Northwest, Southwest Corporates Explore Merger
PORTLAND, Ore.-The boards of directors of Northwest Corporate Federal Credit Union and Southwest Corporate Federal Credit Union, Plano, Texas, have signed a letter of intent to merge the two corporate credit unions.
"The Board of Directors of Northwest Corporate is also pleased to announce that, as part of the merger with Southwest Corporate, we will be placing $1 million in each of the state credit union foundations in Washington and Oregon," said Linda Wheeler, Northwest Corporate chairwoman. "This will serve as lasting evidence that we are and always will be committed to the interests of the credit unions in these states."
The merger planning process is currently underway and is expected to culminate in the fall with submission of the proposed merger for approval to NCUA and the Northwest Corporate members. The planned merger effective date is Dec. 1.
Threatened Directors Change the Rules at LFCU
KENSINGTON, Md.-Directors at Lafayette Federal Credit Union, facing a recall petition by members, have changed the credit union's bylaws to require voting be done in person.
The bylaw change will make it easier for directors to retain their seats by mobilizing the credit union's paid employees on their behalf, just as threatened directors at DFCU Financial and Columbia CU did after failed attempts to convert to savings banks angered members.
In the credit union's most recent voting, a 90-day ballot on the conversion, the vast majority of the 5,100 votes were cast by mail, with fewer than 75 members attending the special meeting where the vote was culminated.
The proposal to switch to a bank passed by just 18 votes but was later rescinded when the credit union's outside auditing firm found potential irregularities in the vote.
The board of the $330-million credit union, which barred the head of the petition drive from access to his accounts after the failed vote, also passed a new bylaw that allows it to limit services and access to credit union facilities for "a member who is disruptive to credit union operations."
Lottery Scam Uses Fake CU Checks
BURLINGTON, Vt.-Residents around the state are being taken in by a lottery scam, which uses phony checks from Alaska USA FCU to lure unsuspecting victims.
The letters tell the recipients they have won the European lottery and come with a check for $4,600 purporting to come from the credit union.
The letter asks the recipient to send along a check for $4,300 to cover the taxes on their $200,000 lottery prize.
State police have reported that at least two people have been swindled out of more than $9,000.
GSE Pulls Plug On Subprime Loans
McLEAN, Va.-Secondary mortgage giant Freddie Mac, under pressure from Congress and regulators, announced it is pulling out of the subprime mortgage market, adding new pressure on the sector.
Freddie Mac does not buy subprime mortgages but is one of the major players in the subprime mortgage bond market, holding about $200 billion in paper backed by the subprime mortgages.
The move, which will reduce liquidity in the market, comes as subprime lenders are reporting mounting foreclosure rates leading to major losses. Several subprime lenders have filed for bankruptcy in recent weeks and Fremont General Corp., the largest subprime lender, delayed its fourth quarter and annual financial reports.
While credit unions make few subprime loans, observers are worried the troubles may spread throughout the whole mortgage market.
Tyndall Offers Low-Rate Mortgages
PANAMA CITY, Fla.-Tyndall FCU is offering a helping hand to low- and moderate income members wanting to buy a home.
The $800-million credit union is offering 30-year, fixed-rate home loans for as little as 3.99% for members who earn less than $51,600.
The so-called Helping Hands Mortgage requires no down payment for young families, first time homebuyers or low- to moderate-income members.
To qualify members the home must be the members primary residence and the members must also meet the credit union's credit criteria.
