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NCUF grant helps 100 CDCU leaders

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NEW YORK (11/11/08)--A $35,000 grant from the National Credit Union Foundation (NCUF) will enable at least 100 board members and management from community development credit unions (CDCUs) to attend CDCU Institute courses this year. Designed in 1999 by the National Federation of Community Development Credit Unions in partnership with the Credit Union National Association’s Center for Professional Development, the annual institute provides a forum for CDCUs to “acquire professional skills needed to increase membership, expand products and services, and strengthen net worth.” NCUF has approved $370,000 in grants for the CDCU Institute the past four years. These grants have helped the federation:
* Offer a week-long institute in Madison, Wis., and short courses on affordable mortgage lending, in Chicago and Durham, N.C.; and * Expand the curriculum to include short-course modules on succession planning, affordable mortgage lending, and the credit path.
The grant will help the federation continue to expand the institute. For example, Education and Training Director Pamela Owens said the federation is incorporating a housing counseling module into the curriculum. “We also plan to develop short courses to help large credit unions that have recently expanded their fields of membership into low-income communities to turn these potential members into active members,” Owens added. The grant also will help offset the costs of small credit unions’ scholarships and travel. “Despite powerful evidence that the institute can help small credit unions survive and thrive, the cost of attending is beyond the means of many CDCUs--particularly those serving severely distressed communities,” Owens said. This is the ninth of 14 Innovation Grants to be approved by NCUF in 2008. Innovation Grants are made possible by investors in the Community Investment Fund.

WOCCU seeking presentations for World CU conference

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MADISON, Wis. (11/11/08)--The World Council of Credit Unions (WOCCU) has issued its formal call for presentations for the credit union movement's only global event, which will be held July 26-29 in Barcelona, Spain. Anyone who has a concept, technique or strategy that would improve credit union performance on a global scale should consider presenting that idea to nearly 2,000 of the world's top credit union leaders during WOCCU’s 2009 World Credit Union Conference. “Our goal is to uncover the best new ideas and the most creative thinking possible to help credit unions everywhere better face the mounting challenges posed by a struggling global economy,” said Pete Crear, WOCCU's president/CEO. “We know from experience that many of those ideas originate at the grassroots level and we want to tap that expertise for the good of credit unions and their members around the world.” Educational tracks at the conference will focus on four themes:
* Developing credit union movements; * Finance and operations; * Strategy and leadership; and * Sustainability.
Individual sessions will cover best practice applications, strategic development, innovative solutions and emerging issues. Credit union and other industry experts with innovative ideas and approaches to share are encouraged to apply for speaking opportunities at the conference. The session formats, 90 minutes in length, can take the form of lecture, panel discussion, benchmark or industry studies or case studies. Topic ideas will be evaluated in terms of appropriate educational content, originality and for subjects important to end-users. Topics previously presented at past World Credit Union Conferences will not be considered. A demonstrated experience in public speaking is preferred. The deadline for proposal submissions is Dec. 31. For more information or to submit a session proposal online, use the link. Companies not interested in presenting can still financially support educational sessions at prices beginning at $2,500 per session. For more information, please contact Sue Sabatke, WOCCU's conference and special events manager, at (608) 395-2089 or e-mail

Survey CUs still free checking leaders

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MADISON, Wis. (11/11/08)--Credit unions are still the free checking leaders--so much so that many banks have switched to free-checking institutions to remain competitive--says the just-released 2008-2009 Credit Union Fees Survey from the Credit Union National Association (CUNA). According to the survey, 80% of credit unions offering checking accounts provide at least one free checking account with no minimum balance requirement and no maintenance or activity fees, up from 65% in 2000. Another 7% offer free checking with other services or club memberships. However, banks have increased their offerings in this area to remain competitive. In 2000, 28% of banks offered at least one free checking account compared with 68% in 2007, according to Bankrate’s Checking Study. While it may appear on the surface that banks have realized the importance of offering customer-centered products and services, many financial institutions have turned to no-fee checking to increase the number of checking accounts they hold, to increase their earnings from fee income. Bank fees--including fees from commercial customers--represent nearly 50% of banks’ total income, according to current estimates. In comparison, only 12% of credit union income came from fees in 2007, according to CUNA reports and National Credit Union Administration Call Reports. “Traditionally, fees have been a point of differentiation between banks and credit unions as credit unions tend to focus on maintaining a minimum number and amount of fees in comparison to banks,” said Kristina Grebner, CUNA director of research and advisory services. “These practices and the reputation credit unions have as consumer advocates provide them with a competitive edge--and the media has really zeroed in on credit unions’ pro-consumer advantages in the current economic crisis.” Numerous fee types and account structures have been documented and analyzed for credit unions of all sizes in the following areas:
* Share draft/checking programs; * ATM and debit cards; * ATM surcharges; * Non-sufficient funds/overdraft protection programs; * Automated clearing house; * Foreign and domestic wire transfers; * First-mortgage applications and closing costs; * Member business loan applications and commitments; * Commercial real estate commitments; * Non-member check cashing; * Credit cards, and * Internet banking and bill payments.
The report reveals the percentage of credit unions that offer a certain product and the overall percentage that charge a fee for that product, and distribution of fee income by source. Also, the report includes the average, maximum, and range of amounts charged by credit unions, along with the number of free transactions before a fee is charged. The data tables are broken down by asset size and by region for peer comparison purposes. The report is available in both hard copy and PDF format. For more information or to order a copy of CUNA’s 2008-2009 Credit Union Fees Survey online, use the link.

