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League makes CU MBL case at field hearing

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SOUTHFIELD, Mich. (12/1/09)--Michigan Credit Union League President/CEO David Adams testified Monday before a House Financial Services subcommittee in Southfield, Mich., urging Congress to lift the cap on credit union member business lending. Rep. Gary Peters (D-Mich.), a member of the House Financial Services Committee, invited the subcommittee on Oversight and Investigations to examine small business lending with leaders from Michigan’s business and financial sectors, including Adams. Rep. Dennis Moore (D-Kansas) chaired the meeting. Reps. Peters, John Dingell (D-Mich.) and Mark Schauer (D-Mich.) also attended. Adams urged support for H.R. 3380, The Promoting Lending to America’s Small Business Act, which seeks to increase capital available to small businesses. Adams provided an example of a credit union in Schauer’s district that has reached its 12.25% cap but would like to continue lending. “While Michigan credit unions hold more than three-quarters of a billion dollars in small business loans, their authority could increase by as much as $1 billion if the federally imposed cap on member business lending were lifted by Congress,” Adams said. “Michigan’s credit union industry is prepared to assist Michigan’s small businesses further with their challenges in securing credit,” he added. “As of June 30, Michigan credit unions are funding more than 6,300 small business loans. Nearly 1,000 of these loans have been funded by credit unions since Jan. 1, totaling more than $100 million in new small business credit.” Credit unions’ small business loans have increased 72% during the past three years and 110% in Michigan during the same period. Credit union small business lending was up 17% in June over June 2008, while data indicate that bank business lending decreased during the third quarter for the fourth consecutive quarter, Adams said. Other points Adams made during the testimony:
* The Capital Purchase Program, which reduces the cost of capital to community banks, should be extended to credit unions so they can access the 3% cost of capital; * Increasing the Small Business Administration loan sizes to $5 million could be helpful, but would be most effective if the guaranty percentage remained at 90%; and * The Invest in America program, which provides discounts to those who receive financing from a credit union on an eligible new or used vehicle from General Motors and Chrysler, has facilitated 200,000 vehicle sales since its inception.
The Credit Union National Association supports the Promoting Lending to America’s Small Business Act. The act could put as much as $10 billion into small businesses, and create 108,000 jobs at zero cost to taxpayers, CUNA has said.

Filene CUs can reimage the home ownership dream

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MADISON, Wis. (12/1/09)--Credit unions are challenged to consider the past and current trends in home ownership, to think beyond mere mortgages, and consider how to redefine the American dream in the Filene Research Institute’s most recent innovation report. “Reimagining the Dream: The Future of Home Ownership,” by Denise R. Gabel, Filene chief innovation officer, challenges readers to identify potential treatments by developing and implementing game-changing ideas that could reshape the residential lending marketplace, and simultaneously benefit borrowers and lenders. Financial innovation has too often benefited sophisticated market players, Gabel said. The ideas included in the report seek consumer-friendly innovations. Gabel asks credit unions to consider some thought-provoking questions, including:
* How can home loans be made more flexible for the borrower over the full term of the loan to accommodate periodic changes in income and employment? * What ideas can be developed that blend renting and owning? Can the rent-to-own model be made relevant again? * Since the down payment is one of the biggest obstacles to home ownership, are there ways to lower or remove this barrier? * Because a borrower’s direct relationship with the originating lender is often terminated when a home loan is sold to another lender or to a servicing company, how can this relationship be preserved?
“The opportunity is ripe for credit unions to find creative solutions that will help existing members, attract new members, and contribute to the financial stability of communities,” Gabel said. “Too often, however, product development is driven by balance sheet and income statement considerations first, and consumers’ needs second. Credit unions should look to members’ needs first.” Then, credit unions should drive product development accordingly by questioning how they can help members achieve their vision of “home,” whatever that may be, even during extraordinary times, she added. For more information, use the link.

