New-home sales is more bad news, Hampel tells media
WASHINGTON (6/28/07)--New-home sales fell in May for the fourth time in the past five months and mortgage rates are rising, and that's not good news, according to Bill Hampel, chief economist with the Credit Union National Association (CUNA).
Associated Press, CNN/Money and Bloomberg News reported Hampel's analysis on the slump in the housing market Tuesday.
Rates for 30-year mortgages have risen by one-half percentage point in recent weeks to 6.69%, meaning the maximum mortgage a borrower can qualify for is 5% lower.
"That is more bad news for an already fragile market," Hampel said in the Associated Press article. He was the only financial institution industry representative interviewed.
While the bad news from the housing sector is not a surprise, it is a sign that no improvement is on the horizon, said the CNN/Money article.
"We're just in the early stages of the decline in housing," Hampel told CNN/Money, adding that the recent rise in mortgage and other interest rates will only make a bad situation worse.
"It's going to be moribund through the rest of this year to late next year," Hampel said. "It's not going to plummet. But it's going to get weaker month-to-month, and probably bottom out late this year or early next."
In the Bloomberg News article, Hampel said, "The strong headwinds haven't abated at all. Tightening mortgage credit, coupled with affordability issues, will slow the recovery."
courtesy of cuna.org
Friday, June 29, 2007
Credit Unions vs the IRS
CU victory in government UBIT opinion
WASHINGTON (6/28/07)— In what the Credit Union National Association (CUNA) said is "an important victory for credit unions," the Internal Revenue Service (IRS) has released a new series of Technical Advice Memoranda (TAMs) that declare credit union interchange fees are not subject to unrelated business income tax (UBIT).
"This is a very bright spot in the UBIT picture," CUNA General Counsel Eric Richard said Wednesday. "We pushed very hard to protect interchange fees from UBIT, and this development allows us to focus on other products at stake."
The IRS opinion is of fundamental importance for two reasons, according Richard.
First, interchange fees are one of the largest sources of credit union income that were considered by the IRS for purposes of UBIT—representing more than $1 billion annually, according to CUNA estimates.
Second, it can be argued that the TAMs' treatment of interchange fee income is a clear signal from the IRS that the agency understands the income is derived from legitimate credit union activities evolving with the financial marketplace.
That second point, Richard said, could be significant in more upcoming opinions from the IRS on UBIT.
The IRS TAMs that address credit card interchange fees were part of the agency's most recent round of advice memoranda, which otherwise simply reiterated earlier UBIT advice.
The IRS already in 2007 has said that several products sold by unidentified state-chartered credit unions would be subject to UBIT. Among them, the sale of:
Credit life and disability insurance;
Accidental death and dismemberment (AD&D) insurance;
MEMBERS financial management services;
Car warranties;
Guaranteed auto protection (GAP) insurance; and
Dental and cancer insurance.
Federal credit unions are not subject to UBIT. The TAMs are directed to individual credit unions and do not set a precedent for all credit unions, but they could indicate how the IRS may approach another state-chartered credit union's products and services, according to Richard.
Richard reiterated that CUNA and the UBIT Steering Committee continue to work with credit unions affected by the IRS opinions and will pursue litigation as necessary. He said there are at least nine more TAMs in the pipeline.
The CUNA general counsel advises that because products, services and pricing structures are unique to individual credit unions, they should work closely with their accounting firms and attorneys in making any decisions related to UBIT for 2006 and 2007.
courtesy of cuna.org
WASHINGTON (6/28/07)— In what the Credit Union National Association (CUNA) said is "an important victory for credit unions," the Internal Revenue Service (IRS) has released a new series of Technical Advice Memoranda (TAMs) that declare credit union interchange fees are not subject to unrelated business income tax (UBIT).
"This is a very bright spot in the UBIT picture," CUNA General Counsel Eric Richard said Wednesday. "We pushed very hard to protect interchange fees from UBIT, and this development allows us to focus on other products at stake."
The IRS opinion is of fundamental importance for two reasons, according Richard.
First, interchange fees are one of the largest sources of credit union income that were considered by the IRS for purposes of UBIT—representing more than $1 billion annually, according to CUNA estimates.
Second, it can be argued that the TAMs' treatment of interchange fee income is a clear signal from the IRS that the agency understands the income is derived from legitimate credit union activities evolving with the financial marketplace.
That second point, Richard said, could be significant in more upcoming opinions from the IRS on UBIT.
