Johnson: NCUA To Defend With 'Vigor'
ALEXANDRIA, Va.-NCUA Chairman JoAnn Johnson said the agency will "defend with vigor" its position following a lawsuit filed by the American Bankers Association against NCUA over its approvals of field of membership expansions for some CUs to serve underserved communities.
"The American Bankers Association is challenging the NCUA's regulatory jurisdiction and the United States Congress' statute as it relates to credit unions providing access to affordable financial services to Americans of modest means and living in underserved areas," said Johnson in a statement. "The agency will vigorously defend its position in this matter. The rights of consumers, especially those who have not realized the American dream of financial self-sufficiency, are at stake in this case.
As a co-author of HR 1151, the Credit Union Membership Access Act, U.S. Rep. Paul Kanjorski clearly stated that, 'By including explicit language authorizing multiple-group credit unions to include underserved areas in their field of membership, we are not in any way restricting the ability of the National Credit Union Administration to allow community and single-group credit unions to include underserved areas in their fields of membership.' "
Salary Survey: CU Pay Increases Steady In 2005
MADISON, Wis.-Credit union employees can expect consistent pay increases in 2005 but slightly lower increases in 2006, according to CUNA's 2005 Complete Credit Union Staff Salary Survey.
The survey said credit unions' 2005 budgeted base pay increases are similar to those received in 2004, where employees received an average increase of 3.7% for non-management and a 3.9% increase for management positions, but credit unions responding to the survey are projecting slightly lower pay increases for 2006.
On a positive note, fewer credit unions were reporting having to resort to salary freezes to keep costs down.
The report shows that 15% of credit unions with $1 million or more in assets froze salaries in 2003. That figure dropped to 10% in 2004, and is estimated at 7 percent for 2005. In comparison, just 2% of all U.S. employers are reporting salary freezes for 2005.
Even with slightly lower increases forecast for 2006, CUNA said industry experts predict that the U.S. is heading for a severe shortage of skilled labor, making it likely that within six years, highly skilled workers will be able to name their price as employers compete for scarce talent.
Fannie Mae Restating Earnings
McLEAN, Va.-Still recovering from a multi-billion dollar accounting scandal, Freddie Mac announced this week it will be forced to shave $220-million off of previously announced first half earnings because of a computer error.
Chief Financial Officer Martin Baumann said in the course of overhauling its computer systems, the company discovered that a technology program developed in 2001 was overvaluing interest income accrued on securities backed by variable-rate, home-equity loans Freddie purchased from private issuers.
The error will reduce first-half earnings from roughly $1.6 billion to $1.4 billion, the secondary market giant said. As a result of the new accounting glitch, the company will delay release of its third quarter earnings, which was expected at the end of this month. Freddie Mac has been working for the past 18 months to try to resolve a $5 billion accounting error.
Comptroller Charged With Theft
TALLAHASEE, Fla.-A former comptroller at Envision CU was charged last week with stealing almost $34,000 from member accounts and transferring the funds to his own accounts. James Guminski, 34, was charged with 12 counts of grand theft. Guminski was fired last summer after the thefts allegedly occurred.
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