ncua

Consider Switching from a Bank to a Credit Union

Many consumers don’t realize that they are likely eligible to join a credit union.  Credit Unions have evolved over the years to being full-service financial institutions that offer the same services that you can get at your bank. At one time, being a member of a credit union usually meant having to work for a certain employer or belong to a certain organization, however, now the vast number of credit unions have what is called a community charter. A community charter means that anyone who lives, works, worships, etc in the community (or communities) that the credit union is chartered for is eligible to join.

Credit unions are owned by the members (account holders) of the credit union. When you join a credit union, you will have to keep a minimum deposit in your account, this minimum deposit marks your ownership in the credit union. The minimum deposit is usually somewhere between $5 and $25. In contrast, banks are owned by stockholders and are controlled by paid officials and stockholders. The owners of a credit union (in other words “the members”) elect a volunteer board of directors to represent their interests in the oversight of the credit union.

Like community banks, credit unions are often both headquartered and operated in the community they serve. Bringing your business to your local credit union helps to stimulate your local economy. This is in contrast to the large regional or national banks where the higher paid jobs are most likely going to workers who are half-way across the country.

Credit unions offer several important benefits over banks. The first is that credit unions typically offer lower loan rates and higher deposit rates than banks. Click here for a comparison of credit union rates and bank rates. In addition to being more competitive with rates, credit unions often have lower fees than banks. Examples of these fees are NSF fees, wire transfer fees, returned check fees, etc. Another benefit of credit unions is that since credit unions are often smaller in scale and more localized than national banks, account errors or concerns are often resolved more quickly and members often even have access to talking to executive level management when they have an unresolved problem or concern.

If you are a person who travels a lot and therefore chooses a national bank for the convenience of having access to your bank’s ATMs while traveling, credit unions offer a solution for this. Most credit unions belong to an ATM network of other credit unions where members of credit unions who are on the same network can share ATMs without a fee. These networks are nationwide, so it is possible to have a credit union account in Maine and use the ATM machine at a credit union in California without incurring a fee.

What about safety? Your money is just as safe at an insured credit union as it is at an insured bank. While most banks have FDIC insurance that covers your accounts up to $250,000, most credit unions are insured by the NCUA which also covers your accounts up to $250,000. FDIC insurance and NCUA insurance both serve the same purpose and are both reliable deposit insurance agencies who are backed by the U.S. government.

In summary, chances are you are eligible to become a member at a local credit union and credit unions typically offer more competitive rates, while offering the same financial services as banks.

Learn more:

Protect Your Surviving Spouse/Family Members

Renting isn’t so Bad

How Your Credit Score Determines Your Interest Rate

Community Action Award Winner: Jonas Kempf

I’m writing now with only two weeks left at NCUA.  In a sentence, it has been a great summer with many wonderful opportunities.  Here are some of the highlights and things I will take away from the experience.

To start, my primary goal for the summer was to improve my proficiency with Stata as much as possible.  Stata, which I failed to explain in my previous post, is a statistical analysis program, similar to R or SPSS.  It’s widely used in economics (and in the econometrics courses at Bard, which I recommend!) and by many US government agencies and think tanks dealing with economics.  Experience with Stata is a great line to have on your resume, and the opportunity to learn more about it is the main reason I chose the internship at NCUA.  I’m happy to say that the bulk of time here has been dedicated to exactly that - Stata is at the core of my long-term project here, and I’ve been able to spend time every day practicing and learning new skills.  I’m certain I’ll be carrying many of these skills into my future career.

One of the highlights of the summer was visiting the Treasury’s Office of Economic Policy.  My boss and another colleague at NCUA had previously worked at the Treasury for ten years as the directors of macro- and microeconomic analysis, so Daniel and I were able to spend an afternoon there meeting with the current director of macro analysis and a microeconomist.  It was tremendously helpful to hear about their career paths and the work they’ve done at the Treasury.

