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Young adults goals disconnected from finances

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MADISON, Wis., and NEW YORK (11/21/08)--Young adults are finding financial security elusive, with 91% of those surveyed reporting they have financial goals while only 53% report sticking to a monthly budget. While 62% say they have thought about their own retirement, nearly as many (61%) say their retirement savings is behind schedule. In fact, 42% of young adults surveyed give themselves a D or F on how well they are saving. The reports are from a study by the American Savings Education Council and AARP in which Gen Xers (ages 28 to 39) and Gen Yers (age 19 to 27) define "financial security." The findings present an opportunity for credit unions to assist these groups, according to Jon Haller, director of market research at the Credit Union National Association (CUNA). "Young adults and kids have big plans for life, with big goals, but they haven't done anything to connect to their goals," Haller told News Now. "There's a disconnect, that feeling of 'I'm OK' when they're actually not." In the survey, when asked to define "financial security":
* 22% of respondents defined it as being able to make ends meet and not living paycheck to paycheck; * 19% said it means having enough money leftover to save for emergencies or a rainy day; * 16%, being able to simply live comfortably; * 15%, not having to worry about their finances; and * 13%, being able to weather hard times and deal with the unexpected. * 9%, being able to save for retirement, afford retirement, or maintain one's lifestyle in retirement; * 6%, being able to provide for ones' family with financial security; and * 5%, having leisure, entertainment or fun.
"From an educational standpoint, they know they should be saving early and budgeting, but they're not getting there," said Haller. Credit unions can help provide the financial education, financial literacy and information about retirement planning, he added. "As far as marketing to young adults, you have to convince them of the value of saving and budgeting. Financial security is the message that resonates with them," Haller said. "Start now to educate them early. Make that concern about security an opportunity to educate them. Today's kids are skeptical about whether Social Security and Medicare will be there when they need it. This makes it even more important for them to save for their future." Other findings include:
* Gen Yers (64%) are more confident in being able to accumulate enough for a comfortable retirement than members of the older Gen X (54%). * Young Americans are more likely to say they know more about their iPod (40% very knowledgeable) than about how to file their taxes (26%), buy a home (21%) invest outside of the workplace (15%); and save for retirement (15%).
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What CUs can do to thwart robberies

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MADISON, Wis. (11/21/08)--With a troubled economy and the arrival of the holiday season, what can credit unions do to thwart robberies in an environment in which crime sometimes goes up? The biggest key is awareness, an industry crime expert said. The fourth quarter is probably the most active time for credit union robberies in some years, but not always, Vince Wagner, risk manager for CUNA Mutual Group, told News Now. So far in the fourth quarter of 2008 and the year as whole, credit union robberies are not significantly different than other times of the year--and may even be a little down, Wagner said. Credit union robberies reported to CUNA Mutual the past few years were:
* 2005--338 robberies; * 2006--434; * 2007--349; and * 2008--274 (through Nov. 19).
“Robbery is something a credit union has to be aware of all year long,” Wagner said. “Awareness is the most important factor. Credit unions need to train employees on what to do before, during and after a robbery. Credit unions should have annual training, at a minimum, and then frequent updates and reminders on how to deal with robberies.” Deterrence is also important. For instance, having a sign on the credit union door that reads “No hats, no sunglasses, no hoods” can help deter robberies, Wagner said. Other deterrents include greeting people as they enter the credit union and having queue lines--which can result in more control of the situation if a robber has to stand in line for awhile, he added. Also, going over robbery policies and procedures with tellers and other personnel helps. “For instance telling employees to lock the door after the robber leaves, so he or she doesn’t come back into the credit union,” Wagner explained. “You need to regain control of the situation as soon as you can after a robbery.” Another factor is checking the placement of security cameras so that different angles for pictures of robbers can be viewed to better identify them, Wagner added. The FBI released its most recent crime statistics on Oct. 17, indicating that for the first quarter of 2008, there was a minor increase in financial institution robberies with 1,604 total robberies nationwide--34 more robberies than occurred during the last quarter of 2007. In the first quarter, there were 132 robberies of credit unions, nine burglaries, and zero larcenies, according to FBI statistics. Overall, most violations at financial institutions occurred on Friday, the FBI said. Regardless of the day of the week, violations between 9 a.m. and 11 a.m. were the most common. The fewest incidents took place on Sunday.

