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Oregon CU Foundation announces new officers

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BEAVERTON, Ore. (12/1/08)--The Oregon Credit Union Foundation has elected a new slate of board officers. They are:
* Chair, Carlyn Roy, executive vice president/chief operating officer, OSU FCU, Corvallis; * Vice chair, Brooke Van Vleet, executive vice president/chief officer, First Tech CU, Beaverton; * Treasurer, Kathy Garner, president, northwest regional office, Southwest Corporate FCU, Plano, Texas; and * Secretary, Robert Barzler, president/CEO, Point West CU, Portland.
Rounding out the board are Shirley Cate, president/CEO, Providence Health System FCU; Barbara Mathey, president/CEO, IBEW & United Workers FCU; and Pat Smith, president/CEO, Unitus Community CU, all of Portland. Outgoing directors are: Gene Pelham, president/CEO, Rogue FCU, Medford; Tom Sargent, president/CEO, First Tech CU; and Eldon Hoekstra, who retired as president/CEO of Valley Health & Postal Employees CU, Salem.

Scams targeting CUs across the nation

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MADISON, Wis. (12/1/08)--Various scams continue to target credit unions and other financial institutions across the nation. The most recent incidents involve seven credit unions. Here are the latest:
* Bethlehem, Pa., police said 50 members of the Bethlehem Teachers FCU experienced fraudulent charges applied to their debit cards from Florida and Texas. An undetermined amount of money was involved, but the investigation is ongoing. The fraud appears to be a part of a larger, nationwide issue involving Visa and MasterCard credit and debit cards, said The Express-Times (Nov. 20). * SAMP Scranton FCU, Scranton, Pa., told the Pennsylvania Credit Union Association it received a phone call from a male with an accent who indicated he was providing service to an incapacitated credit union member. The caller said the member had asked that money be sent to her sister. He had the woman's account number and birthdate. A suspicious credit union representative indicated she knew the member and asked the caller for the woman's daughter's name. He hung up. The credit union contacted the Federal Bureau of Investigation (Life is a Highway (Nov. 26). * Martinsville (Va.) DuPont Employees CU (MDCU) reported its name and website were used in phishing e-mail, which told recipients its database had been attacked and they needed to call a number to update check card information to avoid suspension. The number listed isn't the credit union's. (WSLS10.com Nov. 26). * Vantage CU (Bridgeton, Mo.) President/CEO Hubert Hoosman Jr. told viewers of KMOV-TV, the St. Louis CBS affiliate, about a phone phishing scam using the credit union's name. The calls originated from a 408 area code in California and at least 20 people in St. Peters contacted police after receiving them. Hoosman advised anyone getting the calls to "hang up the phone immediately." (Misssouri Difference Nov. 26). * Susquehanna Valley FCU of Camp Hill, Pa., and a local police station received reports of automated phone calls warning members and non-members about "problems" with their credit union accounts, credit cards and debit cards. The calls are bogus and random, and the credit union's database was not compromised, said the police in Lower Allen Township, Pa. (pennlive.com Nov. 26). * New versions have surfaced of scams targeting IH Mississippi Valley CU, Moline, Ill., and efforts the credit union took earlier to educate its members about phishing have paid off, the credit union told the Quad-City Times Nov. 26). IH Mississippi Valley had no incidents of members being duped and providing confidential information in the current round. The latest phony messages are e-mailed from an account at the credit union and inform cardholders they have one new open issue that they must "clear here to resolve." * Cowlitz CU, Longview, Wash., said a mass e-mail informing people--both members and non-members--about fraudulent activity on their check card at the credit union is a scam. The scammers ask for the 16-digit check card number to "reactivate" the account (The Daily News Nov. 25).

Maryland CUs tout their white hat image

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BALTIMORE (12/1/08)--Maryland's credit unions are making sure the public knows that while other financial institutions line up for relief money from the Treasury, credit unions are solvent and willing to lend. An article in the Baltimore Examiner (Nov. 25), "Maryland credit unions tout 'white hat' image," reported on the Maryland and District of Columbia Credit Union Association's (MDDCCUA) regional ad campaign for credit unions. Credit unions bought 632 ads and traffic sponsorships on Maryland and Washington, D.C., radio stations about the government's temporary increase of deposit insurance to $250,000. They also bought 65 bus-tail ads stating, "Credit Unions: Where Your Savings Are Safe." The $130,000 campaign ended Nov. 23. Traffic at a website referred to in the ads doubled, said MDDCCUA. The article features a photo and interview with Brian Vittek, CEO of Destinations CU, Baltimore, who estimated membership is up 5% year to date and said deposits are up also The nation's credit unions are posting a 15% increase in mortgage and business lending year-over-year, said the article, which also noted that credit unions are ineligible for the Troubled Asset Relief Program.

Four arrested in ID thefts aimed at home equity loans

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NEWARK, N.J. (12/1/08)--Four men were arrested Tuesday in connection with an international identity theft ring that targeted home equity lines of credit and caused $2.5 million in losses at dozens of credit unions and banks. Eleven of the institutions were in New Jersey (The Star-Ledger Nov. 25). The arrests follow an investigation that began in November 2007. The ring targeted homeowners who had large lines of credit at financial institutions, including JPMorgan Chase, Citibank, and credit unions in three New Jersey cities--Basking Ridge, Bridgewater and Toms River. They used stolen personal data and technology to fool financial institution employees into transferring funds to accounts in at least seven countries, said the U.S. Attorney's office. In the past, ID thieves typically targeted people with shaky credit and took illegal loans in their names from subprime lenders with little documentation, said the Federal Bureau of Investigation (FBI). However, the credit crisis hampered the thieves and they turned to homeowners who have good credit and deep home equity. The thieves obtained Social Security numbers, mothers' maiden names and online passwords by mining public records, obtaining the information from overseas sources, and from tricking bank employees into releasing personal information over the phone. They blocked the banks' caller identification systems and asked to transfer large amounts from the victims' home equity lines. In one case, they moved $675,000 from Affinity FCU in Basking Ridge to the Bank of Tokyo Mitsubishi, said the authorities. They also persuaded bank employees to change the telephone number on accounts or convinced phone company employees to reroute their victims' calls. The frauds are being linked to similar cases in Virginia, where nine people were charged with stealing more than $51 million. The four arrested were: Oludola Akinmola, 37, and Oladeji Craig, 39, both of Brooklyn, N.Y.; Oluwajide Ogunbiyi, 32, of Springfield, Ill.; and Derrick Polk, 45, of Los Angeles. They are charged with conspiracy to: possess personal identification information, commit wire fraud and gain unauthorized access to a computer. If convicted, they face up to 50 years in prison and a maximum $1.5 million fine.

Mortgage Fraud Task Force gets CU perspective

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ST. LOUIS (12/1/08)--Missouri's credit union leaders are involved in a newly formed U.S. Attorney's Task Force on Mortgage Fraud, according to the Missouri Credit Union Association (MCUA). MCUA President/CEO Rosie Holub and Missouri Division of Credit Unions Director Sandy Branson are providing a credit union perspective to help the task force prevent mortgage fraud. U.S. Attorney Catherine Hanaway announced the task force was being formed to share information and trends, so tools could be developed to help identify and prosecute in mortgage fraud incidents. The task force has three goals:
* Stopping mortgage fraud before it starts via educating industry officials, borrowers and local law enforcement; * Ensuring all fraud cases are brought to the attention of law enforcement and prosecutors; and * Making sure the voices of the community victimized by mortgage fraud are heard by the courts.
Holub will participate in the next task force meeting on Dec. 17 in St. Louis. The task force is made up of law enforcement officials, government regulators and real estate professionals.

CU System briefs (11/30/2008)

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* AKRON, Ohio (12/1/08)--A man who handed a teller at TeleCommunity CU a note saying his child was being held hostage by someone outside a medical center in Brecksville, Ohio, likely used the hoax to throw authorities off his trail, said Bath Township police. The unarmed man walked away from the Akron-based credit union with an undisclosed amount. His note had said the child would be killed if he didn't return and give money to the kidnapper. Police spotted the suspect later headed in the opposite direction but could not turn around to give chase because of snow conditions. "We are confident at this point that there was no kidnapping and no hostage," said Police Chief Michael McNeely. The incident occurred at 11:17 a.m. Tuesday (Akron Beacon-Journal Nov. 25 and Nov. 26) … * ROANOKE, Va. (12/1/08)--A woman who received an insurance settlement and cashed it at the insurance company's bank--Bank of America--was told that one of the bills she got at the bank was a counterfeit bill. The bogus bill was discovered when she went to her credit union, Roanoke Valley FCU, to convert the cash to a cashier's check to pay for a new vehicle. A credit union teller swiped each bill with a counterfeit-detecting pen, which flagged a $100 bill. The pen works by making a dark mark on bad bills and leaves no line when a bill is good. In 2005, nearly one in every 10,000 bills handled by U.S. commercial banks turned out to be bogus, says the U.S. Treasury (The Roanoke Times Nov. 26) …

African CUs activists continue fighting HIVAIDS

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KISUMU, Kenya (12/1/08)--A member of Mwalimu Savings and Credit Cooperative (SACCO) in western Kenya is spearheading efforts by one of Kenya's largest credit unions to increase HIV/AIDS awareness and understanding among his fellow members. Today is World AIDS Day 2008.
George Musingo, a member of Mwalimu Savings and Credit Cooperative (SACCO), Kenya, and other activists are helping the world become aware of HIV/AIDs issues. Today is World AIDS Day 2008. (Photo provided by the World Council of Credit Unions)
George Musingo is an English teacher at Day Secondary School. A father of five, Musingo holds credentials in religious studies and is pursuing a master’s degree in literature. He is also HIV-positive, a condition he discovered in 2000 after his wife died from the disease and left him to raise their five children alone. Since then, Musingo has undertaken a second master’s degree to explore the impact that HIV-positive disclosure has on the educational community. He also maintains his peer leader position at Mwalimu, one of the Kenyan SACCOs supported by World Council of Credit Unions’ (WOCCU) development efforts. “I have become an HIV/AIDS activist to save the teaching community in Kenya from the stigma and discrimination associated with the disease,” said Musingo, one of three HIV/AIDS peer leaders who spoke at WOCCU’s African SACCO Technical Conference at Banjul, The Gambia in October. “It would be my joy if HIV/AIDS sufferers could die in dignity, rather than in denial.” Musingo is one of many such peer educators involved in Kenya's “Mwalimu Stop AIDS” program, which attempts to combat the spread of HIV/AIDS through member education and advocacy. More members are reportedly listening and more of those afflicted by the pandemic are gaining access to critical anti-retroviral therapies used to combat the illness. As World AIDS Day 2008 dawns today, HIV/AIDS continues its deadly global spread at an alarming rate. At the end of 2007, an estimated 32.7 million people were infected by HIV/AIDS worldwide, according to a report issued by the World Health Organization (WHO), the United Nations Joint Program on HIV/AIDS (UNAIDS) and the United Nations Children’s Fund (UNICEF). The rise in the number of sufferers has slowed thanks to better education and increased access to drugs, with some three million new patients receiving critical antiretroviral therapy last year. Despite increased efforts, in 2007 an additional 2.5 million people contracted HIV/AIDS, and 2.1 million died from the disease. Roughly 68% of sufferers worldwide live in sub-Saharan African countries like Kenya. More than three million people in Kenya, including 16% of the adult population, are HIV-positive. Kenya is one of eight countries worldwide that has seen an increase in the total number of HIV/AIDS cases during the past year, according to UNAIDS statistics. “HIV/AIDS is a serious crisis in Kenya, and the majority of those who are HIV-positive do not know their status,” Musingo said. “Testing for HIV is only compulsory for mothers who have gone for antenatal care and criminals convicted of sexual offenses like rape. These forms of testing are a small percentage on which to base the national statistics.” WOCCU’s Cooperative Development Program, funded by the U.S. Agency for International Development, supported the launch of an HIV/AIDS peer educator program with Mwalimu SACCO in 2006. The peer education model is based on the idea that groups of members acting as change agents and opinion leaders can be trained to effectively disseminate information and influence their communities. WOCCU and Mwalimu initiated the program in partnership with JHPIEGO, an international health organization affiliated with The Johns Hopkins University. Currently, the Mwalimu Stop AIDS program is supervised by three program managers who oversee the work of 24 peer leaders and 264 peer educators from seven of Kenya’s eight provinces. Additionally, 300 Mwalimu delegates (elected regional SACCO representatives) received introductory training on HIV/AIDS peer education in April 2008. “SACCOs are the hub of individuals’ economic development and almost all professionals and employees have savings programs,” Musingo said. “Life is about buying, selling, saving and saving well. SACCOs, therefore, become the best choice to disseminate this information because all people, including the poor, aspire to have formidable savings accounts.” Musingo was nominated in June by the Office of the President of Kenya to become a member of the National Platform for Risk Reduction. The Kenyan government is encouraging the population to be tested for HIV/AIDS and qualify for free diagnosis and treatment, he said, but the process is proceeding slowly. “In Kenya, there are many other activists, but most of them are women,” Musingo added. “Women are more honest and sincere about life than men. Professional men who are HIV/AIDS activists are very few.”

CUs work to ease hunger during Thanksgiving

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MADISON, Wis. (12/1/08)--Donations to many of the nation's food banks are not keeping pace with increased demand, especially in today's economy. However, credit unions worked to make sure people had enough to eat during the Thanksgiving holiday.
Volunteers from US FCU, Burnsville, Minn., packaged meals for Feed My Starving Children. Each meal was packed with essential ingredients necessary to establish better nutrition and health for children around the world. (Photo provided by US FCU)
Nationally, donations are up about 18%, but demand has grown more--between 25% and 40%, says Feeding America, the nation's largest hunger relief charity (USA TODAY Nov. 26). Many credit unions had volunteers working to provide food to various organizations. Here are some examples. Employees of US FCU, Burnsville, Minn., volunteered at the Northfield Armory last month to pack meals for Feed My Starving Children, a non-profit that feeds starving children around the world. More than 700 volunteers, including 12 from the credit union, helped pack 171,072 meals consisting of rice, soy, dehydrated vegetables and vegetarian chicken flavoring. The initiative will feed about 500 children for one year. Madison, Wis., area credit unions collected cash or check donations in their End Hunger at a Credit Union campaign last month. Proceeds will benefit Second Harvest Foodbank of Southern Wisconsin's more than 400 foodbanks. The campaign is part of NBC15's Share Your Holidays campaign. Among the supporters are CUNA Mutual Group, Madison Area Chapter of Credit Unions, and Summit CU.
Security Service FCU (SSFCU) employees Jennifer Gleitz and Derrick Aguilar help Nick Migliore, son of SSFCU employee Rich Migliore, collect frozen gobblers during the annual Turkey Round-Up Nov. 22. The credit union collected more than 200 turkeys for the San Antonio Food Bank to distribute to families in need. SSFCU continued to collect canned goods and donations throughout November, working toward a goal of one million pounds of food. (Photo provided by Security Service FCU)
On the day before Thanksgiving, employees from Service CU (SCU), Portsmouth, N.H., stopped at three food pantries and soup kitchens to drop off hundreds of ready-to-cook turkeys for Thanksgiving dinner. All 15 branches of the credit union participated in the food drive. They also collected canned goods and non-perishables for the New Hampshire Food Bank. "For every 10 items collected, we donated a turkey," Lori Holmes, public relations manager for SCU, told local newspapers (Seacoastonline.com Nov. 19 and Fosters.com Nov. 26). The Idaho Food Bank needed 500 turkeys, and last week, Potlatch 1 FCU, Lewiston, Idaho, stepped up to the plate and provided all 500 turkeys. "We supported the turkey drive last year and this year again," said President/CEO Chris Loseth (KLEWTV.com Nov. 26). The turkeys will help fill the food bank warehouse and reach the goal of giving out 2,500 turkeys during the holiday season. Canned yams were the item of interest to San Antonio FCU (SACU) in Texas. SACU collected canned yams to support the Raul Jimenez Thanksgiving Dinner. The annual dinner feeds more than 25,000 people, including senior citizens and people in need. "This year, even more than in the past, being able to provide a nutritious meal in a festive environment is very gratifying," said Jeff Farver, SACU president/CEO. Pacific Service CU continued its sponsorship of Huckleberry Youth programs by providing meals and snacks for runaway and homeless youth at the Huckleberry Youth Program shelters in San Francisco and Marin Counties, Calif. Steve Punch, president of the Walnut Creek, Calif.-based credit union, noted that the program "is an important resource for kids who feel they have no alternatives to avoid homelessness or running away."

Eight members accounts cleaned out in scam

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SANFORD, Fla. (11/26/08)--The checking accounts of at least eight members of a credit union in Florida were cleaned out by what is believed to be skimmers who cloned their credit cards. Seminole Schools FCU, a $37.9 million asset credit union in Sanford, said that every dime the members lost will be restored to their accounts (WFTV.com Nov. 24). Sanford police were going through account data Monday, trying to find a common purchase point. They suspect an organized skimming operation is operating in Central Florida and skimmed the account information from devices where victims swiped their cards. Card losses due to skimming total more than $1 billion a year, and the crimes have been reported all over the world. The article cautioned that consumers should check their account balances for even the smallest expenditures. Skimmer thieves typically withdraw a small amount first to "test" whether the account is good.

CUs mark 100th anniversary of nations first CU

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MADISON, Wis. (11/26/08)--Credit unions in North Carolina and in Florida were among those marking the 100th year anniversary Monday of St. Mary's Bank, Manchester, N.H., the first credit union in the nation.
Click to view larger image Nationally syndicated radio host and credit union supporter Clark Howard, third from left, made a surprise visit Monday to Coastal FCU, Raleigh, N.C., to help celebrate the 100th anniversary of the credit union movement and the nation's oldest credit union, St. Mary's Bank. Howard is shown with Coastal FCU CEO Larry Wilson (center) and the credit union's senior management team. (Photo provided by Coastal FCU)
Coastal FCU, a $2.019 billion asset credit union in Raleigh, N.C., decorated its headquarters and made refreshments available to all its branches. While the festivities were intended for members, the credit union's celebration attracted one big name to help celebrate, said Joe Mecca, Coastal's director of community and corporate relations. Nationally syndicated radio host Clark Howard was in Raleigh Monday, and took time out of his schedule to make a surprise visit to Coastal, Mecca said. Howard, he added, is a "vocal supporter of credit unions." Howard made a brief appearance at the credit union's St. Albans Drive building, pausing for a few handshakes and photos before helping to cut the cake served to members and employees throughout the day. Power Financial CU in Pembroke Pines, Fla., reported that it is taking part in the year-long, industrywide celebration in honor of the first credit union's centennial. "While Power Financial CU may only be celebrating its 56-year-anniversary, we pride ourselves in playing an invaluable role in the growth of the credit union movement here in South Florida by providing outstanding customer service, lower loan rates, higher dividend rates and fewer fees than our big bank neighbors," said Allan M. Prindle, president/CEO. To celebrate the centennial, the $480 million asset credit union will educate the local community on the benefits of credit union membership through various marketing communication programs. "In addition, we are offering complimentary financial checkups for members as well as non-members to assist them with their financial goals and evaluate their current plants to determine if any adjustments are recommended to weather any adverse or changing conditions," he said. "At this time of the year when traditions play such an important part of our holiday celebrations, we want to remind the community that credit unions are also built on a tradition"--of people helping people, Prindle said. St. Mary's Bank CU was organized in November 1908.

Michigan summits discuss foreclosure process

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PLYMOUTH, Mich. (11/26/08)--The Michigan Credit Union League (MCUL) conducted the first of two Economic Summits with credit unions
Greg Wischmeyer, vice president of lending for Frankenmuth (Mich.) CU, speaks during the Michigan Credit Union League’s Economic Summit.
leaders Nov. 19 at Michigan Credit Union Center. The foreclosure process dominated the discussion. Ideas discussed to make the process more practical for lenders included shortening redemption periods, allowing the lender to obtain titles more quickly for abandoned homes, and adding penalties to help mitigate damage to property during the foreclosure process (Michigan Monitor Nov. 24). George Hofheimer of the Filene Research Institute was present to hear credit union discussion on the issues. The Michigan Credit Union Foundation commissioned the institute to generate a report on the housing crisis in Michigan. The report is expected to be complete in January.
Michigan Credit Union League President/CEO David Adams reviews pressing economic issues with credit union leaders. (Photos provided by the Michigan Credit Union League)
Issues were divided into 10 categories that ran from preserving the credit union tax exemption, capital reform and reducing regulation, to ideas related to student lending, savings incentives, expanded credit union investment authority and key accounting issues. MCUL President/CEO David Adams addressed the group and invited dialogue regarding issues facing credit unions and the economy in general. The topics will be reviewed with a broader credit union audience during the second part of the Economic Summit, to be conducted by webinar Dec 17.

Georgia CUs raise 825000 in CMN radiothon

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DULUTH, Ga. (11/26/08)--Staff from six Georgia credit unions and Georgia Credit Union Affiliates (GCUA) stepped up to help at the Sixth Annual Children’s Miracle Network “Star 94 Cares For Kids Radiothon,” Nov. 13 -15.
From left, Kodisha Taylor, marketing account executive, Georgia Credit Union Affiliates (GCUA); Shunielle Monroe, GCUA credit card account specialist; and Judy Kinney, LGE Community CU, Atlanta, helped at the Sixth Annual Children’s Miracle Network “Star 94 Cares For Kids Radiothon,” Nov. 13-15. (Photo provided by Georgia Credit Union Affiliates)
LGE Community CU, Marietta; CDC CU, Atlanta; Georgia FCU, Duluth; Retail ECU, Atlanta; Pinnacle CU, Atlanta; and Delta Community CU, Atlanta, all participated. The radiothon raised more than $825,000, with 100% of the donations going to Children’s Healthcare of Atlanta. Stories about the lives of children and their families were broadcast live from Children’s Healthcare of Atlanta, giving listeners an idea of the impact their donations would have. Many of the credit union volunteers were inspired by this event and are looking forward to the next radiothon, GCUA said. Celebrity R&B singer Ne-Yo participated in the event and stopped by the radiothon to encourage volunteers. Donations for the past six years total $6.6 million.

CUNA closed for holiday no INews NowI

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WASHINGTON and MADISON, Wis. (11/26/08)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association will be closed for the holiday on Thursday and Friday. News Now will not publish on those days and will resume regular publication on Monday.

CU System briefs (11/25/2008)

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* FORT LEAVENWORTH, Kan. (11/26/08)--A man was seriously hurt after he plunged down a 40-to-50-foot ravine with a stolen Bobcat skid loader and a 3,000-pound ATM stolen from Frontier Community CU in Fort Leavenworth, Kan. Police responded to an alarm at the credit union at 2 a.m. Sunday and found the outdoor ATM had been removed. A trail of debris and tracks led them to the ravine behind the credit union. At the bottom were the skid loader, the ATM, and the 49-year-old suspect trapped inside the Bobcat cage. He was transported to a local hospital then airlifted to a hospital in Kansas City, Kan. His injuries were not life-threatening. The credit union removed the money from the ATM until it could be recovered. Damage estimates were not available (Leavenworth Times Nov. 25 and Kansas City Star Nov. 24) … * TALLAHASSEE, Fla. (11/26/08)--A second suspect was sentenced to a 20-year prison term Monday for the Feb. 21 armed robbery of Score CU, Tallahassee. Jarrod Chavers received the same sentence as another suspect, Dontae Howard, who was sentenced in October. Howard allegedly took control of the credit union lobby at gunpoint and forced the manager to crawl out of her office and lie face down on the ground while Chavers robbed two tellers at gunpoint (Tallahassee Democrat Nov. 25) … * SAN ANTONIO (11/26/08)--Security Service FCU has donated a Ford
Click to view larger image Click for larger view
F150 truck to the American Red Cross San Antonio Area Chapter. The $4.652 billion asset credit union is located in San Antonio. The chapter is responsible for providing disaster assistance in 23 counties in South Central Texas. This includes responding to floods, tornadoes and, on a daily basis, fires. The credit union wanted a durable, reliable vehicle to reach those needing assistance. Pictured are Michael L. Bennett, CEO of the American Red Cross San Antonio Area Chapter, and Steven J. Schott, vice president, finance and accounting, Security Service FCU. (Photo provided by Security Service FCU)… * FARMERS BRANCH, Texas (11/26/08)--Larry Strong, CEO of Velocity CU (formerly Austin Municipal CU) in Austin, Texas, died Sunday unexpectedly. Strong served the $425 million asset credit union for more than 30 years, assuming the role of president/CEO in 1988. In January, he stepped down as president but maintained an active role as CEO of the 60-year-old credit union. Services will be held today at 10 a.m. at the Harrell Funeral Home in Austin. He is survived by his wife Vicki Puryear-Strong, two daughters, and three grandsons (LoneStar Leaguer Nov. 25) … * MADISON, Wis. (11/26/08)--Eleanor Rosenberger Jacobs, former assistant managing director of the Credit Union National Association (CUNA), died Monday in Madison, Wis., two days before her 96th birthday. In 1966, she joined the Latin American Regional Office of CUNA in Panama. In 1972, she returned to Madison as special assistant in charge of public relations and advertising. Later that year, she was promoted to assistant managing director--the first woman to serve on the seven-person executive team. She received numerous awards for her work and retired from CUNA in 1976. Jacobs continued her association with CUNA by serving on the board of the national Association of Retired Credit Union People and the Herb Wegner Memorial Fund. She is survived by one daughter, three step-grandchildren and four step great-grandchildren …

First CU transaction recreated at 100th celebration

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MANCHESTER, N.H. (11/26/08)--St. Mary’s Bank, America’s first credit union, celebrated its 100th anniversary Monday with a re-enactment of the nation’s first credit union transaction. “It was spectacular,” said Elizabeth Stodolski, St. Mary’s Bank vice president of marketing. “The actors were wonderful.”
Click to view larger image St. Mary’s Bank held a re-enactment of the first transaction at its credit union as a part of its 100th anniversary celebration Monday. From left are actors portraying millworkers--the credit union’s first member--and one of the credit union’s founders, attorney Joseph Boivon. (Photo provided by St. Mary’s Bank)
The transaction took place at the original location of St. Mary’s Bank, which is now America’s Credit Union Museum. Professional actors wearing costumes reflecting the early 1900s played the roles of the credit union’s founders, Monsignor Pierre Hevey, Alphonse Desjardins, and Joseph Boivon, and millworkers, who were the credit union’s first members. The re-enactment was videotaped through a partnership with Credit Union Journal. CO-OP Financial Services also supported the videotaping. The videotaping took about four hours. “We took a more ambitious approach,” Stodolski said. “We shot multiple scenes in the interior and exterior of the museum. The nature of the re-enactment was not conducive to a live audience, but neighbors and community members walked by the filming and watched, she said. St. Mary’s Bank President/CEO Ron Rioux, who was instrumental in getting America’s Credit Union Museum off the ground, also was in costume. The video is being edited, and will be available on the St. Mary’s Bank website, www.stmarysbank.com. After the re-enactment, a reception was held at the museum. About 100 individuals attended, including Dan Eagan, president/CEO of the New Hampshire Credit Union League, Rioux, and two guests from Canada--France Dionne Quebec, delegate to Boston, and Esther Normand of the Alphonse Desjardins Historical Association. The credit union also continues to collect ideas and online votes for items that will be placed in a St. Mary’s Bank time capsule, which will be buried as a part of the 100th anniversary celebrations.

SECU hosts Chinese banking delegation

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RALEIGH, N.C. (11/26/08)--A Chinese banking delegation from Shijizahuang City Commercial Bank met with State Employees CU (SECU) in Raleigh, N.C., Nov. 19. The delegation learned about credit unions and how not-for-profit cooperatives in the U.S. operate. The delegation comprised 10 department and branch managers, and an executive leader. Delegates toured a SECU branch and saw technology demonstrations. They also met with SECU Senior Executive Vice President Bobby Hall and board chairman Shirley Bell.
A Chinese banking delegation from Shijizahuang City Commercial Bank met with State Employees CU (SECU) in Raleigh, N.C., Nov. 19. At center is Bobby Hall, SECU executive senior vice president. The delegation was hosted by a global training initiative at North Carolina State University. (Photo provided by State Employees CU)
The visit was “an opportunity to share the credit union message with an international audience,” Bell said. “Our bank shares very similar goals with SECU,” added Junlong Sheng, Commercial Bank board chairman. “We are very impressed with the management and state-of-the-art technologies that are used in SECU and its network. What we need to learn from SECU is how to improve the quality of our loans, especially personal loans, through risk management, services, innovative technologies and more personal management style.” The delegation was hosted by North Carolina State University’s Global Training Initiative. SECU has $16.4 billion in assets.

