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Hope Community CU a finalist in McNulty Prize

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ASPEN, Colo. (11/6/08)--William Bynum, founder of the Hope Community CU in Jackson, Miss., is one of five finalists for the inaugural John P. McNulty Prize. The prize was created to help address social, economic and political challenges of the time. The $100,000 McNulty Prize winner will be announced tonight at the Aspen Institute Leadership Awards, to be moderated by Barbara Walters. Bynum founded the $63.5 million asset credit union to serve the "unbanked" of the Mississippi Delta region. The credit union has helped thousands of members get resources they needed to rebuild their lives and homes after Hurricane Katrina devastated the Gulf Coast area in 2005. The other finalists are:
* Dr. Jordan Kassalow, chairman and co-founder of VisionSpring, which delivers affordable reading glasses to poor communities; * Patrick Awuah, founder of Ashesi University, the first liberal arts college in Ghana; * Mehrdad Baghai, founder of High Resolves Initiatives, Australia, which teaches high school students about leadership; and * Sylvia Gereda, founder of Switch, a magazine by and for young people in Guatemala.

CU System briefs (11/05/2008)

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* WINNIPEG, Manitoba (11/6/08)--Credit unions in Manitoba are attracting Canadian investors looking for high interest rates and a safe haven for cash, according to the Winnipeg Free Press (Nov. 56). In September and October, deposits at Achieva Financial, the virtual arm of Cambrian CU, were double those of July and August. Much of the increase was from depositors outside the province. Achieva and the financial arms of Assinibone CU and Westoba CU had the top rates in Canada on Tuesday for five-year non-redeemable GICs--at 5%, said Cannex Financial Exchanges Ltd. Cannex tracks interest rates in Canada … * BELLINGHAM, Wash. (11/6/08)--Thieves caused about $33,000 in damages to an ATM owned by Washington Educational CU in Bellingham, Wash., Tuesday when they attached a cable to it and towed it away from the building with a stolen van. Damaged ATM parts were strewn along the sidewalk and parking lots in the area. A major portion of the machine was found two blocks away, along with the van. No money was believed to have been taken, said police (US Fed News Nov. 4) … * MADISON, Wis. (11/6/08)--The merger of $751.3 million asset Summit CU and $422.1 million asset Great Wisconsin CU has been completed. The two Madison-based credit unions are now called Summit CU. Members voted for the merger on Monday (Wisconsin State Journal Nov. 4) …

