MADISON, Wis. (5/20/13)--Young credit union members deposited about $25.2 million into their share and savings accounts during this year's National Youth Saving Challenge, sponsored by the Credit Union National Association.
 

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The 224 credit unions participating this year collectively saw 117,244 youth deposit an average of $214 each.
 
In 2009, the Saving Challenge expanded beyond National Credit Union Youth Week to run the entire month of April. Credit union staff told CUNA that a week wasn't long enough. This year, more than half (60%) of the participating credit unions ran the challenge for the entire month--giving them more time to open 6,173 new youth accounts.
 
The National Youth Saving Challenge also rewarded 10 randomly drawn savers with $100 cash prizes. The winners were:

• Holding a magnifying glass that would make Sherlock Holmes envious, super saving sleuth Rhys Hollowood cracks the mustache mystery during National Credit Union Youth Week at Clearview FCU in Moon Township, Pa.

  Amara, age 8, from Electro Savings FCU, St. Louis;
• Sydney, age 2, from Jax FCU, Jacksonville, Fla.;
• Bryar, age 1, from Lakeview CU, Neenah, Wis.;
• Rylee, age 5, from North Georgia CU, Toccoa, Ga.;
• RJ, age 6, from Richmond Community FCU, Augusta, Ga.;

• Christopher, age 9, from Rockford Postal ECU, Loves Park, Ill.;
• Rylee, age 2, from Sioux Valley Coop FCU, Watertown, S.D.;
• Charleigh, age 1, from Susquehanna Valley FCU, Camp Hill, Pa.;
• Cheyanne, age 3, from United Health CU, Burlingame, Calif.; and
• Max, age 4, of Monument, Colo., from Wilmington (Del.) Postal FCU.

Hamilton the Pig--the Kids Club mascot at Unitus FCU, Portland, Ore.--took photos with young savers at an open house and entertained third-graders at a nearby school by leading The Dollar Holler Rap, after which every student received a Hamilton piggy bank. (Photos provided by CUNA)

CUNA also sponsors National Credit Union Youth Week, which was held April 21-27. The theme for this year's youth week was Saving Sleuth: Solve the Mystery. The week was created by CUNA so credit unions nationwide could focus on the financial needs of young people and provide financial literacy education. It teaches the benefits of saving and goal setting, and invites youth to open savings accounts at their credit union and make deposits throughout the year.
 
In 2014, National Credit Union Youth Week will be celebrated April 20-26.
 
Raising awareness about credit unions is one of the steps in CUNA's, leagues' and credit unions' Unite for Good campaign to achieve the vision of Americans choosing credit unions as their best financial institution. As that awareness grows, potential members will turn to aSmarterChoice and Unite for Good websites to locate credit unions they can join and find out more.
 
In 2014, National Credit Union Youth Week will be celebrated April 20-26.

WASHINGTON (5/20/13)--More details of the joint Credit Union National Association/state credit union league "Don't Tax My Credit Union" campaign will be revealed during a free Wednesday webinar.

CUNA President/CEO Bill Cheney will host the webinar, which is scheduled for Wednesday at 3 p.m. ET.

The National Webinar on the Credit Union Tax Status will feature:

• A legislative briefing on the tax situation facing credit unions; and

• Valuable information on the tools CUNA and state leagues are providing to help credit unions join the tax status fight.

CUNA and affiliated state credit union leagues last week launched a large-scale, nationwide grassroots-mobilization campaign urging America's 96 million credit union members to deliver a united message to the U.S. Congress: "Don't tax my credit union!"

The campaign is being launched at a time when the U.S. House and Senate have made broad-based tax reform a major priority. The initiative will urge lawmakers as part of any final tax reform plan to preserve the federal tax exemption credit unions receive as not-for-profit, member-owned cooperatives.

"It's rare that credit unions call upon their 96 million members to take action, but our members will be the best spokespeople we have, especially on an issue as vital to our future as this," Cheney said.

To register for the webinar, and learn more about CUNA's and the leagues' "Don't Tax My Credit Union" campaign, use the resource links.

WASHINGTON (5/20/13)--Ongoing efforts by the Credit Union National Association and state credit union leagues to protect the credit union tax exemption can also help raise the profile of other credit union priorities in the U.S. Congress, CUNA President/CEO Bill Cheney said in this week's edition of The Cheney Report.

CUNA and state leagues last week launched a large-scale grassroots effort which seeks to mobilize America's 96 million credit union members and deliver to Congress a direct, united message: "Don't tax my credit union!"

