NCUA Plans Dividend Payout to CUs In 2007
ALEXANDRIA, Va.-NCUA said last week it expects to pay all federally insured credit unions a dividend on their NCUSIF deposit, for the first time in six years.
The dividend is expected to be as much as $150 million, the equivalent of about 2.5% on each credit union's NCUSIF deposit, according to Dennis Winans, the agency's chief financial officer.
Payment of the dividend will be allowable because NCUA expects the reserve ratio to exceed 1.3% (dollars reserved per insured shares), above which the agency is required to return the excess to credit unions.
Lower interest over the last five years on the NCUSIF's $4 billion in Treasury investments have kept the reserves low, preventing NCUA from paying a dividend.
NCUA Revises SAR Filings Requirements
ARLINGTON, Va.-The NCUA has made changes to Part 748 of its rules concerning procedures to follow when filing suspicious activity reports (SARs). Changes include a required monthly notification to the board or a committee designated by the board. If the suspected person is a director, all directors but that person are to be informed. The format is not specified, giving CUs some flexibility, but the FFIEC Bank Secrecy Act Exam Manual format is suggested as a guide.
Credit unions must report any known or suspected crimes, as well as any suspicious transactions related to money laundering or other illegal activity, or a violation of the Bank Secrecy Act if there is insider abuse of any amount; transactions aggregating $5,000 or more where a suspect can be identified; transactions aggregating $25,000 or more regardless of potential suspects; and/or transactions aggregating $5,000 or more that involve potential money laundering or violations of the BSA.
CUs must file a SAR with FinCEN within 30 days of initial detection and a credit union must maintain copies of the SARs filed and supporting documentation for five years. Supporting documentation must be made available to appropriate law enforcement authorities and regulatory supervisory authorities upon request, but are otherwise confidential and must not be disclosed, even if the information is subpoenaed.
New Faith-Based CDCU Opened
BOSTON-Tremont CU is joining with local faith-based and community development groups to open a branch in the low-income neighborhood of Dudley Square, in Roxbury. A coalition called the Boston Community Development Corp. will market the branch's services and provide outreach to the neighborhood's Latino and African-American community, according to Leonard Broderick, president of the $165 million-CU.
"I've been working on this for a lot of years; developing the trust of the church groups and the community. It's taken a lot of leg work," Broderick said. The new branch will offer a broad variety of services, like financial education, credit counseling, home improvement instruction, technical assistance for small businesses and business education.
NCUA Approves New Investment
ALEXANDRIA, Va.-The NCUA Board last week added another permissible investment to the limited options for federal credit unions. The action will allow credit unions to invest in short-term (30-day) notes collaterized by whole mortgages, a thriving secondary mortgage market estimated at as much as $30 billion.
Under a rule allowing the new investment, such investments must be with highly rated counterparties and CUs must limit their concentration, in order to reduce exposure.
Part of Bankruptcy Law Stricken
MINNEAPOLIS-A federal judge struck down as unconstitutional several provisions of last year's federal bankruptcy law that designates attorneys as debt relief agents, which effectively prevents them from advising clients to take on new loans to pay off their debts. In his ruling, Judge James Rosenbaum wrote that three sections of the new law violate free speech rights under the First Amendment.
In addition, the judge found the debt relief agency provisions of the law inapplicable to attorneys. The bankruptcy law refers to debt relief agents broadly as anyone who gives advice to people seeking bankruptcy protection. The ruling makes it likely Congress will revisit bankruptcy reform next year.