CUs are well-capitalized safe harbors paper says

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FORT WORTH, Texas (11/11/08)--Credit unions nationwide have not been as severely impacted as other financial institutions by the economic problems hitting the U.S. this year, due to their conservative nature and relatively high levels of capitalization, according to a Monday article in the Fort Worth Business Press. Because credit unions are not motivated by profits, they don’t have the same pressures as stock organizations, Dick Ensweiler, president/CEO of the Texas Credit Union League, told the newspaper. Therefore, credit unions can take a long-range view as to what is in the best interest of their members and make future plans accordingly, he added. In talking to member credit unions statewide, Ensweiler found they are doing well for the most part because they are well-capitalized at an average rate of 11%, he said. Although a few credit unions in California and Florida went though some difficulties because real estate values are plunging, most credit unions are not heavily involved with mortgage loans, Ensweiler told the paper. However, those credit unions that were funding mortgages experienced trouble, he added.

CUNA Mutual Diversity key to non-interest Income

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SAN FRANCISCO (11/11/08)--Despite the economic challenges facing every aspect of the financial services sector, opportunities to survive and thrive through non-interest income continue to exist for credit unions, an industry analyst said.
Despite economic challenges, opportunities to survive and thrive through non-interest income continue to exist for credit unions, Bob Larson, financial support consultant for CUNA Mutual Group, told the California and Nevada Credit Union Leagues Friday at their annual meeting. (Photo provide by CUNA Mutual Group)
The key is minimizing exposure to one major source of non-interest income by diversifying--and maximizing--the income mix, according to Bob Larson, financial support consultant for CUNA Mutual Group. Larson delivered that message Friday to members of the California and Nevada Credit Union Leagues at their annual meeting. While Larson advocates a diversified approach to non-interest income, he acknowledged the lack of available choices and the potential changes to the three primary sources: non-sufficient funds and courtesy pay, debit card interchange income, and credit card interchange income. “One of the biggest concerns I see is action regarding the three primary non-interest income sources that could negatively impact your income,” Larson said. “I think the current economy has delayed action on these items, but they will resurface next year.” Larson referenced proposed legislation that would impact interchange income by giving merchants the ability to negotiate the fees they pay. Most credit union members and workers can remember the impact to their debit card interchange income in 2003 because of a Wal-Mart lawsuit, he said. “I worked for a credit union at the time, and we experienced a decrease of about $15,000 per month for an annual impact of $180,000,” Larson said. “The first step is to understand the impact to your income statement. What would happen if you had a 10% reduction in these primary income sources?” One way to ensure non-interest income sources are protected is to add more options to the mix, especially in light of the possible legislative challenges, he said. Developing a successful sales culture around credit protection, Guaranteed Asset Protection and debt protection products can grow income while expanding a credit union’s culture. “There are three key components for a successful sales culture--communication, accountability and tracking,” said Larson. “A credit union I worked with adopted this culture and continues to grow.” Larson suggested credit unions take advantage of the current environment by growing their real estate portfolios. Some credit unions are “picking up market share” by adding to their mortgage business. Other sources that don’t add expenses to the income statement include Accidental Death & Dismemberment, Members Auto & Home and Life, he said. “Some might not generate large amounts of non-interest income, but did you know that 10 of the largest auto insurance companies control 60% of the market, and eight of those 10 have a bank affiliation?” he said. “They’re successful using the insurance database to capture auto loans for the banks. So it impacts not only non-interest income, but also interest income as well.” Because identifying and securing non-interest income sources are critical to a credit union’s success, Larson advocates establishing an internal fee committee that examines possible sources and how to maximize them. “I know some people balk at this suggestion, but making it a priority can’t hurt,” he said.

