.
The hearing is scheduled to begin at 2:30 p.m. (ET) and will be streamed on the committee's
Other hearings of interest scheduled for this week include:
- Today: House Energy and Commerce oversight and investigations subcommittee, "Understanding the Cyber Threat and Implications for 21st Century Economy," 2:30 p.m. (ET). Cybersecurity expert witnesses will focus on the history, evolution and future of cybersecurity and its effect on the economy;
- Today: Senate Banking Committee, "Federal Reserve Accountability and Reform," 2:30 p.m. (ET). Business and economics experts will testify; and
- Wednesday: House Committee on Homeland Security subcommittee on cybersecurity, infrastructure protection and security technologies, "Industry Perspectives on the President's Cybersecurity Information Sharing Proposal," 2 p.m. (ET). Various industry stakeholders will share their perspectives on the recently announced information-sharing initiative.
Last week in Congress, Small Business Administration (SBA) Administrator Maria Contreras-Sweet
before the House Small Business Committee on the agency's fiscal year 2016 budget. The SBA is requesting $860 million, a 3% reduction from the current budget.
The budget includes the highest-ever authorization request to Congress for the SBA's 7(a) lending program, $21 billion, up from $19.2 billion last year. It also seeks full funding for resource partners, including Small Business Development Centers, SCORE partners, Women's Business Centers and Veterans Business Outreach Centers.
The SBA recently entered into a memorandum of agreement with the National Credit Union Administration, and reached out to CUNA about connecting with more credit unions. The SBA-guaranteed portions of its loans do not count against a credit union's member business lending cap.
WASHINGTON (3/3/15)--CUNA welcomed the reintroduction Monday of a bill that would raise the cap on credit union member business lending (MBL) to 27.5% of assets. Introduced by Reps. Ed Royce (R-Calif.) and Gregory Meeks (D-N.Y.), the Credit Union Small Business Jobs Creation Act (H.R. 1188) is identical to a bill introduced by Royce in the last Congress.
"I thank Reps. Royce and Meeks for their strong leadership and support of credit unions and small businesses," said CUNA President/CEO Jim Nussle. "This common sense legislation would allow credit unions to do so much more to help small businesses grow, creating jobs for hard-working Americans and boosting our economy." (See related story: CU's loan makes small biz feel 'important,' owner says.)
To qualify for the higher MBL threshold, credit unions must be well capitalized, have a history of MBL experience, be operating at no less than 80% of the cap for the previous year and receive approval from the National Credit Union Administration.
CUNA estimates that raising the cap from the current 12.25% of assets would create 140,000 new jobs and allow credit unions to lend an additional $13 billion to small businesses, with no cost to taxpayers.
"Current regulations arbitrarily cap the ability of our nation's credit unions to lend to small businesses. Main Street businesses looking to expand and hire more workers have suffered as a result," said Royce in a statement. "The Credit Union Small Business Jobs Creation Act removes this obstacle to lending and ensures that qualified credit unions are better able to support Americans who need loans to start, sustain, or grow their businesses."
Raising the MBL cap is a major legislative priority for CUNA, due to the regulatory relief it would achieve. CUNA will send a letter of support for the legislation.
Daily Financial Rates -- 2015-03-03
Tuesday, March 3, 2015
03:55 AM CST
TREASURY YIELD CURVE
(based on the $1 million market)
Results of the March 2, 2015 auction of short-term U.S. government bills, sold at a discount from face value in units of $10,000 to $ 1 million
||Last changed December 16, 2008 |
|near closing bid||0.080||0.050||0.060||0.100||0.080|
FREDDIE MAC (Mortgage commitments, 30 days)
FANNIE MAE (Mortgage commitments, 30 days)
COMMERCIAL PAPER (Financial, 90 days)
: Data not available at time of page generation (shown at top of page)
Wall Street Journal
U.S. Dept. of the Treasury
All rates are from the previous business day unless otherwise noted.
