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Turn to CU media blitz continues

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MADISON, Wis. (10/19/11)--Momentum is still building as the "turn to a credit union" media blitz continues to spotlight credit unions as alternatives for consumers fed up with big banks' debit card fees. Credit unions found their way into USA Today, U.S. News and World Report and regional media outlets throughout the country on Tuesday. Many of Tuesday's stories discuss the perceived difficulty in switching financial institutions, the debit fee interchange rule that prompted the banks to raise their debit card fees to recoup lost interchange fee income, a Florida lawmaker's proposal to ban debit fees, and the upcoming Bank Transfer Day on Nov. 5, which continues to build thousands of supporters, including many who say they will switch to credit unions. Overall, credit unions continue to be highlighted by media as a low-cost or no-fee, service-oriented alternative to the bank fees. The Credit Union National Association (CUNA) was cited as a source on fees by USA Today (Oct. 18). The article, "Some things to consider before switching your bank," said that "credit unions view raising fees as a last resort." In light of the public outrage against Bank of America's and other banks' move to raise debit card fees, "Credit unions are doing all they can to hold the line on fees," Mark Wolff, CUNA's senior vice president of communications and media relations, told the nationwide newspaper. The article also noted that "you won't necessarily pay higher ATM fees if you join a small bank or credit union" and that credit unions "belong to networks that offer thousands of surcharge-free ATMs. Some small banks and credit unions waive fees for using an out-of-network ATM." In U.S. News & World Report's "My Money" column (Oct. 18), credit unions are viewed as "another good option" for consumers looking to make a change. "Credit unions have become more popular as people look to move away from the 'too big to fail' banks," wrote personal finance columnist Jim Wang. "Credit unions offer better rates because they aren't always looking at the bottom line," he wrote. At a credit union, the owners are the depositors and so profits are returned to customers in the form of better rates and, sometimes, a special dividend." He added that membership requirements are "easy to overcome" and that credit unions mitigate the geographic footprint issue by joining ATM networks. "Take a look at a local credit union," he urged. The Bay Citizen (Oct. 18) in San Francisco reported that "Bay Area credit unions report hundreds of consumers have begun to move their money." It noted that Alli Panelas, who is part of the Occupy Wall Street movement, spent Monday at Patelco CU, opening a checking account, a savings account, and a certificate of deposit. She plans to close her account at Chase. She told the newspaper she would rather invest her time, energy and money in a community institutions rather than a large bank. Patelco has seen the number of new accounts increase from 78 a day in September to 118 a day in October. It's not just a matter of fees. Credit unions and banks just have two different models, Brett Martinez, president/CEO of Redwood CU, told the publication. He noted that 160 depositors had switched from Bank of America to Redwood CU since Oct. 5 due to the bank's new monthly debit card fee. San Francisco FCU reported a more modest increase in new accounts. However, the California Credit Union League expects more. "This is the tip of the iceberg," said Henry Kertman, spokesman for the league. Evergreen CU, Portland, Maine, has opened 15 to 20 new accounts since the debit fees were announced by banks. Tucker Cole, president, told Mainebiz (Oct. 18) that the credit union has a message on its electronic board outside its main office with the message, "Are you paying bank fees? Try a credit union." The Maine Credit Union League reported traffic on its site surged 21% in 10 days after Bank of America's Sept. 28 disclosure of the fees. It surveyed 64 credit unions and found none plan to institute a debit card fee, league President John Murphy told the publication. Use the resource links below to access the articles.

CU System briefs (10/18/2011)

