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CU System briefs (01/24/2014)

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  • OSHKOSH, Wis. (1/24/14)--Three Wisconsin credit unions--CitizensFirst CU, Oshkosh; Lakeview CU, Neenah; and Best Advantage CU,  Brillion--announced their boards have unanimously approved plans for a collaborative merger. CitizensFirst CU will retain the name until a new one is selected for the credit union which will have $600 million in combined assets and 47,000 members in 15 Wisconsin counties.  "We take the seven cooperative principles of credit unions seriously and have worked hard to achieve something bigger, something better, for all of our members," said Pat Lowney, president/CEO of $107 million-asset Lakeview CU. Kevin Ralofsky, current president/CEO of $386 million-asset CitizensFirst CU, will serve as the new credit union's president. Lowney and Tammy Williams, president/CEO of $68 million-asset Best Advantage CU, will have senior executive positions ...
  • PORTLAND, Ore. (1/24/14)--Two months after Typhoon Haiyan devastated the Philippines, OnPoint Community CU announced that it will donate nearly $53,000 to benefit MercyCorps' relief efforts. The Portland, Ore., credit union matched donations made from Nov. 18 to Dec. 13. Funds raised by the campaign will be used to provide food and shelter and improve access to clean water and sanitation. "Supporting global relief efforts is a natural extension of the credit union philosophy of people helping people," said Rob Stuart, president/CEO of the $3.3 billion-asset credit union ...
  • HARAHAN, La. (1/24/14)-- "Stone Age Dad: The Evolution of a First-Time Dad," the employee blog from Neighbors FCU, Baton Rouge, La., received top honors at the Baton Rouge Social Media Association SoMe Awards. "Stone Age Dad" follows Brett Reynolds, vice president of marketing at the $615 million-asset credit union, as he goes through the experience of having his first child, including doctor's visits, choosing a day care and a baby-cost calculator. It won the "How May I Help You?" category and took the People's Choice award (eNews Jan. 22) ...

More media outlets spotlight CUs, CUNA's breach survey

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MADISON, Wis. (1/24/14)--Results of the Credit Union National Association's survey on costs related to the Target data breach continue to make headlines in national media outlets.
 
Thursday's San Francisco Business Times and Las Vegas Review-Journal picked up the story for their regions with localized numbers provided by the California and Nevada Credit Union Leagues.
 
In fact, league President/CEO Diana Dykstra called the breach's impact "astonishing" in Thursday's San Francisco Business Times. "This reinforces the need for national legislation. As it stands now, financial institutions are left holding the bag every time a retailer leaves itself open to a security breach," she said. (See related story: "CUs' state-by-state breach data can inform advocacy efforts.")
 
According to CUNA's survey results, credit unions have incurred costs in the range of $25 million to $30 million as a result of the breach. The Target breach has cost credit unions about $5.10 per card affected by the security lapse, on average.
 
The Minneapolis/St. Paul Business Journal and the trade publication Chain Store Age both ran CUNA's survey results.

MSN Money picked up Wednesday's Associated Press story which zeroed in on CUNA President/CEO Bill Cheney's comments that retailers such are Target Corp. are "rarely held responsible for reimbursing financial institutions for the costs that the data."
 
On Thursday, Bankrate.com writer David McMillin noted that the "scary part" is that the preliminary survey results don't include anticipated losses from fraudulent activity.

Yahoo Finance ran with 24/7 Wall St.'s "Cost of Target Data Theft Spreads, Credit Unions Now... Banks Next?"
 
In Compliance Week, CUNA Senior Vice President for Compliance Kathy Thompson said, "There are no regulatory requirements about notifying members when a breach occurs in a merchant's information system" (Jan. 22). She emphasized that CUNA has been advocating for congressional action on legislation to require merchants to reimburse financial institutions for costs incurred when breaches occur in retailers' systems.
 
Computerworld captured the back-and-forth rallying between retailers and financial institutions over payments systems security and who should cover the costs of data breaches (Jan. 23).
 
KRNV 4 in Reno, Nev., reported that the breach has cost Greater Nevada CU, Carson City, more than $15,000, and Target will not be reimbursing any of its expenses.

Mich. chapter meets with U.S. Rep. Bentivolio

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LIVONIA, Mich. (1/24/14)--The implications of the Target data breach were part of the discussion between the Metro West Chapter of the Michigan Credit Union League and U.S. Rep. Kerry Bentivolio (R-Milford) Jan. 17.
 
U.S. Rep. Kerry Bentivolio (R-Milford) met with members of the Metro West Chapter Jan. 17. (Photo provided by Michigan Credit Union League)
Bentivolio, who represents Michigan's 11th District, met with credit union representatives at the Livonia headquarters of Co-Op Services CU (Monitor Jan. 20).

CEO Tony Carnarvon started the meeting by discussing credit unions' costs as a result of the compromised debit and credit card information. (See related story: "CUs' state-by-state breach data can inform advocacy efforts.")
 
Bentivolio shared his interest in raising data security standards for merchant payment systems. He also offered his assistance to efforts that could help prevent data breaches of this magnitude, the Monitor reported.
 
