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League makes CU MBL case at field hearing

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SOUTHFIELD, Mich. (12/1/09)--Michigan Credit Union League President/CEO David Adams testified Monday before a House Financial Services subcommittee in Southfield, Mich., urging Congress to lift the cap on credit union member business lending. Rep. Gary Peters (D-Mich.), a member of the House Financial Services Committee, invited the subcommittee on Oversight and Investigations to examine small business lending with leaders from Michigan’s business and financial sectors, including Adams. Rep. Dennis Moore (D-Kansas) chaired the meeting. Reps. Peters, John Dingell (D-Mich.) and Mark Schauer (D-Mich.) also attended. Adams urged support for H.R. 3380, The Promoting Lending to America’s Small Business Act, which seeks to increase capital available to small businesses. Adams provided an example of a credit union in Schauer’s district that has reached its 12.25% cap but would like to continue lending. “While Michigan credit unions hold more than three-quarters of a billion dollars in small business loans, their authority could increase by as much as $1 billion if the federally imposed cap on member business lending were lifted by Congress,” Adams said. “Michigan’s credit union industry is prepared to assist Michigan’s small businesses further with their challenges in securing credit,” he added. “As of June 30, Michigan credit unions are funding more than 6,300 small business loans. Nearly 1,000 of these loans have been funded by credit unions since Jan. 1, totaling more than $100 million in new small business credit.” Credit unions’ small business loans have increased 72% during the past three years and 110% in Michigan during the same period. Credit union small business lending was up 17% in June over June 2008, while data indicate that bank business lending decreased during the third quarter for the fourth consecutive quarter, Adams said. Other points Adams made during the testimony:
* The Capital Purchase Program, which reduces the cost of capital to community banks, should be extended to credit unions so they can access the 3% cost of capital; * Increasing the Small Business Administration loan sizes to $5 million could be helpful, but would be most effective if the guaranty percentage remained at 90%; and * The Invest in America program, which provides discounts to those who receive financing from a credit union on an eligible new or used vehicle from General Motors and Chrysler, has facilitated 200,000 vehicle sales since its inception.
The Credit Union National Association supports the Promoting Lending to America’s Small Business Act. The act could put as much as $10 billion into small businesses, and create 108,000 jobs at zero cost to taxpayers, CUNA has said.

Filene CUs can reimage the home ownership dream

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MADISON, Wis. (12/1/09)--Credit unions are challenged to consider the past and current trends in home ownership, to think beyond mere mortgages, and consider how to redefine the American dream in the Filene Research Institute’s most recent innovation report. “Reimagining the Dream: The Future of Home Ownership,” by Denise R. Gabel, Filene chief innovation officer, challenges readers to identify potential treatments by developing and implementing game-changing ideas that could reshape the residential lending marketplace, and simultaneously benefit borrowers and lenders. Financial innovation has too often benefited sophisticated market players, Gabel said. The ideas included in the report seek consumer-friendly innovations. Gabel asks credit unions to consider some thought-provoking questions, including:
* How can home loans be made more flexible for the borrower over the full term of the loan to accommodate periodic changes in income and employment? * What ideas can be developed that blend renting and owning? Can the rent-to-own model be made relevant again? * Since the down payment is one of the biggest obstacles to home ownership, are there ways to lower or remove this barrier? * Because a borrower’s direct relationship with the originating lender is often terminated when a home loan is sold to another lender or to a servicing company, how can this relationship be preserved?
“The opportunity is ripe for credit unions to find creative solutions that will help existing members, attract new members, and contribute to the financial stability of communities,” Gabel said. “Too often, however, product development is driven by balance sheet and income statement considerations first, and consumers’ needs second. Credit unions should look to members’ needs first.” Then, credit unions should drive product development accordingly by questioning how they can help members achieve their vision of “home,” whatever that may be, even during extraordinary times, she added. For more information, use the link.

Virginia CUs add almost one million members since 2005

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LYNCHBURG, Va. (12/1/09)--Consumers are turning to Virginia’s credit unions in record numbers, according to data collected by the National Credit Union Administration (NCUA). Roughly 170,000 consumers opened accounts at Virginia-based credit unions between July 2008 and June 2009, and nearly one million new members have been added since year-end 2005. Membership for Virginia’s credit unions stood at 6.3 million in June 2009. About three million reside in the commonwealth. Many military and former military credit unions based in Virginia count members worldwide. Credit unions in Virginia also originated more than 622,000 loans worth $17.3 billion during the first half of 2009, according to NCUA data. “Virginia’s credit unions are still lending, thanks to strong capital and the fact they avoided the risky lending practices now plaguing so many other institutions,” said Virginia Credit Union League President Rick Pillow. “Consumers also are discovering [that] credit unions are the smart choice for a financial partner, as families seek to cope with the challenges of today’s economy. “With better rates and fewer fees, Virginia’s credit unions are saving their members an estimated $869 million annually compared with the cost of loans and services at other financial services providers,” he added. As for mortgage loans, Virginia credit unions made more than $7.73 billion in first, second and other mortgage-related loans during the first six months of the year. First-mortgage lending experienced an annual growth rate of 17.7% for June 2009. The growth rate was 36.4% for calendar year 2008 and 33.3% for 2007. Although consumer demand nationwide for new-auto loans has dropped, Virginia credit unions still reported about $5.8 billion in such loans as of June 30. Outstanding loans for pre-owned automobiles totaled nearly $6 billion as of June 30, an almost $300 million increase since December 2008. Virginia’s credit unions also reported increased member business lending, filling an important need as small businesses seek credit to grow and sustain their operations and provide a boost to the economy, the league said. Member business loans account for almost $513 million of Virginia credit unions’ combined loan portfolio, but that number is rising. The annual growth rate for member business lending hit 48.1% as of June. A bill pending in Congress could open the door for more small businesses seeking credit through credit unions by raising a restrictive cap on member business loans, the league said. “Virginia’s credit unions remain a safe harbor for their members’ savings and other accounts, despite the economic woes,” Pillow said, adding that there’s no better time to be a credit union member.”

Florida CU regulator reaccredited by NASCUS

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ARLINGTON, Va. (12/1/09)--The state regulator for Florida's credit unions has been reaccredited by the National Association of State Credit Union Supervisors (NASCUS). The Florida Office of Financial Regulation (OFR) Bureau of Credit Union Regulation is responsible for the regulation and examination of 79 state-chartered credit unions with about $19.5 billion in total assets. Florida was first accredited in 2004. The accreditation "is yet another indication that we are properly safeguarding deposits in Florida's state-chartered financial institutions,” said OFR Commissioner Tom Cardwell. “These are rigorous national standards and I am extremely proud of the OFR Financial Institutions Team.” NASCUS accreditation is valid for five years, subject to annual review. The annual review process enables the accredited agency and the NASCUS Performance Standards Committee to measure progress and improvement. NASCUS’ 28 accredited states supervise more than 85% of the nation’s state-chartered credit union assets.

Kenyan CUs escalate HIVAIDS efforts

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MADISON, Wis. (12/1/09)-- Kenyan savings and credit cooperatives (SACCOs), or credit unions, will boost their efforts this week to fight HIV/AIDS as a part of World AIDS Day, which is being celebrated today.
Click to view larger image The World Council of Credit Unions raised funds to build a new kitchen at Busia Compassionate Care Centre, Kenya. The orphanage houses roughly 50 children--several of whom are infected with HIV/AIDS. The funds were raised as a part of WOCCU’s efforts to spread awareness about the viruses in lieu of World AIDS Day. (Photo provided by the World Council of Credit Unions)
This year’s theme is “HIV: Reality.” SACCOs play an active role in combating the viruses and helping the families of those who die from HIV/AIDS, according to the World Council of Credit Unions (WOCCU). Of those living with HIV/AIDS in 2008, 22 million lived in sub-Saharan African countries, including Kenya. About 2.7 million people--1.9 million of whom lived in sub-Saharan Africa--were newly infected last year, up from 2.5 million infected in 2007. “As trusted member-owned and operated financial cooperatives, SACCOs play a vital role in many aspects of the communities they serve,” said Pete Crear, WOCCU president/CEO. “SACCOs provide education and social support in an attempt to help mitigate the impact of this deadly disease.” In the community of Kericho, Ndege Chai SACCO will participate in a government-organized World AIDS Day event to more actively address HIV/AIDS’ impact in the community. The SACCO has established a scholarship fund for secondary school-age AIDS orphans and has mobilized orphan groups to help improve their economic status. The event will focus on creating public awareness of HIV/AIDS through talks, music, bodybuilding, beauty and soccer contests. Both the SACCO and WOCCU office have contributed funds to help underwrite the cost of the event. In Wagi, CENT SACCO is participating in an event organized by the Transformative Agents of Change Initiatives, which promotes HIV/AIDS prevention and treatment and increases awareness among youth through sporting events and community theater. The event will include presentations by healthcare providers, sporting activities and contests. The local WOCCU office donated 20 sports balls to the effort. In Kisumu, WOCCU program staff raised $537 and the program matched the donation for a total of $1,073 to build new kitchens for two orphanages. Busia Compassionate Care Centre lost its kitchen during a recent rain storm. The orphanage houses 49 children ranging in age from two months to 17 years, of which 13 are HIV-positive and currently on antiretroviral treatment. Migosi Orphanage Home has 30 children ranging in age from one to 20 years, of which five are HIV-positive and currently receiving treatment. “Kenya's SACCOs play an important role in helping educate members and care for orphans of AIDS victims,” Crear said. “In Kenya and in other African nations, part of the mission of serving members is also doing what you can to help save lives.”

The 1 CU Conference to draw 2500 CU leaders

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MADISON, Wis. (12/1/09)--More than 2,500 credit union leaders are expected to attend The 1 Credit Union Conference, July 11-14, in Las Vegas. The conference, which will be held one year only, combines America’s Credit Union Conference and the World Credit Union Conference into one event. America’s Credit Union Conference and Expo, sponsored by the Credit Union National Association (CUNA), and the World Credit Union Conference, sponsored by the World Council of Credit Unions (WOCCU) will not be held as individual events in 2010. CUNA and WOCCU are combining the two conferences into one event that will offer attendees four days of networking opportunities and educational sessions. The nation’s economic conditions have triggered shaky consumer confidence and rising expectations, which present challenges for credit unions worldwide. The 1 Credit Union Conference aims to give credit union leaders some ideas on how credit unions can innovate and get a leg up on the competition, CUNA said. “Our combined conference provides the best and most economical opportunity we can offer for all of us to find the resources we need to help our credit unions survive and thrive,” said CUNA President/CEO Dan Mica. The event will be held at the MGM Las Vegas. More information will be available in early 2010. For more information, use the link.

Federation cancels this weeks CRA seminar

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NEW YORK (12/1/09)--The Federation of Community Development Credit Unions is cancelling its seminar on the Community Reinvestment Act (CRA) this week. The seminar, “Credit Union Outreach, Community Reinvestment, and Credit Unions: Facts. Resources. Strategies” was scheduled for Thursday in Alexandria, Va. “A labor dispute at our planned location forced us to cancel,” said federation President/CEO Cliff Rosenthal. “It also became apparent to us that urgent legislative priorities were taking the attention of many of our presenters and attendees, so we have decided to postpone this session.” The federation plans to reschedule the seminar in the spring. All registrants have been contacted and fees have been refunded.

Largest CUs banks surveyed on ID fraud prevention

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PLEASANTON, Calif. (12/1/09)--The nation’s largest credit unions and banks have recently been ranked on 50 fraud prevention, detection and resolution capabilities. The 2009 Banking Identity Safety Scorecard, issued by Javelin Strategy and Research, ranks how well financial institutions team up with members or customers to avoid criminals that commit identity theft. Navy FCU, Vienna, Va., was one of several institutions to earn perfect scores in 11 identity fraud resolution criteria (Wireless News Nov. 21). The report also noted that most financial institutions:
* Scored about 27 percentage points higher than last year; * Curtailed the use of Social Security numbers for routine authentication; * Use third-party security vendors for online safety, such as McAfee and Symantec; * Offer zero-liability protection and next-day replacement of lost or stolen debit cards; and * Have strengthened education, with all the top financial institutions offering anti-phishing e-mail education online.
The scorecard uses online research and mystery shopping to score credit unions and banks. The security measures are based on consumer behavioral research, new technology and review of changing crime patterns. Identity fraud cost victims about $496 out-of-pocket and 30 hours’ worth of personal resolution hours in 2008, Javelin said.

N.Y. small CUs tell what keeps them up at night

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ALBANY, N.Y. (12/1/09)--Future credit union leadership, growth, staff and membership retention are just a few things that keep small credit unions awake at night, according to the Credit Union Association of New York.
Click to view larger image Presenter Mark Smith discussed strategies for credit union survival and growth at the Credit Union Association of New York’s fifth annual CEO Roundtable for credit unions with assets up to $50 million. (Photo provided by the Credit Union Association of New York)
The association recently held its fifth annual CEO Roundtable Nov. 17-18 in Syracuse, N.Y. The event was geared toward credit unions with $50 million in assets or less. “The association first developed this event not only to present learning and networking opportunities for our member credit unions with up to $50 million in assets, but also to have a better understanding of the issues, wants and needs of those credit unions’ executives,” said William J. Mellin, association president/CEO. During the roundtable, groups of credit union representatives discussed some of the challenges they face. Some of the concerns included:
* Long-term viability of credit unions and corporates; * Future credit union leadership; * Net worth and earnings; * Loan losses and delinquency; * Compliance with National Credit Union Administration rules; * Growth; * Staffing issues; * Member retention; and * Liquidity access.
Presenter Mark Smith, CEO of Mark Smith Inc., a Utah-based consulting firm for small and mid-sized credit unions, also encouraged credit unions to “think outside the box” when dealing with things such as asset liability management, and presented examples of how credit unions can generate more income. George Towle from The Rochdale Group plus CUNA Mutual Group also participated in the roundtable. Alison Doney, association community development coordinator, spoke about ways credit unions can reach new demographics through Facebook, Twitter and other online media.

CU System briefs (11/30/2009)

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* COLUMBIA, Md. (12/1/09)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) has announced two new advocacy staff members. Rob Ulmer, vice president of advocacy, has a law degree from American University and received a bachelor’s degree from Elizabethtown College, Pa. (Focus newsletter Nov. 30). He has worked for several Washington, D.C.-area law firms. Ricardo Pineres, director of legislative affairs and grassroots, has a law degree from George Washington University and a bachelor’s degree from James Madison University. Pineres will take the bar exam in Virginia in February. He recently worked for U.S. Rep. Glenn Nye (D-Va.) (Photos provided by the Maryland and District of Columbia Credit Union Association) ... * OKLAHOMA CITY (12/1/09)--Two Oklahoma credit unions have merged into one credit union that has more than $300 million in assets, according to local media reports (www.newsok.com Nov. 25). Oklahoma Employees CU, Oklahoma City, has merged with Oklahoma City Thrift FCU. Oklahoma Employees CU will retain all of its staff, branches and assets. The credit unions chose to merge to provide more services to members, the news outlet said. Oklahoma Employees CU also will open a new branch late next year ... * PALO ALTO, Calif. (12/1/09)--Addison Avenue FCU, Palo Alto, Calif., has acquired USE CU’s San Jose branch. USE CU is based in San Diego and has $804 million in assets. Addison Avenue has $2.3 billion in assets. The acquisition will add 4,000 members to Addison Avenue FCU. The USE branch has $60 million in deposits (Datamonitor Nov. 24) ... * PLYMOUTH, Mich. (12/1/09)--The Battle Creek and Flint chapters of the Michigan Credit Union League recently held legislative breakfasts, reaching eight lawmakers and staffers about state legislative and credit union issues (Michigan Monitor Nov. 23). The Battle Creek breakfast was held Nov. 9. Forty credit union representatives attended. State Sen. Mike Nofs (R), and State Reps. Rick Jones( R) and Kate Segal (D), and staff from Sen. Nofs’ office were present. They discussed financial elder exploitation legislation, education funding and economic development. The Flint Chapter met Nov. 13 with State Sen. Deb Cerry (D); State Reps. Lee Gonzales (D), Rick Hammel (D), and Woodrow Stanley (D); and Linda Kingston, legislative assistant for Rep. Jim Slezak (D), attended. They talked about Michigan’s tax structure, term limits and attracting and retaining business in Michigan. Top photo: Segal (left), Nofs and Jones discuss legislative issues at the Battle Creek breakfast. Bottom photo: Gonzales addresses members of the Flint chapter. (Photos provided by the Michigan Credit Union League) ... * HARRISBURG, Pa. (12/1/09)--Bucks First FCU, Bristol, Pa., opened a full-service, student-run branch at Palisades High School in Kintersville Nov. 19. Joe Wambach, executive director of the Pennsylvania Credit Union Foundation, attended the grand opening. Bucks First received a financial literacy grant from the foundation for the project. The credit union will offer financial education and training for youth interested in business and finance, the Pennsylvania Credit Union Association said (Life is a Highway Nov. 24). The branch will be modeled around the credit union’s youth financial education program, Project Flipside, which uses youth to write blogs, connect with other youth through social media, and travel the county to teach financial literacy. Pictured are school officials, credit union staff and board members at the opening of Bucks First FCU’s student branch in Kintersville. (Photo provided by the Pennsylvania Credit Union Association) ...

CUs chalk up more media Frontline CNN.Money

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WASHINGTON (11/30/09)--Credit unions and the Credit Union National Association (CUNA) were featured prominently last week in articles for PBS's "Frontline," CNN.Money.com, Barron's, MarketWatch, and Investor's Business Daily. PBS on its Tuesday "Frontline" program about "The Card Game" was tough on banks but did not focus on credit unions. However, at the end of the program, the announcer advised viewers to go to Frontline's website for more information, including to find out "whether credit unions are a better alternative." Frontline's website article, "A Q&A on Credit Unions," discusses what makes credit unions different and features CUNA as the primary source. It also provides links to CUNA and the National Credit Union Administration as resources. In its discussion of the advantages of credit unions, a link citing a study by Forrester Research Inc., which found credit unions received much higher customer satisfaction ratings than banks, actually goes to a News Now article, "CUs tops in Forrester consumer opinion survey" (May 27). It also provides references and links to CUNA's credit union locator and findacu.com, and provides comparisons from Datatrac that shows credit unions' favorable rates. In its section on credit cards, the article cites the Pew Charitable Trusts study that found credit unions' cards had better rates than banks' cards.. It also discusses overdrafts and quotes North Carolina State Employees' CU CEO Jim Blaine. Use the link to the article for more detail. Also in the news, a CNN.Money.com story on "5 reasons banks don't get it (and a few banks that do" cites credit unions among banks "that do" get it in the category of "delivering real service." San Francisco Fire FCU was noted as allowing members to get free FICO scores four times a year. In other coverage:
* MarketWatch featured a Barron's video on credit card fees and it cites the Pew study that was favorable for credit unions; * Mike Schenk, senior economist for CUNA, was featured in "Investor's Business Daily" discussing the economy. See News Now's related story in the Market section, "2% growth thru 2010, Schenk to "Investor's Biz Daily." * Bankrate.com featured an article "Should You Get a Credit Union Credit Card." See related story in News Now's System section for "Bankrate: Should you get a CU credit card? Yes."
To access the articles, use the links.

New Orleans CU launches Safety Net payday alternative

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METAIRIE, La. (11/30/09)--Greater New Orleans FCU (GNOFCU) has introduced a new program--Safety Net Solutions--for members whose financial futures may be without any sense of security. The program provides members with two products: Safety Net Advance and Safety Net Savings. Developed as a payday loan alternative, the program delivers additional safety features that separate it from the financial pitfalls of conventional payday loans. The program is designed so members can avoid the high risks of the payday loan cycle and build good credit. The maximum Safety Net Advance allowed is $300 with a 30-day repayment term. After three months, participants must complete a BALANCE Financial Fitness training module to continue to participate in the Safety Net Solutions Program. Safety Net Savings helps members develop healthy savings habits, GNOFCU said. With each cash advance, 10% will be automatically deposited in a savings account. Once $500 is accrued, GNOFCU will release $250 for withdrawal. The savings account earns interest, but does not allow ATM access. The goal is to have members create stable savings habits, and to set aside enough money for a secured share loan to establish good credit. GNOFCU, based in Metairie, La., has more than $97 million in assets.

Iowa league decides not to buy bank

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DES MOINES, Iowa (11/30/09)-The Iowa Credit Union League (ICUL) has decided to withdraw its application to purchase CreditCard National Bank of Tucson, Ariz. “Since filing the applications, we have learned that in response to the current economic environment, regulatory requirements would be imposed upon our business model which would not allow us to effectively serve our members,” said Iowa league President/CEO Patrick Jury. “Therefore, we have decided to withdraw our applications and explore other resolutions to our member needs. Iowa Corporate will continue to operate as usual throughout this timeframe,” Jury said. “Our commitment at ICUL and Iowa Corporate has been to partner with Iowa credit unions to bring this process to a positive resolution for the benefit of our members,” he added. The league filed an application in September after an extensive due diligence process. ICUL and Iowa Corporate Central CU aimed to meet the future needs of members and to find a suitable alternative for Iowa credit unions as Iowa Corporate evaluates its future direction, Jury said.

Social media opportunities growing for CUs

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WASHINGTON (11/30/09)--About 240 credit unions use Twitter, and more than 800 use Facebook, according to a recent survey on credit unions’ use of social media. The study, conducted by Callahan and Associates, indicates that credit unions are part of a growing business population that is using Twitter and Facebook to connect with a younger demographic. “It’s important for credit unions to keep in touch with younger members and to understand the new ways this member segment communicates,” said Denise Senecal, Callahan research manager. Ent FCU, Colorado Springs, Colo., launched a Facebook page last year to support the credit union’s university branch. “We quickly found we were reaching more than just our student members,” said Victoria Selfridge, director of marketing and e-commerce. “A recent social media survey showed that 44% of Ent members actively use social media websites--and of those members, 90% use Facebook. “With Facebook, we try to post information to our fans’ news feed just a few times each month, while with Twitter, we try to post a minimum of one tweet a day,” she added. Ent uses Facebook for online contests and to share information and photos. The credit union employs Twitter to promote free financial education events and community involvement activities. It also regularly searches social media sites to track what is being talked about. “You need to be aware of what is being said--good and bad,” Selfridge said. University FCU, Austin, Texas, also uses social media and found that more than just high-school or college-age students use Facebook. “We found of our 379 Facebook fans, only 18% were 18 or younger, 64% were 25-44 and the remaining 18% were age 45-plus,” said Lyndee Bennett, marketing media project manager. Through Twitter and Facebook, University FCU had a welcome-back student promotion--the Twenty09 Challenge. Members created videos that showed ways to use $20.09. The contest became a viral hit, the credit union said. Callahan also surveyed credit union members about their use of social media. It found:
* Younger members, under age 29, spend the most time on social network sites; * Younger members want and expect interactive communication from social media sites; * Facebook is the most widely used social network site among credit union members; * Half of members surveyed said they would read a credit union’s Facebook page periodically; * Members’ awareness of credit unions’ Facebook pages ranged from 5% to 16%; * Members said they learn about Facebook pages through credit union websites; * Thirty-four percent of Twitter users surveyed said they follow companies with which they do business; and * Members using Twitter expect their credit union to provide information like fraud alerts (71%), special offers (60%), financial tips (58%) and rate specials (57%).
Callahan will offer a webinar on social media Dec. 10 titled, “Engaging Members through Social Media: Challenges and Opportunities.” The webinar will focus on implementing and enhancing social media initiatives, and the results of the social media survey. Senecal is scheduled to speak at the event.

IBankrateI Should you get a CU credit card Yes

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MADISON, Wis. (11/30/09)--A credit card issued from a credit union can be a better choice than a bank-issued card in the current environment of rising bank card fees and rates, Bankrate.com said Wednesday. Because of their member-owned, nonprofit orientation, credit unions usually offer more reasonable rates and fees on cards than banks, the website said. “Median advertised interest rates on credit union cards were about 20% lower than on bank cards, according to a July study by the Pew Charitable Trusts, which compared credit cards from the 12 largest credit unions and 12 largest banks,” Bankrate said. “The median late and over-limit fee was $20 at credit unions and $39 at banks.” “Bottom line, the credit unions are offering lower upfront rates, with lower fees and less risk of unfair or deceptive practices,” Nick Bourke, author of the report and manager of the Pew Safe Credit Cards Project, told Bankrate. However, not every consumer will be a good fit for credit union cards, Bankrate added. The more generous rebates of major bank card issuers may be preferable for rewards cardholders, while consumers with large balances and high interest rates would benefit from a credit union card. To read the article and to see a list of pros and cons for credit union credit cards, use the link. Also, a similar article appeared in Barron’s about the Pew Charitable Trusts study. Use the link for a video.

CUNAs Mad City Money game a hit at CNYIN event

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ONTARIO, Calif. (11/30/09)--Several individuals said they will implement Mad City Money at their credit unions after participating
Cathy Arra, California and Nevada Youth Involvement Network, helps Mark Davey, CEO of Antelope Valley CU, Lancaster, Calif., purchase a home during a Mad City Money simulation.
Click to view larger imageMike Jones, branch manager at Educational Employees CU, Fresno, Calif., and California and Nevada Youth Involvement Board member, participated in a recent Mad City Money simulation by working as the manager of a credit union.
Click to view larger imageMarlene Myers, California and Nevada Youth Involvement Network vice chairman, and Bruce Milgrom, Modesto's First FCU CEO, Modesto, Calif., were among 25 participants in a Mad City Money simulation at the California and Nevada Credit Union Leagues’ annual meeting and convention.(Photos provided by the California and Nevada Credit Union League)
in the program at the California and Nevada Credit Union Leagues’ Annual Meeting and Convention. “This program gets students immersed in an adult world complete with an income, responsibilities such as children and debt, and gets them to make real-world decisions such as home and auto purchases, monthly bills, paying down debt and saving for the future,” said Wendy Zanotelli, chief operating officer of UNCLE CU, Livermore, Calif. Rick Hoffman, CEO of Inland Empire CU in Pomona, Calif., and Mark Davey, CEO of Antelope Valley FCU, Lancaster, Calif., agreed. “It is a great first step for high school students,” Hoffman said. Mad City Money, a simulation game sponsored by the Credit Union National Association (CUNA), allows participants to build a budget and tackle financial responsibilities, such as buying a home or paying off debt. The game targets youth. It was offered by the California and Nevada Youth Involvement Network (CNYIN) at the leagues’ conference. Twenty-five credit union CEOs, volunteers and employees participated. Participants were given financial responsibilities--from selecting housing, and transportation, and buying food and other necessities--while building a budget. They also could visit a credit union in the simulated “town” for financial advice. Representatives from Silver State Schools CU, Las Vegas; Caroline Lane, senior vice president, CO-OP Financial Services; Dean Archer, CUNA vice president of sales and strategic business development, and CNYIN board members, acted as merchants.

Illinois DesjardinsMaxwellHerring awards announced

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NAPERVILLE, Ill. (11/25/09)--The Illinois Credit Union League has announced the recipients of its statewide Desjardins, Dora Maxwell and Louise Herring awards. First place winners of the Desjardins Youth Financial Education Award in their asset categories were:
* Prairie Trail CU, Joliet, $35 million to $75 million; and * Financial Plus CU, Ottawa, $75 million to $250 million assets; and * Scott CU, Collinsville, more than $250 million.
The Dora Maxwell Social Responsibility Awards went to these first place winners:
* Streator Onized CU, Streator, $100 million to $200 million in assets; * GCS FCU, Granite City, $200 million to $500 million; and * Great Lakes CU, North Chicago, more than $500 million.
First place in the Louise Herring Award for Philosophy in Action went to GCS FCU, in the more than $250 million asset category.

Ohio attorney general sues national ratings agencies

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COLUMBUS, Ohio (11/25/09)--Ohio Attorney General Richard Cordray has filed a lawsuit against three national investment credit ratings agencies--Standard & Poor's, Moody's and Fitch--saying their ratings were false and misleading. The suit was filed Friday in the U.S. District Court for the Southern District of Ohio on behalf of five Ohio public employee retirement and pension funds. It charges the agencies wreaked havoc on U.S. financial markets by providing unjustified and inflated ratings of mortgage-backed securities in exchange for lucrative fees from securities issuers, said Cordray's press release. The agencies provide investments ratings for entities such as corporate credit unions and CUNA Mutual Group. In Ohio, "the rating agencies assured our employee pension funds that many of these mortgage-backed securities had the highest credit ratings and the lowest risk," said Cordray, adding the companies "sold their professional objectivity and integrity to the highest bidder." At issue is the agencies' highest investment grade rating--"AAA"--which the suit alleges were given to securities that cost the Ohio funds more than $457 million. The lawsuit is brought on behalf of the Ohio Public Employees Retirement System, the State Teachers Retirement System of Ohio, the Ohio Police and Fire Pension Fund, the School Employees Retirement System of Ohio and the Ohio Public Employees Deferred Compensation Program. The suit is Cordray's eight lawsuit aimed at holding Wall Street entities accountable. The suits have recovered more than $8 billion to date. For more detail, use the link.

Media pick up CFACUNAs holiday spending tips

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MADISON, Wis. (11/25/09)--Several prominent media outlets picked up findings from Monday’s Credit Union National Association (CUNA) /Consumer Federation of America (CFA) press conference on their annual holiday shopping survey and spending tips. Among those reporting the conference were CBS news.com, America Online’s Walletpop, the San Francisco Chronicle, The Wall Street Journal and NBC.com. The conference also generated considerable coverage in local media markets around the U.S., including WCBS radio in New York City, and WTOP radio in Washington. D.C., plus Fox TV News in Washington, and local TV coverage on stations in Chicago, Austin, Sacramento, San Francisco, Detroit, Nashville, Salt Lake City, Buffalo, Memphis, Birmingham, Ala. and Las Vegas--among others. CUNA Chief Economist Bill Hampel predicted that consumer spending during the upcoming holidays could increase by as much as 3% compared to 2008's numbers. Speaking during the press conference, Hampel said that 43% of consumers surveyed this year said they intend to cut back their holiday spending, compared to 55% last year (News Now Nov. 24). The San Francisco Chronicle, in a consumer column about holiday shopping tips written by Kathleen Pender, quoted Hampel in one of her tips about sticking to a predetermined holiday spending limit. “Even if you go over your limit, keeping the list will make you a more restrained spender than having no list at all,” she wrote. “It’s like the difference between going to the grocery store when you're hungry versus after a big meal,” Hampel told her.

N.J. governor signs deposit law including CUs

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TRENTON, N.J. (11/25/09)--New Jersey Gov. Jon Corzine signed legislation that extends the range of investments for state of New Jersey Cash Management Fund and State Pension Fund monies to credit unions. The New Jersey Credit Union League lobbied to include credit unions in the legislation to make additional lending capacity available to local financial institutions and spur economic development (The Daily Exchange Nov. 23). The bill extends for up to one year the range of investment vehicles in which the state’s director of the Division of Investment may invest state monies that are intended for investment in fixed income, debt securities and non-convertible preferred stock. The bill authorizes the director to invest such monies in any issue of obligation provided that the Federal Deposit Insurance Corp. (FDIC) or the National Credit Union Share Insurance Fund guarantees the obligation. “This is the first time credit union share insurance has been given parity with FDIC coverage in New Jersey law,” said league President/CEO Paul Gentile. “It’s a significant step forward and will help our efforts to enable credit unions to become eligible depositories for municipalities, school boards and counties,” he concluded.

