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CUs' financial performance a mixed bag for November

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MADISON, Wis. (1/3/13)--"Credit union financial performance results were a mixed bag in November as earnings increased but loan growth waned," said Credit Union National Association (CUNA) Senior Economist Steve Rick.

Rick was commenting on statistics released Thursday in CUNA's Monthly Credit Union Estimates report.

"Credit unions reported annualized earnings as a percent of assets (return on assets) of 93 basis points in November, higher than the 81 basis points reported over the last 12 months," Rick told News Now.

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"But credit union loan balances fell 0.03% in November, down from last November's pace of a 0.7% increase.

"Falling consumer confidence as a result of the fiscal cliff uncertainty kept many potential borrowers and spenders on the sidelines," he said.

What does this mean for credit unions? Rick says to "expect faster loan growth in 2013 (5%) now that households have more certainty regarding their tax bill because of the recent passage of the fiscal cliff legislation. Moreover, the fiscal resolution has led to surging stock prices which in turn could produce a "wealth effect" as consumers increase borrowing and spending and decrease savings.

Credit union assets surged 1.3%  in November because the month ended on a payroll Friday, he said.

"The growth in assets outpaced capital growth, reducing credit unions' average capital-to-asset ratio to 10.4%.  This is roughly where the ratio was one year earlier.  So it appears credit unions are managing their year-over-year asset growth with their growth in capital," Rick said.

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In November, credit union loans outstanding totaled $610 billion, up from $584.3 billion in November 2011.

Loans for this past November fell by less than 0.1% from October's 0.4% growth. Unsecured personal loans increased 1.6% over October. New auto loans grew 0.8%, credit card loans grew 0.7% and adjustable-rate mortgages grew 0.2%. Used-auto loans slipped  less than 0.1%. Credit unions' home equity  loans were down 0.5% and fixed-rate mortgages dropped 1.4%.

Savings at credit unions totaled $899.2 billion, up from $836.1 billion a year earlier.

In November, their savings balances grew 1.3%, compared with 0.1% decrease in October. Share drafts led savings growth with a 7.4% increase, while regular shares grew 1.1%. One-year certificates and money market accounts grew 0.3%. Individual retirement accounts were down 0.1%.

CU System briefs (01/04/2013)

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  • DALLAS (1/4/13)--A Dallas woman pleaded guilty Wednesday to embezzling $3.4 million from the now defunct Dallas-based Women's Southwest FCU, one of several credit unions she managed. Theresa Portillo, 34, allegedly stole the funds over 11 years, beginning in 2000 (WFAA.com Jan. 2). She faces up to 30 years in prison and a $1 million fine. The Federal Bureau of Investigation said the embezzlements were carried out when Portillo allegedly asked other financial institutions to buy certificates of deposit and put the funds into a personal account. She allegedly used the money to buy property, including nine houses; pay family medical bills; and purchase jewelry, cars, and vacations. At the time the National Credit Union Administration liquidated it in October, Women's Southwest FCU had $2 million in deposits and 743 members (News Now Nov. 1) …
  • TUCSON, Ariz. (1/4/13)--Tucson Old Pueblo CU (TOPCU) has named G. Vern Babilon as its new president/CEO, to be effective Monday.  Babilon will succeed Joseph Mirachi, who has served at the helm of TOPCU for four years. TOPCU Board Chairman Richard Prater noted Babilon has more than 22 years of credit union experience, including a stint as the industry's youngest CEO in 1989. "Vern possesses unique skills in lending, collections, marketing, and operations," Prater said in the TOPCU hiring announcement.  Directly prior to his new position, Babilon was the owner of GVBabilon Associates, a recruiting firm located in Cypress, Texas, with a focus on serving credit unions, community banks and CPA firms. The exiting Mirachi has announced plans to move to Cocoa Beach, Fla., to run Kennedy Space Center FCU there …

GoBankingRates: CUs outshine banks on rates study

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NEW YORK (1/4/13)--Credit unions have the best savings account interest rates in the nation for 2012, according to a study of savings accounts at more than 4,000 banks and credit unions.  Eight of the Top 10 U.S. Savings Account Rates were held by credit unions. That's no surprise to the Credit Union National Association (CUNA).

