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CUs examining next steps to keep new-member momentum

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MADISON, Wis. (11/9/11)--Credit unions have barely had time to catch their collective breath from a month of giddy, record-breaking membership increases, but already they are thinking ahead on what to expect this week and beyond.

Even though Bank Transfer Day has passed, many credit unions are still working to attract new members. The promotions and ad campaigns that many credit unions used leading up to Bank Transfer Day won't end there.  For many, BTD is just the beginning of their campaigns, some of which will last through December.
In Pennsylvania, First Capital FCU Branch Manager Sharon Miller, right, opened an account for a new member Saturday, one of about 40,000 new members who switched to credit unions on Bank Transfer Day. (Photo provided by the Pennsylvania Credit Union Association)
 

David Bennett, spokesman for the Northwest Credit Union Association, told The Register-Guard (Nov. 8) that the shift has been significant and is irreversible. In addition to new accounts coming into credit unions, existing members are shifting all their accounts to credit unions. "There were a lot of record-setting days at our credit unions on Saturday," he said. "The movement right now of people toward credit unions is unprecedented."

Greater Alliance FCU Hackensack, N.J., said it may step up its marketing efforts as it attempts to keep up Saturday's momentum. "It's good for us because the general consumer is learning that they have a better alternative than just joining a regular bank," said Glenn Guinto, the credit union's vice president for operations (The Record Nov. 8)

Meanwhile, credit unions continued to report on their progress with Bank Transfer Day.

Bethpage (N.Y.) FCU, the largest credit union in Long Island, opened a record 1,471 new checking accounts during its one-week BankTransfer Day promotion, compared with 383 accounts opened the same week a year ago. Of those, 672 were opened on Saturday. It has seen $100 million increase in deposits since Sept. 29, the date Bank of America's $5 debit card fee was disclosed. The consumer outcry forced the bank to rescind the fee last week.

"Bank Transfer Day provided frustrated consumers the opportunity to leverage their voices, realizing the valuable options credit unions offer, and until the mega banks eliminate all new monthly checking account fees, consumers' frustration and discontent will continue," said Kirk Kordeleski, president/CEO of Bethpage, in a press release.

Many of the new accounts were existing members, who received $100 for opening a checking account and turning in their old bank cards or checks. More than 900 members received the offer and all those on site were eager to learn more about the credit union difference, he said.

Charlotte (N.C.) Metro FCU, which opened about 75 accounts this weekend--more than four times its usual weekend business, said that is branches are closed on weekends--so the traffic was all online. It also reported it opened about 1,400 new checking accounts in October, compared with its normal monthly average of 400 (Charlotte Observer Nov. 8). "We have yet to see a slowdown," Chief Operating Officer Nicol Morris told the newspaper. "Through the week, I think we'll still see a decent amount of activity."

Most of the North Carolina's credit unions were closed last weekend, said Jeff Hardin of the North Carolina Credit Union League. The branches that were open reported a modest increase of traffic. "We suspect that it's obviously going to slow down, but we think there is going to continue to be the momentum that we've seen as people continue to evaluate their options," Hardin told the newspaper. "We just invite people to look at credit unions."

Earthmover CU, Montgomery, Ill., told the Montgomery Patch that it wasn't just the weekend but the days leading up to it that produced its growth in members. "I started to notice it the week before. We got a lot of people calling and coming in, and quite a bit coming back to get accounts opened," Doug Williams, manager of the Montgomery branch,  reported to the newspaper.

Northwest Community CU in Oregon was surprised to get 41 new accounts Saturday, said CEO John Iglesias (The Register-Guard Nov. 8). Membership growth was already 300% above normal in October. "We didn't expect to get any more on Saturday, but we did. I don't see it slowing down any time soon," he told the newspaper.

Associated CU, based in Norcross, Ga., added 889 accounts in the past week, more than double its average weekly gain after robust growth in October, said The Atlanta Journal and Constitution  (Nov. 8). It opened 90 new accounts at branches on Saturday, plus 50 new accounts this weekend via the Internet. Normally, Saturday attracts 15 new accounts.

