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November 20, 2014

Record Buffalo blizzard forces CUs to hunker down

CU System
ALBANY, N.Y. (11/20/14)--The area surrounding Buffalo, N.Y., received more than 60 inches of snow during a 24-hour period Wednesday, shutting down roadways and businesses, with more on the way.
 
"Based on our assessment, everything south of Buffalo, including credit unions, are closed," Ron McLean, Credit Union Association of New York (CUANY) senior vice president, told News Now . "I-90 from Henrietta to the Pennsylvania border is closed.
 
JoAnn Gorman, marketing manager, Western New York FCU, West Seneca, sent this photo taken by President/CEO Marie Betti of the street outside Betti's home. (Western New York FCU Photo)
"Credit unions are directing members to use mobile banking. For those credit unions that have members outside of the affected areas, shared branching has proven to be a valuable resource," he added.
 
Buffalo Community FCU, with $73 million in assets, closed two of its branches and notified members that it would reopen once weather permits. On its website, it also directed members to its Williamsville, N.Y., branch.
 
Social media again played a role in communicating with members. On its Facebook page, Western New York FCU, West Seneca, with $40 million in assets, directed members to use online banking or voice tellers.
 
Late Wednesday afternoon, McLean reported that CUC Mortgage Corp., an affiliate of CUANY with an office in Buffalo, remained open throughout the storm.
 
New York Gov. Andrew Cuomo declared a state of emergency for the 10 counties, including Erie County, most affected by lake-effect snow. The declaration mobilizes more than 1,000 transportation personnel, including 526 snow plows, 74 large loaders and 21 snow blowers. It also sends 150 National Guardsmen into the Buffalo area to assist with recovery efforts ( The Weather Channel Nov. 18).
 
Another lake-effect storm is on its way with the National Weather Service predicting another two feet of snow between 11 p.m. Wednesday and 1 a.m. (ET) Friday.
 
Agility Recovery, a CUNA Strategic Services alliance provider, offers a checklist for winter weather preparedness. Among the tips are having on hand the names and phones numbers of the credit union's heating contractor, plumber, building owner and insurance agent as well as local emergency services. ReadMore

CU CEO confidence still high, but ticks down 3Q: Catalyst survey

CU System
PLANO, Texas (11/20/14)--Credit union CEO optimism declined slightly after three straight quarters of increasing confidence in the economy, according to results of Catalyst Corporate FCU's third quarter 2014 Credit Union CEO Confidence Survey.
 
Click to view larger image Catalyst Corporate FCU Graphic
The Credit Union CEO Confidence Index now stands at 31.29, down from 32.94 in the second quarter. Even with the step back, the current index is still the highest in seven years, with the exception of last quarter's index. The Present Situation Index declined to 31.57 from 32.76 in the second quarter, while the Expectations Index weakened to 31.15 from 33.03.
 
"Some of the weakening in confidence could be attributed to the uncertainty created by the recent Ebola scare in the U.S.," said Steven Houle, director of Catalyst Strategic Solutions' advisory service. "Other likely factors include continued political tension around the globe, particularly in the Ukraine and Russia, and the economic slowdown in Europe and Asia."
 
CEOs' outlook for the economy decreased regarding both the financial conditions of their credit unions and of their members. Assessment of their institutions' current condition declined slightly to 37.23 from 37.61, while expectations for their institutions' condition over the next six months experienced a greater drop to 42.80 from 45.64 the previous quarter.
 
CEOs' assessment of their members' current financial condition fell to 25.97 from 27.95, while expectations for members' future financial condition dropped more than four points to 29.53 from 33.64--the largest decline in the recent survey.
 
The survey also indicated that CEO expectations for loan demand increased by almost two points over the previous quarter. Expectations for share-deposit growth fell by 2.66 points.
 
David Green, president/CEO of the $630 million-asset Contra Costa FCU in Martinez, Calif., said his sentiments reflect the survey results. He cited a disconnect between Washington economists who only look at the numbers and credit union CEOs who look at their individual members' financial conditions. "A Google employee, for example, with great salary and benefits offsets a long-term unemployed person when only looking at the gross numbers," Green said. "On the other hand, we see members losing their purchasing power every day, because their salaries are not keeping up with higher prices, especially with healthcare and technology products, such as phones and tablets."
 
