Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

CU System Archive

CU System

New York Del. Mass. leagues report status of CUs

 Permanent link
MADISON, Wis. (11/1/12)--New York, Delaware and Massachusetts credit union leagues reported Wednesday on the status of credit unions in their states affected by Hurricane Sandy's sweep through the East Coast and Mid-Atlantic States Monday and Tuesday.

The Credit Union Association of New York (CUANY) said Wednesday that early reports from Long Island credit unions indicate a few members of their staff have lost their homes while others experienced serious property damage and that it was activating its disaster relief aid. (See related News Now story, "Aid activated for CUs affected by Hurricane Sandy.")

Municipal CU (MCU) in New York City has a toll-free number, 888-220-0320 with a recorded message listing branches open, said CUANY.

On its website, the credit union reported: "In the aftermath of Hurricane Sandy, like the members we serve, MCU is working hard to restore service and we have already reopened some of our branches." The $1.8 billion asset credit union said it hoped that by today more branches would be open. "We are making all efforts to resume normal business activity as soon as possible."  The branches that were open was of Wednesday were in the Bronx, Co-op City, Queens Center Mall, Flatbush, Harlem, Brooklyn and Springfield Gardens

Members could also access funds through NYCE ATM Network. "We hope you and your families are safe," the site said.

As of Wednesday afternoon, CUANY said that:

  • Teachers CU has 13 branches open with power, but no phones or ATM;
  • Melrose CU is open;
  • Town of Hempstead Employees FCU is closed;
  • Palisades FCU has some branches open;
  • Entertainment Industries FCU is closed, with no damage and no power;
  • American Broadcast FCU is closed;
  • Oceanside Christopher CU on Long Island is closed; and
  • Bay Ridge FCU in Brooklyn is open.
The Delaware Credit Union League said it was "happy to report that no Delaware credit unions suffered any damage due to Superstorm Sandy" (Together Oct. 30).  All credit unions in the state were closed Monday due to the state emergency declared by the governor. On Tuesday about one-third of the credit unions contacted by the league had reopened for business in either the morning or early afternoon. All credit unions were back to the business of serving their members on Wednesday, said the league.

The league said the Volunteer Leadership Conference scheduled to begin Friday and end Sunday will be held as planned. "Some road closings may necessitate attendees to take alternate routes to Ocean City," said the league.  Ocean City lost a fishing pier as Sandy swept ashore Monday.

New England credit unions did not bear the brunt of Sandy's force, according to the Massachusetts Credit Union League.

"Fortunately for New England, Hurricane Sandy did not strike directly," said the league in its E-Weekly (Oct. 31).

"Nonetheless, the impact was felt throughout the region with numerous power outages affecting hundreds of thousands of people. Most area credit unions were closed either all day Monday or by mid-day. The league offices were closed Monday afternoon, but member credit unions were provided with contact information for storm-related emergencies," said the league.

By Tuesday, the vast majority of credit unions in the area were open for business. "It was universally agreed that the overriding concern throughout the emergency was for the safety and well-being for the credit union staff and members as well as the people who live in local communities," said the league's newsletter.

"The league and individual credit unions will be assessing the extent of the damage in the immediate aftermath of the storm and determining how the credit union community can assist in recovery efforts," said the league.

Hurricane Sandy lost hurricane status just as it came ashore near Atlantic City, N.J., at about 8 p.m. ET on Monday. However, the size of the storm and the confluence with a cold front from the Northwest and a high pressure system from Greenland produced a monster hybrid storm that was 800 to 1,000 miles wide, and brought unusually sustained winds of 80 miles per hour, a record breaking storm surge that flooded New York City and the New Jersey coastline, and one to two feet of snow to the Appalachians before moving through Pennsylvania and heading into Ontario.

Sandy killed 63 people and early estimates are putting damages as high as $25 billion. (See related News Now stories, "New Jersey CUs slowly reopening after Sandy's impact," "Sandy's impact on economy could top $20B".)

Merchants seek extension on interchange ruling due to Sandy

 Permanent link
NEW YORK (11/1/12)--Merchants who oppose the $7.25 billion settlement of retailers' class action antitrust lawsuit against Visa and MasterCard over credit card interchange fees Monday asked the court Monday for a two-day extension on the deadline to submit their written oppositions, saying that Hurricane Sandy had closed their offices. The deadline for the written oppositions was Wednesday.

In a letter to U.S. District Judge John Gleeson in the Eastern District of New York, Brooklyn, attorney Jeffrey I. Shinder, wrote: "While we (and other objectors) have made every effort to meet that deadline, our offices have been closed in New York and Washington due to the storm." The offices were expected to stay closed on Tuesday. "We understand that certain objectors are facing similar challenges. Potential power outages will compound the logistical issues with getting a filing completed by Wednesday," said the court document.

The letter suggested extending the deadline until Friday.  A hearing had been set for Nov. 9.

Retailers in the suit had alleged that banks and card companies conspired to fix interchange fees charged the retailers when consumers pay for purchases with credit cards.

A growing number of major retailers such as Walmart and Target, and retail organizations such as  The National Association of Convenience Stores and the National Retail Federation  (NRF) are opposed to or are challenging the settlement, saying it leaves credit card issuers with too much control over swipe fees  (Forbes July 25). NRF, which was not party to the original lawsuit, said in September it would try to block the settlement (News Now Sept. 12).

Target said the settlement "is bad for both retailers and consumers" and would "perpetuate a broken system,' restrict retailers from future legal action and offer no long-term relief for retailers or consumers."

Credit unions were not a party to the litigation, but will be affected by the injunctive relief settlement terms--temporary reduction in credit card interchange, surcharging and buying groups. The settlement's proposed reduced credit card interchange rate fees could cost credit unions with credit card programs up to $50 million total, according to the Credit Union National Association (CUNA).

The settlement would require a reduced interchange rate fee (IRF) of 10 basis points for an eight month period, likely beginning in mid-2013, and would apply to all card issuers, including credit unions. If the total credit IRF reduction is $1.2 billion, credit unions with credit card programs would lose about $50 million in total revenues, or about 0.5 basis points on their total assets, CUNA says. The loss would be concentrated among a relatively small number of credit unions with very active credit card programs.

The proposed settlement also calls for Visa, MasterCard and the banks to create a $6.05 billion fund to repay retailers for past fees charged and says retailers would be permitted to assess "check out" fees or surcharges on credit card purchases, which has previously been prohibited by Visa and Mastercard rules.

The surcharging aspect of the settlement--as well as the provision that consumer-owned credit unions would see a reduction in interchange revenue--are signs that the settlement does nothing for consumers, CUNA President/CEO Bill Cheney has said. Interchange revenue enables credit unions to provide "essential and cost-effective credit card services" to members. "We also know that the temporary reduction in interchange revenue that credit unions will experience will not likely find its way into the pockets of consumers, but will more likely into those of merchants," Cheney said.

N.J. CUs slowly re-opening after Hurricane Sandy

 Permanent link
HIGHTSTOWN, N.J. (11/1/12)--In the aftermath of Hurricane Sandy's devastating impact on the New Jersey shoreline, the state's credit unions are slowly recovering from power outages and damages, with some already open and operational.

Many are still conducting automated clearinghouse (ACH) and online transactions even if their offices and branches are closed, and are encouraging their members to use online and mobile banking in the meantime.

The New Jersey Credit Union League has updates on a number of credit unions' status. As of 5 p.m. ET Wednesday, credit unions' status included:

  • 1st Bergen FCU--Equipment and facility are OK, but credit union has no power. It is looking to open temporarily at a site in Hackensack with power for today and Friday.
  • ADP FCU--Its Roseland office is open and operational.
  • Atlantic FCU--Kenilworth office is without power; will open once power is restored.
  • Bay Atlantic FCU--Credit union has been operational since 10 a.m. Tuesday and all systems are functioning properly. It used disaster recovery/business continuity (DR/BC) plans to service members on Monday.
  • Bridgeton Onized FCU--Credit union is open but has no e-mail. It used its DR/BC plans to service members on Monday.
  • Credit Union of New Jersey--It is now operational at its main office and branch in Ewing, as well as its Lafayette and Willingboro branches. Other branches still closed.
  • Essex County Teachers FCU-It has power, phone and DP communications. It reported that many shared-branching credit unions aren't available on the network and communicated the issues to the National Credit Union Administration.
  • First Financial FCU--All locations are closed.
  • Garden Savings FCU--Parsippany branch re-opened; Newark branch is without power and is closed.
  • Hamilton Horizons FCU--The credit union is closed due to power outage. All back-office transactions, including automated clearinghouse, checking and ATM are still available.
  • Jersey Central--Cranford office opened Wednesday.
  • Jersey Shore FCU--FAA and Rio Grande offices are now open with limited service. Northfield and Hamilton Mall offices are fully operational. Shore Medical Center office is also fully operational for on-site employees.
  • McGraw-Hill FCU--2 Penn Plaza, 1221 Avenue of the Americas and East Windsor branches are now open and operating under normal business hours. 55 Water St. branch is still closed due to the forced evacuation of the building.
  • North Jersey FCU--All branches are open.
  • Picatinny FCU-- Main branch in Rockaway and Denville branch are fully operational. The arsenal has a delayed opening of noon and the Mt. Olive branch is closed due to power outage. The credit union has allowed NJCUL Business Partner Angel Santos to work at the Rockaway office for the time being.
  • United Teletech FCU--Tinton Falls branch is currently open for business; all other locations are closed, pending the restoration of power to those locations.
  • West Orange Municipal FCU--Credit union has a generator and should be able to continue operations with little interruption going forward.
  • XCEL FCU--Bloomfield, N.J., office is OK, but most branch staff depend on PATH and New York subways for transportation. Federal Plaza branch in Manhattan, and Journal Square branch in Jersey City will remain closed until further notice. The branch at 3680 Kennedy Boulevard in Jersey City is open. All ACH and share drafts were posted remotely each day.
Assistance is available to credit unions needing it, said the league.  Thomas O'Shea, president/CEO of Aspire FCU, headquartered in Clark, N.J., told the league it has no power loss. It is offering its extra office space, cubicles and Internet access (outside the credit union's secure network) to local credit unions. The credit union can accommodate 10-20 persons in cubicles, conference rooms and offices. Interested credit unions can contact Shea directly at Thomas.OShea@aspirefcu.org or 908-403-3666, or contact league President/CEO President Paul Gentile.

East Coast Solutions contacted the league and has offered discounted services to credit unions needing assistance. Credit unions can call 800-398-2292, ext. 151.

The National Credit Union Foundation has also activated the online disaster relief system CUAid.coop to raise money for credit union people along the East Coast affected by Hurricane Sandy. Credit union supporters in every state can now make donations by using the resource link.

As donations are posted through CUAid.coop, NCUF will coordinate with the credit union leagues in the disaster area to distribute money efficiently to affected credit union employees and members. One hundred percent of the donations through CUAid goes to credit union disaster relief. In the event that all donations are not used for Hurricane Sandy relief, NCUF will transfer any and all unused funds to its "General Disaster Relief fund" for future disaster relief efforts.

National Credit Union Administration (NCUA) Chairman Debbie Matz contacted the league to offer assistance. She asked that thelLeague let the agency know if there's anything it can do to assist credit unions. She stated that NCUA wants to do what it can to make sure that the residents of New Jersey have access to their accounts.

"Please communicate with the league if there is anything NCUA can do to help," Gentile told the state's credit unions.

The league office is still without power, but our staff is working in business continuity mode from home or other safe locations and assistance is available," he  said in a press release.

Credit unions in the state can contact these league staffers to receive service in key areas:

The league urged credit unions experiencing any damage or significant issues to communicate with the league, if possible.

Aid activated for CUs affected by Hurricane Sandy

 Permanent link
MADISON, Wis. (11/1/12)--Credit unions' online disaster relief system CUAid.coop has been activated by the National Credit Union Foundation (NCUF) to raise money for credit union people along the East Coast affected by Hurricane Sandy. Other aid efforts are underway as well.

Credit union supporters in every state can now make donations at www.cuaid.coop (use the link). CUAid is the only program of its kind that enables credit union employees, volunteers, and members, as well as credit unions and credit union organizations across the U.S., to contribute directly to support other credit union people.

"To help alleviate the devastating effects of this disaster, we encourage credit union leaders all across the country to use CUAid.coop as a channel to collect donations from their employees, volunteers, and members," said NCUF Executive Director Bucky Sebastian. "Everyone who supports CUAid is helping affected credit union people directly with critical needs, longer-term recovery needs, operational needs, and assisting credit union members."

As donations are posted through CUAid.coop, NCUF will coordinate with the credit union leagues in the disaster area to distribute money efficiently to affected credit union employees and members. One hundred percent of the donations through CUAid goes to credit union disaster relief. In the event that all donations are not used for Hurricane Sandy relief, NCUF will transfer any and all unused funds to its "General Disaster Relief fund" for future disaster relief efforts.

Also, CO-OP Financial Services announced Wednesday it has pledged $10,000 to CUAid,

"Hurricane Sandy has dramatically reminded us that natural disasters can come upon us with amazing speed," said Stan Hollen, president/CEO, CO-OP Financial Services. "We have been proactively contacting clients in the impacted areas to assess needs and determine where we can help. We have found that Hurricane Sandy has once again enabled the credit union movement to demonstrate its core values of people helping people. NCUF's CUAid is one more example of this."

The New York Credit Union Foundation, the charitable arm of the Credit Union Association of New York, also announced Wednesday it was reactivating its Disaster Relief Fund to help New York's credit union employees and members most severely impacted by Hurricane Sandy. The hurricane has left much of the downstate area without power and in some cases flooded for the past two days.

"Our goal with this fund is to support those individuals who need assistance with daily living expenses and/or who need financial assistance to cover storm-related expenses," said William J. Mellin, president/CEO of the Credit Union Association of New York. 

Early reports from Long Island credit unions indicated a few members of their staff have lost their homes; others have experienced serious property damage.

"Even the smallest donation adds up and will help our credit union family, which is still dealing with the devastation Hurricane Sandy left behind," Mellin added.

Those contributing to the New York fund can donate via a funds transfer into the New York foundation's account #221304873, share type #060 through Alloya Corporate FCU's Premier View or its Member Services Department at 800-342-4328. The donation amount and date should be e-mailed to Allison.barna@cuany.org.

CUAid was developed by NCUF in cooperation with state credit union foundations, state credit union leagues, and the Credit Union National Association's Disaster Preparedness Committee in 2006.

Organizations and individuals can use a variety of CUAid web buttons for their website. Use the resource links.

PCH FCU merges with Hudson Valley FCU

 Permanent link
POUGHKEEPSIE, N.Y. (11/1/12)--PCH FCU in Carmel, N.Y., has merged into Hudson Valley FCU (HVFCU), Poughkeepsie, N.Y. 

HVFCU, with $3.6 billion in assets, assumed the operations of $1.3 million PCH FCU on Oct. 1. 

The boards of both credit unions approved the merger. 

"We welcome the members of PCH FCU into the HVFCU family," said Mary Madden, HVCU president/CEO.  "PCH has served Putnam Hospital Center employees and their families for more than 40 years, and we look forward to providing them with even greater service in the future."

Nominations for Wisconsin Fin Lit award due Nov. 30

 Permanent link
MADISON, Wis. (11/1/12)--Nominations for the 2012 Wisconsin Financial Literacy Award will be accepted through Nov. 30, the Governor's Council on Financial Literacy announced this week.

Individuals or organizations may be nominated for the award, which recognizes efforts at promoting personal financial literacy in Wisconsin.

Criteria that will be used to judge the nominations include:

  • Innovative implementation;
  • Demonstrated measureable results;
  • Collaboration with partners; and
  • A statewide or potentially statewide scope, or need-based group focus.
Nominations may be submitted online. Use the link. The Governor's Council will select recipients at its December meeting. Last year, the council selected 14 individuals and eight organizations as recipients of the 2011 award.

The Department of Financial Institutions (DFI), through its Office of Financial Literacy (OFL), promotes financial literacy statewide. DFI Secretary Peter Bildsten is vice chair of the Governor's Council on Financial Literacy, while OFL Director David Mancl serves as the council's executive director.

For more information, use the link.

CUSOs networks shared branches at work for CUs during Sandy

 Permanent link
MADISON, Wis. (11/1/12)--In the short term, the top priority for credit unions affected by Hurricane Sandy is redirecting phone calls to ensure that members can be served, according to industry service providers. In the long-term, priorities will be more structural.

Agility Recovery, a CUNA Strategic Services provider, was working with 960 businesses in active recoveries across several industries. Agility had one credit union that declared an emergency and 11 on alert.

"Initially most of the recoveries we made were redirecting their phone calls to make sure (they could communicate) if their phones did go down," said Bob Boyd, Agility Recovery CEO. "After the storm hit, a huge number of people lost power and we delivered a tremendous number of generators throughout the North East," he told News Now.

On Tuesday, Verizon, AT&T and Sprint reported "historic" issues with their networks, Boyd said.

"We had a lot of people call saying, "My power's back on but I have no phone and no Internet,'" Boyd said. "We are now helping people restore that connectivity capability."

Starting Wednesday, the nature of the recovery moved to setting up space from which companies can work, Boyd said.

"That will go on for a week to 10 days, and that will continue to escalate for the next week, and some of those will long term," Boyd said. "Some people will be out of their space for five six months. Then it's a longer-term support recovery effort, making sure they have enough space in the interim."

Ongoing Operations, another CUNA Strategic Services provider, primarily assisted credit unions with the rerouting of critical data lines for ATMs, shared branching and data processing.

"I can tell things go much more smoothly with credit unions that have exercised their programs before a disaster occurs," said Don Stewart, Ongoing Operations director of professional services.

Credit unions served by CO-OP Shared Branching and affected by Hurricane Sandy have turned to call center services to provide for their members, according to Craig Beach, president/chief operating officer of credit union shared service centers.

Beach said about 10 CO-OP Shared Branching client credit unions were without power, most of them in the Long Island/New Jersey area. "We have not received a ton of calls, like we did for (Hurricanes) Rita and Katrina," Beach said. "Our members were pretty well positioned for what happened."

Beach told News Now that CO-OP Shared Branching reached out to its member credit unions in anticipation of Hurricane Sandy to discuss emergency plans, which primarily involved switching to call center operations in the short term.

"The next step right now is to continue to monitor the situation," Beach said. "Credit unions are trying to determine the long-term impact. We will be in touch as to kind of resources they need  through CO-OP Network. I think credit unions not on shared branching are thinking about joining so they can serve their members when these types of disasters take place."

CO-OP experienced about 250 ATM outages immediately after Sandy hit, but as of Wednesday afternoon had whittled that number down to about 50, mostly in areas around New Jersey and New York where major flooding occurred.

"Considering the size of our network and the density of the area, we are very grateful," said Jim Hanisch CO-OP executive vice president, network operations and corporate development. "That said our thoughts and support go out to everyone affected by the storm."

For Xtend Inc., a Grand Rapids, Michigan-based cooperative credit union service organization (CUSO), the time leading up to Hurricane Sandy, as well as the storm's aftermath meant business as usual to support its partners. The shared resources CUSO provides back office and call center services to credit unions each day, and the East Coast storm meant that support teams will be busier for the next couple weeks. 

As we tracked the storm's progress during the past week, it was clear that many of our east coast credit unions would be impacted and that we needed to jumpstart our business resiliency services just in case they were needed," said Xtend President Scott Collins. "We already provide daily back office services for many of those credit unions, but we reached out to the others to offer bookkeeping assistance as needed.  From a call-center standpoint, one of our Manhattan-based credit unions began directing inbound calls to our agents Monday morning and others may follow suit if they are closed for a prolonged period."

Collins noted that Xtend has been offering stand-in support services for nearly five years.  "It's one of those things that you hope you never have to activate," said Collins, "but we have engaged a half dozen different times since we first started offering the service.  We work closely with our sister CUSO, CU*Answers, to go into 'business recovery' mode when weather threatens any of our partners, and their team did its usual stellar job with this latest challenge.  It is truly a team effort--a cooperative effort between two cooperatives."

Council paper stresses lending due diligence in mergers

 Permanent link
MADISON, Wis. (11/1/12)--A new white paper from the CUNA Lending Council compares lending due diligence in a merger as the equivalent of having a home inspection before completing a house sale: It's OK to make an offer, but before you sign the papers that complete the sale it's essential to know whether the foundation is crumbling or the roof is leaking.

"A lot of times what we see is credit unions that are merging just to merge, rather than really understanding what they're bringing in-house and where there are differences," said Steve Miller, director of operations/senior analyst for Twenty-Twenty Analytics, Coral Gables, Fla., a CUNA Strategic Services provider. "There will be differences in how they operate collections, in the products offered, in the rates they offer. There are a lot of differences in your lending strategies that you need to think about."

The lending due diligence paper explores those differences with a multi-layered process. It begins with a review of lending and collections policies and procedures before gradually digging deeper through tactics such as analyzing credit score migration, examining portfolio segments and pulling sample files. Staff interviews are used to complement data and may even reveal "skeletons" hidden within the merger partner's lending department.

Consultants and accountants can play a vital role in analyzing data and tracking the merger's progress, the council paper indicated. Credit unions also rely on task lists developed by work teams and checklists assembled through multiple mergers.

When red flags and problem areas become apparent, credit unions must weigh their options. If they go forward with the merger, they must ensure they have adequate funds set aside in the allowance for loan and lease losses account, said the paper. They must also keep the board informed so board members know how post-merger performance compares to projections.

The need for thorough due diligence is reinforced by the knowledge that bad loans are typically the biggest factor in a credit union's failure, the paper said.

NCUF grantee helps Native American students manage money

 Permanent link
High school students show their purchase options at the "Crazy Cash City" money-spending simulation held by Albuquerque, N.M.-based First Financial CU and First Nations Development Institute.
GALLUP, N.M. (11/1/12)--About 200 teens in Gallup, N.M., recently got a taste of money management at "Crazy Cash City" money-spending simulation, Oct. 9-11, aided by a National Credit Union Foundation (NCUF) grant.

The event was hosted by First Financial CU, with $399 million assets, based in Albuquerque, N.M., in partnership with First Nations Development Institute for local high school students, the majority of whom are Native American. The exercise--which was a test of a new pilot program--was intended as an experiential learning opportunity for students taking a financial literacy class this semester.

First Financial CU received a grant from NCUF to help provide funding for the event. Local businesses and organizations provided volunteers to help staff the simulation.

The program was adapted from the Credit Union National Association's Mad City Money curriculum to make it suitable for a Native American audience. Changes included profile cards to reflect tribal employment, using photos of Native Americans, and adding tribal-related revenue such as tribal dividend payments. The curriculum also was updated to work with a simulated debit card purchasing system.

In a "Crazy Cash City" money-spending simulation held by Albuquerque, N.M.-based First Financial CU and First Nations Development Institute, high School students show their budget cards. (Photos provided by the National Credit Union Foundation)

First Financial CU's goal was to promote smart and informed decisions that will last a lifetime, which is crucial to Native American communities, NCUF said. Learning how to manage finances ensures that Native people will be more likely to save and to challenge financial service providers to develop products that respond to their particular needs. 

"Crazy Cash City" was held in Gallup, N.M., and consisted of six two-hour reality fairs in which the students had to navigate simulated financial tasks and challenges designed to teach basic budgeting and banking skills.

"We could lecture for two hours about budgeting, but experiential learning gives students a chance to actually live out what they will face in the future," said Michael E. Roberts, president of First Nations.

"They interact, laugh, learn and have a lot of fun, and it's much livelier than a regular classroom," said Shawn Spruce, First Nations' financial education consultant. "Many of these students are currently taking a financial education course, too, so this seminar enables them to put what they have learned into practice."

Since it was a pilot project, First Financial CU and First Nations collected feedback from participants to conduct an evaluation of the simulation model. They will be compiling the data and writing a report to address strengths and weaknesses of the program, allowing First Nations to improve the model for possible use at more schools.

NCUF grants are made possible by supporters of the foundation and the Community Investment Fund, an award-winning system of investments that help credit unions earn dividends while donating to national and state community development programs. This "Grant at Work" is part of a series highlighting NCUF grantees making a positive impact in their community and empowering consumers to achieve financial freedom through credit unions.

Pete Pritts named Corporate America CEO

 Permanent link
IRONDALE, Ala. (11/1/12)--Pete Pritts has been named president/CEO of Corporate America CU, Irondale, Ala.

Pritts most recently served as president/CEO of FirstCorp in Phoenix, Ariz., and has 25 years of experience in corporate credit unions.

While at First Corp, Pritts served on the boards of CU Business Group LLC and CNBS Inc. and on the Arizona Credit Union League legal and legislative committee.

In 2010, Pritts was awarded the Very Outstanding Credit Union Person award by the Arizona league.

NEW N.J. CUs slowly re-opening after Hurricane Sandy

 Permanent link
HIGHTSTOWN, N.J. (FILED at 2:06 p.m. ET 10/31/12)--In the aftermath of Hurricane Sandy's devastating impact on the New Jersey shoreline, the state's credit unions are slowly recovering from power outages and damages, with some already open and operational. Many are still conducting automated clearinghouse and online transactions even if their offices and branches are closed, and are encouraging their members to use online and mobile banking in the meantime.

The New Jersey Credit Union League has updates on a number of credit unions' status. Credit unions include:

  • Atlantic FCU--Kenliworth office is without power; will open once power is restored.
  • Credit Union of New Jersey--All locations are closed.
  • First Financial FCU--All locations are closed.
  • Garden Savings FCU--Parsippany branch re-opened; Newark branch without power and is closed.
  • Jersey Shore FCU--Roseland office open and operational.
  • McGraw-Hill FCU--1221 Avenue of the Americas and East Windsor branches are now open. 2 Penn Plaza staff is still in-transit to that branch location and are delayed due to the congestion of the New York mass transit system.  And 55 Water St. branch is still closed due to the forced evacuation of the building.
  • Picatinny FCU-- Main branch in Rockaway and Denville branch are fully operational. The arsenal has a delayed opening of noon and the Mt. Olive branch is closed due to power outage.
  • United Teletech FCU--Tinton Falls branch is currently open for business; all other locations are closed.
  • XCEL FCU--Federal Plaza branch in Manhattan, and Journal Square branch in Jersey City will remain closed until further notice. The branch at 3680 Kennedy Boulevard in Jersey City is open.
Assistance is available to credit unions needing it.

East Coast Solutions contacted the league and has offered discounted services to credit unions needing assistance. Credit unions can call 800-398-2292, ext. 151.

The National Credit Union Foundation has also activated the online disaster relief system CUAid.coop to raise money for credit union people along the East Coast affected by Hurricane Sandy. Credit union supporters in every state can now make donations by using the resource link.

As donations are posted through CUAid.coop, NCUF will coordinate with the credit union leagues in the disaster area to distribute money efficiently to affected credit union employees and members. One hundred percent of the donations through CUAid goes to credit union disaster relief. In the event that all donations are not used for Hurricane Sandy relief, NCUF will transfer any and all unused funds to its "General Disaster Relief fund" for future disaster relief efforts.

National Credit Union Administration (NCUA) Chairman Debbie Matz contacted the league to offer assistance. She asked that thelLeague let the agency know if there's anything it can do to assist credit unions. She stated that NCUA wants to do what it can to make sure that the residents of New Jersey have access to their accounts.

"Please communicate with the league if there is anything NCUA can do to help," said league President/CEO Paul Gentile.

"The league office is still without power, but our staff is working in business continuity mode from home or other safe locations and assistance is available," he  said in a press release.

Credit unions in the state can contact these league staffers to receive service in key areas:

The league urged credit unions experiencing any damage or significant issues to communicate with the league, if possible.

NEW CUAid activated for CUs affected by Hurricane Sandy

 Permanent link
MADISON, Wis. (FILED 10:52 a.m. CT 10/31/12)--The National Credit Union Foundation (NCUF)  has activated the online disaster relief system CUAid.coop to raise money for credit union people along the East Coast affected by Hurricane Sandy.

Credit union supporters in every state can now make donations at www.cuaid.coop (Use the resource link). CUAid is the only program of its kind that enables credit union employees, volunteers, and members, as well as credit unions and credit union organizations across the U.S., to contribute directly to support other credit union people.

"To help alleviate the devastating effects of this disaster, we encourage credit union leaders all across the country to use CUAid.coop as a channel to collect donations from their employees, volunteers, and members," said NCUF Executive Director Bucky Sebastian. "Everyone who supports CUAid is helping affected credit union people directly with critical needs, longer-term recovery needs, operational needs, and assisting credit union members."

As donations are posted through CUAid.coop, NCUF will coordinate with the credit union leagues in the disaster area to distribute money efficiently to affected credit union employees and members. One hundred percent of the donations through CUAid goes to credit union disaster relief. In the event that all donations are not used for Hurricane Sandy relief, NCUF will transfer any and all unused funds to its "General Disaster Relief fund" for future disaster relief efforts.

CUAid was developed by NCUF in cooperation with state credit union foundations, state credit union leagues, and the Credit Union National Association's Disaster Preparedness Committee in 2006.

Organizations and individuals can use a variety of CUAid web buttons for their website. Use the resource links.

CUs quick to offer assistance to members hit by Sandy

 Permanent link
MADISON, Wis. (10/31/12)--Credit unions in the actual path of Hurricane Sandy aren't the only credit unions with members impacted by the storm. Credit unions both in the thick of the aftermath and far from it had members affected--and they already are offering help.

Madison, Wis.-based UW CU announced Tuesday will provide loan payment relief to the 3,500 members in the hurricane's path , as well as collect donations for relief. Upon request, members in the affected areas will be afforded up to three months of loan extension at no charge. Late fees on loans and credit cards will be waived.

UW CU also announced "a giving opportunity" for its overall membership, which totals more than 173,000 members. Members can now donate directly from their Web Branch accounts to the American Red Cross Disaster Relief to assist communities impacted by the superstorm.

When members log in to the Web branch, the credit union's online banking platform, they will find an icon to click at the top of the main page. Once clicked, members can make a financial gift with funds from any of their UW CU accounts. The credit union will forward the funds donated to the American Red Cross Disaster Relief and designated for Hurricane Sandy victims.

In Woodbridge, Va., Belvoir FCU announced it has offered emergency assistance to help members with their financial situations stemming from the storm.

"Belvoir Federal has extended a waiver and/or credit of fees for any late loan payment fee for consumer and home equity loans as well as overdraft fees. The fees will be waived and/or credited for Monday and Tuesday.

"When Hurricane Sandy swept through our area, she left thousands without power and certain streets flooded," said Patricia Kimmel, Belvoir Federal's CEO. "We are offering these emergency assistance options as a way to bring relief to our members." The impacted members should contact the credit union before close of business Nov. 7.

SkyOne FCU, based in Hawthorne, Calif.--nowhere near Sandy's activities, but the credit union serves members in the transportation industry--said on its website it would help members in the path of the storm with 0% annual percentage rate disaster loans for loans up to $5,000 and would make the funds available within one business day of the member's request.

It also offers a 90-day payment extension on SkyOne loans, waives penalties for early withdrawal from SkyOne certificates to enable members to access the money when they need it, a free supply of checks to replace lost or damaged checks, and a free replacement Visa credit card, ATM or check card.  Members can make a request via e-mail or call 800-421-7111, option 4 and should have proof of loss or insurance claim ready.

The credit union will mail the check or deposit funds into the member's account within 24 hours. Once funds are deposited, members can access them through a shared branch in their area.

Hurricane Sandy aftermath Damages and closures

 Permanent link
MADISON, Wis. (10/31/12)--Credit unions not impacted by Hurricane Sandy's flooding have reported some damages, but those in the storm surge/flood areas have yet to determine how badly their buildings are damaged. Meanwhile, a number of closures and postponements continued Wednesday.

The megastorm that hit landfall in New Jersey Monday night claimed at least 41 lives in the U.S., in addition to 69 lives last week in the Caribbean. In the U.S., it left more than eight million people without electricity as of late Tuesday. It brought a record storm surge that flooded parts of New York, damaged the city's 600 mile subway system, and swamped tunnels. It brought fires, including one that swept through 80 homes in a single neighborhood in Queens. It destroyed part of the Atlantic City boardwalk and flooded most of the city, destroyed a pier at Ocean City, ripped apart homes on the shore, and sank the HMS Bounty, killing two crew members.

Then it produced heavy snow in the Appalachian Mountains, and unusually sustained high winds in regions nowhere near the coast.  High waves in Lake Michigan near Chicago were attributed to the storm's impact across 800 to 1,000 miles (The Wall Street Journal and CBS/Associated Press Oct. 30). And it was still moving through the states late Tuesday, marching through Pennsylvania toward Canada.

Tuesday, credit unions began trying to assess the damages. "Most of the damage reports CUNA Mutual Group has received so far have been from credit unions not impacted by major flooding," said Phil Tschudy, media relations manager for CUNA Mutual Group. "Those credit unions are reporting power outages and minor building damage," he told News Now.

"However, those we are most concerned about have locations in the storm surge/ flood areas. Many of these credit unions are still not able to get to their facilities, so we don't know the extent, if any, of their damages," he said. "Based upon early reports, we may not know much more before the end of today or early tomorrow."

"We encourage credit union policyholders that have sustained damage to contact CUNA Mutual Group's Property and Casualty Claims Disaster Team at 800-637-2676. The phone line is answered live by a claims staff person 24 x 7," Tschudy added.

The superstorm also cancelled activities. As of Tuesday, FlightAware, a flight tracking service, reported more than 15,000 flights were grounded Monday and Tuesday.  Closures and postponements of scheduled activities were the name of the game in many states. Although many credit unions and organizations' offices were closed Tuesday, staff often worked remotely, using cell phones and laptops to conduct business from home--if they weren't some of the eight million people hit by power outages.

The Credit Union National Association's Washington, D.C., office is open today, after being shut down when the federal government closed offices Monday and Tuesday to heed warnings about the weather's impact on transportation and flooding.

The storm also closed the office of the National Credit Union Administration (NCUA) Monday and Tuesday but didn't keep NCUA from activating its disaster relief policy and hotline at 800-755-1030, which is operating between 8 a.m. and 5 p.m. Monday through Friday. (See related story: NCUA activates disaster relief policy). It also announced that low-income credit unions can apply for grants to help them through the after effects of Sandy. (See related story: NCUA reminds LICUs of Urgent Needs support.) NCUA is open today.

In New York, the National Federation of Community Development Credit Unions was closed both Monday and Tuesday due to widespread power outages and flash flooding in the New York City area. The federation closed in accordance with its business continuity and disaster recovery plan. Its stationed staff can take calls on their cell phones, but the federation's phone system was down due to lack of electricity on Tuesday.  All federation staff can also be reached via e-mail using the staff directory. (See link to the directory).  New York City-based staff who are equipped and have power worked remotely and responded to member inquiries via email.

"The federation's offices will reopen as soon as the Office of Emergency Management lifts the emergency measures now in place and power and public transportation is restored," said the federation.

League offices were closed in New Jersey, New York, Maryland and District of Columbia, Pennsylvania, Connecticut, Massachusetts, Rhode Island and New Hampshire.  Maine league had operational staff available. Leagues in North Carolina, Virginia, West Virginia and Connecticut were open Tuesday. The Credit Union League of Connecticut postponed two seminars that had been set for yesterday.

The National Credit Union Foundation, which had scheduled a webinar with leagues and state foundations for yesterday afternoon about its new initiative, "Credit Unions Support Financial Education: Leading the Way to Financial Freedom," to raise awareness of financial education and raise funds for NCUF and state foundations, moved the webinar to next Tuesday, Nov. 6, at 2:30 p.m. CT.

Today will see more openings, but many credit unions still won't be able to assess just how damaging Sandy was to the industry.  That will take several days.

Sandy results in extended deadline for FCIF II grant applications

 Permanent link
CHICAGO (10/31/12)--Hurricane Sandy has affected the deadline for submitting grant proposals to the Financial Capability Innovation Fund II (FCIF II), presented by the Center for Financial Services Innovation (CFSI).

The deadline has been extended to Friday, Nov. 9, "to accommodate any potential applicants affected by Hurricane Sandy," the CFSI said in an e-mail. The original deadline was Nov. 2.

The National Credit Union Foundation (NCUF) has been encouraging credit unions to apply for the grants. NCUF said CFSI has more than $2.5 million available for financial and technical assistance grants to innovative nonprofit-led interventions designed to promote financial capability among low-income and underserved consumers.

Credit unions with 501(c)(3) affiliates can apply. Other credit unions can apply in partnership with a 501(c)(3) organization.

NCUF this year changed its funding strategy and is working with CFSI to find a single but significant project to fun that promotes financial capability among low-income consumers while making a significant impact to the credit union movement.

Inquiries can be sent to questions@cfsinnovation.com.

For more information, use the links.

Snow a big factor in W.Va. closures

 Permanent link
PARKERSBURG, W. Va., (10/31/12)--West Virginia credit unions escaped relatively unscathed from snowstorms resulting from Hurricane Sandy.

The West Virginia Credit Union League reported two credit union closures, after completing its survey of state credit unions.

Eastern Panhandle FCU, Martinsburg, W. Va., was closed Tuesday. Another credit union associated with a school system was closed because the system was closed, according to the Rich Schaffer, league vice president.

More than a foot of snow was reported in lower elevations of West Virginia, according to the National Weather Service. High elevations in the mountains were getting more than two feet, and a blizzard warning for parts of the state was in effect until Wednesday afternoon.

"We received a great deal of snow in the southern part of the state, but it has not had a great impact on credit unions," Schaffer said.

CUNA CUNA Mutual Ponzi scheme hitting members

 Permanent link
MADISON, Wis. (10/26/12)--The Credit Union National Association (CUNA) was instrumental in providing advance notice to credit unions of a Ponzi scheme that has victimized credit union members and involves losses of about $19.8 million so far to credit unions.

For the past two months, CUNA has participated in BITS Fraud Steering Committee ad hoc calls related to the scheme, which centers on North Carolina-based Rex Venture Group, doing business as Zeek Rewards and as penny auction site Zeekler.com. The Securities and Exchange Commission (SEC) shut down the group and its site on Aug. 17, saying that its securities offerings are not registered with the SEC as required under federal securities law.

In its complaint filed Aug. 17 with the U.S. District Court for the Western District of North Carolina Charlotte Division, SEC said the $600 million Ponzi scheme, on the verge of collapse, attracted more than one million online customers, including many credit union members, who were promised up to 50% of the company's daily net profits through a profit sharing system in which they would accumulate rewards points redeemable for cash payouts.

"Unbeknownst to its investors, ZeekRewards is, in reality a massive Ponzi and pyramid scheme," said SEC in its court filing.  "Approximately 98% of Zeek Rewards' total revenues, and correspondingly the purported share of 'net profits' paid to current investors, are comprised of funds from new investors," it said.

Other activity was discovered in money orders, cashier's checks, debit and credit cards and automated clearinghouse (ACH), with check amounts ranging from $10 to $10,000.  CUNA is receiving lists that identify credit unions impacted from Wells Fargo, the bank assisting the receiver in the case, and has been notifying the credit unions.

So far, more than 8,200 checks totaling $19.8 million have been issued by about 1,150 credit unions affected by the scheme. CUNA has sent more than 1,400 e-mails to about 700 identifiable credit unions with valid e-mail addresses whose members are affected by the Ponzi scheme.

CUNA also notified CUNA Mutual Group, which issued three Risk Alerts to its policyholders on Sept. 3, Sept. 14 and Oct. 7 and allowed CUNA to distribute the alerts to affected credit unions.

Many members who invested with Zeek Rewards heard about the SEC's action and have asked their credit unions to stop payment on cashier's checks they had submitted to ZeekRewards as investments.

CUNA Mutual's Risk Alerts warn that credit unions are at risk for wrong dishonor claims if they place a stop payment on cashier's, teller's and official checks without following the established procedures in the Uniform Commercial Code (UCC) regarding lost, destroyed or stolen cashier's checks, teller's checks or certified checks.

"Under UCC laws, financial institutions should not place stop payments on cashier's checks," said the Risk Alert for Sept. 13. "Doing so can result in potential liability to the financial institution for any losses suffered by holders in due course."  Checks that were sent to ZeekRewards are still being processed for payment as part of its receivership process. Credit unions should not place stop payments on these cashier's checks or certified checks.

In an Oct. 4 Risk Alert, CUNA Mutual said, "many credit unions improperly stopped payment on cashier's checks based on requests from members who invested in ZeekRewards." This "violates the court's order." The receiver is resubmitting the checks for payment. If payment is refused, the credit union may be required to pay the receiver's expenses and loss of interest from nonpayment of the items. It also may be liable for consequential damages and risk being held in contempt of the court's orders.

CUNA Mutual's advice: Pay the check. If a credit union has already dishonored the submitted cashier's check should consult with its legal counsel to determine an appropriate action.

Julie Esser, director of new alliances at CUNA Strategic Services and one of CUNA's staff liaisons with BITS, is receiving information from Wells Fargo that identifies credit unions that need notification, and is notifying credit unions as more information becomes available. Credit unions should tell members involved to monitor the receiver's website for updates. Use the link.

Coastal leagues assess Sandys impact

 Permanent link
HIGHTSTOWN, N.J., and NEW CASTLE, Del. (10/31/12)--The New Jersey and Delaware credit union leagues and their affiliated credit unions took a big hit from Hurricane Sandy Monday and are in the process of getting back on their feet.

Sandy made landfall at 8 p.m. Monday near Atlantic City, N.J., packing 80-mile-per-hour winds and causing massive flooding along the state's shoreline. More than 7.9 million homes and businesses were without power, from North Carolina to Maine.  

"The power is out all throughout the area, so the bulk of New Jersey credit unions are closed--obviously in the Shore area, South Jersey and also a lot of North Jersey," Paul Gentile, president/CEO of the New Jersey Credit Union League, told News Now Tuesday afternoon. "The key is to get the power back on."

State residents have been encouraged not to drive, so a lot of credit unions haven't seen their buildings since the storm hit, he added.

"We checked on the league building today," said Gentile. "The league building is fine; it's just powerless. So like most credit unions, we are operating in business continuity mode." 

The league doesn't have much information on damages yet, but all the New Jersey Shore towns are flooded with sand or water, Gentile added.  

The Delaware Credit Union League was open Tuesday, and most credit unions downstate were closed, while most credit unions upstate were open, Pat Mahaney, league president/CEO, told News Now.

The league and all Delaware credit unions were closed Monday because a state of emergency  was declared, said Alice Smith, director of the league's communications and governmental affair departments. About one-third of Delaware credit unions were open Tuesday and the rest closed, Smith told News Now.

There were no reports of any major problems as of Tuesday afternoon, and early reports seem to indicate Delaware has not sustained as much damage as some nearby states impacted by Hurricane Sandy, she added.

The Maryland and District of Columbia Credit Union Association was closed Tuesday because of weather conditions.

Chartway describes Sandys onslaught in Virginia

 Permanent link
VIRGINIA BEACH, Va. (10/31/12)--With branches along the East Coast, Chartway FCU, based in Virginia Beach, Va., was bound to feel the effects of Hurricane Sandy.

The hurricane made landfall at 8 p.m. Monday near Atlantic City, N.J., causing extensive flooding from record storm surges along the East Coast before moving inland.

The credit union closed its New Jersey branch in Newark Liberty International Airport Tuesday due to flooding. "We don't know the extent of the damage, because the branch employees could not get out of their neighborhoods [due to flooding in the area]," said Kim Little, Chartway FCU regional president.

On Monday, Chartway closed a branch in Norfolk, Va., because of flooding. The Norfolk area received heavy rain and winds. The branch reopened Tuesday, Little said.

Sandy has been less destructive than Hurricane Irene in the Virginia Beach, Va., area. Irene struck the East Coast in August 2011. "For us, this was much less of system, but we are farther south than some of the areas that have been hit harder," Little said. "Whatever happens the rest of the week we are ready to help our members wherever they are."

As it did when Irene struck, Chartway will extend assistance to its members affected by Sandy, Little said.

The credit union will "extend leniency and special considerations all-around," according to a statement it issued Monday. That assistance could include refinancing existing loans to reduce payments or terms and deferring loan payments.

"But it's much less of a formal system than a way of working with people to be sure they can get through whatever troubles they experience," Little said. "It's the values-based leadership that we use to run our credit union. It's people helping people, especially in times of crisis."

Costa Rican CUs gain tech insights from LSCU

 Permanent link
The trade association for Costa Rican credit unions (FEDEAC) recently hosted U.S. officials at its credit union leadership conference in Costa Rica. Representatives included, from left, Innovations FCU President/CEO David Southall, FEDEAC President/CEO Manuel Bolaños and World Council of Credit Unions President/CEO Brian Branch.
SAN JOSE, Costa Rica (10/31/12)--The trade association for Costa Rican credit unions, Federación de Cooperativas de Ahorro y Crédito de Costa Rica R.L. (FEDEAC), recently hosted U.S. credit union leaders at a conference on growing and uniting the Costa Rican credit union movement through greater cooperation and leadership development.

Credit union leaders from the League of Southeastern Credit Unions & Affiliates (LSCU) and World Council of Credit Unions (WOCCU) attended FEDEAC's annual credit union leadership conference in celebration of its 13th anniversary.  LSCU serves credit unions in Alabama and Florida.

Coordinated by WOCCU's International Partnerships Program, the visit was part of a series of collaborative activities that began in 2005 between FEDEAC and LSCU to promote credit union growth. At the conference, LSCU representatives presented on credit unions' use of technology to create greater efficiencies, improve security, enhance the member experience and attract new members--especially youth.

The LSCU delegation also visited several of FEDEAC's member credit unions, including Coopenae, Coopeande No. 1 R.L. and Coopeservidores. Additional meetings took place with the Costa Rican legislative assembly and national regulators to discuss credit union regulations and contributions to socioeconomic development.

"As we met with congressional leaders in Costa Rica, I was struck by the commonalities between our respective credit union movements," said Patrick La Pine, LSCU president/CEO. Increasingly, greater importance is being placed on advocacy efforts in defense of credit unions, highlighting the difference between credit unions and banks as financial institutions."

Patrick La Pine, president/ CEO of the League of Southeastern Credit Unions, spoke to the trade association for Costa Rican credit unions conference attendees about using technology to attract new credit union members. (Photos provided by the World Council of Credit Unions)
Joining La Pine on the visit was Innovations FCU President/CEO David Southall, an LSCU affiliate, who discussed innovative technological products and services, including the use of social media and dialogue tower banking, which incorporates new branch design elements to improve the member experience, attract youth and increase overall membership. Innovations is based in Panama City, Fla.

WOCCU President/CEO Brian Branch spoke at the conference about global credit union trends.

"Costa Rican credit unions have a large market penetration, with about one in five people in the country belonging to a credit union," Branch said. "FEDEAC, our member organization in Costa Rica, is looking at ways to unite and grow the system through greater collaboration. Patrick and David had excellent experiences to share from both a league perspective and through Innovations FCU's use of technology to operate more efficiently and to reach a younger demographic."

Victor Miguel Corro, WOCCU vice president of the Worldwide Foundation for Credit Unions, coordinated and joined U.S. representatives on the visit. FEDEAC President/CEO Manuel Bolaños hosted the visit.

There are 66 active credit unions in Costa Rica serving 611,182 members.

For more information, use the link.

Off-duty officer shot in head at CUs ATM

 Permanent link
ESCONDIDO, Calif. (10/31/12)--An off-duty San Diego police officer is expected to survive after he was shot in the head while conducting a transaction as a San Diego credit union ATM Monday.

The 57-year-old officer was shot shortly after noon Monday in the San Diego suburb of Escondido (Main News Oct. 30). The assailant, described as a stocky Latino man wearing a baseball cap with "police" on it, is believed to have escaped with the officer's wallet, cell phone and an undisclosed amount of money, according to Escondido police.

Police say the officer, whose name was not released, is hospitalized in good condition. The bullet appears to have grazed his skull. The officer is a 27-year veteran of the San Diego police force.

Police are investigating whether the gunman was involved in two other armed robberies Monday.

Theresa Halleck, president and chief operating officer of San Diego County CU, praised her employees for quickly locking the branch door and calling for emergency help.

A shooting in broad daylight is an unusual occurrence, Halleck told Main News.

Kansas CUs continue strong growth

 Permanent link
WICHITA, Kan. (10/31/12)--Kansas credit unions reported year-over-year loan growth of 7.2% for the second quarter, compared with the same period in 2011, according to the Kansas Credit Union Association.

By comparison, nationally loans grew 3.1% at credit unions during the same period.

Used auto loans increased 9.3% at Kansas credit unions for the period.

Delinquencies were at 0.78%, compared with a national credit union average of 1.21%

In the year since Bank Transfer Day, credit unions in Kansas have seen the effects of the national movement, according to data from the National Credit Union Administration and the Credit Union National Association.

New share draft accounts showed significant growth in Kansas. In June, credit unions in Kansas reported 15,859 share draft/checking accounts, a 7.8% increase from the same period a year earlier, and beating the record set in 2005 by 400 accounts.

"Our loan growth, coupled with the high number of share draft accounts could indicate that Kansas consumers are noticing credit unions as an option for their primary financial institution," said Janeen Smalley, KCUA's vice president of member and strategic services.

Kansas credit unions added nearly 7,500 new members, a growth rate of 1.2%.

Storm statistics Largest Atlantic hurricane ever

 Permanent link
MADISON, Wis. (10/30/12)--Sandy, dubbed "Frankenstorm,"  "Superstorm, " "Hybrid" Hurricane and "historic," lived up to its billing Monday, breaking records and making history.

CUNA Strategic Services provider Agility Recovery  helped collect some statistics Monday about what is now being called Superstorm Sandy.

  • The hurricane has become the largest tropical system recorded in the Atlantic, with tropical storm-force winds spread over 1,000 miles wide.
  • It was predicted to affect more than 60 million people or one-fifth of the U.S. population.
  • As of 1 p.m. Monday, more than 10,000 flights worldwide had been cancelled because of the storm.
  • Utility companies at 2 p.m. ET Monday said about 116,000 households in seven states are without power. (Editor's note: the figure later was three million people without power outages so far.)
  • Before reaching shore, maximum sustained winds increased to 90 miles per hour with gusts of 115 mph. When it hit the shoreline, winds were clocked at 80 mph in New Jersey and 86 mph in Rhode Island.
  • New York's Battery Park saw up to 13.88 feet water surge Monday--a record. The storm's corrosive salt water flooded the subway system in New York, which has 600 miles of subway.
  • The storm closed the New York Stock Exchange in the first unplanned closure since the terrorist attacks on Sept. 11, 2001.

Sandy packing a wallop--CUs leagues hunkering down

 Permanent link
MADISON, Wis.  (10/30/12)--Credit unions and leagues, along with the rest of the East Coast from North Carolina to New England, hunkered down Monday and waited as Hurricane Sandy, the largest recorded hurricane in the Atlantic Ocean's history, delivered its wallop into the region.

Sandy made landfall at 8 p.m. Monday, hitting the southern coast of New Jersey with winds slowing slightly to 80 miles per hour, according to the National Hurricane Center (MarketWatch Oct. 29).  The center had just downgraded Sandy to a post-tropical cyclone but the storm still posed "grave danger" for the coast as it converged into two other weather fronts to create snow, wind and rain over an area that stretched 900 to 1,000 miles inland. (See related story on Sandy's historic statistics).  Earlier in the day Sandy was clocking 90 mph winds with gusts of 115 mph.

The storm closed transportation and highways in a number of cities. In Washington, D.C., the federal government's offices, several credit union organizations and credit unions were closed Monday and remain closed today. These include the National Credit Union Administration and the Credit Union National Association's  (CUNA's) Washington, D.C. offices. Many D.C. staffers were working remotely--when their power allowed them. Several NCUA and CUNA staffers reported power problems. CUNA's Madison, Wis., offices remained open.

NCUA and CUNA Mutual Group had issued alerts Friday, with CUNA Mutual activating its disaster response team. The National Credit Union Foundation told the leagues Monday that its CUaid disaster relief program stands ready to provide assistance to credit unions, their employees, volunteers and members.  But for the most part, it was too early to tell how much damage credit unions will see as a result of the superstorm.

In New York City, the National Federation of Community Development Credit Unions announced it was closed. The New York Stock Exchange was closed Monday and today--for the first time since Sept. 11, 2001. Municipal CU and Bethpage FCU announced closures Monday.

CUNA Strategic Services provider Agility Recovery, a business continuity company, said Monday it was responding to 16 disaster declarations and more than 750 of its member locations were on alert. Among those were 11 credit unions on "alert" and one credit union that had declared an emergency Monday. This was before the storm came ashore and flooded Atlantic City and New York City, among others.

As the weather moved in Monday, News Now staff contacted several leagues along the coast to learn many leagues and credit unions were closing. 

New Jersey Gov. Chris Christie ordered the evacuation of the Barrier Islands by 4 p.m. Sunday. Gaming was halted at 3 p.m. Sunday in Atlantic City's 12 casinos.

"We're starting to see some power outages," Paul Gentile, New Jersey Credit Union League president/CEO, told News Now at mid-day. "We're really expecting the big hit to come tonight. There is a lot of rain and blowing wind right now that I can see out my window.  I've seen some pictures of the Jersey shore and there is a lot of flooding. The main roads are under water." 

The bulk of New Jersey credit unions were closed Monday, Gentile added. "We're monitoring the situation. The league will definitely be closed Tuesday.

The Delaware Credit Union League was closed Monday.  The Maryland and District of Columbia Credit Union Association was still open as of mid-day Monday.

The Virginia Credit Union League was still open Monday. However, Chartway FCU closed some branches in the tidewater area, the league said. The league is monitoring the condition of roads, said Lewis Wood, league director of public relations and publications.  He noted reports of isolated flooding and one tunnel closing.

The office of the Credit Union Association of New York was open Monday and most state credit unions were open, according to Bonnie Sklar, public relations coordinator for the association. Bethpage FCU, Bethpage, N.Y. had closed all of its offices. Most of New York state was expecting rain and high winds on Monday, according to the Weather Channel.

"Right now we are waiting and watching," Sklar told News Now Monday. "We are letting our credit unions know we are here for them, and working from that point."

North Carolina Credit Union League offices in Greensboro and Raleigh were open Monday. "We continue to monitor the situation very closely," said Jeff Hardin, director of communications for the league. The eastern coast of North Carolina was expecting rain and winds gusting to 37 miles per hour on Monday, according to the Weather Channel.

Farther inland, states were preparing for other kinds of weather.

The Pennsylvania Credit Union Association closed yesterday and today as the governor and the mayor of Harrisburg declared weather emergencies. PCUA said many credit unions in the state were closed Monday and will be today.

The West Virginia Credit Union League, located in the eastern part of the state, was open on Monday. The National Weather Service was forecasting snowfall of between two and three feet at the higher elevations along the Appalachian Mountains in West Virginia, and lower accumulations across hilly swaths of southwestern Virginia and western Maryland. No reported closings of West Virginia CUs. By 10 p.m. some areas already had received nearly two feet of snow.

