Board Action Bulletin
The NCUA Board unanimously approved placing BCT Federal Credit Union of Binghamton, New York into conservatorship under Section 206(h)(1) of the Federal Credit Union Act.
The NCUA tweets all open Board meetings live. Follow @TheNCUA (opens new window) on Twitter, and access Board Action Memorandums and NCUA rule changes at www.ncua.gov. The NCUA also live streams, archives and posts videos of open Board meetings online.
ALEXANDRIA, Va. (June 10, 2011) – The National Credit Union Administration (NCUA) today assumed control of service and operations at BCT Federal Credit Union of Binghamton, N.Y. While continuing normal member services, NCUA will work to resolve issues affecting the institution’s safety and soundness.
Deposits at BCT Federal Credit Union remain protected. Administered by NCUA, the National Credit Union Share Insurance Fund (NCUSIF) continues to insure individual accounts at BCT Federal Credit Union up to $250,000. The NCUSIF, like the FDIC’s Deposit Insurance Fund, has the backing of the full faith and credit of the U.S. Government.
BCT Federal Credit Union is a full service financial institution that has been working for the Southern Tier’s Educational Community for 67 years. Service to BCT Federal Credit Union’s 3,911 members will continue uninterrupted. Members can continue to conduct normal financial transactions—deposit and access funds, make loan payments, and use shares.
The decision to conserve a credit union enables the institution to continue regular operations with expert management in place, correcting previous service and operational weaknesses. During conservatorship, members may therefore continue to conduct business at the credit union.
The Federal Credit Union Act authorizes the NCUA Board to appoint itself conservator when necessary to conserve the assets of a federally insured credit union, protect members’ interests, or protect the NCUSIF.
BCT Federal Credit Union is the sixth federally insured credit union placed into conservatorship during 2011.
Members who have questions about the conservatorship may review the BCT Federal Credit Union Frequently Asked Questions document following to this release.
BCT Federal Credit Union
Frequently Asked Questions
Is my money safe and secure?
Yes, member accounts at BCT Federal Credit Union remain safe and fully insured up to the maximums established in federal law.
The National Credit Union Share Insurance Fund (NCUSIF) insures individual accounts up to $250,000 and joint accounts up to $250,000 per member. The NCUSIF also separately protects IRA and KEOGH retirement accounts up to $250,000.
The Share Insurance Estimator allows individuals to estimate their share insurance coverage. Once an individual inputs the required data, the Share Insurance Estimator produces a report with detailed explanations of insurance coverage.
Members with additional questions about their insurance coverage may contact the National Credit Union Administration’s Consumer Assistance Center toll free at 800-755-1030. The center answers calls Monday through Friday between 8:00 a.m. and 6:00 p.m. Eastern Daylight Time. Individuals may also visit the MyCreditUnion.gov website at any time for more information about insurance coverage.
What is the current status of BCT Federal Credit Union?
The National Credit Union Administration (NCUA) placed BCT Federal Credit Union into conservatorship on June 10, 2011.
In conservatorship, NCUA’s priority is to protect the assets of the members of BCT Federal Credit Union while working to maintain safe-and-sound credit union operations.
What is the National Credit Union Administration?
An agency of the federal government, NCUA, among other things, operates and manages the NCUSIF. The NCUSIF insures accounts at all federal credit unions including BCT Federal Credit Union.
What is a conservatorship?
A conservatorship means that NCUA has assumed control of a credit union in order to ensure a credit union’s financial stability and safe-and-sound operation. In a conservatorship, NCUA works to address issues related to a credit union’s operations and financial condition while maintaining member service.
Can I still conduct business at BCT Federal Credit Union?
Yes, BCT Federal Credit Union will remain open during the conservatorship.
What are NCUA’s plans for operations at BCT Federal Credit Union?
Through a conservatorship, NCUA seeks to fix operating issues at a credit union with a goal of protecting member assets and seeking a resolution to identified problems.
How many members and branches are affected by the conservatorship?
BCT Federal Credit Union operates in three locations, and service to the credit union’s more than 3,900 members continues.
What is the field of membership for BCT Federal Credit Union?