The IRS TAMs that address credit card interchange fees were part of the agency's most recent round of advice memoranda, which otherwise simply reiterated earlier UBIT advice.
The IRS already in 2007 has said that several products sold by unidentified state-chartered credit unions would be subject to UBIT. Among them, the sale of:
Credit life and disability insurance;
Accidental death and dismemberment (AD&D) insurance;
MEMBERS financial management services;
Car warranties;
Guaranteed auto protection (GAP) insurance; and
Dental and cancer insurance.
Federal credit unions are not subject to UBIT. The TAMs are directed to individual credit unions and do not set a precedent for all credit unions, but they could indicate how the IRS may approach another state-chartered credit union's products and services, according to Richard.
Richard reiterated that CUNA and the UBIT Steering Committee continue to work with credit unions affected by the IRS opinions and will pursue litigation as necessary. He said there are at least nine more TAMs in the pipeline.
The CUNA general counsel advises that because products, services and pricing structures are unique to individual credit unions, they should work closely with their accounting firms and attorneys in making any decisions related to UBIT for 2006 and 2007.
courtesy of cuna.org
Wednesday, June 27, 2007
Financial Education In Schools
Few states make financial education in schools mandatory
NEW YORK (6/26/07)--Despite the growing need for more sophisticated financial skills to cope in a complex global marketplace, there's been little progress in getting personal finance education into the schools (MarketWatch.com June 13).
A recent study by the National Council on Economic Education (NCEE) reveals that financial education curriculum has made headway, but still needs improvement.
Key findings from NCEE's Survey of the States study include:
Only seven states require students to take a personal finance course before they graduate from high school;
Only nine states require testing student personal finance knowledge;
Only 17 states have an economics graduation requirement;
The number of states requiring student knowledge tests in economics dropped to 22 in 2007 from 25 in 2004; and
Entrepreneurship education is significantly less integrated into the curriculum than economics or personal finance.
If you're a parent, grandparent, or simply someone interested in making sure your local high schools have access to personal finance education, encourage teachers to contact the National Endowment for Financial Education (NEFE) at 303-224-3516 for a free copy of its High School Financial Planning Program.
The materials contain concepts put into real-life context without selling financial services or promoting specific institutions and will help increase youth financial literacy. They can be integrated into several existing subjects, such as economics, math, social studies, and consumer and life sciences.
The Credit Union National Association has partnered with NEFE and the Cooperative Extension to produce the materials, and also assists in recruiting and providing volunteers to present in classrooms.
courtesy of www.cuna.org/newsnow
NEW YORK (6/26/07)--Despite the growing need for more sophisticated financial skills to cope in a complex global marketplace, there's been little progress in getting personal finance education into the schools (MarketWatch.com June 13).
A recent study by the National Council on Economic Education (NCEE) reveals that financial education curriculum has made headway, but still needs improvement.
Key findings from NCEE's Survey of the States study include:
Only seven states require students to take a personal finance course before they graduate from high school;
Only nine states require testing student personal finance knowledge;
Only 17 states have an economics graduation requirement;
The number of states requiring student knowledge tests in economics dropped to 22 in 2007 from 25 in 2004; and
Entrepreneurship education is significantly less integrated into the curriculum than economics or personal finance.
If you're a parent, grandparent, or simply someone interested in making sure your local high schools have access to personal finance education, encourage teachers to contact the National Endowment for Financial Education (NEFE) at 303-224-3516 for a free copy of its High School Financial Planning Program.
The materials contain concepts put into real-life context without selling financial services or promoting specific institutions and will help increase youth financial literacy. They can be integrated into several existing subjects, such as economics, math, social studies, and consumer and life sciences.
The Credit Union National Association has partnered with NEFE and the Cooperative Extension to produce the materials, and also assists in recruiting and providing volunteers to present in classrooms.
courtesy of www.cuna.org/newsnow
Some information re: Credit Union Scams
More phishing expeditions aimed at CUNA, CUs
MADISON, Wis. (6/26/07)--More phishes surfaced this past week, including one that targeted the Credit Union National Association (CUNA) and News Now Friday.
That one, addressed to CUNA members, asked recipients to take part in an "easy 5-question survey about the services offered to you by your Credit Union Bank." The come-on offered to credit "50$ to your Credit Union account." The phish also refers to clicking the News Now< section for the survey. Instead, the section leads to a bogus website that tries to gather personal data for potential fraud.
