e-Weekly
March 18, 2009
Survey Shows Majority of Credit Unions OK with TARP as NCUSIF Backup
A nationwide survey of credit unions indicates support among them for using Treasury funds as a back up for the National Credit Union Share Insurance Fund (NCUSIF), according to results reported by the Credit Union National Association (CUNA).
Results of the survey conducted February 12-16 showed more than 55 percent of those responding supported CUNA’s approach of employing a Treasury back up for the NCUSIF as it is tapped to pay for the National Credit Union Administration’s (NCUA) Corporate Stabilization Program (CSP).
The responders agreed with the statement that “CUNA should advocate for a set-aside of TARP (Troubled Asset Relief Program) funds to backstop the NCUA’s guarantee of deposits by natural person credit unions in corporate credit unions, only to be accessed if at least $500 million of loss from corporates is first absorbed by the NCUSIF.” Thirty-six percent disagreed with the statement, and 9 percent were neutral.
The results for the “NCUSIF back-up” question reflected overall views expressed by respondents favoring a Treasury back-stop as one tool to assist in mitigating costs for resolving corporate credit union issues. However, at the same time respondents largely viewed using Treasury help for natural person credit unions unfavorably.
Additionally, the survey results show respondents have strong views about the use of Treasury funds. In almost every case of the six questions, “agree strongly” and “disagree strongly” are the most common responses.
Further, credit unions appear unwilling to completely rule out use of Treasury help in all cases. Overall, a majority (56 percent) indicated “disagreement” when asked to rate the notion that “CUNA should not advocate for TARP funds under any circumstances and in any conditions.”
On the other hand, just 34 percent indicated “agreement” with that statement.
The survey was sent to more than 5,000 credit unions nationwide. About 1,600 credit unions responded to the survey, a 32 percent response rate. Requests for participation were included in two editions of CUNA’s daily news online report, NewsNow.
The CUNA Board of Directors, upon review of the survey results, voted at their recent meeting (in conjunction with the CUNA Governmental Affairs Conference) to keep all options open in finding alternatives for mitigating costs of credit unions of the NCUA CSP. That includes seeking a Treasury back up for the NCUSIF.
It is possible that no Treasury funds would ever be tapped, in that other alternatives identified by CUNA would further mitigate costs for credit unions. Among those alternatives:
-
Use the CLF as a source of funding, for loans or capital support
-
Improve the accounting treatment of assets that are other than temporarily impaired (OTTI)
-
Pursue accounting issues that could allow the NCUSIF to recognize its insurance costs over time
-
Obtain long-term deposits from credit unions into corporates
-
Expand NCUA's Credit Union System Investment Program (CU SIP) to make it more attractive to credit unions
Fair Labor Standards Act
This is the second article in a series of e-Weekly articles on the Fair Labor Standards Act (FLSA), and it will focus on hours worked for purposes of overtime. Because FLSA was recently expanded in Massachusetts to require mandatory triple damages for any violations of FLSA – and because a down economy can trigger disputes from disgruntled employees or former employees – credit unions need to review their procedures to ensure compliance.
When a wage and hour investigation is initiated, the Department of Labor (DOL) will come into the institution and inspect up to 3 years of time sheets/cards and will expect complete, accurate, and unambiguous pay records for every non-exempt employee for each pay period. For non-exempt employees, this timesheet needs to include time in and out for lunch; and it needs to include any additional time worked to open, balance at end of day, etc. In other words, all time worked by non-exempt employees must be paid.
The DOL has the right to question employees and investigate practices or conditions to test that the records reflect actuality. It is important that these time records be signed and dated by the employee on a regular pay period basis. This recordkeeping may not be delegated to a manager to record and monitor.
The FLSA requires overtime to be paid at 1 and a half times “regular rate of pay” for hours over 40 in a week. The FLSA does not require overtime to be paid for hours over 8 in a day. An employer may choose to have a policy that provides overtime on a daily basis, but that is not a requirement of the FLSA. Although overtime must be computed weekly, the FLSA does not require that it be paid on a weekly basis; it only requires that overtime be paid in the next regular pay period following the period in which the overtime is earned.
Only “hours worked” count in the overtime calculation. But what constitutes “hours worked”? The FLSA does not regulate vacation pay, holiday pay, sick pay, bereavement pay, etc., so the employer needs to determine which, if any, of these absences would be considered “time worked” for purposes of calculating overtime. The FLSA applies in all states but it permits each state to regulate areas not covered and to afford workers greater protections. Including any or all of these absences (vacation, sick, holiday…) to be considered as “time worked” would be a “greater protection” to employees. Therefore, a credit union needs an overtime policy that outlines what hours it will count as “hours worked” in the overtime calculation. If you have any specific questions, contact Beverly Purtell, vice president of human resource management at bpurtell@cucenter.org.
Rhode Island Credit Unions Spare Some Time for Special Olympics Bowling Tournament
The Credit Union Association of Rhode Island’s 2nd annual “Strike For Gold” fundraising event for Special Olympics Rhode Island, held at the East Providence Lanes, was a striking success. Twenty-four teams of bowlers representing eleven credit unions, the Association, and CUDL AutoSMART came together on Wednesday, March 11 for a “Bowl-a-thon” that raised more than $8,100 for Special Olympics Rhode Island.
“I’m thrilled at the way that our credit unions turn out to support Special Olympics. This bowling tournament was another in a long series of successful fundraisers and from what I could tell everyone had a great time,” said Cid Rocha, chairman of the Credit Union Association of Rhode Island and CEO of Columbus Credit Union in Warren.
The tournament trophy was captured by one of three teams from Navigant Credit Union, headquartered in Smithfield. The team members included Randy Sacilotto, Jason Pise, Mike Tartaglia, and Pete Quigley. Team captain Randy Sacilotto was pleased with the victory but more pleased with the turn out and the enthusiasm for the Special Olympics stating, “We have the privilege to participate in a number of events with the Special Olympics from the Summer Games to the Winter Carnival and it is just so habit forming. The more you do with this organization, the more you want to do.”
Another equally important win was in the intense competition to see which team would raise the largest amount of money for the event. That was won by one of three teams from Coventry Credit Union including Rick Walker, Adam Quinlan, Jennifer Walsh, and Terri Snyder. Combined this team raised $715.
| 
