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CU System Archive

CU System

CU System briefs (01/24/2011)

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* SAN FRANCISCO (1/25/11)--Patelco CU will move its headquarters this month from San Francisco to Pleasanton, Calif., and expand its staff to reflect a shift in focus to member service and sales, according to the San Francisco Business Times (Jan. 21). The credit union has 24 job openings, mostly for member services at the $3.65 billion asset credit union's 40 branches. During the recession, the credit union halted recruiting and closed several branches. Business is improving, and Patelco plans to increase staff in 2011 … * MIDLAND, Mich. (1/25/11--Dow Chemical Employees CU, based in Midland, Mich., recently returned $5.7 million to its members in the form of rebates and rewards, according to the Michigan Credit Union League (Michigan Monitor Jan. 24). Members in good standing received a 15% loan interest rebate on their total interest paid on all eligible loans; a 15% Member Saver Reward for a portion of the dividends/interest earned on all share/deposits and a Visa Check Card rebate of 0.125% of all signature-based transactions and one cent per each PIN-based transaction during 2010. DCECU has $1.4 billion in assets … * FORT WORTH, Texas (1/25/11)--American Airlines CU (AA CU) paid a $10 million dividend to members on Dec. 31. The bonus dividend was based on dividends earned on qualifying share accounts and/or interest paid on applicable loans. Savings dividends for the period between Jan. 1 and Nov. 30, 2010, was paid at an annual rate of 4.72%. The additional portion of the bonus dividend was calculated at an annual rate of 4.72% of interest paid Jan. 1-Nov. 30 on applicable loans. AA CU, based in Fort Worth, Texas, has more than $5.2 billion in assets …

Nebraska bill would let CUs offer savings raffles

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OMAHA and LINCOLN, Neb. (1/25/11)--A bill has been introduced in the Nebraska legislature that would enable credit unions in the state to offer savings promotion raffles or lottery as a measure to help boost state consumers' savings. State Sen. Amanda McGill introduced L.B. 524 on Jan. 18. She and the Nebraska Credit Union League intended for the product to boost savings among all Nebraskans, specifically those who are most financially vulnerable. The bill defines "savings promotion raffle" as "a contest conducted by a credit union chartered under state or federal law or any agent or employee thereof in which a chance of winning a designated prize is obtained by the deposit of a specified amount of money in a savings account or other savings program if each entry has an equal chance of winning." This legislation is important because it encourages and incentivizes Nebraskans to save for their future in a way that is not only fun but builds a habit of savings for those who participate, according to League President/CEO Scott Sullivan. McGill said the average American family spends $540 a year on lottery tickets "when they should arguably be saving some of that money in case of an emergency. Savings raffles are a financially safe way to promote savings among Nebraska families while allowing them a chance to win." If the legislation passes, Nebraska would be the third state to offer the savings promotion raffle. Doorways to Doors, a national non-profit specializing in expanding asset-building opportunities for American families, completed a pilot savings promotion raffle in 2009 in Michigan in which state consumers saved more than $8.5 million through the program. Many had no savings account before the promotion. Participating credit unions offered entries for monthly prizes and a large grand prize each time members deposited $25 to the prize-linked savings account. Prizes are taken from the part of the interest that otherwise would have been earned on the savings accounts.

Hit by Katrina CU continues giving back

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MADISON, Wis. (1/25/11)--Often in the credit union community, good works and deeds are not forgotten. The National Credit Union Foundation (NCUF) recently received a donation of more than $2,300 from a Gulfport, Miss.-credit union, the result of its employees’ ongoing effort to thank the credit union community for help received post-Hurricane Katrina. The donation from Gulf Coast Community FCU to NCUF is the most recent since employees there initiated a payroll deduction plan in 2006 as a way to show their appreciation for support they received from credit union employees across the country in the aftermath of Hurricane Katrina. Including this most recent donation, Gulf Coast Community has raised more than $16,000 for NCUF. “It is incredibly humbling to receive support like this from Gulf Coast Community FCU,” said Bucky Sebastian, NCUF executive director. “Both the support from credit unions after Katrina and Gulf Coast’s kindness make me proud to work in the credit union movement.” “Many of our staff lost their homes during the storm and were incredibly thankful for the outpouring of support,” added Debbie Pidek, executive vice president, communications/chief communications officer at Gulf Coast Community FCU, in a release. “We will be forever grateful for the generosity shown by so many credit union employees through the National Credit Union Foundation.” Soon after Katrina made landfall in 2005, the NCUF activated its Disaster Relief Fund. Donations from the credit union community helped hundreds of credit union employees and volunteers pay for emergency shelter, food, water, and other essentials needed for daily survival. Donations through NCUF also helped credit unions get up and running more quickly. Within days after Hurricanes Katrina and Rita, credit unions were able to reopen from makeshift offices and serve members who needed emergency assistance. In less than a year, the credit union community donated more than $3.3 million to the NCUF Disaster Relief Fund--a record for the credit union movement, according to the NCUF.

