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CU System briefs (11/07/2011)

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  • KANSAS CITY, Mo. (11/8/11)--Mazuma CU, Kansas City, Mo., announced that Brandon Michaels, vice president/chief financial officer, will succeed retiring President/CEO Rob Givens, effective Jan. 1. Givens announced his retirement in May. Michaels, who has more than 15 years in the credit union industry, joined Mazuma in September 2009. He previously was vice president of finance (chief financial officer) of San Francisco (Calif.) Fire CU.  Michaels is a third-generation credit union CEO. His grandmother is a retired credit union CEO and his mother is CEO of Western Healthcare FCU, Concord, Calif. He began his career filing loan papers for his grandmother when he was 12 years old. Michaels said he would focus on the youth movement and innovation within Mazuma. He is a part of The Crash Network, or The Crashers, comprising young credit union professionals …
  • HERNDON, Va. (11/8/11)--Northwest FCU President/CEO Gerrianne "Winky" Burks announced her retirement after 40 years of working at the $2 billion asset credit union, the past five years as CEO. Her retirement date--the end of 2012--has been part of the credit union's transition plan for several years. Burks first joined the Herndon, Va.-based credit union as a teller  in 1971. In 1986 she was promoted to her first management position as human resources manager. She also served as vice president of member services and chief operating officer for five years before assuming the president/CEO role in 2008. Burks is chairman of the Northwest FCU Foundation and the Credit Unions Care Foundation of Virginia, and is on the board of the Credit Union Executives Society. JMFA Executive Search Group is assisting in the search for a new CEO. The credit union aims to have the new CEO on board by mid-year 2012 …

BTD seen as opportunity by CUs in other countries

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MADISON, Wis. (11/8/11)--Other countries took note of the U.S. credit unions' efforts leading up to this past Saturday's Bank Transfer Day and some took the opportunity to promote credit unions as an alternative for consumers fed up with big banks in their own countries.

Meridian CU, the largest credit union in Ontario, Canada, and based in Toronto, last week noted that the grassroots movement encouraging individuals to close their accounts in traditional and publicly traded financial institutions and transfer their funds to a credit union has quickly picked up momentum in Canada (Canada NewsWire Nov. 1).

"Credit unions have been providing Canadians with financial services, products and advice for more than 100 years, yet for many Canadians--especially here in Ontario--there is still confusion about how credit unions differ from traditional banks," said Meridian CEO/President Sean Jackson.  He urged Ontarians "to take this opportunity to experience first-hand the benefits of credit union membership."

New Zealand Association of Credit Unions (NZACU), which is a member of the World Council of Credit Unions, observed that the viral campaign initiated on Facebook that is sweeping the U.S. "is poised to give huge international profile to one of the financial world's best kept secrets: credit unions"  ( Nov. 1).

With Australia's banking industry reportedly heading for a record $24 billion profit, despite the economic environment,  NZACU CEO Henry Lynch  predicted a swing towards the cooperative, member-owned financial model "in this part of the world too."

He noted that people want to make new choices about who they deal with. "A lot of people aren't aware of what credit unions offer members, and there's a growing realization that there's a really positive, long-term sustainability in the cooperative philosophy and the structure of credit unions," Lynch said.

"With 2012 being United Nations' International Year of Cooperatives, and the continuing global dissatisfaction around what many see as purely profit-driven financial service providers, the next 12 months are likely to see unprecedented growth in credit union membership," Lynch added.

CUNAs IPlan ItI wins IFolioI gold IMoneyMixI a bronze

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MADISON, Wis. (11/8/11)--Plan It and MoneyMix, two the Credit Union National Association's (CUNA) onlineEDGE personal financial education products, have won Folio: Magazine's prestigious Eddie Award, honoring their excellence in editorial content.

The awards were announced last week at the 2011 FOLIO: Show in New York City.

Plan it, an online retirement planning tool, won the gold medal for Best Consumer Website for Non-Profit Associations. MoneyMix, a financial education and planning assistant for young adults, won the bronze medal for Best Online Column or Blog.

Plan It, which was recognized for its quality content, helps pre-retirees focus attention on their financial and personal goals by allowing them to keep track of retirement funds through interactive calculators, short courses, informative articles, FAQs, quick tips and other progress tracking tools.

