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CU System briefs (01/28/2014)

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  • WASHINGTON (1/28/14)--The first round of 2014 campaign schools garnered strong results for the Credit Union National Association and Montana Credit Union Network, as 20 to 25 individuals attended schools held in Missoula, Helena and Billings last week.
    Wayne Stevenson, an 18-year-old high school senior from Hobson, Mont., came to the campaign school with hopes of running for governor in the future. (MCUN Photo)
    Montana State House members Chuck Hunter (D-79) and Kelly Flynn (R-68) both spoke during the session, and CUNA Senior Vice President of Political Affairs Richard Gose also provided pointers to potential candidates. The main goal of the campaign schools is to give candidates the know-how to run for office, raise money and develop campaign plans. Gose noted that this year's campaign schools were attended by a mixture of newcomers, incumbents and others seeking higher office. "For credit unions to be truly impactful at the highest level of federal and state government, our interaction needs to start at this level," he said. Three more schools are being held in North Carolina this week. The North Carolina-based schools will be held in Rocky Mount today, Fayetteville on Wednesday and Hickory on Thursday ...
  • ARLINGTON, Va. (1/28/14)--The National Association of State Credit Union Supervisors (NASCUS) last week submitted a rare comment on proposed federal regulations because they would affect state-chartered credit unions. The submission came in response to a request from the National Credit Union Administration for input on proposed changes to rules governing examination locales. The NCUA has suggested that Part 701 of its Rules and Regulations be amended to require examinations and contact between its regulators and credit union staff to occur at commercial offices or other public locations. The federal regulatory body specifically asked whether to include state-chartered credit unions under one provision of the law. NASCUS replied that the NCUA should coordinate with the primary state regulator when dealing with credit unions that are federally insured but state-chartered, while agreeing that regulatory agencies should be able to shape their examination processes within reason. The association recognized that some state regulators have voiced concerns about the appropriate public location for NCUA examinations, particularly with regard to the handling of credit union records and the cost of off-site meetings ...
  • WHIPPANY, N.J. (1/28/14)--The head of a $284-million asset New Jersey credit union last Friday started his term as leader of a prominent local trade association. Garden Savings FCU President/CEO Lou Vetere became chairman of the Morris County Chamber of Commerce, presiding over a meeting in Whippany, N.J. (The Daily Exchange Jan. 27). There were more than 600 attendees at the gathering, including representatives from Garden Savings FCU, Parsippany; XCEL FCU, Bloomfield; and the New Jersey Credit Union League. Linda McFadden, president/CEO, XCEL FCU, and league chair; and Greg Michlig, league president/CEO, were in attendance ...
  • WINSTON-SALEM, N.C. (1/28/14)--A North Carolina credit union was named one of the healthiest businesses in America. Allegacy FCU, Winston-Salem, was given the distinction last week by Healthiest Employers, a health analytics company. More than 5,000 organizations were competing for the honor, which is given to firms that incorporate outstanding employee programs and practices. Allegacy was recognized for its AllHealth Wellness program, which it started in 2009. "We are honored to be the only credit union recognized on a national level for Allegacy's AllHealth Wellness efforts," said Cathy Pace, CEO of the $1 billion-asset credit union, noting that the annual employee participation rate for the past three years has been at least 86%. The program includes health risk assessments, screenings, in-person coaching, incentives and discounted gym memberships, among other benefits ...
  • MARLBOROUGH, Mass. (1/28/14)--Sixty-one Massachusetts credit unions collectively raised $120,000 for the Massachusetts Coalition for the Homeless in 2013. The amount was represented by a ceremonial check given to the coalition last week by Nicole James, social responsibility committee chair, and Paul Gentile, president/CEO, Massachusetts Credit Union League (The Daily Scan Jan. 27). The largest contribution came from Waltham-based RTN FCU, which raised $31,300 through a number of programs. "It is only with the collective generosity from the credit unions that the coalition can be a place for families and individuals to turn when the unthinkable possibility of becoming homeless happens," said Robyn Frost, coalition executive director . . .

