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CU System briefs (12/29/2010)

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* NIAGARA FALLS, N.Y. (12/30/10)--Niagara DuPont Employees CU, Niagara Falls, N.Y., has received approval from state regulators to widen its field of membership and change its name to Encompass Niagara CU. The credit union, founded in 1934 to serve employees of the DuPont Co. plant, will convert from a multi-employer-based charter to a community charter. It will serve anyone who lives, worships, attends school, volunteers or works in Niagara County. The credit union, which has $11 million in assets and 970 members, is also moving its office from Buffalo Avenue to 2525 Military Road in Niagara Falls (Buffalonews.com Dec. 29) … * HARTFORD, Conn. (12/30/10)--Connecticut's longtime Banking Commissioner Howard Pitkin has been reappointed to the position, Gov.-elect Dan Malloy announced Tuesday (New Haven Register Dec. 29). Pitkin has been with the Banking Department for more than three decades, and has headed it for five years. Before that, he was chief of administration, which oversaw the agency's technological initiatives and restructured the bank examination and credit union divisions into the financial institutions division. He oversees the supervision of 34 state-chartered credit unions and 40 state-chartered banks and thrifts … *SPOKANE, Wash. (12/30/10)--Tom Johnson will take the helm of Spokane Teachers CU as president/CEO Saturday (The Spokesman-Review Dec. 29). He will succeed Steve Dahlstrom, who has been with the credit union for 30 years--the last 20 as CEO. A former vice president of Whitworth University, Johnson joined the credit union's board of directors in 1994. In 2006, he became vice president for administration. He was to executive vice president in May as part of the credit union's success plan. Spokane Teachers CU, has $1.4 billion in assets, with 11 branches in Washington and three in Idaho … * HARRISBURG, Pa. (12/30/10)--Don Kilcullen, a founding board member of Philadelphia-based American Heritage FCU, died early Wednesday at a hospital in Philadelphia, the Pennsylvania Credit Union Association has learned (Life is a Highway Dec. 29). He was 91. Kilcullen served on the credit union's board since 1986, most recently as vice chairman. He helped initiate the credit union in 1948 and served on various committees since. As chairman of the Planning Committee, Kilcullen was instrumental in the growth of the credit union to today's $1 billion in assets. He was a graduate of Penn State Judge/Bradley Credit Union School …

Maine CUs helping states unbanked efforts

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PORTLAND, Maine (12/30/10--Thanking the Maine Credit Union League and the state's credit unions for their "strong support and participation," Maine Bureau of Financial Institutions Superintendent Lloyd P. LaFountain III announced a new initiative to help Maine people who do not have a relationship with a financial institution. The collaborative effort between the bureau and a "Bank on ME" working group --which included three credit union representatives and was established by the state Legislature--aims to help unbanked people save and protect their money through low or no-cost accounts at credit unions and other financial institutions. LaFountain, in the announcement, explained that the individuals without an account at a credit union or bank "may be unaware of the security and benefits that come from such accounts. Many people pay expensive charges for check cashing and other services from storefront operations. The Bureau of Financial Institutions, the governor and the Maine Legislature worked together to develop a plan of action to help the 'unbanked.'" John Murphy, president of the credit union league and a member of the working group, said credit unions' participation in the project "goes hand in hand with what credit unions across Maine are already doing to help Maine consumers." Murphy noted the initiative's brochure and other resources will "raise awareness among that segment of the population who are unfamiliar with the safety and benefits of accounts at credit unions and other financial institutions. Maine credit unions are committed to helping to reach out to consumers and provide low-cost financial services to individuals who have had little or no contact with financial institutions." LaFountain highlighted three services that have been finalized to assist the unbanked:
* Save and Protect Your Money Brochure, which explains what's needed to open an account, defines "overdraft" and other terms, and provides a check-list of questions to ask in opening an account to ensure that it will provide needed protections and services. Copies will be available at credit unions and other financial institutions as well as a number of community-based non-profits. Plans are underway to make the brochure available in other languages. * Online Consumer Library: The Bureau of Financial Institutions' online consumer library has resources for unbanked individuals and others seeking information about topics such as foreclosure, credit cards, borrowing, credit reports and financial scams. The library can be accessed in the "Consumer Tools" menu on the bureau's homepage. * Personal Assistance. The bureau has a consumer outreach specialist available from 8 a.m. to 5 p.m. ET, Monday through Friday, to personally assist callers with questions about opening a low- or no-cost account and walk them through the process.
"This should benefit individuals throughout our state who too often rely on people and businesses that charge significant fees," said LaFountain.

Pacul Services offers loyalty rebate

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HARRISBURG, Pa. (12/30/10)--Pennsylvania Credit Union Association member credit unions will receive a $500,000 “loyalty rebate” from the league’s credit union service organization (Life is a Highway Dec. 29). The payment from Pacul Services was calculated based on assets and will be allocated using a formula that returns 18 basis points with a minimum rebate of $100 for smaller credit unions. In the aggregate, Pacul Services will return almost $500,000 of the projected $1 million it earned in 2010. In addition to providing rebates to all member credit unions, the Pacul Services board of directors also authorized a $20,000 contribution to the Pennsylvania Credit Union Foundation to establish a fund for educational assistance for small credit unions.

ITulsa WorldI Quite a year for CU branching

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TULSA, Okla (12/30/10)--Credit unions altered the Tulsa, Okla. financial services skyline in 2010, with several notable branches opening in the area (Tulsa World Dec. 26). Encentus FCU broke ground on a new branch at 1320 S. Lewis Ave. Encentus FCU, formerly known as the St. John Tulsa FCU, was established in 1970 to serve medical professionals affiliated with St. John Health System. Oklahoma Central CU broke ground on its ninth location at 8075 S. Olympia Ave in the Tulsa Hills . Tulsa FCU announced plans to build a branch at 7447 S. Riverside Drive. TTCU, The Credit Union broke ground for its newest branch facility at 7155 S. Riverside Parkway. When it opens next year, the 4,050-square-foot facility will be the credit union’s 13th location. Red Crown CU closed its downtown location at 509 S. Boston Ave. to focus on growth at other branches. The branch had been open since 1938.

Aussie CUs seek to add bank terms to regs

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CANBERRA, Australia (12/30/10)--Small credit unions in Australia are lobbying for changes in terminology that would include the words "banking," "bank" or "banker" in regulations so they could compete with big banks. Financial institutions' regulator, the Australian Prudential Regulation Authority (APRA), has called for comments on using the term "bank," according to The Advertiser (Dec. 29). APRA's approval is required for financial businesses to use the terms. Abacus-Australian Mutuals, a credit union and building society association that is a member of the World Council of Credit Unions, is advocating the change. Abacus CEO Louise Petschler said "banking" should become part of the regulatory language. The organization supports regulated financial institutions being allowed to market themselves as "mutual banks." Credit societies, similar to savings and loans, may use "banking" to describe their business. However, only institutions with at least $50 million in special capital can use the term "bank" or "banker" in their business names.

Desjardins buys Alberta company to expand nationwide

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MONTREAL, Que. (12/30/10)--Quebec-based Desjardins Group, Canada's largest credit union, has taken steps to expand nationally throughout Canada with its $443 million acquisition of Western Financial, a bank and insurance company based in southern Alberta. Desjardins CEO Monique Leroux said the deal, announced Dec. 24, will kick-start its growth in Western Canada. So far, the $175 billion asset Desjardins' operations are located mostly in Quebec and southern Ontario, with a smaller number of branches in New Brunswick and Manitoba (The Globe and Mail Dec. 26). Western Financial, which began as a collection of insurance brokers in 1996, has 121 offices stretching from British Columbia to Manitoba, and 550,000 banking and investment customers. Its assets will allow Desjardins access to operations across most of Canada. Western Financial will keep its headquarters in High River, Alberta. The deal was approved by Western Financial's board of directors and is subject to approval of its shareholders. It is expected to be completed in second quarter of 2011. The acquisition includes a $10-million break fee and the assumption of $56 million in debt.

N.Y. CU foundation re-elects board officers for 2011

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ALBANY, N.Y (12/30/10)--The New York Credit Union Foundation, the charitable arm of the Credit Union Association of New York (CUANY), re-elected officers for 2011 at its recent annual meeting.
Re-elected as chair of the foundation’s Board of Trustees is Vicki O’Neill, president, ACMG FCU, Solvay, N.Y., Bruno Sementilli, president/CEO, Quorum FCU, Purchase, N.Y., and Brian Clarke, chief financial officer, Bethpage (N.Y.) FCU, Bethpage, N.Y., were elected vice chair and secretary/treasurer, respectively. During the meeting the trustees also thanked outgoing board member Michael Lotz, CEO, British Airways Employees FCU, East Elmhurst, N.Y., for his years of service to the Foundation’s board of trustees. Rounding out the foundation Board of Trustees are:
* Linda Bourgeois, CEO, UFirst FCU; Plattsburgh, N.Y.; * Kevin A. Brauer, senior vice president, Members United Bridge Corporate FCU, Warrenville, Ill; * Alfred Frosolone, CEO, Niagara’s Choice FCU, Niagara Falls, N.Y.; * John C. Gibardi, president/CEO, Entertainment Industries FCU, New York; * Chris Guild, account consultant manager, CUNA Mutual Group, Madison, Wis.; * Gerard Herrling, community volunteer; * Shirley Jenkins, secretary/board of directors, Municipal CU, New York; * James L. Mack, business development executive, Sunmark FCU, Latham, N.Y.; * William J. Mellin, president/CEO, CUANY, Albany, N.Y.; * Mark Pfisterer, CEO, AmeriCU CU, Rome., N.Y.; * Christine Peters, CEO, Family First of NY FCU, Rochester, N.Y.; * John Prumo, president/CEO, GPO FCU, New Hartford, N.Y.; * Mike Vadala, president/CEO, The Summit FCU, Rochester, N.Y.; and * Robyn Young, CEO, Great Erie FCU, Orchard Park, N.Y.

CUNA closed Friday INews NowI resumes on Monday

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WASHINGTON and MADISON, Wis. (12/30/10)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association (CUNA) will be closed Friday in observance of the New Year holiday. News Now will not publish a Friday issue but will resume regular publication on Monday.

Scams zero in on home equity lines

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MADISON, Wis. (12/29/10)--Identity thieves are having a field day with scams, particularly lucrative ones aimed at home equity lines of credit (HELOC). Others have stepped up their card scams, and phishing and vishing efforts to take advantage of consumers' good will and inattention to details during a busy holiday season. The HELOC scams are increasing, according to Brad Mundine, regional manager for CUMIS' credit union protection and risk management division. He wrote an advisory last month that said HELOC account losses from theft have "increased significantly" this year, with the insurer losing more than $4 million so far in 2010 (StarTribune.com Dec. 23). As a result of some HELOC thefts, lawsuits have cropped up, pitting consumers against their lenders, and lenders against their insurance companies over who pays when someone makes unauthorized charges. Credit unions are involved in at least two lawsuits related to thefts from HELOCs. Last week a lawsuit was filed by a member against a Burnsville, Minn.-based Affinity Plus FCU after he was told he would have to pay nearly $90,000 in unauthorized charges against his $200,000 HELOC account. The member, Mike Calcutt, found out about the theft during a conversation about interest payments on the loan in March. The thefts occurred after someone set up telephonic banking privileges on his account, then executed nine transfers of $10,000 each from his credit line to his savings account, and then instructed the credit union to wire the money to a drop account in Boston. Once there, the money disappeared. In a separate case, Citizens Financial Bank in Indiana refused to cover $26,500 in bogus charges on a couple's HELOC after money was wired to a bank in Austria, where the money disappeared. A third case, filed in Philadelphia, involves another credit union, SB1 FCU, which covered a member's $220,000 loss from a HELOC and sought to recover the loss from its insurers, who denied the claims. The Credit Union Information Security Professionals Association told the Star Tribune that of the 131 banks and credit unions participating in a 2008 webcast, 29 reported HELOC wire fraud incidents. HELOCS aren't the only scams circulating. During the holidays a number of credit card scams surfaced. Here's a roundup of the latest scams:
* In Panama City, Fla., Bay County Sheriff's investigators reported a string of credit card fraud claims from members/customers of local financial institutions, including Innovations FCU and Tyndall FCU. The fraudulent charges began Dec. 23. Investigators said hackers breached a Visa retailer's data base, stole account information and used the information to make replica credit cards for frauds generated in Australia, Canada and Italy (The Walton Sun, News Herald and Panhandle Parade Dec. 27). The holiday season is the busiest time of year for credit card use, and the easiest chance that thieves can use the stolen numbers without anyone noticing right away, police said. * Last weekend a teller at Auto Body CU, DeWitt, Mich., recognized a lottery scam and advised a woman not to wire the caller $3,000. The member left the credit union with her money still safe and secure, said WILX 10 (Dec. 27). * In Butte, Mont., members/customers of several banks and credit unions reported fraudulent activity on their accounts. So far investigators have not found a common denominator in the fraud. The credit unions involved were not named (Associated Press Newswires Dec. 13). * In Bellingham,Wash., Pacific Northwest CU warned that phony automated phone calls alerting recipients about debit card "problems" were reported across Whatcom County. The messages advise recipients to call a special phone number that leads to another recording that asks for account and personal identification numbers. Earlier in 2010, the county reported a rash of fraudulent text messages in January and July warning about credit union account "problems" (The Bellingham Herald Dec. 7).
These are just the incidents this month. Scams targeting members of credit unions as well as the general public, were reported in Oswego, N.Y.; Raleigh, N.C.; and Cheyenne, Wyo. The Federal Bureau of Investigation (FBI) also alerted media outlets that social networking sites and search engines were expected to be hit hard by cybercriminals, and that variations on phishing (e-mails), vishing (voice or phone calls) and smishing (text messaging to cell phones) would be making the rounds during the holidays. These typically target members/customers of credit unions and banks.

CUs may get bank competition for workplace banking

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CHICAGO (12/29/10)--Credit unions, which traditionally have maintained a stronghold on workplace financial services because of their close field-of-membership ties with employers, may see more competition from banks vying for that workplace banking slot. Banks will try this avenue because they "desperately need new customers," according to US Banker's upcoming January issue. They have fee pressure and a need for new revenue, and workplace banking has potential value, an executive at NCBS, a Sun Trust Banks Inc. consulting subsidiary, told the publication. Workplace banking refers to everything from offering free checking accounts to locating branches at the workplace to presenting seminars about financial planning, mortgagees or other financial topics, to having an onsite branch at the employer's location. If that sounds familiar to credit unions, it should. Credit unions cut their teeth on their field of membership bonds with employer-related groups, which became sponsors for many early credit unions. With the trend toward widening fields of membership to community bonds so they can grow, credit unions may find themselves in a banking sprawl on their traditional turf. In fact, credit unions are one of two big reasons why banks haven't been proactive in this area in the past, said the article. "Credit unions are the big one [barrier]: Having grown organically with many big employers, they often enjoy airtight relationships," it added. The second barrier is big banks' centralized management models. Small and mid-size banks will have more success at workplace banking, according to Steven Reider, president of Bancography, a bank consulting firm in Birmingham, Ala. However, KeyCorp has overcome that barrier by dedicating relationship managers at 21 of its districts. As a result, KeyCorp doubled its workplace banking, and boosted its health savings account business. Banks often market their perks to the employees of their commercial clients, but some have moved to marketing toward business clients where they don't do business. For example, in September, Dallas-based Comerica Bank started marketing workplace banking programs to businesses where it doesn't have commercial clients, said the article. Some banks are even putting branches into workplaces. U.S. Bancorp opened its first workplace branch with Procter & Gamble in Cincinnati about 12 years ago. Today, it has 45 such branches on site. Although this isn't a huge trend yet, the economic and regulatory factors may converge so that banks look more to this area to grow. And that growth could be at the expense of credit unions.

Meritrust to close three branches add shared branching

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WICHITA, Kan. (12/29/10)--Kansas' largest credit union is consolidating branches as it joins the CU Service Centers CO-OP Shared Branching Network, effective in spring 2011. Meritrust CU, based in Wichita, will consolidate three Wichita locations at NewMarket Square, Haysville and Andover within the next year, said Bob Corwin, president/CEO. The $700 million asset credit union also is considering consolidating two branches in Lawrence. The closed locations are underused, said Meritrust in a press release. In Wichita, members will have access to the branches of Credit Union of America, MidAmerican CU, First Choice CU and Cessna Employees CU, where they can make deposits, withdrawals, loan payments, transfers and statement inquiries. "The additional branch locations made available through the CO-OP Shared Branching Network combined with the surcharge-free ATM locations made available with the CO-OP ATM Network have increased member convenience and allowed the credit union to address branch locations that have been underutilized by consumers," said the press release. "In an effort to continue to be good stewards of our members' best interests, Meritrust will be consolidating a few branch locations within the next year," said Corwin. By partnering with the shared branching network, members can access more than 4,500 branches nationwide across 50 states, Puerto Rico, Guam and military bases in Japan, South Korea, Italy, Germany and the United Kingdom.

Gateway Metros retiring CEO put philosophy back in CU

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ST. LOUIS, Mo. (12/29/10)--David Barton, CEO of Gateway Metro FCU (GMFCU), St. Louis, will retire Monday after 35 years at the credit union, which accredits him with helping put the philosophy back into its operations.
* The credit union expanded its hours. It began opening at 7 a.m. on weekdays and added Saturday morning hours--"an immediate hit with members." * It stepped up its marketing efforts. "We made mortgage loans. Unfortunately none of our members knew about them. It was the same with many of our other services. Members were not aware of the benefits available to them." * It weathered a fundamental change in focus when Southwestern Bell/AT&T moved its headquarters to Texas. Thousands of members were transferred or downsized, including several members of the credit union's board. The credit union changed its name to Gateway Metro CU in 1995 and expanded its field of membership to area communities. * It became a leader in shared branching. Barton approached longtime friend Don Berra, CEO of First Community CU, about sharing offices and expenses. As a result, four credit unions began operating out of the shared branch. Today, it has one of the highest percentages of loan and deposit growth among all Gateway Metro Federal offices. The credit union now has 10 branches and is part of the Credit Union Shared Branch Network. * Through training, Barton convinced employees to take ownership of member problems and inquiries. The credit union emphasizes to employees "that they are empowered to make decisions and take a leadership role, even if they are not managers," Barton said. "To members, the employee they're talking to on the phone, or that teller who's handling their transaction at the branch, IS the credit union. More than 90% of our transactions are automated. So when a member interacts with our staff directly, the contact carries even more importance."
Larry Pixley, senior vice president, will succeed Barton in January as president/CEO. He was formerly president of St. Louis FCU when his credit union merged with Gateway Metro Federal in 1999. "We take time to train employees to see the whole picture of the credit union, not just their individual jobs," he said. The credit union dedicates two full days to training employees on all levels. "We have an informed, intelligent and caring board," said Barton, adding that "they have made history." The credit union was the first in the area to offer new services such as health savings accounts and a payday loan alternative that Barton estimates saves members more than $1 million a year in fees. The payday loan alternative is so successful that the Federal Deposit Insurance Corp. asked Barton to speak at a seminar for community banks about developing such a service. "None of this would have happened if our board members hadn't approved our initiatives," he said. Barton has seen changes in the economy and increased regulations that led Gateway Metro Federal to adopt new growth strategies two years ago. The biggest change is in the relationship between a credit union and its members, he said. When credit unions served employee groups, there was commitment on both sides--by the credit union and the member--but some of that has been lost as credit unions expanded into the community. He tries to bring the commitment full circle by rewarding members with multiple account relationships with the credit union. For example, if members commit to checking with direct deposit, they get advantages such as 6.02% annual percentage yield on checking accounts and other privileges. "Bigger is not better if members don't fully participate," he said. Total membership has fallen to 18,000 from 22,000 since the new strategy was implemented. However, checking account penetration rose to 50% from 33% . Loans grew substantially; assets grew despite membership loss. It also has taken measures to attract younger members through consolidating with small parish credit unions --such as Guadalupan CU, a small credit union in a Catholic elementary school in a less-than-prosperous neighborhood in North St. Louis County. It had financial issues and up to 10 credit unions passed on the merger, but Gateway Metro Federal saw an opportunity to serve a largely Hispanic membership and to provide elementary school children with financial education. "Most institutions wait until kids are out of college before they contact them. That's too late," said Barton. "High school is probably too late. We need to start educating them in elementary school so they can grow up to be responsible money managers." The credit union now has branches in three elementary schools and two high schools, the only such credit union branches in the state. The credit union translates materials into Spanish and has a Spanish-language website. Members of the Hispanic community have embraced the credit union as their financial institution--an example of how the credit union has spread its philosophy, "We are here to change members' lives."

NASCUS lauds Michigans retiring regulator

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ARLINGTON, Va. (12/29/10)--Longtime National Association of State Credit Union Supervisors (NASCUS) board member Roger Little is retiring from his state regulatory career Jan 1. Little, the deputy commissioner of credit unions for the Michigan Office of Financial and Insurance Regulation, has been a NASCUS board member for more than 12 years, and is a past chairman. “Roger has made significant contributions to NASCUS as an organization and to the state credit union system during this state regulatory career,” said Mary Martha Fortney, president/CEO of NASCUS. “On behalf of state regulators and NASCUS, we thank Roger for his service to NASCUS and commitment to state’s rights and the strength of the state credit union charter.” Little has served on the NASCUS board since 1999, and was chairman from 2003-2005. He was also active in the NASCUS Accreditation Program, serving on a number of accreditation review teams. Little has testified before committees in the U.S. House and Senate during his involvement with NASCUS, and has co-authored a NASCUS white paper. He began his career at the Michigan agency in 1984 as a credit union examiner. He later served as an examiner supervisor before assuming the role as deputy commissioner where he was responsible for the oversight of Michigan’s more than 200 state-chartered credit unions.

IDetroit NewsI Down economy lifts up CUs

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LANSING, Mich. (12/29/10)--With the restructuring of the auto industry, Michigan has felt the effects of the recession as directly as any state in the country. But Michigan residents have turned to credit unions in their time of need, says the Detroit News (Dec. 25). Michigan credit unions added more than 50,000 members in 2010, the second straight year it has surpassed that figure By comparison, that’s nearly three times the 17,000 members added in 2008, the article said. Michigan had 4.5 million credit union members as of the end of September, and 44% of the state’s residents do at least some of their banking at credit unions, the Michigan Credit Union League told the newspaper. Among the 10 most populous states, Michigan has the highest rate of credit union membership. Consumers have displayed a willingness to change financial institutions nationally as well. MoveYourMoney.com, a website which encourages consumers to move their money out of larger financial institutions into community banks and credit unions, earlier this year estimated that two million consumers had transferred $5 billion from big banks to community financial institutions, like credit unions. A Zogby International poll in February indicated that 9% of U.S. adults had expressed disapproval of big banks by moving at least some of their accounts to community financial institutions such as credit unions.

CU System briefs (12/28/2010)

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* DAYTONA BEACH, Fla. (12/29/10)--Two men, one an employee of the Daytona Beach News-Journal, have been charged with grand theft of an automobile and burglary after allegedly stealing a credit union's ATM housed at the News-Journal building. Charged were Jamie Greene, 40, a 15-year employee of the newspaper's packaging department, and Nick Ordway, 31. Police said Greene left work at about 3 a.m. Monday and returned an hour later, covered a surveillance camera and cut the wires to the Space Coast CU ATM before unbolting it from the concrete floor. The thieves use a dolly to roll it to a News-Journal forklift, which carried the 685-pound ATM to a newspaper van, which was driven to a residence. A neighbor saw sparks coming from the rear of the vehicle and called police. The thieves were not able to break the ATM cash box, which contained $24,000 … * HARRISBURG, Pa. (12/29/10)--Philadelphia-based American Heritage FCU and CEO Bruce Foulke sponsored a meet and greet Wednesday for newly elected U.S. Rep. Mike Fitzpatrick, according to the Pennsylvania Credit Union Association (PCUA). About 20 credit union and community leaders attended (Life is a Highway Dec. 23). Fitzpatrick will be the sole Pennsylvania representative on the House Financial Services Committee, said PCUA. Foulke and PCUA President/CEO Jim McCormack led a question and answer discussion, which centered on the debit interchange amendment and the unintended consequences to consumers. Fitzpatrick was receptive to the comments and appreciated the information, PCUA said … * TULSA, Okla. (12/29/10)--Tulsa Teachers CU (TTCU) President/CEO Leslie W. Rector announced that he will retire on Sept. 30, after 26 years with the credit union, 15 of them as CEO. He joined TTCU in November 1985 as vice president of operations and was promoted to executive vice president in 1990. Rector became president in 1996. During his tenure, TTCU grew to $979 million in assets from $155 million. Last year the credit union announced record asset growth along with strong capital reserves of 13.8%, which was attributed to an aggressive branching program. It is constructing its 13th branch. He also instituted the credit union's $14.3 million bonus dividend and rewards program. Rector also served on the Oklahoma State Credit Union Board, the Oklahoma Credit Union League (now CUAOK) Board, the Oklahoma Credit Union Shared Service Centers Board, and the Oklahoma Credit Union PAC Board. In March he received CUAOK's Lifetime Achievement Award. Upon retirement, he plans to return to school to become a drug and alcohol counselor …

CU System brief (12/23/2010)

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* JACKSONVILLE, Fla. (12/28/10)--An ATM belonging to Jacksonville, Fla.-based Vystar CU was pulled from its base and damaged by a front-end loader that fled with the machine at about 3:50 a.m. Monday UPI.com Dec. 22). Police responding to a burglar alarm at the credit union found a trail of debris that led to a suspect in a front-end loader, which was attempting to turn from the highway onto a bike trail. The driver failed to stop for police, then put the Caterpillar into reversed and headed for a patrol car, which evaded a collision. The driver finally stopped the vehicle. Police arrested Robert Anderson, 31, who was charged with burglary of more than $1,000 and aggravated assault. Although the ATM was severely damaged, its cash cartridge remained intact, the report said …

Earl named interim CEO of ColoradoWyoming associations

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DENVER, Colo. (12/28/10)--Arizona Credit Union League President/CEO Scott Earl has been named interim president/CEO of the Credit Union Association of Colorado (CUAC) and the Credit Union Association of Wyoming (CUAW), which are working toward a merger with the Arizona league. Effective Jan. 1, Earl will manage his time among the three states to insure operations continue at their highest level service to member credit unions. CUAC outgoing interim CEO Pete Kirchhof will return to his full-time lobbying practice and will continue to represent credit unions in Colorado's State Capitol. No official timeline has been developed for the proposed merger. It requires a membership vote, which could be scheduled for first quarter 2011, said the associations' press release. If the merger is approved, Earl will become CEO of the new entity. Denver has been selected as the location for the merged organization's headquarters. Additional offices will be maintained and staffed in Phoeniz, Ariz., and Casper, Wyo.

Mass. league presents 125000 to homeless coalition

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MARLBOROUGH, Mass. (12/28/10)--The Credit Union Community Hope Initiative presented the Massachusetts Coalition for the Homeless with a check for $125,000 on Dec. 17, representing funds raised by the credit unions of Massachusetts during 2010, according to the Massachusetts Credit Union League (MCUL). The presentation took place at Hanscom FCU’s main office, which is located on Hanscom Air Force Base, Mass. It contributed $10,000 to the appeal. The initiative is an effort organized by the Massachusetts league through which Massachusetts credit unions join together to assist worthy causes. The Massachusetts Coalition for the Homeless has been the league’s charitable partner for more than 20 years. “The Massachusetts Coalition for the Homeless is an organization that inspires all of us in the credit union community,” said Nicole James, president of MAFCU FCU in Boston and chairman of the league’s Social Responsibility Committee. “With a small staff of skilled, dedicated, and highly motivated professionals, they work tirelessly to help families find safe, affordable, and permanent homes.” MCUL President Daniel F. Egan Jr. praised the credit unions’ efforts. “The leadership, staff, and membership of Hanscom FCU constantly demonstrate their generosity,” he said. “Not only has the credit union done a tremendous job in supporting the Massachusetts Coalition for the Homeless, but it also raises money for Children’s Hospital, veterans’ charities, scholarships, the Lowell High School ROTC program, and many other great causes.” In a related matter, Hanscom FCU earlier this month delivered $1,000 worth of personal items to the Veterans Affairs Boston Healthcare System--part of a longstanding credit union tradition to make donations to commemorate Veteran’s Day.

3Q report shows Maine CUs ahead of nations growth

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PORTLAND, Maine (12/28/10)--Maine credit unions outperformed national averages of credit unions in several key performance categories during the third quarter. During the quarter ended Sept. 30, asset growth at Maine credit unions grew by 5.17%, compared to the national average of 4.96%. During the same time period, loan growth was 2.54% at Maine credit unions, while nationally credit union loan portfolios shrunk at a -0.44% rate (Maine Credit Union League Weekly Update Dec. 24). Maine credit unions’ quarterly return on assets was 0.50%, or 0.06% higher than the national average, according to Callahan’s Performance Summary. Maine’s loan delinquency rate of 1.23% was 0.53% lower than the national average.

More walk on mortgages but keep second mortgage

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MADISON, Wis. (12/28/10)--More U.S. citizens than ever are willing to walk away from their underwater homes (homes for which they owe more in mortgage payments than the home’s worth), according to a recent Harris Interactive survey commissioned by Trulia and RealtyTrac. Such a move, dubbed a “strategic default” by the real estate industry, refers to people who decide to walk away, even though they can technically afford to continue paying off their mortgage (msnbc.com Dec. 20). Almost half, 48%, of homeowners who have an underwater mortgage said they would consider walking away from their home, the survey indicated. Six months ago, a similar survey indicated just 41% of respondents would do so. “It’s a phenomenon we haven’t seen before in the housing market,” Rick Sharga, senior vice president of RealtyTrac, told msnbc. “The mindset of why people purchase a home has changed over the past decade.” Credit unions also may be interested that in a second study conducted by researchers at the Federal Reserve Bank of Philadelphia that one in five borrowers who fall into foreclosure on their first mortgage, indicated they would continue to pay their second-lien mortgage (The Wall Street Journal Dec. 20). Although banks are likely to foreclose on borrowers when they stop paying a first mortgage, second-lien holders have little incentive to foreclose on underwater borrowers because their debt has little or no value. “Given the large number of current homeowners with negative equity, there are likely a large number of borrowers who could default on their home equity loans without being forced into foreclosure if they continue to pay their first mortgage,” the study’s authors write. However, their research indicates that isn’t happening: “Borrowers rarely engage in this strategy even though it appears to be viable,” the study reported. “Given the degree of second liens that have been underwater during the current mortgage crisis and given that second-lien holders are not likely to foreclose on many of these underwater second liens, it is surprising to find that the default rate for first-lien mortgages far exceeds the default rate on the second-lien mortgage for the same property.” To read the articles, use the link.

Empower FCU announces 25M dividend

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SYRACUSE, N.Y. (12/28/10)--Empower FCU is paying $2.5 million in “give-back” bonus dividends to reward members for a successful year. John D. Wakefield, president/CEO of Empower FCU, reports that assets, loans and net income increased significantly in 2010 at the $900 million-asset Syracuse-based credit union. The dividend and interest rebate will be posted on Dec. 31.

