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Filed on February 2, 2007–February 4, 2007, published the first business day after.
- Self-Help CU CEO Eakes to testify on predatory lending
- Examiners have rights to CU exec board minutes
- CUNA seeks comment on NCUA 2007 rule review
- CDC releases flu epidemic preparedness tips
- Inside Washington
- Expect shortage of replacement cards from breaches
- RMJ Foundation raises more than $1 million in 2006
- N. Carolina voters surveyed on CUs, 'modest means'
- Kenya CUs undergo WOCCU training on HIV/AIDS prevention
- CU robbery suspect killed in shootout with police
- Shot fired during CU robbery, suspect nabbed
- Voluntary CU supervision project underway in Uganda
- Maine league hosts freshman legislators
- Colo./Wyo. CU foundation establishes fund for victim's daughter
- CU System briefs
- Market News
- News of the Competition
- One quarter of eligible taxpayers don’t claim EITC
- eCU Technologies' 2006 revenues top $3 million
Self-Help CU CEO Eakes to testify on predatory lending
WASHINGTON (2/5/07)—Martin Eakes, CEO of Self-Help CU and the Center for Responsible Learning (CRL), both of Durham, N.C., is among those scheduled to testify at a Feb. 7 Senate Banking Committee hearing on mortgage lending practices.
The witness panel is to be comprised of both industry and private-sector interests, including two women identified only as "consumer." In addition to Eakes, The list includes:
- Harry H. Dinham, president, National Association of Mortgage Brokers;
- Hilary Shelton, executive director, National Association for the Advancement of Colored People;
- Jean Constantine-Davis, senior attorney, AARP;
- Douglas G. Duncan, senior vice president of research and business development, chief economist, Mortgage Bankers Association;
- Elouise Manuel, consumer; and
- Amy Womble, consumer.
The hearing is intended to examine predatory mortgage lending practices and their relationship to foreclosures. Senate Banking Committee Chairman Chris Dodd (D-Conn.), a 2008 presidential hopeful, has said that his panel is working on legislation to address predatory practices and noted figures indicating that foreclosures will cost homeowners as much as $164 million in lost wealth and that his panel hopes to develop solutions to help people keep their homes.
The Credit Union National Association (CUNA) supports efforts by Congress to investigate practices through which lenders structure first mortgage and home equity loans in a manner that is deceptive and disadvantageous to borrowers.
"Credit unions exist to serve their members and because of the nature of their operating intent do not engage in predatory lending practices. However, Americans should be able to go to any lender without the fear of being undone by unsavory practices," CUNA Vice President of Legislative Affairs Dean Sagar, commending the Senate hearing.
Examiners have rights to CU exec board minutes
ALEXANDRIA, Va. (2/5/07)—A Jan. 23 National Credit Union Administration (NCUA) legal opinion letter brings attention to a recent change in the law that affects credit unions' ability to withhold records based on attorney-client privilege.
The letter was prompted by an inquiry from Thomas Ellis, chairman of the board of Community Resource FCU, Lanham, N.Y. He asked whether an FCU's directors have a right to conduct "privileged and private discussions...while on the record" and then withhold minutes of these meetings from NCUA examiners.
NCUA Associate General Counsel Sheila A. Albin stated in the agency letter that the Federal Credit Union Act (FCUA) and NCUA regulations expressly provide access to all credit union records.
"The FCU Act states "[e]ach Federal credit union shall be subject to examination by, and for this purpose [NCUA supervision] shall make its books and records accessible to, any person designated by the [NCUA] Board." 12 U.S.C. §1756. NCUA regulations further provide:
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[T]he NCUA Board is authorized to examine any insured credit union . . . . Such examination may require access to all records, reports, contracts to which the credit union is a party, and information concerning the affairs of the credit union. Upon request, such documentation must be provided to the NCUA Board or its representative.
"NCUA previously permitted credit unions to withhold records covered by attorney-client privilege recognizing that courts might treat release of attorney-client privileged information to NCUA as a waiver of the privilege," Albin wrote.
"A recent statutory change establishes that submission of any information to the NCUA or any state credit union supervisor, as part of any supervisory or regulatory process, will not waive the attorney-client privilege," she added.
