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Court orders sale of CU National Mortgage servicing

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NEWARK, N.J. (5/4/09)--A U.S. Bankruptcy Court order in New Jersey Thursday authorized the sale of assets related to mortgage servicing rights held by Pine Brook, N.J.-based CU National Mortgage and parent company, U.S. Mortgage Corp., to Symbionce Financing Solutions LLC. Symbionce, whose address is a post office box in Roselle Park, N.J., was one of two bidders for purchasing servicing rights out of a market of 23 potential bidders, according to documents filed with the court. The documents list Ann South, CEO of Novartis FCU, East Hanover, N.J., as managing owner of Symbionce. A key element of the purchasing agreement is that Symbionce will receive the assets "free and clear" and not be liable for any liens, claims, interests and/or encumbrances related to the servicing rights sold. Novartis is one of four credit unions named in the court order as exercising their right of first refusal with the mortgage companies. Judge Rosemary Gambardella said the court would honor that right and that the four--which also included Oakland Municipal CU of Oakland, Calif.; Energy Capital FCU of Houston, Texas; and Piedmont Advantage CU of Winston-Salem, N.C.--would pay the mortgage company debtors what they owed on their servicing agreements as of the court date. Objections to the sale were filed by Suffolk FCU, Medford, N.Y.; TCT FCU, Ballston Spa, N.Y.; Treasury Department FCU, Washington, D.C.; First Florida CU, Jacksonville, Fla.; and Educational Systems FCU, Greenbelt, Md. U.S. Mortgage and CU National filed for Chapter 11 bankruptcy Feb. 23 in the Newark court, listing more than $200 million in debts to Fannie Mae and 19 credit unions, among others (News Now March 2). The bankruptcy set off a flurry of lawsuits, with credit unions such as Dover, N.J.-based Picatinny FCU alleging in a court petition that the company sold $14 million of the credit union's mortgage loans without authorization to Fannie Mae. The court ordered the mortgage company to turn over all funds belonging to the credit union and to transfer mortgages it had been servicing to Picatinny's new servicer (News Now March 24). Among the top 20 creditors with the largest unsecured claims against CU National are 19 credit unions from New Jersey, New York, District of Columbia, Maryland, North Carolina, Florida and California. Nearly 300 creditors were listed in the bankruptcy petition's accompanying papers.

Members at R.I.-based CU OK bank charter

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CRANSTON, R.I. (5/4/09)--Members of a Cranston, R.I.-based credit union approved its plan to convert from a credit union charter to a mutual savings bank at a membership meeting Wednesday night. Nearly 80% of members who voted approved the conversion of Coastway CU (Providence Journal May 1). The $300 million has 30,000 members. About 6,000 members voted. The next step is to submit the election results to the National Credit Union Administration and the state Division of Banking. If approved, the conversion could come as early as three to four months, said the credit union. It will change its name to Coastway Community Bank. The credit union said it is up against its business lending cap and will be able to expand business lending as a bank. Analysts have estimated that as many as 25 credit unions may be considering charter changes (US Banker May 1). That compares with eight credit unions that switched charters in the past five years. They attribute the increase to the mortgage market meltdown and the impact on the bottom line of recapitalizing corporate credit unions. Of the 34 credit unions that have converted since 1995, 27 have either gone public or merged with other banks.

