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CU System Archive

CU System

Banks fees at all-time highs says new study

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NEW YORK (10/31/08)--Banks are taking it on the chin in Bankrate.com's latest fees survey, which concludes fees for ATM surcharges, checking account fees and monthly service fees are at all-time highs. Some fees have outpaced inflation, Bankrate.com told CNNMoney.com (Oct. 29). The 2008 Checking Study surveyed interest-bearing and noninterest-bearing accounts at 249 banks and thrifts in the largest 25 metro areas. The study found:
* ATM surcharges--the fee the ATM-owning bank charges to nonaccount holders--rose to $1.97, about 11% more than the $1.78 charged last year. The cost of using a foreign ATM was $1.46, up from last year's $1.25. That puts the total average cost of using an out-of-network ATM at $3.43 per transaction. Bounced-check fees rose 2.5% this year, to $28.95 per check. * In interest-bearing accounts, monthly service fees hit a new high of $11.97 on average. Minimum balance requirements also set a record with a minimum average of $3,461.84 required to keep an account at the bank open. * For noninterest-bearing accounts, the reverse was true. Monthly service fees for these accounts hit a new low--at $1.96 and their minimum balances were a low of $109.26 average balance required. * Online banks had higher average minimum requirements to open either an interest-bearing checking account or noninterest-bearing account than a brick-and-mortar bank. For interest-bearing accounts, online banks required an average $650.81, versus $376.75 at a traditional bank. For noninterest-bearing accounts, online banks required $133.33 while traditional banks required $82.71.
Credit union accounts are not included in the survey. The news comes at a time when banks are doing everything they can to make up revenue gaps from market exposures and rising credit costs stemming from lending, said Forbes.com (Oct. 27). Large banks are raising some account fees to record levels at a time when more consumers are struggling to pay bills, USA TODAY Oct. 30) noted.

September CU loans up savings down

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MADISON, Wis. (10/31/08)--Credit unions maintained a strong level of real estate lending in September, along with increased year-to-date loan growth compared with last year’s pace. However, flagging consumer confidence and fears of a prolonged recession likely will result in weak consumer lending in the fourth quarter, said a Credit Union National Association (CUNA) economist. Credit union loans outstanding increased 0.8% in September and 6.2% over the first nine months of 2008, compared with 4.9% during the same period last year, according to the CUNA monthly sample of credit unions.
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Home equity loans led growth (2.5%), followed by adjustable-rate mortgages (2.2%), fixed-rate first mortgages (1.1%), used-auto loans (0.9%), unsecured personal loans (0.5%) and new-auto loans (0.4%). Fixed-rate first mortgages and adjustable-rate mortgages had the highest year-to-date increases, 15.1% and 11.8%, respectively. “Credit unions continued to do well in real estate lending during the month of September,” Steve Rick, CUNA senior economist, told News Now. Fixed-rate first mortgage loan balances rose 1.1% in September and 3% for the third quarter. Year-to-date total loan growth came in at 6.2%, up from last year's 4.8% pace, Rick said. “Falling consumer confidence and expectations of a deep and prolonged recession will keep consumer lending weak in the fourth quarter,” he added. “However, with banks tightening their mortgage loan underwriting standards, credit union real estate lending will continue to dominate credit union loan portfolio growth.” Though credit union savings balances declined 0.9%, to $685 billion in September from $691 billion in August, they rose 5.1% for the first nine months of 2008.
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Individual retirement accounts increased 1.5%, while share drafts (7.3%), money market accounts (0.6%), regular shares (0.3%), and one-year certificates (0.4%) declined. With loan growth increasing and savings growth decreasing, the loan-to-savings ratio increased to 84.3% in September from 83% in August. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--decreased to 14.6% from 15.5% in August. Credit unions’ 60-plus-day delinquencies increased slightly to 1.1% from 1% in August. The movement’s overall capital-to-asset ratio remains at 11%, with the total dollar amount of capital at $90 billion. “The Bureau of Economic Analysis reported economic growth of negative 0.3% in the third quarter,” Rick said. “Consumer spending fell 3.1% on a seasonally adjusted annual rate.” Spending on durable goods--furniture, appliances, autos--fell by 14.1%. Credit union new-auto and credit card lending reflected the spending slowdown. Credit card balances rose only 2.3% in the third quarter, down from last year's third-quarter pace of 4.7%. New auto loans rose 0.5% versus last year's third-quarter pace of 1%, Rick added.

