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CU System briefs (10/31/2011)

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CU System Briefs

  • WILMINGTON, Del. (11/1/11)--Sun East FCU, Aston Pa., will open its first branch in Delaware at a shopping center in Wilmington, Del., with a ribbon-cutting ceremony Friday. The credit union will offer deposit and loan rate specials exclusively at the Wilmington branch during the two-day grand opening event Friday and Saturday and running through Nov. 10. The new facility is a full-service branch with a 24-hour ATM. The celebration will include a Video Game Challenge open to everyone, and the winner will be awarded an HDTV and an Xbox video game system …
 

  • MANSFIELD,  Texas (11/1/11)--Derrotis Kerioth Holmes, 35, of Grand Prairie, Texas, was sentenced to 55 months in federal prison on charges related to the robbery of a branch of Mansfield, Texas-based Texas Trust CU,  the U.S. Attorney of the Northern District of Texas announced Oct. 17 (Targeted News Service Oct. 17). Holmes allegedly entered the Texas Trust CU branch in Arlington, Texas, carrying a plastic grocery bag and a large knife on May 5, according to documents filed in the case. He approached the credit union's greeter then proceeded to the teller station, where he allegedly threatened the teller with the knife and demanded that she give him all her money, indicating that he would "come over the counter" if she did not comply. During his confrontation with the teller, Holmes switched from an underhand to an overhand grip on the knife and continued to threaten the teller with it. After the teller gave Holmes the cash, he left the credit union, and was later arrested as a result of an anonymous tip …

Were ready CUs tell nations media of switch movement

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MADISON, Wis. (11/1/11)--The likes of NBC Nightly News, Los Angeles Times, the Washington Post, Detroit Free Press and Minneapolis Star-Tribune were among the dozen or so well-known outlets reporting this weekend that credit unions are ready to step in and serve consumers fed up with fees charged by big banks.

In addition, more than two dozen reported on the latest news related to the nationwide Bank Transfer Day, set for Saturday. The Associated Press, Reuters, ABC Action News  were among them. Bank Transfer Day is the movement that began on the Facebook page of a California art dealer who announced said she was moving her account  because of bank fees. Many began suggesting that consumers switch to credit unions. The media barrage on the topic has gone on more than a month.

The Credit Union National Association (CUNA)  helped arrange an interview on Friday NBC Nightly News anchored by Brian Williams with BECU, Tukwila, Wash., about why consumers are switching to credit unions.

The segment hit bank fees hard and noted that while some big banks are pulling back from their debit card fee announcements, consumers should be on the lookout for "stealth fees" such as increased minimum balances to maintain "free" checking, a fee for using a teller, a fee for receiving a paper statement, and other manipulations.  If consumers want to avoid the extra fees, they can often do so at a credit union or community bank, the segment said. BECU, during an average month, attracts about 7,000 new accounts per month. Todd Pietzsch of BECU told NBC.  In October alone, it opened 16,000 new accounts. The program also noted that members joining credit unions have 28,000 ATMs accessible.

A number of major national media are reporting that big banks are rethinking their debit card fees in light of the outcry from consumers and the movement to transfer accounts to credit unions. The banks, however, are mum about their other fees.

The Los Angeles Times, in "Saying goodbye to your bank" (Oct. 30), noted the "torrent of ill will" unleashed by Bank of America's $5 monthly debit card fee. The article said that "breaking up is easy. Finding a financial partnership that's more satisfying could prove trickier."  It urged consumers that switch to do their homework.

"Credit unions…are set up for such hands-on service at a low cost. Owned by members who are linked by jobs or geography, their core focus is on consumer accounts, although some these days are doing more small-business lending," said the Times, which added the criteria for membership have broadened.

It mentioned several credit unions, the fact that they have 28,000 ATMs, and that readers can find a credit union to join at CUNA's consumer site, http://www.asmarterchoice.org.

Asbury Park Press, in New Jersey, highlighted New Jersey's credit unions as positioning themselves as the go-to alternative for big banks and their fees.  It reported United Teletech Financial FCU's campaign to attract new members at its "Bank Transfer Headquarters. Leo Ardine, president/CEO, told the newspaper that people are reacting to lack of control in the marketplace and are "tired of being a profit opportunity for others." The article also recognized First Financial FCU, which said it is seeing an uptick in new accounts.

NuMark CU in Joliet, Ill., was the focal point of a feature in the Morris Daily Herald (Oct. 27) about credit unions "as alternatives to fee-raising banks." The credit union noted consumers will find significant advantages to being a credit union member in addition to saving money.  It also reported that CUNA estimates the average credit union member saved $69 (or $132 per household) in the 12 months preceding June 2011--just by doing business at credit unions.

Meanwhile, credit unions are gearing up their campaigns to woo more members . Among them:

  • US FCU, Burnsville, Minn., which is "looking forward and prepared for the additional traffic" that Bank Transfer Day might bring as individuals make the switch. According to Bob Stowell, vice president of operations, each new checking account opened Saturday will receive a $50 deposit as a welcome to U.S. Federal. All its branches will be open Saturday from 9 a.m. to 1 p.m.
  • Golden 1 CU, Sacramento, Calif., will extend its hours on Saturday to welcome new members. All branches, except those in limited-access locations, will be open from 9 a.m. to 4 p.m. It noted that it continues to offer free checking accounts and debit cards with no monthly fees as well as other free and low-cost services. "Consumers are awakening to the idea that there are better choices than big banks," said Donna A. Bland, Golden 1's president/CEO.
  • Hopewell FCU of Heath/Newark, Ohio, said not to wait until Saturday to join. "Every day is a good day to join a credit union," said James G. Johnson, president/CEO. He noted that consumers who make the switch will find that on just about any given day, on average, credit unions offer higher return on most savings, lower rates on most loans, and lower (or no) fees than other financial institutions charge.
  • NEFCU, in Westbury, N.Y., said it wants Long Islanders to get the most affordable banking services, along with a host of other free benefits, and wants to help make the general public aware of how easy it is to join. "With the rising frees banks are adding to their customers' accounts, Bank Transfer Day is an opportunity to educate consumers about the value of joining a credit union like NEFCU," said Edward P. Paternostro, president/CEO. NEFCU offers one of the highest interest rates on Long Island, with a free checking account that pays a 3.5% annual percentage yield, which is almost unheard of today, said Paternostro.
  • At Belco Community CU in Harrisburg, Pa., "Now is the time to become one of more than 92 million Americans nationwide who are already enjoying the benefits of credit union membership,"said Lonny J. Maurer, president/CEO.  It already has seen an upsurge in new members, partly due to its Refer-a-Friend Dream Vacation Sweepstakes, which began in April and runs through December. Every 500th new Belco member receives a choice of an Apple iPad 2 or $500 cash and is registered to win a Dream Vacation for Two.
  • Members 1st CU, Redding, Calif., will open its doors for special hours Saturday to coincide with Bank Transfer Day. It will be open 9 a.m. to 2 p.m. "Our Basic Checking account has no monthly fees, no debit card fees, and no minimum balances to maintain," said Nicki Crandall, assistant vice president/area manager. She noted an increase in new members the past couple of weeks "as people are bringing their business to us because of our fee-free account."

Catalytic force of co-ops highlighted at IYC launch

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NEW YORK (11/1/11)--Calling cooperatives a "catalytic force," United Nations General Assembly President Nassir Adbdulaziz Al-Nasser officially launched the 2012 International Year of Cooperatives at special ceremonies in New York Monday.

More than 150 CEOs and presidents of cooperatives the attended the events, which continue through today.

At the United Nations' launch of 2012 International Year of Cooperatives Monday are, from left, Cliff Rosenthal, CEO of the National Federation of Community Development Credit Unions, and CUNA President CEO Bill Cheney. (CUNA PHOTO)
Noting the theme, "Cooperatives Building a Better World," Al-Nasser emphasized that people  must be at the center of social and economic development.  No country can develop unless the people are developed.  International Year of Cooperatives marks the first time the UN has awarded a business model an "International Year" designation.

Cooperatives' principles contribute immensely to this, he said, to reduce poverty, create jobs, promote social and economic integration.  And they do so with honesty, social responsibility and caring for others.

"We'll focus on the achievements of cooperatives and support for the objectives to bring people together to resolve societal issues at a grassroots level," he said at Monday's launch.

Cooperatives are a "catalytic force" because they aggregate economic power, create opportunity and enable communities to compete successfully in a global economy, he said, adding they deserve more support and encouragement in order to thrive in their respective countries.

Dr. Asha-Rose Migiro, on behalf of the UN Secretary General, noted that the emphasis of the International Year of Cooperatives is an opportunity to raise public awareness and encourage governments to establish policies conducive to their growth. Co-ops help to reduce poverty, create jobs, empower youth, the elderly, those with disabilities, women, she said.

Dame Pauline Green , president of the International Cooperative Alliance (ICA), highlighted the outcome of a morning panel. Cooperatives reflect the combined power of economic opportunity and social responsibility, and have taken millions out of poverty with dignity, she said. After the year is over, it is her hope that efforts pivot from IYC to a decade of cooperative growth.

Also speaking was Gordon Brown, former British Prime Minister,  who also addressed the World Council of Credit Unions' annual conference in Edinburgh this year. "Literally a billion of us are part of a movement of men and women who believe in something," he said, adding, "It's monumental. When the strong help the weak it makes us all stronger."

He noted that, "We must do more than talk about our interdependence and our moral sense that cooperatives are good.  We must listen to the voices of discontent, the unemployed, the impoverished--listen to these voices and set out a cooperative vision of the future."

Credit Union National Association President/CEO Bill Cheney attended the events. "Today's remarks by these very distinguished speakers on the floor of the UN General Assembly were truly inspiring. They highlighted the value and accomplishments of cooperatives and the great potential cooperatives have to accomplish still more."

Also attending the UN sessions, World Council of Credit Unions President/CEO Brian Branch remarked, "It was striking how many countries--nineteen, including the United States--had their representatives speak to the benefits of cooperatives, including a number of references to the work that credit unions do around the world."

Monday morning CUNA's Cheney attended a round table discussion that focused on the theme of cooperative enterprises--how to help create sustainable development. He will also participate in today's events.

Today's agenda includes:

  • Cooperative business;
  •  Cooperative finance; and
  •  How businesses use communications to meet objectives.
 

Today's events include an ICA Leadership Forum and the National Federation of Community Development Credit Unions' "New York: Building a Cooperative City" at the Ford Foundation today. Co-sponsors include the Council of New York Housing Cooperatives and the National Cooperative Bank.

Man who shot teller sentenced to 25 years

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GREENSBURG, Pa. (11/1/11)--A man who shot a teller during a robbery in January 2010 at Westmoreland Community FCU in Greensburg, Pa., was sentenced to 25 years in prison.

David Mathis, 47, apologized for his actions Wednesday--saying tough times caused him to commit the robbery--before he was sentenced in Westmoreland County Court by U.S. District Judge Donetta Ambrose (Associated Press Oct. 26).

Mathis allegedly pistol-whipped one teller and shot another during the robbery, authorities said.

Mathis, who in July pleaded guilty to the robbery, said he didn't know how to operate the weapon and it went off by accident. Judge Ambrose said that was no excuse.

In February 2009, Mathis was released from prison after serving nearly 15 years for five robberies committed in 1994 in the Pittsburgh area.

CU wins reduced verdict on performance bond claim

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MIAMI (11/1/11)--Dade County FCU, Doral, Fla., won a reduced verdict in the amount of  $406,200 against its insurance company to fulfill a performance bond claim it made after an employee altered more than 500 delinquent credit card accounts to make them appear current.

The judgment was made Oct. 18 in U.S.  District Court for the Southern District of Florida in Miami against defendant CUMIS Insurance Society, part of CUNA Mutual Group.

The credit union filed a claim for $2.4 million, which CUMIS said was inflated. The jury agreed, reducing the amount awarded to $348,183 plus $58,017 in pre-judgment interest from the date of loss--April 2, 2009--resulting in the total $406,200, according to the ruling.

"In this case, the credit union and its lawyers filed a claim for $2.4 million," John Christenson, associate general counsel for CUNA Mutual Group, told News Now. "CUMIS maintained all along that the amount claimed was significantly inflated. In the end, the jury agreed with CUMIS' position, finding that the credit union's covered loss was $348,183, which is less than 15% of what was claimed.  

"Paying inflated claims impacts all of our policyholders," he continued. "As a mutual company owned by our policyholders, we are duty-bound to those policyholders to avoid paying inflated claims and to defend against efforts to get us to do so. CUNA Mutual's claims philosophy is to handle all claims fairly, paying what we owe, nothing more and nothing less. That is what we've done in this matter.

"Unfortunately, in situations such as these the only real winners are the lawyers who often generate fees far in excess of any recovery.This seems particularly inappropriate here, where the credit union's lawyer engaged in such misconduct during the trial that the judge felt compelled to instruct the jury to disregard much of her argument," he concluded. 

At issue in the case was the credit union bond, which in part sets terms of coverage for loss incurred by the credit union in exchange for a premium paid by the credit union to CUMIS. The credit union alleged the contract agreed to pay the credit union for loss directly resulting from "a named employee's failure to faithfully perform his/her trust."

In April 2009, the credit union discovered that Jorge Garcia was manually manipulating credit card accounts to make it appear as if the accounts were current, the complaint said.  Because his actions led credit union staff into believing the card accounts were current, they took no actions on several accounts that actually were delinquent, the complaint said.

The continued manipulation of the credit card accounts meant the credit union could not recover funds on past due accounts, according to the compliant.

In April 2009, Dade County FCU submitted proof of loss to CUMIS, which investigated the credit union's claim and denied it on July 8, 2010.

Mich. State Senate committee takes interchange testimony

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LANSING, Mich. (11/1/11)--The Michigan State Senate Banking and Financial Institutions Committee hosted a hearing Thursday on the debit interchange fee provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Representatives from the Michigan credit union and banking industries testified on the new regulation.

Michigan State Sen. Darwin Booher (R-Evart) listens to testimony Thursday at a hearing on the debit interchange provision of the Dodd-Frank Act. Michigan credit unions and the Michigan  Credit Union League testified at the hearing. (Photo provided by the Michigan Credit Union League)
They discussed recent actions by many "capped" institutions to raise fees to cover the costs of their debit card programs and the ongoing concerns by small issuers that market pressures could drive down the interchange rates charged by exempt institutions, said the Michigan Credit Union League (MCUL)  (Michigan Monitor Oct. 31).

Marcia Hune, league vice president of government affairs, and Tony Carnarvon, CEO of Co-Op Services CU, Livonia, represented the credit union industry.

Hune provided a brief summary of the interchange fee provision and outlined ongoing concerns that merchants may influence consumers to use certain debit cards at the point of sale.

Hune also said that the full effect on smaller issuers such as credit unions is still unknown since they are unsure of what the future will hold for two-tiered network structures and their sustainability.

Carnarvon noted small issuers have an opportunity as larger, capped institutions implement new fees on basic debit cards and checking accounts. Carnarvon's credit union launched a "Shred My Card" campaign, which gives consumers the opportunity to take their bank debit card to any Co-Op Services location, open a new free checking account with direct deposit, shred their old bank debit card and receive $105--pending an approved membership.

"There's a major difference here," Carnarvon said. "Unlike other financial institutions, we're focused on giving our members better rates, added conveniences and more value. Co-Op Services has never charged a debit card transaction fee to our members and offers a free checking account with no monthly fees."

While opportunities have presented themselves in the short term, market forces will almost certainly put downward pressure on interchange rates for small issuers, potentially proving the small issuer exemption meaningless in the future, MCUL and Co-Op CU said at the hearing.

The Credit Union National Association is urging the Federal Reserve to increase the amount of per transaction fees that debit card issuers receive to cover their costs associated with fraud prevention.

NCUF grant helps Mich. CUs attain FiCep certification

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MADISON, Wis. (11/1/11)--With assistance from a National Credit Union Foundation, the Michigan Credit Union League (MCUL) offered a training program that produced 72 Certified Credit Union Financial Counselors last year.

With a National Credit Union Foundation grant, the Michigan Credit Union League trained 72 Certified Credit Union Financial Counselors last year. Here, Kathryn Greiner from University of Michigan CU presents on the "Budget Counseling Process" during training. (Photo provided by National Credit Union Foundation)
Since then, MCUL has reached an estimated 170 credit union staff and more than1,850 consumers through the program.

The training combines the Credit Union National Association's self-study Credit Union Financial Counseling Certification Program (FiCEP) with webinars and local in-person training and networking, to help credit union staff to become more confident in assisting members with their financial futures. 

An additional 101 credit union staff from 26 credit unions have enrolled in the program in 2011.  The guided self-study portion provides bi-weekly interactive webinars on each of the eight FiCEP modules and two live training and testing sessions during a six-month period. Upon completion of the modules, training and testing, participants receive their Certified Credit Union Financial Counselor designation. 

A major component of the enhanced training is working with counselors to develop a strategic for their credit unions to obtain maximum impact for the credit union and the community.

MCUL's goal is to increase the number of credit unions providing financial counseling to assist Michigan residents to manage their money and avoid problems such as bankruptcy, foreclosure and loan defaults. Michigan's credit unions are attracting the interest of partners such as Habitat for Humanity and United Way's 2-1-1 system as a source of trustworthy financial guidance for the families they serve. 

With 24 credit unions reporting in the first half of 2011, counselors logged in about 1,200 hours of counseling activity, helping more than 1,850 consumers. Expanding those results to the full group of 170 credit union financial counselors in 56 credit unions would translate an annual reach of more than 8,800 consumers, said NCUF.

Second-quarter National Credit Union Association Call Report data has illustrated the program's impact shows Michigan credit unions experiencing fewer delinquencies and charge-offs and a reduction in the rate of bankruptcy among members.     

"Members are always thanking us because we helped them and no one else would," said Lisa Blevins, a FiCEP participant from Education Plus CU in Monroe, Mich. "Our charge offs and delinquencies are way below our peers, and we take pride in keeping it this way because that tells us we are helping more members than charging them off as a loss."

New music video highlights how to switch to a CU

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MADISON, Wis. (11/1/11)--The Disclosures, a credit union music duo, released a new music video to help credit unions encourage consumers to switch accounts in anticipation of Bank Transfer Day on Saturday.

A rework of Gloria Gaynor's "I Will Survive" '70s anthem, "Tired of Your Big Bank? Take These Steps to Switch to a Credit Union (& Sing-along)!" provides an overview members of how they can move funds from a big bank to a credit union.

"Sometimes it helps to get an important message across if you take something people know and turn it on its head," said Disclosure band member Christopher Morris, who is also director of communications at the National Credit Union Foundation. "And like everything we do, we don't take ourselves too seriously to help make it entertaining."

The viral Bank Transfer Day continues to grow amidst widespread dissatisfaction with high bank fees. Bank customers who have become disillusioned with banks are looking to local cooperative credit unions, who typically charge fewer and lower fees and provide other services that represent their structurally driven commitment to people rather than profit, said the duo.

"The idea of moving your money to a credit union is a hot topic now because of Bank Transfer Day, but we hope credit unions will find value in sharing our video long after Nov. 5," said Disclosures band member Chad Helminak, who is web producer/member development strategist at the Wisconsin Credit Union League.

SECU recommends ice cream for Bank Transfer Day

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RALEIGH, N.C.  (11/1/11)--Emphasizing the credit union difference, with a twist, State Employees' Credit Union (SECU), Raleigh, N.C., is recommending that potential members don't come in to switch their accounts on Bank Transfer Day, Saturday. Rather, SECU is advising consumers to spend the day with their families--and go get ice cream.

SECU isn't spurning new members. It's emphasizing that making the switch to a new financial institution can't be accomplished in a single day. The process can take from 30 to 60 days, according to the credit union.

The credit union has fined-tuned the switch process during the past nine months. The 23 billion asset SECU initiated its own transfer program in January, well before Bank Transfer Day became a national phenomenon. A simplified switch kit, available online on the credit union's website, provides a checklist of steps to help guide members through the process. 

Staffers are assigned to help new members establish a plan and to initiate phone calls to employers on payroll direct deposits, or to draft letters to insurance agents, utility companies and other businesses for automated clearinghouse items. Creating an individualized switch plan and timeline helps ease member anxiety about the switch process, and helps assure a smooth, "no-miss" transition, said SECU. 

The "ice cream" approach is the best use of a member's time, said Jim Blaine, SECU president/CEO. "The last thing SECU wants is for members to start off on the wrong foot with their credit union experience," Blaine said. "I'm quite certain most SECU members' first choice for the weekend is not sitting in a branch office on a Saturday morning for an hour or so--especially when the switch process cannot be completed in one day."

Blaine estimates the credit union already is working with 25,000 consumers on switching their accounts.

On Saturday, SECU's contact center will be prepared to answer initial basic questions and advise members about the terms of SECU's products and services. Contact center staff also will mail switch kit information packets to interested potential members. "Branch staff will follow-up by meeting individually with members to formulate a well-reasoned plan and timeline for the switch," said Amy Waller, SECU vice president of support services and head of the credit union's Checking Switch initiative. "We're ready."

Oxford FCU partners to help students open checking accounts

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MEXICO, MAINE (10/31/11)--Through a partnership between Oxford FCU (OFCU), Mexico, Maine, and Oxford Hills Middle School (OHMS), 285 eighth grade students learned how to open and use a checking account from financial professionals at the credit union.

Susan Graves, vice president of branch administration at the $134 million asset credit union, and volunteers from the credit union visited Oxford Hills Middle school for two days of instruction and hands on activities, using a workbook and Power Point presentation to teach the basics of using a checking account.

"OFCU is committed to inspiring and enabling financial responsibility starting at an early age," said Cindy Giroux, vice president of human resources and marketing at OFCU. "We feel it's important in this age of technology, to instill good, basic financial habits that can serve as a foundation upon which to build a better financial future."

Oxford FCU is in the third year of partnering with Oxford Hills Middle School where the mission is to provide financial literacy education to students. The classroom instruction taught the 8th graders how to write a check, endorse checks, fill out deposit slips, balance their checkbooks and use a debit card.

As a follow up to the classroom lessons, OFCU arranged a day of continued financial learning at Harvest Hill Farms, where students mixed fun and adventure together, as they applied their new financial skills to maneuver through the "Big Corn Maze Adventure". The corn maze wasn't "just a walk in the stalks," the maze is a labyrinth of passages where students stopped at "Checkbook Stations" strategically located within the maze manned by a teacher from OHMS.

Students were required to write a check, make an entry in their checkbook register or perform some other task they learned in class, in order to proceed through the maze. The credit union supplied each student with a checkbook and register, calculator and pencil, and a backpack bag to carry all their supplies.

OFCU simultaneously conducted three other events at Harvest Hill Farms that reinforced the student's new financial literacy skills. The events included a history of Harvest Hill Farms and a visit to the Petting Farm, where students learned the cost of owning a pet and wrote checks to pay for the upkeep of their own pretend pet. And just to keep it fun, students learned and sang the OFCU jingle which will be posted to You Tube for all to watch and vote on. Each student attended all four events at the farm, as they rotated throughout the day, stopping only for lunch.

"It took a lot of work to pull the event together," said Carlene Treadwell, guidance counselor at OHMS. "But OFCU, with help from teacher volunteers and some good planning, provided both classroom instruction and a day at Harvest Hill Farms for some really valuable education."

"The project began as a question of how OFCU could work with Harvest Hill Farms to help support the community, and after some brainstorming and planning, turned into this fun educational experience," said Kim Davis, OFCU marketing coordinator. "As part of OFCU's sponsorship with Harvest Hill Farms, Susan Graves and I worked with Harvest Hill Farms' marketing and educational coordinator, John Wallace, to create the custom corn maze stations, relating them to the financial literacy theme for the day.

"The kids had fun, and at the same time acquired some great knowledge and skills," she added. "OFCU is proud to provide these kids with financial literacy education; it's what credit unions are all about, helping people and the supporting our community."

CUNA helps kick off Intl Year of Co-ops in N.Y.

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NEW YORK (10/31/11)--Two days of meetings and events starting today in New York City will launch 2012 as the United Nations' International Year of Cooperatives.

The International Year of Cooperatives marks the first time the United Nations has awarded a business model an "International Year" designation. To commemorate the event, more than 150 leaders from some of the world's largest cooperatives have gathered in New York for the official launch, where they will consider how to foster conditions that will ignite cooperative enterprise growth throughout the decade. The leaders come from all sectors of the economy, including financial services, housing, health, retail and agriculture.

"I am looking forward to participating in International Year of Cooperatives events," said Bill Cheney, president/CEO of the Credit Union National Association. "I see this as an opportunity for credit unions to build on all the great attention we've been receiving in media across the country in recent weeks. It is exciting to be launching an international celebration of cooperatives at a point in time, today, when people are particularly receptive to the benefits of the cooperative business model."

"In naming 2012 the U.N. International Year of Cooperatives, the United Nations has both recognized and honored the important role that credit unions and other cooperatives play on the global stage," said Brian Branch, World Council of Credit Unions (WOCCU) president/CEO and one of 20 global leaders invited to serve on the International Year of Cooperatives Advisory Group. "Now it is up to us to advance the good work we have already started."

Today's events at the United Nations begin with a roundtable discussion involving some of the world's top cooperative leaders, including Maria Aranzazu Laskurain, secretary general of Mondragon; Li Chengyu, president of the All China Federation of Supply and Marketing Co-operatives; and Piet Moerland, chairman of Rabobank.

After the roundtable, Dame Pauline Green, president of the International Co-operative Alliance (ICA)will address the U.N. General Assembly. In her address, she will emphasize the important role cooperatives play in global sustainable development and financial stability.

She will be followed by former U.K. Prime Minister Gordon Brown, who will discuss cooperatives' contribution to the global economy.

On Tuesday, leaders of some of the world's largest cooperatives will meet at the ICA Leadership Forum in New York to identify the conditions needed to incite dramatic growth and make cooperative enterprise the fastest-growing business model by the end of the decade. Hosted by Green, delegates will hear keynote presentations from Peter Marks, CEO of the Co-operative Group, U.K., and Monique Leroux, president/CEO of Desjardins Group, Canada. Marks also spoke at WOCCU's July conference.

The Federation of Community Development Credit Unions, based in New York and operating in support of credit unions serving low-income populations, is holding its own kickoff event Tuesday at the Ford Foundation. The event, "New York: Building a Cooperative City," will host speakers from local government and the cooperative sector.

Some of the other national leaders attending the event are Mary Martha Fortney, CEO of the National Association of State Credit Union Supervisors; Charles E. Snyder, president/CEO of the National Consumer Cooperative Bank (NCB).

New York City Council Speaker Christine Quinn will issue a proclamation recognizing the contribution of cooperatives to the life of the city, to be followed by presentations by representatives of credit unions, food, housing and worker co-ops. 

Co-sponsors of the event include the Council of New York Housing Cooperatives and the National Cooperative Bank, along with the federation.

CMG Mobile technology presents challenges opportunities to CUs

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SAN DIEGO (10/31/11)--The rapid growth of mobile technology presents opportunities and challenges as credit unions attempt to meet their members' mobile banking expectations, a lending expert told attendees of the California and Nevada Credit Union League Annual Meeting on Thursday.

Gen Y members aren't alone in embracing the convenience and benefits of smartphones and other mobile devices, said Mark Nelson, LOANLINER specialist, CUNA Mutual Group. A study indicates 25% of Americans say they are now doing most of their browsing on their mobile devices instead of their computers, he added.

"It's interesting and relevant to credit unions that consumers use their mobile devices as a primary method of accessing the internet," said Nelson. "Think about it. If that's their primary method of access to the products and services on your website, are you ready for that?"

Nelson cited a CUNA Mutual Lending Strategies and Trends study in 2010 which showed approximately 30% of credit unions offered mobile-enabled loan applications and nearly the same amount planned to in the future.

"If your members are--or will be--applying for loans on your web site with a mobile device, does that loan application work on a smartphone? Is it suitable for a very small screen on a smartphone?" he asked.

Nelson cited loanliner.com, CUNA Mutual's online loan origination system used by more than 400 credit unions, to illustrate the importance of having the technology members need to navigate a loan document on their smartphones.

He identified two technology approaches to accessing a mobile loan application--Native Apps and Mobile Web. Nelson said when creating loanliner.com technology for mobile devices, CUNA Mutual opted for Mobile Web, which optimizes the loan application for use on a smartphone.

"Rather than installing a program, or app, on the smartphone, Mobile Web detects the browser used by the mobile device and serves up mobile web pages optimized for that device," he explained. "And because compliance is such a significant aspect of our loan origination product, we need to have control over app updates due to the quarterly compliance updates loanliner.com employs.

"In the mobile world, the ability to ensure the member is always applying using the most current and compliant version is complicated by whether the loan application is a Native App or uses the Mobile Web," he added. "We decided the best way to help credit unions remain compliant is to go with Mobile Web."

Nelson said Mobile Web optimizes the Web page to fit the user's mobile device so the user doesn't have to scroll around to see the entire page. "This simplifies and cleans up the page so members can more easily access and navigate a loan app--for example," he said. "It makes it less difficult to navigate the loan application on a small screen and can improve the completion rate of loan applications."

CFPB meets with Affinity on home turf

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ST. PAUL, Minn. (10/31/11)--Members of the senior management team and board of directors of Affinity Plus FCU, St. Paul, Minn., met face to face with Consumer Financial Protection Bureau leaders Wednesday in Minneapolis.

The Affinity Plus team met with Raj Date, special advisor to the secretary of the treasury for the CFPB and, Elizabeth Vale, the bureau's assistant director for community banks and credit unions. Date and Vale were in the Minneapolis-St. Paul area for a town hall meeting and to discuss the bureau's new student lending initiative.

With its "Know Before You Owe" student loan project, the CFPB is helping the Department of Education gather feedback to improve the way schools communicate financial aid offers to students. As part of that project, the bureau has released a one-page "financial aid shopping sheet," a model disclosure form that colleges and universities could use to make the costs and risks of student loans clear  and before students enroll.

Date and Vale met with the Affinity Plus team for about an hour and twenty minutes, Affinity Plus President/CEO Kyle Markland told News Now.

"They wanted to meet with a community financial institution that was involved in students lending mortgage lending and consumer education," Markland said. "Those are all areas we emphasis in building relationships with our members."

Affinity Plus FCU was one of the founders of Credit Union Student Choice, a credit union service organization that offers private student lending. The credit union also has six branches on college campuses, Markland said.

Among the additional products Affinity Plus offers is a Free2BU computer loan that allows students to lower their rate by 2% if they maintain a B average.

The credit union's Fresh Start home loan program combines mortgage lending and consumer education. Members receive a traditional 30-year mortgage with the first 12 months of interest free. As a result, members make payments that reduce their principal balance, allowing them to to build equity. When members enter into the 13th month, they transition into a fixed rate at 1% over the current market rate. During this time the member will create a budget and hold monthly meetings with a credit union representative to help them get back on track.

"We hear a lot of complaints from consumers who are current with their mortgages, but banks won't work with them," Markland said. "This is one of the ways we've responded to that need."

Date and Vale were "impressed and inquisitive" about  the Affinity Plus initatives, Markland said.

Following the meeting, Markland attended the CFPB town hall meeting, which included an open mic session where consumers spoke about negative experiences working with both traditional and nontraditional financial institutions.

These are good, honest people and something bad happened to them, but nobody's there to help them," Markland said. "It was a very sad portion of the night, but it was very eye opening. What you hear about is only the tip of the iceberg."

iChicago Tribunei CUNA notes CUs grow as mortgage option

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MADISON, Wis. (10/31/11)—An Chicago Tribune article on Friday touted credit unions as a borrower-friendly source home owners looking for refinancing options.

The article by syndicated columnist Lew Sichelman will appear in numerous newspapers and other publications nationwide.

Credit unions are on track to originate just $68 billion in mortgages, according to statistics provided by Mike Schenck, senior economist at the Credit Union National Association, for the article.

Although credit unions are often overlooked by loan shoppers, they offer the same loan products as other mortgage lenders, the Tribune said.

"Moreover, credit unions usually don't tack on all the junk fees that more traditional lenders like to charge," the article said. "They also tend to offer better, more personalized service. Indeed, they consistently earn the highest marks among financial institutions in customer satisfaction surveys."

The article specifically cited Kinecta FCU, a California-based credit union with 225,000 members, which recently launched a program that allows high-net-worth members to count a percentage of certain assets as income for qualifying purposes.

ATM suits 17 nonbank operators sued over disclosures

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LAS VEGAS (10/31/11)--A cased filed in U.S. District Court cited 17 Las Vegas nonbank operators of ATMs for for allegedly not following rules about disclosing fees.

Regulation E set by the Federal Reserve a decade ago state that any ATM withdrawal charge, typically $2, must be noticed on or near the machine and on the screen before completing a transaction. Violations can lead to penalties as high as $500,000 (Las Vegas Review-Journal Oct. 28).

The ATMs locations include the Golden Nugget casino, a Greyhound bus station restaurants and convenience stores. But plaintiff's attorney Mark Henness said the main concern is financial institutions that do not provide disclosures.

Many ATM operators are unaware that they must display free disclosures both on the outside of the machine. Many of those cited only displayed the disclosure on screen.

Henness said his law firm is pursuing the cases for the benefit of consumers.

CU delinquencies fall but loan growth could be zero

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MADISON, Wis. (10/31/11)--Although credit union loan delinquencies dropped to a cyclical low in September, this year could see no loan growth for credit unions, according to a Credit Union National Association (CUNA) economist's analysis of September's monthly  sample of credit unions.

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Credit union loans outstanding increased 0.04% during September, the sixth consecutive month of positive loan growth for credit unions. Fixed-rate mortgages led loan growth with a 2.2% increase, followed by used-auto loans (0.3%) and unsecured personal loans (0.1%). Credit card loans decreased 0.5%, home equity loans and new-auto loans both declined 0.6%, and adjustable-rate mortgages fell 2.2%. Credit union loans totaled $581.2 billion, compared with $582.5 billion in September 2010, said the monthly estimates.

"Credit union loan balances were essentially unchanged in September as loan originations were offset by loan amortizations, prepayments and charge-offs," Steve Rick, CUNA senior economist, told News Now. "It appears that 2011 will be the third consecutive year of zero loan growth. We expect loan balances to grow 3% in 2012. However, that will be due to rising job and income growth and the desire by members to release some pent up demand.

"On a brighter note, credit union 60-plus-day loan delinquency rates fell to a new cyclical low of 1.51% in September, down from 1.75% a year earlier," Rick said.

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Credit union savings balances increased 1.4% in September, compared to a 0.5% decrease in August. Share drafts grew 8%, followed by regular shares (1.4%), individual retirement accounts (0.7%), and money market accounts (0.4%). One-year certificates fell 0.5%. Credit union savings in September totaled $838.9 billion--or $1.7 billion more than the $797.2 billion in September 2010.

"Credit union savings balances rose a strong 1.4% in September because of the month ending on a Friday payday; share draft accounts rose by 8%," Rick said. "Savings balances are expected to rise 5% in 2011 with a similar number forecasted for 2012. Until now, members have preferred to pay down existing debt with any surplus funds rather than boost their savings balances."

The loan-to-savings ratio remained at 70%. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 19%.

The movement's overall capital-to-asset ratio remained at 10%. The total dollar amount of capital is $99 billion.

Federal Appeals Court Retailers to pay for replacement card insurance

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BOSTON (10/28/11)--Retailers could be could be responsible for replacement payment cards and identity-theft insurance in the event of data breaches under a federal appellate panel ruling made Wednesday.

In Anderson v. Hannaford Bros. Co., U.S. Court of Appeals First Circuit reversed a decision that dismissed negligence and implied contract claims arising out of a 2007 breach of grocer Hannaford's electronic payment processing system, which resulted in the theft of 4.2 million credit and debit card numbers.

The First Circuit's decision suggests credit and debit card payment processors could be at a higher risk than previously thought of facing class action claims in the wake of data breaches (Oregon Business Report Oct. 27).

A Maine Supreme Judicial Court ruled in September 2010 that victims of the massive data breach that hit Hannaford Bros. supermarkets in 2008 cannot sue for damages if they did not suffer financial losses, physical harm or identity theft (News Now Sept. 23, 2010).

The Hannaford breach occurred between Dec. 7, 2007, and March 10, 2008, when cyber criminals hacked into the grocery store chain's system and accessed card numbers used at 165 Hannaford supermarkets in the Northeast and 106 Sweetbay stores in Florida. Of the four million cards compromised, at least 1,800 numbers stolen were used for unauthorized fraud. The breach was discovered Feb. 27, 2008, and made public March 17, 2008 (News Now April 3, 2009).

The breach caused many credit unions to reissue credit cards to members whose information was compromised. It also resulted in more than 24 lawsuits filed against Hannaford and its parent company, Delhaize America Inc. The cases were consolidated into one central complaint. Attorneys had sought damages for time and money lost as well as damages because Hannaford allegedly knew about the breach three weeks before it was made public. The delay, said attorneys, exposed consumers' accounts to more fraud (News Now Aug. 1, 2008, and April 3, 2009).

Media blitz on CUs benefits to consumers includes Cheney in WSJ

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MADISON, Wis. (10/28/11)--The efforts of credit unions nationwide to accommodate consumers who are tired of higher existing fees and more new fees from large banks continue to garner media attention across the country. Consumers should to look to credit unions to provide what consumers want, Bill Cheney, president /CEO of the Credit Union National Association (CUNA), told The Wall Street Journal in a Thursday article "Beating Those Debit-Card Fees."

"When free checking at banks seems to be disappearing, our survey shows eight out of 10 credit unions still offer at least one free checking account with no minimum balance requirement and no maintenance or activity fees," Cheney told the Journal. The article also mentioned that Beth Page (N.Y.) FCU has gained 1,500 members since Bank of America announced its debit card fee. To read the article, use the link.

In addition to CUNA's own extensive and ongoing outreach to the media, other credit union activities mentioned in the media are:

  • More than 7,000 credit unions nationwide are seeing a surge in new members since Bank of America announced in September its $5 monthly debit fee (abcnews.go.com Oct. 24). Deposits have been flowing into Chicago Patrolman's FCU, Scott Arney, CEO, told ABC News. The credit union is on pace to go 40% above its normal rate of new checking account and debit-card activity in October, he added. To read the article, use the link.
  • Co-op Services CU, a $401.5 million asset, Livonia, Mich.-based CU with 52,000 members, will give new members $105 to shred their  bank debit card and open a checking account with direct deposit at the credit union (e-Banking and Payments News). The move is in response to Bank of America's $5 monthly debit fee.
  • "Bank Transfer Day began as a grassroots movement launched from a laptop by a woman who couldn't take another bank fee," said the introduction to a Dan Rather Reports segment on people moving from large banks to credit unions. "The movement is growing day by day--helping average Americans send the big banks a message by 'un-banking'--taking their business to smaller banks and credit unions."  To view the video clip, use the link.
  • The Maine Credit Union League said it is seeing an increase in members in October (WCSH6.com Oct. 21). It's too early to tell how many of those members are opting for credit unions as a result of a national movement--Bank Transfer Day--to induce people to leave big banks for credit unions by Nov. 5, but it's evident more consumers are shopping around, league President John Murphy told the station. "What we're pleased to see is that consumers know they have a choice, and that we believe credit unions are the best choice for consumer financial services," Murphy added.
  • The Disclosures, the credit union industry's thrift rock duo, Christopher Morris and Chad Helminak, have recently posted videos that credit unions can use to highlight the credit union difference in advance of Bank Transfer Day, Nov. 5. Morris is director of communications for the National Credit Union Foundation. Helminak is the web and member development strategist at the Wisconsin Credit Union League. To view the videos, use the link.

