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Elevations CU credit score help featured in newspaper

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LONGMONT, Colo. (11/4/08)--A program at Elevations CU that explains credit reports and credit scores is featured in a Colorado newspaper's article about how consumers can protect their credit. Elevations CU is a $835 million asset credit union based in Boulder, Colo. Its program, Reality CheckUp explains to members how credit reports and credit scores work and offers steps they can take to improve both (Longmont Times-Call Nov. 2). The newspaper interviewed consumer advocate and consultant Remar Sutton, who was in Boulder to work with the credit union and its members and staff to discuss the nation's credit crunch and how that affects members and consumers. When the economy tanks, people jump into quick decisions that might cost them dearly later, Sutton said. The important thing consumers can do is to protect their credit score. He noted that credit card companies are tightening their credit to minimize their exposure to risk and the companies' actions can impact a credit score or the ability to obtain future loans. Sutton suggested to the credit union's members that they pay off their credit cards. If members carry more than 25% of their balance on their card, the credit card company may view them as a risk. Consumers can do two things if they find out their credit card company has raised their interest rate, Sutton said. They can:
* Transfer the balance to another card or * Contact a credit union or locally owned bank that isn't caught up in the mortgage crisis.
For the full article, use the link.

Arizona CUs see economic fallout in auto loans cards

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TUCSON, Ariz. (11/4/08)--Auto loan and credit card delinquencies have caused losses at several larger Tucson-area credit unions, according to a recent report based on second-quarter earnings by a company that rates banks and credit unions for consumers. The decline of the housing market has spilled over into other parts of the economy such as auto loans--traditionally a major staple for credit unions (Arizona Daily Star Nov. 2). “Unfortunately, the economic downturn has had an impact on our members, which in turn affects our credit unions,” Scott Earl, president/CEO of the Arizona Credit Union League, told News Now. “In response to the recent losses, our credit unions have tightened their lending practices. "It is important to point out, however, that our credit unions have steered clear of subprime lending, are well capitalized at 11%, remain in an excellent ratings standard and are all insured by the National Credit Union Share Insurance Fund (NCUSIF) up to $250,000 per account,” he added. Tucson (Ariz.) Old Pueblo CU, a $151 million asset credit union, took some losses this year in its auto portfolio, but still is on sound financial footing, Joe Mirachi, president CEO, told News Now. The credit union retained its “excellent” rating of four stars, from Bauer Financial, even though it lost $634,000 this year through the end of June. Bauer Financial is based in Coral Cables, Fla. “We continue to be well-capitalized,” Mirachi, who started at the credit union in Sept., 22, said. “And we have adequate liquidity. Although I’m not familiar with the exact process Bauer uses to evaluate credit unions, those likely are the factors that kept us with good ratings. We’ve also steered clear of subprime real estate lending.” About 69% of Tucson Old Pueblo’s loans are for autos, and the rest are for first and second mortgages, Mirachi said. To counter the losses, the credit union is tightening its lending and is growing its residential mortgage lending, he added. Tucson (Ariz.) FCU, a $249 million asset credit union, also has seen losses--of about $326,000 in the second quarter, prompting Bauer to lower its rating from superior to excellent. “There are many different components to financials to see how credit unions are doing--such as the strategic plans and business plans in place at different credit unions, so it hard to get a complete picture of a credit union’s performance from one rating or number,” Matthew Gaspari, Tucson FCU chief operating officer, told News Now. Delinquencies are low, classified assets are low, and the credit union is back into profitability, he added. Also, Tucson FCU recently opened two branches, which led to more expenses. “We’ve grown into our expenses, Gaspari said. “We’re experiencing good loan growth and super membership growth.” About 60% to 65% of the credit union’s losses are in auto loans. The rest is mostly in credit card debt, he added. Large vehicles are harder to pay for because of higher gas costs to fill up and higher loan payments, so most of the vehicles going into default at the credit union--about 65%--are larger ones, Gaspari said. “We’re not directly impacted by mortgage loans, but indirectly impacted, because consumers with mortgage problems have to make decisions about what loans to pay,” Gaspari said. “If people are put in a difficult situation, they have to make hard choices.”

