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CU System Briefs (10/04/2013)

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  • MADISON, Wis. (10/4/13)--The challenges and opportunities faced by community banks are detailed in a new Wisconsin Department of Financial Institutions/Conference of State Bank Supervisors (CSBS)/Federal Reserve System report entitled "Community Banking in the 21st Century: Opportunities, Challenges and Perspective." The report was released during the first ever CSBS-Federal Reserve "Community Banking in the 21st Century" conference. The report draws its results from town hall meetings, a survey of 1,700 bankers in 28 states, and 100 Wisconsin community bankers who were interviewed during a series of roundtable meetings ...
  • RIDGELAND, Miss. (10/4/13)--A fugitive task force arrested a second suspect in the robbery of Members Exchange CU in Ridgeland, Miss. Kenyatta McGee was apprehended in Gainesville, Ga. The task force also seized an unknown amount of cash (Clarion-Ledger Oct. 1). McGee is charged with robbery, conspiracy to commit robbery and one count of kidnapping. Olivia Walker, 31, of Pearl, Miss., an employee of the credit union, was previously charged with conspiracy in connection with the robbery. Police released surveillance video that shows a man dressed in black entering the credit union, which was closed at the time. The suspect used spray paint to cover camera lenses inside the credit union, then allegedly forced two female employees into the backroom before escaping with an unknown amount of cash ...
  • ST. PAUL, Minn. (10/4/13)--General Mills FCU, based in Minnetonka, Minn., has designated the late Merlin J. Magnusson as a Credit Union Builder through the Minnesota Credit Union Foundation. He was the credit union's first general manager and worked for GMFCU from 1966 until his retirement 25 years later in 1991. Magnusson, who died on July 1, joins 22 other individuals who have been honored with MnCUF's Credit Union Builder Award during the past six years ...

CUs In the Media On Shutdown, Taxes, Credit Scores

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WASHINGTON (10/4/13)--The Credit Union National Association as well as credit unions told about the benefits of credit unions in several media articles this week on a variety of topics including credit unions' assistance to consumers affected by the federal government shutdown, the Don't Tax My Credit Union campaign and credit score tips.
Articles in the Des Moines Register and American Banker dealt with how credit unions and others are assisting with the shutdown's impact on family budgets.
"Credit unions are offering a variety of special services to members, so that no one should have to have to choose between paying the rent and buying groceries simply because of Washington's inability to function," Bill Cheney, president/CEO of CUNA, said in a statement in "Credit unions, banks ramp up aid to furloughed federal employees," an article in the Des Moines Register (Oct 3).
The current partial government shutdown highlights one of the competitive advantages of credit unions, which is a cooperative business model that allows them to share information about the best ways to help customers, said Paul Gentile, CUNA's executive vice president of strategic communications and engagement, in the same article. Numerous credit unions cater specifically to government workers and maintain contingency plans for a federal government shutdown, he said.
"This is not new for credit unions because so many cater to government workers," Gentile said. "You can't just turn on a switch. You have to have to have plans in place and they have to be compliant with regulations."
Also featured were the programs of Federal Employees CU in Des Moines, MCLG Family CU in Mason City, and Waterloo-based Veridian CU. Use the link to access the full article.
In the American Banker's Oct. 2 article about what financial institutions are doing to assist consumers through financial issues related to the federal government's shutdown, CUNA's Gentile said that at least half a dozen credit unions had already implemented plans to help their members while more were expected to make theirs public.  Credit unions were offering things like interest-free, short-term loans and letting members skip a payment on a consumer loan at no charge.  "From a member services standpoint, there is no better time to show your value than in times of need," he told the Banker.
In an article about the bankers' push to get Congress to eliminate credit unions' tax-exempt status for corporate income taxes, the Central Penn Business Journal (Sept. 27) noted credit unions' Don't Tax My Credit Union" social media campaign. The benefits of credit unions "far outweigh taxation," said CUNA's Gentile. He pointed out the $6 billion in benefits from the exemption flows back to the membership through the rate differential for savings and loans products, offering consumers better rates on loan. Also, credit unions provide a $2 billion benefit to nonmembers, including bank customers.
The article also featured Pennsylvania State Employees CU President Greg Smith, who said enacting a tax would put some credit unions, especially smaller ones, out of business, and Members 1st FCU CEO Bob Marquette, who added the cooperative, not-for-profit structure of credit unions puts them at an immediate disadvantage because they cannot sell stock, like banks, to raise capital. Use the link for the full article.
Also, Lathrup Village, Mich.-based Michigan First CU President/ CEO Michael Poulos was interviewed on Detroit FOX 2's "Money Monday" about ways consumers can improve their credit scores. Poulos gave advice based on the regular community seminars the credit union conducts on the topic, which he said attracts 100 to 200 members.

