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CU System briefs (11/23/2010)

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* SOUTH HAVEN, Mich. (11/24/10)--Kalamazoo, Mich.-based Consumers CU's South Haven branch has been voted the Best of South Haven Area 2010 in the Bank/Credit Union category by area citizens in a vote conducted annually by the South Haven Tribune. This is the third consecutive year the $348 million asset credit union has received the award … * HARRISBURG, Pa. (11/24/10)--Boeing Helicopters CU, based in Ridley Park, Pa., has named Philip Travaglini as its new CEO, to be effective Monday, according to the Pennsylvania Credit Union Association (Life is Highway Nov. 23). Travaglini has experience as a financial executive with a banking bankground, said Guy Ferranti, president and board chairman at the $121.7 million asset credit union. Travaglini succeeds interim CEO Cheryl Altieri … * BOULDER CITY, Nev. (11/24/10)--William "Bill" Ferrence, CEO of Boulder Dam CU, died Sunday after a long illness. He was 67. Ferrence was manager of the Boulder City, Nev., $490.3 million asset credit union for nearly 36 years. Funeral arrangements are pending, according to the Boulder City Review (Nov. 22) …

Banks report six-fold increase in 3rd-quarter profits

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MADISON, Wis. (11/24/10)--Commercial banks and savings institutions insured by the Federal Deposit Insurance Corp. (FDIC) reported an aggregate profit of $14.5 billion in the third quarter of 2010, a $12.5 billion improvement from the $2 billion the industry earned in the third quarter of 2009. This could have good implications for credit unions, a Credit Union National Association (CUNA) economist said. This is the fifth consecutive quarter that bank earnings have registered a year-over-year increase, the FDIC said in Tuesday release. “In dollar terms, the profits are substantially higher than they were in the recent past,” Mike Schenk, CUNA vice president of economics and statistics, told News Now. “But total profits at banks have been severely depressed. For 2008 and 2009, banks essentially earned nothing. So the big increase in dollar terms was a big increase off a very small base. “And the earnings this year, while substantially a higher than 2008 and 2009 remain significantly lower than the earnings recorded before the start of the recession--and more importantly--substantially lower than the long-term norm,” he added. Bank return on investment, or ROA (net income as a percentage of average assets), was 0.81% in 2007, plummeted to 0.03% in 2008, and remained severely depressed at 0.07% in 2009, Schenk said. Annualized earnings in 2010 have rebounded to 0.56%. That level of earnings remains less than half the average earnings rate that banks recorded in the decade before the start of the recession, he added. Why are bank profits up? "Due to a marginally improving economy, the loss provisions are not as high as in the past,” Schenk explained. “Importantly, the decline in bank loan balances that have been obvious in the recent past look like they have largely abated; loan demand seems to be picking up. “So if that’s happening in the banking sector, that will likely happen in the credit union sector,” he continued. “We are expecting a release of National Credit Union Administration data within the next two weeks and would then be able to confirm whether this is actually happening.” The report does not say what percent of the new profits comes from new fees. Some banks have begun charging their customers new fees to counteract the costs of regulation, and have been criticized for doing so at a time consumers are struggling with the economy. “The industry continues making progress in recovering from the financial crisis. Credit performance has been improving, and we remain cautiously optimistic about the outlook,” said FDIC Chairman Sheila C. Bair. “Lower provisions for loan losses are driving bank earnings by allowing a larger share of revenues to reach the bottom line. “[However], at this point in the credit cycle, it is too early for institutions to be reducing reserves without strong evidence of sustainable, improving loan performance and reduced loss rates,” Bair added. “When it comes to the adequacy of reserves, institutions should always err on the side of caution.” The FDIC said the number of institutions on its “Problem List” rose from 829 to 860. However, the total assets of “problem” institutions declined from $403 billion to $379 billion. The number of “problem” institutions is the highest since March 31, 1993, when there were 928. Forty-one insured institutions failed during the third quarter, bringing the total number of failures for the first three quarters of the year to 127. In 2010, there have been 149 bank failures to date. Bank’s Deposit Insurance Fund (DIF) balance also improved for the third consecutive quarter. The DIF balance--the net worth of the fund--improved from a negative $15.2 billion to a negative $8 billion during the third quarter. The improvement stemmed primarily from assessment revenues and from a reduction in the contingent loss reserve. This reserve, which covers the costs of expected failures, declined from $27.5 billion to $21.3 billion during the quarter. While part of the decline reflects the removal of amounts reserved for banks that failed, a part also reflects lower costs for future failures. The FDIC said its liquid resources--cash and marketable securities--remained strong. Liquid resources stood at $43.7 billion at the end of the third quarter, essentially unchanged from the second quarter. “While we expect demands on cash to continue, our projections indicate that our current resources are more than enough to resolve anticipated failures and meet outstanding obligations for banks that have already failed,” Bair said. Total insured deposits declined by 0.3% ($15 billion) during the quarter. “The industry has come a long way in cleaning up balance sheets, building capital, and adjusting to changes in financial markets and the economy. But the adjustments are not over, and this is no time for complacency,” Bair concluded. To read the FDIC release, use the link.