WesCorp judge renders temporary decision favoring directors

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LOS ANGELES (12/28/10)--A U.S. District judge in Los Angeles has rendered a tentative decision in favor of former board members of Western Corporate FCU in a lawsuit by the National Credit Union Administration (NCUA) related to WesCorp's failure. However, the court has permitted the lawsuit against WesCorp's former officers to proceed. The decision to dismiss NCUA's complaints of breach of fiduciary duty and gross negligence against the directors is not final. Instead, Judge George Wu of the U.S. District Court for the Central District of California is allowing NCUA's attorneys one more chance to amend their complaint and proffer what they would argue, if they were given the chance to do so. NCUA will get until Jan. 10 to amend its arguments, with defendant directors/officers responding by Jan. 24. A hearing on Jan. 31 will determine whether the tentative ruling stands as a final rule. In essence Judge Wu divided the ruling into several areas of complaint--breach of fiduciary duty claims, gross negligence claims, statute of limitations, and claims related to WesCorp's Supplemental Executive Retirement Plans (SERP). The case also was separated in terms of whether defendants were directors or officers. The breach of fiduciary duties complaint, which hinged on the interpretation of California's Business Judgment Rule, was dismissed against former directors Bill Cheney (now president/CEO of the Credit Union National Association), Gordon Dames, Robert Harvey, James Jordan, Timothy Kramer, Robin Lentz, John Merlo, Warren Nakamura, Brian Osberg, David Rhamey and Sharon Updike. In the decision, the court said the directors fall under the business judgment rule in decisions that do not involve fraud or breach of trust. The rule provides directors "broad discretion in making corporate decisions and [allows] these decisions to be made without judicial second-guessing in hindsight." However, although the court dismissed the breach of fiduciary duties issue against Robert Burrell, WesCorp's former executive vice president/chief information officer, it is allowing NCUA to amend the complaint against Burrell and noted that it has not dismissed the breach of fiduciary duties against management/officers of WesCorp. The gross negligence charges have been dismissed for everyone because there is no cause of action against gross negligence under California law, said Judge Wu. The court also indicated it was ready to grant director Cheney a clean bill on a statute of limitations argument as it applies to the gross negligence claim. However, it did not reach a conclusion about Rhamy and Updike because of a dispute about whether the statute of limitations was two years or three. Since the gross negligence claim was invalid, Wu did not have to decide which limit to use. A two-year limit would favor all three directors, while a three-year limit would apply only to Cheney because of the dates of departure from the board. The court did not dismiss claims related to WesCorp's SERP policies against Robert A. Siravo (WesCorp's former president/CEO), Todd M. Lane (former chief financial officer) and Thomas E. Swedberg. Those claims allege Siravo and Swedberg manipulated the SERP to increase pay-outs and that Lane was "enriched" by executing an early payout agreement in exchange for his SERP rights.

Maine legislators commend CUs at regional breakfasts

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PORTLAND, Maine (12/28/10)--The Maine's Credit Union League's Breakfast with Legislators series heard plenty of praise heaped on credit unions from many of the nearly 75 lawmakers attending the breakfasts.
Click to view larger image New Speaker of the Maine House, Robert Nutting, left, poses with Maine Credit Union League President John Murphy at the League's Breakfast with Legislators event in Augusta, one of five breakfasts the League held prior to the start of the Legislative session in January. (Photo provided by the Maine Credit Union League)
Among legislative leaders attending the series were Speaker of the House Robert Nutting, Assistant Majority Leader Andre Cushing, and Assistant Minority Leader Teresea Hayes. Nutting, who attended the Augusta breakfast, called credit unions "a great part of communities who deserve our appreciation." During the month of December, the Maine Credit Union League held five regional breakfasts in Augusta, Bangor, Brunswick, Lewiston and Portland. A sixth planned for Presque Isle was postponed due to inclement weather and will be rescheduled later either in Aroostook County or Augusta . The breakfasts' goal was to strengthen and build relationships between credit unions and legislators. "We had a positive response from legislators, both new and returning, to our breakfasts, as well as close to 100 credit union representatives attend," said John Murphy, league president. "Each breakfast generated lots of discussion on the important role that credit unions have in financial services in Maine, with many legislators eager to help support issues of importance to credit unions. We also provided background information on the positive growth of credit unions in Maine, and educated those legislators who were less familiar with credit unions about our issues, products and services." Murphy said it was nice to hear so many legislators mention the important role that credit unions had played in their lives. "From lending money for a first car, first house or to start a business, legislators were proud and appreciative of the help that their local credit union had given to them."

CU System briefs (12/22/2010)

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* LAKE FOREST, Calif. (12/23/10)--Counterfeit official checks bearing the name of Eagle Community CU, Lake Forest, Calif., are in circulation, the credit union reported to the Federal Deposit Insurance Corp. (FDIC). The fake checks display a routing number assigned to Preferred Bank, Los Angeles, and are similar to authentic official checks. However, they have the phrase, "Drawee: Preferred Bank, Los Angeles, CA" above the date field. Authentic checks display the credit union's routing number and display the phrase: "Drawee: The Bank of New York Mellon, Everett, MA" above the date field … * WASHINGTON (12/23/10)--A video of the 2010 Credit Union Cherry Blossom Ten Mile Run was named on of Callahan & Associates' top credit union videos for the year. The list of top credit union videos can be found at Callahan's website. The 2011 run--the 10th year the run has been sponsored by the credit union movement--will be April 3, 2011. According to Juri Valdov, chairman of Credit Union Miracle Day, planners "plan to stream the race live across the Web so that more credit unions can become involved." For more information, use the online giving site … * SAN DIEGO (12/23/10)--San Diego County CU Poinsettia Bowl kicks off today at 5 p.m. PST, with the U.S. Naval Academy football team competing against San Diego State University at Qualcomm Stadium in San Diego. The game, which will be televised nationally by ESPN, could get soggy. The bowl's executive director said the game will go on as scheduled, despite flooding in the stadium from days of rain. It rained so hard Tuesday that the teams had to practice in hotel ballrooms and the teams' bands and spirit squads had to cancel their "battle of the bands." A large portion of the parking lot also was reported as flooded. About 51,000 fans are expected at today's game (ESPN.com. This is the third year that San Diego County CU has sponsored the event …

CUNA closed FridayMonday INews NowI resumes Tuesday

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WASHINGTON and MADISON, Wis. (12/23/10)--In observance of the holidays, the Washington, D.C., and Madison, Wis., offices of the Credit Union National Association (CUNA) will be closed Friday and Monday. News Now will not produce Friday and Monday editions, but it will resume its regular publication on Tuesday.

Woman killed two injured in robbery at CU ATM

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KNOXVILLE, Tenn. (12/23/10)--A woman died Wednesday morning after she was shot during a robbery attempt while withdrawing cash from an ATM at a credit union in Knoxville, Tenn. Also injured were the shooting suspect, who was shot by police, and a man in a second car at another ATM. Davida Nicholson, 46, was withdrawing funds from the ATM at TVA Employees CU when she allegedly was approached by the suspect, Brandon James Johnson, 20, who was wielding two guns. When she tried to shut the door to her truck and pull away, the suspect allegedly shot her. The truck struck the credit union building, police said (VolunteerTV.com Dec. 22and Knoxnews.com Dec. 22). Johnson then apparently opened fire on a second vehicle pulling away from another ATM. The driver, William Letsinger, 36, was hurt but not taken to a hospital. The suspect then allegedly continued shooting at other vehicles and pulled Nicholson's 21-year-old mentally challenged son from the truck and climbed in. Two officers arrived while he was still shooting. He reportedly refused to drop his guns and was shot in the neck by an officer. Nicholson and Johnson were rushed to a nearby hospital where Nicholson was pronounced dead at 9:07 a.m. Johnson was treated and released. He has been charged with felony murder, attempted first degree murder, and three counts of aggravated assault against Nicholson's son and two police officers. The shooting did not involve the credit union or its employees. The credit union was closed at the time, but employees were inside preparing to open for business. The first call to 911 came from the credit union, said WBIR.com (Dec. 22).

Three new CUNA Board members elected

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MADISON, Wis., and WASHINGTON (12/23/10)--Three credit union executives have been elected to the Credit Union National Association (CUNA) 2010-2011 Board of Directors seats in contested elections. The winners and their opponents are:
* District 2, Class B: Stephen Behler, president/CEO of Kemba CU, West Chester, Ohio. He won against Robert Falk, president/CEO of Purdue Employees FCU, West Lafayette, Ind. * District 4, Class A: Patricia Wesenberg, government affairs liaison, Marshfield (Wis.) Medical Center CU. She won against three other candidates: Patrick Drennen, CEO of lst Gateway CU, Camanche, Iowa; Dennis Fisher, president/ CEO, First Security CU, Lincolnwood, Ill.; and Brian Smith-Vandergriff, board member, Catholic Family CU, Kansas City, Mo. * District 6, Class C: Brett Martinez, president/ CEO of Redwoods CU, Santa Rosa, Calif., who won against Scott Waite, senior vice president/chief financial officers, Patelco CU, San Francisco, Calif.
Friday was the deadline for casting ballots in the three contested elections.

CU helps out with IGood Morning AmericaI savings makeover

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OSWEGO, N.Y. (12/23/10)--Oswego (N.Y.) County FCU helped a family save more than $58,000 as part of “Good Morning America’s (GMA) Savings Makeover” on its ABC television show. GMA Consumer Correspondent Elisabeth Leamy--who last March was a guest on the Credit Union National Association’s (CUNA) Home & Family Finance Radio show taped live at the CUNA Marketing and Business Development Council’s annual conference--said she helped the Gunn family of Oswego, N.Y., save money using simple strategies. “Tom and Nancy Gunn had never tried to refinance their house and take advantage of today’s historically low interest rates because they didn’t have the cash for closing costs,” Leamy said. “I asked them if they belonged to a credit union. They do. But they had never approached their credit union about refinancing. So I took the Gunns to Oswego County FCU to see what we could cook up. Loan officer Aimee Johnson suggested taking the Gunns’ two mortgages-–a first at 6.75% and a second at 13.84%--and refinancing them both into a new loan at 5.35%. “Then she wowed me with a concept I had never heard of before: the loan would be a home equity loan rather than strictly a mortgage,” Leamy added. “It really is a mortgage, because you use it to finance your entire house, but Oswego County FCU calls it a ‘Home Equity Loan’ because it has zero closing costs. Perfect for the Gunns. Basically, to thank you for bringing in your loan business, the credit union pays the closing costs for you. “This is a concept unique to credit unions that other consumers can inquire about,” Leamy said. The $36 million-asset credit union also offered to combine the Gunns’ credit cards and car loans into a second, more traditional, home equity loan at an 8% interest rate for three years. Their current car loans are at 13% and 14.75%. “Do these offers seem over-the-top generous?” Leamy asked. “Oswego County FCU CEO Bill Carhart assured me that his people provide affordable products like these to their members all the time. It’s startling in an era when many people are frustrated with big banks, but it makes sense when you consider that credit unions are non-profit companies essentially owned by their members. “If you do not belong to a credit union you are missing out,” she added. “And contrary to popular belief, they are not hard to join.” To view the segment or read the transcript of it, use the link.

Filene report IT budgets should focus in three areas

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MADISON (12/23/10)--Information technology budgets are rising at credit unions, and member-facing technologies already capture a large part of the money spent, which makes it essential to spend wisely, says a new report from the Filene Research Institute. “The Future of Member-Facing Technologies in Credit Unions” advised credit unions to focus their attention in three areas:
* Financial advice and guidance--Personal financial management (PFM) tools like Mint.com and the constellation of similar services are more than juiced-up budgeting tools; they allow members an accessible and intuitive way to see their money, said the report. But more important for credit unions, they can help members make good decisions, they can provide excellent cross-promotion value for the credit union, and they can save on staff time. * Social networking integration--Social media have become popular at credit unions, but they are not always effective at driving business results. That will change as credit unions zero in on applications that actually encourage desired behavior among members and potential members. * Purely mobile apps--Perhaps the most important of all emerging technology areas, mobile apps offer features already in demand by consumers.
What are the implications for credit unions? Even the best technology doesn’t create an edge in a strategic vacuum, said Filene. Report author Ron Shevlin, a senior analyst at Aite Group, proposed three scenarios based on the seminal 1997 book The Discipline of Market Leaders, by Michael Treacy and Fred Wiersema. The report said credit unions should prioritize very different technologies depending on which of the following strategies most closely matches their own:
* Operational excellence--Processes are optimized and streamlined to minimize cost and provide hassle-free service. This strategy demands purely mobile apps and cost-saving social media. * Product (or service) leadership--A focus on the core processes of invention, product or service development, and market exploitation. This strategy emphasizes connective social media and cutting edge mobile apps. * Customer intimacy--An obsession with the core processes of solution and relationship management. This strategy prizes streamlined ways to offer remote and detailed financial guidance.
Credit unions, Shevlin argues, can leverage any of the three strategies for a focus on member advocacy. But they can’t wait five years to decide on which option to choose, because credit union members are online at this moment, searching websites and app stores for services that meet their needs.

Southwest Corporate to hold third webinar in January

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PLANO, Texas (12/22/10)--A third webinar is being scheduled in mid-January by Southwest Bridge Corporate FCU heard details of the recommended business model for the corporate's consolidation with Georgia Corporate FCU. About 270 people participated in the Dec. 15 and Dec. 16 member update webinars hosted by Southwest Bridge Corporate. In a message to member credit unions Tuesday, Southwest Bridge CEO Dianne Addington noted that a slide presentation and audio playback of the webinar are available on Southwest's website in the Member Advisory Council Update section. "If you were unable to attend, I encourage you to review the slide presentation and the audio playback of the webinar for information on all six business models presented to the Member Advisory Board Council," Addington told members in her message, which was posted Tuesday on Southwest's website. The council approved its executive committee's recommendation on the consolidation model, and is presenting that recommendation to the National Credit Union Administration (NCUA) for approval. The mid-January webinar will review the business model and answer questions, said Addington's statement. "Members will have sufficient time to get questions answered and to provide additional feedback regarding the business model and the recapitalization process projected to occur in the first half of 2011," said Addington's statement. She noted that resources are also being developed to help credit unions present the information to their boards of directors. NCUA approval of the consolidation business plan is expected by early February, according to the webinar materials. The capital offering period will likely be from mid-February to June, with town hall meetings held in March and April. Signed capital subscription agreements, as well as escrow funds, are due by June 30. If approved, consolidation and funding of the perpetual contributed capital (PCC) account would occur in July 2011. For more information, use the links.

Mid-Atlantic Corporate VACORP to pursue merger

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MIDDLETOWN, Pa., and LYNCHBURG, Va. (12/22/10)--In a move that could be considered taking their existing partnership to a new level, Mid-Atlantic Corporate FCU of Middletown, Pa., and VACORP FCU, of Lynchburg, Va., announced an agreement in principle to pursue a merger. The management teams of both corporates will immediately begin preparing the merger documents required to be submitted to National Credit Union Administration (NCUA) for approval. Mid-Atlantic Corporate currently partners with VACORP in providing several correspondent services to members, the corporates’ release noted, and VACORP President/CEO Don Chapman said the Pennsylvania corporate has an excellent reputation as a progressive, financially sound corporate credit union. Chapman reported that the merger announcement comes after “an extensive process of analysis and due diligence by senior management and the VACORP board.” He said VACORP was looking for a plan of action that provided continuity of service for its members. “It also was important to find a solution that expands the level of quality services and innovative products that VACORP members need to succeed in today's competitive marketplace. We believe this merger will accomplish that goal.” Last August, VACORP FCU announced it had ceased processing domestic wire transfers through U.S. Central Corporate FCU, had begun processing directly through the Federal Reserve Bank, and was planning to withdraw more services. A letter to member credit unions at that time said the corporate would work with members to "transition them away from using U.S. Central's cash concentration and automated deposit transfer services" and actively pursue "alternatives to U.S. Central's securities safekeeping and international payment services.” "These actions, as well as others we will undertake in the future, will continue to ensure that VACORP and our members have viable, cost-effective alternatives to U.S. Central's products and services regardless of the final outcome of the (NCUA’s) conservatorship of U.S. Central," the letter said. The NCUA placed U.S Central into conservatorship in March 20, 2009, along with Western Corporate FCU, to conserve the credit unions’ assets and to protect the National Credit Union Share Insurance Fund and the interests of the members. VACORP plans to host a series of town-hall meetings throughout Virginia in January and February, with senior management from both corporates presenting details and answering questions. There are also plans for two webcasts for credit unions unable to attend any of the scheduled meetings. Pending NCUA’s approval of the merger, it is anticipated that VACORP members will be asked to approve the merger via mail ballot in March 2011.

CU System briefs (12/21/2010)

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* INDIANAPOLIS and WASHINGTON (12/22/10)--Counterfeit cashier's checks bearing the name of FORUM CU, Indianapolis, are in circulation, the credit union told the Federal Deposit Insurance Corp. (FDIC). The items display FORUM CU's routing number but are dissimilar to authentic cashier's checks. The credit union does not issue cashier's checks; however, it does issue bank checks. Authentic checks are blue and gray, display the phrase "VOID AFTER 180 DAYS" in the top right corner and have on the reverse side a watermark displaying the credit union's name and the words "original document." The fake checks have a security feature statement embedded with a darkened top border, with two padlock icons along the bottom border. They also display the words "CASHIER'S CHECK" in the top center, with the word "REMITTER" written in the lower left corner and the phrase "VOID AFTER 90 DAYS" in the top-right corner … * BOSTON (12/22/10)--A man suspected of being a serial bank robber and clad in a mask, hoodie and baseball cap was tackled by police officers and arrested as he walked up to a bank in Cambridge, Mass., Monday (The Boston Globe Dec. 21). The officers had Paul Gowell, 53, of Wakefield under surveillance for several days and had followed him as he circled Cambridge Trust Bank several times. When he donned a mask, "we shock and awed him," police told the publication.,He has been charged with attempted bank robbery in that incident and has been charged in the robbery of Harvard University Employee CU on Oct. 30 and another bank on Dec. 3. Police said he confessed to robbing five financial institutions over the past several months … * MILWAUKEE, Wis. (12/22/10)--Christine Moczynski has been named president/CEO of Prime Financial CU, Milwaukee, which was seized by regulators in 2009 (Journal-Sentinal Online Dec. 20). Moczynski, who has served as interim CEO since August, has been with the credit union since 1995. She was the credit union’s chief financial officer prior to being named interim CEO. On Feb. 27, 2009, Prime Financial was taken over by regulators because of a “management structure issue.” The credit union was turned over to its members in May … * INDIANAPOLIS, Ind. (12/22/10)--Gary Irvin, president/CEO of FORUM CU, announced his retirement, effective Dec. 31. Irvin cited the health of his elderly father and the arrival of another grandchild as factors contributing to his decision. “I feel the time is right both personally and for the credit union for me to make this decision,” he said. “FORUM has a solid foundation for the future and capable leadership within the board and senior executive team.” …

Moyer named Pennsylvania banking secretary

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HARRISBURG, Pa. (12/22/10)--Pennsylvania Gov.-elect Tom Corbett Tuesday announced the nomination of banker Glenn Moyer as the state's banking secretary. Moyer, 59, has spent nearly his entire career in the banking industry, most recently as president/CEO of National Penn Bancshares Inc. He currently serves as a senior adviser to the bank's CEO and as a director with the Pennsylvania Banking Association. "We look forward to working with a new banking secretary and sharing information on issues of importance to Pennsylvania credit unions," said Jim McCormack, president/CEO of the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Dec. 21).

Corporate Central ahead of NCUAs capital measures

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MUSKEGO, Wis. (12/22/10)--Corporate Central CU says it is "well ahead of all capital measures contained in the National Credit Union Administration (NCUA) corporate credit union regulations," thanks to member contributions and growing retained earnings. The corporate's member credit unions have contributed more than $60 million to perpetual contributed capital (PCC) since it started capital-building efforts in July 2009. Also, the corporate secured more than 170 new service commitments this year and welcomed 40 new full members, which brought a capital commitment and many, if not all, of their services, the corporate said Tuesday in a press release.
Click to view larger image Click for larger view
Corporate Central's current capital measurements and base case Net Economic Value (NEV) ratio, compared with NCUA's regulatory minimums are shown in the table. The corporate encouraged credit unions to perform due diligence and evaluate corporate relationships based not only on the capital measurements but also on its business model. The corporate's statement said it distinguishes itself by standing by the business model it always has had in place and which adheres to the basic principles of business: discipline of trust, discipline of integrity and discipline of stewardship. It noted its business model:
* Uses the "SLY" principle--safety, liquidity and yield, in that order--in investing; * Believes the corporate's core responsibility to be sound stewardship of members' entrusted relationship with it; * Recognizes and concentrates entirely on the primary financial institution (PFI) relationship with members, which drive long-term success; * Partners with "best in class" providers for variety of products and services, maintains expense control and allows capacity to take on a significant number of members and services, thus continuing to drive the value and volume to benefit all members. * Requires new members to invest in a non-perpetual contributed capital (NCA) account, with a future requirement to exchange part or all of the initial NCA investment to PCC to ensure health, manageable and responsible growth.
"As we near the end of yet another challenging year for our industry, it is important to note that while corporate credit unions have been lumped together and cast under a collective negative spotlight, your Corporate Central CU has had a successful year and is well-positioned for the future because of your support," President/CEO Robert W. Fouch said in a communication to members.

CUs 3Q credit card portfolios grow

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PORTLAND, Ore.--(12/22/10)--Outstanding credit card balances at credit unions grew at an annual rate of 4.4% in the third quarter, compared to a 7.9 % rate for the same period last year, according to Assets Exchange, a credit union credit card portfolio advisory and brokerage firm. Other findings from the National Credit Union Administration (NCUA) call report data provided by Highline Financial:
* The 4.4% third-quarter growth rate brought outstanding credit card balances at credit unions to $35.2 billion; * Total assets grew at an annual rate of 4.6% between September 2009 and September 2010; * Card accounts grew at a 1.76% annual rate over the same period to 13.1 million; * Cards as a percentage of total assets held steady at 4.4% in the third quarter of 2010, reflecting no change from the third quarter of 2009; * Credit card penetration continues to trend near 17%; and * Among credit unions with card portfolios larger than $1 million, two card portfolios were sold with a combined balance of approximately $12 million.

N.Y. foundations receives 20751 fin. lit grant

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ALBANY, N.Y. (12/22/10)--The New York Credit Union Foundation (NYCUF) was awarded a $20,751 financial education grant from the National Credit Union Foundation to further develop phase two of its Money & Me program. Created by NYCUF and delivered by credit unions in their communities, Money & Me is a financial education program for teens. NYCUF is one of 15 recipients nationwide to receive the financial education-related grant for 2011. Credit unions across New York state offer free Money & Me workshops throughout the year--typically during summer, winter and spring breaks. Using curriculum and interactive, hands-on activities, credit union staff and local educators teach teens essential financial skills--budgeting, saving, maintaining a checking account, managing credit and planning for the future.

Food clothing needs met by CUs

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MADISON, Wis. (12/22/10)--The holidays are often associated with good food, comfort and sharing. Credit unions nationwide are making special efforts to ensure that everyone in their communities is well-fed and warm during what can be a trying time for many. While the intent is similar in nearly every case, every credit union seems to come up with a unique, fun way to share the holiday spirit.
Proudly showing off new hats, mittens and scarves, these students at Madison School, Manistee, Mich., were among the beneficiaries of winter clothing collected by Filer CU. (Photo provided by the Michigan Credit Union League.)
* Employees and members of Filer CU, Manistee, Mich., participated in a drive to collect warm weather wear (Michigan Monitor Dec. 13). Hats, mittens and scarves were donated to both local schools and the Family Independence Agency. Also, members of Filer CU received a special holiday reward from the credit union: a 2% bonus on share dividends and loan interest. Filer CU paid a total of almost $50,000 to members. * In Pittsfield, Mass., Greylock FCU donated warm clothing for 75 children through Berkshire County Action Council’s (BCAC) Holiday Clothing Program. “All year long we have held celebrations of Greylock’s 75th Anniversary in our branches,” said Greylock FCU President/CEO Marilyn L. Sperling. “We thought this would be a fitting way to conclude the celebrations--by giving 75 children warm clothing for the winter.” BCAC Holiday Clothing Program is in the second year of returning to its original purpose of providing warm clothing for local children from low-income families.
Click to view larger image Marilyn Sperling, (left) president/CEO of Greylock FCU, Pittsfield, Mass., and Victoria May, assistant vice president, marketing promotions and partnerships manager, display some of the warm clothing the credit union collected to keep 75 children warm this winter. (Photo provided by Greylock FCU.)
* Blackhawk Community CU, Janesville, Wis., recently held a kids winter clothing drive for the five schools in the Delavan-Darien School District. The drive resulted in hundreds of items donated--coats, hats, mittens, gloves, snow pants, boots, and even hand-made scarves. The credit union also collected about $250 for the schools, which will be used to purchase additional clothing items needed by students, but not collected in the drive. * The Pennsylvania Credit Union Association provided the credit card machines to process all payments and paid the interchange fee for Coats for Kids telethon on Dec, 10, so that 100% of all contributions could go to the Salvation Army (Life is a Highway Dec. 13). About 400 Visa/MasterCard transactions, for a total of $43,100, were processed. The 22nd annual drive, sponsored by WGAL Channel 8, raised $301,328 for Salvation Army branches in Harrisburg, Lancaster, Lebanon, York, Carlisle, and Reading. A team of association employees also participated in a one-hour shift to answer phones and take donations.
Click to view larger image Kelly Herwald, (left) branch manager of Blackhawk Community CU’s Delavan, Wis., branch presented clothing and a check to Wileman Elementary School Principal Donna Sorensen. The credit union collected for five schools in the district. (Photo provided by Blackhawk Community CU.)
* In Roy, Utah, America First CU, in partnership with JC Penney, provided shoes to 500 children. The credit union has given out shoes annually as part of its shoes for the needy Christmas promotion since 1993. To date, it has provided 52,337 pairs of shoes. American First CU gave 300 pairs of shoes to elementary school students, as well as 100 military children at Hill Air Force Base and 100 children through the Box Elder County social services. The program is funded entirely by donations from credit union members and employees. America First CU employees also volunteer their time to measure each child’s feet. * Pacific Service CU, Walnut Creek, Calif., will provide nearly 96,000 meals for individuals and families this holiday season. With the 2010 donations added to funds collected last year, Pacific Service CU has provided 220,000 holiday meals to those in need in the communities it serves. * People in need living in central Missouri will have food to eat thanks to the efforts of Conservation Employees CU, Jefferson City (The Missouri difference Dec. 10). Credit union staff joined in a food drive with the Missouri Department of Conservation to collect food for the Samaritan Center, a local food bank. The drive, which took place Dec. 6, brought in more than 4,800 items. * AA CU, Fort Worth, Texas, presented the North Texas Food Bank (NTFB) with a $3,090 donation after the credit union’s week-long virtual canned food drive. Early this month, credit union employees participated in a special Dress Down Days fund-raiser, contributing $5 a day or $20 for the entire week in exchange wearing jeans and sneakers to work. The drive was part of the NTFB’s Close the Gap on Hunger in North Texas campaign. Close the Gap is the NTFB’s three-year initiative to unite the community to narrow the food gap by providing access to 50 million meals annually by 2011.

Ireland CUs reassured new bill wont effect them

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DUBLIN, Ire. (12/22/10)--Credit unions in Ireland have been reassured by Department of Finance officials that a sweeping Credit Institutions Stabilization Bill and a European Union/International Money Fund memorandum of understanding would not be used to restructure the credit union industry. The bill gives Finance Minister Brian Lenihan absolute control over financial institutions, and some provisions in the bill relate to credit unions. Officials told the Irish League of Credit Unions and other organizations that the new legislation was intended for banks and building societies--not community lenders such as credit unions, according to the Sunday Tribune (Dec. 19). However, a spokesman also said the bill and memo had to cover all the bases because the financial regulator had expressed concerns about credit unions' financial health in the past year. The league told the publication its board received a briefing from the finance department on the bill Dec. 14.

CU System briefs (12/20/2010)

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* SACRAMENTO, Calif. (12/21/10)--The leader in a credit-repair fraud ring that bilked banks, credit unions, credit card companies and car dealerships of $1.5 million to $2 million was sentenced to five and a half years in prison, plus five years of supervised release by a U.S. District judge Friday. Jerry Van Le, 31, of Stockton, Calif., had pleaded guilty to multiple counts of mail, wire and credit application fraud on Feb. 5 (Targeted News Service Dec. 17). Prosecutors said Le worked with individuals throughout the Sacramento area to create fake identities for himself and his customers so they could establish fraudulent lines of credit. He used his finance industry contacts to help build fraudulent credit histories. He furnished fraudulent paperwork including bogus pay slips, W-2 forms, letters from nonexistent employers and fake driver's licenses. Five other persons in the ring have pleaded guilty to making false statements on loan and credit applications. Four have received prison terms while the fifth is set for sentencing on Feb. 18 … * ANCHORAGE, Alaska (12/21/10)--Vicki Lynn Weidenhof, 46, former chief operating officer of Alps FCU, Sitka, Alaska, was sentenced to two years in prison plus five years of supervised released for a thrift and credit union embezzlement totaling $187,349. The sentence was rendered by a U.S. District judge in Anchorage. Weidenhof allegedly stole the funds from the credit union's general ledger accounts and deposited them in her personal account and into others' accounts during a two-year period, according to the U.S. Attorney for the District of Alaska (Targeted News Service Dec. 17) … * PORTLAND, Ore.(12/21/10)--It was a joke that turned serious, said one of two college students charged with robbing a credit union twice. Brittany Sykes, 23, a nursing student, and Emma Westhusing, 19, a college student, were arraigned Friday on charges they took $1,370 in cash Dec. 6 from Rivermark Community CU's Clackamas office. They also were indicted with taking a similar amount from the credit union's Gresham office on Oct. 18 (Associated Press Newswires Dec. 18). Sykes allegedly told a local newspaper the idea was a running joke that turned serious after they began researching robberies … * PORTLAND and STAYTON, Ore. (12/21/10)--Two Oregon credit unions have donated funds for tornado relief to victims of a Dec. 14 tornado that destroyed or extensively damaged a number of businesses and homes in the small community of Aumsville, Ore. Unitus Community CU, Portland, has 131 members in the community of 3,500 and Unitus representatives contacted each of them to find out if they needed aid. As a result, the credit union presented a $10,000 check for disaster relief to the community. "We wanted to do something quickly to show our members and citizens of the town that we care about them and wanted to offer financial help," said Patricia Smith, United president/CEO. Also, North Santiam Community CU, Stayton, a branch of NW Preferred FCU, Tigard, said it is donating $2,500 for the relief fund. "We have a number of friends and members who live and work in Aumsville," said Tracy Jones, vice president of branch operations. "It was the least we could do." … * OLD TOWN, Maine (12/21/10)--George Lozier Jr., a longtime board member of Penobscot County FCU, Old Town, Maine, died Dec. 12, according to the Maine Credit Union League (Weekly Update Dec. 17). Lozier held a variety of positions with the credit union, the league said. He was remembered as a "tireless and dedicated" volunteer who often was in the credit union lobby with a smile and greetings for other members …

Member pistol-whipped in takeover robbery

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WEST COVINA, Calif. (12/21/10)--A member of First Financial CU, West Covina, Calif., was treated at a hospital for injuries he received after he was pistol-whipped during a robbery Friday morning. Police also said an employee struck by the robbers suffered no visible injuries and declined to be taken to a hospital (WhittierDailyNews.com Dec. 17). Two men in hoodies and ski masks entered the credit union and told five employees plus members to lie down. One brandished a gun and one jumped on the counter. They ordered a manager to open cash drawers and a vault and fled with an undetermined amount of cash in a black compact car. The member was injured as he tried to enter the credit union. He confronted one of the robbers and there was a struggle. He suffered abrasions to his head.

