FASB Eyes Relief On Fair Value Accounting
NORWALK, Conn.-The Financial Accounting Standards Board, inundated with calls to reform its market value accounting rules, agreed to review its rule for determining the market value of assets in an illiquid market.
Robert Herz, chairman of the five-member panel which sets the rule for generally accepted accounting principles, said the board has heard the criticisms leveled by industry, regulators and some lawmakers, who have suggested the lack of an active market for many securities has made it almost impossible to determine a fair market value for those securities. "We agree," said Herz. "that more application guidance to determine fair values is needed in current market conditions.
CUs, especially corporates, have been among the critics of market value accounting, as illiquid assets continue to pile up among the corporates, causing a massive write-down on their books.
"We're very pleased about this," said Mary Dunn, director of regulatory affairs for CUNA. "We've been asking FASB to look at this for some time now. We do think this is a step in the right direction."
CUNA plans to meet with FASB officials in the near future to discuss credit unions' concerns, said Dunn.The FASB plans to review the guidance for determining market values in an illiquid market and report by June. Any guidance issued would be applicable to year-end financials for 2009.
Filene Seeks Opportunities For CUs In Stimulus Bill
MADISON, Wis.-The Filene Research Institute is planning to roll out a new initiative aimed at uncovering opportunities for credit unions in the just-passed $787-billion federal stimulus package. The plan is to have volunteers from credit unions carefully comb through the 1,071-page package for areas in which credit unions can make a significant economic difference. The effort is a Filene Future Focus initiative, "a 60- to 90-day intense review and innovation process around the stimulus package," said Denise Gabel, chief innovation officer at Filene.
"Who knows, I may get a dozen or 3,000 responses," Gabel said, adding assistance from credit union leaders is being sought in four areas:
* Discovery: identifying key areas like housing, lending, and energy.
* Ideas and generating new solutions.
* Shaping, testing and narrowing the best ideas
* Implementation and bringing new solutions to market.
For info: www.filene.org
SBA Warns On Small Biz Fraud
WASHINGTON-The U.S. Small Business Administration issued a scam alert to small businesses, many of whom may have business accounts with CUs, warning them not to respond to letters claiming to have been sent by the SBA asking for bank account information to qualify them for federal tax rebates.
The fraudulent letters were sent out with what appears to be an SBA letterhead to small businesses across the country, advising recipients that they may be eligible for a tax rebate under the Economic Stimulus Act, and that SBA is assessing their eligibility for such a rebate. The letter asks the small business to provide the name of its bank and account number.
These letters were not sent by or authorized by the SBA, and all small businesses are advised not to respond to them.
The SBA is working with the SBA Office of Inspector General to investigate this matter. The Office of Inspector General asks that anyone who receives such a letter report it to the OIG Fraud Line at 1 (800) 767-0385, or e-mail at OIGHotline@sba.gov.
Get Ready For 'Internationalization'
MADISON, Wis.-The world's credit unions are being urged to prepare for greater "internationalization" of regulation, while CU associations should prepare crisis communications plans to help both themselves and their member institutions cope with the worsening global economy, according to resolutions adopted by the World Council of Credit Unions during meetings in Florida. WOCCU's "G7" meeting, comprised of the world's seven largest CU systems, is held annually to discuss issues affecting financial services in general and credit unions specifically. "Due to the severity of the global financial situation, the group also held conference calls last year to better understand and analyze the current financial crisis," WOCCU said, adding that participants agreed that regulatory "internationalization" presents challenges for credit unions and requires increased coordination at a global level, and CU-related legislation has recently been enacted in Poland, Costa Rica, and Kenya.