CUNA seeks comment on NCUA 2007 rule review
WASHINGTON (2/5/07)—The Credit Union National Association (CUNA) is seeking credit unions ideas on ways current regulations in such areas as members business lending and privacy notices could be revised to improve credit union operations and service to members.
As the National Credit Union Administration (NCUA) prepares its annual review of one-third of its regulations, CUNA is seeking comment on such things as:
- How the member business loan rule (MBL) that could be revised to further facilitate member business lending?
- Ways in which the agency's privacy regulations could be revised to alleviate the burden associated with privacy notices?
- Whether additional exemptions should fall under the agency's Regulatory Flexibility Program (RegFlex), which gives some flexibility to credit unions with the highest safety and soundess ratings of CAMEL 1 or 2, and other issues.
Earlier this month, the NCUA announced it will review the following regulations in 2007:
- 711 Management Official Interlocks;
- 712 Credit Union Service Organizations (CUSOs);
- 713 Fidelity Bond and Insurance Coverage for Federal Credit Unions;
- 714 Leasing;
- 715 Supervisory Committee Audits and Verifications;
- 716 Privacy of Consumer Financial Information;
- 717 Fair Credit Reporting;
- 721 Incidental Powers;
- 722 Appraisals;
- 723 Member Business Loans;
- 724 Trustees and Custodians of Pension Plans;
- 725 Central Liquidity Facility;
- 740 Advertising;
- 741 Requirements for Insurance;
- 742 Regulatory Flexibility Program;
- 745 Share Insurance; and,
- 747 Administrative Actions, Adjudicative Hearings, Rules of Practice, Procedure, and Investigations.
CDC releases flu epidemic preparedness tips
WASHINGTON (2/5/070—In advance of a pandemic breakout of influenza that it calls "inevitable" if not necessarily imminent, the Center for Disease Control and Prevention has released an interim planning guide to help credit unions and all other businesses mitigate the spread of diseases.
The 108-page planning guide advises employers to take such actions in the workplace as:
- Decreasing social contact though such means as telecommuting, liberal leave, and staggering work shifts;
- Increasing distances between persons;
- Modifying, postponing, or canceling selected public gatherings; and
- Modifying schedules and practices.
The guide also makes recommendations geared toward individuals, families, schools, and other organizations.
"Credit unions should not be alarmed by the government's guidance, but reassured that it is taking an early and comprehensive look at how to diminish the effect of any possible major spread of disease," said Mary Dunn, senior vice president for regulatory advocacy and deputy general counsel for the Credit Union National Association (CUNA).
"CUNA recommends that every credit unions and all employers become familiar with the practical steps everyone can take to help in any possible emergency situation.," she added.
CUNA also offers a coordinated credit union system approach to disaster preparedness. Use the resource links below for more information.
Inside Washington
- WASHINGTON (2/5/07)—Steven C. Preston., who heads the Small Business Administration (SBA) said in a speech last week that his agency has disbursed more than $5 billion in disaster loans to those whose homes and businesses were hit by the 2005 Gulf Coast hurricanes. He added that there is an additional $2 billion available. Preston said recent improvements to the SBA's disaster-lending program should do much to speed up its response time. The SBA is primarily a guaranteed lender, but also can make loans directly to disaster victims. The agency was criticized by business owners, lenders, and lawmakers for inadequate planning, scarce manpower, and a deficient computer system that impeded disaster relief after the 2005 hurricanes. Preston became administrator of the agency in June 2006. He said that the agency's backlog of disaster is down to about 25,000 borrowers. As of last July nearly 120,000 approved disaster loans had either not been disbursed or had been only partially disbursed. (American Banker Feb. 2)...
Expect shortage of replacement cards from breaches
NEW HAVEN, Conn. (2/5/07)--The recent security data breaches in New England have led to a shortage of replacement cards as card issuers--including many credit unions--hustle to reissue thousands of debit and credit cards for accounts compromised by hackers.
Normally, when credit unions and banks issue new cards, they send out the cards a couple of weeks before the card's expiration date. But December's breach at TJX Cos. led to a shortage of replacement cards, as hundreds of institutions reissued cards as a preventive measure on breach-compromised accounts, said New Haven Register Feb. 2.
