Airline, CU Reach Settlement
APPLE VALLEY, Minn.-Wings Financial FCU, formerly known as NWA FCU, said it has settled a suit with its financially ailing corporate sponsor over the use of Northwest Airlines' well-known name and logo. Under the settlement, the $1.6-billion credit union is believed to have limited rights to the NWA signature while it phases out its old name for its new one, sources said. Both sides confirmed the settlement but refused to discuss terms of the deal. Northwest Airlines, which has been struggling like all of the major airlines, proposed last year that the credit union pay it millions of dollars in licensing fees for use of the logo and airline-owned offices. As part of a plan to diversify outside of the troubled sponsor, the state's largest credit union obtained a TIP charter earlier this year allowing it to serve all employees of the air transportation industry nationwide.
FDIC To Trim 600 Positions
WASHINGTON-The FDIC, the chief banking regulator, said recently it plans to trim its staff by up to 12%, or 600 positions, by the end of next year. The staffing cuts will come through buyouts, retirements and layoffs, the agency said. In a memo sent to employees the banking regulator said some divisions no longer have a workload that justifies staff sizes, like its 515 employees working on receiverships, when about a dozen banks fail each year. The National Treasury Employees Union, which represents FDIC employees, said it was disappointed the agency did not consult with the union before issuing the memo to employees.
Mortgage Rates Slide Slightly
McLEAN, Va.-Long-term mortgage rates declined again last week to their lowest levels since April, according to Freddie Mac. The average for the 30-year, fixed-rate mortgage dipped to 5.64% last week, from 5.69% the week before; while the average for the 15-year, fixed-rate loan fell below 5% to 4.84%. ARM rates also declined, with the average for the one-year ARM slipping to 3.96% from 4.02%.
Privatization Grows Closer
RESTON, Va.-As part of its unprecedented privatization, Sallie Mae has wound down its government sponsored enterprise charter and will no longer fund its operations through the GSE. The student loan giant, formally known as SLM Corp., announced it plans to complete the privatization, which some see as a model for potential privatization of GSEs Fannie Mae and Freddie Mac, as early as year-end, almost four years ahead of schedule. As part of the wind-down of the GSE charter, the company has been buying back its GSE debt, repurchasing $1.7 billion worth in a tender offer ending Sept. 30, with plans for additional repurchases over the coming months.
The repurchase program has been costly, costing $103 million in losses the first offer, and projected to cost as much as $127 million in additional losses. Congress chartered Sallie Mae, originally the Student Loan Marketing Association, in 1972 to create a secondary market for guaranteed student loans. Legislation was passed in 1996 to privatize the company and wind down its GSE charter. Since then the company has morphed into the biggest originator of student loans in the country, in competition with credit unions and other traditional customers, and has branched out into new areas, like investing in airplane leases and home mortgages.
NY State Charters Get Parity
ALBANY, N.Y.-Gov. George Pataki last week signed into law a bill giving New York's 34 state-chartered credit unions parity on membership rules with the 530 federal credit unions in the state. The legislation increases the number of persons from an employer group that may be added to an FOM from 500 to 3,000; amends the definition of immediate family member to include siblings, stepparents, stepchildren and step-siblings, and permits credit unions to make business loans to organizations that are members of the CU subject to the same dollar amount limitations that apply to natural person members receiving loans.
Offices Named After Ex-CEO
TEXAS CITY, Texas-Amoco FCU said it has honored its long-time president and CEO George Ballis by naming its offices here after him. Ballis, who originally worked for its sponsor, Amoco Chemical and Amoco Oil Refinery, spent more than 40 years at the credit union, becoming assistant manager in 1965, then CEO in 1973. He retired in 1998.
