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CU System briefs (12/05/2012)

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  • SPOKANE VALLEY, Wash. (12/6/12)--
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    Numerica CU President/CEO Carla Altepeter hit the road recently to deliver surprise donations--totaling $25,000--to five non-profit organizations around Spokane, Wash.  The Spokane Valley-based credit union donated $5,000 to each of these organizations: Our Place Community Ministries, Safety Net, Christ Clinic, Christ Kitchen and Blessings Under the Bridge. Altepeter called the trip "one of the highlights of my year," adding that she "enjoyed seeing the surprise on their faces when the Numerica team showed up to give them the check."  She noted that by hand-delivering the donations, "we were able to learn more about what they do and it allowed them to share stories with us--we were inspired by the grace with which they do their work."  In the photo, taken at the Christ Clinic check presentation, Altepeter is on the left. (Photo provided by Numerica CU) …
  • MARLBOROUGH, Mass. (12/6/12)--The Massachusetts Credit Union League unveiled its new website Monday at  "The goals established for the new site were simple and straight forward. It had to be easy to navigate and attractive," said Rob Kimmett, senior  vice president of marketing. "The site needed to be efficient, and by that I mean flexible and easy to edit, so that it will be a vehicle for up-to-date information and breaking news. Finally, it had to have secure password-protected pages for information that is for members only."  The new site was designed by Rain Marketing of Portsmouth, N.H.  (E-Weekly Dec. 5) …

State regulator issues warning about crowdfunding

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HARAHAN, La. (12/6/12)--The Louisiana Credit Union League has alerted credit unions in the state that the Louisiana Office of Financial Institutions (OFI) is warning  investors and businesses to use caution in working with any crowdfunding investments.

Crowdfunding refers to online fundraising used as to donate small amounts of money through social networking websites to help artists and other creative people finance their projects (eNews Dec. 5).

A new law will allow small businesses and entrepreneurs to tap into the online crowdfunding to search for investors to finance their business ventures. However, businesses cannot seek crowdfunding investors until after the Securities and Exchange Commission (SEC) establishes rules for the investments.

Once SEC adopts its rules, crowdfunding investments will be exempt from having to register with federal and state governments. That means they will not be required to provide the same level of disclosures that are required of registered securities offerings. As a result, OFI said, "investors can expect to be bombarded with all manner of offerings and sales pitches."

Also, businesses pursuing funding through the exemption may be misled by unqualified representatives proposing to manage their new crowdfunding efforts.

For more information, use the link to OFI's website.

TMG Black Friday results Consumers spent more

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DES MOINES, Iowa (12/6/12)--Card processors are still tallying consumers' spending for the holidays. The latest to report Black Friday and Thanksgiving week shopping data is The Members Group (TMG), which says its numbers match up with predicted increases in consumer spending for the holidays.

TMG's analysis of credit and debit card expenditures indicates that consumers began shopping earlier, with average spending increases beginning the Tuesday before Thanksgiving, and that they spent more this year.

The amount spent for debit cardholders during Thanksgiving week averaged about $130 this year, compared with about $120 for the same week last year.  Credit cardholders increasing spending by $15--to $223 from the $208 they spent in 2011.

"Consumers hitting the stores a bit ahead of schedule may stem from earlier promotion of online Black Friday offers, not to mention brick-and-mortar stores keeping doors open on the holiday itself," said Georgann Smith, TMG's director of marketing and communications.

Black Friday data spotlights the consumer preference for credit when making larger purchases, Smith said. "For community financial institutions issuers, the key will be maintaining top-of-wallet status throughout the holiday season and beyond. And as more card offers hit mailboxes in 2013, the focus for these issuers must be on maintaining that competitive edge."

Although people spent more using credit than debit, the number of debit transactions outpaced  credit on card-present transactions for TMG financial institution issuers.

On Black Friday, the number of card-present debit transactions was nearly 15% more than the total number of credit transactions. That was also true for Black Friday last year, TMG said.

The Wednesday before Thanksgiving, which TMG said is a big spending day for its clients' cardholders, showed more activity this year. Total credit transactions for Nov. 21 were nearly identical to the transactions for Black Friday.  The total number of debit transactions that Wednesday was nearly 5% higher than on Black Friday.

When shopping online, cardholders of TMG clients most often opted to pay with credit cards. Total card-not-present credit transactions were nearly 10% more than card-not-present debit transactions.

The behavior may reflect consumers heeding advice to use credit when they cybershop, said Karen Postma, TMG cards risk senior manager. "Many consumers understand there is a larger temporary financial impact when fraud occurs on their debit card vs. on their credit card," she added.

