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IHuffPoI Wis. op-ed MBL bill to help small biz grow

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MADISON, Wis. and WASHINGTON (4/4/12)--An article in Wisconsin Corporate Report and a blog in Huffington Post feature credit union leagues telling why Congress should pass the member business lending (MBL) bill to increase credit unions' MBL cap.

Wisconsin Corporate Report recently carried an article Feb. 29 on how businesses in Reedsburg, Wis., had been hurt by banks that were either pulling their lines of credit or not renewing their loans, despite good payment histories (To read the article, use the link). 

That prompted Wisconsin Credit Union League President/CEO Brett Thompson to contact the publication. The result: an interview in the "The Last Word" column (March 28), the most frequently read page of the publication. The article emphasized that credit unions want to step in and help but many can't, because of the MBL cap that limits credit unions' MBLs to  12.25% of assets.  Credit unions, Thompson explained, are trying to get that changed in Congress to 27.5% of assets, but banks are opposing the bills.

Thompson was asked about the bankers' argument that business loans should be left to banks and that credit unions weren't good at this kind of lending.  "Nothing could be further from the truth. For many years, many (credit unions) have made loans effectively." He called banks' level-the-playing-field stance "disingenuous."  "If the playing field were that uneven, you would not be in a situation where 93% of all commercial lending in Wisconsin is done by banks."  He noted credit unions have done very well making MBLs.  The average MBL in the state is just under $178,000--the type of loans banks aren't interested in, he said.

"We have the ability to help borrowers, many of whom are the type that banks are not interested in, and at the same time give a shot in the arm to the economy," Thompson said. "It would mean $408 million in business credit in Wisconsin and we believe that would result in 4,447 new jobs" in the state.

In a Huffington Post (April 2) blog, Dave Adams, president/CEO of the Michigan Credit Union League & Affiliates, notes  banks aren't lending because of tough economic times and tough new regulations.  "While many banks are not making these loans, Michigan's credit unions have once again stepped up. In 2011, credit unions' small business loans were up over 14% for the fifth  year in a row during extraordinarily difficult economic circumstances when most banks were pulling back on business lending," he said.

To read all three articles, use the links. (See related story, "CUNA in Daily Caller: MBLs are all about small business," in News Now's Washington section.)

Special CUNA Board election to be held for Mays seat

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MADISON, Wis. And WASHINGTON (4/4/12)--The Credit Union National Association (CUNA) will conduct a special CUNA Board election for a seat representing District 5, Class C, CUNA announced Tuesday.

The seat was vacated when Harriet May, former CUNA Board chairman and former CEO of GECU, El Paso, Texas, announced her retirement, which was effective on Saturday.  The term for that position will expire at the adjournment of CUNA's Annual General Meeting in 2014.

A notice was sent Tuesday to eligible credit unions in District 5, Class C, who can nominate a candidate for the special election. District 5 is comprised of leagues in Arizona, Colorado, Kansas, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, Utah and Wyoming.

Nominations are due April 27.  The election will be conducted by written ballot from April 30 to May 25. The term of office will begin immediately after the successful candidate is determined.

To be eligible, a candidate must be an employee or voting board member of the nominating credit union. The nomination must be in writing and be seconded in writing by two other credit unions of the same size group from the district.

Nomination packets were sent to eligible credit unions.  Nomination forms can be faxed to 608-231-4874, e-mailed to thanson@cuna.coop,or mailed to 5710 Mineral Point Road, Madison, WI 53705).

CU savings up loans down assets close to 1 trillion

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MADISON, Wis. (4/4/12)--Credit union assets nearly broke the $1 trillion threshold in February, and credit union membership remains strong, as it has since Bank Transfer Day, according to a Credit Union National Association economist's analysis of February's monthly sample of credit unions.

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The movement's total assets reached $999.1 billion in February, a 1.9% increase from January and a 5.3% increase from February 2010.

Credit union membership increased 0.4% in February, an increase of 2.2% from Feb 2010.

"Credit unions are poised to pass the $1 trillion asset mark in March" said Bill Hampel, CUNA's chief economist. "That's one of the easiest predictions I've had to make. It's also gratifying to see strong membership growth continue into 2012.  Membership growth in just the first two months of 2012 is close to membership growth for the whole year 2010."     

Credit union savings balances grew 2.1% in February to $859.2 billion compared to a 0.4% decrease in January. Savings a year ago totaled $817 billion. Share drafts led savings growth with an 8.3% increase, followed by regular shares and money market accounts, which rose 3.4% and 1.2%, respectively. One-year certificates grew 0.1% while individual retirement accounts fell less than 0.1%.