Institutions that had enough stock to replace the routinely expired cards came up short when they suddenly had to reissue cards for consumers affected by the TJX breach and the Vermont State Human Services computer hacking.
As a result, some credit and debit card accountholders whose cards would have routinely expired at the end of January did not receive their new cards in time.
At least two members of Connex CU, New Haven, reported their debit cards were rejected as "expired" by ATM machines.
Connex said it ran into a shortage of cards last month as it began reissuing cards to members who might have been affected by the TJX breach. The $298 million asset credit union put in an emergency order for new cards and they were all mailed by Jan. 26, it told the Register. Members affected by the breach were notified, as were members whose cards were expiring.
In other developments:
- AmericaFirst bank of Alabama filed a class action lawsuit against TJX Tuesday to recover its cost of replacing cards and paying for fraudulent purchases, said the Register.
- TJX has hired General Dynamics Crop. and IBM Corp. to review its computer security operations and has fixed the breach (Florida Today Jan. 30).
- Vermont Gov. Jim Douglas has ordered a review of Internet security protocols used by state agencies, with March 1 as the deadline for the report.
- The Association of Vermont Credit Unions reported that an internal state report completed after the state agency hacking indicates the attack could have been avoided by applying a security patch downloaded from Microsoft but never installed (Newslines Express Feb. 2).
RMJ Foundation raises more than $1 million in 2006
RANCHO CUCAMONGA, Calif. (2/5/07)--The Biz Kid$ television program is among the financial literacy projects that will benefit from the more than $1 million raised in 2006 by the Richard Myles Johnson (RMJ) Foundation.
The foundation raised more than $500,000 for Biz Kid$, a half-hour television program on financial literacy distributed nationwide to elementary and middle school students.
RMJ Foundation also gave away more than $100,000 for scholarships and community service grants.
Debra Gannaway-Grisamer, RMJ Foundation board chairman and CEO of Norton Community CU in San Bernardino, Calif., said the foundation's 2007 goal is to foster more community service grants by encouraging credit unions to participate in youth financial literacy programs.
During 2006, the Foundation received more than $200,000 from Community Investment Fund disbursements and nearly $300,000 from credit unions. It raised more than $80,000 from its annual golf tournament, the CU Train event and Beacon Awards Gala. Another $64,000 was raised for the USA TODAY Education program.
Credit unions and organizations that provided aid for foundation fund-raising efforts include:
California and Nevada Credit Union Leagues Business Services Division; California CU; CU Direct Lending; CO-OP Financial Services; Educational ECU; Financial Service Centers Cooperative Inc.; Greater Nevada CU; KeyPoint CU; Kinecta FCU; Liberty; Mission FCU; Mt. Diablo Chapter;
Orange County's CU; Orange County Teachers FCU; Patelco CU; Premier America CU; Redwood CU; SAFE CU; San Diego/Imperial Valley Chapter; Schools FCU; Schools Financial CUl; Silver State; Schools CU; The Golden 1 CU; Travis CU; USA FCU; Ventura County CU; Wescom CU; and WesCorp FCU.
N. Carolina voters surveyed on CUs, 'modest means'
GREENSBORO, N.C. (2/5/07)--The North Carolina Credit Union League's (NCCUL) annual voter survey showed credit unions work hard to serve their members and that voters in the state overwhelming define "modest means" as working people.
The league-sponsored survey, released Jan. 29, tracks trends in regard to voters' opinions of credit unions (Weekly Update Feb. 2).
Seventy-one percent of voters surveyed said credit unions were on the right track and held a favorable view of credit unions.
"People surveyed felt credit unions for the most part did a great job and worked hard to serve their members," said Dan Schline, senior vice president of association services at the league.
Nearly half of those surveyed said they were members of a credit union, with 25% identifying the credit union as their primary financial institution. These findings are basically unchanged from the survey findings a year ago.
Two-thirds of those polled considered themselves as having "modest means." Most respondents making less than $75,000 considered themselves as having modest means. Nearly half of those earning more than $75,000 considered themselves as having modest means.
