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CU System briefs (11/16/2012)

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  • WASHINGTON (11/19/12)--The Internal Revenue Service (IRS) is warning consumers of a new tax scam that mimics its e-Services online registration page on its website, www.irs.gov. The actual IRS e-Services page offers Web-based products for tax preparers, not the general public. The phony web page looks almost identical to the real one, said the IRS, which added it receives many reports of fake websites like this. "Criminals use these sites to lure people into providing personal and financial information that may be used to steal the victim's money or identity, said the alert. Credit unions can remind their members that IRS' official site address ends in .gov--not in .com, .net, .org, or other designations …
  • ST. LOUIS (11/19/12)--Suspicious staffers at a credit union in St. Louis helped foil a scam after a woman allegedly tried to cash a dead man's tax refund check by posing as the man's representative, said the St. Louis Post-Dispatch (Nov. 3). Patrina Rochelle Taylor, 44, of Creve Coeur was charged in the incident. The report did not name the credit union. The $7,497 check was issued to an "Ann Hoang" as a personal representative of "Billy Mobley." Both Hoang and Mobley are deceased, according to Internal Revenue Service (IRS) databases. Authorities believe the incident may be linked to a scheme in which dozens of returns worth hundreds of thousands of dollars in refunds were filed under the names of recently deceased people. IRS is warning financial institutions and businesses to beware of people trying to cash Treasury checks payable to someone else or who engage in suspicious activity. Last year, about 940,000 returns used identity theft to claim or try to claim roughly $6.5 billion in refunds. Law enforcement authorities have filed charges against several groups operating similar schemes …
  • MONROE, Mich. (11/19/12)--Sharon Broadway, 61, of Toledo, Ohio, pleaded not guilty Thursday to embezzlement and racketeering stemming from the theft of $2.1 million from United Catholic CU in Temperance, Mich. Broadway was the manager, secretary, board member and sole employee of the credit union, which was closed on Aug. 9. The National Credit Union Administration was appointed as receiver. The embezzlements allegedly occurred since 1985 under a complex money laundering scheme involving multiple aliases and forged checks to hide the thefts. Broadway is accused of using the money as personal funds. The theft was discovered during a routine examination by the Michigan Office of Financial and Insurance Regulation, said a Toledo newspaper (The Blade Nov. 16). News of the charges prompted the Michigan Credit Union League to reassure members and the public. "Members of credit unions across Michigan should rest assured that their money is safe and sound, and that credit unions are well-run, sophisticated financial institutions that typically have adequate checks and balances to avoid this type of event," said Michigan Credit Union League & Affiliates CEO David Adams. "Credit unions and regulators go to great lengths to ensure that proper safeguards are in place so our members' money is safe. Our association stands ready to assist authorities in any way we can to get to the bottom of this incident, which is an aberration, and to ensure that it doesn't happen again."  …
  • PORTLAND, Maine (11/19/12)--Robert Walker, long-time manager/treasurer Monmouth (Maine) FCU, died last week at the age of 92, according to the Maine Credit Union League (Weekly Update Nov. 16). He spent 50 years serving the credit union, including 30 years as manager. After he retired, he served on the credit union's board of directors. He also served on the league's board. In 2009, he received the Alexander Ferguson Award for Outstanding Credit Union Volunteer. In 2002, Monmouth FCU's new facility was dedicated to Walker and his wife, Jean, and named the Walker Building …

Dodge Central CU to merge into Landmark CU

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NEW BERLIN, Wis. (11/19/12)--Two Wisconsin credit unions have announced they plan to merge, pending regulatory approval and a vote by the merged credit union's members.

Dodge Central CU, a $52 million asset credit union based in Beaver Dam, will merge with Landmark CU, a $2 billion asset credit union in New Berlin. The boards of both credit unions have already approved the merger. Dodge Central CU's members will also vote on the proposal.

The credit unions said they expect the merger to be completed Dec. 31, with Dodge Central's member accounts combined into Landmark's computer system in the spring or summer of 2013.

"This merger allows us to strategically expand our branch locations and better serve all members in the area," said Landmark President Jay Magulski. "We continue to execute on our brand promise, which is to bring consistent value and convenience to our members," he said.

