PLANO, Texas - (06/08/05) -- A group of Community CU membersopposing the giant credit union's conversion to mutual savings bankis trying to get another option presented before members during theJune 21 special meeting--an unprecedented liquidation of the $1.4billion credit union and payout to members. Under one scenariodiscussed, the assets of the credit union, including loans andcapital and brick and mortar, would be sold for book value of $250million--enough to pay each of the credit union's 250,000 or somembers $1,000. But the group knows that the liquidation option isan uphill struggle because it must first be approved by theCommunity CU board before it is put before members at the specialmeeting. "We're discussing all options that we have at this time,"Mark Arnold, the leader of the Texas Coalition for CU Members, toldThe Credit Union Journal, of his group's plans for the specialmeeting. "Ultimately, it's going to be how they (credit unionofficials) handle the meeting from a Roberts Rules of Orderperspective." Opponents of credit union conversions believe membersshould have the option of voting for a liquidation and payout, aspart of the balloting on a conversion to mutual savings bank, butsuch an option has never been presented during a conversionvote.
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The Cleveland-based bank is projecting steady growth in net interest income even as credit losses remain manageable. But Chairman and CEO Chris Gorman also said that he thinks a recession is likely.
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The first-quarter increase involved commercial real estate loans, including some problematic multifamily loans and an office credit, but none of the criticized loans were to consumers, officials at the Dallas company say. Further CRE deterioration is anticipated.
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The Detroit-based company is exploring ways to make more consumer auto loans without running afoul of stricter capital standards that are expected from the Federal Reserve. Possible approaches include more securitizations and the use of credit risk transfers.
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The House Financial Services Committee also sent to the full House two bipartisan bills, including one that would prevent large banks from opting out of having to recognize Accumulated Other Comprehensive Income in regulatory capital.
April 18 -
Charge-offs and nonperforming loans rose at the Georgia bank in the first quarter. But it blamed the problem on one large client and said the matter has been resolved.
April 18 -
Amid healthy first-quarter loan growth and improving credit quality, Discover Financial Services slashed its profits by $800 million to offset remediation costs from a 16-year period when it overcharged certain merchants.
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