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CU System briefs (12/21/2011)

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  • DENVER (12/22/11)--CU Direct Connect (CUDC) has hired Blair Korschun as president/CEO, according to David E. Maus, chairman of the CUDC Board of Managers and CEO of Public Service CU, Denver (Business Wire Dec. 21). Before joining CUDC on Dec. 1, Korschun was divisional president of Ascension Capital Group, a Dallas subsidiary of Encore Capital Group and a bankruptcy loan servicer for consumer auto and mortgage portfolios. He also has served four and a half years with Chase Auto Finance, five years with Capital One, and 10 years in finance and operation roles in the beverage industry, including PepsiCo. CUDC is a credit union service organization that provides lending support to credit unions and auto dealerships …
  • DES MOINES, Iowa (12/22/11)--Des Moines-based Financial Plus CU  (FPCU) is the first financial institution to use Dwolla, the online, mobile, social and location-based cash payments platform, for charitable donations to inspire a boost in community giving. FPCU's is aiming to raise $1,000 in a year-end effort for Children's Miracle Network Hospitals. By allowing consumers to donate from their homes, offices, or anywhere, FPCU said it believes donations will increase. This is the first time FPCU has incorporated a way to give online.  It has been a sponsor of the children's hospital network for many years, working with the Iowa Credit Union League and the national Credit Unions for Kids fundraising efforts …
  • RICHMOND, Va. (12/22/11)--Virginia CU President/CEO  Jane G. Watkins has been presented the J. Curtis Hall Award by the Virginia Council on Economic Education (VCEE). The annual award recognizes a community leader devoted to the cause of economic literacy in Virginia schools. It is named for a retired professor and former dean of the VCU School of Business, who founded the VCEE and devoted his life to enhancing the quality of economic education in the state.  Watkins was recognized at the organization's annual board meeting in December. She has been on the VCEE board since 2001. A financial supporter of the VCEE for many years, the credit union is a sponsor of VCEE's high school initiative and Governor's Challenge in Economics and Personal Finance …

California CUs gained assets shares in 3Q

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SACRAMENTO, Calif. (12/22/11)--California's credit unions made gains in assets and shares while loans were down during third quarter, according to statistics from the state's Department of Financial Institutions (DFI).

Assets rose 1.2% to $72.7 billion from $71.8 billion one year ago, said DFI's Quarterly Report. Shares, which were at $62.6 billion as of Sept. 30, rose 1.3% from $61.8 billion in third quarter 2010.

Loans dropped 7.1% for the period to $40.6 billion from $43.7 billion. Net worth was $7.1 billion, up 6.9% from $6.7 billion a year ago. As a result, California his caused the net worth to asset ratio to increase to 9.82% from 9.30% one year ago.

Allowance for loan losses totaled $1.2 billion, down 12.1% from $1.4 billion for third quarter 2010. Delinquent loans dropped 20.1% to $919.5 million, down from last year's $1.2 billion. Delinquent loans as a percentage of total loans were 2.26% as of Sept. 30, compared with 2.63% one year ago.  Other real estate owned was $147.1 million--an increase of roughly $16.7 million, or  12.8%, from last year's $130.4 million.

Other key statistics:

  • Net margin to average assets was 4.20%, down from 4.38% one year ago;
  • Provision for loan losses was down 46.8% to $315.3 million from $593.1 million;
  • Net income as of Sept. 30 was up 70.4% from $223.9 million for the first nine months of 2010 to $381.6 million for the same period in 2011.
  • The number of credit unions decreased  4.2%--to 158 from 165.

Year ends with more mergers in the works

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MADISON, Wis. (12/22/11)--As the year ends and a new one begins, several credit unions have mergers in the works, with some timed as a transition as long-time credit union leaders retire.

In Kalamazoo, Mich., the $85 million asset Allegis CU is completing a merger with St. Joseph, Mich.-based $316 million asset Honor CU, just as Allegis CEO John Sink retires after 12 years at the helm and 40 years in the financial services industry, said the Michigan Credit Union League (Michigan Monitor Dec. 19).

Allegis' members voted Dec. 8 to approve the merger, which awaits approval from  the National Credit Union Administration (NCUA). The merger is expected to be complete in early 2012.

Sink decided to retire after visiting his home in Florida, saying he is ready to relax. Honor CU President Scott McFarland said Sink will do some consulting work as Honor evaluates other expansion opportunities.