Top 10 INews NowI stories for April

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MADISON, Wis. (5/4/09)--Here are the Top 10 News Now stories most requested by readers during April. Use the link to review the entire story online. 10. NCUA advisory addresses changes in Corporate CU Share Guarantee Program ALEXANDRIA, Va. (4/27/09)--The National Credit Union Administration (NCUA) Board Friday issued another media advisory to provide information on recent changes to the Temporary Corporate Credit Union Share Guarantee Program. 9. Senate card bill includes NCUA emergency borrowing WASHINGTON (4/1/09)--Voting 12 to 11 in favor of a credit card best practices bill, the Senate Banking Committee passed legislation Tuesday that included consideration of amendments important to credit unions, including creating National Credit Union Administration (NCUA) emergency lending authority. 8. NCUA releases summary of PIMCO report ALEXANDRIA, Va. (4/20/09)--The National Credit Union Administration (NCUA) released a summary of the analysis of the Pacific Investment Management Company LLC (PIMCO) on the residential mortgage-backed securities held by corporate credit unions Friday. 7. NCUA memo guides on delaying NCUSIF write-downs WASHINGTON (4/7/09)--In a memo Friday to regional directors and examiners, shared with the Credit Union National Association (CUNA), the National Credit Union Administration (NCUA) is providing guidance to field staff on an accounting bulletin (AB 09-02) released earlier in the week addressing corporate credit union issues. 6. Limited services, smaller numbers among CUNA recommendations WASHINGTON (4/7/09)--A revamped corporate credit union system would be most effective if it offered limited services (leading to reduction in the number of corporates), served a national field of membership, met stronger capital requirements, and included a prescribed number of "outside directors" who could "contribute diverse experiences" to a corporate's board, the Credit Union National Association (CUNA) has written in a comment letter to the National Credit Union Administration (NCUA). 5. NCUA reiterates: Flexible stance on impairment accounting WASHINGTON (4/2/09)--The National Credit Union Administration (NCUA) intends to issue an accounting bulletin stating the agency will be flexible about when a credit union books the cost of the premium being assessed to replenish the National Credit Union Share Insurance Fund (NCUSIF). 4. FASB acts on mark-to-market, OTTI WASHINGTON (4/3/09)--The Financial Accounting Standards Board (FASB) Thursday adopted rule changes on mark-to-market accounting and on treatment of the "other-than-temporary impairment" (OTTI) of assets. 3. NCUA says guidance coming on 'extinguishment' ALEXANDRIA, Va. (4/16/09)--The National Credit Union Administration (NCUA) intends to issue its next accounting guidance on corporate credit union issues Friday as part of its weekly release of information on the corporate situation. 2. NCUA provides deeper info on corporate analysis ALEXANDRIA, Va. (4/13/09)—National Credit Union Administration (NCUA) Chairman Michael Fryzel Friday released a summary of the agency's analysis of the distressed securities held by U.S. Central FCU (U.S. Central) and Western Corporate FCU (WesCorp). 1. More accounting guidance sent to NCUA examiners WASHINGTON (4/10/09)--National Credit Union Administration (NCUA) examiners received additional clarification today regarding credit unions' flexibility in booking the National Credit Union Share Insurance Fund (NCUSIF) deposit impairment, according to NCUA.

CO-OP Financial Services elects board notes successes

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RANCHO CUCAMONGA, Calif. (5/4/09)--The shareholders of CO-OP Financial Services voted to re-elect board members and also noted successes at its Annual Shareholders’ Meeting April 4. Newly re-elected to serve second terms were:
* Rick Craig, president/CEO, America First FCU, Riverdale, Utah; * Terry Laudick, president/CEO, New Mexico Educators FCU, Albuquerque, N.M.; and * Patsy Van Ouwerkerk, president/CEO, Travis CU, Vacaville, Calif.
Board members who are continuing their terms:
* Douglas Allman, president/CEO, NASA FCU, Bowie, Md.; * Dianne Addington, president/CEO, Genisys CU, Auburn Hills, Mich.; * David Maus, president/CEO, Public Service CU, Denver; * Gary Oakland, president/CEO, BECU, Seattle; * J. David Osborn, president/CEO, Anheuser-Busch Employees CU, St. Louis; * Bucky Sebastian, president/CEO, GTE FCU, Tampa, Fla.; and * Gary Wolter, president/CEO, Alabama Credit Union League.
The board elected to keep its table officers unchanged. They are:
* Osborn, chairman; * Allman, vice chairman/chairman-elect; * Laudick, treasurer; and * Addington, secretary.
Osborn provided highlights of CO-OP’s successes. In 2008, CO-OP:
* Announced a record patronage distribution for the year, paying shareholders $10.8 million in cash distributions; * Grew to nearly 3,000 participating member credit unions and 26 million cardholders; * Completed more than $1.7 billion in transactions; * Mentioned surcharge-free ATM transactions reached an all-time high on Dec. 24, when transaction volume totaled 6.7 million; and * Continued as the largest credit union-owned and operated electronic funds network and processor in the country.