National media cover Cheneys interchange comments

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WASHINGTON (12/21/10)--Credit Union National Association (CUNA) President Bill Cheney's comments on the impact of the debit card fee cap in the Federal Reserve's interchange proposal were picked up in dozens of national, regional and local media, including CBS News.com, ABC News.com, CNBC.com, Bloomberg, Businessweek and Huffington Post. In the Associated Press story, Cheney noted that members of credit unions and customers of small banks may feel a negative impact from the regulation even though smaller institutions are left out of the law and won't face a cap on their fees. "The legislation says we are carved out, but there's no real enforcement provisions," Cheney said. While a two-tier system with higher interchange rates for smaller institutions may result from the regulation, that creates a new set of concerns, he said. One fear is that if small credit unions and banks charge higher fees, merchants may shun their cards. If small institutions find they have to shift to the lower fees, the revenue loss would be significant, and would have to be made up from member/customers. "The last thing that credit unions want to do is raise their fees," he said in the article. The Fed's proposal caps the interchange fees at 12 cents per transition, which it says would enable retailers to pass an annual savings of $10 billion to $13 billion to consumers. But card networks and financial institutions say that retailers will pocket the savings. In addition to major markets, Cheney's comments appeared on Minnesota Public Radio, New York-based Pantagraph.com, Telegram.com, The Star Press, Mohave Daily News, Lubbock Online, The Sun News, The Springfield News-Leader, the Sun-Sentinel, Hartford Courant, the Anniston Star, Morningstar and more. The stories were also picked up in Canada on Yahoo! and in India.

Holiday giving in full swing at CUs

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MADISON (12/21/10)--At many credit unions, the holidays are in full swing with their employees, volunteers, members outdoing themselves to provide a little happiness and often the basic necessities for those who need them.
Click to view larger imageMore than 50 Warminster, Pa.-based Freedom CU employees, families and friends, along with the credit union's youth mascot, Dollar Dog, helped kick off the holiday season at the 50th Annual Hatboro Holiday Parade, which benefited Toys for Tots. Freedom participants handed out candy canes. (Photo provided by Freedom CU)
Credit unions participate in the holiday giving in a variety of ways--with parades, giving trees, holiday greetings to troops, and their annual food, clothing and toy drives. Many people benefit from their generosity: children, struggling families, the homeless, the elderly, those with special needs, and troops stationed far from home. News Now will share some of their efforts in stories this week and next. For starters here are a few efforts, some with unusual twists.
* Naperville, Ill.-based Hawthorne CU staff meeting with Families Helping Families (FHF) discovered another need that many take for granted: gasoline. "Without money for gas, it makes it difficult to shop and get to work," said Vicky Joseph, founder of the charity. "And many of our clients are trying to hold down two jobs and attend school to better their situation." As a result, the credit union and its staff donated $550 for gas cards for 22 people. One recipient is using the card so she and her four-year-old can make a holiday trip home to Tennessee--a trip she hasn't been able to afford for years. "We came to realize how hard the head of the households are working to become independent, so we wanted to give this practical gift to provide some relief and support toward their achieving success," said Carl Sorgatz, president of the $126 million asset credit union. * In Vancouver, Wash., Columbia CU teamed up with Boy Scouts troops earlier this month to give away 80 Christmas trees. It also is conducting drives for Share, a nonprofit organization for the homeless and the hungry, and for Children's Center, a local mental health agency. *
Click to view larger imageWoodstock, Ga.-based Credit Union of Georgia employees donated $1,500 to Clark Howard's "Clark's Christmas Kids" program. From left are, Laurel Howard, Clark, and Amanda Arnold, who visited the Duluth Wal-Mart to shop for more than 20 children in foster care and fulfill each child's top three wishes. Clark and AM 8750 and 95.5 FM News/Talk WSB marked their 20th year of working with the Georgia Department of Family and Children's Services. (Photo provided by Credit Union of Georgia)
In Suitland, Md., Andrews FCU joined with the Armed Forces Financial Network (AFFN) to present $3,000 in holiday gift cards to the Joint Base Andrews Fisher House, which provides comfortable and caring atmosphere where families can gain support while their loved ones are treated at the Malcolm Grow Medical Center. The $808 million asset credit union also presented an additional $3,000 in gift cards, making a total contribution of $6,000. "Families that come to be with a loved one sometimes arrive suddenly and without all their necessities," said Suzanne Curren, Andrews' director of public relations and community development. The cards help defray some of the personal expenses, she said. * In Pennsylvania, the Allegheny-Kiski Valley Chapter of Credit Unions raised nearly $500 in an auction for a local animal shelter, according to the Pennsylvania Credit Union Association (Life is a Highway Dec. 15). *
Click to view larger imageBelco Community CU employees Michelle Besic and Colleen Mateer work at the Hershey Bears hockey team's annual Teddy Bear Toss. After the Bears scored their first goal, fans "tossed" teddy bears on the ice. Belco employees and families collected 7,199 teddy bears and other stuffed animals, to be donated to local hospitals and charities at more than 25 locations. Today Belco is delivering bears and holiday cheer to the pediatric ward at a Harrisburg, Pa., hospital. Employees also donated more than $260 and 368 toys to the U.S. Marines 2010 Toys for Tots, and provided $500 in Visa gift cards to the Salvation Army Coats for Kids Telethon with WGAL. (Photo provided by Belco Community CU).
The University of Iowa Community CU is sponsoring its 15th annual "Santa's Holiday Helpers" program to assist clients of Four Oaks, a nonprofit child welfare, juvenile justice and behavioral health agency in Eastern Iowa. Participants purchase a gift for the child listed on the card and return it, wrapped or unwrapped. The gifts were delivered to the children on Dec. 14 (Iowa City Press-Citizen Dec. 6). * A variation on the giving tree is the Holiday Giving Wreath. Vantage CU, St. Louis, collected gifts, food and clothing donations and spare change for the annual Cardinals Care Party at Busch Stadium. Hundreds of disadvantaged children attend and each gets a gift. * New England FCU, Williston, Vt., announced last week it had donated $20,000 to a homeless shelter, Committee on Temporary Shelter (COTS), which focuses on families with children younger than 18. * Toys for Tots, the U.S. Marine Corps' collection drive, receives a lot of attention from credit unions all over the country. One example: Three Connecticut credit union chapters combined their efforts, for the eighth consecutive year. This year 180 individuals from 29 credit unions jointly donated more than 500 toys and $1,591 in cash from chapter coffers and raffle tickets to the toy collection program sponsored locally by the lst Battalion, 25th Marines in Plainville, Conn.

TCUF set to launch its FOCUS initiative in January

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FARMERS BRANCH, Texas (12/21/10)--The Texas Credit Union Foundation (TCUF) is set to launch its new financial literacy campaign. The initiative, Foundation Focus (formerly project NEFC), will kick off with a meeting in Dallas on Jan. 28. The core of Foundation FOCUS Network is Texans working together to improve the financial well being of others within in their communities. The inaugural meeting will focus on curriculum and strategies for implementing financial education in the community (LoneStar Leaguer. Foundation FOCUS will allow TCUF and the network to diversely impact communities of all shapes and sizes, said Staci Zale, associate director of the TCUF and Foundation FOCUS Network liaison. Among the subjects on the agenda:
* Education opportunities for children, including “Money Mammals” and “Thrive By Five,” and how encouraging smart money management at an early age is crucial; * Tips from the award-winning “Biz Kid$” television show; * The curriculum and online teaching available through the National Endowment for Financial Education; * “Debt in Focus” from the Filene Research Institute and how the online tool breaks down the barriers that prevent consumers from seeking financial guidance; * The products and services available from the Credit Union National Association (CUNA); and * The Consumer Credit Counseling Service.
A keynote speaker will be announced later. For more information, contact Zale at 469-385-6443 or at szale@tcul.coop.

International fundraising emphasizes causes

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MADISON, Wis (12/21/10--Credit unions are a worldwide movement, and U.S. credit unions have extended their cause marketing efforts wherever a helping hand is needed. Sometimes that translates to helping credit unions in other countries during times of crisis. When another world region is need of aid, the World Council of Credit Unions (WOCCU) typically appeals to the international credit union community for funds to assist with relief efforts in those areas. WOCCU’s foundation, the Worldwide Foundation for Credit Unions, often works with the National Credit Union Foundation (NCUF) to raise funds and organize relief efforts among U.S. credit unions. WOCCU worked closely with SANASA, Sri Lanka’s credit union federation and central liquidity facility, to rebuild damaged credit unions when South Asia was hit with a devastating earthquake and tsunami Dec. 26, 2004. The NCUF appealed to U.S. credit unions in support of WOCCU’s efforts. All told, U.S. credit unions, through their credit union leagues, contributed more than $726,090 to tsunami relief efforts (News Now June 13, 2005). As an example of how the leagues supported the efforts, the New York Credit Union Foundation (NYCUF) collected $63,906 in donations for relief of the tsunami victims in Indonesia. Fifty three New York credit unions, 58 individuals and the Metropolitan District of the New York State Credit Union League banded together to collect the funds, which were donated WOCCU(News Now Feb. 24, 2005) . Among the credit unions participating in the tsunami relief efforts was Mid-Hudson Valley FCU, Kingston, N.Y. Collection boxes were placed in each of their five offices while the credit union’s community relations committee announced they would match donations up to $2,500. With contributions from employees, members, two community organizations and the matching funds, Mid-Hudson Valley FCU raised $7,215.61. In January, when Haiti was hit with a devastating earthquake, credit unions from around the world--again—responded with funds and other assistance. For example, staff and volunteers from MAFCU FCU, Brookline, Mass., packed 66 boxes of sheets, pillows, and pillow cases on a Saturday in May at its Cover Haiti with Love event to benefit Haiti. The members and employees of State Employees CU, Atlanta, collected over-the-counter medications, such as ibuprofen and multi-vitamins, to benefit Haiti. The supplies were delivered to a hospital in Haiti on March 20 to provide medical care to approximately 800 people, including children, in a local community. In an April press release, WOCCU reported that donations from credit unions, individuals and credit union groups worldwide to its Haiti relief fund had surpassed the $1 million mark. The fund, which provides immediate relief to victims of the earthquake, also is used to finance the rebuilding of Haiti's credit unions so they can assist members and support local relief efforts. Most times the causes are ongoing. Serving the financial needs of the United Nations staff, UN specialized agencies, former international civil servants and their families globally, UN FCU, New York, has a global focus as part of its mission. UN FCU recently joined the United Nations Secretary-General’s Campaign UNITE to End Violence Against Women, according to a press release from the credit union. The UN Trust Fund to End Violence against Women supports women’s organizations and projects around the world to reduce and end such violence. UN FCU will match donations made by Dec. 31 up to $3,000. Sometimes relief comes by providing resources such as technology to help rural credit union members. WOCCU is developing a technology to provide affordable financial services to Latin American and African families who can’t get a loan or join a credit union--by providing them with cell phones through a donation program. The rural families live hours away from the nearest financial institution. Through WOCCU’s mobile wallet campaign, a $30 cell phone provides families the opportunity to start a savings account or apply for a small business loan from the palm of their hand--a day’s time and wages spared. The cell phone will serve as the members’ passbook, checkbook and online access to the credit union. Whether it’s a natural disaster or the day-to-day challenges that credit unions and the people they serve are faced with credit unions make a difference globally. (Editor’s note: This is the fourth and final part of a series of articles News Now has been featuring on credit unions and cause marketing.)

Southland Member referrals--not ads--prompt growth

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LUFKIN, Texas (12/21/10)--Member referrals have led to an increase in membership, making 2010 a good year for Southland FCU in Lufkin, Texas, according to CEO Jonathan P. Matthews. As of Sept. 30, the $20.2 million-asset Southland FCU saw membership growth of 6.45% and a 14.05% loan growth (LoneStar Leaguer Dec. 17). “Our membership growth and strong loan growth have helped our credit union survive during these most difficult financial times we are all facing,” Matthews told the Texas Credit Union League. “We have tracked this growth and it is proven over and over again that this increase is due to member referrals. “People will tell others if you offer good service, and will tell others if you don’t,” Matthews added. “We attribute our member referrals to the service our employees provide and to the staff believing in ‘where people helping people really matters.’” He noted the growth did not stem from ads, yard signs or banners.

More than half of Vermont CUs do background checks

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SOUTH BURLINGTON, Vt. (12/21/10)--The Association of Vermont Credit Unions recently conducted a survey asking member credit unions about their practices regarding the use of background checks on potential new employees. Results showed more than half perform checks. The survey’s main question asked if the credit union conducted background checks on applicants and/or new employees. More than half indicated they did, with three clarifying that they pulled a credit report after obtaining written consent from the applicant (NewsLines Express Dec. 17). More than 80% of those who conduct background or bondability checks use an outside agency, with the rest performing their checks internally. Also, all respondents said they do not conduct background checks on current employees. The breakdown of what kinds of information accessed in the background checks was varied, with credit unions asked to check all that apply from a list that included credit reports, criminal records, past employers, education and references. Other options included professional licenses, medical history and driving record. However, these three options were not selected by any survey responder. Less than half the respondents said that they felt sufficiently informed about which circumstances require permission to conduct a background check and/or give notices to prospective employees. Survey responders represented a cross section of all sized credit unions, ranging from those with less than five employees to those with more than 100.

Puerto Ricos co-op committee holds hearings on insurance

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SAN JUAN, P.R. (12/20/10)--The Cooperative Committee of the Puerto Rican Chamber of Representatives held hearings Thursday on circumstances surrounding the resignation of the president of the Public Corporation for the Supervision and Insurance of Puerto Rican Cooperatives (COSSEC), a regulatory oversight group for cooperatives, including credit unions. The committee met for four hours Thursday, during which time it heard from Jose Gonzalez Torres, the former president of COSSEC, who indicated he was pressured to act favorably toward various requests and forced out of COSSEC when he resisted (El Nuevo Dia Dec. 17). COSSEC has a new acting president: Carmen Yolanda Pagan, said news reports. The issue stems from high delinquencies in Puerto Rico and what measures credit unions and the agency are taking to mitigate losses. Puerto Rican credit unions are facing high delinquencies and were looking into ways to sell some credit union loans to a nonfinancial institution. Some call the matter a "bailout," and Gonzalez Torres blocked the sale, said local newspapers reports (El Neuvo Dia and The Daily Sun Dec. 8). Delinquencies continue to rise in Puerto Rican credit unions, but their delinquencies aren't as deep as those at the country's banks, according to information provided by the economics and statistics department at the Credit Union National Association (CUNA). The Puerto Rican legislature is probing what is going on in COSSEC and credit unions. Proceedings surrounding the dismissal of Gonzalez Torres likely won't become public, sources familiar with the matter told News Now. COSSEC's mission is to guarantee the continuity and permanence of Puerto Rico's cooperatives, via regulatory and supervisory duties, and to protect members and depositors through effective use of human and technical resources, said the Sun. Two years ago, a new government agency, the Commission for Cooperative Development (CDCoop) was formed. It is represented on the COSSEC board and allegedly is involved in the situation, although reports did not indicate what the involvement entailed. Credit unions must get COSSEC approval to open new branches and some turf issues among the cooperatives have spilled into the COSSEC board, the reports said. Integration of Financial Services Coop (Integra Coop) had sought approval for $200 million in funding to buy toxic loans from local cooperatives, but the funding agency said it had not approved the loan, according to Sen. Soto Villanueva, who initiated the government's probe (The Sun.

Two arrested for attempted murder at CUs ATM

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GAINESVILLE, Fla. (12/20/10)--Two suspects have been arrested and charged with attempted murder after someone shot at a man Thursday night at an ATM outside Sunstate FCU's Alachua, Fla., branch. Derae Jenkins, 18, and Richard Addison, 24, Gainesville, were arrested, and a third man was still at large, said Alachua police (Gainesville Sun and North Florida Herald Dec. 17). The shooting occurred at 11:15 p.m. Thursday. The victim told police he had withdrawn cash from the credit union's ATM, returned to his car and was leaning forward to start the engine when a gunshot shattered the driver's side window of the car. Police said someone was trying to kill the man. He was not hit, but drove to the police department. The man said he saw a white Ford Explorer in the shadows of a neighboring business. When police arrived at the scene of the shooting, the Explorer was still sitting there, and three men jumped out and fled. Addison was caught as he fled, and Jenkins was arrested later. Police found a gun inside the vehicle, which had been reported stolen two days earlier.

CU System briefs (12/17/2010)

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* NAPERVILLE, Ill. (12/20/10)--Thirty representatives of the
Click to view larger image Click for larger view
Decatur, Ill., chapter and credit unions are getting acquainted with newly elected members of the 97th Illinois General Assembly. They met Tuesday at a "meet and greet" luncheon with Illinois State Rep.-elect Adam Brown (R-101), who will be one of nearly 25 new members of the next assembly beginning Jan. 12. Also attending were incumbent state lawmakers, Sen,. Kyle McCarter (R-51) and Rep. Bill Mitchell (R-87). "This event was held because we were eager to reach out to our new lawmaker and provide him with an introduction to credit unions," said Karen Woods, chapter legislative forum representative. "This was the beginning of building a relationship with him so he is familiar with us when considering legislation related to financial services and specifically credit unions." Keith Sias, Illinois Credit Union League director of state governmental affairs noted that "the chapters are an important link in the league's on-going efforts to show the importance of credit unions in the financial marketplace." From left are McCarter; Mitchell; Woods; Sias; Larry Preston, vice president, Staley CU, Decatur; Brown; Dawn Strohl, chairman, Decatur Area Chapter, and Karen Brown, CEO, Staley CU. (Photo provided by the Illinois Credit Union League) … * HARRISBURG, Pa. (12/20/10)--The Pennsylvania Credit Union Association (PCUA) and three state-chartered credit union leaders had lunch Thursday with outgoing state Secretary of Banking Steve Kaplan to thank him for his support of credit unions during his term. They discussed the Consumer Financial Protection Bureau, Credit Union Better Choice, Internet activities of payday lenders; regulatory restructuring process; and maintaining dual state and federal chartering options during the economic crisis. From left are PCUA President/CEO Jim McCormack; Lonny Maurer, CEO, Belco Community CU; Debbie Peters, CEO, Incol CU; Kaplan; and John King, chief operating officer, Freedom CU. (Photo provided by the Pennsylvania Credit Union Association) … * GREENSBORO, N.C. (12/20/10)--Congresswoman-elect Renee Ellmers (R N.C.) and staff member Steve Howell visited Coastal FCU's -Garner, N.C., branch Dec. 10 to learn more about credit unions and share her legislative priorities. Coastal CEO Larry Wilson and Chief Operating Officer Chuck Purvis shared information about Coastal and about the credit union difference. North Carolina Credit Union League's Dan Schline, senior vice president of association services, and Mickey Fanney, director of political affairs, spoke with Ellmers about key legislative issues facing credit unions as the 112th Congress prepares to convene. Ellmers' message centered on supporting small businesses and community-based financial institutions like credit unions through smaller government and less regulation. Ellmers, center, is shown with two branch staffers. (Photo provided by the North Carolina Credit Union League) … * TUMWATER, Wash. (12/20/10)--O Bee CU President/CEO Bruce Cramer will retire at the end of the month, after nearly 25 years at the credit union. He joined O Bee in 1986 after spending eight years as CEO of a Teamsters credit union in Portland, Ore. During his tenure O Bee grew to $130 million in assets from $20 million. James Collins, previously the credit union's chief financial officer will succeed Cramer. A profile about Cramer was featured in The Olympian (Dec. 17) …

Kimbell named Vermont BISHCA commissioner

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BURLINGTON, Vt. (12/20/10)--Vermont Governor-elect Peter Shumlin named Steve Kimbell as commissioner of Vermont’s Banking, Insurance, Securities and Healthcare Administration (BISHCA), said the Association of Vermont Credit Unions. BISHCA houses state-chartered credit unions’ regulatory agency. Recently retired, Kimbell has headed the state legislative practice of Montpelier firm Kimbell, Storrow, Buckley & Hughes, which is affiliated with Vermont's largest governmental and public relations firm, Kimbell Sherman Ellis, LLP (Newsline Express Dec. 17) Kimbell served as Gov. Madeleine Kunin’s planning director in the mid-1980s, formulating and implementing her legislative program. Prior to working for Kunin, he practiced law with Vermont Legal Aid. Kimbell will succeed current commissioner Michael Bertrand, who was appointed earlier this year by outgoing Gov. Jim Douglas.

Maine CUs sign up for Gen Y program

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PORTLAND, Maine (12/20/10)--Statewide cooperation and collaboration among Maine’s credit unions have made a difference in its Statewide Awareness Program during the past few years, and especially will do so in 2011 with a new targeted program reaching young adults, said the Maine Credit Union League. “With credit unions’ commitments through a voluntary funding campaign that supplements the Statewide Awareness funding, we have reached our goal to fund the licensing rights and spokesperson for Young & Free Maine,” said John Murphy, league president, in the league’s newsletter, Weekly Update (Dec. 17). “We are very thankful to Maine credit unions that have provided additional support to the expanded campaign,” he added. “There has never been this excitement for a statewide campaign, and it is a very positive marketing initiative for the New Year and, hopefully, a more positive financial services environment.” To date, nearly 75% of the state’s credit unions have responded with financial support of the national program slated to start next April and rollout at the Maine league’s 2011 Annual Meeting and Convention. The Young & Free program, developed by Currency Marketing, reaches people 25 and under by hiring a spokesperson in that age bracket to develop relationships between Gen Y and credit unions, the league said. At least two other credit union associations--Missouri and Mississippi--and other credit unions have signed on with similar Young and Free programs. The program’s spokesperson will create videos, blog, and tweet financial tips and advice directed at Gen Y, while promoting Maine’s credit unions. The spokesperson also will attend select Maine credit union events and post pictures and videos. The spokesperson will have expertise in social media and will provide Maine’s credit unions with an opportunity to learn and use online media. All data will be tracked and shared with credit unions, said the league. So far, 47 Maine credit unions have contributed to the campaign, the league said.

N.J. league fin. ed. coalition announce partnership

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HAMILTON, N.J. (12/20/10)--New Jersey credit unions have made a three-year sponsorship commitment, beginning in 2011, to support the New Jersey Coalition for Financial Education (NJCFE) to advance financial literacy and education throughout the state and the region.
Members of the New Jersey Credit Union Coalition for Financial Education are, from left: Beth Degnan, Affinity FCU; Eileen Crean, Members 1st of N.J. FCU; Tracy Sussmann, MidState FCU; Ann South, Novartis FCU; Paul Gentile, New Jersey Credit Union League; Maryanne Evanko, New Jersey Coalition for Financial Education; Shawn Gilfedder, McGraw Hill FCU; and Sam Ingram, McGraw Hill FCU. (Photo provided by New Jersey Credit Union League.)
“Financial literacy is one of the core missions of New Jersey credit unions,” said Paul Gentile, president/CEO of the New Jersey Credit Union League and treasurer for the New Jersey Credit Union Foundation (The Daily Exchange Dec. 17). “In these tough economic times, it’s never been more important to provide quality financial literacy programs. With the new state mandate for financial curriculum coming, we wanted to act now to do our part,” he added. “[The coalition] and the citizens of New Jersey are very fortunate to have the leadership and advocacy that comes from credit unions at the helm of our state’s financial sector,” said NJCFE President Maryanne Evanko.

CUNA offers Board Financial Literacy Certificate

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MADISON, Wis. (12/20/10)--In response to a recently issued National Credit Union Administration (NCUA) requirement regarding board financial literacy, the Credit Union National Association (CUNA) is helping credit unions prepare by offering a board financial literacy certificate. To offer flexibility in fulfilling the NCUA requirement, CUNA offers several options for obtaining the certificate. An entire board of directors may complete the certificate at once or it may be earned on an individual basis. To earn the CUNA Board Financial Literacy Certificate, directors must fulfill one of four options:
* Attend the CUNA CU Finance for Non-Financial Managers & Volunteers eSchool, May 4 through June 15; * Attend the CUNA CU Finance for Non-Financial Managers & Volunteers School, April 3-6, in Nashville, Tenn.; * Complete six self-study CUNA Volunteer Achievement Program courses; or * Book an in-house training session. A subject-matter expert will be available to travel to credit unions for a two-day presentation of a targeted financial literacy curriculum. For further information, contact ksmith@cuna.coop, or call 800-356-9655, ext. 4261.
Upon completion, participants must pass appropriate assessment(s) to earn the certificate. Also, CUNA is preparing an audio conference for January that will give credit unions an overview of the new NCUA rule and suggested training options on how to meet rule’s requirements. The recent requirement issued by the NCUA imposes a new financial literacy rule. The mandatory level of financial literacy will depend upon each individual credit union’s complexity. This rule was issued as a result of an increasingly complex financial industry landscape. Also, credit union losses and an escalation of sophistication of credit union finances have created heightened concern over direct fiduciary responsibility. The NCUA would like to ensure that credit union directors have a sufficient working knowledge of their credit union’s financials going forward. The significant points of the rule require directors to have:
* At least a working familiarity with basic finance and accounting practices; * The ability to read and understand their credit union’s balance sheet and income statement; and * The knowledge to ask, as appropriate, substantive questions of management and internal and external auditors.
For more information about the certificate and the new requirement, use the link. For questions, contact 800-356-9655, ext. 4249 or training@cuna.coop.

Fundraising events are serious fun

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MADISON, Wis. (12/20/10)--While cause marketing is serious business, the events that support it involve fun and creativity. There are many creative fundraising ideas from credit unions involved with CUs for Kids. For example, each year employees from Rivermark Community CU, Beaverton, Ore., partner with the Safeway Bread Plant in Clackamas to produce and package thousands of pounds of cookie dough for its Dough for Doernbecher drive. The credit union sells sugar-cookie dough for $5 a five-pound bag and chocolate-chip cookie dough for $7.50 per five-pound bag. All ingredients are donated, and all proceeds benefit Doernbecher Children's Hospital. In its 26th year, the event raised over $50,000 for the local children's hospital in 2009. Since 2006, iQ CU, Vancouver, Wash., and Fibre FCU, Longview, Wash., have sponsored a credit union charity mortorcycle ride to benefit Doernbecher Children’s Hospital The event began in 2006 and raised $16,000. This year, 130 riders took part, and they raised more than $32,000. “Our hope is that it continues to grow, and becomes a premiere event in the area,” said Brad Wood, information systems manager at iQ Credit Union. Cascade Community CU, Roseburg, Ore., is conducting its fifth annual Christmas tree auction to benefit Credit Unions for Kids. Each employee is provided with a tree ranging from 18 inches to 4 feet in height and $25 for decorations. Most employees choose a theme and solicit additional gifts from local businesses. As of Thursday, the event had garnered $4,600 in bids with one day left; and a dollar for dollar Co-Op Miracle Match grant from CO-OP Financial Services will potentially total nearly $10,000. For the past 10 years, Cascade Community CU also has hosted a one-day rummage sale to benefit Credit Unions for Kids. Members can reserve a space to sell their valuables for $25, or $35 for a covered space. As the credit union tells its prospective sellers: “We provide the space. We provide the advertising. You provide the treasures.” The credit union also sells hot dogs and Pepsi has donated beverages for the event. Last year the event raised about $1,200. Cascade Community CU also offers its an annual “We Will Rock You” raffle for a truck load of gravel. (Yes, gravel) The promotion began when a credit union employee suggested the idea because she knew someone who worked at a local gravel company. The raffle has been a big hit with members with homes needing the gravel for landscaping. Casey Buller, vice president of marketing at the credit union, said the event raises about $2,000 annually for Credit Unions for Kids. “It just goes to show that a raffle prize doesn’t have to be a car or expensive getaway,” said Buller. “People want something functional too, something they can use.” In the Midwest, deer hunting is as much a Fall tradition as Halloween and Thanksgiving. The Minnesota Credit Union Foundation uses that tradition to help others with its Credit Union for Kids Big Buck competition. The event is a team competition. The credit union team with the highest number of total antler points for the top five deer is the winner. The first place credit union/organization receives a traveling trophy and makes a $200 donation to the Children’s Miracle Network Hospitals. (Editor’s note: This is part three of a series of articles News Now is featuring on credit unions and cause marketing.)

Operations Council white paper addresses CRM strategies

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MADISON, Wis. (12/20/10)--Data have become essential raw material for American business, almost on a par with capital and labor, according to “CRM Strategies,” a white paper sponsored by CUNA’s Operations, Sales and Service Council. It is hard to pinpoint precisely when the digital transformation took place, but it had its tipping point in Y2K when organizations rebuilt technology architectures and prepared for a meltdown that failed to materialize. The preparation for Y2K underscored the notion that financial institutions have more information on their customers than does any other industry. This data wealth is a tremendous advantage for those organizations that use and analyze information wisely. Those institutions--typically large credit unions and banks--that use data wisely often succeed in besting their competitors and will likely continue to do so in the near future, the paper said. “CRM Strategies” examines the elements credit union can consider in developing a customer relationship management (CRM) strategy. Credit unions that have achieved a high degree of competence in this process are profiled as well. CRM is a sales and service culture enabled by technology, according to the paper. The operative phrase is “enabled by technology.” CRM is not a technology solution but a cultural and a people transformation; it is in its true essence a state of mind--held by management and staff--that puts the member first in all interactions, the paper added. The benefit for tellers and other end users is when a member’s entire relationship with the organization is displayed on one screen or is one or two clicks away. However, most financial institutions do not use it efficiently. Marketing decisions are based on looking backwards to past behaviors and placing consumers into demographic groups or subgroups. Demographic data has its place and worth, but it doesn’t provide insight into the frequency of use by the member of their channel and product preferences, and it does not use these or other variables to ascribe value to its consumers. To the member, the CRM process is invisible and seamless but the effect can be profound. Members need only tell their story once, instead of in each new call. This is part of an evolution that the financial services industry is undergoing where a marriage of data, financial relationships and predictive analytics are making assumptions of potential buyers and their future behaviors, the paper concludes. For more information, use the link.

