Trusted News for Credit Union Leaders
Credit Union Times
MAY 22, 2013 | VOL. 24 | NO. 20 | CUTIMES.COM
Must Reads
COMMUNITY
Y15
NCUA
Derivatives Rule

NCUA Board Members Debbie
Matz and Michael Fryzel said
they are eagerly anticipating
comments on a rule that would
grant new investment authori-
ties but could set a pay-to-play
precedent that concerns trade
associations.
The proposed rule, introduced
during the board’s monthly board
meeting May 16, would grant
qualifying credit unions the ability
to use derivative swaps and caps
to hedge against interest rate risk.
However, because of the cost
to the NCUA–as high as $16 mil-
lion in temporary staffing costs
over the first three years and up
to $4 million in the years that fol-
low–the final rule could
With Hard Cash, CUs Back
Small Business Cash Mobs
MICHELLE A. SAMAAD
msamaad@cutimes.com
Whensupermar- ketgiantWhole FoodsMarket openedastore
in a Sacramento neighborhood, a
local food co-op immediately no-
ticed a dip in customers.
While students at nearby Uni-
versity of California-Davis flocked
to the natural and organic food
grocery store, businesses like the
Davis Food CO-OP experienced
a slight drop in sales after the
defection, said Chris Blackman,
marketing manager at the $205
million Yolo Federal Credit Union
in Woodland, Calif.
“They’re located in a kind of

CASH MOB November 16, 2012 4pm-7pm Groceries for Thanksgiving, Gear for Winter Weather & Culinary Inspiration RSVP at facebook.com/davisdowntown Proudly sponsored by: G Street Shopping Center Davis Food COOP, Ken’s Bike & Ski, Monticello Seasonal Cuisine SHOP LOCAL SHOP DAVIS

CORPORATES

WesCorp
Losses
Pile Up
HEATHER ANDERSON

Y17
PAYMENTS
CU24 Takes Longer View

Credit Union 24 has shortened its
name to CU24 but broadened its
vision of what it can offer an al-
ready crowded payments market.
The credit union owned ATM
and POS network with more
than 500 participating credit
unions in 30 states and the Dis-
trict of Columbia changed the
brand on April 24 with no formal
press announcement.
CEO Mansel Guerry explained
that the phrase “CU24” was al-
ready the most common usage
and that changing to the pithier
name will help the CUSO launch
its transition from being a CUSO
offering primarily ATM and POS
access into being an organization
that still offers those things

Y14

a unique and weird corner and
sometimes, people may forget
that it’s there,” Blackman said.
It was part of the reason that
Yolo FCU linked up with the Da-
vis Chamber of Commerce
Yolo Federal Credit Union in Woodland, Calif., partnered with others to pump
up sales at small businesses last fall.

NUCA
Obama Nominates Metsger for Board
HEATHER ANDERSON
handerson@cutimes.com

ick Metsger, a former
Oregon state senator
who has sponsored
credit union legisla-
tion and once served on a credit
union board, was nominated by
President Barack Obama May
15 to serve on the NCUA Board.
If confirmed by the Senate, the
Democrat Metsger would likely
replace former Board Member
Gigi Hyland, who left the NCUA
Oct. 5, 2012, after serving more
than a year past her term’s ex-
piration. The choice of a Dem-
ocrat by Obama to replace Hy-
land is an odd one because the
term would presumably be just
four years. According to the
NCUA’s Website, each mem-
ber serves a staggered six-year
term, a restriction that dictates
the shorter term to replace
Hyland.
If Obama intends for Metsger to

Y16

replace current board member Michael Fryzel, whose term expires Aug. 2, the president will eventually have to also appoint a Republican to join Metsger and current NCUA Board Chairman Debbie Matz, also a Democrat. No more than two board members can be from the same political party, according to the NCUA. However, nothing in the Federal Credit Union Act appears to prevent only two Democrats from serving

Y18

ccording to legacy as-
set loss estimates pro-
vided to Credit Union

Times by the NCUA, investments made by Western Corporate FCU are generating far more losses than those that were made at other failed corporates.

As of year-end 2012, WesCorp’s estimated losses were $5.73 billion, representing 84.4% of the nearly $6.8 billion in total estimated legacy asset losses. However, according to a chart provided by the NCUA, the corporate formerly located in San Dimas, Calif. contributed just 39% of total legacy assets.

That’s in stark contrast to the four other corporates that had their investments seized by the NCUA and used as underlying assets for more than $17 billion worth of NCUA guaranteed notes issued in 2011.

U.S. Central FCU’s assets show the most dramatic loss discrepancy. The former Kansas City-based corporate’s $625 million worth of estimated losses as of year-end 2012 make up just 9.2% of total estimates losses. However, U.S. Central assets represent 43% of all legacy assets.

Both Members United FCU and Southwest Corporate FCU legacy assets also contribute fewer losses compared to the size of their portfolios. As of 2012 year-end, Members United legacy assets were

Auto
Demand
Pent up demand
is contributing to
higher vehicle sales
as consumers look to
replace their aging
vehicles. But some
say lending is driving
sales.Y3