CU System briefs (11/24/2008)

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* JACKSON, Miss. (11/25/08)--A man was shot to death Saturday while allegedly attempting to break into a vehicle at an apartment complex behind Jackson-based Magnolia FCU. The man was identified as Brandon Lenard of Jackson, 20. Witnesses said Lenard was breaking into an SUV when the owner of the vehicle caught him inside the vehicle (WLBT.com Nov. 24) … * HARRISBURG, Pa. (11/25/08)--The Pennsylvania Credit Union Association board approved a contribution of $10,000 to the Pennsylvania Credit Union Foundation from Pacul Services Inc. (Life is a Highway Nov. 24). The board also approved adding an existing investment policy of both PCUA and Pacul to make funds available for equity investments … * ORLANDO, Fla. (11/25/08)--An Orlando woman who headed a theft ring that defrauded several Central Florida banks and credit unions was sentenced to 20 years in prison, followed by 20 years' probation. Lucie Mae Thomas, 42, pleaded guilty to racketeering, grand theft and forgery. Thomas and seven others, who also pleaded guilty, set up accounts with bogus checks and withdrew cash from the accounts, netting about $5,000 daily, said prosecutors. The institutions lost more than $100,000 (Orlando Sentinel Nov. 22) … * APPLETON, Wis. (11/25/08)--Community First CU, based in Appleton, and the J.J. Keller Foundation have agreed to match up to $30,000 each for the Women's Fund for the Fox Valley Region's year-end appeal (Post-Crescent Nov. 23). The challenge grant money will be used to support grants from the Women's Fund and programming to help meet basic needs and secure long-term economic security through financial education as part of the fund's Financial Fluency Initiative … * MINNEAPOLIS (11/25/08)--A man who robbed U.S. FCU Friday is believed to be the same person who robbed a U.S. Bank branch two days earlier, according to law enforcement officials. The man presented a teller at the credit union with a note demanding cash. The note was written on a torn piece of tan paper. The teller gave him the cash, and the robber fled (Associated Press via Star Tribune Nov. 22) …

INewsdayI touts CU benefits

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NEW YORK (11/25/08)--Credit union advantages were the focus of an article Sunday in Newsday, which noted that credit unions are a "viable alternative to a traditional bank" as credit begins to dry up elsewhere. Newsday listed the advantages:
* Better rates on loans and savings at credit unions; * Cheaper banking with free checking and lower fees; * Convenience through ATM networks and online banking; * More personal loans and payday-alternative loans at lower rates than payday lenders; * Mortgage loans with lower closing costs; and * Better rates on new-car loans.
The article also appeared in the Allentown Morning Call Sunday.

Economic crisis a chance to teach kids about money

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RICHARDSON, Texas (11/25/08)--Texans CU has a student-run branch to teach youth about finances. The branch of the $1.830 billion asset, Richardson, Texas-based credit union is located at the Career and Technical Education Centre in the Frisco Independent School District (Dallas Morning News Nov. 24). The ongoing U.S. economic crisis presents a great opportunity for parents to instill values and beliefs in their children, Jack Smith, Texans vice president of branch sales, told the newspaper. Cynthia Nevels, executive director of the Jr. Financial Literacy Academy Inc. in Irving, Texas, hopes that young people will learn that if they cannot afford something such as a house or car, then they should not buy it, she told the paper. Learning to pay bills on time will help kids get better loans in the future, Smith said. Although the current economic turmoil is painful for many people, it provides parents with a unique chance to teach their children valuable financial lessons, the paper said.

Local CUs banks in Yakima picking up business

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YAKIMA, Wash. (11/25/08)--Credit unions and community banks are doing well in Yakima, Wash., the Yakima Herald reported Monday. Yakima Valley CU increased its deposits by 4.7% between September and October. It also experienced a record number of account openings in the past few months, the newspaper said. Yakima Valley has $240 million in assets. Catholic CU reported a 1.8% increase in deposits between Aug. 31 and Oct. 31, the newspaper said. Catholic CU has $164 million in assets. Mina Worthington, Yakima Valley president/CEO, told the Herald that the rise in business at credit unions could be due to consumers’ perception that larger financial institutions aren’t as stable as smaller ones. Several credit unions in Yakima, including Yakima Valley and Catholic CU, also were recently awarded perfect five-star ratings from BauerFinancial Inc. High ratings are presented to institutions that are well-capitalized and can prove their deposits are secure. Credit unions practice traditional banking and have stayed away from subprime lending, BauerFinancial President Karen Dorway told the newspaper. To read the full article, use the link.

MnCUN state organizations launch fraud campaign

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ST. PAUL, Minn. (11/25/08)--The Minnesota Credit Union Network (MnCUN) has teamed up with organizations around the state to launch a fraud prevention campaign, the MnScams campaign.
Minnesota Credit Union Network and the Minnesota Fraud Enforcement Partnership participated in a press conference Friday launching the group's anti-fraud campaign. Speaking is Renee, a fraud victim, who warned consumers about techniques scammers use. (Photo provided by the Minnesota Credit Union Network)
The campaign was announced at a press conference Friday. With the theme, "No More Minnesota Nice," it will work to reduce fraud in Minnesota by educating citizens on how to recognize and report scams. The campaign was created by the Minnesota Fraud Enforcement Partnership, comprised of a network of state organizations, including MnCUN, banks, law enforcement agencies, and community groups. The partners will use a website, posters, brochures, table tents and other materials to educate Minnesotans about fraud. "Authorities will do as much as we can to help recover lost funds from fraud cases, but citizens truly must be the primary enforcers in fraud cases," said John Willems, director of the Alcohol and Gambling Enforcement Department of the Minnesota Department of Public Safety. “This effort will educate citizens and give them the tools they need to recognize fraud from the start,” he said. At the press conference, Renee, a fraud victim, shared how scammers used daily phone calls to gain her trust and develop a relationship with her. Through these communications, the scammers convinced her to send funds to redeem lottery monies she had supposedly won. In the end the criminals stole about $170,000 from her. "If you’ve won something, you don’t have to send money to claim your prize,” Renee advised other Minnesotans. “Don’t allow this to happen to you. Talk to the Minnesota Department of Public Safety [if you think you’re being scammed].” MnCUN will involve credit unions in the campaign and assist them in learning how to identify mass-marketing scams, the negative impact these schemes have on financial institutions, and how to report a fraud. The network also will distribute fraud education materials to credit unions to be placed in branches and disseminated to members. Every day scammers target thousands of Minnesota consumers in hopes that they will fall for the scams,” said Mark D. Cummins, MnCUN president/CEO. “Right now there is a great need for fraud education, and the need will only continue to grow as the economy continues to struggle. For that reason, the Minnesota Credit Union Network is committed to working with credit unions to educate consumers about how to identify and report scams,” Cummins said. Since September 2007, MnCUN has been a member the Minnesota Fraud Enforcement Partnership, the first enforcement program of its kind in the U.S. The collaboration consists of a variety of state and community organizations working to reduce Minnesotans’ losses from fraudulent sweepstakes, lottery schemes, and mass-marketing frauds.

Wisconsin CUs income grew 3 in nine months

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MADISON, Wis. (11/25/08)--Wisconsin credit unions’ net income grew about 3% during the first nine months of 2008, according to a new report from the state regulator. Credit unions made roughly $95.8 million through Sept. 30, compared with $93 million in the same period of 2007, said the Wisconsin Office of Credit Unions (The Milwaukee Journal Sentinel Nov. 23). The regulator also indicated that the ratio of delinquent loans increased slightly to 1.21% from 1.16%--which the regulator said is a good rate for credit unions amid a slumping economy. However, a prolonged recession eventually will negatively impact credit unions even though they are conservative lenders, Suzanne Cowan, office director, told the newspaper. While credit unions are not-for-profit cooperatives owned by their members, the not-for-profit status that exempts them from income tax has been a point of contention with bankers who cite the exemptions as an unfair competitive advantage, the paper noted.

CUNAs Mad City Money gives students dose of real life

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MADISON, Wis. (11/25/08)--Heartland CU sponsored sessions of the Credit Union National Association’s Mad City Money budgeting simulation to more than 1,000 students during Wisconsin’s Money Smart Week last month. The two-and-a-half-hour, hands-on simulation gave students a taste of the real world--complete with an occupation, salary, spouse, student loan debt, credit card debt, and medical insurance payments.
Sally Dischler, president/CEO, Heartland CU, Madison, Wis., helps a student pay his credit card bill as part of the Credit Union National Association’s Mad City Money budgeting simulation last month. (Photo provided by Heartland CU)
With their net income filled in on their budget sheet, students visited nine merchants. They shopped for a home, a car, childcare needs, food and clothing; paid their credit card debt; and deposited money into a savings account at the credit union. The merchants were trained to sell, not assist students in making the right decision. By visiting the merchants, students experienced writing out checks and balancing a checkbook. Also, the Fickle Finger of Fate presented each student with an unexpected windfall and an unexpected expense. The students’ goal was to have less than $100 in their checking accounts. One advantage of a simulation is that the students get to experience the effects of their good and bad spending decisions on the “family” budget without the real-life consequences. “It’s an amazing experience to watch. Some students have little knowledge about how to write checks or budget, while others have had a checking account for many years,” said Sally Dischler, president/CEO of the $146.4 million asset, Madison, Wis.-based credit union. “Often, these kids find themselves with a negative balance after buying their luxury SUVs and have to downsize if they are going to meet their budget. “In the end, they walk away with the realization that life can be expensive,” she added. “One participant exclaimed that after this experience, she didn’t want to grow up."

European CUs expect U.S. economic crisis ripple

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BUCHAREST, Romania (11/25/08)--Current economic challenges facing the U.S. were topics of frequent discussion at World Council of Credit Unions' (WOCCU) European Credit Union Technical Congress last week in Bucharest, Romania. Presenters at the week-long congress offered strategies to strengthen credit union movements and help individual institutions better face the anticipated ripple effect of the growing U.S. economic crisis.
World Council of Credit Unions (WOCCU) European Technical Congress attendees, from left, Florin Simion, executive director of the Central Federation of Romanian Credit Unions; Brian Branch, WOCCU executive vice president and chief operating officer; and Grzegorz Bierecki, president of the National Association of Cooperative Savings and Credit Unions, listen to speakers at a Bucharest, Romania, meeting last week.
National Association of Cooperative Savings and Credit Unions’ Grzegorz Bierecki emphasized the need for greater unity among Eastern European credit unions at a Bucharest, Romania, meeting. (Photos provided by World Council of Credit Unions)
“These are challenging but promising times for credit unions,” Brian Branch, WOCCU's executive vice president and chief operating officer, told nearly 150 delegates from 10 countries attending. Attendees included officials of the Romanian government and the Central Bank of Romania. “People will be looking more and more to credit unions to help them face their economic challenges during this turbulent period,” Branch added. Delegates from Ireland, Lithuania, Macedonia, Moldova, Poland, Romania, Russia, Ukraine, the U.S. and Uzbekistan attended educational sessions designed to help European credit unions continue growing and serving members as the U.S. economic crisis travels east. The economic ripples are expected to gather strength and pose greater challenges to European credit unions throughout 2009 and into 2010, according to local reports. “We're here to cooperate and support each other's work,” said Grzegorz Bierecki, president of the National Association of Cooperative Savings and Credit Unions, Poland's credit union trade group, and treasurer for WOCCU's board. “This is very important for us in Eastern Europe.” Educational sessions focused on financial management, credit union building, delinquency control, interest-rate setting and marketing. Seminars also stressed the importance of lobbying and developing model credit union law, policies and bylaws, and the proper role and authority of board members. Educational sessions were simultaneously presented in English, Polish, Romanian and Russian. The European Credit Union Technical Congress, co-sponsored by the Central Federation of Romanian Credit Unions, was the final of four sessions presented this year by WOCCU. Previous technical congresses were held in Guatemala, Fiji and The Gambia.

Michigan league relocates expands Lansing presence

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LANSING, Mich. (11/25/08)--The Michigan Credit Union League (MCUL) and its subsidiaries, CUcorp and CU Village, are changing facilities. The league is downsizing its headquarters in Northville Township through a building swap with Detroit Edison CU. Detroit Edison brought the 52,000 square-foot facility from the league. CUcorp and CU Village and select administrative staff took over the former Detroit Edison property in Livonia Friday. That building has 14,000 square feet. The trade will allow MCUL to move its headquarters to a new Lansing location at 101 S. Washington Square, Suite 900, by the first of the year. The new 8,700-square-foot location downtown includes the naming rights on the building. The league will now have 20 jobs based in Lansing. "The facility changes will save the MCUL and its subsidiaries about $250,000 per year," said league President/CEO David Adams. "The new headquarters is part of a long-term plan to enhance our presence in Lansing that will add to the grassroots lobbying the MCUL has already established in the state's capital. The moves also will ensure long-term operating-cost control," he said. The Lansing headquarters will house Legislative and Regulatory Affairs, Public Affairs, Education and CU Relations. All league/CUcorp and CU Village phone numbers, e-mail addresses and fax numbers will remain the same.

Why N.J. lawmaker backs municipal deposits for CUs

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TRENTON, N.J. (11/25/08)--A New Jersey assemblyman who introduced legislation last week to help local credit unions become authorized public depositories of government funds says he did so to help boost the state's economy. "We need to be doing more to help local businesses, said Assemblyman Fred Scalera (D-Essex/Bergen/Passaic). "Credit unions are the sparkplug to the local economy because they do most of the local lending to local members." Under the measure (A 3508), credit unions whose deposits are insured by the National Credit Union Administration wuld be authorized to receive government funds as qualified public depositories. The legislation also would allow out-of-state credit unions having a branch office in New Jersey to take government deposits. Currently, public depositories are limited to only institutions insured by the Federal Deposit Insurance Corp. (News Now Nov. 20). By extending competition to credit unions, Scalera said, local governments will get the best return and help save taxpayer money. "Credit unions should have the same opportunity to compete to hold government funds," said Scalera. "Credit unions are just as safe and responsible as typical financial institutions backed by the FDIC." He introduced the bill Nov. 17. It likely will be referred to the Assembly Financial Institutions and Insurance Committee for consideration, Scalera said in a press release.

Fires prompt FSCC CUs to review emerging services

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SAN DIMAS, Calif. (11/21/08)--Financial Service Centers Cooperative (FSCC) is encouraging credit unions to review their disaster recovery and business continuity plans after recent wildfires in Southern California affected Los Angeles-area residents. “With a significant number of credit union members residing in the impacted areas, FSCC is reaching out to those credit unions affected by the fires or who have members that are affected,” said Sarah Canepa Bang, FSCC president/CEO. FSCC has an emergency shared branching (ESB) network and is waiving the set-up charge for the program. ESB provides credit unions and their members a method to complete deposits withdrawals at all shared-branching locations. FSCC is not requiring credit unions to sign on to full-blown shared branching. “FSCC’s network also offers more than 500 locations at 7-Eleven stores, which are available to members of shared-branching credit unions or members who have been impacted by the fires,” Canepa Bang said. The California fires burned more than 35,000 acres in Los Angeles, Orange County and in Montecito near Santa Barbara. More than 1,000 people were affected. FSCC is a credit union Shared Branch Network that provides more than 5,500 deposit taking locations in the U.S.

N.C. league CUs host Mexican CU officials

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GREENSBORO, N.C. (11/24/08)--Five executives from Caja Morelia Valladolid, one of Mexico's largest credit unions, visited the North Carolina Credit Union League and several state credit unions last week.
From left, Jeff Hardin, North Carolina Credit Union League director of communications, joins Caja Morelia's Alejandro Rojas and Homero Ambriz to learn about information technology at Truliant FCU, Winston-Salem, N.C.
Their visit was to help them better understand technology and for them to offer marketing tips and techniques to help the state's credit unions better serve Hispanic members. The delegation wasn't the only group of foreign credit union officials to visit the state in recent months. In October, two employees of Godo CU in Suriname visited to learn how to better achieve front-line efficiencies, handle growth and deepen member relations. Both visits were related to the league's partnerships with Caja Morelia and the Suriname Credit Union League as part of World Council of Credit Unions' (WOCCU) International Partnerships program. "Many questions are asked and ideas exchanged during these visits," said John Radebaugh, league president/CEO. "In the process, we all see that the worldwide credit union movement seeks a very powerful common purpose--finding new and innovative ways to serve the needs of members." North Carolina has one of the country's fastest growing Hispanic populations, according to the U.S. Census Bureau. Between 1990 and 2000, that population grew 394%--to 378,963 from 76,726. Hispanics today comprise nearly 5% of the state's population. More than 65% of its Hispanic population is Mexican in origin, making Caja Morelia's marketing lessons valuable to participating credit unions. The Caja Morelia delegation spent a week touring credit unions, including Truliant FCU, Winston-Salem, where Truliant President/CEO Marc Schaefer demonstrated its advanced delivery technologies. Truliant uses home banking, video kiosks, and smart cards, and soon will implement a program to allow members to scan and cash checks from home. Homero Ambriz, Caja Morelia's IT manager, and Bob West, Truliant's chief information officer, also compared notes on system infrastructure, hardware and design, and programming, software development and data management.
Click to view larger imageThe Caja Morelia delegation visiting Latino Community CU, Durham, N.C., included, from left: Homero Abriz; Illiana Lopez; Amaury Coria Ramirez; Cristian Ramos; Luis Pastor, CEO of Latino Community CU; and Alejandro Rojas. (Photos provided by the World Council of Credit Unions)
The delegation also discussed technology with Charlotte Metro CU, and learned about the importance of lobbying from Ryan Donovan, the Credit Union National Association's vice president of legislative affairs, who spoke at a chapter meeting during the visit. The group also met with Luis Pastor, CEO of Latino Community CU in Durham, where they discovered how a strong commitment to credit union philosophy has helped the community development credit union attract and serve members. “Among the very valuable things we are taking away from this visit to North Carolina are the actions credit unions take for preserving the essential principles of cooperation,“ said Amaury Coria Ramirez, Caja Morelia's database administrator. “The universal cooperative principles must be preserved.“ The delegation 's four-hour workshop at the league on marketing strategies to attract Hispanic members attracted more than 15 participants from eight credit unions. Iliana Lopez, Caja Morelia's marketing director, stressed the importance of recognizing the cultural differences and realities of current and potential Hispanic members and their families. Building trust and confidence is critical to attracting and retaining Hispanic members and credit unions should stress personal contact through community outreach and youth programs, Lopez said. Caja Morelia's marketing strategies include: "street promotions" such as parades and festivals; a credit union mascot to support youth marketing efforts; strategic alliances with other Hispanic social groups; and sports marketing, which includes sponsoring the local soccer team. Strong connections with the Hispanic community can also help North Carolina credit unions capture their share of the growing remittance market, Lopez added. North Carolina credit unions should have no trouble meeting the needs of Hispanics, said Alejandro Rojas, Caja Morelia's manager of planning and development. “We saw firsthand how credit unions successfully build trust and confidence with their members,“ Rojas explained. “They thoroughly support their mission and consistently strive to provide additional benefits and added value to members. That's something important that we have learned.“

St. Louis FIs playing the rates game

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ST. LOUIS (11/24/08)--The competition is on for the consumer's deposit dollar in St. Louis, with banks and credit unions paying unusually high certificate rates, according to St. Louis Post-Dispatch (Nov. 21). Last week a saver could have landed 5% interest on a 14-month certificate at a St. Louis branch of lst Financial CU, based in St. Charles, Mo., reported the newspaper. Neighbors CU, a $205 million asset credit union in St. Louis, was offering 4.25% on seven- to 10-month certificates. And a local bank was offering 4.3% on 20-month certificates of deposit to customers who opened a checking account. The credit freeze is adding to the pressures of the recession. First Financial CU CEO Nina Pilger told the Post-Dispatch that its loan demand is up but it hasn't been able to attract the deposits. And deposits are what finances loans. The demand is largely for auto loans, fueled by auto manufacturers whose captive finance companies are turning down buyers. "We're financing cars right and left," Pilger said. The car loans have a 5.5% interest rate. With CDs paying 5%, that leaves a slim profit margin and makes for a lean bottom line, the article said. The St. Louis market has always been known as a high-deposit cost market because it has 140 banks vying business there, said analysts, who predict the rates likely will come down. Nationally, CD rates are already dropping and have been the past five weeks, said Bankrate.com.

Nations first CU turns 100 today

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MANCHESTER, N.H. (11/24/08)--Today is the 100th anniversary of America’s first credit union--St. Mary’s Bank, located in Manchester, N.H.
Click to view larger imageStaff members from St. Mary’s Bank traveled to New York City to invite Today Show host Meredith Vieira to the credit union on its 100th anniversary. The staff met Vieira and gave her the invitation and token gifts. (Photo provided by St. Mary’s Bank)
“We’re balancing honoring our heritage and how we can continue to meet members' needs,” said Elizabeth Stodolski, St. Mary’s Bank director of marketing. “We have many activities planned. All of our employees feel like they’re taking part in history.” The event is so historical that the governor of New Hampshire has proclaimed today as St. Mary’s Bank Credit Union Day, Stodolski added. The celebration starts Monday morning with a tour of America’s Credit Union Museum, which is located in St. Mary’s original site. The credit union has invited a group of fourth graders from a local elementary school to tour the museum and learn about New Hampshire history and the credit union movement. Costumed characters depicting individuals such as St. Mary’s founder, Monsignor Pierre Hevey, also will be present. St. Mary’s Bank hired a historian to brief the characters on the history of the credit union and the credit union movement, so “they are well-prepared,” Stodolski said. This afternoon, St. Mary’s will host a reenactment of its founding. The reenactment will be taped and broadcast on St. Mary’s website. Afterward, the credit union will host an evening reception. The credit union also will bury a time capsule. Members and the general public voted for items placed in the time capsule through the credit union’s website. St. Mary’s Bank staff also traveled to New York City to invite Today Show host Meredith Vieira to the credit union. Credit union staff wore Meredith Vieira masks to get the host’s attention, and brought a DVD with a video invitation to the credit union. “It worked,” Stodolski said. “We put the DVD into her hands.” The staff also gave Vieira token gifts, including silver dollars from 1908 and 2008. St. Mary’s Bank hosted member thank-you days Thursday and Friday, where staff handed out gifts and refreshments to members. On Saturday, members were invited to America’s Credit Union Museum. Horse and carriage rides were available. On Saturday night, the credit union staged its own show at the Palace Theater. The theater seats 900. “We completely sold out,” Stodolski said. At the theater, viewers saw a history video about the credit union. The event also featured professional entertainers and singers. A reception held after the show honored the credit union’s employees and board members. On Sunday, St. Mary’s Parish, which was the foundation for St. Mary’s Bank, held a special church service to honor the credit union. Hevey was the reverend of St. Mary’s Parish when he founded the credit union, which aimed to serve modest-earning millworkers and their families. In the 100 years since St. Mary’s opened, the credit union has undergone changes--such as moving to a new location and becoming more tech-savvy. The credit union launched mobile banking and e-statements this year, and gave away Garmin global positioning systems and iPods to members in contests, Stodolski said. But although times have changed, the mission of St. Mary’s Bank has not. “We opened to serve people of modest means,” Stodolski said. “We never strayed from that.” For more information, use the link.

Corporate Central OKs 600000 patronage refunds

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MUSKEGO, Wis. (11/24/08)--Corporate Central CU's board approved a $600,000 patronage refund for 2008 for its member credit unions--the largest payout in the 20 years it has offered refunds. The patronage refund is in direct recognition of the commitment Corporate Central's members have shown to its success. "In a year filled with incredible challenges and remarkable market dislocations, our members continue to do what they have done for years--partner with us, support us, and rely upon us to meet their investment, liquidity, and service needs," said Corporate Central President/CEO Robert W. Fouch. Because of that commitment, Corporate Central "had a very successful year, as evidenced by our decision in March to increase the rate we paid on Membership Capital Share Deposit (MCSD) balances well above what the rate environment would warrant. Through October 2008, we have given back to our members over $1.9 million," Fouch said. The $600,000 patronage refund, coupled with the increase rate paid on MCSD balances, will represent more than $2.5 million given back this year, he said. The refund will be distributed to member credit unions based on their patronage of Corporate Central's investment, loan and correspondent services throughout the year.

CEO letter CRA not to blame for subprime mess

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CHICAGO (11/24/08)--A writer in American Banker is "dead wrong" in blaming the subprime mortgage crisis on the Community Reinvestment Act (CRA), says the CEO of a Chicago-based credit union. David Mooney, CEO of Alliant CU, a $5.693 billion asset credit union based in Chicago, expressed the opinion in a letter to the publication's editor published Friday. Although he agreed with writer Eric Grover that the government shouldn't be involved in allocating credit, Mooney noted that CRA considerations "had nothing to do with lenders' abandoning sound underwriting practices." Instead, "it had everything to do with producing income from the origination and securitization of loans. There weren't enough prime loans to feed the beast, and lenders increasingly went down market to keep the fees flowing," Mooney wrote. He noted the CRA explicitly does not require banks to engage in activities that are not safe and sound, and many of the participants in the subprime market were not subject to the regulation in any event.

Economy will affect philanthropic activities

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HARRISBURG, Pa. (11/24/08)--The Pennsylvania Credit Union Foundation (PCUF) approved its 2009 budget during its annual year-end meeting Wednesday and noted that the economy will impact philanthropic activities. "The uncertain economic climate will have negative repercussions for all philanthropic activities in the U.S. in 2009," Foundation Treasurer George West said (Life is a Highway Nov. 21). However, PCUF anticipates "far less fall off in revenue than the national average because of the foundation's continuing impressive grants track record," West said. Foundation Chairman Norb Kaczmarek said that despite the conservative projection of grant awards for 2009 that mirrors projected revenue decreases, "We may actually see an increase in project grants, given the uncertain economic position of small credit unions and the anticipated increase in demand for financial literacy projects. At the meeting, the PCUF board also:
* Approved 20 grants with a combined value of $68,476.85; * Welcomed new board member, Jeff DeBree, CEO of Penn East FCU, Scranton; * Heard a report from Matt Bergman, business teacher at Cocalico High School about foundation funds providing virtual business education to students and 30-second to one-minute business ads about financial education that are broadcast to the student body during home room period; * Reviewed fundraising results for its ongoing vendor campaign; and * Reviewed its 2007 audit report.

Texas CUs act to aid families during tax season

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FARMERS BRANCH, Texas (11/24/08)--Credit unions in Texas are participating in the Internal Revenue Service’s (IRS) Volunteer Income Tax Assistance program (VITA), according to the Texas Credit Union League. The El Paso Affordable Housing Credit Union Service Organization (AHCUSO), Neighborhood Centers Inc. (NCI) and Generations FCU, San Antonio, are involved with the initiative, which expands free services to taxpayers (LoneStar Leaguer Nov. 21). AHCUSO includes eight El Paso credit unions: GECU, West Texas CU, El Paso Teachers FCU, First Light FCU, Mountain Star FCU, Golden Key FCU, El Paso Employees FCU and One Source FCU. The credit unions received an $86,400 grant from the IRS. AHCUSO also has served as the managing organization for the El Paso Coalition for Family Economic Progress. The coalition has helped El Paso residents access the IRS’ Earned Income and Child Tax Credit Programs. NCI is a social service agency that offers support to families. Two years ago, the agency applied for a credit union charter. NCI Community Development CU will open next February. San Antonio also is an IRS grant recipient, and like Generations FCU, is a partner organization in the San Antonio Coalition for Family Economic program. The city was given $119,000 to expand the VITA program. Last year, credit unions participating in VITA funded 1,129 refund anticipation loans (RALS), totaling $2.8 million. In 2008, they funded 2,164 RALs, totaling $5.7 million and the average loan $2,860, according to Bonnie Contreras, director of business development, Generations FCU. “Not only did this program save taxpayers money because they were not charged the exorbitant fees they would likely pay elsewhere, but the credit union gained 1,067 members in 2007 and 1,515 members in 2008,” she told the league. “The VITA program helps prevent equity stripping,” added AHCUSO president and coalition chair Larry Garcia. “If not for our free tax preparation sites, these families might turn to high-cost tax preparation services, and even worse, fall victim to the costly RALs.”

2008 national Desjardins award winners announced

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MADISON, Wis. (11/24/08)--The 2008 national Desjardins Youth Financial Education Awards have been announced. A new record was set for participation, with the Credit Union National Association (CUNA) receiving more than 50 entries. “This year’s awards recognize extraordinary achievement in youth financial education that occurred before the current economic downturn,” said CUNA President/CEO Dan Mica. “Now that more and more Americans are struggling to stretch their finances in a time of rising unemployment and budgetary stress, these programs can serve as a model response. “The credit union movement has always championed financial self-reliance. The 2008 Desjardins winners show us the way to preparing today’s youth--and their families--to plan and work for a return to economic prosperity,” he added. The awards recognize leadership within the credit union movement on behalf of youth financial literacy. Credit union organizations winning Desjardins Awards include:
* Arapahoe CU, Centennial, Colo.; * LA DOTD FCU, Denham Springs, La.; * Rogue FCU, Medford, Ore.; * Sonoma County Grange CU, Santa Rosa, Calif.; * Credit Union Association of New York; and the * Maine Credit Union League.
Desjardins Award honorable mentions went to:
* Arlington Virginia FCU; * Syracuse (N.Y.) Cooperative FCU; * Dakota Plains CU, Edgeley, N.D.; * Denver (Colo.) Community CU; * DuPont Community CU, Waynesboro, Va.; * MECU of Baltimore (Md.) Inc.; and * Winston-Salem City (N.C.) Employees' CU.
Desjardins judge Amy Crowe of Summit CU, Madison, Wis., singled out Rogue FCU. The credit union responded to a request from local schools for money for a field trip by supplying staff to help teach the 20-hour entrepreneurial curriculum that related to the trip. "Rogue FCU made a deep impact in youth financial literacy in a specific area that showed direct results with students,” Crowe said. Summaries of the winning and honorable mention programs will appear on CUNA’s website. The entries also will be displayed at CUNA’s 2009 Governmental Affairs Conference, where the Desjardins awards will be presented in conjunction with the Dora Maxwell and Louise Herring awards. The Desjardins Award is named in honor of Alphonse Desjardins, the founder of the North American credit union movement. It considers all activities supporting the personal finance education of young members and nonmembers, including, but not limited to, face-to-face teaching of youth, publicity and issue education, lobbying for curriculum and/or testing requirements, and teacher and classroom volunteer training. Desjardins established the first "caisse populaire" (people’s bank) in Quebec in 1900, and helped establish the first American credit union in New Hampshire in 1909. He was an ardent believer in the value of teaching children to save, and he actively promoted the idea of in-school savings programs (caisses scolaires).

