Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

CU System Archive

CU System

Robbery Suspect Killed During Getaway, CU Closes Branch

 Permanent link
WICHITA, Kan. (4/5/13)--A man who allegedly ambushed Credit Union of America employees as they arrived for work Wednesday in Wichita, Kan.,  and robbed the credit union, died of a self-inflicted gunshot during a shootout with a sheriff's deputy, said the Wichita Police Department.

The robbery accelerated Credit Union of America's decision to close the branch permanently, the credit union told The Wichita Eagle (April 4).

CEO Bob Thurman told the newspaper that the credit union was already providing limited  drive-through services. Although the decision to close the branch is not directly related to the robbery, the robbery acted as catalyst for speeding up a decision about the branch. A combination of slowing activity and the added expense to providing security at the location factored in the decision.

Police said Horace L. Gwyn, 26, was fleeing the credit union when a deputy arrived on the scene and gave chase (KAKE.com April 3 and April 4). 

Early reports had indicated the deputy had shot and killed Gwyn, but new information released Thursday morning indicated that the suspect fired a shot at the deputy as he ran, then put the gun up to his head and fired. Meanwhile, the deputy was returning fire and hit Gwyn in the back (KSN.com and The Wichita Eagle April 3).

The incident occurred at 7: 22 a.m. Gwyn allegedly waited and ambushed employees as they arrived for work and forced them inside.  Police said he hit one teller over the eye with a gun and shoved the other.  Both received minor injuries.  The deputy, who was nearby, responded to a silent alarm.

State is Auditing Ohio CUs on Sales/Use Tax

 Permanent link
COLUMBUS, Ohio (4/5/13)--The Sales and Use Tax Division of the Ohio Department of Taxation is auditing several Ohio credit unions regarding payment of sales and use tax, the Ohio Credit Union League said.

The state auditors are looking for expenses and products and services that have not been assessed sales tax (eLumination Newsletter April 3).

"This is not singling out credit unions," John Kozlowski, the Ohio league general counsel told News Now. "The state conducts these type of audits on both for profit and non-profit entities on an annual basis."

Services performed by out-of-state vendors could possibly be subject to further taxes. "For example, this could apply to companies that conduct business over the Internet and do not have their nexus in Ohio," Kozlowski said.

To help credit unions facing audits, the league has added an education session to its InVest48 conference agenda. The session "State Charters: Planning for and Surviving a Sales Tax Audit," will be held April 24.

League staff continues to meet with legislators and the state tax commissioner's office about the effects of the proposed expansion of the state sales tax. Gov. John Kasich's biennium budget would expand the products and services subject to sales tax and lower the overall rate to 5% from 5.5%.

Some tax provisions may be separated from the budget bill; however, Gov. Kasich and some legislators remain committed to funding an income tax cut for state residents, the league said.  

A sub-bill is expected to be introduced in next week, Kozlowski said.

In March, the league sent two letters to key legislators and has provided written testimony, sharing credit unions' concerns and highlighting how the proposed changes could hamper credit unions' ability to serve their members and impact the state-charter system (News Now March 22).

National Farmers Union Urges Reg Relief After CU Input

 Permanent link
WASHINGTON (4/4/13)--The National Farmers Union (NFU), with input from the Credit Union Association of the Dakotas, is urging Congress to create a mortgage law exemption for locally controlled financial institutions serving rural and underserved areas, to provide relief from excessive regulations aimed at Wall Street banks.

Credit unions were instrumental in bringing the resolution to state-level Farmers Union organizations in North Dakota and South Dakota, which passed it as part of their policy making and took it to NFU, a Washington, D.C.-based farm organization similar to the American Farm Bureau except it focuses on cooperatives and family farmers.

NFU passed a Special Order of Business during its annual meeting in March to "lift it out [among other policy issues] to the eyes of the delegates as one issue that is particularly important," said NFU President Roger Johnson.

"The issue gets to local lending and is a function of what is happening with Dodd-Frank regulations," Johnson told News Now.  NFU "supported the act to reign in big banks that caused the big collapse. In the process of emerging the net, cast to deal with big banks that manipulated mortgages and led to the bubble, some rules are indiscriminately clamping down on small lenders and impacting credit unions."

Credit unions originate home mortgages, "but that was never where the problem was," he said, adding, national regulations should "contain exceptions for small lenders."

Local farmers unions and credit unions in North Dakota have had a strong relationship for many years, and NFU would "be delighted to work with" credit unions, he said.

"This is an important issue," CUAD President/CEO Robbie Thompson, told News Now, noting that the Credit Union National Association worked with CUAD in drafting the resolution language. "It's a significant development, because entities outside the credit union industry are concerned about overregulation of financial institutions and small businesses in small communities."

The resolution started with North Dakota credit unions concerned that people could not get credit in rural areas. Large credit unions that serve small communities can "afford to do compliance," said Thompson. "But small credit unions will have to make decisions about whether they can offer loans."