Respondents were asked to define "modest means." The one definition that respondents in all income groups overwhelmingly agreed on, said the league, was that a modest means family is a family where both parents must work to get by.
"More than 75% of people in all income groups felt working families accurately defined 'modest means,'" Schline said. "Taken with the results of the NCUA (National Credit Union Administration) report released in November, this is further proof that credit unions are meeting the directive of Congress to serve people of modest means."
The most pressing issues in the state, as identified by the voters, are illegal immigration, education and the rising cost and availability of health care.
Kenya CUs undergo WOCCU training on HIV/AIDS prevention
MADISON, Wis. (2/5/07)--A 10-day intensive training program on HIV/AIDS Prevention was recently presented to Mwalimu SACCO (credit union) leaders, volunteers and members in Nairobi, Kenya.
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| An instructor for the Kenyan peer-to-peer program shares information about HIV/AIDS prevention. (Photo provided by the World Council of Credit Unions Inc.) |
"I have learned now that we have to talk openly and frankly about the facts about HIV/AIDS with our colleagues, our students, our husbands, our boyfriends, our neighbors, our brothers and sisters, everybody," said Millicent Dahiambo, a teacher at Majengo Mixed Secondary School. "Here we learn not to be shy about the facts."
The 27 Mwalimu SACCO representatives who participated in the training are the first group of peer leaders at Mwalimu. Their next step is to select and train five credit union members to become certified as peer educators.
The Mwalimu SACCO was a natural choice to participate in the peer-to-peer education program because its membership is comprised of 45,000 secondary teachers throughout Kenya. Participants were chosen from over 400 applicants in eight regions of Kenya.
Both peer leaders and peer educators will be responsible for presenting information at schools, community events and public forums.
The U.S. Agency for International Development (USAID) provides funding for WOCCU's Cooperative Development Program.
CU robbery suspect killed in shootout with police
FRESNO, Calif. (2/5/07)--A suspect in a credit union robbery was killed in a shootout with police after a high-speed chase in a stolen car early Thursday morning.
The suspect, who was unidentified, allegedly held up a branch of United Local CU, Fresno, Calif., about 1:30 p.m. Wednesday and escaped with an undisclosed amount of money (The Fresno Bee Feb. 2).
He had entered the credit union 15 minutes earlier, said something about opening an account, and left. A suspicious teller wrote down his license plate. Police believe the same man returned a few minutes later in different clothing and a ski mask. He demanded money and fled the scene.
At 3:49 a.m. Thursday, a suspicious security guard at River Park reported a man sleeping in a parked car. Officers spotted a shotgun in the car with him, and checked the license number, which was the same as the getaway car.
The suspect woke up and drove away. During the chase, the man shot at police three times. Police did not return fire during the pursuit, which ended when a spiked strip flattened his tires.
The suspect shot at police, who fired back. Witnesses said about 20 shots were fired.
The man was pronounced dead at the scene. The six officers involved were placed on admin leave pending an investigation, which is routine procedure in shootings involving police.
Shot fired during CU robbery, suspect nabbed
NEWPORT NEWS, Va. (2/5/07)--A shot was fired during a robbery at a branch of Virginia Educators CU on Main Street in Newport News, Va., Thursday afternoon. Police later apprehended a suspect.
The robbery occurred at about 5 p.m., when a man walked into the branch, fired a shot into the air, and demanded money. Three members and six employees were in the credit union at the time, but no one was injured (WTKR.com Feb 2).
He fled with the cash, and an alert patrol sergeant noticed a man fitting the suspect's description. After a pursuit on foot, the suspect, Irvin Duncan Banks, was apprehended.
Police recovered a weapon and some money.
Banks has been charged with three counts each of robbery and use of a firearm in the commission of a felony, and one count each of possession of a firearm by a convicted felon, possession of stolen property, discharging a firearm in public, reckless handling of a firearm, and removing or altering the serial number on a firearm.
Voluntary CU supervision project underway in Uganda
MADISON, Wis. (2/5/07)--World Council of Credit Unions Inc. (WOCCU) and the Canadian Cooperative Association (CCA) visited Uganda in late January to document the early stages of their joint program, the SACCO Voluntary Supervision Project.
