Suncoast Schools Chooses FIS

AUSTIN, Texas - Amplify FCU here has turned Internet banking up a notch with a credit-union owned, web-based money management tool called MoneyTracker, upstaging the much-anticipated release this month of a similar tool by Intuit, called FinanceWorks.

CUISPA Is Exploring IT Risk

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HONOLULU - After 40 years NAFCU has arrived.

Feel it's time for you to hear my side of the story on "the little scuffle" that broke out between Hubert Hoosman and me at the GAC back in February. The "dust up" occurred downstairs around the exhibit area near the Washington Hilton coffee shop. Evidently, several of you who witnessed the brouhaha assumed it was a "racial incident" and, knowing Hubert Hoosman to be a fine gentleman, readily assumed that I had provoked the whole thing! Well, you're right, it was my fault. But, just perhaps, you may have reached the right conclusion for entirely the wrong reasons. Let me explain.

They may be secretive, but at least they're consistent.

WAVERLY, Iowa—The Atomic Employees Credit Union has added Ross County to its field of membership, bringing the total number of counties it serves to nine. Though originally founded to serve local atomic plant workers, the credit union’s field of membership has evolved through several mergers. In addition to the newly added Ross County, the CU currently serves anyone who lives, works or attends school in Pike, Scioto, Jackson, Highland, Gallia, Lawrence, Brown and Adams counties.

SAN ANTONIO, Texas–Southwest Business Corporation (SWBC) announced it has formed a reinsurance company, called SWBC RE, Ltd. in Bermuda. SWBC officials said the company has experienced tremendous growth over the past three years and found it necessary to establish SWBC RE, Ltd. to enhance the products and services they provide to their clients. SWBC RE, Ltd. will be reinsuring business from a variety of insurance partners and companies. The first product that will be reinsured by SWBC RE, Ltd. will be contractual liability contracts associated with the sale of debt protection products by their financial institution clients. SWBC also will be the administrator on the Debt Protection business out of their San Antonio office.

ST. LOUIS, Mo.–Campaign contributions here are again limited to specific amounts per candidate and per election, after the state Supreme Court unanimously ruled that repealing campaign contribution limits is invalid, according to the Missouri Credit Union Association. This decision follows a Cole County Circuit Court ruling that upheld the 2006 Missouri General Assembly’s removal of caps on campaign contributions. The law also contained a ban on fund-raising during the state legislative session, which runs from early January through mid-May. However, the Cole County Circuit Court removed that ban on fund-raising in its decision. The state Supreme Court said the lower-court judge should have restored the campaign limits when he tossed out the blackout period for fund-raising because splitting the two elements ran counter to the Legislature’s wishes, as lawmakers had rejected proposals repealing the limits without a blackout period. No decision has been made on whether candidates must return any of the money they have collected since January. The Missouri CU Association is advising CUs to take note of these limits when considering political contributions, and to use the 2006 campaign finance limits until further notice.

HONOLULU–NCUA is putting together a proposed rule that could prevent attempted hostile takeovers of credit unions, such as the one that lit up the credit union movement in controversy this spring. “This is something NCUA is looking at; we have an open mind about it,” said NCUA General Counsel Bob Fenner, during NAFCU’s annual convention last week. While NCUA has no formal rules governing non-friendly takeovers, it was the agency’s action that ultimately killed the controversial bid by Wings Financial FCU to take over Continental FCU. It was NCUA’s ruling that Wings’ $200-per-member offer to support the takeover ran afoul of existing agency rules which bar the pre-merger promise of a dividend. “In the end, we concluded that (the cash offer) was in the form of a merger dividend,” said Fenner. The resulting elimination of the cash offer forced the $1.6 billion Wings Financial FCU to abandon its hostile bid for the much smaller, $180 million Continental FCU, which enraged a credit union movement that prides itself on cooperation. One possibility under discussion: the regulation of direct communications from management of one credit union to members of another, or of communications to members of a credit union by an outside entity, like a bank that may want to acquire a credit union. The process is still in the early stages, but Fenner suggested that interested credit union executives and directors contact the agency with recommendations. “It’s too early for me to speculate (on a proposal),” he said. “We’ll be making a recommendation and alternatives to our board in the coming months.”

HONOLULU–NCUA’s proposed new rules giving it authority to step in in credit union bylaws disputes is not intended to be used capriciously, said NCUA board member Gigi Hyland. Hyland said the new rules, which have not been embraced by most credit unions and which were proposed after a number of credit unions ignored their own bylaws during conversion or attempted conversions to bank charter, are about “member rights.” But she added, “this will not become the issue du jour to examine you.” Hyland, who is also an attorney, stressed that the rule’s preamble limits NCUA’s authority and is fairly narrow in scope.”

HONOLULU–Two NCUA Board members said they share concerns over the disappearance of smaller credit unions. NCUA Vice Chairman Rodney Hood said the agency is “marshalling its resources” with workshops, technical assistance grants, partnerships with the National Federation of CDCUs and more, all aimed at making the small credit unions more vibrant. “We recognize in this current environment that the needs of a small credit union are vastly, vastly different from those of a large credit union,” Hood told NAFCU’s annual meeting. “I want to see small CUs succeed because I think they are the ones that really have the ability to touch the underserved, going against the payday lenders. They, in many instances, are the initial institutions that many of our underserved populations use.”

HONOLULU–Credit unions that have been through the wringer with their examiner when it comes to Bank Secrecy Act compliance should not expect that to change anytime soon. NCUA Board Member Gigi Hyland told federal credit unions during NAFCU’s annual meeting that BSA compliance will remain a focus of examinations, although she said “a move is afoot to make sure the regulations we have in place and are enforcing are aligned with the risk an institution is taking.” Other areas where the agency will be focusing include due-diligence on third party contracts, according to Hyland. “Examiners are focusing here because we’ve seen some instances where credit unions have been caught between a rock and hard place…when something has gone awry,” she said.