The group also discussed government-sponsored enterprise (GSE) reform, member business lending and Bentivolio's continued support of the credit union tax exemption.

CUs' financial expertise can benefit own employees

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KANSAS CITY, Mo. (1/24/14)--Credit unions searching for innovative ways to help the community should consider focusing some attention internally, according to a report by Mazuma CU.
 
 Extending financial literacy and financial education programs to credit union employees can help both the institution's bottom line and the community, the credit union said in the third article of its "Community Collaboration" series.
 
 According to the Kansas City, Mo.-based credit union, there is a real need for financial education throughout the national workforce, with some 85% of American workers wanting financial education.
 
The credit union also pointed to evidence that programs could essentially serve as wise investments in human capital. About 25% to 40% of employees report having difficulties staying productive because of financial problems, it claims. Mazuma also cited a study by the Personal Finance Employee Education Foundation, which found that the average employee wastes about five days worth of time at work due to personal financial issues.
 
"Financial education can, therefore, be a useful tool to reduce the associated costs of stress such as absenteeism, low productivity, turnover, and workplace distractions," President/CEO Brandon Michaels said, while increasing "the quality of life for employees."
 
Credit unions, many of which already teach financial literacy and financial education in their communities, are in a unique position to address this problem. But, Michaels warned that one-way information sessions, brochures and websites are insufficient.
 
"Employees must be able to put into context and apply the information they learn," the credit union said in the piece on corporate social responsibility. "They must be able to apply what they learn to their daily life and to change behavior. While it will not be a magic bullet to solve all employee financial issues, it will reduce the detrimental effects." 
 
The syllabus should incorporate more than benefits and retirement plans, the credit union advocated. It should include lessons on daily living, debt management and budgeting, with topics that include setting goals, net worth, cash flow, income, and predicting future costs.
 
Michaels encouraged credit unions considering an employee financial education program to engage employees in the planning stages by asking them what sort of information they want, how it should best be delivered, and by whom.
 
"Unless they are in a crisis, most employees won't take the time to seek out help on their own. This is why employees want to receive this type of education at work and from someone who does not sell the products taught about," he said.

CUs' state-by-state breach data can inform advocacy efforts

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MADISON, Wis. (1/24/14)--State leagues immediately started planning to use the state-by-state breakdowns from the Credit Union National Association's survey on Target data breach costs to ramp up their advocacy efforts to get merchants to cover costs created for credit unions and other financial institutions when a breach occurs via the merchants' systems.
 
For instance, League of Southeastern Credit Unions President/CEO Patrick La Pine noted Wednesday that Alabama and Florida credit unions that responded to the CUNA survey say that nearly 350,000 cards were breached bringing an estimated $1.8 million in total costs.
 
In an article in the Jan. 22 issue of his league's newsletter, eSignal, La Pine noted that the cost and scope of the Target data breach was a major topic of discussion for a Monday meeting Rep. Spencer Bachus (R-Ala.) in Birmingham.
 
La Pine said it "was a good meeting that sets up a larger conversation next month" when credit union advocates take their message to Capitol Hill during the Credit Union National Association's 2014 Governmental Affairs Conference. Credit unions' visits with federal lawmakers on top credit union issues is a key component of the CUNA GAC.
 
"Rep. Bachus was very open to our perspective on the data breach," La Pine said, adding that the former House Financial Services Committee chairman will expect to hear more from his constituent credit union reps during the GAC, to be held in Washington, D.C., Feb. 23-27.
 
Nationally, credit unions have already incurred costs estimated to be in the range of $25 million to $30 million as a result of the Target stores data security breach, the CUNA survey has shown. Actual costs could exceed this estimate in the coming weeks if greater fraud losses are incurred or if affected credit union add additional costs to their reported totals. The survey remains open for more submissions.
 
Among state credit union leagues that have reported state or regional totals to their member credit unions are:
  • The California and Nevada Credit Union Leagues, which reported 460,000 debit cards and 75,000 credit cards were affected in California, while Nevada cited 16,000 debit cards and 1,600 credit cards (CU Weekly Jan. 21). Total estimated costs for the two states are $2.8 million.
  • The Northwest Credit Union Association, which said that the Target breach already has cost Oregon and Washington credit unions an estimated $1.3 million. Oregon reported 148,000 debit cards and 27,700 credit cards had been affected, while Washington had 150,000 debit cards and 28,400 credit cards.
  • And, to date, 61 Pennsylvania credit unions participated in the survey, the state league said. About 148,000 debit cards and 27,700 credit cards were affected with an estimated total cost of $896,800 (Life is a Highway Jan. 22).

Wis. CUs team up to help homeless students

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MADISON, Wis. (1/24/14)--Five credit unions have used the spirit of cooperation to help homeless students in Madison, Wis.
 
In November, Sally Dischler, president/CEO of Heartland CU in Madison, read a newspaper article about the challenges Madison homeless children face in maintaining consistent school schedules as they move from shelter to shelter.
 
