WOCCU and CUNA Continue Push for Increased CDP Funding

on 9:50 AM

On Wednesday October 16th, World Council of Credit Unions (WOCCU) and CUNA called on House and Senate appropriators to increase funding for the USAID's Cooperative Development Program (CDP) to $17 million, up from the previous year’s $12 million.
The CDP is a is a global initiative that focuses on building capacity of cooperative businesses and cooperative systems for self-reliance, local ownership and sustainability.
The Senate Appropriations Committee passed a bill in September providing $17 million, while the House-passed bill provides $14.5 million.
World Council President and CEO Brian Branch signed on to two letters with CUNA President and CEO Jim Nussle requesting the higher amount passed in the Senate version.
“As the House and Senate move to reconcile these two bills, we respectfully urge you to advocate for the Senate-passed position of funding for this critically important program at $17 million for fiscal year 2020,” the letters read. “With their specialized expertise, CDP’s implementing partners have advanced cooperative businesses and systems in more than 18 countries in Africa, Latin America, and Asia.Activities are targeted to strengthen cooperative businesses in several ways including improved governance, capitalization, gender empowerment, youth engagement, financial management, market performance and advocacy.”
The organizations note the program also prioritizes collaboration among partners through working groups, cooperative research, learning and dissemination of cooperative development resources.
During the life of the program, activities have supported more than 500 cooperatives and credit unions with a combined savings of $495 million.
Other achievements include:
  • Providing health insurance and services to more than 42,000 people in Uganda;
  • Leveraging more than $95 million of investments for cattle cooperatives in South Africa;
  • Increasing member equity among cacao cooperatives in Ecuador, Peru, and the Dominican Republic by more than $4 million; and
  • Reforming cooperative law and regulation in Mozambique, Tanzania, Uganda, and Kenya.
World Council's Technology and Innovation for Financial Inclusion (TIFI) is a CDP-funded project being implemented in Kenya and Burkina Faso that runs through August 2023.

Used Car Market Beginning to Show Dings and Dents

on 9:38 AM

The strength of the used car market is wavering, according to Black Book.

The company’s Used Vehicle Retention Index for September (115.9), shows a -0.6% change from August (116.6).

“The used market held up pretty well during summer, when traditionally the values have declined,” said Anil Goyal, executive vice president of operations at Black Book. “However, we are now starting to see that the market strength is waning. We expect the Index to continue to drop in the remaining months of the year.”

The Black Book Used Vehicle Retention Index is calculated using Black Book’s published Wholesale Average value on two- to six-year-old used vehicles, as percent of original typically-equipped MSRP. It is weighted based on registration volume and adjusted for seasonality, vehicle age, mileage, and condition.

Ticonderoga FCU Announces Name Change

on 9:30 AM

One of New York state's closest credit unions to the Vermont border, which also now serves Addison County, has announced that it is changing its name. Effective January 1, 2020 Ticonderoga Federal Credit Union will change it's name to TrailNorth FCU.

TFCU said the name change reflects its broadened field of membership, which now includes the New York counties of Essex, Washington, Warren, Clinton and Franklin, and Addison County in Vermont.

“As we expand into additional New York counties and Vermont, it is imperative that we remain relevant and accessible in our industry,” said CEO Shawn Hayes. “Careful thought went into making this decision.  The credit union conducted analysis including a number of surveys – both of its current members and those in outlying counties and communities. The survey results indicated that our current name, limits our ability to demonstrate that our services are available to those outside of Ticonderoga.  The name TrailNorth Federal Credit Union was chosen to reflect the fact that we are confidently here today, ready to be our members’ guide on life’s journey toward a better and financially secure life.”

In a statement, TFCU said the 65-year-old credit union will always have affection for the “Ticonderoga” in its name, but that the new name will allow it to serve more members in the North Country region.

The $114-million Ticonderoga FCU has approximately 9,750 members.

ABA Asks Full Appeals Court to Void NCUA's FoM Rule

on 10:01 AM

As reported in CU Times, the American Bankers Association (ABA) is asking the full U.S. Circuit Court of Appeals for the District of Columbia to overturn a panel’s decision that the NCUA had the power to expand its Field of Membership rules.

A three-judge panel of appeals court judges said, in dismissing much of the ABA’s challenge of the rule, that the agency did not violate federal law when it allowed an expansion of those rules.
In that ruling, the judges said that the NCUA has broad authority in issuing rules governing fields of membership.

However, the court also ruled that the NCUA must better explain the part of its rule stating that credit unions may serve core-based statistical areas without serving the area’s urban core.

NCUA Chairman Rodney Hood has said that the agency will propose a rule that clarifies that section of the rule and that public comment will be solicited on it.

In its request, filed Friday October 4, the ABA said that the judges upheld the NCUA’s interpretation of “local community.”

