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Irish regulator proposes emergency CU fund

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DUBLIN, Ire. (11/10/08)--Ireland's credit union regulator has contacted the Irish League of Credit Unions and other associations, asking them to consider setting up an emergency fund in case credit unions need to cover liquidity requirements during the next few months. The regulator, Brendan Logue, also wrote to credit unions before their annual meetings and asked that any having difficulties in paying dividends contact him to discuss the situation (Irish Times Nov. 7). The newspaper said concern about investment losses and the economy might have sparked the move. The league, which represents 521 credit unions, has a savings protection plan that operates a fund of more than 110 million euros (US$179.5 million). The plan allows its affiliates to trade out of any difficulty they may experience. In September, the state increased the state deposit protection limit on accounts to 100,000 euros and included, for the first time, savings in credit unions under the plan.

Texas newspaper receives flurry of calls about CU insurance

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SAN ANTONIO (11/10/08)--A newspaper column about the Federal Deposit Insurance Corp.'s new coverage limits on deposits brought a flurry of calls and e-mails from credit union members. The result: a separate column specifically about credit unions' federal insurance. San Antonio Express-News columnist David Uhler, who writes the Go-to-Guy column, said all members who wrote in or called wanted to know: "What about us?" (San Antonio Express-News Oct. 28). He wrote that the Emergency Economic Stabilization Act of 2009's passage raised not only FDIC's deposit insurance limits but also required the National Credit Union Administration (NCUA) to raise its share insurance protection on all types of accounts. Uhler interviewed John Worthington, senior vice president at Security Service FCU in San Antonio, who noted that the changes in deposit insurance limits happened so quickly that the credit union's latest newsletter still has the old NCUA limits. A lot of signage and other things will have to be changed, he said. Worthington said NCUA sent an advisory to credit union managers about Uncle Sam posters it mailed recently to all federally insured credit unions. Because press time for the posters occurred before the act was passed, the posters did not reflect the insurance coverage increase. NCUA suggested either striking through the $100,000 limit on the old posters and substituting $250,000, or ordering new posters from NCUA's website.

Bay FCU educates community to Think Local

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CAPITOLA, Calif. (11/10/08)--Bay FCU encouraged its members and California’s Santa Cruz County community to “think local” during a meeting the credit union hosted Oct. 16. The Capitola, Calif.-based credit union is a member of the Think Local First--Santa Cruz network of local businesses and community organizations that promotes economic vitality in Santa Cruz County. “I believe it’s our collective goal to make a real difference in our local community and to help each other achieve success,” Bay FCU President/CEO Carrie Birkhofer told meeting attendees. “It’s the simple concept of local people helping local people to thrive, which is the mission of Bay FCU.” At the meeting, Birkhofer shared the history of Bay FCU, which was founded in 1957 by a group of local teachers. The credit union serves more than 65,000 members and 500 businesses--and provides financial and volunteer support to local nonprofit organizations and schools. Birkhofer also participated in a two-hour radio program Oct. 15 to discuss the importance of banking locally. Think Local First was established in 2007. Membership is close to 200, and the group raises community awareness through local print and radio ad campaigns. For every $100 spent at a local business, $45 circulates within the community--compared with $13 from a non-local business, according to the credit union. Bay FCU has more than $650 million in assets.

Michigan offers 150 million to FIs for loans in credit squeeze

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LANSING, Mich. (11/10/08)--To help state consumers and businesses hurt by the nation’s frozen credit markets, Michigan Gov. Jennifer Granholm said Thursday she will free up $150 million from the state treasury for credit unions and banks to loan to those in need. Granholm also will ask state lawmakers to permit a 90-day moratorium on foreclosures to provide homeowners with a chance to refinance their loans with lenders (Detroit Free Press Nov. 7). “We are working in close cooperation with the Granholm administration to address Michigan's economic challenges,” David Adams, president/CEO of the Michigan Credit Union League, told News Now. “We appreciate the very careful yet aggressive way that the foreclosure crisis is being approached as more focus now shifts to lenders’ risks. “In the months and years ahead, we intend to work with the governor and the legislature to help Michiganians save, borrow and invest during a tough economy,” he added. Under Granholm’s initiative, the state will purchase $150 million in certificates of deposit (CDs) from state credit unions and banks. The state will obtain competitive interest on the CDs, and then credit unions and banks will use the money to provide loans--80% of which will go to Michigan businesses, Granholm told the newspaper. The manner in which the remaining 20% is loaned out is yet to be determined, Terry Stanton, Michigan Department of Treasury spokesman, told the paper. The $150 million would be culled from a cash fund that’s routinely invested in financial markets, he added.