Mid-Atlantic Corporate Were ahead of the game

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MIDDLETOWN, Pa. (11/24/10)--A letter from Mid-Atlantic Corporate FCU to its membership says it is "ahead of the game" in relation to changes occurring on the corporate credit union landscape. Mid-Atlantic President/CEO Jay Murray wrote in the letter sent to members last week than the corporate took a "proactive approach a year ago," by working independently to find the best service solutions for its members, according to an article in the New Jersey Credit Union League's newsletter (The Daily Exchange Nov. 23. "Today, we're ahead of the game with a plan in place that enables us to continue providing our members with the payment systems they need," Murray wrote on behalf of the Middletown, Pa.-based corporate. The letter noted that Mid-Atlantic is closely monitoring corporate stabilization developments at the national level and supports "cooperative efforts where they make sense," adding, "we are well-positioned to help our members succeed in the future." It also emphasized that the corporate:
* Remains fiscally sound and strong and is moving forward with its capitalization and membership plan, independent of other corporate actions; * Will not use members' capital investments in the corporate if the creation of a new payment-system credit union service organization proceeds; and * Operates independently from the U.S. Central Bridge Corporate for payment services. The corporate provides its own automated clearinghouse and bill payment programs and is in the process of moving automated settlements and international wires away from the bridge corporate's program.

WOCCU urges CUs to prep for International Year of Co-ops

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MADISON, Wis. (11/24/10)--World Council of Credit Unions (WOCCU) is urging credit unions to play a visible role during the United Nations’ International Year of Cooperatives (IYC) in 2012. The year-long initiative will begin with a kick-off at the end of October 2011 at the U.N.’s New York City headquarters. Under the theme, “Co-operative enterprises build a better world,” IYC is designed to raise public recognition of cooperatives’ socio-economic impact worldwide, especially among young adults whose personal values coincide with cooperative principles. Organizers hope the higher levels of public recognition will promote forming new cooperatives and foster legislative and regulatory environments conducive to cooperative formation and growth. “In the wake of the global economic recession, the cooperative model has again proven its worth,” said Pete Crear, WOCCU president/CEO. “The U.N.’s designation of 2012 as the International Year of Cooperatives is both an honor and an opportunity not only for credit unions, but for cooperatives of all types.” Organizers met at the U.N. earlier this month and are establishing an advisory group and a full-time New York-based U.N. secretariat responsible for managing the development and promotion of IYC activities. The committee will seek financial support from cooperatives and other stakeholders. An IYC logo is in development, with an unveiling expected in the first quarter of 2011. As a model of economic enterprise, cooperatives promote both democratic and human values, and a respect for the environment, said WOCCU. They are autonomous associations of people united voluntarily to meet common economic, social and cultural needs through jointly owned and democratically controlled enterprises. Cooperatives are driven by seven principles: voluntary and open membership; democratic member control; member economic participation; autonomy and independence; education, training and information; cooperation; and a concern for the community. “We’re encouraging credit unions and cooperatives everywhere to capitalize on the opportunity to raise awareness of the value cooperatives offer to their communities,” Crear said. “This is a rare opportunity for all of us in the business of serving members to gain a high level of global recognition, both for the benefit of our own institutions and for the cooperative movement worldwide.”

Self-Help builds 100th house to stabilize neighborhoods

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DURHAM, N.C. (11/24/10)--Anyone who loves movies remembers the line, “If you build it, they will come,” from “Field of Dreams.” Self-Help CU has a story that is just as inspiring, and its memorable line could be, “If we help them build it, they will stay.” Self-Help CU is currently in completing its 100th built or renovated home since 1996 (The Herald Sun Nov. 19). The program began 14 years ago when Self-Help CU became involved in the purchase of 30 homes in Durham, N.C. to help stabilize Walltown, a neighborhood near Duke University How has Self-Help CU been able to keep its home building program going for 14 years? Smart financing is one way. The credit union has established its own ventures fund for some of the higher-risk loans it takes on. The credit union also works through subsidy programs and a low-interest loan provided by Duke University. But just as importantly, the program works in neighborhoods that have a history, says Evan Covington-Chavez, real estate development director at the credit union. “We focus on neighborhoods that are already in existence,” Covington Chavez told News Now. “We’re not building subdivisions or getting rid of the old neighborhoods. These neighborhoods have stories to tell. People want to know who lived on the corner 20 years ago, or who lived across the street. That makes it more sustainable.” When the program was first established in Walltown, neighbors weren’t so sure they would be welcome to stick around and tell their stories. “We weren’t from the neighborhood,” Covington-Chavez explained. “It took a lot of community meetings and a lot of years to give people the confidences that we’re there to work with them and give them what they wanted to see in their neighborhood.” The program has since branched out to other neighborhoods. Covington-Chavez says the reason for that growth is because the concept makes sense. “From the beginning we knew we were doing responsible lending. Why not extend that and build houses that our members and people in our neighborhoods can afford?”