Catalyst Corporate's quarterly confidence survey was sent to 2,247 credit union CEOs across the nation in October 2014; 233 credit union professionals responded, for a response rate of 10.37%.
 
Using a scale ranging from negative 100 to 100, respondents registered their confidence levels in six key areas to create an overall index, as well as a snapshot of present-day feelings and future expectations. The areas CEOs were asked to evaluate included:
  • Current financial condition of members;
  • Current financial condition of credit union;
  • Anticipated financial condition of members in six months;
  • Anticipated financial condition of credit union in six months;
  • Anticipated loan demand at the credit union in six months; and
  • Anticipated share deposit growth at the credit union in six months.
ReadMore

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CUNA Mutual issues risk alert on HELOC wire fraud

CU System
MADISON, Wis. (11/20/14)--CUNA Mutual Group issued an alert this week regarding a wave of fraud that originates from home equity lines of credit (HELOCs) and requests wire transfers be sent to construction company accounts.

Wire transfer fraud involving HELOCs first surfaced in 2006, but this appears to be a new round of attacks that are hitting credit unions nationwide, according to the risk alert.

After mortgages are filed and become public record, cybercriminals scrape data from the public documents to learn where members have HELOC accounts from which they can steal.

Recent frauds have been conducted by requesting wire transfers be sent to accounts in the name of construction companies to make it look like advances for home improvement projects. In certain cases the companies are legitimate, and are used as "money mules."

The fraud incidents featured a number of common traits, including:
  • Fraudsters contacting credit unions directly to change member profile information, including addresses, phone numbers or email accounts;
     
  • Online accounts are taken over entirely, allowing the fraudsters to manipulate members' online banking services. Once this occurs, they can change profile information or transfer funds from the HELOC into a share draft account, reducing the chance that a credit union employee would notice suspicious activity;
     
  • Wire requests received by fax with accurately forged signatures, which they find on the HELOC documents they search out online;
     
  • Member phone numbers are call-forwarded by the criminals, or callbacks by the credit union are forwarded to the criminals; and
     
  • Fraudsters build a profile of member information from what they can gather on a member through online sources, and when a credit union employee asks the criminal to verify certain information, the criminal can give the correct information.
ReadMore

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World Council's new weCU2 digital hub to connect millennials, CUs

CU System
MADISON, Wis. (11/20/14)--As millennials ascend to the top of all consumer spending demographics--by 2017, they are estimated to be the largest--it's becoming more imperative for credit unions to position themselves to best serve these young adults.

To help credit unions ramp up memberships among this younger demographic, the World Council of Credit Unions has developed a new program, called weCU2 , as part of its "Build the Brand" initiative.

The new program serves up digital strategies that will help credit unions become familiar and engage with millennials and, perhaps just as importantly, help millennials learn about credit unions.

These marketing strategies can attract young adults, whose communication methods and disinterest in traditional media have caused difficulties for many credit unions, despite young adults' closely aligned personal values with cooperative principles, World Council said.

"Youth and technology are key elements to growing our industry," said Victor Corro, Worldwide Foundation for Credit Unions vice president. "World Council recently challenged the global community to add 50 million new members by 2020. This initiative not only raises awareness of that challenge, but also provides best practices for membership growth."

weCU2 includes a series of online podcasts with industry expert interviews, videos, product case studies, Twitter chats, SlideShare presentations, an interactive blog and direct millennial feedback from across the globe.

To help illustrate the program, World Council launched the weCU2 program with a video, produced in partnership with Canada-based Vancity CU.



The goals of the program are to familiarize and educate millennials on how their values align with those of credit unions, and to give credit unions a full understanding of a millennial's unique needs and "digital DNA."

Sam Maule, emerging payment systems expert, will lead the program with additional staff from the Worldwide Foundation for Credit Unions.

weCU2 will launch its first podcast next week, featuring industry expert Jake Fuentes, CEO of Level Money. World Council will promote all program activities on its website, YouTube, Twitter and Facebook. Use the hashtag #weCU2 to follow all program activities.

