The United States Senate passed S. 896 on a 91-5 vote. The provisions creating a corporate stabilization fund were included in the bill. The language of the bill will allow the establishment of a temporary corporate stabilization fund, which will have borrowing authority from the US Treasury in the amount of $6 billion with an emergency limit of $30 billion. The fund will be in existence for 7 years and the National Credit Union Administration (NCUA) will be allowed to establish an annual variable premium for credit unions in order to pay back the borrowings from the Treasury. In addition, the bill extends the $250,000 per account insurance coverage for an additional 4 years.

 

The bill will now go to the House of Representatives for enactment in the House. As you are aware, the House already passed its own version, H 1106, in March before the corporate stabilization fund was created as an alternative to the payment of the corporate losses through the National Credit Union Share Insurance Fund (NCUSIF). As a result, the House will have to incorporate the language of the corporate stabilization fund into its version of the bill. In addition, there are other differences between the House passed version and the Senate version such as the $250,000 per account limit which was made permanent in the House bill, but only extended for 4 years in the Senate version.

 

Congressman Barney Frank, chairman of the House Financial Services Committee, has committed to move expeditiously on the House version of the bill in order to relieve credit unions of the burden of having to recognize the corporate losses in the NCUSIF this year. Also, the Obama administration issued a Statement of Administration Policy supporting the credit union provisions in S 896 and also supporting making the $250,000 coverage permanent. As a result, we expect the House to move quickly and we are confident that the President will sign the bill once it reaches his desk.

 

League President Dan Egan summed the changes up, stating, “Once the bill is signed into law, credit unions will be able to reverse any entries you made in either 2008 or the first quarter of 2009 for the corporate credit union losses. At some time later this year, NCUA will establish a premium for 2009 for the corporate stabilization fund.” Early projections are that premium will be in the 10bp to 15bp range in the first year. NCUA will recalculate the premium each year.

 

 

State-chartered credit unions are reminded that the filing deadline for Internal Revenue Service (IRS) Form 990, Return of Organizations Exempt from Income Tax (2008) is Friday, May 15, 2009. The filing deadline for Form 990-T, Exempt Organization Business Income Tax Return is also May, 15, 2009.

 

The IRS has significantly redesigned the format and content of Form 990 beginning with 2008 returns. Credit unions should familiarize themselves with the changes made to Form 990. Particular attention should be paid to the section on corporate governance.

 

Credit unions needing additional time to prepare and submit Form 990 should file Form 8868, Application for Extension of Time to File an Exempt Organization Return. Filing the automatic request for extension will provide an additional 3 months to file Form 990. This form must be filed by Friday, May 15, 2009.

 

Form 990 Redesign Frequently Asked Questions: http://www.irs.gov/charities/article/0,,id=176667,00.html

 

 

The New Hampshire Credit Union League has joined with the Michigan Credit Union League to bring their highly successful Sprint/Nextel Credit Union Member discount program to the Granite State. This win-win program provides significant savings to credit union members that choose Sprint/Nextel for wireless phone service, while providing a substantial income stream to the credit union for promoting the service to their members.

 

The program merely requires credit unions to engage in some basic awareness advertising efforts such as sending a marketing piece out with statements once a year, displaying some point of sale material in the credit union, inserting ads in the credit union newsletter twice per year, and incorporating a link/banner into the credit union website.

 

For more information about this program, please contact Dean Martino at dmartino@cucenter.org or 1-800-842-1242.