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Redwood Teams With Community Group On $1M In Microloans

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SANTA ROSA, Calif. (10/3/13)--Redwood CU, based in Santa Rosa, Calif., has entered a strategic partnership with Community Action Partnership (CAP) Sonoma to help fuel the business economy in Sonoma County by offering up to $1 million in loans to microbusinesses and startups.
 
The microbusiness loans are the newest addition to the more than $2.2 billion asset credit union's small business and consumer loan programs.
 
In the partnership, RCU has committed up to $1 million in loan financing to graduates of CAP Sonoma's microbusiness development program to support growth and expansion of microbusinesses in the community.  The microbusiness development program has graduated 30 people since its inception.  CAP Sonoma provides financial education designed for small business owners and individuals who seek to start or currently own microbusinesses.
 
"RCU recognizes small and microbusinesses often have difficulty in obtaining the financing needed to initiate a business or expand," said Anne Benjamin, RCU's chief operating officer and executive vice president. "RCU is committed to our community and we believe funding the growth of microbusinesses is a positive way to impact these businesses as well as the economic growth and vitality of our county," she added.
 
CAP Sonoma's program includes 15 classes offered in both English and Spanish and is based on an enhanced NxLevel curriculum in which graduates must achieve at least 80% or greater on the final exam, have 80% attendance or greater, and have developed a business plan. CAP Sonoma added personal financial literacy and business financing readiness modules to augment the existing NxLevel curriculum.
 
The personal financial literacy course is based on the Federal Deposit Insurance Corp.'s MoneySmart curriculum. CAP Sonoma has offered financial literacy classes since 2004, and has graduated over 200 students from its personal finance program.
 
The program's graduates are owners or entrepreneurs of a variety of businesses, including a landscaping company, cleaning services, a palette recycling company, bakeries and a wholesale clothing outlet.

"As part of our program, we help our students draft a business plan, secure a mentorship with an existing business owner, and prepare them to meet with a loan officer," said Lannie Medina, chief development officer of CAP Sonoma. "RCU's extensive commitment to the success of the microloan program and our community overall has been inspirational and motivating," said Medina.

Credit unions have been urging Congress to lift their member business lending cap to 27.5% of assets from 12.25% so credit unions can make more MBLs.  Lifting the cap would help create 140,000 new jobs and inject $13 billion in small business loans into the economy, without costing taxpayers a dime, said the Credit Union National Association.

Shutdown Showcases CUs' Best Efforts Helping Members

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MADISON, Wis. (10/3/13)--The federal government's partial shutdown is showcasing credit unions' best efforts to help members who will bear the financial brunt of  the shutdown, and the media are fast picking up on that fact. News reporters have told the Credit Union National Association they are impressed with how much faster credit unions have stepped up to the plate to assist members through the shutdown than banks have.
 
One tweet, from Generations FCU in San Antonio, says it all: "pr_gfcu: We don't need a #governmentshutdown to help our members. ANYTIME you need help, call your #creditunions @CUNA @Cornerstone_CUL.
 
Dozens of credit unions have indicated they are offering assistance to federal employees. Some are using Twitter and Facebook to inform members of their shutdown assistance. For example: "Cornerstone CUL: Dallas CU on gov't shutdown, 'Our members are essential to us, so we'll be there for them during uncertain times.' goo.gl/ios6aB." And FAA CU, Oklahoma City, Okla. tweeted: "@FAACreditUnion: We are offering assistance to government employees being impacted by the shutdown. Learn more at http://t.co/uqF9g8tQVa."
 
Belvoir FCU, a $317.9 million asset credit union in Woodbridge, Va., has traditionally been in the forefront in an area dominated by $1 billion + asset credit unions in taking action to help members, said Jason Lindstrom, Belvoir's chief marketing officer. "We have a military/Department of Defense contractor field of membership and are always actively trying to assist our membership when issues like this arise," he said.
 
