A Common Theme In The Leading Stories of 2002 All Had To Do With Money-Too Much And Too Little
ONE: Too Much Money Woes: As billions of dollars flood into CU deposit coffers even as savings rates are slashed, making for healthy profit margins (see related story, right).
TWO: No Payday Heyday: A few credit unions began to respond to the boom in payday lenders by offering alternatives, including Wright-Patt CU in Ohio. The Filene Institute publishes "The Economics of Payday Lending" which includes one surprise: users report incomes between $25,000-$50,000. A study of the first anti-predatory lending law, passed in 1999 by the N.C. legislature (with help from the states' CUs) saved consumers $100 million in the first year of restricted fees and charges. Still, no subprime lender had left the state by 2002.
THREE: Deborah Matz and JoAnn Johnson, who becomes chair, are given recess appointments to the NCUA Board by President Bush.
FOUR: Arrowhead CU announced plans to charter its own subsidiary bank in order to get around restrictions on business lending. The Business banking Group will operate as an industrial bank (not offer checking) to sidestep the 12.25% cap on MBLs imposed by passage of the CUMAA.
FIVE: Violent crime rises at credit unions, including a kidnapping and holding hostage the family of a branch manager at Jeep Country FCU in Toledo, the use of a backhoe to take down the back wall of a branch of Food Industries CU in Salem, Ore., making off with the vault, and the shooting of a member at the Credit Union of Denver.
SIX: The Co-Op Network, Ontario, Calif., and Southfield, Mich.-based Shared Service Centers merge, creating a nationwide network of 12,000 ATMs, most surcharge free.
SEVEN: Hector Bareto, director of the Small Business Administration, opens the SBA program to more credit unions, despite "vehement" opposition from the banking industry.
EIGHT: As CUs congregate in D.C. for the GAC, talk of potential bans on soft money are heard while CU PACs set new records. In Washington, credit unions work to head off criticism from a study by the Woodstock Institute that suggests CUs aren't doing enough to provide mortgages to low-income earners, and the National Community Reinvestment Coalition wants CUs subject to the Community Reinvestment Act. Despite CU, banker and credit card company support, the bankruptcy bill flounders.
NINE: CU Democracy Meltdown: Some members of US Senate FCU sought to recall a majority of the 13-member board after they voted to expand the board by two in order to accommodate members who lost bids for reelection. A petition to have a special meeting to recall the board was floating through Congress as irate members said they had the required 200 signatures. The board then voted a resolution to identify the organizers of the petition and validate the 350 signatures calling for a special meeting. Efforts to work out a deal broke up in charges of racism and personal insults, and the board voted to accept the resignations of the two board members who had lost the election. Hoping to forestall a special meeting where the entire board could be recalled, the board then sought to quash the initiative, asking signers to withdraw signatures for a special meeting. That effort failed, and with the exception of one member, the entire board was toppled at the meeting.
TEN: Credit unions that had bought brokered CDs through Bentley Financial Services of Philadelphia got a scare after investigators found a $50-million shortfall on the company's balance sheet. More than 100 credit unions had invested more than $370-million in certificates that were brokered by the company.