CUNA closed Thursday and Friday no INews NowI (11/23/2010)

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WASHINGTON and MADISON, Wis. (11/24/10)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association (CUNA) will be closed Thursday and Friday in observance of the Thanksgiving holiday. News Now will not publish a regular edition on Thursday and Friday. It will resume regular publication on Monday.

CUNA Council Forum meets Mendez is new chair

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MADISON, Wis. (11/24/10)--The Council Forum, the leadership group of the CUNA Councils, met in Washington, D.C., with Credit Union National Association (CUNA) President/CEO Bill Cheney and CUNA's senior staff to discuss mid-term elections and the implications for credit unions and current legislative and regulatory priorities.
Credit Union National Association (CUNA) President/CEO Bill Cheney, right, recognizes the Council Forum's outgoing chair, Nader Moghaddam, president/CEO of Financial Partners FCU, for his leadership of the CUNA Councils' leadership group.
Members of CUNA's Council Forum who visited the National Credit Union Administration recently were, from left: Dan Leclerc, Cheryl Sorenson, Pam Finch, Jennifer Morse, Suzanne Oliver, Robert Reh, Erin Mendez, Sean McDonald, David Rohn, Jennifer Lehn, Rudy Pereira, Bill Vogney, Anne Legg, Aaron Bresko, Nader Moghaddam, and Sue Douglas. (Photo provided by the CUNA Councils)
Erin Mendez, executive vice president and chief operations officer at Schools First FCU, Santa Ana, Calif., became chair of the group, succeeding Nader Moghaddam, president/CEO of Financial Partners FCU, Downey, Calif. Rudy Pereira, senior vice president operations and technology, Alliant CU, will serve as vice chair. During the two-day meeting, the forum met with the National Credit Union Administration (NCUA) Executive Director David Marquis, Deputy Director Larry Fazio, and Melinda Love, NCUA's head of Examination and Insurance. The Council Forum comprises two representatives from each of the six CUNA Councils, plus an elected chair and vice chair. CUNA Councils, the largest professional society for credit union executives, has nearly 5,000 members from credit unions nationwide. Additional Council Forum members include:
* CUNA CFO Council: Chair Pam Finch, chief financial officer (CFO), Mid-Minnesota FCU, Baxter, Minn., and Vice chair Dan Leclerc, senior vice president/CFO, Aventa CU, Colorado Springs, Colo.; * CUNA HR/TD Council: Chair Jennifer Morse, vice president HR/training, Empower FCU, Syracuse, N.Y., and Vice chair Suzanne Oliver, senior vice president educational services/chief learning officer, Mountain America FCU, West Jordan, Utah; * CUNA Lending Council: Chair Aaron Bresko, vice president lending, BECU, Tukwila, Wash., and Vice chair Bill Vogeney, senior vice president/chief lending officer, Ent FCU, Colorado Springs, Colo.; * CUNA Marketing & Business Development Council: Chair Anne Legg, vice president marketing, Cabrillo CU, San Diego, and Vice chair Sean McDonald, chief marketing officer, Liberty Savings FCU, Jersey City, N.J.; * CUNA Operations Sales & Service Council: Chair Jennifer Lehn, executive vice president, Numerica CU, Spokane Valley, Wash., and Vice chair Sue Douglas, senior vice president/chief operating officer, State Employees' CU, Raleigh, N.C.; and * CUNA Technology Council: Chair Pereira, and Vice chair Robert Reh, chief information officer, Nassau Financial FCU, Westbury, N.Y.