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| From left, John Julian, Canadian Cooperative Association; Prof. Ephraim Kamuntu, Uganda's minister of state for industry and technology; Caryn Vesperman, World Council of Credit Unions Inc.; and Fred E.G. Mwesigye, Uganda's commissioner for cooperatives. (Photo provided by the World Council of Credit Unions Inc.) |
The project also will assist Uganda's government in developing credit unions legislation and regulations.
More than 20 SACCOs applied to UCSCU to participate and others are asking when they can join the project, said John Julian, international communications and policy director, CCA.
He and Caryn Vesperman, WOCCU marketing manager, met with credit unions; UCSCU Chairman Moses Opio Ogal and General Manager Wilson Kabanda; Uganda's Minister of State for Industry and Technology Prof. Ephraim Kamuntu; and Commissioner for Cooperatives Fred E.G. Mwesigye.
About 32% of Ugandans earn less than $1 a day. Most are excluded from financial services because retail banks do not service small accounts due to the expense. One answer the group discussed was forming user-owned financial institutions or SACCOs.
The project sets up an independent department in UCSCU to supervise participating SACCOs. It will provide training on WOCCU's financial analysis software in PEARLS, adoption of auditing standards and accounting practices consistent with International Accounting Standards, and development of laws to regulate and supervise SACCOs.
"Many SACCOs recognize that meeting operational and regulatory standards will be to their benefit," said Vesperman. "They understand they can't be perceived as a 'briefcase office' that's here today and gone with the members' savings tomorrow. They know they need to be run well and responsible for their members' deposits."
Julian and Vesperman will debut a video of their visit at WOCCU's Credit Union Conference in Calgary, Canada, July 29-Aug. 1. The project is the first joint project between WOCCU and CCA in 20 years. CCA will handle in-country supervision of the project; both organizations will provide technical assistance through workshops and training.
Maine league hosts freshman legislators
AUGUSTA, Maine (2/5/07)--The Maine Credit Union League welcomed new legislators and new legislative leaders at its third Biennial Freshman Breakfast.
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| Quincy Hentzel Germann, left, director of governmental affairs for the Maine Credit Union League, welcomes Maine's new Speaker of the House Glenn Cummings. (Photo provided by the Maine Credit Union League) |
Cummings praised credit unions for serving consumers and for providing guidance on a predatory mortgage lending bill now in development.
Maine league staff presented information about issues facing credit unions in this legislative session. They also answered legislators' questions on topics that included the credit union difference and Maine's financial services industry.
Colo./Wyo. CU foundation establishes fund for victim's daughter
ARVADA, Colo. (2/5/07)--A scholarship fund established by the Credit Union Foundation of Colorado and Wyoming will benefit the daughter of a credit union employee who was recently killed outside her office.
Nine-year-old Victoria Garraus is the daughter of Heather Garraus, employed by at Colorado State Employees CU in Greeley, Colo. Heather Garraus, 37, was a supervisor who had worked in the Greeley branch since 1993.
Garraus died Jan. 23 when she was shot multiple times while leaving the branch office after the end of the business day.
Shawna Nelson, a member of the credit union, is being held without bail on first-degree murder charges in connection with the crime. Nelson apparently had an affair with Garraus' husband that ended several months ago.
Colorado State Employees CU also set up a scholarship fund to benefit Victoria Garraus.
CU System briefs
- PLANO, Texas (2/5/07)--ViewPoint Bank, formerly Community CU in Plano, Texas, has appointed a 30-year banking veteran to head its growing business banking unit. Frank J. Briggs was named senior vice president, responsible for facilitating the expansion of business banking, including business lending, treasury management and merchant services. Most recently he served as the North Texas area manager of small business banking at JPMorgan Chase. He has also held positions at Bank One. The $1.5 billion asset credit union switched to a bank charter in early 2006 (PR Newswire Feb. 1) ...
