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Community service highlights CUs' holiday spirit

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MADISON, Wis. (12/28/12)--
Click to view larger image Northwest FCU President/CEO Gerrianne "Winky" Burks, posing as Cindy Lou Who from Whoville, waves to the crowd during the 67th Annual Tree Lighting Ceremony and Christmas Parade in Manassas, Va., earlier this month. She joined 16 other credit union staff, portraying the Whos of Whoville in the Grinch-themed float, "Don't Let Checking Fees Steal Your Christmas." (Photo provided by Northwest FCU)
While many credit unions collected toys to make children's holidays brighter, other credit unions demonstrated their holiday spirit at community-wide events, raising the visibility of their credit unions while doing something special for their communities--and having some fun, too.

Manassas, Va.'s 67th Annual Tree Lighting Ceremony and Christmas Parade featured staff from Herndon-based Northwest FCU (NWFCU), the event's official sponsor, portraying the Whos of Whoville in the Grinch-themed float, "Don't Let Checking Fees Steal Your Christmas."  NWFCU President/CEO Gerrianne "Winky" Burks, appeared as Cindy Lou Who, and 16 other staffers were the Whos of Whoville.

The parade is the largest parade in Northern Virginia, drawing nearly 60,000 spectators and more than 2,000 participants, said the credit union, which has been a parade sponsor since 2009. "This is a great way for Northwest to support the communities we serve while building awareness--plus the response from the crowd for Cindy Lou is heartening," said Burks.

The credit union and the Northwest FCU Foundation also joined in as sponsors and volunteers for an afternoon of food, fun and friendship for local senior citizens. The 21st Annual Senior Holiday Luncheon, drew more than 150 people to the Manassas campus of Northern Virginia Community College. Each guest received a meal and a warm winter scarf.

Other efforts from credit unions:

  • Click to view larger image Riverside, Calif.-based Altura CU staff  decorated a "Holiday Wine & Spirits" Christmas tree that was sold for $3,500 at the 23rd Annual Festival of Trees. The proceeds go to the Riverside County Medical Center's Pediatrics Units.  Decorators include, clockwise from left: Gaby Perez, Jacque Thurman, Irene Simone, Cindy Thomas, Tina Covington and Karena Chum. Simone and Chum coordinated this year's efforts by Altura. (Photo provided by Altura CU)
    Altura CU, Riverside, Calif., continued its holiday tradition of raising funds for Riverside County Medical Center's Pediatrics Units as part of the 23rd Annual Festival of the Trees, where 50 local organizations, including Altura, decorate a tree that is sold to businesses as part of the event. Proceeds go to the medical center. Altura staff's "Holiday Wine & Spirits" tree was sold for $3,500. The five-day event typically raises about $500,000 and attracts more than 30,000 people. It  is the main fundraising event for the medical center and a major holiday event for the community. Irene Simone, branch manager, and Karena Chum, business development officer, coordinated Altura's efforts this year. Altura also sponsored Story Time With Santa for children.
  • Lathrup Village, Mich.-based Michigan First CU and Michigan First Foundation donated $500 for needy children, collected $660 and more than 40 new and used coats for an annual coat drive, participated in 96.3 WDVD's "Christmas On Us" to provide $1,000 in gifts and services for five Metro Detroit families, hosted a blood drive for the American Red Cross, and continued its tradition of bringing Santa into its branches during December.
  • Freedom CU in Warminster, Pa., hosted two visits from Santa and Mrs. Claus at its Warminster and Northeast branches. More than 100 members and their children had their photos taken with Santa. Freedom CU's employees were on hand to print the free photos and hand out candy canes. Freedom also collected boxes of nonperishable food items and toiletries and donated $400, all for St. John's Pantry.
  • Financial Partners CU, Downey, Calif., sponsored the City of Downey's annual Holiday Parade by providing $5,000 to the parade as its major sponsor. The event was held Dec. 2. "We have been a visible member of the Downey community for the last 74 years," said Financial Partners CU CEO Nader Moghaddam, noting that the credit union has "seen the community develop economically and culturally into the wonderful place that it is today. Our sponsorship is a demonstration of our commitment to the future of this dynamic community."
  • Virginia CU, Richmond, Va. used the holidays as an opportunity to provide budgeting advice to the community in its press release "How to stretch your dollars during the holidays." It provided advice on stretching the budget (don't shop for yourself, keep a list of what you have bought, make your own gifts); spending (research for the best deals, use coupons, use statement rewards, keep receipts and ask for refunds); and saving for next year (open a separate savings account, keep records of what you spend this year, and sign up for an automatic savings program based on debit card purchases).
  • Click to view larger image Employees from TruMark Financial CU, Trevose, Pa., donated 670 pounds of food to the Food & Nutrition Network, a division of the Bucks County Opportunity Council, Lower Bucks County. The donated food will provide 509 meals for families living below the poverty level. (Photo provided by TruMark Financial CU)
    Los Angeles FCU employees volunteered to assemble food crates at the Los Angeles Regional Foodbank. They worked with several groups to produce 800 food crates totaling 20,000 pounds of food that included fresh corn, carrots, cabbage and bell peppers distributed to more than 500 needy families in L.A. County. After assembling the crates, LAFCU President/CEO John Dea presented L.A. Regional Foodbank CEO Michael Flood with a $1,000 donation, to be used for hunger relief in the county.
  • Pensacola, Fla.-based Gulf Winds FCU committed $25,000 to help MANNA fulfill its mission of feeding the hungry. The donation was presented to MANNA last month at its "Fill the Mayflower" Holiday Food Drive at Cordova Mall in Pensacola. The non-profit organization distributes the food through six pantries in Escambia and Santa Rosa counties.  "We are experiencing unprecedented demands in service and have had a food shortage," said MANNA Executive Director DeDe Flounlacker. "This generous donation by Gulf Winds literally had our team jumping up and down with excitement because we know the impact it will have on our efforts and the communities we serve."

Purchase of NH bank by CU is official today

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GARDNER, Mass. (12/28/12)--A Massachusetts-based credit union's purchase of a New Hampshire bank--said to be the first acquisition in the U.S. of a stock savings bank by a credit union--becomes official today in a $6.4 million deal.

Monadnock Community Bank (MCB), based in Peterborough, N.H., is a former state-chartered credit union that was converted to a federal savings bank in 1996. It is being purchased by GFA FCU, Gardner, Mass., in what the credit union says is a first (WBJournal.com Dec. 27).

The bank was initially chartered in 1971 as AWANE CU and served the Automotive Wholesalers Association of New England Inc. It opened its retail banking office in November 1997 and changed its name in October 2000.

GFA announced it is developing a new marketing look and using "Feel Better at GFA" rebranding messages to communicate the advantages of joining the credit union.

The bank office will be the ninth full-service GFA branch.  Seven are located in north central Massachusetts and two in New Hampshire.

"Many of our customers have shared positive comments about joining a credit union--they are excited about the expanded products and services that GFA can offer them," said William M. Pierce Jr., president/CEO of MCB, in a press release.

Another credit union, in Wisconsin, also is applying to buy a savings bank.  Landmark CU, New Berlin, Wis., filed applications in September with state and federal regulators to acquire Hartford Savings Bank, a state-chartered mutual savings bank headquartered in Hartford, Wis. (News Now Sept. 26).

CEO: Low interest rates a challenge, 2013 to bring opportunities

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FARMERS  BRANCH, Texas (12/28/12)--Compressed interest margins stemming from the low-interest-rate environment is a huge challenge for credit unions in 2013, but there are also opportunities, according to the chairman of the Texas Credit Union League.

"We make most of our money on the spread, and it's important to maintain that income stream to better serve members," said Paul Trylko, league chairman and president/CEO of Amplify CU, a $612 million asset credit union based in Austin, in the league's newsletter, LoneStar Leaguer (Dec. 17).

The Texas league is asking CEOs in the state what they see as the biggest challenge and opportunity for 2013, said the Leaguer.

"We all need to manage, diversify our portfolios to better serve all of our members, effectively manage risk, and earn yields that support our long-term need to grow capital," Trylko said.

The biggest opportunity for 2013 will be attracting young people--both as employees and members, he said, noting that the movement has "a great group of next generation leaders already in our ranks that are invested in the cooperative credit union business model.

"We just need to ensure that they have the culture and environment that enables them to serve well, make a difference, give back to the community and be part of something bigger than themselves," Trylko told the league.

That means including a good compensation system and a progressive way of doing business. "Current leadership has to develop the next generation, give them guidance and get out of the way to allow them to grow," he said.

Having younger employees will make it easier to attract younger members, he said, but that isn't enough.  "We have to look to the trends and do business in a way that resonates with the next generation," Trylko  told the league.

"We have to bring innovation and new access channels to the table to attract and retain the member of tomorrow. The speed of change is increasing and we, as an industry, need to push forward and lead--opportunity awaits," he said.

End of the year brings spurt of dividends payouts

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MADISON, Wis. (12/28/12)--Several U.S. credit unions nationwide have paid out end-of-the-year dividends to their members.

They include:

  • Navy Army Community CU in Corpus Christi, Texas, with $1.49 billion in assets, announced a 12% bonus dividend, which equates to 2012 dividends paid to date--excluding Liberty Checking dividends--multiplied by 12%.
  • Guardian CU in Montgomery, Ala., gave back more than $800,000 in the form of interest rebates and dividend bonuses. The $226 million asset credit union said roughly 23,000 members received money back in early December, with one individual receiving more than $3,300.
  • Birmingham, Ala.-based Acipco FCU, with $136.7 million in assets, said it paid $1.7 million in bonus dividends and interest rebates to it 7,300 members. That comes to an average payout of $232 per member.
  • DFCU Financial in Dearborn, Mich., announced a $21 million "Special Patronage Dividend"--the same as last year's payout. That marks the seventh consecutive year that the $3.3 billion asset credit union has paid the dividend.
  • Eastman CU, a $2.63 billion asset credit union based in Kingsport, Tenn., reported it paid a $5 million "extraordinary dividend," up from $4 million in 2010. This year marks the 16th consecutive year the dividend has been paid to members.
  • Emergency Responders CU, with $16 million in assets and based in Winston-Salem, N.C., will return a 5% interest rebate to current members who paid interest on loans in calendar year 2012, with the rebate posted in their savings account.
  • MECU of Baltimore members received loan interest rebates on Dec. 5 totaling $1.14 million or 6.25% of the interest paid between July1 and Nov. 30.  On Monday, MECU will pay its members extraordinary dividends for the period of July 1 to Dec. 31. MECU has paid its members a cash bonus every year since 1981. For all of 2012, MECU will have returned $4.25 million to its members.
  • Scott CU, in Edwardsville, Ill., is giving more than $1.2 million back to active members in the form of a 3% Annual Percentage Yield Bonus Dividend and a 3% Loan Interest Rebate this month. The dividend and rebate were credited to members' savings accounts.
  • Utilities Employees CU in Wyomissing, Pa., a virtual credit union serving the U.S. utility and energy industry nationwide, will distribute a membership loyalty bonus of nearly $1 million to its nationwide membership at the end of the year.
  • K.C. Police, CU, Kansas City, with $100 million in assets, will pay a dividend--the first in its 78-year history--to members on Monday. It will distribute $200,000, with members receiving 7% of the sum of the interest they've paid on loans and interest earned on deposits.

NY CUs continue record asset, membership growth

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ALBANY, N.Y. (12/28/12)--New York credit unions continued to show an upward growth trend for assets, shares, members and loans in the third quarter of 2012, said the Credit Union Association of New York (CUANY).

Click to view larger image Click for larger view
New York credit unions exceeded national averages in all four of those categories--setting new records of $61.5 billion in assets and nearly 4.8 million members, said a new Credit Union Performance & Trends Report from Callahan & Associates.

"This growth reflects the changing attitudes consumers have towards big banks," said William J. Mellin, CUANY president/CEO. "It also shows how credit unions have stepped up their efforts to increase awareness among consumers of credit unions as safe financial institutions that provide both good value and promote thrift."

Other growth highlights include:

  • New York credit unions had annual outstanding loan growth of 8.1% in September 2012, nearly double the national average of 4.2% over the same time, CUANY said.
  • The average member relationship (the outstanding combined loan and share/savings balances per member, excluding member business loans) also increased to $17,341 at the end of the third quarter.
  • Credit unions in New York saw share/savings balances increasing at 8.8%--faster than the national average of 6.2%--as regular shares, money market accounts and share drafts grew at a double-digit annual pace.
  • Capital levels remain high at New York credit unions, at 11.3% of assets. That is a higher level than New York banks and thrifts, as well as credit unions and banks nationwide, CUANY said.
  • Business loans on the books of New York credit unions increased 16.9% from September 2011, with member business loan originations totaling more than $1.9 billion in the first nine months of 2012.

Garden Savings FCU, Morristown FCU to merge Jan 1

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PARSIPPANY and MORRISTOWN, N.J. (12/28/12)--Garden Savings FCU, headquartered in Parsippany, N.J., and nearby Morristown  (N.J.) FCU announced plans to merge, effective Tuesday.  

Click to view larger image Lou Vetere (left), president/CEO of Garden Savings FCU, shakes hands with Richard Myers, president/CEO of Morristown FCU, after the planned merger of the two credit unions was announced.  (Photo provided by Garden Savings FCU)

The credit unions will continue to operate under the name of Garden Savings FCU and operate full-service branches in Parsippany, Morristown, Newark, Dover and Murray Hill.

Garden Savings FCU, established in 1968, has more than $212 million in assets and more than 15,000 members from more than 100 sponsor employer groups, including Alcatel-Lucent.

Morristown FCU, established in 1953, has $65 million in assets with nearly 6,000 members primarily from its core sponsor group, Honeywell. The merger was approved by the Morristown FCU membership on Nov. 27, and signed and made official by both respective boards of directors on Saturday.

"This merger has the best interests of our members in mind for both the short and long term," said Richard Myers, president/CEO of Morristown FCU. "Both credit unions are based in Morris County and the resulting credit union will be diverse, flexible and dynamic."

"Morristown FCU has been a healthy, successful credit union for six decades," said Lou Vetere, Garden Savings president/ CEO. "To combine our products, services, locations and membership is an opportunity that will strengthen both credit unions in many ways."

CU System briefs (12/28/2012)

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  • OSCODA, Mich. (12/28/12)--A suspect in the Dec. 20 robbery of Oscoda, Mich.-based Northland Area FCU's Skidway Lake branch was hospitalized after rolling his vehicle over in a field during a police chase. The unidentified man, 50, suffered a collapsed lung. Police say he will be arraigned next week after his release from the hospital. The incident occurred at about 2:15 p.m. when a man allegedly brandished a handgun and robbed the credit union, then fled to the car. All the money taken and a weapon have been recovered, said policy (The Ogemaw County Herald Dec. 26) …
  • DUNEDIN, Fla.(12/28/12)--The City Commission of Dunedin, Fla., has approved a financial incentive package of $127,000 to try to persuade Clearwater-based Achieva CU to choose the city as the location of its new corporate headquarters. The approval was unanimous (Tampa Bay Times Dec. 23). Under the agreement, the city would waive $21,200 in building review, inspections and five years' business tax and licensing costs; award the credit union matching grants of $5,000 for design assistance, $10,000 for demolition and $42,500 each in fiscal years 2013 and 2014 for façade improvements; and pay the $5,835 legal bill for drawing up the contract. The credit union is remodeling a former Nielsen Media Research call center and expects it to be completed in the spring …
  • HARRISBURG, Pa. (12/28/12)--Two credit union officials and several members of Philadelphia area credit unions are represented on the Steering Committee of the Philadelphia Area Cooperative Alliance (PACA), said the Pennsylvania Credit Union Association (PCUA)(Life is a Highway Dec. 27). The committee includes Mark DeYoung, vice president of Eastern member service, Sun FCU; Diane Childs, vice president of marketing, Sb1 FCU; and several members of Philadelphia FCU. The committee will oversee PACA's incorporation, bylaws and member recruitment. The membership organization, developed earlier this year, is a network of cooperatively owned businesses and allies working to support development of new co-op businesses, provide services to existing co-ops, educate the public about co-ops, and advocate for co-ops with elected officials, said PCUA. Cooperatives, including credit unions, are celebrating 2012 as the United Nations International Year of Cooperatives …
  • BARTLESVILLE, Okla.(12/28/12)--The Board of Directors of 66 FCU, a $636 million asset credit union based in Bartlesville, Okla., announced last week that the credit union will adopt a new name in 2013 (Bartlesville Examiner-Enterprise Dec. 23). It has hired a nationally recognized naming and branding firm to assist in developing the new name. The credit union has had a history with Phillips Petroleum Co. since 1939 and more recently with ConocoPhillips, said 66 FCU President/CEO Kelly Diven. "However, a new name will help convey that we serve not only these two employee groups, but others as well," Diven said, adding a new name would help position the credit union for future growth and financial strength. The credit union also serves The University of Kansas, Tyson Foods and other select employee groups …

CU System briefs (12/27/2012)

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  • FORT WAYNE, Ind. (12/27/12)--Fort Wayne, Ind., police say they are concerned that serial robbers may be behind a surge in credit union and bank robberies in the area (Associated Press via The Republic.com Dec. 16). Fort Wayne reported 15 financial institution robberies during 2012, some of which involved the institutions' employees being bound or injured.  The total is more than the past four years combined, said police. On Nov. 30, an employee of ProFed FCU was ambushed and held at gunpoint, then she and two co-workers were bound at the hands and ankles while three men collected cash and fired shots in the building before fleeing. That robbery was one of the most violent of this year's robberies, police said. The area also experienced a high number of robberies in the late 1990s before the creation of a special robbery task force in Northeast Indiana. Police said that most times a rash of robberies may occur when someone is released from prison or moves into the area, or from gang activities as individuals move on to other crimes. Six of the 2012 robberies occurred at Chase Bank locations.  So far, three men have been arrested, with two convicted and a third to stand trial in January …
  • MARLBOROUGH, Mass. (12/27/12)--A Marlborough, Mass., man was charged Thursday with two counts of uttering a false check and two counts of larceny by check over $250 after he allegedly stole more than $5,000 in checks from his girlfriend's parents (The MetroWest Daily News Dec. 21). Jason A. Pagan, 32, allegedly tried to cash one of the checks at St. Mary's CU. The branch manager contacted the victims and told them Pagan had tried to cash the check but couldn't because of insufficient funds. Police said Pagan allegedly had drained their account by writing himself 12 checks totaling $5,551 …
  • HARRISBURG, Pa. (12/27/12)--The Pennsylvania Credit Union Association (PCUA) Monday announced that Abby Kiebach, CEO of Lancaster (Pa.) Red Rose CU, has been selected as the recipient of the 2013 Paul E. Kanjorski Advocacy Scholarship (Life is a Highway Dec. 26). The award entitles Kiebach to attend the CUNA Governmental Affairs Conference (GAC) in Washington, D.C., in February. Kiebach has developed working relationships with local, state and federal officials. Through her experience at the CUNA GAC, she hopes to enhance her political knowledge for continued service on the association's Governmental Affairs Committee, and make a difference for the credit union movement, said PCUA ...
  • SAN ANTONIO (12/27/12)--Security Service FCU (SSFCU) is officially a Juntos Avanzamos credit union. Texas Credit Union League (TCUL) President/CEO Dick Ensweiler last week presented the credit union with a proclamation and a flag, which represents the credit union's participation in the TCUL initiative (LoneStar Leaguer Dec. 17). The Juntos Avanzamos--or Together We Advance--designation is earned through a rigorous application and review process, in which a credit union must demonstrate it has the capacity, commitment and compassion to serve the Hispanic market's financial needs, said the league ...

CUs made sure kids had good holiday

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Click to view larger imageEmployee JoAnn Ruggiero (third from left) of Bethpage (N.Y.) FCU shops with children who are clients of Education & Assistance Corp. (EAC) programs as part of the 13th Annual EAC Holiday Shopping Spree sponsored by the Marie & Micheal Gubitosi Foundation.  More than 100 children were given $100 Walmart gift cards, and an hour and a half to shop with Bethpage volunteers to help them decide on toys, clothing and electronics to fulfill their holiday wish list. (Photo provided by Bethpage FCU)
MADISON, Wis. (12/27/12)--Credit unions nationwide undertook or sponsored holiday programs to make sure children had a happy holiday season.

Bethpage (N.Y) FCU, with $4.85 billion in assets, pledged its support to several children's non-profit organizations, providing toys and support to underprivileged Long Island families. For the fourth year in a row, through its "Heart of Bethpage" community outreach program, Bethpage volunteered to support Operation Jocelyn Spirit, a nonprofit organization that answers children's letters to Santa. More than 80 Bethpage employees "adopted" a local child, answered his or her letter, and fulfilled the child's holiday wish list by purchasing presents.

Bethpage also participated in the 13th annual Education & Assistance Corp. Holiday Shopping Spree, sponsored by the Marie & Micheal Gubitosi Foundation and hosted this year by Walmart's Farmingdale location. More than 200 Long Island foster children each received a $100 gift card to purchase items on their holiday list and shopped with Bethpage volunteers, who helped them make their choices of toys, clothing and electronics.

Bethpage supported two additional efforts including the John Theissen Foundation Toy Drive by placing toy collection bins in every branch. This is the 10th year Bethpage has worked with the foundation. Also, as part of the Newsday Holiday Lights Festival, sponsored by Bethpage, children and families from across Long Island created holiday cards for children admitted to Cohen's Children's Medical Center, located in New Hyde Park.   

Other examples of credit unions with the holiday spirit:

  • Click to view larger image Standing among 3,070 toys collected by employees of Virginia Beach, Va.-based Chartway FCU  are, from left: Lance Cpl. Shinequa Murray, United States Marine Corps (USMC); Stephanie Harney, Chartway regional sales support manager; Rick Richter, Chartway vice president of technology; and Lance Cpl. Michael Bersch, USMC. Chartway employees surpassed their goal of collecting 2,000 toys by more than 1,000, putting the credit union among the top five corporate contributors in Hampton Roads. (Photo provided by Chartway FCU)
    Employees and members of Chartway FCU in Virginia Beach, Va., rallied together to help ensure that thousands of needy children in Hampton Roads could wake up Christmas morning with smiles and the glee of playing with a new toy. "No child should have to go without a present and no parent should have to see the look of sadness on their child's face because for some families, holiday presents areluxuries--and food, heat, and clothing are necessities," Rick Richter, Chartway president of technology. With a goal of collecting 2,000 toys, the $1.9 billion asset credit union encouraged employees to drop off brand new toys in collection boxes at their Chartway branches. Friendly competition among departments, branches, and individuals helped push this year's drive well past all records. In surpassing its goal and donating 3,070 toys, Chartway landed among the top five corporate contributors in Hampton Roads, according to Toys for Tots.
  • Members and staff of Highmark FCU in Rapid City, S.D., and "Secret Santas" from the Black Hills community were busy bringing in gifts for each child at the Black Hills Children's Home campus in Rockerville, south of Rapid City. All gifts from the children's wish list were returned to the $86.2 million asset Highmark FCU's main office, by Dec. 17-- in time to be wrapped and labeled for the Black Hill's Children's Home Christmas Eve celebration. Several donations delivered to Highmark covered extra holiday expenses at the Children's Home. One anonymous donor, who was physically unable to shop for gifts, sent in $400. The staff at Highmark FCU also pitched in to build on that donation. The extra funds covered any last minute gift and additional holiday needs at the home.
  • For more than 20 years, employees of Aberdeen Proving Ground FCU (APGFCU) in Edgewood, Md., have partnered with The Salvation Army and its Angel Tree program each December to provide assistance to local families during the holiday season. Staff at the $932 million asset APGFCU collected hundreds of new toys, bikes and clothing for children in Harford County. Through the Angel Tree program, local families in need registered their children for Christmas gifts through The Salvation Army. Gift-givers could choose to donate all of the items on a child's wish list or additional gifts. Once donations were collected, The Salvation Army sorted and distributed the gifts to the families before Christmas Eve.
  • Click to view larger imageThe staff at Highmark FCU in Rapid City, S.D.,  presented a check for $500 to Theresa Schreiner, volunteer program and development coordinator, Black Hills Children's Home, to help cover holiday expenses. (Photo provided by Highmark FCU)
    Three Connecticut credit union chapters--the Hartford Chapter, the New Haven Chapter, and the Moran/Nixon Chapter--joined forces to celebrate the holidays with a gathering that featured business meetings and reports, a sitdown feast, holiday entertainment, and contributions of unwrapped toys for the U.S. Marines' traditional Toys for Tots program. The 10th consecutive get-together in Plantsville, was attended by 173 guests from 22 credit unions, who donated hundreds of toys and a record $1,830 in cash from chapter coffers and raffle ticket sales for the toy collection program (Record-Journal Dec. 26).

