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Banking Industry Records Best Quarter Since Crisis

WASHINGTON-The banking industry had its best quarter since the start of the financial crisis, earning $29 billion in the first three months of 2011, thanks to the continued drop in loan-loss provisions, the Federal Deposit Insurance Corp. reported last week.

With provisions falling by 60% from a year earlier, to $20.7 billion, the industry's net income was about 66% higher than in the first quarter of 2010. It was the best quarterly performance since the second quarter of 2007. The FDIC, in its Quarterly Banking Profile, said lower provisions "remain key" to bank earnings.

While overall assets rose 0.7% in the quarter to $13.4 trillion, loan balances maintained their downward trend. Loans and leases dropped 1.7% from the previous quarter to $7.25 trillion. The agency said it was the fifth-largest percentage decrease in loan balances in the nearly 30 years since data has been available.

Net operating revenue remained weak, however, falling 3.2% from a year earlier to $5.5 billion. This was only the second time in 27 years that there was a year-over-year decline in quarterly net operating revenue, the FDIC said. Net interest income declined for the first time in more than 11 years, falling by $3.2 billion, while noninterest income was $2.2 billion lower than in the first quarter of 2010. Much of the decline in net operating revenue was concentrated at larger banks.


Coastal FCU Converts All Branches To Video Tellers

RALEIGH, N.C.-Coastal FCU has become one of the first credit unions to completely convert its entire network-13 branches in all-to video tellers. The $2-billion credit union has installed 60 video teller terminals from uGenius. Coastal begin pilot testing video tellers in 2003 and began installing them in its branches in 2008.

The credit union maintains actual people -branch managers, loan officers and other service reps-at each of the branches to handle members' non-transactional needs.


BofA Settles Suit For $410M

CHARLOTTE, N.C.-Bank of America Corp has settled for $410 million in a massive class action suit in which it had been accused of charging excessive overdraft fees to more than a million debit card customers. BofA is the first to settle among the 35 banks named in the suit, which claims that banks waited to process charges until days after a purchase was made, when users' accounts were depleted, or manipulated charges so that large purchase that would deplete an account would be processed first, triggering overdraft fees on smaller purchases made earlier.


Workshops For Small CUs Set

ALEXANDRIA, Va.-NCUA's Office of Small Credit Union Initiatives will offer three workshops this month, focused on issues facing small CUs, its Consumer Protection Office, duties of boards, exam issues, and more. Workshops are scheduled for Portand, Maine on June 2, Salt Lake City on June 11, and Atlanta on June 23. For info: www.ncua.gov.


Program For High-Tech Workers

SAN JOSE, Calif.-Technology CU has introduced a new program aimed at providing financial services high tech workers who have recently come to Silicon Valley and foreign nationals who have established residency or gained citizenship. The Global Members Program consists of a core set of services that includes: CreditStart, a loan program designed to assist employed individuals who are new to the U.S. with limited or no credit history, foreign remittance, international wires, and travel insurance.


Suit Against CU Is Settled

KANSAS CITY, Mo A federal judge has approved a $2.6-million class action settlement against Kansas Teachers Community CU, in which borrowers claim loans they obtained through the credit union's participation in the Centrix Financial indirect loan program violated the state's Uniform Commercial Code and Merchandising Practices Act, resulting in the repossession of their vehicles. Borrowers are to receive a cash payment averaging approximately $9,315 plus a write-off of any remaining deficiency or account balances.


Corrections & Clarifications

A story in the May 23 issue should have clarified that FinanceGenius provides free online lending applications with the purchase of a system, but there is typically a minimal charge for each loan application that is submitted by a member for review.

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