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NCUA: ARROWHEAD TO CEASE UNDERWRITING NEW MBLS

SAN BERNARDINO, Calif.-Arrowhead Credit Union has ceased offering any new business loans, including credit cards and SBA loans, as the result of being placed into conservatorship by NCUA.

"While Arrowhead is in conservatorship, NCUA has determined this line of business is not in the best interest of members and does not make sense for the credit union," said NCUA spokesperson John McKechnie.

McKechnie noted that MBLs at Arrowhead have actually been "restricted" since June 2009 because the credit union's net worth had fallen below 6% [it is currently below 4%]. Arrowhead CU is processing pending loan applications and any loans and credit cards currently in place.

The conservatorship of Arrowhead has been met with criticism by some analysts who say the agency moved too quickly to take over the CU after it had turned the corner and was recording positive net income. But NCUA earlier issued a statement in response to those criticisms, saying some of the numbers being reported by Arrowhead were "inaccurate."

 

FOUR MORE BANK FAILURES ANNOUNCED BY OCC

WASHINGTON-FOUR MORE BANK FAILURES WERE ANNOUNCED RECENTLY BY THE OFFICE OF THE COMPTROLLER OF THE CURRENCY.

Among the failures were $282-million Bay National Bank in Baltimore, which is being acquired by Washington-based private equity firm Hovde Acquisitions. Also in Baltimore, the OTS closed $6.3-million Ideal Federal Savings Bank. The FDIC was unable to find a buyer for Ideal. Its failure will cost the fund $2.1 million.

In Port Chester, N.Y., $193-million USA Bank was closed, with the FDIC selling it to $504-million Customers 1st Bank in Phoenixville, Penn. The largest bank to fail was $644-million Home National Bank in Blackwell, Okla., which was closed by the OCC. It was acquired by $1.4-billion RCB Bank, Claremore, Okla., which assumed all the bank's deposits and $340.7-million in assets, while $260.8-million worth of assets were sold to $2.3-billion Enterprise Bank & Trust in Clayton, Mo. through a loss-share agreement.

Collectively, the four failures represent $1.1 billion in assets and will cost the Deposit Insurance Fund $160 million.

 

RECORD NUMBER SIGN ON FOR CDFI CERTIFICATION

NEW YORK-Nearly 40 credit unions have completed paperwork to become certified as Department of Treasury's Community Development Financial Institutions (CDFI), according to the National Federation of CDCUs, which has assisted in the applications.

According to the Federation, "this record demand for certification came from credit unions looking to tap into Treasury's Community Development Capital Initiative (CDCI), which is making low-interest, long-term secondary capital available to CDFI-certified community development credit unions (CDCUs). The Federation successfully met the increased demand by developing a methodology based on random sampling, which allowed it to determine target market eligibility much more accurately and efficiently than ever before."

The Federation noted that seven months into the current year, it is already the largest number of credit union CDFI certification applications ever submitted to the CDFI Fund in any given year. New CUs certified as CDFIs are Cooperative Center FCU, CoVantage CU, Foss Avenue Baptist Church FCU, Liberty County Teachers FCU, Northland Area FCU, Potlatch No. 1 FCU, and SunTide FCU.

 

FHFA ISSUES SUBPOENAS RELATED TO FANNIE, FREDDIE

WASHINGTON-The Federal Housing Finance Authority, as Conservator of Fannie Mae and Freddie Mac, has issued 64 subpoenas to various entities, seeking documents related to private-label mortgage-backed securities (PLS), in which Fannie and Freddie invested.

The documents will enable the FHFA to determine whether PLS issuers and others are liable to Fannie and Freddie for certain losses they have suffered on PLS. If so, FHFA expects to recoup funds, which would be used to offset payments made to Fannie and Freddie by the U.S. Treasury.

Fannie and Freddie were both placed into conservatorship on Sept. 6, 2008.

 

FDIC TAKES STEPS TO BOLSTER INFO-GATHERING POWERS

WASHINGTON-The FDIC board has taken steps to respond to criticism that it was hindered from using its backup examination powers aggressively enough during the financial crisis to protect the deposit insurance fund.

The FDIC's board unanimously approved a memorandum of understanding that would enhance the ability of the agency to gather information from primary regulators and conduct special examinations of large and risky insured depository institutions. The story was first reported by American Banker, an affiliate of Credit Union Journal.

The agreement was designed to address concerns raised by the inspectors general of the FDIC and the Treasury Department in a joint report in April on the failure of Washington Mutual Inc.

The report chiefly faulted the thrift's primary regulator, the Office of Thrift Supervision, yet criticized the FDIC for not using its backup examination authority more effectively to prevent the thrift's demise. Comptroller of the Currency John Dugan said it was important not to undercut the primary regulator's function. "I am very leery of creating a de facto system of 'supervision by committee,'" he said.

FDIC Chairman Sheila Bair said the agreement in theory would provide the FDIC with the tools it needs to do its job. "I want to note that while significant effort has gone into developing this revised agreement, the real work lies ahead in implementing its terms," she said.

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