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Some CUs start year with mergers

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MADISON, Wis. (1/20/11)--Credit unions nationwide continue to pool resources, with several starting the new year with mergers or merger proposals. The boards of Affinity Group CU in Pontiac, Mich., and Kensington Valley Community CU (KVCCU) in Highland, Mich., announced a merger of the two credit unions. State regulators have approved the merger and Kensington Valley members voted to create the partnership. Using the Affinity business model will allow Kensington Valley Community to continue to market the KVC brand as a part of Affinity Group CU (Michigan Monitor Jan. 17). “Our board took a serious look at the long-term prospects for our credit union and what it could offer to our members and our employees. Affinity Group was clearly the best option,” said Joseph E. Strauss, KVCCU president/CEO. The combined credit union will have assets of $134 million, 5 branches, and more than 20,000 members, the majority of whom live in southeast Michigan. Other recent mergers include:
* Members of Elgin City Employees CU, Elgin, Ill., have approved a merger with Credit Union 1 in Rantoul, Ill. (couuriernews.suntimes.com.com Jan. 19). Elgin City Employees CU has $14 million in Assets, and Credit Union 1 has $650 million in assets. * Mainstreet CU, a $259.2 million-asset credit union, based in Lenexa, Kan., completed a merger, effective Jan. 3 with Wyandotte CU, a $13 million asset Kansas City credit union. The merger is the fourth one that Mainstreet has completed in past two years. It previously merged with Free State CU, Lawrence, Kan.; Leavenworth (Kan.) Teachers’ and Community CU; and Faith Financial FCU, North Kansas City (Kansas City Business Journal Jan. 11). * Yakima (Wash.) Valley CU and Catholic CU, Yakima, agreed to a merger that is expected to be completed by June 30, at which time the new credit union name will be announced (Puget Sound Business Journal Jan. 12). The merged entity will have $460 million in assets, 50,000 members and eight branches. * The $151 million-asset Valley FCU of Montana in Billings will acquire Cody (Wyo.) Schools FCU (Billings Gazette Dec. 26). The two credit unions will run parallel operations until February or March when the transition will be completed. * Eastman CU, a $2.2 billion asset institution, based in Kingsport, Tenn., will acquire the $11 million-asset Holston Valley CU “on a tentative spring timeline, ” Gary Tucker, Eastman senior vice president government /public relations, told News Now. * Ascend FCU, Tullahoma, Tenn., a 1.35 billion asset credit union acquired $3 million-asset Co-Op Employee CU, LaVergne, Tenn., Dec. 4., the credit union told News Now. * Affinity Plus FCU, a $1.28 billion asset credit union in Saint Paul, Minn., had a pending acquisition approved of Como Northtown Community FCU, the credit union told News Now.

Kroll launches new MBS bond rater

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NEW YORK (1/20/11)--Jules Kroll has created Kroll Bond Ratings Agency Inc.--a new competitor for the Big Three credit rating firms of Standard &Poor’s, Moody’s Investors Service and Fitch Ratings. Kroll created the new firm in in 2004. The company has provided financial strength ratings to banks and credit unions and others through a boutique ratings company called LACE Financial--which it acquired in August. Wednesday was the first day it began rating individual securities through Kroll Bond Ratings (Dow Jones Newswires Jan. 19). Then new agency promises a more forensic approach to assessing risks of mortgage-backed securities and other structured -finance transactions, Dow Jones said. The exiting rating agencies avoid doing due diligence, Kroll, 69, said to Dow Jones, referring to the three better-known rivals: Standard & Poor’s, a unit of the McGraw Hill Cos.; Moody’s Investors Service (MCO); and Fitch Ratings, a subsidiary of Fimalac SA of France. The new firm has hired 30 people and plans to add 20 more, eventually expanding outside the U.S., starting with London and either Hong Kong or Singapore, Dow Jones said.

Resource One CU loans thriving

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FARMERS BRANCH, Texas (1/20/11)--Some financial institutions are struggling with loan losses, but one Texas credit union is working overtime to keep up with the loan demand. The $309 million-asset Resource One CU, Dallas, said its loan demand has increased, eclipsing a goal of netting consumer loans by $1 million in one month. Its success is due to several simple solutions and incentives. “One of the more successful methods of increasing loan activity has been through basic promotion in our branches and in mailings to our members,” Mike Roark, chief lending officer of the credit union, told the Texas Credit Union League Lone Star Leaguer Jan. 13). “We found a lot of positive feedback in our reinforcement of a campaign that alerted visitors, ‘If your car isn’t financed with Resource One, you’re probably losing money.’” One way Resource One CU keeps its loan activity thriving--and its membership happy--is by offering its members options to assist in loan maintenance, such as its successful skip-a-payment program. Borrowers are offered the opportunity to skip a payment for their loans up to twice a year or five times total for the duration of the loan, said Roark. “By allowing that flexibility with the member and ensuring them that the credit union understands there are going to be unexpected occurrences in life, our members in turn reflect their positive experience and membership through their continued account activity and even by recommending our institution to their friends and family who may not currently be members,” he added. Another loan option designed for special credit needs, the Credit Builder Loan, has been so popular that it’s being offered to other members who may not have previously qualified. Under this program, the credit union advances the proceeds of the loan into a savings account and then puts that amount on hold until the members pays the loan. “This helps establish a pay history for our members,” Roark said, “and it turns out this type of loan has been beneficial for every type of member, regardless of class or background.” However Roark also credits the hardworking staff at the credit union’s branches. “It’s customary for our managers to visit tellers within their branches on a periodic basis and ask them how many loan referrals they have recently made,” Roark told the league. “It reinforces the importance of putting the member first in their needs, though we also experienced a significant increase in activity when we ran a promotion offering $5 for every application the teller would send the lending department, regardless of whether it was approved or not.” When it comes to the future of keeping its loan programs on the rise, Resource One CU has its focus on offering members more. “Don’t be afraid of a little delinquency,” Roark advised. “Offer more loan opportunities for every type of member and remember that the extra effort and time your employees put in is worth every incentive.”

