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Weekly Recap — A court victory and a new chairman for the NCUA

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Weekly Recap — A court victory and a new chairman for the NCUA

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.

News

* In the past 2.5 years, U.S. banks have made sweeping cuts to their branch networks while credit unions have taken a different tack. On June 30, 2014, banks had 95,146 branches, but that number had fallen to 90,992 halfway through January 2017. At the same time, credit unions had grown their branch count to 21,205, compared to 21,070 on June 30, 2014.

* A former employee of Tysons, Va.-based Pentagon Federal Credit Union is suing the institution for $5 million on abuse claims, Credit Union Times reported Jan. 20. Celia Coleman, who worked for the credit union for 31 years until she was fired in September 2016, alleged that she suffered mental and physical abuse, as well as sexual harassment and age discrimination in her last seven years working for Pentagon FCU, according to the news outlet.

* Randolph-Brooks Federal Credit Union was charged with violating federal law in connection with its method for charging overdraft fees, the San Antonio Business Journal reported Jan. 24. The class-action lawsuit alleged that because the Live Oak, Texas-based credit union failed to describe its actual overdraft service in its opt-in agreement, the Electronic Fund Transfer Act prohibited it from assessing overdraft fees for automated teller machine and nonrecurring debit card transactions, but it did so anyway.

* Notre Dame Federal Credit Union created Opportunity Loan, which provides financing for the application and legal expenses associated with seeking U.S. citizenship, permanent residency or deferred action for childhood arrivals extensions. A news release said that borrowers can apply for the loan for up to $3,500 for periods of 12, 18 or 24 months, with loan proceeds to be disbursed directly to service providers.

* Wilmington, Del.-based Wilmington Postal Federal Credit Union will change its name to Priority Plus Federal Credit Union, effective March 1, CUtoday.info reported Jan. 22. The change will not affect other aspects of the institution, according to its website.

Regulation/legislation

* The U.S. District Court of the Eastern District of Virginia has dismissed the suit filed by the Independent Community Bankers of America against the National Credit Union Administration over its new rule on business lending. The ICBA in September 2016 filed suit against the NCUA over changes to its member business lending rule including the removal of loan-to-value limits on commercial loans. Some industry observers believe it might be time for the banks to rethink their strategy.

* President Donald Trump has named J. Mark McWatters as the new chairman of the NCUA board. McWatters, a Republican, replaces Democrat Rick Metsger, who was named chairman in May 2016, after being elected as vice chairman in September 2014. In a statement, McWatters said he is committed to bringing regulatory relief to the extent permitted by law and to protecting the deposits of the more than 106 million Americans who rely on federally insured credit unions.

* Five federally insured, low-income credit unions earned certification as community development financial institutions, the NCUA announced. The five credit unions are Central Sunbelt Federal Credit Union, Chicago Municipal Employees Credit Union, ELGA Credit Union, New Covenant Dominion FCU and Softite Community Federal Credit Union.

M&A

* The NCUA approved 18 credit union mergers in December 2016, according to the agency's latest Insurance Report of Activity. The NCUA listed "expanded services" as the reason behind 14 of the mergers. Two mergers were attributed to "poor financial condition," one was because of "loss/declining field of membership" and one merger was due to "inability to obtain officials."

* Scranton, Pa.-based Valor Federal Credit Union is set to merge into Pentagon Federal Credit Union, The (Scranton) Times-Tribune reported Jan. 26. The proposed merger was approved by the NCUA in the week of Jan. 16. It still awaits approval from Valor FCU members. In a separate deal, Miramar Federal Credit Union members approved the merger of the San Diego-based institution into Pentagon FCU.

* Horizon Community Credit Union merged into Fox Communities Credit Union, according to an announcement on Fox Communities' website. SNL data shows that as of Sept. 30, 2016, Green Bay, Wis.-based Horizon Community CU had $43.0 million in assets, while Appleton, Wis.-based Fox Communities CU had $1.23 billion in assets.

* In Ohio, Coldwater-based First Choice Credit Union Inc. agreed to merge into Lima-based Superior Credit Union Inc., LimaOhio.com reported Jan. 25. First Choice CU has $16 million in assets, 2,000 members, and one branch, with plans to open another branch, according to the website.