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Premier CU buys Telesis after NCUA liquidation

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ALEXANDRIA, Va. (6/4/12)--Premier America CU of Chatsworth, Calif., on Friday purchased and assumed the assets of close neighbor Telesis Community CU after Telesis was liquidated by the National Credit Union Administration (NCUA).

The California Department of Financial Institutions placed Telesis into liquidation, and appointed the NCUA as liquidating agent, on Friday. Telesis was taken under conservatorship by its state regulator on March 23.

The credit union was liquidated after California credit union authorities determined it was insolvent, and could not return to operational status.

Premier currently holds $1.3 billion in assets from 64,000 members.

Premier will assume the 37,600 members and $301.3 million in assets, core facilities, and consumer loans once held by Telesis, and the NCUA noted that member shares will remain fully insured to the maximum National Credit Union Share Insurance Fund amount of $250,000.

The NCUA last week also approved the merger of Montana First CU and Horizon CU.

CUNA News Now will have more on this and other approved mergers in a roundup story this week.

Inside Washington (06/01/2012)

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  • WASHINGTON (6/4/12)--The House Financial Services Committee on Thursday passed a bill that would push back the date by which banks needed to be under $15 billion in assets to avoid the new capital requirement under the the Dodd Frank Act. The bill, sponsored by Rep. Michael Grimm (R-N.Y.), specifically benefits New York City's Emigrant Bank, which received a $2.3 billion advance from the Federal Home Loan Bank of New York during the financial crisis (American Banker June 1). The loan temporarily pushed Emigrant's total assets over $15 billion--the threshold at which banks are subject to a provision of the Dodd-Frank Act that prevents them from counting trust preferred securities as part of their Tier 1 capital. The Dodd-Frank Act set the cut-off date for the threshold as Dec. 31, 2009. The bill would push that date back by three months and allow Emigrant to avoid the restrictions …
  • WASHINGTON (6/4/12)--Jamie Dimon, JPMorgan Chase & Co.'s chairman and chief executive officer, will field questions about his company's $2 billion trading loss from the Senate Banking Committee on June 13. The committee had earlier announced Dimon would testify on June 7 (American Banker June 1) …

NCUA confirms CU assets hit 1 trillion mark

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ALEXANDRIA, Va. (6/4/12)--Consistent with numbers that were released by the Credit Union National Association (CUNA) early last month, the National Credit Union Administration (NCUA) late last week reported that the total amount of assets in the credit union system crossed the $1 trillion mark in the first quarter of 2012.

The total number of federally insured credit unions fell to 7,019 from 7,094 during the quarter, but a record 92.5 million members belonged to a credit union as of March 31, the NCUA added. Credit unions added 667,000 new members in the first quarter of 2012.

CUNA President/CEO Bill Cheney said the credit union membership growth that began in the fall of last year "seems to have a 'tail' to it, as more and more consumers are realizing the value in credit union membership. This new-member growth likely also helped propel credit unions past the milestone of $1 trillion in total assets," Cheney added.

The NCUA quarterly report showed that the credit union industry netted nearly $2.1 billion in income during the quarter, an increase of $369.6 million from the prior quarter's total. The NCUA also reported that:

  • Member total savings increased 4.7% during the quarter, totaling $866 billion;
  • Credit union investments, cash on deposit, and cash equivalents increased 11.2% during the quarter, totaling $391.6 billion; and
  • Total loans increased 0.1% during the quarter, totaling $572 billion.
Credit unions' return on assets (ROA) ratio stood at 84 basis points (bp) as of March 31, a 17-bp increase from the total reported at the end of 2011. Overall, the credit union industry's ROA ratio has grown by 66 bp since December 2009, the NCUA noted. (See related story, "CUs' annualized ROA on fastest pace since 2006," in News Now's System section.)

Net worth exceeded $100 billion during the same quarter, the agency reported, and both of these marks represent important milestones for the credit union industry, NCUA Chairman Debbie Matz said.