St Paul Croatian FCU defendant enters not guilty plea

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CLEVELAND (12/27/12)--Another figure arrested in the loan fraud scheme that contributed to the collapse in 2010 of Eastlake, Ohio-based St. Paul Croatian FCU has entered a not guilty plea for his alleged role in the case.

Svetislav Vujovic, 40, of Brunswick, Ohio, pleaded not guilty Friday in a federal court in Cleveland to one count of financial institution fraud, one count of bribery in connection with the business dealings of a financial institution, and two counts of money laundering.

The indictment filed against him earlier this month alleged that from January 2004 to January 2008, he fraudulently obtained loans totaling about $2.2 billion, which were not repaid (Medina County Gazette Dec. 8).

Vujovic is one of nearly 20 people who have been arrested for the fraud scheme.

The scheme involved $1 million in kickbacks, bribes and gifts paid to the defunct credit union's CEO, Anthony Raguz, in return for issuing more than 1,000 fraudulent loans to more than 300 account holders at the credit union. The loans were worth a total $70 million and were allegedly made from 2000 to April 2010, when the credit union was placed into conservatorship, then liquidated by the National Credit Union Administration.

Raguz was sentenced last month to 14 years in prison (News Now Nov. 27). The alleged ringleader. Koljo Nikolovski, 49, of Eastlake and Skopje, Macedonia, was sentenced to 18 years in prison (News Now May 14).

The closure of the credit union, which cost the National Credit Union Share Insurance Fund more than $170 million, was one of the costliest credit union failures in history

CU flashlight guides family in Italian earthquake

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HARRISBURG, Pa. (12/27/12)--A flashlight from a Pennsylvania-based credit union, a gift to a 6-year-old, saved the day for a family stationed in Italy during an earthquake earlier this year.

The Mercer County Community FCU (MCCFCU), a $65.6 million asset credit union based in Hermitage, Pa., learned of the incident from a member, Connie George, whose family is stationed in Italy, said the Pennsylvania Credit Union Association (Life is a Highway Dec. 18).

Richard and Kelly George Blagg and their family were awakened early one morning when their house in Ferrara, Italy, began shaking, said PCUA. Outside it sounded like bombs going off and glass breaking. The area was experiencing an earthquake.

The power was out, and the family had difficulty finding their way through the house. However, 6-year-old Titus reached under his pillow for his MCCFCU flashlight he had received as a gift.

The flashlight helped guide them through the house as they found their passports and important items before going outside to safety. 

When the quake subsided, their house was still standing, but in need of some cleaning, said PCUA.

HarborOne sets March meeting on converting to bank

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BROCKTON, Mass. (12/27/12)--HarborOne CU has scheduled a special meeting of its members to vote on the Brockton, Mass.-based credit union's proposal to convert to a mutual cooperative bank charter.

The meeting is set for 5 p.m. E.T. on March 11 at The Shaw's Center in Brockton (Enterprise News.com Dec. 25). If approved, the conversion would go into effect by the end of 2013.

The credit union has said that converting to a bank charter would enable it to expand into Boston, make more commercial loans and raise more capital. It also has said it cannot open a branch in Boston because it is restricted to serving four counties in Southeastern Massachusetts.

The National Credit Union Administration has pointed out that the credit union could petition the state to expand its geographic boundaries. The agency also has said HarborOne is not near its member business lending cap and it could sell stock to raise capital (News Now May 8).

Members who have had an account at the credit union for at least three months as of this coming Feb. 15, and who are at least 18 years old, will be eligible to cast their ballot on the proposed change.  A conversion would require a simple majority of the members who vote. Members will be sent ballots before the meeting, and they can choose to vote either by mail, by taking their  ballot to their branch, or in person at the meeting in March.

The $1.9 billion asset credit union has more than 150,000 members.

WOCCU taps nine International Exec Volunteer Corps leaders

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MADISON, Wis. (12/27/12)--World Council of Credit Unions (WOCCU) has inducted nine credit union professionals into its International Executive Volunteer Corps (IEVC).

The IEVC recognizes industry leaders for their dedication to international credit union development and volunteer service with WOCCU.

"World Council volunteers are vital to international credit union development and to building a global community," said Brian Branch, WOCCU president/CEO. "Partner credit union movements receive tailored, one-on-one training in critical areas. At the same time, seasoned professionals who lend their expertise bring a unique international perspective back to their credit unions."

The new IEVC members are:

  • Joe Bergeron, president/CEO, Association of Vermont Credit Unions, partnership with  Federacion Nacional de Cooperativas de Ahorro y Credito del Peru;
  • Alan Cameron, president/ CEO, Idaho Credit Union League and Affiliates, former partnership with Solomon Islands Credit Union League;
  • Mark Cummins, president/CEO, Minnesota Credit Union Network, partnership with Central de Cooperativas del Area Nacional (Paraguay);
  • Rob Kimmett, vice president-public relations, Massachusetts Credit Union League, partnership with Bahamas Co-operative League;
  • Tom Liebe, vice president-governmental affairs, Wisconsin Credit Union League, partnership with Asociacion de Instituciones Rurales de Ahorro y Credito (Dominican Republic);
  • Dick Nesvold, president/CEO, SouthPoint FCU, Sleepy Eye, Minn., in conjunction with Minnesota Credit Union Network partnership with Central de Cooperativas del Area Nacional (Paraguay);
  • David Southall, president/CEO, Innovations FCU, Panama City, Fla.; in conjunction with League of Southeastern Credit Unions & Affiliates partnership with Federacion de Cooperativas de Ahorro y Credito de Costa Rica;
  • Brett Thompson, president/CEO, Wisconsin Credit Union League,  partnership with Asociación de Instituciones Rurales de Ahorro y Crédito (Dominican Republic); and
  • Kristina Wright, vice president-association services, Minnesota Credit Union Network, partnership with Central de Cooperativas del Area Nacional (Paraguay).
IEVC members are affiliated with WOCCU's volunteer activities and International Partnerships Program, which formalizes credit union movement partnerships throughout the world to share best practices in operations and product development.

Inductees have demonstrated at least a three-year commitment to furthering  WOCCU's international credit union development efforts. Each has engaged in two or more volunteer assignments abroad. IEVC members must have hosted at least four international credit union professionals at their individual credit unions within the previous two years. The achievements of this year's inductees span six countries.

For more information about WOCCU's International Partnerships Program, and to view a complete list of IEVC members, use the links.

Several states report CU mergers

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MADISON, Wis. (12/27/12)--Credit unions in several states reported mergers or proposed mergers with other credit unions before the holidays. Here is the latest merger list.

In Texas, Two San Antonio credit unions--Air Force FCU and Peoples Choice of San Antonio FCU (PSCA FCU)--announced they have merged, as of Dec. 15,  with Air Force FCU remaining as the primary credit union. PSCA's field of membership will be incorporated into the Air Force FCU charter.

Air Force FCU President/CEO Robert "Bob" Glenn will continue to head the surviving credit union. The merger will create a stronger financial cooperative and provide expanded services to members in San Antonio and around the world, the credit unions said in a press release.  The merger will provide access to eight branches in San Antonio and brings Air Force FCU to more than $350 million assets and nearly 37,000 members.

In Springfied, Mo., CU Community CU (CUCCU), announced the completion of its merger with Springfield-based Southwest Missouri CU, effective immediately.  CUCCU is the remaining credit union. The combined credit union has more than 10,000 members and $90 million in assets.  Southwest Missouri CU had more than 3,500 members living and working in Greene and Christian Counties, said CUCCU President/CEO Judy Hadsall. "The merger is complete, and Southwest Missouri CU members are already taking advantage of enhanced products and services offered by CU Community," Hadsall said.

Two credit unions in Niagara Falls, N.Y.,  have merged, effective Dec. 1. They are the $78 million asset Niagara's Choice FCU and the $46 million asset Niagara County's FCU.  The combined credit union will be known as Niagara's Choice FCU, and have 23,000 members and $122 million in assets.  It now operates five full-service branches--two in Niagara Falls and one each in Lockport, North Tonawanda and Wheatfield  (Business First of Buffalo Online Dec. 13). The combined credit union will retain Niagara's Choice CEO Alfred Frosolone.  Nancy Kasprzak-Whitmore, former CE) of Niagara County's FCU, will be executive vice president of the combined credit union.  No staff have lost their jobs in the merger, which makes Niagara's Choice the second largest credit union in the county and the fifth largest in the region.

In Minnesota, Baxter-based Mid-Minnesota FCU, a $237 million asset credit union with 36,109 members, announced that on Dec. 1, Ashby FCU, a $1.2 million asset credit union serving 500 members in Ashby, had merged into Mid-Minnesota.

Guthrie FCU is newest member of FHLBank Pittsburgh

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PITTSBURGH (12/27/12)--Guthrie FCU in Sayre, Pa., is the newest member of the Federal Home Loan Bank (FHLBank) of Pittsburgh, the FHLBank announced Monday.

The FHLB is a three-state financial institution cooperative of commercial banks, thrifts, credit unions and insurance companies in Delaware, Pennsylvania and West Virginia.

The $62 million asset Guthrie FCU has membership spanning more than 60 common bonds of community activity, including families, businesses and nonprofits. Guthrie FCU is the 28th credit union member to join FHLBank Pittsburgh (Business Wire Dec. 26).

Earlier this month, AmeriChoice FCU in Mechanicsburg, Pa., with $165.8 million in assets, also joined the FHLB-Pittsburgh.

Membership in FHLBank Pittsburgh supports Guthrie FCU's liquidity by providing access to FHLBank's product line of financial services, including low-cost loans (advances), which can be used for community lending, general asset/liability management and financing.

CNBS to provide Malawian student internship

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OVERLAND PARK, Kan. (12/27/12)--CNBS, a securities brokerage and investment advisory firm serving the credit union community, announced it will provide a 12-month internship to a Malawian student, Christopher Hamera, in 2013.

Hamera, 25, is a student at Africa University in Mutare, Zimbabwe, and is majoring in economics. His home is in Blantyre, Malawi.

Malawi, a land-locked country in sub-Saharan Africa, is the fifth-poorest nation in the world. Roughly 85% of the 14 million Malawians residing in the country are subsistence farmers. However, since the 1970s, Malawi has had a credit union system, which is improving access to financial services and contributing to members' financial stability.

There are about 30 credit institutions in Malawi--called Savings and Credit Cooperatives (SACCOs). The SACCOs have their own trade association, the Malawi Union of Savings and Credit Cooperatives organized in 1980. Sylvester Kadzola, president/CEO of MUSCCO, is on the board of directors of the World Council of Credit Unions, and is supportive of CNBS' internship program.

"Christopher's internship will focus on credit unions and other financial institutions, the securities markets, and central banking," said Brian Hague, CNBS president. "His long-term career objective is to lead the Reserve Bank of Malawi (Malawi's central bank), and he hopes his internship will lead to career opportunities within the country's SACCO system."

CU development in Libya explored by WOCCU

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TRIPOLI,  Libya (12/26/12)--
Click to view larger image San Francisco FCU President/CEO Steven Stapp (far left), The MILLA Project's Lara Thomas (center) and World Council of Credit Unions President/CEO Brian Branch (far right) met with a business group in Misrata, Libya, to discuss Shariah-compliant financial products that credit unions may offer there.
World Council of Credit Unions (WOCCU)  representatives traveled to Libya earlier this month to discuss credit union development with central bank authorities, civil society groups and local business councils.

Libya's transitional government is beginning the road to economic recovery as it rebuilds from a civil war and international attention following the Benghazi attacks, said WOCCU.

WOCCU President/CEO Brian Branch traveled to Libya with Steven Stapp, president/CEO of San Francisco FCU.  Also with the group were Lara Thomas and Allaeddin Ghadyi from The MILLA Project, an international human rights organization working to bring democratic financial institutions to Libya. Thomas is a member and 2012 scholarship winner of WOCCU's Global Women's Leadership Network.

"We were approached to explain the credit union model," Stapp said. "As the country reconstructs, it is an opportunity for credit unions to participate in rebuilding the economy."

The group met with representatives from the Central Bank of Libya; the Libyan Business Council; a business group from the northwestern coastal town of Misrata; and a civic and human rights group called the Libyan Liberal Forum for Democracy.

Libya's former regime did not support Islamic finance in the country, but new leadership passed an Islamic banking law in May, and public demand for Shariah-compliant services is high, said WOCCU.  Local groups asked WOCCU  to explain such products and services available through credit unions and how they might be implemented in Libya.

Click to view larger image Meeting with central bank authorities to discuss Islamic finance development in Libya through credit unions were (pictured left to right) Allaeddin Ghadyi, Lara Thomas, and Steven Stapp. Not pictured is Brian Branch. (Photos provided by the World Council of Credit Unions)
"The first priority for the government of Libya is writing a new constitution and establishing security," Branch said. "Moving from a centrally controlled economy requires business security and contract protection. Local business councils in Tripoli and Misrata are looking for solutions to finance large-scale business."

Access to financial services remains limited in Libya. When civil war erupted there in 2011, Libya stopped producing and exporting oil, which accounted for about 70% of the country's gross domestic product. The economy contracted 41.8%. Foreign investment and aid has since declined. Events in Benghazi increased both international and local business concerns for security.

Branch said state officials and business councils are exploring ways to release central bank guarantees and financing for business.

"Most small and family businesses are self- or family-financed, and that will be the next wave," Branch said. "Consumer finance is still a new concept. Financial cooperation is still not well understood, but many are looking for an Islamic finance model. The credit union model fits."

WOCCU has implemented credit union development programs in 71 countries, including 18 African nations and a recently completed Islamic finance program in Afghanistan that established 34 Shariah-compliant financial cooperatives and points of service across the country (See related News Now story, "WOCCU expands Islamic finance in Afghanistan with new member" in today's issue.)

WOCCU has not yet had a credit union development program in Libya.

WOCCU expands Islamic finance in Afghanistan with new member

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MADISON, Wis. (12/26/12)--
Click to view larger image World Council and U.S. Agency for International Development officials met with IIFC Group staff and board members in Kabul last month to discuss IIFC network's progress and acceptance as World Council members.
After nine years in Afghanistan, the World Council of Credit Unions (WOCCU) has completed its donor-funded program there and welcomed the country's new credit union trade association, the IIFC Group, into WOCCU's membership this month.

Amid political uncertainty and a challenging operating environment, WOCCU created and formalized a network of 34 credit unions and points of service, known as Islamic investment and financial cooperatives (IIFCs), in 14 provinces across Afghanistan. Each outlet offers products and services compliant with Islamic law. Each cooperative is owned and controlled by local members.

As of November, roughly 92,456 IIFC members had accumulated $4.5 million in savings and shares. In the past three years, members borrowed and repaid $74 million to grow their farms and small businesses. (All amounts are in U.S. dollars.)

"World Council provided the institutional and policy framework, training and technical guidance under extremely difficult circumstances," said Brian Branch, WOCCU
Click to view larger imageIIFC membership development officers visited local markets, small business owners and farmers to introduce the IIFCs' products and services and to sign up members.
president/CEO. "The individual IIFC employees and IIFC Group staff have built this network often at great personal risk. We wish them continued success as they work to expand the network and to deliver services to the Afghan people."

Just after the country's inaugural democratic presidential election at the end of 2004, WOCCU Council established the country's first credit unions in northern Afghanistan with funding from the Microfinance Investment Support Facility for Afghanistan (MISFA). In two consecutive programs funded by the U.S. Agency for International Development (USAID), World Council expanded the IIFC network farther south and east, developing an array of Islamic financial products for farmers, small business owners and women in regions where the insurgency was strongest and where Shariah-compliant financial services were unavailable.

The credit union model's shared ownership and risk is well-aligned with the precepts of Islamic finance, said WOCCU. Every IIFC member contributes or purchases at least one $1 share; all members are considered owners; and profits and losses are distributed in member dividends at the end of the fiscal year. WOCCU worked closely with local religious leaders to develop appropriate products and services and to gain traction in more conservative communities.

Click to view larger image Female membership in the IIFCs has ranged from a high of 35% of total membership in one northern IIFC to an average 1%-2% in southern IIFCs, where women's role is highly restricted. (Photos provided by the World Council of Credit Unions)
WOCCU's latest USAID-funded Rural Finance Cooperative Development (RUFCOD) program (2009-2012) focused on providing broad access to financial services that would stimulate job creation, increase incomes and stabilize communities racked by decades-long conflict. The program bridged the service gap between commercial banking and the microfinance industry by providing financial services to small and medium-scale business owners, farmers, low and medium-income households and women.

During the RUFCOD program, the IIFC network expanded from 18 to 34 points of service and formalized under the Kabul-based IIFC Group, which provides technical assistance, training, supervision and loan capital to affiliated IIFCs. Today, about 2,000 new IIFC members open accounts each month, and the IIFCs disburse a monthly average of $2.2 million in new loans.

World Council's work in Afghanistan was its first experience establishing Shariah-compliant financial institutions, products and services.

Memorial fund for slain principal set up at CU

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MIDDLEBURY, Conn. (12/26/12)--The family of slain Sandy Hook Elementary School Principal Dawn Lafferty Hochsprung has established a memorial fund in her name at a Connecticut credit union where she was a member.

Waterbury CT Teachers FCU, a $238 million asset credit union located in Middlebury, Conn., and which has a branch  in Danbury, announced the Dawn Lafferty Hochsprung Memorial Fund in her memory.

Hochsprung was among those killed Dec. 14 at the elementary school in Newtown Conn., while trying to protect  students from harm, said the credit union's website.

She "was a dedicated teacher who inspired her students to reach their fullest potential," said a message on the site. "She was admired and respected by her students, colleagues and parents for her caring and nurturing nature and will be sorely missed," it said.

Illinois league concludes another year of giving

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NAPERVILLE, Ill. (12/26/12)--Giving isn't just a holiday-time event for many credit unions and their leagues. A case in point: Staff from the Illinois Credit Union League (ICUL) concluded another year of giving to charities and giftwrapping its community service with its last project for the year: Providing toys for the Walter and Connie Payton Foundation (WCPF).

The toy drive was one of several charitable actions that included ICUL's annual food drive, blood donation drives, monthly "jeans days" fundraising and direct financial donations to food pantries and soup kitchens throughout the state.

WCPF works with the Illinois Department of Family Services to ensure needy children receive gifts for the holidays. Each year, the foundation provides for about 14,000 children who otherwise would not receive holiday gifts, said ICUL.

Other 2012 activities included ICUL's fourth annual summer food drive, which this year benefitted the Loaves and Fishes Pantry in Naperville. The pantry serves DuPage County, and during the fiscal year, which ended in June, it provided nourishment to 112,468 individuals in 28,824 distributions. Loaves and Fishes distributes more than 60,000 pounds of groceries to about 600 families each week. At the time of the food drive, family visits were up 58% and total new families were up 71% over 2011. The pantry served a record number of people because of its collaboration with the community.

Also, the league initiates Pathways to Empowerment programs to assist people with issues that prevent them from being self-sufficient. The on-site programs are offered by partner agencies on topics such as English language proficiency, nutrition education, basic financial skills, job search support, income tax preparation and public benefits enrollment.

ICUL staff also provided 35 units of blood for Heartland Blood Centers, an independent, not-for-profit blood center serving 38 hospitals in 12 counties in northeastern Illinois, as well as northwestern Indiana. Heartland collects more than 172,000 units of blood each year.

What began as participating in Children's Memorial Hospital's "Miracle Jeans Day" in 2011 has developed into a monthly activity at the league. Staff choose an organization to support each month. As a result, nearly $3,900 was donated to local and national social service organizations this year.

Additional financial support was provided on behalf of the Illinois Credit Union System, with 14 food pantries throughout the state receiving $200 each, for a total $2,800 donation.

"This continued to be a year of great need for many people," said ICUL President/CEO Dan Plauda. "Rather than sending out holiday greetings, the Illinois Credit Union System for the fourth year in a row chose, on behalf of its member credit unions, to coordinate, organize and participate in these activities. We feel blessed to have been able to give back to our communities."

CU Strategic Planning puts hold on new clients after CDFI NOFA

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TACOMA, Wash. (12/26/12)--CU Strategic Planning, a community development financial institution (CDFI) grant writing firm, placed a temporary stay on accepting any new credit union clients after the release Friday of the U.S. Department of Treasury's CDFI Fund Notice of Funding Availability.

The Tacoma, Wash.-based firm said it has had a waiting list of credit unions for grant writing projects since August. However, it will take project requests from credit unions for the 2013-2014 grant writing round.

The firm said it helped half of all the winning credit union applications in 2012. "To continue our high level performance," CU Strategic Planning President/CEO Chuck Cockburn said, "it is imperative that we serve our existing clients to our utmost capabilities--and then open the door to new clients once the current projects are complete."

Due to the current demand of skilled CDFI grant writers, Cockburn said, choosing a grant writing team far in advance of the NOFA is vital for a winning application--ultimately ensuring the success of a credit union's community development.

"Quality CDFI grant writers are booked up to a year in advance," Cockburn explains. "The grant writing round is open right now, but all the best writers are already booked. So we encourage credit union CEOs to plan ahead, working nine months or more in advance to establish a quality application is better positioned to win for them."

