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CSS provider study: Reg environment dents CEOs' optimism

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AUSTIN, Texas (1/11/13)--Credit union CEOs are more pessimistic about 2013 than they were about 2012, largely due to an increasingly difficult and unpredictable regulatory environment, according to a survey from Abound Resources, an alliance provider of CUNA Strategic Services (CSS).

Other major issues included a weak economy and loan demand. Both of these factors were mentioned by more than 60% of credit union CEOs surveyed as major concerns for 2013.

"This year credit union CEOs are decidedly more pessimistic than they have been since we launched our annual survey four years ago," said Brad Smith, president/CEO of Abound Resources, a credit union consulting firm.

Roughly 25% of respondents reported they were either very or somewhat pessimistic about their credit union's outlook  for 2013. That compares with 16% in 2012 who were pessimistic and none who were very pessimistic. About 37% in 2013 said they were optimistic or very optimistic, compared with 43% in 2012. The other 38% indicated they expect another year like 2012.

Other key findings:

  • Increasing consumer loans, expanding online presence and improving sales and marketing methods were the top three priorities CEOs cited as growth priorities for 2013.
  • Interest in increasing member business loans and mortgage loans jumped considerably this year, with CEOs searching for higher yields and portfolio diversification.
  • Operating priorities were consistent with surveys of past years, with the primary focus on streamlining workflows and increasing operational and technology efficiencies.
Expect 2013 to be the year of credit union workflow improvements, with 50% citing this as a priority, said Abound Resources. 

"There is a built-up demand for improving credit union workflow since so few credit unions made workflow improvements last year," said Smith. "Workflow improvement projects are tricky as middle management is often resistant to changing how they work, or they don't know how to make changes beyond a few tweaks."

For a complimentary copy of the survey and Abound's top five recommended strategies, use the link.

CU System briefs (01/11/2013)

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  • FARMERS BRANCH, Texas (1/11/13)--The Texas Credit Union League has created an online Hispanic Outreach Forum so credit unions in the state can share their Hispanic outreach best practices. The league's newsletter, LoneStar Leaguer (Jan. 10), said member credit unions will need their username and password to access the forum on its website. The forum was the recommendation of the league's International Relationship Committee, chaired by Gary Williams, president/CEO of Unity One CU, Fort Worth. Vice chairman of the committee is Robert Peterson of OneSource FCU, El Paso …
  • TUSCALOOSA, Ala., and SOUTH BEND, Ind. (1/11/13)--A challenge between Tuscaloosa,Ala.-based Alabama CU and South Bend, Ind.-based Notre Dame FCU has resulted in a $10,000 donation to Alabama CU's Secret Meals for Hungry Children. The challenge involved finding out which credit union could generate the most credit card applications in advance of Monday night's Bowl Championship Series game. Alabama CU generated 355 applications to Notre Dame's 331 (Tuscaloosanews.com Jan. 10). The Secret Meals program will feed 65 hungry children for a year, said Alabama CU President Steve Swofford. Notre Dame FCU's charity of choice was Kelly Cares Foundation, established by Notre Dame football coach Brian Kelly and his wife, Paqui ...
  • WESTBURY, N.Y. (1/11/13)--NEFCU, based in Westbury, N.Y., has launched a new website, CUShine,  targeted at 18- to 26-year-olds. The site provides information on how young adults can better manage their financial futures. It is "the latest addition to our financial literacy outreach program," said Valerie Garguilo, vice president of marketing and community relations at the $1.9 billion asset credit union. Students at the Frank G. Zarb School of Business at Hofstra University will create the site's content with a Gen Y perspective. They will blog and create videocasts for members who are starting careers, working on a degree and becoming financially independent …
  • WYANDOTTE, Mich. (1/11/13)--Wyandotte (Mich.) FCU has changed its name to NuPath Community CU, as of Jan. 2. It also has switched to a new state credit union charter. It can now serve anyone living, working and worshipping in Allegan, Kent, Monroe, Ottawa and Wayne counties (Wyandotte.patch.com Jan. 10). NuPath Community CU, which services about 110 select employee groups, is also celebrating its 75th anniversary this year. The $90 million asset credit union was established in 1938 by 25 employees of Michigan Alkali as Michigan Alkali Employees CU. It also has an office in Holland, Mich. …

CUNA: Youth Week is 'golden moment'

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MADISON, Wis. (1/11/13)--Credit unions can build the strength of their overall portfolios by attracting young members, according to Joanne Sepich, Credit Union National Association (CUNA) youth week coordinator.

