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Cirque du Soleil creation director Heward to headline ACUC

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MADISON, Wis. (1/31/13)-- Lyn Heward, director of creation for Cirque du Soleil, will be a headline speaker at the  Credit Union National Association's  America's Credit Union Conference this summer in New York City.

"Lyn skillfully relates the wonder of Cirque performances to 'wow' results for credit unions," said Jill Tomalin, CUNA senior vice president association services.

CUNA's ACUC runs from June 30 to July 3 at the Hilton New York in New York City.

Heward will speak July 2. Her presentation and book, "The Spark: Igniting the Creative Fire that Lives Within Us All," draw on her experiences as former president and chief operating officer of Cirque's creative content division, where she helped bring to life Cirque masterworks. Heward's presentation takes audiences behind the stage to explore the nature and origins of creativity.

Heward joins The New York Times best-selling author Malcolm Gladwell and retired White House Military Officer Lt. Col. Robert Darling as featured speakers at ACUC. The conference also includes a slate of thought-leader breakout sessions ranging from leading in a multi-generational environment to assessing one's credit union in the new economy. 

Among the operational topics on the slate are: Generating non-interest income, the future of payments and effectively managing lending risk.

Study's top kudos for rates go to CU, Oklahoma

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EL SEGUNDO, Calif. (1/31/13)--Oklahoma financial institutions offers consumers the best savings rates in the country and New Jersey's Rutherford Postal District Employees FCU is the financial institution that offers the best savings rate, according to a new study. It compares savings account interest rates offered by more than 4,000 local credit unions and banks.

Go Banking Rates calculated the average savings account rate in every state, according to its database, and ranked each state in order of highest average savings account rates to lowest.

Members of Rutherford (N.J.) Postal District Employees FCU can take advantage of a 2.52% annual percentage rate (APR), the rating company said.

The top states and their average for savings rates are:

  • Oklahoma (0.34% APR);
  • Rhode Island (0.32%);
  • Alabama (0.29%);
  • (tie) North Dakota (0.28%);
  • Utah (0.28%); and
  • Vermont (0.28%).
Four states (Florida, Iowa, Nebraska and Pennsylvania) tied for the worst account rate APR at 0.22%, while five states (Hawaii, Massachusetts, New Mexico, Virginia and West Virginia) and Washington, D.C. tied for the second lowest rates at 0.23%.

Hacktivist group calls off cyberattacks, diligence advised

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WASHINGTON (1/30/13)--A group of hacktivists allegedly responsible for distributed denial of service (DDoS) attacks against 22 large U.S. banks and at least two credit unions announced Tuesday it is calling off the attacks. However, that doesn't mean all such attacks will stop.

The Credit Union National Association has reached out to and is working with the U.S. Treasury's Financial Services Sector Coordinating Council for Critical Infrastructure Protection and Homeland Security to ensure credit unions' interests are represented in the federal government's efforts to help deal with any future attacks.

DDoS attacks typically are conducted for political or ideological reasons, according to Mike Saylor, vice president of technology at the Texas Credit Union League. "There are other reasons for conducting DDoS attacks, but these are the most prevalent, and this type of attack will  continue into the foreseeable future," he said in the league's newsletter (LoneStar Leaguer Jan. 29).

The al Qassam Cyber Fighters' message on Pastebin, an Internet message board, said its attacks are suspended because YouTube removed a trailer advertising of an anti-Muslim film, "The Innocence of Muslims."

It said the group "lauds this positive measure of You Tube and on this basis suspends this operation and plans to give a time to Google and U.S. government to remove the other copies of film as well. During the suspension of Operation Ababil, no attack to U.S. banks would take place by al-Qassam cyber fighters" (Bank Info Security Jan. 29).

The DDoS campaign--the group's second campaign within six months--began its eighth week of attacks Monday. Tuesday's message said the victims of its attacks included the $3.8 billion asset Patelco CU, Pleasanton, Calif., whose website was down five hours, and $1.6 billion asset University CU, Austin Texas, whose site was down two hours. The Pastebin post also named a who's who list of 22 big banks, including Bank of America, Wells Fargo & Co., Capital One, Citibank and JPMorgan Chase. The credit unions emphasized that no member data was compromised during the attacks.

Denial of service attacks have been around a while, said Saylor. "The first DDoS was in the 1880s when teenagers brought down our first phone system."  DDoS attacks a target, such as a website or a network, by flooding the targeted systems with large volumes of data until the systems are overwhelmed and cannot process the data fast enough, Saylor said. The system typically shuts down or freezes.

He advised credit unions to "be diligent. If you start to see degradation in your systems, then you must be timely in your response and communication." Here are four steps to take:

  • Preparation. Establish contacts, define procedures, and gather tools to save time during the attack.
  • Analysis: Detect the incident, determine its scope and involve the appropriate parties.
  • Mitigation:  Mitigate the attack's effects on the targeted environment; and
  • Wrap-up: Document the incident's details, discuss lessons learned and adjust plans and defenses.

Social media study: What makes CUs attractive to consumers

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BOSTON (1/30/13)--What makes credit unions so attractive and inviting? Better customer service tops the list, according to an analysis of more than 220,000 posts from a social media library conducted by Crimson Hexagon, a social media research group in Boston.

Nearly 17% of the posts touted credit unions' better member/customer service, said the company, which analyzed posts over 11 months to understand why consumers join credit unions.

"Operating under a different business model than their traditional counterparts, credit unions are not-for-profit, member-owned financial entities," said Crimson Hexagon. "Recently, credit unions have become an increasingly popular banking alternative for consumers in the U.S. As a result, traditional banks have come to view credit unions as formidable competition--often including key players in competitive research and social media analysis."

The group's conclusion: "At a growing rate, consumers believe that they will receive superior customer service through the credit union model," said the report.  "In fact, the proportion of conversation related to joining credit unions because of customer service has increased 20% since January 2012," it added.

"Consumers also identify with an intangible benefit of these institutions: credit union membership feels like you are part of a community," said the company.

The study is well-timed; the Credit Union National Association recently announced its key communications goals center on making more people aware of the value of credit unions.

Other reasons consumers cited in the study for making credit unions their choice included:

  • Help me build credit, raise score, cited by 15%;
  • Grant higher credit limits, 14%;
  • Lower interest rates on loans, 14%;
  • Savings on fees, 13%;
  • Credit unions foster and support community, 9%;
  • General displeasure with  previous bank, 8%;
  • Big banks are unethical, 7%; and
  • Better rewards program, 3%.
"In this industry," said the report, "credit unions uniquely enjoy the reputation of being community builders. Consumers favor these institutions because they are perceived to foster communities--both among its own members and in local areas."

"Nuanced discussions within this conversation include the belief that credit unions are genuinely concerned with leaving a positive footprint in their regional areas of operation, and they don't view their members as numbers--or dollar signs."  Although this sentiment represents 9% of the conversation, "its proportion relative to all other reasons for joining credit unions has increased 12% since January 2012."

Online retailer fed up with bank, moves biz to CU

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TEMPE, Ariz. (1/30/13)--Fed up with big banks, and striving to reach a higher level of service for its business and customers, online retailer One Mall Group announced it is moving its financial business to local Desert Schools FCU in Phoenix from a national banking conglomerate. 

Moe Kittaneh, chief financial officer and president of One Mall Group in Tempe, Ariz., announced the move Friday.

"Recently, our experience with big banks was becoming a daily struggle, being bounced around from department to department with frequent constructed issues," Kittaneh said in a press release. "It became evident that they did not value our business or the art of customer service in general. I began looking into other options both local and national; what drew me to credit unions, and Desert Schools in particular, was the one-on-one service, competitive accounts, and the distinct feeling that my business would be valued."

At a time when big banks rank low in public opinion and favorability, credit unions saw record increases in membership over the past couple years. In reporting its decision to migrate, One Mall Group cited that trend, and a mounting dissatisfaction with the practices and operations of big corporate banks, such as raising fees and lackluster customer care.

At the end of October 2011--prior to the Bank Transfer Day on Nov. 5, 2011--the Credit Union National Association reported 93.6 million credit union memberships. At the end of November 2012, CUNA reported 96.1 million memberships. So nationwide growth was 2.7% in 13 months, CUNA's Economic and Statistics Department told News Now.

"Moe Kittaneh came in and was not satisfied with the service he was getting at his bank," Mike Foreman, Desert Schools vice president of retail sales and branch operations, told News Now. "Also, Kittaneh was not happy with fees related to his account.

"It seems like the situation here was his business was frustrated with its experiences at the bank, and pleasantly surprised that our credit union could fulfill his needs," Foreman added.

One Mall Group opted to publicly announce the change to inspire other small and mid-size businesses to consider local options when deciding on banking institutions. It said the partnership will provide it better treatment and more personal service. Also, the company anticipates improved efficiency in both employee and front-end business operations.

"I really liked the idea of using a local institution and being able to meet in person with those handling our accounts," Kittaneh said. "Not only does it help the local economy, it provides us, and thus our customers, a greater level of responsiveness and care. The Desert Schools' merchant account specialist I worked with was very professional and helpful throughout the entire process, and we look forward to a successful business partnership with the credit union."

Biz Kid$ fin ed grants available from NCUF

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MADISON, Wis. (1/30/13)--Applications for Biz Kid$ Financial Education Grants are available from the National Credit Union Foundation (NCUF) through March 31.

"There is a need to improve the financial literacy skills of the youth in America, and Biz Kid$ is the perfect vehicle to address that need," said Danielle Brown, NCUF Biz Kid$ program coordinator. "We are looking to fund innovative programs that improve the financial education of youth through the use of the Biz Kid$ program and encourage you to apply."

Biz Kid$ teaches kids about money and business. The financial literacy initiative, launched in 2008, includes an award-winning TV series, free classroom curriculum, outreach activities and a website targeting children 9-16 years old. 

NCUF organizes fundraising and outreach for the program. A coalition of more than 290 credit unions and affiliates nationwide have helped fund Biz Kid$.

The Biz Kid$ Financial Education Grant objective is to engage the credit union movement in building students' financial literacy and economic education skills while increasing awareness and use of Biz Kid$. Funds may not be used as a cash donation to a third party.

Each project should incorporate Biz Kid$ materials.

Eligible applicants include credit unions, credit union service organizations, state credit union associations, state credit union foundations, and other organizations owned or controlled by credit unions.

CU System briefs

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  • TULSA, Okla. (1/30/13)--A man treated at a local hospital for a gunshot wound was charged with the Jan. 23 robbery of Tulsa Teachers CU, Tulsa, Okla. During the robbery, a man wearing a ski mask jumped over a counter and demanded money. He placed an undisclosed amount into a backpack before taking funds from the cash drawers at another counter. A security guard chased the robber and fired several shots at him after he refused to surrender. Dehrain Eugene Berry Wilson, 22, was discovered later on the floor of a nearby home with a gunshot wound to his left arm. He was treated and charged with robbery with a dangerous weapon. Police allegedly found clothing matching the robber's and large amounts of cash at the home, plus a loaded revolver and ski mask outside a fenced yard (Tulsa World Jan. 27) …
  • BOSTON (1/30/13)--Patricia Piscioneri, 67, of Adams, Mass., faces up to 30 years in prison and a $1 million fine after pleading guilty Jan. 17 to embezzling $160,000 from the former Adams Municipal Employees FCU, which she managed. She also pleaded guilty in federal court to making false entries into the credit union's books. The thefts occurred between 2001 and 2005. Piscioneri allegedly created fraudulent loan accounts in the names of members and deposited the proceeds into her personal account or the accounts of her husband and relatives, or used the money to pay off previously fraudulent loans.  She also allegedly created fraudulent loan documentation such as applications and promissory notes, forged signatures and created false entries into the credit union's accounting system.  Sentencing has been set for April 25 (iBerkshires.com Jan. 28) …
  • NEW BERLIN, Wis. (1/30/13)--Landmark CU CEO Ron Kase--who led the New Berlin, Wis.-based credit union to a milestone $2 billion in assets in September--is retiring after 39 years with the credit union. In 1973, he joined what was then Chabelco CU as manager. It had one location, $2 million in assets, four employees and more than 2,300 members. Today, Landmark has 28 branches, more than 500 employees and more than 200,000 members. Kase was named Credit Union Hero of the Year by Credit Union Magazine in June. After retirement, he will remain on Landmark's board of directors. He will be succeeded by Jay Magulski …
  • HERNDON, Va. (1/30/13)--Taking charge at Northwest FCU in Herndon, Va.--one of the biggest U.S. credit unions, with $2.5 billion in assets and serving 117,000 members--is new President/CEO Chris McDonald. He succeeds Gerrianne "Winky" Burks, who retired after a 41-year career at the credit union. McDonald has 28 years of experience working in the credit union industry, most recently serving as CEO of Andrews FCU in Suitland, Md. He first began working with Northwest FCU last fall, collaborating with the board and senior management team to ensure a smooth transition of leadership …
  • FENTON, Mo. (1/30/13)--Dennis Sommer, president/CEO of Alliance CU in Fenton, Mo., announced he will retire March 1. His retirement ends a 40-year career in the credit union industry--28 years as Alliance's president/CEO. Sommer joined the credit union--then called Emerson Community CU--in 1985 as president/CEO.  At the time, the credit union had $18 million in assets and served about 9,000 members, mostly employees of Emerson Electric. Today, Alliance has more than $196 million in assets and serves more than 17,000 members. Alliance is the 11th largest credit union in Missouri. Sommer will be succeeded by Tim Stephens, Alliance executive vice president ...

NJ governor conditionally vetoes foreclosure bill

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HIGHTSTOWN, N.J. (1/30/13)--N.J. Gov. Chris Christie Monday conditionally vetoed a bill that would help transform foreclosed properties into affordable housing.

"The concept of the bill is good, but there were issues on how to finance it, which the governor indicated in his comments," Chris Abeel, the New Jersey Credit Union League's director of government affairs, told News Now. The league had not taken a position on the bill.

The bill would have established the New Jersey Residential Foreclosure Transformation Act to allow the New Jersey Housing & Mortgage Finance Agency to purchase abandoned homes under foreclosure and convert them into affordable housing units (The Daily Exchange Jan. 29).

In his veto message Christie said the bill would rely on the "unavailable and, in some cases unidentified, state funding sources."

In November, Christie vetoed a similar measure, which was combined with a proposal for expedited foreclosure of abandoned properties through a summary judgment process. The league did not take a position on that bill, either, Abeel said.

The legislature passed the summary judgment measure (S-2156) on a stand-alone basis which the governor approved in December. That bill was supported by NJCUL.

Christie also conditionally vetoed legislation that would have immediately raised the minimum wage to $8.50 and tied automatic annual increases to the Consumer Price Index. Abeel said the league was monitoring the bill on behalf of its members.

NJCUL's Reality Check sets agenda

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HIGHTSTOWN, N.J. (1/30/13)--Credit Union Reality Check, a conference hosted by the New Jersey Credit Union League April 8-10 in Atlantic City, is designed take attendees out of their comfort zones--in pursuit of inspiration and insight, according Candice Nigro, the league's director of marketing and communications.

"We've always been a little different than other conferences," Nigro told News Now. "We touch on topics that make people think, that are even a little controversial. We also try to make attendees truly feel they are part of the conference."

For instance, the conference does not conduct breakout sessions. Instead, attendees remain gathered in one group throughout the conference to encourage more networking, Nigro said.

Each attendee will be equipped with an electronic polling device to respond to questions from speakers throughout the conference. Results will be displayed instantly.

"This year we are going to ask questions before the conference and ask the same questions at the end to see if anyone's responses changed based on the information provided by the speakers," Nigro said.

Paul Gentile, Credit Union National Association executive vice president of strategic communications and engagement and former president/CEO of the league, will provide the welcome address for the conference.

Other sessions and topics include:

  • Max Wolff, chief economist and senior analyst, GreenCrest Capital, "Disruptive Technology Change Can Mean Opportunity for Credit Unions";
  • Moisette I. "Tonya" Sweat, National Credit Union Administration, director of consumer compliance policy and outreach, office of consumer protection, "NCUA: Rules, Remittances, Regulatory Updates and More";
  • Tom Farin, president, Farin & Associates, "Lessons in Applying Loan and Deposit Pricing Techniques to Funding and Loan Origination";
  • Lisa Renner, co-founder and managing principal, Renner Group, "Sleeping With the Enemy: How to Collaborate With Your Competition for Exponential Growth";
  • Jonathan Bowman, CEO of Clear Picture Leadership; "Picture Perfect Solutions"
  • Ed Speed, retired CEO of Texas Dow Employees FCU, Lake Jackson, Texas, "Be Bold, Make Loans, and Don't Fear the Regulator";
  • Theran Colwell, director of strategy and business development, CUNA Mutual Group, "Sustainable Growth for Credit Unions: A Look Forward and a Look Back";

Landmark CU, Badger Campus CU to merge

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NEW BERLIN, Wis. (1/29/13)--Badger Campus CU is merging into New Berlin, Wis.-based Landmark CU, giving Landmark a presence in the Madison, Wis., market.

The merger was approved by the boards of both credit unions, but still must be voted on by Badger Campus CU members.

The merger adds a branch location in Madison and widens $2.1 billion Landmark's charter to include Dane and Iowa counties.

The target date for the merger is March 31, with the integration of Badger Campus' member accounts into Landmark's computer system this summer.

With the union, Landmark will have 31 branches.

CU System briefs (01/29/2013)

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  • PITTSBURGH (1/29/13)--The former manager of the now defunct Lawrence County School Employee FCU, New Castle, Pa., has been sentenced to 15 months in prison and ordered to repay nearly $223,000 embezzled from the credit union.  Holly Cowan of Slippery Rock Township, who pleaded guilty to embezzlement and tax evasion, also was sentenced to three years of supervised release and orderd to pay the full amount in restitution and pay the Internal Revenue Service $63,000. The theft occurred over five years. An assistant manager, Stacy L. Attisano, also of Slippery Rock, pleaded guilty to embezzlement and tax evasion and will be sentenced April 19. The women were accused of taking $811,000 by falsifying deposits and loan payments. The credit union had $2.6 million in assets and 1,805 members at the time it was liquidated by the National Credit Union Administration on March 5, 2010 (Beaver County Times Jan. 24) …
  • MOUNTAIN VIEW, Calif. (1/29/13)--First Tech FCU reported it "is well-positioned to increase member value in 2013." Its total assets rose 9.3% to $5.6 billion in 2012, while total loans rose 15.6% to $3.3 billion over loans for the period ending Dec. 31, 2011. First Tech also reported a net income of $62.8 million--a 1.15% return on assets representing a 51% increase over earnings for the period ending Dec. 31, 2011. As of year-end 2012, First Tech remains the nation's 12th largest credit union, serving 360,000 members throughout the U.S.  Its reserves total $537.2 million and results in a PCA Capital Ratio of 9.57%. First Tech will reinvest its 2012 earnings into the credit union so it can "continue delivering competitively-priced share and loan products for our members while also making significant technology and process investments that will allow us to better meet the needs of our members and their families," said Gregory Mitchell, president/CEO …
  • ALBUQUERQUE, N.M. (1/29/13)--U.S. New Mexico FCU has named Marsha Majors as president/CEO. She succeeds James Raquet, who retired this month after serving more than 10 years in the position. Majors has 27 years of credit union experience, beginning her career as a retirement account administrator and progressing to her most recent position as executive vice president. The $740 million asset credit union is based in Albuquerque and serves more than 70,000 members. It has four six branches--four in Albuquerque with a fifth to open in second quarter, plus one in Bernalillo and one in Farmington. A fifth branch will open second quarter in Albuquerque …

Verity members cartwheel for a cause in video contest

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SEATTLE (1/29/13)--A credit union is asking state of Washington residents to submit a short video that features a cartwheel, or anything representing a cartwheel, for the chance to win a $1,000 prize and a $5,000 donation to the cause of their choice. Verity CU in Seattle launched its second "Cartwheel for a Cause" contest earlier this month.

"We see this as a great opportunity to let the community get involved and tell us which causes they feel we should donate to," Melina Young, Verity's director of marketing, told the Northwest Credit Union Association. "This was a great way to brand Verity in the community without having to spend a ton of money, and it helps to teach the community about our values" (Anthem Recap Jan. 25).

"Cartwheel for a Cause spun out of our Cartwheel Checking account," Young told News Now. "For that checking account--and really across the board--our target market is moms. People appreciate the visuals that come out of cartwheels and that makes them smile. Focus groups a few years ago helped us see that and come up with name for that rewards checking program. Also, Cartwheel Checking ties in with Verity Mom."

The $385 million asset Verity previously used contest marketing to build and maintain member engagement in its Verity Mom campaign, Young told NWCUA.

The credit union launched Verity Mom in 2009 because moms and families were not being well-served by large faceless financial institutions. Moms in Washington didn't have a voice in getting what they needed financially. So Verity launched a search for a Mom and gave her platform: the Verity Mom website.

For the cartwheel contest, each video must describe the cause that person believes deserves a $5,000 donation. All causes must be a designated 501(c) (3) nonprofit organization. Also, the video must include a cartwheel somewhere.

"The creative cartwheels are one of the best parts of this contest," Young said. To see the videos, use the link.

The contest also promotes Verity's brand and visibility, gives members a voice in the credit union's community involvement, and draws attention to organizations and areas of need that might not otherwise have access to such a public forum, NWCUA said.

"In the first year, we had someone bring a $150,000 home equity line of credit to us because her sister was on the board of one of the charities that was nominated and she thought our values represented us as a place she would like to put her money," Young told the association. "Stories like that help justify the money spent to market a campaign like this."

Two runners-up will earn $1,000 donations to the causes highlighted in their videos, along with a $200 individual prize.

Pa state treasurer joins fin literacy town hall meeting

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HARRISBURG, Pa. (1/29/13)--State Treasurer Rob McCord will join the Pennsylvania Credit Union Association and Pennsylvania Credit Union Foundation on a panel about financial management basics, to be aired on the Pennsylvania Cable Network (PCN).

The financial literacy town hall meeting will address banking, credit, investments and budgets, and how to establish credit, said PCUA (Life is a Highway Jan.28).

Also on the panel will be Michael Kaczenski, PCUA chairman and CEO of Sun East FCU, Aston; Michael Wishnow, PCUA senior vice president of communications and public relations; and Matt Bergman, teacher at the Milton Hershey School.

PCN, the association and the foundation have partnered to present a series of quarterly town meetings concerning literacy.  They are open to the public.

The first in the series, "Financial Management 101," will take place Monday at 4 p.m. ET. PCN will air the educational session statewide later beginning at 9 p.m. Monday. It will re-run throughout next week.

Fin ed opportunity: Show members how to improve credit scores

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MADISON, Wis. (1/29/13)--Many U.S. consumers want to improve their credit scores, but don't know how, according to a new survey. That's where credit unions can help. Some credit unions are making the most of this opportunity to educate their members.

Most respondents--83%--in a freecreditscore.com survey have checked their credit scores; however, nearly half (42%) want to improve credit scores but don't know how.

Other survey findings provide insights into credit awareness and credit usage. Sixty-five percent of respondents indicated that they consider their credit score when engaging in credit-related activities such as maxing out a card, applying for a new card or skipping a payment. Women (68%) are more likely than men (61%) to consider their credit score before making credit usage decisions.

How are credit unions helping? Some offer workshops. Cessna Employees CU, Wichita, Kan., is offering a free Credit Enhancement seminar tonight. After the seminar, credit union loan officers will provide one-on-one counseling to help members assess their individual credit reports.

University of Virginia CU will educate members with an Understanding Credit and Credit Scores seminar on April 9. The credit union presents the seminar regularly, Glenn Birch, Virginia CU's public and media relations director, told News Now.

"Members are not always clear on how their scores are compiled," said Birch. "We point out the all the factors they should be aware of."

A consumer's credit score based on five factors, according to Fair Isaac Corp., the company that compiles credit scores. The factors include:

  • Payment history (35% of score);
  • Amounts owed (30%)
  • Length of credit history (15%);
  • New credit (10%); and
  • Types of credit (10%).
Richmond, Va.-based Virginia CU also partners with Balance, a financial assistance counseling service that can help members improve their credit scores, and offers credit score information on its web site.

UW CU, Madison, Wis., offers My Credit Score, for members with access to their credit scores through its online banking platform. My Credit Score allows members to track changes in their credit scores and view a customized in-depth analysis of their credit picture.

UW CU offers My Credit Score through Credit Karma, a provider of consumer credit score services.

Retailers' new checkout fees create a ruckus in media

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MADISON, Wis. (1/29/13)--Retailers' new "checkout fees" on credit card use took effect Sunday, and the date did not go unnoticed by dozens of the nation's top mass media or by consumers using social media to express their displeasure.

News Now counted 27 stories across the country about the ability of retailers in 40 states to charge the fees under the terms of a $7.2 billion settlement reached between credit card companies and merchants in July.  Most media reported that retailers can impose between 1.5% and 4% of the cost of the purchase and add it to the credit card bill.

The Credit Union National Association is monitoring the impact of the surcharge. (See today's News Now story, CUNA watches for credit card surcharge impact.)

Among the more prominent media were: The Wall Street Journal, FOX & Friends, ABC News, NBC News, Fox News, CBS, CNN Money, Chicago Tribune, New York Daily News, The Daily Republic, and The Motley Fool. Media in major cities such as New York; Washington D.C.;  Atlanta; Boston;  Cleveland; Seattle; and Atlanta also published or aired reports. Media in West Virginia, Kentucky, North Carolina, Nebraska, Alabama, Kentucky, and Illinois carried stories on Sunday and Monday.

Most stories warned consumers that if they used a credit card, they should check for the fee. Some said to shop at businesses that don't charge the fees.

An advocacy group, Consumer Action, is widely quoted warning shoppers to be on the lookout for the fees. "Our advice is to tell them you don't like the fee and this makes you want to take your business elsewhere," said Ruth Susswein, deputy director of national priorities for the group (NBCnews.com Jan. 27).

Gerri Detweiler, director of consumer education at Credit.com, told ABC News she expects the number of merchants introducing the fee will be small at first. They likely will be smaller merchants or service providers such as accountants and massage therapists. She too advised consumers to tell the merchant if they object to the charge.

Consumers already were expressing anger about the fees on the news outlets' Facebook pages and story comment sections. Some called the fees "outrageous" and one suggested that consumers "boycott all the stores that want to charge" a fee.

Some merchants also were distancing themselves from the fees.  NBC reported that Home Depot, Sears, Target and Wal-Mart said they have no plans to introduce a credit card surcharge. Several smaller companies used social media to reassure consumers they are not introducing the fees.

The surcharge is supposed to equal the actual cost of processing the credit card transaction and can vary, based on the type of card used. Ten states have outlawed the surcharges: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

Filene: Benchmarking about sustainability, not bottom line

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MADISON, Wis. (1/29/13)--Credit unions must approach benchmarking differently than for-profit  institutions and focus on sustainability rather than the bottom line, according to a new Filene Research Institute report.   

The endgame for credit unions is sustainability--generating profits so that the institutions can continue to provide benefits to members and jobs for employees, Filene said in "Improving Peer Group Analysis for Credit Unions."

The credit union system dynamic suggests six core areas to focus on benchmarking activities and asking themselves some tough questions:

1. Asset growth: Where is the asset growth coming from (e.g., loans versus investments) and how does our growth compare to our peers?

2. Product mix: How does a credit union's product mix compare to its peers, especially with respect to capital-efficient products that provide noninterest income?

3. Interest rates: Who has the best rates and why? (The report suggests focusing on forward-looking offer rates rather than backward-looking portfolio rates.)

4. Operating expenses: Who has the best efficiency ratio and why? Does the efficiency ratio tell a credit union everything it needs to know? (The report says no and suggests an alternative measure.)

5. Credit losses: How does a credit union's delinquencies and net charge-offs compare to its peers? Internally, a credit union might ask itself how it is trending (up, down, or flat) on key measures such as the weighted-average credit score of loans outstanding or household income as a percentage of loans outstanding.

6. Capital adequacy: How does the institution's total and risk-weighted capital compare to its peers?

Filene suggests two ways to frame the benchmarking process: member value-assessment and venerable SWOT (strengths, weaknesses, opportunities and threats) analysis. 

Member-value assessment looks at the benchmarking process through the prism of providing maximum member benefits. Given the sustainability mandate, it focuses on how a credit union, relative to its peers, is managing the trade-off between--for instance--providing a large patronage payment and the consequences of that for sustainability. 

The SWOT analysis approach compares a credit union's performance with that of peers in each of the six core areas. SWOT then labels each sub-area as a member benefit, improvement opportunity, or a boost to return on assets.

The benchmarking process does have some pitfalls. If credit unions choose the wrong peers, they could learn the wrong lessons. Credit unions of similar size could have different strategic visions, commitments to branch networks or membership bases.   

Other pitfalls are: Measuring too many factors; failing to properly understand the context of their peers' successes and failures; relying only on annualized data that mask misleading one-off gains or losses; or failing to ask enough "why" questions.

Cooperative Trust names GAC Crashers

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MADISON, Wis. (1/29/13)--The Filene Research Institute's Cooperative Trust has selected 19 young credit union leaders to "crash" the Credit Union National Association's Governmental Affairs Conference, Feb. 24-28 in Washington, D.C.

The "crashers" will also attend a pre-conference design thinking workshop led by Brent Dixon, founder of Crash the GAC and The Cooperative Trust. The new workshop will focus on how to innovate around small-business lending. Design thinking is a process that uses human-centered research, pattern recognition and rapid prototyping to solve problems.

As part of the workshop, crashers will interview young Washington, D.C., area entrepreneurs about their needs.

The 2013 Crash the GAC celebrates its fourth year. CUNA's Center for Professional Development again has provided full scholarships for Crashers to attend.

Crash the GAC is a project of The Cooperative Trust is a training and development community for young credit union professionals. It began as a Filene project and is supported by multiple industry partners. CUNA Mutual Group serves as the Trust's title sponsor and PSCU, St. Petersburg, Fla., also provides support.

The 2013 Crashers are:

  • Danielle Frawley, vice president, marketing and communications, Fort Community CU, Fort Atkinson, Wis.;
  • Jennifer Tebbe, eServices branch manager, Greater Iowa CU, Ames, Iowa;
  • Chris Friederich, senior analyst, CUNA Mutual Group, Madison, Wis.;
  • Brittany Hilton, marketing specialist, Mid-Atlantic FCU, Germantown, Md.;
  • Justin Mouzoukos, assistant vice president, finance, Mazuma CU, Kansas City, Mo.;
  • Amanda Brenneman, business development officer, Maps CU, Salem, Ore.;
  • Chad Holz, manager, product portfolio strategy, University FCU, Austin, Texas;
  • Ashley Dietz, marketing coordinator, City County CU, Fort Lauderdale, Fla.;
  • Joshua Smith, advocacy officer, SchoolsFirst FCU, Santa Ana, Calif.;
  • Blake Woods, public relations and new media manager, Lake Trust CU, Lansing, Mich.;
  • Mitchell Michiels, financial architect, Best Advantage CU, Brillion, Wis.;
  • Erin Ballard, communications coordinator, AmeriCU, Rome, N.Y.;
  • Sean Flynn, assistance vice president, consumer lending, GTE Financial, Tampa, Fla.;
  • Elizabeth Weger, marketing specialist, Pathways Financial CU, Columbus, Ohio;
  • Lindsay Estok, branch manager, Seasons FCU, Middletontown, Conn.;
  • Olivia Rockers, marketing specialist, Iowa CU League, Des Moines, Iowa;
  • Ashley Pierce, accounting assistant, A+ FCU, Austin, Texas;
  • Meghan Storck, business development specialist, First Florida CU, Jacksonville, Fla.; and
  • James Marshall, marketing manager, Plane Saver CU, London, U.K.
Speaker of the House Rep. John Boehner (R-Ohio), credit union champions Sen. Mark Udall (D-Colo.), Rep. Ed Royce (R-Calif.) and Rep. Brad Sherman (D-Calif.) are among the speakers scheduled for the  2013 GAC.