Mid-Atlantic CorpVACORP announce NCUA merger approvalbr

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MIDDLETOWN, Pa. and LYNCHBURG, Va. (10/28/11)--Mid-Atlantic Corporate FCU, Littletown, Pa., and VACORP FCU, Lynchburg, Va., announced today that the National Credit Union Administration (NCUA) unanimously approved their merger plan at the agency's closed board meeting Thursday.

"Both corporates performed extensive due diligence, and undertook many months of planning and operational review before submitting our merger plan," said Jay Murray, president/CEO of Mid-Atlantic Corporate. "With the consent of the NCUA board, we can now move ahead with a vote by the memberships of both of our corporates."

Members of both corporates will vote on the proposed merger and the results will be announced at VACORP's special meeting scheduled for Nov. 15. If members vote to approve combining the two institutions, the formal merger date is expected to be March 31.

"I believe our members will find this to be a very beneficial merger," said Don Chapman, president/CEO of VACORP. "From the outset, it has been very important to VACORP to seek a partner that offers high-quality programs and can ensure full-service continuity. Mid-Atlantic Corporate hit the mark on both of these requirements. Further, our member credit unions will be able to take advantage of a wider array of products and services--something very important to ensuring their success going forward."

Pinellas FCU acquires POC FCU in merger

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LARGO, Fla. (10/28/11)--Pinnellas FCU, Largo, Fla., has acquired the assets of POC FCU, St. Petersburg, Fla., in a merger.

The $82.6 million asset Pinellas added $500,000 in assets and roughly 650 members to its 12,554-member existing base from the merger with POC (Tampa Bay Business Journal Oct. 21).

The Aug. 31 merger is one of at least six credit union mergers in Florida so far this year, the Journal said.

In the U.S., between Jan. 1 and Sept. 29, there were 125 reported mergers, according to the National Credit Union Administration.

POC pursued a merge following the loss of its sponsorship from the Pinellas Opportunity Council--a network of 1,100 private nonprofit and public community action agencies, the Journal said.

Ohio CU foundation reserves support CU initiatives

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COLUMBUS, Ohio (10/28/11)--The Ohio Credit Union Foundation Board of Trustees approved allocating money from reserves--its endowment fund--to meet rising demand for grants to continue its tradition of supporting educational and outreach initiatives that strengthen Ohio's credit unions and their communities.

Donations received by the foundation during a calendar year are used to create the ensuing year's grant-making budget. In 2010, $177,000 was donated by individuals, credit unions and business partners. However, the 2011 grant-making budget was nearly depleted by the end of September. Meanwhile, the grant assistance needs of Ohio's credit unions continue to grow, the foundation said (e-Lumination Newsletter Oct. 5).

"As a result, the foundation board proactively allocated grant dollars from its endowment fund," said Board Chair Tom Furrey. "The foundation will now be able to fund grants beyond its original 2011 grant-making budget, and further help credit unions meet their training, outreach, and financial education needs for the balance of 2011."

So far in 2011, grants awarded include: student-run credit unions, financial reality fairs, Biz Kid$ production, state and national professional development opportunities, scholarships for post-secondary education, and disaster relief.

Dominican CUs learn lobbying lessons

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SANTO DOMINGO, Dominican Republic (10/28/11)--Credit unions must approach legislators with a single, unified message. This is the message a Wisconsin Credit Union League (WCUL) contingent conveyed during a governmental affairs training program for 13 credit unions in the Dominican Republic.

A three-person Wisconsin Credit Union League (WCUL) delegation last week traveled to the Dominican Republic in a visit arranged through the World Council of Credit Unions' (WOCCU) International Partnerships Program. Here, WCUL and AIRAC representatives examine farmer David Kreh's aji pepper crop. From left, WCUL President/CEO Brett Thompson; AIRAC President/CEO Virginio Gerardo and Business Manager Teresa Cruz; Kreh; and COOPCENTRAL's Regional Manager Francisco Cedano and Risk Manager Efrain Lugo. (Photo provided by the Wisconsin Credit Union League)
The three-person Wisconsin delegation last week traveled to the Caribbean island nation to provide education and visit credit unions serving agricultural members.

World Council of Credit Unions (WOCCU) arranged the visit through its International Partnerships Program, which first paired WCUL with the Asociación de Instituciones Rurales de Ahorro y Crédito (AIRAC), the country's credit union trade group, in 2007. Immediately following the visit, a delegation of 15 credit union volunteers and executives from the Dominican Republic visited WOCCU's Madison headquarters, WCUL's offices and credit unions in southern Wisconsin to study operations and other activities.

The Wisconsin delegation was encouraged by AIRAC's enthusiasm for the topics covered in the Oct. 18 workshop on lobbying techniques, according to WCUL President and CEO Brett Thompson.

"Crafting the right message is critical to any successful lobbying effort," said Thompson, who was accompanied by Tom Liebe, WCUL's governmental affairs vice president; Patricia Wesenberg, president/CEO of Central City CU in Marshfield, Wis., and board secretary for Credit Union National Association,; and Joshua Fetting, WOCCU International Partnerships officer. "We're pleased that our seminar was greeted with such an enthusiastic response," Thompson added

The one-day workshop attracted 35 attendees representing 13 of AIRAC's 15 member credit unions. Liebe and others urged participants to establish an advocacy position based on the benefits credit unions provide their members and to speak in a united voice when addressing government officials.

German Robles, assistant director of IDECOOP, the Dominican Republic's financial regulator, opened the workshop with his remarks.

In addition to the workshop, the delegation traveled to Las Matas de Farfán to visit COOPCENTRAL, a credit union serving the local agricultural community. The group also visited two farms growing aji peppers and other crops in operations funded by credit union loans.

Participation in the Dominican Republic workshop and the subsequent visit to Wisconsin offered extensive lessons in ways to make credit unions more successful, according to Alfredo Dorejo, president/CEO of Cooperativa Mamoncito, who was part of both activities.

"The lobbying workshop provided many tools we can use to more successfully lobby on behalf of credit unions," Dorejo said. "We also learned a little bit about public relations and the need to focus on member education to help our credit unions grow."

The Dominican Republic delegation visit, which ends this week, was arranged through the new WOCCU Customized Learning Program.

CUNA leagues help CUs gear up for Bank Transfer Dayandnbsp

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MADISON, Wis. (10/27/11)--With Bank Transfer Day (BTD) looming on the horizon Nov. 5, it's difficult to forecast how much of the pent-up frustration and anger against big banks will result in consumers switching their business from banks to credit unions.

However, it is abundantly clear that the idea of BTD, originated by California art dealer Kristen Christian, has captured the public's imagination. Therefore, credit unions want to be willing and ready to welcome new members.

Evidence indicates that people are already acting to transfer their business into the more consumer-friendly credit union model. Media outlets nationwide are reporting on BTD momentum, in which people are signing up to leave large banks in favor of credit unions on or before Saturday, Nov. 5. As of a week ago, more than 51,000 people had signed up for Bank Transfer Day on Facebook, and a cause page for the event has garnered more than 15,000 "likes." More than 400,000 Facebook users have been exposed to the idea of Bank Transfer Day via the Facebook page.

Yet, it is also true that the difficulty of transferring all business from one institution to another may impede all but those with the keenest desire from acting on a single day.

Just as National Credit Union Administration issued guidance to bank examiners on how to treat an influx of deposits if they occur on Nov. 5, the Credit Union National Association (CUNA) has also acted to help credit unions prepare.

In addition to its own extensive and ongoing outreach to the media, CUNA provided materials to the state leagues in advance of BTD that include a "ready sheet" on how to prepare for BTD; question-and-answer pages to help credit unions answer negative questions that banks are feeding reporters to help their customers from moving to credit unions; talking points so credit unions nationwide can share the same position about BTD; and a model press release for credit unions to use to indicate how they are ready to accept new members as a result of BTD. 

Also, CUNA is offering two new T-shirt designs aimed to give credit unions another option to capture the energy of this event. These T-shirts are designed to thank new joiners and reward existing members--in conjunction with Bank Transfer Day or any other time. The T-shirts are available for sale at CUNA's ICU Day website. Use the link.

There also are several drive-up envelopes and statement stuffers on CUNA's website that share the benefits of credit union membership, including one new drive-up envelope created in response to the unhappiness with increasing fees:

In tandem with CUNA, state credit union leagues nationwide have taken action in advance of BTD:

  • The Pennyslvania Credit Union Association used its daily newsletter, Life Is A Highway, to announce Monday that resource materials were posted on its website to help credit unions prepare for Bank Transfer Day. Another article with tips to help new members in transferring their funds will be included in this week's biweekly online newsletter, Keystone Extra. The association knows that credit unions were interested in this material because it received some questions and requests for password access to the information on the website.
  • Northwest credit unions continue to experience a surge in new memberships, due to backlash from recent big bank fee increase announcements and fueled by the BTD organic Facebook movement, said the Northwest Credit Union Association, which represents credit unions in Washington and Oregon. Credit unions are extending hours and outreach in many cases to help new members. The association published an article "Northwest Credit Unions Respond to Bank Transfer Day," in its newsletter today to pique members' interest.
  • The Credit Union Association of the Dakotas (CUAD), which represents credit unions in North Dakota and South Dakota, held a conference call for its member credit unions to prepare them for the potential impact of BTD. About 40 Dakota credit unions participated in the conference call that focused on preparing members for potential media inquiries and prospective consumer calls.  Materials were sent to each credit union that provided background information, talking points, a sample press release and other suggestions to ensure that participants are prepared for the influx of new accounts.
  • The Texas Credit Union League established an 11-event calendar of activities running from Oct. 5 through Nov. 5 to inform members and garner support for BTD. The league said it will heavily use social media on all of the calendar activities. Some events are "Blog Talk Radio" in which a special credit union guest talks about BTD; a debit card factoid release for credit unions; and a statewide event, activity or action that still is being formulated for Nov. 5.
  • The Ohio Credit Union League has been working individually with credit unions that are showing an interest in BTD. The league's message to its credit unions has been simple: Take advantage of the heightened media awareness and consumer angst, but do so by sharing positive credit union messages and avoiding bank bashing. It also has heard from a couple of credit unions, so far, planning to run promotions on BTD involving staff and members.
  • The New Jersey Credit Unions League set up a page on its website with various resources. Use the link. It also is running 10-second radio spots this week and next, pointing consumers to aSmarterChoice.org to find a credit union to which they can transfer.
  • The Utah Credit Union Association had its president, Scott Simpson, interviewed in two state media outlets, The Salt Lake Tribune and Fox 13now.com, promoting BTD.  

League of S.E. CUs get kudos from AlabamaFlorida CUs br

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BIRMINGHAM, Ala. and TALLAHASSEE, Fla. (10/27/11)--The results from the League of

Southeastern Credit Unions (LSCU) second annual member survey show a positive trend:

credit unions in Alabama and Florida approve of the job being done by the league and

more are seeing the value for their dues dollars, LSCU said.

When asked about their satisfaction with the new league, 92% of responding credit unions indicated that their satisfaction increased or stayed the same over last year. This is an increase of four percent from 2010. Also, 89% said the promises of the consolidation of the Alabama and Florida Leagues are being realized. That is a 20% increase from a year ago.

The memberships of the Florida Credit Union League (FCUL) and the Alabama Credit Union League voted overwhelmingly in March 2009 to combine the leagues into one entity, LSCU. "Credit unions from both states will benefit in this consolidation," Rich Helber, FCUL chairman said at the time of the merger. "Coming together as the League of Southeastern Credit Unions will create a stronger, more strategic position for all of our credit unions in numerous areas" (News Now March 6, 2009).

"For many credit unions, we knew it would take a year for them to not only see the

improved service from the new League, but to feel it" said Patrick La Pine, LSCU President/CEO. "We've made over 700 in-person visits with our credit unions. We sit down and listen to them and assist them with their needs. The survey numbers I'm most proud of show that 98% feel our staff is responsive and 98% feel our staff is professional and knowledgeable. We've worked hard over the last two years to develop a culture of superior member service, and our credit union community is seeing and experiencing the LSCU difference."

Almost across the board, credit unions are seeing an even higher value from LSCU.

When asked if the league is a good value for its dues dollars, 92% said yes, a 15% increase from 2010. Also, 93% said the league is meeting their needs, an increase of 5% from last year. One hundred percent of responding credit unions say the league keeps them well informed--a 6% increase from 2010.

Advocacy always ranks high for credit unions when it comes to affiliation, the league said. When asked if the LSCU does an effective job at the state capitols, 94% agreed it does; a 2% increase from a year ago. As for advocating in Washington, D.C., 95% feel the league is doing a good job, a 6% increase from a year ago.

Many more credit unions are looking to the League for regulatory help. Eighty-eight percent say League InfoSight is a useful tool; a 16% increase from 2010. While, 93% said the league is helpful with their compliance questions. This is a 20% increase from a year ago.

"We have ramped up our governmental affairs team to include two new state legislative

directors this year," La Pine said. "Subsequently, our credit unions are seeing an increased emphasis on state-chartered credit union issues in Montgomery and Tallahassee, as well as in Washington, D.C. Our regulatory staff has a wealth of knowledge and we're doing more to

communicate with credit unions on regulatory and compliance issues and put our credit

unions in front of their state and federal regulators."

LSCU added more workshops and webinars in 2011 and that translates to 89% that said the league is meeting their educational needs, an increase of 18% from 2010. All of the workshops and webinars feature online registrations. Ninety-five percent of credit unions say the LSCU website is informative and useful; this is an increase of 19% from last year.

When the members survey was facilitated in 2010, LEVERAGE, the League Service

Corporation, had just changed its name. A year later, 89% said LEVERAGE is a

trusted business partner. When asked if LEVERAGE provides a good value to credit

unions, 86% credit unions say it does--a 6% increase from a year ago.

"The results of the survey show that the league is on the right track," La Pine said. "We have more work to do in some areas, but it's nice to see that credit unions are working closer with the league for products and services. We're working hard to meet their needs during these tough economic times."

Mid-Atlantic Corp. continues to add members capital

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MIDDLETOWN, Pa. (10/27/11)--Having reached the necessary capital levels to continue to operate under the National Credit Union Administration's new corporate regulation over 15 months ago, Mid-Atlantic Corporate continues to add more capital and new members.

More than 700 credit unions have committed over $129 million in capital--$119 million of which is in perpetual contributed capital (PCC)--to Mid-Atlantic Corporate CU.

"As the first corporate to develop a new business plan to achieve the necessary regulatory capital levels, we've been able to spend the last year focusing on new ways to save our members money by "group buying" electricity, office supplies and other back office support functions," said Jay Murray, Mid-Atlantic Corporate president/CEO. 

Murray said Mid-Atlantic prepared itself for new regulatory realities and other marketplace changes. "Based on discussion with NCUA, we knew  more capital would be needed to offer all services that we do and and, most importantly continue with our lines of credit. The purpose of corporate credit unions is to provide liquidity and you can't do that without a balance sheet."

As for whether Mid-Atlantic Corporate will continue to add new credit unions, Murray said it has received interest from credit unions nationwide and has the infrastructure in place to assist those credit unions that need to find alternative solutions to their current service providers. 

"The NCUA's new corporate regulation has created a more stringent operating environment," Murray said. "However, we've created a business plan that will allow us to continue to add members without creating a negative impact to our balance sheet.  And because of our membership's support, we are well-positioned to continue to serve the needs of credit unions for a long time."

Western CUNA Mgt. School adds board member

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POMONA, Calif. (10/27/11)--Kevin Foster-Keddie, president/CEO of Washington State Employees CU, Olympia, Wash., has been named to the Western CUNA Management School (WCMS) Board of Trustees.

The board--comprising nine credit union CEOs, two league presidents, the WCMS president, and WCMS provost--is responsible for oversight and direction of the school.

Foster-Keddie has been a frequent recipient of industry recognition and accolades, including the Credit Union National Association's Bergengren Award for High Achievement and the California Credit Union League's Kim Bannan Eternal Flame Award.

"Kevin's long-time involvement with the credit union movement as well as his knowledge of WCMS makes him a great addition to the board," said Patsy Van Ouwerkerk, chairman of the WCMS Board of Trustees and president/CEO of Travis CU in Vacaville, Calif.

WCMS serves credit unions in the 13 western states and is sponsored by the associations for those credit unions, including the Alaska Credit Union League, California Credit Union League, Credit Union Association of New Mexico, Hawaii Credit Union League, Idaho Credit Union League, Montana Credit Union League, Mountain West Credit Union Association, Nevada Credit Union League, Northwest Credit Union Association, and Utah Credit Union Association, in cooperation with Pomona College in Claremont, Calif.

Missouri CUs take a closer look at SBA lending

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ST. LOUIS (10/26/11)--Credit unions community-focused brand of financial services makes them good candidates for Small Business Administration (SBA) lending programs an SBA district director told News Now following a training session with Missouri credit unions.

Ten representatives from seven St. Louis area credit unions and Heartland Business Services participated in Small Business Administration (SBA) lender training on Oct. 19.

The session took place at the office of U.S. Rep. Russ Carnahan (D-Mo.), who suggested the event during an in-district meeting in August, and was organized with the SBA and the Missouri Credit Union Association (MCUA).

"We were thrilled to see so many credit union loan officers display their interest in starting or expanding small business lending to their entrepreneurial members as this is what drives economic development and the creation of jobs in our communities," Dennis Melton, district director for the Small Business Administration told the MCUA.

"I think part of the reason the SBA is a good fit for credit unions is because some credit union members are small business owners," Melton told News Now.  "Anytime you provide business owners access to capital you are helping economic development in your community, and credit unions are community oriented."

Participants received an overview of loan programs available through the SBA and learned how credit unions can get involved in SBA programs.

SBA does not make direct loans to small businesses. Rather, it sets the guidelines for loans, which are then made by its lending partner, such as credit unions. The SBA guarantees that these loans will be repaid, thereby eliminating some of the risk to the lending partners.

When a member comes in and says he wants to start or expand his business, the SBA program gives the credit union can give the credit union more opportunity to help him out.  The idea is that get lender can dig into credit pool then would have without the SBA, because the SBA offers protection on a portion of exposure".

During the workshop, Mike Nickel from Altra FCU in La Crosse, Wis. shared his credit union's SBA lending experience and best practices.

"With the current legislative challenges credit unions face in increasing the arbitrary limit on credit union business loans, SBA loans can be a vital component in helping credit unions manage the member business lending cap," said Scott Brothers, commercial business development officer for Neighbors CU, St. Louis.

Attendees asked questions and shared successes, concerns and challenges they face while working on SBA loans for members.

Among the credit unions that participated in the event:

  • Alliance CU, Fenton, Mo.;
  • Anheuser-Busch Employees' CU, St. Louis;
  • Arsenal CU, Arnold, Mo.;
  • Electro Savings CU, St. Louis;
  • Gateway Metro FCU, St. Louis;
  • Neighbors CU, St. Louis; and
  • West Community, O'Fallon, Mo.
MCUA said it will work with the SBA to develop follow-up programs.

CUNA and credit unions are urging the U.S. Congress to increase credit unions' MBL cap to 27.5% from the current 12.25%. 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, according to CUNA.

Defense CU Council sponsors Operation Best Wishes

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WASHINGTON, D.C. (10/26/11)--This holiday season, the Defense CU Council will once again sponsor Operation Best Wishes, the mobile studio that gives family and friends of military members the opportunity to send video messages.

The studio comes with cameras, lights and a technician, the ability to superimpose families over moving backgrounds through the use of a "green screen." Families and the military alike record their personal greetings free of charge.

The holiday video cards come complete with a password that is used to view the greeting time and time again on the Operation Best Wishes website.

The annual campaign, about to launch its eighth national tour, is sponsored by the Defense Credit Union Council and its member credit unions serving the military and their families.

"Nothing can replace the warm embrace of a spouse, the kids or family members during the holidays," noted Arty Arteaga, President/CEO of the Washington, D.C.-based Defense Credit Union Council. "However, by providing an opportunity to reach out with a video greeting card that's memorable and different from Skyping or the usual e-mail exchanges, our credit unions hope to offer the next best thing to being there and by doing so, brighten the holiday season for those who serve our country and for their families as well.

"Connecting military families is just a small token of our appreciation for those who make great scarifies on a daily basis," added Arteaga.

Operation Best Wishes will kickoff its national tour at Andrews FCU, Suitland, Md. during the week of Nov. 14 by visiting their branches at Joint Base McGuire-Dix-Lakehurst in New Jersey and Joint Base Andrews in Maryland. Other stops along the tour include: Hanscom FCU, Hanscom Air Force Base, Mass.; AmeriCU Credit Union, Rome, N.Y.; Kirtland FCU, Albuquerque, N.M.; and Sea Air FCU, Seal Beach, Calif. The tour concludes on Dec. 16 at Hawaiian Tel FCU, Honolulu.

The Defense Credit Union Council is a niche membership association representing the interests of credit unions operating on military installations worldwide. By maintaining a close and constant liaison with the Pentagon, the council supports its member credit unions and the Department of Defense (DoD) in coordinating policy, procedures and legislation impacting morale and welfare, financial readiness, and the delivery of quality financial products and services to DoD personnel and their families. The council comprises 235 credit unions serving more than 14 million members.

Holy Rosary CU hosts American Cancer Society Hot Spot

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ROCHESTER, N.H. (10/26/11)--Holy Rosary CU's Dover, N.H., branch recently hosted the "Pink Hot Spot" for the American Cancer Society's Annual Making Strides Against Breast Cancer 5K walk/run.

For the third year, Holy Rosary CU's Dover, N.H. branch was the site for American Cancer Society's Annual Making Strides Against Breast Cancer 5K walk/run participants to pick up their T-shirts and team packets and drop off donations. Front row, from left: Rosemary Shields, Holy Rosary CU's vice president of operations; Megan Dean; and Kristy Randazzo, Dover branch manager. Back row, from left: Virgie McQuade, Dover assistant branch manager; Michelle Brown; Nicole Huntress; Christine Donnelly; Carol Breadmore; Kalena Bartoszak and Sarah Kirkwood. (Photo provided by Holy Rosary CU)
For the past three years, the Holy Rosary CU branch has been chosen as the financial institution representing the Hot Spot for this event.

As the Pink Hot Spot, Holy Rosary CU in Dover was the site for individuals and teams to pick up T-shirts, team packets and drop off donations.

Every year in honor of breast cancer awareness, Holy Rosary paints murals on its windows and purchases special give-a-ways for the branch. This year was the credit union's first time taking part in the 5k Run/Walk. Some Holy Rosary CU staff walked on behalf of family members.

"It was great that we were able to take part in the event this year," says Kristy Randazzo, branch manager. "This year was extra special as we HRCU staff members walking on behalf of a family member."

The American Cancer Society's "Making Strides Against Breast Cancer Walk" brings together communities to educate people about ways to reduce risk, celebrate those who have combated breast cancer, and to empower communities to join in on the fight.

Since 1993, nearly 7 million walkers have raised more than $400 million dollars to help fight breast cancer through the participation in the noncompetitive, three- to five-mile events. In 2010, nearly 800,000 walkers nationwide collected more than $60 million to help save lives from breast cancer.

CUNA Mutual mortgage insurance company pledges service

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MADISON, Wis. (10/27/11)--CMG Mortgage Insurance Company (CMG MI) responded Friday to the Maricopa County, Ariz., superior court order directing the Arizona Director of the Department of Insurance to take possession and control of PMI Mortgage Insurance Co. (PMI).

PMI currently owns a 50% stake in CMG MI, the other 50% being owned by Madison, Wis.-based CUNA Mutual Group.

CMG MI's executive leadership emphasized that the company's operations remain strong despite this announcement, and that the company's focus on credit unions' mortgage insurance needs is unaffected. CMG MI is a stand-alone, corporate entity with its own capital and dedicated staffing from its shareholders. Arizona's regulatory action with PMI has no impact on CMG MI's operations and claims-paying activities.

"We remain dedicated to providing the same excellent service credit unions have grown to expect from our company," said Kim Shaul, CMG MI senior vice president and co-general manager.

"In addition to the company's solid operating performance and financial strength, CMG MI continues to enjoy the strong support from its joint venture partner CUNA Mutual Group," said Sean Dilweg, CUNA Mutual Group vice president. Dilweg reiterated earlier statements that: "CMG MI will continue to benefit from CUNA Mutual's management and financial strength as well as PMI's ongoing operational services and expertise. The company is committed to serving credit unions over the long term."

The following are key factors supporting CMG MI's solid financial position:

  • CUNA Mutual Group's statutory capital, which grew to $1.45 billion through June, up $30 million from year-end 2010. The company holds an "A" (Excellent) A.M. Best financial strength rating with a Stable Outlook.
  • As of the last available reporting period, June 30, CMG MI had among the industry's strongest financial and operating ratios, including a risk-to-capital ratio of approximately 19.7:1 and the industry's lowest portfolio delinquency ratio at 5.3%.
  • As a separate legal entity, CMG MI's investment grade ratings--BBB from Standard & Poor's (S&P) and BBB from Fitch Ratings (Fitch)--are based primarily on CMG MI's own capital, operating performance and loss mitigation efforts, independent of our shareholders. CMG MI's Standard & Poor's rating was reaffirmed in September, while the Fitch rating was affirmed in July of this year.
  • As of June 30, CMG MI enjoyed a strong two-to-one liquidity-to-reserves ratio, one of the highest in the mortgage insurance industry, with claims-paying resources, backed by cash and readily marketable securities of $328 million. This liquidity compares favorably to the company's $171 million in loss reserves for claims as of the end of second quarter 2011.

Peninsula Methodist FCU to merge with Dover FCU

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DOVER, Del. (10/26/11)--Dover (Del.) FCU announced that, effective Oct. 1, it has completed incorporation of Peninsula Methodist FCU, Crisfield, Md., into its membership and operations.

Peninsula Methodist FCU, a $198,000 asset faith-based credit union serving 155 ministers and employees of Methodist churches located in Delaware and the Eastern Shore of Maryland, had no full-time employees or branch locations. Peninsula offered loans and savings accounts to its members.

The merger with $330 million asset Dover FCU expands the services available to former Peninsula members who will now have access to more financial products, including Dover FCU's low-rate loans and no-fee checking accounts with no minimum balance restrictions.

Peninsula savings accounts have been automatically converted to basic share savings accounts at Dover FCU.

David Clendaniel, CEO of Dover FCU, said that the credit union was looking forward to welcoming its new members. "Dover Federal draws its strength from its membership and gives back to its members in the form of low-cost financial services and great member service," he said. "We welcome all our new members from Peninsula Methodist FCU."

Ohio league completes board elections

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COLMBUS, Ohio (10/26/11)--The Ohio Credit Union League recently completed its board elections.

Mike Kurish, CEO of Associated School ECU, Youngstown, Ohio, has been elected to the Ohio Credit Union League 2012 board of directors to continue representing credit unions in the Mahoning Valley, Northeast, Ohio Valley, Stark County and Summit Chapters (e-Lumination Newsletter Oct. 19.)

John ("Jack") Wilster, chairman of Seven Seventeen CU, Warren, was the other candidate vying for the District IV seat. The ballot vote election concluded Oct. 17.

Four league directors were elected by acclamation in August: Christine Blake of Cardinal Community CU, Mentor, will represent Membership Category B; Scott Hicks of Tiffin (Ohio) St. Joseph FCU, will represent District I; Sandy McCormick of Total Assurance FCU, Worthington, will represent Membership Category A; and Kevin Ralofsky of VacationLand FCU, Sandusky, will represent District III.

Terms for the newly elected directors will begin in February and expire in 2015.

Maryland CUs focus on MBLs reported

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GAITHERSBURG, Md. (10/26/11)--An article on Gazette.net described how Maryland credit union member business lending (MBL) is helping state small businesses.

"More credit unions, which have long focused on consumer lending, have been offering business loans, particularly serving an often neglected small-business segment," explains the article, headlined "Maryland credit unions sharpen focus on commercial lending."

The article cites Credit Union National Association (CUNA) statistics that say 30% of credit unions provided members the opportunity to obtain business loans in June, up from 25% in 2007.

National Institutes of Health (NIH) FCU, Rockville, Md., is featured in the article. The MBL program at NIH FCU began last year. The credit union has about $14 million in business loan volume, with most loans ranging from $250,000 to $500,000, said CEO Juli Anne Callis.

The article describes how NIH FCU provided an MBL to Maryland dentist Steven Rattner, who sought a lender to refinance his commercial property.

"The application was quick and straightforward, plus [credit union] representatives had an impressive one-on-one approach that helped me understand the process while also saving me valuable time," Rattner in the article.

The article also describes how CUNA and credit unions are urging the U.S. Congress to increase credit unions' MBL cap to 27.5% from the current 12.25%. 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, according to CUNA.

In other MBL news, the Michigan Credit Union League (MCUL) recently facilitated a discussion with  U.S. Rep. John Dingell (D-Mich.) at his district office in Dearborn, Mich. Jim Kirk, director of community relations at University of Michigan CU, Ann Arbor, Mich.; Mike Newman, president/CEO of Monroe County Community CU, Monroe, Mich.; and Tony Carnarvon, president/CEO of Co-Op Services CU, Livonia, Mich.; discussed the importance of pending MBL legislation in making more credit available to Michigan businesses.

In addition to discussing bill language specifics, credit union leaders in attendance provided Dingell with letters of support from both the Department of Treasury and National Credit Union Administration. The MCUL also shared CUNA's "Open Letter," which highlights the growing list of other trade associations/groups supporting the MBL authority increase. The participants asked Dingell to consider co-sponsoring the legislation. H.R. 1418 currently has seven co-sponsors from Michigan.

To read the article, use the link.

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.

NCUF offers free nonprime auto loan toolkit

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MADISON, Wis. (10/24/11)--Credit unions trying to bolster their auto-loan portfolios now can use a free Non-Prime Auto Loan Toolkit from the National Credit Union Foundation's (NCUF) REAL Solutions program.

The toolkit provides underwriting guidelines, techniques to mitigate risks, pricing guides, credit union examples and a loan portfolio management guide.

Many households are struggling financially and a dependable automobile can be the key to having a job or a better-paying job. The households may look at the corner buy-here-pay-here auto lot as their only option and find themselves caught in a costly loan with an unreliable car, NCUF said.

"There is tremendous opportunity for credit unions to reach out to this market that has been mis-served by predatory and non-traditional lenders," wrote Nancy Pierce in the toolkit's introduction. "The estimated size of the non-prime auto market ranges from $100 billion to $200 billion. Yet, as credit unions put more non-prime borrowers into automobiles, they need to do so prudently and with clear understanding of the increased risks they are undertaking."

"Prudent pricing for non-prime auto loans can boost a credit union's bottom line," Pierce noted. "It also simultaneously fulfills a social and economic need by provide consumers with the economic mobility that comes with the mobility of affordable, reliable wheels."

The free toolkit is available to credit unions at realsolutions.coop. It also suggests Enterprise Car Sales as one option for a quality car at a good value.

Vantage CEO attends MLK memorial dedication

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BRIDGETON, Mo. (10/24/11)--Hubert Hoosman Jr., president/CEO of Vantage CU, Bridgetown, Mo., flew to Washington, D.C., last weekend for the official Martin Luther King Jr. National Memorial Dedication.

Some African-American Credit Union Coalition Board members were in Washington, D.C., last weekend for the official Martin Luther King, Jr. memorial dedication. They include, from left,  Lynette Smith, secretary; Melinda Edmunds, membership; Sheilah Montgomery, chairperson; Barbara Stephens; and Vantage CU CEO Hubert Hoosman. (Photo provided by Vantage CU)


Hoosman was invited after challenging credit unions across the U.S. to donate funds for the memorial project. Credit unions answered the call, pledging more than $1 million to the project.

The official dedication paid tribute to King with words from noted civil rights leaders and King family members, as well as talented artists, musicians and poets. President Barack Obama delivered the official dedication address. The dedication originally scheduled for August, was postponed by Hurricane Irene.

"It was awe inspiring. It was spiritual--bringing tears to the eyes of everyone in the crowd," Hoosman said. "It truly was a once in a lifetime moment. There are not enough words to describe what it meant to be there in Washington as they officially dedicated the memorial. I'm sincerely humbled by the entire experience."

Hundreds attended the grand gala Saturday night, where Hoosman met the sculptor Master Lei Yixin. Credit Unions of America were acknowledged at the reception, in part through Hoosman's tireless efforts on behalf of the cause. Thousands more from around the world attended the formal dedication ceremony Sunday, where dignitaries include civil rights leaders Andrew Young and Jessie Jackson, U.S. Rep. John Lewis (D-Georgia) and poet Nikki Giovanni.

St. Louis civil rights leader Dick Gregory and others presided.

"It was such a dynamic event, filled with inspiring individuals," Hoosman said. "All of the presenters had a singular focus on the future. You left knowing that the quest for civil rights and equality for all individuals will never die out."

Church to pull 3M out of BofA for local CU

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SAN JOSE, Calif. (10/24/11)--A church in California is ending a longer-than 20-year relationship with Bank of America (BofA) and moving its $3 million into a local credit union.

Most Holy Trinity Church and its school in San Jose, Calif., are moving their money to Micro Branch CU to say, "'No more' to Bank of America to use our money in investing in bad loans and not negotiating fairly," said Pastor Eduardo Samaniego (Good Culture Oct. 21).

Samaniego said he is joining with others in solidarity in calling for the California State Attorney General to pursue litigation against BofA, Wells Fargo and other banks "to help struggling homeowners keep their homes."

He hopes other states' attorneys general follow suit, Samaniego added.

To see the announcement by Most Holy Trinity, use the video link.

One in four rate personal fin. situation as poor

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WASHINGTON, D.C. (10/24/11)--Nearly one in four U.S. adults (22%) rate their personal financial situation as "poor," a slight increase from the 16% to 19% range during and after the recent recession, and the highest percentage since Gallup began asking thequestion in its annual poll in 2001.

Twice as many Americans say their financial situation is either excellent (7%) or good (37%), but that is on the low end of what Gallup has measured in the past. The question is asked each April as part of Gallup's Economy and Personal Finance survey, and has been asked periodically at other times since August 2001. The current results are based on an Oct. 6-9 Gallup poll.

Credit unions will be interested to know Americans also are less optimistic about their future personal financial situations. Nearly half (48%) say their personal financial situation is "getting worse," up from 41% in April and nearly tying the record-high 49% who said so in April 2008. A new low-- 29%--say their personal financial situation is getting better.

About 78% of those earning $75,000 or more per year rate their situation as excellent or good, compared with 14% of those making less than $30,000 per year. This is a wider gap than was seen in April, when those percentages were 67% and 20%, respectively. At the same time, all income groups have become less likely to say their financial situation is getting better, and now 60% of the lowest income group says their personal financial situation is getting worse.

When asked about the most important financial problem facing their family, lack of money/low wages (14%), too much debt (13%), high cost of living/inflation (13%), healthcare costs (12%), and unemployment/loss of job (10%) are most often cited. Lack of money/low wages was the clear leader in July, and it has been either first or tied for first in every measurement since February 2009.

Credit unions noting these trends can step up their efforts to assist members through rough times and ensuring members are educated about their financial options.

iYahoo Newsi more ICU Day coverage stronger than usual

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MADISON, Wis. (10/24/11)--Consumer unrest over high bank fees helped put International Credit Union Day (ICU Day) on the media map this year, and some credit unions adapted their activities to convert accounts from banks as Bank Transfer Day Nov. 5 nears.

With consumers agitated about high bank fees as Bank Transfer Day nears, International Credit Union Day received more media converge than usual. Chippewa Eagle FCU, Mt. Pleasant, Mich., celebrated by offering its members cake. The credit union also paid the $5 minimum deposit for anyone who opened an account on ICU Day. (Photo provided by  Chippewa Eagle FCU) "Thanks to the Occupy Wall Street movement and big bank bail outs, credit unions and economic democracy, there's never been a better year to celebrate International Credit Union Day," was the opening sentence of an article on Yahoo! News.

"Unlike commercial mega-banks, credit unions are not-for-profit organizations," the article explained. "Credit unions answer to their customers not to stockholders. Unlike banks who divvy their earnings in the form of dividends, earnings are returned to members in the form of lower loan rates, higher interest on deposits, and lower fees."

The Credit Union National Association considers credit unions to be "economic democracy," since each member of the credit union has one vote regardless of the member's balance, the article said.

Among the ways credit unions celebrated ICU Day on Thursday:

  • Hershey FCU (HFCU), Hummelstown, Pa., provided refreshments and snacks to members who visited the credit union's three branch locations. A special gift was given to each member who attended the celebration, and everyone had a chance at winning an MP3 player and a $25 VISA gift card at each branch location. HFCU employees also collected donations during the day to benefit Children's Miracle Network Hospitals.
  • With a budget of $150 dollars,  Laura Eblen, branch manager of Central Missouri Community CU,  and her staff performed 75 random acts of kindness throughout the town of Richmond, Mo. Central Missouri Central CU staff spend the day buying lunch, snacks, flowers, lots of coffee and providing transportation for their neighbors.
  • Each branch of Amplify CU, based in Austin, Texas, celebrated a different culture. The branches offered food and drinks, giveaways, activities and music.
  • Horizon FCU, Williamsport, Pa., served grab-and-go snacks representing a different country different each day of week. Treats included Italian biscotti, French eclairs, German pretzels and Chinese fortune cookies. On Friday the credit union hosted first chili cookoff to benefit the Central Pennsylvania Food Bank.
  • Timberland FCU, DuBois, Pa., took up a collection from members to fight breast cancer. Employees donned pink and jeans for a donation to the cause. Employees offered personal finance tips to members to help them improve their credit, protect their identity, and financial literacy.
  • Chippewa Eagle FCU, Mt. Pleasant, Mich., celebrated with donut holes and cider in the morning and pizza, cake and soda in the afternoon on ICU Day. The credit union paid the $5 minimum deposit for anyone that opened an account on ICU Day. Branch visitors received an ICU Day cup with a brochure, pen and candy. Children were also provided with pictures to color, which will be on display throughout October.
  • Annie Karr of Kansas City (Mo.) CU, appeared on WDAF television describing the difference between banks and credit unions in anticipation of Bank Transfer Day.

Intrust Bank sues Entrust FCU over name

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WICHITA, Kan. (10/24/11)--Intrust Bank, which operates 45 branches in Kansas, Oklahoma Arkansas, has filed a federal trademark infringement suit against $67 million Entrust Financial CU, based in Richmond, Va.

Entrust has one branch. Its members must be employees or family members of employees of churches and Christian organizations based in Richmond.

In the suit, filed in Wichita, Intrust Bank claims the credit union markets itself as a nationwide financial institution and is a competitor. It requests the court to cancel Entrust's trademark, block the name from being used in advertising, and turnover all printed marketing materials for destruction (The Wichita Eagle Oct. 20).

Susan Adams, Entrust Financial CU CEO, said she is skeptical there is any overlap between her credit union's membership and Intrust Bank's customers.

The U.S. Patent and Trademark Office awarded the credit union a trademark earlier this year.

Intrust Bank appears to have been provoked by a special Website serving Entrust members who live overseas, Adams said.

"Entrust Financial Credit Union serves Christian-based organizations in Richmond, Va.," Adams told News Now. "That's been our focus for 41 years. We don't market outside of the Richmond area."