Virginia CUs add almost one million members since 2005

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LYNCHBURG, Va. (12/1/09)--Consumers are turning to Virginia’s credit unions in record numbers, according to data collected by the National Credit Union Administration (NCUA). Roughly 170,000 consumers opened accounts at Virginia-based credit unions between July 2008 and June 2009, and nearly one million new members have been added since year-end 2005. Membership for Virginia’s credit unions stood at 6.3 million in June 2009. About three million reside in the commonwealth. Many military and former military credit unions based in Virginia count members worldwide. Credit unions in Virginia also originated more than 622,000 loans worth $17.3 billion during the first half of 2009, according to NCUA data. “Virginia’s credit unions are still lending, thanks to strong capital and the fact they avoided the risky lending practices now plaguing so many other institutions,” said Virginia Credit Union League President Rick Pillow. “Consumers also are discovering [that] credit unions are the smart choice for a financial partner, as families seek to cope with the challenges of today’s economy. “With better rates and fewer fees, Virginia’s credit unions are saving their members an estimated $869 million annually compared with the cost of loans and services at other financial services providers,” he added. As for mortgage loans, Virginia credit unions made more than $7.73 billion in first, second and other mortgage-related loans during the first six months of the year. First-mortgage lending experienced an annual growth rate of 17.7% for June 2009. The growth rate was 36.4% for calendar year 2008 and 33.3% for 2007. Although consumer demand nationwide for new-auto loans has dropped, Virginia credit unions still reported about $5.8 billion in such loans as of June 30. Outstanding loans for pre-owned automobiles totaled nearly $6 billion as of June 30, an almost $300 million increase since December 2008. Virginia’s credit unions also reported increased member business lending, filling an important need as small businesses seek credit to grow and sustain their operations and provide a boost to the economy, the league said. Member business loans account for almost $513 million of Virginia credit unions’ combined loan portfolio, but that number is rising. The annual growth rate for member business lending hit 48.1% as of June. A bill pending in Congress could open the door for more small businesses seeking credit through credit unions by raising a restrictive cap on member business loans, the league said. “Virginia’s credit unions remain a safe harbor for their members’ savings and other accounts, despite the economic woes,” Pillow said, adding that there’s no better time to be a credit union member.”

Florida CU regulator reaccredited by NASCUS

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ARLINGTON, Va. (12/1/09)--The state regulator for Florida's credit unions has been reaccredited by the National Association of State Credit Union Supervisors (NASCUS). The Florida Office of Financial Regulation (OFR) Bureau of Credit Union Regulation is responsible for the regulation and examination of 79 state-chartered credit unions with about $19.5 billion in total assets. Florida was first accredited in 2004. The accreditation "is yet another indication that we are properly safeguarding deposits in Florida's state-chartered financial institutions,” said OFR Commissioner Tom Cardwell. “These are rigorous national standards and I am extremely proud of the OFR Financial Institutions Team.” NASCUS accreditation is valid for five years, subject to annual review. The annual review process enables the accredited agency and the NASCUS Performance Standards Committee to measure progress and improvement. NASCUS’ 28 accredited states supervise more than 85% of the nation’s state-chartered credit union assets.

Kenyan CUs escalate HIVAIDS efforts

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MADISON, Wis. (12/1/09)-- Kenyan savings and credit cooperatives (SACCOs), or credit unions, will boost their efforts this week to fight HIV/AIDS as a part of World AIDS Day, which is being celebrated today.
Click to view larger image The World Council of Credit Unions raised funds to build a new kitchen at Busia Compassionate Care Centre, Kenya. The orphanage houses roughly 50 children--several of whom are infected with HIV/AIDS. The funds were raised as a part of WOCCU’s efforts to spread awareness about the viruses in lieu of World AIDS Day. (Photo provided by the World Council of Credit Unions)
This year’s theme is “HIV: Reality.” SACCOs play an active role in combating the viruses and helping the families of those who die from HIV/AIDS, according to the World Council of Credit Unions (WOCCU). Of those living with HIV/AIDS in 2008, 22 million lived in sub-Saharan African countries, including Kenya. About 2.7 million people--1.9 million of whom lived in sub-Saharan Africa--were newly infected last year, up from 2.5 million infected in 2007. “As trusted member-owned and operated financial cooperatives, SACCOs play a vital role in many aspects of the communities they serve,” said Pete Crear, WOCCU president/CEO. “SACCOs provide education and social support in an attempt to help mitigate the impact of this deadly disease.” In the community of Kericho, Ndege Chai SACCO will participate in a government-organized World AIDS Day event to more actively address HIV/AIDS’ impact in the community. The SACCO has established a scholarship fund for secondary school-age AIDS orphans and has mobilized orphan groups to help improve their economic status. The event will focus on creating public awareness of HIV/AIDS through talks, music, bodybuilding, beauty and soccer contests. Both the SACCO and WOCCU office have contributed funds to help underwrite the cost of the event. In Wagi, CENT SACCO is participating in an event organized by the Transformative Agents of Change Initiatives, which promotes HIV/AIDS prevention and treatment and increases awareness among youth through sporting events and community theater. The event will include presentations by healthcare providers, sporting activities and contests. The local WOCCU office donated 20 sports balls to the effort. In Kisumu, WOCCU program staff raised $537 and the program matched the donation for a total of $1,073 to build new kitchens for two orphanages. Busia Compassionate Care Centre lost its kitchen during a recent rain storm. The orphanage houses 49 children ranging in age from two months to 17 years, of which 13 are HIV-positive and currently on antiretroviral treatment. Migosi Orphanage Home has 30 children ranging in age from one to 20 years, of which five are HIV-positive and currently receiving treatment. “Kenya's SACCOs play an important role in helping educate members and care for orphans of AIDS victims,” Crear said. “In Kenya and in other African nations, part of the mission of serving members is also doing what you can to help save lives.”