House Financial Services Committee Chairman Jeb Hensarling (R-Texas), House Majority Whip Kevin McCarthy (R-Calif.), House Financial Services Committee senior member Spencer Bachus (R-Ala.), House Financial Services Committee member Rep. Gregory Meeks (D-N.Y.), Sen. Elizabeth Warren (D-Mass.), Rep. Peter King (R-N.Y.), Rep. Blaine Luetkemeyer (R-Mo.) are also on the GAC speaking schedule.

Friday is ticket deadline for Wegner Awards dinner

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MADISON, Wis. (1/29/13)--Credit union leaders and supporters looking to attend the National Credit Union Foundation Dinner Presenting the Herb Wegner Memorial Awards have a Feb. 1 deadline to purchase tickets via mail or fax and a Feb. 15 deadline to purchase tickets online.

The 25th annual dinner will take place on Feb. 25 in conjunction with the Credit Union National Association Governmental Affairs Conference in Washington, D.C.

Registrants can obtain tickets online or choose to download the form and fax or mail their completed form to NCUF. Use the links. Individual tickets for the three-course dinner are $275 each. Tables of 10 are $2,750.  

The awards ceremony will celebrate the highest national honors in the credit union movement:

  • Lifetime Achievement: Rick Craig, retired president/CEO, America First FCU, Riverdale Utah;
  • Individual Achievement: Hubert H. Hoosman Jr, president/CEO of Vantage CU, Bridgeton, Mo.; and
  • Outstanding Program: Credit Union Miracle Day.
For more information, contact Josie Collins at jcollins@ncuf.coop or 800-356-9655, ext. 4397.

NWCUA column: Taxing Oregon CUs would cost consumers tens of millions

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BEAVERTON, Ore. (1/29/13)--Taxing Oregon's credit unions would yield little in state revenue but would cost Oregonians tens of millions of dollars annually in direct financial benefits, says an op-ed column by the Northwest Credit Union Association.

The article, written by NWCUA President/CEO Troy Stang and published in The Oregonian (Jan. 25), is a response to a bank commentary about credit unions' tax status that suggested restructuring credit unions like banks. NWCUA and credit unions oppose three bank-supported bills introduced in the Oregon legislature that would end credit unions' tax status and initiate Community Reinvestment Act-like requirements for credit unions.

Preserving credit unions' tax-exemption is the top priority of the Credit Union National Association and will be the No. 1 issue at CUNA's Governmental Affairs Conference Feb. 24-28 in Washington, D.C.  (See today's News Now story, Cheney advocates for CU tax status on Hill.")

"The credit union model, regardless of a credit union's size, is as relevant and critical to consumer choice as ever before," said Stang in the article.

"As a not-for-profit institution, owned by members, the cooperative model of shared benefits stands in stark contrast to the stockholder-focused banks and the constant drive to increase profits through higher fees and loan rates," Stang wrote.

Banks criticize credit unions "for consolidating into larger institutions in order to provide better products and services to consumers" and omit the fact that credit unions pay property and payroll taxes and members pay income taxes on the earnings they receive, he said. "Without a not-for-profit alternative for consumers, there would be little incentive for banks to restrain their ever-increasing drive to grow income through escalating fees. This would impose direct harm on consumers and businesses during a time of economic difficulty," Stang wrote.

The Federal Credit Union Act was signed into law in 1934 "to make credit available through nonprofit, cooperative credit unions," said Stang. "Indeed, during the most recent recession, credit unions were increasing their support of local businesses when banks were not willing or able to, demonstrating why the role of the not-for-profit credit union is as critical today as ever before. It is no wonder that Congress and every president, Republican or Democrat, since that time has reaffirmed the right of citizens to form their own financial cooperative."

Credit union membership and assets have grown, he said, and "to Oregon credit unions, that is the litmus test of quality of service" to their 1.4 million members. "It seems Oregonians are speaking with their feet," he concluded

For the full article, use the link.

CU System briefs (01/28/2013)

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  • MONTPELIER, Vt. (1/28/13)--Jim St. Peter, senior information technology and operations executive at Williston, Vt.-based New England FCU, has been appointed to the Board of Directors of the Association of Vermont Credit Unions (AVCU). St. Peter will fill a board seat vacancy created by Matt Levandowski of Heritage Family FCU, who resigned for personal reasons (Newslines Express Jan. 25). St. Peter has been with NEFCU for 16 years. The seat's three-year-term will expire in May during AVCU's 66th Annual Meeting and Convention …

Al-Qassam DDoS attack targets CU in Texas

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AUSTIN, Texas (1/28/13)--Hacktivists say the Izz ad-Din Al Qassam Group is behind a distributed denial of service (DDoS)  attack that shut down the website and online banking access of Austin, Texas-based University FCU (UFCU) for nearly 2 1/2 hours Thursday.

The attack lasted from 11:40 a.m. to 2 p.m., said Sheila Wojcik, senior vice president of communications and corporate affairs at UFCU. "This was not a security event. Our members' data were not at risk at any time.

"Our system was not down or compromised in any way," Wojcik told News Now. "Our Internet Service Provider (ISP) noticed a high number of megahits to the site that created a bottleneck and disabled the connection" until the matter was fixed.

The credit union learned the site was down from members' chatter on Facebook and Twitter.  Its social media manager noticed the chatter and let members know the site was unavailable and provided links to alternate access.

"We redirected members on Social Media with links and access to our mobile apps. We got a lot of positive response from members for enabling them to use the mobile channel."

Beyond the social media channels, the credit union did not  issue further communications to members because "the event is over. ISP did what it should have done to provide protection," she said. "Our forensics team is reviewing the firewall protections and determining solutions to prevent another attack.

A website frequented by hacktivists boasted about the attack, and said, "Izz ad-Din al-Qassam Cyber Fighters hit three more American banks including People's United Bank, UMB Bank and University FCU and simply made them completely out of reach."  The group has claimed responsibility for several high profile DDoS attacks recently against big banks.

"We believe it was the Al-Oassam group that initiated the attack, but why UFCU? We don't know," said Wojcik. "We're small ($1.5 billion in assets) compared to the banks" that the group has hit."This was a big event. Credit unions thought that we're not vulnerable because the groups prefer to attack larger fish. This a surprise, that we are on the radar screen," she said. "All credit unions need to be on the alert. We're fortunate that our ISP worked so quickly" to stop the attack.

Va, Md CUs use 'exec profiles' to tout CUs

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RICHMOND, Va., and GERMANTOWN, Md. (1/28/13)--Two credit unions used local newspaper "executive profile" interviews of their president/CEOs to tout the values and benefits of credit unions.

Jane Watkins, president/CEO of Virginia CU in Richmond with $2.33 billion in assets, was profiled Jan. 21 in the Richmond Times-Dispatch

Watkins told the paper that nine out of 10 members surveyed rated the credit union's service quality as very good or excellent. She also described its passion for financial education and how it has set a record for attendance at its financial education program.

When Watkins first encountered the credit union in the 1970s as an auditor at an accounting firm, she was struck by Virginia CU's "warm, teamwork feel," the lack of an oppressive hierarchy and the focus of the happy staff on serving members, she told the paper.

The credit union views itself as a consumer lending organization, and provides not only car loans, but financial services such as credit cards, equity lines, mortgages and unsecured personal loans, Watkins added. This year, Virginia CU intends to add business loans, she told the paper.

James H. Norris III, president/CEO of the $90.1 million asset Montgomery County Employees FCU in Germantown, Md., was profiled online Friday in Gazette.net, which features Maryland community news online.     

With more members going online for their financial needs, there are more questions to be answered and his credit union has the employees to provide the answers, Norris told the publication. 

He also touted the credit union's state-of-the-art teller stations, upgraded drive-through system and spacious, modern lobby at its Germantown branch.

Members are given a voice in running Montgomery County Employees FCU, and they deal with fewer and lower fees than they would at banks, Norris added.

To read the articles, use the links.

Two CUs awarded affordable housing grants

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BOSTON (1/28/13)--The Federal Home Loan Bank of Boston announced Thursday it had awarded two credit unions, Coventry (R.I.) CU and Leominster (Mass.) CU, affordable housing grants to help the underserved in their communities.

Coventry CU, with $229 million in assets, received a $400,000 grant to help fund new construction of single-family homes targeting first-time homebuyers with incomes less than 80% of the area median income. It will provide homebuyers with financial planning services and homebuyer education. The homes will be designed to maximize energy-efficiency. Coventry CU will provide a construction loan and permanent financing to homebuyers.

"We applied on behalf of the Coventry Housing District--we are a partner--to fund affordable housing," David Root, president/CEO of Coventry CU, told News Now. "We're committed to $2 million in construction. It's a public policy issue for us. As homes are built, we come up with about two-thirds of the funding. The project is planned for 40 to 50 homes."

The project likely will take about three to four years, he added. Eleven people must apply for the loans before construction can begin on the homes, and so far three have applied, Root explained.

Leominster (Mass.) CU, with $620 million in assets, was awarded $30,000 to help in the rehabilitation of an 80-year-old home, using the traditional Habitat for Humanity model for a family earning less than 50% of area median income. The sponsor is providing 0% mortgage financing. Leominster CU will provide a construction line of credit and the town of Acton, Mass., will provide a grant.

"The credit union is committed to working with the communities we are in, and Habitat for Humanity is an excellent partner," John O'Brien, Leominster CU senior vice president of lending, told News Now. "This was good opportunity to work with them to help the community. We've worked with them on several projects over the years and are very happy to partner with them."

Credit union employees recently went out to work sites of two separate projects in which the credit union collaborated with Habitat for Humanity. "It was very rewarding and they got to meet the owners at the end of the visit," he added.

The Federal Home Loan Bank of Boston awarded $30.3 million to support 48 affordable housing initiatives in six New England states. Of this amount, $14.2 million was awarded as Affordable Housing Program (AHP) grants and subsidies, with the balance coming as subsidized advances or loans. The funds were awarded through member financial institutions to projects that will create or preserve 1,004 units of affordable rental and ownership housing for households earning at or below 80% of area median income.

AHP funds are used to help pay construction, acquisition, or rehabilitation costs. Member financial institutions work with local developers to apply for AHP funding, which is awarded through a competitive scoring process.

Generations FCU hosts Japanese researchers

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SAN ANTONIO (1/28/13)--Generations FCU in San Antonio saw its achievements in branch design recognized Wednesday when it hosted researchers from The Center for Financial Industry Information Systems (FISC), a non-profit research organization based in Tokyo, Japan.

Researchers from The Center for Financial Industry Information Systems, a non-profit research organization based in Tokyo, Japan, visited Generations FCU in San Antonio, Wednesday. The visit recognized the credit union's achievements in branch layout, design and use of space. (Photo provided by Generations FCU)

FISC seeks out financial-institution best-practice leaders worldwide, and provides reports and recommendations on how those practices can be incorporated into the Japanese industry. Generations participated in a research study that determined best practices for branch layout, design and use of space, said the Texas Credit Union League (LoneStar Leaguer Jan. 24).

"In Japan, space is at a premium, but we wanted to show them that it should never be a restriction on your growth potential," said Schipull. "Our HEB-Tezel location is a great example of what you can do with motivated staff. This is one of our smallest branches, but working with our architects and staff we were able to make the space work for us."

Former Borinquen FCU manager sentenced to 7 1/2 years

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NORTH PHILADELPHIA (1/28/13)--The former manager of a now defunct credit union in North Philadelphia was sentenced to 7 1/2 years of  prison for allegedly embezzling more than $2.3 million from the credit union through schemes such as laundering Internal Revenue Service (IRS) refund checks.

Ignacia "Nacho" Morales, 50,  pleaded guilty in September to charges of conspiracy to defraud the government in a case that led to the shuttering of Borinquen FCU (Philadelphia Business Journal Online and Philadelphia Inquirer Jan. 25).

The charges stemmed from activities between 2006 and June 2011 that included laundering more  than 1,000 IRS refund checks from a New York fraud ring that filed bogus tax returns. Morales allegedly kept 20% of the refunds.

He also pleaded guilty to misapplication and embezzlement, false reports on federal credit institution entries, engaging in monetary transactions in property derived from specified unlawful activity, filing false federal income tax returns, and attempted possession with intent to distribute more than five kilograms of cocaine.

Morales was also ordered to pay restitution totaling $2.3 million to the National Credit Union Administration, $7.3 million to the IRS and a special assessment of $800, and undergo five years of supervised release.

NCUA closed the credit union in July 2011. At the time, Borinquen served 8,600 members, many of them low-income Hispanics, and had deposits totaling $6 million.

Turnaround: Altura CU reports best financials in its history

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RIVERSIDE, Calif. (1/28/13)--Altura CU reported its net income has more than doubled since the end of 2011, and it ended 2012 with the best financials in the organization's history.

"This is without question the best year in Altura's history," said Mark Hawkins, CEO of the Riverside, Calif.-based credit union. "Historically, Altura has had many good years, but that was not the case during the Great Recession. So, it is very exciting to be able to report such positive results after that period of difficulty," he added.

The $665.3 million asset Altura reported a net income of $17.49 million for the year ended Dec. 31. That's more than double the $8.43 million reported at the end of 2011, when assets totaled $642.9 million. Assets increased 1.9%--the first increase since 2007. The credit union is on target with its 2012 goal, a 2% asset increase, said Hawkins.

The credit union attributed its turnaround to ongoing expense reduction, reductions in set-asides for loan losses and increased auto lending. However, the good news is tempered by the continued slow job growth in the area and ongoing lack of consumer confidence, Hawkins said.

"Consumers continue to be concerned about what is happening in the marketplace. Their focus remains on paying down debt, so our lending growth still has a ways to go. Yet, we clearly see improvement, particularly in auto lending," he said.

Altura also announced that it has developed Reliance Checking tol assist individuals with unpaid accounts and negative credit history. The account offers a regular Visa Debit Card, online banking, mobile banking and eStatements. After six months of positive account activity and paying off any checking account debits, account holders are eligible to move up to the next level in financial recovery, the Renew Checking Account. After six months of positive activity, members then become eligible for any of Altura's checking accounts.

WOCCU extends leadership program for second year

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MADISON, Wis. (1/25/13)--The World Council of Credit Unions is extending its International Credit Union Leadership Program to a second year, offering emerging leaders from Brazil, Costa Rica and the U.S. intensive short-term credit union internships to broaden their professional expertise.

"The first year of the International Credit Union Leadership Program proved to be an eye-opening and transformational experience for both the interns and their host credit unions," said Brian Branch, WOCCU president/CEO.

The program facilitates idea exchanges, promotes foreign language skills and cultural diversity, and improves problem-solving skills related to credit union development and management globally. Participating U.S. credit union leaders will learn about methods to better serve an increasingly diverse membership, including youth, low-income and Hispanic members, WOCCU said.

The program also will allow credit union professionals from Brazil and Costa Rica to work alongside U.S. credit unions' counterparts to find solutions to similar challenges. The International Credit Union Leadership Program is part of the U.S. Department of State's Professional Fellows Program and is funded by a grant from the U.S. Department of State, Bureau of Educational and Cultural Affairs, Office of Citizen Exchanges.

The program offers internship opportunities to 24 participants from the U.S., 12 from Brazil and 12 from Costa Rica through an open application and interview process that evaluates applicants' leadership skills, adaptability to new surroundings and potential to initiate change in their credit unions.

Ideal participants have intermediate Spanish-language skills. The first application process for 12 U.S. participants to intern in Costa Rica June 16 to 29 will open this April. The next internship opportunity for 12 U.S. participants will take place in Brazil in January 2014.

Online registration open for World CU Conference

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MADISON, Wis. (1/25/13)--Online registration is open for the 2013 World Credit Union Conference, presented by the World Council of Credit Unions July 14-17, in Ottawa, Canada.

The conference will feature presenters, networking and opportunities for attendees to meet with exhibitors and sponsors, WOCCU said.

In conjunction with the conference, the World Council annual general meeting will be held July 15.

WOCCU expects about 2,500 credit union professionals to attend.

CU System briefs (01/25/2013)

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  • WASHINGTON and MADISON, Wis. (1/25/13)--This is the official legal notice to all members of the Credit Union National Association's 79th Annual General Meeting (AGM), scheduled for Monday, Feb. 25, 2013, at the Washington Convention Center in Washington, D.C. The meeting will be held in conjunction with the CUNA Governmental Affairs Conference. The AGM will update member credit unions and leagues on the actions of their association over the past year …
  • CLARKSVILLE, Tenn. (1/25/13)--Starr Irvine Beach, a mother of four whose husband is deployed, is this year's winner of $1,000 in a Military Saves Challenge at Fort Campbell FCU, Clarksville, Tenn. During Military Saves Week 2012, the credit union challenged active duty and retired military personnel to open a special Military Saves Challenge Share Certificate and save $1,000 between Feb. 29 and Nov. 29, 2012. Those meeting the challenge were entered into a drawing to win $1,000 matched by the credit union. Starr, shown here with three of her four children ages 5, 6, 8 and 17,  said the money really came in handy, especially at this time of year.  She said her husband is the budget-maker and she just followed his plan. Fort Campbell FCU said it will participate in this year's Military Saves Week Feb. 25-March 2. (Photo provided by Fort Campbell FCU) …
  • WESTBURY, N.Y (1/25/13)--NEFCU, Westbury, N.Y., is the exclusive sponsor of the Newsday FutureCorps program, the largest student-driven community service project on Long Island with 14 years of service and more than 900,000 Long Island students participating. "At NEFCU, we are committed to serving the local community, especially with the recent impact of Hurricane Sandy. At this time, we believe giving back is more important than ever," said Edward P. Paternostro, president/CEO of the $1.92 billion asset credit union. The program is for all schools in Nassau and Suffolk Counties. FutureCorps projects focus on protecting the environment, providing food and clothing for the homeless, mentoring fellow students and more  …

Barks to chair St Louis Fed advisory council

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ST. LOUIS (1/25/13)--A credit union CEO has been named chairman of the Federal Reserve Bank of St. Louis's Community Depository Institutions Advisory Council (CDIAC).

Glenn D. Barks, president/CEO of First Community CU, Chesterfield, Mo., is the new chairman, succeeding Dennis Terry, an Edwardsville banker.  Barks, who has served on the council since it began meeting in 2011, will represent the regional council at biannual meetings of the Fed's Board of Governors CDIAC meetings with Fed Chairman Ben Bernanke.

The regional council meets twice a year to advise St. Louis Fed President James Bullard on the credit, banking and economic conditions experienced by financial institutions and businesses in the fed's Eighth District.  It represents Arkansas and parts of Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.

The national-level CDIAC was formed in 2010 as a means for credit unions, community banks and thrifts with assets of $10 billion or less to provide input from their district to the Fed. The Fed District Banks then established local advisory councils, with one representative chosen to serve on the national CDIAC.

Among the outgoing members of the St. Louis Fed's first CDIAC councilis William J. Rissel, president/CEO of Fort Knox FCU, Radcliff, Ky. Barks is the sole credit union representative on the St. Louis council.

Barks is not the only credit union person to serve as chairman of a regional CDIAC. In October, Albany, N.Y.-based SEFCU President/CEO Michael Castallana was named chairman of the New York Fed Bank's CDIAC. He will represent that district on the national CDIAC (News Now Oct. 25).

NCUF raises nearly $1M in supporter campaign

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MADISON, Wis. (1/25/13)--The National Credit Union Foundation has raised nearly $1 million from credit union organizations as part of its annual Supporters' Program. The program raises funds for NCUF's programs and grants while providing benefits such as heightened visibility for donors, said NCUF.

Currently, there are a total of 26 credit unions and credit union organizations that support the program, NCUF indicated.

"NCUF Supporters help provide critical support for our programs to help make financial freedom achievable through credit unions," said Bucky Sebastian, NCUF executive director. "It's also a great way for organizations to demonstrate their commitment to the credit union movement and our philosophy of 'People Helping People.'"

The deadline to become a Foundation Supporter is Feb. 1. Supporters will be recognized at NCUF's  2013 dinner presenting the Herb Wegner Memorial Awards on Feb. 25. The dinner is in conjunction with the Credit Union National Association Governmental Affairs Conference, Feb. 24-28 in Washington, D.C. A private reception will be held for NCUF supporters.

The program allows the foundation to provide assistance to credit unions and credit union members through REAL Solutions, Credit Union Development Education training, grants, Biz Kid$ and disaster relief fundraising. Additional ways to support NCUF include investing in the Community Investment Fund or by making a donation, said NCUF.

For more information, use the link.

Pa chapter hosts home buyer education TV show

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READING, Pa. (1/25/13)--With more consumers interested in pursuing homeownership, one group of Pennsylvania credit unions is educating the public about buying new homes--and raising awareness of credit unions as a source of mortgage loan expertise--on television.

The Schuylkill Valley Chapter of Pennsylvania Credit Unions presented the first in a six-part series of Home Buyer Education on Berks County Television (BCTV). The program is based on the "Seminar in a Box for Members" curriculum developed by the Credit Union National Association.

Trish Shermot, marketing and planning manager for CTCE FCU, Reading, hosted the show, which was televised Tuesday from BCTV studios in Reading.

Shermot and guests Bob Zwolinski of Sun FCU and Linda Kleinsmith of CTCE FCU discussed the home buying process and how consumers can "ready their finances" to prepare for purchasing a home.

The group's communication model was successful because all the credit unions worked collaboratively on the project instead of marketing their own credit union, said Shermot.  Their key message was "support the local credit unions." She told CUNA that one credit union reported Wednesday receiving an inquiry from a viewer.

CUNA created an agreement specifically for the public TV in the event other groups of credit unions wish to replicate the public TV model.

The group broke the seminar into six 30-minute presentations, and the next Home Buyer Education session will air Feb. 13 at 7 p.m. ET. The chapter comprises 14 credit unions, serving more than 191,600 members with more than $2.429 billion in assets.

For more information about Seminars in a Box, use the links.

CU fills void in area with donated branch

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ROCHESTER, N.Y. (1/25/13)--A Rochester, N.Y., neighborhood at risk of losing its only convenient financial institution will have services after all, thanks to Lexington Avenue FCU stepping in to fill that need.

The $18 million asset credit union became the solution after the city sought to preserve financial services in the underserved area after learning a bank would close its branch there. And in a new twist, the bank closing the branch donated that same brick and mortar to the credit union.

The credit union received a former HSBC branch from First Niagara Financial Group Inc. after the city met with First Niagara to express concern about the branch's closure. The nearest branch is about 1 1/2 miles away on the other side of the Genesee River, and it would take customers two bus rides each way to conduct their financial business, the city said.

Forty percent of the neighborhood people don't have their own transportation, Charles Casaceli, CEO of Lexington Avenue FCU, told the Democrat & Chronicle (Jan. 17).

First Niagara had acquired the building when it purchased the upstate New York branches of HSBC last spring. HSBC sold the branches to competing banks as part of a federal anti-trust requirement.

The new branch, to open in March, will be the credit union's second branch, said Casaceli.

"When First Niagara and the City Council approached us, we saw this as an excellent opportunity for government, business and not-for-profit to do something with the best of intentions for Rochesterians in mind," said Casaceli.

It was the first time the bank had ever worked with a credit union, said Suzanne Nasipak-Chapman, the bank's Rochester marketing executive. "We couldn't find an example of any other agreement" similar to this one, she told News Now. "Often there is more than one answer to a problem in any given situation. This was for the good of all parties concerned."

The donation, valued at about $200,000, includes the property title and all the building's contents, technology and furniture (Globe Newswire Jan. 15).

Paper: Data analysis is 'looking glass' into card programs

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DES MOINES, Iowa (1/25/13)--Data analysis of card programs provides a "looking glass" into credit union member behavior and is key to mining long-term mutually beneficial relationships, according to a new white paper.

The paper is written by payments processor The Members Group (TMG) and its data analysis partner IQR Consulting.

While traditional member segmentation has largely been based on demographic information, data analysis focuses on member behavior, according to the paper, "Data Analysis Points the Way Forward for Card Management Teams." With an in-depth understanding of this behavior, credit unions can better identify patterns, and gain insight to develop effective campaigns for growth.

Data analysis has three components for card-management teams. First, issuers must capture pertinent fields of data. Second, they must analyze that data to both develop and test a hypothesis. Third, and most important, data analysis must lead issuers to an action--the "What next?" of portfolio management.

For many community-based card teams, increasing transactions among existing cardholders is a chief goal. The intent is not to encourage members to spend more money, but to become the member's card of choice. Credit unions and community banks can level the playing field between themselves and their large competitors for walletshare.

With member-level analysis, including statement and credit bureau data, credit unions can understand which members are most likely to generate the revenue needed to take a portfolio to the next level.

Senate pages get fin ed, thanks to Virginia CU

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RICHMOND, Va. (1/25/13)--Youth who serve as pages and messengers in the Virginia Senate received financial education Monday from Richmond-based Virginia CU.

Click to view larger image Cherry Hedges, Virginia CU's financial education director in Richmond, presented an hour-long session on financial education Monday, which included hands-on budgeting activities, to youth who serve as pages and messengers in the Virginia Senate. (Photo provided by Virginia CU)

The 40 students, most of whom are 13 or 14 years old, are in Richmond during the General Assembly session and serve the Senate clerk's office. They come from all regions of the state and stay on course with their schoolwork while in Richmond. The financial education session was one of several offered while the General Assembly convenes. The credit union's financial-education program is in its second year.

"We have received very positive feedback from the students themselves and from the Senate staff who work with them to coordinate enrichment activities," Glenn Birch, Virginia CU's public and media relations director, told News Now. "This is an extension of the financial education programs we offer in schools, libraries, community centers, and our own facilities each year. Last year, our financial education programs reached more than 12,000 youth and adults."

"The pages who serve the Senate of Virginia are a very bright group of students," he added. "They become very engaged in the hands-on budgeting activities that our credit union's financial education director leads. It's exciting to see middle school students develop a realistic budget based on the expected take-home pay for real-world jobs and careers."

Cherry Hedges, the $2.33 billion asset credit union's financial education director, presented an hour-long session that included hands-on budgeting activities.

Based on the average income for several occupations, the students developed realistic budgets. They were randomly assigned careers as short-order cooks, child-care workers, legal secretaries, mail carriers, financial planners, physicians and others. They considered the impact of those careers on their future earning potential and learned-- based on the salaries they were assigned--to develop a realistic monthly budget.

The lesson also included information about debit cards, credit cards, cash and checks. The students then discussed the opportunity-cost of certain types of spending and the importance of managing credit as adults.

Ohio General Assembly to consider sales tax reform, revenues

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COLUMBUS, Ohio (1/25/13)--Tax reform proposals in Ohio are earning the close examination of the state's league--not because a tax on credit unions is imminent, but because local credit unions are already subject to sales and use taxes. And the league wants to make sure that burden doesn't grow.

"The governor wants to re-examine some of the taxes such as the sales tax, because there are some 140 loopholes and exemptions, and he wants to close some of those--especially with sales and use taxes," John Kozlowski, Ohio Credit Union League general counsel, told News Now. "He also is looking at reducing taxes for small businesses.

"We will be watching to see what effect it will have on state-chartered credit unions,' he added, noting that the league is "not concerned at this time, but always watchful when it comes to taxes' effects on credit unions."  

The Ohio league is monitoring the progress of bills related to sales tax reform and revenue in the state's General Assembly and their impact on Ohio credit unions.  

Unlike their federal counterparts, Ohio's state-chartered credit unions are not exempt from paying Ohio's sales and use taxes, the league explained. If many of the deductions and exemptions are eliminated, Ohio's citizens and businesses-- including credit unions--would pay more sales and use taxes for goods and services purchased (eLumination Newsletter Jan. 23).

Ohio Gov. John Kasich has said he will submit a comprehensive tax reform proposal this year, the league said.

The reforms likely will target more than 140 tax credits, deductions and exemptions--which total more than $7 billion--Ohio permits annually. A sales tax reform could be a factor in reducing or eliminating the state's personal income tax, along with increasing the severance taxes on oil and gas, the league said.

The Ohio league said it will track developments and provide updates as they arise to credit unions.

CU rewards checking gets nerdwalletspotlight

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MADISON, Wis. (1/25/13)--The benefits offered by many credit union reward checking accounts go above and beyond those included in free checking accounts, and nerdwallet.com highlighted these benefits and some credit unions that offer them in a recent article.

"Many credit unions offer rewards checking accounts that not only offer the same benefits as free checking accounts, but they also earn interest--sometimes really good interest! They also might give you little perks like ATM fee refunds to show you that they appreciate your membership," the article noted.

Rewards checking account programs highlighted in the article include:

  • McGraw-Hill FCU, New York, N.Y.'s, S3 Account, which offers a 1% annual percentage yield and monthly ATM fee refunds for account users that make one direct deposit each month;
  • The e.Rewards Checking accounts offered by ELGA CU of Burton, Mich. An APY of 1.76% on balances up to $25,000 and monthly ATM fee refunds of up to $25 are available to members that make 10 check card purchases, a minimum of one direct deposit and meet other qualifications; and
  • Deseret First CU's First Choice Checking, which offers 10-cent refunds on debit card purchases of more than $5, $25 in monthly ATM fee refunds and an APY of 1%.
To read the article, use the link.

CU System briefs (01/24/2013)

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  • OWENSBORO, Ky. (1/24/13)--The Jan. 17 robbery of Owensboro, Ky.-based Green River Area FCU has led to the arrest of James Allen Morris, 53, of Henderson, who is also a suspect in nine robberies committed between 2006 and 2013. Two of those robberies--in January 2012 and June 2012--were at the same credit union.  Morris has been charged with eight counts of first degree robbery in Henderson (surfky.com Jan. 23) …
  • MADISON, Wis. (1/24/13)--UW CU, based in Madison, Wis., announced it has awarded $300,000 to scholarship endowment funds at the University of Wisconsin's UW System campuses they serve.  These include a new endowment fund at UW-Oshkosh, and previously established funds at UW-Madison, UW-Green Bay, UW-Whitewater and UW-Stevens Point. "UW CU has been a trusted financial partner for thousands of UW System students over the years, and we know that our Wisconsin communities are strengthened when we help keep higher education financially accessible," said UW CU President/CEO Paul Kundert. In 2008, the credit union established permanent scholarship endowment funds totaling nearly $1.5 million through an online fundraising campaign. It also supports area high schools with needs-based scholarships directly to deserving students who will attend the University of Wisconsin …
  • ST. Louis (1/24/13)--Vantage CU, based in Bridgeton, Mo., officially kicked off its search Tuesday for a new spokesperson to represent the younger set in its Young & Free St. Louis  program, a Web-based initiative to address the financial needs of 18- to 25-year-olds. Applications should include a 60-second video uploaded to YouTube, a blog post and a completed personal information form. Applications are due at 5 p.m. CT on Feb. 25. A public vote will take place Feb. 27-March 11, and the new spokesperson for a one-year term will be announced March 25. Details are at YoungFreeSt.Louis.com  …
  • HARAHAN, La. (1/24/13)--Richard Turnley Jr., former CEO of Southern Parents & Teachers FCU, died Saturday (eNews Jan. 23). He was a former Louisiana Credit Union League board member, serving from 1993 to 2007. He was an ardent supporter, leader, and champion of the credit union movement while serving in the Louisiana House of Representatives and the state Senate. He began working with the credit union in 1959. Funeral services are at 11 a.m. Saturday at Camphor Memorial United Church, Baton Rouge …

Michigan First scholarships expanded

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LATHRUP VILLAGE, Mich. (1/24/13)--Michigan First CU in Lathrup Village, Mich., together with Young & Free Michigan, its young adult financial education program, is expanding its scholarships to metro-Detroit students. It has given away more than $650,000 during the past nine years.

