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CU System briefs (12/10/2012)

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  • DETROIT and TEMPERANCE, Mich. (12/11/12)--A federal jury Friday found two Toledo, Ohio men guilty of robbing a Monroe County CU, in Temperance, Mich. in 2009. Quentin Sherer and Martin Tucker, both 33 years old, were found guilty after a week-long trial before U.S. District Court Judge Robert H. Cleland, according to U.S. District Attorney Barbara McQuade (CBS 62 Detroit and ClickonDetroit.com Dec. 8). Two men wearing masks and hooded sweatshirts entered the credit union on July 16, 2009, armed with semi-automatic pistols. Sherer allegedly demanded money while pointing his gun at one teller while Tucker was accused of pointing a gun at a member at another teller window and also demanding money. The two suspects ran out of the credit union with $6,000 to an awaiting car. A member followed the getaway car to Toledo, Ohio, where the suspects abandoned the car in a private driveway.  Tucker, a boxer, was arrested after the Federal Bureau of Investigation matched his DNA to that on a Q-tip nose swab taken during a boxing match in Toledo …
  • WEST JORDAN, Utah (12/11/12)--Mountain America CU President/CEO Sterling Nielsen is the newest member of the Western CUNA Management School (WCMS) Board of Trustees. He will join eight credit union CEOs, two league presidents, the WCMS president and WCMS provost on the board, which is responsible for oversight and direction of the school.  Nielsen has worked the past 17 years at the $3.4 billion asset, West Jordan, Utah-based credit union. Nielsen serves on the boards of Utah Credit Union Association, CUDL and CO-OP Shared Branching. WCMS serves 13 western states and is sponsored by the leagues and associations of those states, in cooperation with Pomona College in Claremont, Calif. …
  • HARRISBURG, Pa. (12/11/12)--Robert J. McCormack Sr., former Pennsylvania Credit Union Association (PCUA)  board chairman and chairman of the Scranton Times CU, died Sunday at the age of 83, according to PCUA  (Life is a Highway Dec. 10). He was employed by the Times for 42 years and served on the credit union's board for 20 years. In addition to serving as a director and board chairman at PCUA, McCormack was the founder and initial chairman of the Pennsylvania Credit Union Foundation. "Bob was one of the strongest leaders the league/association has ever had," said PCUA President/CEO Jim McCormack. "He was responsible for the development of the...foundation, and particularly the grant and fundraising initiatives...Bob will be missed at all levels of the credit union movement and by his family and friends." He is survived by his wife, Dorothy; five daughters; two sons; two brothers; nine grandchildren; and four great-grandchildren …

CUNA notifies website users of broad hacking attack

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WASHINGTON and MADISON, Wis. (12/11/12)--The Credit Union National Association (CUNA) is advising thousands of users of its website that no sensitive personal information from cuna.org was accessed or otherwise compromised in a hacking attack that--in addition to CUNA--also affected 30 or more additional organizations, U.S. government agencies, industry and other trade associations.

Among the other groups reportedly affected: NASA, General Dynamics, European Space Agency, the California Manufacturers & Technology Association, and the Texas Bankers Association.

The attack was conducted by Team GhostShell, a group that specializes in such security breaches--in an effort, it claims, to protest and draw attention to "the freedom of information on the net."  It is estimated to have resulted in gathering 1.6 million accounts and records in total from all of the organizations that it hacked.

"We do not believe any sensitive personal information from our website was accessed," said CUNA President/CEO Bill Cheney. "However, we are contacting all users of our website to advise them of the breach. Further, we will continue to analyze the information posted on-line by the group, as well as continue to validate that no other risks exist. We will also continue to monitor our website and take increased security measures to ensure it is safeguarded."

Cheney emphasized that no information from members of credit unions was compromised as part of this breach. (That's contrary to a report published on the Web stating that the breach "puts over 85 mil. people at risk.") "CUNA.org stores no consumer-member data," Cheney said. "Further, CUNA does not store any information for individual consumers who are credit union members."

The CUNA leader said the information on the association's website that was hacked was user ID information (generally e-mail addresses, phone numbers, titles and business addresses), as well as some encrypted password information from more than five years ago.

CUNA is advising users of its website to take some precautionary steps, however, including changing their passwords. "We advise anyone who has a CUNA log-in account or uses the same e-mail address as a login ID for other online sites (not associated with cuna.org)  to change the password," Cheney said. "Our CUNA website will be prompting users to change their passwords as well."

CU READ exam survey finds new issues reg burden

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HIGHTSTOWN, N.J. (12/11/12)--Credit unions continue to feel the resource strain from increased regulatory burdens, with many indicating they are seeing items show up in their Documents of Resolution (DOR)  that they have never seen before.  Those are two of the results of the Credit Union Regulatory Examination Assistance and Development (CU READ) survey of Region II credit unions.

