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Member Deposits Remain Protected to $250,000; Member Services Uninterrupted

ALEXANDRIA, Va. (Jan. 13, 2016) – The Director of the Michigan Department of Insurance and Financial Services today placed Clarkston Brandon Community Credit Union into conservatorship and appointed the National Credit Union Administration as conservator.

Deposits at Clarkston Brandon Community Credit Union remain protected by the National Credit Union Share Insurance Fund. Administered by NCUA, the Share Insurance Fund insures individual accounts up to $250,000, and a member’s interest in all joint accounts combined is insured up to $250,000. The Share Insurance Fund separately protects IRA and KEOGH retirement accounts up to $250,000. The Share Insurance Fund has the backing of the full faith and credit of the United States.

The Michigan Department of Insurance and Financial Services placed Clarkston Brandon Community Credit Union into conservatorship because of unsafe and unsound practices at the credit union. While continuing normal member services, NCUA will work to resolve issues affecting the credit union’s operations. Members can continue to conduct normal financial transactions, deposit and access funds, make loan payments and use shares.

Clarkston Brandon Community Credit Union is a federally insured, state-chartered credit union with 9,413 members and assets of $68.8 million, according to the credit union’s most recent Call Report.  Chartered in 1957, Clarkston Brandon Community Credit Union serves the residents and businesses of Oakland, Genesee, Lapeer, Livingston and Macomb counties in Michigan.

Members who have questions about the conservatorship may review the Clarkston Brandon Community Credit Union Frequently Asked Questions document attached to this release and available online here (opens new window).

ALEXANDRIA, Va. (Jan. 19, 2016) – The National Credit Union Administration announced today the January 2016 issue of The NCUA Report is now available online (opens new window).

This latest issue includes columns from NCUA Board Chairman Debbie Matz and Board Member J. Mark McWatters. Additionally, it contains articles from several NCUA offices on the agency’s initiatives and information on supervisory, regulatory and compliance issues that are important to all federally insured credit unions.

The articles in this month’s edition include:

• Welcome to the New Interest Rate Environment?
• Chairman’s Corner: Year of Regulatory Relief Yields Real Results
• Use the First Part of 2016 to Engage and Educate Members
• Board Member McWatters’ Perspective: Exam Appeals: Credit Unions Deserve a Better Process—Part 2
• Board Actions: Board Approves Expanded Insurance Coverage on Escrow Accounts
• Determining Impairment in TDRs
• Understanding the Challenges Facing Minority Credit Unions
• New Associational Common-Bond Rule Already Providing Relief
• Mark Your Calendars for Our Upcoming Webinars

Published monthly, The NCUA Report is NCUA’s flagship publication. The newsletter highlights important Board actions and key issues that credit union managers, staff and volunteers need to know. Interested readers can subscribe to the online version of the newsletter here (opens new window). Previous issues of The NCUA Report are available online at http://go.usa.gov/cghah (opens new window).

ALEXANDRIA, Va. (Jan. 20, 2016) – Internet Archive Federal Credit Union, of New Brunswick, New Jersey, today paid all shares insured by the National Credit Union Administration in full to members of record as part of its voluntary liquidation.

NCUA initiated cease-and-desist order proceedings on Nov. 24, 2015 in order to prevent the credit union from committing unsafe and unsound practices and violations of law, rule, and regulation. Upon the recommendation of the credit union’s board of directors, the membership of Internet Archive Federal Credit Union voted to voluntarily liquidate on Dec. 8, 2015. NCUA regulations required the credit union to then provide NCUA with a plan for its voluntary liquidation. NCUA approved the voluntary liquidation plan on Jan. 6, 2016, and cease-and-desist proceedings were abated in anticipation of the credit union’s share distribution to members.