CU Strategic Planning offered 10 tips for successful grants:

  1. Be compelling: Use facts and research to tell an engaging story. Having a need when no one else is fulfilling that need is compelling.
  1. Benefit consumers/members, not the credit union: Frame the story about why the program helps consumers and contributes to the credit union's sustainability so that it can continue to help consumers.
  1. Prove feasibility: Financials, research, and management experience--does it make the reader believe you will succeed?
  1. Make financial projections: Prove the program will continue beyond CDFI funding and prove the program is a good investment of taxpayer dollars. (Quantify positive impact to consumers.)
  1. Create demand: Use increasing loan demand in the category to show demand.
  1. Leverage distress: Make a claim and then support it with data.
  1. Develop partnerships: Strategic partners open up new avenues for program innovations, which allow access to new funding.
  1. Have precise editing: Good editing ensures the narrative's progressive and natural flow that does not distract the reader, allowing the scorer to focus on scoring.
  1. Grow relationships: When communicating with the CDFI, build a relationship with one or two particular staff members.
  1. Early submission: Submit the application ahead of time to ensure CDFI staff support if you have technological problems.

NJ league gives 10% rebate on dues

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HIGHSTOWN, N.J. (12/26/12)--The Board of Directors at the New Jersey Credit Union League approved a 10% league dues rebate for its member credit unions Thursday night at the regular monthly board meeting (The Daily Exchange Dec. 21).

Credit unions in the state have been hit hard during the economic recovery by the aftermath of the Oct. 29 superstorm, Hurricane Sandy.

"New Jersey credit unions are certainly recovering, but many are facing financial challenges in this difficult economic environment," said league Chairman Lou Vetere. "As a league, we are strong in many ways, including financially, and we want to assist our members any way we can. This was our small part in doing that.

The rebate applies to league dues only. Members have three options: waiving the rebate and paying full dues as normal; taking the rebate; or applying the dues rebate to either the league's Banking You Can Trust ad co-op, the New Jersey Credit Union Foundation's Reality Fairs program, or the New Jersey Coalition for Financial Education partnership.

The league said it will contact credit unions that have already paid their dues to determine which option they will choose.

Snow shuts CUNAs Madison office for a second day

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MADISON, Wis. (12/21/12)--The heavy snowstorm  that came here Wednesday night and lingered, along with blizzard conditions, have closed the Madison, Wis., office of the Credit Union National Association for a second day today, although some staff are working remotely from their homes. The Washington, D.C., office is open.

Equifax Disciplined consumers raise credit levels 30

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ATLANTA (12/21/12)--Consumer credit originated year-to-date through September increased nearly 30%--to $675 billion, according to Equifax's National Consumer Credit Trends Report.That compares with $523 billion for the same period in 2010.

Credit originations today are below the 2006-2007 pre-recession levels of about $1 trillion by about one-third, said Equifax.

Balances on credit originated the past two years represent roughly 32% of outstanding balances, but are less than 6% of total delinquent balances. This reflects better underwriting and more responsible consumer payment behavior, said the Atlanta-based credit reporting bureau.

Write-offs dropped more than 53%--to $70.9 billion year-to-date through November-- after peaking at $151.8 billion for the same period in 2009.

"Consumer spending is being supported by gradually opening credit markets, with higher new limits on accounts, a graduate upward trend in non-mortgage consumer debt outstanding, and also consistently low utilization rates," said Equifax Chief Economist Amy Crews Cutts.

"Meanwhile, consumer finance delinquency rates, not including home loans, have returned to pre-recession levels--all signs that the consumer-led recovery is gaining strength heading into 2013," she said.

Equifax noted that auto loans originated through September totaled 16.4 million, a more than 11% increase from the period a year ago and the highest in five years.  The total number of outstanding loans--58 million through November--is at its highest level in 37 months. Auto loan balances also continued rising, totaling $775.7 billion in November, a 45-month peak. Auto loan amounts originated through September totaled $318.2 billion, more than 33% more than the $210.2 billion during the same period in 2009.

Total retail credit card limits through November were at $345 billion, the most in 30 months. Originations year-to-date through September totaled $25.6 million, a four-year high. Credit limits for new card originations through September totaled $47.5 billion. That's more than 17% more than 3010's $39.4 billion.

Bank credit card limits opened year-to-date through September rose nearly 44% to $132.2 billion from $87.8 billion during the same period in 2010, said Equifax. New bank card accounts totaled 29 million, the highest for that period since 2008.Write-off rates for November rose 20% from a year earlier, said Equifax.

Catalyst readies iPad mobile banking app for holiday

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PLANO, Texas (12/21/12)--Analysts are predicting that Apple will sell 25 million to 30 million iPads and the smaller iPad minis this holiday season. Another 95 million units are projected to sell in 2013. That's good news for credit unions using Catalyst Corporate FCU's mobile banking service, because the corporate is rolling out its mobile banking app for iPad--just  in time for  Christmas.

"Mobile banking has been tremendously popular on smartphones," said Karen Coble, vice president of sales for Catalyst Corporate. "The larger screen on the iPad makes conducting financial business on a mobile device even easier."

Catalyst Corporate's mobile banking app is quick-to-market, Coble said, allowing new and existing iPad users to connect to a credit union's mobile solutions in weeks instead of months from now.

The downloadable iPad app offers all the same features as Catalyst Corporate's smartphone app, Coble said. Users can: check account balances, view transaction history, make internal transfers, pay bills, locate ATMs/branches, share social media content and--with Catalyst Corporate's Mobile Capture-- make deposits.

Catalyst Corporate's app integrates directly with a credit union's core system to provide real-time data. It is customizable, can readily incorporate unique branding, and provides capabilities for in-app marketing, messaging and member satisfaction surveys. The iPad app is supported by strong visuals, consistent with the iPad's design, and offers increased finger scrolling and drag-and-drop account panes for smooth navigation, according to Robb Gaynor, chief product officer at Malauzai Software Inc., Catalyst Corporate's mobile banking app-development partner. 

"We expect about 50% of our current production customers to opt for the iPad app," said Gaynor. "For credit unions that already have existing iPhone apps, the iPad app can be implemented in about 60 days" and requires minimal additional design and branding input.

Mobile banking enrollment will only continue to grow with the introduction of the new iPad app, Gaynor said. The app will appeal not only to consumers who access the Internet exclusively through their iPad, but also to  individuals already using the app on their iPhone and who want to add it to a second device.

Malauzai, which tracks average logins, session duration, feature utilization and enrollment levels of mobile banking users to arrive at a monthly "mobile engagement index," notes differences in usage between smartphone and tablet users.

"According to our research, iPad users are showing greater engagement than their iPhone counterparts when they access mobile banking. Their sessions are longer and they are doing more while in those sessions," Gaynor said.

Catalyst Corporate launched its mobile banking app for Apple iOS and Android smartphones in January 2012.

Banks CUs use Twitter ineffectively says report

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BOSTON (12/21/12)--One in five credit unions and banks are "Twitter quitters," just going through the motions on tweeting and not really creating a relationship with their member/customers, says a recent report that analyzes consumers and how they follow their bank or credit union on Twitter.

Boston-based Aite Group said its research indicates that many financial institutions are just going through the motions on their Twitter accounts. They tweet about things that are irrelevant to their followers, or they simply repeat what they send through their other channels of communication.

The report is based on a second quarter 2012 survey of 1,115 U.S. consumers.  It analyzes the tweeting approaches of banks with large follower bases and evaluates the demographics, behaviors and attitudes of consumers who follow their primary financial institution on Twitter.

It found that 50% of consumers surveyed use Twitter but don't follow their primary financial institution. Only 9% communicate with their credit union or bank using Twitter. Forty-one percent still don't use Twitter.

Aite said it believes that the ineffectiveness of Twitter as a bank marketing channel is caused by banks' lack of understanding regarding who follows their tweets.

"With so few customers following their primary financial institution on Twitter, banks and credit unions are deceiving themselves if they think their tweeting activity is meaningfully impacting the quality of their member/customer relationships," said Ron Shevlin, Aite senior analyst and author of the report.

"Institutions that want to reach a larger percentage of customers and have a measurable impact on their consumer relationships must focus their Twitter strategies on the management of their customers' financial lives in areas like shopping deals and personal financial information," Shevlin said, in Aite's press release.

The 9% who follow their credit union or bank on Twitter are "financial management junkies" and not the typical customers, he told American Banker. Of this group, 65% seek recommendations about which financial products are best. That compares with 15% of non-Twitter followers.  Roughly 27% want their institution's assistance with money management, while another 35% said they should consider using their bank or credit union to help them manage finances.

The report noted that banks and credit unions averaged 2,000 followers and tweeted roughly four times a day. Twenty-one percent abandoned their Twitter accounts.

It recommended tailoring content of tweets to the audience, focusing on personal financial management tips, developing a schedule for tweets, boosting the number of tweets a day, and integrating tweets with other personal finance management channels such as mobile banking.

The report, "What Bank Marketers Should DoWith Twitter," presents statistics and strategies of several large banks on their use of Twitter as a marketing tool.

NCUF distributes over 35000 Money Rules books

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MADISON, Wis. (12/21/12)--Since the National Credit Union Foundation (NCUF) announced three weeks ago that copies of the book "Money Rules: The Simple Path to Lifelong Security" are available, more than 35,000 copies have been distributed to credit union members and employees through NCUF's special initiative.

"Money Rules," by bestselling personal finance author Jean Chatzky, contains rules that if followed allow readers to enjoy a lifetime of financial security and to eliminate their stress about money.

Through NCUF's special initiative, credit union organizations can receive the book for a substantially reduced rate (via a donation to NCUF). Large quantities of the book have been requested by both credit unions and state credit union associations such as SchoolsFirst FCU in Santa Ana, Calif., and the Montana Credit Union Network.

When an organization requests 1,000 or more copies of the book, the donor organization's name will be included on a sticker on the front cover. Each book already comes with "Compliments of: NCUF" printed on the cover. All of the books from NCUF are sent to credit union organizations on a non-returnable basis, for promotional purposes only and not for resale.

An award-winning journalist and best-selling author, Jean Chatzky is the financial editor for NBC's Today, the host of Money Matters with Jean Chatzky on RLTV, and director of education for SavvyMoney. She will be a keynote speaker at the Credit Union National Association's upcoming 2013 Governmental Affairs Conference.

For the full press release, which has information on how to get copies, how to preview the book, and information about Chatzky, use the link.

Maine CUs partner with World Acadian Congress on license plates

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MADAWSKA, Maine (12/21/12)--
Click to view larger image The 2014 World Acadian Congress Commemorative (WAC2014) License Plate, to be distributed by Maine's credit unions, was unveiled Wednesday. Officials at the unveiling include, from left: Emlien Nadeau, WAC2014 president; Jason Parent, WAC2014 Maine international president; David Rossignol, Maine Credit Union League board chairman; John Martin, former state representative and bill sponsor; State Rep. Ken Theriault, bill co-sponsor; and Sen. Troy Jackson, bill co-sponsor. (Photo provided by the Maine Credit Union League)
Officials from Maine credit unions, the state of Maine, and the World Acadian Congress 2014 Wednesday unveiled the design of a new commemorative license plate to mark the 2014 World Acadian Congress/Congres Mondial Acadien (CMA). Maine credit unions are the official distribution source for the plates.

The event took place at NorState FCU in Madawaska. The plates will benefit the congress, which is jointly held in Aroostock County, part of New Brunswick and part of Quebec, and the Maine Credit Unions' Campaign for Ending Hunger.

This is the first time since the U.S. celebrated its Bicentennial in 1976 that the state has issued a commemorative license plate to mark a significant event, said the Maine Credit Union League.

"The fact this is the first such license plate that our state issues in nearly four decades speaks volumes about our recognition as the outstanding contributions of the Acadian people here in the St. John Valley and of Franco-Americans throughout our great state," said Maine Secretary of State Charlie Summers.

The congress, held every five years, draws more than 50,000 visitors from 44 countries and has an economic impact that exceeds $50 million, said the league.

Maine efforts to prepare for the event were boosted at the license plate unveiling ceremony. David Rossignol, board chair of the league and president/CEO of Norstate FCU, announced the plates would go on sale beginning yesterday at all participating Maine credit unions.

Rossignol also announced that the first partnership of its kind between Maine credit unions and an event with statewide impact would also help residents in need.  For every plate sold at any participating credit union, $1 of the proceeds will support the credit unions' ending-hunger campaign.

"Many Maine credit unions had their beginnings in communities across Maine that have a strong connection to the French Acadian and Franco-American heritage and culture," said John Murphy, league president, calling it a "natural partnership."

The plate is different from other commemorative plates; it does not have any numbers or letters on its face and cannot replace legal license plates. The plate was initiated by State Rep. John Martin of Eagle Lake, the lead sponsor of the bill, which was co-sponsored by then-Senate President Kevin Raye of Washington County; Sen. Troy Jackson, Aroostook County; Rep. Bernard Ayotte, Caswell; and Rep. Ken Theriault, Madawaska.

State legislation allows the plate to be placed over the existing legal plate on the front of a vehicle. The commemorative plate expires in December 2015.

CU System briefs (12/20/2012)

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  • ONTARIO, Calif. (12/21/12)--The Richard Myles Johnson Foundation (RMJ), the state foundation for credit unions in California and Nevada, announced the names of its new board members starting with Jim Updike, president/CEO Honda FCU in Torrance, Calif., as its new board chairman. Shelly Berryman, vice president of membership development and advocacy at SchoolsFirst FCU in Santa Ana, and Todd Lane, chief financial officer at California Coast CU Union in San Diego, were named vice chairman and secretary/treasurer, respectively. The Richard Myles Johnson Foundation was established in 1958 as the California Filene Foundation and it supports the financial education efforts of credit unions in California and Nevada, with a special focus on youth financial education. Also new to the RMJ board are Patsy Van Ouwerkerk, president/CEO of Travis CU in Vacaville, Calif., and Jon Hernandez, president/CEO of CalCom FCU, of Torrance, Mattel FCU, of El Segundo, and City of Downey FCU. Immediate past-Chairman Carl Stewart, president/CEO of Water and Power Community CU in Los Angeles, served on the board for 10 years and as chairman since 2008 before reaching term limits this year. Also exiting because of term limits after serving for 10 years is Mike Gomez, president/CEO of Fiscal CU of Glendale …
  • BISMARCK, N.D. (12/21/12)--After pleading guilty in federal court to embezzlement and misapplication from a credit union, long-time credit union employee Georgia Schwartz of Glen Ullin, N.D., was ordered to pay back more than $130,000 to Western Cooperative CU, formerly known as Glen Ullin CU (Associated Press Dec. 19). Prosecutors claimed that the theft occurred over 22 years and was concealed by Schwartz, who allegedly maintained two sets of records. In addition to restitution, the federal judge ordered Schwartz, 59, to serve three years of supervised release, with one day in custody credited toward the total. The former credit union employee also was ordered to forfeit two homes she owned …

CUs continue to assist Hurricane Sandy victims

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MADISON, Wis. (12/21/12)--As the year-end approaches, credit unions continue to offer assistance to those affected by Hurricane Sandy.

Since Hurricane Sandy hit East Coast Oct. 29, Polish & Slavic FCU (PSFCU), Brooklyn, N.Y., has turned much of its efforts toward assisting those hardest hit, while also scrambling to repair its first branch on Staten Island, which was scheduled to open a week after the storm. Tens of thousands of PSFCU's members reside and work in or near the most heavily damaged areas affected by Hurricane Sandy,

Most of PSFCU's New York area branches were out of service for as long as five days as a result of power outages following the hurricane. The grand opening celebration of the credit union's new Staten Island branch was scheduled for Nov. 5, but was postponed due to damages from the hurricane. The credit union was able to repair the facility quickly, and it officially opened Dec. 15.

Immediately after the hurricane hit, PSFCU began collecting and dispensing necessary clothing and other items for hurricane victims.

The credit union distributed batteries, warm clothing, blankets and other necessities to the victims of Hurricane Sandy through local church parishes and community organizations. The PSFCU website also provided information in both English and Polish on how to file the proper applications for Federal Emergency Management Agency (FEMA) assistance.

During the power outages that paralyzed many communities in the wake of Hurricane Sandy, PSFCU set up charging stations at all open branches, and created a dedicated room inside its Clifton (N.J.) branch for children who were without power to do their homework. The credit union's mobile branch also moved from location to location where branches were inoperable so members could access their accounts.

"The destruction wrought by this storm was incomprehensible to all who witnessed it; and so many of our members were hit hardest," said Marzena Wierzbowska , PSFCU board chair. "But this is what a community-based credit union does: it reaches deep into the neighborhoods and families in which it serves, and does everything in its power to lift those who need help the most.  We're proud of what we're able to do for our members, but there's still much work to be done."

Bethpage (N.Y.) FCU helped raised $104,000 to date for the United Way of Long Island through the Bethpage Disaster Relief Fund, formed in November to aid victims of Hurricane Sandy.

The money raised includes Bethpage FCU member donations and donations from local businesses, which were matched by the credit union.

Bethpage FCU also made a $25,000 donation to the American Red Cross and made available special emergency loans and lines of credit to help new and existing Bethpage members rebuild and repair. Loans available include storm emergency home equity loans, cash advance loans, auto loans and special home equity loans for properties in a current federally declared disaster area.

Also, FEMA has extended for an extra month the deadline to register for Sandy-related disaster assistance, according to the New Jersey Credit Union League (The Daily Exchange Dec. 19). The traditional, 60-day window was extended due to the extent of damage, the agency said. Survivors have until Jan. 30 to register for assistance.

FEMA disaster assistance can cover rental assistance, essential home repairs, property loss and other serious needs not covered by insurance, the agency noted.

CUNA closed Monday and Tuesday no INews NowI

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CUNA closed Monday and Tuesday, no News Now

WASHINGTON and MADISON, Wis. (12/21/12)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association will be closed Monday and Tuesday in observance of the holidays.

News Now will not publish regular editions on those dates, but will resume regular publication on Wednesday.

CUNA's Madison office, like many credit unions in the Midwest, will be closed today. It also closed Thursday because of  heavy snow and blizzard conditions, but some staff worked remotely from home. The area got about 18 inches of snow Thursday. CUNA Mutual Group and the Wisconsin Credit Union House also closed.

Philanthropy award honors SECUs 5 million gift

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RALEIGH, N.C. (12/20/12)--Raleigh, N.C.-based State Employees' CU (SECU) has been honored with the 2012 Outstanding Business in Philanthropy award for the SECU Foundation's $5 million gift for the SECU Cancer Center at Mission Hospital in Asheville, N.C.

The award is sponsored by the Western North Carolina (WNC) Chapter of the Association of Fundraising Professionals (AFP) and was presented at WNC-AFP's annual National Philanthropy Day Celebration in Asheville.

SECU Foundation's contribution in 2010 helped spur Mission Healthcare Foundation's successful fundraising campaign for the Cancer Center, which opened to the Western North Carolina region in November 2011. Mary Ann Rice, SECU senior vice president of the Asheville-Biltmore Village branch, accepted the award on behalf of SECU's members.

The foundation has awarded more than $65 million in grants throughout the state since it began operating in 2004. Its grants go to high impact projects in housing, education, healthcare and human services.

During the past five years SECU Foundation has granted more than $6.5 million to organizations for projects such as the Jackson County Public Library Complex in Jackson County, Caldwell Hospice and Palliative Care in Caldwell County, Yancey County Library SECU Information Gateway in Yancey County, and Hospice and Palliative Care of Iredell County.

Geauga CU warns members of counterfeit checks

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BURTON, Ohio (12/20/12)--A small credit union in Ohio has alerted its members that it is the target of a teller check scam involving more than $10,000 in counterfeit checks.

Geauga CU, a $34 million asset credit union in Burton, Ohio, told the Ohio Credit Union League that it has notified its members of the check scam.

One check, totaling $3,800 and appearing to be from the credit union, includes fraudulently obtained account numbers and was processed in New Jersey, the league said.

The check appeared to come from a company called Southeastern Canopy in Shelby, Ala. The fraudsters who created the counterfeit checks obtained a copy of the credit union CEO's signature and they included it on the checks.

The credit union's website instructed members to contact 800-333-5971 to confirm the validity of any checks in question.

Snow shuts down CUNAs Madison office today

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MADISON, Wis. (12/20/12)--A heavy snowstorm last night and blizzard conditions have closed the Madison, Wis., office of the Credit Union National Association today, although some staff are working remotely from their homes. The Washington, D.C., office is open.

The closing does not affect News Now's operations. There will be a Friday edition of CUNA's daily.

On Wednesday, credit unions in the Midwest were announcing closures for today.

For example, Madison-based Summit CU, the second largest credit union in Wisconsin, said all its 23 branches will be closed today (Journal Sentinel Dec. 19). It recommended that members go online to have access to their accounts, pay bills, make loan payments or transfer money. ATMs will also be functioning, said the credit union.

CUNA Mutual issues Risk Alert on cyberheists

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MADISON, Wis. (12/20/12)--CUNA Mutual Group has issued a Risk Alert for its bond policyholders regarding the planned massive cyberheists said to be targeting 30 U.S. financial institutions in the Spring of 2013.

CUNA Mutual issued the alert Tuesday, noting that security firm RSA had issued a warning in October about a planned attack by a group in Russia that claimed it piloted an earlier program that infected at least 300 to 500 computers in the U.S.

Another security firm, McAfee, last week issued a report that supported RSA's findings. It indicated that "Project Blitzkrieg" is being planned for the spring, instead of the fall. See News Now's related story, "McAfee: Prepare for 'Blitzkrieg' mass fraud campaign," by using the link.

The group is targeting accounts at banks that have deployed weak authentication methods. CUNA Mutual offered risk mitigation tips to its bond policyholders and suggested they consider additional layered security controls.

Pennsylvania CU Foundation 2013 budget set

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HARRISBURG, Pa. (12/20/12)--The Pennsylvania Credit Union Foundation Board of Directors has approved a 2013 budget, with projected revenues of $252,600--including $15,000 for Reality Fairs.

The budget also contains expenditures of $242,600, including $155,000 in grants, $15,000 for Reality Fair materials, and $81,600 in regular operating expenses (Life is a Highway Dec. 19).

The board also set a fundraising goal of $248,000--or an anticipated 7.3% increase--over 2012 projections.

Other board actions included:

  • A moment of silence honoring Bob McCormack, the first foundation chairman, who died Dec. 9;
  • Approval of a $1,000 disaster relief grant to the Connecticut Charitable Foundation for victims of the Newtown, Conn., community tragedy;
  • Approval of 11 regular grants in financial literacy and credit union development totaling $54,210; and
  • Recognition of 1,387 students who participated at seven Reality Fairs during 2012.
The next foundation board meeting will be in April.

CUs make sure troops have a happy holiday

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MADISON, Wis. (12/20/12)--Credit unions nationwide are undertaking efforts to make sure that U.S. troops deployed in foreign countries will have a happy holiday season.

Some of the efforts include:

  • More than 100 State Employees' CU (SECU) "elves" from throughout North Carolina traveled Dec. 1 to a credit
    Click to view larger image Employees and volunteers at State Employees' CU in Raleigh, N.C., assembled 5,000 holiday gift boxes for North Carolina soldiers deployed overseas. (Photo provided by State Employees' CU)
    union operations center in Raleigh to help support its third annual SECU Supports the Troops holiday campaign packing day event. As the morning unfolded, the elves--SECU staff and volunteers--assembled, labeled and taped 5,000 holiday gift boxes filled with wish-list items for North Carolina National Guardsmen and other North Carolina-based deployed soldiers. Thirty-four pallets with more than 400 cases of "gifts from home" were then loaded into two SECU sleighs--two U.S. Postal Service 18-wheelers--for delivery to military bases worldwide. With collection efforts beginning in mid-September, SECU's 245 branches statewide decorated their foyers with art displays and accepted wish-list donations from members and local community groups through Oct. 31. Included in the holiday boxes were travel-sized dental supplies, soap, shampoo, first aid items, games, socks and snacks.  Heartwarming letters from North Carolina school children, expressing thanks for the soldiers' service were added as the final touch.  Monetary contributions from members were used to help with shipping costs.
  • These marines stationed in Afghanistan appreciated holiday packages sent to them by INOVA FCU in Elkhart, Ind. (Photo provided by INOVA FCU).

