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90 of consumers unfamiliar with ATM skimming

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AUSTIN, Texas (12/16/10)--Nearly 90% of consumers surveyed are not familiar with ATM skimming, indicating a need for education about potential threats at ATMs, according to a Wincor Nixdorf, an information technology solutions provider for retailers and retail banks. The survey also learned that all things being equal, 63% of consumers polled would switch to another bank if it offered a more advanced ATM security. The Austin, Texas-based company, which offers anti skimming services and other advanced security services, polled U.S. consumers about their knowledge and preferences and about trends around ATM security. Most polled were unaware of popular fraud tactics such as ATM skimming, where con artists place a device at the card entry slot on an ATM to steal personal identification numbers and card information. Skimming costs roughly $350,000 in monetary losses a day and is occurring five times more frequently this year, Wincor Nixdorf, said, citing Secret Service statistics. While 89% reported being a victim of an ATM fraud, nearly all expressed concern about fraud at the machines. "The ATM has become the primary customer touch point for many financial institutions, so it is critical that retail banks offer the most sophisticated security software to protect their customers," said David Hadesty, vice president of product management for Wincor Nixdorf's U.S. banking division. "There is real opportunity for banks to leverage the ATM channel to grow revenue, increase customer retention and create the optimal banking experience for the user," said the survey report's executive summary. "Consumers are truly craving automation in their financial transactions--preferring any feature and functionality that saves time and money." It also said financial institutions "need to embrace self-serve, not teller, interactions, and that institutions that disregard the growing preference for the self-serve model are risking losing customers. Other findings:
* Consumers surveyed prefer to interact with an ATM than a teller; * More people preferred to make their deposits at an ATM than with a teller; * Cash and check deposit functionalities were key to the ATM; * Most with envelope-less deposit capability said the capability is important, and most in this group said they would use the feature at least three times per month.
The company polled 200 U.S. consumers ages 16 to 64. Seventeen percent of the respondents were credit union/virtual bank members/customers, 63% were customers of large national banks and 20% of regional/community banks.

CU System briefs (12/15/2010)

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* SALT LAKE CITY (12/16/10)--Mark Kennedy, Sen. Orrin Hatch's (R-Utah) new chief of staff, was not Hatch's first choice for the position. His first choice was actually Scott Simpson, president of the Utah Credit Union Association. Simpson was a former Hatch staffer. Simpson told The Deseret News (Dec. 14) that he respectfully declined the position. "Fundamentally, it just came down to a family decision--a personal decision--displacement," he said … * BETHPAGE, N.Y. (12/16/10)--Bethpage FCU has agreed to pay $2.1 million for the naming rights to a minor league baseball stadium that is home to the Long Island Ducks. The 10-year-old 6,000-seat stadium was first called Citibank Park and then Suffolk County Sports Park. Last year, the county failed to sell the naming rights and the park was nameless. The $3.9 billion asset credit union has named the park "Bethpage Ballpark." Bethpage FCU owns the naming rights until 2020 (Newsday.com Dec. 15) … * PENSACOLA, Fla. (12/16/10)--David White, former general manager of the Pensacola (Fla.) Federal Employees CU (now Pensacola FCU), died Dec. 9 at his home in Pensacola. He was 80. White was a federal examiner for the Bureau of Federal Credit Unions for five years before becoming general manager of Eglin FCU, a position he held for 17 years. He retired in 1995 after serving 16 years as general manager of Pensacola Federal Employees CU. He is survived by his wife, two children and a grand-daughter (Pensacola News Journal Dec. 15) …

