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Three years later PolishSlavic FCU grows in Chicago

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CHICAGO (11/30/12)--Less than three years ago Brooklyn, N.Y.-based Polish & Slavic FCU (PSFCU) began establishing three branches in Chicago. Thursday it announced those branches have attracted more than $100 million in deposits, nearly 9,000 new members, and more than $72 million in personal and mortgage loans.

The growth far exceeded the nation's largest ethnic credit union's expectations, PSFCU said in a press release Thursday.

The $1.5 billion credit union long had confined its branch operations to the New York metropolitan area until January 2010, when it opened two branches in the Windy City. A year later, it opened a third branch in the Polish community of Bridgeview, outside Chicago's southern border.

"Opening new branches in Illinois was a natural step forward in the growth of our credit union," said Marzena Wierzbowska, chairperson of the PSFCU board of directors. "With the changing dynamics of the Polish population in the U.S., we needed to start expanding to new markets and Chicago was an obvious choice."

The credit union attracted 8,600 members by introducing modern branches in Mt. Prospect, Norridge, and Bridgeview. It quickly became a visible presence at various Polish cultural events and parades; it organized and financed numerous children's programs; and it instituted a scholarship program for high school and college students.

"The efforts by PSFCU to serve the growing needs of the Polish American community in the Chicago area have been nothing less than outstanding," said Michael Fryzel, board member of the National Credit Union Administration.  The growth "is a clear indication of their vision and analysis of the need for credit union services for thousands of individuals. When I attended the opening of their first Chicago branch, I knew that the credit union would be successful." He noted it has proven is abilities beyond his expectations and he expects continued growth and success due to the credit union's efforts and commitment."

In addition to the three Chicago branches, PSFCU has 12 branches in New York or New Jersey.

"We still have more work to do and I'm confident that this is only the beginning of our success," said Zbigniew Rogalski, vice president and head of the Midwest district for the PSFCU.  "It really is astonishing what we've accomplished in such a short period of time.  It's a testament to our people and our organization."

Global scammers in Australias largest data breach busted

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SYDNEY, Australia, and BUCHAREST, Romania (11/30/12)--An international syndicate based in Romania, and which allegedly committed the largest theft of credit card data in Australia's history, was busted this week.

Seven arrests were made among the 16 people picked up by the Australian National Police and Romanian National Police. Among those picked up was international martial arts and Greco-Roman wrestling champion Gheorghe "The Carpathain Bear" Ignat, said Australian Broadcasting Corp. (ABC) News and Herald Sun (Nov. 29).

Authorities allege that Ignat had traveled to Australia and had a hand in creating fake credit cards from stolen credit-card details. However, he was not placed under arrest.

The gang allegedly accessed more than 100 small retail outlets and stole the personal information of 500,000 credit card holders in Australia.  So far, about 30,000 of the cards were used to make fraudulent purchases of more than $30 million.

Thousands of counterfeit transactions have been made in Europe, Hong Kong, Australia, and the U.S., said authorities (The Advertiser Nov. 30).  Agencies in 13 other countries were involved in the 18-month investigation, said ABC News.

Australian banks and credit unions have already reimbursed consumers for the losses. Louise Petschler, CEO of Abacus Australian Mutuals, the trade association for the nation's credit unions and a member of the World Council of Credit Unions, told The Advertiser that the arrests showed how cybercrime had evolved into a global enterprise.  "We all have a role to play to ensure credit card transactions are safe and secure," she said.

Small CU adopts PFM tool

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MIDLAND, Texas (11/30/12)--My Community FCU in Midland, Texas, is hoping to get its members to adopt a personal financial management (PFM) application from MoneyDesktop.

MoneyDesktop compiles account information from more than 10,000 financial institutions and provides services that include budget creation, debt management, expense tracking and visual reports on a consumer's financial state (American Banker Nov. 28).

The $255.2 million asset credit union will place PFM on its online banking site landing page and use it as a component for promoting its mobile banking services, the Banker said.