The fake website has already been taken down, said Dorothy Steffens, vice president of CUNA's web services. CUNA and News Now would never attempt to obtain personal information through unsolicited e-mails.
Other recent phishing fraud sightings:
Missouri CU, Columbia, Mo. was alerted June 5 to a problem when several members reported an mail that told them the credit union had implemented a new security system and needed account information verified, reported the Missouri Credit Union Association (Courier Net June 13).
The New York State Credit Union League reported that a phish targeted the New Hartford-based GPO FCU, saying that its online department had temporarily disabled the e-mail recipient's account after three unsuccessful log-in attempts, until further investigation. It said all cards from the account were suspended, except for temporary cards. It urged members to reactivate their account at a link that goes to a bogus website (League Lines June 22).
A version of the lottery-check fraud scam was sent to a member of Lancaster Red Rose CU, Lancaster, Pa., said the Pennsylvania Credit Union Association (Life is a Highway June 19). The letter to the member instructed the recipient to wire funds via Western Union to tax agents "Chris Adams" or "Larry Jones."
The Federal Trade Commission (FTC) warned consumers about scammers claiming to be from the American Red Cross and who contact families of military service members. The caller notifies the individual that the family member has been injured on duty and says paperwork must be completed to speed up treatment. The caller attempts to "verify" personal information. According to the American Red Cross, its representatives typically do not contact military members or their members directly.
courtesy of www.cuna.org/newsnow
MADISON, Wis. (6/26/07)--More phishes surfaced this past week, including one that targeted the Credit Union National Association (CUNA) and News Now Friday.
That one, addressed to CUNA members, asked recipients to take part in an "easy 5-question survey about the services offered to you by your Credit Union Bank." The come-on offered to credit "50$ to your Credit Union account." The phish also refers to clicking the News Now< section for the survey. Instead, the section leads to a bogus website that tries to gather personal data for potential fraud.
The fake website has already been taken down, said Dorothy Steffens, vice president of CUNA's web services. CUNA and News Now would never attempt to obtain personal information through unsolicited e-mails.
Other recent phishing fraud sightings:
Missouri CU, Columbia, Mo. was alerted June 5 to a problem when several members reported an mail that told them the credit union had implemented a new security system and needed account information verified, reported the Missouri Credit Union Association (Courier Net June 13).
The New York State Credit Union League reported that a phish targeted the New Hartford-based GPO FCU, saying that its online department had temporarily disabled the e-mail recipient's account after three unsuccessful log-in attempts, until further investigation. It said all cards from the account were suspended, except for temporary cards. It urged members to reactivate their account at a link that goes to a bogus website (League Lines June 22).
A version of the lottery-check fraud scam was sent to a member of Lancaster Red Rose CU, Lancaster, Pa., said the Pennsylvania Credit Union Association (Life is a Highway June 19). The letter to the member instructed the recipient to wire funds via Western Union to tax agents "Chris Adams" or "Larry Jones."
The Federal Trade Commission (FTC) warned consumers about scammers claiming to be from the American Red Cross and who contact families of military service members. The caller notifies the individual that the family member has been injured on duty and says paperwork must be completed to speed up treatment. The caller attempts to "verify" personal information. According to the American Red Cross, its representatives typically do not contact military members or their members directly.
courtesy of www.cuna.org/newsnow
Govt News re: Credit Union Tax Exemption
Thrift bailout is 313 years of CU tax exemption
WASHINGTON (6/26/07)--It would take more than three centuries for the amount of the annual credit union tax exemption to reach the level taxpayers forked over to deal with the savings and loan crisis of the late 1980s and early 1990s, according to the Credit Union National Association's (CUNA's) analysis of a recent government report on the banking industry.
The Government Accountability Office (GAO) report, released to the public in May, updated estimates of the costs of the Federal Savings and Loan Insurance Corp. (FSLIC) bailout, in 2006 dollars. The $438 billion price tag represents $166 billion of total resolution costs borne by taxpayers, and $272 billion in total interest costs borne by taxpayers.
CUNA analysis showed it would take 313 years at the Treasury's 2007 estimate of $1.4 billion for the annual credit union tax exemption amount to equal the total of the savings and loan bailout.
"Three centuries is a long time to wait to get paid," said CUNA President/ CEO Dan Mica. "The GAO study shows just how absurd is the banker argument that the credit union tax exemption must be erased to help pay government bills.
"Further, as banks have posted five straight years of record profits, the GAO study clearly indicates: The existence of credit unions has no impact on the ability of banks to make money – lots and lots of it."