"Whoever thought you would hear the words 'snow' and 'hurricane' together," said Rich Schaffer, senior vice president of the league. "It's a strange turn of events to say the least. We just hope it won't cause too much disruption."

Catalyst FirstCorp consolidation a path for the future

 Permanent link
PLANO, Texas (10/30/12)--Catalyst Corporate FCU announced Monday the successful consolidation through purchase and assumption (P&A) of First Corporate CU--a combination first publicized by the two corporates less than six months ago.

Although some payments processing activity, including automated clearinghouse (ACH) and share draft services, was converted earlier, Monday marked the full transition of all products, services and accounts to Catalyst for 42 of the 48 former FirstCorp members. This number of new capitalizing members exceeded the expectation laid out in the original business plan.

The consolidation was characterized by creative solutions to issues stemming from the 2008 financial market meltdown –issues that still affect many corporates today. One of these is the loss of access to U.S. Central Bridge Corporate services, which have been winding down throughout 2012.

"Right out of the gate, we had several key challenges to address," said Catalyst President/CEO Kathy Garner. "The first of these was to convert FirstCorp's members to Catalyst's ACH solutions quickly, given the impending discontinuation of U.S. Central's APEX-ACH," she said. The ACH conversions began within weeks of the initial consolidation announcement.

Catalyst's team has navigated three such events in just under 14 months, beginning with the Southwest Bridge Corporate FCU/Georgia Corporate FCU consolidation in September 2011 and then acquisition of Western Bridge Corporate FCU on July 2.

"In the case of the FirstCorp consolidation, the most challenging operational element may have been the compressed time line," said Garner. "There are always bumps in the road during the integration planning process. Regardless of what we encountered, Catalyst was committed to moving ahead in a manner that was least disruptive to FirstCorp members, which meant creative thinking and some extra legwork upfront."

The P&A's structure of this purchase and assumption was a first for corporates and could be a useful model for future corporate consolidations, said Garner.  The transaction allowed Catalyst to choose which FirstCorp assets to acquire, rather than assuming all assets, liabilities and capital as in a merger.

"It was necessary to develop a plan that would insulate Catalyst's membership from risks posed by the legacy assets on the FirstCorp balance sheet. Taking on any risk was not an acceptable outcome for us," said Garner.

The solution: Retain FirstCorp's existing state charter without federal insurance, where legacy assets can remain until maturity or an appropriate opportunity to sell--such as when the market value of the assets is more in-line with the long-term economic value of the expected cash flows.  The continuing charter is directed through a management agreement with Catalyst Corporate and does not provide for accepting deposits or offering corporate services. Its only assets are a modest portfolio of investments that carry unrealized losses and FirstCorp's contributed capital and retained earnings. The charter is expected to continue for up to seven years, by which time most of FirstCorp's legacy assets will have matured or paid down substantially.

FirstCorp's capital balances going into the consolidation included remaining membership capital accounts (MCAs) that were not depleted when the corporate's own U.S. Central MCAs were eliminated in 2009, as well as new capital in the form of Perpetual Contributed Capital (PCC) and Nonperpetual Capital Accounts (NCA)--the latter two types having been raised from FirstCorp members in 2011.

"It was critical that the capital our members had recently entrusted to FirstCorp be protected in any business plan we put forward," said David Doss, FirstCorp board chairman and president/CEO of  Phoenix-based Arizona State CU. "Credit unions making a new capital investment in FirstCorp did so with the intention of supporting a cooperative solution that would provide them with the services they need. The board of FirstCorp believed that the best way to realize that vision was to partner with a larger corporate that had sufficient scale to operate efficiently while independent of U.S. Central--and to do so well into the future."

The two corporates created a mutually beneficial business plan and demonstratedthe ability to provide undisrupted service to FirstCorp's members. "Catalyst already had many of the pieces in place to sustain a successful operation well into the future," said Doss. "The corporate had a strong capital position before the end of 2011, had established an overnight sweep option to manage the size of its balance sheet, and offered a full range of competitively priced products and services."

"No blueprint existed for this type of plan, and all stakeholders--including state and federal regulators--worked closely together to perfect many, many details," said Garner.

Doss gives a lot of credit to outside parties for support as well, including the National Credit Union Administration and the Arizona Department of Financial Institutions.

The efforts, Doss and Garner said, have laid the groundwork for other creative solutions to challenges that many corporates face.  "In order to achieve regulatory capital and retained earnings requirements, corporates have to consider unusual approaches to managing legacy assets and tapping into scale," said Doss. "I predict that additional corporates will be looking for partners. If legacy assets are involved, this type of transaction can be an excellent solution," he said.

New England CUs prepare to be next

 Permanent link
MADISON, Wis. (10/30/12)--New England credit unions and leagues began closing yesterday afternoon as weather began moving in from Hurricane Sandy, the largest recorded hurricane in the Atlantic Ocean in history.

The Maine Credit Union League and its subsidiary, Synergent, said Monday afternoon their Incident Management Team has closely monitored Sandy's track the past several days and has taken precautions and measures in anticipation of the potential impact on operations.

With high winds and heavy rain arriving in Maine Monday, the league and Synergent announced that its facility will be staffed overnight by members of the Operations, Facilities and Incident Management Teams to monitor the facility and systems for storm impact.

The Service Center is equipped with a fully redundant power generation systems, both diesel and natural gas, and can operate independently of street power indefinitely, said the league.

The team met early Monday morning and "outlined a series of step it was implementing to maintain adequate service to all of our credit unions, and to insure the safety of our employees," said Maine league President/CEO John Murphy. "We spend a significant amount of time and resources on business continuity planning so we are well-positioned and prepared to deal with these types of scenarios, and will make modifications and provisions as necessary."

The Massachusetts Credit Union League, Credit Union Association of Rhode Island and the New Hampshire Credit Union League closed at noon Monday, although credit unions in those states could contact league staff via e-mail.  On the leagues' websites, the league noted that "due to the extreme weather we are experiencing, the league is having interrupted service with the telephone lines. The 800 number service was unavailable at that time, but the office could be reached at its regular number and via e-mail. Credit unions in the states also were losing early Monday. Most credit unions in the state are not along the low-lying shore line.

In Connecticut, Gov. Dannel P. Malloy, concerned about wind gusts exceeding 50 mph, ordered a statewide truck ban and closed all state highways Monday. The Credit Union League of Connecticut as well as many of the state's credit unions were closed Monday and are staying closed Today. The league's website said that its Compliance School session on Bankruptcy and Collections scheduled for today and Wednesday's Supervisor Skills session have been postponed due to the weather, and that it would send notification when they are rescheduled. As of 6 p.m., more than 360,000 people in Connecticut were already without power, according to The New York Times blogs (Oct. 29).

Most members give CUs high marks on technology

 Permanent link
BOSTON (10/30/12)--Most credit union members believe that their credit union is doing a great job of providing innovative technology, according to a recent survey of online banking customers conducted by Chadwick Martin Bailey.

Sixty percent of members give their credit unions high marks on technology, compared with 49% of customers at large national banks and 36% of regional bank customers (eMarketer Oct. 29).

By providing access to mobile and online banking, credit unions appear to have found a way to keep members happy, the survey indicated. About half of credit union members surveyed said banking convenience to them meant having the ability to take advantage of good online services. Also, having a branch located near their home or workplace was not as important to credit union members as it was to both regional and large national bank customers, the survey indicated.   

The percentage of U.S. members/customers who think access to their online and mobile banking services is excellent are:

  • Credit unions--85%;
  • Large national banks--66%;
  • Regional banks--53%;
  • Community banks---55%; and
  • Total--66%.
In terms of being most likely to take advantage of online banking, 73% of credit union members responded positively. Large national bank customers were second with 70%, followed by regional bank customers at 50%.

Moodys may downgrade Canadas five largest FIs

 Permanent link
NEW YORK (10/30/12)--Moody's Investors Service may downgrade its long-term debt ratings for the five biggest Canadian banks.

The affected banks are:

  • Bank of Montreal;
  • Bank of Nova Scotia;
  • Canadian Imperial Bank of Commerce;
  • National Bank of Canada; and
  • Toronto-Dominion Bank.
Also subject to a downgrade is Caisse Centrale Desjardins in Quebec, Canada's largest association of credit unions (gulf-daily-news.com and The Globe and Mail Oct. 26). 

The downgrade could be made because of concerns involving consumer debt levels, housing prices, macro-economic risk, and the load of their capital-markets divisions within their business mix, said The Globe and Mail.   

In recent months, Canadian consumer debt has increased to record highs, with the household debt-to-income ratio jumping to 163.4% in the second quarter from 161.8% in the first quarter, said gulf-daily-news.com.  

Also, the Canadian housing market seems to be losing steam after several years of big gains, said the publication.

Texas chapters campaign Banks make dollars not sense

 Permanent link
FORT WORTH, Texas (10/30/12)--Nineteen Texas credit unions from the Houston and Galveston Chapters of Credit Unions worked together to launch a new cooperative initiative just in time for International Credit Union (ICU) Day, which was Oct. 18.

"Banks make dollars, not sense" was the theme of the cooperative campaign developed by Kearley & Co., a strategic marketing and branding firm that has worked with credit unions for more than 30 years. The campaign included a mix of social and traditional media. Billboards, T-shirts, Web and print ads combined with Facebook and Twitter to drive consumers to the new CreditUnionSense.com website, which offered information about the credit union difference and how to join a credit union.

The campaign also offered a week-long series of events that demonstrated local credit unions' commitment to financial literacy and community service. Two educational webinars were held Oct. 17, along with in-person youth activities, community food drives, and a "Financial Safety & Security Shred Day" at eight locations during that week.

"Many consumers still don't understand what a credit union is or realize that they can be a member, so we developed the Credit Unions Make $ense cooperative campaign to engage consumers in a non-traditional way," said Elisa Rode, Kearley & Co. president.

The CreditUnionSense.com microsite as well as the Facebook and Twitter portals saw significant traffic during ICU week, and participating credit unions expect that will translate into increased membership in their communities in the coming months, according to analytics reporting.

2012 CUNA ELLy Training Awards announced

 Permanent link
MADISON, Wis. (10/30/12)--The Credit Union National Association (CUNA) recognized 12 credit unions for their outstanding credit union training programs and training professionals at this year's CUNA ELLy Training Awards, held at CUNA Experience Learning Live!, Sept. 30-Oct. 3 in Denver.

The ELLy Training Awards are the only national awards presented to credit union trainers that recognize excellence in professional staff development.

Awards go to credit union professionals from two asset divisions--less than and greater than $250 million. First-place awards and awards of merit were presented in the following categories:

The Chi Phi Delta Award represents the best development of a Credit Union University, and its effect on staff learning and performance, using CUNA's Center for Professional Development products as the foundation. First Place went to Terrance Shelton, Golden 1 CU, Sacramento, Calif.

The eLearning Award award is presented to participants who demonstrate how their use of technology-based training has enhanced their credit union training initiatives.

First place award went to Summit CU Learning & Organizational Development of Summit CU, Madison, Wis., and Award of Merit went to Eastman CU Learning Resource Center of Eastman CU, Kingsport, Tenn.

The Training Champion Award recognizes senior management staff members who go beyond the call of duty to support and develop their credit union's training program.

  • Award of Merit, more than $250 million in assets: Kevin Hartz of Community First CU, Appleton, Wis., and
  • Award of Merit, less than $250 million in assets: John Buckley, Lori Cregg, Phil Archer, Ken Craigie, Ellen Davis and Jessica Broad, Gerber FCU, Fremont, Mich.
The Training Professional of the Year Award honors exceptional achievements in performance and learning by a credit union training professional or department. First place went to GESA Training & Education Department of GESA CU, Richland, Wash., and Award of Merit to BHFCU Training of Black Hills FCU, Rapid, City, S.D.

WOW Award is presented to the credit union with the best overall training curriculum or best training event that energizes, empowers and excites participants.

  • First place, more than $250 million in assets: Community First CU;
  • First place, more than $250 million in assets: Warren FCU Training Team of Warren FCU, Cheyenne, Wyo.;
  • Award of Merit, more than $250 million in assets: Alisha McLaughlin and Sarah Fraley-Russell of Empower FCU,  Syracuse, N.Y.;
  • Award of Merit, more than $250 million in assets: Training/human resources Department of Solarity CU, Yakima, Wash.; and
  • Award of Merit, less than $250 million in assets: Susan Sierno of Plus 4 CU, Houston.

Disaster plans ready for Frankenstorm Sandy

 Permanent link
MADISON, Wis. (10/29/12)--Perfect storm, Frankenstorm, or not, Hurricane Sandy is so big that just about everyone along the East Coast--and states inland for 800 miles as well--will see an impact as Sandy collides with two other storm fronts today and Tuesday. Credit unions and leagues are prepared for long-endurance power outages, flooding, and damages from high sustained winds, as well as snowfall and closures.

The Category 1 (75 mph winds) hurricane threatens 60 million people in an area 800 miles wide. It is less about strength than longevity and the unusual situation of its pending collision with a cold front from the Northwest and a high pressure system from Greenland in what forecasters believe could be "the perfect storm" over a wide area in a densely populated area (The New York Times Oct. 28).

Governors of states from North Carolina to Connecticut have declared states of emergency for the storm, ordering tens of thousands of residents to evacuate (The Wall Street Journal Oct. 28).

On Friday, CUNA Mutual Group activated its claims disaster team and the National Credit Union Administration issued warnings to take precautions for the Category 1 hurricane.

"In preparation for Hurricane Sandy, CUNA Mutual Group's Property and Casualty (P&C) Claims Disaster Team has been activated and will monitor the storm over the weekend," CUNA Mutual told News Now Friday.

"Our staff will be contacting the credit union leagues in New York, New Jersey, Delaware, Pennsylvania, Maryland, District of Columbia, North Carolina and Virginia to advise them CUNA Mutual Group is concerned with the impact Sandy may have on their credit unions," said Philip Tschudy, media relations manager for CUNA Mutual Group.

"We will provide them with the names and contact information for our P&C claims staff members who will be ready to assist them. We will also ask they notify us of credit unions that have been or may be impacted by Sandy. As always, credit unions can reach CUNA Mutual Group's toll-free disaster hotline at 800-637-2676. The phone line is answered live by a claims staff person 24/7," he said.

At least two leagues--Pennsylvania and New Jersey--included the names of CUNA Mutual's team in their member newsletters Friday. CUNA Mutual's disaster relief team can be reached at 800-356-2644 at these extensions:

  • Michael McKinley, ext. 6656737;
  • Jim Voosberg, ext. 6658961
  • Barb Nemec, ext. 6656644;
  • Rose Motelet, ext. 6658490; and
  • Mike Retelle, ext. 6657618.
The National Credit Union Administration also issued a statement to credit unions late Friday afternoon urging credit unions to be prepared. (See related News Now story: "NCUA alerts CUs to prepare as Sandy approaches.")

The Pennsylvania Credit Union Association (PCUA) reported to its credit unions Sunday evening that PCUA's offices will be closed today. "Due to Hurricane Sandy, Gov. [Tom] Corbett and Harrisburg City Mayor [Linda D.]  Thompson  have declared state of emergencies," PCUA explained. PCUA provided emergency assistance numbers for account executives, compliance, and cards staff. "Non-emergency calls can be left on the appropriate staff person's voice mail for them to return the call the next available business day," said PCUA.

The Credit Union National Association's Washington, D.C., office is located in the area projected to be impacted. Sunday's weather alerts for nearby Arlington, Va., projected heavy rain and damaging winds to begin late Sunday night with the peak of the storm hitting the area this morning through Tuesday morning. That area was expecting between five and 10 inches of rain; possible localized flooding on area streets, low-lying areas, creeks and streams; and sustained north winds of 35 to 45 mph with gusts up to 60 mph late last night through Tuesday.

"With a prolonged 24- to 36-hour high wind event coupled with heavy rain, the region can expect significant tree damage. Residents, businesses and visitors should plan for widespread power outages as a result," said the High Wind Watch issued Sunday morning by the National Weather Service.

As of early Sunday evening, Hurricane Sandy was doing exactly what weather forecasters predicted, battering Cape Hatteras, N.C. , and Nag's Head, N.C., some 575 miles from New York City, and producing 14-foot waves in Wilmington, N.C., even though the hurricane's eye was 250 miles out to sea, said the Weather Channel and the Journal. In reporting from Nag's Head, Julie Martin of the Weather Channel said that "this is a long-duration event. We've experienced tropical storm winds for 17 hours so far and it has been unrelenting." She added there has been half a foot of "hard, stinging rains." 

Sandy is expected to come ashore in the New Jersey late today or early Tuesday. Areas such as Delaware, New Jersey and New York and Connecticut, are expecting a foot of rain and 75 mph winds as well as a four- to eight-foot tidal surge along the shoreline.

Inland states also are also being affected. Thirty-three counties in four states--West Virginia, Virginia, Tennessee and North Carolina--were under a winter storm watch and already experiencing what is expected to become two feet or more of snow from the cold front moving from the Northwest.

Hurricane Sandy is historic, said the Hurricane Weather Center in Miami, Fla., because of its projected size, expected duration, and impact on affect one fourth of the nation. Even if didn't hit with the impact expected, it still will have created havoc in terms of evacuation orders, transportation shutdowns, and closures of business, including credit unions. And it will affect more than the area's economy.

Other key announcements:

  • New York Mayor Michael Bloomberg on Sunday ordered the evacuation of lower Manhattan and other low-lying neighborhoods. New York subways, buses and trains stopped running at 7 p.m. Sunday and the schools are closed today, affecting the city's 1.1 million students, said the Journal.  New York Gov. Andrew Cuomo said the current plan is to shut down transit until Wednesday, with transit resuming about 12 hours after Sandy passes the city (Reuters.com Oct. 28).
  • The New York Stock Exchange and the New York Merchantile Exchange shut their trading floors today and will remain closed until given the all-clear. However, trading would continue online throughout the storm, they said.
  • New Jersey Gov. Chris Christie shut down Atlantic City's 12 casinos and warned of a potential shutdown of the New Jersey Transit System, said the Journal and Reuters.  The Virginia National Guard was authorized to call up 500 troops for debris removal and clearing roads, said the Journal.
  • On Sunday, more than 3,000 U.S. flights were cancelled, with 2,500 more flights expected to be cancelled today. Oil refineries were debating Sunday whether to shut down six East Coast refineries--1.19 million barrels a day or 7% of total U.S. capacity (Reuters.com).
Last week, Hurricane Sandy killed at least 65 people in the Caribbean--Jamaica, Haiti, Cuba and the Bahamas.

Deadline for CFSI proposals is Friday

 Permanent link
MADISON, Wis. (10/29/12)--Friday is the deadline for credit unions to submit grant proposals to the Financial Capability Innovation Fund II (FCIF II), an initiative led by the Center for Financial Services Innovation (CFSI).

According to the National Credit Union Foundation (NCUF), more than $2.5 million of grant funding is available for financial and technical assistance to innovative nonprofit-led interventions designed to promote financial capability among low-income and underserved consumers.

NCUF is working with CFSI to find and fund one significant project that promotes financial capability among low-income consumers while making a significant impact to the credit union movement.

NCUF is encouraging credit unions with 501 (c)(3) affiliates to apply and other credit unions to apply in partnership with a 501 (c)(3) organization. Grant applicants should send proposals to CFSI, not NCUF.  Inquiries can be sent to questions@cfsinnovation.com.

For more information, use the links.

CU System briefs (10/26/2012)

 Permanent link
  • HARRISBURG, Pa. (10/29/12)--Lancaster (Pa.) Red Rose CU recently hosted a meet and greet with U.S. Rep. Joe Pitts (R-Pa.) to allow credit unions the opportunity to thank him for supporting member business lending (H.R. 1418), exam fairness (H.R. 3416) and ATM disclosure (H.R. 4367) legislation. Pitts (center) discussed the lame duck session and the upcoming election, as well as overregulation from healthcare reform to the Dodd-Frank Act, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Oct. 26). Also attending were representatives of PSECU, Wheatland FCU, Members 1st FCU and Citadel FCU, and PCUA Vice President, Governmental Affairs Christina Mihalik. (Photo provided by the Pennsylvania Credit Union Association) …
  • EAU CLAIRE, Wis. (10/29/12)--Visa has presented Eau Claire, Wis.-based Royal CU with its 2011 Global Service Quality Performance Award for Highest Domestic Approval Rate, Debit Consumer. The award is giving to issuers with the highest approval rates for transactions in which the issuer and the merchant are in the same country. RCU's winning domestic approval rate was 98.1% …
  • CLARKSVILLE, Tenn. (10/29/12)--The Fort Campbell FCU's Board of Directors has named Tom Kane as the Clarksville, Tenn.-based credit union's new president/CEO. The appointment was effective Oct. 15. Kane held the position of CEO earlier at the credit union from 2005 to 2007. He has been involved in the credit union movement for more than 25 years, including serving as a chief operations officer/CEO for more than 16 years, said the credit union. Maria McKee served as interim CEO after former President/CEO Stewart Ramsey left the credit union in mid-July. Fort Campbell FCU has nearly $443 million in assets, nine branches, 47,064 members and 188 employees …

National banks see 10 hike in phish attacks

 Permanent link
BEDFORD, Mass. (10/29/12)--The most recent findings from RSA's Monthly Online Fraud Report indicate there was a 10% jump in phishing attacks at U.S. national banks in September. National banks were targeted in 77% of phish attacks.

The October report's thrust involves an examination of phishing in the world of social networking. RSA estimates that phishing has cost organizations more than $2.1 billion in potential losses over the past 18 months, and the ever-expanding number of users on social networks make them a prime spot for phishers.

Why? An essential component for successful phishing attacks is already built-in to social media: trust. The report explains how phishers leverage this trust to hijack accounts, poison links in commentary and more.

"Just four years ago, slightly more than 20% of U.S. citizens were users of social networks," the report said. "That number has since more than doubled and stands at around 50% today. Facebook membership alone has increased nearly 10 times since 2008 and Twitter shows that membership has increased by a factor of five over the same period.

"With the world turning into a smaller and more 'social' village, fraudsters and blackhats are certain to join the party," the report continued. "Cybercrime follows the money, and as user behavior shifts, fraudsters have been following their target audience (potential victims) to the virtual world's hot spots. According to a research study by Microsoft, phishing via social networks in early 2010 was only used in 8.3% of all attacks--by the end of 2011 that number stood at 84.5% of attacks delivered through social media."

Other highlights of the report include:

  • Credit unions were targeted in 9% of phishing attacks in September, down from 11% during each of the previous two months;
  • Phishing attacks decreased 28% in September, with 35,440 attacks identified by RSA. The bulk of the decrease stems from fewer phishing campaigns launched against European financial institutions, which have accounted for large spikes in recent months.
  • Despite a 22% decline in attacks, the United Kingdom (U.K.) continues to be the country that has endured the highest volume of phishing--for the seventh consecutive month.
  • The top five countries whose brands were targeted most by phishing in September are the U.S., U.K., Australia, India and Brazil.
To read the report, use the link.

Federation supports NCUAs low-income designation effort

 Permanent link
NEW YORK (10/29/12)--The National Federation of Community Development Credit Unions is applauding the recent National Credit Union Administration (NCUA) decision to expedite and pre-approve low-income designation (LID) for credit unions.

The NCUA initiative has expanded the number of LID credit unions to 1,874, up from 1,169 in June--an increase of more than 60%.

"Bringing safe and affordable credit union services to these markets will yield significant impact in helping to build financially healthy and sustainable communities," said Cathie Mahon, CEO of the federation. "This significant expansion of LID credit unions also underscores the opportunities the growing number of unbanked and under-banked consumers represent for the future and relevance of the credit union system."

So far, 676 of the 1,003 credit unions that were informed by NCUA about their eligibility have accepted the designation. As a group, the newly low-income-designated credit unions serve more than 12 million members and have more than $105 billion in combined assets.

The federation partnered with the Credit Union National Association (CUNA), state leagues and other credit union organizations to encourage credit unions to accept the designation.

"Roughly a third of the credit union system might become low-income designated, which recognizes the critical role credit unions play in bringing affordable and equitable financial services to those who need them the most," said Pablo DeFilippi, associate director at the Federation.

"The NCUA board clearly understands the pressing need for expanded authority in credit union member business lending to help spur the economy, and to give credit unions more flexibility to match their growth with supplemental capital," Bill Cheney, CUNA president/CEO said of the NCUA initiative earlier this month.

NCUA board chair Debbie Matz said that "rather than waiting for credit unions to complete the required paperwork to become a low-income credit union, the NCUA contacted 1,003 credit unions alerting them of their eligibility."

Moments of Truth topic of CUNA MandBD Council paper

 Permanent link
MADISON, Wis. (10/29/12)--Credit unions that have experienced consistent growth have mastered the skill of human interaction, according to a new white paper from the CUNA Marketing & Business Development Council.

"Where we uncovered strong membership growth, we also observed high staff interaction with select employee groups and communities to drive that growth," said the paper, titled "Moments of Truth." "Where we found robust lending growth, we also located accelerated one-on-one sales efforts with people like realtors, retailers, and dealers. And where we discovered strong market penetration, we also observed consistent and dedicated community involvement. In essence, whenever the events took place, there was a demonstration of consistent and strong passion for human interaction."

The paper condenses human interaction down to three principles--service, selling and socializing--that led the credit unions to outperform their peers, their competitors and the industry.

In compiling the report, the Texas Credit Union League examined the financials and ratio reports of every credit union in Texas, isolating those whose performances were significantly higher than the average, the median, and peer comparisons. The league then conducted in-depth discussions with more than two dozen credit unions exhibiting either stronger membership growth or stronger loan growth than the rest of Texas credit unions.

"The conclusions we reached were not profound," the report said. "In fact, they seem basic and simplistic. Yet, because they seem simplistic, the actions may be overlooked or assumed. What we discovered were credit union management teams who placed such extreme emphasis on the business basics that they were almost fanatical (in a good way)."

The paper is available in the CUNA Councils' white papers section of the Credit Union National Association's website. Use the link.

iBelong production wraps up

 Permanent link
HARRISBURG, Pa. (10/29/12)--Pennsylvania's iBelong campaign wrapped up shooting for a new series of television commercials last week. The Pennsylvania Credit Union Association's (PCUA) service corporation, Pacul Services Inc., provided $160,000 to fund the new spots.

Matthew Feld gets ready to talk about a credit union loan for his catering business as part of a new iBelong creative campaign for television commercials. (Photo provided by the Pennsylvania Credit Union Association)
The iBelong campaign is a cooperative campaign designed to build awareness of credit unions and to assist consumers in finding a credit union that's right for them. The campaign originated with support from credit unions affiliated with PCUA. The campaign is also supported by credit unions in Kentucky, Illinois, Indiana, Mississippi and Vermont.

The three spots all have a lending theme, telling a story about how a member was helped by a credit union loan. "While the new spots will continue to build awareness of credit unions, we wanted to position credit unions as the best place in the marketplace to obtain a loan," said PCUA Chairman Michael Kaczenski (Life is a Highway Oct. 26).

The new spots will premier to member credit unions through regional meetings beginning Nov. 29. The spots are slated to air throughout 2013.

"We've been fortunate to continue to work with Jim McGorman as director, as well as director of photography Richard Henkels, who collaborated together on our 2010 creative," said PCUA Senior Vice President Mike Wishnow. "The new spots will be telling personal credit union experiences through striking imagery."

LSCU cooperative image campaign doubles awareness

 Permanent link
BIRMINGHAM, Ala. and TALLAHASSEE, Fla. (10/29/12)--A cooperative image campaign has helped Alabama and Florida credit unions improve the public's awareness of credit unions to 50% in August from 23% in Sept. 2011, said the League of Southeastern Credit Unions (LSCU).

During this same time, Alabama and Florida credit unions have collectively gained 195,000 new members and $3.6 billion in assets.

Click to view larger image Click for larger
The growth began when the LSCU Cooperative Image Campaign debuted across both states, said the league. The campaign includes two waves of the advertising message, "Credit Unions: we're giving banking a better name."

"Our research shows that the image campaign message gets consumers' attention, and it's persuasive," said Patrick La Pine, LSCU president/CEO. "We can see a clear line to where record growth began in Alabama and Florida--the third quarter of 2011. The campaign hit the air ahead of Bank Transfer Day and (the) negative consumer sentiments toward bank fees. The second wave this past summer showed a greater growth in awareness."

Alabama and Florida credit unions collectively improved their awareness to 31% from 23% following wave one in September 2011. Awareness improved to a collective 50% following wave two in August. (See chart.)

A closer look at the credit union awareness numbers by state:

Alabama:

  • 29%–-Pre-campaign awareness in August 2011;
  • 35%--Post-campaign awareness following wave one in September 2011; and
  • 59%--Post-campaign awareness following wave two August 2012.
Florida:

  • 19%--Pre-campaign awareness in August, 2011;
  • 26%--Post-campaign awareness following wave one in September, 2011; and
  • 41%--Post-campaign awareness following wave two in August 2012.
The image campaign message pushes consumers to www.betternameforbanking.com, which describes the credit union difference. More than 69,000 consumers visited the website during the second wave of the campaign this summer--4,000 more than during wave one in September 2011.

The second wave of the campaign used online behavioral targeting ads. The behavioral targeted ads produced 105,000 click-throughs, YouTube marketing brought more than 96,000 views of the TV ad, and Facebook produced 12,000 click-throughs.

"This campaign is targeted toward Gen X, and we've worked hard to be creative in reaching this demographic through many different media," said La Pine. "Through two waves of advertising we have learned how the money raised can be used to its fullest. Our image campaign message is strong, and we need to continue to get it in front of consumers. It's a perfect complement to our member credit unions' advertising, which has helped raise awareness in both states."

Leagues step up media work on CU difference

 Permanent link
PORTLAND, Maine and HARRISBURG, Pa. (10/29/12)--The Maine and Pennsylvania credit union leagues are touting the "credit union difference" in their states through media outreach efforts.

Credit union leaders from Pennsylvania's northeastern region met with Greg Little, group editor of The Wayne Independent, at a Pennsylvania Credit Union Association (PCUA) -sponsored lunch. From left: Lorraine Rosenberry and Erin Kynett, P & G Mehoopany Employees FCU in Tunkhannock; Greg Little, The Wayne Independent; and Katelyn McManamon and Jeff DeBree, Penn East FCU in Scranton. (Photo provided by the Pennsylvania Credit Union Association)
Credit union leaders from Pennsylvania's northeastern region met Tuesday with Greg Little, group editor of The Wayne Independent, at a Pennsylvania Credit Union Association (PCUA) -sponsored lunch. The group discussed the credit union structure, philosophy, and cooperative spirit, citing CU$ (in which more than 400 credit unions in 10 states have joined together to form an ATM surcharge-free alliance) and shared branching as examples. Also, PCUA detailed community activities, including youth and adult financial literacy, in-school branches, and one of its recent regional Reality Fairs (Life is a Highway Oct. 24).

Representing credit unions at the meeting were: Scranton-based Penn East FCU CEO Jeff DeBree and Marketing Manager Katelyn McManamon; and Tunkhannock-based P&G Mehoopany Employees FCU Development Director Lorraine Rosenberry and Marketing Specialist Erin Kynett. Also attending were PCUA Director of Communications Diane Powell and Communications Specialist Megan Strausbaugh.

In another PCUA-sponsored event, the credit union difference and growth in the Lehigh and Northampton Counties were discussed at PCUA-sponsored lunch meeting Thursday in Bethlehem. Express-Times Business Editor Tom Zanki met with People First FCU CEO Jeff Albert; LV East FCU CEO Edward Becker; Lehigh Valley FCU CEO Allen Billiard; First Commonwealth FCU Chief Marketing Officer Brian Wilcox; and PCUA's Powell (Life is A Highway Oct. 26).

Like the previous meeting, the group discussed credit union structure, philosophy and cooperative spirit, citing CU$ and business credit union service organizations as examples. Also discussed were community activities such as volunteer income tax assistance, youth and adult financial literacy efforts, and Reality Fairs.

For Maine's credit unions, International Credit Union Week proved not only a time to celebrate with current members but also a time to share the benefits and advantages of credit unions through the Maine Credit Union League's efforts to coordinate media opportunities (Weekly Update Oct .26).  

A record 43 radio interviews resulted in Maine's credit unions being highlighted for nearly 350 total minutes of airtime.

Radio interviews and news stories were featured on the top radio stations in all of Maine's rated media markets. Also, the league touted the strength of cooperatives and the fact that credit unions are the largest cooperative in Maine in a lengthy TV interview that aired on Good Day Maine and WGME 13.

"Mainers appreciate value, especially when it comes to financial services, and Maine consumers saved more than $37 million last year by using a credit union so that really resonates with the av­erage Mainer," said Jon Paradise, league governmental and public affairs manager, responding to a question from WGME 13 Anchor Jon Chrisos about why credit unions are so popular in Maine.

Also, Credit Union Week supplements appeared in each of Maine's seven daily newspapers as well as several week­lies. Combined, the supplements reached an estimated 500,000-plus read­ers, as well as thousands more with online versions, the league said.

The league wrote and provided content for the supplements which highlighted everything from shared branching to fewer and lower fees. The Credit Union Week coverage continues a period of positive media for Maine's credit unions. The prior two weeks featured TV, radio and newspaper coverage of the growth of Maine's credit unions during the first six months of 2012, the league said.

"The league continues to proactively pursue opportunities to pro­mote credit unions and to educate consumers on the benefits of using credit unions. We have a great story to tell, and the media are a great way to tell it so the general public will better understand and recognize what credit unions are all about," concluded league President John Murphy.

Rochester CUs build support at lawmakers reception

 Permanent link
ALBANY, N.Y. (10/29/12)--
Republican candidate for Congress Chris Collins talks with credit union advocates at a lawmakers reception in Rochester, N.Y.
More than 50 credit union advocates from the Rochester, N.Y., area hosted an evening reception for lawmakers and candidates recently in Rochester. During the event, a candidate praised credit unions for service to small businesses.

The group and staff from the Credit Union Association of New York used the occasion to share credit unions' activities in their districts and beyond.

Attending the post-International Credit Union Day event were Assembly members Harry Bronson (D-131), Sean Hanna (R-130), Joe Morelle (D-132), and Bob Oaks (R-128); Sen. Joe Robach (R-56) and Chris Collins, Republican candidate for the 27th Congressional District.

Also attending were representatives from the offices of U.S. Rep. Louise Slaughter (D-28), assembly members Brian Kolb (R-129) and Mark Johns (R-135); and assembly candidate Bill Nojay.

Sharing a laugh at a reception in Rochester, N.Y., are, from left: Oleg Lebedko, CEO of Ukrainian FCU; Donald Milton, director of Family First of NY FCU; Assemblyman Joe Morelle; and Christine Peteres, CEO of Family First of N.Y. FCU. (Photos provided by the Credit Union Association of New York)

Bronson, Hanna, Morelle, Oaks, Robach and Collins addressed the group, reinforcing their support of credit unions.

Collins praised credit unions for their service to small businesses in providing critical loans that commercial banks turn away.

"I can't imagine why any lawmaker would not sponsor legislation that helps our small businesses without costing the government a cent," he said, referring to H.R. 1418, the Small Business Lending Enhancement Act.

Master of ceremonies Pamela Heald, president/CEO of Reliant Community CU, thanked the legislators for their support of credit unions and provided a brief overview of the New York Credit Union Foundation's financial literacy program, Money & Me.

Credit unions are urging Congress to pass legislation that would raise credit unions' member business lending cap to 27.5% of assets from the current 12.25%. The Credit Union National Association says that raising the MBL cap would help inject $13 billion in new small business loans and 140,000 new jobs into the economy, at no cost to taxpayers.

CU System briefs (10/25/2012)

 Permanent link
  • DAVENPORT, Iowa (10/26/12)--A Davenport, Iowa, parole has been charged with robbing the Family CU in Davenport Monday, then stealing a semi-tractor rig and leading police on a chase.  Elbert Lee Karr Jr., 47, is charged with robbery second degree, first degree theft of the truck, felony evading, operating a motor vehicle while intoxicated and driving under suspension. The incident occurred at 11:42 a.m. when a man entered the credit union and gave a note demanding money to a teller and implying he had a gun. He fled with the money. That night, the semi was reported stolen in Davenport and was spotted at about 10:15 by Iowa State Patrol officers on Interstate 80. They chased the truck off the interstate and onto gravel roads, where it landed in a ditch and became stuck. Karr was arrested and the money allegedly recovered (Quad-City Times Oct. 25) …
  • OWENSBORO, Ky. (10/26/12)--Kentucky's Green River Chapter of credit unions held its annual legislative appreciation dinner recently in Owensboro at the Briarpatch Restaurant, with about 40 attending, including four state legislators, according to the Kentucky Credit Union League's newsletter (By the Way Oct. 23). According to the league, it was a great opportunity for credit unions to educate legislators about credit unions and the difference credit unions make to their members and communities. Pictured from left are: Rep. Tommy Thompson (D-14), majority whip; Reps. C.B. Embry (R-17) and Brent Younts (D-15); Beverly Knott, chapter president; and Rep. David Watkins (D-11). (Photo provided by the Kentucky Credit Union League) …
  • FORT WORTH, Texas (10/26/12)--American Airlines FCU (AACC) presented Children's Miracle Network Hospitals with a $50,000 donation as a result of the 16th Annual American Airlines FCU Golf Tournament, which took place May 4 in Grapevine, Texas.  The donation will be split between Cook Children's Health Foundation and Children's Medical Center Foundation.  Among the sponsors were CO-OP Network; Global Vision Systems Inc.; Symitar; PSCU and more. Credit unions, raising funds under the Credit Unions for Kids brand have partnered with Children's Miracle Network Hospitals since 1996. The donation included a CO-OP Financial Services Miracle Match  of $10,000. From left are Angie Owens, president/CEO of AA CU; Natalie Houghton, Cook Children's Health Foundation or Medical Center; Angela Bynum, Children's Medical Center; and Tish Pruitt, AA CU. (Photo provided by American Airlines FCU) …
  • WOODBURY, Minn. (10/26/12)--Russ Plunkett, president/CEO of Postal CU (PCU) in Woodbury, Minn., has retired, effective Oct. 19.  Plunkett joined PCU in 1981and oversaw the credit union's growth from $109 million in 1992 to $541 million as of Sept. 30.  He is being succeeded by Brian Sherrick, previously executive vice president operations/lending. Plunkett has been president/CEO since 1992. Earlier this year Plunkett was inducted into the 2012 Credit Union House Hall of Leaders in Washington, D.C. In September, he was honored as a Credit Union Builder by PCU through the Minnesota Credit Union Foundation. Sherrick joined PCU in 1984 as a college intern. In his position was executive vice president, he oversaw mortgages, commercial services, business development, marketing and branches, and served as credit manager. Sherrick also is chairman of the PCU Community Foundation and is a member of the board of directors of the Minnesota Credit Union Foundation. (Photo provided by Postal CU) …

Verizon data-breach report points to challenges for FIs

 Permanent link
MADISON, Wis. (10/26/12)--Data breach incidents worldwide last year were more numerous, were caused by more players, and represent a broader and more diverse geographical scope, Verizon said Wednesday in releasing its "2012 Data Breach Investigations Report" (DBIR).

In 2011, "the number of compromised records across [all] incidents skyrocketed back up to 174 million after reaching an all-time low (or high depending on your point of view) in last year's report of four million. In fact, 2011 boasted the second-highest data loss total since we started keeping track in 2004," the DBIR said. 

The report means financial institutions--including credit unions--are facing some unique challenges, according to the Business Standard (Oct. 25). The financial services industry attracts significantly more directed and tenacious criminal attention because of its status as a high-value target. Breaches in this sector were primarily about money, whether directly targeting it through accessing internal accounts and applications, or targeting it indirectly through downstream fraud, the Standard said.

Many of the attacks prey on ATMs, employees and Web applications, the Standard added. Improved security is needed in the areas of: careful monitoring of log-in credentials, better protection of ATMs, secure application development, and training and awareness among employees, the Standard said.  

The report offers some point-of-sale (POS) security tips, especially for smaller organizations:

  • Change administrative passwords on all POS systems. Hackers are scanning the Internet for easily guessable passwords.
  • Implement a firewall or access control list on remote access/administration services. If hackers can't reach the system, they can't easily steal from it.
  • Avoid using POS systems to browse the web (or anything else on the Internet); and
  • Make sure the POS is a PCI Data Security Standard (PCI  DSS)-compliant application (ask your vendor).
For those with a third-party vendor looking after their POS systems, the report recommended  asking the vendor to confirm that these things have been done. If possible, obtain documentation.

Following these simple practices will save a lot of wasted money, time, and other troubles for the credit union's business and members, said the report.

How do data breaches occur? The report indicated:

  • 81% used some form of hacking;
  • 69% incorporated malware;
  • 10% involved physical attacks;
  • 7% employed social tactics; and
  • 5% resulted from privilege misuse.
The report was conducted by the Verizon RISK Team with cooperation from the Australian Federal Police, Dutch National High Tech Crime Unit, Irish Reporting and Information Security Service, Police Central e-Crime Unit, and U.S. Secret Service.

To view the report, use the link.

Altura CU net worth ratio at 9.42

 Permanent link
RIVERSIDE, Calif. (10/26/12)--Altura CU, based in Riverside, Calif., Wednesday reported net income of $2.089 million on total assets of $674.5 million for the third quarter.

That is down from the $3.37 million Altura reported last year at this time, on total assets of $679.4 million. It is the credit union's sixth consecutive quarter of net gains, in which it recorded a net worth ratio of 9.42%--its highest ever.  

The reduction in net income for the third quarter of 2012 is due primarily to two significant charges:

  • The National Credit Union Administration's  (NCUA) Corporate Stabilization Fund Assessment of $589,000; and
  • An impairment charge of $1.8 million related to Altura's investment in a business lending credit union service organization  (Business Partners LLC) founded by Telesis Community CU. Telesis was conserved by the NCUA in March and then acquired by Premier America CU, in Chatsworth, Calif.
"This has been a solid year of net income growth for us, and we are very pleased with our third-quarter results despite the charges we took in September," said Mark Hawkins, CEO of Altura CU, which is located in the Inland Empire, a region about 60 miles east of Los Angeles.

In early 2011, Altura had to close multiple branches because the local economy in the Inland Empire was hard hit by the recession, seeing an unemployment rate of 15% at one point and record home foreclosures (News Now May 9).  However, in April, it was able to restaff its Murietta, Calif., location.

Year to date, Altura is sharply ahead of the same period last year, reporting net income of $13.172 million for 2012, compared with $4.9 million for 2011. Also, for the third quarter, Altura reported an increase in its net worth ratio to 9.42%, the highest in its history. This is above the 6.89% reported for the third quarter in 2011 and above the 8.69% for second quarter 2012, Altura said.

"We began to see the early signs of recovery last year, and it has continued to expand throughout 2012," Hawkins said. "It's not yet where we would like it to be, but the improvement is steady and ongoing. That fact, together with our sustained emphasis on cost savings, is making 2012 our best year in our 56 years of operation."

California's jobless rate remains above the national average, most recently reported at 10.2%, with the Inland Empire at 11.6%, Riverside County checks in at 12%.

A report released by Claremont McKenna College and University of California-Los Angeles on Oct. 9 confirmed that the region is showing some economic bright spots. Home prices are up 5.1% year over year and inventories of properties for sale have continued to shrink. The report also cited a boost in construction jobs, and professional and business services jobs for the region.

"We are thankful that our members are recovering and that they've allowed us to continue to be their financial partner," Hawkins said. "Our focus throughout this economic debacle has remained on providing our members with the products and services they need without the hassles and fees so commonly found in financial institutions today."

Interchange judge to hear opponents to settlement

 Permanent link
NEW YORK (10/26/12)--The judge overseeing the $7.25 billion settlement in retailers' class antitrust lawsuit against Visa and MasterCard over credit card interchange fees said Wednesday that opponents to the proposed settlement can plead their case in a hearing set for Nov. 9.

"I have reviewed the settlement agreement and at first blush it appears to satisfy the threshold requirements for preliminary approval," said U.S. District Judge John Gleeson of the U.S. District Court for the Eastern District of New York in then order Wednesday. "The parties who contend otherwise shall be heard, in writing, on or before Oct. 31."

He added he would hear their arguments against a preliminary approval on Nov. 9. "As in every case, those objections deserve, and will get, careful consideration by the court."

Gleeson noted that the threshold for preliminary approval of a class action settlement is "meaningfully lower than" the threshold for final approval and that "considerations of judicial economy counsel strongly in favor of not converting the preliminary approval process into something akin to the plenary process that attends an application for final approval."

Noting that he ordinarily does not schedule oral argument of preliminary approval motions, he said,  "it seems clear that there is an expectation among some interested parties that the preliminary approval process should be more involved in this case than in the usual class action."

He declined a request to form a committee for the objecting retailers and said there would be more opportunity for discussion at a later hearing on the final settlement approval.

Retailers in the suit had alleged that banks and card companies conspired to fix interchange fees charged the retailers when consumers pay for purchases with credit cards.

A growing number of major retailers and organizations are opposed to or are challenging the settlement, saying it leaves credit card issuers with too much control over swipe fees. The National Association of Convenience Stores and the National Retail Federation  (NRF) denounced the settlement when it was first announced July 13 (Forbes July 25). In September, the NRF, which was not party to the original lawsuit, said it would try to block the settlement but was not certain outside parties would be permitted to intervene (News Now Sept. 12).

Also opposing the settlement is Walmart, the world's largest retailer,  and Target. Target said the settlement "is bad for both retailers and consumers" and would "perpetuate a broken system,' restrict retailers from future legal action and offer no long-term relief for retailers or consumers."

Credit unions were not a party to the litigation, but will be impacted by the injunctive relief settlement terms--temporary reduction in credit card interchange, surcharging and buying groups. The settlement's proposed reduced credit card interchange rate fees could cost credit unions with credit card programs up to $50 million total, says the Credit Union National Association (CUNA) .

The settlement would require a reduced interchange rate fee (IRF) of 10 basis points for an eight month period, likely beginning in mid-2013, and would apply to all card issuers, including credit unions.

If the total credit IRF reduction is $1.2 billion, credit unions with credit card programs would lose about $50 million in total revenues, or about 0.5 basis points on their total assets, CUNA says. The loss would be concentrated among a relatively small number of credit unions with very active credit card programs.

The proposed settlement also calls for Visa, MasterCard and the banks to create a $6.05 billion fund to repay retailers for past fees charged and says retailers would be permitted to assess "check out" fees or surcharges on credit card purchases, which has previously been prohibited by Visa and Mastercard rules.

The surcharging aspect of the settlement--as well as the provision that consumer-owned credit unions would see a reduction in interchange revenue-- are signs that the settlement does nothing for consumers, CUNA President/CEO Bill Cheney has said. Interchange revenue enables credit unions to provide "essential and cost-effective credit card services" to members, he said. "We also know that the temporary reduction in interchange revenue that credit unions will experience will not likely find its way into the pockets of consumers, but will more likely into those of merchants," Cheney said.

Heads up Cyber crooks target Barnes and Noble PIN pad

 Permanent link
NEW YORK (10/26/12)--In an incident that may compromise thousands of credit union members and other consumers' accounts, Barnes & Noble has detected tampering with PIN pad devices used in 63 of its stores.

Tampered PIN pads were discovered at stores in California, Connecticut, Florida, Illinois, Massachusetts, New Jersey, New York, Pennsylvania and Rhode Island, said the bookstore in a press release Wednesday.

After detecting evidence of tampering, which was limited to one compromised PIN pad in each of the affected stores, Barnes & Noble discontinued use of all PIN pads in its nearly 700 stores nationwide. The company also notified federal law enforcement authorities, and has been supporting a federal government investigation into the matter.

Barnes & Noble said it completed an internal investigation that involved inspecting and validating every PIN pad in every store. The tampering, which affected fewer than 1% of the PIN pads, was a sophisticated criminal effort to steal credit card information, debit card information, and debit card PIN numbers from customers who swiped their cards through PIN pads when they made purchases. The situation involved only purchases in which a customer swiped a credit or debit card in a store using one of the compromised PIN pads.

The company emphasized that its customer database is secure. Purchases on Barnes & Noble.com, NOOK and NOOK mobile apps were not affected. The member database also was not affected.

In addition to assisting federal law enforcement authorities, the company is working with financial institutions, payment card brands and issuers to identify accounts that may have been compromised, so they can employ enhanced fraud security measures on potentially compromised accounts.

The criminals planted bugs in the tampered PIN pad devices, allowing for the capture of credit card and PIN numbers.  Barnes & Noble disconnected all PIN pads nationwide on Sept. 14, so customers can securely shop with credit cards through the company's cash registers.

Senator lt. gov. help Reality Fair mark 10000th student

 Permanent link
U.S. Sen. Richard Blumenthal (D-Conn.), left, takes a turn at spinning the Wheel of Reality with Tony Emerson, president/CEO of the Credit Union League of Connecticut, at the Financial Reality Fair held Wednesday at the Connecticut State Capitol in Hartford.


At a Financial Reality Fair Wednesday at the Connecticut State Capitol in Hartford, Connecticut Lt. Gov. Nancy Wyman, left, tries her hand at the Wheel of Reality. At right is Tony Emerson, Credit Union League of Connecticut president/CEO. (Photos provided by the Credit Union League of Connecticut)
MERIDEN, Conn. (10/26/12)--To mark the milestone of 10,000 Connecticut students participating in Financial Reality Fairs since the start of the program during the 2008-2009 school year, more than 500 students from 14 local high schools attended a fair held at the Connecticut State Capitol in Hartford last Wednesday.

U.S. Senator Richard Blumenthal (D-Conn.) and Connecticut Lt. Gov. Nancy Wyman took time out from their schedules to see the educational experience taking place.

The students made life choices in completing their monthly budgets in a test reality check of what it might be like out on their own.

More than 100 volunteers from Connecticut credit unions and businesses guided them through the process, showing them how to think clearly about their choices.

The fairs are a proactive learning exercise conducted by Connecticut credit unions to enhance financial literacy among youth in preparation for life's challenges, financial or otherwise.

"Preparing for your financial future can never begin too early, and these reality fairs provide a concentrated, structured means to learning the essentials of personal financial management," said Tony Emerson, president/CEO of the Credit Union League of Connecticut. "We are also fortunate to have a group of dedicated and knowledgeable credit union volunteers led by Barbara Bass, vice president of education and human resources development, to make these events happen."

CUNA Tech Council paper addresses tablet temptations

 Permanent link
MADISON, Wis. (10/26/12)--Tablet technology could be the "face" of a revolution that helps credit unions achieve gains in everything from back-office efficiency to streamlined member service experience, according to a new white paper from the CUNA Technology Council.

Mobile enrollment efforts are leading the way in service delivery as credit unions take advantage of members' comfort with tablet technology. Business development officers head out to off-site and select-employer-group locations equipped with iPads new members can use to complete and sign applications and scan in identification and other required documents, said the paper.

Tablets are used to greet and queue members for service in branches and schedule their interactions with member service staff. This could ultimately result in the reconfiguration of branch design, said the council. Handheld computers also are used in the board room and executive suite, replacing hefty board packets and facilitating staff meetings and presentations.

The white paper explores the design process involved in introducing tablets for member service and back-office operations, along with the system innovations that facilitate the use of handheld devices and bring credit unions closer to paperless environments.

Tablets also help credit unions achieve efficiency gains. For example, Andera, a provider of online member acquisition solutions, offers oFlows, a paperless origination solution that can be integrated with the iPad. Andera timed one financial institution implementing the oFlows platform and found that the process to open a checking account went down to an average of 14 minutes from 52 minutes. That time savings, combined with more accurately targeted cross-sell offers, increased the rate of products opened during the first encounter with new members to 1.2 from 1.9.

The paper also examines how information technology staff members are dealing with the security concerns posed by tablets and looks at the next steps financial institutions may take to expand the use of tablets.

The paper is available in the CUNA Council's white papers section of the CUNA web site. Use the link.

New variations of payday loan scams surface

 Permanent link
WASHINGTON (10/25/12)--New variations of payday loan scams are surfacing, according to a Scam Alert Tuesday from the Internet Crime Complaint Center (IC3).

IC3 has received thousands of complaints about the scams the past three years and continues to see new variations.

Credit unions can alert their members to be wary in case they are contacted by people activating the scam and refer members to IC3's public service announcements. They can also use the alert as an opportunity to provide more information about identity theft scams that have reeled in both members and nonmembers in past scams. The Credit Union National Association also has various security and identity resources to help alert members not to fall victim to scams. (use the resource links).

In the original scam, the fraudsters contact victims relentlessly, through telephone, at their residences and at work, and claim the victims are delinquent on a payday loan. The callers tell victims to repay the loan to avoid legal consequences, and use coercion techniques such as harassment, threats, and claims that they represent government agencies and law firms. Some victims have applied for a payday loan, but others have not, said IC3's alert.

The callers reportedly already have accurate information about the intended victims, including Social Security numbers, birthdates, addresses, employer information, bank account numbers, and names and telephone numbers of relatives and friends. However, they refuse to provide details of the alleged payday loans and become abusive when questioned, threatening legal actions, arrests and in some cases physical violence if victims refuse to pay.  Some have been told there is an outstanding warrant for their arrest. Subjects have harassed their relatives, friends and employers. In two instances, the subjects showed up at the victims' workplaces and residences claiming to be process servers.

The past two months, however, intended victims are also receiving official-looking e-mails purportedly from the U.S. Attorney. The e-mails reference the Federal Bureau of Investigation, court proceedings and "serious allegations" that include violation of federal banking regulations such as collateral check fraud, theft by deception and fraudulent electronic funds transfer, said the scam alert. Recipients are instructed to contact the subject within 48 hours of receiving the e-mail.

IC3 has posted public service announcements about this type of scam--one in 2010 and one earlier this year. To access them, use the links.

Quimper Community FCU to merge with Kitsap Nov. 1

 Permanent link
BREMERTON, Wash. (10/25/12)--Members of Quimper Community FCU, based in Port Townsend, Wash., have approved the merger of the credit union into Bremerton-based Kitsap CU (KCU), effective Nov. 1.

Out of the 893 ballots counted, 832 supported the merger while 61 ballots were opposed (ptleader.com Oct. 24).

Quimper was established in 1939 to serve members in the forest products industry. That industry has been hit by the economy and the credit union experienced low loan demand (Kitsap Sun Oct. 23) and its net worth to assets ratio fell below regulatory requirement, said ptleader.com.

Quimper has two branches in Port Townsend and Port Hadlock, which will become KCU branches. KCU has offered about 18 Quimper employees positions with KCU.

Kitsap was chartered in 1934 as Navy Yard Metal Trades CU and served the Bremerton Metal Trades Council before expanding over the years. When the merger is complete, Kitsap will have $977 million in assets, 90,500 employees, 329 employees and 20 branches.

