Credit Union Industry

As a special niche within our accounting and consulting realm, the emergence and changes going on in our region’s credit unions are addressed by our skilled, specialized A. M. Peisch staff.

Are you managing a Credit Union? (The credit union defined):

A federal credit union is a nonprofit, cooperative financial institution owned and run by its members. Organized to serve, democratically controlled credit unions provide their members with a safe place to save and borrow at reasonable rates. Members pool their funds to make loans to one another. The volunteer board that runs each credit union is elected by the members. The motto of credit unions: “Not for profit, not for charity, but for service” immediately describes, and raises questions on the unique challenges and opportunities the average credit union delves into on behalf of its share members.

To join a credit union, one must be eligible for membership. Each institution decides who it will serve. Most credit unions are organized to serve people in a particular community, group or groups of employees, or members of an organization or association. A. M. Peisch serves many of the credit unions in our service region.

Additionally, another kind of credit union is the “Corporate Credit Union” or “CCU”. They don't serve individuals, generally, but act as credit unions for credit unions. Right now, thirty-two federally insured corporate credit unions across the country provide investment, liquidity, and payment services for their member credit unions.

History:

Credit unions are not new. Originating in Europe, they began in this country when the first credit union was formed nearby, in Manchester, New Hampshire, in 1909. Today, over 10,000 credit unions with over $480 billion in assets serve more than 79 million people in the United States. Thousands of members in Vermont and New Hampshire currently depend on A. M. Peisch and Company, LLP to come in, evaluate and report on the financial operations of their credit union.

Reporting required of credit unions:

Financial Accounting Audits:
Very small credit unions, with under $10 million in assets, are provided an “Accounting Manual for Federal Credit Unions” to guide them in accounting for financial transactions and reporting. In accordance with the Credit Union Membership Access Act (CUMAA), credit unions with $10 million or more in assets must follow generally accepted accounting principles (GAAP) in the call reports (discussed below) that they file with the NCUA. These credit unions should not look to this “Manual”, but should seek the advice of an independent accountant to gain a full understanding of GAAP and its implementation. That is where the skilled professionals at A. M. Peisch can fully meet the need.
 

Informational (IRS) reporting:
As with any not for profit agency, credit unions must file an informational return annually with the Internal Revenue Service. Numerous, seemingly innocuous, questions, beyond a mere restatement of earnings are required to be addressed these days, including such emerging and continuing issues such as related “service” entity issues, and lobbying activities, respectively. We at A. M. Peisch stay “on top” of these credit union concerns.
 
Periodic Call Reports:
Note that all federal credit unions and state credit unions that are federally insured must report to the National Credit Union Association (NCUA). Some non-federally insured credit unions also report to NCUA at the request of their state regulator.
 
All federally insured credit unions are required to file call reports semiannually as of June 30 and December 31. Federally insured credit unions are “type 1” (federal charter) and “type 2’ (state charter with federal insurance) within the NCUA database. All cycles for June and December will contain data for all federally insured credit unions. Again, let us help your credit union comply with an effective response mechanism.
 
In addition to semiannual reporting, any federally insured credit union with assets greater than $50 million (as of the preceding year end) must file call reports quarterly, as of March 31 and September 30. All cycles for March and September will contain data for these credit unions.
 
Non-federally insured credit unions (noted as “type 3” credit unions in the industry) follow the filing requirements of their respective state regulator. Some states use NCUA's call report system and require every credit union to file every quarter. Other states do not use NCUA's call report system for their non-federally insured credit unions. Depending on the state of operation each credit union may have varying responsibilities. Call AMP to assure ease in structuring and completing these specialized reporting needs.

AMP specialized services:

Operations, Emerging Issues and Risk Analysis Today, the multi-state activities of commercial banks, along with their merger and newly-competitive strategic plans have, in the opinion of credit union managers, left the small consumer with fewer choices in obtaining basic banking and lending type services. This may however, represent a business opportunity to today’s local credit union. Conversely, aggressive forays into historically untapped services provided by commercial banking may subject these credit unions with a challenge to their tax exempt status provided by the tax code. Serious thoughtful decision-making into these issues cannot be complete without a capable accounting and tax team involved to weigh the planning evidence of your credit union’s next move. Call us, and we can take a look at all of these unique challenges!

A. M. Peisch & Company LLP services:

Financial Accounting Audits
ALM & Liquidity review
Risk assessments
Compliance audit services
Informational (IRS) Returns
Periodic Call Reports & Assistance
AMP specialized services

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