The Point: March 28, 2013

New York CUs continued above-average growth last quarter

Credit unions across New York State ended 2012 with strong financial performance, exceeding national averages in several key categories. These statistics are highlighted in the latest quarterly New York Credit Union Performance and Trends Report provided by the Credit Union Association of New York.

Most notably, New York credit unions had annual outstanding loan growth of 6.5 percent in 2012-significantly higher than the national average of 4.5 percent. Additionally, loans to businesses increased by 14.6 percent over 2011 totals.

Additional highlights from the report include:

  • Annual growth figures for assets, shares, members and loans in 2012 all exceeded national averages. The average member relationship also increased.
  • Credit unions in New York saw share balances increase at 7.8 percent, compared to the national average of 6.1 percent. Regular shares, money market accounts and share drafts all grew at a double-digit annual pace.
  • Asset quality at New York's credit unions posted an annual improvement. The overall delinquency rate at year-end was 1.26 percent, below the local bank average.
  • Capital levels remained high at 11.3 percent of assets, surpassing New York banks and thrifts and credit unions and banks nationwide.
  • Business loans increased 14.6 percent from 2011 levels, with member business loan originations totaling just under $3.0 billion in 2012.

The quarterly New York Credit Union Performance & Trends Report is provided to member credit unions as a benefit of Association membership. Developed in partnership with Callahan & Associates, Inc., each report delivers the most relevant and up-to-date analysis of key statistics and trends that may impact credit union performance.

To view the report, log in to the Member Resources section of the Association website.

Calling all CUs: Reserve lodging for Convention

The 2013 Annual Meeting & Convention is less than three months away, and hotel rooms are filling up quickly. Lodging options and reservation instructions can be found on the Convention website.

As a reminder, attendees who register for Convention on or before April 12 will be eligible for the early bird rate, which is discounted by $100. Secure online registration is available for the main event and the CUNA Mutual Group golf tournament to benefit the New York Credit Union Foundation (NYCUF).

NYCUF Professional Development grants are available to assist with registration costs, and a special Young Professional Convention grant  is available for attendees age 35 and younger.

The 2013 Annual Meeting & Convention will be held June 13-16 at The Sagamore Resort on Lake George. For more information, visit the Convention website.

NCUA to host NYC workshop April 27; room block expires April 5

NCUA's Office of Small Credit Union Initiatives (OSCUI) is once again offering credit union workshops across the country-including two in New York State. The first will be held April 27 in New York City, and details are available online.

The workshop will focus on: issues facing credit unions; examination expectations; growth and leadership opportunities; fair lending; and strategic planning. Breakout sessions on regulatory compliance will also be offered, along with a special presentation on employee dishonesty from CUNA Mutual Group.

Attendees should note that lodging at the event site (Holiday Inn Midtown 57th Street) is limited, and the discounted room block expires April 5.

A Buffalo workshop is scheduled for Sept. 28. To view the complete 2013 OSCUI training schedule, visit NCUA's website.

Legal Spotlight: Acknowledgement of judgment on bankruptcy petition extends lender's collection time
By Henry Meier, Associate General Counsel

A debtor's acknowledgement of an uncollected judgment on a Chapter 7 bankruptcy petition gives a creditor 20 more years to collect the debt, New York State's Appellate Division ruled last week.

Section 211(b) of New York's Civil Practice Law and Rules gives a creditor 20 years to enforce a legal judgment unless the debtor acknowledges the debt in writing or pays part of the judgment. If he/she does, the creditor has 20 years after the last acknowledgment or payment to collect the debt. In FNY Bank v. Alexander, the question was whether or not an individual who acknowledges a judgment in a bankruptcy petition restarts the 20-year clock.

Geoffrey Alexander was successfully sued for more than $300,000 in 1990. He continued to run into financial difficulties, and, in 2005, he filed for Chapter 7 bankruptcy. As part of the bankruptcy petition, he acknowledged that a successful lawsuit was brought against him, but he wrongly claimed that he only owed $10,000.

For reasons that aren't explained in the decision, no one tried to collect the debt until 2011, when a creditor placed a restraining order on Alexander's accounts.

When his accounts were frozen, Alexander went to a Manhattan trial court and argued that because 20 years had passed since the successful lawsuit, the debt was presumed to be satisfied. The court agreed, ruling that Alexander no longer owed the judgment to anyone.

On appeal, New York State's Appellate Division for the First Department held that even though 20 years had passed, by acknowledging in writing on his petition that there was a judgment against him when he filed for bankruptcy, Alexander started the 20-year collection clock started all over again in 2005.

Alexander's attorney argued that the statute contemplates situations in which a debtor both acknowledges he/she owes a debt and promises to pay it back. Acknowledging a debt on a bankruptcy petition is not a promise to pay, but simply a listing of the debts he/she wishes to have discharged, he argued.

The Court disagreed, stating, "While it is certainly true that debts listed in bankruptcy indicate an intention by the bankrupt not to pay, the debtor's intent to pay is irrelevant" for purposes of authorizing collection efforts to continue.

For more legal and regulatory analysis by Associate General Counsel Henry Meier, visit the New York's State of Mind blog.

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