NCUA Board: NCUSIF Checks Are In The Mail
ALEXANDRIA, Va.-The NCUA Board last week approved the first dividend from the National CU Share Insurance Fund in six years-albeit a small one.
The $52-million payout will amount to a 1% return on federally insured credit unions' 1% NCUSIF deposit and importantly, demonstrated that credit union's accounting for the 1% deposit as an asset is valid because of the potentially for earning a return on it, said NCUA's CFO Dennis Winans.
NCUA will be sending out dividend checks to all federally insured credit unions this week. The average credit union, of $20 million in assets, will receive a $2,000 check, while a $1-billion credit union will receive $100,000.
The dividend was made possible because the NCUSIF ended the fiscal year with an equity ratio of just over 1.3 (dollars reserved per $100 of insured shares), which NCUA has set as the required reserve level.
Winans had told the NCUA Board last month he hoped to be able to pay a dividend of as much as $110 million, but higher than expected growth among credit unions dilluted the reserve level further, preventing the larger payout.
The last NCUSIF dividend was paid in March 2001, for fiscal 2000, and was $99.5 million. It was the last of six straight years NCUA paid a dividend on the insurance fund.
Stanford FCU Buys $12.8M Of Stanford Student Loans
PALO ALTO, Calif.-In the largest deal of its kind, Stanford FCU has acquired $12.8 million of student loans for Stanford University students from Nelnet, the well-known student lender. The Lincoln, Neb.-firm will continue to service the purchased loans, for about 500 current and former students. Nelnet will also continue to serve Stanford University. The deal represents an expansion of the $800-million credit union's relationship with Stanford students, part of an effort to forge lifelong relationships with the members. Financial terms of the deal were not disclosed.
Travis Makes Dream Home Reality
FAIRFIELD, Calif.-Thuy Nguyen, a Vietnamese immigrant single mother moved from subsidized Section 8 housing into her own home, thanks to Travis CU. The $1.6-billion CU teamed with the city of Fairfield and a variety of state and government agencies to provide funding for the mother of two to buy her own two-bedroom condo in this high-cost city. Under the Section 8 program, qualified participants are provided grants from a variety of sources, in this case, the State CalHome Program, the federal Community Development Block Grant Program and Housing American Families, and the credit union will provide a traditional mortgage loan for the rest.
In Nguyen's case, the grants provided more than 80% of the $364,250 cost of the home and Travis CU provided a first mortgage for $40,000. The Section 8 loan was so successful that three surrounding California counties have hired the credit union to finance their loans.
MBL Goes from Dream To Nightmare
BROOKLYN, N.Y.-A former member of Central CU was convicted on federal fraud charges in obtaining a $300,000 member business loan for a neighborhood bar he called 'Dream Café', the first case of a multi-million dollar member business-loan-scheme-gone-bad that sunk the $75 million credit union. Daniel Eleftheriades, a Greek immigrant who opened his diner in his hometown of Norwalk, Conn., faces more than 10 years in jail when he is sentenced.
The Eleftheriades loan is one of $17 million worth of questionable MBLs brokered for Central CU by a local figure in the Greek community, Theodore Georgacopoulos. Losses on the 33 loans, estimated in the millions of dollars, forced the credit union to merge last year into Progressive CU. Prosecutors claim Georgacopoulos helped qualify the borrowers by filing false loan applications and documentation.
