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CUs Prevail: County, School BoardsTake No Action on Tax Push, Says CUAD

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BISMARCK, N.D. (12/10/13)--South Dakota saw more victories for credit unions--the latest one last night--in their efforts to preserve credit unions' tax status. The Yankton, S.D., School Board made no motion and took no action on banks' resolution to eliminate the tax status of credit unions and farm credit system institutions at its meeting Monday night.
 
Last week, the Campbell County Board of Commissioners in Mount, S.D., did the same, as did an earlier meeting of the Vermillion, S.D., City Council.
 
"When we get to tell our story, we win," said Jeff Olson, vice president of advocacy and awareness of the Credit Union Association of the Dakotas. Olson and CUAD President/CEO Robbie Thompson were present at the school board meeting. Dave Wright, CEO of Services Center FCU, and a representative for Farm Credit Services spoke at the meeting on behalf of the preserving the tax status.
 
"One school board member said this is a political issue that a non-partisan board should not be involved in. Another agreed and noted that the board's Code of Ethics prohibited it from being involved with 'special interest,'" said Thompson after the meeting.
 
"So far the SDBA [South Dakota Bankers Association] has no victories on the resolution quest yet," Olson told News Now.
 
The presentations by bankers are among several in the state before municipal entities (Memo Dec. 9).
 
For example, earlier last week, the Vermillion, S.D., City Council also took no action on the issue. One council member noted that such a decision should be left up to Congress, while another said it isn't up to the council to decide whether or not a competitive disadvantage should be allowed.

Council member Kelsey Collier-Wise told those gathered that if the issue were about tax equality or getting more revenue in the tax stream, she was concerned the argument could be applied to any group with a tax exemption, including those offering tax-exempt municipal bonds (Vermillion Plain Talk  Dec. 9).
 
CUAD's Thompson and Olson have taken "a vigilant approach as the bankers' attacks continue."  Today they will attend a Brookings City Commission meeting to represent credit unions' interests. Today's meeting in Brookings will be "the big test," said Olson.
 
"Also we have sent a letter to every school board, courtyard and large city in South Dakota, and it appears the [Yankton] School Board has read it," said Thompson.  Monday, CUAD also started running radio spots in the Vermillion and Yankton area that feature an area teacher talking about the value of the credit union tax exemption. "We are running radio ads in the Brookings area this week as well."
 
Meanwhile, over the past weekend, an opinion-editorial written by Thompson and Olson on the issue appeared in the Rapid City Journal (Dec. 7) and in the Pierre Capitol Journal.

"The credit union tax exemption arises from our unique structure as not-for-profit, democratically controlled cooperatives--and that structure is unchanged over the past 100 years. The tax exemption has absolutely nothing to [do] with the 'environment,' size, growth or breadth of credit union products and services--a fact clearly spelled out by Congress in the 1998 Credit Union Membership Access Act," they wrote.
 
They labeled the banks' attacks as "nothing more than a desire to eliminate competition and ultimately force local governing entities to choose one business over another."
 
The article also included Credit Union National Association estimates that the state's credit unions provided nearly $15.8 million in direct financial benefits to the state's 251,140 credit union members during the 12 months ended this past July. The benefits are equivalent to $63 per member or $120 per member household.
 
To read the articles, or learn more about the nationwide Don't Tax My Credit Union efforts, use the links.

CUNA, CUs in the Media: Holiday Surveys, Reg Relief

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MADISON, Wis. (12/10/13)--The holiday spending survey from the Credit Union National Association (CUNA) and the Consumer Federation of America continues to be highlighted by national and regional news publications. Regulatory relief is still high on the radar, and CUNA experts provided input on the nation's economic environment.
 
The shopping season is well under way, and media outlets such as The Chicago Tribune, The Washington Times and Fox Business used the survey to support their coverage of sales during Thanksgiving, Black Friday and Cyber Monday, according to according to CUNA's weekly In The News (Dec. 6). The report collects mentions of CUNA and credit unions in the media.
 
After the release of the November jobs report and the third quarter gross domestic product (GDP) numbers, The Washington Post called on Mike Schenk, vice president of economics and statistics at CUNA, for his views. Regarding the GDP, which showed 2.8% annual growth rate, Schenk told The Post that "it's generally good news, but nothing that would cause us to alter our baseline forecast that much" (Dec. 5). 
 
The Department of Labor reported that the unemployment rate dropped to 7%--a "pretty impressive overall" number, Schenk said, given the effects of the federal government shutdown (The Washington Post Dec. 6).
 