This Wednesday, May 22, at 3 p.m. ET, CUNA is conducting a free webinar on the new campaign. Cheney urged credit union executives to attend. To sign up for the webinar, click here.

The "Don't Tax My Credit Union" campaign is extremely important, Cheney said. At the same time, it "will not detract from our efforts this year to advance proactive charter enhancement legislation for credit unions, such as supplemental capital and an increase in the member business lending cap.

"We can and will move our proactive agenda forward while undertaking this grassroots tax advocacy campaign. In fact, the grassroots effort on taxation will strengthen us on charter enhancement.
 
"A large, sustained, high-impact grassroots turnout will create a halo effect on credit union issues that illustrates the depth of consumer support for credit unions. Members of Congress are sure to take notice," the CUNA CEO added.
 
Asking credit unions to contact their members on an advocacy issue is not something CUNA does often, or takes lightly, Cheney wrote. "But we must act now, and our 96 million members will be our best spokespeople, especially on an issue as vital to the movement's future as our tax status."
 
CUNA has offered a host of resources to aid credit unions in their outreach efforts, including a tax advocacy kit, a new website, www.DontTaxMyCreditUnion.org, and new resources to engage consumers through social media, using the Twitter hash tag #DontTaxMyCU and the Twitter handle @CUNAadvocacy.

This week's Cheney Report also includes:

• The results of last week's National Credit Union Administration board meeting, and the nomination of potential new board member Rick Metsger;

• Details from CUNA's latest Credit Union Environmental Scan (E-Scan); and

• A thank you to retiring National Credit Union Foundation Executive Director Wendell "Bucky" Sebastian.

Each Friday, The Cheney Report delivers Cheney's insights on three to four key events and policy developments affecting credit unions into the e-mail inboxes of credit union CEOs. The report also provides a valuable window into CUNA's actions on behalf of member credit unions and reinforces the value of CUNA membership.

To sign up for The Cheney Report, click the resource link below and use the "subscribe" tab on the right of the page.

Past issues of The Cheney Report are also archived on cuna.org.

WASHINGTON (5/20/13)--The Small Business Lending Enhancement Act (S. 968) would "expand access to affordable credit for small businesses and help strengthen local marketplaces that serve consumers well," the Consumer Federation of America (CFA) said in a letter to Sen. Mark Udall (D-Colo.).

S. 968, which was introduced by Udall on Thursday, would increase the credit union member business lending (MBL) cap from 12.25% of assets to 27.5%. The Credit Union National Association has estimated that lifting the MBL cap would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers.

CFA Executive Director Stephen Brobeck in the letter said increasing the MBL cap "would be particularly beneficial at this time," and would aid small businesses that "play an essential role in enhancing competition and innovation in local markets."

The CFA letter cited U.S. Department of the Treasury statistics that show 25% of credit union small business loans made in 2001 went to households with less than $30,000 in annual income. Another 20% of those loans went to families with incomes of $30,000 to $50,000, according to the Treasury statistics.

"If given greater small business lending opportunities, they will be able to invest in loans that likely will increase credit union earnings, capital contributions, and overall safety and soundness, directly benefitting all credit union members," Brobeck said.

Udall's bill currently has 14 co-sponsors. Reps. Ed Royce (R-Calif.) and co-sponsor Carolyn McCarthy (D-N.Y.) released similar legislation early this year. That bill, H.R. 688, has 94 co-sponsors.

BRUSSELS, Belgium (5/20/13)--Representatives from the European Network of Credit Unions (ENCU) and World Council of Credit Unions (WOCCU) met with European Union (EU) policymakers in Brussels on May 14-15 to advocate for several issues affecting European credit unions.

European Network of Credit Unions representatives who met with policymakers in Brussels included, from left: Anne Schneider, Policy Action; Breege-Anne Murphy, Irish League of Credit Unions (ILCU); Michael Edwards, World Council of Credit Unions; Ed Farrell, ILCU; Brian McCrory, ILCU; Pawel Grzesik, National Association of Cooperative Savings and Credit Unions (Poland); and Matt Bland, Association of British Credit Unions Ltd.  (Photo provided by the World Council of Credit Unions)

The issues include: Reasonable interpretation of Basel Committee liquidity rules; the U.S. Foreign Account Tax Compliance Act (FATCA) and related European rules; and the provision of basic current accounts to the unbanked in order to promote financial inclusion.

Regarding the Basel liquidity rules, the ENCU group met with the European Commission to urge that credit unions' deposits at banks be treated similarly to other depository institutions under the Basel "Liquidity Coverage Ratio."