North Carolina league testifies on underserved

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GREENSBORO, N.C. (11/24/08)--Dan Schline, North Carolina Credit Union League senior vice president of association services, testified Thursday about North Carolina credit unions’ role in helping underserved North Carolinians. Schline testified before a special study committee of the North Carolina General Assembly. The assembly is looking for new ways to give North Carolina residents stable and affordable access to financial services, according to the league (Weekly Update Nov. 21). “It’s important for legislators to know that many of the programs that they’re exploring are already offered by credit unions,” Schline said. “Hopefully the committee came away with a sense of how credit unions save North Carolina consumers more than $500 million dollars annually, and we are eager to help as many North Carolinians as we can to financial freedom.” Schline noted credit unions’ special programs to help members. Allegacy FCU, Winston Salem, offers the “Totally Free Checking” program, State Employees CU, Raleigh, offers a salary advance loan program, and Marine FCU, Jacksonville, has boot camp program. Schline also told the committee that credit unions provide small loans and member education. The committee also heard testimony from community credit lending institutions and consumer advocates. Eventually it will suggest legislative solutions to help North Carolinians’ access to financial services.

CU System briefs (11/21/2008)

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* JACKSON, Mich. (11/24/08)--Jackson Community FCU, based in Jackson, Mich., announced it will close one of its three branches at the end of the year. CEO James Francis, in a letter to members, said the Wildwood Avenue office will close, with employees of that branch moving to the $24.9 million asset credit union's main office on Ganson Street (Jackson Citizen Patriot Nov. 21). The move is an effort to reduce expenses to satisfy the credit union's regulators, the letter said. The closure will allow the credit union to have four or more teller each day of the week. The Ganson Street's office also will expand drive-through hours. Beginning Jan. 5, the drive-through will be open 8 a.m. to 6 p.m. Monday through Friday … * RALEIGH, N.C. (11/24/08)--Local Government FCU (LGFCU) is boosting its scholarship program by investing an additional $100,000 in it, bringing the total amount available for scholarships to $120,000. For the first 10 years of the program, the Raleigh-based, $829 million asset LGFCU awarded 16 annual scholarships ranging from $500 to $1,500 to graduating seniors and post-secondary students for their education. The awards now are all $1,000 scholarships, which will be awarded to as many as 120 students for college expenses such as laptops and textbooks. "From now on, we would like to help students pay for something in full," said LGFCU President Maurice Smith. "While $1,000 may go a little ways toward helping with tuition, it will go most of, if not all, the way in helping to pay for a laptop and textbooks," he said … * GREENSBORO, N.C. (11/24/08)--The Carolinas Credit Union Foundation is awarding a $15,000 Micro Community Grant to Hope for the Warriors, for its Warrior's Wish Program, which grants wishes to severely injured service members (Weekly Update Nov. 21). Micro Community Grants allow credit unions in North and South Carolina to partner with local nonprofit agencies to bring community benefit. The grant proposal was put together with the help of the Southeast Chapter of Credit Unions and Marine FCU. Since it began in late 2005, the program has awarded more than $700,000 to agencies throughout the Carolinas …

Young adults goals disconnected from finances

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MADISON, Wis., and NEW YORK (11/21/08)--Young adults are finding financial security elusive, with 91% of those surveyed reporting they have financial goals while only 53% report sticking to a monthly budget. While 62% say they have thought about their own retirement, nearly as many (61%) say their retirement savings is behind schedule. In fact, 42% of young adults surveyed give themselves a D or F on how well they are saving. The reports are from a study by the American Savings Education Council and AARP in which Gen Xers (ages 28 to 39) and Gen Yers (age 19 to 27) define "financial security." The findings present an opportunity for credit unions to assist these groups, according to Jon Haller, director of market research at the Credit Union National Association (CUNA). "Young adults and kids have big plans for life, with big goals, but they haven't done anything to connect to their goals," Haller told News Now. "There's a disconnect, that feeling of 'I'm OK' when they're actually not." In the survey, when asked to define "financial security":
* 22% of respondents defined it as being able to make ends meet and not living paycheck to paycheck; * 19% said it means having enough money leftover to save for emergencies or a rainy day; * 16%, being able to simply live comfortably; * 15%, not having to worry about their finances; and * 13%, being able to weather hard times and deal with the unexpected. * 9%, being able to save for retirement, afford retirement, or maintain one's lifestyle in retirement; * 6%, being able to provide for ones' family with financial security; and * 5%, having leisure, entertainment or fun.
"From an educational standpoint, they know they should be saving early and budgeting, but they're not getting there," said Haller. Credit unions can help provide the financial education, financial literacy and information about retirement planning, he added. "As far as marketing to young adults, you have to convince them of the value of saving and budgeting. Financial security is the message that resonates with them," Haller said. "Start now to educate them early. Make that concern about security an opportunity to educate them. Today's kids are skeptical about whether Social Security and Medicare will be there when they need it. This makes it even more important for them to save for their future." Other findings include:
* Gen Yers (64%) are more confident in being able to accumulate enough for a comfortable retirement than members of the older Gen X (54%). * Young Americans are more likely to say they know more about their iPod (40% very knowledgeable) than about how to file their taxes (26%), buy a home (21%) invest outside of the workplace (15%); and save for retirement (15%).
For more, use the resource links.

What CUs can do to thwart robberies

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MADISON, Wis. (11/21/08)--With a troubled economy and the arrival of the holiday season, what can credit unions do to thwart robberies in an environment in which crime sometimes goes up? The biggest key is awareness, an industry crime expert said. The fourth quarter is probably the most active time for credit union robberies in some years, but not always, Vince Wagner, risk manager for CUNA Mutual Group, told News Now. So far in the fourth quarter of 2008 and the year as whole, credit union robberies are not significantly different than other times of the year--and may even be a little down, Wagner said. Credit union robberies reported to CUNA Mutual the past few years were:
* 2005--338 robberies; * 2006--434; * 2007--349; and * 2008--274 (through Nov. 19).
“Robbery is something a credit union has to be aware of all year long,” Wagner said. “Awareness is the most important factor. Credit unions need to train employees on what to do before, during and after a robbery. Credit unions should have annual training, at a minimum, and then frequent updates and reminders on how to deal with robberies.” Deterrence is also important. For instance, having a sign on the credit union door that reads “No hats, no sunglasses, no hoods” can help deter robberies, Wagner said. Other deterrents include greeting people as they enter the credit union and having queue lines--which can result in more control of the situation if a robber has to stand in line for awhile, he added. Also, going over robbery policies and procedures with tellers and other personnel helps. “For instance telling employees to lock the door after the robber leaves, so he or she doesn’t come back into the credit union,” Wagner explained. “You need to regain control of the situation as soon as you can after a robbery.” Another factor is checking the placement of security cameras so that different angles for pictures of robbers can be viewed to better identify them, Wagner added. The FBI released its most recent crime statistics on Oct. 17, indicating that for the first quarter of 2008, there was a minor increase in financial institution robberies with 1,604 total robberies nationwide--34 more robberies than occurred during the last quarter of 2007. In the first quarter, there were 132 robberies of credit unions, nine burglaries, and zero larcenies, according to FBI statistics. Overall, most violations at financial institutions occurred on Friday, the FBI said. Regardless of the day of the week, violations between 9 a.m. and 11 a.m. were the most common. The fewest incidents took place on Sunday.

IDow JonesI CUs out front in aid to homeowners

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NEW YORK (11/21/08)--Credit unions have been out in front of the curve, being aggressive in helping troubled homeowners for the past several months, while the bigger lenders have just increased their efforts in recent weeks, according to a Thursday Dow Jones article. Since last winter, credit unions have been changing their terms on home loans in states that have been most impacted by the mortgage crisis, the Dow Jones said. The National Credit Union Administration (NCUA) this week proposed making more cash available to homeowners in need, the article reported. NCUA’s proposal would benefit everyone, Bucky Sebastian, president, GTE FCU, Tampa, Fla., told the news service. Although not a complete solution, the proposal would result in people staying in their homes, and credit unions not having to repossess them, he added. Ent FCU, Colorado Springs, Colo., is helping members who have committed to staying in their homes by modifying their loans--usually for two years, Casey Perkins, Ent director of collections, told Dow Jones. The credit union keeps track of the loans and plans to re-evaluate them after two years, Perkins added. Ent has restructured about 150 home loans with $14.6 million in mortgages, he said. Credit unions have the cash necessary to modify home loans, because they have made very few subprime loans to risky borrowers, Bill Hampel, chief economist for the Credit Union National Association, told Dow Jones. Credit unions also are motivated to help because they are being impacted by some of the “collateral damage” caused by declining home prices, and by members losing jobs or falling behind on their loan payments provided by other lenders, Hampel added. “It helps the borrower, but the losses of foreclosing on a mortgage are big, and it’s in the interest of the credit union to help,” Hampel said.

CU-sponsored home makeover show airs on ABC

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DUBLIN, Ohio (11/21/08)--Directions CU, Sylvania, Ohio, was the lead sponsor for a project to give a Toledo family a new home on Sunday’s episode of “Extreme Makeover: Home Edition,” which aired on ABC. Parents Aaron and Jackie Frisch had three children, and adopted five Haitian boys and three boys from inner city Toledo out of their passion to help others. Two years ago, Jackie was diagnosed with a connective tissue disorder that caused her to undergo five surgeries, three strokes and partial paralysis, which she overcame, said the Ohio Credit Union League (eLumination Newsletter Nov. 19). Jackie quit her job as a counselor because of her health, and she and Aaron were unable to keep up with repairs on the family’s home. Aaron works as a firefighter. Directions CU provided hats for volunteers working on the Frischs’ new home. It also sold hats at the job site and other events, and donated the proceeds to the family. Directions also collected donations from the community and held a fundraiser for the family.

Robbery suspect in CU holdup commits suicide

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YOUNGSTOWN, Ohio (11/21/08)--A robbery suspect died from a self-inflicted gunshot wound during a standoff four hours after a Lordstown, Ohio, credit union was held up Wednesday. The suspect, Donnell R. Weekley, 25, allegedly was one of three men who entered Cavalier FCU at about 2:40 p.m. (NewsNet5.com Nov. 20). One man was armed with a rifle and fired a shot. No one at the credit union was injured. Police said the suspects fled to a house on Breaden Street. Weekley shot himself about four hours later after a Federal Bureau of Investigation violent crimes task force surrounded the house (Vindy.com Nov. 20). The U.S. Marshals Service had been looking for Weekley for two days, with a warrant for felonious assault unrelated to the robbery, police said.

California CUs report update on wildfire impact

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RANCHO CUCAMONGA, Calif. (11/21/08)--Several California credit unions reported to the California Credit Union League that members lost their homes in recent wildfires. The fires affected Los Angeles, Orange, Santa Barbara and Riverside counties. Tens of thousands of California residents were forced to evacuate their homes (News Now Nov. 18). Kinecta FCU, Manhattan Beach, told the league that one member lost a home in a fire that hit the Montecito/Santa Barbara area. The credit union is working with the member, Tina Ramos-Ingold, California league public affairs coordinator, told News Now. SchoolsFirst FCU, Santa Ana, said it heard from two members who lost homes. The credit union is working with the members individually. SchoolsFirst also placed information on its website to let members know that assistance is available, Ramos-Ingold said. Wescom CU, Pasadena, is offering members emergency fire loan assistance. The personal, unsecured loan is available up to $5,000 with no payment due for 90 days. The loan has a fixed interest rate of 8.90% with interest waived the first 90 days. The maximum term is 60 months, the credit union said on its website.

Michigan CUs use grant to stop foreclosures

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WASHINGTON (11/21/08)--The Michigan Credit Union League (MCUL) is leveraging a $43,828 Innovation Grant from the National Credit Union Foundation (NCUF) into a multi-media foreclosure prevention campaign. Michigan has the third-highest foreclosure rate in the U.S. “Michigan's economy faces a unique combination of challenges due to auto employee layoffs, high unemployment, and rapidly decreasing housing values,” said MCUL President Dave Adams. “Many residents in danger of foreclosure hold subprime mortgages with little or no equity and high interest rates,” he added. “Because they have not built significant savings and assets, low-wealth families are struggling to pay their mortgages and retain their homes.” Beth Troost was hired in February as the league’s first financial education coordinator. Many credit unions are responding to this crisis by providing financial education seminars and individual counseling, she said. But Troost pointed out that “credit unions are frustrated with the small numbers of people they are reaching. While the foreclosure problem is predicted to affect an abnormally large portion of the population for the next three to five years, the number of consumers reached by seminars and counseling is comparatively low.” She offered several reasons: “Many people experiencing challenges that affect their mortgage payments may wish to remain anonymous and are unwilling to attend public seminars. Other reasons for low attendance may be time conflicts, location challenges, and lack of awareness.” Unfortunately, Troost said, there is an “abundance of misleading and fraudulent foreclosure avoidance information” circulated by for-profit interests in many communities. “Community members need a convenient avenue to get trustworthy information and resources to enable them to improve their financial situation and avoid foreclosure,” she added. MCUL will partner with credit unions, Michigan State University (MSU) Extension, and United Way to produce and distribute an educational video, 8,000 DVDs, and online resources to reach more Michigan homeowners. The video will focus on:
* Understanding why consumers struggle to make housing payments; * Implementing money management techniques--such as keeping track of spending, creating spending plans, and prioritizing debt; * Retaining homeownership if current payments cannot be made (by modifying loans, attending housing counseling, and/or applying for reverse mortgages); and * Relinquishing homeownership if necessary but without foreclosing.
“More credit unions than ever are investing in the Community Investment Fund,” said NCUF Executive Director Steve Delfin. “Yet here's the paradox--even though CIF balances reached an all-time high, the fund has returned a much lower percentage of grant dollars in 2008. This is due to federal interest rate cuts from January through October. “So especially during these challenging economic times, we thank all 650-plus CIF investors, the NCUF Board and Grants Committee for allowing us to maintain our $600,000 in Innovation Grant commitments and reward credit unions serving low-wealth households,” he added.

Holiday spending survey to be released Monday

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WASHINGTON (11/21/08)--The ninth annual consumer survey on holiday spending plans and concerns about debt levels will be released Monday by the Consumer Federation of America (CFA) and the Credit Union National Association (CUNA). CFA Executive Director Stephen Brobeck and CUNA Chief Economist Bill Hampel will meet with the media at 10 a.m. EST Monday at the National Press Club to release the data from the survey, which was conducted Nov. 6-8. This year's data will show that a record number of survey respondents anticipate spending cutbacks. For the first time, the survey asks those who expressed their intent to spend less why they plan to do so. Overall, the survey results provide fresh findings on consumer attitudes toward debt and their holiday spending plans. CFA and CUNA representatives will discuss their complete survey findings, including:
* The latest look at consumers’ holiday spending plans; * Consumer concern about credit cards and paying off the full monthly balance; * How the findings compare with consumer attitudes at this time last year; * How consumer attitudes have changed over the past nine years; and * New advice for managing holiday spending.

CU System briefs (11/20/2008)

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* MONTEREY PARK, Calif. (11/21/08)--E1 Financial CU, at the invitation of California Gov. Arnold Schwarzenegger's office, attended the Governor's Conference of Small Business and Entrepreneurship Tuesday, according to the $369.8 million asset credit union. The conference assembled innovative entrepreneurs and small businesses to create a forum for ideas, inspiration and solutions to drive the state's critical entrepreneurial economy forward. Afterwards, the credit union met with the governor's staff to discuss the financial needs of the small businesses and entrepreneurs, and to present economic opportunities and solutions offered by the credit union industry. Pictured speaking at the conference is Schwarzenegger. (Photo provided by E1 Financial CU) … * MONTEREY PARK, Calif. (11/21/08)--During the California Governor's
Click to view larger image
Conference of Small Business and Entrepreneurship Tuesday, E1 Financial CU met with the Latin Business Association (LBA), the sponsor of the luncheon at the conference. E1 Financial met with the LBA Chairman/CEO Ruben Guerra and LBA members to explore a future partnership to support small businesses. From left are: front row: Larissa Ordaz, operations manager, LBA; Chris Lamb, executive vice president/chief operations officers at E1 Financial CU; Guerra; Araceli Gonzalez, deputy director, community liaison, Office of Governor Arnold Schwarzenegger; and L.J. Tarman, vice president, marketing at E1 Financial; back row, third from left, is Dennis Gutierrez, community relations liaison at E1 Financial (Photo provided by E1 Financial CU) … * COLUMBUS, Ohio (11/21/08)--The Ohio Credit Union League has added Twitter.com as another way to share credit unions' work with media and consumers. Twitter.com is an information-sharing website in which participants can follow one another with brief (not more than 140 characters) news items and updates called "tweets." Patrick Harris, league media relations director, created a profile for Ohio's credit unions and will post the items on Twitter (eLumination Newsletter Nov. 19) ... * COUNCIL BLUFFS, Iowa (11/21/08)--A man eating a sandwich robbed United CU in Council Bluffs Tuesday. Police said he walked in and demanded money from a teller. He took an undetermined amount before fleeing. Witnesses said he appeared to be eating a sandwich during the incident (Omaha World-Herald Nov. 20) … * ARTESIA, N.M. (11/21/08)--Services were held Thursday in Artesia, N.M., for Warren T. Johnston, the founder of Artesia CU. Johnston, 87, died Monday in Artesia. A former public school teacher, he was one of a group of teachers who formed what was then called Artesia School Employees CU in 1955. Johnston was treasurer/manager of the credit union. His wife Shirleen worked with him, and his son Ronnie took over the credit union in 1991. Johnston remained a credit union advocate all his life and was the recipient of the Mel Romero Outstanding Professional Award from the Credit Union Association of New Mexico. The family suggests memorial contributions be made to the New Mexico Credit Union Education Foundation …

CO-OP ready for holiday shared-branch rush

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ATLANTA (11/21/08)--CO-OP Shared Branching is ready to handle the holiday shared branching rush, the network said. In 2006 and 2007, CO-OP saw December transactions increase by about 180,000 each year over the January to November monthly averages. Average monthly transactions year-to-date have risen by 161,000 and 232,000 compared with similar timeframes in 2006 and 2007. The increase is due to trouble in the economy and consumers’ awareness and trust in credit unions, said CO-OP Shared Branching President/Chief Operating Officer Carroll Beach. Members can prepare for holiday traveling by downloading all CO-OP ATMs and shared-branching locations to their global positioning system devices. They also can locate access points by phone, Internet or text. Credit Union Service Corp. and CO-OP Financial Services combined to form CO-OP Shared Branching, which provides 28,000 surcharge-free ATMs to participating credit union members.

Research sheds light on Hispanic market

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NEW YORK (11/20/08)--A study from Experian Consumer Research is shedding more light on Hispanics' attitudes and behaviors about finances. Credit unions with outreach programs to that market might need to ensure they're on top of the trends. The Hispanic market is increasing in importance to credit unions and others because a growing population can influence the success of products and services. Total adult Hispanic population has grown by 20% the past four years, with younger and older segments growing even faster, according to the study. Much has been made of Hispanics' traditional distrust of financial institutions. However, Hispanic consumers surveyed said they feel more financially secure than in the past. Among the findings:
* Hispanics are using credit cards more. More than 25% of the Hispanic population reports using a credit card one to five times in the past 30 days, an increase from the last survey in 2004, says Experian. All levels of credit card use are up slightly from 2004. This suggests the population is either more comfortable carrying debt than in the past, or Hispanics see the importance of establishing credit, Experian said. * Their self-reported lack of knowledge about financial matters has increased. It could be that financial literacy education and other outreach efforts by institutions such as credit unions may make them more aware of what they don't know. * Compared with the average U.S. adult, Hispanic adults are more likely to shop frequently and buy in the spur of the moment. Hispanic consumers are more likely than the average U.S. shopper to pay higher prices for environmentally responsible products and are less likely to plan ahead for large purchases. Name brands are more important to Hispanics than they were four years ago. * The percent of Hispanics who say they don't like being in debt has decreased slightly the past four years. At the same time, Hispanics are now less likely to pay cash for their purchases. Experian says these decrease may help explain the increase in credit card usage.
The study is part of research that tracks Hispanic consumers' spending and buying behaviors, compared with the overall U.S. population.

Conserve capital compete for deposits

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NEEDHAM, Mass. (11/20/08)--The continuing uncertainty in the global economy and financial markets will force consumer financial institutions to sharpen their focus on conserving capital and competing for deposits in the coming year, says TowerGroup. Credit liquidity will be a pervasive issue for financial institutions across all geographies, and economic growth in every region will be severely impacted, said new research from the Needham, Mass.-based firm. TowerGroup predicts that developed markets in North America and Europe will suffer more than the emerging markets in Latin America, Africa and Asia. In 2009, capital conservation will become critically important for financial institutions, said the firm. With credit likely to be tight throughout the year, financial institutions must determine how to lend funds to consumers profitably and allocate capital adequately given the global curtailment of securitization. To improve risk management protocols and address lending operations' efficiency issues, financial institutions likely will implement improved analytics, business intelligence and performance-management solutions, said TowerGroup. "The interdependencies among financial institutions will impact consumer banks in every region of the world as capital adequacy and liquidity concerns continue to permeate the global financial system," said Kathleen Khirallah, managing director and practice leader of banking research and advisory service at TowerGroup. "With the strongest of banks under pressure to maintain earnings, growth will stagnate, banking consolidation will increase and discretionary information technology (IT) spending will decline," she said adding that institutions "will be forced to do more with less." The research's key points include:
* The pace of banking consolidation will accelerate throughout the first half of 2009, as distressed banks seek to be acquired and regulators close banks they consider too weak to survive. * For most retail banks, the most pressing outcome of the reduction in economic growth will be the necessity to reduce discretionary spending. Aside from pressure to cut personnel costs, consumer bankers will face significant reduction of their discretionary IT budgets in 2009. * The current environment will cause banks to divert IT resources from other projects to support loss mitigation. To curtail losses, consumer banks will upgrade collection and foreclosure software and use analytical software to detect potential problems in loans before they enter delinquency status.

Federation CDFI coalition request 1 billion from TARP

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WASHINGTON (11/20/08)--The National Federation of Community Development Credit Unions and the Community Development Financial Institutions (CDFI) Coalition have urged the federal government to set aside $1 billion of its $750 billion rescue plan for capital infusions to CDFIs, including community development credit unions (CDCUs). They said the $1 billion from the Emergency Economic Recovery Act would support increased lending and investment in low- and moderate-income communities. The request came in the form of a letter from the coalition's board of directors to Neel Kashkari, assistant secretary for financial stability at the Treasury Department's Office of Financial Stability, and Donna Gambrell, director of the department's CDFI Fund. They are two key officials responsible for administering the Troubled Assets Relief Program (TARP). The CDFI Coalition represents financial institutions whose mission is serving underserved communities and people of modest means. "Congress has expressed its concern that little of the first wave of TARP investments in banks seems to be finding its way to the communities and families most in need," said Cliff Rosenthal, federation president/CEO. "We in the CDFI movement believe that our institutions are uniquely positioned to aid some of the hardest-hit communities around America, and that moreover, we can leverage any federal funding many times over," he said. Rosenthal said the coalition is "pleased that a number of community development banks have now gained access to the TARP program" and added that the coalition's directors "want to ensure that CDCUs and other CDFIs also gain access to this important source of capital."

Connecticut governor CUs launch student loan program

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MERIDEN, Conn. (11/20/08)--Connecticut’s governor and the state’s credit unions will work together to provide new and current students with access to higher education through a new student loan program. The Credit Union League of Connecticut and officials from Connecticut’s credit unions met with Gov. M. Jodi Rell Tuesday to discuss the state’s economic situation and to propose the new partnership between the state and the credit unions. Credit union officials pledged support of the governor’s concept and estimated that up to $17.5 million could be committed to the program. The program would offer interest rates at no higher than 6% or 5.75%. Institutions offering 6% loans could defer interest payments for one year; credit unions offering 5.75% loans would not defer interest payments. The loans would be offered to students who may not qualify for traditional loans or who already have used all of their resources and are having a hard time funding tuition. In light of taking on this risk, Rell said the Connecticut Health and Education Facilities Authority (CHEFA) would provide 20% loan guarantees on the loans. “I view the new credit union student loan program as another tool, a bridge loan if you will, to help families and students through the next few years of a weakened economy and very difficult strains on household budgets,” said Tony Emerson, league president/CEO. “All of us know we will come out of this current fiscal downturn, but there will be some hard times before we do,” he added. “The best way our state can position itself for this economic future is to continue to invest in an educated and diverse work force. Our credit unions understand this and have stepped forward, in partnership with the state, to help us accomplish this goal. “Credit unions remain healthy in the current economy due to key differences in our structure,” and have money to lend, Emerson said. The league will administer the student loan program with CHEFA. The program will be open to all students that live or go to school in Connecticut. The funds will not be pooled, and individual credit unions will allocate their own funds. Credit unions must allocate a minimum of $100,000 of their funds to participate in the loan program, which will run for one year with the possibility of extending that period, based on demand and available resources. The program is expected to officially begin Dec 8. For a list of participating credit unions, use the league link.

Consolidation is reshaping online banking market

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SAN FRANCISCO (11/20/08)--Consolidation is rapidly reshaping the online banking market, according to an annual Online Banking and Bill Payment Report by Javelin Strategy & Research (BusinessWire Nov. 18). As a result of recent acquisitions, three large banks--Bank of America, Wells Fargo and JPMorgan Chase--will control 39% of the online-banking market, up from 25%. Javelin, a provider of research on financial services, forecasts that the growth rate for online banking adoption will increase 4.6% annually through 2013, and when 83 million households will be banking online. However, the survey indicates that bank bill-payment services--which are at 49% penetration--are the pivotal opportunity for credit unions and other financial institutions to expand their online services. The survey predicts online services will grow 5.6% annually through 2013 and reach 45 million households. In addition to the finding about consolidation, key findings and recommendations of the Javelin report are:
* Market winners will design and promote online banking based on member-driven architecture. Benefits include a return-on-investment in terms of increased loyalty, reduced costs, fee income, cross-selling opportunities and fraud-prevention savings; * To gain share from third-party billers, financial institutions should upgrade bill-viewing and bill-payment platforms to make the online experience seamless for consumers. Online banking user experiences are key to preparing for a mobile future; and * Promoting electronic statements and making it easy to eliminate paper statements will save money and reduce fraud.

Redwood CU CEO named California league chairman

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RANCHO CUCAMONGA, Calif. (11/20/08)--Brett Martinez, president/CEO of Redwood CU, Santa Rosa, Calif., was named California Credit Union League board chairman during the league’s annual meeting in San Francisco. Jeff York, president/CEO, CoastHills FCU, Lompoc, was elected first vice chairman. Eileen Rivera, president/CEO, FAA First Federal CU, Hawthorne, was named second vice chairman. Members of the executive committee include: Darren Williams, president/CEO, Wescom CU, Pasadena, and Teresa Halleck, president/CEO, The Golden 1 CU, Sacramento. Immediate Past Chairman Lynn Athens, president/CEO, Spectrum FCU, San Francisco, will serve as an ex officio member of the committee. Martinez served as a senior executive for the California league and Arrowhead CU in San Bernardino, Calif.

Municipal deposits measure introduced in N.J.

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TRENTON, N.J. (11/20/08)--A measure to allow New Jersey credit unions to accept municipal deposits was introduced in the state Senate last week. It would allow credit unions in the state to become eligible depositories for public entities such as county and municipal governments and school boards. The bill was introduced by Majority Leader Steve Sweeney (D-3) and in the Assembly by Housing and Local Government Affairs Committee member Fred Scalera (D-36) and Assemblyman Doug Fisher (D-3). The legislation repeals a provision of New Jersey's Government Unit Depository Protection Act, which, since its enactment in 1970, specifically precluded local government entities from using credit unions for their banking needs. The legislation also amends the state credit union act to enable state-chartered credit unions to accept municipal deposits, affording them parity with federally chartered credit unions in the area. “We believe allowing credit unions to get involved in municipal deposits will create more competition and ultimately be good for the taxpayers of New Jersey,” Paul Gentile, president/CEO of the New Jersey Credit Union League, told News Now. “Approximately a third of states allow credit unions to accept municipal deposits. With more than 500 municipalities in New Jersey, we believe it's key that credit unions here are allowed to compete.” Having the Senate majority leader sponsor the bill is a positive development, Gentile said. “Many states allow credit unions to compete for public deposits and afford taxpayers the numerous benefits of doing business with democratically controlled, not-for-profit, financial cooperatives,” Gentile said. “Including New Jersey among those is the league's No. 1 state legislative priority.” The cash infusion from public deposits will allow credit unions to make more loans available to their members and needy small businesses, Sweeney told The Gloucester County Times Wednesday. Because credit unions tend to be locally focused and lend to their members, they don’t send money out of state or abroad, Sweeney told the newspaper. The majority of credit unions’ loans are made locally because that’s where their members live, Sweeney added.

Greater Nevada CU CEO is new Nevada league chairman

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RANCHO CUCAMONGA, Calif. (11/20/08)--Wally Murray, president/CEO of Greater Nevada CU, Carson City, was elected the Nevada Credit Union
The 2009 Nevada Credit Union League board of directors are, from left: Cumorah CU CEO Tony Mook; Moapa Valley FCU CEO Doug Schwartz, league treasurer; Silver State Schools Executive Vice President Carol Gibson, league secretary; Greater Nevada CU CEO Wallace Murray, league chairman; Great Basin FCU CEO Dennis Flannigan, league vice chairman; Frontier Financial CU CEO Bruce A. Rodela; and WestStar CU CEO Dan Paulson, immediate past chairman. (Photo provided by the Nevada Credit Union League)
League board chairman during the league's recent Annual Meeting and Convention in San Francisco. Other officers of the board are:
* Vice Chairman Dennis Flannigan, president/CEO of Great Basin FCU, Reno; * Treasurer Doug Schwartz, president/CEO of Moapa Valley FCU, Overton; and * Secretary Carol Gibson, executive vice president of Silver State Schools CU; Las Vegas.
Also on the board are: Tony Mook, president/CEO of Cumorah CU, Las Vegas; Dan Paulson, president/CEO of WestStar CU, Las Vegas, and immediate past league board chairman; and Bruce Rodela, president/CEO of Frontier Financial CU, Reno.