The National Credit Union Administration and the Washington Department of Financial Institutions also have approved the merger.  Kitsap members were not required to vote.

CUNA committee paper encourages cross-sector co-op collaboration

 Permanent link
WASHINGTON (10/25/12)--A newly released white paper from the Credit Union National Association's (CUNA) Cooperative Alliances Committee suggests ways and presents case studies on how credit unions can collaborate more closely with other types of cooperative businesses.

The paper makes a business and philosophical case for the sixth co-op principle--"cooperation among co-ops"--and showcases a number of examples that the committee hopes will motivate credit unions to pursue similar opportunities.

"We anticipate that this report will serve as a catalyst to help inspire credit unions to actively collaborate with cooperatives from all sectors as a way to foster growth, build advocacy alliances, and improve the communities in which we work and live," said committee Chairman Mark Cummins, who is also president/CEO of the Minnesota Credit Union Network.

Cummins said the white paper furthers the CUNA Cooperative Alliances Committee's mission, which is to facilitate the exchange of ideas that foster mutually beneficial partnerships and alliances between credit unions and other cooperatives. "Our committee is pleased to present the ideas in this white paper to the credit union and co-op communities," he added.  "We wanted to release the paper during October, which is National Co-op Month, and as a legacy project toward the close of this International Year of Cooperatives."

The paper offers suggestions and methods to foster cross-sector collaboration, including recommendations for credit union management, boards, state credit union leagues, entities like credit union service organizations (CUSOs) and CUNA.

Credit union management, for example, is urged to create greater awareness that the institution is a cooperative. "While this may seem obvious, the committee heard numerous stories of cases where the majority of members and many employees did not know credit unions were financial cooperatives," the paper explains.

Suggested action steps here include ensuring employees receive a formal orientation about the cooperative business model, hosting meetings with other co-op businesses, inviting co-op leaders to speak at the credit union's annual meeting, and assigning at least one staff person at the credit union the responsibility to serve as liaison to other cooperatives.

The paper also presents a series of case studies highlighting the success of cross-sector collaboration among cooperatives. These include: Seattle Metropolitan CU's "Co-opalooza" community fair; the Austin Cooperative Think Tank; Valley Cooperative Business Association in Massachusetts, the Co-op Connection in Madison, Wis., and the Philadelphia Area Cooperative Alliance (PACA).

Additional case studies underscore the greater advocacy strength that results when co-op sectors join together, such as joint lobbying among co-ops in Wisconsin and Minnesota spearheaded by The Cooperative Network and the two state credit union leagues, or the participation of the National Cooperative Business Association, National Cooperative Grocers Association and National Rural Electric Cooperative Association in the CUNA-organized coalition of pro-small business groups supporting legislation to raise the statutory cap that limits credit union member business lending.

The committee's 32-page white paper also lists and provides website links to a number of additional resources that credit unions and other co-ops can tap to assist their collaborative efforts.

The CUNA Cooperative Alliances Committee white paper, "A guide to how credit unions can improve their interaction with cooperatives from other sectors," is available at no cost from CUNA's website. (See the resource box for the link.)

"This report is also meant to be a living document," says committee Chairman Cummins. "It will be stored in a manner that will allow credit unions and leagues, or other cooperatives, to add their examples and case studies of how they are collaborating together.  This will continue to inspire others to learn and spread the high value and good works that cooperatives have to offer." 

Those with suggestions and examples to add to the white paper can e-mail them to Ruth Shirley in CUNA's Communications Department at rshirley@cuna.coop.

Prevail CU members OK merger with Harborstone

 Permanent link
SEATTLE and LAKEWOOD, Wash. (10/25/12)--Members of Prevail CU in Seattle voted Friday to approve a merger into Lakewood, Wash.-based Harborstone CU.

Eighty-nine percent of members voting at the $239 million asset Prevail approved the move to be absorbed into the $782 million asset Harborstone (The News Tribune Oct. 24).

Regulators and the Harborstone board of directors previously approved the merger, the newspaper said.

The combined credit union will operate under the Harborstone name. The new institution will have roughly 240 employees and more than $1 billion in assets. Harborstone will become the ninth Washington credit union to attain $1 billion in assets, the Northwest Credit Union Association told the paper.

Final integration will take place next year, the paper said.

A snapshot 80 of them of ICU Day activities

 Permanent link
MADISON, Wis.  (10/25/12)--Credit Union Magazine has collected more than 80 "snapshots" from credit unions sharing their International Credit Union (ICU) Day celebrations.

The submissions  include videos and photos, and feature face painting, karaoke, food, pep rallies, and even a Wayne Gretzky statue.

"When I see the wonderful ways credit unions thanked their members last week, I feel so privileged to be part of the credit union movement," said CUNA ICU Day Coordinator Joanne Sepich.

Photos, videos and messages can still be sent to cumagadmin@cuna.com.

Credit unions have celebrated ICU Day on the third Thursday of October since 1948. The day reflects upon the credit union movement's history and promotes its achievements. It is a day to recognize the dedication of those working in the credit union industry, to appreciate current members and to invite eligible consumers to join credit unions.

To see the submissions, use the link.

Also, all CUNA ICU Day stock is on sale at half price. Use the link.

Mercer explains CUs in video posted by NCB

 Permanent link
WASHINGTON (10/25/12)--The National Cooperative Bank posted a video on Facebook of Mike Mercer, Credit Union National Association (CUNA) board chair and president/CEO of Georgia Credit Union Affiliates, explaining what credit unions are all about.

In the three-minute video, Mercer mentions that the roughly 150 credit unions in Georgia save the state's two million members more than $100 million each year in direct impacts.  

Because they exist solely to improve the financial lives of members, credit unions "are much better-liked than their for-profit brethren (banks)," Mercer said.

Since Bank of America announced its $5 account fees in September 2011, there has been a three-fold increase in credit union members signing up in Georgia, Mercer said. "And it hasn't stopped," he added. "People keep coming from banks and that's a good sign." 

To view the video, use the link.

Indiana league honors five CU leaders

 Permanent link
INDIANAPOLIS (10/25/12)--The Indiana Credit Union League honored five credit union leaders at its Chairman's Awards Banquet, Oct. 5 in Indianapolis.

Cox was a league employee for 26 years, retiring in 2003. Upon her retirement she received many honors and recognitions, including a Sagamore of the Wabash Award--the highest honor bestowed on citizens by the Governor of Indiana; a special resolution adopted by the Indiana General Assembly honoring her dedication and efforts on behalf of credit unions; a special resolution read into the Congressional Record by her friend, U.S. Rep. Dan Burton; a resolution adopted by Indiana's credit unions at the 2003 League Annual Meeting; and the Buck Levins Political Activist Award, which was presented at the 2004 Credit Union National Association (CUNA) Governmental Affairs Conference (GAC).

The Indiana Credit Union Foundation honored her dedication to credit unions by establishing the Millie Cox Scholarship Award, which has helped recipients attend the CUNA GAC each year since 2003.

Loren Roth (left) receives the Indiana Credit Union League Professional Achievement Award at the Chairman's Awards Banquet Oct. 5 in Indianapolis from league Chairman Lori Gonzalez of Members Choice FCU in Bloomington.  (Photos provided by the Indiana Credit Union League)
Loren Roth, president/CEO of CommunityWide FCU in South Bend, was also inducted into the Indiana Credit Union Hall of Fame.

Roth has been in the credit union movement for 41 years. During his tenure at CommunityWide FCU, the credit union grew to $308 million in assets with 11 locations in South Bend, Plymouth, Goshen, Warsaw and Elkhart that serve more than 40,000 members. Under Roth's leadership, the credit union provided high-value financial services at an affordable cost to members with limited means, said the league.

Roth served on the league's board from 2000 to 2006.

Karla Salisbury, president/CEO of KEMBA CU, was named the league's 2012 recipient of the Professional Achievement Award.

Salisbury has been president of the east Indianapolis credit union for 10 years. She is the past chairman and a director of the Indiana Credit Union Foundation serving since 2005 and is a member of the league's Convention Committee. She is a member of the Credit Union Executives Society and holds three professional designations from that group.

Steve Kozel Sr., president of the board of directors at Midwest Carpenters & Millwrights FCU in Hobart, was selected as the 2012 Leadership Achievement Award recipient by the league.

Kozel has volunteered with the credit union since 1998 and has been president of the board since 2001. His leadership helped the credit union focus on shared branching. Since the credit union serves primarily carpenters, millwrights and others in the skilled trades, and its membership spans a four-state area, participating in the shared branch network with locations nationwide provides thousands of convenient locations. Kozel also implemented "on demand" training on a number of topics and promotes "The State of the Economy and its Impact on Credit Unions" which helps keep the board up to date on current economic issues.

Andrew Spirrison, vice president of retail delivery at FORUM CU in Fishers, is the 2012 recipient of the league's Emerging Leadership Award. He is a member of the league's Emerging Leadership Advisory Group. Spirrison also is an alumnus of the league's ignite program, working with a group that developed an online Community Service aggregator to track credit union service to communities across the state. He was recently named by the Filene Research Institute as a member of its 2012 i3 group.

ATMs to dispense prepaid card piloted by CUs

 Permanent link
MESA, Ariz. (10/25/12)--A program that dispenses Visa prepaid cards through ATMs will be expanded nationwide, the program's provider announced Tuesday.

The decision to grow the program followed the success of an in-market pilot program in Arizona in which three credit unions participated.

Credit Union West, Glendale; MariSol FCU, Phoenix; and Pinal County FCU, Casa Grande, offered their members Visa gift cards at walk up and drive-through ATMs through a program initiated by Better ATM Services (News Now Jan. 12).

Screens on the ATMs include the option to purchase a gift card, and the screens prompt users to designate the value to load on each card. Cards were available with no activation fee in $25 denominations during the pilot.

While the pilot program allowed the selection of fixed-value cards, menu options now allow account holders to designate the value to load on each card they purchase, said Better ATM Services. ATM-dispensed Visa prepaid cards are made of a durable yet thin material, allowing cards to easily pass through the cash mechanisms of ATMs.

The prepaid market is estimated to be $549.7 billion in 2012. By 2013, consumers will load $117 billion onto prepaid cards, which would mark a 200% usage increase in three years, according to Mercator Advisory Group.

CU System briefs (10/24/2012)

 Permanent link
  • ORLANDO, Fla. (10/25/12)--A man accused of being a serial robber who threatened to kill tellers if they did not comply with his demands was sentenced Tuesday to 20 years in a federal prison (Orlando Sentinel Oct. 24). Ralph Brooks Rivera, 58, pleaded guilty in a plea agreement to robbing a Volusia County branch of Melbourne, Fla.-based Space Coast as well as three bank branches in the area during September-December 2011. In each incident, the robber implied he had a gun and demanded money. He allegedly netted $9,465 in the heists. Rivera also is a suspect in the robbery of a Georgia bank …
  • PALO ALTO, Calif. (10/25/12)--First Tech FCU has selected Gregory Mitchell as its new president/CEO, the credit union announced. Mitchell, with 30 years of community banking and financial institution experience, previously served as CEO of Irvine, Calif.-based First PacTrust Bancorp and PacTrust Bank. He also served as president/CEO of Los Angeles-based California National Bank from 2001 to 2009, overseeing nearly 70 branch locations. In 1995, he founded the West Coast office of Hovde Financial, an investment banking, asset management and private equity firm. Mitchell said he has been a member for more than 35 years of a credit union serving Coast Guardsman and their families. First Tech's Interim President/CEO Hank Sigmon will return to his position as chief financial officer, said the $5.6 billion asset credit union …
  • JAMESBURG, N.J. (10/25/12)--U.S. Rep. Rush Holt (D-N.J.), center, met Tuesday with credit union leaders at the New Jersey Credit Union League's CEO Roundtable in Jamesburg. Credit unions heard the latest from Washington, D.C. and shared insights on key credit union issues. Member business lending (MBL) reform was first on the agenda, followed by the importance of giving credit unions access to supplemental capital, said the league (The Daily Exchange Oct. 24). Holt is a five-term member of Congress from the 12th District. He has added his co-sponsorship to MBL reform in the current and previous Congress and signed a "Dear Leadership" letter encouraging inclusion of MBL provisions in any jobs package. The Credit Union National Association is urging Congress to raise credit unions' MBL limits to 27.5% of assets from 12.25%, which would inject $13 billion into the economy for small business loans and create 140,000 jobs. He agreed to consider adding his name to the supplemental capital as well, said the league. A credit union member himself, Holt is familiar with and supportive of the unique role that credit unions play in the financial services marketplace, the league reported. (Photo provided by the New Jersey Credit Union League) …

CUSO announces mortgage lending awards

 Permanent link
FAIRBORN, Ohio (10/25/12)--myCUmortgage announced the recipients of its Awards for Excellence in Mortgage Lending. Credit unions were recognized at the credit union service organization's eighth Annual Partner Conference in Fairborn, Ohio.

Awards are based on mortgage activity from July 1, 2011, to June 30, 2012.

Originator of the Year/Most Loans Originated Awards:

  • Small Asset--Dynamic FCU, Celina, Ohio, $23 million in assets;
  • Mid-Size Asset--Day Air CU, Kettering, Ohio, $262 million; and
  • Large Asset--Workers CU, Fitchburg, Mass., $880 million.
Largest Increase in Loans Originated Award. The award criterion was to compare performance from July 1, 2011, to June 30, 2012, with the performance of July 1, 2010, to June 30, 2011.

  • Small Asset--Commodore Perry FCU, Oak Harbor, Ohio, $32 million in assets;
  • Mid-Size Asset--Indiana State University FCU, Terre Haute, Ind., $80 million; and
  • Large Asset--Bayer Heritage FCU, Proctor, W. Va., $297 million.
New Producer Awards: Awards are based on performance between July 1, 2011, and June 30, 2012.

  • Small Asset--Millstream Area CU, Findlay, Ohio, $30.8 million in assets;
  • Mid-Size Asset--Midwest Carpenters FCU, Hobart, Ind., $87 million; and
  • Large Asset--Rogue FCU, Medford, Ore., $581 million.
CU Select Awards: Peoples FCU, Nitro, W. Va., $93.7 million in assets, and Finance Center FCU, Indianapolis, $428.9 million, received the awards based on mortgage loan volume.

Susan Edwards Scholarship Award: The 2012 Susan Edwards Scholarship Award recipients were Angie Maynard, CEO of TopMark FCU, Lima Ohio, 24.9 million in assets, and Michelle Boughan, TopMark FCU vice president of mortgage lending.

This year marked the fourth annual Susan Edwards Memorial Scholarship Award presentation. The scholarship to attend the conference was created in memory of Susan Edwards, myCUmortgage's first loan coordinator who worked her way up to become the operations manager for myCUmortgage. She died of cancer in 2009.

Individual Originator of the Year Awards:       

  • Tim Muffley, mortgage loan manager at Desco FCU, Portsmouth, Ohio, $273 million in assets;
  • Trisha Dauch, mortgage loan officer at Vacationland FCU, Sandusky, Ohio, $142.9 million; and
  • Michelle Boughan, vice president of mortgage lending at TopMark FCU.
Purchase Lender as a Percent of All Business Awards:

  • Small Asset--Dynamic FCU, Celina, Ohio, $23 million in assets;
  • Mid-Size Asset--The Ohio Educational CU, Cleveland, $118 million; and
  • Large Asset--Canton Schools Employees FCU, Canton, Ohio, $163 million.

CU System briefs (10/23/2012)

 Permanent link
  • OKLAHOMA CITY, Okla. (10/24/12)--Tinker FCU has awarded travel vouchers to 17 full-time college students through its Win Your Break promotion. One grand prize winner, TFCU member Aaron Limon, received a $2,000 voucher for travel expense while 16 others received $500 vouchers. Limon saw the promotion online and was selected from more than 4,000 entries. "I've never won anything, and this is big," he said, adding, "I've always wanted to travel out of the country and this will help me make that happen."  The promotion aimed to give  a few hard-working students a little extra incentive toward fulfilling their goals and dreams, said the Oklahoma City-based, more than $2.8 billion asset credit union. Limon is a freshman at Bendictine College in Kansas, working on degrees in math and secondary education. Other winners were selected from each of TFCU's Business Partner colleges, universities and technology centers and from other schools. Winners included a med student interested in traveling outside the state; an automotive services technology student hoping to travel to NASCAR in Texas; a nursing student and mother of five planning a family trip to Six Flags …
  • PITTSFIELD, Mass. (10/24/12)--Greylock FCU, based in Pittsfield, Mass., says its annual 34th Annual Bees Prendergast Memorial Greylock Golf Tournament last month in Pittsfield raised nearly $25,000 for Berkshire Family and Individual Resources (BFAIR). During the 34 years since its inception, the tournament has raised hundreds of thousands of dollars for area non-profit agencies, said Greylock Board President and golf tournament Chairman Sheila LaBarbera.  This year's tournament attracted 128 golfers who purchased raffle tickets for prizes donated by more than 150 local merchants. Other funds are raised through the sale of sponsorships for green, tee and cart signs. The event is named for Robert W. "Bees" Prendergrast, a credit union director of 27 years who died in 1997 …
  • PADUCAH, Ky. (10/24/12)--Paducah (Ky.) FCU has changed its name to Signet FCU, effective Oct. 1, according to the Kentucky Credit Union League (By The Way Oct. 23). Originally chartered in 1939 as Paducah ICRR CU, the $206 million asset Signet has grown to serve more than 16,000 members in McCracken, Graves, Ballard and Livingston counties.  Signet President Alan Butler noted that the membership has expanded steadily into areas outside of Paducah. "In response to that growth, we have a new office scheduled to open in Mayfield by the end of the year," he said. "We feel the timing is right for a new name; one that isn't tied to a single locale. We chose Signet because we fell it represents the loyalty and the seal of trust our members have in our credit union." Plans are underway to unveil the new Signet logo at all locations in coming months.  Current members will see no changes in how their business is conducted, said the credit union …

DFCU Financial to return half its earnings to members

 Permanent link
DEARBORN, Mich. (10/24/12)--DFCU Financial CU, Michigan's largest credit union, is returning half its earnings through its Special Patronage Dividend--the biggest dividend paid by any U.S. credit union, it said.

This is the seventh consecutive year that the $3.3 billion asset DFCU Financial has made such a dividend payment.

The dividend is estimated at $21 million and will be paid to members on Jan. 4. Since 2006, DFCU Financial has paid members more than $130 million in dividends.

The payout to members is based on the member's total relationship with DFCU Financial--the greater the relationship, the bigger the dividend. Qualifying members receive a 0.5% dividend on their yearly average loan and deposit balances, with each member receiving at least $50. The calculation takes into account all of a member's savings accounts and loan balances.

CUNA OpSS Council honors two CUs for excellence

 Permanent link
MADISON, Wis. (10/24/12)--Two credit unions were the winners in the eighth annual CUNA Operations, Sales & Service (OpSS) Council's Excellence Awards, which recognize innovative solutions optimizing credit union performance. The recipients were recognized during the council's 15th annual conference, Oct. 14-17 in Las Vegas.

Red Canoe CU in Longview, Wash., won in the Sales & Service Management category for its multiple sales programs. Some of them were: Ahead of the Curve, Around the World in 80 Calls, Extreme Makeover: Financial Group Edition, QuestionSANDanswers, and the $25 pyramid. The credit union also used its own communication tools, BERT and ERNIE and a Member Solution Worksheet.

As a result of programs Red Canoe implemented and additional tools it used, the credit union had loan growth of 43.6% from the same time in 2011 to 2012. It also saw 6,824 outbound calls for the first half of 2012, more than double the previous year's production. Red Canoe also measures its competitor buyouts. Through the first half of 2012, it is on track to increase more than 59% from 2011. The $587.2 million asset credit union also is exceeding its own goal with a Quality Service Rating of 95.09%.

Directions CU in Sylvania, Ohio, won in the Miscellaneous category for a successful merger of three credit unions, and is now one of the largest in Ohio. Toledo Area Community CU, a $185 million credit union and Empire Affiliates CU, with $138 million in assets, originally merged, with Erie Shores CU later adding $126 million in assets to the final credit union, now called Directions CU.

Individually, the three credit unions would have struggled through the recession, but by combining forces and using economies of scale, they eliminated branches that overlapped and froze hiring and pay increases that allowed them to survive and excel in their marketplace, the council said.

Combined assets of the credit union are projected to be $575 million by the end of the year. Directions survived multiple CEO retirements, name changes and other obstacles, but is moving forward with 250 employees at 18 member access offices and two nonmember operation centers serving more than 67,000 members, said the council.

The OpSS Council Excellence Awards were created to identify, recognize, and share new approaches and solutions with universal application in the credit union movement. Winners were chosen, without regard to credit union asset size, based on strategy, process, application and results.

For more information, use the link.

Network to air PCUA PCUF fin lit town hall meeting

 Permanent link
HARRISBURG, Pa. (10/24/12)--Pennsylvania Credit Union Association (PCUA) and the Pennsylvania Credit Union Foundation (PCUF) are partnering with the Pennsylvania Cable Network (PCN) to present a series of quarterly town meetings on financial literacy.

The first in the series, "Financial Management 101," will take place on Monday. PCN will tape the educational session that day and air it statewide later at 9 p.m (ET). 

The town meeting, which is free and open to the public, will start at 1 p.m. (ET) at the Widener University School of Law in Harrisburg, Pa..

Attendees will learn the basics of financial management including banking, credit, investments and budgets and how to establish credit.

The discussion will be led by a panel that includes:

  • Michael Kaczenski, PCUA chairman and CEO of Sun East FCU, Aston, Pa.;
  • Michael Wishnow, PCUA senior vice president of communications and marketing;
  • Matt Bergman, teacher at the Milton Hershey School;
  • Michael Hussey, associate professor at the Widener University School of Law; and
  • Keith Welks, Pennsylvania Treasury Department deputy state treasurer.
This is the first of four quarterly town meetings on financial literacy sponsored in part by PCUA and the PCUF. All four events will air statewide on PCN.

Tech Council excellence awards announced

 Permanent link
MADISON, Wis. (10/24/12)--Four credit unions were honored as winners of the 2012 CUNA Technology Council Excellence in Technology Awards at the council's 17th Annual Conference, Oct. 14-17 in Las Vegas.

The CUNA Technology Council award recognizes outstanding approaches to technology challenges with potential for universal application across the credit union movement. The recipients for 2012 are:

  • CASE CU in Lansing, Mich., for its improvements to provide members access to information through methods aimed at reaching members who are younger, do their banking in less traditional channels, and require more unique, creative ways to reach and service them.
  • OnPoint Community CU in Portland, Ore., for developing an in-house system to recognize threats to member data security and to perform risk assessments based on the needs of each department and to satisfy compliance requirements.
  • OSU FCU in Corvallis, Ore., for its STOP (Security Training Operations Program) with ways to regularly reinforce the importance of personal and credit union data security to its employees.
  • Pioneer West Virginia FCU in Charleston, W.Va., for using technology to help its human resources (HR) department more effectively track and report paid time off and help HR be proactive in resolving issues with employees about their time and better managing and minimizing unscheduled time off.
A panel comprising CUNA Technology Council members selected the winners, based on strategy, process, application and results, without regard to credit union asset size.

For more information, use the link.

W.Va. CU goes digital changes name

 Permanent link
CHARLESTON, W. Va. (10/24/12)--The credit union alleged to be the first institution in the world to develop a remote deposit capture for the iPhone (in 2009)  has done it again.  West Virginia United FCU, based in Charleston, W.Va.,  has gone totally digital and changed its name, to Element FCU.

It no longer has a teller line, according to a feature about the $27 million asset credit union in the Charleston Daily Mail (Oct. 23). Instead, it has iPads, a café and a transaction center.  By breaking down the teller line, the credit union is "getting to the real conversation," Linda Bodie, CEO of Element CU, told the Daily Mail.

Technology is making transactions more personal by eliminating cumbersome data entry and allowing the 11 full-time employees and one part-timer to focus on members, and enabling the credit union to be greener.

Its Element Kiosk is a touch-screen menu that allows members to conduct business online from anywhere Internet access is available, taking extra precaution to verify a member's identity. Members can even snap a photo of themselves on an iPad, smartphone or laptop.  Bodie said this "wow factor" means the member won't be asked to fill out the same form over and over.  "We're using technology to build on personal relationships. We're not using technology to replace the person."

Members can sit in the café and have coffee while discussing their loan. If they want cash back, they enter their request in the kiosk and staff will bring the money to them. In fact, they don't even need to visit the branch.

To celebrate, Element FCU is remodeling its building. It changed its name on Monday and its new logo emphasizes the "me" in Element.  The credit union said it is gaining about 70 to 80 new members a month, largely due to word of mouth.

For the full article, use the link.

IBankrate.comI IFox BusinessI feature CUNA advice

 Permanent link
NEW YORK (10/24/12)--A Bankrate.com article picked up by Fox Business on how consumers should review their credit reports featured advice from the Credit Union National Association (CUNA), while another Fox Business item featured CUNA's take on today's rates and consumer borrowing.

The Monday article mentioned six areas that can provide a picture of a consumer's credit health. They are:

  • Late payments;
  • Judgments, liens, bankruptcies;
  • Active accounts closed or never opened;
  • Hard inquiries;
  • High debt-to-credit limit ratios; and
  • Collection activity.
Under the category of judgments, liens, bankruptcies, Michelle Dosher, CUNA managing editor of consumer publications, said consumers should scan the "public records" section when they receive their credit report.

"If there are any liens or bankruptcies, it's a good way to check," she explained.

CUNA also had a voice in another article posted Monday on Fox Business' website. The article focused on a Bankrate.com survey showing a majority of consumers (74%) aren't inclined to borrow right now, even at today's low rates. CUNA Chief Economist Bill Hampel is quoted, noting that Federal Reserve Open Market Committee announcements on plans to keep rates low for extended periods can, in the short-term, result in less borrowing rather than more.

"If anything, the effect of the announcement itself would be to reduce borrowing today," Hampel told Fox Business. "Some people may want to borrow now because credit is so cheap, but you've just told them you don't need to rush out and borrow now because it is going to be cheap next quarter, next year, the year after that and the year after that."

To read the articles, use the links.

CUNA announces national Maxwell Herring winners

 Permanent link
MADISON, Wis. (10/24/12)--The Credit Union National Association's (CUNA) national awards committee announced recipients of the 2012 Dora Maxwell Social Responsibility Community Service Award and the Louise Herring Philosophy-in-Action Member Service Award. 

Recipients were chosen from among state-award winning entries.

The 2012 Dora Maxwell Award first-place winners include:

  • Renaissance Community Development CU, Somerset, N.J;
  • United Labor CU, Kansas City, Mo.;
  • Health Center CU, Evans, Ga.;
  • Rock Valley FCU, Loves Park, Ill.;
  • Mid Missouri CU, Fort Leonard Wood, Mo.;
  • Alabama CU, Tuscaloosa, Ala.;
  • Credit Union ONE, Ferndale, Mich.;
  • American Heritage FCU, Philadelphia; and
  • Pittsburgh (Pa.) Chapter of Credit Unions.
First-place winners of this year's Louise Herring Award are:

  • Syracuse (N.Y.) Cooperative FCU;
  • St. Louis (Mo.) Community CU;
  • Commonwealth CU, Frankfort, Ky.;
  • State Employees' CU, Raleigh, N.C.; and
  • Erie (Pa.) Chapter of Credit Unions.
"Over the last year, nearly 2.2 million people joined credit unions--the most in that one-year period in more than a decade," said Bill Cheney, CUNA president/CEO. "While many join for the good deal that credit unions offer, many also embrace the philosophy and ideals of our movement, which are embodied by those we honor with these awards.

In fact, it is their personal commitment to credit union philosophy--including commitment to community involvement and member financial education--which ensures a movement that succeeds in offering the best deal to consumers and ever-higher delivery of service excellence," Cheney said. "Congratulations to these honorees, and to all in the movement who share and practice their values."

Dora Maxwell was an original signer of CUNA's constitution and an organizer of hundreds of credit unions nationwide. She also developed volunteer organizer clubs and worked with organizations on behalf of the poor.

The Maxwell award is presented to credit unions in eight asset-size categories and a chapter or multiple credit union group category for outstanding social responsibility projects in their communities. Activities may include: solving core community problems, coordinating supply drives for the needy, raising money or organizing special events for charitable organizations, or mentoring students.

Louise Herring was also an original signer of CUNA's constitution when she was an Ohio delegate to the 1934 national credit union conference in Estes Park, Colo. She saw credit unions as more than just financial institutions and believed they should work to better people's lives.

The Herring award is given to a credit union demonstrating the internal application of credit union philosophy to help better financial matters and increase financial education for its members.  Examples include: exceptional member service, financial counseling for members experiencing difficulties, and educating members on the credit union difference. 

Winning entries will be on display at CUNA's 2013 Governmental Affairs Conference, Feb. 24-28, in Washington, D.C.  The award winners will be honored during a Feb. 27 reception.

For a list of all the winners, use the link.

iFree Pressi Mich. Firsts credit seminar draws crowd

 Permanent link
LATHRUP VILLAGE, Mich. (10/24/12)--Michigan First CU, Lathrup Village, Mich., hosted 160 members for a free education seminar through which members can get free credit reports and credit scores.

The event, presented by credit union CEO Michael Poulos, is held twice a year (Detroit Free Press Oct. 21).

Poulos captured members' attention with one slide showing that a borrower with bad credit spends $8,253.50 more in interest on a five-year car loan than a consumer with good credit.

Recent statistics indicate that lending standards are easing and becoming more accessible for consumers with less-than-great credit, especially those in need of car loans and credit cards, said the Detroit Free Press.

U.S. credit originations are below pre-recession levels but continue to grow, three years into the recover, according to an Equifax report mentioned in the article.

Poulos said he has seen an increase in members who want to improve their credit coming out of the recession. Lending has been picking up in the past year, he said.

To read the article, use the link.

Filene examines member-friendly NII income

 Permanent link
MADISON, Wis. (10/24/12)--A new report from the Filene Research Institute explores how credit unions strike a balance between achieving non-interest income (NII) and averting member disdain for fees.

Click to view larger image Click for larger view
The paper, "In Search of Member-Friendly Noninterest Income," discusses two credit union imperatives: The need for non-interest that supports the operating costs of the credit union, and the imperative to charge only fees that are fair and support services adding value for members. But too many or misplaced fees and credit unions run the risk of alienating members and losing the cooperative ideal that differentiates them in the marketplace.

The report studied credit unions that were stable and depended on NII. The credit unions considered had assets between $50 million and $2.5 billion and finished in the top third in NII between 2008 and 2011. To be further considered, credit unions had to have more than 25 basis points of return on assets in three of those four years and net capital higher than 7% in all the years.

Credit unions were asked to share where they had focused their NII efforts in previous years, and what fees they avoided or discontinued.

NII was broken out into four categories: transaction account income, lending-related income, investment and insurance service income, and other services. In each category, credit unions were asked how important individual income streams were to net income, how much they thought each service added value, whether they had increased or decreased fees in each, and how much pricing flexibility they thought existed.

Click to view larger image Click for larger view
"In search of price flexibility, we found that while respondents think insurance and asset protection items are essential to overall NII, they also feel that there isn't much room to play with pricing," the report said. "Instead, respondents pointed to prices on card replacement, expedited bill payment, and cashier's checks as least likely to bother members."

But "old faithfuls" such as premium checking and skip-a-payment continue to remain popular NII sources. Credit unions also employ new sources such as aggressive collection fees and identity protection services.

Credit union insurance or debit protection coverage were top sources of NII, with 66.7% of respondent credit unions describing it as "important" or "very important" to their NII. Checking account fees were next with 62.1% of credit unions rating it as "important" or "very important."

In terms of value to members, 94.4% of credit unions described guaranteed asset protection coverage as "important" or "very important to their NII. Credit insurance or debt protection coverage was next in value to members with 92.1% of credit unions rating it as "important or "very important."

First time N.Y. Pa. volunteers in joint conference

 Permanent link
ALBANY, N.Y. (10/24/12)--
 Tim Harrington, president, T.E.A.M. Resources talks about a Share the Load business model during the joint Pennsylvania/New York Volunteers Conference in the Poconos. (Photo provided by the Credit Union Association of New York and the Pennsylvania Credit Union Association)
For the first time, volunteer credit union leaders from Pennsylvania and New York combined in the Pocono Mountains Friday and Saturday for a Volunteer Conference jointly sponsored by the Pennsylvania credit Union Association and the Credit Union Association of New York.

The cooperative event began with welcomes from PCUA President/CEO Jim McCormack and CUANY President/CEO William J. Mellin.

Over the next two days attendees heard from Tim Harrington, CPA and president of T.E.A.M. Resources, discussing "Understanding Successful Credit Union Business Models"; David A. Reed on "The Credit Union Experience: Don't Take It for Granted"; and CUANY Director of Compliance Michael Carter on "Succeeding in Today's Tough Regulatory Environment."

Also on the agenda were an interactive panel discussion featuring members of New York's Young Professionals Commission, who covered the group's purpose, programs and projects, and board and supervisory committee breakouts.

For more opportunities for credit union volunteers,use the links.

Game changer Diebold CO-OP pilot ATM video tech

 Permanent link
NORTH CANTON, Ohio (10/24/12)--Credit unions can expect the ATM experience they offer to transform significantly with new video technology that Diebold Inc. and CO-OP Financial Services are piloting at a credit union in Missoula, Mont. The new technology could be a game changer for ATM services.

The technology, Diebold Concierge Video Services, will connect ATM users with call center representatives right at the terminal. It aims to increase efficiencies and add value to self-service transactions at the ATM.  Diebold is a CUNA Strategic Services provider.

Missoula FCU is piloting the service, which enables the credit union to visually connect with members at the ATM to answer questions, fulfill marketing opportunities and process any center-capable transactions from the ATM.

According to Mychal D. Kempt, vice president of the North Canton, Ohio-based Diebold, real-time video enhances the ATM experience for both consumers and financial institutions. "Combined with Diebold's advanced one-to-one marketing software, video enables face-to-face interactions tailored to each consumer. Such personal connections were previously available through limited banking channels," Kempt said.

In the Missoula FCU pilot, Diebold provides member identification and video services to support video capabilities and Rancho Cucamonga, Calif.-based CO-OP Financial Services provides terminal driving capability and network access.

"This is part of a multi-pronged approach we are taking to teller automation, which includes the CO-OP NextGen ATM, developed in partnership with Diebold, to bring shared branching and greater self-service capabilities to ATMs," said Stan Hollen, president/CEO of CO-OP Financial Services.

With the service, financial institutions can transform the self-service channel three ways: enhanced consumer service, expanded access to financial services experts and advanced targeted marketing efforts, said the two companies. The solution can be implemented into Diebold Opteva ATMs, which enabled Missoula FCU to pilot the service without extensive hardware upgrades.

With the service, consumers can get support and address issues that historically prevented successful completion of ATM-based transactions, including service issues such as account maintenance not traditionally offered at the ATM.  Financial institutions can migrate more transactions to the self-service channel.

Credit unions can use one-to-one marketing using Diebold's Agilis Campaign Office self-service marketing solution. For example, the software can remind the consumer that a certificate of deposit will mature soon and give the consumer the option to connect to a representative via video to handle renewal or pursue other sales options.

The new service is being featured this week as part of a panel discussion at the ATM, Debit & Prepaid Forum 2012, which began Monday in Phoenix and continues through Thursday. Missoula FCU Senior Vice President Linda Rayfield will share her experience on how video can enrich members' ATM experiences.

CU System briefs (10/22/2012)

 Permanent link
  • HOLLAND, Mich. (10/23/12)--
    Click to view larger image Click for larger view
    Credit union leaders from Michigan's Moon and Southwest Credit Union Chapters hosted an issues discussion with two Republican congressmen, Rep. Fred Upton, chairman of the Energy and Commerce Committee, and  Rep. Bill Huizenga, a member of the House Financial Services Committee. The event took place in Holland (Michigan Monitor Oct. 22). Topics included regulatory burden, member business lending (MBL), ATM disclosure legislation, government-sponsored-enterprise reform and recent proposals from the new Consumer Financial Protection Bureau. Both lawmakers expressed concern about the growing regulatory burden on small financial institutions. Huizenga updated the group on ATM legislation, which is stalled in the U.S. Senate. He said he is hopeful for a post-election opportunity for the measure to pass the other chamber. Credit union leaders stressed helping small businesses by raising credit unions' MBL cap to 27.5% of assets from the current 12.25%. The Credit Union National Association says that doing so would inject $13 billion into the economy for small business loans and create 140,000 new jobs the first year, without costing taxpayers a dime. Upton and Huizenga, fourth and fifth from the left, respectively, are pictured with chapter leaders. (Photo provided by Michigan Credit Union League) …
  • MERIDEN, Conn. (10/23/12)--U.S. Rep. Joe Courtney (D-Conn.) was special guest at a wine tasting event hosted by the Credit Union League of Connecticut Friday at the Mohegan Sun Casino in Uncasville. Nearly 70 attended. Courtney is a staunch credit union supporter said the league, which noted the event was another opportunity to engage members in the political process. On Sunday, the league's political endeavors continued when the league's CEO, vice president of government relations attended an event for Courtney at the home of a credit union board member. Pictured are, from left: Joanne Todd, CEO of Northeast Family FCU and chair of the league; league President/CEO Tony Emerson, and Courtney. (Photo provided by the Credit Union League of Connecticut) …

Northeast CUs expand shared branching

 Permanent link
MARLBOROUGH, Mass. (10/23/12)--
Click to view larger image Seven New England credit unions inked an agreement with CO-OP Shared Branching on International Credit Union Day Thursday. From left are: Sarah Canepa Bang, chief strategy officer, CO-OP Shared Branching; Nancy Zeppa, executive vice president; chief operating officer, Rhode Island CU; Shelley Robinson, CEO, Tewksbury FCU; Kristy Randazzo, Dover Branch manager, and Courtney Tyler, assistant vice president marketing and sales, both of Holy Rosary FCU; Mark Warner, executive vice president, Triangle CU; and Dan Egan, president, New England Credit Union Services LLC. (Photo provided by New England Credit Union Services LLC)
even credit unions headquartered in Massachusetts, New Hampshire and Rhode Island celebrated the International Credit Union Day Thursday by joining the CO-OP Shared Branching program.

The group met at America's Credit Union Museum to celebrate one of the most striking manifestations of the credit union difference, shared branching, said a press release from New England Credit Union Services (NECUS)  LLC, which is owned and operated by the Massachusetts Credit Union League, the New Hampshire Credit Union League and the Credit Union Association of Rhode Island.

The new additions increased the number of credit unions participating in the three states to 31. These credit unions serve more than one million members through 132 branches.

The new program participants are CPCU and Tewksbury FCU in Massachusetts; Holy Rosary CU and Triangle CU in New Hampshire, and Cranston Municipal Employees CU, Greenwood CU and Rhode Island CU in Rhode Island.

"Shared branching is the answer to the challenges that credit unions face today and in the future," said Daniel Egan, president of NECUS LLC and president of the leagues. "It is, in fact, the quintessential credit union effort; and if every branch of every credit union were in the shared branching network, we would truly leapfrog the banks in terms of convenience," he added.

Bonnie Doolin, chief operating officer of NECUS, which is a partner of Rancho Cucamonga, Calif.-based CO-OP Financial Services, noted that the network's members have access to more than 7,100 locations throughout the U.S. "That is a larger number of locations than any financial institution in America, and, best of all, they are through credit unions," she said.

"Shared branching is the best way to demonstrate the credit union spirit of cooperation," said Sarah Canepa Bang, chief strategy officer, at CO-OP Shared Branching.

"We have a number of members who go to Florida for the winter," said Triangle CU CEO Maurice Simard. "Shared branching makes it possible for us to be the members' full service, personal financial institution even when they are 1,500 miles away from home. That's a huge competitive advantage."

CU in Mass. paper Small biz struggle need jobs bill

 Permanent link
WORCESTER, Mass. (10/23/12)--A Worcester, Mass. newspaper's article about small businesses' struggles with costs and regulations, campaign promises, and consumers' lack of spending features credit unions' solution: the Credit Union Small Business Jobs Bill, S. 2231.

"Small business needs to see that the economy is improving--if not quickly, at least steadily," said Karen E. Duffy, president/CEO of the $84 million asset Worcester CU, in the article published Sunday by the Worcester Telegram & Gazette and entitled, "Small businesses struggle with costs and regulations."  She noted a "phenomenal" increase in regular savings accounts, and said consumers are "risk-averse," tending to keep more of their cash than spend it.

When consumers aren't spending at the retailers, it spills over into the credit union in the terms of credit.  If consumers don't buy things, they're not using the credit available to them, even when they are able to use it, she said.

While both parties want to help business, partisan bickering has hurt worthwhile legislation, including the Small Business Jobs Bill, said Duffy, who is former chairman of the Massachusetts Credit Union League, having served 18 years on the league board. She also chairs the league's legislative affairs committee.

"The president has put forward some jobs bills, but they have all been rejected, because both parties are not willing to work together," Duffy told the newspaper. She noted that credit unions' Small Business Jobs Bill would provide more credit without using taxpayer funds.

The Credit Union National Association (CUNA) and credit unions are urging Congress to pass the bill, which would raise credit unions' member business lending cap to 27.5% of assets from the current 12.25%. That, in turn would make $13 billion available through small business lending and help create 140,000 jobs in the first year, without expense to the taxpayer.

Massachusetts league President Daniel F. Egan Jr. also was quoted in the article, noting that the league was backing a candidate who has been a "strong and vocal proponent of the benefits that credit unions provide to working families."

For the full article, use the link.

Retailers file papers for interchange settlement

 Permanent link
NEW YORK (10/23/12)--A possible settlement in retailers' class antitrust lawsuit against Visa and MasterCard over credit card interchange fees was filed Friday by class counsel for the plaintiffs in U.S. District Court for the Eastern District of New York.

They filed a 387-page Definitive Settlement Agreement and a motion requesting that U.S. District Judge John Gleeson provide preliminary approval of the agreement, which would end after seven years of litigation, including two in mediation.

A number of major retailers are opposed to or are challenging the settlement, saying the settlement left credit card issuers with too much control over swipe fees. The National Association of Convenience Stores and the National Retail Federation denounced the settlement when it was first announced July 13 (Forbes July 25). In September, the NRF, which was not party to the original lawsuit, said it would try to block the $7.25 billion settlement but was not certain outside parties would be permitted to intervene (News Now Sept. 12).

Walmart, the world's largest retailer,  and Target also issued statements opposing the settlement. Walmart said the proposal has already cost consumers tens of billions of dollars each year year, would require merchants to broadly waive their rights to act against card networks for detrimental conduct or acts, and would constrain emerging payments innovation. Target said the settlement "is bad for both retailers and consumers" and would "perpetuate a broken system,' restrict retailers from future legal action and offer no long-term relief for retailers or consumers. Both indicated they would seek reform (Forbes).

Credit unions were not a party to the litigation, but will be impacted by the injunctive relief settlement terms--temporary reduction in credit card interchange, surcharging and buying groups. The reduced credit card interchange rate fees proposed by the settlement could cost credit unions with credit card programs up to a total of $50 million, the Credit Union National Association (CUNA) has estimated (News Now July 16).

The defendants, Visa, MasterCard and several large banks, agreed to pay billions to merchants. The settlement would require a reduced interchange rate fee of 10 basis points for an eight month period, likely beginning in mid-2013, and would apply to all card issuers, including credit unions.

If the total credit IRF reduction is $1.2 billion, credit unions with credit card programs would lose about $50 million in total revenues, or about 0.5 basis points on their total assets, CUNA has said. The loss would be concentrated among a  relatively small number of credit unions that have very active credit card programs, he noted.

The settlement also calls for  Visa, MasterCard and the banks to create a $6.05 billion fund (which would be a record amount for a class action settlement) to repay retailers for past fees charged. It also stipulates that retailers would be permitted to assess "check out" fees or surcharges on credit card purchases, which has previously been prohibited by Visa and Mastercard rules.

CUNA President/CEO Bill Cheney said that the surcharging aspect of the settlement--as well as the provision that consumer-owned credit unions would see a reduction in interchange revenue-- are signs that the settlement does nothing for consumers.

"We all know that interchange revenue enables credit unions to provide essential and cost-effective credit card services to their consumer members. We also know that the temporary reduction in interchange revenue that credit unions will experience will not likely find its way into the pockets of consumers, but will more likely into those of merchants," Cheney said.

However, the credit union leader added that "importantly, this settlement means the issues in this case are now closed, once and for all."

According to Robert Stolebarger, a partner at Bryan Cave LLP and antitrust counsel for the Electronic Payments Coalition (EPC), the settlement "is the culmination of seven years of litigation, two full years of mediation, and with the consent of all parties, the direct oversight of Judge Gleeson. As with any settlement, both sides had to give a little or a lot here and there and to reach a compromise--and as a result, no one is entirely happy. "

The EPC said it was "highly confident" the court would grant the preliminary approval in or around January and provide final approval later in 2013.

Mobile banking white paper offers strategies

 Permanent link
MADISON, Wis. (10/23/12)--A new white paper offers consumers and businesses--including credit unions--information to support a mobile banking strategy, along with key trends, mobile banking best practices, and how to confront the biggest developmental challenges.

"For a variety of reasons mobile banking has moved way beyond simple balance inquiries to include money transfers, both domestic and international; peer-to-peer payments; and even commercial payment processing," said the paper, "The Promise of Mobility: A Bank in Every Pocket." The paper is from Backbase, a New York-based mobile banking provider.

"Banks are also using mobile for loyalty-related offers, which sometimes involve location-based services, bar code scanning, etc. This is why understanding the complexity of the entire customer journey is so important," the paper said.

Backbase noted that other services provided with mobile banking might include:

  • Access to loan statements;
  • Blocking of lost or stolen credit cards;
  • Mutual fund/equity statements;
  • The status of requests for credit, mortgage approval, and insurance coverage, and
  • An ATM locator.
The initial step for financial institutions to take is "an outside-in approach to the strategy; to think like a customer and not just a bank," the paper said. "Then they need to prioritize. Mobile devices require you to focus on only the most important data and actions in an application. There simply isn't room on a smartphone screen for extraneous, unnecessary elements. If you design for mobile first, you can create agreement immediately about what matters most. You can then apply the same rationale to the desktop version of your Web product."

Next, credit unions must develop ways to provide more self-service for members. Self-service creates more satisfaction through time saved and consumer control, and cuts costs said Backbase. Also, credit unions should investigate ways to best leverage each channel to reach their members.

To download the paper, use the link.

In a related matter, Dow Chemical Employees' CU (DCECU) in Midland Mich. introduced mobile banking as part of its 75th anniversary celebration, according to the Michigan Credit Union League (Michigan Monitor Oct. 22).   

Members of the $1.44 billion asset DCECU who use the credit union's Cyber Connection Internet Banking are eligible for self-enrollment in mobile banking, which they can use to view account balances, to transfer funds between accounts and pay bills from any wireless device (smartphones and tablets), the league said. Also, the DCECU's mobile applications feature a built-in locator to find the nearest surcharge-free ATM.

Adoption of the mobile technology has been quick--10 times faster than the credit union expected--with one third of DCECU members signing up for the service in the first two months of availability, the league said.

Michigans CU Lunch Local deemed a success

 Permanent link
LANSING, Mich. (10/23/12)--Sixty Michigan credit unions participated in an Oct. 16 CU Lunch Local, a cash mob that pumped tens of thousands of dollars into the state's economy through its small businesses, the Michigan Credit Union League said Monday.

Many credit unions provided their employees with meals from local eateries, while others offered members and staff alike Michigan-made cookies, donuts, cider, and other treats (Michigan Monitor Oct. 22).

The idea for the grassroots event came from a group of credit union marketers who wanted to demonstrate Michigan credit unions' commitment to small businesses. Michigan CU Capital, an offshoot of the Michigan Business Connection credit union service organization, then planned the event and partnered with MCUL to publicize it.

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' member business lending (MBL) cap to 27.5% of assets from 12.25% so that more loans could be made to small businesses, which are considered a key to improving the economy. CUNA and credit unions say that increasing credit unions' MBL cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

N.C. CUs conduct 22 voter registration drives

 Permanent link
RALEIGH, N.C. (10/23/12)--North Carolina credit unions, in partnership with the North Carolina Credit Union League (NCCUL), are establishing themselves as election resources by holding  22 voter registration drives for this year's election.

Six of the drives were held prior to the primary presidential election last spring, and 16 before the general election, which will be held in two weeks (The Weekly Conversation Oct. 19).

"We registered first-time voters of all ages, new U.S. citizens and assisted voters with changing their party affiliation or updating their home address information," said Pam Melton, NCCUL director of political affairs.

"While it was exciting to register first-time voters, it was also rewarding to be able to provide a very welcoming atmosphere where members felt comfortable enough to ask questions about voting and the election process," she added. "We showed people their voter registration information on-line, looked up their polling location, provided them with information about early voting and looked up sample ballots.

"People are extremely busy with family and work responsibilities so to be able to help them remove one more thing off of their to-do-list was truly worth hosting the drives," Melton concluded.

The league also is launching a voter registration guide to help credit unions become election resources.

U-Mass professor in IN.Y. TimesI blog Switch to CUs

 Permanent link
NEW YORK (10/23/12)--Credit unions offer lower and more reasonable fees than banks, and are a good alternative for consumers who are fed up with bank fees, a University of Massachusetts-Amherst professor said in a New York Times blog Monday.

"Credit unions typically charge much lower fees than banks and offer more attractive interest rates," said Nancy Folbre, an economics professor at the University of Massachusetts-Amherst. "In rankings of customer satisfaction, they beat for-profit banks hands down."

This is the second favorable article Folbre has published about credit unions in recent months.

Fees for late payments and overdrafts now are a huge addition to banks' balance sheets, in part because consumers are paying more attention to interest rates than to fees, Folbre wrote.    

"Credit unions charge fees, too, but they don't design them to maximize revenue, because their goal is to serve their member-owners, not to turn a profit," Folbre added. "That's why their fees are lower and their loans more open to renegotiation.

"Credit unions are painfully small, compared with multistate megabanks, representing only about 6% of all financial institution assets in 2011," Folbre wrote. "But they are growing fast on the basis of their reputation for excellent customer service.

"Your fees, your fault--especially if you pay them to banks instead of to a local credit union," she concluded.

To read the article, use the link.

ICU Day was an international affair

 Permanent link
MADISON, Wis. (10/23/12)--International Credit Union Day and its theme, Members Matter Most, were celebrated worldwide Thursday, with many choosing to observe the International Year of Cooperatives as well.

Michigan State Sen. Michael Nofs (R-Battle Creek), right, the Senate Banking and Financial Institutions vice chairman, introduced a Senate resolution declaring Oct. 15-19 as Credit Union Week in Michigan. Nofs is joined by Vicki Baron, Michigan Credit Union League state legislative manager. (Photo provided by the Michigan Credit Union League)
Canadian Prime Minister Stephen Harper extended personal greetings to the movement to mark ICU Day. "Canada's credit unions play an important role in our nation's economic prosperity," he said. "International credit ratings agencies acknowledge that Canada is home to some of the strongest financial institutions in the world. The health of our financial institutions, including our credit unions, has been a critical factor in helping Canada weather the global economic crisis and emerge relatively unscathed."

Saskatchewan credit unions are celebrating their 75th anniversary during the International Year of the Cooperatives (ENP Newswire Oct. 19). 2012 was designated by the United Nations to be the International Year of the Cooperative, with the theme "Cooperatives build a better world."

On Aug. 2, 1937, the first Saskatchewan credit union, Regina Hebrew Savings and Credit Union, was incorporated. This was followed in the same year by the creation of Moose Jaw Credit Union, Star-Phoenix Savings and CU, Sherwood CU, Regina Wheat Pool Employees' Savings and CU and Sacred Heart Parish Savings and CU. Today, 60 Saskatchewan credit unions serve about 500,000 members with $16 billion assets.

Alberta's credit unions also recognized ICU Day. Combined assets of Alberta credit unions as of July 31 were $19.4 billion (Yahoo Canada Finance Oct 18).

In the United Kingdom, more than one million people and 12,000 junior savers use credit unions, according to the All Parliamentary Party Group on Credit Unions (Global News Oct. 19).

In Ghana, Dr. Jakpasu V.K. Afun Rector of the Ho Polytechnic said credit unions are instrumental in transforming the lives of many people in the country and moving them up the social ladder (Ghana News Agency Oct. 19.) The credit union idea was introduced in what was then the Gold Coast by Reverend Father McNulty, an Irish Canadian priest in 1955.

Among the ways credit union in the U.S. marked ICU Day:

  • Employees of SPE FCU, State College, Pa., performed random acts of kindness, according to the Pennsylvania Credit Union Association (Life is a Highway Oct. 22). The credit union gave a way card that read, "Today is your lucky day! Happy International Credit Union Day!" On the back was the SPE FCU logo along with a message for people to share their ICU Day story on its Facebook page. Among the acts of kindness SPE FCU employees performed were paying for people's gas, distributing gift cards, buying lunches, and dropping by several community-based service providers with needed items.
  • A financial literacy book, "We Are Money Smart," published with the assistance of a $10,000 grant by the Pennsylvania Credit Union Foundation, was released on ICU Day (Life is a Highway Oct. 22). The foundation expects that "We Are Money Smart" will reach an initial audience of 1,200 in central Pennsylvania, with the potential to impact thousands of others as credit unions become more involved.
  • Pennsylvania Gov. Tom Corbett issued a proclamation declaring Oct. 14-20 as Credit Union Week in state, and Oct. 18 as Credit Union Day in Pennsylvania (Life is a Highway Oct. 22). The proclamation recognized Pennsylvania's 530 credit unions for "empowering people to improve their economic situations" and for providing low-cost financial services to members, as well as sponsoring activities to support charities and their communities.
  • In Michigan, State Sen. Michael Nofs (R-Battle Creek), the Senate Banking and Financial Institutions vice chairman, introduced a Senate resolution declaring Oct. 15-19 at Credit Union Week in the state, according to the Michigan Credit Union League (Michigan Monitor Oct. 22). Nofs recognized in front of the full Senate that credit unions have a tradition of innovation and leadership among the nation's financial institutions and they are rooted in the communities in which they serve.

PCUA monitoring Admin Bank Attachment program

 Permanent link
HARRISBURG, Pa. (10/23/12)--The Pennsylvania Credit Union Association (PCUA) is monitoring the state's Administration Bank Attachment program to ensure credit union have sufficient time to comply with the recently passed state legislation.

The passage of Act 85 of 2012 gives the Pennsylvania Department of Revenue the authority to conduct an administrative bank attachment program, beginning Jan. 1, according to PCUA (Life is a Highway Oct. 22). The act offers a detailed outline for the department to directly attach a delinquent taxpayer deposit account and to work with credit unions if it is necessary to seize members' money from their account proceeds.

