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CU System Archive

CU System

CUs Fewer borrowing to buy cars

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TACOMA, Wash. (10/10/08)--Fewer people are looking to borrow money to buy cars, two Tacoma, Wash.-based credit unions told The News Tribune recently. Although the $397-million asset Sound CU has plenty of capital to lend, borrowing has changed. Loan growth is “positive, but it is slower than it has been,” Carl Roer, Sound CU vice president of lending, told the newspaper. Members are being more careful because of higher gas prices and lower home values, he added. The $234 million asset Tapco CU has left its loan rates unchanged, but is not making as many exceptions to members because of the economy, Tom Shafar, Tapco loan manager, told The News Tribute. Consumers need to understand their credit and check availability. Dealerships have large inventories, so they can negotiate. But demand has lessened, Roer said. More than 80% of auto loan applications in the U.S. were approved last year. The number has dropped to 63%, according to research cited by the newspaper. For the full article, use the link.

SECU pledges 250000 to hospice facility

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RALEIGH, N.C. (10/10/08)--State Employees’ Credit Union (SECU) members, through the SECU Foundation, have pledged $250,000 to assist in the construction of a freestanding inpatient hospice facility for Hospice of Wake County in North Carolina. The pledge is a matching gift to Hospice of Wake County’s “Building Partners in Caring” capital campaign. With plans to begin construction before the end of the year, the proposed facility consists of three buildings--a 19,000-square-foot hospice house, a 26,000-square-foot community/administrative building and a 1,000-square-foot spiritual sanctuary. “The pledge grant for Hospice of Wake County will give families even greater resources to deal with the medical and emotional aspects that come with the anticipated loss of a loved one,” said David King, chairman, SECU Foundation board of directors. “Many of our members have been touched by hospice care, so this is a very fitting project for the SECU Foundation. We are happy to assist with this effort.” The Hospice House will have 14 acute care beds, six residential beds and a space dedicated for families, including a kitchen, family room and playroom for children. The community center will feature a state-of-the-art bereavement center and will provide space for community education programs, for children to take part in play and art therapy sessions, and for adults to participate in counseling programs. “This generous pledge by SECU members will help make it possible to build a permanent home for Hospice of Wake County, and allow us to deliver tender medical care to patients in a facility that is specifically designed for end of life,” said Michael D. Blanchard, vice president of development for Hospice of Wake County. “Thanks to the SECU Foundation and SECU members for truly being our partner in caring.” “The SECU Foundation was founded on the basis of ‘people helping people’ and hospice epitomizes this philosophy, serving patients at the end of their life and their families,” King said.

Arizona league opposes payday loan reform act

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PHOENIX (10/10/08)--The Arizona Credit Union League (ACUL) has adopted a more public stance in opposing Proposition 200--the Payday Loan Reform Act, which is up for a vote Nov. 4. The ACUL maintains that the proposition, which was written by the payday lending industry, is not reform. Drafted and proposed by payday lenders, the proposition will allow payday lenders to conduct business without the legislature’s ability to review and amend, permanently, and with new exemptions. Payday lenders will charge high interest rates, will have new electronic access to borrowers’ checking accounts and will allow people to receive numerous payday loans at once, regardless of existing debt, the league said. If the proposition passes, “the most vulnerable people in our communities will become more susceptible to the three-digit interest rates and debt traps set by Arizona payday lenders,” the league added. The ACUL is reaching out to more than 1.6 million Arizona credit union members and urging them to vote against Proposition 200. It also is working in conjunction with the “No on 200” campaign. “We need to look out for the best interest of our members and all consumers to protect them from a deceitful and harmful proposition,” said Scott Earl, ACUL CEO. “Credit unions are not-for-profit institutions whose sole motivation is upholding what is in the best interests of its members, our community and local economy. We encourage everyone to come out in force on Nov. 4 and defeat Proposition 200.”