Illinois CUs collection agencies having busy year

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NAPERVILLE, Ill. (11/20/08)--Business at Illinois collection agencies is up, and so is attendance at the Illinois Credit Union League (ICUL) Service Corp. (LSC) collectors roundtable events.
Attendance at this year’s Illinois Credit Union League Service Corp. collection roundtables such as this one has spiked as business at Illinois collection agencies has increased. (Photo provided by the Illinois Credit Union League)
Creditors Resource Service, an agency that works for 200 Illinois credit unions, reported a 15% increase in business compared with last year. The firm is “very busy,” Sheila O’Leary, head of collections, told Crain’s Chicago Business (Nov. 17). Tough economic times positively impact collection agencies because institutions are seeking “every uncollected penny” to benefit their returns, Karolyn Rubin, vice president, Bonded Collection Corp., told the newspaper. The ICUL Service Corp. has provided help to collection agencies for nine years. This year, LSC has seen more than 60 attendees at upstate and downstate roundtable events. The number of topics addressed at the meetings also has increased. “It’s the sign of the times,” said O’Leary. “With issues from short sales, to identity theft, to foreclosure, to red flag--you name it, they’re being discussed.” The LSC also maintains an active listserv for collectors to network and seek advice on issues. About 150 individuals representing 100 credit unions are on the listserv. “It’s been great to share information, learn that we all are facing some of the same challenges and put our heads together to see how credit unions can handle [challenges],” said Claudia Stiltner, collections manager, Meadows CU, Arlington Heights, Ill.

Illinois CDCU granted 232000 from CDFI Fund

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NAPERVILLE, Ill. (11/20/08)--North Side Community FCU (NSCFCU) was recently presented with a $232,000 grant from the Community Development Financial Institutions Fund (CDFI) during a visit to the credit union by CDFI Fund Director Donna Gambrell.
Click to view larger imageDonna Gambrell (seated in center holding check), director of the Community Development Financial Institution Fund (CDFI), is joined by Jim Masini, board chair (seated left), and Ed Jacob, CEO (seated right), both of North Side Community FCU, and credit union members, staff and supporters as Gambrell presents the credit union with a CDFI Fund grant of $232,000. (Photo provided by the Illinois Credit Union League)
The grant will be used to support the expansion of the credit union’s New Americans Loan Program and mortgage lending programs. A portion of the funds will upgrade its technology and add online banking for its members. “With her new position as head of the Office of Homeownership Preservation, Gambrell was able to hear firsthand how North Side's Housing and Urban Development-certified housing counseling program has been able to help keep people in their homes,” said Ed Jacob, CEO, NSCFCU. “With the contraction in the credit markets, CDFIs such as North Side Community FCU will be in greater demand by low-income individuals and businesses as a source of capital for borrowers to finance investments in distressed communities,” Gambrell said. “The CDFI Fund’s award to North Side will increase its resources to carry out this important lending responsibility.” The CDFI Fund was created to promote economic revitalization and community development through investment in and assistance to CDFIs. The CDFI Fund is a part of the U.S. Department of the Treasury. NSCFCU is a $7 million CDFI.

CU System briefs (11/19/2008)

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* SAN DIEGO (11/20/08)--Point Loma CU (PLCU), based in San Diego, hosted Jose Eduardo Alvarado Campos, CEO of COOPENAE CU, Costa Rica's largest credit union. Campos' visit, to learn about American credit unions and discuss issues affecting credit unions around the world, was sponsored by the World Council of Credit Unions. Ted Dennis, president/CEO at PLCU, said COOPENAE has products and services similar to those offered PLCU, including insurance. Alvarado, in a demonstration of international cooperation and access, used his COOPENAE debit card at a PLCU ATM without a transaction fee. Campos, left, watches as PLCU staff members demonstrate PLCU procedures. (Photo provided by Point Loma CU) * WICHITA FALLS, Texas (11/20/08)--A former manager of a defunct credit union has been charged with embezzlement from the $1.9 million asset Texdot Wichita Falls CU. Joanna Lynn McGee, 39, is charged with embezzling between $850,000 and $1.9 million from the credit union between 1999 and May 2008 by creating 129 fictitious loans and using them to generate money that was later embezzled or to cover up the embezzlements. The credit union was placed into conservatorship on Sept. 30 and is being operated by Postel Family CU (Times Record News Nov. 18) … * SACRAMENTO (11/20/08)--Michael Edward Osgood, dubbed the 'Straw hat bandit,' was sentenced to three years and 10 months in prison and three years of supervised release for a series of bank robberies in the Sacramento area, according to the Federal Bureau of Investigation's Sacramento field office. Osgood, 47, wore a large brim straw hat during the heists, which included a robbery at Sterlent CU on May 12. He pleaded guilty to that robbery and four additional robberies of banks in the area. He has paid full restitution to seven institutions for the robberies (US Fed News Nov. 17) … * DUBUQUE, Iowa (11/20/08)--Several DuTrac Community CU staff members took a plunge into the Mississippi River and raised $2,000 for the Iowa Special Olympics Saturday. This year's Polar Plunge--the coldest in recent memory--raised more than $15,000, a record. Temperatures for the day, which had snow flurries, were: Water temperature, 42 degrees; air, 34 degrees; and wind child, 22 degrees. Employees participating were Michelle Ariss, Laura Johnson, Jennifer Henson, Patti Butler, Andrea Jaeger, Tye Miller and Kathy Klostermann. (Photo provided by DuTrac Community CU) … * ABERDEEN, Md. 11/20/08)--Aberdeen Proving Ground FCU has partnered with Halls Cross Road Elementary School in Aberdeen, Md., with an official launch scheduled for Friday as part of American Education Week. APGFCU will make financial education presentations in classrooms for every grade level, host free money management seminars on weekends for parents and community members, and provide recognition and reward incentives for student and school achievement. APGFCU already has partnered with five other elementary schools in Harford County … * DALLAS (11/20/08)--Tim Johnson, senior vice president of strategic planning at TwinStar CU in Olympia, Wash., has been appointed to the board of directors of Southwest Corporate FCU, the corporate announced. He will serve the unexpired term of Arno Easterly, who retired earlier this year as CEO of Barksdale FCU, Bossier City, La. Johnson, who has more than three decades of credit union industry experience, is a former CEO of Pacific Crest FCU, Klamath Falls, Ore., and Denali Alaska FCU, Anchorage. He has been a member of Southwest Corporate's Supervisory Committee since December 2007. Prior to the merger between Northwest Corporate and Southwest Corporate, Johnson served on Northwest's Supervisory Committee …

Wildfires affect CUs transaction volume

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PASADENA, Calif. (11/19/08)--The California wildfires this past weekend affected transaction volume at some of Wescom CU’s branches, the credit union said. Susan McCready, Wescom senior vice president of branch services, told News Now that she talked with several branches who reported that business was “much slower than usual.” “It was a frightening day because of all the fires,” she said. Wescom, which is based in Pasadena, closed its Anaheim Hills branch at 1:45 p.m. on Saturday because of smoke. The credit union handed out masks to its members--a gesture they appreciated, McCready said. Members who came into the branches didn’t appear to be panicked, she added. The fires affected California residents in Santa Barbara, Los Angeles, Orange and Riverside counties. The Orange County Fire Authority lifted the final evacuation order Tuesday for the Chino Hills area. The firefight is over, the California Department of Forestry and Fire Protection told The Los Angeles Times (Nov. 18). Calif. Gov. Arnold Schwarzenegger declared a state of emergency during the fires and the California Department of Financial Institutions also ordered its institutions including credit unions to help consumers affected by the fires (News Now Nov. 17). Some Wescom employees evacuated their homes because of the fires, but have since returned. “We are very happy that none of our employee’s homes burned,” McCready said. Wescom had asked its employees to notify the credit union if they had suffered a loss. “Some employees who evacuated didn’t get back into their homes until [Monday],” McCready said. So far, two members have contacted Wescom about losses due to the fires. One came into the branch to talk to the credit union, and another contacted the credit union through its call center. Wescom also will offer emergency fire loan assistance to members who suffered losses in the fire. Wescom has $3.69 billion in assets.

Promo results in 40 hike in new cardholders

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FARMERS BRANCH, Texas (11/19/08)--East Texas Professional CU's summer promotion for its card products "really rocked." It brought in more than 500 new cardholders in July and August through its in-branch promotion. The Mastercard "Roots of Rock" consumer card in-branch promotion was designed by TNB, and a number of credit unions participated, said the Texas Credit Union League (LoneStar Leaguer Nov. 18). The $334 million asset credit union, based in Longview, saw a 40% increase in the number of new cardholders compared with an in-branch promotion it offered last year, Chris Graham, card services administrator, told the league. The credit union used TNB's kit, which contained flashing guitar magnetic lapel buttons, window clings, tent cards, posters, and member giveaways. TNB also offered card information and training to ensure employees were comfortable marketing the card products. An employee sweepstakes offered every employee a chance to win prizes such as MP3 players, T-shirts and music downloads. The grand prize was a $1,000 Mastercard gift card. East Texas Professional CU also provided rewards to two employees each week during the promotion. The credit union decorated its seven branches with vintage rock music posters and inflatable guitars. Members were treated to rock-themed events each Friday, in which they received "Roots of Rock" simulated tattoos, root beer served in themed cups and popcorn bags carrying the Roots of Rock logo. The events were used to solicit members to apply for the credit union's credit card and encourage existing cardholders to use their card for a chance to win a trip to meet Jon Bon Jovi, Eric Clapton or Kenney Chesney at a concert. The consumer promotion was sponsored by Mastercard. Ruth Holden, senior vice president and loan officer for the credit union, won the grand prize. She had 62 entries in the contest, representing the number of approved card applications she generated during the promotion.

Collaboration assists CUs quick relocation

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PITTSBURG, Calif. (11/19/08)--Collaboration between two California credit unions helped one that was forced to relocate on short notice. Pittsburg (Calif.) Employees FCU (PEFCU) was given 90 days to relocate before its 1,250-square-foot facility was razed to make way for a new city complex. Faced with the task of finding a new location and moving by the end of April, Sophia Kern, CEO of the $8 million asset PEFCU, turned to industry peers for help. Kern had connections with the local credit union community as a result of spending eight years with Concord Diablo CU and nine years with Metro 1 CU--both located in Concord, Calif. At a local chapter meeting, Tina Fields-Dillow, CEO of the $200 million-asset Metro 1, offered to mentor Kern through the processes of funding, leasing, designing and coordinating PEFCU’s move into a new facility. After receiving several unsolicited merger offers from credit union of all sizes, Kern accepted Fields-Dillow’s offer. “I liked the way [Fields-Dillow] offered to mentor me,” Kern said. “Sometimes it is all about the approach, offering help without strings attached. A few other credit unions offered help, but when it came to crunch time, I called her first and she was there.” Kern needed to determine the credit union’s space needs, size, location and affordability. A location was found directly across a freeway from its original sight. Together, Kern and Fields-Dillow analyzed the credit union’s balance sheet and operations, allowing Kern to recommend several operational changes to her seven-member board. The move took place the weekend of April 18-20. PEFCU was open for business in its new location April 21. “PEFCU would not have been able to make this move in less than 90 days if Tina Fields-Dillow had not stepped forward to assist us in the process,” Kern concluded.

INewsweekI CDCUs are ethical subprime lenders

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NEW YORK (11/19/08)--Community development credit unions (CDCUs) are "ethical subprime lenders" that can help refute the argument that subprime lending is to blame for the economy's problems, says this week's Newsweek (Nov. 24). The article notes that "even amid the worst housing crisis since the 1930s, many of these [community development] institutions sport healthy payback packages. They haven't bankrupted their customers or their shareholders. Nor have they rushed to Washington begging for bailouts." Cliff Rosenthal, CEO of the National Federation of Community Development Credit Unions, told Newsweek that the federation's 200 CDCU members, serving primarily low-income communities, have a delinquency rate of about 3.1% of assets, compared with the national delinquency rate on subprime loans of 18.7%. The article outlines as examples of lenders who "put into practice the types of bromides that financial-service companies like to use in their advertising" three credit unions and features interviews with their CEOs. Interviewed are: Linda Levy, CEO at Lower East Side People's FCU, New York; Rita Haynes, CEO at Faith Community United CU, Cleveland; and Ed Jacob, manager/CEO of Northside Community FCU, Chicago. For the full article, use the link.

CU CEO confidence at lowest mark says index

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PLANO, Texas (11/19/08)--Credit union CEOs' confidence took its greatest plunge in four years during the week after the presidential election, says a Southwest Corporate FCU survey. The corporate's Credit Union CEO Confidence Survey skidded 14.72 points since the last survey in third quarter, to 10.50--the lowest reading since the survey began four years ago. The drop followed a seven-point increase in CEO confidence during third quarter's survey, which occurred before the nation's financial and economic crisis picked up speed. In the November Special Edition survey, CEOs expressed pessimism across the board and registered the lowest marks in survey history for current conditions and conditions in six months for both credit union and member financial conditions categories. Expectations for credit union financial condition and member financial condition six months from now dropped 22 points. Anticipation for loan demand in six months dropped by more than 20 points to zero from the last survey. The confidence index measures CEOs' feelings on six key issues:
* Members' current financial condition; * Credit union's current financial condition; * Members' financial condition six months from now; * Credit union's financial condition six months from now; * Loan demand at the credit union in six months; and * Share deposit growth at the credit union in six months.
The corporate said that $49 million asset KBR Heritage FCU, Houston, which serves a single sponsor from one on-site location, has seen a flood of deposits from the financial market turmoil and from the sponsor company's belt-tightening. The credit union is concerned about possible overcapitalization. "Members have been bringing in funds from other institutions, because they see that credit unions have avoided many of the problems others are facing," Mary Hawk, KBR Heritage president, told the corporate. In the past two months, the credit union's share base increased $4.2 million, "but we're not making loans. I have 16% capital," Hawk, said. According to Brian Turner, Southwest Corporate's director of advisory services, most credit unions are watching net margins narrow, overhead expenses increase and net incomes slide, but he also noted credit unions have experienced some insulation. "Credit unions are in a much stronger position than their financial counterparts in terms of credit quality and capitalization," Turner said. "Most anticipate traditionally strong share growth first quarter 2009, yet are concerned about loan growth over the next few quarters. With the high cost of liquidity, more credit unions might have to rely on additional investment portfolio income to successfully traverse the first half of 2009," he said. Turner advised credit unions not to let recent financial crises cause them to avoid lending or investment activities. "Conventional fixed-rate real estate loans continue to demonstrate strong relative value without requiring a compromise in underwriting standards," he said. "Reasonable expectations for 2009 earnings should clearly be discussed with boards, taking into account the current environment but also recognizing that as the economy recovers in late 2009, confidence, outlook and earnings again will return." He said many institutions are waiting it see what happens in the months after President-elect Barack Obama's inauguration. "That will set the tone for how quickly recovery might begin," Turner added.

IMarketWatchI CUs no longer your fathers CU

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NEW YORK (11/19/08)--The manner in which credit unions have evolved over the years and the advantages they offer consumers compared with other financial institutions was the topic of a Monday MarketWatch column. The column, “Not Your Father’s Credit Union,” by Jennifer Openshaw, discusses a reader’s response to a previous column. In it, she listed advantages credit unions have over traditional banks--such as not-for profit status, self-funding, better rates and lower fees. She also mentioned that credit unions are insured up to $250,000 through the National Credit Union Share Insurance Fund (NCUSIF). Benson Porter, CEO of Addison FCU, Palo Alto, Calif., and former Washington Mutual executive, reinforced credit unions’ advantages Openshaw had mentioned in the previous column. Porter then listed ways credit unions are “breaking old molds and evolving faster than some may realize.” Regarding credit unions, Porter told Openshaw:
* Almost anyone can join, which is a departure from the past when most credit unions solely served select employee groups; * Members can access financial services anywhere. In the past, most credit unions operated only on or near employer facilities. Today, the bigger credit unions have branches; * High-yield checking accounts are offered by credit unions, with up to 4.5% interest on balances up to $25,000, with unlimited free checking; * Business banking services are available that offer businesses checking and credit card processing; and * Investment services, which are like to rapidly grow in the current economic environment, are offered.

Yes Live summit Dec. 3 in Tampa

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MADISON (11/19/08)--The Credit Union National Association's (CUNA) third annual YES Summit will “go live” Dec. 3-5 in Tampa, Fla. with its recurring focus on ways to better serve members of the diverse 18-to-30 year-old demographic group. As it did last year, the conference will reach out to include the entire credit union movement via the Internet. “YES stands for 'Your Essential Strategies'--the means by which credit unions can best explore and respond to the 18-to-30 market,” said Josh Jones, YES organizer and CUNA’s manager of young adult programs. “To encourage the widest possible conversation, we’ve tied the summit to a couple of other initiatives.”
* An online network--the YES CU Community. CUNA will maintain the network so credit union professionals can discuss 18-to-30 issues and strategies with their peers. The Yes CU Community is open to anyone associated with the credit union movement who wants to network with others about better serving young adults. To join the nearly 500 current community members, click on the resource link and follow the signup prompts. * An online discussion site--the YES CU Blog. CUNA will host the site to raise issues pertinent to 18-to-30 market strategizing. The blog is ongoing, but will rachet up during the summit. Christopher Morris, Web manager for CUNA Councils, and Philip Heckman, CUNA’s director of youth and young adult programs, will be on site at the summit to provide almost instantaneous coverage of YES sessions. Their live blog posts will provide the speakers' main points, and attendees' insights and reactions, to the credit union world as they happen.
This year’s YES Summit speaker lineup includes:
* Mark Schwanhausser of Javelin Strategy & Research, speaking on attitudes and behaviors; * Kim Crockett, manager, Common Wealth CU, on media and messages; * Sarah Shirley of Consumer Federation of America, on savings and credit in the military; * Rodney Hood, vice chairman of the National Credit Union Administration, on attracting and retaining young employees; and * Claudine Oriani of As If Productions, on developing human capital.

Kenyan CU officials visit Massachusetts CUs

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MARLBOROUGH, Mass. (11/19/08)--The Massachusetts Credit Union League hosted a study group of nine Kenyan credit union officials last week.
The Massachusetts Credit Union League hosted a study group of Kenyan credit union officials last week. The group visited four credit unions in Massachusetts during their visit. Pictured with the Kenyan delegation at Fitchburg (Mass.) FCU is Daniel Egan, league president (back row, fifth from right), and Barbara Goodwin, Fitchburg FCU president (front row, right end), with members of her staff. (Photo provided by the Massachusetts Credit Union League)
The group represented the Kenya Union of Savings & Credit Co-operatives (KUSCCO, the league) and three credit unions--the Nyeri Teachers SACCO, Kirinyaga Tea SACCO, and the Ufundi SACCO. In Kenya, credit unions are referred to as Savings and Credit Co-Operatives (SACCO). The group’s goal was to research best practices among credit unions in the U.S.--particularly in member education, technology and governance. The visit was organized by the World Council of Credit Unions. The Kenyan officials visited HarborOne CU’s Multi-Cultural Center in Brockton, RAH CU in Randolph, then Metro CU in Chelsea and Fitchburg FCU. The group members, which represented some of the largest credit unions in Kenya, indicated that they face many of the same challenges and opportunities that the credit unions they visited do. During the visit to Fitchburg CU, Carilus Ademba, managing director of KUSCCO, received a phone call from Nairobi informing him that a long-sought piece of credit union legislation had been passed by the Kenyan Parliament. The bill, among other things, creates a separate regulatory authority for credit unions in Kenya. League President Dan Egan congratulated the credit union colleagues on their legislative achievement. The subject of politics stayed on the table during the meeting when the visitors expressed their pride and pleasure that Barack Obama, who is of Kenyan descent, had been elected to serve as the next U.S. president.

EasCorp waives November service fees

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BURLINGTON, Mass. (11/19/08)--Eastern Corporate FCU (EasCorp) is waiving nearly all of its service fees this month during “November Free-for-All.” The corporate will not charge product and service users for automated clearinghouse and check processing, funds transfers and settlement services, security safekeeping or statement mailing services. The savings represents a $500,000 in value for EasCorp service users, the corporate said. EasCorp experienced strong earnings and capital beyond regulatory requirements, according to Jane Melchionda, president/CEO. The $1.5 billion corporate credit union serves more than 300 credit unions in the eastern U.S.

Florida paper For borrowing a CU is best choice

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SOUTH FLORIDA, Fla. (11/18/08)--Competition for the consumer dollar is heating up in the areas of checking, savings and borrowing, and credit unions are the best choice for borrowing, reports a Florida newspaper. "For borrowing, a credit union is often the best choice, especially for auto loans," says columnist Gregory Karp in the South Florida Sun Sentinel (Nov. 16). "Find out which credit unions you qualify for by asking your employer and family members who belong to a credit union," Karp urged. "Or go online to credit unions search sites," he said. Karp said the best deals on savings are at online banks. For checking accounts, he suggested consumers look at fees, interest, rewards and the cost of switching accounts.

California DFI urges FIs to assist L.A. fire victims

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SANTA BARBARA, Calif. (11/18/08)--The California Department of Financial Institutions has requested that the state’s financial institutions, including credit unions, help families recovering from wildfires that destroyed more than 800 homes in the Orange County area. Gov. Arnold Schwarzenegger declared a state of emergency in Santa Barbara, Los Angeles, Orange and Riverside counties. Tens of thousands of Californians were forced to evacuate their homes and major freeways have been shut down as the wildfires continue to burn (Sacramento Bee Nov. 14). American First CU, La Habra, is contacting its members in affected areas. The credit union also will offer its American First Aid Program to affected members, Tina Ramos-Ingold, California Credit Union League public affairs coordinator, told News Now. American First reported no damages to branches in the area. The California league is contacting credit unions potentially affected by the fires. The league did not receive damage reports or news of affected credit union members by press time Monday night. Wescom CU, Pasadena, told News Now that it closed its Anaheim Hills branch early on Saturday because of the fires. The branch has since re-opened.

CU System briefs (11/17/2008)

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* MERRITT ISLAND, Fla. (11/18/08)--Florida police have arrested a man who they say robbed a credit union, hid the money in his prosthetic leg, and used his motorized wheelchair as a "getaway vehicle." Christopher Warren Reed, 45, a paraplegic, was arrested Friday afternoon about 10 minutes after the Merritt Island branch of Space Coast CU, headquartered in Melbourne, was robbed. Police say he entered the credit union at about 4 p.m., claimed to have an explosive device and demanded money. He told police that two men threatened him and ordered him to commit the robbery. Police found the money inside his prosthetic leg. He has been charged with robbery, grand theft, threatening to use a hoax device and aggravated assault (Associated Press via wflxfox29.com and USA TODAY Nov. 17) … * NEWPORT NEWS, Va. (11/18/08)--A woman convicted of hiring a hit man to kill her Navy sailor husband was sentenced Friday to four life terms plus 20 years in a plea bargain that spared her the death penalty. Catherina Rose Voss, 33, pleaded guilty in July in the April 2007 murder of Cory Allen Voss, 30, who was shot to death at an ATM outside a branch of Langley FCU in Oyster Point. Her boyfriend, Michael Draven, 28, is scheduled for trail in March and faces a possible life in prison sentence. Prosecutors are seeking the death penalty for David A. Runyon, 37, of West Virginia, who is accused of being the triggerman in the plot (Daily Press Nov. 15) … * NORTHVILLE TOWNSHIP, Mich. (11/18/08)--Michigan Credit Union League President/CEO David Adams has been appointed to the Michigan Higher Education Assistance Authority (MHEAA), a body of the state Department of Treasury. Its 15 members are appointed by the governor with advice and consent from the Michigan State Senate. It consists of representatives from the state education and lending communities and the public at large. Adams will represent credit unions as lending institutions. His term will expire May 22, 2012 (Michigan Monitor Nov. 17) … * FORT WAYNE, Ind. (11/18/08)--Counterfeit cashier's checks bearing the name of Professional FCU are in circulation, the credit union reported to the Federal Deposit Insurance Corp. (FDIC). In a special alert, the FDIC said the counterfeit items display the $272.9 million asset, Fort Wayne, Ind. credit union's routing number and are similar to the credit unions authentic cashier's checks. The bogus checks display the words, "ORIGINAL DOCUMENT" embedded in the top border. Authentic checks display a telephone number below the name "PROFED" and the credit union's address in the top-left corner … * MICHIGAN CENTER, Mich. (11/18/08)--Members of Michigan Center-based Cascades Community FCU approved a proposed merger with Jackson, Mich.-based EECU--A Community Credit Union by a majority vote on Oct. 20, reports the Michigan Credit Union League (Michigan Monitor Nov. 17). The merger is pending approval from state and federal regulators. In the proposed merger, current EECU President/CEO Steve Cobb will retain his title in the new organization, which will keep the EECU--A Community Credit Union name. No branch closings or layoffs are planned. The credit unions hope to finalize the merger in January …

Debit rewards reimbursed surcharge top of consumer list

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MADISON, Wis. (11/18/08)--Credit unions and financial institutions that offer debit rewards and reimburse surcharges are more likely to attract consumers looking to open checking accounts, according to a survey by Aite Group LLC. Forty percent of survey respondents said they want debit cards to provide rewards when the cards are used for purchases. Also, 60% of respondents said they want their financial institutions to reimburse surcharge fees incurred when they use ATMs of competing financial institutions, said the report, “Checking Accounts: Who is Winning the Battle Online?” (ATM&Debit News Nov. 13). Aite, a Boston-based consulting firm, surveyed 19,000 people who visited findabetterbank.com--a financial-comparison website--between February and June. Ron Shevlin, report author and Aite senior analyst, grouped the site’s visitors into three categories:
* Those motivated by the monetary aspects of a checking account, including debit card rewards, ATM-fee rebates, interest on balances, unlimited check writing and free or discounted check printing; * Those that favor technology features; and * Those that cannot decide on a specific checking-account preference.
Despite the rise in the use of debit cards and the large number who wanted rewards, just 9% of visitors said rewards were a “must-have” feature. Rewards availability increased in the past year with 51% of 62 financial institutions surveyed offering debit rewards in 2007, compared with 37% in 2006, according to the 2008 Pulse Debit Issuer Study. Most debit-card rewards offered by the top 50 U.S. banks apply only to signature-debit transactions, according to a report by Mercator Advisory Group.

Reuters CUs step up loans as banks retreat

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NOVI, Mich. (11/18/08)--While many big banks are cutting back on their lending amidst a weak U.S. economy and a nationwide housing downturn, many credit unions are stepping up and offering loans to fill the void, reports Reuters. Generally, credit unions are smaller than commercial banks, with average U.S. assets in 2007 of $93 million, compared with $1.53 billion for banks, according to the Credit Union National Association (Reuters Nov. 16). Most banks in the Cleveland area have imposed a freeze on lending, which has resulted in more people turning to credit unions, Rita Haynes, CEO of the $10.5 million asset, Cleveland-based Faith Community CU, told Reuters. When Jim Greenshields, a laid-off engineer with Ford Motor Company, found a job this summer, he had been in default on his mortgage since late 2007. In August, he had to relinquish his home after his proposed repayment plan was rejected by his bank because he had been in default so long. Three months later, Community Financial Members CU, a $415.4 million asset, Plymouth, Mich.-based credit union, offered Greenhsields a car loan and a mortgage loan to buy back his former home from his old bank for $350,000. He paid $450,000 the first time. Although credit unions historically are not the first place people go for an auto loan, times are changing, Cliff Rosenthal, CEO of the National Federation of Community Development Credit Unions, told Reuters. While many credit union members are struggling with food and energy prices, credit unions’ individual approach is helpful to members experiencing financial difficulties, Reuters said. Faith Community tries to work out solutions for members with problems such as paying their mortgage, Haynes said, adding that the credit union does whatever it can to help members in its community.

Scammers take advantage of financial crisis holiday

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PEWAUKEE, Wis. (11/18/08)--Scammers are taking advantage of the financial crisis and may earmark the upcoming holidays by launching new attacks to steal personal information for possible fraud. According to the Wisconsin Credit Union League, consumers should be wary of e-mails or ads that ask them to update, validate or confirm account information (Wisconsin State Journal Nov. 14). Credit unions can help get the word out to their members about these claims. One claim says that a company recently acquired the recipient's mortgage and asks for an update of personal information, the league said. UW CU, Madison, Wis., warned its members about a "secret shopper" scam that sends recipients fake checks for consumer research and asks the recipients to deposit the checks and wire the money. Members can expect more scams to take advantage of the holidays, similar to one that occurred last Thanksgiving Day in Manitowoc County, Wis., said the league. That scam--timed to occur when financial institutions are closed--dialed 40,000 area residents and got 20,000 people to answer the phone. It claimed the recipients' bank account was frozen, provided a toll-free number to call to reinstate it and asked the recipients to verify their personal information. Other scams reported recently:
* In Columbus, Ala., TIC FCU reported that callers purporting to be from the credit union were taking a "shotgun approach," randomly calling numbers in hopes that a member would divulge credit card, debit card PINs (WRBL.com Nov. 12). * Ypsilanti Area FCU in the Ann Arbor, Mich., warned residents that phishers are using a fake credit union's name to gain access to bank accounts in Ann Arbor. A number of the credit union's members received the e-mails and text messages. The e-mails direct recipients to a website while the text messages direct them to an automated phone line. The credit union warned members not to respond (The Ann Arbor News via mlive.com Nov. 7). * In Valparasio, Ind., police warned the public about automated telephone messages that told consumers their accounts at Regional FCU and other local institutions were about to be canceled unless they provided an account number and PIN over the phone. The credit union said its members are well-educated on fraud prevention (Post-Tribune Nov. 12). * And outside the U.S., an e-mail purporting to be from the "Account Review Department" of the Irish League of Credit Unions claimed the recipients' account had experienced an unauthorized access or security alert. Recipients were directed to a website to reactivate their accounts by providing personal details such as card numbers (Irish Times via spamfighter.com Nov. 14).
All the institutions warned that they do not ask for information that they already have on file and especially would never do so in unsolicited messages.

