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News articles tout CUs during financial crisis

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MADISON, Wis. (10/23/08)--Five news organizations--including U.S. News & World Report and MarketWatch--published articles Tuesday and Wednesday pointing out that credit unions are doing well during the global financial crisis. Two of the articles say the banking industry's black eye has spurred gains for credit unions. An article and video in Rnews.com and News10now Oct. 21 indicate that banks' losses could be credit unions' gain. "We have been talking about credit unions for a long time, that they are a great financial alternative, and I think the message is finally starting to hit home," Michael Lanotte, Credit Union Association of New York, told the newspapers. "Despite the economic downturn, credit unions are stable and safe, mainly because unlike banks, they are not for profits." Mike Vadala of Summit FCU, Rochester, noted that credit unions' motive is "to take care of our members, not make a profit off of them"--a big differentiator in service, he said. The article, which also quoted a Summit member, pointed out that credit unions are continuing to lend while banks are tightening their lending. The takeovers, bailouts and government intervention plaguing the banking industry is having a positive effect on local credit unions, said credit unions interviewed by The Beaumont (Texas) Enterprise (Oct. 21). Lisa Balone, senior vice president of marketing for DuPont Goodrich FCU, Nederland, Texas, told the newspaper that since the government's bank bailout bill, the credit union has seen $7 million in new deposits. The biggest concern expressed among members is insurance and safety regarding accounts, she said. However, she provided information about credit unions' federal deposit insurance and coverage. The article also interviewed Ron Burkhalter, president/CEO of Gulf CU, Groves, Texas, and Jason Landry, president/ CEO, Neches FCU, Port Neches, Texas. Burkhalter pointed out that because members own credit unions, the credit union doesn't invest in subprime mortgages and is required to keep reserve capital. Landry said that increased familiarity is contributing to credit unions' growth. His credit union has about 33,000 members, up from 30,000 in October 2007. Hurricane Ike and new insurance guidelines has meant the credit union has more loans available. The Orlando Sentinel (Oct. 21), notes that community banks and credit unions are still lending money while bigger banks aren't. As a result, McCoy FCU, Orlando, is seeing increased membership and a surge in car loan, unsecured signature loans and credit card applications, said A.C. Cowan, president. Cowan says "quite a few calls" are from people who are big bank customers now interested in credit unions. MarketPlace (Oct. 22) distributed a press release from the Tennessee Credit Union League, which said that despite troubled times, Tennessee's credit unions continue to operate in a safe and sound manger, are open for business, and are meeting the financial service needs of members. It reemphasized that credit unions have not caused the current problems in the credit and equity markets and have not been involved in the types of loans, investments and financing practices that caused the problems. Credit unions continue to meet their members' lending and transaction needs. With banks tightening lending standards and interest rates headed north, U.S. News & World Report (Oct. 22) noted that 90 million Americans are turning to credit unions. The article discusses how to determine eligibility and where to find a credit union as well as benefits such as better rates, how credit unions have been affected by the current financial crisis, and their federal insurance. The article cites websites for more information, including that of the Credit Union National Association.

The young like the video ads

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NEW YORK (10/23/08)--Credit unions looking to market to potential members may want to note that consumers under age 25 are most likely to click on video ads than any other type of advertisement, according to a study from iPerceptions Inc. iPerceptions collected user-generated feedback from over 14,000 visitors to leading media sites during August 2008 to paint a detailed picture of consumers’ advertising preferences based on their likelihood to click on different types of online ads. Video ads are not popular among consumers in general--only 11% said they would likely click on them. But the group under age 25 makes up one-third of the video-ad viewing audience. The study also found that marketers do not need to spend on fancy interactive ads to reach consumers. About 25% of respondents said they were likely to click on simple text ads, while 20% of respondents are likely to click on right Internet banners and 12% likely to click on top banners. Study results indicated that the higher an individual’s income, the less likely that person is to click on a video ad. The income gap is most pronounced with video ads--about 49% of consumers making less than $50,000 a year will click on video ads. Also, 65% of consumers who click on the ads are weekly or daily browsers of a site, while 15% are first-time visitors and 6% are sporadic.