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* WORCESTER, Mass. (10/19/11)--Police have arrested a suspect in the robbery of two credit unions in Auburn and Worcester, Mass., last weekend after the suspect left behind a big clue: a deposit slip with his name, Social Security number and signature. Scott C. Sampson, 37, of Dudley, Mass., was arrested for armed robbery related to the Friday night holdup of a Digital FCU branch in Worcester and the Saturday morning robbery of Webster First FCU, Auburn. Police said Sampson allegedly entered Digital FCU after 6 p.m. Friday and handed the teller two bank slips, one with a note indicating he had a gun and the other with the identity information. He demanded money and fled with about $1,000. The second holdup occurred at about 10 a.m. Saturday. Police located a 2007 Jeep Grand Cherokee with Connecticut license plates allegedly connected to the robberies and found it was registered to Sampson's girlfriend (Worcester Telegram Oct. 17) … * MASSILLON, Ohio (10/19/11)--Massillon (Ohio) Area CU has changed its name to Friends and Family CU, announced the $52 million asset credit union (The Repository Oct. 18). The name change is not the result of a merger. Instead, the credit union has widened its field of membership from serving Massillon school employees to serving anyone who lives, works, worships or goes to school in Stark County, CEO Nicholas Langenfeld told the newspaper. The credit union plans to break ground on a new branch before the end of 2011 … * FARMERS BRANCH, Texas (10/19/11)--Funeral services for Roland E. Klar Jr., were held Monday, according to the Texas Credit Union League (LoneStar Leaguer Oct. 18). Klar served on the Texas Transportation FCU board and as its former chairman and treasurer. He was a volunteer for more than 50 years. He also served on the board of directors of the Texas league from 1978 to 1980, representing San Antonio credit unions. He was president of the Alamo Chapter of Credit Unions from 1975 to 1977, was as a volunteer leader of the State Employees CU Association from 1970 to 2008, and was employed by the Texas Department of Transportation for 40 years before he retired … * FARMERS BRANCH, Texas (10/19/11)--Sylvia Vaught, former president/CEO of Enron FCU (now Star Trust FCU), has died, the Texas Credit Union League reported. Vaught served on the league's board from 1993 to 1997 and was a TCUL advisory director from 1990 to 1993, representing Houston area credit unions. She began her career at the credit union in 1979 (LoneStar Leaguer Oct. 18). Vaught served on numerous league committees and in leadership positions with the Houston Chapter of the Credit Union Managers Association of Southeast Texas. In 2005, Vaught was inducted into the Texas Credit Union Hall of Fame. Funeral arrangements are pending …

SECU sees low rate of foreclosures

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RALEIGH, N.C. (10/19/11)--North Carolina State Employees’ CU (SECU), which makes mortgage loans to members in all 100 North Carolina counties, continues to experience a low rate of mortgage foreclosures. While the incidence of foreclosure has increased, the $23 billion asset, Raleigh, N.C.-based credit union currently has a foreclosure rate of less than one half of 1% of total loans, or roughly one-tenth of the national foreclosure rate. The main reason for the good foreclosure rate is SECU’s “face-to-face” Mortgage Assistance Program (MAP), which helps keep members in their homes, said SECU.
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SECU originates, services and “books” member mortgages. It has made the loans for more than 50 years, and manages about 100,000 individual mortgages with aggregate balances in excess of $11 billion. Also, the financial cooperative still uses direct, personal underwriting and does not risk-price mortgage loans. All qualifying members receive the same rate, regardless of credit score. Most mortgages are two-year adjustable rate loans providing manageable interest-rate risk for both the member-borrower and the credit union, said SECU. Launched in 2009, SECU’s MAP has helped more than 8,000 families remain in their homes when confronted by unexpected economic adversity. Members meet face to face with a senior credit union staffer to develop a workout plan to accommodate the member’s current financial situation. Options for workout plans include partial payments, loan extensions or modification/refinance. Historically, mortgage foreclosures have resulted from one of the five normal, life event “D-risks” of lending--death, disability, divorce, drug/alcohol dependency, or dis-employment. Most of the recent uptick in foreclosures at SECU is related to unexpected job loss in the current economy. “SECU’s low foreclosure rate is a direct result of the credit union working one-on-one with members to develop individual workout plans,” said Mark Coburn, senior vice president of loan servicing. “Foreclosure is always the worst choice for both borrower and lender. Meeting with members ‘face to face’ is at the heart of SECU’s Mortgage Assistance Program, and low foreclosures are a good measure of MAP’s success. “Who owns your mortgage can be of critical importance these days; SECU members know we’re local, we will listen, and we will work to help them overcome an unexpected economic shock,” he added.