"Differences in structure are key," said Mike Schenk, CUNA's vice president of economics and statistics. "Credit unions are owned by their member-depositors so credit union profits go directly back to those members in the form of higher deposit yields, lower loan interest rates, and fewer and lower fees," he told News Now.

"Banks, in contrast," he added, "are owned by shareholders who demand a market rate of return on their stock investments. In 2011 U.S. banking institutions paid $78 billion in cash dividends to these stockholders, according to the Federal Deposit Insurance Corp.--monies that could have been used to provide consumers with a better deal if banks were structured like credit unions."

The research was conducted by GoBankingRates.com. It noted the national average savings account rate in the U.S. is 0.21% annual percentage yield.

TwinStar CU in Olympia, Wash., had the No. 1 spot in the study with 1.6%.

Other credit unions in the Top 10 were:

  • Houston (Texas) Police CU with 1.51%;
  • Corps of Engineers CU, Fort Worth, Texas, 1.26%;
  • People's First FCU, Tarrant, Ala., 1.25%;
  • Delaware Alliance CU, New Castle, Del., 1.05%.
  • Telhio CU, Hillard, Ohio, 1.01%;
  • State Farm FCU, Bakersfield, Calif., 1.01%; and
  • Puerto Rico CU, San Juan, P.R., 1.01%.
The only two banks on the list were Salem (Mass.) Five Direct, with 1.25%, and Biscayne Bank, Miami, Fla., with, 1%.

Credit unions also dominated in the reviews of top U.S. certificate of deposit (CD) rates in the nation in three categories: a six-month term, a one-year term, and a two-year term. Metropolitan Service CU, Philadelphia, topped all three lists with 1.47% for the six-month CD, 1.86% for the one-year CD, and 2.32% for the two-year CD.

Seven credit unions were listed in the top 10 for the six-month CD; the eight top spots for the one-year term CD were held by credit unions, and nine spots for the two-year CD were claimed by credit unions.

For the full report and rankings, use the resource link.

Crashing the GAC? Applications due Jan 10

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MADISON, Wis. (1/4/13)--Registration for the 2013 Crash the GAC-a group of young credit union leaders who will attend the Credit Union National Association's (CUNA) Government Affairs Conference (GAC)--is due Jan. 10.

The CUNA GAC will be held Feb. 24-28 in Washington D.C.

The 2013 Crash the GAC, which receives scholarships to attend from CUNA, celebrates its fourth year at the conference.

This year's Crash will coincide with the regular conference agenda established by CUNA (including scholarships for registration). However, it also will include a half-day design thinking workshop that focuses on member business lending.

Design thinking is a process that uses human-centered research, pattern recognition, and prototyping to solve problems.

As a part of the workshop, Crashers will research the needs of young small-business owners through live interviews and observation of Washington D.C. metroplex entrepreneurs.

MBL supported in Banker and Trademan editorial, NPR podcast, Va radio

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MADISON, Wis. (1/4/13)--The Credit Union National Association (CUNA)-backed legislation to raise credit unions' member business lending (MBL) cap received airing and support in a Banker and Trademan editorial, a National Public Radio (NPR) podcast in Connecticut, and a radio station  in Virginia Thursday.

WNPR, the NPR affiliate in Connecticut, featured Brian Orenstein, CEO of Groton, Conn.-based Charter Oak FCU, and Tony Emerson, CEO of the Credit Union League of Connecticut. They expressed the need for congressional action on raising the MBL cap to allow for much-needed small business lending that will provide a positive boost in the local as well as the nation's economy.

Charter Oak FCU will "only have about three or four more years of business lending to do" before hitting the cap, said Orenstein.  "So when you look at a strategic plan, it's hard to build resources like people, experienced lenders who look at quality and also have the relationships.  After five years, we would almost have to stop doing that business, and what do you say to our business lending people, what do you say in your strategic planning?"

Orenstein and Emerson noted that seeking credit union charter enhancements such raising the MBL to 27.5% of assets and supplemental capital authority will be priorities for CUNA and the leagues in 2013.

The article also noted that the banking lobby is standing in the way, and credit unions are "locked in a longstanding and occasionally bizarre struggle with the banks over the legislation."

