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Study Fees top reason low incomers in L.A. close bank accounts

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LOS ANGELES (10/20/11)--The number of unbanked low-income households in Los Angeles without checking or savings accounts is rising, and unexpected or unexplained fees are the No. 1 reason they closed their accounts in 2010, according to a survey of predominately Hispanic, low-income households released by the Pew Health Group's Safe Banking Opportunities Project. About 32% of working poor households that left banking cited the fees; another 27% cited job loss or lack of funds. More families closed bank accounts (13%) than opened them (8%), said the project report. The report noted a local effort to promote banking--the Bank on LA campaign--slowed the rate of departure from banking but could not overcome persistent concerns of financially stretched participants about hidden or unexpected bank fees or the lack of sufficient funds for opening or maintaining accounts. “In today’s economy, where every penny counts, more needs to be done to bring low-income families into the financial mainstream,” said Susan Weinstock, project director at the Pew Health Group. “This data points to a real need for banks to better disclose their fees in a concise, easy-to-understand format.”
* Banked individuals use alternative financial service providers because of liquidity concerns. Thirty-one percent of banked individuals supplement their banking relationships with services from alternative financial service providers. Roughly 43% that use AFS bill pay services are concerned about the timing of the transaction posting and cash liquidity. And 37% of these said they can pay bills faster at a store-front check casher than at a bank. * Unbanked households said it is more difficult to come up with the minimum balance needed to open an account. That was the primary barrier to opening an account for 50%, compared with 30% last year. * Households that are banked are more able to save and less likely to suffer cash loss. Ninety-four percent of banked households keep some extra funds in a bank account, while 88% said they have at least one savings account. Eighteen percent of people relying solely on cash indicated they have victims of cash loss, including theft. The average amount lost was $729, equal to nearly two weeks of the respondents’ average household expenses.
For the full report, use the link.

Americans trust in fin. system drops CUs score highest

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CHICAGO (10/20/11)--Trust in America's financial systems has dwindled to 23%, down from 25% in June, and consumer anger about the economy has increased, according to the quarterly Chicago Booth/Kellogg School Financial Trust Index, released Wednesday. But credit unions rank the highest in trust of all financial institutions. Nearly 60% of consumers surveyed said they are angry or very angry about the current economic situation--"the highest level of anger we've found since the earliest months of the financial crisis," said Luigi Zingales, a professor of entrepreneurship and finance at the University of Chicago Booth School of Business and co-author of the Financial Trust Index, a quarterly look at trust in America's financial systems. "The findings in this issue reflect what's been reported in the news and demonstrate the fragility of trust many Americans still have in the institutions where they invest their money," Zingales added. Trust in banks overall dropped to 33% from 39% in the last study in June. Credit unions received the highest trust score--56%-- and local banks received 55%. But trust in national banks and banks in which the government has a stake were particularly low--26% and 22% respectively, said the report. Other findings:
* Two-thirds of respondents said the government effort to create new jobs should take priority over a deficit reduction. However, respondents--especially women--were less inclined to agree with that statement if the question involved agreeing with President Barack Obama that new jobs should trump the deficit reduction. * Roughly 55% or respondents say they believe a significant stock market drop is likely--the highest level since the first issue of the index in December 2008. * Thirty-three percent believe that house prices will drop in the next 12 months--the highest since March 2009 and an increase of three percentage points since the June survey. * Thirty-nine percent of Americans surveyed are worried that the possible breakup of the euro could impact the U.S. economy, the study said.
The news comes on the heels of revelations of new bank fees and the Occupy Wall Street movement, as well as falling household incomes and low approval ratings of the federal government's efforts to alleviate financial stress on the average consumer. The telephone survey of 1,020 individuals was conducted between Sept. 21 and Sept. 28 by Social Science Research Solutions.