We’ve also gone to talks hosted by think tanks in the area.  Recently, we heard Treasury Secretary Jacob Lew speak at the Brookings Institute about Dodd-Frank five years after it was signed into law.  Before that we had been to a book talk on energy, economic growth, and geopolitical futures at the Woodrow Wilson Center.  Another highlight is happening later next week.  Daniel and I will be going to Capitol Hill to sit in on a Congressional hearing.  NCUA staff will be testifying before the House Financial Services subcommittee on the agency’s budget process and transparency.  I’m really excited to see firsthand what these congressional hearings are like.  In fact, with so many federal agencies and world-renowned think tanks in the area, there are endless opportunities to see what different organizations do and to go to interesting events.  This, I think, is one of the best parts about living in DC.

Mobile Payment Laws:Federal Deposit Insurance 18/NCUA Share Insurance 19

FDIC and NCUA: Protects funds of depositors in insured depository institutions and of members of insured credit unions in the event of failure of the institution. Applies to “deposits” and “accounts” as defined in laws and regulations of the FDIC and National Credit Union Administration. These include savings accounts and checking accounts at banks and share accounts and share draft accounts at credit unions.   It is applicable to mobile payments if the funds underlying a mobile payment are deposited in an account covered by deposit insurance or share insurance, the owner of the funds will receive deposit or share insurance coverage for those funds up to the applicable limit.  
Additionally, FDIC’s committee on economic inclusion (ComE-IN), tries to help under-served into the mainstream. It has started Mobile Financial Services (MFS) to study how the unbanked used MFS. Deposit insurance or share insurance does not guarantee that a consumer’s funds will be protected in the event of a bankruptcy or insolvency of a nonbank entity in the mobile payment chain.

FDIC Sec 18: https://www.fdic.gov/regulations/laws/rules/1000-2000.html
NCUA:http://www.ncua.gov/legal/guidesetc/guidesmanuals/ncuayourinsuredfunds.pdf

South Florida Federal Credit Union Seeks New Regulator

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South Florida Federal Credit Union is in the market for a new regulatory authority after being examined by the National Credit Union Administration for irregular loan handouts.

Two previous workers have submitted a lawsuit versus the cooperative credit union and CEO Maggie Martinez over allegations that they were fired due to the fact that they worked together with a recurring NCUA examination into the CEO and Miami credit unions.

Both former employees informed NCUA regulatory authorities that Martinez had made incorrect loans to family members who were in monetary problems, in addition to employed relative who took funds from South Florida Federal Credit Union customers.

SFFCU Makes the Switch From NCUA to State Regulators Amidst Investigation

South Florida Federal Cooperative credit union informed the South Florida Business Journal that the termination of the 2 workers wasn’t related to the cooperation they could’ve had with the NCUA investigation, and denied all present allegations.

However, South Florida Federal Cooperative credit union, worth about $36 million in possessions, is currently seeking a state charter which could help it prevent the NCUA examination later on. If its application to switch to a state charter undergoes, the Florida Office of Financial Law would become its primary regulatory authority, not the NCUA.

The NCUA and the NBA

It’s officially basketball season.

Believe it or not, the National Credit Union Administration (NCUA) and the National Basketball Association (NBA) have a few things in common… To help CU members understand better how the NCUA works, we thought it’d be fun to compare its administration to something a little more practical – for example, professional basketball. And no, we aren’t saying the NBA is a walk in the park. It’s a bit more adaptable than the NCUA. Less rules, more play. 

What is the NCUA? According to the government’s site, the NCUA is an independent federal government agency that charters and supervises federal credit unions and insures accounts in federal and most state-chartered credit unions across the country through the National Credit Union Share Insurance Fund (NCUSIF), a federal fund backed by the full faith and credit of the United States government.

The NCUA is an independent federal agency created by the US Congress. The purpose of this administration is to regulate, charter and supervise federal credit unions.

The NBA is an association that operates like NCUA; it regulates, charters and supervises the teams that are in its league.