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Credit union loans outstanding decreased 0.2% during February to $584.8 billion, after a 0.1% decline in January. Loans totaled $574.2 billion in February 2011. Adjustable-rate mortgages led loan growth with a 0.7% increase, followed by fixed-rate mortgages, which grew 0.4%. Used-auto loans remained constant while home equity loans declined 0.6% and new-auto loans fell 0.7%. Unsecured personal loans and credit card loans dropped 1.9% and 2%, respectively.

The loan-to-savings ratio fell slightly to 68%. The liquidity ratio (the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities) grew to 21% in February.

Credit unions' 60+ day delinquency rate remained at 1.6%.

The movement's overall capital-to-asset ratio remained at 10%. The total dollar amount of capital is $102 billion.

SAC FCU launches Baby Bundle Savings Plan

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BELLEVUE, Neb. (4/4/12)--SAC FCU has introduced the "Baby Bundle Savings Plan" to encourage saving for the future by making it possible for parents, friends and family members to deposit funds in an infant's certificate of deposit throughout the certificate's term.

"Baby Bundle Savings Plan" accounts can be opened during the child's first year and then may remain open and grow throughout the child's lifetime, said the Bellevue, Neb.-based credit union.

When the account is opened, each participating infant receives a Baby Bundle "onesie," pacifier and piggy bank. When Baby Bundle accounts reach maturity, the $564 million asset credit union contributes $25 to every one-year term certificate and $50 to every two-year term certificate.

A credit union release stated the product is designed to help parents prepare for each child's future dreams and is part of a range of accounts designed to help people meet challenges at any life stage.

"Baby Bundle rewards parents who take advantage of the benefits of saving right from the start," SAC FCU President/CEO Gail DeBoer said.

Sioux Falls FCU offers adopt-a-classroom grants

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SIOUX FALLS, S.D. (4/4/12)--Sioux Falls (S.D.) FCU has created the Adopt-A-Classroom grant program to promote financial literacy in local classrooms for students in grades kindergarten-12.

The $163 million asset credit union plans to award up to six grants of up to $500 each for 2012-13 school year projects that include a student financial literacy component.

The grants will go directly to certified teachers in accredited public or private schools so they can obtain the resources required to implement creative financial literacy projects. A Sioux Falls FCU release noted that budget constraints make it more challenging each year to provide children with the tools for learning.

"It's important to give students in our communities the tools and guidance they need to become financially responsible adults," Sioux Falls FCU President/CEO Fran Sommerfeld said.

Application materials have been distributed to schools and are available on the credit union's website.

NCUA replies to tentative rulings in Goldman Sachs case

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LOS ANGELES (4/4/12)--The National Credit Union Administration (NCUA), in its lawsuit against Goldman Sachs & Co. over residential mortgage backed securities (RMBS) sold to Western Corporate FCU and U.S. Central FCU before their collapse, has filed supplemental memos and responses related to tolling time issues brought up in a tentative ruling by a federal judge in Los Angeles on March 15.

The March 15 tentative ruling is in addition to other tentative rulings made by U.S. District Judge George H. Wu in the U.S. District Court of the Central District of California, Western Division, in several cases involving NCUA seeking to recoup losses incurred by the corporates from investment banks.

The suit alleges that Goldman Sachs, GS Mortgage Securities, and Residential Accredit Loans violated securities law in connection with underwriting and issuing the RMBS sold to WesCorp FCU and U.S. Central. NCUA is suing as the liquidating agent for WesCorp and U.S. Central.

The latest flurry of filings relate to whether an "extender statute" and another court case, American Pipe Construction Co. v. Utah, apply to the statute of limitations and statute of repose arguments about whether NCUA had missed deadlines for filing the lawsuit.

NCUA had entered an agreement with Goldman Sachs to extend the time allowed for filing the lawsuit. NCUA says the limitations deadlines for filing the suit had not passed; Goldman Sachs says they had, despite the agreement between the parties.  Goldman also alleged NCUA didn't have standing to sue, since it was not one of the corporates that had bought the RMBs in question.  

In its response to tolling issues raised in an earlier filing, NCUA said Wu's March 15th tentative ruling "correctly concludes that this court should follow the strong majority of courts holding that American Pipe tolling applies whether or not the named plaintiff in a class action had standing to pursue direct claims for the injuries suffered by class members…," said NCUA's response.