Other findings:

  • Average card-not-present transaction amounts on Black Friday decreased by 3% for credit and 4% for debit, a possible sign of deeper online discounts.
  • The Wednesday before Thanksgiving saw more card-not-present transactions than Black Friday, which TMG said could be a consequence of online retailer discounts earlier during the week.
  • Cyber Monday led the total number of card-not-present transactions, with nearly double the amount that occurred on Black Friday.

CU survey Georgians wise up on managing money

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DULUTH, Ga. (12/6/12)--When it comes to money matters, Georgia residents say they are wiser than they were a year ago, according to a recent survey by the Georgia Credit Union Affiliates (GCUA).

Roughly 71.5% of members and nonmembers surveyed reported they have learned at least one money lesson in the past 12 months (Consider This Dec. 4).

They learned lessons about:

  • Savings--56.9%;
  • Credit cards--56.1%; and
  • Retirement--41.8%.
Savings lessons learned included:

  • Integrating savings as a normal part of the family's monthly budget;
  • Relying on payroll deduction as an automatic way to save; and
  • Understanding the importance of increasing the amount put in savings each month.
Many consumers said they learned to use credit cards for emergencies only, or chose to forgo additional charges until they paid the balance in full. They also learned the importance of planning now for their retirement years by investing in an employer-supported retirement plan or opening an individual retirement account, said GCUA.

Other areas in which people report learning money lessons include:

  • Taxes and tax refunds--31.1%;
  • Major purchases--28.6%;
  • Investment portfolios--21.3%;
  • Student loan debt--12.7%; and
  • Small-business investments and/or debt--7.6%.
"Many of our members have been learning money lessons because it was necessary to adapt to make ends meet," said Jeff Holcombe, president of Marshland Community FCU in Brunswick. "In an area hit hard by the troubled economy, Marshland has responded to its members' need for financial information by providing online resources as well as financial education on a one-on-one basis.

"Many of our members seek to improve their credit rating," he added. "In an effort to accomplish this, they are learning a great deal about budgeting, living without relying on a credit card to pay monthly expenses, paying off debt and determining appropriate loan amounts for their situation."

While the lessons were learned during difficult times, Holcombe said he hopes members will reap benefits well into the future. "I believe our members are applying the lessons they are learning," he said. "They will continue to do so even as their circumstances improve."

Two mergers in Hawaii involve CUs

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HONOLULU and LIHUE, Hawaii (12/6/12)--Two credit union mergers in Hawaii were announced this week.

Aloha Pacific FCU, Honolulu, will merge with Hawaii Stevedores/Castle & Cook Hawaii FCU, also of Honolulu. The credit unions this week announced they received approval to merge from the National Credit Union Administration.

Aloha FCU is the third-largest credit union in Hawaii. With the merger, it will have $730 million in assets and 41,000 members.

In the past five years, Aloha Pacific FCU has merged with Inter-Island FCU, First Insurance FCU, Word of Life FCU and Media Hawaii FCU.

Garden Island FCU, Lihue, Hawaii, with $17 million in assets, and the Koloa (Hawaii) FCU, with $71 million in assets, also announced their intention to merge.

Although the merger is not expected to be completed until April, Koloa FCU members can immediately begin using Garden Island services, according to the Garden Island FCU website.

All staff from Koloa FCU will remain with Garden Island FCU.

CU branch closed after explosion at ATM

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FREDERICKSBURG, Va. (12/6/12)--An explosion at an ATM Wednesday outside the Fredericksburg, Va., branch of Virginia CU resulted in no one being hurt, but caused the credit union to be evacuated and closed.

The ATM sustained some scorch marks and damage, but remained intact and functioning, Fredericksburg Police said ( Dec. 5).

A representative from the $2.33 billion asset, Richmond, Va.-based credit union called police at 9 a.m.--about 15 minutes after a nearby resident phoned the credit union and reported she heard an explosion at the credit union building at 4 a.m., the publication said.

The explosion set off car alarms in a nearby apartment complex, the caller said. Although she saw a figure close to the credit union, she was too far away to provide an accurate description of the person to police.

Police later confirmed via the credit union's security video that an explosive device detonated about 4 a.m., the publication said. Police reviewed the video and used a canine trained in explosives at the scene.

Social media tips for CUs outlined

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MADISON, Wis. (12/6/12)--Social media experts recently outlined advice for credit unions to enhance their online presence.

Michael Ogden, CUNA Mutual media relations manager of new media, offered Three Killer Problems and How to Slay Them."

  • Profile not filled out. To show up in searches, organization profiles must be completely filled out. This is the No. 1 item to complete in any social media project, Ogden said. Proper keywords should be used in the profile. Seek help from Google Analytics if needed.
  • Accounts are locked. There is no bigger turn-off for potential followers than to see a locked account, Ogden said. Credit unions should make it as easy as possible to attract followers
  • Updates about nothing. Adding personality to the communication stream should be encouraged, but too many quirky posts can dilute the message. Stick to a core message. For credit unions that is about what is happening with products, services and promotions. For example, Ogden tweets about 35 times a day, and about five are off topic.
Ogden also offered a bonus social media killer: No audience, or "I'm just not that into you." Sometimes the audience isn't where you thought it was, and it's time to pull the plug, Ogden said.