Federation urges NCUA Boost training for CDCULICU exams

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NEW YORK (12/17/10)--The National Federation of Community Development Credit Unions has written a letter to the National Credit Union Administration (NCUA) Board urging the agency to increase its examiners' training related to examinations of community development credit union (CDCU) and low-income credit unions (LICUs). The letter is in response to NCUA's announcement that it plans to expand its examiner ranks so it could provide increased examination coverage for credit unions nationwide. Citing concerns from CDCUs and LICUs that examiners have been inconsistent in examining these credit unions, federation President/CEO Cliff Rosenthal submitted a letter to the NCUA Board requesting that new examiners hired have access to specialized training on CDCUs and LICUs. "In a number of meetings over the last 10 years, agency staff has confirmed that new or less experienced examiners are often assigned to small and low-income credit unions, presumably because these are less complex institutions that represent a smaller degree of material risk to the National Credit Union Share Insurance Fund (NCUSIF)," Rosenthal said in the letter. However, he added, "because LICUs and CDCUs often do not fit the mold or demonstrate the ratios and operating characteristics of other credit unions, the examination process has often been a rather rocky one… As some of our CDCUs have put it, they have needed to 'educate the examiners [themselves]." While credit unions have reported that implementation has not always been uniform, Rosenthal praised the agency for its efforts to date, referring to the agency's supervisory letter on examination of LICUs and CDCUs, and stressed the need for more consistent implementation. "Given the stress in the credit union industry, and especially in view of the vulnerability of many of our smallest institutions, it is especially important that new examiners are well-trained on this document," he said, adding that training "will be an integral and significant part of the orientation of new, as well as existing, NCUA examiners." Thursday NCUA also announced two rules related to the low-income definition and data determining whether membership fits the low-income definition. (See related story in News Now's Washington section on "NCUA addresses low-income members, CUs during meeting.") The federation and the Credit Union National Association (CUNA) have worked with NCUA for years to provide guidance to examiners working with LICUs and CDCUs. CUNA also has urged increased examiner training. CUNA's Small Credit Union Committee worked with the federation and NCUA to ensure examiners know the operational differences allowed LICUs and CDCUs prior to NCUA's January 2010 CDCU/LICU Examiner Guidance Letter (10-CU-01) (News Now Jan. 19).

Web Hunt turns CU site into virtual board game

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GAITHERSBURG, Md. (12/17/10)--CFE FCU has turned its website into a virtual board game for its members, getting thousands of them to explore deep within the site and its Facebook page. CFE FCU’s “You Deserve the Best” Web Hunt game allows members and prospects to explore its website to search for interactive game pieces strategically placed on different pages. During the eight-week campaign, members/players have a chance to win 10 different prizes totaling $3,000 by finding game pieces that correspond to the prizes. When players collect all 10, they are entered for a chance to win a grand prize of $1,000. The promotion runs through Dec. 31 and prize drawings will take place in early January. “The game has created a lot of excitement--especially on Facebook, where visitors could send a ‘shout-out’ to their best friends and receive a free T-shirt or lunch cooler,” said Suzanne W. Dusch, vice president of marketing for CFE FCU. “In fact, CFE’s Facebook friends more than doubled in just two weeks, exceeding 2,200 friends as of Nov. 30.” The CU Web Hunt System, designed by the marketing technology company Code Green, works by using CFE FCU’s entire website as the “game board” for the interactive treasure hunt. A web hunt campaign provides incentives for members to hunt for interactive game piece icons, while exploring its rates, services and strategic pages. CFE FCU, for example, incorporated the system to broaden its members’ knowledge of the ways the credit union helps them with their financial paths. Visits to CFE FCU’s website have increased and time-on-page has doubled since the game began. The credit union embedded one of the game pieces on Facebook and has gone from 944 friends to over 2,200 in a few weeks. Comments on the credit union’s Facebook page have increased dramatically. One recent posting asked players which prize they hope to win and CFE received nearly 50 comments from friends. “On the subject of Facebook, it’s interesting to note that we’ve had a couple of players who couldn’t find one or more game pieces,” Dusch explains. “They comment on our page that they’re having trouble, so we’re able to respond with hints and helpful guidance and they appreciate it. We’ve even contacted a couple of players one-on-one to help them on the game and ensure they have a positive game experience.” CFC FCU has $1.1 billion in assets. (See related story in News Now’s system section, “To woo members, CUs turn to contests”)

Lake Michigan CU aims to double business loans

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GRAND RAPIDS, Mich. (12/17/10)--Lake Michigan CU in Grand Rapids, Mich., aims to double its amount of member business loans (MBL) next year to take advantage of what it says is a marketplace void created when banks cut back on lending during the recession. The credit union took action to bolster its commercial lending arm by hiring a commercial lender to work in specific markets in 2011 (mlive.com Dec. 16). “We’re trying to do business where we have people and operations,” Mark Hofhines, senior vice president of commercial lending at Lake Michigan CU, told the publication. “There are a lot of good customers that are not getting what they deserve.” The credit union, which has 31 offices in West Michigan and assets of $2.07 billion, grew total MBL by 55% to $35.1 million from September 2009 to September 2010, according to a quarterly financial report filed with federal regulators. The credit union has a backlog of $15 million in loans, Hofhines told mlive.com. Statewide, Michigan credit unions grew MBL 22.9% for the 12 months ending Sept. 30, according to the Michigan Credit Union League. The article also mentioned Honor CU in St. Joseph, and First Community CU in Parchment for their MBL growth. The Credit Union National Association and credit unions are trying to get Congress to increase credit unions’ MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $10 billion in loans into the economy and create as many as 100,000 new jobs, with no cost to taxpayers. To read the article, use the link.

To woo members CUs turn to contests

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MADISON, Wis. (12/17/10)--Credit unions are wooing members--be they potential new members or existing ones--by turning to contests that entertain, reward members for good financial habits, add good will, and provide some financial education.
Click to view larger image Jim and Cheryl Shaw and children Cassidy and Jack walked away with $10,000 after beating out eight other families in Florida Commerce CU's weLiveFIT! Challenge. The family increased its savings to $3,016, reduced debt by $2,798, and boosted credit scores by 161 points. (Photo provided by Florida Commerce CU)
Tallahassee, Fla.-based Florida Commerce CU (FCCU) is a case in point. Earlier this month, it presented the $10,000 grand prize in its second weLiveFIT! Challenge to the Shaw family, who beat out eight other families competing to see who could improve their household finances the most. Jim and Cheryl Shaw, and their children Cassidy and Jack, emerged the winners after increasing their savings to $3,016, reducing their debt by $2,798 and boosting their credit scores by 161 points. "Although only one family received a check for $10,000, each family gained invaluable money management skills that will guarantee them long-term financial independence," said Samantha Strickland, vice president for growth and brand management at FCCU. The Middleton and Mallory families received $2,500 and $1,500, respectively, for making it to the final round. Florida Commerce provided the nine families with a personal finance coach during the 10-month competition. The families increased their credit scores by 422 points, decreased debt by $32,400. They saved a combined $34,901, compared to their $2,698 combined savings in March. Thousands of people followed the families' financial struggles and successes on Facebook and Twitter and in their blog and video postings on weLiveFITChallenge.com. They received more than 45,000 votes from the public in June, September and November to determine which families progressed to the next round. In the last two weeks, nearly 14,000 votes were cast online. "The increased community involvement this season made this competition bigger and better, and we hope each family continues to live financially fit," said Strickland.
Click to view larger image Karolyn Wells, left, CEO of EdCo Community CU, Des Moines, Iowa, presents EdCo member Jana McLeod with the winning prize--a 32-inch LCD TV--in a national contest sponsored by the credit union's data processor, CU Answers. (Photo provided by EdCo Community CU)
Sometimes the credit union isn't the sponsor of a contest but a partner is. That happened when Jana McLeod, a member of EdCo Community CU, Des Moines, won a Sony Bravia 32-inch LCD TV. She was automatically entered into a national contest sponsored by EdCo's data processor, CU Answers, when she enrolled in the credit union's Online Bill Payment service and was randomly selected by CU Answers as the winner. More than 2,100 total entries were received from 51 participating credit unions. Karolyn Wells, EdCo CEO, said the contest was a great way to encourage EdCo members to take advantage of the ease and convenience of EasyPay and to begin paying bills online. Other recent competitions:
* In Riverside, Calif., Altura CU presented an Apple iPad to member
Click to view larger image Jessica Larson, a member of Riverside, Calif.-based Altura CU, shows off an Apple iPad she won for using her Altura Visa debit card during the credit union's promotion. (Photo provided by Altura CU)
Jessica Larson of Corona after she used her Altura Visa debit card. Every time cardholders used their card for purchases between Oct. 18 and Nov. 30 they were entered to win the iPad. "We created this promotional campaign to spread the word about Altura's Visa debit card and how easy it is to use for everyday purchases," said Jennifer Binkley, chief operating officer. * San Mateo CU, Redwood City, Calif., presented a 2011 Honda CR-Z Sport Hybrid to Teresa Guiterrez, a member for the past 10 years, as part of its pre-holiday car sale promotion. SMCU had mailed members a key, and Guiterrez's key fit the lock box. Her win came on the first day of the credit union's car sale. "The key giveaway is the highlight of the sale, said SMCU President/CEO Barry Jolette, "and it's always a treat to see the expression on the face of the winner." * Dublin, Ohio-based Ohio Healthcare FCU celebrated its loyal members and paved the way for an upcoming marketing campaign by rolling out its Next Top Credit Union Member contest in October. The contest sought applicants who could share a story about how the credit union made a difference in their life. Applicants fell into three contest categories and were asked to submit a short video about "How has OHCFCU made a difference in your life?" Nine videos were posted on the credit union's microsite, www.nexttopcumember.com. The public cast more than 41,000 votes in two weeks for their favorites. Each winner received $500 and their photo and testimonial will be used in an upcoming marketing campaign. "We want to roll out a campaign that highlights real members and real stories to encourage membership growth and credit union recognition," said Jaime Crooks, marketing director. * FORUM CU, Indianapolis, used savings goals as the basis for its SaveItUp Challenge. Participants entered to win three cash prizes once they enrolled in the program, completed four out of seven financial steps, and met at least one goal. Goal categories were savings, debt reduction and financial education. Savings goal winner Thomas Hasler and debt reduction goal winner Mitchell Butler each won a $3,000 Weekly 5 Club Account, while financial literacy prize winner Eric Normington won the $1,500 Weekly 5 Club prize. * GECU in El Paso, Texas, announced Heather McBride, a physical therapist, as the winner of its year-long competition, GECU Savings Challenge 2010: Back in the Black. McBride won $10,000 after tackling a new mortgage, student loans and other debt. She beat out five other participants in this year's challenge. Since the annual challenge began in 2007, participants have saved more than $174,000 and reduced debt by more than $281,000. * Vantage CU, Bridgeton, Mo., recently awarded $5,000 to Geannette Loftin Walls, who was one of 4,000 qualifying members taking part in the credit union's University of Savings campaign, which began in April. It encouraged savings by setting up automatic transfer to special savings. Walls set up an automatic transfer of $10 a month into an existing special account in April. "Our goal with this campaign was to encourage people to start saving in an automatic and ongoing way," said Kathy Palmer, vice president of marketing. "The promotion was a great success; many of our members continue to build on their savings."
And judging from the smiles on the faces of the winners in most of the photos News Now receives about the competitions, the contests work.

CUs for Kids a cause-marketing model

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MADISON, Wis. (12/17/10)--Credit Unions for Kids provides a model of how credit unions can work together to serve a cause, and how individual credit unions come up with a virtually endless list of ideas to raise funds and make a difference in their communities. The program traces its roots to 1986 when seven CEOs in Oregon and Southwest Washington got together and raised $1,700 for Doernbecher Children’s Hospital. The program also began in Texas around the same time. In 1996, Credit Unions for Kids partnered with Children’s Miracle Network (now Children’s Miracle Network Hospitals). Today, Credit Unions for Kids collaborate with credit union chapters, leagues, trade organizations, publications, and business partners to raise funds to benefit 170 Children’s Miracle Network Hospitals. CEO involvement is critical to the success of any cause marketing program, said Kasey Rockwell, director of credit union development for the Credit Union Association of Oregon. “We’ve always had two CEOs who are co-chairs and in the beginning were really leaders in the community,” Rockwell added. “They encourage CEOs and other credit unions and put out challenges to come on board and start fundraising. Pretty soon the associations and leagues were supportive of the program as well.” Credit Unions for Kids is “near and dear” to Rockwell’s heart. In addition to working with helping credit unions raise money for Credit Unions for Kids in her current job, Rockwell’s father, Gary VandeVenter, was one of the original seven CEOs who started the program. VandeVenter was CEO of Northwest Farmers Insurance Group FCU--now Northwest Preferred FCU. Rockwell added that support from the CEO and the board is important internally and it is important to gain buy-in throughout the organization. To encourage buy in from employees show them what the charities do. Give them a tour. Or offer them volunteer opportunities. Rockwell makes sure she carves out time to take credit union employees on hospital tours. The Doernbecher Children’s Hospital Pediatric Intensive Care Unit is named after Credit Unions for Kids because of the organization’s fundraising. “When you get [employees] up there and they see what a difference they are making in helping kids have a better stay, it has a huge impact,” Rockwell said. Credit unions can start small and still have a big impact, she said. She served on a committee at First Tech CU, Beaverton, Ore., which held a Credit Union for Kids fundraising auction in the late 1980s. Back then, the auction items were mostly donated by employees, and might include such items as a batch of cookies each month for a year, or a day of water skiing with lunch served. Now hosted by OnPoint Community Credit Union, Portland, Ore., credit unions from Oregon and southwest Washington donate items, and this year the auction raised $124,000, with more than 250 people attending. (Editor’s note: This part two of a series of articles News Now is featuring on credit unions and cause marketing.)

Greater Nevada CU scholarship receives national recognition

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CARSON CITY, Nev. (12/17/10)--Greater Nevada CU’s scholarship program was recently named one of the “Five Best Scholarships for Nevada Residents” by NewsMax, a national news media organization.
Carson High School graduate Justin Barlow in Carson City, Nev., was one of 16 students who received a $1,000 scholarship from Greater Nevada CU this year. The credit union was recently recognized as having one of the best scholarship programs for Nevada residents. (Photo provided by Greater Nevada CU)
Since its scholarship program began in 2001, Greater Nevada CU has awarded $129,000 to 129 students. Applications are provided to public high schools throughout northern Nevada every spring, and students planning to attend college or a trade school after graduation are encouraged to apply. All submitted applications are reviewed by the credit union’s scholarship committee, and winners are selected based on their academic performance, school and community involvement, recommendations from school and community leaders, and financial need. Also, applicants must be Greater Nevada CU members or the child, spouse or parent of a member. “Two of our students each received $1,000 scholarships from Greater Nevada this year,” said Tim McCarthy, guidance counselor and scholarship chairman at Carson High School, where Greater Nevada also has a student-run credit union branch. “One student is now attending the University of Nevada, Reno, and the other is enrolled at Western Nevada College. “With money and finances as tight as they are, these scholarships are more important than ever for helping kids pursue a post-high school education,” he added. Based in Carson City, Nev., Greater Nevada CU has $475 million in assets.

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.

CU System briefs (12/14/2010)

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* BISMARCK, N.D. (12/15/10)--Doug Wolf, the former president/CEO of Midwest Corporate FCU, has been hired as vice president of ProDraft Services Inc., effective Dec. 1. "We are excited to have Doug join our staff, and to help us bring a complete correspondent and payment processing services to credit unions that are looking for alternatives," said the credit union service organization's (CUSO) press release. Wolf was president/CEO of Midwest Corporate for 14 years and served nine years in executive management positions, including CEO and chief financial officer, in natural person credit unions. Wolf noted he has been "involved in the development of ProDraft and its services over the past few years…" He will be responsible for credit union client relations and service conversions. The CUSO is owned by 38 credit unions … * KINGSPORT, Tenn. (12/15/10)--Eastman CU announced it will pay a $4 million dividend to eligible members in February. Dividend payments will be deposited into members' savings accounts about Feb. 10, with deposit notifications included with its January statement mailed to members (timesnews.net Dec. 11) … * PORT EWEN, N.Y. (12/15/10)--Ulster County (N.Y.) Industrial Development Agency (IDA) has given its blessing so Mid-Hudson Valley FCU can receive tax incentives while building its Port Ewen branch--a $2.48 million, 2,800-square-foot building. Officials agreed to set a payment-in-lieu-of-taxes schedule and waived sales taxes on construction costs. The credit union is not bonding and will be self-financing the building, said IDA CEO Lance Matteson. The $698 million asset credit union, which is based in Kingston, N.Y., will add three jobs when the branch opens. It will be the first financial institution in Port Ewen since Bank of America closed in July 2009 (Daily Freeman Dec. 14) … * WHEELING, W. Va. (12/15/10)--A sentencing date has been set for Jan. 3 for Bernie Metz, 57, the former CEO of Center Valley CU in Wheeling, W.Va. on an embezzling charge. Metz pleaded guilty to embezzling more than $9 million from the credit union and forging a check to a construction company that built her restaurant and cabins in West Liberty. In exchange for her guilty plea, officials agreed they would not prosecute her family members. Metz faces up to seven years in prison (WTRF.com Dec. 13) … * EDMONTON, Alberta (12/15/10)--Servus CU, a Canadian credit union based in Edmonton, Alberta, announced its member-owners will receive $43 million through its annual Profit Share program. The amount is an increase from 2009's $42.2 million distribution and will be the largest amount shared to date. Members will receive the distribution this month. The 2010 program pays cash as well as a dividend on common shares and investment shares. Commercial and agricultural members will receive cash as a service charge rebate. Servus members, in a survey, said profit sharing and member ownership wither the most important benefits of being members of Servus CU (Marketwire Dec. 13) …

TransUnion predicts sharp decline in card delinquencies

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CHICAGO (12/15/10)--Credit card delinquencies are continuing to drop in a decline that began in first quarter 2009 when 1.21% of all cards were at least 90 days delinquent, according to TransUnion, which predicted the decline will continue well into 2011. The Chicago-based credit bureau predicted a sharp drop in delinquencies to 0.75% by the end of 2010, with the rate falling even more and ending next year at about 0.67% of all balances (Payments Source Dec. 9). More than eight million consumers stopped using general purpose, bank-issued credit cards during the past year, joining more than 70 million consumers who had no active cards in 2009, said TransUnion's quarterly analysis of trends. It attributed the deleveraging in part to charge-offs in the higher-risk segments of the population, more conservative spending in the low-risk segments, and significant efforts by consumers across the board to maintain the health of their credit card relationships as a financial cushion. The analysis revealed that the national credit card delinquency rate (ratioof bankcard borrowers 90 days or more delinquent on one or more of their credit cards) decreased to 0.83% during third quarter 2010, down nearly 9.8% from second quarter. Year over year, credit card delinquencies fell by 24.6%. Consumers with higher incomes were just as likely as those with lower incomes to suspend their use of this payment option. "The vast majority of the consumers who do not possess or have stopped using credit cards continue to have and use other forms of revolving and installment credit, and of course still need to pay for necessities," said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit. "Consumers who do not have or use bank-issued, general purpose credit cards still have a need for other payment vehicles, a fact which is beginning to attract significant attention from credit and debit providers alike," Becker added. Among the statistics for third quarter:
* Incidence of credit card delinquency was highest in Nevada (1.28%), Florida (1.09%) and Mississippi (1.06%). The lowest credit card delinquency rates were found in North Dakota (0.48%), South Dakota (0.53%) and Nebraska (0.56%). * Two areas showed an increase in credit card delinquency--the District of Columbia (19.67% increase) and Mississippi (1.92% increase). The two areas of the country with the largest quarter-over-quarter drop in delinquency were Alaska (-19.2%) and Nebraska (-17.6%). * National average credit card borrower debt (the aggregate balance on all bank-issued credit cards for an individual card borrower) edged up for the first time in six quarters by 0.28% to $4,964 from the previous quarter's $4,951, but down 11.54% compared to the third quarter of 2009 ($5,612). * The highest state average credit card debt remained in Alaska at $7,159, followed by Hawaii at $5,716 and North Carolina at $5,640. The lowest average credit card debt was found in Iowa ($3,807), North Dakota ($4,103) and South Dakota ($4,196). * All but 15 states showed an increase in average credit card debt from the prior quarter. The largest increases in average credit card debt over the previous quarter occurred in West Virginia (2.81%), Wyoming (2.2%) and Hawaii (2.19%). * On a year-over-year basis, national credit card originations increased for the first time since the recession began in late 2007. Nine states showed decreases in originations since third quarter of 2009. The states with the greatest year-over-year increases were Delaware (21.3%), Oklahoma (16%), and Pennsylvania (15.8%). * The areas with the steepest declines in year-over-year credit card originations were the District of Columbia (-10.3%), Minnesota (-9.6%) and Michigan (-4.2%). * About 77 % of metropolitan statistical areas (MSAs) showed a decrease in their 90-day credit card delinquency rates since last quarter, which is generally consistent with national trends. The area with the largest drop in delinquency was the Dubuque, Iowa MSA (-48.4%). The area with the largest increase in delinquency was the Lewiston, Idaho-Washington Metropolitan Statistical Area (92.7%).
"The third quarter marks the first time since the recession officially ended in the summer of 2009 that average consumer credit card balances have not declined, although aggregate balances have dropped. The reason for this apparent contradiction is that the net number of active credit card accounts is continuing to drop, and it is falling faster than the dollar deleveraging rate," said Becker. "On the delinquency side, the news remains good as consumers continue to show fiscal responsibility in paying down their credit card obligations and delinquency rates remain within expected annual variance and seasonal norms," he said. "Moreover, the drop in the savings rate quarter over quarter, coupled with the drop in the number of active cardholders, might lead one to infer that consumers are shifting their focus away from a pure savings mindset to one that may include increased non-credit spending, such as through debit or checking transactions."

CU CEO sentenced to year in jail in securities case

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DENVER (12/15/10)--The CEO of a credit union chartered in the U.S. Virgin Islands with a back office operating from Denver, Colo., has been sentenced to one year in jail for contempt of court and failing to produce documents for a securities investigation. Stanley B. Roberson, of Aurora, Colo., CEO of Her Majesty's CU (HMCU), failed to produce documents related to a subpoena issued to him as part of the state's investigation of the credit union, Securities Commissioner Fred Joseph of the Colorado Department of Regulatory Agencies (DORA) told the denverchannel.com (Dec. 14). The sentence came from a state judge during a third hearing on the matter Tuesday. Regulators for months have been trying to determine whether Her Majesty's CU is legitimate or a fraud (News Now May 13). Commissioner Chris Myklebust of the Colorado Division of Financial Services told News Now in May that his office was in contact with both the U.S. Virgin Islands and the state securities office about the credit union. Under law, the credit union cannot solicit Coloradoans for business because it is "not a legitimate Colorado credit union," Myklebust said. The credit union is not chartered by the Colorado Division of Financial Services, which is part of DORA, nor the National Credit Union Administration (NCUA). The credit union offers certificates of deposit (CD) to consumers over the Internet at interest rates above prevailing CD rates. One ad on Google promoted 6% to 7% CDs. Its accounts are not federally insured, and the state is trying to determine whether it is offering only uninsured deposits or is engaging in the offer and sale of unregistered securities. Roberson received six months in jail for the contempt charge plus six months for failure to produce the documents subpoenaed. The latter charge can be reduced if he produces the documents. In May, News Now learned that Roberson was CEO of Jilapuhn Inc., a former East Point, Ga., company that was a founding sponsor of another credit union--Jilapuhn Employees FCU, also of East Point. That credit union was formed in January 2005 but liquidated by NCUA eight months later. Roberson claimed in an e-mail that it was insured by Lloyds of London. The Credit Union Association of Colorado met with Roberson in May and determined there were inconsistencies in claims made about the background of HMCU (News Now May 14). Roberson told them that HMCU was the only credit union in the Virgin Islands (there are five other credit unions there); that a federal charter and National Credit Union Share Insurance Fund (NCUSIF) were not available to credit unions chartered in the Virgin Islands (five other credit unions there have the federal charter and NCUSIF insurance); that it was a member of the Credit Union Association of New York (it never has been a member of the association there) and HMCU was a member of the Credit Union National Association (CUNA) (it is not a member, says CUNA). HMCU's website says it was established for the residents of the Virgin Islands, military personnel, employees of the Department of Defense, all affiliated companies and family members of members. It offers bank accounts, ATM cards, insurance, money orders and wire transfers.

CUs continue at top of newest satisfaction index

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ANN ARBOR, Mich. (12/15/10)--Less than one week after credit unions came out on top of a customer satisfaction survey, another index--this time the American Customer Satisfaction Index (ACSI)--has announced that credit unions continued in the top spot of its survey. Credit unions scored 80 this year, a 4.8% drop from their score of 84 the past two years, said the Ann Arbor, Mich.-based ACSI. Banks scored an overall 76 this year, up 2.7% from their 2008 and 2009 showings. Individual banks had lower tallies--Wells Fargo at 73, Citigroup at 69, Bank of America at 68 and JPMorgan Chase at 67. The ACSI report covered satisfaction ratings of credit unions, banks, health insurance, life insurance and property and casualty insurance. It noted that although credit unions remain on top, they face increasing pressure and attributed the slight decline to services not keeping up with demands brought by growth and cost-cutting measures in the tight economy. The index also reported significant decreases in satisfaction among insurance customers, largely due to higher health insurance premiums and deductibles. Last week News Now reported that the Prime Performance 2010 Bank and Credit Union Satisfaction Survey announced that credit unions and small banks led their larger rivals in meeting the needs of their member/customers. That study also indicated credit unions and small banks have the friendliest personnel; their member/customers are more likely to recommend others use their financial institution, they are more likely to believe employees want to help them; and they are more apt to believe credit union and small bank employees enjoy their jobs (News Now Dec. 8). Last week's study and Credit Union National Association (CUNA) President/CEO Bill Cheney's comments about the results were reported widely in national media. Cheney noted that CUNA was not surprised at the findings and it was fine to be included with small banks, but also noted the "very real and fundamental difference between banks and credit unions, regardless of size: Credit unions' not-for-profit, cooperative structure."

CU finds BubbaLuv SupaFan a GenY magnet

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ERIE, Pa. (12/15/10)--Erie General Electric FCU has partnered with a local celebrity---“supafan” is actually the more accurate term--and created a lot of fun for its entire community in the process. The match was made when Trent Mason, chief marketing officer at the credit union, sat courtside at a National Basketball Development League game next to Donnell Jordan, aka BubbaLuv, the Erie area’s self-described “supafan,” who supports local teams adorned in oversized sunglasses, a sequined cape and a huge afro. Mason was impressed when a mob of teenagers and young adults asked BubbaLuv for high-fives. “He had kids asking if him if he received their text messages, asking him if he would come to their schools,” Mason said. Knowing that BubbaLuv had so much local appeal, Mason recruited him to appear with CEO Gail Cooks in a television commercial. Mason said at first the credit union didn’t intend to recruit BubbaLuv as a long-term spokesperson, but considering his popularity “moving on would have been the foolish thing to do.” So Erie General Electric has an agreement to request BubbaLuv for appearances through 2012. But for all Bubba’s flamboyance, he’s no gimmick. Mason calls Bubba “a blue-collar guy in a blue-collar town,” and a long-time credit union member. “When they find out his background, and they know that he works for us, they really respect that,” Mason says. “Besides, he’s so much more approachable than any of us. Why would they want to talk to a banker when they can talk to him?”

Add California to the anti-fraud program list

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LOS ANGELES (12/15/10)--The California and Nevada Credit Union Leagues, along with the Los Angeles Department of Consumer Affairs, the California Bankers Association, and Consumer Federation of America (CFA), launched a new program Monday to protect consumers and financial institutions from fake-check scams. The anti-fraud program is being rolled out in 12 other states. Under the program, participating banks and credit unions in the greater Los Angeles area will hand out a brochure created by CFA, “Don't Become a Target,” to every consumer who comes in to deposit checks or money orders of $1,000 or more or to withdraw $1,000 or more, CFA said in a release. Seventeen banks and credit unions have signed up to participate so far. “The key is to prevent consumers from being victimized by educating them about these scams at the very point where they may be at risk,” said Susan Grant, CFA’s director of consumer protection, who is coordinating the program. In fake-check scams, the consumer receives a genuine-looking check or money order for something and is asked to wire money somewhere in return, CFA said. For instance, the check may be described as an “advance” on millions that the consumer has won in a sweepstakes or lottery. The consumer is instructed to send money to pay the taxes and claim the rest of the prize. In another popular scenario, the consumer is recruited to work at home as a mystery shopper or payments processor and is instructed to send money somewhere. The check or money order is phony, and when it bounces, the victim owes the money back to the financial institution where it was deposited or cashed. The average loss is $3,000 to $4,000, CFA said. “Fake check scams are a serious problem for consumers,” said Diana Dykstra, president/CEO of the leagues. “Credit unions want to do all they can to educate their members. That’s why we're excited to be a partner in this consumer education program.” CFA is providing the brochure to participating banks and credit unions at no cost. CFA is asking them to cover the shipping expense if they are able to do so.

TMG Black Friday transactions dominated by debit

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DES MOINES, Iowa (12/15/10)--The Members Group (TMG) has released its Black Friday data, and the numbers confirm what the Federal Reserve has already declared: Debit is king of the transaction world. Of the card transactions processed by TMG the three days following Thanksgiving, nearly 80% were debit. The total number of debit transactions, as well as the total dollar amount of all debit transactions, each increased by 10% from 2009. TMG clients’ cardholders collectively spent more than $31.9 million during this year’s Black Friday weekend on their credit and debit cards, an increase of nearly 8% from 2009. While the total amount spent on credit cards increased less than 1%, over 2009, the amount spent on debit cards rose by more than 10%. “TMG clients’ cardholders are mirroring the American consumers’ inclination to use their debit cards,” said Sara Petty, TMG’s senior vice president of client development. “Debit interchange regulation is bound to have an impact on our clients, interchange revenue. It will become important to continue increasing the number of debit transactions overall in order to minimize and overcome the gap created by a decrease in interchange.” As with 2009’s Black Friday weekend, TMG clients’ cardholders made larger purchases with their credit cards this year. The average credit card transaction among TMG clients’ cardholders this Black Friday weekend was $76, while the average debit transaction was nearly half that at $43. TMG is a credit union service organization owned by Iowa credit unions and their members.

NCUF to conduct financial reality fair at GAC

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MADISON, Wis. (12/15/10)--The National Credit Union Foundation (NCUF) will conduct a financial reality fair for the first time on March 2 in conjunction with the Credit Union National Association (CUNA) Governmental Affairs Conference (GAC) in Washington, D.C. A reality fair is an interactive financial literacy tool for high school students.
Students face financial reality when they participate in a reality fair, such as this one designed by America’s Credit Union Museum (Photo provided by the National Credit Union Foundation)
The fair will be held at the Rayburn House Office Building from 10 a.m. until 11:30 a.m. About 40 to 50 area high school students are expected to attend. GAC attendees can attend the fair, which will remain open until 2 p.m. for anyone who wants to see the booths and fair materials. Also, NCUF will ask Credit Union Development Educators attending the GAC to volunteer for the event. “Holding a reality fair at GAC is a great way to expose legislators and their staff to the innovative financial education programs that are offered by America’s credit unions,” said Lois Kitsch, NCUF national REAL Solutions program manager. The GAC event is sponsored by NCUF with support and expertise from:
* CUNA’s Mad City Money, a hands-on simulation kit for youth, which provides a taste of the real world--complete with occupation, salary, spouse, student loan debt, credit card debt, and medical insurance payments; * America’s Credit Union Museum’s CU 4 Reality, a hands-on comprehensive training package centered on the interaction among students, educators, parents, credit unions and business volunteers; * HarborOne CU’s Credit for Life Fair, which has visited high schools since 2001. The Brockton, Mass.-based credit union has won awards for its fair, which is attended by thousands of students every year; and * Credit Union League of Connecticut, which held reality fairs statewide last year.
The Connecticut league recently received a Desjardins Youth Financial Education Award, in large part due to the league’s educational work supporting the financial reality fair throughout the state. The fair was created as part of the state’s REAL Solutions efforts. “We believe the first step needed to improve the economic environment within a family is access to information--and the earlier the better,” Kitsch said. “Mixing fun with learning creates a memorable experience that will remain with the students in the months and years to come.” “I have had the opportunity to be involved with reality fairs for more than 10 years,” said Tony Emerson, president/CEO of the Credit Union League of Connecticut. “When you get to see the recognition in a student’s face that financial decisions are important and do affect their daily lives, it is instant gratification that the fairs are worthwhile and effective.”