Technology makes it easier to switch

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MADISON, Wis. (10/21/11)--Credit unions are doing their best to make switching from a bank to a credit union easy, and technology is helping. As Bank Transfer Day (Nov. 5) approaches, credit unions have made it easier than ever to join a financial cooperative, said the Northwest Credit Union Association. "A new member can walk into a credit union and join in less than a half-hour thanks to switch kits developed to make it easy," said NWCUA CEO John Annaloro. "I've heard pundits say switching is a complicated process, fraught with potential for costly mistakes. Switching is easy and safe." Consumers can join credit unions online or use unified account-opening processes that can help make the credit union the primary financial institution of the new member. Because many credit unions participate in a shared branching program, access a member account is easy, said NWCUA. One credit union is on the forefront of the concierge trend. TIC FCU, a $240 million asset credit union in Columbus, Ga., is one of about half a dozen institutions using SwitchAgent, a concierge service launched a week ago by Deluxe after the Occupy Wall Street movement began focusing on Bank Transfer Day, setting it as a day for consumers to protest high bank fees by switching to a credit union or small local bank. The service helps consumers shift online bill payments of recurring automatic debits, such as house payments, Social Security payments, and memberships, from their old accounts to new ones at another institution (American Banker Oct. 20). Credit union staff use an authorization form that requests account information necessary for Deluxe to make changes with creditors and payers. On the form, the new account holder lists all preauthorized transactions and supplies it to Deluxe through the phone or online. Deluxe, which started offering the service about a week ago, urges its clients not to charge for the service. The credit union's president, Mark Littleton, told the publication that it hopes to gain more members who have preauthorized transactions, ACH, auto pay, and other "sticky" services. Consumers don't have to spend their time making the transition, because service does it for them. The service includes a proprietary biller database and tracks the schedule and distribution of billing notification to keep the consumer's old account from becoming overdrawn or open too long. Both the old and new accounts must stay open while the recurring payments are transferred to the new account. "For consumers, there is no better choice than credit unions," Annaloro said. "Credit unions are convenient, safe and --best of all--they are not banks."

CU System briefs (10/20/2011)

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* BEAVER, Pa. (10/21/11)--Shirley A. Howl, 56, of New Brighton, Pa., pleaded guilty Wednesday to embezzling $400,000 from the West-Aircomm FCU, Beaver, Pa. Howl, who was lead teller at the credit union, was charged with one count of making a false entry in financial institution records. Court records alleged she overstated the amount of money in a cash dispensing machine by $130,000. Howl was in charge of three ATMs and allegedly adjusted log entries showing how much cash was in the ATMs, destroyed portions of paper tapes that recorded transactions and told other employees to throw away backup tapes. She also allegedly shifted funds to disguise the actions before annual cash counts. In late 2009, she was out of the office during the cash count, and employees discovered $400,000 missing (Pittsburgh Post-Gazette Oct. 18) …

Polls indicate consumers would switch

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MADISON, Wis. (10/21/11)--At least two polls say a good portion of consumers surveyed would switch banks if they were hit with debit fees, according to a number of reports in national media, Although answering a survey about intentions is different from actually following through and leaving a bank, the polls are documentation that consumers are fed up with banks' fees. The latest wave of discontent resulted from big banks such as Bank of America and Wells Fargo's announcements that they will charge or are testing fees on debit card usage. A new poll commissioned by CreditCards.com and conducted by GfK Roper Public Affairs & Media from Oct. 7 to 9 had these results, as reported in CreditCards.com (Oct. 20):
* Nearly four out of five debit card holders surveyed (78%) said they will switch banks to avoid monthly fees charged when they use their debit cards to make purchases. * Two out of three debit card users surveyed (68%) said they will ditch their cards if their banks start charging monthly fees. * Debit card holders also reported they would pay with cash instead (81% of those surveyed) and pay with a credit card instead (42%). * Those surveyed, when asked how high a fee would be before they would switch from debit cards to another form of payment, identified $3.90 as the average turning point, or $1.10 less than Bank of America's planned $5 a month debit card usage charge. * Many said a $1 fee would be too much to pay. Of those surveyed, 44% said they would switch to another form of payment if just $1 were charged. Another 14% said $3 would be the point at which they would search for options. And 22% said $5 would be too much. Of the group, 79% indicated they would stop using their debit cards if hit with a $5 fee.
A second study indicated that about 30% of U.S. consumers surveyed said they would leave their banks over fees for using their debit cards, reported several media, including Bloomberg.com and SmartMoney.com Oct. 19) . That study, by Fort Washingon, Pa.-based The Research Intelligence Group, a consulting and marketing strategy firm that is a unit of Montreal-based Leger Marketing, also found that 43% of those surveyed said they would switch to paying cash or credit cards if their banks implemented charges. Thirteen percent indicated they would pay the fee if "reasonable." Low- to middle-income consumers were more likely to pay the fees, a reflection that less affluent populations often believe they have few options at their disposal, said a The Research Intelligence Group. About 22% of consumers whose households earned between $35,000 and $49,000 a year indicated they would be willing to pay the fee. That compares with 14% of consumers with household income of $100,000 or more who would pay it, said the report. The fees introduced by banks have brought a backlash that is focusing on Nov. 5, Bank Transfer Day. Many are urging consumers to switch their checking accounts to credit unions or small banks for free checking.

CUNA economist outlines refinance strategy to IKiplingerI

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MADISON, Wis. (10/21/11)--A Credit Union National Association (CUNA) economist Thursday told Kiplinger.com he has rule to help those who are deciding whether to refinance their mortgage to take advantage of near-record-low rates. To figure how many months it will take to recover closing costs, consumers should divide the costs by their monthly savings, Kiplinger said. “My personal rule of thumb is that if the reduction in payments would cover all of the costs in less than two years, the decision to refi is a no-brainer,” Bill Hampel, CUNA chief economist, told Kiplinger. “If it will take two to three years, it’s probably a good deal. If it’s much more than three or you don’t expect to own the home or the mortgage for at least five years, don’t bother.” To mitigate the impact of rate increases, negotiate caps with lenders, Jack Pritchard, chief operating officer of mtgprofessor.com, told the publication. Hampel told Kiplinger he particularly likes the 5/5 adjustable rate mortgage, a product that many credit unions offer. The rate adjusts every five years--typically with a two-percentage-point cap on the first adjustment. So during a 10-year period, the rate would average 4.5%--assuming the rate begins at 3.5% and moves up to the maximum 5.5% on the five-year anniversary, he said. To read the article, use the link.

Brekken elected as Minn. Foundation chair

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ST. PAUL, Minn. (10/21/11)--The Minnesota Credit Union Foundation (MNCUF) board named its table officers Oct. 13. Pat Brekken was elected chair, Dave Larson was elected vice chair, and Kristi Mukomela was elected secretary/treasurer. Table officers are elected for one-year terms. Those elected are entering their second consecutive year in their respective roles. Brekken is president of Richfield/Bloomington CU, Richfield. Larson is senior vice president of Affinity Plus FCU, St. Paul, and executive director of the Affinity Plus Foundation. Both were appointed to new MNCUF board seats in October 2009 and were elected to three-year terms in August 2010. Mukomela, president of Novation CU, Oakdale, served as MNCUF chair from 2004 through 2010. The foundation “continues to capitalize on the progress we’ve made over the last few years,” Brekken said. “With our newly refined focus on financial education, we look forward to the opportunity to engage more and more credit unions in the foundation’s efforts and to be able to impact the broader community with our initiatives.” The table officers serve alongside four other directors with staggered board terms. They are:
* Chuck Albrecht, Mid-Minnesota FCU, Baxter; * Mary Hansen, Mayo Employees FCU, Rochester; * Lynn Kothe, North Memorial FCU, Robbinsdale; and * Brian Sherrick, Postal CU, Woodbury.

Switch stories just keep going ... and going

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MADISON, Wis. (10/21/11)--Stories of people switching from their large banks to credit unions continue to garner attention in the national media.
One New Jersey credit union, Financial Resources FCU in Bridgewater, is using billboards that state “IditchedmyBankforaCreditUnion.com” and lead consumers to a microsite with information on the credit union movement, reported the New Jersey Credit Union League. (Photo provided by the New Jersey Credit Union League)
Dennis Pierce, CEO of Community America CU in Kansas City, Mo., wrote a guest column in Monday’s Kansas City Star assuring consumers that they have a choice in selecting institutions to fulfill their financial needs, and highlighting the credit union difference and ease in switching to a credit union from a bank. “Recently, Bank of America’s CEO noted the bank’s right to make a profit and the need to institute those fees to do so,” Pierce wrote. “He is right. It does have the right to make a profit, and so do other big banks that are charging debit card fees. I am in favor of a free market that gives these banks the right to make their own choices. As the head of a nonprofit credit union, which is owned by its members, I make different choices. You need to know you have choices, too. “The good news is there is no hidden charge at play here,” he added “This kind of open fee disclosure is what financial reform legislation is all about. Fortunately, not all financial institutions feel the same way about debit card fees as Bank of America. There are many financial institutions, credit unions and community banks that are not charging this fee and offer just as many services and products. “We can’t avoid all of life’s frustrations, but there are some things we can change. When you find a financial institution that truly partners with you and has your best interest at heart, it’s worth it,” Pierce concluded. Here are other examples of credit unions and credit union leagues taking the initiative to inform consumers about the credit union difference, and some of the tangible results:
* New bank fees have helped create a greater-than-normal level of interest in how credit unions operate and what they have to offer, said Mona Shand, spokeswoman for the Michigan Credit Union League & Affiliates (minyanville.com Oct. 19). The league said it has seen a recent spike in traffic on its credit union locator site, lovemycreditunions.org, and its members are reporting above-average levels of activity. The league is preparing the official data on that new activity, to be released sometime next week, Shand added. * New Jersey credit unions are noticing a dramatic increase in hits on aSmarterChoice.com and other credit union locators the past few weeks. Hits reached 73,633 for credit unions in the state as of Wednesday afternoon (The Daily Exchange Oct. 20). * Wisconsin consumers who switch to credit unions from banks can save $174 per year per household on service fees, according to a press release issued by the Wisconsin Credit Union League. Those who use a credit union receive total financial benefits much greater than this, the league said. Credit union members save $1,020 in interest to finance a new car compared with financing at a bank. This is based on a $25,000 vehicle with funds borrowed for five years, with a savings of $204 per year in interest. Members save $15 compared to banks on a late payment fee on a credit card. That’s in addition to enjoying an interest rate that’s just under a percent lower than banks for a typical “gold” card, the league said. * While banks and other financial institutions are starting to charge their customers simply for using their debit cards, American Airlines Federal CU (AACU), Fort Worth, Texas, said it continues to offer benefits that allow member-owners to use their card even more: a premium dividend rate, out-of-network ATM fee refunds and no monthly fees on its Priority Checking Account. “We continue to offer member-owners the same great rates and fee-free options we’ve been doing all along,” said Nancy Crouch, AACU’s card services director. “We have no intention of adding a monthly service fee or debit card usage fee to our checking accounts.” * Spokane Teachers CU in Liberty Lake, Wash., garnered a 30% increase in new member accounts so far in October (NWCN.comOct. 19). By the end of 2011, the credit union--which has no plans to start charging debit-card fees--expects to have more than 100,000 members. * Last week, 32 South Carolina credit unions announced a pledge to continue offering members free use of their debit cards (islandpacket.com Oct. 19). * BECU, the largest credit union in Washington state, saw its membership “skyrocket” since Bank of America (BofA) announced it would soon start charging some of its customers $5 a month to use their debit cards, spokesman Todd Pietzch told msnbc.com (Oct. 19). During the past few weeks, new membership is running at roughly 280% of what BECU would normally see. In an average month, between 6,000 and 7,000 new members join the credit union. However, in the first two weeks of October, more than 8,200 people signed up. “But it’s not all BofA customers. Many are people who are simply unhappy with all the new bank fees they’re hearing about,” Pietzch told msnbc.com. Also, Bankrate’s 2011 Checking Account Survey, conducted in August, indicated that 76% of the biggest U.S. credit unions offer a free stand-alone checking account. Only 45% of U.S. banks still do that, reported msnbc.com.
Credit unions nationwide are gearing up for Bank Transfer Day, in which people are signing up to leave large banks in favor of credit unions on or before Saturday, Nov. 5.

A whole lotta celebration going on

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MADISON, Wis. (10/21/11)--Credit unions nationwide celebrated their unique economic and social standing on International Credit Union (ICU) Day yesterday with warm wishes, treats, good deeds and music videos. “I wish everyone a Happy Credit Union Day and continued success,” said Pennsylvania Credit Union Association President/CEO Jim McCormack (Life is a Highway Oct. 20). “This is a special day to celebrate our proud history and uniqueness.” “Credit unions play a very important role in our society,” said. “Thanks to credit unions, consumers--regardless of their socio-economic status--have access to affordable financial products and services, like checking savings, debit and credit,” said Dick Ensweiler, Texas Credit Union League CEO. ICU Day leads into the 2012 International Year of the Cooperatives. On Oct. 31, credit unions will join cooperatives from all sectors of the economy in celebrating the positive impact they have in reducing poverty, creating jobs and promoting social integration worldwide. “As credit unions celebrate International Credit Union Day and prepare for the United Nations’ International Year of the Cooperatives in 2012, we celebrate that we’re all part of building a better world,” said Patrick S. Jury, president/CEO of the Iowa Credit Union League. To celebrate ICU Day, eight spokespeople from several states representing the Gen Y marketing initiative Young & Free collaborated to create three music videos that credit unions can use to promote International Credit Union Day. The three videos feature an original rap, a Lady Gaga tribute and a rock classic from the band Journey that promote six credit union attributes::
* Membership is open to all; * Members call the shots; * Rates and fees should benefit members; * Credit unions are just as accessible as banks; * Financial education should be free and available to all; and * Giving back to the community is a priority.
Young & Free is a spokesperson recruitment program started by Currency Marketing, a credit union marketing company in Chilliwack, Canada. The campaign seeks to help credit unions attract a new, young base of members. One credit union per state is allowed to participate in Young & Free program. To see the videos, use the link. Other ICU Day events included:
* U.S. Sen. Dianne Feinstein, (D-Calif.), entered a statement regarding International Credit Union Day on the U.S. Senate floor Thursday for the Congressional Record--an event marking the first time a California senator has ever done so, and the only senator making such a statement during this year’s ICU Day. (See related story: Feinstein statement in Congressional Record marks ICU Day). * Service 1st FCU, Danville, Pa., held its second annual CU Around Town Community Service Project Each employee was asked to “do good” around the community on behalf of the credit union. The only catch is that the “do good” acts have to be outbound, unprovoked acts of kindness, such as pay someone’s grocery bill or purchasing an item for an organization that has limited funds or a strong need, or paying for the person next in line at a restaurant drive thru. * Colleen Phillips, vice president of marketing at Cross Valley FCU, Wilkes Barre, Pa.; Jill Houseknecht, marketing/communication coordinator; and Scottie Saver, the credit union’s mascot, appeared on WBRE PA Live! to discuss ICU Day, youth programs and the importance of learning to save early. * Clairton Works FCU, Elizabeth, Pa., is collecting donations for local food banks through the end of the month. * First Commonwealth FCU, Bethlehem, Pa., will host a shredding day on Saturday. * Alta Vista CU, Redlands, Calif., celebrated with balloons and bags of Skittles at each of its branches.

Nebraska CUs offer payday loan alternative

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OMAHA, Neb. (10/21/11)--Lincoln, Neb.-area credit unions collaborated to launch “Credit Union Quick Cash,” an alternative to high interest payday loans for consumers.
Click to view larger image Six Lincoln, Neb. credit unions Thursday launched their Credit Union QuickCash program to provide their members with an alternative to high interest payday loans. Pictured, from left, Jerry Barnett, president/CEO, LincOne FCU; Kenn Miller, president/CEO, MembersOwn CU; Bob Torell, president/CEO, University of Nebraska FCU; State Senator Amanda McGill; Chris Nielsen, president/CEO, Nebraska State Employees CU; Ken Bradshaw, President/CEO, Liberty First CU; Dale Springer, president/CEO, Peoples Choice FCU. (Photo provided by Nebraska Credit Union League)
“Short-term, small-dollar loans are often a necessity for many people who are trying to make ends meet, said Scott Sullivan, president/CEO of the Nebraska Credit Union League. “Unfortunately, the current market for these loans in Nebraska is primarily limited to high-cost paycheck advance loans. Credit Union Quick Cash will offer consumers a quick, convenient and low-cost alternative.” The participating credit unions have agreed to offer the same terms and conditions for the small low-interest loans. Members of the participating credit unions will be able to apply and qualify for a $500 loan with an annual percentage rate (APR) of 18%. The average payday loan in Nebraska has up to a 460% APR on a $500 loan with a payback term of 34 days, according to the Financial Stability Partnership. The payback term of the Credit Union Quick Cash loan will be 60 days with no prepayment penalty for members who wish to pay off the loan early. The Lincoln credit unions participating included Liberty First CU, LincOne FCU, MembersOwn CU, Nebraska State Employees CU, Peoples Choice FCU and University of Nebraska FCU. Credit union members can obtain a Credit Union Quick Cash loan in minutes without a credit report. Applicants are required to provide proof of income and be a member of the respective credit union for at least 30 days to qualify.

CO-OP Miracle Match applications ready for 2012

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RANCHO CUCAMONGA, Calif. (10/21/11)--Applications are available for the 2012 CO-OP Miracle Match, a matching program from CO-OP Financial Services that helps credit unions maximize their Children’s Miracle Network Hospitals fundraisers. “The credit union industry is a model for all industries in its mobilizing for a charitable cause,” said Stan Hollen, CO-OP Financial Services president/CEO and a member of the Board of Governors of Children’s Miracle Network Hospitals. “We are entering our fifth year of offering CO-OP Miracle Match, and we are looking forward to again supporting credit unions in this important work in their local communities.” Established in November 2007, CO-OP Miracle Match is on track to distribute $1 million in matching funds to credit unions in 2011. The company expects to finish with 150 credit unions participating from 39 states. Of the 2011 fundraising events, 42 of them are being held for the first time by their sponsoring credit union--a CO-OP Miracle Match record. CO-OP Miracle Match is managed by CO-OP Financial Services on behalf of its 3,000 member credit unions. The program awards $1 million in matching funds annually for Credit Unions for Kids events, proceeds of which go to local Children’s Miracle Network Hospitals. The credit union industry is currently the third largest contributor to Children’s Miracle Network Hospitals.

Filene seeks governance survey respondents

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MADISON, Wis. (10/21/11)--U.S. and Canadian credit unions are being asked by the Filene Research Institute to participate in the first North American-wide study on credit union governance practices. The research, designed by a team of three credit union governance experts led by Dr. Peter Goth of the University of Dublin, seeks to identify credit union governance models best suited to achieving credit union growth during the 21st Century, Filene said. The survey seeks to gather information on these governance issues:
* Credit union motivators for change and growth; * Board composition, director diversity and regional representation; * Director competencies, recruitment practices and training; * Credit union policies for director term limits; * Board self-evaluation and director assessments; and * Credit union experience at annual general meetings
The survey should be filled out by the credit union's CEO, board chair or governance committee chair (one respondent per credit union) and will take about 20 minutes to complete, said Filene. For more information, use the link by Oct. 31.

Study Fees top reason low incomers in L.A. close bank accounts

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LOS ANGELES (10/20/11)--The number of unbanked low-income households in Los Angeles without checking or savings accounts is rising, and unexpected or unexplained fees are the No. 1 reason they closed their accounts in 2010, according to a survey of predominately Hispanic, low-income households released by the Pew Health Group's Safe Banking Opportunities Project. About 32% of working poor households that left banking cited the fees; another 27% cited job loss or lack of funds. More families closed bank accounts (13%) than opened them (8%), said the project report. The report noted a local effort to promote banking--the Bank on LA campaign--slowed the rate of departure from banking but could not overcome persistent concerns of financially stretched participants about hidden or unexpected bank fees or the lack of sufficient funds for opening or maintaining accounts. “In today’s economy, where every penny counts, more needs to be done to bring low-income families into the financial mainstream,” said Susan Weinstock, project director at the Pew Health Group. “This data points to a real need for banks to better disclose their fees in a concise, easy-to-understand format.”
* Banked individuals use alternative financial service providers because of liquidity concerns. Thirty-one percent of banked individuals supplement their banking relationships with services from alternative financial service providers. Roughly 43% that use AFS bill pay services are concerned about the timing of the transaction posting and cash liquidity. And 37% of these said they can pay bills faster at a store-front check casher than at a bank. * Unbanked households said it is more difficult to come up with the minimum balance needed to open an account. That was the primary barrier to opening an account for 50%, compared with 30% last year. * Households that are banked are more able to save and less likely to suffer cash loss. Ninety-four percent of banked households keep some extra funds in a bank account, while 88% said they have at least one savings account. Eighteen percent of people relying solely on cash indicated they have victims of cash loss, including theft. The average amount lost was $729, equal to nearly two weeks of the respondents’ average household expenses.
For the full report, use the link.

Americans trust in fin. system drops CUs score highest

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CHICAGO (10/20/11)--Trust in America's financial systems has dwindled to 23%, down from 25% in June, and consumer anger about the economy has increased, according to the quarterly Chicago Booth/Kellogg School Financial Trust Index, released Wednesday. But credit unions rank the highest in trust of all financial institutions. Nearly 60% of consumers surveyed said they are angry or very angry about the current economic situation--"the highest level of anger we've found since the earliest months of the financial crisis," said Luigi Zingales, a professor of entrepreneurship and finance at the University of Chicago Booth School of Business and co-author of the Financial Trust Index, a quarterly look at trust in America's financial systems. "The findings in this issue reflect what's been reported in the news and demonstrate the fragility of trust many Americans still have in the institutions where they invest their money," Zingales added. Trust in banks overall dropped to 33% from 39% in the last study in June. Credit unions received the highest trust score--56%-- and local banks received 55%. But trust in national banks and banks in which the government has a stake were particularly low--26% and 22% respectively, said the report. Other findings:
* Two-thirds of respondents said the government effort to create new jobs should take priority over a deficit reduction. However, respondents--especially women--were less inclined to agree with that statement if the question involved agreeing with President Barack Obama that new jobs should trump the deficit reduction. * Roughly 55% or respondents say they believe a significant stock market drop is likely--the highest level since the first issue of the index in December 2008. * Thirty-three percent believe that house prices will drop in the next 12 months--the highest since March 2009 and an increase of three percentage points since the June survey. * Thirty-nine percent of Americans surveyed are worried that the possible breakup of the euro could impact the U.S. economy, the study said.
The news comes on the heels of revelations of new bank fees and the Occupy Wall Street movement, as well as falling household incomes and low approval ratings of the federal government's efforts to alleviate financial stress on the average consumer. The telephone survey of 1,020 individuals was conducted between Sept. 21 and Sept. 28 by Social Science Research Solutions.

IABC NewsI Bank Transfer Day gains momentum

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MADISON, Wis. (10/20/11)--ABC News and other media outlets nationwide are reporting on Bank Transfer Day momentum, in which people are signing up to leave large banks in favor of credit unions on or before Saturday, Nov. 5. To date, more than 51,000 people have signed up for Bank Transfer Day on Facebook, and a cause page for the event has garnered more than 15,000 “likes” (abcnews.com Oct. 19). The options proposed by the Facebook event (the event page was created by art dealer Kristen Christian) include: research your local credit union options; open an account with a credit union that best suits the individual’s needs; cancel all automatic withdrawals and deposits; transfer funds to the new credit union account; and follow the bank’s procedures to close accounts before Nov. 5. The FaceBook event page also has links to help people find credit unions in the U.S., Canada and the United Kingdom. Some other credit unions’ marketing efforts regarding Bank Transfer Day, ire at banks for raising debit fees and general dissatisfaction with banks include:
* Two Silicon Valley credit unions in California are sending messages through various media to lure businesses from big national banks (Silicon Valley/San Jose Business Journal Online Oct .14). Star One CU, Sunnyvale, has a picture of a tired looking child next to the phrase: “Tired of your bank? Open a checking account with a no-fee debit card.” Meanwhile, San Jose-based Alliance CU, has a rotating message board on its website with messages that include, “When we say free checking, we mean free checking.” * Affinity Plus CU, St. Paul, Minn., has expanded its “Ditch Your Bank” awareness campaign to include billboards, radio and newspaper ads that question new bank debit-card fees. The new ads were launched Oct. 7 and can be seen and heard throughout the area on digital billboards and radio stations, and in newspapers (cuinsight.com Oct. 18). * Some Texas credit unions see an opportunity to woo bank customers because of banks charging monthly fees to use a debit card, Dick Ensweiler, president/CEO of the Texas Credit Union League, told The Dallas Morning News (Oct. 17). Credit unions are marketing their debit cards, and some credit unions are paying members 2% to 3% interest on checking accounts if they agree to use direct deposit, receive electronic financial statements and make 15 debit card transactions per month, Ensweiler told the paper.
The latest credit unions and credit union leagues that have seen an increase in business because of dissatisfaction with bank fees and practices include:
* Charlotte (N.C.) Metro FCU experienced a 350% increase in new online accounts, and a 90% increase in phone calls in the past two weeks because people were unhappy about new fees at big banks (The Charlotte Observer Oct. 19). Also, representatives at Founders FCU, Lancaster, S.C., have been opening new accounts daily because for people leaving big banks, Nicki Nash, Founders senior vice president of marketing and community relations, told the newspaper. * Municipal CU, New York, the largest credit union in the state with 320,000 members, reported an increase in membership because of growing bank fees (PBS Nightly Business Report Oct. 18). While the credit union usually experiences 5% growth in membership annually, it expects to grow 8% this year, and 8% to 10% next year, Kam Wong, Municipal CEO, told PBS. * Patelco CU, Pleasanton, Calif., with 40 branches in Northern California, and Redwood CU, Santa Rosa, Calif., with 19 branches in Northern California, experienced a surge in membership because of people withdrawing their money from major banks (East Bay Express Oct. 18).

ICU Day Cheney thanks CUs for service

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MADISON, Wis. (10/20/11)--The Credit Union National Association (CUNA) has released a video in which President/CEO Bill Cheney greets credit union employees on International Credit Union (ICU) Day, being celebrated today with the theme, “Building a Better World.”
Today 49,000 credit unions from 97 countries and their 184 million members join together to celebrated credit unions. ICU Day is celebrated the third Thursday in October every year. In the video, Cheney congratulated credit union employees for the service they provide members throughout the year. Earlier this week, CUNA released a similar video from Cheney geared to credit union members that credit unions could feature on their websites. ICU Day will lead into the 2012 International Year of the Cooperatives, Cheney added. On Oct. 31, credit unions will join cooperatives from all sectors of the economy in celebrating the positive impact cooperatives have in reducing poverty, creating jobs and promoting social integration worldwide. “We know that co-ops build a better place here in the U.S.,” Cheney said. “Credit unions are a big part of that, and we want the whole world to know about it.” Credit union organizations nationwide are being recognized and taking part in ICU Day activities. Some ICU Day events include:
* Gov. Mark Dayton signed a proclamation declaring today as Credit Union Day in the state of Minnesota, said the Minnesota Credit Union Network. * Gov. Tom Corbett proclaimed Oct. 20 as Credit Union Day in Pennsylvania, according to the Pennsylvania Credit Union Association (Life is a Highway Oct. 20). * Timberland FCU, with $49 million in assets, DuBois, Pa., kicked off the International Credit Union Week on Monday with a “Build a Better Vacation” celebration. Staff dressed up in vacation clothes and served virgin margaritas to members from a Tiki Bar. Staff advised members to open a vacation club account to help save for their next trip. * CUNA is celebrating ICU day with cookies and apples for its employees at its Madison, Wis. office. * Royal CU (RCU), with $1.2 billion in assets, Eau Claire, Wis., invited its members and the community members to enjoy free cookies and coffee at all RCU offices. * Belco Community CU, with $360 million in assets, Harrisburg, Pa., is offering a free hot dog lunch, a prize drawing for a $50 Visa gift card at each of its branches, free giveaways, and an employee bake sale, with 100% of the proceeds going to Susan G. Komen for the Cure on ICU Day. Five gift baskets will be raffled off to benefit the United Way. Belco is also holding a one-day auto loan sale, with rates reduced by 0.5% on all new and used autos, motorcycles, recreational vehicles and boats. * With support of several cooperative organizations, including the Indiana Credit Union League, Indiana Gov. Mitch Daniels declared Oct. 16-22 Cooperative Week. * The Texas Credit Union League announced the YouTube debut of CU Lip Dub video for ICU Day. The Lip Dub, the first filmed by a group of credit unions and the first on record in San Antonio, was filmed during the 106-degree heat wave in August. To see the video, use the link.

Canadian CU reps in La. to discuss MBLs

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HARAHAN, La. (10/20/11)--Representatives from Servus CU, the third largest credit union in Canada, met with Louisiana credit union representatives met last week at the Louisiana Credit Union League’s headquarters in Harahan to share their knowledge on member business lending (MBL). The league worked with the World Council of Credit Unions (WOCCU) to identify Servus CU as a credit union with a robust business services department that also was willing to assist Louisiana credit unions in their development of business services, said the Louisiana Credit Union League (eNews Oct. 19). Servus CU, located in Alberta, offers a full menu of business products and services, including deposit accounts, loans, cash management, card services and employee solutions. While growing its MBL services, Servus remained true to the credit union philosophy, with a strong focus on member service, said the league. Louisiana credit union professionals participated in a study trip to Servus CU earlier this year, and last week’s sessions were built on the knowledge gained during that trip. During the meetings, attendees learned about different aspects of business services, including products and services and human resource requirements. The sessions emphasized: establishing and adhering to a “risk tolerance” monitor and mitigate risk; commercial loans, including operating loans, term financing, professional practice financing, leasing, and syndications; and the importance of effective sales and service and ongoing training. The Credit Union National Association and credit unions are urging 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, CUNA said.

Oregon Washington CU Foundations to merge

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BEAVERTON, Ore. (10/20/11)--The boards of the credit union foundations of Oregon and Washington have unanimously approved a merger plan to become the Northwest Credit Union Foundation (NWCUF), effective Jan. 1. Each foundation has more than a decade of experience in funding grants and supporting community outreach in the Northwest. Combined grant awards by the two organizations so far in 2011 have exceeded $225,000. “The development of our future industry is an important benefit that both foundations have traditionally provided,” said Oregon Credit Union Foundation (OCUF) Chair Carlyn Roy. “Once merged, credit unions of all asset sizes throughout the Northwest can be assured that we will have a stronger foundation with solid leadership moving forward.” The two organizations will be more streamlined and effective in providing professional development, training, disaster relief and outreach, said Washington Credit Union Foundation (WCUF) Chair Paula Slaye. “Our foundations are already closely aligned in our mission and collaboratively we will seize this opportunity to become even more impactful,” she added. Programs and services to applicants and beneficiaries of the respective foundations will not be disrupted during the transition. Trustees currently serving on the WCUF and OCUF boards will serve on the newly formed foundation board during its transition year in 2012. A NWCUF strategic planning session is planned for the first quarter of 2012. This is the second merger this year involving credit union agencies in Oregon and Washington. The memberships of the Credit Union Association of Oregon and the Washington Credit Union League voted “overwhelmingly” in early November to create the combined Northwest Credit Union Association (NWCUA), which began operations on Jan. 1 (News Now Nov. 12).

CU System briefs (10/19/2011)

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* ONTARIO, Calif. (10/20/11)--John Merlo, CEO of Chatsworth, Calif.-based Premier America CU, has been named an "Unsung Hero" by the
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California Credit Union League. The award honors individuals who have been in the credit union industry for at least 20 years and who have made significant contributions to the community. Merlo's contributions include years of service on the Western Corporate FCU board and as chairman; serving on the league's Government Relations Committee and what was then Assembly of Delegates; serving on the board and as chairman of CUDL; and contributions to Children's Miracle Network Hospitals and the Richard Myles Johnson Foundation. Under his leadership, Premier America has grown to more than $1.32 billion assets from $350 million. He also worked for Hughes Aircraft Employees FCU (now Kinecta FCU) in senior management positions and was president/CEO of its credit union service organization for nine years. He is pictured with Lucy Ito, league senior vice president of credit union growth and development, during the award presentation Oct. 7. (Photo provided by the California Credit Union League) … * EAU CLAIRE, Wis. (10/20/11)--Rudy Pereira has been named to succeed Charles Grossklaus as CEO of Eau Claire, Wis.-based Royal CU (RCU), announced RCU Board Chairman Doug Olson Wednesday. Pereira will assume the CEO role on Dec. 12. Grossklaus ends a 40-year career with RCU, serving as CEO the past 27 years. Pereira is a 25-year veteran of the credit union industry, serving most recently as senior vice president operations and technology at Alliant CU, Chicago. He was chair of the Credit Union National Association's (CUNA) CUNA/BITS Advisory Task Force and vice chair of the CUNA Council Forum … * COVENTRY, R.I. (10/20/11)--Conventry (R.I.) CU has announced that David Root became the credit union's CEO on Oct. 3. Root succeeds Richard Gingell, who retired. Root has been the credit union's independent auditor for the past 20 years. He has more than 30 years' experience in the banking industry. A CPA in Massachusetts and Rhode Island, he owns Root & Associates. The credit union has $259 million in assets …

Turn to CU media blitz continues

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MADISON, Wis. (10/19/11)--Momentum is still building as the "turn to a credit union" media blitz continues to spotlight credit unions as alternatives for consumers fed up with big banks' debit card fees. Credit unions found their way into USA Today, U.S. News and World Report and regional media outlets throughout the country on Tuesday. Many of Tuesday's stories discuss the perceived difficulty in switching financial institutions, the debit fee interchange rule that prompted the banks to raise their debit card fees to recoup lost interchange fee income, a Florida lawmaker's proposal to ban debit fees, and the upcoming Bank Transfer Day on Nov. 5, which continues to build thousands of supporters, including many who say they will switch to credit unions. Overall, credit unions continue to be highlighted by media as a low-cost or no-fee, service-oriented alternative to the bank fees. The Credit Union National Association (CUNA) was cited as a source on fees by USA Today (Oct. 18). The article, "Some things to consider before switching your bank," said that "credit unions view raising fees as a last resort." In light of the public outrage against Bank of America's and other banks' move to raise debit card fees, "Credit unions are doing all they can to hold the line on fees," Mark Wolff, CUNA's senior vice president of communications and media relations, told the nationwide newspaper. The article also noted that "you won't necessarily pay higher ATM fees if you join a small bank or credit union" and that credit unions "belong to networks that offer thousands of surcharge-free ATMs. Some small banks and credit unions waive fees for using an out-of-network ATM." In U.S. News & World Report's "My Money" column (Oct. 18), credit unions are viewed as "another good option" for consumers looking to make a change. "Credit unions have become more popular as people look to move away from the 'too big to fail' banks," wrote personal finance columnist Jim Wang. "Credit unions offer better rates because they aren't always looking at the bottom line," he wrote. At a credit union, the owners are the depositors and so profits are returned to customers in the form of better rates and, sometimes, a special dividend." He added that membership requirements are "easy to overcome" and that credit unions mitigate the geographic footprint issue by joining ATM networks. "Take a look at a local credit union," he urged. The Bay Citizen (Oct. 18) in San Francisco reported that "Bay Area credit unions report hundreds of consumers have begun to move their money." It noted that Alli Panelas, who is part of the Occupy Wall Street movement, spent Monday at Patelco CU, opening a checking account, a savings account, and a certificate of deposit. She plans to close her account at Chase. She told the newspaper she would rather invest her time, energy and money in a community institutions rather than a large bank. Patelco has seen the number of new accounts increase from 78 a day in September to 118 a day in October. It's not just a matter of fees. Credit unions and banks just have two different models, Brett Martinez, president/CEO of Redwood CU, told the publication. He noted that 160 depositors had switched from Bank of America to Redwood CU since Oct. 5 due to the bank's new monthly debit card fee. San Francisco FCU reported a more modest increase in new accounts. However, the California Credit Union League expects more. "This is the tip of the iceberg," said Henry Kertman, spokesman for the league. Evergreen CU, Portland, Maine, has opened 15 to 20 new accounts since the debit fees were announced by banks. Tucker Cole, president, told Mainebiz (Oct. 18) that the credit union has a message on its electronic board outside its main office with the message, "Are you paying bank fees? Try a credit union." The Maine Credit Union League reported traffic on its site surged 21% in 10 days after Bank of America's Sept. 28 disclosure of the fees. It surveyed 64 credit unions and found none plan to institute a debit card fee, league President John Murphy told the publication. Use the resource links below to access the articles.

CU System briefs (10/18/2011)

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* WORCESTER, Mass. (10/19/11)--Police have arrested a suspect in the robbery of two credit unions in Auburn and Worcester, Mass., last weekend after the suspect left behind a big clue: a deposit slip with his name, Social Security number and signature. Scott C. Sampson, 37, of Dudley, Mass., was arrested for armed robbery related to the Friday night holdup of a Digital FCU branch in Worcester and the Saturday morning robbery of Webster First FCU, Auburn. Police said Sampson allegedly entered Digital FCU after 6 p.m. Friday and handed the teller two bank slips, one with a note indicating he had a gun and the other with the identity information. He demanded money and fled with about $1,000. The second holdup occurred at about 10 a.m. Saturday. Police located a 2007 Jeep Grand Cherokee with Connecticut license plates allegedly connected to the robberies and found it was registered to Sampson's girlfriend (Worcester Telegram Oct. 17) … * MASSILLON, Ohio (10/19/11)--Massillon (Ohio) Area CU has changed its name to Friends and Family CU, announced the $52 million asset credit union (The Repository Oct. 18). The name change is not the result of a merger. Instead, the credit union has widened its field of membership from serving Massillon school employees to serving anyone who lives, works, worships or goes to school in Stark County, CEO Nicholas Langenfeld told the newspaper. The credit union plans to break ground on a new branch before the end of 2011 … * FARMERS BRANCH, Texas (10/19/11)--Funeral services for Roland E. Klar Jr., were held Monday, according to the Texas Credit Union League (LoneStar Leaguer Oct. 18). Klar served on the Texas Transportation FCU board and as its former chairman and treasurer. He was a volunteer for more than 50 years. He also served on the board of directors of the Texas league from 1978 to 1980, representing San Antonio credit unions. He was president of the Alamo Chapter of Credit Unions from 1975 to 1977, was as a volunteer leader of the State Employees CU Association from 1970 to 2008, and was employed by the Texas Department of Transportation for 40 years before he retired … * FARMERS BRANCH, Texas (10/19/11)--Sylvia Vaught, former president/CEO of Enron FCU (now Star Trust FCU), has died, the Texas Credit Union League reported. Vaught served on the league's board from 1993 to 1997 and was a TCUL advisory director from 1990 to 1993, representing Houston area credit unions. She began her career at the credit union in 1979 (LoneStar Leaguer Oct. 18). Vaught served on numerous league committees and in leadership positions with the Houston Chapter of the Credit Union Managers Association of Southeast Texas. In 2005, Vaught was inducted into the Texas Credit Union Hall of Fame. Funeral arrangements are pending …

SECU sees low rate of foreclosures

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RALEIGH, N.C. (10/19/11)--North Carolina State Employees’ CU (SECU), which makes mortgage loans to members in all 100 North Carolina counties, continues to experience a low rate of mortgage foreclosures. While the incidence of foreclosure has increased, the $23 billion asset, Raleigh, N.C.-based credit union currently has a foreclosure rate of less than one half of 1% of total loans, or roughly one-tenth of the national foreclosure rate. The main reason for the good foreclosure rate is SECU’s “face-to-face” Mortgage Assistance Program (MAP), which helps keep members in their homes, said SECU.
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SECU originates, services and “books” member mortgages. It has made the loans for more than 50 years, and manages about 100,000 individual mortgages with aggregate balances in excess of $11 billion. Also, the financial cooperative still uses direct, personal underwriting and does not risk-price mortgage loans. All qualifying members receive the same rate, regardless of credit score. Most mortgages are two-year adjustable rate loans providing manageable interest-rate risk for both the member-borrower and the credit union, said SECU. Launched in 2009, SECU’s MAP has helped more than 8,000 families remain in their homes when confronted by unexpected economic adversity. Members meet face to face with a senior credit union staffer to develop a workout plan to accommodate the member’s current financial situation. Options for workout plans include partial payments, loan extensions or modification/refinance. Historically, mortgage foreclosures have resulted from one of the five normal, life event “D-risks” of lending--death, disability, divorce, drug/alcohol dependency, or dis-employment. Most of the recent uptick in foreclosures at SECU is related to unexpected job loss in the current economy. “SECU’s low foreclosure rate is a direct result of the credit union working one-on-one with members to develop individual workout plans,” said Mark Coburn, senior vice president of loan servicing. “Foreclosure is always the worst choice for both borrower and lender. Meeting with members ‘face to face’ is at the heart of SECU’s Mortgage Assistance Program, and low foreclosures are a good measure of MAP’s success. “Who owns your mortgage can be of critical importance these days; SECU members know we’re local, we will listen, and we will work to help them overcome an unexpected economic shock,” he added.

