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CU System Archive

CU System

Christian Science Monitor Encourage use of CUs

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BOSTON (12/19/08)--The government should encourage the use of credit unions, the Christian Science Monitor said Thursday in an editorial piece titled, “A credit card where it’s due.” The Monitor also said the government should launch a thrift campaign for adults. And: “Now’s a good time for parents to teach children about thrift by giving them savings accounts,” the newspaper added. The Monitor’s op-ed piece was written in support of new credit card rules that were enacted Thursday by the Federal Reserve Board. One of the provisions of the rules aims to stop credit card companies from practicing universal default and make monthly statements easier to read, the newspaper said. For the full article, use the link.

Pa. Supreme Court reinstates community charter for CU

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HARRISBURG, Pa. (12/19/08)--The Pennsylvania Supreme Court Thursday reinstated Belco Community CU’s seven-county community charter for central Pennsylvania, reaffirming the Pennsylvania Department of Banking’s initial decision that was overruled in state court. In addition, the Supreme Court also remanded the case back to state court on a constitutional issue regarding the bankers’ rights to information contained in the credit union’s application and to public debate (Life is a Highway Dec. 18). "Throughout the litigation, there’s been a legal tug of war between the bankers’ desire to obtain information from Belco Community’s application and the credit union’s desire to maintain the confidentiality of information it deemed proprietary,” said Rick Wargo, Pennsylvania Credit Union Association (PCUA) executive vice president/general counsel. The issue will be addressed by the state court sometime next year. “This is a win for Belco Community CU and all Pennsylvania credit unions,” said Jim McCormack, PCUA president/CEO. “It’s unfortunate that this isn’t the end of the road on this matter. We will continue working with the Department of Banking as the case goes back to [state court].” PCUA staff is conducting further analysis on the ruling. The $268.6 million asset, Harrisburg, Pa.-based Belco Community CU; PCUA; Department of Banking; and bank parties presented oral arguments regarding the community charter to the Pennsylvania Supreme Court on April 16.

NASCUS announces strengthening of state CU charters

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ARLINGTON, Va. (12/19/08)--Several state agencies recently signed a Regional Interstate Branching Agreement strengthening the state credit union charter’s ability to branch and serve members across state lines, National Association of State Credit Union Supervisors (NASCUS) Chairman George Reynolds (Georgia) announced Thursday. Alabama, Georgia, Florida, Missouri, Mississippi, North Carolina and Tennessee entered into the agreement to promote interstate commerce and cooperation on a reciprocal basis among state-chartered credit unions in the Southeast. Reynolds, senior deputy commissioner of the Georgia Department of Banking and Finance, has made it a priority during his NASCUS chairmanship to bolster the state credit union charter’s ability to branch across state lines, NASCUS said. Other regions of the country are working on similar agreements and additional states are considering signing the Southeast agreement. “The signing of this agreement demonstrates state regulators’ commitment to strengthening the state charter and promoting opportunities for state credit union growth,” Reynolds said. “Federally chartered credit unions can branch without limitations, so it’s important to provide state-chartered credit unions with the parity to do the same.” The regional agreements are supplementary to the NASCUS’ Nationwide Cooperative Agreement for the Supervision of State-Chartered Credit Unions Operating in a Multi-State Environment, the document most state regulators use to facilitate interstate branching. NASCUS and state regulators are currently updating and revising the Nationwide Cooperative Agreement and facilitating the development of additional regional agreements.

Schenk tells paper what lower mortgage rates mean

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MADISON, Wis. (12/19/08)--A Credit Union National Association (CUNA) economist told The Milwaukee Journal Sentinel Wednesday what lower mortgage rates will mean to consumers. The newspaper asked Mike Schenk, CUNA senior economist, how far he expects 30-year fixed-rate mortgages to fall during the next few weeks. “I don’t know about the next few weeks, but I wouldn’t be surprised to eventually see them down near 4.5%,” Schenk said. “That’s been a stated number. I think we are approaching about 5% on average, and I fully expect them to go lower yet.” Lower rates should help stimulate home building and buying, but if consumers are concerned about their job security and existing debt levels, then they are less likely to consider a big purchase, Schenk told the paper. Homeowners who can refinance will reap the biggest benefits of lower rates, he added. “If you tell me, ‘I can drop your monthly payment by $200,’ that will get my attention real fast,” Schenk said. Regarding the effect of lower rates on the foreclosure problem, Schenk told the paper, “Certainly lower rates will help in that regard.” As adjustable-rate mortgage reset, the rates won’t go up as high as people expected and might even drop in some instances. That, in turn, will allow more consumers to afford their monthly payments and remain in their homes, he added.