Both the NCUA and NBA are national governing bodies for their members (credit unions and basketball teams). They work to support and regulate business – although basketball is considered a sport, much like a credit union, it works like a business and consists of members governing members. For basketball, the players are its members. The purpose of the NBA is to ensure the players are in good condition and that all teams play fairly and continue to be one of the world’s premier sports and entertainment enterprises. For credit unions, how the NCUA operates is that it makes sure CUs and their members are staying in compliance. If we think about it, business will always have that ‘referee’ involved, guaranteeing a fair game for all. 

To learn more about the NCUA, here are a few websites that we keep track of to stay in the hoop – we mean, loop

NCUA Website - About 

My Credit Union.Gov

A Credit Union’s Input on the NCUA - Video Included

NCUA YouTube Channel

Lost flash drive leads to NCUA Data Breach

When it comes to handling customer data, organizations should keep two major points in mind: Data should be carefully stored and encrypted, with access being limited to key individuals. If the data is compromised, those affected should be notified immediately, so they can take necessary precautions should that data fall into the wrong hands. Those points should be drilled into both a Credit Union and an examiner/auditor.

On December 15th the NCUA (National Credit Union Administration) commented that an external flash drive containing the names, addresses, account numbers and Social Security Numbers belonging to members of the $13 million Palm Springs Federal Credit Union, located in California, was lost or misplaced. This came after an anonymous informant pointed their finger at an NCUA examiner, though the NCUA itself only confirmed the loss, and did not confirm its responsibility.

“NCUA confirms the loss of a thumb drive during an exam, which did not include passwords or PINs. NCUA has received no indication of any unauthorized access to members’ accounts or attempts to gain improper access,” said John Fairbanks, public affairs specialist.

“Surely, the examiners should comply with the same types of restrictions the institutions they examine have to contend with to provide adequate security,” says Shirley Inscoe, a financial fraud expert and analyst for consultancy Aite.

Now keep in mind that this flash drive was lost “sometime around” October 20th and it took the Credit Union 10 days to send a letter to its members to inform them…10 days to SEND A LETTER.

“At this time we do not know if the external drive has been inadvertently destroyed or if it was acquired by an unauthorized person,” the credit union writes. “All we know is that it is lost.”

Storing such important data on something that could easily be lost or stolen is shocking to say the least. Banking regulators and institutions are cast in a dismal light by how some, not all, of their colleagues manage critical customer data. Though not proven to be at fault, many are up in arms over the fact that the NCUA examiners are responsible for promoting the safety of credit unions, not tarnishing it.

All it takes is some further thought into using secure file transfer portals, encryption or even use of a secure document upload system that enforces two-factor authentication.

“It would probably help if the exam team established a formal protocol with the CU prior to the exam, outlining the procedures for delivering and handling data, and requiring certain files to be password protected and encrypted,” says Anthony Vitale of JDA Software, “There is nothing formal today. Exams are handled mostly by examiners leading and CUs following. There is nothing in the NCUA examiners’ manual addressing the handing of data.”

Details on FFIEC Guidelines – Procedures Are Ever Changing

Last month, the Federal Financial Institutions Examination Council (FFIEC) published social media guidance for financial institutions such as banks, savings associations, credit unions, and nonbank entities supervised by the Consumer Financial Protection Bureau (CFPB). This Guidance weighs in on the federal consumer protection and compliance laws, regulations, and policies to activities which correspond to online social networks – among all types of consumer and customer communications.

So what does this mean for credit unions? If we think about it, similar practices take place in-house for these financial establishments; in following company protocol, employees have training sessions (which involves testing, etc.) on a regular basis, and consist, for the most part, of learning and relearning new material. This applies to many industries; after working in wholesale mortgage lending for about 5-6 years, I cannot tell you how much material I learned and either tossed or added to while working in that industry. Whether it had to do with online or offline techniques, the mortgage company had training and testing for it.

Procedures are ever changing; as new technologies come into play, we continue to evolve with them. The same applies to social media – the FFIEC knows that banks and other financial institutions are beginning to use this medium more than ever before, and offers such guidance along with other supervision and examination materials. FFIEC’s intentions are to help the institutions understand the potential consumer compliance, legal, reputation and other operational risks associated with the use of such networks, and in addition, the expectations for managing those risk(s). 