The temporary cease-and-desist order identified the credit union’s failure to correct ongoing deficiencies since it was chartered, including:

• Unwillingness to open accounts within the field of membership, make loans, and establish operations in the low-income community where the credit union was chartered to serve;
• Violations of the Bank Secrecy Act and USA PATRIOT Act; and
• Weakening financial conditions and mounting losses. 

The temporary cease and desist order required the credit union take certain actions, including:

• Develop and implement a marketing plan targeting the field of membership the credit union was chartered to serve: New Brunswick and Highland Park, New Jersey;
• Provide annual, formal Bank Secrecy Act training for all staff and officials;
• Engage a qualified, independent third party to conduct Bank Secrecy Act compliance program testing and report the results of that testing to the credit union’s board of directors;
• Develop a system of internal controls to ensure ongoing compliance with laws and regulations related to the Bank Secrecy Act, anti-money laundering and Office of Foreign Assets Control regulations;
• Develop and implement an adequate customer identification program to verify the credit union knows the identity of any person applying for membership;
• Cease all online account opening activity until a customer identification program has been developed in accordance with federal law, approved by NCUA’s Region II Director and implemented;
• Ensure that lists of subjects and businesses periodically published by the Financial Crimes Enforcement Network are cross-checked against the credit union’s membership records; and
• Develop and implement a written strategic business plan and budget directed at reversing the ongoing deterioration of net worth and earnings in order to avoid Prompt Corrective Action.

Chartered in 2012, Internet Archive Federal Credit Union had assets of $2.25 million and served 391 members, according to the credit union’s most recent Call Report.

Agencies Aim to Double the Number of CDFI Credit Unions in 2016

ALEXANDRIA, Va. (Jan. 21, 2016) – The National Credit Union Administration and the U.S. Treasury Department’s Community Development Financial Institutions Fund today signed an agreement that will streamline the application process for low-income credit unions to become certified as Community Development Financial Institutions.

Credit unions that obtain CDFI certification can access training and competitive award programs provided by the CDFI Fund, and these resources can aid these institutions’ capacity to provide underserved communities with access to safe and affordable financial services. 

“This Memorandum of Understanding opens up enormous possibilities for credit unions,” NCUA Board Chairman Debbie Matz said. “By facilitating the CDFI application process and, ultimately, increasing  the number of certified CDFI credit unions, we’re laying the foundation for greater access to affordable financial services and more investment in local communities. This will help credit unions better serve members and communities that have been difficult to reach, and that will help more people build wealth and more secure financial futures for themselves and their families.”

“CDFIs nationwide are making a real difference in low-income communities by providing consumers with safe and affordable financial services and by providing neighborhood businesses with access to capital,” CDFI Fund Director Annie Donovan said. “Many low-income credit unions are already performing this important work, but need more support. By partnering with NCUA to increase the number of credit unions certified as CDFIs, we will not only expand access to the CDFI Fund’s programs but also reach more unbanked and underbanked individuals.”

“We’re looking forward to helping more credit unions become certified as Community Development Financial Institutions,” said William Myers, Director of NCUA’s Office of Small Credit Union Initiatives. “We’re going to be able to help credit unions save time and money in the certification process and bring more recognition to what credit unions do so well.”

Today’s action launches a plan with a goal of doubling the number of certified CDFI credit unions by the end of 2016. Increasing the number of certified CDFI credit unions could significantly expand funding that can be used to offer financial services to underbanked low-income individuals and make investments in local businesses, affordable housing, and community facilities.

There are currently 295 credit unions certified as CDFIs. The majority of these also hold NCUA’s low-income credit union designation.

Board Action Bulletin

Public Comments Also Sought on Agency’s Draft Five-Year Strategic Plan

ALEXANDRIA, Va. (Jan. 21, 2016) – The National Credit Union Administration Board convened its first open meeting of 2016 at the agency’s headquarters here today and unanimously approved the release of three items for public comment, including the agency’s:

• Methodology for calculating the annual Overhead Transfer Rate;
• Methodology for calculating the annual Federal Credit Union Operating Fee; and
• Proposed
  2017–2021 Strategic Plan describing NCUA’s strategic goals in the areas of safety and soundness, consumer protection and financial literacy, and workforce development and diversity.