The Georgia Credit Union Affiliates told the newspaper that many credit unions aren't open weekends. Still, Georgia credit unions welcomed more than 14,500 new members since the end of September and gained $101 million in new deposits during that time.

Delta Community CU, Atlanta, reported opening 150 new accounts Saturday, up from its normal 60 to 80 accounts. However it added more than 4,000 accounts overall in October, up 150% from its average month, said the newspaper.

Will consumers continue to shift away from the big banks? University of Louisiana at Lafayette Finance Professor Linus Wilson told the Atlanta newspaper he wasn't sure. However, he added that the Occupy Wall Street movement seems to be holding its momentum. "And if that's the barometer of how mad people are getting, it would indicate there is still momentum to people wanting to move" their accounts.

Mike Beall,  president/CEO of the Missouri Credit Union Association, noted in Maryland Heights Patch.com   that the 131 credit unions in Missouri added 7,100 new members who transferred $49 million into the credit unions.   Vantage CU reported that consumers were coming into the credit union, saying they were with Bank of America and wanting to see what the credit union offered.

"We think consumers have wised up to the concept that banks will continue to charge large fees one way or another," Beall told the newspaper. "We think this will continue as a trend." He said credit union members even brought in friends and family members to make the switch and noted that "banks are on notice that they will not be able to deliver huge profits to their shareholders on the backs of their customers. They will have to re-think their business model on this."

Ohio and Michigan reported large numbers of consumers converting to credit unions. In Ohio, 15,000 new members enrolled in credit unions and added $106 million in deposits from Sept. 29 to Oct. 29, Patrick Harris, spokesman with the Ohio Credit Union League told The Blade (Nov. 8). That compares with 30,000 new members  a year.

Harris also noted that Bank Transfer Day gave credit unions the opportunity to dispel myths about credit unions, such as few locations and restrictions on who can join.

At Glass City FCU, Maumee, Ohio, new accounts totaled 121 in October, up from 100 in September, and through Sunday had added 28 new accounts so far in November. Glass City spokesperson Sarah Ritenour told the newspaper that "We also noticed that it wasn't just new members that we were receiving. Our current members who just have savings accounts, came last month and opened checking accounts with us."

David Seeger, president/CEO of Great Lakes CU, Sylvania, Ohio, noted that the bankers' fees turned out to be "the greatest Christmas gift we could ever get. It's pretty good marketing for us."

Tech CU nations first FI to offer P2P from ATMs

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SAN JOSE, Calif. (11/9/11)--Beginning in early 2012, Technology CU will be the first financial institution in the nation to enable real-time, person-to-person (P2P) payments from its ATMs to nearly anywhere in the world using a new payments service.

The $1.3billion asset credit union based in San Jose, Calif., will use a new payments service from NCR and PayPal.

"With just a mobile phone number and a few taps on a Tech CU NCR SelfServ ATM, Tech CU customers will be able to make P2P money transfers quickly, easily and securely to anyone's PalPal account," said Dan Schatt, general manager of financial innovations for PayPay.

To use the service, the member will sign in to the ATM, enter the recipient's contact information, and choose the amount to transfer. The funds will be immediately credited to the recipient's PayPal account. Recipients without PayPal accounts will need to create one to receive funds.

Tech CU President/CEO Barbara Kamm noted that ATMs, mobile phones and online banking are increasingly becoming the main channels members use for banking and the new service will spur more financial interactions through those channels. "We plan to have this capability on all of our electronic platforms by early next year so that our members can choose the payment or transfer option that's most convenient for them," Kamm said.

Speaker Fast furious reg environment a challenge

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NEW ORLEANS (11/9/11)--The pace, complexity and timing of today's regulatory changes are unprecedented and will require credit unions to rethink the way they do business, a CUNA Mutual Group regulatory expert said Tuesday.

Bill Klewin, lending compliance leader, CUNA Mutual Group, tells Lending Council attendees of the 17th annual CUNA Lending Council Annual Conference in New Orleans about the many current and future regulatory challenges credit unions are facing. (Photo provided by CUNA Mutual Group)
Bill Klewin, CUNA Mutual lending compliance leader, speaking at the 17th annual CUNA Lending Council Annual Conference in New Orleans, outlined current and pending regulatory issues that will tax staff, be expensive and potentially have a negative impact on the way credit unions serve members.