    INOVA FCU in Elkhart, Ind., shipped 10 large boxes to a group of Marines stationed in Afghanistan. When the packages arrived, the members of Engr Co B 6th ESB 4th MLG said it was like Christmas. They found items from snacks, to toothbrushes, to an Xbox 360 inside. INOVA wanted to make being away from home a little easier for the soldiers, who will be overseas this Christmas. INOVA employees donated items such as candy, oatmeal, soap, hand warmers, video games, eye drops, manicure kits and notebooks. INOVA members made donations at the teller line that were used to buy additional supplies such as batteries, sheets and games. The project was especially meaningful to INOVA Cash Service Representative Anna Smith, who is engaged to one of the soldiers. "It brought tears to my eyes to see how much we collected," she said. Smith was in contact with her fiancé, Cpl. Brandon Evans, after the packages arrived. "They said it was like Christmas for them, and since they won't get a normal Christmas this year, it was the next best thing."
  • Some 50 military families and friends at two California credit unions recently had the opportunity to connect with loved ones for the holiday season because of Operation Best Wishes, a program sponsored by the Defense Credit Union Council, with assistance from the California and Nevada Credit Union Leagues' newly launched
    Click to view larger image Operation Best Wishes, a program sponsored by the Defense Credit Union Council, with assistance from the California and Nevada Credit Union Leagues' newly launched C-Sun Studios, set up a mobile video-recording studio at predominantly military-affiliated credit unions. Pictured is a family preparing to send a video greeting. (Photo provided by the California and Nevada Credit Union Leagues)
    C-Sun Studios. This year, the tour of the Operation Best Wishes--a national program offered as a free service by America's credit unions--covered eight states. The California leg of the tour included stops at Grossmont Schools FCU in El Cajon and Travis Air Force Base (AFB) in Vacaville. Travis CU in Vacaville, hosted the Travis AFB event. Operation Best Wishes sets up a mobile video-recording studio--this year provided by C-Sun Studios--at predominantly military-affiliated credit unions. The military and their families are invited to use the studio to record and make personalized video greeting cards e-mailed to deployed loved ones or other family members who will not be with them during the holidays. It differs from Skype and other Web-based communications--in that, the video greeting cards are produced by using a green backdrop, enabling families to be superimposed over holiday animations.
  • Jami, Robert, Tyson and Cheyanne Torres of Romeo in Michigan got an early visit from Santa this year with Channel 955's Mojo in the Morning "Breaking & Entering" and Community Choice CU in Farmington Hills, Mich. Along with many hard-working families, the Torres family has been hit during difficult economic times. Jami and Robert, both veteran Marines, had difficulties bouncing back from service--along with Jami's growing health concerns. Channel 955's Mojo in the Morning brings the holidays to local families who are experiencing hardship. Every year, the show provides needy families with truckloads of food, necessities and gifts.
  • Belvoir FCU employees contributed more than $1,500 to an employee-giving fund  for the holiday season. The employees of Woodbridge, Va.-based Belvoir FCU have made supporting families in need an annual tradition through the United Service Organizations' (USO) "Adopt-A-Family" program, the Fort Belvoir Chaplin, and Operation Sugarplum, provided by Army Community Service. With the donations of credit union employees, Belvoir FCU was able to adopt 10 children from the USO Metropolitan Washington and one military family of four. Those adopted by Belvoir were given gifts to help make their holidays brighter. Belvoir also donated $300 to the Operation Sugarplum program, which provided eligible families assigned to Fort Belvoir gifts and/or food cards during the holidays.
  • Since 1999, First Liberty FCU in Great Falls, Mont., has spearheaded Operation Happy Holidays in which Montana service members deployed overseas receive packages of holiday treats from home (Great Falls Tribune Nov. 26). Operation Happy Holidays will ship packages to roughly 550 troops this year. Also, students at local elementary schools make holiday cards to send to the troops. When servicemen and women return from deployment, they provide volunteers at Operation Happy Holiday with feedback about packages, and some help load boxes to send to others, the newspaper said.

Noreen posthumously awarded Minn CU Builder award

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ST. PAUL, Minn. (12/20/12)--Walter Noreen, former volunteer at Postal CU, Woodbury, Minn., was posthumously honored with the Minnesota Credit Union Foundation's (MnCUF's) Credit Union Builder Award this month.

This distinction recognizes those who have dedicated time and energy to building the credit union movement. Nominations are made by credit unions and other organizations in honor of or in memory individuals who has been instrumental in their success.

An assistant postmaster, Noreen was first elected to the board of directors of St. Paul Postal Employees CU, now Postal CU, in 1967. Among his many affiliations, Noreen served as District Governor of Lions International, and was an active member of the St. Paul Park/Newport Lions Club. He helped found the St. Croix Lions and helped create Camp New Hope. After more than two decades of volunteer service, he retired from the board in 1990. 

Noreen joins 13 other individuals honored in the past five years with the MnCUF's CU Builder Award. The names of the recipient and the contributing credit union are permanently displayed in the Minnesota Credit Union Network's lobby.

"Through the generous donation of their time, energy and resources, these individuals have exemplified the true meaning of the credit union philosophy," said MnCUF Chair Pat Brekken.

Nutmeg State FCU launches Conn branch on wheels

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ROCKY HILL, Conn. (12/20/12)--Nutmeg State FCU, Rocky Hill, Conn., has rolled out Connecticut's first mobile branch.

Click to view larger image Nutmeg State FCU can bring the branch to its members with Connecticut's first mobile branch. The credit union plans to employ the full-service branch on wheels daily, serving members by making stops at their workplaces and schools. (Photo provided by Nutmeg State FCU)
The credit union plans to employ the full-service branch on wheels daily, serving by making stops at their workplaces and schools.

"This is yet another way we're trying to create superior service to our members," said Nutmeg State FCU President/CEO John Holt. "This new mobile branch will offer the ultimate conveniences as it's equipped to administer all services, just like a branch. It even has an ATM on board."

Nutmeg's new mobile branch debuted Dec. 6 at Illing Middle School in Manchester, Conn.  The school is a participant in Nutmeg's School Banking Program, aimed at teaching students financial literacy at a young age. While on the bus, the kids learned the basics of banking, the difference between a bank and a credit union, the importance of budgeting, the various types of accounts, how interest grows and how to manage a loan.

The mobile branch made its second stop on Dec. 8 at the Newington Price Chopper, where it collected nonperishable food items to be donated to local food banks this holiday season.

Besides community venues, the mobile branch will serve in disaster-relief situations.  Nutmeg's mobile branch would be deployed to impacted communities to assist residents with their banking needs. A generator and dual backup cell towers power the branch.

The vehicle will be staffed with Nutmeg State FCU personnel. On board the bus, consumers can open accounts, apply for loans and access almost any service they would in a physical branch.

Malcolm Gladwell to keynote CUNAs ACUC

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MADISON, Wis. (12/20/12)--The Credit Union National Association (CUNA) announced Wednesday that The New Yorker staff writer and author of four New York Times bestsellers Malcolm Gladwell will be a keynoter at CUNA's 2013 America's Credit Union Conference (ACUC), June 30-July4 at the Hilton New York in New York City.

Gladwell is a British-Canadian journalist and best-selling author. He has been a staff writer at The New Yorker since 1996. Gladwell is author of The Tipping Point: How Little Things Make a Big Difference (2000), Blink: The Power of Thinking Without Thinking (2005), Outliers: The Story of Success (2008), and What the Dog Saw: And Other Adventures (2009).

Gladwell often writes about applications of research and new ideas in the social sciences, making frequent use of academic work in the areas of sociology, psychology and social psychology.

In 2005, he was announced as one of Time's 100 most influential people. He is ranked No. 10 on The Thinkers 50 2011, and in 2007 he received the American Sociological Association's first Award for Excellence in the Reporting of Social Issues.  His New Yorker archives, details on his books, and his blog are at www.gladwell.com.

For more information about speakers and sessions at America's Credit Union Conference, visit the link.

CU House calls for Hall of Leaders nominations (12/19/2012)

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WASHINGTON (12/20/12)--Credit Union House is calling for nominations for its Credit Union House Hall of Leaders. Nomination forms are due by Jan. 18.

The Hall of Leaders provides lasting recognition for credit union leaders whose commitment has made a significant impact on the credit union movement at the local, state or national level.

Those selected for the honor have shown commitment that inspires others in the credit union movement. Inductees include board chairmen, league presidents, credit union CEOs, league board members and volunteers.

Nomination forms must be submitted by the deadline for recognition at the Credit Union National Association's Governmental Affairs Conference, Feb.24-28 in Washington, D.C. They can be obtained on Credit Union House's website and sent to:

Credit Union House

403 C St. NE

Washington, D.C. 20002

All nominations must be approved by the state league where the credit union is affiliated.

Credit Union House is a townhouse in Washington, D.C., owned by every state credit union trade association and the American Association of Credit Union Leagues. It was built primarily for credit unions and credit union groups nationwide as a coordination center on Capitol Hill and is considered a symbol of the strength and permanence of the credit union movement on the national scene.

For more information, use the links.

CU System briefs (12/19/2012)

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  • SAN DIEGO (12/20/12)--The 2012 San Diego County Credit Union Poinsettia Bowl kicks off today at 5 p.m. PT at Qualcomm Stadium in San Diego. The BYU Cougars and San Diego Aztecs will vie for the Poinsettia Bowl title in the eighth annual bowl. The game will be aired on ESPN, according to the bowl's website. Celebrations officially kicked off Tuesday evening in downtown San Diego's historic Gaslamp Quarter with the Five Star Tours Poinsettia Bowl Gaslamp March, featuring marching bands and spirit squads from BYU and San Diego State University …
  • SAINT JOSEPH, Mich. (12/20/12)--A sheriff's department motorcycle team, which was on the verge of elimination because of budget constraints, now has a chance, thanks to Saint Joseph, Mich.-based Honor CU, according to the Michigan Credit Union League (Michigan Monitor Dec. 17). The $430 million asset credit union announced its support of the Berrien County Sheriff's Department Motorcycle Team, which provides safety patrols and are a part of many community events, said Honor CU CEO Scott McFarland. The credit union made a donation in efforts to keep the program up and running for one year. Pictured are, from left, deputies Donald Lighthart Jr. and Charles Heit, McFarland, and deputy Jamie Laughlin (Photo provided by the Michigan Credit Union League) …

Invest in America celebrates 500000th vehicle sold

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AUBURN HILLS, Mich. (12/20/12)--The Michigan-based Invest in America credit union member rewards program celebrated a milestone Wednesday: the sale of the 500,000th vehicle sold through the four-year-old program.

The nationwide program provides savings on products and services to credit union members from business partners.

Click to view larger image Celebrating the sale of the 500,000th vehicle sold under the Invest in America rewards program are, from left: Jeff Edwards, General Motors director of retail planning and incentives; Teri Vollmar, Genisys CU member who bought the milestone vehicle; Jackie Buchanan, Genisys CU president/CEO; and David Adams, CEO of Michigan Credit Union League and Affiliates. (Photo provided by the Michigan Credit Union League)
A member of Auburn Hills, Mich.-based, $1.5 billion asset Genisys CU stepped behind the wheel of the milestone vehicle purchased through the program at a special commemorative ceremony attended by Michigan Credit Union League & Affiliates CEO David Adams, Genisys CU President/CEO Jackie Buchanan, General Motors Co. Director of Retail Planning and Incentives Jeff Edwards.

"Today's milestone is a celebration of the strong partnership between the credit union industry and companies like General Motors," said Adams. "Invest in America reflects what it truly means to support American products, American workers and the American economy. As our nation emerges from tough times, credit unions continue to do everything they can to support the American Economy."

He applauded members for buying American and General Motors "for its willingness to be part of this innovative program. This 500,000th vehicle is proof positive of the combined strength of the credit union and the domestic auto industries."

The program, launched in 2008, is administered by league affiliate CU Solutions Group. Under the program, credit unions nationwide receive savings on products and services offered by partnering U.S. companies, including General Motors. Nearly 3,500 credit unions across the country, representing more than 80% of credit union members, support Invest in America.

"Through this program, we have yet another opportunity to highlight the credit union difference and offer our members superior service and great value," said Genisys' Buchanan.

GM's Edwards noted that "We are grateful to credit unions across Michigan and nationally for encouraging their members to support American companies like GM while promoting value and quality."

The program was the recipient of the 2012 Herb Wegner Memorial Award for Outstanding Program, the highest honor in the credit union industry.  For more information, use the link.

CU System briefs (12/18/2012)

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  • ST. LOUIS (12/19/12)--A former employee of St. Louis (Mo.) Community CU has pleaded guilty to embezzling nearly $105,000 from her employer. Jamie Askew, 36, of Troy, Ill., pleaded guilty in a federal court in St. Louis to one count of embezzlement. The theft occurred between mid-2009 and this past May. Askew was indicted in August and sentencing is set for March 20. She faces up to 30 years in prison (Associated Press Newswires Dec. 18) …
  • OROVILLE, Calif. (12/19/12)--An off duty police officer conducting a transaction thwarted a robbery at Sierra Central CU in Yuba City, Calif., at about 10:30 a.m. Monday. The officer, David Bryning took the robbery suspect to the floor and with the assistance of another member, held him until more police arrived. The suspect, Alexander Scott Sears, 48, allegedly walked into the credit union wearing a hooded sweatshirt, sunglasses and stocking hat and refused to remove them when asked. The suspect allegedly placed a bag on the counter and announced the robbery, and told the teller to fill the bag with money. He did not display a weapon.  Bryning overheard and grabbed the man. Sears is charged with attempted bank robbery (Oroville Mercury Register Dec. 18) …
  • LANSING, Mich. (12/19/12)--Leaders from several mid-Michigan credit unions recently participated in an evening reception at the University Club on the Michigan State University campus in East Lansing for current state Senate Finance Committee Chairman Jack Brandenburg (R-Harrison Twp.) Brandenburg, pictured second from right, is shown with representatives from Lake Trust CU, Lake Michigan CU and the Michigan Credit Union League's government affairs team, who participated in the event. Brandenburg continues to be an important supporter of Michigan's credit unions, said the league (Michigan Monitor Dec. 17). Support for the event was provided byu the Michigan Credit Union League Action Fund, the league's state political action committee.  (Photo provided by the Michigan Credit Union League) …
  • ST. PAUL, Minn. (12/19/12)--Minnesota credit union representatives received an insider's look at the upcoming legislative session at a meeting with state House Commerce leader Rep. Joe Atkins (DFL-Inver Grove Heights) Monday. As incoming chair of the House Commerce and Consumer Protection Policy and Finance Committee, Atkins works closely with credit unions on legislation impacting them and their members. During his 10 years in office, Atkins has been a strong credit union supporter and worked with them on financial issues, said the Minnesota Credit Union Network. At the meeting, he discussed the state of the economy and the recovery of the state's credit unions. Attendees emphasized that credit unions are slowly rebuilding after the recession and asked him to continue to help strengthen the economy and create jobs. For the next legislative session, Atkins stressed the importance of educating elected officials about credit unions. With 40% of incoming lawmakers being new in 2013, teaching elected officials about the credit union difference will be more important than ever, Atkins said. He encouraged credit unions to keep an open line of communication with him on any issues the state Legislature should consider. Pictured are, from left, Atkins, MnCUN Board Chair Pat Pierce and MnCUN Vice President-Governmental Affairs Mara Humphrey. (Photo provided by the Minnesota Credit Union Network) …
  • GRAND RAPIDS, Mich. (12/19/12)--Mark Richter, president/CEO of Grandville, Mich.-based First United FCU has been appointed to the board of directors of Xtend Inc., a Grand Rapids-based multi-owned cooperative credit union service organization. Richter fills a vacancy on the nine-member board. CUSO Board Chairman Steve Searfoss said that leaders from more than 10% of Xtend's owners expressed interest in the board seat. Xtend President Scott Collins noted that Richter has been an "adamant supporter of both Xtend and our partners over at CU*Answers for many years."…

FBI launches website to track robberies suspects

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WASHINGTON (12/19/12)--The Federal Bureau of Investigation (FBI) has established a new Wanted Bank Robbers website to house videos and surveillance photos of robberies in progress and to provide a map of robbery locations in an effort to solicit the public's help nationwide in nabbing the criminals.

Last year, robbers walked away with more than $38 million in cash from banks, credit unions, thrifts and armored trucks, said the FBI in a blog.  The money was recovered in one out of five cases. In the unsolved cases, surveillance images of suspects were often posted online on

FBI wanted posters and elsewhere to enlist the public's help.

The new site, bankrobbers.fbi.gov, features a gallery of unknown suspects and a map function that plots robbery locations. Users can search by name, location or other factors. Search results deliver a "Wanted by the FBI" poster that contains more images, a suspect's full description, and a brief narrative about the crime.

"This website is an operational tool that will help law enforcement identify and prosecute bank robbers more quickly, with the public's help," said Jason DiJoseph, who runs the bank robbery program at the FBI's Washington, D.C., headquarters.

"The idea is to make it easier for the public to recognize and turn in potential suspects and to draw connections between robberies in different cities and states," he added.

The FBI has had a prominent role in bank robbery investigations since the 1930s, when John Dillinger and his gang were robbing banks. In 1934 it became a federal crime to rob any national bank or state member bank of the Federal Reserve System. The law soon expanded to similar crimes. Today, the FBI's focus is mostly on violent or serial cases.

"Bank robbery sounds like an old-fashioned crime, but it is a dangerous and often violent criminal act that still results in the loss of lives and takes a significant toll on local communities," said DiJoseph.

Bank crime statistics support the emphasis on the more violent cases. While demand notes are bank and credit union robbers' most frequently used tools (2,958 times in 2011), they are followed by firearms (1,242 times) and the threat of weapons (2,331 times) or explosive devices (154 times).

Even in cases where weapons are not used, the risk of violence increases each time a serial robber holds up another financial institution.

Of the 5,086 financial institution robberies, burglaries and larcenies last year, 201 included acts of violence and 70 involved the discharge of firearms. Thirteen people--the robber in 10 of the cases--were killed during robberies.

The new website will include the most pressing robberies from the FBI's 56 field offices. New features and more suspects will be added in the next few weeks and months.

Mazuma CU Interview Fair attracts 125 candidates

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KANSAS CITY, Mo. (12/19/12)--Mazuma CU in Kansas City, Mo., experienced success Friday in its search for new job candidates through an Interview Fair at the credit union's main office. The fair attracted more than 125 candidates for interviews during the five-hour event, the $475 million asset credit union said.

Using a coordinated social media push that included Facebook, LinkedIn, Twitter and Mazuma's website, along with printed flyers and posters, Mazuma invited interested candidates to its fair and encouraged them to "Make Friday Count," by dressing to impress for on-the-spot interviews and spending an hour to start a career.

Mazuma intends to quickly fill nine full-time and part-time open positions--ranging from member relationship guides (tellers) and member care advisers to loan officers and financial analysts. Among the 12 Mazuma leaders who conducted group interviews, five were hiring managers. 

"Make Friday Count" handouts and posters were used through nine branch locations and disseminated at local area colleges and universities. Also, Mazuma used its website with a special "Make Friday Count" online banner that redirected online visitors and members to a special careers landing page. 

"One of our objectives with the Interview Fair was not only to meet potential team members, but also to give those candidates a clear picture of who we are at Mazuma," explained Matt Monge, Mazuma chief culture officer and a recently selected member of the Filene Research Institute's i3 innovation group.

"Too many job fairs turn into a one-way sales pitch," he added. "We look at them differently. It's just as important for candidates to figure out if Mazuma is a good fit for them as it is for Mazuma to get a feel for whether they'd be a great fit for us. If either one of those is off, it's a recipe for a less than ideal work experience for all involved."

Interview questions focused on eliciting responses that match with Mazuma's new cultural core values, including a positive attitude; a fun atmosphere in the workplace; teamwork, creativity and innovation; and ongoing learning and professional development. The culture-driven interview questions such as "Give us an example of a time you've helped a co-worker get better at something" also elicited responses that gave Mazuma leaders insight into a candidate's past work experience.

Mid Cities CUs MBL aids local business owner

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COMPTON, Calif. (12/19/12)--Mid Cities CU in Compton, Calif., provided truck driver Julio Contreras with a State Treasury California Capital Access Program (CalCAP) Air resources Board (ARB) loan.

Julio Contreras, a truck driver and member of Compton, Calif.-based Mid Cities CU, poses in front of his new truck that he was able to purchase with a member business loan provided by the credit union.  (Photo provided by Mid Cities CU).   

The loan from the $24.5 million asset credit union helped Contreras purchase a new truck to become compliant with transporting in and out of the Port of Los Angeles.

The State Treasury CalCAP program is a loan guarantee program that ensures loans are made to small businesses to assist them in growing their business. Loans can be used to finance the acquisition of land, construction or renovation of buildings, or the purchase of equipment, other capital projects and working capital.

The ARB's Heavy-Duty Vehicle Air Quality Loan Program provides financial assistance to truckers affected by the Statewide In-Use Bus and Truck Rule and the Heavy-Duty Vehicle Greenhouse Gas Emission Reduction Measure, said the credit union.

"I would have lost a lot of business, not being able to transport in and out of the port of Los Angeles, without the assistance from Mid Cities CU and the ARB," said Contreras. "Mid Cities made the application process easier for me by walking me through each step and acting as a liaison with the ARB, making sure my documents were in order, on my behalf."

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' member business lending (MBL) cap to 27.5% of assets from 12.25% so that more loans could be made to small businesses. CUNA and credit unions say that increasing credit unions' MBL cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

Holiday gift card sales up 119 says TMG

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DES MOINES, Iowa (12/19/12)--Holiday gift card sales have increased and are expected to continue rising in the week leading up to Christmas, according to The Members Group (TMG).

To date, TMG's financial institution (FI) clients have sold 119% more ATIRAgift cards this year, as compared with sales om 2011. TMG clients are averaging a 31%  increase of ATIRAgift cards sold per financial institution location over 2011.

"The growth trends we're seeing are in alignment with predictions of increases in prepaid this holiday season," said Konrad Christensen, TMG retail payments product manager.

One such prediction came from the National Retail Federation. In its 2012 holiday consumer spending survey, nearly 60% of respondents planned to buy gift cards this holiday season.

The increase in prepaid sales may be tied to consumers' increase in online shopping, according to Christensen.

"The Consumer Debit Payment Choice Research Study issued in October found gift cards actually top debit and credit cards as consumers' preferred way to shop and pay online," said Christensen.

About 71% of consumers surveyed indicated they feel secure using gift or prepaid reload cards to make online purchases, said the study.