The 1 CU Conference to draw 2500 CU leaders

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MADISON, Wis. (12/1/09)--More than 2,500 credit union leaders are expected to attend The 1 Credit Union Conference, July 11-14, in Las Vegas. The conference, which will be held one year only, combines America’s Credit Union Conference and the World Credit Union Conference into one event. America’s Credit Union Conference and Expo, sponsored by the Credit Union National Association (CUNA), and the World Credit Union Conference, sponsored by the World Council of Credit Unions (WOCCU) will not be held as individual events in 2010. CUNA and WOCCU are combining the two conferences into one event that will offer attendees four days of networking opportunities and educational sessions. The nation’s economic conditions have triggered shaky consumer confidence and rising expectations, which present challenges for credit unions worldwide. The 1 Credit Union Conference aims to give credit union leaders some ideas on how credit unions can innovate and get a leg up on the competition, CUNA said. “Our combined conference provides the best and most economical opportunity we can offer for all of us to find the resources we need to help our credit unions survive and thrive,” said CUNA President/CEO Dan Mica. The event will be held at the MGM Las Vegas. More information will be available in early 2010. For more information, use the link.

Federation cancels this weeks CRA seminar

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NEW YORK (12/1/09)--The Federation of Community Development Credit Unions is cancelling its seminar on the Community Reinvestment Act (CRA) this week. The seminar, “Credit Union Outreach, Community Reinvestment, and Credit Unions: Facts. Resources. Strategies” was scheduled for Thursday in Alexandria, Va. “A labor dispute at our planned location forced us to cancel,” said federation President/CEO Cliff Rosenthal. “It also became apparent to us that urgent legislative priorities were taking the attention of many of our presenters and attendees, so we have decided to postpone this session.” The federation plans to reschedule the seminar in the spring. All registrants have been contacted and fees have been refunded.

Largest CUs banks surveyed on ID fraud prevention

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PLEASANTON, Calif. (12/1/09)--The nation’s largest credit unions and banks have recently been ranked on 50 fraud prevention, detection and resolution capabilities. The 2009 Banking Identity Safety Scorecard, issued by Javelin Strategy and Research, ranks how well financial institutions team up with members or customers to avoid criminals that commit identity theft. Navy FCU, Vienna, Va., was one of several institutions to earn perfect scores in 11 identity fraud resolution criteria (Wireless News Nov. 21). The report also noted that most financial institutions:
* Scored about 27 percentage points higher than last year; * Curtailed the use of Social Security numbers for routine authentication; * Use third-party security vendors for online safety, such as McAfee and Symantec; * Offer zero-liability protection and next-day replacement of lost or stolen debit cards; and * Have strengthened education, with all the top financial institutions offering anti-phishing e-mail education online.
The scorecard uses online research and mystery shopping to score credit unions and banks. The security measures are based on consumer behavioral research, new technology and review of changing crime patterns. Identity fraud cost victims about $496 out-of-pocket and 30 hours’ worth of personal resolution hours in 2008, Javelin said.