CU System Briefs (10/09/2008)

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SPOKANE VALLEY, Wash. (10/10/08)--Numerica CU, Spokane Valley, Wash., exclusively sponsored Balloons over Valleyfest, a community event in Spokane Valley. Seven hot air balloons participated in the event and launched each morning from Friday through Sunday. Numerica banners were placed on each balloon basket. Credit union employees volunteered on the hot air balloon crews, assisted pilots with inflating the balloons, landing and packing up after each flight. Numerica also contributed in providing free kids’ activities, food and entertainment. Numerica CU has $750 million in assets. (Photo provided by Numerica CU) ... * MILWAUKEE (10/10/08)--Guardian CU, Milwaukee, plans to merge with Prime Financial CU, Cudahy, Wis., to form a credit union that will have about $491 million in assets (The Milwaukee Journal Oct. 8). The resulting credit union will be called Guardian CU and will have 82,000 members. It will be the 10th largest in the state. Guardian began as Harnischfeger Employees CU in 1934 and has branches in Milwaukee County, Racine County and Waukesha County. Prime Financial was founded in 1923 and formerly served city and county employees ... * SILVER SPRING, Md. (10/10/08)--The National Foundation for Credit Counseling (NFCC) will launch Protect Your Identity Week Oct. 19-25. NFCC member agencies nationwide will conduct ID theft workshops, credit report reviews and shredding events. The agencies also will provide education. “We need to fight back [against identity theft], and the way to do that is to arm consumers with concrete steps they can implement into their daily lives,” said NFCC spokesman Gail Cunningham. The Credit Union National Association is an NFCC coalition member ...

White papers Marketing to baby boomers ex-bankers at CUs

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MADISON, Wis. (10/10/08)--How to market to baby boomers, and credit unions filling lending positions with ex-bankers are the subjects of two new white papers from the CUNA Councils. Addressing the financial services needs of the often-ignored baby boomers--the 76 million men and women who comprise 26% of the population--is the subject of the first white paper. “Marketing to Baby Boomers,” by the CUNA Marketing and Business Development Council, details relevant products and services for this demographic and how to strategically market these offerings. The white paper includes research and case studies on boomer women, who are emerging as a market superpower predicted to control two-thirds of U.S. consumer wealth over the next decade. The paper outlines the numerous opportunities that the baby boomer market presents, along with some caveats in the competition for wallet share. “This age cohort is hungry for financial information from their trusted advisor,” the paper reads. “They will attend seminars, but want information without the sales hustle--they get too many offers for free dinners and credit cards. As the interviews with professionals indicate, if the information is too sales oriented, your members will be turned off immediately.” The second new white paper--“Ex-Bankers Working for Credit Unions: Challenges and Opportunities” by the CUNA Lending Council--offers tips and tools for hiring ex-bankers with the right mindset to thrive in the credit union environment and helping them to make the transition. Credit unions have been filling lending positions with ex-bankers for many years, but the trend has gained more attention recently due to credit unions’ growing need for commercial lending experience. “For ex-bankers, the key to success in the credit union movement seems to be understanding the credit union philosophy and reconciling it to their own approach to lending policies and procedures,” according to the paper. “When ex-bankers successfully take this step, they can make significant contributions to their credit union organizations and even the credit union movement.”

Conn. league adopts Texas league small CU support program

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MERIDEN, Conn. (10/10/08)--The Credit Union League of Connecticut’s “Small Credit Union Task Force” voted Wednesday to adopt the “Small Credit Union Support Program” model created by the Texas Credit Union League. The purpose of the program is to provide specific support in the areas of compliance, vendor management, advertising and marketing, asset liability management and budgeting, and networking opportunities for smaller asset size credit unions in Connecticut. “In an effort to provide more support to smaller credit unions, we researched several existing programs and found the Texas model to be a good fit for our credit unions in Connecticut,” said Anthony Emerson, Connecticut league president/CEO. “I really appreciate the cooperation shown to us by Dick Ensweiler and his staff at the Texas Credit Union League. It was nice not to have to recreate the wheel.” “Small credit unions everywhere are finding competing in this fast-paced and high-tech environment to be challenging,” Ensweiler said. “There are many opportunities for other credit unions and leagues to assist. We congratulate the Connecticut League for adopting the support program that has been developed and time-tested here.” The Credit Union League of Connecticut has already taken steps to fund the “Small Credit Union Support Program” by creating a dues-discount program, of which up to 5% of a credit union’s dues may go to the “Small Credit Union Support Fund.” Also, the league has offered several affordable and “scalable” compliance and information technology products and services to smaller credit unions in the state. “With a majority of credit unions in Connecticut having less than $20 million in assets, it is imperative that our league have plans and programs in place to support their needs and growth,” Emerson said.

