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Oakland Municipal is first CU closing of 2011

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ALEXANDRIA, Va. (2/7/11)—On Friday, the National Credit Union Administration (NCUA) was appointed liquidating agent of Oakland Municipal Credit Union, of Oakland, Calif., by the state’s Department of Financial Institutions (DFI). It was the first liquidation of a federally insured credit union in 2011. Western Federal Credit Union, of Manhattan Beach, immediately purchased and assumed Oakland Municipal’s assets, liabilities and members. At closure, Oakland Municipal had approximately $88 million in assets and served 7,800 members. The credit union was established in 1964 to serve employees of Oakland area federal, state, and local government. Former members of the closed credit union will experience no interruption in credit union service as they become member new members of Western Federal. The $1.5 billion-asset, full service Manhattan Beach credit union has 148,000 members. It will continue to serve members of Oakland Municipal at the existing branch office located at 150 Frank H. Ogawa Place. At closure, Oakland Municipal had approximately $88 million in assets and served 7,800 members. The credit union was established in 1964 to serve employees of Oakland area federal, state, and local government.

30-year mortgage rates stay steady

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WASHINGTON (2/7/11)—Freddie Mac last week reported an average rate of 4.81% on 30-year mortgages, a fractional increase from the 4.8% average reported during the previous week. Thirty-year fixed mortgage rates averaged 5.01% this time last year. Fifteen-year conventional mortgage rates and five-year adjustable rates also fluctuated by a mere .01% between the week ended Feb. 3 and the week ended Jan. 27, coming in at 4.08% and 3.69%, respectively. One-year adjustable rate mortgages remained at 3.26 % for the second week straight. Freddie Mac Vice President/Chief Economist Frank Nothaft said that the rates remained stable due to improving economic news and a stable rate of inflation through the end of 2010. For the full mortgage rate survey, use the resource link.

Latest NGN offering expected to get AAA rating

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ALEXANDRIA, Va. (2/7/11)—The National Credit Union Administration’s (NCUA) latest NCUA Guaranteed Notes (NGN) offering has been tentatively assigned an AAA rating by market analyst Fitch Ratings. The high rating is due to the assets being backed by the full faith of the U.S. Government. The $1.253 billion in NGNs should be available for purchase soon. The latest NGN offering will be comprised of mortgage-backed securities. A price for the NGNs had not been released at press time, but price guidance was around 40 to 45 basis points. Fitch in a release said that the senior notes would accrue interest at a rate of one-month LIBOR plus a spread subject to a maximum rate of 8% per annum. The NCUA last month completed its first NGN sale of 2011, gaining $1.5 billion in proceeds. The agency has completed 65% of the securitization designed to fund deposits assumed by the bridge corporate credit unions, and has gained a total of $19 billion in revenue from its NGN sales. The remainder of the NGNs will be sold in the coming months, according to the NCUA.

CUNA backs SECs CU swap clearing exemption

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WASHINGTON (2/7/11)--The Securities and Exchange Commission’s (SEC) proposal to exempt credit unions with under $10 billion in assets from mandatory securities-based swaps clearing requirements has the backing of the Credit Union National Association (CUNA), but CUNA would like it to go even further. Without the exemption, credit unions could be effectively prohibited from hedging risk using over-the-counter options or other derivatives when a security, such as a bond, is the underlying asset. The Dodd-Frank Act gives the SEC the leeway to consider exemptions from the swap requirements, but the SEC is not required to exempt any financial institution from the requirements. Federal credit unions are allowed to enter into some types of over-the-counter agreements, which would meet the definition of “security-based swaps,” and some state credit unions have this authority as well. Credit unions would therefore be disadvantaged if the end-user exemption is not expanded to include credit unions, CUNA said in a comment letter sent Friday to the SEC. CUNA added that the proposed $10 billion exemption threshold should not be lowered, and added that the SEC should consider using a different exemption criteria, if possible. CUNA suggested that credit unions be covered by the proposed rule only if they have at least $10 billion in assets and transact significant volumes of securities-based swaps. The SEC proposal seeks to limit the types of risky investments that some have said lead to the recent financial crisis. However, CUNA noted that, in the few and restricted instances where credit unions may make investments in swaps and other forms of derivatives, such investments rarely pose a risk to credit unions due to the comprehensive nature of existing National Credit Union Administration derivatives rules. Those rules generally prevent federal credit unions from investing in derivatives except for certain options used to hedge risk on bonds and retail products tied to an equity index, and to hedge interest rate risk. For the full comment letter, use the resource link.

Social media gets new focus at NCUA

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ALEXANDRIA, Va. (2/7/11)--The National Credit Union Administration (NCUA), known already to “tweet” on Twitter, is enhancing its outreach through social media and has brought on a new employee to lead the charge. The NCUA says it wishes to ensure a “vibrant and active presence in the social media sphere,” which includes a presence, not only on Twitter, but Facebook, YouTube and other forms of electronic communications as well. Kenzie Snowden is the NCUA’s new social media and outreach specialist. She started in that position a week ago. NCUA Chairman Debbie Matz said of the development, “The Social Media and Outreach Specialist position is about the future. NCUA is continuing to explore all avenues to enhance communication with consumers, the credit union industry, and other audiences. I look forward to NCUA reaching new audiences, and new levels of transparency, through the outreach that will be initiated by our Social Media program.” Prior to joining the NCUA, Snowden did a stint in social media development with the public affairs office at the U.S. Patent and Trademark Office.

Inside Washington (02/04/2011)

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* ALEXANDRIA, Va. (2/7/11)--An archived version of the National Credit Union Administration’s (NCUA) webinar entitled “Troubled Debt Restructurings: What are They & How Does the Accounting Work?” is now available. Hosted by NCUA board member Gigi Hyland, the webinar addresses the following topics: What is a TDR? How is financial difficulty defined? What is a concession? How do you measure impairment on a TDR modification? Prudent CRE Workouts. The webinar features presenters Dave Lawrence and Sydney Garmong, of Crowe Horwath, and is intended to facilitate credit unions’ understanding of U.S. Generally Accepted Accounting Principles, aka GAAP, in relation to TDRs … * WASHINGTON (2/7/11)--Federal Reserve Board Chairman Ben Bernanke answered congressional calls for audits of the Federal Reserve System with a defense of monetary policy independence from short-term political considerations at an National Press Club luncheon Thursday. All the Fed’s financial transactions are reported and available to congressional agencies, Bernanke said. The calls for audits, he said, were calls for political oversight of monetary policy decisions. Independence is “the fundamental bedrock of central banking,” he said, adding that all members, past and present, of the Federal Reserve Board agreed. He said that experience elsewhere demonstrates that a politically independent monetary policy leads to better economic outcomes. The present Federal Reserve policy, which includes $600 billion in Treasury purchases begun in November, is supporting the economy, he said. He noted both rises in stock market indices and basic economic indicators as evidence … * WASHINGTON (2/7/11)--Richard Fisher, president of the Federal Reserve Bank of Dallas, said in an interview Thursday he would not support further quantitative easing after this round. The Fed completes its purchase of $600 billion in long-term asset purchases in June (Bloomberg Feb. 4). Fisher said he cannot imagine a convincing argument for further easing given the current state of the U.S. economy. Recent economic data indicate the recovery will gain momentum in 2010, with consumer spending rising and manufacturing increasing last month. Fisher became a voting member of the policymaking Federal Open Market Committee this year. He said he wouldn’t have supported easing if he had a vote last year …