Maine CUs garner coverage on savings fin ed

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PORTLAND, Maine (10/19/11)--Maine credit unions received notable coverage from media throughout the state--including more than 35 minutes of air time on TV news programs in the past month. In interviews in August and September on WCSH6 and WLBZ2 during the “Morning Report,” Jon Paradise, the Maine Credit Union League’s governmental and public affairs manager, offered ideas on youth savings, tips on helping students manage their finances successfully at college and the convenient access Maine credit unions provide through shared branching (Weekly Update Oct. 14). Paradise also appeared in a three-part series on WGME’s “Daybreak” and “Good Day Maine” on FOX News, speaking about the role that parents can play in helping children learn about financial education, the benefits of technology at Maine credit unions, and credit for young people. Maine credit unions were also featured in a recent newspaper article in the weekly publication, The Portland Phoenix. The article, which encouraged consumers to put their money in local institutions, features credit unions prominently. In addition to highlighting the popularity and strength of credit unions in Maine, the article gave substantial coverage to the Young & Free Maine program, Maine credit unions' Gen Y initiative. “Our media relationships continue to result in positive exposure for Maine credit unions through a diverse group of media outlets,” said John Murphy, league president.

CU in Texas issues financial challenge for ICU Day

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FARMERS BRANCH, Texas (10/19/11)--Credit union members worldwide will celebrate International Credit Union (ICU) Day Thursday to commemorate the credit union movement’s history and achievements. One Texas credit union is celebrating all month by challenging members to take an active role in managing their money. In honor of ICU Day, United Community CU of East Houston has challenged its members to pledge to save more, spend less, and manage their credit (LoneStar Leaguer Oct. 18). So far, nearly 500 members have signed the pledges, which are hanging at the credit union’s four Houston area locations. Members also are taking an online money management course, which features topics such as setting financial goals, tracking their spending and building a household budget. Nearly 75 credit union members completed the course within the first week it was offered. For the credit union, the celebration will end Nov. 5, a day being unofficially deemed as Bank Transfer Day by credit union supporters and others nationwide. On Nov. 4-5, any new members joining the $80 million asset credit union will receive welcome packages that include T-shirts commemorating their support of the credit union movement. As part of the celebration, one United Community CU member also will receive a $500 boost to a savings account. The member will be randomly chosen from the list of people completing the money management course. “With all that is happening in the economy, consumers are eager to take a proactive approach to financial management,” Shalonda Dawkins, United Community vice president of marketing, told the Texas Credit Union League. “Our job as financial institutions is to provide them with the tools to make that happen.”

Million Dollar Community Challenge passes goal

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TINTON FALLS, N.J. (10/19/11)--United Teletech Financial CU’s Million Dollar Community Challenge ended Sept. 30, with credit union’s members saving more than $1.83 million in loan interest, while also bringing money back into the community. The campaign challenged community members to save a million dollars in interest. “Community members not only accepted the challenge, but far surpassed our expectations for how much they saved,” said Leo R. Ardine, CEO of $291 million asset United Teletech Financial FCU, Tinton, N.J. He added that by participating, “they not only helped themselves but the community as well.” The challenge benefited five charities:
* Big Brothers Big Sisters of Monmouth & Middlesex Counties; * Clean Ocean Action; * FoodBank of Monmouth & Ocean Counties; * Monmouth County Society for Prevention to Cruelty to Animals; and * The Salvation Army-Red Bank Corps.
Each charity was awarded $1,000. As the top two finishers in a public vote, Big Brothers Big Sisters of Monmouth & Middlesex Counties and the FoodBank of Monmouth & Ocean Counties will each receive an additional $4,000 donation. “This campaign has been about more than just saving money on interest rates,” Ardine said. “The challenge has created an educational opportunity for people to become informed on making sound financial decisions and to become more aware of the importance of helping local charities.”

Ohio CU biz loan originations up 16

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COLUMBUS, Ohio (10/19/11)--Demand for small business lending in Ohio remains strong, with Ohio credit unions responding with $63.3 million in member business lending (MBL) originations in the first half of 2011. Thats up 16.6% from $54.3 million in the first six months of 2010, said the Ohio Credit Union League. Of Ohios 382 credit unions, 101 reported outstanding business loan balances, totaling $406.4 million statewide, according to the Ohio Credit Union Quarterly Performance Summary. Small businesses are the economic engines that drive the economy forward, and Ohio credit unions are providing the financial support necessary for growth, said Paul Mercer, league president. We can do more. Congress is considering a measure that will provide credit unions with the capacity to lend more to small businesses, injecting $13 billion into the economy and creating 146,000 jobs nationally, without costing taxpayers a dime. H.R. 1418, the Small Business Lending Enhancement Act, would increase the MBL authority of credit unions to 27.5% of assets from 12.25%. The bill has garnered bipartisan support from Ohios congressional delegation, including co-sponsorships from U.S. Reps. Marcy Kaptur (D-Toledo), Steve LaTourette (R-Bainbridge Township), Tim Ryan, (D-Niles), Steve Stivers (R-Columbus), and Betty Sutton (D-Copley). Similar legislation (S 509), co-sponsored by U.S. Sen. Sherrod Brown (D-Ohio), is under consideration in the Senate. Jeff York, president/CEO of CoastHills FCU, Lompoc, Calif., testified on behalf of the Credit Union National Association (CUNA) last week about the benefits of a higher MBL cap before the House Financial Services subcommittee on financial institutions and consumer credit (News Now Oct. 13). Ohio credit union loan-origination growth outpaced the national average, increasing 16.2% to $2.6 billion. Ohio credit unions originated $611.4 million in first mortgages in the first six months of 2011, up 13.3% from the same period in 2010. The originations helped first mortgages outstanding grow 5.7% to $4.2 billion at Ohio credit unions. Although vehicle sales are increasing 12.8% nationally from June 2010, this has not translated to tremendous growth in the credit union auto portfolio due to heightened competition from captives, the league said. However, the states credit unions reported above-average auto loan growth, compared with the declines experienced nationally. Auto loan balances rose by 3.5% over second quarter 2010. Similar to national trends, growth was reported exclusively in the used-auto loan portfolio. Used-auto loan balances in Ohio increased 7% from June 2010 to June 2011, as new-auto loan balances fell 2.4%. Asset quality in Ohio remains strong, with the delinquency rate falling to 1.20% in June 2011 from 1.29% a year ago. Delinquency remains well below the credit union national average of 1.59%. Also, credit card delinquencies declined 40 basis points the past 12 months to 1.24%. Credit unions in Ohio added 19,000 new members the past 12 months, growing membership by 0.70% to 2.68 million members. The growth rate is faster than the national average of 0.59%. The second quarter statistics mark the 10th consecutive quarter in which Ohio has seen membership growth, following years of relatively flat growth. Total revenue for Ohio credit unions fell 2.5% to $572.2 million through the first half of 2011. Similarly, credit unions nationwide saw income levels declining over the past year. The Quarterly Performance Summary attributes declining revenue to the historically low interest-rate environment. Ohio credit union loan interest income fell 3.5% from June 2010 levels. CUNA and credit unions are urging 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, CUNA said.

Tobyhanna FCU Divorce Your Bank

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HARRISBURG, Pa. (10/19/11)--Tobyhanna FCU, with $155 million in assets, Scranton, Pa., is capitalizing on the national attack against big banks and debit card fees with its “Divorce Your Bank” campaign. The campaign includes radio, Facebook, billboards, and a “Divorce Your Bank Easy Switch Kit” booklet designed to ease the transition of switching financial institutions, according to the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Oct. 18). The credit union has posted a billboard focused on the message that it does not charge a monthly for use of its debit card. Tobyhanna FCU plans on incorporating an internal and external debit card use promotion into the campaign. PCUA urged consumers to look to credit unions for lower fees and better rates. “As consumers become fed up with increasing bank fees, we encourage them to switch to a credit union for their financial needs,” McCormack said. The association, with its member credit unions, sponsors the iBelong credit union awareness program. Use the link.

CU System briefs (10/17/2011)

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* ROCKFORD, Ill. (10/18/11)--A Rockford, Ill., man was sentenced Oct. 11 to more than 5 1/2 years in prison for the robbery of four Rockford-area financial institutions, including two credit unions. Dannell L. Sampson, 25, pleaded guilty on Aug. 17 to the May 3, 2010, robbery of First Northern CU. Sampson allegedly waited outside in a Oldsmobile while another man robbed the credit union. The two drove the stolen car to a second car where a third man waited, and they abandoned the Oldsmobile. Sampson admitted in a plea bargain that he also robbed an Associated Bank on June 22, 2010; PNC Bank on July 15, 2010, and Members Alliance CU, July 28, 2010. Sampson was ordered to pay $31,175 in restitution to the four institutions (US Fed News Oct. 12) … * SOUTH CHARLESTON, W. Va. (10/18/11)--Heather Nicole Laake, 21, of Winifrede, W.Va., has been charged with felony embezzlement of more than $100,000 from South Charleston (W.Va.) Employees FCU (Daily Mail Oct. 13). Laake is a former employee of the credit union. The credit union told police Laake allegedly wrote numerous checks totaling $101,296 to her boyfriend, DeWayne Spaulding, between May 3 and Aug. 26, and wrote checks to another person totaling $495. Laake changed addresses of where account statements were sent to hide the missing money from members … * GREENSBORO, N.C. (10/18/11)--North Carolina Credit Union League President/CEO John Radebaugh has joined the board of directors of the Support Center, a statewide nonprofit that partners with community development credit unions and community-based organizations to provide small business and mortgage lending services to its members. The center also provides training, grants and loans to create economic opportunities for individuals, families and communities in underserved markets (Weekly Update Oct. 12) …

FBI alerts to scam on Kelly Blue Book name

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WASHINGTON (10/18/11)--The latest frauds reported by the Internet Crime Complaint Center (IC3) involve an online vehicle scam in Kelly Blue Book's (KBB) name and an auto sale fraud that victimizes a buyer twice, according to a release from the Federal Bureau of Investigation. In the first scam, individuals misrepresent themselves as KBB "agents" and swindle victims out of thousands of dollars in online vehicle purchases. In the scam, the victim finds a vehicle and makes an inquiry to the seller, who requires the buyer to make the transaction through KBB's escrow-based buyer-protection plan to protect both of them. KBB, a legitimate business familiar with many credit unions and auto buyers, does not offer such a plan. The fraudster claims the protection plan will hold the buyer's money for a five-day period while the buyer receives and inspects the vehicle. The fraudster sends the buyer a link, supposedly to the KBB site, providing details of the process. Some victims report the fraudster sent them photos of the vehicle. Once the purchase is agreed on, the fraudster sends the buyer an official looking e-mail, claiming to be from KBB and instructing the victim to wire the payment to the KBB agent. When they contact KBB, the victims are told the transaction is a scam, and that KBB does not offer escrow-based buyer-protection plans. In the second scam, fraudster targets an online auto buyer and hits the victim twice. The fraudster posts a nonexistent vehicle, typically a luxury or sports car, for sale on the Internet. Details of the vehicle, including photos and description, usually are lifted from legitimate websites. The buyer, hoping for a bargain, responds and is told the vehicle is overseas. The victim is instructed to send a deposit via wire transfer to initiate the shipping process. In a new twist to the scam, the fraudster advises the victim there's a problem with the initial wire transfer and sends the victim a cashier's check. The victim is told to cash the check and resend a second wire transfer to a different account. The victim, unaware that the check is counterfeit, follows the instructions and is duped twice. Other scams reported include:
*A traffic ticket spam that may contain malware; * Radio spots for mystery shoppers to evaluate money transfer services and involving counterfeit checks; * Use of government officials' identities on social networking sites to befriend potential victims; * Modeling jobs offered through unsolicited e-mails that contain a link that logs the keystrokes of the victim's computer; and * Phishing e-mails claiming to be from the Federal Deposit Insurance Corp. and informing victims their account automated clearinghouse and Wire transactions are suspended. It sends the victim to a bogus website and asks for personal or confidential information.

IReutersI INYTimesI note CUs are bank-fee alternatives

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MADISON, Wis. (10/18/11)--While everyone tries to figure out exactly how many people are switching their accounts to credit unions and community banks because of the big banks' debit card fees, big name media such as Reuters and The New York Times continue to report credit unions as an alternative for consumers fed up with fees. Reuters Monday included credit unions in its report about alternative lenders that are gaining traction as banks turn off the tap for cash and start charging fees for services consumers are used to getting for free. The article, "Analysis: As banks squeeze, alternative lenders gain traction," centers on what will happen to nearly one-fifth of the adult American population--60 million consumers--who were either underbanked or unbanked in 2009. "That number is likely to rise as banks choke off free checking, and adjust to new rules that cut into their revenue," said Reuters (Oct. 17). Enter credit unions. "Credit unions are an alternative source for the kind of services a bank provides," Professor Lawrence White Stern School of Business in New York, told Reuters. "Credit unions, which are effectively not-for-profit cooperatives, are stepping up to offer cheaper alternatives to the short-term, high interest loans provided by payday lenders," said Reuters, noting that demand for short-term, small dollar loans from credit unions rose 52% during second quarter. Reuters cites aggressive campaigns such as Livonia, Mich.-based Co-op Services CU's "Shred My Card" campaign, which offers $105 to anyone who opens a free checking account with a direct deposit or who cuts up their bank card. "We want consumers to know they can fight back against big banks by saying 'no' to more fees," said Credit Union National Association President/CEO Bill Cheney in the article. The article also mentioned that credit unions are lobbying in Congress to have their member business lending cap lifted to 27.5% of assets from 12.25%. The New York Times article, "Online Banking Keeps Customers on Hook for Fees," discusses how banks' online bill paying services have created "powerful tethers" that make it more difficult to switch to another financial institution. That has emboldened the big banks to turn to new fees as other revenue sources dry up, said the Times (Oct. 15). A marketing study commissioned by Fiserv has indicated using the Internet to pay bills, perform automatic deductions and send electronic checks has cut customer turnover for banks by 95% in some cases, said the article. This has spurred a measure in Congress to make it easier for consumers to switch financial institutions, and prompted lawmakers to ask the Department of Justice to investigate whether banks are colluding on the fees they set. The Times article also acknowledges the consumer backlash to debit card fees and the Occupy Wall Street protests, which have focused on debit card fees as another example of corporate greed. It noted that "activists are calling on account holders to switch to nonprofit credit unions en masse on Nov. 5," Bank Transfer Day. A Facebook page devoted to the effort has drawn more than 38,000 supporters, said the Times.

CUs reporting hefty member increases this month

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MADISON, Wis. (10/18/11)--Some credit unions are reporting significant hikes in new members and membership inquiries since Sept. 28, the day it was disclosed that Bank of America (BofA) customers would be charged $5 a month to use their debit cards. Since the disclosure, other banks have hiked fees, and created a backlash among consumers. Some consumers are switching to credit unions and community banks to avoid the big-bank fees. Last week the Credit Union National Association (CUNA) canvassed a number of credit union CEOs, most of whom said they were seeing a spike in inquiries and new account activity from consumers. Here's a rundown on some of the credit unions reporting increased membership applications:
* LGE Community CU, Atlanta, Ga., swapped out its ads, which focused on refinancing, and replaced it with ones that tell consumer that its checking accounts are still free. In the past three weeks, online applications for membership totaled 70 a day, compared to its usual 25 a day, spokeswoman Andrea Shorr told the The Atlanta Journal-Constitution (Oct. 16). * Delta Community CU, also based in Atlanta, said its monthly average of 1,500 applications through July jumped to 2,200 in August and 2,300 in September. Since then, "folks are coming in and they're pretty upset [about bank fees]," Todd Marksberry, executive vice president and chief operating officer at the $4 billion asset credit union, told the Atlanta newspaper. * LA Financial CU, a $345 million asset credit union in Pasadena, Calif., said its member requests skyrocketed (American Banker Oct. 17). It reported receiving 175 applications in the two weeks since the BofA's fees were disclosed, compared with 27 during the same period in 2010. * Credit Union of Atlanta will offer online account opening to accommodate a spike in new members. It grew $4 million in assets since the end of August, which is unusual for the $71 million asset credit union (American Banker Oct. 17). * SAFE CU, A $1.8 billion asset credit union in North Highlands, Calif., reports a 54% increase in online account applications in the past month (MSP News Oct. 17). The article also suggested consumers go to ASmarterChoice.org to locate a credit union. * The Golden 1 CU, Sacramento, Calif., has been running newspaper ads that encourage consumers to "Say 'No!' to Big Bank Fees!" and promises free checking accounts and debit cards with no monthly fees. As a result, there's been an "uptick" in new account inquiries (MSP News Oct. 17) . * BECU, Tukwila, Wash., signed up 5,400 new members in the week and a half before Oct. 14. The $10 billion asset credit union usually signs 6,000-7,000 new members a month but if the current surge continues, it will nearly triple that rate for October (Puget Sound Business Journal Online Oct. 14). * Washington State Employees CU, a $1.6 billion asset credit union based in Olympia, Wash., said that since Sept. 28, its new accounts have outpaced the previous month's by 22%. Spokeswoman Ann Flannigan told the Puget Sound Business Journal that the spotlight on credit unions' good value and great service has never been brighter. She noted the contrast between what is being delivered by big banks on those fronts versus credit unions "has never been bigger." * Bay State credit unions are already seeing some increased interest, according to Rob Kimmett at the Massachusetts Credit Union League. For consumers facing higher fees for other services, a debit card fee is the last straw, he told the Taunton Gazette (Oct. 17). He called the fees "a major irritant" and a "thumb in the eye kind of a thing."
CUNA's website for consumers, aSmarterChoice.org, saw double its typical level of traffic. A boost in web traffic for the site has happened before when credit unions received national media attention, but this time it is more sustained. From Sept. 29 to Oct. 9, roughly 36,000 visitors have entered the site. During the past seven months, visits averaged about 16,500 per month. That means the past two weeks have seen roughly two months' worth of visits. CUNA President/CEO Bill Cheney called the attention "nothing short of extraordinary." He told The New York Post.com Sunday, "We've seen surges in the past; most of the time it drops back down, but this is more sustained and seems to be gaining momentum." For more, see related stories "Cheney: Bank backlash leads to growing CU membership" in the Washington section and "Reuters, NYTimes note CUs are bank-fee alternative" in the System section of News Now.

Michigan league meets with OFIR (10/17/2011)

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LANSING, Mich. (10/18/11)--Michigan Credit Union League (MCUL) representatives and legislative and regulatory affairs staff met with John Kolhoff, deputy commissioner of the state’s Office of Financial and Insurance Regulation (OFIR), Oct. 4 to discuss industry trends and concerns that have surfaced since the last bi-annual meeting in March. One objective of the meetings is to determine opportunities in which league resources can best be used (Michigan Monitor Oct. 17). Kolhoff reported that in the quarter ending June 2011, Michigan credit unions’ financials reflected slow but continued improvement. While the agency is optimistic, it remains cautious as the economy continues to struggle, loan demand remains low, and interest-rate risk concerns are prevalent, said the league. Hot exam topics continue to focus on three key areas: member business lending and its associated risks and controls; the need for interest-rate risk modeling especially for credit unions with a concentration of long-term, fixed-rate loans; and liquidity risk concerns--especially for credit unions that are slow to re-price deposits in a weak lending environment. OFIR said it continues to experience interest in the state charter due primarily to field-of-membership flexibility contained in the Michigan Credit Union Act, and anticipates adding to the number and size of the credit unions it oversees. The agency is posting on its website a post-exam survey for credit unions to give feedback on the exam experience. The survey will assist OFIR in identifying strengths and weaknesses in the exam process, so it can take quick action if required. The appeal process also will be posted. OFIR is developing a set of exam policy guidelines that acknowledge credit union concerns, Kolhoff said. As a result of the National Credit Union Administration’s recent Letter to Credit Unions announcing that it would share CAMEL ratings with federally insured credit unions, OFIR also will begin sharing its ratings and supporting information, Kolhoff reported. He anticipates a future OFIR Letter outlining this new step.

Paper Cardholder-level info changing portfolio decisions

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DES MOINES (10/18/11)--A new white paper discusses how credit unions can use credit card portfolio data to get an understanding of members’ purchase behaviors. For most credit and debit card issuers, generating reports on the health of their portfolios is relatively simple and yields comprehensive results. But depending on the questions facing the issuer, “comprehensive” may not be the best type of information, said the paper, from The Members Group (TMG). In “The Whole Picture: How cardholder-level data is changing the way card managers make decisions, ” author Brian Scott argues that, rather than relying on aggregate data for examination of overall trends, card managers and executives teams should drill down to the cardholder level to understand their customers’ purchase behavior. In doing so, decisions on everything from marketing to future products become much simpler, he wrote. “As the impact of the debit interchange cap on exempt financial institutions becomes clearer, you will undoubtedly develop a set of solutions to ease the pain of lower interchange revenue,” wrote Scott, TMG vice president of sales. “Among the solutions predicted to be popular with credit unions and community banks is to incent cardholders away from debit and move them towards credit. If you know where individual cardholders are shopping, you can leverage that information to develop credit promotions with particular merchants to increase the chances of your cardholders choosing a credit card option.” Many card issuers regularly run reports to show their top 25 merchants based on transaction volume. But run reports on each merchant individually. “Does that particular merchant attract reoccurring, sporadic, large or micropayments, and how might that knowledge influence the way a credit union attempts to change the purchase behavior of its cardholders? Being able to pinpoint those answers quickly is extremely important as a credit unions evaluates the future of initiatives, such as loyalty programs,” wrote Scott. If a financial institution wants to increase credit transactions to earn more interchange revenue, migrating signature debit customers to credit will be much easier than convincing personal identification number (PIN) debit users. Already signing for their purchases, signature debit users are likely to view a switch to credit as fairly painless. On the other hand, PIN debit users---who are used to punching in their secret codes--may need more convincing. If the card team understands exactly which cardholders are accustomed to using PIN and which are accustomed to signing, they can work with the marketing team to target unique communications--and even unique incentives--to each type of cardholder, TMG said. TMG is a wholly-owned subsidiary of the Affiliates Management Company, which is owned by Iowa credit unions and their members. It provides card processing and payment solutions to credit unions and financial institutions across North America. To download the white paper, use the link.

Steps to take to make social media work for CUs

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MADISON, Wis. (10/18/11)--Credit unions watching the Occupy Wall Street movement realize the role social media can play in organizing support for a cause. Credit unions using or planning to use social media as a communication tool should follow a few guidelines, according to Allison Griffin of Griffin Strategies Inc. (LoneStar Leaguer Oct. 12).
* Be relevant. Stay up to date on current and new trends. About 80% of all social media links originate with traditional media sources, according to the Pew Center Research. * Be timely. If an issue or opportunity is “hot,” act on it. It may be stale and out of date if a credit union waits too long. * Be unique. Find a new angle or perspective to help tweets or posts receive attention among credit union members and the larger social media audience. * Cross promote. Invite members to connect to social media channels in all credit union communications: printed materials, e-newsletters, website, lobby displays and even e-mail signatures. * Special offers. These can get the attention of credit union members and to get them to “share” the opportunity with their social media networks. Pew reports that three-quarters of Americans said they get news forwarded via e-mail or posts on social network sites. * Follow and like thought leaders. Given a credit union’s audience, look for financial planning experts and money management gurus who are likely to post great information to share with followers. * Plan and monitor. Come up with a plan for social media posts. Anticipate built-in opportunities and join the social media plan with an overall communications and marketing plan. The planning process helps generate new ideas and measure effectiveness and team accountability.
Also, Fiserv Inc., a global provider of financial services technology solutions, shared five steps financial institutions can take to market themselves via social media (Business Wire via News Bites Pty Ltd Oct .11).
* Develop strategy: Developing a social media marketing strategy includes assessing customers’ current social activities, determining goals and objectives, planning for how relationships with customers will change and deciding which social technologies to use. * Listen and monitor the conversation: To get started, financial institutions should listen to what consumers say about their brand, competitors and industry. Use a listening tool, such as socialmention.com or Google alerts, to reveal where customers and prospects participate online. This may guide the decision on what sites to start with and where to focus initial efforts. * Lay the internal groundwork: Financial institutions should establish and share social media guidelines, which can be done in the form of a policy book, education video, fact sheet or other form of internal communication. Also, they should establish a brand voice--whether it is professional, casual, upbeat or reserved--and create a response matrix outlining how to respond in a variety of situations. Financial institutions should develop a content calendar outlining future content. * Integrate marketing: Financial institutions should promote their social presence in other marketing materials. Adding social icons and links to websites, e-mails, brochures and other materials lets consumers know the credit union or bank is active in social media and makes it easy for them to connect. * Use metrics and reporting: The metrics measured will depend on the goals and objectives initially identified. However, when starting out, financial institutions can measure social media impact by looking at how far messages are traveling, the gain in visitors to their websites, the number of engaged discussions and the number of users who return to financial institution social media sites.

Rock Co. ECU members OK merger into First Community

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BELOIT, Wis. (10/18/11)--Members of $3 million asset Rock County Employees CU, Janesville, Wis., have voted to merge their credit union into $76 million asset First Community CU of Beloit (Wis). Rock County Employees CU will consolidate into existing First Community operations late October or early November, according to Jack Gill, First Community president/CEO. All Rock County Employees CU employees have agreed to remain with First Community. In addition to its headquarters in Beloit, First Community CU has branch offices branch offices in Janesville, Machesney Park, Ill. and Monroe, Wis. First Community CU also recently purchased a former Evergreen State Bank building in Janesville. The 6,000 square-foot office features an ATM and three driveup lanes.

MCULs Capitol Day attracts lawmakers

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LANSING, Mich. (10/18/11)--The Michigan Credit Union League (MCUL) & Affiliates’ annual Capitol Day Wednesday provided several credit union representatives the opportunity to share lunch with their state lawmakers and explain the credit union position on some hot topics.
Representatives of Northland Area FCU, Oscoda, and Besser CU, Alpena, visited with Michigan State Rep. Peter Pettalia (R-Presque Isle) during the Michigan Credit Union League’s (MCUL) Capitol Day in Lansing Wednesday. From left, are: Pete Dzuris, Northland CEO; Howard Spencer, vice chairman of the MCUL board and chairman of the Northland board; Jennifer Pawlaczyk, assistant manager of Besser CU; Pettalia; and Michael Palumbo, treasurer of the Northland board. (Photo provided by the Michigan Credit Union League)
More than 75 credit union people statewide were on hand to greet about 100 lawmakers and staffers who attended the luncheon in the House Office Building, near the state Capitol in Lansing (Michigan Monitor Oct. 17). Topics discussed included potential reforms to Michigan’s current 90-day foreclosure delay process, raising the threshold for filing in small claims court, financial elder exploitation and removing the annual signature requirement for political action committee checkoff for payroll deductions. David Adams, league CEO, accepted legislative resolutions from the state House and Senate in honor of credit unions and their superior service and dedication to the more than 4.5 million members in Michigan. State Sen. Mike Green (R-Mayville) and State Rep. Lisa Posthumus Lyons (R-Alto) sponsored the resolutions and participated in the presentations. House Banking Committee Chairman Rep. Marty Knollenberg (R-Troy) and Senate Banking Committee Chairman Sen. Darwin Booher (R-Evart) also attended. Credit union participants educated lawmakers on the credit union difference. The luncheon will complement MCUL’s ongoing advocacy efforts at the state Capitol this fall, said Jordan Kingdon, league director of governmental affairs.

28 receive scholarships to CUNA Community and Growth Conference

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MADISON, Wis. (10/18/11)--The Credit Union National Association (CUNA) announced the 28 winners of the CUNA and CO-OP Financial Services co-sponsored scholarships to CUNA’s 2011 Community Credit Union & Growth Conference, Oct. 24-27, in San Francisco. This year’s conference theme is “Where innovation takes flight and growth happens.” Attendees will hear from keynote speakers, Jeanne Bliss and Doug Hall, network with peers, and participate in workshops, educational lectures and breakout sessions focused on putting big ideas into practice and generating growth. Scholarship winners include:
* Latonya Allen, Government Printing Office FCU, Washington, D.C.; * Christine Blake, Cardinal Community CU, Mentor, Ohio; * Peter Butterfield, Dakota Plains FCU, Lemmon, S.D.; * Christine Crew, GenFed Financial CU, Akron, Ohio; * Daniel Cumbee, Dakotaland FCU, Huron, S.D.; * Cathy Dahlbeck, CU Plus, Bay City, Mich.; * Geoff Davenport, Brooklyn (N.Y.) Cooperative FCU; * Cheryl Davis, SOCU, Bowling Green, Ky.; * Mac Dunaway, Land of Lincoln CU; Decatur, Ill.; * Dan Elliott, Rocky Mountain CU, Helena, Mt.; * Kenneth Filipovich, Pepco FCU, Washington, D.C.; * Ann Garmon, Horizon One FCU, Indianapolis; * Karen Grabowski, Westar FCU, Camillus, N.Y.; * Linda Hatfield, Birmingham (Mich.) Bloomfield CU; * Shantel Jennings, Sioux Falls (S.D) FCU; * Steve Kelly, Metrum Community CU, Centennial, Colo.; * Mohammad Khalil, Island Tradition FCU, Honolulu; * Kevin LaCamera, Cardinal Community CU; * Jennifer Pawlaczyk, Besser CU, Alpena, Mich * Cassie Roach, CFE FCU, Lake Mary, Fla.; * Lynn Sabatino, Members CU, Stamford, Conn.; * Shani Smith-Reed, Fiberglas FCU, Newark, Ohio; * Thomas Tangerman, Rogue FCU, Medford, Ore; * Mark Taylor, West Oahu Community FCU, Honolulu; * Michael Waylett, Memorial CU, Chattanooga, Tenn.; * Cheryl Webb, Generations Community CU, Windsor, N.C.; * Ashley White, Elga CU, Burton, Mich.; and * Anne Winn, Elga CU.

BECU reports significant increase in new members

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TUKWILA, Wash. (10/17/11)--New member registrations have surged recently at Tukwila, Wash.-based BECU, thanks to Bank of America's plans to raise its debit card fees to $5 a month. BECU, formerly Boeing Employee's CU, told The American Banker (Oct. 13) it has seen an "incredible uptick" in new members since the bank's plans were revealed on Sept. 28. Normally, the credit union has an average growth of about 7,000 new members a month, Howie Wu, vice president of virtual banking at the $9.5 billion asset credit union, told the publication. But as of Wednesday, the credit union during the previous 10 days had attracted 5,200 new members, he said. Wu indicated that the credit union emphasizes integrated self-service branches and online service in registering its field of membership. During the past year, BECU saw roughly 12,000 new members signing up online. Today, it has over 720,000 members served by over 40 branches.

ICU Day plans gelling for many CUs

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MADISON, Wis. (10/17/11)--International Credit Union Day may be Thursday, but credit unions are already celebrating, with events throughout the week. Credit unions will get a little help this year in convincing consumers why they are so important. The still struggling economy, consumers discontented with bank fees, and the fact that credit unions have consistently done the right thing by their members will add momentum to the celebration. Maine's credit unions are ready for Maine Credit Union Week 2011. In his Credit Union Week letter to the state's credit union staff and officials, Maine Credit Union League President John Murphy praised more than 3,000 staff and officials. "While many segments of the financial services sector have come under intense scrutiny for putting profits above people, credit unions have continued to build strong futures for their members, through focusing on doing what is in the best interests of the members, and going above and beyond to serve them," Murphy said (Weekly Update Oct. 14). He acknowledged that recent news of banks hiking fees "has increased interest and attention on credit unions so the timing of Credit Union Week is perfect." For the week, the league coordinated and provided all the editorial content for special supplements that will appear in nearly every daily newspaper in Maine and scheduled nearly 30 radio interviews as well as other coverage highlighting credit unions. Some credit unions already have a head start on celebrating. The $407 million asset Heritage CU, Newburgh, Ind., for example, celebrated the event this past Friday so it could accommodate more members. Its seven branches served members coffee and granola bars from opening until 11 a.m.; then hot dogs, chips and water from 11 a.m. to 1 p.m.; then cookies from 1 p.m. until closing time. It gave away hand sanitizer cozy clips and provided free document shredding at all locations. To coincide with the day's theme of "Credit Unions Build a Better World," it allowed employees who donated to Habitat for Humanity a Jeans Day. North Carolina's credit unions are planning events from bingo to bowling, and pizza to panel discussions, according to the North Carolina Credit Union League (Weekly Update Oct. 14). Three chapters are celebrating on Tuesday. The Tarheel Chapter will kick off with a presentation on the history of credit unions and the value of "Rediscovering Our Common Bond." The Western Chapter is displaying Seven Principles, Concern for Community and will host a Bingo Night with chances to win $500 in prizes. The Foothills Chapter will combine community service, fun and Halloween with "Disappearance of Death," a murder mystery that participants try to solve. It also will collect jars of peanut butter for Cooperative Christian Ministries. Other Carolina events occur on Thursday. The North Piedmont Chapter will provide an evening of pizza and bowling and donate $5 of the registration fee to the Victory Junction Gang Camp. It also will have a Credit Unions Got Talent program with contestants competing for a $600 prize. The Southeast Chapter will hobnob with goblins at its 2011 Costume Contest, and the Northwest Chapter has scheduled a comedian and mentalist to entertain. Both chapters will collect donated items for charities. In Pennsylvania, the latest Pennsylvania Newsmakers segment, sponsored by the Pennsylvania Credit Union Association (PCUA), features PCUA President/CEO Jim McCormack and Senior Vice President Mike Wishnow talking with program host Dr. Terry Madonna, about how credit unions are a better deal as banks institute more fees as a result of the Dodd-Frank Act. They discussed the credit union difference, International Credit Union Day, and the Pennsylvania Credit Union Foundation's work to assist flood victims of September's Tropical Storm Lee. The program airs on a number of television stations throughout the state this week (Life is a Highway Oct. 17). News Now will report on the more unusual ICU Day celebrations later this week.

CU System briefs (10/14/2011)

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* KEY WEST, Fla. (10/17/11)--An ex-police officer pleaded guilty Wednesday to robbing Keys FCU, Key West, Fla., with a threatening note and a fake bomb made of tape and tin cans. A U.S. District Judge sentenced Jeffrey Carl Meyers, 48, to four years and three months in prison, followed by three months of supervised probation (The Key West Citizen Oct. 13). Meyers also was ordered to participate in substance abuse treatment and pay $574 in court costs and fines. Meyers was arrested July 5, the same day a robber netted $1,880 after demanding cash from a teller at the credit union branch. Police arrested Meyers when an officer recognized him sitting in front of a machine at an Internet gaming parlor …

Protect Your ID Week focuses on child ID theft

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WASHINGTON (10/17/11)--A number of government agencies and organizations, including the Credit Union National Association (CUNA), launched on Sunday the 4th Annual National Protect Your Identity Week (PYIW), which will highlight child identity theft protection and education. The week, which runs through Saturday, is hosted by the National Foundation of Credit Counseling (NFCC), the National Association of Triads Inc., and the National Sheriffs' Association. The event coincides with the Council of Better Business Bureaus' Secure Your ID Day, which will be observed Saturday. More than eight million consumers were impacted last year by the crime of identity theft, resulting in the loss of $37 billion, according to Javelin Strategy and Research. "For the 11th year in a row, identity theft remained the No. 1 most-reported complaint to the Federal Trade Commission, further underscoring the need for this campaign," said Gail Cunningham, spokesperson for the NFCC. "Criminals continually find new ways to rob us of our good name and good credit, making it critical for Americans to stay updated on the latest protection techniques." Children are 51 times more likely than adults to have their identity stolen, said AllClear ID.With children, the crime goes unnoticed for years and is usually not detected until the child attempts to obtain credit or applies for a job, college or government benefits. By then, the damage is done, said NFCC. Other statistics related to child identity theft, from AllClear ID and the Carnegie Mellon Cylab:
* The youngest victim is only five months old; * About 54% of victims are under the age of 12; * The largest debt accrued with a child's stolen identity: $725,000; * A two-year-old was placed into bankruptcy; and * A nine-year-old was in debt collections.
Thieves are also stealing personal data left on old cell phones. "People are eager to cast aside their old phone in favor of the newest gadget, often forgetting that the old phone held passwords account numbers, PINs and other personal information that is a goldmine to a thief," said Cunningham. 911 Cell Phone joined the PYIW campaign to help consumers safely rid themselves of unused cell phones. 911 Cell Phone wipes the phones clean and returns them to law enforcement officials across the country to distribute free to those in need, such as senior citizens and abuse victims. More than 100 PYIW events will be held this week, with organizations such as credit unions offering ID theft protection handouts, workshops, speakers, cell phone collection, credit report reviews and shredding. Some credit unions are using the events as part of International Credit Union Day, which will be Thursday.

Study Online mortgage applications deliver

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MEQUON, Wis. (10/17/11)--Lenders with competitive online rates, optimized websites and integrated point-of-sale (POS) platforms are best positioned to succeed in attracting mortgage loan applications, according to a study of consumer-direct online mortgage applications submitted in 2010 to mortgage lenders. In one segment of the study, the Benchmarks 2011 Report by Mequon, Wis.-based Mortgagebot, such lenders garnered eight times more application volume than their less successful counterparts, the company said. The study aimed to identify methods that optimize lenders' online presence and maximize application volume. "The study's breadth of information gives banks and credit unions a vital tool for success in the consumer-direct, Web-based mortgage channel," said Rick Allen, Mortgagebot senior vice president of client services. In the study, about 40% of lenders surveyed take more than 25% of their loan applications online. Other trends:
* Mortgage shoppers actively research interest rates online. Fifty-four percent of visits to lenders' sites were to check rates, suggesting that lenders must "present accurate, risk-based pricing and detailed fee quotes to meet borrower expectations," said Mortgagebot. * Mortgage shoppers will devote time to complete online loan applications. More than one in six visitors spend more than 16 minutes on a lender's website, excluding visits that were less than a minute. If shoppers don't have enough time to complete the transaction, they will come back--48% of applications were submitted over multiple sessions, with 90% of the returning users submitting their application within two weeks of starting it. * Mortgage shoppers are highly inclined to submit applications online. Give a simple, optimized application experience, 72% of online borrowers who were eligible to complete their loan application online chose to do so.
With the data, lenders "can benchmark the success of their websites and pinpoint methods proven to be most effective in increasing loan volume," said Allen. "And mortgage lenders that have not embraced the online channel can see what's possible with the right tools." Online applications in 2010 in the report had a median credit score of 757, a median household income of $90,000, a median borrower age of 42, and a median loan-to-value ratio of 70%. Other findings:
* Borrowers want to apply on their own terms. More than one in three consumers elects to apply online during non-business hours, when branches are closed. * Simple navigation increases the likelihood of capturing applications. A panel of testers took 24% more time and 24% more clicks to reach the application entry page at less successful sites. More successful sites reaped eight times more loan volume.
The study aggregates data from Mortgagebot's PowerSite platform, responses from its annual partner survey and independent research. It also indicated that lenders who not only maintain online presence to reach consumers but also adopt an efficient online platform reap the greatest awards.

