Reid Says Senate Will Vote
On MBL Cap Increase
WASHINGTON - Senate Majority Leader Harry Reid promised last week he will let the Senate finally vote on a long-sought bill to double the limit on member business loans, despite continued opposition from the banks.
"I'm to the point now where we're going to have a vote on this," Reid said on the Senate floor after Colorado Sen. Mark Udall asked him when they might vote on his bill, which would raise the MBL cap from 12.25% of assets to 27%. "We're going to have a vote on this. Democrats and Republicans are going to have to make a decision on where they stand for American credit unions."
A similar bill is pending in the House.
Udall's bill, S. 509, has been stalled in the Senate and he has also offered it as an amendment to other bills.
The MBL increase is opposed by banks.
Judge Rejects Bid By Corp Defendants For Payment
LOS ANGELES--A federal judge here last week rejected motions by former officers of Western Corporate FCU (WesCorp) that sought payment of legal costs and indemnification from NCUA related to a lawsuit against them over WesCorp's failure, but did allow them to amend their indemnification claim based on state law.
U.S. District Judge George H. Wu dismissed the counterclaims by the former management at WesCorp related to the litigation, and said they must instead submit administrative claims with NCUA after their cases are concluded.
"It would indeed appear that any relief this court might fashion actually ordering the NCUA to pay the officer defendants--whether by virtue of an 'advancement' or 'reimbursement' order or by way of declaratory relief determining that the officer defendants have a right to such payment--would 'restrain or affect' the NCUA's exercise of its powers," Wu wrote in his opinion.
Wu, however, is allowing the WesCorp officials to add indemnification claims under the California corporate code, even though NCUA had argued that the WesCorp execs had no right to any indemnification or reimbursement of costs until after the court issues its decision. The defendants in the lawsuit include former CEO Bob Siravo, CFO Todd Lane, CIO Bob Burrell, Chief Risk Officer Timothy Sidley, and HR Director Thomas Swedbert (see related story, page 3).
Barnes New Cal. DFI Chief
SACRAMENTO, Calif.--Teveia Barnes has been named as the new commissioner of the California Department of Financial Institutions (DFI), succeeding William S. Haraf, who resigned last week. Barnes has been a partner at the law firm of Foley and Lardner LLP since 2005 and president and executive director at Lawyers For One America since 1999. Barnes worked at the Bank of America National Trust and Savings Association from 1986 to 1999, must still be approved by the State Senate.
Deposits Expanded In Washington
OLYMPIA, Wash.-Washington Gov. Chris Gregoire signed a law that will expand access by the state's credit unions to municipal and government entity deposits. The bill increases the amount of money a municipality can deposit in a federally insured credit union from $100,000 to the $250,000 limit on federal deposit insurance. It also expands eligible credit unions from state charters to all credit unions. The new law will go into effect on June 8, which is 60 days after the end of the regular 2011 legislative session.
CORRECTIONS & clarifications
An article in the March 12 CU Journal used an incorrect abbreviation for Credit Union Business Capital, the former CUSO of Eastern Financial Credit Union. The article incorrectly used the abbreviation CUBS. Credit Union Business Services of Georgia is not a party to litigation in the Eastern Financial case.
* Altura Credit Union's 2011 net income should have been reported as $8.43 million.
Visit www.cujournal.com today.
OLYMPIA, Wash. - Washington Gov. Chris Gregoire signed a law that will expand access by the state's credit unions to municipal and government entity deposits. The bill increases the amount of money a municipality can deposit in a federally insured credit union from $100,000 to the $250,000 limit on federal deposit insurance. It also expands eligible credit unions from state charters to all credit unions. The new law will go into effect on June 8, which is 60 days after the end of the regular 2011 legislative session.
CUSO To Manage Troubled CU
CINCINNATI - Emery FCU said its Emery Financial Services CUSO has contracted to manage nearby Presidents FCU, a troubled $12-million credit union it has long partnered with. John Neyer, the chairman of the board of Cleves-based Presidents, which has reported losses four years in a row, said it had difficulty finding a new CEO when its former chief left in August. "The right candidate eluded us, so our options were either to merge with another credit union or enter into a management agreement," he said.
Under the contract, Presidents FCU's four employees will remain in their current positions with all additional staffing, IT and back office support provided by Emery Financial Services. Presidents FCU has already received significant assistance with its financial reporting, compliance requirements, data processing and lending services from Emery Financial Services.
The two Cincinnati-based financial institutions have had a shared branching agreement in place for more than five years, which enables Emery members and Presidents members to conduct transactions at the offices of either credit union.
Emery has $144=million in assets and more than 13,500 members.
11 Employees Let Go
WINSTON-SALEM, N.C. - Piedmont Advantage CU announced 11 employees have been let go and collections duties have been outsourced as part of a restructuring, but the addition of new positions will make the initiative job neutral. The $225-million credit union said it expects to fill the new and redesigned positions within a month.
The credit union, chartered to serve Piedmont Aviation and Piedmont Airlines employees, had net income of $547,000 for 2011.
JACKSON, Miss. - Hope CU has acquired a former BancorpSouth bank branch in Utica, Miss., which will replace the credit union's temporary branch in the Utica Town Hall. Tupelo-based BancorpSouth closed its Edwards and Utica branches last August, leaving each Hinds County community without a banking option for miles.
Hope filled the void in June when it opened a temporary branch inside Utica Town Hall, later moving to a modular branch in October. The credit union also has set up a temporary branch inside Edwards Town Hall.
Hope said the building at 106 W. Main St. will undergo minor renovations before a grand opening this spring.