Meanwhile, World Council and the Credit Union National Association will host an in-person weCU2 event next year at the 2015 World Credit Union Conference, which will run in conjunction with the CUNA 2015 America's Credit Union Conference in Denver. ReadMore

Nev. double-digit loan growth spurred by lower unemployment

CU System
ONTARIO, Calif. (11/20/14)--Nevada's credit unions recorded double-digit increases in business lending, credit cards and used-vehicle loan growth in the third quarter, the California and Nevada Credit Union Leagues reported.

"Nevada's return to normal looks to be spurred by the continued economic recovery, including an unemployment rate that continues to decline; it's now at 7.3%," said Dwight Johnston, chief economist of the California and Nevada Credit Union Leagues (In the News Nov. 18).

According to numbers from the Credit Union National Association, business lending topped the state's loan growth categories at 14.9%, followed by credit cards at 13.3% and used-vehicle loans at 11.9%.

Overall lending has jumped 9.9% in the first three quarters of the year, with first-mortgage loans gaining 9.5%, new autos climbing 6.3% and personal loans increasing by 4.6%.

Nationally, credit unions have experienced a 10.1% increase in overall loan growth year-over-year, according to September's credit union monthly estimates from CUNA, with new-auto loans jumping 19.8% annually and used-auto loans climbing 12.6% annually.

In California, credit unions have seen loan growth climb 10.5% over the first three quarters of 2014.

Auto lending topped all loan categories at California credit unions, with new vehicle loans surging by 29.7% through the first nine months of the year and used autos jumping 13.4%.

Auto loans were followed by first mortgages (9.2%), unsecured personal loans (9.2%) and business loans (7.4%).

The Nevada data comes from a report that aggregated numbers from 33% of all Nevada credit unions, representing more than half of the state's credit union members.

The California information comes from 52% of all of the state's credit unions, representing roughly 94% of all California's credit union members. ReadMore

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Meme-orable campaign brings in $8M in loans for EECU

CU System
KALAMAZOO, Mich. (11/20/14)--The '80s provided such pop culture icons as "The Dukes of Hazzard," the Sony Walkman, Pac-Man, and, of course, the mullet. Educational Community CU (ECCU) ventured that members were ready to see the humor in the unfortunate hairstyle choice of the past to drive a recent auto loan campaign.
 
Click to view larger image The humor of the mullet haircut, popular in the 1980s, drove the visual appeal of a recent auto loan campaign at Educational Community CU, Kalamazoo, Mich., with $414 million in assets. (Educational Community CU Photo)
Ironically, the tip of the hat to the past was designed to attract Gen Y. "To appeal to a younger audience, we decided to depart from our traditional approach," said Christine Camp, marketing vice president of marketing at the $414 million-asset Kalamazoo, Mich.-based credit union. "We wanted something unique, not cliche and not focused on rate. Our goal was to create an eye-catching campaign that would cut through the clutter, and emphasize member benefits."
 
The gamble paid off for Educational Community CU, which disbursed more than $8.1 million in new and used vehicle loans during the 10-week promotion period. In all, 558 loans were made at a median rate of 2.99% APR, averaging $14,521 per loan.
 
Running March 18 to May 31, the campaign drove loan demand and exceeded ECCU's original loan goal by $1 million. "Perhaps even more important is the buzz it created, and how much fun members and staff had in relating to the visuals," Camp said.

Humorous memes brought the campaign to life and copy was targeted to those born between 1979 and 1999. "The originality of the art was deliberately outrageous," Camp said.
 
Captions with familiar white-block lettering plus galvanizing, comical photos were consistent with the design.
 
While an ad agency did assist initially, Educational Community CU eventually developed all of the memes internally. "We ultimately chose and purchased the photos on our own," Camp said. The brainstorming sessions were particularly dynamic. "Taking a completely different approach, we devised a scheme involving mullets, motorcycle grannies and sweat-band wearing travelers!"
 
Playful captions, such as "Don't Mullet Over," "Get a New Ride" and "Perk Up Buttercup," complemented the graphics. "Gen Y was our initial target for the promotion," Camp said. "But what we didn't anticipate was the successful spill over to other segments, including Gen X."
 
