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NCUA CU member saving growth consistent

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ALEXANDRIA, Va. (8/21/08)—Federal credit union assets, loans, shares and membership showed consistent growth through the first sixth months of 2008, the National Credit Union Administration (NCUA) reported Wednesday. The NCUA, which based its assessment on call report data submitted by the nation’s 7,972 federally insured credit unions, said membership grew to nearly 88 million during that period. Also, bucking the recent trend, savings growth outpaced lending in the first six months of the year: Savings grew a significant 7%, lending grew 3.7 %, and assets increased 6.5 % from January through June. “Although current mortgage and credit markets continue to cause fluctuations in the financial sector, the overall fiscal condition of federally insured credit unions remains stable,” said NCUA Chairman Michael E. Fryzel in a release. He added that first mortgage real estate loans grew by 10.1%, “illustrating that credit unions continue to meet their members’ mortgage loan needs.” Details of major balance sheet categories included:
* Assets increased 6.5% to $802.5 billion from $753.4 billion; * Loans increased 3.7% to $546.4 billion from $526.9 billion; * Investments increased 17.3% to $167.0 billion from $142.5 billion; * The 7% increase brought shares to $676.9 billion from $632.4 billion; * Net worth increased 5.62% to $88.6 billion from $86.1 billion; and * Membership increased 1.3% to 87.9 million members.
The NCUA also reported that the loan-to-share ratio was 80.72%. With the exception of declines in new automobile and other unsecured loans and lines of credit, all major loan categories grew. In addition to a 10.1% increase in first mortgage real estate loans, which represent $198.1 billion, other types of real estate loans reported 1.7% growth to $92.8 billion, used automobile loans grew 3.3% to $92.0 billion, unsecured credit card loans grew 1.5% to $30.6 billion, and all other loans/lines of credit grew to $25.6 billion. Major share accounts grew across the board in the first six months of 2008. Money market shares showed the greatest expansion with a 13.9% increase to $126.6 billion, share certificates grew 2.9% to $222.3 billion, while IRA/KEOGH accounts grew 7% to $60.9 billion. Share drafts grew 6.2% to $75.3 billion and regular shares grew 8% to $182.7 billion. The loan delinquency ratio increased 4 basis points, up from .93% to .97%, and the net charge-off ratio increased from 0.51% to 0.71% during the first six months of 2008. The return-on-average assets ratio declined from 0.64 percent to 0.52 percent primarily due to increased funds set aside for loan and lease losses. With savings growth outpacing loan growth in 2008, the loan-to-share ratio declined to 80.72% from the year-end level of 83.32%. Use the resource link below for more details of the mid-year 2008 data.

IRS issues instructions for new Form 990

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WASHINGTON (8/21/08)--The Internal Revenue Service (IRS) Tuesday released revised instructions that will be needed by tax-exempt organizations to fill out the tax agency’s redesigned Form 990. The new IRS form, Return of Organization Exempt from Income Tax, is effective for the 2008 tax year, for returns filed in 2009. State-chartered credit unions are required to file Form 990 with the IRS annually, although a few states still permit group 990 filings. Federal credit unions are not required to file, since they are not subject to unrelated business income taxes. The new instructions are more comprehensive than earlier ones and have been modified to reflect the new format of Form 990. The Credit Union National Association is currently executing an in-depth review of the instructions to see how they will affect credit unions. CUNA had expressed concern about that the changes to the instructions for filing the IRS form when they were proposed. CUNA warned the new form, when used to report the pay of executives at state-chartered credit unions, could result in filers reporting "inflated figures" that do not reflect true compensation. Use the resource link below to access the IRS instructions.

Changes may be needed in CU availability schedules

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WASHINGTON (8/21/08)—Credit unions affected by changes in the Federal Reserve’s check processing operations in the fourth district may need to amend their availability schedules and related disclosures and provide their members with notice of these changes. In a final rule analysis, the Credit Union National Association (CUNA) reminds credit unions that the Fed’s Cincinnati branch office of the Federal Reserve Bank of Cleveland no longer will process checks as of Oct. 18. Financial institutions currently served by the Cincinnati branch will be reassigned to the head office of the Federal Reserve Bank of Cleveland. The consolidation, affected by amending Appendix A of the Fed’s Regulation CC, is one step in the Fed’s overall plan to reduce the number of locations at which they process checks. CUNA asks credit unions to be aware that:
* When the changes are implemented, some checks deposited in the Fourth District that are currently nonlocal checks will become local checks and subject to shorter permissible hold periods. * Regulation CC requires that financial institutions notify accountholders within 30 days after implementing a change that improves the availability of funds. * Credit unions that are affected may need to amend their availability schedules and related disclosures and provide their members with notice of these changes.
Read the CUNA analysis using the link below.