The credit union has a charter to provide financial services to people who serve the employees of public, private and parochial schools, and members of the Board of Education in Broome County, New York or Apalachin, Owego, Tioga Center, Newark Valley and Candor, New York. The charter was later expanded to include employees of selected employee groups who live or work in the above noted counties.
How big is BCT Federal Credit Union?
The credit union has approximately $52 million in assets.
How long will this conservatorship last?
In working to resolve the issues affecting BCT Federal Credit Union, NCUA’s top priority is to protect the interests of the credit union’s members. NCUA has no set timeframe for completing this resolution process.
What are NCUA’s plans for the future of BCT Federal Credit Union?
NCUA has made no decisions about the long-term future of the credit union. Continued credit union service for the members, however, is a priority.
Board Action Bulletin
Comments Sought on Hedging Interest Rate Risk; Golden Parachute Rule Refined
ALEXANDRIA, Va. (June 17, 2011) – The National Credit Union Administration (NCUA) Board today convened its sixth open meeting in 2011 at the agency’s headquarters and unanimously approved three items:
The Board also received updates on the performance of the National Credit Union Share Insurance Fund (NCUSIF) and the Temporary Corporate Credit Union Stabilization Fund (Stabilization Fund). The NCUSIF remained steady at the end of May with a 1.29 percent equity ratio for the eighth straight month. The Stabilization Fund’s net position increased $7 million over the last month.
Alternative Sampling Ability Added to Low-Income Designation Rule
To ease the burden on credit unions that seek to prove their low-income designation, NCUA amended its final rule (Part 701) to allow the use of income data drawn from surveys or statistically valid samples of member loan files.
This final rule permits federal credit unions to use statistically valid random samples of member income data either garnered through surveys or loan data to prove their low-income status to the agency.
This alternative approach helps credit unions that do not qualify as low-income according to the NCUA’s automated geocoding software, which uses member addresses and census data to evaluate qualification for low income status.
Some credit unions have argued that they serve low-income members who generally live in higher-income neighborhoods and therefore the geocoding approach does not accurately capture their membership’s income profile. These credit unions were previously burdened with an unduly difficult alternative to prove their low-income status.
Allowing federal credit unions to use statistically valid samples of member income data to qualify for low-income designation reduces a regulatory burden and responsibly responds to credit union concerns.
Federal credit unions will need to carry out sampling using consistent and careful methods, which the rule addresses.
The Board considered eight comments to the proposed rule that strongly supported its goal, and agreed with the basic structure and framework NCUA proposed.
The rule changes become effective 30 days following publication in the Federal Register.
Comments Sought on Using Derivatives to Manage Interest Rate Risk Following up on previous indications that NCUA would consider allowing consumer credit unions to use financial derivatives to manage interest rate risk, the Board issued an advanced notice of proposed rulemaking (Part 703) to seek comments on this concept.
NCUA generally prohibits credit unions from making derivatives transactions. Today, NCUA limits the number of credit unions engaging in such transactions to those approved to participate in a 12-year-old investment pilot program. Most credit unions are unfamiliar with the risks derivatives present, and demand for such instruments has been low.
However, given the Dodd-Frank Act’s mandate related to clearing derivatives through clearinghouses, and after the experience of the pilot program, the NCUA Board agreed that it is timely to reconsider this regulatory arrangement.
The information request asks a series of questions for those who wish to comment. Among the considerations is whether to allow more credit unions to purchase derivatives under conditions that had been set forth in the pilot program. The advance notice of proposed rulemaking will also collect information about whether to allow derivative activities on a case-by-case basis, whether to allow federal credit unions to engage in derivative activities independently or through a third party, and what standards NCUA ought to set in both the approval and governance of the activity.
Comments must be received within 60 days of publication in the Federal Register.
Technical Change to Golden Parachute Rule Better Represents Board’s Intent
To clarify its implementation, the Board made technical modifications to its recent rule (Part 750) covering golden parachutes and indemnification payments to institution-affiliated parties.
