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Australia deposit insurance to drop to 250K in Feb.

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CANBERRA, Australia (9/13/11)--Australia's government has extended the time its deposit guarantee covers credit union and bank deposits up to $1 million by four months--to February, at which time a new permanent cap of $250,000 (US$288,000) per person per financial institution will take effect. The $1 million cap, which Australia's government introduced as an emergency measure to help smaller financial institutions weather the global financial crisis that hit three years ago, had been set to expire in October (The Age Sept. 12). It had been under review since May. Treasurer Wayne Swan noted that even at the new cap, the plan still would protect savings held in 99% of deposit accounts in Australian-licensed credit unions, banks and building societies, and it would protect 82% of the value of those deposits. A cap of $100,000 would not be unusually low and would cover 97% of accounts by number and 65% by value, said a Treasury paper released in May. Australia's deposit cap is less than the U.S. deposit insurance limit, but more than double programs in Japan and Canada. The change also will provide longer protection for existing term deposits, which will be protected at the $1 million level until Dec. 31, 2012. After that, the $250,000 cap will apply. The new plan will not apply to deposits sitting in branches of Australia financial institutions overseas but will apply to deposits held by foreign banks that hold an Australia-based banking license.

Speakers set for this weeks NASCUS state summit

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CHICAGO (9/13/11)--The National Association of State Credit Union Supervisors (NASCUS) hosts credit union system leaders, state and federal regulators and dual chartering supporters at its annual State System Summit in Chicago Wednesday through Friday. Illinois Gov. Pat Quinn will address the group during a luncheon on Thursday. Speakers also will include:
* Debbie Matz, chairman of the National Credit Union Administration (NCUA); * Michael Fryzel, NCUA Board member; * Steve Antonakes of the Consumer Financial Protection Bureau; * State regulators Gavin Gee of Idaho, Bill Haraf of California, Ed Leary of Utah, and Roger Little of Michigan (retired); * Jeff Post, CEO of CUNA Mutual Group; and * Bill Klewin, CUNA Mutual compliance expert.
"The discussions at our summit will focus on how regulators and credit unions can continue to operate and to thrive in this increasingly complex economic environment," said NASCUS President/CEO Mary Martha Fortney, who indicated participants would discuss ideas on "how regulators and credit unions can work together to preserve safety and soundness and promote innovation." Other topics include economic recovery, the state of credit union examination, capital reform, consumer protection, systemic risk and how credit unions are performing in today's challenging economy. State regulators and NCUA will also meet for their annual Interagency Dialogue on Friday, and the NASCUS Credit Union Advisory Council will conduct an issues briefing on topics such as enterprise risk management and lessons learned from credit union failures. The week will close with NASCUS' Illinois Directors College, focusing on Illinois credit union directors' understanding of statutory, fiduciary and regulatory responsibilities. NASCUS will present its Pierre Jay Award on Wednesday. Its business meetings began Monday and its committees meet today.

St. Louis CUs outshine area banks on loans

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ST. LOUIS (9/13/11)--In contrast to area banks, St. Louis credit unions have increased the amount of loans issued during the past two-and-a-half years. As of June 30, there were 44 St. Louis credit unions that had issued $3.46 billion in outstanding loans--$325 million and 10.3% more than loaned at the end of 2008, according to a Missouri Credit Union Association (MCUA) report (St. Louis Business Journal Sept. 9). Commercial banks based in St. Louis made 30% fewer loans during the same period--roughly $20 billion during the first half of this year, compared with $30 billion at the end of 2008, the Journal said. Eight of the 20 biggest St. Louis-area credit unions posted double-digit lending gains during the period. They include:
* Alliance CU, $185 million in assets, based in Fenton, Mo., up 30.2%; * First Community CU, $1.73 billion in assets, based in Chesterfield, Mo., up 14.5%; and * Anheuser-Busch Employees CU, $1.31 billion assets, based in St. Louis, up 10.1%.
Although St. Louis bankers admit their lending is down, they say it is because of regulatory restrictions and a lack of demand, rather than an unwillingness of banks to make loans, the Journal reported. Banks are often repeating the “mantra” of regulatory tightening and lack of demand, while in reality they are worried about profitability, Mike Beall, president/CEO of the MCUA, told the Journal.