"The regulations, coupled with the effect of the new Consumer Financial Protection Bureau (CFPB), will impact all areas of a credit union's operation, including debit and credit cards, home equity and consumer loans, tellers, the way you process mortgage loans, H.R. compensation plans and auditing, to name a few,"  Klewin said.

Although it isn't clear yet what approach the CFPB will take, it appears the agency is data driven, he added. "They may take a disclosure or change in a rule and take it to the people affected to determine a course," Klewin said. "It's a remarkably different approach, and the old way of doing disclosures may go right out the window. It may make sense but it would be very foreign to how credit unions and regulators are accustomed to operating."

He encouraged credit unions to use the comment-period process, which he called a "meaningful opportunity to have influence as regulators do read the material. It's an opportunity for your voice to be heard on proposed rules, so credit unions should exercise their democratic right and speak up."

Now more than ever, credit unions won't be able to just spend time on compliance, they'll need to maintain a sharp focus on it, Klewin added. He stressed the importance of having a person in the credit union accountable to compliance issues. Noting that because compliance staffers aren't "the most loved person in the organization, it's important that they report at a certain level and not be subject to influence by business areas of the credit union," he said.

A key to making this position effective is finding quality staff who are capable of handling complex compliance issues, sophisticated and knowledgeable, and good at everything they need to do.

"You can build, buy or rent for this important position," he explained. "One, you can take someone from within your organization and give the training and tools to be good at it, or you can go out and buy someone with a proven track record of compliance expertise, but that can be expensive," he said.

Another alternative is to outsource some of the work, such as the credit union's documents business, Klewin added. "You can put it in the hands of a provider that's been in the business and knows the regs. It can take a huge burden off your shoulders," he said.

"The bottom line on this is we're operating in a new world, where you have to think of compliance organizationally, because it will affect almost every aspect of your business," Klewin said. "The pace of new regulations is daunting. Not only will credit unions be challenged but regulators will be, too."

CUNA Mutual honors excellence in lending at Council

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NEW ORLEANS (11/9/11)--Five credit unions, including a double winner, were recognized for their lending prowess Monday with CUNA Mutual Group's Excellence in Lending Awards at the CUNA Lending Council's 17th annual conference in New Orleans.

Excellence in Lending winners were announced by CUNA Mutual Group at the CUNA Lending Council's Annual Conference Monday in New Orleans. From left, are: Dan Murray, CUNA Mutual vice president, who presented the awards; John Dolan, Charter Oak FCU; Ted Bangert, Black Hills FCU; Julie Ernis, Texell CU; Roger Montes and Oscar Saavedra, Latino Community CU; Greg Baker and David Kennedy, CEO, University of Kentucky FCU; and Bill Vogeney, vice chair, Lending Council. (Photo provided by CUNA Mutual Group)
Dan Murray, CUNA Mutual Group, vice president, presented the 12th annual awards to:

  • University of Kentucky FCU, Lexington, Ky.: Consumer Lending, more than $250 million in assets. The credit union has grown its indirect business from 1,600 deals with $29 million in originations in 2009 to more than 2,600 deals with $51 million in originations in 2010.
  • Texell CU, Temple, Texas: Consumer Lending, less than $250 million in assets. Texell grew its lending nearly 27% in 2009 and 35% in 2010. That resulted in the highest loan-to-share ratio in Texell's history, higher average loan balances and net charge-offs below peer and industry averages.
  • Charter Oak FCU, Groton, Conn.: Mortgage Lending, more than $250 million in assets. An economic downturn that severely hurt its vehicle loan business prompted Charter Oak to implement a diversification strategy. The credit union became Eastern Connecticut's No. 1 mortgage lender with more than 1,000 mortgages ($130 million) originated in 2010.
  • Latino Community CU, Durham, N.C.: Mortgage Lending, Less than $250 million in assets. In 2010, LCCU experienced loan growth of about 20%, and an overall loan yield of close to 7% while limiting loan losses to less than 1%, despite many of its members having no credit history.
  • Black Hills FCU, Rapid City, S.D.: Business Lending. Black Hills took a disciplined approach to blending business lending into its corporate culture as a core product offering.
  • Latino Community CU: Low to Modest Means. The credit union delivered the overall lending products and services to meet the membership needs of many previously unbanked Latinos in North Carolina.  LCCU's attributes its 2% delinquency rate to its award-winning financial education program, despite much of its membership having no credit history.
"A record of nearly 50 credit unions were nominated for 12th annual awards and they were quality applicants," Murray said. "It's a credit to the ingenuity and resiliency of our nominees to achieve this kind of success during times of high unemployment, a poor housing market and low consumer sentiment.

