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June 30, 2011
Done Deal: First Carolina Corporate funds its PCC
Credit unions vote "yes" with commitments of $65 million and counting
GREENSBORO, N.C. (6/30/11) – Today, First Carolina Corporate Credit Union announced it has fully funded its perpetual contributed capital (PCC) program. So far, 142 member/owners have subscribed to the Corporate's capital offering, totaling nearly $65 million.
"While we have additional commitments that will soon be funded, the support received thus far speaks volumes about our members' belief in First Carolina's future and that of the credit union system as a whole," said Mark Brown, Senior Vice President/Chief Financial Officer. "With this significant investment, we are moving forward, focused on providing the products and services credit unions need to serve their own members."
First Carolina's Capital Restoration Plan was submitted to the NCUA in January, and called for both new capital and conversion of existing membership capital share deposits (MCSD). With its funding in place, First Carolina will meet NCUA's October 2011 deadline for capital and net- income requirements.
The Corporate says it is continuing to accept PCC commitments. "While funding technically is due today, some credit unions are still finalizing their paperwork and we understand that," Brown said.
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June 29, 2011
Fed raises cap on debit fees, allows further adjustment for fraud cost
Digest of Credit Union Journal and Credit Union Times
WASHINGTON (6/29/11) – The Federal Reserve this afternoon approved a 21-cent-per-transaction cap in its revised rule on debit interchange fees and has pushed the effective date to October 1. The original proposed rule to cap fees somewhere between seven and twelve cents per transaction would have been effective July 21.
In approving the new cap, the Fed’s Board of Governors also agreed to allow issuers to add 0.5% per transaction for fraud-related costs, which could bring the cap up to as much as 26 cents. Fraud costs have been a primary concern for financial institutions, especially credit unions and other smaller institutions for which data protection and card reissuance costs represent a significant expense. The Fed received 11,570 comments on the original proposed rule, and financial institutions were unsuccessful in urging Congress to delay implementation until next year.
According to reports, the Fed’s action was in light of additional costs to card issuers that were not included in the December proposal, including network processing fees.
Also in question has been enforcement of the exemption for issuers with less than $10 billion in assets. if the Fed is unable to protect that exemption and those issuers’ current debit interchange rate, credit unions and smaller institutions will fall back to an average of 23.9 cents on a $38 debit purchase—a revenue loss of approximately 40%.
The final rule does includes several measures aimed at enforcing the exemption:
- The Fed will publish annual lists of institutions that fall above and below the small issuer exemption to assist payment card networks in determining which of the issuers participating in their networks are subject to the rule’s cap.
- The Fed will survey payment card networks annually and publish a list of the average interchange transaction fees each network provides to its covered issuers and to its exempt issuers.
The transaction fee list should help all issuers more readily compare the revenue they would receive from each network, and will allow exempt issuers, Congress, and others to monitor the effectiveness of the statute and final rules in achieving the desired policy results.
The South Carolina Credit Union League will provide more details and insight as they become available.
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- June 8, 2011
SCCUL: The vote will be close, keep pushing for Senators' support
IRMO, S.C. and WASHINGTON, D.C. (06/08/11)--It's down to the wire as credit union advocates across the nation continue to reach out to U.S. Senators to vote in support of revised debit interchange fee cap implementation delay legislation. A vote is expected for approximately 2 p.m. today.
The revised legislation, which was introduced by Sens. Jon Tester (D-Mont.) and Bob Corker (R-Tenn.) yesterday, would shorten the implementation delay to a maximum of one year.
On Tuesday, in a letter to the Senate, CUNA President/CEO Bill Cheney said that the amendment presents "a fair approach" to the interchange fee cap issue and "ensures that small issuer and consumer impact is taken into consideration when the [Fed] regulates debit interchange fees."
Under the delay proposal, the Federal Reserve, the National Credit Union Administration, the Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency would be given six months to determine whether or not the Fed's current proposal accounts for all fixed and incremental costs to financial institutions, whether the proposed debit interchange cap would adversely impact consumers, and if a small issuer exemption would work as planned. The Fed would then be given six months to rework the interchange rules if the Fed and one of these other regulators determine that the rule needs revision. The current rules would be implemented as planned if no issues are detected by the study.
The Fed would be required to review its interchange regulations within two years of their implementation.
The amended legislation has bipartisan support, with Sen. Mike Crapo (R-Idaho), who voted in favor of the Durbin amendment, among its cosponsors. Sens. Kay Hagan (D-N.C.), Tom Carper (D-Del.), Roy Blunt (R-Mo.), John Kyl (R-Ariz.), Chris Coons (D-Del.) and Michael Bennet (D-Colo.) are among the cosponsors of the amendment, and Senate Banking Committee Chairman Tim Johnson (D-S.D.) also said he would support Tester's amendment in a Tuesday release.