He also noted that auto loans and membership are up at credit unions because consumers are becoming more savvy about banks' high fees and poorer service. For his tips on improving credit scores, use the link.

New York CUs Continue To Outpace National Growth Averages

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ALBANY, N.Y. (10/4/13)--New York credit unions continued to outpace national averages in asset growth, share growth, membership growth and loan growth during the first half of 2013.
The trends are highlighted in the second quarter 2013 New York Credit Union Performance & Trends Report, published by the Credit Union Association of New York in partnership with Callahan & Associates, Inc.
Share balances at New York credit unions rose by 5.9%--compared with the national credit union average of 4.7%--as regular shares and share drafts grew at a double-digit annual pace, said the report. Total shares outstanding stood at $56.2 billion as of June 30.
Capital levels remain strong at 10.8% of assets, said CUANY. This is a higher level than banks nationwide and banks and thrifts in New York, and is in line with credit unions nationwide.
The average member relationship--the outstanding combined loan and share balances per member, excluding member business loans--at New York credit unions also increased to $17,710 at the end of June.
New York credit union loan originations grew 7.7% over the first half of 2012 to $9.1 billion. The rise was due to strong growth in both first mortgage and business loan originations.
The state's credit unions originated close to $3.8 billion in first mortgages in the first half of 2013.
Business loans at New York credit unions rose 14.4% from June 2012, as member business loan originations through the end of the second quarter grew 17.8% from the first half of 2012. In aggregate, 14.3% of New York's loans are classified as business loans--more than double the U.S. average of 6.2%.

Iowa CU Convention Honors Four

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DES MOINES, Iowa (10/4/13)--The Iowa Credit Union League (ICUL) honored four credit union representatives at the Iowa Credit Union Convention held in Des Moines Sept. 18-20 at the Community Choice Credit Union Convention Center.

Award winners included:
  • Kay Beyerink, president/CEO, Telco Triad Community CU, Sioux City, who received the 2013 Heritage Award for demonstrating extraordinary commitment, service and leadership in the credit union movement.
  • Jim Hagerman, president/CEO, Linn Area CU, Cedar Rapids, who was presented with the 2013 Professional Cooperative Spirit Award in recognition of outstanding service, commitment and leadership in the credit union movement.
  • Marilyn Rasmussen, board member,1st Gateway CU, Camanche, who received the 2013 recipient of the Volunteer Cooperative Spirit Award for exemplifying the spirit of the credit union industry and the communities they serve.
  • Josh Ernst, director of consumer lending, Linn Area CU, Cedar Rapids, who received the Young Professional of the Year Award for inspiring young Iowa credit union leaders who are working to build a strong future for the credit union movement.

