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Weekly Recap: Refunds, future of CFPB among hot topics at CUNA conference

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Weekly Recap: Refunds, future of CFPB among hot topics at CUNA conference

The weekly recap features news on regulatory actions, mergers and other issues facing the credit union space. Send tips, ideas and chatter to ken.mccarthy@spglobal.com.

In the spotlight

Many credit union leaders said they were unsure when — or even if — they would be repaid the funds they put into the corporate credit union stabilization fund, so they are delighted at recent news of coming rebates.

At its Feb. 15 board meeting, the National Credit Union Administration approved a $735.7 million dividend payment from the share insurance fund to be made in the third quarter of 2018.

Some in the industry — including the National Association of Federally-Insured Credit Unions — believe the NCUA should be rebating more money. But Kendall Garrison, executive vice president at Amplify CU, said the credit union is looking at the refunds as a pleasant surprise. Garrison said he had not expected that contributions paid to the stabilization fund during the height of the financial crisis would ever be refunded.

NCUA Chairman J. Mark McWatters said at the conference that closing the stabilization fund avoided the credit union community paying a share insurance fund premium of about $1.3 billion.

In an interview during the Credit Union National Association's Governmental Affairs Conference, Garrison said Amplify has taken the position that it wants the refund sooner rather than later.

"Even if you think it might be less, we still want it today," he said.

Garrison also said he is unsure exactly how much the 2018 refund for Austin, Texas-based Amplify might be. During the conference, some estimated that rebates could equate to about seven basis points of return on assets.

In other news

* The acting director of the Consumer Financial Protection Bureau said the agency will protect financial institutions as well as consumers during a speech at a credit union conference in Washington, D.C. Mick Mulvaney, who President Donald Trump appointed to lead the consumer protection agency in November 2017, reiterated to the audience at the CUNA GAC conference that the CFPB will focus on enforcement as opposed to rulemaking.

* It will be two years in April since the National Credit Union Administration had a full board, and that seems unlikely to change for at least a few more months. The board has been operating with only two of its three seats occupied since April 2016, when former Chairman Debbie Matz stepped down. But in actuality, two new members need to be appointed because board member Rick Metsger's term expired in August 2017. The game plan now is likely to have nominations for both seats in place by the second quarter and perhaps have the spots filled by June.

* An organization that has been attempting for years to start a new credit union to serve the lesbian, gay, bisexual and transgender community said it will partner with an existing institution and plans to open for business in June 2019. Equality Washington, the Seattle-based not-for-profit foundation behind the project, had originally planned to go after a state charter but that idea has been scrapped. Instead, Roswell, N.M.-based Florist FCU will in essence serve as a parent company for the new credit union.

* Chicago's biggest credit union is growing commercial loans by leaps and bounds, but that may be due more to it taking credits from other borrowers and strong lending in other regions rather than market growth in the Windy City. Chicago-based Alliant CU, the nation's eighth-largest credit union by assets, grew its commercial book by 41.1% on a year-over-year basis. But Alliant said only 25% of its commercial business now takes place in Chicago.

* The New Jersey Department of Banking and Insurance on Feb. 28 liquidated First Jersey CU, having decided that the latter had no prospect for independently restoring viable operations. USAlliance FCU of Rye, N.Y., has assumed most of the Wayne, N.J.-based entity's assets and loans, as well as all member shares.

* The NCUA approved 20 credit union mergers in January, according to the agency's latest Insurance Report of Activity. Seventeen of these mergers were attributed to "expanded services," while three mergers were due to "poor financial condition." The merging credit unions totaled approximately $497.6 million in assets.