First-responder Credit Union Newsroom

Letter to Federal Credit Unions (20-FCU-03) Amended Field of Membership Application Requirements for Combined Statistical Area and Core-Based Statistical Area Dear Boards of Directors and Chief Executive Officers: On October 14, 2020, amendments to the NCUA’s chartering and field-of-membership rules ( 12 CFR Part 701 Appendix B ) will go into effect. These changes will allow a credit union applying for NCUA approval of a community charter, expansion, or conversion to designate a Combined Statistical Area (CSA) or an individual, contiguous portion of a CSA as a well-defined local community (WDLC) if the area has a population of 2.5 million or less. Beginning October 14, 2020, prospective and existing federal credit unions seeking a community charter may use a CSA or portions of a CSA (within certain limitations, as defined in the rule) as a basis for defining their proposed service area without documenting how a CSA’s residents interact or sha...

ARLINGTON, Va.—While new home sales continued to rise for the fourth straight month in August, up 4.8% from July's revised rate of 965,000 annualized units to 1,011,000 units, NAFCU's Curt Long said "inventory is a concern." "Normally, single-family permits for a given month exceed sales by 30% or more, but over the last two months permits and sales are neck and neck," said Long, NAFCU's chief economist and vice president of research. "This is despite the fact that single-family permits are up 16% from a year ago. The new home market is absorbing some of the imbalances in the existing market, where lower-priced options are scarce. "New homes priced above $500,000 made up just 8% of total sales in August, compared to 16% a year ago,” continued Long. “The normal caveats around economic uncertainty still apply, but the Fed will keep rates accommodative for the foreseeable future, and housing should remain a strong tailwind for ...

   

Despite the pandemic economic recession, most employers, including financial institutions, said they plan to provide raises and bonuses for employees in 2021. The 2020 General Industry Salary Budget Survey, conducted by Willis Towers Watson Data Services, found companies are projecting average salary increases of 2.8% for all employees next year, including exempt, non-management and management employees. Nonexempt salaried and hourly employees as well as executives are in line to receive slightly smaller increases (2.7%). Among financial institutions, executives are projected to receive salary increases of 2.8%; managers (non-executives), 3.1%; exempt non-management and nonexempt salaried employees, 2.9%; and nonexempt hourly employees, 3%, according to the survey. Among other major industry groups, the hard-hit health care and retail industries projected a slight bump but still fell shy of pre-pandemic levels with salary increases projected to average 2.6% and 2.8%, re...

WASHINGTON—CUNA is reporting its board has approved a resolution to adjust 2021 affiliation dues to provide relief for credit unions. The trade group said additional details will be released in the Fall. According to CUNA, the adjusted dues will help credit unions continue to prioritize the needs of their employees, members and communities amid the current health and economic emergency. “As communities across the country address the costs associations with the COVID-19 pandemic, it will be more crucial than ever for credit unions to have access to the tools and solutions that help them fulfil; their people-helping-people mission,” said CUNA President/CEO Jim Nussle. “This move will allow CUNA and the leagues to continue advocating for your priorities while providing credit unions additional flexibility to deliver for their members and communities. The credit union difference is undeniable, and our current operating environment makes it all the more imperative that we cont...

Some economists this month have been warning that recent improvements in the economy, including job gains and an exuberant housing market, are masking some underlying realities that will cause further drops late this year. For credit unions, CUNA predicted those trends will lead to lower earnings and higher loan charge-offs by the fourth quarter and into 2021. The pandemic recession is leading Americans along diverging paths: Those with high incomes have tended to experience fewer and shorter layoffs, while many low-income workers are seeing temporary furloughs morph into extended unemployment even as the extra $600-a-week federal unemployment assistance expired at the end of July, the analysts said. During the first three months of the COVID-19 pandemic, nearly 11 million households fell behind on their rent or mortgage payments and 30 million individuals missed at least one student loan payment, according research released Sept. 17 by the Mortgage Bankers Association of ...

As the COVID-19 pandemic continues, some credit union relief and government support programs are due to expire – and many Americans are still struggling financially. While these short-term programs have helped, the drastic disruptions in employment and member behaviors over the last several months are creating major, lasting changes for credit unions. As members look for financial solutions and alternatives while staying safe, two of the biggest shifts are increasing call volume and website traffic, prompting credit unions to evaluate and improve their digital capabilities to meet future collections and recovery needs. Credit unions are no strangers to helping members through difficult times. However, the impacts of the pandemic are widespread. The sheer volume of members faced with short- and long-term unemployment is daunting, and collection leaders must realistically re-forecast delinquencies and potential losses in a world with many unknowns. How many jobs will come b...

The mission of the Stephen Siller Tunnel to  Towers   Foundation is to honor the sacrifice of firefighter Stephen Siller, who laid down his life to save others on September 11, 2001. We also honor our military and first responders who continue to make the supreme sacrifice of life and limb for our country. In response to COVID-19 , Tunnels to Towers has established the COVID-19 Heroes Fund , pledging to support frontline health care workers by providing meals, personal protective equipment (PPE) and, should tragedy strike, financial relief through temporary mortgage payments on homes of health care workers who lose their lives and leave behind young children. Through the  Fallen First Responder Home Program , Tunnel to Towers aims to pay off the mortgages of fallen law enforcement officers and firefighters killed in the line of duty that leave behind young children.  The Foundation’s goal is to ensure stability and security to these families facing sudde...

  The NCUA’s equity ratio stood at 1.22% at the end of June — approaching the 1.20% level at which a formal restoration plan would be required, NCUA officials told the agency board Thursday. The ratio has dropped 13 basis points since the end of 2019, largely because of a huge increase in insured deposits because of the coronavirus crisis, Eugene Schied, the agency’s CFO, said during the board’s monthly meeting. The agency’s Normal Operating Level is 1.38%. Federal law allows the NCUA to assess a premium on credit unions if the equity ratio dips below 1.30%. The law requires the agency to adopt a plan to increase the equity ratio once it dips below 1.20%. The pandemic and stay-at-home orders, decreases in consumer spending and other government actions has led to an “unprecedented growth” in insured deposits, Vicki Nahrwold, supervisory risk management officer in the agency’s Office of Examination and Insurance, told the board. The Federal Credit Union Act defines the equity ratio a...

WASHINGTON—Credit unions can prepare for low rates to continue through 2023, according to new projections released by the Federal Reserve. The Federal Open Market Committee adjourned its meeting on Wednesday with a statement saying it not only expects no rate increases in the next several years it will provide additional support to the economy as is needed. In its statement, the Fed said it would maintain rates near zero “until labor market conditions have reached levels consistent with the committee’s assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time.” The policy meeting is the first for the Fed since it announced a significant policy shift in its approach to inflation and in how it will consider other economic metrics. Practically speaking, the shift indicates the Fed moving forward will be less inclined to increase interest rates when the unemployment rate falls, as long as inflatio...

Weekly News Summary -  September 14, 2020 Press Release For Immediate Release Weekly News Summary Hello Members of NCOFCU, Here are some things that were in the news last week. Please share these articles with your Supervisory Committee and Board of Directors. If you missed previous editions of the weekly news, summaries of those can be viewed at our  archive .  Have a great week! Mike Richards, CPA         Economic and Industry Issues Knowledge...