N.C. CUs mortgage assistance program featured in news

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RALEIGH, N.C. (12/14/10)--North Carolina credit unions that have begun mortgage assistance programs similar to that of the state's largest credit union--Raleigh-based State Employees' CU (SECU)--were the topic of a positive press report in which a couple--both schoolteachers--told how their credit union helped them keep their house. SECU's Mortgage Assistance Program, now two years old, calls for its loan officers to contact members at the first sign of financial problems--when the mortgage payment is more than 30 days overdue--to tell them that the credit union offers alternative payment plans for homeowners in distress Raleigh News & Observer (Dec. 12). SECU basically "turned our collectors into counselors," Mark Coburn, SECU senior vice president of loan servicing, told the publication. It offers to extend the length of the mortgage, accept partial payments for six months, and modify terms of a loan or refinancing. About a dozen credit unions in the state are working to modify mortgage terms for struggling families, the North Carolina Credit Union League told the publication. Since credit unions are owned by the members they serve, it's in their best interests to do all they can to achieve a happy outcome when the unexpected happens to a member, said Jeff Hardin, league director of communications. The Credit Union National Association provided statistics for the article comparing delinquent real estate loans in credit unions with those of banks. Credit unions in the state saw 1.85% delinquent real estate loans in June, compared with banks' 10.54%. In North Carolina, foreclosures totaled 63,284--a 47.6% hike from 2005, according to state data cited. This year's filings are on a pace to set a record. Last year SECU foreclosed 179 homes out of 121,625 mortgages and home equity loans--0.15%, which is slightly higher than in 2005. This year it has 175 foreclosures out of 123,815 loans. The article features other credit unions' similar programs--that of Raleigh-based Local Government FCU and of Durham-based Latino Community CU. It also tells about how SECU helped school teachers Eric and Misty Cain, keep their home after after Misty quit her job to spend more time with their two-year-old. Although they never fell behind on their mortgage, their credit card debt hit $20,000. They met with SECU and received an affordable plan--paying 50% of the mortgage for six months, not counting escrow payments, and refinancing at a lower interest rate to reduce their monthly payments. "It helped us keep our house," they said. For the full article, use the link.

Phish attacks vs. CUs rise to 10 in October

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GLASTONBURY, Conn. (12/14/10)--Credit unions in the U.S. saw the most pronounced change in phishing attempts against financial institutions in October, according to RSA Online Fraud Report for November. Credit unions accounted for 10% of phishing attacks during October, an increase from 6% in September and 3% in October. Phishing reports for credit unions haven't been that high since February, when credit unions were 12% of attacks, said RSA. The portion of attacks against regional U.S. banks fell 5%-- to 35%, the lowest since at least October 2009. Attacks against nationwide banks rose 1% during October, to account for 65% of the attacks in the U.S. financial sector, said the report. Glastonbury, Conn.-based RSA, a division of EMI, identified 16,047 worldwide phishing attacks, a 1% decrease from the total reported in September and the lowest number since 13,855 attacks were reported in June. The number of brands attacked increased slightly to 181 brands in October from 178 brands in September, said RSA's report. It was the second consecutive month that brands attacked totaled less than 200. The report also noted that botnet thefts--where criminals or security professionals "kidnap" an entire botnet by planting a poisoned configuration file into its command and control server--have seen two upgrades in the Zeus Trojan virus, making the malicious software harder to detect. The most talked-about upgrade for Zeus 2.1 is the new version's digital signature mechanism. Much like legitimate software, Zeus verifies the digital signature on all files and data it downloads, and ignores and deletes a file that doesn't match with the signature. Also, the new resources are stored in encoded form, which are decoded on-demand, when they are needed. Once the Trojan needs the resource, it decodes it, uses it, and then destroys the decoded copy, rendering it "invisible" to an outsider criminal or investigation. That makes it harder to analyze the malware.

Peoples FCU helping low-incomers to build wealth

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OAKLAND, Calif. (12/14/10)--People’s FCU was the only deposit financial institution in West Oakland, Calif., when it when it opened its doors in 2001--all the banks had fled in the area in the 1960s. As in most poor neighborhoods, many fringe financial service providers--check cashers, pawnshops and payday lenders--target the area’s unbanked and low-income population.
Leah Dorner of People’s CU assists Rodney Charlot at People’s FCU Volunteer Income Tax Assistance site. (Photo provided by the National Credit Union Foundation)
The credit union attacked this problem head on. It provides access to affordable financial services and savings accounts and loans. It also helps build assets by providing individual credit coaching, financial literacy and credit education workshops, and free income tax preparation. With an Innovation Grant from the National Credit Union Foundation (NCUF) this year, People’s FCU was able to expand and manage its community programs. Almost 90% of members earn below 80% of the area’s median income, including 51% that earn less than $22,000 per year, according to People FCU’s membership data. “People’s model of combining financial education with access to affordable entry-level and asset-building financial products is excellent,” said Lois Kitsch, NCUF’s REAL Solutions national program director. “Better yet, it can be replicated by other credit unions in the country. This is particularly relevant as tax season is right around the corner.” One of the most successful parts of People’s FCU’s community programs is free income tax preparation through its Volunteer Income Tax Assistance (VITA) site. The average income for households served by the credit union’s VITA site is less than $20,000. Earlier this year at its VITA site, People’s FCU:
* Completed 443 tax returns, a 41% increase over 2009; * Generated $544,099 in refunds for the West Oakland community, and; * Saved filers an estimated $110,750 in fees they would have paid to have their taxes prepared elsewhere.
Also, 25% of filers received the Earned Income Tax Credit (EITC), which usually is unclaimed by low-income workers either because they are either unaware of the credit or they don’t file their taxes to claim it. People’s FCU encourages filers to save part of their refunds and open savings accounts with the credit union. Eighty percent of new savings accounts opened at the VITA site earlier this year are still open today. The credit union also offers credit report review sessions at the VITA site to link filers to credit building education and opportunities. Its representatives also ask filers to complete a financial “wish list” or survey that inquires about their financial goals so it can offer them relevant credit union products and financial education. NCUF Innovation Grants are made possible by supporters of the foundation and the Community Investment Fund.

Growing needs are focus of Africa regulators roundtable

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LILONGWE, Malawi (12/14/10)--Rapidly growing membership and the increasing need for improved prudential oversight have catapulted Africa’s savings and credit cooperatives (SACCOs), or credit unions, to a new level of need.
Click to view larger imageMalawi credit unions serve people in rural areas like this mango grower.
Credit unions in the African nation of Malawi serve people in rural areas like this Mango grower.Defining credit union-appropriate oversight and operating procedures highlighted the third Africa SACCO Regulators’ Roundtable, sponsored by World Council of Credit Unions (WOCCU), the Canadian Co-operative Association (CCA) and the Irish League of Credit Unions Foundation. The three-day conference, held earlier this month in the east African nation of Malawi, attracted 50 credit union supervisors, policymakers and sector officials from 12 African countries who met to discuss ways to propel their respective credit union systems forward. It was the largest gathering yet for credit union supervisors and policymakers in Africa. Participating countries included Cameroon, Ethiopia, Gambia, Ghana, Kenya, Lesotho, Malawi, Seychelles, South Africa, Tanzania, Uganda and Zambia. Among the officials presiding over the third Africa Savings and Cooperatives Regulators’ Roundtable were (from left) Perks Ligoya, governor of the Reserve Bank of Malawi; World Council of Credit Unions Director Sylvester Kadzola, CEO of Malawi Union of Savings and Cooperatives; JoAnne Ferguson, Canadian Co-operative Association senior director of International development; Mary Nkosi, deputy governor of the Reserve Bank; and Dave Grace, WOCCU vice president of association services. (Photos provided by WOCCU.)African credit unions provide financial services to more than 15.5 million members. The credit unions, often located in rural areas, are experiencing 20% to 50% annual asset growth as they help move families from poverty to middle class. Such rapid growth creates a greater need for strong but appropriate prudential oversight, conference organizers said. “These roundtables have become a catalyst to accelerate regulatory developments on our continent,” said WOCCU Director Sylvester Kadzola, CEO of Malawi Union of Savings and Credit Cooperatives (MUSCCO), the country's credit union trade group. He said the roundtable marked a significant step forward for the movement. Following the framework of the recent Caribbean Regulators’ Roundtable co-hosted by WOCCU and the International Monetary Fund, the Malawi program offered guidance and advice on technical tools, applied training through case studies, and shared experiences of supervisory and legislative developments within Africa. As part of the roundtable activities, participants visited MUSCCO headquarters and a credit union operating in Malawi’s capital of Lilongwe.
Click to view larger imageAmong the officials presiding over the third Africa Savings and Cooperatives Regulators’ Roundtable were (from left) Perks Ligoya, governor of the Reserve Bank of Malawi; World Council of Credit Unions Director Sylvester Kadzola, CEO of Malawi Union of Savings and Cooperatives; JoAnne Ferguson, Canadian Co-operative Association senior director of International development; Mary Nkosi, deputy governor of the Reserve Bank; and Dave Grace, WOCCU vice president of association services. (Photos provided by WOCCU.)
Mary Nkosi, deputy governor of the Reserve Bank of Malawi, opened the program and later in the week joined Perks Ligoya, governor of the Reserve Bank, to meet with officials from WOCCU, MUSCCO and CCA to discuss pending credit union legislation. WOCCU drafted the new legislation in 2007, but it was approved only recently by the government’s cabinet. Before moving the legislation on to Malawi's parliament, Reserve Bank officials agreed to review provisions of the law that concerned the credit union sector. “While there is now broad acceptance of the need for prudential oversight of credit union activities in Africa, finding the right regulatory balance is especially challenging in small countries with many credit unions,” said Dave Grace, WOCCU vice president of association services, who oversaw last week’s roundtable. “There is no silver bullet. But we’re seeing a variety of innovative approaches that hold promise, and we're committed to working with those in the region on these developments.”

N.J. municipal deposits sponsor resigns

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TRENTON, N.J. (12/14/10)--New Jersey Assemblyman Fred Scalera (D-36), who introduced legislation to reform New Jersey’s 40-year-old municipal deposits law to allow local government entities to include credit unions when considering potential depositories, has resigned his legislative post to accept a position in the private sector, said the New Jersey Credit Union League. NJCUL said it is recruiting an additional prime sponsor for the legislation to replace Scalera (The Daily Exchange Dec. 13). The legislation passed the state Senate in June. With two prime sponsors and eight co-sponsors, the Assembly bill remains actively pending consideration in the Financial Institutions and Insurance Committee despite Scalera’s departure, the league said. Diversifying deposits to credit unions from banks would reduce risk, said Paul Gentile, league president/CEO July 8). Allowing credit unions to accept the deposits would benefit local government entities in these ways, he said:
* Credit unions receiving the deposits would be more likely to make deposited funds available to local businesses and consumers. While banks reduced business lending by 15% in 2009, credit unions increased their small business lending by 11% last year. * Depositors get better interest rates from credit unions, which will benefit the taxpayer.
Liberalizing the deposit act would help the public realize that credit unions are full-function financial institutions that almost anyone can join, Gentile said.

Consumers want to connect to FIs via social media

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MADISON, Wis. (12/14/10)--Consumers are interested in connecting with financial institutions through social media, according to recently announced results of a survey by Fiserv Inc., a global provider of financial services technology solutions. The survey indicated that 11% of online consumers are connected with their bank or credit union through a social site, and more than one-third (36 %) of those not connected are interested in doing so. Interest is highest among Gen Y consumers, at 45% (BusinessWire Dec. 7). “There is clearly a sizable segment of consumers who are interested in interacting with their financial institutions through social sites,” said Geoff Knapp, vice president, online banking and consumer insights, Fiserv. “An active, engaging online social media presence is a viable way to maintain and grow valuable relationships with consumers who are visiting branches less and interacting through digital channels more.” The survey, conducted by Fiserv Consumer Insights in conjunction with The Marketing Workshop in August 2010, obtained responses from 3,000 consumers, representative of the U.S. online population. To participate, respondents had to have a checking account and some responsibility for paying bills. Major findings included:
* Social media is about building relationships: The primary motivations for consumers to connect with a brand are personal and relational, not transactional; * Financial institutions have a significant opportunity to connect with customers: 84% of online consumers actively participate in social media, but only 11% have connected with a financial institution; * Consumers lack awareness: 71% of respondents who want to connect with their bank or credit union via social channels did not know they could; * Consumers don’t understand the value of connecting with financial institutions: Consumers are not entirely clear about why they should connect with their bank or credit union via social channels; and * Consumers have privacy and security concerns: Consumers of all generations are concerned about mixing their social and financial lives.
For financial institutions to maximize the opportunity social websites provide, Fiserv has several recommendations:
* Embrace the opportunity to form and enhance digital relationships through social media. * Increase awareness. To overcome this barrier, banks and credit unions should incorporate social media messaging into existing marketing efforts in other channels. This can be as simple as incorporating Facebook or Twitter icons into print or digital marketing communications. * Differentiate social media from the transaction-driven website. Financial institutions must differentiate the social media channel from the transactional channel and offer members/customers community-building activities, such as access to fellow member recommendations, they cannot get from the traditional website. * Communicate a clear value proposition. Banks and credit unions must clearly communicate and educate members/customers on the additional value of connecting through social media. Emphasizing the unique benefits of the channel such as the ability to interact with other members, receive special offers, and contact member service will help members better understand why they should connect. Social media is still relatively uncharted territory for financial institutions, providing the opportunity for banks and credit unions to customize what they deliver through social media based on what is most important to their member/customers and the institution. * Dispel security and privacy issues. Financial institutions need to clarify and communicate security and privacy expectations within social media to eliminate barriers to adoption.
To read the white paper, use the link.

CU System briefs (12/13/2010)

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* FERNDALE, Mich. (12/14/10)--Donald Murray, former treasurer/manager of Ferndale Co-op CU (now Credit Union ONE, based in Ferndale, Mich.), died Nov. 18, according to the Michigan Credit Union League. He was 86. Murray went to work for the credit union in 1948 and was treasurer/manager from 1950 until his retirement in 1986. He is survived by his wife, four children and six grandchildren (Michigan Monitor Dec. 13) …

REAL Solutions Illinois closes out 2010

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NAPERVILLE, Ill. (12/14/10)--Innovations from the Filene Research Institute were discussed and representatives from the Illinois State Treasurer’s Office presented small-dollar loan programs at the final in-person meeting of REAL Solutions Partner credit unions in Illinois for this year. The REAL Solutions program works through state credit union leagues to help credit unions offer services that have proven successful for people of modest means and “low wealth.” The Filene innovations centered on member savings and debt reduction initiatives, and loans and other support for small and start-up businesses. These included:
* Debt in Focus: A Web-based debt management tool that is anonymous, contains no financial jargon, and provides the users with a summary of their situation; *The Big Payoff Loan: A debt “snowball” plan; * Co-Opera: A co-op to co-op lending website that provides opportunity for more cooperation among cooperatives; * Two Grand Plan: A program to assist members with savings earmarked for emergency situations; * R-Bond: A solution that provides a way to reward low-income taxpayers for saving by allowing a portion of a tax refund to be directed to a savings bond; * UMatter: A member referral and benefit program; * 60-Day Loan Guarantee: Given that many less reputable lenders over the past few years have diminished trust in the marketplace, this program gives members a refund on paid interest in the first 60 days if the loan was returned/paid back, regardless of the reason; * B N Biz Fund: Provides young entrepreneurs with greater access to funding to start or expand a business; * CU Launch: A program designed to match specialized needs with customized services with a consultative approach to starting up a new business; and *LIFT (Lower Interest For Timeliness): Allows members to reduce their interest rate, pay their loan off quicker and reduce the amount of interest paid by making their loan payment on time-- each year they pay on time until the end of the term.
Staff from the Illinois Treasurer’s Office provided details on small-dollar loan opportunities available via its office. They are:
* Opportunity Illinois: The Illinois State Treasurer’s Office invests millions of dollars annually in low-interest loans to consumers and community development agencies through the Opportunity Illinois program. The office partners with eligible lenders to offer interest rate reductions to nonprofits, financial institutions, hospitals and credit unions to improve their services in underserved communities. The office also works with lenders to make loans affordable for Illinoisans with disabilities, families of U.S.military personnel called to duty, and victims of natural disasters. * The Opportunity Illinois: The micro loan program provides the capital that credit unions and community banks need to help low-income residents who might turn to payday lenders. Because of their low interest rates, micro loans may be a cost-effective way for low-income residents to pay for expenses and emergencies without racking up unmanageable debt. * Access to Capital through State Deposits: The Treasurer’s Office provides low-cost liquidity to banks, credit unions and savings and loan institutions located in the state. The goal is to provide an additional source of funding for Illinois financial institutions during the current economic and market conditions.
The Illinois Credit Union League and the Illinois Credit Union Foundation have teamed up with the National Credit Union Foundation to offer the “REAL Solutions for Low Wealth Households” program. Currently, 48 credit unions in the state are participating. REAL stands for Relevant, Effective, Asset-building, Loyalty-producing, and is being operated in 40 states and more than 1,100 credit unions.

CU satisfaction survey nets support in social media

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WASHINGTON (12/13/10)--When credit unions came out on top last week in a new customer satisfaction survey, the news made the rounds in the social media, with 20-somethings using blogs and Facebook to weigh in on what they like about credit unions. "Credit unions and small banks tops in service," was the headline for a Bankrate.com blog, which noted Thursday that "if you bank at a small bank or credit union, you're probably a happier and more loyal customer, at least according to a study published this month by Prime Performance." In addition to highlighting comments made by Credit Union National Association (CUNA) President/CEO Bill Cheney in News Now (Dec. 8) about the survey, the blog writer, Claes Bell, noted: "The thing that seemed counterintuitive to me about these numbers wasn't that credit unions and small banks have happier customers; it was how high the numbers were all around." "For all the horror stories I hear about banks in the media and from friends," Bell continued, "it seems remarkable that so many people are pleased as punch with the service they're getting from their financial institutions. I mean, I know a lot of people like credit unions, but an 87% satisfaction rate for customer service? A 77% rate for service in the industry at large?" Bell noted that banking is a competitive service, where it's "easy enough to pick up your checking account and move, so there's not much reason to stick around it you're truly dissatisfied." In Time.com (Dec. 9), a blog entitled, "Credit Unions and Small Banks Cream Big Banks in Customer Satisfaction Survey," Brad Tuttle wrote that "88%--88%!--of credit union and small bank customers say they're satisfied…and only 1% of credit union customers report being dissatisfied." He noted that CUNA "seized the opportunity to pat itself on the back and basically say "No s*** Sherlock! Of course we have better service and more satisfied customers. What did you expect to find out?'" Actually, Tuttle admitted, he was paraphrasing Cheney's comments. For the record, Cheney actually said that CUNA "is not surprised at the finding, because this confirms what study after study have found. It's fine to be included with 'small banks' in a survey such as this. However, it's also important to note the very real and fundamental difference between banks and credit unions, regardless of size: Credit unions' not-for-profit, cooperative structure. Ultimately, that's what separates all credit unions from the rest, and drives their passion to provide the best service to their members, rather than amass profits." Credit unions are also showing up on Facebook in a good light among 20-somethings. One CUNA staffer said a Facebook friend of a relative said he was sick of being yanked around by a certain mega-bank and asked for suggestions about a bank he could switch to. Seven of the 12 posts told him to go to a credit union and one explained about shared branching.

Auto loan delinquencies repos down

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SCHAUMBURG, Ill. (12/13/10)--Consumers did a better job repaying their auto loans during third quarter than they did during third quarter 2009. Both delinquencies and repossessions dropped, and lenders loosened loan criteria, according to Experian Automotive's quarterly analysis of the automotive credit industry. The findings have implications for credit unions, whose bread-and-butter has traditionally been auto loans. New-auto loans accounted for 11.4% of credit unions' loans in October, down slightly from a year earlier, while used-auto loans were 17.9% of loans, a slight increase over October 2009, according to the Credit Union National Association's Monthly Credit Union Estimates. Both 30-day and 60-day auto-loan delinquencies dropped for all lenders studied by Experian during third quarter from third quarter 2009. Experian said 30-day delinquency fell 8.43%--to 2.99% from 3.27%--while the 60-day delinquency rate plunged 17.39%--to 0.77% from 0.93%. Total dollar volume of loans at risk of default dropped by $6.4 billion. "Overall, our Q3 analysis shows that there are very positive signs for the automotive lending industry," said Melinda Zabritski, director of automotive credit for Experian. "With delinquencies down and less money in their portfolios at risk, lenders can be a little less conservative in their lending strategies. "Consumers still have the impression that lending is extremely tight, so it will be important for lenders and automotive retailers to educate car shoppers that there are more loans available to a wider group of consumers," Zabritski added. Shares of new loans to nonprime consumers with credit scores of 620 to 679 rose to 10.86% from 9.709% in the same period for 2009. Subprime consumers, with credit scores from 550 to 619, comprised 6.61% of loans, while deep-subprime consumers, with credit scores below 550, rose to 1.59% from 1.46%, the study found. Other findings for third quarter:
* New-vehicles: The average credit score for a new-vehicle customer fell six points--to 769 in third quarter 2010 from 775 in third quarter 2009, and the average loan amount rose to $25,273 from $22,743. * Used-vehicles: The average credit score for used-vehicle customers was 683--down one point from the year before--and the average loan was $16,706, up from $15,729 a year earlier.

Idaho Dept. of Finance receives accreditation

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WASHINGTON, D.C. (12/13/10)--The Idaho Department of Finance, which houses the credit union supervisory agency for the state, has received a certificate of accreditation from the Conference of State Bank Supervisors (CSBS). That means the department maintains standards and practices in state banking supervision set by the organization's accreditation program. The department, headed by Gavin Gee, director, regulates banks and credit unions and a number of other financial services providers operating in Idaho. It regulates and licenses more than 156,740 individuals and businesses. Mary Hughes, the department's financial institutions bureau chief, is on the board of the National Association of State Credit Union Supervisors.

AVCU to serve on colleges financial lit advisory board

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SOUTH BURLINGTON, Vt. (12/13/10)--Joe Bergeron, president of the Association of Vermont Credit Unions (AVCU), and Sue Leonard, New England FCU (Williston, Vt.) chief financial officer, have been invited to serve on the advisory board of Champlain College’s Center for Financial Literacy. In addition, Colin Ryan, AVCU’s Economy of Me project manager, has been invited to present the Economy of Me workshop to teachers attending the Vermont Financial Literacy Summit, scheduled to take place in March. Champlain College’s Center for Financial Literacy, a partnership between the school and several Vermont financial institutions, seeks to increase financial literacy in classrooms throughout the state (Newsline Express Dec. 10). “It’s an honor to be invited to serve on the center’s advisory board,” Bergeron said. “I look forward to working with Sue, John [Pelletier, the center’s director), economist Art Woolf, and representatives from a number of institutions that promote financial literacy in Vermont. I’m very optimistic that the center can serve as a focal point for all of these efforts, improve their effectiveness, and expand educator resources.” “What I do in the classroom--explaining the dangers of credit and the basics of budgeting to 20 or 30 students at a time--feels very focused,” said Ryan. “It was empowering to hear the hopes I have for greater financial literacy among students echoed by prominent and influential figures in our community. I’m excited to be part of Vermont’s rapidly growing financial literacy movement.” Among the center’s projects are a financial literacy summit, a teachers’ summer literacy institute and a program to help juniors and seniors understand credit scores.

20 of Americans spend more than they earn

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20% of Americans spend more than they earn WASHINGTON (12/13/10)--One in five (20%) Americans spend more than they earn. Most (60%) don’t have any rainy day funds. And about a quarter (24%) use non-bank loans. These were just some of the findings in a nationwide survey conducted by the Financial Industry Regulatory Authority (FINRA). The study underlines the need for financial literacy efforts many credit unions offer. FINRA launched an interactive Web resource to display the results of the study, which it calls America’s first state-by-state financial capability survey. The new website displays a clickable map of the U.S. and allows the public, policymakers and researchers to delve into and compare the financial capabilities of Americans in every state and geographic region. The state-by-state financial capability survey, which surveyed more than 28,000 respondents, was developed in with the U.S. Department of the Treasury and the President’s Advisory Council on Financial Literacy. The survey echoed several of the findings of a smaller-scale national survey released in 2009, finding:
* More than half of Americans are living paycheck-to-paycheck. 55% report spending more than, or about equal to, their household income. * A significant majority of Americans (60%) do not have a “rainy day” fund to cover three months of unanticipated financial emergencies. * More than one in five Americans (24%) have engaged in some form of higher cost non-bank borrowing during the past five years, including taking out a payday loan or getting an advance on a tax refund. * Americans, on average, were able to correctly answer just three of five questions about fundamental financial concepts.
The data were collected through an online survey of 28,146 respondents (about 500 per state, plus Washington D.C.), over a five-month period, June through October 2009. Within each state, data were weighted to match 2008 American Community Survey distributions on age category by gender, ethnicity and education.

N.C. governors plan keeps CU Division independent

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RALEIGH, N.C. (12/13/10)--North Carolina Gov. Beverly Perdue Wednesday announced her proposal for major government restructuring to alleviate the state’s estimated $3.7 billion shortfall. The governor’s plan does not include consolidating the Credit Union Division with other regulators. The plan’s four steps include consolidating and privatizing some departments, eliminating some functions in all departments, freezing hiring of non-critical jobs, and reviewing more than 400 boards and commissions with a goal of trimming them to 150, the North Carolina Credit Union League said in its newsletter Weekly Update (Dec. 10). Of importance to North Carolina’s credit unions, Perdue’s initial proposal maintains the Credit Union Division as an independent regulator for state-chartered credit unions and does not consolidate the division with the Office of the Commissioner of Banks. However, the league said it will continue conversations with the state’s legislative and executive branches about the consolidation and elimination of agencies and commissions. The North Carolina Credit Union Division ensures the safety and soundness of the 52 state- chartered credit unions that serve more than two million members. Since its establishment in 1915, it has operated exclusively from fees paid by state-chartered credit unions. Consolidation with the Office of the Commissioner of Banks would result in no cost savings for the state, the league said. “State-chartered credit unions are thriving under their current regulator, who has fostered progressive partnerships among credit unions,” said Lauren Whaley, league director of legislative and regulatory affairs. “We are concerned that the orientation of a combined regulatory agency would erode the individuality of credit unions as member-focused institutions and maintain that state-wide consolidation efforts should exclude the Credit Union Division, leaving it as an independent agency.”

ICU Foundation awards 25K more in grants

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NAPERVILLE, Ill. (12/13/10)--The Illinois Credit Union (ICU) Foundation has awarded $25,000 in grants for a variety of projects. It awarded $22,100 in small credit union development (SCUD), community service, marketing and business development, and financial independence and revitalization effort (FIRE) grants, and more than $2,700 in scholarships. The latest grants bring the total awarded for the year to nearly $129,000. SCUD grants totaled $12,000 and were awarded to six credit unions. Purposes for these grants included computer hardware and software, equipment and upgrades, and other operational needs. The recipients were: Alton & Southern Railroad EFCU, East St. Louis; Citizens Community CU, Rockford; D’PUC CU, Chicago; LaSalle County School ECU, Ottawa; Mt. Zion (Ill.) CU; and Springfield City (Ill.) ECU. The foundation also awarded six community service grants at $500 each. This program is designed to encourage and reward chapter or credit union participation in local community projects. Credit unions and chapters can qualify for grants by hosting an established event, creating an event, or volunteering at an event. Recipients included: DHCU Community CU, Moline; North Side Community FCU, Chicago; and Shiloh Englewood FCU, Waukegan. Two chapters, Chicago Metro and Egyptian, and the Washington Credit Union Foundation, also received grants. Grants will go toward sponsoring meals for seniors, and hosting a do-it-yourself home maintenance series for low- and moderate-income members, and helping women in trades. In addition, three credit unions received marketing and business development grants that totaled $7,100. The recipients were: Altonized Community FCU, Alton; Blaw Knox CU, Mattoon; and North Side Community FCU, Chicago. Established in 2006, these grants help credit unions with assets of up to $30 million to start or expand outreach efforts. The maximum grant award is $5,000 per credit union each year. Grant requests included a skip-a-payment campaign for vehicle loans, adding a debit card program for members, and opening a satellite branch. Scholarships totaling $2,768 were awarded to four recipients. Individuals and groups (such as a chapter or group of credit unions) are eligible. Scholarships may be used toward Illinois Credit Union League educational opportunities as well as Credit Union National Association schools. Recipients included: Ambraw FCU, Lawrenceville; Jeff-Co Schools FCU, Mt. Vernon; and Wrigley Associates CU; Yorkville. One chapter, Chicago Metro Chapter, was also a recipient.

Cherry Blossom Run set for April 3

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WASHINGTON (12/13/10)--The 2011 Credit Union Cherry Blossom Ten Mile Run will be held in Washington, D.C., April 3, and organizers have high hopes for a record-breaking fund-raising year. 2011 represents the 10th year of race sponsorship by the credit union movement. Sponsors have set a goal of exceeding $5 million in donations to children’s hospitals in that 10-year period. “Involvement by credit unions across the country continues to grow. The generosity of the credit union movement and commitment to local community is astonishing; this event brings that message home to our nation’s capital,” said Juri Valdov, chairman of Credit Union Miracle Day (CUMD), the lead sponsor of the event. The annual race is an international event attracting world-class runners. The run highlights the community involvement of the credit union movement, with proceeds going to Children’s Miracle Network Hospitals nationwide. Children’s Miracle Network Hospitals treat more than 17 million critically ill children every year. Last year, the run involved 70 credit unions and 25 business partners and credit union service organizations (CUSOs), representing all 50 states. Nearly 15,000 runners participated, including more than 622 legislators, aides and government employees. Also, 40 senators and congressmen acted as honorary race chairs. Runners and others nationwide donated more than $180,000 to children’s hospitals using the race’s online giving site. See the link. Race officials said money raised goes back to the local Children’s Miracle Network Hospitals where donations originated, because an industry CUSO--PSCU Financial Services--underwrites race expenses. Credit union donations are returned to the hospitals in their area, and credit unions can publicize these contributions. The local publicity helps raise awareness for the credit union movement and the hospitals. During the past nine years, the race has generated more than $4 million in donations. Children’s Miracle Network Hospitals is an alliance of 170 children’s hospitals nationwide that treats 17 million critically ill children each year. Credit unions, CUSOs and partner organizations may sign up as race sponsors by visiting the race website. Marketing materials also are available on the website. CUMD is a partnership of credit unions, CUSOs and partner organizations nationwide that have joined under the umbrella of Credit Unions for Kids to support Children’s Miracle Network Hospitals by sponsoring the Credit Union Cherry Blossom Ten Mile Run. For more information, contact Sarah Turner, CUMD director, at 443-325-0778 or info@cucherryblossomrun.org.

