WASHINGTON -- Mortgage rates rose slightly this week, for the first time in six weeks, according to Freddie Mac. The average for the 30-year, fixed-rate loan moved to 6.12% this week, from 6.11% last week; while the average for the 15-year, fixed-rate mortgage inched up to 5.86%, from 5.84%. ARM rates also climbed slightly higher, with the average for the one-year ARM rising to 5.45%, form 5.43%, and the average for the five-year ARM holding steady at 5.12%. “Mixed economic reports have kept mortgage rates from making any drastic changes this week," said Frank Nothaft, chief economist for Freddie Mac. He predicted long-term rates will remain under 7% in the new year.

PORTLAND, Ore. – TRM Corp., which has been fighting to remain solvent, said yesterday it has agreed to sell almost all of its Canadian ATM operations for about $15 million. The deal came a day after the troubled ATM operator agreed to sell its core copier business for $9.2 million. Proceeds of both asset sales will be used to pay down debt. TRM is the owner or operator of more than 15,000 ATMs, about 6,000 of which are part of and are branded by the credit union-owned CO-OP Network. TRM has been trying to climb out of the red, and announced a massive third quarter loss of $101 million due to the impairment of assets.

ALEXANDRIA, Va. -- The NCUA Board last week added another permissible investment to the limited options for federal credit unions. The action will allow credit unions to invest in short-term (30-day) notes collateralized by whole mortgages, a thriving secondary mortgage market estimated at as much as $30 billion. Under a rule allowing the new investment, such investments must be with highly rated counterparties and credit unions must limit their concentration, in order to reduce exposure.

FALLS CHURCH, Va. – ENCORE Electronic Service Cooperative announced yesterday that its members overwhelmingly approved a merger of the regional electronic funds network for credit unions with CO-OP Financial Services. ENCORE, based in the Washington suburb of Falls Church, Va., is owned by 124 area credit unions, including Apple FCU (Virginia), Navy FCU (Virginia), Pentagon FCU (Virginia), Congressional FCU (Washington), Fort Belvoir FCU (Virginia), White House FCU, and State Employees CU of Maryland. The deal cements the position of CO-OP as the largest credit union-owned electronic funds network, with more than 2,000 member credit unions and surcharge-free access to more than 25,000 ATMs. ENCORE has about 320 ATMs, most of them already available over the CO-OP, and a dozen shared branches it will add to the CO-OP Network, which already claims 1,850 CUs and 25,000 branded ATMs across the country.

WASHINGTON – The banking lobby and its allies were assailing NCUA’s new rules on conversions to banks yesterday, even before the ink was dry–making it likely the provisions will be challenged in court. “For the third time in three years, NCUA has imposed additional regulatory burdens on credit unions that seek to become mutual savings banks. This rule does a disservice to their members and undermines the clear intent of Congress,” Edward Yingling, head of the American Bankers Association, stated minutes after the NCUA Board voted the rule. Robert Freedman, a Washington lawyer who has engineered most of the 35 credit union conversions, said he thought the purpose of the new rules is due ‘chill’ growing enthusiasm among some credit unions to switch to bank charters. “They want people to be so afraid to do it,” Freedman told The Credit Union Journal. The rules will require credit unions to notify members before the Board votes to convert; facilitate communication among members; provide access to books and records to members questioning a conversion; shorten the balloting to 30 days from the current 90 days; and require new boxed, or standard disclosures, stating that credit unions generally provide better rates on loans and savings than banks.

ALEXANDRIA, Va. -- NCUA said yesterday it expects to pay all federally insured credit unions a dividend on their NCUSIF deposit, for the first time in six years. The dividend is expected to be as much as $150 million, the equivalent of about 2.5% on each credit union's NCUSIF deposit, according to Dennis Winans, the agency's chief financial officer. Payment of the dividend will be allowable because NCUA expects the reserve ratio to exceed 1.3% (dollars reserved per insured share), above which the agency is required to return the excess to credit unions. Lower interest over the last five years on the NCUSIF's $4 billion in Treasury investments have kept the reserves low, preventing NCUA from paying a dividend.