In his March 15 tentative ruling, Wu said that "assuming the Court reaches the conclusion that the extender statute and American Pipe apply to the claims raised herein, the court would deny any attempt to dismiss [NCUA's] claims on statute of limitations grounds. " However, he added that "if any federal claims barred by the applicable statute of repose do not enjoy American Pipe tolling, those claims would be dismissed without leave to amend.  Assuming the court concludes American Pipe applies, the court would still order [NCUA] to amend its American Pipe-related allegations."  The court also said it would dismiss claims relying on origination activity of Homecomings Financial Network Inc., which failed to tie allegations to particular loans, but gave NCUA leave to amend its arguments there.

NCUA's reply memorandum said Goldman could have declined to enter the tolling agreement, in which case NCUA would have filed suit within the repose period. Noting that "Goldman's voluntary entry into the tolling agreement was permissible legal tolling that is fundamentally unlike equitable tolling," NCUA said Goldman "agreed to toll the statute of repose before its expiration--and thus induced NCUA to forbear from filing suit during the tolling period."

Regarding NCUA's claims under Kansas law, it "dooms Goldman's argument that the tolling agreement is somehow ineffective as to Kansas statutes of repose," said NCUA, adding that American Pipe tolling is "legal tolling that applies to statute of repose even though equitable tolling doctrines do not, so long as the tolling class action was filed before expiration of the statute of repose."

"The policies that preclude equitable tolling of the statute of repose in no way preclude enforcing a voluntary legal waiver of the repose period by sophisticated parties," argued NCUA. "Goldman identifies no benefit to a policy that permits large banks such as Goldman to renege on a voluntarily negotiated agreement to forestall litigation in hopes of reaching a settlement, and there is none," the agency said.

"There is no more sophisticated party in the U.S. than Goldman, which voluntarily entered into the tolling agreement, received the benefit of NCUA's consideration in delaying litigation pending settlement discussions, and then willfully flouted its promises when it sense some advantage to doing so," said NCUA.  "Goldman should not be permitted to profit from such unvarnished misconduct. The court should enforce Goldman's agreement," NCUA concluded.

In a previous ruling that partly dismissed NCUA's claims in a separate but related action against RBS Securities and other defendants, Wu had granted NCUA the leave to amend, or the ability to provide more information. His ruling had indicated that unless tolled by the virtue of American Pipe, all of NCUA's federal claims would be dismissed with prejudice because they are barred by a three-year federal statute of repose. An extender statute did not apply to the federal claims, he said.  The ruling did not affect NCUA's state securities law claims.

The court, in a separate development, has continued a non-appearance status conference that was originally to be held last week to April 12, according to court documents.

Wis. governor signs three credit union bills

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MADISON, Wis. (4/4/12)--Wisconsin Gov. Scott Walker has signed legislation that will allow credit unions to continue to expand support for their communities.

The bills signed into law include:

  • Charitable Contributions (SB 356): This law will allow credit unions to further support their communities by doubling the amount a credit union can contribute to charitable organizations annually. Credit unions can now make annual donations up to 1% of their regular reserves. Wisconsin credit unions support close to 3,000 charities and programs with hundreds of thousands of dollars of monetary, in-kind and volunteer support annually.
  • Public Deposits (SB 308): This law allows public entities to use a new service in placing their deposits at credit unions and other depository institutions.
  • Uniform Commercial Code (SB 416): This law updates technical language relating to secured account transactions. The new law harmonizes how secured transactions are processed so that Wisconsin credit unions are on par with financial institutions in other states.
"Wisconsin's member-owned financial institutions are vested in and committed to making significant contributions to the communities they serve," said Brett Thompson, Wisconsin Credit Union League president/CEO.

"These new laws help credit unions continue to provide top notch service to their 2.2 million members in communities across the state. We appreciate the strong bi-partisan support for these measures from the state Senate, Assembly and the Governor in ensuring they became law," he added.

SacTown run nets 140K for kids hospitals

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SACRAMENTO, Calif. (4/4/12)--The first Credit Union SacTown 10 Mile Run--which took place Sunday in downtown Sacramento, Calif.--raised more than $140,000 for Children's Miracle Network Hospitals in California and Nevada.

The first Credit Union SacTown 10 Mile Run raised more than $140,000 for Children's Miracle Network Hospitals in California and Nevada. The Sacramento, Calif., event was sponsored by Credit Union Miracle Day Inc. along with 64 credit unions and credit union businesses, including the California and Nevada Credit Union Leagues. Pictured are SacTown 10 Mile Run participants, including individual race winners: Tesfaye Alemayehu and Jane Kibii, with 11 year-old Parmina Valentine, a cancer patient at UC Davis, and members of the SacTown 10 Committee. (Photo provided by California and Nevada Credit Union League.)
The event was sponsored by Credit Union Miracle Day Inc., along with 64 credit unions and credit union businesses, including the California and Nevada Credit Union Leagues.