CUs get in the holiday spirit

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MADISON, Wis. (11/25/09)--As the holidays near, credit unions nationwide are participating in several activities to celebrate
Click to view larger image Security Service FCU recently offered a holiday card contest with the Boys and Girls Clubs of San Antonio. Club member Kahill West, left, received a gift basket for his winning design from Molly Daniels, Security Service FCU vice president of human resources. Carlos Sifuentes (not pictured) was the other contest winner. (Photo provided by Security Service FCU)
Click to view larger image Employees of Freedom CU, Warminster, Pa., marched in the 49th annual Hatboro Holiday Parade with Dollar Dog, the credit union’s mascot. (Photo provided by Freedom CU)
Click to view larger image Medical Area FCU (MAFCU), Brookline, Mass., donated $11,000 to two nonprofits through a raffle for a Honda hybrid at the credit union. From left are Rob Kimmet, senior vice president of marketing and public relations for the Massachusetts Credit Union League; Linda Bessom, Massachusetts Coalition for the Homeless; Joan Kuhn, MAFCU board chair and chair of the league’s Social Responsibility Committee; Carrie Eldridge-Dickson, Boston Health Care for the Homeless Program; and Russ Ward, Prime Honda. (Photo provided by Medical Area FCU)
Thanksgiving and Christmas, and to help their members and local communities. The activities range from raising money for nonprofit organizations to participating in community parades.
* Maine credit unions’ Campaign for Ending Hunger presented a $1,600 check to Good Shepherd Food Bank that helped buy 256 turkeys for food pantries in the state, said the Maine Credit Union League. This is the fourth consecutive year that Maine credit unions have contributed money to help Good Shepherd provide turkeys. This year’s contribution is the largest to date. * Medical Area FCU, Brookline, Mass., raised $11,000 for the Massachusetts Coalition for the Homeless and Boston Health Care for the Homeless Program. The funds were raised through a raffle for a 2010 Honda Insight hybrid. The raffle was a joint project with the Massachusetts Credit Union League. * Security Service FCU, San Antonio, will create holiday cards based on the winning entries of a holiday card contest. The credit union gave gift baskets to the two winners--Kahill West, 14, and Carlos Sifuentes, 6--and a $1,000 donation to the Boys and Girls Clubs of San Antonio. The credit union received nearly 200 entries. * About 35 Freedom CU employees and their family members marched in the 49th annual Hatboro Holiday Parade with Dollar Dog, the credit union’s mascot. The parade is the largest parade in Bucks-Montgomery County in Pennsylvania. Freedom CU is based in Warminster, Pa. * Andrews FCU, Suitland, Md., donated a computer to Operation Santa, a nonprofit organization that provides needy families with toys and clothing during the holidays. The credit union also donated money to Operation Warm Heart. The money will be used to give food baskets to 250 military families during the holidays. It also donated funds to help soldiers and their families affected by the Fort Hood shootings, which took place earlier this month. * San Mateo CU, Redwood City, Calif., is sponsoring Santa’s visit to a local mall. The credit union also will be on site with Santa to open up new credit union accounts for area residents. * Jetstream FCU, Miami, Fla., is collecting food and money at its six branches for Our Lady’s Hand Hearts Outreach Ministry, an agency of the Daily Bread Food Bank. * Pennsylvania State Employees’ CU sponsored a float Saturday in a holiday parade in Harrisburg, Pa. The float hosted representatives from two local nonprofits. Employees also escorted a Cookie Monster balloon and handed out animal crackers to the crowd. (Life is a Highway Nov. 24).

Kentucky league awards presented at 75th celebration

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LOUISVILLE, Ky. (11/25/09)--The Kentucky Credit Union League presented several awards to credit union representatives at its 75th
Bobby White, Park Community FCU, received the Outstanding Young Leader award from the Kentucky Credit Union League. Pictured (from left) are Brian Tyler, East KY Employees FCU, the 2006 recipient; White; and Lynn Huether, league board chair.
J. Huston Reinle, Autotruck FCU, received the Frank Moore Outstanding Professional Award from the Kentucky Credit Union League. Pictured are: Pat Ferry, last year’s recipient; Reinle; and Lynn Huether, league board chair.
Reba Watson, Fort Knox FCU, was honored with the Kentucky Credit Union League’s Steve Brody Outstanding Volunteer Award. Pictured are Henry Wheatley, recipient from 2000; Watson; and Lynn Huether, league board chair. (Photos provided by the Kentucky Credit Union League)
anniversary celebration in Fort Mitchell, Ky. The league presented the Frank Moore Outstanding Professional Award to J. Huston Reinle, president/CEO of Autotruck FCU in Louisville. He also received a service award from the league that recognized 25 years of service on its board of directors (By the Way newsletter Nov. 23). Reba Watson, Fort Knox FCU, Radcliff, received the Steve Brody Outstanding Volunteer Award, which acknowledged more than 30 years of service. Bobby White, Park Community FCU, Louisville, was presented the Richard B. Zimmerman Outstanding Young Leader Award. The league also announced winners of the state-level Dora Maxwell Social Responsibility Award:
* Kentucky Employees CU, Frankfort, $20 million to $50 million in assets; * Autotruck FCU, $50 million to $100 million; * Park Community FCU, $200 million to $500 million; * L&N FCU, Louisville, more than $500 million; and * Commonwealth CU, Frankfort, honorable mention, more than $500 million in assets.
ClassAct FCU, Louisville, received the Louise Herring Award for Philosophy in Action, and Park Community FCU, received the Desjardins Youth Financial Education Award.

Entries now accepted for 2010 Diamond Awards

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MADISON, Wis. (11/25/09)--The CUNA Marketing and Business Development Council (CMBDC) is accepting entries for the 2010 Diamond Awards. The awards feature 34 categories in marketing and business development. Entries are evaluated on strategy, creative concept, design and production, copy and communication, and results. Entries for the awards must be received by 5 p.m. CST on Jan. 15. Those received by Jan. 8 will receive discounts. Web site marketing category entries must be received no later than Dec. 16. Judging will take place Jan. 27-29. Winners will be notified through e-mail by Feb. 5. Awards will be presented at the 2010 CMBDC Conference March 21-24 in Washington, D.C. For more information, use the link.

CUNA closed Thursday and Friday no INews NowI

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WASHINGTON and MADISON, Wis. (11/25/09)--The Credit Union National Association (CUNA) will be closed Thursday and Friday in observance of the Thanksgiving holiday. News Now will not publish on Thursday and Friday, but it will resume regular publication on Monday.

CU System briefs (11/24/2009)

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* LAS VEGAS (11/25/09)--A Nevada state senator who co-sponsored the state's new financial literacy law, SB 317, spoke at a free workshop on offering financial literacy education in classrooms Nov. 17. Fifteen education, business and credit union professionals heard State Sen. Allison Copening (D-6) discuss the law, which requires
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financial literacy to be part of the high school curriculum. Gov. Jim Gibbons signed the bill into law recently. The seminar, sponsored by the California and Nevada Youth Involvement Network (CNYIN), was hosted by Silver State Schools CU, Las Vegas. After Copening's visit, CNYIN board members taught summarized versions of the National Endowment for Financial Education (NEFE) curriculum's chapters. They included Kate Robinson, electronic marketing specialist at Greater Nevada CU, Carson City, Nev.; Crystal Lyon, Silver State Schools CU business development manager; and Michael Lee, member education manager, The Golden I CU, Sacramento, Calif. The workshop prepared instructors for teaching NEFE's seven-unit High School Financial Planning Program. Pictured, from left, are Lee, Copening, Lyon and Robinson. (Photo provided by the California and Nevada Credit Union Leagues) … * SAN ANTONIO (11/25/09)--San Antonio-based Security Service FCU
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has declared itself as a supporter of employees who serve in the National Guard and Reserve. David Reynolds, seated, president/CEO of the more than $5 billion asset credit union, signs the declaration while flanked by volunteer committee members of the Employer Support of the Guard and Reserve (ESGR), from left, Caryl Hill, Gary Walston and Elvin Schofield. ESGR is under the directive of the U.S. Department of Defense and helps to gain civilian employer support for guard and reserve service members. (Photo provided by Security Service FCU) … * CHANDLER, Ariz. (11/25/09)--Chandler, Ariz.-based First CU hopes to help out the local economy by infusing millions of dollars into the communities it serves in the form of new loans. Its $50 Million Loan-A-Thon is underway until Dec. 31. First CU is taking applications for auto, personal, home, home equity, and business loans. While many financial institutions have stepped away from lending, First CU has stepped up to the plate, said the credit union's press release …

Small Business Caucus gets input from MnCUN director

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ST. PAUL, Minn. (11/25/09)--Chuck Albrecht, president/CEO of Mid-Minnesota FCU, Brainerd, Minn., and a board member of the Minnesota Credit Union Network (MnCUN), highlighted credit unions' service to small businesses during a state legislators' forum Nov. 19. Led by the Minnesota Small Business Caucus, a bipartisan coalition of state legislators, the meeting provided elected officials insight into efforts by financial institutions and community organizations to assist small businesses as they work through the recession. In his statement to the caucus, Albrecht outlined the steps his credit union took to assist small businesses in the community. Albrecht told caucus members that the credit union's role was to "provide the loans that are needed in the community. "Despite the press that you may have seen about tight credit, Minnesota credit unions have seen a 7% increase in member business lending over the past year," Albrecht said. "I would attribute that increase to credit unions being conservatively managed, which has put them in a relatively strong position to lend to businesses." Albrecht explained that one obstacle that hinders the credit union's service to small business is a federal cap that limits member business lending to 12.25% of a credit union's assets. This lending constraint restricts credit unions from fully contributing to the initiative to restore credit and nurture the economic recovery, he said. The caucus is focusing on addressing the challenges and opportunities facing small businesses in Minnesota. In forums and meetings throughout the state, the group is seeking input on how to make Minnesota a more competitive place for businesses. The discussions likely will form the basis for legislative action to assist small businesses, said MnCUN. The caucus plans to pursue a pro-business agenda that will create jobs and help expedite Minnesota's economic recovery. "Credit unions provide an essential service to their communities through member business lending," said Mara Humphrey, MnCUN vice president-governmental affairs. "Legislators' interest in hearing from credit unions on this issue indicates their recognition of the role credit unions are playing in the credit restoration and the economic recovery process."

Members United reports 149.6 million net loss

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WARRENVILLE, Ill. (11/24/09)--Members United Corporate FCU recorded a net loss of $149.6 million for October, according to financial statements released Friday. The Warrenville, Ill.-based corporate recorded a charge of $74.6 million as it fully impaired 100% of its remaining investment in U.S. Central capital shares, and a charge of $77.1 million for additional other-than-temporary impairments (OTTI) on marketable securities. The charge excluded OTTI on Ambac-wrapped investments, which would have amounted to an additional $37.5 million. Members United stated that while Clayton's cash flow projections fully discount Ambac support after Dec. 31, 2010, the corporate elected to not take the additional OTTI at this time. “Members United is in the process of reviewing Clayton's position and also is reviewing regulatory reports that were released on Nov. 18. This review is anticipated to be completed by Dec. 31 in connection with the year end close process,” the corporate said. Members United’s retained earnings as of Sept. 30 are $2.80 million, and its base net income for October is $2.05 million. Membership capital share balance is $292 million, resulting in an estimated depletion percentage of 50.2%. The depletion will be processed on Nov. 30. The corporate also reported that as of Oct. 31:
* Total fair value of assets totaled $8.5 billion; * Cash and cash equivalents and overnight deposits at U.S. Central amounted to $3.2 billion; * Fair value of marketable securities was $3.7 billion; * Loans to members accounted for $0.8 billion; and * Term deposits represented $0.7 billion.
The corporate’s capital ratio is 1.56%, which is below the 5.0% regulatory requirement. The National Credit Union Administration issued an order April 21 allowing corporates to reference their Nov. 30, 2008, capital levels. Members United’s capital level as of Nov. 30, 2008, exceeded the 5.0% requirement at 7.25%.

CU System briefs (11/23/2009)

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* BEAVERTON, Ore. (11/24/09)--The Credit Union Association of Oregon (CUAO) announced its 2009 Credit Union Advocates of the Year. The award is divided into two categories: volunteer and professional. Mark Turnham, president/CEO of NW Priority CU, received the award in the professional category. He has served in a leadership role on his chapter board, chapter president for 15 years, and as a board member for CUAO. He currently serves on the Governmental Affairs Committee. Don Gleason, Northwest Community CU, received the award in the volunteer category. He has attended credit union advocate training, Credit Union Day at the Capitol, and the Credit Union National Association Governmental Affairs Conference in Washington, D.C. CUAO announced the awards at its annual meeting and convention in Salem, Ore. (Photos provided by the Credit Union Association of Oregon) ... * NORTH HIGHLANDS, Calif. (11/24/09)--SAFE CU, North Highlands, Calif., received the Beacon Award from the Richard Myles Foundation, the state foundation for credit unions in California and Nevada. The credit union received the award during the Beacon Awards Gala Reception Nov. 15 in Las Vegas. SAFE CU was honored for its in-school branch program at two local high schools. The Beacon Award recognizes promising or exemplary financial education programs or projects that provide information to the broader credit union community and general public. SAFE CU has $1.4 billion in assets ... * SPOKANE, Wash. (11/24/09)--Ed Southworth, former president of Safeway CU in Spokane, Wash., died Nov. 15 at the age of 86 (The Oregonian Nov. 22). Southworth worked for Safeway Inc. for 40 years. He also was president of the Safeway Companies Employee Association. Safeway CU, which serves employees of Safeway Inc., has $47.6 million in assets ... * GREAT FALLS, Mont. (11/24/09)--1st Liberty CU, Great Falls, Mont., is in its 10th year of Operation Happy Holiday, a project that sends holiday boxes to Montana troops stationed overseas. The project started in 1999 by former President/CEO Stephen Kubrick and has sent about 3,167 boxes and 234,000 cookies to troops (Great Falls Tribune Nov. 20). While many volunteer to bake cookies, gather supplies and pack boxes, the credit union is seeking donations for the content of the boxes. Each box costs about $40. Some of the money is covered by fundraisers. 1st Liberty CU has $125 million in assets ...

Mich. CU gives 100 to 100 people in 100 days

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LIVONIA, Mich. (11/24/09)--Co-op Services CU Friday ended its 100 days of giving away $100 bills to 100 people. The $385.2 million-asset, Livonia, Mich.-based credit union randomly distributed $10,000 in cash to people in roughly a dozen cities in the metropolitan Detroit area (Detroit Free Press Nov. 20). The credit union’s marketing campaign encouraged people who received a $100 bill to give the money back to their communities in some manner, the newspaper said. Some of the givebacks included helping a neighbor, donating clothes or volunteering. The campaign also garnered publicity for Co-op and its more than 52,000 members, the paper said. “We created this army of people trying to do good things for other people,” Greg Wohler, president of Edge Creative Group, an ad agency that worked with Co-op to develop “Project 100,” told the paper. With the end of the giveaway campaign, Co-op is unveiling a new promotion wherein it gives members $100 for opening a checking account if they agree to donate the money to charity, the paper said. To read the article, use the link.

Wegner Dinner ticket registrations open

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WASHINGTON (11/23/09)--Credit union leaders and supporters can now register for the 22nd Annual Herb Wegner Memorial Awards Dinner, presented by the National Credit Union Foundation (NCUF) Feb. 22, during the Credit Union National Association’s 2010 Governmental Affairs Conference (GAC). The ceremony will showcase four of the credit union movement’s highest national honors:
* Lifetime Achievement Award: Dick Heins, retired president/CEO of CUNA Mutual Group in Madison, Wis.; * Individual Achievement Award: Dick Ensweiler, president/CEO of Texas Credit Union League in Farmers Branch, Texas; * Outstanding Program: Biz Kid$, in Seattle, Wash. In its third season, this financial education show is the highest-carried program on American Public Television and is the first series sponsored by America’s Credit Unions; and * Outstanding Organization Award: HarborOne CU, Brockton, Mass.
Seats can be reserved online through a secure page on the NCUF website. Registrants also can download a printable form, complete it off-line, and fax or mail their completed form to NCUF. For the third straight year, the dinner will take place at the Grand Hyatt Washington.

Meriwest CU closes Tucson branches

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TUCSON, Ariz. (11/24/09)--Meriwest CU announced it will close its two Tuscon financial centers Jan. 1, but members will continue to be served through Shared Branching. Meriwest, based in San Jose, Calif., serves members in California and Arizona. The credit union is closing the two Tucson branches--the only two it has in the state--in a move to consolidate its operations. “Prudence dictates that we consolidate some of our operations to better weather this [economic] storm for the membership as a whole,” the credit union said in a statement. Meriwest has no plans to close additional financial centers. “Our capital is strong, our operations are excellent and our expenses are well below peers',” the credit union said. Staff at the Tucson centers will remain until the centers close. The staff will be given support, a compensation package, and Meriwest will contact other credit unions in the area to identify job opportunities or provide references, Meriwest said. Members in the Tucson area will continue to be served by Meriwest through Shared Branching. Meriwest provided a list of credit unions members can visit for Shared Branching services on its website. Members also can conduct ATM transactions through 7-Eleven VCom units in the Tucson area. Meriwest has $1.3 billion in assets. For more information, use the link.

Mass. CU CEO to fin pub CUs important as ever

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SOUTHBRIDGE, Mass. (11/24/09)--Credit unions are as important as they have ever been to U.S. consumers, especially in the current troubled economic environment, a Massachusetts credit union CEO wrote in a column for a local financial publication. “U.S. credit unions are celebrating their centennial year in the midst of gloomy economic times,” Jeffrey Davenport, CEO of Southbridge (Mass.) CU, wrote in the Worcester Business Journal (Nov. 23). “Many Americans are hurting, and folks are apprehensive about their economic prospects. “Credit unions wish this weren’t the case, and they are stepping in to help whenever possible,” he continued. “But the current situation is an important reminder that credit unions themselves were founded from adversity such as this. It is also a reminder of their proud history of putting people before profits to provide access to affordable financial services to all their members.” Credit unions’ cooperative business model and emphasis on public service through adherence to conservative financial practices has allowed them to be a sanctuary for the past 100 years during times of financial crisis, Davenport wrote. “And even in the midst of the current market crisis, credit unions have been repeatedly heralded as an important source of stability in the financial sector,” he added. “Indeed, credit unions remain committed to helping our citizens retrieve the economic power lost during the current crisis and to recover their homes lost because of the mortgage market upheaval. “Not only is this the reason that credit unions exist, it is also what they do best. And it is this proud, 100-year tradition of being part of the solution rather than the problem that credit unions are celebrating today,” Davenport wrote. To view the column, use the link.

Small CUs will provide some wage increases

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MADISON, Wis. (11/24/09)--Although an unprecedented number of small credit unions indicated they would not be providing wage increases for all of their employees in 2009, the majority will provide wage increases for at least some of their employees, according to the Credit Union National Association’s (CUNA) recently released 2009-2010 Small Credit Union Staff Salary Survey.
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More than 40% of credit unions with $1 million to $35 million in assets reported freezing wages for some of their employees--a level not seen in over 25 years during which CUNA has studied credit union compensation and benefits packages. However, 93% of these credit unions said they expected to provide a salary/wage increase to at least some of their employees in 2009. As is the case across industries, wage increases are much lower than previous years, CUNA said. The average 2009 budgeted percentage salary increases for management and non-management employees are 2.6% and 2.7%, respectively. Anticipated 2010 percentage salary increases are lower, at 1.9% for managers and 2.1% for non-managers. However, while small credit unions typically provide wage increases that are lower than larger credit unions, 2009 budgeted wage increases and 2010 projected wage increases among credit unions with under $35 million in assets are comparable to the wage increases of credit unions overall--all credit unions with $1 million or more in assets. “The fact that wage increases for 2009 and 2010 among small credit unions are in line with their larger counterparts shows that these credit unions are working hard to reward their employees amidst a difficult economy and operating environment,” said Beth Soltis, CUNA senior research analyst. “To control payroll costs in 2009 and 2010, employers nationwide are promoting fewer employees, reducing staff, revising variable-pay programs, and implementing salary and hiring freezes,” she added. “The challenge for credit unions is to take the proper action, yet remain competitive in the labor market and retain high-quality employees. It appears that small credit unions are doing just that.” The survey provides nationwide compensation data--including base salaries, incentives, bonuses and total compensation--for 30 full-time positions and eight part-time positions for credit unions with $35 million or less in assets. Results are categorized by asset size, region, and many other points of comparison to help credit unions attract or retain staff. For more information, use the link.

CUs begin holiday activities

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MADISON, Wis. (11/23/09)--Credit unions nationwide are going above and beyond to help their communities prepare for Thanksgiving this year. Their activities range from donating hundreds of turkeys to helping save one town’s holiday celebration and parade. Service CU, Portsmouth, N.H., donated 50 turkeys to the Portsmouth Salvation Army on Thursday. The credit union’s Thursday donation brings the total number of turkeys the credit union has donated to communities near its branches to 625. Service CU also donated turkeys to its 16 branches on military bases in Germany (Seacoastonline.com Nov. 20). The credit union is planning two other holiday drives. Service has been collecting canned goods and nonperishable foods for the local food bank, and will offer a Wish Tree event where members can buy a gift for a child in need, the newspaper said. Andrews FCU, Suitland, M.D., partnered with Operation Best Wishes to sponsor free holiday voice messages for families of deployed service members. At the event, the Operation team set up a mobile webcast unit to record greetings from families and friends. Seventy-seven people taped messages for their loved ones during the event. Members Cooperative CU, Cloquet, Minn., helped to save Cloquet’s traditional “Home for the Holidays” event, which was in danger of being cancelled. Robbie Thompson, vice president and general counsel at Members Cooperative, thought it was “terrible” that the town’s celebration might go away. He asked the credit union if he could use his company time to volunteer for the event, and asked credit union President Tammy Heikkinen if Members Cooperative would be one of the event’s sponsors. She agreed to both requests (Duluth News-Tribune/Cloquet Pine Journal Nov. 3). The credit union pledged $1,000 for the event, which will take place Saturday. The celebration will offer horse-drawn trolley rides, a bonfire, parade, and food collection to help a local food bank. Virginia CU employees in Richmond recently contributed half of their workday to help at Central Virginia Foodbank. The employees sorted canned goods, pasta, rice and perishable foods like fruit and bread. Virginia food pantries and soup kitchens rely on the food bank as a source for the items they distribute. Virginia CU also donated $3,375 to the bank through employee fundraising efforts, an amount that was matched by the credit union. A group of more than 40 volunteers from Redwood CU, Santa Rosa, Calif., helped out at a Harvest for the Hungry gardens in Santa Rosa. Employees weeded, mulched, piled compost, raked, sowed, planted and performed other tasks to help the nonprofit organization, which grows and distributes about 10,000 pounds of organic fresh produce, herbs and flowers to shelters and food banks in need.

IWalletpopI CUs a good option for fee-weary consumers

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MADISON, Wis. (11/23/09)--“Fee-weary consumers” looking for a respite from bank fees and charges should consider credit unions and small community banks, according to a Friday column in WalletPop. The column, “How to find a small bank or credit union” by Martha C. White, said that many readers wrote in response to a previous column about sneaky bank practices that consumers should “ditch the big bailout-recipient banks in favor of small community banks or credit unions.” As a result, Walletpop talked to some professional finance advisers for their input on the matter. The article mentions the first step for consumers is to use the Credit Union National Association’s (CUNA) credit union locator tool to find a credit union their area that they can join. (See the link). “I think a partnership model is better than a corporate profit model when you're selling a service,” Kathleen Day, spokesperson at the Center for Responsible Lending, told Walletpop. “ … A business model mandating that profits be funneled back into the enterprise is, for many consumers, a big selling point,” White wrote. “Especially if you have a large nest egg you plan to keep in a savings account, it’s worth your while to seek out a bank or credit union that will give you a decent interest rate,” White concluded.

Romanian CUs note growth need for PR

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GREENSBORO, N.C. (11/23/09)--Romanian credit unions’ memberships have dramatically increased, leading to a need for better marketing and public relations, according to the North Carolina Credit Union League (NCCUL) and the World Council of Credit Unions (WOCCU). The two organizations visited Romania last week. Victor Miguel Corro, WOCCU senior manager for international partnerships, and Jeff Hardin, NCCUL director of communications, visited Romania Nov. 15-19. The trip, co-sponsored by the Romanian Federation of Credit Unions and WOCCU, is one of two visits that will assist the Romanian Federation and its credit unions as they continue to grow and build capacity. The week’s activities also were geared toward laying the groundwork for a partnership agreement between the Romanian credit unions and a league or credit union in the U.S. In March, WOCCU Executive Director Brian Branch and NCCUL President/CEO John Radebaugh will visit Romania and provide more information and administrative support to the Romanian credit unions and the federation. WOCCU has helped Romanian credit unions with training and policy guidance since the 1990s. It also helped them charter the federation five years ago. Since then, the federation and its 17 affiliated credit unions have grown dramatically in membership, assets and member trust. Called Casa de Ajutor Reciprocs--CARs or “Mutual Help Houses”--in Romania, credit unions operate as non-government organizations and lie outside the banking system. CARs offer savings accounts and small loans--usually made for terms of five years or fewer. Like their counterparts in the U.S., Romanian CARs are not subject to federal taxes. In multiple credit union visits conducted Nov. 17-18 by Corro and Hardin, Romanian staff pointed to training on marketing and public relations as key needs. For example, St. Gheorghe CAR advertises on radio and in local newspapers, but is looking to grow membership and build its brand. “We need for more people to understand how we are different from the other credit unions, and we need more credit unions outside the system to join the Federation,” said Romanian Federation CEO Florin Simion. Simion, Corro and Hardin visited St. Gheorghe Casa de Ajutor Recirpoc. While its members understood and appreciated the credit union difference, the staff said the message needs to be understood by a wider audience. Fokkus CAR in Targu Secuiesc also seeks marketing and public relations strategies to enhance its story. A local factory originally sponsored the credit union but the credit union later moved into its own building and changed its name. The factory later shut down. Fokkus has grown steadily in the past decade, and has nearly 3,000 members in a town of 20,000. When asked why the credit union had been so successful in building and keeping members, Manager Ildiko Croitoru replied, “They know us to be honest and that we will keep our word.” Members value this type of service since banks would often charge unnecessary fees to add to their profits, she added. Effective marketing and public relations training is needed to help the credit union grow, especially in its new branch location in a nearby village. Fokkus advertises in local newspapers and recently launched a web site, Croitoru said. The need for a more visible presence through marketing and public relations also extends to the Federation. To help the credit unions continue to grow and develop capacity, more affiliates need to be added and the credit unions need to lobby for legislative changes. “We haven’t hit critical mass yet to approach the government and get the changes we need,” Simion said. Hardin will file a report to the Federation and WOCCU to assist in helping with marketing and public relations at the Federation and individual credit unions. “The credit union story here is a good one,” Corro said. “We look forward to working together with the Romanian credit unions to help them expand their ability to reach the people who are in need of affordable and ethical financial services.” NCCUL has two partnerships via WOCCU’s International Partnership Program. The first is a long-standing partnership with the South American country of Suriname, while the second is a partnership agreement with one of the largest credit unions in Mexico, Caja Morelia. To see a video about the visit, use the link.

Canadians consider federal CU legislation

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OTTAWA, Canada (11/23/09)--The Canadian government is considering a bill to create a federal licensing option for the nation’s 427 credit unions. Canadian credit unions are currently regulated and licensed on a provincial basis. Federal legislation would give credit unions the power to operate across provinces. However, a federal licensing option could also bring credit unions in closer alignment with the country's banks, a factor that concerns some credit union professionals and volunteers, said the World Council of Credit Unions (WOCCU).
Click to view larger image Daniel Burns, World Council of Credit Unions (WOCCU) director and vice chair of Central 1 Credit Union (left), and Dave Grace, WOCCU vice president of association services, prepare to “hike the hill” in Ottawa, Canada.
Click to view larger image Canadian credit union officials (from left) Cheryl Byrne, Credit Union Central of Canada (CUCC) vice president; Scott Kennedy, CUCC board member; and Marty von Wuthenau, government relations director for Central 1 Credit Union, prepare to visit legislators in Ottawa, Canada. (Photos provided by World Council of Credit Unions)
Federal licensing was one of several issues facing credit union representatives who participated in Canada's inaugural “hike the hill” lobbying efforts Nov. 17 in Ottawa, Ontario. The Capitol Hill visits were organized by Credit Union Central of Canada (CUCC), a WOCCU member organization. The effort netted credit union representatives meetings with 42 separate legislators from Canada's prime minister's office and parliament, a response that surprised and pleased participants. “We were hoping for 20 to 25 appointments and were overwhelmed with the response from 42 parliamentarians wanting to meet with credit unions,” said Daniel Burns, first vice chair of Central 1 Credit Union and a WOCCU director. “We were extremely pleased with the results from our meetings and how receptive members of parliament were to our issues.” The proposed federal credit union legislation was a key topic of discussion, Burns said. Equally important in discussion were the issues of achieving a competitive balance with the government-run Farm Credit Canada and Business Development Canada and the need to ensure greater viability of the Interac card network in the face of new competitive threats from Visa and MasterCard. During a Nov. 16 meeting of CUCC’s Legislative Affairs Committee, chaired by Burns, participants discussed pros and cons of the federal licensing option. Amendments to the country's Bank Act could lead to the creation of federal credit union legislation, a move designed to encourage the development of what Canada's Ministry of Finance described as a strong second-tier banking system. However, the possible amending of the Bank Act to create cooperative banks, rather than allocating the legislative resources to amend the current Cooperative Credit Act or create a new federal credit union act, raises red flags for many Canadian credit unions. If passed as initially drafted, the law would offer Canadian credit unions the option to be licensed as cooperative banks, enabling them to operate across provinces while still maintaining their credit union identities. Credit unions would keep some of their existing powers as provincially licensed institutions, but now would be supervised and receive deposit insurance through Canada's Office of the Superintendent of Financial Institutions, potentially blurring the distinction between commercial banks, and member-owned and operated financial cooperatives. In August, CUCC distributed a consultation paper among its credit unions discussing the federal licensing option. The CUCC board is reviewing industry feedback and the proposal from the Ministry of Finance and will be announcing its initial position by the end of November. In countries such as the U.S. and India, multi-state branching similar to the options Canadian credit unions are facing under the proposed law has led to industry growth. However, caution is advised to make sure any new regulations result in better service to members, said Dave Grace, WOCCU’s vice president of association services, who participated in both the meeting and Capitol Hill visits. “It's important to have legislative and regulatory options, but those options must be equal to or better than what is currently offered through provincial regulations,” Grace said. “Strengthening Canada’s credit unions is critical, but so is differentiating them from large national banks. The second service tier, as Canadian legislators call it, can help balance public risk and improve consumer service, especially in the face of global economic challenges like those recently affecting countries worldwide.”

Minn. league president gets press presence

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ST. PAUL, Minn. (11/23/09)--Minnesota Credit Union Network (MnCUN) President/CEO Mark D. Cummins made his debut as a regular industry columnist in early November, highlighting the importance of credit unions as financial cooperatives in Minnesota’s Finance & Commerce newspaper. His article, entitled “Credit unions are built to last,” was MnCUN’s first published editorial in Finance & Commerce’s “Association Update” section. “We’ve been working really hard this year to cultivate relationships with all the major metro finance pubs,” Kristina Wright, MnCUN vice president of communications, told News Now. “In our second get-to-know-you meeting with them, we discussed their new ‘Association Update’ column and they asked us to take part. There are a number of associations that fit with their readership--us being one of them--so they asked us to join.” The article served as a platform to educate consumers about the credit union difference, focusing on credit unions’ perseverance in today’s economy and the safety and security of members’ deposits. “Credit unions operate more conservatively with less risk. They focus on serving and educating members … not forcing loans on them just to make a quick buck,” Cummins wrote. He went on to acknowledge feelings of mistrust in the financial industry and pointed out that Minnesota credit unions’ capital levels are higher than 10%, well above regulators’ definition of well-capitalized, which is 7%. Despite the fact that credit unions are still relatively small in terms of size and market-share when compared to other industry giants, Cummins mentioned that credit unions are sophisticated financial institutions in the business of serving consumers. “In today’s unprecedented times, we all want to save some money and feel secure in our finances,” Cummins wrote. “It’s good to know that you can turn to your local credit union for safety, security and strength.” To read the column, use the link. MnCUN’s next column is slated to run Dec. 4.

CU System briefs (11/20/2009)

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* PITTSFIELD, Maine (11/23/09)--Sebasticook Valley FCU, Pittsfield, Maine, will offer members an Energy Loan Program to help them with the cost of oil this winter. The program will give loans to members for heating costs up to $3,000 with 0% financing for a year. Members will receive checks payable to their fuel provider (Bangor Daily News Nov. 19). The offer is limited-time and is available as the credit union’s budget allows. Sebasticook Valley FCU has $57.2 million in assets ... * ST. LOUIS (11/23/09)--Vantage CU, St. Louis, awarded Marillyn Singleton a $25,000 check for winning the credit union’s Have Enough
Click to view larger image Click for larger view
Savings Campaign. The campaign ran April through October and encouraged members to save money by setting up an automatic transfer to their savings. Singleton’s name was randomly drawn from 4,600 qualifying participants. She told the credit union she plans to set up a savings account for her youngest son and help her oldest child with the purchase of a vehicle. “When I got the call, I thought it might be a hoax,” Singleton said. “I had to do my own research on the Vantage website before I believed it! I just sat there in disbelief. This couldn’t have come at a better time; it is truly a blessing for our family.” From left are: Angie Williams, branch manager; Singleton; and Hubert Hoosman, Jr., Vantage CEO. Vantage has $628 million in assets. (Photo provided by Vantage CU) ...