Kylie Keene, Maine credit unions' Young and Free spokester, also offered social media tips for credit unions, in the Maine Credit Union League's December News and Views newsletter. Keene's advice included:

  • Limit posts on Facebook to one or two each day. Organizations with more than one or two are at risk of being left off of feeds.
  • Tweet more often than you post on Facebook. Around five or six tweets per day allows helps the credit union to communicate with followers without risking clogging their feeds
  • Pictures draw more attention than words. Post a picture, accompany it with brief and interesting information, then link to the credit union website so readers can learn more.
  • Use the "Share" function on Facebook to show interesting or important content posted by others. This will build connections with other users and pages.
  • Thank a user for following the credit union on Twitter with a personal reply or direct message. Do not use a generic response for everyone, if possible.
  • The credit union does not have to follow everyone who follows it on Twitter. If a user posts relevant information that the credit union can retweet to its followers, then follow back.
  • It is okay to go off topic. The posts that drive the most traffic are not always about credit unions or personal finances. One great off-topic post that gets a retweet from a current follower is enough to gain a new follower, who will then receive all of the credit union's other tweets.
  • The credit union's Facebook, Twitter and website need a cohesive voice. The credit union must stand behind everything that it posts or tweets because it is a reflection of the organization.
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Auto loans rev their engines

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MADISON, Wis. (12/6/12)--Auto loans and sales in the U.S. are trending upward, benefiting the auto industry and financial institutions, including credit unions.

U.S. auto sales surged 15% in November, propelling the selling rate significantly above 15 million for the first time since 2008.  The seasonally adjusted annual sales rate reached 15.6 million last month--the highest level since January 2008 (Automotive News Dec. 3).    

Also, auto-loan originations in the U.S. for this year through August hit 14.6 million--the highest number for that period in five years, according to a report from consumer credit-reporting agency Equifax Inc. (Dow Jones Commentary Nov. 21). 

Total outstanding loan balances were more than $770 billion through October--an 11% increase since auto-loan balances hit their bottom in April 2011, Equifax said. Also, the total number of existing auto loans at the end of November was more than 58 million--a 33-month high, Equifax added.

The number of new-auto loans that credit unions, banks and savings and loans funded hit 984,300 in August--a seven-year high for that month, Equifax said.

In October, new-auto loans at U.S. credit unions rose to 19.3% of all credit union loans from 18.6% in October 2011, according to the Credit Union National Association's (CUNA) monthly sample of credit unions.

Similarly, used-auto loans increased to 10.5% of all credit union loans from 10.2% in the same time period, according to the CUNA report.

CUSO CEO Wind down a planned strategy

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KEENE, N.H. (12/6/12)--The decision by Northeast Members Business Services LLC to wind down and distribute capital to its six owners was a strategy that reflected the changing member business lending market (MBL), the eight-year old credit union service organization's (CUSO) CEO told News Now Wednesday.

Credit unions are increasingly relying on in-house expertise for MBL, often at the behest of regulators, Northeast Members Business Services CEO Scott Anderson told News Now.

The CUSO's member-owners accomplished their goal of establishing an MBL presence for their credit unions when they formed the business in 2004, and most had developed in-house expertise of their own, Anderson said.

The CUSO's owners include:

  • Workers CU, Fitchburg, Mass.;
  • RTN FCU, Waltham, Mass.;
  • Metro CU, Chelsea, Mass.;
  • HarborOne CU, Brockton, Mass.;
  • Westerly (R.I.) Community CU; and
  • Heritage Family CU, Rutland, Vt.
"We accomplished our mission," Anderson said. "Now is a great time to get out of the business."

The CUSO has remained profitable for its six member-owners, Anderson said.

Owners also considered merging with another CUSO or forming a cooperative among its credit union clients, Anderson said. "In the end, this was the cleanest, most certain thing to do," Anderson said.

The CUSO's equity--about $2.7 million--will be distributed among its ownership by mid-2013, Anderson said.

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%. 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.

CUNA org offline for upgrade this weekend

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MADISON, Wis. (12/6/12)--The website will be unavailable for product purchases, meeting registrations and member-only log-ins this weekend, says the Credit Union National Association (CUNA).

The site will be unavailable between 8 p.m. ET Friday and 8 a.m. ET Monday for e-business; however, credit unions can still access the site for other information not requiring the special log-ins, such as News Now.

CUNA is installing an upgrade to its e-business system.