Analysts Expect Fed To Raise Rates This Week
ARLINGTON, Va.-Experts in the credit union movement are expecting the Federal Reserve to lift short-term interest rates again at this week's meeting. "I think they're going to raise rates," said Jeffrey Taylor, an economist with NAFCU, saying Fed governors are still concerned about rising inflation and rapid economic expansion. "The Fed needs to keep hiking to keep up," Taylor told The Credit Union Journal. The Fed is expected to add another 25 basis points to the target rate for overnight FedFunds, which is currently 1.5%. The Central Bank added 25 BPs in June and August to lift the benchmark short-term rate from a five-decade low of just 1%. Taylor and other experts expect the Fed to keep lifting short-term rates the rest of the year and through next year, as well.
Wisconsin Banks Settle On Unpaid Back Taxes
MADISON, Wis.-The Wisconsin Department of Revenue said it has reached settlements with 26 Wisconsin banks over back taxes that are owed due to the use of out-of-state tax shelters. The Department of Revenue further said it is nearing agreements with another 30 banks. The WDR had sent letters to 320 banks offering a plan to settle, and 219 responded. At issue is a bank practice of using out-of-state-based subsidiaries to hold loans, bonds and other assets in states where there is no corporate income tax, specifically Nevada. Wisconsin's corporate income tax is 7.9%.
Calif.'s Small CU Can Use Alternative Audit
SACRAMENTO, Calif.-California Gov. Arnold Schwarz-enegger has signed into law a bill that allows smaller credit unions to file an alternative procedures audit for use by the commissioner of financial institutions. Previously, CUs of less than $10 million had to apply for a waiver in order to submit a fully certified CPA audit to the Department of Financial Institutions, according to the California league. The league had worked with the Committee on Banking and Finance on the bill.
Attempt To Steal ATM Fails
PITTSBORO, N.C.-An ATM that was pulled from the wall at a State Employees CU branch, along with a front-end loader used for the task, was abandoned after the attempted theft set off the alarm.
The thieves had transported the front-end loader on a 16-foot trailer that was also abandoned at the site, then wrapped a chain around the ATM and yanked it off of its foundation. But when the alarm sounded the ill-fated thieves fled in a Ford pickup truck, which, with headlights off, they ran into a pond a little way down the road.
Police hope to trace the bandits from the truck, which they believe belongs to one of them.
19-Year-Old Gets 10 Years
PITTSFIELD, Mass.-A 19-year-old man was sentenced to up to 10 years in prison for last January's robbery at Greylock FCU when he told tellers he had a bomb.
Harley Traverse, who was 18 at the time of the hold-up, pleaded guilty to armed robbery, threat to commit murder, and witness tampering for sending threatening letters from jail to two witnesses to the crime.
The prosecution read letters from three CU employees saying they still felt fear and nervousness every time an unrecognizable person walks into the credit union.
BofA Expands No-Fee Offer
CHARLOTTE, N.C.-Bank of America said last week it is expanding its no-fee home equity line of credit across the country. The product was rolled out in California, Oregon, Washington and Idaho in recent months and helped boost BofA's home equity volume on the west coast by 50%. BofA said it made $28 billion worth of home equity loans in the first half of the year, compared to $38 billion all of last year.