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NCUA: Zero Risk-Weights To

Be Assigned To Treasuries

ALEXANDRIA, Va.-In the wake of the downgrade in U.S. debt by Standard & Poor's, NCUA Chairman Debbie Matz issued a statement last week in conjunction with other federal agencies seeking to "reassure their regulated institutions that risk weights remain unchanged." NCUA said it will continue to assign zero risk weights to credit union investments in Treasury securities, NCUA Guaranteed Notes (NGNs), and other securities issued or guaranteed by the U.S. government. The agency said its NGNs retain their current AAA rating, but have been placed on a "negative credit watch" by Standard & Poor's and could be downgraded as a direct result of S&P's downgrade of U.S. long-term sovereign debt.

"Any future downgrade of NGNs would have no impact on NCUA, since all NGNs have already been collateralized and sold. The proceeds from NGN sales provided liquidity to the corporate credit union system and reduced overall costs of the corporate stabilization program," NCUA said.

Special Report :Steps CUs Can Take To Fight Fraud

WEST PALM BEACH, Fla.-In this issue Credit Union Journal offers a Special Report on Fraud risks and what credit unions can do in response.

NCUA Files Suit Against

Goldman Sachs Over Losses

ALEXANDRIA, Va. -NCUA filed suit yesterday in California against New York firm Goldman Sachs & Co.,alleging violations of federal and state securities laws, as well as misrepresentations in the sale of securities to now-failed U.S. Central and Western Corporate federal credit unions. It is the fourth such suit the agency has filed ini the wake of losses on investments by the corporate credit unions it has placed into conservatorship.

The suit asks for damages in excess of $491-million from Goldman Sachs, bringing the total sought in the four lawsuits filed to date to nearly $2 billion. NCUA said in a statement that its suit "claims the sellers and underwriters of the questionable securities made numerous material misrepresentations in the offering documents. These misrepresentations caused the corporate credit unions to believe the risk of loss associated with the investment was minimal, when in fact the risk was substantial.

The agency indicated that as many as 10 such suits may ultimately be filed.

Co-op Bank Set To Step In

ARLINGTON, Va.-The National Cooperative Bank and The Members Group, a subsidiary of the Iowa league, last week formalized an agreement in which the NCB will provide for the delivery of correspondent services to Iowa credit. As Credit Union Journal reported in November, 2010 when the relationship was first announced, the agreement is designed to fill the void of services provided by Iowa Corporate Credit Union, which is being wound down. The agreement "delivers an economically attractive solution to Iowa credit unions that offers better rates than the Fed and keeps the cost of services generally consistent with pricing today," the two organizations said in a statement. Credit unions will continue to work with staff at The Members Group.

Visa To Accelerate EMV Migration

SAN FRANCISCO--Visa has announced plans to accelerate the migration to EMV contact and contactless chip technology in the U.S.. "The adoption of dual-interface chip technology will help prepare the U.S. payment infrastructure for the arrival of NFC-based mobile payments by building the necessary infrastructure to accept and process chip transactions that support either a signature or PIN at the point of sale," Visa said.

The chip technology will boost the adoption of mobile payments and also make payments more secure through dynamic authentication, Visa said, adding, "By reducing static authentication, we diminish the value of stolen cardholder data, benefiting all stakeholders."

Currently, United Nations FCU in New York is the only credit union issuing EMV cards, but last week PSCU Financial Services also announced it would be expanding availability of EMV cards, as well.

Visa said its plan to encourage the U.S. adoption of dynamic chip authentication technology will include three initiatives

Reminder On ATM Disclosures

MADISON, Wis. - As Credit Union Journal has reported, ongoing lawsuits continue to be filed against financial institutions for failing to properly disclose ATM fees. As a result, CUNA Mutual Group issued a statement urging credit unions to take simple, preventative steps to help avoid costly fines and legal fees.

The lawsuits, which began in 2009, allege violation of section 205.16 of Regulation E. This provision applies when a consumer initiates an electronic funds transfer or balance inquiry at an ATM owned or operated by an institution that does not hold the account to or from which the transfer is made, or about which an inquiry is made.

As of June 30, CUNA Mutual reported it had 44 open claims related to class action lawsuits alleging violations of Reg E. The suits span 14 states with litigation and loss exposure expected to exceed $3 million.

CUNA Mutual reminded that when credit unions charge a fee to a consumer using a non-credit union ATM network card or debit card, section 205.16 of the regulation requires:

* Posting a sign in a prominent and conspicuous location on or at every ATM owned or operated by the credit union stating that a fee will (or may) apply, and

* Disclosing the fee on the terminal screen or paper notice before the consumer is committed to paying the fee. It is not necessary to include the amount of the fee on the sign.

* Printing the amount of the fee on the receipt.

Study: CU Has Cut Robberies

DURHAM, N.C.-A new study has concluded that robberies against Latinos in Durham, N.C., decreased approximatelly 14% between 1999 and 2002, the latter being the year Latino Community Credit Union opened. The study, from the University of Virginia, said the $103-million LCCU deserves much of the credit for reducing robberies against Latinos, who were previously perceived as likely to be carrying large amounts of cash, as many did not have a relationship with a financial institution. The study found that the credit union is now serving 55,000 people, 75% of whom did not have a deposit account prior to the credit union opening.

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