Congress Moves To Protect Forgiven Debt
WASHINGTON–Congress passed legislation last week to protect mortgage borrowers from having to pay taxes on debt forgiven in a bankruptcy or restructuring, which is expected to prompt an increase in bankruptcy filings among troubled homeowners. The bill will spare homeowners for three years from taxes as high as 35% on canceled mortgage debt. Under current law, any forgiven mortgage debt is taxable as income.
“Homeowners who restructure their mortgages to avoid foreclosure should not be hit with a tax bill as a result,” Treasury Secretary Henry Paulson said. “This legislation will temporarily exclude homeowners who have restructured their mortgage loans from having to pay taxes on the mortgage debt forgiven.”
CUs Join With Banks In Distributing Drug Cards
MARION, Ind.–Hundreds of area residents picked up discount drug cards at local credit unions and banks, providing them with discounts of as much as 20% on prescription medicine.
The cards were distributed by Afena CU, Grant County Community FCU and Marion School Employees FCU, as well as several banks and are usable at Wal-Mart, Walgreens, CVS and Marsh.
The cards are being offered by Grant County in a deal with drug distributor Caremark, which has negotiated deals with the national chains.
The cards can be used by anyone, even if they have health insurance pay for their prescriptions, because sometimes the discount is greater than the co-pay for insurance.
3 CUs Go Federal, While 3 Others Move To State
CINCINNATI–General Electric Evendale Employees FCU was approved by NCUA to convert to a state charter to enable it to serve five surrounding counties, the federal regulator reported yesterday.
The $750-million credit union currently serves General Electric employees and about 300 select groups. “The bottom line is, this gives us a level playing field with other state charters,” Patrick Taylor, president of the credit union, told Credit Union Journal.
Also getting the go-ahead to switch to state charters were Max FCU, a $700- million credit union in Montgomery, Ala., and Emory FCU, a $90-million credit union in Decatur, Ga. Meantime, three state charters were approved to convert to federal charters: Lihue CU, a $60-million credit union in Lihue, Hawaii, 1st Choice CU, a $65-million Lincoln, Neb., credit union, and Covenant Health CU, $35 million, in Knoxville, Tenn.
2 Arizona CUs Win Grants
SAN FRANCISCO–The Federal Home Loan Bank of San Francisco said it has awarded $1.1 million in affordable housing grants to AEA FCU, which is sponsoring two projects in Yuma, Ariz. The awards were the only ones among $30.5 million in affordable housing grants awarded by the San Francisco Bank, or the $40.1 million awarded by four other FHLBs, none of which awarded a cent to a credit union project. The FHLBs are required by law to set aside 10% of their annual net income to fund affordable housing projects, but a tiny portion of the funding goes to credit unions, who make up more than 10% of the system now.
Separately, Arizona State Credit Union, Tuscon, assisted a local organization to win a $25,000 grant from the Federal Home Loan Bank of San Francisco. The grant will go to Tucson’s Community Housing Corp. for its subsidiary, Pima Computer Recycling, which uses workers from local homeless shelters in a computer recylcling program that seeks to keep electronic waste from landfills and return the PCs to use. The goal is then to move those workers back into full employment. ASCU obtained the Access to Housing and Economic Assistance for Development (AHEAD) grant and distributed the funds to the group.
$100,000 Deposit In Start-Up
SAN JOSE, Calif.–Meriwest Credit Union has made a $100,000 deposit with start up Community Trust Credit Union of East Palo Alto. The deposit was placed in a three-year CD at 0% APY and will serve as part of the assets CTCU needs to eventually open to the public. CTCU was created in partnership with the Northern California Urban Development Corporation to serve the families of low-income East Palo Alto.
Corrections & Clarifications
The Dec. 10 edition of Credit Union Journal indicated San Antonio (Texas) Credit Union had contracted with Aimbridge Lending Solutions. It should have read that San Antonio (Florida) Citizens FCU had contracted with Lending Solutions.