The Board also unanimously approved technical amendments to the agency’s regulations to reflect changes in the function and reporting responsibilities of the Office of Minority and Women Inclusion.

Comments Sought on Overhead Transfer Rate and Federal Credit Union Operating Fee Methodologies

NCUA will take public comments on how the agency’s Overhead Transfer Rate and Federal Credit Union Operating Fee are calculated after the Board voted to publish both methodologies in the
Federal Register.

Both methodologies have previously been available on the
Budget and Supplementary Materials page of the agency’s website. NCUA Board Chairman Debbie Matz announced at the Board’s November 2015 open meeting that she would request publication of both methodologies in the
Federal Register, and comments will be posted on the agency’s website, as is done with proposed rules.

“I am certainly open to considering new ideas to simplify or improve both methodologies, as long as the methodologies remain objective, equitable and neutral with respect to charter type. Summaries of the comments, along with the Board’s responses to the comments, will be published later this year in the
Federal Register.”

The methodologies describe the process for calculating the Overhead Transfer Rate and the Federal Credit Union Operating Fee, which are the two primary funding mechanisms for the agency’s operating budget.

“The calculations NCUA annually performs to determine the Overhead Transfer Rate and the Operating Fee are purely mathematical, free of subjective and political judgments,” Matz said.

The Operating Fee formula was originally established in 1979. The Overhead Transfer Rate methodology has been in place since 2003 and was validated in 2011 by an independent accounting firm, PricewaterhouseCoopers.

Comments on the methodologies must be received within 90 days of publication in the
Federal Register.

Draft Strategic Plan Sets Goals for a Changing Financial Services Environment

The NCUA Board approved for public comment a proposed
2017–2021 Strategic Plan. The plan summarizes internal and external factors affecting the agency and the credit union system, evaluates NCUA programs and risks and provides goals and objectives.

The agency’s three strategic goals described in the draft five-year plan are:

• Ensuring a safe and sound credit union system;
• Promoting consumer protection and financial literacy; and
• Cultivating an inclusive, collaborative workplace that maximizes productivity and enhances impact.

“The credit union system has grown and evolved since the end of the financial crisis,” Matz said, “and NCUA continues to strive to keep pace with that growth and change. The draft plan provides a detailed description of the agency’s goals, the steps we’ll take to reach them and the offices responsible for getting us there, which in turn drives the agency’s budget process. Releasing the draft strategic plan for public comment is part of NCUA’s ongoing commitment to transparency. We look forward to reading the comments we receive.”

Copies of the agency’s proposed
2017–2021 Strategic Plan, as well as previous strategic plans and annual performance plans, are available online
here. Comments on the plan must be received within 60 days of publication of the
Federal Register notice about the strategic plan.

Board Approves OMWI Restructuring

NCUA will complete a restructuring of its Office of Minority and Women Inclusion with the Board’s approval of a final rule (Part 790) that will have the OMWI Director serve as the agency’s Director of Equal Employment Opportunity and report to the Board Chairman.

NCUA established its Office of Minority and Women Inclusion in 2011, with its Director reporting to the agency’s Executive Director. At that time, the agency’s EEO program operated separately from OMWI. In 2014, NCUA merged the EEO program into OMWI, but the lack of a permanent OMWI Director delayed the completion of the restructuring. When the final rule becomes effective, the OMWI Director will assume the EEO Director’s responsibilities and report to the Chairman. The change in reporting also complies with the letter and the spirit of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which required the creation of NCUA’s Office of Minority and Women Inclusion.

“Enhancing diversity and inclusion is a top priority for me and for our agency,” Matz said. “Since we created the office in 2011, the OMWI Director or Acting Director has met regularly with me, and we have worked together closely on issues of diversity and inclusion. Now that the Equal Employment Opportunity office has been merged into OMWI and we have a Director in place, we can update our reporting structure.”’

