The Federal government rules for garnishing accounts that receive Federal benefit payments have been updated recently. NCUA developed a summary of those rules for credit unions that receive garnishment orders against member accounts to satisfy debts. Click here for their August 2013 notice on these rules.
Callahan & Associates’ analysis of credit union performance shows lending surging forward in the first half of 2013, resulting in the pace of loan growth surpassing deposit growth for the first time since 2008. The $621 billion credit union loan portfolio has expanded by 5.4 percent over the past 12 months, the fastest pace in five years and ahead of the 4.6 percent share growth rate.
Six months into 2013 the credit union industry’s lending activity is on a record pace with $175.1 billion in loans originated, or $1 billion a day. Six states have posted at least a 20 percent increase in loan originations. North Dakota leads the nation with a 37.6 percent increase versus the first half of 2012, followed by Idaho with a 30.1 percent rise.
Consumer lending is a key driver of growth, with over $91 billion in originations through June. New auto loans are the fastest growing component of the industry’s loan portfolio. Supported by surging new car sales, new auto loan balances are up 11.2 percent over the past year. Used auto lending also remains strong as credit unions offer a variety of refinancing programs to help members lower their monthly payments. In addition to the strong auto lending results, credit union credit card balances topped $40 billion for the first time at mid-year.
“Consecutive years of record lending activity are evident in the loan portfolio growth. Every loan category in the portfolio is growing at a faster rate in 2013 than in 2012,” says Jay Johnson, EVP of Callahan & Associates. “Credit unions continue to build on the momentum developed during the downturn when they were lending to members at a then-record pace during the height of the ‘credit crunch’.”
Real estate lending continues to rise at credit unions as well. The $66.1 billion in first mortgage originations is the highest ever through June, helped by a record $34.9 billion in home loans being granted to members during the second quarter. Credit unions originated 6.8 percent of all first mortgages in the U.S. in the first half of 2013. The pace of home equity lending has also picked up with originations increasing 10 percent from year ago levels.
About Callahan & Associates
Callahan & Associates is an independent voice within the credit union industry providing trusted industry expertise in a comprehensive package allowing credit unions and credit union partners to deliver the best service and products to their audiences.
The Healthcare Payments amendment to the NACHA Rules takes effect on September 20, 2013. The new rule includes processing enhancements and transaction identification and formatting requirements specific to healthcare claim payments. For most credit unions, the impact of these changes should be limited to your business members who receive payments as a healthcare provider. However, credit unions should review their current ACH posting software and statement content to determine if any changes are needed.
Standard Entry Class (SEC) Code
The new entries will carry the CCD Standard Entry Class code as a business-to- business entry. Be aware that your consumer members may also be using their personal account for business purposes, and may therefore receive these entries as well if they are self-employed as a healthcare provider.
The Company Entry Description field will always contain the value “HCCLAIMPMT.”
Each entry will also include an addenda record that includes a TRN (Reassociation Trace Number) needed by your member to match the entry to the related electronic remittance advice sent separately by the Originator to your member. The TRN data will be listed as a combination of numbers, letters, and symbols. Here is an example of how the data may appear in the addenda record: TRN*1*12345*1512345678*999999999~
The new rules require that the credit union provide this addenda information to the member either automatically or upon their specific request. You will need to ensure that your ACH posting software includes this addenda information with each transaction so members can view the data via your home banking or other secure online system.
Complete details on the new ACH healthcare payments can be found at http://healthcare.nacha.org. If you have questions about the Healthcare Payments rule change, contact our Member Services Department at 1-877-786-2677, option 1.