After publication in the Federal Register, NCUA staff discovered the Board’s intent regarding certain deferred compensation plans was not accurately reflected in the text of the rule. The technical change clarifies the Board’s intent that plans permissible under §457(b) of the tax code be excluded outright from the definition of golden parachute payment in the same way the rule treats §401(k) plans. To conform the rule text to the intent of the Board, the reference in the rule to §457 was corrected to read §457(b).
The rule prevents federally insured credit unions from providing lucrative rewards to departing executives in certain troubled situations. The “golden parachute” provisions apply to troubled credit unions affected by insolvency, a conservatorship, or rated CAMEL 4 or 5.
The interim final rule was made effective the same date of the original rule to avoid confusion.
NCUSIF Equity Ratio Remains Steady
For the eighth straight month, the NCUSIF equity ratio remains stable at 1.29 percent as of May 31. The NCUSIF ending reserve balance stood at $1.2 billion, which included an increase of $4.3 million in reserves for May.
Gross income for May was $19.4 million with expenses of $16.2 million, resulting in net income of $3.2 million. Cumulative net income for the year is $39.5 million. Ten credit unions have failed thus far in 2011 at a cost to the NCUSIF of $39.0 million.
As of May, 377 federally insured credit unions with assets of $40.5 billion and shares of $36.0 billion had CAMEL 4 or 5 designations. Additionally, 1,791 CAMEL 3 credit unions had assets of $146.5 billion and shares of $129.8 billion. Overall, approximately 20 percent of all credit union assets were in CAMEL 3, 4 or 5 institutions. The percentage of assets in CAMEL 1 and 2 credit unions has increased slightly in each of the past five months.
The Stabilization Fund total liabilities and net position stood at $401 million at the end of May, about $7 million higher than the end of April.
Financial data reported in 2011 for both the NCUSIF and the Stabilization Fund are preliminary and unaudited.
The NCUA tweets all open Board meetings live. Follow @TheNCUA (opens new window) on Twitter, and access Board Action Memorandums and NCUA rule changes at www.ncua.gov. The NCUA also live streams, archives and posts videos of open Board meetings online.
Board Action Bulletin
The NCUA Board unanimously approved placing O.U.R, Federal Credit Union of Eugene, Oregon into conservatorship under Section 206(h)(1) of the Federal Credit Union Act.
The NCUA Board unanimously approved placing Borinquen Federal Credit Union of Philadelphia, PA into conservatorship under Section 206(h)(1) of the Federal Credit Union Act.
The NCUA tweets all open Board meetings live. Follow @TheNCUA (opens new window) on Twitter, and access Board Action Memorandums and NCUA rule changes at www.ncua.gov. The NCUA also live streams, archives and posts videos of open Board meetings online.
ALEXANDRIA, Va. (June 24, 2011) – The National Credit Union Administration (NCUA) today assumed control of service and operations at Borinquen Federal Credit Union of Philadelphia. While continuing normal member services, NCUA will work to resolve issues affecting the institution’s safety and soundness.
Deposits at Borinquen Federal Credit Union remain protected. Administered by NCUA, the National Credit Union Share Insurance Fund (NCUSIF) continues to insure individual accounts at Borinquen Federal Credit Union up to $250,000. The NCUSIF, like the FDIC’s Deposit Insurance Fund, has the backing of the full faith and credit of the U.S. Government.
With $7 million in assets according to its most recent Call Report, Borinquen Federal Credit Union is a full-service financial institution that has served a low-income community in Philadelphia for 37 years. Service to Borinquen Federal Credit Union’s 8,600 members will continue uninterrupted. Members can continue to conduct normal financial transactions—deposit and access funds, make loan payments, and use shares.
The decision to conserve a credit union enables the institution to continue regular operations with expert management in place, correcting previous service and operational weaknesses. During conservatorship, members may therefore continue to conduct business at the credit union.
The Federal Credit Union Act authorizes the NCUA Board to appoint itself conservator when necessary to conserve the assets of a federally insured credit union, protect members’ interests, or protect the NCUSIF. Borinquen Federal Credit Union is the seventh federally insured credit union placed into conservatorship during 2011.
Members who have questions about the conservatorship may review the Borinquen Federal Credit Union Frequently Asked Questions document attached to this release (below).