Belvoir has a dedicated page on its website with information about how it will help members through furloughs. It offers an emergency loan of up to $5,000 at a fixed-rate of 4.99% annual percentage rate (APR) but at 0% for the first 60 days. The maximum term is 12 months and members can defer their first payment for 60 days.  Members also can meet with a loan officer to determine whether a loan workout program will ease the financial hardship.  It also allows the member to skip a regular consumer loan payment at no charge, and members can withdraw money early from their share certificates to weather the shutdown without a penalty.
 
Most credit unions with shutdown assistance provide the same types of services as Belvoir, with a variety of emergency loans with extra low or 0% rates and payment deferral; payroll replacement/advance assistance (temporary loans that replace the furloughed employee's salary); Skip-a-Payment programs; penalty-free share certificate withdrawals; and financial counseling or workout loans.

Others who have stepped up to the plate include:
  • Global CU, Spokane, Wash., which has $357 million in assets and serves members at Fairchild Air Force Base. "Our roots run deep with our military members," President/CEO Jack Fallis told the Northwest Credit Union Association (Anthem Oct. 1).  "If they do experience furloughs, we want to give them time and assistance to adjust. We've always been here for our members, and we are here now to help them through if they need us."
  • Scott CU, Edwardsville, Ill., an $930 million asset credit union that offers, among other assistance, the opportunity to borrow 100% of the member's most recent net two-week pay.  "We are hopeful that this will get resolved quickly," said President/CEO Frank Padak. "We really want to help them cover the next paycheck or two and then pay it back over the next six months as they work to get caught up."
  • Travis CU, Vacaville, Calif., which has $2.1 billion assets and "is once again prepared to provide support to all active duty and retired military as well as federal employees" impacted by the shutdowns "by offering extensions on loans, debt counseling, budgeting seminars and 0% interest loans." It also has met with the leadership of Travis Air Force Base and advised officials there of its services.
  • Tyndall FCU, Panama City, Fla., which told members, "We understand that the government shutdown and resulting furloughs will have a significant financial impact on many of our members, and we are committed to doing what we can to serve you by anticipating and responding to your needs."  The $1.13 billion asset credit union offers loan options, Skip-a-Payment, one-on-one assistance, credit cards or increases in credit limits, lines of credit, share-secured loans, checking account overdraft coverage and free budgeting software.
  • VyStar CU, Jacksonville, Fla., which says "Our No. 1 concern is our members and their families" It has programs to help with the uncertainty of a shutdown. The $4.9 billion asset credit union processed Oct. 1 direct deposits normally, will cover the Oct. 15 payroll for active duty members with direct deposit; and is offering emergency loans, pay and save loans, expedited line increases on current line of credit loans, and signature loans.  It also offers loan deferral assistance, expedited approval for credit cards, and penalty-free certificates withdrawals.
Other credit unions with similar programs include: Ent FCU, Colorado Springs, Colo.; EvergreenDIRECT CU, Olympia, Wash.; US Agencies CU, Portland, Ore.; Department of the Interior FCU, Washington, D.C.; and Meritrust CU and TECU CU, both of Wichita, Kan.  News Now reported 14 other credit unions with similar programs in two related stories, CUs Offering Help To Furloughed Fed Employees and CUs In Place To Assist Federal Employees.
 
Many view these programs as exceptional service.  Others view the services they offer as "business as usual."
 
"Our normal course of business includes working with our members by providing services like short-term income interruption loan when unusual events happen," said Lisette Comai-Legrant, assistant vice president of operations at First Alliance CU, a $138 million asset credit union in Rochester, Minn. "We help our members review their finances and determine what kinds of services they need to help them get through a rough patch," she told the Minnesota Credit Union Network.
 
Topline FCU, Maple Grove, Minn. echoed that. The $340 million asset credit union "stands ready to help any member affected by the government shutdown, just as we would help any member at any time who finds themselves with unexpected challenges in their lives," said Harry Carter, president/CEO.
 
And in case anyone misses the message, Jim Morrell, president/CEO of Peninsula Community CU, a $149 million asset credit union in Shelton, Wash.--which also offers online financial assessments and money-management classes--says it loud and clear. "If a member raises concerns about how they are going to manage their money," he told his employees, "please reiterate our mission:  We listen, we serve, we educate, we care...Always."
 