Iowa league PAC raises 200000

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DES MOINES, Iowa (10/31/08)--The Iowa Credit Union League’s state political action committee, the Credit Union Political Action Committee (CUPAC), will break its fundraising record for the second year in a row. This year, supporters have surpassed CUPAC’s goal of $200,000 by raising $213,297.21--with two months left to go. “It is particularly impressive since all our fundraising must come from individual contributions, as Iowa law doesn’t permit corporate contributions to political action committees,” said Justin Hupfer, league vice president of governmental affairs. “We anticipate this level of fundraising support will put CUPAC among the top three or four of more than 200 PACs in the state,” Hupfer added. CUPAC uses personal contributions to provide bipartisan support to state legislators who support credit unions. Its mission is to raise funds in compliance with state law to increase credit unions’ impact in the political process.

Diamond Awards 2009 entries due Jan. 12

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MADISON, Wis. (10/31/08)--Entries are now being accepted for the 2009 Diamond Awards, sponsored by the CUNA Marketing and Business Development Council. The awards feature 34 categories--ranging from advertising to youth marketing-- for the best in credit union marketing and business development across the country. Judges evaluate entries based on strategy, creative concept, design and production, copy and communication, and results. Entries must be received by 5 p.m. (CST) Jan. 12. Entries received by Jan. 6 will receive a discounted rate. For anyone entering the website marketing category, all entries must be received by Dec. 18. Judging will take place Jan. 21-23; winners will be notified via e-mail by Feb. 2. Awards will be presented at the 2009 CUNA Marketing and Business Development Council Conference March 11-14, in San Diego. Additional information and entry forms are available online (use the link). The site features a complimentary webinar for council members that provides tips on putting entries together. For questions about packaging an entry, call Credit Union National Association’s Bobbi Bischke, at 800-356-9655, ext. 4018, or e-mail bbischke@cuna.coop. For information pertaining to the award or award categories, contact Lesley Carrell, Fibre FCU, at 360-414-4204, or e-mail lcarrell@fibrecu.com.

Michigans largest CU gives 17 million dividend

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DEARBORN, Mich. (10/31/08)--DFCU Financial FCU’s board of directors approved a $17 million dividend to be distributed the first week of January. The dividend is the largest in the history of credit unions, according to DFCU Financial. The minimum dividend eligible members will receive is $50. During the past three years, members had received more than $50, which is a considerable amount considering the difficult economic climate in Michigan, said the $1.991 billion asset, Dearborn, Mich.-based credit union. The special patronage dividend is a way for DFCU Financial to thank members, said Mark Shobe, DFCU president/CEO. “For the past seven years, we’ve worked hard to become an efficient, healthy and well-capitalized credit union so that we are able to give back and help our members in many ways--more branches, investment advisory services, free budget and credit counseling, our no-payment/no-interest loans for workers and the special dividend,” Shobe said. Roughly 133,000 people--125,000 who are Michigan residents--are scheduled to receive the dividend.

Firefighter CUs form coalition

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ST. LOUIS (10/31/08)--Several firefighter credit unions nationwide formed a coalition at a summit in Coconut Grove, Fla., Oct. 15-18, to bring innovation and a shared vision. More than 180 firefighter credit union officials, spouses, guests and vendors participated in the seventh annual conference for credit unions serving the firefighter community. The Coalition of Firefighter Credit Unions (CFCU), founded Oct. 16, comprises representatives from 26 of the nation’s 105 identified firefighter credit unions primarily representing firefighters. Grant Sheehan, CEO, Miami Firefighters FCU, was named chairman of the coalition. CFCU seeks to leverage collective resources to further the growth, development and interests of firefighter credit unions nationwide. It will:
* Represent firefighter credit unions to external audiences including regulatory agencies, legislative bodies, trade associations and other publics; * Provide educational and informational exchange opportunities; and * Promote firefighter credit unions’ safety, soundness and financial strength.
Also at the meeting:
* Rodney Hood, vice chairman of the National Credit Union Administration (NCUA), provided an overview of activities of NCUA. He expressed his concern for the survival of small credit unions and the challenges facing them. During a question and answer period he discussed NCUA examinations, the economy, corporate credit unions, legislation, regulations and more. * Economist Jim Hagerbaumer discussed the state of the economy. * Richard Wagner, a senior director with the Municipal CU in New York City, shared some of the challenges his credit union faced during the 9/11 disaster. The credit union’s headquarters was across from Ground Zero. * Fifteen million dollars was looted from the credit union in New York City by its own members--including city employees, health care professionals and education workers -- when a computer failure caused by the collapse of the World Trade Center allowed unlimited access to money in ATMs. * The credit union lost 129 firefighter members on Sept. 11, 2001.