The CU READ survey is a quarterly survey. The New Jersey Credit Union League conducted  first and second quarter regulatory and examination surveys on what credit unions experience during the exam process. The league's survey has since evolved to include other leagues from Region II (California/Nevada, Delaware, Maryland and District of Columbia, Pennsylvania, Virginia and West Virginia).

The CU READ survey is separate from a similar, national joint survey being conducted by the Credit Union National Association (CUNA) and the leagues to compile a complete picture of current examination processes and to assist them in honing advocacy efforts for credit unions before regulators on exam-related issues.

CU READ's third quarter findings for Region II focused on topics such as application of excessive DORs, the level of satisfaction with them, examiner time management issues and flexibility throughout the exam process. 

Survey respondents said that DORs continue to be heavier than in years past:

  • 64.4% of responding credit unions were presented with a DOR in their last exam.
  • 55.9% of respondent credit union leaders "strongly agree" and "agree" they are seeing items in their DORs that they have not ever seen before.
  • 54.6% indicated that they agree or strongly agree that items showing up in DORs (no evidence of violation of regulation/state or federal law) are much heavier than ever before.
  • 80.8% "strongly agree" and "agree" that heavier regulatory/exam requirements increased pressure on credit union resources.
National Credit Union Administration (NCUA) examiners scored high for professionalism and knowledge.

Exam positives included:

  • Examiners received high marks for professionalism and helpfulness, with both categories receiving a 45.8% ranking them as good and 33.7% ranking them as excellent;  44.6% said their examiner(s) were good in terms of fairness and 33.7% in objectivity.
  • 51.8% of respondents agree that examiner(s) were knowledgeable about the credit union and 57.8% about key Safety and Soundness issues and regulatory requirements.
In terms of exam length and scheduling issues:

  • 27.9% of respondents said their on-site exams lasted 13 days or more, while another 45.2% responded that their exam lasted exactly from four to nine days.
  • 48.1% of respondents strongly agree and agree that they have experienced examiners changing the exam date and time to accommodate the examiner's schedule.
The Region II leagues/associations will continue to collaborate and intend to produce a

CU READ 4th Quarter Survey to be released sometime in January 2013. At the state level, the NJ READ group will continue to communicate with NCUA to further facilitate positive change and implementation of solutions that make sense, said the New Jersey league.

In CU READ, "the crux of the survey is to utilize the results to work constructively with regulators on both how to improve the exam process and find areas ripe for regulatory relief, as well as give credit unions tools to deal with emerging issues," said New Jersey league President/CEO Paul Gentile. He noted this is "not a 'gotcha' tool against regulators. It's also helping us identify what is going very well in exams and could be broadened out."

The similar national CUNA/leagues survey is live online (use the link). The deadline for completing the survey is Dec. 15, but more time to complete and file may be made available to credit unions dealing with the holiday rush.

"Advocating on behalf of credit unions to improve the examination process is one of the highest priorities of both CUNA and the leagues," said CUNA President/CEO Bill Cheney. "A firm grasp of the current state of credit union examination process is needed to ensure that credit unions are effectively represented in discussions with the NCUA and state supervisory authorities."

The nationwide survey covers such topics as the length of the on-site exam, how satisfied the credit union was with the exam and results, and which problem areas, if any, were noted by the examiner. It also asks questions to gauge how the credit union perceived the examiner's performance and the exam process, and asks what are the biggest issues credit unions would like CUNA and their leagues to focus on to reduce reg compliance burdens.

The exam results will serve as a tool for CUNA and the leagues to work constructively with regulators on improving the examination process and ensuring consistency in how examiners apply regulations.

November bankruptcies drop 12 from last year

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ALEXANDRIA, Va. (12/11/12)--Total U.S. bankruptcy filings for November decreased 12% from November 2011, the American Bankruptcy Institute (ABI) said.

November bankruptcy filings--commercial and noncommercial--totaled 86,946, down from the 98,534 filings registered in November of last year, according to data provided by Epiq Systems.

Total commercial filings were 4,199--a 19% decrease from the 5,216 filings during the same period in 2011.

The 82,747 total noncommercial filings for November were an 11% drop from last November's noncommercial filing total of 93,318.

In the aftermath of a sustained drop in consumer spending on credit, November continued the trend of declining bankruptcies, said ABI executive director Samuel Gerdano (Subprimenews.com Dec. 10).

The U.S. is on track to see the lowest total new bankruptcies since before the financial crisis in 2008, he added.

Last month's 664 commercial Chapter 11 filings were a 10% rise from the 601 commercial Chapter 11 filings in November 2011. Last month's total commercial Chapter 11 filings also constituted a 23% increase from the October total of 542. Total, commercial and consumer bankruptcy filings in November also declined from October.