After these materials are announced and made available to the public, it is recommended that a credit union modifies its policies, to keep aligned with the financial regulators. Be sure to check out our earlier blog entry, Five Important Components to Social Media for Credit Union Compliancy.

To stay up-to-date and keep track of these regulatory changes, it is always best to stay in contact with and/or connect to these financial authoritative figures via social media, email, and other forms of communication. The following links are just a few of the many organizations to follow – be sure to keep track through all networks as necessary:

滙控傳59億售ING土國業務

外電引述消息報道,滙控(00005)將會向荷蘭國際集團(ING Group)出售旗下的土耳其業務,作價介乎7億至7.5億美元(約54.6億至58.5億港元)。

路透引述兩名知情人士表示,滙控料於未來幾天落實向ING出售有關業務。滙控在土耳其的分行, 是當地第12大銀行,然而由於業務虧損,滙控決定出售,作為其於環球削減成本計劃的一部分。ING現時在土耳其大約有150億美元(折合約1170億港元)資產,收購滙控土耳其業務,有助加強ING在當地的市場地位。滙控及ING都拒絕評論有關傳聞。

路透又報道,美國曼哈頓地方法院法官Shira Scheindlin於美國當地時間周一,駁回滙控要求撤銷一單訴訟的申請,該訴訟指控滙控於2004至2007年間,因擔任按揭抵押證券(RMBS)信託人疏忽失職,導致5家信貸聯盟倒台。

該聯邦法官表示,即使現時大部分債務已再進行資產抵押證券化,但原告國家信貸聯盟局(NCUA),仍然有權對滙控提出訴訟。

美勒令建行打擊洗黑錢

另外,美國聯儲局公布,建設銀行(00939)紐約分行於周二被聯儲局及紐約州金融服務管理局勒令,須採取更多行動打擊洗黑錢,這是聯儲局首次對中國四大國有銀行採取強制執行行動。

聯儲局表示,建行須於60天內提交合規和客戶盡職調查計劃,以協助阻止洗黑錢和其他可疑交易。建行紐約分行合規主管Mildred Harper證實消息。

HSBC must face U.S. lawsuit over failed credit unions

By Jonathan Stempel
NEW YORK (Reuters) - A federal judge rejected HSBC Holdings Plc’s bid to dismiss a U.S. lawsuit claiming that its failure to perform its duties as trustee for $2.37 billion (1.52 billion pounds) of residential mortgage-backed securities contributed to the downfall of five federal credit unions.
U.S. District Judge Shira Scheindlin in Manhattan on Monday night said the National Credit Union Administration had standing to sue even though most of the debt had been resecuritized, and the new trustee refused to sue HSBC on its behalf.
The lawsuit is one of many in which the NCUA is seeking to recover investment losses that led to the 2009 and 2010 failures of the U.S. Central, Western Corporate, Constitution Corporate, Members United Corporate and Southwest Corporate credit unions.
Some lawsuits targeted banks that allegedly sold securities backed by defective residential mortgages. Other lawsuits targeted trustees who allegedly failed to monitor loan servicers or to require banks to buy back defective loans.
HSBC spokeswoman Juanita Gutierrez declined to comment.
Scheindlin rejected HSBC’s argument that the March 20 lawsuit concerning its oversight of 37 RMBS trusts dating from 2004 to 2007 came too late, having been filed six years after the first two credit unions failed.
She also said the NCUA could still pursue claims as the credit unions’ “conservator” or “liquidating agent,” despite having resecuritized their distressed mortgage securities and guaranteed payments on the newly issued notes.
The NCUA did this “to fulfil its governmental purpose of stabilizing the credit union system,” Scheindlin wrote. “It seems perverse to conclude, based on these actions, that NCUA is not bringing suit as a conservator or liquidating agent, simply because it took this extra step.”
Bond issuers appoint trustees to ensure that payments are funnelled to investors, as well as to handle much of the back-office work after securities are sold. In May, U.S. District Judge Katherine Forrest in Manhattan dismissed a similar NCUA lawsuit against Bank of America Corp and US Bancorp over 74 RMBS trusts, noting that securities there had been resecuritized. Scheindlin said she disagreed with part of Forrest’s ruling, but that the case could also be distinguished on its facts. The NCUA filed an amended complaint against Bank of America and US Bancorp last week.
The case is National Credit Union Administration Board v HSBC Bank USA NA, U.S. District Court, Southern District of New York, No. 15-02144.

