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CU Poinsettia Bowl makes the comics

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MADISON, Wis. (1/5/09)--A credit union’s sponsorship of a college football bowl made a national comic syndicate last week, appearing in The Washington Post, The Wisconsin State Journal, and other newspapers Thursday. The comic, “Real Life Adventures,” by Lance Aldrich and Graham Nolan, featured a husband and wife having a conversation about what was on television that day. The wife asked her husband what he was watching, and he replied, “The San Diego County Credit Union Poinsettia Bowl.” She said, “Wow, sponsor naming rights seem to have gotten cheaper.” He responded: “Oh good! The ‘Ms. Laub’s 3rd grade class Flax Bowl’ is on next.” The San Diego County Credit Union Poinsettia Bowl was Dec. 23. The credit union has sponsored the bowl since 2005, the first year it was held (News Now Dec. 6, 2005). San Diego County CU has $4.2 billion in assets. To see the comic, use the link.

Regulator Data breaches cost Maine FIs 2.1 million

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AUGUSTA, Maine (1/5/09)--Credit unions and banks in Maine incurred $2.1 million in combined expenses from two large data breaches in 2007 and 2008, according to a report from Maine’s Bureau of Financial Institutions. The “Maine Data Breach Study” reveals the impact a large-scale data breach has on Maine banks, credit unions and their customers,” said Bureau Superintendent Lloyd P. LaFountain III. Since 2007, two major data breaches affected Maine’s financial institutions—the TJX Cos. data breach announced in January 2007 and the Hannaford Bros. breach announced last March. LaFountain reported that 75 financial institutions—50 credit unions and 25 banks—responded to the survey. Of those, 71 institutions reported they were affected by at least one data breach since Jan. 1, 2007. The Hannaford breach, which involved a grocery store chain based in New England, affected the most institutions surveyed—71. It also compromised the greatest number of account holders--243,599—and was responsible for the largest dollar number in expenses--$1.6 million. More than 186,885 cards were reissued in that breach, said the agency. The TJX Cos. breach, which involved the Massachusetts based company’s retail stores such as Marshalls, affected 52 credit unions and banks and 64,825 accounts and cost $485,245. It resulted in Maine institutions reissuing 54,737 cards. Other breaches affected 18 institutions and 8,000 accounts and cost $62,760, with 4,857 cards reissued. Of the 71 credit unions and banks with compromised accounts, 25 reported unauthorized or fraudulent transfers. In one case, the unauthorized activity involved only one account. But in most instances, fewer than 25 accounts were compromised.

Filene looks at CU brand identity

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MADISON, Wis. (1/5/09)--Credit unions should strategically position their brands with a focus on emotional rather than functional qualities, enact brands by making simple connections for members and non-members about what it means, and build local brand communities, according to the Filene Research Institute. Filene, with the help of Larry Compeau, Clarkson University, recently released “The Credit Union Brand: What Is It Good For?” In the report, Compeau uses targeted in-depth interviews with credit unions, members, and employees across the U.S. The report indicates that except for long-tenure members who may have helped build their credit union, credit union members tend not to differentiate credit unions from banks. One point of differentiation for members is that credit unions are “a little more personal” but “not as sophisticated” as banks, the report said. Members also hold a strong brand identity of their individual credit union, describing it as reliable, friendly, helpful and informative. Employee perceptions of a credit union brand identity are weaker than member perceptions. For more information, use the link.