ICUL CUs give students 40 million in loans

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NAPERVILLE, Ill. and SPRINGFIELD, Ill. (12/19/08)--Thousands of Illinois college students can benefit this spring from $40.5 million in low-interest loans from eight Illinois credit unions. The Illinois Student Assistance Commission (ISAC) and the Illinois Credit Union League (ICUL) teamed up three months ago to offer $100 million in loans to students in a three-step deal. For the spring loan program, eight Illinois credit unions bought $40.5 million in securities issued by ISAC to finance loans for students. The Illinois credit unions are:
* Alliant CU, Chicago; * Baxter CU, Vernon Hills; * Citizens Equity First CU, Peoria; * Corporate America Family CU, Elgin; * Credit Union 1, Rantoul; * I.H. Mississippi Valley CU, Moline; * Motorola Employees CU, Schaumburg; and * Scott CU, Collinsville.
An additional $20 million will be made available in March for students attending schools on the quarter system who need funds for the spring quarter. The economic downturn and lack of liquidity, combined with rising tuition and textbook costs, have forced college students nationwide to question the affordability of the spring 2009 semester, ISAC said. “When private lenders turned their backs on Illinois students, these Illinois credit unions stood tall,” said Andrew Davis, ISAC executive director. “While college students across the nation will spend their holidays wondering if they can return to campus in January, Illinois students can focus on enjoying some family time and preparing for their spring classes.” “We view this as an investment in the state’s workforce and in strong communities,” said Dan Plauda, ICUL president/CEO.

CUNA Annual Survey to be sent to CUs

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MADISON, Wis. (12/19/08)--The Credit Union National Association (CUNA) Annual Survey will be mailed out to all U.S. credit unions at the start of January. This year CUNA has added a special question on back office services that should enable it to help credit unions to find more sources for the services. The survey is used to track new trends in credit union service offerings not covered by the National Credit Union Administration 5300 Call Report. “It is our only source of information on the number of groups in credit union fields of membership,” said Marc Shafroth, CUNA director of data and statistics. “This year we have added a section to help us answer the frequently asked question: How many members join credit unions each year and how many leave? From the 5300, we only know the net gain.” The survey allows CUNA to answer questions from the public, government agencies and elected officials. It can be completed on the Web. Use the link. “The time required to complete the survey should be under 15 minutes,” Shafroth said. “We hope that you will be able to spare this time and this way help the movement collect the information it needs to prosper.” If you have any questions about the survey please contact Marc Shafroth at 608-231-4182 or mail mark.

REAL FCU Royal CU merger will create 1 billion-asset CU

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EAU CLAIRE, Wis. (12/19/08)--A merger between Edina, Minn.-based REAL Financial CU and Royal CU in Eau Claire, Wis., will result in a $1 billion-asset credit union serving 120,000 members. The merger is expected to be completed by Dec. 31. The credit union will have 14 branches and will be ranked as the sixth largest credit union in the two-state area. REAL will continue to operate under its brand name while operations are merged into RCU over the next year. REAL members will experience no operating changes in the immediate future, and no staff reductions are expected, according to Charles Grossklaus, RCU CEO. Dan Wickstrom, REAL’s current CEO, will continue to oversee REAL branches as regional manager. RCU will offer REAL’s members new products and services early next year. RCU will be able to use REAL’s 30 Twin Cities-area shared financial service centers in the second half of 2009, Grossklaus said. REAL’s board and leadership have been considering a merger for two years. “Our realtor members were on the frontline of the housing market crisis,” Wickstrom said. “They were the first to telegraph the drop in housing transactions and their incomes.” The $30 million-asset REAL serves employees of firms affiliated with the Minnesota Association of Realtors and members of the Western Wisconsin Realtors and their families. REAL has incurred $2.5 million in unpaid loans since 2006 due to members’ declining incomes. “RCU sees great value and opportunity in the realtor markets in Minnesota and Wisconsin,” Wickstrom said. RCU has $909 million in assets.