California CUs apply for mergers

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SACRAMENTO, Calif. (10/17/11)--Two California credits unions have applied with the state Department of Financial Institutions to merge into other credit unions. Family 1 CU, Placentia, a $24.5 million asset, community credit union with one branch, filed an application Sept. 15 to merge into Credit Union of Southern California, Brea, a $584 million asset multiple employee-group credit union with eight branches, serving primarily educational groups. Also, Santa Monica (Calif.) City Employees FCU, a $28.2 million asset, local government credit union with one branch, filed an application Sept. 7 to merge into Southland CU, Los Alamos, a $491.4 million asset, community credit union with three branches in three cities.

N.Y. CUs continue growth in first half of year

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ALBANY, N.Y. (10/17/11)--Despite continued economic sluggishness, New York credit unions finished the first half of 2011 showing growth and exceeding national averages in asset, member and loan performance, according to the Credit Union Association of New York.
Click to view larger image Click for larger view
Assets at New York credit unions grew by $2.6 billion from January thru June. For the one-year period from June 2010 through June 2011, assets at the credit unions grew 6.64%, greater than the national asset growth average of 4.22%. Capital levels also remained strong at credit unions in the state, the association said. Holding at 11.2% of assets, this level exceeds not only credit unions nationally, but also New York banks and banks nationwide. Asset quality remains a strong point at New York’s credit unions, according to the association, with an overall delinquency rate of 1.22%, well below national credit union and bank averages. The state also outpaced the national 12-month membership growth rate of 0.59%, realizing a 2.41% jump in membership for the same period. New York credit unions achieved a combined annualized loan growth of 3.63% versus a national credit union growth rate of -0.47%. Member business loans in New York are a key part of credit unions’ loan portfolio, with 12.1% classified as business loans. The national average is 5.7%. “We believe that this new growth is just the start of a trend as other financial institutions introduce new fees and increase many already in existence,” said William J. Mellin, association president/CEO. “Since Bank of America announced their $5 debit card monthly fee, more and more individuals are discovering that the value and benefits offered by credit unions are worth a second look when it comes to choosing a financial institution.”

Pa. foundation commits 150K to flood victims

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HARRISBURG, Pa. (10/17/11)--The Pennsylvania Credit Union Association and the Pennsylvania Credit Union Foundation have committed $150,000 to the state’s flood victims--specifically credit union employees and members. The National Credit Union Foundation’s (NCUF) CUAid program also will contribute an undetermined amount of funds to flood victims (Life is a Highway Oct. 14). The state foundation has received nearly 250 grants from employees and members of more than 35 Pennsylvania credit unions. The submission deadline was Saturday. The Pennsylvania foundation approved 40 grants of $1,500 each for a total of $60,000. NCUF has processed the grants, and checks are on the way to credit unions who will, in turn, distribute them to beneficiaries. During the next several weeks, the foundation will process additional grant requests and prepare checks for those that are approved.

W. Va. Vt. N.J. media tell CUs MBL story

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MADISON, Wis. (10/17/11)--Publications in West Virginia, Vermont and New Jersey recently shared credit union member business lending (MBL) story with their readers. In West Virginia, an article on the WBOY website described how Star USA FCU, Charleston; First Choice American Community FCU, Weirton; and Universal FCU, Huntington; are working to increase their presence in the small business market. Daniel Smithson, president of Star USA FCU, told the station that the 12.25%-of-assets cap on credit union MBL activity limits his credit union’s opportunities to lend. “We are at or near our business lending capacity,” Smithson said. “Our ability to make loans to small business is pretty much limited. We’ve helped out a lot of small businesses.” As Congress and President Barack Obama battle over ways to create jobs, credit unions have money to lend to small businesses, Stephen Hewitt, vice president of business development at Star USA, told WBOY. First Choice American Community FCU has been offering commercial lending for 20 years, said Scott Winwood, president/CEO. “We would welcome any regulatory relief that would allow our credit union to increase the availability of our financial products and services to more people,” Winwood said. “We see this as a ‘win-win’ situation for the consumer and us.” An article in the October issue of the Champlain Business Journal described how New England FCU, Williston, Vt.; Heritage Family FCU, Rutland, Vt.; and Vermont State Employees CU (VSECU), Montpelier, Vt.; are ready to loan to small businesses, according the Association of Vermont Credit Unions (Newslines Express Oct. 14). Representatives from the credit unions network with and help small-business owners who are looking for capital to expand their growing companies, the article said. It described how credit unions offer services beyond personal checking, savings and loan products, such as merchant credit card services, to serve their business members. To reach members with information about merchant services, small-business loans and other business products, Heritage Family FCU’s Marleen Cenate told the Journal that the credit union finds networking opportunities through its membership. “We get a lot of referrals from members who refer their colleagues,” Cenate said. VSECU’s Scott Nichols described his credit union’s marketing campaign, which claims the “E” in the credit union’s acronym means “Everyone,” since it was recently granted a statewide field of membership. He explained that in addition to radio and television ads that focus on that message, VSECU also works to reach potential members through business networking, personal contacts and referrals. A Oct. 14 article in the Bergen Record titled “N.J. Credit Unions Campaigning to Raise Business Lending Limit,” highlights the New Jersey Credit Union League’s (NJCUL) radio and Web ad campaign promoting support of legislation to raise the MBL cap (The Daily Exchange Oct. 14)). The campaign, which officially launched Thursday, includes radio ads running on nine New Jersey radio stations and Web ads appearing on the 101.5 FM and PolitickerNJ Websites. “We are hoping New Jersey lawmakers wake up to the reality that small businesses need help," NJCUL President Paul Gentile said in the article. “We have a number of credit unions that cannot lend anymore.” On Wednesday, credit union representatives testified before a House Financial Services subcommittee on financial institutions and consumer credit hearing on H.R. 1418, the Small Business Lending Enhancement Act, which would increase the MBL cap to 27.5% of assets. CUNA has estimated that lifting the MBL cap would have a number of beneficial effects on the ailing economy, including infusing $13 billion in new credit for small businesses and adding 140,000 new jobs within the first year of enactment--at no cost to the American taxpayer.

Collaboration key to Polands small-CU success

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SOPOT, Poland (10/17/11)--Unified back-office services and a single nationwide brand have helped even the smallest of Poland’s credit unions thrive during difficult financial times. Additional changes to broaden services and outsource them to a management group led by the country’s largest credit union are on track to further grow the system, and to extend Poland’s credit union success story, said the World Council of Credit Unions (WOCCU).
Click to view larger image Participants in the World Council of Credit Unions’ (WOCCU) recent Polish credit union study program included, from left: Joseph Bergeron, Association of Vermont CUs; Anthony Emerson, Credit Union League of Connecticut; Michael Mercer, Georgia Credit Union Affiliates; Anne Cochran, Louisiana Credit Union League; Monika Tarnowska, National Association of Cooperative Savings & Credit Unions (NACSCU) in Poland; Diana Dykstra, California and Nevada Credit Union Leagues; Brian Branch, WOCCU; John Radebaugh, North Carolina Credit Union League; Dennis Tanimoto, Hawaii Credit Union League; Michael Banks, NACSCU; Patricia Sowick, the Credit Union National Association and American Association of Credit Union leagues; and Troy Stang, Northwest Credit Union Association. (Photo provided by the World Council of Credit Unions)
Credit union collaboration remains the driving characteristic among these strategies, and credit unions of all sizes are growing as a result. This was the lesson U.S. credit union league and association executives learned last week during a study program arranged by WOCCU in Poland. A single brand, developed and supported by the National Association of Cooperative Savings & Credit Unions (NACSCU), Poland’s credit union trade association and WOCCU member, has brought success to a system considered the largest locally owned financial entity in Poland, WOCCU said. “I’m very impressed with how the Polish movement in a very short time has taken the best from credit unions worldwide to create a system that is efficient, cooperative and exerts a major influence on Polish society,” said Joseph Bergeron, president/CEO of the Association of Vermont Credit Unions. “I wish we could emulate that cooperation back home.” Bergeron was one of nine U.S. executives studying Poland’s credit unions, which operate under the brand acronym SKOK, during an exchange visit led by WOCCU President/CEO Brian Branch. Other participants included:
* WOCCU Second Vice Chair Anne Cochran, president/CEO of the Louisiana Credit Union League; * Diana Dykstra, president/CEO of the California and Nevada Credit Union Leagues; * Anthony Emerson, president/CEO of the Credit Union League of Connecticut; * Michael Mercer, president/CEO of Georgia Credit Union Affiliates; * John Radebaugh, president/ CEO of the North Carolina Credit Union League; * Patricia Sowick, vice president of league relations with the Credit Union National Association and the American Association of Credit Union Leagues; * Troy Stang, president of the Northwest Credit Union Association; and * Dennis Tanimoto, president/CEO of the Hawaii Credit Union League.
Victor Miguel Corro, vice president of WOCCU’s Worldwide Foundation for Credit Unions and head of the International Partnerships Program, also attended. As part of its week-long study of cooperative systems, the group met with NACSCU executives at the association’s headquarters in Sopot and with SKOK Stefczyka, Poland’s largest credit union named for Franciszek Stefczyk, who introduced financial cooperatives to Poland in the late 19th century. Poland’s original cooperatives disbanded during World War II. They were not revived until the Solidarity movement freed the country from Communist rule in 1989, when NACSCU helped reestablish Poland’s credit union movement in partnership with WOCCU. The movement has since grown to one of the most successful in the world, WOCCU said. Poland’s 59 credit unions support 1,852 branches and serve 2.2 million members nationwide. In addition to maintaining a unified market presence, which enables even small credit unions to compete on even footing with larger institutions, NACSCU’s services to its credit union members include maintaining a centralized data processing system that supports a payment cards program; providing deposit insurance; managing credit bureau relationships; and raising capital for the system. In 2010, NACSCU established the Stefcyzk Credit Union Group, a management group headed by SKOK Stefcyzk that provides many of the marketing and technology functions for its seven member credit unions. “Poland’s credit unions continue to innovate within the framework of their collaborative model in new and effective ways,” Branch said. “The winners in this strategy are the members of those credit unions.” Continued collaboration between institutions also enables the system to grow and for small credit unions to maintain their identity while providing competitive services. It is a lesson from which credit unions everywhere can benefit, according to Emerson. “It’s refreshing to see the compassion, the hunger and the true cooperative spirit with which Polish credit unions operate,” Emerson said. “They know how to stick together, and they know that’s what makes it all work.”

After two weeks bank-fees backlash CUs still make headlines

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MADISON, Wis. (10/14/11)--It has been two weeks since big banks announced plans to charge new or higher debit card fees, unleashing a heavy backlash from consumers and providing a marketing opportunity for credit unions to tout their no debit card fee policies and other benefits of membership. Ditch your bank and join a credit union stories still going strong in the media. In fact, credit unions' efforts to play up the fact that large banks are raising debit card fees while credit unions continue to offer free or low-fee checking have been recognized by a number of press reports. For example:
* A blog on Bankrate.com (Oct. 11) noted that "credit unions aren't wasting any time exploiting the national mood over new checking fees to drive up membership." It quotes a press release from the Credit Union National Association in which CUNA President/CEO urges consumers to "give credit unions a close look and take advantage of credit unions' emphasis on service over profits, typically with fewer and lower fees overall." The blog notes "that bit difference in pricing between big banks and credit unions is already starting to drive up credit union enrollment…." * A Fox News report (Oct. 12) featured consumer reporter Steve Noviello proudly boasting he is a credit union member. He noted credit unions are a better deal, with lower fees, better rates, and an emphasis on serving members, not maximizing profits, and explained that while banks took advantage of the Troubled Asset Relief Program, credit unions didn't--"because they didn't need it." He noted convenience isn't an issue because credit unions have more than 46,000 shared branching locations and many participate in the CO-OP Network for ATMs. He recommended consumers check out credit unions on www.asmarterchoice.org to find a credit union near them because "smart people belong to a credit union." * Forbes (Oct. 11) wrote it is time for consumers to walk the walk and make savvier financial choices. Among its advice: "Switch to a credit union or local bank. Now is the time for credit unions and local banks to court consumers frustrated with big banks." The article noted several credit unions and community banks are increasing debit rewards programs and reaffirming no-fee financial products. "Coastal FCU and Randolph Brooks FCU are essentially paying members cash back to use their debit card," it said, adding, "for consumers fed up with fees, check out your local credit union or community bank." * Fox Business (Oct. 11) said in its "Five Ways to Hang on to Debit Card Rewards" segment that a credit union "may provide the solution for your rewards searching." The National Credit Union Administration (NCUA) told the publication that some credit unions operate debit card rewards programs at a loss because of the demand from their members. "Credit unions are willing to offer products that their members want (and) that do not serve as a revenue generator," said David Small, NCUA spokesman.
Meanwhile, credit unions are adjusting their marketing strategies to make sure they get the word out about their no- or low-fee policies. In The Daily Iowan Thursday, Jim Kelley, senior vice president of marketing at the University of Iowa Community CU, said the credit union will spend more money on upcoming advertising campaigns to attract potential members. The credit union is stepping up advertising of its free-checking products. "We're spending more money on television, print, direct mail, etc.," he told the newspaper. The credit union does not charge a swipe fee and has no plans to do so. Andrews FCU, Suitland, Md., said it assured members it won't charge debit card fees and stressed its philosophy of "It's Your Money, Your Rule." It also communicated to members that fees are not assessed for monthly debit card use or other commonly used services such as teller transaction, ATM withdrawals and online banking. Member responses, received via e-mail and more than 400 postings to Andrews Federal's Facebook page, "were immediate and overwhelmingly positive," said the credit union. "We felt that it was important to remind members that Andrews Federal provides multiple ways to access their money at no charge," said Chris McDonald, Andrews Federal president/CEO. "Feeing members to access their money is not how we operate." The credit union will continue communications about its lower fees over the next few months and will target these messages to both members and potential members. North Jersey FCU President/CEO Lourdes Cortez told NJBiz.com (Oct. 11) that consumers' frustrations with big bank fees have brought consumers to her credit union. The credit union attracted 4,000 new members this year, bringing its total membership to 31,000. Credit unions are in a better position to capitalize on banking customer dissatisfaction thanks to a stepped up marketing campaign by credit unions and organizations such as the New Jersey Credit Union League, said Cortez. In the past couple of years the industry has "really gone out there and made an effort to explain the differences (between credit unions and banks), to promote the products and services we offer, and to get involved in financial literacy programs," she told the publication.

Ohio CUs Bump the Banks campaign in second year

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COLUMBUS, Ohio (10/14/11)--The Central Ohio Chapter of Credit Unions' Bump Your Bank campaign--in which consumers display a Bump Your Bank magnet on their vehicle for a chance at cash prizes--is in its second year. Anyone--including non-members--can pick up a free magnet at a participating credit union and register it at www.bumpyourbank.com. The magnet shows off how much the consumers value their local, community-oriented credit unions. And participants can register for a chance at weekly prizes or the grand prize of $1,000. Credit union spotters all over the Columbus look for the Bump Your Bank magnets. When they spot one, they enter the owner into the weekly random drawing. One person wins each week. Then, all spotted vehicles are entered automatically into the grand prize drawing. "Unlike for-profit banks, there are no wealthy investors sitting at the top waiting to make money off your investments," said Sandy Jessberger, a credit union member. "Instead, credit union profits are returned to members in the form of better loan rates, higher savings rates and lower fees," Jessberger added. Since this year's campaign launched in June, 18 people have won a weekly prize valued from $50 to $100. Weekly prizes will be awarded through the end of October, when the grand prize drawing will be conducted. Credit unions participating include:
* Central Ohio Community CU; * CME FCU; * CU of Ohio; * KEMBA Financial CU; * Marysville Goodyear Employees FCU; * Members First CU; * Ohio HealthCare FCU; * SMART FCU; * STE CU; * State Highway Patrol FCU; and * Total Assurance FCU

PSCU Fin. Services offers tips to promote free checking

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ST. PETERSBURG, Fla. (10/14/11)--A checking account usually defines which financial institution consumers view as their primary financial services provider. And, with the widespread discussion by consumers, media and financial institutions on debit card fees the past few weeks, the time is ripe to market checking accounts, according to a St. Petersburg, Fla.-based credit union service organization (CUSO). "Now is the perfect time for credit unions to market their free checking accounts and win consumers who are not willing to pay new fees being assessed by their banks," said Kari Anne Arnosk, PSCU Financial Services' director of strategic consulting. The CUSO offers several tips to help credit unions expand market share and boost member loyalty.
* Launch direct mail campaigns that target non-members and members who do not have a credit union checking account. The added issue of free vs. fee will draw attention to the credit union, said PSCU Financial Services. "Plan to conduct several marketing campaigns a year that not only differentiate your credit union from the big banks, but also position your offerings as the most consumer-friendly." Adapt the credit union's messaging to attract target groups such as 18- to 24-year olds. Historically, January, spring and back to school season have been prime promotion periods. However, national coverage of rising bank fees has publicized credit unions as a safe haven for consumers. Therefore, it's important to act quickly to capitalize on this opportunity to gain checking account market share, said the CUSO. * Develop a multi-channel marketing approach. Free checking needs to be actively promoted on the website, in newsletters, through branch collateral and at the teller window, said the CUSO. Develop a product comparison chart that outlines the benefits of your checking account when compared with other local or national accounts. Incent staff to promote checking accounts at every opportunity. If the credit union decides to offer a special promotion, make it a competitive cash offer that requires direct deposit, eStatements, loan or credit card balances, first mortgage or deposit balances. * Offer several types of different checking accounts, but keep your checking products simple and easy to understand. An optimal checking portfolio includes free non-interest-bearing checking as well as interest-bearing checking accounts for those who fulfill other requirements such as higher minimum balances, direct deposit or use of other credit union products. * Offer multiple ways for members and non-members to open accounts. Allow members to open accounts at branches, at a call center, and through a fully automated online solution. Also provide members with convenient tools such as mobile banking that equip them to manage their accounts.
PSCU Financial Services is owned by more than 680 credit unions representing 16 million credit, debit, prepaid, online bill payment and electronic banking accounts. It offers consulting services that help optimize checking products and promotions to members and non-members

Pa. assn. responds to bankers potshot at tax status

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HARRISBURG, Pa. (10/14/11)--A potshot at credit unions' tax status by banks in a letter to the editor of the Harrisburg Patriot-News Wednesday drew strong response from Pennsylvania Credit Union Association (PCUA) President/CEO Jim McCormack. McCormack quickly responded with a letter to the letter from Jim Biery, president of the Pennsylvania Bankers Association (Life is a Highway Oct. 13). Biery blamed bankers' fees on Congress and regulators' interchange rule and said credit unions act like banks, face less regulatory oversight and pay no federal or state taxes. "Despite Mr. Biery's assertion, credit unions do not hold an unfair advantage over banks and do not face a lower level of government oversight," McCormack wrote. "In fact, one could argue that credit unions face more regulations and limitations from government oversight than banks. If credit unions did have an advantage, don’t you think we would see more banks converting to a credit union charter? To my knowledge, that’s never happened." McCormack took the opportunity to point out what consumers can do about banks' high fees. "Now is the time for consumers to evaluate the fees they’re being charged and to shop around for a financial institution that best suits their needs. For many that financial institution may be a credit union," McCormack wrote. He urged consumers "to find a credit union that’s right for you and steered them to PCUA's credit union locator, ibelong.org.

SECU opts for full CAMEL disclosure to members

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RALEIGH, N.C. (10/14/11)--North Carolina State Employees’ CU (SECU) is choosing to go “where no credit union has gone before”--requesting a one-year trial disclosure of its CAMEL code. The CAMEL rating system is used by the North Carolina Credit Union Division--and by most other federal and state financial regulators--to evaluate the overall health of a state-chartered credit union. SECU sought the one-year trial disclosure in an effort to test a new standard for full transparency. The CAMEL rating system is based upon five elements of a credit union’s operations: capital adequacy, asset quality, management, earnings, and liquidity/asset liability management. Examiners rate credit unions using a numeric scale of one to five for each component, along with an overall composite rating for the credit union, with one as the highest rating and five as the lowest. Financial institutions with assets greater than $10 billion should expect greater disclosure and compliance, said the $23 billion asset credit union. This trial disclosure of CAMEL rating transparency is yet another way for it to demonstrate its “Do the Right Thing” philosophy to its 1.7 million member-owners, SECU said. CAMEL ratings are confidential figures not generally published by regulatory agencies. SECU obtained authorization from the administrator of the North Carolina Credit Union Division to include its composite CAMEL rating of two for the period ending Sept. 30, in a footnote in its June 30 Audit Report. The CAMEL 2 composite rating has been typical for SECU during the past 10 years. “SECU is identified by its member-owners as a trusted provider of financial services,” said Mike Lord, SECU senior vice president of finance. “At a time when so many other large financial institutions in the marketplace are not viewed as trustworthy, SECU wants to uphold its positive reputation through full transparency. While there are no existing regulatory requirements for safety/soundness rating disclosure, SECU believes that, as a member-owned cooperative, it is always best to keep credit union members apprised of the overall level of financial performance of their credit union. “We welcome the opportunity to test the value of disclosure of this rating with our members,” he added. “SECU has traditionally published its ‘capital rating’ each year, and we feel the CAMEL rating may provide additional useful information. SECU remains ‘well-capitalized’--the highest category--under federal law.”

CAP COM differentiates itself with College Bound program

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ALBANY, N.Y. (10/14/11)--Paula A. Stopera, president/CEO of Capital Communications FCU (CAP COM), Albany, N.Y., led her daughter’s college search in 2006. Stopera was shocked by the time and knowledge the college planning process required. She realized then her credit union could serve as a valuable resource in helping for its membership. Today, $905 million asset CAP COM’s College Bound Program has two full-time specialists and hosts a series of workshops from January through October that help high school students sort through the process of applying and paying for college. “It is one of the most popular programs we have, and it is definitely a differentiator for us,” Stopera told News Now. The workshops $905 million asset CAP COM FCU offers include:
* College Prep--High school sophomores and juniors learn about choosing the right school, applying for college, completing the college interview process and finding scholarships. * College Admissions --This workshop for high school seniors provides information on the college admissions process, tips on applying for scholarships and completion of the Free Application for Federal Student Aid (FAFSA) application form. * FAFSA and Budgeting--Parents learn about the FAFSA process while students attend a budgeting workshop. * College Experience--High school seniors learn what to expect in their first year of college, along with available college funding options and credit union accounts. * Essay Writing Workshop--Presented by college admissions professionals, the workshop offers guidance on writing a successful application essay.
The workshops are so well attended they have been moved from the credit union to a local hotel, said Stopera. College-bound student families also meet with CAP COM FCU’s college specialists to discuss the application process, funding and loan options, and products and services. College Specialist Kim Donah said the college search-and-selection process is a negotiation process--and that’s one of the chief reasons she believes members value the College Bound service. “It’s not just about grades,” Donah said. “Colleges take a holistic approach to selecting their students. They want a college community of that mirrors the community at large. And we do help them with the process of financial aid and lending. Sometimes families can go back to universities and ask for more assistance. It’s all part of a process.” Donah estimated she will meet with high school sophomores and juniors two to three times and seniors four to six times. The College Bound program is the cornerstone of a life-stages relationship with the members, Donah said. “We stay in touch with the students through college and graduation and starting career. When they buy their first car, they buy it from us.” Households that participate in the College Bound program use an average of 4.3 products and services from the credit union, compared with 2.86 products and services used by households that don’t take part in the program, Stopera said. But Stopera said the relationships built through the College Bound program go beyond products and services. “It’s gratifying to give every student a chance,” she said. “Some of the most successful students in college are the children who get Cs and Bs in high school. We help them as much as we help the ones who get As and Bs. The good news is that there are success stories abounding within our membership’s families. And that’s pretty cool.”

CU zombies storm Wells Fargo wagon

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CHARLOTTE, N.C. (10/14/11)--Avoid becoming banker zombies by joining a credit union. That was the message delivered by live zombies who swarmed the Wells Fargo State Coach and "reached out" to festival goers to warn them about banks, during a recent Octoberfest in Hickory, N.C.
Zombies swarmed a Wells Fargo coach to deliver a message to recent Octoberfest goers in Hickory, N.C.: Don't become a bank zombie. Join a credit union. Zombies were from Carolina Postal CU, based in Charlottesville, N.C. (Photo provided by the North Carolina Credit Union League)
The zombies, keeping in touch with the current pop culture theme, "Zombies are this year's vampires," were from Charlotte, N.C.-based Carolina Postal CU, according to the North Carolina Credit Union League. They participated in the Octoberfest, warning festival participants to avoid becoming bank zombies by joining a credit union. In addition to the live "undead," the credit union is providing members with "survival" tips at a micro-site with a zombie video at www.survivebankerzombies.com. The information is also included on the credit union's Facebook page, direct mailings using the U.S. Postal Service's new Every Door Direct mail program, e-mail blasts, posters--"and a few squishy brains." Rumor has it that the credit unions' branches will all succumb to a zombie invasion on Oct. 31. PTP New Media was the brains behind the credit union's creative marketing plan. For more photos check out the Facebook page.

Member-focused video from Cheney promotes ICU Day

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MADISON, Wis. (10/14/11)--The Credit Union National Association (CUNA) has released a video in which its President/CEO Bill Cheney urges credit union members to be part of building a better world by celebrating International Credit Union (ICU) Day on Oct. 20.
Credit unions are invited to share the member-focused video on their websites and distribute it in other online communications to members. For instructions on how to provide links to the video, use the links. “For over 75 years, our philosophy in the credit union movement has been ‘people helping people.’ That is not just a catchphrase; it is what credit unions do,” Cheney says in the video. Your credit union pools your resources to build better communities and strengthen your financial well-being.” Cheney highlights the economic and social contributions that credit unions and their 93 million members make to their local and global communities. ICU Day will lead into the year-long 2012 International Year of the Cooperatives, Cheney adds. On Oct. 31, credit unions will join cooperatives from all sectors of the economy in celebrating the positive impact cooperatives have in reducing poverty, creating jobs and promoting social integration worldwide. Credit unions that wish to embed the video on their web sites can link to the CUNA press release.

WOCCU 1st vice chair selected to Poland Parliament

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SOPOT, Poland (10/14/11)--Grzegorz Bierecki, president/CEO of the National Association of Cooperative Savings & Credit Unions (NACSCU), Poland’s credit union trade association, and a member of World Council of Credit Unions (WOCCU), was elected to his country’s parliament during Sunday’s nationwide elections. Bierecki, who also serves as WOCCU first vice chair, was elected as a Law and Justice Party senator representing Biala Podlaska, a town in eastern Poland. It is Bierecki’s first election to public office. “As a senator, I can initiate as well as participate in the legislative process,” said Bierecki, who reportedly defeated his opponent by a 50% margin. “I can promote changes to the Cooperative Act and the Credit Union Act, as well as other important financial sector regulation.” Bierecki’s new role as senator is not considered a full-time obligation. The veteran executive will continue to serve in his capacities both with NACSCU and WOCCU. Bierecki was a former staff member in Lech Walesa’s Solidarity Party, which helped re-establish Poland’s credit union movement in partnership with WOCCU in 1989. The movement has since grown to one of the most successful in the world, said WOCCU. Poland’s 59 credit unions, operating under a unified marketing brand and from a central back-office platform, support 1,852 branches and serve 2.2 million members nationwide. Despite banking industry opposition, Poland’s credit unions have long enjoyed public and government support as the country’s only locally owned financial institutions. Last year’s death of Polish President Lech Kaczyñski, a long-time credit union advocate and former president of the Foundation for Polish Cooperative Savings and Credit Unions, eliminated one of the movement‘s chief government champions. Kaczyñski’s death hastened Bierecki’s run for election, according to the new senator. “Credit unions gained a strong voice in the senate on Sunday,” Bierecki said. Poland’s credit unions have always effectively represented their members’ interests, and Bierecki’s election takes political involvement to a new level, according to Brian Branch, WOCCU president/CEO. “Sunday’s election was a huge victory for credit unions both in Poland and worldwide,” said Branch, who last week led an engagement program of U.S. credit union league and association executives to NACSCU headquarters to study the Polish credit union system. “We are thrilled by the results of the election and happy that Poland’s credit unions once again have a powerful champion in the government who will be working on their behalf.” WOCCU will be holding its 2012 World Credit Union Conference July 15-18 in Gdañsk, Poland. For more information, use the link.

WOCCUs Branch on U.N. Year of Co-ops advisory group

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MADISON, Wis. (10/14/11)--Brian Branch, president/CEO of the World Council of Credit Unions (WOCCU), has been named to the advisory group for the United Nations 2012 International Year of Cooperatives. Branch is one of 20 leaders from among the global cooperative movement, including individual organizations and governments, selected to serve on the group. The advisory group will provide guidance to the United Nations (U.N.) in implementing goals and objectives for the International Year of Cooperatives. The group also will encourage partnerships and external activities that support the role cooperatives play in social and economic development on a global basis. “Credit unions and other cooperatives have had a profound impact on the lives of their members. The International Year of Cooperatives will shine a well-deserved light on the value and empowerment that credit unions and cooperatives provide,” Branch said. Announced in December 2009, the International Year of Cooperatives is designed to increase public awareness about cooperatives and their contribution to global socio-economic development, promote the formation and growth of cooperatives for socio-economic empowerment and provide an enabling environment through policies, laws and regulations. In addition to supporting various member organizations’ activities, WOCCU is working with the Credit Union National Association, the National Cooperative Business Association and the International Cooperative Association to support and promote the year’s goals and objectives. The International Year of Cooperatives will launch Oct. 31 at the U.N. headquarters in New York with roundtable discussions and meetings. A leadership forum and press conference is scheduled for Nov. 1 at the Millenium U.N. Plaza Hotel. For more information, use the link.

NCBA video urges public to use co-ops

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WASHINGTON (10/14/11)--The National Cooperative Business Association has developed a “Choose A Co-op” YouTube video, urging consumers to make a difference in their local communities. The video was introduced at the NCBA’s Annual Meeting and Co-op Conference Oct. 4-7 in Minneapolis. The video informs consumers that co-ops offer an alternative to large corporations, including big banks, such as those responsible for the current economic situation. Most money spent at co-ops remains in the local economy, keeping businesses and communities thriving, NCBA said. October is National Co-op Month, with the theme “Building a Better World.” Credit unions will celebrate their cooperative philosophy Thursday on International Credit Union Day The United Nations and the cooperative business sector also will launch 2012 International Year of Cooperatives on Oct. 31.

Vantage West pulls ads featuring fired Arizona coach

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TUCSON, Ariz. (10/13/11)--Tucson, Ariz.-based Vantage West CU is discontinuing television ads for a Community Food Bank that featured fired University of Arizona head football coach Mike Stoops. Stoops was fired Monday after a losing streak. The credit union told the Arizona Star that it will actively promote the goal behind the ads--raising money for the food bank as the winter holidays approach. However, it didn't want Stoops' dismissal to distract from or obscure the fundraising goal (azstar.net Oct. 12). Monday the credit union will shoot new TV ads with Vantage West CEO Bob Ramirez and Bill Carnegie, president of the food bank. The campaign will run throughout football season. Consumers who use their Vantage West credit or debit card to donate $10 or more to the food bank will receive a 2011 Arizona Football Commemorative Coin from the $1 billion asset credit union.

Follow promote ICU Day events on Twitter at icuday11

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MADISON, Wis. (10/13/11)--Credit unions are preparing for International Credit Union (ICU) Day on Oct. 20--just one week away--with all kinds of activities. They also should plan to follow others' and promote their own activities on ICU Day's Twitter account. Credit unions across the country can use #icuday11 as a hashtag to tweet their efforts. Tweeting will help promote credit unions, show their fun side, and engage the general public by using social media. Users new to Twitter can get some tips from the North Carolina Credit Union League's website. Use the link. This year's ICU Day theme, "Credit Unions Build a Better World," celebrates the economic and social contributions credit unions make to their communities worldwide. Financial cooperatives around the globe will celebrate their heritage and contributions on Oct. 20. "International Credit Union Day offers a unique opportunity to show our appreciation to our members--the folks who make it possible for credit unions to exist," said Sean M. Rathjen, president of Waukegan, Ill.-based Consumers CU. "This is a day to thank members for their business, to share a little credit union history and showcase the many wonderful benefits the movement has to offer." Members stopping by Consumers CU's six branches on ICU Day will be greeted by managers and staff and can enjoy treats and a gift "as a token of our appreciation," Rathjen said. FORUM CU, Indianapolis, Ind., plans to celebrate all week, with its "FORUM Financial Week," beginning Sunday through Oct. 21. Activities at its 12 branches will include free credit checks, budgeting with a branch representative, savings specials and kids' activities. Since October is Co-op Month, the United Nations and the cooperative business sector will launch 2012 International Year of Cooperatives on Oct. 31.

CU locator sites see large increases in traffic

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MADISON, Wis. (10/13/11)--Requests for information about credit unions and where consumers can locate a credit union to join increased dramatically since news of big banks' debit card fees broke in late September. The Credit Union National Association (CUNA) reported that the volume of visits to its aSmarterChoice.org consumer site more than doubled during the period between Sept. 29 and Oct. 9. The site received 36,000 visits during the period, compared with 16,500 visits on average per month in the previous seven months, said Pat Keefe, CUNA vice president of communications and media outreach. "We had two months' worth of visitors in two weeks," Keefe told News Now. Also, the aSmarterChoice.org Facebook page added 2,500 friends during the period, bringing the total friends to 3,500, Keefe said. The announcement about Bank of America's plans to charge $5 a month for debit card use was made public Sept. 28. That announcement was followed by other banks' announcements they were testing similar fees in an effort to recoup loss of revenue from debit card interchange fees under the Dodd-Frank Act. The news brought outrage from consumers and a constant barrage of press reports about ways consumers could avoid the fees--including switching to credit unions. The Pennsylvania Credit Union Association (PCUA) reported that the number of visitors to its iBelong.org during the first week of October increased fivefold, with more than 1,500 consumers logging into the campaign website to help locate a credit union to join (Life is a Highway Oct. 12. The traffic was the highest amount of weekly traffic this year, said PCUA. "We believe the strong press credit unions are receiving since the Bank of America's debit card fee announcement, along with similar announcements from other banks, is resulting in a significant increase in inquiries from consumers and the press on how consumers can switch to a credit union," said Jim McCormack, PCUA president/CEO. Texas Credit Union League President/CEO Dick Ensweiler, in discussing the response of consumers to the fees and the deluge of positive stories in the media about credit unions as a fees alternative, said, "Consumer frustration with the banking sector creates an ideal opportunity for credit unions to capture more members. "Those of us in the movement already know that credit unions are the smarter choice; however, as these fed-up customers say goodbye to their banks, it’s up to us to ensure they look toward credit unions as their next financial partner,” continued Ensweiler. “Through tools like the asmarterchoice.org, we are able to provide consumers with information they need to make an informed choice.” He urged credit unions to not miss out on the opportunity to educate the public about the credit union difference.

Allegacy receives patent for card fraud measures

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WINSTON SALEM, N.C. (10/13/11)--Allegacy FCU, a $928 million asset credit union in Winston-Salem, N.C., has been assigned a patent developed by Dean A. Adams, Winston-Salem, N.C., for a “bank card fraud detection and/or prevention methods.” The patent involves setting a threshold for card transaction frequencies--which if exceeded, could indicate potentially fraudulent card activity. The patent application was filed Dec. 13, 2007 (Targeted News Service Oct. 12). The abstract of the patent published by the U.S. Patent and Trademark Office states: “Bank card fraud detection and/or prevention methods can generally involve determining a common point of compromise and/or identifying merchants associated with bank card transaction frequencies which exceed a predetermined threshold value which is indicative of potentially fraudulent bank card activity. These methods can further involve identifying other bank cards used at the common point of compromise.”

Coopera develops prepaid card for Hispanics

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DES MOINES, Iowa (10/13/11)--Coopera, in partnership with sister company and card processor The Members Group (TMG), introduced a reloadable Visa prepaid card designed for the Hispanic market. The Coopera Card gives Hispanic cardholders access to a secure financial management tool and eliminates the need to pay high fees for check-cashing, money order or money transfer services. No credit history or taxpayer identification number is required to become a cardholder. Coopera cardholders can load funds via direct deposit of their wages, at an issuer’s branch, online or at any Visa ReadyLink merchant. The cards can be used anywhere Visa debit cards are accepted, and at any ATM branded with the Visa logo. Hispanic cardholders with family in Latin America can add secondary account holders to each Coopera Card account. This offers cardholders a safe and inexpensive way to make money accessible to family, said Coopera. The Coopera Card is supported by Spanish and English cardholder services via CooperaTarjeta.com and live agents, and bilingual and culturally relevant marketing materials and disclosures. The program also offers bilingual text message alerts. Young and largely underserved, the Hispanic community is a critical group for community-based financial institutions, according to Coopera. Yet, members of this group can be difficult to reach through traditional product and marketing strategies. “Many Hispanics avoid traditional financial services due to a lack of traditional identification documents, language barriers or a mistrust of financial institutions,” said Miriam De Dios, Coopera vice president. “Reloadable prepaid cards are among the most effective ways to introduce Hispanic community members to a community-based financial institution.” Amarillo (Texas) Community FCU is among the first to offer the Coopera Card to its Hispanic members. “We view the Coopera Card as a way to ease our Hispanic members into the financial mainstream,” said Arna Reynolds, Amarillo Community FCU CEO. “A reloadable card does not allow a cardholder to spend more than he has, yet he isn’t operating on a cash basis.” Coopera and TMG will host a free webinar for financial institutions about the Coopera Card on today at 1 p.m. (CT). Registration is open online. Coopera is an Iowa-based economic development firm focusing on emerging markets that present unique growth opportunities for credit unions. It is majority owned by the Iowa Credit Union League and is a strategic alliance partner of the Credit Union National Association.

Iowa commissioner OKs CUNA Mutuals new ownership structure

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MADISON, Wis. (10/13/11)--The Iowa Insurance Commissioner has approved CUNA Mutual Group’s plan for a new mutual ownership structure. The plan, which more than 93% of policyholders voted to approve on Sept. 7, is expected to take effect Jan. 31. It will reorganize CUNA Mutual Insurance Society (CMIS) from a mutual insurance company into a mutual insurance holding company structure. As a mutual insurance holding company, CUNA Mutual will continue to be mutually owned, with policyholders having full ownership of the new parent mutual holding company entity. Approval by the Iowa Insurance Commissioner was the step needed for the reorganization to move forward. “The conversion to a mutual holding company structure will maintain policyholders’ rights and significantly enhance our ability to compete and serve,” said Jeff Post, CUNA Mutual president/CEO. “This is a natural and positive next step in our continuing commitment to credit unions and to the successful and proven strategy we have been pursuing in recent years.” Insurance policies and annuity contracts will remain the same and policyholder benefits and rights will not be reduced or altered in any way, said the company. Premiums will not increase as a result of the mutual holding company reorganization.