My Community calls the PFM application its "sticky service" because the credit union's members can locate all their financial information in one place, and not have to go beyond the credit union for different financial information, Susie Marsten, My Community senior vice president and chief operating officer, told the Banker.

She especially likes MoneyDesktop PFM's BubbleBudgets, which allow users to view graphics in which bubbles indicate differing spending levels that change colors in relation to how well a consumer is sticking to a budgeting plan, Marsten told the Banker.

Federation webinar addresses CDFI microfinance training

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NEW YORK (11/30/12)--There is still time for credit unions to sign up for a National Federation of Community Development Credit Unions Dec. 6 webinar that will provide more information about how to participate in three "Scaling Up Microfinance" training sessions next year.

The webinar will be at 3:30 p.m. ET Dec. 6. (Use the link to register).

Scaling Up Microfinance is part of the Community Development Financial Institutions  (CDFI) Fund's Capacity Building Initiatives. The federation has partnered with Opportunity Finance Network to provide the program of specialized training and technical assistance for credit unions engaged in or working to build their microfinance or small business lending programs.

The program offers opportunities for collaboration between loan funds and community development credit unions offering microfinance products.

The curriculum is based on four themes:

  • Innovative Business Models;
  • New Microfinance Products;
  • Technology to Improve Performance and Efficiency; and
  • Developing a Culture of Innovation and Talent Management.
The Scaling Up Microfinance training sessions will be held Jan. 17-18 in New York City; Jan. 31-Feb. 1 in San Francisco, and Feb. 25-26 in Atlanta.

Use the links for more information.

Illinois foundation grants 45k in third round

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NAPERVILLE, Ill. (11/30/12)--The Illinois Credit Union Foundation has awarded $45,100 in grants in a third and final round of funding in 2012, bringing the total awarded for the year to more than $125,300.

The grants include Small Credit Union Development (SCUD), Community Service, Marketing and Business Development, and Financial Independence & Revitalization Effort (FIRE) grants.

SCUD grants for this cycle totaled $12,603. They were awarded to 10 credit unions and one chapter. The grants are for computer and other office equipment. The recipients were:

  • Alton Bell Community CU, Alton;
  • Ambraw FCU, Lawrenceville;
  • CTA C&M FCU, Chicago;
  • Fairmont Village CU, East St. Louis;
  • Israel Methcomm FCU, Chicago;
  • Oak Lawn Municipal Employees CU, Oak Lawn;
  • Peoria City Employees CU, Peoria;
  • Peoria Hiway CU, Peoria;
  • Processors Industrial Community CU, Granite City; and
  • St. Mark CU, Chicago.
The Chicago Metro Chapter also received a SCUD grant to establish a "Supply Pantry" to help small credit unions in the chapter share commonly used office supplies and help reduce their cost of those items.

The foundation also awarded seven Community Service Grants at $500 each. The program encourages and rewards chapter or credit union participation in local community projects. Credit unions and chapters can qualify for grants by hosting an established event, creating an event, or volunteering at an established event. Recipients included:

  • DHCU Community CU, Moline;
  • Landmark CU, Danville;
  • Midwest America FCU, Danville; and
  • North Side Community FCU, Chicago.
Three chapters--Danville Area, Egyptian, and Southern Illinois--also received Community Service Grants for several projects, including North Side Community's effort with a local social service agency to teach people how to prepare healthy meals on a limited budget and stretch their food budget. The workshops will be open to the community.

In addition, five credit unions received Marketing and Business Development grants that totaled $15,865. The recipients were:

  • Elite Community CU, Bourbonnais;
  • IBEW Local 146 CU, Decatur;
  • Jeff-Co Schools FCU, Mt. Vernon;
  • Peoria Hiway CU, Peoria; and
  • SDC Employees CU, Kankakee.
Established in 2006, the grants help credit unions with assets of up to $30 million to start or expand outreach efforts. The maximum grant award is $5,000 per credit union per year.  Grant requests this round were for membership outreach efforts.