Lisbon (N.D.) Farmers Union CU, with nearly $5 million in assets, used to make one to four home-owner mortgage loans a year, said Daniel Wagner, chief financial officer and manager. Wagner helped bring the issue to CUAD's attention and was instrumental in getting the NFU resolution. "We've been regulated out of that type of loan," he said.

The credit union, a five-star rated credit union in Bauer Financial quarterly reports for years, discontinued the loans because it worried about making a mistake. A $10,000 penalty for a $30,000 mortgage loan is significant for a small asset credit union. The credit union, which has 1.5 employees, was told it needed three full-time compliance officers to ensure compliance with regulations.

It had to turn down two families for $30,000 mortgage loans last year. "Big banks don't run  to make these loans, so these families will have a hard time getting financed," he said.

Although regulators such as the National Credit Union Administration and the Consumer Financial Protection Bureau recently took actions regarding rural institutions and mortgage exemptions, "we'd like them to be expanded," said CUAD's Thompson.

"This presents an opportunity to bring other groups not just in the credit union industry to understand that excessive regulations can harm rural communities and access to credit," Thompson said.  "Hopefully this is a beginning."

NFU's Special Order noted excessive regulations "had the unintended consequences of discouraging home lending in rural and underserved areas by locally owned and/or locally controlled financial institutions." It called for Congress to create exemptions "from recently enacted laws and rules regarding mortgage escrow for high-interest loans, mortgage insurance requirements, appraisal requirements, mortgage licensing and registration, and ability to pay/qualifying mortgages."

MECU To Acquire Bank in Baltimore

 Permanent link
BALTIMORE (4/5/13)--Municipal Employees CU of Baltimore announced Thursday it has agreed to buy the $61 million asset Advance Bank, also of Baltimore.

The agreement is subject to regulatory approvals and expected to close in the fourth quarter, MECU said.

"Advance has served its community well for over 50 years, and we look forward to building on that relationship and to bringing expanded products, services and convenience to its members," said Bert Hash, CEO of MECU.

MECU, with $1.2 billion in assets, will acquire all loans, investments, real estate, accrued interest receivables and other banking-related assets of Advance Bank. The credit union will also assume the bank's deposits, Federal Home Loan Bank advances, and accrued interest payable.

Advance Bank has two branches.

MECU's purchase of Advance is the fourth credit union acquisition of a bank since 2011.  The National Credit Union Administration approved New Berlin, Wis.-based Landmark CU's request to purchase and assume Hartford Savings Bank last month (News Now March 18).

GFA FCU, Gardner, Mass., acquired Monadnock Community Bank in December (News Now Dec. 12). United FCU, based in St. Joseph, Mich., purchased Griffith (Ind.) Savings Bank in December 2011 (News Now Dec. 15, 2011).

Utah Governor Signs Surcharge-Ban Bill

 Permanent link
SALT LAKE CITY (4/5/13)--Utah became the 11th state to prohibit merchants from imposing a surcharge on credit/debit card and other transactions--at least temporarily. Gov. Gary Herbert signed Senate Bill 67 into law on Monday.

The law will expire after one year, at which time the issue will go back before the legislature, according to S.B. 67's sponsor, Republican state Sen. Curtis Bramble (American Banker April 4).   The legislation will maintain the status quo, while state lawmakers take a closer look at the issue.

In addition to the 11 states with bills banning surcharges already on the books, 17 others are considering similar measures in their legislatures.

The Credit Union National Association and state leagues are monitoring the bills' progress, noting that any surcharge on card transactions would impact all financial institutions, including credit unions, as well as consumers and credit union members.

The bills were prompted by a surcharge provision in a $7.2 billion antitrust lawsuit settlement between merchants and Visa, MasterCard and their banks. The provision became effective Jan. 27. It permits merchants to charge a "checkout fee" equal to what the merchant pays to accept the card. That fee is typically 1.5% to 3% in the U.S., but is not to exceed 4%. Prior to the settlement, 10 states had laws banning surcharges.

The 11 states with surcharge bans on the books include: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Texas, and now Utah. However, Maine has a proposal that would ease its surcharge ban.

Bills to block surcharges are either being considered or have been introduced in these states: Arkansas, Hawaii, Illinois, Indiana, Kentucky, Missouri, Maryland, Michigan, Nevada, New Jersey, New Mexico, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont and West Virginia.

Lt Gov To Texas GAC: CUs Will Keep State Tax Exemption

 Permanent link
FARMERS BRANCH, Texas (4/5/13)--Texas Lt. Gov. David Dewhurst told the state's credit unions Wednesday that as long as he is in office, their state tax exemption  would continue.

Dewhurst, a staunch supporter of credit unions in the state, made the comments at the Texas Credit Union League's Texas Governmental Affairs Conference (GAC), said the league (LoneStar Leaguer April 3).