IABC NewsI Bank Transfer Day gains momentum

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MADISON, Wis. (10/20/11)--ABC News and other media outlets nationwide are reporting on Bank Transfer Day momentum, in which people are signing up to leave large banks in favor of credit unions on or before Saturday, Nov. 5. To date, more than 51,000 people have signed up for Bank Transfer Day on Facebook, and a cause page for the event has garnered more than 15,000 “likes” ( Oct. 19). The options proposed by the Facebook event (the event page was created by art dealer Kristen Christian) include: research your local credit union options; open an account with a credit union that best suits the individual’s needs; cancel all automatic withdrawals and deposits; transfer funds to the new credit union account; and follow the bank’s procedures to close accounts before Nov. 5. The FaceBook event page also has links to help people find credit unions in the U.S., Canada and the United Kingdom. Some other credit unions’ marketing efforts regarding Bank Transfer Day, ire at banks for raising debit fees and general dissatisfaction with banks include:
* Two Silicon Valley credit unions in California are sending messages through various media to lure businesses from big national banks (Silicon Valley/San Jose Business Journal Online Oct .14). Star One CU, Sunnyvale, has a picture of a tired looking child next to the phrase: “Tired of your bank? Open a checking account with a no-fee debit card.” Meanwhile, San Jose-based Alliance CU, has a rotating message board on its website with messages that include, “When we say free checking, we mean free checking.” * Affinity Plus CU, St. Paul, Minn., has expanded its “Ditch Your Bank” awareness campaign to include billboards, radio and newspaper ads that question new bank debit-card fees. The new ads were launched Oct. 7 and can be seen and heard throughout the area on digital billboards and radio stations, and in newspapers ( Oct. 18). * Some Texas credit unions see an opportunity to woo bank customers because of banks charging monthly fees to use a debit card, Dick Ensweiler, president/CEO of the Texas Credit Union League, told The Dallas Morning News (Oct. 17). Credit unions are marketing their debit cards, and some credit unions are paying members 2% to 3% interest on checking accounts if they agree to use direct deposit, receive electronic financial statements and make 15 debit card transactions per month, Ensweiler told the paper.
The latest credit unions and credit union leagues that have seen an increase in business because of dissatisfaction with bank fees and practices include:
* Charlotte (N.C.) Metro FCU experienced a 350% increase in new online accounts, and a 90% increase in phone calls in the past two weeks because people were unhappy about new fees at big banks (The Charlotte Observer Oct. 19). Also, representatives at Founders FCU, Lancaster, S.C., have been opening new accounts daily because for people leaving big banks, Nicki Nash, Founders senior vice president of marketing and community relations, told the newspaper. * Municipal CU, New York, the largest credit union in the state with 320,000 members, reported an increase in membership because of growing bank fees (PBS Nightly Business Report Oct. 18). While the credit union usually experiences 5% growth in membership annually, it expects to grow 8% this year, and 8% to 10% next year, Kam Wong, Municipal CEO, told PBS. * Patelco CU, Pleasanton, Calif., with 40 branches in Northern California, and Redwood CU, Santa Rosa, Calif., with 19 branches in Northern California, experienced a surge in membership because of people withdrawing their money from major banks (East Bay Express Oct. 18).

ICU Day Cheney thanks CUs for service

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MADISON, Wis. (10/20/11)--The Credit Union National Association (CUNA) has released a video in which President/CEO Bill Cheney greets credit union employees on International Credit Union (ICU) Day, being celebrated today with the theme, “Building a Better World.”
Today 49,000 credit unions from 97 countries and their 184 million members join together to celebrated credit unions. ICU Day is celebrated the third Thursday in October every year. In the video, Cheney congratulated credit union employees for the service they provide members throughout the year. Earlier this week, CUNA released a similar video from Cheney geared to credit union members that credit unions could feature on their websites. ICU Day will lead into the 2012 International Year of the Cooperatives, Cheney added. On Oct. 31, credit unions will join cooperatives from all sectors of the economy in celebrating the positive impact cooperatives have in reducing poverty, creating jobs and promoting social integration worldwide. “We know that co-ops build a better place here in the U.S.,” Cheney said. “Credit unions are a big part of that, and we want the whole world to know about it.” Credit union organizations nationwide are being recognized and taking part in ICU Day activities. Some ICU Day events include:
* Gov. Mark Dayton signed a proclamation declaring today as Credit Union Day in the state of Minnesota, said the Minnesota Credit Union Network. * Gov. Tom Corbett proclaimed Oct. 20 as Credit Union Day in Pennsylvania, according to the Pennsylvania Credit Union Association (Life is a Highway Oct. 20). * Timberland FCU, with $49 million in assets, DuBois, Pa., kicked off the International Credit Union Week on Monday with a “Build a Better Vacation” celebration. Staff dressed up in vacation clothes and served virgin margaritas to members from a Tiki Bar. Staff advised members to open a vacation club account to help save for their next trip. * CUNA is celebrating ICU day with cookies and apples for its employees at its Madison, Wis. office. * Royal CU (RCU), with $1.2 billion in assets, Eau Claire, Wis., invited its members and the community members to enjoy free cookies and coffee at all RCU offices. * Belco Community CU, with $360 million in assets, Harrisburg, Pa., is offering a free hot dog lunch, a prize drawing for a $50 Visa gift card at each of its branches, free giveaways, and an employee bake sale, with 100% of the proceeds going to Susan G. Komen for the Cure on ICU Day. Five gift baskets will be raffled off to benefit the United Way. Belco is also holding a one-day auto loan sale, with rates reduced by 0.5% on all new and used autos, motorcycles, recreational vehicles and boats. * With support of several cooperative organizations, including the Indiana Credit Union League, Indiana Gov. Mitch Daniels declared Oct. 16-22 Cooperative Week. * The Texas Credit Union League announced the YouTube debut of CU Lip Dub video for ICU Day. The Lip Dub, the first filmed by a group of credit unions and the first on record in San Antonio, was filmed during the 106-degree heat wave in August. To see the video, use the link.