Borinquen Federal Credit Union
Frequently Asked Questions
Is my money safe and secure?
Yes, member accounts at Borinquen Federal Credit Union remain safe and fully insured up to the maximums established in federal law.
The National Credit Union Share Insurance Fund (NCUSIF) insures individual accounts up to $250,000 and joint accounts up to $250,000 per member. The NCUSIF also separately protects IRA and KEOGH retirement accounts up to $250,000.
The Share Insurance Estimator allows individuals to estimate their share insurance coverage. Once an individual inputs the required data, the Share Insurance Estimator produces a report with detailed explanations of insurance coverage.
Members with additional questions about their insurance coverage may contact the National Credit Union Administration’s Consumer Assistance Center toll free at 800-755-1030. The center answers calls Monday through Friday between 8:00 a.m. and 6:00 p.m. Eastern. Individuals may also visit the MyCreditUnion.gov website at any time for more information about insurance coverage.
What is the current status of Borinquen Federal Credit Union?
The National Credit Union Administration (NCUA) placed Borinquen Federal Credit Union into conservatorship on June 24, 2011.
In conservatorship, NCUA’s priority is to protect the assets of the members of Borinquen Federal Credit Union while working to maintain safe-and-sound credit union operations.
What is the National Credit Union Administration?
An agency of the federal government, NCUA, among other things, operates and manages the NCUSIF. The NCUSIF insures accounts at all federal credit unions including Borinquen Federal Credit Union.
What is a conservatorship?
A conservatorship means that NCUA has assumed control of a credit union in order to ensure a credit union’s financial stability and safe-and-sound operation. In a conservatorship, NCUA works to address issues related to a credit union’s operations and financial condition while maintaining member service.
Can I still conduct business at Borinquen Federal Credit Union?
Yes, Borinquen Federal Credit Union will remain open during the conservatorship.
What are NCUA’s plans for operations at Borinquen Federal Credit Union?
Through a conservatorship, NCUA seeks to fix operating issues at a credit union with a goal of protecting member assets and seeking a resolution to identified problems.
How many members and branches are affected by the conservatorship?
Borinquen Federal Credit Union has one main office, and service to the credit union’s more than 8,600 members continues.
What is the field of membership for Borinquen Federal Credit Union?
The credit union has a community charter to serve persons who live in a geographic area in Philadelphia, Pennsylvania, bounded as follows: Olney Avenue on the north, Spring Garden Street on the south, 10th Street on the west, and Front Street on the east. Individuals who regularly work, worship, go to school, perform volunteer services, or participate in associations headquartered in the above area may join the credit union. People participating in programs to alleviate poverty or distress which are located in the above area may also become members, as can incorporated and unincorporated organizations located in the above area or maintaining a facility in the above area.
How big is Borinquen Federal Credit Union?
The credit union has approximately $7 million in assets.
How long will this conservatorship last?
In working to resolve the issues affecting Borinquen Federal Credit Union, NCUA’s top priority is to protect the interests of the credit union’s members. NCUA has no set timeframe for completing this resolution process.
What are NCUA’s plans for the future of Borinquen Federal Credit Union?
NCUA has made no decisions about the long-term future of the credit union. Continued credit union service for the members, however, is a priority.
ALEXANDRIA, Va. (June 24, 2011) – The National Credit Union Administration (NCUA) today assumed control of service and operations at O.U.R. Federal Credit Union of Eugene, Ore. While continuing normal member services, NCUA will work to resolve issues affecting the institution’s safety and soundness.
Deposits at O.U.R. Federal Credit Union remain protected. Administered by NCUA, the National Credit Union Share Insurance Fund (NCUSIF) continues to insure individual accounts at O.U.R. Federal Credit Union up to $250,000. The NCUSIF, like the FDIC’s Deposit Insurance Fund, has the backing of the full faith and credit of the U.S. Government.
O.U.R. Federal Credit Union is a full service financial institution that includes the residents of Lane County, Ore., participating within the past 12 months in programs of the Lane County Department of Community Health and Social Service. With assets reported at $4.3 million in its last Call Report, service to O.U.R. Federal Credit Union’s 2,184 members will continue uninterrupted. Members can continue to conduct normal financial transactions—deposit and access funds, make loan payments, and use shares.