"We are happy to see financial publications getting to share the media spotlight with such prestigious company," said Rena Crispin, Plan It managing editor.

MoneyMix's spending blog particularly drew the attention of the Eddie Awards panel for its originality and accessibility. The spending blog, one of the many featured on MoneyMix, is filled with spending advice written by young adults, for young adults.

"To be mentioned alongside such publishing giants as Sports Illustrated and SELF Magazine is a special treat that not only speaks to the talent of our writers but to the importance of the financial advice we give young adults." Michelle Dosher, managing editor for MoneyMix.

Both Plan It and MoneyMix have won awards for editorial excellence before. As part of onlineEDGE, CUNA's suite of member-focused financial education tools, both programs won the Association for Financial Counseling and Planning Education's Outstanding Consumer Financial Information Award in 2008.

Spanning across print and online magazine disciplines, the Eddie Awards are the largest magazine awards program in the U.S. that celebrates outstanding editorial achievement in magazine publishing. This year more than 2,000 applications were submitted; 400 were selected as winners by panelists at Folio: Magazine.

Underbanked generated 45B in fee interest revenue in 2010

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NEW YORK (11/8/11)--Roughly 60 million underbanked consumers in the U.S. generated about $45 billion in fee and interest revenue for financial services providers in 2010, according to new research.

That means credit unions aiming to serve the underbanked will see competition from sectors looking to profit from this market while themselves having the opportunity to provide low-cost alternatives.

The total dollar volume of the underbanked marketplace in 2010 was roughly $455 billion in principal borrowed, dollars transacted and deposits held, said the Center for Financial Services Innovation (CFSI) and Core Innovation Capita, which released the data last week.

The results indicate a substantial need for financial products and services to serve the unbanked population, said the organizations.  The underbanked market showed strong growth in certain segments of services. For example, payment services grew 6% and credit services grew 2% from 2009 to 2010, said the groups.

They also noted "a significant revenue opportunity in providing products and services" aimed at the underbanked. Several products experienced high revenue growth rates during the period, the organizations said. Internet-based payday lending rose 35%; general purpose reloadable prepaid cards, 33%; and payroll cards, 25%.

The new data "confirm that there is a large opportunity for the financial services industry to create products and services that are both profitable for them and provide much needed solutions for this consumer segment," said Arjan Schutte, managing partner, Core Innovation Capital. "Our vision is to transform this market in a way that is significantly more profitable to the industry, will save consumers billions of dollars and help create upward mobility for tens of millions."

The groups said there are major market sectors that suggest an opportunity for more competition and that warrant greater attention.

Early reports show Bank Transfer Day success

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MADISON, Wis. (11/8/11)--For many credit unions, Saturday's Bank Transfer Day was a huge deal. Although many had seen an influx of new members throughout October after the mega-banks announced their now-rescinded debit card fees, many made record single-day strides in new accounts opened Saturday. Some reported more than 600 new members.

More definitive numbers will be available early this week, according to the Credit Union National Association. Meanwhile individual credit unions were reporting significant spikes in new accounts.

BECU, Seattle, was still counting the new accounts Monday morning but told the Credit Union National Association (CUNA) that 659 people opened accounts Saturday in just one branch.  The credit union has 45 branches. The new accounts broke all the credit union's records for opening new accounts on a single day.

Redwood CU (RU), Santa Rosa, Calif., opened more than 600 new acc
Click to view larger image Lourdes Cortez, CEO for North Jersey FCU, Totowa, N.J., talks to Hector Garcia, a brand new member who heard about Bank Transfer Day from an existing member and opened a checking account Saturday during the credit union's open house. In 2011, the credit union has attracted 4,000 new members. (Photo provided by North Jersey FCU)
ounts Friday and Saturday as a result of Bank Transfer Day and noted that is six times the normal number of new accounts.  It said its October new accounts are an 83% increase over its October 2010 growth.

"While we're thrilled to be welcoming so many new people to RCU, the real winner is the consumer or business owner who will see immediate savings and better service by making the smart decision to switch to a credit union," said Brett Martinez, president/CEO of RCU.