CUNA offices remain open on Tuesday

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WASHINGTON and MADISON, Wis. (11/10/08)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association will remain open Tuesday during Veterans' Day. Some leagues and credit unions will be closed during the federal holiday set aside to honor America's veterans. News Now will publish a Tuesday edition.

California Nevada league cut ad budget

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SAN FRANCISCO (11/10/08)--The annual budget for the California and Nevada Credit Union League’s Public Advocacy Program is slated to be substantially cut from $6 million annually to $1 million for 2009, the league confirmed. The program has been in effect for four years and is funded by an special assessment of league credit unions in addition the their dues, Henry Kertman, league vice president of public affairs, told News Now. In October, the league proposed a reduced budget of $4 million for the program. However, since “third-quarter numbers were disappointing, the league credit unions felt the situation was a little more difficult today than in the past,” Kertman said. In response, the league’s the board of directors met and then sent a proposal to the credit unions to cut funding for the program to $1 million for 2009, he added. At the league’s annual meeting last week in San Francisco, Nevada credit unions voted to accept the proposal for reduced funding in 2009. The California credit unions were set to vote late Friday afternoon, Kertman said. The proposal will suspend the program’s paid media advertising, but will continue to primarily cover grassroots advertising, and also support earned media (favorable publicity gained through promotional efforts other than advertising, such as editorial influence) and some research, Kertman said.

CU System briefs (11/07/2008)

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* BEAVERTON, Ore. (11/10/08)--Oregon and Southwest Washington credit unions raised $100,000 during their 2008 Credit Unions for Kids Auction to benefit the Children's Miracle Network (CMN) hospitals in Oregon, reported the Credit Union Association of Oregon. The proceeds from "An Evening in the French Quarter" will benefit specifically Doernbecher Children's Hospital and the pediatric units of Sacred Heart and Rogue Valley Medical Center. Serving as co-chairs for the Credit Unions for Kids campaign are Pat Smith, CEO of Unitus Community CU and Mandy Jones, CEO of Oregon Community CU … * DULUTH, Ga. (11/10/08)--Georgia credit unions and Georgia Credit Union Affiliates (GCUA) teamed up to spread the message about the safety and soundness of credit unions during the Atlanta Hawks' sold-out season opening game against the Philadelphia 76ers in Atlanta Nov. 1. Throughout the game, credit unions displayed messages on the scoreboard to inform more than 18,000 fans about credit unions. Staff also handed out 1,000 stress reliever giveaways encouraging fans to visit www.georgiacreditunions.org to find out about joining a credit union. From left are Kristi Arrington, vice president of information development, GCUA; Anita Paul, director of communications, GCUA; mascot Savasaurus; and Jobi Tyson, senior marketing account executive, Growth By Design. (Photo provided by Georgia Credit Union Affiliates) …

Greylock FCU earned 1.6 million in third quarter

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PITTSFIELD, Mass. (11/10/08)--Greylock FCU, Pittsfield, Mass., announced that it added more than 2,500 members this year and earned $1.6 million during the third quarter despite the economic downturn. Total loans grew by 18% to $895 million. Total share deposits increased 12% to $870 million and loan reserves totaled $8 million (Berkshire Eagle Nov. 7). The increase in assets is likely due to the credit union opening two new branches in the last two years, Greylock President Angelo Stracuzzi told the newspaper. Greylock’s members know that the credit union will not do subprime lending and are not affected by the “whims of Wall Street,” he added. The credit union’s earnings are strong because it is focused on member relationships, Stracuzzi said. Greylock has $1.051 billion in assets.