CUNA Mutual Group, with support and expertise 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. The annual awards provide an opportunity for credit unions to share best practices and ideas, build networks, and recognize and celebrate lending excellence.

PCUA foundation provides 195K in flood relief

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HARRISBURG, Pa. (11/9/11)--Disaster relief flood aid totaling nearly $195,000 was presented to 239 credit union employees and members of 35 Pennsylvania credit unions to assist victims in recovering from severe flooding along the Susquehanna River Basin.

Lonny Maurer (left), CEO of Belco Community CU, Harrisburg, Pa., presents a disaster relief check to Ada, a credit union member, after severe flooding impacted several areas of the state in September. (Photo provided by the Pennsylvania Credit Union Association)
The Pennsylvania Credit Union Association (PCUA) and the Pennsylvania Credit Union Foundation (PCUF) announced the awards this month.

The effort was the Pennsylvania credit union movement's first use of the National Credit Union Foundation's (NCUF) CUAid Emergency Relief program, which was established in 2006 in the aftermath of the Hurricane Katrina disaster in 2005 (Life is a Highway Nov. 8).

In support of the effort, PCUA contributed $50,000; PCUF, $100,000; and NCUF's CU Aid Disaster Relief Fund, $45,000.

Jim McCormack, PCUA president/CEO, praised the association and foundation boards for their "generous support to alleviate the suffering of our credit union employees and members." He also spoke about "the terrible destruction of homes along a 250-mile path of the Susquehanna River, where credit unions are located near small towns.

PCUF Executive Director Joe Wambach lauded the efforts of the credit unions and the strong partnership among the association, the NCUF, and the PCUF. "That all of us were able to process so many grants in such a short period of time and to get funds to the victims of the disaster was remarkable," Wambach said.

"While the amount distributed cannot completely fill the needs of credit union employees and members, it does represent the foundation's profound concern for them, as well as our hope that the funds are a first stage in their eventual recovery," he added.

CUANY remembers past president Berris Gordon

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ALBANY, N.Y. (11/9/11)--Berris R. Gordon, former president of the Credit Union Association of New York (CUANY), died Nov. 1 at the age of 90, according to CUANY.

Gordon was with the association, then known as the New York State Credit Union League, for 14 years.  He joined in 1964 as a field representative serving the Metropolitan Chapter. In 1970, he was promoted to educational services director, where he planned and supervised the league's newsletter and other publications, league-sponsored workshops, conferences and other educational sessions. In 1978, he was unanimously appointed president of the organization's board of directors.

Before joining the league staff, Gordon served as office manager of Local One S FCU, which served New York City employees of Macy's, for 12 years. He also served as a member of the Metropolitan Chapter Council and as co-chairman of its education committee.

Gordon retired as president of the league in 1984 to pursue horticultural interests. He held the office of president longer than any of his predecessors. He is survived by his wife Joyce, daughter Wendy and other relatives and friends. His daughter Gail preceded him in death in 2009.

Calif.Nev. CUs CUMD create national CU4Kids partnership

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ONTARIO, Calif., and WASHINGTON (11/9/11)--The partnership will bring together the Credit Union Cherry Blossom Run in Washington, D.C., and the Credit Union SacTown Ten-Mile Run in Sacramento, Calif., on April 1, 2012. Officials of both races said they have high expectations for fund raising and for raising national awareness of credit unions.