Man involved in murder at CU given life sentence

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NEWPORT NEWS, Va. (11/20/09)--A man convicted of being an accomplice in the murder of a U.S. Navy officer outside a Virginia credit union, was sentenced to three life terms in prison. Michael A. Draven, 29, was sentenced Tuesday in federal court in Virginia, after being found guilty July 17 of conspiracy to commit murder for hire, carjacking resulting in death, and murder with a firearm in relation to a crime of violence (States New Service Nov. 17). Draven was convicted for his role in the April 2007 shooting death of Navy Communications Officer Cory Allen Voss, 30, which took place outside a Langley FCU ATM in Newport News,Va. The murder was designed to look like a random robbery that went awry, authorities said (News Now July 24). Last year, Voss’ wife, Catherine Ann Voss, pleaded guilty to masterminding the plot so she could be with Draven--her boyfriend--and collect roughly $500,000 in Voss’ death benefits. In November, she was sentenced to four life terms. Catherine Voss and Draven met while Voss’ husband, Cory Allen Voss, was on a six-month deployment for the U.S. Navy in 2006, according to court records and evidence introduced at trial. The affair continued after his return, in which Catherine Voss and Draven discussed marriage and referred to each other as husband and wife. In early 2007, Catherine Voss and Draven began to contemplate murdering Cory Voss, who had a $400,000 life insurance policy and a $100,000 death gratuity through the military. Draven met David A. Runyon, 37, while at a medical research study in Baltimore, Md., and they discussed hiring Runyon, a former member of the U.S. Army and former police officer, to kill Cory Voss. The discussions continued and developed into a plan to pay Runyon $20,000 to murder Cory Voss at the Oyster Point Branch of Langley FCU. Sometime after 11:00 p.m. on April 29, 2007, Runyon--toting a firearm purchased earlier that day--entered Cory Voss’ truck and shot the sailor five times, killing him. Runyon was convicted of the murder of Voss in July and is eligible for the death penalty, a federal jury decided July 22.

Consultant CUs kept lending when banks pulled back

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LAS VEGAS (11/20/09)--U.S. credit unions continued to lend money when the country’s financial industry collapsed late last year, even when commercial banks reduced loans, a credit union consultant told a Las Vegas credit union conference Tuesday. “We didn't wait for the government, and we didn't wait for government programs," Charles ‘Chip’ Filson told members of the California and Nevada Credit Union Leagues at the conference (The Las Vegas Review-Journal Nov. 18). Filson is president of Callahan & Associates, a Washington, D.C.-based consulting firm for credit unions and former supervisor of the Illinois Credit Union Division, the Journal said. “Credit unions are filling a void left by the market-based institutions,” Filson told the Journal. Banks have reined in lending despite getting money from the $700 billion Troubled Asset Relief Program, he added. “At this very same time, credit union loan originations are at an all-time high,” Filson added. “Your institutions have continued to lend. Sometimes, the market doesn’t always produce the right or best solution.” Last year, after securitized loans from the for-profit financial sector vanished, credit unions made $2 billion in student loans, Filson told the Journal. Credit unions have experienced rapid growth in deposits and members, he added. “Members are coming home to credit unions,” Filson said. Credit union membership increased 11% in the third quarter, Filson told the Journal. “We have the strongest capital levels of all financial institutions,” he added.

More CU members plan to pay for holiday gifts with cash

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ATLANTA (11/20/09)--More credit union members plan to pay for their holiday gifts this year with cash instead of credit, a Georgia Credit Union Affiliates (GCUA) holiday spending poll indicates. GCUA polled 1,000 credit union members statewide. About 76% said they plan to pay for all or most of their holiday purchases with cash, and 12% said they will use a credit card (PR Newswire Nov. 17). Roughly 52% of members said they also plan to spend less on holiday gifts than they did last year, while 45% said they will spend the same as last year. Only 3% said they will spend more, GCUA said. Of those polled, 59% will spend less than $500 on gifts, 31% plan to spend between $500 and $1,000, and 10% plan to spend more than $1,000. The results of GCUA’s poll match findings from another recent poll that indicated 46% of Georgians are spending less compared with one year ago. Forty-one percent said they are spending the same, and 13% said they are spending more. “Clearly, Georgians are concerned about their financial well-being, so they are looking to spend money more vigilantly than in previous years,” said Mike Mercer, GCUA president/CEO. “It’s one thing to spend money, but it’s another to spend money wisely. While Georgians spend money to enjoy the holiday season, they’re not going to take on more debt to do it. Instead, they are looking at their finances with an eye toward the future.”

Filene report Focus on finances for college grads

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MADISON, Wis. (11/20/09)--Conducting quick, low-cost financial education seminars to graduating college students could be a potent tool for credit unions to engage with young adults at a pivotal time in their financial lives, according to the Filene Research Institute. Filene recently released a paper, “Delivering Financial Education to Graduating College Students,” about a financial education program, Financial Independence Seminar, developed by Filene researchers Bob Hoel and Ron Smith, which was held in partnership with the University of Wisconsin-Madison, its alumni association and business school faculty. The program was promoted to students nearing graduation. The content was delivered by a credible, unbiased host, and the general seminar and breakout sessions were followed by one-on-one coaching from experienced professionals to provide more information. Participants also were provided with complementary links to financial information sources, Filene said. Hoel and Smith analyzed the seminars, offered in 2007, 2008 and 2009, and reported the following results:
* The vast majority of attendees--79%--at the 2009 seminar took at least one specific action three months after the seminar, for example, establishing a budget or opening an Individual Retirement Account; * Between 95-100% of attendees at the 2007 and 2008 seminars took at least one specific action one to two years after the seminar; and * Feedback from attendees and sponsors indicated the value derived from the seminar was extremely high and they would likely promote the seminar to friends and colleagues.
According to the paper, credit unions should develop programs that are delivered to segmented audiences receptive to the customized information and ready to act on the suggestions; developed and presented by uninterested third parties (no credit union staff); structured as voluntary programs; and measured for effectiveness and changes in participants’ behaviors. The paper also noted students’ top 10 financial topics, as indicated during the seminar:
* Choosing investment options; * Managing income and expenses every month; * Understanding employee benefits; * Saving for retirement; * Paying off student loans; * Selecting savings options; * Buying a home; * Learning how to become wealthy; * Buying a car; and * Managing credit card or other debt.

Russell Reynolds Assoc. to conduct search for new CUNA CEO

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WASHINGTON (11/20/09)--The national firm of Russell Reynolds Associates has been selected to conduct the search for a successor to Credit Union National Association (CUNA) CEO Dan Mica, who has announced plans to step down in January 2011. The CUNA search committee selected Russell Reynolds at a meeting earlier this month. The committee chose the company after evaluating proposals from four national executive search firms that were finalists in the running for the task. “Our committee felt Russell Reynolds has the depth of experience and breadth of contacts to find the candidates with the qualities and leadership ability that we need for this position,” said Committee Chairman Harriet May, who is CEO of GECU in El Paso and vice chairman of the CUNA board. “The firm will be looking both within and outside the credit union movement to ensure we find the best person for the job.” Russell Reynolds Associates has a worldwide network of 39 offices and more than 275 executive search professionals. The firm is known for its deep knowledge of major industries and commitment to client service. The firm will begin by preparing a position description. Once the description is finalized, Russell Reynolds will begin its search process. May noted that all candidate resumes will be channeled through Russell Reynolds rather than the CUNA search committee. After conducting its search process, Russell Reynolds will present a final list of candidates to the search committee for its evaluation.

CUNA announces 2009 ELLy awards

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MADISON, Wis. (11/20/09)--Exceptional credit union trainers and training programs were honored during an awards presentation at the 2009 Experience Learning Live! (ELL) conference Oct. 25-28 in Nashville.
Click to view larger image Tara Whitmire (left) and Ashley White, ELGA CU, Burton, Mich., received first place honors for the Training Professional of the Year Award and the WOW! Award at the 2009 Experience Learning Live! Conference in Nashville.
Click to view larger image GESA CU received first place honors in the WOW! Award, which recognizes credit unions with the best overall training curriculum or event. (Photos provided by CUNA)
The ELLy awards, sponsored by the Credit Union National Association, recognize outstanding efforts in the area of professional staff development. ELGA CU, Burton, Mich., received first place for the Training Professional of the Year Award. The award was presented to Tara Whitmire and Ashley White. The award recognizes achievements of a visionary credit union training professional or department for exceptional contributions to the learning and performance of credit union staff. Whitemire and White also were presented with first place in the WOW! Award, which recognizes credit unions with the best overall training curriculum or event. Angie Henderson and Teresa Shively, GESA CU, Richland, Wash., also received first place for the award. The Training Champion Award was given to Christina Brown, president/CEO of GESA CU, Richland, Wash. The award applauds the vision, involvement and leadership of senior management for their support and development of the credit union’s training initiatives. Kitsap CU, Bremerton, Wash., received first place for the Chi Phi Delta Award, which is presented for the best development of a credit union university and its effect on staff learning and performance, using the CUNA Center for Professional Development’s (CPD) products. Eastman CU, Kingsport, Tenn., received first place for the eLearning Award for its Eastman CU Learning Resource Center. The award focuses on demonstrating how technology has changed the culture of credit unions and enhanced training. Three CPD Energizer Awards, which recognize credit unions with innovative training programs that support CUNA CPD Training, were given to:
* SPC Cooperative CU, Hartsville, S.C., small market; * BELCO Community CU, Harrisburg, Pa., medium market; and * Metro CU, Chelsea, Mass., major market.
Next year’s conference will be Oct. 21-23 in San Diego.

Rosenthal named to Social Investment Forum board

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WASHINGTON (11/20/09)--The Social Investment Forum (SIF), the national nonprofit membership association for the socially responsible investment (SRI) industry, has announced that Clifford N. Rosenthal, president/CEO of the National Federation of Community Development Credit Unions, has been elected to serve on its board of directors, along with two other new members. SIF also re-elected two existing members to continue to serve on its board of directors. The four other SIF board members are: Jan Bryan, an investment adviser with the First Affirmative Financial Network; Leslie Lowe, director of the Energy & Environment Program at the Interfaith Center on Corporate Responsibility; Ingrid Dyott, managing director of Neuberger Berman’s SRI team; and Paul Hilton, director of Advanced Equities Research at Calvert. Lowe and Dyott are the two returning members of the SIF board. “The five recently elected SIF board members--including Cliff Rosenthal--represent a remarkably wide range of sectors and professional expertise which will be well utilized in their work to advance the field of socially responsible and sustainable investing,” said SIF Board Chair Cheryl Smith. After 10 years working in food co-op development and anti-hunger advocacy for Native American, migrant farmworker, and urban minority organizations, Rosenthal joined the federation in 1980, becoming its executive director in 1983. In 1982, Rosenthal created the Capitalization Program for CDCUs, making the federation one of the first community development financial institutions in the U.S. Through that program, the federation raises capital from socially responsible investors and government sources to reinvest as deposits or loans in CDCUs nationally. “The Social Investment Forum is very fortunate to have three new and two returning board members to work with us in expanding the numbers of individual professionals and institutions engaged in SRI,” said SIF CEO Lisa Woll. “Interest in socially responsible investing continues to grow, especially since the global financial crisis has brought many core SRI issues--like transparency and good governance--to the forefront of the policy debate, and our board’s combined expertise will help us remain at the vanguard of the SRI industry.”

CUs partner with car dealers to boost auto sales

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BAKERSFIELD, Calif. (11/19/09)--Credit unions in Bakersfield, Calif., are providing incentives to their members and working with auto dealers to spur car sales, according to a California newspaper. Steve Renock, CEO of Kern Schools FCU, told The Bakersfield Californian that both credit unions and auto dealers could “use the business.” Renock met with the Bakersfield New Car Dealers Association a week ago to work on an agreement to spur sales at the dealers and more loans for the credit union. The $1.7 billion asset Kern Schools FCU plans to offer loans with rates as low as 4.25%, and list the names of association dealers in its newsletter. In return, individual dealers will offer discounts to credit union members, the newspaper said. Kern Schools hasn’t made as many auto loans this year as it has in the past. In October, the credit union made 63 loans--a 72% drop from last year. Kern members bought 1,034 new vehicles in October, which is 38% fewer than last year, and 22% less than September (Bakersfield Californian Nov. 14). Doug Kileen, president/CEO of Safe 1 CU, said its members are borrowing less, which is why loan numbers have decreased. Many auto manufacturers also are offering 0% financing--which is hard for the credit union to compete with, he added. To encourage sales, Safe 1 recently offered a 30-day sale where it lowered auto loan rates to 3.9%. The sale drew about $10 million in loans, the paper said. Other incentives recently undertaken by credit unions to spur auto sales include CUCorp’s “Invest in America” program, which offers discounts on Chrysler and General Motors vehicles to buyers who receive financing through credit unions.

Oral arguments made in Kentucky FOM case

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FRANKFORT, Ky. (11/19/09)--Oral arguments were presented Wednesday in the Supreme Court of Kentucky regarding a field of membership (FOM) case that affects Kentucky credit unions’ ability to serve members based on geography. The case, Home Fed. Sav. & Loan v. Kentucky, was brought by the Home Federal Savings and Loan Association against the Kentucky Office of Financial Institutions (OFI)--now the Department of Financial Institutions (DFI)--in May 2006. The suit alleges that the DFI has no authority under Kentucky law to approve geographic FOM bylaws for Kentucky credit unions (News Now Feb. 17). In 2007, the Kentucky Circuit Court for Franklin County ruled that the DFI exceeded its statutory authority when it approved geographic FOMs for six state-chartered credit unions between 2000 and 2005. In November 2008, an appeals court upheld the decision. In 1984, Kentucky shortened a lengthy statute about the members that credit unions can serve to “credit union memberships shall be limited to persons having a common bond or similar occupation, association or interest.” The statute does not specifically mention geography, which Home Federal used to argue that DFI can't approve geographic FOMs. During the oral arguments, several justices asked questions regarding whether the Kentucky Legislature's 1984 revisions to the FOM statute had been intended to broaden Kentucky's credit union FOM criteria, as the credit union parties have argued, or whether the legislature had instead intended to restrict credit union FOMs, as Home Federal's attorney argued. DFI had approved these geographic FOMs by interpreting the term “similar . . . interests” to include the similar interests that people living and/or working in the same community share, and the justices asked whether it was reasonable to interpret “interests” in this manner given that the word's meaning is ambiguous in context. In Wednesday’s arguments, attorney David Wilson, who represented the six credit unions, said that the lower courts’ logic was incorrect when it concluded that DFI overstepped its bounds when approving the geographic FOMs. Wilson argued that--if the Kentucky legislature had in fact intended to eliminate geographic FOMs when it revised the Commonwealth's credit union act in 1984, as Home Federal argued--the legislature must also have intended to eliminate credit union membership based on selected employee groups (SEGs). Neither geographic FOMs nor SEGs are specifically mentioned in the 1984 version of the FOM statute, even though many Kentucky credit unions serve SEG memberships and DFI has routinely approved new SEG FOM bylaws since 1984. In his brief, Wilson wrote: "the lower court's logic relative to credit union membership appears at first glance to be sound when applied to membership predicated upon geographic residence. However, if the same logic is applied to the credit union membership statute in its entirety, an absurd result is reached." Jill Endicott, who represented Home Federal, rejected Wilson's argument about the SEGs on Wednesday, saying it was not part of the issue The Supreme Court of Kentucky will issue an opinion on the matter.

CU System briefs (11/18/2009)

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* RIVERSIDE, Calif. (11/19/09)--Altura CU, Riverside, Calif., encouraged its employees to “Think Pink” in a month-long event to raise awareness and money for breast cancer, during National Breast Cancer Awareness Month in October. The employees raised just over $9,000. “All the money was donated to the Susan G. Komen Race for the Cure at their event in Temecula, Calif., in late October. Team Altura ranked third for the team donations for the walk,” said Chauntelle Moses, Altura payroll manager and breast cancer survivor. Altura Executive Vice President Ron Woodbury also provided a donation match of $5 for each employee who walked in the race. Altura CU has $890 million in assets. (Photo provided by Altura CU) ... * APPLETON, Wis. (11/19/09)--Eighteen Fox Cities, Wis.-area credit union branches have gathered more than $11,400 in donations to the Appleton Post-Crescent’s “Stock the Shelves” Community Campaign, which raises money for 19 food panties in the newspaper’s circulation area (Appleton Post-Crescent Nov. 16). The credit unions, located in the Appleton, Neenah and Menasha area, also are accepting nonperishable food items at their branches, the newspaper said ... * LYNCHBURG, Va. (11/19/09)--The Credit Unions Care Foundation of Virginia made a $1,000 donation to help victims of the Fort Hood shooting in Texas. The money will support families whose loved ones were killed during the Nov. 5 shootings and help the surrounding community. “With so many military credit unions based in Virginia, we are especially sensitive to the needs of our brave military men and women,” said Gerrianne Burks, president/CEO of Northwest FCU, Herndon, Va., and chair of the foundation. “It’s important that we show the Fort Hood community that the rest of the nation mourns with them and stands ready to help them in their hour of need” ...

CUAO announces board of directors

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BEAVERTON, Ore. (11/19/09)--The Credit Union Association of Oregon (CUAO) seated its 2010 board of directors at its annual business meeting Nov. 6. Newly elected to the board is Trisha Baker, CEO of UFCW Northwest FCU, Portland. Board officers are:
* Chair Gene Pelham, CEO, Rogue FCU, Medford; * Vice Chair Bill Anderson, president, Mid Oregon FCU, Bend; * Treasurer Kevin Cole, CEO, MaPS CU, Salem; and * Secretary Bob Newcomb, president, SELCO Community CU, Eugene.
Board members are:
* Stan Baron, president/CEO, Chetco FCU, Harbor; * Steve Canfield, executive vice president, NW Preferred FCU, Tigard; * Shirley Cate, CEO, Providence Health System FCU, Portland; * Rob Stuart, president/CEO, OnPoint Community CU, Portland; and * Jean Wheat-Palm, president/CEO, Valley Health and Postal Employees CU, Salem.
Also at the meeting, Oregon State Rep. Kevin Cameron (R-Salem) provided credit unions with a legislative update. Troy Stang, CUAO president/CEO, thanked credit unions for their efforts advocating the state credit union movement. “The credit union model, and the way you tend to the needs of your members has the attention of our elected officials in Congress,” Stang said. “And it should have their attention--it’s a model that works. Your voice is being heard and that voice needs to remain strong as we lay out the blueprint for success and build the credit union movement for the future.”

Australian CUs look to build scale through mergers

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CANBERRA, Australia (11/19/09)--Australia’s $43 billion credit union industry is experiencing increasing pressure to build economies of scale through mergers, as a result of competition for deposits significantly reducing interest margins in 2009, analysts said. The industry had shown resilience in a challenging year, according to KPMG’s annual survey of Australian credit unions and building societies (The Australian Nov. 18). A lack of alternative funding sources has led to intense competition for deposits that has slashed the net interest margin for credit unions by 42 basis points--to 2.49% from 2.91%, the newspaper said. “This, combined with the ever-increasing regulatory burden facing all mutuals, has contributed to the business case for mergers, said Martin McGrath, KPMG financial services partner. However, Australian credit unions need to be thoughtful about merger partners because part of credit unions’ appeal is the long-term relationship they have with their members, McGrath added (The Advertiser Nov. 18). “Not every merger is a good merger,” he said. “A good merger is one where you can create some efficiencies, but still maintain that long-term bond.”

CUs accounts attracting many in Wash. state

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FEDERAL WAY, Wash. (11/19/09)--Washington state residents are moving their accounts to credit unions en masse in response to better rates, safety and soundness, according to the Washington Credit Union League. During the third quarter of 2009, 173,464 consumers joined one of the state’s 119 financial cooperatives, according to Callahan & Associates, a Washington, D.C.-based firm, specializing in financial publications, software development, strategic planning, and investment management for credit unions. This latest tally shatters all previous quarterly membership increases and brings Washington state’s total credit union membership to 2,795,489, or 42% of the state’s estimated population of 6,668,200, the league said. “Media reports on problematic banks seemingly have made Washingtonians suspicious of profit-driven financial institutions, especially big Wall Street banks,” said league President/CEO John Annaloro. “Ten percent yearly growth was unheard of prior to this extraordinary migration to credit unions.” The next highest new membership total was 4.2%, which occurred in 2008 when 103,859 consumers joined a Washington-based not-for-profit credit union. This year’s third quarter membership summary brings 2009’s total new membership to 240,485. Some of the public’s move to credit unions may be the result of media reports on studies, such as a recent Pew Charitable Trust study. It found that credit cards offered by credit unions provide their members with more reasonable annual percentage rates, cash advance fees, late fees and other fees than banks, the league said. The report also found that penalty fees at the largest credit unions are nearly half those assessed by larger banks. Recognizing that it would see record-setting membership growth this year, the Washington league celebrated its 75th anniversary by honoring the 75,000th new member of 2009 with a prize package worth more than $2,300. The winner, Kristin Henkus, joined Seattle Metropolitan CU in July because she was dissatisfied with the new management of her bank. Since then, she has discovered many more reasons to stay. “It’s a nicer community feeling,” she said. “[Banking at a credit union] is really convenient because you can use everyone’s ATMs; you don’t get charged.”

Wis. CUs raise funds for hospitals Childrens Miracle Network

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MADISON, Wis. (11/19/09)--Through the Credit Union Cherry Blossom Ten-Mile Run in Washington D.C., Wisconsin credit unions and affiliated industry organizations contributed more than $81,000 in 2009 to the state’s system of Children’s Miracle Network hospitals.
Click to view larger image Credit union organizations and credit unions presented a check for $37,343 to Children’s Hospital of Wisconsin at the Wisconsin Credit Union League’s office in Madison recently. Participating were, from left, Derick Stace-Naughton, CUNA Mutual Group; Harley Skjervem, Credit Union National Association (CUNA); Christine Rockweit, president, Fond du Lac (Wis.) CU; Josie Collins, National Credit Union Foundation; Keri Brunelle, Children’s Hospital of Wisconsin/Health System Foundation; Sheila McNeal, CUNA Mutual Group; Brett Thompson, president, Wisconsin Credit Union League; Mark Condon, CUNA; Tom Liebe, government affairs, Wisconsin Credit Union League; Christopher Roe, senior vice president, corporate/legislative affairs, CUNA Mutual Group. (Photo provided by CUNA Mutual Group)
The most recent contribution of $37,343--made as part of a check presentation at the Wisconsin Credit Union League’s office across from the state Capitol--will benefit Children’s Hospital of Wisconsin in Milwaukee. “Because of state credit union fundraising, the credit union movement is proud to contribute to Wisconsin Children’s Miracle Network-affiliated hospitals,” said Christopher Roe, senior vice president, corporate/legislative affairs, CUNA Mutual Group, and a member of the board of directors of Credit Union Miracle Day, Inc., the title sponsor group of the run. “Wisconsin’s participation in this national event directly helps children in our communities and demonstrates the mission of credit unions--‘people helping people,’” he added. State credit unions and affiliated business partners also contributed $22,200 each to Gunderson Lutheran Medical Center in La Crosse and St. Joseph’s Children’s Hospital of Marshfield. “With more than 12,000 runners, including more than 6,000 credit union members, the Credit Union Cherry Blossom Run in Washington, D.C., is a flagship fundraising event for Credit Union for Kids,” said Sarah Turner, director of Credit Union Miracle Day (CUMD). “Once again, we are pleased this event contributed $1 million to children’s hospitals nationwide in 2009.” CUMD is an organization of credit unions and industry affiliates dedicated to raising funds for the Children’s Miracle Network and raising awareness of the credit union difference. Credit unions and industry business partners contributing to the $81,743 Wisconsin total included the Wisconsin Credit Union League; Lifetime CU, West Allis; Fond du Lac (Wis.) CU; CUNA Mutual Group; Credit Union National Association; Fiserv; Credit Union Executives Society and the National Credit Union Foundation. “Wisconsin credit unions take great pride in supporting the Cherry Blossom Run and the Children's Miracle Network-affiliated hospitals throughout our state,” said Brett Thompson, president/CEO of the Wisconsin league. “We’re pleased to be part of an event that raises national awareness to helping sick and injured children, yet still has a direct impact on our local communities.” “Funds collected stay at home, so every dollar generated by credit unions serves your local community,” Turner added. “The monies raised by credit unions in Wisconsin and elsewhere are tracked according to donor ZIP codes, so money donated in Wisconsin goes to Children’s Miracle Network hospitals in La Crosse, Marshfield and Milwaukee.” “Thanks to the generous support of credit unions and the Cherry Blossom Run, Children's Hospital and Health System is able to acquire new equipment that results in improved treatment, fund research to find new cures and treatments for diseases, support family services, from toys and art therapy to interpreter services,” said Keri Brunelle, fundraising manager for the Milwaukee hospital. “We are grateful to the Credit Union for Kids campaign for their ongoing support.” The Children’s Miracle Network is a nationwide affiliation of more than 170 children’s hospitals that provides state-of-art care, research, preventative health education and treatment for children with diseases and injuries.

Filene report CUs employer of choice for new MBAs

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MADISON, Wis. (11/18/09)--MBAs, or business school students, can provide fresh perspectives to credit unions through summer internship programs, according to the Filene Research Institute in a recent paper. The paper, “Credit Unions as Employers of Choice for the New MBA: A Report on the Filene Summer Fellowships,” by Ben Rogers, Filene Research director, tracks seven students’ experiences interning at credit unions nationwide during the summers of 2008 and 2009. Credit unions who hire business students can give the students projects to work on without having to pay for an outside consultant or vendor, and they can attract top-level talent without committing to a new hire. Hiring an MBA also allows them to gather insights outside of the credit union system, and improve mid-level succession planning by building relationships with potential managers. “Business students’ growing interest in public service, non profits, and social responsibility provides an opportunity--perhaps fleeting--for credit unions,” the paper said. “Even institutions that don’t have a full-time position to offer a summer MBA intern can receive real value from bringing a fresh outside view to priority projects.” Credit unions seeking to hire MBAs should:
* Send leaders. Summer fellows were impressed by attention from senior vice presidents and other senior leaders in the recruiting process. A recruiting call to the prospect from the CEO will differentiate the credit union. * Offer meaningful projects. Offer a project that can be accomplished during a summer stay, and give the student an opportunity to present it to senior leaders and the board of directors. Prepare a written timeline of tasks and responsibilities before the intern lands, suggested Diana Dykstra, CEO of San Francisco Fire CU. * Move quickly. Small organizations should be nimble, so offer phone and in-person interviews in quick succession. Employers typically interview in January and February, and students receive internship offers by early March. If the process takes longer, students perceive a lack of interest and professionalism. * Emphasize uniqueness. Peers at Fortune 500 companies will be just one among many, while credit unions can offer MBA interns a key place and high-level work much more quickly.
The report also includes interns' perspectives and insight into some of the projects they worked on over the summer at their credit unions. For more information, use the link.

CUAO announces awards at annual meeting

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BEAVERTON, Ore. (11/18/09)--The Credit Union Association of Oregon (CUAO) honored individuals contributing to the state’s credit union
Fred Wong, volunteer, OnPoint Community CU, received the Volunteer of the Year Award from the Credit Union Association of Oregon (CUAO). From left are Troy Stang, president/CEO, CUAO; Wong; and Doug Mountain, CEO, Legacy FCU and chair of the Distinguished Service Award Committee. (Photo provided by the Credit Union Association of Oregon)
movement during an awards banquet held with CUAO’s Annual Meeting and Convention in Salem, Ore. CUAO honored Fred Wong, OnPoint Community CU, with the Volunteer of the Year Award. Wong has been a member of the credit union for 48 years and volunteered for 38 years. He has served on the board of directors and on several committees. OnPoint Community is based in Portland (Oregon Outlook November 2009). Gene Pelham of Rogue FCU, Medford, was honored with the Professional of the Year Award. He has served on the Oregon Credit Union Foundation board and is board chair of CUAO. He also is an honors graduate of Western CUNA Management School and serves as a trustee for the school. Other individual award winners included:
* Top Classroom Presenter of the Year, Anissa Arthenayake, OSU FCU, Corvallis; * Credit Union Advocate of the Year, Volunteer, Don Gleason, Northwest Community CU, Eugene; * Credit Union Advocate of the Year, Professional, Mark Turnham, president/CEO of NW Priority CU; * Heidemann Scholar Award, Karen Zerger, Rogue FCU; and * Young Credit Union Professional of the Year, Erin Mulkins, Northwest Resource FCU, Portland.
Credit union award winners included:
* Cutting Edge FCU, Milwaukie, Louise Herring Award for Philosophy in Action; * Mid-Oregon FCU, Bend, Dora Maxwell Social Responsibility Award; * Pacific Crest FCU, Klamath Falls, Louise Herring and Desjardins Youth Education Award; and * Rogue FCU, Dora Maxwell, Louise Herring and Desjardins awards.

Royal CU to acquire 11 AnchorBank branches

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EAU CLAIRE, Wis. (11/18/09)--Royal CU (RCU), Eau Claire, Wis., announced that it will acquire 11 branches in northwestern Wisconsin from AnchorBank. The acquisition is awaiting regulatory approval and is expected to be finalized in first quarter 2010. Under the agreement, RCU will assume $177 million in deposits and a proportionate amount in loans, real estate and other assets. RCU will buy nine of the branches and assume the lease on the other two branches. When the acquisition is complete, RCU will have 26 branches, with 23 in Wisconsin and three in the Twin Cities, Minn., area. RCU will retain all AnchorBank employees and all of the bank’s customers will become RCU members. The acquisition is not a merger or an acquisition of AnchorBank itself, RCU said in a release. The acquisition fits into RCU’s five-year plan, said RCU CEO Charles Grossklaus. The credit union has recently been expanding in Wisconsin and Minnesota. The credit union merged with REAL Financial CU in Minneapolis in August and opened a new office in Menomonie, Wis., in March. “We have been successful in part because we are actively involved in the communities and we staff our offices with people who live in those communities,” Grossklaus said. “We feel that AnchorBank customers would benefit from becoming RCU members and taking advantage of what we have to offer as a full-service, community credit union.” The transaction also will help AnchorBank make “significant progress” toward its goal of increasing capital ratios to address the challenges the bank is facing in the current economic climate, said AnchorBank CEO Chris Bauer. “The sale will allow AnchorBank to further reduce core-operating expenses and identify potential areas for additional savings in a streamlined branch network,” he added.

Holiday shopping will be down says N.J. CU survey

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BASKING RIDGE, N.J. (11/18/09)--Consumers plan to spend less this holiday season, and most consumers will pay for gifts with cash, according to a holiday spending survey conducted by New Jersey’s largest credit union. The $1.984 billion asset, Basking Ridge, N.J.-based Affinity FCU recently surveyed its members in response to a report released by Deloitte Services L.P. that forecast a drop in sales this coming holiday shopping season (PR Newswire Nov. 16). “The economy has created a great impact on consumers’ decisions concerning gift purchases,” Donna LoStocco, spokeswoman for Affinity FCU, told the news service. “More and more are paying in cash or debit cards in order to better monitor spending.” The survey indicated that 82% of respondents plan to spend less and save more, and that more than 59% of respondents plan to purchase gifts with cash or a majority of cash this season. Consumers won’t be spending as much in department stores or at the mall, the survey said. More than 60% of respondents said they plan to purchase gifts online or at discount stores this year, compared to only 20% who plan to go to the mall. “Consumers are beginning to shop earlier as well,” LoStocco said. “Black Friday is no longer the big day to wait for to stock up on gifts. With leading retailers like Kmart offering holiday layaway services as early as Nov. 1, consumers are also buying earlier to stretch their dollars." The survey results back up this theory, indicating more than 50% of consumers have already started their holiday shopping.

NCUF board nominations due Friday

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MADISON, Wis.(11/18/09)--The deadline for the National Credit Union Foundation’s (NCUF) board nominations is Friday. NCUF is seeking nominations for two board seats: Credit Union Executive or Director, and System Affiliate. For the executive or director seat, each candidate must be an executive officer or director of a credit union. The incumbent for the seat is Mark Twisdale; senior vice president of human resources for State Employees’ CU in Raleigh, N.C. Twisdale is completing his first three-year term on the NCUF board. Volunteers can serve up to three three-year terms on the board as long as they are re-nominated by the NCUF Governance and Nominations Committee and re-elected by the NCUF board. For the system affiliate seat, each candidate must be an executive officer or director of a national organization that meets all the following criteria:
* The organization’s primary purpose is to support credit unions or some element of the credit union movement; * A significant portion of the organization’s ownership or membership comes from the credit union system, and; * The organization has demonstrated a commitment to the purposes of the foundation. NCUF's mission is to “promote and improve consumers' financial independence through credit unions.”
The current incumbent in the system affiliate seat is not eligible for re-election. Francois Henriquez, recently appointed interim CEO of U.S. Central FCU in Lenexa, Kan., is serving the final year of his third three-year term on the NCUF board. To apply for either seat, use the resource link and click “Volunteer for our Board.” The board will vote on the nominees in December. In January, NCUF board members will elect four officers at their organizational meeting. The 13 voting seats on the NCUF board include representatives of seven consumer credit unions, two national organizations serving credit unions, one corporate credit union, one state credit union foundation, one state credit union league and one at-large seat.

Schenk to IBankrateI Consumers driven by net worth

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MADISON, Wis. (11/18/09)--Economic measurements such as a household’s net worth directly impact consumers’ behavior more than broader traditional measurements such as gross domestic product (GDP), a Credit Union National Association (CUNA) economist told Bankrate.com Tuesday. GDP is a measure of the output of goods and services produced in the U.S. The Bureau of Economic Analysis issues a quarterly report on GDP. “The traditional measure of the economy has been growth in GDP and growth in economic output,” Mike Schenk, CUNA vice president of economics and statistics, told Bankrate. But as yardsticks go, GDP is hard to work with, Bankrate said. The only sure long-term strategy for individuals and the country is the savings model. If everyone is saving and not spending, there may be a temporary setback to the economy. But eventually all of the savers will have the confidence to spend more money, Bankrate added. “Since the beginning of 2008, households have lost $11 trillion in net worth. That is about the size of the entire U.S. banking industry,” Schenk told Bankrate. “Net worth has declined and declined significantly, and it won't come roaring back--unless you can foresee or forecast significant asset bubbles in the future--in part, because the way it will come back is the old-fashioned way of people setting more aside in their savings accounts and retirement accounts,” Schenk concluded. When consumers eliminate their debt and bolster their savings, the economy proceeds at a much faster pace, Bankratesaid. To read the article, use the link.

