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Ardire Appointed To N.J. League Board

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HIGHSTOWN, N.J. (11/26/13)--Campbell Employees FCU President/CEO David Ardire was appointed Thursday to the New Jersey Credit Union League's board of directors (The Daily Exchange Nov. 22). 
 
The appointment came after a board meeting that also saw XCEL FCU President/CEO Linda McFadden voted interim vice chair. 
 
"We are excited to welcome David Ardire to the board and look forward to his active involvement," said NJCUL Chairman Lou Vetere. "His experience at Campbell Employees FCU will prove valuable in representing New Jersey credit unions as he serves on the NJCUL board."
 
Ardire started at the credit union in 1979 as an accountant and systems manager. Although he left it to work for Campbell Soup Company and Piramal Glass--USA, Ardire remained a member of its audit committee and board of directors. He became Campbell Employees FCU vice president of finance in 2011 and was named president/CEO in January.
 
McFadden--serving as a replacement for the vice chair role vacated by Ray Del Nero of Merck Employees FCU--will serve in that capacity until the January board meeting where all table officers are elected for 2014.
 
Campbell Employees FCU is based in Cherry Hill, N.J. ; XCEL FCU, in Bloomfield; and Merck Employees FCU, in Rahway.

CU CEO Confidence In Economy Slips

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PLANO, Texas (11/26/13)--Credit union CEOs' confidence in the economy fell in the third quarter, according to a survey conducted by Catalyst Corporate FCU.
 
The Plano, Texas-based wholesale cooperative financial institution's CEO confidence index fell to 24.02, from 27.46 in the second quarter.
 
Measurements of credit union CEOs' assessment of present conditions and future expectations fell to 23.42 and 24.32--from 25.44 and 28.48, respectively.
 
The increase in pessimism can most likely be attributed to the partial government shutdown in October, another round of congressional fiscal negotiations anticipated in the new year and weak economic growth, said the corporate.
 
"A lot hangs in the balance with the U.S. government," one CEO who responded to the survey commented. "With the weak leadership in D.C., it could all go south quickly and not be good for the consumer."
 
Bob Steensma, CEO of the $256 million-asset Dothan, Ala.-based Five Star CU agreed that the dysfunction in Washington hangs over credit unions, but noted generally that the economy is "not what we were hoping for, especially heading into the end of the year, when real estate sales are traditionally slower and loans are fewer."
 
The third quarter survey indicated that credit union CEOs are more concerned about individual members' well-being than their own financial institution's health. An index measuring members' current financial conditions dropped to 16.59 from 21.14 in the second quarter, while a gauge of credit unions' financial condition actually ticked upward, to 30.32 from 29.80.
 
CEOs' expectations for members' financial condition in six months also plummeted, to 21.27 from 28.17, while expectations for their own credit union's financial situation in that time dropped to 33.56 from 35.28.
 
Indexes predicting both loan demand and share deposit growth in six months also receded in the third quarter by about four points.
 
Catalyst Strategic Solutions' Director and Chief Strategist Brian Turner pointed out that while credit unions with over $500 million in assets saw their loan portfolios balloon by over 9% in the third quarter, these larger institutions account for only 7% of all credit unions.
 
"The industry overall is experiencing a 5.5% increase, indicating the remaining 93% of credit unions have been more challenged in attracting loans," he said.

"The survey appears to represent the thoughts of the '93%,'" Turner added. "Whereas the outlook for consumer spending next year is positive, loan production will continue to challenge most credit unions."
 
The survey, which contains six questions, has been conducted quarterly since 2004. This quarter, it was sent on Oct. 10 to 1,343 credit union CEOs around the country, with 224 responding by the Oct. 31 deadline.
 
Catalyst Corporate FCU serves more than 1,200 member credit unions.

Cornerstone Foundation Announces Grants

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FARMERS BRANCH, Texas (11/26/13)--The Cornerstone Credit Union Foundation announced Monday that it's donating $88,856 to financial education, professional development and disaster relief (Leaguer Nov. 25).
 
