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Spotlight stays on CUs as alternative to banks

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MADISON, Wis. (10/25/11)--U.S. consumers continue to seek out credit unions as an  alternative to numerous and high fees at banks, according to media nationwide.

"'Move Your Money' was good for credit unions, there's no question. But this seems to be a more visceral reaction this time," said Bill Cheney, president/CEO of the Credit Union National Association. "People aren't just doing it because they like credit unions, they're doing it because they're mad at their bank" (Associated Press Oct. 21).

An increasing number of customers are angry at big banks because of new debit card-use fees, increasing ATM surcharges and more checking account fees, the AP said.

Some examples of credit unions and the credit union movement highlighted in the media include:

  • BethPage (N.Y.) FCU, located on Long Island, N.Y., is offering new members a guaranteed "fee free" checking  account for life  (The New York Times Oct. 20). Members opening a BethPage Bonus checking account can be certain of a lifetime of no monthly maintenance fees, no debit card fees, no transaction fees and no fee charges by the credit union for use of other financial institutions'  ATMs. Also, BethPage will not charge any fees for online mobile or telephone  banking.
  • Consumers should switch to credit unions and community banks in protest of actions of large banks, said The Christian Science Monitor (Oct. 21). "Bank of America's $5 per month debit-card fee is just the tip of the iceberg," the Monitor said. Big banks are starting to charge fees for what used to be basic services. In protest, switch to a community bank or credit union. It's more convenient than camping out with the Occupy Wall Street Protestors."
  • Rogue FCU in Medford, Ore., has had its seven operating branches open 1,000 new accounts from Sept. 1 to Oct. 15--roughly 300 more than it normally would see in that period, Gene Pelham, Rogue president said (Mail Tribune Oct. 22). Local demonstrations related to the Occupy Wall Street protest has had a definite role in the increased business the credit union has seen, Pelham added.

NCUF seeks nominations for 3 board seats

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MADISON, Wis. (10/25/11)--The National Credit Union Foundation (NCUF) is currently seeking nominations for three board seats. The nominations are for an open credit union executive or director seat, a system affiliate seat, and the at-large seat. Volunteers serve up to three three-year terms on the NCUF Board as long as they are re-nominated by the NCUF Governance and Nominations Committee and re-elected by the NCUF Board. 

The qualifications for the three NCUF board seats are:

  • Credit union executive or director--Each candidate must be an executive officer or director of a credit union.
  • System affiliate--Each must be and remain a director or executive officer of an organization that is national in scope, that has as its primary purpose support of credit unions or some element of the credit union movement, that has a significant portion of its ownership or membership from the credit union system and that has demonstrated a commitment to the purposes of this corporation. For example, CUNA Mutual Group would be considered as a system affiliate.
  • At-large--Must be and remain a representative of an organization outside of the credit union system, such as a cooperative, that has demonstrated a commitment to the purposes of this corporation. The individual elected to this seat shall be appointed for a one- to three-year term, as determined by the board of directors at the time of the representative's election to the Board, and shall not be eligible to serve on the executive committee of the foundation.
There are currently two incumbents in the system affiliate and at-large seats up for election:

  • Christopher Roe, senior vice president, corporate and legislative affairs of CUNA Mutual Group in Madison, Wis.  is completing his first three-year term on the NCUF Board; and
  • John Gregoire, president of The ProCon Group in Madison, Wis. is completing his second three-year term on the NCUF Board.
 

Both Roe and Gregoire have expressed interest in serving another term. The credit union executive or director seat is vacant as Allan Kemp McMorris, president/CEO of Oakland County CU in Waterford, Mich. is fulfilling his last term on the board.

Qualified candidates interested in applying for the NCUF board seats can click "Volunteer for our Board" from the NCUF homepage for the declaration of candidacy document.

Applications must be received by Oct. 28. NCUF's Governance and Nominations Committee will review all candidates and recommend a slate of nominees to the NCUF Board. The NCUF Board will vote on the nominees in December. In January, NCUF's Board will elect its table officers at their organizational meeting.

This will mark the first of three face-to-face meetings planned for 2012:

  • Organizational Meeting: Jan. 24 in Phoenix, Ariz.;
  • Spring/Summer Meeting: May 17 in Raleigh, N.C.
  • Fall Board Meeting: September in Washington, D.C.  
The 13 voting seats on the NCUF Board include representatives of national person credit unions, national organizations serving credit unions, corporate credit unions, state credit union foundations, state leagues and an at-large position.