- NORTHVILLE TOWNSHIP (2/5/07)--The Michigan Credit Union League will revamp the design and content for the SAS Gazette, its quarterly publication for small asset size (SAS) credit unions. The electronic newsletter will cover subject matter based on input from members of the SAS community. The revamped publication will appear during first quarter. The league also announced that its weekly newsletter to credit unions, Michigan Monitor, is now entirely electronic ...
- SHERMAN OAKS, Calif. (2/5/07)--A member of School Employees of San Luis Obispo County (SESLOC) FCU, is the $15,000 grand prize winner in a sweepstakes offered by Autoland, a credit union auto-buying service. The winner, Betty Schoepf of San Luis Obispo, Calif., and her husband Byrle have been members of SESLOC for more than 30 years. The grand prize ended a year-long 2006 Member Exclusive Giveaway. Each month Autoland chose at random two credit union members who won either a $500 Visa gift card or a $500 Shell gift card, plus a chance at the grand prize. Autoland is repeating the sweepstakes this year (Business Wire Feb. 1) ...
- NEW HAVEN, Conn. (2/5/07)--Gerald Kruger, 48, formerly of Atlantic City, N.J., pleaded guilty last week to three counts of bank robbery at banks in Connecticut and New Jersey during November-December 2003 and acknowledged two additional robberies including the Oct. 22, 2003, robbery of Philadelphia (Pa.) FCU. Kruger faces a maximum term of 20 years in prison and up to $250,000 in fines on each count. His sentencing is set for April 18 (States News Service Jan. 30) ...
- LOUISVILLE, Ky. (2/5/07)--Patrick Gene Hopper, 29, of Kevil, Ky., pleaded guilty to illegal entry into three federal credit unions in Paducah, Ky.--two on Dec. 25, 2005, and one on Dec. 30, 2005--with intent to commit robbery and pleaded guilty to possessing a firearm for use in a robbery. Maximum penalties are a 75-year combined term of imprisonment, including a five-year consecutive mandatory minimum term in prison, fines totaling a combined maximum of $1.25 million, and five years of supervised release. He is being prosecuted under Project Backfire, a partnership of state and federal law enforcement that targets violent offenders for prosecution to the fullest extent of state and federal law (US Fed News Jan. 12) ...
Market News
MADISON, Wis. (2/5/07)
- The economy created a smaller-than-expected 111,000 jobs in January, while the unemployment rate rose to 4.6% from 4.5%, the Labor Department reported Friday. The government revised historical data on employment. The revision added 754,000 jobs to the previous estimate for the 12 months ending in March 2006--the largest revision since the department began adjusting the data in 1991. The department also reported yesterday that workers' average hourly earnings increased three cents to $17.09 in January--suggesting contained wage pressures. The employment cost index released by the Labor Department earlier last week also confirmed this trend, as inflation eroded workers' buying power last year. Real (inflation-adjusted) wages rose only 0.7% in 2006 (Bloomberg.com and Economy.com Feb. 2) ...
- The manufacturing sector lost 16,000 jobs in January, following a loss of 18,000 jobs in December, according to the Labor Department. Mild weather contributed to an increase of 22,000 construction jobs in January after a 10,000 gain the previous month. At 153 million, the civilian labor force was unchanged in January. The labor force participation rate, at 66.3%, also was unchanged. There were seven million unemployed people in January. In addition, about 1.6 million people were only marginally attached to the labor force in January--about the same as a year earlier. Such individuals wanted and were available or work and had sought employment sometime in the previous 12 months. However, they weren't counted among the unemployed because they hadn't searched for work during the four weeks prior to the employment survey. Among these marginally attached workers, there were 442,000 discouraged workers, who weren't currently looking for employment because they believed no jobs were available to them ...
- Vehicle sales stalled in January. Vehicles sold at an annual pace of 16.7 million units, the same as in December. The sales pace for all of 2006 was 16.5 million units. The U.S. brand share of sales was just 51.9% last month, only slightly above the 51.7% share for December. Foreign market share is expected to continue expanding as domestic automakers cut production. General Motors and Ford are lowering their capacity by two million units as they shut down plants. Overall, vehicle sales probably will decline to less than 16.1 million units this year as the housing-market slowdown erodes household wealth and debt burdens and interest rates continue to rise (Economy.com Feb. 2) ...