Canadian CU reps in La. to discuss MBLs

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HARAHAN, La. (10/20/11)--Representatives from Servus CU, the third largest credit union in Canada, met with Louisiana credit union representatives met last week at the Louisiana Credit Union League’s headquarters in Harahan to share their knowledge on member business lending (MBL). The league worked with the World Council of Credit Unions (WOCCU) to identify Servus CU as a credit union with a robust business services department that also was willing to assist Louisiana credit unions in their development of business services, said the Louisiana Credit Union League (eNews Oct. 19). Servus CU, located in Alberta, offers a full menu of business products and services, including deposit accounts, loans, cash management, card services and employee solutions. While growing its MBL services, Servus remained true to the credit union philosophy, with a strong focus on member service, said the league. Louisiana credit union professionals participated in a study trip to Servus CU earlier this year, and last week’s sessions were built on the knowledge gained during that trip. During the meetings, attendees learned about different aspects of business services, including products and services and human resource requirements. The sessions emphasized: establishing and adhering to a “risk tolerance” monitor and mitigate risk; commercial loans, including operating loans, term financing, professional practice financing, leasing, and syndications; and the importance of effective sales and service and ongoing training. The Credit Union National Association 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.

Oregon Washington CU Foundations to merge

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BEAVERTON, Ore. (10/20/11)--The boards of the credit union foundations of Oregon and Washington have unanimously approved a merger plan to become the Northwest Credit Union Foundation (NWCUF), effective Jan. 1. Each foundation has more than a decade of experience in funding grants and supporting community outreach in the Northwest. Combined grant awards by the two organizations so far in 2011 have exceeded $225,000. “The development of our future industry is an important benefit that both foundations have traditionally provided,” said Oregon Credit Union Foundation (OCUF) Chair Carlyn Roy. “Once merged, credit unions of all asset sizes throughout the Northwest can be assured that we will have a stronger foundation with solid leadership moving forward.” The two organizations will be more streamlined and effective in providing professional development, training, disaster relief and outreach, said Washington Credit Union Foundation (WCUF) Chair Paula Slaye. “Our foundations are already closely aligned in our mission and collaboratively we will seize this opportunity to become even more impactful,” she added. Programs and services to applicants and beneficiaries of the respective foundations will not be disrupted during the transition. Trustees currently serving on the WCUF and OCUF boards will serve on the newly formed foundation board during its transition year in 2012. A NWCUF strategic planning session is planned for the first quarter of 2012. This is the second merger this year involving credit union agencies in Oregon and Washington. The memberships of the Credit Union Association of Oregon and the Washington Credit Union League voted “overwhelmingly” in early November to create the combined Northwest Credit Union Association (NWCUA), which began operations on Jan. 1 (News Now Nov. 12).

CU System briefs (10/19/2011)

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* ONTARIO, Calif. (10/20/11)--John Merlo, CEO of Chatsworth, Calif.-based Premier America CU, has been named an "Unsung Hero" by the
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California Credit Union League. The award honors individuals who have been in the credit union industry for at least 20 years and who have made significant contributions to the community. Merlo's contributions include years of service on the Western Corporate FCU board and as chairman; serving on the league's Government Relations Committee and what was then Assembly of Delegates; serving on the board and as chairman of CUDL; and contributions to Children's Miracle Network Hospitals and the Richard Myles Johnson Foundation. Under his leadership, Premier America has grown to more than $1.32 billion assets from $350 million. He also worked for Hughes Aircraft Employees FCU (now Kinecta FCU) in senior management positions and was president/CEO of its credit union service organization for nine years. He is pictured with Lucy Ito, league senior vice president of credit union growth and development, during the award presentation Oct. 7. (Photo provided by the California Credit Union League) … * EAU CLAIRE, Wis. (10/20/11)--Rudy Pereira has been named to succeed Charles Grossklaus as CEO of Eau Claire, Wis.-based Royal CU (RCU), announced RCU Board Chairman Doug Olson Wednesday. Pereira will assume the CEO role on Dec. 12. Grossklaus ends a 40-year career with RCU, serving as CEO the past 27 years. Pereira is a 25-year veteran of the credit union industry, serving most recently as senior vice president operations and technology at Alliant CU, Chicago. He was chair of the Credit Union National Association's (CUNA) CUNA/BITS Advisory Task Force and vice chair of the CUNA Council Forum … * COVENTRY, R.I. (10/20/11)--Conventry (R.I.) CU has announced that David Root became the credit union's CEO on Oct. 3. Root succeeds Richard Gingell, who retired. Root has been the credit union's independent auditor for the past 20 years. He has more than 30 years' experience in the banking industry. A CPA in Massachusetts and Rhode Island, he owns Root & Associates. The credit union has $259 million in assets …