PSFCU May 2013 Annual Meeting Questions & Answers
PSFCU offer of SBA guaranteed loans
In addition to an existing referral partnership with Newtek Business Services which has allowed us to make accessible business loans to our membership via a referral for a number of years, on 3/3/14, PSFCU was approved for participation in the US SBA’s 7(a) Guaranty Lending program. This program is for properties that are owner-occupied only.
Financing and development of low cost rental apartments for PSFCU members.
The answer to the question as to whether the Credit Union can finance Low Cost Housing Program for members of this Credit Union will depend on the interpretation of the word "financing".
the answer is yes -if "financing" is meant as provision of credit to a PSFCU business member who wishes to take on such a project, provided the member meets PSFCU MBL criteria and the project financing does not exceed individual limits to members, in accordance with the PSFCU policy.
the answer is no - if "financing" is meant that the Credit Union is to engage in such a project directly as both the developer and landlord of the said low income housing. It is prohibited by laws regulating the operations of federal credit unions delineated in one of three sources:
1. The National Credit Union Act §1757 which lists and describes seventeen powers granted to the credit unions by the act:
2. CFR §721 which lists categories of activities preapproved as incidental powers necessary or requisite to carry on a credit union’s business.
3. CFR §712 which empowers Federal Credit Unions to invest in and lend to CUSO (Credit Union Service Organization) and lists activities and services preapproved for a CUSO.
What are the guidelines for granting donations?
PSFCU grants financial support to numerous organizations, parishes and Polish-American clubs in the form of a monetary donation. Donation requests are reviewed by the PSFCU Board of Directors (for amounts of $2,500 and over) and by the Donation Committee (for amounts under $2,500). In order to apply for a donation, an applicant has to be a PSFCU member, have a not-for-profit status (in accordance with IRS (501) C (3) regulation) and provide services to the Polish-American community. PSFCU does not grant donations to individuals. During 2012 and 2013 calendar years, PSFCU provided support to over one hundred and sixty different organizations, schools and churches by granting donations totaling $289,538. Guidelines for granting a donation and the complete list of all organizations which received donations are available on our website at en.psfcu.com/Donations_27.html
Reprint of Rev. Longin Tolczyk’s book titled “In Defense of Polonia” (W obronie Polonii)
Last year, representatives of PSFCU reached out to the survivors of Father Tolczyk to obtain permission for the publication of his book “In Defense of Polonia”. In February of this year a representative of the family gave his preliminary conditional approval for publication of the book, citing conditions PSFCU would have to meet to obtain final approval. These conditions cannot be met by the Credit Union at this time. However, PSFCU representatives are in contact with Rev. Tolczyk’s estate and hope to change the estate’s position on the matter.
NCUA Special Assessment
Do we have to pay the NCUA special charges every year and why is the amount growing?
In 2009, in view of the economic crisis and the resulting problems facing corporate credit unions, our federal supervisory body, NCUA, obliged all credit unions it oversees to pay additional fees to cover increased insurance fund premiums and to pay additional premiums for the newly-created corporate credit unions stabilization fund. This was a mandatory decision and was not subject to appeal. As a result, during the past 5 years, PSFCU was forced to contribute a total of $9.6 million toward both funds.
Why don’t we divide and distribute to members the undivided earnings? Why do operating expenses keep increasing?
As of March 31, 2014, undivided earnings amount to $146.6 million. This amount is crucial to the safety and growth potential of every financial institution. The ratio of PSFCU capital to total assets is 9.3 percent (as of March 31, 2014), which indicates that PSFCU is “well-capitalized” according to NCUA standards. In the current economic situation, reduction of this ratio is not recommended form the point of view of the safety, soundness, and growth of our Credit Union.
Are the buildings in Staten Island and Maspeth owned by PSFCU?
The Maspeth branch building is owned by PSFCU, while the Staten Island branch is a rental property.