Some of the awards were approved by the foundation's committee for the first time earlier this month.
 
Designed, in the words of the foundation, "to empower individuals with their financial well-being," the grants include:
  • Five financial literacy grants worth $5,850;
  • Nine general grants worth $21,006; and
  • Fifteen phase 2 disaster relief grants for victims of Oklahoma tornadoes, worth $62,000.
"Besides the Phase 2 grants, the stand-out grant from this meeting was the grant for CCCS of Central Oklahoma," foundation Executive Director Courtney Moran said, referring to the Consumer Credit Counseling Service of Central Oklahoma. The grant will cover the credit counseling service's first month and setup fees, which total $75 in savings per credit union member.
 
The foundation is the charity arm of the Cornerstone Credit Union League, which serves credit unions in Texas, Oklahoma and Arkansas.

CUs Meet With EU Reps On Basel III, Consumer Protection

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LONDON (11/26/13)--Representatives from the European Network of Credit Unions (ENCU) and World Council of Credit Unions met with European Union (EU) policymakers in London and Brussels last week to discuss how to limit the Basel III liquidity rules' negative impact on credit unions.
 
Click to view larger image European Network of Credit Unions and World Council of Credit Unions representatives met with European Union policymakers in London and Brussels last week to discuss the impact of Basel III liquidity rules on credit unions. From left, Martin Sisk, Irish League of Credit Unions (ILCU); Ed Farrell, ILCU; Anne Schneider, Policy Action (Brussels); Breege-Anne Murphy, ILCU; Wiktor Kaminski, National Association of Co-operative Savings & Credit Unions (Poland) (NACSCU); Michael Edwards, World Council; Pawel Grzesik, NACSCU; Andrus Ristkok, Estonian Union of Credit Cooperatives; Brian McCrory, ILCU; Eleonora Zgonjanin, FULM Savings House (Macedonia); Florin Simion, Federation of Romanian Credit Unions; and Matt Bland, Association of British Credit Unions Ltd. (Photo provided by World Council of Credit Unions)
ENCU and World Council also met with EU authorities about consumer protection and taxation issues affecting credit unions in Europe.
 
Representatives were from all six ENCU member organizations--Association of British Credit Unions, Ltd., Estonian Union of Credit Cooperatives, Federation of Romanian Credit Unions  FULM Savings House (Macedonia), Irish League of Credit Unions and National Association of Co-operative Savings & Credit Unions (Poland). They met with the European Banking Authority's (EBA) Regulation section in London Nov. 21 to ask the EBA to consider establishing a credit union-specific liquidity classification under the EU's European Basel III rules to reflect that credit unions' deposits in banks are generally "sticky and stable," even during times of economic stress.
 
ENCU representatives also met with the European Commission in Brussels Nov. 22 regarding the Basel III rules to make the same request.
 
Credit unions' deposits in European banks currently are classified under Basel III as "wholesale funding." The "wholesale" classification assumes that most or all of these deposits would be withdrawn during periods of economic stress, even though European credit unions significantly increased their deposits in banks during the global financial crisis that began in 2007.
 
Banks must hold increased reserves for "wholesale" deposits compared to the reserves required for "small business" or "retail" deposits. The higher reserve requirements increase the banks' cost of funds when doing business with credit unions. The new costs have resulted in Irish banks reducing the yields they pay on credit union deposits by an average of 1.5%, and also have contributed to some banking institutions in Great Britain ceasing to accept credit unions deposits.
 
World Council and the Irish League met with the Basel Committee on Banking Supervision in September regarding the classification of credit unions' deposits in banks under Basel III liquidity rules.
 
"Application of 'wholesale funding' classification for credit unions' deposits does not reflect the actual behavior of credit unions' bank deposits," said Brian Branch, World Council president/CEO. "This EU correction of the Basel III interpretation will ensure that credit unions can continue to deliver financial inclusion in Europe."
 