The credit union has expanded scholarship programs for 2013 to include a $10,000 grand prize in each of three categories.

"By expanding our scholarships this year, we'll be able to make an even greater impact in the lives and futures of local students," said Michael Poulos, president/ CEO of the $625 million asset credit union.

The three scholarship categories include: a high school video contest, a high school essay contest and a college video contest. Applicants can create their response with a 60-second video or a 300-word essay. For each category, this year's question is "What would you do with $50,000?"

The three winners will receive a $10,000 scholarship, and runners up will receive $5,000 and $3,000 scholarships. The top 10 applicants in each category will be selected by online voting, and a panel of judges will select the winners.

The Michigan First Foundation--a non-profit founded in 2012 by the credit union with a focus on youth and education in metro Detroit--funds the scholarships as part of $160,000 in contributions to local charitable organizations and students each year.

In addition to the more than $50,000 awarded through the three categories, the credit union will award up to 30 scholarships each worth $1,000 to entries from selected high schools in three counties.

"This credit union was founded by Detroit teachers and education is something we believe in doing our part to support," said Poulos. "We'll continue to work with local schools, educators and communities through our scholarships, student-run credit union branches and the Young & Free Michigan program. Investing in the communities where our members live and work is a critical part of who we are."

Connecticut regulator named to NASCUS board

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ARLINGTON, Va. (1/24/13)--Mary Ellen O'Neill, director of the financial institutions division for the Connecticut Department of Banking, has been appointed to the National Association of State Credit Union Supervisors board of directors.

O'Neill is filling the unexpired term held by Mary Hughes, Idaho Department of Finance Financial Institutions bureau chief.

Mary Martha Fortney, NASCUS president/CEO, expressed NASCUS' appreciation to Hughes for her services as a board and executive committee member.

O'Neill's term will end in September 2015.

For the full board, use the link.

Filene: Engage members through tablets, smartphones

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MADISON, Wis. (1/24/13)--Credit unions need to engage members through tablet and smartphone apps and to stay abreast of those devices' adoptions, which have outpaced all other consumer technologies in history, according to a new Filene Research Institute study.

Filene's study, "There is an App for That: Engaging Members through Tablet and Smartphone Applications," addresses the questions:

  • What types of financial apps for mobile devices are currently present in the marketplace, and who are the key players?
  • How can customization of apps change employee and member behavior?  Is it worth customizing an app or is it better to go with a standard template?
  • What would a few app prototypes look like for the financial sector?
The number of U.S. tablet users more than doubled between 2011 and 2012 (eMarketer Jan. 9). In that year, eMarketer estimates that U.S. tablet users increased to 79.1 million from 33.7 million. By 2016, the number of U.S. tablet users will hit 154.5 million, eMarketer estimates.

The implications for credit unions are that they need to leverage the mobile app revolution, the study said. "Externally, consumers want a convenient mobile experience," Filene said. "Internally, credit unions want to be more responsive to member needs and increase operational efficiency.

"Yet, credit unions are dissatisfied and confused by the current app solutions set," the study added. "As smaller institutions, credit unions typically don't have development staff dedicated to create custom products or services, and instead rely on 'template-ized' and largely undifferentiated mobile apps."

The study advises credit unions looking for mobile apps opportunities to think about solving the issue of potential members and new members, by focusing less on their websites and more on their apps. An app should not be viewed as a mobile banking app, but rather as a branded app for the credit union.

Also, incorporating mobile instant messaging into an app will permit users to ask questions regarding credit union products and services, Filene said. That will allow users to exit the app and receive a push notification with an answer from a credit union representative.

Filene also advised credit unions considering mobile apps to ask these questions:

  • What is the right scenario for the credit union?
  • Should the credit union hire an internal developer or an external team to develop them?
  • Can the credit union do something noteworthy within its budget?
To download the study, use the link.

CUs poised to nab bigger share of improved housing market

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MADISON, Wis. (1/24/13)--Credit unions are poised to capture an increased share of an improved housing market in 2013--and establish themselves as the primary financial institution (PFI) of choice for American consumers.

Mortgage loans have long been considered as necessary to become a PFI. The increase goes hand in hand with the Credit Union National Association's communications strategy for 2013 is to encourage more Americans to choose credit unions as their best financial partner. (For a related News Now story, read A closer look: CUNA 2013 communications goal, lead folks to CUs as primary FI partner)

Home sales are expected to continue to rise after reaching their highest level in five years in 2012 (USA Today Jan. 23). Existing home-sales rose 9.2% last year. The National Association of Realtors Housing Affordability Index reached a record high of 198.2 November and is expected to go higher, indicating stronger household purchasing power, NAR said.

Credit unions already have captured the wave in the rising mortgage market. Credit union first mortgage originations increased 36% January through September, according to CUNA Economics and Statistics. CUNA economists expect credit union first mortgage originations to reach a record high--exceeding $100 billion in 2012.

Mortgage service providers say they are seeing more credit unions offering mortgages. CU Members Mortgage, which provides mortgage services to credit unions, signed 53 new credit unions clients in 2012 and its credit unions increased originations by 37% from 2011. In 2012, it saw a 47% increase in refinances since 2011. Purchases rose 15% during the same period.

Among the credit unions preparing for continued growth in 2013 is Partners FCU, a $1.1 billion credit union in Burbank, Calif. It partnered with CU Realty Services to offer tools that make it easier for members to buy and sell their homes.

From Partners FCU's website, members will research neighborhoods, estimate payments and find qualified real estate agents. The partnership positions the credit union as its members' first point of contact in the real estate transaction.

Consumers CU, with $430 million in assets in Oshtemo, Mich., is participating in a program designed to make home ownership more affordable for Michigan residents. First-time homebuyers in Michigan may be eligible for grants up to $5,000 through the Michigan State Housing Development Authority's Homebuyer Assistance grant program. Michigan has allocated $15 million to the grant program.

"We encourage all who feel they may qualify to contact us," said John Murphy, Consumers CU mortgage department manager. "We can then determine each homebuyer's needs to see if this beneficial grant program may work for them."

And by working with members on such a significant purchase, credit unions may become their members' PFI.

Student arrested for in-school branch robbery

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OKLAHOMA CITY (1/24/13)--In what could be a first, a high school student has been arrested after allegedly trying to rob an in-school, student-run credit union in Oklahoma City.

The incident happened at about 11 a.m. Tuesday at a branch of Oklahoma City-based Tinker FCU located inside John Marshall High School.

Rayqwonn Chatman, 16, is in custody on a complaint of attempted armed robbery (okcfox.com Jan. 22).

According to local reports, a teller was helping two other students when the robbery suspect allegedly walked up to the counter, with hands inside the pockets of his hooded jacket. He raised his right hand while it was still inside the pocket, indicating he had a gun, and told her to give him some money.

The teller told him the suspect he could be in a lot of trouble, and a witness urged him to leave. He refused and continued to stand at the counter. The teller refused to give him money and he left. Then the teller called police (NewsOK.com and NewsOn.com Jan. 22).

Chatman was arrested in the school gym.

The student branch opened in August as part of the school's academy of finance. Students can work at the branch as part of their career training, said NewsOK.com.

Social Security reclamations could mean CU losses

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MADISON, Wis. (1/24/13)--Social Security reclamations could result in potential uninsurable  losses for credit unions, said a risk alert sent Friday by CUNA Mutual Group to its bond policyholders.

The situation occurs when a member dies, and the joint account surviving spouse continues to receive Social Security payments for the deceased person via automated clearinghouse (ACH) and withdraws the funds.

For example, a husband and wife have a joint account at the credit union, and his Social Security benefits are sent via ACH to that account.  He dies, but the credit union doesn't know that. His Social Security direct deposits keep arriving into the account for several months, and the wife withdraws the funds.

The Treasury Department can send a notice of reclamation to recover the payments issued after the death. In some cases, credit unions voluntarily return the funds, even though the money is no longer in the account, said the risk alert.

In other cases, if the credit union does not respond to the reclamation notice within 60 days, the Treasury automatically debits the amount from the credit union's Federal Reserve or correspondent's account.

A credit union responding properly and in time qualifies for limited liability, but that liability may be limited to the amount of post-death benefit payments received within 45 calendar days after the death., said CUNA Mutual.

If the credit union is aware of the member's death, any post-death payments should be returned.

The alert advised credit unions to refer to the Treasury Department's reclamation rules in its Green Book for proper handling procedures.

Man shot during CU robbery in Tulsa

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TULSA, Oklahoma (1/24/13)--A man was shot while exchanging gunfire with a security guard after a branch of Tulsa Teachers CU was robbed Wednesday afternoon.

The incident occurred shortly after 1 p.m. when a man entered the credit union, hopped the counter and demanded money, said Tulsa police (TulsaWorld.com and KRMG.com Jan. 23).  Police said the guard chased the robber and fired several shots, hitting the suspect at least once. The robber fled on foot.

Later a man with a gunshot wound was discovered nearby. He was being treated at a local hospital. Identities have not been released.

No one inside the credit union was hurt.

NC CU's new ads to air during Super Bowl

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CHARLOTTE, N.C. (1/23/13)--While watching the Harbaugh brothers coach the Baltimore Ravens and the San Francisco 49ers in the Super Bowl  Feb. 3, some viewers will be treated to the unveiling of a new ad campaign by Charlotte Metro CU (CMCU).

Charlotte, N.C.-based CMCU has unveiled ad campaigns during the Super Bowl for several years. Its newest ad will debut during the first half.

While past campaigns relied on humor, this year's will showcase CMCU as a place that helps members achieve their financial goals. The campaign will run throughout 2013 and include TV, radio, billboard, print and online components. Its four ads are united by the theme, "happy place."

"There are two meanings behind 'happy place,'" said Bob Burns, CMCU president. "First, members tell us their local CMCU branch is a happy place; they enjoy the service they receive. Second, we help people reach their happy place--retirement, a new car, a vacation, a second home--whatever it is. Charlotte Metro helps people prosper."

The ads were filmed locally at sites such as the U.S. National Whitewater Center and feature uptown skyline and aerial views of uptown.

Simple Syrup of Durham, N.C., produced the campaign. "Charlotte Metro CU and its members have a unique relationship," said John Reid, executive director of Simple Syrup. The credit union sees itself as "partners who share in their members' financial successes. And in today's tenuous financial climate, Charlotte Metro wanted to remind people that banking can be a pleasant experience," he added.

While the ads introduce the "happy place" theme, CMCU will continue to use its "Like a Bank. Only Better." Tagline.

Previous campaigns include a fee pig; a woman on a date envisioning having to wash dishes at a fancy restaurant after her date's card is declined (he used CMCU's mobile banking feature to quickly transfer funds); "Don't get suckered," with distinguished-looking men in three-piece suits (traditional bankers) sucking money from unsuspecting people's wallet; and an extraterrestrial opening an account (anyone can open an account at the credit union).

To view the previous ads, use the link.

CU System briefs (01/23/2013)

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  • MADISON, Wis. (1/23/13)--A man wearing a fake fur Bucky Badger hat similar to one worn by a robber in a Jan. 11 holdup of Summit CU, Madison, Wis., has been charged with armed robbery. Randall H. Hubatch, 49, of Madison allegedly told police he wanted to go to prison and needed the money because he has $250,000 in student debt (Wisconsin State Journal Jan. 19).  He also said he thought the credit union would not care and would simply give him $500. The robber used a plastic Star Wars toy gun, wrote a note demanding $500, and told the teller not to stall because he didn't want to hurt anyone. He also wrote he would shoot anyone who followed him to his car.  Hubatch allegedly told police he was trying to mislead them because he doesn't have a car …
  • EAST LANSING, Mich. (1/23/13)--Michigan State University FCU has given a $1 million endowment to Michigan State University to establish a jazz artist-in-residence program (The Daily Telegram Jan. 21). The $2.29 billion asset credit union based in East Lansing announced the gift Sunday at a concert in honor of Martin Luther King Jr.  The program will bring established musicians such as Branford Marsalis and rising figures in the jazz world to East Lansing for a week at a time. They will work with students. The guest artists and the university's jazz groups will also perform around Michigan, with special focus on Detroit …
  • LEOMINSTER, Mass. (1/23/13)--Carol A. Southworth has been named interim president/CEO at Leominster (Mass.) CU, succeeding Paul Gilbody, who resigned after four months in the position.  Southworth is the credit union's senior vice president/retail. The credit union told local media that the board and Gilbody had different visions for the financial institution and decided to go their separate ways. The $600 million asset credit union was founded in 1954. Gilbody, a former banker, succeeded Gordon Edmonds in September (Lowellsun.com  Jan. 20) …
  • SALT LAKE CITY (1/23/13)--Bruce Bryan, Utah regional president of Chartway FCU, has been appointed to the Make-A-Wish Foundation of Utah's board of directors.  Here he talks with a Make-A-Wish child during the ceremony. Chartway's charitable arm, the We Promise Foundation, donated $325,000 to Make-A-Wish, the largest donation ever received by the Utah chapter.  We Promise also received a star to be displayed in the chapter's building. The credit union is the first organization to ever receive a star. Bryan served as president/CEO of Heritage West CU until in merged with Chartway in January 2010. He now oversees not only Heritage West, but also SouthWest Community and Utah Central CUs. The foundations make dreams come true for children struggling with life-threatening illnesses. (Photo provided  by Chartway FCU) …

Calif, Nevada CUs, leagues raise funds for Kenyan orphanage

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MADISON, Wis. (1/23/13)--Credit unions and individuals throughout California and Nevada contributed more than $16,000 in funds, of which the two state credit union leagues matched $10,000, to support the construction of a new facility for an orphanage in Kenya supported by the World Council of Credit Unions.

Click to view larger image Since September 2012, the Busia construction crew has dug a septic tank, installed a clean water system, and constructed several buildings including a community room and boys' and girls' dormitories and bathrooms in Kenya.
Click to view larger image Taylor York, 13, daughter of CoastHills FCU CEO Jeff York, raised $5,150 from California credit unions for the Busia Compassionate Centre in Kenya. (Photos provided by the World Council of Credit Unions)
The improved orphanage, Busia Compassionate Centre, started a credit union to offer formal financial services to the larger community in rural Western Kenya for the first time.

"The California and Nevada credit unions' donations allow us to complete the construction of the new orphanage facilities and to bring financial services to Busia more quickly than we imagined," said Brian Branch, WOCCU president/CEO. "The leagues' generosity and the contributions they have inspired throughout their states will make a lasting difference in the lives of more than 90 orphans and their community."

WOCCU launched the Busia Compassionate Centre campaign in June 2012 to build a better home for the orphans and to establish a credit union that would provide the Busia community's first access to financial services.

Instrumental to raising awareness and funds for the Busia campaign among California credit unions was Taylor York, 13, daughter of CoastHills FCU CEO Jeffrey York. After hearing about the Busia orphanage during a business trip to San Diego with her father in June, she began a letter-writing campaign to credit unions in her state. She helped raised $5,150.

WOCCU is organizing a Global Women's Leadership Network engagement program to Busia, Kenya, in May to visit the newly constructed orphanage and to help the credit union implement a financial literacy program. Engagement programs are open to everyone.

For more information, use the link.

Account takeovers are down, cyberattacks more frequent

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MADISON, Wis. (1/23/13)--Two studies provide credit unions a measure of progress against cyberattacks such as commercial account takeovers and distributed denial of service. On the good side, fewer cybercriminals succeeded at account takeovers in 2012. On the bad: DDoS attacks were more frequent and had more oomph.

Financial institutions became more successful at preventing account takeovers and reducing the likelihood that funds would leave a given account, said the fourth Commercial Account Takeover Survey from the Reston, Va.-based Financial Services-Information Sharing and Analysis Center (FS-ISAC), working with the American  Bankers Association

.

The data reflect financial institutions' evolving tactics to detect and prevent losses from these attacks. Among the findings:

  • Cybercriminals made 2.11 attacks per 1,000 commercial customers in first half of 2012, compared with 3.42 per 1,000 in 2011.  About 65% did not involve monetary transactions, compared with 53% in 2011 and 6% in 2009.
  • In 9% of attacks, funds left the institution, compared with 12% in 2011 and 70% in 2009. Of those, 76% were wire transfers, with 4% automated clearing house and 18% check writing or other. That compares with 96%, 4% and 0% respectively in 2011.
  • Of fraudulent transfers from financial institutions, 82% were wire transfers with 14% ACH and 4% check writing and other. That compares with 91%, 9% and 0%, respectively in 2011.
  • Thirty-nine percent of losses involved were wire transfers, 52% were ACH and 9% check writing/other.
The most effective tactics at reducing account takeover fraud, said FS-ISAC,  were:

  • Customer education;
  • Temporary shutdown of affected online customers' access;
  • Manual review of ACH/wire transactions above a certain dollar amount;
  • Analysis of customer login characteristics/patterns; and
  • Interrogation of customer sessions to detect anomalies.
In the second study, DDoS attacks increased 25% during fourth quarter 2012 against a global client base, said Hollywood, Fla.-based Prolexic Technologies. The volume was the highest number of attacks it has logged for a single quarter.

When the results were compared with third quarter 2012 results, the company also saw:

  • A 17% increase in total number of infrastructure attacks and 72% rise in application attacks;
  • A 67% increase in average attack duration --to 32.2 hours from 19.2 hours;
  • A 20% increase in average attack bandwidth from 4.9 to 5.9 Gbps; and
  • China remained as the top source country for these attacks.
When results were compared with those of fourth quarter 2011, the study found:

  • A 19% hike in total DDoS attacks;
  • A 15% increase in infrastructure attacks and 30% rise in application attacks;
  • A 6% decline in average attack duration to 32.2 hours from 34;
  • A 13% increase in average attack bandwidth to 5.9 from 5.2 Gbps.
"The take away for businesses from this Q4 report is to make sure that their DDoS mitigation provider can handle attacks of 50 Gbps in a single location," said Prolexic CEO Scott Hammack. "When attacks are this large, it's important that the provider can mitigate this volume of attack traffic in one place and distribute it effectively so it does not compromise intermediary transit providers and affect others," he added.

Wisconsin CUs saved consumers $1B since recession

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PEWAUKEE, Wis. (1/23/13)--Wisconsin credit union members saved close to $1 billion since 2007, according to the REAL Solutions Scorecard for Wisconsin Credit Unions, a report the Wisconsin Credit Union League released Monday.

Nationally, 93.3 million credit union members save $6 billion a year through more competitive rates and lower and fewer fees, according to the Credit Union National Association's Economics and Statistics Department. 

Since the start of the recession, Wisconsin credit unions also increased their lending to small businesses by 55% to compensate for a lack of business credit from banks.

CUNA and credit unions hope to increase that further by urging Congress to raise credit unions' member business lending (MBL) cap to 27.5% of assets from 12.25%. Increasing the cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

"Credit unions are united for good," said Brett Thompson, league president/CEO. "The scorecard provides a clear picture of how credit unions build financially strong, self-sufficient families, business and communities in Wisconsin."

Credit unions in the state operate 40% of all the financial institution branches in low-income areas, providing $44 million in savings for lower-income consumers. Most credit unions still offer free checking, the report said.

Wisconsin credit unions also operated 100 in-school branches that helped students save $3 million and provided hands-on business experience. Credit unions delivered 5,500 presentations to 34,000 consumers, purchased 41,330 copies of a personal finance magazine to help 382 teachers at 309 high schools teach money management, said the league.

Cooperative financial institutions also engaged close to 15,000 students in financial decision making through reality fairs and CUNA's online Money Mission game.

Credit unions also outperformed non-credit union lenders by approving 67.7% of home loans for low-income borrowers and 70.4% of home loans for minority borrowers, compared with a 57.1% and 56.5% approval rate by others, respectively.

Banking sector least trusted: At CUs, it's different

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MADISON, Wis. (1/23/13)--Two things--poor performance and unethical behavior--are the reasons why banks are the least trusted financial institutions in the world, concludes a new study. While banks may be the least trusted, consumers have again and again pointed out in other studies that credit unions are the most trustworthy of financial institutions.

"Much of the trust people place in the banking and financial services industry rests on two attributes: perceived performance and perceived behavior.  In both, banks have fared poorly," said the 2013 Edelman Trust Barometer, a global study that noted "severe drops in trust in banks over five years" with "two-thirds of markets now below 50% trust level."

Not so for credit unions, said the Credit Union National Association. Studies that extract separate information about credit unions and compare them to other financial institutions end up shining a spotlight on the credit union difference.  A key factor is credit unions' trustworthiness.

In 2012, more than half a dozen surveys about customer satisfaction and trustworthiness all gave credit unions higher marks for both than they did banks, especially big ones.  Credit unions topped satisfaction and trust surveys conducted the past year by Prudential, ath Power Consulting, the American Customer Satisfaction Index, Prime Performance's   reputation study, Temkin Group's customer service ratings, CUNA's National Voter Survey and others. 

For example, the Chicago Booth/Kellogg School Financial Trust Index consistently reported more trust in credit unions than in local and national banks, quarter over quarter, since the survey began in December 2008. (For more detail on the studies, use the link to a News Now story summarizing these.)

The Edelman Trust Barometer indicates a worldwide dip of consumers' trust in banks to 45% today from 56% in 2008.  Of the 18 countries for which the barometer has data back that far, trust in banks dropped in nine of them--eight of which are developed countries.

The industry got poor grades in small business lending and in providing home mortgage loans--two areas that credit unions have stepped in to fill when consumers could not get loans approved by banks. Fifty-six percent of those surveyed by Edelman noted last year's banking and financial services scandals. Roughly 59% said were banks behaving badly, with corruption, conflicts of interest, poor corporate culture, poor leadership, changes in the economy, lack of regulation and a too-big size all causing trust deficits.

The Edelman study focused on six areas of banking--lending to small business, providing home mortgage loans, offering credit cards, trading and investing in government debt, ensuring privacy of personal information, and overseeing initial public offerings. Fewer than 40% of informed publics in developed countries rate banks as doing well in five of them, the study said. The one exception--ensuring privacy of personal information--still remains below 50%, Edelman said. 

To read the Edelman study, which surveyed 26,000 respondents ages 25 to 64, use the link.

Grant helps Truliant assist underserved entrepreneurs

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WINSTON SALEM, N.C. (1/23/13)--Through a grant from the National Credit Union Foundation, Truliant FCU teaches business and financial skills to underserved entrepreneurs in rural North Carolina.

Click to view larger image With a National Credit Union Foundation grant, Truliant FCU helps small business owners and entrepreneurs in underserved and rural communities in North Carolina learn financial and business literacy. Students display certificates at a graduation ceremony at the credit union in Winston-Salem, N.C.
Click to view larger imageMarjorie Rorie, Truliant FCU director of community services, chats with students during the credit union's REAL Entrepreneurship class. (Photos provided by National Credit Union Foundation)
The Winston Salem, N.C.-based Truliant uses an experiential entrepreneurship training curriculum, developed by North Carolina REAL Enterprises Inc. to teach the skills.

The credit union received a grant for the REAL Entrepreneurship program last year from NCUF to cover the cost of instruction and materials for program classes.

"Our goal is to work with entrepreneurs in low wealth and rural communities to provide money management skills that improve their financial position and also build their financial strength to access more products and services," said Marjorie Rorie, Truliant FCU director of community services.

Truliant launched a six-week workshop series last year in partnership with local nonprofits. Fifty-four people in underserved areas have completed the workshops.

The credit union collaborated with the Burlington Housing Authority of Alamance County and Alamance Community College to teach the classes.

The CUNA Marketing & Business Development Council named Truliant FCU a Best Practice Award winner for its REAL Entrepreneurship program.

The partnership also received National Association of Housing and Redevelopment Officials Merit Award for job creation through entrepreneurship training.

New Jersey league announces board officers

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HIGHTSTOWN, N.J. (1/23/13)--The New Jersey Credit Union League board has announced its table officers for 2013.

NJCUL Chairman Lou Vetere, president/CEO Garden Savings FCU, Parsippany, was re-elected chairman, and Ray Del Nero, president/CEO of Merck Employees FCU, Rahway, was re-elected vice chairman (The Daily Exchange Jan. 21).

Mike Reilly, president/CEO of Central Jersey FCU, Woodbridge, and former league board secretary/treasurer, will become treasurer. Linda McFadden, president/CEO of XCEL FCU, Bloomfield, will take on the role of secretary.

The league's membership voted to split the secretary/treasurer position during its annual meeting in October.

Xceed Financial first Silver Benefactor CU for Filene

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MADISON, Wis. (1/23/13)--Xceed Financial CU in El Segundo, Calif., a longtime supporter of the Filene Research Institute, is the first natural-person credit union to support Filene as a Silver Benefactor, by contributing $25,000 annually to the institute.

"As credit unions' think-and-do tank, we rely not just on the financial support but also on the engagement of credit unions," said Mark Meyer, Filene CEO. "Teresa (Freeborn, Exceed Financial's CEO) and her leadership team at Xceed constantly raise their hands to try new ideas. Their decision to support Filene so generously is an extension of their commitment to explore constantly and to find better and innovative ways to serve their members," Meyer said.

The $751 million asset Xceed Financial has:  

  • Provided innovation, marketing and design support to Filene's original Debt in Focus pilot, eventually used by more than 500 credit unions;
  • Worked with Filene researchers on a "big data" project tracing member profitability;
  • Tested the Amazon.com credit card portal with Filene for best practices for online sales; and
  • Collaborated with Filene on a Pepperdine University Master of Business Administration intern program.  
"When we consider which organizations to support we look for tangible benefits," Freeborn said. "We look for organizations that collaborate, that support credit unions' ability to survive and thrive, that provide opportunities for our professionals to engage and make a difference. Filene provides all of this to Xceed Financial and to credit unions across North America."

Freeborn was part of the inaugural i3 innovation team in 2004. Today she is a Filene research council member, helping to guide the institute's research and innovation priorities.

PCUA: 3Q a mixed bag

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HARRISBURG, Pa. (1/23/13)--Pennsylvania credit unions reported mixed financial results in the third quarter while the state economy lost four thousand jobs, the Pennsylvania Credit Union Association said.

Loan balances increased 1.9% in the third quarter of 2012, an increase from a 1.2% rise in the third quarter of 2011 (Life is a Highway Jan. 23). Almost every loan category grew 2% or more. Mortgage loans and auto lending were the major driving forces for the increase in overall loan balances.

Net membership at Pennsylvania credit unions grew 0.8%--equal to the pace set one year earlier, PCUA said. Net memberships grew by 62,000 in the first nine months of the year to reach 3.7 million.

Asset quality numbers produced mixed results. Overall, 60-plus day dollar delinquencies decreased to 1.12% in the third quarter--a 0.03% drop compared with the third quarter of 2011. But net charge-offs rose to 0.55%--a 0.03% increase compared to the third quarter one year earlier.

On the positive side, delinquency rates fell to 1.15% at the end of 2012, down from 1.6% at year-end 2011, PCUA said. The state credit union loan delinquency rate is significantly less than the 1.80% reported by Pennsylvania banking institutions, PCUA added.

Pennsylvania credit unions reported second quarter earnings of 0.69% of average assets.

SECU launches life insurance company

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RALEIGH, N.C. (1/22/13)--State Employees CU of North Carolina has opened its own life insurance company to provide members with simplified issue term and whole life policies, single premium deferred and immediate fixed annuities.

SECU, Raleigh, N.C., held a signing ceremony to mark the opening of SECU Life Insurance Co., a new service organization. From left, McKinley Wooten, SECU board chair; Wayne Goodwin, North Carolina insurance commissioner; and Bill Umphlett, SECU senior vice president of financial advisory services. (Photo provided by SECU)
SECU Life Insurance Co. was capitalized with an initial investment of $25 million.

Non-commissioned agents who are also employees of the Raleigh, N.C.-based credit union will assist members with choosing products.

The underwriting process will be simple, with no medical exams or office involvement, SECU said.

The credit union will support the families of its youngest members by providing $1,000 in life insurance coverage to all children and teenage accountholders at no charge. Additional supplemental insurance offered at competitive pricing also will be offered.

The credit union will begin offering insurance products this summer.

CU System briefs (01/22/2013)

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  • MONROE, Mich. (1/22/13)--Sharon Broadway, 62, of Toledo, Ohio, was sentenced Thursday to at least 45 months in prison in the embezzlement of more than $2 million from the now defunct Monroe County's United Catholic CU, Monroe, Mich. Broadway, who was manager and the only employee at the tiny credit union, pleaded guilty in December to racketeering and financial institutions embezzlement. The thefts occurred over a period of 30 years (Toledo Blade Jan. 18). The credit union closed in August after state regulators discovered it was insolvent.  Broadway was sentenced in Monroe County's 38th Circuit Court to 10-240 months on the embezzlement charge and a concurrent 45-240 months on the racketeering charge. She also was ordered to pay nearly $2.6 million in restitution and was barred from working in the financial industry …
  • LAREDO, Texas (1/22/13)--A former employee of Laredo (Texas) FCU pleaded guilty Thursday to armed robbery of the credit union on Jan. 6, 2012 (Associated Press Jan.17).  Thirty-year-old Ansel Cruz faces up to 25 years in prison. Cruz was employed by the credit union through 2011. He allegedly tied up several employees and fled with an undisclosed amount of cash after the credit union closed for the day. He was described by employees as armed and wearing dark clothing with a black face covering. Employees identified Cruz from a surveillance video. He was arrested five days later …
  • SKOWHEGAN, Maine (1/22/13)--Franklin-Somerset FCU in Skowhegan, Maine, announced it has appointed Karen Greenleaf to be its new president/CEO. Greenleaf has served in that capacity for the $72 million asset credit union since the death of Cass Hirschfelt in August. Greenleaf has worked in the credit union industry for 22 years (Weekly Update Jan. 18) ...

Fla regulator bans five tellers in tax refund scheme

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JACKSONVILLE, Fla. (1/22/13)--Five former VyStar CU tellers have been banned from working at any Florida state-chartered financial institution for their alleged role in an income tax scheme in which they allegedly cashed $500,000 in fraudulent checks.

The Florida Office of Financial Regulation issued the ban after a seven-month investigation by the State Attorney's Office, the U.S. Secret Service, the Internal Revenue Service and the Jacksonville Sheriff's Office (Jacksonville Business Journal Jan. 18)

Employees of the Jacksonville, Fla. credit union helped uncover the operation in early 2012 when they reported irregular activity involving refund checks from the Internal Revenue Service. People who were not listed as the recipient of checks were trying to cash them.

The investigation led to the arrest of 17 people in Florida and New York. Some perpetrators stole identities used to create the fraudulent tax returns. Others prepared the fake returns or posed as members attempting to cash IRS checks.

The tellers from VyStar allegedly cashed the checks and gave the money to other members of the ring, even though it was against the credit union's policy. The tellers were paid $1,000 for each transaction they completed.

The scheme did not impact VyStar's financials or its members' accounts, said the credit union.