Heartland CU had already developed a Give Local community support program. Each holiday season for the past several years, it has chosen an organization to benefit with the goal of raising awareness as well as money. Dischler and the credit union decided to dedicate their 2013 Give Local efforts to the Madison Metropolitan School District's Transition Education Program (TEP), which provides homeless students with transportation, school supplies and food.
 
Heartland also enlisted four other Madison credit unions to join in the project. Those credit unions include Summit CU, Madison CU, Members First CU and Heritage CU.
 
Homelessness isn't a social problem often associated with Madison, a university town with a population of about 200,000. So far this school year, TEP has identified 964 homeless students, an increase of 30% over last year. To help underscore the issue, Heartland produced videos featuring some of the homeless students in the Madison Metropolitan School District.
 
"We've had good success with videos on social media in the past, so we knew it was an effective way to share our message," Robin Marohn, vice president of marketing at Heartland CU, told News Now. "I think in the back of our minds, we know that homelessness exists all over, but I don't think we realize how that affects kids. The videos really helped send that message home."
 
So far, the project has raised $35,000. An advisory group will work with the school district to determine how the funds will be used to help the homeless students.

Building media relationships pays off for Ohio CUs

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MADISON, Wis. (1/24/14)--It's a long-standing joke that reporters are always looking for a free meal, but the Ohio Credit Union League has used media lunches help boost media coverage for state credit unions.
 
The face-to-face dialogues over lunch have resulted in numerous articles and generated relationships that will help develop more newspaper coverage of credit unions, the league reported in its eLumination newsletter (Jan. 22).
 
Recently the league received an e-mail from Crain's Cleveland Business reporter Michelle Park, who covers financial institutions in northeast Ohio. Park wrote: "Can we organize a 2014 lunch like the others we have done? I think I need to meet more of the leadership of credit unions around here." The league obliged and will host a February luncheon with Park and several credit union representatives.
 
In another instance of the league's outreach efforts resulting in media coverage, a league-hosted lunch with Dayton Business Journal reporter Olivia Barrow provided the impetus for an article about Day Air CU's proactive assistance to its members following the Target data breach. Paul Mercer, league president/CEO; Patrick Harris, league director of media and public relations; Kimberly Stewart, the league's consumer outreach coordinator; and Bill Burke, president/CEO of the $272 million-asset credit union in Kettering, met with Barrow last week.
 
Burke explained how credit unions must address member needs following a merchant breach. He explained Day Air CU's decision to immediately notify members that they could request a new debit or credit card if they believed their information was at risk. Barrow followed up with additional questions and wrote the article. Use the link to read the story.
 
Lunches can also be credit union-driven. The league recommends that someone from the credit union commit to reading the local daily newspaper cover-to-cover, paying particular attention to coverage related to the financial services industry and personal finance.
 
When the credit union reader finds an article, he or she should e-mail the reporter and offer the credit union as a source of financial expertise for future stories. By suggesting lunch meetings to discuss story ideas, the credit union reader can kick start a relationship that can lead to regular media coverage for the credit union--fostering consumer awareness that can help the entire credit union system.

N.Y. foundation awarded nearly $88K in 2013

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ALBANY, N.Y. (1/24/14)--The New York Credit Union Foundation (NYCUF) announced that it awarded $87,993 in grants last year.

The money, which was given to state credit unions and credit union stakeholders, was granted for financial education initiatives, professional development, member service improvement and disaster relief.

"We see the summary report (of awards) in the form of numbers and dollars, but those numbers actually represent hundreds of lives that have been impacted in a positive way," said Vicki O'Neill, NYCUF chair and president/CEO of ACMG FCU, Solvay. "That positive impact represents the best of what we collectively do to advance the ideals and goals of our movement."

Seven credit unions received $10,941 in education initiative grants, or "Smart Money" awards. The winners were:
  • Buffalo Metropolitan FCU, Buffalo;
  • East River Development Alliance FCU, Long Island City;
  • Gates Chili FCU, Rochester;
  • Hudson River Community CU, Corinth;
  • ServU FCU, Painted Post;
  • Cooperative Federal CU, Syracuse; and
  • UFirst FCU, Plattsburgh.
Seventeen credit unions won $35,874 in award money for financial education programs, or "Financial Fitness" grants. The winners were:
  • Allegany Community FCU;
  • Chen-Del-O FCU, Franklin;
  • East River Development Alliance FCU, Long Island City;
  • Fidelis FCU, New York City;
  • Gates Chili FCU, Rochester;
  • Greece Community FCU, Rochester;
  • GRS FCU, West Henrietta;
  • IRS Buffalo FCU, Buffalo;
  • LeRoy FCU;
  • Lockport Schools FCU, Lockport;
  • Lower East Side People's FCU, New York City;
  • Palisades FCU, Pearl River;
  • Sing Sing EFCU, Ossining;
  • Spencerport FCU;
  • St. John's Buffalo FCU, Buffalo;
  • Tonawanda Community FCU, Buffalo; and,
  • Western New York FCU, West Seneca.
Meanwhile, 72 credit union employees and volunteers were given professional development grants worth a total of $39,178.

The NYCUF also gave $2,000 to help credit unions' disaster relief efforts in the wake of the Colorado floods and Oklahoma tornadoes last year.