CUNA nominates 4 CUs to BSA advisory group

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WASHINGTON (1/28/14)--On Monday, the Credit Union National Association nominated four credit unions to be part of the Bank Secrecy Act (BSA) Advisory Group for the Financial Crimes Enforcement Network.
In the letter, CUNA Deputy General Counsel Mary Dunn said that the nominated credit unions have been very active in BSA and payments issues, providing assistance to CUNA and others in regards to these topics.
They also have legal, regulatory and compliance staff that carefully analyze BSA issues and will be well-equipped to assist the credit union's representative who will be attending the advisory group meetings, the nomination letter said.
Nominees are:
  • Hudson Valley FCU, Poughkeepsie, N.Y. Lisa Massey, director of risk mitigation, will be the representative for the $3.8 billion-asset credit union that serves more than 280,000 consumers and businesses in four New York counties;
  • First Commerce CU, Tallahassee, Fla. Andrew Price, general counsel, will be the representative for the $367 million-asset credit union with more than 39,000 members;
  • Wescom CU, Pasadena, Calif. Bryan Tinoco, BSA officer and Office of Foreign Assets Control administrator, will represent the $2.5 billion-asset credit union that serves seven California counties and more than 200,000 members; and
  • Kentucky Corporate FCU, Louisville. President/CEO Marsha Hahn will represent the corporate credit union that provides correspondent and payment services to 87 credit unions in Kentucky.

CU CEO to help Hispanics, young folks

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MORTON GROVE, Ill. (1/28/14)--A Jan. 20 Daily Herald article highlighted the efforts of Jose Garcia, president/CEO of $60 million-asset Northwest Community CU, to increase awareness of credit unions, especially among Hispanics.
"He's looking to increase membership and focus more on social media to draw in the younger generation," wrote Daily Herald reporter Anna Marie Kukec.
Garcia called credit unions a "diamond in the rough." The missing piece is reaching high school students so they have a better understanding of credit and finances and how to shop for lending products, he said.
Reaching out to social media, such as Facebook and YouTube, is the best way to reach young consumers, Garcia said.
Garcia was born in Texas and raised in Chicago. He earned his bachelor's of business administration degree in accounting at St. Xavier University in Chicago.
He began his career in financial services as a bank teller, and worked his way into the accounting department. He landed a job as accounting manager at Baxter CU, in Deerfield, Ill. He also served as chief financial officer of Advance Financial Federal in Schereville, Ind., before taking over as CEO of Northwest Community CU.
Northwest Community CU currently has 2,700 members, "but the potential is endless," Garcia told the Daily Herald.

CO-OP Miracle Match results in $3M for CMN Hospitals

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RANCHO CUCAMONGA, Calif. (1/28/14)--More than 150 credit unions participating in CO-OP Miracle Match in 2013 raised $3 million for Children's Miracle Network Hospitals--$1 million of which was matching funds provided under the CO-OP Financial Services program.
"CO-OP Financial Services established CO-OP Miracle Match on behalf of our member credit unions in 2008 as a way to encourage Credit Unions for Kids fundraisers," said Stan Hollen, president/CEO of CO-OP Financial Services. "This marks the third year in a row that the combined totals of CO-OP and participating credit unions surpassed the $3 million mark in donations."
Credit Unions for Kids is the brand under which America's credit unions, chapters, leagues/associations and business partners raise funds for 170 Children's Miracle Network Hospitals. Credit unions are the third-largest sponsor of CMN Hospitals and since 1996 have contributed over $110 million dollars to help fund  programs and services ranging from research and training to the acquisition of new life-saving equipment.
Credit unions interested in applying for match grants in 2014 under the CO-OP Miracle Match program may do so by using the link below.
The credit union fundraisers benefited 98 different children's hospitals in 34 states in 2013. More than 100 fundraisers were first-time events by the sponsoring credit union and nearly half of the participating credit unions-- about 70--were new to the CO-OP Miracle Match program.
CO-OP Financial Services also made donations of $164,500 to CMN Hospitals in 2013. The donations were made through event sponsorships, such as credit union-hosted golf tournaments, and at its own THINK Conference, held last year in Chicago.
CO-OP Financial Services has also developed an add-on transaction that allows credit union members to make a contribution to CMN Hospitals at ATMs directly "driven" by CO-OP for its clients.