“Under this expansive interpretation, large regions covering tens of thousands of square miles and narrow strips of land connecting cities hundreds of miles apart automatically qualify” as local communities, the trade group said.

11/6: NCUA CU Diversity, Equity & Inclusion Event

on 4:18 PM

The National Credit Union Administration is promoting a “Credit Union Diversity, Equity, and Inclusion Summit” scheduled on November 6, 2019 in Alexandria, Virginia.  The event is aimed at discussing how to promote those qualities at the agency and the credit unions it regulates. The event will run from 8 AM to 5 PM, Eastern time.

NCUA Board Chair Rodney Hood describes financial inclusion as “the civil rights issue of our time.” And by "inclusion" he means not only broader access to affordable financial services, but also to employment and business opportunities.
Our country is going through a period of profound demographic change, and our financial system should be leading efforts to respond to that change. - NCUA Chair Rodney Hood

All 3 NCUA board members . . . Hood, Mark McWatters and Todd Harper . . . will speak at the Summit, which will also include a panel discussions on best practices for promoting diversity, equity, and inclusion; on recruiting and retaining a diverse workforce; and on collecting diversity data.

More details on the free event and registration are available online.

FDIC "Eats" 3/4 of Failed Texas Bank

on 10:51 AM

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As reported in the September 26th edition of American Banker, the Federal Deposit Insurance Corporation (FDIC) plans to scrutinize a small Texas bank that failed under suspicious conditions.
Regulators closed the $37m Enloe State Bank in May after the Texas state regulator revealed “insider abuse and fraud by former officers.”  The failure is expected to cost the FDIC fund $27.6m . . . about 3/4 of Enloe's asset size.  about $500,000 of deposits exceeded FDIC insurance limits.

FDIC says the bank’s board “failed to establish adequate corporate governance to monitor and control management’s activities,” including those of a “dominant bank president.”  The lax oversight led to the origination of a large number of allegedly fraudulent or fictitious loans, which depleted capital and contributed to the failure.  Concerns about the bank’s leadership go back to April 2018 when examiners downgraded Enloe’s Camels rating to “two” from “one,” based on the management component. The bank was instructed to beef up its controls and the board was directed to produce a full financial statement audit for 2018 including proof of the bank’s internal controls and routines. The bank had not provided the FDIC mandated audit report as of March 2019.

Subsequently, a suspicious night-time fire occurred in the bank’s only branch on May 11, two days before a scheduled regulator exam. Local firemen responded to a report of papers being lit on fire.

The Texas Banking Commission asked the FDIC to participate in a post-fire examination.  As a result, the bank’s rating was lowered to a 5, and was designated a troubled and critically under-capitalized institution due to significant losses tied to over 100 fraudulent or fictitious loans.

The bank's board voluntarily agreed to close on May 31st. Enloe was the nation's first bank failure in 17 months.

Out of Network ATM Costs Reach Record High

on 4:48 PM

As reported this week in CU Times, the average out-of-network ATM withdrawal cost has reached a new record high of $4.72, according to the latest Bankrate.com Checking Account and ATM Fee Study, which surveyed non-interest and interest accounts.

This all-in fee, which includes the ATM surcharge (what ATM owners charge non-customers) as well as the penalty financial institutions charge their own customers to make out-of-network withdrawals is up 33% over the last decade.

Financial institutions are charging non-customers more than ever to use their ATMs. The average ATM surcharge increased 2% to a new record of $3.09, the 15th consecutive year establishing a new record. The average surcharge has increased in 20 of the past 21 years.

The good news, the fee charged by the accountholder’s own financial institution for using another institution’s ATM decreased 2% from $1.66 to $1.63, moving lower for the second year in a row. In fact, the number of financial institution and accounts allowing free out-of-network withdrawals is at a record high, although this still represents less than one-third of accounts (32%).

“While large banks have extensive ATM networks, many smaller banks and credit unions belong to nationwide fee-free alliances that may have significantly more ATMs available than even the ATM networks of big banks,” Greg McBride, CFA, Bankrate.com chief financial analyst said. “One other option to withdraw money for free is to get cash-back at the point of sale when using a debit card. Banks don’t charge for that and very few merchants do either.”

Among the findings:
  • Houston has the highest average out-of-network ATM fee of the 25 major metro areas examined ($5.58), while Los Angeles has the lowest ($4.15). Philadelphia has the highest average overdraft fee ($35.50) and Cincinnati has the lowest ($30.95).
  • Ninety-nine percent of non-interest checking accounts are either free by default or can become free, however less than half (42%) are free without stipulation. Forty-three percent will waive the monthly fee ($5.61, on average) based solely on direct deposit.

Catalyst Economic Forum Coverage: Why Treasury Curve Deserves Attention in Fixed-Income Investing

on 9:55 AM

Catalyst Economic Forum Coverage: Why Treasury Curve Deserves Attention in Fixed-Income Investing