Skip to main content

Troubled Firefighters’ Credit Union sparks concern about small finance institutions NZ Firefighters Credit Union

 


As the Reserve Bank expresses concern about the scale and profitability of small finance businesses, firefighters will vote today on the very survival of their credit union

The introduction of a law setting in place $100,000 deposit guarantees can't come soon enough for members of the NZ Firefighters Credit Union, whose much-loved institution is on the brink of failure.

Firefighters will vote today on whether to transfer their business to the bigger NZCU Auckland or, if they can't agree on that, whether to call in the liquidators.

It comes as the Reserve Bank warns in its Financial Stability Report of the low returns on assets in the country's diminishing number of credit unions. Adrian Orr tells Newsroom: "Over recent times, they have been quite significantly challenged on scale and profitability."

Ever since the $380 million Government bail-out of BNZ in 1990, successive ministers have treated the big banks as "too big to fail". The Reserve Bank has required them to increase their capitalisation, with new rules coming into effect this year.

By contrast, there are concerns that the small credit unions, and some other building societies and finance companies, are too small to survive.

Last month, regulators advised that the Firefighters Credit Union was in breach of the trust deed for failure to comply with requirements under the Friendly Societies and Credit Unions Act 1982.

They agreed to hold off sending in the receivers until after Friday's meeting, as long as the credit union's capital ratio remains above 5 percent. It has ceased new lending, it's not accepting new members, and it is required to keep operating expenses to a minimum, and undergo daily supervision.

Chair Mark Virtue has issued a message to members on the credit union website. "As a small financial entity, we are finding it difficult to compete due to higher costs associated with the delivery of financial services and, in recent years, increased costs of compliance," he says.

"We are not alone - the number of credit unions in New Zealand has reduced from 70 (20 years ago) to 30 (10 years ago) to just eight today."

Read the complete story on NZ Credit Unions HERE

Comments

Popular posts from this blog

Update: First Responder Credit Unions Academy (FRCUA) Udates

In an ongoing effort to keep your FRCUA education current, modules are continually updated to reflect current NCUA and other regulatory agency requirements. As an example, BSA 26 now includes  Artificial Intelligence and BSA,  Elder Financial Exploitation,  Pig Butchering & BSA, and Executive Order –  Free and Fair Banking.

Mortgage Rates Tick Down

MCLEAN, Va.--Mortgage rates moved slightly lower this week, with the 30-year fixed-rate mortgage averaging 6.56%, Freddie Mac reported. “Mortgage rates are at a 10-month low,” said Sam Khater, Freddie Mac’s chief economist. “Purchase demand continues to rise on the back of lower rates and solid economic growth. Though many potential homebuyers still face affordability challenges, consistently lower rates may provide them with the impetus to enter the market.” The 30-year FRM averaged 6.56% as of Aug. 28, down from last week when it averaged 6.58%. A year ago at this time, the 30-year FRM averaged 6.35%. The 15-year FRM averaged 5.69%, unchanged from last week. A year ago at this time, the 15-year FRM averaged 5.51%, Freddie Mac said. ____________________________________________ Check out NCOFCU's additional features: First Responder Credit Union Academy Podcasts YouTube Mini's Blog Job Board

SIGN UP FOR YOUR CUSTOM HEALTH INSURANCE SOLUTION TODAY

 https://bizu65.allstatehealth.com/?password=demo ____________________________________________ Check out NCOFCU's additional features: First Responder Credit Union Academy Podcasts YouTube Mini's Blog Job Board

Many CUs Likely to Face New Operating Challenges "Michael Moebs"

04/08/2024 09:04 pm By Ray Birch LAKE FOREST, Ill.—The trend lines don’t lie: Financial institutions charging high overdraft fees will likely face operating challenges in the near future and may even be forced to merge if they don’t follow the market trend of lowering their OD charge. Michael Moebs, economist and chairman of Moebs $ervices, is offering that forecast following his company’s new overdraft study, which has found overall net OD revenue for 2023 was down 5.7%, with banks dipping by 8.1% to $31.4 billion, thrifts falling by 28.6%. and credit unions actually increasing net revenue 2.2%. The study further reveals the m...

Wendelville Fire Chief Andrew Pilecki re-elected to FASNY board

Andrew Pilecki, the current fire chief of Wendelville Volunteer Fire Company, has been re-elected to the board of directors of the Firefighters Association of the State of New York. Pilecki has been a member of the fire service for more than four decades, including the past 22 years as a responder with the Wendelville company. Previously he was an active member of Columbia Hook and Ladder Co. He’s also a former assistant director of emergency management for the City of North Tonawanda. FASNY directors serve five-year terms of office. During his first term, Pilecki was instrumental in supporting the association’s pandemic response, championed fire company recruitment and retention efforts, and worked to amplify the needs of Western New York’s volunteer fire service at the state level, according to FASNY. “I’m honored to be re-elected and to continue advocating for the men and women who volunteer their time, risk their safety and serve their communities across the state,” Pilecki said. “...