The CUJ Daily
Freddie Mac Overstated Earnings
McLEAN, Va.-Freddie Mac reported it overstated its profits in 2001 by $989 million and understated profits in 2000 and 2002 by almost $5 billion as part of a scheme to smooth out earnings to please Wall Street.
The secondary mortgage market giant, in a long-awaited restatement of earnings for the past three years, also said it readjusted stockholders' equity upward by $6.7 billion; increased regulatory core capital by $5.2 billion; and revised the fair value of its net assets for 2002 upwards by $4.6 billion.
The restatement, even though most of it reflects a strong financial performance, is sure to fuel calls for regulatory reform over Freddie and its sister Fannie Mae because of the broad discrepancy in previously reported figures.
Mini-Cards Offered CUs
SEATTLE-PEMCO will begin offering new 1x 2-inch mini cards to its 240 CU card users.
The minitaure cards are often attached to a key ring. "They're companions to the conventional cards not replacements," said PEMCO CEO and President Dan Cook.
"And they appeal to busy people who want to grab their keys and go." The minicards share the same account number, credit limit, and expiration date as their conventional cards, but are not embossed.
Instead they have the account number thermo-imaged onto the front and magnetic stripes and signature panels with CVV2 codes on back. They cards work in machines that read the card's magnetic stripe, but not in machines where cards must be inserted.
"Essentially, cardholders will need to guard their key rings as they do their wallets," cautioned Cook. "But the lure of these little cards may prove powerful enough to increase card loyalty among cardholders. After all, convenience is always a big selling point."
NCUA Preempts Georgia Law
ALEXANDRIA, Va.-In an extension of the continuing battle between state and federal regulators, NCUA said its rules and regulations preempt certain provisions of Georgia's new Fair Lending Act aimed at combating predatory lending with respect to the activities of federally chartered credit unions.
"Based on recent judicial interpretation, we now take the position that any state law that affects the rates, terms and conditions of the loan is preempted by the Federal Credit Union Act and our lending regulation," NCUA said in a new legal opinion issued to David Sorrell, acting banking commissioner for the state of Georgia.
The NCUA preemption is the latest in a growing list of federal preemptions issued by NCUA, including recent state laws in California governing credit card disclosures, and predatory lending statutes in North Carolina, and the District of Columbia.
Welfare Debit Program Signs CU
SACRAMENTO, Calif.-Sacramento CU is among a half dozen financial institutions that have signed on to a new program allowing Sacramento County welfare and food stamp recipients to access their accounts free of charge through ATM and debit cards.
Under the program, about 26,000 families who receive monthly CalWORKS cash benefits, as well as 100,000 food stamp recipients, will have their payments electronically deposited in accounts at one of six area institutions that have agreed to provide fee-free service.
Other institutions providing fee-free access are: Washington Mutual, World Savings Bank, Bank of Rio Vista, First Northern Bank and American Express.
Corporate Merger Gets NCUA OK
ALEXANDRIA, Va.-The NCUA Board voted to approve the merger of Minnesota Corporate FCU into Mid-States Corporate FCU of Naperville, Ill., creating a corporate with almost $5 billion in assets and serving 1,000 natural person credit unions.
The corporate marriage, the second approved by NCUA in the past month (Pacific Corporate CU into WesCorp FCU) will reduce the number of retail corporates to 30.
The Minnesota/Mid-States deal is still contingent on approval from Minnesota Corporate members.