CU-supporter Tubbs Jones dies after brain hemorrhage

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WASHINGTON (8/21/08)—Rep. Stephanie Tubbs Jones, a co-sponsor of the Credit
Click to view larger image U.S. Rep. Stephanie Tubbs Jones (D-Ohio) defends credit unions during a Nov. 3, 2005 House Ways and Means Committee hearing on the credit union tax exemption. (Photo provided by CUNA)
Union Regulatory Improvements Act (CURIA, H.R. 1537) and longtime credit union supporter, died yesterday evening after suffering a brain hemorrhage. CBS News reported early in the day that Tubbs Jones was brought to Huron Hospital in Cleveland Tuesday evening after police discovered her in her car. At that time news stories were relating that the congresswoman’s condition was grave and some mistakenly reported her death. However, at 6:40 p.m. ET, Tubbs Jones’ family released a statement from the hospital saying their loved one had died at 6:12 p.m. ET. The Ohio Democrat, 58, and in her fifth term, was first elected to the U.S. House of Representatives in 1998. She was scheduled to be a superdelegate at next week's Democratic National Convention in Denver, and was one of Sen. Hillary Clinton's (D-N.Y.) biggest boosters during the primaries, prior to throwing her support to Sen. Barack Obama (D-Ill.) in June. Credit Union National Association (CUNA) President/CEO Dan Mica said CUNA and the nation's credit unions were deeply saddened to learn of Congresswoman Stephanie Tubbs Jones's untimely death. "We worked most closely with her as a cosponsor of CURIA and during her service on the House Ways and Means Committee, where she always had an open-door policy and expressed appreciation for all credit unions to do improve their members' financial well being," said Mica. "This was only fitting in that improving the well being of her constituents was a motivating force for Rep. Tubbs Jones throughout her tenure in Congress." Mica said Tubbs Jones was a skilled legislator, a good friend, and the credit union community will miss her. The Ohio CU League (OCUL) issued a statement remembering her life-long connection with credit unions. John Florian, OCUL vice president of government affairs, said the congresswoman had become one of credit unions’ strongest allies on Capitol Hill during her time in office. Florian added: “Tubbs Jones first showed her support of credit unions while serving on the House Financial Services Committee and, more recently, as a member of the Ways and Means Committee, where she actively worked to maintain the federal tax exempt status for credit unions. During her time in Congress, she consistently voted to support credit unions, and was an early sponsor of CURIA each time the bill was introduced. “Her strong credit union support was rooted in her life-long connections with credit unions located in inner-city Cleveland, and she counted credit union leaders, such as Rita Haynes, CEO of Faith Community United CU, as personal friends. “Ultimately, Congresswoman Tubbs Jones’ passing has monumental significance. Her support of credit unions was unwavering, but that support was simply one manifestation of a compassionate and generous heart that touched her colleagues in Congress, her hometown community of Cleveland, and everyone that was fortunate enough to be graced by her presence.”

Inside Washington (08/20/2008)

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* WASHINGTON (8/21/08)--The Federal Deposit Insurance Corp. (FDIC) Wednesdsay announced a plan to help homeowners with mortgages from IndyMac avoid foreclosure. The failed bank has about 740,000 loans that it owns or services for others (Reuters Aug. 20). Eligible borrowers must be seriously delinquent or in default. The modifications, which will be capped at a permanent 6.5%, apply to primary residences only. The cost of the loan modification program is not known, but the FDIC is required by law to take the lowest-cost approach. If modification costs are higher than foreclosure costs, the agency will have to foreclose on the home, she said ... * WASHINGTON (8/21/08)--Next week, the Securities and Exchange Commission (SEC) will propose rules to curb short-sale stock manipulation, SEC Chairman Christopher Cox said (American Banker Aug. 20). The commission already has implemented a temporary measure to stop traders from driving down stocks from Fannie Mae, Freddie Mac and 17 other companies. The measure expired Aug. 12. The SEC also could consider rules to end short-selling in all companies, Cox noted ...