National Credit Union Youth Week, April 21-27, is another opportunity to build that strength.

National Credit Union Youth Week was created by CUNA as an opportunity for credit unions nationwide to focus on the financial needs of young people and provide financial literacy education. The event focuses on teaching the benefits of saving and goal setting, and invites youth to open savings accounts at their credit union and make deposits throughout the year.

This year's theme, "Savings Sleuth: Solve the Mystery," will draw in youth (and adults) with the fun of mystery and mustaches. There's a "Collect the Clues" kit of clue posters and activity sheets credit unions can pair up with prizes.

Savings Sleuth: Solve the Mystery materials include financial education content, fun items to reward young members and bright, neon-colored apparel to dress the part in April. Several items from last year's campaign were successful enough to have been carried over to the 2013 line-up, including the magic color-changing mood cup and the Quarter Saver Folder, which holds $5 in quarters and boasts a positive message on saving.

Gaining young members and keeping them through the lifetime product cycle is a worthy goal for the future, but it's parents and grandparents who deliver children to branch locations, Sepich wrote in a column on CUInsight (Jan. 10).

"This is a golden moment," Sepich said. "If the child has a nice experience in the branch and walks out with prize, a treat, and a savings account, you've scored two huge wins. That child has started the path of lifelong membership, and that grown-up's loyalty to your credit union has just soared."

April is Financial Literacy Month, Sepich noted. She recommended credit unions work this to their advantage by rewarding each adult who brings in a child to make a deposit. Rewards could range from budget-  or college-savings planning tools to a discount on loan fees.

Because National Credit Union Youth Week occurs during Financial Literacy Month, credit unions can extend their youth activities throughout April. CUNA conducts the National Youth Saving Challenge the entire month of April. The challenge rewards 10 savers with $100 cash prizes. Last April, 241 credit unions joined the Saving Challenge and engaged 125,867 youth, who deposited a collective $21.3 million in their credit union savings accounts, including 7,300 new member accounts.

In 2000, The Jump$tart Coalition for Personal Financial Literacy began promoting April as Financial Literacy for Youth Month. In 2003, the U.S. Senate designated April as Financial Literacy for Youth Month.

NY foundation awards nearly $46K in 2012 grants

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ALBANY, N.Y. (1/11/13)--The New York Credit Union Foundation awarded $45,953 in grants to New York credit unions and credit union supporters during 2012.

The grants were awarded in three categories: Smart Money, Financial Fitness and Professional Development.

Smart Money grants help credit unions provide financial education to their members and/or consumers. A total of $3,750 was awarded to three credit unions:

  • ServU FCU, Painted Post;
  • Westar FCU, Camillus; and
  • Cooperative FCU, Syracuse.
Nine credit unions received a total of $12,111 in Financial Fitness grants to enhance operations and improve service to their members. They are:

  • Greece Community FCU, Rochester;
  • GRS Employees FCU, West Henrietta;
  • MPO FCU, Middletown;
  • UHS Employees FCU, Johnson City;
  • Mount St. Mary's Hospital FCU, Lewiston,
  • Erie County Employees FCU, Buffalo; 
  • SUNY Geneseo FCU, Geneseo;
  • NYU FCU, New York; and
  • St. John's Buffalo (N.Y.) FCU.
The foundation awarded 57 Professional Development Grants, totaling $30,092, to representatives of 30 credit unions to help fund their participation in industry training sessions and education events.

Three more CUs announce loyalty rewards, rebates

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MADISON, Wis. (1/11/13)--Call it patronage dividends, loyalty rewards, or cashback rebates--either way, members win.  Three more credit unions have announced they're paying members back for their business.

"We believe that when the credit union is successful, it's not only a sound business practice to reward the owners of the credit union and share our surplus, but that this practice clearly demonstrates the credit union difference," said David Ackerman, president/CEO of U$X FCU, $204 million asset credit union in Cranberry Township, Pa.