WASHINGTON (3/3/15)--Consumer spending nationwide fell 0.2% in January after a 0.3% drop in December, according to numbers released Monday by the Bureau of Economic Analysis. The silver lining, perhaps, is that the saving rate climbed to 5.5%, doubling down on December's 0.5% rise (
While overall spending declined, real spending jumped 0.3% after a 0.1% step back in December thanks to upswings in service, utility and goods spending.
"Real spending growth accelerated in January as utility spending rebounded and consumers continued to benefit from low energy prices," said Scott Hoyt, Moody's analyst (
). "Discounting the weather effect, spending grew, though only modestly. Despite the weakness, however, the trend is positive."
Personal income growth remained steady with a 0.3% increase, while wage income growth accelerated to 0.5%.
Consumer prices fell 0.5%, which is the biggest drop since November 2008 and the fourth-largest decline on record, according to Moody's.
Energy prices fell 10.4%, and food prices dropped 0.2%. Excluding energy and food, core prices climbed 0.1%.
"Despite their recent increases, consumers are spending less on gasoline and other energy goods than they were a year earlier, freeing cash for other purposes," Hoyt said. "This is a drag on nominal spending growth, however."
WASHINGTON (3/3/15)--Jonathan "Jared" Ihrig has been promoted to chief compliance officer for CUNA. Effective immediately, Ihrig will manage staff to provide compliance information to leagues and credit unions, as well as provide assistance to CUNA's advocacy department in assessing the impact of federal legislation on credit union operations.
"Jared will bring a wealth of legal knowledge and knowhow to his new role, which will contribute greatly to the success of credit unions and CUNA," said CUNA President/CEO Jim Nussle. "Jared will make a great addition to CUNA's leadership team, and I look forward to continuing to work with him."
Ihrig will replace Kathleen "Kathy" Thompson as chief compliance officer. Thompson, who has plans to retire from CUNA this summer after more than 35 years, will stay on board during the transition.
"Kathy has been a leader in the financial industry for decades," said Nussle. "Her work has raised the bar for the credit union system, and she will be missed. Kathy will always be a friend to CUNA, and I wish her well in retirement."
Ihrig has been with CUNA since 2011, most recently serving as senior director of advocacy and counsel for regulatory affairs. He also worked in the regulatory and compliance field at law firms in Texas. Ihrig also was senior compliance officer at Security Service FCU, San Antonio, and director of compliance/assistant general counsel at American Airlines FCU, Fort Worth.
Ihrig also is a certified public accountant. He earned his law degree from Oklahoma City University and his bachelor's degree from Oklahoma State University.
MADISON, Wis. (3/3/15)--
CUNA Lending Compliance School
, June 14-18 in Las Vegas, will offer lending compliance updates and provide participants tools for keeping their lending portfolios in step with the latest regulations.
"Lending compliance can get tricky, especially as new regulations come into effect," said Melisa Kallestad, CUNA instructional design manager for compliance. "Attending CUNA Lending Compliance School allows lenders and compliance officers to rest assured, knowing they have the skills and knowledge to keep their credit unions out of compliance trouble and avoid fines and losses."
This year, the school kicks off with three optional pre-conference workshops: the eight-hour "SAFE Comprehensive Mortgage Loan Originator Course," "Member Business Lending Compliance Training from the Ground Up" and "Lending and Compliance: Where Change Isn't Always Easy."
During the school, attendees will attend informational sessions led by compliance industry experts. Session highlights include:
- Anatomy of loan fraud;
- Consumer loan growth and compliance pitfalls;
- Assessing fair lending risks;
- Auto lending compliance risks;
- Mortgage lending hot topics; and
- Investing in loan quality to manage risk.
MARLBOROUGH, Mass. (3/3/15)--In support of reducing homelessness in the state, Massachusetts credit unions presented the Massachusetts Coalition for the Homeless with a check for $135,000 last week (
Daily CU Scan
Nicole James, chair of the Cooperative Credit Union Association's (CCUA) social responsibility committee and senior vice president of retail services at RTN FCU, Waltham, Mass., and Paul Gentile, CCUA president/CEO, presented the ceremonial check to Robyn Frost, coalition executive director.