Metro 1 to merge with Travis CU

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VACAVILLE, Calif. (12/13/10)--Travis CU in Vacaville, Calif., announced a merger with Metro 1 CU in Antioch, Calif., which is targeted for completion by late spring. The proposal to merge the two credit unions, which was agreed to by the National Credit Union Administration on Nov. 3, adds more than 19,000 members and $177 million dollars in assets to Travis CU. “We look forward to serving the financial needs of our new members at Metro 1, while expanding our own branch network to include more locations,” said Patsy Van Ouwerkerk, president/CEO of the $1.6 billion-asset Travis CU. “The merger of these two credit unions provides additional strength and security for all members.” Once the merger is complete, Travis CU will provide Metro 1 members access to more branches, expanded e-services, higher dividend rates on savings accounts, fewer and lower fees, and products and services previously unavailable to them, Travis CU said. The combined branches will have extended hours. Although the conversion of member records and systems will not occur until late spring, the two credit unions will combine their financial statements as of Dec. 31. At that time, Metro 1 employees will become employees of Travis CU, with most of them remaining in the branches to serve their members until the merger is complete.

CU System briefs (12/10/2010)

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* SANTA CRUZ, Calif. (12/13/10)--Bill Myers has been named interim CEO at Santa Cruz (Calif.) Community CU. Myers formerly was founder/CEO of Alternatives FCU, a community development credit union in Ithaca, N.Y. He served there 28 years until his retirement. Myers succeeds Ginger McNally. Santa Cruz Community CU, which reported a $647,000 loss during first quarter and a decline in loan volume, has assets of $86 million. (Santa Cruz Sentinel.com Dec. 9) … * LIVONIA, Mich. (12/13/10)--Livonia (Mich.) Public Schools' Cooper
Click to view larger image Click for larger view
Elementary, which has nearly 700 fifth and sixth grade students, celebrated the opening of its student credit union, Cooper Coyote branch, in partnership with Co-op Services CU. Students can continue using existing accounts they established at credit unions in their former schools at Hayes and Cleveland Elementary. Ninety students applied, and 24 were hired and trained to help operate the student credit union. The branch is named for the school's mascot, and the credit union's mascot is Rock Star Saver. "This is a very hands-on program that gives students the opportunity to learn a variety of math skills," said Jeremy Cybulski, youth and community development coordinator for Co-op Services CU. Pictured are six of the credit union's 24 student team members: from left, Camryn Zurawski, David Werk, Emma Polcyn, Hallee Ellefson, Angelina DiPonio (front) and Veronica Garrick.(Photo provided by Co-op Services CU) … * PITTSBURGH, Pa.(12/13/10)--Wayne J. Sherman, 78, who was president and chairman of the board at PATA FCU, Pittsburgh, died Tuesday. He had held that position since 1986. Sherman also was owner of Dean Honda for three decades, a past president of Pittsburgh Auto Trade Association and a member of National Association of Auto Dealers (NADA). Services were Friday. (Pittsburgh Post-Gazette Dec. 9) …

Puerto Rico lawmaker to probe co-ops regulator

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SAN JUAN, Puerto Rico (12/10/10)--Circumstances around the resignation of the president of the regulatory and supervisory agency of Puerto Rico's cooperatives have prompted a resolution from a lawmaker there to investigate the agency's operations, according to local papers. New Progessive Party Sen. and Chairwoman of the Public Corporations Committee Lornna Soto Villanueva submitted a resolution to investigate internal operations and the reasons for the abrupt resignation of Jose Gonzalez Torres as president of the Public Corporation for the Supervision and Insurance of Puerto Rican Cooperatives (COSSEC) (The Daily Sun (Dec. 8). COSSEC's mission is to guarantee the continuity and permanence of the cooperatives in that country, via regulatory and supervisory duties and to protect members and depositors through effective use of human and technical resources, said the Sun. Gonzalez Torres said he was asked to step down by COSSEC's board because he no longer had board members' trust. Sen. Soto Villanueva said the resignation appears to be related to a proposal for a $200 million loan to Integra Coop to buy toxic loans from local cooperatives. She said no entity, internal or external, can manipulate the stocks and/or operations of workers.

NCUF approves 15 fin ed grants for 2011

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MADISON, Wis. (12/10/10)--The National Credit Union Foundation's (NCUF) board has approved 15 grants for 2011, totaling $294,510. All the grant projects have a financial education component. "At the foundation strategic planning meeting a few months ago, we decided to make financial education a priority in 2011," said Bucky Sebastian, NCUF executive director. "Financial education has long been a part of the foundation's and REAL Solutions' mission. It's also vital to the success of credit unions and consumers nationwide." The projects range from youth financial education in and outside of school to different types of financial counseling and coaching. They include:
* Mid-America Credit Union Association, Bismarck, N.D. , which will provide financial education to participants in the Women, Infants and Children Nutrition Program on the dangers of payday lenders. This will also provide safe credit union alternatives to payday lending and increase awareness of credit unions in the Dakotas. * Metro CU, Chelsea, Mass., which will develop and implement one-on-one financial coaching by corporate volunteers who will assist low income households to identify and follow a path to financial stability and mobility. * Texas Credit Union League, Farmers Branch, Texas, which will implement statewide financial Reality Fairs using social media to enhance student participation, deliver financial education and track the impact social media has on financial literacy of young people. The fairs will increase knowledge and awareness of credit unions, financial tools, credit knowledge and credit union accounts for students 13-18 years of age. * Credit Union Foundation of Maryland and D.C., Glenelg, Md., which will expand “The Millionaires Club,” a high school level, self-sustaining, financial literacy club after school in four pilot expansion locations. The club’s goal is to improve personal financial skills among high school students by providing basic financial education they can place into practice both immediately and during their financial maturation processes.
The other credit union organizations receiving grants include:
* Alternatives CU, Ithaca, N.Y.; * Filene Research Institute, Madison, Wis.; * Hill District CU, Pittsburgh, Pa.; * Iowa Credit Union Foundation, Des Moines, Iowa; * Millstream Area CU, Findlay, Ohio; * Montana Credit Unions for Community Development, Helena, Mont.; * National Federation of Community Development Credit Unions, New York, N.Y.; * New York Credit Union Foundation, Albany, N.Y.; * New York University CU, New York, N.Y.; * Texas Credit Union Foundation, Farmers Branch, Texas; and * University of Virginia CU, Charlottesville, Va.
NCUF grants are made possible by supporters of the foundation and the Community Investment Fund. A full list of grants and the projects is accessible by using the link.

Suspect in drive-thru shooting dies

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MONONA, Wis. (12/10/10)--A man was shot and killed by police at a Monona, Wis., credit union's drive-thru, after he allegedly took a member hostage Wednesday and tried to withdraw funds from the member's account, announced police Thursday. Daniel L. Thomas, 30, allegedly invaded the 63-year-old hostage's home and drove him to the Monona branch of UW CU, where they entered the drive-thru lane in the hostage's sports utility vehicle (Wisconsin State Journal and madison.com Dec. 9). As Thomas attempted to withdraw cash, a teller, who recognized the member in the passenger seat, mouthed to him, "Are you OK?" "She was able to determine by the look on his face that he was not OK," said Monona Police Chief Walter Ostrenga at a press conference. The teller called the police. Police arrived and blocked the vehicle in the lane. Thomas rammed a police car, and several gunshots were exchanged. One television station reported there were five bullet holes in the SUV's windshield (WISC-TV Dec. 9). Ostrenga cited several people as heroes: the teller for her quick action, the victim for his bravery, and two Monona officers for devising a quick plan to block the SUV in the lane to prevent it from getting into traffic. No one else was hurt in the incident, which happened at about 1:45 p.m. Wednesday.

Southeast Corp. announces new biz capital plan

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TALLAHASSEE, Fla. (12/10/10)--The board of directors of Southeast Corporate FCU has approved a new business plan for serving its membership of about 400 credit unions. The plan includes a recapitalization effort focused on continuity of services, preservation and protection of member capital, long-term sustainable value to members, and compliance with the new National Credit Union Administration Part 704 requirements for corporates as they take effect the next few years. “We have begun holding webinars with our members this month and will schedule town hall meetings in early 2011,” said Brad Miller, president/CEO of Southeast Corporate. “These discussions will provide an opportunity to lay out plans and obtain members’ input for Southeast’s next steps.” The plan calls for continuing to work with other corporates and industry partners to consolidate back-office operations and processes to lower costs, increase efficiencies, and provide best-of-breed products and services, Miller said. It also includes moving from a current 64% operating coverage ratio--non-interest income as a percent of operating costs--to 90% within three years. “This greatly reduces our reliance on investment income and means less risk to member capital,” he added. Within one year, Southeast Corporate intends to reduce the size of its balance sheet by about $1 billion and raise $80 million in new Perpetual Contributed Capital to support a $2 billion balance sheet. The intent is to build member value while continuing to provide needed payments, settlement, and liquidity services to members. The corporate plans further operating expense reductions and scale efficiencies through partnering arrangements that further aggregate payment volumes. Also, Southeast Corporate plans to recapture 20% of the balances that leave the balance sheet in existing and new off-balance-sheet products that generate fee income. Existing Member Capital Shares will be returned to members at the end of the three-year notice period, less any additional Other Than Temporary Impairments not covered by retained earnings that the corporate may need to take during this time period. “We’re confident this plan will allow Southeast Corporate to continue providing member-owners with the high-quality and competitively priced products and services they have relied on from us for over the past three decades,” Miller said “We’re eager to hear from members. One thing is clear: Our strength and future ability to meet their needs depends on their support.”

Webinars on SW Corporates biz model next week

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PLANO, Texas (12/9/10)--Webinars are scheduled for Dec. 15 and 16 to explain recommendations for the Southwest Bridge Corporate FCU business model. The bridge corporate’s Member Advisory Council met Nov. 30 to review its executive committee’s recommended business model. Council members approved recommending the consolidated business model with Georgia Corporate FCU to all 1,400 Southwest Bridge Corporate members and presenting it to the NCUA for approval. Highlights of the approved business model include:
* Acquisition by Georgia Corporate FCU, via a purchase and assumption process, in the summer of 2011. The perpetual contributed capital (PCC) subscription period would be from February to June 2011. * The PCC formula is 0.25% of assets with a maximum cap of $750,000, a cap of $600,000 for credit unions between $240 million and $750 million in assets, and a proportional threshold for credit unions $50 million or less in assets. * The consolidated corporate will continue to offer all critical products, including the off-balance sheet services provided by owned credit union service organizations, including Southwest Corporate Investment Services and CU Business Group. * The size of the consolidated balance sheet will be reduced to between $2.6 billion and $3.3 billion to minimize the amount of required PCC, while ensuring the ability to provide sufficient lines of credit to meet settlement and access to contingency lines of credit.

CU System briefs (12/09/2010)

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* SYRACUSE, N.Y. (12/10/10)--Whitney Allen, 22, of Syracuse pleaded guilty Thursday to stealing more than $6,375 from Syracuse-based Empower FCU from July 25 through July 30 in a check-cashing scheme. She was charged in Onondaga County Court with one count of third-degree grand larceny and six counts of falsifying business records by making improper withdrawals each of the six days. She deposited "dead checks" into an account and withdrew cash before the account was verified and also used a credit union ATM card at local retailers. She told police she learned the scheme from her mother, who was one of six others charged in the check-cashing scheme. In a plea bargain, she will receive straight probation with no jail time. Sentencing is set for Feb. 3 (The Post-Standard via syracuse.com Dec. 9) … * INDIANAPOLIS (12/10/10)--Financial Center (Finance Center FCU) has added ZashPay, a person-to-person service that allows members to transmit or receive money using their credit union account, to its BillPayer System. Members can send money to people by using their e-mail address or phone number, regardless of what financial institution the recipient uses. The payment is deducted from the sender's account and deposited directly into the recipient's account in one business day, said the credit union's press release. Finance Center has $409 million in assets …

Virginia CUs donate 35000 to food banks

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LYNCHBURG, Va. (12/10/10)--Virginia-based credit unions have donated $35,000 to aid the state’s food banks this holiday season. The contributions were facilitated by the Credit Unions Care Foundation of Virginia, a nonprofit dedicated to the charitable, educational and community causes supported by Virginia’s credit unions. The funds will be used by the Federation of Virginia Food Banks to aid its associated food banks statewide.
Click to view larger image The Credit Unions Care Foundation of Virginia donated $35,000 to the state's food banks Tuesday. From left, are: Roger Ball, CEO of Call FCU and foundation vice chairman; Bob Petty, CEO of Bronco FCU and a foundation board member; Leslie Van Horn, executive director of Virginia Food Banks; Audrey Bollinger, CEO of Peoples Advantage FCU and foundation treasurer; David Miles, chief operating officer for the Foundation; Gerrianne Burks, CEO of Northwest FCU and foundation chair; and Rick Pillow, president of the Virginia Credit Union League and a foundation board member. (Photo provided by Credit Unions Care Foundation of Virginia)
“This marks the largest single donation the foundation has made to date, which was made possible by the financial support of Virginia’s 190 not-for-profit credit unions,” said David Miles, foundation chief operating officer. “Our hope is that our donation will help our local food banks keep their shelves stocked this holiday season." Leslie Van Horn, executive director of Virginia Food Banks, said the resources of the state’s food banks are stretched thin as requests for food assistance soar. “People are struggling in this economy, with many individuals and families facing the grim reality of not knowing where their next meal may come from,” she explained. “Our food banks are working tirelessly to meet a growing need and we appreciate the support of Virginia’s credit unions as we work to fulfill our mission.” The Federation of Virginia Food Banks is a state association of food banks affiliated with Feeding America. The federation comprises seven regional Virginia and Washington D.C. food banks, with facilities in 14 strategic locations. The food banks distribute more than 70 million pounds of products annually to more than one million people through 1,940 member agencies. These agencies operate programs such as soup kitchens, after-school programs, senior centers and elderly feeding programs. Collectively, Virginia’s credit unions donated more than $881,000 and 13,021 volunteer hours to charitable and community organizations in 2009, according to the Virginia Credit Union League and the foundation. The Credit Unions Care Foundation of Virginia was established in May 2009, and raised more than $100,000 for causes during its first year.

Alaska USA is top SBA lender in state

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ANCHORAGE, Alaska (12/10/10)--Alaska USA FCU has been recognized by the U.S. Small Business Administration (SBA) as the 2010 Alaska SBA 504 Lender of the Year. Set up to contribute to the economic development of communities, the SBA’s 504 program provides long-term, fixed-rate financing designed for acquiring or renovating capital assets, such as land, buildings and equipment. The lender with the greatest number of approved loans as of the program’s year-end date of Sept. 30, 2010 is recognized. All of Alaska community-lending institutions were eligible. Alaska USA FCU has earned the award two years in a row. The credit union’s business and commercial services team is led by Senior Vice President Dave Hamilton. “As a key SBA lending partner, Alaska USA FCU plays a vital role providing access to capital for Alaskan entrepreneurs which allows them to grow and create jobs,” Karen Forsland, SBA Alaska district director, wrote in a letter to the credit union. Alaska USA FCU is a $4.1 billion-asset institution that serves more than 407,000 members, including about 10,400 business members.

Minn. network urges Switch to a CU in 2011

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ST. PAUL, Minn. (12/10/10)--With the New Year right around the corner, now is the time to resolve to switch to a credit union. This was the message Minnesota Credit Union Network President/CEO Mark D. Cummins sent to the readers of Finance & Commerce last week. A regular columnist in the Twin Cities publication, Cummins encouraged consumers to make a New Year’s financial resolution to discover their local credit union. The article, published Dec. 2, is entitled “A suggestion for Minnesotans’ New Year’s Resolution Lists” and outlines many reasons why consumers should switch to a credit union in 2011. It informs readers of the characteristics that make credit unions unique and highlights the benefits of credit union membership. Cummins also encourages consumers to not wait until Jan. 1 to join their local credit union. “Get ahead of the curve in accomplishing your first New Year’s resolution. Now is the time to discover a hometown financial institution that you can trust--one that provides professional and friendly service and saves you money in the meantime,” Cummins wrote. Cummins explained the attributes that set credit unions apart from other financial institutions, including the democratic structure, field-of-membership perimeters, and not-for-profit business model. He also overviewed the ways credit unions benefit consumers by creating a competitive financial services environment. “Credit unions believe that access to high-quality, low-cost financial services is critical to the financial health and stability of ordinary Minnesotans,” Cummins wrote. “While this has always been the credit union motto since the founding of the U.S. credit union movement 100 years ago, it is especially true in today’s economy.” To read the column, use the link.

CUs pledge 120M capital to Mid-Atlantic Corporate

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MIDDLETOWN, Pa. (12/10/10)--Mid-Atlantic Corporate FCU has received continued support from its member credit unions, who have committed more than $120 million in capital to the corporate. The commitment is being maintained even though the National Credit Union Administration (NCUA) has sent a letter to credit unions noting that "during the next year, boards will be expected to make a strategic decision about where to obtain essential services traditionally provided by the corporates." The corporate released its strategic plan in January and more than 650 credit unions committed $120 million in capital, said the New Jersey Credit Union League's newsletter (The Daily Exchange Dec. 8). "Mid-Atlantic Corporate has proven to be both innovative and experienced when it comes to financial performance, payment systems and operational expertise," the Middletown, Pa.-based corporate credit union said. The corporate "continues to be strong and steady, and we're confident we can continue to serve our members effectively under the revised NCUA rules," the article said.

CU System briefs (12/08/2010)

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* SASKATOON, Saskatchewan(12/9/10)--Two men who robbed a Canadian credit union Tuesday in Saskatoon, Saskatchewan, used an unusual weapon: bear spray. The masked men entered a branch of Affinity CU just before noon Tuesday and demanded money,according to Saskatchewan police. One of the two men sprayed bear spray in the building, but no one injured. The two fled on foot with an undisclosed amount (CBC News Dec. 7) … * SAN DIEGO, Calif. (12/9/10)--The San Diego County Credit Union Poinsettia Bowl, a college football game played on Dec. 23, is one of two San Diego bowls that would benefit from the launch of a social media campaign by the San Diego Bowl Game Association. The other game is the Bridgepoint Education Holiday Bowl on Dec. 30. The association implemented a multi-faceted social media program to generate Internet awareness, highlight key sponsors and community partners, and elevate the games' profiles. It plans promotions on Foursquare.com for discounts from San Diego businesses; Facebook so fans can express team pride and access discounts; tweets on Twitter by the Holiday Bowl's unofficial mascot, Sully the weiner dog; and a video blog on YouTube …

Man with hostage exchanges gunfire at CU drive-thru

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MONONA, Wis. (12/9/10)--A man who held another man hostage in a car while trying to withdraw funds from the hostage's account outside a Monona, Wis., credit union Wednesday was injured after ramming a police car and exchanging gunshots with police, said Monona police. The incident occurred at about 1:45 p.m. CT in the drive-thru lane at a branch of Madison-based UW CU (Wisconsin State Journal Madison.com and WXOX.com (Dec. 8). Police confirmed that they received a call from someone inside the credit union about a suspicious vehicle in the drive-thru. The hostage, who did not know the suspect, was in the car with the suspect and the suspect was attempting to withdraw the funds. When police arrived, the suspect rammed the police car and a gunfight broke out between the suspect and police. The suspect, the only person hurt, was taken to a hospital with unspecified injuries, and a gun was found in the car, police said. UW CU issued this statement at about 3 p.m.: "The Monona Police Department is at our Monona UW CU branch responding to an incident that occurred at our drive-up. The Monona branch location has been closed for the day and is expected to reopen [Thursday] at regular business hours. We have no additional comments to share at this time."

New York CUs help launch anti-fraud program

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ALBANY, N.Y. (12/9/10)--The Credit Union Association of New York and the state's credit unions Tuesday joined other organizations in launching an anti-fraud program to educate consumers in the state about fake-check scams. Twenty credit unions and two banks have signed up to participate, said the association. Other organizations involved in the "Don't Become a Target" program are the New York State Consumer Protection Board (CPB), the Consumer Federation of America (CFA), the New York Bankers Association and the Independent Bankers Association of New York State. Participating credit unions and banks will hand out a "Don't Become a Target" brochure created by CFA to every consumer who deposits checks or money orders of $1,000 or more or who withdraw $1,000 or more. In a fake check scam, the consumer receives a genuine looking check or money order often associated with an "advance" of sweepstakes or lottery winnings or with pay for working as a "mystery shopper." The consumer is asked to deposit the check and then wire funds somewhere else. Victims lose an average $3,000 to $4,000 when the fake check bounces. "Fake check scams are a serious problem for consumers," said William J. Mellin, president/CEO of the Credit Union Association of New York. "Credit unions want to do all they can to educate their members," he added. CFA is working with credit unions and banks and organizations in 12 states to launch the program in their states.

European CUs launch lobbying day

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BRUSSELS, Belgium (12/9/10)--Credit unions from seven European countries got a taste of political lobbying--some for the first time--as World Council of Credit Unions' (WOCCU) European Network of Credit Unions met with legislators at the European Parliament in Brussels Wednesday.
Click to view larger image Nearly 50 credit union representatives from eight countries met Wednesday in Brussels for the first "lobbying day" aimed at educating lawmakers in the European Parliament about the strength of credit unions.
Nearly 50 credit union and trade association professionals met with 30 European parliamentarians in multi-national delegations to spread the word about the services credit unions provide throughout the European Union (EU). The primary purpose of the visits was to introduce credit unions to parliament representatives unfamiliar with them and lay the groundwork for ensuring favorable legislation for credit unions. Participants from Estonia, Ireland, Macedonia, Moldova, Poland, Romania, the United Kingdom and the U.S. discussed issues such as the global economic crisis and the growing need for deposit insurance among emerging movements with lawmakers. Even Latin America was represented, with WOCCU First Vice Chair Manuel Rabines, president/CEO of Federación Nacional de Cooperativas de Ahorro y Crédito del Perú, participating. "Lobbying day is an important way to raise awareness among legislators and show our uniqueness compared to other financial service providers," said WOCCU Second Vice Chair Grzegorz Bierecki, who led an eight-member delegation representing the National Association of Cooperative Savings and Credit Unions, the Polish credit union trade group. Bierecki serves as president and CEO of the group. "Our efforts will create a positive view of credit unions." Most EU member countries have cooperative banks, but relatively few have credit unions. This can create recognition problems when it comes to exercising EU-wide legislation involving financial institutions, according to Marian Harkin, a parliamentarian representing Ireland and a credit union champion who welcomed the group. Effective lobbying efforts are critical to credit unions' continued growth and influence throughout the "Euro zone," Harkin said. "Credit unions are strong in just a small number of European countries, and that creates an issue when you are not a force in a particular state," Harkin explained. "Credit unions need to create networks of alliances with other cooperatives or similar institutions throughout the EU to expand their message to a wider audience."
Click to view larger image Fiona Cullen, head of lobbying for the Irish League of Credit Unions, makes a point to Pat "the Cope" Gallagher, who represents Ireland in the European Parliament. (Photos provided by the World Council of Credit Unions)/td>
Fiona Cullen, head of legal and lobbying activities for the Irish League of Credit Unions and part of a six-member Irish delegation to Brussels, agreed. "It's a process of education," Cullen said. "We don't have anything specific today that we're lobbying for. Our process is simply to open doors." Although WOCCU helped form the European Network in 2009, it has helped its European members lobby on their own behalves for the past five years. For lobbying novices like Efim Lupanciuc, general director of Moldova's Central Association of Savings and Credit Associations, WOCCU's experience will be an effective force in helping with the emergence and regulation of Moldova's credit unions. "We want the European Parliament to keep in mind that we are Europe-oriented and at the very beginning of our efforts," said Lupanciuc, from one of the newest credit union movements in a country on the cusp of joining the EU. "As credit unions, we want to be part of the global movement and up to the standards of other WOCCU members."

Interchange reg has CU implications--Filene study

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MADISON, Wis. (12/9/10)--A recent Filene Research Institute study looks at how federal regulation of interchange fees on debit card transactions will affect credit unions. “Interchange Regulation: Implications for Credit Unions,” written by Adam Levitin, associate professor at Georgetown University Law Center, examines how the Durbin Amendment to the Dodd-Frank Act that Congress passed this summer will lessen the roughly $17 billion in debit interchange paid to issuing financial institutions every year. Key findings of the study are:
* Growing credit union debit: Debit card activity at credit unions has grown briskly in the past four years. Median debit transaction dollar volume grew at an average rate of 12% from 2006 to 2009, while the median number of transactions grew at a rate of 9% during the same period. * Curtailed interchange will hurt: Debit interchange accounts for between 4% and 5% of credit unions’ gross revenue, while credit interchange is in the range of 1.5% to 2.5%. A 50% or greater decline in debit interchange revenue is possible for institutions larger than $10 billion, with 20 to 40 basis points (bps) a realistic possibility--down from 75 to 125 bps. * Reasonable and proportional: The true cost of the Durbin Amendment will become clear once the Federal Reserve rules on which charges are reasonable and proportional to the cost incurred by institutions to process debit transactions. Institutions may include the cost of fraud but not the costs of overhead or marketing. * Multi-homing: Institutions with less than $10 billion in assets may be shielded from the “reasonable and proportional” interchange standards, but they will still be subject to “multi- homing”--the requirement that each card be capable of processing a transaction on more than one network. Competition among networks will allow merchants to route transactions to the network that saves them the most money, which will push down income for issuers.
What are the implications for credit unions? Any regulatory movements will affect profitability, especially in a core product like debit cards, Levitin said. But the Durbin Amendment is particularly noteworthy for its likely middle- and long-term implications, he added. They are:
* Competition for small issuers: It is likely that competitive pressures will encourage networks to adopt separate interchange schedules for smaller institutions, which could leave small issuers’ debit interchange revenue largely untouched by the Durbin Amendment. If a two-tiered interchange structure emerges, it will help make credit unions more competitive in the card issuance market, Levitin said. * Mobile advances: Regulatory reform will likely encourage payment card networks to push aggressively into new--and less regulated--markets, particularly mobile commerce. If so, credit unions generally will have to look to license customizable mobile software platforms and piggyback on network-negotiated deals to gain a foothold in mobile payment transactions. * Threats to fees abound: The Durbin Amendment highlights the difficulties that credit unions face from an increasing reliance on fee-based revenue. Credit unions may find it necessary to adjust the bundle of services they offer with deposit accounts, possibly re-emphasizing credit cards that maintain attractive interchange rates.
“The $10 billion exemption may salvage debit interchange revenue for most credit unions. But expect it to hasten the move into new technologies and encourage the issuance of more credit cards as large banks and payment networks seek to win back lost income,” Levitin wrote. For more information, use the link.

Several CUs donate big bucks to special projects

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MADISON, Wis. (12/9/10)--It’s the season for giving, and credit unions nationwide are contributing funds to build their communities. Credit union pledges include:
* Alaska USA FCU, Anchorage, Alaska, pledged $50,000 to support redevelopment of the Anchorage Veterans’ Memorial located on the Delaney Park Strip. The Anchorage Veterans’ Memorial was developed 23 years ago with help and funding from the community, including Alaska USA FCU. The current project will include improved access for the disabled, new plants and landscaping, added lighting and security systems, and increased relevance to veterans and those who would honor them. * BECU, Tukwila, Wash., marked its 75th anniversary by pledging $80,000 to four Puget Sound area housing agencies. BECU requested and accepted proposals for grant consideration from nonprofit organizations. After a comprehensive review process, Housing Hope, Vision House, Plymouth Housing Group and South Sound Outreach Services were selected. * Northwest FCU Foundation, the charitable arm of Northwest FCU, Herndon, Va., recently granted a total of $20,000 to four Fairfax County public schools for staff professional development and technological advances for the classroom. The grants were made during a reception to celebrate its Fairfax County Public Schools business partnerships with Dranesville Elementary, Louise Archer Elementary, Rachel Carson Middle and Herndon High schools, the recipients of the donated funds. * American Eagle FCU, East Hartford, Conn., donated $45,567 to the United Way of Central and Northern Connecticut. American Eagle FCU employees pledged $28,572, while the credit union contributed an additional $14,286. Employees also raised $2,709 through internal fundraisers, including e-mail bingo, gift basket raffles and wear-jeans-to-work days. * Mountain American CU, West Jordan, Utah, donated $10,000 to the Utah Jump$tart Coalition to continue its work in training Utah teachers on financial education for youth. Mountain America CU was a founding member of the Utah Jump$tart Coalition, which was formed in 2000.

Visa to make contactless chips a standard feature

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PARIS, France (12/9/10)--Visa Inc. is making mobile payments a commercially available standard feature commercially available for its partner financial institutions in the U.S--including credit unions. Following 18 months of technology development in partnership with Texas-based DeviceFidelity, and trials with financial institutions in the U.S., Europe and Asia, Visa has tested and supports commercialization of In2Pay microSD for use with smart phones. Smartphone models compatible for use with this landmark technology include the BlackBerry Bold 9650, the iPhone 4, the iPhone 3GS, iPhone 3G, and the Android-based Samsung Vibrant Galaxy S. Visa said it also expects to add additional phone models, including phones based on the Symbian and Windows operating systems. “In addition to issuing plastic magnetic stripe or chip-enabled payment cards, financial institutions can now consider offering their account holders a new technology that enables them to transform their existing phones into fully functional mobile payment devices,” said Bill Gajda, head of Visa Mobile. The microSD payment technology was previously available only to financial institutions participating with Visa in mobile payment trials that included some of the largest financial institutions in the U.S., such as JP Morgan Chase, Wells Fargo Bank, US Bancorp and Bank of America. Now Visa issuers can obtain the technology under Visa’s standard contract terms and can load the Visa mobile payment application to microSD cards. Issuers who choose to adopt the technology can provide their account holders with a microSD card that can be inserted into the phone’s existing memory slot to enable the device for payment. The technology is compatible with existing contactless payment terminals already installed at retail outlets worldwide and enables account holders to hold the phone in front a payment terminal to pay. “This is a significant step towards the next generation of payments, loyalty and rewards, allowing banks and retailers to build entirely new business models,” said Nick Holland, a senior analyst with Yankee Group. “Visa’s announcement clearly illustrates that the future of payments will be mobile.”