California league CUs stable in crisis

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RANCHO CUCAMONGA, Calif. (11/4/08)--California's credit unions have been stable during the subprime mortgage meltdown and reported a 10% jump in fixed-rate first mortgages between January and June, reports the California Credit Union League in a newspaper article. "At a time when banks are staggering under losses from the subprime mortgage meltdown, most credit unions are dodging that bullet" and are engaging families about how to stay afloat amid a financial crisis, said the Inland Valley Daily Bulletin (Nov. 2). League President/CEO Bill Cheney notes in the article that credit unions are collateral damage in the banking crisis "but they're still out there trying to help members." Some credit unions are making special loans to members hit hard by the subprime mortgage crisis. Others invite families to attend financial literacy courses. "For people who are looking for mortgages right now, one of the best places to look is a credit union," said Ken Willis, founder of Upland, Calif.-based League of California Homeowners, in the article. Its members are eligible to join a credit union. Cheney told the publication that if it weren't for credit unions, banks would monopolize the market and charge everyone higher loan interest rates. For the entire article, use the link.

Fire closes Beacon CU branch

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ROCHESTER, Ind. (11/4/08)--The Rochester, Ind., branch of Beacon CU was closed after a fire damaged the interior of the credit union Friday evening. The cause of the fire is being investigated. Firefighters were able to control the blaze after 20 minutes, but were on the scene for five and a half hours, said Ryan Murphy, Rochester Fire Department assistant chief (WSBT 2 Nov. 1). News Now was unable to reach Beacon CU officials by press time. Beacon CU, based in Wabash, Ind., has $607 million in assets.

CU to divest auto dealership in Wisconsin

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RACINE, Wis. (11/4/08)—Educators CU will divest its auto dealership, under an agreement with its state regulator, the Wisconsin Office of Credit Unions (OCU), regarding the credit union’s ability to own and operate the dealership. The $1.018 billion asset, Racine, Wis.-based credit union established a retail automobile dealership to provide car-buying resources and used-car sales to its members and consumers in 2002. The Wisconsin Automobile and Truck Association filed a complaint with the OCU, saying that the credit union charter does not allow credit unions to offer this service, the credit union said. Educators CU believes the complaint was filed to prevent competition--each year more than 700 individuals purchase high-quality used vehicles, the credit union said. The OCU initially ruled that the State of Wisconsin Credit Union Statutes, Chapter 186, allows credit unions to own only car leasing services under the agreement, not retail car sales. The credit union appealed this ruling. “We have 18 months to have the law clarified or divest to a third-party,” Jim Henderson, Educators senior vice president, told News Now. “I believe we may have been successful in our appeal, but we do not want to spend any more credit union (member) dollars on legal fees to fight this ruling,” Eugene Szymczak, Educators president, said in a press release. “This settlement will allow us 18 months to get the law clarified to clearly allow this service or to transfer this business to a third party so that this consumer-friendly service can continue.” “We have literally saved members millions of dollars on the purchase and financing of their vehicles,” Szymczak continued. “In addition to pursuing clarity to the law, we will evaluate alternatives to sell the retail car business to a potential business partner who can provide value to members. “However, that business partner would need to operate under our core values of honesty, integrity, respect, fairness and service excellence. Anything less will not be acceptable,” he added. The credit union owns Educators Auto & Lease, a division of ECU Financial Services Inc. It provides used-car sales, new- and used-car leases, and new-car referral services. Its used-car inventory includes many late-model, low-mileage vehicles. All used cars include a three-day return policy and a 60-Day safety net, which covers the cost of most mechanical repairs for two full months after the purchase, the credit union said.