The department will select a case for administrative attachment when:

  • Tax liability has been assessed;
  • Taxpayer's appeal rights have expired or the taxpayer's liability has been sustained through the appeals process;
  • Taxpayer has defaulted on a duly executed deferred payment plan (DPP) or declined to execute a DPP;
  • A tax lien has been filed; and
  • The taxpayer has been advised of all potential enforcement actions, including administrative bank attachment.
The department's guidelines also specify rights and remedies that are available to taxpayers, policies regarding spousal relief and severe economic hardship, and notification to financial institutions.

New scams Malware targets mobile devices VPNs cloned PCs

 Permanent link
WASHINGTON (10/22/12)--Credit unions doing business online or via mobile devices soon will cope with the newest wave of security threats: malicious software programs that attack mobile device operating systems, armies of botnets that "clone" computers, and attacks on remote virtual private networks (VPN) or servers. But tech companies are offering new technologies to combat these.

The stepped-up denial of service attacks being experienced by a number of large banks the past month is only part of the escalating war with cybercrime. Many institutions are scrambling to prevent more sophisticated attacks from harvesting consumers' data.

"Fraud prevention is more about the journey, because there is no final destination," said Julie Conroy McNelley, Aite Group research director, speaking about the expanding threat landscape, attack vectors and defense mechanisms at the 2012 ThreatMetrix Fraud Fighters Summit Oct. 10-12 in Napa Valley, Calif.

"In regard to financial institutions, merely sticking with the FFIEC  [Federal Financial Institutions Examination Council] bare minimums is not enough--the threat environment is moving much too quickly. They must take the requirement of periodic risk assessment very seriously to stay one step ahead of today's sophisticated cybercriminals," McNelley said, according to a press release from ThreatMetrix, a provider of integrated cybercrime prevention solutions including device identification malware detection.

In a new white paper, "Protecting Against Advances in Web Fraud: Uncovering Fraudsters' Tracks and Keeping Online Users Secure,"ThreatMetrix notes that the key technique fraudsters use is to "mask their true location and computer characteristics." They especially misrepresent their browsers and their Internet Provider (IP) addresses.

"Fraudsters have previously relied on the use of proxies to hide their IP addresses and hence their true locations," the paper said. "However, as proxy piercing technologies that discover the true IP signature of proxied machines have become more common, hackers and fraudsters have started to rely on VPN servers instead. Connections from behind VPN servers are extremely difficult to detect, and this technique has allowed fraudsters to continue to operate unfettered."

Another major component of the fraud network is the malware living on consumers' desktops, laptops and mobile devices. It can allow hackers to collect critical information from legitimate users and fully control any Internet sessions initiated by the device. "Trojans, man in the browser software, key-loggers and other malware compromise the user sessions initiated by good customers without their knowledge and are responsible for millions of dollars in fraud annually," said the white paper.

Fingerprinting involves measuring a browser, operating system and connection's attributes and generating a device's risk profile by installing software on the device or using a remote profiling server to prevent fraud. Cyber criminals will try to bypass device fingerprinting by installing malware on a device to steal online banking credentials and clone the user's computer with virtual machine synching and targeting certain kinds of information, such as account balances. The fake banking session on the cloned computer is proxied through the victim's machine and uses the victim's real IP address during the authentication process for banking online.

Tom Donlea, managing director of Americas, Merchant Risk Council, discussed at the ThreatMetrix conference how "clean fraud"--a transaction that passes a merchant's typical checks and appears legitimate even though the transaction is actually fraudulent-- is a primary area of concern for merchants.

He suggested merchants combat clean fraud by "using device fingerprinting, separating the new customers from the loyal ones, locking down purchase delivery, reviewing real-time order feedback, and analyzing system data to understand fraudster behavior. By working together as fraud fighters and sharing this breadth of knowledge, we can stay ahead of these and other traditional and emerging attacks."

One of the services offered by ThreatMetrix is aTrustDefender ID, a VPN Detection technology that "for the first time allows fraud analysts to detect fraudsters trying to hide their identity and true location by using a VPN servicer."

CU System briefs (10/19/2012)

 Permanent link
  • MARION, Iowa (10/22/12)--Andrew Hanson, 32, of Marion, Iowa, has been arrested in connection with the robbery Wednesday of the Marion branch of Cedar Rapids, Iowa-based Linn Area CU (Associated Press via whbf.com and sfgate.com Oct. 18). The robbery occurred at 10:25 a.m. when a man handed a teller a note demanding cash. No weapon was displayed and no one was hurt in the incident. The man fled with an unidentified amount of cash. Police officers searched the area and allegedly found a bag containing money near where Hanson was arrested, police said …
  • HIGHTSTOWN, N.J. (10/22/12)--The New Jersey Credit Union Foundation raised more than $11,000 in a silent auction held during the New Jersey Credit Union League's Annual Meeting and Convention in Atlantic City.  The funds raised will support the foundation's financial literacy initiatives, including a partnership with the state Coalition for Financial Education and its Financial Reality Fairs program.  A second-chance auction will be announced soon for items not sold in the first auction, said the league's newsletter, The Daily Exchange (Oct. 19) …
  • ALEXANDRIA, Va. (10/22/12)--CommonWealth One FCU, based in Alexandria, Va., is offering turbo-charged auto loans with a 90-day no-down-payment option through Dec. 31. Members can get rates as low as 1.49% annual percentage rate (APR) for new cars up to 60 months 1.99% APR for used cars whose model year is 2007 or newer, and 3.49% APR for used-car models from 2006 and older. Members also can delay payments up to 90 days if they purchase a new car, sports utility vehicle or truck, and they can refinance their current auto loans with the special rates and no-payment down offers, said the more than $300 million asset credit union …
  • FARMERS BRANCH, Texas (10/22/12)--Funeral services were held Friday for Bert O'Neall, former CEO of Amarillo (Texas) Community FCU, who died Oct. 16. O'Neall was CEO of the credit union from 1968 to 1992, said the Texas Credit Union League (LoneStar Leaguer Oct. 19). O'Neall served credit unions for 33 years as a volunteer and in management. He was a director of the league from 1986 to 1988 …

BizKid contest for young social entrepreneurs

 Permanent link
MADISON, Wis. (10/22/12)--Biz Kid$ has launched a new contest for kids, "Build Your Social Biz," a hunt for America's most worthy fledgling social entrepreneurs.

The competition is sponsored by global organization Ernst & Young LLP. Winner of the competition will receive $3,000 and mentoring from an Ernst & Young business expert.

Biz Kid$ is the Emmy Award-winning and credit union-funded public television series that teaches kids about money management and entrepreneurship.

"This is a great opportunity for credit unions to pass along to their members," said Danielle Brown, the National Credit Union Foundation's (NCUF) national coordinator for Biz Kid$.

Young business owners who have an idea to improve their community can capture that vision in a one-minute video and compete for cash prizes to fund their venture.  The contest is open to existing businesses or enterprises that are still a gleam in an entrepreneur's eye.

Social entrepreneurs use their business structure or profits to effect a social, cultural or environmental change to make a difference. The social biz is not a limited-period fundraising vehicle but is an actual business, said NCUF, which oversees fundraising, outreach and administrative responsibilities for Biz Kid$.

Deadline for entries is Dec. 31. Participants can fill out the online entry form on bizkids.com and upload a one-minute video pitch about why their project should win. Entries will not be judged by the quality of the video but by the presentation of the vision for the social enterprise.

A panel of judges will cull the top five entrants and the names will be posted on the Biz Kid$ website by mid-February. The winner will be chosen by popular vote, which will take place over four weeks, and will be announced by the end of March.

First place will win $3,000 and a lunch with a special guest, the runner-up will win $1,500, and three honorable mentions will receive $500 each. All finalists will be paired with an expert mentor chosen to fit the nature of their business.

During the past six years, more than 290 credit unions and affiliated organizations have raised more than $13.2 million to support the show's production, website and curriculum. Every episode begins and ends with a narrator reminding viewers that: "Production funding for Biz Kid$ is provided by America's Credit Unions, where people are worth more than money."

For more information, use the links.

N.Y. foundation awards 40K since January

 Permanent link
ALBANY, N.Y. (10/22/12)--The New York Credit Union Foundation has dispersed $40,651 since January in grants to New York credit unions and credit union professionals.

During the foundation's June-September grant cycle, five credit unions received Financial Fitness Grants to fund general operating needs to improve member service. Two credit unions received Smart Money Grants to help fund programs and services that promote financial literacy and independence.

A total of $6,800 in Financial Fitness Grants was awarded. Credit unions receiving grants included:

  • Erie County Employees FCU, Buffalo, $1,100 to purchase an ATM machine at a new location;
  • MPO FCU, Middletown, $1,500 to purchase firewall software and a license update;
  • Mount St. Mary's Hospital FCU, Lewiston, $1,500 to purchase a core processing system upgrade;
  • SUNY Geneso (N.Y.) FCU, $1,500 to purchase teller-station equipment (printers); and
  • UHS Employees FCU, Binghamton, $1,200 to purchase a Lenovo ThinkPad laptop.
Smart Money Grants totaling $2,750 were awarded. Credit unions receiving grants included:

  • Syracuse (N.Y.) Cooperative FCU, $1,500 for a Matched Savings Program; and
  • WESTAR FCU, Camillus, $1,250 to buy software for and host a Mad City Money event.

WOCCU seeks U.S. interns at Dominican Republic CUs

 Permanent link
MADISON, Wis. (10/22/12)--World Council of Credit Unions (WOCCU) is seeking U.S. credit union applicants for its International Credit Union Leadership Program next taking place in the Dominican Republic in January.

The program, funded by a grant from the U.S. Department of State, Bureau of Educational and Cultural Affairs, Office of Citizen Exchanges, is part of the larger U.S. Department of State Professional Fellows Program.   

In June, World Council of Credit Unions' International Credit Union Leadership Program participants and their Guatemalan hosts delivered services to rural members through a credit union's mobile branch. (Photo provided by the World Council of Credit Unions)

Click to view larger image
Promoting internships for young credit union professionals from countries worldwide, the program is designed to facilitate idea exchanges, promote foreign language skill development, enhance cultural diversity and improve problem-solving skills as they relate to credit union development and management on a global basis. Also, participants will focus on finding new ways to attract younger members to their credit unions, said WOCCU.

In the program's first phase, 10 Guatemalan participants interned at credit unions in Iowa and California. As part of the reciprocal exchange, nine U.S. credit union professionals then interned in Guatemala. Nine representatives from the Dominican Republic now are studying credit union best practices in Wisconsin and North Carolina.

Recruiting has started for the fourth phase, which seeks 11 U.S. credit union professionals to intern at credit unions in the Dominican Republic. The internships, which run Jan. 13-26, offer an opportunity for emerging credit union leaders to better understand how Dominican credit unions serve underserved populations and support their communities through member education and other special initiatives, said WOCCU.

The program provides each participant with free lodging through a local host family, a food stipend, local transportation, travelers insurance and a modest communications stipend. Applicants must be able to participate in the full two-week program to qualify for selection. It is the applicants' responsibility to arrange for time away from their credit unions prior to their participation. The sponsoring U.S. credit union is responsible for covering an airfare cost of $1,350 as a sign of commitment to the professional development of its staff.

To be selected, U.S. program participants must:

  • Be 40 years of age or younger on Sept. 1, 2011;
  • Demonstrate personal commitment and the ability to significantly influence credit union operations;
  • Show leadership, entrepreneurial skills and demonstrate how personal initiative has contributed to credit union development;
  • Exhibit the potential to advance the national or international credit union system through initiatives that would also foster community development;
  • Be actively involved as an employee or board member of a credit union or organization affiliated with WOCCU through the Credit Union National Association or a state credit union league;
  • Be available to travel on the specific dates outlined by the program; and
  • Have intermediate to advanced Spanish language skills.
Participants are required to submit an application with an essay and pass a phone or Web interview process.

For more information, use the link.  Applications must be submitted by Nov. 16 to Michael Suing, WOCCU program specialist, msuing@woccu.org or by fax at 608-395-2001. Applicants should confirm the receipt of faxed submissions by e-mail. Candidate interviews will take place by phone or a Web-based program the week of Nov. 26.

Best-seller Maynard makes difference for CUs staff

 Permanent link
FAIRBORN, Ohio (10/22/12)--
Click to view larger image Kyle Maynard,  center, who was presented Wright-Patt CU's "Making a Difference" award, told his inspiring story to send off more than 500  Wright-Patt employees to volunteer at 25 community organizations. He is with Wright-Patt President/CEO Douglas Fecher and Vice President of Human Resources Shanda McKinney. (Photo provided by Wright-Patt CU)
Fairborn, Ohio-based Wright-Patt CU (WPCU) presented its "Making a Difference" award Oct. 8  to Kyle Maynard, a congenital amputee, champion athlete, motivational speaker and best-selling author, for outstanding personal achievements and inspiration of others.

Maynard spoke to more than 500 WPCU partner-employees and sent them off to spend their afternoon volunteering at 25 Southwest Ohio community organizations. Overall, more than 1,000 volunteer hours were logged that day by the group.

Maynard is the author of a book, No Excuses. "He never let his condition get in the way of his desire to wrestle competitively and to reach the summit of Mt. Kilimanjaro on his own," said Shanda McKinney, vice president of human resources at the $2.4 billion asset credit union. McKinney presented Maynard with the award.

WPCU President/CEO Douglas Fecher said that the credit union had Maynard "send everyone off to their afternoon volunteer activities because his words and his drive should be something that every partner-employee relates to as they make no excuses to accomplish their own personal goals." He noted that "everyone has a story and we never want to forget that at Wright-Patt CU.

Since January 2011, the credit union's employees have worked more than 2,000 volunteer hours for the 25 community organizations.

CUs establish wildfire relief funds

 Permanent link
LEMMON, S.D. and COLORADO SPRINGS, Colo. (10/22/12)--Two credit unions, one in South Dakota and one in Colorado, have established separate wildfire disaster relief funds to assist local communities impacted by the fires.

Click to view larger image Ent CU Executive Vice President Barb Winter (center), presents Ent employee donation checks to help victims of last summer's Waldo Canyon Fire in Colorado Springs, Colo., to Bob Cutter, president of Colorado Springs Together (left), and Thomas Gonzalez, American Red Cross Pikes Peak Chapter CEO. (Photo provided by Ent CU)
Dakota Plains FCU's President/CEO Peter Butterfield announced Thursday that the $2.4 million asset credit union based in Lemmon, S.D., has established a "Bucyrus Disaster Relief Fund" at its Hettinger, N.D. branch.

Bucyrus, a small farming community in Southwestern North Dakota, was devastated by a fire Wednesday. While there were no major injuries, the property loss was immense for the town, which has a population of 27, according to the latest census. The state fire marshal is investigating the cause of the fire that also destroyed about 70 electrical power poles and temporarily closed U.S. Highway 12. The area has been extremely dry this fall and winds were reported to be as high as 71 mph the day of the fire, reported the Credit Union Association of the Dakotas.

Also, the credit union established a $50,000 pool of low-interest loans for members affected by the fire. New members also will be eligible for the loans. The maximum loan amount will be $5,000 per household. The annual percentage rate will be 1.5% to be paid back in 60 months. The loans will be administered through the credit union's Lemmon or Hettinger branches.

The credit union will accept donations from anyone wanting to help the fire victims.  Donations may be made payable to: Bucyrus ND Disaster Relief Fund, c/o Dakota Plains FCU, 221 S. Main St., PO Box 1020, Hettinger, ND 58639.

In another wildfire, employees of Ent CU in Colorado Springs, Colo., raised $7,800 to assist local organizations working to support recovery efforts for community members impacted by the Waldo Canyon Fire, which began on June 23 and raged through August. The funds will be donated to Colorado Springs Together and the American Red Cross Pikes Peak Chapter.

The $3.6 billion asset Ent also has supported both local non-profits with corporate donations and in-kind services--$40,000 in monetary donations to Colorado Springs Together and $10,000 to the American Red Cross.

Eight trained Ent employees volunteered more than 160 hours of their time to support American Red Cross shelter operations for evacuees during the Waldo Canyon Fire in Colorado Springs until national assistance teams arrived.

"Ent is proud of our employees' efforts to support our community after such a tragic event," said Charles Emmer, CEO of Ent. "Our corporate donations are directed to these local non-profits in order to assist them in providing critical recovery services."

The Waldo Canyon Fire--the most destructive fire in Colorado history--swept through Colorado Springs in June, burning 346 homes and killing two people (The Denver Post Sept. 13). Last month, investigators said they believe the fire started within three miles of the Waldo Canyon trailhead off of U.S. Highway 24. The fire was caused by humans, investigators concluded.

NIHFCU lets staff charge electric vehicles at work

 Permanent link
ROCKVILLE, Md. (10/22/12)--The National Institutes of Health FCU (NIHFCU), Rockville, Md., has initiated a pilot program in which NIH commuters can charge their electric cars while at work.

The credit union is financially underwriting the cost of the energy use in an effort for NIH to reduce fossil fuel consumption and pollution.

There are six electric vehicle charging stations in NIH's parking garages. The charging stations are supported by the parking staff at the NIH headquarters in Bethesda, Md. The parking spots are painted "eco" green and labeled "EV" for electric vehicle.

Charging stations are free for commuters throughout the duration of the pilot program, which is anticipated to end this year. Owners of vehicles like the Chevy Volt and Nissan Leaf already have taken advantage of the pilot program's electric powering stations.

NIH plans to open charging stations at other locations around the Bethesda campus in the future by allowing commuters to pay for the energy their cars use to recharge.

U.S. CUs ramped up the ICU Day activities

 Permanent link
MADISON, Wis. (10/22/12)--Credit union activities on International Credit Union Day Thursday ranged from the foot stomping--live bluegrass music--to the more conservative--a discussion on the role of supervisory committees. But celebrations nationwide highlighted a common theme: Members Matter Most.

Credit unions have celebrated ICU Day on the third Thursday of October since 1948. The day reflects upon the credit union movement's history and promotes its achievements. It is a day to recognize the dedication of those working in the credit union industry, to appreciate current members and to invite eligible consumers to join credit unions.

Credit unions and chapters throughout North Carolina celebrated ICU Day last week, according to the North Carolina Credit Union League (The Weekly Conversation Oct. 19).

Among the ways North Carolina chapters celebrated:

  • Forty people gathered for the Foothills Chapter celebration in Hickory Tuesday evening. Magician Sammy Cortino provided entertainment. The chapter awarded prizes, including gift cards to local restaurants and gas stations. Attendees also donated jars of peanut butter for the Greater Hickory Co-operative Christian Ministry.
  • A bluegrass band provided the entertainment Western Chapter's celebration. About 110 people representing most of the chapter credit unions attended the event. Kelbio Madera, a credit union loan officer from the Dominican Republic who is interning with United Services CU, Asheville, was a special guest of the credit union. The chapter also awarded prizes.
  • The Southeast Chapter gathered at the Duplin Winery Thursday evening to celebrate ICU Day. Frank Drake, an attorney with the law firm Smith Debnam, was the guest speaker. Drake discussed the role of the supervisory committee and how to attract and develop board talent. He also discussed power-of-attorney documents. The chapter raised more than $160 in a split-the-pot event, and gave out door prizes.
  • CUaware, a league council for credit union employees, celebrated ICU Day at a local Moroccan restaurant in Raleigh. The group socialized with credit union representatives from the Dominican Republic on a World Council of Credit Unions exchange program.
  • Seventy representatives of the Northwest Chapter gathered in downtown Winston-Salem. The evening's events included bingo with special prizes. Representatives from iCan House and the Second Harvest Food Bank spoke about the mission and impact of their non-profit organizations. The chapter raised funds for the food bank through its annual golf tournament earlier this year. The chapter also is selling raffle tickets for special holiday prizes to raise funds for iCan House. The bingo proceeds also benefited iCan House. In other activities, the chapter honored its Credit Union Person and Volunteer of the Year.  Kevin Mack of State Employees' CU, Raleigh, was recognized as Chapter Person of the Year. Stanley Morgan, also of State Employees' CU, was honored as the Volunteer of the Year.
  • The North Piedmont Chapter gathered at Gate City Lanes in Greensboro for pizza and bowling Thursday evening. Attendees were treated to unlimited bowling for two hours, shoe rental, pizza and soda.
Among the other ways credit unions and their organizations celebrate ICU Day nationwide included:

  • Six Young & Free "spokesters" gathered in Nashville, Tenn., to produce a new video to help illustrate the advantages of credit union membership. In the video, the spokesters discuss what they would do if they had $50,000. Young & Free is a Gen Y marketing initiative. To view the video, use the link.
  • The World Council of Credit Unions (WOCCU) offered an ICU Day video tape greeting featuring Brian Branch, WOCCU president/CEO. To view the video, use the link.
  • Credit unions in Delaware published two pages in The News Journal, Delaware's statewide newspaper celebrating ICU Day.  The facing pages were the centerfold for the first news section of the daily paper. Another half page was devoted to a directory of 27 Delaware credit unions.
  • The Harrisburg, Pa. Patriot-News published an eight-page credit union-sponsored insert using the ICU Day graphics and articles about the history of credit unions and the benefits of membership, according to the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Oct. 19). A Members Matter Most coloring page also was included. In addition to the PCUA, sponsoring credit unions include AmeriChoice FCU, Mechanicsburg; Hershey FCU, Hummelstown; Members 1st FCU, Mechanicsburg; and Pennsylvania State Employees CU, Harrisburg.
  • West Aircomm FCU, Beaver, Pa., celebrated the Members Matter Most Theme throughout last week. From Monday through Friday, members could register to win a Nook HD from Barnes & Noble. Each branch also offered a drawing for three gift baskets. On Tuesday, members were greeted with coffee and donuts. Wednesday was Meet the Managers Day in each branch, celebrated with a fall theme, candy corn and apples. Thursday treats were offered with a carnival theme, including a spinning wheel for a chance to win a West Aircomm FCU promotional item. Members were greeted Friday with a Steelers pep rally.
  • Click to view larger image Lucy Ito, (far left) California and Nevada Credit Union Leagues executive vice president/chief operating officer, and (middle, left to right); Joe Quan, Los Angeles FCU (LAFCU) board secretary; John Dea, LAFCU president/CEO; Richard Lie, LAFCU executive vice president/chief financial officer; and Anthony Cuevas, senior vice president/chief operating officer, hosted Chinese financial services professionals Oct. 12 at the credit union's Glendale corporate headquarters. (Photo provided by Los Angeles FCU)
    Los Angeles FCU (LAFCU) hosted a delegation of 12 Chinese financial services professionals Oct. 12. The visit was designed for the businessmen to learn about credit unions and consumer lending in the U.S. John Dea, LAFCU president/CEO, and Lucy Ito, California and Nevada Credit Union Leagues executive vice president/chief operating officer, educated the delegation on the background and history of credit unions, how they function and lend to consumers and the difference between credit unions and banks.
  • Neighborhood CU, Dallas, surprised one of its members on ICU Day with a $10,000 prize to reward him for good savings habits. Jose "Joe" Garcia opened his apartment door Thursday morning to Neighborhood CU leaders holding a giant $10,000 check with his name printed in bold letters across the front.
  • Utah-based divisions of Virginia Beach, Va.-based Chartway CU--HeritageWest CU, SouthWest Community CU and Utah Central CU--gave away Visa Gift Cards to members. Members of the credit unions were entered into the drawing to win when they left a comment on the credit unions' Facebook pages about why they love credit unions.
  • Community Choice CU, Farmington Hills, Mich., offered food and refreshments and opportunities to meet members of senior management at each of its branch locations.
  • URW CU, Danville, Va., offered free food, a petting zoo and pony rides. The Danville Fire Dept. was also on hand with its fire safety house.

Nomination received for District 5 CUNA Board seat

 Permanent link
WASHINGTON and MADISON, Wis. (10/22/12)--Incumbent Roger Heacock has submitted his nomination papers for the District 5, Class B Credit Union National Association (CUNA) board position. He is president/CEO of Black Hills FCU in Rapid City, S.D.

CUNA is seeking nominations for eight positions on the CUNA Board of Directors.

Positions up for election are:

  • District 1, Class C;
  • District 2, Class A;
  • District 3, Class B;
  • District 4, Class C;
  • District 5, Class B;
  • District 5, Class D;
  • District 6, Class A; and
  • District 6, Class D.
A nominee must be an employee or voting board member of the nominating credit union to be an eligible candidate elected by credit unions. The nomination must be seconded in writing by at least two other credit unions from the same district and class.

League candidates must be a league president and be nominated in writing by their league. The nomination must be seconded in writing by at least one other league from the district.

Nominations are being accepted through Nov. 16. For contested elections, ballots will be sent Nov. 21, with voting continuing through Jan. 4. Results of contested elections will be announced Jan. 8.

Directors will take office upon the adjournment of CUNA's Annual General Meeting on Feb. 25 in Washington, D.C.

Nomination packets are available by calling 800-356-9655, ext. 4013; using the resource link; or e-mailing thanson@cuna.coop.

CU System briefs (10/18/2012)

 Permanent link
  • MADISON, Wis. (10/19/12)--Charles E."Chuck" Fagan III has been named the new president/CEO of the Credit Union Executives Society (CUES), effective Jan. 3, 2013.  Fagan most recently served as executive vice president of PSCU. He will succeed Fred Johnson, who retires Dec. 31 after leading CUES for 23 of its 50 years. Fagan has 24 years of experience in the credit union industry. He led PSCU's national sales and client relationship teams and helped pioneer the company's role in bringing emerging payments technologies to its member-owner credit unions. Earlier he served as account manager at Electronic Data Systems (EDS) and as manager of card services at Virginia CU …
  • MEMPHIS, Tenn. (10/19/12)--Police in Memphis, Tenn., have arrested two teens in the shooting death of a woman using an ATM  on Oct. 9 at Memphis-based Orion FCU. James Holmes and Bishardo Higgs, both 19, were charged with two shootings. Holmes is charged with first-degree murder in the perpetration of a felony, carjacking, and employment of a firearm. Higgs is charged with especially aggravated robbery.  Roneccia Luster, 44, was using the machine when someone shoved a gun through her open car window. She was shot as she tried to drive away and died at a hospital. The two teens also are accused of then jumping into a convertible and shooting the male driver, who survived (Associated Press Newswires Oct. 18) …
  • TOPEKA, Kan. (10/19/12)--Pamela Emig, 47, of Solomon, Kan., was charged with embezzling more than $817,167 from Enterprise (Kan.) CU, where she worked as a manager (Associated Press Newswires Oct. 17).  She was charged with one count of embezzlement. The thefts allegedly occurred from April 2005 to August 2011, said prosecutors …
  • SINKING SPRING, Pa. (10/19/12)--Contractors were called in to repair the new Bellco FCU branch in Sinking Spring, Pa., which they had only recently completed building. The branch's drive-through was hit by an 18-wheeler truck Tuesday as the driver tried to make a U-turn in the parking lot just hours before more than 125 invited guests attended the new branch's VIP Grand Opening, complete with ribbon cutting and a Marine Corp flag ceremony, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Oct. 18). The incident was caught on the credit union's surveillance cameras. This is Bellco FCU's first built-from-the-ground-up branch and a source of pride to employees and members, said PCUA. The branch, which opened to the public on Sept. 10, stayed open despite the police, fire police, tow trucks and onlookers crowding the area. The drive-through opened at 2 p.m. and the VIP Grand Opening ceremony was held as planned. CEO Tom Gosling told PCUA that it would take more than a tractor-trailer to derail the grand opening events. A grand opening for the public will be held tomorrow from 9 a.m. to noon. (Photo provided by the Pennsylvania Credit Union Association) …
  • COLUMBUS, Ind. (10/19/12)--Centra CU CEO Loretta Burd will retire on Dec. 31, after serving the $1.1 billion asset, Columbus, Ind.-based credit union for 47 years. Doug Harris, who joined Centra as chief financial officer in 2001, was named president earlier this year.  Burd began her career with Centra in July, 1965, serving in a number of positions at what was then a $4 million asset credit union with 6,968 members. She became president/CEO of what was then a $123 million asset credit union in July, 1987. Today Centra has 280 employees and more than 125,000 members and is the third largest credit union in Indiana. Burd chaired the Credit Union National Association's (CUNA) Roundtable Council for the nation's top 100 credit unions and was chair of the National Credit Union Values Campaign. She also served as CUNA Mutual Group board chair for six years--the longest serving chair in the company's history and continues to serve on the board. A member of the Indiana Credit Union League's Governmental Affairs Committee, she served as vice chair of the Credit Union Centers of Indianapolis board and chair of the Indiana Corporate FCU board. Burd was named by her peers as one of the 100 Most Admired CEOs in the credit union industry in 1990, CEO of the Year by the Indiana league in 1993 and was inducted into the Indiana league's Hall of Fame in 1996 …

Online Discovery Conference set attendance record

 Permanent link
MADISON, Wis. (10/19/12)--CUNA Mutual Group's third annual Online Discovery Conference on Oct. 9 set a record with 1,968 registrations, including 1,681 from credit unions, 59 from leagues and 10 from credit union service organizations.

Online Discovery is CUNA Mutual Group's Web-based equivalent of a face-to-face conference without the associated expenses or time away from the office.  The free, online event aimed to help credit unions solve problems, face challenges and address opportunities from the convenience of their computer.

Those who missed the live event can still participate, said Christy LaMasney, Online Discovery Conference manager.  "You can still access the conference on demand, for free, by simply registering," she said.

Registration, even after the live event, guarantees access to all conference materials until June 28, 2013. Registrants can view or revisit the 13 credit union-focused sessions, download all conference materials, visit the Expo Center and network with peers by downloading virtual business cards for up to nine months at no expense. To register, use the link.

The conference show's prize winner was Kasi Kowal Devinney of Keystone United Methodist FCU, Cranberry Township, Pa. Devinney won free registration to the 2013 America's Credit Union Conference plus $1,000 for travel expenses. The winner was randomly drawn from a list of 25 attendees who earned the most show prize points through actively participating in the conference.

Use the link to view other winners, randomly drawn from entries at the Expo Center booths.

The Discovery learning model will be back in face-to-face format next summer through CUNA Mutual Group's collaboration with the Credit Union National Association (CUNA) at CUNA's America's Credit Union Conference in New York City, June 30-July 3.  Seventeen Discovery sessions will be designed for senior management and boards of directors.

CUNA Mutual TruStage brand to draw members to insurance

 Permanent link
MADISON, Wis. (10/19/12)--CUNA Mutual Group has launched TruStage, a direct-to-consumer brand for insurance and investment products, after two years of research focused on understanding credit union members' behaviors and needs.

TruStage includes www.trustage.com, a new website co-branded with credit unions as one component of a long-term CUNA Mutual Group strategy to help credit unions deepen member relationships and grow non-interest income by providing member insurance and investment products.

Madison, Wis.-based Summit CU is one of several thousand credit unions introducing TruStage brand insurance and investment products to members. (Photo provided by CUNA Mutual Group)
CUNA Mutual Group began selling insurance and financial services to credit union members almost 30 years ago through direct mail marketing. Today, in partnership with credit unions, the company protects nearly 14 million members. With credit union membership at 95 million and growing--the company recognized the opportunity to do even more.

"Credit union pioneers who founded CUNA Mutual Group believed insurance was as important to the credit union movement as savings and credit. With more and more consumers turning to credit unions, that premise remains true today," said Bob Trunzo, president, CUNA Mutual Group Insurance & Financial Services. "The creation of a powerful, new insurance brand designed especially for members is essential in demonstrating to consumers the benefits of credit union-endorsed insurance coverage."

The company will continue to invest in the brand, technology, and new products. One year ago, it hired Susan Sachatello as the senior executive to lead its direct-to- consumer business. 

The TruStage brand initially will include the core product offering most critical to the consumer's protection needs--Life Insurance, Accidental Death & Dismemberment, Annuities and Auto and Home Insurance. TruStage will enhance its product and service offerings as member needs continue to evolve and help increase penetration to households that are underinsured or uninsured. According to LIMRA, half of all American households say they need more life insurance and three in 10 households (35 million) are uninsured.

TruStage also will add to credit unions' bottom lines through non-interest income. Today, CUNA Mutual Group contributes about $280 million in non-interest income to credit unions annually. Through the TruStage brand, the company expects to increase non-interest income for partner credit unions by an additional $30 million within four years.

More than 4,000 credit unions already offer the TruStage brand to their members. Commonwealth CU, Frankfort, Ky., is one of them. Andrea Hayes, marketing director of Commonwealth CU, said the new marketing materials relate to the younger demographic target Commonwealth hopes to hit.

TruStage will use a variety of media, including direct mail, e-mail, digital media and print materials for branch marketing driving  consumers to the Web, the call center, or a registered agent. The goal is to engage the millions of members needing insurance through the media and the channels they prefer.

"As trusted partners, credit unions can make life-changing differences to their members simply by making the right insurance protection available. TruStage will provide a seamless sales and customer service experience regardless of channel the member prefers. " Sachatello said.

For more information, use the link.

Second international co-op summit being considered

 Permanent link
MONTREAL, Quebec (10/19/12)--The organizers of the first International Summit of Cooperatives said the event was so successful they are considering organizing another summit in 2014, according to the summit's newsletter.

However, before making a decision the hosts are seeking feedback from this year's participants to see if "it meets the needs of the cooperative community and that it will advance the cooperative model," said Monique F. Leroux, board chair and president/CEO of Desjardins Group.

Leroux said a decision could be made in early 2013.

CUNA President and CEO Bill Cheney with Monique F. Leroux, the Chair of the Board, President and CEO of Desjardins Group, at this year's International Cooperative Summit in Quebec City, Canada.
Co-hosts of this year's event, which was held in Quebec City, were the International Cooperative Alliance (ICA), Desjardins Group and Saint Mary's University. The Credit Union National Association (CUNA) was one of the partners supporting the event.

ICA President Dame Pauline Green said the event helped define the future of the cooperative movement.  "The summit helped position the cooperative movement on the world stage. We are determined to make ourselves heard by major international organizations like the International Monetary Fund and the World Bank, so that they take the cooperative model into account when making decisions," she said.

This year's summit had 2,800 participants from 91 countries participating. The discussions concluded with the Declaration of the International Summit of Cooperatives, which will be presented at the end of this month in Manchester at the ICA General Assembly. It will then be presented to the United Nations.

Among the participants speaking at this year's summit were CUNA President/CEO Bill Cheney and World Council of Credit Unions President/CEO Brian Branch.  Also representing CUNA at the conference were CUNA Board Chair Mike Mercer, who is also CEO of the Georgia Credit Union Affiliates, and CUNA Communications Senior Vice President Mark Wolff, who serves on the board of the National Cooperative Business Association.  (See News Now's  related story, "Cheney tells international summit: Collaboration is key for CUs," by using the link.)

Mid-Atlantic Corp. offers Rekindle collaboration video

 Permanent link
MIDDLETOWN, Pa. (10/19/12)--Rekindle, an initiative of Mid-Atlantic Corporate FCU in Middleton, Pa., was launched Thursday emphasizing the importance of collaboration among credit unions.

"The Story of Rekindle,"a three-minute video targeting credit unions in the middle-Atlantic states, spearheaded the kick-off.

The Rekindle movement is cooperative and purpose-driven, urging credit unions to leverage the power of sharing ideas, systems and processes to create innovative expense reduction and revenue-generating ideas, said the corporate. Through the collaboration, credit unions will be empowered to not only survive, but thrive. Rekindle will provide solutions and tools to help them work together instead of competitively.

"Rekindle is an effort to inspire and create solutions to ensure credit unions' survival," said Jay Murray, president/CEO of Mid-Atlantic Corporate. "Collaboration works--and Mid-Atlantic Corporate is proof of that. Our corporate was born from this cooperative spirit more than 35 years ago. Now, we want to give back to our credit union community by leading the charge to stimulate necessary change before it's too late."

Credit unions in the middle-Atlantic region can explore the Rekindle movement by watching "The Story of Rekindle" and by joining and changing the conversation. The video encourages viewers to contact Mid-Atlantic Corporate by clicking on the form on Rekindle's landing page. Use the link.

Rekindle aims to ensure the viability of credit unions, now and in the future, the corporate said.

IAPI story on low-cost checking features Cheney aSmarterChoice.org

 Permanent link
MADISON, Wis. (10/19/12)--An Associated Press story on rising checking account fees at financial institutions nationwide featured comments from Bill Cheney, president/CEO of the Credit Union National Association (CUNA), and mentioned aSmarterChoice.org, a project of U.S. credit unions developed to help everyone understand that credit unions are the best option for consumers for conducting their financial business.

The article, "Checking account fees are rising. Is it time to look for a new checking account?" also was carried by cbsnews.com, and The Washington Post.com.

AP advises readers to consider credit unions when looking for alternatives to soaring checking account fees that banks have implemented to bolster their profits.

"Most people qualify to join a credit union. You just have to find one you qualify for," Bill Cheney, CUNA president/CEO, told AP.

Readers were told they can search for a credit union near them at www.ASmarterChoice.org.

To read the article, use the link.

Three CUs among NCBs top producing co-ops

 Permanent link
WASHINGTON (10/19/12)--Three credit unions were among the National Cooperative Bank's (NCB) annual NCB Co-op 100, which lists the nation's top 100 revenue-earning cooperative businesses.

Credit unions cited as top revenue producers were $46 billion asset Navy FCU, Merrifield, Va.; $23 billion asset State Employees' CU, Raleigh, N.C.; and $14 billion asset Pentagon FCU, Alexandria, Va.

Navy FCU reported 2011 revenues of $3.2 billion and placed 14th on the list. State Employees' CU had revenues of $1.026 billion, and was 52nd on the list. Pentagon FCU was 76th on the list with $761 million in revenues.

In 2011, businesses on the list posted revenue totaling about $215.6 billion, an 11% increase from 2010.

2012 was designated by the United Nations to be the International Year of the Cooperative, with the theme "Cooperatives build a better world."

"As we conclude IYC and reflect on the impact cooperatives make around the world, this report highlights the economic success this business model has on the U.S. economy and strengthening communities," said Charles E. Snyder, president/CEO of National Cooperative Bank. NCB is a cooperative business. "Our report is just one of the many ways we work to inform the public on the advantages of cooperatives in all fields of enterprise."

Carolinas foundation pledges 300K to kids hospital

 Permanent link
GREENVILLE, S.C. (10/19/12)--Carolinas Credit Union Foundation pledged $300,000 to Children's Hospital of Greenville Hospital System to build an interactive, child-friendly space for patients and their families to regroup and relax.

The foundation, which represents 169 credit unions in North and South Carolina, made the announcement Thursday in honor of International Credit Union Day.

Children's Hospital of Greenville Hospital Systems is a Children's Miracle Network Hospital. Credit Unions for Kids, a nonprofit collaboration of credit unions, chapters, leagues/associations and business partners nationwide, raises funds for 170 Children's Miracle Network Hospitals. Credit unions are the third-largest sponsor of the hospitals, and 100% of every dollar donated goes to support research and training, purchase equipment or pay for uncompensated care for children.

"Giving back is a core value of credit unions and aligns with our collective philosophy of people helping people," said John McGrail, foundation president/CEO. "We recently completed a similar project at Levine Children's Hospital in Charlotte, and we look forward to helping transform a space for pediatric patients here in the Upstate."

Renovation of the existing Children's Hospital lobby and entrance is scheduled to begin late this year.  Once complete, the space will be more colorful and child-friendly and house interactive games and toys, and an existing fish tank--a common element seen throughout all GHS Children's Hospital facilities.

GHS Children's Hospital serves as the region's source for pediatric care. The hospital treats more than 180,000 infants, children and adolescents each year from South Carolina, Western North Carolina, Northern Georgia and beyond.

CU4Kids raises about 225000 on Miracle Jeans Day

 Permanent link
RANCHO CUCAMONGA, Calif. (10/19/12)--Credit Unions for Kids, the industry's fundraising vehicle benefitting Children's Miracle Network Hospitals, is projecting that credit unions will raise roughly $225,000 through their participation in September's Miracle Jeans Day.

Click to view larger image Click for larger view
 

Many of the participating credit unions applied for matching funds through the CO-OP Miracle Match program from CO-OP Financial Services, which could bring the credit union industry's total contribution to Miracle Jeans Day 2012 to a higher figure by year's end. 

Credit unions continue to be the largest group supporting the initiative in the entire Children's Miracle Network Hospitals' network of donors. In 2012, credit unions will account for about 30% of all funds raised through Miracle Jeans Day. The largest fundraising area is Los Angeles and Orange counties in Southern California, but all 50 states were represented among participating credit unions.  

"America's credit unions once again lead the way with the largest percentage of participation among all Children's Miracle Network Hospitals corporate partners, helping to make Miracle Jeans Day 2012 our most successful year yet," said Joe Dearborn, senior director, Credit Unions for Kids. 

This is the fourth year that the hospitals, the charity of choice of the credit union industry, has conducted Miracle Jeans Day. This year, 535 credit unions participated, up 269% from the 145 credit unions in 2009. The estimated $225,000 raised in 2012 is a 325% increase, compared with the $53,000 raised in 2009.

In four years, Miracle Jeans Day has raised $641,000 for Children's Miracle Network Hospitals.

"Nearly 200 more credit unions participated in Miracle Jeans Day in 2011 compared to 2010, and that total rose again in 2012 by nearly 200 institutions year-over-year," said Stan Hollen, president/CEO of CO-OP Financial Services and a member of Children's Miracle Network Hospitals Board of Governors. "Our industry's commitment to people-helping-people is a true hallmark of the credit union movement." 

Miracle Jeans Day 2012 was held Sept. 12, when credit union industry employees were encouraged to wear jeans--and wear stickers, buttons or lapel pins purchased at $5 to $20. The funds go to participating Children's Miracle Network Hospitals in the communities where the employees live.

History lesson on CUs highlights ICU Day at CUNA

 Permanent link
MADISON, Wis. (10/19/12)--As credit unions worldwide celebrated the theme "Members Matter Most" on International Credit Union Day Thursday, Mark Condon, Credit Union National Association (CUNA) senior vice president of business and consumer publishing, put the movement's history in the context of today's environment during a presentation for CUNA employees.

"History without context is meaningless," Condon said. "What happened is usually undebatable. That's the easy part of history. The harder part is describing why something happened and what its significance is for today and tomorrow."

Condon described how the same commitment to consumer advocacy that compelled Alphonse Desjardins, a court reporter from Quebec, Canada, to help a group of Franco-American Catholics in Manchester, N.H., organize St. Mary's Cooperative Credit Association (now St. Mary's Bank) in 1908 fuels credit union advocates' fight for greater small business lending access for credit unions today.

The first credit unions were a product of America's industrialization, when the country became increasingly urbanized and manufacturing placed economic power in the hands of the few. The average citizen lacked access to financial services, Condon said.

In 1934, under the leadership of merchant and philanthropist Edward Filene and Roy Bergengren, a poverty lawyer, credit union activists met in Estes Park, Colo., to create a national credit union organization. The constitution and bylaws of what is now CUNA were signed on Aug. 10, 1934.

The same year, President Franklin Delano Roosevelt signed the Federal Credit Union Act into law, creating a national system to charter and to supervise federal credit unions.

Many of today's credit union institutions, such as the World Council of Credit Unions, the National Credit Union Foundation and CUNA Mutual Group, trace their creation to these first years of credit union national ascendancy.

Credit unions reached their numerical peak of 23,000 in the 1970s. The environment of consolidation continues today, but the grass roots passion that instilled the movement as a national presence helped preserve its strength in 1998 when the Supreme Court upheld an Appeals Court decision prohibiting federal credit unions from taking in members unrelated to their "core" membership group and common bond.

In reaction to the Supreme Court's decision, credit unions rallied grass roots support for HR 1151, the Credit Union Membership Access Act, which protects consumers' rights to join credit unions. On Aug. 7, 1998, President Bill Clinton signed the Credit Union Membership Access Act into law, giving federal credit unions the authority to add select employee groups with 3,000 or fewer employee/members, even if they don't have a relationship with a credit union's original sponsor.

Condon called HR 1151 a "textbook case" of political action.

"It's almost unheard of to lose a Supreme Court decision in February and to have legislation introduced March and have a final bill passed and on the president's desk signed by the president in August," Condon said. "But that's what we did. And it happened because of who credit unions are and because their members feel passionate about credit unions."

Today, credit unions are rallying their efforts behind causes such as small business lending and access to supplemental capital. They are just the latest chapters in the credit union "crusade," a phrase Condon borrowed from Bergengren's autobiography.

"I think as long as credit unions continue to view themselves as being on a crusade, they will have a very bright future ahead of them," Condon said.

N.Y. high court FCUs subject to mortgage recording tax

 Permanent link
ALBANY, N.Y. (10/19/12)--New York's Court of Appeals, the state's highest appeals court, Thursday, in a 5-to-1 ruling, affirmed a lower court's decision that federal credit unions must pay the state's mortgage recording tax.

The case stemmed from a challenge of the state's mortgage recording tax by Poughkeepsie, N.Y.-based, $3.2 billion asset Hudson Valley FCU.  Hudson Valley filed the suit against the New York State Department of Taxation and Finance on May 12, 2009 in the New York Supreme Court, a lower trial court. The lower court dismissed the case, saying MRT was a tax on the "privilege" of filing the mortgage under state law, and the appellate division upheld the lower court ruling.

Credit Union National Association (CUNA) Executive Vice President and General Counsel Eric Richard said, "CUNA and the Credit Union Association of New York (CUANY) filed friend-of-the-court briefs at every level of the courts in this litigation, standing with the credit union movement and its tax exemption. Nevertheless, the highest court in New York has now spoken. We will confer with CUANY, and the credit union, about what further steps, if any, should now be taken."

Hudson Valley's lawsuit was supported by amicus briefs from CUNA, the league, the Department of Justice, the Federal Housing Finance Agency and the National Association of Federal Credit Unions.

Exclusive Texas league celebrates growth of CU 4 Reality

 Permanent link
FARMERS BRANCH, Texas (10/18/12)--A  healthy dose of reality goes a long way, when it comes to shaping kids' knowledge of and perceptions about their finances. That is the philosophy behind the "CU 4 Reality" program offered by the Texas Credit Union League.

CU 4 Reality Fairs is a turn-key program available to the 81 Texas credit unions that participate in the league's statewide REAL Solutions initiative designed to help Texans of modest means.

Mike Delker, league senior vice president, noted that the program has grown and credit unions have embraced it to help their communities.

"In 2012, more than 40 Reality Fairs have been scheduled across Texas to educate nearly 2,000 students," said Delker. "We are excited about the success of this initiative, but even more excited about the long-term effect it will have on the financial future of these young people, who will be better equipped to make wise decisions about their money."

Launched in 2011, REAL Solutions credit unions offer Texas students an interactive financial literacy program in an entertaining, hands-on "Reality Fair" that guides students through the personal financial management process in a simulated real-world environment.

Students identify a career and the starting salary. They then complete a budget that requires them to live within their monthly salary while paying for basics such as housing, utilities, transportation, clothing and food. Additional expenditures such as entertainment and travel also are factored into the mix. Throughout the fair, students face many temptations for additional spending. They must learn to balance their needs and wants in order to live on their own. After the students have visited the booths covering the various components of independent living, students balance their budget and finally sit down with a financial counselor for a review.

Grant funding from the Texas Credit Union Foundation, Friends of Consumer Freedom and the National Credit Union Foundation will enable the league to continue to raise awareness of the importance of money management for students. The league has created two traveling Reality Fair sets for Texas credit unions to use.

Catalyst Corporate releases due diligence report

 Permanent link
PLANO, Texas (10/18/12)--Catalyst Corporate FCU has released a new Due Diligence Report that includes financial statements with commentary, information about the corporate's risk profile, portfolio composition, credit union service organization investments, compliance with regulation and other operational procedures.

The electronically delivered Due Diligence Report is designed to help Catalyst members monitor its performance and practices on a regular basis, offering an up-to-date resource that addresses Catalyst's safety and soundness.  It includes charts and graphs in an attractive, easy-to-navigate format.

"Catalyst recognizes that transparency--in financial performance, regulatory compliance, investment activities and future plans--is critical to building and sustaining strong member relationships," said Kathy Garner, Catalyst president/CEO. "By providing this report on a regular basis, our intent is to help member credit unions feel confident in their partnership with Catalyst.

"The idea for creating a 'single-source' document for due diligence came from our membership. Our hope is that we can simplify this repetitive process and save them time," Garner said.

As a regulated federal institution, Catalyst recognizes the importance of maintaining thorough and current due diligence files on each key business partner, and is striving to facilitate that process for its members, the corporate said.

Each edition will also include information about current issues that can affect credit unions. The first edition features information about emergency liquidity and the Temporary Corporate Credit Union Share Guarantee.

Catalyst will e-mail a link to the report quarterly to its members. The report will be available to download from the due diligence page of its website. Use the link.

Details shared on DDoS cyberattacks against banks

 Permanent link
WASHINGTON (10/18/12)--In recent weeks, several large financial institutions have been subject to cyberattacks. These attacks are intended to disrupt financial institution websites and operations, and include distributed denial of service (DDoS) attacks.  The financial industry has been coordinating within the sector and with the government on these and other cyber security issues. 

The cyber attacks have targeted several very large financial institutions. However, so far, credit unions are simply advised to monitor and be vigilant on their cyber security and risk management systems.  Financial institutions should also follow federal financial regulations on Internet and data security, as well as Federal Financial Instution Examiniation Council (FFIEC) guidance on Internet authentication methods, risk assessment, and customer verification.

The Credit Union National Associatoin continues to work with credit unions, the Financial Services Sector Coordinatinig Council, BITS, and other entities on cybersecurity issues. 

For more information about cyber security, please visit the CUNA members-only website.

Americas CUs logo used illegally in scam

 Permanent link
MADISON, Wis. (10/18/12)--Cyber crooks are illegally using the America's Credit Unions' logo and the name of a legitimate credit union in a new Internet scam that attempts to collect on supposed debts and threatens legal action if the recipients don't settle the account, the Credit Union National Association (CUNA) has learned.

The "Settlement Initiation Letter" appears under the America's Credit Unions logo and purports to be from a finance company,  "American Credit Services."  It is signed by "John Amore" and purports to have details regarding a "discussed settlement" and attempts to collect $552.67 on an account.  It also makes three "serious allegations pressed against your name and Social security Number:

  1. Misappropriation of Funds;
  2. Acceptance of third party with this Finance company; and
  3. Violation of collateral cheque Fraud."
The document, which is full of grammatical, spelling, and syntax errors, does not use American spelling. For example, it uses the British spelling, "cheque" instead of "check."  Some sentences apparently have been translated into wording that does not make sense in English. An example:  "Now they ["they" is not identified in the document] are further stating on the affidavit that you were monitored using email of, soliciting funds on a website owned and operated by ACU (America's Credit Union). The funds were deposited in your Bank. Utilizing an E.F.T. which stands for electronic funds transfer."

It also notes, in another sentence that doesn't quite make sense,  that "as of today's date rather than chasing you or making harassing calls or disturbing you at your P.O.E. [place of employment] for the money they have opted to simply write the money off deeming it to be stolen and press charges against you in or county."

The letter threatens legal action and informs the recipient that he has a right to an attorney and if he can't afford one, one will be appointed.

This is not the first time that America's Credit Unions brand and Garland, Texas-based America's CU, have been targeted by fakery.  In 2007, a grocery store in Pennsylvania received a fake traveler's check bearing the credit union's name and sporting the America's Credit Unions logo (News Now Oct. 15, 2007).  In 2006, CUNA warned credit unions about a phishing scam that spoofed America's Credit Unions' website and enticed victims to give up their personal financial information in exchange for a $50 credit to their account (News Now May 1, 2006). And in 2005, phishing scammers posed as an "America's Credit Unions" alert to collect personal information for possible identity theft (News Now Nov. 21, 2005).

American Credit Services is also a payday loan collection scam, according to an article in howtostopdebtcollectors.com. The company allegedly calls people and tells them they owe money on one or more payday loans. Collection callers have Indian accents, tell victims they need to call their lawyer and appear in court the next day, claim to be from a government agency and often have some personal information about the victims, including Social Security number, banking account and birthdate.

Indiana CUs honored for service fin lit philosophy

 Permanent link
INDIANAPOLIS (10/18/12)--The Indiana Credit Union League has honored credit unions for their achievement in the areas of community service, credit union philosophy in action and excellence in youth and adult financial literacy.

All of these awards are named for credit union pioneers in each of the areas. Those credit union entries receiving first-place honors in their asset size category at the state level were forwarded on to national competition.

The Dora Maxwell Award recognizes outstanding efforts of social responsibility and community service. These credit unions received first-place awards:

  • CrossRoads Financial FCU, Portland--$20 million to $50 million in assets;
  • Fire Police City County FCU, Fort Wayne --$50 million to $100 million;
  • Heritage FCU, Newburgh--$200 million to $500 million;
  • Purdue FCU, West Lafayette--$500 million to $1 billion; and
  • Indiana Members CU, Indianapolis--more than $1 billion.
The Louise Herring Award recognizes credit union philosophy in action. Louise Herring first-place award-winners:

  • Finance Center FCU, Indianapolis--$250 million to $1 billion; and

  • Indiana Members CU, Indianapolis--more than $1 billion.
The Alphonse Desjardins Awards--Adult Financial Literacy Division. The Alphonse Desjardins Award recognizes excellence in financial literacy efforts. First-place award-winner was:

  • Finance Center FCU, Indianapolis--$150 million to $500 million.
Alphonse Desjardins Awards--Youth Financial Literacy Division. First-place award-winners were:

  • Indiana State University FCU, Terre Haute--$50 million to $150 million; and
  • Finance Center FCU, Indianapolis--$150 million to $500 million.

Brooks named Calif. league volunteer of year

 Permanent link
COMPTON, Calif. (10/18/12)--Mid Cities CU Board Treasurer Roy Brooks is the 2012 recipient of the California and Nevada Credit Union Leagues' Outstanding Volunteer Award. Brooks will be honored at the league's annual convention in Las Vegas Nov. 13.

Brooks has volunteered with Mid Cities CU for 44 years, serving in capacities that include chairman of the credit union's personnel and finance committees, and his current role of board treasurer.

He also served as interim CEO on the California Credit Union League Audit Committee and on the Board of Governors of the leagues' Long Beach (now Beach Cities) Chapter.

"I'm grateful for this award. It is truly an honor," said Brooks. "I couldn't have done it without the support and help of the staff and board members of Mid Cities CU."

Mid Cities CU is a $24 million asset credit union based in Compton, Calif., and serves 4,800 members who live, work, or worship in Compton, Paramount, Norwalk, Bellflower, Lynwood, North Long Beach and Carson.

Kansas CUs make a difference in six communities

 Permanent link
WICHITA, Kan. (10/18/12)--A group of Kansas credit unions want to make sure they live up to the credit union philosophy of "people helping people." And they are doing just that with some surprises, said the Kansas Credit Union Association (KCUA).

Tuesday, in five communities across Kansas, credit unions gave away gift cards or free gas to unsuspecting consumers.