The decision to conserve a credit union enables the institution to continue regular operations with expert management in place, correcting previous service and operational weaknesses. During conservatorship, members may therefore continue to conduct business at the credit union.
The Federal Credit Union Act authorizes the NCUA Board to appoint itself conservator when necessary to conserve the assets of a federally insured credit union, protect members’ interests, or protect the NCUSIF. O.U.R. Federal Credit Union is the eighth federally insured credit union placed into conservatorship during 2011.
Members who have questions about the conservatorship may review the O.U.R. Federal Credit Union Frequently Asked Questions document attached to this release.
Yes, member accounts at O.U.R. Federal Credit Union remain safe and fully insured up to the maximums established in federal law.
The National Credit Union Share Insurance Fund (NCUSIF) insures individual accounts up to $250,000 and joint accounts up to $250,000 per member. The NCUSIF also separately protects IRA and KEOGH retirement accounts up to $250,000.
The Share Insurance Estimator (http://webapps.ncua.gov/ins/ (opens new window)) allows individuals to estimate their share insurance coverage. Once an individual inputs the required data, the Share Insurance Estimator produces a report with detailed explanations of insurance coverage.
Members with additional questions about their insurance coverage may contact the National Credit Union Administration’s Consumer Assistance Center toll free at 800.755.1030. The center answers calls Monday through Friday between 8:00 a.m. and 6:00 p.m. Eastern Daylight Time. Individuals may also visit the MyCreditUnion.gov website at any time for more information about insurance coverage.
The National Credit Union Administration (NCUA) placed O.U.R. Federal Credit Union into conservatorship on June 24, 2011.
In conservatorship, NCUA’s priority is to protect the assets of the members of O.U.R. Federal Credit Union while working to maintain safe-and-sound credit union operations.
An agency of the federal government, NCUA, among other things, operates and manages the NCUSIF. The NCUSIF insures accounts at all federal credit unions including O.U.R. Federal Credit Union.
A conservatorship means that NCUA has assumed control of a credit union in order to ensure a credit union’s financial stability and safe-and-sound operation. In a conservatorship, NCUA works to address issues related to a credit union’s operations and financial condition while maintaining member service.
Yes, O.U.R. Federal Credit Union will remain open during the conservatorship.
Through a conservatorship, NCUA seeks to fix operating issues at a credit union with a goal of protecting member assets and seeking a resolution to identified problems.
O.U.R. Federal Credit Union operates in one location, and service to the credit union’s more than 2,100 members continues.
The credit union has a charter to provide financial services to the residents of Lane County, Oregon, participating within the past 12 months in programs of the Lane County Department of Community Health and Social Services.
The credit union has approximately $4.3 million in assets according to its most recent Call Report.
In working to resolve the issues affecting O.U.R. Federal Credit Union, NCUA’s top priority is to protect the interests of the credit union’s members. NCUA has no set timeframe for completing this resolution process.
NCUA has made no decisions about the long-term future of the credit union. Continued credit union service for the members, however, is a priority.
ALEXANDRIA, Va. (June 24, 2011) – The National Credit Union Administration (NCUA) liquidated St. James A.M.E. Federal Credit Union of Newark, N.J., today. North Jersey Federal Credit Union of Totowa, N.J., immediately assumed St. James A.M.E. Federal Credit Union’s members.
The accounts of the new North Jersey Federal Credit Union members remain federally insured by the National Credit Union Share Insurance Fund up to $250,000. The new North Jersey Federal Credit Union members will also experience no interruption in services. North Jersey Federal Credit Union is a large, full-service institution with $194 million in assets and more than 29,700 members.
NCUA made the decision to liquidate St. James A.M.E. Federal Credit Union and discontinue its operations as they were after determining the credit union was insolvent and has no prospect for restoring viable operations on its own. At the time of liquidation and subsequent purchase by North Jersey FCU, the credit union served 831 members and had deposits of approximately $1 million.