The final rule, available online
here (opens new window), is effective upon publication in the
Federal Register.

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. NCUA also live streams, archives and posts

videos of open Board meetings online.

Board Action Bulletin

The NCUA Board was briefed on a supervisory matter, and approved a personal action. Both matters remain confidential at this time.

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. NCUA also live streams, archives and posts

videos of open Board meetings online.

Tax Identity Theft Awareness Week Aims to Educate Consumers about Scams

ALEXANDRIA, Va. (Jan. 25, 2016) – With tax season beginning, the Federal Trade Commission has announced Tax Identity Theft Awareness Week for 2016, and the National Credit Union Administration has new online resources to help consumers protect themselves.

NCUA has updated its tax identity theft resources page (opens new window) on the MyCreditUnion.gov (opens new window) consumer website. The page includes useful information for preventing or reporting identity theft that may be perpetrated using fake contacts that appear to be legitimate Internal Revenue Service requests for taxpayer information. Credit unions are encouraged to share this information with their members.

“Cyber hackers and old-fashioned thieves can trick people into divulging personal and financial information not only during tax season, but all year long,” Board Chairman Debbie Matz said. “NCUA has an ongoing commitment to protecting and educating consumers, helping them understand how they can prevent theft and informing them where to get help should they become victims of fraud.”

Consumers should be aware the IRS does not initiate contacts with taxpayers by email, text messages or social media channels to request personal or financial information.

Tax Identity Theft Awareness Week for 2016 (opens new window) runs from Jan. 25 through Jan. 29.

The U.S. Department of Justice reports that, in 2014, 17.6 million Americans were victims of identity theft with estimated losses of $15.4 billion. Tax season is a particularly busy time for identity thieves, and the IRS itself can be a target. IRS paid about $5.8 billion in fraudulent tax refunds in 2013 while preventing about $24 billion in cases in which it was able to detect and prevent fraud.

MyCreditUnion.gov (opens new window) also has numerous resource pages with information to help credit union members understand and prevent identity theft and protect themselves from other frauds and scams. NCUA also has videos describing how to fight against fraud on its YouTube channel (opens new window).

NCUA Will Host a Feb. 11 Webinar on How to Use the New Reporting System

ALEXANDRIA, Va. (Jan. 25, 2016) – The National Credit Union Administration announced today that credit union service organizations will have 60 days to register with NCUA’s CUSO Registry, the new online system for CUSOs to report their operational and financial information directly to the agency.

The registration period begins Monday, Feb. 1, and ends Thursday, March 31. There is no fee to use the registry. CUSOs can access the registry at http://go.usa.gov/cPcy5 (opens new window).

NCUA will provide additional support material and customer support when the system goes live on Feb. 1.

As part of NCUA’s enhanced CUSO rule approved by the Board in November 2013, federally insured credit unions are responsible for ensuring the CUSOs they make loans to or invest in agree to provide certain information directly to NCUA.

Additional information on the CUSO Registry and the registration process can be found here.

In addition, as part of the launch of the CUSO Registry, NCUA will host a webinar on how to use the system on Thursday, Feb. 11, beginning at 2:30 p.m. Eastern. An online registration page for the webinar will be available in the coming days. There will be no charge for the webinar.

In advance of the webinar, registrants can submit questions to [email protected]. The subject line of the email should read, “CUSO Registry Training.”