Cause marketing and CUs A perfect match

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MADISON, Wis (12/16/10)--Cause marketing is a term that may be new to some in the credit union industry, but the concept is one that credit unions know all about—and one that suits them perfectly. During a recently held webinar on cause marketing co-hosted by Credit Unions for Kids and CO-OP Financial Services, Tom Woerner, president and founder of the marketing firm Vergrandis, New York, defined cause marketing as “a long-term commitment that links the brand with a social issue in mind of the consumer while raising awareness and funds for a worthwhile cause.” Examples of mainstream cause marketing are the yellow LIVESTRONG bracelets that support the Lance Armstrong Foundation. That effort was led by Nike. Yoplait’s Save Lids for Lives, where the yogurt maker donates 10 cents to the Susan G. Komen for the Cure for every pink lid customers send in, is another example. In the credit union industry, perhaps the best-known cause marketing initiative is Credit Unions for Kids, which is affiliated with the Children’s Miracle Network Hospitals in raising funds for 170 children’s hospitals. Why is cause marketing so relevant today? Marketing has changed, Woerner explained. Consumers have more options than ever in the products they choose, and they have a voice though social media. “Marketers realize that their communication strategy has evolved into more an ongoing conversation with the consumer as opposed to a series of one-way bursts,” Woerner said. “Marketing is a social activity.” And just as people must understand the needs of others to develop relationships, organizations must contribute to the needs of society to be relevant to today’s consumers. As proof, Woerner offered data from the recent Cone Cause Consumer Behavior Research Study:
* 85% of Americans say they have a more positive image of a product or company when it supports a cause they care about; * 85% say it is acceptable for companies to involve a cause in their marketing (compared with 66% in 1993); *79% say they would be likely to switch from one brand to another, when price and quality are about equal, if the other brand is associated with a good cause. That compares with 66% in 1993; and * 64% recommended a brand that supported a cause to a friend.
Woerner said credit unions are a natural fit for cause marketing because it’s a natural fit for their core value proposition of people helping people. “You might say it’s in your DNA,” he said. (Editor’s note: This part one of a series of articles News Now is featuring on credit unions and cause marketing. See related story “CU4Kids, CMN Hospitals logos to change Jan. 1” in the News Now system section.)

Aussie lawmakers open door for CUs

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SYDNEY, Australia (12/16/10--Wayne Swan, Australia’s national treasurer, would like to see his country’s “big four” banks become more competitive. To make his point, Swan last week opened an account at his local credit union in Toombul, north of Brisbane, demonstrating his belief that credit unions can offer consumers better service and more competitive rates than banks.
Click to view larger image Australian credit unions, such as Community First Credit Union, located in the Sydney suburb of Lidcombe, would be able to grow their mortgage portfolios under new regulations.
Swan’s gesture preceded the anticipated issuance this week of new regulations that would give Australia's credit unions and building societies greater access to capital. The changes would allow smaller financial services providers, including financial cooperatives, to become a more competitive alternative to the four largest banks. Greater capital access for credit unions will mean better rates for Australia’s home mortgage market, according to World Council of Credit Unions (WOCCU) Director Louise Petschler, chief executive of WOCCU member Abacus Australian Mutuals, which represents credit unions and building societies in Australia. “If we got 20% of the home-lending market, you would see a more competitive market and banks would see their margins eaten away,” Petschler told the Sydney Morning Herald. “We need diversified funding, and there needs to be more liquidity in the wholesale market.” Swan’s move echoes the government’s desire to apply more competitive pressure on Australia and New Zealand Banking Group, Commonwealth Bank of Australia, National Australia Bank and Westpac Banking Corp. The four banks are known as the “four pillars,” reflecting a government policy that forbids mergers among the four to create even larger--and presumably less competitive--banks. By empowering smaller financial institutions, including credit unions, through new regulations and increased access to capital, lawmakers hope to create a fifth pillar that will provide better rates and services to consumers, said WOCCU. Government policy decisions during the global economic crisis deemed necessary to support Australia’s financial system had inadvertently reduced competition in the banking and financial sector. The new measures are designed to correct the imbalance. In support of the initiative, the government is expected to reopen a guarantee program on a limited basis for credit unions and other smaller institutions. The government guarantee would put smaller lenders in better position to raise funds in the wholesale market with the goal of increasing their share of home mortgages. The government also is considering injecting more capital into the securitization market, which currently stands at US$15.7 billion, enabling non-bank lenders to raise funds at costs similar to those of the large banks. “The Australian mutuals sector believes it is ready for a new era in banking, and there are a number of reasons why,” said Daniel Newlan, senior advisor for policy and public affairs for Abacus. “The average credit union holds a capital ratio in excess of 16%, well above the average 11% held by retail banks. A credit union in Australia is backed by the federal government's AU$1 million retail deposit guarantee, just like the banks, and they are regulated by the same rules, making them just as safe.” The government’s new initiative comes in the middle of the first national marketing effort launched by Abacus earlier this year on behalf of the country’s credit unions. The campaign is designed to increase visibility and use of the country’s 104 credit unions and nine building societies, which currently hold US$72 billion in assets and serve 4.6 million members. The marketing initiative aims to grow the financial cooperative sector and increase financial cooperatives' share of the home mortgage market from less than 10% to 20%.