ROCHESTER, Minn. – Think FCU sent out its first of three mail ballots on its proposed conversion to mutual savings bank yesterday, carefully skirting new NCUA rules that expand member powers during the process. The new rules, approved yesterday by the NCUA Board, go into effect in 30 days and apply to all prospective converts that have yet to mail any disclosures to members. The $1.2 billion credit union, formerly IBM Mid-America Employees FCU–named after IBM’s ThinkPad laptop computer–is one of three credit unions in the process of converting to a mutual savings bank. The others are Lafayette FCU, in Kensington, Md., and Sunshine State FCU, in Tallahassee, Fla. Officials at Think FCU have no plans to convert to stock form after switching to a mutual bank.

ALEXANDRIA, Va. – The NCUA Board passed new rules this morning to shift the powers in conversions to banks to members, from credit union boards and management, who are increasingly manipulating the process. The new rules will require boards to notify members of a proposed conversion before the Board, itself, votes, and will help members organize to express their concerns over a switch to bank. The new rules come as boards and management trying to convert their credit unions are putting up ever-larger roadblocks to member opposition. At Columbia CU, where the employees were organized to oust directors who opposed conversion to bank; Lafayette FCU, where management refuses to share a running tally of the 90-day vote with members; and DFCU Financial, where the board voted to pay its members a record $17.5 million dividend in January, just weeks before the members will vote whether to dump directors for their support of an ill-fated conversion to bank. The new rules reduce the balloting period from 90 days to 30 days; require a credit union to share internal documents on the conversion with members who request it; and restrict the ability of outside speculators in accessing any potential initial public offerings. The rules go into effect in 30 days. The new rules are expected to attract a legal challenge, by the bankers, who want to see more credit unions convert to banks. The banking lobby was especially angered yesterday over so-called box language required in all ballots that tell voting members that credit unions offer better rates than banks. While voting on the conversion, each member must be told, “Available historic data suggests that, for most loan products, credit unions on average charge lower rates than banks. For most savings products, credit unions on average pay higher rates than banks.”

WASHINGTON – American Airlines FCU said yesterday it has contributed $100,000 to the National CU Foundation. John Tippetts, president of the $3 billion credit union flew form Dallas to Washington to present the check to Steve Delfin, head of the credit union foundation. The credit union has placed the second-most graduates from the Foundation’s CU Development Education Training Program.

ALEXANDRIA, Va. – NCUA reported yesterday it has barred Crystal Bottomley, a 24-year-old former teller at NATCO CU, from the credit union industry for embezzling about $33,000 from the Richmond, Ind., credit union. Bottomley was convicted of embezzlement and sentenced to three months in prison, ans to pay $32,582 in restitution to the credit union’s bond insurer, Chubb & Sons, and $1,000 to the credit union. Bottomley stole the funds by accessing member accounts and withdrawing money without authorization, then forging members’ signatures to withdrawal slips.

DELTON, Mich. – A woman approached a teller at Thornapple Valley Community CU Monday and demanded money, but left after the teller told her no. Police said the would-be robber was not armed. The woman left in a dark-colored sedan, possibly a Pontiac.

ALBUQUERQUE, N.M. – Authorities are hunting for a dangerous man who has threatened to harm tellers as he has held up four institutions, including three credit unions, over the past six weeks. The robber--dubbed ‘Smash Nose Bandit,’ because of his flat nose that resembles a fighter’s–is believed to have hit the Southwest FCU branch twice and New Mexico Educators FCU. His is also believed responsible for the armed robbery at Wells Fargo last Saturday. Police caution anyone encountering the robber, saying he threatened to cut one of the teller’s throat during a hold-up.

ORLANDO, Fla. – Orlando FCU said yesterday it has signed with Lending Solutions to implement the company’s National Loan Processing Center. The $135 million will implement the 24/7 call center service on an outsourced basis. Lending Solutions, based in Elgin, Ill., provides services to more than 400 credit unions.

WASHINGTON – CUNA Strategic Services announced yesterday it has signed with IBT Services to tailor and market credit union services to underserved Latino communities, the fastest growing segment of the financial services market. IBT, one of the leading builder of bank and credit union branches, has been developing a comprehensive program for targeting those communities through a joint venture with El Banco Financial Corp. The program eyed by CSS would focus on promoting financial literacy, providing culturally sensitive branches, and offering traditionally banking products at fair prices. CSS is jointly owned by CUNA and its state league affiliates.