Mission SF FCU Travis CU receive Calif. foundation awards

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SAN FRANCISCO and VACAVILLE, Calif. (11/24/10)--Mission SF FCU in San Francisco and Travis CU in Vacaville, Calif., are the 2010 recipients of the Beacon Award from the Richard Myles Johnson (RMJ) Foundation, the state foundation for credit unions in California and Nevada.
Richard Myles Johnson Foundation Beacon Award Finalists and Award Recipients are, from left: Brett Martinez (Redwood CU, finalist); Andy Anderson (Travis CU, award recipient); Margaret Libby (Mission SF FCU, award recipient); Patsy Van Ouwerkerk (Travis CU, award recipient); and Crystal Lyon (Silver State Schools CU, finalist). (Photo provided by the California Credit Union League)
The award was presented at the seventh annual Beacon Awards Gala Reception Nov. 14 in Anaheim, Calif. Mission SF FCU was honored in the under-$100-million-asset category for its Prize-linked Accounts for Youth (PLAY) program, which provides youth with a free savings account and a hands-on way to learn personal finance and build a savings habit. Five youth groups and about 50 youngsters participated in a pilot program earlier this year. The youth set a personal savings goal to buy something they want--such as a cell phone or school supplies--while learning the basics of finance. Travis CU was recognized in the more-than-$100-million-asset category for its collaboration with a coalition of community leaders to help foster youth succeed as independent adults. The credit union provided Solano County foster youth tools for financial responsibility through its Money Matters program. Money Matters helped 50 Solano County foster youth become more financially stable through training, and helping them open a personal savings account with oversight from mentors. The Beacon Award, the Foundation’s highest honor, recognizes promising or exemplary financial education programs or projects that provide information to the broader credit union community and the general public. The foundation is dedicated to providing community service grants to support credit union efforts in spreading the financial literacy message to young people.

N.Y.s young pros hold third crash meeting

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ALBANY, N.Y. (11/24/10)--Twenty-three young credit unions professionals, from 10 credit unions, including five members of the Credit Union Association of New York’s Young Professional Commission (YPC), gathered recently near Henrietta, N.Y., for the third “Crash” meet-up in the state. Crash (www.crash.coop) is the brainchild of Brent Dixon, the young adult advisor at the Filene Research Institute. It provides young credit union professionals an opportunity to connect. The association’s YPC partnered with Crash to do just that.
Crash meet-up participants share a laugh during the open conversation segment for the event, which was coordinated by the Credit Union Association of New York. (Photos provided by the Credit Union Association of New York).
Francesca Iraci, marketing specialist at Gates Chili FCU, and a member of the Young Professional Commission, welcomes the group to the Crash meet-up recently at Lovin’ Cup coffee shop just outside Rochester in Henrietta, N.Y., for the third meet-up in the state. Iraci coordinated the event locally.
Crash meet-ups serve to bring young professionals together to learn, network and dialogue about how to attract young people to credit unions while spreading the word about the benefits of credit unions. They also discuss ways they can support each other. The first meet-up took place in Albany in August. Future meet-ups are being planned for Syracuse, Utica and Jamestown. Dixon, joined by Lisa Hochgraf, editor from Credit Union Executives Society (CUES), and Allison Barna, the association’s community development coordinator, joined the New York group. Dixon provided general information about Filene, the Credit Union National Association, World Council of Credit Unions and the Credit Union Development Educator program, as well as the Women’s Global Development Group. He mentioned the possibility of developing a speaker’s bureau of and for young credit union professionals. Hochgraf discussed CUES membership in the CUES NextGen group, the recent CUES Next Top Credit Union Exec and how credit union professionals want to hear the ideas of their younger cohorts. Participants agreed that technology is essential when reaching out to the younger demographic. They discussed their biggest barriers: resources, logistics, time, the “we’ve always done it this way” answer and a fear of being outside of the credit union’s comfort zone. “With each meet-up we throw, new people step up who want to throw one of their own. This tells me we’re on to something,” said Barna. “There’s a need that, until now, has not been met for young people in credit unions, and there's an army of young credit union people willing to help.” “As young professionals, we want to be involved and connected,” said Francesca Iraci, marketing specialist at Gates Chili FCU, Rochester, and a member of the YPC. She coordinated the event. At the Rochester meet-up, one thing was clear--the cooperative spirit is alive and well. Credit unions represented included: Boulevard FCU, Amherst; Focal Point FCU, Syracuse; Gates Chili FCU; Genesee Valley FCU, Geneseo; Oswego (N.Y.) County FCU; Pittsford (N.Y.) FCU; Reliant Community FCU, Sodus; St. Pius X Church FCU, Rochester; The Summit FCU, Rochester; and Rochester Ukrainian FCU. The commission was formed this year to develop strategies and practices that will assist the New York association and credit unions in recruiting young adults as employees and volunteers and in developing and promoting them into positions of leadership within the state credit union community. The commission includes about 30 credit union employees statewide, all 35 years of age or younger.