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Prize-linked savings, public deposits top CUANY legislative agenda

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ALBANY, N.Y. (1/23/14)--Prize-linked savings, expanded fields of memberships and public deposits are at the top of the legislative agenda for the Credit Union Association of New York in 2014.
This is the first article in a News Now series that will explore legislative priorities for various credit union leagues nationwide.
Two bills that passed both the Senate and Assembly but were vetoed by Gov. Andrew Cuomo are the first priorities for CUANY heading into 2014, said Michael Lanotte, CUANY senior vice president/general counsel.
In 2013, CUANY introduced legislation that would authorize credit unions to offer prize-linked savings to their members. The legislation was vetoed by Cuomo over concerns that some of the language violated the state constitution. Lanotte said the league has worked closely with Cuomo's office and the appropriate state agencies to clarify the language. "The governor's office wants to see it happen, and we have commitments from both of the bill's original sponsors," Lanotte told News Now. "We expect it to become law in 2014."
The league also helped pass legislation that would expand the fields of membership and investment powers for state-chartered credit unions, a measure that was also vetoed by Cuomo. That bill requires language that the state regulator's authority is not being diluted in any way, Lanotte said. "Obviously, that was never our intention," Lanotte said.
The field of membership/investment powers bill passed through the Senate and Assembly despite bank opposition, Lanotte said. "I'm sure the banks will ramp up their opposition with the bill having to go through the legislature again," he added.
Also in play are two pieces of legislation that would give credit unions access to public deposits. The first bill would create a credit union state funds deposit program. In 2013, legislation was introduced that would establish a program allowing the State Comptroller to deposit up to $250 million of state funds into credit unions across the state.
"It's a separate line item where the state would put aside separate funds so it wouldn't detract from deposits that the state would make in other institutions," Lanotte said. "It would actually complement an existing state program that was recently put in place for the community banks in New York state."
In 2013, the legislation was approved by both the Senate and Assembly Banks Committees and advanced to the Senate Finance and Assembly Ways and Means Committees.
A second municipal deposits bill was also introduced in both the Senate and Assembly that would allow all credit unions to accept up to $250,000 in deposits per local government. The legislation was reported to the Senate Local Government Committee and Assembly Banks Committee.

"We've actually cited that the New York state law that limited our local government to only working with commercial banks was created in 1909, so clearly it is outdated," Lanotte said. "Giving the banks a monopoly takes choice away from local governments. It's extremely important to us to push this for our state's credit unions."
CUANY also seeks to pass legislation that would increase the penalty for credit union robberies conducted by demand note. Since the recession, there has been an increase in robberies in which the perpetrator will pass a note demanding money but will not display a gun, Lanotte said. The league would like to see legislation passed that would increase the penalty in the hopes of deterring these types of robberies. "It's a matter of safety for our employees and easing the emotional impact to both staff and members," Lanotte said.
The demand-note legislation passed the Senate and was pending consideration in the Assembly Banks Committee.

CU System briefs (01/23/2014)

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  • WEST JORDAN, Utah (1/23/14)--Mountain America CU was named one of the 50 most engaged workplaces in the U.S. by San Francisco-based human resources software company Achievers. The distinction, which is given to firms that engage their employees in outstanding ways, was awarded by a panel of 14 experts on employee management. The eight criteria considered by Achievers are communication, leadership, culture, rewards and recognition, professional and personal growth, accountability and performance, vision and values, and corporate social responsibility. "Having employees who understand the importance of being engaged in what they do is very important to us," said Lynn Stephens, the credit union's senior vice president of human resources. Based in West Jordan, Utah, Mountain America CU more than $3.5 billion in assets and 420,000 members in five states. ...
  • PARMA, Ohio (1/23/14)--A Catholic credit union in Ohio is attempting to mimic Pope Francis with a new loan promotion. Unity Catholic FCU, Parma, decided to offer special rates on motorcycle loans and promised to make donations with every deal in honor of Francis' plans to auction a Harley-Davidson motorcycle that he received. "With each motorcycle loan we do, we're following our own mission of helping members save money with this low rate," said Tamlyn Schervish, CEO of the $70 million-asset credit union. "And we're giving back to those in need with $100 per loan for area food banks." The credit union said that the donations will go to the community where the member who opens the line of credit lives. Pope Francis was given a Harley-Davidson Dyna Super Glide last year by the company, as part of its 110th anniversary celebrations. The money made by auctioning the personalized motorcycle will go to a Catholic charity in Rome called Caritas Roma, which operates a hostel and a soup kitchen. ...
  • RALEIGH, N.C. (1/23/14)--State Employees CU employees chipped in a record $78,000 to the 2013 North Carolina State Employees Combined Campaign. The Raleigh, N.C.-based credit union's staff gave 9% more than it did in 2012 to the statewide public sector charity fundraiser. "Our employees' efforts for the State Employees Combined Campaign reflect a shared commitment of charitable giving, exemplifying the credit union philosophy of people helping people," said Jimmy Goodrum, senior vice president of member education and outreach at the $26.8 billion-asset credit union. The fundraising program was started in 1984 by then-Gov. James B. Hunt (D) and has raised $95 million. ...