Total card loads in 2012 are up more than $70,000 compared with 2012, according to preliminary results.

CUs do it right again in satisfaction survey

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BOSTON (12/19/12)--U.S. credit unions continue to achieve much higher satisfaction and advocacy rates compared to large regional and national banks, according to results announced Tuesday of the 2012 ath Power Ideal Banking Study, which assesses the retail member/customer experience at credit unions and banks nationwide.

ath Power Consulting, a Boston-based financial services research and strategy firm, is a provider of member/customer experience solutions for the financial services industry.

Findings from the annual study indicate that 41% of members/customers surveyed are satisfied overall with their primary banking institution, a rise from last year's 37%. For the third consecutive year, USAA ranked highest in overall satisfaction.

The study revealed higher satisfaction levels in areas related to bank behavior and general quality of customer service. Although the biggest U.S. banks still trail smaller banks and credit unions in the customer service category, they increased in satisfaction in 2012. Among the top-four U.S. banks, Chase made the most significant year-over-year climb, with a 14-point increase.

"Over the past few years, financial institutions have been driven to become more customer-centric in an effort to retain current customers and attract new prospects--a response to a tougher regulatory environment and added competition from non-traditional sources," said Frank Aloi, ath Power CEO. "Our research indicates that these initiatives are beginning to pay off. Even so, there are still numerous areas that show need for improvement, including proactive communication with customers and problem resolution."

While customer experience factors differentiate highly satisfied and loyal customers, convenience factors are often the initial reason for choosing a financial institution, according to ath Power's ongoing research. Despite recent shifts by many banks to eliminate it, free checking--along with online banking and direct deposit--are universally desired as primary banking needs.

Similarly, mobile banking is rapidly moving toward essential product status with current adoption at 36%, up from 21% in 2011.

The study also examines the consumer likelihood to switch banks. In the past year, 10% of customers changed their primary banking institution. Top reasons for switching include new/raised fees, dissatisfaction with customer service, home relocation and account errors.

Customers of top-20 banks are three times more likely to switch to another financial institution than credit union members are. The greatest factors customers say provoke them to switch are loyalty/rewards programs, reduced fees on checking accounts and special offers to join, the study said.

Credit unions also scored high in other national and local surveys on trust, loyalty and member satisfaction studies this year. They include:

  • Credit unions in the U.S.topped banks in member/customer satisfaction levels,in a recent nationwide survey released Dec. 11 by the American Customer Satisfaction Index (ACSI) (News Now Dec. 12). Credit unions remain best-in-class for financial services and set the bar for customer satisfaction among all service industries covered by the ACSI. Although member satisfaction dipped 5.7% to 82, the survey said, that score is still higher than the banks' average of 79.
  • Trust in credit unions has remained high at 61% among Americans, according to the latest Chicago Booth/Kellogg School Financial Trust Index (News Now Nov. 6). The index also found that 23% of Americans say they trust the U.S. financial system. That is an increase of two percentage points since the last issue of the index in June and reflects a rebound of trust in the banking sector. The index has consistently reported notably more trust in credit unions than local and national banks, quarter over quarter, since it began in December 2008.
  • Credit unions were rated No. 1 in a survey of 5,000 consumers asked to rate the reputation of 34 business sectors in a study conducted by Denver-based Prime Performance (News Now May 14). Credit unions topped all business sectors in reputation with an average reputation score of 5.78 on a seven-point scale with seven as "very good."  They were followed by grocery stores (5.50), and community banks (5.40). Regional banks came in seventh at 5.04 and national banks 18th at 4.15.
  • Credit unions topped the list of U.S. financial institutions in member/customer satisfaction, according to the 2011 Customer Experience with Call Center Representatives Survey by Prime Performance (News Now March 9). Members/customers said they were more satisfied last year in their interactions with credit union and bank call center representatives than in 2010. Based on a recent interaction with a call center representative, credit union members rated their overall satisfaction with a net score of 83%. The comparable score for small banks is 79%. The industry average is 70%.  Falling below that are: large banks, 66%; Chase, 62%; Wells Fargo, 61%; and Bank of America, 56%.
  • Credit unions were among the top customer satisfaction rankings in Temkin Group's release of its 2012 Temkin Customer Service Ratings, which examines how U.S. consumers rate the customer service of 174 large companies across 18 industries (News Now June 28).
  • A National Cooperative Business Association (NCBA)/Consumer Federation of America (CFA) survey found more Americans think credit unions and other cooperative businesses have the best interests of their members and customers in mind more than do for-profit businesses (News Now May 3). The survey also revealed a favorable view of cooperatives in regards to their business trustworthiness and quality of service. Co-ops received higher marks across the board than for-profit businesses.
  • Credit unions outshone banks in consumers' perceptions of safety and soundness, with 40% of respondents saying they believe credit unions are the safest financial institutions, compared with 34% naming banks (News Now Feb. 23). Nineteen percent of respondents said they trusted both types of institutions equally. The numbers are the results of the 2012 Credit Union National Association (CUNA) National Voter Survey.
  • A CUNA survey in February found that 43% of respondents said credit unions were the best place for consumers to keep their day-to-day savings and checking accounts (News Now Feb. 22).

CDCU first in U S to certify all staff in CDCFC program

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BATON ROUGE, La. (12/19/12)--Pelican State CU has become the nation's first financial institution to certify its entire staff in the Community Development Certified Financial Counseling (CDCFC) training program.

The CDCFC training, testing and certification helps credit unions better serve their members who are experiencing financial challenges.

The program was created by CU Strategic Planning, a community development financial institutions grant writing and marketing consulting company.

The staff of the Baton Rouge, La. credit union completed the certification Nov. 30.

CDCFC's training focuses on lending to working-class consumers who need loans to establish better financial footing, according to Chuck Cockburn, CU Strategic Planning president/CEO. It works by allowing credit unions to "invent" their own qualified borrowers by coaching members to become credit worthy.

Another program offered credit unions is the Credit Union National Association's Credit Union Financial Counseling Certification Program. The program includes two parts of four learning modules each. When participants successfully complete the proctored exams for both parts (eight total modules), they become Credit Union Certified Financial Counselors, and can assist their members in reaching their financial goals.

"Since we have 10 branches located throughout Louisiana, the fact that our entire staff could be certified online was really appealing to us," said Jeffrey Conrad, CEO of the $200 million asset credit union.

The advantage Pelican State gains from having each employee certified is that it can clearly determine which members are in need of in-depth credit counseling, Conrad said. Credit union employees can identify the patterns and warning signs of a member who is in financial trouble and refer them to one of its full-time credit counselors for further assistance, which also includes loan officers or collectors for workout loans, debt consolidation or budgeting assistance.

The credit union has also developed its own community resource database for members who need non-financial help. Pelican can refer members to the proper organizations.

"For the sake of our members, we wanted to ensure that no matter which method they use to contact us, or which employee assists them with their needs, they were receiving information and guidance from someone with a strong financial education knowledge base," explained Conrad. "We are empowering all employees to be effective ambassadors for our credit union and project the knowledge they have gained through this certification."

CUNA Mutual financial strength affirmed by A M Best

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MADISON, Wis. (12/19/12)--A.M. Best Company has affirmed the financial strength rating of CMFG Life Insurance Co. (CMFG Life) at "A" (Excellent), said CUNA Mutual Group.

The ratings agency also affirmed the "A" (Excellent) rating for CMFG Life's property/casualty subsidiaries: CUMIS Insurance Society Inc., CUMIS Specialty Insurance Company Inc., Producers Agriculture Insurance Company and Producers Lloyds Insurance Co. 

The outlook for all of the ratings is stable, A.M. Best said.

A.M. Best cited CMFG Life's continued position as the leading provider of life/health insurance products to members and employees of credit unions. It also referenced the company's "more than adequate risk-adjusted capitalization as measured by Best's Capital Adequacy Ratio, consistently positive net-operating gains and its strategic initiatives to grow ancillary lines of business to improve product and revenue diversification outside its niche."

A.M. Best also cited CMFG Life's "supportive level of risk-adjusted capitalization, conservative balance sheet, overall-operating profitability and well-established niche position in the credit union and multi-peril crop insurance segments."

A.M. Best also upgraded a CMFG Life subsidiary, MEMBERS Life Insurance Company to "A" (Excellent) from B++ (Good) and affirmed its stable outlook.

The credit rating organization serves the financial services industry.

Conn foundation to accept donations for Sandy Hook families

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MERIDEN, Conn. (12/19/12)--Due to the overwhelming response of many across the country, and their desire to support families of those lost in the Sandy Hook Elementary School shootings Friday in Newtown, Conn., the Connecticut Credit Union Charitable Foundation will be accepting donations on their behalf.

The foundation trustees will work with Gov. Dannel Malloy's office in the coming weeks to identify an appropriate initiative to best help the families and honor the memories of those lost, said the foundation.

"As the families have requested, we are respecting their privacy at this time, but we expect to identify an actionable initiative for their benefit in the coming weeks," said the foundation.

Donations can be sent to:

The Connecticut Credit Union Charitable Foundation

1064 East Main St., Suite 201

Meriden, CT 06450

For more information, contact Tony Emerson, president/CEO, Credit Union League of Connecticut at 203-213-7829 or at temerson@culct.coop.

CUNA Brokerage officer elected to FINRA district committee

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MADISON, Wis. (12/19/12)--Tim Halevan, chief compliance officer at CUNA Brokerage Services Inc. (CBSI), has been elected to the Financial Industry Regulatory Authority (FINRA) District Committee for District 4.

As a FINRA district committee member, Halevan will, among other things, serve as a panelist in disciplinary proceedings in accordance with FINRA rules; consider and recommend policies and rule changes; and educate FINRA members and others about the purposes and work of FINRA and FINRA Regulation.

As CBSI's chief compliance officer, Halevan is responsible for strategic oversight and supervision of the compliance activities of CBSI's registered representatives, advisers, licensing/registration and home office activities, said Jim Metz, president/CEO of CBSI.

Halevan joined CBSI in 2001. Previously he was director of corporate compliance at a large financial services holding company. His experience includes oversight for compliance in areas under the Securities and Exchange Commission, FINRA, Violent Crime and Control Act, the Gramm-Leach-Bliley Act and Federal Sentencing Guidelines. He has served in the securities business for 20 years.

Mergers announced in Florida and Hawaii

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PENSACOLA, Fla., and HONOLULU (12/18/12)--Credit union mergers in Florida and Hawaii were announced Monday.

Gulf Winds FCU, Pensacola, Fla., said SCORE FCU, Tallahassee, will become Gulf Winds FCU on Jan. 1. Also, Kapalama Pacific FCU, Honolulu, merged with Honolulu-based Hawaii Central FCU on Dec. 2.

The Florida merger, approved by the National Credit Union Administration, will add more than 5,500 members and three branches in the Tallahassee area to Gulf Winds.

Once the merger is complete, Gulf Winds will have 12 branches, assets more than $475 million, more than 56,000 members, and a field of membership that includes Escambia, Santa Rosa, Leon, Gadsden, Wakulla and Jefferson counties, Fla., and Escambia County, Ala.

SCORE FCU members will have access to more competitive savings and loan rates, enriched online banking capabilities, mobile banking, a convenient contact center, and more.

"We are already working hard with the SCORE FCU team in preparation to offer our market leading savings and loan rates," said Chris Rutledge, president/CEO of Gulf Winds. "As we plan for the future, our goal is to find ways we can expand our footprint within the communities we serve and beyond."

Randy Glover, president/CEO of SCORE, noted its board "invested a significant amount of time searching for a merger partner. Gulf Winds is the best merger partner for our credit union and this partnership insures that our members will receive increased benefits and quality service."

In Honolulu, with the merger of Kapalama Pacific, Hawaii Central now has more than 13,000 members and $157 million in assets (Pacific Business News Dec. 17). Kapalama had roughly 2,228 members and $5.3 million in assets. The Kapalama Pacific board and NCUA have approved the merger.

Hawaii Central FCU President/General Manager Drake Tanabesaid said the credit union is "committed to helping build stronger financial futures for all our members." Hawaii Central is the 10th largest credit union on Oahu.

Irish league efforts ease restrictions in CU bill

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DUBLIN, Ire. (12/18/12)--Efforts by the Irish League of Credit Unions to ease some of the restrictions in Ireland's new Credit Union Bill 2012 have yielded results, local media say.

Early drafts of the bill would have restricted the length of time people could serve on the board of a credit union. However, that was amended in the legislation after intense lobbying by credit unions, said the Irish Independent (Dec. 15). The measure, passed last week, also no longer includes provisions to ban people related to a person doing voluntary work for a credit union from becoming a credit union director.

A government-appointed commission report in April had recommended that credit unions should collaborate together to benefit from economies of scale and to weather the economy. The European Commission has approved government plans to encourage mass mergers among credit union. About 250 credit unions may merger in the next three years, said the article.

The government also put aside funds to assist troubled credit unions this year and next. The European Union has said that is in line with its state-aid rules.

Increased debit card use sparks overdrafts rebound

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LAKE BLUFF, Ill. (12/18/12)--After a sharp decline that began during the financial crisis, overdraft revenue at financial institutions is starting to pick up as consumers begin using their debit cards more, according to new data.

Annualized overdraft revenue for third quarter was $31.8 billion, a 2% increase over third quarter 2011, according to Lake Bluff, Ill.-based Moebs Services (American Banker Dec. 14).

In third quarter of 2008, annualized overdrafts revenue hit at peak at $37.6 billion, said the fees consulting firm. That revenue dropped by 1% in 2009, 9% in 2010 and 8% in 2011.

Banks began reducing overdraft fees when they came under criticism for manipulating the order of overdrafts to maximize their fees, said the Banker.

The recent growth of debit card use among consumers may be a factor in the uptick in overdrafts, said the Banker. On an annualized basis, U.S. consumers made 52.6 billion debit card transactions during third quarter, up 11% from third quarter last year.

The increase in card use has helped offset some interchange revenue banks lost when the Dodd Frank Act became effective last year. Just before the price caps went into effect last year, banks with more than $10 billion in assets in third quarter 2011, earned $19.9 billion annualized in debit swipe fee revenue. Third quarter this year they earned $18.5 billion, a 7% decrease.

Pa New TV campaign promotes CU loans

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HARRISBURG, Pa. (12/18/12)--Pennsylvania credit unions have joined together, along with the Pennsylvania Credit Union Association (PCUA), to develop and run television and radio spots promoting the credit union difference.

The cost of creating the ads was paid for by Pacul Services Inc., PCUA's service corporation.

Every day, credit unions help their members fulfill their dreams of purchasing a new home, paying college tuition, buying a car or financing a small business. In the series of new TV and radio commercials, Pennsylvanians will hear that credit unions are financial service providers that provide loans to fund their goals, PCUA said.

"For more than 80 years, credit unions have provided affordable financial services to members in Pennsylvania," said Michael Kaczenski, PCUA chairman and CEO of Sun East FCU in Aston. "However, there are many Pennsylvanians who do not know that they can use the products and services offered by credit unions. Credit unions are one of the best kept secrets, and we are looking to tell others all about the benefits of belonging."

As non-profits, credit unions can provide consumers with lower rates on loans and lower or no fees, compared with traditional banking institutions. Research indicates that Pennsylvanians who are members of credit unions save an average of $66 per member or $126 per member household annually. Statewide, this equates to more than $241 million in direct financial benefits to the state's 3.6 million members during the 12 months ending in June, PCUA said.

Still, millions of Pennsylvanians are not saving money because they are not credit union members, PCUA added.

"Our goal with the ads is to inform consumers that credit unions are the best option for loans and to promote awareness about the benefits of membership," said PCUA President/CEO Jim McCormack. "Not everyone can join every credit union, but there is a credit union for everyone."

Consumers seeking a credit union will be directed to iBelong.org, a website that features the campaign spots, facts about credit unions and an online locator. The campaign is a cooperative effort by credit unions in Pennsylvania affiliated with PCUA.

To see the commercials, use the link.

Acupuncture clinic another MBL success story

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LONGVIEW, Wash. (12/18/12)--Fibre FCU in Longview, Wash., through its member business lending (MBL), has helped the owner of a local acupuncture clinic expand her business.

Acupuncture Northwest in Longview, Wash. has three state-of-the-art treatment rooms, a full line of healthy products and an infrared sauna. It's a busy and popular place because of the efforts and planning of owner Patty Kuchar, said the Northwest Credit Union Association (NWCUA) (Anthem Recap Dec. 14).

When medical insurance plans recognized the benefits of acupuncture, doctors began recommending it to complement their patients' protocol. "Acupuncture became really popular, really fast," Kuchar told NWCUA, adding she needed to quickly expand.

"I went through the normal avenues with regular big banks, because at the time that was really all that was offered to me," Kuchar added. "I had, you know, the normal experiences with that. It wasn't easy being a woman and being self-employed."

Kuchar began researching credit unions and went to the $736.2 million asset Fibre FCU. Member-service representatives made it easy for her to switch accounts and later, to get an MBL to expand her clinic again, NWCUA said.

The loan enabled her to purchase and install an infrared heat sauna. "It was maybe a day or two and I had the funds to go ahead," Kuchar said. "They looked at me as a person instead of as a number. So, I was taken care of in a personal way because they knew my needs."

Kuchar is one example of businesses Fibre guided through the MBL process. However, the credit union is close to the current 12.25% of assets lending cap on MBLs, NWCUA said.

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets so that more loans could be made to small businesses. CUNA and credit unions say that increasing the cap would inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

CUNA conservatively estimates Fibre could make an additional $28 million in small-business loans in the Longview-Kelso community, creating more than 300 new jobs in the first year alone, NWCUA said.

Kuchar extolled MBLs at locally operated credit unions. "The process was so much easier and friendlier especially because they are here in our community," Kuchar told NWCUA. "And they are people that you know."

To see a video about Kuchar and her relationship with Fibre FCU, use the link.

Iowa foundation renames scholarships for Morrow

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DES MOINES, Iowa (12/18/12)--The Iowa Credit Union Foundation (ICUF)  has renamed its Family Involvement Board Scholarship program the Warren A. Morrow Scholarship program.

Warren Morrow, the late CEO and founder of Coopera, a consulting organization that helps credit unions reach Hispanic markets, died unexpectedly in February. Morrow was instrumental in ICUF's ability to obtain a $428,323 grant that provided matching funds to launch Iowa's first Credit Union Individual Development Account program (News Now March 27).

"The Warren A. Morrow Memorial Scholarship will keep Warren's spirit alive by providing young adults and nontraditional students with education opportunities," said Marybeth Foster, ICUF executive director. "Without Warren, ICUF would not be where it is today."

The program includes two scholarship categories.

One category is for high school seniors with a projected graduation date of 2013. The high school scholarship competition will award $3,750. The first place prize is $1,500; second place is $1,000; third place is $750 and fourth place is $500.

The second category is the post- high school scholarship, which is open to any person who is entering or attending an accredited undergraduate, graduate or vocational program. This category will award two $1,000 scholarships.

Applicants must complete the entry form on IowaCreditUnionFoundation.org and answer this question in no more than 500 words: "Given the fragile state of our national economy, with record unemployment and deficits, describe how having an emergency savings account is more crucial than ever. How might someone utilize their credit union to focus on saving?"

Essay questions are designed to encourage learning about the credit union movement and its mission.

Judges will base their scores for the essay on originality, clarity, meaningful content, accurate presentation of facts, adherence to contest rules, spelling, grammar and punctuation. The deadline for applications is Feb. 1. Winners will be notified via mail by April.

CO-OP promo hikes debit card spending 201

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RANCHO CUCAMONGA, Calif., and FRANKLIN, Mass. (12/18/12)--CO-OP Financial Services reported a 201% increase in average monthly debit card spending among credit union members in a "Season of Giving" promotion.

The 201% increase is based on spending that rose to $188.87 per card for November from $62.60 per-card, per-month.

During November, credit union members nationwide participated in the CO-OP Financial Services debit card marketing promotion, managed by Saylent Technologies. The program targeted low-spending debit cardholders, identified through the CO-OP Total Revelation payment intelligence tool.

In addition to the 201% increase, program results included:

  • Average signature debit transactions per card increased 74%, to 6.73 from 3.87.
  • Average per-transaction spending amount grew almost identically with the number of transactions--a 73% increase, to $28.01 from $16.18.
  • Average signature debit interchange per card rose by 131%, to $2.78 from $1.21.
When targeted members increased their spending, a contribution was made in their name to a tree-planting program, in which 8,240 trees will be planted on behalf of the 824 cardholders. The trees will be planted at more than 40 reforestation projects worldwide, half of which were located in the U.S. The tree plantings are provided by Treecycler, an organization that connects businesses with a network of reforestation organizations.

"CO-OP's 'Season of Giving' marketing campaign helped our credit unions recognize real growth in an inactive member segment," said Stan Hollen, president/CEO of CO-OP. "We are committed to not only providing products and services that help credit unions keep their cards 'top of wallet' among members, but also the programs and strategic counsel to achieve that goal."

CO-OP facilitates four turnkey marketing campaigns, called CO-OP Preferred, every year. The turnkey campaigns include: target segmentation, campaign concept and creative design, customized creative, results analysis, incentive fulfillment, and report on return on investment.

Arkansas Okla Texas leagues announce intent to consolidate

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FARMERS BRANCH, Texas (12/18/12)--The boards of three leagues--the Arkansas Credit Union League, the Credit Union Association of Oklahoma and the Texas Credit Union League--announced Monday they intend to pursue consolidation into a single regional league operating as Cornerstone Credit Union League.

The consolidation will allow credit unions in each state to enjoy the services and strengths of the new larger league. The new league will maintain an advocacy-focused office in each state capital to continue a strong local presence. All three leagues have worked closely over the years.

"There's no question that leagues are looking for more opportunities to collaborate," noted Michael  Kloiber, CEO, of  Oklahoma City-based Tinker FCU and chairman of the Regionalization Task Force. "League consolidations nationwide have one driving force at their core: credit unions must have top-flight offerings from their trade associations.

"Credit union leaders are looking for real value in their league membership--value that both shapes the credit union operating environment from a legislative and marketing perspective, and provides a full suite of products and services to its members to leverage our cooperative strength," Kloiber said.  "By consolidating, we will ensure our region has enhanced services as well as a strong, united voice for credit unions in the marketplace, with elected officials, and within our movement."

The league boards have agreed to a governance structure and transition plan for consideration by their membership.

The next step is to conduct information sessions across the region to address any questions members may have about the proposed consolidation. A vote on the consolidation will be held at specially called meetings of each state in the spring.

Ill state-chartered CUs get third Q4 fee credit

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NAPERVILLE, Ill. (12/18/12)--For the third straight year, Illinois state-chartered credit unions will receive a credit of more than $1.051 million toward regulatory fees paid to the state for the fourth quarter, the Illinois Credit Union League announced Friday.

The credit is expected to be slightly less than the 2012 fourth-quarter billing for credit union regulatory fees.

The credit is the result of legislation that implemented a court-approved settlement of a regulatory fee case filed by the league against then-Gov. Rod Blagojevich in 2004.