Although credit unions are not subject to the ratio, Irish commercial banks have told Irish credit unions they are being classified as "non-bank financial institutions"--a category that applies to non-depository institutions--for purposes of draft European liquidity guidance. That means banks are cutting the yields they will pay on credit union demand and term deposits, said WOCCU.

This treatment under the EU's Basel liquidity rules may cost the Irish credit union movement as much as $74.4 million a year in lost income unless EU regulators clarify and grant credit unions more favorable treatment, the group said. ENCU representatives will talk to the European Banking Authority on the issue this week in London.

"We believe that there has been some level of confusion regarding classification of credit unions for Basel liquidity purposes in Ireland and possibly other member states," said Michael Edwards, WOCCU vice president and chief counsel. "We will continue to engage European authorities on this issue to seek an outcome that is satisfactory for credit unions."

ENCU members also met with European Commission representatives about the impact of FATCA on EU credit unions as it relates to European data protection regulations and the likely upcoming tax information-sharing amendments to EU directives that will create what some have called a "European FATCA."

Though the European Commission envisions the European FATCA will focus on tax information sharing within the EU, it also expects the Paris-based Organization for Economic Cooperation and Development to establish a global version of FATCA, which would apply to credit unions in all, or most, jurisdictions worldwide.

ENCU members also asked commission members to consider credit union-friendly rules on basic current accounts for the unbanked. The measures would allow credit unions to continue outreach to underserved individuals without creating undue regulatory burdens. Representatives also discussed with policymakers the EU's upcoming directive on deposit-guarantee schemes and forthcoming revisions to the EU's anti-money laundering directive.

ENCU is a network of national credit union associations in Europe and WOCCU representatives who educate and engage with EU policymakers and other stakeholders on legislation that affects credit unions. ENCU was formally established in 2010 and is based in Brussels.

DULUTH, Ga. (5/20/13)--Georgia credit unions' stability and growth in 2013 following a  five-year recession were highlighted in a feature article and sidebar in the May issue of Georgia Trend magazine.
 
"We have really weathered the storms well," Doug Foote, president/CEO of Georgia United CU in Duluth, Ga. told Georgia Trend. "It wasn't easy to do, but we came out the other end and still are as financially strong as we were going into it."
 
The credit union nearly quadrupled in size during the past 10 years--to $940 million in assets from $250 million, Foote added. Also, Georgia United saw an increase in new-auto loans of 15.4% in 2012 from 2011, and a 7.9% rise in used-vehicle loans during the same period.
 
"I'd say it's more the norm than an exceptional example," Mike Mercer, president/CEO of Georgia Credit Union Affiliates, told the publication. "People want to get safe with their money, and they view credit unions as safe. In the dot-com bubble and the real estate bubble eras, credit unions weren't looked at as all that cool. But when times get tough, people bring their money to credit unions, and a lot of this money is going into savings accounts." 
 
Mercer also mentioned efforts of the Credit Union National Association and credit unions nationwide to reduce the regulatory burden and to increase credit unions' ability to make business loans to members. 
 
U.S. Sen. Mark Udall's (D-Colo.) Small Business Lending Enhancement Act (S. 968), introduced in the Senate on Thursday, would increase the credit union member business lending cap to 27.5% of assets, from the current 12.25% (News Now May 17).
 
The Georgia Trend article also featured a sidebar interview with consumer advocate Clark Howard, who is a member of two credit unions. Because of the spread of technology in the modern financial world, Howard believes credit unions have a bright future.
 
"That's the leveler for them, the thing that really helps, because most credit unions are smaller than banks, but most all banking now is electronic," he explained. "It's the great equalizer."
 
The article also includes comments about growth and some of the attributes of credit unions from Jerry Johnson, president/CEO of Georgia Power Valdosta FCU in Valdosta, and Janet Davis, president/CEO of TIC (The Infantry Center) FCU in Columbus.

PALO ALTO, Calif. (5/20/13)--Credit unions and community banks aren't doing themselves any favors in negotiating information technology (IT) service provider contracts, according to a survey of executives about their top business concerns and management priorities.
 
Instead, community financial institutions are overpaying for one of their largest categories of non-interest expense--outsourced core processing and IT services, said "Less Burn, More Return," a report by the Business Performance Innovation (BPI) Network and Paladin fs.

The top priorities for the next 12 months of the credit union and community bank executives surveyed include increasing the size of their loan portfolios and cutting non-interest expenses.
 