- Home sales and starts probably will begin to increase by mid-2007, according to a study by the Mortgage Bankers Association (MBA) (mbaa.org Feb. 2). Home prices are expected to rise only at low single-digit rates for the next couple of years because the housing inventory is large. The recent uptick in mortgage delinquency rates probably will peak by year-end 2007--well below those of past peaks, despite the large number of subprime loans made in recent years. Purchase mortgage originations are expected to decline 5% to $1.33 trillion this year. Refinancing originations are predicted to drop 4% to $1.06 trillion. The report notes that relatively low long-term mortgage rates will continue to benefit the housing market. The MBA said mortgage rates have remained relatively low because of the huge inflows of global capital into U.S. fixed-income markets. The MBA said these inflows are "the flip side of the large U.S. current account deficit." ...
- Consumer sentiment rose to a two-year high in January amid optimistic expectations for the economy and for higher wages (Reuters Feb. 2). The Reuters/University of Michigan Surveys of Consumers index rose to 96.9 last month--up from 91.7 in December and the highest reading since December 2004. The poll's index of current economic conditions increased to 111.3 from 108.1, while the expectations index rose to 87.6 from 81.2. However, consumers remained concerned about inflation, despite lower gasoline prices. The one-year inflation index rose to 3% from 2.9%. Slower job growth, volatile energy prices, and the end of the bonus season will undermine consumer confidence going forward, predicts Moody's Economy.com (Feb. 2). Stock prices and developments in the housing market also will be key drivers of confidence levels ...
- Factory orders surged by 2.4% in December, the third gain in the past four months, the Commerce Department reported Friday. Orders rose by 5.3% during 2006. Excluding transportation, factory orders rose 2.2% in December. Non-defense capital goods orders excluding aircraft, a proxy for future business spending, jumped 3.1% in December after a 1% decline the previous month. The inventory-to-shipments ratio, a gauge of how many months it would take to deplete the store of goods, slipped to 1.22 months in December, from 1.23 in November (Reuters Feb. 2) ...
News of the Competition
MADISON, Wis. (2/5/07)
- About 59 million U.S. households, or 63% of all households, will pay their bills online by 2011, according to a report by Forrester Research. Although "Gen Yers" represent only 26% of households, they will account for 36% of all online bill payers. The study predicts that the number of "Gen X" users will jump to 39% during the next five years. "Boomers," which represented 42% of all online bill payers in 2001, are expected to account for only 28% of online bill payers in 2010. Forrester noted that the number of online bill payers jumped by 34% in 2005--reflecting the fact that more banks eliminated fees for online bill payment (CARDWEB.com Feb. 1) ...
- Bank of America has decided not to bid for the new SmartPay 2 contracts the federal government is planning to award this year. "We have concluded that the economics of the SmartPay 2 contract are not viable for us," said Bank of America. A spokesman for the company declined to elaborate. Bank of America grabbed a 27% market share of SmartPay 1, the government's first contract for the cards. Citigroup captured a 40% market share, while U.S. Bancorp got 29%, and JPMorgan Chase and Mellon Financial received the remainder. Overall card volume more than doubled since 2000 to almost $27 billion for the fiscal year ended Sept. 30, 2006. Issuers must rebate a portion of the merchant fees they collect to the government. These rebates about doubled in three years, to $118 million for fiscal-year 2005, according to David Shea, director of the SmartPay program for the General Services Administration. Nancy Atkinson, a senior analyst for Aite Group, said Bank of America may have decided not to bid for the card program because the government is trying to increase rebate revenue. She said the firm also may have decided not to bid because the government requires more monitoring paperwork than other commercial customers (American Banker Feb. 2) ...