These programs are examples of fostering service excellence and building awareness of the value of credit unions to members and their community, chief tenets of the Credit Union National Association's and state leagues' Unite for Good campaign that is working to achieve the goal where Americans choosing credit unions as their best financial partner.  Use the links for more information.

Indiana League Elects Two Directors, Officers

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INDIANAPOLIS (10/3/13)--Two newly elected members of the board of directors of the Indiana Credit Union League began their terms, and table officers were elected at the league's reorganization meeting on Sept. 27.
 
The meeting was held during the League's annual meeting and convention.

New directors Dallas Bergl, president/CEO of INOVA FCU in Elkhart, and Karla Salisbury, president/CEO of KEMBA CU in Indianapolis, were each elected to three-year terms on the board.

Table officers are:
  • Chairman: Dave Fleming, Union Baptist Church FCU, Fort Wayne;
  • Vice chairman: Doug True, FORUM CU, Fishers;
  • Board secretary: Matt Lambert, Encompass FCU, Tipton; and
  • Treasurer: Chuck Donovan, Members Source CU, Merrillville.
Also serving on the board are:
  • Lori Gonzalez, Members Choice FCU, Bloomington;
  • Frank Gulley, Afena FCU, Marion; and
  • George McNichols, Hoosier Hills CU, Bedford.

Align Strategy, Culture, Leadership For CU Success

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MADISON, Wis. (10/3/13)--If the competitive nature of today's financial marketplace is making it necessary for credit unions to switch their business strategy, it would behoove them to make certain their culture and leadership are tooled to drive that strategy, keynote speaker John Lass, CUNA Mutual Group senior vice president of strategy and business development, told participants of CUNA Mutual's Online Discovery Conference on Tuesday.
 
"Many credit unions are at an inflection point due to market changes, and they need to revisit their strategy," Lass said. "If you're at that point, you need alignment among your strategy, culture and leadership teams.
 
"Forces within the financial services arena are driving businesses to change their strategies, and credit unions are no exception," Lass said in his presentation, titled "The Power of Three: Leadership + Culture + Strategy."
 
"Think about the number of retailers, payment providers, platform players, the new regulations that you're having to deal with and all of the new channels you have to manage and master," Lass said. "For those reasons and more, many credit unions are at a strategic inflection point--the decisions you make today will dictate if your business goes on to new heights, or declines."
 
The strategies credit unions employ to avoid a decline may range from being a product or pricing leader to being exceptional at customer service. Whatever strategic road they go down, it's vitally important for credit unions to look at their culture and leadership team and determine whether they are tooled culturally, and from a leadership perspective to reach the level of success desired, Lass said. 
 
"Externally, you need to look at where your customers are and where you need to go," Lass said. "But internally, each leader has his or her style and strengths. The right leader has to be in place to execute your strategy. It's not about changing who the leadership is; it's building a leadership team and culture that aligns well together."
 
Online Discovery is CUNA Mutual Group's Web-based equivalent of a face-to-face conference without the associated expenses or time away from the office.

CUNA Mutual Expects Broader Reg Focus In 2014

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MADISON, Wis. (10/3/13)--Credit union compliance staff need to be aware of the Consumer Financial Protection Bureau's (CFPB) quickly approaching deadlines as 2013 concludes, attendees of CUNA Mutual Group's fourth annual Online Discovery Conference were told by the company's Lauren Capitini and Jon Bundy.
 
"A look at the CFPB's semiannual regulatory agenda indicates the agency is moving full speed ahead on additional rulemaking," said Bundy, CUNA Mutual regulatory compliance manager. "From this report, we're able to predict what credit union compliance officers can expect to hit their desks over the next six months."
 
"Right now, credit unions should be focused on implementing changes to comply with the CFPB's [seven] new mortgage rules issued in January," said Capitini, CUNA Mutual regulatory compliance manager, during her "Mortgage Myth Busters" session, which tackled myths about new mortgage regulations. "The mandatory compliance dates for most of these new rules are in January, so credit unions really need to be putting the pedal to the metal."
 
