Fed Holds Rates Steady, Change Expected Later
WASHINGTON -The Fed last week opted to keep the target for the federal funds rate at 5.25%, the seventh consecutive time the Fed has left rates unchanged. But that could change in the second half of this year, according to analysis by CUNA.
The Fed noted it is primarily concerned with inflation, but earlier moves to raise rates have also slowed the economy. And that could mean a rate decrease later this year, according to CUNA Economist Bill Hampel. "CUNA economists believe that core inflation will continue to moderate, so that one or two 25 basis-point rate cuts could come in the second half of the year as the Fed responds to a sluggish economy," CUNA quoted Hampel as saying. "As a result, the yield curve will likely remain inverted to flat for the balance of the year."
League OKs Anti-Hostile Takeover Resolution
COLUMBIA, Md.-The board of the Maryland and District of Columbia Credit Union Association last week approved a resolution against so-called hostile takeovers of CUs.
The resolution states that "It is the right of the credit union board, after thorough consideration of the best interests of the members, to approve or disapprove a merger proposal; third parties have no right to interfere in the business operations of a credit union or the ability of its board to act in the best interest of its members; while freedom of speech is a fundamental principal of democracy, third parties, including other credit unions, are not entitled to provide inaccurate or misleading communications to members of another credit union; and unsolicited attempts to affect unwanted mergers by encouraging ill-considered decisions to declare dividends can raise serious safety and soundness concerns, and the authority of one credit union to spend funds to influence member votes at another credit union should be subject to serious review by regulators.
Group Charged With Siphoning Funds
FRESNO, Calif.-Six local men were charged in a federal indictment with using a home computer program to siphon hundreds of thousands of dollars from accounts at Navy FCU, JP Morgan Chase and Citibank, among others.
The six allegedly obtained the software program for free online, then access various business accounts, as well as personal accounts through popular financial management programs like Quicken, Quickbooks and Microsoft Money, which yielded credit union and bank account information, PINs and passwords.
Authorities believe the group stole as much as $400,000 through the scheme. Named in a 53-count indictment were alleged ringleaders Ryan Friend, 26, and Michael Buchanan, 30, and brothers Christopher Travis, 33, and Lloyd Travis, 37, Robert Moreno, 29 and his brother Cesar Moreno, 34, all of Fresno.
Minn. House OKs Data Security Bill
ST. PAUL, Minn.-The state House approved a bill that would require all parties to a data breach to notify their customers and for the responsible parties to pay for associated costs, such as cards reissuance.
The bill would enact as law the Payment Cards Industry standards which require all merchants to destroy cards data as soon as a transaction is completed. The credit union-backed bill is now headed to the Senate for its review.
eFunds Shares Rise On Speculation
SCOTTSDALE, Ariz.-Shares in EFD, the funds processor formerly known as eFunds, rose almost 4% last week after the company announced it is exploring various strategic alternatives, including a merger.
The company reported yesterday that net income declined slightly in its first quarter and the company has hired investment bankers to explore possible strategic alternatives.
The processor for the credit unions' CO-OP Financial Services said net income for the period was $10.5 million, or 22 cents a share, compared to $10.7 million, or 23 cents a share, for the first quarter last year, as revenues declined 4% to $134 million.
EFD said it has formed a review committee of its board and hired Goldman, Sachs & Co. and BlackRock Inc. to explore strategic options, after being approached by certain parties. EFD shares closed at $39.91.
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