Total November filings were down 14% from the October's total of 101,307. Commercial filings dropped 13% in November from the October total of 4,800, and noncommercial filings decreased 14% from 96,507.

The average nationwide per capita bankruptcy-filing rate through the first 11 months of 2012 was 3.91 total filings per 1,000 per population.

Average total filings per day in November were 2,898, compared with the 3,285 total daily filings in November of last year--a 12% decline.

N Y CUs take steps to grow Hispanic membership

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DES MOINES, Iowa (12/11/12)--Four New York credit unions are taking steps to serve Hispanic members in the inaugural Hispanic Member Growth Strategy Program, a program of the Credit Union Association of New York (CUANY) and Coopera.

Coopera, a firm that helps credit unions reach the critical Hispanic market, will provide resources and counseling to New York credit unions working to grow their Hispanic membership in the program.

The program helps small (assets under $25 million) and mid-sized ($25 million to $500 million in assets) New York credit unions expand their business opportunities by serving the Hispanic market, according to Coopera CEO Miriam De Dios.

"Today, 17% of New York's population is Hispanic," De Dios said. "And by 2025, one in five New York residents will claim Hispanic heritage. Because it is a largely underserved group, yet one of the largest and fastest-growing demographics in America, helping Hispanic members navigate the U.S. financial system is important to the overall credit union mission."

Through the program, Coopera works with the credit unions to identify Hispanic outreach opportunities in their neighborhoods and create affordable banking alternatives to meet the needs of this community. Credit unions participating in program include:

  • Cooperative FCU of Syracuse;
  • Entertainment Industries FCU of New York City;
  • Bridgeway FCU of Poughkeepsie; and
  • MSBA Employees FCU of Rockville Centre.
Compared with other U.S. ethnic groups, the Hispanic population is very young, according to Allison Barna, director of the New York Credit Union Foundation and Community Development for the association.

"New York credit unions looking to lower the average age of their membership must consider investing in these members as a part of their overall efforts," Barna said, noting that the program "gives them access to Coopera's expertise, including identifying outreach opportunities within their neighborhoods, as well as creating affordable banking alternatives to meet the needs of Hispanic members within their community, at a significantly reduced price."

Wright-Patt CU sees record year in home loans

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DAYTON, Ohio (12/11/12)--Fairborn, Ohio-based Wright-Patt CU has experienced a recording year mortgage loans--and gained a greater market share in the process--thanks in part historically low interest rates and an improved home-sale market.

Through the end of October the $2.5 billion asset Wright-Patt CU closed more than 3,000 loans for refinances and new home purchases for the year--a 46% increase from the prior year, said Tim Mislansky, chief lending officer of Wright-Patt (Dayton Daily News Dec. 8).

Wright-Patt CU is have a better year than it expected because it is taking market share from other financial institutions, Mislansky said.

Wright-Patt CU grew to be Dayton's third largest mortgage lender in 2011, according to analysis of Home Mortgage Disclosure Act data provided by Mislansky. Four years ago, Wright-Patt was the eighth-largest lender in the Dayton area.

The growth caused Wright-Patt CU to add about 20 mortgage lending jobs this year, bringing its mortgage staff to 91 employees. It has 10 positions open.

About 2,000 of Wright-Patt CU's 3,000 home loans were refinances. Purchase volume, about 1,000 loans, increased 53% this year from 2011.

Low rates also have helped Day Air CU of Kettering, Ohio, have a record mortgage-lending year, according Bill Burke, the credit union's president/CEO.

There has been a lot of refinance activity because of low rates, but Burke likes to see purchase activity because it means people are buying houses, he told the Daily News.

While credit unions built their reputation on car loans, Wright-Patt has made efforts to establish a presence in the Dayton mortgage market, Mislansky said.

The credit union partners with local housing programs such as the federal Neighborhood Stabilization Program and the HomeOwnership Center of Greater Dayton. It was a presenting sponsor of this year's Eco-Rehabarama home show in Huber Heights with the Home Builders Association of Dayton. In June, Wright-Patt and Irongate Inc. Realtors of Centerville, a real estate firm, formed a new mortgage company making Wright-Patt the preferred home lender to Irongate's clients.

Mich CUs gain market share ramp up lending

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LANSING, Mich. (12/11/12)--Credit unions are increasingly becoming the financial service providers of choice for Michigan consumers, according to an analysis of third-quarter data by the Michigan Credit Union League & Affiliates (MCUL).

Michigan has 4.53 million credit union members, a 1.3% increase since the end of 2011, according to the National Credit Union Administration. With 84,000 new members so far this year, Michigan credit unions are on their way to the largest annual increase in at least eight years, MCUL said.