Leagues CUs make difference in state elections

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MADISON, Wis. (11/6/08)--Many credit unions and leagues Wednesday were assessing the successes of candidates they supported in their state's elections. The verdict: credit unions made a difference.
North Dakota Republican Gov. John Hoeven addressed credit union professionals at a Mid-America Credit Union Association legislative forum in Bismarck, N.D., in October. Hoeven, re-elected Tuesday, was supported by the North Dakota credit unions' Governmental Affairs Committee. (Photo provided by Mid-America Credit Union Association)
Gov. Christine Gregoire (D), supported by the Washington Credit Union League, was declared the winner in that state's gubernatorial race by media outlets. However, Gregoire's challenger, Dino Rossi, who lost the race four years ago by fewer than 150 votes, had not conceded by press time. By Wednesday afternoon, Gregoire had 53.3% of the vote compared with 46.6% for Rossi, pretty much assuring a Gregoire victory, Mark Minichiello, league vice president of legislative affairs, told News Now. The league conducted fundraisers and gave financial support to Gregorie, Minichiello added. Re-elected to a third term was New Hampshire Gov. John Lynch (D) over challenger Joseph Kennedy. “The New Hampshire Credit Union League congratulates Gov. Lynch on his resounding victory [75% to 25%] on Tuesday," said Dan Egan, league president. He told News Now that Lynch "is a great friend of the movement, who clearly understands the important role that credit unions play in the financial life of the people of New Hampshire. He has been extremely supportive of credit union financial literacy programs and has gone out of his way to attend and spend time at credit union annual meetings throughout the state.” North Carolina Democrat Beverly Perdue became the state’s first woman governor. Both Perdue and her opponent, Charlotte Mayor Pat McCrory, are well-versed on credit union issues, Mickey Fanney, grassroots/political action specialist, North Carolina Credit Union League, told News Now. “Credit unions worked with both campaigns to make an impact on the candidates’ views and perspectives on credit union issues in the state,” Fanney said. The league "looks forward to working with Gov.-elect Perdue over the next four years.” In North Dakota, Republican Gov. John Hoeven, a former banker whose family owns and operates several state-chartered banks, soundly won re-election for a third term with 75% of the vote, Jeff Olson, political affairs/public relations director for Mid-America Credit Union Asssociation, told News Now. “Gov. Hoeven’s re-election is only the second time in the state’s history that a governor was awarded a third term,” Olson said. “However, he is the benefactor of Republican majorities in both chambers. He will enter the upcoming legislative session with a budget surplus of $1.2 billion. The North Dakota Governmental Affairs Committee supported Gov. Hoeven with a significant Credit Union Political Action Committee (CUPAC) contribution. “The governor’s race was the only constitutional race we supported. The rest of our CUPAC contributions went directly to legislative candidates,” he added. “Gov. Hoeven addressed credit union professionals at our recent legislative forum in Bismarck this past October.” In Utah, Republican Jon Huntsman was easily re-elected to second term as governor with roughly 73% of the vote. The Utah League of Credit Unions did not participate in the gubernatorial race, instead focusing on supporting credit union-friendly candidates in the state House and state Senate, Steve Hunter, league director of government affairs, told News Now. The Association of Vermont Credit Unions (AVCU) supported 88% of the candidates that were elected in the state, including incumbent Gov. Jim Douglas (R). “We’ve had a pretty supportive state legislature in the last session,” AVCU President/CEO Joe Bergeron told News Now. AVCU expects the same support--or more--in the next session, he added. Delaware’s Rep. Mike Castle (R) was re-elected. “He has been accepting of meeting with credit unions,” Alice Smith, director of communications for the Delaware Credit Union League, told News Now. Sen. Joe Biden (D-Del.) was elected vice president of the U.S., and so the Delaware governor will have to appoint a new senator. The league is looking to establish new relationships with that individual, Smith said. “We’d love to have a meeting with Biden,” she added. “We’re very proud that Delaware has the vice president of the U.S.” The Missouri Credit Union Association (MCUA) endorsed eight candidates who were elected:
* U.S. Rep. Todd Akin (R-District 2); * U.S. Rep. Roy Blunt (R-District 7); * U.S. Rep. Russ Carnahan (D-District 3); * State Sen. Tim Green (D-District 13); * State Rep. Cynthia Davis (R-District 19); * State Rep. Charlie Denison (R-District 135); * State Rep. Albert Liese (D-District 79); and * State Rep. Paul LeVota (D-District 52).
Clint Zweifel, a longtime credit union supporter, was elected as state treasurer. During his campaign, Zweifel said he is open to working with credit unions on legislation to allow credit unions greater flexibility in reaching out to consumers with alternatives to payday loans (The Missouri Difference Nov. 4). State Rep. Judy Baker (D-Columbia), lost her bid in the Congressional District 9 race. Baker had pledged credit union support, saying “Your values are my values.” “We would have enjoyed having Baker in Congress,” Amy McLard, MCUA vice president of public and legislative affairs, told News Now. Jay Nixon was elected Missouri governor. MCUA met with Nixon’s campaign staff before the election. “We look forward to working with him and building on that relationship,” McLard said. In Indiana, all incumbent congressmen won, and all support credit unions, said the Indiana Credit Union League. "We were especially pleased to see that CURIA co-sponsors Brad Ellsworth (D-8) and Dan Burton (R-5) won their races with 65% of the vote," said league President John McKenzie. "The league and Indiana credit unions helped both campaigns by hosting fundraisers. In the instance of the Ellsworth campaign, Evansville Teachers FCU President Mike Phipps held a fundraiser at his home that raised more than $10,000 for the campaign."