Rose Bartolomucci, president/CEO of Towpath CU, Akron, Ohio, testified before the House Financial Services Committee on behalf of CUNA. Trade press covered the hearing on "Examining Regulatory Relief Proposals for Community Financial Institutions," which included bills that would allow privately insured credit unions to join a Federal Home Loan Bank, require federal financial regulators to assess and address regulatory duplication or inconsistency, and adjust the Consumer Financial Protection Bureau's rural designation to align with the definition used by the U.S. Department of Agriculture (News Now Dec. 5).
 
Elsewhere, credit union financial literacy education and charitable efforts were highlighted. The Wichita Business Journal featured the Kansas Credit Union Association's call for volunteers to participate in its "Money Possible: Destroy Debt" program (Nov. 26).
 
For 12 years, Maine credit unions have held a walking tour to raise awareness and funds for food pantries. Across the state, Maine Credit Unions' Ending Hunger Walking Tour was covered by the Boothbay Register (Dec. 5) and Bangor Daily News (Dec. 9).

New Report: Student Loan Debt Climbs

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OAKLAND, Calif.  (12/10/13)--The average student loan debt for those graduating in 2012 rose 25% when compared with debt for students graduating in 2008, says a new study. That is consistent with the Credit Union National Association's study earlier this year that pointed out half of high school students have no idea what college will cost.

The average debt of the 2012 graduate totaled $29,400 in student loans, according to Student Debt and the Class of 2012, a report released last week by Oakland, Calif.-based The Institute for College Access and Success (Ticas). The institute said loan balances for the Class of 2008 averaged $23,450 (MainSt.com Dec. 9).
 
In CUNA's earlier study, 83% of students said they did not know the rates and 77% didn't know the duration of terms on their expected or existing college loans (News Now April 29).

Of those aspiring to go to college, 74% said they will need both federal and private loans as well as family money and jobs to support their tuition.  Twenty-five percent expected to take out two or more student loans; 13% expected one loan; and 60% had no idea how many they would need. Of those surveyed, 22% said they will owe between $11,000 and $50,000 when they graduate while 15% expected up to $10,000 in debt and 13% said their debt would total more than $50,000 at graduation.
 
CUNA met with the Consumer Financial Protection Bureau in April and emphasized that credit unions could do more to help debt-straddled grads if the maximum credit union student loan maturity were increased (News Now April 23).
 
Ticas' study also noted that the high student debt reflected in its findings could be the tip of the iceberg because its study was limited to college institutions that voluntarily report the information and did not include for-profit colleges. Roughly 20% of high-debt public colleges and 30% of low-debt colleges who reported data last year failed to do so this year.
 
States with the highest level of debt per student were Delaware, with $33,649, and New Hampshire, with $32,698. New Mexico had the lowest debt, at $17,994, and California balances averaged $20,269, the second-lowest debt in the nation.

CU System Briefs (12/10/2013)