Some Massachusetts CUs close to MBL cap cutoff

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BOSTON (9/13/11)--Some Massachusetts credit unions about to hit their member business lending (MBL) caps are looking to pending federal legislation to raise the cap limit to allow them to lend more to small businesses. Digital FCU, Marlborough; Webster First FCU, Worcester; and Millbury (Mass.) FCU are all close to their caps (Worcester Business Journal Sept. 11). The Credit Union National Association (CUNA) and credit unions are pressing Congress to increase credit unions’ MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said. CUNA and credit unions also have urged President Barack Obama to include credit unions in the federal jobs bill he was expected to release last night. Credit unions don’t want to have to cut off funding to small businesses or turn businesses away just because of the low cap ceiling, Daniel Egan, president of the Massachusetts Credit Union League, told the Journal. One credit union said its lending staff calculates its loan-to-assets ratio every day to make certain it doesn’t exceed the cap. Several credit union leaders and industry executives testified in favor of the cap increase before the Senate Banking Committee this past summer.

Two Maryland CUs to merge

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LAUREL, Md. (9/13/11)—The National Credit Union Administration has approved the merger between Market USA FCU, with $92 million in assets, Laurel, Md., and National Capital FCU, $7 million in assets, Landover, Md., with Market USA continuing as the ongoing financial institution. When the merger is finalized at the end of the month, Market USA will have nearly nearly 22,000 members (Washington Business Journalvia The Washington Post). It is the second merger of two Washington-area credit unions in less than a month. Last month, Apple FCU, Fairfax, Va., absorbed Synergy One FCU, Manassas, Va. to create a $1.35 billion asset institution (News Now Aug. 16).

Texas experts CUs cant ignore growing Hispanic market

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FARMERS BRANCH, Texas (9/13/11)--Texas credit unions need to be aware of the evolving nature of the state’s population--especially Hispanics--to effectively meet the needs of a more diverse community, Texas demographer Lloyd Potter told credit union leaders at the Texas Credit Union League’s (TCUL) Leadership Conference & Expo last week in San Antonio. Texas’ population increased 4.3 million since the 2000 census, to 25.1 million, Potter said. Roughly 90% of that growth came in counties around the major urban centers, census data shows. Of that 4.3 million, 2.8 million--65%--are Hispanic, Potter said (LoneStar Leaguer Sept. 12). “Certainly a number of those are young children, and the Hispanic population is younger, so mortality rates are low, many are in their child-bearing years and fertility rates are higher,” Potter said. Sometime in the next five to 10 years, there will be more people of Hispanic descent in Texas than there are non-Hispanic whites, he said. “If you look at kids 18 and younger, there are already more Hispanics than non-Hispanic whites,” Potter said. “And the rate of natural increase [through births] in the non-Hispanic white population isn’t even at replacement value.” “Texas is a Hispanic state, and businesses have to embrace this market if they want to survive,” Potter continued. “Without question, the opportunity is there.” Warren Morrow, president/CEO of Iowa-based Coopera Consulting, told the attendees credit unions may be reluctant to serve this market, because they perceive:
* Financial risk; * Compliance risks; and * Reputational risks--not knowing what to do, where to start; how to do it.
The Hispanic Opportunity Navigator (HON), an assessment tool developed by Coopera Consulting that provides credit unions a customized roadmap for serving the Hispanic community, is helping credit unions be successful, Morrow explained. TCUL partnered with Coopera Consulting in 2009, to make the HON available to all Texas credit unions. Before Texas credit unions can earn TCUL’s Juntos Avanzamos (Together We Advance) Hispanic outreach designation, they must complete the HON. Through the Richard L. Ensweiler Hispanic outreach fund, TCUL provides Texas credit unions grants to help cover the cost of the HON.