Loans outpace savings despite recession

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MADISON, Wis. (1/5/09)--Credit unions’ loan growth for November outpaced their savings growth, an anomaly given the recession, according to a Credit Union National Association (CUNA) economist interpreting CUNA’s Monthly Credit Union Estimates.
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Loans for the month grew 7.5% over November 2007, while savings grew 6.7% during the same period. “For a recession, that’s unusual,” Steve Rick, senior economist at CUNA, told News Now. “Typically people retrench and pay down their debt. This is an aberration, likely caused by banks’ tightened lending strategy. The aberration will continue as long as banks don’t have an appetite to lend,” Rick said. The loan growth is good news, he said, adding, “Credit unions are still making loans. It’s better to put the money in loans than in short-term instruments.” Still, loans in a recession mean more delinquencies. “Delinquencies jumped 10 basis points (b.p.) from the previous month and 39 b.p. over a year ago,” Rick said. The increase “is directly related to job losses. We’re losing jobs at an accelerating pace and it will get worse throughout the year.” New-auto loans are still in the tank with the biggest decline in more than 20 years, he said, noting low consumer confidence as a key factor. However, “used-auto loans picked up significantly from last year.” Rick said that during the credit crunch, the banking sector is shunning used-auto loans. Home-equity loans turned around in the last year, up 11% year-to-date, compared with a minus 1.6% for the same period in 2007. “This is unusual because falling home prices are wiping out homeowners’ equity, but the interest rates are so low, some homeowners are using home-equity loans to finance their spending. They’re down to the very last remnants on their balances and we’ll see more people hitting a ceiling in their borrowing limits,” Rick said. These loans are taking business from credit unions’ credit card portfolios. “Credit card growth is anemic, with growth at 3.9% year-to-date, a significant turnaround from the 9.3% for the same period last year. People are paying off their credit cards because they’re worried about jobs, debt and deleveraging,” he said.
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Rick noted that credit union borrowing is at $42 billion, a 67% increase from the $25 billion last year. “Credit unions want to keep increasing their liquidity,” he said. As for savings growth, money markets were the fastest growing savings vehicle--up 14%. “Everyone wants their money to be liquid rather than be locked up in certificates of deposit (CDs),” Rick said. With the falling prices in the stock market, depositors want safety. “In the Safety, Liquity, Yield (SLY) equation, savers want return of their capital, not return on their capital. Right now in the SLY equation, safety and liquidity are dominant,” Rick told News Now. Use the link to access the Monthly Credit Union Estimates for November.

WOCCU welcomes Ghana Seychelles as new members

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MADISON, Wis. (1/5/09)--The Ghana Co-operative Credit Union Association (CUA) and Seychelles CU have joined the World Council of Credit Unions (WOCCU). The WOCCU board approved membership for both African organizations, effective Monday, in San Diego in November. The board also approved the transfer of WOCCU's Australian membership from current member Cuscal Ltd., a wholesale provider of capital, liquidity and financial services products, to ABACUS, the trade association for Australian credit unions and mutual building societies. The change, effective Monday, coincides with the retirement of John Gilbert, Cuscal president/CEO, who will end his tenure as a WOCCU director. Gilbert's WOCCU board position will be assumed by Louise Petschler, ABACUS CEO. “We're very pleased with our continued growth and our ability to serve more members in Africa, one of the world's fastest-growing credit union markets,” said Pete Crear, WOCCU president/CEO. “Along with the changes in Australia, our new members reflect a continued strengthening of the global credit union market and its increased ability to serve even more people worldwide.” CUA, founded in 1968, had previously been affiliated with WOCCU through its membership in ACCOSCA, the African regional credit union confederation. CUA has 322 member credit unions that serve 242,000 individual members throughout Ghana and hold $107 million in total assets. CUA's acceptance as an independent WOCCU member marks a major step forward for the association's development, according to Emanuel Darko, CUA's general manager. “The dream of CUA's board of directors and management was to become a member of World Council of Credit Unions,” Darko said. “I am sure the board, management and the entire membership of Ghana's credit union movement will welcome the good news with great joy.” Seychelles CU serves inhabitants of the Seychelles islands off Africa's eastern coast and is the country's only credit union. It serves 10,620 members and has $8.7 million in assets. The institution also serves as the de facto national credit union association for WOCCU membership. Representatives from CUA, Seychelles CU and ABACUS will be introduced and given the opportunity to speak to delegates at WOCCU's next annual general meeting, to be conducted with the 2009 World Credit Union Conference, July 26-29, in Barcelona, Spain.