Other media reports:

  • Banker and Tradesman, a weekly trade publication in Massachusetts, lent its support to lifting the cap in Dec. 30 editorial, "Leveling the Field," said the Massachusetts Credit Union League (eWeekly Jan. 2).  The editorial urges the commonwealth's congressional delegation to support the effort. "Massachusetts' congressional and senate delegation should do its best to ensure that 2013 is finally the year that credit unions have the same ability to provide loans to small businesses as their banking industry counterparts," it said. The editorial was accompanied by a news article, "Credit Unions Push for Higher Commercial Lending Cap."
  • In Virginia, Newsradio WINA's "Morning News with Rick and Jane," featured Rhett A. Buttle,  national outreach and governmental affairs, the Small Business Majority, which does research with small business owners. "Community banks and credit unions are lifeline lenders," Buttle said. "They are in the community, they know the businesses." He also discussed the organization's work with CUNA in bringing small business owners to Congress in support of raising the MBL cap. "We're really agnostic as to where the money comes from, but we are for pragmatic solutions to get small businesses going," Buttle told the station.
To access the full reports, use the links.

Experian: CUs made up 124% of new-auto loans

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MADISON, Wis. (1/4/13)--Credit unions accounted for 12.4% of new-vehicle loans in the third quarter, an increase from 10.5% in same period last year, said Experian Automotive.

It was the fourth consecutive quarter of market share gains for credit unions (Automotive News Jan. 2)

Credit Union Direct Lending (CUDL) Ontario, Calif., passed one million new and used cars and trucks in the dealer inventory listed on its site. That is an increase of more than 50% from a year earlier. CUDL increased its dealerships by 1,000 to 7,000 during 2012, said Phil Maniaci, senior vice president of CUDL Automotive.  

Bill Paschen, finance director for Jim Click Auto Group, Tucson, Ariz., told Automotive News he values the relative small size and local focus of credit unions. Credit unions also can be more flexible on loans, Paschen said.

Also, members are loyal to their credit unions, said Ralph Larson, finance and insurance director for Dick Hannah Dealerships in Vancouver, Wash. When a member's credit union found out the member was financing a car with someone else, it would often beat the offer. So, Larson started a policy of giving the credit union that financed the member's trade-in the chance to match other offers.

News Now's Top 20 most-requested stories for 2012

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MADISON, Wis. (1/4/13)--An article about Financial Partners CU's agreement to provide surcharge-free ATM access at all Walgreens in California was the most-requested News Now story of 2012.

Rounding out the top five stories were three articles related to security issues and an article noting credit unions' reputation.

The Top 20 stories of 2012 included:

20. NCUA names risks as 2012 supervisory priority

ALEXANDRIA, Va. (1/5/12)--While pointing out in its first letter to credit unions of the year (12-CU-01) that credit union finances continue to improve, the National Credit Union Administration (NCUA) also provided credit unions with a heads up on the risk issues it will be particularly tracking this year.

19. Survey shows continuing growth in CU reputation

WASHINGTON (2/23/12)--Credit unions outshone banks in consumers' perceptions of safety and soundness with 40% of respondents to a recent poll saying they believe credit unions are the safest financial institutions, compared to 34% naming banks. Nineteen percent of respondents said they trusted both types of institutions equally.

18. Gov. signs Calif. homeowner bill of rights

LOS ANGELES (7/13/12)--California Gov. Jerry Brown Wednesday signed the "Homeowner Bill of Rights" into law in Los Angeles. The bill will go into effect Jan. 1. Credit unions will be impacted by the legislation, which is the first of its kind in the U.S.

17. Compliance: Three questions CEOs should ask staff

WASHINGTON (3/9/12)--The Credit Union National Association's (CUNA) Comp Blog has released its latest compliance wrap-up, a monthly CompBlog feature that, in part, suggests important questions that credit union CEOs should be asking members of their staff.

16. New customer rankings: CUs only FI rated excellent

WABAN, Mass. (2/24/12)--Credit unions were the only financial institutions to receive "excellent" ratings in the Temkin Experience Ratings, which ranks the customer service across 18 industries. Credit unions ranked third across all industries.

15. Man deposits 20 years' worth of coins at CU

HERNDON, Va. (6/12/12)--George Shoemaker, a member of Northwest FCU, Herndon, Va., is proof that saving pocket change can pay off.