WEOKIE Okla. Lt. Gov. to unveil pilot fin ed program

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OKLAHOMA CITY, Okla. (10/13/11)--The WEOKIE Foundation in Oklahoma City and TTCU The Credit Union in Tulsa, Okla., are unveiling a pilot high school financial education curriculum project. In 2006, WEOKIE CU formed the WEOKIE Foundation, a 501 (c) (3) public charity that provides a formal avenue of charitable giving for the credit union and offers financial education and scholarship opportunities to Oklahoma City and the surrounding communities. Today at a press conference hosted by Oklahoma Lt. Gov. Todd Lamb, the curriculum will be demonstrated to the press at Yukon (Okla.) High School. “Oklahoma becomes the first state in the nation to offer this high-tech and turnkey curriculum for free to all teachers in the state,” Lamb said. “We’re leading the nation in this initiative, thanks to the tremendous effort of WEOKIE and TTCU, who have underwritten the entire “FoolProof Oklahoma’ project. All of our children will benefit from this project.”

CO-OP Network CUs services on equal footing with big banks

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RANCHO CUCAMONGA, Calif. (10/13/11)--Local credit unions of any size are now competing on an equal footing with large national banks offering consumers easy, convenient access to their accounts, according to CO-OP Financial Services. At the same time, credit unions continue to maintain their traditional advantage of offering low loan rates and fewer service fees compared to banks, the company added. “With banks announcing more fees and tougher fee exemptions, they have partially tried to justify these measures by emphasizing the scope of their ATM and branch networks,” said Stan Hollen, president/CEO of CO-OP Financial Services. “However, credit unions cooperate with each other in a way banks will not, so credit unions can offer the same level of convenience, along with service that survey after survey confirms is superior to banks in consumer satisfaction,” Hollen added. CO-OP Financial Services manages CO-OP Network, a nationwide network of 28,000 ATMs that allow members of 3,000 participating credit unions to access their accounts without incurring a surcharge. These ATMs are located on credit union premises and retail locations, including 5,500 7-Eleven stores, and Costco, Walgreens and other outlets. CO-OP Financial Services also allows members of participating credit unions to access 4,400 physical branch locations throughout the U.S. via CO-OP Shared Branching. The shared branching concept is unique to credit unions and allows members to enter any of the 4,400 locations marked with the CU Service Center logo and transact their business as if they were visiting a branch of their own home credit union.

CUs keep mortgages on books not much loan growth

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MADISON, Wis. (10/13/11)--In a time when overall loan growth is weak, credit unions are keeping a lot of mortgages on their books, according to a Credit Union National Association (CUNA) economist. “Interest rates won’t go up any time soon, but at some point they surely will,” Mike Schenk, CUNA vice president of economic and statistics, told News Now, adding that 34% of total credit union assets are in long-term assets, up from 26% in 2007.
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“That shows longer-term assets are growing because credit unions are holding more mortgages on their books and suggests credit unions have more interest-rate risk, so that you get liability sensitivity as liability costs rise faster than asset yields,” he added. “This can very negatively affect earnings, and in some cases, capital.” So, what should credit unions do, given that environment? “Credit unions should be writing loans that are up to secondary market standards, so they can be sold if they need to be sold,” Schenk said. CUNA’s U.S. Credit Union Profile for mid-year 2011 indicates that while credit unions are holding on to about half of their mortgages, the percentage of originations sold has doubled from 2007 to 2010. “That shows that credit unions are actively engaged in measuring, monitoring and controlling interest-rate risk,” Schenk said. What credit unions have seen during the past few years with overall loan growth is that members are focused on paying down debt, so loan growth is very weak, Schenk explained. With current mortgage rates at historic lows, housing affordability is high, and therefore there is a lot of refinance activity and stealing of loans from other lenders. At mid-year 2011, about 62% of mortgage originations were refinancings--down from 70% in 2010, Schenk added, citing figures from the Mortgage Bankers Association. Should credit unions get more aggressive in pursuing mortgage loans? “Credit unions should respond to what their members want,” Schenk advised. “They are doing that. Credit unions should market effectively, and establish relationships with realtors--some have realtors in their CUSOS [credit union service organizations]--to be more effective lenders.” Credit unions are aware of the need to diversify their portfolios, but demand for loans is very low, and consumer credit scores have come down, Schenk said. “The financial position of the average consumer has deteriorated,” he added. “Members are in an extended process of trying to mend their balance sheets.” Last week, it was widely reported in the media that 30-year fixed-rate mortgages dipped below 4% for the first time on record. The economics of the mortgage lending business is such that the secondary market--the government-sponsored enterprises of Fannie Mae and Freddie Mac--can’t afford to let rates go significantly below 4% because then they couldn’t cover their costs, Schenk explained. “So even though the 10-year Treasury rates may go down because of the Federal Reserve’s recent ‘twist’ [of the yield curve by lowering long-term market interest rates], 30-year, fixed-rate mortgages may not follow it down,” Schenk said.

Regulations addressed in four LSCU meetings with regulators

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TALLAHASSEE, Fla. (10/13/11)--The League of Southwest Credit Unions held four meetings with representatives from Alabama, Florida and federal regulatory agencies to discuss issues and look ahead to potential issues in late September.
Click to view larger image The League of Southeast Credit Unions (LSCU) recently held four meetings with regional regulatory agencies. From left, NCUA Supervisory Examiners Ricky Crews and Sharon Daigle; Bill Berg, LSCU vice president, regulatory affairs; Laura Vann, LSCU vice president, cooperative initiatives; and Rosanna Jacobsen, LSCU director, compliance solutions. (Photo provided by League of Southeast Credit Unions)
The League’s meetings with the Florida Office of Financial Regulation’s Division Director Linda Charity and Bureau Chief Bruce Ricca centered on upcoming issues and ways the league and its service corporation, LEVERAGE, can help credit unions with products and services. Charity and Ricca talked about four areas of concern:
* Increased scrutiny of the Bank Secrecy Act (BSA); * Interest-rate risk; * New regulations from the Consumer Financial Protection Bureau; and * Enterprise risk management.
In meetings with Alabama Credit Union Administration (ACUA) Administrator Larry Morgan and Credit Union Assistant Administrator Lloyd Moore, the league once again emphasized the services it provides. The ACUA talked about the issues that concern its staff:
* Flat-loan demand/commercial lending; * Troubled debt restructuring (TDR); * Earnings; and * Yield on assets.
LSCU’s meetings with National Credit Union Administration (NCUA) supervisory examiners addressed many of the same issues. NCUA Supervisory Examiners Dave Freeman, Sharon Daigle and Ricky Crews said credit unions can expect increased examiner attention to:
* Asset-liability management program and interest-rate risk; * Enterprise-wide shocks on credit risk; * BSA annual training for staff and volunteers and independent testing; * TDRs on loan modifications; * Operating expenses for small and mid-size credit unions; * Elevation of documents of resolution (DORs) and repeat DORs to letter of understanding and agreements; * Financial literacy training for board members; and * Full disclosure of allowance for loan and lease loss.
The NCUA Supervisory Examiner in Alabama, Robert Parrish, told the league his office is looking at a number of issues, including:
* Member business lending--NCUA is looking for a proven track record of ability to underwrite and manage these types of loans. * Loan participations--Participating credit unions should do the same underwriting as the originating credit union. * BSA--NCUA expects documentation of training and may require independent testing. Robust documentation when not filing a SAR helps build confidence in a BSA Program. * TDRs--Credit unions should follow accounting guidance. TDRs are a concern if credit unions made accommodations because members were experiencing financial difficulty.

iCNNMoneyi names two CUs among seven awesome FIs

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MADISON, Wis. (10/13/11)--As big banks continue to feel the heat in the media for charging high fees, a CNNMoney article Tuesday identified two credit unions as awe-inspiring in a recent article. In the article, “7 banks that are still awesome,” Alliant CU, Chicago, and Connexus CU, Wausau, Wis., were spotlighted for their free checking and accessibility. “Alliant is one of the largest credit unions in the U.S.,” the article said. “And while it’s located in Illinois, residents in any state can join if they meet certain requirements.” Alliant, with $7.8 billion in assets, offers a checking account with no monthly service fee and no minimum balance requirement, according to CNNMoney. Connexus CU, with $341 million in assets, offers a checking account with no monthly service fee and no minimum balance requirement. The credit union offers a 1.75% annual percentage yield on checking account balances of up to $25,000 for members who use their debit cards at least 10 times a month, make one direct deposit each month and receive electronic statements. “The account is free, carries no minimum balance requirement and comes with free online banking, mobile banking and online bill pay,” the article said. To read the article, use the link.

CU System briefs (10/12/2011)

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* MADISON, Wis. (10/13/11)--For first time, a credit union has been named Madison, Wis.'s Metropolitan statistical area's top home purchase financing lender, according to annual Federal Financial Institutions Examination Council (FFIEC) data. Madison-based UW CU, with assets more than $1 billion, was reported as advancing nearly $83 million for residential home purchases in 2010 in the area, which includes Dane, Sauk and Iowa counties. "This is the first time the federally published data has reported a credit union in top position" for the area, said Paul Kundert, president/CEO of UW CU. "Although home purchase volumes have been trending down, our home purchase mortgage lending market share has been on the rise and has more than doubled since 2005," he added. The credit union offers FHA, VA, WHEDA, My Community and Home Attainable loan programs to "help us provide the greatest possible access to affordable ownership," he said … * SPRINGFIELD, Ore. (10/13/11)--Springfield, Ore.-based Northwest Community CU has named John Iglesias as its new president/CEO. He succeeds Helen Byrnes, who recently retired. A former president/CEO at Salal CU, Seattle, Iglesias also has executive level experience with two of Washington State's largest credit unions--BECU and Washington State Employees CU. He also recently retired from the Navy Reserves as an intelligence officer. Northwest Community said Iglesias will build on the credit union's strong financial position to expand and improve services. The credit union, which served primarily wood products professionals, currently serves 15 counties between the Portland and Medford as well as between North Bend and Redmond. It has almost $700 million in assets … * HIGHTSTOWN, N.J. (10/13/11)--The New Jersey Credit Union League
New Jersey Radio Spot

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began airing a 60-second radio spot on a statewide radio station this week, encouraging listeners to urge members of Congress to raise credit unions' member business lending (MBL) cap. With today's challenging economy, New Jersey's small businesses need financial support. "Congress can help do something about that," and New Jersey's credit unions stand ready to help, the ad says. By raising the MBL cap, New Jersey credit unions would have $185 million freed up for small business loans and 2,000 jobs without costing taxpayers a dime. It pointed listeners to bankingyoucantrust.com for more information. The Credit Union National Association and credit unions have been pushing for Congress to raise the MBL cap to 27.5% from 12.25% to enable credit unions to assist the economy by offering more small business loans.

CUs woo consumers with bank fee campaigns

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MADISON, Wis. (10/12/11)--Credit unions are seizing on the public's discontent with big banks' fees and stepping up marketing efforts to pull in more members, said The Baltimore Sun (Oct. 10). It was just one of dozens of reports in media about credit unions seeing increased inquiries about membership as part of the Bank of America debit card fees fallout. Credit unions are attracting big-bank customers like Ken Rose, a Bank of America customer who is switching all his banking to Destinations CU in Parkville, Md., reported the Sun. Rose, a retired bus driver, told the newspaper, "You go to banks, they treat you like a criminal." But at credit unions, "they treat you so good." Destinations has served a credit-challenged field of membership, said Brian J. Vittek, president/CEO. Understanding the struggle of members, the credit union knows that "the last thing we want to do is impose more fines and more fees for no reason other than to make more money. Fees' almost like a bad word." Usually Destinations gains about 50 new members a month. But in September, 70 people joined the credit union, said the article. Richard Williams Jr., president, SecurityPlus FCU, Woodlawn, Md., told the publication that the fees outcry is "really an opportunity for most of us to … let people know we offer products that are equal to what large banks are offering." Consumers should take time, he said, to evaluate their relationship with their financial institutions. Rod Staatz, president/CEO of SECU CU of Maryland and vice president of the Maryland and District of Columbia Credit Union Association, noted that even without banks implementing fees "we're still a better deal than most of the banks out there." Many credit unions are wooing new members by educating the public about the benefits of credit unions and the credit union difference. But they also are pledging commitments to charging no debit card fees. In South Carolina, credit unions are signing "Free Debit Card" pledges. Sharonview FCU, Fort Mill, S.C., became the 33rd credit union to pledge that it would not charge debit card fees, said the state credit union movement's Facebook page. Michigan Schools & Government CU, Clinton Township, Mich., told Warren Weekly that consumers are taking notice that credit unions are not only a place to store money, but also a way to save from increasing bank fees. Kim Socha, marketing director, told the publication the credit union is gaining more wallet share. Triangle CU, Nashua, N.H., which grew about 7.5% so far in 2011, expects the numbers to increase after Bank of America's plans to charge $5 a month for debit cards were announced. Dick Lavoie, vice president of marketing at Triangle, told The Telegraph (Oct. 9) that banks keep shooting themselves in the foot by implementing restrictions on their accounts. People are fed up and moving accounts, and "They're coming to credit unions." Now is not the time to come up with a new fee in this economy, he said. Karen LaPlume, vice president of marketing at Granite State CU, Manchester, N.H., reported to The Telegraph the credit union had received a slight influx of people inquiring about their checking accounts and fees since the BofA announcement. Some credit unions are capitalizing on the opportunity in their advertising. "Why pay for your debit card?" asks an ad for St. Louis (Mo.) Community CU. The ad is "our bags-fly-free moment," said Patrick Adams, CEO, referring to Southwest airline's ad, which mocks fees charged by its competitors (St. Louis Post Dispatch via STLtoday.com Oct. 10. CNN Wire reported that consumers are "mad as hell, and they're not gonna take it anymore," referring to bank fees. The new fees are the final straw, but analysts cautioned against the difficulty of measuring the closure of accounts due to a policy change. However, one switch can be attributed to a $15 a month fee Chase placed earlier this year on the business account of Jeff Fisher, a graphic designer and author from Oregon. Fisher said he decided to switch banks, even though the location was less convenient. When he tweeted his dissatisfaction, he received two offers--one from OnPoint Community CU, Portland, and one from a smaller bank. After evaluating his options, he moved to the credit union. Fisher told CNN he "really appreciated" the way he was treated as a small business person. "They treated me like I was one of the biggest businesses in the city coming in."

First South Financial Dyersburg CUs merge

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BARTLETT and DYERSBURG, Tenn. (10/12/11)--Two Tennessee credit unions--First South Financial CU, Bartlett, and Dyersburg (Tenn.) CU--have merged, effective immediately. First South Financial CU is a $385 million asset credit union with 46,877 members. The merger will bring its 15th branch location. Dyersburg CU is a $12 million asset, community based credit union serving 3,300 members in Dyer County. It has one branch and nine employees. Although the merger is effective immediately, both credit unions will continue to operate independently until their information systems can be combined. "We hope to achieve this goal by Nov. 30," South Financial CU President/CEO Craig Esrael said in a letter to members on the credit union's website. The letter attributed the merger to the financial crisis of 2008, which brought the recession, and "sweeping regulatory changes that have dramatically affected several areas of credit union operations. These new rules and regulations have been challenging for all financial institutions to implement, but the burden is even greater on small credit unions, who may not have the time or resources necessary to make these major changes while also conducting normal business." There will be no job cuts from the merger, Esrael told the Memphis Business Journal (Oct. 10). The merger provides an opportunity for the combined credit union to grow, with Dyersburg CU members receiving access to services and products not previously available and with First South Financial benefitting from an expanded membership base, he said.

NCUA seeks 2.2M from St. Paul Croatian members

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AKRON, Ohio (10/12/11)--The National Credit Union Administration (NCUA) filed a lawsuit Friday in a federal bankruptcy court in Akron, Ohio, against two members of the now defunct St. Paul Croatian FCU, seeking more than $2.2 million on defaulted loans related to a scheme that involved kickbacks to the Eastlake, Ohio, credit union's former chief operating officer. In the court document, filed Friday in the U.S. Bankruptcy Court for the Northern District of Ohio Eastern Division, Akron, NCUA alleged that Sinisa Nmn Baros and Simona Nmn Baros of Medina, Ohio, owe $2.2 million for multiple loan principals and interest for loans fraudulently granted them by the credit union's former chief operating officer, Anthony Raguz. The Baros couple filed for Chapter 7 bankruptcy on March 25, said the document. NCUA is seeking to make the amounts owed nondischargeable in bankruptcy. NCUA placed the credit union into involuntary liquidation on April 30, 2010. Raguz has pleaded guilty to six counts of fraud, money laundering and bribery related to more than 1,000 fraudulent loans totaling more than $70 million to more than 300 account holders between 2000 and April 2010. He was one of 16 people charged for their roles in the credit union's collapse. Raguz is scheduled for sentencing on Jan. 4 (News Now Sept. 29). NCUA's complaint said that Sinisa Nmn Baross received multiple loans from the credit union through Raguz and refinanced loans numerous times. Each time he allegedly received additional advances of money, and failed to disclose changes in his financial condition, such as unemployment. NCUA also alleged that he misrepresented his income on at least one application to obtain loans, and that Raguz and Baros shifted loans to Mrs. Baros' share account to spread the loan money over a broader base. The complaint also alleged that the couple made no payments on the loans from 2002 to 2010 and provided no collateral for the loans, except for a home loan. It charged that Raguz took kickbacks of as much as $30,000 to process the loans. The liquidation of St. Paul Croatian FCU cost the National Credit Union Share Insurance Fund about $170 million in losses, making it the largest credit union failure in history.

Internatl CU regulators issue 21 principles of supervision

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MADISON, Wis. (10/12/11)--The International Credit Union Regulators’ Network (ICURN), an independent international body that promotes greater global coordination among cooperative financial services regulators, has issued Guiding Principles for the Effective Prudential Supervision of Cooperative Financial Institutions. The new document outlines 21 principles conducive to developing an effective supervisory system for credit unions, caisses populaires, savings and credit cooperatives, savings and credit associations and other global financial cooperatives, said the World Council of Credit Unions (WOCCU). WOCCU serves as the ICURN secretariat. Based on the Core Principles for Effective Banking Supervision, developed by the Basel Committee on Banking Supervision, the document’s intent is to serve as guiding principles to help establish an environment to facilitate effective supervision of credit unions and other financial cooperatives. “We believe that the implementation of these guiding principles by supervisory organizations in all countries that support a cooperative financial services sector would be a significant step toward continuing their excellent record of financial safety and soundness,” said Andy Poprawa, ICURN chair and president/CEO of the Deposit Insurance Corporation of Ontario, Canada. “Our network of member countries is committed to these principles as one more tool to enhancing the public's confidence in financial cooperatives.” The 21 guiding principles fall into specific groups of oversight. The groups include:
* Objective, independence, powers, transparency and cooperation; * Licensing and ownership; * Prudential regulation and requirements; * Methods of ongoing supervision; * Accounting and disclosure; and * Enforcement.
Although based on the Basel Committee’s guidelines, the principles were developed independently by the ICURN steering committee to offer guidance to the organization’s members. The goal of the principles is to help ICURN members--who represent a range of supervisory structures--develop prudential oversight methodologies appropriate to their individual circumstances. “Credit unions around the world thrive when they have appropriate prudential oversight to guide their growth and development,” said Brian Branch, WOCCU president/CEO. “Assuring that the guidance is appropriate and empowering to credit unions is the goal of the Regulators’ Network’s new guidelines.” Formed in 2007, ICURN has members in 30 countries and jurisdictions. A steering committee of representatives from six regions across the world leads ICURN and assists WOCCU in organizing the annual Regulators’ Roundtable. The next roundtable will take place June 18-20 in Toronto, Canada. For more information on ICURN and a copy of the guidelines, use the link.

CU System briefs (10/11/2011)

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* FRESNO, Calif. (10/12/11)--Counterfeit checks are circulating with Fresno County FCU's name, according to the Better Business Bureau (BBB). The Fresno, Calif.-based, $438 million asset credit union learned that official bank checks were sent with a scam letter encouraging recipients to cash the checks (ksee24.com Oct. 7). The credit union was notified by an officer of the U.S. Customs & Border Patrol division of the JFK Airport in New York, who indicated that the division had confiscated one box of checks shipped from Africa to an individual in Los Angeles. The box contained 250 FCFCU "official" checks in various dollar increments: $40,000, $15,000, $7,500, $3,500, and $2,500. The box could have cost more than $2 million in losses. The credit union also received calls from various banks and individuals indicating they had been presented the checks and asking for verification of funds … * HARRISBURG, Pa. (10/12/11)-- Harrisburg, Pa.-based Belco Community CU announced that two training activities of its training coordinator, Jennifer Fetterhoff, have been published in a new book, "The Book of Road-tested Activities by Elaine Biech. The book was published by the American Society of Training and Development and Pfeiffer, a resource for training. It includes a collection of more than 100 games and activities tested in real training situations. Fetterhoff's contributions, "Acquainted Antics" and "Puzzled Prospects," were both created for Belco employee training sessions and are among the few submissions from financial institutions, said the credit union. Fetterhoff, shown with the book, is co-editor of the Central Pennsylvania ASTD chapter newsletter. (Photo provided by Belco Community CU) … * LEWISTON, N.Y. (10/12/11)--Virginia A. "Ginny" Venditti, manager of the Niagara Falls Air National Guard FCU, Niagara Falls, N.Y., for more than 25 years, died Sunday in Lewiston, N.Y. She was 57. Venditti served as treasurer of the board and treasurer of the Niagara chapter of the Credit Union Association of New York (CUANY) for more than 15 years. In 2006, she received the "Professional of the Year" award from CUANY. In 2009, the credit union merged with Niagara Falls Air Force FCA, where she continued working until her illness (Niagara Gazette Oct. 9) …

Survey Consumers duped by online banking sites

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MADISON, Wis. (10/12/11)--When trying to find the official website of an advertised product or service, 67% of consumers visit a different website than the one they had intended after using a search engine, according to a September survey about online shopping, navigation and trust by Melbourne IT Digital Brand Services. The company is an Australian first domain name registration company, which also does website design, e-mail and Web hosting. It conducted the survey in September with 1,007 consumers. For consumers who go online, fraud remains a big concern, the survey found. A third of consumers surveyed said they have trouble differentiating between websites selling genuine goods and those selling counterfeit items. Of those who don’t regularly shop online, 36% are worried about the security of their information or money, and 19% are concerned about buying fake products. When banking online, nearly half the consumers surveyed rely on website appearance for authenticity--which helps phishing scams that collect sensitive personals information by pretending it be a trustworthy entity, Melbourne IT DBS said. “Marketers strive to capture online shoppers from offline marketing efforts, yet with the majority of consumers using a search engine such as Google to find a company’s site, the risk is most users get side-tracked,” said Tim Callan, chief marketing officer, Melbourne IT DBS. “It is a real concern for the brands that spend millions on TV and radio ads, sponsorship, and direct mail to get those leads to the right website to buy, without losing them along the way.” Other key findings of survey:
* 80% think online brands should better help consumers tell the difference between websites selling genuine goods from websites selling counterfeit or fake goods. * 74% are likely to go online to find a better deal than what they found in-store, before buying; * 49% prefer to visit websites that remember preferences and display relevant information; and * 44% of consumers shop online a few times a week or month; 6% shop online daily.

Federation forms committee for NYCs IYC campaign

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NEW YORK (10/12/11)--The National Federation of Community Development Credit Unions has organized a Host Committee with representatives of all the cooperative sectors in New York City to mark the International Year of Cooperatives (IYC), which will officially kick off Oct. 31 with a statement by United Nations Secretary-General Ban Ki-moon in New York City. A year-long campaign, “New York: Building a Cooperative City,” will be launched Nov. 1 with a seminar at the Ford Foundation in New York City. The seminar will feature panel discussions by representatives of credit unions, and housing, food and workers’ cooperatives, as well as a proclamation by the City Council. Federation President/CEO Cliff Rosenthal described the excitement that IYC has generated. “For the first time, we brought together representatives of all the co-op sectors in New York,” he said. “We estimate that among credit unions, housing co-ops, and others, more than one-million New Yorkers are members of cooperatives.” One of the main goals of the campaign is to raise awareness of the role cooperatives play in people’s lives. “Many people actually do not fully realize that they are members and owners of their cooperatives,” Rosenthal said. “Some, though not all credit unions, for example, do not prominently market the fact that they are financial cooperatives. We think that this is a huge opportunity to spread that message to the masses.” The National Cooperative Business Association, of which the federation is a member, is the U.S. coordinating body for IYC. “I was inspired by a recent opportunity to meet with the Caribbean Development Educators, some of whom had developed a detailed, creative month-by-month plan to celebrate IYC,” Rosenthal said. The seminar is free, but attendance is limited, so pre-registration is required. For more information, use the link, or contact federation Program Associate Elizabeth Friedrich at: efriedrich@cdcu.coop or 800-437-8711, ext. 205.

111 people in five ID theft rings charged

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NEW YORK (10/12/11)--Roughly 111 people--among them employees of financial institutions--have been charged in a worldwide identity-theft scheme based in Queens County, N.Y., allegedly responsible for an estimated $13 million in fraudulent purchases. The defendants, members of five organized crime rings based in Queens County with ties to Europe, Asia, Africa and the Middle East, allegedly stole account information with card skimming devices in financial institutions, restaurants and stores. Eighty-six are in police custody. Another 25 are still at large. The defendants were charged in 10 indictments, culminating a two-year investigation, dubbed “Operation Swiper” by authorities. Queen County District Attorney Richard A. Brown calls the indictments the “largest identity theft takedown in U.S. history.” “This is by far the largest--and certainly among the most sophisticated--identity theft/credit card fraud cases that law enforcement has come across,” Brown said. “Credit card fraud and identity theft are two of the fastest-growing crimes in the U.S., afflicting millions of victims and costing billions of dollars in losses to consumers, businesses and financial institutions. Thousands of people were allegedly defrauded during 16 months, from May 2010 until last month. Scamsters often gained victims’ credit card information from restaurant employees who used hand-held skimming machines, according to the indictment. Hackers working overseas and financial institution employees also played a role in stealing personal information, they said. Earlier this year, CUNA Mutual Group reported an uptick in card fraud, saying credit unions across the nation were experiencing losses. Those losses were not believed to be a part of the skimming activities, however. Stolen account numbers were sent to a “manufacturer” who re-encoded the information onto the magnetic strips of blank credit cards using a “reverse” skimming device. Other members of the ring then forged credit cards with the stolen account information and went on weekly shopping sprees, purchasing designer clothes, electronics, jewelry and travel services. Shoppers were helped by collusive store owners or employees who had access to cardholder information and could identify high-value targets and/or steal credit card information, according to the indictments. Once a shopper purchased high-end merchandise with forged credit cards, the merchandise was turned over to the crew leader who gave the merchandise to the ringleader of the operation. The ringleader would sell the merchandise to a “fence” at a discounted price. Nearly two dozen of the defendants were also charged with participating in burglaries and robberies in Queens County. Four defendants are charged with conspiring to commit a bank robbery in Forest Hills, N.Y. Five are charged with stealing more than $95,000 worth of cargo from Kennedy Airport, and seven are accused of stealing about $850,000 worth of computer equipment from the Citigroup Building in Long Island City.

Leagues recognized by CUNA for communications efforts

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MADISON, Wis. (10/12/11)--The Credit Union National Association (CUNA) announced its 2011 Blockbuster and Pro Awards for outstanding communications work by state credit union leagues at last week’s American Association of Credit Union Leagues Communicators Conference in Minneapolis. Leagues submitted 56 entries in 17 categories. Blockbuster awards are divided into two sections: 1) advertising and marketing efforts for state-level organizations, and 2) advertising and marketing for credit unions. Leagues that won first-place awards in Blockbuster category are:
* Best Sales Promotion--League of Southeastern Credit Unions; * Best Print Materials--North Carolina Credit Union League; * Best Campaign--Michigan Credit Union League; * Best Credit Union Ad--Montana Credit Union League; * Best Credit Union Campaign--Michigan Credit Union League; and * Best Logo Design--Georgia Credit Union Affiliates.
The Blockbuster Best of Show award was presented to the Michigan Credit Union League for its Best Campaign entry. Pro Awards recognize the best public relations and online communications efforts. First-place awards in the Pro category were presented to:
* Blow Your Own Horn--Pennsylvania Credit Union Association; * Best Community Relations Program--Montana Credit Union League; * Best Public Relations Project--Michigan Credit Union League; * Best Piece on the Uniqueness of Credit Unions--Wisconsin Credit Union League; * Best League Publication (Newsletter)--Credit Union Association of the Dakotas; * Best League Publication (Magazine)--California/Nevada Credit Union League; * Most Improved Newsletter or Magazine--Minnesota Credit Union Network; * Best League Annual Report or Yearbook (print)--Kansas Credit Union Association; * Best Website--League of Southeastern Credit Unions; * Best Online Publications--Pennsylvania Credit Union Association; and * Best Use of Social Media--Michigan Credit Union League.
The Pro Best of Show award was presented to the Montana Credit Union Network for it Best Community Relations Program entry.

NCUF makes 19 fin-ed grants for 2012

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MADISON, Wis. (10/12/11)--The National Credit Union Foundation (NCUF) has approved 19 financial education grants for 2012, totaling $287,387. About 34% of consumers gave themselves a grade of C, D or F in personal finance skills, according to last year’s Financial Literacy Survey of adults from the National Foundation for Credit Counseling Inc. About 78% agree that they would benefit from advice and answers to everyday financial questions from a professional, and nearly one-third (31%) strongly agree. “The need for financial education is still critical in America,” said Tom Candell, NCUF deputy executive director/chief operating officer/chief financial officer. “This is the second year in a row that NCUF is focusing exclusively on financial education in our grants, which will ultimately help more people achieve financial freedom.” NCUF grants are made possible by supporters of the foundation and the Community Investment Fund, a system of investments that helps credit unions earn dividends while donating to national and state community development programs. To view a list of the grant awardees and their projects, use the link.

RCU acquires mortgages from The RiverBank

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EAU CLAIRE, Wis. (10/12/11)--Royal CU (RCU), based Eau Claire, Wis. with $1.2 billion in assets, and The RiverBank, Osceola Wis., have entered into an agreement for RCU to acquire the servicing rights of The RiverBanks’ $600 million in mortgage loans. The transaction, which is expected to be finalized Monday, adds about 4,200 mortgage loan members to RCU. “We welcome these 4,200 mortgage customers to RCU,” said Charles Grossklaus, RCU CEO. “Our commitment to staying local is strong and, consistent with our vision to satisfy all of our members’ financial needs; we look forward to building relationships with these members so we can be there when they need their next financial product.” In a letter to its customers The RiverBank said, “We have now come to a turning point in our business model that we need to make a change. Realizing the importance of the local servicing, we have partnered with RCU to transition the servicing.” The transfer of the servicing of the mortgage loan does not affect any term or condition of the mortgages.

IN.Y. TimesI 117 media outlets spotlight CUs no fees

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MADISON, Wis. (10/11/11)--The groundswell of attention to credit unions as the no-fee choice for debit cards continues, with Associated Press spotlighting their efforts. As of Friday afternoon, the AP item had been repeated in 117 publications and websites--including The New York Times and the Los Angeles Times (Oct. 7). The article, which appeared as "Mad at bank fees? Credit unions get another look" in The New York Times, notes that "credit unions are basking in the spotlight again." "Whenever a big bank rolls out a controversial fee, customers start fuming about taking their business elsewhere and the attention often falls on credit unions," the article says. "That happened again …when Bank of America said it would soon start charging customers a $5 monthly fee to make debit card purchases. This time around, it seems some customers have finally had it." The article says several credit unions saw higher percentages of new account openings since the news. It notes that the Credit Union National Association (CUNA) is reporting an uptick in inquiries and account openings and cites locate credit union websites such as www.ASmarterChoice.org. The article also offers a rundown on what credit unions can and can't offer, and it quotes CUNA on joining a credit union and on why credit unions can offer better rates. For the full article, use the link. That wasn't the only article circulating. A number of media outlets had opinions on the debit card fees topic and discussed credit unions as alternatives. "Just when it seemed American consumers couldn’t get more nickel and dimed, the larger financial institutions decide to pile on yet another reminder that they couldn't give two cents about the little folks they call customers," wrote Michelle Durand in her "Off the Beat" column on the The Daily Journal in San Mateo, Calif. Thursday. "The beauty of this newest financial kick is that now smaller institutions, both banks and credit unions, have a greater opportunity to throw the net wide for consumers with promises of free services that actually have interest attached. Who would have thought those are still options?" Durand wrote. Another blog, "Be pro-active about banking fees," written by guest columnist Rick Bloom on the Observer & Eccentric, told readers, "don't be afraid to look at credit unions and internet banks...Credit unions, for example, have become very easy to deal with. It used to be they didn't offer some of the same services as banks; that is no longer the case. Credit unions have become very user friendly and save consumers a substantial amount of money." A guest editorial inThe Modesto Bee (Oct. 6) from Andrew Ogilvie of Modesto, Calif., urged consumers upset with fees toward "a simple solution: Don't do business with the big banks. Close your accounts and go to a credit union or community bank...It's so easy; the credit union will help you. Move your money now." Leagues and credit unions also stepped up their outreach to media and consumers on the topic. On Wednesday, Philadelphia's NBC 10 "Consumer Watch" segment focused on how consumers are getting around rising bank fees and switching to credit unions. Consumer reporter Tracy Davidson interviewed Mike Wishnow, senior vice president, communications & marketing at the Pennsylvania Credit Union Association, via Skype (Life is a Highway

National radio host Ramsey Leave the bank go to CU

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ORANGE COUNTY, Calif. (10/11/11)--Best selling author and national radio talk show host Dave Ramsey is telling his more than one million listeners to leave their bank and head to Eagle Community CU, Lake Forest, Calif.
Click to view larger image Best selling author and national radio talk show host Dave Ramsey is endorsing Eagle Community CU exclusively in the Los Angeles area, said the Orange County, Calif.-based credit union. He tells listeners to leave their bank and head to the Eagle. Ramsey is shown here with Eagle staffers: , from left: David Ward, CEO Bill Birnie, Doug Nigbor, Emily Friesen, Ramsey, Andrea Alcala, Dana Holden, Lindsey Rarey and Nguyen Dao. (Photo provided by Eagle Community CU)
Earning his endorsement doesn't come easily. His team, working with CBS Radio, visited multiple Eagle branches to make sure the service standards met his own, and did due diligence to make sure the credit union was a worthy brand partner. "Dave is a big supporter of credit unions, and when the opportunity came up to partner with him, we jumped on it," said Emily Friesen, vice president of marketing for the $190 million asset Eagle. "As a Dave Ramsey fan, I know how loyal his listeners are. Those are the kind of people we want to work with--those are the people credit unions were created for." In the radio ad, Ramsey says, "the folks at Eagle Community CU are who I would recommend to my friends and family." The endorsement has driven hundreds of unique visitors to www.EagleCu.org/Dave in the past three months. Since the launch of the campaign, there has been a noticeable shift in member perception of the credit union. "While we certainly see new members coming in, what's especially interesting is the shift of low-participating members moving multiple relationships to Eagle after hearing Dave talk about us," Friesen said. The credit union is also one of the sponsors of the sold-out Dave Ramsey "Total Money Makeover" event at Long Beach Convention Center in September. Eagle Community CU CEO Bill Birnie noted that during the event the credit union "had a steady stream of traffic to our table all day long--how great that all of those people were excited to learn more about credit unions."

Facebook Bank Transfer Day generates pro-CU comments

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MADISON, Wis. (10/11/11)--The FaceBook page for Bank Transfer Day, Nov. 5, is garnering many comments that are favorable to credit unions. Some protestors--who seem to be associated with the Occupy Wall Street movement--have organized the event to remove all funds from banks and into credit unions (www.cnbc.com Oct. 7). At issue is an amendment to the Dodd-Frank and Wall Street Reform and Consumer Protection Act that caps debt interchange fees banks charge merchants. The protestors say they oppose the amendment because banks will start charging customers $3 to $5 to offset cash the institutions will lose because of the interchange fee cap, CNBC said. Also, the Burlington Free Press reported Thursday on Burlington, Vt., resident Matt Cropp's participation in the ongoing "occupation" of Wall Street. Cropp, 24, noted the low-key activism is to continue every Sunday so long as the Wall Street protests remain in effect. "Cropp said he believes the demonstrations are as much about finding sustainable economic options, as they are against the excesses of Wall Street," said the article. "He favors locally managed credit unions over banks that received stimulus bailouts and that dole out huge bonuses," the article continued. Some of the comments posted on the Bank Transfer Day website include:
* “I’ve been with my credit union since I was about six years old. Never leaving. They treat me like a person and they actually help.” * “Already transferred to a credit union. I got tired of all the fees for the bank to hold my money.” * “I’ve been with credit unions since opening my first account at age 14. I wouldn’t have it any other way.” * “Credit unions are the only way to go.”

CU System briefs (10/10/2011)

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* PORTSMOUTH, N.H. (10/11/11)--New Hampshire Gov. John Lynch sang the praises of $1.9 billion Service CU, based in Portsmouth, N.H., for its unwavering support for its members and community during a ceremony to celebrate a milestone in the construction of the credit union’s headquarters. The event marked fastening of the final beam to the 100,000-square-foot structure (seacoastonline.com Oct. 7). As the keynote speaker for the event, Lynch signed the 800-pound beam and watched as workers placed it on the top of the building’s skeleton. Service CU President Gordon Simmons said the credit union is long-overdue for new headquarters, but it had previously invested in branches, products and member services. The new facility is expected to bring 100 jobs to the city during the next five years … * MACON, Ga. (10/11/11)--A man who was denied a loan by a credit union is in custody after allegedly threatening to return and shoot employees at the branch. Joseph Anthony Fields, 21, of Macon, Ga., was arrested and charged with making terroristic threats, participation in a criminal street gang and criminal trespassing. The incident occurred at 11:30 a.m. Wednesday at the Macon branch of Warner Robbins, Ga.-based Robins FCU. When denied the loan, Fields allegedly said he would return and "pick off" several employees with a .45-caliber Glock handgun, police said, adding that Fields allegedly repeated the threat while in police custody. There was no disruption to business at the credit union. An off-duty police officer will be stationed at the branch during business hours for several days, police said (Macon Telegraph Oct. 7 … * SOLEDAD, Calif. (10/11/11)--Christopher Alcaraz, formerly employed by the Unified Correctional FCU in Soledad, Calif., for three and one-half years, was sentenced Wednesday to 180 days in county jail and five years of probation for embezzling more than $135,384, Monterey County District Attorney Dean Flippo announced Thursday (Targeted News Service Oct. 6). On July 27, Alcaraz pleaded guilty to one count of felony embezzlement. The missing funds were discovered during a teller drawer audit drew suspicious behavior and a probe of daily ATM deposits, for which Alcaraz was responsible. The judge made a home confinement program available to Alcaraz upon immediate payment of $50,000 in restitution …

Alliant CU paper Need fin lit training in workplace

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CHICAGO (10/11/11)--Alliant CU in Chicago has issued a white paper on the need for financial literacy training in the workplace, after researching the topic, interviewing company human resources managers and conducting surveys of employers and employees. In a period of economic stress and company benefit cutting, companies nationwide are offering financial literacy courses to help employees gain greater skill and confidence in handling their finances, said the $7.86 billion asset credit union. It is providing findings to help employers get a sense of whether financial literacy training is appropriate for their company and how to go about implementing it, Alliant said. Fifty-seven percent of employers have seen an increase in demand for financial literacy training during the past two years, yet only 36% of U.S. companies offer financial education, according to Alliant CU’s surveys. Other findings include:
* Financial literacy, plus today’s economic hard times, can lead to financial stress, which diminishes employee productivity; * There are indications that financial literacy training can help in building employee confidence and skill in money matters; and * Some companies have experienced a substantial return on investment by providing the training, even with a limited budget.
For more information, use the link.