Board Elected For Iowa League

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DES MOINES, Iowa (10/4/13)--The Iowa Credit Union League announced the results of its board elections at its annual meeting Sept. 19 in Des Moines, Iowa.
Click to view larger image Members of the Iowa Credit Union League board, from left, front row: Jeff Hayes, North Star Community CU, Cherokee; Helen Pearce, Cedar Falls (Iowa) Community CU; Pat Jury, CEO/president, Iowa Credit Union League; Janine Keim, Consumers CU, Denison; Jim Hagerman, Linn Area CU, Cedar Rapids; and Joe Hearn, Dupaco Community CU, Dubuque. Back row: Tim Marcsisak, Nishna Valley CU, Atlantic; Murray Williams, league chief operating officer; Dennis Siemers, Town and Country CU, Harlan; Board Chair Tim Chapman, Members Community CU, Muscatine; Brent Helin, Des Moines (Iowa) Metro CU; Vice chair Dave Cale, Financial Plus CU, West Des Moines; Pat Drennen, 1st Gateway CU, Comanche; and Jonathon Miller, Dubuque Teachers CU. (Photo provided by Iowa Credit Union League)
By serving on the 12-member board, each individual represents the interests of Iowa's 116 credit unions and their more than one million members.
Tim Chapman, CEO, Members Community CU, Muscatine, was elected to serve as the 2014 board chair. Dave Cale, CEO, Financial Plus CU, West Des Moines, will serve as the 2014 vice chair.
Board members by asset category include:
$0 to 19 million assets:
  • Janine Keim, Consumers CU, Denison;
  • Jonathon Miller, Dubuque Teachers CU, Dubuque; and
  • Dennis Siemers, Town and Country CU, Harlan.
$19 million to $51 million assets:
  • Chapman;
  • Brent Helin, Des Moines (Iowa) Metro CU; and
  • Tim Marcsisak, Nishna Valley CU, Atlantic.
$51 million to $100 million assets:
  • Pat Drennen, 1st Gateway CU, Camanche;
  • Jeff Hayes, North Star Community CU, Cherokee; and
  • Helen Pearce, Cedar Falls (Iowa) Community CU.
$100 million-plus assets:
  • Cale;
  • Jim Hagerman, Linn Area CU, Cedar Rapids; and
  • Joe Hearn, Dupaco Community CU, Dubuque.

DHCU Community CU Launches 'CashBack' Checking Account

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MOLINE, Ill. (10/4/13)--Instead of the usual loyalty programs, rewards and member incentives to entice members in a competitive deposit environment, DHCU Community CU, based in Moline, Ill., is taking an out-of-the-box approach to a new checking account program. It has introduced CashBack Checking, an account that pays members each time they use their debit CheckCard and Visa cards.
Each time members use their DHCU CheckCard or Visa credit card, they earn an introductory cashback offer of ten cents for each CheckCard transaction and 20 cents for each DHCU Visa credit card transaction. CashBack rewards will accumulate throughout the program year and be paid as a deposit into the member's CashBack checking account each November.
"There is no other account like this in the area," said Matt McCombs, president/chief operations officer. "Many financials insist on confusing monthly requirements, such as a minimum balance or having direct deposit, only to offer a slight return on the account.  CashBack is our way of 'paying back' our members, with no limits or fine print attached."
The program applies to both signature and PIN debit transactions. The $469 million asset credit union has no minimums set on the number of transactions and no cap on how much a member can earn through the program.
On Jan. 1, the debit card payout reverts back to the program standard of five cents per transaction, with no limits.
CashBack checking is not limited to CheckCard debit card usage. DHCU offers CashBack for Visa credit card transactions to members who use CashBack Checking. They will earn 20 cents on any DHCU Visa transaction during the introduction period and 10 cents per transaction afterward.  No limits are set on this program, and members can swipe their DHCU Visa as often as they want without reaching a cap on their CashBack earnings.