The GAO study found that, measured by return on assets, banks are generally more profitable than are thrifts, and both are more profitable than credit unions. In 2006, GAO reported, banks posted 1.27% ROA, thrifts 0.96% and credit unions 0.81 %. (News Now May 31)
CUNA's analysis, incorporating Federal Deposit Insurance Corp. data with the GAO results, revealed that even smaller banks have enjoyed greater profitable over the last several years, posting an average ROA of 1.2% in 2006. Other findings of CUNA's analysis of the GAO study revealed:
Banking institution federal tax breaks yield a 2007 total of between $1.3 billion and $1.9 billion, based on CUNA's combination of known or conservatively estimated bank tax advantages;
The 2006 tax revenue loss from the 2,356 Subchapter S banking institutions was $726 million. The GAO reported that banks are significant users of Subchapter S status, and presented an analysis showing that the net effect of electing Subchapter S status is to lower the total amount of tax for a Sub S bank and its owners by almost 22% compared to what a Subchapter C bank and its owners would pay; and
According to a number of private sources consulted by CUNA, in 2006 the average bank CEO total compensation was $353,000; the average credit union CEO compensation, at the same time, was $88,000. The disparity, CUNA found is evident even when comparing like-sized institutions. The GAO reported that although publicly available information on executive compensation in the banking industry is limited, compensation for bank executives, especially CEOs, has increased.
The study was requested in 2006 by Bernard Sanders, who at the time was an Independent member of the House representing Vermont. Sanders was elected to the Senate in November of that year.
Courtesy of www.cuna.org/newsnow
WASHINGTON (6/26/07)--It would take more than three centuries for the amount of the annual credit union tax exemption to reach the level taxpayers forked over to deal with the savings and loan crisis of the late 1980s and early 1990s, according to the Credit Union National Association's (CUNA's) analysis of a recent government report on the banking industry.
The Government Accountability Office (GAO) report, released to the public in May, updated estimates of the costs of the Federal Savings and Loan Insurance Corp. (FSLIC) bailout, in 2006 dollars. The $438 billion price tag represents $166 billion of total resolution costs borne by taxpayers, and $272 billion in total interest costs borne by taxpayers.
CUNA analysis showed it would take 313 years at the Treasury's 2007 estimate of $1.4 billion for the annual credit union tax exemption amount to equal the total of the savings and loan bailout.
"Three centuries is a long time to wait to get paid," said CUNA President/ CEO Dan Mica. "The GAO study shows just how absurd is the banker argument that the credit union tax exemption must be erased to help pay government bills.
"Further, as banks have posted five straight years of record profits, the GAO study clearly indicates: The existence of credit unions has no impact on the ability of banks to make money – lots and lots of it."
The GAO study found that, measured by return on assets, banks are generally more profitable than are thrifts, and both are more profitable than credit unions. In 2006, GAO reported, banks posted 1.27% ROA, thrifts 0.96% and credit unions 0.81 %. (News Now May 31)
CUNA's analysis, incorporating Federal Deposit Insurance Corp. data with the GAO results, revealed that even smaller banks have enjoyed greater profitable over the last several years, posting an average ROA of 1.2% in 2006. Other findings of CUNA's analysis of the GAO study revealed:
Banking institution federal tax breaks yield a 2007 total of between $1.3 billion and $1.9 billion, based on CUNA's combination of known or conservatively estimated bank tax advantages;
The 2006 tax revenue loss from the 2,356 Subchapter S banking institutions was $726 million. The GAO reported that banks are significant users of Subchapter S status, and presented an analysis showing that the net effect of electing Subchapter S status is to lower the total amount of tax for a Sub S bank and its owners by almost 22% compared to what a Subchapter C bank and its owners would pay; and
According to a number of private sources consulted by CUNA, in 2006 the average bank CEO total compensation was $353,000; the average credit union CEO compensation, at the same time, was $88,000. The disparity, CUNA found is evident even when comparing like-sized institutions. The GAO reported that although publicly available information on executive compensation in the banking industry is limited, compensation for bank executives, especially CEOs, has increased.
The study was requested in 2006 by Bernard Sanders, who at the time was an Independent member of the House representing Vermont. Sanders was elected to the Senate in November of that year.
Courtesy of www.cuna.org/newsnow
Tuesday, June 5, 2007
June 2007 Loan Special
"Warming Trends: Forecast is calling for GREAT RATES!"