Supreme Court rules Chase was OK to hike interest rate

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WASHINGTON (1/25/11)--The U.S. Supreme Court ruled Monday that consumers could not proceed with a lawsuit against Chase Bank USA for not providing written notice when it raised credit-card interest rates for cardholders who were late on paying creditors. The unanimous opinion said Chase's actions were consistent with the Federal Reserve Board's Regulation Z stemming from the U.S. Truth in Lending Act when the bank raised plaintiff James A. McCoy's interest rate for delinquency or default without providing written notification (The Wall Street Journal and PaymentsSource Jan. 24). Chase's cardholder agreement stipulated the bank could increase McCoy's interest rates in the event of a default. The federal law at the time the lawsuit was filed in 2006 did not require banks to give such notice for raising cardholders' rates, said the opinion, written by Justice Sonia Sotomayor. The Fed changed the regulation in 2009 and now requires banks to provide advance notice of at least 45 days before making any change in interest rate because of default, even if the default rate was specified already in the original contract. The court, relying on a brief filed by the Fed in the case, said that because the Fed's interpretation is consistent with the regulatory text, "we need look no further in deciding this case." The old version of the rule was not clear on whether bank notification of rate increases was required, said the opinion. The opinion clears up for consumers, credit unions and other financial institutions a split in the interpretation of Regulation Z. Lower courts were split on the issue. Some appeals courts ruled against Chase, prompting the filing of several class-action cases in California against Chase and other banks.

Texas league in Top 20 lobbyists for sixth year

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AUSTIN, Texas (1/25/11)--For the sixth year consecutive year, the Texas Credit Union League was among the top 20 lobbyists in the state--out of 1,200 eligible state trade associations--as rated by the Texas-based Capitol Inside political website. The league was the only financial services group ranked in the top 20 Texas Lobby Power list. At the top of the list are some of the largest political action committees (PACs) in the state. While the league’s PAC is more modest, it is among the top 60 PACs in Texas and has broken fundraising records nationally among credit union state trade associations. Capitol Inside ranks the relative lobby power of different groups in the Texas politics. Using a combination of Texas Ethics Commission records, research, institutional knowledge and conversations with lobbyists, lawmakers, consultants and others within the State Capitol community, the group releases the results each year. With the league’s lobby team of Chief Advocacy Officer Buddy Gill, Vice President of Government Relations Jeff Huffman, and three state contract lobbyists, the TCUL lobby team has more than 75 years of combined direct lobbying experience in Texas.

SECU piloting estate-planning program

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RALEIGH, N.C. (1/25/11)--State Employees’ CU (SECU) in Raleigh, N.C., announced it is offering an Estate Planning Essentials Pilot Program to its member-volunteers. SECU has implemented the program to fill the need for basic estate planning and will preparation. Knowing that many individuals do not have a will, SECU said it hopes the program will encourage members to take an important step. Available in SECU branch locations statewide, the pilot program provides estate planning documents, prepared by participating attorneys, to its nearly 3,000 volunteers serving on local branch advisory boards or SECU’s board of directors. The $21.04 billion-asset credit union said it is piloting the program to volunteers to test the service, because they provide a resource to critique the benefits of all new member offerings. Upon successful completion of the pilot, the program will be made available to all SECU members. The credit union has identified a slate of attorneys who have agreed to prepare estate planning documents at a predetermined price. Each estate planning package will include a will with possible trust provisions, a durable power of attorney, a healthcare power of attorney and living will, and a Health Insurance Portability and Accountability Act authorization. For wills that include trust provisions, SECU Trust Services through MEMBERS Trust Company can be named as the corporate trustee by the member to manage the trust assets and oversee the distributions on behalf of the beneficiaries. “The Estate Planning Essentials Program is intended to cover the estate planning needs of most members whose situation can be addressed in one appointment with an attorney,” said Sara Trexler, senior vice president of SECU’s Trust Services department. “If a situation requires more complex planning, a SECU Trust representative can also make recommendations regarding a specific need. “The credit union’s goal with this program is to assist members in preparing for the future needs of their family and to ensure that their intended plans are defined and documented appropriately,” she added. “Estate planning documents are critical to a solid financial plan.”