Three credit unions were recipients of FIRE grants. They included: Members First Community CU, Quincy; North Side Community FCU, Chicago; and South Division CU, Evergreen Park. 

The FIRE Program provides assistance so credit unions can expand their ability to build and maintain viable communities by providing credit and financial services to residents and businesses in low-income and underserved areas of Illinois. Members First will use its grant to expand its reach to junior high and high schools and students in four counties with the Banzai financial education program.

Ernst and Young People change FIs because of high fees

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NEW YORK (11/30/12)--Financial institutions' members/customers are changing their behavior and demanding lower fees for higher levels of service or other improvements, according to Ernst & Young's 2012 global consumer banking survey.

If their demands are not met, consumers increasingly are likely to shop around at other financial institutions for competitive rates for services and products.

Consumers are taking control of their banking relationships, are increasingly likely to change financial institutions and expect to be able to choose among a range of service levels and costs, the survey said.

About 28,560 banking customers across 35 countries were surveyed. It indicates that consumers also expect to be financially rewarded for their loyalty. Research was conducted between February and March, using an Internet questionnaire.

The survey suggests that for financial institutions, including credit unions, to remain competitive they must:

  • Make promises and service offers more transparent so consumers can choose;
  • Rebalance fee structures for the clarity and sustainability required by regulators and investors;
  • Improve how they provide information and advice, recruit online affinity groups and develop flexible loyalty programs;
  • Develop models around consumers' needs by reprioritizing spending, increasing the use of low-cost digital models and using more innovative technology.
"Customers are sending banks a very clear message--'we are taking control,'" said Pierre Pilorge, Ernst & Young's financial services advisory markets leader for Europe, Middle East, India and Africa. "In response, banks must re-evaluate customer trends region by region to prioritize products, enhance services, and ultimately give customers what they want."

Worldwide, 44% of consumers surveyed say their financial institution adapts products and services to meet their needs. Also, 70% of consumers would disclose personal information if it improved the services and products they were offered.

Loyalty reward plans are on the rise. Twenty-seven percent of consumers are enrolled in these, up 50% from 2011. However, most agreed that if they are offered three products or more with a bank they should get better service (86%), and be charged lower fees or given better rates on their savings accounts (91%).

Consumers also are becoming less loyal and increasing the number of financial institutions they use, the study indicated. Those who use only one financial institution have fallen to 31% from 41%. The number planning to change financial institutions has risen to 12% from 7% year on year and attrition rates have increased in several major markets.

Poor branch experience (31%) and lack of personalized contact or service (26%) are climbing the list of reasons for changing providers, although dissatisfaction with high fees continues to be the most commonly cited driver (50%) of attrition.

"Pricing remains critical to customer satisfaction, but most customers have no idea how much they pay each year," Pierre said. "As they start to take control of their banking relationships, clearer communication about fees is customers' most sought-after improvement. People are more willing than ever to shop around and want control over what they pay for the service they receive. Banks need to respond--pricing and service promises need to be transparent if banks are to deliver something customers value."

Financial institutions have made progress in improving their communication channels, said Ernst & Young. Both call center and mobile banking services have improved, with consumer satisfaction up 8% and 16% respectively, year on year. However, the power of the consumer voice has overtaken financial institutions' communication channels. Personal recommendations from family and friends are the top source of information about banking products, with 71% of consumers relying on that information as their primary source.

Fifty-five percent of consumers refer to online communities or social networks for advice and a third who use social networking use it to comment on the service they receive from their financial institution.

"Customers prefer turning to other sources than their bank for financial advice and to find the best deals. Comparison websites, relatively unknown five years ago, are now the second major source of influence, ranking higher than banking advisers, and the use of social media as a source of banking information is amplifying customers' voices, giving them greater power as advocates or critics," Pierre concluded.

Study CUs lead in mobile satisfaction

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ANN ARBOR, Mich. (11/30/12)--Credit unions are at the top of a mobile satisfaction index that measures satisfaction of consumers' experience with apps and websites from credit unions, banks, credit cards and brokerage companies.