ENCU members also met with the EBA's and the European Commission's Consumer Protection sections Nov. 21-22 concerning upcoming EU directives and guidance papers on mortgage lending, payment accounts and other payment services.
 
ENCU met with the European Commission's Tax section Nov. 22 to discuss implementation of the U.S. Foreign Account Tax Compliance Act and related EU and Organisation for Economic Cooperation and Development initiatives concerning automatic exchange of tax information about credit union members who are neither a resident nor a citizen of the jurisdiction.
 
ENCU is a network of national credit union associations in Europe and World Council representatives who educate and engage with EU policymakers and other stakeholders on legislation that affects credit unions. ENCU was formally established in 2010 and is based in Brussels.

In the Media: CUs, JP Morgan Settlement, Tax Reform

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WASHINGTON (11/26/13)--The Wall Street Journal, The Street and The Hill carried comments during the past week from the Credit Union National Association on topics ranging from tax reform, to the National Credit Union Administration's settlement of its lawsuit against JP Morgan Chase and Wall Street banks over mortgage-backed securities.

Meanwhile, other publications pointed out the good work and benefits of credit unions, according to CUNA's weekly InThe Media Report (Nov. 22). The report covers mentions of CUNA and credit unions in the media and is available to CUNA's member credit unions.

The Wall Street Journal (Nov. 19) noted that NCUA "usually isn't known as the John Wayne of Washington financial regulators" but "it has been unusually tough on Wall Street firms that sold mortgage-backed securities."  The article includes a statement from CUNA President/CEO Bill Cheney, saying, "I think [the NCUA] absolutely should, on behalf of the credit unions, recover as much as possible," as well as from NCUA Chairman Debbie Matz who noted, "We have made it clear to the defendants that we are willing to stay with this to the end."
 
In The Street (Nov. 19), Cheney is featured as saying in a telephone interview that he was pleased that credit unions would see some restitution for shaky mortgage securities they bought from JPMorgan. "One could certainly argue that it could have been more," Cheney said. "Having said that, we are happy with the settlement," he added. The Street featured Cheney's comments above comments made by JP Morgan CEO Jamie Dimon.
 
In an article about the secrecy involved in keeping what is in the  tax reform plans under wraps, The Hill (Nov. 19) included comments from CUNA Senior Vice President for Legislative Affairs Ryan Donovan , who noted rumors are just that.
 
In "It's banks that are spinning fairy tales, not credit unions," an opinion editorial published in Friday's Albuquerque Business First, Sylvia Lyon, president of the Credit Union Association of New Mexico, and Chris Fitzgerald, league chair and CEO of Rio Grande CU in Albuquerque, responded to a bank's op-ed and point out that banks and credit unions are not the same.
 
"Unlike banks, credit unions are not-for-profit cooperatives, owned by their members and managed by volunteer boards," said Lyon and Fitzgerald. "Most credit unions are based in and directly benefit the community they serve. They have no stockholders demanding market rate return on their investments. Earnings are passed along to member-owners," they continued.
 
Use the link to check out the articles.

Filene Testing Four Products In 'Incubator'

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MADISON, Wis. (11/26/13)--The Filene Research Institute will test four products to benefit low- and moderate-income consumers in its new financial services incubator.
 
The four products were selected from more than 20 submissions. An advisory panel of financial institution staff, researchers and industry analysts helped Filene choose the products.
 
Filene's financial services incubator was launched with a 30-month grant of $700,000 from the Ford Foundation to benefit underbanked consumers. The incubator will test, package and scale financial products that Filene deems innovative and viable to aid low-and-moderate-income U.S. consumers and provide alternatives to predatory products.
 