N.Y. advocate hits the road to build startup CU

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BUFFALO, N.Y.  (1/28/14)--Starting up a credit union requires lots of enthusiasm, energy, supplies and--if you are lucky--generosity.

Last November Emma Smalley, financial counselor at $30 million-asset Boulevard FCU, Amherst, N.Y. sent out an email, she says, asking her credit union friends to "look around their offices" for anything they could donate to the startup Good Neighbors FCU in Buffalo, N.Y.

Her friends were generous, Smalley says.  That was the good news--but it sparked the quandary:  How to actually get the stuff.

"Light bulb moment?" said Smalley, a former member of the Credit Union Association of New York's Young Professionals Commission, "CU road trip!"

Her brainchild will result in April with "CU on the road," collecting donations from state credit unions.

"I got a really good response," Smalley told News Now. "The problem is that the commission is throughout the whole state and [GNFCU] is in Buffalo. We didn't know how we were going to collect all this stuff--so we planned a road trip."
GNFCU organizers are seeking deposit pledges, donations and in-kind donations such as general office equipment and supplies.
"CU on the road" also offers an opportunity for GNFCU to publicly acknowledge contributors for donations. Organizers have developed a website for the event, which can also be followed on Facebook and Twitter. Each stop of the event will be promoted with photos, videos and interviews with credit union employees.
Planning for GNFCU has been under way for more than a year. The credit union held its first steering committee meeting in April and has received preliminary approval from the National Credit Union Administration.

CU System briefs (01/27/2014)

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  • DES MOINES, Iowa (1/27/14)--The Iowa Credit Union Foundation hired Jaimie Miller as its executive director. Miller will support the foundation's fundraising strategies and strengthen relationships with Iowa credit unions and community partners. "Jaimie's wealth of foundation knowledge and passion for helping others will be a tremendous asset not only to the Iowa Credit Union Foundation, but to the entire credit union community," said foundation President Dale Owen. Miller previously was director of philanthropy for WesleyLife and has served as the fund development manager for Girl Scouts of Iowa and as a governmental affairs intern for PolicyWorks, a credit union compliance firm in Des Moines, Iowa ...
  • ST. PAUL, Minn. (1/27/14)--Former TopLine FCU President/CEO Harry Carter received the Credit Union Builder Award from the Minnesota Credit Union Foundation. Carter, who retired from the Maple Grove, Minn., credit union at the end of 2013, was honored for his tenure, service and excellence. Under his 14-year guidance, the $340 million-asset credit union became the first to be granted a seven-county charter. Carter also was inducted into the Credit Union House Hall of Leaders for his commitment to the people helping people philosophy.  "Harry is a strong leader who has helped lead the growth and success of credit unions, not just in Minnesota but nationwide as well," said Mark Cummins, president/CEO, Minnesota Credit Union Network ...

Strong lending forecast for Pa. CUs

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HARRISBURG, Pa. (1/27/14)--Pennsylvania credit unions are expected to experience a strong lending marketing in 2014--possibly the most robust environment in seven years--as accelerated economic growth and increased job creation will drive consumer borrowing, the Pennsylvania Credit Union Association reported.
In the third quarter of 2013, loan balances at Pennsylvania credit unions increased 2.8%, up from a 1.9% rise in the third quarter of 2012, according to the Pennsylvania Profile Third Quarter 2013 (Life is a Highway Jan. 24).
Member business loans and other unsecured loans were the fastest rising lending sectors, increasing 4.6% and 3.6%, respectively. Home equity loan and second-mortgage loan balances posted a gain of 2.5%.
Meanwhile, first mortgage loan balances rose 2.7%, similar to the 2.8% pace set in the third quarter of 2012, even in the face of higher mortgage interest rates. Credit card loan balances rose 3.1% as spending on durable goods picked up.
Over the last 12 months, savings balances are up 2.6%, while loan balances are up 4.4%, increasing the loan-to-savings ratio to 65.3% from 64% at the end 2012.
Loan delinquency rates for Pennsylvania credit unions were significantly lower than bank-reported rates. The credit union rate for more than 60 days was 1.09% in the third quarter, compared with 1.40% reported by Pennsylvania banking institutions.
The net charge-off ratio for credit unions fell to 0.53% in the third quarter--from 0.56% in the second quarter, and two basis points lower than one year earlier.
Pennsylvania credit unions reported strong net membership growth in the third quarter, rising 0.8%, identical to the 0.8% pace set one year earlier. Net memberships grew by 23,000 in the third quarter to reach 3,769,000.

