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HR departments selective in planning for tough year

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NEW YORK (1/6/09)--Human resource departments--especially those in the finance sector--are planning for a tough year. A global survey finds that companies remain selective in planning their work force, pay and benefit cuts to weather the economy. Employees are most worried about the economic turmoil’s impact on their retirement plans, according to the survey, conducted by Mercer, a provider of consulting, outsourcing and investment services. In the survey, 81% of respondents said they expect a decline in their company’s business performance during 2009, with 35% indicating they likely will make significant work force reductions. Most respondents said they likely will curtail overall hiring, reduce salary increases and cut bonus payouts while using selective hiring to continue hiring talent to fill shortages in key skill sets. Worry about retirement investments tops the list of employee concerns, outweighing employee anxiety about job security. Eighty-three percent said they don’t expect their companies to reduce the level of employer contributions to defined contribution retirement plans, and 77% expect to review investment and administrative fees, possibly due to pressure from regulators as well as the decline in investment values. Most (73%) said they are now likely to reduce salary increases in 2009 from those originally budgeted, with 12% indicating they would freeze wages at 2008 levels. This is is more likely in certain industries-- including banking and technology. Sixty percent expect to reduce 2009 bonus payouts based on 2008 performance, and about 75% in the financial sector likely will reduce 2009 bonus payouts. The finance sector also tops the list of industries likely to change variable pay programs. That sector is twice as likely as other sectors to do so, with 28% saying their financial companies plan to change or develop new variable pay programs. Most will hold off on defined contribution cuts and most health benefits programs are safe, with employee contributions likely to rise. The survey of more than 1,000 human resource officers and finance personnel from more than 100 countries was conducted in early November.

Washington state CUs getting second look from consumers

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ABERDEEN, Wash. (1/6/09)--More consumers in Washington state are rediscovering the credit union difference, John Annaloro, president/CEO of the Washington Credit Union League, told The Daily World (Jan. 2). One-third of Washingtonians bank at credit unions. Between December 2007 and June 2008, roughly 62,000 opened new member accounts. Great Northwest FCU, Aberdeen, experienced an increase in new accounts--likely due to the comfort zone it provides, said Karen Burkhalter, CEO. The credit union’s “personal touch” in service means that it works with members individually, and helps them through a job loss or workplace injury, she told the newspaper. Credit unions don’t make negative headlines, said Marshall Ellison, president of TwinStar CU, Olympia, in the article. They also don’t do subprime loans, added Terry Fultz, CEO, Newrizons FCU, Hoquiam. However, credit unions still make loans and are well-capitalized. Newrizons serves “everyday citizens”--including those that banks “don’t want to help,” Fultz said. Overall, credit unions care about their members, making them feel like an owner, instead of a member, said Joe Robertson, CEO, Our Community FCU, Shelton. Credit unions’ cooperative principles of self-responsibility, self-help, democracy and equality are strong, the Washington league told the newspaper. For the full article, use the link.

ICU MagazineI goes digital

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MADISON, Wis. (1/6/09)--Credit Union Magazine, the flagship monthly print publication of the Credit Union National Association, has gone digital. The first digital issue is now available and features all the features in the print version, plus interactive features, such as the ability to view a single page or two pages at once, to turn pages, adjust the size for viewing, or see the entire magazine in thumbprints photos. In a video accompanying the digital debut, Editor Kathy Kuehn notes the issue’s cover story is about reverse mortgages. The issue includes a lending outlook for 2009 and tips from leading lenders. To access the magazine and view the video, use the resource link.

Tech CU adopting new strategies for 2009

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SAN JOSE, Calif. (1/6/09)--A Friday Silicon Valley/San Jose Business Journal article noted that financial institutions in the San Jose, Calif., area are adopting new strategies to cope with the economy. One of the institutions mentioned was Technology CU of San Jose. Technology CU is looking into a program that would increase debit card use to generate more point-of-sale and personal identification number-based ATM revenues, said Viktoria Earle, Tech CU controller and vice president of finance, told the newspaper (Jan. 5). The credit union also will send more information electronically to save on postage, and convert its tax forms to an electronic format, Victor Smilgys, Technology CU e-commerce vice president, told the newspaper. Technology CU will continue lending, and generating revenue with non-loan income. Technology CU has $1.2 billion in assets.

PCUA reports first Loan Trader participants

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HARRISBURG, Pa. (1/6/09)--Four member business loans totaling $411,643 were completed through the Pennsylvania Credit Union Association’s (PCUA) Credit Union Loan Trader, PCUA said Monday. The loans were listed by AmeriChoice FCU in Mechanicsburg, and were purchased by SPE FCU in State College. Secured by real estate, the loans ranged from 6.10% to 7.10% (Life is a Highway Jan. 5). SPE FCU noted the portal’s ease of use. “Once I requested access to the financial information, it was uploaded to the site and within hours I was able to view the details of the loans being offered,” said Mike Scott, small business lender, SPE FCU. PCUA said it is securing a trademark for the service. “We developed Credit Union Loan Trader to help credit unions better meet the needs of small businesses,” said PCUA President/CEO Jim McCormack. “Along with the new look, we plan to add enhancements to the site going forward.”