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

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

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

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

NEW Arkansas Oklahoma Texas leagues intend to consolidate

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FARMERS BRANCH, Texas (FILED 3:15 p.m. CT 12/17/12)--The boards of the Arkansas Credit Union League, the Credit Union Association of Oklahoma and the Texas Credit Union League announced today they intend to pursue consolidation into a single regional league operating as Cornerstone Credit Union League.

The consolidation will allow credit unions in each state to enjoy the services and strengths of the new larger league. The new league will maintain an advocacy-focused office in each state capital to continue a strong local presence. All three leagues have worked closely over the years.

"There's no question that leagues are looking for more opportunities to collaborate," noted Michael Kloiber, CEO, of  Oklahoma City-based Tinker FCU and chairman of the Regionalization Task Force. "League consolidations nationwide have one driving force at their core: credit unions must have top-flight offerings from their trade associations.

"Credit union leaders are looking for real value in their league membership--value that both shapes the credit union operating environment from a legislative and marketing perspective, and provides a full suite of products and services to its members to leverage our cooperative strength," Kloiber said.  "By consolidating, we will ensure our region has enhanced services as well as a strong, united voice for credit unions in the marketplace, with elected officials, and within our movement."

The league boards have agreed to a governance structure and transition plan for consideration by their membership.

The next step is to conduct information sessions across the region to address any questions members may have about the proposed consolidation. A vote on the consolidation will be held at specially called meetings of each state in the spring.

CUAD meets with new Sen Banking Committee member

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BISMARCK, N.D. (12/18/12)--
From left, Credit Union Association of the Dakotas (CUAD) President/CEO Robbie Thompson, CUAD Vice President of Advocacy and Awareness Jeff Olson; U.S. Sen.-elect Heidi Heitkamp; and CUAD Board Chair Steve Davis. (Photo provided by the Credit Union Association of the Dakotas)
Leadership from the Credit Union Association of the Dakotas (CUAD) attended a meeting with U.S. Sen.-elect Heidi Heitkamp at her campaign office in Mandan, N.D., Friday.

The new senator from North Dakota could prove to be a powerful advocate for credit unions in Washington, D.C., because one of her committee assignments will be to serve on the Senate Banking Committee, said CUAD.

Heitkamp, the former North Dakota attorney general, is familiar with the financial cooperative model and credit unions.

CUAD legislative advocates took the opportunity to discuss several issues that may impact credit unions during the 113th Congress--such as tax status, increasing regulatory burdens and increasing credit unions' member business lending cap to 27.5% of assets from 12.25%.

Indicating the association looked forward to working with Heitkamp and noting her committee appointment, CUAD President/CEO Robbie Thompson said that Heitkamp "knows and understands credit unions--especially the issues facing small and rural area credit unions. We are confident that she will always be willing to listen to our concerns."

CU System briefs (12/17/2012)

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  • ALBANY, N.Y. (12/18/12)--
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    The Credit Union Association of New York Monday debuted a redesign of its home page, www.cuany.org, which features a new look and feel while delivering information to association members and the public.  The restructuring incorporated these interactive tools and easier access to content: Buttons and links to popular content for effortless navigation; rotating announcements and offers; enhanced functionality for an updated feed of CUANY's videos; and direct links to information about CUANY's strategic partners. The page also brings to the forefront a popular blog, "New York's State of Mind," written by Henry Meier, the association's associate general counsel, and an RSS feed, advocacy tools, "Of Interest" items and social media links. More features and content will be added in the coming months. (Photo provided by the Credit Union Association of New York) …

McAfee Prepare for Blitzkrieg mass fraud campaign

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SANTA CLARA, Calif. (12/17/12)--While several big banks were fending off distributed denial of service attacks last week, security firm McAfee was warning financial institutions about a substantially higher risk--"Project Blitzkrieg," in which Russian cybercriminals would use  massive fake wire transfers to steal millions from 30 U.S. large financial institutions.

In a report released Thursday, McAfee said the mass cyberheist campaign could come before spring of 2013 and that the project is "a credible threat to the financial industry and appears to be moving forward as planned" (Christian Science Monitor and CNet Dec. 13).

The project was exposed in October when mastermind hacker "vorVzakone" (translated as "thief in law") posted notices in an underground criminal online forum seeking accomplices. The hacker posted pictures of his computer setup, screenshots of his malware, and a general description of the plan to organize an army of 100 "botmasters" to attack the banks, said the Christian Science Monitor.

The plot has progressed since it was first discovered in October by Bedford, Mass.-based RSA, the cybersecurity division of EMC, whose researchers wrote about it in a blog post. They said that thieves had been using their system since April, had transferred $5 million so far and had at the time infected up to 500 institutions.

"If the aims of Project Blitzkrieg, as vor Vzakone has claimed, become fully realized by Spring 2013, the financial industry needs to be fully prepared," said McAfee in Thursday's warning.

A key feature of the plot is to purchase computerized "phone flooding" equipment to prevent banks from calling or texting their customers to verify the wire transfer requests. The thieves, however, could call the bank and claim to approve the transfers.

However, instead of targeting thousands of people, the attackers may go after smaller, more select groups, McAfee predicted (The Huffington Post Dec. 13).  This would mean the attackers could transfer millions with fewer infections. The fewer infections, the less likely the thieves would be detected by defense networks, said Post.

Among the banks being targeted, the study indicated, were Fidelity, Charles Schwab, PayPal, Citibank, Wachovia, Wells Fargo, and Capital One.

Nearly half of Americans live paycheck to paycheck

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CHICAGO (12/17/12)--Nearly half of Americans surveyed--48%--say they are living paycheck to paycheck, while 44% indicate they are simply trying to stay current on bills or home payments and avoid excessive debt or bankruptcy, says a new survey from online lender NetCredit.

Credit unions can view that news as a warning that members living check to check could experience significant financial problems if something in their life changes. Warning signs can include any situation in which income is lost or sudden, unexpected bills. Many past bankruptcies have been attributed to lost income from a death, a divorce, loss of a job, or an increase in bills such as medical or legal bills.

Credit unions can also see the study as a marketing opportunity to make members aware of their savings programs and better rates, a financial counseling opportunity, or a chance to deliver financial education/money management information through a number of channels.

NetCredit collected some demographics, which could help credit unions know where to start. The population segments where concern about living paycheck to paycheck runs highest were:

  • Those in their 30s--62%;
  • Americans under the age of 60--54%;
  • Families with children--57%;
  • Families with five or more people in the household --64% vs. 45% for smaller households; and
  • Residents of southern states--53% vs.41% for those in the Northeast U.S.
"Living paycheck to paycheck puts many Americans dangerously close to their own personal fiscal cliff should they be hit with an emergency expense," said Stephanie Klein, who heads NetCredit's consumer lending. "An unexpected medical bill, car repair or higher than usual utility bill can easily push them beyond their ability to pay bills on time," she added.

The survey asked where the respondents would turn to if they needed money. Nearly 30% said they would turn to more than one of these options:

  • General savings, 61%;
  • Credit card, 23%;
  • Family/friends, 16%;
  • Separate rainy day fund, 15%;
  • Pawn or sell items--7%;
  • Bank loan--5%;
  • Short-term cash advances--4%; and
  • Installment loans--2%.
"But there might not be enough cash there to handle the crisis," said Klein. A recent study by the Federal Deposit Insurance Corp. indicates that nearly half of Americans cannot access $2,000 in 30 days to meet an emergency, she said, noting that consumers need more flexible options to get cash, especially during emergencies.

TNS Omnibus conducted the online survey in September with a nationally representative sample of 1,000 Americans age 18 or older.

Another man sentenced in St Paul Croatian FCU fraud

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CLEVELAND (12/17/12)--Another man has been sentenced in the loan fraud ring that helped bring the collapse of St. Paul Croatian FCU, an Eastlake, Ohio--based credit union liquidated in 2010 in one of the nation's largest credit union failures.

Ted Vannelli, 66, of Willoughby, Ohio, was sentenced Thursday to five years of supervised release for his role in the fraud. He pleaded guilty in April to aiding and abetting and conspiracy (News-Herald.com Dec. 14). In exchange for his cooperation with authorities, the U.S. Attorney's Office dropped charges of bribery, financial institution fraud and false statements to a financial institution.

Vannelli, one of 19 people arrested in connection with the loan fraud ring,  is a business partner and father-in-law of A. Eddy Zai, a businessman who pleaded guilty Nov. 5 to bank fraud and who is scheduled to be sentenced on Feb. 5. They operated several business entities allegedly created as a haven for illegal proceeds from the credit union in the loan scams, said the court indictment.

The credit union's former CEO, Anthony Raguz was sentenced to 14 years in prison and ordered to pay $72 million in restitution for allegedly issuing more than 1,000 fraudulent loans, totaling more than $70 million, to about 300 accountholders, in return for about $1 million in bribes, kickbacks and gifts from the borrowers (News Now Nov. 27).

According to Vannelli's indictment, he and Zai gave about $5,000 to Raguz to approve false loan applications. It was also alleged that  Zai and Vannelli submitted false loan applications to Park View Federal Savings Bank, which lost $750,000 on its loans.

The National Credit Union Administration liquidated the credit union in early May 2010, saying it was insolvent. The collapse cost the National Credit Union Share Insurance Fund $170 million in losses, and NCUA has filed several lawsuits against individuals involved to recoup some of the losses.

Ohio CUs receive 825K worth of ad exposure

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COLUMBUS, Ohio (12/17/12)--Ohio credit unions received more than $825,000 in exposure from state media during the past year, according to the Ohio Credit Union League.

The league used software to track every print article or television news segment mentioning credit unions. Every article or segment is assigned an advertising value based on the positive impression left on viewers or readers, the number of likely readers or viewers and the item's placement (eLumination Dec. 12).

"This is a striking number, a testament to our continued work building stronger bonds with reporters," said Patrick Harris, league director of media and public relations."

Intuit New data democracy for the little guy

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MOUNTAIN VIEW, Calif. (12/17/12)--A new study from Intuit forecasts a future where consumers--including credit union members--are part of a "new data democracy" in which small business owners and consumers can access "big data" once available only to government and large corporations, helping the little guy make smarter, more informed decisions.

The challenge for credit unions in the future will be how to gather and present that data in a manner that adds value to members' lives.

"The New Data Democracy: How Big Data Will Revolutionize the Lives of Small Business and Consumers," was prepared by Emergent Research and is the latest in Intuit's 2020 research series.

"Big data have long been seen as a big opportunity for big business," said Brad Smith, Intuit president/CEO. "We actually think that the biggest opportunity is giving consumers and small businesses the power of data. We look forward to a new era where big data benefits the little guy."

The new report reveals three trends for consumers and small businesses, including:

  • The New Data Democracy--Data will become a new vital raw material for consumers and small businesses. As access to and the ability to refine a massive volume of information into powerful analytical tools grows, data will become a new type of resource, similar to capital and labor.
  • Data Empower Consumers--Data will help people navigate the maze of modern life. With people connected through the global grid and mobile devices, data will shape decisions both large and small, inform purchasing decisions, and create communities and relationships.
  • Data Drive Main Street Digital--Big data will move from Wall Street to Main Street. Small business will have access to insights and capabilities once only available to corporate giants. This will provide small business with opportunities to operate more efficiently, find new customers, improve their results and drive economic growth.
"We are at the onset of a data revolution that will provide new and meaningful ways for data-empowered consumers and small businesses to connect and engage with their communities, make decisions and simplify their lives," said Steve King, partner at Emergent Research, a research and consulting firm focused on the small business sector of the global economy.  

Data are the catalyst that powers innovative products to improve the lives of customers and help businesses grow, he said.

Griffiths returns as interim CEO at N J league

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HIGHTSTOWN, N.J. (12/17/12)--The New Jersey Credit Union League (NJCUL) has named former Iowa Credit Union League CEO Tom Griffiths to serve as interim CEO while the NJCUL board conducts a national search to find a permanent replacement for the departing Paul Gentile.

Griffiths served as the league's interim CEO for six months in 2007, prior to Gentile's hiring (Daily Exchange Dec. 14).

"Tom's long history of success and innovation as the Iowa CU League CEO gives us extreme confidence that he can keep us on the right path while the search is conducted," said NJCUL Chairman Lou Vetere.

Gentile will depart the league at the end of the year to join the Credit Union National Association as executive vice president.

NJCUL's Search Committee has also announced the hiring of O'Rourke & Associates as its search firm.

The league is on much firmer footing than it was five years ago during its last CEO search, Vetere said. Members have benefited from a number of aggressive advocacy efforts, such as the "Banking You Can Trust" consumer advocacy campaign, which is entering its fifth year. NJCUL also led a long grassroots campaign for the passage of municipal deposit legislation, which was signed into law by Gov. Chris Christie last year.

CU System briefs (12/14/2012)

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  • INDIANAPOLIS (12/17/12)--Dallas Bergl, CEO of the INOVA FCU, Elkhart, Ind., has received the 2012 Millie Cox Scholarship Award, announced the Indiana Credit Union Foundation. The award recognizes one individual each year for political involvement efforts that protect and further credit union interests.  Bergl has served on the Indiana Credit Union League's Governmental Affairs Committee and been a key participant in the league's Legislative Affairs Forum and the Credit Union National Association's Governmental Affairs Conference. He was a key contact for former U.S. Rep. Chris Chocola, serving on his finance committee and hosting fundraisers in this home for Chocola. Bergl also has worked with former State Rep. Jackie Walorski during two campaigns for the U.S. House seat, which made credit unions more visible. He organized a credit union fundraiser last spring. Walorski was elected in November. "It is every credit union CEO's responsibility to do all that they can to advocate for candidates that will carry the credit union torch for all of us," Bergl said. "It does not matter what side of the aisle they are on; what matters is ensuring that there is a viable financial alternative to big banks so that consumers do not get exploited," he added. The late Millie Cox was a former league vice president of governmental affairs …
  • COLUMBUS, Ohio (12/17/12)--
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    An annual "Money War" competition between University of Michigan CU and Credit Union of Ohio has benefitted two local children's hospitals. The war is a competition to see which credit union can raise the most funds for their local hospital during the week leading up to the Ohio State University and University of Michigan football game. This year's competition raised $4,400, a significant increase over the amount raised in 2011. C.S. Mott Children's Hospital in Ann Arbor will receive about $2,800, and the Nationwide Children's in Columbus will receive about $1,600, the amounts raised by each respective credit union.  Last year, Credit Union of Ohio, whose members include students, faculty and staff of Ohio State, was the winner and received a photo of University of Michigan Credit Union's staff dressed in Ohio State's  team colors, scarlet and gray, the opposing team's colors. This year, Credit Union of Ohio staff are dressed in Michigan's colors, and the credit union will return the roving war trophy to the Michigan group  Pictured are Credit Union of Ohio staff, from left: front row Jill Gerschutz, director of marketing; Greg Moss, vice president of information technology; Tonya Keaton, vice president of lending; and Bill Mascari, chief financial officer; back row Tammy Jones, chief operations officer; Rich Capuano, CEO, and Tami Peyton, vice president of human resources.  (Photo provided by the Credit Union of Ohio) …
  • BILOXI, Miss. (12/17/12)--A Louisiana couple wanted for the Dec. 6 robbery of the Diamondhead branch of Biloxi, Miss.-based Keesler FCU, were arrested Thursday morning in Bogalusa, La. Jessie Landry, 42, and Aleisha Dyaz Landry, 33, husband and wife from Picayune, were arrested at her mother's home in Bogalusa without incident. They are charged with possession of marijuana, possession of marijuana and receiving stolen property, and are awaiting extradition to Hancock County, Miss., where they face armed robbery charges (The Sun Herald Dec. 13) ...
  • LINCOLN, Neb. (12/17/12)--Billy Johnson, 25, of Omaha, Neb., was arrested in Phoenix and charged with robbing the Liberty First CU in Lincoln, Neb., last July (Associated Press Newswires and Lincoln Journal Star Dec. 14).  He has been returned to Lincoln to face the robbery charge. The robbery occurred on July 9 when a man entered the building and passed a note to a teller. He escaped with nearly $22,700.  Investigators found a fingerprint on the note and allegedly matched it to Johnson, said the court documents …

IN Y TimesI Hampel analyzes CUs mortgage explosion

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NEW YORK (12/17/12)--Credit unions have benefited from the home refinancing explosion and membership growth, said The New York Times  in an article Thursday that included an analysis by Credit Union National Association (CUNA) Chief Economist Bill Hampel and others.

For the first time in history, credit unions are on track to surpass $100 billion in mortgage loan originations, said the article, entitled "The Credit Union Alternative." It attributed the growth to home refinancings and credit unions' record growth in membership due to consumer disillusionment with big banks.

At the end of the third quarter, the credit union market share of mortgage originations totaled about $89 billion nationwide, a $7 billion increase from all of 2011,  Bob Dorsa, president of the American Credit Union Mortgage Association, Las Vegas, said. He told the Times much of the growth in mortgage business is concentrated among giant credit unions but added the industry is reaching out to younger generations who may overlook credit unions or consider them outdated.

Credit unions have aggressively gone after mortgage business, resulting in a 45% increase in first mortgage originations this year from 2011, CUC Mortgage Corp., which serves 220 credit unions, told the Times.

CUNA's Hampel noted that credit unions as portfolio lenders keep at least half of the new loans in their own investment portfolios. This allowed them to continue lending and build market share as the secondary market for mortgage loans collapsed during the housing crisis.

He said credit unions can offer slightly lower closing costs than banks and most retain their servicing or work with companies like CUC. As member-owned cooperatives, they have an incentive to be responsive to their members. "The people working at credit unions know that they'll keep their jobs if they keep their members happy," Hampel told the Times. "There are no divided loyalties."

CU System briefs (12/13/2012)

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  • SAN ANTONIO (12/14/12)--San Antonio-based Security Service FCU has named Jim Laffoon as president (LoneStar Leaguer Dec. 11).  Laffoon will responsible for the credit union's day-to-day operations and provide leadership and strategic direction to the $6.7 billion credit union's more than 1,600 employees. Laffoon began his career at SSFCU in 1989, serving as primary strategist, corporate planner, technologist and operations manager. He was named executive vice president and chief operating officer in 2002. He previously served as a senior consultant at Arthur Anderson and Co. David E. Reynolds will continue to serve in the role of CEO. Reynolds has led the credit union since 1997 and will continue to represent the credit union in industry, trade and community matters as well as member events …
  • PITTSBURGH and MECHANICSBURG, Pa. (12/14/12)--AmeriChoice FCU, Mechanicsburg, Pa., is the newest member of the Federal Home Loan Bank (FHLB)  of Pittsburgh (India Insurance News Dec. 11). AmeriChoice, a $165.8 million asset credit union, becomes the 27th credit union member at the FHLBank Pittsburgh, a privately funded cooperative of commercial banks, thrifts, credit unions and insurance companies in Delaware, Pennsylvania and West Virginia.  The FHLB will provide low-cost loans for community lending, general asset/liability management and financing. "As a fellow cooperative, FHLBank is aware of the needs of all our credit union members who each day work diligently to provide value to their own community membership," said Winthrop Watson, president/CEO of FHLBank Pittsburgh …

NCUFs national financial capability report now online

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MADISON, Wis. and WASHINGTON (12/14/12)--The National Credit Union Foundation (NCUF) has made available a free financial capability report and a resource guide online. 

NCUF believes that credit unions do outstanding work around building the financial capability of American families, but that they don't do a great job of telling that story. For that reason, NCUF compiled a financial capability report that outlines the financial education and capability building efforts by the U.S. credit union system, said Lois Kitsch, NCUF national program manager.

The report includes an executive summary, 12 credit union system case studies, key findings and one page from every state sharing its financial education efforts. The report, along with a companion resource guide, is available for free download from the REAL Solutions Impact Center. The site also includes a one-sheet success story from each state. 

The report, "Credit Unions: Focused on Financial Capability Across the Nation," is the result of an almost year-long data collection effort by NCUF and state credit union leagues.

NCUF and REAL Solutions conducted the national study of credit-union-provided member and consumer financial education and counseling. The data will be useful to state leagues/associations and the broader credit union industry because it quantifies the extent to which credit unions are providing opportunities for members/consumers to advance their financial knowledge and decision-making skills, said NCUF.

The report describes 10 financial education/counseling interventions offered to members/consumers by credit unions. It provides cumulative data about member use of and access to credit-union provided financial education/counseling products, tools and courses, and it reveals probable keys to program success. National data are supplemented by case studies of credit unions and state leagues that illustrate each type of educational intervention.

The accompanying resource guide assists credit unions and others with accessing resources, information and curriculum already created to help them offer even more financial literacy programs. Each method of financial counseling/education provides examples, additional resources and information, and tips to help credit unions expand their current education programs or introduce new ones.

To view the report and resource guide, use the links. 

Early next year, NCUF will begin working on its 2012 report, Kitsch told News Now.

Trend CUs name changes slowing

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MADISON, Wis. (12/14/12)--U.S. credit union name changes have slowed down this year, according to The Financial Brand, an online industry trade publication focused on branding, marketing, advertising, promotions and branch design in retail banking, including credit unions.

In the past seven years, there have been 234 credit union name changes, said the company, which studied every name change in the credit union industry since 2006. That represents 3.27% of all credit unions, which collectively hold 5.52% of all credit union assets, The Financial Brand said.

This year saw the fewest credit union name changes in the past seven years--24, the company said. The high was 42 in 2009 and 2011.

One trend is that smaller credit unions are changing their names. In 2006, about 79% of all credit unions changing their monikers had assets in excess of $100 million. However, by 2012, that percentage had plunged to 33%, with the other 67% having assets under $100 million, said The Financial Brand.

Other trends: nine percent of new names included the word "First" while 6.8% added the word "Financial."

Although alphanumeric constructions are rare--Plus 4, Med 5, Coast 360 and Latitude 32 being the most unique--48 credit unions nationwide (20.5%) that changed their name since 2006 have included a geographic emphasis or reference in their new name, the company said.    

To read the article, use the link.

CUs call center collaboration to cut costs improve service

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MADISON, Wis. (12/14/12)--Shared Service Solutions (S3), a groundbreaking collaboration among three credit unions, has initiated a process of combining each entity's call center operations into a single point of contact, according to the Credit Union National Association (CUNA). 

Bellco CU in Greenwood Village, Colo.; Bethpage FCU in Long Island, N.Y.; and State Employees CU in Linthicum, Md., are the collaborators.

Plans call for the S3 collaboration to transition the partners to joint operations for processing residential mortgages, consumer loans, credit and debit cards and deposits. The initiative is expected to deliver savings of millions of dollars annually and to improve the membership's overall experience.

The credit unions have a long history of cooperation and collaboration that is paying big dividends for members, CUNA said. Their Open Technology Solutions (OTS) alliance--formed in 2003--created value for the partners by adding scale and efficiency to the process of providing information services. By sharing the expense of operating computer systems and other technologies, the partners increased skill sets and service and reduced costs.

The need to reduce back-office redundancy through more cooperation and collaboration is one of the top strategic issues facing credit unions, CUNA said. Credit union professionals repeatedly tell CUNA this but, when asked, also say they don't cooperate or collaborate more because they aren't aware of successful efforts. With this in mind, CUNA recently created a repository to collect examples of successful efforts and to find ways to encourage credit unions, leagues and credit union service organizations (CUSOs) to share their stories. 