Other mergers in the works:

  • The $370 million asset Kellogg Community FCU, Battle Creek, Mich., will merge with the $9 million asset St. Joseph Valley, Three Rivers, Mich. Kellogg will be the surviving credit union.
  • Winthrop (Maine)  FCU, a $55.8 million asset credit union, will merge into $561 million asset Webster First FCU, Worcester, Mass. The merger will become final Dec. 31. NCUA approved the merger Oct. 26 and members approved the deal on Dec. 14 (telegram.com and Banker & Tradesman Dec. 15) .
  • Missoula, Mont.- based Montana First CU members were scheduled to vote this week on a merger with Spokane, Wash.-based Horizon CU (KPAX.com Dec. 12). Montana First , which has two Missoula branches, would keep its name and employees, and a board member would join the Horizon CU board. If approved, the merger would be complete in early to mid-spring. Montana First has $66 million in assets, while Horizon has $421 million in assets.
  • Bluestone FCU,  Eagan, Minn., with assets of about $21 million, merged Dec. 1 into Associated Healthcare CU (AHCU),  a $55 million asset credit union in St. Paul, Minn. Jerry Ziegler is president/EO of the merged credit union, which will keep AHCU's name. Judy Root will continue coordinating merger activities until she determines her retirement date. The Eagan branch will still be identified as the Bluestone branch of AHCU, said the credit union's website. The credit union's website attributed the merger to a combination of slow growth, loan losses and added regulatory expenses that limited Bluestone's ability to provide a full range of financial services and resulted in lower dividends.

Texas league teams with network to spread co-op news

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FARMERS BRANCH, Texas (12/22/11)--The Texas Credit Union League (TCUL) will work with the Texas State Network (TSN) to create a radio commercial that tells the public about the strength of credit unions, in support of the International Year of Cooperatives.

The United Nations officially launched the International Year of Cooperatives on Oct. 31. In 2012, people worldwide will celebrate cooperatives--a business model that puts people first, innovates to meet member need and provides local service while being part of a global network (LoneStar Leaguer Dec. 21).

The commercial will air one day per week the weeks of Jan. 2 and Jan. 9, between the hours of 6 a.m. and 7 p.m. Also during this two-week period, TCUL will receive bonus fill in other TSN and CBS programming-- when available. The TSN News Network has 119 radio stations in 90 markets statewide. TSN's reach for its news network is more than three million people 18 years of age and older.

The 30-second commercial has an advertising value of $12,000. However, TCUL negotiated a price of $5,000. The radio commercial is just one element of TCUL's International Year of Cooperatives campaign. To listen to the commercial, use the link.

To learn more about the International Year of Cooperatives about the campaign, use the link.

CU Cooperative Branching pays 6 dividend

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HARAHAN, La. (12/22/11)--Member-owners of CU Cooperative Branching LLC (CUCB), Louisiana's shared-branching credit union service organization, will receive a 6% dividend, payable Dec. 31.

CUCB also will offer transaction-tiered volume discount pricing beginning Jan. 1 (Louisiana Credit Union League eNews Dec. 21).

Since its inception in August of 1992, CUCB has grown into a network with more than 120 statewide locations and more than 4,400 locations worldwide to service shared branching credit unions' members.

"Because of the cooperative spirit amongst credit unions, CUCB has become an efficient network that has achieved great financial success, offering an incomparable service to members," Rod Taylor, president/CEO of Barksdale FCU, Bossier City, La., and CUCB chairman.

CU helps members who lost jobs last week

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LIBERTY, S.C. (12/22/11)--Pickens (S.C.) FCU is helping workers who lost their jobs last week at the nearby Liberty Denim plant by offering them loans up to $1,200.

The loans are earmarked to cover living and holiday expenses, the credit union said (IndependentMail.com Dec. 20).

When the plant was shuttered Friday, it left 185 employees without jobs days before the holidays. Employees were given a two-day notice before the plant closed.

The $17 million asset credit union participated in a local job fair Tuesday to provide free counseling about money and to help laid-off workers learn about loan-refinancing options.

CUNA closed Fri.-Mon. no iNews NowI

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WASHINGTON and MADISON, Wis. (12/22/11)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association (CUNA) will be closed in observance of the holiday on Friday and Monday.

News Now will not publish editions on Friday and Monday, but will resume regular editions on Tuesday.

Lakota reservation hopes to get first CU

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KYLE, S.D. (12/22/11)--A proposed credit union that will serve the Lakota tribe on the Pine Ridge Reservation in South Dakota has received preliminary approval.