Michigan MaxwellHerringDesjardins winners announced

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PLYMOUTH, Mich. (11/18/08)--The Michigan Credit Union League announced recipients of the 2008 state Dora Maxwell, Louise Herring and Alphonse Desjardins Awards. Dora Maxwell Social Responsibility first-place awards were presented to:
* GraCo FCU, Alma, $5 million to $20 million in assets; * Education Plus CU, Monroe, $20 million to $50 million; * Education First CU, Southgate, $50 million to $100 million; * Alpena Alcona Area CU, Alpena, $100 million to $200 million; and * LAFCU, Lahaina, first place, $200 million to $500 million.
Louise Herring Philosophy in Action first-place awards were presented to Central Macomb Community CU, $50 million to $250 million in assets, and MSU FCU, East Lansing, $250 million or higher. First place Desjardins Youth Financial Education awards were presented to:
* Education First CU, 35 million to $75 million in assets; * Extra CU, Warren, $75 million to $250 million; and * Michigan Schools and Government CU, Mount Clemens, $250 million and avoce.

WOCCU Development firms see value in CU difference

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BELIZE CITY, Belize (11/18/08)--When World Council of Credit Unions (WOCCU) Chairman Melvin Edwards talks about agricultural lending, he draws a distinct connection to the additional value credit unions bring to the process.
World Council of Credit Unions Chairman Melvin Edwards discusses agricultural lending in Belize at the Technical Centre for Agricultural and Rural Cooperation ACP-EU, an agency for improving stakeholder information among rural development efforts in several countries. (Photo provided by the World Council of Credit Unions)
More people are taking notice and asking questions about the strength through sustainability that credit unions bring to any development equation, Edwards said. During a presentation earlier this month to the Technical Centre for Agricultural and Rural Cooperation ACP-EU, Edwards described WOCCU's approach to value chain financing in Peru and several other countries. The Centre is a Netherlands-based agency for improving the flow of stakeholder information among rural development efforts in Africa, the Caribbean and the Pacific. Those attending the Belize workshops learned about the sustainability credit unions offer participants--something critical to effecting long-term change, but often unavailable through other development agencies, WOCCU said. “WOCCU agricultural lending efforts have stressed value-chain financing, capacity building and improving delivery mechanisms,” said Edwards, who represents the Caribbean Confederation of Credit Unions on WOCCU's board of directors. “Not all questions of success and accessibility have been answered, but WOCCU's sustainable approach helps credit unions worldwide deliver financial services to people in rural markets who need them most.” Value-chain financing provides funding for participants in the field-to-market process to streamline the process between the time a crop is planted, harvested, reaches the market and is sold to the final end-user, and earnings from the sale are returned to the producers after the credit union loans are satisfied. Introduced in credit unions by WOCCU in Peru, the process is being adapted to serve the needs of small producers in Kenya and other countries. “By becoming credit union members as part of the value-chain process, small producers solidify business relationships and gain market access, not only for the duration of the value-chain cycle, but for the foreseeable future,” Edwards told Belize participants. “WOCCU's methodology enables credit unions to identify at which point in the value chain--from production to commercialization--financing brings producers the best value and represents a good investment for the institution.” Critical components of successful value-chain financing include adapting it to the local environment and engaging the key actors at the appropriate times. For example, in both Peru and Kenya, small producers, farmers' groups and product buyers are brought together at the start, cutting out the need for middlemen and returning to producers more profits from crop sales. “No matter how formal the structure, credit union involvement in agricultural development and lending at all levels provides greater sustainability for those involved in the process,” Edwards said. “More and more small producers in developing nations worldwide are seeing greater benefits from the credit union difference.”

CUs help borrowers buy cars in tight credit market

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MADISON, Wis. (11/17/08)--The volume of car loans is dropping, captive finance companies are tightening credit, and interest rates have nearly doubled in third quarter. But consumers still can get a car loan at an affordable price through a credit union, according to several media sources. During third quarter, the volume of car loans declined 6%, compared with third-quarter 2007. Average interest rates on car loans almost doubled from July to September with financing now as high as 39%, and borrowers are required to make larger down payments--averaging $2,000 down on a $20,000 car (Washington Post Nov. 13). The 39% financing--offered by Nationwide Acceptance Corp. in Chicago to people with "perfectly awful credit"--is almost four times what local banks and credit unions charge, even for consumers with poor credit histories, reported The Seattle Times (Nov. 13). Credit unions and banks still are lending to qualified buyers, the article said. It offered suggestions on how to get the best car deal. One suggestion: Shop for financing. "Talk to a credit union or bank, and compare those rates with what dealerships offer," the article advised. In Jacksonville, Ark., Gwatney Cheverolet is one of several auto dealers turning to different sources--including credit unions--to finance cars after its captive finance company, GMAC, tightened its lending standards (Arkansas Democrat Gazette Nov. 13). The dealer is increasing its work with local credit unions and banks rather than GMAC. In fact, Arkansas FCU is now its largest lender. Terry Vick, the credit union's chief lending officer, noted in the article that Arkansas FCU has lent 13% more in auto loans this year, compared with all of 2007. She attributes the business to the volatile stock market. Members have pulled their funds from the market and deposited them in the credit union. As a result, there's plenty of money to lend out. Edmunds.com, an online resource for consumer automotive information, agrees it is possible to get a car loan in times of economic stress. It called media reports that consumers are unable to get auto loan financing as "often overstated" (BusinessWire via MarketWatch Nov. 14). Edmunds.com pointed out several trends, which credit unions can help educate members about:
* Consumers with average credit scores will be required to make a down payment as high as 20%; * Lenders are restricting the length of loans; six-year loans may no longer be an option for many consumers; * The minimum credit score required for an auto loan has risen to around 500; * The credit score required for the best loan rates has risen to at least 720, up from 700 a few months ago; and * Consumers with the best credit can expect an interest rate as low as 5.95%, while those with average credit may see rates as high as 12.5%.
Among the strategies Edmunds.com outlines: "Look to credit unions, local banks and online lenders as alternative sources for auto loans."

U.S. Central to convert accounts to stabilize ratings

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LENEXA, Kan. (11/17/08)--U.S. Central FCU will convert roughly $450 million of member capital share accounts (MCS) to permanent capital known as paid-in-capital (PIC) in efforts to stabilize its ratings and build long-term capital. About $3.8 billion of unrealized losses on U.S. Central’s securities as of Sept. 30, have caused Wall Street ratings agencies to downgrade the corporate in early 2008. “Ratings agencies look at the current capital we have,” David Dickens, U.S. Central vice president of asset liability management, told News Now. “No credit is given for MCS because it is not considered to be equity under GAAP [generally accepted accounting principles] since it is not perpetual. “The ratings agencies will only recognize capital that is a GAAP-qualifying equity,” he continued. What U.S. Central is in essence doing is asking its “members to make a change in the type of capital instrument,” Dickens said. “We’re attempting to make this move to solidify our current AA+ rating, which is the second-highest rating,” he added. U.S. Central still will have $2.6 billion in total capital, Dickens said. By converting $450 million from MCS to PIC, the corporate will increase its GAAP equity to $1.385 billion from $935 million. Since U.S. Central has a long-standing use of MCS as a capital component, the change could cause some consternation among members because the move might basically be saying to some that “this type of capital is not good enough,” Dickens acknowledged.

Missouri has most participants in CU Locate

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ST. LOUIS (11/17/08)--Missouri credit unions are leading the nation in CU Locate. No other state has as many credit unions participating in the natural disaster response program offered by Credit Union National Association, according to the Missouri Credit Union Association (MCUA). The program is free and helps members stay in contact with their credit union during a natural or man-made disaster (The Missouri difference Nov. 12). Members can call 1-877-CULOCATE (1-877-285-6228) to check the status of their credit union, access funds and receive other information. “It’s important for credit unions to take advantage of CU Locate,” said Don Cohenour, MCUA senior vice president of credit union development. “In a natural disaster, businesses can literally be swept away. CU Locate provides members and credit unions with an emergency contact.”

Massachusetts Missouri league CEOs in the media

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MARLBOROUGH, Mass. and ST. LOUIS (11/17/08)--Presidents of two state credit union leagues recently weighed in, through various media, on the condition of the economy and its effect on credit unions. Dan Egan, president/CEO of the Massachusetts Credit Union League, commented Friday to the Boston Herald on the $700 billion federal bailout package. “The whole thing is strange,” Egan told the newspaper. “The [bailout] is morphing into something different than what was originally intended.” The result could be confusion and loss of confidence for consumers--many of whom may decide not to seek new loans, even though the Massachusetts financial system is in relatively good shape, Egan added. Rosie Holub, president/CEO of the Missouri Credit Union Association, wrote a letter to the editor published last week in the St. Louis Business Journal. In it she said: “There has been much discussion about the economic crisis and remake of the financial services industry. A bright spot in our current economic woes are credit unions. As not-for-profit financial cooperatives, credit unions continue to put the financial security of our families first. “Although we are experiencing an unprecedented period of economic stress and uncertainty, this sector of the financial services industry continues to maintain public trust," she continued. "As a matter of fact, year after year independent national surveys confirm that credit unions are trusted to consistently act in the consumers’ best financial interests. Perhaps it isn’t so bad to be a little conservative; and perhaps it is time to take a look at credit unions--a segment of the financial services industry you can trust.”

Members United Corporate establishes new foundation

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WARRENVILLE, Ill. (11/17/08)--Members United Corporate FCU has established The Central Credit Union Fund Foundation to fund initiatives that support the theme of “people helping people” and to help credit unions improve consumers’ financial well-being. Members United is providing the foundation with $50,000 in its first year for operating costs/grant awards and $200,000 to establish an endowment. “Creating the foundation is a natural extension of our core mission,” said Kevin Brauer, president of Members United’s northeast region. “When we merged with Central Credit Union Fund in 2007, we wanted to recognize its position as the nation’s first corporate credit union and its continued commitment to serving credit unions. The foundation will benefit former Central Fund members and other Massachusetts credit unions.” The foundation will fund programs that encourage consumer education, financial literacy, financial services to those of modest means, credit union development, service to under-served consumers and management development. The foundation’s board of trustees approved its grant-making policy Thursday. Members United Corporate FCU is a national $10.3 billion asset financial institution headquartered in Warrenville, Ill.

Laptops stolen from auditors may have members info

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PORTLAND, Ore. (11/17/08)--Two Oregon credit unions have notified members that laptops stolen from outside auditors may have contained their names, account numbers and balances for certain types of deposit accounts but not critically sensitive information. OnPoint Community CU, based in Portland, said a laptop that belonged to a Michigan-based auditing firm was stolen after the auditors left the office of OnPoint Community CU on Oct. 29. OnPoint Community President/CEO Robert A. Stuart told members about the theft in a letter to members posted Nov. 4 on its website. And local media in Eugene, Ore., reported that Oregon Community CU, based in Eugene, sent out similar letters last week to members informing them that laptops had been stolen from auditors after they left the credit union for a required audit, also on Oct. 29 (KMTR.com Nov. 14). The auditors could not confirm they deleted all OnPoint information from the laptop before leaving the offices, as required by OnPoint policy, Stuart said. "Because of this uncertainty, we are taking a number of precautions, including proactively notifying our members," he said. He noted the information did not include any credit card information, debit card information or passwords. It also did not include any Social Security numbers, taxpayer ID numbers, birthdates or other information typically used in identity theft. "This appears to have been a random theft. There is no indication the thief has accessed any data, or is even aware of it," he told members. The credit union recommended members monitor their accounts and said employees will continue to carefully check member identification during business transactions. Oregon Community CU spokesperson Cheri Kistner told KMTR that the credit union believes the risk to members in minimal. The information taken did not include critically sensitive information, she said. Like the other credit union, Oregon Community CU encouraged members to monitor their accounts.

CUs on the Tube Tinker FCU bucks the norm

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OKLAHOMA CITY, Okla. (11/17/08)--Tinker FCU has launched a website, BucktheNorm.com, to reach young adults. The “norm,” according to Tinker FCU, is spending beyond a consumer’s needs, getting into debt, and not knowing how to get out. The site aims to provide information to young adults so that they can “buck the norm” and achieve financial empowerment. The website provides articles about spending and finances, a link for a free credit report, and an application for a scholarship contest. It explains financial products, such as checking accounts, savings accounts and retirement accounts. BucktheNorm.com also uses Twitter to provide links to financial empowerment stories. For more information about “bucking the norm,” watch the video or use the link. Tinker FCU has $1.7 billion in assets and is based in Oklahoma City, Okla. For more information, use the link.

City planners reject CUs proposed branch

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GRAND RAPIDS, Mich. (11/17/08)--A proposal to build a new branch of Consumers CU in Grand Rapids, Mich., has been rejected by city planners. More than 150 residents signed a petition opposing the plan, arguing that the drive-through branch would create noise and cause traffic congestion in a residential area (MLive.com Nov. 14). Kalamazoo-based Consumers CU will not pursue the proposal, CEO Kit Snyder told News Now. He cited economic factors in the credit union’s decision to hold off on the proposal.

Even robber cant get satisfaction from bank

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YORK, Pa. (11/17/08)--Even a bank robber can't get satisfaction from a bank. A miffed robber was so disgruntled that a bank had no cash that he threatened to file a complaint with the bank's management. The branch of Susquehanna Bank in Springettsbury Township, Pa., had just opened at about 9 a.m. Thursday morning. Three tellers were waiting for their cash drawers to be filled, when the man entered and demanded money (Associated Press and Publicopiniononline.com and York Daily Record Nov. 13). The first teller screamed and fainted. The second said she didn't have any cash and showed him the empty drawer. The third teller also showed him an empty cash drawer. As he ran from the scene empty-handed, the robber vowed he would let bank managers know of his dissatisfaction. A drive-thru customer followed the robber and contacted police, who arrested Joseph Goetz, 48, less than a mile from the bank.

CU System briefs (11/14/2008)

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* GREENSBORO, N.C. (11/17/08)--The Carolinas Credit Union Foundation announced that Judy Tharp, president/CEO of Piedmont Aviation CU, has been named to its board of directors. Tharp has been with the credit union industry since 1979, when she helped start Cape Fear Employees' CU and served as its first president/CEO until 1994. Since then she has worked in senior leadership positions at Founders FCU and South Carolina FCU and served as an officer of CUNA Mutual Group, overseeing lending strategy and solution development. She also has served as a board member of the North Carolina Credit Union League and First Carolina Corporate CU. Tharp succeeds Steve Harkins, president/CEO of SC Telco FCU, who vacated his seat (The Weekly Update Nov. 12) … * WINSTON-SALEM, N.C. (11/17/08)--Two Winston-Salem, N.C.-based credit unions have joined forces with the national Credit Union Service Centers to bring the shared branching concept to the city. Piedmont Aviation CU (PACU) and Winston-Salem City Employees' CU (WSCECU) are spearheading the collaboration. WSCECU's new branch is now located in leased space at Piedmont Aviation CU and operates as a finance service center. Pictured are, from left: PACU's Chief Financial Officer John Jameson, Chief Operating Officer Allen Upchurch, and Vice President of Administration Patty Mauro; WSCECU President/CEO Tony Ebron; and PACU's President/CEO Judy Tharp and Vice President of Finance Jim Venesky. (Photo provided by the North Carolina Credit Union League) … * YOUNGSTOWN, Ohio (11/17/08)--Michael Kurish, president/CEO of Associated School Employees CU, headquartered in Youngstown, Ohio, has been elected to the Ohio Credit Union League's Board of Directors for a three-year term, the credit union announced. The election filled the District IV seat, which covers the Mahoning Valley, Northeast, Ohio Valley, Stark County and Summit County chapters. Associated School Employees CU has assets totaling more than $71 million …

Greylock FCUs quarter results shows strong growth

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PITTSFIELD, Mass. (11/14/08)--Greylock FCU has added more than 2,500 members so far this year and reached $1.1 billion in assets, according to the Pittsfield, Mass.-based credit union's third quarter results for 2008. In the past 12 months, total loans at the credit union grew by 18% to $895 million and total share deposits grew 12% to $870 million. "Our ability to not only survive the current financial crisis but to actually grow ahead of our goals speaks volumes to the trust that Berkshire County families and businesses place in Greylock," said President Angelo Stracuzzi. "They know that we have never and will never engage in subprime lending practices, and that we are not subject to the whims of Wall Street," he added. Stracuzzi noted the credit union's earnings are strong because the credit union is "totally focused on relationships. If we take care of our members, and efficiently put their money to work right here in the community, the earnings take care of themselves." Data from Callahan & Associates, a national credit unions research firm, indicated that Greylock is 60% more efficient than its peer financial institutions at generating income per employee. In addition to hitting the $1.1 billion asset landmark, the credit union saw:
* Strong capital reserves at $90 million; * Loan reserves exceeding $8 million; * Third-quarter earnings at $1.6 million; and * Year-to-date earnings at $5.1 million.
Stracuzzi said the good results will enable the credit union to run a new Visa promotion for the holidays. Any purchase made with the credit union's Visa card between now and Dec. 31 will receive 0% until the balance is paid off. "We know the economy is tough and many families are feeling the pinch this year as they plan for the holidays," he said.

Connecticut league sends interns to TrinidadTobago

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MERIDEN, Conn. (11/14/08)--The Credit Union League of Connecticut (CULC) has entered into a partnership agreement with the Cooperative Credit Union League of Trinidad and Tobago that involves an internship program between the two leagues. The International Partnerships Development Committee of CULC recently selected Patti Prendergast, vice president of marketing and membership development at Stamford (Conn.) FCU, and Fred Brown, director of marketing and member development at Northeast Family FCU, Manchester, to participate in its Internship Exchange Program with the Trinidad and Tobago league. Interns spend two weeks learning, sharing information, and comparing procedures with the host credit union. Prendergast interned at Tranquility CU located in Port of Spain, Trinidad, where she worked with the education/marketing committee and staff to establish a strategic marketing plan. “This was a truly unique experience to work at a credit union in another country,” Prendergast said. “I was inspired by the enthusiasm and dedication of the people in the credit union movement.” Brown interned in the marketing department at Eastern CU in La Joya, Trinidad. “Working with Eastern CU, I saw firsthand just how strong the credit union movement is in Trinidad and Tobago and how far we--the U.S.--have to go,” Brown said. The International Partnerships Development Committee--which is affiliated with the World Council of Credit Unions--works cooperatively to build an interconnected, international credit union system to serve credit unions and their members.

Security not a tech issue but a biz issue

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NEW YORK (11/14/08)--Security vulnerabilities often are not directly a technology issue, but a business issue, according to two IBM security executives. “There is no silver bullet, and the worst enemy is a lack of awareness,” said Phil McHugh, IBM ISS security executive, and Guy Denton, IBM ISS executive consultant, during a recent webinar that focused on security challenges faced by financial services providers. Risks can be data-driven, business-driven, or event-driven. Data-driven problems include viruses, worms, and disk failure. Business-driven problems include application outages, network problems and lack of governance. Event-driven problems stem from terrorism, natural disasters, power failures, fires or a pandemic, the webinar said. Increased collaboration among businesses also poses risks, McHugh said. Credit unions that want to guard against risks can undergo assessments. Vulnerability assessments provide penetration testing to see if vulnerabilities exist, and information security assessments comprehensively evaluate organizations’ information policies, procedures, controls and mechanisms. Five other initiatives that financial services providers are undergoing to prevent risks are:
* Access and identity management; * Security regulatory compliance; * Security training and awareness; * Governance for security, including frameworks; and * Disaster recovery and business continuity.
The webinar also noted security issues with Web 2.0, which is a catch-all term to describe sites that are more than static pages. The key enabler with Web 2.0 pages is the Asynchronous Javascript and XML--or AJAX. Traditional security approaches don’t work in Web 2.0, but credit unions can implement risk-based, enterprise-wide security programs to mitigate Web. 2.0’s applications with an integrated framework approach, McHugh and Denton said.

Debit card use is up says another survey

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NEW YORK (11/14/08)--Debit card use is expected to climb 13% in 2008, to $1.2 trillion, according to the Nilson Report. The trend will impact credit unions in more ways than one. The steep increase in debit use compares with a 3% increase in credit card transactions, totaling $1.9 trillion. Mastercard and Visa reported a 17.5% hike in debit card transactions, compared with 7.45% for credit card transactions during 2007, said Nilson (San Antonio Express-News Nov. 11). Visa Inc. says debit card use could surpass credit card use this year. Roughly 58.9% of credit unions overall offer debit cards, according to the Credit Union National Association's Credit Union Service Profile for December 2007. But among credit unions with $50 million or more in assets, debit cards are offered by 96% to 99.6% of credit unions, depending on the asset category, said the profile. There's still plenty of room to grow debit card use. Larger credit unions that offer debit cards can work on getting a larger debit penetration in their membership. Smaller credit unions may be hard put to offer the sophisticated debit services unless they collaborate with third parties. Also noting the increasing debit card usage is SAS, which makes software that tracks consumer purchase. Members and other consumers already are using their debit cards, SAS told the Express-News. Some members are using debit as a budgetary measure as card companies place more restrictions on card use in the tightening economy. Leslie Baldwin, a member of Security Services FCU in San Antonio, told the newspaper that her family cut up its credit cards and is using cash and her credit union debit card, PayPal and online bill paying services. The trick is to keep track of the expenditures on debit. According to the Consumer Federation of America, consumers paid $17.5 billion a year for unauthorized overdraft loans that stemmed from not keeping track of their debit card purchases. Overdraft fees at the nation's largest banks averaged almost $35 last year. Business Week (Oct. 29) reported that banks are scrambling to boost the profitability of their debit cards. It notes that overdraft fees have evolved. Banks used to deny credit to consumers who don't have enough funds in their accounts. Now most large banks approve the debits but charge a fee if the debit "bounces." They've also made it easier to prompt penalties. Consumers no longer have a "float" between the charge date and when they deposit money into the account. "Banks have turned this into a major source of revenue," CFA told the publication.

Pennsylvania CU supporter Lt. Gov. Knoll dies

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HARRISBURG, Pa. (11/14/08)--Pennsylvania Gov. Ed Rendell Wednesday announced the death of Catherine Baker Knoll, the state’s first female lieutenant governor, and a friend and supporter of credit unions. Knoll died at the National Rehabilitation Hospital in Washington, D.C., where she was undergoing physical therapy following treatment for neuroendocrine cancer, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Nov. 13). Knoll was a friend of credit unions and supportive of their efforts, PCUA said. During a celebration for the swearing in of U.S. Sen. Bob Casey in January 2007, PCUA staff met Knoll, who was wearing the Credit Union Little Guy pin. The pins were distributed at a train station and throughout Washington by Credit Union National Association staffers. Knoll served eight years as state treasurer. She was sworn in on Jan. 21, 2003, as Pennsylvania’s 30th lieutenant governor, and the first woman elected to the post.

ABCUL Ten ways to survive recession with CU

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MADISON, Wis. (11/14/08)--The Association of British Credit Unions (ABCUL) has compiled its Top Ten Tips for how members can get through tough economic times, especially with the holidays on the horizon (easier.com Nov. 13). Credit unions in the U.S. can adapt ABCUL’s suggestions and promote to their members:
* Flexible savings products--Credit unions offer a range of flexible and accessible savings accounts. Members can save according to their needs. Tell members that even saving a small amount each week will add significant savings; * Lower loan costs--If members need to borrow money, credit unions have some of the best deals available. Early repayment of a loan from a credit union results in no penalties. Borrowers pay interest only for the amount of time they are in possession of the loan money; * Debit cards--Members can use them with merchants and to withdraw cash from ATMs. Users can set up direct debit payments with utility bills, for example, to save money; * Rewards cards--Many credit unions offer rewards cards that add value each time they are used; * Christmas savings clubs--This is a safe way to save for the holiday season; * Mortgages--With access to mortgages from banks getting harder to obtain, credit unions are in a good position to offer their competitively priced mortgages; * Life insurance--When members take out a credit union product, this is built in at no extra cost, meaning loans are written off if there is a member death. This may vary in the U.S.; * Money management advice--Members should be made aware that many credit unions offer free advice and useful information on managing finances; * Deposit guarantee--Member deposits are issued up to $250,000 through the National Credit Union Share Insurance Fund; and * Local ownership--Credit unions are owned by members, not stockholders.

Iowa league testifies at presidents fin-lit forum

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DES MOINES, Iowa (11/14/08)--Iowa Credit Union League (ICUL) testified that credit unions are increasing financial literacy among their members during a financial literacy forum hosted by members of
Jeff Russell of The Members Group provides testimony on behalf of the Iowa Credit Union League during a financial literacy forum hosted by the President’s Advisory Council on Financial Literacy. The Members Group is a credit union service organization owned by the league.
Carrie Schwab Pomerantz, daughter of the President’s Advisory Council on Financial Literacy Chair Charles Schwab, was the keynote speaker at the council’s forum on financial literacy in Des Moines, Iowa. (Photos provided by the Iowa Credit Union League)
the President’s Advisory Council on Financial Literacy. Iowa credit unions are holding financial seminars, developing in-school branches, participating in Money Smart Week Iowa and sponsoring the television show BizKid$, which teaches children about money. “Iowa credit unions are advocates for increasing financial literacy, not only among our members but our broader communities,” said Patrick Jury, ICUL president/CEO. “We will continue to pledge our support of financial education and making a difference in the lives of our members.” Jeff Russell of The Members Group (TMG) provided the testimony for ICUL. TMG is a credit union service organization that is owned by ICUL. Russell shared information about the Iowa Credit Union Foundation’s individual development account program that matches the savings of working families so they can purchase long-term financial assets such as a home, business or education. He also noted ICUL’s subsidiary company, Coopera Consulting, which was created to help credit unions nationwide reach out to Hispanics. Coopera has helped credit unions open accounts for previously unbanked Hispanics and has started them on a path to savings, asset building and greater financial literacy, he said. More than 100 financial education leaders in Iowa attended the forum to discuss financial literacy efforts in the state. The forum was sponsored by the ICU, Greater Iowa CU, and the Iowa State University College of Business and College of Human Sciences. Council members heard testimony from the ICUL, Iowa Society for Human Resource Management, the Iowa Department of Human Services, the Iowa Jump$tart Coalition and the 21st Century Skill Committee. The President’s Advisory Council on Financial Literacy was created in January by President Bush to help Americans with finances.

CU System briefs (11/13/2008)

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BIRMINGHAM, Ala. (11/14/08)--More than 41 volunteers from Alabama and Mississippi credit unions attending the Alabama Credit Union League's fall Development Conference in Biloxi, Miss., participated in a building project for the Habitat for Humanity of the Mississippi Gulf Coast. They worked on six houses, each in the initial stages of framing, in Long Beach, Miss. According to Leah Witmer of the Habitat organization, "They played a critical role in helping 29 hardworking families move one step closer to homeownership and long-term financial stability. We absolutely couldn't have made so much progress without these volunteers." The league provided breakfast and lunch and "Build on our Mission"-themed T-shirts. Pictured are some of the volunteers. (Photo provided by the Alabama Credit Union League) … * NORTH POLE (11/14/08)--A man dressed in a black motocross helmet, a black jacket and dark bunny boots robbed a branch of Alaska USA FCU at the North Pole Wednesday afternoon. Police are investigating whether the robbery is connected to a bomb threat called in to a nearby middle school. The branch is located in a Carrs/Safeway grocery store. Police shut down the school and sealed off entrances at the shopping center but allowed shoppers to leave. An undisclosed amount was taken (Fort Mill Times Nov. 13) … * JACKSON, Miss. (11/14/08)--Two well-dressed gunmen held up the Mississippi DHS FCU in Jackson Wednesday morning (clarionledger.com Nov. 13). The robbery is the 14th in the city this year and the second time the credit union has been robbed this year. The men robbed two tellers, who were not injured. No members were in the credit union at the time. Authorities have not determined whether this robbery is related to a robbery by two men of the credit union on May 9. A school next door was locked down after the incident … * BAY CITY, Mich. (11/14/08)--Jeremy L. Coberley has been named president/CEO of FinancialEdge Community CU. The appointment was effective Sept. 24, announced Timothy Green, board chairman. Coberley was formerly vice president of operations at the $55 million asset credit union and had been a member of its management team since 2002. He has more than 10 years' experience with the credit union industry. The credit union, based in Bay City, serves the communities of Bay, Sagninaw, Midland and Arenac Counties in Michigan … * GRAND RAPIDS, Mich. (11/14/08)--Ronald Tran, 45, former general manager of Plainwell Community FCU, Plainwell, Mich., pleaded guilty Wednesday to defrauding the credit union of about $1.3 million over four years until 2004. He pleaded guilty to two counts of financial institution fraud, four counts of embezzlement from a credit union, and four counts of money laundering. Investigators said he issued loans under false information and used his position to misapply funds of the credit union for his own use. Sentencing is set for Feb. 23. Tran faces a maximum penalty of up to 30 years in prison and a fine of $1 million on the embezzlement charges, plus up to 20 years and a fine of $500,000 for the money-laundering charges (WWMT.com Nov. 13) … * TULSA, Okla. (11/14/08)--Cynthia Jan Harris, a former assistant manager for Mayes County FCU, pleaded guilty to embezzling more than $1.6 million from the $24.5 million asset, Pryor, Okla.-based credit union. Harris admitted to stealing the money from June 2000 through July 2007. She made phony deposits into existing credit union accounts and then used checks to withdraw funds. She faces a four-to-five-year prison term (Associated Press Newswires Nov. 7) … * WEST MONROE, La. (11/14/08)--Forest Kraft FCU, based in West Monroe, has changed its name to Centric FCU, as of Nov. 1. The change stems from the $74 million asset credit union’s “desire to further distinguish itself in the financial institution marketplace,” the credit union said in a press release. “Our intent in becoming Centric FCU is to better reflect who we are,” said Centric CEO Chris Craighead. “Since expanding our membership several years ago, we have grown beyond our original membership" …

CU announces 6.90 fixed-rate credit card

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TUMWATER, Wash. (11/13/08)--O Bee CU announced it is offering a new 6.90% annual percentage rate, fixed-rate credit card dubbed “The ONYX.” “With credit-card rates spiraling out of control for consumers, and higher interest and default rates up to 36%, we decided to resist this trend,” said Lee Wojnar, O Bee vice president of marketing. “At O Bee, we see an opportunity where we can help consumers by offering a low-rate credit card (MarketWatch Nov. 11). “The ONYX is our premiere card with no points or rewards, but just a low interest rate,” he added. O Bee CU is a $118 million asset, Tumwater, Wash.-based credit union.