Maine CUs garner coverage on savings fin ed

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PORTLAND, Maine (10/19/11)--Maine credit unions received notable coverage from media throughout the state--including more than 35 minutes of air time on TV news programs in the past month. In interviews in August and September on WCSH6 and WLBZ2 during the “Morning Report,” Jon Paradise, the Maine Credit Union League’s governmental and public affairs manager, offered ideas on youth savings, tips on helping students manage their finances successfully at college and the convenient access Maine credit unions provide through shared branching (Weekly Update Oct. 14). Paradise also appeared in a three-part series on WGME’s “Daybreak” and “Good Day Maine” on FOX News, speaking about the role that parents can play in helping children learn about financial education, the benefits of technology at Maine credit unions, and credit for young people. Maine credit unions were also featured in a recent newspaper article in the weekly publication, The Portland Phoenix. The article, which encouraged consumers to put their money in local institutions, features credit unions prominently. In addition to highlighting the popularity and strength of credit unions in Maine, the article gave substantial coverage to the Young & Free Maine program, Maine credit unions' Gen Y initiative. “Our media relationships continue to result in positive exposure for Maine credit unions through a diverse group of media outlets,” said John Murphy, league president.

CU in Texas issues financial challenge for ICU Day

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FARMERS BRANCH, Texas (10/19/11)--Credit union members worldwide will celebrate International Credit Union (ICU) Day Thursday to commemorate the credit union movement’s history and achievements. One Texas credit union is celebrating all month by challenging members to take an active role in managing their money. In honor of ICU Day, United Community CU of East Houston has challenged its members to pledge to save more, spend less, and manage their credit (LoneStar Leaguer Oct. 18). So far, nearly 500 members have signed the pledges, which are hanging at the credit union’s four Houston area locations. Members also are taking an online money management course, which features topics such as setting financial goals, tracking their spending and building a household budget. Nearly 75 credit union members completed the course within the first week it was offered. For the credit union, the celebration will end Nov. 5, a day being unofficially deemed as Bank Transfer Day by credit union supporters and others nationwide. On Nov. 4-5, any new members joining the $80 million asset credit union will receive welcome packages that include T-shirts commemorating their support of the credit union movement. As part of the celebration, one United Community CU member also will receive a $500 boost to a savings account. The member will be randomly chosen from the list of people completing the money management course. “With all that is happening in the economy, consumers are eager to take a proactive approach to financial management,” Shalonda Dawkins, United Community vice president of marketing, told the Texas Credit Union League. “Our job as financial institutions is to provide them with the tools to make that happen.”

Million Dollar Community Challenge passes goal

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TINTON FALLS, N.J. (10/19/11)--United Teletech Financial CU’s Million Dollar Community Challenge ended Sept. 30, with credit union’s members saving more than $1.83 million in loan interest, while also bringing money back into the community. The campaign challenged community members to save a million dollars in interest. “Community members not only accepted the challenge, but far surpassed our expectations for how much they saved,” said Leo R. Ardine, CEO of $291 million asset United Teletech Financial FCU, Tinton, N.J. He added that by participating, “they not only helped themselves but the community as well.” The challenge benefited five charities:
* Big Brothers Big Sisters of Monmouth & Middlesex Counties; * Clean Ocean Action; * FoodBank of Monmouth & Ocean Counties; * Monmouth County Society for Prevention to Cruelty to Animals; and * The Salvation Army-Red Bank Corps.
Each charity was awarded $1,000. As the top two finishers in a public vote, Big Brothers Big Sisters of Monmouth & Middlesex Counties and the FoodBank of Monmouth & Ocean Counties will each receive an additional $4,000 donation. “This campaign has been about more than just saving money on interest rates,” Ardine said. “The challenge has created an educational opportunity for people to become informed on making sound financial decisions and to become more aware of the importance of helping local charities.”