Second-quarter delinquencies drop 22 at Kansas CUs

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TOPEKA, Kan. (9/13/11)--Loan delinquencies fell 22% at Kansas state-chartered credit unions during the second quarter, compared with delinquencies during the same time last year, according to the Kansas Department of Credit Unions (KDCU). Delinquencies dropped 22% to $27.7 million from $36.6 million in second quarter 2010. Assets and loans grew at 80 state-chartered credit unions, according to the second-quarter 2011 report from the KDCU. Total assets increased to $4.19 billion from $3.89 billion in second-quarter 2010, a nearly 8% increase. Total loans rose nearly 6% to $2.77 billion from $2.62 billion in second quarter 2010. The average net-worth- to-tota-assets ratio for Kansas state-chartered credit unions was 10.76% as of June 30, compared to a ratio of 10.60% as of March 31 and a ratio of 10.69% as of June 30, 2010.

Robyn Young elected to CUANY board

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ALBANY, N.Y. (9/13/11)--Robyn Young, CEO of Great Erie FCU, has been elected to the Credit Union Association of New York’s Board of Directors. Young joined $58 million asset Great Erie FCU, Orchard Park, N.Y., as chief financial officer in 2003 and was promoted to CEO a year later. Prior to joining Great Erie FCU, Young was with Riverside CU, Buffalo. She also serves as treasurer of the association’s Buffalo Chapter. Young serves as a trustee for the New York Credit Union Foundation and is active in several community organizations.

PCUA CUs recovering from floods

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HARRISBURG, Pa. (9/13/11)--Pennsylvania credit unions continue to recover from flooding from heavy rains caused by Tropical Storm Lee. Ten to 20 inches of rain fell throughout the Middle Atlantic states last week, flooding parts of Maryland, Pennsylvania, New Jersey and New York. The Pennsylvania Credit Union Association (PCUA) closed at noon on Thursday and remained closed on Friday, as flooded roads made the office inaccessible. The association reopened Monday but did not have phone or fax service (Life is HighwaySept. 12). Among the Pennsylvania credit unions affected by the flooding, according to PCUA:
* Belco Community CU, Harrisburg, tweeted Friday that two branches in Harrisburg were closed due to flooding. * Pennsylvania State Employees CU, Harrisburg, alerted members via e-mail that it had to temporarily close its corporate location and Strawberry Square office in Harrisburg due to flooding. * Hershey FCU, Hummelstown, closed its Annville office for repairs due to flood damage. * Choice One Community FCU’s main and waterfront offices will be closed until further notice after the Susquehanna River rose more than 42 feet in Wilkes-Barre, beating its record crest from 1972. The Wilkes-Barre-based credit union also had to cancel its Member Appreciation Day scheduled for Sunday. * Cross Valley FCU, Wilkes-Barre, closed three branches as a result of flooding, but announced that all branches would open Monday. The credit union is collecting donated clean-up supplies for the American Red Cross. * Service 1st FCU, Danville, closed early Wednesday and remained closed Thursday, but all branches were open Friday. For some time on Thursday, telecommunications outages in the area affected some of the credit union’s ATMs and its teller-phone service.

CU System briefs (09/12/2011)