Credit unions, measured in aggregate, scored 80 on the 100-point scale of the ForeSee Mobile Satisfaction Index. The results are based on 4,500 consumers' experience with mobile apps and websites of 17 major financial services companies.

Only credit unions met the threshold for "excellent," said ForSee, an Ann Arbor, Mich.-based technology-driven customer service analytics firm.

After credit unions, American Express and Wells Fargo each scored 79 in the banking industry section. Also, American Express and Discover topped the credit card industry with the same score, 79.  Charles Schwab, at the top of the brokerage industry, also scored 79.

The overall aggregate score for the financial services index is 77.  Mobile banks and credit unions scored 78; credit cards, 76; and brokerages, 77.

Another key finding:  Apps provided a superior experience when compared with mobile websites.  Apps may be the key to competitive differentiation and growth, said ForeSee. However, it noted all companies have some distance to go before providing a compelling mobile experience. Traditional websites (on personal computers) still provide the best customer experience for financial services companies, ForeSee said.

"As consumers put the power of the Internet in their pockets and purses in record numbers, there is no doubt that the future of customer engagement is mobile," said Eric Feinberg, ForeSee's director of mobile, media and entertainment. "The mobile experience represents the biggest opportunity--and the biggest challenge--for financial services companies because consumers are getting more comfortable managing their finances via mobile devices." He noted that the company that best understands how to meet mobile consumers' needs will succeed, "and that's going to require the right kind of insight. Right now, it's anyone's game.

The study also compared highly satisfied users (those who scored their experience 80 or above) of mobile websites and apps to less satisfied users (69 or below). It found that highly satisfied visitors are more likely to prefer the brand, recommend the mobile channel, use that channel again, or use the mobile channel before any other information resource.

"Apps are an important tool for serving financial services customers, but the mobile website is going to be more important as a mobile channel for serving prospective customers," said Larry Freed, ForeSee president/CEO.  He noted this underlies the importance of measuring customer satisfaction to help improve customers' experience.

CU members shopped more on Thanksgiving same on Friday

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RANCHO CUCAMONGA, Calif., and FRANKLIN, Mass. (11/30/12)--Holiday shoppers, including credit union members, didn't wait until Black Friday to hit the malls or the Internet this year. Many began shopping on Thanksgiving Day, says a debit card-transactions analysis by CO-OP Financial Services and Saylent Technologies.

"It appears that shoppers in growing numbers are taking advantage of the trend by stores to open during the evening of Thanksgiving Day, rather than waiting until early the next morning," said Stan Hollen, president/CEO of CO-OP Financial Services. "The resulting activity increase over both days compared to last year should be encouraging to retailers heading into the holiday season."

Members of credit unions recorded roughly the same buying activity this past Black Friday as they did in 2011. However, they dramatically increased their transaction and spending levels on Thanksgiving Day for the same period.

Black Friday 2012 transactions by credit union debit card holders actually decreased by 0.2%, and total dollars spent decreased 3.5%, compared with 2011 transactions. In a similar survey conducted last year, CO-OP and Saylent found that shoppers made 10.1% more transactions and spent 8.1% more during Black Friday than in 2010.

It was a much different story on Thanksgiving Day, said CO-OP and Saylent. Thanksgiving transactions increased 18.8%, and dollars spent rose even more, 30.7%, in 2012 compared with the year before.

For the entire two-day period of Nov. 22-23, 2012, total transactions and dollars spent rose modestly year over year--a 6.25% rise in transactions, and a 6.5% rise in dollars spent.

The analysis of sales is not an estimate but is based on more than 5.1 million actual transactions made during the two days. Drawn from debit card transactions across credit unions processed by CO-OP Financial Services, the year-over-year comparison was performed through an advanced analytics solution, CO-OP Total Revelation, powered by Saylent Technologies, and was conducted by Saylent's Insight360 consulting team.

The study's sample of consumer activity represented both brick-and-mortar and Internet transactions.