Guatemala CU system launches private insurance fund

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GUATEMALA CITY, Guatemala (12/9/10)--Guatemala’s national credit union association, Federación Nacional de Cooperativas de Ahorro y Crédito (FENACOAC), and 19 of its affiliated credit union members made history last week when they launched one of the few private savings guarantee funds for credit unions in the world.
Click to view larger image Brian Branch, World Council of Credit Unions (WOCCU) executive vice president and chief operating officer, spoke of WOCCU’s longstanding relationship with Guatemala's national credit union association and congratulated members of the Guatemalan guarantee fund during a Dec. 2 launch.
Effective Jan. 1, the fund will guarantee up to $12,500 per person, per institution, a significant competitive advantage over Guatemala’s commercial bank offering of $2,500 per person (All amounts are in U.S. dollars). World Council of Credit Unions (WOCCU) designed the fund in collaboration with FENACOAC, a WOCCU member. FENACOAC and its participating credit unions deposited a collective $5.5 million dollars to capitalize the “MICOOPE savings guarantee fund,” named after Guatemala’s credit union network brand. The fund represents 1.5% of the system’s now-guaranteed $365.3 million in savings deposits. The capital level of the savings guarantee fund is expected to rise to 3% from 1.5% of guaranteed deposits over the next five years. Though small by U.S. standards, the guarantee will protect 98.9% of all members with savings and share accounts in Guatemala. A savings guarantee fund has been the dream of many cooperative leaders in Guatemala since WOCCU completed a cooperative strengthening program there in August 1994, said David Richardson, WOCCU senior manager and longtime adviser to FENACOAC. “It has taken more than 16 years to realize this dream, with many obstacles to overcome, but it has finally happened,” said Richardson, who acted as WOCCU project director in Guatemala for the former cooperative strengthening program, funded by the U.S. Agency for International Development (USAID). “It comes at a time when many people are worried about the safety of their money and the soundness of the financial institutions in Guatemala.” WOCCU’s PEARLS monitoring system, which is an international standard for measuring credit union financial performance, grew out of the Guatemalan credit union movement 20 years ago. In 2008, WOCCU completed a complementary risk monitoring tool, which is a key component used to measure risk in the MICOOPE savings guarantee fund. In developing the tool, WOCCU representatives consulted with staff from Fondo de Garantías de Entidades Cooperativas (FOGACOOP), a savings guarantee fund in Colombia, to learn about its risk evaluation system.
Click to view larger image Experts answered questions last week about the new Guatemalan savings guarantee fund, future challenges and how it compared to the banks’ fund. From left, are: David Richardson, World Council of Credit Unions (WOCCU) senior manager; Victor Manuel Mancilla Castro, superintendent of banks in Guatemala; Brian Branch, WOCCU executive vice president and chief operating officer; Evamarie Reta, CEO of El Monte (Calif.) Community CU; and César Augusto Avendaño Castro, director of risk management for a savings guarantee fund in Colombia. (Photos provided by World Council of Credit Unions)
Through WOCCU’s International Partnerships Program, the California and Nevada Credit Union Leagues also supported FENACOAC’s endeavor by sharing their member credit unions’ experiences with private deposit insurance in the U.S. Brian Branch, WOCCU executive vice president and chief operating officer, was at the official launch in Guatemala City on Dec. 2 to congratulate the founding members of the guarantee fund. “The Guatemala credit union system’s savings guarantee fund is an enormous achievement, especially at a time when consumer protection is a key focus in the financial services industry,” he said. WOCCU is working with FENACOAC and credit unions in Guatemala on a USAID-funded program to create and test agricultural and financial tools to improve rural and financial sector development, livelihoods and food security. The program will expand upon the network of Guatemalan credit unions to create and document the use of new financial products, services and delivery mechanisms for value chains and rural producers.

CU System briefs (12/07/2010)

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* HARRISBURG, Pa. (12/8/10)--Pennsylvania Credit Union Association (PCUA) President/CEO Jim McCormack was recognized for his years of service on the PASAE board of directors (Life is a Highway Dec. 7). PASAE, headquartered in Harrisburg, was founded as the Pennsylvania Society of Association Executives and serves more than 500 association and business professionals to advance the association management community in the state. PASAE Chair Daniel Tunnell presented McCormack with an engraved silver clock. McCormack has been a member of PASAE since 1981. He was elected to the board in 2005 and served as board chair in 2009 and as immediate past chair in 2010 … * ASBURY PARK, N.J. (12/8/10)--Steve L. Baker, 40, of Camden County, N.J., was sentenced to more than 64 years in prison for three financial institution robberies in Ocean and Monmount counties. Baker had been convicted in August of six counts in the armed robberies of the Investor Savings Bank, Lakewood, on Sept. 24, 2009; the PNC Bank in Brick on Nov. 9, 2009; and the First Atlantic FCU in Neptune on Jan. 13. He was also convicted of using a firearm during each robbery. Baker was ordered to pay $145,111 in restitution to the financial institutions. A co-defendant, Deshawn Clayton, 33, of Ocean Grove, pleaded guilty to the credit union armed robbery and was to be sentenced Tuesday. During the robberies, Clayton would vault the teller counters and loot money from drawers while Baker stayed in the lobbies and threatened the employees by saying, "It's not your money, it ain't worth dying for" (Asbury Park Press Dec. 6) … * CLACKAMAS, Ore. (12/8/10)--Two women were arrested 20 minutes after a robbery at Rivermark Community CU Monday in Clackamas, Ore., near Portland. Brittney Ann Sykes, 23, and Emma Westhusing, 19, were taken into custody after investigators surrounded a home. The robbery occurred when a woman entered the credit union branch at about 5 p.m. and demanded cash, then left with an undisclosed amount (Associated Press Newswires Dec. &7) …

Canadian CUs first FIs to launch mobile P2P payments

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VANCOUVER, B.C. (12/8/10)--Two credit unions are the first Canadian financial institutions to launch a payment system allowing users to securely send or receive money directly between financial institution accounts on their smartphones or computer. Central 1, which provides the e-mail and mobile platforms--has partnered with British Columbia's Prospera CU and Teachers CU of Ontario to launch Interac e-Transfer. The partnership is the first step in making person-to-person payments widely available across financial institutions. "Canadians have traditionally been eager to adopt new technology and there are already 22 million wireless subscribers in Canada," said Oscar van der Meer, chief technology officer for Central 1, the central financial facility and trade association for British Columbia and Ontario credit union systems. "This is the logical evolution of mobile banking, and as more retailers and financial institutions adopt mobile payments, the potential impact for consumers is virtually limitless," he added. Seventeen percent of Canada's credit union members have access to mobile Web banking, said Central 1. In addition, 18% of members have access to e-mail money transfers and 45% to mobile SMS text banking. Roughly 70% of Canadians nationwide use a mobile phone and 34% of those are smartphones such as a BlackBerry or iPhone. Interac e-Transfer simplifies the direct transfer of funds. The feature was previously known as Interac E-mail Money Transfer and was limited to sending funds between bank accounts using e-mail. Transfer notifications can now be sent either from computer to smartphone or from smartphone to smartphone in real-time. Other transfer solutions may take several days to complete a transfer and involve a stored value account.

WesCorp directors file response to NCUA claims

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LOS ANGELES (12/8/10)--Former Western Corporate FCU directors filed briefs in support of their motion to dismiss a lawsuit brought by the National Credit Union Administration (NCUA) related to decisions made prior to WesCorp's conservatorship. The briefs were filed Monday in the U.S. District Court, Central District of California, Los Angeles, in reply to NCUA's opposition filed Nov. 22 to the dismissal motions, which the former directors originally filed on Nov. 1. NCUA's suit, which seeks $6.8 billion in damages, alleges that WesCorp officers and volunteer directors breached fiduciary duties and engaged in "gross negligence" in their investment decisions before the recession. The case hinges on the way the court will treat the "Business Judgment Rule," which immunizes directors from personal liability if they follow the rule's requirements and insulates from court intervention management decisions made in good faith in what is believed to be the organization's best interest. According to the former WesCorp directors' brief, the business judgment rule "means that before a plaintiff can seek billions of dollars of damages from unpaid volunteer directors unsullied by any conflicts of interest or ulterior motives, the plaintiff must make cogent factual allegations strongly suggesting that the directors blinded themselves to reality, acted in bad faith or lacked any rational business purpose." NCUA's complaint "does not do that here," noted the brief. According to the opposition briefs filed by NCUA on Nov. 22, however, it is the agency's view that--at least with respect to WesCorp--the business judgment rule "does not eliminate directors' liability for breach of the duty of care." NCUA's complaint also alleges fraud as well as breach of fiduciary duty against Robert A. Siravo, WesCorp president/CEO from May 22, 2009, to March 20, 2009, and another officer related to executive compensation. The complaint alleged that Siravo and the other officer manipulated the board into approving more executive compensation than the board thought it was approving. NCUA is pursuing a third former officer for alleged unjust enrichment also related to executive compensation. WesCorp was placed into conservatorship on March 19, 2009, after it was required to recognize losses of $6.8 billion.

Michigan CU 3Q results show continued growth

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LANSING, Mich. (12/8/10)--Michigan’s credit unions continued to strengthen their financial positions in the third quarter, with strong earnings and growth in membership--54,000 new members since year-end 2009, according to the Michigan Credit Union League & Affiliates. Third-quarter statistics from the National Credit Union Administration and the Credit Union National Association highlight the continued deposit growth (7.3% for the 12 months ending Sept. 30), business loan growth (22.9%), and strong return on assets (ROA)--up to 34 basis points from 28 at mid-year, the league said. “As Michigan’s economy begins to recover, credit unions continue to grow and lend to small businesses and consumers,” said David Adams, league CEO. “The third quarter saw improvement for credit unions’ already strong financial indicators, allowing our industry to continue to support the state’s economy through lending.” Michigan continues to have the highest percentage of credit union membership among the 10 most populous states, at 44%, the league said. In the third quarter, nearly 40,000 residents moved their money to a local credit union, bringing total credit union membership in the state to 4,488,110. Other key statistics:
* Michigan’s credit unions showed stronger than expected ROA of 0.34%, despite high loan losses from a challenging economy, and continuing loan and deposit growth. * The net worth to assets ratio, a key measure of financial strength, shows Michigan credit unions held steady in the third quarter at 10.8%, higher than the national credit union average (10%). * As Federal Deposit Insurance Corp.-insured institutions pulled back on lending (down 8%), Michigan credit unions still showed positive loan growth (0.7%) for the 12-month period ending Sept. 30. Specific areas of growth included used auto loans (up 9.9%), first mortgages (up 2.9 %) and credit cards (up 4.2%). * For the 12 months ending Sept. 30, business loans by credit unions showed strong growth, up 22.9%, while the national growth rate for credit unions was 6.9%. For Michigan banks, commercial lending declined by 3.1% through September. Nationally, commercial lending by banks declined by 7.8% during the period. * Credit union deposits grew by 7.3% through the 12 months ending Sept. 30, including 17.6% growth in money market account balances, as consumers seek the safety and higher rates offered by credit unions. * Michigan credit unions also continued making real estate loans (up 0.2%), while banks cut back (down 8.6% in Michigan, down 5% nationally) for the 12 months ending Sept. 30.

CU local biz to provide jobs throughout Northwest

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ST. HELENS, Ore. (12/8/10)--St. Helens Community FCU, recently partnered with Northwest Structural Moving, Scappoose, Ore., to finance business loans for the purchase of specialized moving and rigging equipment. Loans such as these make possible the projects that Northwest Structural Moving is involved in, such as moving the 75-ton navigational lock to The Lower Monumental Dam on the Snake River, said the credit union in a press release. “Projects like this one help keep our Columbia County-based employees working all over the Northwest,” said Christy Settle, co-owner of Northwest Structural Moving. St. Helens Community FCU has $160 million in assets. The Credit Union National Association (CUNA) and credit unions have proposed lifting member business lending (MBL) limits for credit unions from the current 12.5% of assets to 27.5%. CUNA has estimated that lifting the MBL cap could create over 100,000 new jobs and inject over $10 billion in funds into the economy at no cost to taxpayers (News Now June 30).

New survey CUs on top in customer satisfaction

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MADISON, Wis. (12/8/10)--Credit unions and small banks lead their larger rivals in customer satisfaction and loyalty, according to the Prime Performance 2010 Bank and Credit Union Satisfaction Survey released Tuesday. The results from the survey of more than 6,000 U.S. bank and credit union customers indicate customer satisfaction is highest at credit unions and small banks. The report, issued today, analyzes results for credit unions, small banks, large banks and megabanks, including Chase, Bank of America and Wells Fargo (PRWeb Dec. 7). “The Credit Union National Association (CUNA) is not surprised at the finding, because this confirms what study after study have found,” Bill Cheney, CUNA president/CEO, told News Now. “It’s fine to be included with ‘small banks’ in a survey such as this. However, it’s also important to note the very real and fundamental difference between banks and credit unions, regardless of size: Credit unions’ not-for-profit, cooperative structure. “Ultimately, that’s what separates all credit unions from the rest, and drives their passion to provide the best service to their members, rather than amass profits,” he added. For big banks, the study revealed that customers question where bank’s loyalties really lie. When responding to the statement “My bank does what’s best for me, not the bank’s bottom line,” 16% of big bank customers responded that the bank’s interest came first. The percentages of negative answers were even higher for three of the best-known names in American banking. Twenty-three percent of Chase and Bank America customers believe their interests came second to the banks. At Wells Fargo, the number was 18%. Only 9% of small-bank customers believe that their bankers place the bank’s interests ahead of those of their customers. Survey findings included:
* Credit unions and small banks rate highest in meeting their customers’ needs; * Customers believe smaller institutions have the friendliest personnel and Chase the least friendly; *Customers at credit unions and small banks are far more likely to recommend others use their bank than customers at big banks and mega-banks; * Customers at credit unions and small banks are far more apt to believe employees want to help them than customers at big banks and mega-banks; and * Customers at credit unions and small banks are more apt to believe employees enjoy their jobs than customers at big banks and megabanks.
“In short, the study suggests that small banks and credit unions have a huge competitive advantage when it comes to giving customers an experience that meets their financial and emotional needs. Given the current vulnerability of larger institutions, we’d advise small banks and credit unions to hone their service skills a bit more and to go after depositors who want the environment and experience they offer,” said Jim S. Miller, president of Prime Performance. Survey data also shows that failure to say “thank you” significantly degrades the client experience. When employees thank customers, satisfaction rises at all financial institutions. The survey indicates:
* Roughly 18% of large banks customers rate their experience “unsatisfactory.” Only 2% do so when “thank you” is said. * About 11% of small bank customers rate their experience “unsatisfactory.” Only 1% does so when “thank you” is said. * Only 5% of credit union members rate their experience “unsatisfactory.” Only 1% does so when “thank you” is said.
Based in Denver, Prime Performance specializes in helping financial institutions enhance the banking experience they deliver to customers.

Members with second jobs increase says league.

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DULUTH, Ga. (12/8/10)--For consumers, taking a second job is a sometimes way to make ends meet. For someone working in collections, it’s a warning sign. The Bureau of Labor Statistics reports that 27 million Americans are working second jobs. And according to ABCNew/Money, the number of Americans looking for second jobs is expected to grow. “Usually, these are people who have been laid off from their primary job and are taking on two or even three part-time jobs to make ends meet,” said Ted Walden, president of Community Federal Credit Union, Waycross, Ga., in a Georgia Credit Union Affiliates press release. However, Walden doesn’t typically uncover these details until a member becomes delinquent on a loan. And with an economy sputtering like an engine that just won’t quite start, he’s seen an increase in “second-job syndrome.” “When we learn about these situations, we work with the individuals to help them prevent repossession or foreclosure,” Walden said, noting that he urges people who are struggling to make payments to contact their financial institutions first. “When we are apprised of the situation, we do everything we can to help people find a way out of the problem.” Working two jobs is never ideal, and Walden suggests credit unions can help members who want to cut an extra job by helping them make a plan. For example, consolidating high-interest debt may allow people to pay the debt down more quickly. “The goal is to reduce the debt and get to a point where you could live without the extra cash,” Walden said. Credit unions looking to help members who are facing the possibility of taking on a second job might ask these questions:
* What types of sacrifices is the family making when a second job is added? * How much additional income will a second job generate for the family? * How many hours per week will the member devote to a second job? * What factors should the member weigh to decide whether it’s worth getting a second job? * Are there alternatives to making ends meet without resorting to a second job? * Does having a second job alleviate stress or add to stress? Why or why not?

California league State housing market stabilizing

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ONTARIO, Calif. (12/7/10)--California's housing market has begun to stabilize in some regions, and next year likely will see more real-estate market movement because unemployment likely will decline, according to California Credit Union League senior industry analyst Daniel Penrod. Penrod was featured in an article, "Calif. housing recovering, coast first," in the Orange County Register (Dec. 3 and 4). "Few places offer a better window into finances on Main Street than credit unions," the article began, adding it checked with Penrod "to see what these consumer-centric financial institutions see economically around the state." While credit unions have been willing and able to lend, demand for mortgages has been lean, with members either over-leveraged or concerned about future employment, Penrod noted. "Next year is likely to see more movement in the real estate market as employment will be more settled--and unemployment likely declining," Penrod told the publication. "In addition, we will know where the economy truly sits as stimulus will be a memory and the market will have a better sense of how organic the growth is and what we can expect going forward," he added. He noted credit union portfolios "remain strong" because they "didn't loosen their standards during the boom to drive loan demand, so the mortgages on their books tend to be stronger…" The fields of membership that fared better in the economy have helped credit unions remain strong. Those (memberships) that struggle more have had more impact on their credit union, he said, "but, as a whole, credit union members are more current on their obligations than their banking counterparts. In addition, credit unions have seen fewer strategic defaults." California credit unions remain well-capitalized at over 9% capital ratio, with significantly lower delinquency rates than banks have, and the outlook for the future "is solid," he said. For the entire article, use the link.

CUNA analyzes savings-rate strategies for INY TimesI

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WASHINGTON and NEW YORK (12/7/10)--The New York Times, in an article Friday on why earnings on savings may not be keeping up with inflation, turned to Credit Union National Association (CUNA) Chief Economist Bill Hampel to help explain why interest rates on depository institutions' savings accounts are barely above zero. The article notes that people are doing a better job of spending less than they earn but leftover money is going toward paying down debt, not borrowing more. Banks can't lend their deposits out in the quantity they used to, or aren't because of tightened credit policies. Instead, said Hampel, they buy Treasury bills, which don't pay as they once did because of the interest rate environment. Nor do they deliver the kinds of returns banks would get if they loaned money under normal conditions, he said. The resulting lower profits make it harder to raise the rates that savers earn, while lingering losses from loans pose their own pressures, the article said. The article points out that "credit union members putting money into certificates of deposit would love to earn more, and they often do get a bit more than they would from a nearby megabank. But members who are borrowers want to pay less for their loans, and they often do." "Borrowers are owners just as much as savers are," Hampel said. The article, "Why Savings Account Rates Are So Pathetic," also provides a bar graph comparing banks vs. credit unions and citing CUNA as its source. It shows how greater bank noninterest/fee income and loan losses factor into the equation. To read the full article, use the link.

CUNA Chairman to guest conduct symphony

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EL PASO, Texas (12/7/10)--Credit Union National Association (CUNA) Board Chairman Harriet May will lead a holiday melody as guest conductor during the El Paso Symphony Orchestra's holiday concert this weekend. The concert is a benefit for the El Paso Hispanic Chamber of Commerce Foundation and its program to provide financial scholarships to help area high school students further their education. May is president of $1.7 billion asset GECU, which is headquartered in El Paso. The event is Sunday at 2 p.m. in El Paso's Plaza Theatre. Henry Quintana of El Paso Electric will provide narration for the event.

Ormans tip to 20-somethings CUs are better

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SUNNYVALE, Calif. (12/7/10)--Personal finance expert Suze Orman put in a good word for credit unions in her “10 Money Tips For the 20 Something,” which recently appeared on Yahoo (Shine Nov. 30). Orman’s Tip No. 10 left little room for argument: “Credit unions are better than banks.” Orman advised readers that they can open a card at a credit union and transfer the balance from existing cards. She told Gen Yers to find a credit union card by logging Credit Card Connection, a Website dedicated to helping consumers find “fair and ethical” credit cards. Orman’s final piece of advice to 20-somethings: Be on time with payments.

League group recommends consolidation names leader

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ONTARIO, Calif. (12/7/10)--The Corporate Realignment Task Force (CRTF), which includes credit union leaders from eight Western states, has appointed former California Credit Union League CEO Dave Chatfield to assume its chairmanship. Jeff York, initial chairman of the CRTF and immediate past chairman of the California Credit Union League, will remain on the task force. States represented in the task force include California, Nevada, Idaho, Oregon, Arizona, Washington, Hawaii and Utah. “The work of this task force requires dedicated time and attention,” said York. “We are fortunate that Dave has agreed to serve as chairman, and we are extremely grateful for his personal dedication.” Chatfield agreed to serve as chairman on the condition that he would do so in a strictly voluntary capacity. In its ongoing assessment of corporate system options and solutions, the task force continues to encourage system consolidation and specifically supports merger of corporate credit union bridge entities. The task force issued the following recommendation: “Following an initial review of projected services, transaction volumes, costs, and financial results of individual corporate credit union organizations and that of merged entities, members of the Corporate Realignment Task Force strongly encourage merger of corporate credit union bridge organizations consistent with system safety and soundness principles. “Any merged entity must (a) assure that safeguards are in place to protect corporate system functions and natural person credit unions interests as well as (b) assure that the option of a competitively priced, credit union-owned corporate system remains. The Corporate Realignment Task Force pledges its support and influence to help achieve such consolidation in the corporate system.” “The task force has been unwavering in upholding its principles--a system solution that takes advantage of aggregation and that provides credit unions of all sizes and types with a universal solution,” Chatfield said.

Report Increased loyalty leads to higher loan volume

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MADISON, Wis.(12/7/10)--Credit unions that want to improve their lending volume should look to increasing their member loyalty levels, according to a report recently released by the Credit Union National Association (CUNA).
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CUNA’s Credit Union Member Satisfaction, Growth, and Loyalty benchmarking report shows that its member survey clients say 22% of their members are in the “truly loyal” classification. Those “truly loyal” members satisfy all three of the these requirements:
* They “definitely would” recommend their credit union to others; * They “definitely would” contact their credit union the next time they need a financial product or service; and * They choose the credit union as their primary financial institution.
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“Loyalty is important because members who are ‘truly loyal’--the highest loyalty level--to their credit union carry outstanding loan balances at their credit union that are nearly 70% higher than those found among less loyal members--$7,749 versus $4,613,” said Jon Haller, CUNA’s director of corporate and market research. Member loyalty tends to increase as asset size increases, with the highest loyalty levels found among credit unions with assets of $500 million or more (See Chart I). Credit unions that monitor loyalty using the SatMetrix Net Promoter Score, can use “promoter group” information in their benchmarking efforts (See Chart II). The report provides the first glimpse at CUNA’s 2010 member statistics data. Accompanying this information are CUNA’s first publicly-released member loyalty and satisfaction benchmarks to help credit unions monitor their performance. The report is designed to help each credit union discover its strengths and weaknesses. The report is available to credit unions for $149 (PDF). To order by phone, call 800-356-8010, press 3, and use the stock number as a reference.

Vermont CUs National Guard to counsel returning troops

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BURLINGTON, Vt. (12/7/10)--The Association of Vermont Credit Unions (AVCU) is partnering with the Vermont National Guard (VTNG) to provide financial counseling to service members returning from Afghanistan. With as many as 1,500 VTNG service members returning from Afghanistan, the VTNG estimates that as many as 30% will be unemployed, and an additional 30% will return to lesser paying jobs. Those figures do not account for other non-financial complications and challenges, (Newsline Express Dec. 3). “Many returning soldiers are expected to incur financial difficulties that likely require ongoing support, education and guidance,” AVCU President Joe Bergeron told credit union managers and CEOs in a letter last week. “We’re assisting the guard in building a network of participating financial institution branch offices throughout the state to serve as a local community resource of financial counseling services for these men and women coming home after serving our country.“ The Vermont National Guard Financial Institution Support Network comprises financial institution locations with staff available to teach basic personal financial skills and provide on-going counseling to service members and families. Bergeron noted that the program “is a great way to leverage the success of AVCU’s Certified CU Financial Counselor (CCUFC) Training program that began in 2009.” The program has since been implemented by the Michigan and Utah Leagues. In 2011, the National Credit Union Foundation’s REAL Solutions program plans to adapt Vermont’s CCUFC pilot for development at several partner leagues. Due to federal regulations, VTNG said it will not endorse or recommend a particular financial institution, branch, or counselor. It make the network list available and may, at the service member’s request, contact the institution and/or counselor chosen by the service member to facilitate a meeting. Bergeron asked credit unions to submit their counselor’s contact information by Friday so the association can compile a list of participating credit unions and counselors for inclusion in VTNG’s Financial Institution Support Network database. To register, use the link.

CU System briefs (12/06/2010)

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* HIGHTSTOWN, N.J. 12/7/10)--New Jersey credit union leaders
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visited Credit Union House in Washington, D.C., Thursday to present Dan Mica, former president/CEO of the Credit Union National Association for 14 years, a $5,000 check for Credit Union House. From left are: Gary Chizmadia, Credit Union of New Jersey; John Hendery, New Jersey Credit Union League (NJCUL); Tom O'Shea, Aspire FCU; Rina Pantano, N.J. Gateway FCU; Mica; Bill Kennedy, Jersey Shore FCU; Paul Gentile, NJCUL; Bob Steeves, Essex County Teachers FCU; Beth Degnan, Affinity FCU; and Harry Jacobson, Pinnacle FCU. Also present was Pete Bruno, Financial Resources FCU. While there, the group received a regulatory update from CUNA Senior Vice President and Deputy General Counsel Mary Dunn; an election update from CUNA Senior Vice President of Political Affairs Richard Gose; and a governmental update from CUNA Vice President of Legislative Affairs Ryan Donovan. (Photo provided by the New Jersey Credit Union League) … * SANTA ROSA, Calif. (12/7/10)--Redwood CU (RCU) has been named California Credit Union Advocate of the Year by the California Credit Union League. It was selected for exemplary dedication and leadership in the field of political advocacy, including ongoing efforts to educate lawmakers about credit union benefits, and engaging staff and their members in supporting political action to benefit and protect credit unions and members. "Educating lawmakers about the important roles credit unions play in providing consumers and businesses with affordable financial services is a vital role for us to play, so we can continue to serve our communities well," said Robin McKenzie, senior vice president who oversees RCU's government relations efforts … * YUMA, Ariz. (12/7/10)--A federal grand jury has indicted three Yuma, Ariz., residents-- including AEA FCU former Vice President of Business Services William "Bill" Liddle--on charges of conspiracy to commit fraudulent business loans against the credit union. Also charged in the 68-count indictment were Liddle's wife, Rhonda Liddle, and Yuma businessman Frank Ruiz. The indictment alleges that the Liddle conspired with Ruiz to approve suspicious business loans in exchange for nearly $1 million in kickbacks to the Liddles. All of Ruiz's business ventures funded by AEA FCU loans--amounting to more than $25 million have ended in default all three defendants have filed for personal bankruptcy, according to the U.S. Attorney's Office ( KSWT.com Dec. 2 and 3. The three have pleaded not guilty to the charges. The charges carry a maximum penalty of 30 years in prison, a fine of $1 million or both … * ORANGE, Texas (12/7/10)--Sandra H. Cooper, the president and treasurer of Orange County Employees FCU, Orange, Texas, has been indicted by a federal grand jury and charged with embezzling nearly $1.2 million in funds from the $2.6 million asset credit union. The jury returned indictments on 14 counts of embezzlement and seven counts of money laundering. Trial has been set for Jan. 24. If convicted, Cooper faces up to 30 years in prison for each embezzlement charge and up to 10 years in prison for money laundering charges (KFDM.com Dec. 3) … * ROCKFORD, Ill. (12/7/10)--Rodger D. McCoy, 49, of Genoa, Ill., was sentenced to 17 months in prison Thursday for robbing the Genoa branch of Sycamore, Ill.-based Illinois Community CU on Jan. 8. McCoy pleaded guilty to breaking into the second story of the credit union and taking $69,506 in cash and a number of blank certified checks. He turned himself in to police after a surveillance video captured his face. Police recovered the checks and about $67,000 in cash. In addition to the prison term, he was sentenced to three years of parole after his release and ordered to pay $2,780 in restitution to the credit union and more than $4,514 to an insurance company to repair damage to the building during the break-in (Daily Chronicle Dec. 6) …

Ballots due Dec. 17 on contested CUNA board elections

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MADISON, Wis. (12/7/10)--Ballots for three contested Credit Union National Association board of director positions are due to an outside audit firm by the end of the day Dec. 17. Those up for election in District 2, Class B are:
* Robert Falk, president/CEO, Purdue Employees FCU, West Lafayette, Ind.; and * Stephen G. Behler, president/CEO, Kemba CU, West Chester, Ohio.
Running for election in District 4, Class A are:
* Patrick J. Drennen, CEO, 1st Gateway CU, Camanche, Iowa; * Dennis A. Fisher, president/CEO, First Security CU, Lincolnwood, Ill.; * Brian Smith-Vandergriff, board member, Catholic Family CU, Kansas City, Mo.; and * Patricia A. Wesenberg, governmental affairs liaison, Marshfield (Wis.) Medical Center CU.
Candidates in District 6, Class C race are:
* Brett Martinez, president/CEO, Redwood CU, Santa Rosa, Calif.; and * Scott Waite, senior vice president/chief financial officer, Patelco CU, San Francisco.

Cheney meets with Alabama Florida CUs

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TALLAHASSEE, Fla. and BIRMINGHAM, Ala. (12/7/10)--The League of Southeastern Credit Unions (LSCU) is conducting seven Town Hall meetings in December and January featuring Bill Cheney, CEO of the Credit Union National Association (CUNA).
The League of Southeastern Credit Unions is holding seven Town Hall meetings in December and January featuring Bill Cheney, CEO of the Credit Union National Association (CUNA). The meetings give credit unions a chance to meet CUNA’s new CEO and hear his vision for the future.
The meetings give credit unions a chance to meet CUNA’s new CEO, hear his vision for the future and spend time with the LSCU’s President Patrick La Pine, who will talk about the new league that comprises Alabama and Florida. Last week, town hall meetings were held in Alabama in Huntsville and Birmingham, and Florida in Tampa and Orlando. Cheney said his goal was to make CUNA’s leadership transition, which took place in July, as seamless as possible--given the issues the industry is dealing with now. The CUNA government affairs team had a good election for the industry by supporting 310 winning candidates of 358 House races and 27 of 31 Senate races. Cheney said that The Washington Post named CUNA the most bi-partisan organization in Washington. Cheney has strong ties to many lawmakers, but he explained that former CUNA CEO Dan Mica has been helping to introduce him to more key lawmakers. A recent meeting with new House Speaker John Boehner (R-Ohio) went well, Cheney said.
John Neusanger, CEO of Orlando (Fla.) FCU, asks Bill Cheney, CEO of the Credit Union National Association, a question at a town hall meeting in Orlando
Credit unions from Florida and Alabama listen as Bill Cheney, CEO of the Credit Union National Association, speaks in Tampa, Fla. (Photos provided by the League of Southeastern Credit Unions)
The Senate Banking Committee will conduct a hearing Thursday on the state of credit unions. The National Credit Union Administration (NCUA) Chairman Debbie Matz will be the only speaker, and CUNA is working with the regulator on messaging, Cheney said. He said he hopes she will point out that the industry, as a whole, is well-capitalized at 10%. Credit unions discussed the more aggressive supervision by the NCUA and the corresponding increase in documents of resolution and letters of understanding and agreement. CUNA has established a Supervisory Issues Working Group to create an Examination Bill of Rights for Credit Unions so credit unions can understand their rights and responsibilities, the rights and responsibilities of the examiner and the appropriate procedures if there is a dispute. Cheney said his vision for CUNA is broad. Credit unions must change the conversation in Washington about credit unions. When lawmakers are asked if they think cooperative financial institutions should exist, they all say yes, he added. With a broader view of the future, Cheney said, credit unions can see the incremental steps that CUNA is taking and how it is working. Cheney will speak to Florida credit unions in the Pensacola, Tallahassee and South Florida areas Jan. 13-14.