Missouri CUs sign up for new troops home project

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ST. LOUIS, Mo. (10/23/08)--The Missouri Credit Union Association (MCUA) has signed an agreement for credit unions to team up with Homes for Our Troops (HFOT)--a nonprofit group that builds specially adapted homes for severely disabled members of the military. The agreement also includes a provision to build homes for Missouri veterans in Branson and St. Louis (The Missouri Difference Oct. 22). Specialist Scott West, a Branson resident, lost his legs below the knee in Iraq when an improvised explosive device (IED) exploded beneath the humvee he was driving. West spotted the IED and jerked the vehicle to the right so it would explode underneath him, rather than his fellow soldiers, the association said. John Gonsalves, HFOT founder and president, will meet with West in St. Louis Tuesday and help introduce the Home for Our Troops effort in Missouri. MCUA encouraged credit unions are encouraged to take part and learn more about the effort. Credit unions were instrumental in building homes for two wounded veterans in Colorado and Minnesota during the national political party conventions this past summer.

CU System briefs (10/22/2008)

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* BIRMINGHAM, Ala. (10/23/08)--Mutual Savings CU announced it will close a branch located at a hospital that filed for a Chapter 11 bankruptcy Monday. The branch at the Physicians Medical Center Carraway will close by the end of next week. The Birmingham-based credit union's branch will continue processing transactions until Friday and will offer loan assistance until Oct. 29. The branch closing is related directly to the hospital's closure, not to performance or stability of the branch, said the $189 million asset credit union's website. Members can go to nearby credit union locations in Forestdale and Gardendale for service, the announcement said … * MEDFORD, Ore. (10/23/08)--Rogue FCU, a $408.6 million asset credit union based in Medford, was selected as regional and state winner of the 2008 Oregon Governor's Outstanding Employee Volunteer Program by Oregon Volunteers and the State Commission for Voluntary Action and Service (Oregon Outlook October). From left are: Kerrie Davis, Rogue FCU community and education outreach coordinator; Oregon Secretary of State Bill Bradbury; and Rogue FCU President/CEO Gene Pelham. (Photo provided by the Credit Union Association of Oregon) … * ALBANY, N.Y. (10/23/08)--Nassau Educators FCU, a $1.217 billion asset credit union based in Westbury, N.Y., was presented the 2008 Ralph W. Hillman Marketing Award by Universal Sharing Network Inc. (USNet). The award recognizes a participating USNet credit union that best exemplifies the spirit and enthusiasm consistently exhibited by Hillman in his support and marketing of the shared branching network. From left are UsNet Chief Operating Officer Marc Inger and Eileen Nolan, senior vice president of Nassau Educators FCU (Photo provided by Universal Sharing Network Inc.) … * WEST LAFAYETTE, Ind. (10/23/08)--Purdue Employees FCU (PEFUC) President/CEO Bob Falk hosted a complimentary Town Hall Meeting at the Purdue Technology Center in West Lafayette Oct. 14. The event attracted 70 members and non-members, who learned about the causes and effects of this year's financial crisis, how PEFCU avoided the crisis, and how a credit union is different from a bank. Falk noted that the typical order of business for the credit union is transparency. "We're not afraid to talk about our operations now and we weren't afraid to talk about them before," he said. (Photo provided by Purdue Employees FCU) …

Texas league unveils Adopt-a-Family program

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FARMERS BRANCH, Texas (10/23/08)--The Texas Credit Union League (TCUL) unveiled its Adopt-a-Family program Wednesday to help credit union employees in Southeast Texas rebuild their lives and communities in the wake of Hurricane Ike. Traditionally TCUL joins with local charities to “adopt” a family for the holidays and fulfill their wish lists through participation from league staff. This year, TCUL’s choice to adopt three credit union families in Southeast Texas garnered positive feedback and support, the league said (LoneStar Leaguer Oct. 22). TCUL is now soliciting applications from credit union employees in the region to find families in need. Eligible credit union employees must have lost their home in the hurricane and have at least one child. Online application forms are available on the TCUL website. TCUL staff will randomly draw three applications from all the families who are submitted for consideration, and work to fulfill the families’ holiday wish lists. All other applications will be posted on TCUL’s Adopt-Family page on its website. TCUL will post profiles of credit union families in need of “adoption” for the holidays as they are submitted.

