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Technology makes it easier to switch

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MADISON, Wis. (10/21/11)--Credit unions are doing their best to make switching from a bank to a credit union easy, and technology is helping. As Bank Transfer Day (Nov. 5) approaches, credit unions have made it easier than ever to join a financial cooperative, said the Northwest Credit Union Association. "A new member can walk into a credit union and join in less than a half-hour thanks to switch kits developed to make it easy," said NWCUA CEO John Annaloro. "I've heard pundits say switching is a complicated process, fraught with potential for costly mistakes. Switching is easy and safe." Consumers can join credit unions online or use unified account-opening processes that can help make the credit union the primary financial institution of the new member. Because many credit unions participate in a shared branching program, access a member account is easy, said NWCUA. One credit union is on the forefront of the concierge trend. TIC FCU, a $240 million asset credit union in Columbus, Ga., is one of about half a dozen institutions using SwitchAgent, a concierge service launched a week ago by Deluxe after the Occupy Wall Street movement began focusing on Bank Transfer Day, setting it as a day for consumers to protest high bank fees by switching to a credit union or small local bank. The service helps consumers shift online bill payments of recurring automatic debits, such as house payments, Social Security payments, and memberships, from their old accounts to new ones at another institution (American Banker Oct. 20). Credit union staff use an authorization form that requests account information necessary for Deluxe to make changes with creditors and payers. On the form, the new account holder lists all preauthorized transactions and supplies it to Deluxe through the phone or online. Deluxe, which started offering the service about a week ago, urges its clients not to charge for the service. The credit union's president, Mark Littleton, told the publication that it hopes to gain more members who have preauthorized transactions, ACH, auto pay, and other "sticky" services. Consumers don't have to spend their time making the transition, because service does it for them. The service includes a proprietary biller database and tracks the schedule and distribution of billing notification to keep the consumer's old account from becoming overdrawn or open too long. Both the old and new accounts must stay open while the recurring payments are transferred to the new account. "For consumers, there is no better choice than credit unions," Annaloro said. "Credit unions are convenient, safe and --best of all--they are not banks."

CU System briefs (10/20/2011)

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* BEAVER, Pa. (10/21/11)--Shirley A. Howl, 56, of New Brighton, Pa., pleaded guilty Wednesday to embezzling $400,000 from the West-Aircomm FCU, Beaver, Pa. Howl, who was lead teller at the credit union, was charged with one count of making a false entry in financial institution records. Court records alleged she overstated the amount of money in a cash dispensing machine by $130,000. Howl was in charge of three ATMs and allegedly adjusted log entries showing how much cash was in the ATMs, destroyed portions of paper tapes that recorded transactions and told other employees to throw away backup tapes. She also allegedly shifted funds to disguise the actions before annual cash counts. In late 2009, she was out of the office during the cash count, and employees discovered $400,000 missing (Pittsburgh Post-Gazette Oct. 18) …