Ohio face-to-face meetings focus on public funds bill

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COLUMBUS, Ohio (1/27/14)--The Ohio Credit Union League (OCUL) continues to press its state representatives to support and pass public funds legislation--House Bill 221, also known as the Community Access and Local Government Choice Act.
OCUL's Becky Hart, senior vice president of credit union advocacy; John Kozlowski, general counsel; and Patrick Harris, director of legislative and public affairs, joined Superior FCU, Lima, staff for a lunch with Rep. Matt Huffman (R-Lima).
Superior FCU's President/CEO Phil Buell, Executive Vice President of Lending Keith Eiden and Vice President of Business Development Kurt Neeper urged the speaker pro tempore for leadership support for the legislation, citing specific examples across the state where local entities had asked credit unions to serve as their depository institution. Huffman was asked to bring banks to the negotiating table, according to the league's eLumination newsletter (Jan. 22).
The following day, Medina County FCU, Wadsworth, hosted a breakfast with House Speaker Bill Batchelder (R-Medina). Again, credit unions shared specific examples of the need for public funds legislation and asked the speaker to talk to banks about compromise legislation.
"We are on to our sixth version of public funds. Credit unions have conceded along the way, and banks continue to say 'no,'" Harris said. "We need legislative leaders to join us in standing up to the banks, and finding common ground."
Those meetings--as well as three others--led up to a dinner at which Ohio House Republicans joined representatives from 10 Ohio credit unions.
League President/CEO Paul Mercer told the gathering that credit unions are willing to and want to do more, "and we are looking for ideas on how to ensure Ohio credit unions can join 25 other states in accepting public deposits. We need help from the Ohio General Assembly."
Legislators in attendance were: Batchelder; Huffman; Barbara Sears (R-Monclova Township), majority floor leader; John Adams (R-Sidney), assistant majority floor leader; Cheryl Grossman (R-Grove City), majority whip; Jim Buchy (R- Greenville), assistant majority whip; Ron Amstutz (R-Wooster), Finance and Appropriations Committee chairman; and Terry Blair (R-Dayton), State and Local Government Committee chairman.

N.J. league briefs Sen. Booker on CU issues

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NEWARK, N.J. (1/27/14)--Representatives from the New Jersey Credit Union League (NJCUL) and other industry stakeholders met last Thursday with freshman U.S. Sen. Cory Booker (D-N.J.).

From left, Greg Michlig, president/CEO, New Jersey Credit Union League; Chris Abeel, NJCUL director of government affairs; Tracy Sussmann, president/CEO, Mid-State FCU, Carteret; U.S. Sen. Cory Booker; John Fenton, president/CEO, Affinity FCU, Basking Ridge; Bob Steeves, president/CEO, Essex County Teachers FCU, Bloomfield; and Eddie Daniels, CEO, Newark Board of Education CU.
The group briefed Booker on credit unions' legislative priorities and New Jersey credit unions' financial literacy programs (The Daily Exchange Jan. 24).

Specific topics discussed included efforts to preserve credit unions' tax status, lessening the regulatory burden on credit unions, fair access to the secondary mortgage market in housing finance reform, and how credit unions can play a role in the economic recovery by altering their charters to increase member business lending and members' access to capital.