"It is the financial assistance that the coalition receives from credit unions across our state that allows us to be there when families and unaccompanied youths are in need," Frost said.
RTN FCU raised more than $34,000 last year for the cause--the most by any credit union in the state-- with Hanscom FCU, Hanscom Air Force Base, just behind it with a donation of more than $33,800.
Boston Firefighters CU; Brotherhood CU, Lynn; Harvard CU, Cambridge; Members Plus CU, Medford; and St. Jean's CU, Salem, all donated more than $2,000 to the effort.
"Building on the credit union core principles of cooperatives helping people and local communities, the Massachusetts credit unions are committed to the Coalition and its efforts to eradicate homelessness within our state," Gentile said.
SMITHFIELD, R.I. (3/3/15)--Credit unions may still be grappling with a tight member business lending cap, but they continue to make the most of the space they have. A Rhode Island couple running a very specialized business can attest to that first hand.
In 2002, Robin and Gary Moorehead started a unique embroidery business specializing in custom stitching for apparel worn by dogs and their handlers during dog shows (
Providence Business News
After years of traveling the country following the American Kennel Club dog show circuit with the same three commercial embroidery machines, the Mooreheads decided they needed to update their equipment.
But it wasn't until they applied at Navigant CU, Smithfield, R.I., that they were approved for the loan to pay for the new machines.
"The big banks didn't want to hear my stories," Robin Moorehead told
Providence Business News
. "(Navigant) made me feel like I was important."
CUNA continues to push for Congress to raise the cap on credit union member business loans, which sits at 12.25%.
On Monday, with strong CUNA support, Rep. Ed Royce (R-CA) and Rep. Gregory Meeks (D-NY) reintroduced a bill--called the Credit Union Small Business Jobs Creation Act--to raise the member business lending cap for qualified credit unions to 27.5%. (See related story: CUNA-backed MBL bill reintroduced to raise cap to 27.5%.)
Regardless of where the cap sits, however, Navigant continues to maximize its lending ability for members.
"Our commercial lending isn't multimillion dollar customers, it's the mom-and-pop customers," Timothy J. Draper, Navigant vice president of marketing, told
Providence Business News
. "Our model hasn't changed dramatically in 100 years."
RICHMOND, Va. (3/3/15)--Virginia Gov. Terry McAuliffe last week signed into law two pieces of legislation backed by the Virginia Credit Union League, including one that would allow credit unions to offer prize-linked savings (PLS) accounts.
PLS accounts encourage savings by offering members entries into cash raffles each time they put away a set amount of money into savings. Members don't risk anything because, even if they don't win, they keep all the money they have saved.
"It's been a good General Assembly session for credit unions and we're pleased that our bill to allow credit unions and banks to offer prize-linked savings programs has been signed by the governor," league President Rick Pillow told
. "Credit unions still embrace our mission to promote thrift and savings and the authority to offer prize-linked savings programs is simply another opportunity to help our members develop and maintain a savings habit."
Ryan Donovan, CUNA chief advocacy officer, highlighted the passage of the two bills in his weekly "
." (See related story: On CUNA's radar: CFPB report to Congress, cybersecurity hearings.)
PLS accounts so far have been approved in 11 states. The other 10 states include Connecticut, Indiana, Maine, Maryland, Michigan, Nebraska, New York, North Carolina, Rhode Island and Washington.
In Minnesota last week, two bills sponsored by the Minnesota Credit Union Network allowing credit unions to offer prize-linked savings were introduced in both the Minnesota House and Senate.
Since 2009, credit unions offering PLS accounts have helped more than 50,000 members save $94 million.
The second law in Virginia will ease regulatory burden for credit unions related to ATM services, the league said. Previous Virginia law required state-chartered financial institutions to notify state regulators any time they want to place or remove an ATM, something federally chartered institutions and ATM providers were not required to do. The new law eliminates that notification requirement, creating parity for state-chartered institutions.