Chartered in 1946, St. James A.M.E. Federal Credit Union obtained federal insurance on Jan. 4, 1971. The field of membership was originally limited to members of the St. James African Methodist Episcopal Church in Newark. Their membership expanded to include members of the Greater Mt. Teman A.M.E. Church in Elizabeth, N.J., in 1994.
St. James A.M.E. Federal Credit Union is the tenth federally insured credit union liquidation in 2011.
Board Action Bulletin
Revised Program Could Significantly Decrease 2011 Assessments
ALEXANDRIA, Va. (June 29, 2011) – Responding to requests and feedback from credit unions, the NCUA Board today unanimously adopted a plan to permit voluntary prepayments of $500 million in Corporate Stabilization Fund assessments. The approved program has the potential to decrease the currently projected 2011 Stabilization Fund assessment by 6.4 basis points from 24.9 to 18.5 basis points of insured shares.
NCUA designed the voluntary prepayment of Stabilization Fund assessments program with the following principles in mind:
At the May 19 open Board meeting, NCUA made available for public feedback a proposed voluntary prepayment of Corporate Stabilization Fund assessments program. NCUA received 184 comments. Overall, comments were generally positive, requested a dollar-for-dollar decrease in assessments, and an increased aggregate minimum from the originally proposed $300 million. Based on these public comments, the Board adopted this revised plan.
The key programmatic changes from the original proposal include:
Remaining from the original proposal, other elements of the approved program include:
Voluntarily prepaying future assessments will not change the ultimate cost of the Corporate System Resolution.
Program information and instructions regarding participation are available on NCUA’s website. Credit unions wishing to participate should click here, download the participation form, and return it to NCUA no later than July 29. NCUA will also communicate this information via a forthcoming Letter to Credit Unions.
On Aug. 9, NCUA will tally the participation level to see if credit unions commit to $500 million and announce the results. If not, the program would not be executed and the regular scheduled assessment would be billed. If credit union commitments exceeded the program amount, all credit unions participating would be debited a prorated amount of their commitment on Aug. 18–and a reduced assessment would follow.
The NCUA tweets all open Board meetings live. Follow @TheNCUA (opens new window) on Twitter, and access Board Action Memorandums and NCUA rule changes at www.ncua.gov. The NCUA also live streams, archives and posts videos of open Board meetings online.
ALEXANDRIA, Va. (July 8, 2011) – The National Credit Union Administration (NCUA) liquidated Borinquen Federal Credit Union of Philadelphia today. NCUA made the decision to liquidate Borinquen Federal Credit Union and discontinue its operations after determining the credit union was insolvent and had no prospect for restoring viable operations.
Member deposits are federally insured by the National Credit Union Share Insurance Fund up to $250,000. NCUA’s Asset Management and Assistance Center will issue checks to individuals holding verified share accounts in the credit union within one week.
Members with additional questions about their insurance coverage may contact the National Credit Union Administration’s Consumer Assistance Center toll free at 800-755-1030. The center answers calls Monday – Friday between 8 a.m. and 6 p.m. Eastern Daylight Time. Individuals may also visit the MyCreditUnion.gov (opens new window) website at any time for more information about their insurance coverage.
Borinquen Federal Credit Union served 8,600 members and had deposits of approximately $6 million. Chartered in 1974, Borinquen Federal Credit Union was a full-service financial institution that served a low-income community in Philadelphia for 37 years. It is the eleventh federally-insured credit union liquidation in 2011.
ALEXANDRIA, Va. (July 11, 2011) – The National Credit Union Administration (NCUA) liquidated Vensure Federal Credit Union of Mesa, Ariz., today.
Member deposits are federally insured by the National Credit Union Share Insurance Fund up to $250,000. NCUA’s Asset Management and Assistance Center will issue checks to individuals holding verified share accounts in the credit union within one week.
NCUA made the decision to close Vensure FCU and discontinue its operation after determining the credit union was insolvent and has no prospects for restoring viable operations. At the time of liquidation the credit union served 140 members and had deposits of approximately $8.1 million.
The credit union provided financial services to employees of Vensure Employer Services, its clients, and other corporate entities. Vensure FCU is the twelfth federally-insured credit union liquidation in 2011.