IDow JonesI CUs out front in aid to homeowners

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NEW YORK (11/21/08)--Credit unions have been out in front of the curve, being aggressive in helping troubled homeowners for the past several months, while the bigger lenders have just increased their efforts in recent weeks, according to a Thursday Dow Jones article. Since last winter, credit unions have been changing their terms on home loans in states that have been most impacted by the mortgage crisis, the Dow Jones said. The National Credit Union Administration (NCUA) this week proposed making more cash available to homeowners in need, the article reported. NCUA’s proposal would benefit everyone, Bucky Sebastian, president, GTE FCU, Tampa, Fla., told the news service. Although not a complete solution, the proposal would result in people staying in their homes, and credit unions not having to repossess them, he added. Ent FCU, Colorado Springs, Colo., is helping members who have committed to staying in their homes by modifying their loans--usually for two years, Casey Perkins, Ent director of collections, told Dow Jones. The credit union keeps track of the loans and plans to re-evaluate them after two years, Perkins added. Ent has restructured about 150 home loans with $14.6 million in mortgages, he said. Credit unions have the cash necessary to modify home loans, because they have made very few subprime loans to risky borrowers, Bill Hampel, chief economist for the Credit Union National Association, told Dow Jones. Credit unions also are motivated to help because they are being impacted by some of the “collateral damage” caused by declining home prices, and by members losing jobs or falling behind on their loan payments provided by other lenders, Hampel added. “It helps the borrower, but the losses of foreclosing on a mortgage are big, and it’s in the interest of the credit union to help,” Hampel said.

CU-sponsored home makeover show airs on ABC

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DUBLIN, Ohio (11/21/08)--Directions CU, Sylvania, Ohio, was the lead sponsor for a project to give a Toledo family a new home on Sunday’s episode of “Extreme Makeover: Home Edition,” which aired on ABC. Parents Aaron and Jackie Frisch had three children, and adopted five Haitian boys and three boys from inner city Toledo out of their passion to help others. Two years ago, Jackie was diagnosed with a connective tissue disorder that caused her to undergo five surgeries, three strokes and partial paralysis, which she overcame, said the Ohio Credit Union League (eLumination Newsletter Nov. 19). Jackie quit her job as a counselor because of her health, and she and Aaron were unable to keep up with repairs on the family’s home. Aaron works as a firefighter. Directions CU provided hats for volunteers working on the Frischs’ new home. It also sold hats at the job site and other events, and donated the proceeds to the family. Directions also collected donations from the community and held a fundraiser for the family.

Robbery suspect in CU holdup commits suicide

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YOUNGSTOWN, Ohio (11/21/08)--A robbery suspect died from a self-inflicted gunshot wound during a standoff four hours after a Lordstown, Ohio, credit union was held up Wednesday. The suspect, Donnell R. Weekley, 25, allegedly was one of three men who entered Cavalier FCU at about 2:40 p.m. (NewsNet5.com Nov. 20). One man was armed with a rifle and fired a shot. No one at the credit union was injured. Police said the suspects fled to a house on Breaden Street. Weekley shot himself about four hours later after a Federal Bureau of Investigation violent crimes task force surrounded the house (Vindy.com Nov. 20). The U.S. Marshals Service had been looking for Weekley for two days, with a warrant for felonious assault unrelated to the robbery, police said.

