Journal Daily

Register now

CUs Seek Overturn Of Deposit Cap

BOSTON-The credit union lobby has high hopes for passage of a bill that would eliminate a limit of $250,000 on the amount any individual may deposit in one state-chartered CU. "There shouldn't actually be any limit on what people can put in their credit union," said Dan Egan, CEO of the Massachusetts CU League. The deposit limit, believed to be the only one of its kind in the country, is tied to a state law requiring all CU deposits be insured, and that is the limit the Massachusetts Share Insurance Corp. sets for excess deposit insurance, coverage over the federal $100,000 per account limit, Egan explained. The Massachusetts league is also lobbying for a bill allowing the 100 state charters here to sell insurance products for the first time.

Oregon Ends Drought On New CUs

BEAVERTON, Ore.-Credit unions around the state have pledged more than $300,000 in non-member deposits to what would be the first new credit union chartered in Oregon in more than 20 years. Hacienda Community CU has received $310,000 in non-interest bearing deposits from Northwest Corporate CU, Providence Health Systems FCU, Oregonian FCU, WASCHO Community CU and Roth's Employees FCU as well as a pledge of $12,600 from Chetco FCU and Oregon Pioneer CU to help offset operating expenses. Portland Teachers CU is providing back-office operating assistance at no charge to the would-be state charter, as well. Hacienda Community CU needs to raise a total of $75,000 for operating expenses and $1 million in low- or no-interest deposits in order for the charter to be granted.

NCUA To Ratify Cap Repeal

ALEXANDRIA, Va.-The NCUA board is expected this week to finalize repeal of the controversial community action plan, or CAP, which would have imposed Community Reinvestment Act-like requirements on federally chartered community credit unions.

The measure was halted in December, just weeks before its implementation, when the previous NCUA board voted to repeal it by an interim final rule, which must still be ratified and made final.

That vote is being challenged in court by the National Community Reinvestment Coalition, which claims the vote violated provisions of the U.S. Administrative Procedures Act because it was conducted without a public notice and comment period. Since then, two new members have been added to the three-person NCUA board, replacing two predecessors who split their vote on the interim repeal.

Hybrid Certificate Yields Dividends

ST. PAUL, Minn.-Affinity Plus FCU said it brought in $9 million in new deposits within days of offering a new certificate with a tiered interest rate. The Encore Certificate offers members the option to earn higher interest or withdrawing their investments every six months with no penalty. Minimum balance is $5,000 with a term of 36 months. "The uncertainty of the stock market offers traditional financial institutions an opportunity to attract consumer investments," Affinity Plus FCU President Kyle Markland said. "The Encore Certificate is different because its flexibility and tiered rate structure allows investors to earn competitive returns without locking up their investment for a long period of time. Consumers know a good thing when they see it - the initial response has been very positive." Affinity is offering rates from 3.92% to 5.38%, depending on the options and terms selected.

Many Flock To Home Equity Promo

TEMPE, Ariz.-Tempe Schools CU doubled its goal of attracting $2 million in new loans, bringing in a total of $4 million with its "TAP into your Home's Equity" promotion during January and February.

The credit union offered a 6.25% interest rate and the chance to win a $500 Home Depot shopping spree to entice members to get a home equity loan.

To help promote the event, employees wore Home Depot aprons with giant yellow buttons saying "Ask Me About Home Equity Loans." The credit union set the $2-million goal based on doubling its previous month's performance of bringing in approximately $1 million in home equity loans.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER