Jan 12, 2024 — North Dakota credit unions will receive more than $11.9 million in recovered assets that had previously been denied by the National Credit Union Administration (NCUA), according to the Dakota Credit Union Association.
The federal agency agreed to settle the dispute after a federal judge denied its request to dismiss the lawsuit filed by the credit unions in April 2023 in U.S. District Court in Kansas. NCUA plans to return the assets by Jan. 18.
Over the past two years, the Dakota Credit Union Association has led the effort and assisted its North Dakota members in repeated attempts to recover the funds that were withheld following the financial collapse that began in 2008. NCUA had placed U.S. Central Federal Credit Union, which provided services to corporate credit unions, into conservatorship, eventually closing and placing it into liquidation in October 2010.
The civil lawsuit was filed by 25 North Dakota credit unions following repeated appeals to NCUA to return the recovered assets. The lawsuit maintained that when Bismarck-based Midwest Corporate Federal Credit Union was dissolved in 2011, its remaining assets became the property of the credit unions and that NCUA wrongfully denied payment of their share of those assets after appointing itself as liquidating agent. The judge agreed.
April 21, 2023 – Twenty-five North Dakota credit unions sued the NCUA for allegedly failing to pay them millions in recovered assets of Midwest Corporate Federal Credit Union, which was dissolved in 2011 following the financial crisis.
The civil lawsuit, filed in U.S. District Court in Kansas City, Kan., on April 10, claimed that when Midwest Corporate was dissolved, its remaining assets became the property of the credit unions, and that the NCUA wrongfully denied payment of their share of those assets.
A spokesperson for the NCUA said the federal agency does not comment on pending litigation.
Over the last two years, however, the Dakotas Credit Union Association has repeatedly attempted to resolve this dispute with the NCUA. In letters to the DCUA, filed as exhibits with the lawsuit, the federal agency refused to pay the credit unions because of a technicality. The NCUA said because Midwest Corporate no longer existed, Midwest Corporate and its credit union members were not eligible to receive a distribution of the funds…
Mar. 17, 2022 — Amid growing concerns over the collapse of two banks in the U.S., with one in Europe teetering on the brink of collapse, North Dakota’s state-chartered banks and credit unions are in stable, well-capitalized, sound financial condition.
That’s according to the North Dakota Department of Financial Institutions Commissioner Lise Kruse.
In a statement issued Friday morning, Kruse said, “Community financial institutions have a relationship-based business model. With local leadership and a commitment to their customers and communities they serve, these institutions are well-equipped to continue providing financial services to North Dakota citizens. This is in direct contrast to the business model of the recently collapsed banks.”
Kruse noted North Dakota depositors are protected by the full faith and credit of the United States through the Federal Deposit Insurance Corporation. Founded in 1933, the FDIC has provided stability to North Dakota’s banking system and assurance to citizens.
Likewise, credit union deposits are insured by the National Credit Union Administration.
No insured depositor has lost money in the history of the FDIC or the NCUA, Kruse noted. Read more
North Dakota’s CUs Say They’re Owed $10M as Part of Corporate Resolution; Senators Send Letter to NCUA
Courtesy of CUToday.info
Aug. 29, 2022 — North Dakota’s credit unions say NCUA is withholding more than $10 million owed them as part of the resolution of the failed corporate credit unions, and the state’s two senators are also pressing the agency to return the funds.
Moreover, Olson is raising questions over other statements made by NCUA and actions it took related to North Dakota’s state regulatory agency.
At the heart of the issue is the former Midwest Corporate Credit Union, which began its life as North Dakota Central CU in 1942.
In their letter to NCUA, North Dakota Sens. Kevin Cramer and John Hoeven stated that prior to the financial collapse in 2008–2009, the largest corporate credit union in the United States U.S. Central Federal Credit Union (U.S. Central), which provided services to other corporate credit unions, including Midwest Corporate, acting as a “corporate credit union’s credit union.” In early 2009, in response to investment losses incurred at U.S. Central, NCUA implemented the Corporate Stabilization Program and placed U.S. Central into conservatorship, the letter states.
“The investment losses at U.S. Central exceeded their Member Contributed Capital, which led to the extinguishment of nearly all the contributed capital. Under the corporate restructuring plan, corporate credit unions were required to either recapitalize, merge, or liquidate. At the time, credit unions in North Dakota chose not to re-capitalize Midwest Corporate or merge with another corporate credit union,” according to the letter.
On April 29, 2011, Midwest Corporate officially closed its doors.
According to the Dakotas Credit Union Association and the senators’ letter to NCUA, prior to the dissolution of Midwest Corporate, in October 2010, NCUA issued Midwest Corporate a claim receipt for Member Contributed Capital represented by Paid-In Capital (PIC) totaling $3.3 million and Membership Capital Accounts (MCA) totaling $10,448,323.99.
The association and the senators said the claim receipt states that it enables Midwest Corporate owners “to share pro rata in the net proceeds, if any, to the extent of the PIC and MCA Balances as of the record date” and “no further action is required on their part to file or activate a liquidation claim.”
Checks Not in the Mail
But North Dakota’s 30 credit unions haven’t received the funds they are owed, according to the DCUA and the senators’ letter.
“Recently, in its role as liquidating agent of the former corporate credit unions’ asset management estates, the NCUA has made three rounds of distributions to membership capital shareholders of the former Members of United, Constitution, and U.S. Central corporate credit unions,” the letter reads. “Last year, in 2021, the NCUA board authorized the 100% reimbursement of ‘MCA’ and 3% of ‘PIC.’ This past February, the NCUA announced a $359.2 million distribution to more than 1,000 membership capital shareholders of the above former credit unions. This fourth distribution by the NCUA will have distributed $1.8 billion to former membership capital shareholders and $209.8 million in dividends to shareholders.”
The letter continues, “While U.S. Central Federal Credit Union members have received payouts under the Corporate System Resolution Program, Midwest Corporate, which was part of the U.S. Central credit union network, was notified that it was ineligible to receive reimbursement since the corporate entity was dissolved in 2011 and the legal existence of the charter was officially canceled three years later.”
Agency is Aware of Issue
The letter acknowledges that NCUA is aware of the issue and has responded by saying the former capital holders of Midwest Corporate may be eligible to make an independent claim to the assets of U.S. Central. The senators called on NCUA to “work through the claims process to ensure all proper claims are satisfied to the greatest extent possible, and that these recovered assets are returned to their rightful owners of these recovered assets.”
In comments published on the Dakotas Credit Union Association website, DakCU CEO Jeff Olson said the “big question” is whether NCUA is keeping the $10.5 million owed to the credit unions or whether it has been distributed to other surviving corporates in other parts of the country?
North Dakota Senator and Governor Issue Comments to NCUA on Ag Lending
Courtesy of CUToday.info
March 21, 2022 — Two elected officials in North Dakota have issued statements of support after NCUA revised its strategic plan to clarify that the agency will not take regulatory action based on “climate-related financial risks,” which critics have suggested would discourage credit unions from lending to farmers, ranchers, agri-businesses and rural communities
The Dakota Credit Union Association has also submitted a comment letter to the agency in which it was critical of the potential fallout of new climate change-related regulations on Ag lending credit unions. “Farmers and ranchers not only serve as the foundation of North Dakota’s economy, they help ensure that every American continues to have access to the highest quality, lowest cost food supply in the world,” said Sen. John Hoeven (R-ND). “As such, our nation’s agriculture producers deserve our support, and we appreciate NCUA responding to our concerns and clarifying that credit unions will not be discouraged from lending to those in the agricultural sector.”
Prior to the announcement from NCUA, Hoeven had sent a bicameral letter to the agency’s chairman, Todd Harper, pressing the agency to continue supporting agriculture producers’ access to credit.
Separately, in a letter Gov. Doug Burgum thanked the NCUA board for revising its strategic plan to clarify its stance. Burgum said that while he would have preferred to see the climate risk language removed, “We appreciate the NCUA board clarifying its position so that credit unions know they can continue to provide financial services to our farmers, ranchers and energy industry without fear that such activity will put them in the crosshairs of federal regulators. North Dakota continues to be a leader in carbon capture, utilization and storage efforts, recognizing that carbon neutrality can be achieved only through innovation, not regulation.”
January 3, 2022 — These credit union professionals will be serving at the national level – making a difference for credit unions around the country.
Bismarck, ND – The Credit Union National Association (CUNA) and American Association of Credit Union Leagues (AACUL) have announced their Committee Assignments for 2022. Six Dakotans have been appointed to various committees and subcommittees and will be serving at the national level, making a difference for credit unions around the country.
Amy Kleinschmit, Chief Compliance Officer, Dakota Credit Union Association (Sioux Falls, SD) has been appointed to the CUNA Consumer Protection Subcommittee. The purpose of this committee is to monitor developments, address concerns, and advise CUNA staff in the areas of consumer financial protection laws and regulations; to develop voluntary guidelines in this area for the benefit of credit unions and their members; and to make recommendations to the Advocacy Committee to minimize or eliminate requirements without jeopardizing consumer protections. In addition, Amy was named to AACUL’s Regulatory Advocacy/Compliance Advisory Committee, which provides advice and feedback to CUNA and AACUL regarding federal and state regulatory advocacy and compliance issues affecting credit unions.