CU System Briefs (10/24/2011)

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REDWOOD SHORES, Calif. (10/25/11)--Two credit unions were featured prominently in a Wall Street Journal sidebar on consumer lending. Provident CU in Redwood City, Calif., has seen too few of it 95,000 members wanting to borrow money, and too many members making extra  payments on mortgages, car loans and personal loans (The Wall Street Journal Oct. 21). So the credit union decided to take steps to stimulate demand it wasn't seeing from its existing membership. To attract more borrowers, the $1.62 billion asset credit union recently expanded it mailing of pre-approved car loan offers to nonmembers who live near one of its 18 branches. Provident's mortgage deals include a fixed-rate loan that can be paid off in 10 years. Also loan-financing terms were improved for installation of solar energy systems. Citizens Equity First CU in Peoria, Ill., with $4.63 billion in assets, offers its members new-car loans with a low interest rate of 2.4% and promises to cover paperwork costs when a borrower refinances a car loan originated by another lender  …

N.C. CUs bone up on CU principles and philosophy

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RALEIGH, N.C. (10/25/11)--More than 40 North Carolina credit union representatives gathered in Winston-Salem last week for the 2011 Principles & Philosophy Conference.

The event offered credit union leaders an opportunity to learn and more fully understand the strengths of the cooperative business model.

The day's events began Tuesday afternoon with a scavenger hunt that  built around questions on the Seven Cooperative Principles of Credit Unions. "It was a fun way for people to get to know one another better, learn their way around the property and test their basic knowledge of the Seven Cooperative Principles," said Jeff Hardin, North Carolina Credit Union League director of communications.

The Seven Cooperative Principles of Credit Unions are:

  1. Voluntary membership;
  2. Democratic member control;            
  3. Members' economic participation;
  4. Autonomy and independence;
  5. Education, training and information;
  6. Cooperation among cooperatives; and
  7. Concern for community.
 

Conference attendees later learned about the history of the cooperative and credit union movements. Matt Davis, Filene Research Institute Director of Innovation, focused on the worldwide cooperative and credit union movements. Leigh Brady, senior vice president of education at State Employee's CU, Raleigh, N.C. explored the history of credit unions in N.C. Both Davis and Brady asked the audience to consider how modern credit unions were living up to the values they were founded upon.

On Wednesday, attendees learned more about the financial services world of the past and shared their perspectives on how the founding principles of credit union are still relevant in a fast-changing world of financial services. The discussions took place in a variety of formats geared to stimulate conversation and learning.

Larry Blanchard and Lois Kitsch, the conference facilitators, kicked off the day with an in-depth look at the seven cooperative principles. Individual table groups then took one principle and discussed how relevant it is today and how attendees see it at work in their credit unions. The exercise concluded with a discussion by the entire group around each principle.

The agenda took a turn in the road--literally--with an exercise called the Learning Map. The exercise consists of a large map that dynamically illustrates the financial services world of the past, present and future. "It's like the game of Life for financial services," said Amy Gravitte, the chairwoman of the conference. "Everyone got a look at the financial services world credit unions used to operate in, see the changes that have brought us to today, and consider the emerging players in the financial services marketplace."

Through the exercise, groups see and discuss the various changes and then conclude by considering how the founding principles of credit unions can help credit unions thrive in the future. 

The afternoon session concluded with a skill-building exercise called an elevator speech, which asks attendees to consider what they do at their credit union and how to share that information with others. Facilitated by Gravitte, the elevator speech allowed attendees to develop a short, conversational introduction about their job presented in a way that encourages others to ask questions to stimulate a wider discussion.

The conference wrapped up Thursday morning with a look at projects participants developed in their communities that are an extension of the seven Cooperative principles. Brandon McAdams and Patrick Livingston of Coastal FCU, Raleigh, N.C., shared their experiences in the year since they attended the first-ever Principles & Philosophy Conference in 2010. The duo both attended the conference last fall, then the Credit Union Development Education program in Madison, Wis., this spring. Livingston and McAdams shared how both these events inspired them to start the CU Aware networking group in the North Carolina's Research Triangle, and the ways in which they had met and learned from countless other credit union staff along the way.

The conference concluded with attendees developing an action plan for how they would begin a principles-related project at their credit union.