Hanley among CEOs to retire this year

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MADISON, Wis. (1/23/14)--A number of credit union CEOs announced their retirement plans for 2014, including Rudy Hanley, president/CEO of SchoolsFirst FCU.
Hanley, who has been with the Santa Ana, Calif.-based credit union since 1982, said in a message to members that the decision was not an easy one. "The last 31 years have been the most fulfilling and rewarding of my career, thanks to our wonderful members and team members whom I consider my second family," he said (CU Weekly Jan. 17).  His retirement will be effective at the end of March. The board is currently seeking a successor at the $9.7 billion-asset credit union.
Last week, Travis CU President/CEO Patsy Van Ouwerkerk announced plans to retire this summer. She has been in the credit union movement for 38 years--12 as CEO of the Vacaville, Calif., credit union. Executive Vice President Barry Nelson was selected unanimously by the board of directors to replace Van Ouwerkerk. He previously has served as chief financial officer and chief operating officer for the $2.1 billion-asset credit union.
Jim Updike, president/CEO of Honda FCU, Torrance, Calif., will transition to a senior adviser position April 1 as he readies for his May 2015 retirement. Updike has nearly 45 years of credit union experience, beginning with San Diego Gas and Electric CU. Chief Operating Officer Steve Brandon will succeed Updike as leader of the $625 million-asset credit union.
Lufkin (Texas) FCU announced the Jan. 3 retirement of President/CEO Linda Smith. Smith served as president/CEO of the $30 million-asset credit union for 16 years. She began her career at the credit union in 1978 as a teller (The Lufkin News Jan. 19).
Under a board initiative, the transition at Fort Knox FCU, Radcliff, Ky., has been five years in the making. After 23 years as president/CEO, Bill Rissel will retire effective July 1. Ray Springsteen, who was appointed senior vice president in 2009, will take over the reins of the $1.1 billion-asset credit union upon Rissel's departure (The News-Enterprise Jan. 18).
Susan Peddle, who served as president/CEO of Forsyth County Employees CU, will retire as manager/CEO of Summit CU, effective Jan. 31. Peddle was with the Winston-Salem, N.C., credit union until it merged with Summit CU, Greensboro, N.C., in 2008. She has more than 31 years of service in the credit union industry (Winston-Salem Journal Jan. 13).
Riverside Health System Employees CU, Newport News, Va., announced the retirement of President/CEO Janet Harris. For 25 years, Harris led the $9 million-asset credit union and advocated for small credit unions. She is succeeded by Heidi Lewis, who was CEO of Hampton (Va.) City Employees CU, a $5.7 million \-asset credit union.

Dawn Harris is the new president/CEO of Campus FCU, Baton Rouge, La. She has more than 30 years of experience as chief operating office, executive vice president of retail services and vice president of marketing. Harris succeeds John Milazzo, who served the $502 million-asset credit union for 28 years (eNews Jan. 22).

Iowa Innovation Group seeks 15 CU professionals

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DES MOINES, Iowa (1/23/14)--The Iowa Credit Union League is looking for 15 credit union representatives to join the second year of its Iowa Innovation Group (IIG) program.
"The formation of the Iowa Innovation Group is a significant step in creating a blueprint for innovation within the Iowa credit union system," said Jim Niederhauser, league vice president of member services. "Beyond this, it has opened doors for credit union professionals who represent the next generation of leaders for the movement."
The IIG is modeled after the Filene Research Institute's i3 (Ideas, Innovation, Implementation) program. Filene and the league coach participants as they create, test and implement financial products, services and business model ideas.
Participating in the IIG provided a great opportunity to work with other credit union employees, said Jennifer Tebbe, eServices branch manager at Greater Iowa CU, Ames.
"It opened my eyes to the different challenges we all face and allowed us to find ways to work together to find solutions that will benefit all sizes of credit unions and their members," she said.
Candidates will must demonstrate leadership, passion and a collaborative spirit, the league said. Applications are due Feb. 5, and selections will be completed by Feb. 28.

