NCUSIF Is Projecting A $113.4M Loss In December
ALEXANDRIA, Va.-NCUA has projected a December loss for the National Credit Union Share Insurance Fund (NCUSIF) of $113.4 million, according to its year-end report, and a $290-million loss for the year. The loss will reduce the fund's equity level to 1.27%, meaning no NCUSIF dividend for federally insured CUs. The agency said $97 million of that December loss was the result of unallocated reserves being transferred to insurance loss reserves.
NCUA reported gross income of $129.9 million for December, $106 million of which was from the sale of longer-term Treasury securities. Of that, $106 million was from the NCUSIF's sale of longer-term U.S. Treasury Department Securities that appreciated in value. At year end, NCUA said it has identified 271 CUs as either CAMEL 4 and 5, 28% more than one year earlier. The total insurance loss expense for 2008 is estimated to be $290.4 million.
NCUSIF Is Projecting A $113.4M Loss In December
WASHINGTON-A court ruled last week against the IRS in a case filed by Bellco CU challenging the IRS over the application of the unrelated business income tax (UBIT). The IRS had asked that the case be dismissed or stayed, but the court refused. Greenwood, Colo.-based Bellco is seeking a refund of $199,000 based on UBIT taxes paid in 2000, 2001 and 2003. Credit unions have been carefully monitoring the case and the effect it may have on their own UBIT liabilities. No trial date has been set. A separate UBIT suit filed by Appleton, Wis.-based Community First CU is to go to trial May 11.
Financial Literacy Bill Introduced In Congress
WASHINGTON-U.S. Rep. Eddie Bernice Johnson has introduced the National Financial Literacy Act of 2009, which will provide incentives to financial institutions, small businesses and corporations to provide financial education to customers and employees.
The National Financial Literacy Act of 2009 amends the Community Reinvestment Act to allow banking institutions to receive credit for offering community-based financial literacy programs. It provides for small businesses and corporations that offer free financial education to receive preferential treatment for government contracts, and for those small businesses to receive tax breaks. Under the bill, qualified community-based financial literacy programs would include the topics of saving for retirement, managing credit, long-term care, estate planning, predatory lending, identity theft and financial abuse schemes.
Teller Sniffs Out Drug Scheme
SPOKANE, Wash.-One man was arrested and his brother is being sought on drug charges after an alert teller at Spokane Teachers CU called in the police when she smelled marijuana all over a wad of $2,300 deposited by one of the men.
The teller called the police, who verified the distinctive odor, then searched the member's house, where they found more than two dozen pot plants, two pounds of processed marijuana and cash they believe was earned by the sale of the drug, according to Sgt. David Reagan, spokesman for the Spokane Sheriff's Office.
"She noticed the smell both on the person and on the money. He reeked of it," said Craig Brendan, head of security and fraud at the $1.1 million credit union.
Brendan said they work with tellers to detect contaminated cash because of its potential to spark an allergic reaction in the tellers or other members. "It's a big concern; how we're going to handle the money that comes in contaminated with methamphetamines, for example," he told CU Journal. He cited one case in which cash contaminated with fish caused an allergic reaction by one of the tellers. "We have to be careful about who we hand it out to."
Shawn O'Bannon, 21, was charged with manufacturing a controlled substance, but officers are still searching for his 18-year-old brother, Daniel O'Bannon, who made the smelly deposit. The next day, the credit union closed Daniel O'Bannon's account, according to Brendan.
Jefferson Financial Opens New HQ
METAIRIE, La.-Jefferson Financial CU is planning a grand opening next week for its new home, a 30,000 square-foot office on Airline Drive, here. The new headquarters will house a branch, and features numerous meeting spaces, a lunchroom, a training room for seminars, a library, and workout area for employees. The building also features four drive-thru lanes and one ATM/night drop lane. The $155-million credit union was known until recently as Jefferson Parish School Board Employees CU.