Of the 558 loans closed, 34% (191) were Gen Y and 28% (157) were Gen X.
 
To drive demand in the West Michigan market, Educational Community CU placed five billboards, which drew 900,000 views. The credit union also placed ads on three radio stations. Website banners, the quarterly newsletter, lobby displays, social media ads and member emails were also part of the mix.
 
"The memes were especially successful with social media and the groups we were targeting," Camp said. ReadMore

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CUNA urges CUs to complete new remittance transfer survey

CU System
MADISON, Wis. (11/20/14)--Just over a year after the Consumer Financial Protection Bureau's (CFPB) regulation on international remittance transfers went into effect, the Credit Union National Association is following up with credit unions about how the rule affected their service to members. A previous CUNA survey asked about their expectations of the regulation.
 
CUNA is collecting the information to share with regulators and legislators so they have a better understanding of the operational impact of this regulation and to increase the likelihood that meaningful changes to those regulations are achieved, noted CUNA Deputy General Counsel Mary Dunn in the trade association's request to credit unions.
 
Under the regulation, remittance transfer providers are required to provide prepayment and receipt disclosures to the consumer-sender that include the exchange rate, certain fees and taxes associated with a transfer, and the amount of money that will be received on the other end of the transfer. Remittance transfer providers will also be required to investigate disputes and correct errors.
 
CUNA urged the CFPB to use its exemption authority granted by the Dodd-Frank Act to exempt all credit unions from this regulation because there was no evidence that credit unions engaged in providing remittance services to their members had been subject to complaints. The bureau did exempt credit unions that performed 100 or fewer international wire/ACH remittance transfers in the previous calendar year and in the current calendar year.
 
In August, the CFPB extended an exception that allows credit unions and other depository institutions to estimate certain remittance pricing disclosures when specific pricing information is not available.
 
Prior to last year's implementation, credit unions that responded to CUNA's first survey were concerned they would have to increase service fees, reduce international wire or automated clearinghouse services or even discontinue all types of international remittances.
 
CUNA requests responses by Wednesday, Nov. 26. ReadMore

CU System briefs (11/20/14)

CU System
  • MARLBOROUGH, Mass. (11/20/14)-- The Massachusetts Credit Union League will host an emerging payment trends symposium Dec.17 ( Daily CU Scan Nov. 18).  League President Paul Gentile will moderate the discussion, which will be held at the Credit Union Center in Marlborough, Mass. The session will address the impact of Apple Pay, tokenization and EMV on future member behavior. Experts from FIS, CO-OP Financial Services and Malauzai will be on hand to discuss these emerging trends ...
     
  • ST. LOUIS (11/20/14) --In an effort to continuously update and improve its platforms, the Missouri Credit Union Association (MCUA) is undergoing a website redesign ( Missouri Difference Nov. 18). "The launch of the refreshed website, which offers quick and easy access to essential information, is part of our ongoing efforts to enhance the quality and availability of information to our member credit unions," said Liz Adams, MCUA senior vice president of member relations. The website is expected to launch in the coming months ...
     
  • HOPKINS, Minn. (11/20/14) --John E. Braff, former CEO and board member of SharePoint CU, Duluth, Minn., died Nov. 6. He was 87.
    Braff attended the University of Minnesota Duluth, where he played for and helped organize the first hockey team - See more at: http://mncreditunionnews.org/former-sharepoint-ceo-john-braff-passes-away-at-age-87#sthash.xuU1N5rO.dpuf
    Braff attended the University of Minnesota Duluth, where he played for and helped organize the first hockey team - See more at: http://mncreditunionnews.org/former-sharepoint-ceo-john-braff-passes-away-at-age-87#sthash.xuU1N5rO.dpuf
    Braff attended the University of Minnesota-Duluth, where he played for and helped organize the first hockey team. Braff became a board member of the Red Owl/Snyder Employees CU in the 1980s. After retiring from Red Owl in 1992, Braff became president/CEO of the credit union, serving in that role from 1989 to 1994 and transforming it to Retail Employees CU and to what is now $185 million-asset SharePoint CU ...
ReadMore

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