Polls indicate consumers would switch

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MADISON, Wis. (10/21/11)--At least two polls say a good portion of consumers surveyed would switch banks if they were hit with debit fees, according to a number of reports in national media, Although answering a survey about intentions is different from actually following through and leaving a bank, the polls are documentation that consumers are fed up with banks' fees. The latest wave of discontent resulted from big banks such as Bank of America and Wells Fargo's announcements that they will charge or are testing fees on debit card usage. A new poll commissioned by CreditCards.com and conducted by GfK Roper Public Affairs & Media from Oct. 7 to 9 had these results, as reported in CreditCards.com (Oct. 20):
* Nearly four out of five debit card holders surveyed (78%) said they will switch banks to avoid monthly fees charged when they use their debit cards to make purchases. * Two out of three debit card users surveyed (68%) said they will ditch their cards if their banks start charging monthly fees. * Debit card holders also reported they would pay with cash instead (81% of those surveyed) and pay with a credit card instead (42%). * Those surveyed, when asked how high a fee would be before they would switch from debit cards to another form of payment, identified $3.90 as the average turning point, or $1.10 less than Bank of America's planned $5 a month debit card usage charge. * Many said a $1 fee would be too much to pay. Of those surveyed, 44% said they would switch to another form of payment if just $1 were charged. Another 14% said $3 would be the point at which they would search for options. And 22% said $5 would be too much. Of the group, 79% indicated they would stop using their debit cards if hit with a $5 fee.
A second study indicated that about 30% of U.S. consumers surveyed said they would leave their banks over fees for using their debit cards, reported several media, including Bloomberg.com and SmartMoney.com Oct. 19) . That study, by Fort Washingon, Pa.-based The Research Intelligence Group, a consulting and marketing strategy firm that is a unit of Montreal-based Leger Marketing, also found that 43% of those surveyed said they would switch to paying cash or credit cards if their banks implemented charges. Thirteen percent indicated they would pay the fee if "reasonable." Low- to middle-income consumers were more likely to pay the fees, a reflection that less affluent populations often believe they have few options at their disposal, said a The Research Intelligence Group. About 22% of consumers whose households earned between $35,000 and $49,000 a year indicated they would be willing to pay the fee. That compares with 14% of consumers with household income of $100,000 or more who would pay it, said the report. The fees introduced by banks have brought a backlash that is focusing on Nov. 5, Bank Transfer Day. Many are urging consumers to switch their checking accounts to credit unions or small banks for free checking.

CUNA economist outlines refinance strategy to IKiplingerI

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MADISON, Wis. (10/21/11)--A Credit Union National Association (CUNA) economist Thursday told Kiplinger.com he has rule to help those who are deciding whether to refinance their mortgage to take advantage of near-record-low rates. To figure how many months it will take to recover closing costs, consumers should divide the costs by their monthly savings, Kiplinger said. “My personal rule of thumb is that if the reduction in payments would cover all of the costs in less than two years, the decision to refi is a no-brainer,” Bill Hampel, CUNA chief economist, told Kiplinger. “If it will take two to three years, it’s probably a good deal. If it’s much more than three or you don’t expect to own the home or the mortgage for at least five years, don’t bother.” To mitigate the impact of rate increases, negotiate caps with lenders, Jack Pritchard, chief operating officer of mtgprofessor.com, told the publication. Hampel told Kiplinger he particularly likes the 5/5 adjustable rate mortgage, a product that many credit unions offer. The rate adjusts every five years--typically with a two-percentage-point cap on the first adjustment. So during a 10-year period, the rate would average 4.5%--assuming the rate begins at 3.5% and moves up to the maximum 5.5% on the five-year anniversary, he said. To read the article, use the link.

Brekken elected as Minn. Foundation chair

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ST. PAUL, Minn. (10/21/11)--The Minnesota Credit Union Foundation (MNCUF) board named its table officers Oct. 13. Pat Brekken was elected chair, Dave Larson was elected vice chair, and Kristi Mukomela was elected secretary/treasurer. Table officers are elected for one-year terms. Those elected are entering their second consecutive year in their respective roles. Brekken is president of Richfield/Bloomington CU, Richfield. Larson is senior vice president of Affinity Plus FCU, St. Paul, and executive director of the Affinity Plus Foundation. Both were appointed to new MNCUF board seats in October 2009 and were elected to three-year terms in August 2010. Mukomela, president of Novation CU, Oakdale, served as MNCUF chair from 2004 through 2010. The foundation “continues to capitalize on the progress we’ve made over the last few years,” Brekken said. “With our newly refined focus on financial education, we look forward to the opportunity to engage more and more credit unions in the foundation’s efforts and to be able to impact the broader community with our initiatives.” The table officers serve alongside four other directors with staggered board terms. They are:
* Chuck Albrecht, Mid-Minnesota FCU, Baxter; * Mary Hansen, Mayo Employees FCU, Rochester; * Lynn Kothe, North Memorial FCU, Robbinsdale; and * Brian Sherrick, Postal CU, Woodbury.