WASHINGTON – CUNA’s support for Democrat Joe Crowley–including a $1,000 contribution to Crowley’s leadership PAC just days before the elections–paid off big this week when the New York Congressman was added to the House Ways and Means Committee, the tax -writing panel which has ultimate jurisdiction over the credit union tax exemption. CUNA contributed the maximum allowable $10,000 to the four-term congressman’s campaign, as well as the $1,000 contribution to Crowley’s JOE PAC. Crowley and another New York Democrat, Anthony Weiner, were added this week to the Ways and Means panel, which will be chaired in the enxt Congress by New York Congressman Charles Rangel.

NAPERVILLE, Ill. – The Illinois CU League announced yesterday it has signed with Allpoint to give its 200 credit unions access to the company’s surcharge-free ATM network. The deal nearly doubles Allpoint’s credit union members. Allpoint is a wholly owned subsidiary of Cardtronics, the world’s largest independent operator of ATMs.

SAN ANTONIO –In a race that pitted one credit union friend against another, former Democratic Congressman Ciro Rodriguez easily beat Republican Henry Bonilla on Tuesday, in the last congressional election of the year. CUNA, following its practice of sticking with incumbents, contributed $10,000 to Bonilla’s campaign, including $5,000 as recently as November 21. Security Service FCU also contributed $1,000 to the hometown congressman, according to records filed with the Federal Elections Commission. Bonilla, who was seeking an eight term, was thrown against Rodriguez, who was defeated in the 2004 redistricting, after the federal court ordered the 23rd district redrawn because of illegal gerrymandering in the 2004 Republican redistricting. Tuesday’s special election was necessary because Bonilla just failed to get 50% of the vote in the Nov. 7 election. Rodriguez, who was one of the sponsors of HR 1151, the CU Membership Access Act, overcame a huge financial disadvantage with the help of the Democratic Party, fresh off its election-day victories.

BOSTON – Tremont CU announced yesterday it is joining with local faith-based and community development groups to open a branch in the low-income neighborhood of Dudley Square, in Roxbury. A coalition called the Boston Community Development Corp. will market the branch’s services and provide outreach to the neighborhood’s Latino and African-American community, according to Leonard Broderick, president of the $165 million credit union. “I’ve been working on this for a lot of years; developing the trust of the church groups and the community. It’s taken a lot of leg work,” Broderick told The Credit Union Journal yesterday. The new branch will offer a broad variety of services, like financial education, credit counseling, home improvement instruction, technical assistance for small businesses and business education. “If it goes over well, we’re looking at other areas of the city we would like to branch into.” Partners in the Boston coalition include: Faith Partnership, Morning Star Baptist Church, Jubilee Christain Church, Financial Investment Initiative Group, and Dorchester Bay IDC. Tremont CU had served select groups in the city’s hospital district until two years ago when it converted charters to serve all of Suffolk County (Boston). Since then it has added Norfolk and Middlesex counties.

PORTLAND, Ore. – TRM Corp., the financially ailing copier company that became the nation’s second largest independent operator of ATMs, said announced yesterday it has agreed to sell its U.S. copier business to private equity fund Skyview Capital LLC for $9.2 million. TRM had been one of the nation’s largest operators of copier machine rentals until it acquired contracts to own or operate more than 15,000 ATM two years ago, including 6,000 that are operated by and branded for the credit union-owned CO-OP Network. The ATM business, however, has pushed TRM to the brink of insolvency, resulting in a massive $101 million third quarter loss because of major impairment of assets. IN the meantime, the company’s stock price has plunged to under $1.40 a share, risking delisting by the Nasdaq. The deal is expected to close next month. Proceeds from the sale of the copier business will be used to pay down debt.

MINNEAPOLIS – A federal judge last week struck down as unconstitutional several provisions of last year's federal bankruptcy law that designates attorneys as debt relief agents, which effectively prevents them from advising clients to take on new loans to pay off their debts. In his ruling, Judge James Rosenbaum wrote that three sections of the new law violate free speech rights under the First Amendment. In addition, the Judge found the debt relief agency provisions of the law inapplicable to attorneys."If debt relief agency sections apply to attorneys, it means Congress has taken upon itself the authority to determine the advice attorneys can give their clients and what attorney advertisements must say, thereby infringing on the state's traditional role of regulating attorneys," wrote Rosenbaum wrote. The bankruptcy law refers to debt relief agents broadly as anyone who gives advice to people seeking bankruptcy protection. It forbids such agents from advising people to take on new debt, such as a consolidation loan, to pay off old loans. Attorneys who have challenged the law say this provision limits their ability to counsel their clients. The ruling makes it likely that Congress will revisit bankruptcy reform again next year.