Ireland to recapitalize CUs with bank funds

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DUBLIN, Ireland (10/11/11)--Ireland will provide up to one billion euros (about $1.376 billion) to recapitalize the country’s credit unions and save some from collapsing. Although some Irish credit unions are not having any difficulties, “others are on the brink of falling down a hole,” said Michael Noonan, Ireland’s finance minister (irish.examiner.com Oct. 7). The money is available in funds that were set aside for banks, but were not used, Noonan added. Therefore, the government would have to ask Ireland’s Exchequer for more recapitalization money for credit unions, the newspaper said. The recapitalizations would be done in phases, Noonan told the paper. Many of Ireland’s credit unions are expecting to be negatively impacted this year because the country’s financial regulator is pressing community lenders to value all of their assets-- including property--at market levels, credit union sources told the paper. Credit unions heavily invested in property during the country’s economic boom, the paper said.

Auto sales reports dont discourage Express-News FCU

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SAN ANTONIO (10/11/11)--Undeterred by a slow auto sales market and a sluggish economy that resulted in layoffs at its primary select-employee group, $6.5 million asset Express-News CU in San Antonio saw an opportunity to launch multiple campaigns to generate more auto loans. Nationwide, vehicle loans outstanding have increased a modest 0.2 % through August with a 9.4% decline in new-vehicle loans offset by a 6.1% increase in used vehicle loans, according to the Credit Union National Association. “The economic recession resulted in massive lay-offs at our primary select employee group,” Linda Tudyk, Express-News FCU president, told the Texas Credit Union League (Loan Star Leaguer Oct. 7). “Those fortunate enough to keep their jobs were reluctant to take on new debt. “However, it seems that things have stabilized now and those remaining employees are feeling much more secure in their future with the newspaper. That security is reflected in an increased number of loan applications.” Express-News CU increased its loan portfolio by $72,188 in loans in September, primarily through auto loans, Tudyk added. The credit union wrapped its summer loan program in late August and immediately launched a fall promotion. Express-News CU is using its website, social media and in-branch promotions to generate interest in the fall auto loan program. “It can be pretty hard to compete against dealer rates, but we’re doing our best,” Tudyk told the Texas league. “We’re telling our members that whatever rate the dealer offers, come and see us and we’ll try and beat it.” The “meet or beat” it fall promotion has generated a significant number of loans said the credit union. The promotion will end later this month. There are signs that the auto loan market is rebounding. In the January-June period, new auto loan originations were ahead 15% over the same period in 2010, according to Equifax’ latest monthly report on automotive consumer credit trends (Automotive World Oct. 4). Although the June auto loan origination total of 1.7 million was slightly lower than the March total of 1.8 million--the highest 2011 monthly total---it still represented almost an 11% increase over the June 2010 level. As a monthly total, June 2011’s loans were greater than the 1.6 million originations from August 2009, during the heavily promoted auto manufacturers’ 'Cash for Clunkers’ incentive program. Also, there was discrepancy in percentages of subprime loans originated by banks/credit unions/savings and loans--less than 10%--versus those originated by auto finance companies--25%--with Equifax Credit Scores below 600.

CU Newtek helps caf with MBL

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NEW YORK (10/11/11)--As the owner of a café in a small town in eastern Colorado, Mike Decker runs a small business, but he would be the first to admit he needs the expertise of others to navigate waters of business lending. Decker found himself in over his head when he realized he had signed an agreement on an Small Business Administration (SBA) 7(a) loan that made him liable for a $94,000 balloon payment in October 2010. He turned to an Ent CU branch in Falcon, Colo., to seek assistance. Ent referred Decker to the The Small Business Authority, powered by Newtek Business Services Inc. Newtek is a CUNA Strategic Services provider. Joe Chiarappa, a Newtek business service specialist, helped Decker modify his loan--and keep his business. Decker expressed his gratitude for Chiarappa’s willingness to advise him step-by-step through a labor-intensive, technical process. “I thank you for helping me keep this business alive,” Decker wrote. “I provide a service, not gourmet food, just a delicious home-cooked meal served with hospitality. Sure, someone could have picked up our cafe, but no one would run it like we do--with love.” The Credit Union National Association and credit unions are urging Congress to increase credit unions’ member business lending cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity for credit unions to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

CDCU joins no age limit ICU Day campaign

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CHICAGO (10/11/11)--North Side Community FCU, with $11 million in assets, Chicago, will launch its “Better Directions: Financial Security Has No Age Limit” campaign on International Credit Union Day, Oct. 20. North Side Community FCU was one of eight community development credit unions (CDCUs) nationwide to receive a grant to enhance the economic security of their low income older members and the disadvantaged aging community. “Better Directions: Financial Security Has No Age Limits” is a national campaign in partnership with the National Council on Aging and National Federation of Community Development Credit Unions. With the grant, North Side Community FCU is expanding its marketing and community outreach efforts to build new relationships; promote new higher-interest savings accounts; make available low-interest, affordable loan products; and develop financial education programs that focus on expense reduction, savings and budgeting for adults aged 60 and older. The Better Directions program is funded by the New York-based Atlantic Philanthropies, through its Aging Program, which seeks to help vulnerable seniors become financially secure and advancing supportive measures by effecting long-term change.

Mad City Money teaches real world to Calif. students

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ONTARIO, Calif. (10/7/11)--Twenty-eight students from a Santa Ana, Calif., high school received a taste of the financial realities of paying mortgages, buying cars and paying for groceries during a "Mad City Money" financial simulation event Sept. 24.
Click to view larger image Representatives of Orange County, Calif., credit unions served as "merchants" during the Orange County Chapter-sponsored Mad City Money financial simulation event in Santa Ana, Calif., where students from Century High School got a lesson in the basics of finances.
Century High School student Neleyda Sanchez speaks with Leticia Mata, assistant vice present of community education at Orange County's CU, Santa Ana, Calif., during a Mad City Money financial reality simulation game sponsored by credit unions. Mata acted as a grocery store merchant during the event. (Photos provided by the California and Nevada Credit Union Leagues)
Mad City Money is the Credit Union National Association's simulation game where students are "transported" into a future and must manage all the financial responsibilities. The event, which took place at Century High School's Business Academy in Santa Ana, was sponsored by credit unions in the Orange County Chapter of the California and Nevada Credit Union Leagues. For Sandra Alvarez, who plans to be a Google executive, the two-hour game was eye-opening, especially upon learning the consequences of credit card debt. "The biggest thing I learned today is that I need to go to college, and look for a job to support myself and my family," she said. Another student, William Sanchez, also was taken aback by the amount of debt one can accumulate so quickly. "(I learned) to keep better track of the money I spend and keep better track of my debt," he said. "It was a really good thing to go through all of this." Seventeen volunteers from four credit unions acted as merchants and business people--including the staff of a credit union. "Not only did we as 'merchants' get to see the students in action as they considered their options, but we had a chance to learn their perspective on how they view the world and the many challenges they face," said Marina Miller, Orange County Chapter president and SchoolsFirst FCU internal service center manager. "It was very rewarding and encouraging to see that we have a great group of upcoming leaders." The chapter helps facilitate the league's goals of providing education, advocacy and information.

CU System briefs (10/06/2011)

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* WEST MONROE, La. (10/7/11)--(Corrected version.)John Larry Gathright, 38, a financial adviser in West Monroe, La., was arrested and charged with bank fraud and money laundering of funds possible exceeding $1 million in thefts from 11 clients (The News-Star Oct. 5). He was arrested after a man who holds the power of attorney for his 75-year-old mother, reported allegedly suspicious activity in his mother's retirement account. The victim's son alleges more than $200,000 was taken. According to court documents, more than $250,000 had been withdrawn from the victim's checking account between July 2010 and March 2011. According to court records, Gathright was already under investigation at the request of Ouachita Valley CU for allegedly depositing suspicious third-party checks into the credit union … * BARTLETT, Tenn. (10/7/11)--Frank Buckley III, 38, of Arlington, Tenn., was charged with robbing First South Financial CU's Cordova, Tenn., branch on Sept. 27 after a teller recognized him while shopping in the area the next day. The teller's husband wrote down Buckley's license tag number, and gave it to police. Buckley, a fast-food cook, allegedly entered the credit union and slid her a note that said, "No bait, no dye. I have a gun and I will shoot." The robber then lifted his shirt to indicate a pistol stuck in his waistband. When the teller began handing the gunman money from her drawer and reached for a dye pack, the robber raised his eyebrows and again lifted his shirt. The next day, the woman spotted him at a local store, and he left. The teller also identified him from a photo spread, said the court records (The Commercial Appeal Oct. 4) … * GRAND RAPIDS, Mich. (10/7/11)--A former assistant branch manager at Lansing, Mich.-based Case CU was sentenced by a U.S. District judge to two years and three months in a federal prison for embezzling $236,000 from accounts at the $201.3 million asset credit union. Marcie Graham, 31, of Mulliken, Mich., had pleaded guilty to embezzling the funds between 2008 and 2010. Court records indicated she allegedly selected accounts with large balances believing the accountholder of large accounts would be less likely to notice missing funds. One account belonged to a relative, the records indicated. Graham also was ordered to pay $256,333 in restitution (LansingStateJournal.com Oct. 5) … * DUNCAN, Okla. (10/7/11)--Halliburton Employees' FCU (HEFCU), based in Duncan, Okla., announced that as of the end of July, it has reached the $100 million asset milestone. Since 2008, HEFCU has increased its assets by $30 million, the credit union said in a press release. CEO Chris Bower attributed the growth to an increase in share accounts and loans …

CUs reach out with no-debit-fee promos

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MADISON, Wis. (10/7/11)--Banks' new debit card fees have become the last straw for many outraged consumers. Credit unions are jumping at the opportunity to let consumers know they can get a better deal at credit unions through a variety of no-fee promotions and anti-fee advertisements. For example, Raleigh, N.C.-based Coastal FCU took advantage of "active social media monitoring, brilliant staff execution, $35, a bale of hay, and a healthy dose of public anger" to buy a public relations coup in the wake of the Bank of America's (BofA) announced debit fee increase last week, said the North Carolina Credit Union League (Weekly Update . The $2 billion asset credit union decided in August to increase the dividend rate on its Go Green Checking Account to 2.51% for 30 monthly debit swipes, effective Oct. 1. It had announced the change to members and scheduled television ads to announce the change this month. "Other than television ads, we hadn't thought about doing a media announcement on the rate change," Joe Mecca, Coastal's marketing/advertising manager, told the league. The thinking changed when BofA's $5 a month fee on debit transactions was announced Sept. 29. That evening, Mecca and Lauren Stranch, Coastal's PR/networking specialist, monitored Twitter to gauge public reaction. "We noticed that people [on Twitter] were really angry about the bank fee, and our members were actually replying back to them to let them know about Coastal's account and including us in the tweet," Mecca said. Sensing an opportunity, the credit union jumped. It sent local media a press release announcing the increased swipe dividend on debit purchases and scored several hits, including WRAL-TV and the Raleigh News & Observer. It also brainstormed its new ad, "the last straw," and produced it the same day, Mecca said. Coastal Advertising Lead Paul Styron bought props for it: a bale of hay, some trash bags and a downloaded sound effects file. Total cost: $35 and staff time to edit the spot in-house. The ad hit the area's airwaves Tuesday and the credit union doubled up on its planned ad buy for the next two weeks. (To view it, click on the embedded video above.) Although it's too early to demonstrate any movement by the general public toward Coastal's checking account, Mecca said the nimble response was warranted in the competitive checking arena. "Checking is a cornerstone product. We know that a good, solid checking relationship leads to a broader relationship." Coastal's new Go Green product has been a major hit for Coastal. Members currently receive 1.01% annual percentage yield for a minimum of 12 debit transactions, and 2.51% for a minimum 30 transactions. The only qualifier: the rate is limited to the first $50,000 on deposit in the account. Other efforts in the wake of the BofA fees:
* Co-op Services CU, Livonia, Mich., launched a challenge to bank customers to go "ShredMyCard" and receive $105 to do so (MarketWire Oct. 6). Consumers can take their bank debit card to any Co-op Services location, open a free checking account with direct deposit, shred the old bank card, and receive $105. "There's a major difference here," said Anthony Carnarvon, president/CEO of the $401.5 million asset credit union. "The big banks will take your money for just having a checking account and debit card; we give you money." * CommunityAmerica CU, a $1.8 billion asset credit union in Kansas City, Mo., is seizing the opportunity to market itself with its Escape Your Bank promotion. Consumers fed up with their banks' fees can receive $75 for opening a new Free-ing Checking Account. "When you can have a Free-ing Checking account with no minimum balance, no monthly charges, free online bill pay and a free debit card, you'll start to see banks as pretty confining," said the credit union's website. "And no one likes confining." * Mission FCU, San Diego, announced Thursday it does not plan to charge monthly debit card fees (BusinessWire Oct. 6). "The credit union wants to reassure its 150,000+ members that these fees will not be heading to their pocket-books." "As a not-for-profit, member-owned community-based credit union, we answer to our members, not to shareholders or Wall Street," said Debra Schwartz, president/CEO of the $2.1 billion asset credit union. "One of the many benefits of credit unions is that we are able to pass those savings onto our members in the form of lower or no fees." * The Golden 1 CU, based in Sacramento, Calif., renewed its commitment to continue providing debit cards free. "Golden 1 is well known for providing value-oriented services such as free checking accounts and free debit cards," said Donna Bland, president/CEO. "Consumers who are affected by these new bank fees should recognize that they have a choice. They can choose to accept and pay these new fees, or they can send a message to their banks by taking action and moving to a financial institution such as Golden 1" with free services. Golden 1's Free Checking account has no minimum opening balance requirement and no monthly service charge. Accountholders receive a free debit card and have free use of online, mobile and text banking, and bill payment and online deposit services. * State Employees' CU, Raleigh, N.C., told WRAL.com (Oct. 6) it has seen an increase in new accounts in the past week, which could be a result of banks' new debit fees. "As a credit union, we are not in the business to make money. We are a not-for-profit cooperative," said Leigh Brady, SECU's senior vice president of education services. "Credit unions tend to be a better value for members…in terms of offering lower fees and better interest rates."

Consumer bankruptcies drop 10 in first nine months

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ALEXANDRIA, Va. (10/7/11)--U.S. consumer bankruptcy filings fell 10% during the first nine months of the year, according to the American Bankruptcy Institute (ABI), citing data from the National Bankruptcy Research Center. Credit unions saw fewer loan delinquencies and loan net chargeoffs through the first half of 2011, according to the Credit Union National Association (CUNA). Consumer filings totaled 1,044,722 nationwide during the first nine months of 2011, from the 1,165,172 filings during the same period a year ago. September consumer bankruptcies declined 17% nationwide from September 2010. The overall consumer filings total for September reached 108,517, down from the 130,329 filings recorded in September 2010. “The trend of declining filings has been consistent with consumers continuing to reign in their spending, household debt, and an overall pull back in consumer credit,” said ABI Executive Director Samuel J. Gerdano. “Total consumer filings for 2011 will be less than 2010.” The September filings also represented a 4% decrease from the August total of 113,432 bankruptcy filings, a slight change that could be the result of one less day in the month, ABI said. The percentage of chapter 13 bankruptcy filings for September was 30%, a 1% increase from August. Credit unions’ consumer loan delinquencies inched down as of June to 1.09% of total loan outstanding from 1.15% in March, according to CUNA’s U.S. Credit Union Profile. Also, credit unions’ consumer loan net chargeoffs decreased as of June to 1.25% of average loan dollars outstanding from 1.48% in March, CUNA said.

Tucker Carlson CUs do things the right way

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FREEPORT, Maine (10/7/11)--Political commentator Tucker Carlson had high praise for an audience of 120 credit union representatives at the Maine Credit Union League’s Legislative Forum Tuesday.
Click to view larger image Keynote speaker and political commentator Tucker Carlson said “the future is bright for credit unions” at the Maine Credit Union League’s Legislative Forum on Tuesday. From left, Jon Paradise, league governmental & public affairs manager; Carlson; John Murphy, league president/CEO; and Quincy Hentzel, league director of governmental affairs. (Photo provided by Maine Credit Union League)
“I hate dealing with banks and, the circumstances of the past three or four years have proven that credit unions do things the right away so I think the future is bright for credit unions,” Carlson said. Carlson was the keynote speaker at the forum. He spent the morning discussing the 2012 U.S. presidential elections, offering insight on the Republican field of candidates and President Barack Obama’s re-election prospects. “The power of an incumbent president is very difficult to beat,” Carlson said. “Everywhere the president goes gets attention, as does everything a p resident says. That is quite an obstacle to overcome. That being said, President Obama is vulnerable; however, the candidate most capable of beating the president in a general election may not be the nominee.” When asked about the country’s financial woes, Carlson said the nation’s biggest problem is that neither party is honest about Medicare. “Everyone loves Medicare, myself included, but we simply cannot afford it in its present form,” he said. That is a fact, and until we get to the heart of it, we will continue to struggle financially as a country.” In the afternoon, the forum featured two Maine political analysts, former state Sens. Ethan Strimling and Phil Harriman, who discussed the state legislature, Gov. Paul LePage, and the 2012 legislative elections. Buddy Gill, senior strategic communications and external relations advisor to National Credit Union Administration (NCUA) Board Chairman Debbie Matz, concluded the program with a regulatory update. Gill encouraged Maine credit unions “to let your voices be heard on rules, regulations and the operating environment. NCUA really does want to hear from you.” League President John Murphy noted that the forum “reinforces the interest and involvement level that Maine’s credit unions have in the political process.”

Enhance CUs investment portfolio--Online Discovery

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MADISON, Wis. (10/7/11)--Credit unions should set aside personal investment biases and change their investment style to use all investment tools allowed by their charters and investment policies to build a solid investment portfolio, credit union leaders at CUNA Mutual Group’s second annual, daylong Online Discovery Conference were told.
Click to view larger image MEMBERS Capital Advisors’ Jeremy Whitish, left, senior analyst-investment risk, and Ed Meier, director and senior fixed-income portfolio manager, spoke at CUNA Mutual Group’s Online Discovery Conference Tuesday. (Photo provided by CUNA Mutual Group)
Online Discovery is CUNA Mutual Group’s Web-based equivalent of a face-to-face conference. The free event attracted an international audience of more than 1,800 credit union and league staff. Ed Meier, director and senior fixed-income portfolio manager, and Jeremy Whitish, senior analyst-investment risk, both with MEMBERS Capital Advisors, gave attendees a history lesson to understand the change in investment strategy over the years. “Many of us have personal investment biases that need to be justified in today’s economic environment,” Meier said. “For example, in the early 1990s many investors swore off investing in CMOs (collateralized mortgage obligations). While that may have made sense at the time, it doesn’t today. CMOs are typically underutilized,” Meier added. Today, investors must consider all of their options and quantify their risks. “You have to ask yourself the question: ‘How does this optimize my credit union’s portfolio?’ If it doesn’t, then move on,” Meier said. This can be a challenge, especially for investors with a conservative investment style, but the gain to the credit union’s bottom-line can be substantial. Meier and Whitish urged credit union leaders to consider their credit union’s funding needs, asset liability management (ALM) model output and economic outlook before ruling out a particular type of investment. “Just because an executive investment manager doesn’t like a particular investment doesn’t mean it isn’t a good investment for the credit union,” Whitish said. Credit union leaders need to think about their investment strategy differently today than they did 20 years ago. Most portfolios are excessively short in duration, Meier said. Credit unions must build in cornerstone securities, which have a potential for a higher yield and longer duration but maintain top-tier quality. “It’s critical for investors to understand their credit union’s ALM model because if you don’t have loans on your books, then you must have investments that match or reach longer term than your liability stream,” Meier said. “We propose having a core group of cornerstone investments in your portfolio--no matter if it’s good times or bad times, rising rates or lower rates--because it acts as a hedge that you can rely on despite the times or rates,” Meier added. To achieve a balanced approach to investing, credit union leaders should reduce their liquidity and invest in slightly longer-term securities to protect against economic uncertainties and adopt a flexible investment style that limits personal investment biases, said Meier and Whitish. “The best way to build a strong investment portfolio is to use all of the investment tools your credit union’s charter and investment policy allow,” Whitish said. “If you don’t, you will continue to struggle to build a solid investment portfolio for your credit union.”

Speaker Risk inherent to all CUs--big and small

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MADISON, Wis. (10/6/11)--The future sustainability of small credit unions in today’s challenging economic environment will require improved decision-making strategies, proficient and proactive risk assessment, and more efficient operational execution, a CUNA Mutual Group risk manager told Online Discovery Conference attendees Tuesday. Online Discovery is CUNA Mutual Group’s free Web-based conference. The one-day event attracted a national and international audience of more than 1,800 credit union and league staff. Risk can be managed effectively in all credit unions, and smaller ones are not necessarily at a disadvantage, said Joette Colletts, regional manager of credit union protection risk management. “In fact, smaller credit unions have several advantages in managing risk,” Colletts said. “With fewer employees and close relationships, their culture readily promotes open communication and a willingness to share suggestions. This agile atmosphere lends itself well to reviewing, re-evaluating and upgrading planning to promote a healthy risk culture.” Credit unions must assume some risk to innovate and grow. That means having a culture that aligns risk with goals and properly managing the process to optimize return, she said. “Too little risk taking hinders innovation, which can threaten a credit union’s survival, while too much risk taking can be just as crippling by uncontrollably expending resources, leading to losses,” she added. Colletts focused on two challenges facing credit unions: employee dishonesty and vendor fraud. “The common denominator in my 27 years as a risk manager has been that the credit union either lacked the controls to help prevent the fraud from occurring in the first place, or became more relaxed about its controls over time,” Colletts said. “If you think you don’t need to implement controls or tighten existing controls, please think again. I assure you, you’re providing the ideal environment for a dishonest employee.” Among the best practices for thwarting employee fraud:
* Implementing dual control for currency shipments and cash replenishments; * Controlling access to data, information, checks and cash; * Maintaining an active supervisory committee; * Conducting surprise audits, and * Performing bondability verification and background checks.
Third-party vendors play an increasingly important role in helping credit unions compete and expand member services. While outsourcing generally creates member value and improves the bottom line, it can create significant risk if due diligence is improperly performed when selecting and managing vendor relationships, Colletts noted. Understand a third-party’s organization, business model, financial health and program risks, she added. “Remember due diligence never stops. It’s an ongoing process,” she said. Colletts recommended implementing an enterprise risk management (ERM) program to improve strategic decision making and risk communication. “ERM integrates risk management with strategic planning and is a systematic approach to managing all your credit union’s key risks,” she said. ERM can be implemented in any size credit union and can be scaled down if needed and implemented in incremental steps.

No INews NowI on Monday--federal holiday

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WASHINGTON and MADISON, Wis. (10/7/11)--Although Monday is a federal holiday, with many credit unions, leagues and government offices closed, the Credit Union National Association's Washington, D.C., and Madison, Wis., offices will remain open for business. News Now will not publish an issue Monday, but will resume its regular publication schedule on Tuesday.

CU System briefs (10/05/2011)

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* MOUNTLAKE TERRACE, Wash. (10/6/11)--A former Washington State credit union-turned-bank plans to raise up to 432 million in an initial public offering, reported American Banker (Oct. 3). 1st Security Bank, the former Washington CU, based in Mountlake Terrace, Wash., converted charters in 2004. Its new holding company will be known as FS Bancorp. The bank has been under supervisory agreements until recently, said the Banker, and had reduced its branches to six. It had 14 branches as a credit union. In 2009 it streamlined its operations to restore profitability, said the publication … * DUBUQUE, Iowa (10/6/11)--After 47 years of service, Dupaco Community CU President/CEO Bob Hoefer will retire, effective Feb. 12. He will be succeeded by Joe Hearn, Dupaco's chief operating officer. Hoefer joined the then-$3.4 million asset Dupaco Employees CU in 1964. At that time it served employees of Dubuque Packing Co., had one branch and served 4,600 members. Today, the $955 million asset credit union serves 63,000 members from 12 offices. Hoefer is an honorary director and past board chair of the Iowa Credit Union League. He served on the Credit Union National Association's (CUNA) Renaissance Commission and was a member of its Governmental Affairs Committee for more than 20 years. He also was active in the Credit Union Executives Society, National Association of State Credit Union Supervisors, Filene Research Institute. Hearn joined the credit union as director of marketing in 1986. He became chief operating officer in 2008 and then executive vice president. He is serving his second term as league chairman and is a member of CUNA's state credit union subcommittee. Hearn was inducted into the CUNA Marketing and Business Development Council Hall of Fame in 2010 … * OTTUMWA, Iowa (10/6/11)--Community 1st CU's Board of Directors has appointed Philip Van Mersbergen as president/CEO, effective immediately, the board announced Wednesday. Van Mersbergen joined the $356 million asset, Ottumwa, Iowa-based credit union's team in 2008 as chief financial officer. His duties included being instrumental in a credit union merger, the opening of two new branches and generating asset growth of more than $90 million. His career in financial services began in 1996 at MidWest One Bank, where he held several positions …

ITodayI blog CUs provide ATM convenience via CO-OP Network

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NEW YORK (10/6/11)--A blog by NBC Today financial editor and author Jean Chatzky clarifies a point about credit unions and ATM convenience she made on a bank fee segment aired Tuesday morning when she noted that credit unions provide an alternative to a large national bank for financial services. In the segment aired, Chatzky said credit unions offer lower fees but lacked an extensive ATM network so consumers might end up paying surcharges. However, readers pointed out to her that credit unions do indeed have an extensive ATM network: the CO-OP Network, she said in her blog later. "There exists something called the CO-OP Network, which includes over 3,000 participating credit unions," Chatzky wrote. "Through this network, there are 28,000 ATMs that offer surcharge-free access to accounts for all participating credit union members." She also noted that credit unions often have shared branching arrangements. At CO-OP Network "members of participating credit unions can go to any of the 4,400 participating branches across the U.S. and use that branch as if it was their own." The blog also included CO-OP's ATM locator link and a link to shared branches. Chatzky is author of "Not Your Parents' Money Book: Making, Saving, and Spending Your Own Money" and has been a guest on the Credit Union National Association's weekly Home and Family Finance Radio show.

Cheney to IWash. PostI aSmarterChoice traffic up as banks hike fees

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WASHINGTON (10/6/11)--As if someone woke up a sleeping giant, the media, members of Congress and consumers have caught on to the value of credit unions during the debit card fee debate. Credit Union National Association (CUNA) President/CEO Bill Cheney told the Washington Post Tuesday that traffic on its consumer website, aSmarterchoice.org, has jumped eightfold since the news broke that Bank of America would charge a $5 a month debit card fee. "Our point is, if you're upset, you should do something about it," Cheney told the Post. Earlier this week Cheney invited upset bank customers to join a credit union where fees are lower and service is better (News Now Oct. 5). Banks such as BoA, Wells Fargo and Chase plan to charge or are testing new fees to recoup losses they say they will encounter from lost interchange income regulated by the Dodd Frank Act. The public outcry against the fees has prompted response from congressional delegates and the Obama administration, said the Post. U.S. Rep. Brad Miller (D-N.C.) introduced a bill to make it easier to switch accounts and to prohibit banks from assessing fees for the process, and Sen. Richard J. Durbin (D-Ill.), the author of the Dodd Frank amendment that mandates a cap on interchange fees, called for credit unions and community banks to "seize this competitive opportunity" to woo consumers. President Barack Obama also criticized the fee hikes as a way for banks to pad their profits at the expense of consumers, said the Post. Credit unions, the leagues and CUNA are taking full advantage of the opportunity to educate consumers on membership's benefits through mass media, and credit unions are promoting their no-fee and low-fee services. (See related story "CUs, leagues reach out with no-fee promos" in today's System section of News Now.) The news has prompted media reports across the nation about consumers, angry with the escalating bank fees, seeking alternative financial services solutions. Many of them mention switching to credit unions as a key option. Case in point: Tuesday's nationwide newspaper, USA Today, featured an article, "Debit card fees are coming: How to avoid them," with a subhead, "Banks ding shoppers for purchases after law limits transaction fees." In the article, Sandra Block' outlined three ways to avoid debit card fees (pay with cash, pay with credit and switch banks), and wrote: "Small banks and credit unions have historically offered lower fees than the big banks, and that's likely to continue. The law mandating the reduction in debit card fees exempted banks and credit unions with assets of less than $10 billion. Many credit unions allow consumers to open an account for as little as $5." Other media outlets, such as The Oregonian, have "localized" the story, canvassing local credit unions and banks on whether they plan to adopt fees. Credit unions have no plans do adopt fees, according to most of the articles.

CEOs letter on tax status outlines benefits of CUs

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ROCHESTER, Minn. (10/6/11)--A letter to the editor of Minnesota's PostBulletin.com on Wednesday from a credit union CEO outlines the benefits of credit unions while disputing bankers' attacks against credit unions' tax status. Kelly McDonough, president/CEO of $115 million asset First Alliance CU, Rochester, Minn., wrote the letter in response to another letter published on Sept. 28. "I want to clarify that credit unions are member-owned, not-for-profit financial cooperatives," McDonough wrote, adding that although credit unions are tax exempt, they pay payroll and unemployment taxes and property taxes. "Any benefits credit unions receive from their tax-exempt status are passed onto those they serve in the form of dividends. Our member-owners pay income tax on those earnings,"the letter said. "The substantial savings Minnesota credit unions provide to consumers far outweigh any revenue that would be raised by taxing credit unions," McDonough wrote. "It is estimated that each year Minnesota credit unions provide $125 million in direct financial benefits to the state's 1.5 million credit union members. These benefits are given in the form of fewer fees, lower rates on loans and higher savings rates, which translate into saving the average member $86 a year and the average member household $163 a year. "Credit unions look out for the best interests of people like nurses, teachers, firefighters and even your next-door neighbor. Furthermore, when hard times hit, we stand with our members and extend credit when others won't," McDonough concluded. Use the link to access the full letter.

Massachusetts Maxwell Herring award winners announced

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MARLBOROUGH, Mass. (10/6/11)--The Massachusetts Credit Union League announced state-level winning entries for the Dora Maxwell Social Responsibility Community Service Award and the Louise Herring Award for Philosophy-in-Action Service Award (The Massachusetts league’s Values & Visions Sept. 20). Two credit unions were presented first-place Maxwell awards:
* Crescent CU, Brockton, $200 million to $500 million in assets, for strengthening its partnership with the Old Colony YMCA in Brockton; and * Workers’ CU, Fitchburg, $500 million to $1 billion, for expanding financial support and increasing participation in its support of the American Cancer Society’s Greater Gardner Relay for Life event.
Hanscom FCU, Hanscom AFB, Mass., $500 million to $1 billion in assets, received a first-place Herring award for its commitment to green lending, creating a benefit to members while contributing to global environmental conservation efforts. The award winners will move to the national level competition presented by the Credit Union National Association.

Song video celebrate ICU Day CUs cooperative nature

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MADISON, Wis. (10/6/11)--The credit union music duo, The Disclosures, have released a free song and music video for International Credit Union (ICU) Day on Oct. 20. The song, “Building a Better World,” pays homage to this year’s ICU Day celebration theme. Credit unions can use the song and video to raise awareness of the positive impact credit unions continue to make worldwide. “Our music has always focused on finding new ways to package the credit union message,” said Disclosures band member Chad Helminak. “With ‘Building a Better World,’ we decided to take it one step further and invite credit union folks to have some fun and help demonstrate our cooperative nature.” The Disclosures put out a casting call to credit unions to provide video clips, which would eventually become the entirety of the music video. The band also filmed credit union people singing song segments. More than 40 credit unions and supporting organizations make cameos in the video. The cameos include credit union staff lip-synching lyrics, performing air-guitar with hockey sticks and even dancing with mascots. “Credit unions’ personability usually shines through their member and community service, but now you can see it also holds true for music videos,” said Disclosure member Christopher Morris. The song, free to download, and lyrics can found on The Disclosures website. Use the link to view the YouTube video. Credit unions can distribute and share the video on their websites and in other online communications. As part of the video collection process, the Disclosures also randomly selected a video submission to receive a signed copy of their compact disc “(Hey, We’re) The Dislcosures.” The winner was Doug MacMillan from State Employees’ CU, Raleigh, N.C.

Speaker Growth opportunities closer than most CUs believe

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MADISON, Wis. (10/6/11)--Credit union leaders don’t need to look any further than their current business when exploring growth opportunities, a CUNA Mutual representative told an Online Discovery audience Tuesday.
CUNA Mutual Group employees were kept busy Tuesday in their virtual booths within the Discovery Expo Center during the company's second annual Online Discovery Conference. The daylong virtual conference attracted more than 1,800 credit union professionals. The event featured 13 speakers, the Expo Center exhibit hall and a variety of chat rooms. (Photo provided by CUNA Mutual Group)
Online Discovery is CUNA Mutual Group’s free Web-based conference. The event attracted a national and international audience of more than 1,800 credit union and league staff. Eric Hansing, director, product marketing and MemberCONNECT for CUNA Mutual, said working on the little things that optimize its results is a factor that often determines success for a credit union. “We all are engaged in things we can do significantly better,” Hansing said. “Too often, we chase new initiatives that we think will offer us growth. We shouldn’t lose sight of making the most of what we’re already doing by optimizing those opportunities.” Whether it’s loan growth, cross sales or productivity, Hansing said, credit unions should look at new ways to make the most of something they’re already doing. He suggested they start by “clarifying the win.” “What’s your specific goal? In the case of member relationships, it’s important to know your customers and know where you currently stand,” he said. “Also, make sure your people see how it matters so they can be better focused--and become motivated.” A credit union must identify critical components of success and be very clear about the end game, or target, Hansing said. That requires knowing the business and the levers that must be pulled to capture opportunities. “It’s about targeting customers and knowing what they want from you. Here’s where you might consider research,” he added. A critical component of a business achieving its target goal is to continuously improve by being very good at the fundamentals, Hansing said. He urged conference attendees not to underestimate the power of sound fundamentals. “Whether it’s sports or a business, the good teams excel at the fundamentals,” he said. “They are a critical success factor that dramatically improves performance.” Continuous improvement also requires measuring internal capabilities and diagnosing limitations. Sustaining momentum in reaching a goal takes work, he added. Developing action plans. “You need to look for bright spots and things you are doing well and clone them,” Hansing said. “Brainstorming is another important step in maintaining your improvement level.” He recommended credit unions brainstorm with outsiders--their peers, business partners and non-members--and find out what competitors are doing that they aren’t. “As you start to apply this framework, you’ll notice there is a surprising amount of growth potential right under your noses. And these principles do work,” he said.

CU offers credit line for bankrupt Philly orchestra

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MAUMEE, Ohio (10/6/11)--Sun FCU in Maumee, Ohio, has agreed to finance a business line of credit for the Philadelphia Orchestra, one of its sponsor groups. The orchestra will use the $3.1 million debtor-in-possession loan for operating expenses as it works to reorganize and emerge from Chapter 11 bankruptcy filed in April. Sun FCU has offices in Toledo, Ohio, and Philadelphia. Unlike other bankruptcies, the orchestra has no creditors, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Oct. 5). The orchestra said it intends to use Chapter 11 to gain relief from pension obligations, secure a new lease with the Kimmel Center where it performs, and structure a new union contract with musicians. Collateral for the loan will include fine instruments owned by the orchestra, contents of the orchestra’s musical library, real property and other business assets. “Understanding the unique needs of the Philadelphia Orchestra as an employer to many of our members is essential in carrying out our mission of caring service at Sun Federal,” Dale Frankhouse, Sun Federal director of business services, told PCUA. “It is our privilege to partner with the orchestra to help ensure its long-term sustainability as a valued part of the Philadelphia community and culture, and its enduring prominence in the world of music.” The $401.9 million asset Sun FCU has been serving members of the Philadelphia Orchestra since 2003 when the Philadelphia Orchestra FCU merged with Sun FCU. Sun FCU served the needs of orchestra musicians and employees long before it entered discussions with the orchestra’s management about a possible business line of credit, PCUA said. The credit union’s product offering includes a business loan tailored to the needs of professional musicians. The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions’ MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity for credit unions to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

Economic woes affect retirements--Online Discovery

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MADISON, Wis. (10/6/11)--While still less than 50/50, the chances of a return to recession have grown substantially in 2011, affecting how people plan for their retirement, a CUNA Mutual Group retirement expert told Online Discovery Conference attendees Tuesday.
Scott Knapp (left), director, investment strategy for CUNA Mutual Group, told Online Discovery Conference attendees the economy is still struggling because of the type of recession we are recovering from: a debt deflation spiral similar to the Great Depression. (Photo provided by CUNA Mutual Group).
The economy is still struggling because of the type of recession the nation is recovering from: a debt deflation spiral similar to the Great Depression, Scott Knapp, director, investment strategy for CUNA Mutual Group, told conference attendees. “This happens when public and private debt reaches a bubble level,” Knapp said. “Then credit gets choked off in the financial system and that leads to a credit crisis and a rapidly slowing economy … this is by far the worst category of recession and it is the hardest to exit.” The only remedy for a debt deflation spiral is time, so the country’s patience will be tested for an extended period as excess debt gets paid down. The Federal Reserve believes recovery will be slow as indicated by its warning that interest rates will be kept low until 2013. “Translation: Don’t expect any meaningful growth for the next two years,” Knapp said. As price inflation outstrips wages, consumers are falling backward. Corporate profits, however, are excellent. Balance sheets and profitability in the corporate sector are strong, which is good for everyone because it supports the overall economy, Knapp added. In addition to the current state of the economy, demographics, a possible extended period of below-average investment returns, and structural changes in the economy are leading many to re-evaluate retirement planning. Nearly four in 10 workers said they will retire after age 70 or just keep working, and in 2008, at the height of the tension, only 20% of current retirees felt very confident about their retirement security, according to a 2008 Employee Benefit Research Institute survey. “The U.S. doesn’t lack a willingness to provide for baby boomers in retirement, but it doesn’t have capacity to live up to all the promises that have already been made,” Knapp said. “As a result, benefits are currently funded through issuance of debt, and that’s not sustainable. Having modest expectations about the government’s role in providing retirement security is prudent. Those preparing for retirement must take full control of their future circumstances.” Total lifecycle planning and outcome-based strategies are taking the lead in preparing for retirement. “Having enough assets accumulated at retirement is not enough,” Knapp said. “Pension-like benefits must be also available during the post-retirement income phase, even from 401(k) plans. The industry needs to innovate in the post-crisis era, and achievement of retirement security must become less dependent on investment returns.”