The locations were:

  • Ark City;
  • Emporia;
  • Topeka;
  • Wichita; and
  • Winfield.
A sixth Make a Difference event was on Saturday in Wamego, Kan.

Consumers received a gas gift card or up to $25 worth of gas at participating gas stations. Whether they received a gift card or gas depended on the location. A total of $15,000 was given away.

The give-aways are part of KCUA's Make a Difference campaign and coincide with International Credit Union Week, which is this week, Oct. 15-19.

"Credit unions were founded on the idea of people helping people," said Marla Marsh, KCUA president/CEO. "As not-for-profit financial cooperatives, credit unions exist to support their members and their local communities." 

Representatives from nine credit unions statewide volunteered for the event. Initial reactions from the public have been positive, with some asking about accounts and loans at credit unions, and others just saying thanks. Even some hugs have been exchanged.

"We wanted it to be unexpected, like when someone pays your toll on the highway, or pays for your coffee in the drive-through,"  said Susan Dyer, KCUA communications director. "It just makes people feel good and makes the day a little bit better."

More Make a Difference events are being planned for 2013, but no firm details are available.

To see a video of the gas and gas card giveaway, use the link.

S. Carolina league video pokes fun at bank fees

 Permanent link
COLUMBIA, S.C. (10/18/12)--The South Carolina Credit Union League (SCCUL) has created a short, humorous YouTube video that pokes fun at all the fees that large banks charge.

The fees in the video range from the usual and normal to the imagined and ridiculous throughout a day.

A young man is frustrated by bank fees when at home on his computer ($2 transfer fee, $3 ATM fee), when he drives his car to a bank ($2 bank parking fee) and then when he is back at home ($1 milk withdrawal fee--for taking a carton of milk out of the refrigerator) and a $2 sleeping fee for falling asleep at night.

The videos were created by IWearYourShirt (see the link),as part of this week's Every Day is Bank Transfer Day promotion. Promotional concepts were a collaborative effort involving representatives from credit unions, Your Marketing Co, and SCCUL. Funding for the videos was provided by South Carolina FCU in North Charleston, S.C.

To view the video, use the link.

SACU showcases mobile ATM powered by solar energy

 Permanent link
SAN ANTONIO, Texas (10/18/12)--San Antonio FCU (SACU) and Solar San Antonio showcased the use of solar energy by powering the credit union's mobile ATM using energy from the sun during the 10th annual Solar Fest.

Technology for the project was provided by Camsolar.

The event brought focus to alternative energy and provided a forum for companies that support the solar community in San Antonio and South Texas.

SACU is the first local lender to provide loans for residential solar installations, according to the credit union, which had representatives on hand to educate visitors about solar loan benefits and affordability. Armed with iPads and iPhone and Android smart phones, the SACU employees assisted members in navigating SACU's website for online applications and demonstrated GOTM, the mobile app from SACU.

Between 3,500 and 4,000 San Antonio residents took advantage of the opportunity to learn more about the benefits of clean energy.

"SACU looks forward to the evolution of green initiatives, such as those Solar San Antonio and our members want and need," said Jeff Mouat, SACU senior manager of direct lending.

Happy International Credit Union Day

 Permanent link
MADISON, Wis. (10/18/12)--Several states will receive International Credit Union Day proclamations from state governors and lawmakers today as credit unions around the world celebrate the credit union philosophy.

Getting ready to tape a new segment of "Pennsylvania Newsmakers" are, from left, host Terry Madonna; Mike Wishnow, PCUA senior vice president, and Rick Wargo, executive vice president/general counsel, both from the Pennsylvania Credit Union Association. Wishnow and Wargo discussed International Credit Union Day during the segment. (Photo provided by the Pennsylvania Credit Union Association)
Credit union representatives from across the state will gather at the Iowa State Capitol today as Iowa Gov. Terry Branstad signs a proclamation declaring the day as Credit Union Day in Iowa.

"While this is part of an international initiative, it's important that we recognize at the state level the importance credit unions have in their communities," said Patrick S. Jury, Iowa Credit Union League president/CEO.

Minnesota Gov. Mark Dayton signed a proclamation last week declaring today as Credit Union Day in Minnesota. The proclamation states, "Credit unions embrace the 'people-helping-people' philosophy, empowering people to improve their financial futures and uniting to help those in need." It further states that "credit unions have demonstrated outstanding leadership throughout the communities in which they serve since they were founded more than 150 years ago."

Other state governors are also signing proclamations.

ICU Day has been celebrated the third Thursday of October each year since 1948. This year's theme "Members Matter Most" speaks to the heart of the credit union philosophy of "people helping people."

Bill Cheney, Credit Union National Association (CUNA) president/CEO, also extended his greetings and applauded the efforts of those who work in the credit union movement.

"This is a great time for all of us to be associated with credit unions," says Cheney in a video greeting. "We have so much to be proud of on this International Credit Union Day, not only in the U.S. but all across the world." To see the video, use the link.

Other ways the credit unions and leagues around the nation are celebrating ICU Day, include:

  • Massachusetts credit unions are celebrating with a major shared branching expansion. Seven credit unions will join the shared branching program in Massachusetts, New Hampshire and Rhode Island, increasing the number of participating credit unions to 31. A group of credit union and Massachusetts Credit Union League officials will meet at America's Credit Union Museum, in Manchester, N.H., to celebrate the events (E-Weekly Oct. 17).
  • The Pennsylvania Credit Union Association (PCUA) sponsored a luncheon with credit union leaders from Montour and Northumberland Counties to meet with local newspaper editors (Life is a Highway Oct. 17). The focus was to dialogue with local media representatives about credit unions and their structure, philosophy and cooperative spirit. Credit union representatives highlighted their community activities, including ICU Day celebrations, financial literacy, and in-school branches.
  • FinancialEdge Community CU, Essexville, Mich., will open a new branch in the local nonprofit Do-All Inc. resale store today. The credit union received a $5,000 grant from the Michigan Credit Union Foundation and also a $10,000 grant from the National Credit Union Foundation to help with the project.
  • In the new monthly segment of Pennsylvania Newsmakers, Rick Wargo, PCUA executive vice president/general counsel, and Mike Wishnow, senior vice president, communications and marketing, recognize the international celebration of credit unions, their members and employees (Life is a Highway Oct. 17).
  • The Pennsylvania Credit Union Association partnered with credit unions to hold three reality fairs in the Pittsburgh area this week. Students learned about financial management through monthly budgeting skills dealing with housing, food, travel and transportation, cosmetics, art, entertainment, financial counseling and other activities. (Photo provided by the Pennsylvania Credit Union Association)
    The PCUA, in conjunction with area credit unions, held three reality fairs in the Pittsburgh area this week (Life is a Highway Oct. 17). Students learned about financial management through monthly budgeting skills dealing with housing, food, travel and transportation, cosmetics, art, entertainment, financial counseling and other activities.
  • A group of credit unions from the Houston-Galveston, Texas, area have come together to host week-long activities to celebrate credit unions the entire week, according to the Texas Credit Union League (Lone Star Leaguer Oct. 15). The group hopes to raise awareness in the Greater Houston and Gulf Coast areas about the value credit unions offer consumers. The initiative is being promoted with one unified marketing theme and includes free events and activities open to members and the general public. The week's activities will focus on a different topic every day, such as ICU Day, financial literacy, political involvement, community involvement and financial security and safety. Events include  credit unions hosting BizKid$ at area YMCA locations, credit score seminars, a political meet and greet, a food drive, a Habitat for Humanity volunteer day and a Shred It day. BizKid$ is a credit union sponsored educational television show that teaches financial education and entrepreneurship to a preteen audience.
  • Belco Community CU, Harrisburg, Pa., is offering a free hot dog lunch, prize drawing for a $50 Visa gift card at each of its branches, giveaways, and an employee bake sale at all branches, with 100% of the proceeds going to Susan G. Komen for the Cure. Belco is also offering a one-day auto loan special. Members will receive a $50 Sheetz card with any approved auto loan.
  • Seven small credit unions in the Erie, Pa., area placed a full-color ad in the Sunday edition of the Erie Times. The ad promoted ICU Day and its theme (Life is a Highway Oct. 16). Sponsoring credit unions included: Erie Firefighters FCU; Erie Flagship Community FCU; Erie Times FCU; I. B. E. W. Local 56 FCU; Locomotive & Control Employees FCU; PHB Employees FCU; and Saint Vincent Erie FCU.
  • The Topeka Credit Union Foundation today will award grants to Breakthrough House Inc., Easter Seals Capper Foundation, TARC and the Topeka Habitat for Humanity (Topeka Capital-Journal Oct. 14).

CO-OP Fin. Services SHAZAM sign ATM sharing pact

 Permanent link
RANCHO CUCAMONGA, Calif. (10/18/12)--ATM network providers CO-OP Financial Services and the SHAZAM Network have signed an agreement that will allow members of participating credit unions to access surcharge-free and shared-deposit ATMs nationwide.

"This agreement provides for a significant expansion of convenient access to accounts for members of credit unions in the SHAZAM Network," said Stan Hollen, CO-OP president/CEO. "The credit unions can build stronger ties to their members, as they can continue to be there for their members virtually everywhere--whether they are traveling a few miles from home or across the country."

Like CO-OP Network, SHAZAM's Network of ATMs provides surcharge-free access for cardholders of financial institutions that participate in its Privileged Status program.

"CO-OP and SHAZAM share the same focus and commitment to delivering more convenience and cost savings for our members," said Dan Kramer, senior vice president, marketing and merchant services, SHAZAM. "This new alliance allows us to continue to realize our vision of open access and also paves new inroads to allow our financial institution partners to compete more effectively and profitably."

The agreement was facilitated by Des Moines, Iowa-based The Members Group (TMG), a business partner of both CO-OP and SHAZAM. In January TMG and CO-OP formed a strategic partnership that included a strategic investment by CO-OP in TMG.

CO-OP Network is the nation's largest ATM network specifically for credit unions, with 30,000 ATMs, 9,000 of which accept deposits, said a news release. Many are located in retail locations such as 7-Eleven, Costco and Walgreens.

CU System brief (10/17/2012)

 Permanent link
  • WYOMISSING, Pa. (10/18/12)--A lost driver plowed his 18-wheeler into the brand new branch of Bellco FCU in Sinking Spring, Pa. Tuesday, just hours before its grand-opening celebration (Associated Press Newswires Oct. 17).  The accident occurred when the driver, headed in the wrong direction, attempted a U-turn in the credit union's parking lot.  A tire blew after it careened over a concrete light post, smashed into the drive-through station's roof and snapped a stop sign. The incident also uprooted a newly planted tree.  No one was hurt, and the credit union branch celebrated as planned and the branch is now open.  The $113 million asset Bellco is based in Wyomissing, Pa., with branches in Sinking Spring and Reading ...

NEW CO-OP SHAZAM sign ATM sharing pact

 Permanent link
RANCHO CUCAMONGA, Calif. (FILED 11:17 a.m. CT 10/17/12)--CO-OP Financial Services and the SHAZAM Network have signed an agreement that will allow members of participating credit unions to access surcharge-free and shared-deposit ATMs nationwide.

"This agreement provides for a significant expansion of convenient access to accounts for members of credit unions in the SHAZAM Network," said Stan Hollen, CO-OP president/CEO. "The credit unions can build stronger ties to their members, as they can continue to be there for their members virtually everywhere--whether they are traveling a few miles from home or across the country."

Like CO-OP Network, SHAZAM's Network of ATMs provides surcharge-free access for cardholders of financial institutions that participate in its Privileged Status program.

"CO-OP and SHAZAM share the same focus and commitment to delivering more convenience and cost savings for our members," said Dan Kramer, senior vice president, marketing and merchant services, SHAZAM. "This new alliance allows us to continue to realize our vision of open access and also paves new inroads to allow our financial institution partners to compete more effectively and profitably."

The agreement was facilitated by Des Moines, Iowa-based The Members Group (TMG), a business partner of both CO-OP and SHAZAM. In January TMG and CO-OP formed a strategic partnership that included a strategic investment by CO-OP in TMG.

CO-OP Network is the nation's largest ATM network specifically for credit unions, with 30,000 ATMs, 9,000 of which accept deposits, said a news release. Many are located in retail locations such as 7-Eleven, Costco and Walgreens.

CUs take crime prevention month to next level

 Permanent link
MADISON, Wis. (10/17/12)--National Crime Prevention Month is in full swing, with credit unions gearing up activities to help their members and the public prevent identity theft. Some are working crime prevention education into Thursday's International Credit Union Day activities, while others are focusing on next week's fifth annual National Protect Your Identity Week (PYW).

National Protect Your Identity Week begins Saturday and runs through Oct. 27 as part of National Crime Prevention Month. The National Foundation for Credit Counseling (NFCC), the National Sheriff's Association (NSA) and the National Association of Triads Inc. (NATI) are joining forces to host the campaign, which will offer broad-based identity theft protection education as well as focus on threats related to smartphones with the 2012 theme of "ID Theft Protection on the Go."

A recent online poll conducted through www.ProtectYourIDNow.org revealed that 64% of consumers believe they are at risk of identity theft, said NFCC. 

"A healthy fear of ID theft is a good thing," said Gail Cunningham, NFCC spokesperson. "People often become complacent, particularly with their mobile devices. When people see their wallet, credit cards or checkbook, they think of money. However, they don't connect the dots that critical financial information may be stored on their smartphone, thus putting them at significant risk if lost or stolen."

Nearly 100 events across America will offer free shredding of personal documents, responsible cell phone recycling, workshops, speakers, ID theft protection handouts and credit report reviews, said the NFCC.

Many events involve credit unions.  For example, Co-op Services CU of Livonia, Mich.,  and Accel debt solutions will present a  free class open to the public on Deter, Detect, Defend, Avoid ID Theft at 7 p.m. Tuesday at the Livonia Library. The prevention workshop will help educate and raise awareness of identity theft during PYIW and is hosted by NFCC (The Detroit News Oct. 16).

On Thursday, International Credit Union Day, one of the activities planned by Fremont (Ohio) FCU is a document shredding event, in which the public can bring up to five bags of documents for onsite shredding by Allshred services (The News Messenger Oct. 15).

In Sacramento, Calif., Golden 1 CU will host a free community shred event Nov. 3 behind a local mall in Clovis. The public can drop off up to five banker's boxes full of confidential and personal documents. The $7.9 billion asset Golden 1 teamed up with Iron Mountain to handle the shredding. Shredded remnants will be recycled. The credit union encouraged consumers to shred important documents that contain personal or confidential information--anything with a signature, account number, Social Security number or medical or legal information plus credit offers to "keep private information out of the wrong hands."

"Providing shredding services is one way we can help people avoid identity theft and other types of fraud," said Donna A. Bland, Golden 1 president/CEO. "It's part of our ongoing commitment to the community."

In addition to such events, credit unions and others will be educating consumers about the risks involved with paper checks and the importance of direct deposit to avoid the thefts from the mailbox of paper checks. They will urge consumers to "Go Direct" by enrolling in Direct Deposit or using Direct Express Debit MasterCard, a prepaid card program.

Go Direct, a partner of the Credit Union National Association, has developed free online Crime Prevention Month materials (newsletter copy, social media tips, talking points and news briefs) credit unions can use. For more information, use the link.

More than 440,000 Social Security and Supplemental Security Income (SSI) checks were reported lost or stolen in 2011, says the Go Direct website. Roughly $70 million in checks issued by the Treasury Department were fraudulently endorsed in 2011.

That's one of the reasons the Treasury Department is phasing out paper checks for federal benefit payments. Everyone receiving federal benefit payments by paper check will be required to switch to electronic payment by March 1.

CU System briefs (10/16/2012)

 Permanent link
  • HUNT VALLEY, Md. (10/17/12)--Atlantic Financial FCU (AFFCU), based in Hunt Valley, Md., has added the Maryland Horse Breeders Association (MHBA) as a new select employee group (SEG).  The association will offer the more-than-$98 million asset credit union as part of its employee benefit package. MHBA, located in Timonium, has 10 employees and about 500 volunteers. It focuses on encouraging, promoting and improving the horse breeding industry in Maryland. Its employees and volunteers and their immediate family members will have access to AFFCU's checking and savings accounts, discounted rates on loan products and credit cards, as well as access to discounted auto purchasing services and liability insurance …
  • HARRISBURG, Pa. (10/17/12)--TruMark Financial CU, a $1.378 billion asset credit union based in Trevose, Pa., hosted a breakfast honoring U.S. Rep. Patrick Meehan (R-7) Oct. 10.  Meehan is a sponsor of ATM disclosure legislation, exam fairness legislation, and a voice for small financial institutions like credit unions against expensive overregulation, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Oct. 12). The event also featured special guest House Deputy Whip Kevin Brady (R-Texas), who is a senior member of the Ways and Means Committee and chairs the Joint Economic Committee.  Representatives attended from American Heritage FCU, Boeing Helicopters CU, Citadel FCU, Diamond CU, Discovery FCU, Freedom CU, PSECU, Sun East FCU, CUNA Mutual Group and PCUA. Pictured are, from left, Rick Stipa, CEO of TruMark Financial CU and a member of the PCUA Governmental Affairs Committee; Meehan and Brady. (Photo provided by the Pennsylvania Credit Union Association) …
  • WARMINSTER, Pa. (10/17/12)--Warminster, Pa.-based Freedom CU's summer auto loan promotion and sweepstakes, Fuel Up on Freedom, ended last week with the presentation of a year's worth of free gas to member Frances Proulx. Proulx was randomly selected from a group of members who applied for auto loans with the more-than-$584 million asset credit union between July 1 and Sept. 30. During the promotion, Freedom's Lending Department experienced an increase of nearly 1,000 new auto loan applications, including new vehicle purchases and refinanced loans from other, high-rate lenders. In the photo, Proulx receives her prize from Gerard McGeever, vice president of marketing at Freedom CU. (Photo provided by Freedom CU) …
  • MADISON, Wis. (10/17/12)--Madison, Wis.-based Summit CU is constructing its second school-based branch, this time at Madison's Memorial High School (The Wisconsin State Journal Oct. 6). The new credit union will be placed in the school's lobby and is expected to open in January. Its first student-operated branch was opened in January 2011 at Madison's La Follette High School, and about 150 students use the credit union. Summit President/CEO Kim Sponem told the State Journal that the in-school branches are real branch offices with a primary focus of educating high schoolers about good financial management practices. Each school credit union costs Summit about $20,000 a year. Summit also founded a youth-chartered credit union, STAR credit union in 2005 in conjunction with the Boys & Girls Club of Dane County. That credit union has 520 members …

Gesa CU inks 1M sponsorship of carousel

 Permanent link
KENNEWICK, Wash. (10/17/12)--Gesa CU, based in Richland, Wash., has paid $1 million for sponsorship of and the naming rights to a carousel that will be built in nearby Kennewick, Wash., where the credit union has a branch.

The $1.18 billion asset credit union Monday signed a contract that gives Gesa the naming rights for 12 years (Tri-City Herald Oct. 15).

The carousel, to be built at the Southridge Sports and Events Complex in Kennewick, will be called "The Carousel of Dreams presented by Gesa Credit Union."

Gesa's financial commitment allows the Carousel Foundation to take the next step toward completing the project, Eric Van Winkle, foundation president, told the newspaper.

Ground-breaking for the project is slated for mid-November, with completion in July, the paper said.

Arizona CU members saved 2M in HARP program

 Permanent link
PHOENIX (10/17/12)--By participating in the federal government's Home Affordable Refinance Program (HARP), 600 members of Arizona State CU in Phoenix have saved more than $2 million annually.

Members saved an average of $369 on monthly mortgage payments, the $1.37 billion asset credit union said (Phoenix Business Journal Online Oct. 12).

The credit union has accepted 1,042 applications to help underwater homeowners procure more affordable mortgages, since the most recent incarnation of the HARP program was created in March, the newspaper said.  

Arizona State CU has a responsibility as a local financial cooperative to assist state residents as they attempt to bounce back from economically challenging times, David E. Doss, president/CEO, told the paper. HARP allows the credit union to do that, he added.

CUs help underwrite todays Florida senatorial debate

 Permanent link
BIRMINGHAM, Ala., and TALLAHASSEE, Fla. (10/17/12)--Credit unions in Florida will be front and center at the U.S. senatorial debate at Nova Southeastern University in Davie, Fla., today.

U.S. Sen. Bill Nelson (D) and U.S. Rep. Connie Mack IV (R) have agreed to only one debate before the election. The meeting will be one of the most watched in Florida and across the country, said the League of Southeastern Credit Unions.

As one of only four sponsors of the debate, credit unions will have a major presence in the debate hall and on the broadcast.

"This is a unique opportunity for credit unions and one that we've typically not seen before," said league President/CEO Patrick La Pine. "The debate will air in every television market in the state. Through our Cooperative Image Campaign, we already have a logo and website that promote all of our credit unions. We think this is a great way to showcase our credit unions."

Through the sponsorship agreement, credit unions in Florida will be mentioned at the front of the broadcast and again at the end, a 30-second ad will run during the broadcast and a 4'x 8' credit union banner will hang in the debate hall. The credit union logo is also on the debate website and prominently displayed in newspaper ads promoting the debate.

Nelson's Senate seat is one that has been targeted by the national Republican Party and has garnered quite a bit of national attention, said the league. A couple of the cable networks have expressed interest in broadcasting the debate, and the league expects a large amount of national coverage of it.

"With the attention this senatorial race and the debate are generating, we feel that promoting credit unions during the broadcast makes sense. Our data from the Image Campaign this summer shows that when people see ads promoting credit unions, they act on it. Our goal is to once again show credit unions are unique, local financial institutions," said La Pine.

Mobile RDC and CUs The demand is there

 Permanent link
MADISON, Wis. (10/17/12)--Credit unions and community banks are rapidly adopting mobile remote deposit capture (RDC)--where consumers use a camera on a mobile device such as a cellphone to obtain an image of a check for deposit.

Although the service was originally offered mostly by large banks, credit unions now are using it to reduce service costs, mitigate the lack of a geographic footprint and ensure they can compete in the future against larger financial institutions, said American Banker (Oct. 11). 

Use of mobile service increases--sometimes substantially--when credit unions deploy mobile RDC, Randy Thompson, products manager for CO-OP Financial Services, told the Banker. Mobile RDC can bring significant attention to a credit union's mobile banking service, he added.

Although most financial institutions don't charge a fee for using mobile RDC, many are looking for ways to make this service a money-maker, the Banker said.

Credit unions are confronting a plethora of vendors offering mobile RDC services.

Mfoundry is hosting a cloud-based solution, MFoundry's Fin.X,  as a mobile banking platform (BusinessWire Oct. 8). Per-user revenue can expand up to 40% in cost savings and increased revenue through use of its product, MFoundry said in a press release.

By 2017, mobile banking  usage is expected to triple to 108 million consumer-users--or 46% of all U.S. bank account holders, according to research by Forrester.

Fiserv, a worldwide provider of financial services solutions, said the number of accounts supported by its mobile banking solutions platform is growing 10% each month--reflecting growing consumer demand for its mobile banking and payments technology. 

Credit unions and community banks initially were slow to adopt new mobile RDC technology because of costs for start-up investments and integration complexity, said Fundtech, which launched its NetDeposit Mobile Express mRDC app. earlier this month (GlobeNewswire Oct. 9).

"With the large banks creating waves with their new RDC products, community institutions can no longer wait to deploy these solutions," Andrew Tilbury, chief marketing officer of BluePoint Solutions, told Investment Weekly News (Oct. 13). "Those that don't have these offerings will begin to lose customers and members."

CU helps 16 Hawaiian families purchase homes

 Permanent link
KAMUELA, Hawaii (10/17/12)--In the past three years, 16 families have become homeowners with assistance from a matching funds program through Hawaii First FCU.

The Hawaiian Home Lands Individual Development Account (IDA) program has provided $102,400 to the new homeowners (Hawaii Tribune-Herald Oct. 13).

The credit union received a second round of funding in 2011 from the Native Hawaiian Housing Block Grant program through the Native American Housing Assistance and Self Determination Act and in partnership with the Department of Hawaiian Home Lands to continue the program, said Laura Aguirre, president/CEO.

The Hawaiian Home Lands IDA program is designed to assist participants in achieving greater economic success through financial training, savings and match funds.

The program provides participants with free training and education on topics associated with homeownership. After participants complete all program requirements, their savings are matched with $6,400, giving them a total of $8,000 for closing costs or down payment assistance.

In addition to helping families become homeowners, the program instills strong savings habits, said Mary Ann Otake, vice president of operations and development.

This year, Hawaii First is assisting nine families who have saved $11,160.08 toward their homeownership goal, Otake said

Two CUs announce branch closures (10/16/2012)

 Permanent link
HUNTINGTON BEACH, Calif. and MILWAUKIE, Ore. (10/17/12)--Two West Coast credit unions recently announced branch closures.

NuVision FCU, Huntington Beach, Calif, will close its East Los Angeles branch on Oct. 31, according to a letter sent to credit union members (The Eastsider Oct. 16).

The branch opened five-and-a-half years ago. The branch is not performing at a level expected for a location that has been open that length of time, the $1.2 billion asset credit union said.

Clackamas Community FCU, Milwaukie, Ore., with $237 million in assets, will close one of its two Milwaukie branches, it said Monday (Portland Business Journal Oct. 16).

The credit union is closing the branch to keep costs down, CEO Diann M. Owen told the Journal.

The credit union will have six branches after the closing.

51 Mich. CUs support local biz with CU Lunch Local

 Permanent link
LANSING, Mich. (10/17/12)--Fifty-one Michigan credit unions Tuesday took part in CU Lunch Local, a cash mob-style event aimed at showing support for small local businesses.

During the daylong CU Lunch Local program, credit unions and their employees supported local businesses by dining, shopping or buying local.

CU Lunch Local is sponsored by Michigan CU Capital, a credit union organization formed in 2011 in collaboration with Michigan Business Connection, a commercial lending CUSO.

Employees at Christian Financial CU, Roseville, committed to either order in or visit a local restaurant for lunch Monday. Management provided staff with a list of local restaurants to support, and the credit union reimbursed employees up to $10 for "lunching local" and sharing their experience with others, according to marketing manager Rebekah Johnson.

Patty Campbell, Christian Financial CU president/CEO, joined Bill Beardsley, president/CEO of Michigan Business Connection, for lunch at the Majestic Café, a landmark restaurant in Detroit that has a long business partnership with CFCU. 

Muskegon (Mich.) Government Employees FCU ordered lunch for its employees from two locally owned restaurants in the neighborhoods the credit union serves, Mike's Landing and Bellacino's.

"We have a strong tradition in Muskegon of supporting hometown businesses and buying local as much as we can, so CU Lunch Local is another opportunity for our credit union to showcase our commitment," said Janet "Jan" K. Hermann, Muskegon Government Employees FCU president/CEO. "We encourage everyone in our community to join us not just today, but every day in doing our part to support local hometown businesses in the Muskegon area."

The Michigan Credit Union bought locally-made treats for employees in its Livonia and Lansing branches.

"Michigan credit unions support small businesses in so many ways, including business lending that helps create jobs and turn the state's economy around," said Dave Adams, MCUL president/CEO. "This is an opportunity to show everyone just how big the credit union commitment to small business really is."

Deer looks to save a buck at CU

 Permanent link
HARRISBURG, Pa. (10/17/12)--
Glatco CU's lobby security camera captured this visit by a deer Monday morning. The deer banged on the window of the credit union before trotting away. (Photo provided by the Pennsylvania Credit Union Association)
It's natural for a credit union to encourage new members this week--after all, it's National Credit Union Week, leading up to International Credit Union Day on Thursday. But one visitor took Glatco CU, based in Spring Grove, Pa., by surprise.

According to the Pennsylvania Credit Union Association, the $38 million asset credit union's vice president, Chris Rohrbaugh, heard a banging noise on her office window at about 11 a.m. Monday.  When she looked out, she saw a deer (Life is a Highway Oct. 16).

The six- or eight-point buck was making his way through downtown Spring Grove, and the credit union's lobby security camera caught his visit.

Maybe the deer had heard that credit unions have better rates and wanted to join the credit union to save a buck. PCUA says "save a buck" could be the credit union's next marketing campaign.

Indiana league elects officers new directors

 Permanent link
INDIANAPOLIS (10/17/12)--The Indiana Credit Union League Board of Directors elected table officers at its reorganization meeting earlier this month during the league's annual meeting and convention.

Table officers elected are:
  • Chairman, Frank Gulley, Afena FCU, Marion;
  • Vice chairman, Dave Fleming, Union Baptist Church FCU, Fort Wayne;
  • Board secretary, Doug True, FORUM CU, Fishers; and
  • Treasurer, Jack Sheets, Interra CU, Goshen.
Newly elected board members are Chuck Donovan of Members Source CU, Merrillville, and Matt Lambert of Encompass CU, Tipton. They attended their first board meeting Oct. 5.

Donovan and Lambert were elected to fill vacancies created when two other board members' terms ended and they did not run for re-election. Outgoing directors Randy Glassburn of Ball State FCU, Muncie, and Ron Mazur of Chiphone FCU, Elkhart, were recognized with special resolutions at the league annual meeting.

Other board members are:

  • Lori Gonzalez, Members Choice CU, Bloomington;
  • George McNichols, Hoosier Hills CU, Bedford; and
  • Lamoura Munse, Indiana Members CU, Indianapolis.

CU System briefs (10/15/2012)

 Permanent link
  • ALBUQUERQUE, N. M. (10/16/12)--One of seven Nigerian suspects charged with defrauding credit unions in New Mexico, Virginia and New York of millions of dollars through a home equity lines of credit (HELOC) scheme made his first appearance in a New Mexico court in Albuquerque after being arrested in Georgia (Albuquerque Journal Oct. 6). David Ajudua is charged with conspiracy to commit bank fraud, bank fraud and identity theft.  The fraud ring allegedly obtained lists of individuals with names and addresses using legitimate commercial sources, but then gained access illegally to proprietary databases to get personal information including birthdates and Social Security numbers.  Members of the ring then allegedly called credit unions and posed as account holders asking the institutions to wire money overseas. Among the credit unions defrauded were Sandia Laboratory FCU and  New Mexico Educators FCU, both located in Albuquerque; U.S. Alliance FCU; and TruWest CU. Other suspects have not been apprehended. They include the lead defendant, Harrison Amadini Ekpetin, and Nigerian and legal permanent resident of the U.S. who is on the Federal Bureau of Investigation's "Most Wanted" list …
  • MERIDEN, Conn. (10/16/12)--U.S. Rep. John B. Larson (D-Conn.) explored current issues in the political arena at a luncheon in his honor with Connecticut credit unions in Hartford on Oct. 9, according to the Credit Union League of Connecticut.  Larson addressed issues such as unemployment, the economy, U.S. involvement in world affairs, and the current election campaigns in the state and nationally and their potential effect on the country's future direction. "We've accomplished a lot in Congress these last few years," he said, "but there are so many critical issues yet to address that both houses have an immense amount of work ahead of them in [the] coming congressional session." He heard questions and comments from attendees, particularly about the burden of regulations and the role credit unions play in the economy. Larson described the intricacies of law development as complex, polemic and divisive, not to mention always political.  He said he is committed to working with credit unions on easing the regulatory burden. Larson is a member of the Ways and Means Committee, chair of the House Democratic Caucus and a co-sponsor of legislation to increase the member business lending cap for credit unions to 27.5% of assets from 12.25%. He thanked credit union members for their support, their positive work in the community, and their encouraging and constructive assistance to credit union members and their families. Pictured from left are Larson and league President/CEO Tony Emerson. (Photo provided by the Credit Union League of Connecticut) …
  • SANTA ROSA, Calif. (10/16/12)--Redwood CU  (RCU) completed its 2012 United Way workplace giving campaign and raised more than $95,000 in contributions, achieving 112% of its fundraising goal to support local nonprofits. The Santa Rosa, Calif.-based credit union offered incentives including prize raffles, casual days, ice cream parties and other events to encourage employees to contribute. Brett Martinez, president/CEO of the $2 billion asset credit union, said, "I am in awe of the generosity of our employees and officials …each year, we step it up. Exceeding our campaign goal year after year exemplifies the dedication of our staff and officials to our communities, and it is truly moving to see our employees actively engaged in supporting our local nonprofits, particularly during these economically challenging times when need is greatest." Employees also volunteered for United Way's Day/Week of Caring in four counties--cleaning up barns at Bayer Farm in Sonoma County;  assisting the Marin Food Bank and other projects in Marin County; building new picnic tables for the Ukiah Boys & Girls Club in Mendocino County; and piloting the first Day of Caring effort in Napa County by repainting the Napa Boys & Girls Club …

CUNA council seeks judges for Diamond Awards Best Practices of Year

 Permanent link
MADISON, Wis. (10/16/12)--The CUNA Marketing & Business Development Council is seeking judges for its 2013 awards, including the Diamond Awards.

Judges should have  a minimum of five years marketing and/or business development experience, the council said.

The areas where judges are needed, and the timeframes for judging are:

  • Diamond Award entries in Madison, Wis., Jan. 23-25, travel involved;
  • Diamond Award website entries, Jan. 14-Jan. 25, no travel involved;
  • Best Practices entries, Jan. 31-Feb. 8, no travel involved;
  • Marketing Professional of the Year entries, Jan. 31-Feb. 8, no travel involved; and
  • Business Development Professional of the Year entries, Jan. 31-Feb. 8, no travel involved.
To apply, use the resource link, under "Diamond Resources" on the right sidebar. Applications to judge are due Nov. 9.

The number of applications received may exceed the number of judges needed. All applicants will be contacted in early December, said the council.

ICU MagazineI bonus issue features ICU Day CU history

 Permanent link
MADISON, Wis. (10/16/12)--Credit Union Magazine will publishing a special bonus issue focusing on the state of the credit union movement and International Credit Union Day Thursday.

Although the special edition, sponsored by CUNA Strategic Services provider Diebold, provides a brief overview of credit unions' past, most of the edition is devoted to credit unions' future.

Nearly 20 of the credit union movement's most influential and insightful leaders have contributed to this special edition and have captured "a rich view of the credit union landscape," according to Steve Rodgers, editor-in-chief of Credit Union Magazine.

This issue's authors weigh in on several key questions:

  • Have credit unions stayed true to their original mission?
  • Are credit unions filling the role envisioned by their early architects?
  • If credit unions are off course, how has this happened and how can they get back on course?
  • What future directions should credit unions take?
  • Are there any unserved or underserved markets for credit unions?
  • What do you think the credit union movement will look like in 20 years?
  • What has been the movement's greatest success--and greatest failure--of late?
"Our readers are very involved in the movement and have their own opinions on these questions," said Rodgers. "That's why, for October, we've created a special page on our website related to this issue of Credit Union Magazine to encourage additional discussion on these critical topics. We'd love for this to become a forum for open discussion and capture a snapshot of today's credit union industry."

The website showcases historical images and past features from Credit Union Magazine. Readers can scroll through images that were originally created by sketch artist Joseph Stern for The Bridge--the earliest forerunner of Credit Union Magazine.

Credit unions have celebrated International Credit Union Day on the third Thursday of October since 1948. The day reflects upon the credit union movement's history and promotes its achievements. It is a day to recognize the dedication of those working in the credit union industry, appreciate current members and invite eligible consumers to join.

To join the conversation, use the link.

N.J. league amendment saves state CU Advisory Council

 Permanent link
TRENTON, N.J.  (10/16/12)--An amendment that saved the New Jersey Credit Union Advisory Council (CUAC) passed unanimously, and its bill--to create a Consumer Finance Advisory Board within the state Department of Banking & Insurance (DOBI)--was reported with the New Jersey Credit Union League's recommended amendment.

The bill--A-2941--which also repeals statutes establishing the Residential Mortgage & Consumer Finance Advisory Board, the Community Financial Services Advisory Board, and CUAC. It was scheduled last week for Thursday consideration by a state Assembly committee (The Daily Exchange Oct. 12).

The intent was to consolidate the activities of the three separate entities into one board that would advise and make recommendations to the DOBI commissioner on matters and issues the groups currently consider, the league said.

The legislation was in response to DOBI's recommendation under Gov. Chris Christie's Executive Order No. 15, which directed all departments to scrutinize the duties and spending of independent state boards, commissions, authorities and agencies. DOBI determined that the consolidation of the three entities into one "would best serve the needs of the citizens of this state."

The new board would have consisted of nine statutorily defined representatives with only two seats designated for credit unions, said the league.

The league prepared a position statement, and its contract lobbyist reached out to the bill's sponsor and the committee chairman, members and staff to advocate for a separate CUAC. The legislation would lump very different financial service providers into one advisory board with duties that would be, in many respects, inconsistent with those individual providers' businesses and expertise, the league said.

A suggested draft amendment to exclude the consolidation of the CUAC, omit credit unions issues from the new body's duties, and preserve the current CUAC statute also was submitted. The sponsor and committee chairman agreed to recommend adoption of the amended language when the bill came up for committee consideration.

Thursday morning, CUAC Chairman and Credit Union of New Jersey President/CEO Andy Jaeger and league Director of Government Affairs Chris Abeel visited the State House to thank the sponsor and committee chairman, and further press the case with committee members.

"This is a textbook example of a well-oiled government relations program that's able to react on a moment's notice," said league President/CEO Paul Gentile. "Credit unions are no longer back-bench players in Trenton, and this is proof positive of the tremendous strides in political and legislative advocacy we've made in recent years."

Ohio CUs added 28000 members in 12 months

 Permanent link
COLUMBUS, Ohio (10/16/12)--An increased anti-bank sentiment among consumers helped Ohio credit unions experience another strong economic performance, particularly in membership, deposit account, and loan growth, for the year ended in June, according to the latest Ohio Credit Union Quarterly Performance Summary.

The second-quarter report, which analyzes data from June 2011 to June 2012, reveals Ohio credit unions added more than 28,000 new members and 54,200 checking accounts during the period, and saw a 35% rise in loan originations.

"Credit unions offer products and services that benefit members, not shareholders, and the membership growth statistics clearly demonstrate that consumers realize this more than ever," said Paul Mercer, Ohio Credit Union League president.

"From an economic standpoint, it is encouraging to see an increased demand in consumer loans, which indicates Ohioans are again becoming comfortable enough to start to use credit. We haven't experienced this in the last few years, with consumers focused on paying down debt. If they now need loans, we are ready to serve their needs," Mercer added.

First-mortgage originations through June 2012 were strongly above levels reported in the first six months of 2011, said the league. Ohio credit unions originated $1 billion in first mortgages during the first half of 2012, up 68.8% from 2011. First mortgages outstanding grew 6.3% annually to reach $4.5 billion. Also, Ohio credit unions sold $382.7 million in first mortgages to the secondary market in the first six months of 2012. Every component of loan originations, except member business loans, posted an annual increase in June.

New-vehicle sales rose 18.3% from June 2011, which translated to growth in the credit union new-auto portfolio for the first time since third quarter 2007, despite heightened competition from captives. Ohio credit unions historically have reported above-average auto loan growth, and balances rose by 11.1% in the second quarter. Used-auto loan balances in the state increased 10.9% annually, while new-auto balances rose 11.4%. Credit union market share of auto loans in Ohio was 13.8% through June.

Asset quality continued to improve, with the delinquency rate down 13 basis points annually to 1.07% at the end of the second quarter. Ohio delinquencies remained below the national average of 1.21%.

Despite adding 28,000 new members, Ohio credit union membership growth was slower than the industry average of 2.3%. Membership grew at a compound annual growth rate of 49 basis points during the past five years. Credit unions nationally saw the highest-ever annual growth in share draft accounts in 2011 with 1.8 million new checking accounts.

Also increasing was the average Ohio member relationship, up to $12,293 at the end of the second quarter. This metric, representing the total dollar amount of loan balances (excluding member business loans) and deposits per member, increased 5.9% from the $11,603 reported in June 2011. This suggests that members are using their local credit union more often, and when coupled with the continued increase in members, points toward a positive future for the area's credit unions, the league said.

Factors that can contribute to the average member relationship include competitive rates, employed membership, and loan and deposit product variety. A credit union's ability to market and sell loan and deposit products also can have a measurable impact on the average relationship per member.

Business loan balances in Ohio grew 12.3% from the previous June, which is faster than the national average of 8.3%. Outstanding business loan balances stood at $456.2 million at the end of the second quarter. Business loan originations decreased from levels reported the previous June. During the first six months of 2012, Ohio credit unions originated $62.8 million in business loans, down 92 basis points from the $63.3 million in originations reported during the first half of 2011.

Although it represents just 3.4% of the Ohio loan portfolio, member business lending is becoming an increasingly important part of a credit union's suite of products, said the league. In the second quarter, 106 of Ohio's 370 credit unions reported outstanding business loan balances.

Ohio credit unions also are on a faster merger pace than in 2011. With seven mergers in the first half of 2012, Ohio is on pace for 14 mergers for the year, which is close to historical consolidation rates, the league said.

Research SaveUp pilot results in savings reduced debt

 Permanent link
SAN FRANCISCO (10/16/12)--SaveUp, the free nationwide rewards program that encourages Americans to save money and pay down debt, had a positive impact on savings behavior among those who participated in a six-month pilot study, according to a new report released today by the Filene Research Institute.

SaveUp is distributed to credit unions through CU Solutions Group. The research also revealed that credit unions increased member engagement and loyalty with SaveUp. See the link.

"SaveUp: Making Positive Financial Behavior Fun" reviews the six-month pilot that measured the impact of SaveUp on 14 participating financial institutions and their members, said Filene.

Key findings of the report revealed that SaveUp:

  • Raised financial awareness. More than half of the participants reported that SaveUp motivated them to save money and pay down debt.
  • Significantly improved each financial institution's reputation and relationship with its members. More than 40% of participants said they had a more positive opinion of their institution with SaveUp.
  • Drove deep and frequent customer engagements. Sixty-four percent of SaveUp users surveyed visited the website at least weekly during the pilot, with 49% visiting three or more times each week. Industry benchmarks show that on average, customers use traditional Internet banking two times per week.
  • Strengthened credit unions' loyalty rating. Using SaveUp, credit unions garnered a 76.4% net promoter score, which rivals top brands like USAA and Apple, with more than 75% of participating members recommending their credit union to family and friends.
  • Resulted in high customer satisfaction. Close to 50% of participants recommended SaveUp to their friends.
Fourteen financial institutions participated in the SaveUp/Filene Research Institute pilot. Among them were Northeast CU, Educators CU, Summit CU and Xceed Financial FCU. Combined, they have 620,000 members and over $7 billion in assets. 

"Our research shows the SaveUp program is a win for the financial institutions and their members," said Filene Research Institute CEO Mark Meyer. "SaveUp greatly enhanced their ability to engage with their members, raise awareness of their products and services, and influence positive savings behavior by making it fun." He noted that the majority of participating financial institutions are continuing their relationship with SaveUp beyond the six-month pilot.

SaveUp rewards users each time they contribute to their savings or retirement accounts; pay down their credit cards, mortgages, or other loans; or engage with SaveUp's financial education content.  Users earn credits for every positive financial action to redeem for possible prizes including cash, consumer electronics, free air travel, shopping sprees and vacations. Nearly 250 credit union members won prizes during the pilot, including several $1,000 winners.

SaveUp benefits both the end users, as well as their financial institutions, the study said. The study demonstrated that most users made progress on their personal financial goals and engaged with their credit union several times per week.

Participating in the SaveUp/Filene Research Institute pilot were:

  • California: Xceed Financial FCU, El Segundo;
  • Colorado: CU of the Rockies, Golden;
  • Michigan: Frankenmuth (Mich.) CU;
  • Missouri: Arsenal CU, Arnold;       
  • New Hampshire: St. Mary's Bank CU,  Manchester;
  • New Hampshire: Northeast CU, Portsmouth;
  • New Mexico: Southwest FCU, Albuquerque;
  • New York: GPO FCU, New Hartford;
  • Oregon: Oregon Employees FCU, Salem;
  • Pennsylvania: CTCE FCU, Reading;
  • Texas: Neighborhood CU, Dallas;
  • Virginia: Belvoir FCU, Woodbridge;
  • Wisconsin: Educators CU, Racine: and
  • Wisconsin: Summit CU, Madison.

CUNA economists adjust quarterly CU economic outlook

 Permanent link
MADISON, Wis. (10/16/12)--Credit Union National Association (CUNA) economists met last week to complete their quarterly update of the economic and credit union outlook, affirming the belief the economy will be OK despite looming national fiscal issues and fallout from European debt problems.   

The economists "made few changes to our existing outlook," said Mike Schenk, CUNA senior economist. In addition, "those that we did make were relatively minor," he added.

"Our baseline forecast continues to reflect the belief that the economy will sidestep the potential nasty consequences of a Eurozone meltdown and/or a fall off the 'fiscal cliff,'" Schenk explained. "The uncertainty surrounding those issues and combined with weakly recovering labor markets will likely keep investors, business and consumers continuing to behave cautiously in the months ahead."

The group cut its full-year 2012 estimate of economic growth by 0.30% --to 1.7% from 2.0%, but kept its full-year 2013 outlook unchanged, with an expectation of 2.5% growth.  That's well below the 3.25% post-war average and under the implicit 3% to 3.5% policy target.

"We made no change to our outlook for unemployment which continues to reflect an 8% average unemployment rate in 2012." They forecast the rate would finish the year at 7.75%--and, drift down "very slowly during 2013, averaging 7.75% during the year--and finishing the year at about 7.5%," Schenk said.

With cautious consumption, modest increases in aggregate demand and falling commodity prices, inflation pressures will stay within the Fed's comfort range, the group indicated.

"At this point, we think headline inflation will average 1.75% over the forecast horizon," Schenk said. "Given this, we see the Fed keeping its foot firmly planted on the economic accelerator--and no change in the Fed Funds  target rate over the next 14 months."

Low core inflation should likewise keep inflation expectations low. Therefore, the 10-year treasury yield is likely to change very little--averaging 1.8% in the fourth quarter, 1.82% for the year and 2.25% in 2013," the group said.

The credit union outlook calls for savings growth of 6% in 2012 and 5% in 2013--unchanged from the previous forecast--and for loan growth of 4% in 2012--up from the previous 3% forecast--and 5% in 2013. "Assuming we're correct and loan growth fails to exceed savings growth, credit union loan-to-share ratios will dip modestly with large, low-yielding investment portfolios continuing to put pressure on bottom-line results," Schenk said.

"The forecast is a bit more upbeat on the asset quality front, reflected in slight downward revisions to our delinquency forecast, but the group left net charge-off expectations unchanged with a net charge-off rate averaging 0.81% this year and 0.65% in 2013," Schenk said. That's a return toward--but not all the way "to"--normal. Net charge-offs average about 0.5% during economic expansions historically, he added.

"We still [forecast] bottom-line results at 0.8% for 2012 but reduced our full-year 2013 outlook to 0.7%," Schenk explained. "A slightly flatter yield curve will keep pressure on interest margins in 2013, and we expect mortgage originations to remain high, which will keep operating expense ratios marginally higher than they otherwise would be and since mortgage rates will be declining modestly the noninterest income related to gains on mortgage sales may erode despite strong origination volumes." 

Allowance accounts appear overfunded and declines in loss provisions will add about 20 basis points in earnings in 2012, compared with 2011, but there was some disagreement about the pace of future declines in provisions, the group said. "At the end of the day two of us agreed that the provision-for-loan-loss declines would be small in 2013," Schenk noted.

For  a copy of the full CUNA forecast, use the link.

Also, CUNA Chief Economist Bill Hampel's recently posted explanation of the forecast can be obtained by signing up for CUNA's "Pressing Economic Issues Series" for a video update and more thorough explanation of the changes and trends anticipated. For more information, use the link.

Cohenour appointed MCUA interim CEO

 Permanent link
ST. LOUIS (10/16/12)--Missouri Credit Union Association (MCUA) Chief Membership Officer Don Cohenour has been named interim president/CEO of the organization after Mike Beall announced he would leave MCUA Nov. 15 to become president/CEO of the National Cooperative Business Association (NCBA).

Beall had been MCUA president/CEO since Nov. 1, 2010. (See related News Now story, "Mike Beall named president/CEO of NCBA.")

Cohenour will work in transition with Beall to keep a strong momentum of projects and services in support of MCUA's vision of "making credit unions grow" moving forward, said MCUA in a press release Monday.

"Don brings a deep understanding of the board's strategic plan and initiatives like the Statewide Consumer OutreachProgram and our Community Development Financial Institutions Initiative," said MCUA Chairman Dennis Pierce, CEO of CommunityAmerica CU. "He will do a great job driving these strategic programs into 2013 and beyond."

Cohenour's career at MCUA has centered on providing consulting and operational advice to Missouri's credit unions. He is a former credit union CEO, consultant with the Kansas Department of Credit Unions and spent six years as controller of U.S. Central FCU.

"Mike has provided strong leadership and has helped set the direction and vision to help MCUA and the credit unions of Missouri succeed," says Pierce. "His work to develop the plans for Statewide Consumer Outreach Program and Community Development Financial Institutions Initiative are a great legacy. Mike's new work at NCBA will put him at the center of national advocacy for cooperatives--including credit unions--as well as with the multiple international development projects that are his passion. We wish him well in his new endeavor."

Prior to Beall's departure, he and Cohenour will complete the 2013 MCUA budget, and salary and benefits review, as well as create a smooth transition of MCUA's strategic initiatives.

Mike Beall named presidentCEO of NCBA

 Permanent link
WASHINGTON (10/16/12)--The National Cooperative Business Association (NCBA) has named Michael V. Beall as the cooperative organization's new president/CEO, effective Nov. 16.

Beall is currently president of the Missouri Credit Union Association (MCUA). Previously, he held leadership positions with the Maryland/District of Columbia Credit Union Association and the North Carolina Credit Union League. He also served with the World Council of Credit Unions.

The Credit Union National Association (CUNA) "applauds the selection of Mike Beall as the new CEO of the National Cooperative Business Association," said CUNA President/CEO Bill Cheney.

"I've known Mike personally for years, and I look forward to the energy and creativity he will surely bring to the position. Along with a solid record of association management experience, Mike has championed the cooperative business model at every stage of his career, and he has a deep understanding and appreciation of the model's economic and societal benefits in the U.S. and abroad," Cheney said. "We at CUNA look forward to working closely with Mike in our capacity as a member of the NCBA board and generally in the service of credit unions and other cooperative sectors."

NCBA Chairman Wilson H. Beebe said Beall's selection "was based on several key factors--his extensive experience in providing advocacy and development services to credit unions through their state, national and international associations, his familiarity with international development administration, as well as his transactional and business process experience.

"Combined with Mike's demonstrated commitment to the cooperative principles of economic self-determination, his career background made him the outstanding and unanimous choice of the board of directors to lead NCBA's revitalization of its domestic mission and the diversification of its work abroad," Beebe said.

Beall has been a driving force in the expansion of the credit union community's Development Educator program, which instills cooperative principles in senior cooperative and credit union executives in the U.S. and abroad.

Throughout his career he has focused on the power of collaboration and partnerships to enhance organizational effectiveness. At MCUA, he established partnerships between cooperatives and credit unions related to community development financial institutions (CDFI) certifications. During his tenure at the Maryland/D.C. association, he presided over the first merger between state credit union associations.

Beall said that NCBA's "work over the next few years will be centered on strengthening the cross-pollinating of business opportunities between cooperative sectors, raising awareness of the cooperative business model on Capitol Hill and throughout the federal government, showcasing the role cooperatives play in the domestic and worldwide economies, and tying international cooperative development initiatives to the membership of NCBA. I look forward to enhancing the value of NCBA membership with all sectors of cooperatives."

Liz Bailey, who served as NCBA's interim CEO and president during the search, will continue to serve as NCBA's vice president for public policy and domestic development, as well as executive director of the Cooperative Development Foundation.

Also, the MCUA Executive Committee has named MCUA Chief Membership Officer Don Cohenour as its interim president/CEO.  Cohenour will work in transition with Beall to keep MCUA's projects and services supporting its "making credit unions grow" vision moving forward, said MCUA in a news release. (See related News Now story, "Cohenour named MCUA interim CEO")

NEW MCUAs Beall named presidentCEO of NCBA

 Permanent link
WASHINGTON (FILED 1:50 p.m. ET 10/15/12)--Mike Beall, president of the Missouri Credit Union Association (MCUA), has been named president/CEO of the National Cooperative Business Association (NCBA), effective Nov. 16.

Beall has held leadership positions in three state credit union associations--MCUA, Maryland/District of Columbia Credit Union Association, and the North Carolina Credit Union League. He also has served with the World Council of Credit Unions.

The Credit Union National Association (CUNA) "applauds the selection of Mike Beall as the new CEO of the National Cooperative Business Association," said CUNA President/CEO Bill Cheney.

"I've known Mike personally for years, and I look forward to the energy and creativity he will surely bring to the position. Along with a solid record of association management experience, Mike has championed the cooperative business model at every stage of his career, and he has a deep understanding and appreciation of the model's economic and societal benefits in the U.S. and abroad," Cheney said. "We at CUNA look forward to working closely with Mike in our capacity as a member of the NCBA board and generally in the service of credit unions and other cooperative sectors."

NCBA Chairman Wilson H. Beebe said Beall's selection "was based on several key factors--his extensive experience in providing advocacy and development services to credit unions through their state, national and international associations, his familiarity with international development administration, as well as his transactional and business process experience.

"Combined with Mike's demonstrated commitment to the cooperative principles of economic self-determination, his career background made him the outstanding and unanimous choice of the board of directors to lead NCBA's revitalization of its domestic mission and the diversification of its work abroad," Beebe said.

Beall will assume the NCBA position on Nov. 16. Liz Bailey, who served as interim CEO and president during the search, will continue to serve as NCBA's vice president for public policy and domestic development, as well as executive director of the Cooperative Development Foundation.

The MCUA Executive Committee has named MCUA Chief Membership Officer Don Cohenour as interim president/CEO.  Cohenour will work in transition with Beall to keep MCUA's projects and services supporting its "making credit unions grow" vision moving forward, said MCUA in a news release.

Oregon Wash. CUs hold annual meeting and convention

 Permanent link
VANCOUVER, Wash. (10/15/12)--Recognizing outgoing CEO John Annaloro for his 15 years of association leadership was the top bill at the Annual Business Meeting at the Northwest Credit Union Association's (NWCUA) 2012 Convention and Annual Business Meeting in Vancouver, Wash.

Credit union leaders from Oregon and Washington gathered in Vancouver, Wash., earlier this month for the annual meeting. In addition to discussing the collective accomplishments and future focus of the association under his guidance, Annaloro was also lauded for his personal accomplishments on behalf of credit unions as he officially announced his retirement, handing over the keys to the association's corner office to Troy Stang, who had served as president (Anthem Oct. 9).

Spokane Media FCU President/CEO Debie Keesee was installed as the new chair of the NWCUA's board of directors, taking the reins from Mid Oregon FCU president/CEO Bill Anderson, who had been the board chair since the merged association was formed in 2011. 