"We do this with great rates on loans and deposits and excellent customer service.  And, we continue to offer free checking accounts and products and services with no or low fees. We work hard so our members can truly benefit from the value that only a credit union delivers," Magulski added.

Dodge Central CU President/CEO Barbara Campbell will join Landmark CU as a regional president and continue working from the Beaver Dam location. "Our two credit unions share a belief in excellent customer service as well as a focus on employee satisfaction and a commitment to community involvement," she said, noting that Dodge Central members would benefit from the "expanded list of products, services and locations that Landmark brings."

Landmark will add locations in Beaver Dam, Juneau, Mayville and Fall River, and the merger will widen its charter to include Columbia, Marquette and Fond du Lac counties.  Dodge Central CU also has an in-school branch at Beaver Dam High School.

Dodge Central has 9,750 members and 33 employees. Landmark has 489 employees who serve more than 196,000 members at 25 locations in Southeastern Wisconsin. The merger will bring its locations up to 30.

GCUA Georgians surveyed wont increase holiday spending

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DULUTH, Ga. (11/19/12)--Most Georgia residents surveyed plan to spend the same or less than they did a year ago on holiday shopping, according to the most recent poll conducted by Georgia Credit Union Affiliates (GCUA).

The survey revealed:

  • 70.1% of Georgia respondents plan to use cash this holiday season;
  • 12.4% plan to pay for most purchases with a credit card, down from 15.9%  last year;
  • 57.5% report their holiday spending will be at or below $500;
  • 48.2% plan to spend the same as in 2011; and
  • 48.5% plan to spend less than they did a year ago.
Retail sales for the holiday season are expected to grow 4.1%, which is less than the 5.6% increase experienced in 2011, according to the National Retail Federation.

However, growth projections may not reflect an accurate picture for most U.S. citizens. A survey conducted by American Express and the Harrison Group found that while the top 10% of the population will spend nearly 22% more on gifts than they did last year, overall gift giving will be down.

Holiday loans have been in high demand for the past several years, and Grace Lollar, president/CEO of Richmond Community FCU in Gracewood, Ga., expects this year to be no different, she told GCUA.

"Wages have not risen for most of our membership, but the cost of living has gone up," Lollar said. "Most of our members rely heavily on holiday loans to pay for their purchases."

The trend of scaling back will continue for most people, Lollar added. Consumers seeking to trim their holiday spending should immediately start making a "Santa's list," she added.

"Write down everyone you will be shopping for and set a dollar amount for each gift," Lollar said. "Then do your level best not to exceed those amounts."

Consumers will have a difficult time staying within their budgets due to rising costs of consumer goods, Lollar said. She encouraged people to be proactive next year and save a little at a time in a Christmas club account or other special savings account.

"Even if you save only a minimal amount each paycheck, it will add up over the course of the year," she concluded.

The Consumer Federation of America and the Credit Union National Association will release results of their annual national holiday spending survey on Wednesday.  See related story: "CFA-CUNA to reveal consumers' 2012 holiday spending plans this week."

CUAid disaster relief collections total 185K

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MADISON, Wis. (11/19/12)--More than $185,000 has been raised for disaster relief by credit unions and credit union-related organizations through CUAid,  the credit union movement's Disaster Relief Fund, the National Credit Union Foundation (NCUF) announced Thursday.

"This is the result of donations ranging from $5 to $10,000 demonstrating the collective power and philosophy of the credit union movement," said Christopher Morris, NCUF director of communications. 

In New Jersey, the state Department of Banking and Insurance (NJ DOBI) is requesting information about how state credit unions are responding Hurricane Sandy, said the New Jersey Credit Union League .

Alloya Corporate FCU, Albany, N.Y., is providing a special fixed term loan, below market interest rates to its members affected by Hurricane Sandy, according to the New Jersey league (The Daily Exchange Nov. 16).

To date, two member credit unions have taken advantage of the special rate, Alloya said.

The National Credit Union Administration (NCUA) and other federal financial regulators have urged financial institutions to "consider all reasonable and prudent steps" to help members and customers impacted by Hurricane Sandy (News Now Nov. 15).