FirstCorp CEO resigns Harden named interim CEO

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PHOENIX (10/6/11)--Pete Pritts, president/CEO of First Corporate CU, has submitted his resignation, effective immediately. He has worked with credit unions for 24 years. Greg Harden, FirstCorp executive vice president/chief investment officer, has been named interim president/CEO, the corporate credit union said in a release. Harden has been with FirstCorp for 22 years. His responsibilities include investment, lending, credit risk and balance sheet management. “I am taking this action, after lengthy consideration, so both the credit unions and I can move forward,” Pritts wrote in his resignation letter. “I am leaving a well-capitalized FirstCorp in compliance with Part 704 of the Corporate Regulation and a sound 6% leverage ratio,” he added. “It is my belief that FirstCorp is the most solid corporate credit union in the West and is well positioned to thrive as part of a solution for credit unions.” "Pete’s leadership has navigated us through these critical times of revised regulation and new capitalization standards,” said David Doss, FirstCorp’s board chairman. “His efforts have resulted in strong financial and operational performance for FirstCorp. Doss said the board will explore a range of options as it searches for Pitts’ replacement. “We have strong and experienced leaders in Greg Harden and Stacy Glidden, our chief operating officer, who continue to drive our funds management and payment systems businesses respectively,” Doss said.

Alloya Corporate organizes selects officers

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WARRENVILLE, Ill. (10/5/11)--The newly chartered Alloya Corporate FCU held its first organizational meeting Thursday and Friday and selected its first officers. Elected were:
* Chairman, Amy Sink, senior vice president and chief financial officer of Teachers CU, South Bend, Ind.; * Vice chairman: John Fiore, president/CEO of Motorola Employees CU, Schaumburg, Ill.; * Treasurer, Leanne McGuinness, The Summit FCU, Rochester, N.Y.; and * Secretary, Curt Cecala, CEO, TCT FCU, Ballston Spa, N.Y.
Sink was vice chairman and Fiore was chairman of the corporate's Charter Advisory Group. A federal interlock regulation prevents Fiore from serving chairman while he is currently a director on the board of the Illinois Credit Union League, Fiore told News Now. The group will act as the interim board as the Warrenville, Ill.-based corporate begins operating on Oct. 24 and transfers operations from the Members United Bridge FCU. The interim group will serve until open elections can be held next June, Fiore said. It will determine governance issues such as how many board members to elect, and it already is searching for a CEO, he added. The corporate, which has offices in Albany, N.Y. will conduct its second board meeting on Oct. 27 in Albany so it can interact face-to-face with employees there and congratulate them. "Both groups' livelihoods were at stake [before approval of the charter] but all our management, staff, board and credit unions are working together" to make the corporate succeed, he said. "We're waiting to see what will happen out West with Western Bridge Corporate and whether there may be an opportunity for us there, and if we'll play a role," he told News Now. Other members of the interim board include (this is a corrected list from an earlier version):
* Lynne Kothe, president/CEO, North Memorial FCU, Minn.; * Floyd Rummel III, president/CEO, Dakota Territory FCU, Deadwood, S.D.; and * David Suvall, president/CEO, Rhode Island CU, Providence, R.I.
Alloya Corporate received approval on Sept. 22 from the National Credit Union Administration to form a new charter and merge the Members United Bridge operations into the new corporate (News Now Sept. 26). Alloya extended the period of its initial capital offering until Oct. 31. It was required to generate a minimum of $70 million in contributed capital as of Aug. 31 and had raised $71 million by that date (News Now Sept. 1). Members United Bridge is the bridge corporate entity that assumed the existing business of the Members United Corporate FCU after it was placed into conservatorship by NCUA, which formed the bridge corporate in early October 2010 (News Now Sept. 1).

Court Huron River real-estate lawsuit to proceed

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FORT MYERS, Fla. (10/5/11)--A federal court in Fort Myers, Fla., has denied a motion for summary judgment by the National Credit Union Administration (NCUA) to dismiss claims of at least 27 borrowers from nine states who invested in real estate in southwest Florida and whose loans were held by the now-defunct Michigan-based Huron River Area CU. The ruling, filed Friday in the U.S. District Court, Middle District of Florida, Fort Myers division, means the case, which stems from real estate investors' claims that they were victims of a get-rich-scheme, will proceed. Oral arguments were held Aug. 22 on the matter. NCUA, as liquidating agent for the credit union, had begun foreclosure proceedings on mortgages made by the borrowers, who invested in the undeveloped Cape Coral and Lehigh Acres projects in Florida, which went bust when the real estate market bottomed out. NCUA argued that the borrowers' claims are barred under the D'Oench Doctrine, in which federal common law and the Federal Credit Union Act bar certain lawsuits and recoveries related to the declining value of housings. Earlier the court had considered 29 arguments made by the borrowers and rejected those as being barred by the D'Oench Doctrine. In Friday's ruling, U.S. District Judge Charlene Edwards Honeywell indicated that the group of borrowers had raised seven new valid arguments about the credit union's relationship with Construction Loan Co. and Whitney Education Group, which conducts real estate investment seminars under the name "Millionaire University." Several of those arguments are not barred and four of the defenses "present genuine issues of material fact," said the ruling. In defending against the summary motion, the borrowers noted they are not asserting to a right to payment but merely are asserting to defeat NCUA's foreclosure action. They are suing for breach of contract and violation of the credit union's fiduciary duty, NCUA assumed control of the $360 million asset credit union in February 2007 and liquidated on Nov. 18, 2007. The credit union's member accounts were purchased by Detroit Edison CU of Detroit (News Now Dec. 2, 2007). The credit union is one of three credit unions--the others being Fort Collins, Colo.-based Norlarco CU and Denver-based New Horizons Community FCU--that provided the mortgage construction loans (News Now Sept. 16, 2009).

Two Michigan CUs to merge

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MONROE, Mich. (10/5/11)--St. Patrick CU, with $1.9 million in assets, Carleton, Mich., has closed and merged operations with $148 million asset Monroe County Community CU, Monroe, Mich. The two credit unions are merging under a joint operations agreement, according to Mike Newman, president/CEO of Monroe County Community CU, (The Monroe Evening News Oct. 1). The agreement has been approved by the National Credit Union Administration and the state regulator. St. Patrick’s had found it difficult to provide services to its members due to current economic conditions beyond its control, Newman said. St. Patrick’s, with 700 members, primarily served the parish of St. Patrick’s Catholic Church and Grade School in Carleton. Its last day of operations was Friday.

Streamline financial life CUNA expert tells IFox BusinessI

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MADISON, Wis. (10/5/11)--Readers of FoxBusiness.com received tips Monday from a Credit Union National Association (CUNA) personal finance expert on how to start their personal "fiscal year" in good shape. Monday's article, "Five Fixes for Your Own Fiscal Year," featured as one of its fixes the advice of Susan Tiffany, director of consumer periodicals at CUNA. Tiffany suggested that to streamline financial life, "Automate. Take the 'I'll get around to it' out of your financial vocabulary." Tiffany told readers that can mean direct deposit for a paycheck and a corresponding transfer to a saving s account. For bills that don't vary, such as mortgage or cable bills, consider automated online payments through a credit union or bank, she said. "It just frees you up so much," she said. Consumers can even set up recurring payments to cover minimums on credit card bills to avoid late fees. "You may always, at any time, make additional payments, but you'll never have a lost or late payment." For the rest of the tips and the full article, use the link.

Online Discovery speaker Make mortgage loan opportunities

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MADISON, Wis. (10/5/11)--Credit unions must create their own opportunities in the midst of a difficult mortgage lending environment, a CMG Mortgage Insurance Company (CMG MI) regional sales director, told an Online Discovery audience Tuesday. Online Discovery is CUNA Mutual Group’s free Web-based conference. The event attracted a national and international audience of more than 1,800 credit union and league staff. Mortgage lending is key to keeping members from defecting to banks over the long run, said Ira Oskowsky, who heads CMG MI’s eastern sales division. “When credit unions don’t offer mortgages, a bank can move in quickly to persuade members to transfer all their business,” Oskowsky said. “And if the credit union does offer mortgages, it needs to do it competitively, not just with pricing, but with products, ease of use, and by building a relationship with your local real estate agents. Credit unions’ share of the mortgage market had climbed to 10% but recently dropped back down to about 3%, according the American Credit Union Mortgage Association. “How can we climb back up? By making our own opportunities and not just relying passively on member loyalty to see us through,” Oskowksy said. Among the best practices Oskowsky recommended in the session:
* Put real estate lending at the center of the credit union’s strategy; * Create a team of loan officers to proactively approach members and real estate agents; * Expand product mix to include more first-time homebuyer programs, specialty products and portfolio options; * Think about how consumers shop for mortgages and homes, and adjust credit union schedules to include weekend hours and online mortgage applications; * Initiate new relationships--or enhance existing ones--with mortgage aggregators; and * Step up and accept the role of home finance expert in advise members.
Oskowsky asked if mortgage lending is a good option for credit unions in the current housing market. Mortgage loans will always have some of the highest margins compared to other investments, he said. “As for risk, if you mitigate it effectively, then mortgages actually represent the lowest risk of any investment,” he added. “Develop your strategy carefully, but recognize that mortgage lending, handled wisely, can be the best way to replenish liquidity, improve member relationships and win business away from banks. Becoming full-service credit unions is the future for our industry.” Watch for more coverage of the Online Discovery sessions in Thursday’s News Now. Also, see related story, "Data breaches now No. 1 fraud type--CUNA Mutual," in today's System News.

Data breaches now No. 1 fraud type--CUNA Mutual

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MADISON, Wis. (10/5/11)--Data breaches have taken over theft of physical assets as the No. 1 fraud type, with most data theft occurring in the financial services industry. To avoid crippling financial damage and loss of member trust, credit unions must implement measures to prevent breaches and have a solid mitigation plan if one occurs, said CUNA Mutual Group.
Click to view larger image Ken Otsuka, CUNA Mutual Group senior risk consultant, offered tips to credit unions to avoid financial, reputational and legal risks from the No. 1 type of fraud--data breaches--during Tuesday's Online Discovery Conference. (Photo provided by CUNA Mutual Group)
Speaking to Online Discovery attendees Tuesday, CUNA Mutual Senior Risk Consultant Ken Otsuka cited the 2010 Annual Global Fraud Report from Kroll, a risk management consulting firm. The information-rich financial services industry leads in data theft incidents among various companies, with 42% in 2010. That's an increase of 24% from 2009, the report indicated "Data breaches have quickly become a top concern," Otsuka said. "They are increasing in frequency and severity in terms of number of records breached and recovery costs." Breaches can involve electronic or paper data, and occur through many ways, including:
* Lost or stolen disks, laptops and other data-bearing devices; * Dishonest employees; * System intrusions by hackers; * Negligent disposal of data; and * Breaches at third-party vendors housing confidential personal member data.
A data breach can be devastating for a credit union, potentially even bankrupting it, Otsuka said. According to a 2010 Ponemon Institute study, the average cost to repair a compromised record was $214. For financial institutions, that cost was $353. But that's not the only cost of breaches. "A breach could shake members' confidence in the credit union's ability to protect their personal information, which could have a devastating effect on the credit union's reputation," Otsuka added. He also noted compliance and legal risks. "The federal Gramm-Leach-Bliley Act requires credit unions to protect and secure members' personal information. Penalties for non-compliance, whether at the state or federal level, can be severe. In addition, numerous well-publicized lawsuits have been brought by consumers against organizations that experienced data breaches." Otsuka urged attendees to implement proper technology, policies and procedures to protect confidential member data. He offered these tips:
* Protect confidential member data residing anywhere on the network, including workstation hard drives and servers. Encrypt data residing on networks, all mobile devices, and in data transmissions over the Internet and e-mail. * Install a data loss prevention solution to identify where confidential member data are located on the network and determine if employees inappropriately transmit data via e-mail or downloading data to external devices. * Lock down USB ports and CD ROM/DVD drives of workstation computers, based on employee job duties, to prevent downloading of confidential member data. * Implement an identity and access management solution that allows only authorized users to access the network and secures remote access for employees and vendors. * Have an end-point security solution to protect all entry points to the network, including firewalls, and software for viruses, malware and intrusion detection. * Protect corporate mobile devices by ensuring confidential member data are stored in encrypted
If all else fails, have an insurance backstop, Otsuka said. He provided an overview of CUNA Mutual Group's Cyber & Security Incident Package, which provides coverage for credit unions if there's a breach. Online Discovery is CUNA Mutual's Web-based virtual conference. The free event attracted more than 1,800 attendees. Watch for more coverage in Thursday's News Now. See related story, "Online Discovery speaker: Make mortgage loan opportunities," in today's System News.

MBL helps Jersey vet open chiropractic office

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BRIDGEWATER, N.J. (10/5/11)--Financial Resources FCU, Bridgewater, N.J., recently helped a veteran re-establish himself with its first Patriot Express loan, as part of the Small Business Administration’s (SBA) Patriot Express Pilot Loan Initiative program.
In closing its first Small Business Association Patriot Express loan, Financial Resources FCU, Bridgewater, N.J. helped Navy veteran Dr. Michael Eosso open a chiropractic office. From left, Marc Sovelove, senior vice president of lending for Financial Resources FCU congratulates Eosso, owner of Back in Health Chiropractic, Branchburg, N.J. (Photo provided by New Jersey Credit Union League)
Dr. Michael Eosso, a veteran of the U.S. Navy, will use his loan to start up a chiropractic office in Branchburg, N.J. told the New Jersey Credit Union League (The Daily Exchange Oct. 4) The program was created by the SBA to help veterans and members of the military community establish or expand small businesses. “This loan has allowed me to get office space and purchase necessary equipment,” Eosso said. “For that, I am grateful.” Marc S. Sovelove, senior vice president of lending at Financial Resources FCU and his member business lending team worked to make the Patriot Express lending process as accessible as possible to Eosso. “We look forward to making many more loans of this kind,” Sovelove told the league. Patriot Express loans can be used for start-up costs, equipment purchases, business-occupied real-estate purchases, working capital, expansion and more. Typically, Patriot Express loans feature the SBA’s lowest interest rates for business loans, generally 2.25% to 4.75% over prime, depending upon the size and maturity of the loan, said the league. The Credit Union National Association and credit unions are urging Congress to increase credit unions’ member business lending cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity for credit unions to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

Alabama CUs earnings total 68.3M in 2Q

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BIRMINGHAM, Ala. (10/5/11)--Alabama credit unions increased earnings 60% during the second quarter from the same period a year ago, according to National Credit Union Administration data. Aggregated net income for the credit unions was $68.3 million for the quarter ending June 30, compared with $42.6 million in the second quarter of 2010, (Birmingham Business Journal Sept. 30). The earnings increase was primarily attributable to credit unions putting aside less money for bad loans, according to Patrick La Pine, president and CEO of the League of Southeastern Credit Unions. Credit unions used the same strategy in the first quarter, La Pine said. Loan delinquencies for all loan types totaled $88.2 million in the second quarter, an 8.5% decrease from the $93.4 million reported in 2010. Net charge-offs dropped 24% to $24.5 million. APCO Employees CU reported $8.5 million in net income for the second quarter, a 49% improvement from the $5.7 million the second quarter of 2010. APCO Employees CEO Merrill Mann told the publication the credit union reserved less money to cover bad loans, but cost-controlling measures was the biggest reason for the earnings improvement. With about 90 employees and more than $2 billion in assets, APCO Employee CU operates very efficiently for its size, Mann said.

N.J. CUs ranked in top 50 in banking by iNJBIZi

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HIGHTSTOWN, N.J. (10/5/11)--New Jersey’s credit unions are well represented on NJBIZ magazine’s first Power 50 Banking list. The list was largely shaped by the battle over municipal deposits, which NJBIZ cited as the state’s biggest banking story of the year, said the New Jersey Credit Union League (NJCUL) (The Daily Exchange Oct. 4). “There was no bigger story in banking this year than the fight over municipal deposits,” the article said. “Once the sole domain of banks, legislation that the governor signed earlier this year has now opened this lucrative realm to credit unions, marking a big victory for them and a setback for bankers.” The bi-partisan municipal deposit reform legislation, signed into law on Aug. 18, allows credit unions to become eligible depositories for counties, municipalities and school boards (News Now Sept. 22). Among the credit union representatives on NJBIZ’s Power 50 Banking list:
* Paul Gentile, league president/CEO. Gentile was instrumental in garnering support among the league’s member credit unions, NJBIZ said. * Ray Del Nero, president/CEO of Merck Employees FCU, Rahway, and NJCUL board member. Merck had $1.65 billion in assets on June 30, an increase of more than 10% from the previous year. * Andrew L. Jaeger, president/CEO of Credit Union of New Jersey (CUNJ), Ewing, N.J., the state’s largest state-chartered credit union. With the potential influx of deposits after the municipal deposit legislation, CUNJ “can become even bigger,” NJBIZ said. * John Fenton, president/CEO Affinity FCU. Affinity, the largest credit union in New Jersey, is another beneficiary of the municipal deposit legislation, according to NJBIZ. With about $2 billion in assets as of June 30, Affinity saw 3.6% growth over last year.

CU System briefs (10/04/2011)

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* HARRISBURG, Pa. (10/5/11)--The Reading (Pa.) Museum has a new Moneyville Exhibit that includes a credit union where up and coming tellers can practice their cash-handling skills, said the Pennsylvania Credit Union Association (Life is a Highway Oct. 4). Each part of the exhibit, which kicked off Friday, has a hands-on component geared toward enhancing math skills and promoting financial literacy in a fun environment. The exhibit is sponsored by CTCE FCU, which provided a resource center with free financial education materials for parents and community groups. On hand for the kickoff were CTCE CEO Glenn Pottieger, the credit union's board, Sammy the Savings Squirrel and Pennsylvania Credit Union Foundation Executive Director Joe Wambach, shown here with a parent at the exhibit as a student plays teller. (Photo provided by the Pennsylvania Credit Union Association) …

CU System briefs (10/03/2011)

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* PERRYSBURG, Ohio (10/4/11)--Students and faculty at the Penta Career Center, Perrysburg, Ohio, joined credit union leaders from Northwest Ohio to introduce an online version of the financial education reality game, Finances 101: "Walk the Walk, Talk the Talk." A $26,000 grant from the Ohio Credit Union Foundation (OCUF) enables students to play the game virtually in classrooms and living rooms across the country. They can learn at their own pace, while diving deeper into the meaning of monthly debt commitments and linking to resources for more information. The game was created by the Northwest Chapter of the Ohio Credit Union League to provide real-world money experiences to high school students. Since 2003, nearly 6,400 students in Ohio have participated in the in-person version of the simulated "game of life." The online version allows users to select a male or female avatar, which is assigned a job based on the user's anticipated education level and career fields of interest, and proceed through real life situations. The grant was used to partner with WGTE Public Media, which provided technological resources to develop the online version and host the site … * DUBUQUE, Iowa (10/4/11)--Dupaco Community CU was named one of the top five mid-size employers in Iowa by the Des Moines Register (Sept. 18) as a result of a free, voluntary employee survey conducted by the newspaper in partnership with Workplace Dynamics to identify the top 25 employers in the state. The same survey also garnered Dupaco President/CEO Bob Hoefer recognition for his leadership. Survey respondents rated the importance of attributes such as feeling appreciated, being paid fairly and being listened to, then rated their employers on each statement. Dupaco had a 94% employee participation rate. Roughly 117 companies participated …

Maine CUs see growth in first-half 2011

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PORTLAND, Maine (10/4/11)--Maine's credit unions experienced across-the-board increases in all key categories including assets, savings, lending and membership for Jan. 1-June 30, according to the Maine Credit Union League's mid-year statistics for the period. Growth was even more significant when compared with the same period in 2010. Credit unions' combined assets in the state rose $5.56 billion or 3% since January. Loan growth was positive--a contrast to many other financial institutions in Maine and in the nation, said the league. Real estate loans rose 5.1%, savings increased by $126 million or 2.7% from the end of the year, and the influx of consumers to credit unions continued with a 0.7% growth or 4,388 new members during the first six months of 2011. Maine credit unions now serve 615,108 members. "As consumers continue to seek value in financial services, especially as economic challenges remain for many Mainers, Maine credit unions are well-positioned to provide value and benefits that consumers seek," said John Murphy, league president. "We expect this trend to continue, as other financial institutions introduce new fees and increase existing ones, and consumers are growing weary of fees," he said. "Meanwhile, Maine credit unions offer products and services without fees, such as no-fee debit cards, free checking at most credit unions, the largest no-fee ATM networks in Maine, a shared branch network with access to nearly 150 locations in Maine and 4,300 nationwide, as well as the sophisticated technology to access and conduct transactions. Many of the state's credit unions have reported hearing from consumers interested in using a credit union as a result of the recent decision by Bank of America, with other banks expected to follow suit, to impose a $5 fee on debit cards, Murphy said. "Maine credit unions are a great deal, and more consumers are discovering that every day." He also attributed growth to record volumes of consumers rushing to take advantage of the low mortgage interest rates and low home prices.

Equifax reports bankcard originations increasing

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ATLANTA (10/4/11)--Total bankcard originations for the first six months of 2011 are up by 27% over the same time in 2010, according to Equifax's latest national Credit Trends Report. More than 18 million bankcards were originated at credit unions and banks during the period--a three-year high for the January through June period. Bankcard originations for subprime borrowers--those having Equifax credit scores of less than 660--continued a trend seen in January-May data, said the credit information bureau. They exhibited a sustained increase--64% over the same period in 2010--and make up more than 31% of all card originations. During the first half of the year, 5.4 million new subprime cards were originated. The increase coincides with hikes in credit limits as well, said Equifax. In January-June 2011 new bankcard credit limits rose 27% over January-June 2010 levels. New subprime credit limits increased 68% for that period. Two other key findings:
* A $45 billion credit increase since February coincides with a decrease in bankcard delinquencies. * The number of bankcard delinquencies is declining to pre-recession levels. However, the average dollar amount of card delinquencies is increasing.
The data "clearly indicate a continuation of increasing numbers of bankcard originations and higher new bankcard credit limits," said Michael Koukounas, Equifax senior vice president, special client services. "While bankcard origination numbers are still far from their pre-recession levels, bankcard delinquency levels have actually declined below pre-recession levels, and I expect a continuation of this trend in the near term."

Natl media intensify reports on CUs debit-fee relief

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MADISON, Wis. (10/4/11)--Credit unions made an impact last weekend and yesterday among national media reporting on consumer backlash from debit card-fee hikes by large banks seeking revenue after limits were imposed on debit interchange by the Dodd-Frank Act . The media--including ABC's "Good Morning America," The New York Times, National Public Radio and Yahoo! Finance--told consumers to consider switching to a credit union.

On ABC's "Good Morning America" Monday, Elisabeth Leamy reported on "Tips and Tricks to Avoid New Bank Fees." News last week about Bank of America's plans to charge $5 per debit card purchase transaction produced "an immediate backlash," with protests from consumers causing the bank's website to crash, Leamy said. She reported that other banks could follow in one of the "unintended consequences" of the debit card interchange provision. Leamy, who is a past guest on the Credit Union National Association's (CUNA's) Home & Family Finance Radio Show, is familiar with credit unions through her work on savings makeover segments that featured credit unions in New York and New Jersey. Among the "workarounds" consumers can use against such fees include considering a credit union. ABC's website, abcnews.com, features a link where viewers can go to find a credit union, she said. Other reports:
* "Marketplace" from National Public Radio (Sept. 30): BofA's fee has "angered consumers who haven't forgotten they helped bail out the bank as taxpayers." However "BofA's nearly 39 million debit card holders do have options: Switch to a smaller bank or credit union, or just start putting all their purchases on a credit card," said the report, entitled "Bank of America to charge for debit card use." * In "Question: Why Pay Bank Fees?" The New York Times columnists Ron Lieber and Ann Carrns reported that Elvita Dominique of Harlem, a BofA customer had met with the bank to go over her options. Interviewed as she was leaving the appointment, she said one option she is considering is joining a credit union. "The fed-up have plenty of places to go to find a better bank these days," wrote Lieber and Carrns, adding readers can use creditunion.coop to locate "a credit union that will take you in." A student at University of Arkansas also indicated she might switch. A debit fee is "an inconvenience, especially for students. No one carries cash." * Yahoo.com noted in its "SmartMoney" article, "Is It Time to Ditch Your Debit Card?" that "for anyone who still really wants a debit card, smaller banks and credit unions may be the best alternative." * CreditCards.com (Oct. 3) in its article, "9 ways to avoid debit card usage fees," advised: Switch banks. "Consumer advocates urge debit cardholders to do their homework and find lenders than don't charge fees. That is most likely going to e a local credit union or small community bank." * In the Denver Business Journal Online (Sept. 29) , Bankrate.com Senior Analyst Greg McBride said not all banks are expected to charge the fees. Many larger banks have added the charges so the impact is larger, but he advised consumers to shop around. "Look at community banks, credit unions and online banks," he said. "They are still very viable for free checking and free debit cards." * In "Bank of America Charges Debit Card Fee: Time to Consider CUs?" International Business Times (Oct. 2) reported that some consumers on BofA's Facebook page commented they would switch to credit unions. BECU, Tukwila, Wash., told Seattle Post-Intelligencer that business at branches is "bustling." The credit union did not tie the increase in business to the bank's fees, but said it has steadily gained members leaving for-profit banks and growing fees. Its membership grew by 18% over the past 12 months. The Credit Union National Association (CUNA) in the article said that credit unions don't issue stock or pay dividends to outside stockholders, so they can offer lower loan rates, higher interest on deposits and lower fees. The article also reported that credit unions' CO-OP Network boasts free access to 29,000 ATMs and provided a link to an ATM online locator. * WTVM-TV in Georgia's "'Fed Up With Fees? Ways to Break Up With Your Bank" featured MEA FCU, which is offering money back for using a debit card. Credit unions "don't nickel and time" members and they don't have fees on debit cards, said the credit union.
These articles joined others reported earlier on Monday, including an interview with CUNA President/CEO Bill Cheney on Fox Business Network in which Cheney told reporter Gerri Willis that the credit union difference makes the financial cooperatives a better deal for consumers than profit-driven banks. Los Angeles Times and The New York Times also reported examples of credit unions as a solution to the debit fees (News Now Oct. 3).

Wis. league honors Maxwell Herring Desjardins winners

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PEWAUKEE, Wis. (10/4/11)--The Wisconsin Credit Union League announced its 2011 state-level winners for the Dora Maxwell, Louise Herring and Desjardins awards. First-place Dora Maxwell Social Responsibility Community Service Award winners are:
* Marinette (Wis.) County Employees CU, $5 million to $20 million in assets; * Badger Globe CU, Neenah, $20 million to $50 million; * Premier Financial CU, New Holstein, $50 million to $100 million; and * Heartland CU, Madison, $100 million to $200 million.
Louise Herring Philosophy-In-Action Member Service Award first-place winners include:
* Winnebago Community CU, Oshkosh, $50 million to $250 million in assets; and * CoVantage CU, Antigo, $250 million to $1 billion.
First-place Desjardins Youth Financial Education Award winners are:
* Central City CU, Marshfield, $150 million to $500 million in assets; and * Altra FCU, Onalaska, more than $500 million.

MnCUN hosts in-districts meeting with lawmakers

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AUSTIN and ST. PAUL, Minn. (10/4/11)--The Minnesota Credit Union Network (MnCUN) held two meet-and-greet events with legislators in late September.
Click to view larger image The Minnesota Credit Union Network (MnCUN) held two in-district meetings with federal legislators in late September. During a meet-and-greet on Sept. 27, U.S. Rep. Tim Walz (D-Minn.) (center) discussed member business lending and other issues with credit union representatives.
The in-district meetings with U.S. Rep. Tim Walz and Sen. Amy Klobuchar, both Democrats, helped credit union representatives to build on the momentum gained during MnCUN’s September Hike the Hill, according to MnCUN. The meet-and-greet series kicked off Sept. 27 when MnCUN and credit union leaders met with Walz at Accentra CU in Austin. Attendees received a brief congressional update from the Walz, who provided insight into the federal budget debate. The conversation also focused on the Small Business Lending Enhancement Act (H.R. 1418 and S. 509), which would increase credit unions’ member business lending (MBL) authority to 27.5% of total assets from the current 12.25%. Emphasizing the importance of increasing the availability of credit, Walz said small businesses are struggling to obtain loans. Credit unions also stressed MBL during a meeting with Klobuchar on Sept. 28 at Affinity Plus FCU in St. Paul. The group highlighted the potential benefits the legislation could have on the Minnesota economy.
Click to view larger image As part of a legislative meeting on Sept. 28, from left, Sen. Amy Klobuchar discussed credit union issues with Kyle Markland, president/CEO of Affinity Plus FCU, St. Paul. (Photo provided by Minnesota Credit Union Network)
In the addition, the discussion focused on the compliance and regulatory burden of the Dodd-Frank Wall Street Reform & Consumer Protection Act. Attendees provided Klobuchar insight into the time and resources credit unions are dedicating to comply with new regulations related to the act. Also, credit union representatives emphasized that despite increased regulations and the potential ramifications of the debit interchange amendment, credit unions remain dedicated to keeping fees low for consumers. The Credit Union National Association and credit unions are pressing Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

Fumes send seven CU employees to hospital

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SPRING TOWNSHIP, Pa. (10/4/11)--Fumes from a nearby construction project sickened seven employees Friday at a Diamond CU branch in Spring Township, Pa., and led to their being taken to area hospitals. Six of the seven workers were treated in emergency rooms and released. One was still at an area hospital Friday afternoon, but was doing well and was expected to fully recover, said John Faust, president/CEO of the $373.5 million asset, Pottstown, Pa.-based credit union (readingeagle.com Oct. 1). Area firefighters and ambulances were dispatched to the credit union when someone there called police to report a strong odor, the newspaper said. When credit union staff reported feeling nauseous, the building was evacuated and closed for the day, the paper said. Construction workers were using mushroom soil while working on a water retention system at the construction site, Faust told the paper. Soil fumes were drawn into the credit union through the ventilation system, he added.

Hispanic experts to speak at CUNA conference

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DES MOINES, Iowa (10/4/11)--Two representatives from Coopera, an economic development firm focusing on emerging markets for credit unions, will present a breakout session on creating loyalty within the Hispanic marketplace Oct. 26 during the Credit Union National Association’s (CUNA) Community Credit Union and Growth Conference in San Francisco. During the breakout session, “Product Strategies to Attract and Create the Loyalty of the Hispanic Community,” Coopera’s Warren Morrow and Miriam De Dios will address one of the hottest topics in the credit union industry. Young and largely underserved by financial institutions, Hispanic communities nationwide represent an opportunity for credit unions, according to Morrow and De Dios. “The average age of a credit union member is 47 and creeping older each year,” said De Dios, Coopera vice president. “On the other hand, the average age of the Hispanic population is 27. We have also seen that Hispanics use as many products per household as other members. They seek to borrow, they are responsible, they are loyal, and they refer their friends and family. It’s easy to see why Hispanics are appealing for credit unions.” Many credit unions mistakenly believe translating their brochures and websites into Spanish is enough to reach the Hispanic market, according to De Dios and Morrow. In the presentation, the two will outline successful Hispanic outreach strategies and discuss the importance of adapting products to the market instead of expecting that the market will adapt to them. Coopera is majority owned by the Iowa Credit Union League and is a strategic alliance partner of CUNA. The conference will be held Oct. 24 to Oct. 27.

NCUF seeks nominations for three board seats

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MADISON, Wis. (10/4/11)--The National Credit Union Foundation (NCUF) is seeking nominations for three board seats: an open credit union executive or director seat, a system affiliate seat and its at-large seat. Applications are due Oct. 28. Volunteers serve up to three three-year terms on the NCUF board so long as they are re-nominated by the NCUF Governance and Nominations Committee and re-elected by the NCUF board. Qualifications for the positions include:
* Credit union executive or director seat: Candidate must be an executive officer or director of a credit union. * System affiliate seat: Candidate must be and remain a director or executive officer of an organization that is national in scope, has as its primary purpose the support of credit unions or some element of the credit union movement; has a significant portion of ownership or membership from the credit union system; and has demonstrated a commitment to the purposes of this corporation. NCUF cited CUNA Mutual Group as an example. * At-large seat: Candidate must be and remain a representative of an organization outside the credit union system, such as a cooperative, that has demonstrated a commitment to the purposes of the corporation. The individual elected to this seat is appointed for a one to three-year term determined by the NCUF board and shall not be eligible to serve on the foundation's Executive Committee.
Two incumbents in the system affiliate and at-large seats are up for election: Christopher Roe, senior vice president, corporate and legislative affairs, CUNA Mutual Group, Madison, Wis., who is completing his first term; and John Gregoire, president, The ProCon Group, Madison, who is completing his second term. The third position will be vacated by Allan Kemp McMorris, president/CEO of Oakland County CU, Waterford, Mich., who is fulfilling his last term on the board. To apply, use the link. The NCUF board will vote on the committee's recommendations in December. In January, NCUF's board will elect table officers at its organizational meeting, the first of three face-to-face meetings planned for 2012. The meetings are:
* Organizational meeting, Jan. 24, Phoenix; * Spring/Summer meeting, May 17; and * Fall board meeting, September 2012 in Washington, D.C.
The board has 13 voting seats, which include representatives from credit unions, national organizations serving credit unions, corporates, state credit union foundations, state leagues and the at-large position.

IUSA TodayI CU helps low-incomers vs. payday loans

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NEW YORK (10/4/11)--Credit unions are among the options low-income consumers without a financial institution have to avoid the steep cost of payday lenders, according to a Thursday article in USA Today. The article, “Low-income borrowers get options beyond payday loans,” mentioned Micro-Branch, which is a combination check casher and credit union, which was started in California last year to serve unbanked families. The credit union, Self-Help FCU in East San Jose, Calif., launched a Micro Branch for many unbanked Latino families in the area who rely solely on check cashing. Self-Help not only offers less costly check cashing, but also encourages members to begin saving money in a credit union account. To read the article, use the link.

Randolph Brooks gives cash back on debit purchases

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LIVE OAK, Texas (10/4/11)--Unlike megabanks that are hiking debit-card fees, a new program at Randolph-Brooks FCU (RBFCU) in Live Oak, Texas, will give members cash back on debit-card purchases. Until Dec. 31, RBFCU will reward members with 15 cents cash back on every debit card purchase. The credit union currently pays members 10 cents for each transaction, but chose to increase the reward as a member-appreciation program for the end of the year. “We’ve watched other financial institutions put new fees in place and we know that’s not what members need during a time when the economy is struggling,” said Sonya McDonald, senior vice president of market development. “Instead of upping our fees, we chose to increase rewards. Since we’ve experienced record growth this year, we decided to use the extra funds as a thank you to the members who have made this growth possible.” The $4.4 billion asset credit union also plans to reward members who use its MasterCard credit cards with 5% cash back on each fuel purchase. Consumers have objections to Bank of America (BofA) and other large banks raising fees to cover lost revenues caused by the Federal Reserve’s debit card interchange rule (See related News Now story “Nat’l media intensify reports on CUs’ debit-fee relief). It was widely reported Thursday that Bank of America has plans to begin charging a $5 monthly fee to some debit-card users (News Now Sept. 30). The Credit Union National Association (CUNA) is urging the Federal Reserve to increase the amount of per-transaction fees that debit card issuers receive to cover their costs associated with fraud prevention. CUNA also recommended that the Fed periodically revisit the fraud prevention cost issue to see if the costs have changed and whether any future adjustments are necessary. The Fed is required to study and report on how the debit interchange fee cap has impacted merchants, consumers and financial institutions within the next two years (News Now Oct. 3).

Tree Capital CU merges into Fla. State U CU

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TALLAHASSEE, Fla. (10/4/11)--The National Credit Union Administration has approved the merger of $17 million asset Tree Capital CU, Perry, Fla., into Florida State University CU, with $95 million in assets, Tallahassee, Fla.
Click to view larger image Florida State University CU opened its sixth branch on Sept. 10 at 1412 W. Tennessee Street in Tallahassee, Fla. with a ribbon-cutting ceremony. (Photo provided by Florida State University CU)
The merger was effective Saturday. Tree Capital CU members approved the merger by a near unanimous vote on Sept. 26. Full integration of the two operations will take place in the next four to six months. Tree Capital CU will keep its name but become a division of Florida State University CU. Tree Capital staff will continue serving members at its branch in Perry, Fla. Kay Green, Tree Capital CU CEO, will become a member of the Florida State University CU senior management team. Two Tree Capital board members will continue service on a combined board of directors. Florida State University CU opened its sixth branch on Sept. 10 at 1412 W. Tennessee Street in Tallahassee.

Top 10 iNews Nowi stories for September

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MADISON, Wis. (10/4/11)--An article about how members of a credit union’s management team can serve only on one board was the most read News Now story in September. Here is a list of the top 10 most-visited stories for the month. 10. Western Bridge members’ service will be uninterrupted--NCUA ALEXANDRIA, Va. (9/2/11)--United Resources FCU’s bid to succeed Western Bridge Corporate FCU fell short of the bridge corporate’s stated capital subscriptions goal of $200 million Wednesday, said the National Credit Union Administration. 9. Equity ratio, net worth changes passed by NCUA ALEXANDRIA, Va. (9/23/11)--Amendments to the Federal Credit Union Act’s definitions of the National Credit Union Share Insurance Fund’s definitions of equity ratio and credit union net worth were unanimously approved by the National Credit Union Administration board on Thursday. 8. BofA debit fee shows interchange cap a blow to consumers: CUNA WASHINGTON (9/30/11)--As most credit unions continue to offer free debit card services, banks are just beginning to apply sometimes hefty fees to the popular service. It was widely reported Thursday that Bank of America has plans to begin charging a $5 monthly fee to some debit-card users--in an attempt to recoup lost revenues caused by the implementation of a statutory cap on debit interchange fees. 7. USA Today: Fee gap between banks, CUs could widen MADISON, Wis. (9/28/11)--The gap between the historically low rates credit unions offer their members and the higher rates big banks charge their customers could become even wider as a result of the new debit interchange fee cap regulations, according to a Tuesday USA Today article. 6. NCUA OIG: Examiners could have eased Certified FCU losses ALEXANDRIA, Va. (9/12/11)--National Credit Union Administration examiners “could have prevented or reduced” losses to the National Credit Union Share Insurance Fund that were caused when Certified FCU failed in 2010 if “swift and appropriate administrative remedies” had been taken, the NCUA's Office of the Inspector General has determined. 5. NCUA prohibits five from future CU work ALEXANDRIA, Va. (9/15/11)--Five individuals have been the subject of recent prohibition orders issued by the National Credit Union Administration and are thereby prohibited from participating in the affairs of any federally insured financial institution. 4. CUNA addressing IRS CU exemption error WASHINGTON (9/16/11)--An assertion by the U.S. Internal Revenue Service that some credit unions are no longer tax-exempt is “completely wrong” and something that the Credit Union National Association (CUNA) will work on tirelessly to set the record straight, inside and outside the credit union movement, CUNA President/CEO Bill Cheney said Thursday. 3. WSJ: Credit unions a better value than banks MADISON, Wis. (9/20/11)--An article in the Sunday edition of The Wall Street Journal touted credit unions as a more affordable option than banks. 2. Visa, MC expected to raise small-purchase fees NEW YORK (9/27/11)--Visa Inc. and MasterCard Inc. plan to increase the fees merchants pay for small-ticket debit purchases to the full amount allowed under the Federal Reserve's new rules that take effect Oct. 1, said analysts interviewed by Bloomberg News and The Wall Street Journal (Sept. 23) . The move could discourage some merchants from accepting debit cards for small transactions. 1. CU execs must serve only one board, NCUA says ALEXANDRIA, Va. (9/12/11)--The National Credit Union Administration’s (NCUA) management official interlocks rule prohibits members of a credit union’s management team from serving other nonaffiliated depository organizations, NCUA Associate General Counsel Hattie Ulan said in an agency legal opinion.