Switch stories just keep going ... and going

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MADISON, Wis. (10/21/11)--Stories of people switching from their large banks to credit unions continue to garner attention in the national media.
One New Jersey credit union, Financial Resources FCU in Bridgewater, is using billboards that state “IditchedmyBankforaCreditUnion.com” and lead consumers to a microsite with information on the credit union movement, reported the New Jersey Credit Union League. (Photo provided by the New Jersey Credit Union League)
Dennis Pierce, CEO of Community America CU in Kansas City, Mo., wrote a guest column in Monday’s Kansas City Star assuring consumers that they have a choice in selecting institutions to fulfill their financial needs, and highlighting the credit union difference and ease in switching to a credit union from a bank. “Recently, Bank of America’s CEO noted the bank’s right to make a profit and the need to institute those fees to do so,” Pierce wrote. “He is right. It does have the right to make a profit, and so do other big banks that are charging debit card fees. I am in favor of a free market that gives these banks the right to make their own choices. As the head of a nonprofit credit union, which is owned by its members, I make different choices. You need to know you have choices, too. “The good news is there is no hidden charge at play here,” he added “This kind of open fee disclosure is what financial reform legislation is all about. Fortunately, not all financial institutions feel the same way about debit card fees as Bank of America. There are many financial institutions, credit unions and community banks that are not charging this fee and offer just as many services and products. “We can’t avoid all of life’s frustrations, but there are some things we can change. When you find a financial institution that truly partners with you and has your best interest at heart, it’s worth it,” Pierce concluded. Here are other examples of credit unions and credit union leagues taking the initiative to inform consumers about the credit union difference, and some of the tangible results:
* New bank fees have helped create a greater-than-normal level of interest in how credit unions operate and what they have to offer, said Mona Shand, spokeswoman for the Michigan Credit Union League & Affiliates (minyanville.com Oct. 19). The league said it has seen a recent spike in traffic on its credit union locator site, lovemycreditunions.org, and its members are reporting above-average levels of activity. The league is preparing the official data on that new activity, to be released sometime next week, Shand added. * New Jersey credit unions are noticing a dramatic increase in hits on aSmarterChoice.com and other credit union locators the past few weeks. Hits reached 73,633 for credit unions in the state as of Wednesday afternoon (The Daily Exchange Oct. 20). * Wisconsin consumers who switch to credit unions from banks can save $174 per year per household on service fees, according to a press release issued by the Wisconsin Credit Union League. Those who use a credit union receive total financial benefits much greater than this, the league said. Credit union members save $1,020 in interest to finance a new car compared with financing at a bank. This is based on a $25,000 vehicle with funds borrowed for five years, with a savings of $204 per year in interest. Members save $15 compared to banks on a late payment fee on a credit card. That’s in addition to enjoying an interest rate that’s just under a percent lower than banks for a typical “gold” card, the league said. * While banks and other financial institutions are starting to charge their customers simply for using their debit cards, American Airlines Federal CU (AACU), Fort Worth, Texas, said it continues to offer benefits that allow member-owners to use their card even more: a premium dividend rate, out-of-network ATM fee refunds and no monthly fees on its Priority Checking Account. “We continue to offer member-owners the same great rates and fee-free options we’ve been doing all along,” said Nancy Crouch, AACU’s card services director. “We have no intention of adding a monthly service fee or debit card usage fee to our checking accounts.” * Spokane Teachers CU in Liberty Lake, Wash., garnered a 30% increase in new member accounts so far in October (NWCN.comOct. 19). By the end of 2011, the credit union--which has no plans to start charging debit-card fees--expects to have more than 100,000 members. * Last week, 32 South Carolina credit unions announced a pledge to continue offering members free use of their debit cards (islandpacket.com Oct. 19). * BECU, the largest credit union in Washington state, saw its membership “skyrocket” since Bank of America (BofA) announced it would soon start charging some of its customers $5 a month to use their debit cards, spokesman Todd Pietzch told msnbc.com (Oct. 19). During the past few weeks, new membership is running at roughly 280% of what BECU would normally see. In an average month, between 6,000 and 7,000 new members join the credit union. However, in the first two weeks of October, more than 8,200 people signed up. “But it’s not all BofA customers. Many are people who are simply unhappy with all the new bank fees they’re hearing about,” Pietzch told msnbc.com. Also, Bankrate’s 2011 Checking Account Survey, conducted in August, indicated that 76% of the biggest U.S. credit unions offer a free stand-alone checking account. Only 45% of U.S. banks still do that, reported msnbc.com.
Credit unions nationwide are gearing up for Bank Transfer Day, in which people are signing up to leave large banks in favor of credit unions on or before Saturday, Nov. 5.