The remaining directors were officially seated at the meeting as well, having gone from an at-large 18-member board to an 11-member board reflecting the NWCUA's eight geographic districts and three asset-size classifications.

NWCUF also seated it board of directors.

Credit Union National Association Chairman Mike Mercer provided the first keynote address, revealing national credit union strategies.

Dr. Neil Goldman presented attendees with a look at exclusive research funded by the NWCUA regarding public awareness of the credit union difference--and how credit unions can best spread their message. 

The last day's keynote address came from Jeff Russell, who told convention-goers to "prepare for change" when it comes to payment systems, and U.S. Sen. Jeff Merkley (D-Ore.) brought up the credit union member business lending bill during his address, saying, "Let's get that done!"

Florida CUs get third new commissioner since last year

 Permanent link
TALLAHASSEE, Fla. (10/15/12)--For the third time in the past year, Florida has appointed a new commissioner for the Florida Office of Financial Regulation (OFR), which will impact Florida credit unions.

Drew Breakspear will assume the duties of the office on Nov. 5 (Sunshine State News Oct. 9 and South Florida Business Journal Oct 10).

OFR is responsible for regulating most financial industries in Florida, including credit unions, banks, mortgage brokers, investment advisers, securities brokers and lending companies, the Journal said. 

Breakspear has worked in the financial industry for more than 40 years, in the international banking industry and management consulting.

He most recently served in the capacity of executive vice president and general auditor at State Street Corporation, which he joined in in 1995. Prior to that, he served as senior vice president at First Nationwide Bank in San Francisco.

Patrick La Pine, president/CEO of the League of Southeastern Credit Unions (LSCU), provided News Now with a statement on the new commissioner.

"During the Florida cabinet meeting where Mr. Breakspear was appointed as the new Florida Office of Financial Regulation commissioner, LSCU staff had an opportunity to speak with him," La Pine said. "After he takes office on Nov. 5, we plan on setting up a meeting to give him a full briefing about credit unions in Florida as well as the league. During the vetting process, we were assured that the new commissioner would take a balanced and fair approach to regulations of credit unions, banks and insurance companies. We look forward to working with Mr. Breakspear."

Linda Charity, a veteran banking regulator, served as interim commissioner of OFR since Tom Grady resigned in March, the Journal said.

Gabel named chief operating officer at Northwest CU Assoc.

 Permanent link
FEDERAL WAY, Wash. (10/15/12)--Denise Gabel has been named chief operating officer of the Northwest Credit Union Association (NWCUA). She will report directly to Troy Stang, NWCUA president/CEO. The appointment is effective Nov 5.

Gabel is currently the chief finance and strategy officer at the Filene Research Institute, a credit union industry think tank dedicated to scientific and thoughtful analysis about issues affecting the future of consumer finance. She is responsible for identifying trends and opportunities to bring to the credit union system.

"[Denise] shares our passion for a successful credit union movement in the Northwest and will be charged with direct operational oversight of critical services we provide for nearly 200 credit unions in the region," Stang said. "This includes compliance services, training and development, public relations and the Northwest Credit Union Foundation. She will also provide direction to Strategic Link, our service corporation which leverages cooperative intelligence and provides credit unions with efficient products and services through preferred business solutions."

Another priority for Gabel will be working with all credit unions to ensure collaborative engagement and participation, Stang said. In her role as a Filene innovator, Gabel has deep understanding of the challenges and opportunities within the industry.

With Gabel on board overseeing the organization's operations, Stang will remain directly involved in the oversight of NWCUA's  legislative, regulatory and governmental affairs policy efforts.

"The appointment of Denise as chief operating officer will leverage both my experience in public policy work, and her talent in team leadership and innovation," Stang said. "Coupled with the association's dedicated team of professionals, our membership will realize the value of association well into the future."

Celebrate ICU Day on Thursday

 Permanent link
MADISON, Wis. (10/15/12)--Credit unions will celebrate International Credit Union Day Thursday. This year's theme is "Members Matter Most."

The Credit Union National Association (CUNA) and Credit Union Magazine want to take a snapshot of the credit union world on ICU Day. CUNA and Credit Union Magazine are collecting photos, videos and stories about credit unions' ICU Day experiences. Photos, videos and messages can be sent to cumagadmin@cuna.com. Credit Union Magazine will display the results online.

Credit Union Magazine will also publish a "bonus" edition on ICU Day. The issue, sponsored by CUNA Strategic Services provider, Diebold, will provide an overview of credit unions' past and a look at its future.

Among the ways credit unions and leagues nationwide are celebrating ICU Day include:

  • Cutting Edge CU, Milwaukie, Ore., will host an open house at both branches, with refreshments, door prizes, and gifts for visitors.
  • Florida Hospital CU, Altamonte Springs, Fla., is asking its members to share their stories about how the credit union has made positive difference in their lives. Members can submit an application with their story for a chance to win $150 Visa Gift Card.
  • Officers, directors, managers and staff of Consumers CU, Waukegan, Ill., will greet members and the general public to celebrate ICU Day. Those who stop by can enjoy a cup of coffee and a donut or cookie, a free gift and information about ICU Day.
 

The Pennsylvania Credit Union Association, recently surveyed its member credit unions about how they are celebrating ICU Day (Life is a Highway Oct. 12):

The responses included:

  • Serving refreshments in lobby--27 (56.3%)
  • Providing give-aways to members--17 (35.4%)
  • Promoting ICU Day on Facebook page--11 (22.9%)
  • Wearing special logowear in branches--10 (20.8%)
  • Holding an open house--4 (8.3%)
  • Hosting a coloring contest for young members--4 (8.3%)
  • Collecting/donating items for charitable cause--4 (8.3%)
  • Inviting VIPs to visit--2 (4.2%)
  • Sponsoring a seasonal community festival--1 (2.1%)
In celebration of ICU Day, CUNA Mutual Group issued this message:

"As we celebrate International Credit Union Day this month, CUNA Mutual Group is proud to celebrate credit unions and reaffirm our commitment to the credit union movement. Whether we are working with state Leagues and national associations, lobbying Congress or finding new ways to serve low-income members, our genuine dedication to the success of the credit union movement drives our actions every day.

"This commitment makes a difference in the system. For instance, in 2011, we were able to support the marketplace in a variety of ways throughout the year, including: More than $35 million to leagues, associations, National Credit Union Foundation, Filene Research Institute, Credit Union Development Education, and other credit union organizations; $962 million in benefits paid to domestic credit union policyholders; more than $1.2 billion in total benefits paid to domestic policyholders and credit union support."

CUNA Mutual Group also noted a number of initiatives the company had participated in during 2011, including:

  • Financial literacy program support through the National Credit Union Foundation, including funding and development of the Retirement Reality Fair;
  • Actions to address credit card and check fraud in the credit union system;
  • Scholarship funds to CUNA Management schools for credit union staff;
  • Support for low-income members through the National Federation of Community Development Credit Unions; and
  • Political advocacy and a dedicated Corporate and Legislative Affairs team working to support the future of the credit union industry, including: Tax exempt status of credit unions, critical mortgage lending reform, the IRS' Unrelated Business Income Tax, Regulation Z.
Credit unions have celebrated ICU Day on the third Thursday of October since 1948. The day reflects upon the credit union movement's history and promotes its achievements. It is a day to recognize the dedication of those working in the credit union industry, to appreciate current members and to invite eligible consumers to join credit unions.

Romanian CUs seek marketing insight through WOCCU partnership

 Permanent link
Click to view larger image Representatives from the Federation of Romanian Credit Unions in a recent visit to Ohio included (from left) Chairman Serban Nicolae, Director Cristian Florin Bota, CEO Florin Simion and Director Sandu Marian Scirlet (not pictured).
COLUMBUS, Ohio (10/15/12)--The Federation of Romanian Credit Unions (FEDCAR) visited credit unions in Ohio the first week in October to learn modern marketing strategies to help their credit unions build visibility and membership with limited resources. The Ohio Credit Union League (OCUL) hosted FEDCAR officials through World Council of Credit Unions' (WOCCU) International Partnerships Program.

As part of their partnership agreement signed in 2011, OCUL provided marketing training geared toward bringing more credit unions into FEDCAR's membership. Training focused on techniques to improve member products and services, raise visibility and overcome perceptions that Romanian credit unions are remnants of Soviet rule.

The Romanian delegation visited several other credit unions ranging from the state's largest, Wright-Patt CU in Fairborn, to the newest and smallest, Nueva Esperanza Community CU in Toledo. Additional visits included Corporate One FCU in Columbus, Directions CU in Sylvania, and CSE FCU in Canton. Each credit union presented a different set of useful marketing strategies and tools for FEDCAR, according to John Florian, OCUL vice president of government and political affairs.

"Since FEDCAR's primary objective was to learn best practices in marketing, we asked some of our best Ohio credit union marketing professionals to share their most effective promotional strategies, and they did a fantastic job," Florian said.

Click to view larger image Federation of Romanian Credit Unions officials visited Corporate One CU in Columbus, Ohio,  employees to learn about products and services provided by corporate credit unions. Pictured, from left, are: Director Sandu Marian Scirlet, Chairman Serban Nicolae, Director Christian Florin Bota, Corporate One Chief Technology Officer Kurt Lykins and CEO Florin Simion. (Photo provided by the World Council of Credit Unions)

Throughout the visit, FEDCAR officials learned about several credit union marketing initiatives, including product lines targeting youth members and a local reality TV program with a financial education spin. FEDCAR CEO Florin Simion said they plan to adapt and apply many of the things they learned to their own credit union system.

"We have learned a lot about their marketing products, projects and day-by-day activity," Simion said. "We participated in presentations regarding what is to be done for more visibility in the community, how to better assess people's needs and how to serve them better."

Joining Simion on the visit were FEDCAR Chairman Serban Nicolae and board members Sandu Marian Scirlet and Cristian Florin Bota. OCUL hosts included Paul Mercer, president/CEO, and Florian. Victor Miguel Corro, WOCCU vice president of the Worldwide Foundation for Credit Unions and director of the International Partnerships Program, coordinated the visit.

"Regarding our visit to Ohio, I have to say it was a real success," Simion said. "It was a real lesson of how marketing and promotions have to be conducted in a credit union. We will surely use all the information gathered during our visit."

OCUL delegates will visit FEDCAR and its credit unions in Romania in mid-2013 for additional marketing training. OCUL also plans to provide lobbying support for better credit union legislation in Romania, according to Florian.

Missouri Corp. CU partners with Brick and Associates

 Permanent link
ST. LOUIS and EAST LANSING, Mich. (10/15/12)--Missouri Corporate CU has entered into a marketing agreement with Brick & Associates Inc., an asset-liability management (ALM) consulting company, to bring ALM products and services to its member credit unions.

Missouri Corporate's members who contract with Brick & Associates for ALM services obtain assistance in developing an ALM/IRR Policy as required under the NCUA's new Interest Rate Risk regulation. Member credit unions can purchase Brick & Associates' CU/BUDGET-ware and CU/ALM-ware Systems and Consulting services.

Brick & Associates also assists credit unions in developing a Liquidity Management Policy and a Contingency Funding Plan in conjunction with the NCUA's proposed rule on emergency liquidity. Brick's Model Concentration Risk Policy is also included in the firm's ALM relationships.

Missouri Corporate CU, based in St. Louis with about $300 million in assets, was chartered in 1976 and serves credit unions in Missouri, Illinois, North Dakota and Oklahoma.

Brick & Associates, based in East Lansing, Mich., was formed in 1987 and serves over 650 clients nationwide.

CU System briefs (10/12/2012)

 Permanent link
WASHINGTON (10/15/12)--The National Association of Housing Cooperatives (NAHC)  honored Liz Bailey, interim president/CEO of the National Cooperative Business Association, for outstanding leadership and awarded her the NAHC President's Award during its annual meeting in Reno last week. The award recognizes Baily and the NCBA for bringing 150 leaders of the U.S. cooperative community to the White House in May to discuss cooperative values and "let top-level Obama administration officials know that co-ops are values-based businesses and engines of growth," an NAHC release said.  During  the White House Community Leaders Briefing on Cooperatives, Jobs and the Economy, co-op leaders focused on ways that cooperatives generate jobs and contribute to the economy, as well as opportunities for the federal government to support cooperatives. NCBA organized the meeting and the Credit Union National Association represented credit unions …

CO-OP Financial Svcs. launches Ask EMV Expert

 Permanent link
RANCHO CUCAMONGA, Calif. (10/15/12)--CO-OP Financial Services has launched an educational initiative for credit unions preparing for Europay, MasterCard, VISA (EMV).

The initiative includes an "Ask the EMV Expert" Web page, white paper and webinar--all at no charge.

"EMV deployment in the U.S. is still in its beginning stages, with available options that are varied and complex," said Stan Hollen CO-OP Financial Services president/CEO. "The unifying theme of our products is that they work together to make the members' experience with their credit union a more convenient one. We're also a source of strategic counsel, and our 'Ask the EMV Expert' initiative is intended to make EMV adoption a little easier for credit unions."

CO-OP's "Ask the EMV Expert" Web page features a forum for credit unions to submit questions and receive replies from CO-OP's EMV subject matter experts. The page links to EMV background resources and provides downloads to CO-OP-originated documents on the emerging open standard.

The CO-OP white paper focuses on issues that credit unions address as they consider how quickly they need to adopt EMV. The paper pays particular attention to the business case of issuing EMV chip cards, as it is considerably different than traditional magnetic stripe cards. The white paper can be downloaded for free from CO-OP's EMV Resource Center Web page.

CO-OP will be holding webinars every four months going forward; one to serve as an introduction to EMV, the other a more advanced update on the latest technical and industry announcements. The first webinar will follow the format of the white paper, and will be held at 10 a.m. (PT) on Oct. 25. Registration for the webinar is also available online.

CO-OP is developing EMV technology in a phased approach, including Phase I development of On-Behalf-Of Processing from CO-OP that will support online EMV transactions from a contact EMV card. CO-OP will validate EMV cryptograms, but the chip card data will be translated to and processed as magnetic stripe transactions. The CUSO expects to go live with EMV On-Behalf-Of Processing by the end of the year.

Cal. League honors Calva CoastHills FCU

 Permanent link
ONTARIO, Calif. (10/15/12)--America's Christian CU Vice President and Chief Strategy Officer Jeremy Calva and CoastHills FCU in Lompoc, Calif. are the 2012 recipients of the California Credit Union League's Kim Bannan Eternal Flame Awards.

The awards recognize efforts that contribute to the success and future of Shapiro Group credit unions through the cooperative spirit of "People Helping People." The league's Shapiro Group provides assistance to small credit unions.

As this year's recipient in the individual category, Calva, was recognized for his long-time dedication to providing education to small credit unions--both while with Western Corporate FCU and at America's Christian CU, Glendora, Calif. While with the corporate credit union, Calva--working with other employees--developed training and education to help small credit union decision-makers become better investors.

This year, when approached with the idea of producing an investment education series to help small credit unions make informed decisions, Calva donated his expertise and time to assist in creating a curriculum.

The award recipient in the company category, CoastHills FCU, Lompoc, Calif., was honored for not only financially supporting the Shapiro Group but also supporting SLO CU in San Luis Obispo, Calif. in a variety of ways.

Most recently, CoastHills FCU and its CEO Jeff York recently established an agreement to allow SLO CU to use CoastHills FCU facilities in the event of a disaster.

As a small, one-office credit union, the ability to find accommodations in the event of a disaster is not always easy, said Suzanne Leedale SLO CU CEO.

Both Calva and CoastHills will be honored during this year's California Credit Union League's Annual Meeting and Convention Nov. 12-14

The awards were named after Kim Bannan, the league's former vice president of credit union development and research and information.

A CUs brand needs to create emotional bond CMG

 Permanent link
MADISON, Wis. (10/12/12)--Establishing a credible brand for a credit union can create an emotional bond with members that will set it apart from competitors in an increasingly complex, fractured and commoditized financial services industry, a CUNA Mutual Group brand director told an Online Discovery audience Tuesday.

Alan Bergstrom of CUNA Mutual Group answers questions during the live question-and-answer portion of his session about establishing a credible brand for a credit union can create an emotional bond with members, at the Online Discovery Conference on Tuesday.  (Photo provided by CUNA Mutual Group)
Alan Bergstrom, director, brand and creative services for CUNA Mutual, said there is great confusion and misunderstanding among brand owners and managers as to what constitutes a good brand.

"A large percentage think it's just a logo and a name, but a brand is so much more than that, and many don't understand the full potential brands have to create affinities and cement lifelong relationships with customers," Bergstrom said.

Brands create emotional connections and reduce the likelihood loyal customers will compare and evaluate competitive products. They also generate equity and value which command higher prices and margins. "Very simply, a brand is about making a promise and keeping that promise day-in and day-out," Bergstrom said Tuesday.

Successful brands are authentic, stand apart from others and deliver a deliberate and consistent promise. Bergstrom cited Coca-Cola, Disney, Southwest Airlines and Harley-Davidson as companies that have been able to create "sticky" long-term brands.

"The relationship customers have with Harley-Davidson is a great example," he explained. "People have such a deep emotional connection with that brand that some not only buy their motorcycles, they have the company's logo tattooed on their bodies."

Most purchasing decisions are made subconsciously, which is why many people have trouble articulating their buying behavior. "We can rationalize why we bought a Ford truck, for instance, by citing all the bells and whistles it has, but that buying decision may be due more to subconscious feelings and the strong relationship we have about the Ford brand," Bergstrom said.

He likened a brand to an iceberg. "At the surface you may only see the tip (name and logo), but it's the hidden part of that brand that is the most meaningful and drives decision-making and subconscious buying behavior," Bergstrom added.

It is with those successful sticky brand traits in mind that CUNA Mutual Group earlier this year launched TruStage, the company's new consumer-facing insurance and investment brand for credit union members, he said.

Bergstrom advised attendees to develop a more meaningful relationship with members by creating a brand positioning statement that is authentic and stands apart from the competition. "Identify the strongest connections between your credit union and its members," he said. "Your brand story will determine what your credit union offers that is relevant and motivating in comparison to your competitors' offerings."

However, Bergstrom cautioned that people are more skeptical and jaded around advertising in today's commoditized world and are more likely to switch products if a brand doesn't deliver as promised.

"It's a shift from even just 10 years ago," he explained. "You must deliver your promise every day across everything you do--deliberately and consistently at every member touch point."

Online Discovery is CUNA Mutual Group's Web-based equivalent of a face-to-face conference without the associated expenses or time away from the office. The free, online event attracted a national and international audience of more than 1,800 credit union and league staff. The conference aims to help credit unions solve problems, face challenges, and address opportunities all from the convenience of their computer.

CMG Migrate to chip technology to prevent fraud

 Permanent link
MADISON, Wis. (10/12/12)--The need for credit union card issuers to migrate from magnetic stripe to chip technology to prevent fraud and remain competitive has been explained for more than a year by CUNA Mutual Group's Ann Davidson. While some are heeding her advice, others are not, so she made another plea to a CUNA Mutual Online Discovery Audience Tuesday.

There is a need for credit union card issuers  to migrate from magnetic stripe to chip technology to prevent fraud and remain competitive, Ann Davidson, senior consultant, Risk Management for CUNA Mutual Group, told a CUNA Mutual Online Discovery Audience Tuesday. (Photo provided by CUNA Mutual Group)
Davidson, senior consultant, risk management for CUNA Mutual, said the magnetic stripe has been around since the 1960s and is going the way of the dinosaur worldwide. However, the U.S. is the last country in the world to convert to chip technology across its payment structure.

"That continues to make us vulnerable to magnetic stripe fraud, including 'card present counterfeit' schemes such as point-of-sale skimming, data breaches and devices on ATMs," Davidson said.

The U.S. Secret Service reports magnetic stripe fraud cases have risen by 10% during the past three years. Also, Nilson Report research indicated U.S. card fraud losses are more than twice as much as global fraud losses--9 cents compared to 4.5 cents for every $100 in transactions.

Migrating to Europay/MasterCard/Visa (EMV) contact and contactless chip technology will help combat card-present magnetic stripe fraud. "By having chip technology as an additional payment option, credit unions will likely experience a significant decrease in counterfeit magnetic stripe fraud provided their cardholders use the chip capability on the card," Davidson said.

Chip-and-pin technology is considered much safer than mag-stripe, Davidson said, because authentication employs unique data for each transaction, which enhances security. The contactless chip field also supports mobile near field communication (NFC) chip transactions.

"Remember, during the migration to chip, cards will maintain the magnetic stripe," she explained. "It will be important to have ongoing education to cardholders to teach them to not swipe their card and instead use the new chip technology."

After switching to chip technology, Canada's annual debit card fraud dropped by more than half from $142 million in 2009 to $70 million in 2011, she said.

Other forces are pressuring card issuers to make the switch. Visa announced plans to accelerate migration to EMV chip technology in the U.S. Likewise, MasterCard announced all ATM transactions occurring in the U.S. will need to be compliant with EMV standards to avoid having issuers accept fraud liabilities.

"Likewise, if the acquiring financial institutions' merchant entities do not support chip transactions, they may be financially liable for magnetic stripe fraud," Davidson said.

Visa's liability shift to the acquirer/merchant is Oct. 1, 2015 (Oct. 1, 2017 for fuel merchants). MasterCard's liability shift to the ATM owner/acquirers for Maestro transactions is April 2013, and in October 2016, all fraud liability will shift to ATM owners/acquirers.

"When merchants become responsible for fraud losses, many may no longer accept the increased risk of accepting magnetic stripe transactions," Davidson said. "If you're not offering chip technology, your members' cards may not be accepted, which will create [public relations] and member service issues and put your credit union at a competitive disadvantage."

U.S. cardholders are already finding it increasingly difficult to use their magnetic stripe cards in foreign countries.

Davidson praised credit unions switching to chip but cautioned that even this new technology is not flawless. Reports from the United Kingdom indicate it's critical to make sure the PIN number is unpredictable (random) and not set up as a potential predictable number that could be easily solved by criminals. "Ask about PIN predictability when you make the change."

In summary, Davidson said the time to migrate is now. "If you're last in line to deliver chip technology, you may end up first in line for fraud," she concluded.

Online Discovery is CUNA Mutual Group's Web-based equivalent of a face-to-face conference without the associated expenses or time away from the office. The free, online event attracted a national and international audience of more than 1,800 credit union and league staff. The conference aims to help credit unions solve problems, face challenges, and address opportunities all from the convenience of their computer.

CUNA Coopera launch Hispanic portal

 Permanent link
MADISON, Wis. (10/12/12)--A Hispanic Resources Portal, provided by the Credit Union National Association (CUNA) and Coopera, is now live on Credit Union Magazine's online site.

The portal page is designed to provide resources for credit unions looking to start or enhance their outreach efforts to Hispanic members. Coopera is a consulting organization that helps credit unions reach Hispanic markets.

"CUNA and Coopera are dedicated to helping credit unions attract and serve members of the Hispanic community," said Miriam De Dios, Coopera CEO. "This site is a repository of the critical resources credit unions need as they develop strategic goals for their Hispanic outreach efforts. Providing dignified financial services and products to the largest, fastest-growing and youngest demographic in the U.S. is a smart investment for any credit union."

The new Hispanic Resources Portal contains information related to the Hispanic market, including up-to-date data and statistics from the 2010 U.S. Census. The site also features Coopera's blog, which provides insight into current trends and news affecting and influencing Hispanic members, and gives credit unions access to products and services that CUNA and Coopera provide, such as the Hispanic Outreach Insights newsletter and free monthly educational webinars.

"Providing access to this information as part of Credit Union Magazine's site will increase the awareness and accessibility of crucial Hispanic-market resources that credit unions need to initiate or expand their outreach efforts," said Mark Condon, CUNA senior vice president. "Fresh content will be added constantly to ensure credit unions have all the latest information, tools and resources to develop successful programs."

Coopera and CUNA designed El Poder es Tuyo (The Power is Yours), a customizable, Spanish-language personal finance website for Hispanic credit union members and potential members.

For more information, use the resource link.

To visit the portal, use the link.

10K reward offered in deadly ATM shooting

 Permanent link
MEMPHIS, Tenn. (10/12/12)--Orion FCU, Memphis, Tenn., is offering a $10,000 reward for information leading to the arrest of the men responsible for the alleged attempted robbery and deadly shooting of a woman who used the credit union's ATM Tuesday night.

When officers arrived on the scene around 7:20 p.m. on Tuesday they found a vehicle crashed into a utility pole. Investigators say the female driver had just left nearby Orion FCU ATM where two male suspects tried to rob her in her vehicle while she was getting cash (abc24.com Oct. 11).

The suspects allegedly shot the woman, later identified as 44-year old Roneccia Luster, and she drove off and crashed. She was transported to a local hospital where she was pronounced dead.

Police say the same two men then tried to steal a car from a man about 200 feet down the road from where the attempted robbery happened. A male victim was shot twice as he drove away. He was taken to the same hospital where he remains in critical condition.

Police are asking for the public's help to find the two armed men responsible for the shootings.

Investigators say the suspects, who were both black men, fled on foot. One of them was wearing a white hoodie.

Filene adds Desjardins Group as benefactor

 Permanent link
MADISON, Wis. (10/12/12)--Desjardins Group, Canada's largest cooperative financial institution and one of the top 10 in the world, has joined the Filene Research Institute as a Gold Benefactor to help examine consumer and policy issues impacting cooperatively held organizations.

The Gold Benefactor designation signifies that the donor invests $50,000 annually with Filene.

"Desjardins serves its members so well and represents one of the most advanced examples of how cooperative finance can thrive in the modern economy," said Mark Meyer, CEO of the Filene Research Institute. "We are excited that the research aims of the Desjardins Group align so closely with ours, and we look forward to working together to chart a path for a sustainable cooperative credit union future."

"Through our actions, we want to create a solid and united cooperative movement, said Monique F. Leroux, Desjardins Group chairman, president and CEO.  "At Desjardins we believe in cooperation. It is in our DNA. It is our past and our future. Filene shares our commitment to creating projects that foster education, cooperation, and personal engagement."

In 1900, after years of research and correspondence, Alphonse Desjardins created the caisse populaire, a savings and credit cooperative inspired by the experiences of people's banks and rural credit unions in Europe and savings banks in North America. Desjardins' work extended into the U.S., where he helped found American credit unions and came into contact with early credit union pioneers like Edward Filene.

Filene and Desjardins will work together on research and innovation projects that advance the interests of consumers and credit unions.

Call for CUNA director election nominations announced

 Permanent link
WASHINGTON and MADISON, Wis. (10/12/12)--The Credit Union National Association (CUNA) is seeking nominations for eight positions on the CUNA Board of Directors.

Positions up for election are:

  • District 1, Class C
  • District 2, Class A
  • District 3, Class B
  • District 4, Class C
  • District 5, Class B
  • District 5, Class D
  • District 6, Class A
  • District 6, Class D
An individual must be an employee or voting board member of the nominating credit union to be an eligible candidate elected by credit unions and the nomination must be seconded in writing by at least two other credit unions from the same district and class.

To become an eligible candidate to be elected by leagues, an individual must be a league president and must be nominated in writing by his or her league, and the nomination must be seconded in writing by at least one other league from the district.

Important dates to know:

  • Nominations are being accepted through Nov. 16;
  • For contested elections, ballots will be sent Nov. 21, with voting continuing through Jan. 4. Results of contested elections will be announced Jan. 8; and
  • Directors will take office upon the adjournment of CUNA's Annual General Meeting on Feb. 25.
Nomination packets are available by calling 800-356-9655, ext. 4013; using the resource link or e-mailing thanson@cuna.coop.

CUNA Mutual CUs face more regulatory challenges

 Permanent link
MADISON, Wis. (10/11/12)--Credit union compliance staff will spend most of their time on new proposed and final rules issued by the Consumer Financial Protection Bureau (CFPB) in 2013 attendees of CUNA Mutual Group's Online Discovery Conference were told on Tuesday by Lauren Calhoun, and Bill Klewin, both of CUNA Mutual Group. 

"This has been the most challenging regulatory environment we have ever had in my 30 years of experience with lending compliance--and it will continue to be one of the most challenging as we move forward," said Klewin, director of regulatory compliance. "The complexity and depth of compliance changes will tax credit union staff, create additional expense and could have a negative impact on member service." 

The CFPB issued 3,365 pages of proposed rules in just one six week period this summer, said Calhoun, CUNA Mutual Group's regulatory compliance manager. "That is on top of the hundreds of pages of rules already issued this year," she said. "Some of the changes will be technical in nature, while others, such as the proposed mortgage rules, will require a complete overhaul of credit unions' mortgage lending portfolio.

"Mortgages, mortgages, mortgages will consume credit union compliance staff in 2013 and beyond," said Calhoun. The CFPB has issued seven proposed mortgage rules, each with comment period closing dates in October or November. The CFPB will analyze comments and issue final rules in January and throughout the year, dependent on the rule. 

A more immediate requirement that has been clarified for credit unions is the Remittance Transfer Rules, which has a mandatory compliance date of Feb. 7. A credit union must comply with the new rules if it initiates more than 100 remittance transfers in a calendar year. The required disclosures –a pre-payment disclosure and a receipt--are pretty simple; it will be the execution of completing the forms that will be difficult. It will additionally require training new employees as well as developing new processes to be sure the new disclosures are distributed in a timely fashion.

Other potential regulatory changes from the CFPB on the horizon include:
  • Know Before You Owe: Student Loans and Credit Cards;
  • Overdraft Protection; and
  • Servicemembers Civil Relief Act (SCRA).
Klewin also outlined options for credit unions in light of the National Credit Union Administration recent letters regarding open-end lending. He said most credit unions that are still using Multi-Featured Open-End Lending (MFOEL) will likely move to a combination of open-end and closed-end lending.  "There isn't just one cure-all or an easy solution that will still allow you to do MFOEL," he said. "But today, most MFOEL convenience can be replaced in a compliant manner with technology such as electronic disclosures and signatures."

A key to managing all of the complex regulatory changes will be finding competent compliance staff and giving them the tools and resources to upgrade their skills and influence. Although more than one department may be working on compliance, there needs to be one person who has the overall accountability for it at the credit union. This person needs to report at an appropriate level in the organization to influence and coordinate across departments.

Online Discovery is CUNA Mutual Group's Web-based equivalent of a face-to-face conference without the associated expenses or time away from the office. The free, online event attracted a national and international audience of more than 1,800 credit union and league staff. The conference aims to help credit unions solve problems, face challenges, and address opportunities all from the convenience of their computers.

New York CUs see growth through 2nd quarter

 Permanent link
ALBANY, N.Y. (10/11/12)--New York's credit unions continue to show across-the-board growth in all fundamental categories, including membership, lending, assets and savings, through the second quarter. In so doing, they have also exceeded the national averages in each of those areas, according to the Credit Union Association of New York (CUANY).

Membership growth at New York credit unions during the past year was 3.7%--1.5 times higher than the national average of 2.3% at the end of June. The National Credit Union Administration reported at the end of August that U.S. credit unions added 1.3 million members in just the first half of this year. That total is more than credit unions realized in full-year 2010 and 2011 combined, and is the second-highest increase in the past decade (News Now Sept. 6).

In the second quarter, New York credit unions added nearly 52,000 members.

New York credit unions are also continuing to meet the lending needs of their members, with loan originations increasing 24.9% from the first half of 2011 to $8.5 billion. This growth was primarily fueled by first-mortgage originations, which rose by $1.2 billion during the first half of 2011.

"In an industry where other financial institutions are adding and increasing banking fees, these findings show how well-positioned New York credit unions are to fill the needs of those seeking value," said William J. Mellin, CUANY president/CEO. "As economic challenges continue to present themselves to New Yorkers across the state, I expect credit unions' growth trend will continue."

Other highlights from the recent Credit Union Performance & Trends Report released by Callahan & Associates for the period include:

  • Business loans on the books of New York credit unions increased 12.9% from June 2011 levels, and member business loan originations totaled more than $1.3 billion in the first six months of 2012.
  • Both used- and new-auto loans increased annually at New York credit unions. New auto loans jumped 5.1%, or $129.4 million, while used-auto loan balances rose 4.9% annually, an increase of $161.9 million.
  • New York credit unions had annual outstanding loan growth of 8.2% in June, compared with national growth of 3.1% during the same time period.
  • Delinquency at New York credit unions decreased two basis points from June 2011, and the overall rate of 1.2% is in line with the national credit union average and below the local bank average, CUANY said. The net charge-off rate fell four basis points from June 2011. At 43 basis points, it remains well below the national credit union average of 76 basis points, CUANY added.
  • The average member relationship--the outstanding combined loan and savings balances per member, excluding member business loans--at New York credit unions also increased, up to $17,410 at the end of the second quarter.
  • Savings balances at New York credit unions increased by 9%, faster than the national average of 7%. Regular savings, money market accounts and checking accounts all grew at a double-digit annual pace.
  • Capital levels remain high at New York credit unions, at 11% of assets. This is a higher level than New York banks and thrifts, as well as credit unions and banks nationwide, CUANY said.

New webinar series discusses benefits of low-income designation

 Permanent link
MADISON, Wis. (10/11/12)--A three-part webinar series will be jointly held by the Credit Union National Association (CUNA) and the National Federation of Community Development Credit Unions to explain the benefits of a low-income designation (LID) and other resources and opportunities available to low income credit unions.

Many misconceptions still surround the LID designation. This webinar series (free to CUNA-affiliated credit unions and Federation members) is designed to inform credit unions about the benefits of these designations and how best to leverage them for their credit unions and members.

The low income designation recognizes the work credit unions do to provide access to affordable credit and financial services to people of modest means and provides regulatory powers that help increase institutional capacity to meet the needs of millions of consumers that currently don't have access to credit union services.

The topics of the three-part series include:

  • Growth Opportunities: Benefits of Low Income Designation--Oct. 16
  • What are the Benefits of the CDFI Designation--Nov. 20
  • Fuel for Growth: Understanding and Planning for Supplemental Capital--Dec. 18
All webinars begin at 1 p.m. (CT) and are scheduled for 90 minutes

The federation has played a leading role in advocating for special regulatory powers to strengthen the capacity of credit unions to serve low- and moderate-income consumers. The federation has also helped create public and private resources to expand credit union services in underserved communities, such as the CDFI Fund, which has provided more than $130 million in grant awards to qualifying credit unions; or the CDCI Program through which the US Treasury Department invested $70 million in secondary capital loans in 48 credit unions.

CMG Discovery Conference Building the CU of the future

 Permanent link
MADISON, Wis. (10/11/12)--To simply keep up, credit unions need a growing number of channels to connect with their members: branches, a call center, online banking and now mobile platforms, said John Lass, CUNA Mutual Group's senior vice president, strategy and business development. Lass presented the keynote address to attendees of the Online Discovery Conference on Tuesday and posed the idea that credit unions may be at a tipping point.

"The credit union system could be in the midst of a 'strategic inflection point' due to rapid changes in the competitive landscape, digital technology and customer channel preferences," Lass said.

A strategic inflection point is a major shift in an industry's competitive dynamic. Lass said it is a period "when we have to take a close look at the way we've been doing business for so many years."

Lass explained strategic inflection points in more detail using examples from the movie, music and publishing industries. For instance, after Apple launched iTunes in 2003, the music industry rapidly evolved into the digital age and, since then, more than 2,700 record stores have closed.

"iTunes is a vivid example of the music industry caught off guard by the digital movement and as a result, the CD and record industry has been hit with devastating losses," Lass said.

There were more examples of strategic inflection points given by Lass: Netflix vs. Blockbuster, Kindle vs. brick-and-mortar bookstores, and the rapid decline of Kodak due to the explosion of digital camera sales.

"The key point here is that digital, mobile technologies and channel shifts all played roles in these industry tipping points," said Lass. "The credit union system now faces the challenges, but also the opportunities of incorporating digital convenience into the cooperative model."

"Unlike the music industry, the cooperative model provides credit unions with powerful competitive advantages." Lass added. "There are some tremendously successful examples of credit unions embracing the 'do-it-yourself' banking, and it's paying off for their institutions and their members."

Lass is optimistic for the credit union system because it has one very unique quality that sets it apart from other financial institutions. "Our cooperative principals are the difference-maker for credit unions," Lass explained. "One member, one vote. Credit unions are the only financial institutions offering that kind of individual power and input.

"The challenge for our industry is to adapt to the new competitive dynamic without sacrificing our powerful core values and attributes," Lass concluded.

Online Discovery is CUNA Mutual Group's Web-based equivalent of a face-to-face conference without the associated expenses or time away from the office. The free, online event attracted a national and international audience of more than 1,800 credit union and league staff. The conference aims to help credit unions solve problems, face challenges, and address opportunities all from the convenience of their computer.

Americans want access to credit NFCC survey

 Permanent link
WASHINGTON (10/11/12)--The credit union approach to credit cards--lower rates with access to financial literacy--may be just what Americans need. According to a September poll hosted on the National Foundation for Credit Counseling (NFCC) website, 22% of more than 1,900 respondents indicated they could not make ends meet without access to credit. 

The inability to responsibly manage credit is one of the first financial danger signals. Among the survey's findings:

  • 33% of consumers do not pay all of their bills on time, the highest percentage since the question was first posed in 2008, up 5% over 2011; 
  • 39% of respondents indicated they carry debt over from month-to-month, a sure sign that a person is living beyond what his or her income can support; and
  • 16% have experienced an overdraft related to a checking account.
The NFCC suggests a three-step process for consumers who find themselves buried in credit card debit:  stop charging, increase income and decrease expenses. 

"Although the 22% of people indicating they could not make ends meet without credit is a minority among those polled, it is a significant minority," said Cunningham. "People are masters at deceiving themselves and justifying spending. Don't be one of them."

EasCorp partners with Trust for CUs for investment portfolios

 Permanent link
WASHINGTON (10/11/12)--EasCorp and the Trust for Credit Unions (TCU) announced a new relationship Tuesday that will allow EasCorp to provide three TCU Investment Portfolios to its 275 member credit unions to expand investment options for EasCorp members and to create greater economies of scale and value for the TCU portfolios.

EasCorp is a corporate credit union serving 275 credit unions throughout the U.S. from offices in Burlington and Woburn, Mass.

TCU is a family of institutional mutual funds offered exclusively to credit unions. 

The three TCU Portfolios offer options including a Money Market Portfolio for overnight or short-term investment needs, an Ultra-Short Duration Portfolio designed to target a duration of nine months, and a Short Duration Portfolio designed to target a duration of roughly two years. All three portfolios contain only obligations authorized under the Federal Credit Union Act.

Credit Union Financial Services Limited Partnership (CUFSLP) is a partnership composed of 36 leading credit unions with Callahan Financial Services, the fund's distributor, serving as the general partner. TCU has fulfilled a critical industry need since 1987, serving more than 500 credit union investors and managing billions of dollars throughout its history.

"The TCU Portfolios fill a critical need our members have for safety, liquidity, and yield, said EasCorp President/CEO Jane Melchionda. "What's more, they complement the liquidity and investment products that EasCorp provides presently in the form of on- and off-balance sheet activities, furthering our goal for a convenient, one-stop shopping experience."

"EasCorp is a well-respected organization that many credit unions rely upon for a wide-range of products and services," said Jon Jeffreys, executive vice president of Callahan CUFSLP, the funds' administrator. "We're looking forward to a strong partnership that will allow us to provide competitive investment options to even more credit unions."

Cheney tells international summit Collaboration is key for CUs

 Permanent link
QUEBEC CITY, Quebec, Canada (10/11/12)--Collaboration is a key element of the co-op model and essential to success as credit unions vie with for-profit financial institutions, Credit Union National Association (CUNA)  President/CEO Bill Cheney told 3,000 cooperative leaders attending the 2012 International Summit of Cooperatives in Quebec City, Canada.

CUNA President/CEO Bill Cheney (center) tells an international cooperative panel that colloboration is the key to success for credit unions. (CUNA Photo)

 

Cheney participated Wednesday in a roundtable discussion on the findings of a McKinsey & Company study on cooperatives released at the conference. The study compared organizational, structural and governance differences between cooperatives and for-profit,  shareholder-owned companies to gauge effectiveness. Results were based on extensive focus group research with employees of both types of organizations.

The McKinsey study found co-ops outperformed shareholder-owned companies in such areas as aligning employees toward a common purpose, but they faced challenges compared with for- profit companies in areas such as innovation and rapid decision making.

Cheney said an important way credit unions have addressed these challenges is by achieving innovation through collaboration, an embodiment of the cooperative principle of co-ops cooperating with one another.

Among the successful examples of collaboration he cited are the financial and insurance services available to credit unions through CUNA Mutual Group, the CO-OP Network's 28,000 surcharge free ATMs that make even small credit unions competitive and convenient, Credit Union Direct Corp., an auto lending credit union service organization--or CUSO-- and, on a smaller scale, the recently announced Open Technology Solutions collaboration among three credit unions that are saving about $2 million a year each by combining their data processing operations.

"A huge part of our agenda for the future is collaboration and innovation," Cheney told the gathering. He also noted how CUNA in this International Year of Cooperatives has been reaching out and working more closely with other co-op sectors, such as exchanging grassroots mobilization strategies with the National Rural Electric Cooperative Association.

Brian Branch, CEO of the World Council of Credit Unions (left) discusses how credit unions are responding to consumer demands for access to financial services through multiple channels. (CUNA Photo)


Others on the panel who shared their strategies for success were Sylvia Paraguya, CEO of the National Confederation of Cooperatives in the Phillippines, Scott Banda, CEO of Federated Co-operatives, Ltd., Canada, Colin Heavyside, chairman of Capricorn Society, Australia, and Arantza Laskurain, Secretary General, Mondragon Corporation, Spain. The panel's moderator was Liz Bailey, interim CEO of the National Cooperative Business Association.

The Quebec Summit drew more than 3,000 leaders from cooperative  organizations around the world to share expertise and discuss common strategic challenges and opportunities. CUNA is one of the partners supporting the event, which was organized by the International Cooperative Alliance, Desjardins and Saint Mary's University. Also representing CUNA at the conference are board chairman Mike Mercer, CEO of Georgia Credit Union Affiliates, and CUNA Communications Senior Vice President Mark Wolff, who serves on the NCBA board.

In a separate conference forum on financial services issues, Brian Branch, CEO of the World Council of Credit Unions discussed how credit unions are responding to consumer demands for access to financial services through multiple channels. Today, he said, credit unions need to offer access through branches, online, via mobile devices, and, increasingly, through the use of social media.  "It's about providing multiple points of services.  This is our challenge, but also our opportunity.  Credit unions must network as a system to pool their investments in this technology in order to compete, but that's the advantage we have as cooperatives."

Former Secretary of State Madeleine Albright was the conference keynote speaker.  She lauded cooperatives for their ability to help people build prosperity around the world, to create jobs, and for how they have given women in developing countries a voice as owners and strategists, not just as labor.

"The cooperative model contributes to social progress," she said, and in the U.S. she cited as a sign of success how so many consumers have moved their savings from banks to credit unions.

DONT UseCheney tells international summit Collaboration is key for CUs

 Permanent link
QUEBEC CITY, Quebec, Canada (10/11/12)--Collaboration is a key element of the co-op model and essential to success as credit unions vie with for-profit financial institutions, Credit Union National Association (CUNA)  President/CEO Bill Cheney told 1,500 cooperative leaders attending the 2012 International Summit of Cooperatives in Quebec City, Canada.

Cheney participated Wednesday in a roundtable discussion on the findings of a McKinsey & Company study on cooperatives released at the conference. The study compared organizational, structural and governance differences between cooperatives and for-profit,  shareholder-owned companies to gauge effectiveness. Results were based on extensive focus group research with employees of both types of organizations.

The McKinsey study found co-ops outperformed shareholder-owned companies in such areas as aligning employees toward a common purpose, but they faced challenges compared with for- profit companies in areas such as innovation and rapid decision making.

Cheney said an important way credit unions have addressed these challenges is by achieving innovation through collaboration, an embodiment of the cooperative principle of co-ops cooperating with one another.

Among the successful examples of collaboration he cited are the financial and insurance services available to credit unions through CUNA Mutual Group, the CO-OP Network's 28,000 surcharge free ATMs that make even small credit unions competitive and convenient, Credit Union Direct Corp.'s indirect lending credit union service organization--or CUSO-- and, on a smaller scale, the recently announced Open Technology Solutions collaboration among three credit unions that are saving about $2 million a year each by combining their data processing operations.

"A huge part of our agenda for the future is collaboration and innovation," Cheney told the gathering. He also noted how CUNA in this International Year of Cooperatives has been reaching out and working more closely with other co-op sectors, such as exchanging grassroots mobilization strategies with the National Rural Electric Cooperative Association.

Others on the panel who shared their strategies for success were Sylvia Paraguya, CEO of the National Confederation of Cooperatives in the Phillippines, Scott Banda, CEO of Federated Co-operatives, Ltd., Canada, Colin Heavyside, chairman of Capricorn Society, Australia, and Arantza Laskurain, Secretary General, Mondragon Corporation, Spain. The panel's moderator was Liz Bailey, interim CEO of the National Cooperative Business Association.

The Quebec Summit drew more than 1,500 leaders from cooperative  organizations around the world to share expertise and discuss common strategic challenges and opportunities. CUNA is one of the partners supporting the event, which was organized by the International Cooperative Alliance, the Desjardins Group and Saint Mary's University. Also representing CUNA at the conference are board chairman Mike Mercer, CEO of Georgia Credit Union Affiliates, and CUNA Communications Senior Vice President Mark Wolff, who serves on the NCBA board.

In a separate conference forum on financial services issues, Brian Branch, CEO of the World Council of Credit Unions discussed how credit unions are responding to consumer demands for access to financial services through multiple channels. Today, he said, credit unions need to offer access through branches, online, via mobile devices, and, increasingly, through the use of social media.  "It's about providing multiple points of services.  This is our challenge, but also our opportunity.  Credit unions must network as a system to pool their investments in this technology in order to compete, but that's the advantage we have as cooperatives."

Former Secretary of State Madeleine Albright was the conference keynote speaker.  She lauded cooperatives for their ability to help people build prosperity around the world, to create jobs, and for how they have given women in developing countries a voice as owners and strategists, not just as labor. 

"The cooperative model contributes to social progress," she said, and in the U.S. she cited as a sign of success how so many consumers have moved their savings from banks to credit unions.

CUNA releases CEOexecutive compensation survey

 Permanent link
MADISON, Wis. (10/11/12)--The Credit Union National Association (CUNA) Wednesday announced the release of a new tool in the comprehensive planning package available to CUNA member credit unions, the "2012-2013 CEO and Senior Executive Total Compensation Survey Reports."

"Competition for high-performing executives is intense, and regulators are calling for additional compensation disclosures," says Beth Soltis, senior research analyst for CUNA. "It's more important than ever for credit unions to make sure their executive compensation plans are competitive and in line with industry standards."

CUNA releases the compensation survey results annually.  The report is based on extensive research conducted by CUNA and these reports feature a comprehensive analysis of executive compensation information for credit unions $100 million or greater in assets.

Use the resource link for more information.

Self-Help CU to develop downtown Durham parcels

 Permanent link
DURHAM, N.C. (10/12/12)--Self-Help CU, Durham, N.C., has acquired several contiguous parcels of land in downtown Durham, and is in the early stages of planning a new development to help revitalize the area.

"Self-Help has been involved in the revitalization of Southwest Central Durham for almost a decade, in partnership with the Quality of Life (QOL) initiative, Habitat, (Durham Community Land Trustees) and others," said Tucker Bartlett, Self Help CU vice president. "With this next step we hope to help catalyze economic development in the area and thereby help strengthen the surrounding neighborhood by expanding economic opportunities."

Together the parcels represent about 2.3 acres.

Self-Help has hired two Durham-based firms, DTW Architects and Planners and landscape architects Coulter Jewell Thames, P.A., to begin site planning and to determine what type of development would make best use of the site.  At the same time, Self-Help has been working with the neighborhood-based QOL and other neighbors to get feedback from residents and business owners on the street.

"This is the first step of what will be a multi-year process," said Paul Brown, project manager for Self-Help, a $575 million asset community development credit union. "Redeveloping an urban site such as this involves a host of complex issues That said, we feel that we can manage these issues going forward, and are gratified by the response to date from QOL and the neighbors. We're excited about where we are, but we have a long way to go."

Self-Help is still in the planning stages, but is considering a mixed-use development, Brown said. 

"Our experience is in redeveloping underutilized urban buildings to create more activity in downtowns and neighborhoods," Brown said. "We will likely design a mix of uses, including office and retail, but it is too early to say what the project will look like. What motivates us to do this kind of work is to help strengthen the neighborhood by increasing economic opportunities in a manner that complements existing buildings on the street."

Brown said that the site-planning process and engagement with community stakeholders would continue through 2012 and 2013. Self-Help was beginning preliminary discussions with possible tenants, but did not expect to announce any agreements until 2013.

CUs should grow lending through members community culture

 Permanent link
MADISON, Wis. (10/10/12)--When it comes to lending, credit union members are seeking three things: guidance, solutions, and credit with reasonable terms, attendees of CUNA Mutual Group's third annual Online Discovery Conference were told Tuesday.

Patrick McElhenie, CUNA Mutual sales planner, discussed challenges the current economy presents, what's in store for credit unions, and lending opportunities credit unions may be missing during his presentation, "Translating Lending Trends into Strategies to Fuel Growth."

"We've seen major setbacks in household net worth," McElhenie said. "Some recovery has occurred, but households don't have the resources they once did, which we see in members' spending and borrowing habits."

Credit union members are more cautious with lending today because of the current economic environment and the financial obligations they already hold, McElhenie said.

"There's a lack of household demand for loans because people are paying down their debt and spending less," McElhenie said. "But, keep in mind, people are also looking at lending differently, too. People don't 'go and get a loan' today, they see financing as a product feature, making point-of-purchase financing boom."

Despite economic changes and member habits, the key is to focus lending efforts on existing members first, McElhenie told attendees.

"Let's not forget, our members are our owners, but more importantly, they will do the advertising for us based on their satisfaction," McElhenie said. "Quite often credit unions are all too timid in sharing what they can do for their members," he added.

Many don't know where to begin, though. A good place to start is by looking for loans to rewrite for your members, McElhenie suggested. "Help those who are struggling with onerous terms from other lenders," he added. Then, begin looking to young borrowers to develop the next generation to replace those baby boomers, who are no longer borrowing.

McElhenie reminded credit union attendees that not everyone is in financial trouble, or about to lose their job, so it's in the credit union's best interest to help its members take advantage of some great bargains in the home and auto market, especially young members just beginning to build a life and home. Begin a first-time borrower program, McElhenie suggested.

To grow a lending business, credit unions should consider adopting a "we are one" attitude for auto loans by issuing the same rates and terms for direct and indirect loans, McElhenie said. "Most members will gravitate to a point-of-purchase transaction, but, remember, the goal is just to get the member's loan," he added.

"And don't forget about your community. The community is your yard, don't neglect it," McElhenie said.

Reward-card programs that give back to the community have had large success, too. One such example is the "HutchCard," a Visa card issued through Hutchinson (Kan.) CU. The credit union raised more than $200,000 for the Hutchinson Zoo and city parks during the 10 years of its existence, McElhenie explained.

"You must create your own recovery," McElhenie explained. "The economy will continue to move slowly forward, interest rates will remain low and consumers cautious, but you have the tools to help your credit union grow. Focus on your members and community, the rest will come."

Online Discovery is CUNA Mutual Group's Web-based equivalent of a face-to-face conference without the associated expenses or time away from the office. The free, online event attracted a national and international audience of more than 1,800 credit union and league staff. The conference aims to help credit unions solve problems, face challenges, and address opportunities all from the convenience of their computer.

Shreveport FCU collaborates on new financial empowerment center

 Permanent link
SHREVEPORT, La. (10/10/12)--Shreveport (La.) FCU is collaborating with the City of Shreveport, La., Department of Community Development on a new "financial empowerment center."

The new Jewella Whitehouse Financial and Business Empowerment Center (FEC) officially opened Sept. 27, with a grand opening and ribbon cutting ceremony in Shreveport. The center also will house Shreveport FCU's newest branch.

The FEC, which is an inner city initiative between the Shreveport Department of Community Development and Shreveport FCU, is based on the successful model originated by the City of New York's Financial Empowerment Program.

"Never underestimate the power of innovation and collaboration," said Helen Godfrey Smith, president/CEO of $88 million-asset Shreveport FCU. The inner city strategic initiative seeks to re-affirm government as a critical partner in community problem solving, she added.

The Jewella Whitehouse Financial and Business Empowerment Center will serve as a financial resource center for individuals, families and small-business owners throughout Shreveport. The FEC's mission and vision is to empower residents by offering a variety of financial education resources and tools that will place each resident on a path toward positive financial health and prosperity.

The center will focus on assisting small business owners with creating a business plan, initiating financial asset planning and applying for and securing a micro-business loan. In addition to workshops, participants will have access to financial counseling by a certified financial professional.

"We think this program will be a unique way to inspire innovation and creativity, encourage entrepreneurship and community initiatives, and create career opportunities," said Smith. "It's a way for this credit union to provide solid support for small-business owners and consumers to gain the financial knowledge to both help themselves, as well as give them tools to help others."

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' member business lending (MBL) cap to 27.5% of assets from 12.25% so that more loans could be made to small businesses, considered a staple in the economy. CUNA and credit unions say that increasing credit unions' MBL cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

Demolition of AVCUs headquarters under way

 Permanent link
SOUTH BURLINGTON , Vt. (10/10/12)--When the Association of Vermont Credit Unions (AVCU) moved to its new Colchester office in June, it realized demolition of its old office wasn't far away. This week, a landmark in Vermont's credit union history is disappearing, as the South Burlington home for 30 years begins undergoing demolition.

Association of Vermont Credit Union's Vice President Bryan Kent (left) speaks with Lance Triebel of Stewart Construction during the demolition process of the association's old headquarters in South Burlington (Photo provided by the Association of Vermont Credit Unions)
New England FCU (NEFCU) base in Williston, Vt., the property's current owner, will soon start constructing a new branch to serve members better than the 1950's era building that housed AVCU allowed (Newslines Express Oct. 5).

Following the recommendation of a board-appointed search committee, the building was purchased in 1982 by what at the time was known as the Vermont Credit Union League. For many years, the location was known as the Vermont Credit Union Center and, in addition to staff offices, housed one of the nation's first credit union shared branch operations, as well as a jointly owned data processing service known as Dataline of Vermont.

Throughout the 17-year period of AVCU ownership, several credit unions also rented space within the center. In 1999, following the migration of the shared branch operation into an ATM/debit card program, and the departure of both the data processing operation and credit union tenants, the association sold the building to NEFCU. Until June, AVCU leased a large portion of the building for its office operations.

"We're extremely proud of the association's new Colchester quarters, yet can't help feeling just a bit melancholy seeing our home for almost half of the association's existence…and site of so many milestones in Vermont credit union history…undergo demolition,"  said AVCU President Joe Bergeron.