Arizona now has anti-fraud program

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PHOENIX, Ariz. (12/16/10)--Arizona Credit Union League & Affiliates has joined credit unions in a growing number of states to participate in Consumer Federation of America (CFA) program that seeks to protect consumers from fake check scams. The league has joined with Arizona Attorney General Terry Goddard and the Arizona Bankers Association to distribute a CFA-created brochure, called “Don’t Become a Target,” to every consumer who deposits a check or money order of $1,000 or more or withdraws $1,000 or more. Six banks and seven credit unions in Arizona have agreed to participate. About a dozen states are participating in the campaign. Credit unions are active in all of them.

Assembly speaker signs up as key muni-deposit sponsor

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TRENTON, N.J. (12/16/10)--New Jersey Assembly Speaker Sheila Oliver (D-34) has added her name as prime sponsor for legislation to reform the state's 40-year-old municipal deposits law to enable local government entities to include credit unions when considering potential depositories. According to the New Jersey Credit Union League, the measure's original sponsor, Assemblyman Fred Scalera (D-36), resigned his legislative post to accept a position in the private sector. The league worked to recruit an additional prime sponsor to replace Scalera on the bill (The Daily Exchange Dec. 15 and Dec. 13). The legislation passed the state Senate in June. The Assembly bill, which has two prime sponsors and eight co-sponsors, remains active, pending consideration in the Financial Institutions and Insurance Committee, the league said. Oliver's sponsorship is important because she presides over the lower house of the state Legislature and is among the state's most influential elected leaders, said the league.

CU4Kids CMN Hospitals logos to change Jan. 1

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WASHINGTON (12/16/10)--Credit unions working with Children's Miracle Network Hospitals through Credit Unions for Kids will need to update their logo materials come Jan. 1, according to the American Association of Credit Union Leagues (AACUL). The change is because Children's Miracle Network has been renamed as Children's Miracle Network Hospitals (CMN Hospitals). Credit Unions for Kids' (CU4Kids) promotional materials incorporate the CMN Hospitals logo, so those materials also will need changed. The new logos are similar to the current logos, but credit unions should send out updated materials to reflect the change, said AACUL. The name change was announced in mid-November at a celebration in Orlando, Fla. AACUL has made available branding guidelines for the credit unions' use of the new logos and names. The guidelines tell credit unions how to use signature color variations for approved logo usage, the correct ways to refer to the organizations as proper nouns and the correct abbreviated references. Children's Miracle Network Hospitals raises funds for more than 170 children's hospitals throughout the U.S. Credit unions are the CMN Hospitals' third largest corporate sponsor (WalMart and Costco are in the Nos. 1 and 2 spots). Credit unions have raised more than $80 million through the Credit Unions for Kids program since the program began in 1996. (See related story in News Now's System section on "Cause marketing and CUs: A perfect fit.) For more information, contact Joe Dearborn, senior director, Credit Unions for Kids at jdearborn@childrensmiraclenetwork.org or at 480-614-9673.