Check imaging at all-time high in October

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NEW YORK (11/13/08)--A record volume of check images and dollar value was posted in October on the SVPCO Image Payments Network, said The Clearing House Payments Co. Monday. During October, the company reported average daily check-image volume of 24.9 million items, a 67.1% increase from October 2007. These included items processed for Members United Corporate FCU, Southwest Corporate FCU, Suncoast Schools FCU, Bank of America, JPMorgan Chase Bank, U.S. Bank, Wachovia Bank and Wells Fargo Bank, as well as a number of other major banks. The network also processed:
* Roughly 549.4 million check images, also a 67.1% increase from the 328.7 million items processed a year earlier; * About $816.3 billion in dollar value, an increase of 52.4% over October 2007's $535.7 billion;
Oct. 14 saw the largest exchange for the month--a record 45 million items valued at $66.1 billion. October had 22 processing days. According to Susan Long, senior vice president of The Clearing House, the October numbers marked the "eighth time in 10 months that the key indicator of check image volume set a new record." She attributed the growth to financial institutions realizing they can save costs and improve their processes by moving from paper to electronic payments.

CEFCU receives 25 million from state for loans

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PEORIA, Ill. (11/13/08)--Citizens Equity First CU (CEFCU) received a $25 million deposit from the Illinois state treasurer’s office this week to help ease tight credit in the state. Illinois has provided nearly $100 million to date to 16 institutions statewide in efforts to help melt the credit freeze, said State Treasurer Alexi Giannoulias (Journal Star Nov. 11). The program is part of a $1 billion initiative to ease the credit crunch and spark investment returns to the state by making interest-bearing deposits available to healthy Illinois financial institutions. The arrangement works for the participating institution and the state, Chuck Walker, chief financial officer at the $3.635 billion asset, Peoria, Ill.-based CEFCU, told the newspaper. The credit union has partnered with Illinois in the past, obtaining state deposits ranging from $1 million to $10 million, Walker said. CEFCU doesn’t require a bailout and is going to have a record year for dispensing loans since central Illinois is buffered from many of the current economic problems affecting the U.S., he added. The Illinois treasurer’s office has $500 million available to financial institutions, with another $500 million available for allocation between December and March, Giannoulias told the paper. Any Illinois-based state or federally chartered credit union that is an approved depository institution is eligible for deposits through the program up to one year.

Shots fired in CU no one hurt

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PINELLAS PARK, Fla. (11/13/08)--Police are seeking two robbery suspects who fired shots inside of Suncoast Schools FCU late Friday afternoon. No one was injured. No members were inside of the credit union when the shooting occurred, Patti Barrow, Suncoast director of marketing, told News Now. “Our staff handled everything according to their training,” Barrow said. “They were amazing, and we applaud them. “We’re grateful nobody was injured,” she added. The shots were fired at Suncoast’s Pinellas Park branch. Suncoast Schools FCU, based in Tampa, Fla., has $6.2 billion in assets.

Operation Best Wishes gears up for holiday

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FORT DRUM, N.Y. (11/13/08)--AmeriCU CU helped military families send wishes to deployed soldiers through the Operation Best Wishes program at its Fort Drum branch Nov. 4.
Amanda Godlewski (left) sends a greeting to her soldier, Joshua Flint, at AmeriCU CU in Rome, N.Y. through the Operation Best Wishes program. From left are Godlewski, Flint’s mother and father, and Godlewski’s son, Landon. (Photo provided by AmeriCU CU)
Families were given 10 minutes each to record and send greetings to their family members. The deployed could watch the webcast live or access an archived recording. “This is our second year as a host for this program and we’re pleased to say we tripled the number of families participating,” said Tina Wildhaber, AmeriCU CU regional manager. Operation Best Wishes is offered free to military families by America’s credit unions through WesCorp FCU and the Defense Credit Union Council. Operation Best Wishes will visit families in California, Connecticut, Florida, Georgia, Louisiana, New York, South Dakota, Texas, Washington and Wyoming this year. Rome, N.Y.-based AmeriCU has $654.1 million in assets.

Small-CU council brainstorms on challenges

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MADISON, Wis. (11/13/08)--Dealing with what is yet to come in the down economy and helping members navigate through it are among the top challenges facing small- and mid-size credit unions, according to a council of a dozen CEOs convened by CUNA Mutual Group.
Jeff Post, center, CUNA Mutual president/CEO, and Bob Trunzo, right, chief sales officer, address a meeting of the small- and mid-size credit union council that recently met in Madison, Wis. (Photo provided by CUNA Mutual Group)
The council met with CUNA Mutual leaders for the second time in two years to brainstorm best practices, discuss challenges unique to the movement’s smaller credit unions and to provide feedback on how CUNA Mutual can help them grow and thrive. Other challenges cited include:
* Proactively communicating the value of credit unions to the American public; * The burden of compliance and regulation; * Attracting younger members; * Increasing operating efficiency; * Keeping loan growth up with deposit growth; and * Attracting quality employees and balancing the costs of new delivery channels with member usage.
“The council provides a forum to discuss the unique challenges faced by small- and mid-size credit unions and an opportunity for best-practice sharing among members,” said Dave Sweitzer, CUNA Mutual vice president, small- and mid-size credit unions. “The council also provides valuable feedback to CUNA Mutual on how we can become a better business partner by supporting their needs and those of their members.” Members of the council of small- and mid-size credit unions include:
* Andi Baum, Everyone’s FCU, Tucumcari, N.M.; * Lucile Beckwith, Palmetto Trust FCU, Columbia, S.C.; * Phyllis Cochran, Richmond Community FCU, Gracewood, Ga.; * Jon Hernandez, City of Downey FCU, Downey, Calif., Mattel FCU, El Segundo, Calif. and CALCOM FCU, Torrance, Calif.; * Michael Kerr, CU of the Rockies, Golden, Colo.; * Diane Moilanen, Settlers Co-operative CU, Bruce Crossing, Mich.; * Rick Parker, Miami University Community FCU; Oxford, Ohio; * Stuart Phillips, United Business & Industry FCU, Plainville, Conn.; * Larry Roland, ECU CU, Largo, Fla.; * James Tuggle, Transtar FCU, Houston, Texas; * Bill Winter, St. Cloud FCU, St. Cloud, Minn.; * Debra Woods, Taylor CU, Medford, Wis.; and * Stephen Brindamour, Susquehanna Valley FCU, Camp Hill, Pa.
“The council provides an excellent forum for credit union executives from different parts of the country to share information,” Hernandez said. “It’s also an opportunity to share our issues, frustrations, suggestions and appreciation to CUNA Mutual leadership. It’s good to know someone values smaller credit unions’ needs and there is a commitment to our success.” “Council members identified business challenges that they would like to see CUNA Mutual address, such as help in attracting younger members, providing financial counseling for members and helping to promote the “credit union difference” in the current economic crisis,” Sweitzer said. “It was a real give-and-take between two parties interested in making sure credit unions remain relevant to their members.” “This forum has created an invaluable networking opportunity for every member of the Council. Through it, we have established relationships and shared ideas that ultimately benefit the service we all provide to our members,” Cochran said.

CU System briefs (11/12/2008)

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* FARMERS BRANCH, Texas (11/13/08)--The deadline to submit Phase I Disaster Relief Emergency Grant requests stemming from Hurricane Ike is Friday, announced the Texas Credit Union Foundation (LoneStar Leaguer Nov. 7). To date, the foundation has approved 950 grants totaling $458,108 to credit union employees who experienced losses from the hurricane. Grant application forms are posted on the foundation's website … * ST. PAUL, Minn. (11/13/08)--St. Thomas Employee FCU mailed out 83 Christmas Club checks totaling more than $72,300 last week (Bulletin Nov. 11). The checks included all deposits from Nov. 1, 2007, through Oct. 31, 2008, plus a 2.5% annual dividend. The credit union also announced that its Christmas Club for 2009 is open. Deposits to the account will be available for withdrawal the first week of November 2009. St. Thomas Employee FCU is a $2.4 million asset credit union … * SUPERIOR, Wis. (11/13/08)--Superior Choice CU is featured in a local newspaper as presenting a remedy to payday loans(Superior Telegram Nov. 12). In January, Superior Choice, a $150 million asset credit union, will offer Good Money loans, an alternative short-term loan at half the price of payday loans. Superior Mayor Dave Ross noted it is "a great private-sector answer to predatory lending." Wisconsin is the only state that doesn't have regulations limiting predatory payday loans. The Good Money program was developed by Prospera CU in Appleton and earned national recognition and praise from Gov. Jim Doyle … * WORCESTER, Mass. (11/13/08)--Robert C. Taylor, 73, died Sunday at his home in Rutland, Mass. He was a vice president of GFA CU, located in Gardner, Mass., from 1994 to 2008 and had retired in April. Funeral services are 10:30 a.m. today at St. Patrick's Church, Rutland (Worcester Telegram & Gazette Nov. 11) …

CU earmarks 50 million for local government bonds

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RALEIGH, N.C. (11/13/08)--A credit union in North Carolina buoyed its support of local government by committing $50 million in investment funds for municipal bonds in the state. Local Government FCU, an $829 million asset credit union based in Raleigh, said that starting immediately, it is in the market to purchase municipal bonds from North Carolina's cities, towns and counties. The announcement comes as the national credit crunch and nervousness in the investment market has investors sitting on the sidelines, the credit union said in a press release. As a result, there is a lower demand for municipal investment instruments, which means key infrastructure projects in the state are delayed. The credit union said it has two purposes in earmarking the funds:
* It will be investing in ultra-sound investments that will complement its balance sheet; * It wants to encourage other institutional investors to return to North Carolina municipal bonds.
"Financial leadership will help keep North Carolina ahead of the economic crisis," said Maurice Smith, president of LGFCU. "For institutions that do business in North Carolina, we have an obligation to support our communities by showing diligent faith in our neighbors. North Carolina local governments have merited our confidence in their wherewithal to manage risk and attend to the needs of our citizens. Investing locally has appeal for us," he said. Government entities sell municipal bonds as a way to raise funds for public projects such as schools, courthouses, water/sewer infrastructure, roads and more.

100-year CU celebration website goes live

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MADISON, Wis. (11/13/08)--Historical information and campaign materials for the 100-year anniversary of credit unions is now available on a new website from the Credit Union National Association (CUNA). The year-long celebration marks the U.S. credit union movement’s 100th anniversary, along with the 75th anniversaries of CUNA and the signing of the Federal Credit Union Act. CUNA recently launched a public relations campaign and media outreach effort devoted to the anniversary celebration, how far the movement has come in a century, and where it is headed in the future. Campaign materials and additional resources were created for credit unions to use while promoting the celebration. At cuna.org/100years, credit unions will find:
* History--Including an interactive timeline and highlights from the past 100 years credit unions; * Video clip--CUNA President/CEO Dan Mica talks about credit unions’ 100 years of success; * Campaign materials--Credit unions can download free public relations and marketing materials, including a model speech, proclamation, celebration ideas, newsletter, press release, letter to the editor, logos, and ads to help promote the anniversary celebration; * Online store--Various promotional items and print materials for the celebration are available for purchase; and * Credit union stories and pictures--An area of the website was created for credit unions to share their pictures and stories.
“We couch the celebration in terms of the 100 years of growth and evolution that credit unions have undergone in order to continually improve service to members and further our tradition of People Helping People,” Mica said. “The website is just one of a number of activities that CUNA has planned for the celebration.” For more information, use the link.

Central California coast CUs weather downturn

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SAN LUIS OBISPO, Calif. (11/12/08)--Credit unions on California’s central coast are weathering an economic downturn in the area caused by a depressed housing market, troubled credit markets and mounting job losses. However, credit union presidents in the area said that avoiding risky loans such as subprime mortgages and adhering to conservative management practices have prepared credit unions to stay in good financial shape during the tough times (San Luis Obispo Tribune Nov. 8). While three of four credit unions surveyed in the area had net income declines year-to-date, credit unions serving San Luis Obispo County continue to experience strong deposit growth and remain well-capitalized--which prepares them for tough times, the newspaper said. Weaknesses in the broader economy have affected credit unions, Daniel Penrod, analyst for the California and Nevada Credit Union Leagues, told the paper. Even though credit unions did not offer risky loans, members may have gone elsewhere to obtain them, he added. In its 2008-2009 forecast, the Credit Union National Association (CUNA) predicted that credit quality would deteriorate this year because declining home prices and the mortgage credit crisis flowed over into the auto, credit card, student and business lending sectors, the paper said. CUNA also predicted an increase in delinquency rates to 1.08% from 0.93% in 2007, the article said. However, despite the U.S. economic slowdown, credit unions remain stable overall and should experience savings growth and loan growth this year and next year, CUNA said.

Maine CUs see car-loan slump as opportunity

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PORTLAND, Maine (11/12/08)--Maine has seen an exodus of national lenders willing to make auto loans. The state's auto dealers are turning to credit unions, among others, to help them through the auto-loan slump. Because Mainers who have fewer and more costly options for car loans, especially if their credit histories are stellar, credit unions are seeing opportunities, said Portland Press Herald (Nov. 9). One dealership, Lee Auto Malls, is relying on in-house financing and is forging new relationships with credit unions. According to owner Adam Lee, credit unions "are my new best friends. They want to loan money, they have members who buy cars, and I have a bunch of cars I want to sell." The article interviewed Louis Alexander, a postal worker who used a credit union loan to buy a used 2008 Jeep Grand Cherokee from an auto dealer in Portand. His credit was a little shaky but not poor. He could have received a loan from the dealer, but the monthly payment was too much, he said. His loan from ePort CU, Portland, is for $100 a month less than the dealer financing. The article noted that in today's lending environment, many banks see the auto loans business as more risky and less profitable, compared with commercial loans and home mortgages. Their departure coincides with GMAC's announcement that it would loan only to prime borrowers with credit scores above 700, said the article.

Tennessee CU works on gaining Hispanics trust

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KNOXVILLE, Tenn. (11/12/08)--At least one credit union in Knoxville, Tenn., must be doing something right to gain the trust of area Hispanics, who are notorious about their distrust of financial institutions. Holston Methodist FCU, a $21.8 million asset credit union, opened 191 accounts, mostly for Hispanic members, in the period from June 2007 to the end of October 2008, Stacy Johnson, Hispanic member development director with the credit union, told the Chattanooga Times/Free Press (Nov. 8). The increase of Hispanic clients has not been as dramatic at the area's banks, although the banks have seen some increases, said the article. Building trust between the community and financial institutions is a main priority for those working with Hispanics. "We want them to trust financial institutions so they will feel comfortable coming to our credit union and eventually to other institutions," Johnson told the newspaper. Hispanics have historically avoided traditional financial institutions because of losses in their home countries when banks closed. But because they carry around money, they are subject to robbers, burglaries and home invasions. The newspaper interviewed Ruben Torres outside the St. Andrews Center, where he went to ask about an assistance organization, La Paz de Dios. Instead, he got information about how to open an account at Holston Methodist FCU, which is housed in the same building as the center. He told the newspaper he's not sure about the institution because it's small and may disappear and he'd lose his money. But he said he would return to the credit union and make a decision on opening an account. He said he knows "it's the safest way to keep my money."

RMJ Foundation award winners announced

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SAN FRANCISCO (11/12/08)--San Francisco-based Mission SF FCU, Travis CU in Vacaville, Calif., and Timothy Allen of AltaOne FCU in Ridgecrest, Calif., received the 2008 Beacon Awards from the Richard Myles Johnson (RMJ) Foundation. RMJ’s Beacon Awards are the foundation’s highest honor.
The Golden 1 CU Leadership Scholars Program winners are, from left (front), Lynn Athens, Spectrum FCU, San Francisco; Christine Haley, Southern California Postal CU, Long Beach; Jon Hernandez, Mattel FCU, El Segundo, Calif.; and Gregg Stockdale, 1st Valley CU, San Bernardino, Calif. (Back), Michael Stremme, Palo Alto (Calif.) Community FCU; Adam Denbo, California Agribusiness CU, Buena Park; Stephen Serfozo, McClatchy Employees CU, Sacramento; and Eric Bruen, Desert Valleys FCU, Ridgecrest, Calif. (Photos provided by the California and Nevada Credit Union leagues)
2008 Beacon Award recipients, from left, with RMJ Foundation namesake, Richard Myles Johnson (in the middle)--Mission SF FCU’s Youth Credit Union Program representatives Jessica Leal and Celina Ramos Castro with Mission SF Community Financial Center Executive Director Margaret Libby; Travis CU Financial Education Officer Marlene Myers; and AltaOne FCU Community Education Specialist Timothy Allen.
The awards were presented at the fifth annual Beacon Awards Gala Reception, held Nov. 4 in San Francisco. The RMJ Foundation is the state foundation for credit unions in California and Nevada. The program is offered to small and mid-sized league-member credit unions in the two states. “This year was special because of all the varied and worthy entries,” said Marie Alonzo, chairman of the Beacon Awards nomination committee and board chairman of Arrowhead CU, San Bernardino, Calif. “The committee judges and the foundation would like to thank all the nominees for their work in providing quality financial education to young people.” The winner of the Beacon Award for a smaller organization was Mission SF FCU. The credit union was honored for its program, which targets youth from low-income and immigrant families, as well as those who use fringe financial outlets. It provides financial education and leadership development to its 450 youth members. The Beacon Award for a larger organization went to Travis CU for its multi-level financial literacy program, which reaches youth through financial literacy workshops at Travis Air Force Base and for its program on Cal Grants and Cash for College. The 2008 Beacon Award for an individual went to AltaOne Community FCU Education Specialist Timothy Allen. He developed a Substitute Teacher Program, where he volunteers as a substitute teacher and teaches the National Endowment for Financial Education curriculum, which meets state and national guidelines. He also presented the Mad City Money seminar to local high schools. Other finalists were: Bay FCU, Capitola, Calif.; L.A. (Calif.) Financial FCU; Meriwest CU, San Jose, Calif.; Sonoma County Grange CU, Santa Rosa, Calif.; and The Golden 1 CU, Sacramento, (organizational category), and Michelle Lawrence from American First CU, La Habra, Calif. (individual). The Beacon Award recognizes promising or exemplary financial education programs or projects that provide information to the broader credit union community and the general public. The 2008 recipients of the Leadership Scholars Program--offered by The Golden 1 Credit Union, in partnership with the RMJ Foundation--also were announced. Recipients included:
* Lynn Athens, CEO, Spectrum FCU, San Francisco; * Adam Denbo, CEO, California Agribusiness CU, Buena Park, Calif.; * Christine Haley, CEO, Southern California Postal CU, Long Beach, Calif.; * Jon Hernandez, CEO, Mattel FCU, El Segundo, Calif.; * Stephen Serfozo, CEO, McClatchy Employees CU, Sacramento; * Eric Bruen, CEO, Desert Valleys FCU, Ridgecrest, Calif.; * Gregg Stockdale, CEO, 1st Valley CU, San Bernardino, Calif.; and * Michael Stremme, CEO, Palo Alto Community FCU, Palo Alto, Calif.
The goal is to award scholarships each year to credit union staff with leadership potential. Applicants provide information on their tenure within the credit union industry, educational background, and how they plan to use the development their credit unions or careers.

Ohio CUs can help as payday-loan caps take effect

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DAYTON, Ohio (11/12/08)--Ohio might experience a shortage of payday lenders as a result of the passage of Issue 5--which reaffirms a new state regulation that limits the interest rate charged on cash advances. However, people needing short-term loans can turn to credit unions. According to Dayton Daily News (Nov.7), Issue 5 means that more payday lenders likely will close shop in the state, while consumers strapped for cash will still need short-term loans. One solution is credit unions that offer a stretch pay alternative to payday loans, the Ohio Credit Union League told the paper. Borrowers can get $250 or $500 at 18% annual interest rates through 120 credit union branches that offer stretch pay, said Becky Hart, Ohio Credit Union Foundation executive director. Hart said borrowers must pay off the balance every 30 days and be members of the credit union. If they have trouble paying off the debt, they can obtain budget counseling and personal financial education, Hart added. However, credit unions won't be the solution for everyone with cash problems. "We're not trying to be payday lenders, but we do know it's possible to offer small, short-term loans," Hart said. When the bill was signed into law this summer, 150 of the 1,600 payday lending locations in Ohio closed. After the election, Cashland announced it would close one-third of its 139 locations in Ohio. Advance America, another payday lender, may close if its small loans are unprofitable. Payday lenders charged 391% annual interest rates. The new law limits interest rates on the loans to 28%.

IWall St. JournalI Local CUs an option for borrowers

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NEW YORK (11/12/08)--The Wall St. Journal Tuesday noted credit unions as an option for borrowers seeking small business loans. The Journal told the story of Amy Loera, who wanted to expand her family’s Mexican restaurant. After being turned down by nine banks for loans, Loera received a $643,000 loan from Arrowhead CU, San Bernardino, Calif. Jon Parks, Arrowhead CU vice president, said Loera’s loan was approved because the family showed it had experience managing restaurants and proved its restaurants were successful. The new location is being planned as an affordable family restaurant, which will help it succeed in today’s economy, he added. The credit union looks for strong credit scores, but cash flow often trumps that, he said. Loera’s business had a credit score of 750, was debt-free, and the restaurant was able to predict how much money it would make in the next year. These factors didn’t matter to any of the banks--but it did matter to Arrowhead, Leora told the paper. Parks said his institution looks at the outlook of the overall industry when approving loans. Some businesses may do well despite a tough economy because they offer a niche, he added. Sandy Baruah, acting administrator of the Small Business Administration, told the paper that larger financial institutions rely on credit scores. Community institutions look at the business plan and make a decision based on their comfort level with the business plan and presentation, though credit scores still matter, Baruah said.

Mass. CUs lobby summit for inclusion in rescue plan

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BOSTON (11/12/08)--Massachusetts credit unions met with state House Speaker Sal DiMasi and other lawmakers to discuss concerns about the $700 billion rescue plan for the financial system. The rescue plan would pump billions of dollars into big banks, giving them financial room to devote funds to marketing and lowering interest rates for loans, while credit unions and community banks would be put at a competitive disadvantage, they told the Boston Herald (Nov. 11). Dan Egan, president of the Massachusetts Credit Union League, said "credit unions don't have access to that money. The larger banks can do what they want with that (federal) capital. It makes them stronger." Treasury Secretary Henry Paulson is earmarking billions of dollars for the nation's largest banks to push lending, even though some of them are not in peril, Egan told the newspaper. As a result, smaller banks and credit unions are in a "disadvantageous position" because they can't access the bailout funds, he said. DiMasi's "economic summit" meeting was with financial institutions and insurers. DiMasi told the Herald local financial leaders there made it clear that distribution of bailout funds should include smaller institutions, even those that are financially healthy.

CU System briefs (11/11/2008)

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* HARRISBURG, Pa. (11/12/08)--Lancaster (Pa.) Red Rose CU used a grant from the Pennsylvania Credit Union Foundation to open a Latino branch at Lancaster's Puerto Rican Cultural Center on Nov. 6 (Life is a Highway Nov. 7). The branch is part of a strategy of the Lancaster Consortium--a group of six credit unions--that has included opening two branches in Latino areas of Lancaster in the past two months. The consortium has invested over $250,000 in Lancaster's Latino community in the past three years, with support from credit unions, the National Credit Union Foundation, and the Pennsylvania foundation. From left are Abby Achey, CEO of the credit union, Lancaster Mayor Rick Gray, and Moe Rodriguez, director, Puerto Rican Cultural Center. (Photo provided by the Pennsylvania Credit Union Association) … * RICHMOND, Va. (11/12/08)--One of two suspects accused of a series of after-midnight shootings March 27 along Interstate 64 between Albemarle and Waynesboro, Va., was sentenced Monday to two years in prison. Slade Allen Woodson, 20, still has 15 felony counts pending against him in Albermarle. Woodson and Brandon Dawson, 16, had been drinking when they began shooting into cars, at property--including a building and car at DuPoint Community CU--and into houses. Two motorists were slightly injured. No one was inside the credit union at the time. Dawson was convicted as a juvenile and ordered to spent 180 days at the Blue Ridge Detention Center. Woodson received seven years each, with five years suspended, for two counts of shooting into an occupied building and three counts of shooting from a vehicle. He was also sentenced to five years--with three years suspended--for felony destruction of property. Woodson is to serve two years for all six counts concurrently (Richmond Times-Dispatch Nov. 11) … * SAN DIEGO (11/12/08)--Mission FCU has selected Debra Schwartz as president/CEO. Schwartz had been serving in the dual role as interim CEO and executive vice president since April, when former president/CEO Ron Martin retired (Post-Journal Nov. 9). Schwartz has more than 25 years of financial leadership experience. Prior to joining Mission Federal, Schwartz served in senior executive positions at First Future CU and as executive vice president of San Diego County CU … * BIRMINGHAM, Ala. (11/12/08)--More than 400 credit union professionals, guests and vendors attended the Alabama Credit Union League's fall Development Conference in Biloxi, Miss., to discuss issues facing credit unions today and in the future. Opening General Session speaker Albert Mensah spoke on "Every Day is an Opportunity," and the first day's Closing General Session speaker, Chuck Clay, partner in Brock, Clay, Calhoun & Rogers P.C., discussed "The Impact of the Election Results." The conference's closing General Session featured Pat Williams, senior vice president of the Orlando Magic, discussing "The Seven Principles of Leadership." League President/CEO Gary Wolter noted that "continuing education is the key to helping our credit unions weather the current economic storm and come out on top." …

Filene studies consumer debit-credit behavior

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MADISON, Wis. (11/12/08)--A new study from the Filene Research Institute aims to track transaction choices consumers make between using debit and credit and
information on consumer characteristics such as income and creditworthiness. “Debit vs. Credit: How People Choose to Pay,” by Victor Stango, University of California-Davis, and Jonathan Zinman, Dartmouth College, uses behavioral economics to try and understand how people make economic decisions. The study found that:
* Most people “single-home,” using nearly all debit or all credit for retail purchases; * Purchase characteristics, such as transaction size, influence their payment choices, but there is a clear propensity to use debit, which varies across consumers and is stable over time. It also is easy to classify people as “debit” or “credit” users; * While there are only small differences in income and total spending, debit users tend to be less creditworthy than credit users, and their credit cards have higher interest rates. * Persistent debit card use is not fully explained by the most important economic factor that should affect the costs of debit vs. credit--carrying a credit card balance; * Credit users pay less in account fees than debit users; and * Debit is a useful way to moderate overall spending.
“Credit unions looking for ways to better understand member behavior will find this report extremely useful,” said George Hofheimer, Filene chief research officer. “The findings give credit unions a lot to think about it terms of segmentation, member behavior, product development and the concept of consumer behaviors. “Across demographic segments, many consumers rely on only one payment choice. This creates an opportunity for credit unions to broaden their thinking about how to segment their membership,” he added.

NCUF grant helps 100 CDCU leaders

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NEW YORK (11/11/08)--A $35,000 grant from the National Credit Union Foundation (NCUF) will enable at least 100 board members and management from community development credit unions (CDCUs) to attend CDCU Institute courses this year. Designed in 1999 by the National Federation of Community Development Credit Unions in partnership with the Credit Union National Association’s Center for Professional Development, the annual institute provides a forum for CDCUs to “acquire professional skills needed to increase membership, expand products and services, and strengthen net worth.” NCUF has approved $370,000 in grants for the CDCU Institute the past four years. These grants have helped the federation:
* Offer a week-long institute in Madison, Wis., and short courses on affordable mortgage lending, in Chicago and Durham, N.C.; and * Expand the curriculum to include short-course modules on succession planning, affordable mortgage lending, and the credit path.
The grant will help the federation continue to expand the institute. For example, Education and Training Director Pamela Owens said the federation is incorporating a housing counseling module into the curriculum. “We also plan to develop short courses to help large credit unions that have recently expanded their fields of membership into low-income communities to turn these potential members into active members,” Owens added. The grant also will help offset the costs of small credit unions’ scholarships and travel. “Despite powerful evidence that the institute can help small credit unions survive and thrive, the cost of attending is beyond the means of many CDCUs--particularly those serving severely distressed communities,” Owens said. This is the ninth of 14 Innovation Grants to be approved by NCUF in 2008. Innovation Grants are made possible by investors in the Community Investment Fund.