Ohio CU biz loan originations up 16

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COLUMBUS, Ohio (10/19/11)--Demand for small business lending in Ohio remains strong, with Ohio credit unions responding with $63.3 million in member business lending (MBL) originations in the first half of 2011. Thats up 16.6% from $54.3 million in the first six months of 2010, said the Ohio Credit Union League. Of Ohios 382 credit unions, 101 reported outstanding business loan balances, totaling $406.4 million statewide, according to the Ohio Credit Union Quarterly Performance Summary. Small businesses are the economic engines that drive the economy forward, and Ohio credit unions are providing the financial support necessary for growth, said Paul Mercer, league president. We can do more. Congress is considering a measure that will provide credit unions with the capacity to lend more to small businesses, injecting $13 billion into the economy and creating 146,000 jobs nationally, without costing taxpayers a dime. H.R. 1418, the Small Business Lending Enhancement Act, would increase the MBL authority of credit unions to 27.5% of assets from 12.25%. The bill has garnered bipartisan support from Ohios congressional delegation, including co-sponsorships from U.S. Reps. Marcy Kaptur (D-Toledo), Steve LaTourette (R-Bainbridge Township), Tim Ryan, (D-Niles), Steve Stivers (R-Columbus), and Betty Sutton (D-Copley). Similar legislation (S 509), co-sponsored by U.S. Sen. Sherrod Brown (D-Ohio), is under consideration in the Senate. Jeff York, president/CEO of CoastHills FCU, Lompoc, Calif., testified on behalf of the Credit Union National Association (CUNA) last week about the benefits of a higher MBL cap before the House Financial Services subcommittee on financial institutions and consumer credit (News Now Oct. 13). Ohio credit union loan-origination growth outpaced the national average, increasing 16.2% to $2.6 billion. Ohio credit unions originated $611.4 million in first mortgages in the first six months of 2011, up 13.3% from the same period in 2010. The originations helped first mortgages outstanding grow 5.7% to $4.2 billion at Ohio credit unions. Although vehicle sales are increasing 12.8% nationally from June 2010, this has not translated to tremendous growth in the credit union auto portfolio due to heightened competition from captives, the league said. However, the states credit unions reported above-average auto loan growth, compared with the declines experienced nationally. Auto loan balances rose by 3.5% over second quarter 2010. Similar to national trends, growth was reported exclusively in the used-auto loan portfolio. Used-auto loan balances in Ohio increased 7% from June 2010 to June 2011, as new-auto loan balances fell 2.4%. Asset quality in Ohio remains strong, with the delinquency rate falling to 1.20% in June 2011 from 1.29% a year ago. Delinquency remains well below the credit union national average of 1.59%. Also, credit card delinquencies declined 40 basis points the past 12 months to 1.24%. Credit unions in Ohio added 19,000 new members the past 12 months, growing membership by 0.70% to 2.68 million members. The growth rate is faster than the national average of 0.59%. The second quarter statistics mark the 10th consecutive quarter in which Ohio has seen membership growth, following years of relatively flat growth. Total revenue for Ohio credit unions fell 2.5% to $572.2 million through the first half of 2011. Similarly, credit unions nationwide saw income levels declining over the past year. The Quarterly Performance Summary attributes declining revenue to the historically low interest-rate environment. Ohio credit union loan interest income fell 3.5% from June 2010 levels. CUNA and credit unions are urging Congress to increase credit unions MBL cap because doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create about 140,000 new jobs, with no cost to taxpayers, CUNA said.

Tobyhanna FCU Divorce Your Bank

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HARRISBURG, Pa. (10/19/11)--Tobyhanna FCU, with $155 million in assets, Scranton, Pa., is capitalizing on the national attack against big banks and debit card fees with its “Divorce Your Bank” campaign. The campaign includes radio, Facebook, billboards, and a “Divorce Your Bank Easy Switch Kit” booklet designed to ease the transition of switching financial institutions, according to the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Oct. 18). The credit union has posted a billboard focused on the message that it does not charge a monthly for use of its debit card. Tobyhanna FCU plans on incorporating an internal and external debit card use promotion into the campaign. PCUA urged consumers to look to credit unions for lower fees and better rates. “As consumers become fed up with increasing bank fees, we encourage them to switch to a credit union for their financial needs,” McCormack said. The association, with its member credit unions, sponsors the iBelong credit union awareness program. Use the link.