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'Steady Stream' Of Lawsuits Over Reg E Non-Compliance

MADISON, Wis.-CUNA Mutual Group's Credit Union Protection Claims division reported there has been a steady stream of lawsuits filed against CUs for failing to comply with Reg E requirements for disclosing ATM fees, with 12 such class action lawsuits filed between mid-December and Dec. 31 alone.

The recent lawsuits allege missing signage on or at the ATM and incorrect fees disclosed on the sign at the ATM. CUNA Mutual reported that many of the lawsuits involve remote ATMs serviced by third-party vendors.

 

NCUSIF Closes Out 2010 With Its Worst-Year Ever

ALEXANDRIA, Va.-NCUA said last week that continuing losses projected for natural person credit unions forced it to raise its loss reserves to a new high of $1.3 billion at year-end, marking the NCUSIF's worst year ever. The reserve ratio for the fund began to decline again in December, even after NCUA added $930 million in premiums to reserves collected from credit unions over the past three months, according to NCUA CFO Mary Ann Woodson.

The falling reserve ratio, combined with lower yields being earned on the NCUSIF's $11-billion portfolio of Treasury securities points to an additional premium again being assessed CUs to rebuild reserves. Another big assessment to pay for costs related to corporates is also expected this year.

NCUA said it ended 2010 paying for 28 CU failures, the same as in 2009; however the cost of failures for 2010 was almost twice as much--$221 million--than the year before. About $1 billion of the reserves set aside for 2011 are unallocated, as several big credit unions continue to fend off insolvency.

 

Court Ruling A 'Positive For CUs'

WASHINGTON-An 8-to1 ruling by the U.S. Supreme Court in favor of a creditor who contested a bankruptcy filer's disposable income deduction is a "positive for credit unions" or any creditor of unsecured debt in a Chapter 13 bankruptcy, according to analysis released last week by CUNA. CUNA's Counsel for Special Projects, Michael Edwards, said the ruling in Ransom v. FIA Card Services involving a Chapter 13 bankruptcy repayment plan held that a debtor who does not make loan or lease payments may not take the car-ownership deduction, meaning the debtor has additional funds to repay creditors.

 

Aussie CUs Hit By Floods

BRISBANE, Australia-Credit unions here and in the state of Queensland are scrambling to provide assistance to members as floodwaters continue to take their toll. Abacus Australian Mutuals, the trade group for the country's 104 CUs and nine building societies, reported that CUs in northeastern Australia are dealing with a host of operational issues, including building sandbag barriers around branches. Some Australian CUs have offered to allow members to delay making loan payments and are adjusting credit contract terms for those affected by what's being called Australia's worst-ever flooding. The Worldwide Foundation for Credit Unions, which is part of the World Council of CUs, is offering relief funds to those affected. WOCCU is also accepting donations at www.woccu.org/give.

 

Illinois State CUs Get Fee Holiday

NAPERVILLE, Ill.-This state's 290 state-chartered CUs received a holiday on their 2010 4th quarter regulatory fee, which would be due this month to the Illinois Division of Financial Institutions, and will also receive a partial holiday on their 2011 first quarter fees to be paid to the agency in April. In total, an aggregate credit of $1,452,256 will be received by Illinois-chartered CUs, according to the Illinois CU League. The waivers are the result of legislation initiated by the ICUL to implement the court-approved settlement of the regulatory fee case filed against the State in 2004. In that case the court ruled that regulated institutions had been over-billed in previous years. The 2009 legislation also reduced the Credit Union Fund margin that triggers a credit back to credit unions.

 

CFCU Members Get $375K Bonus

BROOMFIELD, Colo.-Community Financial CU is paying a $375,000 special dividend to members based on interest on deposits and interest on loans. The $120-million credit union started the program in January 2008, and has returned more than $800,000 to eligible members to date.

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