National Credit Union Administration (NCUA) Chairman Michael Fryzel recently urged credit unions to support the agency's legislative plan to replenish the National Credit Union Share Insurance Fund (NCUSIF) over time. In his first speech since the agency placed U.S. Central Federal Credit Union (U.S. Central) and Western Corporate Federal Credit Union (WesCorp) into conservatorship in March, Fryzel said he wants credit unions to "roll up their sleeves" and use grassroots activism to promote passage of the NCUA bill.

 

The legislation would allow credit unions to spread the cost of the NCUSIF replenishment over as many as seven years. At issue is the cost to natural person credit unions of recent actions by the NCUA to stabilize the corporate credit union system. Fryzel was addressing the Texas Credit Union League's annual meeting in Austin.

 

Meanwhile, in Washington, D.C., an NCUA spokesman said the agency is "optimistic" the bill could be passed this spring as part of a broader measure addressing an extension of the higher share and deposit insurance limits approved as part of a stimulus package.

 

In his speech, Fryzel said legislative relief is just part of the agency's current job right now. "When this stabilization proposal becomes law, our job will not be finished. I have made a commitment to the administration, to Congress, and to you in the industry that NCUA would undertake a broad and comprehensive reform of the corporate system. We have initiated a rulemaking process that I promise will yield results," he said.

 

NCUA Executive Director David Marquis, when asked, said the agency's immediate plans for the corporate credit union system is to maintain liquidity so loans don't have to be sold and "so we can maintain a level of losses" that are less of a burden on the credit union community. He said beyond that, NCUA continues work to develop "rule and regulation" for the corporate system that takes on issues "we will have to address going forward."

 

The agency recently received approximately 450 comment letters responding to its ANPR on corporate credit unions issues. Marquis said the agency is now working to determine what the credit union system in the future will want from the corporate credit unions. He added that beyond that, the NCUA is addressing what needs to be done to address "supervision and safety and soundness changes going forward."

 

 

Credit unions continued to maintain a strong market presence in the auto lending arena in the first quarter of this year, with a 24.8% market share in February, according to CUDL.

 

CUDL is a credit union owned firm providing point-of-sale and auto information technology services for credit unions. It became the third largest lender of auto loans in January, behind Chase Auto Financing and Toyota Financial Services.

 

About 936 U.S. dealerships closed last year due to lack of financing. Lenders who relied on asset-backed securities to make auto loans have run out of funds because there are fewer financing sources, according to Joe James, CUDL market research analyst. Credit unions continue to lend, even though some major lenders do not. Auto loans make up one-third of credit unions' portfolios, James said.

 

General Motors (GM) and Chrysler were the top cars financed in the first quarter of 2009 on the CUDL platform, at 19% and 18%, respectively. This is because of the Invest in America program, James said. Invest in America is a credit union auto loan discount program that offers incentives to credit union members who buy qualifying GM and Chrysler vehicles.

 

Credit unions have seen an increase in charge-offs and delinquencies, but it's much lower than that of banks, he added.

 

"Credit unions are still offering low [interest] rates to members," James said. But loan terms have shifted. Right now, 60-month loans are the most common for credit unions--a shift from 72 months last year. "Credit union members are seeking shorter terms," James said.

 

 

The Great New England Credit Union Show was just that …..Great! More than 600 credit union executives and officials from Massachusetts, New Hampshire, and Rhode Island packed the Holiday Inn in Boxborough, MA for a day filled with networking and education.

 

More than 80 companies showcased their products and services on the trade show floor providing attendees with some terrific insight into state of the art products and services. The information flow was equally strong in the 16 education sessions that ranged from demographics to pricing to lending innovations and much more.

 

At the show’s close, the attendees flocked to a town hall style meeting featuring NCUA Region I Regional Director Anthony LaCreta. Mr. LaCreta offered an update on the Corporate Stabilization Program and then took a number of questions from the audience.