The Federal Reserve, the Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency joined the NCUA in releasing supplemental guidance to their Oct. 30 statements about financial institutions and borrowers affected by the storm.

Bankruptcy filings up 16 in October

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ALEXANDRIA, Va. (11/19/12)--Total U.S. consumer bankruptcy filings in October increased 16% from September, the American Bankruptcy Institute (ABI) said.

October bankruptcy filings--commercial and noncommercial--totaled 101,278, up from the 87,522 filings in September, according to Epiq Systems.

The 96,498 total noncommercial filings for October represented a 16% increase from the September's total of 83,493, ABI said. Commercial filings for October totaled 4,780--a 19% increase from 4,029 filings in September.

Commercial Chapter 11 filings also increased with 704 filings last month-- a 3% percent rise from the 681 in September.

Despite the uptick, total bankruptcy filings for the year remain on pace for about 1.2 million new cases, the lowest total since before the financial crisis, said ABI Executive Director Samuel Gerdano (SubPrimeNews.com Nov. 7) .

He said sustained low interest rates and weak spending as households deleverage are helping to keep bankruptcy filing rates down.

October's 101,278 total bankruptcy filings were a 9% decrease from the 111,533 filings registered in October 2011, ABI said.

Total commercial filings for October were 4,780, or a 16% decrease from October 2011. The commercial Chapter 11 filing total of 704 constituted a 23% drop from last October.

Consumer filings for October marked a 9% drop from the October 2011 noncommercial filing total of 105,814.

The average nationwide per capita bankruptcy-filing rate through the first 10 months of 2012 was 3.96 (total filings per 1,000 per population). Average filings per day in October totaled 3,267, a 9% decrease.

HR metrics topic of CUNA HRTD Council paper

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MADISON, Wis. (11/19/12)--The use of human resources (HR) metrics by credit unions is attracting more interest as a means to assess the impact of an organization's "human capital" on operations and financial performance, and as overall strategic development support, according to a new white paper from the CUNA HR/TD Council. 

The paper, "HR Metrics: The Numbers in Support of Strategic and Operational Initiatives," discusses how HR professionals may benefit by learning how to gather data and analyze it through metrics, which formulas are most useful to achieve specific aims, and how using metrics fits into the strategic vision and development of the corporate culture.

It also makes a case for collecting and analyzing crucial data to measure the impact of the credit union's most essential aspect: its employees. It presents results of a recent survey on how credit union HR executives are using metrics, examples of common formulas, and case studies of credit unions in various stages of putting metrics to work in their organizations. 

In May, the council surveyed credit unions on how they are using quantitative and qualitative assessments of their human capital. The survey garnered 64 responses from current council members and points to some industry trends.

Among the results:

  • Asked to rank their experience and expertise using HR metrics on a 1–10 scale, with 1 representing "no experience/expertise" and 10 "extremely experienced/expert," 64% of respondents rated their expertise as a five or lower.
  • Asked how important collection and analysis of HR metrics was to their organization, with 1 representing "not at all important" and 10"extremely important;"  59% rated metrics at a six or higher.
  • Roughly 85% of those surveyed said turnover was the metric they currently tracked or used. Other leading choices were involuntary turnover rate and voluntary turnover (63% each), cost of benefits (59%), average length of employment (51%), employee satisfaction (44%), promotions (37%), absenteeism (34%), transfers (34%), and employee demographics (32%).
  • Most respondents (81%) said they had used HR metrics professionally for 10 or less years
  • About half reported using either internal or industry benchmarks to monitor performance.
  • In terms of how HR metrics are shared, 28% said the results stay in the HR department,63% share with the CEO, 39% with the rest of the C-suite [the most important company senior executives], 25% with the board, and 26% with managers with reporting staff.
  • Over half of respondents calculated metrics and ran reports monthly; 40% also generate annual reports, 37% go with quarterly reports, and 26% produce them "as needed."
  • Eighty-seven percent of respondents produce their HR metrics without support from specialized software or vendors.
 To obtain the paper, use the link.

