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Weekly Recap -- NCUA says Brexit could slow growth in the US

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Weekly Recap -- NCUA says Brexit could slow growth in the US

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

News

*Tampa, Fla.-based Suncoast CreditUnion named Kevin Johnson president and CEO. Johnson, who has been with the creditunion since 1985 and most recently served as executive vice president and chiefinformation officer, takes over from Tom Dorety. The appointment is effectiveOct. 1.

*The Treasury Department continues to look for ways to wind down its Community DevelopmentCapital Initiative, created in 2010 under the Troubled Asset Relief Program.According to an update provided by the Government Accountability Office, thedepartment has decided against altering repayment and interest rate terms —despite trade associations' suggestions to do so — unless the participatingbank or credit union is in distress. Of the 84 institutions that signed up forthe CDCI and the $570 million that the government invested, 57 entities arestill in the program and $136 million in principal has been repaid.

*Vancouver, Wash.-based ColumbiaCredit Union is expanding its service area to include the counties ofClackamas, Marion, Multnomah and Washington in the Portland, Ore., metro area.The expansion allows individuals and businesses in Washington State or theOregon four-county community to become members.

*Joseph Melbourne Jr., who has been president and CEO of for the last 19 years, is retiring, effective March 31, 2017. Kevin Miller willsucceed Melbourne as president and CEO of the Lake Mary, Fla.-based creditunion upon the latter's retirement in 2017. Miller currently serves asexecutive vice president, chief administrative officer and general counsel ofCFE FCU.

*Sylacauga, Ala.-based HeritageSouth Credit Union named Jamie Payton , succeeding DaphneHarrell, who retired June 17. Payton has served as the credit union's COO forthe past 18 years.

*Scott Henderson retired as senior vice president and CFO of Bremerton,Wash.-based Kitsap CreditUnion. His last day with the credit union was July 8. Brad Millerwill join the credit union on July 18 as senior vice president and CFO. Millerhas 30 years of experience in banking and credit unions, according to a noticeposted on Kitsap Credit Union's website.

Regulation/legislation

*Updates made recently to the Michigan Credit Union Act include some changesthat could make it easier for the state's credit unions to do business. Theupdates were the first made to the Act since 2003, according to a reporton Mibiz.com. Under the changes, Michigan credit unions can now offer loanpromotions and prize incentives for loan refinances and reduce the number ofannual board meetings to six. Credit unions in the state can now also offertrust services through a credit union service organization. State-charteredcredit unions previously had to contract with an out-of-state CUSO to offertrust services, which few of them did, according to the report.

* Inits most recent economic update, the National Credit Union Administration saidthe Brexit vote hasdimmed the outlook for growth in other countries over the next few years andraised financial market uncertainty. That could eventually translate intosomewhat slower U.S. growth, with much of the effect showing up inmanufacturing and commodities production, said NCUA chief economist RalphMonaco. "Brexit reminds us that economic circumstances can changequickly," Monaco said. "Credit unions need to be aware and ready toadapt to potential changes that can affect the financial health of theirmembership."

*Curt Long, chief economist for the National Association of Federal CreditUnions, said the Labor Department's June employment report is a "sigh of relief."

"Despitea downward revision to the already weak May figure, the rebound in June meansthat the average monthly gain in 2016 exceeds 170,000, which is more thanenough to absorb new entrants. The participation rate also saw a mild bounceback after dropping in the previous two months. Meanwhile, wage growth remainedsubdued, but it continues to outpace inflation and is consistent with atightening labor market," Long said. He added that while numerous economic"landmines" remain, policy makers can be reassured that the labormarket remains a bright spot. Still the Federal Reserve is unlikely to raiserates until the fourth quarter at the earliest, Long said.