League Government Affairs Director Chris Abeel said it has been cultivating a relationship with the senator, a former mayor of Newark, for years. Booker has given a speech at an NJCUL chapter meeting, participated in a Garden Savings FCU fundraiser and attended the CO-OP Think Conference in Chicago last year.

"Senator Booker already had an excellent understanding and appreciation of the unique and important role credit unions play, and he seemed very interested in seeing that role expanded," NJCUL President/CEO Greg Michlig said after the meeting.

Booker was picked by New Jersey voters to fill the seat held for 10 years by the recently deceased Frank Lautenberg. In a special election held Oct. 31, Booker won 54% of the vote. 

Miss. CUs' QM considerations in Business Journal

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JACKSON, Miss. (1/27/14)--The Mississippi Business Journal recently looked into how the Consumer Financial Protection Bureau's ability-to-repay/qualified mortgage (QM) rule is affecting credit unions in its state--particularly the 63 low-income designated credit unions.
The Jan. 24 article noted that the Jan. 15 Federal Reserve Beige Book reported "some bankers in the Southeast are putting the brakes on any non-QM lending, others are halting mortgage lending altogether."
Credit unions, meanwhile, are working to determine what is the right thing to do for their members and communities, according to Charles Elliott, president/CEO of the Mississippi Credit Union Association (MCUA).
Elliott told the Journal that low- and moderate-income borrowers make up about 90% of assets and 87% of members for the state's credit unions.
The QM/ATR lending rules specify a debt-to-income ratio no higher than 43% and a fairly clean credit history.
A lot of the people live day-to-day, the MCUA executive noted in the article,  and are carrying debt loads in excess of 43%of their income,  referring to debts beyond home mortgages. "We're trying to digest all of this to determine what the right thing to do is."
The CFPB rule allows some exemptions from the QM/ATR rule.
Hope FCU, Jackson, is not exempt, but the $169 million-asset credit union is moving forward with mortgage lending. "We are absolutely going to go ahead and continue to lend," CEO Bill Bynum told the Journal, adding that it will be more difficult for some of its branches.
The lending rules went into effect Jan. 10.  The Credit Union National Association has advocated with the CFPB and the U.S. Congress that all credit unions should be exempt from the QM rule.
"Credit unions agree that it is always in the best interest of the credit union to assess a member's ability to repay when offering them a loan. That is what credit unions routinely did, even before the adoption of the rule," CUNA said as recently as Jan. 10 in a statement for a House hearing on the QM rule and its impact on consumers. CUNA also drove home that point when Jerry Reed, is chief lending officer at Alaska USA FCU, testified on CUNA's behalf in June before the House Financial Services subcommittee on financial institutions and consumer credit.

See resource link for Jan. 13 News Now "CUNA urges Congress, CFPB to exempt CUs from QM rule."

LSCU pushes for legislation on public deposits, foreclosures

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BIRMINGHAM, Ala., and TALLAHASSEE, Fla. (1/27/14)--The League of Southeastern Credit Unions is getting ready for a legislative marathon. In Alabama, they state legislature begins in January and runs until March or April.  In Florida, session runs from March to May.

"It's a sprint to get legislation passed in both states," said League of Southeastern Credit Unions (LSCU) President/CEO Patrick La Pine. "Obviously, we're not the only group out there pushing for their agenda items. It's about timing and preparation. If you don't have your ducks in row by January, it can be a tough year to try to get anything done proactively."