A whole lotta celebration going on

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MADISON, Wis. (10/21/11)--Credit unions nationwide celebrated their unique economic and social standing on International Credit Union (ICU) Day yesterday with warm wishes, treats, good deeds and music videos. “I wish everyone a Happy Credit Union Day and continued success,” said Pennsylvania Credit Union Association President/CEO Jim McCormack (Life is a Highway Oct. 20). “This is a special day to celebrate our proud history and uniqueness.” “Credit unions play a very important role in our society,” said. “Thanks to credit unions, consumers--regardless of their socio-economic status--have access to affordable financial products and services, like checking savings, debit and credit,” said Dick Ensweiler, Texas Credit Union League CEO. ICU Day leads into the 2012 International Year of the Cooperatives. On Oct. 31, credit unions will join cooperatives from all sectors of the economy in celebrating the positive impact they have in reducing poverty, creating jobs and promoting social integration worldwide. “As credit unions celebrate International Credit Union Day and prepare for the United Nations’ International Year of the Cooperatives in 2012, we celebrate that we’re all part of building a better world,” said Patrick S. Jury, president/CEO of the Iowa Credit Union League. To celebrate ICU Day, eight spokespeople from several states representing the Gen Y marketing initiative Young & Free collaborated to create three music videos that credit unions can use to promote International Credit Union Day. The three videos feature an original rap, a Lady Gaga tribute and a rock classic from the band Journey that promote six credit union attributes::
* Membership is open to all; * Members call the shots; * Rates and fees should benefit members; * Credit unions are just as accessible as banks; * Financial education should be free and available to all; and * Giving back to the community is a priority.
Young & Free is a spokesperson recruitment program started by Currency Marketing, a credit union marketing company in Chilliwack, Canada. The campaign seeks to help credit unions attract a new, young base of members. One credit union per state is allowed to participate in Young & Free program. To see the videos, use the link. Other ICU Day events included:
* U.S. Sen. Dianne Feinstein, (D-Calif.), entered a statement regarding International Credit Union Day on the U.S. Senate floor Thursday for the Congressional Record--an event marking the first time a California senator has ever done so, and the only senator making such a statement during this year’s ICU Day. (See related story: Feinstein statement in Congressional Record marks ICU Day). * Service 1st FCU, Danville, Pa., held its second annual CU Around Town Community Service Project Each employee was asked to “do good” around the community on behalf of the credit union. The only catch is that the “do good” acts have to be outbound, unprovoked acts of kindness, such as pay someone’s grocery bill or purchasing an item for an organization that has limited funds or a strong need, or paying for the person next in line at a restaurant drive thru. * Colleen Phillips, vice president of marketing at Cross Valley FCU, Wilkes Barre, Pa.; Jill Houseknecht, marketing/communication coordinator; and Scottie Saver, the credit union’s mascot, appeared on WBRE PA Live! to discuss ICU Day, youth programs and the importance of learning to save early. * Clairton Works FCU, Elizabeth, Pa., is collecting donations for local food banks through the end of the month. * First Commonwealth FCU, Bethlehem, Pa., will host a shredding day on Saturday. * Alta Vista CU, Redlands, Calif., celebrated with balloons and bags of Skittles at each of its branches.