CU System briefs (11/16/2009)

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* WOODBURY, Minn. (11/17/09)--The Postal CU (PCU) Community Foundation donated $2,000 to Minnesota First Lady Mary Pawlenty’s Military Family Care Initiative, which helps military families during deployments. The program allows Minnesota military families to search an online database of community organizations that are willing to help with tasks such as mowing the lawn, grocery shopping and meal preparation. Volunteers are then matched with families to provide the needed services. PCU, Woodbury, Minn., has $486 million in assets ... * REDWOOD CITY, Calif. (11/17/09)--San Mateo CU (SMCU), Redwood City, Calif., joined Sharp Business Systems and the San Francisco 49ers to collect 828 coats for One Warm Coat. The coats were collected during 49ers football games Oct. 4 and Oct. 11. SMCU also collected 200 coats at its branches. One Warm Coat is a coat drive in San Francisco that collects coats for individuals in need. SMCU has $600 million in assets ...

New Yorkers flock to CUs in bank revolt

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NEW YORK (11/17/09)--New Yorkers are leaving their banks and flocking to credit unions in what is being dubbed the “bank revolt of 2009,” according to a Sunday New York Post article. New Yorkers are moving their money from big banks to credit unions because credit unions charge lower fees and generate higher returns on savings, the article said. Rob Nemeroff, director of marketing at Melrose CU in Briarwood, N.Y., told the Post that the credit union has added 300 new members a month and recently exceeded $1 billion in assets. “It took a financial catastrophe for the general public to wake up and realize what credit unions are all about,” Nemeroff told the newspaper. About 22% of Melrose CU’s newest members are from southern and western states. Melrose has an open charter, the newspaper said. The Post also noted that the shift to credit unions may reflect the increase of online banking tools available that allow consumers to compare rates and fees. Consumers also may be moving their money to credit unions because 122 banks have failed this year.

Hampel to IForbesI Holiday gloom is misplaced

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MADISON, Wis. (11/17/09)--Although the most recent reports on consumer sentiment have not been great, it should not be taken as sign that retailers will suffer from a poor holiday shopping season, a Credit Union National Association economist (CUNA) told Forbes.com Friday. The holiday season is generally a time when consumers suspend their worries, Bill Hampel, CUNA senior economist told Forbes. Also, the weak consumer sentiment figure is likely based on the most recent unemployment reading rising to 10.2%, which engenders the perception that getting a job is difficult, he added. “It’s not just about the unemployment figure or the 17.5% of workers who are underemployed,” Hampel said. “It’s also about the 83% of people with jobs worried that they'll join them.” Friday's University of Michigan consumer sentiment reading of 66 is down from October's 70.6--the worst since August. “We've come a long way,” Hampel said, in referring to the Michigan sentiment survey’s rebound from its 2008 lows. A year ago, the index was at 55.3, just a few months after Lehman Brothers collapsed and the U.S. economy was entering the worst period of the recession, Forbes said. The economic downturn’s speed and severity has made businesses leery about a recovery and “is contributing to a substantial disconnect between the more guarded forecasts coming out of corporate America and more confident recovery talk from many economists and members of the investment community,” Forbes said. The reason for this is that economists and market watchers don’t necessarily have people’s livelihoods connected to their outlooks, Hampel told Forbes. CUNA will join the Consumer Federation of America Monday to release the results of their annual consumer spending survey. To read the article, use the link.

Schenk to IAPI Strong consumer news needed for a rebound

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NEW YORK (11/17/09)--Without positive news about consumer behavior, the stock market isn’t going to see significant advances, a Credit Union National Association (CUNA) economist told The Associated Press Monday. “A steady stream of mediocre news from the consumer sector does not translate into high numbers for the stock market,” Mike Schenk, CUNA senior economist, told the news service. Because there’s friction in U.S. financial markets between investors who believe the economy is in the midst of a robust recovery and those who believe the rebound will be gradual and filled with potholes, stock trading has experienced volatility, AP said. Also, the housing market is still a long way from recovering, and that has put a damper on consumer confidence and also altered their spending patterns, Schenk told the news service. To read the article, use the link.

Co-op Services CU opens branch at elementary school

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LIVONIA, Mich. (11/17/09)--Fourth- and fifth-grade students at Bulman Elementary in Redford Public Schools worked to design posters, make public address announcements and create contests to help promote the opening of the school’s first student credit union operated in partnership with Co-op Services CU in Livonia, Mich.
Click to view larger image Bulman Elementary students are greeted by the Rock Star Savers’ mascot to celebrate the grand opening of the school’s student credit union in partnership with Co-op Services CU, Livonia, Mich. (Photo provided by Co-op Services CU)
The students were members of a marketing team that encouraged their classmates, from second through fifth grades, to open savings accounts and participate in the credit union’s “Rock Star Savers” program. “Thanks to their efforts, 70 students were already signed up before our October grand opening,” said Jeremy Cybulski, youth and community development officer for Co-op Services CU. Everyone is excited about the credit union program including parents, students and staff, according to Bulman Principal Susan Stanley. “This is an outstanding educational opportunity for children to learn real-world math applications and the value of saving money,” Stanley said. “It also teaches our children the gift of patience in a world of instantaneous gratification.” Students and parent volunteers, along with Co-op Services’ staff were at the grand opening to help classmates make savings deposits, play games and receive star stickers for their savings books. Children can pick out a prize from a special prize box for every five stickers. Parent volunteer Cathy Wilber shared her excitement about being part of the new Panther branch, named for the school’s mascot. “I think it will be a great service to our students,” Wilber said. “They will be learning wonderful life skills that they will hopefully carry with them into their adult lives. Thank you to Co-op Services CU and our principal, Sue Stanley, for allowing Bulman to be a part of this terrific program.” Cybulski coordinates the student credit union program, and makes classroom presentations throughout the year at Bulman and other area schools to help students learn about savings basics. During the 2009-10 school year, the $385.2 million-asset Co-op Services CU will oversee the operation of six student credit unions in elementary schools within the Livonia, Clarenceville and Redford Union school districts.

CUNA Technology Council presents best of show award

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Madison, Wis. (11/17/09)--The CUNA Technology Council presented its Best of Show Award to Saylent Technologies for its Card360 product.
Click to view larger image The CUNA Technology Council awarded its Best of Show award to Saylent Technologies for its Card360 product. From left are: Jackie Buchanan, council vice chair, executive vice president and chief information officer, Genisys CU; Kristopher Meyer, judge, Alliant CU; Sharon Nargassans, director of finance/administration, Saylent Technologies; Russell Pretitore, vice president of sales, Saylent Technologies; Debbie Bianucci, president, Bank Administration Institute; Tyson Nargassans, president/CEO, Saylent Technologies; Rudy Pereira, council chair, senior vice president of operations/technology, Alliant CU; John Morawski, judge, Massachusetts Credit Union League; George Rudolph, judge, Alliant CU; Fred Campobasso, judge, Alliant CU. (Photo provided by the CUNA Technology Council)
The award was presented at the Bank Administration Institute’s Retail Delivery Conference Nov. 3-5 in Boston. Saylent Technologies develops software solutions and services to increase non-interest income and core deposits. It won the Best of Show award for its Card360 solution, a portfolio optimization suite to help credit unions maximize the performance and satisfaction of their card programs. Card360 is the engine behind CO-OP Financial Services’ Revelation product, used by CO-OP’s debit processing customers. Since 2001, the CUNA Technology Council has presented the Best of Show award to the exhibitor that demonstrates a commitment to delivering technology that will further the growth of products and services in the credit union marketplace. Vendors’ products are evaluated according to affordability, the benefit to credit unions and their members, a commitment to open standards and health of the company.

SECU provides 2 million challenge grant for family house

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RALEIGH, N.C. (11/17/09)--State Employees’ CU (SECU) members, through the SECU Foundation, have provided a $2 million challenge grant to Hospital Hospitality House of Winston-Salem for SECU Family House.
State Employees’ CU (SECU) in Raleigh, N.C., has provided a $2 million challenge grant to Hospital Hospitality House of Winston-Salem. From left are: Dr. William Applegate, president of Wake Forest University Baptist Medical Center; Sallye Liner, president of Forsyth Medical Center; Beth Baldwin and Sandy Baldwin, co-chairs of Hospital Hospitality House of Winston-Salem; and David King, SECU Foundation board of director. (Photo provided by State Employees’ CU)
The house will provide families with a place to stay while caring for a loved one at Forsyth Medical Center or North Carolina Baptist Hospital, the credit union said. The house will have 40 rooms and will be built on an 8.8 acre site next to the SECU CareCenter in Winston-Salem. Construction will begin in April and the facility will open in early 2011. “Hospital guest homes like SECU Family House provide critical lodging needs for families who have traveled to care for loved ones undergoing medical treatment at local hospitals,” said David King, a member of SECU Foundation’s board of directors and immediate past chairman. “Affordable lodging is not always available and this facility will fill that need during a difficult time. SECU has $18 billion in assets.

FIs struggle to reconcile sales culture self-service

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NEEDHAM, Mass. (11/16/09)--Retail financial institutions are struggling to reconcile their self-service, multichannel world with their sales culture, according to a new study from TowerGroup. Self-service channels in retail financial institutions have exploded since 2005, with an impact on the roles and responsibilities of staff on the front lines--those who face customer-members, said the Needham, Mass.-based financial services research and consulting firm. In "The Sales Culture in Retail Banking: Getting to Sales 2.0 in the Self-Service Era," Kathleen Khirallah of TowerGroup's retail banking division evaluates the efficacy of retail banks' sales capabilities during a time of continued rapid transition to self-service channels. Among the findings:
* The new era of sales culture--dubbed Sales 2.0--balances sales and service priorities with a focus on fulfilling member/customer expectations for the customer experience; * Sales 2.0 demands a cross-functional management approach that recognizes that sales and service priorities are enterprise issues and that executives throughout the financial institution are responsible for its success; * The explosion in the number of transactions occurring in the self-service channels is forcing financial institutions to readdress the limitations of their existing sales culture; * The sales culture of the vast majority of banks has two major flaws: focusing on sales rather than service, and being limited to interactions that take place in the contact center and the branches; * Consumers continue to demand channel integration policies that facilitate moving among channels for complex sales and service transactions; and * Financial institutions that have started the process of adapting Sales 2.0 are acknowledged leaders in customer/member experience management.

Invest in America adds FDT florists CU Benefits

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LIVONIA, Mich. (11/16/09)--Credit unions' incentive program with auto dealers, Invest in America, has added two more alliances providing discounts to members: FTD Florists for flowers and gift packages, and CU Benefits Express for medical and lifestyle benefits packages. Credit union members will get a 20% discount on FTD flowers and gift packages with a seven-day satisfaction guarantee. The program will run through Oct. 31, 2010. CU Benefits Express--through a partnership with Credit Union Resources, an affiliate of the Texas Credit Union League--offers credit union members discounts on a variety of services in medical benefits and lifestyle benefits packages--each for around $12 a month. Each package includes more than a dozen free or discounted programs such as LifeLock identity theft services, TelaDoc 24/7 phone access to doctors, and discounts on everything from chiropractors to restaurants to pet care. Some programs purchased on their own would cost as much as an entire CU Benefits Express package. "There has never been a better time to be a member of a credit union. The new Invest in America offers from American companies resonate with credit union members," said David Adams, CUcorp CEO and Michigan Credit Union League president/CEO. He noted the new additions significantly expand the scope of the products offered by credit unions. Also in November, Invest in America announced its Chrysler "Affiliate Rewards" program, where credit union members receive preferred pricing through the end of November. To date more than 2,000 credit unions market the program, with more than 200,000 General Motor and Chrysler vehicles sold. New partners are added every month. Invest in America also is offering discounts with Chrysler, GM, Sprint, Thor Industries, and Allied Moving and Storage. For more information use the link.

Wisconsin league president elected AACUL chairman

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NAPLES, Fla. (11/16/09)--The American Association of Credit Union Leagues (AACUL) elected its executive board and officers during its annual meeting held Thursday through Saturday in Naples, Fla. They are:
* Chairman, Brett Thompson, president/CEO of the Wisconsin Credit Union League; * First vice chairman, Bill Mellin, president/CEO of the Credit Union Association of New York; * Second vice chairman, Wendell Lyons, president/CEO of the Kentucky Credit Union League; * Treasurer, Bill Cheney, president/CEO of the California and Nevada Credit Union Leagues; and * Secretary, Tracie Kenyon, president/CEO of the Montana Credit Union Network.
Thompson, formerly the first vice chairman of ACCUL, said of his election, "Leagues and credit unions have a full plate of challenges and opportunities--economic, legislative and regulatory among them. I look forward to addressing them as AACUL chair. "Our goal, as always, is to work collaboratively to best position leagues as a powerful and innovative resource and advocate for our member CUs." Also serving on the board in ex-officio capacity are Rosie Holub, immediate past chairman and president/CEO of the Missouri Credit Union Association, and Susan Newton, executive director of AACUL. For more coverage of the ACCUL meeting, see "Matz to AACUL: NCUA to help CUs manage higher risk" and other stories in News Now's Washington section.

Rutgers University-based CUs discuss merger

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NEW BRUNSWICK, N.J. (11/16/09)--Two credit unions that serve the Rutgers University campus are discussing a possible merger. A merger between University Student and Alumni FCU and Rutgers FCU would provide “tremendous economies [of scale],” Rutgers FCU CEO Howard Elkin told News Now. Rutgers FCU has $71 million in assets and Rutgers University Student and Alumni FCU has $3 million in assets. The credit unions are located within three blocks of each other on campus, but serve different memberships. Rutgers University Student and Alumni FCU serves students and alumni of Rutgers. Rutgers FCU serves faculty. Combining the two “makes sense,” Elkin said. The Daily Targum, Rutgers’ student newspaper, reported Thursday that an employee and member of Rutgers University Student and Alumni FCU had filed a lawsuit against the student credit union’s board of directors, which had voted and agreed to propose a merger with Rutgers FCU. The merger would not have students’ interest in mind, the newspaper said. Rutgers FCU said it is open to discussing a merger despite the lawsuit. “We’re still willing to merge when [Rutgers University Student and Alumni FCU] resolve their issues,” Elkin said. University Student and Alumni FCU had not responded to News Now’s request for information by press time.

U.K. CUs authority broadens to address global issues

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BIRMINGHAM, England (11/16/09)--Credit unions throughout the United Kingdom are being granted additional capabilities by the country’s Parliament to serve more members left underserved by banks during the global financial crisis. Credit unions’ didn’t contribute to the crisis, which is driving the new opportunities--a recognition other countries, including the U.S, would do well to acknowledge--said executives from the World Council of Credit Unions (WOCCU) and the Credit Union National Association (CUNA). “The U.K.’s banking system has been decimated to an even greater degree than that of the U.S., but the country's credit unions have grown in terms of assets and members served,” said Dave Grace, WOCCU vice president of association services, at the Association of British Credit Unions Ltd. (ABCUL) fall meeting earlier this month. “Lawmakers have realized this and are expanding financial cooperatives' powers for the first time in 30 years,” he added. “That recognition is something from which credit unions in other countries, including the U.S., could benefit.” The Financial Services Authority (FSA), U.K.’s regulatory body, has taken steps to broaden financial cooperatives' abilities in recognition of the relatively stable position financial cooperatives have held even during the worst days of the crisis, Grace said. Under proposed regulations, credit unions would be able to serve more consumers, issue interest-bearing shares and gain access to alternative capital. Lawmakers also are increasing capital and liquidity requirements for the country’s 500 credit unions to help avoid future financial industry problems and provide greater protection for consumers. As part of the changes, the proposed regulations will raise the level of governance standards, increase minimum liquidity requirements for all credit unions and raise capital-to-asset ratios for smaller institutions. The proposal is out for comment until Feb. 10, with plans to enact the new rules during next year’s second quarter. The new regulations will be phased in over a two- to three-year period. Credit union stability in the U.K. has mirrored that of U.S. credit unions during the past year. Unlike banks, credit unions have not solicited nor received government bailout funds. However, U.S. credit unions already have significantly greater authority than those in the U.K. and would not benefit as greatly by broadened service capabilities, according to Mike Schenk, CUNA vice president of economics and statistics. “There are some fairly substantial differences between the credit union systems in the U.S. and U.K.,” said Schenk, who shared a panel with Grace during the conference convened by ABCUL, WOCCU's member organization in the U.K. “We already have authority to do things that they don't and, since our credit unions are bigger, they tend to exercise that authority.” U.S. policymakers have been increasingly open to efforts to amend restrictions on credit union member business lending, Schenk explained. CUNA conservatively estimates that removing the decade-old limit would lead to an additional $10 billion in business loans in the first year if the authority were expanded. The resulting boost could generate 108,000 new jobs. The link between expanded authority and job creation is critical in the current economic environment, he noted. Schenk agreed that U.S. credit unions deserve greater recognition for not contributing directly to the global recession, even as they struggle to deal with the fallout from competitors’ errors in judgment. Public recognition, rather than increased opportunity, could be more beneficial in helping U.S. credit unions avoid punitive regulations as the industry emerges from the crisis, he added. “For the most part, we’re playing a defensive position,” Schenk said. “However, the window of opportunity isn't opened quite as wide for credit unions in the U.S. as it is in the U.K.”

Vermont league moves checkcard promo to after holidays

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SOUTH BURLINGTON, Vt. (11/16/09)--The Association of Vermont Credit Unions (AVCU) has decided to move this year’s CU Checkcard program promotion away to six weeks after the holidays. Transaction volume is typically high during the holidays. AVCU hopes the move will assist credit unions by improving interchange revenue during a traditionally slow period. For the past few years, the program has sponsored a holiday giveaway promotion featuring a grand prize package worth more than $2,500. With a recurring theme of the “Family Land” game board, a takeoff on a popular children’s board game, the holiday promotion has drawn participation from nearly all AVCU member credit unions offering the CU CheckCard to members, the association said (Newslines Express Nov. 6). Each credit union agrees to award a weekly prize of at least $25 in value for the six-week promotion, which gives members a chance to win the grand prize. AVCU’s 2010 Family Land--Winter Vacation Edition promotion will run from Jan. 1 through Feb. 11. The grand prize package includes $2,010 in cash, plus four Vermont prizes:
* A full day of cross country skiing or snowshoeing, including trail fees and equipment rental; * A handcrafted Vermont-made wooden toboggan; * A gift basket of Vermont breakfast favorites including Green Mountain Coffee, Lake Champlain Chocolates Cocoa, and Dakin Farm buttermilk pancake mix, cob smoked bacon, maple syrup and preserves; and * A $50 convenience store cash card for gas or other purchases.

California columnist CUs looking better and better

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SAN JOSE, Calif. (11/16/09)--Credit unions today are available to everyone and many pay higher interest rates on deposits than banks, said a California newspaper columnist. In the past a credit union was viewed as a “small, hidden-away office, closed to the general public” but credit unions today have “opened their doors to everyone, and offer the same services as banks and savings and loans,” wrote Cliff Pletschet, financial columnist in a Friday column for The Mercury News in San Jose, Calif. While some consumers may believe that the differences in what credit unions pay in higher rates may be too insignificant to make changes in where they bank, there is another reason, Pletschet added. Credit unions are much stronger and better run than most banks and when the economy recovers, their interest rates are likely to rise faster and higher than those paid by banks, William Cheney, CEO of the California Credit Union League, told Pletschet. Pletschet quoted an official at a local credit union about another key advantage of credit unions--low fees. “One of the things that we have found in our research is that people are very frustrated with the fine-print fees they pay at other financial institutions, so we have designed our accounts to eliminate as many of those fees as possible,” Kristin Dove, vice president of marketing at Pacific Service CU, Walnut Creek, Calif., told the newspaper. “As a not-for-profit financial institution, our first priority is to create products that are consumer-friendly, not profit-friendly, so we have created ways for people to pay no or low fees.” Consumers should check out the nearest credit union to examine all the advantages it offers, including better rates on deposits, Pletschet concluded. To read the article, use the link.

Texas leagues top marketing awards go to Neches FCU

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FARMERS BRANCH, Texas (11/16/09)--The Texas Credit Union League honored Neches FCU with two top marketing awards at the league’s 22nd Annual Credit Union Marketing and Business Development Conference in Galveston. Neches FCU, Port Neches, Texas, received the People’s Choice Award and Best of Show Award under the Youth/Senior Marketing category for the same entry. The credit union was honored for developing nSpire, which uses social networking sites such as Facebook and Twitter and podcasting to promote the credit union difference. The credit union was also cited for events it offered to connect with members and potential members (LoneStar Leaguer Nov. 13). The league presented hundreds of awards in the 14th annual Lone Star Awards program. Entries were judged on results, creativity and the effectiveness of information and education provided. The awards drew 255 entries from 64 credit unions statewide, the league said. For a list of award winners, use the link.

PCUA Pacul employees step up to fitness challenge

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HARRISBURG, Pa. (11/16/09)--During a 12-week, 10,000-step walking program, 39 employees of the Pennsylvania Credit Union Association (PCUA) walked millions of steps, which equaled thousands of miles. For a little rivalry, the PCUA building competed against employees in the Pacul Services Inc. (PSI) building (Life is a Highway Nov. 13). The PSI building employees won with 14,232,172 steps. With roughly 2,000 steps in a mile, they could have walked from Augusta, Maine, to San Diego (3,270 miles) and back. The PCUA group walked 10,388,809 steps, equivalent to a roundtrip walk from Augusta, Maine, to El Paso, Texas (2,630 one way). The daily average was 7,516 steps or 3.8 miles; and weekly--52,609 steps, 26.6 miles. The 12-week overall average was 631,307 steps for 318.8 miles, which would be a little farther than Philadelphia to Pittsburgh (614,000 steps for 310 miles). The goal of the program was to increase individual physical activity, and eventually reach 10,000 steps per day, PCUA said.

CU System briefs (11/13/2009)

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* WARMINSTER, Pa. (11/16/09)--Freedom CU and University House FCU merged on Oct. 26, announced Freedom, a $390 million asset credit union based in Warminster, Pa. University House FCU had 35 members and $80,000 in deposits, with shares that were exclusively savings. "Freedom is happy to step in and help University House," said Lee T. MacMinn, Freedom's president/CEO, in welcoming the new members. "The merger has allowed us to not only offer help to University House members, but to also show our support for the credit union movement as a whole," he said. Freedom has more than 55,000 members and operates branches in Philadelphia, Warminster, and Lansdale, Pa. … * MINNEAPOLIS-ST. PAUL (11/16/09)--Spire FCU announced Thursday the resignation of President/CEO John Gisler on Oct. 27 to pursue other opportunities. Dan Stoltz, executive vice president and chief financial officer of the $606 million asset, Falcon Heights, Minn.-based credit union, has been named interim CEO. Gisler was with Spire for 22 years, 20 of them as president/CEO. The credit union changed its name in 2008 from Twin City Co-ops FCU (Minneapolis-St. Paul Business Journal Nov. 13) … * CEDAR RAPIDS, Iowa (11/16/09)--An off-duty uniformed police officer hired by Collins Community CU as security thwarted a robbery at the credit union Thursday. The officer was inside when two men wearing bandannas tried to enter. One held a handgun, the officerd told police in Cedar Rapids, Iowa. They saw him and immediately turned and ran. The officer chased them and called for backup. The two were still at large Friday. The incident occurred less than 24 hours after another credit union in the city was robbed (KCRG-TV9 Nov. 13) … * RALEIGH, N.C. (11/16/09)--A groundbreaking ceremony was held at SECU House--the new wing at Kitty Askins Hospice Center, Goldsboro, N.C.-- to mark the center's expansion to 24 beds from 12. State Employees' CU members, through the SECU Foundation, provided a $750,000 grant to Home Health and Hospice Care Inc. (3HC) for the expansion. Pictured are, from left: Mark Twisdale, SECU Foundation executive director; Dean Lee, 3HC president; Donna Oldham, SECU vice president of Goldsboro-West Ash St. branch; Shirley Bell, chairman of the SECU Foundation Board; Bo Wessell, member, SECU Advisory Board; and Miriam Wessell, 3HC Advisory Development Board member. (Photo provided by SECU Foundation) … * DES MOINES, Iowa (11/16/09)--Affiliates Management Co. (AMC), a wholly owned holding company subsidiary of the Iowa Credit Union League, has raised more than $20,260 for United Way during its 2009
Click to view larger image Click for larger view
annual fundraising campaign, setting a company record. AMC was formed to integrate and align the league's operating companies, including The Members Group (TMG), TMG Financial services, Community Business Lenders, PolicyWorks and Coopera Consulting. Pat Jury, league president and chairman of AMC, noted that 200 employees participated. They raised money through pledges and fundraisers such as this pie-eating contest. From left are Kelly Wadsworth of AMC, Warren Morrow of Coopera Consulting, Mike Powers of AMC, Todd Herren of TMG, Murray Williams of the league, and Mark Kilian of Community Business Lenders. (Photo provided by Iowa Credit Union League) … * BURNSVILLE, Minn. (11/16/09)--US FCU employees raised more than $20,691with department competitions during October for the Combined Federal Campaign (CFC) in October. The newest event: voting for one of the credit union's seven executive management team members whom they would like to see kiss a live goat, provided by a member. Winners were Marty Kelly, senior vice president of marketing and business development, and Leon Eichten, senior vice president and chief financial officer. Although only two had to kiss the goat, others volunteered to do the same, including Cheryl Reed, vice president branch member service; Sue Peters, vice president accounting; Eileen Marcus, assistant vice president and director of Member Service Center; and even Bill Raker, president/CEO. Raker is shown here taking the smooch with "Supergoat." Of the amount raised, more than $14,815 went to the credit union's designated charity, the Children's Miracle Network, while the rest went to charities designated by the donors. (Photo provided by US FCU) …

Be prepared for continued states budget struggles

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WASHINGTON (11/13/09)--Credit unions should be prepared to help members affected by state budget problems through 2012--or longer. According to the National Governors Association, state governments likely will struggle with revenue at least until 2012. And at least one analyst says many state budgets won't recover fully from the recession until much later. That would have continuing implications for credit unions that serve state employees in their states. During this past year's budget impasses in states such as California and Pennsylvania, credit unions whose fields of membership include state employees came to the rescue, with short-term loans, 0% interest loans, deferred payments, special furlough deals, and acceptance of state warrants or IOUs. In fiscal 2009, state revenues fell 7.5%, said the National Association of State Budget Officers Thursday (The Wall Street Journal Nov. 12). The association predicts revenues will continue to decline for one or two more quarters--the worst numbers of the decade. The high unemployment rate, now officially 10.2%, is hitting state coffers where it hurts--in revenue from sales and income taxes. State governments faced $250 billion in budget gaps between fiscal years 2009 and 2011, according to a survey released by the two state associations. States have managed to close $72.7 billion of the gap in 2009 and $113 billion before enacting fiscal 2010 budgets, but that was with help from federal stimulus funds. State governments also have taken measures to cut expenses and raise taxes and fees. Like consumers, the states aren't spending. They cut expenditures by 4.8% in 2009 and are expected to cut at least 4% in 2010. That would be the first time states have cut spending in back-to-back years. According to Raymond Scheppach, executive director of the governors' association, state will struggle with obligations such as funding pension and health-care trusts, maintaining local infrastructure and rebuilding rainy-day funds that the last two years have depleted. States won't fully recover from the recession until late in the next decade, he said.

Floods slides bury El Salvador--CUs members affected

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SAN SALVADOR, El Salvador (11/13/09)--In the wake of flooding and mudslides that are claiming lives and rendering much of El Salvador's population homeless, World Council of Credit Unions (WOCCU) is in contact with local authorities and FEDECACES, its member organization there, to assess how to best help the thousands of people affected by the disaster.
Click to view larger image Flooding and mudslides in El Salvadore have prompted the World Council of Credit Unions to establish a fund for credit unions and members affected. (Photo provided by the SHARE Foundation, via the World Council of Credit Unions)
According to reports, three days of heavy rains have produced nationwide flooding and mudslides that already have killed an estimated 130 people. Several small towns have been all but buried, leaving thousands homeless. According to sources, the situation has the potential to worsen if displaced people, including credit union members, do not receive the assistance they need. "WOCCU has worked with FEDECACES and the country's 30-plus credit unions, which serve more than 120,000 people, for many years," said Brian Branch, WOCCU executive vice president and chief operating officer. "We are now committed to helping El Salvador's citizens who are credit union members survive this crisis. Donations to the Worldwide Foundation for Credit Unions will help us achieve this goal." WOCCU has fostered relief and rebuilding efforts during past international disasters, including the December 2004 Asian tsunami and the February 2006 Philippine islands landslide. Following the tsunami, WOCCU led a US$1.5 million project to rebuild credit unions in Sri Lanka and revitalize the country's credit union league. After the Philippine islands landslide, WOCCU supported the local league's administration of "livelihood loans," small microloans that helped credit union members and employees rebuild their homes and businesses. To support El Salvador's credit unions and their members through the international credit union disaster relief fund, make payments via check, credit card or wire to: Worldwide Foundation for Credit Unions Inc.

5710 Mineral Point Road

Madison, WI 53705 USA

Donations may be made online with a credit card at www.woccu.org /give. For wire transfer information, contact: Valerie Breunig, Worldwide Foundation for Credit Unions, 608-395-2055 or via e-mail at vbreunig@woccu.org. Please indicate that the donation is designated for the El Salvador Disaster Relief Fund.

UN FCU investment officer discusses stocks on IBloombergI

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NEW YORK (11/13/09)--U.S. stocks fell Thursday after six straight gains for the Standard & Poor's 500 Index, and United Nations FCU, New York, was on hand to interpret the retreat for Bloomberg.com. Christopher Sullivan, chief investment officer at the $2.9 billion asset credit union based in Long Island City, told the publication: "To get further rallies from here, we'll have to see continuation of gradual improvements with respect to growth, business activity and hopefully a continuing slowdown in the pace of layoffs." The article noted that the earnings as most U.S. stocks retreated was a disappointment for investors at a number of companies. The Dow Jones Industrial Average climbed to a 13-month high for the second day, said Bloomberg.com (Nov. 12) Sullivan oversees $1.4 billion in investments at the credit union.

Ill. commission League had critical role in student loans

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CHICAGO (11/13/09)--The Illinois Student Assistance Commission (ISAC), in announcing it still had $66 million available for low-interest federally secured student loans to Illinois students, singled out the Illinois Credit Union League as playing a critical role in the student loan program. The league "played a critical role in securing $110 million for student loans, ensuring continued FFELP [Federal Family Education Loan Program] lending," said ISAC. "Thanks to the credit unions' support, we continue to provide student loans to those in need at FFELP-participating schools while serving our mission by offering Illinois students and parents college access programs, financial literacy education, and loan delinquency and default prevention," said ISAC Executive Director Andrew Davis. Davis said ISAC has committed $44 million in student loans for the 2009-2010 academic year. The league helped obtain commitments from 14 credit unions in the state to invest $105 million in ISAC-issued securities to finance the loans (News Now July 16).

S. Carolina CUs agree to smaller league board

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COLUMBIA, S.C. (11/13/09)--Delegates at a special membership meeting of the South Carolina Credit Union League (SCCUL) Oct. 28 unanimously affirmed a bylaws amendment from the league's Board of Directors to reduce the number of directors to seven from 14, and to extend director terms to three years. To execute the change, each current league director will resign April 17, 2010, at the 2010 Annual Meeting business session. Those interested in continuing on the board must seek nomination and be elected by the traditional mail-in ballot process, said the league. The change also sets up future election cycles by staggering successful candidates' terms. Three seats will have three-year terms, two will have two-year terms and two will have one-year terms. SCCUL Chairman Scott Woods, who is also CEO of North Charleston-based South Carolina FCU, congratulated the sitting directors on the action. "I thank each sitting director for putting this body's efficiency and value to the league and its membership ahead of any personal objectives." He noted the action positions the league for continued success in serving member credit unions. The reorganization stems from a declining total number of credit unions in the state. SCCUL President/CEO Garry L. Parks shared the findings of a study by league executive officers of other leagues and the ratio of directors to members. Parks noted that the board makeup had remained the same since the number of credit unions eligible for league membership peaked at 202 in 1978. As of December 2008, SCCUL membership totaled 81 credit unions. The South Carolina Credit Union League is celebrating its seventy-fifth year of service to Palmetto State credit unions.