CU board member is Maine House minority leader

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PORTLAND, Maine (11/19/12)--Rep. Ken Fredette (R), a board member at Sebasticook Valley FCU, Pittsfield, Maine, has been selected as the new minority leader of the Maine House of Representatives.

Fredette, who was elected to his second term in the Nov. 6 General Election, was a strong advocate and leader on credit union issues during the last legislature, according to the Maine Credit Union League (Weekly Update Nov. 16).

"Having someone who so intimately understands issues of importance to credit unions and the impact of legislation on credit union operations is a real plus when we discuss pieces of legislation," said league President John Murphy. "Ken was a go-to leader on many of our issues in the last legislature, and we look forward to working with him in his new leadership position."

Of the five leaders selected in the Maine house, four were endorsed by the league. Rep. Alexander Willette (R) was selected as assistant house minority leader. Rep. Mark Eves (D) was selected as speaker of the house. Rep. Seth Berry was selected as house majority leader.

CUs look to young members to counter aging population

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ALBANY, N.Y. (11/19/12)--Three New York state credit unions are appealing to Gen Y consumers with strategies that combine technology, location, products and special programs. 

The credit unions are employing the strategies to counteract the effects of an aging population. Nationally, the average credit union member is 47 years old. (See related News Now story, Aging members prt of national trend.)

In recent years SEFCU, based in Albany, has opened branches at the University at Albany, Skidmore College in Saratoga Springs, Rensselaer Polytechnic Institute in Troy and Binghamton University (The Business Review Nov. 16) .

Students who visited branches on Oct. 25 wearing their school colors were eligible to win iTunes gift cards

Sunmark FCU, with $372 million in assets, Latham, N.Y., does not have any on-campus branches, but it has joined a shared branching network and has launched a private student lending program. The lending program has first-year volume of $1 million, according to CEO Bruce Beaudette told the Review.

CapCom FCU, with $972 million assets, Albany, also offers a College Bound program for prospective students. The program includes two college planners who work with students as a free member service.

CapCom offers a youth program it recently took over from First Niagara Bank. Through the program, the credit union accepts deposits from elementary school students. The credit union had 4,000 youth accounts through the end of September, said Paula Stopera, president/CEO of CapCom FCU.

N C league honors retiring state regulator

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RALEIGH, N.C. (11/19/12)--Credit unions and representatives of the North Carolina Credit Union League were among those honoring state regulator Jerrie K. Jay, who will retire at the end of the year after 17 years of service as the state's Administrator of Credit Unions.

North Carolina Credit Union League President/CEO John Radebaugh, left, presents state Administrator of Credit Unions Jerrie K. Jay with a state flag that flew over the state Capitol in appreciation for 17 years of service. Jay will retire on Dec. 31. (Photo provided by the North Carolina Credit Union League).
Credit unions, the league and staff of the North Carolina Credit Union Division gathered on Nov. 6 to honor Kay at a dinner, said the league (The Weekly Conversation Nov. 9).

"The dinner was an opportunity to say thank you," said John Radebaugh, league president/CEO. "North Carolina has one of the strongest and most progressive state charters in the country, and Jerrie has stood watch and fought for state charters for the past 17 years. We appreciate her work and wish her well in retirement."

Jay noted she is "proud of North Carolina credit unions--large and small. The managers and volunteers work tirelessly to enhance the lives of the citizens of North Carolina.

"North Carolina is fortunate to have bright, energetic leaders dedicated to working in the best interests of the member-owners," she said, noting she is "proud of the legacy I leave to future administrators."

The Administrator of Credit Unions is appointed by the state Secretary of Commerce. No replacement has been named yet.

Earlier this year the state regulator and the National Credit Union Administration (NCUA) expressed differences about the disclosure of a credit union's CAMEL rating by the credit union and the use of dual examinations for state chartered, federally insured credit unions. NCUA treats the CAMEL rating as confidential information. The state regulator authorized the credit union, State Employees' CU, to release its state-issued rating. NCUA discontinued coordinating exams with the state regulator and opted to begin separate exams. The league has been active in seeking a dialogue with both regulators on the matter (News Now Feb. 7).