Fed Chairman Bernanke Won't Back MBL Hike
WASHINGTON-Federal Reserve Chairman Ben Bernanke last week refused to endorse an increase in member business loan limits for credit unions, despite bills in the House and Senate asking for the hike.
Bernanke told the House Financial Services Committee the current 12.25% of assets cap on member business loans, and other restrictions, were enacted in exchange for credit unions' tax exemption.
"The banks would complain obviously that if credit unions are allowed to do everything banks can do, why are they tax favored? I think that's the trade-off Congress has to consider," Bernanke said in response to a question from Rep. Brad Sherman, a California Democrat who sponsored the MBL bill in the House.
Credit unions have been lobbying for 10 years to lift the cap, enacted as part of HR 1151, the CU Membership Access Act, which legalized multiple group fields of membership for credit unions.
Cop Sentenced After Emptying CU Member's Acct
GARY, Ind.-A veteran Gary police officer was sentenced to three years in work releasen last week after he admitted he drained the credit union account of an elderly Alzheimer's disease sufferer account of $117,000.
The neighbor, 89-year-old Helen Chentnik, whom the officer had committed to a nursing home, died in December 2006 after suffering from dementia and Alzheimer's for several years.
Prosecutors said Officer Joshua Wiley, 52, knew Chentnik was an endangered adult and not competent to make financial decisions on her own.
Between December 2002 and September 2005, Wiley reportedly exerted unauthorized control over money in the woman's accounts at U.S. FCU, using a debit card to withdraw cash or buy goods and services for his personal use.
Wiley also deposited Chentnik's Social Security and pension checks at a separate bank, where he had opened a joint account and transferred money from the credit union.
In January 2005, Wiley obtained a fraudulent quitclaim deed to the woman's home, valued at $40,600, in the 3500 block of West 12th Avenue in Gary.
A 21-year veteran of the force, Wiley pleaded guilty to two counts of felony theft in September. He has paid $55,000 in restitution to the victim's estate. His plea bargain requires him to pay monthly installments of $1,000 toward the remaining balance and also to serve five years probation.
Wiley is expected to resign from the department because a convicted felon cannot carry a gun.
Kern Schools FCU Shuts 4 Branches
BAKERSFIELD, Calif.-Kern Schools FCU said it plans to close four of its 14 branches and lay off 40 employees as part of a plan to trim its budget by $7 million.
The closures and layoffs are expected to reduce the credit union's expenses by about $2 million a year. Credit unions officials said they hope to save an additional $5 million this year by carefully reviewing Kern Schools' various contracts and leases.
The one-time $1.7 billion credit union lost $40.6 million in 2009, after a $24.3 million loss in 2008. Branches expected to close within two weeks are in Ridgecrest and in Bakersfield, as well as two supermarket-based branches.
Alaska USA FCU Expands In Calif.
APPLE VALLEY, Calif.-Alaska USA FCU, which entered the California market with the acquisition of two failed credit unions last year, opened a new branch here last week.
The Jess Ranch location is the second in Apple Valley and fourth in the Victor Valley for the $4 billion credit union, based in Anchorage. Alaska USA, which had branches in Alaska and Washington, entered the California market last year with the acquisitions of High Desert FCU and The Members' Own FCU.
Freddie Mac Lost $26B In 2009
WASHINGTON-Freddie Mac reported it lost another $7.8 billion in the fourth quarter of 2009, making total losses for the year of $25.7 billion.
Freddie also said a record 4% of its borrowers are at least three months behind on their payments and facing foreclosure. Its CEO, Charles Haldeman, yesterday warned of a "potential large wave of foreclosures" still to come.
During the fourth quarter, Freddie suffered $7.1 billion in credit losses and a $3.4 billion write-down in low income tax credit investments. That move "increases the likelihood" that the company will require more cash from the Treasury Department, the company warned in a regulatory filing.
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