DFCU Financial To Pay Record $19M Dividend
DEARBORN, Mich.-As other financial institutions continue to stumble, DFCU Financial Credit Union last week said it will pay a record $19-million dividend to members, the fourth year in a row the CU has broken its own record for member payouts.
The $2.5-billion credit union, Michigan's largest, has paid out more than $70 million in special patronage dividends over the past four years.
"We often refer to the special dividend as our own economic stimulus package because it has helped so many of our members," said Mark Shobe, president of DFCU.
The dividend is calculated based upon the member's total relationship with DFCU Financial-the greater the relationship, the larger the dividend. Qualifying members will receive a one-half percent (0.5%) dividend on their average loan and deposit balances, with each eligible member receiving at least $50. This includes all savings accounts and loan balances.
CUs Use SBA Plan To Press For MBL Relief
WASHINGTON-Credit unions are using the White House's proposal to upgrade the Small Business Administration (SBA) loan program as an opportunity to press for relief from the member business loan (MBL) cap.
Flanked by Treasury Secretary Tim Geithner and SBA Administrator Karen Mills, Obama last Wednesday unveiled new terms designed to entice community banks to apply for funding under the Troubled Asset Relief Program, and backed plans to revamp SBA loans.
Both NAFCU and CUNA indicated support for President's Obama's efforts to spur more small business lending, with CUNA reporting it intends to contact the administration about how credit unions could be making an even bigger impact in this arena if the MBL cap were lifted.
In July, U.S. Reps. Paul Kanjorski (D-PA) and Ed Royce (R-CA) introduced a bill to increase the MBL cap from 12.25% of assets to 25% of assets.
As for banks, "We do not believe a large number of banks will participate in the program," Diane Casey-Landry, COO with the American Bankers Association, told American Banker.
Under the changes, banks with less than $1 billion of assets may apply for capital from the Treasury if they can show they intend to use the funds for small-business lending. The Treasury agreed to reduce the required dividend paid on such funds to 3% from 5% for the first five years. But the government is leaving other restrictions intact, including limits on executive compensation and requirements for issuing warrants.
