Credit Union 24’s member credit unions have re-elected the organization’s chairman.
The board chose Mansel Guerry for a second term as chairman as well as Chris Leggett, vice chairman, and Bradley Blake, secretary/treasurer.
“The re-election of these gentlemen by our shareholders reflects their confidence in the direction that Credit Union 24 has taken during the past twelve months, and the board’s decision to keep its leadership intact will help maintain that direction in the future,” said Jim Park, president and CEO of Credit Union 24.
“The network has experienced tremendous growth in participants and the portfolio of financial services we provide under the leadership of the executive committee and board of directors. We look forward to the coming term in which our network will continue to grow and implement new financial products and services.”
Guerry is president of Mississippi Employees Federal Credit Union, headquartered in Ridgeland, Miss., and was elected treasurer and vice-chairman of Credit Union 24’s founding board of directors in 1998.
Leggett is president/CEO of LGE Community Credit Union, Marietta, Ga.
Blake is president/CEO of Florida State University Credit Union, Tallahassee.
NCUA Spells Out
Rules on Late Fees
Federal credit unions do not have to inform members about courtesy periods after due dates on open-end accounts, NCUA Associate General Counsel Sheila Albin wrote in a recent opinion letter.
She wrote that neither the Credit CARD Act nor the Federal Reserve’s Regulation Z mandate that credit unions disclose such information and noted that the Fed’s staff has determined that “a courtesy period following the payment due date is not a grace period.”
Albin wrote the letter to Jennifer Chadwick, a Rochester, N.Y., lawyer who represents an unnamed federal credit union that doesn’t impose late fees on a member’s open-end credit account until five days after the payment is due. She noted that under provisions of the Credit CARD Act, periodic statements must be mailed at least 21 days before they are due but they need only mention the due date.
NCUA Limits Service of
Loans to Nonmembers
Federal credit unions are forbidden from providing loan servicing and collection services to organizations outside their memberships, either directly or through a CUSO, according to an opinion letter from NCUA Associate General Counsel Sheila Albin to Guam Employees Federal Credit Union.
She wrote that FCUs “can provide loan servicing and collection services as a financial service but only to members” and the NCUA would view doing so through a CUSO “as a sham transaction.’’
Albin said the credit union could provide the service to the organization in question, Habitat for Humanity Guam, as an in-kind charitable contribution or donation. She noted that FCUs can make these contributions in any community where they have a place of business.
Granite FCU Has New CEO, Completes Merger
The $251 million Granite Federal Credit Union of Salt Lake City has a new president/CEO and this month completed a merger with the $20 million Salt Lake Schools Credit Union.
The merger creates a nine-branch CU serving 34,000 members. Salt Lake Schools has one branch and was founded in 1953 by teachers in the Salt Lake School District. Granite was also founded by teachers in 1935.
Heading up Granite is Lynn Kuehne, former executive vice president of the Utah League of Credit Unions and the former CEO of Utah First CU. During his long league tenure, Kuehne created the trade group’s CU Service Center Network.
Kuehne replaces Curt Doman, who formally retired in July. In a statement, the chairman of Granite, Lon Tibbits, thanked Doman for his service and his “steady and conservative influence” on the CU.
Granite ended 2008 with a $1.3 million profit, which was a sharp decline over the previous year.
“We are a healthy credit union,” said Steven Anderson, former CEO of Salt Lake Schools CU, who has joined Granite as senior vice president-strategic planning.
Florida League Division
Adds to Collections Tools
Through its partnership with TekCollect, the FCUL Service Group, a subsidiary of the Florida Credit Union League, is offering credit unions a proactive alternative to resolving collection accounts.
TekCollect focuses on the early contact of members with past due accounts through live payment reminder calls placed before an account is considered delinquent or the 15th day after a payment’s due date, according to FCUL Service Group. The goal is to identify the problem quickly to determine who can pay versus who cannot, which allows credit unions to refocus internal efforts. Staff can potentially reduce internal costs, increase recovery and reduce charge-offs through the proactive approach.
“Early in the delinquency cycle, most credit unions do not have the resources necessary to sustain a consistent and cost effective approach, day in and day out,” said Keith Hopkins, vice president of business development at FCUL Service Group. “TekCollect becomes a seamless extension of your credit union with an eye for detail to maintain member relationships.”
The Columbus, Ohio-based TekCollect has a portfolio of more than 12,000 clients.
CIT Dodges Bankruptcy
In another effort to avoid filing for bankruptcy protection, small business lender CIT Group Inc. said it has bought back $1 billion in debt from bondholders.
The company said it completed the sale for its $1 billion of floating-rate senior secured notes that were set to expire Aug. 17. CIT said nearly 60% of the outstanding notes were “validly tendered and not withdrawn,” representing an amount exceeding an initial projection of 65%, according to an Aug. 17 statement from the company.
“The completion of this tender offer is another important milestone as the company continues to make progress on the development and execution of a comprehensive restructuring plan,” CIT said.
The credit union industry and others are watching CIT’s movement because, should the lender file for bankruptcy protection, many of its small business clients may seek out other sources for lines of credit and loans.
Participation Network
Formed in Michigan
Michigan Business Connection LC and CenCorp Business Solutions LLC have formed an alliance to help move the flow of participation loans.
CenCorp, a business services subsidiary of Central Corporate Credit Union, will circulate participation offerings of loans originated by Michigan Business Connection, a commercial loan underwriting CUSO. The loan summaries, available to CenCorp members at no charge, will include the participation details and instructions on how to receive the MBC underwriting report. CenCorp will perform an independent review of the loan.
“With capital and liquidity issues causing many lenders to have to say no to really good opportunities, an enhanced participation partnership amongst collaborative lenders is an excellent way to keep loans flowing to qualified borrowers,” said Bill Beardsley, president of MBC.
More than $10 million in lending has occurred as a result of the initiative, including a credit facility on a medical facility to help preserve health care in Macomb County and financing for educational housing near the campus of Michigan State University, according to MBC.
CBS and MBC said together they work with more than 100 financial institutions and credit unions in Michigan representing more than $15 billion in aggregate assets. Formed in 2004, MBC manages more than $150 million in commercial lending assets.