"We appreciate the good work of our credit unions in lobbying for these two bills during our Credit Union Days at the General Assembly," Pillow said. "When lawmakers hear their constituents care about specific legislation, they pay attention. It makes our job at the Capitol that much easier."
MADISON, Wis. (3/3/15)--An article reporting that the Financial Accounting Standards Board (FASB) proposal regarding credit losses would likely "have a significant, detrimental impact on a number of credit unions and their members" was the most-read
article in February.
In response to the report, CUNA President/CEO Jim Nussle wrote to all seven FASB board members to reiterate the message sent last year to FASB: that the board should refrain from imposing the proposed changes on credit unions.
The Top 10 articles for the month included:
10. CFPB may temporarily suspend credit card agreement submissions
WASHINGTON (2/26/15)--Credit card issuers could see a reduced burden for one year under a Consumer Financial Protection Bureau proposal issued this week.
9. Curtain rises in less than a month for CUNA GAC
WASHINGTON (2/9/15)--In less than a month, nearly 5,000 credit union leaders will be coming together in Washington, D.C., for CUNA's 2015 Governmental Affairs Conference--the credit union movement's premier conference.
8. 16 indicted in fraud thwarted by Widget Financial
PITTSBURGH (2/5/15)--On Monday, federal prosecutors indicted 16 people allegedly associated with an identity theft and wire fraud scam that was uncovered by Widget Financial FCU, Erie, Pa., in 2012.
7. CUNA to launch unique survey examining CUs' post-Dodd-Frank compliance costs
WASHINGTON (2/12/15)--CUNA has commissioned a comprehensive study and fact-based analysis of the compliance costs credit unions face due to the heavy burden of regulation. Wally Murray, president/CEO, Greater Nevada CU, Carson City, Nev., announced the CUNA initiative in his testimony on regulatory relief at a Senate Banking Committee hearing this morning.
6. Nussle on Bloomberg: CUs best suited to meet consumers' financial needs
NEW YORK (2/23/15)--CUNA President/CEO Jim Nussle refuted point-by-point longstanding misunderstandings about credit unions in an appearance on "Bloomberg Surveillance" Friday.
5. 'Significant' concerns with same-day ACH plan, CUNA says
WASHINGTON (2/9/15)--While same-day automated clearinghouse (ACH) payments would create a faster payments option, CUNA has significant concerns about the same-day ACH proposal issued by NACHA--The Electronic Payments Association. The proposal would enable the option for same-day processing of virtually any ACH payment.
4. CUNA welcomes NCUA's review of 'small entity' threshold
ALEXANDRIA, Va. (2/20/15)--CUNA welcomes the National Credit Union Administration's (NCUA) review of the definition of "small entity." The NCUA issued a proposal Thursday that would expand the definition of the term "small entity" to include credit unions with assets of less than $100 million; however, CUNA maintains a much higher threshold of $500 million would be appropriate for purposes of reduced regulatory burden.
3. CUNA provides memorandum on UBIT refunds
WASHINGTON (2/18/15)--CUNA has asked outside counsel, Foley & Lardner LLP, to prepare a memo with general information on how credit unions can claim tax refunds on income exempt from Unrelated Business Income Tax (UBIT) and what a credit union might expect if it files for a refund.
2. Bill to allow CUs to raise supplemental capital met with CUNA support
WASHINGTON (2/13/15)--A reintroduced bill that would allow credit unions to raise other forms of capital has been met with strong support from CUNA. Reps. Peter King (R-N.Y.) and Brad Sherman (D-Calif.) introduced the Capital Access for Small Businesses Act earlier today.
1. FASB credit losses plan likely to be detrimental to CUs, warns CUNA
WASHINGTON (2/20/15)--A FASB proposal regarding credit losses is "likely to have a significant, detrimental impact on a number of credit unions and their members." CUNA President/CEO Jim Nussle wrote to all seven FASB board members this week to reiterate the
sent last year to FASB: that the board should refrain from imposing the proposed changes on credit unions.