 Among the "ducks" the LSCU has in its sights in Alabama and Florida are changes to the Alabama state credit union act and public deposit and foreclosure legislation.
In Alabama, the LSCU has been working with the Alabama Credit Union Administration to update the Alabama Credit Union Act. Among the changes the league is seeking is the addition of a wild-card provision that would give the state regulator authority to grant powers to state chartered credit unions that are available to federally chartered credit unions and other financial institutions.
The league is also pressing for explicit language to guide financial institutions on charter conversions, La Pine said. "There's really no language [for charter changes] in Alabama," La Pine told News Now. "One could argue a credit union could not convert to a bank. But the regulator could also devise its own process. One of the things that we want to do is be sure there are very clear guidelines for charter conversions, such as voting thresholds and the types of notifications that need to be given to the member so they can make a well-informed decision."
A bill that updates the Alabama Credit Union Act passed the Alabama Senate Committee on Banking and Insurance unanimously last week. While most of the changes are technical in nature and non-controversial to the banking and finance industry, the legislation is a stepping stone to further legislation within the Alabama Credit Union Act, the league said (eSignal Daily Jan. 24).
House counterpart legislation was also introduced last week. That bill could be heard in the House Financial Services Committee as early as this week.
Alabama credit unions are also seeking legislative protection from end-of-the-year Alabama Credit Union Administration funds sweeps by the state government, when money from special funds are dumped into general spending. "Like most state credit union divisions, our regulator is completely funded by examination fees from state-chartered credit unions," La Pine said. "We want to make sure that our funds are not used to supplement the general fund."
In 2011, 2012 and 2013, Florida credit unions pursued legislation that would grant them authority to accept public deposits but were stymied by fierce opposition from banks. Although the Federal Credit Union Act (FCUA) authorizes all federally chartered credit unions to accept public deposits, Florida law does not grant state governmental entities the authority to deposit funds in federally chartered and/or state-chartered credit unions.
"We have a lot of credit unions that get contacted by local units of governments that want to rate shop their deposits around, and we can't accept them," La Pine said. "We continue to gain momentum with lawmakers."
La Pine said credit unions would welcome a compromise on public deposits with Florida banks, which have not been able to have to advance their own proactive legislative agenda while they "play defense" in battling credit unions on public deposits.
The LSCU will also support legislation that would streamline foreclosures with a non-judicial process. Florida has one of the highest foreclosure rates in the country, and its courts are backlogged. "Basically, this has paralyzed the docket," La Pine said. "Even the judges are in favor of a new process. We are on the same page as the bankers on this one. Hopefully, we can get this legislation advanced."
The league also supports legislation to close a loophole in a law that allows homeowners' associations to start foreclosure proceedings against homeowners who have not paid their assessments. "It allows homeowners to sell the property for pennies on the dollar," La Pine said. "Our issue is that because of this loophole, we as the lender don't even have to be notified."

Tinker FCU reopens branch demolished by tornado

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OKLAHOMA CITY, Okla. (1/27/14)--An Oklahoma credit union branch devastated by a tornado last spring is set to reopen today with a tribute to a "saving" plan no financial institution wants to offer.
Click to view larger image After being destroyed by a tornado in May, a rebuilt branch of Tinker FCU in Moore, Okla., will reopen today. (Photos courtesy of Tinker FCU)
The new Moore, Okla., branch of Tinker FCU will feature a monument made from part of an old safe deposit vault used as a makeshift storm shelter by 23 people during the May 2013 tornado. It will also feature the original building's dedication plaque, and an inscription that pays tribute to the lives saved and the spirit of Oklahomans in times of distress.
"We are all so happy to be back home and in the community," said Jan Davis, assistant vice president and Moore branch manager. "We are absolutely thrilled to reopen, and it is so apparent on the faces of all of the employees here."
Click to view larger image Only the safe deposit box vault was left standing in the aftermath of the EF5-scale tornado that hit the area near Oklahoma City May 20, 2013.
Ribbon-cutting celebrations will also feature free commemorative coins to members, and a sale of Moore/Tinker T-shirts--the proceeds of which will benefit a fund that finances storm shelters for the town's public schools.
After the storm, only the vault was left standing at the Moore branch of the $3.1 billion-asset credit union. Fourteen staffers and nine members were attended to by first responders within minutes. The emergency workers helped the group out, due to debris blocking the door, and took shelter with the refugees at a basement across the street as a second system of storms approached. The 23 people who took refuge in the credit union escaped physically unscathed (News Now May 22).
The clean-up process started days after the storm, and reconstruction on the Tinker branch was under way 62 days after the EF5 tornado swept through Moore. The credit union said that the new branch will feature a space-maximizing floor plan with the same number of offices, teller windows and drive-through lanes.