Administration Hints At Ending Credit Line
WASHINGTON-Shares in secondary mortgage market giants Fannie Mae and Freddie Mac slumped last week after a U.S. Treasury Department official said the Bush administration would consider ending the $2.25-billion line of credit for the two companies. "If in the process of (legislation) Congress wants to take on that issue, we're open to having that discussion," said Assistant Treasury Secretary for Financial Institutions Wayne Abernathy. Shares in Fannie and Freddie slumped 3% and 4%, respectively after the news, before closing down 2% to $72.75 for Fannie, and 2.5% to $57.03 for Freddie. The Treasury credit line is considered critical to both entities, lowering their borrowing costs in the debt markets. Those costs are reflected in the pricing of billions of dollars of bonds issued by Fannie and Freddie to institutions, including credit unions.
Mich. House Passes Sweeping Reform
LANSING, Mich. - The state House unanimously approved a broad credit union reform bill last week, sending the package on for the governor's signature.
David Adams, president of the Michigan CU League, said he expects Governor Jennifer Granholm to sign the bill into law. "She has been supporting our bill from the beginning. I'm quite hopeful she will sign our bill," sad Adams.
The new law will provide Michigan's 275 state chartered credit unions with some of the most liberal field of membership allowances in the country, allowing individual boards to set their own FOMs, with the state regulator only stepping in when questions of safety and soundness occur. The bill, which takes effect on June 1, 2004, also has a unique wildcard provision authorizing the state regulator to allow state-chartered credit unions to engage in the same activities as federal credit unions or other financial service providers if the regulator determines the state-chartered credit unions would otherwise be at a competitive disadvantage. The bill would also authorize Michigan credit unions to provide limited services, including check cashing, money transfers, currency conversion and travelers checks to non-members within their fields of membership, and to make short-term payday loans of up to $1,000.
Ex-CU To Complete Sale To Public
CRANFORD, N.J.-Synergy Financial Group, the converted credit union formerly known as Synergy FCU, plans to complete the process of going public by selling the remaining shares in the company to the public (see related stories, right). The ex-credit union, which converted to a mutual savings bank in 1998, then converted to a hybrid structure, selling a minority stake, 43.5% to the public a year ago, but retained a controlling 53.5% stake in a mutual holding company. The former credit union plans to sell the remaining shares, as many a 5.4 million, to the public at $10 each, putting all of the institution into the public's hands. Depositors in the converted credit union will be given first crack at buying those shares.
Online Resources' Income Up
McLEAN, Va.-Online Resources Corp., a provider of Internet services to credit unions, reported net income of $364,000, or two cents a share, for its fiscal third quarter, compared to a $93,000 net, or one cent a share, for the same period last year. The company, which signed an electronic bill payment contract with U.S. Central CU earlier this year, said third quarter income rose 14% to $9.3 million, compared to $8.2 million for last year's third quarter.
Navy FCU, SECU Make Top 50
VIENNA, Va.-Navy FCU ranked number 18 in a list of the nation's top receivers of automated clearing house payments or transactions in 2002, according to data compiled by American Banker, affiliate of The Credit Union Journal. The only other credit union to make the top 50 was State Employees CU in Raleigh, N.C., coming in at No. 31.