Filene examines large CU success factors

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MADISON, Wis. (10/10/08)--Why do many large credit unions grow rapidly and thrive, while others produce much slower growth in assets, membership, and earnings? Filene Research Institute sought to answer that question by analyzing data from a five-year period, beginning January 2002. The result is a newly released Filene Research Institute report, “Thriving Large Credit Unions,” by Robert F. Hoel, Colorado State University Emeritus Professor of Business and a Filene Research Fellow. Using a methodology developed for the institute’s examination of small and midsize credit unions (1999 and 2007), Hoel isolates “star” and “laggard” credit unions in larger asset sizes, and reports their characteristics across a variety of measurements and indicators. The study concludes that star credit unions conduct a number of business practices and traits that distinguish them as exceptional performers:
* They are highly effective lenders; * Their members use the credit union extensively; * They excel in high-payoff product and service offerings; * Their members receive more total interest income on their savings; * They operate more branches and are more likely to engage in indirect lending; * They generate more fee income than their peers; and * They invest their capital in growth.
Hoel also reports on the qualities of low-performing credit unions, almost always in sharp contrast to star traits. For example, whereas stars are highly effective lenders, laggards tend to have low loan-share ratios; and while stars invest their capital in growth initiatives, laggards are more conservative with their capital. One of the findings of the research is the consistency of the key success factors for star credit unions across asset size categories and time frames. “Despite the uniformity of these success factors, it would be folly for credit unions to conclude that all seven effective practices are necessary to become a star,” said George Hofheimer, Filene chief research officer. “A given credit union may have a different definition of what constitutes high performance by putting less emphasis on assets, earnings, and/or membership growth, for example.” There is no silver bullet or magic elixir that guarantees business performance, Hofheimer said. Credit union failure or success is dependent on a complex interaction of external and internal factors. The Hoel report does, however, outline factors that lead to credit union success. Hofheimer recommends using the report as a building block and analysis for credit unions to consider in assessing future strategies and tactics. Copies of “Thriving Large Credit Unions” are available free to Filene members; $125 to non-members. For more information, use the link.

IAssociated PressI iWash. Posti note CU share insurance

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NEW YORK (10/10/08)--Associated Press and Washington Post writers in stories this week noted credit unions' competitive rates on savings accounts, was well as federal and private share insurance. Most shares at credit unions are insured by the National Credit Union Share Insurance Fund (NCUSIF), noted the Associated Press, which pointed out credit unions also offer more competitive rates on savings accounts. Members also can access branches through shared networking. “The bigger the credit union, the more likely it is to offer services such as credit cards, mortgages, ATMs or online banking,” the article said. Most consumers are eligible to join a credit union through their geographic area, profession, university or church. And credit unions may have “a greater degree of individual attention” that consumers may be seeking during the current financial crisis, the article noted. Meanwhile, Washington Post consumer finance columnist Michelle Singletary reminds readers the new Emergency Economic Stabilization Act of 2008--in addition to banks--also temporarily increases the insurance limit to $250,000 on accounts in federal credit unions and the majority of state-chartered credit unions. "In nine states, 163 state-chartered credit unions offer coverage from American Share Insurance, a private insurance company. It insures up to $250,000 per account," write Singletary. To read the full articles, use the link.

Indiana league elects table officers honors U.S. Rep

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INDIANAPOLIS (10/10/08)--The Indiana Credit Union League elected new table officers and directors to its board Sept. 27. The league also honored U.S. Rep. Brad Ellsworth (D-8th District) as Outstanding Hoosier Legislator for 2008. Table officers are:
* Chairman: George McNichols, Hoosier Hills CU, Bedford; * Vice Chairman: Lamoura Munse, Indiana Members CU, Indianapolis; * Board Secretary: Ron Mazur, Chiphone FCU, Elkhart; and * Treasurer: Lori Dauksas, Members Choice FCU, Bloomington.
Table officers were elected at the League’s reorganization meeting, which was held during the League’s annual meeting and convention. Affiliates also elected Dave Fleming, CEO of Partners 1st FCU in Fort Wayne, and Doug True, senior vice president of Technovation at FORUM CU in Fishers to three-year terms on the board of directors. Fleming and True attended their first board meeting Sept. 27. Leaving the board at the conclusion of the league annual meeting was Jenny Budreau of FORUM CU in Fishers. She was recognized during the meeting with a special resolution. Ellsworth was presented his award at the league’s annual convention. Ellworth, who is serving his first term in Congress, has developed a strong relationship with credit unions in Southwestern Indiana, the league said. He is a co-sponsor of the Credit Union Regulatory Improvements Act and has also met with Indiana credit union leaders in Washington, D.C., and at his home. “His accessibility as well as his receptiveness to our message about how consumers and small business owners benefit from credit unions has been tremendous,” said Indiana league President John McKenzie.