Top financial business drivers swing factors examined

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NEEDHAM, Mass. (10/23/08)--The financial crises of 2008 serves as an ultimatum to regulators and financial services institutions (FSIs) to swiftly adopt a more integrated risk management framework or face irreparable loss of confidence in the financial industry, according to TowerGroup research.
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The call to action is a core finding of new research exploring the top 10 fundamental forces driving the financial services industry today and into 2009. The industry must undergo core structural shifts to better account for diverse and interdependent risk types, said TowerGroup. The result will be more transparent and timely gauges of liquidity and credit risk positions, which were lacking in the run-up to the current crisis, TowerGroup said. “Aside from the continuing losses, credit exposures, and liquidity constraints, the turmoil inflicted an even more severe trauma to many financial services institutions and the industry as a whole--specifically the loss of public confidence and trust,” said Guillermo Kopp, executive director and global research fellow at TowerGroup. “Systemic interdependencies between risk types have created exposure levels that have transcended the financial clout of any single institution or jurisdiction and pose a threat to the industry and the economy,” he added. TowerGroup’s “top 10” business drivers for 2009 will evolve as the industry prepares for renewed challenges and opportunities. Although local concerns relative to credit, liquidity, margins, and performance still dominate the scene, the industry should pay heed to growth possibilities emerging around the globe, TowerGroup said. TowerGroup believes that FSIs need to catch up with structural shifts occurring within and outside the industry. For example:
* Polarization between leaders and laggards will continue to increase in aspects such as financial performance, client relationships and market share gains; * Whether or not individual FSIs embrace innovation, advances in technology and business process continue relentlessly and will act as a catalyst for improved FSI performance; * In emerging from the present shock, FSIs must integrate their risk management systems, spread liquidity and credit risk, broaden sources of funding, and ensure they have an integrated and comprehensive view of their business transactions in real time; * To deliver optimal value to their clients, institutions must move beyond current defensive strategies to integrate processes, invest in advanced technologies, partner with an ecosystem of capable industry providers, and continue to innovate; * Globalization is picking up speed and the world's economy is increasingly interdependent, so internationally minded FSIs need to adopt a genuinely multidirectional approach; and * As information technology budgets have become more constrained, FSIs must consolidate and rationalize technology resources to free up investment capacity for vital projects.

Connecticut governor notes CUs food program support

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MERIDEN, Conn. (10/23/08)--The Connecticut Credit Union Charitable Foundation and Connecticut credit unions, donated more than $58,700 to the Connecticut Governor’s Care and Share Program, which aims to provide $100,000 to Hartford FoodShare and the Connecticut Food Bank. The food banks held an acceptance ceremony at Hartford’s Bloomfield warehouse facility Friday. Nearly 45 individuals attended, including representatives of the food banks, the governor’s office, the media and credit unions.
From left, Gloria J. McAdam, president/CEO, FoodShare; Nancy L. Carrington, executive director, Connecticut Food Bank; Kelly R. Fuhlbrigge, vice president, government relations, Credit Union League of Connecticut; Connecticut Gov. M. Jodi Rell; Anthony L. Emerson, league president/CEO; Robert L. Aresti, president/CEO, 360 FCU, Windsor Locks; Francis R. N. Proto, president/CEO, Dutch Point CU, Wethersfield; and Mary Ann Pollaro, executive director, Connecticut Credit Union Charitable Foundation. (Photo provided by the Credit Union League of Connecticut)
Connecticut Gov. M. Jodi Rell, who designated state funds of $25,000 to each food bank to kick off the program, thanked the contributors for helping surpass the $150,000 goal. Rell singled out the foundation, which contributed $50,000, and credit unions, whose contribution exceeded $8,600, as first to meet the challenge that she initiated back in August 2008. “Credit unions are traditionally touted as ‘people helping people,’” Anthony L. Emerson, president/CEO of the Credit Union League of Connecticut, said in addressing the group. “As financial institutions, we have had a unique insight and understanding as to how hard-hitting our current economy is to families, and we recognize the many challenges all are facing now and will continue to face over the winter and beyond,” he said. Fourteen credit unions contributed to the program.