The products to be tested include:
  • Non-prime Auto Lending, from the National Credit Union Foundation. The program helps lenders fairly price and manage non-prime auto loans, incorporating the Lower Interest For Timeliness (LIFT) idea introduced by Filene's i3 innovation team. LIFT is a loan feature that reduces interest rates when members make on-time payments.
  • Borrow and Save, from the National Federation of Community Development Credit Unions. This product increases consumers' economic security by providing an affordable small-dollar loan with a payment term that makes sense for them. A built-in savings component also helps consumers to self-fund their emergencies instead of borrowing money to handle them.
  • Pay Yourself Back, from Innovations in Poverty Action. As an add-on to any loan type, this product seamlessly converts borrowers into savers. Leveraging the habits formed by regularly making loan payments, it encourages consumers to keep making regular payments (or a portion of it) to themselves after the loan is paid off.
  • Employer Sponsored Income, Advance Loan, from North Country FCU, Chittenden, Vt. This small-dollar loan program is offered to employees of select employer groups partnered with credit unions. Loan payments are auto-deducted from direct-deposited paychecks. Once the loan is paid, employees may continue making payments into savings accounts.

Equifax: Retail-issued Credit Cards At Four-year High

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ATLANTA (11/26/13)--Retail-issued credit cards total 183 million, the most since September 2009, said Equifax in its latest National Consumer Credit Trends Report. Balances passed the $56 billion mark, a year-over-year increase of more than 6.4%.
 
New credit issued from January to August of 2013 totaled $46.6 billion, up 11.6% from the same period in 2012, said Equifax.
 
During the first eight months of 2013, roughly 24.6 million new card accounts were issued--the highest since 2008 and an increase of 8.8% from a year earlier. Year-to-date lending through August to subprime credit borrowers with Equifax Risk scores below 660 increased 15.8% over the period in 2012, with a six-year high of 8.2 million loans originated.
 
Write-offs and delinquencies were down.  Retail-issued credit card write-offs dropped nearly 14%--to 7.09% from 8.24% in October 2012.  During that time, 60-day delinquency rates for retail cards fell slightly, to 3.48% from 3.52%.
 
"The holiday season is almost upon us and retailers are eager to capture the hearts and wallets of the American consumer," said Equifax Chief Economist Amy Crews Cutts. "Retailers can leverage these cards to drive traffic to their stores through special offers to cardholders and can encourage larger purchases by offering favorable interest-rate promotions for big ticket items. As long as consumers resist the urge to overspend, these cards can be a great way to save money."
 
Credit cards issued by credit unions and other financial institutions totaled $128.7 billion. The total limit of new credit issued from January to August 2013 is a five-year high for that period and is up 9.1% from the same period last year, which totaled $117.9 billion, said Equifax.
 
Other findings for financial institution-issued cards:
  • The number of new loans January-August 2013 totaled 27.6 million, a five-year high and an increase of 7.3% from same time a year ago.
  • Existing loans in October totaled more than 312 million, the highest since December 2009.
  • The outstanding balance on financial institution-issued credit cards totaled $537.2 billion and represents a year-over-year increase for four consecutive months. This marks the first time in more than five years that such an increase has occurred.
  • From October 2012 to October 2013, the 60-day delinquency rates decreased 13.6% (from 2.18% to 1.88%), while write offs dropped 18.4% (to 3.92% from 4.81%).
Auto loans in October totaled nearly 62 million, a five-year high. The 29.9 million loans financed by credit unions and other financial institutions totaled $411.6 billion, all-time highs for both figures. Comparable numbers funded by auto finance companies were $435.1 billion financed for 32 million loans, the highest level since January 2009. More than $327.3 billion in auto loan originations were made January to August 2013. That is a 15.6% increase from a year earlier and the most new credit originated for the first eight months of a year in more than eight years.
 
Mortgage loans decreased in October, with first mortgage balances totaling $7.6 trillion, down 1.7% from a year earlier. Severe delinquencies (90 days past due or in foreclosure) for first mortgages totaled less than $300 billion for the first time in more than five years. The figure represents a decrease of more than 30% from the same period in 2012.

Nominations Due Today For CUNA Board Elections

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MADISON, Wis., and WASHINGTON (11/26/13)--Today is the deadline for nominations for the Credit Union National Association Board elections. Nominations are due to CUNA by 5 p.m. CT today.
 
