Corporate Report: NCUA Is Right To Lean On CUs
ALEXANDRIA, Va.-A consultant's report commissioned by NCUA recommends that natural person CUs be used to recapitalize the failing corporate CU system.
PricewaterhouseCoopers LLP said NCUA should collaborate with natural person CUs to increase liquidity at the corporates by, among other things, making corporate membership contingent on providing paid-in-capital and inducing large, well-capitalized credit unions to provide capital on a voluntary basis.
NCUA, which has been shopping the ideas around in meetings with credit union representatives for the past month, has already enacted some of the consultant's recommendations in an effort to stem the unrealized losses in the corporate system, which have grown to an estimated $20 billion.
Among the recommendations already enacted are a guarantee of all corporate deposits to help stop a run on the corporates and use of the Central Liquidity Facility to infuse liquidity into the system.
Among the recommendations:
* create a pool of lower-rated securities held by the corporates;
* use CLF loans as a source of paid-in-capital or other form of capital for the corporates; and
* more closely regulate core and non-core corporate activities.
NCUA hired PwC in November to review proposals for restructuring the corporate system and was in the process of reviewing the proposals when U.S. Central announced a massive $1.1 billion loss for 2008, necessitating an emergency enactment of some of the recommendations, like the guarantee of corporate deposits.
A subsequent consultant's review of all the corporates' investments, being conducted by PIMCO, was expected to be completed soon.
Hawaii CUs Stage Financing Event
WAIPIO, Hawaii-A group of local CUs will participate in a financing event for three days next week at the Autoplex here.
Among the participating credit unions are: Hawaii State FCU, Pearl Harbor FCU, Hickam FCU, Hawaii Schools FCU and Hawaii USA FCU.
The three-day Credit Union Financing Event is open to the general public. All vehicle pricing is pre-set and consumers will be able to avoid the usual price negotiations involved in buying a vehicle. Credit union loan officers will be on site to help car buyers get the lowest interest rates possible and a wide variety of credit terms on their car loans. Oahu residents who are not currently credit union members may join one of the participating federal credit unions at Autoplex.
CU Sells Land To Fund Scholarships
DULUTH, Minn.-Duluth Teacher's CU is planning to sell a vacant lot it owns to help it finance a new scholarship program.
The $65-million credit union hopes to earn as much as $700,000 from the sale, which it would use to fund up to seven scholarships.
'Backyard Makeover' Contest Held
REDDING, Calif.-Members 1st CU is sponsoring a makeover contest of a different kind-this one a "Landscape Makeover Sweepstakes" that will award the winner $25,000 to redo their backyard.
The grand prize includes a consultation with a horticulturist. WLMS Landscaping will oversee the project and provide a crew to do the work.
Raffle tickets, priced at $5 each or six for $25, will be sold through March 31. The north state public TV station will televise the drawing that night. Only 5,000 tickets will be sold.
Teller Charged In $74,000 Heist
ANTIOCH, Calif.-A teller at Metro 1 CU was charged with helping plot the Feb. 25 armed robbery at the credit union when $74,000 was stolen.
Two men wearing ski masks and armed with handguns entered the credit union and pointed their guns at teller Daniel Ramsey, 20. They told him to open the vault, which he did and he filled a bag with the $74,000, according to police. The robbers fled, but not before leaving behind a glove near the credit union and $20,000 in a nearby yard.
Ramsey was teary-eyed when officers interviewed him shortly after the robbery, but investigators concluded that he helped plan the robbery, police said.
Four alleged accomplices between the ages of 18 and 21 were also charged in the heist. The suspects used holdup money to buy a car, stereo equipment, alcohol, marijuana, motorcycle parts and clothes, and to pay bills, Orman said. Some of the money was found in Ramsey's apartment, police said.