(Reporting by Jonathan Stempel in New York; Editing by Phil Berlowitz)

HSBC must face U.S. lawsuit over failed credit unions

By Jonathan Stempel

NEW YORK, July 21 (Reuters) - A federal judge rejected HSBC Holdings Plc’s bid to dismiss a U.S. lawsuit claiming that its failure to perform its duties as trustee for $2.37 billion of residential mortgage-backed securities contributed to the downfall of five federal credit unions.

U.S. District Judge Shira Scheindlin in Manhattan on Monday night said the National Credit Union Administration had standing to sue even though most of the debt had been resecuritized, and the new trustee refused to sue HSBC on its behalf.

The lawsuit is one of many in which the NCUA is seeking to recover investment losses that led to the 2009 and 2010 failures of the U.S. Central, Western Corporate, Constitution Corporate, Members United Corporate and Southwest Corporate credit unions.

Some lawsuits targeted banks that allegedly sold securities backed by defective residential mortgages. Other lawsuits targeted trustees who allegedly failed to monitor loan servicers or to require banks to buy back defective loans.

HSBC spokeswoman Juanita Gutierrez declined to comment.

Scheindlin rejected HSBC’s argument that the March 20 lawsuit concerning its oversight of 37 RMBS trusts dating from 2004 to 2007 came too late, having been filed six years after the first two credit unions failed.

She also said the NCUA could still pursue claims as the credit unions’ “conservator” or “liquidating agent,” despite having resecuritized their distressed mortgage securities and guaranteed payments on the newly issued notes.

The NCUA did this “to fulfill its governmental purpose of stabilizing the credit union system,” Scheindlin wrote. “It seems perverse to conclude, based on these actions, that NCUA is not bringing suit as a conservator or liquidating agent, simply because it took this extra step.”

Bond issuers appoint trustees to ensure that payments are funneled to investors, as well as to handle much of the back-office work after securities are sold.

In May, U.S. District Judge Katherine Forrest in Manhattan dismissed a similar NCUA lawsuit against Bank of America Corp and US Bancorp over 74 RMBS trusts, noting that securities there had been resecuritized.

Scheindlin said she disagreed with part of Forrest’s ruling, but that the case could also be distinguished on its facts. The NCUA filed an amended complaint against Bank of America and US Bancorp last week.

The case is National Credit Union Administration Board v HSBC Bank USA NA, U.S. District Court, Southern District of New York, No. 15-02144.

(Reporting by Jonathan Stempel in New York; Editing by Phil Berlowitz)

HSBC must face U.S. lawsuit over failed credit unions

By Jonathan Stempel

NEW YORK, July 21 (Reuters) - A federal judge rejected HSBC Holdings Plc’s bid to dismiss a U.S. lawsuit claiming that its failure to perform its duties as trustee for $2.37 billion of residential mortgage-backed securities contributed to the downfall of five federal credit unions.

U.S. District Judge Shira Scheindlin in Manhattan on Monday night said the National Credit Union Administration had standing to sue even though most of the debt had been resecuritized, and the new trustee refused to sue HSBC on its behalf.

The lawsuit is one of many in which the NCUA is seeking to recover investment losses that led to the 2009 and 2010 failures of the U.S. Central, Western Corporate, Constitution Corporate, Members United Corporate and Southwest Corporate credit unions.

Some lawsuits targeted banks that allegedly sold securities backed by defective residential mortgages. Other lawsuits targeted trustees who allegedly failed to monitor loan servicers or to require banks to buy back defective loans.