HONOLULU–Despite widespread opposition by credit unions, NCUA is expected to pass initiatives aimed at increasing transparency in credit union operations, two NCUA Board members indicated during NAFCU’s annual convention last week. “Democracy, I believe, runs on information,” said NCUA Board member Rodney Hood, of a proposal to increase member access to internal credit union records. “It’s important to member/owners to have access to be informed member/owners.” “The (proposed) rules will allow them to know all that they need to know in making an informed decision,” said Hood, during a discussion with fellow Board member Gigi Hyland and NAFCU Chairman John Milazzo, president of Campus FCU. The member access proposal, which has been widely opposed by credit unions during the public comment period, would set specific standards for the kinds of documents open to member scrutiny and thresholds for member petitions to obtain the records. But Hood sought to ease the concerns of managers and directors by insisting the proposal is aimed at giving members access to minutes of board and committee meetings, and will not open up confidential member of employee records to member scrutiny. “No one is going to have access to personnel or member records,” he stated.

WASHINGTON–A bill introduced in the House Thursday would expand federal credit union powers to reach the underserved by allowing all charter types to once again add underserved areas to their fields of membership. “This legislation underscores that credit unions are a powerful ally for underserved and underserved and low-income consumers,” said Fred Becker, president of NAFCU, which worked to get the bill introduced. A federal court ruling in 2005 requested by the bankers barred community chartered and single group credit unions from adding underserved groups to their FOMs. The court sided with the bankers who insisted NCUA violated provisions of HR 1151, the CU Membership Access Act, which specifically allowed multiple group credit unions to add underserved areas, but did not mention community charters or single group credit unions. A similar provision is also included in the CU Regulatory Improvement Acts, or CURIA, which has been introduced in each of the last three congresses.

WASHINGTON–In testimony prepared for delivery Thursday at a hearing of the House Judiciary Committee’s Antitrust Task Force, Mallory Duncan, senior vice president and general counsel of the National Retail Federation and chairman of the Merchants Payments Coalition (MPC), called the collective setting of interchange fees by Visa and MasterCard a violation of federal antitrust laws that costs merchants and their customers more than $36 billion every year. “The collective setting of interchange fees by Visa and MasterCard represents an on-going antitrust violations and it costs merchants and their customers tens of billions of dollars annually,” Duncan said. “These fees are in addition to the late fees, over-the-limit fees and other card fees with which consumers are only too familiar.” The interchange fee is a percentage of each transaction that Visa and MasterCard and their member banks collect from retailers every time a credit or debit card is used to pay for a purchase. The fee varies with type of card, size of merchant and other factors, but may be up to 2% or more. Visa and MasterCard banks collected more than $36 billion in interchange fees last year, up 17% from 2005 and 117% since 2001. According to a recent study cited by the MPC, the credit card companies and their banks spend only about 13% of the interchange fee on actual transaction processing. The rest goes for marketing, profit, and other items such as rewards programs.

WASHINGTON–Federal agencies charged with regulating the banking and credit union industries released a joint statement regarding Bank Secrecy Act and Anti Money Laundering efforts last Thursday. A release said the purpose of the Interagency Statement on Enforcement of Bank Secrecy Act/Anti-Money Laundering Requirements is to “provide greater consistency among the agencies in enforcement decisions in BSA matters and to offer insight into the considerations that form the basis of those decisions.” The statement is intended to make clear that agencies “may take formal or informal enforcement actions to address other concerns related to BSA or anti-money laundering, depending on the facts.” The statement said that the appropriate agency will issue a cease and desist order against a financial institution in case of a “failure to establish and maintain a reasonably designed BSA Compliance Program” or a “failure to correct a previously reported problem with the BSA Compliance Program.” The joint statement also reiterated the government’s position that suspicious activity reports (SAR) and their proper record keeping form the “cornerstone” of the BSA reporting system.

COLLINSVILLE, Ill.–Scott CU is participating in the State of Illinois’ Green Rewards Program, offering a $1,000 rebate on financing for hybrid vehicle purchases. The Green Rewards program was announced here recently by State Treasurer Alexi Giannoulias. Through the program, the state has partnered with financial institutions throughout Illinois to issue $1,000 rebates for the purchase of hybrid vehicles. The treasurer’s office will fund the program by depositing money at local financial institutions at a below-market interest rate. The money those institutions save in interest is passed to the consumer in the form of the $1,000 rebate when they get an auto loan to purchase a hybrid. There are 16 types of vehicles that are eligible for the program. To participate in the program, buyers must secure a car loan from a participating financial institution, such as Scott Credit Union, for a new hybrid, eligible electric or fuel cell vehicle.

COLUMBIA, Md.–The Maryland and District of Columbia Credit Union Association will be meeting this afternoon to discuss how a recent ruling regarding where property taxes can be paid will impact its member credit unions, according to Maureen McAtee, vice president of Maryland governmental affairs, for the MDDCCUA. The ruling, which could have statewide impact, is causing residents in area towns to be notified by local officials that credit unions no longer can accept their property tax payments. That’s after they discovered there was no provision for credit unions in the state statute allowing banks and S&Ls to collect tax payments. The Allegany County finance director asked for and received a legal opinion from the state treasurer on whether using credit unions is permissible and was told they are not. At least two credit unions serve this rural area in far western Maryland, but bank branches are sparsely located. County officials said it will take an act by the Maryland legislature to change the law.