- Astoria Financial Corp., the nation's fifth-largest savings and loan, announced Thursday that a federal appeals court has reversed a $435.8 million damages award to the firm in a breach of contract suit. Astoria said it is "obviously disappointed" by the court's decision and is reviewing its options. The decision reverses a decision by the U.S. Court of Federal Claims awarding Astoria damages for breach of contract arising from the supervisory acquisition of Suffolk County Federal Savings and Loan Association by Astoria in August 1983. Astoria subsequently acquired Long Island Savings Bank (LISB) in 1998. The claims court said Astoria was entitled to damages because the government breached an agreement to encourage acquisitions of failed thrifts. But the appeals court ruled that the contract claims were forfeited because of the fraudulent actions of James Conway, the former chief executive of LISB. Conway pleaded guilty in 1998 to violating federal law by receiving millions of dollars from a law firm controlled by his family that conducted business with the bank while he was its top executive (PRNewswire via Yahoo! Finance and American Banker Feb. 2) ...
- Boston's Eastern Bank is kicking off its multi-million dollar advertising campaign with a 60-second TV ad during Sunday's Super Bowl game. "You're reaching a lot of people at once, and you're reaching a lot of people who are watching television for the commercials," said Joe Bartolotta, senior vice president for marketing and public relations at the $6.6-bilion asset bank. Simon Williams, president and CEO of New York-based Sterling Brands, said the ad will "stand out" because no other banks are advertising during the game. A shorter version of Eastern's ad will run for six weeks during prime-time TV shows (American Banker Feb. 2) ...
One quarter of eligible taxpayers don’t claim EITC
McLEAN, Va. (2/5/07)--It's estimated that up to one-quarter of eligible taxpayers aren't taking advantage of the earned income tax credit (EITC), a refundable federal income tax credit for low-income working individuals and families (USA Today Feb. 1).
The Internal Revenue Service, the U.S. treasurer, and a coalition of consumer groups launched a campaign last week to encourage more low-income families to claim the often-overlooked EITC, worth up to $4,536 this year.
It's hoped that the new campaign also will discourage taxpayers from taking out high-cost refund anticipation loans (RALs), which have fees that range from $30 to more than $125 and effective interest rates from 40% to 500%. The National Consumer Law Center estimates that RALs are used by about 30% of EITC recipients.
Originally designed to help offset Social Security taxes and provide an incentive to work, the EITC--when it exceeds the amount of taxes owed--results in a tax refund to those who claim and qualify for the credit. Another benefit: In most cases the EITC has no effect on eligibility for certain welfare benefits, such as Medicaid, Supplemental Security Income, food stamps, low-income housing, or most Temporary Assistance for Needy Families (TANF) payments.
Maximum earned income tax credits for tax year 2006:
- Family with two or more children: $4,536
- Family with one child: $2,747
- Family with no children: $412
Maximum earned income to qualify for EITC:
- More than one qualifying child: Less than $36,348, or $38,348 if married filing jointly.
- One qualifying child: Less than $32,001, or $34,001 if filing jointly.
- No qualifying children: Less than $12,120 or $14,120 if filing jointly.
For more information about EITC, visit irs.gov.
And you can read "Credits and Deductions Save You Tax Dollars" in the Home & Family Finance Resource Center.
eCU Technologies' 2006 revenues top $3 million
HARRISBURG, Pa. (2/5/07)--eCU Technologies celebrated its fifth anniversary by signing its 100th client and ending 2006 with more than $3 million in revenues.
Net income for 2006 totaled more than $400,000, reported the automated financial service technology provider for credit unions.
Contract signings for 2006 include:
- UPost--10 contracts;
- Consulting/programming--26 contracts;
- History/archiving solution (KeySafe)--two contracts;
- Miscellaneous customization projects, five contracts; and
- More than 2,000 hours of renewed programming/consulting contracts.
eCU Technologies hired staff to handle the increase in consulting contracts, to spearhead its new Episys Efficiency Study service and manage the finances of its technology credit union service organization (CUSO).
It consolidated its product line into the Keystone Suite: KeySmart (online lending); KeyBridge (CUNA Mutual's loanliner.com interface); KeyConnect (home banking); KeySafe (history conversion); KeyPoint (service bureau hosting); and UPost.
According to Alan Brunner, chief operating officer at eCU Technologies, the company's objectives for 2007 include:
- Introducing version 3.0 of its UPost product;
- Developing its business model solutions for UPost incorporating the use of scanners at business locations;
- Converting core products onto one standard platform; and
- Strengthening the technology CUSO's alliance relationships.
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