The site presents users with the opportunity to join a collaboration listserv, to share information about initiatives and to read about examples of interesting cooperative efforts that seem to make a difference. It also includes links to additional resources such as Credit Union Magazine articles and several Filene Research Institute studies. CUNA's goal is for the website to be used by credit unions of all sizes--not just small credit unions.  

To visit the site, use the link. 

"Visitors to the site also can sign up for the listserv and suggest a resource or add an anecdote," said Mike Schenk, CUNA vice president of economics and statistics. "They also can use the provided link to add an example (or two or three) of an interesting collaboration initiative in their state. Finally, and most important, visitors should share this information with all credit unions in their state--large and small.  

"The benefits of cross-pollination and the potential to replicate successful initiatives can be great,' Schenk added. "The site is clearly not 'the' solution to the collaboration issue, but CUNA hopes visitors will that it is one small step in the right direction."

Rekindling SEG relationships explored in CUNA council paper

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MADISON (12/14/12)--A new whitepaper from the CUNA Marketing & Business Development Council discusses how credit unions can rekindle select-employee group (SEG) relationships in  a marketing environment that has shifted to community charters in recent years.

"The business development pendulum is coming back after a swing to community charters," said the paper, titled "Developing Strategies for SEG-Based Credit Unions." "Increasingly, credit unions large and small, rural and urban, see and act on the promise of increased business through SEG-based efforts."

Trends examined in the paper include:

  • Business development at the branch level. As the business development model evolves, credit unions face the challenge of how to best involve branch managers in the process. In more and more credit unions, business development is performed by the branch manager.
  • Business development as a strategic function. To optimize success, many credit unions work to integrate business development as a core strategic function on the same level as operations, lending and marketing.
  • Business development for executives. Credit unions should make business development skills an important part of executive team job requirements and deploy them as community-brand ambassadors, the paper said.
  • Business development to business services. Credit unions should try to provide to their SEGs a comprehensive array of business products and services, including corporate checking accounts, loans and credit cards, the paper said.
  • Leveraging business development for small businesses. As credit unions re-establish old SEG relationships and develop new ones, many seek ways to connect with small businesses as part of the plan. A comprehensive business-development plan will include a complete suite of services for small businesses.
To download the white paper, use the link.

CUAid update Donations still needed for Sandy relief

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MADISON, Wis. (12/14/12)--The National Credit Union Foundation (NCUF) is seeking additional support from the credit union community to continue to assist credit union people affected by Hurricane Sandy.

Since Oct. 31, NCUF has raised and distributed more than $260,000 to credit union employees, volunteers and members, but there still are applications for assistance outstanding. 

This week, the New Jersey Credit Union League (NJCUL) began to deliver CUAid grant checks to credit union people across the state. Angel Santos, left, NJCUL business consultant, and  Ann South, right, president/CEO of Novartis FCU, East Hanover, and New Jersey Credit Union Foundation chairman, presents a check to Novartis FCU Member Service Representative Althea Rankins, whose home was flooded during Hurricane Sandy.

"The response from the credit union system thus far has been absolutely outstanding," said Tom Candell, NCUF deputy executive director/chief operations officer/chief financial officer. "It's not typical for NCUF to continue to fundraise this long after disaster strikes, but it's also rare for us to have so many credit union people that can still benefit from assistance. We'd like to help as many people as possible get back on their feet, so any and all additional support is appreciated."

To date, $121,000 in CUAid funds has been distributed in aid to 94 credit union employees, volunteers and members in New York. Another $141,000 has been disbursed to 161 credit union people in New Jersey.

The New Jersey Credit Union League (NJCUL) has begun to deliver CUAid grant checks to credit union credit unions across the state.

Paul Gentile, left, New Jersey Credit Union League president/CEO, offers a check to Tom O'Shea, president/CEO Aspire FCU, Clark, N.J., to present to a member. (Photos provided by News Jersey Credit Union League)
Angel Santos, NJCUL business consultant, and Ann South, president/CEO of Novartis FCU, East Hanover, and New Jersey Credit Union Foundation chairman, presented Althea Rankins, member service Representative at Novartis FCU, a check for $1,500 from CUAid.

Rankins' home was flooded during Hurricane Sandy. The Novartis FCU board of directors also presented Rankins with a $500 gift card from Home Depot.

NJCUL President/CEO Paul Gentile presented a $1,500 check to Tom O'Shea, president/CEO of Aspire FCU, Clark, N.J., to present to an Aspire member.

Santos and Ron Behrens, president/CEO of Raritan Bay FCU, Sayreville, N.J., presented a $1,500 check to Shannon Gonzalez, the credit union's collection coordinator. Gonzalez lost her home during the hurricane.

Santos along with Bryan McMillen, board chair, and Jonathan Kaufman, president/CEO at IFF Employees FCU, Hazlet, N.J., presented $1,500 checks to Beverly Weston, senior teller, and Laura Larsen, operations manager. Both Weston and Larsen lost their homes during the storm.

NCUA seeks expedited hearing on St Paul Croatian FCU payments

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CLEVELAND (12/14/12)--The National Credit Union Administration (NCUA)--seeking to receive restitution of funds lost in the collapse of St. Paul Croatian FCU from Cleveland businessman A. Eddy Zai--has asked a federal court in Ohio to grant a motion for prejudgment attachment or schedule an expedited hearing on that motion to avoid impeding its recovery of the losses.

Zai pleaded guilty Nov. 5 to bank fraud that contributed to one of the largest credit union failures in U.S. history. He is to be sentenced in the U.S. District Court in Cleveland on Feb. 5.  

He owes $21.895 million, according to an affidavit filed May 21 by one of the individuals working on the liquidation of the credit union.  As part of his plea bargain, he is to forfeit $16.7 million, according to the preliminary order of forfeiture filed Nov. 30. It is the largest restitution in Northeast Ohio's history (Cleveland.com Nov. 5).

NCUA, the credit union's liquidating agent, noted that it does not have an executed settlement agreement with defendants Zai, Tina Zai, Ted Vanelli and Cleveland Group of Companies defined in a prejudgment document as holding a promissory note outlining the money flow for any restitution.

NCUA is concerned the parties "may take certain actions with respect to the note that could hinder or delay the liquidating agent or otherwise impede its ability to recover the losses," it said in its motion, filed Dec. 10 with the U.S. District Court Northern District of Ohio Eastern Division in Cleveland.

A prejudgment attachment would place the note under the control of the court and require Cleveland International Fund Ltd. (CIF), whose president is Zai, to make all required payments to the court in accordance with a settlement agreement executed between NCUA, CIF and International Regional Center in late July.

CIF had recently filed a motion to vacate the orders, and NCUA said it is concerned the note remains under the control of the Cleveland Group LTD or the Zais.

Also on Dec. 10, the U.S. Attorney's Office (USAO) withdrew its seizure warrants in the case as part of an agreement with CIF, IRC and other companies affiliated with Zai.  The agreement specifies forfeiture or restitution for the collapse--up to $16.7 million-- from CIF, Cleveland International Fund-Flats Ltd., CIF-Hospital; Flats East Hotel LLC, Flats East Office LLC, Flats East Retail LLC and University Hospitals Health System Inc.

The collapse of St. Paul Croatian FCU cost the National Credit Union Share Insurance Fund about $170 million (News Now Nov. 8). 

Zai admitted to conspiring with others, including Anthony Raguz, former CEO of the defunct credit union, to submit false loan documents. Raguz pleaded guilty to issuing more than 1,000 fraudulent loans totaling $70 million to about 300 accountholders. He received kickbacks, gifts, and bribes totaling more than $500,000.  Raguz was sentenced in November to 14 years in prison and ordered to pay $71.5 million in restitution.

Nineteen people were charged in the scheme. Alleged ringleader Koljo Nikolovski of Eastlake and Skopje, Macedonia, was sentenced in May to 18 years in prison for his role in the fraud.

CMG Watterson sign agreement on RMBS due diligence documents

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SEATTLE (12/14/12)--CUNA Mutual Group and Bellevue, Wash.-based Watterson Prime LLC have reached an agreement on CUNA Mutual's motion to compel Watterson to produce documents related to residential mortgage backed securities (RMBS) sold to the insurance company by RBS Securities before the nation's financial crisis hit.

The companies filed a notice Wednesday in the U.S. District Court for the Western District of Washington (Seattle) of voluntary dismissal, without prejudice to the defendant, of the motion to compel the documents.

The agreement came as the federal court in Seattle was preparing a proposed rulingfiled Nov. 30 that would have ordered Watterson Prime to turn over due diligence documents subpoenaed by CUNA Mutual for its lawsuit against RBS Securities.

The company's Sept. 17 subpoena had sought documents related to 15 RMBS at the center of CUNA Mutual's $72 million lawsuit against RBS, specifically nine types of documents related to the RMBS' underwriting, appraisal of, due diligence and more..

CUNA Mutual filed its lawsuit against RBS in a U.S. District Court in the Western District of Wisconsin (Madison) on Jan. 17. It seeks a rescission of its purchases, which it bought in 10 separate offerings. The purchases were based on representations made by RBS about the credit quality of the mortgage pools that collateralize the securities, CUNA Mutual said in its complaint. 

CUNA Mutual maintains that RBS falsely represented the products it sold between 2004 and 2007.

A key issue in the Wisconsin case is whether RBS engaged in proper due diligence regarding the mortgage loans underlying the certificates it sold, CUNA Mutual said in its motion to compel Watterson Prime to produce the documents. RBS identified several third party companies--such as Watterson Prime, the Clayton Group, and the Bohan Group--to perform due diligence review in the form of loan-level re-underwriting, it said.

Southeastern CUs growth outpaces nation

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BIRMINGHAM, Ala. and TALLAHASSEE, Fla. (12/13/12)--Credit unions in Alabama and Florida continue to increase membership at a record pace--outpacing the rest of the nation, according to the League of Southeastern Credit Unions.

Through the first three quarters of the year, Alabama and Florida credit unions added a collective 165,000 new members. In the third quarter, Florida credit unions added 35,000 new members and Alabama credit unions increased their memberships by 16,000. Both states have a record number of members--4.7 million in Florida and 1.83 million in Alabama.

"Southeastern credit unions' membership is growing at 2.5%, which is higher than the national credit union average," said Patrick La Pine, president/CEO. "We've seen five straight quarters of record growth. Between the two states, nearly 250,000 new members have joined a credit union during this span. This is an unprecedented stretch of membership growth."

Members business lending (MBL) also remains strong among Florida and Alabama credit unions. Florida has grown its MBLs 7.9% through the three quarters, while Alabama has increased its MBLs 7.6%. Each state is above the national credit union average of 5.7% growth. That also represents a more than 5% increase in MBL growth over 2011.

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. CUNA and credit unions say that increasing the cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

Overall, lending also has improved as the economy picks up. Florida and Alabama credit unions saw 2% loan growth through the period--a significant gain since loan growth was negative the past two years in both states, the league said.

Delinquent loans and net charge offs are improving with each quarter. In Alabama, delinquent loans are at 1.3%--just above the national credit union average, while Florida delinquent loans are higher at 2.3%, but down considerably the past two years (2.86% and 3.16%). Net charge offs in Alabama are below the national average at 0.65%. Florida net charge offs are higher than the national average at 1.3% but again, well below the past three years (1.79%, 2.21% and 2.14%).

Asset growth in Alabama and Florida has been significant in 2012, the league said. Collectively, credit unions have added $3 billion in assets through the first three quarters, $500 million more than was added in all of 2011. Alabama credit unions are growing their assets slightly above the national credit union average and hold a record $17.6 billion in assets.

In Florida, asset growth is slightly below the national average; however, two years ago, asset growth in Florida was negative. Credit unions in Florida hold $45.5 billion in assets.

The net-worth ratio for Alabama and Florida credit unions is healthy, the league reported. Alabama credit unions have an 11% net worth ratio. Florida credit unions have a 10% net worth ratio for the first time in four years. A financial institution is considered well capitalized with a net worth ratio of 7%.

S C league meeting Going Above and Beyond

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COLUMBIA, S.C.  (12/13/12)--The South Carolina Credit Union League (SCCUL) has announced "Going Above and Beyond" as the theme for its 2013 Annual Meeting April 11-13 in Myrtle Beach, S.C.

The theme genre is "vintage circus," introduced in the league's humorous video teaser entitled, "The Carpool," on YouTube. It suggests league employees arrive together for work, then find it anything but "another day at the office." To see the video teaser, use the link.

The theme, inspired by staff exploration of key challenges for the in-state industry, reflects several characteristics of the South Carolina credit union movement, identified in a league strategic brainstorming process earlier this year.

The characteristics are:

  • A strong dedication to providing the best products and services for members, at times going above the call of duty;
  • The ability to overcome obstacles such as ever-changing regulations and compliance; and
  • Negotiating the everyday "balancing act" while reaching for new heights in innovation, membership growth, and better member service.
"This will be a celebration not only of our industry and the talent within each credit union, but of our strength and ability to work together for the next great service, capability, or training to help credit union members improve their lives," said Barbara Lehew-Bickley, SCCUL conferences and training director.

Gesa CU obtains naming rights to theatre

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WALLA WALLA, Wash. (12/13/12)--Gesa CU in Richland, Wash., and the Power House Theatre announced Monday they have entered into an 11-year, $1 million naming-rights agreement. The Power House Theatre will now be referred to as the Gesa Power House Theatre.

The agreement gives the $1.2 billion asset Gesa the exclusive naming rights to the theatre, including signage to be placed on the building following installation of a new roof. The new roof and other elements of the theatre's extensive remodeling project, will be funded largely through Gesa's financial commitment (Marketwire Dec. 10).

"Supporting a vibrant performing arts organization, such as the Power House Theatre, aligns with our credit union's core values," said Christina Lethlean, Gesa CU president/CEO.

Of Gesa's total $1 million commitment, $250,000 is to be used at fundraising events benefiting the theatre or specific capital campaigns designed to enhance the theatre's facilities as an incentive for matching future donors' contributions.

"The additional funds to be raised through the donation matching will assist the Gesa Power House Theatre in adding a new elevator to the north side of the building; restoring the original woodwork around the windows; adding heating, ventilation and air conditioning equipment; and adding technical infrastructure above the stage, while also providing for future operational growth," said Harry Hosey, the managing director of Power House Theatre.

U S mobile banking soars 50 in 2011

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MADISON, Wis. (12/13/12)--Mobile banking in the U.S. has soared 50% since 2011, according to a new global survey. Another survey found that marketing mobile banking can help credit unions and other financial institutions double the average adoption rates. And recent announcements indicate both credit unions and banks are taking advantage of mobile opportunities.

Asia has the highest mobile banking penetration, but survey respondents in the U.S. reported the highest frequency of use--an average 4.9 mobile transactions in the previous three months, according to Bain & Company's annual "Customer Loyalty in Retail Banking Report" for 2012.

Mobile banking is having the biggest impact on routine banking activities, said Bain, with 64% of mobile banking users in the U.S. saying that the future ability to use their smartphones or tablets to check account balances would be highly valued (Business Wire Dec. 11). Also, 41% of mobile banking consumers say that using their smart device for remote deposit capture through a digital image of an endorsed check would be highly valued, and 26% would value paying bills through their mobile device.

"Mobile banking presents profit-strapped banks with an opportunity to shift routine transactions from high-cost physical channels to much lower-cost digital channels," said Gerard du Toit, Bain financial services partner and lead author of the report.  "It also presents opportunities for banks to create more 'wow' experiences that use new digital technologies to delight customers and deepen customer loyalty."

The study found that across all banking models, U.S. mobile users report greater loyalty.

Marketing can significantly impact consumer adoption of mobile financial services, according to data provided by Mobiliti mobile banking and payments solutions and analyzed by Brookfield, Wis.-based Fiserv Inc. (Business Wire Dec. 12). 

Financial institutions that have actively marketed mobile banking have experienced an average adoption rate that is twice as high as financial institutions that have not promoted the service, said Fiserv. Within 12 to 18 months after launching Mobiliti, financial institutions that didn't market the service saw about 10% of eligible persons adopt mobile banking. Those who marketed the service saw adoption rates over 20% and in many cases over 30%, said Fiserv.

Credit unions and banks using Mobiliti have access to mobile adoption services from Fiserv to increase adoption and use of mobile banking, leading to a higher return on their mobile investment, said Fiserv.

"The focus on marketing mobile banking should be on educating customers--if customers understand how they can benefit from the service and how to get started, the convenience will compel them to extend the relationship with their financial institution to their favorite devices," said Steve Shaw, Fiserv vice president, strategic marketing, digital channels and electronic payments.

Bank of America has taken that advice to heart.  As part of a multi-pronged campaign to grow its mobile banking customers, it plans to outfit its teller stations with quick response (QR) codes that can be scanned by mobile devices to download the mobile app (American Banker Dec. 11).

The importance of mobile banking isn't lost on credit unions. A number in the past few months have announced various mobile banking services.

The latest is Michigan First CU, a more than $625 million asset credit union based in Lathrup Village, Mich. , which  announced Tuesday it had launched a new feature to allow mobile deposits for iPhone, iPad and Android mobile devices. Users of its mobile service can now take a photo of a check with their mobile device and deposit it directly into their checking or savings account.

"The use of mobile banking will continue to grow rapidly over the next several years, so we're investing in strengthening this technology for our members," said Michigan First President/CEO Michael Poulos. "You can't beat the convenience of snapping a quick photo with your phone to deposit a check. With today's busy lifestyles, we're constantly working to make the banking experience as fast and easy as possible for our members."

CU members targeted in scam

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BREMERTON, Wash. (12/13/12)--Kitsap CU (KCU) members were among those targeted by a phishing scam late Monday and Tuesday, but no members lost money or will have to close their accounts and open new ones, the credit union said.

KCU members received text message on mobile devices that stated their accounts required urgent attention. The messages asked them to contact a Florida telephone number (Kitsap Sun Dec. 11). Those who called were asked by an automated voice to punch in a series of numbers. Callers were first asked for the last four digits of their Social Security numbers. They were then asked for their 16-digit card numbers, expiration dates and personal identification numbers.

The Bremerton, Wash. credit union's security was not breached, and member funds and privacy are not at risk, said Mark Hughes, a credit union spokesman

Hughes told the Sun he did not know yet if members' personal identities were compromised.

KCU members within the 360 telephone area code on the Verizon Network appear to have been targets of the scam. Other Verizon customers who were not KCU members also were solicited, the Sun said.

Verizon told the newspaper it was checking on the reports.

Filene enters social media partnership

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CHICAGO and MADISON, Wis. (12/13/12)--The Filene Research Institute has partnered with QUEsocial, a social business enablement platform, to bring social media tools to credit unions nationwide.

The partnership will kick off in January with a pilot program that includes 50 credit unions using QUEsocial's platform, Filene said.  

The program "will provide individual credit unions and their employees with everything they need to use social media as effectively in their everyday work," Filene said. Features of the program include:

  • Exclusive Filene customized e-learning to help employees develop the skills to use social media effectively for specific job functions;
  • Content distribution that delivers relevant content to employees via short messaging service or e-mail for easy sharing to their social channels;
  • Gamification that motivates and rewards employees to convert social media activity into business outcomes; and
  • Business metrics that integrate with salesforce.com, recruiting tools, and other enterprise systems to demonstrate real return on investment.
"Our research demonstrates that social media has become an expectation for consumers today," said Mark Meyer, Filene CEO. "Credit unions that utilize social media for engagement can drive stronger business results across functional areas including recruiting, marketing and public relations and member service." 

QUEsocial is a social business solution that extends beyond marketing and enables organizations to benefit from the power of their employees' social networks, he added.

Illinois league role was key in fast-track foreclosure bill

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NAPERVILLE, Ill. (12/13/12)--The Illinois General Assembly (IGA) last week passed SB16, a measure that establishes a "fast-track" expedited foreclosure process to address the issue of abandoned residential properties in Illinois. After nearly two years of negotiations, the Illinois Credit Union League (ICUL) played a key role in advancing the legislation.

The bill, which will be sent to Illinois Gov. Pat Quinn for his signature, balances the interests of consumers, lenders and local governments and provides a solution for abandoned properties, ICUL said.

Key elements of SB16 include:

  • Establishment of a "fast-track" expedited foreclosure process. The fast-track concept has been a key focus and a fundamental priority for ICUL. The league worked with sponsors to "fine-tune" the mortgage foreclosure process to make it more efficient and expedient, and avoid provisions that penalize lenders (and, ultimately borrowers) through increased fines and penalties. SB16 accomplished those goals by allowing lenders to shorten the foreclosure process for abandoned properties by roughly 18 months. As a result, lenders will obtain title to these properties more quickly and assume responsibility under applicable ordinances to maintain and secure them, which will be good for neighbors, neighborhoods, and local governments, ICUL said.  Lenders also will acquire properties that are less damaged and deteriorated and that can be sold for more, and they will save 18 months of costs, such as property taxes, insurance and loan-servicing fees. The negotiated language includes a more efficient foreclosure process for lenders and protections for consumers, ICUL said.
  • Funding for remediation of abandoned property and pre-foreclosure counseling. An additional residential foreclosure filing fee will provide support for local governments and struggling homeowners. Institutions that have filed 175 or more foreclosures during the preceding calendar year will pay a $500 fee, those with 50-174 foreclosures will pay $250, and institutions with less than 50 foreclosures will pay $50. Most credit unions and community banks will pay the $50 fee, ICUL said. The fees are expected to generate about $41 million, with $28 million going toward abandoned property clean-up, and the remainder for housing counseling for homeowners. The fees will be remitted by the court clerks to the State Treasurer. The Illinois Housing Development Authority will then draw upon the funds to make grants to local communities and housing counseling agencies statewide.
  • Bankruptcy relief provision. SB16 also contains language that clarifies that a portion of the Conveyances Act is permissive, not mandatory, so it cannot be used to affect the validity or priority of a properly recorded mortgage by a trustee in bankruptcy. That provides a benefit to every Illinois credit union by protecting against the avoidance of mortgage liens in bankruptcy proceedings, ICUL said.
Additional provisions of the bill clarify the method of delivering foreclosure notices to municipalities, and require delivery of the notices to Chicago aldermen. The measure also directs lenders to notify the insurance company for the property, after confirmation of the property's sale. Further, the bill protects lenders and their agents from criminal and civil liability when entering, securing or maintaining abandoned residential property.

Foreclosure has been an overarching focus during the 2011 and 2012 spring sessions of the IGA. Although it was widely acknowledged by lawmakers that credit unions were not the cause of the crisis, many measures were introduced to address the issue. SB16 represents a compromise solution that will not only benefit credit unions but also the citizens of Illinois, ICUL said.

"SB 16 received the support of the Illinois Attorney General, the Speaker of the House, and both chambers of the Illinois General Assembly," said Stephen R. Olson, ICUL executive vice president and general counsel. "Throughout the process, the excellent reputation and respect credit unions have earned with legislators were very apparent. The support of Illinois credit unions played a key part in helping to pass this critical measure."