CU damages in Hurricane Ike total 10.2 million

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MADISON, Wis. (11/6/08)--Damage claims made by credit unions hit by Hurricane Ike in September total more than $10.2 million--the second largest total in the past eight to 10 years, said CUNA Mutual Group. However, "this pales in comparison to Katrina in 2005" and Hurricane Andrew earlier, said Mike Retelle, claims manager with CUNA Mutual's property and casualty claims. Damages to credit unions in Katrina totaled $22 million. Ike, which hit Galveston Island, Texas, was different in size and duration, Retelle told News Now. "It covered a larger area and stayed in the area longer. Damages weren't as severe, but we had claims from states as far away as Kentucky and Tennessee." Ninety-five credit unions made damage claims for 256 locations. Roughly 90% of the claims were from Texas, Retelle said. Ike's damage to credit unions mostly was from blown off roofs and downed trees. Houston Police FCU sustained the largest damage--$2.2 million in roof damage--and is operating from modular units. In Ike, damages were more concentrated. "They were enormous and terrible, but focused," he said, while damages stemming from Katrina were due to a failure of the levees. Katrina's damages also included damages from Hurricanes Wilma and Rita. "Surprisingly, we haven't had a lot of auto damage claims yet," Retelle said. Normally claims for auto damage, both for credit unions' vehicles and repossessed cars trickle in about 30 to 60 days after the disaster hits. "Credit unions concentrate first on getting back up and running." Credit unions were well prepared for Ike, since the National Credit Union Administration (NCUA) mandates they have a disaster plan. The things credit unions need to do don't change from disaster to disaster. "It all comes down to planning. What will you do if you should have a disaster? Do you have flood insurance or the proper limits? Where will you go?" However, credit unions do need to update their plans regularly, Retelle said, outlining areas credit unions can focus on during disasters:
* Update the logistics in the plan. Say the credit union remodeled its basement recently and the space, which used to be part of a contingency plan, is no longer available. The plan needs to reflect that. * Update claim limits to reflect new expenditures, equipment or data processing. Otherwise, the costs may not be covered in the claim. Credit unions that have consolidated or grown through mergers also need to address this issue. * Spread the responsibility. "We ask credit unions to provide a main contact, but if that person's home is gone or a spouse dies, that person is no longer available. Boards have to take responsibility," said Retelle. "You have to have decision makers." * Keep the future in mind when planning. Do you really want to replace old equipment with the same old equipment, or do you want to update it if you have to replace it?
Retelle said planning can keep at bay these problems, which credit unions sometimes experience:
* Keep communications with staff open. "This is the biggest issue. If you don't tell employees what to do, then a secondary disaster can occur." Staff might find other jobs, thinking the credit union is shut down permanently instead of closed for two weeks. * Remember that relationships are key in any industry. The worst time to go looking for contractors for a new building, repairs, data processing or security firm is during a disaster. During a disaster, credit unions may be tempted to treat every repair with the cheapest dollar. Hiring a cut rate plumber to fix a leak might not work if he doesn't know how to operate a sprinkler system, he said.

Shots fired in CU robbery no one hurt

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HOUSTON, Texas (11/6/08)--Two men armed with shotgun-type weapons fired two shots during a robbery Wednesday morning at credit union branch in Spring, Texas. No injuries were reported. Harris County deputy constables said the men held up the Spring branch of Houston-based InvesTex CU at about 9 a.m. (Click2Houston.com Nov. 5). The men got a security guard's gun away from him and fled with an undisclosed amount of cash. The branch was temporarily closed until further notice due to a "security incident," said the credit union's website.

Arizona CUs help defeat payday lender proposal

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PHOENIX (11/6/08)--The Arizona Credit Union System (ACUS) and credit unions succeeded in helping defeat Tuesday a payday-lender backed referendum that would have locked in exorbitant interest rates on payday loans.
Robin L. Romano, CEO of MariSol FCU, Phoenix, shows off materials that helped defeat payday lenders' Proposition 200 in Tuesday's elections in Arizona. (Photo provided by the Arizona Credit Union System)
Proposition 200 was defeated by a large 20-point margin, with 60% of voters against and 40% for the measure, said Austin De Bey, ACUS vice president of government affairs. The measure was billed by the payday lending industry as a "reform," but it would have locked in interest rates on payday loans at 391% permanently, said De Bey. Currently payday lenders charge up to 450% on loans. "They wanted to remove the sunset," he said, referring to the fact the payday statute will sunset in 2010. "All of Arizona credit unions can be proud of helping to defeat Proposition 200," he said. "Our credit unions passed out handouts in branches and at ATM locations, and had graphics as well" urging defeat of the proposition, he told News Now. Thirty of the state's credit unions, representing 1.4 million of the 1.6 million members in the state, participated. The credit unions helped raise $50,000 for radio ads, he said, adding the payday lending lobby spent about $15 million on the measure. The Durham, N.C.-based Center for Responsible Lending, also opposed the measure.