Nebraska CUs offer payday loan alternative

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OMAHA, Neb. (10/21/11)--Lincoln, Neb.-area credit unions collaborated to launch “Credit Union Quick Cash,” an alternative to high interest payday loans for consumers.
Click to view larger image Six Lincoln, Neb. credit unions Thursday launched their Credit Union QuickCash program to provide their members with an alternative to high interest payday loans. Pictured, from left, Jerry Barnett, president/CEO, LincOne FCU; Kenn Miller, president/CEO, MembersOwn CU; Bob Torell, president/CEO, University of Nebraska FCU; State Senator Amanda McGill; Chris Nielsen, president/CEO, Nebraska State Employees CU; Ken Bradshaw, President/CEO, Liberty First CU; Dale Springer, president/CEO, Peoples Choice FCU. (Photo provided by Nebraska Credit Union League)
“Short-term, small-dollar loans are often a necessity for many people who are trying to make ends meet, said Scott Sullivan, president/CEO of the Nebraska Credit Union League. “Unfortunately, the current market for these loans in Nebraska is primarily limited to high-cost paycheck advance loans. Credit Union Quick Cash will offer consumers a quick, convenient and low-cost alternative.” The participating credit unions have agreed to offer the same terms and conditions for the small low-interest loans. Members of the participating credit unions will be able to apply and qualify for a $500 loan with an annual percentage rate (APR) of 18%. The average payday loan in Nebraska has up to a 460% APR on a $500 loan with a payback term of 34 days, according to the Financial Stability Partnership. The payback term of the Credit Union Quick Cash loan will be 60 days with no prepayment penalty for members who wish to pay off the loan early. The Lincoln credit unions participating included Liberty First CU, LincOne FCU, MembersOwn CU, Nebraska State Employees CU, Peoples Choice FCU and University of Nebraska FCU. Credit union members can obtain a Credit Union Quick Cash loan in minutes without a credit report. Applicants are required to provide proof of income and be a member of the respective credit union for at least 30 days to qualify.

CO-OP Miracle Match applications ready for 2012

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RANCHO CUCAMONGA, Calif. (10/21/11)--Applications are available for the 2012 CO-OP Miracle Match, a matching program from CO-OP Financial Services that helps credit unions maximize their Children’s Miracle Network Hospitals fundraisers. “The credit union industry is a model for all industries in its mobilizing for a charitable cause,” said Stan Hollen, CO-OP Financial Services president/CEO and a member of the Board of Governors of Children’s Miracle Network Hospitals. “We are entering our fifth year of offering CO-OP Miracle Match, and we are looking forward to again supporting credit unions in this important work in their local communities.” Established in November 2007, CO-OP Miracle Match is on track to distribute $1 million in matching funds to credit unions in 2011. The company expects to finish with 150 credit unions participating from 39 states. Of the 2011 fundraising events, 42 of them are being held for the first time by their sponsoring credit union--a CO-OP Miracle Match record. CO-OP Miracle Match is managed by CO-OP Financial Services on behalf of its 3,000 member credit unions. The program awards $1 million in matching funds annually for Credit Unions for Kids events, proceeds of which go to local Children’s Miracle Network Hospitals. The credit union industry is currently the third largest contributor to Children’s Miracle Network Hospitals.

Filene seeks governance survey respondents

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MADISON, Wis. (10/21/11)--U.S. and Canadian credit unions are being asked by the Filene Research Institute to participate in the first North American-wide study on credit union governance practices. The research, designed by a team of three credit union governance experts led by Dr. Peter Goth of the University of Dublin, seeks to identify credit union governance models best suited to achieving credit union growth during the 21st Century, Filene said. The survey seeks to gather information on these governance issues:
* Credit union motivators for change and growth; * Board composition, director diversity and regional representation; * Director competencies, recruitment practices and training; * Credit union policies for director term limits; * Board self-evaluation and director assessments; and * Credit union experience at annual general meetings
The survey should be filled out by the credit union's CEO, board chair or governance committee chair (one respondent per credit union) and will take about 20 minutes to complete, said Filene. For more information, use the link by Oct. 31.