The CFPB continuously made updates to the seven new mortgage rules over the summer, and only recently finalized the rules. Final updates to the rules include:
  • Clarifying the flexibility available to credit unions when dealing with delinquent borrowers;
  • Finalizing the rule prohibiting the financing of credit insurance premiums for some types of mortgage loans; and
  • Changing the effective date for the loan originator compensation rule to Jan. 1, 2014.
Capitini reminded audience members that other rules outside of the mortgage arena are also quickly approaching, including new remittance transfer rules which go into effect Oct. 28.
 
Also, an additional mortgage rule to combine the mortgage disclosures under Regulation Z (TILA) and Regulation X (RESPA) is expected from the CFPB later this month, Capitini said. "This [additional] mortgage rule will completely revamp the disclosure requirements connected to the loan event, making the end of 2013 a busy time for mortgage lenders," said Capitini.
 
Bundy's session, "Lending Compliance Pipeline: What May Be Coming," focused on the CFPB's radar and looking ahead to 2014.
 
"We anticipate the CFPB will modernize deposit regulations by the end of 2013," said Bundy. "Members may not see much of a practical change from the new rules; however, credit unions will likely have to learn new time periods for funds availability and new model disclosures."
 
The CFPB could do so by finalizing revisions to Regulation CC, the Expedited Funds Availability Act's implementing regulation, to accommodate an all-electronic interbank check collection and return process by the end of 2013, Bundy explained.
 
"Looking ahead to 2014, credit unions can expect to see the CFPB expand its fair lending focus," said Bundy. "The CFPB's regulatory agenda unmistakably signals that fair lending will be a focal point of new rule making starting in 2014."
 
The start of this effort will be a hard look at the data-gathering requirements under the Home Mortgage Disclosure Act and will later expand into possible rules mandating the collection of credit application data for credit unions involved with business lending, Bundy said.
 
Other potential regulatory changes on the CFPB's radar include:
  • Possible revised disclosures for student loans and credit cards;
  • Payday lending and payday alternative loans; and
  • Overdraft protection.
Online Discovery is an annual conference sponsored by CUNA Mutual Group that attracts a national and international credit union audience of more than 1,300.

Awards Recognize Exceptional League Communications

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CHICAGO (10/3/13)--The Northwestern Credit Union Association captured the Best of Show in the 35th Pro and Blockbuster Awards at the American Association of Credit Union Leagues' Communicators Conference in Chicago last week.

Click to view larger image The South Carolina Credit Union League won a Blockbuster Award in the "Best Campaign" category for its 2012 annual meeting at the American Association of Credit Union Leagues' Communicators Conference in Chicago last week. Accepting the award is Courtney Jackson, director of communications for the league.
State credit union leagues submitted 69 entries for this year's awards in 17 categories. Three judges from outside of the credit union industry scored the award submissions. 

Pro Awards honor the best in league public relations and publications. Blockbuster Awards pay tribute to excellence in marketing and advertising.
 
Northwest Credit Union Association was honored as the Blockbuster Best of Show for its logo design. The league captured the Pro Best of Show for its piece on the uniqueness of credit unions.
 
Blockbuster first-place winners include:
  • Best Print Ad--Georgia Credit Union Affiliates, Helping People Afford Life;
  • Best Sales Promotion--Pennsylvania Credit Union Association, 2012 PCUA Annual Convention;
  • Best Print Materials--Maine Credit Union League, How CEOs Sleep at Night;
  • Best Campaign--South Carolina Credit Union League, 2012 Annual Meeting;
  • Best CU Ad Campaign--Maine Credit Union League, Now is the Time Statewide Campaign; and
  • Logo Design--Northwest Credit Union Association, "2012 Convention Logo.
Click to view larger image The Kansas Credit Union Association won a Pro Award in the "Best Community Relations Program" category for its Make a Difference event with its October 2012 Gas Giveaway. Accepting the award is Susan Dyer, director of communications for KCUA. (Photos provided by the American Association of Credit Union Leagues)
Pro Award first-place winners include:
  • Blow Your Own Horn--Mississippi Credit Union Association, MSCUA 75th Anniversary;
  • Best Community Relations Program--Kansas Credit Union Association, Make a Difference Event, October 2012 Gas Giveaway;
  • Best Public Relations Project, Michigan Credit Union League, CU Lunch Local;
  • Best League Piece on Uniqueness of CUs--Northwest Credit Union Association, CU Philosophy Manual & Quiz;
  • Best League Publication (Newsletter)-- Credit Union Association of the Dakotas, The Memo;
  • Best League Publication (Magazine)--Missouri Credit Union Association, Missouri Courier;
  • Most Improved Newsletter--Michigan Credit Union League, Monitor;
  • Best League Annual Report--League of Southeastern Credit Unions, 2011 Annual Report;
  • Website--Michigan Credit Union League, CUBE TV;
  • Online Publication--Michigan Credit Union League, CU National Update, and
  • Best Use of Social Media--Georgia Credit Union Affiliates, Credit YOUnion Facebook page.