Jeremiah Kossen, President/CEO Town and Country CU (Minot, ND) was also named to the CUNA Consumer Protection Subcommittee, as an Ex-Officio Member. Kossen was first named a member of the national CFPB Credit Union Advisory Council in September of 2020, the first North Dakota credit union leader to serve on this council.
August 25, 2021 — DepositAccounts.com gives these credit unions an A+ health rating, placing them among the healthiest credit unions in the United States.
Three North Dakota credit unions were recently named among the Top 200 Healthiest Credit Unions in the United States by the 2021 DepositAccounts.com study. Deposit Accounts is a subsidiary of LendingTree that analyzes financial institutions nationwide and publishes their Top 200 list annually. Out of 2,943 credit unions evaluated this year, each of these Dakota credit unions were ranked in the Top 5% receiving an “A+” health rating.
# 61 – Railway Credit Union, Mandan, ND, Paul Brucker, President
#149 – Aspire Credit Union, Minot, ND, Mindee Kohlman, CEO
#162 – Town & Country Credit Union, Minot, ND, Jeremiah Kossen, President/CEO
July 15, 2021 – The National Association of State Credit Union Supervisors (NASCUS) is proud to announce North Dakota has earned Re-Accreditation following a series of in-depth reviews and assessments by a panel of veteran state supervisors.
More than 88% of the $989 billion in state-chartered credit union assets are supervised by NASCUS’ 28 accredited state agencies.
“Accreditation is direct evidence of an agency’s capabilities and benefits all credit unions in the state as well,” said NASCUS President and CEO Lucy Ito. “It recognizes the professionalism of a state agency’s regulators, supervisors, and staff, while potentially delivering an impetus and support for legislation to modernize state law and policy changes to advance state supervisory processes and best practices.”
North Dakota Commissioner Lise Kruse expressed, “The accreditation process ensures that our DFI meets comprehensive organizational and performance standards. Accreditation assures the public and industries we regulate the competency and effectiveness of our DFI. It also provides independent validation of the quality of our work and the faithfulness to our mission. We appreciate the work of the accreditation team and are grateful to NASCUS for their reaccreditation.”
NASCUS accreditation is a robust process that includes disciplined self-evaluation, peer review, and ongoing monitoring. The process, administered by the NASCUS Performance Standards Committee (PSC), measures a state regulatory agency’s ability and resources to carry out its regulatory and supervisory programs effectively.
To earn Accreditation, a credit union state supervisory agency must demonstrate that it meets accreditation standards in agency administration and finance, personnel and training, examination, supervision, and legislative powers.
NASCUS adopted the Accreditation Program in 1989 to administer and assure states’ credit union examination and supervision quality standards. This program, modeled on the university accreditation concept, applies national performance standards to a state’s credit union regulatory program.
April 7, 2021 — Since August of 2020, CUNA has been hosting a series of Small Credit Union Webinars each Tuesday. In this collaborative effort, CUNA and nearly every state League has been presenting important topics specifically designed for small credit unions. This week, on Tuesday, April 6th, it was our turn!
Dakota Credit Union Association (DakCU) hosted a very important informational session titled “How grants can benefit your credit union, your members, and your community.” Amy Kleinschmit, Chief Compliance Officer, opened the session by welcoming more than 220 attendees and introduced our guests: Tawney Brunsch and Mike Beall.
Tawney is the Executive Director of Lakota Funds, the first Native Community Development Financial Institution (CDFI) on a reservation. She has led this financial institution through several history-making accomplishments, including: the charter of the Lakota Federal Credit Union, where she is the chairwoman; the launch of a child development account program; and the conversion of a low-income tax credit housing development into privately owned homes.
New commissioner named to succeed Entringer
Oct. 27, 2017 — Lise Kruse will succeed Bob Entringer as commissioner of the North Dakota Department of Financial Institutions; Entringer retires Nov. 30, after 35 years of service to the NDDFI. He was named commissioner in 2011 (and reappointed last year). Kruse joined the department in 2004 as a financial institutions examiner; her most recent position is chief examiner of banks. The appointment of commissioner, made by Gov. Doug Burgum (R), requires confirmation by the state senate.
Answering the Call for Children’s Miracle Network
April 22, 2015 – Credit Union Association of the Dakotas, based in Bismark, ND, has helped raise over $23,000 for the local Children’s Miracle Network hospital.
Credit Unions Say Risk-Based Capital Hurts Farmers
May 27, 2014 – More than 20 credit unions from seven Midwest states told the NCUA the proposed risk-based capital rule would hurt their operations.
Capital Credit Union Named Top Workplace by Bismarck-Mandan Young Professionals Network
May 25, 2014 – Bismarck, N.D. – The Bismarck-Mandan Young Professionals Network has released its 2014 list of the Top 10 Young Professional Workplaces in Bismarck-Mandan.
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