Share drafts, regular shares, and money market funds held at credit unions increased by 11.4%, 8.3%, and 3.8%, respectively, the NCUA reported. Credit unions' overall delinquency ratio dropped to 1.44% during the quarter, a 16-bp decline from the previous quarter's total, and the net charge-off ratio fell 13 bp, totaling 0.78%.

Loan growth at credit unions continued for the fourth straight quarter, increasing by $532.5 million to total $572 billion at the end of the quarter. Member business lending at credit unions increased by 1.4% during the quarter, the NCUA added.

"By year's end, we expect credit unions will have grown even stronger, as lending picks up, return on assets remains steady and net worth pushes even higher," Cheney said.

CUNA to CFPB Consider exempting CUs in rulemaking

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WASHINGTON (6/4/12)--The Credit Union National Association (CUNA) urged the Consumer Financial Protection Bureau (CFPB) to consider exempting credit unions from agency rulemakings, and to address remittance transfer, overdraft protection and mortgage and mortgage-related regulations as it looks for ways to streamline existing financial rules.

"While the CFPB has been tasked by Congress to implement 18 laws and assume other duties, the agency was also given broad authority to minimize the compliance burdens of its rules on entities such as credit unions…The role of the CFPB in alleviating compliance burdens for institutions that are already heavily regulated is as important as its responsibility to develop and implement regulations for entities that, prior to the establishment of the CFPB, escaped meaningful government oversight," CUNA Deputy General Counsel Mary Dunn said in a Friday comment letter.

The letter focused on concerns in three major areas: remittance transfers, overdraft protection, and mortgage and mortgage-related regulations.

"Since the inception of the CFPB, CUNA has strongly supported the objective of protecting consumers from unscrupulous service providers but credit unions are more concerned than ever that the agency will impose an endless range of new requirements and data collection responsibilities on the most scrupulous service providers in the marketplace: credit unions," the letter said.

CUNA suggested the CFPB could also minimize all reporting requirements under Dodd-Frank, including those regarding gender, minority status, credit scores, points and fees, for smaller institutions.

The CFPB also should do a better job of estimating the amount of funds and resources that credit unions and other institutions will need to dedicate to comply with new rules, CUNA said in its letter. Any new proposals or final regulations should include executive summaries and charts that demonstrate how the proposed changes would impact existing rules. The CFPB should also lay out how its rules have been changed between the proposed and final stages.

Financial institutions should be given the time needed to comply with any regulatory changes that are approved by the CFPB, and the CFPB should clearly delineate between a rule's effective date and any mandatory compliance date(s), CUNA said.

The agency should also create a standard review period for all rulemakings, the letter added.

For the full CUNA comment letter, use the resource link.

CUNA seeks CU comment on ACH data proposal

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WASHINGTON (6/4/12)--NACHA-The Electronic Payments Association has issued a new proposal that would improve the security and integrity of some forms of automated clearing house (ACH) data, and the Credit Union National Association (CUNA) has asked credit unions to weigh in on the proposal in a new comment call.

NACHA's ACH security framework proposal would require credit unions and other financial institutions and groups that take part in ACH transactions to protect the confidentiality and integrity of certain sensitive consumer information, and to prevent third parties from accessing that information.

Credit unions and others that handle ACH data also would need to verify, as part of their yearly ACH Rules Compliance Audits, that they have established, implemented, and updated data security policies, procedures and systems to comply with the proposed security requirements under the NACHA proposal.

The proposal would require originating depository financial institutions (ODFI) to verify the identity of all ACH transaction originators and third-party senders, regardless of the manner in which the origination agreement was executed. Currently, this ODFI verification requirement only applies to originators or third-party senders that enter into an origination agreement via an unsecured electronic network.

The proposed NACHA rule changes are scheduled to become effective on Sept. 20, 2013.

In the comment call, CUNA asks credit unions to describe how the NACHA proposal could impact their risk management and ACH compliance procedures.

Credit unions can also comment on the proposed compliance date and how the rules could create new compliance costs.

NACHA will accept comments until June 22. Credit unions should forward their comments to CUNA by June 11.

For the full comment call, use the resource link.