From left, Juri Valdov, chairman of Credit Union Miracle Day, the title sponsor of the annual Cherry Blossom Ten Mile Run, and John Pamer, chairman of California's SacTown Ten Mile Run, announced a partnership of the two organizations during the annual meeting of the California and Nevada Credit Union Leagues in San Diego in October. (Photo provided by Credit Union Miracle Day)
Making the announcement at the California and Nevada Credit Union Leagues Annual Meeting were Juri Valdov, CUMD chairman, and John Pamer, CEO of Diablo Valley FCU, Concord, Calif., and chairman of the CU SacTown Ten-Mile Run.

Pamer, who ran in the Cherry Blossom run said he was "so impressed by the impact credit unions have had, both in terms of fund raising for Credit Unions for Kids as well as raising awareness of credit unions in our nation's capital. It occurred to me and others that California could do the same thing."

Diana Dykstra, president of the California and Nevada leagues, agreed. "I have a vision of 50 races being run on the same day across the country, raising funds for Credit Unions for Kids while at the same time highlighting the great work credit unions do in their local communities."

Officials of both groups indicated that holding the races on the same day would better position them to leverage sponsorship support and media attention.

SacTown Ten-Mile Run also will be listed as sponsor of the Cherry Blossom run, effectively doubling the impact of its donation. CUMD officials said they welcome sponsorship from credit unions across the nation and that all funds go back into the donating credit union's local hospital.

The last Cherry Blossom run raised more than $578,000 and brought the total funds raised for the hospitals over 10 years to more than $5 million. It hosted more than 15,000 runners. Credit unions have sponsored the run for 10 years to benefit the 17 million kids treated annually at Children's Miracle Network Hospitals.

CU System briefs (11/08/2011)

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  • FRESNO, Calif. (11/9/11)--Educational Employees CU, of Fresno, Calif., received the 2011 Beacon Award from the Richard Myles Johnson Foundation for its work in reaching more than 12,000 public and private school students, as well as at-risk youth and organizations such as Boys and Girls Club, with its "Wise Up!" program of financial education. The Richard Myles Johnson Foundation is the state foundation for credit unions in California and Nevada. Educational Employees CU was honored in the more-than $100-million-asset-size category.  "Wise Up!" is made up of two components. During classroom instruction, students develop a household budget based on a career they choose and net income they would receive. That is followed by an interactive section, during which students visit eight scenarios, including a credit union, utilities, and child care, to develop good money management skills. "Wise Up!" was launched in 2009. The Beacon Award is the foundation's highest honor, and recognizes "promising or exemplary financial education programs or projects that provide information to the broader credit union community and the general public." Other finalists this year were Boulder Dam CU (Nevada), Meriwest CU (San Jose, Calif.), and Redwood CU (Santa Rosa, Calif.). Pictured are, from left: Educational Employees CU Business Development Director Patty Martin, RMJ Foundation Board Chairman and Water and Power Community CU CEO Carl Stewart, and Educational Employees CU Senior Vice President of Marketing and Lending Mark Perez ...
  • NEW YORK (11/9/11)--A Malaysian man, who pleaded guilty in April to possessing hundreds of thousands of stolen credit and debit card numbers, was sentenced this week. Lin Mun Poo, 32, who also was indicted for allegedly hacking into the Federal Reserve's computers and accessing data from several entities, including credit unions and a credit union data processor, was sentenced by U.S. District Judge Dora L. Irizarry in Brooklyn, N.Y. to 10 years in prison. It was the maximum sentence he could receive. (Bloomberg Nov. 4) The U.S. Probation Office had recommended an eight-year sentence, but the judge said the longer sentence was intended to send a message to discourage others from engaging in such illegal activity. According to Assistant U.S. Attorney Cristina M. Posa, Poo was able to install a keystroke logger into a Federal Reserve Bank. She said Poo could have wreaked financial havoc through insider trading. The government had originally said Lin had stolen 400,000 card numbers but reduced that tally once it eliminated duplicates …