14. NCUA approves Corporate One/Southeast Corp. merger

ALEXANDRIA, Va. (2/17/12)--Corporate One FCU, Columbus, Ohio, and Southeast Corporate FCU, Tallahassee, Fla., have been officially approved to merge their operations by the National Credit Union Administration.

13. CUNA seeks CU info in massive breach

WASHINGTON (4/2/12)--The Credit Union National Association (CUNA)  is seeking specific credit union information from Visa and MasterCard in the wake of the disclosure Friday that the companies are notifying card-issuing credit unions and banks of a massive data breach at a third-party payments processor, Atlanta-based Global Payments Inc.

12. Trust in big banks collapses, CUs see largest gain

CHICAGO (7/25/12)--Only 21% of Americans surveyed trust the financial system, the lowest point on record since March 2009, according to the most recent Chicago Booth/Kellogg School Financial Trust Index. However, trust in credit unions increased, rising to 63% from 58%.

11. NCUA clarifies new call report questions' intent

WASHINGTON (1/11/12)--The National Credit Union Administration (NCUA) has clarified that new questions addressing minority credit unions and workplace diversity, which were added to fourth quarter call report documents with no explanation from the agency as to why, are required by the Dodd-Frank Wall Street Reform Act.

10. CU reps among CFPB consumer advisory board members

WASHINGTON (9/12/12, updated 1:10 p.m. ET)--Two credit union representatives are among the 25 consumer experts from outside the federal government that the Consumer Financial Protection Bureau (CFPB) has appointed to form its new Consumer Advisory Board (CAB), which will provide advice to CFPB leadership on a consumer financial issues and emerging market trends.

9. Settlement could bring a $50 million cost for CUs

WASHINGTON (7/16/12)--Reduced credit card interchange rate fees--mandated as a result of an historic lawsuit settlement between merchants and credit card companies--could cost credit unions with credit card programs up to a total of $50 million, according to estimates by the Credit Union National Association (CUNA).

8. Judge throws out ATM notice lawsuit vs. PSECU

HARRISBURG, Pa. (4/6/12)--A federal judge in Harrisburg, Pa., has dismissed a lawsuit that had alleged a credit union violated the Electronic Funds Transfer Act (EFT) with improper ATM fee notification, saying in his ruling that the credit union showed undisputed evidence that an unknown third party had removed its posted notice illegally.

7. CUs on a roll as 'best of the best'

MADISON, Wis. (3/27/12)--Communities across the nation continue to recognize credit unions as the best of the best in a variety of areas.

6. CNN Money: CUs are best borrowing alternative

NEW YORK (1/17/12)--Credit unions are the best borrowing alternative for consumers who are fed up with big U.S. banks, according to a Friday CNNMoney article.

5. Mobile banking security tops 10 security threats for 2012

MADISON, Wis. (1/10/12)--While credit unions gear up for what may be radical growth in mobile banking, they also must keep in mind that mobile security is the No. 1 security issue in the list of top 10 computer security threats for 2012, according to McAfee Labs.

4. CUNA confirms Visa, MasterCard notifying CUs, banks of breach

WASHINGTON (Updated: 6:50 p.m. ET 3/30/12)--The Credit Union National Association (CUNA) has confirmed that Visa and MasterCard are notifying card-issuing credit unions and banks of a possible massive data breach involving Atlanta-based Global Payments Inc., a third-party payment processor.

3. CUs have best reputation of any sector--survey

DENVER (5/14/12)--Credit unions were rated No. 1 in a new survey in which 5,000 consumers were asked to rate the reputation of 34 business sectors.

2. Top 25 stolen passwords for 2011 announced

LOS GATOS, Calif. (1/6/12)--What was the most stolen online password of 2011? "Password." Computer users who think switching the "o" to a zero to make it "passw0rd" didn't fare much better. Both are on the list of the 25 most common passwords used on the Internet this year, according to SplashData, a provider of password management applications.

1. CU, Walgreens sign pact for surcharge-free ATMs

DOWNEY, Calif. (1/24/12)--Financial Partners CU (FPCU) in Downey, Calif., said it has introduced several new technological features and services to better serve its members, including a recently signed agreement to provide surcharge-free ATM access at all Walgreens in California.