PSCU Financial Services is offering credit unions a solution that allows credit unions to choose between two widely used formats-an applet developed by mFoundry for phone-based software, or a wide-access protocol solution the big CUSO developed in-house for use with a cell phone's built-in Web browser.
Partnerships with FSCC, CheckFree, FDR and eFunds also were key to deploying the solution, which includes real-time balance access, transaction history and fund transfers, with credit card, bill pay and pre-paid card accounts to follow, PSCU said.
The 600-owner organization said it is the first CUSO to offer mobile banking and will incorporate the turnkey solution with its 24/7 contact center to provide support for credit unions and members.
"Mobile banking is pivotal for credit unions because it taps into a growing demand from users of mobile devices and boosts member satisfaction and loyalty among all age groups, especially young adults," said David Serlo, PSCU's president/CEO.
A demonstration is available at www.pscufs.com/mbanking.
NCUA Changes Corporate CU
Accounting for CLF Notes
By CLAUDE R. MARX
ALEXANDRIA, Va. -- U.S. Central Credit Union's capital position could get some needed relief as a result of today's approval by the NCUA Board to remove Central Liquidity Facility-funded notes from the aggregate corporate's books.
The board approved the change 2-1.
U.S. Central would keep its role as the master servicer and the relevant corporates would still service the loans, but the loans would be an asset of the CLF. The corporate servicing the loan would have to make an agreement with U.S. Central to subordinate any collateral claims it pledged to secure the CLF loan.
Board members said that the agency's SIP and HARP programs, which are aimed at helping corporates and homeowners, respectively, could inflate the balance sheets of the corprorates.
NCUA Chairman Michael E. Fryzel said the action should have been taken long ago, and he and Vice Chairman Rodney Hood voted for it.
Board Member Gig Hyland opposed it, saying it did not go far enough and that there needs to be "more solid protection."
She questioned NCUA Senior Investment Officer Jeremy Taylor about how closely the CLF monitors corporates. He replied, "The level of vigilance is high. We look for breaks in the chain. The CLF is not a rubber stamp."
The board also learned that failures cost the National Credit Union Share Insurance Fund $227.8 million last year. It had reserves of $278.3 million and recoveries of $56.8 million.
In December, the fund's net income increased $9 million. In the same time frame, its gross income rose to $129.9 million because of a sale of Treasury notes and money from the corporate credit unions as part of SIP.
NCUA Chief Financial Officer Mary Ann Woodson said in an interview after the meeting that the sale of Treasury notes was "another in a series of contingency-oriented moves by the agency to take proactive steps in difficult economic times."
The fund's equity ratio was projected to be 1.27% as the final audit was not completed, she said. Congress requires the equity ratio to be 1.2%-1.5%. The NCUA must levy a premium if the ratio drops below 1.2%.
As of Dec. 31, there were 271 credit unions with CAMEL 4 or 5 ratings, but those credit unions represented 2.7% of all insured shares. By contrast, the last time there was a higher number of problem credit unions-280 in 2005-they represented 1.1% of all insured shares.
In 2008, there were 18 credit union failures, compared with 12 in 2007.
Fitch Deals U.S. Central a Blow
With Default Rating Downgrade to AA
By HEATHER ANDERSON
NEW YORK -- Fitch Ratings dealt U.S. Central a blow Jan. 15, downgrading the $36 billion corporate's issuer default rating from AA+ to AA, blaming an expectation of additional investment losses "that are meaningful in relation to the company's capital base and earnings capacity."
U.S. Central's individual rating was also struck from A to D. The official release stated that U.S. Central's investment losses threaten its capital position and its funding and liquidity positions have eroded.
Fitch Ratings Senior Director Ken Ritz told Credit Union Times that U.S. Central has some fundamental weaknesses, stressing that the corporate's investment loss exposure could not only impair capital but also its ability to generate capital in the future.
However, the credit union's saving grace is a high probability of external support.
Ritz said natural person credit unions concerned about U.S. Central should pay closer attention to the corporate's IDR, which inched down only one notch to AA, rather than the individual rating, which tumbled from A to D.
Fitch's IDR ratings consider that likelihood of support, such as recent NCUA initiatives to improve corporate positions; however, individual ratings do not.
Ritz said U.S. Central is "buoyed by support that we expect to come, and has thus far, from the NCUA;" that support is considered in an entity's long- and short-term IDR ratings.
"To the extent that actions are taken or not taken that indicate that support could go away, that could impact long-term and short-term ratings," Ritz said. "But at this point, we've always expected that external support would come to U.S. Central."
Fitch's report stated that the ratings agency "would view positively further efforts to strengthen USC's capital position. If losses remain manageable and do not materially affect USC's capital base while the company's other credit fundamentals remain intact, that would also have positive rating implications."
U.S. Central declined a request for an interview, providing a release that stated the ratings slide "in no way impacts U.S. Central's ability to serve the investment and correspondent services needs of its members."
American Airlines CU
Moves Card Processing
FORT WORTH, Texas -- The $5 billion American Airlines Credit Union is moving its credit card processing from Fidelity National Information Services to PSCU Financial Services, sources familiar with the move have confirmed.
Until 2004, the then-$3.9 billion credit union did not offer a credit card when it launched a program from scratch. Since then, according to NCUA records, the card portfolio has opened roughly 19,500 accounts and grown to $72.8 million in receivables.
Based on third quarter 2008 data, roughly 9% of the CU's membership carries the CU's card but the card portfolio only accounts for roughly 3.1% of the CU's loans. Neither American Airlines, FIS, nor PSCU Financial Services returned calls for comment as of press time.