WOCCU seeking presentations for World CU conference

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MADISON, Wis. (11/11/08)--The World Council of Credit Unions (WOCCU) has issued its formal call for presentations for the credit union movement's only global event, which will be held July 26-29 in Barcelona, Spain. Anyone who has a concept, technique or strategy that would improve credit union performance on a global scale should consider presenting that idea to nearly 2,000 of the world's top credit union leaders during WOCCU’s 2009 World Credit Union Conference. “Our goal is to uncover the best new ideas and the most creative thinking possible to help credit unions everywhere better face the mounting challenges posed by a struggling global economy,” said Pete Crear, WOCCU's president/CEO. “We know from experience that many of those ideas originate at the grassroots level and we want to tap that expertise for the good of credit unions and their members around the world.” Educational tracks at the conference will focus on four themes:
* Developing credit union movements; * Finance and operations; * Strategy and leadership; and * Sustainability.
Individual sessions will cover best practice applications, strategic development, innovative solutions and emerging issues. Credit union and other industry experts with innovative ideas and approaches to share are encouraged to apply for speaking opportunities at the conference. The session formats, 90 minutes in length, can take the form of lecture, panel discussion, benchmark or industry studies or case studies. Topic ideas will be evaluated in terms of appropriate educational content, originality and for subjects important to end-users. Topics previously presented at past World Credit Union Conferences will not be considered. A demonstrated experience in public speaking is preferred. The deadline for proposal submissions is Dec. 31. For more information or to submit a session proposal online, use the link. Companies not interested in presenting can still financially support educational sessions at prices beginning at $2,500 per session. For more information, please contact Sue Sabatke, WOCCU's conference and special events manager, at (608) 395-2089 or e-mail

Survey CUs still free checking leaders

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MADISON, Wis. (11/11/08)--Credit unions are still the free checking leaders--so much so that many banks have switched to free-checking institutions to remain competitive--says the just-released 2008-2009 Credit Union Fees Survey from the Credit Union National Association (CUNA). According to the survey, 80% of credit unions offering checking accounts provide at least one free checking account with no minimum balance requirement and no maintenance or activity fees, up from 65% in 2000. Another 7% offer free checking with other services or club memberships. However, banks have increased their offerings in this area to remain competitive. In 2000, 28% of banks offered at least one free checking account compared with 68% in 2007, according to Bankrate’s Checking Study. While it may appear on the surface that banks have realized the importance of offering customer-centered products and services, many financial institutions have turned to no-fee checking to increase the number of checking accounts they hold, to increase their earnings from fee income. Bank fees--including fees from commercial customers--represent nearly 50% of banks’ total income, according to current estimates. In comparison, only 12% of credit union income came from fees in 2007, according to CUNA reports and National Credit Union Administration Call Reports. “Traditionally, fees have been a point of differentiation between banks and credit unions as credit unions tend to focus on maintaining a minimum number and amount of fees in comparison to banks,” said Kristina Grebner, CUNA director of research and advisory services. “These practices and the reputation credit unions have as consumer advocates provide them with a competitive edge--and the media has really zeroed in on credit unions’ pro-consumer advantages in the current economic crisis.” Numerous fee types and account structures have been documented and analyzed for credit unions of all sizes in the following areas:
* Share draft/checking programs; * ATM and debit cards; * ATM surcharges; * Non-sufficient funds/overdraft protection programs; * Automated clearing house; * Foreign and domestic wire transfers; * First-mortgage applications and closing costs; * Member business loan applications and commitments; * Commercial real estate commitments; * Non-member check cashing; * Credit cards, and * Internet banking and bill payments.
The report reveals the percentage of credit unions that offer a certain product and the overall percentage that charge a fee for that product, and distribution of fee income by source. Also, the report includes the average, maximum, and range of amounts charged by credit unions, along with the number of free transactions before a fee is charged. The data tables are broken down by asset size and by region for peer comparison purposes. The report is available in both hard copy and PDF format. For more information or to order a copy of CUNA’s 2008-2009 Credit Union Fees Survey online, use the link.

CUs are well-capitalized safe harbors paper says

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FORT WORTH, Texas (11/11/08)--Credit unions nationwide have not been as severely impacted as other financial institutions by the economic problems hitting the U.S. this year, due to their conservative nature and relatively high levels of capitalization, according to a Monday article in the Fort Worth Business Press. Because credit unions are not motivated by profits, they don’t have the same pressures as stock organizations, Dick Ensweiler, president/CEO of the Texas Credit Union League, told the newspaper. Therefore, credit unions can take a long-range view as to what is in the best interest of their members and make future plans accordingly, he added. In talking to member credit unions statewide, Ensweiler found they are doing well for the most part because they are well-capitalized at an average rate of 11%, he said. Although a few credit unions in California and Florida went though some difficulties because real estate values are plunging, most credit unions are not heavily involved with mortgage loans, Ensweiler told the paper. However, those credit unions that were funding mortgages experienced trouble, he added.

CUNA Mutual Diversity key to non-interest Income

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SAN FRANCISCO (11/11/08)--Despite the economic challenges facing every aspect of the financial services sector, opportunities to survive and thrive through non-interest income continue to exist for credit unions, an industry analyst said.
Despite economic challenges, opportunities to survive and thrive through non-interest income continue to exist for credit unions, Bob Larson, financial support consultant for CUNA Mutual Group, told the California and Nevada Credit Union Leagues Friday at their annual meeting. (Photo provide by CUNA Mutual Group)
The key is minimizing exposure to one major source of non-interest income by diversifying--and maximizing--the income mix, according to Bob Larson, financial support consultant for CUNA Mutual Group. Larson delivered that message Friday to members of the California and Nevada Credit Union Leagues at their annual meeting. While Larson advocates a diversified approach to non-interest income, he acknowledged the lack of available choices and the potential changes to the three primary sources: non-sufficient funds and courtesy pay, debit card interchange income, and credit card interchange income. “One of the biggest concerns I see is action regarding the three primary non-interest income sources that could negatively impact your income,” Larson said. “I think the current economy has delayed action on these items, but they will resurface next year.” Larson referenced proposed legislation that would impact interchange income by giving merchants the ability to negotiate the fees they pay. Most credit union members and workers can remember the impact to their debit card interchange income in 2003 because of a Wal-Mart lawsuit, he said. “I worked for a credit union at the time, and we experienced a decrease of about $15,000 per month for an annual impact of $180,000,” Larson said. “The first step is to understand the impact to your income statement. What would happen if you had a 10% reduction in these primary income sources?” One way to ensure non-interest income sources are protected is to add more options to the mix, especially in light of the possible legislative challenges, he said. Developing a successful sales culture around credit protection, Guaranteed Asset Protection and debt protection products can grow income while expanding a credit union’s culture. “There are three key components for a successful sales culture--communication, accountability and tracking,” said Larson. “A credit union I worked with adopted this culture and continues to grow.” Larson suggested credit unions take advantage of the current environment by growing their real estate portfolios. Some credit unions are “picking up market share” by adding to their mortgage business. Other sources that don’t add expenses to the income statement include Accidental Death & Dismemberment, Members Auto & Home and Life, he said. “Some might not generate large amounts of non-interest income, but did you know that 10 of the largest auto insurance companies control 60% of the market, and eight of those 10 have a bank affiliation?” he said. “They’re successful using the insurance database to capture auto loans for the banks. So it impacts not only non-interest income, but also interest income as well.” Because identifying and securing non-interest income sources are critical to a credit union’s success, Larson advocates establishing an internal fee committee that examines possible sources and how to maximize them. “I know some people balk at this suggestion, but making it a priority can’t hurt,” he said.

NY Times notes CUs check-cashing venture

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NEW YORK (11/11/08)--The New York Times Sunday noted Kinecta FCU’s check-cashing program, which the credit union purchased from Nix Check Cashing of Carson, Calif., about one year ago. After the purchase, Kinecta acquired 53 Nix stores and brought 1,500 Nix customers into its membership (News Now Aug. 18). The goal of the purchase was to bring financial services to the underserved, the credit union said. “We were trying to understand why check cashers have been successful in underserved areas where banks haven’t,” Kinecta President/CEO Simone Lagomarsino told the newspaper. Kinecta concluded that most financial institutions didn’t understand low-income neighborhoods, the Times said. For the full article, use the link.

30 under 30 group shares 10 strategies

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SAN FRANCISCO (11/11/08)--The Filene Research Institute’s 30 Under 30 group of young professionals shared 10 strategies for credit unions at the California Credit Union League’s annual convention last week to better serve young adults.
Filene Research Institute’s 30 Under 30 group presented 10 strategies for credit unions to better serve young adults at the California Credit Union League’s annual meeting last week.
“The range of ideas and the rigor with which the groups prepared were absolutely fantastic,” said Mark Meyer, Filene CEO. The ideas were presented to executives and volunteers at the convention. Best in Show was awarded to Dustin Allen, Weber State CU, Ogden, Utah; Robin Hickey, First Financial FCU, Wall, N.J.; and Matthew Prosneski, Travis CU, Vacaville, Calif., for “Change Your Savings.”
Three individuals from Filene Research Institute’s 30 Under 30 group received a Best in Show award for their presentation, “Change Your Savings.” From left are Robin Hickey, First Financial FCU, Wall, N.J.; Dustin Allen, Weber State CU, Ogden, Utah; and Matthew Prosneski, Travis CU, Vacaville, Calif. (Photos provided by the Filene Research Institute)
“Change Your Savings” shows how a family can use a debit product to save for a child’s college education and cross-sell credit union accounts. Runners-up went to Mike Escudero, University of Southern California; Jill Jarman-Nowacki, Credit Union House, Washington, D.C.; Brandi Melo, Rocky Mountain CU, Helena, Mont.; and Chad Warneke, Oregonians CU, Portland, Ore., for “Cure Card.” Cure Card allows credit unions to offer one branded card that pays a portion of interchange income to a worthy cause. All 10 of the plans will be available at www.filene.org.

PCUA plants MBL info for landscapers

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HARRISBURG, Pa. (11/11/08)--The Pennsylvania Credit Union Association (PCUA) sent information about credit unions to the Pennsylvania Landscape and Nursery Association after staff heard landscapers and nursery owners were struggling to get loans for equipment. PCUA sent a letter mentioning credit unions and their desire to help businesses through member business loans (MBLs) and deposit services (Life is a Highway Nov. 11). As of June 30, 6% of Pennsylvania credit unions offered MBLs with an average loan size of $137,483. Nationally, credit unions originated $6.5 billion in business loans during the first six months of 2008. MBLs at credit unions are up 36% from what they loaned during the first six months of 2007, Credit Union National Association Chief Economist Bill Hampel told Business Week recently.

MDDCCUA CUs well-positioned for advocacy work

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COLUMBIA, Md. (11/11/08)--Credit unions in Maryland and the District of Columbia are well-positioned for advocacy work, said the Maryland and District of Columbia Credit Union Association (MDDCCUA)’s political consultant, Jeff Trammel, during a conference call hosted by MDDCCUA last week. Trammel hosted the call with MDDCCUA President Mike Beall, and advocacy staffers Jennifer Porter Gore and Aaron Glaser. The call focused on the outcome of this year’s elections and their effect on credit unions. Credit unions are in the enviable position of having key leaders in Congress, and have a good track record of attaining 100% for regulatory reform legislation in the past Congress, he added (Focus Newsletter Nov. 10). However, “there is a new ball game, and a different set of issues. The economy will be the prism through which everything else is seen,” Trammel said. All seven Maryland incumbent members of the House of Representatives were re-elected to their seats. Rep. Eleanor Norton (D-D.C.) also was re-elected. Rep. Frank Kratovil (D) was elected to the House of Representatives in Maryland’s 1st Congressional District (The New York Times Nov. 8). Credit unions will have to educate him, Trammel said. With changes in Congress, credit unions will have to “reset” discussion with lawmakers and staff, Trammel said. They also will have to “put the shoulder to the wheel” to educate the 111th Congress, he added.

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.

Malware steals log-on data to accounts

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NEW YORK (11/7/08)--The log-ons to more than a half million bank, credit and debit card accounts have been stolen over the past two-and-a-half years by a single cyber crime group using a Trojan horse spyware that "morphs" to avoid detection. News Now could not determine whether these included credit union members' accounts. Researchers at RSA Security Inc.'s FraudAction Research Lab discovered the stolen data while they were tracking the Sinowal Trojan horse, also known as Mebroot and Torpig. They tracked the spyware to a drop server that contained the stolen data (Computerworld Oct. 31). RSA investigators found more than 270,000 online banking account credentials, plus about 240,000 credit and debit account numbers and other personal information lifted from Microsoft Windows PCs (WashingtonPost.com Oct. 31). According to Sean Brady, product marketing manager at RSA's ID and access assurance group, the length of time the spyware has been maintained by a single group and the scale of the theft is "very unusual." The Trojan horse malware has been active since at least February 2006. Once on a system, the malware waits for the user to enter the address to an online bank, credit card company site or another financial URL. It then substitutes a fake address. The malware is triggered by more than 2,700 specific Web addresses, a much larger number than other Trojan horses, said Brady. The fake sites collect the log-on usernames and passwords to banks and other financial institutions. They trick users into disclosing information legitimate financial institutions would never collect online, such as Social Security numbers. They transmit the pilfered data to the drop server. RSA Security said it suspected the group responsible is based in Russia. The malware was distributed globally, but Russia was the one region that had no infections.

CUs continue to report phishing scams

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MADISON, Wis. (11/7/08)--More credit unions are reporting their members and nonmembers are being text messaged, phoned, and e-mailed with phishing scams seeking account information. Gesa CU, Richland, Wash., and police in four area communities reported a number of complaints from people about cell phone text messages sent Nov. 1. The messages, which went to members and nonmembers, said their credit union accounts had been closed and they needed to call a 509 area code number to provide personal information to reactivate the card. Because it was a Saturday, Gesa sent extra staff to its call center to handle the volume, Christina Brown, president/CEO, told Tri-City Herald (Nov. 2). The credit union and others have been periodically targeted by scammers since the beginning of the year. In previous scams, scammers called people randomly and claimed their credit or debit card had been canceled and needed reactivating. Four credit unions in Ohio were targeted in phone scams and e-mails the past couple of weeks, according to the Ohio Credit Union League (eLumination Newsletter Nov. 5). Two Heath, Ohio-based credit unions were targeted this week. Harvest FCU was flooded with reports about a phone scam Tuesday afternoon. Members and nonmembers received automated calls telling them their credit card account had been suspended because of third-party usage. The caller asked the recipients to input their card number (Newark Advocate Nov. 5). On Wednesday, a phone scam purporting to be from Hopewell FCU began circulating. Recipients were told their accounts had been suspended and to call a phone number to reactivate their account. On Oct. 29, a phishing e-mail purporting to be from Lagrange, Ohio-based Sun Center FCU told recipients their account was suspended temporarily due to a billing failure. They were to go to a bogus website and complete an account update to unlock the account. An automated phone scam Oct. 23, targeted Kenton, Ohio-based Hardin Community FCU. Consumers called were told to call an 866-area code number to reinstate their accounts. In Bowling Green, Ky., county residents received recorded calls on Sunday and Monday with a message that their credit card had been compromised and to "press one" to speak to the security department. The calls purported to be from Southeast Financial Credit Card Co. There is no such company, but there is a Southeast Financial CU in the neighboring state of Tennessee, said the Bowling Green Police Department (The Daily News Nov. 4). All the credit unions told consumers they would not phone or e-mail asking for such information.

Leagues analyze state election results

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MADISON, Wis. (11/7/08)--Results are coming in after Tuesday elections, and credit union leagues are reporting their successes. The Ohio Credit Union League reported that Democrats will take the majority in the state House of Representatives. Future legislation will require more bipartisan cooperation, said John Kozlowski, general counsel at the Ohio Credit Union League (eLumination Newsletter Nov. 6). Credit union-backed candidates elected include: Denise Driehaus (D), Cheryl Grossman (R), Kris Jordan (R), Peggy Lehner (R) and Margaret Anna Ruhl (R). State Treasurer Richard Cordray was elected Ohio Attorney General. The league has a good relationship with him, Kozlowski said. “The Ohio Credit Union League looks forward to working with the leadership, general assembly and administration to make Ohio better for its citizens and the ability of our credit unions to make more of their products and services available throughout Ohio,” Kozlowski said. As Pennsylvania credit unions celebrated the re-election of credit union friend U.S. Rep. Paul Kanjorski (D), the original sponsor of the Credit Union Regulatory Improvements Act (CURIA), the Pennsylvania Credit Union Association (PCUA) also addressed credit unions’ success in state-level elections. Rob McCord, Credit Union Better Choice enthusiast, defeated Tom Ellis for state treasurer. Long-time credit union supporters state Reps. Dan Surra (D-75) and Vince Biancucci (D-15) were defeated by their Republican challengers (Life is a Highway Nov. 6). PCUA also thanked credit union advocates for volunteering their time to support candidates. Texas credit unions had a 96% success rate in the state elections. Results of the Texas races are preliminary--as of press time, 40 precincts were still due to report. John Culberson (R-Houston), a CURIA co-sponsor, and Michael McCaul (R-Austin) were “candidates to watch,” according to the Texas Credit Union League. Both retained their seats. Unofficial results in Maine indicate 90% of the 88 candidates endorsed by the Maine Credit Union League were elected. In the Senate, 27 of the league's 28 endorsed candidates won. In the House, 51 of 60 endorsed candidates were elected. Two members of the legislature are also credit union board members--Rep. Herbert Clark, Katahdin FCU, Millinocket;,and Michael Lajoie, Lewiston Municipal FCU, Lewiston. "We have great friends from both parties in the legislature so we anticipate strong support for our issues and positions in the upcoming session," said John Murphy, Maine league president.

Dort FCU to give away two homes for holiday season

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GENESEE COUNTY, Mich. (11/7/08)--Dort FCU plans to give away two homes to needy families this holiday season. Every year, the $366.3 million asset, Flint, Mich.-based credit union’s board of directors tries to find ways to give back to the community, and this year it decided to help two needy families in a big way (The Flint Journal Nov. 5). The credit union is excited to help out in tough economic times by providing a ray of hope, Dort spokeswoman Jenny Ludwigsen, told the newspaper. The Flint-area homes--a 1,800 square-foot ranch and a 1,000 square-foot, three-bedroom house--are credit-union owned properties. The credit union is looking for families that have a need for housing, are capable of maintaining a home, and are enthusiastic about being a homeowner, Ludwigsen told the paper. Families must apply for the homes by Nov. 26. After local charitable organizations narrow the list of applicants to 10 finalists, the winners will be chosen in a drawing Dec. 22. The properties will be mortgage-free, but winners must complete home-ownership and financial classes through a local housing partnership.

Iowa CUs to sponsor presidents fin-lit forum

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DES MOINES, Iowa (11/7/08)--Iowa credit unions will participate in and sponsor “Financial Literacy in the Heartland,” a special listening forum hosted by members of the President's Advisory Council on Financial Literacy. More than 70 financial literacy leaders throughout the state have been invited to attend the event Tuesday in Des Moines. The Iowa listening session will be convened by Tahira Hira, Ph.D., Iowa State University professor of personal finance and consumer economics, who serves on President Bush's Advisory Council and the Iowa Credit Union Review Board. The forum is sponsored by the Iowa Credit Union League (ICUL), Greater Iowa CU, Ames, and the Iowa State University College of Business and College of Human Sciences. ICUL will provide a testimonial about how credit unions are improving their members’ financial literacy and what can be done in the future, both at a state and national level, to help consumers become more financially self-sufficient. “Iowa credit unions are advocates for increasing financial literacy, not only among members but our broader communities,” said Patrick S. Jury, president/CEO of ICUL. “Financial literacy is a core component of Iowa credit unions, and we continue to incorporate it into everything that we do.” Last year, ICUL helped pass legislation that requires Iowa K-12 schools to adopt “core curriculum standards” for financial education. Specifically, the legislation requires that financial literacy courses are offered that include money management skills, spending plans, decision-making skills to analyze debt incurrence and management, and saving and investing as applied to long-term financial security. Also, the Iowa Credit Union Foundation implemented the state’s first credit union Individual Development Account program, which teaches adults the value of saving and the impact an asset purchase can have on their financial position. The 16-member President's Advisory Council on Financial Literacy (see link) was created in January by President Bush to assist Americans with financial matters. The president and Treasury Secretary Henry Paulson have asked the council to work with public and private sectors to help increase financial education efforts for all Americans. Members of the council are hosting listening sessions with financial literacy leaders nationwide. “The information gleaned from these meetings may be applied toward the advisory council’s recommendations to the U.S. Treasury Department and ultimately to the president,” Hira said. Dan Iannicola Jr., deputy assistant secretary for financial education, U.S. Treasury, will moderate the session.

Voters in Ohio keep payday loan cap at 28

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CLEVELAND, Ohio (11/7/08)--Ohio residents voted Tuesday to uphold Issue 5, a referendum to uphold a law that limits payday loan interest rates in the state at 28%. The law had been challenged by the payday lending industry. About 64% of voters were in favor of keeping the cap. Issue 5 limits payday loans to $500, and lenders are required to give borrowers 30 days to repay the loans. Borrowers are allowed only four payday loans per year. A state database also will be created so that lenders will not unknowingly grant more payday loans beyond a consumer’s limit (News Now Nov. 5). 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 directly affect credit unions. However, some credit unions were supportive of the measure. If Issue 5 hadn’t passed, payday lenders would have been allowed to charge borrowers 391% interest rates.

Ohio league moves next week expects outages

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DUBLIN, Ohio (11/7/08)--The Ohio Credit Union League's move next week to new headquarters nearer the State Capitol will result in some temporary outages of services from Monday through Wednesday, the league said Wednesday. No serious interruptions are expected, the league said (eLumination Newsletter Nov. 5). The league's phone system will be unavailable from 5 p.m. Monday to 8 a.m. Wednesday, when the league reopens after the Veterans Day holiday. The Compliance Hotline will be unavailable from noon Monday to noon Wednesday. However, InfoSight, the league's online compliance library, will be available without interruption (use the link). The league's website and e-mail also will be down from noon Monday to Wednesday. Although the league is changing physical locations, its phone numbers, e-mail addresses and website will remain the same.

WOCCU asks G-20 to recognize CUs stability

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MADISON, Wis. (11/7/08)--Credit unions and financial cooperatives worldwide have been islands of relative safety in a struggling global economy, and the World Council of Credit Unions (WOCCU) wants attendees at the Group of 20 (G-20) Global Financial Summit to acknowledge that fact and act appropriately to stem the current crisis. President Bush will host a meeting of the G-20, an organization of major industrial and emerging-market countries, in Washington, D.C., Nov. 15 to further financial reform negotiations among world leaders. WOCCU made its voice heard last week by submitting a letter to the finance ministers of participating countries, asking that the strength and safety credit unions and financial cooperatives provide their members be acknowledged. It also asked that cooperatives not be included in inappropriate legislation or regulations that may restrict the practices that give member-owned institutions their strength and capability to serve. In his letter, Pete Crear, WOCCU president/CEO, requested that three distinct steps be taken during the summit:
* Any future financial rescue packages implemented at global or national levels must be unbiased against cooperative financial institutions relative to the commercial banking sector; * Cooperative financial institutions must be recognized in any pronouncements emanating from the summit as secure, locally owned financial institutions that have presented safe and sound financial alternatives during the current crisis; and * Future regulations or legislation that may result from this crisis clearly recognize that cooperative financial institutions have not been the source of these problems, have been significantly less affected by the economic fallout, and should not be punished by inclusion in a series of new rules designed to correct a problem they have not caused.
“We believe strongly that cooperative financial institutions must be consulted prior to any regulatory actions that may affect them and we urge you to make this step a permanent part of your protocols,” Crear wrote. The letter was submitted to G-20 finance ministers Oct. 31. Use the link to access the letter. Established in the wake of the emerging markets financial crisis of the late 1990s, the G-20 is an informal forum that promotes open and constructive discussion between industrial and emerging-market countries on key issues related to global economic stability. The G-20 includes Argentina, Australia, Brazil, Canada, China, France, Germany, Great Britain, India, Indonesia, Italy, Japan, Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the U.S. and the European Union.

Kansas CUs in good position to help members--Schenk

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WICHITA, Kan. (11/7/08)--Kansas credit unions are in a good position to help members with credit and other needs, a Credit Union National Association (CUNA) economist told a group of credit union executives in that state. Mike Schenk, CUNA chief economist, addressed 40 credit union executives Wednesday at the Kansas Credit Union Association’s Economic Outlook in Wichita (The Wichita Eagle Nov. 6). Schenk told the group he expects housing inventories to remain high nationwide, housing values to continue to fall, and the U.S. economic slump to continue into 2009. However, through the first half of 2008, Kansas credit unions experienced faster savings growth and loan growth than credit unions nationwide. Kansas credit unions also have had higher earnings and net worth, although those measures are starting to slightly decline, Schenk told the group. “You are a lot different than the rest of the credit union world,” Schenk told the group. The reason is that Kansas was not affected by the burst of the housing bubble, and the state did not experience much negative impact from the subprime lending meltdown, he added. “While the world is contracting, we are growing,” Schenk told the credit union leaders, and that is why credit unions are well-positioned to help members obtain credit with other needs. This, in turn, will lead to a strengthening for the credit unions’ relationships with members, he said.

CU System briefs (11/06/2008)

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* HARRISBURG, Pa. (11/7/08)--The role of credit unions in the current wild economy was the topic for the latest segment of Pennsylvania Newsmakers (Life is a Highway Nov. 6). From left are host Dr. Terry Madonna; Jay Murray, president/CEO of Mid-Atlantic Corporate FCU; and Mike Wishnow, senior vice president of the Pennsylvania Credit Union Association (PCUA). They discussed current economic conditions and explained how credit unions provide a safe harbor for consumers with services that will help members during difficult times. The program, part of PCUA's monthly financial education sponsorship, will air Nov. 16, 17, 18, 19, 22 on television stations across the state (Photo provided by the Pennsylvania Credit Union Association) … * HELENA, Mont. (11/7/08)--The Montana Credit Union Network has hired Clyde Dailey as director of government relations. Based in Helena, Dailey will work with credit unions in Helena and across the state to raise awareness of credit unions and bolster their influence with state decision makers. Most recently, Dailey has held several positions with AARP, including associate state director for advocacy and communications in Montana, stte director for Idaho AARP, and associated regional director for the organization's 11-state Midwest region. Earlier, he worked with the Montana Insurance Department in consumer outreach and lobbying … * URBANA, Ohio (11/7/08)--Wright-Patt CU, based in Fairborn, Ohio, completed its merger with Grimes CU in Urbana, Ohio, on Nov. 1, the $1.3 billion asset credit union announced. Grimes' board approached Wright-Patt after determining it needed to expand services and product offerings to meet members' growing needs. Wright-Patt will maintain an office in Urbana, initially at the Grimes CU location, and then move to a more convenient, member-focused office with an ATM on State Route 36 in front of Wal-Mart … * GRAND JUNCTION and GREENWOOD VILLAGE, Colo. (11/7/08)--Greater American Community CU, based in Grand Junction, Colo., and Greenwood Village-based Bellco CU are merging (Financial Deals Tracker Nov. 5). Bellco, the largest credit union in the Denver area, has nearly $2 billion in assets, while Greater American has $22.1 million assets. The merger will increase Bellco's branch network to 17 (Denver Business Journal Nov. 3) … * BURLINGTON, Vt. (11/7/08)--A man with five prior bank robbery convictions was sentenced Oct. 29 in the U.S. District Court in Rutland to 13 years in prison for the Jan. 22, 2007, robbery of Opportunities CU in Burlington, Vt. In addition to the term, Peter K. Holland, 55, will serve three years under supervised release after he is released from prison. He also was ordered to repay $6,220 taken in the robbery. The previous robberies occurred in Vermont and Arizona in the 1980s (States News Service Oct. 29) …

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.

CUs offering ways to save through economy

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MADISON, Wis. (11/5/08)--With consumers reviewing household budgets and hunkering down to weather a possibly long recession, credit unions are trying to make it as easy as possible for their members to save. At least two are providing special promotions taking the economy into account. Georgia's largest credit union, Delta Community CU, Atlanta, introduced a 12-month StandingStrong CD with what it says is one of the market's highest annual percentage yields (APY)--4.50%. That compares with the nation's one-year CD average of 3.59%. The certificate has a minimum deposit of $1,000 and there's no cap on the amount. All deposits are insured by the National Credit Union Administration's (NCUA) NationalCredit Union Share Insurance Fund. "Our strong financial position allows us to offer a safe, secure short-term growth product at an attractive rate," said Rick Foley, president/CEO, in a press release (MarketWire Oct. 31). "It is exactly what consumers are looking for in light of their loss of confidence in the stock market and retirement funds." He noted the deal has the best of both worlds: maturity that can generate noticeable interest and the assurance that the money is safe. In Walnut Creek, Calif., $1.109 billion asset Pacific Service CU is offering a higher-yielding insured investment to let members escape from Wall Street bailouts and the volatile stock market. The "Great 8scape" certificate is an eight-month certificate featuring a tiered-rate structure with higher rates for larger balances. It can be purchased as an Individual Retirement Account (IRA) and is insured for up to $250,000 by the NCUA. "In this current environment of low-rates and unpredictable stock returns, we are pleased to offer a safe, sound and insured savings product with a guaranteed rate of return," said Steve Punch, president of Pacific Service CU. Rates on "Great 8scape" certificates vary depending on the amount deposited. As of Oct. 23, APYs offered were 3.25% for balances under $50,000; 3.40% for balances between $50,000 and $99,999; and 3.60% for balances over $100,000. The certificates can be opened for $1,000 minimum balance and $500 when opened as an IRA certificate. Members age 23 and under can open the certificate with as little as $100, the credit union said.

Maryland fin lit task force in first meeting today

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COLUMBIA, Md. (11/5/08)--The Maryland Financial Literacy Task Force--created earlier this year by a state law advocated by the Maryland and District of Columbia Credit Union Association (MDDCCUA)--will conduct its first meeting today. Credit unions have two representatives on the task force, Bert Hash, president/CEO of MECU, Baltimore, and Thom Beck, MDDCCUA Board member and president/CEO of Montgomery County Teachers FCU. They will advocate for measures to make financial literacy education part of the school curriculum in Maryland, said MDDCCUA (FOCUS Newsletter Nov. 3). In April, Maryland Gov. Martin O’Malley signed legislation creating the task force, which received overwhelming support in the legislature, said MDDCCUA. The task force’s mission is to recommend ways to increase Marylanders’ level of financial knowledge and promote financial literacy education in Maryland’s schools. The bills were sponsored by State Sen. C. Anthony Muse of Prince George’s County and State Delegate Dana M. Stein of Baltimore County. The task force is comprised of representatives from the General Assembly, credit unions, banks, teachers’ unions, financial regulators, consumer groups and educators.