Otherl key findings include:

  • Thanksgiving Day spending may have increased significantly, but there is no danger of Black Friday being overtaken as the busiest shopping day of the year. Black Friday transactions exceeded that of Thanksgiving Day by 95.1%, while 140.3% more dollars were spent on Black Friday compared to Thanksgiving Day.
  • The CO-OP and Saylent analysis broke down transaction and spending activity in 20 different types of retail outlets. For Black Friday, the category seeing the highest level of growth was record shops, which included iTunes, Amazon Online Services and Amazon Kindle purchases. Record shops showed a 36.5% increase in transactions, and a robust 25.25% increase in dollars spent.
  • Discount stores led all retail outlets on Black Friday in terms of transactions and spending, as they did last year. However, transactions were down 13.2% and spending was down 9.7% compared to 2011, suggesting a renewed consumer interest in specialty retailers, said CO-OP and Saylent. One such example is Women's Ready-to-Wear Stores, which showed increases of 12.5% in transactions and 13.2% in sales, year over year.
For more information, use the link.

CU System briefs (11/29/2012)

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  • HARRISBURG, Pa. (11/30/12)--Credit union members whose phone numbers are located in the 814 area code are reporting receiving fraudulent text messages on their mobile devices, according to the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Nov. 29).  The text message states, "THE CREDIT UNION CENTER NOTICE: Your ATM/CARD has been DEACTIVATED. Please call the 24 hour Account Reactivation Line (814) 321-5079."  PCUA said that credit unions located in the affected area should be on alert for similar messages to their members. The 814 area code serves 27 counties in the northwestern and central regions of Pennsylvania …
  • MIDLAND, Texas (11/30/12)--A former loan officer of the Midland, Texas, branch of My Community FCU pleaded guilty of defrauding the credit union of $4 million in a fraudulent loan scheme involving more than $29,000 in kickbacks (Odessa American Nov. 28). Michael Ross Franco, who was a loan officer at the credit union from May 22, 2006, through Oct. 22, 2008, pleaded guilty Tuesday in a U.S. District Court in Midland on charges of conspiracy to commit bank fraud.  He allegedly approved about 487 fraudulent auto loans worth a total of $7 million without verifying loan documents or in some cases without receiving the loan application first. The dealership and Franco's contact there have not been identified. The credit union released a statement pointing out that the incident is more than three years old and is under investigation. The funds are federally insured and bonded and the credit union is "financial strong," the credit union said …
  • RICHMOND, Calif. (11/30/12)--A credit union president/CEO who was elected to the City Council in Richmond, Calif., on Nov. 6,  remains hospitalized with miningitus, according to Contra Costa Times (Nov. 27).   Gary Bell,  president/CEO of the $103 million asset Cooperative Center FCU, Berkeley, was diagnosed in the weeks before his Nov. 6 election. He was hospitalized before the election and again on Nov. 10 to undergo two surgeries to relieve swelling of the brain. Bell was elected to the city council with 15% of the vote, earning him the third and final vacant seat.  City staff agreed to waive penalties related to late campaign finance reports in light of his hospitalization, said the newspaper  …
  • CONCORD, N.H. (11/30/12)--A Compton, Calif., man was sentenced by a federal court in New Hampshire to 20 years in prison for a string of robberies that included the Manchester, N.H. branch of  Portsmouth-based Northeast CU.  Walter Williams, 44, pleaded guilty to that robbery as well as to two jewelry store holdups in Manchester and Tilton.  Williams was also sentenced to three years of supervised release.  Others arrested in relation to the credit union robbery included Williams' then-girlfriend, Shyloe Johnson, who pleaded guilty to aiding and abetting two robberies and was sentenced earlier this year; and Prince Sage, Brooklyn, N.Y., who pleaded guilty to the credit union robbery and is scheduled to be sentenced today. A fourth person, Delano Nelson, also of Compton, Calif., was indicted in the jewelry store robberies and will be tried in January.  Several others were charged in a state court with lesser offenses related to the heists  (Federal Information & News Dispatch Nov. 27) …