Wisconsin league NASCUS welcome new CU regulator

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PEWAUKEE and MADISON, Wis. (1/25/11)--The Wisconsin Credit Union League has congratulated Wisconsin Gov. Scott Walker on the appointment of Ginger Larson as director of the Office of Credit Unions. Larson, who held the director position from 1996 to 2003, most recently was a supervisor in the Office of Credit Unions. She was among the appointees announced Monday by New Department of Financial Institutions (DFI) Secretary Peter J. Bildsten. She succeeds Suzanne Cowan. Larson also has seven years' experience as a credit union employee. She was on the National Association of State Credit Union Supervisors (NASCUS) board of directors during her previous term as director and served as board secretary/treasurer for several years, said NASCUS. Currently, she is chairman of the NASCUS Audit Committee and a trustee of the organization's educational foundation, the National Institute for State Credit Union Examination (NISCUE), and is a past NISCUE chairman. " With Director Larson as the chief credit union regulator, Wisconsin will have a very experienced and well-qualified leader ensuring the continued strength and safety of the member-owned financial institutions that serve 2.2 million Wisconsin consumers," said league President Brett Thompson. "We pledge to work closely with Director Larson and state examiners from the Office of Credit Unions to maintain the consistently strong performance of credit unions so that they can help individuals, families and small businesses in ways that for-profit institutions typically won't extend themselves," Thompson said. Mary Martha Fortney, NASCUS president/CEO, noted that Larson "is a long-time, active member of NASCUS and the state credit union community. NASCUS and state regulators extend our congratulations and look forward to continuing to work with Ginger as she returns to lead the Wisconsin Office of Credit Unions. NASCUS would also like to gratefully acknowledge Sue Cowan, the immediate past Wisconsin Office of Credit Unions Director, for her great contributions to NASCUS as a member, board director and officer.”

CUs campaign aims to support local businesses

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MANITOWOC, Wis. (1/25/11)--Shoreline CU in Two Rivers, Wis., has launched a new campaign that aims to inspire community members to support local businesses. The $105 million asset credit union’s campaign, dubbed “Walk the Walk,” looks to go beyond community members who just “talk the talk” about shopping locally, said Bob Maloney, Shoreline marketing and public relations director (Herald Times Reporter Jan. 21). "If we can boost business, we can keep our downtown places full; it looks good,” he told the newspaper. “This is what keeps our wheels going and that’s the whole point. [Talking about] shopping local is one thing, but actually doing it is another.” As part of the campaign, participants are given a sticker or window cling to put on their vehicles, demonstrating support for local businesses. Participants can win gift certificates to local businesses that take part in the campaign, with a local radio station announcing winning license plate numbers five days per week, the paper said. “Instead of using advertising money to say my money is as green as the bank next door, I’m using advertising money and walking the walk by giving it back to the community and the people who could use it,” Maloney told the paper. “People don’t realize what services these local businesses can offer them, and that’s why we have businesses that fail.” Shoreline CU pays for the gift certificates. So far, the credit union has given out about $15,000 in gift certificates. Participating businesses are asked to donate merchandise valued at $100 or more for a grand prize drawing on April 2. A second phase, which may include a $100,000 cash prize, will begin in June. To read the article, use the link.

Mid-Atlantic FCU up for national public service award

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GERMANTOWN, Md. (1/25/11)--Mid-Atlantic FCU is a local nominee for the Jefferson Awards, a national recognition system honoring community and public service in the U.S. The Jefferson Awards are presented on two levels: national and local. They began in 1972 to create a Nobel Prize for public service. Mid-Atlantic FCU, with $242 million in assets, based in Germantown, Md., has created a separate senior position to oversee its philanthropic activities, and its 60 employees each get eight hours of paid leave per quarter to volunteer in the community (Washington Business Journal Jan. 21). The credit union raised $27,187 in 2009, and more than $32,000 in 2010. The fundraisers included an annual golf tournament that benefits autistic people and the American Cancer Society’s Relay for Life. One initiative is the Mid-Atlantic FCU’s series of free business seminars, known as the Small Business University. The seminars help small businesses raise capital, share ideas and network with other local businesses. About 20 seminars were held in 2010. Last year, credit union employees volunteered to rebuild the house of an elderly woman who had trouble walking. Other initiatives provide assistance on a broader scale. Through Women Who Care Ministries and Interfaith Works, the credit union provides nine different snack items weekly to 35 needy students during the school year.

CUNA to IWalletpopI 80 of CUs offer free checking

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MADISON, Wis. (1/25/11)--As more banks raise fees to bolster their revenue, consumers should look to credit unions for lower charges and fees, a Credit Union National Association (CUNA) economist told Walletpop Monday. Roughly 64% of banks offer checking accounts that don’t require a monthly fee, while 80% of credit unions do the same, Mike Schenk, CUNA vice president of economics and statistics, told the publication. The average amount paid by credit union members for all fees is less than the average amount bank customers pay, Schenk said. “In a given year, the average bank checking customer incurred $183 in total fees,” he added. “For credit union customers, that amount was less than $72.” CUNA research discovered similar disparities when it compared average car-loan rates, Schenk told Walletpop. “We’re not-for-profit and owned by our members, which gives us flexibility to absorb some of these costs and to live in an environment with slightly lower earnings,” Schenk explained. To read the article, use the link. Roughly 85% to 90% of credit unions with $20 million or more in assets that offer checking provide at least one free checking account to their members. Noninterest-bearing accounts are more prevalent than interest-bearing accounts--73% vs. 60%. And 49% of credit unions offer business checking programs, according to CUNA’s Fees Study (Michigan Monitor Jan. 24). With interest-bearing checking offerings, nearly all banks (96%) charge a monthly fee for these accounts, according to May data from RateWatch. It also reported that the median fee charged by banks is $8. Although most credit unions (58%) charge no such fee, the median fee among those that do is $5, which is $3 lower than the bank fee, said the Monitor.