AVCU plans to use two mementos from the building, the original cast metal "1000" street numbers from the 1950's construction and an intact brick from the demolition, along with a collection of photos taken through the years, to create a visual archive of the building's significance in Vermont credit union history.

In its 60-year history, the building underwent several renovations but has been out of compliance with current building codes for some time, making further major renovations impractical. To clear the way for the demolition and construction, the association moved to a new office, and recently, NEFCU opened a temporary branch less than a mile away.

Online Discovery Conference Capturing the potential social media

 Permanent link
MADISON, Wis. (10/10/12)--Credit unions aren't close to tapping the power of social media in telling members--and potential members—about what credit unions have to offer, participants of CUNA Mutual's Online Discovery were told Tuesday.

Michael Ogden, left, social media manager, CUNA Mutual Group, and Robin Marohn, vice president, marketing and business development, Heartland CU, Madison, Wis., discuss how credit unions can identify their audience, engage them and develop a relationship through social media during their joint session at the Online Discovery Conference Tuesday. (Photo provided by CUNA Mutual Group)
"Credit unions are really good at talking to themselves on social media channels, but we are missing opportunities to reach current and would-be members to tell our story," Michael Ogden, social media manager, CUNA Mutual Group, told participants of the third annual Online Discovery Conference.

Ogden joined Robin Marohn, vice president, marketing and business development, Heartland CU, Madison, Wis., in discussing how credit unions can identify their audience, engage them and develop a relationship through social media.

"It's time to flip the switch on being bold in communicating the great things that are going on with credit unions and what we can do to help consumers," Ogden said. "Social media is a great complement to other marketing plans and it's a communications channel you can't ignore as part of your marketing strategy."

Finding the right platform for a credit union to reach its audience is key, Ogden said. "It's not a one-size-fits-all," he added. "Is it Twitter, Facebook or Pinterest? There are audience-finding tools available that can help you find the people you want to reach." 

Consumers do not watch TV as much as they have in the past, Ogden said. Instead, they are online on their smartphones, tablets and laptops. "Businesses, including credit unions, are all looking for genuine connections and social media can give them that," Ogden said. "It's smart for credit unions to find their audience online and engage them in a real conversation."

Marohn called social media one of the most important developments in his 23 year marketing career. Heartland CU, which has 18,000 members in Wisconsin, Illinois and Iowa, dedicates 80% of its marketing budget to social media.

"Traditional media advertising can't touch what and who we are reaching through our Facebook presence," Marohn said. "We've all but abandoned traditional marketing, including the expensive ads in local publications. Heartland's ad dollars now go toward video production for their You Tube channel and Facebook and Twitter pages.

"Our focus is to go local and our success rate is outstanding. Our social media presence has increased traffic to our web site more than anytime before," Marohn said. "Content, of course, is critical. It breeds engagement. Our challenge is keeping that engagement content coming."

Online Discovery is CUNA Mutual Group's Web-based equivalent of a face-to-face conference without the associated expenses or time away from the office. The free, online event attracted a national and international audience of more than 1800 credit union and league staff. The conference aims to help credit unions solve problems, face challenges and address opportunities all from the convenience of their computer.

Mazuma partners with K.C. urban league

 Permanent link
KANSAS CITY, Mo. (10/10/12)--Mazuma CU in Kansas City, Mo., announced it has formed a partnership with the Urban League of Greater Kansas City. Mazuma included a $10,000 donation presented to the Urban League on Sept. 25.

Brandon Michaels (from left), CEO of Mazuma CU in Kansas City, presents a check to Gwen Grant, president/CEO of the Urban League of Greater Kansas City, and Lynn Matthews, Mazuma Supervisory Committee member and Urban League volunteer. Mazuma's partnership with the Urban League of Greater Kansas City will support local initiatives in financial education and literacy, plus improved access to business development services for minority-owned businesses.  (Photo provided by Mazuma CU)
The $475 million-asset credit union's donation will support the Urban League's destination goal of wealth creation, which includes developing enhanced financial education and literacy for youth and adults residing within Kansas City's urban core, and improved access to business development services for minority-owned businesses.    

Organized in 1919, the Urban League of Greater Kansas City is a community-based, not-for-profit organization focused on achieving equality and promoting socioeconomic opportunity to improve the quality of life of African-Americans and others.

The $10,000 investment from Mazuma CU will further its efforts to ensure that disadvantaged persons secure economic self-reliance, parity, power and civil rights, said Gwen Grant, president/CEO of the Urban League of Greater Kansas City. "Thanks to Mazuma, more urban youth will learn money management skills, and minority business owners will receive capacity building support to increase their ability to thrive in the marketplace," she added.

The financial education and literacy initiative will include a "Money Savvy Kids" saving program for children ages five to 12 years old. Participants will learn the basics of money management--giving, spending, saving and investing. After saving $25, the child will receive a matching $25 from the Urban League of Greater Kansas City to open a savings account at Mazuma CU. 

Also, the Mazuma donation will support the Urban League's Entrepreneurship Center initiative, which provides coaching, technical support, business plan development, financial management/analysis, legal services, marketing/branding, and other business development services for minority businesses. The primary purpose of the Entrepreneurship Center is to create jobs by increasing the number of black-owned businesses in Greater Kansas City. 

A key ingredient to success for minority businesses is access to capital, said Mazuma. The Urban League will work with Mazuma to assist participating entrepreneurs with small business loan applications.

"The Urban League of Greater Kansas City is a remarkable organization that builds communities and uplifts people by working to ensure equality in all phases of life, from financial and general education to social programs, work programs, and community outreach," explained Mazuma president/CEO Brandon Michaels. "Their work is vital to a vibrant and prosperous Kansas City, and Mazuma takes great pride in supporting these efforts. This valued partnership is an honor for us and a natural extension of Mazuma's 'people helping people' philosophy."

Montana CUs get grant to provide free tax help

 Permanent link
HELENA (10/12/12)--Twenty-nine credit unions are among 51 Montana locations that will continue to offer free tax help at Volunteer Income Tax Assistance (VITA) sites as the result of an $80,000 grant from the Internal Revenue Service.

Click to view larger image An $80,000 grant from the Internal Revenue Service will allow 29 Montana credit unions to continue offering Volunteer Income Tax Assistance (VITA). Jami Kirksey, right, Montana Credit Unions for Community Development Program Support Coordinator, and VITA volunteer, finishes up with a taxpayer during the opening day of tax season at the Aldersgate VITA site in Butte. (Photo provided by Montana Credit Union Network)
The average taxpayer in Montana spends $207 for tax preparation, according to the National Society of Accountants. The grant helps the credit unions and other grant winners to provide this service to families and individuals for free if they earn less than $50,000 and have fairly straight-forward returns.

"This not only validates what we are doing with the program but it also provides support for free tax assistance across the state, especially to those rural communities that wouldn't otherwise have the opportunity for these services," Rachael Milne, program manager at Montana Credit Unions for Community Development (MCUCD).

MCUCD leads a statewide partnership of VITA providers working together to standardize practices and attract funding. Montana VITA partners include United Way of Yellowstone County, HRDC-Billings, CommunityAction Partnership of Northwest Montana, the HRDC Bozeman, and Havre's Opportunity Link, Inc.

Local volunteers are the backbone of all 51 VITA sites, Milne said. Last year, nearly 176 volunteers assisted with 4,893 tax preparations.

CU Direct acquires Lifestyle Lending

 Permanent link
ONTARIO, Calif. (10/10/12)--CU Direct Corporation, a provider of lending solutions to credit unions through its CUDL, Lending Insights, Lending 360, CUDL Retail and Vero brands, has acquired Lifestyle Lending Solutions.

Established in 2007, Salt Lake City-based Lifestyle Lending Solutions is a retail and medical lending solutions provider focused on the niche market of lifestyle lending, for such things as plastic surgery and cosmetic dentistry, catering specifically to the credit union industry. The company has a network of more than 750 merchants in 16 states.  CU Direct and its affiliated brands provide lending solutions to 1,020 credit unions nationwide.

Kirk Harris, founder of Lifestyle Lending, has joined CU Direct as product director of retail lending and will take on leadership of the Lifestyle Lending products and the CUDL Retail products.

NEW CUNA open Columbus Day no News Now

 Permanent link
WASHINGTON and MADISON, Wis. (10/5/12)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association (CUNA) will be open Monday, which is Columbus Day, a federal holiday.

News Now will not publish a Monday edition, but will resume regular publication Tuesday.

NEW Vermont regulator CU reach agreement on CUs use of bank

 Permanent link
MONTPELIER, Vt. (10/8/12)--The Vermont State Employees CU (VSECU) and the State Department of Financial Regulation (DFR) announced Friday they have reached an agreement on when VSECU and other state-chartered credit unions can use the words "bank," "banking" and similar words in marketing their services.

The issue drew national attention this summer after the credit union received a notice of DFR's intent to issue a cease-and-desist order regarding VSECU's marketing and the credit union requested an administrative hearing.

Vermont state statute prohibits credit unions from using such words unless the DFR Commissioner finds the use would not mislead or confuse consumers as to the nature of the institution, said VSECU and DFR in a joint press release.

Under the agreement, the credit union will not describe itself as a bank but may use the word "banking" and similar words when advertising its services as long as it discloses that it is a credit union. The disclosure that VSECU is a credit union must be "clear and conspicuous so that reasonable consumers can read, see or hear and understand the information."

The two parties agreed to settle and withdraw any and all claims and actions, terminating the hearing process that had been underway.

Credit Union National Association General Counsel Eric Richard said that "this settlement should allow Vermont credit unions plenty of flexibility to market  their services to people who might otherwise be thinking of patronizing a bank.  And it is always good to avoid the costs of litigation."

They agreed that VSECU "will not describe itself as a 'banking cooperative,' 'banking co-op,' 'bank,' 'banking association,' 'trust company,' or other similar sounding word or name in its advertising or marketing,'" and would discontinue using these phrases in its materials beginning Nov. 15. DFR would not take regulatory action on VSECU's use of such wording in referring to itself.

The agreement specified that "VSECU is not prohibited from using the word 'bank' or any derivative of the word 'bank' to describe its services or to differentiate itself from a bank, e.g. by describing itself as a 'banking alternative' or as an entity that is 'redefining banking,'" according to the agreement document.

The agreement also defined services and advertisements that applied and noted that items used solely to promote VSECU's brand (such as gifts, premiums and the display of logos and slogans) are excluded.

The agreement also clarified that VSECU can use "bank" or "banking" or derivative terms or phrases in the text of hyperlinks or search engine designated links, and that in these situations it would not be required to include the term "credit union" in the link text.  VSECU will disclose on the landing page of those links that it is a credit union.

"I want to thank the VSECU for its help in finding a way to reasonably apply a decades-old statute in a rapidly changing environment for financial services," said DFR Commissioner Steve Kimbell.

"This is not a matter of who won or lost a dispute," said Stephen D. Post, VSECU CEO, "but an example of the state's regulators and industry working together to solve a problem."

The credit union's request for a hearing "teed up a matter that's been in discussion for a number of years," said Kimbell. "It gave us a context in which to reach agreement on how to apply the statute."

Post noted the credit union is "pleased to go forward offering its services to all who work or live in Vermont knowing that it and DFR are on the same page."

Association of Vermont Credit Unions President Joseph G. Bergeron said, "I think anyone would be very hard pressed to find any consumers confused, whether by VSECU's or any other Vermont credit union's advertising, such that they thought they were dealing with a bank of any sort.  Although it's unfortunate that such a disagreement over simple language rose to this level, I commend both VSECU and the department for arriving at a mutually acceptable compromise that applies to all state charters and allows them to say what their members understand…do your 'banking' with a credit union," Bergeron added.

DFR has posted a bulletin or an "interpretation of the wording of the law" on its website as guidance to all state-chartered credit unions so that a standard can be followed.

E-banking mobile tech patent suit part of a trend

 Permanent link
LONGVIEW, Texas (10/9/12)--The  mobile race is on, not only in credit unions scrambling to offer the latest banking via smartphones and tablets, but also at companies who create the technical processes that financial institutions use to accept transactions on these devices. As a result, patent infringement lawsuits are on a roll, and some have targeted credit unions.

The latest was filed Wednesday in the U.S. District Court for the Eastern District of Texas, Marshall Division, by Wilmington, Del.-based Sonic Industry LLC against Richardson, Texas-based Texans CU, which is under conservatorship by the National Credit Union Administration.  The suit is over the credit union's process for e-banking and its mobile alerts. Sonic seeks a permanent injunction barring the credit union from using technology that provides online banking and mobile alerts.

The suit is one of at least seven suits Sonic has filed in the past three months and more than a dozen in the past year against financial institutions' mobile processes. Four of them, including the credit union case, were filed in various states on Wednesday.  Since mid-June, it has sued Comerica Inc., Bancorp, Viewpoint Bank, Amegy Bank, American Bank, and Compass Bank. Viewpoint Bank is a former credit union--Community CU in Plano, Texas, which switched to a bank charter in 2006 (News Now Nov. 28, 2005).

Sonic, in the court documents, alleges it applied for a patent for a "remote limit-setting information distribution system" on Oct. 2, 1996, and received the patent on Sept. 21, 1999. The suits seek a permanent injunction to stop using the technology and seeks triple damages in the credit union case, according to the complaint filed.

The method allegedly patented includes a remote processing device for being connected to a host computer by a communications channel and the steps for selecting parameters and transferring them or communicating them to the proper computers and devices.

In other recent patent litigation in the mobile device market last week, 10 companies agreed to pool their patents associated with cellular technology long-term evolution (LTE) so they can be aggregated and licensed together rather than have the companies individually enforce their patents, announced Via Licensing, a spinoff of Dolby Laboratories (The Wall Street Journal blog Oct. 3).

Among the companies are AT&T, Hewlett-Packard, Clearwire, and DTVG Licensing as well as a number of companies in Europe, Japan, South Korea and China.  Not included are key players involved in high-profile lawsuits--Apple, Samsung, Qualcomm, Google and Google's new Motorola unit.

Also last week Google's Motorola Mobility unit dropped its patent-infringement suit against Apple over seven patents related to the iPad, IPhone and Mac computers,  but reserved the right to refile (E-Week.com Oct. 3).

And last month, San Diego, Calif.-based Mitek Systems, whose remote image capture software is used by Fiserv and some credit unions, filed a patent infringement lawsuit against Top Image Systems, an Israel-based company, over five patents that cover the processes for remotely depositing a check, processing the image and creating a Check21-compliant image, no matter what device is used to capture the image (tmcnet.com Sept. 28).

In July, Secure Axcess LLC settled its patent-infringement case in Plano, Texas, with six financial institutions, including a credit union. That patent related to identity and access management technology used for security images for authentication, widely used by financial institutions to protect online consumers from phishing and other attempts at fraud (News Now July 13).

And in April, Catalyst Corporate FCU filed a preemptive patent lawsuit against IP Navigation Group, with the corporate seeking a declaratory judgment that it had not infringed on any processing patents. Catalyst filed the preemptive suit after it received a letter and a "proposal to negotiate patent license" from a company representing a "John Doe" patent holder threatening a lawsuit if it did not sign a confidentiality agreement (News Now April 23).

Vermont DFR CU reach agreement on use of bank

 Permanent link
MONTPELIER, Vt. (10/9/12)--The Vermont State Employees CU (VSECU) and the State Department of Financial Regulation (DFR) announced Friday they have reached an agreement on when VSECU and other state-chartered credit unions can use the words "bank," "banking" and similar words in marketing their services.

The issue drew national attention this summer after the credit union received a notice of DFR's intent to issue a cease-and-desist order regarding VSECU's marketing and the credit union requested an administrative hearing.

Vermont state statute prohibits credit unions from using such words unless the DFR Commissioner finds the use would not mislead or confuse consumers as to the nature of the institution, said VSECU and DFR in a joint press release.

Under the agreement, the credit union will not describe itself as a bank but may use the word "banking" and similar words when advertising its services as long as it discloses that it is a credit union. The disclosure that VSECU is a credit union must be "clear and conspicuous so that reasonable consumers can read, see or hear and understand the information."

The two parties agreed to settle and withdraw any and all claims and actions, terminating the hearing process that had been underway.

Credit Union National Association General Counsel Eric Richard said that "this settlement should allow Vermont credit unions plenty of flexibility to market their services to people who might otherwise be thinking of patronizing a bank. And it is always good to avoid the costs of litigation."

They agreed that VSECU "will not describe itself as a 'banking cooperative,' 'banking co-op,' 'bank,' 'banking association,' 'trust company,' or other similar sounding word or name in its advertising or marketing,'" and would discontinue using these phrases in its materials beginning Nov. 15. DFR would not take regulatory action on VSECU's use of such wording in referring to itself.

The agreement specified that "VSECU is not prohibited from using the word 'bank' or any derivative of the word 'bank' to describe its services or to differentiate itself from a bank, e.g. by describing itself as a 'banking alternative' or as an entity that is 'redefining banking,'" according to the agreement document.

The agreement also defined services and advertisements that applied and noted that items used solely to promote VSECU's brand (such as gifts, premiums and the display of logos and slogans) are excluded.

The agreement also clarified that VSECU can use "bank" or "banking" or derivative terms or phrases in the text of hyperlinks or search engine designated links, and that in these situations it would not be required to include the term "credit union" in the link text.  VSECU will disclose on the landing page of those links that it is a credit union.

"I want to thank the VSECU for its help in finding a way to reasonably apply a decades-old statute in a rapidly changing environment for financial services," said DFR Commissioner Steve Kimbell.

"This is not a matter of who won or lost a dispute," said Stephen D. Post, VSECU CEO, "but an example of the state's regulators and industry working together to solve a problem."

The credit union's request for a hearing "teed up a matter that's been in discussion for a number of years," said Kimbell. "It gave us a context in which to reach agreement on how to apply the statute."

Post noted the credit union is "pleased to go forward offering its services to all who work or live in Vermont knowing that it and DFR are on the same page."

Association of Vermont Credit Unions President Joseph G. Bergeron said, "I think anyone would be very hard pressed to find any consumers confused, whether by VSECU's or any other Vermont credit union's advertising, such that they thought they were dealing with a bank of any sort.  Although it's unfortunate that such a disagreement over simple language rose to this level, I commend both VSECU and the department for arriving at a mutually acceptable compromise that applies to all state charters and allows them to say what their members understand…do your 'banking' with a credit union," Bergeron added.

DFR has posted a bulletin or an "interpretation of the wording of the law" on its website as guidance to all state-chartered credit unions so that a standard can be followed.

CU System briefs (10/06/2012)

 Permanent link
  • DALLAS (10/9/12)--About 35 Dallas CU members, non-members and staff recently conducted  a "Cash Mob" at Scardello Artisan Cheese in Uptown Dallas, according to the Texas Credit Union League (LoneStar Leaguer Oct. 50). "We wanted to show the community that Dallas CU is a proud supporter of local business and we are now giving owners and entrepreneurs the tools to help grow their business while keeping costs down," said Dallas CU President/CEO Dee Pennington.  In August, the $45 million asset credit union launched a line of business products that includes business savings, money market and low-cost checking accounts.  A cash mob encourages people to visit local businesses and commit to spending about $20, en masse, to give a business a bit of economic stimulus. Dallas CU offered $20 cash to spend in Scardello to the first 25 people who showed up, whether they were members or not. It also gave away promotional items. At the end of the event, the store put up a decal near the front door that said, "The Cash Mob was here," with the credit union's name and website. (Photo provided by the Texas Credit Union League) …
  • PORTLAND, Maine (10/9/12)--Young & Free Maine is looking for Maine credit union employees to serve on its Young & Free Gen Y Advisory Board, says the Maine Credit Union League (Weekly Update Oct. 5). It is looking for eight to 12 employees who are 18-to-25 years old to share the perspective of young adults on how Young & Free can better serve members. Advisory board members take part in one-hour quarterly conference calls with the Young & Free Maine Team.  One advisory board member who demonstrates the Young & Free spirit through participating in the group will be awarded a scholarship toward attending the 2013 Young & Free Meet-up or another Maine credit union program …
  • ENDWELL, N.Y. (10/9/12)--John "Jack" Houseknecht Jr., senior vice president and chief operating officer of Endicott, N.Y.-based Visions FCU, died Oct. 2 (The Daily Exchange Oct. 5). Houseknecht previously was employed as senior vice president of lending at Andrews FCU in Suitland, Md., and served as CEO of SSA FCU, Baltimore, before moving to the $3.1 billion asset Visions FCU.  In 2002, he was named Professional of the Year by the Maryland Credit Union League (now Maryland and District of Columbia Credit Union Association). He also was a candidate for the National Credit Union Administration board …

Magazine honors Wis. CUs for community involvement

 Permanent link
PEWAUKEE, Wis. (10/9/12)--Wisconsin's 194 credit unions are being honored with a Corporate Citizenship Award--recognizing community involvement--from Corporate Report Wisconsin magazine.

The accolade comes amid celebration of the International Year of Cooperatives, Co-op Month and the approach of next week's International Credit Union Day on Oct. 18, said the Wisconsin Credit Union League.

Credit unions were honored, in part, for becoming a "driving force" in the Stock the Shelves food drive, which supports 108 food pantries across the state, and for seeking a change in state law that doubles their ability to provide financial support to thousands of community organizations and programs, the league said.

"In my first term, my experience has consistently involved industry representatives lobbying on behalf of changes that increase their bottom line," said state Rep. Dale Kooyenga (R-14), lead author of the legislation that increased credit unions' financial giving capacity. "It was refreshing to have the industry representatives from Wisconsin's credit unions spending their time on changes to statutes that increase their ability to serve their community."

Credit unions also were honored for statewide financial literacy efforts that include student-run branches that helped students amass $3 million; aid to improve teachers' personal finance lessons; 30,000 hours of free financial counseling; their use of MoneyMission, the online game developed with the Credit Union National Association that helps students in 48 states learn responsible money management; and an investment education program, which is being replicated in 10 states and which delivered 60,000 hours of online training to 4,476 employees from credit unions and Wisconsin firms.

"Because credit unions have no stockholders--just members who use their locally owned financial co-op to borrow and save at better rates--they are beholden only to their members and communities," said league President/CEO Brett Thompson. "While consumers' trust in the overall financial industry has plummeted, credit unions have increasingly won consumer trust for the value they offer every day.

"By owning their financial institution, 2.3 million Wisconsin citizens not only reduce their debt, build their creditworthiness and grow their wealth, but also fortify their communities through financial education, support of local organizations and countless volunteer efforts," Thompson added.

Cybercriminals planning large-scale banking attack

 Permanent link
BEDFORD, Mass. (10/9/12)--International cyber crooks are working together and planning a major malware attack to steal money from online accounts of consumers at 30 or more major U.S. banks as part of a large-scale orchestrated crimewave campaign, warned security firm RSA Thursday.

"Planned for this fall, the blitzkrieg-like series of Trojan attacks is set to be carried out by approximately 100 botmasters. RSA believes this is the making of the most substantial organized banking-Trojan operation seen to date," said Mor Ahuvia, cybercrime communications specialist for the Bedford, Mass. security firm, in a blog on its website.

Although RSA also cautioned that cyber criminals are noted for changing tactics or not following through with specific plans, it mentioned an unusually large number of underground chatter about the scheme.

Although credit unions are not specifically mentioned in the blog, Ahuvia noted that cyber criminals will try to go for banks that have been previously hit by security problems. Since credit unions are among those targeted in general by cyberthieves, they will want to be on the alert.

RSA recommends financial institutions review authentification procedures relevant to both online wire transfers and transfers performed over the telephone banking channel.

The security firm said the mega heist may occur in "a month or two" at the targeted banks.

RSA's information suggests the gang will unleash a little known "Gozi Prinimalka" Trojan program that will infiltrate computers belonging to thousands of U.S. banking customers and use the hijacked machines to initiate fraudulent wire transfers from their accounts, said RSA on its website.

Derived from the Russian word meaning "to receive" and alluding to a Trojan drop point, the "prinimalka" appears as a folder name in every URL path given by the gang over the years to its crimeware servers.  RSA said it has picked up "underground chatter" that the gang will use the Trojan for fraudulent wire transfers via "Man-in-The-Middle" (MiTM) manual session-hijacking scenarios.

The gang is currently recruiting apprentice botmasters to act as "mules." A new virtual-machine-synching module will be installed on the botmasters' machines and reportedly duplicate the victim's PC settings, including the victim's time zone, screen resolution, cookies, browser type and version, and software product IDs. The victims' accounts will be access via a proxy connection installed on the infected PC, enabling the cloned virtual system to take on the genuine Internet Provider address when accessing the financial institution's website.

Another feature of the proposed attack: the gang will use phone-flooding software to prevent victim account holders from receiving a verification or confirmation call or text message from their financial institution.

Underground chatter indicates that once botmasters are trained, the gang will set a pre-scheduled date to launch the spree and try to cash out as many accounts as possible.

CU helps N.J. bizzes bounce back from hurricane

 Permanent link
BASKING RIDGE, N.J. (10/9/12)--Affinity FCU is supporting a number of local Denville, N.J., businesses that are just now reopening or still need support to get their business back on track after suffering damages from Hurricane Irene, according to the New Jersey Credit Union League.

The hurricane, which hit the Mid-Atlantic states, caused extensive flooding in the area in August 2011.

The $2.273 billion asset credit union, which is based in Basking Ridge, participated Sunday in the St. Francis Fair in Denville. It offered gift cards and certificates as part of a raffle to support the local businesses (The Daily Exchange Oct. 5). It is focusing on local businesses including:

  • Faith & Begora, an Irish gift shop;
  • Denville Dairy, which sells ice cream, cakes and specialty items;
  • Thatcher McGhee's, an Irish  restaurant and pub;
  • Sergio & Co. Italian Specialities,  which provides deli and gourmet items;
  • Denville Seafood, which sells all types of seafood items;
  • Sweet Expressions, a candy store;
  • Write-On, which has personalized furniture, home accessories and children's items);
  • Tana Creations, jewelry, jewelry repair and accessories store;
  • Dash of Thyme, which sells gourmet food, gifts, candles and custom gift baskets; and
  • Do It Best Hardware, a hardware store.
"Although more than a year has passed since Hurricane Irene, many of our small, local businesses continue to feel the effects," said Ann Gardner, business development officer at Affinity FCU. "This is our way of showing our support and bringing attention to their plight in an effort to help them get back on their feet."

Preparing for International CU Day

 Permanent link
MADISON, Wis. (10/9/12)--Credit unions are preparing to celebrate International Credit Union (ICU) Day Oct. 18 with a simple message: Members Matter Most.



"This year, we're putting a face on International Credit Union Day," said Joanne Sepich, ICU Day coordinator. "And since not everyone can make it into a branch on Oct. 18, we're sharing snapshots of member appreciation online--for all to see. I encourage every credit union to snap a picture to share."

Credit Union Magazine will also publish a "bonus" edition on ICU Day. The issue, sponsored by CUNA Strategic Services provider, Diebold, will provide an overview of credit unions' past and a look at its future.

CUNA President/CEO Bill Cheney offers greetings to all credit union staff and members in a video produced for ICU Day. Use the link.

Marketing materials for celebrating the theme Members Matter Most, which was selected by the World Council of Credit Unions, are being offered by CUNA.

Credit unions can download free poster ICU Day poster art, a website icon, coloring pages and articles, and access an ICU Day press release, proclamation and speech from the CUNA website.

Other promotional materials are available to order, including:

  • T-shirts;
  • Balloons;
  • Piggy banks;
  • Bottle openers;
  • Cork coasters;
  • Credit card protectors;
  • Halloween bags; and
  • Branded bags of Skittles.
Credit unions have come up with original ideas to celebrate ICU Day.  Community 1st CU, Ottumwa, Iowa, will host an ICU Day Video Contest encouraging members to submit a video of 60 seconds or less describing what makes their credit union stand out. There will be awards for the top vote-getters, with a $100 gift card as the grand prize.

A+ FCU, Austin, Texas, will hold its Member Appreciation Week, in coordination with ICU Day. The credit union will offer food, giveaways and prize drawings totaling more than $10,000.

Other ideas for celebrating ICU Day include:

  • An open house with tours and refreshments;
  • An invitation to elected officials to meet members;
  • An international food potluck;
  • A "guest day," where members can bring guests for refreshments and learn more about the credit union; and
  • A "meet your credit union display" with employees' photos and biographies.
Credit unions have celebrated ICU Day on the third Thursday of October since 1948. The day reflects upon the credit union movement's history and promotes its achievements. It is a day to recognize the dedication of those working in the credit union industry, to appreciate current members and to invite eligible consumers to join credit unions.

Floyd Compliant overdraft program protects CUs members

 Permanent link
WASHINGTON (10/9/12)--As regulations on consumer financial products become more stringent, overdraft programs with practices that cause financial hardship for consumers will pose greater compliance risks for all financial institutions, including credit unions. Attention to consumer protection is the key, John M. Floyd, chairman and CEO of John M. Floyd & Associates (JMFA) told the Texas Credit Union League.

John M. Floyd & Associates is a CUNA Strategic Services provider.

The key to avoiding potentially costly legal scrutiny is to provide members with a clearly defined overdraft program that guarantees full regulatory compliance and consumer protection expectations, including transparency regarding fees and information about how the program works, Floyd said (LoneStar Leaguer Oct. 5).

While the National Credit Union Administration (NCUA) hasn't issued specific guidance on the practice of re-ordering debit transactions, credit unions would be wise to review their existing overdraft practices, he said.

When supported by easy-to-understand disclosures and counseling on appropriate usage, such programs provide informed account holders with a valuable resource to better manage their finances, Floyd said.

Floyd indicates that JMFA Overdraft Privilege is guaranteed 100% compliant with all state and federal regulations and consumer protection expectations, and includes:

  • Reasonable, communicated overdraft fees;
  • Clearly established overdraft limits;
  • Transaction clearing policies that avoid maximizing member overdrafts and related fees created by the clearing order;
  • The ability to easily monitor excessive usage; and
  • Communications materials that outline alternative financial products that more appropriately fit the needs of excessive overdraft users.
"In this new regulatory reality, there is no such thing as almost compliant," Floyd said.

If credit unions are not sure that their overdraft programs are in line with new regulatory and consumer protection guidelines, Floyd suggests they ask their provider the following questions:

  • Do our transaction processing policies increase member costs?
  • Do our disclosure materials provide clear descriptions of our program terms and fees?
  • Do our marketing materials accurately explain our opt-in processes for electronic transactions, as well as the opt-out procedure for checking and Automated Clearing House transactions, and how to avoid overdraft fees; and
  • Do we provide account holders with information about alternative, less expensive products that might be better-suited to their short-term credit needs?
"When implemented and managed correctly, a fully compliant overdraft program will provide the most benefit for your members and your institution," Floyd concluded.

League CEO Attract youth but stay relevant to older members

 Permanent link
HIGHTSTOWN, N.J. (10/9/12)--Credit unions should attract young members, but remain relevant to their older members, Paul Gentile, New Jersey Credit Union League president/CEO, wrote in an opinion/editorial featured on CUinsight.

Credit unions are offering more technology options to remain competitive and lower their average age of membership, which is currently 47 years of age, Gentile wrote in the column, "Getting Younger Important, But So is Staying Older."

But credit unions have a "secret advantage" over banks in their competition for younger members: Their values. "As nonprofit financial cooperatives that exist solely for the savings and lending needs of their members--with no outside shareholders to please--credit unions offer young consumers that value proposition as 'values-based,'  Gentile wrote.

Those same values are more easily--and believably--transferable to initiatives such as going green and financial literacy, Gentile notes.

But credit unions must not forget about older members. He cited statistics that indicate 50 million Americans will retire within the next 10 years. Like Gen Y, mature members have financial needs for which they are willing to shop around, Gentile wrote. He cited a Credit Union National Association survey that showed two-thirds of pre-retirees lack a retirement plan and one-third of members would leave their credit union for a financial institution that offered formal retirement expertise.

"With all the talk of getting younger, credit unions must stay attune to the needs of their older members," Gentile wrote. "Credit unions certainly want loans above all else, especially in this market, but older members can drive revenue in other ways."

Retirement services could provide a quality source of non-interest income for credit unions.

"We know credit unions are trusted by their members, so who better to offer investment sales and service," Gentile wrote.

To read the full column, use the link.

Ohio regulator plans first Ohio CU Day

 Permanent link
COLUMBUS, Ohio (10/9/12)--The Ohio Division of Financial Institutions (ODFI) has declared Oct. 30 as the state's first Credit Union Day.

ODFI will celebrate the day with two keynote speakers, three breakout sessions and other state and national speakers, according to the Ohio Credit Union League (eLumination Oct. 3).

Breakout session topics will cover the role of the Consumer Financial Protection Bureau, what to expect during information technology exams and how to bulletproof annual meetings and board meetings.

Breakout sessions will repeat so attendees can attend two sessions. Both state- and federally chartered credit union leaders are invited.

Rasmussen CUs benefit from consumers distrust of banks

 Permanent link
PORTLAND, Maine (10/9/12)--Credit unions can benefit from the general public's  dissatisfaction with banks, Scott Rasmussen, political pollster and analyst, told credit unions at the Maine Credit Union League's Annual Legislative Forum on Oct. 2 in Freeport.

Scott Rasmussen, president and founder of Rasmussen Reports and political pollster and analyst, was the keynote speaker at the Maine Credit Union League's Annual Legislative Forum. From left: John Murphy, league president; Jon Paradise, league governmental and public affairs manager; Rasmussen; and Quincy Hentzel, league director of governmental affairs.  (Picture provided by the Maine Credit Union League)

Click to view larger image
He spoke before a packed audience of nearly 120 credit union representatives, the league said.

Rasmussen discussed public opinions on issues, several of which could be good news for Maine's credit unions.

"The public's dissatisfaction with the political process does extend to many aspects of the financial services industry," he explained. "The bailouts of the big banks remain very unpopular, and our polling consistently indicates consumer trust of banks remaining very low. As a result, credit unions should continue to benefit from that dissatisfaction, especially here in Maine. The strength of Maine's credit unions indicates a high degree of loyalty and trust that members have with credit unions and that positions you very well."

Rasmussen also said that consumers feel like many banks have not learned from their mistakes and still place too much "emphasis on profits when making decisions, and that is what helped lead to the financial meltdown in 2008." As for new regulations put in place by the Dodd-Frank Act, Rasmussen said many consumers doubt their effectiveness. "It all comes back to a low degree of confidence and a high degree of mistrust the public has with banks," he noted.  

Of Rasmussen's findings, league President John Murphy said: "This reinforces the trends and positive feedback that credit unions are experiencing. Public opinion and trust of credit unions are very high, and Scott's data validate that."

Rasmussen offered insight on the 2012 elections and predicted a close election, greatly due to the economy. A lot will depend on economic data between now and election day, he said.

Rasmussen listed Florida, Ohio and Virginia as the states that will determine the outcome of the presidential race.

Rasmussen singled out Wisconsin, Virginia and Massachusetts as going down to the wire and being toss-ups in the U.S Senate races.

"We likely won't know the outcome of the presidential race and a host of other races with national implications until well after the polls close on Nov. 6," he concluded.

Iowa league announces 2012-13 board

 Permanent link
DES MOINES, Iowa (10/9/12)--Iowa credit union representatives were sworn in as the Iowa Credit Union League (ICUL) Board of Directors at the league's Credit Union Annual Convention Sept. 20 in Coralville.

The Iowa Credit Union League 2012-13 board includes, front row, from left: Brent Helin, Des Moines Metro CU; Tim Chapman (chair), Members Community CU; Jeff Hayes, North Star Community CU; and Joe Hearn, Dupaco Community CU. Second row, from left: Janine Keim, Consumers CU; Tim Marcsisak, Nishna Valley CU; and Pat Jury, league president. Third row, from left Dave Cale (vice chair), Financial Plus CU; Jonathon Miller, Dubuque Teachers CU; Jim Hagerman, Linn Area CU; and Denny Siemers, Town & Country CU. Back row, from left: Tim Wallen, Ace Community CU; Pat Drennen, 1st Gateway CU; and Murray Williams, chief operating officer, Iowa Credit Union League; (Photo provided by the Iowa Credit Union League)

Click to view larger image
By serving on the 12-member board, each individual represents the interests of Iowa's 125 credit unions and their nearly one million members.

Tim Chapman, CEO, Members Community CU of Muscatine, was elected to serve as the 2013 chair of the ICUL board; and Dave Cale, CEO, Financial Plus CU of West Des Moines was elected vice chair.

The full board by asset category is:

Up to $17 Million Asset:

  • Janine Keim, Consumers CU, Denison;
  • Jonathon Miller, Dubuque Teachers CU, Dubuque; and
  • Denny Siemers, Town & Country CU, Harlan.
$17 million to $45 million:

  • Brent Helin, Des Moines Metro CU, Des Moines;
  • Tim Marcsisak, Nishna Valley CU, Atlantic; and
  • Tim Wallen, Ace Community CU, Ames. 
$45 million to $89 Million:

  • Chapman;
  • Pat Drennen, 1st Gateway CU, Camanche; and
  • Jeff Hayes, North Star Community CU, Cherokee. 
$89 million and above:

  • Cale;
  • Jim Hagerman, Linn Area CU, Cedar Rapids; and
  • Joe Hearn, Dupaco Community CU, Dubuque.

Advantis CU rehab mortgages turn eyesores into dream homes

 Permanent link
PORTLAND, Ore. (10/5/12)--Advantis CU in Portland, Ore., is stepping up its efforts in socially responsible lending by offering a new mortgage product that helps borrowers fix up distressed homes and neighborhoods.

A glut of local foreclosures and abandoned, distressed homes are creating an onslaught of complaints and safety issues in Portland neighborhoods, said the credit union. The Oregonian reported earlier this year on the problems related to the homes, which are attracting squatters and becoming havens for drug use and illegal activity (PRWeb Oct. 3).

The $928 million-asset Advantis CU announced it is addressing this community problem with a new Rehabilitation Mortgage Program, changing the way borrowers can acquire their dream home and improve neighborhoods.

Stripped and often devoid of amenities, houses that are vacated or foreclosed upon are frequently viewed as unmarketable by realtors and lenders--and blots on neighborhood home values. Average buyers don't have finances available to renovate them, said the credit union.

Advantis' new program provides one mortgage loan to cover the purchase of the home, plus all intended upgrades. A typical buyer or refinancer can afford to look beyond the less-than-perfect-house and actually start making improvements. The home value immediately goes up, and the neighborhood gets a boost.

"The right thing for lenders to do is step up and support people who are willing to invest capital and sweat equity to help solve the issues presented by foreclosures in our neighborhoods," said Darin Walding, Advantis' real estate loan manager. "We are dedicated to helping buyers with a vision fix up a house to make it an attractive, livable home and create value for themselves. Bringing one good rehabbed house into the neighborhood supports the entire community."

Advantis handles most loans in-house from application through closing. After a short online application process, Advantis' mortgage consultants meet with borrowers, and together they create a renovation plan and budget. The property will be appraised in both "as is" and "after improved" condition. Advantis will loan up to 90% of the "after approved" value. One to four units are eligible, and no mortgage insurance is required. Also, no prepayment penalties exist, said Advantis.

Eligible improvements and projects range from minor to major remodels. Some include changes that improve the appearance and modernize the home. Others include: reconditioned plumbing, room additions, improved roofing, decks, and landscape enhancements.

"Simply put, our Rehab Mortgage Program is a win-win--for those willing to invest resources and sweat equity in a fixer-upper," Walding said. "We are helping people get more for their money, while stabilizing housing and helping people's dreams come true, while revitalizing neighborhoods."

CU Court ruling on conversion membership list protects all members

 Permanent link
SAN JOSE, Calif. (10/5/12)--A California court's ruling Tuesday that San Jose, Calif.-based Technology CU does not have to reveal membership information to members who opposed its proposal to convert to a mutual savings bank charter is a ruling that protects all Tech CU members, the credit union told News Now.

California Superior Court Judge Patricia M. Lucus ruled that the $1.6 billion asset credit union had provided a "reasonable alternative method" for the conversion opponents to get their message across to the general membership before voting on the conversion proposal. The judge cited a state law that provides a corporation may deny a demand for membership information if it provides a "reasonable alternative method.'

"On Oct. 2, 2012, Tech CU won a protective order against a few members who demanded copies of our members' private personal information--including names, home addresses, phone numbers and e-mails," said Tech CU President/CEO Barbara Kamm. "This very small group believed that anyone, simply by being a member of Tech CU, should have free access to our members' private personal information," she told News Now in an e-mail.

"As a financial institution, Tech CU is required to abide by certain federal and state privacy laws which prevent the disclosure of personal member information," she said.

"We would like to stress that we take our obligation to protect the privacy rights and personal information of each of our members very seriously," she said. "In order to preserve the safety and soundness of our institution, and to protect our members from potential identity theft, we had no intention of giving the private personal information of our members to anyone for any reason."

The member group had asked for full access to the membership list, but Tech CU offered "to forward e-mails to our 57,620 members for whom we have e-mail addresses, at a total cost of $1,050 (Tech CU's actual cost) via our approved, third-party e-mail system," said Kamm. She noted that the same option was used by one of the credit union's members during the voting process on the conversion attempt. "And, in our recent court case, the judge ruled that this was appropriate."

The judge "sided with Tech CU as an organization, including its 70,000 members, and not with a supposed 'few' individuals who were seeking to obtain the personal private information of our 70,000 members. The judicial ruling protects all Tech CU members," Kamm said, responding to criticism of the ruling by the plaintiffs in the case.

Kamm noted that Tech CU's board "is responsible for both managing the institution and considering all strategic alternatives that are in the best interest of our membership as a whole--maintaining the soundness of our organization."

Will the case have any impact on other credit unions in similar circumstances?  Because the case is based on California state law, its relevance to similar situations in other states may depend entirely on whether their statutes use the same language as the California statute.  Even though the California court's interpretation will not be binding in other states, it will have what lawyers call "persuasive value."

The membership of the credit union voted down the conversion proposal, and voted down a recall effort.  The credit union will continue to operate as a credit union.

FBI Investment fraud schemes rising

 Permanent link
WASHINGTON (10/5/12)--The Federal Bureau of Investigation (FBI) and several federal government agencies, including the U.S. Department of Justice, are holding investor fraud summits nationwide to help consumers protect their money from fraud.

The summits are part of the ongoing efforts of President Barack Obama's Financial Fraud Enforcement Task Forces (FFETF) Securities and Fraud Working Group.

The FBI reports an unprecedented rise in investment fraud schemes, involving thousands of victims and staggering losses. Since 2011, the Justice Department's Criminal Division and 85 U.S. Attorneys' offices have reported that roughly 800 defendants have been charged, tried, pleaded or sentenced in about 500 federal prosecutions involving investor fraud.

Credit unions can warn members about the frauds and losses in their education materials--not only about retirement planning and savings, but also in savings vehicles for college and mortgages. Also, credit union staff should be vigilant in looking for members who are susceptible to being duped into participating in fraudulent investment schemes.

Victims have lost more than $20 billion, in the period. In some cases, victims lost from tens of thousands of dollars to hundreds of millions, and, in some cases, billions in hard-earned savings, said the FBI.

"Investor fraud crimes can erode faith in our financial markets, threaten our nation's ongoing economic recovery, and undermine the fabric of our communities," said Attorney General Eric Holder. "That's why protecting the American people from fraud is a top priority for today's Justice Department." The Investor Fraud Summits will raise awareness about the frauds, educate consumers on how to report suspected fraud schemes and empower members of the public to fight back, he added.

Although tactics and schemes differ, defendants often took the same approach--guaranteeing high returns and providing falsified investment documents to victims. As a result, those victims lost retirement savings, military survivor benefits, family death settlements and money set aside for college tuition and mortgage payments.

Since 2011, the Securities and Exchange Commission (SEC), a FFETF partner agency, has charged 887 individuals and entities in 359 actions involving retail investor fraud. Nearly $9.7 billion has been alleged lost by more than 1.2 million investors in those cases.

"Whether a cold-call, polished website, or e-mail solicitation, fraudsters will use every means at their disposal to convince investors to part with their money," said SEC Director of Enforcement Robert Khuzami. "That is why investor education is so critical--in maintaining financial health as much as physical health, an ounce of prevention is worth a pound of cure."

The summits began this week and are taking place in Stamford, Conn.; Nashville, Tenn.; San Francisco; Denver; Cleveland and Miami.

Two Texas CUs merge

 Permanent link
SAN MARCOS, Texas (10/5/12)--Two Texas credit unions announced a merger this week.

St. John's FCU of San Marcos, with $2.39 million in assets, merged into Greater TEXAS FCU, Austin, which has more than 67,000 members and more than $500 million in assets. 

Greater TEXAS FCU assumed St. John's assets, rights, property, shares and liabilities. St. John's single branch will become the GTFCU's 17th and will remain open.

St. John's FCU was established in 1951 to provide financial services to serve St. John's Catholic Church parishioners and their families.

The merger provides the members of St. John's FCU with more financial products and services, such as home mortgages and extended portfolio of savings and loan products, and improved access to those products and services, such as online services.

Maines credit unions report robust growth in six months

 Permanent link
PORTLAND, Maine (10/5/12)--Maine's 62 credit unions experienced robust growth in all measurement categories including members, assets, savings and loans during the first six months of the year, according to the Maine Credit Union League.

Through June 30, combined assets at Maine's credit unions grew by $200 million to $5.87 billion, an increase of 4.1%. Loans outstanding to members increased by $113 million in first six months, a 3.1% rise, with year-to-date loan originations up 37.3% over the same period a year ago.

During the same time, savings rose by roughly 5%, with $232 million in new deposits flowing into Maine credit unions.

Maine credit unions gained 7,000 new members in the first six months of the year, an increase of 1.1%.  Membership set a new record for the seventh consecutive quarter and now stands at nearly 624,000 statewide, said the league.

Other highlights from the mid-year statistics include first-mortgage-originations' growth of 76.7% and an increase in used auto loans of 9.5%.

"The popularity of Maine's credit unions continues to grow as demonstrated by more consumers switching to credit unions," said John Murphy, league president. "Relationships between existing members and their credit unions is also growing stronger. No longer are the benefits of using a credit union going unnoticed, as more consumers appreciate and recognize that credit unions are a great deal.  From fewer and lower fees to better rates on savings and loans to nearly unparalleled access, Maine's credit unions are delivering for Maine consumers and once again highlight the benefit and value of cooperatives."

Convenience is also a factor in the success of state credit unions, said Murphy. "With the largest surcharge-free ATM Network in Maine, and a shared branch network that has nearly three times as many branches as any single bank in Maine, Maine credit unions are convenient and accessible for Maine consumers to conduct their financial transactions nearly anywhere and anytime," he said.

Connex CU acquires insurance agency

 Permanent link
NORTH HAVEN, Conn. (10/5/12)--Connex Insurance Services, a division of Connex CU, North Haven, Conn., has purchased CPM Insurance Services.

The acquisition will allow the $376 million asset credit union to expand its services into property and casualty insurance and open up additional revenue, said John Edwards, president/CEO of Connex CU.

Connex Insurance Services was founded in 2010 to offer credit union members insurance products and services (McClatchy-Tribune Regional News Oct. 4). Based in Cheshire, Conn., CPM is a full-service, independent insurance agency providing personal and business insurance coverage. 

CPM's founders Frank Pellegrino and Dave Qerim will continue as agency principals. All current CPM employees will continue and clients will continue to be served without changes in service.

Pa. libraries conference PCUA discuss fin lit

 Permanent link
The Financial Literacy panel at the PA Libraries Association conference in Gettysburg included, from left: Maureen Renzi, the Pennsylvania Institute of Certified Public Accountants; Mike Wishnow, the Pennsylvania Credit Union Association; Linda Filkosky, Altoona Area Public Library; and Lisa Erickson, Centre County Library & Historical Museum. (Photo provided by the Pennsylvania Credit Union Association)
GETTYSBURG, Pa. (10/5/12)--The Pennsylvania Credit Union Association (PCUA) has partnered with the Pennsylvania Libraries Association for its PA Forward program, which focuses on five basic literacies: Basic literacy, information literacy, civic and social literacy, health literacy and financial literacy.

During the Libraries Association's annual conference in Gettysburg, PCUA conducted sessions on the five basic literacies. "PA Forward" coordinates activities to help people meet the demands of life in the 21st century and reach their potential (Life is a Highway Oct. 4).

Mike Wishnow, PCUA senior vice president of communications and marketing, participated in a panel discussion Wednesday involving financial literacy.

"Pennsylvania's libraries, like credit unions in the state, have identified financial literacy as a consumer issue that is only getting more difficult as the range of financial products and services become more complex," Wishnow said. "Through the Pennsylvania Credit Union Foundation, we hope to partner with local credit unions and libraries to deliver even more financial education programs in communities throughout Pennsylvania."

Oregon CUs apply for state agencies deposits

 Permanent link
EUGENE, Ore. (10/5/12)--As many as 10 Oregon credit unions could begin accepting government deposits under a new program that will start April 1.

Starting next year, Oregon credit unions can accept government deposits of more than $250,000 through a program in which other credit unions pool collateral that can be sold to cover government deposits if one of the institutions should fail (The Register-Guard Oct. 4).

The new law gives government agencies a choice as to where they can deposit their funds, Troy Stang, Northwest Credit Union Association CEO, told The Register-Guard.

At least five credit unions were required to file the necessary paperwork before the program could start. The paperwork included written commitments from government agencies that said they wanted to deposit more than $250,000 in a credit union.

Five Oregon credit unions already have submitted the required paperwork to participate in the program. Five more credit unions have said they plan to also join the program, State Treasurer Ted Wheeler said Wednesday.

The five credit unions that already have applied for the new state program include:

  • Advantis CU, Milwaukie;
  • OnPoint CU Community CU, Portland
  • Unitus Community CU, Portland;
  • Pacific Crest FCU, Klamath Falls; and
  • OSU FCU, Corvallis.
The five credit unions that committed to participating when program begins next year include:

  • MAPS CU, Salem;
  • Northwest Community, Eugene;
  • Old West FCU, John Day;
  • Wauna FCU, Clatskanie; and
  • Oregon Community CU, Eugene.
Seven other credit unions contributed to start up funding. They include:

  • Mid Oregon CU, Bend;
  • Valley CU, Salem;
  • NW Preferred FCU, Tigard;
  • Clackamas FCU, Milwaukie;
  • Rogue FCU, Medford;
  • Rivermark Community CU, Beaverton; and
  • Oregonians CU, Milwaukie.
Credit unions in several states nationwide are accepting municipal deposits from city and town governments (News Now June 29.) More states are trying to pass laws to obtain that capability. Washington Gov. Christine Gregoire signed Senate Bill 5913--known as the public funds bill--into law March 7, and it became effective June 8. The bill allows public entities for the first time to deposit funds in any credit unions in Washington up to the federal maximum of $250,000, said the Northwest Credit Union Association.

Other states with public funds or municipal deposits bills pending or awaiting implementation include Alabama, Ohio, New Jersey, Minnesota and New York.

Portland, Ore., adopted the Responsible Banking Resolution in May, which resulted in the city depositing $250,000 in each of 10 Oregon credit unions and banks.

NEW CUNA open Columbus Day no INews NowI

 Permanent link
WASHINGTON and MADISON, Wis. (10/5/12)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association (CUNA) will be open Monday, which is Columbus Day, a federal holiday.

News Now will not publish a Monday edition, but will resume regular publication Tuesday.

CU System briefs (10/04/2012)

 Permanent link
  • RACINE, Wis. (10/5/12)--Educators CU CEO Gene Szymczak has bought a home in Racine, Wis., that was designed by noted architech Frank Lloyd Wright. Szymczak paid $350,000 to become the home's seventh owner. Mark Hertzberg, a board member of the nonprofit Frank Lloyd Wright Wisconsin Heritage Tourism Program and author of a book about the house, told local media the house wasn't officially on the market but its owners had been informally looking for someone who would take care of it.  The previous owners had been in the house since 1968, but recently moved to an apartment with less responsibility. Szymczak has hired an architech to help restore the house, which overlooks Lake Michigan (Fox11online Oct. 2) …
  • HARRISBURG, Pa. (10/5/12)--Clearview FCU, a $788 million asset credit union in Moon Township, Pa., hosted a Meet and Greet Tuesday at its Canonsburg branch for U.S. Rep. Tim Murphy (R-Pa.), who is seeking re-election to representing Pennsylvania's 18th District (Life is a Highway Oct. 4). The group discussed credit union and consumer issues such as member business lending, credit union tax status, corporate stabilization assessments, the Consumer Financial Protection Bureau, ATM disclosure lawsuits, jobs in the state, the Environmental Protection Agency, Marcellus Shale issues and the state's energy industry. From left: Renee Lucas and Jim Wood, Clearview FCU; Wendy Kingsland, Visionary FCU; Mark Brennan, Clearview; Murphy; Paul Fero, PA HealthCare CU; Janet Preteroti, Clearview; Ed Orisko, Washington Community FCU; Ron Celaschi, Clearview; and Joseph Marzullo, Washington Area Teachers FCU. Brennan and Fero are members of the Pennsylvania Credit Union Association Governmental Affairs Committee, and Celaschi serves on its Regulatory Review Committee. (Photo provided by the Pennsylvania Credit Union Association) …
  • LANSING, Mich.(10/5/12)--The Michigan Credit Union League's Jackson Chapter of credit unions hosted a legislative breakfast on Sept. 24 at the CP FCU in Jackson. The event featured state Senate Banking Vice Chairman Mike Nofs (R-Battle Creek), and was attended by 14 people, according to   the league (Michigan Monitor Oct. 1). The group discussed reforms to the 90-day foreclosure workout period, financial elder abuse, allowing copies of original instruments including electronic copies, blight violation legislation and six ballot proposals. Nofs is pictured here flanked by members of the Jackson Chapter. (Photo provided by the Michigan Credit Union League) …
  • SAN ANTONIO (10/5/12)--San Antonio-based Generations FCU has named Steve Schipull as CEO, effective in early November, according to the Texas Credit Union League (LoneStar Leaguer Oct. 4). Schipull has served as chief financial officer since 1999. He succeeds Tim F. Haegelin, who has served as CEO of the $395 million asset credit union since 1981. Schipull has been with Generations since 1999. Prior to joining Generations, Schipull was assistant vice president of Bank of America. In 2011 he was named the 2011 San Antonio Business Journal's Chief Financial Officer of the Year (Service Organization). Haegelin was named the league's 2007 Professional of the Year …

CU System briefs (10/03/2012)

 Permanent link
  • ST. PAUL, Minn. (10/4/12)--The Minnesota Credit Union Network (MnCUN) welcomed longtime credit union friend U.S. Sen. Amy Klobuchar (DFL-Minn.) to its office Sept. 27 to discuss with credit union leaders top issues facing the movement and legislative matters in the elections. Klobuchar touched on tax reform and asked the group to flag any measures in pending tax legislation that could impact credit unions. MnCUN Vice President-Governmental Affairs Mara Humphrey highlighted tax expenditures and measures credit unions are following. Klobuchar told the group that no matter who is elected president, legislators' goal is to reduce the national debt while keeping the economy stable. There likely will be measures within various legislative reforms that credit unions would find appropriate, she said. The group also addressed issues such as ATM disclosures bill, which Klobuchar is co-sponsoring, and the pending vote on The Small Business Lending Act (S. 2231), which would raise credit unions' member business lending (MBL) cap to 27.5% of assets from 12.25% and allow small businesses more access to capital. (The Credit Union National Association has said that raising the cap would inject $13 billion into small business loans and create 140,000 jobs at no expense to taxpayers.)  Klobuchar said she is hopeful the bill will come to a vote yet this year. She also addressed the need for legislation to eliminate physical fee disclosures at ATMs. The group thanked her for her continued support of credit unions. "A priority of Minnesota credit unions and our political advocacy efforts it sot make sure legislators understand credit union issues and the important role credit unions play in our society," said Humphrey.  (Photo provided by Minnesota Credit Union Network) …
  • HONOLULU (10/4/12)--Kathy Morris has been promoted to member relations manager at the Hawaii Credit Union League.  Morris' primary responsibilities include planning, directing and coordinating resources to support Hawaii's credit unions, said the league in an announcement. She also is responsible for research and development of new products and services, and working with business partners, both nationally and locally, to primarily benefit member credit unions. Morris joined the league staff in 2010 as member relations officer. She previously worked as a postal carrier for the U.S. Postal Service and Bank of Hawaii. Prior to joining HCUL, Morris was assistant vice president of Ahola United Way …

La. CUs learn the ins outs of MBLs

 Permanent link
HARAHAN, La. (10/4/12)--The increased interest in member business lending (MBL), both on the part of credit unions offering them and small businesses seeking credit, has prompted the Louisiana Credit Union League's new Member Business Services Council (MBSC) to beef up MBL skills at the state's credit unions.

