National Consumer Protection Week – March 7-13
In recognition of National Consumer Protection Week 2010, Pennsylvania Attorney General Tom Corbett held a Consumer Fair last week at the The Gallery Mall in Philadelphia.
Representatives from three credit unions participated in the event: Lori Clemens, Business Development Manager, American Heritage FCU; Christopher Cassar, Marketing Representative - Membership Development, Freedom Credit Union; and Shannon Miller, MSR and Lyndell Mason, MSR, TruMark Financial Credit Union.
National Consumer Protection Week is a coordinated consumer education campaign that encourages individuals across the country to take full advantage of their consumer rights. Partner organizations provide free consumer resources to help people protect their privacy, manage money and debt, avoid identity theft, understand credit and mortgages, and steer clear of frauds and scams.
Consumer Protection Fairs are being held throughout the state to provide consumers with information and free resources for every stage of life.
Condolences
Harry Nutter, Board member of Sun FCU, Philadelphia, died Friday, February 26, at the age of 77. For 15 years, Nutter was Chairman of the Board of the Defense Supply of Philadelphia FCU, which merged with the Sun FCU. Since 1995, he had been chairman of Sun Federal’s South Philadelphia Advisory Board and, since 2005, had served on the board of Sun FCU. He was a retired supervisor at Defense Personnel Support Center, Philadelphia. Services were held on Sautrday. Our sympathy is extended to his family and credit union. Obituary
Guidance On Obtaining And Retaining Beneficial Ownership Information
NCUA has posted guidance entitled, Guidance on Obtaining and Retaining Beneficial Ownership Information, intended to assist credit unions in developing and implementing an effective Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance program regarding obtaining beneficial ownership information for certain accounts and member relationships.
The guidance was issued by FinCEN; the Board of Governors of the Federal Reserve System; FDIC; NCUA; Office of the Comptroller of the Currency; Office of Thrift Supervision; and the Securities and Exchange Commission.
Beneficial Ownership Guidance
CUNA Publishes Activity Book With The CU Difference
From finding words that begin with the letters “CU” to decoding tips to become a millionaire, kids can play their way through the Fun With Money activity book from CUNA.
Geared toward elementary and middle school youth, the activity book sneaks in credit union terminology and saving strategies. The full-color activity book features word finds, a crossword puzzle, quizzes, a maze, and a credit union mad lib.
Designed as a premium for youth who make deposits, Fun with Money works equally well as a leave-behind after a school presentation or as entertainment in the branch while adults meet with a loan officer.
To view a sample of the activity book online, click here.
Census Alert Letter Sent To 120 Million Households
The U.S. Census Bureau today began mailing advance letters to about 120 million addresses nationwide, notifying households that 2010 Census forms will be arriving March 15-17. The one-page letter urges households to complete the 10-question census form when it arrives and to return it in the accompanying prepaid envelope as soon as possible.
The more than 120 million households that receive both the advance letter and 2010 Census form by mail represent about 90% of all residential addresses in the country. Census workers last week started hand-delivering census forms to another 9% of addresses in areas where many households lack traditional city-style postal addresses. Hand-delivery of 2010 Census forms is also occurring along hurricane-affected areas of the Gulf Coast. Less than 1% of households are in areas where it’s more efficient for census takers to conduct census interviews rather than drop-off and require mail-back of the form.
Ben Franklin To Get A Facelift
The Treasury Department announced Friday that a new design for the $100 bill will be unveiled next month. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke will unveil the facelift for Benjamin Franklin at an April 21 ceremony in the ornate Cash Room at the department, the site of Ulysses Grant's first inaugural ball in 1869.
Training materials on the new $100 bill for those who handle cash and educational information will be available in 25 languages beginning on April 21 at www.newmoney.gov.
Chapter News
On Saturday, March 6, the Beaver Valley Chapter of Credit Unions held its 14th annual bowl-a-thon to benefit the Pennsylvania Credit Union Foundation. The bowl-a-thon was originally scheduled for February 6, but was postponed due to the first huge snowfall in Pittsburgh since 1993.
The 85 bowlers helped to raise more than $7,000 for the Foundation. Clearview FCU’s team raised $1,700 for the event, WEST-AIRCOMM FCU raised $1,500, and the Chapter donated $1,000. Special thanks goes to Dave Ackerman, USX FCU, for coordinating the event, as well as to all the vendors for their support, donations, and participation.
Association Board Chairman Ray Brunner and his wife, Lu, participated in the event, as well as Monika Scott, Senior Account Executive, and Joe Wambach, Executive Director of the PA Credit Union Foundation.
Newsmakers
Horizon FCU, Williamsport, participated in the West Branch Susquehanna Builders Association’s Annual Home Show, March 4-7, at Lycoming College Recreation Center. Horizon employees staffed a booth and explained the many benefits of membership and how to join. The crowd was estimated at 5,000 people visiting 201 booths.
