NCUA Decision Could Have Broad Implications
ALEXANDRIA, Va.-In a decision that could have broad implications, NCUA said last week it has approved a request from an unnamed federal credit union to provide loan processing and underwriting services for a major university under its incidental powers rule.
In a new legal opinion letter, the agency said its incidental powers rule will allow the credit union to do credit checks, verify income and employment, ensure compliance with the USA Patriot Act, provide decisions on loan suitability, discuss the applications with borrowers, and send out adverse action forms for denials, all in exchange for a fee.
The services would be provided for private loans provided by the university to students and their parents. Even though loan processing is not expressly approved under the incidental powers rule, it does satisfy the requirements of the rule, specifically that the business of FCUs is "to provide financial services to their members," NCUA said.
The university and its students are within the credit union's field of membership, but whether the students are members is not material because the service the credit union would perform qualifies as an incidental power, the federal regulator said.
Michigan CU Gets Go-Ahead To Convert
GRAND RAPIDS, Mich.- State and federal regulators have given the go-ahead to Lake Michigan CU to hold a member ballot to convert the $1-billion credit union to a mutual savings bank, the largest credit union switch yet. The credit union's 100,000 members will receive their second of three disclosure packets early next month detailing the reasons for the charter change, and will receive mail ballots the first week in November. The 30-day vote will culminate in a special meeting of the members on Dec. 8. Plans call for the credit union to convert to a mutual savings bank, then to go public in an initial public offering, down the road.
USA FCU Seeks To Expand
TROY, Mich.-USA FCU has applied to state regulators to convert to a state charter that would encompass more than 2.2-million residents in Oakland and Macomb counties and several other communities where it currently serves. The proposed charter switch of the $650 million credit union would be the first in Michigan in more than six years and the largest ever. Under new state rules, the credit union would be required to give up the more than 150 select groups it currently serves in order to serve the new community base.
HUD's Jackson To Keynote
WASHINGTON-HUD Secretary Alphonso Jackson will deliver the keynote address at NCUA"s Access Across America Economic Empowerment Summit in Tampa. The summit will be held at the Hyatt Regency Tampa on Thursday, Oct. 14, 8:00-4:30p.m. Other government agencies participating in the summit, include the U.S. Departments of Agriculture, Treasury, Federal Deposit Insurance Corporation, Export-Import Bank of the United States, and the Neighborhood Reinvestment Corp. Registration is free.
For info: www.ncua.gov.
No Sharing Bonds, Says NCUA
ALEXANDRIA, Va.-Each federally insured credit union must be insured under its own corporate name under federal rules and regulations, according to NCUA. The agency, in a new legal opinion issued to CUNA Mutual Group, said a CUSO that provides management services for several credit unions may not purchase a single fidelity bond that names all participating credit unions as insured. The main reason for requiring individual coverage, said NCUA, is to ensure other CUs' coverage does not conflict with or dilute an individual CU's coverage.
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