Michigan GAC meets amidst roller-coaster events

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LANSING, Mich. (5/4/09)--The Michigan Credit Union League’s (MCUL) Governmental Affairs Conference (GAC) was held last week amidst many legislative events that affect credit unions. Last week, MCUL staff handed an action alert to Michigan credit
Michigan State Rep. Lesia Liss (D-Warren) spoke with Jim Shereda of ARC CU, Roseville, at the Michigan Credit Union League’s Governmental Affairs Conference. (Photos provided by the Michigan Credit Union League)
unions regarding the U.S. Senate’s consideration of S. 896--a foreclosure prevention bill that has been a focus of ongoing credit union lobbying (Michigan Monitor April 29). In response to the Credit Union National Association's (CUNA) action alert issued concerning S. 896, about 20,000 contacts were generated nationally, CUNA said. In Senate version of the bill, the Senate voted down an amendment that would have authorized the mortgage “cramdown” provision--in which bankruptcy courts would be allowed to modify terms of existing mortgages so borrowers can continue making payments--that has been opposed by the credit union industry. The Senate version also could contain a manager’s amendment by U.S. Sen. Christopher Dodd (D-Conn.)--the bill’s sponsor--that would make permanent the $250,000 deposit insurance increase for the National Credit Union Share Insurance Fund and help credit unions spread out National Credit Union Administration (NCUA) premium assessment costs. The amendment has not yet been voted on--but is widely believed to have good prospects. The Senate expects to vote on the bill either today or Tuesday.
Mike Schenk, vice president of economics and statistics for the Credit Union National Association, talked about the National Credit Union Administration’s Corporate Stabilization plan and other issues affecting credit unions, at the Michigan Credit Union League’s Governmental Affairs Conference last week.
Mike Schenk, vice president of economics and statistics for the Credit Union National Association, discussed several fiscal and growth challenges facing credit unions--including the NCUA Corporate Stabilization plan and its possible consequences. Schenk told the league several difficult years are ahead for credit unions--especially if S. 896 does not pass with the amendment that spreads the NCUA premium assessment over several years. However, the good news is that there is solid evidence that credit unions have avoided “toxic” lending, and they have experienced across-the-board loan growth while bank lending has retreated, Schenk said. Also, Robert Manning, Ph.D., from the Rochester Institute of Technology, gave his presentation before the Michigan Senate Banking and Financial Institutions Committee. There, he shared findings in his continuing work on Michigan’s foreclosure crisis and pointed out the opportunity for credit unions as a solution (News Now April 30). Michigan State Sen. Wayne Kuipers (R-Holland) received the MCUL’s state lawmaker of the year award at the GAC.

State official discusses Chrysler thanks CUs

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LANSING, Mich. (5/4/09)--Michigan Lt. Gov. John Cherry discussed automaker Chrysler’s declaration of bankruptcy and also thanked credit unions for helping consumers when he spoke at the Michigan Credit Union League’s Governmental Affairs Conference (GAC) last week. Chrysler declared bankruptcy last week to buy time to create a partnership with Italian auto-maker Fiat Group SpALt 9 (Michigan Monitor April 30). “My guess is that when all is said and done, Chrysler will remain an American company,” Cherry told GAC attendees. “It will continue to manufacture cars here in Michigan, but the decision of [hedge funds refusing to help] is going to make it a bit more difficult.” Chrysler joined the Invest in America credit union loan partnership shortly after it was launched in December. The program provides access to affordable financing options and special discounts for credit union members (News Now Dec. 17). Cherry also thanked credit unions for doing their part to help consumers “realize their dreams.”

CU System briefs (05/01/2009)

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* COLUMBUS, Ind. (5/4/09)--A robbery suspect was nabbed within minutes of a holdup at the Centra CU when he casually walked past Indianapolis police with a bag containing $150,000 in stolen cash. James Edward Cole, 37, was arrested on preliminary robbery charges (Indystar.com (May 1). The incident occurred at 9 a.m. Friday when a man approached a clerk opening the credit union and complained the ATM next to the entrance didn't work. He shoved his way inside and demanded money. She gave him some, but he demanded more and shoved her to the floor. The woman screamed for help, alerting a deliveryman at a grocery store next door. He called 911. Police said Cole also was carrying a revolver … * HARRISBURG, Pa. (5/4/09)--Pennsylvania Credit Union Association's (PCUA) Credit Union Development Task Force, appointed by PCUA Chair Diana Roberts to assist credit unions with less than $10 million in assets, held its first meeting April 25 in Harrisburg (Life is a Highway April 29). The group will advise PCUA on how small credit unions can thrive and survive in the future. It also will develop measurable goals for the program and for credit unions. Chairing the task force is PCUA Director Cookie Yoder, CEO of Pittsburgh FCU. Members include: Joni Brown, CEO, Service Center for Credit Unions, Philadelphia; Tina Dolgash, CEO, Peoples Choice FCU, Wilkes-Barre; Linda Hazlett, CEO, Westco FCU, Greensburg; Linda Baginski, CEO, EC & EE Employees FCU, Erie; Jenna Kaczmarek, CEO, Community of Healthcare Employees CU, Chambersburg; John Marsh, CEO, Our Family FCU, Lancaster; and Debra Cohn, corporate account representative, Mid-Atlantic Corporate FCU … * HIGHTSTOWN, N.J. (5/4/09)--New Jersey's credit unions were represented at a New Jersey Business and Industry Association's "Meet the Decision Makers" breakfast April 15 in Jamesburg (The Weekly Exchange April 20). The event gave New Jersey Credit Union League President/CEO Paul Gentile and Director of Government Affairs Chris Abeel the opportunity to discuss pending municipal deposits legislation with the joint legislative leadership and other lawmakers and policymakers. From left are Abeel; Senate Majority Leader Steve Sweeney (D-3), who introduced the municipal deposits bill in the state Senate; and Gentile. They also talked with Senate Minority Leader Tom Kean Jr. (R-21). (Photo provided by the New Jersey Credit Union League).