Celebs head All-Star Golf for the Gulf lineup

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FARMERS BRANCH, Texas (11/5/08)--A Golf for the Gulf tournament Nov. 18, featuring celebrity golfers, will benefit the Texas Credit Union Foundation’s (TCUF) Hurricane Ike Phase II disaster relief efforts. Baseball Hall of Famers Harmon Killebrew and Ozzie Smith, Babe Ruth Award-winner Bert Campaneris, former Dallas Cowboy Billy Joe Dupree, and country and western recording star Charley Pride--who played in the 1950s Sox Negro league, will headline the celebrity roster. Major leaguers Rob Nen, Tim Worrell, Frank Quilici, Frank Kostro, and Eddie Bonine will round out the current-player list. CUNA Mutual Group announced its sponsorship last week, joining Southwest Corporate FCU, CO-OP Financial Services, Bluepoint Solutions, ASI/ESI, U.S. Central FCU and Pulse. “This is a great opportunity to support a very important cause,” said Dick Ensweiler, president/CEO of the Texas Credit Union League. “The credit union community has been quick to respond to the initial disaster needs, and we know the response will be there for the longer-term needs as well.” The foundation’s Phase II grants will be used to assist the longer-term needs of credit unions employees with the most severe damage and losses. TCUF already has provided more than 950 grants, totaling about $495,000, to individuals who work for credit unions in the affected areas. However, the number of people who lost their homes is significant, the foundation said.

Speaker Biz services strategy needs five steps

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PORTLAND, Ore. (11/5/08)--About 20 million U.S. small businesses are clearly underserved by banks, and that spells opportunity for credit unions, according to a financial services consultant who spoke at a seminar for the credit union industry. Larry Middleman, president/CEO of CU Business Group, spoke to a crowd of about 70 at Southwest Corporate FCU’s first Member Business Services seminar last week in Dallas. “One single business relationship offers tremendous opportunities,” Middleman said. “Typically, a business uses double the number of financial products a consumer does. In addition, credit unions have the ability to market to the business owners as well as their employees.” Middleman emphasized the importance of developing a business services strategy that encompasses:
* Understanding what businesses members want; * Finding the credit union’s niche; * Demonstrating the credit union’s commitment to business services; * Hiring and developing the right expertise; and * Diversifying the business loan portfolio.
Finding a niche is an area in which credit unions can improve, Middleman said. “Credit unions can define their unique qualities by developing a ‘30-second spiel’ that highlights their competitive advantages,” he added. “Then, employees can more effectively respond to business owners when asked why they should do business with their credit union instead of a bank.” CU Business Group LLC provides business lending, deposit and consulting services to credit unions nationwide. Partnering with 11 corporate credit unions, eight of which are owners, CU Business Group provides strategic and technical expertise to a business lending to credit unions.

Op-ed CUs are model of what went right in economy

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CHAMBERSBURG, Pa. (11/5/08)--Credit unions' conservative approach to business has credit unions standing in good stead during the nation's financial crisis, according to a Pennsylvania credit union CEO in an opinion editorial in a local newspaper. "We can expect that credit unions will serve as one of the few models of what went right in the financial services industry when so much else went wrong," said Peggy J. Bosma-Lamascus, president/CEO of Patriot FCU in Chambersburg, Pa. The comments appeared in Public Opinion Online (Nov. 4). Bosma-Lamascus noted that the Chambersburg area has numerous local financial institutions to choose from, and that local leadership and investment means quicker, sounder decisions on services that specifically address the financial needs of local individuals and businesses. She outlined credit unions' difference in structure. "Because the cooperative structure of credit unions does not encourage excessive risk taking, credit unions have a history of conservative lending practices. This conservative approach has positioned credit unions to experience a very low average net loss rate. Nationally 99% of credit unions loans are current and paying," she wrote. Credit unions assisted consumers during the Great Depression, and as the current economy recovers, "will continue to be there for our members," Bosma-Lamascus said. Meanwhile, "credit unions continue to be safe, consumer-friendly financial service providers that offer consumers with alternatives to for-profit financial institutions," she wrote. For the full article, use the link.

CUNA Lending Council names exec committee

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MADISON, Wis. (11/5/08)--The CUNA Lending Council announced its new executive committee and officers during the council’s 14th annual conference Sunday through Wednesday in Orlando, Fla. Lloyd Gill, executive vice president and chief lending officer for City County CU, Ft. Lauderdale, in Margate, Fla., was named the new chair. He replaces Philip Greer, senior vice president of loan administration for State Employees’ CU, Raleigh, N.C., who stepped down from the committee after reaching his term limit. Aaron Bresko, vice president of lending, BECU in Tukwila, Wash., is the new vice chair. Bill Vogeney, senior vice president and chief lending officer, Ent FCU, Colorado Springs, Colo., is the new secretary/treasurer. Incumbent Vicki Lovett, vice president of loan operations, Suncoast Schools FCU, Tampa, Fla., and newcomer Chuck Anderson, executive vice president of business lending for Arizona State CU, Phoenix, were voted into the two open seats on the committee. Rounding out the board are:
* Claire Ippoliti, vice president of lending, Philadelphia FCU; * Dana Rawlings, senior vice president and chief operations officer, Smart Financial CU in Houston; * Michael Long, vice president of lending, UW CU in Madison, Wis.; * Keith Reynolds, vice president of lending and business services, CEFCU in Peoria, Ill.; and * Bonnie Doolin, senior vice president of business development and lending strategies for the Massachusetts, New Hampshire, and Rhode Island Credit Union Leagues.

WOCCU 2 leagues to serve post-Katrina work force

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NEW ORLEANS (11/5/08)--Thousands of Hispanic construction workers, many of them new immigrants, along with the World Council of Credit Unions (WOCCU) and two state credit union leagues, are helping New Orleans rebuild in the aftermath of Hurricane Katrina’s devastation in 2005. Meeting the financial needs of those workers, many of whom send money home to families in Latin America, has created a new challenge for some New Orleans credit unions, said WOCCU.
From left, the Iowa Credit Union League’s Patrick Jury, the Louisiana Credit Union League's Anne Cochran, and World Council of Credit Union's Brian Branch find a sunny French Quarter street corner to discuss Hispanic outreach efforts in New Orleans. (Photo provided by World Council of Credit Unions)
This week, the credit unions are learning how to better reach this rapidly growing demographic through a united effort by WOCCU; the Louisiana Credit Union League (LCUL); the Iowa Credit Union League (ICUL) and its subsidiary Coopera, designed to serve immigrant and emerging populations; and Caja Morelia Valladolid, one of Mexico's largest credit unions. “Membership levels have been stagnant for Louisiana's credit unions," said Anne Cochran, a WOCCU director and president/CEO of LCUL, which is spearheading the state's Hispanic outreach efforts. “I'd like to see our credit unions take advantage of this opportunity to grow." The need for workers following Katrina's destruction raised the level of New Orleans' Hispanic population from an estimated 15,000 to more than 50,000, and perhaps to as many as 100,000, according to data collected by Coopera, whose staff works with Iowa credit unions to serve that state's growing Hispanic population. The transience and number of unregistered citizens in Hispanic communities make precise numbers difficult to measure. Nearly 50% of New Orleans’ Hispanics work in the city's construction industry. “There is some parallel to the way you reach out to underserved populations of all types," said Patrick Jury, president/CEO of ICUL. “In Iowa, we try to be part of the thought leadership when Hispanic and immigrant issues come up across the state." LCUL's efforts to reach Hispanic members preceded Hurricane Katrina's arrival, according to Brian Branch, WOCCU executive vice president and chief operating officer. The new initiative broadens the scope of those efforts, in terms of reaching larger numbers of Hispanics and involving more Louisiana credit unions, he added. Also, the collaborating organizations bring new insights, WOCCU said. In Iowa, Coopera and ICUL defined a business methodology to reach this market profitably and it will likely have applications in Louisiana. Caja Morelia Valladolid’s input will help Louisiana's credit unions seem approachable and user friendly to immigrants. “With the need for credit union growth becoming more crucial, especially in the face of the ongoing economic crisis, now is the time for the Louisiana league and its credit unions to step forward and reach out to this group,” Branch said. In addition to LCUL, WOCCU, and ICUL staff, leaders in this week's educational sessions for New Orleans credit unions include Coopera staff members Warren Morrow and Miriam de Dios, and Jesus Ortiz and Ismael Medina from Caja Morelia Valladolid. Initial progress could appear slow, warned Jury. “When you undertake an initiative like this, it takes some time to see the needle move on progress,” said Jury. “There have to be financial--as well as philosophical--reasons for credit unions to undertake this effort. It’s important to keep in mind what will constitute success, then strive to attain those goals.”

CU System briefs (11/04/2008)

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* DES MOINES, Iowa(11/5/08)--Seventeen New York credit unions completed a six-month interactive, Hispanic outreach training program to provide a framework for growing by outreaching to the Hispanic market. Coopera Consulting, an Iowa-based consulting firm focused on Hispanic market strategies, partnered with the Credit Union Association of New York to prepare and educate credit unions on how to grow in the Hispanic market through Coopera's 4Ps educational framework: Personnel, Products, Processes and Promotion/Marketing. Through webinars and workshops, the credit unions developed an outreach plan for growth through the Hispanic market. Coopera will work with those that are ready to implement their plans … * WARRENVILLE, Ill. (11/5/08)--Members United Corporate FCU has appointed Jeannine Smith of Albany, N.Y., as vice president of public relations, a newly created position out of the corporate's Albany office. Smith will direct and oversee the corporate's public relations office, including publications and written materials, and will implement the corporate's national media relations plan. She was previously a self-employed public relations consultant. Smith also served as director of communications for Samaritan Counseling Center of the Capital Region and at The Albany Academy … * FRISCO, Texas (11/5/08)--Texans CU and Frisco (Texas) Independent School District are celebrating the opening of a new student-run credit union branch at the district's Career and Technology Center. Four students will earn credit by working at the credit union with a Texans' operations manager throughout the year. The center branch and ATM will be open during school hours for students, teachers, administrators and the public. The new branch is part of Texans' three-part plan to assist with teaching money management to students. From left, Jill Blevins, Jessica McDonald and Michele Canatela, greet parents, students and other school officials at the CTE Center Open House.(Photo provided by Texans CU) …

Reg Z alternative addressed at CUNA Lending Council

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ORLANDO, Fla. (11/5/08)--Credit union advocates have submitted an alternative to the Federal Reserve Board’s proposed changes to Regulation Z. It would address the Fed’s concerns over disclosure, yet ensure the benefits of multi-featured, open-end lending are maintained, according to CUNA Mutual Group.
Bill Klewin, associate general counsel, CUNA Mutual Group, addressed CUNA Lending Council conference attendees Monday about the Federal Reserve Board’s proposed changes to Regulation Z and its impact on credit unions. (Photo provided by CUNA Mutual Group)
Bill Klewin, associate general counsel, CUNA Mutual Group, told attendees of CUNA’s Lending Council that Credit Union National Association (CUNA) and CUNA Mutual representatives have met with Fed staff to discuss the Fed’s belief that more disclosure for consumers is needed in the lending transaction. Fed staff believe loan transactions for autos and boats--and in general, bigger consumer loans--need more disclosure at the time the transaction is consummated. The Fed believes increased disclosure benefits consumers’ ability to make a choice in selecting a lender, Klewin said. The alternative proposed by CUNA Mutual and CUNA, and supported by the Consumer Federation of America, would provide members with more information on payments, finance charges and borrowing amounts. Credit unions have used multi-featured, open-end lending as their preferred method to make non-real estate, secured loans for more than 25 years. About half of all credit unions use this lending approach and about 60% of credit unions with assets of more than $100 million in assets use this approach as their primary method of consumer lending, Klewin said. The Fed proposal would put credit unions’ multi-featured, open-end lending in jeopardy. Open-end lending allows credit unions to establish long-term borrowing relationships by providing loans how and where the member wants from their credit union. The proposal would eliminate the convenience members desire and differs from closed-ending lending, which is characterized by disclosures and processes that require the lender and borrower to close loans at the branch, thus stemming the convenience. “We estimate if multi-featured, open-end lending went away and credit unions had to switch to closed-end lending it would cost the industry $350 million for compliance costs alone to make the switch,” Klewin said. “And that doesn’t include ongoing expenses associated with costs related to the greater length of times for closing. Under the alternative, we believe the disclosure issue concern will be addressed and the associated cost would be lowered to $5 million to 10 million,” he added. When the final rules may be issued is unknown, Klewin said. CUNA Mutual is working on compliance and lending adjustments that credit unions may need to make as a result of any changes in the lending transaction. “Why are we pushing this issue with the Fed? Without any changes to the Fed’s proposal, credit unions will be forced to switch to closed-end lending for many of their consumer loans,” Klewin said. “It would have tremendous expense ramifications to credit unions and adversely affect their service and competitive capabilities.”

Used-auto loan drive accelerated by grant

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CHICAGO (11/5/08)--The National Credit Union Foundation (NCUF) has
Immigrants Caroline Anugioba and her son stand by their 2002 Hyundai Santa Fe financed in 2008 at North Side Community FCU in Chicago. (Photo provided by the National Credit Union Foundation)
approved a $35,000 Innovation Grant to accelerate North Side Community FCU’s drive to help more low-wealth borrowers afford cars. In an underserved area where many subprime auto lenders charge higher rates than the 18% federal usury limit, North Side Community FCU in Chicago will use the grant to reach members who need to refinance subprime loans. The credit union also will target “upside down” loans, where members’ outstanding balance exceeds their car’s value. The $7 million asset credit union also will:
* Purchase quarterly reports from Trans Union to identify members who have auto loans with other lenders; * Partner with Payment Reporting Builds Credit (PRBC) to acquire a list of all “thin-file” credit reports that show a recent credit inquiry from auto dealerships on Chicago’s north side; * Consider offering credit enhancements that would protect each borrower and the credit union: such as guaranteed asset protection (GAP) insurance, mechanical breakdown insurance, disability and job loss insurance; * For “upside-down” borrowers with strong job histories and adequate credit histories, consider financing over 100% of their car’s value with GAP insurance added to the loan pricing.
Successful models will be incorporated into NCUF’s signature program, REAL Solutions. North Side Community FCU is one of hundreds of credit unions offering affordable products and services through REAL Solutions, NCUF said.

Elevations CU credit score help featured in newspaper

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LONGMONT, Colo. (11/4/08)--A program at Elevations CU that explains credit reports and credit scores is featured in a Colorado newspaper's article about how consumers can protect their credit. Elevations CU is a $835 million asset credit union based in Boulder, Colo. Its program, Reality CheckUp explains to members how credit reports and credit scores work and offers steps they can take to improve both (Longmont Times-Call Nov. 2). The newspaper interviewed consumer advocate and consultant Remar Sutton, who was in Boulder to work with the credit union and its members and staff to discuss the nation's credit crunch and how that affects members and consumers. When the economy tanks, people jump into quick decisions that might cost them dearly later, Sutton said. The important thing consumers can do is to protect their credit score. He noted that credit card companies are tightening their credit to minimize their exposure to risk and the companies' actions can impact a credit score or the ability to obtain future loans. Sutton suggested to the credit union's members that they pay off their credit cards. If members carry more than 25% of their balance on their card, the credit card company may view them as a risk. Consumers can do two things if they find out their credit card company has raised their interest rate, Sutton said. They can:
* Transfer the balance to another card or * Contact a credit union or locally owned bank that isn't caught up in the mortgage crisis.
For the full article, use the link.

Arizona CUs see economic fallout in auto loans cards

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TUCSON, Ariz. (11/4/08)--Auto loan and credit card delinquencies have caused losses at several larger Tucson-area credit unions, according to a recent report based on second-quarter earnings by a company that rates banks and credit unions for consumers. The decline of the housing market has spilled over into other parts of the economy such as auto loans--traditionally a major staple for credit unions (Arizona Daily Star Nov. 2). “Unfortunately, the economic downturn has had an impact on our members, which in turn affects our credit unions,” Scott Earl, president/CEO of the Arizona Credit Union League, told News Now. “In response to the recent losses, our credit unions have tightened their lending practices. "It is important to point out, however, that our credit unions have steered clear of subprime lending, are well capitalized at 11%, remain in an excellent ratings standard and are all insured by the National Credit Union Share Insurance Fund (NCUSIF) up to $250,000 per account,” he added. Tucson (Ariz.) Old Pueblo CU, a $151 million asset credit union, took some losses this year in its auto portfolio, but still is on sound financial footing, Joe Mirachi, president CEO, told News Now. The credit union retained its “excellent” rating of four stars, from Bauer Financial, even though it lost $634,000 this year through the end of June. Bauer Financial is based in Coral Cables, Fla. “We continue to be well-capitalized,” Mirachi, who started at the credit union in Sept., 22, said. “And we have adequate liquidity. Although I’m not familiar with the exact process Bauer uses to evaluate credit unions, those likely are the factors that kept us with good ratings. We’ve also steered clear of subprime real estate lending.” About 69% of Tucson Old Pueblo’s loans are for autos, and the rest are for first and second mortgages, Mirachi said. To counter the losses, the credit union is tightening its lending and is growing its residential mortgage lending, he added. Tucson (Ariz.) FCU, a $249 million asset credit union, also has seen losses--of about $326,000 in the second quarter, prompting Bauer to lower its rating from superior to excellent. “There are many different components to financials to see how credit unions are doing--such as the strategic plans and business plans in place at different credit unions, so it hard to get a complete picture of a credit union’s performance from one rating or number,” Matthew Gaspari, Tucson FCU chief operating officer, told News Now. Delinquencies are low, classified assets are low, and the credit union is back into profitability, he added. Also, Tucson FCU recently opened two branches, which led to more expenses. “We’ve grown into our expenses, Gaspari said. “We’re experiencing good loan growth and super membership growth.” About 60% to 65% of the credit union’s losses are in auto loans. The rest is mostly in credit card debt, he added. Large vehicles are harder to pay for because of higher gas costs to fill up and higher loan payments, so most of the vehicles going into default at the credit union--about 65%--are larger ones, Gaspari said. “We’re not directly impacted by mortgage loans, but indirectly impacted, because consumers with mortgage problems have to make decisions about what loans to pay,” Gaspari said. “If people are put in a difficult situation, they have to make hard choices.”

California league CUs stable in crisis

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RANCHO CUCAMONGA, Calif. (11/4/08)--California's credit unions have been stable during the subprime mortgage meltdown and reported a 10% jump in fixed-rate first mortgages between January and June, reports the California Credit Union League in a newspaper article. "At a time when banks are staggering under losses from the subprime mortgage meltdown, most credit unions are dodging that bullet" and are engaging families about how to stay afloat amid a financial crisis, said the Inland Valley Daily Bulletin (Nov. 2). League President/CEO Bill Cheney notes in the article that credit unions are collateral damage in the banking crisis "but they're still out there trying to help members." Some credit unions are making special loans to members hit hard by the subprime mortgage crisis. Others invite families to attend financial literacy courses. "For people who are looking for mortgages right now, one of the best places to look is a credit union," said Ken Willis, founder of Upland, Calif.-based League of California Homeowners, in the article. Its members are eligible to join a credit union. Cheney told the publication that if it weren't for credit unions, banks would monopolize the market and charge everyone higher loan interest rates. For the entire article, use the link.

Fire closes Beacon CU branch

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ROCHESTER, Ind. (11/4/08)--The Rochester, Ind., branch of Beacon CU was closed after a fire damaged the interior of the credit union Friday evening. The cause of the fire is being investigated. Firefighters were able to control the blaze after 20 minutes, but were on the scene for five and a half hours, said Ryan Murphy, Rochester Fire Department assistant chief (WSBT 2 Nov. 1). News Now was unable to reach Beacon CU officials by press time. Beacon CU, based in Wabash, Ind., has $607 million in assets.

CU to divest auto dealership in Wisconsin

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RACINE, Wis. (11/4/08)—Educators CU will divest its auto dealership, under an agreement with its state regulator, the Wisconsin Office of Credit Unions (OCU), regarding the credit union’s ability to own and operate the dealership. The $1.018 billion asset, Racine, Wis.-based credit union established a retail automobile dealership to provide car-buying resources and used-car sales to its members and consumers in 2002. The Wisconsin Automobile and Truck Association filed a complaint with the OCU, saying that the credit union charter does not allow credit unions to offer this service, the credit union said. Educators CU believes the complaint was filed to prevent competition--each year more than 700 individuals purchase high-quality used vehicles, the credit union said. The OCU initially ruled that the State of Wisconsin Credit Union Statutes, Chapter 186, allows credit unions to own only car leasing services under the agreement, not retail car sales. The credit union appealed this ruling. “We have 18 months to have the law clarified or divest to a third-party,” Jim Henderson, Educators senior vice president, told News Now. “I believe we may have been successful in our appeal, but we do not want to spend any more credit union (member) dollars on legal fees to fight this ruling,” Eugene Szymczak, Educators president, said in a press release. “This settlement will allow us 18 months to get the law clarified to clearly allow this service or to transfer this business to a third party so that this consumer-friendly service can continue.” “We have literally saved members millions of dollars on the purchase and financing of their vehicles,” Szymczak continued. “In addition to pursuing clarity to the law, we will evaluate alternatives to sell the retail car business to a potential business partner who can provide value to members. “However, that business partner would need to operate under our core values of honesty, integrity, respect, fairness and service excellence. Anything less will not be acceptable,” he added. The credit union owns Educators Auto & Lease, a division of ECU Financial Services Inc. It provides used-car sales, new- and used-car leases, and new-car referral services. Its used-car inventory includes many late-model, low-mileage vehicles. All used cars include a three-day return policy and a 60-Day safety net, which covers the cost of most mechanical repairs for two full months after the purchase, the credit union said.

Five receive awards at CUNA Lending Council conference

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ORLANDO, Fla. (11/4/08)--Five credit unions Monday received CUNA Mutual Group’s Excellence in Lending Awards at the CUNA Lending Council’s 14th annual conference.
CUNA Mutual Group presented five credit unions with Excellence in Lending Awards Monday at CUNA’s Lending Council annual conference. Back row, from left: Lloyd Gill, chair, CUNA Lending Council; Andy Napoli, senior vice president, CUNA Mutual Group. Front row: Julio Rios, UW CU, Madison, Wis.; Penny Pratt, SAFE FCU, Sumter, S.C.; Pam Evans, First Alliance CU, Rochester, Minn.; Carmen Ramirez, ASI FCU, Harahan, La.; and Cindy Babin, US Community CU, Nashville, Tenn. (Photo provided by CUNA Mutual Group)
CUNA Mutual Group’s Andy Napoli, senior vice president, presented the ninth annual awards to:
* US Community CU, Nashville, Tenn.--Consumer Lending, assets less than $250 million category; * SAFE FCU, Sumter, S.C.--Consumer Lending, assets more than $250 million; * First Alliance CU, Rochester, Minn.--Mortgage Lending, assets less than $250 million; * UW CU, Madison, Wis.--Mortgage Lending, assets more than $250 million; and * ASI FCU, Harahan, La.--Low to Modest Means.
CUNA Mutual, with support 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.

IChicago TribuneI CUs an alternative in banks crisis

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CHICAGO (11/4/08)--The Chicago Tribune Sunday suggested credit unions as an alternative to banks, especially when it comes to obtaining a loan. Credit unions experienced record lending volume this year, Jay Johnson, executive vice president of Callahan & Associates, told the newspaper. Credit unions experienced a 40% increase in first-mortgage lending compared with last year, while the overall market was down 17%. Credit unions also added 450,000 new members from March to June, Johnson told the newspaper. The Tribune also noted that credit unions:
* Provide lower fees than traditional banks, from ATM to overdrafts; * Offer better rates on certificates of deposit--3.06%, compared with banks’ 2.67% on average; * Take an individual’s character into consideration when lending, and offer payday alternative loans at lower rates than other payday lenders; and * Have federally insured deposits, up to $250,000 per depositor.

CUNA calls for AGM resolutions

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MADISON, Wis. (11/4/08)--In preparation for the Credit Union National Association (CUNA) Annual General Meeting (AGM), CUNA’s Corporate Governance Committee is asking member credit unions and leagues to submit resolutions no later than Jan. 9 Resolutions deemed appropriate by the committee will be presented for discussion and vote at the AGM on Feb. 23 in Washington, D.C. Adopted resolutions will move forward as recommendations to the CUNA Board. Suggested resolutions can be sent by:
* Mail to Office of the Corporate Secretary, CUNA, P. O. Box 431, Madison, WI 53701-0431; * E-mail to Theresa Hanson thanson@cuna.com; or * Fax at 608-231-4874.

Hoosier CUs net positive media coverage

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INDIANAPOLIS (11/4/08)--Indiana’s credit unions continue to generate positive media coverage, according to the Indiana Credit Union League. “The messages we have emphasized include credit unions as a bright spot and safe haven, how credit union differences benefit Main Street America, and that we are experiencing strong deposit and lending growth while other lenders cut back,” said Indiana league president John McKenzie. Examples of coverage include:
* McKenzie was a guest on TV program Inside Indiana Business where he delivered the credit union message. The show was broadcast in 11 Indiana cities. He also taped a segment for a university television station, was interviewed for an article in a statewide magazine--“A Bright Spot Amid a Cloudy Picture” for Building Indiana, was interviewed for a front-page story in the Fort Wayne Business Weekly and was interviewed for a story that will appear in the Indiana Employer; * Teachers CU CEO Rick Rice was interviewed by an NBA affiliate on Sept. 29; * Purdue EFCU CEO Bob Falk was interviewed by a Lafayette CBS affiliate; * Evansville Teachers FCU CEO Mike Phipps joined CEOs from Evansville banks to man a phone bank in a TV studio, taking calls from consumers about money; * Credit unions in the Southwestern Chapter purchased 46 commercials on three radio stations to air the message of safety and soundness; and * Credit unions in the North Central Indiana Chapter created and ran a newspaper ad addressing consumer concerns about strength, safety and soundness.

IUSA TODAYI Hampel discuss deposit shift to CUs

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McLEAN, Va. (11/4/08)--USA TODAY quoted Credit Union National Association Chief Economist Bill Hampel in a Monday article and noted that credit union deposits are growing. Consumers are shifting their deposits into credit unions and community banks as turmoil in the financial markets continue, USA TODAY said. It also cited a CUNA survey, which indicated that one-fourth of credit unions experienced above-average growth in deposits during the last six weeks. However, 40% of credit unions surveyed said the deposits were growing at a weaker rate than one year earlier. The slowdown is likely due to confusion over whether credit union accounts are federally insured--but credit union accounts are backed up to $250,000 by the National Credit Union Administration, Hampel told the newspaper. To read the full article, use the link.

Utah CUs healthy says league

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SALT LAKE CITY (11/4/08)--Utah credit unions “remained conservative during the wild party that a lot of other financial institutions were throwing themselves in,” Scott Simpson, Utah League of Credit Unions president, told The Salt Lake Tribune on Saturday. One doesn’t hear about many credit unions “getting into trouble,” added Mike Puentes, a Credit Union One member. Credit Union One, in West Jordan, has $83.9 million in assets (Salt Lake Tribune Nov. 1). IFA Employees CU, Salt Lake City, offers automobile and consumer loans to its members. The credit union is the state’s strongest, says the newspaper, and has less than $2 million in assets. Some credit unions are experiencing a slowdown in loan demand, as members “put the brakes” on spending, said Scott Webre, CEO of Box Elder County CU, Brigham City. When credit unions experience trouble, they go to other credit unions for help--instead of relying on taxpayers, Simpson said. For example, Intermountain CU, Salt Lake City, recently merged with America First CU after Intermountain’s net income declined and it experienced some troubled real estate loans. Intermountain has $41 million in assets and asked America First how to work through its financial difficulties. The $4.5-asset America First agreed to merge with Intermountain, the newspaper said.

Texas governor gets insight from CU leaders

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AUSTIN, Texas (11/4/08)--Texas Gov. Rick Perry met Friday with industry leaders, including Ayn Talley, Texas Credit Union League Chair and CEO of Houston Police FCU, and Dick Ensweiler, league CEO/president.
Texas Gov. Rick Perry (left), consults on current economic situation with industry leaders including, from left, Ayn Talley, CEO of Houston Police FCU and chair of the Texas Credit Union League (TCUL); Buddy Gill, TCUL chief advocacy officer; and Dick Ensweiler, TCUL CEO/president. (Photo provided by the Texas Credit Union League)
The meeting was called by the governor to discuss the national economic situation’s impact on Texas industries. Also present at the meeting were representatives from the Independent Bankers Association of Texas, Texas Association of Business, Texas Association of Manufacturers, Texas Association of Realtors, and the Texas Bankers Association. “Credit unions are doing well in Texas,” Ensweiler said. “We have seen an increase in deposits as people come to us as safe havens for their money. Fortunately we have over 10% in reserves, and can take in the deposits. We are making loans and are open for business.” Talley, whose credit union sustained substantial damage during Hurricane Ike, thanked the governor for his leadership during the storm. “Credit unions along the gulf coast are doubly challenged by both the economic storm and the damages wrought by Hurricane Ike,” noted Talley. “Some of us are operating inside temporary buildings, which can make it difficult to alleviate fears about the overall marketplace, yet we are seeing an increase in deposits.” Texas is ranked as the No. 1 state economy in the nation and generated nearly half of all jobs created in the nation from August 2007 to August 2008, according to the Financial Times. “Our state's disciplined, principled policies of limited growth in spending, low taxes and reasonable regulatory climate is fostering an environment that is encouraging job creation," said Gov. Perry. Perry plans to continue working and meeting with the public and private sectors to identify opportunities to maintain and enhance the state's economic edge, the league said. “As the industry representatives of seven million members of credit unions in Texas, we were glad to be consulted at the governor's meeting,” Ensweiler said. “He recognizes that our industry is not part of the problem in the financial markets, but can be part of how the country bounces back. We look forward to continuing to be a hard working partner in the future of the state.”