TruMark Financial Credit Union, Trevose, recently sponsored an investment fraud presentation for more than 400 graduating seniors from Plymouth Whitemarsh High School, in Plymouth Meeting. Doug Hassenbein, representative from the Pennsylvania Securities Commission, discussed investment scams, identity theft, and affinity fraud through social media and other online channels.
National News
$2.6M-asset FCU in Pa. is liquidated
ALEXANDRIA, Va. (3/8/10)—With $2.6 million in assets and 1,085 members, Lawrence County School Employees FCU(Lawrence FCU) of New Castle, Pa. was liquidated by the National Credit Union Administration Friday. This is the fourth federally insured credit union liquidation in 2010.
First Choice FCU, also of New Castle, purchased and assumed a portion of Lawrence FCU's assets, loans and shares, enabling Lawrence FCU's members to receive uninterrupted service.
The NCUA announcement said the agency retained the remaining assets, loans, and shares, and it attributed the liquidation to Lawrence FCU's "declining financial condition."
The purchaser, $22.3 million-asset First Choice, is described as a full-service credit union with a broad array of financial services. It already served approximately 4,415 members who either live, work, worship, or attend school in Lawrence County or work for one of the companies in its field of membership.
UBIT task force says Bellco decision shows the way
WASHINGTON (3/8/10)--The U.S. District Court's summary judgment decision on one of the issues in the recently concluded Bellco Credit Union case "represents 'substantial authority' under federal tax law" for the position that financial products and services that are sold by credit unions to their members are exempt from unrelated business income taxes, Foley & Lardner LLP has concluded.
Judge Christine M. Arguello, who is presiding over the case, ruled last November that investment products that Bellco sold to its members, including stocks, bonds, mutual funds and annuities, were "substantially related" to Bellco's tax-exempt purposes, and therefore the income from those activities was, under the law, exempt from UBIT.
The Foley & Lardner law firm, who represented Bellco in its case against the U.S. Government, stated in its memorandum that credit unions would not be subject to civil tax penalties if they file UBIT tax returns "treating income from selling financial products and services to members as exempt from UBIT."
"Also, professional tax return preparers can prepare Form 990-T for a credit union treating income from selling financial products and services to members as exempt from UBIT without risking the separate civil tax penalty that can be imposed on preparers," according to the release.
However, the firm mentioned that it believes that the U.S. Internal Revenue Service "will still assert that financial product sales to members are unrelated business activities at credit unions" and "may well claim that additional tax is due if a credit union does not report income from such sales as unrelated business taxable income" on their income tax returns.
Additionally, Bellco would not represent substantial authority if the summary judgment is successfully appealed. Since the judge has not yet rendered a decision on other issues in the case following a trial on those issues in December, an appeal is still possible. Also, the release noted that "the court in Bellco decided that income from selling financial products and services to non-members is subject to UBIT."
Bellco last year challenged the IRS's assertion that UBIT was due on three of its products, and sought $199,293 in tax refunds from the IRS.
CUNA to NCUA: CUs need help dealing with NCUSIF costs
WASHINGTON (3/8/10)--In a letter to National Credit Union Administration (NCUA) Chairman Debbie Matz, the Credit Union National Association (CUNA) called on the NCUA to "work within its current statutory authority to help credit unions bear the burden" of "unprecedented National Credit Union Share Insurance Fund (NCUSIF) costs."
While CUNA commended the NCUA for helping credit unions "spread out the costs associated with the funding of the Corporate Stabilization Fund," CUNA suggested that the NCUA temporarily reduce the normal operating level of the NCUSIF from the current 1.3% to no lower than 1.2%. This move could reduce the amount of funds that credit unions must pay into the insurance fund, according to CUNA.
CUNA also proposed allowing insured credit unions to spread out their NCUSIF costs over several years, "even if the normal operating level is at or above 1.2%, consistent with a restoration plan to ensure the NCUSIF is properly funded."
CUNA also commended Matz for her open communication with U.S. Treasury Secretary Tim Geithner on the issue of member business lending, and CUNA President/CEO Dan Mica said that this letter was referenced both in his conversation with Geithner and CUNA-backed House testimony that was delivered in late February.
CUNA is developing a white paper on alternative capital for credit unions and will share that paper with the NCUA, the National Association of Credit Union Supervisors, and the credit union system once it is completed. CUNA will also comment on the NCUA's recently proposed corporate credit union rule changes in a letter to be released next week.
CUNA will also provide the NCUA with input on its current process for handling credit union mergers through its newly founded Mergers Task Force. CUNA's recommendations will be provided to the NCUA by May 1.
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