Michigan governor signs financial ed law

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LANSING, Mich. (1/6/09)--Michigan Gov. Jennifer Granholm has signed into law a Michigan Credit Union League (MCUL)-supported bill that would allow a financial education course to satisfy part of the state’s high school math requirements. Senate Bill 834, now Public Act 316 of 2008, was signed into law Dec. 17. It was introduced in October 2007 by State Sen. Michael Switalski (D-Roseville), said MCUL. “This amendment to the Michigan high school math curriculum demonstrates how lawmakers and schools are recognizing the increasing importance of financial education,” said Patrick La Pine, league executive vice president, in the league’s newsletter (Michigan Monitor Jan. 5). “Financial literacy is an integral part of the credit union social mission, and the introduction and approval of this bill has been a priority of the MCUL. To see it signed into law with strong support is encouraging and serves as a significant step toward teaching students the money management skills that will serve them their whole lives,” La Pine told the publication.

CU System briefs (01/05/2009)

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* ATLANTA (1/6/09)--Georgia’s largest credit union, Atlanta-based Delta Community CU, announced it is giving back about $5 million in patronage rewards to its members. A strong capital base and solid financial results for the $2.8 billion asset credit union enabled the move, which will further strengthen its already well-capitalized position. “Sharing our earnings with our members is one important difference between Delta Community CU and other financial institutions,” said Rick Foley, president/CEO. “In light of the current economic climate, we believe it’s a difference that is more important than ever.” … * SAN ANTONIO (1/6/09)--After nearly 23 years, Watt Prichard has decided to step down as president/CEO of San Antonio-based River City FCU. He will continue leading the credit union until March 31. Kim Heinze, a 30-year industry veteran, will succeed Prichard, effective April 1. Heinze has served as interim president/CEO of Beaumont, Texas-based Mobiloil FCU, and in senior positions at Beaumont (Texas) Telco CU and FivePoint CU (formerly Texaco CU), Nederland (San Antonio Business Journal Jan. 2) … * STOCKTON, Calif. (1/6/09)--Premier Community CU, based in Stockton, has named Paul Yang as president/CEO. Yang has eight years’ experience in the credit union industry. Prior to joining Premier Community, Yang served as executive vice president at Eagle Legacy CU in Colorado and as president of First Choice Financial Services, a credit union service organization. He also was assistant vice president of information technology at California-based Commonwealth Central CU. Premier Community CU has more than $100 million in assets … * HARRISBURG, Pa. (1/6/09)—John Kebles retired Jan. 1 as president/CEO of Choice One Community FCU, Wilkes-Barre, Pa., said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Jan. 5). He will retrain the title of CEO and serve as an advisor until June 30. Tom Smith will succeed him. Smith’s title during the transition will be president/chief financial officer. He will assume the president/CEO title July 1. Kebles is the receipient of the prestigious 1990 Lifetime Achievement Award for Professional of the Year and the 2005 Keystone Award. Last year he was among the first class of inductees into the Credit Union House Hall of Leaders. He is past chairman of PCUA and the Pennsylvania Credit Union Foundation board … * WARMINSTER, Pa. (1/6/09)--Freedom CU, a $357 million asset credit union based in Warminster, Pa., has expanded its Business Services suite to include deposit, loan and merchant services to help small-business owners save money and manage their business finances. A June 2008 survey asking about members’ interest in Freedom’s Business Services, prompted the expansion, said the credit union … * NEW CASTLE, Del. (1/6/09)--Ruth Lawley, executive assistant at the Delaware Credit Union League for 24 years, died Dec. 18, after a nine-year battle with lymphoma. She was 70. Lawley officially retired in October, said the league’s newsletter (Together Jan. 5). The league will dedicate her former office as the “Ruth Lawley Welcome Center” at a special ceremony this month. She is survived by her husband, three daughters, six grandchildren, and stepchildren and grandchildren in Alabama …

Chairmans letter Banks costing taxpayers

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WARMINSTER, Pa. (1/6/09)--Banks are forcing credit unions to spend millions of dollars that could be used to better serve members, according to the chairman of a Pennsylvania credit union. Joe Yerkes, chairman of Freedom CU in Warminster, recently wrote a letter to the editor of The Intelligencer (Dec. 29) saying banks are misusing government bailout funds and are costing credit unions millions of dollars in litigation. Bankers’ lawsuits against credit unions take away a consumer’s right to choose a credit union for financial services, he said. The money credit unions spend defending themselves could be used to offer better rates on deposits and loans, he added. And while banks accept bailout money, credit unions have never received any type of taxpayer support, Yerkes said. Freedom CU has more than $350 million in assets.

MarylandD.C. successes a springboard for 2009

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COLUMBIA, Md. (1/6/09)--The Maryland and District of Columbia Credit Union Association’s (MDDCCUA) successes last year will serve as a strong foundation for this year, the MDDCCUA said Monday. “The results we achieved touched hundreds of credit union employees to improve retention, and millions of consumers to drive them to join a credit union,” said MDDCCUA Chairman Wes Bone (FOCUS Newsletter Jan. 5). In 2008, MDDCCUA:
* Launched an ad campaign about credit unions’ safety and soundness. Forty-four credit unions funded the campaign; * Promoted credit unions in community activities such as Money Power Day, DC Tax and Access to Capital fairs, Capital Area Asset Builders’ Financial Literacy Fair, the Eighth Annual Montgomery County Housing Fair and Financial Fitness Day, and the first Credit Union Financial Fitness Fair; * Trained more than 1,500 credit union staff and volunteers; * Funded the Growth, Governance and Services program for small credit unions; * Conducted 18 on-site Bank Secrecy Act Independent reviews, including required training to more than 500 staff and volunteers; and * Facilitated 21 credit union strategic planning sessions.
Last year, two credit union leaders--Bert Hash, MECU CEO, Baltimore, and Thom Beck, MCT FCU CEO, Rockville--also led efforts for the “Task Force to Study How to Improve Financial Literacy in the State” to become law, MDDCCUA said.