Public Service CU Wins Bidding for Norlarco
ALEXANDRIA, Va.–NCUA said last week it has chosen Public Service CU, of Denver, as the winning bidder for the remnants of the failed Norlarco CU.
NCUA said the bid by the $650-million CU was the best of the three submitted for Norlarco, one of three credit unions that have failed because of their exposure to Florida real estate speculation. The other bidders for Norlarco, which now has $290 million in assets, were Belco FCU and Ent FCU.
Under the deal, NCUA, which has been running Norlarco under conservatorship, will sell the credit union’s healthy assets, eight branches and more than 25,000 member accounts, to Public Service CU, and the federal agency will assume the credit union’s bad assets, some $200 million of Florida real estate loans.
NCUA has sold off the other two CUs in the Florida land deals, Huron River Area FCU and New Horizons Community FCU, in similar deals over the past few months.
The three deals have left NCUA with more than $300 million worth of troubled loans in the Florida land bust.
NCUA Board Renews 18% Interest Rate Cap
ALEXANDRIA, Va.–The NCUA Board last week renewed the rule setting the maximum allowable interest rate for all credit union loans at 18%.
The renewal of the 18% rate cap will allow credit unions some flexibility in setting rates, while also continuing to set credit unions apart from other competitors in the financial services industry.
Credit unions are the only federally insured institutions whose regulator sets a maximum allowable interest rate.
The 18% rate covers all loans made by both federal and state chartered CUs.
Data Breach Bill Hearing Held
FEDERAL WAY, Wash.–Woodstone CU CEO Susan Streifel testified on behalf of CUs and other proponents of legislation that would make the costs associated with data breaches such as the massive TJX debacle the responsibility of the data breacher.
The proposed legislation, written by the Washington Credit Union League, requires negligent data breachers to reimburse card-issuing financial institutions for the costs associated with protecting their members or customers following a data breach.
WCUL said the bill would deter financial fraud and identity theft in three ways: first, by requiring businesses accepting plastic cards to encrypt or dispose of sensitive consumer data promptly; second, by making businesses storing sensitive consumer data who fail to meet basic security standards responsible for the costs of consumer notification and card replacement; and third, by establishing a safe harbor for businesses who meet basic security standards.
Au Giving Away 100g of Pure Gold
FEDERAL WAY, Wash.–Ascend United (Au), a broker of credit union debt, is giving away one 100-gram bar of .999 pure gold to one lucky credit union employee who registers on its newly launched website Ascendunited.com during the three-week period between Jan. 24 and Feb. 14.
According to Phillip Slater, program manager for Au, the “Au: the Gold Standard” promotion will fulfill two goals set for the company by its board of directors: assist in Au’s rebranding effort and increase awareness about company services and the straight forward world of debt sales.
“Ascend United just completed the launch of its website, which has undergone an extensive redesign to help financial institutions better understand debt sales, how to participate in our aggregated sales, and to facilitate our services to clients,” said Slater.
The sale of debt–charged-off and performing–has been a common and accepted practice in the banking industry for years; however, most smaller financial institutions have been left out due to the small size of the loan pools and their distrust of the buying community. According to Slater, Au changes that equation.
Ascend United is a CUSO of the Washington Credit Union League.
The winner will be announced the week of Feb. 17.
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