FARMERS BRANCH, Texas (3/3/15)--Consumers from Texas, Oklahoma and Arkansas who picked credit unions over banks to manage their finances last year appear to have made the right choice, according to recent numbers from the Cornerstone Credit Union League.
(Cornerstone Credit Union League Graphic)
Based on the league's research, credit unions in the three states saved members an average of $9,000 in 2014 (
Further, credit unions provided an average of nearly $7,000 in loans to each member--increasing total portfolio assets by more than 10%, or $6.2 billion--and granted more than 3.1 million new loans.
"That's nearly 12,000 loans issued every business day, or 25 loans every minute," the league said.
More than one-quarter of all residents in the states' combined populations used a credit union last year.
The report also found that credit unions:
- Issued nearly $36 billion in new loans, or roughly $98 million per day;
- Spent more than $1.6 billion on compensation for nearly 24,500 employees;
- Spent nearly $129,000 per day to train and educate employees;
- Purchased more than $133 million in advertising and promotional materials;
- Paid more than $1.1 million per day for professional and outside services; and
- Paid more than $1.7 billion for goods and services in their local communities.
NEW YORK (3/3/15)--A stronger economy has consumers more comfortable taking on debt. And it also means credit card issuers are more comfortable extending tempting balance-transfer offers (
New York Times
Credit card comparison website CardHub looked at offers from 15 major issuers and found that longer zero-interest promo periods, up to 18 months, are available. After the promo period ends, card rates can rise substantially. With a household average of $7,126 in credit card debt, many consumers could save as much as $1,000 by transferring balances from high- to low-rate cards--with some significant caveats.
For one, fee-free transfers are rare. Most of the zero-interest offers charge at least 3% of the amount you transfer and some charge more. Absent a transfer cap--also now rare--you could pay $150 to transfer a $5,000 balance.
A smart balance transfer can help you pay off debt at lower interest rates, as long as you have the discipline and the cash to pay off the balance in short order. Credit union credit cards typically charge 1.5 to 3 percentage points less than other credit cards, so your best bet might be to simply apply for a credit union card.
Here are some other things to consider in a credit card balance transfer:
How can I avoid paying high interest on the transferred balance?
Pay the balance in full before the promotional period ends to avoid paying higher interest rates when the offer expires. If you make only the minimum payment and continue to carry a balance, or to add to the balance with purchases and cash advances, you will just perpetuate a cycle of debt.
Is everyone eligible for a zero-percent offer?
No. Card issuers offer these sweet promotions to borrowers with exceptional credit.
Can I transfer other debts to a credit card?
Some cards allow balance transfers of other types of debt, for example, car loans and even mortgages, as well as credit card debt. Credit card debt typically counts more on your credit score because it isn't secured by collateral, so the shift could have a harmful effect on your credit standing. Car and home loans are available at far lower rates than credit cards so it makes little if any sense to make that kind of transfer.
If you're attracted by a zero-interest transfer offer, make sure you also address your reason for being in debt in the first place. Beware of using the transfer as an opportunity to take on more debt.
In the end you are wise to shop around for the best sustainable rate on any loan, and that usually will be from your credit union. For related information, read "Interest Deferred: Beware Zero-Percent Medical Credit Cards" in the
Home & Family Finance Resource Center
WETHERSFIELD, Conn. (3/3/15)--Malauzai Software, a provider of mobile and Internet banking SmartApps for community financial institutions, has partnered with digital payments services provider Payveris to offer payments services.
The two companies have created a core-neutral integration between Malauzai's SmartApps and Payveris' bill pay, account-to-account transfer, and person-to-person (P2P) payments via Payveris' PayItNow network. The integration places P2P functionality directly into the mobile banking SmartApp and enables credit union members to securely conduct payments via email or text message using a security challenge question.
In January, Payveris partnered with the Grand Rapids, Mich.-based credit union service organization CU*Answers to provide online banking and payment services to credit unions (
Jan. 28). Through that partnership, CU*Answers made a financial investment into privately held Payveris.