The Pine Ridge Reservation covers about 3,500 square miles and is home to about 40,000 Lakota Indians, but lacks a traditional financial institution (Rapid City Journal Dec. 21).

The proposed Lakota FCU would offer secured and unsecured personal loans; savings accounts; ATM cards with access to no-fee ATMs in each of the reservation's nine reservation districts; direct deposit for paychecks; and low-fee check cashing and money order services.

If approved, Lakota FCU would be chartered and federally insured by the National Credit Union Administration.

The credit union's sponsor is Lakota Funds, a certified Native Community Development Financial Institution under the U.S. Treasury Department.  Since 1986, Lakota Funds has made small loans to help start and grow businesses. Its loan portfolio exceeds $4.4 million.

Earlier this year, Lakota Funds received a $149,560 technical assistance grant as part of the Treasury Department's Native American Community Development Financial Institution Assistance Program (News Now Aug. 25).

Tawney Brunsch, executive director of Lakota Funds, told the newspaper she has received commitments for $600,000 in deposits--including funds from local businesses--for the credit union, enough to ensure stable cash flow.

Brunsch said she is optimistic NCUA will approve the credit union in the first quarter of 2012.

Illinois state CUs get second 4Q reg fee credit

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NAPERVILLE, Ill. (12/22/11)--Illinois state-chartered credit unions will receive a credit of nearly $1.257 million toward state regulatory fees for the fourth quarter of 2011.

The credit is expected to be slightly less than the total 2011 fourth-quarter billing for credit union regulatory fees, said the Illinois Credit Union League (ICUL). 

Credit unions will receive the credit as a result of legislation to implement the court-approved settlement of a regulatory fee case filed by the league against then-Gov. Rod Blagojevich in 2004.

The settlement was signed into law by Gov. Patrick Quinn in 2009.

Under the terms of the settlement, Illinois state-chartered credit unions received a $6.2 million cash payment from the state in June 2009. The payment represented a credit for the overpayment in regulatory fees made under the Blagojevich administration's fee escalation and transfer ("sweep") budgetary arrangement adopted by the state in its fiscal years 2004 through 2006.

The 2009 legislation that implemented the settlement also accomplished two other goals, according to Stephen Olson, ICUL executive vice president and general counsel.  First, it codified a rate reduction in regulatory fees. Second, the 2009 legislation reduced the Credit Union Fund margin that triggers a credit back to Illinois state-chartered credit unions.

Regulatory fees are deposited into the Credit Union Fund to offset the ordinary administrative and operational expenses of the Department of Financial Institutions' Credit Union Section in supervising state-chartered credit unions.

The fund is structured as an operating account, not a savings account, Olson said. To ensure that objective is met, the legislation reduced the margin level to 25% from 50%.  When the balance in the Credit Union Fund at the end of a state fiscal year exceeds 25% of the expenses incurred by the state in administering the Illinois Credit Union Act and related laws, the excess must be credited to credit unions that paid the fees. 

"As we stated in connection with last year's regulatory fee credit, we believe the prosecution and favorable settlement of the regulatory fee case is an excellent example of the value of league affiliation," said Dan Plauda, ICUL president/CEO. "We are particularly pleased the settlement terms we negotiated with the State in 2008 now provide Illinois state-chartered credit unions with an additional financial benefit.  We know it comes at a good time, given the continuing difficult economic and regulatory environment in which our credit unions are operating."

First Tech CEO to lead BECU on Oaklands retirement

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TUKWILA, Wash. (12/22/11)--BECU in Tukwila, Wash., announced Tuesday it had chosen Benson Porter to be its new president/CEO, beginning in April. Porter replaces retiring CEO Gary Oakland, who led BECU for 25 years.

Porter has worked for the Washington State Senate Banking Committee and the state's Division of Banking. He spent another 14 years in senior management roles at KeyBank and Washington Mutual in Seattle before joining the credit union movement as CEO of Addison Avenue FCU, Palo Alto, Calif., which later merged with First Tech FCU.

Oakland was instrumental in developing the National Association of State Credit Union Supervisors' Credit Union Advisory Council and later was its chairman and director for many years.

Oakland joined BECU in 1980 and was named CEO in 1986. Under his leadership, BECU has grown into one of five largest U.S. credit unions, with total assets of more than $9.8 billion. Oakland will remain at BECU through mid-2012 to ensure a smooth transition, the credit union said.