Credit unions' tax-exemption is a top priority on the federal scene, as well as the state scene. The Credit Union National Association has made protecting and defending the federal tax exemption as its No. 1 legislative priority for 2013.

League President/CEO Dick Ensweiler and Executive Vice President Tom Haider kicked off the event with a legislative briefing after a buffet breakfast.

In addition to Dewhurst, speakers included Reps. Mike Villarreal (D-San Antonio) and Dan  Flynn (R-Van), and Harold Feeney, commissioner of the Texas Credit Union Department.

Rep. Flynn presented a special recognition proclamation to Jeff Huffman, the league's vice president of governmental affairs, for his years of valuable and ethical service as a lobbyist, said the league.

Prior to the afternoon Capitol visits with legislators,  Haider and a panel that included Huffman and Suzanne Yashewski, senior vice president of regulatory compliance and legal affairs, gave an indepth analysis of eight primary issues credit unions are watching with the state's 83rd Legislature.

The Texas GAC was help in conjunction with TCUL's Member Meeting & Expo, which runs through today.

Alloya/CenCorp Merger OK'd By CenCorp Members

 Permanent link
WARRENVILLE, Ill., and SOUTHFIELD, Mich. (4/5/13)--Members of $1.4 billion Central Corporate CU  Thursday afternoon voted overwhelmingly to merge with $1.4 billion Alloya Corporate FCU. The vote was 190 to 8.

The merger received approval from the National Credit Union Administration on March 17. CenCorp and Alloya said the merger will take effect April 30. 

"This merger adds 300 members to Alloya's current membership, plus significant scale," noted Charles W. Furbee, Alloya's current CEO. "Alloya is well-positioned for continuing success."

"We are excited about the synergies that the merger brings," said William A. Walby, current CEO of CenCorp. Walby will become Alloya's CEO after the merger. "Members saw additional value in combining two strong credit union-owned organizations to deliver their financial and correspondent service needs into the future."

As the synergies are realized, the annual expenses of the combined corporate are expected to drop several million dollars, while products and features will be added. The increased scale will create additional opportunities, said the corporates. 

The combined corporate will conduct business in 10 core states, providing investment, financial, lending and correspondent services to more than 1,400 member-owner credit unions. Headquartered in Warrenville, Ill., Alloya also will conduct major operations from offices in Southfield, Mich., and Albany, N.Y.

For more information use the link.

Potential Board Chosen For Proposed Cornerstone League

 Permanent link
FARMERS BRANCH, Texas (4/5/13)--The proposed Cornerstone Credit Union League, which would consolidate the Texas Credit Union League, the Arkansas Credit Union League and the Credit Union Association of Oklahoma, Thursday announced its planned board of directors.

Members of the board include:

Southeast Texas Region 1:

  • Less than $50 million in assets: James S. Tuggle, Transtar FCU, Houston;
  • $50 million to $250 million: Kenny Harrington, MemberSource CU, Houston; and
  • More than $250 million: Paul Withey, Texas Bay Area CU, Houston.
South Central Texas Region 2:

  • Less than $50 in assets: Carol Murray, Express-News FCU, San Antonio;
  • $50 million to $250 million: JoBetsy Tyler, First Central CU, Waco; and
  • More than $250: Paul A. Trylko, Amplify FCU, Austin.
West Texas Region 3:

  • Less than $50 million in assets: Nancy M. Croix Stroud, First Class American CU, Fort Worth;
  • $50 million to $250 million: Robert Peterson, One Source FCU, El Paso; and
  • More than $250 million: James L. Boyd, Abilene (Texas) Teachers FCU.
Oklahoma Region 4:

  • Less than $50 million in assets: Jason Boesch, Oklahoma RE&T Employees CU, Oklahoma City;
  • $50 million to $500 million: Genia Wilson, Oklahoma Central CU, Tulsa; and
  • More than $500 million: Michael Kloiber, Tinker FCU, Oklahoma City.
Arkansas Region 5:

  • Less than $35 million in assets: Windy Campbell, Electric Cooperatives FCU, Little Rock;
  • $35 million to $100 million: Dwayne Ashcraft, Arkansas Superior FCU, Warren; and
  • More than $100 million: Allen Brown, Mil-Way FCU, Texarkana.
Northeast Texas Region 6:

  • Less than $50 million in assets: Z. Suzanne Chism, Texas Health Resources CU, Dallas;
  • $50 million to $250 million: Kay Stewart, North East Texas CU, Lone Star; and
  • More than $250 million: Jim Brisendine, Resource One CU, Dallas.
Members of the Texas Credit Union League voted 109-5 in favor of a single cooperative organization on Wednesday.

Member credit unions of the Arkansas league will vote on the measure April 11. The Oklahoma association's members' vote will be during its annual conference May 13-15. Delegates voting from all three states must vote yes on the measure for it to become official.