League has busy month with multiple media opps

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PORTLAND, Maine (1/22/13)--The Maine Credit Union League has provided the credit union perspective this month in multiple media interviews on topics germane to credit unions.

League comments to the media ranged from credit union efforts on financial elder abuse and new mortgage rules, to new technology, to changes and policies, to dress codes in the wake of a rash of robberies (Weekly Update Jan. 18).

The week of Jan. 7-11, Maine Public Radio reached out to the league to get credit unions' perspective on new mortgage rules issued by the Consumer Financial Protection Bureau.

"A lender isn't helping a borrower by granting a loan they can't afford," said league President John Murphy in response. "Although I think the intent of the new regulations are spot on, the million dollar question is, and it's too early to know the answer, what about these unique circumstances where people have seasonal income? Is that threshold of 43% the magic number? We will wait and see."

On Jan. 15, the league's ef­forts resulted credit unions' participation in discussion on elder financial abuse on Maine Public Radio's Maine Calling Show. Gail Richardson, president/CEO of Midcoast FCU in Bath, who is active on a task force to combat the financial exploitation of the elderly, highlighted what credit unions do to help.

The league also responded to a Bangor Daily News (BDN) inquiry for the credit union viewpoint regarding members wearing hoods into the branch. The BDN spoke with several credit unions and other financial institutions and told what steps financial institutions and other stores are taking to reduce the threat of robberies.

In De­cember, the league helped to coordinate a story for Mainebiz's Banking & Finance Issue. The story highlighted new technology credit unions are implementing, including the use of video tellers at Five County CU in Bath, and Portland-based cPort CU's adoption of new apps that allow remote deposit of checks.

Also, credit unions again were part of a special section, titled "The Big Bank Theory," in the December Portland Magazine. The section highlighted credit unions and many of their strengths.

Actor Bain of Diff'rent Strokes organized, led CU

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MADISON, Wis. (1/22/13)--Diff'rent Strokes actor Conrad Bain, who died last week, was an organizer and the first president of the Actors FCU.

Bain played Phillip Drummond in the sitcom Diff'rent Strokes. As Drummond, Bain was the straight man to the diminutive, wisecracking Gary Coleman, who played Arnold, the younger of Drummond's two adopted boys (The Guardian Jan. 18).

Bain helped found Actors FCU in New York City in 1962 to help members of his profession secure credit.

Bain outlived two of his three screen children from Diff'rent Strokes. Coleman, who faced charges of assault and disorderly conduct, died of a brain hemorrhage at age 42; Dana Plato, who played Bain's daughter died of a drug overdose at age 34.

Bain also also co-starred in the series Maude (1972-78) as Dr. Arthur Harmon, the stuffy, conservative neighbor of the title character, played by Bea Arthur.

Bain's films included Coogan's Bluff (1968), starring Clint Eastwood; Woody Allen's Bananas (1971); The Anderson Tapes (1971); and Postcards from the Edge (1990).

Today, Actors FCU has $164 million in assets.

New commissioner named at Vermont DFR

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MONTPELIER, Vt. (1/22/13)--Vermont Gov. Peter Shumlin has appointed Susan L. Donegan as commissioner of the Vermont Department of Financial Regulation (DFR), succeeding Steve Kimbell.

The department regulates state-chartered credit unions.

Donegan has been deputy commissioner of insurance since 2011, said the Association of Vermont Credit Unions (Newslines Express Jan. 18). She worked at the department from 1985 to 1990 and was the department's first director of securities regulation.

Donegan also has served as counsel to the commissioner and hearing officer at the Massachusetts Division of Insurance from 2008 to 2011. She represents Vermont at the National Association of Insurance Commissioners.

Former Commissioner Kimbell was at the center of national attention last summer when he threatened a cease and desist order against Montpelier-based Vermont State Employees FCU for using the word "bank" in marketing and advertising materials. The credit union and the commissioner eventually reached an agreement in October on the matter.

Cohenour takes Missouri CU Association helm

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ST. LOUIS, Mo. (1/22/13)--Don Cohenour will take the helm as president/CEO of the Missouri Credit Union Association, effective immediately, announced MCUA's Board of Directors Friday.

Cohenour, who was named interim president in November, succeeds Mike Beall. Beall left then to become president/CEO of the National Cooperative Business Association.

"Don Cohenour is the ideal candidate to continue driving the strategic direction of the organization," said Dennis Pierce, MCUA's board chairman. "Don's knowledge of credit unions combined with the strength of relationships built throughout his tenure will ensure MCUA maintains a strong connection with its membership."

Cohenour is an 18-year veteran of MCUA. He leaves his position as chief membership officer. In that role, he managed field representatives within the state, served as an executive field representative with all member credit unions and provided overall responsibility for credit union relationships. He also was responsible for credit union staff and volunteer development, consulting services, professional development, and all product and service sales in the state.

Cohenour also served as credit union CEO  and consultant with the Kansas Department of Credit Unions.

"I am looking forward to my new role with MCUA and my continued work with credit union advocates throughout the state," said Cohenour. "The initiatives we set in motion make this an exciting time to lead the organization and make the credit unions of Missouri grow."

Laida Garcia elected NCUF board chairman

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Laida Garcia (right), president/CEO of Floridacentral CU in Tampa, Fla., and newly elected chairman of the National Credit Union Foundation, presents past Chairman Gary Oakland with a glass gavel at NCUF's board meeting in September. Oakland has been on the board since 2005 and recently retired as president/CEO of BECU in Tukwila, Wash. (Photo provided by the National Credit Union Foundation)
MADISON, Wis. (1/22/13)--Laida Garcia, president/CEO of Floridacentral CU in Tampa, Fla., was elected chairman of the National Credit Union Foundation at NCUF's board meeting Jan.14 in Anaheim, Calif.

Other NCUF elected officers were:

  • Vice Chairman--John Radebaugh, president/CEO of the North Carolina Credit Union League;
  • Treasurer--Lee Butke, president/CEO, Corporate One FCU, Columbus, Ohio; and
  • Secretary--Winona Nava, president/ CEO, Guadalupe CU, Santa Fe, N.M.
Angela McCathran, president/CEO of People's Trust FCU in Houston, Texas, was elected to fill the seat of past NCUF Chairman Gary Oakland. Oakland, who retired as president/CEO of BECU in Seattle, Wash., left the NCUF board late last year.

Edwin Williams, president/CEO of Discovery FCU in Wyomissing, Pa., joined the NCUF board as a Credit Union National Association Board representative, occupying the seat previously held by Paul Gentile, former president/CEO of the New Jersey Credit Union League. Gentile now is CUNA executive vice president, strategic communications and engagement.  

The additional members of the NCUF board  include:

  • President--Bill Cheney, CUNA president/CEO;
  • John Graham, president/CEO,  Kentucky Employees CU, Frankfort, Ky.;
  • John Gregoire, president, The ProCon Group,  Madison, Wis.;
  • Joe Guilfoy, executive director, Indiana Credit Union Foundation, and vice president of consulting & education, Indiana Credit Union League;
  • Rudy Hanley, president/CEO, SchoolsFirst FCU, Santa Ana, Calif.;
  • Stan Hollen, president/CEO, CO-OP Financial Services, Rancho Cucamonga, Calif.;
  • Christopher Roe, senior vice president, corporate and legislative affairs, CUNA Mutual Group, Madison, Wis.; and
  • Mark Twisdale, senior vice president, human resources, State Employees' CU, Raleigh, N.C.

Mich governor creates new department to regulate FIs

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EAST LANSING, Mich. (1/22/13)--Michigan Gov. Rick Snyder has created a new department to increase assistance to, and regulation of, Michigan credit unions, banks, insurance and mortgage companies.

Snyder announced Wednesday that he established the Department of Insurance and Financial Services (DIFS) in an executive order that goes into effect in 60 days (mlive.com Jan. 17). Snyder signed the order Thursday, the Michigan Credit Union League told News Now.

"We're hopeful that creation of a new, independent department places a strong emphasis on the importance of credit unions and the other covered industries, as important players in the economic recovery and continued progress of our state," David Adams, league CEO, told News Now. "We look forward to continuing to work with Director [Kevin] Clinton and the staff of the Credit Union Division in this new capacity." 

DIFS will take over the functions that have been handled by the Office of Financial and Insurance Regulation, which is part of the Michigan Department of Licensing and Regulatory Affairs, mlive.com said. 

Credit unions and the other industries regulated by the new DIFS learned of the move in advance of Snyder's State of the State address, but it was for the most part unexpected by the department's covered industries, Adams said.

However, the formation of the new department is a positive change that provides more direct interaction with the governor, places greater emphasis on the importance of the industries it covers--including credit unions--and perhaps streamlines any regulatory and rulemaking processes, he added. 

The credit union industry has a very strong working relationship with its state regulators in Michigan, and would expect that relationship and the services they provide to continue unhindered, Adams concluded.

Bills to tax CUs, add CRA filed in Oregon legislature

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SALEM, Ore. (1/22/13)--The Northwest Credit Union Association is prepared to defend against three state bills that would impact credit unions. One involves a corporate excise tax and the others specify standards required for meeting community needs.

The bills were among the 1,200 bills introduced in Oregon's House and Senate chambers last week, said NWCUA.

"We are well-positioned to defend the credit union model and our cooperative structure," said Lynn Heider, director of communications at NWCUA. "They have been upheld at every turn every time the banks challenge us," she said, adding that legislators "know the good credit unions provide outweighs the benefits" of restricting credit unions.

House Bill 2484 requires credit unions to file with the director of the Department of Consumer and Business Services periodic reports that: summarize the number and amount of member business loans and certain other loans; describe the services credit unions provide to people with low and moderate incomes; and list total amount of deposits credit unions hold at their main office and at locations where they accept deposits.

H.B. 2485 provides that credit unions have an ongoing obligation to help meet the credit needs of all communities in which a credit union has a physical presence. It would require the director of the state's Department of Consumer and Business Services to adopt rules to specifically govern that obligation and to create certain minimum standards for measurement.

The bill also would add a new examination for credit unions, requiring the director to periodically evaluate whether each credit union meets its obligation. The director may consider the results in determining whether to approve certain applications from the credit union. If passed, the bill would take effect on Jan. 1, 2014, said NWCUA.

H.B. 2486 is the same as a bill introduced during the 2011 session that never reached a hearing, said NWCUA (Anthem Recap Jan. 18). It would impose a corporate excise tax on state-chartered credit unions and any interstate credit unions holding public deposits exceeding $250,000. The excise tax also would apply to those with commercial loans that collectively exceed 10% of a credit union's assets. The bill would apply to tax years beginning on or after Jan. 1, 2013.

Heider told News Now that NWCUA has learned that the banking lobby had e-mailed state legislatures outlining the synopsis of each bill and told legislators they looked forward to discussing the issues.

NWCUA will continue to monitor the progress of each bill. Pamela Leavitt, the association's legislative affairs liaison for Oregon credit unions, works with legislators and credit unions to improve the operating environment and is well-positioned to defend credit unions' tax status, said the association.

NWCUA has not only been able to defend previous banker-backed tax legislation, but it has successfully passed pro-active credit union lesgiation. In 2010, NWCUA spearheaded the passage of legislation that opened up the public deposit market to Oregon credit unions.

CU System briefs (01/18/2013)

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  • PHILADELPHIA (1/18/13)--First Heritage Financial LLC, a Philadelphia based, credit union-owned mortgage services provider, ended 2012 by topping $452 million in closed loan production and $1.2 billion in serviced mortgage loans. The company services 63 partner credit unions with combined assets of more than $6.3 billion and more than 711,00 members throughout Pennsylvania and Delaware, and is endorsed by the Pennsylvania Credit Union Association (Life is a Highway Jan. 16) …
  • HIGHTSTOWN, N.J. (1/18/13)--New Jersey credit unions will host their first Financial Reality Fair for college students on April 2 at New Jersey City University (The Daily Exchange Jan. 16). The program has been adapted to fit the older age group of nontraditional students at the university. The budget worksheets are more customized to students' current monthly expenses, including rent, student loans and dependents. The New Jersey Credit Union League will offer special volunteer training  on March 7 from 10 a.m. to noon ET at the league offices or through video conferencing at Members 1st of NJ FCU, Vineland, and Atlantic FCU, Kenilworth …
  • ALBANY, N.Y. (1/18/13)--New National Credit Union Administration Region 1 Director Larry Blankenberger, right, visited the Credit Union Association of New York offices Wednesday, meeting for the first time with CUANY President/CEO William J. Mellin, right, and other key staff. Blankenberger assumed his new role on Monday. He will manage NCUA's supervision and examination program for federal credit unions in New York, Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont. The group discussed NCUA's examination priorities for the year, and CUANY staff shared feedback from a statewide examination survey last year. "As our regulatory environment becomes more and more challenging, working collaboratively with key NCUA leaders is essential," Mellin said. "In the year ahead, we'll continue looking for opportunities to foster dialogue between our member credit unions and our regulators." Blankenberger previously was associate regional director for programs at NCUA's Region IV office and served as associate regional director for operations in Region I. (Photo provided by the Credit Union Association of New York) …
  • MEMPHIS, Tenn. (1/18/13)--Teri Van Frank  has been promoted to president/CEO and chairman of the Share One Inc. Board of Directors. She previously was senior vice president/chief operations officer, overseeing a major portion of the technology company's customer interfacing departments. Van Frank replaces Darryl Tanner, who retired after 15 years as president/CEO. Tanner will remain in a consulting role to senior staff. Van Frank has been with Share One for 31 years. Memphis, Tenn.-based  Share One is a credit union service organization serving 89 credit unions and is a developer of credit union Internet software solutions …
  • MADISON, Wis. (1/18/13)--Steve Koslow, senior vice president, chief ethics and compliance officer for CUNA Mutual Group, has been elected chairman of the board of directors for the Compliance & Ethics Forum for Life Insurers (CEFLI). Koslow has served on the board for a number of years. The board is comprised of chief compliance and ethics officers of CEFLI's member companies and representatives of affiliate membership organizations. Koslow has been with CUNA Mutual since 2007. In his current role he leads teams that design and implement controls necessary to ensure compliance with regulatory market conduct requirements. He also oversees employees who assess compliance risk, monitor compliance work and maintain governance over the company's documented policies, procedures and standards …

Diamond Award winner boosts loans with new ads

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MUSCLE SHOALS, Ala. (1/18/13)--Listerhill CU in Muscle Shoals, Ala., ran a six-month campaign in 2012 called So Can You to promote lending to its members and to capitalize on previous momentum in loan growth.

Listerhill garnered nearly $105 million in new loans, which was 5.7% beyond its goal of $99.3 million and 15% more than the total of its previous campaign.

That momentum came in 2011, when the $602 million asset credit union's Just Move It promotion that added $91 million in loans--1.32% above its $90 million goal. The promotion garnered Listerhill a Diamond Award-winning Best of Show Award from the CUNA Marketing & Business Development Council.

"Our goal for 2012 was to make sure we capitalized on the momentum we had from Just Move It," said Kristen Mashburn, Listerhill marketing director. "Our campaign had to become even more strategic than last year's promotion."

Listerhill began planning the So You Can campaign just days after Just Move it concluded, Mashburn said. Its marketing team brought together a cross-sectional panel of personnel from its branches and main office. "We wanted to make sure we solicited accurate feedback on what went well with Just Move It, as well as what we could improve upon with the new campaign," Mashburn explained.

Listerhill ran its So You Can campaign from April through September to capitalize on warmer weather and members' increased propensity to borrow during that period, Mashburn said.  Just Move It ran between July and December 2011.

In Just Move It, "our members loved the cash giveback they received from moving their loans," Mashburn said. "We decided to keep that component as well as add a referral system that provided even more cash rewards by incentivizing members to refer other members for new loans."

To help emphasize the relationship aspect of the program, Listerhill decided to feature members who saved on their loans through lower rates through the So You Can campaign.

To view the two television advertising pieces, use the links.

CUNA economist: 10-year mortgages created by market demand

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MADISON, Wis. (1/18/13)--With interest rates at record lows, more credit unions are offering 10-year mortgages as members become comfortable with shorter terms or seek to refinance existing loans, said a Credit Union National Association economist.

Credit unions are offering 10-year mortgages because of a changing market, said Steve Rick, CUNA senior economist.

"Some members prefer them over the 30-year mortgage, so [credit unions] are meeting the market demand," Rick said.

First Financial FCU, Wall, N.J., has begun offering a 10-year mortgage with rates as low as 2.5% and $599 closing costs.

"Shortening the term of your mortgage makes the single largest difference in the interest you pay, even more than a lower rate," said Alice Stevens, chief operating officer at First Financial FCU.

Greylock FCU, with $1.1 billion in assets, Pittsfield, Mass., offers a 10-year mortgage with an annual percentage rate as low as 3.75%, according to its website.

In September, Amoco FCU, a $589 million asset credit union based in Texas City, Texas, offered a 2.75% interest rate on 10-year mortgages (News Now Sept. 20).

CUNA's Rick noted other reasons credit unions offer 10-year mortgages:

  • Have less interest-rate risk when  rates rise because more principal is amortized each month and therefore reprices at the higher interest rate;
  • Have less credit risk because loan balances are usually smaller and borrowers usually have better ability to repay; and
  • Have less liquidity risk due to the greater amortization of principal each month.
"A 10-year mortgage will have more interest rate risk compared to a four-year car loan or an adjustable rate credit card loan," Rick said. "But it will have less credit risk because of the secured nature of the loan."

It's about trust: CUs beat national average in benefits survey

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MADISON, Wis. (1/18/13)--Employees ranked credit unions as the most trusted source to help them grow and protect their money, in a national survey.

Eighty-one percent of employees said credit unions were a trustworthy source to help them safeguard their funds, according to the "Sharpening the Focus on Benefits Strategy," the first in a series of research briefs stemming from Prudential's "The Seventh Annual Study of Employee Benefits: Today & Beyond. Comparatively, 79% of employees saw their employers as a trustworthy source for growing and protecting their money.

Fourteen percent of both employers and employees cited severe negative economic effects, a decrease from 2010 results of 27% for employers and 22% for employees. Employers who said their financial position will be better or improving in one year dropped to 54% this year from 70% in 2010; employees report a drop to 38% from 44%.

Employers reported a 17% increase over 2010 results in making benefits strategies a main focus. With shifting ownership and cost of benefits to employees, employers' top strategies included:

  • Expanding wellness, preventive, and work/life balance initiatives;
  • Improving the effectiveness of benefits communications;    
  • Cost-sharing with employees;
  • Giving more financial responsibility to employees; and
  • Increasing employee benefits education and financial advice.
To read another article about consumer trust in credit unions, use the link.

Cohenour named president/CEO at Missouri CU Assn

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ST. LOUIS, Mo. (FILED at 12:40 p.m. CT 1/18/13)--Don Cohenour has been appointed president/CEO of the Missouri Credit Union Association, announced MCUA's board of directors today.

Cohenour, who had been named interim president in November, succeeds Mike Beall. Beall left to become president/CEO of the National Cooperative Business Association.

"Don Cohenour is the ideal candidate to continue driving the strategic direction of the organization," said Dennis Pierce, MCUA's board chairman. "Don's knowledge of credit unions combined with the strength of relationships built throughout his tenure will ensure MCUA maintains a strong connection with its membership."

Cohenour is an 18-year veteran of MCUA. He leaves his position as chief membership officer. In that role, he managed field representatives within the state, served as an executive field representative with all member credit unions and provided overall responsibility for credit union relationships. He also was responsible for credit union staff and volunteer development, consulting services, professional development, and all product and service sales in the state.

"I am looking forward to my new role with MCUA and my continued work with credit union advocates throughout the state," said Cohenour. "The initiatives we set in motion make this an exciting time to lead the organization and make the credit unions of Missouri grow."

Three elected to PCUA board

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HARRISBURG, Pa. (1/18/13)--Three Pennsylvania Credit Union Association board of directors have been elected by acclamation.

The PCUA Nominating Committee received one qualified nominee for each election category (Life is a Highway Jan. 15).

Association Chairman Michael Kaczenski announced the winners:

  • Cookie Yoder, president/CEO, City Co FCU, Pittsburgh--$30 million or fewer assets;
  • Christine Woods, president/CEO, Keystone FCU, West Chester--$30 million to $100 million; and
  • Rick Stipa, president/CEO, TruMark Financial CU, Trevose--more than $100 million.

Detroit Free Press reports CUs' low auto loan rates

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DETROIT (1/18/13)--Credit unions nationwide are offering low auto-loan rates, the Detroit Free Press reported Thursday. 

Interest rates on new- and used-car loans are hovering around 3% at credit unions and banks. Greg McBride, senior financial analyst at bankrate.com, told the Free Press his company has never seen such low rates.

DFCU Financial CU, based in Dearborn, Mich., with about $3.3 billion assets, is offering 3.49% for 49 months when the car payment is automatically deducted from a DFCU checking or savings account, the paper said. Also, the credit union makes a special dividend payout each year that would lower the effective interest rate.

The paper also mentioned that Communicating Arts CU in Detroit received an initial federal grant of $1.5 million in November 2011 to help bail out consumers with very high car-loan interest rates. 

Those funds came from the U.S. Treasury Department's Community Development Financial Institutions Fund (News Now Aug. 10). "The 2011 funds allowed us to refinance predatory car loans for about 100 people, saving them an average of $80 per month," CEO Hank Hubbard said in August. "That's a total savings for the group of over $400,000 through the life of the loans." As members pay the loans back, the credit union can lend the money out again, he said.

With the program, the $34.3 million asset Communicating Arts conducted 34 auto bailouts in which the original car loan rates exceeded 19%--with one member refinancing an auto-loan rate down to 3.25% from 25%, said the Free Press

Often car shoppers don't realize they have financing alternatives, Hubbard told the paper. Some old loans may have been made years ago during the credit crunch following the financial crisis, he added.

CUNA closed Monday for holiday, inauguration

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WASHINGTON and MADISON, Wis. (1/18/13)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association will be closed Monday due to the Martin Luther King Jr. holiday.  Some CUNA staff will attend activities related to Monday's presidential inauguration.

News Now will not publish a Monday edition but will resume regular publication Tuesday.

Jersey Shore FCU issues community savings challenge

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NORTHFIELD, N.J. (1/17/13)--Jersey Shore FCU is challenging its membership to save  $500,000 in loan interest and fees to help the credit union celebrate its 50th anniversary.

If members reach the $500,000 milestone, the Northfield, N.J., credit union will donate $5,000 to four local charities (The Daily Journal Jan. 16).

Members can take a free five-minute financial checkup to see if they qualify for a lower interest-rate personal or home loan. If they do, they can select a partner charity to receive a donation.

Charities included in the challenge are Atlantic City Rescue Mission, Humane Society of Ocean City, Family Promise of Cape May County and Shore Medical Center Foundation.

Donations will be awarded in three increments: $2,500, $1,000 and $750, with two charities receiving $750.

Securities group files brief in NCUA's big banks suit

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DENVER (1/17/13)--Another securities industry group plans to file an amicus brief supporting Wall Street banks in lawsuits brought by the National Credit Union Administration's against them over their sale of residential mortgage backed securities to corporate credit unions.

The Securities Industry and Financial Markets Association, which represents securities firms, banks and asset managers, filed a motion Tuesday in the U.S. Court of Appeals for the Tenth Circuit in Denver seeking more time to prepare and file its brief. SIFMA seeks a four-week deadline extension--to Feb. 15.

So far those seeking appeal include RBS Securities Inc., Wachovia Capital Markets LLC and Wachovia Mortgage Loan and Trust LL. Also involved are Nomura Home Equity Loan Inc., Novastar Mortgage Funding Corp., Financial Asset Securities Corp., and RBS Acceptance Inc.

They oppose a July 25 decision from the U.S. District Court for the District of Kansas. They also allege that NCUA did not file its lawsuits within the time limits allowed by law.

NCUA's lawsuits against the banks alleged they misrepresented and omitted material facts in the documents offered to U.S. Central FCU and Western Corporate FCU, and had systemic disregard of underwriting guidelines. The misrepresentations caused the corporates to believe the investment risk was minimal, when it was substantial, said NCUA. The corporates collapsed in 2009 and NCUA is suing as the liquidating agent.

The lower court ruled NCUA's lawsuit could proceed and that certified certain controlling legal questions in the suit.  They include whether the Federal Credit Union Act's "extender" statute--which allows additional time in certain circumstances to file a claim in court--applied to the three-year statutes of repose for filing a case in court, including the three-year statute of repose in the federal Securities Act of 1933; and whether the extender statute applies to federal statutory claims.

Special CU license plates popular with Delaware members

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NEW CASTLE, Del. (1/17/13)--Credit union members in Delaware can proudly display their membership on the backs of their vehicles, according to the Delaware Credit Union League. The league worked with the state's Division of Motor Vehicles to develop license plates available only for vehicles owned by credit union members.

Click to view larger image Click for larger view
The CU Tag project was the brainstorm of Robert Walls, former league president. Initiated in 2000, the program required 200 drivers to sign up for the tags. That was accomplished Nov. 1, 2001.

"It was a long process, but we finally have the requisite number of tags to go forward with the printing of these motor vehicle tags that will define the driver as a credit union member," Walls said at the time.

In the past 11 years, the DMV has processed 366 credit union license plate number requests. Proceeds from the CU Tag project go to the league's scholarship fund. The fund provides scholarships for credit union staff training, especially for small credit unions, Alice Smith, the league's communications/governmental affairs director, told News Now. So far, the plates have garnered $4,150 for the fund.

Unlike "vanity" plates offered by the DMV, the credit union license plate does not cost extra when the vehicle owner re-registers the plate every year. To get the credit union plate, the member pays $20 as a one-time fee. The specialty tag is valid as long as the tag holder continues to be a member of a credit union.

Credit union plate numbers can go up to CU 9999, said the league. The numbers are valid registration numbers for motor vehicles and the plate can be used in addition to a member's current license plate. Either plate, or both, can be displayed on the vehicle.

Minnesota's CUs boost lending in 3Q

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MINNEAPOLIS (1/17/13)--Members of Minnesota's credit unions borrowed more during the third quarter, a reflection of the state economy's gradual improvement, according  to the  Minnesota Credit Union Network's quarterly report.   

Minnesota credit unions' loan balances increased 1.5% in the third quarter from the prior quarter, and were 4.5% higher than a year earlier (Dolan Media Newswires Jan. 16).

Also, the MnCUN report indicated:

  • Borrowing to finance new autos helped propel the quarterly rise, with volumes increasing 5.7% above June 30 levels.
  • Credit union memberships in the state also expanded by 3.9%, compared with third quarter 2011.
  • Minnesota members' savings continued to grow, with savings balances increasing 8.9 % from a year ago.

Social engineering scam fooling service reps

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MOUNTAIN VIEW, Calif. (1/17/13)--Member service representatives trying to be helpful to credit union members may fall for a scam that requires taking over a member's online account and tricking the rep via a chat session into helping out with the scam.

Mountain View, Calif.-based Guardian Analytics, an online security vendor that specializes in detecting anomalies, says the scam targets both small and large financial institutions and has migrated to call centers, using older tactics in new ways  (cuinfosecurity.com FraudBlogger Jan. 15).

The scams involve four steps. Cybercriminals:

  • Log onto an account using login and password credentials stolen through a Trojan  attack or another socially engineered scam;
  • Test the account by checking balances and initiating internal funds transfers, but do not initiate an external transaction;
  • Initiate a live chat session with the member service representative; and
  • Ask the representative for help in scheduling a wire transfer.
The member service rep, believing the chat session is with the accountholder because the session takes place through an already online authenticated process, helps complete the wire transfer.

Guardian also found that many compromised accountholders are also victims of work-at-home scams that involve one-time deposits to online accounts. Later the cybercrooks remove funds from the accounts. It is not clear whether the credentials are provided voluntarily or stolen.

The company advises financial institutions to:

  • Educate members and staff. When the credit union discovers suspicious activity, communicate with other departments, including the frontline call center and member service staff so they know an account is flagged for suspicious activity.
  • Look for anomalies in behavior.  Most transactions were less than $8,000, not enough to raise suspicion, but the way the wires were scheduled was atypical behavior.
  • Review the process for accepting wire requests. Set transaction limits and add more authentication methods.

Study: Young credit card users racking up debt

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COLUMBUS, Ohio (1/17/13)--Younger Americans not only take on more credit card debt than their elders, but they are also pay it off at a slower rate, reported a recent study from Ohio State University.

Younger generations may continue to add credit card debt into their 70s, and die still owing money on their cards, said the study. This is an opportunity for credit unions to educate Gen X and Y about money management and using credit cards wisely, according to the Credit Union National Association.

"When individuals rack up high amounts of debt at a young age, they get themselves into a vicious cycle that often is very hard to get out of," Michelle Dosher, managing editor in CUNA's business and consumer publishing area, told News Now.

"Credit unions can help young adult members by educating them about the consequences of poor money management and by giving them advice about the smart use of credit," Dosher added. "Teaching members strong money management skills at a young age will help them as they become mature adults. By providing this initial education, credit unions are instilling in members that the credit union is there to provide guidance throughout different stages of their lives."

Lucia Dunn, co-author of the study and professor of economics at OSU, noted, "If what we found continues to hold true, we may have more elderly people with substantial financial problems in the future.Our projections are that the typical credit card holder among younger Americans who keeps a balance will die still in debt to credit card companies."

Persons born between 1980 and 1984 have credit card debt substantially higher than do the previous two generations, the study found. On average, they hold $5,689 more debt than their parents born during 1950-1954 at the same stage of life and $8,156 more than their grandparents born during 1920-1924. Children's payoff rate is 24 percentage points lower than their parents' and about 77 percentage points lower than their grandparents' rate.

The study also uncovered good news: Increasing the minimum monthly payment spurs borrowers to not only meet the minimum, but to pay off substantially more, possibly eliminating their debt years earlier.

Researchers combined data from 1997 to 2009 for consumers ages 18 to 85 years for a final sample size of 32,542.

Agility to CUs: Protect business, have employees get flu shots

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MADISON, Wis. (1/17/13)--Credit unions should strongly urge their employees to be vaccinated against influenza and consider offering flu vaccination clinics at their offices, experts advised during a free webinar hosted by Agility Recovery Wednesday.

Agility Recovery is a CUNA Strategic Services Provider that specializes in business continuity for credit unions in disaster situations.

The influenza outbreak has reached epidemic proportions in the U.S., the Centers for Disease Control and Prevention, reported. The number of states reporting widespread activity rose to 47 from one week ago.

That activity is likely to remain high for the next several weeks, Dr. Michael Jhung, lead medical officer in the CDC's Influenza Division, said during the webinar.

"Flu season started earlier than normal this year, and outbreak levels are likely to remain elevated," Jhung told webinar participants.

The good news is that the current vaccine is about 62% effective, Jhung said. This year's flu vaccine protects against an influenza A H3N2 virus, an influenza B virus and the H1N1 virus.

"The vaccine doesn't guarantee you won't contract influenza, but it does greatly reduce the risk and that is good public health policy," Jhung said.

To prevent a widespread outbreak of flu at the credit union, Mark Norton, Agility Recovery, senior continuity planner, offered these tips:

  • Provide a flu vaccination clinic at the workplace;
  • Provide hand sanitizer to employees;
  • Have a culture that supports the health and well-being of employees;
  • Beware of common items like the refrigerator and microwave;
  • Wash hands, cover sneezes and coughs with sleeves or facial tissue;
  • Stay hydrated;
  • Take a multi-vitamin; and
  • Limit touching.
"If anyone is feeling ill, have them stay at home," Norton said. "We are trying to prevent having those ill people in the office because that is where the virus comes from."