U$X FCU's 2012 Member Loyalty Reward payout totaled $420,000. The interest rebate goes to members of good standing with deposit or loan accounts,  except for certain mortgages (Life is a Highway Jan. 8). 

"Unlike many financial institutions, when U$X FCU has a successful year, we distribute part of the earnings to the people whose loyal support helped us be successful," Ackerman said.

The credit union has more than 20,075 members. Its rebate equaled six cents per dollar of dividends earned and/or loan interest paid during 2012. It has paid more than $6.6 million during the past 11 years.

In Schaumburg, Ill., Motorola Employees CU (MECU), with $889 million assets and 39,180 members, paid a special patronage dividend totaling $750,000 on Dec. 31--the third consecutive year MECU has returned profits to members.  The latest dividend is in addition to regular dividends it pays into members' savings accounts.

All active members in good standing received at least $5 in their MECU savings accounts. The dividend averaged about $19 each, with members who made the greatest use of the credit union's services receiving an average $86.

OMNI Community CU, Battle Creek, Mich., announced its fifth annual Cashback Rebate will be deposited today in members' regular savings accounts (Michigan Monitor Jan. 2). Since the $290 million asset credit union started its rebate program in 2008, it has returned $4 million to members.

"Without their faith that we're always looking out for their best interests, we wouldn't be the institution we are today," said OMNI CEO Ted Parsons.  "That's a responsibility that everyone at OMNI takes very seriously. Our membership is the best out there, and every time we help someone, we're trying to show them why they made the right decision coming to us."

Ohio CUs' 3Q financials post record loans

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COLUMBUS, Ohio (1/11/13)--Ohio credit unions posted record results in loan originations in the first three quarters of 2012, according to the most recent Ohio Credit Union Quarterly Performance Summary published by the Ohio Credit Union League.

The credit unions also increased their core deposit balances and saw robust membership growth (eLumination Newsletter Jan. 9).

"The Ohio membership growth experience is something we're seeing at the national level as well--consumers (both borrowers and savers) are moving to credit unions--voting with their feet and discovering that credit unions are the best choice for their financial services," Mike Schenk, vice president of economics and statistics at the Credit Union National Association, told News Now

"In the year ending September 2012, credit union memberships grew by 2.5 million--a 2.7% rate of growth," he added. "The percentage increase compares to a U.S. population growth rate of a bit less than 1% over the same period. Credit union membership growth--both in absolute and percentage terms--is the fastest we've seen in roughly 15 years."

Ohio credit unions' financial performance was in line with, or better than, many national trends, the league said. They originated more than $1.6 billion in first mortgages, a 68.8% increase over mortgages in the first nine months of 2011, helping drive total loan originations up 33.5%.

Core deposits drove shares' increase at a faster rate than the national average, with a 9.6% annual increase in regular savings accounts, the league added.

Ohio membership continued to increase, with the addition of more than 39,000 members in 12 months.

CU supporter to chair Ohio Senate Finance Committee

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COLUMBUS, Ohio (1/11/13)--Ohio State Sen. Scott Oelslager (R-Canton), a friend of credit unions, has been named chairman of that chamber's Finance Committee, according to the Ohio Credit Union League.

The Finance Committee leads the Senate's role in the state's biennial budget process.

Oelslager was a joint sponsor of past legislation to grant credit unions access to public funds, said the league (eLumination Newsletter Jan. 9).

Sens. Jim Hughes (R-Columbus) and Kevin Bacon (R-Columbus) will lead the Senate Insurance and Financial Institutions Committee, which will preside over most legislation relating to financial services, including banking and credit union issues.

Hughes and Bacon have good relationships with credit unions and have always been willing to meet and discuss issues, the league said.

State Sens. Tim Schaffer (R-Lancaster) and Bob Peterson (R-Sabina) will preside over the state's Ways and Means Committee, which the league expects will review the state's sales and use tax exceptions.  Schaffer and Peterson also have been willing to meet with credit union leaders. They have worked on issues of interest to credit unions, but neither have taken a position on major issues specifically affecting credit unions, said the league.