Discovery Speaker: Predictive Analytics a Powerful Tool

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MADISON, Wis. (10/3/13)--More organizations across industries are using predictive analytics to determine consumer behavior and improve their success. Despite not having large analytic staffs, credit unions could benefit from using existing predictive analytics technologies to bolster their business and better serve members, a senior TruStage executive told an Online Discovery audience Tuesday.
 
The online conference was sponsored by CUNA Mutual Group. TruStage is CUNA Mutual Group's direct-to-consumer brand for insurance and investment products.
 
Simon Gao, vice president, TruStage consumer analytics, defined predictive analytics as a set of business intelligence technologies that uncover relationships and patterns within large volumes of data to predict future behavior and events.
 
"Do you ever wonder how Netflix has such great movie recommendations for you or how Target sends you just the right coupons? The answer is these companies, like many others, are predicting your behavior," Gao said.
 
Predictive analytics is forward-looking, using past events to anticipate the future. Existing data are modeled to help business leaders make decisions more accurately, objectively and economically. Although credit unions could potentially gather a plethora of member information, Gao suggested the following information might be useful for credit unions to initially collect and model:
  • Most popular services used by members;
  • Manner in which members are accessing your services--online, in-branch or at the ATM; and
  • Branch locations members are visiting and when.
Predictive analytics could help credit unions with marketing and risk management in particular, Gao said. "In marketing acquisition, targeted programs are still the best way to go," he added. "If your credit union is not doing individualized targeted marketing, you should investigate this approach."
 
Predictive analytics can help credit unions create targeted cross-sell and up-sell offers. "It helps identify the most effective contact strategy to reach members, and which products and services to offer to more effectively grow and retain members," Gao said.
 
The CUNA Mutual Group MemberCONNECT Program uses predictive analytics in the direct marketing of TruStage insurance to identify the best consumers to target. Factors built into its modeling include propensity to respond, likelihood of conversion, persistence and lifestyle factors. "We test various models to identify what message or combination of messages is the best for a particular segment of consumers, so the creative tests would identify winning approaches with the biggest impacts," Gao said.
 
Consumers also benefit from predictive analytics through the receipt of more relevant and targeted offers, better products and services, and cheaper prices through greater marketing efficiency.
 
Credit unions don't need large staffs to take advantage of existing predictive analytics technologies. "You may not be able to do the modeling in-house, but you can purchase vendor products, similar to those you use with FICO credit scores in loan underwriting," Gao said.
 
Most companies start by leveraging their existing analytics staff, who have the best knowledge of existing databases. Many predictive analytics consulting companies that can assist credit unions in getting set up.
 
Predictive analytics is not a fad, Gao said. "Organizations are already struggling with too much data. Predictive analytics is the most powerful solution to the 'too much data' problem, and it has proven to have an outstanding return on investment," he added.
 
Online Discovery is an annual virtual conference sponsored by CUNA Mutual Group that attracts a national and international credit union audience of more than 1,300.

Online Discovery Attendees Told Lending Opportunities Aplenty

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MADISON, Wis. (10/3/13)--Despite competitive and other challenges, forecasts of modest economic growth provide great opportunities for credit unions to add to their bottom line in a member friendly way, Dan Kaiser, CUNA Mutual Group senior vice president of lending told a an Online Discovery Conference audience Tuesday.
 