N.Y. small CUs tell what keeps them up at night

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ALBANY, N.Y. (12/1/09)--Future credit union leadership, growth, staff and membership retention are just a few things that keep small credit unions awake at night, according to the Credit Union Association of New York.
Click to view larger image Presenter Mark Smith discussed strategies for credit union survival and growth at the Credit Union Association of New York’s fifth annual CEO Roundtable for credit unions with assets up to $50 million. (Photo provided by the Credit Union Association of New York)
The association recently held its fifth annual CEO Roundtable Nov. 17-18 in Syracuse, N.Y. The event was geared toward credit unions with $50 million in assets or less. “The association first developed this event not only to present learning and networking opportunities for our member credit unions with up to $50 million in assets, but also to have a better understanding of the issues, wants and needs of those credit unions’ executives,” said William J. Mellin, association president/CEO. During the roundtable, groups of credit union representatives discussed some of the challenges they face. Some of the concerns included:
* Long-term viability of credit unions and corporates; * Future credit union leadership; * Net worth and earnings; * Loan losses and delinquency; * Compliance with National Credit Union Administration rules; * Growth; * Staffing issues; * Member retention; and * Liquidity access.
Presenter Mark Smith, CEO of Mark Smith Inc., a Utah-based consulting firm for small and mid-sized credit unions, also encouraged credit unions to “think outside the box” when dealing with things such as asset liability management, and presented examples of how credit unions can generate more income. George Towle from The Rochdale Group plus CUNA Mutual Group also participated in the roundtable. Alison Doney, association community development coordinator, spoke about ways credit unions can reach new demographics through Facebook, Twitter and other online media.

CU System briefs (11/30/2009)

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* COLUMBIA, Md. (12/1/09)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) has announced two new advocacy staff members. Rob Ulmer, vice president of advocacy, has a law degree from American University and received a bachelor’s degree from Elizabethtown College, Pa. (Focus newsletter Nov. 30). He has worked for several Washington, D.C.-area law firms. Ricardo Pineres, director of legislative affairs and grassroots, has a law degree from George Washington University and a bachelor’s degree from James Madison University. Pineres will take the bar exam in Virginia in February. He recently worked for U.S. Rep. Glenn Nye (D-Va.) (Photos provided by the Maryland and District of Columbia Credit Union Association) ... * OKLAHOMA CITY (12/1/09)--Two Oklahoma credit unions have merged into one credit union that has more than $300 million in assets, according to local media reports ( Nov. 25). Oklahoma Employees CU, Oklahoma City, has merged with Oklahoma City Thrift FCU. Oklahoma Employees CU will retain all of its staff, branches and assets. The credit unions chose to merge to provide more services to members, the news outlet said. Oklahoma Employees CU also will open a new branch late next year ... * PALO ALTO, Calif. (12/1/09)--Addison Avenue FCU, Palo Alto, Calif., has acquired USE CU’s San Jose branch. USE CU is based in San Diego and has $804 million in assets. Addison Avenue has $2.3 billion in assets. The acquisition will add 4,000 members to Addison Avenue FCU. The USE branch has $60 million in deposits (Datamonitor Nov. 24) ... * PLYMOUTH, Mich. (12/1/09)--The Battle Creek and Flint chapters of the Michigan Credit Union League recently held legislative breakfasts, reaching eight lawmakers and staffers about state legislative and credit union issues (Michigan Monitor Nov. 23). The Battle Creek breakfast was held Nov. 9. Forty credit union representatives attended. State Sen. Mike Nofs (R), and State Reps. Rick Jones( R) and Kate Segal (D), and staff from Sen. Nofs’ office were present. They discussed financial elder exploitation legislation, education funding and economic development. The Flint Chapter met Nov. 13 with State Sen. Deb Cerry (D); State Reps. Lee Gonzales (D), Rick Hammel (D), and Woodrow Stanley (D); and Linda Kingston, legislative assistant for Rep. Jim Slezak (D), attended. They talked about Michigan’s tax structure, term limits and attracting and retaining business in Michigan. Top photo: Segal (left), Nofs and Jones discuss legislative issues at the Battle Creek breakfast. Bottom photo: Gonzales addresses members of the Flint chapter. (Photos provided by the Michigan Credit Union League) ... * HARRISBURG, Pa. (12/1/09)--Bucks First FCU, Bristol, Pa., opened a full-service, student-run branch at Palisades High School in Kintersville Nov. 19. Joe Wambach, executive director of the Pennsylvania Credit Union Foundation, attended the grand opening. Bucks First received a financial literacy grant from the foundation for the project. The credit union will offer financial education and training for youth interested in business and finance, the Pennsylvania Credit Union Association said (Life is a Highway Nov. 24). The branch will be modeled around the credit union’s youth financial education program, Project Flipside, which uses youth to write blogs, connect with other youth through social media, and travel the county to teach financial literacy. Pictured are school officials, credit union staff and board members at the opening of Bucks First FCU’s student branch in Kintersville. (Photo provided by the Pennsylvania Credit Union Association) ...