Five receive awards at CUNA Lending Council conference

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ORLANDO, Fla. (11/4/08)--Five credit unions Monday received CUNA Mutual Group’s Excellence in Lending Awards at the CUNA Lending Council’s 14th annual conference.
CUNA Mutual Group presented five credit unions with Excellence in Lending Awards Monday at CUNA’s Lending Council annual conference. Back row, from left: Lloyd Gill, chair, CUNA Lending Council; Andy Napoli, senior vice president, CUNA Mutual Group. Front row: Julio Rios, UW CU, Madison, Wis.; Penny Pratt, SAFE FCU, Sumter, S.C.; Pam Evans, First Alliance CU, Rochester, Minn.; Carmen Ramirez, ASI FCU, Harahan, La.; and Cindy Babin, US Community CU, Nashville, Tenn. (Photo provided by CUNA Mutual Group)
CUNA Mutual Group’s Andy Napoli, senior vice president, presented the ninth annual awards to:
* US Community CU, Nashville, Tenn.--Consumer Lending, assets less than $250 million category; * SAFE FCU, Sumter, S.C.--Consumer Lending, assets more than $250 million; * First Alliance CU, Rochester, Minn.--Mortgage Lending, assets less than $250 million; * UW CU, Madison, Wis.--Mortgage Lending, assets more than $250 million; and * ASI FCU, Harahan, La.--Low to Modest Means.
CUNA Mutual, with support from the CUNA Lending Council, established the Excellence in Lending Awards in 2000 to recognize credit unions that have implemented outstanding lending programs while demonstrating sound financial performance.

IChicago TribuneI CUs an alternative in banks crisis

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CHICAGO (11/4/08)--The Chicago Tribune Sunday suggested credit unions as an alternative to banks, especially when it comes to obtaining a loan. Credit unions experienced record lending volume this year, Jay Johnson, executive vice president of Callahan & Associates, told the newspaper. Credit unions experienced a 40% increase in first-mortgage lending compared with last year, while the overall market was down 17%. Credit unions also added 450,000 new members from March to June, Johnson told the newspaper. The Tribune also noted that credit unions:
* Provide lower fees than traditional banks, from ATM to overdrafts; * Offer better rates on certificates of deposit--3.06%, compared with banks’ 2.67% on average; * Take an individual’s character into consideration when lending, and offer payday alternative loans at lower rates than other payday lenders; and * Have federally insured deposits, up to $250,000 per depositor.

CUNA calls for AGM resolutions

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MADISON, Wis. (11/4/08)--In preparation for the Credit Union National Association (CUNA) Annual General Meeting (AGM), CUNA’s Corporate Governance Committee is asking member credit unions and leagues to submit resolutions no later than Jan. 9 Resolutions deemed appropriate by the committee will be presented for discussion and vote at the AGM on Feb. 23 in Washington, D.C. Adopted resolutions will move forward as recommendations to the CUNA Board. Suggested resolutions can be sent by:
* Mail to Office of the Corporate Secretary, CUNA, P. O. Box 431, Madison, WI 53701-0431; * E-mail to Theresa Hanson thanson@cuna.com; or * Fax at 608-231-4874.

Hoosier CUs net positive media coverage

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INDIANAPOLIS (11/4/08)--Indiana’s credit unions continue to generate positive media coverage, according to the Indiana Credit Union League. “The messages we have emphasized include credit unions as a bright spot and safe haven, how credit union differences benefit Main Street America, and that we are experiencing strong deposit and lending growth while other lenders cut back,” said Indiana league president John McKenzie. Examples of coverage include:
* McKenzie was a guest on TV program Inside Indiana Business where he delivered the credit union message. The show was broadcast in 11 Indiana cities. He also taped a segment for a university television station, was interviewed for an article in a statewide magazine--“A Bright Spot Amid a Cloudy Picture” for Building Indiana, was interviewed for a front-page story in the Fort Wayne Business Weekly and was interviewed for a story that will appear in the Indiana Employer; * Teachers CU CEO Rick Rice was interviewed by an NBA affiliate on Sept. 29; * Purdue EFCU CEO Bob Falk was interviewed by a Lafayette CBS affiliate; * Evansville Teachers FCU CEO Mike Phipps joined CEOs from Evansville banks to man a phone bank in a TV studio, taking calls from consumers about money; * Credit unions in the Southwestern Chapter purchased 46 commercials on three radio stations to air the message of safety and soundness; and * Credit unions in the North Central Indiana Chapter created and ran a newspaper ad addressing consumer concerns about strength, safety and soundness.