CUNA also announced it has received an eighth nomination for the board. Nominated for a seat in District 2, Class B, is Dallas Bergl, president/CEO of INOVA FCU, Elkhart, Ind.
 
Eight CUNA Board positions are open in this year's elections. In addition to Bergl, the nominees include:
  • District 1, Class A--Edwin L. Williams, president of Discovery FCU, Wyomissing, Pa.;
  • District 1, Class D--William J. Mellin, president of the Credit Union Association of New York, Albany, N.Y.;
  • District 2, Class D--Rick Pillow, president of the Virginia Credit Union League, Lynchburg, Va.;
  • District 3, Class C: Maurice R. Smith, president of Local Government FCU, Raleigh, N.C.;
  • District 4, Class A--Pat Drennen, CEO of 1st Gateway CU, Camanache, Iowa, and Geraldine Burek, president/CEO of South Division CU, Evergreen Park, Ill.; and
  • District 5, Class C--Tony C. Budet, president of University FCU, Austin, Texas.
Positions up for election are:
  • District 1, Class A;
  • District 1, Class D;
  • District 2, Class B;
  • District 2, Class D;
  • District 3, Class C;
  • District 4, Class A;
  • District 5, Class C; and
  • District 6, Class B.
Nominees must be an employee or a voting board member of the nominating credit union, with the nomination seconded in writing by at least two other credit unions from the same district and class.
 
Nominees to be elected by leagues must be a league president and be nominated in writing by that league, with the nomination seconded in writing by at least one other league from the district.
 
Ballots for contested elections will be sent Dec. 2, with voting continuing through Jan. 10 and results of the elections announced Jan. 15.
 
Directors elected will take office upon the adjournment of CUNA's Annual General Meeting in Washington, D.C., on Feb. 24.
 
For more information, use the link.

CUNA Council White Paper Explores Marketing Metrics

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MADISON, Wis. (11/26/13)--A new white paper from the CUNA Marketing & Business Development Council makes the case for developing and using of objective measurements that quantify the contribution of marketing to the credit union's bottom line and achievement of its strategic goals.
 
The paper, "Mastering Metrics: Measure What Matters in Marketing and Business Development," sets out a system for planning on which metrics to measure, what information is needed to make those metrics actionable inside and outside the marketing department, and how to work with colleagues in other departments to make those metrics as useful as possible.
 
Three case studies from credit union marketing and business development departments provide examples of how marketers develop and share metrics with their boards, executive teams, and staffs.
 
One of the case studies is Indianapolis-based Eli Lilly FCU's measurement of member engagement--products and services per household, the rate and pace at which account balances are growing, and the member groups that are driving growth.
 
Online services are central to Eli Lily FCU's business model. More than half its members never visit a branch, so monitoring website and call center use provides key indicators about quality of service: What kinds of questions are members asking, and are they getting the right answers? Do members receive the e-mail their credit union sends, or does it bounce back or end up in a spam folder? How many unique visitors does the website have, and how do they get there?
 
One Eli Lilly FCU manager is dedicated to website and social media marketing, applying data from analytical tools about website traffic, click-throughs from Facebook and Twitter, and mentions in user-generated content to optimize the credit union's positioning as a financial adviser and source of useful products and services.
 
Four in five members are active online users, so the credit union works to ensure that its website is easy to navigate and that members can quickly find answers to their questions. An online banking conversion in early 2013 included the launch of a database to continually update online FAQs based on member inquiries and feedback.
 
The credit union also employs a business intelligence unit, with an assistant vice president and two staffers who translate information from marketing customer information files and customer relationship management systems into metrics for improving member service and communications. Eli Lilly FCU also imports data from third-party sources to integrate with internal data in the data warehouse for a fuller picture of members and their financial needs and preferences. Optimizing business intelligence is critical in helping the credit union develop and maintain its brand, the paper said.
 
 
To download the paper, use the link.