Dover FCU staffer shares expertise in IHR TimesI

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DOVER, Del. (11/13/09)--A staffer at Dover (Del.) FCU shared her expertise with human resource professionals throughout the state in an article on multigenerational training published in the third quarter issue of HR Times. Dona Palermo, training coordinator at the $281 million-plus asset credit union, wrote the article, "Training Across Generations-- Battle or Opportunity?" In it, she explained the changing demographics of today's work force, the impact of the changes on training programs and the workplace, and the opportunities created by the changes for trainers. "True learning, formal or informal, can only occur if the generations learn to understand, appreciate, and respect each other," Palermo wrote. Palermo has designed and implemented annual training strategies for more than 100 staff and works closely with department to provide customized training platforms as needed. She also administers the credit union's online learning program. Palermo "has the ability to recognize the unique capabilities of each individual and mesh them to the needs of the organization so that everyone succeeds,' said Dover FCU President/CEO David Clendaniel. The magazine is devoted to human resource issues and information. Dover FCU is the largest credit union in Delaware.

Texas CUs restoring acre of land destroyed by Ike

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GALVESTON, Texas (11/13/09)--The Texas Credit Union League’s (TCUL) 22nd Annual Credit Union Marketing & Business Development Conference allowed attendees and individuals within the Galveston area to participate in a networking/teambuilding community initiative called “Give Galveston a Hand.” Held earlier this month with sponsorships from the TCUL-affiliated Credit Union Resources Inc. (CUR), the Texas Credit Union Foundation (TCUF) and other organizations, the event surpassed the team’s goal of restoring one acre of flora and fauna to the still-recovering land ravaged by Hurricane Ike one year ago (LoneStar Leaguer Nov. 12). After weeding, seeding, watering, clearing and planting, the volunteers participated in a beach walk to clean up debris in the sand. “It was an absolutely rewarding experience that brought more than 75 people working together, laughing together and realizing the kind of positive results that are only made possible through exceptional teamwork,” noted Staci Zale, TCUF associate director. “Every person on the beach was working hard to plant grasses to stabilize the sand dunes and get one step closer to our goal of restoring one acre of land within the area,” she added. “At the end of the process, we managed to bring new life to over an acre-and-a-half of the grounds, and all because we worked cooperatively and efficiently.” TCUF provided a grant for a community sponsorship to assist in transportation for the event. Also, TCUF acted as a co-sponsor of a “Thank You Reception & Vendor Fair” after the initiative. Sponsors included:
* CUR; * CUNA Mutual Group; * Southwest Corporate FCU; * TCUF; * Texas Credit Union Marketing Council; * CU*Swag; * PTP NEW MEDIA; and * Promotions Made Easy.

CU System briefs (11/12/2009)

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* HARRISBURG (11/13/09)--Representatives of the Pennsylvania Credit Union Association (PCUA) and the $306.8 million asset, Harrisburg-based Belco Community CU attended a reception Wednesday night hosted Gov. Ed Rendell and the first lady at the governor's mansion to thank volunteers of the Get Help Now PA program (Life is a Highway Nov. 12). Twelve credit unions participated in the program from July through Sept. 11, providing free legal and financial advice to the state's consumers. Valerie Jarret, special assistant to President Barack Obama, offered thanks to participants via a conference call. During the reception, the governor publicly recognized Belco's Tricia Heisey and her husband on their 20th wedding anniversary. The governor's comments drew applause and cheers for the couple. At the reception are, from left, PCUA Senior Vice President Mike Wishnow, Heisey and Laura Huggins of Belco Community CU, and Gov. Ed Rendell. (Photo provided by the Pennsylvania Credit Union Association) … * BREA, Calif. (11/13/09)--A faith-based credit union has filed a $9.45 million foreclosure against the 17-acre Summit Christian School of Palm Beach County, Calif. Evangelical Christian CU, a $1.2 billion asset credit union, made the loan in January 2008. The loan has been in default since August 2009. The credit union told the Palm Beach Daily Business Review (Nov. 11) it had no foreclosures on any properties until 2007, when the economy began declining. "If it comes to foreclosure, it's because we tried to work with the borrower and weren't able to reach an agreement," said Jac La Tour. "But like we always do, we will continue to try to work with the organization even after the foreclosure is filed," he told the publication … * KENNESAW, Ga. (11/13/09)--Credit Union of Georgia signed an agreement with Kennesaw State University (KSU) as title sponsor of the university's new Owl Nation Rewards Program, an incentive program to create interest in the university's athletic program among the student body. The Woodstock, Ga.-based credit union's sponsorship includes the purchase and setup of all equipment and software necessary for program operations. Students will receive points for attending sports events and can redeem points on the Owl Nation website for prizes such as certificates for local restaurants and KSU logo gear. At the program's donation acceptance are from left: Dr. Dave Waples, KSU director of athletics; Kathy Bouyett, business development representative at Credit Union of Georgia; and Lauren Katovsky, KSU director of marketing and sponsorship. (Photo provided by the Credit Union of Georgia) … * RANCHO CUCAMONGA, Calif. (11/13/09)--Mark Chatfield has been named chief operating officer of CO-OP Member Call Center, a subsidiary of CO-OP Financial Services in Fort Worth, Texas. The center, formerly The LoanLink Center, provides member and loan services via telephone and Internet to members of nearly 350 credit unions. Chatfield, with 20 years experience in the credit union industry, will be responsible for expanding the front-line credit union member service and providing additional ways to ensure credit unions can offer services to members. Chatfield had served as vice president, sales with CUNA Mutual Group since February 2006. CO-OP acquired The Loan Link Center on Oct. 31 from CUNA Mutual. Chatfield also served several years as senior vice president, chief business officer of Credit Union Resources Inc., affiliated with Texas Credit Union League, and as owner of Professional Alternatives of Dallas, LLC, a professional services placement company ... * HARTFORD, Conn. (11/13/09)--A Hartford (Conn.) Healthcare FCU employee has won the Innovation--Individual award category of the Hartford Business Journal's Diversity and Inclusion Conference Awards. Brian Czaja, a full-time employee for 12 years who is legally blind and mentally challenged, was selected for his outstanding performance in managing file room responsibilities, said the credit union. Czaja was hired to scan 12,000 membership cards into computer files. With equipment adjustments, he not only met the challenge but exceeded expectations, prompting the credit union to keep him on staff permanently, said Carol Bayreuther, credit union president/CEO. Also, the credit union was presented the Outstanding Business Award by the West Indian Foundation of Hartford for its role in the expansion of the Healthcare CU in Trinidad and Tobago, and for its commitment to the West Indian community in greater Hartford …

CUNA CUNA Mutual staffers create training buzz via YouTube

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MADISON, Wis. (11/13/09)--Staffers at the Credit Union National Association (CUNA) and CUNA Mutual Group created a brief video skit on YouTube that CUNA Mutual Group is using for employee training. The two-minute skit features a man personifying CUNA talking to a woman personifying CUNA Mutual. The characters discuss the differences and similarities between the two organizations and how people often confuse the companies. The tag line for the video is “Same industry--different roles.” In the skit, Christopher Morris, web manager for CUNA Councils, represents CUNA, and Jennifer Kuhn, CUNA Mutual senior manager of leadership and performance management, represents CUNA Mutual. The idea for the video originated a few months ago at the National Credit Union Foundation’s Development Educator training, Morris said. To view the video, use the link.

BayPort sponsors 24 teachers to national fin lit conference

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NEWPORT NEWS, Va. (11/13/09)--BayPort CU, Newport News, Va., sponsored 24 teachers to attend the first National Financial Literacy for Educators Conference in Washington, D.C., Nov. 6-8.
Click to view larger image BayPort CU, Newport News, Va., recently sponsored 24 local teachers, including these, to attend a national personal financial literacy conference in Washington, D.C. (Photo provided by BayPort CU)
The conference, targeting those who teach kindergarten through 12th grade, was presented by the JumpStart Coalition for Personal Financial Literacy. BayPort paid $175 per teacher, which covered hotel accommodations and participation. The credit union also gave each teacher $125 to cover travel expenses, said Marilyn Bennett, BayPort creative services administrator. BayPort decided to sponsor the teachers after receiving an e-mail from the CUNA Personal Finance Initiative's CUNAPFInteractive, suggesting that each credit union sponsor a teacher to a national conference, Bennett told News Now. “This got me thinking that we could do that and more--with 12 branches in the greater Hampton Roads area, why not sponsor 24 teachers?” she said. Each BayPort branch manager works with a local school. The credit union worked with the schools to select the teachers, and with the City of Newport News School Superintendent’s Office, which sent 12 teachers. This is the first time BayPort has sponsored teachers’ attendance at a conference, and the teachers who attended the event hope it will become an annual event. “From the e-mails I have gotten back from the teachers, they are hoping BayPort will make it an annual event so that other local teachers can benefit the way they have,” Bennett said. “They have come away from the experience feeling very special and many of them have already started using materials they received when they were in Washington last week.” Next year, the state of Virginia will require financial literacy as a component of its Standards of Learning testing, Bennett said. “We knew how important this topic would be for our local schools this year,” she said. “And most of the schools used this conference as an opportunity to send the teachers who were going to be working directly with the financial literacy training,” she added. BayPort became a community chartered credit union two years ago. Last year, Bennett was charged with creating a financial literacy program. “We’ve done seminars, classroom presentations, and financial counseling, but hadn't really created a solid all-encompassing program,” she said. “So to position ourselves as a community resource for financial literacy we thought sponsoring teachers from our local area to attend this conference would be a great beginning with the school systems. We wanted to emphasize that we were serious about our support and available as a resource to our community.” BayPort has $1.10 billion in assets.

CUNA announces 2009 national Desjardins awards

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MADISON, Wis. (11/13/09)--The number of states entered in this year’s national Desjardins Youth Financial Education Award competition, sponsored by the Credit Union National Association (CUNA), grew to 27 compared with 25 last year. “The steady expansion of the Desjardins recognition program reflects credit unions’ national leadership in financial literacy,” said CUNA President/CEO Dan Mica. “Of course, the need for financial education is widely appreciated during hard economic times. But credit unions were active agents for financial literacy long before the most recent recession and will continue to be active long after the economy improves and employment rebounds,” Mica said. Fifty-two entries were received this year. Winners include:
* Arapahoe CU, Centennial, Colo.; * Beach Municipal FCU Partnership, Virginia Beach, Va.; * Indianhead CU, Spooner, Wis.; * The Maine Credit Union League; * Rogue FCU, Medford, Ore.; and * Unison CU, Kaukauna, Wis.
Honorable mentions were presented to:
* American Partners FCU, Reidsville, N.C.; * The Credit Union Association of Oregon; * Dakota Plains CU, Edgeley, N.D.; * DuPont Community CU, Waynesboro, Va.; * Greater Minnesota CU, Mora, Minn.; * Ohio University CU, Athens, Ohio; * Sunflower U.P. FCU, Marysville, Kan.; and * Virginia Educators CU, Newport News, Va.
The Desjardins awards will be presented at CUNA’s Governmental Affairs Conference in February in Washington, D.C. The award was named for Alphonse Desjardins, the founder of the North American credit union movement. It honors credit unions for their commitment to youth financial literacy.

Ban on nationwide CUs proposed in Ukraine

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KYIV, Ukraine (11/12/09)--The Ukraine's financial services regulator is proposing a ban of credit unions with a field of membership encompassing the entire country. The State Commission on Regulation of Financial Services Markets said that such establishments turn into small banks and have the most problems with payments during the economic crisis, according to the Ukrainian National News Agency (Nov. 6). The commission's draft amendments to the credit union law would require members be either individuals residing in one territory--such as a village, settlement, district or region--or those having a common place of work or studying. The commission also said it will toughen the responsibility of officials at credit unions. The Ukraine has 26 credit unions with an all-Ukrainian status, and all had problems during the economic crisis. They accounted for almost half of the share market's assets.

SW Corporate Forum speaker Economic recovery underway

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DALLAS (11/12/09)--Economic recovery, albeit in the early stages, is underway, a former CNBC chief economist told a packed house at Southwest Corporate FCU's recent Economic Forum. Marci Rossell told credit unions she is "absolutely confident in the real recovery of the global economy" and pointed to three signs of an improving economy: a rapid rise in the household savings rate, a dramatic drop in housing prices, and the nation's opportunity to increase exports, she said (eFACTS Nov. 10). Some say the economy won't grow until consumer spending returns, but savings has to come first, Rossell said. "This recession is fundamentally about the savings rate going from zero to 5%. People are now saving for unexpected expenses and for retirement. It is the best thing that ever could have happened. Yes, it's painful in the short run, but it is absolutely necessary for the long-term health of the economy," Rossell told the group. "Houses have been overvalued for about 10 years. The rule-of-thumb is that consumers can afford a house valued at 2 1/2-3 times their income. The median household income is $55,000 per year, but the median home price had been running about $212,000--above what the median household could afford. The market appears to have stabilized some now, and the median home price has dropped to $170,000," Rossell said. Exports will lead economic growth in 2010, Rossell told attendees. The declining value of the dollar gives the U.S. a competitive advantage in world markets, she said. Also, emerging countries such as China, India and Brazil have a portion of their population moving into a middle class and "they want to buy our goods." The recession, like the Great Depression, has altered the way people view risk. Ultimately, however, consumer spending will depend on income, which means job creation is necessary to get the economy back on track, Rossell said. Rossell predicted that in the next three months, the nation will see the unemployment rate stabilize at 10% and start declining. "That's when we'll get recovery in consumer spending," she concluded.

Bull Bear Report CUs continue growth during crisis

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NEW YORK (11/12/09)--U.S. credit unions continue to grow during the financial crisis by using a conservative, risk-averse approach that has resulted in a slow increase in the number of credit union industry workers and an uptick in member deposits, wrote a columnist Wednesday in the “Bull Bear Report” for fins.com--part of The Wall Street Journaldigital network. “In the 12 months ended in June, 1.6 million Americans joined a credit union, boosting the industry’s assets by 8.2%, according to the Credit Union National Association,” wrote Kyle Stock. “Consider this, only 12 of the almost 8,000 U.S. credit unions have failed this year, according to the National Credit Union Administration, a federal regulator,” Stock added. “At the same time, 120 of the 8,100 or so of the traditional banks in the U.S. have been shuttered this year by the Federal Deposit Insurance Corp. “While the number of credit unions in the U.S. has decreased overall in the past 10 years, consolidation and not failure is the reason--and membership has steadily increased,” Stock wrote. Several credit union CEOs interviewed said they were hiring more staff. What’s driving the growth? Two factors cited in the article are a flight to safety by consumers and the introduction of new products and services by credit unions, such as business loans. “Members go to the credit union and say, 'I’ve got a great car loan from you, I’ve got a great mortgage loan with you. Why can't I get a loan from you for my business?’” Pat Keefe, CUNA vice president of communications and media outreach, told Stock. To read the article, use the link.

Brokerage exec pleads guilty to 2.5M stock theft from CU

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RYE, N.Y. (11/12/09)--The former chief financial officer of a Rye, N.Y.-based credit union's brokerage firm has pleaded guilty to embezzling more than $2.5 million in stocks from the firm over nine years. John Walsh, 54 of Yonkers, pleaded guilty to first-degree grand larceny in the state Supreme Court in White Plains, N.Y. He was chief financial officer of Affina Brokerage Services, a subsidiary of the $773 million asset USAlliance FCU (lohudblogs.com Nov. 11). The thefts, which allegedly occurred from June 17, 1999, to Jan. 27, 2008, involved transferring shares of stock from the credit union into accounts he managed, then selling them for cash. He also created phony stocks and used them as collateral for loans, police said. Walsh faces three to nine years in state prison and restitution of the funds stolen. Sentencing has been set for Jan. 14.

Mortgage portfolio heads up 5 plan to buy home in 2010

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MADISON, Wis. (11/12/09)--Only 5% of Americans say they intend to buy a home in the next year, according to a survey conducted by Move.com. In a similar vein, the Filene Research Institute has just released a report about the future of home ownership and related business opportunities for credit unions. The survey by the real estate listings site indicates that roughly 25% of potential buyers said the No. 1 reason they would purchase a home now is because prices seem to have bottomed out, beating out other factors that include: a wide selection of homes, worries about rising interest rates, and the availability of bargain-priced foreclosures (USA Today Nov. 11). A Filene report, titled “Reimagining the Dream: The Future of Home Ownership,” addresses the “American dream” of buying, owning and maintaining homes and provides credit unions with advice on changes and trends in the housing market (LoneStar Leaguer Nov. 6). Included in the report--by Denise Gabel, Filene chief innovation officer, and Robert Manning from the Rochester Institute of Technology--are historical perspectives, current conditions and idea-generating topics concerning home ownership. Filene is conducting a webinar on the topic Dec. 2. For more information on report and webinar, use the link.

British regulator tightens CU rules

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LONDON, England (11/12/09)--The Financial Services Authority (FSA), the regulator of all providers of financial services in the United Kingdom, intends to tighten rules for England’s credit unions by increasing their minimum capital requirements. Increasing capital and liquidity requirements will offer better protection for members and help credit unions avoid failures and defaults, analysts said (Reuters via The New York Times Nov. 11). Under the changes proposed Wednesday, smaller credit unions need to meet a minimum capital-to-assets ratio of 3%. Currently they only need to be solvent. The National Credit Union Administration’s standard is 7% in the U.S. The changes also would raise start-up capital requirements to about $16,500 for small credit unions and about $83,000 for large credit unions. The changes also would raise the minimum liquidity requirement to 10% of total liabilities for credit unions. The rules changes also aim to bolster governance standards. The FSA cites poor governance as a key reason for the failure of credit unions. The changes would go in effect during the second quarter 2010 and be phased in over two to three years.

Eight indicted in 9 million international ATM heists

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WASHINGTON (11/12/09)--Eight Russian and Eastern European people have been indicted on charges that they are part of an international crime ring that hacked ATMs in hundreds of cities worldwide and stole $9 million within 12 hours. The group is one of two major cyber gangs targeted by law enforcement officials for creating havoc on U.S. financial companies (The Wall Street Journal Nov. 11). It is considered the more sophisticated of the two rings. The other gang is well known to credit unions. It was responsible for online attacks at Heartland Payment Systems, TJX Cos. and others. Credit unions and other financial institutions ended up replacing millions of credit and debit cards to avoid fraud. Those attacks spawned a series of lawsuits and legislative measures about protecting consumers' personal information. The gang's alleged ringleader, Albert Gonzalez of Florida, was indicted in August with his co-conspirators. The newly indicted group is allegedly responsible for a synchronized maneuver that began on Nov. 4, 2008, when four hackers broke into a computer system at RBS WorldPay Inc., the Atlanta, Ga.-based U.S. payment processing division of Royal Bank of Scotland PLC, said the U.S. Justice Department. Between Nov. 4 and 8, they extracted debit card numbers and personal identification number (PIN) codes from RBS's network. Ringleaders then distributed about 44 card numbers and their PINs to a world-wide network of cashers who used cloned prepaid ATM cards to withdraw cash from 2,100 ATMs in 280 cities, including cities in the U.S. The cybercriminals allegedly targeted payroll debit cards that companies issue employees for withdrawing their salaries. Once in the systems, the hackers increased the maximum withdrawal allowed and tried to destroy data on the systems to cover up the break-in, said prosecutors in Atlanta. The cashers who withdrew funds from the ATMs were permitted to keep a share of the amount withdrawn and return the balance to the hackers. After the withdrawals, the hackers allegedly tried to destroy data on RBS's network to conceal the thefts. Indictments included:
* Viktor Pleshchuk, 28, of St. Petersburg, Russia, who allegedly developed a method used to reverse-engineer PINS from encrypted data on RBS WorldPay's network, and is considered by law enforcement authorities as the leader of the gang; * Sergei Tsurikov, 25, of Tallinn, Estonia, who is awaiting extradition to the U.S. from Estonia in what would be the first extradition of a cybercriminal from Eastern Europe, considered a haven for the cyber underground; and * Oleg Covelin, 28, of Moldova, who allegedly distributed account information to others to withdraw money from the ATMs, according to the indictments.
RBS WorldPay detected the breach on Nov. 10 and disclosed it publicly on Dec. 23. The breach compromised roughly 1.5 million cardholders' accounts.

Seventeen CUs servicing Treasurys HAMP plan

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WASHINGTON (11/12/09)--Seventeen credit unions are participating in the Treasury Department’s Home Affordable Modification Program (HAMP). The program aims to help struggling homeowners by modifying their mortgages. As of Sept. 30, participating servicers performed 650,994 trial modifications, offered 919,965 trial period plans and sent about 2.78 million requests for financial information (MortgageOrb.com Nov. 11). Seventy-one lenders are participating in the program. Participating credit unions are:
* Bay FCU, Capitola, Calif.; * Central Florida Educators FCU, Orlando; * Jersey FCU, Cranford, N.J.; * DuPage CU, Naperville, Ill.; * Glass City FCU, Maumee, Ohio; * Great Lakes CU, Chicago; * IBM Southeast Employees FCU, Marietta, Ga.; * IC FCU, Fitchburg, Mass.; * Mission FCU, San Diego; * Oakland (Calif.) Municipal CU; * ORNL FCU, Oak Ridge, Tenn.; * Purdue Employees FCU, Lafayette, Ind.; * Schools Financial CU, Sacramento, Calif.; * SEFCU, Albany, N.Y.; * Stanford FCU, Palo Alto, Calif.; * Technology CU, San Jose, Calif.; and * Wescom Central CU, Pasadena, Calif.
DuPage CU and IC FCU are the most recent additions to HAMP’s list of servicers.

IABC NewsI reports good source for good rates CUs

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WASHINGTON (11/12/09)--Credit cards from credit unions are a good alternative for consumers looking to avoid the high rates and fees charged by some large credit card issuers, ABC News reported Tuesday. The article, “Find a Credit Union with Lower Interest Rates and Fees,” cited a Pew Charitable Trusts study that indicated credit unions’ interest rates on credit cards are about 20% lower than bank rates. “It’s not as difficult to qualify for membership in a credit union as it used to be,” ABC News said. In the comments section of the article, one reader wrote: “I switched everything from #### to my local credit union after #### raised my interest rate. I’m another good customer (paid on time, good credit score) that absolutely refuses to play with what amounts to legalized loan sharking.” The Pew study cited in the article also has garnered coverage in The Wall Street Journal and several regional broadcast news outlets. To read the article, use the link.

Alabama CUs league meet with Rep. Bachus during recess

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BIRMINGHAM, Ala., and TALLAHASSEE, Fla. (11/12/09)--The League of Southeastern Credit Unions and Alabama credit union officials from the 6th Congressional District met Tuesday with U.S. Rep. Spencer Bachus (R-Ala.), ranking minority member of the House Financial Services Committee, to discuss overdraft protection legislation under consideration by the committee.
Click to view larger image U.S. Rep. Spencer Bachus (R-Ala.) ranking minority member of the House Financial Services Committee, reviews hundreds of letters from credit union members in favor of overdraft protection. A group of Alabama credit unions met with him to discuss overdraft protection legislation. From left are Bachus; Linda Cencula, CEO, Alabama Telco CU, Birmingham; and Steve Swofford, CEO, Alabama CU, Tuscaloosa. (Photo provided by the League of Southeastern Credit Unions)
Legislation removing the overdraft protection services option is not the consumer-friendly proposal that its proponents claim, the group told Bachus. Many members rely on the service to help bridge the financial gap at the end of the month or pay period, said Joe McGee, CEO, Legacy FCU, Birmingham. Linda Cencula, CEO, Alabama Telco CU, Birmingham, said members use overdraft protection plans to avoid insufficient fund fees and the "domino effect that results in a declined check." Steve Swofford, CEO, Alabama CU, Tuscaloosa, presented hundreds of letters signed by members in favor of overdraft protection. "Either they use the service and do not want to lose that option, or they do not use it but fear that if this legislation passes, all financial institutions will no longer be able to offer free checking accounts due to the revenue shortfalls created by this bill," he said. Also in the group was Bill Connor, executive vice president/chief financial officer, America's First CU, Birmingham. "Having leaders from credit unions taking the time to meet with elected officials to explain the practical effects and consequences of legislative action is absolutely necessary to maintaining the environment in which credit unions can serve their members' needs," said league President/CEO Patrick La Pine. The Credit Union National Association (CUNA) recently testified on Capitol Hill in favor of credit unions' ability to offer members overdraft protection services. CUNA supports the programs as a way credit unions can serve members' financial needs and to help them resolve short-term financial problems. CUNA promotes "best practices" standards to distinguish credit union overdraft services from many bank programs that have been marketed to boost fee income without regard for the best interests of consumers.

CU System briefs (11/11/2009)

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* LANSING, Mich. (11/12/09)--Twenty-one attendees from Michigan's Metro East Chapter of credit unions met with seven state lawmakers Oct. 30 for a legislative breakfast, said the Michigan Credit Union League (Michigan Monitor Nov. 9). Credit unions received updates and weighed in on the state budget, account error notification, elder abuse, a zero-dollar political action committee reporting law, business lending, credit unions' tax exempt status and financial literacy. Lawmakers present included State Sens. Dennis Olshove (D-Warren) and Mickey Switalski (D-Roseville), and State Reps. Kim Meltzer (R-Clinton Township), Jennifer Haase (D-Richmond), Phil Pavlov (R-St. Clair Township), Jon Switalski (D-Warren) and Lesia Liss (D-Warren). In the photo, Sen. Mickey Switalski, left, talks with Michigan Schools and Government CU President/CEO Peter Gates. (Photo provided by the Michigan Credit Union League) … * PORTLAND, Ore. (11/12/09)--Johnathan D. Singleton, 43, of Portland was sentenced Tuesday in a U.S. District Court to 12 years and seven months in prison for robbing the Northwest Resource FCU, an $86 million asset, Portland-based credit union, on the morning of May 26. Singleton also was sentenced to three years of post-prison supervision. The robber entered the credit union, asked a teller for a business card and indicated he had a gun. He fled with $4,840 but was caught by police after he disembarked from a cab. All but $50 of the money was recovered. He has four prior convictions for robbery as well as convictions for assault and burglary (The Oregonian Nov. 10) … * PHOENIX (11/12/09)--Jorge Gutierrez, 31, of Tempe, Ariz., was sentenced Monday to nearly five years in prison for charges related to a string of bank and credit union robberies (Associated Press Newswires Nov. 10). Gutierrez was sentenced to 57 months after pleading guilty in August to robbing banks and credit unions in Phoenix, Tempe and Chandler. In each case the robber covered his face and presented notes to tellers demanding money and indicating he had a gun. He was arrested March 24 as he fled the Chandler branch of Desert Schools FCU, a Phoenix-based credit union, with about $2,300 … * MUSKEGO, Wis. (11/12/09)--Corporate Central CU based in Muskego, Wis., has promoted Jennifer Woznicki to manager member relations, announced the corporate. She joined the corporate in September 2000 as marketing and education director and in 2008 became the director of implementations and service support. In her new position, she is responsible for leading and providing oversight for member relations staff and enabling superior service to members and future members. She also is responsible for new and future accounts and implementation of new service conversions …

CU System briefs (11/10/2009)

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* WASHINGTON (11/11/09)--The 2010 Credit Union Cherry Blossom Ten Mile Run is set for Sunday, April 11, 2010. "This annual run has always been an important opportunity to gain recognition for our industry on Capitol Hill, but proposed financial services legislation amplifies the need to showcase the credit union difference and makes it vital for credit unions to unite in support of this important event," said David J. Serlo, president/CEO of PSCU Financial Services, lead corporate sponsor of the event. All proceeds go to Children's Miracle Network hospitals. Credit unions can contribute by donating a portion of interchange income, since the cooperative handles the processing. or by signing up as a race sponsor. Contact PSCU Financial Services for more information … * LENEXA, Kan. (11/11/09)--Two small Kansas City-based credit unions are merging into the $232.8 million asset Credit Union of Johnson County, based in Lenexa, Kan. The $2.8 million asset Leavenworth Teachers & Community CU merged into the credit union at the end of October. The $1.16 million asset Faith Financial CU plans to merge with the larger credit union at the end of November. The memberships of both smaller credit unions approved the mergers. Credit Union of Johnson County said it is retaining all employees from the smaller credit unions (Kansas City Star Nov. 9) …

DuTrac Community introduces EcoPlus relationship account

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DUBUQUE, Iowa (11/11/09)--DuTrac Community CU is providing long-term financial sustainability for its members and the communities it serves by introducing a new environmentally friendly relationship account called EcoPlus. The EcoPlus Account is a comprehensive relationship account that can be used by any DuTrac member or consumer within DuTrac’s 14-county charter area. To qualify, consumers need a direct deposit relationship with DuTrac and must subscribe to e-statements. After qualifying for the EcoPlus Account, members will receive no-charge checking that is fully automated--or “green,” meaning all transactions can be done online through DuTrac’s re-invented website and through the EcoPlus Debit Card. EcoPlus can be a paperless account. Even the switch kit, for consumers wanting to switch to DuTrac EcoPlus’ benefits, is automated, online and paperless. Benefits for qualifying EcoPlus members include:
* A 0.25% decrease in consumer secured loan rates--excluding mortgages and home equity lines of credit; * A 0.25% increase in term deposit rates; * Unlimited debit card use for both personal identification number-- or signature-based cards; * Reimbursable ATM charges; * Free BillPayer access and $10 each, up to $100, for automatic clearing house payments established; * Low-balance e-alerts; * Free early fraud detection; * Free identity theft resolution services; * Electronic promotion and rate alerts; * Free e-statements; * Free online account access 24/7; * Free access to MobileLink DuTrac’s mobile banking solution; and * One free credit report review a year.
“Sustainability means providing consumers with affordable financial services--financial services that change with their ever-changing needs,” said Andrew Hawkinson, president/CEO. “Hence, DuTrac is offering a no-cost checking solution that is not only green, but is also flexible enough to change as members’ needs change. It’s more than just a checking account, it affects members’ loan and deposit relationships with DuTrac.” “According to DuTrac’s internal analysis, a ‘typical member’ subscribing to DuTrac’s EcoPlus Account will save approximately $300 the first year,” said Jason Norton, senior vice president of marketing and business development.

ITimeI notes CUs program in Chrysler story

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NEW YORK (11/11/09)--Credit unions’ participation in “Invest in America” was noted in a Time magazine article Nov. 4. The article, “Amid tumbling sales, Chrysler looks to future,” examined Chrysler’s future amidst an economic downturn. Chrysler, which declared bankruptcy in June, reported a 30% drop in October sales on Tuesday. However, Time noted that Chrysler has been supported by the “Invest in America” program, which provides discounts to Chrysler vehicle buyers who receive financing through a credit union. More than 2,000 credit unions nationwide have promoted the “Invest in America” program and discounts on Chrysler products, the magazine said. “Invest in America” also offers discounts on General Motors vehicles. Chrysler’s financial position has improved, Sergio Marchionne, Chrysler’s CEO, told Time. Chrysler’s cash reserves increased to $5.7 billion from $4 billion since the company came out of bankruptcy, he added. To read the article, use the link.

Constitution Corporate is under normal supervision

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WALLINGFORD, Conn., and WASHINGTON (11/11/09)--Constitution Corporate FCU told its members this week that it had accumulated a deficit position of $2.4 million as of Sept. 30, which has been guaranteed by the National Credit Union Share Insurance Fund (NCUSIF). The communication was made "in keeping with our ongoing commitment to be candid and transparent as we attempt to manage difficult issues," said the Wallingford, Conn., corporate in a statement e-mailed to News Now. The corporate added that "we continue to provide uninterrupted service to members including the payment of all dividends on deposits. "Constitution’s board of directors and management remain in place and are committed to improving profitability. We continue to operate under tight cost controls and work in close contact with the regulators. Management continues to be dedicated to delivering a high level of service to the membership." The National Credit Union Administration confirmed the report. "NCUA is closely supervising the institution and is very aware of the difficulties it is encountering," said John McKechnie III, NCUA director of public and congressional affairs. "We are working with the board and management of Constitution in an effort to continue safe operations and uninterrupted service to its members. Constitution is under normal supervision,” McKechnie told News Now. He clarified that "NCUA did not provide cash assistance to Constitution--all liabilities have already been accounted for in the Share Guarantee Program as part of the Stabilization Fund." On Dec. 31, 2008, the corporate had membership capital shares totaling $66.8 million, and membership capital shares have been depleted as of Sept. 30, according to its unaudited financial statements for the nine months ended Sept. 30. Other than temporary impairment of investments totaled more than $79.8 million, contributing to a net income loss of $77.4 million, compared with $2.9 million on Sept. 30, 2008. In its statement, Constitution "also thanked members for their continued support and understanding during this exceptionally challenging time."

Hernandez named Texas league marketer of year

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FARMERS BRANCH, Texas (11/11/09)--Eve Marie Hernandez, vice president of marketing at Generations FCU in San Antonio, was chosen as the 2009 Texas Credit Union League (TCUL) Marketer of the Year. She earned near-perfect scores in all categories from the judges (LoneStar Leaguer Nov. 10). Hernandez led several award-winning efforts to provide traditional financial services in untraditional ways to the underserved and unbanked in the community, TCUL said. They include:
* Spearheading the credit union’s efforts with local government and non-profit agencies to combat predatory tax refund anticipation lenders; * Writing a proposal and business plan for a partnership between Generations and a local Goodwill agency to offer branch services to the underserved inside Goodwill retail stores; * Working with her team to develop an alternative payday loan and second-chance checking account that, along with financial education and budgeting classes, gives the underbanked opportunities to successfully manage their personal finances while keeping much of their income; * Serving on the Texas Credit Union Marketing Council Executive Committee for three years, including chair for one year; and * Driving the credit union’s name change and rebranding effort.

