2002 Closes With Near Record Loan Rates...
WASHINGTON-A plunge in mortgage rates to their lowest in a generation propelled home lending to record levels and dragged down all loan rates to decades-lows in 2002.
Credit unions and other lenders made a record $2.4-trillion in home loans last year, more than half of it refinancings as all the most popular mortgage products shed more than 100 basis points (BPs).
Since last January the average rates for the benchmark 30-year loan dropped 110 BPs to 6.06%; the average for the 15-year loan fell 130 BPs to 5.32%; and the one-year arm rate sank to 4.02%, its lowest on record, according to Freddie Mac. Rates for new car, used car, credit card, and home equity loans also shed between 75 BPs and 85 BPs in 2002, helping credit unions and other lenders maintain strong growth in the face of the economic slowdown.
...Meaning Deposit Rates Also Hit Lows
WASHINGTON-Credit unions coped with lower-yielding loans in 2002 by slashing their savings rates to the lowest in record. Already low average rates on regular shares (savings) plunged 56 basis points to just 1.32; while rates on share draft (checking) accounts plummeted 36 bps to a paltry 0.78%; and money market accounts slipped 63 BPs to a meager 1.49%; while CDs rates all shed 65-70 BPs, according to DataTrac Corp.
The slashing of costs of funds didn't deter members from continuing to pull their savings from the falling stock market and pouring them into credit unions and other insured depositories, as an estimated $60 billion in new shares flowed into credit unions for the year. The slashing of the cost of these new funds helped credit unions to maintain an average return-on-average assets (ROA) to around 1.2, near an all-time high.
More Cal. CUs To State Charters
SACRAMENTO, Calif.-State regulators with the Department of Financial Institutions (DFI) ended 2002 pretty much the same way they ended the previous four years, by approving three more conversions of federal credit unions to state charters. Approved for state charters in the final days of December were: Capital Power FCU, Sacramento ($45 million); Medical Centers FCU, Los Angeles ($70 million), to be known as Focus One Community CU; and Riverside Campus FCU, Riverside ($65 million). That makes 12 California-based credit unions converted to state charters last year and more than 65 over the past six years.
Alleged Two-Time Robber Nabbed
ST. CLAIR SHORES, Mich-A man believed to have robbed the Family Services CU Dec. 18 was captured Saturday by Michigan State Police following a high-speed chase after he robbed the same credit union a second time. The robber, whose name was not released, entered the credit union Saturday morning around 10:30, showed a handgun, then left with an undisclosed amount of cash. Police chased the bandit at speeds up to 80 mph, before he was cornered in Detroit. The robber is believed to be the same one who held-up the CU two weeks ago.
Card Issuer In Settlement
ALBANY, N.Y.-First USA Bank, the largest issuer of Visa credit cards, has agreed to pay $1.3-million to 28 states to settle charges related to the way outside telemarketers sold products and services to the bank's customers. The unit of Chicago-based Bank One Corp. also agreed to change policies with third-party telemarketers to insure customers against future deceptive practices.
Pepper Spray Used In Attack
EUGENE, Ore.-A man attacked a member of SELCO CU with pepper spray while she was making a transaction at a Eugene-area ATM Saturday night. The woman, who was using a credit union ATM in the Santa Clara area of Eugene, drove to a store and called police. The thief got away with an undisclosed amount of cash.