Although vehicle loans are driving a rebound on lending, a more favorable economic outlook affords many other lending opportunities for credit unions to meet members' needs, while generating non-interest income for the credit union, said Kaiser.
 
"We know membership is growing in response to banks' bad behavior, so credit unions that are smart and aggressive have opportunities to grow by capitalizing on the recovery," Kaiser said. "Being aggressive on recapturing vehicle or home equity loans are prime opportunities and credit unions need to make their own judgment on direct and indirect lending, but it's an option they shouldn't discount."
 
A pressing regulatory environment and competition from several platforms create challenges for credit unions, Kaiser said. "Retail banking is also seeing opportunities to grow in an improving economy," he added. "The credit union lending protection model is fairer and much more member-friendly than banks and is more apt to survive regulatory scrutiny."
 
Kaiser advised credit unions to move towards a sales culture. Having products that benefit members is a two-pronged benefit--to members and the credit union, but it requires educating members on the benefits of products.
 
"In addition to traditional borrowing opportunities, lifestyle and 'green' lending not only respond to members' changing priorities, they are more opportunities to meet members' needs," Kaiser added. He cited cosmetic surgery, weight loss and adoption as examples of lifestyle lending opportunities and electric vehicles, replacement windows and insulation as green lending examples.
 
Credit unions may not be serving the "sweet spot" of credit union membership if they don't provide mobile banking, Kaiser said. "It's easy to look at smartphone lending use as a Gen Y issue," he said. "Actually, 55% of the 45-to-54 age group have a smartphone. If you're not providing mobile banking, you're not even meeting needs of current members."
 
Online Discovery is a free annual conference sponsored by CUNA Mutual Group that attracts a national and international credit union audience of more than 1,300.

Ex-Kenyan Ambassador Joins World Council, Provides Updates On Employees Impacted By Terrorism

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MADISON, Wis. (10/3/13)--
Elkanah Odembo is World Council of Credit Unions' new vice president of the African region. (Photo provided by World Council of Credit Unions)
Elkanah Odembo, former ambassador of the Republic of Kenya to the U.S., has been named vice president of the African region for World Council of Credit Unions. One of his first acts was to provide updates about World Council employees in Kenya related to the Nairobi mall terrorist attack last week.
 
Odembo, who will be based in Nairobi, oversees World Council's strategic initiatives for its organizational members and the donor community in the region.
 
"World Council's member organizations throughout Africa face unique trends and key issues," said Brian Branch, World Council president/CEO. "We are privileged to have Elkanah's extensive experience in strategic leadership, advocacy and community development within the region."
 
From left, World Council of Credit Unions President/CEO Brian Branch meets with Elkanah Odembo during a reception at the Kenyan Embassy in Washington, D.C. (Photo provided by Larry Glatt)
Odembo has led a wide range of community development projects based in Africa. He most recently served as Kenya's ambassador to the U.S.  and previously to France. As ambassador, Odembo advocated on behalf of Kenya's credit unions, known as savings and credit cooperatives (SACCOs), for improved legislation. He supported the founding of the first Kenyan SACCO to serve the Kenyan diaspora in the U.S.
 
Odembo was also the founding director of Ufadhili Trust, a Nairobi-based organization that promotes philanthropy and the use of local resources for social development through corporate social responsibility, cross-sector partnerships, technical assistance and policy research. Prior to that, he served as a consultant to the Ford Foundation's Africa Philanthropy Initiative; the East Africa representative for the international non-governmental organization, World Neighbors; and as a research officer for the African Medical Research Foundation.
 
Odembo earned a master's degree in public health from the University of Texas. He holds a bachelor's degree in biology and sociology from Bowdoin College in Maine.
 
As to the recent terrorist attack at a popular mall in Nairobi, World Council confirmed that none of its employees stationed in Kenya were injured. However, almost all staff members were impacted by the tragedy that injured and took the lives of friends and family. Gunmen stormed the mall on Sept. 21, killing at least 67 people.
 
"Kenya has just been through a most challenging moment, and it is not over yet," said Odembo. "Through it all, however, Kenyans have demonstrated incredible resolve and goodwill. With World Council's help, we will continue working together to build an even stronger community that stretches beyond our country's borders."