SECUs overdraft protection efforts save member millions

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RALEIGH, N.C. (10/25/11)--North Carolina State Employees' Credit Union (SECU) is continuing its overdraft protection efforts with one goal--help members avoid "the bounce," completely whenever possible. With more than 700,000 members using the traditional service, SECU said it felt more could be done to help offset overdraft costs and began ramping up its overdraft mitigation efforts in January 2010, with the introduction of NSF Fee Free Days.

The credit union followed with the rollout of Cash Points Global--a controlled spending account/card, then text alerts, end-of-day 5:30 pm cutoff, Another Chance, and Overdraft Fee Free Days.  Whether one service provides a complement to another or stands alone, these initiatives have resulted in cost savings for many of SECU's 800,000-plus checking account holders.

The $21 billion asset, Raleigh, N.C-based SECU has long offered a traditional overdraft protection program, in which a member's checking account is protected by funds in up to two other SECU accounts.

SECU introduced NSF Fee Free Days in early 2010, waiving $12 NSF fees on two days each year.  Regardless of the number of items marked as NSF on the two days, SECU will return the items to the payee but waive the member's NSF fees, helping to ease the financial burden related to such items.

The beginning of 2011 saw the implementation of a similarly designed program, also waiving fees on overdraft transfers for two days each year.  Since their inceptions, the combined programs have saved members nearly $10 million, SECU said. Along with the waiver programs, SECU enhanced its systems to automatically initiate electronic alerts to members of potential "red flags" on their checking accounts, with 2.1 million alerts helping members track their accounts in the current year.

Migrating to a 5:30 p.m. end-of-day cutoff prepared the organization for "Another Chance"-- a program designed to notify members when a check is attempting to post with insufficient funds in place. This early morning notification allows members "another chance" to make a deposit by 5:30 p.m. to avoid potential NSF fees.

For those who desire traditional checking services in a non-traditional manner, the Cash Point Global (CPG) controlled spending account/card takes overdraft prevention a step further.  With no checks, no paper statements and transactions limited to available funds in the account, there is no risk of overdraft or NSF fees, SECU said.

CUs continue to mark ICU Day

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MADISON, Wis. (10/25/11)--Credit unions nationwide celebrated the credit union difference on International Credit Union Day, Oct. 20.

Credit unions nationwide celebrated the people helping people philosophy on International Credit Union Day, Oct. 20. Desert Valleys FCU, Ridgecrest, Calif., joined forces with a local animal shelter to help find new homes for pets and also collecting donations the shelter. (Photo provided by Desert Valleys FCU)
ICU Day is celebrated the third Thursday in October every year.

Credit unions celebrating ICU Day included:

  • Pennsylvania State Employees CU, Harrisburg, Pa., celebrated ICU Day by encouraging more consumers to join the credit union movement. The credit union sent an e-mail and video message from PSECU President Greg Smith to its members, explaining the PSECU difference and encouraging family and friends to move their accounts from large national banks to a credit union. To complement the message, PSECU will be employing a comprehensive strategy to get the message out to the general public. Components of the strategy include utilizing social media outlets, print and radio advertisements, a switch kit for consumers wishing to move their accounts, and extended hours on Bank Transfer Day Nov. 5 for the call center and branch locations.
  • Desert Valleys FCU, Ridgecrest, Calif., supported the Indian Wells Valley Humane Society and Ridgecrest Animal Shelter. The credit union collected donations, dog and cat food, animal treats, and monetary contributions to support the local animal rescue shelter.
  • First Capital FCU, York, Pa, celebrated International Credit Union Day with a Member Benefit Day.  Six vendors--Liberty Mutual, CUNA Mutual Group, Enterprise Car Sales, Sprint, Genworth Financial and Bailey Travel--were represented at the credit unions main office to tout the discounts or benefits they provide to members.
  • Employees at Western New York FCU, West Seneca, N.Y., paid $5 to wear jeans on ICU Day, with money going to the local West Sencea Food Pantry, Also the proceeds of a 50/50 split raffle proceeds went to the pantry.

Lakeview CU slowed by MBL cap

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NEENAH, Wis. (10/25/11)--Lakeview CU was spotlighted for its member business lending (MBL) efforts in an Oshkosh Northwestern newspaper article, but the story also noted how the MBL cap hinders the Neenah, Wis.-based credit union's efforts to help more small business members.

"Every time Lakeview Credit Union CEO Pat Lowney authorizes a business loan, he makes money for someone else," the article opens.

It goes on to explain, "For several years, Lakeview has been limited by a federal law that caps credit union business lending to 12.25% of its total assets. So when a Lakeview member requests a business loan, Lowney said he has to find another credit union willing to purchase the majority of the loan from the Neenah-based credit union."