California CUs report update on wildfire impact

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RANCHO CUCAMONGA, Calif. (11/21/08)--Several California credit unions reported to the California Credit Union League that members lost their homes in recent wildfires. The fires affected Los Angeles, Orange, Santa Barbara and Riverside counties. Tens of thousands of California residents were forced to evacuate their homes (News Now Nov. 18). Kinecta FCU, Manhattan Beach, told the league that one member lost a home in a fire that hit the Montecito/Santa Barbara area. The credit union is working with the member, Tina Ramos-Ingold, California league public affairs coordinator, told News Now. SchoolsFirst FCU, Santa Ana, said it heard from two members who lost homes. The credit union is working with the members individually. SchoolsFirst also placed information on its website to let members know that assistance is available, Ramos-Ingold said. Wescom CU, Pasadena, is offering members emergency fire loan assistance. The personal, unsecured loan is available up to $5,000 with no payment due for 90 days. The loan has a fixed interest rate of 8.90% with interest waived the first 90 days. The maximum term is 60 months, the credit union said on its website.

Michigan CUs use grant to stop foreclosures

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WASHINGTON (11/21/08)--The Michigan Credit Union League (MCUL) is leveraging a $43,828 Innovation Grant from the National Credit Union Foundation (NCUF) into a multi-media foreclosure prevention campaign. Michigan has the third-highest foreclosure rate in the U.S. “Michigan's economy faces a unique combination of challenges due to auto employee layoffs, high unemployment, and rapidly decreasing housing values,” said MCUL President Dave Adams. “Many residents in danger of foreclosure hold subprime mortgages with little or no equity and high interest rates,” he added. “Because they have not built significant savings and assets, low-wealth families are struggling to pay their mortgages and retain their homes.” Beth Troost was hired in February as the league’s first financial education coordinator. Many credit unions are responding to this crisis by providing financial education seminars and individual counseling, she said. But Troost pointed out that “credit unions are frustrated with the small numbers of people they are reaching. While the foreclosure problem is predicted to affect an abnormally large portion of the population for the next three to five years, the number of consumers reached by seminars and counseling is comparatively low.” She offered several reasons: “Many people experiencing challenges that affect their mortgage payments may wish to remain anonymous and are unwilling to attend public seminars. Other reasons for low attendance may be time conflicts, location challenges, and lack of awareness.” Unfortunately, Troost said, there is an “abundance of misleading and fraudulent foreclosure avoidance information” circulated by for-profit interests in many communities. “Community members need a convenient avenue to get trustworthy information and resources to enable them to improve their financial situation and avoid foreclosure,” she added. MCUL will partner with credit unions, Michigan State University (MSU) Extension, and United Way to produce and distribute an educational video, 8,000 DVDs, and online resources to reach more Michigan homeowners. The video will focus on:
* Understanding why consumers struggle to make housing payments; * Implementing money management techniques--such as keeping track of spending, creating spending plans, and prioritizing debt; * Retaining homeownership if current payments cannot be made (by modifying loans, attending housing counseling, and/or applying for reverse mortgages); and * Relinquishing homeownership if necessary but without foreclosing.
“More credit unions than ever are investing in the Community Investment Fund,” said NCUF Executive Director Steve Delfin. “Yet here's the paradox--even though CIF balances reached an all-time high, the fund has returned a much lower percentage of grant dollars in 2008. This is due to federal interest rate cuts from January through October. “So especially during these challenging economic times, we thank all 650-plus CIF investors, the NCUF Board and Grants Committee for allowing us to maintain our $600,000 in Innovation Grant commitments and reward credit unions serving low-wealth households,” he added.

Holiday spending survey to be released Monday

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WASHINGTON (11/21/08)--The ninth annual consumer survey on holiday spending plans and concerns about debt levels will be released Monday by the Consumer Federation of America (CFA) and the Credit Union National Association (CUNA). CFA Executive Director Stephen Brobeck and CUNA Chief Economist Bill Hampel will meet with the media at 10 a.m. EST Monday at the National Press Club to release the data from the survey, which was conducted Nov. 6-8. This year's data will show that a record number of survey respondents anticipate spending cutbacks. For the first time, the survey asks those who expressed their intent to spend less why they plan to do so. Overall, the survey results provide fresh findings on consumer attitudes toward debt and their holiday spending plans. CFA and CUNA representatives will discuss their complete survey findings, including:
* The latest look at consumers’ holiday spending plans; * Consumer concern about credit cards and paying off the full monthly balance; * How the findings compare with consumer attitudes at this time last year; * How consumer attitudes have changed over the past nine years; and * New advice for managing holiday spending.

