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Banks Post Profit Growth, But Problem FIs Also Up

WASHINGTON-For the first time in nearly two years, the FDIC reported that banks and thrifts enjoyed asset growth during the third quarter of 2010.

With improvements in banks' securities portfolios in the third quarter, the agency's Quarterly Banking Profile said the 1.2% growth in assets-to nearly $13.4 trillion-was the first real growth in industry assets since fourth quarter 2008. Overall, institutions earned $14.5 billion, thanks in significant part to the lowest quarterly loss provision since 2007, of $34.9 billion. Total earnings were well over the year-earlier total of $2 billion, but about 7% below the profit in Q2. Despite the asset growth, loan balances still declined, for the eighth time in nine quarters.

The FDIC reported, however, that the number of banks and thrifts on the "Problem" list rose by 31 to 860, while assets of institutions on the list declined for the second straight quarter, to $379 billion. Meanwhile, the agency's insurance reserves to insured deposits rose by 13 basis points to negative-0.15%.


CU Trade Groups Press Fed To Withdraw Interim Rule

WASHINGTON-The credit union trade groups are pressing the Federal Reserve Board to withdraw an interim final rule that revises several Regulation Z mortgage loan disclosure requirements. Indeed, CUNA said in a letter to the Fed that it should and "impose a general moratorium on the overall Regulation Z rulemaking process that is currently in progress." CUNA said it has always supported "reasonable" pro-consumer disclosures, but that the disclosures required under the Fed proposal only add to the compliance burden on CUs and confuse consumers. The Fed proposal requires lenders to disclose how borrowers' mortgage payments will change over time so they may be alerted to the risks of payment increases before they consummate the loan.


Boulder Dam CU's Ferrence Dies

BOULDER CITY, Nev.-The $480-million Boulder Dam CU last week named Eric Estes interim manager following the death of CEO William "Bill" Ferrence, who had led BDCU for the past 36 years. Ferrence died after a six-month battle with cancer.

Estes said Ferrence hired him 17 years ago and he has been assistant manager ever since. "Bill was very open, very sincere," Estes said. "The credit union industry lost an icon. He lived and breathed the credit union philosophy. I never met or worked with someone who was the epitome of credit union values as much as Bill was." Ferrence is survived by his wife, Cheryl, and two sons, Will and Jim.


ABA Names Keating As CEO

WASHINGTON-The American Bankers Association last week named former Oklahoma Gov. Frank Keating to succeed Edward Yingling as president and CEO next year.

Gary Jones, the new president and CEO of the CU Association of Oklahoma, said he worked with Keating on the United Way several years ago. "He was a nice guy," Jones said. "He listened to us and didn't impact us in any way as far as a political agenda. We invited him to our events and he showed up every time."

Jones noted Keating was in office for just three months when the Alfred P. Murrah Federal Building in Oklahoma City was bombed. "Frank did an incredible job of rallying the state after that happened. ...Frank Keating was an important part of the healing process at that time."


Homebuyers To Get Assistance

MEMPHIS, Tenn.-Memphis Area Teachers' Credit Union said it is partnering with the local RISE Foundation on the "Home Run" program, which seeks to remove blockades to home ownership to those who are financially stable, but may have flaws such as previous bad credit, lack of down payment, or an inability to secure financing preventing them from owning a home. According to the $500-million MATCU, in the "Home Run" program, qualifying participants will rent a home owned by MATCU for two years, make regular monthly payments, and attend a financial education course administered by the RISE. After two years of successful payments, MATCU will sell the house to the renters at a cost below tax appraised value and apply those 24 months of rent as a down payment on their mortgage. The program is currently in the testing stage, with a full rollout scheduled for March 2011.


Correction & Clarification

Although Corporate America CU filed suit against individual directors and executives of U.S. Central Corporate, NCUA, as the conservator of U.S. Central, is not named in that suit.

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