NCUA Will Guarantee CIF Principal, Dividend For 2 Yrs
ALEXANDRIA, Va.-Investors in the Community Investment Fund (CIF) will be able to "triple their dividends while securing a full federal guarantee" for the next two years, according to the National CU Foundation. With NCUA saying it will guarantee all principal and quarterly fixed-rate dividend payments on new two-year CDs in CIF, natural-person CUs will be able to earn dividends while donating to credit union charitable organizations "without creating an expense on the donors' balance sheets," the NCUF reported. "What's more, new deposits in CIF will help reduce all credit unions' expenses for NCUA's Corporate Stabilization Program," the foundation added.
Half of CIF dividends are donated to the foundation, with half of those funds in turn going to national programs such as REAL Solutions, CU Development Education, Innovation Grants, Biz Kid$, and CUAid. NCUF grants the other half of CIF donations to each investor's state credit union foundation or league.
For info: www.ncuf.coop
FHLB Seattle Reports Cap Deficiency of $467 Million
SEATTLE-The Federal Home Loan bank of Seattle, which has been struggling with a large portfolio of underwater mortgage-backed securities, reported a $467-million capital deficiency as part of first quarter financials.
The Seattle bank, which has been struggling to keep up its capital levels for the last several months, also reported a $16.2-million loss for the first quarter, compared to a $31.5-million profit for the same period last year.
The Seattle bank attributed the decrease primarily to $71.7 million of other-than-temporary-impairment credit-related charges on held-to-maturity, private-label mortgage-backed securities.
As a result of the distressed prices of certain of the bank's held-to-maturity private-label mortgage-backed securities, the Seattle Bank had a risk-based capital deficiency of $466.7 million as of March 31. Under Federal Housing Finance Agency regulation, a Federal Home Loan Bank may not redeem or repurchase capital stock or pay dividends on its stock while a capital deficiency exists.
Conn. CUL CEO Attends Bill Signing
MERIDEN, Conn.-Connecticut League CEO Tony Emerson was among the credit union dignitaries to attend the White House bill-signing ceremony when President Obama signed the Helping Families Save Their Homes Act, which included provisions for the stabilization of the corporate CU system.
Emerson was invited to the ceremony by Sen. Chris Dodd (D-CT), who chairs the Senate Banking Committee.
Credit Card Reform Bill Passes
WASHINGTON-The inclusion of an unrelated gun amendment did not deter members of the House last week from voting final passage of the credit card reform bill and sending it on to the president for his signature by the end of last week.
House members joined members of the Senate in approving an amendment that will allow gun owners to carry loaded concealed weapons in national parks, something the Supreme Court had struck down. A White House spokesman said President Obama will sign the bill into law with the gun amendment on it.
The bill will prohibit card issuers from raising interest rates on existing balances unless the borrower is at least 60 days late. If the cardholder pays on time for the following six months, the company would have to restore the original rate. On cards with more than one interest rate, issuers will have to apply payments first to the debts with the highest rates, which would help borrowers pay off their cards more quickly. It will also ban double-cycle billing and universal default, and solicitation of cards to minors, those under 21.
The provisions of the bill are similar to amendments to the Federal Reserve's Regulation Z passed in December, but will take effect four months earlier, next February, instead of next June 30, when the Fed's regulations are scheduled to kick in.