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* SPARKS, Nev. (9/13/11)--Sparks, Nev., police are looking for two men in pickup trucks who stole an ATM from Carson City, Nev.-based Greater Nevada CU early Sunday. Police received a call at 5 a.m. Sunday that someone was destroying the ATM and using a backhoe to load it into the back of a pickup truck. Three hours later, hunters in the woods discovered two suspects trying to gain access to the ATM. The hunters left the area and called police. Police arrived as two trucks left the scene. The ATM was recovered but it was not known if any money was stolen from it (KOLOTV.com Sept. 11 and The Republic Sept. 12) … * SEATTLE (9/13/11)--Three Seattle men have been charged with skimming more than half a million dollars from cash machines in two separate conspiracies that involved placing skimming equipment on ATMs or access doors and using small cameras to record personal identification numbers (PINs). Police believe Beneyam Asrat G-Sellassie, 22, who is charged with possessing counterfeit and unauthorized access devices is linked to more than 20 incidents in Washington, Oregon, California and Nevada that compromised up about 1,800 accounts. Roughly 573 people suffered losses exceeding $394,000. Ionut Buzbuchi, 55, Rendon, and Mihai Eleckes, 35, of Issaquah are charged with bank fraud related to skimming activity in 2009 in Washington, Idaho and Arizona. The ring allegedly targeted BECU, Watermark and First Tech CUs, as well as Chase Bank. Losses related to those incidents totaled more than $160,000 so far (PNWlocalnews.com Sept. 8) … * TOPEKA, Kan. (9/13/11)--Five Topeka, Kan., residents have been charged with conspiring to defraud Topeka banks and credit unions of more than $400,000 (Targeted News Service Sept. 7). Charged in the scheme are Maqsood Baloch, 31; Amanda Rene Baloch, 26; Irfan Khan, 30; Junaid Iqbal, 30; and Kanwal Baloch, 22. All but Amanda Baloch are natives of Pakistan. According to court records, the five allegedly represented themselves as owners and operators of gas stations, convenience stores and smoke shops in Topeka and Osage City. They allegedly set up accounts at Topeka financial institutions--including Educational CU--and allegedly deposited insufficient funds checks and immediately withdrew or transferred funds before the fraud was discovered. They also are charged with making e-payments using false account numbers and accounts with insufficient funds … * LANSING, Mich. (9/13/11)--The Michigan Credit Union League (MCUL) & Affiliates presented a check for more than $100,071 to Children's Miracle Network Hospitals, through Credit Unions for Kids. Accepting the check on behalf of four hospitals in Michigan was Sparrow Hospital in Lansing (Michigan Monitor Sept. 12). Funds were raised through a charity golf outing, live auctions and silent auction at the 2011 MCUL Annual Convention and Expo in May. Credit unions and staff donated more than $71,000 for children's hospitals in Michigan; candy bar sales brought $14,243 more; and the CO-OP Services Miracle Match Program matched more than $14,000. Funds went to Beaumont Hospital, Royal Oak; DeVos Children's Hospital, Grand Rapids; Hurley Medical Center, Flint; and Sparrow. From left: Stella Cash, interim executive director, the Sparrow Foundation; Maureen Lafrinere, MCUL & Affiliates; Dr. Stephen Guertin; and Joy Wiseman, Sparrow's director of development for pediatrics and Children's Miracle Network Hospitals. (Photo provided by the Michigan Credit Union League) …

ASI assesses another special deposit premium at 15 bp

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DUBLIN, Ohio (9/13/11)--Private share insurer American Mutual Share Insurance Corp. (ASI) will assess a special premium for 2011 in the amount of 15 basis points, or 15% of 1% of total shares, ASI's Board of Directors announced last week. The premium will be assessed of all primary insured credit unions of record with the company as of Sept. 30, 2011 and based on total shares reported as of June 30. Subject to final regulatory approvals, the Special Premium Assessment is expected to be billed on or about Sept. 30. The assessment does not apply to excess share insurance policyholder credit unions insured by Excess Share Insurance Corp. (ESI) or ASI. "Lower yields on our high-quality government bond portfolio and a hesitant economic recovery have strained our earnings, while weaknesses in a small number of member credit unions in select markets have required a more aggressive posture when funding our loss reserves," said ASI President/CEO Dennis Adams. "The Board of Directors has closely monitored ASI's earnings, reserves and equity throughout the year, and has arrived at this difficult decision only after long deliberation and consideration of input from the company's actuaries, member credit unions and ASI's Primary Insured Credit Union Advisory Council," Adams said. The council is comprised of 20 CEOs from primary insured credit unions in each of ASI's nine states of operation. ASI made its first-ever special premium assessment in January 2010 after some losses at a few member credit unions. That assessment was also 15 bp (News Now Dec. 30, 2009). ASI is a credit union-owned share guaranty corporate based in Dublin, Ohio. It insures savings of credit union members up to $250,000 per individual member account and insures 146 state-chartered credit unions in nine states.