Other key findings:

• The top business concern of credit unions and community banks are tight net interest margins, 79%; increased government regulation, 72%; sluggish economic growth, 54%; and greater competition from larger institutions, 33%.

• The top management priorities for the next year include growing loan portfolios, 82%; reducing non-interest expense, 63%; management new regulatory requirements, 50%;  increasing net interest margins, 37%; and adding new technologies and bank processes, 34%.

• Community financial institutions continue to add new customer-facing technologies and processes, with 90% saying they added new technologies and service in the past three years, and 74% planning to add more services in the next three years.

By restructuring their provider contracts using national pricing data, the executives can reduce costs by as much as 43%, the report said. Those surveyed with financial institutions from $500 million to $1 billion in assets saved an average of about $1 million over a five-year period when they restructured existing contracts based on national pricing data.
 
"The secret to restructuring a contract with an incumbent vendor is having the right pricing data in advance of negotiations, getting started well before the current contract expires, and negotiating a win-win agreement with the vendor," said Aaron Silva, president/CEO of Paladin fs, which worked with the BPI Network on the study.
 
"Many community banks and credit unions feel they are playing catch-up with larger institutions when it comes to technology-enabled services for customers. Mobile banking is an area of particular interest," said Silva, adding that contract restructuring can play a significant role. "By restructuring existing core processing and IT service costs, community financial institutions can effectively pay for these new service offerings."

NEW YORK (5/20/13)--A study of 24 widely issued prepaid debit cards indicates all charge fees of some kind. However, two-thirds either have no monthly fee or offer a fee waiver.
 
The fees vary widely by card and how the consumer uses it, said Bankrate.com, which conducted the survey in February. Credit union prepaid debit cards were not among those in the study.
 
"The biggest development in the prepaid card market over the past year was the entry of several large national and regional banks," said Greg McBride, senior financial analyst at Bankrate.com. Many offer cards with fixed monthly costs. "The ability to know the monthly cost in advance is valuable to consumers, particularly with the decline in free checking accounts," McBride said.
 
Only 39% of banks offer stand-alone free checking accounts. That compares with 72% of credit unions, according to a previous Bankrate.com survey.
 
In the prepaid debit cards study, 15 cards (63%) charged a monthly service fee of $3 to $9.95. Eight of these offer either a fee waiver or fee reduction, based on how much is automatically loaded onto the prepaid card.
 
Other fee findings:

• Activation fees: Two-thirds of the cards have no activation fee if purchased online, and 54% can be purchased in person with no fee. The fees are $2.99 to $14.95.

• Reload fees: None of the cards charged reload fees.

• ATM withdrawal fees: All cards charged a fee, which ranged from $1.50 to $2.75 per transaction, to withdraw from another institution's ATM. Fifteen cards have their own ATM networks. Of those, 67% charge in-network consumers between $1.50 and $2.75.

• ATM balance inquiry fees: Fifty-four percent of the cards charge this fee, which ranges from 45 cents to $1 regardless of which network the ATM belongs to. Of the remaining 11 cards, five charge this fee at some ATMs, four don't charge at all and the other two don't permit ATM balance inquiries.

• PIN/signature point-of-sale (POS)  fees:  Roughly 71% don't charge for PIN POS transactions, and two don't permit this type of transaction. The five cards with this fee charge from 49 cents to $2. Twenty of the 24 cards, or 83%, do not charge a signature POS transaction fee. Those that do, charge 95 cents to $1.

• Monthly statement fees:  Fifty-eight percent of cards charge $1 to $5.95 for monthly statements by mail, 33% don't charge the fee and 8% don't offer mail statements. None of the cards offer a statement that can be printed at an ATM.

• Bill payment fees: Twenty-two cards (92%) do not charge this fee. One assesses 99 cents for each payment and another charges $1 for bills paid via paper checks.

• Customer service fees:  Of those surveyed, 17% charge for customer service calls, with $2 the most common fee, and 88% provide at least one free call per month. Two-thirds never charge for telephone customer service.

• Declined transaction fees: Fifteen cards--63%--do not charge for declined transactions. Five (21%) assess 25 cents to $1.95 for each declined transaction. Four charge only for  transactions declined at an ATM; they assess $1 or $2.

• Inactivity fees: In the study, 29% of the cards charged an inactivity fee, ranging from $1.95 to $5.95 after 90 days of inactivity, and 71% don't charge the fee but may close the card after three to six months of inactivity.

For a list of cards with their specific fees, use the link.