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Delegates from Japan visit California CUs
RANCHO CUCAMONGA, Calif. (2/10/09)--Representatives from Japan’s Agricultural and Fishery Cooperative Savings Insurance Corp. and the Norinchukin Research Institute visited with executives at three California credit unions last week to learn about the credit union cooperative business model. The group visited California Agribusiness CU, Buena Park, on Feb. 3. Then a member of the delegation visited two San Francisco-based community development credit unions--Mission SF FCU and Northeast Community FCU--to learn how they serve lower-income individuals.
Click to view larger image From left, front row: Mitsugi Nakashima, Agricultural and Fishery Cooperative Savings Insurance Corp. deputy director of the planning division; Hiroaki Funamoto, deputy governor; and Shinya Furue, Norinchukin Research Institute financial and investment division economist. Back row: Tena Lozano, director of credit union development, California Credit Union League; and California Agribusiness CU's Ruth Brock, Buena Park Branch manager; Adam Denbo, president/CEO; Gloria Lopez, vice president of business development; Lisa Mills, City of Industry Branch manager; and Mary Whipple, chief financial officer. (Photo provided by the California Credit Union League)
California Agribusiness CU CEO Adam Denbo, joined by his executive team and Tena Lozano, California Credit Union League director of credit union development, described the National Credit Union Share Insurance Fund (NCUSIF) structure; private vs. federal insurance; the difference between state- and federally-chartered credit unions; the corporate credit union structure; his credit union’s unique field of membership. They also discussed issues such as credit unions' continued fight to increase the member business lending cap, concerns about the increase to the NCUSIF insurance premium, and the need for a risk-based capital system. The executives learned that Japanese not-for-profit financial cooperatives have the same capital requirements as banks (4%). If they conduct international business, the requirement increases to 8%. “The meeting went far better than expected, with mutual sharing of information. We studied the culture and were well prepared, and they understood and valued our perspectives,” said Denbo. “We each shared our concerns about the global economy as well as ideas regarding how regulators could deal with current balance sheet risks of financial cooperatives.” The visiting delegation included Deputy Governor Hiroaki Funamoto and Deputy Director of the Planning Division Mitsugi Nakashima of the Agricultural and Fishery Cooperative Savings Insurance Corp.; and Shinya Furue, economist with the Financial and Investment Division of the Norinchukin Research Institute. Similar to the FDIC and National Credit Union Administration, the Agricultural and Fishery Cooperative Savings Insurance Corp. is similar to the Federal Deposit Insurance Corp. and the National Credit Union Administration. The corporation administers Japan’s savings insurance system. The research institute, an affiliate of The Norinchukin Bank, is the information center for Japan's Cooperative System for agriculture, forestry and fisheries. Both Funamoto and Nakashima asked questions about the present state of agricultural finance and how California Agribusiness CU fits into that marketplace. Furue expressed interest in taking the credit union business model back to Japan. He was particularly interested in learning how credit unions build and retain “firm relationships with members,” and how credit unions will address the economic crisis in terms of lending standards and underwriting. Furue then traveled to the San Francisco-based credit unions. At Mission SF FCU, Furue learned more about the credit union’s nonprofit business model, how it does outreach and marketing, its strategy for reaching low-income borrowers, and its Salva Vida/Lifesaver Loan—a payday loan alternative program. “He found out about us through our website, and he was interested in our work with low-income individuals,” said Ivan Barriga, outreach and financial education director with Mission SF Community Financial Center, affiliated with Mission SF FCU. “He is doing research on a hybrid model of banking that incorporates ‘corporate social responsibility’--and he thought our credit union was an excellent example of this because of our social mission and social impact," said Barriga. "We were flattered they wanted to talk to us--after all, this is a $20 billion bank asking an $8 million credit union for advice on strategy.” “I was particularly impressed with the depth of knowledge these gentlemen possessed concerning our industry and the latest issues we face,” remarked Lozano, who acts as a league liaison for international visitors. “It was wonderful to witness the exchange of ideas and to see their interest in the credit union business model.”


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