IN.Y. TimesI Lieber You can get better cards at CUs

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NEW YORK (11/11/09)--Consumers looking to get the best deal on credit cards will pay lower rates and receive better treatment from credit unions, The New York Times financial columnist Ron Lieber wrote Tuesday. Although big card companies have the edge when it comes to racking up frequent flier miles and other rewards, consumers who carry a large balance over months or years will do better at credit unions, Lieber wrote. “Credit unions are nonprofit entities and are controlled by their members, which gives them a big advantage on pricing,” he wrote. “Having a credit union’s credit card in your wallet is a good option for the fed up and indebted, or for anyone who worries about needing a card to borrow someday,” Lieber added. The column also pointed consumers to CUNA's online CU locator at www.creditunion.coop to help them find a credit union they can join. To view the column, use the link.

Iowa foundation tops 1 million for IDAs

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DES MOINES, Iowa (11/11/09)--The Iowa Credit Union Foundation (ICUF) has received a grant from the Assets for Independence (AFI) Individual Development Account (IDA) Program for $257,920, bringing the total funds raised for the ICUF’s Credit Union Family Partnership IDA program to $1.2 million. IDAs are matched savings accounts in which a participant’s savings is matched by a grant from another organization. Individuals use the funds to purchase an asset, such as a home; start or expand a business; pay for education or training; or purchase a vehicle to get to work. Participants must meet income guidelines to qualify. The additional funds have allowed ICUF to expand its program to nine more Iowa credit unions. Eighteen credit unions participate in the program, reaching 91 of Iowa’s 99 counties. The IDA program has helped more than 33 Iowa residents save for assets. In July, the program’s first saver, Christy Mart, purchased her first home in Wallingford, Iowa, with $6,000 from the program. ICUF hopes to connect 500 Iowans to an IDA account during the next five years. IDA program partners include Coopera Consulting and the Iowa Credit Union League.

Forty video entries tell REAL-life member stories

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WASHINGTON (11/11/09)--Credit unions and state leagues participating in the National Credit Union Foundation’s (NCUF) REAL Solutions program produced 40 videos and entered them into the foundation’s REAL Solutions video contest. The contest aims to encourage credit unions to gather video testimonials of credit union members to promote the value of credit union membership and products featured in the REAL Solutions program. “A visual statement from actual credit union members is such a powerful tool,” said REAL Solutions National Program Director Lois Kitsch. “State leagues can use these video testimonials to promote the value of credit unions and to differentiate credit unions in the marketplace when working on state and national legislative agendas. We didn’t have any expectations in terms of how many states or credit unions would participate this first year, but we have 40 entries from eight states.” The California and Nevada Credit Union Leagues submitted 17 entries. “These videos are a great idea,” said Carol Payne, league vice president of communications and marketing, adding that “they tell the credit union story for us. We have shown a few of them to all staff here at the league and when one in particular was shown, there was not a dry eye in the group. Win or not, these videos have already made their mark on our staff and soon hopefully our members.” The Wisconsin Credit Union League submitted 12 entries documenting the impact REAL Solutions participating credit unions are having in their communities. The member stories reveal how credit unions work with their members to make their lives better, according to Wisconsin League CEO, Brett Thompson. NCUF will choose 15 videos, which will then be narrowed to five finalists by a video advisory committee. The five videos will be posted to the REAL Solutions Impact Center, where visitors to the site can pick their favorite. The winning entry will receive free trips to Washington, D.C., for the winning league, credit union and member. The winners will share the stage at an event held prior to the Wegner Awards dinner during the Credit Union National Association’s Governmental Affairs Conference, Feb. 21-25.

Michigan county adds CUs to investment options

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LANSING, Mich. (11/11/09)--The board of commissioners in Oakland County, Mich., has amended the county investment policy to allow county funds to be deposited into credit unions, according to the Michigan Credit Union League (MCUL). The commissioners approved the amendment unanimously on Oct. 29 (Michigan Monitor Nov. 9). The county treasurer already had the authority to deposit funds into banks accounts, but the policy's original language did not mention credit unions, said the league. Oakland County is one of three metro Detroit counties and the second most populous county in the state. MCUL had encouraged credit unions there to contact members of the county's finance committee about the proposal. Since Michigan law allows credit unions to accept public funds and public fund managers continuously seek ways to diversify their investments in a struggling economy, the efforts were met with a positive response from county board members, said the league. "Credit union leaders did great work reaching out to the Oakland County finance committee on this matter, and now that the county treasurer has the authority to deposit money into credit unions, the county can diversify its investments in a way that is beneficial to local communities," said MCUL President/CEO David Adams. He added that the deposits are good for the local economy and a safe federally insured investment.

Heartland VeriFone suits may impact CUs

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SAN JOSE, Calif. (11/10/09)--Heartland Payment Systems and VeriFone Holdings are in a legal spat over their merchant processing terminals, with merchants are caught in the middle. Any problems with transactions at the merchant level could seep into the payments transactions from the merchants to financial institutions, including credit unions. Both the Princeton, N.J.-based Heartland Payment Systems and San Jose, Calif.-based VeriFone have filed lawsuits against each other in recent weeks. VeriFone claims that a design for processing terminals in Heartland's new end-to-end encryption system infringes on one of its patents. In turn, Heartland's suit says VeriFone is using unfair trade practices to keep its business (ISO&Agent Weekly Nov. 5). The two companies have worked together for years. But in January, Heartland announced a large data breach that compromised millions of cardholders accounts. The breach and its continuing impact on Heartland's finances have prompted a drive toward tougher encryption of its payments processing system. As a result, Heartland decided to use its own end-to-end encryption platform. VeriFone said it told Heartland that it will terminate its "support relationships" affecting joint customers on Dec. 31. Roughly 75% of Heartland's customers in the retail, restaurant and petroleum markets rely on VeriFone systems, said VeriFone (Finextra.com Nov. 3). But on Nov. 3, VeriFone offered to provide "alternative support" for its Heartland merchant clients. To use the VeriFone support service in 2010, Heartland merchants must register by Dec. 15 with VeriFone. If the two companies can't solve their differences to ensure a smooth transition for merchants, problems could arise during transactions and in the payments system. Heartland last week reported a $13.6 million third-quarter loss, compared with net income of $13.4 million for the same quarter in 2008 (Reuters Nov. 3).

Washington announces states 75000th CU member

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FEDERAL WAY, Wash. (11/10/09)--A Seattle woman who became the 75,000 new credit union member in Washington state this year was awarded more than $2,300 in prizes when she joined Seattle Metropolitan CU. Kristin Henkus, who joined the credit union July 24 at its Northgate branch, was the honoree in conjunction with the Washington Credit Union League's 75th anniversary. Prizes included items representing more than 30 donating credit unions' original charter or location. For example, it included an antique telephone from a former telephone company employee credit union, a model train set from a former railway employee credit union, and bottles of Washington wine. One credit union gave a $100 gift certificate to a popular online shoe store because that it started in a shoebox. Henkus said that being a credit union member is a much more pleasant experience that being the customer of a big bank. Using the credit union "is really convenient because you can use everyone's ATMs; you don't get charged," she said. "It's a nicer community feeling." During a taped address on Nov. 3, league President/CEO John Annaloro said that the landmark 75,000th member could only have been achieved with the cooperation and good work of many credit unions. "Like many new credit union members this year, Kristin Henkus was dissatisfied with the new management of her bank," said Annaloro. "I'm sure this is only the beginning of a long relationship." Henkus, a small business owner, was pushed away from her bank after being charged hundreds of dollars in fees, said Seattle Metropolitan CU President/CEO Bob Harvey. "She, like many other Washingtonians, said 'enough is enough.'" he said, adding, "She decided she needed to make a move, and her move was to a credit union." Henkus was one of 15 new members to join Seattle Metropolitan on July 24. She was chosen randomly from among them, just as Seattle Metropolitan was randomly chosen from among the 30 participating credit unions. Washington credit unions, like those in other states, have experienced record new membership growth the past 12 months as Americans migrate to more stable financial institutions, the league said. As a result, some have increased earlier estimates of Washington credit unions' growth for 2009. New estimates range between 95,000 and 120,000 new members for the year. For more information, use the links to a YouTube video of Annaloro's taped message and footage of Henkus, and to prize information.

Southeast CUs prepared for Ida

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MADISON, Wis. (11/10/09)--As Atlantic hurricane season comes to a close Nov. 30, credit unions in the Southeastern U.S. prepared for Tropical Storm Ida, which was supposed to affect parts of the Gulf Coast early this morning. Ida was downgraded Monday to a tropical storm from a hurricane. Affected states include Florida, Alabama, Mississippi and Louisiana. The League of Southeastern Credit Unions sent communications in Alabama and Florida to its credit unions about the storm, Amy Jowers, vice president of communications, told News Now. Florida was experiencing a “lot of rain and wind.” Gov. Charlie Crist has issued an executive notice saying that financial institutions could close because of the storm, Jowers said. Gulf Winds CU, Pensacola, Fla., said it would close its branches and contact center at 3 p.m. ET Monday. The credit union also is prepared to be closed today. If the storm dissipates, the branches and contact center may re-open, the credit union said (NorthEscambia.com Nov. 9). The credit union plans to post updates on its website, gogulfwinds.com. It reminded members that even though the branches are closed, they can still use ATMs and conduct transactions through online and phone banking, the newspaper said. The Mississippi Credit Union Association has talked with several credit unions about preparations for Ida. Several credit union branches in the Mobile, Ala., area will close, because the storm will likely hit in the northern and northeastern quadrant of Mississippi near Alabama, Charles Elliott, association president/CEO, told News Now. “We’re not expecting a whole lot,” Elliott said. “Everyone has disaster plans in place, and some credit unions are planning to close their branches tomorrow morning. Some schools are closing--which may affect employees at credit unions.” The association is located about 170 miles north of the Gulf Coast in Jackson. As of press time, Elliott said the weather was okay. “There may be wind and rain later in the week,” he said. Communication is the most essential part of Louisiana credit unions’ disaster plans, according to Lacey Hyer, public relations specialist at the Louisiana Credit Union League. Hyer told News Now that the league has been in contact with credit unions about the storm and would continue to monitor the situation.

CU donates 10000 to Vermont clinics for uninsured

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SOUTH BURLINGTON, Vt. (11/10/09)--The Vermont State Employees CU (VSECU) recently donated $10,000 to the Vermont Coalition of Clinics for the Uninsured to give more Vermonters access to quality health care. As Vermont families struggle to make ends meet, health care often is neglected due to inadequate or no health insurance, so Vermont credit unions decided to do something to help, said the Association of Vermont Credit Unions (NewsLines Express Nov. 6). “The coalition of clinics is a vital resource in Vermont’s health care system by providing medical and dental services to over 5,000 Vermonters who cannot afford adequate health insurance,” said Judy Rosenstreich, member of VSECU’s board of directors and chair of its Charitable Contributions Committee. The coalition is an association of 10 free clinic programs and two dental programs, which provides free care and assistance to Vermonters without adequate medical and dental insurance. The clinics are located throughout the state and are supported by volunteers, community hospitals, local fund-raising and an annual grant from the state of Vermont. “In the first quarter of this fiscal year we have experienced a 34% increase in the number of patients we served over this same period three years ago,” said Lynn Raymond-Empey, the coalition’s executive director. “Unfortunately, our main funding sources have not increased since that time,” she added. “The donations of organizations like the VSECU, have allowed us to continue assisting uninsured/underinsured Vermonters with accessing health care when they are in need, and helping them enroll in the Green Mountain Care programs, become insured and find a permanent primary care home.” The announcement was made as President Barack Obama commended the U.S. House of Representatives for passing a sweeping health care reform bill late Saturday night and early Sunday morning. The bill now awaits consideration in the U.S. Senate.

Survey CUs offer SERPs to keep executive talent

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MADISON, Wis. (11/10/09)--Many credit unions assist senior executives in planning for the future by offering supplemental executive retirement plans (SERPs), according to the Credit Union National Association’s (CUNA) recently released 2010 Senior Executive Total Compensation Survey. About 30% to 50% of credit unions offer SERPs to top executives. The SERPs allow the executive and the credit union to make contributions, while these contributions--and earnings--remain untaxed until the funds are drawn on at retirement. Among credit unions with $100 million in assets or more, 51% of credit unions offer SERPs to the executive vice president, nearly 40% offer them to chief financial officers and chief operation officers, and almost 30% offer them to chief information officers. The likelihood of providing SERPs increases with credit union asset size. “Due in part to dramatic declines in U.S. retirement funds, Social Security benefits and qualified retirement plans fall significantly short of meeting the retirement income needs of highly compensated executives,” said Beth Soltis, senior research analyst for CUNA. “This increases the importance of offering SERPs to credit union senior executives. SERPs cannot only bridge the gap between current retirement funds and executive income needs, but also can be the difference between retaining highly qualified executives and losing them to another organization,” Soltis added. The survey provides nationwide compensation data for the top four credit union senior executive positions--executive vice president, chief financial officer, chief operation officer, and chief information officer--for credit unions $100 million plus in assets. Results are categorized by asset size, region, and other points of comparison to help a credit union attract or retain top executive talent. The report--available in print or PDF format--also provides the monetary value of the total compensation package to help measure the bottom-line value of senior executive compensation packages compared with other credit unions. For more information, use the link.

Texas CU entities establish Fort Hood tragedy fund

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KILLEEN, Texas (11/10/09)--Texas Partners FCU of Killeen, Texas, as well as the Texas Credit Union League, Credit Union Resources, Inc. and the Texas Credit Union Foundation, have established an account for donations to support the needs of affected personnel at the Fort Hood, Texas, military base and the community after last week’s tragedy. On Thursday, 13 military personnel were killed and 30 other individuals were wounded on the post when Maj. Nidal Malik Hassan, an army psychiatrist, upset about being deployed to Iraq, opened fire Thursday on a crowd of soldiers at the base (USA Today Nov. 6). The league, and its resources and foundation will open the “Fort Hood Support” account with a $2,000 donation (LoneStar Leaguer) Nov. 6. Credit unions and members wishing to donate can send their donations to: Texas Partners Federal CU

Attn: Fort Hood Support

1011 Wales Drive

Killeen, TX 76549

Childrens Miracle Network ad in IUSA TodayI

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MADISON, Wis. (11/10/09)--An ad for The Children’s Miracle Network Classic Professional Golf Association tour event, Nov. 12-15, appeared in the Money section of Monday’s USA Today. It includes the Credit Unions for Kids logo in the sponsorship portion in the bottom of the ad. Credit Unions for Kids contributed more than $9.3 million to children’s hospitals in 2008, making it the third-largest fundraising sponsor for the charity. Children’s Miracle Network is a nonprofit organization that raises funds for more than 170 children’s hospitals. To see the ad, view the ad link.

Bank in dropped CU merger withdraws fed app

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AUGUSTA, Maine (11/10/09)--Kennebec Savings Bank, which was unsuccessful in a merger attempt earlier this year with Augusta-Maine based Kennebec Valley FCU (KV FCU), has dropped its bid for a federal charter, according to local news reports. The state-chartered bank, also based in Augusta, said it withdrew its application with the Office of Thrift Supervision (OTS), according to the office's website (Kennebec Journal Nov. 9). One reason the bank had applied for a federal charter. KV FCU was trying to get a charter as a federal savings bank and a merger would have been easier if both institutions had the same type of charter. However, the bank's CEO noted that the reason it withdrew its federal charter application was not because of the merger's failure but because of the uncertainty involving OTS's future in the government overhaul of the U.S. banking system. The merger "was the reason why we didn't withdraw it [the application] sooner," CEO Mark Johnston told the Kennebec Journal and Morning Sentinel, adding the bank had to wait until the credit union's membership vote occurred. The credit union members' vote concluded on Sept. 21 after a public debate in the local newspapers about the benefits and drawbacks of merging the credit union into the bank (News Now Oct. 2).

CU System briefs (11/09/2009)

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* LANCASTER, Pa. (11/10/09)--Two Lancaster County, Pa.-based credit unions announced Friday they will merge by Dec. 31 (Lancaster New Era/Intelligencer Journal Nov. 7 and Life is a Highway Nov. 9). The 800 members of $3.1 million asset Millersville (Pa.) FCU voted overwhelmingly to merge with Lancaster-based LANCO FCU, which has $50.5 million in assets. The Millersville office will remain open and operate as a LANCO branch, and Millersville's three employees have been offered jobs with LANCO. Local newspapers said the smaller credit union had struggled with losses for six quarters and was too small to grow. Barry Ashenfelder, LANCO FCU president/CEO, told the publications the merger will bring Millersville members products and services such as certificates of deposit, money market savings accounts, individual retirement accounts, business loans, business checking accounts, 24-hour telephone banking and three ATMs … * DUBUQUE, Iowa (11/10/09)--A 13-year-old who found a pellet gun picked the wrong place to stop and examine it--outside the Cedar Rapids branch of Dubuque, Iowa-based Dupaco Community CU. Someone thought Darian Gossett was going to rob the credit union and called police. Officers stopped Gossett a few blocks away and determined the teen had never entered the credit union and did not use the pellet gun to threaten anyone. One officer called the 12:50 p.m. Friday incident a "brain fade." Gossett will face a misdemeanor charge for carrying the pellet gun and having tobacco in his possession. He was released to his mother's custody. Cedar Rapids in May passed an ordinance making it illegal to carry a loaded pellet gun, air gun or BB gun in public (Cedar Rapids Gazette Nov. 7) … * MISSOULA, Mont (11/10/09)--Peter M. Thompson, 24, of Missoula, Mont., was sentenced Friday in a federal court to more than 11 years in a federal prison for robbing the Missoula FCU Jan. 12. Peter M. Thompson pleaded guilty in July to robbery and possessing a firearm during a crime of violence. Court records indicated he entered the credit union with a rifle, fired a shot and told everyone to get down. As he fled with $11,000, he bid those in the credit union a nice day. A deputy pursued him and Thompson's truck left the road. Thompson allegedly fired a shot, and the deputy returned fire, shooting Thompson in the face (Associated Press Newswires and Great Falls Tribune Nov. 6) …

Education CU Council new tradition Fin lit awards

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SPANISH FORT, Ala. (11/10/09)--The Education Credit Union Council (ECUC) will announce two awards at its 37th annual conference in February that will highlight credit unions’ dedication to the financial well-being of their members. The awards are: the Lifetime Achiever Award, which recognizes a credit union that has a long-term strategy of incorporating financial education into its brand, marketing, internal employee training and credit union sponsored events; and the Foolproof Partnership Award, which recognizes an ECUC credit union that is partnered with Foolproof to provide youth with financial education through a school or community group. “These awards will give credit unions the chance to be recognized by other credit unions who believe in the real mission of any credit union--helping their member-owners,” said Lorraine Zerfas, ECUC executive director. Foolproof is a financial literacy tool for consumers of all ages that is affiliated with the Colorado and Wyoming Credit Union Associations. The awards will be announced during the conference Feb. 13-16 in Orlando, Fla. ECUC provides education and networking opportunities to credit unions who serve educational communities.

Connecticut CUs host fin lit fair at Capitol

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MERIDEN, Conn. (11/10/09)--Thirty-six Connecticut credit unions provided 70 staff and board members who volunteered at a Financial Reality Fair Nov. 4 for seven high schools at the Connecticut State Capitol in Hartford. “The Connecticut Financial Reality Fair provides students with an opportunity to understand what it takes financially to live on their own,” said Barbara Bass, Credit Union League of Connecticut vice president of education and human resources development.
Thirty-six Connecticut credit unions recently participated in the Connecticut Financial Reality Fair at the state Capitol in Hartford. Pictured is a volunteer who worked with students at the fair to teach them about money management. (Photo provided by the Credit Union League of Connecticut)
“Schools are encouraged to have students study budgeting, investing, and credit in advance of the fair where it is the student’s job to live within a specific salary while paying bills for the month,” she said. “They are successful when they are able to make cost-effective living choices, pay bills and have funds left over to deposit into savings,” she added. Students, teachers, political representatives and state officials attended the event. Connecticut credit unions have hosted financial reality events as a part of their commitment to address youth financial literacy. Studies indicate that young adults leave school burdened with heavy credit card and student loan debt, yet often are ill-equipped to deal with the realities of budgeting and successful money management, the league said.

Agreement means CUs may recoup mortgage loan losses

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MILWAUKEE, Wis. (11/9/09)--Credit unions that had losses from the sudden closure of Wisconsin-based Central States Mortgage and Milwaukee-based CU Fleet auto dealership have made an agreement that gives them control of as much as $82 million combined funds in the receiverships. According to the Business Journal of Milwaukee (Nov. 6), 24 credit unions will get control of $71.5 million in loans and lender-owned homes in the receivership of Central States Mortgage. The Wauwatosa, Wis., mortgage banker--70% owned by credit unions--closed in March. It provided mortgages to about 250 credit unions in the Midwest. The receiver for CU Fleet, a West Allis, Wis.,-based auto leasing company serving primarily credit union members, also indicated credit unions may recover loans and vehicles totaling roughly $10.5 million. The newspaper said the cases have reached the point where creditors believe their losses will be more manageable than originally feared. Prime Financial CU, Cudahy, Wis., one of the mortgage company's biggest supporters, was taken over in February by the state Office of Credit Unions. The article said the settlement would provide relief to that credit union and quoted interim CEO Chris Dawe saying the settlement allows the credit union to take an important step forward in the effort to strengthen and rebuilt its business. Steve Wesson, CEO of Guardian CU, West Milwaukee, told the Business Journal it hopes to recover some of its losses when the real estate market bounds. The credit unions created a limited liability company to administer the mortgage loans and properties. They hope to liquidate the assets to recover some of their losses, with 15% of proceeds going to the receivership estate, said the article. Credit unions filed claims against the mortgage company totaling nearly $121 million. Court appointed received Michael Polsky will continue to review the claims of three major secured creditors: Members United Corporat FCU, Warrenville, Ill., which claimed $33 million; Amcore Bank, Rockford, Ill., claiming $2.6 million; and Associated Bank, Green Bay, claiming $2 million. CU Fleet's inventory of 1,600 leased vehicles has been reduced through sales by more than 800 vehicles and leases. The remaining 750 vehicles are up for sale. The largest creditor against CU Fleet was Landmark CU, New Berlin, claiming $2.1 million in secured debt; Guardian CU with $2.4 million, and Prime Financial, with $700,593.

INewsweekI IGood Morning AmericaI focus on CUs service

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NEW YORK (11/9/09)--Newsweek and Good Morning America recently carried stories highlighting credit unions’ services to their members. On Friday, Good Morning America noted that credit unions are a good option for college students looking for financing. “The bottom line is when going to get an account at college, the best place where you can possibly go is your student credit union,” said financial reporter Mellody Hobson. “People often think banks, but credit unions are actually terrific. They report they save $8 billion in fees for their members because they allow for very low account balances, they don’t charge those pesky ATM fees and they actually give good rates on loans.” Credit unions also offer lower interest rates on credit cards than banks, according to a Thursday Newsweek article. The article, “Credit Card Company or Loan Shark?” cited a Pew Research Center study, which indicated that credit unions offer interest rates 20% below bank-issued cards’ rates. “Credit unions have not been under the same pressure to grow,” Nick Bourke, manager of the Pew Safe Credit Cards Project, told the magazine. “Growing big and quickly is what has left banks [free] to charge such high penalties.” A recent Pew Research Center report found that in the past four months, credit card companies have added new fees, changed account terms, and increased interest rates on credit card accounts--some by 30%. The industry says that the changes are necessary given the tough economy, the study indicated. The Pew study also garnered coverage in The Wall Street Journal and several regional broadcast news outlets.

Wisconsin CUs CD an option to states college savings plan

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PEWAUKEE, Wis. (11/9/09)--Wisconsin credit unions are the first in the nation to offer certificate of deposit (CD) portfolios that could lead to up to $3,000 in state tax deductions per child per year for individual contributors, regardless of income. “To credit unions, this means they’re again being recognized by the state as a valuable asset to Wisconsin citizens,” said Wisconsin Credit Union League President/CEO Brett Thompson. “To consumers, it means they can now indirectly access the most competitive rates offered by Wisconsin credit unions statewide to enhance a long-term investment portfolio.” To claim the state tax deductions, individuals must contribute to an account by Dec. 31. Individuals can contribute to family member’s accounts--such as a grandchild, niece or nephew--or to their own account, the league said. Instead of purchasing the CD directly from credit unions, consumers contributing to an EdVest account would direct the state Treasury to use credit unions for a portion of their invested funds.

Tax credit extension boosts CUs sales in Vermont

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BARRE, Vt. (11/9/09)--An $8,000 federal tax credit to help buyers on the purchase of their first home has been extended until April, and lenders in Vermont, including a credit union, said the tax credit is helping them make more loans. A bill passed Thursday in the House extends the tax credit, which was scheduled to expire Nov. 30. Vermont State Employees CU, Montpelier, Vt., said it is handling about a half-dozen transactions that may not have taken place without the tax credit (Times-Argus Nov. 6). “It’s created an opportunity for some first-time homebuyers to come in with some cash and know they’ll have cash at the end of the year to offset the 20% down that they have to come up with,” Chuck Karparis of the credit union told the newspaper. More than 2,000 homebuyers in Vermont have taken advantage of the tax credit as of mid-September, according to the Internal Revenue Service. The bill passed Thursday also provides up to $6,500 for existing homeowners if they have lived in their homes for five consecutive years. Vermont State Employees CU has $427 million in assets.

Virginia CUs honored for social responsibility

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LYNCHBURG, Va. (11/9/09)--The Virginia Credit Union League reported a record of 24 awards in this year’s social responsibility contests, which recognize credit unions’ commitment to their community, the “people helping people” credit union philosophy, and youth financial education. Credit unions were honored with Desjardins Youth Financial Education Awards, Dora Maxwell Social Responsibility Awards, and the Louise Herring Award for Philosophy in Action. First place winners in each asset category advance to national competition, sponsored by the Credit Union National Association. All award winners also will be recognized at the league’s annual meeting in May. First place Desjardins winners in their asset size categories include:
* DuPont Community CU, Waynesboro, Va., greater than $250 million in assets; * Synergy One FCU, Manassas, $75 million to $250 million; * Virginia Educators’ CU, Newport News, $35 million to $75 million; * Loudoun (Va.) CU, less than $35 million; and * Beach Municipal FCU, Virginia Beach, cooperative category.
First place Dora Maxwell award winners include:
* Chartway FCU, Virginia Beach, $500 million or more; * University of Virginia Community CU, Charlottesville, $200 million to $500 million; * Arlington (Va.) Community FCU, $100 million to $200 million; and * Northern Piedmont FCU, Culpeper, $20 million to $50 million.
First place Louise Herring award winners include:
* Langley (Va.) FCU, more than $250 million; and * Northern Piedmont FCU, Culpeper, $20 million to $50 million.

Four defendants removed from investments lawsuit

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MIAMI and BOCA RATON, Fla. (11/9/09)--An amended complaint in a class action lawsuit filed against a Florida credit union over fraudulent investment losses perpetrated by a now-defunct broker dealer has removed from the case four individuals originally cited as defendants. The amended complaint was filed Oct. 27 in the U.S. District for the Southern District of Florida and replaces one that had named Boca Raton-based IBM Southeast Employees FCU and four people among the defendants. Those who are no longer defendants are Lary B. McCants, the credit union's president/CEO, and three financial services representatives of the now-defunct broker, Wellstone--Christi Seay, Jay Jones and Barbara Leschander. Seay told News Now that the representatives were removed from the lawsuit because it was determined they were not employees of the credit union. The suit alleges the credit union referred clients to Wellstone, a broker dealer created by Cornerstone Ministries, without adequate due diligence. Wellstone and Cornerstone are both defunct, according to the court documents filed. McCants confirmed to News Now that the amended class action complaint was filed.

Carolinas foundation elects officers board

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GREENSBORO, N.C. (11/9/09)--Judy Tharp, president/CEO of Piedmont Advantage CU, Winston-Salem, N.C., has been elected to the Carolinas Credit Union Foundation (CCUF) board, which also elected its officers. Tharp, with 30 years of credit union experience in management roles, will serve a three-year term. In 2008, she replaced Steve Harkins, president/CEO of Greenville, S.C.-based SC Telco FCU on the CCUF board and served out the remaining year on his term (North Carolina Credit Union League's Weekly Update Nov. 6). Also, Brenda Hooks of Raleigh-based Coastal FCU ends a 12-year run on the foundation board. New officers for the CCUF board are:
* Chairman--John Carlson, Sharonview FCU, Fort Mill, S.C.; * Vice chairman--Tharp; and * Secretary-treasurer--Beverly Gagne, SAFE FCU, Sumpter, S.C.

CU System briefs (11/06/2009)

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* LANSING and PLYMOUTH, Mich. (11/9/09)--Two Michigan credit unions--Detroit Edison CU based in Plymouth and NuUnion CU based in Lansing--announced Thursday their intent to merge, pending approval from state and national regulators and from NuUnion's members. The credit unions said both are strong and stable. A merger would provide members with improved convenience and best-in-class products and services and provide the credit unions with increased operational efficiencies and greater financial strength and resources. The proposed combined credit union would be named Lake Trust CU, which represents the organization's combined memberships stretching from Lake Michigan to Lake Huron and Lake Erie. Both nine-member boards of directors would combine to form an 18-member board. NuUnion CEO Stephan L. Winninger would be CEO of the new credit union and Detroit Edison Credit Union CEO William J. Thiess would be president. Detroit Edison has $681 million assets and NuUnion has $839 million assets. In 2007, Detroit Edison purchased and assumed the ailing Huron River Area CU, now operating as Huron River Financial, a division of Detroit Edison CU … * DULUTH, Ga. (11/9/09)--Mid-September's disastrous flooding left several Georgia families without the basic necessities. Many
Click to view larger image Click for larger view
families throughout the state lost their homes and were still in need of shelter, food and clothing when Oct. 15--International Credit Union Day--rolled around, according to Georgia Credit Union Affiliates (GCUA). Staff at GCUA organized an ICU Day food drive to help demonstrate the People Helping People philosophy. The items were donated to The Center for Family Resource in Cobb County, Ga., one of the areas hit hardest in metro Atlanta. "It was an ideal way to celebrate credit unions through the spirit of giving," said Anita Paul, director of communications. From left are GCUA staff Maryanne Schlegelmilch, Marie Bedgood, Vonda White and Kodisha Taylor. (Photo provided by Georgia Credit Union Affiliates) … * GREENSBORO, N.C. (11/9/09)--Bob Donley, executive vice president of Winston-Salem, N. C.-based Members CU, has been appointed to the North Carolina Credit Union Commission by Gov. Beverly Perdue, according to the North Carolina Credit Union League (Weekly Update Nov. 6). Donley will serve on the seven-person commission for a four-year term. "The commission is charged with monitoring the health of credit unions in North Carolina," said Donley. "There are three members who represent credit unions--who have been employed as a manager or director in a state-chartered credit union--and four members who represent the borrowing public and are not employed by any financial institution," he said. Donley took oath Oct. 15. His term ends July 15, 2013 …

105 indicted for Florida mortgage fraud

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TAMPA, Fla. (11/6/09)--Roughly 105 individuals have been charged with fraudulently procuring more than $400 million in loans on more than 700 properties in Florida as a result of a nine-month Mortgage Fraud Surge investigation, announced the U.S. Attorney's Office for Middle Florida. Those being charged with fraud for property and/or housing, or fraud for profit include lenders, real estate brokers, multiple borrowers, realtors, sellers, financial institution branch managers, financial institution employees, contractors, mortgage brokers and loan originators, the office said in a press release issued Wednesday.. Of the 105 defendants, 32 arrests were in Ft. Meyers, 30 in Tampa, 19 in Orlando and 24 in Jacksonville. The cases involve both mortgage schemes designed to defraud mortgage lenders and foreclosure-rescue schemes that prey on homeowners distressed by the economy. Some credit unions are believed to be among the victims. There currently are already 500 defendants in federal mortgage fraud cases around the nation. The newest investigation was conducted by the U.S. Attorney's Office and the Federal Bureau of Investigation (FBI) Tampa and Jacksonville divisions and spanned 15 different agencies, including the Florida Office of Financial Regulation. The announcement said it is the first phase of a continuing effort to investigate and prosecute not only mortgage fraud professionals and other individuals engaged in multiple fraudulent mortgage transactions, but also larger organizations and even financial institutions.