The "SacTown 10," also designed to increase national awareness of credit unions, took place the same day as the 40th Annual Credit Union Cherry Blossom Ten-Mile Run in Washington D.C., followed by Credit Union Freedom Runs for troops overseas.

Combined, the "Family of Races" raised a total of $515,000 for Children's Miracle Network Hospitals across the country.

Nearly 1,050 runners participated in the Sacramento race, which started and finished in front of the State Capitol building, with a $15,000 prize purse awarded.

Cara Cooper, a St. Francis High School junior who credits treatment she received at UC Davis Children's Hospital with helping her recover from the H1N1 virus (swine flu), sang the national anthem to start the event . Eleven-year-old Parmina Valentine, a cancer patient at UC Davis, cheered the runners on to the finish line and presented awards.

The Credit Union SacTown 10 kicked off with a craft day and news conference Friday  for credit union sponsors at UC Davis Children's Hospital in Sacramento. At the event, California and Nevada Credit Union Leagues President/CEO Diana Dykstra and SacTown 10 Committee Chairman John Pamer, CEO of Concord, Calif-based Diablo Valley FCU, presented Children's Miracle Network Hospitals with a check representing the $515,000 raised for children's hospitals.

Children's Miracle Network Hospitals is an alliance of premier children's hospitals across North America that treat 17 million critically ill children annually‚ regardless of their ability to pay.

Credit Union Miracle Day is the title sponsor group of the Credit Union Cherry Blossom Ten Mile Run. It is a partnership of credit unions, credit union service organizations, and partner organizations nationwide that joined under the umbrella of Credit Unions for Kids to support Children's Miracle Network Hospitals.

New fin lit survey 56 of U.S. adults dont budget

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WASHINGTON (4/4/12)--More than half of U.S. adults--56%--admit they do not have a budget, according to the 2012 Financial Literacy Survey, released Tuesday in recognition of April as Financial Literacy Month.

The survey was conducted by the National Foundation for Credit Counseling (NFCC) and the Network Branded Prepaid Card Association (NBPCA).  In its sixth year, the survey provides annual data and trending about Americans' attitudes and behaviors related to personal finance.

The survey revealed "a disturbing lack of basic financial skills that are critical to building a stable financial future," said the two organizations.

Among other findings:

  • One-third of U.S. adults, or more than 77 million Americans, do not pay all their bills on time;
  • Thirty-nine percent of adults carry over credit card debt from month to month;
  • Two in five adults save less now than they did one year ago, and 39% do not have non-retirement savings;
  • Twenty-five percent of those without non-retirement savings said that if they did begin to save, they would keep their savings at home--in cash.
"This year's survey unveiled some disturbing trends, showing that a significant number of Americans are saving less, spending more and carrying credit card debt over from month to month, suggesting that the painful financial lessons of the past are quickly being forgotten," said Susan C. Keating, NFCC president/CEO.

"Coupled with the two in five adults who gave themselves a C, D, or F on their knowledge of personal finance, the need for an increase in financial education becomes not only clear, but urgent," she added.

For the first time, the survey evaluated responses related to prepaid debit cards. Those findings include:

  • Thirteen percent--roughly 30.5 million Americans--typically use prepaid debit cards to pay for everyday transactions such as groceries, gas, dining out, paying bills and shopping online.
  • Seventy-eight percent of adults who use prepaid debit cards for everyday transactions say they use them because they are convenient;
  • Seventy-three percent use prepaid cards because they believe the cards are safer than carrying cash;
  • Seventy-two percent use prepaid cards to avoid overspending or spending money they don't have; and
  • Fifty-six percent said that the cards help them manage their money better.
"Consumers feel empowered using prepaid debit cards and revealed in the NFCC/NBPCA survey that the top three reasons for using the cards were their convenience, safety and ability to control spending," said Kirsten Trusko, NBPCA president/executive director.

"Additionally, about three in four prepaid debit card users indicated they believed prepaid cards are a better value for their money compared to a credit card or debit card connected to a traditional bank account," Trusko added.

The telephone survey was conducted by Harris Interactive between March 14 and March 19 among 1,007 adults age 18 or older. Of those, 89 use prepaid debit cards.