Hampel to AP Credit cards less responsive to market

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WASHINGTON (12/19/08)--The Federal Reserve cut interest rates this week, but credit card companies may not necessarily do the same, because they are not as responsive to the market, a Credit Union National Association (CUNA) economist told The Associated Press Wednesday. Because more is left to the issuer’s discretion, credit card rates usually are less responsive to changes in market interest rates than rates for home mortgages and auto loans, Bill Hampel, CUNA chief economist, told the news agency. One reason is “floor” rates--pre-determined points below which issuers won’t let the interest rate drop, regardless of how low the prime rate falls--which are usually embedded in the fine print of card agreements, the news agency noted. If a card’s rate is based on prime plus 5%--for example--with a designated floor of 10%, the card’s rate would not drop below 10%, even if the prime rate fell below 5%, the news agency said.

WOCCU calls for distinguished service award nominees

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MADISON, Wis. (12/19/08)--The World Council of Credit Unions (WOCCU) has issued a call for nominations for the Distinguished Service Award (DSA), the highest honor bestowed by the international credit union system. Nomination forms are due March 2. DSA recognizes the global credit union movement's most distinguished achievements. The award is given to individuals and organizations that have offered exemplary service to the credit union movement and its practices. The DSA honor is not given every year; its presentation is governed by the viability and worthiness of candidates by award judges. All presentations are made at WOCCU's World Credit Union Conference, this year scheduled for July 26-29 in Barcelona, Spain. “I encourage global credit union leaders to search within their own credit union communities to see if they have candidates who have distinguished themselves while serving the needs of others,” said Ron Hance, chairman of WOCCU's awards committee, a member of its board of directors and president/CEO of Heritage Family CU in Rutland, Vt. “DSA offers a wonderful opportunity to showcase one's past credit union achievements among his or her peers,” he added. Recipients may be WOCCU and member organization officers, directors or representatives; international credit union pioneers; field technicians with a long and outstanding service record; or persons whose actions have benefited global credit union development. No more than three individual awards may be presented in a single year. Institutional recipients may be organizations or agencies that have provided financial and technical assistance to develop international credit union movements and their service infrastructures over an extended period of time. No more than one institutional award may be granted each year.

CU System briefs (12/18/2008)

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* ALBANY, N.Y. (12/19/08)--Sam Cardino, a former leader of the Credit Union Association of New York (CUANY), died Sunday. He became active in the credit union movement in 1946 by serving on the credit committee of Holy Angels FCU. In 1979, Cardino joined Erie County Employees CU and was elected to its board. In 1981, he became a Buffalo Chapter Council member. Cardino was then elected to CUANY’s board in 1990, where he served until 2001. He was awarded Outstanding Volunteer of the Year, and served with the New York Credit Union Foundation and CUANY’s governmental affairs and auditing committees. Cardino also chaired the Credit Union Legislative Action Council/Credit Union Political Action Council for New York. (Photo provided by the Credit Union Association of New York) ... * ATLANTA (12/19/08)--CDC FCU volunteers “camped out” for Children’s Healthcare of Atlanta Dec. 8 as a part of the credit union’s community service program, “Because We Care.” CDC FCU brought a camp experience to children in the hospital, providing arts, crafts and activities for patients and families. “The event shows that the main focus remains around the children and their families during a time of need in their life,” said Andy Anderson, CDC FCU marketing services manager. “We look forward to maintaining an ongoing relationship with Children’s in the coming years.” ... * MIRAMAR, Fla. (12/19/08)--About 50 volunteers from Eastern Financial Florida CU and Miramar Glades Middle School gave a makeover to one of the foster care cottages at His House Children’s Home in Opa-Locka, Fla. The credit union adopted House 30 and raised money for the project. Volunteers worked Dec. 6 to transform the basic living quarters into living space. The makeover provided a new paint job, new beds, dressers, couches, window treatments and kitchen appliances. Portraits of the cottage’s residents were framed and hung on the walls. Eastern Financial CU, Miramar, has $2 billion in assets ... * SAN BERNARDINO, Calif. (12/19/08)--San Bernardino School Employees FCU is asking students for their help to launch a youth Web page for the credit union. High school and college students 21 years of age and younger can submit a design for the page (The Press-Enterprise Dec. 10). The winner will receive $500, and the design will be used for one year ...