Calif. CUs card terms havent changed in years media told

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BAKERSFIELD, Calif. (11/6/09)--Many banks and credit card issuers are hiking their fees and rates to beat the clock before all provisions of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 take effect. An article about that trend points out that one California credit union hasn't changed the terms of its credit card rates in years. The proposed acceleration of the act's implementation date from Feb. 22 to Dec. 1 has prompted a hike in complaints and inquiries about credit card companies increasing their rates, says the California Attorney General's office (Bakersfield Californian Nov. 4). The acceleration was absolutely necessary, Donna Severs, CEO of Bakersfield (Calif.) City Employees FCU, told the newspaper. Some lenders, including predatory lenders, "were rushing to circumvent the intent of the law by putting in place exactly the kinds of changes that the law would make illegal," Severs said. She noted that the credit union hasn't changed the terms on its Visa cards in years. Kern Central CU CEO Carl Trejo told the newspaper Kern Central increased rates on some cards in October but the timing wasn't related to the new law or delinquencies. Trejo said the credit union performs quarterly surveys and it found it was below market. The article noted that Chase Bank has recently converted some of its fixed-rate cards to adjustable rates. Wells Fargo notified cardholders in October that most would see interest rates climb up to 3% beginning Nov. 30. Bank of America wouldn't boost its rates again before February unless the borrower misses two or more payments in 12 months. Analysts said that consumers will see more initially low promotional offers that increase their interest rates significantly after several months and that consumers will need to stay on top of when the promotional rates end because some banks charge interest retroactively if the balance isn't paid off by the expiration date.

Piedmont Advantage CU has a hit with 6.9 credit card

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WINSTON-SALEM, N.C. (11/6/09)--Piedmont Advantage CU is offering a credit card with a 6.9% fixed rate and without annual fees. The credit union has opened nearly 700 Visa accounts and approved $3 million in balance-transfer requests. Most credit union members who are transferring balances are trying to find a financial partner to understand their circumstances and help them, the credit union said. “One member is dealing with cancer and had to charge some surgeries on her credit card accounts,” said Judy Tharp, Piedmont Advantage president/CEO. “Not only was she having to deal with being sick, she had to worry about making ends meet with a 15% variable card.” Most people who transfer their balances to Piedmont have good credit histories, but have seen their interest rates skyrocket as their card providers try to turn a profit during the recession, Piedmont said. “Our members have shown a lot of enthusiasm for this new product,” Tharp said. “It’s very simple to understand--no tricks, no gimmicks, no gotcha fees.” Piedmont said it researched other cards and could not find a lower rate. The average annual percentage rate on a credit card is around 9.5%, according to Bankrate. “Many lower-interest cards are hard to get now since credit is so tight,” Tharp said. “And others come with fees that don’t make them a very good deal.” Piedmont Advantage CU has $238 million in assets.

California DFI shuffles CU division staff

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SACRAMENTO, Calif. (11/6/09)--The California Department of Financial Institutions (DFI) announced management changes in its Credit Union Division. The changes may affect a credit union’s point of contact for administrative applications--such as field of membership expansions, bylaw amendments, merger applications, statutory approvals and regulation variances, said the DFI. The changes also may affect examination scheduling, and other relevant dialogue regarding a credit union’s strategic business plans and general financial condition, DFI said. Also, two new regional portfolio management positions were established to provide better coverage for the increasing workloads of regulatory matters relating to state-chartered credit unions, DFI added. In Northern California, Lara Leung will be joining Lana Tom, out of San Francisco, as the two portfolio managers for that area. In Southern California, Les Thompson will be joining Joni Kimbrell, as the two portfolio managers for that area. For more information, use the link.

CUs op-ed Teach young adults to manage credit

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ROCK HILL, S.C. (11/6/09)--Teaching young adults how to prudently manage their credit before they go into the real world is vital in today’s economy, according to an opinion piece by a local credit union staffer in a South Carolina newspaper. “With the economy being at such a low point, young adults need to learn how to build and maintain good credit,” wrote Jennifer Panther, a certified financial counselor for the $231.7 million-asset Family Trust FCU in Rock Hill, S.C., in a Thursday op-ed article in The Herald. “Before helping your children establish credit, teach them about credit,” she continued. “Explain to them the concept of credit, the responsibilities that come with using credit, and the reason credit is out there. Start by showing them one of your credit card statements. Show them how to read it, how interest accrues, and how late fees and over-limit fees can apply. “Stress to them that every swipe of their card will count and appear on the statement,” she added. To read the article, use the link.

Pa. large-CU CEO forum addresses challenges

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HARRISBURG, Pa. (11/6/09)--Attendees at the Pennsylvania Credit Union Association’s (PCUA) Large Credit Union CEO Forum in Hershey, Pa., Wednesday discussed the challenges the credit union movement is facing. Rep. Jim Gerlach (R-Pa.), who is a member of the House Financial Services Committee, updated attendees on pending legislation regarding a proposed Consumer Financial Protection Agency, credit card reform and systemic risk (Life is a Highway Nov. 5). Stan Hollen, CEO of CO-OP Financial Services, provided an overview of the payment systems marketplace and future innovations using CO-OP’s Next Generation Network, fast branch kiosks and mobile services. Hollen commended credit unions for their iBelong campaign to attract membership. “You’re doing it right with the focus on membership,” Hollen said. “If membership is growing, everything else is okay.” Other speakers included Dr. Terry Madonna, political professor and pollster, who spoke about elections in the state for the U.S. Senate and governor; and State Treasurer Rob McCord, who restated the State Treasury’s commitment to PCUA’s Credit Union Better Choice program. Credit Union Better Choice is a payday lending alternative program. McCord said he is “honored to be a credit union friend” and that “credit unions are fulfilling consumers’ flight to quality and need for trust.” The forum was scheduled to finish Thursday with a speech by CUNA Mutual Group President/CEO Jeff Post about why the credit union system is needed now more than ever.

Biz-lending collections topic of CUNA Council paper

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MADISON, Wis. (11/6/09)--A rare confluence of events is occurring in the American economic landscape that offers credit unions once-in-a-lifetime business lending opportunities, according to the CUNA Lending Council. Banks and other lenders are restricting credit to established business owners and the growing pool of new entrepreneurs laid off from corporate and other jobs during the recession. Evidence indicates that credit restriction will continue. The CUNA Lending Council recently released a white paper, “Business Lending Collections,” which offers insight into the specialized field of collections. The paper contains interviews with credit union lenders about the state of business lending and collections in the industry. Also included is information on third-party collections, negotiating with business owner members, recognizing red flags, creativity in collections and telephone call tips. Several credit unions view the current environment as an opportunity to lend to small business owner members. They are ramping up their business lending portfolios and fine-tuning their business lending collections departments. Business collections--like business lending--succeed or fail depending on the quality of the relationship developed and nurtured. “The key to effective business-lending collections is relationships--how you treat people,” notes Bill Klewin, associate general counsel, CUNA Mutual Group, Madison, Wis. “You have to find people who work well with others, who have exemplary people skills.” An August Federal Reserve survey in reported that 55% of banks said their lending standards for business loans would remain tougher than long-term average levels until the second half of 2010. In the same survey, one in four banks said they decreased the limits for business credit cards over the past three years. Most bankers said their standards for credit card loans to their best customers would remain tighter than normal into 2011 and beyond.

CU System briefs (11/05/2009)

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* NEWARK, Del. (11/6/09)--Newark Delaware City Employees FCU (NDCEFCU) has merged into Louviers FCU, announced Louviers President/CEO James E. Everhart Jr. (Together Nov. 4). The merger will allow NDCEFCU members to take advantage of several branch locations and additional products and services such as mortgages, internet banking and bill payment, student loans, checking accounts, credit and debit cards, and small business financial services. "It's a positive move for Louviers as we reach out to serve more members of the greater Newark, Delaware and Cecil County, Md., areas," he said … * SAN DIEGO, Calif. (11/6/09)--John Tippets has been hired as the new president/CEO of North Island CU based in San Diego, the credit union announced. He started Thursday, and replaces Michael Maslak who retired in January. Tippets is former CEO of the American Airlines FCU, Dallas, which has $5.4 billion in assets and is the ninth largest credit union in the nation. He retired in June 2008 after 42 years in the airline industry, the last 17 as the credit union's CEO. "North Island Financial CU has long been recognized for its strength and innovation in providing high quality financial services to consumers and businesses in San Diego," said California and Nevada Credit Union Leagues President/CEO Bill Cheney. He noted that Tippets " is a highly regarded national credit union leader who will continue that tradition" and is a "welcome addition to the California credit union community" … * VENTURA, Calif. (11/6/09)--Joseph Schroeder, a long-time leader in the California credit union movement, is the new president/CEO of Ventura (Calif.) County CU (VCCU). He will replace Carol A. Harris, who recently retired after 22 years at VCCU. Schroeder has more than two decades of senior-level credit union management experience as president/CEO at three of southern California’s largest credit unions, and as a vice president over both operational and marketing departments. VCCU has $483 million in assets ... * TACOMA, Wash. (11/6/09)--Tacoma, Wash., Mayor Bill Baarsma declared Oct. 27 as “TAPCO CU Day.” The credit union celebrated its 75th anniversary that day, thanking its board, employees and members for helping the credit union through the nation’s economic crisis. TAPCO has $243.9 million in assets. From left are: Denis Timmerman, supervisory committee chair; board members Jeanne Werner-Spaulding, Richard Williams, Pat McElligott (in front), and Rob Masko; David Smith, credit union service organization board member; John Bechtholt, CEO; Mike Weinman, consultant; and Mike Fitzgerald, supervisory committee member. (Photo provided by TAPCO CU) ... * YUBA CITY, Calif. (11/6/09)--Sierra Central CU evacuated its staff and members at about 9:15 a.m. Thursday because of a strange odor that caused individuals to have eye irritation (TheUnion.com Nov. 5). Firefighters were searching the building to find the source of the odor. Credit union Manager Tamara Salas told The Union that some thought the smell was chemical or like burnt wiring. The credit union’s employees were checked out by an emergency medical technician to make sure they were okay. Sierra Central CU, Yuba City, Calif., has $651 million in assets ...

Springfield chapter prepares for the flu season

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SPRINGFIELD, Mo. (11/06/09)--The Springfield (Mo.) Chapter of Credit Unions met Oct. 30 for its fall breakfast to discuss the fears of H1N1 and a severe pandemic flu season, which are dominating news coverage in Missouri.
Brent Davis (standing) of Postal Federal Community CU shares his flu season disaster-recovery plan with members of the Springfield (Mo.) Chapter of Credit Unions. (Photo provided by the Missouri Credit Union Association)
Brent Davis, internal audit officer at Postal Federal Community CU, Springfield, shared the credit union's pandemic flu disaster recovery plan with the group, according to the Missouri Credit Union Association (MCUA) (The Missouri difference Nov. 4). Davis advised attendees to be informed, take preventative measures, communicate with staff, and expect increased staff absenteeism. "This is a level-headed and measured approach that will remove confusion and fear to allow your credit union to continue providing great member service. Now, go wash your hands," he said. MCUA encouraged its member credit unions to implement these precautions to help stop the flu from spreading:
* Provide hand sanitizers in the office, especially on the front lines where tellers interact frequently with the public; * Encourage ill employees to stay home if they have flu-like symptoms; * Offer reimbursements to employees who get the flu vaccine; and * Send employees information on how to prevent the flu. MCUA provided a sample brochure.

Wright-Patt offers private student loans

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FAIRBORN, Ohio (11/5/09)--Wright-Patt CU has stepped up to assist consumers who are forced to rely on private student loans during the exodus of many traditional lenders from the student-lending market. According to Linda Stephens, vice president of consumer lending at the Fairborn, Ohio-based credit union, while the government has ensured the continued availability of federal loans, consumers forced to rely on private student loans will feel the biggest pinch. "The cost of college education has risen dramatically over the last 15 years. This has led to an ever-increasing gap between what scholarships and federal loans cover and the actual cost of attendance," Stephens said. Wright-Patt in May teamed with Credit Union Student Choice to provide a private education line of credit, which features zero origination fees, lower interest rates, in-school deferred payment, co-signer release and a graduated repayment option. The product is structured as a line of credit, so students can make multiple draws over the course of their entire college career after completing just one loan application, Stephens said. "Most important, we control the pricing and retain the ongoing relationship with our member," she said. Many lenders take advantage of consumers' lack of knowledge about education financing options, she said. Wright-Patt has built a website with information and calculators to help consumers.

Safeguard vs. fraud in new economy CUs warned

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SAN DIEGO (11/5/09)--The downsides to a struggling economy continue to challenge credit unions working to maintain strong bottom lines while serving their members. But some of those challenges can be greatly minimized through diligent oversight and safeguarding against fraud, says Mark McDuffie, risk manager at CUNA Mutual Group. McDuffie delivered that message Tuesday to attendees at the 15th Annual CUNA Lending Council Conference, where his overriding theme was how to protect credit unions from fraud in a tough economy. Joining McDuffie in the presentation was Joanne Robinson, vice president of lending at Smart Financial CU in Houston. Mortgage fraud, loan fraud through employee dishonesty, and indirect lending fraud are the most common frauds, McDuffie said, adding, “Desperate financial times are ripe for new fraud schemes. It’s critically important to be aware of these schemes and do what’s necessary to prevent them from happening at your credit union.” McDuffie cited bond loss figures reported by CUMIS Insurance Society showing an increase in claims and dollar amounts between 2004 and 2008. Although the highest percentage of claims was due to fraudulent deposits at 48%, they accounted for just 19% of money paid out. Similarly, only 10% of claims were due to employee dishonesty, but they accounted for the greatest percentage--36%--of the monetary bond loss. “Employee fraud, which is typically loan fraud, is becoming more common as others lose their jobs,” McDuffie said. In households where one member loses a job, the employees "almost immediately go into delinquency on their debt. In desperate times, people resort to desperate measures. And if they’re working in a credit union and they know how their particular systems work, they look for ways to scam the system for financial gain.” McDuffie told the true story of a loan officer who did a share-secured loan against a number of large accounts held by two elderly credit union members. To accomplish this without immediately calling attention to the transaction, the loan officer used another employee’s password--which was also fraudulently obtained--to disperse the funds. The officer then used her own family members’ accounts to launder the money, which totaled more than $80,000. The officer and scam were identified when one of the elderly members saw the fraudulent loan on her monthly statement and notified the credit union. “This is a small one, just the tip of the iceberg,” said McDuffie. “There are much more and much larger loan frauds being committed by employees, but many can be prevented or more quickly identified when they occur.” McDuffie urged credit unions to have sufficient controls in place that increase the risk of being detected and, ultimately, discourage employees from taking the risk. Mortgage fraud also is increasing as a result of current economic conditions and as more homeowners find themselves over-mortgaged and unemployed," said McDuffie. One common mortgage scam occurs when fraudsters contact homeowners facing foreclosure and identify themselves as "foreclosure specialists" promising the credit-exhausted homeowner to pay off their mortgage and, in some cases, other outstanding bills. The homeowner signs over the property deed to the fraudster, who then obtains a fraudulent release of the lien, sells the property to someone else and absconds with the money. Frequently the homeowners are told they can continue living in their home by renting it from the fraudster. The rent is added to the proceeds of the illegal sale. “This is another example of things that happen out of desperation,” McDuffie said. “Mortgage fraudsters work fast enough that multiple transactions are occurring simultaneously, making it easier for them to defraud the lending institution.” As fraudsters become more sophisticated, credit unions need to be more vigilant in their prevention and detection procedures, said McDuffie, to avoid becoming the next victim.

CU cards addressed in IWall St. JournalI broadcasts

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MADISON, Wis. (11/5/09)--The Wall Street Journal and several other news outlets recently noted credit union credit cards as an alternative to traditional credit cards offered by large banks that may carry high interest rates or fees. The Wall Street Journal noted a Pew Safe Cards Project, part of the Pew Charitable Trusts, which compared credit cards of 12 large banks and 12 large credit unions. Pew found that credit unions’ rates were lower than banks, and credit unions charged about half of what banks charged in fees (Nov. 4). The newspaper also featured statistics from the Credit Union National Association, which indicate that about half of credit unions offer credit cards. KY3 News in Springfield, Mo., also highlighted credit union credit cards in a recent story. Credit unions offer credit cards with low interest rates and annual fees--and that will likely not change anytime soon, the news outlet said. Susie Kasterke, CU Community CU, Springfield, told KY3 News that the credit union offers credit cards with an introductory 6.9% interest rate and a permanent rate of 9.9%, which is below the industry average. “We’re not trying to make big profit for stockholders,” she said. “We’re here for members.” A Georgia TV broadcast outlet, WRDW, also ran a story credit union credit cards. The news outlet cited the Pew study, and included comments from Phyllis Cochran, president of Augusta (Ga.) VAH FCU, who said that credit unions have benefited from the high fees that other institutions charge on credit cards. About 10% of the population switched to credit unions from banks over the past two years, she said.

Single mom is 10000 financial makeover winner

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BATON ROUGE, La. (11/5/09)--Earlier this year, Kristi Smith, a single mother of two from Walker, La., was drowning in debt with little savings because of a divorce and undisciplined spending. She took a chance at a fresh start by entering a local financial makeover competition sponsored by E FCU.
Click to view larger image The winning family of E FCU's Lose to Win: Financial Edition competition received $10,000 after an eight-month competition. The family reduced debt by $22,000 and saved more than $12,000. From left, front row: Kalyn Smith, 7, and Shelby Smith, 9. Back row: Ken Bordelon, E FCU CEO; Anna Lafitte, E FCU collections manager and contest coach; Kristi Smith, Lose to Win winner; and Valerie Jenkins, Consumer Credit Counseling Services counselor and contest coach. (Photo provided by E FCU)
Eight months later, with the help of a team of financial coaches, Smith turned her finances around and was named the $10,000 grand prize winner of the Baton Rouge-based credit union's Lose to Win: Financial Edition competition. Smith competed with three other families to see who could reduce debt and increase savings by the greatest percentage from February through September. With the help of financial coaches Anna Lafitte of E FCU and Valerie Jenkins of Consumer Credit Counseling Services (CCCS), Smith and her two children, Shelby and Kalyn, lost more than $22,000 in debt and saved more than $12,000. The families' journeys were chronicled weekly through online videos and blogs, and during television newscasts on local NBC and Fox affiliates. All the participating families improved their financial outlook. Combined, the four families made a financial swing of $80,000, with the help of E FCU and CCCS. Here's how they placed:
* Second place--the Ridings family of Gonzalez, La., who reduced debt by more than $10,000 and grew savings by $8,000; * Third place--The Willis family of Baton Rouge, who reduced debt by more than $9,000 and saved $6,300. * Fourth place--The Hall family of Zachary, La., who lowered debt by $9,000 and raised savings to nearly $3,000.

CU president suspect in embezzlement commits suicide

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WISCONSIN RAPIDS, Wis. (11/5/09)--The former executive of a Wisconsin credit union, who was facing federal embezzlement charges at the credit union, committed suicide. The body of David K. Henke, 50, former president/CEO of Rapids Municipal CU--which merged into Bull’s Eye CU, Wisconsin Rapids, Wis., in December--was found inside his vehicle Monday by sheriff’s deputies (The Daily Tribune Nov. 3). Deputies were looking for Henke after he failed to appear Monday for a plea hearing in U.S. District Court in Madison, Wis. Federal Judge Barbara S. Crabb issued a warrant for his arrest, the newspaper said. Henke allegedly embezzled $634,000 from the credit union’s accounts from November 1999 to October 2008, the paper said. Bull’s Eye is working with members to replace the money they lost in their accounts, the paper added.

iBankratei highlights CUs rates in video

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NORTH PALM BEACH, Fla. (11/5/09)--Credit unions offer better deals on credit cards, savings accounts, checking accounts and loans than bigger banks, according to Bankrate.com. Bankrate noted in a video that credit unions’ rates are better on savings and loan products, and encouraged consumers to find a credit union to join. “Odds are that there’s some way you’re going to qualify for some type of credit union, and once you do qualify and join you are a member for life even if you change careers or move away,” Bankrate said. “A credit union might be a good idea if you borrow or save.” To see the video, use the link.

Ode to Rusty Jeep wins I Hate My Car contest

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BURNSVILLE, Minn. (11/5/09)--US FCU (USFCU) in Burnsville, Minn., and a local Chevrolet, Dodge, Kia dealer launched a “I Hate My Car Contest” in October so car owners could vent their frustration with their vehicle in the hopes of winning a new 2009 Chevy Aveo to replace it.
Click to view larger image “I Hate My Car” Contest winner Paul Dehn (middle) poses with his new 2009 Chevy Aveo along with dealership owner, Jeff Belzer Sr. (left), and US FCU President/CEO Bill Raker (right). (Photo provided by US FCU)
The contest was an alternative to the expired “Cash for Clunkers” program--one that extended beyond replacing only those cars considered “clunkers.” With almost 600 rants from disgruntled car-owners, it was difficult to choose just one winner, the credit union said. However, a few entries stuck out among the haters, including that of Paul Dehn--the winning entry. Dehn paid tribute to his hated 1994 Jeep Cherokee with a poem titled “Ode to A Rusty Jeep.” After visiting USFCU’s Bloomington, Minn., branch, Dehn knew the theme of the contest was perfect for him. “The manual shifter of my truck had broken off at one point, so I had been using an old aluminum bat that was sawed off at one end in its place,” Dehn said. “I entered with no expectation of winning, but thought it was a cool way to share my feelings about my worn-out vehicle.” Dehn won the contest and a new car, US FCU said. “This is definitely an unexpected, yet welcome blessing for me right now during these difficult economic times,” he said. “I never win anything, so this was a wonderful surprise!” His dog, Kemo-Sabe, a Malamute-Shepard mix mentioned in his entry, came along to check out his owner’s new ride. “I would love to let Keno ride in the Aveo, but I would rather keep this one smelling nice and new--without the smell he left in my Jeep,” Dehn said. To view the poem, use the link.

CUNA spotlighted in Obama Wisc. news coverage

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MADISON, Wis. (11/5/09)--The Credit Union National Association (CUNA) was noted prominently in local media coverage of President Barack Obama’s Wednesday visit to Madison, Wis. Obama’s trip to Madison was the first time a president had visited the city while in office since Harry S. Truman, who went to Madison in 1950. During that visit,Truman helped lay the cornerstone of what was then CUNA’s new building in Madison on May 14, 1950. The Journal featured a black-and-white photo of Truman holding the trowels on the front of Wednesday’s paper (the photo is at the bottom of the front page). Truman kept one of two trowels used to lay the stone. CUNA kept the other, said the photo caption (Wisconsin State Journal Nov. 4). While in Madison, Obama spoke at a local middle school about education reform.

L.A. CUs help promote news bank development districts

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LOS ANGELES (11/5/09)--Los Angeles credit unions are helping to promote the newly approved Los Angeles City Council measures to establish banking development districts, said the California Credit Union League.
Click to view larger image Attending a press conference before the Los Angeles City Council approved an ordinance Friday that would create districts for banking development throughout the city were, from left: Carl Stewart, CEO, Water and Power Community CU, Los Angeles; Josh Stehlik, Neighborhood Legal Services, Los Angeles; Oliva Calderon, New America Foundation; Los Angeles City Councilman Richard Alarcón; Forescee Hogan Rowles, Community Financial Resource Center Los Angeles; Lucia Moreno-Linares, Family FCU CEO, Wilmington, Calif.; and Leticia Rodriguez, board member, Pacoima (Calif.) Development FCU. (Photo provided by the California Credit Union League)
The ordinance, which was proposed in May, would provide property tax relief and expedite land-use approval for credit unions and banks to open branches in underserved areas. It is modeled after a similar measure passed in New York City (News Now Nov. 3). The ordinance would guarantee municipal deposits for credit unions and banks. The city treasurer also will create a task force to work with department heads and council members to determine how to model the Los Angeles program after the New York City program. At a Friday press conference before the motion was approved, Carl Stewart, CEO, Water and Power Community CU, Los Angeles, and Lucia Moreno-Linares, CEO, Family Federal CU, Wilmington, Calif., spoke about what the program will mean to those in underserved communities. “While credit unions operate in many communities in these proposed districts, we hope that this program will educate people about the options that already exist and incentivize financial institutions to do even more in their local neighborhood,” Stewart said. “Credit unions look forward to working with the city to bring our communities back on track and look forward to being part of the financial success of our communities as part of the Banking Development District Program.” “I think being ‘at the table’ when our city looks at ways to use its considerable influence to encourage delivery of financial services to the undeserved or unbanked is very important but also an exciting opportunity to create partnerships where we as credit unions help draft the language,” said Moreno-Linares. “It’s a great opportunity to be able to give direct feedback to city officials about why something will or will not work for us.” An estimated 300,000 households in the Los Angeles area are without a checking or savings account. These families rely on expensive alternative financial services, said the league. The Brookings Institution estimates that the average “unbanked” household in Los Angeles pays more than $700 each year to cash checks and use money orders to pay bills. More than $100 million of income is lost every year by families paying for expensive financial services. The fees translate into more than $54 million in check-cashing fees and $88 million in payday loan fees in Los Angeles every year. In Los Angeles, there are 944 check-cashing outlets and 312 payday lenders, but only 694 bank and credit union branches.

CU System briefs (11/04/2009)

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* SANTA ROSA, Calif. (11/5/09)--Redwood CU employees enjoy an ice cream party to celebrate raising $77,894 in the credit union's 2009 United Way campaign. The amount
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exceeds its $70,000 goal by more than 10%. "With the challenges of today's economy, I am truly awed by the generosity our employees and officials demonstrated during this year's United Way campaign," said RCU President/CEO Brett Martinez, who also volunteers on the board of United Way of the Wine Country. This year, at the request of United Way, the credit union ran its campaign a month early to act as a pacesetter for other local companies. It raised more than $73,000 for the United Way of the Wine Country, where Redwood is headquartered and has 10 branches, and more than $4,700 for United Way of the Bay Area, where it also has several branches. (Photo provided by Redwood CU) … * DALLAS (11/5/09)--Texans CU raised more than $50,000 for the Juvenile Diabetes
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Research Foundation's (JDFR) Walk to Cure Diabetes. The walk drew more than 15,000 walkers in three locations and raised $1.5 million to date. Texans CU raised funds by soliciting donations, selling vendor logo space on the Texans T-shirt, selling jeans days and offering raffle prizes such as tickets to Dallas Cowboys, Dallas Stars, and Dallas Mavericks tickets, a meet and greet with ice hockey player Mike Modano and a week of vacation. The photo shows part of the Texans walk team at the start of the walk. (Photo provided by Texans CU) … * MEDFORD, Ore. (11/5/09)--Rogue FCU was named the Best Financial Institution in the 2009 Medford Mail Tribune's Readers' Choice Awards. Employee Andrew Staley was voted Best Financial Advisor, and employee Gary Duvall was voted as third Best Financial Advisor. "Putting our community and our members first in every decision we make is very important," said Rogue President/CEO Gene Pelham, noting that Rogue is "fortunate to be a part of such a great community." The credit union has $448 million in assets and more than 46,000 members …

CU System briefs (11/03/2009)

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* DULUTH, Minn. (11/4/09)--Members Cooperative CU (MCCU) has created a non-profit foundation to benefit young people in communities it serves. The Community Youth Foundation will provide educational scholarships, financial literacy education and financial support for organizations and activities for youth. Its focus will be shaped in part by three board members who are 21 years old or younger. The foundation's board consists of 11 members who span the ages from 17 to 74. "This is a youth-focused foundation, so we felt it is critical to have a strong youth presence on our board," said Tammy Heikkinen, president/CEO of MCCU and foundation board member. Seventeen-year-old Logan Pallin, a senior at Cloquet High School and the board's youngest representative, will chair the foundation's Grant Committee. Other board members are Al Alm, the board's oldest member; college students Wing Chan and Kelly Splonskowski; community businesspeople Lisa Heyesen, Pashca Parks and Tim Wigchers; past MCCU President Del Prevost; and current MCCU representatives Ralph Hamman and Adele Hartwick. MCCU Vice President Robbie Thompson will coordinate activities for the foundation. Officers are Hartwick, chair; Parks, vice chair; and Chan, secretary/treasurer … * FARMERS BRANCH, Texas(11/4/09)--Gerald R. "Chuck" Sheets, past president of Corpus Christi City Employees CU, died earlier last month in Corpus Christi, according to the Texas Credit Union League (LoneStar Leaguer Nov. 2). He served on the board of directors of the Texas Credit Union League and affiliates from 1983 to 1984, and was named by former Gov. Mark White to the Texas Credit Union Committee for an eight-year-term ending in 1991. He also served as past president of the Coastal Bend Chapter of Credit Unions. He is survived by his wife, one daughter and one son ...

New Chrysler program will save CU members thousands

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LIVONIA, Mich. (11/4/09)--Chrysler Group LLC and America’s credit unions are offering new discounts through the “Invest in America” program. The discounts started Tuesday and will run through Nov. 30. The program will offer “Affiliate Rewards” to credit union members. Knowing the loyalty credit union members have toward domestic vehicles, the partnership is expected to match members with Chrysler Group LLC’s line of vehicles. Credit union members will receive preferred pricing on all 2009 Chrysler, Jeep, Dodge and Ram Truck vehicles and select 2010 vehicles. The discounts are available regardless of where members gain financing. More than 2,000 credit unions in all 50 states have been promoting “Invest in America” discounts, driving members back to domestic automakers. “The goal of the program is to support U.S. jobs, U.S. families and U.S. companies,” David Adams, CEO of CUcorp, a national credit union marketing company, told a teleconference Tuesday. “The program will save credit union members thousands of dollars on eligible 2009 and 2010 vehicles. The preferred pricing for credit union members will be 1% below the dealer invoice price. It will be a ‘no haggling discount.’ “The program will bring savings to 90 million credit union members and also is a tremendous incentive to buy a domestic vehicle,” Adams added. CUcorp research shows that almost 40% of credit union members who bought vehicles through the “Invest in America” program previously owned a competitor’s brand. The research also shows that members overwhelmingly found the discount to be very important in their decision to purchase a domestic vehicle. “Credit unions will benefit from the program because they are the low-cost providers of auto loans and will pick up some auto loans,” Adams said. “Hopefully this program will expand into December and also 2010 in some form or another.” All U.S. automakers are reporting an uptick in sales volume because consumers are buying more, Adams added. “We’re happy with the progress in sales for domestic automakers and credit unions’ involvement in it,” he said. Credit unions’ share of auto financing, spurred in part by the “Invest in America” discounts, is growing nationwide, CUcorp said. In Michigan, credit unions’ outstanding auto loans grew 32% from June 2008 to June 2009, a record for credit unions. Because of conservative lending strategies and their not-for-profit structure, credit unions are strong and have money to lend to their members, despite the national credit crunch, CUcorp said. Credit unions have financed more than $3.1 billion worth of vehicles through the “Invest in America” program. Historically, credit unions offer lower loan rates than other financial institutions. The average credit union loan rate is 5.8% compared with 7% for the average bank rate, according to a Datatrac survey of more than 17,000 financial institutions. “Invest in America” is also offering discounts with General Motors; Sprint; Thor Industries, a U.S. recreational vehicle (RV) manufacturer; and Allied Moving and Storage. FTD Florists and CU Benefits are the newest partners to offer credit union discounts through the “Invest in America” program. Those partnerships’ discounts were effective Sunday.

IBusiness WeekI media cover CUs views on lending more

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MADISON, Wis. (11/4/09)--Business Week, a Kiplinger's editor on the radio, and a television station in Dallas all recognized credit unions' views in separate items broadcast the past few days. Business Week Online Friday carried an item that is scheduled for this week's print edition featuring a member of the CUNA Lending Council executive committee, Gayle Rust Gustafson, vice president of financial services at Rivermark Community CU in Beaverton, Ore. The article discusses what has happened to the credit machine in the economy and notes that securities--the shadow banking system--may be sputtering back thanks to a boost from the federal government. However, low housing prices have put a dent on home equity loans and lenders are trying to figure out how to be prudent in their lending. It notes that Rivermark Community CU made 442 auto loans in September, 33% more than the previous year. "I think peoples' confidence is returning, and they are feeling a bit more secure," Gustafson told Business Week. However, Rivermark is tightening its lending standards--it's cutting the amount of items, such as the unpaid balance on a trade-in vehicle, that a borrower can roll into a new-car loan. Kiplinger's also noted credit unions. Because rates in money market mutual funds are really low, not many people are making money. However, community banks and credit unions are giving regular banks “a run for their money,” according to Janet Bodnar, editor of Kiplinger Personal Finance during a radio program Oct. 15 on WTOP News. “Community banks and credit unions are competing for your money, and they are generally giving you a higher rate of return on your savings,” Bodnar said. She noted that some financial institutions are giving their accountholders interest on checking accounts if accountholders agree to receive their statements through e-mail, use online bill pay and direct deposit, and a debit card for transactions. “If you’re willing to do that, you can make money,” Bodnar said. “On deposits of up to $25,000, interest rates are good if you play by the rules.” WFAA in Dallas, a Texas ABC affiliate, also interviewed Sharon Moore, president/CEO of City CU in Dallas, for a segment on interchange fees. “Interchange is the basis for how we clear electronic transactions, whether they are debit or credit,” Moore said. “As a financial institution, we issue cards and we pay interchange for our members’ cards. And if someone uses our ATM, we get interchange back. It flows in and out.” The legislation introduced in Congress would govern the interchange system by implementing rate-setting. “It’s been a free system that we’ve benefited from by offsetting the cost for running a card program,” Moore added. Retailers are promising that they’re going to lower the fees that financial institutions pay for a debit card transaction. However, the cost will shift to consumers, Moore said. The legislation is not going to be a “free lunch” as some people believe it to be, she added.