Selling the loan slows the lending process down dramatically, Lowney told the paper.

The article describes the nationwide efforts of credit unions to champion federal legislation that would increase the to 27.5% of total assets to bolster small business lending and job creation.

Raising the cap up to 27.5% would open up $405 million in new lending capability for Wisconsin credit unions, Brett Thompson, Wisconsin Credit Union League CEO told the Northwestern.

Thompson said the decline in commercial lending by banks since the recession has left a gap credit unions can fill.

"There are members of credit unions coming in and asking them to make loans because they're not finding other alternatives available to them in the banking community," Thompson told the paper. "There is a need out there and it's not being met."

The Credit Union National Association (CUNA) and credit unions are urging the U.S. 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.

CUs look good in IUSA TODAYsI fees comparison with banks

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NEW YORK (10/24/11)--USA TODAY's attempt to compare fees at the 10 largest credit unions and 10 largest banks showed credit unions to the advantage, with most credit unions charging no fees or fees significantly lower than banks, reported the newspaper Friday.

"Credit unions fared better than banks," the nationwide newspaper said, which pointed out that the "hullabaloo about Bank of America's decision to charge customers a monthly debit card fee has prompted many consumers to take a hard look at the cost of their bank accounts." It noted that  identifying and comparing fees on banking websites is difficult and often takes a little digging.

The newspaper analyzed the cost of opening a basic checking account at the 10 largest credit unions and 10 largest banks, and featured a large chart outlining each institution's lowest-cost account, minimum amount needed to open an account, the monthly fee, early closure fees, ATM fees outside their network, whether they waived out-of-network ATM fees, and their debit card fee.

Three of the banks charge a debit card fee: BofA charges $5; Wells Fargo charges $3 and SunTrust charges $5. Other banks charged none, and all the credit unions charged no debit card fees. Eight of the banks, compared to four of the credit unions charged a minimum to open an account. All banks charged fees for using an ATM outside the institution's network and fees ranted from $2 to $2.50 per transaction.  Several of the large credit unions did not charge that fee, and most of those that did charged $1.

To view the chart, use the link.

ITIME API No fees here not for a lifetime says CU

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NEW YORK (10/24/11)--A number of credit unions are touting their no-fees policies for debit cards, but Bethpage (N.Y.) FCU's lifetime no-fee guarantee has stepped up the game and attracted attention from TIME,  The New York Times blog and Associated Press.

Bethpage announced Wednesday that it will not charge checking account-related fees including fees on debit card transactions, maintenance fees, minimum balance fees, and no fees for foreign ATMs for new member checking accounts. Its new Bonus Checking Always Free, No Fee Guarantee also includes free checking, online banking, mobile banking and telephone banking for the life of a new member's checking account.

Members also earn 1% annual percentage yield interest on the account balance by using direct deposit, having free online banking with eStatements and making 15 point-of-sale debit card transactions each month.

In the past three weeks, since Bank of America's announcement that it will charge $5 a month for debit card use, Bethpage has opened 1,500 new checking accounts--double its customary amount for a three-week period.  Since it launched its free checking product in June 2010, it saw a 17% increase in new member households opening checking accounts from the year before.

"We are seeing significant, fundamental changes taking place in the banking industry that are transforming the way people do their banking," said Kirk Kordelski, Bethpage FCU president/CEO, in a press release.. "These changes, coupled with consumers' overall discontent in the financial arena, are creating positive awareness about the advantages of banking at a credit union."

Kordelski noted that "Bethpage is a trustworthy alternative to the big banks and consumers should not be charged a fee to access their own hard-earned money."

Hei told Associated Press (Oct. 21) that "People are literally walking into branches and cutting up their Bank of America cards."

The article compares the movement to switch to the 2010 "Move Your Money" project started by The Huffington Post.

However, Credit Union National Association President/CEO Bill Cheney sees a difference between that movement and the current Bank Transfer Day movement. "'Move Your Money' was good for credit unions, there's no question," Cheney told Associated Press. "But this seems to be a more visceral reaction this time. People aren't just doing it because they like credit unions; they're doing it because they're mad at their bank."

In other credit union efforts,  Freedom CU in Warminster, Pa., announced Friday that while banks charge $5 in monthly fees to use a debit card, the credit union will pay, for one year, $5 to members making a purchase with their debit card. Members can earn up to $60 when they switch to Freedom's Free Interest Checking Account.  "Freedom has always offered convenient free checking with interest. Freedom's debit card is free to use, and will remain that way," said Lee T. MacMinn, Freedom's president/CEO.