CU System briefs (11/20/2008)

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* MONTEREY PARK, Calif. (11/21/08)--E1 Financial CU, at the invitation of California Gov. Arnold Schwarzenegger's office, attended the Governor's Conference of Small Business and Entrepreneurship Tuesday, according to the $369.8 million asset credit union. The conference assembled innovative entrepreneurs and small businesses to create a forum for ideas, inspiration and solutions to drive the state's critical entrepreneurial economy forward. Afterwards, the credit union met with the governor's staff to discuss the financial needs of the small businesses and entrepreneurs, and to present economic opportunities and solutions offered by the credit union industry. Pictured speaking at the conference is Schwarzenegger. (Photo provided by E1 Financial CU) … * MONTEREY PARK, Calif. (11/21/08)--During the California Governor's
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Conference of Small Business and Entrepreneurship Tuesday, E1 Financial CU met with the Latin Business Association (LBA), the sponsor of the luncheon at the conference. E1 Financial met with the LBA Chairman/CEO Ruben Guerra and LBA members to explore a future partnership to support small businesses. From left are: front row: Larissa Ordaz, operations manager, LBA; Chris Lamb, executive vice president/chief operations officers at E1 Financial CU; Guerra; Araceli Gonzalez, deputy director, community liaison, Office of Governor Arnold Schwarzenegger; and L.J. Tarman, vice president, marketing at E1 Financial; back row, third from left, is Dennis Gutierrez, community relations liaison at E1 Financial (Photo provided by E1 Financial CU) … * COLUMBUS, Ohio (11/21/08)--The Ohio Credit Union League has added Twitter.com as another way to share credit unions' work with media and consumers. Twitter.com is an information-sharing website in which participants can follow one another with brief (not more than 140 characters) news items and updates called "tweets." Patrick Harris, league media relations director, created a profile for Ohio's credit unions and will post the items on Twitter (eLumination Newsletter Nov. 19) ... * COUNCIL BLUFFS, Iowa (11/21/08)--A man eating a sandwich robbed United CU in Council Bluffs Tuesday. Police said he walked in and demanded money from a teller. He took an undetermined amount before fleeing. Witnesses said he appeared to be eating a sandwich during the incident (Omaha World-Herald Nov. 20) … * ARTESIA, N.M. (11/21/08)--Services were held Thursday in Artesia, N.M., for Warren T. Johnston, the founder of Artesia CU. Johnston, 87, died Monday in Artesia. A former public school teacher, he was one of a group of teachers who formed what was then called Artesia School Employees CU in 1955. Johnston was treasurer/manager of the credit union. His wife Shirleen worked with him, and his son Ronnie took over the credit union in 1991. Johnston remained a credit union advocate all his life and was the recipient of the Mel Romero Outstanding Professional Award from the Credit Union Association of New Mexico. The family suggests memorial contributions be made to the New Mexico Credit Union Education Foundation …

CO-OP ready for holiday shared-branch rush

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ATLANTA (11/21/08)--CO-OP Shared Branching is ready to handle the holiday shared branching rush, the network said. In 2006 and 2007, CO-OP saw December transactions increase by about 180,000 each year over the January to November monthly averages. Average monthly transactions year-to-date have risen by 161,000 and 232,000 compared with similar timeframes in 2006 and 2007. The increase is due to trouble in the economy and consumers’ awareness and trust in credit unions, said CO-OP Shared Branching President/Chief Operating Officer Carroll Beach. Members can prepare for holiday traveling by downloading all CO-OP ATMs and shared-branching locations to their global positioning system devices. They also can locate access points by phone, Internet or text. Credit Union Service Corp. and CO-OP Financial Services combined to form CO-OP Shared Branching, which provides 28,000 surcharge-free ATMs to participating credit union members.