Others reporting new members on Bank Transfer Day:

  • Bay FCU, Calif., opened 100 new checking accounts Saturday--a third of its monthly average.
  • Pennsylvania State Employees CU opened 153 new accounts, a 50% increase on its average daily total of about 100. New accounts in October represented a 50% increase on its monthly new member total. It has introduced a two month campaign to attract more members.
  • Randolph-Brooks FCU branch in Plugerville, Texas, opened "dozens of accounts," it told The Wall Street Journal (Nov. 7).
  • San Jose CU, Calif., opened 30 memberships Saturday--half what it usually opens during a normal month.
  • Portland, Ore.-based Northwest Resource FCU noted that 200 people marched from downtown branch of JPMorgan Chase to the credit union, where 17 people opened new accounts Saturday (Oregon Live Nov. 5).
  • Rivermark Community CU, Salem, Ore., which is usually not open on Saturday, opened five new accounts at one branch, and its Hawthorne branch in Portland opened 30 accounts, with lines snaking out the door. It was an "extremely busy day," the credit union told the Statesman Journal Nov. 5).
  • Salem, Ore.-based MaPS CU reported new accounts for October were up 73% from October 2010. Since then, 64 more accounts were opened, reported the Statesman Journal.
  • First Capital FCU, Pa., opened four new accounts.
  • Schools Financial CU, Sacramento, Calif., noted that Saturday was its biggest membership day of the year, following a record October--1,064 members for the month. It did not specify the actual number of accounts opened on Saturday.
  • Educators CU, Wisconsin, which generally aims for a 5% annual increase in membership, reported a 25% increase since October 2010 in new members.
  • Landmark CU, Wisconsin, gained 945 members in October, 733 of whom opened checking accounts--"much higher than normal."
  • Affinity Plus FCU got more than 2,000 members over October--typically averages 1,000 a month. Of those new members, about 75% opened a new checking account.
  • Lower East Side People's FCU, a community development credit union in New York, had a steady stream of people opening accounts Saturday, according to NBC Nightly News.  One woman, who owns a pet grooming shop nearby, transferred all her business accounts from Chase to the credit union, saying she was going local because she was tired of bank fees and  "these are my neighbors. They walk by my shop every day." said it was business as usual Saturday, but it had added a couple of hundred accounts the past three weeks.
  • Cooperative FCU, Berkeley, Calif., opened new accounts for 38 people.  In October, the credit union totaled 316 new accounts, compared with 106 in the same month last year.
  • NuMark CU, Joliet, Ill., opened 26 checking accounts in four hours Saturday. That is 25% of its typical monthly goal. Normally Saturday brings in two new accounts at a branch.
  • Michigan Schools and Government CU, Clinton Township, Mich., received 20 new members Saturday, compared to its one or two.
  • Asheville, N.C.-based Mountain CU noted it added 17 members and 14 accounts in four houses, despite fog in the area Saturday morning.

Several credit unions mentioned that in addition to new accounts, some new members were applying for loans.

Paper Thinking younger members Look to Hispanic market

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DES MOINES, Iowa (11/4/11)--Community financial institutions (FI), including credit unions, should look to the Hispanic market to attract younger customers/members, according to a new white paper co-authored by Konrad Christensen of card processor The Members Group and Miriam De Dios of Hispanic-market strategies firm Coopera.

"The average age of a community FI customer hovers around 45," the paper said. "While it's true that consumers in this age bracket are at the height of their earning and spending potential, it's also true that these 40-somethings won't stay that age forever. For that reason, lowering the average age of an FI's customer base is on strategic minds everywhere."

Hispanic prospects are a good path to follow when pursuing a lower average age for customers/members, Christensen and De Dios suggest. The Hispanic community--of which as many as 50% are unbanked or underserved--also represents an opportunity for community financial institutions with a "people helping people" philosophy, they wrote.

The paper discusses best practices for reaching a Hispanic youth audience, including marketing and community relations tactics, product implementations and financial education programming. However, the paper also suggests that financial institutions can be successful at reaching young Hispanics through their parents.

"With a strong sense of responsibility to family, a large number of Hispanic teens are living in tight-knit households where pride and self-reliance are core values," wrote the authors. "Many have been handed down a mistrust of  financial institutions, but will follow the lead of their parents where financial management is concerned."

For more information, use the link.