For the 12-month period ending Sept. 30, deposits at Michigan credit unions increased by more than $2 billion or 5.6%. Credit unions now have 18.6% of the state's deposit market share, compared with 16.2% in 2009, according to an analysis of data for all Federal Deposit Insurance Corp.-insured bank branches operating in the state. That represents a significant shift of business away from banks and toward credit unions, as total deposits at credit unions over that time period are up more than $6.1 billion or 19.5%, MCUL said.

The third-quarter data also show other high points:

  • Net worth at Michigan's credit unions is back up above 11%, from 10.82% one year ago;
  • Return on assets is up to .97%, compared with .66% one year ago; and
  • Loan delinquencies are down to 1.13% from 1.48% one year ago.
"Michigan consumers are turning to credit unions in record numbers to take advantage of the better rates, lower fees, and superior financial products and services we offer," said MCUL CEO David Adams.

"Credit unions have developed and cultivated innovative ways to reach out to build relationships with members and to help the people of the state prosper, and that's why more and more Michigan consumers trust credit unions with their hard-earned money," Adams said. "In addition to financial counseling, credit unions offer programs such as SaveUp and Save to Win, which reward members for saving their money and paying down debt. This approach is what sets credit unions apart."

Overall lending at Michigan credit unions rose by 1.4% in the third quarter, the highest increase in at least nine quarters. In particular, the third quarter of 2012 was the best quarter in three years for new-auto loans at credit unions, which rose by 2.4%. Used-auto-loan growth also was strong at 2.7%.

Michigan credit unions also are gaining auto-loan market share, according to data from Experian AutoCount, which tracks loan data registered with the Michigan Secretary of State. In the third quarter 2011, credit unions accounted for 10.4% and 35.2% of new- and used-auto loans, respectively. In the third quarter of 2012, those figures rose to 15.7% and 37.8%, respectively.

Year-to-date mortgage loans issued by Michigan credit unions are nearly double where they were this time last year, totaling $3.2 billion, as consumers continue to refinance with historically low interest rates.

Michigan credit unions' member business loans were up 4.8% in the third quarter, far ahead of the national rate of 2.3%, MCUL said.

"Credit unions could do even more to help if Congress would act on S. 2331, the Small Business Lending Enhancement Act, which would raise the current cap on how much credit unions can lend to small businesses," said Adams. "It's critical for Congress to pass this bipartisan, commonsense legislation now so our nation's small businesses can create jobs and renew our economy's vitality."

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25% so that more loans could be made to small businesses. CUNA and credit unions say that increasing credit unions' MBL cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

CUs loans help 670 members with Sandy recovery

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WARMINSTER, Pa. (12/11/12)--Freedom FCU, with $574 million in assets, Warminster, Pa., has helped 650 members affected by Hurricane Sandy by issuing more than $650,000 in low interest rate loans.

Members could borrow up to $1,500 and were approved quickly so they could begin to recover from the storm, the credit union said.

"Words can't express enough my gratitude for this service at such a time like this," said Janice Jones, a Jefferson Hospital employee said. "Thank you again for all that you have done."

Radio group grows thanks to CU MBL

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LONGVIEW, Wash. (12/11/12)--Fibre FCU, Longview, Wash., recently provided a member business loan (MBL) that helped a local radio company add a third brand.

Joel Hanson literally grew up in the radio business. He was just a year old when his family put KLOG on the air in Kelso, Wash. KLOG's brand of "hometown news, home team sports and classic hit songs" remains popular, and is now the older sibling to two additional radio brands.

The family launched KUKN--a country music station--in 1990, and added a third radio brand, "The Wave, with the assistance of the $742 million asset credit union's MBL.

The Wave is the company's fastest growing station, Hanson told the Northwest Credit Union Association (NWCUA) (Anthem Recap Dec. 7).

The family business has a connection with many of the area's credit unions, Hanson said. The loan process with Fibre was seamless, he added.

"I was able to really simply, without a whole lot of work, explain what we were trying to achieve with the station, and obviously we had good track records with our previous stations." Hanson said.

MBLs help dreams comes true, said Angie Leppert, Fibre marketing specialist. "It's what puts food on the table for their families," she told NWCUA. "It allows them to have employment opportunities for our community."

Fibre, along with the Credit Union National Association (CUNA) and credit unions nationwide are lobbying Congress for passage of S. 2231 and H.R. 1418, bills that would increase credit unions' MBL cap to 27.5% of assets from 12.25%. A Senate vote on S. 2231, known as the Small Business Lending Enhancement Act, is possible during the current lame-duck session, which ends Dec. 21.

CUNA and credit unions say that increasing the cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.