Freedom also has a "It Pays to Switch" Debit Card campaign highlighting the card's benefits. The campaign includes billboards in and around Philadelphia, direct mail, search engine ads, and larger-scale social media updates on Facebook and Twitter.

According to TIME columnist Brad Tuttle, "credit unions understand that the absence of fees helps them woo customers away from the big fee-crazed banks." Also, "smaller players will do everything they can to avoid adding fees to keep a competitive advantage."

So how can Bethpage start offering services for free? "As The New York Times blog reports: It already wasn't charging most of those fees anyway. For that matter, many other credit unions and small banks don't charge for most of those services either," the TIME columnist said.

CUNA helps IChicago TribI sort out banking champs

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CHICAGO (10/24/11)--The Credit Union National Association (CUNA) helped Chicago Tribune columnist Gregory Karp choose the "champs" in a contest between big banks against credit unions and other smaller institutions.

Karp turned to Mike Schenk, CUNA vice president of economics and statistics, as well as a senior financial analyst at Bankrate.com, a financial editor at Consumer Reports, and a personal finance analyst for MoneyRates.com to provide information to help him judge the champs in nine banking areas.

Noting that the Occupy Wall Street movement has "renewed sour feelings toward big financial institutions that were deemed too big to fail" and that "received bailout loans from Joe and Jane taxpayer," Karp wrote that "small banks, online banks and credit unions are taking the opportunity to put up their dukes and take a few swings at megabanks while they're still punchy from the bad publicity."

Here's how he called the game.

  1. Fees.  "This is an early knockdown and a round won by small banks, online banks and credit unions.  Three-quarters of large credit unions offered free checking accounts, with no strings attached. Just 45% of banks did. Karp reported.
  1.  ATM access. Big banks have an advantage, "but smaller competitors today are able to join ATM networks that allow customers to use a variety of teller machines without charge."
  1. Branch networks. Some credit unions have sharing agreements, but big banks have nationwide networks.
  1. Customer service. Credit unions are especially known for personal service--"a huge comeback round for the little guys."
  1.  Ownership.  "Nonprofit credit unions, specifically, win this round." Karp pointed consumers to asmarterchoice.org to find out how to join a credit union. Schenk noted that credit unions "take what the stockholders would have gotten and then give it back to our members (in the form of consumer friendly products and services)".
  1. Financial products.  Credit unions and smaller banks have expanded their lines but a large bank may offer more options.
  1. Technology. Having advanced offerings such as mobile banking and person-to-person payments are "largely the domain of large banks" although credit unions and small banks offer online account access and perhaps electronic bill paying.
  1. Rates. Credit unions and smaller institutions pay higher rates on savings and offer lower-rate loans. But compare rates.
  1. Safety. This is a draw because both bank and credit union deposits have federal insurance up to $250,000.
 

Karp advises that "if you're angry about fees and bailouts, or you like personalized service and generally better rates, seek out a community bank or credit union." For technology, breadth of products and convenient ATM/branches, a bigger bank might be better.

The article also appeared on WGNradio.com. To access the full article, use the link.

IChicago TribuneI CUNA urges discipline in holding spending

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CHICAGO (10/24/11)--As the holiday shopping season swings into full gear, consumers should use discipline when they go to stores to save time and money, urged a Credit Union National Association (CUNA) economist in the Chicago Tribune.

"Even a mental budget is better than nothing," Mike Schenk, CUNA vice president of economics and statistics, told the newspaper Friday. "The main thing is to use some discipline, so you don't go into debt over the holidays. Limit your use of credit cards. If you do use those cards, make a plan to pay off expensive credit card debt as quickly as possible.

Holiday sales will grow 2.8% this year--down from a 5.2% increase last year, according to the National Retail Federation. More than 80% of U.S. credit unions offer interest-bearing holiday savings accounts, a fairly easy way to stockpile cash during the year, Schenk told the Tribune. Credit union savings accounts usually pay more than banks because credit unions are nonprofit groups, he added.

Consumers should make sure to understand how their savings plan works and also should shop around to obtain the best interest rate, Schenk said.

"At one point, I had a holiday account that automatically closed and put the money in my checking account in November," Schenk told the paper. "While they did this for my convenience, I hadn't noticed what happened, and I spent the money on other things."

To read the article, use the link.