Federation holds fin-lit day in N.Y.

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NEW YORK (10/31/08)--Nearly 100 financial literacy practitioners and government officials attended the National Federation of Community Development Credit Unions’ Seventh Annual Financial Literacy Day celebration at the Museum of American Finance in Manhattan last week. Representatives from credit unions, city officials, banks and community organizations addressed attendees about financial literacy and the work their organizations are conducting in low- and moderate-income communities. Practitioners should “reach out to all levels of government and non profit agencies” to make the most of available resources, said Dan Iannicola, deputy assistant secretary for financial education at the U.S. Treasury. “With the financial industry in turmoil and the persistent problems in the global economy, the need for this type of work is greater than ever,” added federation President/CEO Cliff Rosenthal. Other presenters included:
* Lee Kjelleren, CEO, Museum of American Finance; * Johnette Hartnett, director of public policy at the National Disability Institute; * Dianne Dixon, deputy superintendent of the New York State Banking Department; and * Thom Dellwo, financial education coordinator, Cooperative FCU, Syracuse, N.Y.
“Credit unions are uniquely qualified to teach financial literacy because of their commitment to their communities and particularly as financial institutions,” Dellwo said. He authored the book, “Life Skills: Planning Your Financial Future.” Support for the event was provided by the New York Credit Union Foundation, Signature Bank and the Museum of American Finance.

New Jersey league granted 30000 for small CUs

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HIGHTSTOWN, N.J. (10/31/08)--The New Jersey Credit Union League (NJCUL) received a $30,000 Innovation Grant from the National Credit Union Foundation (NCUF) to help small credit unions.
New Jersey Credit Union League Field Representative Angel Santos (left) and Salem Baptist FCU President Ethel Bond (standing) begin the Small Credit Union Initiative with board members and management. (Photo provided by the National Credit Union Foundation)
NJCUL is matching the grant with $30,000. The New Jersey Credit Union Foundation is contributing an additional $10,000. More than 60% of New Jersey’s credit unions have less than $10 million in assets. The NJCUL created a Small Credit Union Task Force to help them. The task force includes small, large and corporate credit unions, and the National Credit Union Administration. Five issues hindering small credit unions’ success are:
* Lack of board involvement and participation; * Lack of strategic planning or direction; * Not committing resources necessary to improve the credit union; * Lack of management’s desire to grow; and * Not enough focus on getting where the credit union needs to go.
“Through education, we strive to give board members and management the knowledge they need to better oversee and manage their credit unions,” said NJCUL President Paul Gentile. “Our desire is to help boards and management work together to ultimately make each credit union a better financial institution for its members.” Twelve credit unions up to $20 million in assets will participate in NJCUL’s Small Credit Union Initiative. Each must undergo a membership survey, operational analysis, and a facilitated peer review as part of their strategic planning.

CUNA economist briefs INY TimesI on auto financing

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NEW YORK (10/31/08)--Those who finance their auto purchases through credit unions are on “good footing,” Credit Union National Association Senior Economist Steve Rick told The New York Times. The Times noted in a Thursday article that credit unions are willing to lend to car buyers--unlike banks, which are being hit by the subprime crisis. “[Credit unions] didn’t have the losses,” Rick told the newspaper. “We don’t need to hoard credit.” More members are taking advantage of credit union loans to finance used vehicles rather than new ones, Rick added. The Times article, “Deals are Plentiful (But Bring Good Credit),” focused on the availability of car loans to potential buyers. To read the full article, use the link.