CUDL CUs increase auto lending market share

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RANCHO CUCAMONGA, Calif. (11/10/08)--Despite a tough market, credit unions’ auto lending shares increased this year, according to Joe James, a market research analyst at CUDL. In August, credit unions’ share was 20.5%. More than 550,000 loans were financed on the CUDL platform for 600 credit unions, he said. CUDL is a credit union service organization that develops applications, training and marketing programs related to indirect lending for credit unions. Credit unions have an advantage in the auto lending market because they have a lower cost to secure funds to borrowers. They reported that their costs to secure funds were at 3.3%, compared with the 4.7% of costs reported by the Consumer Bankers Association, James said. Credit unions also can expect an increase in lending because many large automakers have pulled back their leasing programs. “The pullback in leasing should benefit credit unions because they offer low rates and extended loan terms,” he added. Both new- and used-vehicle sales have declined each month compared with last year’s sales, so consumers can expect a decline in used-vehicle prices. “Hopefully, that will result in an increase in used-vehicle sales,” James said. James also noted:
* Vehicle sales have dropped because buyers have fewer financing options to purchase the cars; * Fewer consumers are using home equity loans to purchase cars; and * New U.S. auto sales in September hit the lowest level in 15 years. Toyota experienced the largest decline, at 32.3%, and General Motors the least. GM’s decline was half of the others at 15% for the second quarter, James said.

CUs financial graveyard float grabs attention

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BURLINGTON, Vt. (11/10/08)--The Credit Union of Vermont, Rutland, constructed a float for a Halloween parade that caught the attention of a congressman.
Credit Union of Vermont created a financial graveyard as its float for a Halloween parade to highlight credit unions’ safety and soundness during difficult financial times. The float caught the attention of U.S. Rep. Peter Welch (D-Vt.), who took multiple photos of it. (Photo provided by the Association of Vermont Credit Unions)
The float, a financial graveyard, highlighted the nation’s economic difficulties caused by the greed of for-profit corporations (Newsline Express Nov. 7). It caught the attention of U.S. Rep. Peter Welch (D-Vt.), who took photos of the float, according to the Association of Vermont Credit Unions. “The float was designed to emphasize that credit unions are a safe and sound alternative and are above it all,” said Credit Union of Vermont CEO Brian Fogg. “As has been the case for 10 years, the Credit Union of Vermont was once again the only financial institution participating in the parade.” Staff members wore Halloween T-shirts with the credit union’s name and logo in a pumpkin with “Safe--sound--secure” on the front and back. Credit Union of Vermont has $22 million in assets.

League analyzing Californias homeowner aid plan

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SACRAMENTO (11/10/08)--To mitigate the effects of widespread home foreclosures on California residents, Gov. Arnold Schwarzenegger has proposed requiring mortgage lenders to accept a 90-day “stay” on foreclosure proceedings, unless the foreclosures meet certain conditions. The California Credit Union League is in the process of analyzing the proposal, the league told News Now. The proposal says that mortgage lenders or servicing companies who file notices of default against mortgages on owner-occupied California homes would have to prove to state officials that the company has an aggressive modification program in place, said David Crane, the governor’s special adviser for jobs and economic growth (The Mercury News Nov. 5). Crane defined an aggressive modification program as one in which a lender works with borrowers to keep them in their homes by making payments on a modified mortgage--if doing so would bring the lending company and investors a better return than foreclosure would, he told the newspaper. Schwarzenegger’s administration wants to rewrite defaulted loans--whenever possible--so borrowers would not have to pay more than 38% of their income toward housing expenses, the paper said. Housing expenses usually include mortgage, insurance and taxes. To meet the 38% income standard, lenders could reduce the loan’s interest rate, lengthen the term of the loan to 40 years, or defer a portion of the unpaid balance until the end of the loan term, the paper said.