News Briefs

At one time he was president (now what is typically called chairman) of Standard Chemical Manufacturing Credit Union for four years with six years of serving on the loan and supervisory committees prior to that. In an interview this summer with Credit Union Times, Daub said of the then 400 member credit union, "A small credit union in those days but it certainly served that useful purpose of serving that identifiable field of people who needed that car loan and needed a home repair loan. It was a very good experience and I enjoyed it very much."

Federation Adopts President/CEO Title

NEW YORK — The National Federation of Community Development Credit Unions has changed the title of its long-time chief executive from executive director to president/CEO. Former executive director, now president/CEO, Clifford Rosenthal has been at the helm of the Federation's day to day operations since soon after its founding.

The organizational change was made during a meeting of the Federation's board in October Rosenthal said, adding that the organization had made the change to both keep pace with other, similar, credit union organizations and to reflect the growing complexity of the Federation's work.

"I think it's very important to note that the change doesn't entail additional duties or compensation," Rosenthal said. "Also, this should not be confused with being chairman and CEO," Rosenthal added. "That's an important distinction for an organization which is run from the grassroots."

Rosenthal observed that the Federation has stepped up its effort to facilitate community development investing and the development of a secondary market for certain community development mortgages.

For example, as part of its re-branding campaign, the Federation has renamed its capital raising effort as the Community Development Investment Program and set a goal of raising $25 million over the next 12 months.

Bentley Appeals Continue, Receiver Eyeing February 2008 for Last Submission

PHILADELPHIA — Barring any further delays, investors involved in the Bentley Financial Services certificate of deposit Ponzi scheme could receive their share of the final $32 million still in receivership in early 2008.

Hundreds of credit unions, banks and individuals invested more than $370 million with Bentley. Since then, Peninsula Bank, Joseph Marzouca and Ted Benghiat, Southeastern Securities, Inc. and SFG Financial Services, Inc. have also been named as defendants. Robert Bentley, who ran Bentley Financial, pled guilty to two counts of wire fraud and one count of bank bribery, is currently serving five years in prison and was ordered to pay $3.25 million in fines.

On Oct. 23, the U.S. Third Circuit Court has issued an order instituting a briefing schedule that moves the appellate process forward. The order requires a series of briefs and replies to the appeals. The first brief is due on Dec. 3. If there are no further delays, David Marion, the court-appointed receiver handling the disbursements, will file a final submission on Feb. 15, 2008, after which the Third Circuit will require oral argument.

As of Sept. 30, the receiver has distributed nearly $339 million to claimants. Approximately $32 million is still due.

In June 2006, a jury agreed that the additional defendants had either conspired with or aided and assisted Bentley in the operation of his Ponzi scheme. The jury returned a verdict against them in excess of $32 million.

Desert Schools Adds Two Wal-Mart Branches

PHOENIX — Desert Schools Federal Credit Union is slated to open two additional in-store Wal-Mart locations in Mesa and Peoria.

Grand opening festivities at both locations will include ribbon cutting ceremonies, free prize giveaways, live music, food, crafts and the famous fleet of Desert Schools Toyota Scions.

The new branches will bring the credit union's total number of Wal-Mart locations to 25, the most of any credit union in Arizona.

Desert Schools FCU also has eight locations inside Fry's supermarkets, two locations inside Albertson's supermarkets, two locations inside Safeway stores and 24 free-standing branches.

By the end of 2007, the $3 billion credit union will celebrate the grand opening of one more location–its first freestanding branch in nearly two years.

That branch will be located near Arrowhead Mall in Glendale, bringing Desert Schools' total branch network to 64 locations.

NCUA-NTEU Strike a Tentative Deal

WASHINGTON — NCUA and the National Treasury Employees Union, approximately three-and-a-half years after NCUA employees voted to organize, have finally reached a tentative bargaining agreement.

A few items remained for the two parties to straighten out, which they brought before the Federal Labor Relations Authority's impasse panel, but were eventually ironed out between the agency and the union. The impasse panel was scheduled to meet Oct. 30 to Nov. 1 on the matter.

"After difficult and prolonged negotiations, I am pleased to report that NTEU and NCUA have reached a tentative three-year contract that includes significant merit pay increases for high-performing employees and the institution of critical workplace rights for all workers," NTEU President Colleen M. Kelley said. She said that NTEU had to fight a number of agency proposals to cut pay and limit grievance and arbitration rights. Additionally, many NCUA examiners work out of their homes and, she said NTEU was able to retain an examiner's home as an "official" worksite and keep mileage reimbursement for private vehicle usage. "NCUA has saved millions of dollars by having employees work from their homes and these proposals would have penalized employees for no reason," Kelley concluded.

"The agreement is a very positive development for both agency management and employees," NCUA Executive Director J. Leonard Skiles said. "I am pleased that after a lengthy bargaining process NCUA could now agree to a compensation package that rewards outstanding performance and assures that the agency will continue to recruit and retain highly qualified staff.

Hampel Gets Spotlight on Bloomberg TV

WASHINGTON — CUNA Chief Economist Bill Hampel was the featured guest during an hour-long segment of Bloomberg TV's "Open Exchange" Oct. 31.

According to the economist, manufacturing and employment remain strong. "However, we are still in an iffy economy. We are not out of the woods yet," he said during the broadcast. If the job market is able to hold out, the economy, Hampel said, will not tank. "It has been softening, but it is not tanking," he said.

The largest factor in the shape of the economy six months from now is the housing market and consumers' response to it. "The big question is what will the housing situation do to consumers' wealth," he explained. "A contraction in home prices will eat into consumers' wealth. This spillover from the [troubled] housing sector onto consumer wealth is a concern for the economy."

As far as the real estate market: it will get worse before it gets better, according to Hampel.

"Loan growth is slowing and savings are going up at credit unions," he explained. "There is more pessimism evident with consumers. Credit union CEOs are seeing collateral damage from other lenders. Some credit-quality problems are spreading out from the housing issue in some parts of the country and could spread to the rest of the economy."

By next year, Hampel said, we could be looking back and referring to the current situation as "where we slipped, perhaps even into recession."

He also explained credit unions' cooperative, risk-averse operations and made a plug for the HLPR–Home Loan Payment Relief–loan.

–scooke@cutimes.com