CU System briefs (01/16/2013)

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  • ONTARIO, Calif. (1/16/13)--CU Direct Corporation, a provider of lending solutions to the credit union industry, will return a 3% cash dividend to its 102 shareholders for the 2012 calendar year. It is the eighth consecutive year that the credit union service organization has paid dividends to its shareholders. CU Direct signed new agreements with 109 credit unions in 2012. At year's end 1,050 credit unions, serving 34 million members, were using the credit union service organization's lending solutions …

Enterprise Car Sales generates $380M in CU auto loans

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St. LOUIS (1/16/13)--Enterprise Car Sales said it generated more than $380 million in loan volume for credit unions through used-vehicle sales to more than 23,000 credit union members nationwide last year. The company's specialty is working with credit unions of all sizes to increase auto loan volume.

The loan volume generated is 15% higher than 2011 (autoremarketing.com Jan. 15).

Respondents--in an independent research study commissioned by Enterprise Car Sales to determine the relative consumer appeal of offering buying incentives--showed greater interest in vehicle-related offers such as warranty protection than in promotional items such as high-definition TV sets.

Those findings confirm the value to consumers of Enterprise Car Sales' "Perfect Used Car Package," which features a 12-month/12,000-mile limited powertrain warranty for every used model purchased, Mark McAndrews, assistant vice president of Enterprise Car Sales, told the publication.

Credit unions' partnerships with Enterprise Car Sales have been fruitful because the two have much in common, including a high level of member service, along with a commitment to local communities, McAndrews said.

Enterprise's relationships with credit unions have continued to grow stronger and more productive for more than 30 years, he continued. That success stems from credit unions considering Enterprise a part of their overall auto strategy, Andrews told the publication.

Enterprise--for its committed partners--sends members back to their credit unions for financing, 100% of the time, McAndrews concluded.

Filene pilot to improve marketing efficiency, effectiveness

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MADISON, Wis. (1/16/13)--The Filene Research Institute announced a new pilot project--Leeflet, which will improve the cost efficiency and marketing effectiveness of credit unions in an innovative way--delivering targeted brochures electronically.

A regular credit union may spend $50,000 or more each year on paper brochures, with no way of knowing who reads them or who follows their calls to action, Filene said. Terms, conditions, rates and available products are constantly changing. Traditional brochures are outdated almost as quickly as they're printed. As credit unions change, they must update brochures--dooming the current inventory of paper brochures to the recycle bin, Filene said.

One of Filene's i3 innovation teams worked closely with electronic marketing experts at DigitalMailer to create Leeflet, an electronic brochure program already in use at Smart Financial CU, Houston; Financial Center FCU, Indianapolis; and Fort Knox FCU, Radcliff, Ky. Initial performance is promising: The open rate for all Leeflet brochures is more than 70% with a click-through rate higher than 25%.

Leeflet--the name was chosen to communicate that it is an electronic brochure--allows credit unions to enhance sales and marketing efforts by cutting down on collateral costs, and tracking campaign effectiveness. The webinars will describe expectations for pilot participants and outline the timeline of the research.

Credit unions interested in learning how to reduce brochure expenses by as much as 75% can learn more by signing up for one of two free webinars titled Leeflet: Improving Cost Efficiency and Effectiveness of Marketing Collateral, on Jan.29  at 12 p.m. CT, and Feb.12 at 1 p.m. CT.  To register, use the link.  

For more information, contact Tansley Stearns at 608-661-3753 or by e-mail at tansleys@filene.org.

YL4Kids seeks advocates under 40

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SALT LAKE CITY (1/16/13)--Volunteers are being sought for an "under 40" national advisory board of Credit Unions for Kids called the "Young Leaders for Kids Board (YL4Kids)."

The purpose of YL4Kids is to create, grow and inspire Credit Unions for Kids enthusiasts among the next generation of credit union leaders. The group is made up of individuals under 40 years from credit unions, leagues and industry partners. The group began in early 2010. Applications are due Feb. 1.

Credit Unions for Kids is the credit union movement's fundraising vehicle benefitting Children's Miracle Network Hospitals.

"Over the past two and a half years, the Young Leaders for Kids Board has been instrumental in the success of our CU4Kids program nationwide," said Joe Dearborn, Children's Miracle Network Hospitals senior director of corporate partnerships. "The team's efforts helped us engage thousands of credit unions and reach new fundraising heights in 2012. They are working on some new, exciting fundraising ideas, and I look forward to seeing their impact in 2013."

For more information, use the link.

Qualstar CU pays out $25 million dividend

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REDMOND, Wash. (1/16/13)--Qualstar CU, Redmond, Wash., is thanking members for their loyalty with a $2.5 million bonus dividend.

Individual bonus dividends range from five dollars to several thousand, with the average member receiving a bonus dividend of $72.

"We have extremely loyal members, and last year their loyalty helped us have our most profitable year ever," said Mark Nelson, CEO of the $327 million credit union. "We felt that with the exceptional earnings we saw as a result of that loyalty, the best way to thank them is to give back to those members who helped make that happen."

Members earned dividends based on their deposit and loan balances, as well as other services that help reduce expenses to the credit union including Home Banking and eStatements.

"This isn't about who has the most money on deposit, it's about thanking all of our members for their contribution to our success." said Tracey Elfstrom, vice president of member relations. "Whether they have a large Money Market balance, a mortgage loan, or a Visa Credit Card, it all matters, it's all important--and they all deserve to benefit as a result."

MnCUN adds to shared branching network

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ST. PAUL, Minn. (1/16/13)--The Minnesota Credit Union Network expanded the number of Shared Branching locations in its state to 36 with the addition of Minnesota Valley FCU.

With MnCUN's most recent addition the nationwide network now offers nearly 5,000 service centers nationwide.

Consumers have said that banking locations near their home or work is a major factor in determining their choice for a primary financial institution.

"The expansion of the Shared Branching network is important to credit unions' growth, and it's a vital piece of a successful member-retention strategy," said MnCUN Vice President - Network Service Corporation John Ferstl. "Shared Branching helps credit unions attract and keep members by offering them branch options around the state, and nationwide. This network of service centers increases the probability of finding a credit union nearby - no matter whether the member is close to home or on the road."

Virginia league to relocate some jobs to Richmond

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LYNCHBURG, Va. (1/16/13)--The Virginia Credit Union League is relocating members of its staff--including President Rick Pillow--to new office space in the state capitol of Richmond, Va., to support the league's governmental affairs and regulatory work.

"This is a game-changing decision for the Virginia League and will enhance our advocacy work on behalf of member credit unions," said League President Rick Pillow. "We are a respected and effective advocate for Virginia's credit unions, but a permanent presence in the state capital will raise our visibility and keep us connected to lawmakers and regulators."

Officially headquartered in Lynchburg, about 115 miles from Richmond, the league has discussed moving some or all of its operations to Richmond a number of times during the past two decades.

The organization has rented office space in Richmond to facilitate its lobbying and regulatory work, but this will be the first time it has had a permanent presence in Richmond or has permanently assigned more than one or two staff members to the Richmond area.

By January 2014, five of the league's 24 staff members--Pillow and three of the league's five management team members--will be permanently assigned to the Richmond office.

No positions will be cut, and league staff now working at the Lynchburg office will continue to be headquartered there.

Plans for the Richmond office include a reception hall, with sufficient space to host legislative events and credit union meetings.

Firstmark CU sponsors Student Aid Saturdays

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SAN ANTONIO (1/15/13)--Firstmark CU in San Antonio is helping sponsor Student Aid Saturdays, a program that helps high school seniors who are heading off to college or to a technical program and their family members fill out their college financial aid forms.

Local high schools, college campuses and at Cafécollege in San Antonio will host SAS. This year, the program is sponsored by the $758 million asset Firstmark and is in partnership with SA2020, the Greater San Antonio Chamber of Commerce, San Antonio Education Partnership, and Generation TX San Antonio.

"The impact of Student Aid Saturdays has a ripple effect in our community," said Leon Ewing, president/CEO of Firstmark CU. "It immediately helps students who need assistance get into college. That, in turn, produces a better-educated work force, which ultimately is good for our community. We hope other San Antonio companies will follow suit and sign up to help."

Most colleges and universities require the Free Application for Federal Student Aid form for a student to qualify for any financial aid, including many scholarships. San Antonio still has a low rate of completion of the FAFSA forms. SAS aims to raise that level. This is the second year of the program. During the first year, more than 1,000 students and families participated.

CU System briefs (01/15/2013)

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  • CINCINNATI (1/15/13)--A former head teller at Cincinnati-based Cinco Family Financial Center CU has been accused of taking $600,000 from the credit union by removing $100 bills from stacks and substituting $1 bills sandwiched between two C-notes (Associated Press Newswires and Cincinnati.com Jan. 11). If convicted, Linda Fite, 52, faces a potential sentence of three years in prison. The thefts allegedly occurred for nearly a decade beginning in 2003, said Hamilton County prosecutor Bill Anderson. Auditors never audited the large bags of money when delivered. They decided on Jan. 25, 2012 to audit the bags, which Fite supervised. Anderson filed an "information," designed to let a person bypass a grand jury indictment and plead guilty …
  • ATLANTA (1/15/13)--Atlanta-based Mutual Savings CU has named Jennifer Fiorenza as president/CEO, effective April 1. She replaces outgoing President/CEO Mike Bryan, who led Mutual Savings for nine years. Fiorenza is assistant controller of AGL Resources, has served on the $70 million asset credit union's Board of Directors for three years and is a member of its Asset/Liability Management Committee and the Policy Committee. She brings 30 years of financial management experience, 23 of them with AGL Resources. Mutual Savings was founded to serve employees of the company …
  • WICHITA, Kan.(1/15/13)--Meritrust CU's board announced that James Nastars will become the Wichita, Kan.-based credit union's new president/CEO, effective Feb. 18. Nastars brings more than 16 years of credit union executive experience as senior vice president of lending and collections at the $1.5 billion asset University FCU in Austin, Texas. Nastars also serves on the board of UFCU Financial Services and CU Business Solutions, and is  board president for North Central Catholic School Corp. in Austin. Interim President/CEO Byron Stout will return to his role as vice president of human resources on Feb. 18 …
  • BASKING RIDGE, N.J. (1/15/13)--Robert Birkhahn, executive vice president of Affinity FCU, died on Jan. 9 in Miami, Fla., according to the New Jersey Credit Union League (The Daily Exchange Jan. 14). He was 49. Birkhahn was also chief member relationship officer at the Basking Ridge, N.J.-based credit union, and he served as CUMAnet's managing director. Affinity FCU President/CEO John Fenton will assist during the transitional period, said the league.  Services for Birkhahn were Monday in Fair Lawn, N.J. (The Record/Herald News Jan. 12) …

Sacramento Bee: CUNA's Mad City Money part of ed trend

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SACRAMENTO, Calif. (1/15/13)--The Credit Union National Association's Mad City Money program, a personal finance money management exercise for high school students, is part of a new trend in financial education--role playing, say experts interviewed in the Sacramento Bee (Jan. 13).

"It's a safe environment to make mistakes," Shannon Heaps, SAFE CU's financial literacy coordinator, told the Bee.  "If they buy a big, new car, they might not be able to buy (designer clothes)."

Heaps said that students will not learn from someone lecturing them with the save-your-money message. "This is hands on and it lets (teens) learn from their mistakes."

The event was coordinated by the school's business academy, which includes three student-run businesses: a campus store, a recycling center and a SAFE CU branch.

"Events like Mad City Money, created by CUNA, are designed to help students learn those hard lessons before they leave home," said the publication. 

California JumpStart Coalition Chair Karen Anderson told the publication that there is a proliferation of role playing games to engage teens. "It's part of a change in financial education," she said.

Jim Allen, SAFE vice president of community banking, also noted that money management education is needed by adults as well as high school students. 

To read the full article, use the link.

Study: Cause marketing? Be authentic

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MADISON, Wis. 1/15/13)--Credit unions have an advantage when it comes to cause marketing: Their already solid reputation with consumers and dedication to the people-helping-people philosophy.

While the majority of U.S. Internet users have been moved to purchase because of a cause, shoppers expect greater accountability from organizations involved in cause marketing and reassurance that their support is making a difference, according to a new eMarketer report, "Marketing 'Good': How Causes Can Convert Online Shoppers" (eMarketer Jan. 8)

A growing number of consumers considered "social purpose" as the leading purchase driver when quality and price were equal, according to a study the Edelman's "good purpose" study.  However, only 10% surveyed thought that cause marketing campaigns were sincere.

To employ cause marketing effectively, organizations must be viewed as authentic by consumers, the study said.

Would consumers trust credit unions to make a difference with cause marketing? Trust in credit unions has remained high at 61% among Americans, according to the latest Chicago Booth/Kellogg School Financial Trust Index (News Now Nov. 6). The index has consistently reported notably more trust in credit unions than local and national banks, quarter over quarter, since it began in December 2008.

Community Financial CU, with $502 million in assets, Plymouth, Mich., is among the credit unions engaged in cause marketing. The credit union asked its members and community members to take part in its "Warming Hearts & Homes" campaign (PR Newswire Jan. 14).

Community Financial CU raised $30,000 for The Heat And Warmth Fund, local food pantries and the Salvation Army's Coats for Kids program.

The credit union donated $25 for every like on Facebook, tweet on Twitter or text message it received during the holidays.

Student lending can be a good niche for CUs

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WASHINGTON (1/15/13)--Loan-starved credit unions seeking to expand their portfolios take note: The latest student lending trend could lead to a new lending market among existing prime members, says the Credit Union National Association.

During third quarter 2012, non-federal guaranteed student loans at credit unions increased 20% year over year to $1.93 billion, according to CUNA.  Although they represent a small percentage (0.3%) of credit unions' loan portfolios, the average age of the co-signers on these loans is 47-49 years--in line with existing members' average age.

"It is growing tremendously for credit unions--to about  $2 billion. CUs are having a hard time finding loan growth. This could be a nice niche for us," said Paul Gentile, CUNA executive vice president of strategic communications and engagement, in a call with trade press Monday.

"If you watch the news, there are so many negative stories about student loans, yet student loan delinquency in credit unions is 1.45%--so credit unions are doing something right," Gentile said.

Credit unions are also benefiting from new regulations, particularly the Higher Education Opportunity Act, said Vince Passione, CEO of Fynanz, a private student loan company and CUNA Strategic Services provider.

Around 2008, during the post-credit crisis when other lenders left private student lending, "credit unions stepped in," said Passione. "They architected all their student loans programs following the regulation."

The act requires lenders to disclose to students and parents that the loans are non federal guaranteed private loans, and ensure they understand the cost of borrowing. It also requires lenders to educate. Schools are certified, and the students don't overborrow. "Students are required to exhaust all other avenues first before taking a private student loan," Passione said.

Fynanz's  program requires students to make payments while still in school,  "so they begin good repayment habits early," said Passione.

Student loan delinquencies at credit unions--1.45%  for a 60-day loan-- are lower than banks' loans but higher than the 1.13% delinquency rate of  all credit unions loans. That compares with 5.3% of delinquent loans in the general student loan market and 12% when federal loans are factored in, said CUNA.

Will student loans present a concentrated risk if the economy dips again? CUNA Chief Economist Bill Hampel said no. "Even if the current loan rate continues for a decade, there would still not be enough concentration in this market," he said. "For some individual credit unions, if they got into [student loans] big, they might see a little more [risk]."

Today, 581 credit unions offer private student loans, compared with 488 a year ago, said Passsione. Roughly  2,000 schools and universities offer Fynanz's student loans, said Passione. For more information, use the link.

Richland FCU manager named to Minneapolis Fed advisory council

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SIDNEY, Mont. (1/15/13)--Kevin Mayer, manager of Richland FCU, Sidney, Mont., has been appointed to the Community Depository Institutions Advisory Council of the Federal Reserve Bank of Minneapolis.

Mayer will serve a three-year term with 10 others in an advisory capacity and help the Federal Reserve better understand the business and economics in the region.

"We are the eyes and ears of our region," said Mayer. "Our discussion is heard by those in Washington, D.C."

Tracie Kenyon, president/CEO of the Montana Credit Union Network, said the appointment is a great honor. "His appointment underscores the truly amazing work that he's done in the community, state and region. From the state trade association perspective, I am always delighted to have Montanans at the table, and Kevin will represent the interests of his peers exceptionally," Kenyon said.

Mayer has been with Richland FCU since 1985. Aproponent of financial education, he serves on the business advisory council at Sidney High School. Each year he speaks to eighth grade students about the overall importance of finance, and he visits with them again when they are seniors to discuss the value of how credit is earned.

He serves on the Board of Directors of Kansas Corporate CU, was a member of the MCUN's Government Relations Committee. and is an advocate and mentor to many small credit unions in eastern Montana.

CU opens Staten Island branch postponed by Sandy

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BROOKLYN, N.Y. (1/15/13)--While all branch openings are a measure of a credit union's growth, Polish & Slavic FCU's Dec. 15 grand opening of its first branch on Staten Island had a special significance: The opening had been delayed by Hurricane Sandy.

After Sandy struck Oct. 29, not only did the Brooklyn, N.Y.-based credit union have to repair the damaged branch, scheduled to open Nov. 5, it also assisted its new neighbors in recovering from the storm (PRNewswire Jan. 14). The credit union collected clothing and other items for hurricane victims. Items were donated through local parishes and community organizations.

Also, the credit union's mobile branch also moved throughout the area where branches were inoperable to assist members.

PSFCU has 16 branches throughout the metropolitan New York City area and Chicago.

Ostrowski named Worldwide Foundation for CUs director

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Click to view larger imageCalyn Ostrowski was named Worldwide Foundation for Credit Unions director by the World Council of Credit Unions.  She will manage the foundation's supporter funding and network to help expand WOCCU's international credit union development and education initiatives. (Photo provided by the World Council of Credit Unions)
MADISON, Wis. (1/15/13)--Calyn Ostrowski has been named director of the Worldwide Foundation for Credit Unions, the charitable arm for the World Council of Credit Unions.

As director, she will manage the foundation's supporter funding and network to help expand WOCCU's international credit union development and education initiatives.

"The assistance we receive from World Council Supporters is vital to the work we do each day," said Brian Branch, WOCCU president/CEO. "Calyn's proven track record in international development and dialogue make her an excellent fit for building and expanding our global community."

Ostrowski most recently led program, operational and fundraising initiatives for the Global Health Initiative at the Woodrow Wilson International Center for Scholars, a foreign policy think-tank based in Washington, D.C. While there, Ostrowski developed and facilitated public policy dialogue programs to increase global health education and political willpower among domestic and international policymakers, nonprofit organizations, corporations, media and donors to improve the economic, social and physical well-being of communities in developing countries.

Ostrowski managed the GHI grants administration process and also developed policy dialogue programs for the center's Environmental Change and Security Program. Her fundraising strategies helped secure a record-high increase in GHI's revenue.

Ostrowski joins WOCCU's headquarters in Madison, Wis.

Illinois league hosts small-CU follow-up workshops

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NAPERVILLE, Ill. (1/15/13)--The Illinois Credit Union League hosted a round of additional small asset-size (SAS) workshops for credit unions with less than  $25 million in assets this winter, as a follow up to "Lunch and Learn" meetings held in 2011.

The programs, dedicated to driving financial health and member growth by providing SAS credit unions the tools needed for success, were hosted in Springfield, Kankakee and DeKalb.

Roundtable topics shared by the Illinois Division of Financial Institutions, National Credit Union Administration, CUNA Mutual Group, Alloya Corporate FCU in Warrenville, Ill., and others included information on non-interest income, regulatory concerns, marketing and Automated Clearing House compliance.

"If there's one thing that stands out in our industry, it's the ease in which small credit unions share and learn from each other and the value that comes from this unique quality that our industry possesses," said Joni Senkpeil, ICUL director of small credit union development.

The ongoing effort is an endeavor to study small-credit union challenges, offer resourceful solutions, and help secure the strength of the state's small-credit union community.

The league originally launched the "Lunch and Learn" workshop series in 2011 via a new SAS Advisory Group exclusively for credit unions under $25 million in assets as part of a statewide action plan for SAS credit unions in Illinois. 

The advisory group was charged to create a plan that will provide a necessary and unique opportunity for credit unions to shape distinct and permanent SAS workgroups across Illinois. It includes four priorities for action, including: reducing the regulatory and compliance burden; promoting collaboration; enhancing communication; and increasing competitiveness.

California DFI eliminating hard copy exam reports

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SACRAMENTO, Calif. (1/14/13)--California's Department of Financial Institutions is eliminating hard copy examination reports, it told the state-chartered credit unions and banks it regulates.

In 2013, credit unions and banks' examination reports will be delivered in a PDF format by secure e-mail to the institution and  the federal regulator (Monthly Bulletin Jan. 11). Paper copies will not be saved in DFI's file system or mailed.

"It is expected that this move will reduce the department's paper and postage costs and the need for file storage space," DFI said. It also means that the licensees and their federal regulators would get the reports sooner than if the reports were sent by postal mail.

CU System briefs (01/14/2013)

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  • NAPERVILLE, Ill. (1/14/13)--The Illinois Credit Union Foundation is offering Debt in Focus for the second year to the state's REAL Solutions partner credit unions. DIF was created by the Filene Research Institute's i3 program to break down barriers preventing many consumers from seeking traditional financial guidance. The financial assessment tool is requires no self-identifying information so users stay anonymous, is available around the clock, and provides action steps . ICUF is paying the 2013 standard package annual fee for the first 45 REAL Solutions partner credit unions who enroll.  So far, 36 are participating.  DIF provides anonymous debt management advice for credit union members and other visitors to the credit union's website. It often is the first step people take when they experience financial difficulties, said ICUF.  Credit unions often use DIF with one-on-one or personalized financial counseling ...
  • WINSTON-SALEM, N.C .(1/14/13)--Piedmont Advantage CU will construct a new corporate office and main branch, which will anchor a 22-acre business park to be named Piedmont Advantage Park. "After completing extensive research on population growth, centers of influence in branding opportunities, this highly visible and convenient location became a site which we believe is second to none in the area," said Judy Tharp, CEO of the Winston-Salem, N.C.-based credit union. The new location will offer a more central location to the homes and workplaces of the credit union's membership, Tharp said. The credit union plans to relocate in 2014 …
  • PLEASANTON, Calif. (1/14/13)--Patelco CU in Pleasanton ,Calif., raised $30,792 for CU4Kids and the Children's Miracle Network with close to 7,000 member and employee donations between Nov. 1 and Dec. 31. The money will go to the University of California-Davis Children's Hospital and to Children's Hospital and Research Center in Oakland to fund equipment, programs, and research. Patelco's effort raised money through the sale of $1 snowmen. Individual donations ranged from $1 to $2,386.  The $3.8 billion asset Patelco also launched a CaféGive Facebook app and raised $6,535 for the American Red Cross Disaster Relief to aid Hurricane Sandy relief efforts on the East Coast. Patelco added $5,000 to bring the total donation amount to $11,535 ...
  • LIBERTY LAKE, Wash. (114/13)--Jennifer Oliver, CEO of South Bay FCU in Redondo Beach, Calif., was elected to the Board of Directors of  CU*NorthWest, based in Liberty Lake, Wash.  CU*NorthWest is a data processing credit union service organization. Oliver represents the first California credit union to serve on the CUSO's board. Oliver's term will run through Sept. 30, 2015.  The board has seven members--six CEOs from credit unions operating the CU*Base software suit and the seventh held by CU*Answers, product manufacture of CU*Base Gold …
  • CONNEAUT, Ohio (1/14/13)--Mary (Jackson) Adams, age 68, former member and president of the board of Port Conneaut FCU, Conneaut, Ohio, died Jan. 8. She was born Oct. 24, 1944. She had been a 45-year employee at Brown Memorial Hospital/UH-Conneaut Medical Center as a Medical Technologist. She retired in 2011 (Star Beacon Jan. 9) …

Kansas CUs merge, five more apply in Calif, Mass

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MADISON, Wis. (1/14/13)--Two Kansas credit unions have completed a merger, and five mergers in California and Massachusetts are in the works.

Mainstreet CU, with $325 million in assets, Lenexa, Kan., merged with $1.9 million Bonner Springs (Kan.) FCU.  By combining, the credit unions' members will be served by 10 branch locations.

The official merger date was Oct. 31. On Jan. 1, members of Bonner Springs FCU gained full access to Mainstreet CU's branches, products and services. They now have access to online bill payment, investment planning, a broader local ATM network, and nearly 30,000 ATMs nationwide.

Mergers in the works in other states include:

  • Alliance CU, with $359 million in assets, San Jose, Calif. has plans to merge with $11 million Electric FCU, also of San Jose (California Department of Financial Institutions Monthly Bulletin Jan. 11).
  • San Francisco Fire CU, with $800 million in assets, hopes to merge with $12 million Bay Media FCU, also of San Francisco.
  • Valley First CU, with $413 million in assets, Modesto, Calif., requested approval to merge with $72 million State Center CU, Fresno, Calif.
  • Metro CU, with $1.1 billion assets, Chelsea, Mass., plans to merge with merge with $1.7 million Fenwal CU, Ashland, according to the Massachusetts Division of Banks (DOB).
  • Premiere Source CU, with $39 million in assets, East Longmeadow, Mass., seeks approval to merge with $30 million Wemelco CU, Springfield, Mass., DOB said.

Report outlines Hispanic opportunities for Calif, Nevada CUs

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ONTARIO, Calif. (1/14/13)--More than 60% of Hispanics in California and Nevada were born in the U.S., and with a median age in the mid-20s they represent an opportunity for credit unions to lower their memberships' average age, said a report commissioned by the California and Nevada Credit Union Leagues and Applied Research Institute.

The Hispanic Opportunity Report is part of the leagues' new partnership with Coopera, an Iowa firm focused on the Hispanic market.

Findings in California included:

  • Sixty-two percent of California Hispanics were born in the U.S., with the median age as 27;
  • Hispanics represent 38% of the state's population;
  • One in six businesses are Hispanic-owned (17%);
  • Forty-one percent are underserved;
  • The state is No. 1 in the nation in Hispanic buying power; and
  • Hispanics in California have $265 billion in disposable income.
Nevada results included:

  • Sixty percent were born in the U.S., and have a median age of 26;
  • From 2000 to 2010, Nevada's Hispanic growth rate (82%) outpaced California (28%), Texas (36%) and Florida (57%);
  • By 2030, one out of three Nevada residents will be Hispanics;
  • Eight percent or 18,000 businesses are Hispanic-owned;
  • North Las Vegas and Las Vegas have the highest ratio of  Hispanic-owned businesses; and
  • More than half--more than 350,000 individuals--are underserved.
Coopera estimated that 10% of each state's Hispanic adults were members of a credit union, in California, they would contribute an about $2.1 billion in loan balances and $592 million to credit unions' annual income. Nevada's Hispanic adults would contribute an estimated $82 million in loan balances and $28 million to annual income.

Coopera and the Credit Union National Association designed El Poder es Tuyo (The Power is Yours), a customizable, Spanish-language consumer finance microsite for credit union members and potential members.

Maine league kicks off $800K CU awareness campaign

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PORTLAND, Maine (1/14/13)--Maine's credit unions have launched a two-year, $800,000 statewide awareness campaign. The multi-channeled campaign was developed with guidance from research about the state's consumers.

Credit unions defined several opportunities from the research, said John Murphy, president/CEO of the Maine Credit Union League.

"We found that Maine credit unions are at a great advantage in the current economic climate, with the percentage of Maine population who are credit union members to be one of the highest in the U.S. at nearly 47%," Murphy explained. "Additionally, our state has a large percent of our population that are Gen Y and who will soon be entering into key borrowing age."

The campaign's goals are to bring a higher level of awareness among members, to increase product penetration, and to directly reinforce the benefits of credit unions over banks. Now is the Time, the campaign theme, encourages consumers to take advantage of the many benefits credit unions offer.

With a total media buy of $800,000, and more than 50% of the budget dedicated to prime-time television, the league produced five 30-second television advertisements. The target audience is Gen  X and Y, and females up to age 50. The league projects the commercials will reach 98% of the viewing audience an average of 30 to 45 times annually.

The campaign includes an updated micro site, a mobile credit union locator, and a strong social media presence.

Secondary life insurance loans topic of CUs' lawsuit

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DETROIT, Mich. (1/14/13)--Two Michigan credit unions have sued three companies that recruited them  to finance life insurance premiums for policies sold or brokered in a secondary "life settlement" market.

Lansing-based Alliance Catholic CU (formerly Michigan Catholic CU) and Troy-based Astera CU (Auto Body CU) allege they each lost more than $1 million because the companies "systematically misstated the underwriting data to procure premium finance loans for policies…that could not have been financed elsewhere through established lenders."

The complaint,  filed Wednesday in the U.S. District Court in Detroit, is against Texas-based Capital Lending Strategies LLC;  its manager, Dan Phillips; Allied Solutions Inc., based in Carmel, Ind.; Allied's principal officer, Peter Hilger; and O'Malley & Associates LLC, Crystal Lake, Ill.

In 2007 and 2008, Hilger and Phillips allegedly proposed to the credit unions an investment scenario calling for "high net worth" individuals to form irrevocable life insurance trusts that would each hold one or more high-dollar life insurance policies.  The credit unions agreed to finance the first 27 months of premiums for each policy through a short-term, non-recourse loan to the irrevocable life insurance trust borrower. The loans were secured with an interest in the underlying policies and a certificate of deposit. O'Malley sold or brokered the loans.

According to the court document, the credit unions were told they would always have a repayment source when each premium finance loan matured--even if the borrower defaulted--because their collateral could be sold in the life settlement secondary market.

However, an "overwhelming majority of the premium  finance loans" defaulted or weren't repaid. The companies, called to service or sell the loans in the secondary market, failed to generate enough repay the loans. The credit unions advanced more funds to preserve their interest.

The complaint alleges the transactions had "fundamental flaws" and the companies "systematically misstated the value of the life insurance policy collateral in the underwriting and other data supplied … in order to induce and trick plaintiffs to enter into the joint venture…"

When they tried to possess the collateral, the credit unions encountered resistance and learned they did not have documentation needed to liquidate the collateral.

'Bank on California' draws more CUs than banks

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SACRAMENTO, Calif. (1/14/13)--Credit unions so far outnumber banks as participants of Bank on California, a voluntary collaborative initiative in eight communities to provide unbanked households access to mainstream financial products and services.

Seven credit unions are participating, compared with six banks, according to Teveia R. Barnes, commissioner of the California Department of Financial Institutions (DFI), which is administering the initiative (Monthly Bulletin Jan. 11). DFI is the regulator for state-chartered credit unions and banks.

The credit unions participating include:

  • The Golden 1 CU, Sacramento;
  • Orange County's CU, Santa Ana;
  • Patelco CU, Pleasanton;
  • Redwood CU, Santa Rosa;
  • SAFE CU, North Highlands;
  • Schools Financial CU, Sacramento; and
  • Travis CU, Vacaville.
Unbanked consumers in the state will have access to no- and low-cost checking and savings accounts and to financial education through the credit unions' participation.

Much of the state's population comes from countries where bank deposits are uninsured and there is little opportunity to have a banking relationship, said Barnes.