HSBC spokeswoman Juanita Gutierrez declined to comment.

Scheindlin rejected HSBC’s argument that the March 20 lawsuit concerning its oversight of 37 RMBS trusts dating from 2004 to 2007 came too late, having been filed six years after the first two credit unions failed.

She also said the NCUA could still pursue claims as the credit unions’ “conservator” or “liquidating agent,” despite having resecuritized their distressed mortgage securities and guaranteed payments on the newly issued notes.

The NCUA did this “to fulfill its governmental purpose of stabilizing the credit union system,” Scheindlin wrote. “It seems perverse to conclude, based on these actions, that NCUA is not bringing suit as a conservator or liquidating agent, simply because it took this extra step.”

Bond issuers appoint trustees to ensure that payments are funneled to investors, as well as to handle much of the back-office work after securities are sold.

In May, U.S. District Judge Katherine Forrest in Manhattan dismissed a similar NCUA lawsuit against Bank of America Corp and US Bancorp over 74 RMBS trusts, noting that securities there had been resecuritized.

Scheindlin said she disagreed with part of Forrest’s ruling, but that the case could also be distinguished on its facts. The NCUA filed an amended complaint against Bank of America (Swiss: BAC.SW - news) and US Bancorp last week.

The case is National Credit Union Administration Board v HSBC Bank USA NA, U.S. District Court, Southern District of New (KOSDAQ: 160550.KQ - news) York, No. 15-02144. (Reporting by Jonathan Stempel in New York; Editing by Phil Berlowitz)

HSBC must face U.S. lawsuit over failed credit unions

By Jonathan Stempel

NEW YORK (Reuters) - A federal judge rejected HSBC Holdings Plc’s (HSBA.L) bid to dismiss a U.S. lawsuit claiming that its failure to perform its duties as trustee for $2.37 billion (1.52 billion pounds) of residential mortgage-backed securities contributed to the downfall of five federal credit unions.

U.S. District Judge Shira Scheindlin in Manhattan on Monday night said the National Credit Union Administration had standing to sue even though most of the debt had been resecuritized, and the new trustee refused to sue HSBC on its behalf.

The lawsuit is one of many in which the NCUA is seeking to recover investment losses that led to the 2009 and 2010 failures of the U.S. Central, Western Corporate, Constitution Corporate, Members United Corporate and Southwest Corporate credit unions.

Some lawsuits targeted banks that allegedly sold securities backed by defective residential mortgages. Other lawsuits targeted trustees who allegedly failed to monitor loan servicers or to require banks to buy back defective loans.

HSBC spokeswoman Juanita Gutierrez declined to comment.

Scheindlin rejected HSBC’s argument that the March 20 lawsuit concerning its oversight of 37 RMBS trusts dating from 2004 to 2007 came too late, having been filed six years after the first two credit unions failed.

She also said the NCUA could still pursue claims as the credit unions’ “conservator” or “liquidating agent,” despite having resecuritized their distressed mortgage securities and guaranteed payments on the newly issued notes.

The NCUA did this “to fulfil its governmental purpose of stabilizing the credit union system,” Scheindlin wrote. “It seems perverse to conclude, based on these actions, that NCUA is not bringing suit as a conservator or liquidating agent, simply because it took this extra step.”

Bond issuers appoint trustees to ensure that payments are funnelled to investors, as well as to handle much of the back-office work after securities are sold.

In May, U.S. District Judge Katherine Forrest in Manhattan dismissed a similar NCUA lawsuit against Bank of America Corp (BAC.N) and US Bancorp (USB.N) over 74 RMBS trusts, noting that securities there had been resecuritized.

Scheindlin said she disagreed with part of Forrest’s ruling, but that the case could also be distinguished on its facts. The NCUA filed an amended complaint against Bank of America and US Bancorp last week.

The case is National Credit Union Administration Board v HSBC Bank USA NA, U.S. District Court, Southern District of New York, No. 15-02144.

(Reporting by Jonathan Stempel in New York; Editing by Phil Berlowitz)