REAL Solutions reaches 30 states a year early

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WASHINGTON (1/5/09)—A year ahead of schedule, REAL Solutions--the signature program of the National Credit Union Foundation (NCUF)--is reaching credit unions in 30 states.
NCUF Executive Director Steve Delfin presents REAL Solutions’ Steer Clear report to the Credit Union Advisory Board of Enterprise Car Sales, a corporate supporter of NCUF. (Photo provided by the National Credit Union Foundation)
“As millions of consumers faced an uncertain economy in 2008, REAL Solutions became an even more critical strategy,” said NCUF Executive Director Steve Delfin. “The program has evolved beyond products and services. REAL Solutions is now a documented business strategy for credit unions to grow their memberships by serving the underserved.” State credit union leagues surveyed “strongly agree” that “REAL Solutions is a valuable program for leagues.” Nearly all reported that it helps credit unions serve members with “low wealth.” Low-wealth members include people with low income or modest means, and those with moderate and middle incomes who are struggling to save and build assets. Cornell University in a Filene Research Institute report concluded, “The REAL Solutions initiative illustrates the type of strategy credit unions could adopt to successfully engage the underserved financial market.” (News Now Aug. 4, 2008). The Credit Union National Association (CUNA) Membership Growth Task Force last year released recommendations to “assist credit unions in reaching out to new markets.” The task force recommended “encouraging credit unions to develop more community partnerships, encouraging more participation in REAL Solutions, and continuing advocacy efforts aimed at legal and regulatory changes to make service to new markets easier.” (News Now July 2, 2008). “The most successful services are not only affordable for consumers, but also sustainable for credit unions,” said REAL Solutions National Program Director Lois Kitsch. “Sustainable services become a permanent part of credit unions’ business plans--as opposed to ‘loss leaders’ that must be limited in volume or subsidized by other parts of the credit unions’ operations.” The American Association of Credit Union Leagues (AACUL) leveraged the REAL Solutions brand when designing the REAL Deal, a new outreach initiative advanced by AACUL with CUNA and NCUF. REAL Solutions became an integral component of the first REAL Deal outreach framework model: Among the most popular REAL Solutions services chosen by credit unions and leagues:
* Payday Loan Alternatives--In 2008, more than 200 REAL Solutions credit unions disbursed $70 million in payday loan alternatives to more than 25,000 members. REAL Solutions credit unions aim to provide the loans as alternatives for borrowers who pay more than 300% annual percentage rate (APR) at payday lenders. Borrowers who received payday loan alternatives from REAL Solutions credit unions saved about $8 million in interest and fees. Many members paid off their credit union loans without rolling them over. * Voluntary Income Tax Assistance (VITA)--Nearly 100 REAL Solutions credit unions provided volunteer income tax assistance in 2008. VITA sites help workers who earn under $42,000 apply for Earned Income Tax Credits. By offering free tax preparation, free electronic filing, and free refund deposits, REAL Solutions credit unions saved low-income tax filers about $20 million. REAL Solutions credit unions also steered many tax filers away from costly refund anticipation loans (RALs) promoted by for-profit tax preparers. This saved tax filers from RAL rates as high as 2,000% APR. * Non-Prime Auto Loans--Nearly 92% REAL Solutions credit unions offer non-prime auto loans to help borrowers with low-to-moderate incomes, low credit scores, and thin credit files afford used cars. NCUF released its first research report, Steer Clear: How Credit Unions Help Car Buyers Avoid Predatory Loans, which demonstrated how credit unions could gain a sustainable share of the non-prime market where eight million used cars are sold each year.

CU System briefs (01/02/2009)

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* MADISON, Wis. (1/5/09)--UW CU, Madison, Wis., raised more than $1.5 million toward educating students in the University of Wisconsin System and Madison Area Technical College. The campaign ran from Oct. 1 to Dec. 31 and included the campuses served by UW CU locations in Madison, Milwaukee, Green Bay, Whitewater and Stevens Point. The funds are being placed in a permanent endowment to help students who can’t afford school. The scholarships will be based on financial need ... * HONOLULU (1/5/09)--The National Credit Union Administration (NCUA) approved the merger of Aloha Pacific FCU and Inter-Island FCU, which will result in a credit union that has more than $485 million in assets (Pacific Business News Dec. 31). Inter-Island’s accounts will be converted to Aloha Pacific’s during the next couple of months. Inter-island has $10 million in assets and one branch. Aloha Pacific has $475 million in assets and five branches ... * HARRISBURG, Pa. (1/5/09)--Keystone FCU, West Chester, Pa., has opened three student branches in three West Chester High Schools (Life is a Highway Jan. 2). Students can interview for jobs as tellers at the branches, which opened Dec. 10. West Chester High School business classes also will participate in financial literacy education with seminars led by West Chester School District faculty and Keystone FCU guest speakers ...