Small CU roundtable to meet at GAC

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MADISON, Wis. (1/20/11)--Small credit unions will have the opportunity to discuss critical issues during a free, half-day Roundtable meeting at the beginning of the Credit Union National Association's (CUNA) 2011 Governmental Affairs Conference (GAC). The first-ever CUNA Small Credit Union Roundtable will convene from 1 p.m. to 5 p.m. ET on Sunday Feb. 27, the first day of the GAC, with three panels focusing on key small credit union issues, said Frank Michael, CEO, Allied Credit Union (Stockton CA) and Chair of CUNA's Small Credit Union Committee. CUNA President/CEO Bill Cheney will address the group during the course of the Roundtable discussion. The panels will include the views of research experts, service providers and small credit union professionals as well as open forum discussion among attendees. The panels include:
* The Collaboration and Cooperation Roundtable panel, including George Hoffheimer, chief research officer at the Filene Research Institute and Lucy Ito, senior vice president of credit union growth/development at the California and Nevada Credit Union League. They will be joined by several credit union managers and will facilitate discussion of collaborative efforts aimed at reducing redundancies and gaining efficiencies. The dialogue is likely to include examples of credit unions collaborating with one another, as well as collaborations and cooperation between credit unions and non-credit union entities such as cooperatives and community groups. * The Regulatory Compliance panel, featuring Kathy Thompson, CUNA senior vice president and associate general counsel for compliance and legislative analysis; Jennifer Simmons, interim league president of the Maryland and District of Columbia Credit Union Association; and Joetta Heck, credit union compliance expert and CEO of Kemba Charleston FCU, Charleston, W.Va. They will facilitate discussion of issues such as the compliance burden and what might be done to alleviate that burden, reducing compliance costs, and identifying and using compliance resources. * The Open Forum, including Jamie Chase, principal and instigator of goodness at CU Strategic Planning, and Bob Hoel, senior scholar at the Filene Research Institute and professor emeritus of business at Colorado State University, Fort. Collins, Colo. The Open Forum will address a variety of issues brought up by Roundtable participants, such as succession planning, strategic planning, grant writing, compensation issues and corporate stabilization.
Other panelists will be announced later. The event, sponsored by CUNA Mutual Group, will be recorded and placed on CUNA's website after the conference. So far, 150 people have registered for the free Roundtable and CUNA has moved the meeting to a larger room to accommodate additional registrants, Michael told News Now. Small credit union professionals interested in attending the Roundtable must separately register for the event during their GAC registration process. To do so, simply check the appropriate box on the GAC registration form. There is no additional charge to attend the Roundtable event. Those from credit unions with $35 million or less in assets can attend the GAC at the reduced rate of $450. Small credit unions that have already registered for the GAC and would like to register for the Roundtable can e-mail Kim Martin at kmartin@cuna.coop. The GAC will be held Feb. 27-March 3 at the Washington Convention Center.

CU System briefs (01/19/2011)

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* HARRISBURG, Pa. (1/20/11)--Christina Mihalik, left, Pennsylvania Credit Union Association vice president, government affairs and Big
Sister of Kristiana Walker, front, is shown with the state's 46th governor, Tom Corbett, third from right, and his wife Susan during the couple's visit to Big Brothers Big Sisters of the Capital Region. The visit took place on inauguration day Tuesday (Life is a Highway Jan. 19). The inaugural ceremony at the state Capitol was attended by more than 1,000 supporters, including association staff. Corbett said he would rein in state spending, enact government reforms and "do the right things, for the right reasons, even in the most challenging of times." He promised not to shrink from challenges in setting a new course "where financial security leads us to prosperity and greatness." (Photo provided by the Pennsylvania Credit Union Association) … * NEW YORK (1/20/11)--CUNA Strategic Services provider Fynanz Inc. has hired two senior managers to assist in providing customized private student lending solutions for credit unions. Raymond Dury is Fynanz's new chief information officer (CIO) and Kailash Mathur is senior vice president of operations. Dury, who served as executive vice president and CIO for Fifth Third Bank, has 18 years' experience in corporate and retail banking, capital markets, merchant processing and brokerage services. Mathur, formerly chief operating officer of Campus Door, a private student loan origination platform acquired by Lehman Brothers, has 20 years' experience in student lending, product development, risk pricing, underwriting processes, origination platforms and third-party agreements and relationships … * REGINA, Saskatchewan (1/20/11)--Members of Regina, Saskatchewan-based Conexus CU will vote on a proposed merger with Innovation and Synergy CUs at special membership meetings throughout the province next week. Votes will be from Jan. 24-26. Innovation and Synergy CUs began a series of meetings Tuesday and will conclude those Jan. 26. Results of the vote at each credit union will be announced after Jan. 26 (Saskatchewan News Network Jan. 18) …

Two belt-tightening-tips columns point to CUs

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MADISON, Wis (1/20/11)—Two personal finance columnists have advised consumers to seek out credit unions and the Credit Union National Association to save money when shopping for financial services. Journalist and author Jean Chatzky advised consumers to consider a credit union card to avoid impending high bank fees in her online newsletter, Making Money Make Sense. Chatzky pointed consumers to CUNA’s website at www.cuna.org to find a credit union where they are eligible. Consumers looking to get back on track financially can also get help from credit unions and CUNA, advised Jason Alderman in New Jersey Today (Jan 18.) The article, “Feeling the Pinch? Try These Belt-Tightening Tips,” counseled consumers to switch to free checking, and directed them to CUNA’s website.