ALEXANDRIA, Va. (Jan. 27, 2016) – Twenty-two federally insured credit unions subject to civil monetary penalties for filing late Call Reports in the third quarter of 2015 have consented to penalties, the National Credit Union Administration announced today.
In the third quarter of 2014, 31 credit unions consented to penalties.
The late filers will pay a total of $18,682 in penalties. Individual penalties range from $115 to $10,000. The median penalty was $330. The Federal Credit Union Act requires NCUA to send any funds received through civil monetary penalties to the U.S. Treasury.
“While the year-over-year number has dropped, it’s disappointing to see the number of late filers up from the previous quarter,” NCUA Board Chairman Debbie Matz said. “I urge credit unions that are encountering difficulties meeting the Call Report filing deadline to take advantage of the assistance NCUA offers. The agency needs all credit unions to file in a timely manner.”
A list of credit unions filing late in the third quarter and agreeing to pay civil monetary penalties is available online here.
The assessment of penalties primarily rests on three factors: the credit union’s asset size, its recent Call Report filing history and the length of the delay. Of the 22 credit unions agreeing to pay penalties for the third quarter of 2015:

• Ten had assets of less than $10 million;
• Eight had assets between $10 million and $50 million;
• Three had assets between $50 million and $250 million; and
• One had assets greater than $250 million.

Three of the late-filing credit unions had been late in a previous quarter.
A total of 40 credit unions filed Call Reports late for the third quarter of 2015. NCUA consulted regional offices and, when appropriate, state supervisory authorities to review each case. This review determined mitigating circumstances in nine cases that led to credit unions not being penalized. NCUA informed the remaining 31 credit unions of the penalties they faced and advised them they could reduce their penalties by signing a consent agreement. NCUA also said it would initiate administrative hearings against credit unions that did not consent. NCUA subsequently granted waivers to nine of those credit unions.

NCUA sends reminder messages about Call Report filing deadlines that include information on how to receive technical support to handle filing problems. The agency also has created an automated reminder email system that contacts credit unions that have not filed their Call Reports and confirms successful filing.
NCUA’s Office of Small Credit Union Initiatives has dedicated an Economic Development Specialist to assist small credit unions in filing Call Reports on time. Credit unions that would like assistance should send an email to [email protected]. NCUA also has produced a video (opens new window) describing how to file Call Reports.

ALEXANDRIA, Va. (Jan. 29, 2016) – The National Credit Union Administration has issued six orders in January prohibiting the following individuals from participating in the affairs of any federally insured financial institution:

• Tara Chambers, a former employee of Sears Spokane Employees Federal Credit Union in Spokane, Washington, pleaded guilty to the charges of theft and embezzlement. Chambers was sentenced to time served and five years’ supervised release.
• Felicia Marie Gomez, a former employee and institution-affiliated party of Bellwether Community Credit Union in Manchester, New Hampshire, consented to the issuance of a prohibition order to avoid the time and expense of administrative litigation.
• Nora Nelly Gonzalez, a former employee and institution-affiliated party of Southwest Financial Federal Credit Union in Dallas, Texas, consented to the issuance of a prohibition order to avoid the time and expense of administrative litigation.
• Angela Michelle Martin, a former employee of Mountain Community Federal Credit Union in Fort Oglethorpe, Georgia, pleaded guilty to the charge of embezzlement. Martin was sentenced to two years in prison, three years’ supervised release and ordered to pay restitution in the amount of $489,583.07.
• Male Yahaira Rivera, a former employee of Fairwinds Credit Union in Orlando, Florida, was convicted of embezzlement. Rivera was sentenced to 18 months in prison, five years’ supervised release and ordered to pay restitution in the amount of $258,000.
• Sherrie Ann Rivera, a former employee and institution-affiliated party of Peoples Credit Union in Pembroke Pines, Florida, consented to the issuance of a prohibition order to avoid the time and expense of administrative litigation.

Credit unions may search prohibition and administrative orders by name, institution, city, state and year at http://go.usa.gov/gFP5. The webpage also provides links to the enforcement actions of other federal banking regulators against other institutions or their affiliated parties.

NCUA enforcement orders are available online and for inspection at NCUA’s Office of General Counsel between 9 a.m. and 4 p.m. Monday through Friday. You also may order copies by mail from NCUA, 1775 Duke St., Alexandria, VA 22314-3428.

Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million.