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  • ST. LOUIS (12/10/13)--Tonight, St. Louis credit unions can join the first monthly #TweetUpTuesday. Kenny DeShields, social media manager for Bridgeton, Mo.-based Vantage CU, proposed the idea to help spark creativity and collaboration. "Tweetups are a great way for like-minded individuals to gather and share ideas on everything ranging from business to everyday life," said DeShields (The Missouri Difference Dec. 4). The first Tweetup, which will be held at a local restaurant, will focus on holiday-themed posts for credit union Twitter and Facebook accounts. Nora Holloway, director of public relations and online community for the Missouri Credit Union Association, also will attend ...
  • AURORA, Ill. (12/10/13)--The start of a criminal trial has been scheduled for the former president of Aurora (Ill.) Firefighters CU who is charged with misappropriating $35,000 from the credit union (The Beacon News Dec. 9). Proceedings in Kane County prosecutors' case against Anne Schaal will begin on March 10. An Aurora Firefighters CU employee from 1996 until 2011, Schaal also is charged with felony theft and unlawful credit card use. Prosecutors have not cited a possible motive, but court records from her divorce settlement indicate that Schaal struggled with a gambling addiction. Schaal, who has pleaded not guilty, will next appear in court on Feb. 14 for a status hearing. Aurora Firefighters CU has $1.9 billion in assets ...
  • MANCHESTER, N.H. (12/10/13)--A man has been charged by Manchester, N.H., police with robbing a Manchester credit union branch on Dec. 3 (The Telegraph Dec. 5). Joseph Reynolds, 31, of Goffstown, N.H., is accused of passing a Triangle CU teller a note demanding money. Manchester Police, who apprehended Reynolds at a motel without incident on Dec. 4, claim to have found Reynolds in possession of a stolen truck with a stolen rifle inside. They did not, however, accuse Reynolds of displaying a weapon during the alleged incident at the credit union branch. Reynolds has been charged with robbery, burglary and receiving stolen property. Due to prior drug and burglary convictions, Reynolds was charged with the illegal possession of a firearm. He was held on $100,000 bail. Triangle CU is based in Nashua and has $505 million in assets ...
  • ATLANTA (12/10/13)--Delta Community CU announced Monday that its charity arm will donate $70,000 to 15 organizations in the Atlanta area. The grants, which range from $500 to $10,000 will be disbursed throughout 2014, with the first allotment set to be given in January. Recipients include: the Atlanta Community Food Bank; the Brain Tumor Foundation; Children's Healthcare of Atlanta's Reach Out and Read Program; the Cobb Schools Foundation; Cool Girls; Fayette Youth Protection; Georgia Health Sciences; the Georgia Center for Non-Profits; Girls, Inc.; the Joseph Sams School; North Fulton Community Charities; Rocky Mount Elementary School; Sara Harp Minter Elementary School; St. Vincent de Paul; and the YWCA of Greater Atlanta. "Out of dozens of applications, these grant winners are most closely in alignment with our goals to help families manage household finances and improve the physical and financial well-being of young people," said Jai Rogers, Delta Community CU vice president of business development. Delta Community CU is based in Atlanta and has about $3.5 billion in assets ...
  • FARMERS BRANCH, Texas (12/10/13)--Jim Free, the former president of Southern Star CU, died on Dec. 5. Also a former board member of the credit union, Free was active in Cornerstone Credit Union League through its Houston chapter--where Southern Star is located (Leaguer Dec. 9). He served as president of the chapter. Cree, an Elvis fan, was honored by Southern Star on its website with the message: "We are sad 'our Elvis' has left the building." ...

United FCU Offers Concierge Service to Support Employees

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ST. JOSEPH, Mich. (12/10/13)--Time is perhaps the most valuable resource in the work place. To help his employees make the most of their work time--and as a reward for a job well done--Gary Easterling, president/CEO of $1.5 billion-asset United FCU, St. Joseph, Mich., has enlisted concierge services for his employees.
 
"In effect this gives my people the gift of time," Easterling told News Now. "I don't know how to create more time out of the day, but this is a way to make the day a little bit easier for them."
 
United FCU has branches in six states, Easterling said, and employees in all six states have access to the onsite concierge services from Best Upon Request (BEST).
 
The services reduce stress by helping employees balance the demands of their personal and professional lives, and helps them make the most of the time at work, Easterling said. BEST's concierges can offer assistance with nearly any item on an employee's to-do list. Among the services BEST will perform: running errands for employees, picking up dry cleaning, scheduling home repairs and appointments, arranging shipping and making travel arrangements.
 
"For example, I've got a couple of employees who coach teams, and just the idea that somebody can make a run to Sam's Club pick up items for their little league teams is going to be a huge benefit for them," Easterling said.
 
With the time gained, employees can deliver better service to members, Easterling said. He is already proud of what his employees have achieved. Among the honors United FCU has recently received is the Michigan Credit Union League's 2013 Outstanding Credit Union of the Year.

Overdrafts Survey Suggests More Struggling to Make Ends Meet

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LAKE BLUFF, Ill. (12/10/13)--Banks' income from overdraft fees rose 1.6% to an annualized $31.8 billion during third quarter, suggesting that Americans had a harder time making ends meet, according to a Lake Bluff, Ill.-based financial research firm.
 
The report, by Moebs Services, said the average consumer overdrew a banking account 7.1 times, compared with seven times during second quarter (American Banker Dec. 6).  The average overdraft fee remained the same--$30 for overdrawing an account.
 
During the third quarter, consumers felt the impact from the federal government shutdown and from automatic tax increases that began in January, and as a result had a harder time balancing their checkbooks, said the report.
 
Although the fees impact consumers paying them, especially those paying higher overdraft fees at banks, the increase in revenue from the overdrafts won't significantly affect lenders' bottom line, said the report.
 
While banks have come under heat for charging higher fees for overdrafts in order to generate income, often at the expense of their customers,  credit unions take a different approach. Credit unions offer overdraft services, often at a lower cost, as a convenience to assist members who occasionally may need an overdraft buffer if they make an error in calculating their account balance.