U.S. bankruptcy filings down 8 for FY 2011

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MADISON, Wis. (11/8/11)--Bankruptcy cases filed in U.S. federal courts for fiscal year 2011-- the 12-month period ending Sept. 30--totaled 1,467,221, down 8% over the fiscal year 2010 bankruptcy filings of 1,596,355, according to the Administrative Office of the U.S. Courts. That is consistent with credit union loan delinquencies, which fell to a cyclical low in the past year, according to the Credit Union National Association (CUNA).

Filings dropped during the fourth quarter of the judiciary's fiscal year, with 15% fewer filings than in fourth quarter 2010, according to the statistics released Monday.

Additional statistics released Monday include business and non-business bankruptcy filings for the 12-month period ending Sept. 30; a comparison of September 2010 and 2011 filings; fourth-quarter filings; and monthly filings for the 12-month period ending Sept. 30.

For the 12-month period, business bankruptcy filings--those cases in which the debtor is a corporation or partnership, or the debt is predominantly related to the operation of a business--totaled 49,895, down 14% from the 58,322 business filings reported in the same period in 2010.

Non-business bankruptcy filings totaled 1,417,326, down 8% from the 1,538,033 non-business bankruptcy filings in September 2010.

In fiscal year 2011, filings fell for Chapter 7 and Chapter 11 bankruptcies:

  • Chapter 7 filings totaled 1,036,950, down 10% from the 1,146,511 Chapter 7 filings in fiscal year 2010; and
  • Chapter 11 filings fell to 11,979, down 16% from the 14,191 filings reported in fiscal year 2010.
The three-month period ending Sept. 30 was the judiciary's final quarter of fiscal year 2011. Total bankruptcy filings in the fourth quarter were 348,635, down 15% from the 412,380 cases filed in the final quarter of fiscal year 2010.

Credit union 60-plus-day loan delinquency rates fell to a new cyclical low of 1.51% in September, down from 1.75% a year earlier, according to CUNA's latest Monthly Credit Union Estimates for September 2011.

For more information, use the link.

Young and Free spokester Promote shared branching to Gen Y

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PORTLAND, Maine (11/8/11)--Trying to attract the under-25 crowd?  Try promoting shared branching as a convenience that's beneficial to them, says Maine's Young & Free spokester.

Seth Poplaski, who travels the state interacting with Gen Yers as spokester for the Maine Credit Union League's Young & Free program, shared his experience at the league's Statewide Awareness Committee meeting (Weekly Update Nov. 4).

He said that in interacting with young adults, he has seen the need to promote shared branching as a convenience young members want. Many in this age group don't know what shared branching is, he said.  "The main misconception many members of Gen Y have about credit unions is that they are the same as banks," he told the group. "The many new free4ME accounts that have been opened is proof that we're starting to change this."

Also at the meeting, league president John Murphy noted credit unions have opportunities to help consumers switch financial institutions by using tools such as switch kits and focusing on convenience features that credit unions offer.

The committee viewed the campaign's television commercials and noted some related to a savings theme could complement the current climate on consumer discontent with bank fees.

Mans home ownership is on the house

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RICHMOND, Maine (11/8/11)--Rather than demolish a house on a lot where Down East CU was preparing to build its new branch in Richmond, Maine, the credit union decided to offer it-- for free--to the first person who would remove the home from the premises, said the Maine Credit Union League.

Rather than using a wrecking ball to demolish a house to make way for its new Richmond branch, Down East CU, Baileyville, Maine, gave away the house for free to the first person who would remove it. (Photo provided by the Maine Credit Union League)
The $86.4 million asset, Baileyville, Maine-based credit union said it wanted to find a way to remove the home without destroying it, according to Kaj Johansen, vice president of branch operations (News&Views November).

"We did not want to put a perfectly good home in a landfill, and with the state of the economy, it would have been a shame to just tear it down," he said.

The credit union used word of mouth, its website and in-branch monitors to spread news of it plans. Soon, telephone calls came pouring in. "The response was overwhelming and members and non-members called about it," Johansen said. "Everyone really thought it was great we went this route because the home had some historical presence in the community."

The person who arrived to pick up the new home moved it just down the street, allowing the historic house to stay a part of the community.

"He could not have been any happier to get the home," Johansen said. "It's a win-win for all involved, eliminating the need to reduce the house to rubble and soon, someone will be moving into the new home."