Accountant gets 37 months for role in CU's conservatorship

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AKRON, Ohio (1/14/13)--A Cleveland accountant is the latest person to receive a prison sentence for working with a loan fraud ring that brought about the 2010 collapse of the St. Paul Croatian FCU in Eastlake, Ohio.

Zrino Jukic, 42, was sentenced Thursday in an Akron federal court to 27 months in prison and ordered to pay restitution totaling $1.7 million for his role in what is said to be the largest failure in credit union history. He pleaded guilty in July to one count of bank fraud and one count of money laundering (The Plain Dealer and Cleveland.com Jan. 11).

Jukic was co-owner of the Zlatko Group, along with  the credit union's CEO, Anthony Raguz, who took $1 million in kickbacks, bribes and gifts for issuing more than 1,000 fraudulent loans that involved 300 accountholders.

Jukic allegedly used false information on 11 loan applications totaling $1.7 million that was funneled through their company and invested in the business ventures of Pepper Pike financier A. Eddy Zai, who pleaded guilty to stealing $16.7 million in loans, said the Plain Dealer.

Raguz was sentenced to 14 years in prison, and Zai is to be sentenced Feb. 5. Jukic's sentencing was delayed while he testified against other defendants.  Police made more 24 arrests  in the case.

The now defunct St. Paul Croatian FCU cost the National Share Insurance Fund more than $170 million.

Seven NC CUs launch Save to Win

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RALEIGH, N.C. (1/14/13)--Seven North Carolina credit unions this month launched Save to Win, a program that encourages consumers to develop the habit of saving money, said the North Carolina Credit Union League.

The program encourages saving money by offering the opportunity to win monthly prizes--and a chance at a $30,000 grand prize at the end of the campaign (The Weekly Conversation Jan. 11).

The seven credit unions launching the year-long campaign this month are:

  • American Partners FCU, Reidsville;
  • Greensboro (N.C.) Municipal FCU;
  • Mountain CU, Waynesville;
  • Piedmont Advantage CU, Winston-Salem;
  • Premier FCU, Greensboro;
  • Telco Community CU, Asheville; and
  • Winston-Salem (N.C.) FCU. 
NCCUL, in partnership the Michigan Credit Union League, is administering the program on behalf of the credit unions.

Save to Win participants open a special 12-month share certificate to enter the campaign. Participants earn chances for monthly, quarterly, and grand prizes by making additional deposits to the certificate in $25 increments--with up to 10 chances per person per month. Participants do not lose any deposits and earn dividends on the money they save.

MCUL first implemented Save to Win in Michigan in 2009. In its first year, more than 11,000 people saved more than $9 million. The campaign has grown in size and credit union participation since.

To view a video about the first member account opened for the North Carolina program, use the link.

DDoS attacks: NSA's tech assistance raises privacy flags

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WASHINGTON (1/14/13)--The National Security Agency's technical assistance to large U.S. banks fighting increased distributed denial of service attacks means DDoS attacks no longer are just a business issue. They are also a matter of national security. That raises flags for privacy advocates who don't want government and private business data intertwined, the Credit Union National Association has learned.

Government involvement with credit unions and banks is not new. Credit unions have worked for years with the Federal Bureau of Investigation and other agencies to fight fraud and monitor robbery trends. While credit unions work with security firms to block thieves and hackers,  NSA's involvement ups the ante.

The DDoS attacks don't directly involve data theft that leads to fraud. However, they disrupt a key U.S. infrastructure: the financial system, said the American Banker (Jan. 11). The attacks  not only stall service, they also distract financial institutions' security teams. Sophisticated cybercriminals taking advantage of the distraction can steal data and make fraudulent transactions.

The NSA collects intelligence so its technical abilities are beyond other government agencies, said the Banker.  It sends a team to the bank to educate it on how an intrusion occurred, determine if anything was stolen and identify similar events elsewhere. The bank must share some data to help pinpoint an attack's "signature." This creates a privacy problem, said the Electronic Privacy Information Center.

Other government agencies monitoring the DDoS attacks include the FBI, the Treasury Department, the Homeland Security Department and the Justice Department. They provide advance warning of the attacks. For the past five years, banks have gained higher security clearances so the agencies can share information needed to fight the attacks.

CU System briefs (01/11/2013)

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  • FARMERS BRANCH, Texas (1/11/13)--The Texas Credit Union League has created an online Hispanic Outreach Forum so credit unions in the state can share their Hispanic outreach best practices. The league's newsletter, LoneStar Leaguer (Jan. 10), said member credit unions will need their username and password to access the forum on its website. The forum was the recommendation of the league's International Relationship Committee, chaired by Gary Williams, president/CEO of Unity One CU, Fort Worth. Vice chairman of the committee is Robert Peterson of OneSource FCU, El Paso …
  • TUSCALOOSA, Ala., and SOUTH BEND, Ind. (1/11/13)--A challenge between Tuscaloosa,Ala.-based Alabama CU and South Bend, Ind.-based Notre Dame FCU has resulted in a $10,000 donation to Alabama CU's Secret Meals for Hungry Children. The challenge involved finding out which credit union could generate the most credit card applications in advance of Monday night's Bowl Championship Series game. Alabama CU generated 355 applications to Notre Dame's 331 (Tuscaloosanews.com Jan. 10). The Secret Meals program will feed 65 hungry children for a year, said Alabama CU President Steve Swofford. Notre Dame FCU's charity of choice was Kelly Cares Foundation, established by Notre Dame football coach Brian Kelly and his wife, Paqui ...
  • WESTBURY, N.Y. (1/11/13)--NEFCU, based in Westbury, N.Y., has launched a new website, CUShine,  targeted at 18- to 26-year-olds. The site provides information on how young adults can better manage their financial futures. It is "the latest addition to our financial literacy outreach program," said Valerie Garguilo, vice president of marketing and community relations at the $1.9 billion asset credit union. Students at the Frank G. Zarb School of Business at Hofstra University will create the site's content with a Gen Y perspective. They will blog and create videocasts for members who are starting careers, working on a degree and becoming financially independent …
  • WYANDOTTE, Mich. (1/11/13)--Wyandotte (Mich.) FCU has changed its name to NuPath Community CU, as of Jan. 2. It also has switched to a new state credit union charter. It can now serve anyone living, working and worshipping in Allegan, Kent, Monroe, Ottawa and Wayne counties (Wyandotte.patch.com Jan. 10). NuPath Community CU, which services about 110 select employee groups, is also celebrating its 75th anniversary this year. The $90 million asset credit union was established in 1938 by 25 employees of Michigan Alkali as Michigan Alkali Employees CU. It also has an office in Holland, Mich. …

Three more CUs announce loyalty rewards, rebates

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MADISON, Wis. (1/11/13)--Call it patronage dividends, loyalty rewards, or cashback rebates--either way, members win.  Three more credit unions have announced they're paying members back for their business.

"We believe that when the credit union is successful, it's not only a sound business practice to reward the owners of the credit union and share our surplus, but that this practice clearly demonstrates the credit union difference," said David Ackerman, president/CEO of U$X FCU, $204 million asset credit union in Cranberry Township, Pa.

U$X FCU's 2012 Member Loyalty Reward payout totaled $420,000. The interest rebate goes to members of good standing with deposit or loan accounts,  except for certain mortgages (Life is a Highway Jan. 8). 

"Unlike many financial institutions, when U$X FCU has a successful year, we distribute part of the earnings to the people whose loyal support helped us be successful," Ackerman said.

The credit union has more than 20,075 members. Its rebate equaled six cents per dollar of dividends earned and/or loan interest paid during 2012. It has paid more than $6.6 million during the past 11 years.

In Schaumburg, Ill., Motorola Employees CU (MECU), with $889 million assets and 39,180 members, paid a special patronage dividend totaling $750,000 on Dec. 31--the third consecutive year MECU has returned profits to members.  The latest dividend is in addition to regular dividends it pays into members' savings accounts.

All active members in good standing received at least $5 in their MECU savings accounts. The dividend averaged about $19 each, with members who made the greatest use of the credit union's services receiving an average $86.

OMNI Community CU, Battle Creek, Mich., announced its fifth annual Cashback Rebate will be deposited today in members' regular savings accounts (Michigan Monitor Jan. 2). Since the $290 million asset credit union started its rebate program in 2008, it has returned $4 million to members.

"Without their faith that we're always looking out for their best interests, we wouldn't be the institution we are today," said OMNI CEO Ted Parsons.  "That's a responsibility that everyone at OMNI takes very seriously. Our membership is the best out there, and every time we help someone, we're trying to show them why they made the right decision coming to us."

CUNA: Youth Week is 'golden moment'

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MADISON, Wis. (1/11/13)--Credit unions can build the strength of their overall portfolios by attracting young members, according to Joanne Sepich, Credit Union National Association (CUNA) youth week coordinator.

National Credit Union Youth Week, April 21-27, is another opportunity to build that strength.

National Credit Union Youth Week was created by CUNA as an opportunity for credit unions nationwide to focus on the financial needs of young people and provide financial literacy education. The event focuses on teaching the benefits of saving and goal setting, and invites youth to open savings accounts at their credit union and make deposits throughout the year.

This year's theme, "Savings Sleuth: Solve the Mystery," will draw in youth (and adults) with the fun of mystery and mustaches. There's a "Collect the Clues" kit of clue posters and activity sheets credit unions can pair up with prizes.

Savings Sleuth: Solve the Mystery materials include financial education content, fun items to reward young members and bright, neon-colored apparel to dress the part in April. Several items from last year's campaign were successful enough to have been carried over to the 2013 line-up, including the magic color-changing mood cup and the Quarter Saver Folder, which holds $5 in quarters and boasts a positive message on saving.

Gaining young members and keeping them through the lifetime product cycle is a worthy goal for the future, but it's parents and grandparents who deliver children to branch locations, Sepich wrote in a column on CUInsight (Jan. 10).

"This is a golden moment," Sepich said. "If the child has a nice experience in the branch and walks out with prize, a treat, and a savings account, you've scored two huge wins. That child has started the path of lifelong membership, and that grown-up's loyalty to your credit union has just soared."

April is Financial Literacy Month, Sepich noted. She recommended credit unions work this to their advantage by rewarding each adult who brings in a child to make a deposit. Rewards could range from budget-  or college-savings planning tools to a discount on loan fees.

Because National Credit Union Youth Week occurs during Financial Literacy Month, credit unions can extend their youth activities throughout April. CUNA conducts the National Youth Saving Challenge the entire month of April. The challenge rewards 10 savers with $100 cash prizes. Last April, 241 credit unions joined the Saving Challenge and engaged 125,867 youth, who deposited a collective $21.3 million in their credit union savings accounts, including 7,300 new member accounts.

In 2000, The Jump$tart Coalition for Personal Financial Literacy began promoting April as Financial Literacy for Youth Month. In 2003, the U.S. Senate designated April as Financial Literacy for Youth Month.

CSS provider study: Reg environment dents CEOs' optimism

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AUSTIN, Texas (1/11/13)--Credit union CEOs are more pessimistic about 2013 than they were about 2012, largely due to an increasingly difficult and unpredictable regulatory environment, according to a survey from Abound Resources, an alliance provider of CUNA Strategic Services (CSS).

Other major issues included a weak economy and loan demand. Both of these factors were mentioned by more than 60% of credit union CEOs surveyed as major concerns for 2013.

"This year credit union CEOs are decidedly more pessimistic than they have been since we launched our annual survey four years ago," said Brad Smith, president/CEO of Abound Resources, a credit union consulting firm.

Roughly 25% of respondents reported they were either very or somewhat pessimistic about their credit union's outlook  for 2013. That compares with 16% in 2012 who were pessimistic and none who were very pessimistic. About 37% in 2013 said they were optimistic or very optimistic, compared with 43% in 2012. The other 38% indicated they expect another year like 2012.

Other key findings:

  • Increasing consumer loans, expanding online presence and improving sales and marketing methods were the top three priorities CEOs cited as growth priorities for 2013.
  • Interest in increasing member business loans and mortgage loans jumped considerably this year, with CEOs searching for higher yields and portfolio diversification.
  • Operating priorities were consistent with surveys of past years, with the primary focus on streamlining workflows and increasing operational and technology efficiencies.
Expect 2013 to be the year of credit union workflow improvements, with 50% citing this as a priority, said Abound Resources. 

"There is a built-up demand for improving credit union workflow since so few credit unions made workflow improvements last year," said Smith. "Workflow improvement projects are tricky as middle management is often resistant to changing how they work, or they don't know how to make changes beyond a few tweaks."

For a complimentary copy of the survey and Abound's top five recommended strategies, use the link.

NY foundation awards nearly $46K in 2012 grants

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ALBANY, N.Y. (1/11/13)--The New York Credit Union Foundation awarded $45,953 in grants to New York credit unions and credit union supporters during 2012.

The grants were awarded in three categories: Smart Money, Financial Fitness and Professional Development.

Smart Money grants help credit unions provide financial education to their members and/or consumers. A total of $3,750 was awarded to three credit unions:

  • ServU FCU, Painted Post;
  • Westar FCU, Camillus; and
  • Cooperative FCU, Syracuse.
Nine credit unions received a total of $12,111 in Financial Fitness grants to enhance operations and improve service to their members. They are:

  • Greece Community FCU, Rochester;
  • GRS Employees FCU, West Henrietta;
  • MPO FCU, Middletown;
  • UHS Employees FCU, Johnson City;
  • Mount St. Mary's Hospital FCU, Lewiston,
  • Erie County Employees FCU, Buffalo; 
  • SUNY Geneseo FCU, Geneseo;
  • NYU FCU, New York; and
  • St. John's Buffalo (N.Y.) FCU.
The foundation awarded 57 Professional Development Grants, totaling $30,092, to representatives of 30 credit unions to help fund their participation in industry training sessions and education events.

Ohio CUs' 3Q financials post record loans

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COLUMBUS, Ohio (1/11/13)--Ohio credit unions posted record results in loan originations in the first three quarters of 2012, according to the most recent Ohio Credit Union Quarterly Performance Summary published by the Ohio Credit Union League.

The credit unions also increased their core deposit balances and saw robust membership growth (eLumination Newsletter Jan. 9).

"The Ohio membership growth experience is something we're seeing at the national level as well--consumers (both borrowers and savers) are moving to credit unions--voting with their feet and discovering that credit unions are the best choice for their financial services," Mike Schenk, vice president of economics and statistics at the Credit Union National Association, told News Now

"In the year ending September 2012, credit union memberships grew by 2.5 million--a 2.7% rate of growth," he added. "The percentage increase compares to a U.S. population growth rate of a bit less than 1% over the same period. Credit union membership growth--both in absolute and percentage terms--is the fastest we've seen in roughly 15 years."

Ohio credit unions' financial performance was in line with, or better than, many national trends, the league said. They originated more than $1.6 billion in first mortgages, a 68.8% increase over mortgages in the first nine months of 2011, helping drive total loan originations up 33.5%.

Core deposits drove shares' increase at a faster rate than the national average, with a 9.6% annual increase in regular savings accounts, the league added.

Ohio membership continued to increase, with the addition of more than 39,000 members in 12 months.

CU supporter to chair Ohio Senate Finance Committee

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COLUMBUS, Ohio (1/11/13)--Ohio State Sen. Scott Oelslager (R-Canton), a friend of credit unions, has been named chairman of that chamber's Finance Committee, according to the Ohio Credit Union League.

The Finance Committee leads the Senate's role in the state's biennial budget process.

Oelslager was a joint sponsor of past legislation to grant credit unions access to public funds, said the league (eLumination Newsletter Jan. 9).

Sens. Jim Hughes (R-Columbus) and Kevin Bacon (R-Columbus) will lead the Senate Insurance and Financial Institutions Committee, which will preside over most legislation relating to financial services, including banking and credit union issues.

Hughes and Bacon have good relationships with credit unions and have always been willing to meet and discuss issues, the league said.

State Sens. Tim Schaffer (R-Lancaster) and Bob Peterson (R-Sabina) will preside over the state's Ways and Means Committee, which the league expects will review the state's sales and use tax exceptions.  Schaffer and Peterson also have been willing to meet with credit union leaders. They have worked on issues of interest to credit unions, but neither have taken a position on major issues specifically affecting credit unions, said the league.

Doh! ID thief ships loot to victims' home

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ANCHORAGE, Alaska (1/10/13)--An identity thief who made $5,000 in charges within an hour on an Anchorage, Alaska, couple's credit union debit card may be kicking himself. The thief bought the loot but forgot to change the shipping address. The loot went to the victims' home.

Chris and Susie Linford, members of  Anchorage-based Credit Union 1, told the Anchorage Daily News  (Jan. 6) that the credit union called in December and told them someone had stolen their debit card number and was making authorized charges.

The credit union immediately blocked the card, issued a new account number and refunded their  money. The Linfords filed a police report, assuming the thief was enjoying the ill-gotten bounty.

But in mid-December packages began to arrive--sometimes two a day--with goods they hadn't ordered.  The thief may have not changed the card's shipping address when ordering the goods online, so the packages were delivered to their billing address, the Linfords said.  They don't believe the thief intended to intercept the packages from their porch--orders were from phone numbers and internet provider addresses as far away as Kansas and Illinois.

Pat Berry, Credit Union 1 vice president and chief audit executive, told the Daily News that it is uncommon to have stolen merchandise arrive at a victim's home. The thief likely did not use a cloned card but instead used an account number likely gained hacking into a card payments system or retailer. Police said the thief sounds like an amateur.

The story, picked up nationally by AOL's The Daily Finance and Huffington Post, provided favorable press for the credit union.

The Daily Finance (Jan. 9) said the Linfords should be grateful the Credit Union 1 "was so good about spotting the fraud and getting them their money back." Federal law limits cardholders' liability for card theft to $50 but cardholders can be liable for up to $500 for fraudulent purchases. "Credit Union 1 evidently has a zero liability policy for debit card fraud and it sounds like the Linfords got their money back in their account in a timely manner," said the publication.

For the full articles, use the link.

CU System briefs

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  • MADISON, Wis., and NEW YORK (1/10/13)--There's still time to sign up for the webinar Tuesday on "Combating Elder Financial Abuse," presented by the Credit Union National Association and the National Federation of Community Development Credit Unions. The webinar begins at 2 p.m. ET and will address the fight to protect financially vulnerable seniors. The Consumer Financial Protection Bureau has collected data and information about the issue as one of its priorities for 2013. Use these links to register: for CUNA affiliated credit unions) and (for other organizations and individuals)  …
  • FORT WAYNE, Ind. (1/10/13)--Quick-thinking staff at Fort Wayne, Ind.-based Freedom Financial CU foiled an attempted robbery Wednesday morning by locking the vestibule doors to keep two men out of the credit union, said Fort Wayne police. The attempted robbery occurred at about 11 a.m. No one was hurt. One of the suspects allegedly carried a gun. The suspects fled on foot and got into a getaway card in a residential area (Indiana News Center Jan. 9) …
  • MADISON, Wis. (1/10/13)--Catherine Haberland has been named vice president of marketing and communications for World Council of Credit Unions. She will oversee WOCCU's strategic communications efforts for its organizational members and donor community. Haberland has led international and domestic projects for the U.S. government, state government and non-governmental organizations. She served on a senior management team with the Wisconsin Department of Financial Institutions under former Gov. Jim Doyle and directed the department's policy and communications and liaising with the Wisconsin Credit Union League to develop regulatory policy. Before that Haberland served as regional team leader for the U.S. Agency for International Development's Office of Transition Initiatives, where she initiated and supervised multi-million dollar projects in targeted transition relief to countries overcoming conflict …
  • CORNING, N.Y. (1/10/13)--Corning (N.Y.) FCU has purchased a former branch of Tower Bank on Norland Avenue in Chambersburg, N.Y., for $850,000 (publicopiniononline.com Jan. 9). The building will become a full-service branch for the $963 million asset credit union. The credit union said it plans to close its Wayne Avenue branch when the Norland Avenue branch opens. Tower Bank built the branch in 2010 but closed in last year when it merged with Susquehanna Bank. Corning acquired its current Chambersburg branch when it merged with American Community FCU last year. Corning serves more than 84,000 members …
  • CHERRY HILL, N.J. (1/10/13)--Martin Banecker will retire Tuesday as president/CEO of Cherry Hill, N.J.-based Campbell Employees FCU after 30 years' service. David Ardire, vice president of finance, will assume the CEO role then, according to the New Jersey Credit Union League (The Daily Exchange Jan. 9). Banecker has served with the $166 million asset credit union since November 1982, when he became assistant general manager of the then-$18 million asset credit union. Prior to joining Campbell Employees FCU, he was a National Credit Union Administration examiner for eight years in the Philly/South Jersey region. Ardire began his career with the credit union in 1979 as an accountant/systems manager. He left and served with Campbell Soup Co. and Piramal Glass--USA before returning to the credit union in 2011 as vice president.  He was active as a volunteer with the credit union for 25 years …

CU marketers, flex those thumbs: Social media goes mobile

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NEW YORK (1/10/13)--Social media is going mobile, with marketers scrambling to catch up with consumers where they connect--on tablets and smartphones, says a new eMarketer report. Credit union marketers dabbling in either area need to flex their thumbs and employ an outreach strategy encompassing both.

"The key opportunity for marketers in the shift toward mobile is that mobile users not only log in more frequently, but they also spend more total time on social media sites," said the New York-based eMarketer (Jan. 9)  in its new report,"Social Media Marketing on Mobile Devices: Turning Challenges into Opportunities."

"As devices integrate social media more deeply, such as by making it easier to upload photos from a mobile phone to a social site, it reinforces the mobile-social virtuous circle, making it even stronger, "said the report.

Last March, 60% of U.S. smartphone users polled by Google visited mobile social networks daily, up from 54% in July 2011. In 2012, users accessed social media in various ways, with fewer using computers and more employing mobile phones and tablets:

  • Computer, 94%, down from 97% in 2011.
  • Mobile phone, 46% up from 37%;
  • Tablet, 16%, up from 3%.
  • Handheld music player, 7% in both years.
  • Game console, 4%, up from 3%;
  • E-readers, 3%, up from 2%.
  • Internet-enabled TV, 4%, up from 2%.
"The most engaged folks on social networks are people who are accessing via mobile," said Chia Chen, senior vice president and mobile practice lead at Digitas. "So the question is, how do we think about it from a mobile perspective in the beginning? How do we make the social experience for them mobile at the core?"

Emarketer's advice to marketers: think broadly and strategically.  Other recommendations critical to social marketing campaigns:

  • Understand the ways consumers use their devices, especially the differences between smartphones and tablets. Make marketing content accessible across all devices.
  • Overhaul the credit union's Facebook strategy. Focus less on promotions tied to the brand page and more on content delivered to the newsfeed. As Facebook's mobile usage rises dramatically, the newsfeed takes pride of place on smaller-screen devices.
  • Think opportunity as well as adaptation. Photo sharing is among the top activities for mobile social users. Lean toward imagery instead of text. Also, mobile offers the location component to marketers aiming to catch the attention of mobile users on the go.

SECU assists 6,500 students with college applications

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RALEIGH, N.C. (1/10/13)--State Employees' CU (SECU) personnel provided assistance to 6,500 North Carolina high school seniors completing and submitting free online college applications during College Application Week (CAW) in November.

The event is one example of how credit unions can help communities in creative and useful ways and have an impact. 

About 160 credit union employees from 81 SECU branches volunteered this year to help the senior students at participating high schools statewide complete and submit more than 8,800 online applications to North Carolina colleges and universities. At the high schools where SECU personnel assisted, the number of students participating surpassed last year's efforts by close to 2,800 students.

CAW "is a great opportunity for SECU to join in providing support and encouragement to high school seniors focusing on their education," said Krista Loew, SECU vice president of individual retirement account services, who serves as the credit union's CAW coordinator. "Completing a college application can be intimidating--helping seniors work through the process is an enjoyable and rewarding experience for our employees. This year's event was very successful and we look forward to future CAW events."

The week-long event allowed the students to apply to at least one college or university online using CFNC.org. A primary focus was assisting first-generation students who may not otherwise apply to college. College Foundation of North Carolina (CFNC) and Carolinas Association of Collegiate Registrars and Admissions Officers sponsored the event.

SECU began assisting with CAW in 2009, piloting the program with volunteer staff from six credit union branches. The success of that pilot encouraged SECU personnel to offer assistance on a larger scale in subsequent years.

SECU also has been participating in Free Application for Federal Student Aid Day with CFNC and the North Carolina Association of Student Financial Aid Association each February since 2009, helping students and their families apply for state and federal financial aid for college.

CUDL paper sets benchmarks for CUs' asset-disposition programs

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ONTARIO, Calif. (1/10/13)--Credit unions should benchmark the performance of their asset disposition programs against key metrics commonly used by top performing remarketing companies, according to a new white paper from CUDL.

The free white paper, "Effective Asset Disposition," offers insight to benchmarks and best practices based on strategies of national automotive wholesale remarketers.

Vehicle repossessions for U.S. credit unions reached $317 million in 2008, but have continued to improve past couple of years, the white paper said.  In the past year, credit unions reduced the volume of repossessed vehicles, with quantity declining by 16% to just under $145 million.

The credit union average value per repossessed vehicle was $10,161 at the end of the second quarter of 2012, said CUDL.  Nearly 75% of credit union repossessed vehicles are valued from $5,000 to $20,000. As a result, credit unions need to enact procedures that make disposition of these assets more efficient, timely and cost effective, according to the white paper.

"Top performing credit union management teams view efficient and effective asset disposition as an integral part of the lending cycle, in the same vein as managing credit risk, balancing loan portfolios, and implementing sound collection practices," the paper said. "Credit unions that manage the whole sale disposition may well mitigate risk by reducing loan losses, enhancing their ability to lend through improved cash flow from the sale of repossessed assets."

The white paper recommends that credit unions benchmark their program's against metrics used by top-performing remarketing companies nationally. The metrics include:

  • Days-to-sale, measuring the time elapsed between when a credit union asset is repossessed and when the credit union receives funds sale of the asset;
  • Retention rate at auction, the percentage of wholesale book value earned from the sale of the repossessed asset;
  • Fees credit unions pay to their auction provider and any third-party remarketers; and
  • The number of bidders the credit unions' providers are delivering.
The paper also recommends that auctions and third-party remarketers provide an online tool so remote buyers can compete with bidders attending sale-day auctions.

'Legislature Today' radio show to feature CUAD every week

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BISMARCK, N.D. (1/10/13)--The Credit Union Association of the Dakotas (CUAD) will be a featured guest on the two-hour radio show "Legislature Today" each Tuesday from 8 p.m. to 9 p.m. CT during the current North Dakota legislative session. 

Credit Union Association of the Dakotas' (CUAD) advocacy team,  Robbie Thompson, left, president/CEO, and Jeff Olson, vice president of advocacy and awareness, were interviewed for an hour  during a live radio and Web broadcast of the "Legislature Today" Tuesday night. CUAD will be a featured guest on the radio show each Tuesday from 8 p.m. to 9 p.m. CT during the current North Dakota legislative session. (Photo provided by Credit Union Association of the Dakotas)
CUAD's advocacy team of Robbie Thompson, president/CEO, and Jeff Olson, vice president of advocacy and awareness, were interviewed for an hour Tuesday during a live radio and Web broadcast of the show.

"To be a part this first-ever live weekly multi-media program that features the state's executive and legislative leaders is the perfect vehicle for us to create more awareness of credit unions", Thompson said.

The new show is broadcast from historic Peacock Alley restaurant and bar in downtown Bismarck, N.D., a popular spot for state legislators. "Legislature Today" is scheduled to be broadcast Monday through Thursday from 7 p.m. to 9 p.m. during the North Dakota legislative session. 

Tuesday's show was a great beginning, CUAD said.  Thompson and Olson discussed credit union structure, the three-tiered system, and the history of credit unions.

Stressing that credit unions are "not for profit, but for service," Thompson described the differences between credit unions and banks to the audience. 

Olson discussed the relationship between credit unions and the legislative and regulatory bodies. North Dakota credit unions have a very positive relationship with both branches, he said. 

CUAD is one of four broadcast partners for the show, launched by the Bakken Beacon, a new North Dakota media company. The show can be heard on KFYR 550 AM, Bismarck; 1100 AM Fargo "The Flag"; and KTGO 1090 AM, which covers northwestern North Dakota's oil country.  The radio program will also be broadcast live through Web streaming at http://am1100theflag.com/ and will be archived each week.

Nutmeg State FCU broadens footprint at Wal-Mart

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ROCKY HILL, Conn. (1/10/13)--Nutmeg State FCU's presence in Connecticut continues to grow. The $352 million asset credit union announced the expansion of two new branches in Wal-Mart stores in the coming months, including the first Nutmeg location in Middlesex County.

Nutmeg State FCU is headquartered in Rocky Hill, Conn., with offices in Manchester, East Windsor, Hartford, Glastonbury, New Britain and Newington.

The expansion means a bigger footprint in Connecticut, said Nutmeg State FCU President/CEO, John Holt.  "This expansion allows us to serve even more members."

Both new branches will be located inside Wal-Mart stores in Cromwell and Bristol. Nutmeg State made Connecticut history in 2011 when it opened the state's first credit union branch inside a grocery store at its Newington Price Chopper location.

"By opening branches inside retail centers, we offer the ultimate convenience," said Holt. "We're committed to making banking as easy as possible for our members."

The addition of Bristol and Cromwell locations will bring Nutmeg's statewide presence to nine branches.

Nutmeg State also rolled out Connecticut's first mobile branch. The credit union employs the full-service branch on wheels daily, serving by making stops at workplaces and schools. Nutmeg's new mobile branch debuted Dec. 6 at Illing Middle School in Manchester, Conn. Besides community venues, the mobile branch will serve in disaster-relief situations. The vehicle is staffed with Nutmeg State FCU personnel (News Now Dec. 20).

Graham elected to CUNA Board seat

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MADISON,Wis. (1/10/13)--John Graham has been elected to the Credit Union National Association (CUNA) Board of Directors, representing District 2, Class A.

Graham is president of Kentucky Employees CU, Frankfort, Ky.  He ran in the only contested election for a CUNA board seat. The other candidate was Joe Thomas, president of Fairfax County FCU, Fairfax, Va.

Graham will begin his term at the adjournment of CUNA's 2013 Annual General Meeting on Feb. 25 in Washington, D.C.

Motley Fool column: CUs are 'good news for tough times'

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ALEXANDRIA, Va. (1/10/13)--The Credit Union National Association (CUNA) is prominently featured in a positive article about credit unions' growth in Wednesday's The Motley Fool. The conclusion the article makes:  Credit unions are "good news for tough times."

CUNA,  in the article entitled "Americans Keep Fleeing Banks, Flock to Credit Unions Instead," noted that credit union membership hit a record high in 2011 and again in 2012.

The article also featured third quarter 2012 statistics from SNL Financial about credit unions gaining ground against the competition in credit card loans. Credit unions' credit card loans to consumers topped $38 billion, a nearly $2 billion or 5% increase over third quarter 2011. The same loans at commercial banks totaled $669 billion--down $2 billion for the same period.

The Motley Fool attributed the surge in the interest in credit unions to "highly publicized efforts by commercial banks to load up their customers with new fees," banks' role in the 2008 financial crisis, and banks' fight to preserve high rates, fees and other policies.

Credit unions are "doing a lot of things right," the Fool said. It told how credit unions' not-for-profit model helps consumers by keeping costs honest. Credit unions lack any incentive to raise costs, it said.

"None of this is good news for investors in banking stocks," said the Fool. "But for consumers, fed up with the high cost of traditional "banking"? It's good news for tough times."

Use the link to read the full article.