Equifax: Auto, Credit Card Loans Up In August

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ATLANTA (10/4/13)--The total outstanding balances in August on auto loans and credit cards rose from August 2012,with bank-issued credit cards experiencing increases in two consecutive months for the first time in five years, said Equifax's latest National Consumer Credit Trends Report.
Retail card balances have notched 24 consecutive months of year-over-year growth. The total balance of existing auto loans is at its highest level in more than five years, said Equifax.
The statistics are consistent with the Monthly Credit Union Estimates for August compiled by the Credit Union National Association, where credit union new-car loan balances are surging, with an 11.9% increase the past year. (See related News Now story CUNA: Loan Growth Leads a Strong August by using the link.)
Changes in balances from August 2012 to August 2013 included:
  • Auto loans, up 9.7% to $834.4 billion from $760.8 billion;
  • Bank credit cards, which rose 0.2% to $537.8 billion from $537 billion; and
  • Retail credit cards, which increased 7% to $55.9 billion from $51.9 billion.
Auto loan and credit card portfolios are the only two major segments in which rising balances accompany improving delinquency rates. Year-over-year changes in the 60-day plus delinquency rates, as a percentage of total balances outstanding, included:
  • Auto loans, whose delinquencies decreased more than 10%--to 1.14% from 1.28%;
  • Bank credit cards, which decreased more than 13%--to 1.81% from 2.10%; and
  • Retail credit card: decreased 0.9%--to 3.34% from 3.37%.
The data indicate that American consumers are being very disciplined in their use of credit, said Equifax Chief Economist Amy Crews Cutts.  "It's like they've gone on a debt-diet and they are really sticking to it, with modest increases in line with capacity to repay," she said.
"If we exclude student loans, total consumer debt is down 15% from its peak, and delinquency rates outside of home loans and student loans are back to pre-recession levels. Economic conditions are causing the lingering high default rates on student loans and mortgages, and hopefully we will see those improve more quickly in coming months," she added.
Other highlights from the most recent Equifax data:
  • Auto loans:  The total number of loans outstanding in August 2013 is more than 61 million, a 57-month high. By source, loans funded by credit unions, banks, or savings and loans total $401.7 billion, while the total number of loans is 29.5 million--a five-year high for both. The total outstanding balance for loans funded by auto finance companies is $432.7 billion, a 56-month high, while the total number of existing loans is more than 31.8 million, its highest level in 54-months. Also, the total balance of auto loan originations year-to-date in June 2013 is 237.6 billion, an increase of nearly 15% from same time a year ago and the most new credit originated for that time period in more than eight years.
  • Bank-issued credit card: At $93.3 billion, the total limit of new credit issued between January and June is a five-year high for that year-to-date period. It is also an increase of more than 68% over the recession low of $55.5 billion for the same time during 2010. The number of new loans year-to-date in June is 20.1 million, a five-year high and an increase of 6.3% from the same time a year earlier. Existing loans totaled more than 310 million, a 43-month high, while the total bank card credit limit is more than $2.4 trillion, a 43-month high.
  • Retail-issued credit card: At $34.2 billion, the total limit of new credit issued through June of 2013 rose nearly 33% over the recession low of $25.8 billion for the first six months of 2010. Between January and June 2013, roughly 18 million new loans were issued--the highest since 2008 and an increase of more than 7% over the same period last year. Year-to-date lending through June to subprime credit borrowers (with Equifax Risk scores below 660,) increased 15% over the period a year ago, and 5.9 million loans were originated, the highest in 5 years. Existing loans total more than 180 million, with the total retail card credit limit at nearly $350 billion.
  • Home finance: The total balance of first mortgages in August is $7.7 trillion, a decrease of 1.2% from same time a year ago. The total balance of first mortgage severe delinquencies (90-days past due or in foreclosure) is $300 billion, a decrease of more than 28% from same time a year ago and a five-year low. August's home equity revolving loans balance totaled $500.4 billion, a 7.4% decrease from that time a year earlier and a five-year low. August loans outstanding totaled 10.5 million, a five-year low. Severely delinquent home equity revolving loans for the month is3 is less than $9 billion, a 25% decrease from a year earlier and also a five-year low. The total balance of home equity installment loans is $136.7 billion, a 4.2% decrease from a year ago, while the total number of loans outstanding is four million, a five-year low.

Healthcare CUs Unite To Increase Opportunities

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LAS VEGAS (10/4/13)--Two dozen credit unions from the U.S. and Canada with a common bond--serving healthcare organizations--gathered in Las Vegas Sept. 18-20 for the annual conference of the Healthcare Credit Union Association.
The credit unions represent and serve all types of hospitals, healthcare networks and their employees.
The conference theme was Opportunity Screams, taken from the title of keynote speaker Tom Asacker's book, "Opportunity Screams: Unlocking Hearts and Minds in Today's Idea Economy."
Officers include:
  • Chair, Charlie Collura, CEO of Healthcare and Municipal Employees' CU, Ontario, Canada;
  • Vice chair, Shirley Cate, president/CEO of Providence FCU, Milwaukie, Ore.;
  • Secretary, Linda White, CEO of United Health CU, Burlingame, Calif.;
  • Treasurer, Todd Nelson, senior vice president of HealthCare Associates CU, Naperville, Ill.; and
  • Director at large, John Saatela, CEO of CarePoint FCU, Anaheim, Calif.
Attendees from HCUA's nearly 50 member credit unions heard interactive question and answer sessions that included an update from Martha Ninichuk of the National Credit Union Administration's Office of Small Credit Union Initiatives; a regional HCUA meeting led by Carol Bayreuther, CEO of Hartford (Conn.) Healthcare FCU; and a session on "Marketing in Healthcare," presented by Robert York, chief marketing officer of CalCom FCU, Torrance, Calif.