Get a new Visa Credit Card @ 4.9% APR on all balance transfers and purchases until December 2007.*
All In-House Mortgage Products: No closing costs! CCU will pick up the tab to close a 1st, 2nd, or Home Equity LOC.*/**
*OAC, some restrictions apply. Tiered Pricing applies to all new loans. Interest rates apply to new purchases or refinancing of loans from other financial institutions only.
**All fees waived, except Appraisal Fee if needed for Mortgage Loan approval.
Get a new Visa Credit Card @ 4.9% APR on all balance transfers and purchases until December 2007.*
All In-House Mortgage Products: No closing costs! CCU will pick up the tab to close a 1st, 2nd, or Home Equity LOC.*/**
*OAC, some restrictions apply. Tiered Pricing applies to all new loans. Interest rates apply to new purchases or refinancing of loans from other financial institutions only.
**All fees waived, except Appraisal Fee if needed for Mortgage Loan approval.
Special CD Promotion
"Get a short-term lift at a long-term price"...Limited time offer is a 3~month Certificate of Deposit @ 4% APY. Come in to one of our 3 convenient branches to open this irresistable CD!
Real Time Authentication
To help protect you against credit/debit card fraud...
We have enhanced our fraud system to include a new verification procedure. When a transaction on your card falls outside of your normal spending pattern, an alert is created. We will then attempt to contact you. Part of the verification process will be to ask you to confirm the last 4 digits of your Social Security Number on file. If we are unable to contact you, a decision will be made on your behalf to block future transactions until you can be reached for confirmation.
Additional Fraud Proctection for your credit/debit card...
To help protect you from additional fraud, we have enhanced our existing security protection. We attempt to contact you today if a transaction falls outside of your normal spending pattern. If you cannot be reached you may be declined at the merchant if the activity is deemed suspicious.
This is part of our continuing effort to provide you with the best protection available when using your credit/debit card. We hope you enjoy the peace of mind that comes from knowing your card carries state of the art security features.
We have enhanced our fraud system to include a new verification procedure. When a transaction on your card falls outside of your normal spending pattern, an alert is created. We will then attempt to contact you. Part of the verification process will be to ask you to confirm the last 4 digits of your Social Security Number on file. If we are unable to contact you, a decision will be made on your behalf to block future transactions until you can be reached for confirmation.
Additional Fraud Proctection for your credit/debit card...
To help protect you from additional fraud, we have enhanced our existing security protection. We attempt to contact you today if a transaction falls outside of your normal spending pattern. If you cannot be reached you may be declined at the merchant if the activity is deemed suspicious.
This is part of our continuing effort to provide you with the best protection available when using your credit/debit card. We hope you enjoy the peace of mind that comes from knowing your card carries state of the art security features.
2 Factor Authorization
Effective July 1 2007, CCU will be adding 2 Factor Authentication to our website login procedures. The new procedures are designed to increase security and insure that only you can access your personal information on our site.
What this means for you:
1. All members will be required to set a "confidence" word
2. Add or verify your e-mail address
3. Set up security questions and answers of your choice
4. Please remember your answers to the security questions and how you typed them (lower-case, etc.)
The new procedure will also verify you are logging in from your own computer. Most members login from the same computer each time. However, if you use several PCs to access our website, you will be required to enter your email address and answer your security questions each time you login for the first time from a different computer. You may also be challenged for this information if you get a new PC, a new browser program, or delete the cookies on your current PC. IT IS IMPORTANT THAT YOU REMEMBER THE ANSWERS TO YOUR SECURITY QUESTIONS, AND HOW YOU TYPED THEM IN as our login security measures are sensitive to lower-case, all-caps, etc.
What this means for you:
1. All members will be required to set a "confidence" word
2. Add or verify your e-mail address
3. Set up security questions and answers of your choice
4. Please remember your answers to the security questions and how you typed them (lower-case, etc.)
The new procedure will also verify you are logging in from your own computer. Most members login from the same computer each time. However, if you use several PCs to access our website, you will be required to enter your email address and answer your security questions each time you login for the first time from a different computer. You may also be challenged for this information if you get a new PC, a new browser program, or delete the cookies on your current PC. IT IS IMPORTANT THAT YOU REMEMBER THE ANSWERS TO YOUR SECURITY QUESTIONS, AND HOW YOU TYPED THEM IN as our login security measures are sensitive to lower-case, all-caps, etc.
Subscribe to:
Posts (Atom)
.JPG){kind=small}