No action yet on Iowa leagues application to buy bank

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DES MOINES, Iowa (11/4/09)--Bank regulators have yet to rule on the Iowa Credit Union League's application to acquire an Arizona-based bank to possibly provide correspondent services to Iowa's credit unions as the Iowa Corporate Central CU reviews its future. Both the Federal Reserve Bank in its capacity as the regulator of bank holding companies and the Office of the Comptroller of the Currency (OCC) as the primary regulator of national banks review such applications. “The regulators try to reach a decision within 60 days of receiving the application and there are still several weeks remaining in that timeframe," said Murray Williams, league chief operations officer, told News Now. The Iowa corporate, a small but well-capitalized corporate based in Des Moines, has conveyed to its members that it is examining whether it can continue to provide the same competitive products and services in a changing regulatory environment, the league said in an Oct. 6 article in News Now. The National Credit Union Administration is set to make recommendations regarding corporate credit unions at its November meeting.

CUNA Lending Council re-elects executive committee

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MADISON, Wis. (11/4/09)--The coming year’s executive committee and officers for the CUNA Lending Council were announced during the Council’s 15th annual conference, which ends today in San Diego, Calif. This is a result of the most recent annual election by the council membership in the months preceding the conference. Incumbents re-elected were:
* Lloyd Gill, executive vice president/chief operations officer, City County CU, Margate, Fla.; * Aaron Bresko, vice president lending, BECU, Tukwila, Wash.; * Michael Long, executive vice president/chief credit officer, UW CU, Madison, Wis.; * Dana Rawlings, senior vice president/chief operations officer, Smart Financial CU, Houston, Texas; * Keith Reynolds, vice president lending/business Services, Citizens Equity First CU, San Jose, Calif.; * Gayle Rust Gustafson, vice president finance services, Rivermark Community CU, Beaverton, Ore.;
Gill will continue as the chair of the council Executive Committee through 2010 when he completes his two terms on the executive committee. Aaron Bresko will continue as vice chair. The CUNA Lending Council executive committee also includes:
* Claire Ippoliti, vice president lending, Philadelphia (Pa.) FCU; * Bonnie Doolin, senior vice president business development, Massachusetts Credit Union League, Marlborough, Mass. * Gary Smart, vice president business services and lending, Crane FCU, Odon, Ind.; * Bill Vogeney, senior vice president/chief lending officer, Ent FCU, Colorado Springs, Colo.; and * Charles Anderson, executive vice president commercial banking, Arizona State CU, Phoenix.

Top 10 INews NowI stories for October

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MADISON, Wis. (11/4/09)--Stories about the Credit Card Accountability, Responsibility and Disclosure (CARD) Act dominated News Now’s Top 10 story list for October. The five CARD Act stories bumped a story about interchange fees, “Altering interchange fees could reduce consumer choice, CUNA testifies,” off the Top 10 list. The top 10 News Now stories for October are: 10. CEOs at two troubled CUs replaced LAS VEGAS (10/13/09)--The CEOs at two credit unions in Las Vegas have been replaced, according to local media reports. 9. Changes to CARD Act in view WASHINGTON (10/8/09)--The Credit Union National Association (CUNA) has advised leaders of the House Financial Services Committee that credit union members may face increased costs and reduced services if technical corrections to the Credit Card Accountability, Responsibility and Disclosure (CARD) Act are not made. 8. Compliance: What an accelerated CARD Act date would mean WASHINGTON (10/1/09)--Credit unions, faced with the specter of a bill that would accelerate the effective date of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act, have been seeking guidance on what should be done now to prepare for the possibility, said Kathy Thompson, Credit Union National Association senior vice president for compliance. 7. Film director: Take your money out of a bank, put it into a CU DETROIT (10/27/09)--A Michigan filmmaker is encouraging consumers to take their money out of banks and put it into credit unions. 6. 21-day fix scheduled for House vote Tuesday WASHINGTON (10/12/09)--A bill intended to fix a troublesome 21-day disclosure provision in the Credit CARD Act is scheduled to be considered by the House tomorrow. 5. Suze Orman: Switch cards to CUs NEW YORK (10/13/09)--Consumers with credit cards might want to think about doing a balance transfer to a credit union, personal finance expert Suze Orman said on MSNBC's “Morning Joe” program Friday. 4. Corporate CU sues U.S. Central over ‘excess capital’ WASHINGTON (10/21/09)--In legal documents filed late last week, Wisconsin-based Corporate Central CU is seeking the reimbursement of $6 million in excess investments from U.S. Central FCU. 3. Senate fixes 21-day CARD Act problem WASHINGTON (10/30/09)--Just two weeks after House members approved H.R. 3606, the CARD Act Technical Corrections Act, by voice vote, their colleagues in the Senate voted by unanimous consent to ratify the bill. Next stop for the measure: The president's desk to be signed into law. 2. CARD Act corrections pass House via voice vote WASHINGTON (10/14/09)--The House of Representatives on Tuesday approved by a voice vote H.R. 3606, the CARD Act Technical Corrections Act, which was introduced by Rep. Peter Welch (D-Vt.) last month. 1. New Dodd bill would set overdraft rules WASHINGTON (10/20/09)--Sen. Christopher Dodd (D-Conn.), who heads the Senate Banking Committee, unveiled his new bill Monday that would limit the fees financial institutions can charge on overdraft protection services.

WOCCU CU support would increase remittances in Africa

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TUNIS, Tunisia (11/4/09)--More remittance funds would reach more people, especially those in poor rural areas, if Africa's savings and credit cooperatives (SACCOs), or credit unions, were able to better support cost-effective remittance programs, according to the World Council of Credit Unions (WOCCU). People in developing countries worldwide depend on remittance income--money transfers sent by family members working abroad--to sustain their households, but some countries’ financial systems are better able to support such programs than others. African nations have been particularly hard hit because their capabilities are hamstrung by restrictive regulations and dominated by only a few providers, WOCCU said. “Remittances have become a critical income source for many poor families in developing countries,” said Saul Wolf, remittances manager for IRnet, the international remittance program supported by WOCCU Services Group, the association's for-profit arm. Speaking to attendees at the recent International Fund for Agricultural Development's (IFAD) Global Forum on Remittances in Tunisia, Wolf echoed the findings of a recent IFAD study, noting that lower transfer costs and greater access through microfinance institutions (MFIs) like SACCOs will improve Africa's remittance opportunities. “High remittance fees take money away from poor recipients who depend on the funds to meet basic needs and improve the quality of their lives,” Wolf said. “IRnet’s goal is to help African SACCOs gain the capabilities necessary to grow their remittance programs where local laws permit.” Roughly 30 million Africans live outside their country of origin, and many leave to find work, according to the IFAD study. African migrants send about $40 billion in remittances to their families each year. An estimated 30% to 40% of remittances are for recipients in underserved rural areas, many of whom face high transfer fees and the need to travel long distances to receive their funds. Both hurdles diminish the funds, leaving less for recipients to meet their personal needs. Regulatory restrictions in some African countries also prohibit MFIs, including SACCOs, from participating in electronic funds transfer activities, which support remittance traffic. Market dominance by Western Union and MoneyGram, which the IFAD study estimates control 65% of Africa’s remittance market, leave little room for fledgling service providers to grow. Greater involvement by SACCOs and other MFIs would not only help make remittances more affordable, but foster greater economic stability among Africa’s working poor, the study said the study. IRnet’s program in Kenya has demonstrated that SACCOs can be effective conduits for remittance funds. Currently, 11 SACCOs throughout Kenya distribute remittance funds sent via credit unions in other countries to family members back home. Kenya's SACCOs processed 1,432 transactions, or about $670,000 in the first nine months of 2009, indicating that the number of transactions and the amounts transferred are increasing. Kenya is IRnet's first foothold in Africa. The program, which supports credit union-to-credit union funds transfers in seven Latin American countries, accounted for more than 1.2 million transactions totaling roughly $491 million worldwide in 2008. WOCCU would like see both amounts increase, and hopes to bring IRnet services to other African nations through their SACCOs pending increased technological capabilities and favorable regulations in support of such programs, Wolf said. “IRnet can be a critical link in the chain because it can help facilitate viable low-cost money transfer opportunities for people worldwide,” Wolf said. “We want to follow the model we’ve established in Kenya and expand IRnet to other parts of the world, where high remittance fees remain the norm rather than the exception.”

Excellence in Lending winners announced

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SAN DIEGO (11/4/09)--Five credit unions were recognized for their lending prowess Monday as recipients of CUNA Mutual Group’s Excellence in Lending Awards. The awards were presented at the 15th Annual CUNA Lending Council Conference in San Diego.
Click to view larger image The winners of CUNA Mutual Group’s 2009 Excellence in Lending awards were announced at the 15th Annual CUNA Lending Council Conference. Pictured are front row, from left: Dawn Wolfe, Rogue FCU, Medford, Ore.; Lashonda Moore, St. Louis (Mo.) Community CU; Rita Murphy and Pat Stewart, Mayo Employees FCU, Rochester, Minn.; Yvette Blauvelt, New Orleans Firemen’s CU, Metairie, La.; and Carol Laemmerhirt, Erie FCU, Erie, Pa. Back row, from left: Lloyd Gill, CUNA Lending Council chairman and award presenter, City County CU, Fort Lauderdale, Fla.; Kira Orth, Mayo Employees FCU, Rochester, Minn.; Cami Crouchet, New Orleans Firemen’s CU, Metairie, La.; Sandi Carangi, Erie (Pa.); and Dan Kaiser, award presenter, CUNA Mutual Group, Madison, Wis. (Photo provided by CUNA Mutual Group)
CUNA Mutual Group’s Dan Kaiser, vice president of credit insurance products, presented the 10th annual awards. Recipients were:
* New Orleans Firemen’s CU, Metairie, La.--Consumer Lending, less than $250 million in assets; * Rogue FCU, Medford, Ore.--Consumer Lending, more than $250 million; * Mayo Employees FCU, Rochester, Minn.--Mortgage Lending, more than $250 million; * Erie (Pa.) FCU--Business Lending; and * St. Louis (Mo.) Community CU--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. The awards provide an opportunity for credit unions to share best practices and ideas, build networks and recognize and celebrate lending excellence.

CUNA Mutual discusses reg changes at Lending Council

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SAN DIEGO (11/4/09)--The era of regulatory change is here to stay, at least for the foreseeable future, which means credit unions should plan accordingly, said William Klewin, associate general counsel at CUNA Mutual Group.
Credit unions need to be prepared for changes in the regulatory environment, said William Klewin, CUNA Mutual associate general counsel, during a breakout session at the 15th annual CUNA Lending Council Conference in San Diego last weekend. (Photo provided by CUNA Mutual Group)
Klewin spoke to attendees during a breakout session, “Practical Steps for Regulatory Compliance for 2010,” at the 15th annual CUNA Lending Council Conference in San Diego last weekend. He said the general regulatory environment involving both legislative and regulatory issues requires credit unions to be acutely aware of ongoing changes and their effect on how credit unions do business. “What you know about, you can plan for,” Klewin said. He stressed the importance of credit unions preparing adequately to deal with regulatory change by knowing what’s ahead and incorporating the changes into long-range planning, staffing and budgets. Challenging economic conditions, and the actions leading to those conditions, have resulted in new consumer-protection legislation regarding credit cards, overdraft protection practices and the proposed Consumer Financial Protection Agency. For credit unions, how credit card applications and solicitations are written are among the more significant changes. For example, Klewin pointed out that fees assessed for late payments, exceeding credit limit, balance transfers and cash advances must now be disclosed in a table within credit card applications and solicitations. Also, there are new regulations regarding how rates are presented in writing, including specific font size and, in some cases, presented in bold. “These changes affect all of you who are offering credit cards to your members,” said Klewin. “So it’s critical you’re aware of the new regulations and how soon you need to be in compliance.” Klewin also focused on key regulatory issues at the core of credit union business, primarily new rules for multi-featured, open-end lending included in the changes within Regulation Z. He stressed the importance of offering multi-featured, open-end lending to credit union members despite the Reg Z changes. “There are a lot of reasons why we care about multi-featured, open-end lending,” Klewin said. “It provides a superior member experience because it’s convenient, requires less paperwork and is a reduced compliance risk. But more than that, it’s a marketplace differentiator for us, consistent with building and maintaining member relationships. And those member relationships translate into increased fee income.” Klewin explained the subtle changes within Reg Z and debunked some common myths about multi-featured open-end lending, adding that the myths “should not be reasons to change from multi-featured, open-end lending.”

iN.Y. Timesi four page advertorial touts CUs

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NEW YORK (11/4/09)--A four-page advertorial in Monday's issue of The New York Times, entitled "Service Before Profits: The Credit Union Revolution," touts credit unions' strengths and service philosophy.
Click to view larger image Click to download a pdf [2MB]
In it, Credit Union National Association President/CEO Dan Mica says, "A lot of people still don't understand credit unions, but the difference is very simple. For-profit financial institutions are in business to make money for shareholders. Credit unions are here to serve their members. That's the whole difference." For credit union member-owners, said Mica in the article, that means credit unions pay higher interest rates on deposits than do for-profit institutions, and they charge lower interest rates on loans. He also notes the growing count of credit union members, and says, "We are about Main Street, not Wall Street. We are here to serve Main Street. That is what we do. And that is what a lot of people want today." The article also provided viewpoints from:
* Debbie Matz, chairman of the National Credit Union Administration, who emphasizes that members' deposits are safe in credit unions; * David Wallace of North Carolina-based Global Financial Services, who notes credit unions have stuck to the basics of traditional community financial services. He provides statistics indicating credit unions have fewer charge-offs and says credit unions have money to lend; * Kam Wong, CEO of Municipal CU of New York, and Frank Pollack, CEO of Pentagon FCU, both of whom provide examples of the service philosophy; * Jim Park, CEO of Credit Union 24, a Tallahassee, Fla.-based ATM network, who talks about innovation and surcharge-free networks; * Fred Johnson, CEO of Credit Union Executives Society, discussing continual education; * Stephen Delfin, executive director of the National Credit Union Foundation, who speaks to credit unions' social responsibility concerns; * Richard Powers, executive director, MBA programs and Master of Finance Programs at the University of Toronto, on educating boards; and * Fred Becker, CEO of the National Association of Federal Credit Unions, on members' trust of credit unions.
The advertorial is accompanied by a number of paid ads including one from CUNA that notes that nearly 100 million American consumers will soon belong to the nation's 8,000 credit unions. Use the link to view the advertorial pages.

Data breach victims at 4 x greater fraud risk--study

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SAN FRANCISCO (11/3/09)--Consumers who received a data-breach notification within the past year are four times more likely than typical consumers to have been victims of identity fraud, says new research. However, consumers rarely attribute the fraud to their data breach exposure. "Data breach notifications are intended to help consumers take protective action," said Mary Monahan, managing partner and research director at Javelin Strategy & Research, which conducted its third annual survey of nearly 5,000 U.S. consumers. "Notification is critical because consumers are over four times more likely to encounter actual fraudulent transactions if they receive a data-breach notification," Monahan said in a press release. "But our research shows a disconnect between breach notifications and consumer awareness of risk, which results in individuals not being adequately protected." During the past three years, roughly 11% of consumers received a breach notification, said the report. More than one-third of breach victims experienced exposure of their Social Security numbers, and 15% had their ATM personal identification numbers (PINs) compromised. Despite almost 20% of breach victims suffering some kind of fraud in the past year, only 2% attribute their fraud to the breach. "Consumers who receive notification of breaches need to be better protected by resolving the disconnect between breach notification and consumer awareness of actual fraud risk," said Javelin's Risk, Fraud and Security Analyst Robert Vamosi. Vamosi told SCMagazineUS.com that results are not a blip. In 2007 and 2006, Javelin saw a similar pattern. He noted the correlation between receiving a breach notification letter and the increased risk of suffering an actual identity theft may be do to the fact that alerts many times are sent only to people severely impacted by a breach.

IComputerworldI CU shrinking its data center

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DENVER (11/3/09)--Credit Union of Colorado's information technology (IT) department is shrinking its data center footprint from 45-by-15-feet to 12-by-12 to help the credit union with its space needs in a tight economy, reports Computerworld (Nov. 2). Tom Gonzalez, senior network administrator at the Denver-based credit union, told the publication that the data center is "returning" some of its space to the company and doing more with less. Computerworld noted that other IT managers are helping their companies by making their data centers smaller by using virtualization, high-density and multifunction hardware, alternative energy sources and modular design techniques. These make a data center more efficient and less costly. At the credit union, server virtualization helped lower space required from 40 boxes stored to just a couple. Twelve racks of information will consolidate to four, freeing up space for the credit union's departments that provide "member-facing services." For the $881 million asset Credit Union of Colorado, shrinking the data center eliminated 33 power ports and two circuits, said Gonzalez. However, the credit union doesn't have power-measurement tools so it can't quantify the actual energy and cost savings. The biggest challenge in downsizing a data center is planning and making sure every last piece fits and there's no wasted space, said Gonzalez. He also noted that a smaller data center doesn't reflect on the skills or work his team performs. "We're judged on how well we do our job, not on how much area we consume," he told the publication.

Delayed retirements a succession-planning opportunity

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MADISON, Wis. (11/3/09)--Credit unions look like they'll be in a good position when their current CEO retires. Roughly 63% of credit unions with $100 million or more in assets have a succession plan in place that specifies how the CEO will be replaced, says the Credit Union National Association's (CUNA's) recently released 2009-2010 CEO Total Compensation Survey. Among credit unions in that asset group, 19% of credit union CEOs plan to retire in the next five years, down from 29% in 2008, says the new CUNA report. CEOs across the nation are delaying retirement, either because they experienced a loss in retirement savings or they are invested in seeing their organization through these trying times. "Although the number of CEOs planning to retire in the near future has decreased, it is crucial that credit unions have a succession plan in place so that they are prepared for the CEO's departure," said Beth Soltis, senior research analyst for CUNA. "Credit unions' performance will suffer if they do not have the right talent in place," Soltis added. "Considering today's shortage of qualified leaders, leadership development and succession planning should be a top priority for every organization." The survey provides nationwide CEO compensation data for credit unions $100 million plus in assets. Results are categorized by asset size, region and other points of comparison to help credit unions attract or retain top CEO talent. The report--available in print or PDF format--also provides the monetary value of the total compensation package to help measure the bottom-line value of CEO compensation packages compared with other credit unions. Those who purchase the report may also receive a discount on the CEO Total Compensation: Self-Selected Peer Analysis, a customized analysis that reveals CEO salaries, health plans, contract terms, bonuses, retirement plans and more for 10 or more credit unions that meet a credit union's own peer criteria. Each report is presentation ready. For more information, use the resource link.

Dupaco Holiday Club deposits payout totals 3.3 million

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DUBUQUE, Iowa (11/3/09)--More than $3.3 million was injected into Dubuque, Iowa’s local economy when Dupaco Community CU paid out this season’s Holiday Club deposits to more than 3,400 Dupaco members. The funds were deposited into members’ share draft checking or savings accounts on Saturday. Members traditionally open Holiday Club accounts in November with small deposits made into the account weekly or bi-weekly throughout the year. On or about the following Nov. 1, all savings, plus accumulated dividends, are paid out automatically to the depositor. Dupaco Holiday Club accounts are the perfect way for individuals to learn the art of thrift and avoid a post-holiday “financial hangover,” according to Dupaco Community CU President/CEO Bob Hoefer. “The habit of systematically saving money is a core principle of Dupaco and its Money Makeover,” Hoefer said. “This regular practice of thrift through a Holiday Club account--which also earns daily dividends year round--better prepares members when the holidays arrive.” Dupaco began offering its Holiday Club account in 1954. Since 1999, Dupaco members have saved more than $33 million through the program. The average Holiday Club payout this year is $971--up $65 from $906 during 2008. However, Hoefer pointed out the larger average Holiday Club payout doesn’t necessarily mean people will spend more on gifts this year. “Based on our experiences, concerns about the economy mean Dupaco members are approaching the holidays with a more disciplined approach to spending,” he said. “Some will use holiday savings to purchase necessities. Overall, we’ll see consumers will rely less on credit cards to purchase holiday gifts.” Dupaco expanded the “save for your goals” thrift concept in 2000 when it launched a variation of the Holiday Club called “You-Name-It” savings accounts. The You-Name-It accounts allow members to save for specific goals--such as a vacation, furniture or a child’s braces--and automatically set aside money into an account and name it whatever they choose, such as “2010 Family Vacation to Florida,” “New Red Leather Couch,” or “Jimmy’s Braces.” Members can open an unlimited number of these accounts with no minimum balance, Dupaco said.

MECU pays loan interest rebate early--for holidays

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BALTIMORE (11/3/09)--Municipal Employees CU (MECU) of Baltimore Thursday paid its members loan interest rebates totaling $1.14 million, a month earlier than usual. MECU has paid its members a cash bonus with loan interest rebates and extraordinary dividends every year since 1981. In 2007, the MECU board of directors decided to pay half the bonus in June and the second half in December, a practice that continues today. “We decided to pay our members the loan interest rebate early this year to help families shopping for the holidays,” said MECU’s Board Chairman Herman Williams Jr. “This has been a tough year for some of our members, and I’m glad we’re in a position to do something to help.” “MECU will also pay our members an extraordinary dividend at the end of December, when it’s usually paid,” said Bert J. Hash Jr., MECU president/CEO. “That will be approximately another million dollars returned to our members. It’s at times like this that the benefits of credit union membership really stand out.” MECU has $956.2 million in assets.

IN.Y. TimesI notes CUs aggressive ads vs. giant banks

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MADISON, Wis. (11/3/09)--Some credit unions are using aggressive marketing campaigns to differentiate themselves from big banks, The New York Times business section noted Monday. The Times interviewed Edward Speed, CEO of Texas Dow Employees CU in Lake Jackson, Texas, about the credit union’s campaign to persuade consumers to take their cash out of banks, such as Wells Fargo, and turn it over to smaller, homegrown institutions like his credit union. Speed saw an opportunity to capitalize on public outrage that resulted from taxpayer- funded bailouts that rescued big national banks, the newspaper said. One of his ads targeting national banks reads: “Real Texans bank locally. We respectfully suggest they head on back home and make their profits where they live.” Launching a website, bankwithtexans.org, Speed implores consumers to switch their financial accounts from “out-of-state carpetbaggers” to local institutions, such as credit unions, that have eschewed the risky investments that have beset Wall Street. Credit unions have remained loyal to practices such as accepting deposits and making old-fashioned loans, Speed told the paper. To read the full article, use the resource link. The issue also had a four-page advertorial on credit unions in its business section that features prominent credit union leaders including Credit Union National Association President/CEO Dan Mica. News Now will include a report on it in Wednesday's issue.

L.A. Council OKs bank development districts for CUs banks

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LOS ANGELES (11/3/09)--The Los Angeles City Council decided Friday to draft an ordinance that would benefit credit unions by creating districts for banking development throughout the city, according to a local business journal. The Los Angeles Business Journal reported Friday that the ordinance, which was proposed in May, would provide property tax relief and expedite land-use approval for credit unions and banks to open branches in underserved areas. The ordinance is modeled after a similar measure passed in New York City. The ordinance would guarantee municipal deposits for credit unions and banks. The city treasurer also will create a task force to work with department heads and council members to determine how to model the Los Angeles program after the New York City program. Councilmember Richard Alarcon introduced the ordinance in response to the high number of payday lenders and check-cashing outlets in low-income areas of Los Angeles. The lenders and outlets outnumber credit unions and banks and charge customers unnecessary fees. Each year, unbanked families pay more than $100 million in fees because they don’t have access to local banks, Alarcon said. Los Angeles has more than 1,200 check-cashing outlets and payday lenders, according to Pew Charitable Trusts.

Altura CU helps U. employees through furloughs

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RIVERSIDE, Calif. (11/3/09)--Altura CU has created a special loan program to help University of California Riverside (UCR) staff taking furloughs this school year. State colleges and universities have asked employees to take unpaid days during the 2009-2010 school year to deal with the state budget crisis and cuts in funding. Most UCR employees will have to take between 10 and 26 days without pay. The “UCR Furlough Loan Program” offers UCR employees tools to help them deal with what is likely to be a significant financial crisis, said Altura. It offers:
* The ability to borrow up to $10,000 from a guaranteed line of credit with rates as low as 3.49% annual percentage rate; * Repayment terms of up to 36 months, with a 12-month draw period; * Waiver of a $55 loan processing fee; * No pre-payment penalty for early pay-off; and * Online transfers to make it easy to manage draws on the line of credit and to set up recurring transfers for each pay period.
“As a partner of UCR, Altura is concerned about the impact of the recent pay cuts and furloughs on UCR employees,” said Jennifer Binkley, Altura executive vice president. “We developed a program that will allow UCR employees to borrow the amount their pay is reduced from a line of credit each pay period. The tool will allow for personal budgeting ease during a difficult time.” As Altura members, UCR employees also qualify for the VIP Checking account, which features a free interest-bearing checking account and a Visa credit card. They also can attend free financial workshops on budgeting, credit scores and investment strategies, including one at the local university branch for UCR employees. A financial fitness program with educational materials and online courses, and access to certified financial counseling are available for members on Altura’s website, Binkley added.

Maine league H1N1pandemic webinar sets record

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WESTBROOK, Maine (11/3/09)--More than 200 individuals participated in a recent Maine Credit Union League webinar last week about the H1N1 virus and pandemic planning. The 90-minute free presentation were offered to Maine’s 67 credit unions. The webinar covered H1N1 and seasonal flus in Maine, recommendations on preventing the flu, preparing for its potential impact on staff, tips for communicating information with internal and external audiences, and legal and human resource procedures and policies that credit unions should follow with staff and members. Presenting information during the webinar was Fran Simmler, business continuity planning coordinator for Synergent and the Maine league; league Jon Paradise, governmental and public affairs manager; and Robert Bower Jr., attorney with Norman, Hanson and DeTroy. After the webinar, the league unveiled a new page on its website to help credit unions with pandemic planning. The page includes a Pandemic Plan template, checklist, communications templates, a PowerPoint presentation from the webinar, and links to other resources. “One of our roles is to serve as a resource for our member credit unions and this was an opportunity to try and help provide some answers to the many questions credit unions have about this issue,” said John Murphy, league/president CEO.

CU System briefs (11/02/2009)

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* PENROSE, N.C. (11/3/09)--Carolina Mountains CU (CMCU), based in Penrose, N.C., has merged with Durham, N.C.-based Self-Help CU, effective Sunday. "For 35 years our first priority has always been to provide outstanding financial service to our members. By merging with Self-Help CU, we remain dedicated to that mission. We believe wholeheartedly that the decision to merge will not only increase the financial stability of CMCU, but also expand the ability of CMCU to serve communities throughout Western North Carolina," said CMCU CEO Diane Rogers. CMCU has four branches serving more than 7,000 western North Carolina residents and assets of $43 million. It will operate as a division of Self-Help, joining three eastern North Carolina credit union divisions: Cape Fear CU, Scotland Community CU and Wilson Community CU. The merger will give Self-Help a balanced presence of full-service credit unions in western and eastern parts of the state, the credit unions said … * RALEIGH, N.C. (11/3/09)--Nearly 1,000 members attended State Employees' CU's 2009 Annual Meeting Oct. 20 in Greensboro, N.C. SECU 2008-2009 Board Chairman Shirley Bell noted that more than 3,000 volunteers serve the Raleigh-based credit union. Three volunteers--Grady Cooper, Charles Koonce and William Locus--were honored with a video tribute and board resolutions for their cumulative volunteer service of more than 100 years. Irv Ellington and Dr. Al Wentzy were honored by the North Carolina National Guard for their commitment to several of the credit union's initiatives supporting National Guard families in the state. The credit union also elected a new board. Officers include Jim Barber, chairman; McKinley Wooten, vice-chairman, and Jim Johnson, secretary-treasurer. (Photo provided by State Employees' CU) … * SLIDELL, La. (10/3/09)--Adept thieves broke into an ATM at ASI CU Saturday after 11 p.m. by drilling into the combination lock to the ATM's safe. Slidell, La., police said the thieves disabled the ATM's video cameras around 11:30 p.m., and did not force their way into the ATM. The suspects either had a key to the machine or they picked the exterior lock. Then they drilled into the safe's combination lock, opened the door and took an undetermined amount of money. Police estimate the heist took about nine minutes (St. Tammy News Nov. 2) … * RICHLAND, Wash. (11/3/09)--HAPO Community CU donated funds so a children's football team could receive awards after $3,000 of the team's funds went missing. The Kennewick Huskies Grid Kids team bookkepper, Charity A. Smith, 35, of Kennewick, has been charged with second-degree theft. The money was collected to pay for expenses throughout the year, including game and practice jerseys, T-shirts, hats and sweatshirts for 90 players and their families. HAPCO said Friday it would donate $250 to cover the cost of the T-shirts (Tri-City Herald Oct. 31) … * FORT WAYNE, Ind. (11/3/09)--A former CEO of General CU, an $83.4 million asset credit union based in Fort Wayne, Ind., was sentenced to two years in a state prison for embezzling more than $1.57 million from the credit union. David L. Thieme, 50, of Huntertown, pleaded guilty in September to the felony. He was CEO of the credit union from 2004 until he was fired in April 2008. He had been with the credit union since 1988. Thieme also was sentenced to two years of probation and restitution of the $1.57 million. He repaid $982,000 to GCU within a week of his dismissal, said The News-Sentinel (Oct. 31). Court records indicated that Thieme made more than 6,000 unauthorized loan transactions, many of which violated GCU policies and in several instances Indiana law. The theft resulted in losses to GCU from underperforming or nonperforming loans of nearly $2.5 million. His actions included masking loan delinquencies by using general-ledger funds to make payments on them; pulling the trigger on undocumented, interaccount transfers or loans involving unrelated parties or trusts; and approving account maintenance transactions such as modifying obligation dates or delaying payment dates to avoid a loan review, said the article … * AUGUSTA, Maine (11/3/09)--Maine credit unions kicked off the Eighth Annual Ending Hunger Walking Tour Friday at Maine State CU in Augusta. Representatives
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joined Brenda Davis, executive director of Cross Roads Ministries, an Old-Town-based hunger agency that serves Eastern Maine, who will make the month-long journey. The walk is expected to encompass more than 650-750 miles and visit a record 62 communities as well as every county. At each credit union she visits, Davis will pick up a contribution from the Maine Credit Unions Campaign for Ending Hunger, which as pledged nearly $25,000. Pictured at the kick-off are from left, Cindy Barnes of Maine State CU, Davis and the Wompkee, the longest- running, continuous character in the Macy's Thanksgiving Day Parade. Credit unions have partnered with the Wompkee and are selling finger puppets and DVDs to benefit the end-hunger campaign. (Photo provided by the Maine Credit Union League) …

N.Y. CUs meet on Young Adult Outreach Initiative

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ALBANY, N.Y. (11/3/09)--Participants in the Credit Union Association of New York’s Young Adult Outreach Initiative recently held their final session at the association’s Albany headquarters. The session was the culmination of a five-month program focused on the young adult market.
Click to view larger image The Credit Union Association of New York recently wrapped up its Young Adult Outreach Initiative. From left are: Kip Summerlin, Columbia Greene FCU; Jennifer Habecker, Family First FCU; Teri Mulverhill, North Franklin FCU; Jody Carpenter, UFirst FCU; and Megan Armstrong, Sunmark FCU. (Photo provided by the Credit Union Association of New York)
In partnership with the Filene Research Institute and through REAL Solutions, the association offered the free program to New York credit unions interested in pursuing the young adult market to grow membership, and recruiting and retaining talented young professionals and volunteers. The youth program began in June with an informational webinar by Ben Rogers, research director for the Filene Research Institute. Rogers led the program’s live webinars and in-person meetings. “Credit unions that look beyond the membership challenge to provide great opportunities for young professionals and young volunteers will innovate faster and position themselves as financial institutions of choice for consumers,” Rogers said. Forty-five individuals from 28 credit unions participated in the program. They focused on assessments, brainstorming ideas about young adult issues, goal setting, identifying and/or creating transaction products and loan products for the young adult market, and using social media. During the final session, participants presented the findings of their young adult focus groups, their goals, what they’ve accomplished and their young adult outreach plans for 2010 and beyond. Each credit union recognized the importance of product bundling to attract its target audience and using parents, who are already loyal credit union members, to reach the youth market. Participants also found that credit unions of various sizes and memberships can use the same principles to attract youth. Participants also reported that their credit union CEOs and board members were more supportive of their young adult initiatives after seeing findings and future outreach plans they created as part of the program. “We felt the Filene program on youth outreach hit all of the important aspects that credit unions are searching for within this demographic,” said Sue Siegel, Sunmark FCU senior vice president of marketing and retail operation. “Credit unions are making huge strides in reaching out to the youth marketplace.”