The Tester-Corker legislation is being offered as an amendment to a bill to reauthorize the Economic Development Administration (EDA), and Sen. Majority Leader Harry Reid (D-Nev.) on Tuesday said a vote on the amendment would take place early this afternoon. The amendment will need 60 yes votes to be added to the EDA reauthorization bill.
The League asks that all credit union advocates keep pressure on Senators DeMint and Graham. DeMint expects to assess his peer's positions from the floor and vote late, while indications are that Graham will be a "no" vote based on lack of a written Fed rule to review. These final hours are crucial. You can call your Senator's office directly by dialing 202-224-6121 (DeMint) or 202-224-5972 (Graham). If you prefer to send an email to DeMint and Graham, you can create a customized message at www.capwiz.com/cuna/home/.
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March
WASHINGTON, D.C. and COLUMBIA, S.C. (3/4/11)—A week of credit union advocacy drew near its closing this Wednesday, March 2 as thousands of credit union representatives from across the country flooded the halls of Congress as part of the Credit Union National Association's (CUNA) 2011 Governmental Affairs Conference.
CUNA primed the credit union reps ahead of their Capitol Hill hikes, identifying credit unions' tax-exempt status, interchange fee regulations, member business lending (MBL), supplemental capital and the overall credit union difference as key concepts to be communicated to Congress.
Material provided to South Carolina’s participants offered CUNA’s Legislative Briefing Paper and Hill Meeting Outline to further detail the issues, plus national and state-level comparisons of credit union and bank statistics. Leave-behind cards detailing statewide and credit union specific membership by district helped the contingent assert their value to the delegation in number of voting citizens credit unions represent.
Those same citizens will feel the impact of interchange fee controls despite being sold by merchants as savings for consumers. “We want Congress to stop, study, and start over on interchange,” SCCUL President and CEO Steve Fowler said among more than thirty credit union representatives assembled in the Capitol Visitor Center meeting room hosting drop-in visits from South Carolina’s delegation.
Fowler and the participants further verbalized credit unions’ value to each member, offering true economic democracy and an alternative that keeps for-profit rates and fees in check. Those facts are not lost even on the four new South Carolina members of the U.S. House, three of whom—Tim Scott, Mick Mulvaney, and Trey Gowdy—showed up at nearly the same time and took turns addressing the group. All of them have shown a keen interest in hearing credit unions’ positions, setting the tone for a very productive day on the Hill.
“It has been refreshing to catch up with our delegation and some of their key staff, to hear that they do not sense contentious banker rhetoric, and to know they want to listen” Fowler commented following the day’s activities. “It’s an attitude we needed to hear and will rely on considering the work necessary to revise interchange legislation and to create potential economic value through greater member business lending.”
Fowler expressed the League’s gratitude for those who made the trip a successful one, remaining active in the political process and reinforcing credit unions’ attention to advocacy.
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January
COLUMBIA, SC (1/4/11)--A statewide job shadow initiative will begin February 2 as part of a nationwide effort to give youth a chance to explore firsthand the skills and education needed in today's work force, according to a press release from the S.C. Department of Employment and Workforce. This kind of program affords professionals in the credit union industry an opportunity to engage and inform young people about the movement while helping them discover potential careers.
Joining the initiative is the S.C. Department of Employment and Workforce, the S.C. Department of Education and Junior Achievement of South Carolina. National sponsors include America's Promise, AT&T, Cisco and the U.S. Departments of Education and Labor.
According to figures collected by the state Department of Education, 67,537 students in South Carolina from the sixth grade through college shadowed more than 28,000 business partners last year. Around 38,000 students were on-site shadows, and more than 29,000 students participated virtually.
"Any up-close-and-personal experience with those working in the professional world gives young people an excellent opportunity to make intelligent choices about their own future career," said John L. Finan, executive director of the state employment agency. "It is very important to encourage students to begin their career planning early and take every opportunity afforded them to learn from those who have been successful in their chosen profession."
While the month of February is the traditional time that students use for job shadowing experiences in South Carolina, many schools report that shadowing has now evolved into a year-round occurrence and, as the numbers show, is well received by the business community.
In December and early January, career specialists throughout the state arrange shadowing experiences for students with employers who are willing to spend a day with a student to share their knowledge about how to succeed in their particular business. If your credit union is interested in becoming a business partner in a local job shadowing program, please contact the career specialist at a school near you.
Read Full DEW Press Release
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