Ohio payday referendum story notes CU as alternative

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CLEVELAND, Ohio (11/6/08)--A pre-election story in the Cleveland Plain Dealer notes credit unions as an alternative to payday loans, just before Ohio voters were to decide the fate of a payday loan referendum. The newspaper cited Faith Community United CU’s (FCUCU) payday loan alternative--which offers one-month loan of $500 at an annual percentage rate of 17% (The Plain Dealer Nov. 2). The story focused on Ohio’s payday referendum--Issue 5, or House Bill 545--which was voted on in Tuesday’s election. At press time, the referendum was ahead with 67% of the vote counted. If passed, annual interest rates on payday loans would be capped at 28%, payday loans would be limited to $500, lenders would be required to give consumers at least 30 days to repay the loans, borrowers would only be allowed to take out four payday loans a year, and a state database would be created so lenders wouldn’t unknowingly grant more payday loans beyond a consumer’s limit. If the referendum does not pass, payday lenders can continue charging 391%. Issue 5 was backed by the Center for Responsible Lending of Durham, N.C. The Ohio Credit Union League didn’t advocate a position on the bill because it doesn’t affect credit unions directly. Rita Haynes, FCUCU president, who will receive the 2009 Herb Wegner Award for Individual Achievement during the Credit Union National Association’s Governmental Affairs Conference in February, wrote a letter in response to the article. “This subject is very dear to me because we have seen so many lives destroyed by these culprits who only want to make outrageous profits on the back of the poor undereducated in financial matters,” Haynes wrote. She also noted the credit unions’ “Greater Grace” program that pays off four to five payday loans directly if the borrower works, agrees to payroll deduction and signs an agreement never to go back to a payday lender.

Outbound-call strategy key to indirect-borrower ties

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ORLANDO, Fla. (11/6/08)--Devoting the necessary resources and implementing an exclusive outbound-calling strategy are key to successfully building multi-product relationships with indirect borrowers, CUNA Lending Council attendees were told Tuesday. Heather Thiltgen, vice president, consumer programs at CUNA Mutual Group, provided insights on how credit unions can turn “one-and-done” indirect borrowers into profitable members. She presented results from a four-month CUNA Mutual Group research pilot project that published a white paper, “Developing Members from Indirect Borrowers: Lessons Learned.” The research project involved 13 credit unions. It found that by implementing the right strategy, credit unions can deepen relationships with indirect borrowers. During the pilot, trained outbound-calling representatives offered additional credit products to members, including lines of credit, additional auto loan and credit care, based on need. The overall cross-sales rate for the pilot was 21%. Credit lines were the most successful cross-sale products at 28%. Auto refinances had a 15% sales rate, and credit cards a 17%. “It is very important that your sales reps have outbound-calling experience,” Thiltgen said. “There is a temptation for some credit unions to use down times for inbound reps to attempt outbound call programs, but it should be avoided,” she said. “Outbound and inbound skill sets are very different.” The dedicated outbound-calling staff should have a financial services background and be entrepreneurial, Thiltgen added. “We recommend that reps be well-trained and be salaried with incentives for meeting productivity goals,” she said. “And, there needs to be performance expectations up front, for example calls per hour and a percent cross-sale rate.” Choosing the right outbound-call rep is a key to any program’s success. As part of the research project, rep interviews attempted to determine if they were sufficiently outgoing and bold enough to ask for the sale. “But we also preferred an educational service call, as opposed to an aggressive sales call. The sales philosophy requires assertiveness balanced with a strong service orientation and credit union values,” Thiltgen said. The CUNA Mutual research project revealed members are receptive to outbound calls. “Even if you don’t close new business during the call, it has a relationship-building benefit,” Thiltgen added. “Most members thanked the rep for the call, even if they failed to purchase an additional product.” The research also revealed members are best reached on their home phones, Monday through Thursday, 3 p.m. to 7 p.m. and on Saturdays. Thiltgen said it took an average of 3.2 attempts to make contact with members, and that 10% of the phone numbers call reps received were incorrect. “This could be viewed as a wake-up call for credit unions to check the accuracy of member phone numbers,” she said. “A proactive approach to securing more business from indirect borrowers is the wave of the future,” Thiltgen said. “Our research showed that a dedicated outbound-calling strategy can engage otherwise one-and-done members in a way that will meet their needs and save them money.”

CUNA to continue Filene-like 30 Under 30 group

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MADISON, Wis. (11/6/08)--The Credit Union National Association (CUNA) is launching a new version of the Filene Research Institute’s “30 under 30” group to help make credit unions more relevant--as financial institutions and employers--to young adults. When Filene was first created, the group decided to develop it for a year then open it up to other interested parties in the credit union movement, including CUNA. CUNA plans for the group to continue as a problem-solving team comprising credit union professionals under the age of 30. They still will be tasked with developing products, services, programs and strategies to attract young adults. CUNA will begin searching for group members in early 2009. Specifics of the new program will be revealed during CUNA’s YES Summit, Dec. 3-5 in Tampa, Fla. By attending the summit, attendees will return to their credit union with ideas and information to better serve and attract young adults (18-30 year olds) in their field of membership. Additional information on the group itself and the application process will be posted on CUNA’s website in January.