CU System briefs (01/09/2013)

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  • LANHAM, Md., and WASHINGTON (1/9/13)--FedChoice FCU, based in Lanham, Md., and Washington Post Employees FCU (WPEFCU), Washington, D.C., have merged, effect Jan. 1. The merger received near unanimous approval by more than 10% of the $19 million asset WPEFCU's membership voting. FedChoice is the surviving credit union. WPEFCU CEO Patricia Yates noted members will have an extensive offering of products and services and that FedChoice has served the community for more than 75 years. With the merger, the $320 million asset FedChoice will add another branch in Washington. WPEFCU will operate under its current name until account, service and system integration is complete at the end of first quarter. The combined credit union will have about 24,800 members …
  • SEWARD, Neb. (1/9/13)--The former manager of the now defunct HBE CU, Seward, Neb., was sentenced Monday to 45 months in prison for stealing $636,000 from the credit union (WOWT.com Jan. 7). Crystal Lankford pleaded guilty to embezzlement from a federally insured credit union. She was the sole employee, manager and treasurer of the credit union. From at least April 12, 2006, to Sept. 20, 2011, Lankford allegedly wrote checks drawn on the credit union's operating account to herself and her husband, Steve Lankford without authorization and deposited the into her personal checking account. She quit the credit union in October, 2011. At that time the credit union had a near-zero balance. The accounts and funds were insured by the National Credit Union Share Insurance Fund …
  • TUSCALOOSA, Ala. (1/9/13)--Heather Marroquin, 30, of Tuscaloosa, Ala., has been sentenced to three years in prison for third-degree robbery and first-degree theft in the holdup of Tuscaloosaa-based Alabama CU on Oct. 18, 2011. Marroquin pleaded guilty on Dec. 22 in Tuscaloosa County Circuit Court (TuscaloosaNews.com Jan. 8). The robbery occurred when a woman entered the credit union, told the manager she had a gun and handed over a note demanding money. She then stuffed $6,000 into her bra and fled. During the getaway, the suspect jumped into a vehicle nearby and told the driver she needed help. The driver took her to her car, where police officers arrested her. Marroquin also was sentenced to five years of supervised probation after her prison term …

MnCUN to monitor state's revamp of banking regs

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ST. PAUL, Minn. (1/9/13)--A Minnesota state lawmaker's plan to clean up the state's banking regulations will be closely monitored by the Minnesota Credit Union Network (MnCUN).

State Rep. Joe Atkins (DFL-Inver Grove Heights), who wants to rewrite rules governing banks and credit unions in the state, has said he aims to simplify the rules, not make them more restrictive than current regulations (Finance & Commerce Jan. 8).  Atkins chairs the Minnesota House Commerce and Consumer Protection and Finance Committee.

At a meeting in December with MnCUN, Atkins mentioned the initiative and stressed that its purpose was to make regulations easier to understand, not to add work to credit unions' plates, said the network.

Still, "the network plans to closely monitor this initiative to ensure that more regulations aren't added," said MnCUN.

The network will discuss the initiative in an article Friday about the start of the legislative session in its member publication, The Pulse, and "reassure credit unions that we have a close relationship with Rep. Atkins and will closely monitor this initiative."

Several banking associations in the state were skeptical of the plan, cautioning it could bring unintended consequences, said the article.

Ga study: 322% have no plan to pay off holiday debt

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DULUTH, Ga. (1/9/13)--Nearly a third of consumers responding to a survey by the Georgia Credit Union Affiliates said they have no plan in place to pay off their 2012 holiday debt.  

When asked how they plan to pay off their holiday debt, 32.2% of respondents said they have no plan.

On the other side of the ledger, 28.4% of those surveyed said they plan to pay their holiday debt within six months. Another 6.1% would pay off their debt between six months and 12 months.

The 2012 Consumer Federation of America/Credit Union National Association holiday spending survey found that more consumers planned to spend more than they did last year, while fewer planned to curtail their spending this year (News Now Nov. 26).  The percentage of consumers who said they would spend more than last year rose from 8% to 12%. Those who said they would spend less declined from 41% to 38%.

In a report on spending during the first 32 days of the November-December 2012 holiday season, comScore reported $21.4 billion had been spent online, a 14% increase versus the corresponding days last year.

A November 2012 survey by the American Research Group indicated Americans planned to spend an average of $854 for holiday gifts.

IT in 2013: Budgets/investments flat, hiring on hold

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IRVINE, Calif. (1/9/13)--Credit unions can expect information technology (IT) budgets to increase slightly during 2013, according to a new study of IT executives. However, capital investments in new technology will stay flat, and hiring is on hold until the economy is more certain.

That means most IT budget planners expect their operational budgets to grow 2.5%--same as the previous year, said Computer Economics, an Irvine, Calif.-based IT research firm. It surveyed IT organizations during the fourth quarter about their spending and staffing plans for the year ahead. The findings are in its latest report, Outlook for IT Spending and Staffing in2013.

"The forecast is in stark contrast to very positive growth in IT capital budgets and hiring that occurred at the end of last year," said John Longwell, vice president of research for Computer Economics. "That momentum seems to have stalled moving into the New Year."

Among the findings:

  • IT executives plan for a scant 0.3% increase in median (average) IT capital spending. The reason? The U.S. budget deficit negotiations, Europe's recession and uncertainty about the Chinese economy are creating a lack of clarity.
  • IT operational budgets will rise 2.5% at the median (the middle number in a range of numbers). IT executives will continue to examine outsourcing alternatives as a means to improve agility and lower their cost structure. Cloud computing service providers will be the primary beneficiaries, but desktop support and help desk outsourcing could also rise.
  • Many organizations likely will continue to use outsourcing as a strategy to restrain headcount. However, if the economy keeps from stalling, they would revise their capital spending budgets and hire more permanent workers. If the economy weakens, there is room for budget reductions.
  • IT capital budgets will remain flat, showing little or no growth at the median. Most spending will favor software over hardware upgrades.
  • IT staff headcount will remain largely unchanged. While many IT organizations plan to do some hiring, overall job growth will be muted. Most IT workers will receive pay raises in the 2% to 3% range.

Ohio CU Foundation awarded 65 grants in 2012

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COLUMBUS, Ohio (1/9/13)--The Ohio Credit Union Foundation (OCUF) awarded 65 grants totaling nearly $230,000 in 2012 through donations from credit unions, individuals chapters and business partners. It also established a $200,000 fundraising goal for 2013.

The foundation was able to have a big impact in 2012, said Stan Barnes, CEO of CSE FCU and chair of the OCUF board of trustees. "The success is due to the outstanding support of the foundation's efforts by Ohio credit unions. Our ability to fulfill credit union needs is due solely to support from within the movement."

The way the grants assisted credit unions, communities and individuals in Ohio included:

  • Forty-seven professional development grants helped credit union professionals expand their knowledge to better serve members.
  • Six financial education grants helped teach students basic financial education and entrepreneurship, providing knowledge to make good choices and create sound financial futures, said OCUF.
  • Six William A. Herring social responsibility grants helped community development credit unions remain viable and continue serving the members who rely on them.
  • Five college scholarships helped students pursue undergraduate degrees.
  • Three disaster relief grants benefitted members and communities devastated by the aftermath of windstorms, wildfires and a hurricane.
Grants totaling $45,000 funded the opening of three new student-run credit unions.

The foundation also continued its annual contribution to the Emmy Award-winning youth entrepreneurial show Biz Kid$, with a $30,000 grant.

In August, the OCUF Classic, OCUF's largest one-day fundraising event, generated $31,850 in grant dollars for 2013.

The foundation has $208,000 to grant in 2013.

"If the last few years are any indication, we expect the overwhelming need for grants to continue in 2013 and beyond," said Becky Hart, OCUF executive director. "Because the need is great, we will continue to look for new ways to generate funds for the foundation, while supporting the needs of credit unions and the communities they serve."

CUAD launches site to share good things CUs do

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BISMARCK, N.D. (1/9/13)--The Credit Union Association of the Dakotas (CUAD) has launched a new website--CU Social Good--dedicated to sharing the good things that credit unions do for people and their communities every day.

During CUAD's Awareness Campaign in 2012, which is continuing this year, it became evident that many people outside of the credit union world are uninformed about the credit union difference, and unaware of the nature of credit unions and their "People Helping People" philosophy, CUAD said.

CU Social Good, with the help of credit unions nationwide, is trying to change that, said CUAD. CU Social Good showcases the "good news" stories of credit unions and credit union people being involved in their communities--helping charities, promoting financial literacy, providing scholarships, volunteering their time and supporting people and planet over profit.

CU Social Good encourages credit unions to contribute their stories, telling what they do to help people in their community. The site aims to aggregate and create a forum for all the great things credit unions do.

The website could be used by everyone in the credit union industry for future legislative lobbying efforts, awareness campaigns and community relations--but above all--to help generate a new public awareness that will help credit unions remain successful in their mission well into the future, CUAD said.   

On the league's website homepage, CUAD also prominently features aSmarterChoice.org.--a website developed by the Credit Union National Association (CUNA) and the state leagues to help consumers learn about credit unions and find a credit union to join. aSmarterchoice.org also is a forum to collect what credit unions are doing for members.

CUNA and the state leagues launched aSmarterChoice.org March 2011. The site includes basic information about credit unions, member testimonials and recent media coverage about credit unions, and has as its centerpiece an online locator tool--CU Locator--that enables consumers not only to find a credit union close by, but one that they are eligible to join based on its field of membership. All U.S. credit unions are included in the site's database.

In fourth quarter 2012, aSmarerChoice.org saw 55,506 unique visitors, 81,094 total visits and 49,667 searches using CU Locator, Jill Stevenson, the website's manager, told News Now Monday.

To view the websites, use the links.

Supervisors move to improve CU oversight in Caribbean

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ST. KITTS, West Indies (1/9/13)--A project has begun to strengthen the capacity of the regulators responsible for the credit union sector in the six territories of the West Indies, allowing credit unions to further their economic impact in communities.

The Eastern Caribbean Central Bank (ECCB), with financial support from the World Bank, on Nov. 14 engaged the international consultancy firm of Dave Grace & Associates. Together, they aided the individual regulatory units in each territory of Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, Saint Lucia, and St. Vincent and the Grenadines in building the capacity of credit union supervisors.

The engagement will run through April.

"Credit unions are important financial intermediaries in the Eastern Caribbean Currency Union," said Grace and ECCB. "They hold deposits of up to 30% of gross domestic product in some member states and serve as the primary financial institution for many communities. The responsibility for the regulation and supervision of credit unions resides with local regulatory authorities in the respective territories."

The project will include developing:

  • A harmonized on-site supervisory manual;
  • Improving the reporting mechanisms for credit unions;
  • Training supervisors during a week-long workshop; and
  • Conducting joint inspections with national supervisors.

Utah CUs grant $58K to schools

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SALT LAKE CITY (1/9/13)--A credit union foundation here awarded Utah schools with more than $58,000 in grants last year.

Click to view larger image Utah's Two Rivers Alternative High School teacher Cassie Cox (right) accepts a grant check from 100% for Kids/America First CU representative Nicole Cypers (left). (Photo provided by The 100% For Kids Utah Credit Union Education Foundation)
Named "The 100% for Kids Utah Credit Union Education Foundation," it provided 21 districts and 36 schools funding in 2012 for things ranging from motivational speakers to greenhouses. The foundation's help has reached more than two million students since its inception.

With 28 credit unions donating to the cause the past 10 years, 100% for Kids relies on support from local credit unions. The foundation looks for grant applications that will impact the greatest number of students in the greatest way.

"At Two Rivers Alternative High School we are the last hope for students," said teacher Cassie Cox. "The last step between graduating and dropping out of high school."

Cox arranged to bring award-winning young adult authors to the school. By the end of the school year, two Rivers students will have met a Rwandan genocide survivor, featured in a television documentary "Lost Boys of Sudan," and Simeon Wright, a figure in the Civil Rights movement. After meeting these authors of living history, her students will be motivated to read and write more than ever, and those experiences will prove to be life-changing opportunities, she said. The foundation provided $1,500 to purchase books by the two authors.  

In the rural town of Morgan, Utah, teacher Megan Haslem used funds she received from the foundation to start a teaching greenhouse at the school. More than 730 students have access to the greenhouse through course projects.

The greenhouse means students can implement the scientific method in team-based inquiry labs. Inquiry labs promote innovative thinking to ask and answer problems. Students also get the opportunity to explore careers in horticulture. They help decide what to plant, they propagate plants and sell them to the community. Greenhouse students learn horticultural skills plus basic skills needed for future employment, Haslem said. "Responsibility, teamwork, problem solving, record keeping, goal setting and time management," she added.

The teaching greenhouse project eventually will be self-sustaining, selling items the students produce.

"Our board was very intrigued with this grant request because it covers multiple subject areas and grade levels," said foundation Director Liz White. "The self-sustaining business aspect was such a unique feature that we rarely see."

The 100% For Kids Utah Credit Union Education Foundation's mission is to improve education in Utah by enhancing and expanding classroom level resources and programs. It has donated more than $5 million since its inception in 2002, contributing to all of Utah's 40 school districts. All donated funds go directly to teachers for their classroom.

Author of White House 9/11 account to speak at CUNA ACUC

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MADISON, Wis. (1/8/13)--The author of a book about developments in the White House during the terrorist attacks on Sept. 11, 2001 will keynote a session of the Credit Union National Association's (CUNA) 2013 America's Credit Union Conference (ACUC) this summer.

Retired White House Military Officer Lt. Col. Robert Darling will speak at the Sunday June 30 session.  CUNA's ACUC will take place June 30-July 3 at the Hilton New York in New York City.

"We hear from attendees that ACUC is their conference choice to get energized and equipped with big ideas," said Jill Tomalin, senior vice president of association services at CUNA. "Lt. Col. Darling is sure to evoke action with his unique insights and inspiring experiences."

Lt. Col. Darling chronicled developments during the attack in his book, 24 Hours Inside the President's Bunker, 9/11/01: The White House, a minute-by-minute account of that day's events.

As a presidential pilot with Marine Helicopter Squadron One, he was handpicked in 2000 to work for the White House Military Office, Airlift Operations Department. He was in this position during the Sept. 11 attack and supported the president, vice president and national security adviser in the underground President's Emergency Operations Center, where he witnessed unprecedented events and decision making.

He retired from the U.S. Marine Corps in 2007 after more than 20 years of active duty. Earlier in his career he piloted attack helicopters in Desert Shield and Desert Storm.

Today Darling is president of the Military Officers Association of America Heritage Chapter in Quantico, Va., and vice president for business development for Zenetex, an information technology service management company in Herndon, Va.

For more information, use the links.

November membership growth is best in 15 years

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MADISON, Wis. (1/8/13)--Credit union membership grew 0.2% in November to a record 96.12 million, according to the Credit Union National Association's (CUNA's) Monthly Credit Union Estimates. That's a 2.5% annualized growth rate--the best in a decade and a half. 

"You would have to go back 15 years to find comparable membership growth," said Mike Schenk, vice president of CUNA's economics and statistics, during CUNA's press call Monday morning.  "Consumers are continuing to vote with their feet," he said.

November added 140,000 memberships, up from the 95.98 million memberships recorded in October by CUNA's monthly report. Credit unions reported phenomenal growth in 2011, with a boost from Bank Transfer Day, but that growth has continued, indicating that consumers trust credit unions with their financial business.

Other notable numbers reported in the estimates included:

  • Strong loan growth in every loan area except mortgages, which experienced a decline. Year over year, loans grew 4.4%, to reach $610 billion in November.
  • Savings grew 7.7% year over year, to $899.2 billion.
In 2013, credit unions can expect faster loan growth and savings growth of about 5% to 5.5% each, said Schenk.

Wash Post: Shiloh of Alexandria FCU lives the CU difference

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ALEXANDRIA, Va. (1/8/13)--Shiloh of Alexandria FCU was cited in a Sunday Washington Post article as an example of a trusted financial institution serving a small community in an age dominated by too-big-to-fail debates and Capitol Hill reforms.

Small credit unions are often "lost in the shuffle," in the age of large financial institutions said Bill Cheney, president/CEO of the Credit Union National Association, told the Post. Banking regulations don't take into account the interests of smaller financial institutions, Cheney said.

The 20-year-old, $2.4 million assets credit union, based in Alexandria, Va., is run by volunteers and serves Shiloh Baptist Church of Alexandria, one of the country's oldest African American churches.

It provided more than $700,000 in loans, during 2012 according to the National Credit Union Administration.

The credit union's mission is to combat predatory lending and to promote wealth-building, the John DuPree, the credit union's manager, told the Post.

DuPree gathers with the credit union's president and vice president to review loan applications each Wednesday night. Most applications are to consolidate and pay off other debts, such as payday loans with prohibitively high interest rates.

The credit union also helps members meet their financial goals, such as purchasing a car or making home repairs, DuPree said.

The credit union is open on Saturday and Sunday morning. Many members do their banking when they attend church on Sunday.

CUs' true advantage--trust--will win new members--CUNA's Gentile

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WASHINGTON (1/8/13)--Credit unions should tap into their true advantage--trust--rather than their fee and rate advantages to woo new members during 2013, says the Credit Union National Association (CUNA) in an editorial in CU Insight.

"For too long the credit union system has hung its hat on its rate and fee advantage over banks," wrote Paul Gentile, CUNA's executive vice president of strategic communications and engagement. "While being competitive is always important, we need to promote our true advantage--trust," he said.

"As nonprofit financial cooperatives that exist solely to serve the lending and savings needs of consumers, credit unions' value proposition is trust. Whether we are in booming economic times or a recession, credit unions operate the same way. We learned that during the most recent recession. While banks reined in their lending, credit union lending expanded."

Many leaders say consumers "don't care about anything but the best deal they can get," he wrote. "In this low-rate environment, that has probably never been less true. Credit unions are the best deal more often than not, but in today's era of corporate mistrust we should think bigger than that. Reputation matters. Credit unions everywhere should be talking about their cooperative history and with that our value proposition of trust will shine through."

The credit union system's core mission is advancing financial literacy/education. "I have witnessed first hand how credit unions can win over people in their community, not just members, by offering financial education sessions on everything from retirement to financing college," he wrote. "We are already deep into the trust game and should be sure consumers are aware of it."

CUNA has already established a channel to get the credit union message out: aSmarterChoice.org--"a landing pad for consumers and press alike to learn about all the great things credit unions do for members, and all the reasons credit unions are 'trusted' financial providers."

Gentile encouraged credit unions to visit the site, read stories that colleagues contribute and find a story they can contribute."Together, we can build aSmarterChoice into a comprehensive repository of 'trust' stories that will help us win consumers over."

To read the full article, check out aSmarterChoice, or review News Now stories about surveys where credit unions' reputation stood out during 2012, use the links.

NCUF April Financial Education campaign in the works

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MADISON, Wis. (1/8/13)--The National Credit Union Foundation (NCUF) will roll out a new initiative this spring to help credit unions nationwide draw attention to their financial education activities and the importance of financial education.

"Supporting financial education is essential to the success of not only the credit union movement, but our country as well," Christopher Morris, NCUF director of communications, told News Now. "We hope this campaign allows even more consumers to achieve financial freedom."

Last April, NCUF and the Texas Credit Union Foundation (TCUF) piloted "Credit Unions Support Financial Education: Leading the Way to Financial Freedom" in partnership with other state credit union foundations. It aimed to raise awareness of financial education and raise funds for NCUF and state foundations.

"The results were encouraging and now this year--after some retooling--we are inviting everyone to participate," Morris explained.

The State Credit Union Foundation Network encouraged NCUF to broaden the campaign for next year. NCUF is inviting state and member credit unions to participate in the next campaign taking place in April, which is also National Financial Literacy Month.

NCUF hopes the leagues will help promote the campaign to their credit unions.

"We're hoping the credit unions can be creative," Morris said.

To join the initiative, credit unions must commit to raising funds among staff and members through one or both of these activities:

  • Conducting a "Financially Fit Day" on April 3; and
  • Raising funds throughout April.
The campaign will kick off April 3, a dedicated day for credit unions and their members to become financially fit. Credit union staff also can encourage members to support financial education with a monetary contribution. Credit unions can become financially fit by participating in several FUNdraising activities during the month.

Additional FUNdraising ideas are included in a toolkit at financialeducation.coop, the website created for the initiative. The site includes optional pledge forms and campaign resources such as sample newsletter articles, sticker and wall pin-up templates, a sample flyer and statement stuffer, Web buttons, and more to come, said NCUF.

For more information, use the link.

Kansas CUs end 3Q with higher than average growth

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WICHITA, Kan. (1/8/13)--Total outstanding loan balances at Kansas credit unions increased 6.5% in September from the same time a year earlier, according to the Kansas Credit Union Association (KCUA).

Kansas credit unions posted higher than average growth rates and exceeded national credit union rates in both loans and share draft balances in the third quarter, KCUA said.

Used auto loans, the largest component of the loan portfolio, increased 7.4% from September 2011. New auto loans increased 8.6%, compared with a 5.8% increase at credit unions nationwide. The overall auto loan portfolio in Kansas increased 7.6% over the past year to $1.9 billion.

The average member relationship rose to $12,100, a 5.5% increase. The increase is an indication that Kansas credit unions are gaining a higher share of wallet among their members, said Janeeen Smalley, KCUA vice president of member and strategic services. "I think it's clear that more consumers are seeing credit unions as their primary financial institution," Smalley added.

Other highlights cited by the KCUA:

  • Year over year, total shares deposited stood at $4.4 billion, an increase of 8.5%, compared with the national credit union average rate of 6.2%.
  • Share drafts were up $63.9 million, an annual increase of 10.2%.
  • In September 2012, roughly 35.7% of Kansas credit union members held share draft accounts with their credit unions, higher than any point in the past six years.
  • As of September 30, Kansas credit unions reported an average capital ratio of 11.5%, better than national peers, and behind only Kansas savings banks.
"In difficult financial times, it's important the financial institutions have a financial safety net," Smalley said. "That said, Kansas credit unions are poised to put their capital to use in a way that will serve the best interests of their members."

CU System briefs (01/08/2013)

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  • DEARBORN, Mich. (1/8/13)--Members of Dearborn, Mich.-based DFCU Financial received a special patronage dividend totaling $21.8 million--half the credit union's earnings for 2012. The average dividend amount per member was $220. "In a household of five, receiving he dividend is very important to us, said Marc Gayeski, who has been a DFCU Financial member for 31 years. "Last year I was able to pay half our care payment with the dividend. This year, it will help to pay for a trip to Arizona to visit my wife's 90-year-old aunt." For more of Gayeski's story, use the link.  The $3.3 billion asset credit union calculates the dividend on the member's total relationship with it--the greater the relationship, the larger the dividend. Qualifying members receive 0.5% on their average yearly loan and deposit balances. Each receives at least $50 …
  • MIDDLETOWN, Pa. (1/8/13)--Virginia Williams, CEO of Jersey Shore FCU, Northfield, N.J., resigned from Mid-Atlantic Corporate FCU's Board of Directors, effective Dec. 31. The board appointed Alison DeTuncq, president/CEO of University of Virginia Community CU, Charlottesville, Va., to fill Williams' seat, as of Jan. 1. DeTuncq's appointment means Mid-Atlantic has credit union representation from Virginia. The corporate and VACORP merged operations in February. DeTuncq has served on Mid-Atlantic's Supervisory Committee since December 2011 and will continue that service. She began her career at the credit union in 1988 and has been president/CEO since 1998 …
  • MILWAUKIE, Ore. (1/8/13)--The popularity of online banking contributed to the closure of Milwaukie, Ore.-based Oregonians FCU's Eugene branch. The branch will close at 6 p.m. March 1, the $296.8 million asset credit union told members on its website. "Transaction volume, loan demand and new business at this location have continued to decline and are the lowest among our branch network," it said. "This branch is no longer able to support the operating costs that go along with running a branch." Members can maintain their accounts through shared branching locations, surcharge-free ATMs, or free electronic services such as online banking, mobile banking apps, mobile deposit, online bill pay, telephone banking and direct deposit. An Oregonians FCU representative in Springfield will assist with loans or non-transactional business. Of the 1,400 members with that branch, 20% actually conducted transactions there, the credit union told The Register Guard (Jan. 5) …

CU System briefs (01/07/2013)

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  • PORTLAND, Maine (1/7/13)--2013 will mark a year-long 75th anniversary celebration for the Maine Credit Union League. The league unveiled a new logo and will acknowledge the milestone with articles highlighting significant achievements and occasions; special events and activities; and some surprises, the league said (Weekly Update Jan. 4). Its 75th Annual Meeting and Convention will pay special tribute to the anniversary. League President John Murphy said the league "will honor and recognize the efforts and commitment of the individuals that helped to form the league back in 1938, as well as those who have contributed to its strength and success over the years" …
  • WASHINGTON (1/7/13)--Jim Regan, president/CEO of Digital FCU (DCU), Marlborough, Mass., has been appointed as trustee for Trust for Credit Unions (TCU), a mutual fund created for and by credit unions. Regan has been active for more than 10 years in CUFSLP, a credit union service organization of 36 credit unions that acts as TCU administrator. He has been a part of the credit union community since 1992, when he joined DCU as internal auditor. He later served as chief financial officer. Regan joins seven other trustees: Jim Barr, managing member, JCB Enterprises LLC; Rudy Hanley, CEO, SchoolsFirst FCU; Stan Hollen, president/CEO, CO-OP Financial Services; Gene O'Rourke, managing director, O'Rourke & Associates; Bucky Sebastian, executive director, National Credit Union Foundation; Bob Coen, professor emeritus of economics, Northwestern University; and Gary Oakland, retired president/CEO, BECU …
  • SOUTH BURLINGTON, Vt. (1/7/13)--The Association of Vermont Credit Unions (AVCU) launched its redesigned website during the weekend. The site should better integrate with other social media sites from AVCU, the Credit Union National Association, the National Credit Union Administration (NCUA) and other industry leaders, said AVCU's Newslines Express Friday. The site has a stronger consumer focus. It also features one-click access navigation to a list of its member credit unions, Falcon and CO-OP Network ATMs, NCUA deposit insurance, AVCU's Facebook page and Management Minute blog. Each credit union name links to corresponding information on CUNA's consumer-facing ASmarterChoice.org. The revamped site also features rotating Flash images with captions that will be updated frequently, a Products and Services page and more …

Maine membership reached new high in 3Q

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PORTLAND, Maine (1/7/13)--Maine's credit unions reached a record 626,765 members during third quarter, said the Maine Credit Union League.

"For many years, we have talked about credit unions being 'the best kept secret in financial services,' " said league President John Murphy, "and it is great to see that the secret about the benefits and value of using a credit union is getting out to more consumers than ever."

From January through Sept. 30, 2012, the state's credit unions added nearly 10,000 new members, including nearly 3,000 in the third quarter alone (Weekly Update Jan. 4).

Other year-to-date third quarter results:

  • Assets increased 4.6% to $5.87 billion;
  • Loans rose 5.1%, an increase of nearly $200 million; and
  • Shares grew 5.2% to $5.03 billion.
Murphy attributed the increase to the collective efforts of the league's Statewide Awareness Campaign, strong media outreach and local credit union marketing initiatives.

NCUA asks for review of losses in ResCap bankruptcy

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NEW YORK (1/7/13)--The National Credit Union Administration (NCUA) filed a motion Friday in a New York bankruptcy court to join other creditors' motion seeking compensation for losses incurred before Residential Capital LLC filed for bankruptcy.

The New York City-based ResCap is the subprime mortgage subsidiary of Ally Financial Inc., the former mortgage unit of GMAC.  ResCap filed for Chapter 11 bankruptcy on May 14 (Dow Jones Newswires Dec. 12).

NCUA's motion and the creditors' original motion were filed in U.S. Bankruptcy Court, Southern District of New York, Manhattan.

According to the motion filed, the agency is acting as the liquidating agent for the now defunct Western Corporate FCU and U.S. Central FCU, which bought residential mortgage-backed securities (RMBS) that caused losses contributing to the two corporates' collapse.  The court document indicates that NCUA is holding about $300 million in fraud and other claims under state and federal securities laws and common law.

The original motion seeking compensation was brought by AIG Asset Management (U.S.) LLC, The Allstate Entities, Massachusetts Mutual Life Insurance Co. and the Prudential Entities. It seeks two things:

  • An order that would classify RMBS fraud claims in the same class as the securitization trust claims for purposes of any Chapter 11 plan for debtors; and
  • A direction that misrepresentation claims cannot be placed in a plan class that will be subordinated (to other creditors).
A mediator was appointed in late November to handle the reconstruction negotiations (Dow Jones Newswires Jan. 3).

Texas league working with Muslim group on new CU charter

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AUSTIN, Texas. (1/7/13)--The Texas Credit Union League (TCUL) is working closely with a Muslim group that seeks to charter a new credit union.

The group has filed a charter application with the Texas Department of Credit Unions. Jafari No-Interest CU would operate out of the Houston area, the department confirmed to News Now. The proposed new credit union will serve Muslims residing in Houston, Dallas and Austin and who follow the Jafari School, commonly known as Shia Muslims.

Linda Winkfein, vice president of the small credit union development at the Texas league, and Lorri Gaither, assistant vice president of small credit union development, have worked closely with the credit union's organizer, Imran Dhanji, according to Linda Webb-Manon, TCUL vice president of public relations and communications.

Winkfein and Gaither have put Dhanji organizers in touch with mentors who shared best practices and provided guidance on credit union operations, Webb-Manon said.

"Linda and Lorri have both commented on how impressed they have been with the credit union's organizer," Webb-Manon told News Now. "Determined to make this credit union a success, he has eagerly accepted their assistance and is open to gaining as much knowledge and information as possible."

The Texas Department of Credit Unions has 60 to days to approve the charter upon completion of the application, according to Betsy Loar, assistant commissioner and general counsel for the department.

As part of the application process, the credit union organizers must submit a business plan that outlines how the credit union will be funded, Loar told News Now.

The applicants must also receive share insurance approval from the National Credit Union Administration, Loar said. The league will assist credit union organizers with the insurance approval process, Webb-Manon said.

The proposed Jafari No-Interest CU is not the first credit union to serve the Muslim population. North Jersey FCU, with $198 million assets, Totowa, N.J., was the first credit union to offer products based on Islamic religious law, or Sharia law. It serves an unbanked population of Muslims in North Jersey (News Now Jan. 23).

It offers mortgage loans through Reston, Va.-based Guidance Residential. Mortgages are approved by an independent board of Sharia scholars. The loans also comply with the federal truth-in-lending law, but are different from conventional mortgage loans. Although sharia-compliant mortgages can be structured in several ways, Guidance Residential uses a method in which the buyer and the lender create a partnership to purchase a house.

North Jersey FCU's deposit accounts are structured to pay dividends rather than interest to its Muslim members.

New indictments in St Paul Croatian FCU failure

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CLEVELAND (1/7/13)--Three men were indicted Thursday for loan fraud related to the collapse of  East Lake, Ohio-based St. Paul Croatian FCU. The new indictments bring the total number of indictments from the failure to 24.