NY Times notes CUs check-cashing venture

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NEW YORK (11/11/08)--The New York Times Sunday noted Kinecta FCU’s check-cashing program, which the credit union purchased from Nix Check Cashing of Carson, Calif., about one year ago. After the purchase, Kinecta acquired 53 Nix stores and brought 1,500 Nix customers into its membership (News Now Aug. 18). The goal of the purchase was to bring financial services to the underserved, the credit union said. “We were trying to understand why check cashers have been successful in underserved areas where banks haven’t,” Kinecta President/CEO Simone Lagomarsino told the newspaper. Kinecta concluded that most financial institutions didn’t understand low-income neighborhoods, the Times said. For the full article, use the link.

30 under 30 group shares 10 strategies

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SAN FRANCISCO (11/11/08)--The Filene Research Institute’s 30 Under 30 group of young professionals shared 10 strategies for credit unions at the California Credit Union League’s annual convention last week to better serve young adults.
Filene Research Institute’s 30 Under 30 group presented 10 strategies for credit unions to better serve young adults at the California Credit Union League’s annual meeting last week.
“The range of ideas and the rigor with which the groups prepared were absolutely fantastic,” said Mark Meyer, Filene CEO. The ideas were presented to executives and volunteers at the convention. Best in Show was awarded to Dustin Allen, Weber State CU, Ogden, Utah; Robin Hickey, First Financial FCU, Wall, N.J.; and Matthew Prosneski, Travis CU, Vacaville, Calif., for “Change Your Savings.”
Three individuals from Filene Research Institute’s 30 Under 30 group received a Best in Show award for their presentation, “Change Your Savings.” From left are Robin Hickey, First Financial FCU, Wall, N.J.; Dustin Allen, Weber State CU, Ogden, Utah; and Matthew Prosneski, Travis CU, Vacaville, Calif. (Photos provided by the Filene Research Institute)
“Change Your Savings” shows how a family can use a debit product to save for a child’s college education and cross-sell credit union accounts. Runners-up went to Mike Escudero, University of Southern California; Jill Jarman-Nowacki, Credit Union House, Washington, D.C.; Brandi Melo, Rocky Mountain CU, Helena, Mont.; and Chad Warneke, Oregonians CU, Portland, Ore., for “Cure Card.” Cure Card allows credit unions to offer one branded card that pays a portion of interchange income to a worthy cause. All 10 of the plans will be available at www.filene.org.

PCUA plants MBL info for landscapers

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HARRISBURG, Pa. (11/11/08)--The Pennsylvania Credit Union Association (PCUA) sent information about credit unions to the Pennsylvania Landscape and Nursery Association after staff heard landscapers and nursery owners were struggling to get loans for equipment. PCUA sent a letter mentioning credit unions and their desire to help businesses through member business loans (MBLs) and deposit services (Life is a Highway Nov. 11). As of June 30, 6% of Pennsylvania credit unions offered MBLs with an average loan size of $137,483. Nationally, credit unions originated $6.5 billion in business loans during the first six months of 2008. MBLs at credit unions are up 36% from what they loaned during the first six months of 2007, Credit Union National Association Chief Economist Bill Hampel told Business Week recently.

MDDCCUA CUs well-positioned for advocacy work

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COLUMBIA, Md. (11/11/08)--Credit unions in Maryland and the District of Columbia are well-positioned for advocacy work, said the Maryland and District of Columbia Credit Union Association (MDDCCUA)’s political consultant, Jeff Trammel, during a conference call hosted by MDDCCUA last week. Trammel hosted the call with MDDCCUA President Mike Beall, and advocacy staffers Jennifer Porter Gore and Aaron Glaser. The call focused on the outcome of this year’s elections and their effect on credit unions. Credit unions are in the enviable position of having key leaders in Congress, and have a good track record of attaining 100% for regulatory reform legislation in the past Congress, he added (Focus Newsletter Nov. 10). However, “there is a new ball game, and a different set of issues. The economy will be the prism through which everything else is seen,” Trammel said. All seven Maryland incumbent members of the House of Representatives were re-elected to their seats. Rep. Eleanor Norton (D-D.C.) also was re-elected. Rep. Frank Kratovil (D) was elected to the House of Representatives in Maryland’s 1st Congressional District (The New York Times Nov. 8). Credit unions will have to educate him, Trammel said. With changes in Congress, credit unions will have to “reset” discussion with lawmakers and staff, Trammel said. They also will have to “put the shoulder to the wheel” to educate the 111th Congress, he added.