CU Savings rise loans drop in October

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MADISON, Wis. (12/6/10)--Credit union loan balances fell 0.25% in the month of October--the ninth month of declines during the past 12 months--according to a Credit Union National Association (CUNA) economist’s analysis of CUNA’s monthly review of credit unions.
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“Credit union loan balances typically decline 0.5% in October due to seasonal factors,” Steve Rick, CUNA senior economist, told News Now. “So the underlying trend growth is a negative 0.2%. This translates into a negative 2.4% annual rate of decline. Over the last 12 months, loan balances are down 1.2%, the lowest growth rate in 30 years. "Credit unions continue to charge off and sell off loans, while consumers continue to pay off existing loan balances," he addded. Adjustable-rate mortgages and used-auto loans were the only loan categories reporting positive growth rates.” Credit union loans outstanding declined 0.2% during October, compared with a decrease of 0.1% during September. Adjustable-rate mortgages led loan growth, increasing 3.1%, followed by used-auto loans, which rose 0.1%. Home equity loans declined 0.1%, as did credit card loans (0.2%) and new-auto loans (0.9%).Unsecured personal loans and fixed-rate mortgages dropped 1.4% and 2.1%, respectively. Credit union leans in October totaled $580.6 billion in assets, compared with $590.2 billion in October 2009.
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Credit union savings balances increased 0.7% in October, compared with a 0.3% decrease during September 2010. Share drafts led savings growth, rising 3.1%, followed by regular shares and money market accounts, which went up 1.3% and 0.7% respectively. Individual retirement accounts and one-year certificates each decreased 0.2%. Credit union savings in October totaled $803 billion--or $36 billion more than the $767 billion saved in October 2009. Regarding asset quality, credit unions’ 60- day-plus delinquencies decreased to 1.7% during October. “Loan credit quality was essentially unchanged in October at 1.7% delinquency rate,” Rick said. “We expect the delinquency rate to rise 10 basis points over the next few months because of seasonal factors and begin to fall again by February.” The loan-to-savings ratio decreased slightly to 72% in October 2010. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities-- increased to 19%. The movement’s overall capital-to-asset ratio remained at 10% in October. The total dollar amount of capital is $93 billion.

Addison Avenue First Tech merger approved by members

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PALO ALTO, Calif. and BEAVERTON, Ore. (12/6/10)--The Addison Avenue /First Tech merger of credit unions has received final approval to proceed from First Tech members. Addison Avenue FCU and First Tech CU will legally become First Tech FCU Jan. 1. Benson Porter, Addison Avenue’s current president/CEO will serve as president /CEO of the combined credit union. The Addison Avenue and First Tech boards unanimously agreed to the merger earlier this year. Final merger approval was subject to both regulatory and First Tech member approval. The National Credit Union Administration and Oregon both approved the merger in October. Results of the First Tech member vote were announced at a Special Membership Meeting on Dec. 2. The combined institution will operate as First Tech Federal and have assets of $4.7 billion, comprise 38 branches across eight states and Puerto Rico, have about 800 employees, and continue to serve some companies including Hewlett-Packard, Microsoft, Agilent Technologies, Intel, Cisco and Nike. Both credit unions will continue to operate under their current names until account, service and system integration is complete in June. The credit union will launch a combined website in January to introduce the new brand and keep members informed as integration activities progress. The merger of equals offers the new First Tech Federal a sustainable and robust operating model that creates the financial strength and stability needed to deliver significant long-term member value, said the credit unions. “For our members, tomorrow is today,” said Porter. “With greater resources, we can continue to invest in the technology and infrastructure our members need and want and that will make us the preferred financial institution for 21st century companies and their employees.”

TopLine FCU helps provide high school students with real world experience

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MAPLE GROVE, Minn. (12/6/10)--Through Minnesota nonprofit BestPrep and the North Hennepin Area Chamber of Commerce, employees at TopLine FCU have partnered with Park Center High School in Brooklyn Park in volunteering to help students understand the relationship between classroom learning and career skills.
Click to view larger image Students at Park Center High School in Brooklyn Park, Minn. are getting real-world mentoring via e-mail from employees of TopLine FCU.
BestPrep’s program, eMentors, joins business professionals with senior high school students to offer career-related advice and a glimpse into post-secondary and real-world experiences. TopLine FCU employees have been serving as one-on-one email mentors to Park Center’s International Baccalaureate Business Management students during the Fall 2010 semester. With the guidance of their teachers, these students have been corresponding weekly with their mentors to help them understand how to apply what they learn in the classroom to the workplace. The TopLine eMentors share their post-secondary and work-related experiences, along with career-related tips, to help students prepare for life after high school. “An email mentoring partnership between students and volunteers from almost any career field helps students understand how to connect what they learn in the classroom with what they can do for a career,” said Bob Kaitz, president/CEO of BestPrep. “This has been a rewarding experience for our employees and demonstrates their commitment to help future generations succeed,” says Harry Carter, president and CEO, TopLine FCU. “Providing a positive experience for youth to understand what they learn in the classroom and how this applies to life after post-secondary is one of many ways our employees carry on our goal of giving back to our communities.” Based in Maple Grove, Minn., Topline FCU has $275 million in assets.

CUNA to media Stubborn unemployment will hurt growth

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MADISON, Wis. (12/6/10)--A stubbornly high U.S. unemployment rate will continue to hurt economic growth heading into the new year, a Credit Union National Association (CUNA) economist told TheStreet.com Thursday prior to the government’s Friday release of unemployment figures. Even as the economy adds more jobs in the coming months, the unemployment rate will continue to stay around 9.5% through 2011, Mike Schenk, CUNA vice president of economics and statistics, told The Street. A Labor Department report issued Friday indicated the unemployment rate rose to 9.8% in November from 9.6% the prior month. “The level of growth we are seeing at this point is barely enough to cover new entrants into the job market,” Schenk added. To significantly lower unemployment--not something he anticipates occurring in the next 12 months, Schenk estimates jobs will have to grow at a pace of 400,000 per month. Even if the economy manages to add 175,000 jobs on a continual basis, the better employment prospects will probably cause discouraged job seekers to resume their searches, which would keep the unemployment rate high, he told the publication. The economy needs to grow between 2.75% to 3% for the job market to be in better shape, Schenk explained. “2.5% growth just won’t cut it,” he added. To read the article, use the link.

New Filene report helps CUs identify innovation opportunities

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New Filene report helps CUs identify innovation opportunities MADISON, Wis. (12/6/10)--“DISCOVER: A Guide to Identifying Innovation Opportunities” is the first in a four-part Innovation series from the Filene Research Institute is intended to deliver timely, insightful information about the practice of innovation from the worlds of business and academia. The issue addresses the often-overwhelming first step in the innovation process--discovery. How does one look for innovation opportunities and where does the process begin? Filene’s collection of articles offers models that may be adopted by credit unions interested in increasing their innovation competency to the benefit of the consumers they serve. The word innovation often inspires images of charismatic, creative, maybe even eccentric, folks who come up with world-changing ideas. In truth, the practice of innovation is structured and deliberate. Organizations that learn from each other, apply tested methodologies, and connect to consumers can create new markets that can remain viable and profitable, even during challenging economic times. “DISCOVER: A Guide to Identifying Innovation Opportunities” includes case studies that illustrate how companies successfully flex their innovation muscles. From IKEA to Southwest Airlines, from Disney to McDonald’s, from Amazon to iTunes, success stories abound. The report also includes a worksheet that provides a framework for generating conversation among internal workgroups and leadership teams. For more information, use the link.

Maine hunger walk raises 30000

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BREWER, Maine (12/6/10)--The ninth annual Maine Credit Unions’ Ending Hunger Walking Tour was the largest yet, with a record-setting 72 communities visited during the month-long trek and $30,000 collected to end hunger in Maine. The campaign, which has raised and distributed more than $3.5 million since 1990, is sponsored in partnership with Cross Roads Ministries, an Old Town-Maine based hunger agency, to cover the state on foot to raise awareness about the problem of hunger in Maine (Bangor Daily News Dec. 2). During the walk, Brenda Davis, executive director of Cross Roads Ministries, traveled statewide focusing attention on the severity of hunger exists in Maine, with 13% of the state’s population identified as food insecure. Davis began her month long journey Nov. 4 in Augusta. She visited food pantries, hunger organizations and credit unions in each town she visited. At each credit union, Davis picked up a contribution from the Maine Credit Unions’ Campaign for Ending Hunger as a way to support her cause. The campaign contributed more than $7,200 to food pantries throughout Maine. All told, Davis visited 79 credit unions and picked up campaign contributions totaling nearly $30,000 When she finished at Brewer FCU in Brewer on Thursday, Jon Paradise, government and public affairs manager for the Maine Credit Union League, presented Davis with a $1,572 check from the league--1,500 for the approximate the number of miles Davis covered (by foot and car) and 72 for the number of communities she visited.

Southwest Bridge Corporate council votes for merger

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PLANO, Texas (12/3/10)--Southwest Bridge Corporate’s Member Advisory Council voted in favor of merging with Georgia Corporate FCU Tuesday. “Yes, the committee voted 86% in favor of the proposal,” Kerry Parker, chair of the Southwest executive committee and president of A+ FCU in Austin, Texas, told News Now. “That’s the first tier. Then the 1,400 member credit unions [affected by the plan] will hold town halls and webinars to go through the proposed plan. Then NCUA decides. If NCUA says no, then we’ll have to go back to the drawing board. “A lot of hard work went into this,” she added. “The team at Southwest Bridge Corporate was very good. I don’t think people realize how quickly this has to be done. There’s a short time frame to do something, and we will do it.” Three corporates--Constitution Corporate FCU, Members United Corporate FCU, and Southwest Corporate FCU--were placed into conservatorship by the National Credit Union Administration (NCUA) Sept. 24 (News Now Nov. 2). NCUA in October chartered the two bridge corporate credit unions to assume the operations of now conserved U.S. Central Corporate FCU (US Central) and Western Corporate FCU (WesCorp), completing another step in its corporate credit union resolution process (News Now Oct. 6). “Any final approval authority resides with the NCUA board,” John McKechnie, NCUA director of public and congressional affairs, told News Now. “No proposal has been presented for NCUA review.”

CUNA Mutual broadens help to CUs for real estate lending risks

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MADISON, Wis. (12/3/10)--CUNA Mutual Group has partnered with WNC Insurance Services, Inc., to deliver a broader array of insurance solutions to help credit unions cover real estate lending risks. CUNA Mutual’s Collateral Protection and Mortgage Security programs protect the collateral on credit unions’ loan portfolios against uninsured exposures. Coupled with its existing consumer auto and real estate alliance with State National Companies, the addition of WNC enables CUNA Mutual to offer a strategic mix of manufactured and brokered products to protect credit unions against both consumer auto and real estate lending risks, said Chad Nitschke, CUNA Mutual vice president for commercial products. WNC will be the service provider for the expanded lender-placed and blanket real estate programs. WNC Insurance Services, Inc. is a lender-placed insurance program administrator for hazard, flood and wind risks, CUNA Mutual said. Unlike other providers who subscribe to a static “one size fits all” real estate approach in terms of coverage and price, CUNA Mutual offers the most variety of options available in the credit union marketplace today, Nitschke said. “Depending on a credit union’s specific situation we can build a real estate program using a fully tracked, immediate-issue or blanket solution across first and second mortgages, and [home equity lines of credit],” he added. “WNC welcomes the opportunity to work with CUNA Mutual to serve the mortgage protection needs of credit unions,” said Carl Herrmann III, WNC executive vice president for products and operations. “We are confident our 30-year experience in lender-placed insurance, our innovative approach and iClient technology provide quick and full protection of a lender’s interest in real estate collateral.” Existing CUNA Mutual customers are being notified about details of the new real estate options. Other credit unions interested in information about consumer auto or real estate coverage should contact their CUNA Mutual sales executive at 800-356-2644. “Based on credit unions’ specific needs for consumer auto and real estate loans, we will work with them to craft an ideal program, and I’m confident they will like what they see,” Nitschke said.

N.C. soldier says thanks for SECU care packages

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RALEIGH, N.C. (12/3/10)--As the saying goes, one good turn deserves another. When local students took part in State Employees CU’s (SECU) Support the Troop campaign little did they know that their example of good citizenship would be met with such heartfelt appreciation from one soldier. The Raleigh, N.C.,-based credit union organized the effort to collect supplies for care packages and send messages of appreciation to North Carolina soldiers serving in the Middle East. In Surry County, 35 schools, organizations and government agencies took part in the project filling 33 boxes, collecting $277 and accumulating 2,000 cards and letters (Mount Airy News Nov. 30). Sgt. Gregory Dillon, who is deployed aboard the USS Kearsarge in the Middle East, was touched by the gesture. He felt the care packages and the warm messages from Dobson Elementary School second grade class were just what his fellow troops needed so far from home. Dillon looked up the school and sent the class an e-mail of thanking them for their efforts. Thus began a correspondence between Dillon and the class. Dillon shared pictures of himself, his unit and his ship with the students. The students sent a class picture to Dillon. Leigh Brady, SECU senior vice president of education services, said it was gratifying to see the students receive positive feedback for their good citizenship. “The students are learning how important is it to recognize those who serve and protect our country in such a fine manner,” Brady said. “Because of SECU’s existing relationship in serving North Carolina’s public schools, we felt getting school children involved would be a great opportunity for them to be part of this project. These students are seeing firsthand the positive impact of their handwritten thank you letters. What they did made such a big difference.” To read the Mount Airy News’ account of the story, use the link.

Conn. Banking Dept. holds town hall meeting with NCUA

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MERIDEN, Conn. (12/3/10)--The State of Connecticut Department of Banking recently hosted a town hall meeting in conjunction with the National Credit Union Administration (NCUA) to update Connecticut credit unions on the conservatorship of Constitution Corporate FCU.
Presiding at the Connecticut Dept. of Banking Town Hall Meeting were, from left, Charles Furbee, Acting CEO, Members United Bridge Corporate FCU; Bill White, Interim CEO, Constitution Corporate FCU; Scott Hunt, Director, NCUA Office of Corporate Credit Unions; and Connecticut Banking Commissioner Howard Pitkin. (Photo provided by Credit Union League of Connecticut.)
Connecticut Banking Commissioner Howard Pitkin welcomed nearly 75 representatives from Connecticut credit unions and introduced guest speakers who addressed the transition as Members United Bridge Corporate FCU assumes the assets of Constitution Corporate FCU. Keynote speaker Scott Hunt, director of the NCUA Office of Corporate Credit Unions, outlined the steps leading to the assumption of Constitution Corporate FCU’s operations by Members United Bridge Corporate FCU. “When looking at the placement of Constitution’s operations,” Hunt explained, “we held two principles up front: minimal cost to you [Constitution’s member credit unions] and the cost effect to the [NCUSIF] insurance fund. That, and a number of other factors, including shared systems-related operations, led us to select Members United Bridge as the ideal choice for assumption.” Charles Furbee, acting CEO of Members United Bridge FCU, reviewed the bridge corporate’s position on a number of issues and offered his assurance of a transparent transition takeover with full cooperation of Constitution Corporate FCU’s staff. Bill White, interim CEO of Constitution Corporate FCU, reviewed the developments leading to the conservatorship proceedings and thanked member credit unions for their support during his 23 years of service at the corporate.

Iowa CU Foundation awards 22500 in financial education grants

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DES MOINES, Iowa(12/3/10)--The Iowa Credit Union Foundation (ICUF) awarded $22,500 to nine credit unions to further advance their financial education efforts. The recipients were chosen based on their financial education plans to reach a specific target market, or for the strategic direction set by that credit union’s board of directors. Each credit union will receive a $2,500 financial education grant. The Iowa credit unions selected to receive the grants are:
* Alliant Credit Union, Dubuque; * Ascentra Credit Union, Bettendorf; * Community 1st Credit Union, Ottumwa; * Financial Plus Credit Union, West Des Moines; * Greater Iowa Credit Union, Ames; * Midwest Utilities Credit Union, Waterloo; * Town and Country Credit Union, Harlan; * Veridian Credit Union, Waterloo; and * Village Credit Union, Des Moines.
“During these tough economic times, it is more important than ever that we equip our credit union members with the information they need to make sound financial decisions,” said Marybeth Foster, executive director of the Iowa Credit Union Foundation. “This grant is designed to help credit unions develop a financial education program or enhance an existing financial education program.” Winners were selected by the ICUF Grant and Scholarship Committee. Funds for the project came through a grant from the Northwest Area Foundation.

Philippine government honors WOCCU for development support

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WOCCU, which developed credit unions in the Philippines from 1997 to 2010, recently received a citation from the Philippine government for its efforts. (Photo provide by World Council of Credit Unions)
MADISON, Wis. (12/3/10)--Former President of the Republic of the Philippines Gloria Macapagal-Arroyo has awarded World Council of Credit Unions (WOCCU) a presidential commendation in recognition of its credit union development work in the island nation. The honor commends WOCCU for “its steadfast support, vital partnership and full cooperation with the Philippine government ... and to the upliftment of the lives and welfare of the Filipino people.” “We’re honored by the recognition WOCCU has received for its work in the Philippines,” said Pete Crear, WOCCU president/CEO. “We hope our efforts in support of Philippine credit union development have made a significant difference in the lives of the members they serve.” The citation specifically recognizes the ways in which WOCCU’s work supported “Beat the Odds,” a long-term social and economic initiative by Macapagal-Arroyo, whose term ended June 30. The Cooperative Development Authority (CDA), part of the Philippines’ Department of Finance, praised WOCCU for its technical support and financial assistance, particularly in identifying institutional gaps and furthering CDA’s capabilities in light of credit union legislation passed several years ago. “WOCCU also assisted CDA in the development and enhancement of new tools, systems and mechanisms, allowing us to provide quality service to the cooperative sector in the Philippines,” wrote Lecira Juarez, chairperson of CDA and a graduate of WOCCU’s Credit Union Empowerment and Strengthening (CUES) executive training programs, in a letter accompanying the presidential citation. The honor was first announced just prior to the end of Macapagal-Arroyo’s term in June. WOCCU provided development assistance to credit unions in the Philippines from 1997 to 2010, focusing on model credit union building and institutional branding. WOCCU’s Philippines program also promoted savings and credit education for poor women entrepreneurs, created the Model Credit Union Network and provided executive-level training of CDA staff to help prepare the agency to assume its role as regulator of the Philippine credit union sector. In 2002, the National Credit Union Foundation honored the CUES program in the Philippines with the Herb Wegner Memorial Award. The honor was presented that February at Credit Union National Association's Governmental Affairs Conference in Washington, D.C. According to WOCCU’s 2009 Statistical Report, 1,276 credit unions in the Philippines served 2.2 million members last year.

CUs can rescue small business members CUNA white paper says.

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The Credit Union National Association's (CUNA) Community Credit Union Committee released the third in a series of four whitepapers, “CU Business Services: Making it Real and Keeping it Safe today,” which offers insight on how credit unions with clear business services strategies and a disciplined approach to execution will have what it takes to “rescue” many small businesses and take them into the future. While small businesses--especially startups--have traditionally been the engine of the American economy and job growth, the weight of the Great Recession and continued uncertainty has caused this engine to remain sputtering in very low gear. The real future of small business depends on having a vibrant, consistent and disciplined financial infrastructure to support new business creation, growth and ongoing performance. With grassroots rising up everywhere, the time certainly may be right for credit unions to step up and become the engaged and vibrant financial partner to small business. “CU Business Services: Making it Real and Keeping it Safe” is written to serve as a useful guide for credit unions’ diligent efforts to pursue the opportunities in business services with a renewed energy and discipline. The CUNA Community Credit Union Committee was formed in 2006 to provide support for the growing group of community credit unions. The committee’s purpose is to support and service community credit unions and credit unions considering a community charter through: representation of community credit unions’ unique legal, legislative and regulatory needs; and education, resources and information. To download a free copy of “CU Business Services: Making it Real and Keeping it Safe,” use the link.

PSCU Fin. Serv. white papers show how to attract new members

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ST. PETERSBURG, Fla. (12/2/10)--PSCU Financial Services released two new white papers this week that illustrate how online and mobile banking services and professional 24/7/365 Call Center support can attract new members and boost revenues--while containing costs. The convenience of mobile and online banking services builds stronger and more profitable relationships with members, according to the experiences of two credit unions quoted throughout the paper. Both Texas Dow Employees CU (TDECU) in Lake Jackson, Texas, and Visterra CU in Moreno Valley Calif., report significant increases in deposits, loans and other services driven by online access. TDECU has also used online social media tools, including Facebook, Twitter and a social media website, to attract Gen Yers. While these credit unions celebrate increased loyalty and revenues, they also appreciate cost reductions achieved through fewer phone calls and in-branch interactions. Achieving higher revenues and lower costs is also the topic of the call center paper, which documents how a comprehensive solution such as the CUSO’s Total Member Care can dramatically improve support and availability while reducing expenses. In today’s financial services market, outsourcing call center services is essential to deliver affordable around-the-clock support expected by members, according to PSCU Financial Services. When evaluating potential suppliers, credit unions should start by looking for well-managed services with high single-call-resolution rates and a low percentage of abandoned calls. The paper also advises credit unions to go a step further to find a call center service that can deliver customizable scripts that allow real-time changes and a platform that supports multiple integration configurations, including shared banking functionality. The two free papers are entitled “Using Online Tools and Services to Attract and Retain Members” and “Call Centers: A Valuable Resource in Challenging Times.” These and other educational papers that describe best practices for promoting credit, debit, prepaid, e-Commerce and segment marketing activities are available at PSCU Financial Services’ website.

National campaign protects against ID theft

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ARLINGTON, Va. (12/2/10)--The recent 2010 Protect Your Identity Week (PYIW) campaign hosted by the National Foundation for Credit Counseling (NFCC) and the Council of Better Business Bureaus (CBBB) touched a record number of consumers, helping protect tens of thousands against identity theft. During the one-week campaign:
* 190 events were held in 40 states, serving more than 24,000 consumers in person; * 882 tons of material were shredded at events; * More than 28,000 consumers visited the www.ProtectYourIDNow.org English website and the www.cuidesuidentidad.org Spanish website; and * More than 6,000 consumers took the Identity Theft Risk Check in either English or Spanish.
Also, the event broke an existing Guinness World Record. Consumer Credit Counseling Service of Orange County, GreenPath Debt Solutions and BBB of Detroit & Eastern Michigan, and Consumer Credit Counseling Service of Delaware Valley were designated to compete in the Guinness category of Most Paper Collected in a 24-Hour Period. The existing record of 2,204 pounds was toppled by those three locations which collectively shredded a total of 31,979 pounds. Cintas Corporation, national shredding partner for PYIW, provided free document destruction for events nationwide, including the three that participated in breaking the world record. “Protect Your Identity Week has grown to become a nationwide mobilization of government agencies, nonprofits, business, and consumers coming together to fight identity theft and BBB is proud to work with the NFCC to make it happen,” said Stephen A. Cox, president and CEO of the CBBB. “Even though the week is over, BBB is still here throughout the rest of the year to help educate small business owners and consumers on how to protect their identity.” Regarding consumer advice for fraud protection during the holidays, the Pennsylvania Credit Union Association recommends that shoppers use their credit cards rather than their debit cards, (WHTM Nov. 24). In the event that a perpetrator would gain access to a debit card and commit fraud, the money would be stolen from a checking account. The consumer could be left without day-to-day while the fraud is being sorted out by the financial institution and the police. But if a credit card is compromised, access to a line of credit card is lost--not such an inconvenience in the short term. Consumers can avoid interest fees and still use their credit cards by paying their balance before the due date.

Three Canadian CUs promoting merger

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MADISON, Wis. (12/2/10)--A proposal to merge three credit unions in the Canadian province of Saskatchewan into one province-wide credit union has been put forward. The combined credit union would have thousands of members and billions of dollars in assets (The Canadian Press Nov. 23). Membership meetings are slated for this month on the potential merger of Conexus, Innovation and Synergy credit unions. A merger of the three credit unions would create a new entity comprising 84 branches 194,000 members and $7 billion in assets, Ian Rea, Conexus CEO, told the news outlet. Voting is scheduled to take place in January after the informational meetings are concluded. Each credit union must vote in favor of the proposal by a margin of 75% for the merger to proceed. “We did due diligence for the merger and there aren’t any negatives that I can see. It’s just a way for our credit union to grow and prosper into the future,” Gord Lightfoot, board president of Innovation CU said after a Nov. 23 meeting. “And through the credit union doing well, our members will be better served and I just see it as an entirely positive thing for our community” (The Southwest Booster Nov. 24).

Minn. CU network discusses corporate options

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ST. PAUL, Minn.(12/2/10)--More than 120 midwest credit union professionals gathered to discuss the state of corporate credit unions on Tuesday during the Minnesota Credit Union Network’s (MnCUN’s) Corporate Credit Union Forum. With the aim of helping credit unions navigate through the current corporate credit union environment, the forum--held in conjunction with the Credit Union Association of the Dakotas--featured insight from six credit union panelists. Panelists provided an overview of their credit union’s corporate selection process and shared information about their experiences with the corporates. The panel was made up of individuals from credit unions conducting business with the Federal Reserve or one of three different corporate credit unions. Panelists included:
* Rick Borchardt—chief financial officer of Lake State FCU, Moose Lake, Minn.; * Dan Cumbee--CEO of Dakotaland FCU, Huron, S.D.; * Pam Finch—chief financial officer of Mid-Minnesota FCU, Baxter, Minn.; * Lynn Kothe --CEO of North Memorial FCU, Robbinsdale, Minn.; * Pat Pierce--CEO of City & County CU, St. Paul, Minn.; and * David Sawin--CEO of St. John’s CU, Little Canada, Minn.
In their comments, the panelists emphasized the importance of evaluating the credit union’s needs and choosing a corporate credit union solution based on their own due diligence. They also highlighted the current opportunities available to the credit union movement to fix the corporate system. Panelists called on credit unions need to demonstrate the principles of cooperatives and work together to find solutions to the current situation. “This session provided credit unions a forum to have an open and honest conversation about what is and isn’t working in the corporate credit union system,” said Mark D. Cummins, MnCUN president/CEO. “By pooling ideas and experiences together, the attendees were able to gain further clarity on corporate options and how the movement as a whole will be able to work its way through the current situation.” In September, the National Credit Union Administration Board took action to resolve ongoing problems to reform the corporate credit union system. One of those actions was to finalize major revisions to Part 704, NCUA’s rule governing corporate credit unions. The NCUA proposal would establish a new capital structure for corporate credit unions, including risk-based capital requirements, to provide corporates with a stronger capital base. The NCUA Tuesday announced an extension for the comment period on the agency's recently proposed amendments to its corporate credit union rules. Interested parties now have until Jan. 28 to comment. The Credit Union National Association (CUNA) last week urged the NCUA to extend the comment period, saying that many aspects of the proposal "are in need of careful review by credit unions and the agency." CUNA President/CEO Bill Cheney said that CUNA appreciates the NCUA's "responsiveness to the needs of the credit union movement for more time to fully evaluate this important proposal."

Top 10 INews NowI stories for November

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MADISON, Wis. (12/2/10)--Stories about the corporate credit union system, and elections results with Credit Union National Association analysis dominated November’s list of top 10 stories in News Now. Other stories that made the list include a Filene study on adapting services to retain young adults, and a study on how free checking can prompt people to switch financial institutions. November's top stories are: 10. Counterfeit checks reported by CUs in five states MADISON, Wis. (11/23/10)--Credit unions from New York, Pennsylvania, Washington, Iowa and California reported counterfeit checks scams, CUNA Mutual Group announced on Wednesday, according to the New Jersey Credit Union League (The Weekly Exchange Nov. 15). 9. Constitution Corporate to be liquidated ALEXANDRIA, Va. (11/22/10)--Constitution Corporate FCU (Constitution) will be liquidated on Nov. 30, the National Credit Union Administration (NCUA) announced Friday. 8. Restitution, employment ban ordered for two by NCUA ALEXANDRIA, Va. (11/23/10)--Two former credit union employees have been banned from future work at any federally insured financial institution, as well as ordered to pay substantial restitutions, under prohibition orders issued by the National Credit Union Administration (NCUA). 7. WesCorp risk management was inadequate, NCUA says ALEXANDRIA, Va. (11/22/10)--The National Credit Union Administration (NCUA) has found that the management of failed Western Corporate FCU (WesCorp) “did not implement appropriate risk management practices to adequately limit or control significant risks in its investment strategy” before its ultimate conservatorship in early 2009. 6. Study pinpoints what prompts a switch in FIs: Free checking LOMBARD, Ill. (11/16/10)--Offering a free checking account is the top reason consumers say they would switch financial institutions, according to new research by Raddon Financial Group. Of consumers surveyed, 39% said they would switch if free checking changed. 5. NCUA to create ‘loan loss’ resolution tool ALEXANDRIA, Va. (11/18/10)--Saying it was ‘taking a page’ from the Federal Deposit Insurance Corp.’s (FDIC’s) recent action plan to increase available tools to resolve large, complex financial institutions, the National Credit Union Administration (NCUA) Wednesday announced its own Loss Share Program. 4. Filene Study: Adapt services to retain young adults MADISON, Wis. (11/17/10)--Attracting more Gen Y members is more than a marketing strategy for credit unions, it’s a matter of survival, according to a just-published report from the Filene Research Institute. 3.Projected corporate fund assessment a concern: CUNA ALEXANDRIA, Va. (11/19/10)--While the National Credit Union Administration’s (NCUA) proposed National Credit Union Share Insurance Fund (NCUSIF) assessment of 0 to 10 basis points “is right within the range” that the Credit Union National Association (CUNA) expected, CUNA President/CEO Bill Cheney said that CUNA is “troubled with the projected corporate stabilization assessment.” 2. Fitch withdraws ratings of three more corporates CHICAGO (11/2/10)--Ratings organization Fitch says it has affirmed and then withdrawn its ratings for three corporate credit unions under conservatorship. 1. How did CUs fare? CUNA election analysis WASHINGTON (UPDATED: 1:00 P.M. ET 11/3/10)--With the makeup of the 112th Congress falling into place after Tuesday’s midterm elections, the Credit Union National Association (CUNA)has analyzed the near future for credit unions and legislation in general.