N.J. Gov. Christie signs CU advisory council bill

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TRENTON, N.J. (1/23/14)--On the same day he took the oath of office for his second term, Gov. Chris Christie signed New Jersey Credit Union League-supported legislation to expand the state's Credit Union Advisory Council (CUAC) to seven members and provide for representation of federally chartered credit unions.
Click to view larger image From left, Chris Abeel, New Jersey Credit Union League director of government affairs; contract lobbyist Carol Katz;  and Greg Michlig, NJCUL president/CEO, joined lawmakers and other dignitaries who braved the frigid, snowy weather Tuesday to attend the invitation-only swearing-in of Gov. Chris Christie to his second term. (Photo provided by New Jersey Credit Union League)
Christie signed the bill before the noon deadline, preventing it from a pocket veto.

The bill expands the CUAC from five members to seven and designates that not less than four seats can be held by representatives of state-chartered credit unions and not less than two seats can be held by representatives of federally chartered credit unions (Daily Exchange Jan. 22).
The legislation recognizes that federally chartered credit unions, though primarily regulated by the federal government, are also subject to numerous state laws and regulations and should have a voice as well.
The CUAC was established through legislation enacted in 1984 as a vehicle for state-chartered credit unions to advise state government on credit union-related matters. Members are nominated by the governor and must be confirmed by the state Senate.

Maine CUs meet with speaker on elder financial abuse

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PORTLAND, Maine (1/23/14)--Maine Credit Union League representatives met with state Speaker of the House Mark Eves (D-North Berwick) Jan. 10 at the State House in Augusta to discuss ideas and provide feedback on financial elder abuse prevention training that the league played a key role in developing.
Attending the meeting on behalf of the league were Quincy Hentzel, the league's director of governmental affairs, and league board member Kyle Casburn, president/CEO of Seaboard FCU, Bucksport. Hentzel serves on the Maine Council for Elder Abuse Prevention. Casburn serves on Eves' Round Table on Aging in Maine.
"I appreciated Speaker Eves and his staff giving credit unions the forum to weigh in on financial issues affecting seniors in our state," Casburn said (Weekly Update Jan. 17). "Credit unions are all too familiar with our senior members falling victim to financial fraud, either through 'foreign lottery' types of scams or theft by family or caregivers. Credit unions have an opportunity to use our collective resources to educate our members on fraud and provide tips on monitoring our loved one's accounts. The speaker recognized the value of Maine's credit unions in providing leadership in this area."
With Maine's aging population, Maine's credit unions have offered assistance to the elderly for several years, league president John Murphy said. "Speaker Eves appreciates our support and willingness to continue to be proactive in this effort," Murphy said.
A free training session on preventing financial exploitation of the elderly--coordinated and developed by the league--will be offered for credit unions and other financial institutions on Feb. 13 at the Augusta Civic Center.

Equifax: Auto loans continue rebound

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ATLANTA (1/23/14)--Auto lending continues to bounce back in a big way, according to the latest Equifax National Consumer Credit Trends Report.
From January to October 2013, the total number of new auto loans originated was 20.2 million, totaling $405.2 billion and representing the highest origination total for that time in eight years, Equifax said.
"Auto delinquencies have declined to levels last seen in mid-2006, and the strength in the performance of loans booked in the last few years is helping to make credit more widely available to those with higher-risk credit profiles, namely subprime borrowers," said Equifax Chief Economist Amy Crews Cutts.
Additional metrics for new credit include:
  • Year-over-year, the total balance of new loans Jan. to Oct. 2013 increased 14.7%, while the total number of new loans rose 11.6%;
  • Subprime auto lending now accounts for 31% of all auto loans originated;
  • October 2013 auto loan amount totals also hit an eight-year high for the month at $39 billion; and
  • The total balance of new credit for auto loans Jan.-Oct. 2013 represents 49% of all new non-mortgage consumer credit.
  • Balances on outstanding auto loans ($859.6 billion) and the total number of existing loans (62.3 million) in December 2013 are the highest in more than five years;
  • Loans funded by credit unions, banks and savings and loans are at $417.2 billion, while the total number of loans is 30.9 million--a five year high for both;
  • Similarly, the total outstanding balance for loans funded by auto finance companies is $442.5 billion, a five-year high, while the total number of existing loans is more than 32 million, a 59-month high;
  • Serious delinquencies on auto loans funded by finance companies in December 2013 represent 1.88% of outstanding balances, a year-over-year decrease of 13.5%;
  • In that same time, serious delinquencies on auto loans funded by banks or other depositories are 0.41% of outstanding balances, identical to December 2012.
The recession appears to have changed the choices auto buyers make, Cutts said. "The choices consumers are making with the types of cars they are buying have changed in the aftermath of the Great Recession, with a heavy emphasis on value for the dollar," she said. Demand for new cars is rising, but the mix is now shifted towards economically and environmentally friendly features."