Indicted were:

  • Gezim Selgjekaj, 41,of Avon Lake, who allegedly received more than $11 million in loans. He was charged with one count of conspiracy, six counts of bribery, six counts of money laundering and 15 counts of financial institution fraud. He allegedly received $3.6 million of fraudulent loans between 2004 and 2008 while serving a federal prison term in an unrelated case. Selgjekaj owned several business entities that allegedly were safe havens for credit union proceeds, said a press release from the Federal Bureau of Investigation's Cleveland District.
  • Arthur Hoxha, 40, Rocky River, who is charged with one count of financial institution fraud (Plain Dealer Jan. 4).
  • Judmir Capoj,36, of North Olmstead, charged with two counts of submitting false statements to a financial institutions (Crain'sCleveland.com Jan. 3).
They join 21 other defendants who have been indicted the past two years for the loan fraud scheme that involved $1 million in kickbacks, bribes and gifts paid to the credit union's CEO, Anthony Raguz, in return for issuing more than 1,000 fraudulent loans.  About 300 accountholders were involved (News Now Dec. 27).  Several key figures in the fraud ring, including Raguz, are serving prison sentences.

The credit union collapsed in 2010, costing the National Credit Union Share Insurance Fund more than $170 million. It is considered the largest failure in credit unions' history.

Javelin: CUs' 2013 challenges include securing 'trust' position

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SAN FRANCISCO (1/7/12)--Trust, omnichannels, distributed denial of service attacks and challenges to payment networks' pricing practices are among the major trends forging ahead for financial services in 2013, says a new report. All of these can affect credit unions' strategies.

San Francisco-based Javelin Strategy & Research said these trends highlight steps that financial institutions (FIs) must take to bring order to the rapidly changing arena for banking, payments, mobile and security.

Many financial institutions will lose their positions of trust.News Now's review of articles last year noted that credit unions consistently beat their competitors on the issue of financial trust and member/customer satisfaction, but don't get cocky.  Trust in FIs is "under assault by a seemingly endless list of players, including Apple, Google, mobile carriers and scores of innovative personal financial management players," said Javelin.

The winners "will be defined by who does the best job of developing an intimate financial snapshot of the customers, without crossing the line of being too 'creepy,'" said Javelin. Existing and new players are fighting for market share by offering competitive consumer-friendly services, like personal financial management  (PFM) and alerts.

"It is difficult to rebuild trust once it erodes," said Mark Schwanhausser, Javenlin's director of multichannel financial services. "FIs that put themselves in position as proactive, straight-shooting advisers will reap trust and loyalty."

Omnichannel is the next evolution in banking trends. Members, like other consumers,already trust their financial information to multiple channels, but their data often aren't interconnected and unified into a single integrated, brand experience.  Omnichannels will allow consumers to select any device or channel and have a secure, convenient and familiar way to transact financially.  "This does not mean solutions will be identical across all channels, but that banking consumers' experiences will be harmonious, connected and consistent," said Javelin.

FIs must change their perception of omnichannel banking "as necessary rather than novel," said Mary Monahan, executive vice president and research director, mobile at Javelin.  She suggested investing "in developing an integrated architecture wherein data and platforms can seamlessly converge while enhancing the quality of the brand experience."

Distributed denial of service attacks will go mobile. Two out of three mobile devices aren't protected from malware, Javelin said. These will be an attractive new attack vector for hackers to cripple information technology infrastructure. Al Pascual, Javelin industry analyst of security, risk and fraud, advised forming a partnership with security vendors to increase adoption of mobile security software. "Deputizing consumers through education on mobile security threats and encouraging use of anti-malware, firewall protection and other security solutions will have far-reaching benefits," Pascual said.

Retailers will increasingly challenge payment networks' pricing practices and take greater control of the payments business. While traditional card networks will still control transaction volume, the Dodd-Frank Act's interchange provision "has been a game changer," said Javelin. It suggested forming partnerships and leveraging merchant developments in pioneering ways.

CUNA's Googolplex for kids spotlighted in Pensacola paper

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MADISON, Wis. (1/7/13)--"Googolplex," an online program from the Credit Union National Association that teaches money skills to children, was highlighted in a Jan. 3 Pensacola News Journal article about saving.

As part of its efforts to teach kids about money, Harvesters FCU said it steers young members to Googolplex.

Googolplex includes three customizable Web sites that feature interactive games, videos and colorful stories dealing with money matters and life issues. Each Googolplex site appeals to a specific age group--5-Spot for elementary schoolers, A-J's for middle schoolers, and C-Note for high schoolers.

Because Googolplex teaches different denominations of money and explains how to count it, kids become more financially independent at an earlier age, Melanie Velaski of Harvesters FCU, told the Journal.

Lane, NCUA reach settlement in WesCorp lawsuit

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LOS ANGELES (1/7/13)--The last Western Corporate FCU official sued by the National Credit Union Administration (NCUA) has reached a settlement with the agency, according to court documents from the federal court in Los Angeles.

The confidential settlement is with Todd Lane, former chief financial officer of WesCorp.

It  is subject to approval by NCUA's  general counsel and board, said the U.S. District Court, Central District, California. Counsel has until Jan. 17 to lodge a stipulation of dismissal. U.S. Magistrate Judge Margaret A. Nagle ordered the record of the proceedings sealed.

Other former WesCorp employees had settled their cases earlier. NCUA has since issued cease and desist orders against four officials, prohibiting them from participating in the affairs of any federally insured credit union. They are: Robert Siravo, former CEO; Thomas Swedberg, former human resources director; Bob Burrell, chief investment officer; and Timothy Sidley, former chief risk officer.

The lawsuit stemmed from losses that WesCorp experienced when it purchased residential mortgage backed securities that contributed to its conservatorship.

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 …

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.

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.

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.

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.

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.

CU System briefs (01/03/2013)

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  • LONGVIEW, Wash. (1/3/13)--Police arrested Ryan C. Fancher, 31, of Longview, Wash., on a warrant violation Friday and now say he is suspect in a Dec.27 robbery of Red Canoe CU, a $588 asset credit union based in Longview. The credit union was robbed at about 5:30 p.m. The robber fled the scene and could not be located. Police say tellers have identified Fancher as the alleged bank robber (koinlocal6.com Jan. 1) …
  • ST. LOUIS (1/3/13)--After a brief car chase, a man was charged Monday with robbing the First Community CU, Chesterfield, Mo., earlier that day. The robbery occurred at 12:30 p.m., and the robber fled in a silver Dodge Magnum. Cameron Harral, 31, of St. Louis was arrested after police cornered his car at a dead end (St. Louis Post Dispatch and stltoday.com Jan. 1) …
  • ATLANTA (1/3/13)--Hank Halter, a board member of Atlanta-based Delta Community CU, has been named interim president/CEO of the credit union. He will fill the position while Delta Community's board continues to search for a permanent successor to Rick Foley, who retired Dec. 31, as previously announced. Halter has been on the board for the past seven years and is a former chief financial officer of Delta Air Lines. His appointment was effective Jan. 1. Foley worked at Delta Community, Georgia's largest credit union, for 26 years. He has been president/CEO since 2004 …
  • LAUREL, Md. (1/3/13)--Laurel, Md.-based Tower FCU is helping members recover from Hurricane Sandy's impact with a special low-rate personal loan, dubbed an Emergency Assistance Loan. The hurricane devastated parts of the East Coast in late October and left many without power for weeks. Tower's loan offers a 7% fixed-rate annual percentage rate with terms up to 60 months. Members can borrow up to $10,000 for a single applicant or $20,000 for joint applicants. Since posting loan information on its website Nov. 2, Tower FCU has provided more than $145,000 in loans that average $6,324. Martin Breland, Tower's president/CEO, said Tower mobilized to help members with loss of income, property damage and other storm expenses immediately. "Thanks to the hard work and joint effort of Tower's real estate lending, marketing and information technology departments, we were able to make the Emergency Assistance Loan operational and available to members within a week of the hurricane," Breland said …
  • BOULDER, Colo. (1/3/13)--Elevations Foundation, the charitable giving arm of Boulder-based Elevations CU, finished 2012 delivering more than $240,000 in financial aid to local communities in less than three years. Grants totaling $69,000 were presented at this year's 2012 Community Grants reception on Nov. 28 to 16 local organizations. The foundation also presented more than $135,000 in needs-based scholarships for higher education. The foundation focuses on three giving areas each year. Current areas of focus include mental health, environmental education and early childhood development …

Top 10 News Now stories for December

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MADISON, Wis. (1/3/13)--An article advising users that no sensitive personal information from cuna.org was accessed or compromised in a hacking attack was the most read News Now story in December.

The top 10 articles in December included:

10. Passage of CUNA-backed ATM bill means relief for CUs

WASHINGTON (12/12/12)--Tuesday's unanimous consent passage of a bill removing duplicative ATM disclosure requirements "represents a substantial realization of regulatory relief that will have an impact on every credit union that owns an ATM--while having no adverse effect on consumers," Credit Union National Association (CUNA) President/CEO Bill Cheney said. CUNA strongly backed the bill.

9. CUNA action call urges CUs to oppose TAG bill

WASHINGTON (12/6/12)--In a new call to action, CUNA is encouraging its member credit unions and leagues across the country to contact and urge their senators to oppose legislation that would extend for banks the Transaction Account Guarantee program.

8. Appeals court issues ruling in Wells Fargo overdraft case

SAN FRANCISCO (12/28/12)--The U.S. Court of Appeals for the Ninth Circuit has reversed in part a lower court's order requiring Wells Fargo Bank to cease charging overdraft fees based on its posting debit-card transactions in high-to-low order.

7. Beware of hotel room security threat

NEW YORK (12/18/12)--Thieves have developed a simple device that can unlock room doors at some of the most popular hotel chains, potentially putting you and your belongings at risk (NBC Today: Rossen Report Dec. 6).

6. Arkansas, Oklahoma, Texas leagues intend to consolidate

FARMERS BRANCH, Texas (12/17/12)--The boards of the Arkansas Credit Union League, the Credit Union Association of Oklahoma and the Texas Credit Union League announced today they intend to pursue consolidation into a single regional league operating as Cornerstone Credit Union League.

5. CFPB proposes remittance changes, delayed effective date

WASHINGTON (12/21/12)--The Consumer Financial Protection Bureau on Friday released proposed revisions to its pending international remittance regulations that agency director Richard Cordray said "will ensure consumers have continued access to remittance transfer services while making compliance easier for remittance transfer providers."

4. CUs do it right (again) in satisfaction survey

BOSTON (12/19/12)--U.S. credit unions continue to achieve much higher satisfaction and advocacy rates compared to large regional and national banks, according to results announced Tuesday of the 2012 ath Power Ideal Banking Study, which assesses the retail member/customer experience at credit unions and banks nationwide.

3. TAG bill defeated in Senate

WASHINGTON (12/13/12)--Today's defeat of a Transaction Account Guarantee (TAG) extension on a budget point of order is a "death blow" to the legislation and a significant victory for the Credit Union National Association (CUNA), credit unions and state leagues across the country that aggressively opposed this bank bailout program, CUNA President/CEO Bill Cheney said.

2. President signs ATM signage bill, CFPB privacy

WASHINGTON (12/20/12)--President Barack Obama Thursday afternoon signed a bill (H.R. 4367) into law that revises Regulation E to require ATM fee disclosures only need to be presented on an ATM's screen. The new law eliminates a duplicative provision that required a physical notice also be posted on the ATM, a requirement that has created legal and financial issues for some credit unions and other financial institutions.

1. CUNA notifies website users of broad hacking attack

WASHINGTON and MADISON, Wis. (12/11/12)--CUNA is advising thousands of users of its website that no sensitive personal information from cuna.org was accessed or otherwise compromised in a hacking attack that--in addition to CUNA--also affected 30 or more additional organizations, U.S. government agencies, industry and other trade associations.

CUs' rates get nod from CBS News, other media

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MADISON, Wis. (1/3/13)--Credit unions' rates on saving, checking and auto financing got nods from several media reports, including CBS News'  MoneyWatch,an article on checking accounts in The Gainesville Sun that featured Credit Union National Association (CUNA) President/CEO Bill Cheney, and The Cincinnati Enquirer.

CBS News' article, "13 money tips for 2013," featured credit unions in Tip No. 3. "Earn more on your safe money" (Dec. 31).

"Sure, interest rates are low, but with a little work you can squeeze out some extra money," the article said. It advised, among other things, to "shop around at credit unions that offer better interest rates than most banks."

The Gainesville Sun article, "Need a new checking account?" (Jan. 2) noted statistics from financial data publisher Bankrate, stating the average monthly service fee on checking accounts that don't pay interest is a record $5.48--a 25% increase over last year's average fee.

Among the tips: "Consider credit unions."  CUNA's Cheney explained in the article that "Most people qualify to join a credit union; you just have to find one you qualify for." The article pointed readers to ASmarterChoice.org to locate a credit union, and cited a report from CUNA in March than showed credit unions "also have more favorable interest rates on their savings accounts and loans. Interest on a savings account at a credit union averages 0.20% and 0.15% at regular banks." It also noted credit unions' large ATM networks are comparable to big banks' networks.

In addition, the Gainesville article quoted financial planner Kevin Kautzmann of EBNY Financial in New York, who said that all his clients who switched to credit unions had nothing but good things to say about them. 

Most credit unions offer truly free checking accounts, meaning you won't have to maintain a balance or sign up for direct deposits to avoid a monthly fee, the article said.

The third article, "Be careful when looking into auto financing," was published Wednesday in The Cincinnati Enquirer and written by Howard Ain, a consumer complaints ombudsman on WKRC-TV. Ain told of  a woman who received a letter from a company claiming it could refinance her vehicle with a rate as low as 3.99%. However, the interest rate quoted her after she applied was higher.

"While the deal would still save her money, I suggested she first check with her local credit union. She found a nearby credit union and was told if she joins, for just a few dollars, she could get a loan with an even lower interest rate."

"Bottom line, if you've got an auto loan with a high interest rate, it could pay you to contact a credit union and see if you qualify for a lower rate. These are very unusual times with record low interest rates and, if you qualify, you could save yourself a lot of money," Ain advised.

To read the full articles, use the link.

Maryland CU focuses on credit card growth

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GERMANTOWN, Md. (1/3/12)--When it expanded its membership in 2011 to include more local employee groups, Montgomery County Employees FCU identified credit cards as the best opportunity for membership growth, according to James Norris, the credit union's CEO.

In a survey of its membership, the $90 million-asset credit union, of Germantown, Md., found that many members held cards with larger issuers.

"Credit cards are closely tied to member relationships," Norris said. "If you get the credit card relationship, you are more likely garner more accounts."

To spur growth, Montgomery County Employees FCU ran a 0%, 12-month introductory rate on balance transfers. The credit union used Georgetown Cupcakes, a popular in the Washington D.C-area sweets shop with its own TV show, to promote the initiative.

The credit union handed out cupcakes at the Montgomery County government cafeteria, and the county sent out e-mails to its 9,000 employees promoting the event. A promotional flyer included a cupcake with a "0" candle.

"Around here if you say Georgetown Cupcakes, you are going to get a lot of attention," Norris said.

The attention helped the credit union increase its credit card portfolio 53% from June 2011 to June 2012 and 19% from June 2010 to June 2011. That ranked it seventh nationally in percentage of growth according to Callahan's Research.

The credit card growth also helped the credit union grow in other areas, said Norris. The credit unions increased its mortgage portfolio 119% from 2011 to 2012, ranking 20th nationally in percentage of growth, the research found.

The credit union also increased its overall membership roughly 3% from 2011 to 2012, which was more than it had projected.

The credit union has plans to add a rewards component to its credit cards program.

"Looking at the survey, our members have rewards with other institutions, so it's very important for us to get a rewards program out there," Norris said.

The program will include travel, cash back and merchandise," Norris said

"We want to make it valuable for our members and allow us to compete with the larger issuers," he added.

What's in store for CUs in 2013

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MADISON, Wis. (1/3/13)--Credit unions enjoyed a wave of positive publicity, popularity with consumers, record growth and a strengthening of political clout during 2012. That doesn't mean they can sit back in 2013 and ride on the coattails of last year's successes.

News Now checked a variety of resources to find out what they are predicting for this year and picked the predictions that seemed to have the most consensus.

This year likely will bring renewed challenges to credit unions' tax status, more credit unions edging closer to their member business lending caps, and the challenges of complying with more extensive regulations. But they also face operational challenges--and opportunities--regarding operating in a near-zero interest-rate environment during a make-or-break year for the economy; technological issues related to mobile banking and the threats to the security of members' data; and marketing challenges in a diverse world.

Here's what to watch for in 2013:

  • Operations adapt to today's economic environment. Credit unions will be challenged to maintain narrow net margins while providing expanding services to members who are demanding game-changing innovations, such as mobile banking, all in a slowly improving but still-volatile economy. Financial institutions will pay more attention to operational risks, adjusting strategic plans as needed, and, and will introduce or modify products to reflect the interest-rate realities, especially in mortgages. Some credit unions are already looking for collaboration opportunities and partnerships to provide economies of scale for service.
  • Technological and security issues continue. While natural disasters the past few years have prompted credit unions to pay attention to disaster recovery and business continuity measures so members' money is more secure during an event, they also need to protect members' information and accounts from unauthorized transactions. Cyberthieves are beefing up their efforts to illegally gain consumers' information and steal funds from accounts. In fact, some are calling 2013 "the year of the cyberthreat." While criminals have announced they have targeted big banks, they also look for the weakest link in any authentication process. In the past, they targeted credit unions and smaller financial institutions. Credit unions can expect more sophisticated  scams to come out of the woodworks, and they will need to beef up their verification/authentication measures on members' accounts.
  • Mobile banking isn't going away. In the next two years, mobile banking use will nearly double to about 64 million, according to research by the Aite Group (American Banker Dec. 19). The number of smartphone users in the U.S. is estimated to increase from 105 million last year to 174 million in 2016. Tablet users are expected to increase to 100 million by next year and 112 million by 2016, up from today's 65 million. Credit unions that didn't get on the mobile banking bandwagon when it soared last year,will have no choice this year as mobile devices proliferate. Financial institutions already are scrambling to accommodate banking on iPads and other tablets, and they will get increased pressure from consumers who want their transactions made easy, no matter which device they use. Credit unions will see more people depositing checks remotely and fewer consumers will carry cash. One trend to watch for: security developments to make these new mobile transactions are more secure. Security is still the No. 1 reason why people hesitate to use their tablets and smartphones during transactions.
  • Marketing will continue to morph toward social media.  While credit unions will continue using traditional marketing channels to deliver the credit union differentiation message, more credit unions will encounter potential members who don't use traditional sources to get their information. Expect to earmark more marketing dollars to fine-tuning use of social media channels  and exploring nontraditional ways to market. Marketers will also see a push to get a broader membership that may include nontraditional members. For example, Central Wisconsin FCU, Plover, Wis., is using untraditional data to widen its membership base. When approving a loan, it looks at the traditional bill payments history, but it is also examining data with payday lending history (American Banker Dec. 28).
  • Credit unions may offer deeper services for members who own small businesses. A member business loan may not be enough today to keep the member's business at the credit union. Small businesses want more help with analyzing their financial performance data. For example, Sun Trust Banks, has begun offering businesses services that a business's chief financial officer would typically perform (American Banker Dec. 28).  Credit unions serving member businesses may want to ante up more services to this segment.

Pa foundation: A record year in grants, fundraising

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HARRISBURG, Pa. (12/3/13)--The Pennsylvania Credit Union Foundation enjoyed a record year of unrestricted fundraising and providing grants awards during 2012.

Foundation Chairman Ray Brunner and Vice Chairman Dave Ackerman reported that grant awards in 2012 totaled $151,620, a 20% hike over the $126,358 in awards granted in 2011. Unrestricted funds, or funds that are not earmarked for a specific project, raised totaled $266,062, or 23% more than 2011's $216,404 raised, reported the Pennsylvania Credit Union Association newsletter, Life is a Highway (Jan. 2).

In addition, a restricted Project Haiti program, which will be implemented this year, attracted $23,575 in pledges from 25 credit unions in the state.

"Favorable publicity generated from a joint association/foundation flood relief program in 2011 attracted large support from credit unions in affected areas of eastern Pennsylvania," said Brunner.

Ackerman credited "successful reality fairs in Philadelphia and western Pennsylvania as factors behind the impressive fundraising totals from credit unions and vendors, who not only contributed financial support but also shared in the implementation of these types of projects in schools."

The foundation said that during 2013, it would continue to implement projects that benefit small credit unions and provide financial literacy to schools throughout Pennsylvania.

2012: CUs' year in review

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MADISON, Wis. (1/2/13)--History will note 2012 as the International Year of the Cooperatives. Credit unions took advantage of that by reminding anyone they could about their cooperative structure, collaborative nature, member orientation and people-helping-people philosophy.

As a result, 2012 was a milestone year in terms of new members, assets, and more.  As 2013 opens, more people than ever know what a credit union is and have chosen credit unions as their financial service provider.

Credit unions benefited from a range of efforts that shone spotlights on the good work they do. Their continued growth, their low or no fees and better rates, their assistance to people struggling to get businesses started in a tough economy, their push to get Congress to raise member business lending rates, and advocacy on behalf of the consumer on the interchange fees all led to a year of positive press that re-emphasized the credit union difference.

Here are a few milestones and other highlights of the year.

  • Record membership joined credit unions. The phenomenal growth in membership credit unions experienced in 2011 did not end with Bank Transfer Day that year. It continued through 2012. In November, the Credit Union National Association (CUNA) counted a nearly 2.1 million growth in membership from June 2011 to June 2012--double the average growth for similar periods in the past decade.  Members opened nearly 2.9 million new checking accounts (News Now Nov. 2).
  • Credit union assets surpassed the $1 trillion mark.  Credit unions in the U.S. reached the $1.02 trillion assets milestone in March--one of the most significant developments CUNA's surveys have reported. Assets grew 4.1% during the past year, CUNA reported in May (News Now May 4).  CUNA economists reported the asset growth was a direct reflection of the fact that consumers increasing recognize and embrace the credit union difference.
  • Mortgage business took off at credit unions.  For the first time in history, credit unions were on track to surpass $100 billion in mortgage loan originations, said the American Credit Union Mortgage Association (News Now Dec. 17). As housing construction began to slowly improve, and mortgage rates remained low, more members originated or refinanced their mortgages at a credit union.
  • Credit unions continued to top big banks on consumer satisfaction. As consumers became discontented with bank fees and lousy service, credit unions stood out in survey after survey. They were found to have the most loyal members and most satisfied member/customers, were noted as providing the most trustworthy services and the most safe and sound financial services and more. They topped big banks in surveys that received wide national press and were conducted by these independent research organizations: 2012 ath Power Ideal Banking Study, American Customer Satisfaction Index, Chicago Booth/Kellogg School Financial Trust Index, Prime Performance survey, a second Prime Performance survey on call center representatives, Tempkin Customer Service Ratings, and National Cooperative Business Association/Consumer Federation of America. CUNA surveys also noted that credit unions outshone banks in consumers' perceptions of safety and soundness, and that credit unions were perceived by consumers as the best place to keep their savings and checking accounts.
  • Credit unions worked together to provide aid in disaster recovery efforts.  In true collaborative efforts, credit unions helped each other out whenever nature had the upper hand, be it wildfires in Colorado, floods in Vermont, tornados, hurricanes or superstorms. In October credit unions along the eastern U.S. seacoast were hit with a once-in-a-century superstorm. Hurricane Sandy--responsible for 125 deaths in the U.S. and 70 in the Caribbean--affected hundreds of credit unions with closures due to power outages, wind and water damage and more. Its high winds, high waters and storm surges created havoc in an 800-mile swath along the eastern U.S. seacoast, hitting credit unions in New York and New Jersey hard. Shared branches--something that banks don't have--kept credit unions working for their members. The superstorm became the second costliest storm in U.S. history, after Hurricane Katrina in 2005. The movement collected more than $140,000 to assist credit unions, their employees, volunteer directors and members.
  • Credit unions and credit union organizations consolidated more. While new corporate credit unions were getting their footing after restructuring and combining services across states or regions, credit union leagues and foundations found new ways to collaborate.  They, like many credit unions who merged in 2012, had learned they can offer better services by collaborating and working together, than each might offer individually.  The latest announcements came from several leagues last month.  The Arkansas Credit Union League, Credit Union Association of Oklahoma and the Texas Credit Union League announced they would pursue consolidation into a single regional league, the Cornerstone Credit Union League. The North Carolina Credit Union League and South Carolina League boards announced they would move to a formal process to consider consolidating.  Some collaborations were unusual, with credit unions moving to acquire banks, or credit unions deciding to share back office operations to take advantage of economies of scales.
  • Mobile banking took hold in credit unions. Nothing has changed credit union's interactions with members more than online banking, and just when credit unions were getting used to that, along came the smartphone.  During 2012, many credit unions introduced mobile banking channels to help attract new, younger members. Those who did so are ahead of the pack. Aite research group projects that the number of U.S. consumers who will use a mobile device to access their bank account will increase to 96 million by 2016 from today's 33 million (American Banker Dec. 20). That's a compound annual growth rate of 30%.
Later this week, watch for other News Now stories marking the year's change, including News Now's Top 20 stories of 2012, a review of banking technological trends,  the top legislative and regulatory issues and what credit unions can expect for 2013.

Michigan CU Foundation made a difference in 2012

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LANSING, Mich. (1/2/13)--The Michigan Credit Union Foundation (MCUF) last year provided $90,000 in support to Michigan credit unions through scholarships for employee educational development and grants for community outreach projects.

Donors to the foundation in 2012 included 73 credit unions, 10 chapters, 10 credit union business partners and the Michigan Credit Union League (MCUL) (Michigan Monitor Dec. 17).

MCUF assisted 100 credit unions and 249 credit union employees with grants and scholarships in 2012.

A new option will allow 2013 donations to be made along with payment of MCUL membership dues, the league said.

The new year starts with 101 insights from Filene

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MADISON, Wis. (1/2/13)--A new report, "101 Things: Credit Union Insights from the Filene Research Institute," offers "easy-to-digest" highlights from 12 months of Filene reports--an easy way for credit unions to begin the new year armed with strategic insight.

Among the highlights from each of the nine areas covered in the report:

  • Strategy and policy: Credit unions could improve organizational performance by diversifying their noninterest revenue streams, decreasing the variety of deposit products offered, and questioning the effectiveness of a diversified loan product strategy.
  • Credit unions as cooperatives: Patronage refunds are the necessary tool that demonstrates to members that the cooperative is socially and fiscally responsible with the member's money.
  • Lending: The average American household lives in the same home for only seven years. That implies that most Americans, or a very large swath of Americans, could do better with a shorter-term fixed interest rate, which would result in lower monthly interest payments
  • People: High-performing middle managers want to be given the vision and the mission, participate in goal development, and then be allowed to do their thing.
  • Consumer behavior: Consumers, especially low-income consumers, are much more likely to cycle in and out of debit and credit cards and the institutions that issue them than to give up on cash.
  • Marketing: Credit unions that dedicate eight or more hours per week to social media report the highest success rates.
  • Credit union profitability: Research shows that the top 30% of members contribute 110% to the bottom line, while the bottom 10% don't merely fail to contribute, they actually destroy profits. On average, members who connect with the credit union through online channels are 35% more profitable than those who have only an offline relationship.
  • Innovation: Only 27% of executives responding to a McKinsey Global Survey said that their companies are effective at holding leaders accountable for executing tactics that support innovation.
  • Governance:  Good governance in both corporations and credit unions is, in essence, the leadership structure and the complex system of incentives, checks and balances that makes sure that the organization creates long-term, sustainable value.
To download the report, use the link.

Strategic plans: Focus on your goals for 2013

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MADISON, Wis. (1/2/13)--The calendar has flipped to a new year. Credit unions have spent hours and dollars preparing their strategic plans, but daily tasks and to-do lists are likely distracting credit unions from their plan. In 2013, credit unions will need to stay focused on those plans to make sure their plan works.

Mark Arnold of the Louisiana-based On the Mark Strategies offered four tips to assist credit unions in meeting their strategic planning goals for the new year. At least two leagues--Texas and Delaware--have noted his tips in their newsletters (Lone Star Leaguer Dec. 21 and Together Dec. 31).

His advice:

  • Stay focused. "Don't start the new year chasing wild geese," Arnold said.  Although strategic plans have flexibility built into them so the credit union can pursue worthy projects, credit unions must stay true to their plan. "The question shouldn't be 'Can you do this project?' but 'Should you do this project?'" Does the new project fit into your plans and goals?  Arnold also cautioned against managing by crisis; putting out little fires diminishes accomplishing the goals.
  • Commit budget dollars. Allocate sufficient resources--both dollars and manpower--to the goals. Don't expect great results without realistic funding.
  • Follow up and measure.  Review the strategic plan and goals at least monthly, if not more often. Review important data like timetables and who is responsible for what action items. Update the status of each goal to determine overall progress. "One cardinal rule of strategic planning is 'What is not measured is not accomplished,'" said Arnold. "Follow up on your strategic plan, or it will die," much like a neglected houseplant in the office.
  • Motivate staff. Strategic plans are not just for the executive management or board level. They will be driven by the credit union's staff, especially the front-line staff.  Staff not only have to buy into the plan; they have to live it. Some credit unions provide all staff with a laminated index card "cheat sheet" with the top three to five strategic goals so staff can refer back to it often. Use staff meetings to remind employees of the importance of the strategic plan, and provide updates on the goals' progress. "Your front-line staff will help make or break the strategic plan, so keep them accountable by keeping them updated and involved," said Arnold.

CU System briefs (01/02/2013)

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  • WACO, Texas (1/2/13)--A Texas man has pleaded guilty to the Aug. 8 robbery of the Lacy Lakeview branch of Waco, Texas-based Genco FCU (kwtx.com Dec. 20). Bradley Kilmer, 33, of Fort Worth is scheduled for sentencing in the U.S. District Court in Waco in February.  In addition to the Genco FCU case, Kilmer is also a suspect in the Aug. 30 robbery of Fort Worth Community CU in Weatherford, Texas, and a bank robbery in Alvarado.  In the Genco robbery, a man entered the credit union and handed a note to a teller that said he would shoot her if she didn't give him money. The robber fled with an undisclosed amount of cash.  In the other credit union robbery, the robber also handed a note threatening harm to a teller if she did not give him money …

New era in expense management: CFO Council paper

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MADISON, Wis. (1/2/13)--The role of the chief financial officer (CFO) has evolved from bean counter to communicator and collaborator, according to a new CUNA CFO Council white paper.

"A New Era in Expense Management" is based on information gathered from credit union CFOs, other financial executives and consultants. The white paper delves into expense management practices, which go beyond budgeting to encompass strategic planning, process improvement and revenue generation. In the paper, credit union leaders stress that expense management should focus on adding value to operations.

While traditional accounting is still essential, the CFO's greatest contributions typically result from monitoring and measuring financial performance, the paper said. Rather than focusing solely on cost, the CFO and other senior members of the finance team examine whether the credit union is using effective, efficient operations to serve members and generate revenue. This effort requires the CFO to become a strong communicator who collaborates with all departments to share ideas and streamline operations.

CFOs rely on data and analysis to monitor expenses, identify trends and compare their credit unions' spending to peers' spending. Expense ratios, efficiency ratios and benchmarking can provide perspective and give the CFO an objective measurement of appropriate expense levels, said the council paper. CFOs are also an integral part of credit unions' ongoing efforts to manage risk and improve operations.

Throughout the white paper, CFOs and consultants share their strategies for managing expenses, creating a culture of continuous improvement and pursuing new opportunities to attract members and enhance revenue. As economic conditions improve, these experts say credit unions will be tempted to relax their focus on expense management. Instead, they recommend that credit unions create a "new normal" marked by the use of analysis to determine whether expenses are justified based on their ability to generate revenue or enhance operations.