IUSA TODAYI Hampel discuss deposit shift to CUs

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McLEAN, Va. (11/4/08)--USA TODAY quoted Credit Union National Association Chief Economist Bill Hampel in a Monday article and noted that credit union deposits are growing. Consumers are shifting their deposits into credit unions and community banks as turmoil in the financial markets continue, USA TODAY said. It also cited a CUNA survey, which indicated that one-fourth of credit unions experienced above-average growth in deposits during the last six weeks. However, 40% of credit unions surveyed said the deposits were growing at a weaker rate than one year earlier. The slowdown is likely due to confusion over whether credit union accounts are federally insured--but credit union accounts are backed up to $250,000 by the National Credit Union Administration, Hampel told the newspaper. To read the full article, use the link.

Utah CUs healthy says league

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SALT LAKE CITY (11/4/08)--Utah credit unions “remained conservative during the wild party that a lot of other financial institutions were throwing themselves in,” Scott Simpson, Utah League of Credit Unions president, told The Salt Lake Tribune on Saturday. One doesn’t hear about many credit unions “getting into trouble,” added Mike Puentes, a Credit Union One member. Credit Union One, in West Jordan, has $83.9 million in assets (Salt Lake Tribune Nov. 1). IFA Employees CU, Salt Lake City, offers automobile and consumer loans to its members. The credit union is the state’s strongest, says the newspaper, and has less than $2 million in assets. Some credit unions are experiencing a slowdown in loan demand, as members “put the brakes” on spending, said Scott Webre, CEO of Box Elder County CU, Brigham City. When credit unions experience trouble, they go to other credit unions for help--instead of relying on taxpayers, Simpson said. For example, Intermountain CU, Salt Lake City, recently merged with America First CU after Intermountain’s net income declined and it experienced some troubled real estate loans. Intermountain has $41 million in assets and asked America First how to work through its financial difficulties. The $4.5-asset America First agreed to merge with Intermountain, the newspaper said.

Texas governor gets insight from CU leaders

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AUSTIN, Texas (11/4/08)--Texas Gov. Rick Perry met Friday with industry leaders, including Ayn Talley, Texas Credit Union League Chair and CEO of Houston Police FCU, and Dick Ensweiler, league CEO/president.
Texas Gov. Rick Perry (left), consults on current economic situation with industry leaders including, from left, Ayn Talley, CEO of Houston Police FCU and chair of the Texas Credit Union League (TCUL); Buddy Gill, TCUL chief advocacy officer; and Dick Ensweiler, TCUL CEO/president. (Photo provided by the Texas Credit Union League)
The meeting was called by the governor to discuss the national economic situation’s impact on Texas industries. Also present at the meeting were representatives from the Independent Bankers Association of Texas, Texas Association of Business, Texas Association of Manufacturers, Texas Association of Realtors, and the Texas Bankers Association. “Credit unions are doing well in Texas,” Ensweiler said. “We have seen an increase in deposits as people come to us as safe havens for their money. Fortunately we have over 10% in reserves, and can take in the deposits. We are making loans and are open for business.” Talley, whose credit union sustained substantial damage during Hurricane Ike, thanked the governor for his leadership during the storm. “Credit unions along the gulf coast are doubly challenged by both the economic storm and the damages wrought by Hurricane Ike,” noted Talley. “Some of us are operating inside temporary buildings, which can make it difficult to alleviate fears about the overall marketplace, yet we are seeing an increase in deposits.” Texas is ranked as the No. 1 state economy in the nation and generated nearly half of all jobs created in the nation from August 2007 to August 2008, according to the Financial Times. “Our state's disciplined, principled policies of limited growth in spending, low taxes and reasonable regulatory climate is fostering an environment that is encouraging job creation," said Gov. Perry. Perry plans to continue working and meeting with the public and private sectors to identify opportunities to maintain and enhance the state's economic edge, the league said. “As the industry representatives of seven million members of credit unions in Texas, we were glad to be consulted at the governor's meeting,” Ensweiler said. “He recognizes that our industry is not part of the problem in the financial markets, but can be part of how the country bounces back. We look forward to continuing to be a hard working partner in the future of the state.”