The council kicked off a three-day business lending school Tuesday in Baton Rouge, said the league (eNews Oct. 3). Twenty seven credit union professionals from 13 credit unions in the state attended. They included credit unions with well-established MBL programs as well as those exploring the opportunity to offer MBLs.

Thirty-three credit unions in Louisiana already have MBLs on their books, according to the National Credit Union Administration's June 2012 call report data. However, said the league, "there is strong interest out there and a great need for more information as many credit unions gear up to begin offering this service."

The council coordinated its local, in-depth business lending training with Mike Smith of CU Business Group. The program included an overview of the national and state MBL landscape; a review of how business loans are structured and priced; a discussion of examiner hot buttons; and more advanced issues such as risk analyses and monitoring, financial statement analyses, credit presentations, loan participations and overall program management. Attendees also discussed challenges and opportunities with their peers, and applied what they learned in hands-on exercises.

The MBSC was developed through a collaborative effort of the league and several member credit unions. The council is directed by an advisory committee, consisting of Deanna Geissler of Barksdale FCU, Bossier City; Eddie Vollenweider of Neighbors FCU, Baton Rouge: Jay Noel of Campus FCU, Baton Rouge; and Cami Crochet of New Orleans Firemen's FCU

In addition to coordinating training opportunities for member credit unions, the council provides members with a resource website, e-mail listserv, and regular news updates on issues relating to member business services.

The Credit Union National Association and credit unions across the country are urging Congress to raise credit unions' MBL cap to 27.5% of assets from the current 12.25%. This will enable credit unions to do more to help small businesses by injecting $13 billion into the economy in the form of small business loans. Raising the cap would generate roughly 140,000 new jobs in the first year along, at no expense to the taxpayer, CUNA said.

CUNA also has a variety of training and other resources in the business lending area. Use the links for more information.

Consumers CU sponsors minor ice hockey team

 Permanent link
KALAMAZOO, Mich. (10/4/12)--Consumers CU in Kalamazoo, Mich., announced a partnership with the K-Wings minor league hockey team for the 2012-2013 season, which will provide several benefits to credit union members.

Consumers' members will be offered discount ticket pricing for every home game during the 2012-2013 season. There will also be an opening weekend special, Oct. 19 and 20, for members only.

Members of the $391.4 million asset credit union need to present their debit card or other proof of membership at the K-Wings ticket office to receive their discount.

Also, Consumers will co-sponsor the K-Wings Education Day, where kids from across southwest Michigan attend a special school-day game, and Family Hockey Day in the Zoo, which is a part of all Sunday home games.

Consumers also will have a presence at each home hockey game with Save of the Game. For every save a K-Wings goalie makes, which can average 20 to 30 saves per game, a selected Consumers' member (age 2-12) will receive $1 deposited into the youth Dollar Dog account. A Save of the Game participant will be selected for each home game.

The Saver of the Game will receive:

  • Four free game tickets;
  • The chance to go out on the ice prior to face-off; and
  • $1 for every save, deposited into the Consumers Dollar Dog Account.

Changing regs standards impact paperless mortgages

 Permanent link
ATLANTA (10/4/12)--Changing industry regulations and standards are having the greatest impact on mortgage lenders' electronic mortgages and paperless initiatives, according to 86% of people surveyed in Xerox Mortgage Services' eight annual "Path to Paperless" survey.

Xerox surveyed mortgage professionals involved with loan origination, underwriting, closing, archiving, investing/funding and servicing. 

Forty-three percent of lenders surveyed indicated that within the next four years, more than half of mortgage loans will be closed electronically, said the Atlanta-based documents management company. That compares with 28% who said so in 2011.

What's more, 90% of respondents said having access to an audit trail is a key benefit to going paperless, while 88% indicated they would consider compliance a key factor in their shopping for a paperless mortgage solution.

Collaboration is also important, said the study. Nearly all--98%--of the respondents said online collaboration among internal and external participants in the mortgage loan process is a key component in making an office paperless. This includes cooperation among lenders, borrowers, closing agents, investors and services working together through an electronic loan folder.

Credit unions, to stay competitive with the industry, will also need move to e-mortgages and automated closings. Already, nearly twice as many survey participants said they had implemented these electronic measures during 2012:

  • Paperless origination and underwriting, 55%;
  • eDelivery of disclosures and other documents, 59%;
  • eAcknowledgement or eSignatures for disclosures, 34%;
  • eSignatures at the closing table, 7%;
  • eDelivery of closed loan folder to investors, 53%; and
  • eVault with MERS eRegistry connectivity for archiving, 13%.
"In today's stringent regulatory environment, mortgage professionals are looking to speed their loan process and gain greater transparency by electronically collaborating on images and data," said Nancy Alley, vice president and general manager, Xerox Mortgage Services.  "Technology should provide the flexibility to help a company go digital at a pace it can handle."

To access the Xerox survey, use the link.

(Editor's note: An earlier version of this story carried information that was inadvertently taken from an earlier Xerox survey. News Now regrets any confusion this may have caused.)

CUs step up for National Cyber Security Awareness month

 Permanent link
MADISON, Wis. (10/4/12)--President Barack Obama designated October as National Cyber Security Awareness Month (NCSAM), in recognition of the importance of cybersecurity, according to a release from the Department of Homeland Security. Credit unions are stepping up to help out with the effort.

NCSAM is designed to engage and educate public and private sector partners through events and initiatives with the goal of raising awareness about cyber security and increasing the resiliency of the nation in the event of a cyber-incident.

Credit unions can offer these simple steps to members to protect themselves, their personal assets, and private information online:

  • Set strong passwords, and don't share them with anyone.
  • Keep a clean machine--the member's operating system, browser, and other critical software are optimized by installing regular updates.
  • Maintain an open dialogue with family, friends and community about Internet safety.
  • Limit the amount of personal information posted online, and use privacy settings to avoid sharing information widely.
  • Be cautious about what's received or read online--if it sounds too good to be true, it probably is.
Or credit unions can provide tips of their own. For example, Randolph-Brooks FCU (RBFCU), a $5.16 billion asset credit union based in Universal City, Texas, has issued tips on its website about work-from-home scams.

RBFCU reports a new twist to fraudulent e-mail messaging, known as phishing, which is designed to steal personal information and account details. This new twist has become more prevalent this past year. Work-from-home schemes, including reshipping of electronics and clothing, money pickup and redeposit and child care jobs, have popped up by the dozens.

In reshipping schemes, thieves contact individuals through online ads to receive electronics or expensive clothes, RBFCU said. The merchandise is then repackaged by the individual and shipped to a new destination. The clothing is often purchased with stolen credit cards and the unsuspecting person who repackaged the clothes receives a visit from law enforcement.

Money transport schemes, the act of moving money from one financial institution to another for the illegal benefit of someone else, are a costly problem for both financial institutions and members. This is also sometimes known as money muling, RBFCU said.

Be wary of online job ads for work requiring a participant to open an account at a particular financial institution, RBFCU warned. Often these jobs will involve receiving money from the accounts of strangers, typically an employer or its clients, then depositing it elsewhere or sending it via wire, in exchange for a processing fee. The problem is none of the money belonged to the participant or the online employer and now the participant is responsible for paying it all back, RBFCU said.

Members 1st FCU, a $2.24 billion asset credit union based in Mechanicsburg, Pa., has some cyber security tips on its website, including:

  • Effectively erasing files: Before selling or discarding an old computer, or throwing away a CD or DVD, users typically copy all of the files they need. Users probably also attempt to delete their personal files so other people can't access them. However, unless users have taken the proper steps to make sure the hard drive, CD, or DVD is erased, others may still be able to resurrect those files.
  • Risks of file-sharing technology: File-sharing technology is a popular way for users to exchange, or share, files. However, using this technology makes one vulnerable to risks such as infection, attack, or exposure of personal information.
  • Understanding Bluetooth technology: Many electronic devices are now incorporating Bluetooth technology to allow wireless communication with other Bluetooth devices. Before using Bluetooth, understand what it is, what security risks it presents, and how to protect yourself, the credit union said.

Healthcare CUs meet focus on Staying Alive

 Permanent link
SEATTLE (10/4/12)--Under the theme "Staying Alive," the Healthcare Credit Union Association (HCUA) conducted its sixth annual conference Sept. 27-28.

The association promotes collaboration among healthcare credit unions.

Representatives from 20 credit unions took in two days of presentations and discussions about current issues facing the healthcare industry and healthcare credit unions.

"We felt that "Staying Alive" really captured the urgency that many healthcare credit unions won't be around in the future if we don't start making changes to the way we do business," said John Saatela, CEO of CarePoint CU, Anaheim, Calif., and chair of the conference committee.

In one conference session, Joel Gilbertson, vice president of government and public affairs at Providence Health & Services, discussed the state of the healthcare industry and the impact that healthcare reform will have on the industry and its employees.

Holly Buchanan, an expert on marketing to women, discussed the differences in how men and women make financial decisions and why it is important to have marketing materials that appeal to both genders.

Theran Colwell, director of strategy and business development for CUNA Mutual Group, discussed how credit unions can remain relevant in today's economy. 

During two open-forum sessions, attendees also shared experiences in branding and marketing to members

Corporate CUs panel at league meeting outlines future

 Permanent link
ATLANTIC CITY, N.J. (10/4/12)--Three corporate credit union CEOs participated in a Corporate Credit Union Panel Update Tuesday at the New Jersey Credit Union League's 78th Annual Meeting and Convention in Atlantic City.

Sitting on a Corporate Credit Union Panel Update Tuesday at the New Jersey Credit Union League's 78th Annual Meeting and Convention in Atlantic City are, from left: Central Corporate CU President/CEO Bill Walby, Mid-Atlantic Corporate President/CEO Jay Murray, and Corporate One President/CEO Lee Butke. (Photo provided by the New Jersey Credit Union League)
Central Corporate CU President/CEO Bill Walby, Mid-Atlantic Corporate FCU President/CEO Jay Murray, and Corporate One FCU President/CEO Lee Butke sat on the panel (The Daily Exchange Oct. 3).

Each leader provided an update on their corporate and the services it provides, and answered questions about future trends.

Murray explained the need for corporates to change their structure--especially their back-office operations--to keep costs down for their credit unions. Mid-Atlantic, is focusing on "rekindling the cooperative movement," he said.

Walby will be officially appointed as Alloya Corporate CEO once the merger of CenCorp and Alloya is complete, provided an update on the merger. The merger application was sent to the National Credit Union Administration (NCUA). The Alloya membership will not vote on the merger, but the CenCorp membership will, he reported, adding that the merger has "strong support" from CenCorp members.

NCUA's regulation regarding emergency liquidity was a hot topic throughout the convention, said the league, and Butke provided his perspective from a corporate credit union standpoint. Credit unions would like more options, but Federal Home Loan Banks are not structured to be an emergency liquidity option, he said.

In New Jersey, credit unions that choose to accept municipal deposits, now that legislation passed last year allows them to do so, should include municipal deposits in their liquidity plans, he added.

Three Texas CUs earn Juntos Avanzamos designation

 Permanent link
FARMERS BRANCH, Texas (10/4/12)--Three Texas credit unions--OneSource FCU, El Paso; Community Resource CU, Baytown; and North East Texas CU, Lone Star--have earned the Texas Credit Union League's (TCUL) Juntos Avanzamos,  or Together we Advance, designation.

Juntos Avanzamos is TCUL's outreach program of TCUL. The designation lets the Hispanics know that they can receive friendly, affordable financial services at this "capacity to serve" or Juntos Avanzamos institution (LoneStar Leaguer Oct. 3).

The league will present the three credit unions with a Juntos Avanzamos flag during special awards ceremonies and press conferences. The flag identifies the credit union as a financial institution with a long-term vision and commitment to serving the financial needs of Texas Hispanics.

"The Juntos Avanzamos designation is important to OneSource in a number of ways," Bob Peterson, the credit union's president/CEO, told the TCUL. "First, it reiterates our commitment to our community, 82% of whom are Hispanic. A similar percentage of our members are also Hispanic. Second, it represents a real operational commitment in our credit union because it provides a road map to even better service to our Hispanic members. Finally, it simply recognizes the importance of the Hispanic population we serve."

TCUL is working with Community Resource CU and North East Texas CU to schedule their press conferences.

Coopera, an Iowa-based economic development firm focused on the emerging Hispanic market,  and the Credit Union National Association designed El Poder es Tuyo (The Power is Yours), a customizable, Spanish-language personal finance website for Hispanic credit union members and potential members. For more information, use the resource link.

Connecticut CU provides MBL for arts school

 Permanent link
GROTON, Conn. (10/4/12)--Charter Oak FCU, Groton, Conn., is providing a $1.5 million member business loan (MBL) to provide a local school with a new physical education, performance and community space.

The financial package will renovate and expand the Interdistrict School for Arts and Communication (ISAAC) in New London, Conn.

Click to view larger image Charter Oak FCU, Groton, Conn., is providing a $1.5 million member business loan to renovate this gymnasium and expand the Interdistrict School for Arts and Communication in New London, Conn. (Photo provided by Charter Oak FCU)
"This $1.5 million loan package will allow the ISAAC school to meet its growing needs for decades to come--and benefit all its students and faculty," said Brian Orenstein, Charter Oak's CEO.

Ornstein cited the ISAAC financing deal as an example of Charter Oak's growing presence in commercial lending throughout eastern Connecticut. "Charter Oak's broad lending expertise allows us to reach out and provide the right financing for innovative projects, like this expansion at the ISAAC school," he said.

The expansion project will include demolition to make way for a larger gymnasium, school assembly area and dedicated space for the school's music program--an essential part of ISAAC's creative arts-and-communications curriculum.

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% so that more loans could be made to small businesses, which are considered a key to improving the economy.

CUNA and credit unions say that increasing credit unions' MBL cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

CU System briefs (10/02/2012)

 Permanent link
  • POMONA, Calif. (10/3/12)--Parolee Jerry Lee Franklin, 40, of Whittier, Calif., was sentenced Monday in Pomona, Calif., Superior Court to 150 years to life in prison for a string of bank and credit union robberies in the San Gabriel Valley and West Covina. Franklin, who was dubbed "The Stretch Bandit" by the Federal Bureau of Investigation, pleaded no contest on Aug. 8 to five counts of second-degree robbery and one count of felony evading police (San Gabriel Valley Tribune and Associated Press Oct. 1).  He allegedly robbed U.S. Bank, Hacienda Heights on July 6, 2011; a Bank of the West in Rowland Heights on July 12, 201, and Jan. 11; a Citibank in Rowland Heights on Jan. 14; and First FCU, West Covina, April 23. After the credit union holdup, police chased his van and his girlfriend climbed into the moving van's driver-side window.  She was not arrested.  Franklin had three prior serious felony convictions and was on parole four months when he allegedly committed the July 6 robbery, said the Tribune
  • INDIANAPOLIS (10/3/12)--Jamel H. Brown, 35, of Indianapolis was sentenced to 33 years in prison on four charges related to armed robbery--his seventh visit to prison in the past 18 years.  Among the four counts charged were unlawful possession of a firearm by a convicted felon, bank robbery, interference with interstate commerce by robbery and brandishing a firearm during a crime of violence. His sentencing stems from a variety of incidents during the summer of 2011, including the robbery of Teacher's CU, Indianapolis (Indianapolis Star Oct. 2) …
  • FORT WORTH, Texas (10/3/12)--American Airlines FCU (AA CU) is among the first credit unions in the nation to offer the new EMV (Europay, MasterCard and Visa) Travel Prepaid Card, which incorporates both the EMV chip-and- PIN (personal identification number) technology for international travel as well as the standard magnetic strip for regular domestic use in the U.S. EMV-integrated circuit cards provide an additional layer of security against counterfeiting and are used throughout Europe and other regions. "With a membership centered on the air transportation industry, this new card will be invaluable to our many international travelers in terms of personal convenience, wider acceptance and peace of mind that their money is safe while using their cards abroad," said Nancy Crouch, AA CU vice president of payments. The cards, which have no monthly maintenance fee, are available to primary AA CU members only through a special website …
  • SAN ANTONIO (10/3/12)--Security Service FCU (SSFCU), a $6.7 billion asset credit union in San Antonio, has rolled out a Spanish language version of its award-wining CallPlus automated system.  "We've had significant growth in members seeking service in Spanish," said Gina Drake, manager of the credit union's member contact center. The channel will allow members to self-serve through SSFCU's automated service options while keeping the option to speak to a bilingual representative at any time, she added. Members can obtain account balances, transfer funds, make payments and more by accessing the Spanish language CallPlus system at 800-52-SSFCU and pressing three for service in Spanish. Members also can speak to a bilingual representative by pressing zero at any time …
  • MADISON, Wis. (10/3/12)--Lucas Vebber, policy adviser and district director for former Wisconsin State Sen. Rich Zipperer, will join the Wisconsin Department of Financial Institutions (DFI) as executive assistant, effective Oct. 29, DFI Secretary Peter Bildsten announced. In his former position, Vebber clerked the Senate Committee on Judiciary, Utilities, Commerce and Government Operations; oversaw drafting of legislation and amendments; researched and analyzed proposed legislation and administrative rules; and worked with constituents and local municipalities to resolve issues with state government agencies. The DFI regulates state-chartered credit unions among others. Vebber will work with the state Legislature, Congress, business leaders and stakeholder groups to advance policies that fulfill the department's mission. He will succeed Eric Knight, who will leave DFI as of Oct. 26 to pursue other opportunities …

Two California CUs to merge

 Permanent link
NAPA, Calif., and SANTA ROSA, Calif. (10/3/12)--Two California credit unions have announced they intend to merge by Dec. 1, pending regulatory approval and a vote by the merging credit union.

Health Care Professionals FCU, Napa, Calif., with $5.6 million in assets, will merge with Community First CU, a $143 million asset credit union based in Santa Rosa, according to an announcement by Rita Crawford, board chair of Health Care Professionals FCU. The announcement was posted on Community First CU's website.

Crawford noted that the "strong financial footing of Community First, coupled with its broad array of auto and home loans and high-tech conveniences for members, will ensure more choices and value for our members going forward."

Health Care Professionals said its board felt the credit union had to grow exponentially to get the scale to implement Web-based home banking, next-generation ATMs and match products and services offered by other community-based financial institutions. "After some analysis, we realized we couldn't achieve the necessary growth organically, so we began to search for the best partner to deliver what our members and the Napa community deserved," Crawford said.

Its sole branch in Napa will be rebranded as Community First CU and will have extended hours. Community First has five other branches in Sonoma County: Guerneville, Central Santa Rosa, Healdsburg, Sebastapol and West Santa Rosa.

Health Care Professionals, founded in 1967, has more than 1,230 members.  Community First, established in 1961, has 13,766 members.

Companies share social media strategies

 Permanent link
WASHINGTON (10/3/12)--Global and national companies told how they are getting results--although some results aren't measurable--from their social media strategies during Business Insider's Social ROI Conference last week. Every brand is a publisher, they told the conference.

Speakers provided insights into several social media areas that are adapted here for credit unions from the American Banker's coverage of the conference (Oct. 2).   Here's the advice.

  1. Don't speak the same language "style" on all your platforms. Your credit union's tweeting style should be different from its Facebook style. Social media work differently for each business. Keep in mind the visitors' mindset. People who use Facebook are keeping in touch with friends, not pulling out their credit cards for purchases.
  1. Use social media to play up the credit union's long history digitally. A visual timeline can spotlights the credit union's heritage stories and member focus.
  1. Make the credit union's voice human--use social channels to show the warm and fuzzy side of the credit union.  Talk to visitors as people.  For example BlackRock iShares had an executive share a letter he wrote to his son giving financial advice on Father's Day.
  1. Create infographics. Bank of America, which created infographics to help demystify personal finance to consumers, says the tactic was a hit.
  1. The content-sharing site, Pininterest, could be of use to lenders, but remember people pin what they love. Pinning images of homes might work for lenders. Most Pininterest users are female, but the U.S. Marine Corps. are heavy users, too.
  1. Gaining "likes" is pointless; focus on the credit union's business objectives and what you want to accomplish through your social media efforts.
  1. Don't limit your tweets to a 140-character limit. If someone asks a question the credit union needs to answer in more depth, create a video response and link it to a tweet.
  1. Social media is for experimenting. Although traditional marketing works, don't expect to control social media. Social centers on users' lives, which brands must tap.

WachoviaWells files motion to dismiss NCUA MBS suit

 Permanent link
DENVER (10/3/12)--The National Credit Union Administration (NCUA)  has until Oct. 17 to respond to petitions filed in an appellate court in Denver to appeal a lower-court decision that found in NCUA's favor in its lawsuit against Wall Street banks over losses from mortgage-backed securities (MBS) sold to corporate credit unions.

Several defendants, including Wachovia Capital Markets LLC and Wachovia Mortgage Loan and Trust (now a unit of Wells Fargo) and Nomura Home Equity Loan Inc., filed a petition for permission to appeal Friday in the Tenth Circuit Court of Appeals in Denver on NCUA's lawsuit. On Monday, another defendant, Novastar Mortgage Funding Corp., filed a joinder of petition in the case.

They oppose a July 25 decision by the U.S. District Court for the District of Kansas that ruled NCUA's lawsuit could proceed and that certified certain controlling legal questions in the suit.  They include whether the Federal Credit Union Act's "extender" statute--which allows additional time in certain circumstances to time to file a claim in court--applied to the three-year statutes of repose for filing a case in court, including the three-year statute of repose in the federal Securities Act of 1933; and whether the extender statute applies to federal statutory claims.

NCUA's lawsuits against the banks allege they made numerous misrepresentations and omissions of material facts in the documents offered the failed corporates. The agency also alleges systemic disregard of underwriting guidelines stated in the offering documents and says the misrepresentations caused U.S. Central FCU and Western Corporate FCU to believe the risk of loss on the investments was minimal, when in fact, the risk was substantial. The corporates collapsed in 2009 and NCUA is suing as the liquidating agent.

The banks filing appeals claim the lower court erred in allowing NCUA to extend its time for filing beyond the statutes of repose. They claim the extender statute issues are controlling questions of law, there is substantial ground for differences of opinion, that these statute questions are questions of first impression on which district courts have split, and that even an ambiguous extender statute cannot override a clearly mandated repose period.

In addition to Wachovia/Wells, NCUA has filed lawsuits against Barclay's Capital Inc.; J.P. Morgan Securities LLC, RBS Securities, Goldman Sachs, and UBS Securities. The agency has already settled claims of more than $170 million with Citigroup, Deutsche Bank Securities and HSBC.

NCUA is the first federal regulatory agency for depository institutions to recover losses from investments in faulty securities on behalf of the failed institutions (News Now Sept. 25)

Oregon newspaper editorial supports more lending

 Permanent link
SALEM, Ore. (10/3/12)--An Oregon newspaper editorial on job creation, the housing market, and business incentives supports increased lending from credit unions.

The Salem (Ore.) Statesman Journal, in a wide-ranging editorial about the economic challenges facing the metropolitan Salem, Ore., area, said job creation is priority No. 1. However, Oregon Gov. John Kitzhaber and state legislators also need to address tax reform, government regulations and foreclosure mediation.

"In addition, the state leadership should push Congress to allow increased lending by community banks and credit unions, while avoiding the unsavory lending practices that encouraged some families to take mortgages for which they were ill-qualified," the editorial said.

One of the ways Congress can help the economy is through business lending legislation. The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' member business lending (MBL) cap to 27.5% of assets from 12.25% so that more loans could be made to small businesses, considered a staple in the economy. CUNA and credit unions say that increasing credit unions' MBL cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

To read the article, use the link.

Tinker receives CMN Hospitals award

 Permanent link
OKLAHOMA CITY (10/3/12)--Tinker FCU (TFCU) in Oklahoma City received the Children's Miracle Network Hospitals' Fundraising Event of the Year award for its 11th Annual TFCU Miracle Car Show.

Tinker FCU (TFCU) received the Children's Miracle Network Hospitals' Fundraising Event of the Year award for its 11th Annual TFCU Miracle Car Show. Pictured are, from left:  Starla Hale, TFCU's car show coordinator; keynote speaker Sheriff John Whetsel; 2013 Champion Child Martina Goodman, and TFCU Business Development Representative Cody Buchholz. (Photo provided by Tinker FCU)

Click to view larger image
The event, part of TFCU's Credit Unions for Kids fundraising efforts, raised more than $23,500, which included a $10,000 Miracle Match from CO-OP Financial Services, for Children's Miracle Network Hospitals.

Funds were raised through car registration fees, raffles, concessions and sponsorships. The free event was open to the public and showcased 147 vehicles in 18 categories. It has been held at TFCU's corporate offices since 2001.

Starla Hale, TFCU's car show coordinator, accepted the award Sept. 27 at Children's Miracle Network's Partner Kickoff Meeting and Award Luncheon.

At the luncheon, Oklahoma's Credit Unions for Kids was recognized as the Children's Miracle Network Hospitals' Sponsor of the Year with the Jean Gumerson Founder's award. TFCU collaborates with credit unions statewide each year to support the hospitals. Since 1997, Credit Unions for Kids has raised $1.9 million for children's hospitals in Oklahoma.

Children's Miracle Network Hospitals funds children's medical research and works to enhance children's lives in Oklahoma. All of the money raised stays in Oklahoma and benefits Children's Hospital Foundation. Children's Miracle Network Hospitals has been one of TFCU's corporate charities for the past 16 years.

TFCU is the largest credit union in Oklahoma, with more than $2.8 billion in assets and in excess of 260,000 members.

Cheney kicks off N.J. league annual meeting

 Permanent link
ATLANTIC CITY, N.J. (10/3/12)--The New Jersey Credit Union League kicked off its 78th Annual Meeting and Convention Monday, with Credit Union National Association President/CEO Bill Cheney providing an industry update during a question-and-answer session.

Bill Cheney (left), president/CEO of the Credit Union National Association, fields questions from Paul Gentile, president/CEO of the New Jersey Credit Union League, at the league's 78th Annual Meeting and Convention Monday in Atlantic City. (Photo by the New Jersey Credit Union League) 
League President/CEO Paul Gentile posed questions about the pending member business lending (MBL) vote before Congress, the new Consumer Financial Protection Bureau (CFPB), and the future of the credit union movement (The Daily Exchange Oct. 2).

Cheney said he is optimistic about the MBL vote, explaining that CUNA believes the bill has the 60 votes it needs to pass, but only after the election. Credit unions can expect more regulation from the CFPB, but CUNA is communicating with the agency to limit the burden on credit unions as much as possible. Cheney also presented CUNA's vision for the future of the movement, which will focus on removing barriers, increasing awareness and fostering service excellence.

Other speakers featured included:

  • Keynote speaker Lou Dobbs, broadcast journalist and current host of Fox Business News' Lou Dobbs Tonight, who said consumers need to stop being blamed for being conservative with their money, especially when banks and investors are guilty of the same approach. Congress needs to also cut government spending. "We need to get our fiscal house in order to recover," Dobbs added.
  • National Credit Union Administration (NCUA) Chair Debbie Matz, who introduced a new direction for examiners that will distinguish between documents of resolution and exam findings. Matz also outlined how the NCUA plans to reallocate its resources to larger credit unions, which would pose a larger risk to the insurance fund. Assets are concentrated in larger credit unions, yet the majority of exam hours are focused on small credit unions. NCUA is changing that, she said.
  • Jeff Rendel, who has experience as a federal regulator, financial executive and congressional lobbyist, and who explained his formula for measuring Member Lifetime Value. He discussed how to both increase sales skill effectiveness and maximize product delivery. Outbound marketing, including centralized follow-up and data mining, can also drive members to a credit union and build revenue, Rendel said. In every organization, there is the "80% who give you 20%, and the 20% who give you 80%" in dedication, efficiency, and work ethic, said Rendel, and the same goes for credit union members. Credit unions should focus on growing that dedicated 20%. Motivate those members with loyalty programs, relationship pricing and targeted offers, he concluded.
  • Jack Vonder Heide, founder and president of Technology Briefing Centers, who said many credit unions experience success with social media while others stay away, citing a lack of tangible financial justification as the reason. Individuals who connect with their financial institution via social media channels average 5.6 products compared with 4.3 for non-connectors, according to a Fiserv study, Vonder Heide explained during his Monday session titled "Social Media: Why Do It?" It's a new, free, way to connect with members, he said. Even if a credit union isn't directly involved in social media, it should monitor what is being said about the credit union in social media, he added.

NCBAs The Fix campaign highlights benefits of co-ops

 Permanent link
WASHINGTON, D.C. (10/3/12)--A new public awareness campaign developed by the National Cooperative Business Association (NCBA) and Cabot Creamery highlights how cooperatives are "The Fix" to many of the economic problems affecting the U.S.

The initiative also rewards consumers who learn about and use the nation's 29,000 cooperatives, which include credit unions.

2012 was named the International Year of Cooperatives by the United Nations. The 2012 International Summit of Cooperatives will be held next week in Quebec City, Canada.

Cabot Creamery Cooperative is one of the sponsors of the Credit Union National Association's weekly Home & Family Finance Radio Show.

"Cooperatives have a unique business model that has been successful throughout the recession by continuing to build stability and provide economic vitality in local communities around the country," said Liz Bailey, NCBA interim president/CEO.

"This campaign brings to light the many benefits that co-ops provide to consumers, while raising awareness for the tremendous growth that has occurred in the cooperative industry in the past several years thanks to the thousands of members, workers and individuals who support these values-based businesses," she said.

The Fix campaign opened Tuesday with two contests:

  •  A video contest in which individuals can earn a chance to win prizes by viewing a video and successfully answering a question; and
  • A Check-In Challenge in which individuals earn "stamps" for downloading the CooperateUSA app and checking in with participating cooperatives. Entries in the contest are earned each time a stamp is received.
Prizes will be awarded weekly from Oct. 1 through Nov. 30. The contests and challenges will change every two weeks to highlight four areas where cooperatives are "The Fix." The first video contest and check-in challenge, which focused on healthy food access, run through Oct. 16, ending on the United Nations' World Food Day.

Three grand prizes will be awarded based on the total number of downloads of the CooperateUSA mobile app.

CooperateUSA recently launched its app and an its online directory of free resources that provide access to 29,000 U.S. cooperatives. The CooperateUSA app is compatible with iPhone and Android smartphones and tablets, and includes:

  • Gaming features that tally points for cooperative activities to award prizes and discounts;
  • Updates that keep consumers informed about cooperative news, events and local offers; and
  • Education on how co-ops impact job creation, affordable housing, healthy food access and worker empowerment.
The CooperateUSA.coop online directory offers a co-op locator to search for co-ops nearby or nationwide and provides information and web links to each cooperative. The site also provides the latest news about cooperatives, information about cooperative development and facts about cooperatives in the U.S.

NCBA is the national association for cooperative businesses providing cross-sector education, support and advocacy to help start and grow co-ops.

Cabot Creamery Cooperative has been in continuous operation in Vermont since 1919, and is owned by 1,200 dairy farm families located throughout New England and upstate New York.

Kansas Nebraska leagues to offer networking councils

 Permanent link
WICHITA, Kan. and OMAHA, Neb. (10/3/12)--The Kansas Credit Union Association (KCUA) and the Nebraska Credit Union League have partnered to offer networking councils between their affiliated credit unions.

Nebraska credit unions can join the already established Lending Council, Marketing Council and CUnext Young Professionals Council, launched last year by KCUA.

"By partnering together, we are enhancing the council experience, extending our networking opportunities, and offering more resources to credit unions," said Gina Evans, KCUA assistant vice president of education and training. "Our collaboration efforts with Nebraska strengthen the cooperative spirit and build on the credit union philosophy of people helping people."

All councils feature a listserv and fileshare, both accessed through a members-only section of the KCUA website. Webinars and joint face-to-face sessions will be offered, as well as state-only events.

Councils are open to employees or volunteers of Kansas or Nebraska affiliated credit unions or their credit union service organizations. Each council is governed by three directors and is supported by annual membership dues.

SCMS triggers success in Kenya

 Permanent link
FARMERS BRANCH, Texas (10/3/12)--A Kenyan credit union employee is applying the education he received at the Southwest CUNA Management School (SCMS) to introduce modern financial services in a country riddled with societal and economic problems, according to the Texas Credit Union League (TCUL).

Duncan Njiri, a credit union manager from Kenya, introduced new financial services in a country riddled with economic problems after graduating from Southwest CUNA Management School. (Photo provided by Texas Credit Union League)
Duncan Njiri is manager of Majanees Saving and Credit Cooperative Societies Ltd., where he has worked for 18 years in Limuru, Kenya (LoneStar Leaguer Oct. 1).

Among the challenges Njiri faces in his work are semi-illiterate and computer-illiterate members, a poorly trained and unskilled staff, and a lack of funds to offer loans and create investments.

After graduating from SCMS Njiri returned to the credit union and introduced new lending and marketing strategies, rebranded Majanees' products and services, and implemented a new business plan.

The moves have begun to pay off, Njiri told TCUL.

"I think this strategic plan will be remembered down in history," said Njiri. "The board members have already appreciated the gains we have achieved through increased membership, increased income through new loan products and enhanced employee benefits. And, through financial management, the board can now be able to analyze and interpret the financial trends and their effects."

CU volunteer 102 goes to college on scholarship

 Permanent link
PLYMOUTH, Mich. (10/2/12)--A 102-year-old member and long-time volunteer of Plymouth, Mich.-based Community Financial Members FCU, has received a full scholarship to return to school, according to the Huffington Post (Sept. 28).

Margaret Dunning was a member of the $505 million asset credit union's board of directors for 23 years and the credit union even named one of its three scholarships after her, according to its website. However, when Dunning returns to school 80 years after she started studying for a business degree, she won't be using the Margaret Dunning Scholarship Fund from the credit union.

Instead, Dunning, who is well-known on the antique car show circuit--received a surprise full scholarship from auto products manufacturer The FRAM Group, which decided to help send Dunning back to the University of Michigan's Stephen M. Ross School of Business after seeing a story about her lifetime devotion to cars.

Dunning is a still-active driver and "Belle of the Concours" and displays her 1930 Packard 740 Roadster at shows across the country, including Keels & Wheels Concourse d'Elegance in Seabrook, Texas, and the Pebble Beach Concours d'Elegance, where she was presented with a Classic Car Club of America award from Jay Leno.  She also has been interviewed by the likes of Today.com and The New York Times.

She grew up on a farm near Henry Ford's residence and learned to drive when she was eight. After graduating from high school, she went to the university but was forced to drop out during the Great Depression to help her widowed mother.

The auto products manufacturer said Dunning also will receive free auto parts for life. She still changes the spark plugs and oil on her cars--and she's planning out her commute to school.

The credit union scholarship named after her goes to college-bound individuals who epitomizes the credit union's People Helping People philosophy, noted the Huffington Post.

New frontier in hacking Call center conversations

 Permanent link
MADISON, Wis. (10/2/12)--While credit unions are beefing up data security in the high profile areas--mobile banking, online banking, and their own computer networks--to protect their members information, one area is being perceived as the path of least resistance by crooks: the recorded call center conversation.

Last spring, banks and credit unions reported an uptick in call-center schemes that rely on social engineering tricks to convince member/customer service representatives to share or change account information. Fraudsters were redirecting their targets to the ignored call center, said Bankinfosecurity (March 16).

Late last year, Gardner fraud analyst Avivah Litan reported that while most U.S. banking institutions devote great deals of attention to online user authentification and verification of  electronic funds transfers, they paid little attention to authentification and verification at the call center.

Security experts began to advise financial institutions to ramp up employee education and adopt practices such as enhanced user authentication and out-of-band- verification of transactions initiated via the call center.

The trend took a new twist recently after hackers exploited Apple's policy of letting customers reset their Apple ID password over the phone--in exchange for easy-to-obtain personal details such as e-mail address, billing address and the last four digits of the credit card associated with the account. They gained full control of a journalist's iCloud account and wiped all his data from his iphone, iPad and Mac (The Telegraph Aug. 8).

Now, crooks are zeroing in on sensitive data from recorded call center conversations (American Banker Sept. 28).

The Payment Card Security Industry Data Security Standards (PCI DSS) Council maintains that recordings of personal information such as credit and debit card numbers and Social Security numbers often provided during payments via phone fall under PCI DSS compliance.

As a result tech vendors are pushing call center recording and coaching technology that halt recording when a phone dialogue includes data that may be tempting to cyber criminals. For example, CallCopy includes a blackout feature that uses start and stop triggers that define the beginning and end of the sensitive information during a call. It pauses the recording so the sensitive data aren't stored. It also uses secure sockets layer encryption for recording and playback, and it tracks a history of all the activity within the application so the financial institution can determine who accessed any recording for playback or export.

Although CallCopy has voice recognition technology and phrase detection, it relies mostly on screen navigation to set off the pause in recording.

Another tech firm called NICE offers desktop analytics that, based on the representative's screen activity, will trigger a pause and then resume recording. It also uses access-control tools such as strong password management.

Another fraudulent trend at call centers includes social engineering attempts that target branch and call center staff as they undergo conversions linked to acquisitions, according to Bankinfosecurity.com. Crooks calling in to have an account opened or to have a credential changed know call-center staff won't be able to verify all the details until after a conversion is completed.

August CU loans savings grow BTD effect continues

 Permanent link
MADISON, Wis. (10/2/12)--Although credit unions' savings growth outpaced loan growth by a wide margin in August, the combination of a slowly improving economy, significant pent-up demand, and seasonally strong borrowing should result in relatively strong loan growth in the coming months, according to a Credit Union National Association (CUNA) economist's analysis of CUNA's monthly sample of credit unions for August.

Click to view larger image Click for larger view
All else equal, this should have a positive influence on credit union bottom-line results as short-term, liquid investments yielding close to zero are replaced with higher-yielding assets, Mike Schenk, CUNA vice president of economics and statistics, told News Now.

"The disparity [between credit unions' savings and their loans] arose because August ended on a pay day and automatic payroll deposits caused share draft balances to increase dramatically," Schenk said. "Savings balances increased by 8% in the month. As a consequence, the movement's aggregate loan-to-savings ratio fell from 68.2% in July to 67.7% at the end of August. The decline comes on the heels of four consecutive months of increases in the loan-to-savings ratio," he added.

Credit union loans outstanding grew 0.5% in August, up from 0.4% growth in July. Credit union loans totaled $603 billion in August, compared with $580.7 billion in August 2011.Unsecured personal loans led loan growth with a 3.9% increase, followed by new-auto loans (1.2%) and used-auto loans (1.1%). Adjustable-rate mortgages and credit card loans each rose 0.6%. Fixed-rate mortgages remained constant, and home equity loans fell 0.2%.

Click to view larger image Click for larger view
Credit union savings balances grew 1.2% in August, compared with a 0.9% decrease in July. Credit union savings in August totaled $890.1 billion--or $63.9 billion more than the $826.2 billion in August 2011. Share drafts led savings growth with an 8% increase, followed by regular shares (0.9%) and money market accounts (0.5%). On the decline were one-year certificates (-0.1%) and individual retirement accounts (-0.6%).

Asset quality was essentially unchanged as 60-plus-day delinquencies amounts ended at 1.16%, Schenk said. The movement's aggregate delinquency rate has declined in each of the past eight months and is now about 0.4% lower than the year-end 2011 reading of 1.6%. It also is well below the 1.85% cyclical high recorded in January of 2010. The movement's long-run average aggregate delinquency rate is about 10%, Schenk added.

"CUNA economists continue to stress the likelihood of very slow improvement in economic conditions, with a continuation of slow labor market improvement, marginal income gains and more loan growth," Schenk said. "This suggests that the improving asset-quality trends we've seen will continue in the coming months. More important, the improvements are likely to push the aggregate delinquency rate back down near the 1% long-run norm by 2013."

Fast asset growth caused earnings rates--return on assets (ROA)--to decline to 1.06% in August from an annualized rate of 1.29% in July, Schenk explained.

"Overall, credit unions collectively posted a 0.93% ROA in the first eight months of 2012," he added. "This puts the year-to-date earnings rates at the long-run average rate, but it is important to remember that the current results do not reflect corporate stabilization expense, which should come in at nearly 10 basis points on insured shares--or a little less than 9 basis points on average assets. Not surprisingly, fast asset growth also caused little change in net worth ratios, which finished August at 10.3%--almost identical to the level reported in July." 

Regarding liquidity, the loan-to-savings ratio remained constant in August at 68%.

The movement's overall capital-to-asset ratio is 10%. The total dollar amount of capital is $106 billion.

"Importantly, the lasting effects of Bank Transfer Day and consumer dissatisfaction with banks--especially larger banks--are continuing to be seen in our Monthly Estimates data," Schenk said. 

"Total memberships expanded rapidly in August--increasing by 0.3% in the month--an annualized 4% rate," he added. "Credit union memberships are up by 2.7%, compared with year-ago levels and are up 2% on a year-to-date basis. By way of comparison, the U.S. population grows at an annual rate of slightly less than 1%--a clear indication that more consumers recognize the credit union difference and understand that credit unions are the best choice for consumer financial services."

CU System briefs (10/01/2012)

 Permanent link
  • HARRISBURG, Pa. (10/2/12)--The Pennsylvania Department of Banking has officially merged with the Pennsylvania Securities Commission, effective Monday, said a department press release. Gov. Tom Corbett signed the merger into law on July 2. The new consolidated agency will be known as the Pennsylvania Department of Banking and Securities. Corbett, in signing the law, said that the merger "will lead to an initial savings of $1 million, with more possible as we move forward with the consolidation." The Department of Banking oversees state-chartered credit unions. Department of Banking Secretary Glenn Moyer said that "during this transition period, the institutions and professionals that are chartered and licensed by the Department of Banking will see no changes." Mailing and e-mail addresses and telephone numbers for staff will remain the same for both entities. Executive offices for the new combined entity will remain at the current Department of Banking location in Harrisburg …
  • MADISON, Wis. (10/2/12)--UW CU, based in Madison, Wis., says it is among the first to voluntarily adopt new account disclosures designed by consumer advocates to be as straight-forward and consumer-friendly as possible. The simple policies and fees disclosure format allows consumers to compare checking accounts between financial institutions more reliably, the $1.5 billion asset credit union said. The Pew Charitable Trust, a non-profit public policy research group, has recommended a "simple" structure for all banks and credit unions, and the Consumer Financial Protection Bureau has said it will look to implement a simplified disclosure requirement. UWCU President/CEO Paul Kundert  noted that "being open and transparent about our policies is one way to help consumers understand financial services and make better decisions. To my knowledge, we are the first financial institution in Wisconsin to make this information available in this consumer friendly format."  …
  • CLINTON TOWNSHIP, Mich. (10/2/12)--Central Macomb Community CU (CMCCU), a $155 million asset credit union based in Clinton Township, Mich., returned to its roots to help sponsor a job fair for military veterans at Selfridge Air National Guard Base (Michigan Monitor Oct. 1). CMCCU, which was originally Selfridge Air Force Base CU, was the refreshments sponsor at the "Hiring Heroes" job fair set up for veterans seeking employment. The credit union also set up a table to talk to potential interviewees for positions at the credit union. CMCCU CEO Drema Isaac said the credit union continues "to support the military every chance we get, and this was another one of those chances." The event was hosted by the U.S. Chamber of Commerce and the Macomb County Chamber of Commerce.  More than 400 veterans registered for it. (Photo provided by the Michigan Credit Union League) …

Top 10 iNews Nowi stories for September (10/01/2012)

 Permanent link
MADISON, Wis. (10/2/12)--An article describing how cybercriminals are obtaining the login details of financial institution employees--targeting credit unions and small- to mid-sized banks--and illegally wiring themselves hundreds of thousands of dollars was the most-read News Now article in September.

The top 10 articles in September included:

10. Low mortgage rates can be help, hindrance for CUs: CUNA

WASHINGTON (9/28/12)--Record low mortgage rates, like those reported this week, "are something of a double-edged sword for credit unions," Credit Union National Association (CUNA) Chief Economist Bill Hampel said Thursday.

9. Exam issues addressed by new manual: NCUA OIG

ALEXANDRIA, Va. (9/12/12)--In an internal review requested by the U.S. Congress, the National Credit Union Administration's (NCUA) Office of the Inspector General (OIG) found inconsistencies in how small credit union examination policies and procedures are implemented. However, the OIG noted, the NCUA's recently released National Supervision Policy Manual addresses these and other examination concerns.

8. CUs face tougher auto market competition

MADISON, Wis. (9/17/12)--The auto lending market is experiencing three changes that can translate to more competition--and opportunity--for credit unions in what has long been their bread-and-butter loan portfolio.

7. Fed launches QE3, will keep interest rate near 0% longer

WASHINGTON (9/14/12)--True to economists' expectations, the Federal Open Market Committee (FOMC)--the Federal Reserve's monetary policymaking body--today said it will launch a third program of open-ended bond purchases (dubbed quantitative easing or QE3) beginning Friday at a pace of $40 billion a month.

6. Interchange cap not helping consumers: CUNA, trades

WASHINGTON (9/24/12)--With the one-year anniversary of debit interchange fee cap implementation approaching on Oct. 1, the Credit Union National Association and finance industry partners in a letter to Congress noted that "there is no evidence that consumers are seeing lower prices" on retail goods, a direct contrast from what they were promised by merchants.

5. CUs help underbanked servicemembers avoid payday lenders

WASHINGTON (9/14/12)--The news that the unbanked and underbanked households have increased slightly since 2009 comes as no surprise to the nation's defense credit unions. The people they serve--service members and their families--are often prey to predatory lenders. As a result, these credit unions have a myriad of programs to serve them.

4. Survey: In 20 years, half of today's CUs may disappear

WASHINGTON (9/5/12)--What will the credit union movement look like in 20 years? According to one analysis of growth trends over the past five years, the credit unions of 2032 could look "remarkably different" than today, with half of today's credit unions disappearing.

3. Hyland to leave NCUA Oct. 5

ALEXANDRIA, Va. (9/20/12)--National Credit Union Administration board member Christiane "Gigi" Hyland today announced her resignation, effective Oct. 5.

2. CU reps among CFPB consumer advisory board members

WASHINGTON (9/12/12)--Two credit union representatives are among the 25 consumer experts from outside the federal government that the Consumer Financial Protection Bureau (CFPB) has appointed to form its new Consumer Advisory Board, which will provide advice to CFPB leadership on a consumer financial issues and emerging market trends.

1. Cybercrooks target CU, bank employees

WASHINGTON (9/20/12)--Cybercriminals are obtaining the login details of financial institution employees--targeting credit unions and small to mid-sized banks--to illegally wire themselves hundreds of thousands of dollars, according to a new Federal Bureau of Investigation fraud alert.

Equifax Home equity balances signal positive change

 Permanent link
ATLANTA (10/2/12)--Home-equity installment balances in the U.S. rose 0.3% in August--the first monthly increase since November 2007, which signals a possible turning point in mortgage demand, according to U.S. credit bureau Equifax's newest National Consumer Credit Trends Report.

Credit unions should take note of this development in their home equity and mortgage lending.  

"The residential real estate market finally seems to be finding solid ground," said Equifax Chief Economist Amy Crews Cutts. "We're seeing signs that the contraction in mortgage debt is slowing and delinquencies continue to trend down at the same time that mortgage rates set new record lows on almost a weekly basis. The environment has been set for growth for a while--now it looks like it may finally be happening."

The total number of home equity installment loans has fallen 43% during the past four years--to 4.4 million in August from 7.7 million in August 2007. Meanwhile, home equity installment balances also declined--49% to $143 billion in August from their $278 billion peak in September 2007.

New Mexico led the growth in percentage of home equity installment loans, posting the largest gain in dollar balances (2.3%) and in the number of loans (1.7%) outstanding.  

California (2.3%), Nevada (2.1%), Colorado (2%) and Florida (1.9%) rounded out the top five states for percentage growth in balances. Florida (1.6%), Nevada (1.5%), California (1.35%) and Colorado (1.3%), make up the rest of the top five for percentage growth in number of loans.

While delinquency rates on home equity accounts have been stable in a narrow band in recent months, write-off rates accelerated their declines in August. Home equity installment loan write-off rates fell 16% to a rate of 2.69%--the lowest level since February 2008, Equifax said.

CUNA Mutual lite Data cleanup could save millions

 Permanent link
CHICAGO (10/2/12)--CUNA Mutual Group has been named the winner of the 2012 Cobalt Award by ARMA International, a global corporate record and information management organization.

CUNA Mutual was recently honored at ARMA International's annual conference in Chicago.

The annual award recognized CUNA Mutual for embracing solid records and information management that resulted in the implementation of meaningful compliance controls and eliminating more than 159 terabytes of electronic information during a four-year period--the equivalent of 70 billion sheets of single-spaced paper.

As part of its records and information management project, CUNA Mutual also recycled 1,217 tons of paper.

ARMA International lauded CUNA Mutual for its superior records management and for going beyond merely purging data to creating a sustainable system for managing data as an asset, like any other company asset. CUNA Mutual also was recognized for protecting private data and properly storing corporate records.

"Clearly, CUNA Mutual has made the cultural shift necessary for an organization to embrace solid records and information management as a foundation for its success," ARMA International said.

By being named the 2012 Cobalt winner, CUNA Mutual Group joined Cisco Systems (2011), Proctor & Gamble (2010), Prudential Financial (2009) and New York Life (2008) as winners of the award.

"The speed with which information is created today can make managing records in a compliant way challenging," said Steve Koslow, senior vice president, CUNA Mutual chief ethics and compliance officer. "Stale data are no longer a burden, and we are eliminating expenses that can reach into the millions. In addition, superior records management and efficient disposal of unnecessary data free up capital so we can better serve our policyholders."

Texas league to combine annual meeting TGAC

 Permanent link
FARMERS BRANCH, Texas (10/2/12)--The Texas Credit Union League (TCUL) will combine its annual meeting and the Texas Governmental Affairs Conference (TGAC) in 2013.

Traditionally, TCUL holds its annual meeting in Austin every other year to coincide with the Texas Legislative Session, while the TGAC takes place in February (Lone Star Leaguer Oct. 1).

"We wanted to give more credit unions an opportunity to take part in the legislative process," said Tom Haider, TCUL executive vice president and chief advocacy officer. "By making advocacy part of our largest event of the year, we are opening the door to more participation by credit union staff, volunteers and leaders."

Details of the agenda are still being finalized, the league said.

FCU in Mich. gets approval to convert to state charter

 Permanent link
PLYMOUTH, Mich. (10/2/12)--Community Financial Members FCU in Plymouth, Mich., has been granted permission from the National Credit Union Administration to convert to a state charter from a federal charter.

The move is being made by the $505 million asset credit union because it determined it would "best serve the long-term interests of [the] credit union and its members" in its search "for ways to expand into new communities and neighborhoods," according to a letter to members from Ronald Carlson, Community Financial board chair. The letter was published Thursday on Community Financial Members' website.

That expansion is driven by the fact that Community Financial's "current community boundaries have created artificial barriers that have prevented persons from being eligible to join" the credit union, Carlson wrote.

"In some of our communities, persons on one side of the street are eligible to join our credit unions, while persons on other side of the street are not," he added. "Our intention is to eliminate these artificial barriers so that almost any person that wants to join our credit union may join."

The conversion now goes to members for a vote. To read the letter use, the link.

Biz lending featured in CUcorp radio ads

 Permanent link
LANSING, Mich. (10/2/12)--Michigan credit unions' fall radio campaign features credit unions' role in business lending as a key message, says the Michigan Credit Union League.

The league's subsidiary, CUcorp, funded the fall radio buy, which begins Oct. 8 with two radio spots aired to help raise awareness that credit unions have increased lending the past few years and continue to support local businesses and Michigan's economy (Michigan Monitor Oct. 1).

The ads ask consumers to visit creditunionlink.org to learn more about credit union business lending. A large banner ad on the home page links to the business lending page on the site. From the business lending page, visitors can run a search by ZIP code that generates a list of credit unions offering business loans.

The business lending radio spots will run through Dec. 23, with print and digital business publication advertising appearing in October, November and December.

The league said an interview with league CEO Dave Adams will appear in the Greater Lansing Business Monthly this month, along with a business lending ad.  Other publications the ad will be featured in include:

  • Crain's Detroit Business, print and digital;
  • Corp! magazine, print and digital;
  • MiBiz, print;
  • Grand Rapids Business Journal, print; and
  • Business Update, print, with the October issue focusing on credit unions.
Business lending radio spots will run in major metro areas of Detroit, Flint, Grand Rapids and Lansing, and in other counties where most credit unions offer business loans and services.

After the presidential election in November, when consumers turn their attention to holiday shopping, radio shots will support Invest in America, with a focus on member discounts from Sprint and General Motors. The radio spots will continue through Christmas to take advantage of holiday gift-buying and year-end auto sales.

Credit unions and the Credit Union National Association are urging Congress to increase credit unions' ability to offer business loans by supporting legislation that would increase credit unions' member business lending cap to 27.5% of total assets, up from 12.25%. Increasing the cap would result in $13 billion more for small-business loans and help create 140,000 new jobs the first year--while not costing taxpayers a dime.