CU System briefs (12/11/2012)

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  • PORTLAND, Maine (12/12/12)--A woman who pleaded guilty to driving the getaway car in five bank and credit union robberies in Portland, Maine, earlier this year has been sentenced to more than four years in prison (Associated Press Newswires Dec. 11).  Maria Mattson, 31, of Westbrook, Maine, also was sentenced to three years of probation.  She was charged with aiding and abetting bank robbery, conspiracy to commit bank robbery and aiding and abetting interference with commerce by robbery.  Her co-defendant, Paul  Sans, 30, Westbrook, pleaded guilty in October to several counts of bank robbery and will be sentenced in January.  The robberies occurred in January and February and included robberies of Orono-based University CU's Portland branch; Portland-based TruChoice CU, and Portland-based Evergreen CU's Windham branch (News Now Aug. 3) …
  • ATLANTA, Ga. (12/12/12)--A former postal workers union official pleaded not guilty in a federal court in Macon, Ga.,  to embezzling more than $13,000 from the union's Athens local and submitting false statements to get a loan from a credit union in the union's name.  Joseph Allen was charged with fraud that allegedly occurred between October 2005 and May 2008 while he was treasurer of Local 588 of the National Association of Letter Carriers in Athens.  According to court documents, Allen allegedly used the union's name to obtain a $10,000 loan from Atlanta Postal CU and allegedly submitted fabricated minutes of a meeting in which union members allegedly approved applying for a loan. No meeting was held. He is charged with one count each of bank fraud, making a false statement to a credit union and filing a false report, and six counts of embezzlement  (Athens Banner-Herald Dec. 5) …

CEFCU Wright-Patt announce 15M in dividends

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PEORIA, Ill., and FAIRBORN, Ohio (12/12/12)--Two credit unions--one in Illinois, one in Ohio--announced they have paid their members patronage dividends totaling a combined $15 million.

CEFCU in Peoria, Ill., distributed a record extraordinary dividend of $9 million to its members, based on their savings and loan activities during 2012. About $4.5 million went to borrowers and $4.5 million to savers.  The amount received by each member is determined by dividends earned and interest paid during during the first 11 months of the year, as of Nov. 30.

The dividends were distributed Tuesday. For the past 13 years, CEFCU has returned $63 million in extraordinary dividends to its members. CEFCU has nearly $4.8 billion in assets and serves more than 290,000 members.

Wright-Patt CU, based in Fairborn, Ohio, also announced it will pay more than $6 million in the form of a special patronage dividend to 230,000 members on Jan. 3.

This year's dividend represents an increase of more than $1 million over last year's dividend, said the $2.4 billion asset credit union. Since it began distributing dividends in 2008, the credit union has returned more than $22 million to members.

To be eligible, Wright-Patt members must be in good standing both currently and at the payment date. The amount depends on the number of service relationships the member has with the credit union.

Expect new wave of cyberattacks vs FIs

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MADISON, Wis. (12/12/12)--Banks are bracing for a new set of prolonged Denial of Service (DOS) cyberattacks. A group that claimed responsibility for global DOS attacks against about a dozen banks in September warned Monday it has targeted five big banks for electronic attacks soon.

The group, called al Qassam Cyber Fighters Group, said Monday it will target JP Morgan Chase, Bank of America, U.S. Bank, PNC Financial and SunTrust in phase two of an operation it began in September against banks in retaliation for a trailer shown on YouTube of an anti-Muslim film made in America (American Banker Dec. 11).

The attacks will increase in breadth and in the number, with repeated attacks, said a message posted on a computer programmers' website.

Already customers of BofA were reporting sporadic issues getting access to their online accounts Monday, with some reports trickling in Tuesday (Charlotte Observer Dec. 11). However, it wasn't known whether the al Qassam Cyber Fighters Group was responsible.  BofA was the first bank hit in the September epidemic.

The attacks in September were termed "unprecedented" because of their speed and scale. They flooded lines that connect banks to the Internet and prevented customers from gaining access to their accounts, said the Banker.  The U.S. government had said at the time the earlier attacks may have come from Iran.

PNC CEO James Rohr, in an interview on CNBC in October, said the bank had 38 hours of attacks on its systems--the longest attack amongst the banks targeted--and that the attacks "pummeled us"  (Pittsburgh Tribune-Review Dec. 11).

Other banks hit with that type of attack in September and October included BofA, Wells Fargo, U.S. Bank, JP Morgan Chase, Capital One and BB&T, said the Pittsburgh  newspaper.  The American Banker also named two other banks hit: HSBC and Regions Financial.

The attacks are not part of Team GhostShell, a group of hacktivists claiming responsibility for hacking into the websites of 30 companies, organizations, U.S. government agencies and trade associations, including the Credit Union National Association (CUNA), earlier this week. CUNA advised its website users that no sensitive information was accessed or otherwise compromised and it advised taking precautionary steps, such as changing their passwords for www.cuna.org.

Belvoir FCU prepares for fiscal cliff

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WOODBRIDGE, Va. (12/12/12)--Belvoir FCU, Woodbridge, Va., said Tuesday it will offer its members assistance loans in the event of a fiscal cliff.

Members can borrow up to $5,000 at an annual percentage rate of 4.99% for one year with a 60-day deferment, according to the credit union's website. Also, Belvoir FCU will facilitate loan workouts and skip-a-pay options for members so they do not default on their loans.

The credit union will provide financial coaching services to members in need of guidance.

The 2013 fiscal cliff refers to the U.S. economy succumbing to an estimated $600 billion in tax increases and spending cuts, which will automatically go into effect Jan. 1 unless Congress can come to an agreed-upon budget.

"We hope a fiscal cliff is averted and Congress comes to an agreement," said Patricia Kimmel, Belvoir FCU president/CEO. "However, if a compromise is not reached, Belvoir Federal stands ready to serve our members who are impacted by providing financial options and services to assist them during this challenging time."

New satisfaction index CUs top banks

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ANN ARBOR, Mich. (12/12/12)--Credit unions in the U.S. again topped banks in member/customer satisfaction levels, according to the most recent nationwide survey released Tuesday by the American Customer Satisfaction Index (ACSI).

Credit unions remain best-in-class for financial services and set the bar for customer satisfaction among all service industries covered by the ACSI. The survey has garnered coverage by national media, including CBS News, The Los Angeles Times and The Boston Globe.

However, as credit unions continue to welcome members who are leaving banks behind, the industry has not been able to sustain the same level of service as before: member satisfaction dipped 5.7% to 82, the survey said. That score is still five points higher than the banks' average of 79.

"The large influx of new customers for credit unions, many of whom left banks because of rising fees, poses new challenges for customer service," says Claes Fornell, ACSI founder and author of The Satisfied Customer: Winners and Losers in the Battle for Buyer Preference. "The question becomes, How to best serve a fast-growing customer franchise? The more customers you have, the more difficult it gets."

Customer satisfaction with banks regarding checking, savings and loan services grew by 2.7% to 77, mostly due to client satisfaction for smaller banks. The nation's largest bank, JPMorgan Chase, was the only big bank to increase customer-satisfaction levels. Small banks--stable at an ACSI score of 79--continue to outclass large banks and capture market share because of it.

"As more customers move from large banks to smaller banks and credit unions, the overall customer satisfaction level for banks goes up as a matter of mathematics," says Fornell. "As the smaller banks do a better job with customers and therefore attract more of them, customer satisfaction for banks on the whole gets a boost."

JPMorgan Chase leads among big banks. With a 6% rise to an ACSI score of 74, the bank matches its prerecession result from 2007. Other big banks have to deal with deteriorating customer satisfaction. Wells Fargo slid 3% to 71, and Citigroup retreated 4% to 70. Bank of America (BofA) declined 3% to 66, reaching its lowest level of customer satisfaction in over a decade.

"The total fees from overdraft charges alone in 2011, most of them from big banks, amounted to more than $30 billion," says Fornell. "[Consumers] increasingly are rejecting the ever-mounting fees charged by large banks and taking their business to credit unions instead. BofA, in particular, stands out as the only bank that is still below its prerecession customer satisfaction level. It is clear that this is mostly because of fees. Customer satisfaction was probably set to deteriorate further as additional fees were in the making until a few weeks ago, when BofA backed away from the idea."

To read the ACSI survey release, use the link.

In a separate matter, credit unions in Seattle have passed BofA to become the No. 1 financial institution choice in the Seattle area (The Seattle Times Dec. 11).

Currently, 28% of Seattle-area households primarily conduct financial services with credit unions--up from 21.5% in 2008, according to research done by The Seattle Times news librarian Gene Balk. BofA fell to 23.9% from 29.7% in 2008. To read the blog post and financial institution statistics, use the link.

N J league MBLs important to Sandy recovery

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HIGHTSTOWN, N.J. (12/12/12)--In the wake of Hurricane Sandy, credit unions' push to raise their member business lending (MBL) cap and their opposition against banks' efforts to extend the Transaction Account Guarantee (TAG) unless married with MBL provisions have taken on new meaning for credit unions in New Jersey.

So wrote New Jersey Credit Union League President/CEO Paul Gentile in a column entitled "Many Small Businesses Left Crippled in Sandy's Wake; MBL Cap Increase Could Spur Recovery"  in CUinsight (Dec. 11).

Gentile noted that banks have no problem lobbying against raising credit unions MBL cap to 27.5% of assets from the current 12.25% while at the same time many avoid low-dollar business loans that credit unions thrive on.

"Here in New Jersey, we often see banks refer small dollar loans to credit unions. And vice versa, credit unions refer big dollar business loans to local banks. There's nothing wrong with that. That's good for the community." He said the banks' message on Capitol Hill "doesn't reflect what's happening on the ground."

"For us here in the great state of New Jersey, the hypocrisy of the banks' arguments against raising the MBL cap is particularly galling," he wrote.

"We will be dealing with the aftermath of Hurricane Sandy for many years, and there are thousands of small businesses on the New Jersey Shore and inland that have been devastated," Gentile wrote. "They need credit to get their businesses back up and running. Insurance policies have limits. FEMA caps out. These businesses need capital to get back in shape. In many cases the dollar amounts will be $200,000 and below. New Jersey credit unions are ready, willing and able to meet this need, but the cap looms and acts as a governor to small business growth," he continued.

To strongly oppose the new bank bailout while supporting MBL reform, Gentile said, credit unions must focus on their strong point: their structure and what it means to the member (value).

Gentile suggested continuing to tell the credit union story to lawmakers and change the arguments from what the agenda means for banks and credit unions, to what it means for consumers and businesses.

"Credit unions are good for consumers, small business and the overall economy," he said. "Anyone who argues against that is more worried about the bottom-line than spurring the economic growth the country so sorely needs."

The Credit Union National Association and the nation's credit unions are urging Congress to raise the MBL cap so they can inject $13 billion in new small business loans into the economy. Raising the cap would help create 140,000 new jobs in the first year, at no expense to taxpayers.

See related News Now story, "CUNA urgest CUs: Continue to oppose stand-alone TAG bill."

To read the full column, use the link.

Operations during mergers discussed in OpSS Council paper

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MADISON, Wis. (12/12/12)--A new white paper from the CUNA Operations Sales and Service Council outlines the tricky process of meshing operations during the credit union merger process.

"There are always going to be differences in your members, in your locations and in some products and services you offer," said Steve Miller, director of operations/senior analyst for Twenty-Twenty Analytics, Coral Gables, Fla., a CUNA Strategic Services provider. Miller is one of the experts interviewed in the paper, titled "Mergers from an OpSS Perspective." "You need to understand what the differences are and how both credit unions coming together can be better," he added.

The white paper shares merger leaders' perspectives on creating a combined culture; making key operations decisions; addressing human resources issues; communicating with employees, members and other audiences; and understanding the timeline for blending operations.

As merging credit unions make choices that affect culture, delivery channels and related issues, operations executives and managers are likely to be assigned the role of reconciling differences and creating a seamless experience for members. Shaping the member experience is a key part of the continuing credit union strategy and can be achieved only by resolving operational issues, the paper said.

"Every move you make is strategic," said Mina Worthington, president/CEO of $484 million Solarity CU, Yakima, Wash., which was created by a "merger of equals" between Catholic CU and Yakima Valley CU in 2011. "Every move must be thought through for all of the alternatives and everything that could happen."

Pre-merger due diligence typically delves deeply into the strength of the loan portfolio. But it also reveals critical information about cultural differences, operating differences, communication strengths and weaknesses, human resources and other issues. The operations teams can get a head start on addressing key issues through the information gathered by the due diligence process.

When a credit union is forced to merge, observers often assume it's due to bad loans. But several operations leaders noted that inefficient operations can also pull down financial performance and create an underachieving organization. Merging with a credit union with substandard operations can create multiple issues.

In situations where operations are troubled, all parts of the business must be analyzed and acted upon quickly to correct underperforming areas. At the same time, experienced merger leaders recommend a policy of being open and honest with the board, executives, and employees of the merging credit union about the challenges and changes implemented.

To download the white paper, use the link.

In-house vs as a service topic of Tech Council paper

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MADISON, Wis. (12/12/12)--A new white paper from the CUNA Technology Council, "In-House or 'As a Service'" examines how the roles of information technology (IT) professionals are shifting, along with ever-changing technology at credit unions.

There's no doubt that the cloud and virtualization are playing increasingly greater roles in credit union technology plans. Whether they use these options today or plan to within the next decade, credit unions agree the trend is toward off-site hosting, the paper said.

Credit unions today have to be even more technology-savvy, to ask service providers and partners the right questions and to stay on top of tech challenges and potential off-site problems, the council paper added.

It appears the key is to determine the right time to make the shift--considering each operational need as it arises, and balancing costs with control and security with flexibility. The ultimate goals are to serve members' needs and demands, while maintaining privacy and protection of members' personal financial information.

While this new landscape holds promise, it can also be risky, said Jay Liebe, executive vice president, development, for Switch Communications Group. Switch is a CUNA Strategic

Services alliance provider. Many vendors that provide cloud computing services

are new to serving financial institutions and providing infrastructures that deliver 100%

uptime, Liebe said.

Before outsourcing any IT functionality, Liebe says credit unions should ask vendors:

  •  Where is the data housed?
  •  What type of equipment is offered?
  •  How is the data center protected from security threats?
  •  Does the vendor's location protect the credit union's data?
  •  Who owns the data center and what is their area of expertise?
  •  How is the vendor preparing for growth?
  •  Is the company financially stable?
Due diligence is key, and inexperience can be risky, Liebe said.

To see the paper, use the link.

Minn CUs find ally in new congressman

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ST. PAUL, Minn. (12/12/12)--
Click to view larger image U.S. Rep.-elect Rick Nolan (D-Minn.), right, Friday discussed member business lending and supplemental capital with Minnesota credit union representatives, including, from left: Pat Pierce, president/CEO of City & County CU, St. Paul, and Tim Smith, president/CEO, Lake State FCU, Moose Lake, during a meeting coordinated by the Minnesota Credit Union Network. (Photo provided by the Minnesota Credit Union Network)
Newly elected U.S. Rep Rick Nolan (D-Minn.) has declared himself  "a big believer of credit unions," according to the Minnesota Credit Union Network (MnCUN).

"I have always been a big believer of credit unions--of your mission and of your work on behalf of consumers," Nolan said during an introductory meeting Friday with Minnesota credit unions. MnCUN coordinated the event to help form the foundation for a positive working relationship with Nolan.

Focusing on the issues facing the state's credit unions, the group highlighted the movement's advocacy efforts urging Congress to raise credit unions' member business lending (MBL) cap and to pass supplemental capital legislation.

Credit union representatives shared stories about small businesses they helped during the recession and highlighted how they could help more Minnesotans if the MBL cap were raised to 27.5% of assets from 12.25%. They told Nolan that raising the cap would create nearly 2,000 jobs in the state and enable credit unions to inject an additional $150 million available for small business loans in the state.

(The Credit Union National Association says that raising the MBL cap would generate $13 billion in new small business loans and generate 140,000 jobs in the nation.)

Nolan praised credit unions for their ideas and the role they play in their communities. He acknowledged how credit union operations differ from other financial institutions and applauded the state's credit unions for their work with small businesses.

"The congressman's values closely align with the credit union mission," said Mara Humphrey, MnCUN vice president--governmental affairs, noting that credit unions "look forward to working with him during the next congressional session."

CU System briefs (12/10/2012)

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  • DETROIT and TEMPERANCE, Mich. (12/11/12)--A federal jury Friday found two Toledo, Ohio men guilty of robbing a Monroe County CU, in Temperance, Mich. in 2009. Quentin Sherer and Martin Tucker, both 33 years old, were found guilty after a week-long trial before U.S. District Court Judge Robert H. Cleland, according to U.S. District Attorney Barbara McQuade (CBS 62 Detroit and ClickonDetroit.com Dec. 8). Two men wearing masks and hooded sweatshirts entered the credit union on July 16, 2009, armed with semi-automatic pistols. Sherer allegedly demanded money while pointing his gun at one teller while Tucker was accused of pointing a gun at a member at another teller window and also demanding money. The two suspects ran out of the credit union with $6,000 to an awaiting car. A member followed the getaway car to Toledo, Ohio, where the suspects abandoned the car in a private driveway.  Tucker, a boxer, was arrested after the Federal Bureau of Investigation matched his DNA to that on a Q-tip nose swab taken during a boxing match in Toledo …
  • WEST JORDAN, Utah (12/11/12)--Mountain America CU President/CEO Sterling Nielsen is the newest member of the Western CUNA Management School (WCMS) Board of Trustees. He will join eight credit union CEOs, two league presidents, the WCMS president and WCMS provost on the board, which is responsible for oversight and direction of the school.  Nielsen has worked the past 17 years at the $3.4 billion asset, West Jordan, Utah-based credit union. Nielsen serves on the boards of Utah Credit Union Association, CUDL and CO-OP Shared Branching. WCMS serves 13 western states and is sponsored by the leagues and associations of those states, in cooperation with Pomona College in Claremont, Calif. …
  • HARRISBURG, Pa. (12/11/12)--Robert J. McCormack Sr., former Pennsylvania Credit Union Association (PCUA)  board chairman and chairman of the Scranton Times CU, died Sunday at the age of 83, according to PCUA  (Life is a Highway Dec. 10). He was employed by the Times for 42 years and served on the credit union's board for 20 years. In addition to serving as a director and board chairman at PCUA, McCormack was the founder and initial chairman of the Pennsylvania Credit Union Foundation. "Bob was one of the strongest leaders the league/association has ever had," said PCUA President/CEO Jim McCormack. "He was responsible for the development of the...foundation, and particularly the grant and fundraising initiatives...Bob will be missed at all levels of the credit union movement and by his family and friends." He is survived by his wife, Dorothy; five daughters; two sons; two brothers; nine grandchildren; and four great-grandchildren …

CUNA notifies website users of broad hacking attack

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WASHINGTON and MADISON, Wis. (12/11/12)--The Credit Union National Association (CUNA) is advising thousands of users of its website that no sensitive personal information from cuna.org was accessed or otherwise compromised in a hacking attack that--in addition to CUNA--also affected 30 or more additional organizations, U.S. government agencies, industry and other trade associations.

Among the other groups reportedly affected: NASA, General Dynamics, European Space Agency, the California Manufacturers & Technology Association, and the Texas Bankers Association.

The attack was conducted by Team GhostShell, a group that specializes in such security breaches--in an effort, it claims, to protest and draw attention to "the freedom of information on the net."  It is estimated to have resulted in gathering 1.6 million accounts and records in total from all of the organizations that it hacked.

"We do not believe any sensitive personal information from our website was accessed," said CUNA President/CEO Bill Cheney. "However, we are contacting all users of our website to advise them of the breach. Further, we will continue to analyze the information posted on-line by the group, as well as continue to validate that no other risks exist. We will also continue to monitor our website and take increased security measures to ensure it is safeguarded."

Cheney emphasized that no information from members of credit unions was compromised as part of this breach. (That's contrary to a report published on the Web stating that the breach "puts over 85 mil. people at risk.") "CUNA.org stores no consumer-member data," Cheney said. "Further, CUNA does not store any information for individual consumers who are credit union members."

The CUNA leader said the information on the association's website that was hacked was user ID information (generally e-mail addresses, phone numbers, titles and business addresses), as well as some encrypted password information from more than five years ago.

CUNA is advising users of its website to take some precautionary steps, however, including changing their passwords. "We advise anyone who has a CUNA log-in account or uses the same e-mail address as a login ID for other online sites (not associated with cuna.org)  to change the password," Cheney said. "Our CUNA website will be prompting users to change their passwords as well."

CU READ exam survey finds new issues reg burden

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HIGHTSTOWN, N.J. (12/11/12)--Credit unions continue to feel the resource strain from increased regulatory burdens, with many indicating they are seeing items show up in their Documents of Resolution (DOR)  that they have never seen before.  Those are two of the results of the Credit Union Regulatory Examination Assistance and Development (CU READ) survey of Region II credit unions.

The CU READ survey is a quarterly survey. The New Jersey Credit Union League conducted  first and second quarter regulatory and examination surveys on what credit unions experience during the exam process. The league's survey has since evolved to include other leagues from Region II (California/Nevada, Delaware, Maryland and District of Columbia, Pennsylvania, Virginia and West Virginia).

The CU READ survey is separate from a similar, national joint survey being conducted by the Credit Union National Association (CUNA) and the leagues to compile a complete picture of current examination processes and to assist them in honing advocacy efforts for credit unions before regulators on exam-related issues.

CU READ's third quarter findings for Region II focused on topics such as application of excessive DORs, the level of satisfaction with them, examiner time management issues and flexibility throughout the exam process. 

Survey respondents said that DORs continue to be heavier than in years past:

  • 64.4% of responding credit unions were presented with a DOR in their last exam.
  • 55.9% of respondent credit union leaders "strongly agree" and "agree" they are seeing items in their DORs that they have not ever seen before.
  • 54.6% indicated that they agree or strongly agree that items showing up in DORs (no evidence of violation of regulation/state or federal law) are much heavier than ever before.
  • 80.8% "strongly agree" and "agree" that heavier regulatory/exam requirements increased pressure on credit union resources.
National Credit Union Administration (NCUA) examiners scored high for professionalism and knowledge.

Exam positives included:

  • Examiners received high marks for professionalism and helpfulness, with both categories receiving a 45.8% ranking them as good and 33.7% ranking them as excellent;  44.6% said their examiner(s) were good in terms of fairness and 33.7% in objectivity.
  • 51.8% of respondents agree that examiner(s) were knowledgeable about the credit union and 57.8% about key Safety and Soundness issues and regulatory requirements.
In terms of exam length and scheduling issues:

  • 27.9% of respondents said their on-site exams lasted 13 days or more, while another 45.2% responded that their exam lasted exactly from four to nine days.
  • 48.1% of respondents strongly agree and agree that they have experienced examiners changing the exam date and time to accommodate the examiner's schedule.
The Region II leagues/associations will continue to collaborate and intend to produce a

CU READ 4th Quarter Survey to be released sometime in January 2013. At the state level, the NJ READ group will continue to communicate with NCUA to further facilitate positive change and implementation of solutions that make sense, said the New Jersey league.

In CU READ, "the crux of the survey is to utilize the results to work constructively with regulators on both how to improve the exam process and find areas ripe for regulatory relief, as well as give credit unions tools to deal with emerging issues," said New Jersey league President/CEO Paul Gentile. He noted this is "not a 'gotcha' tool against regulators. It's also helping us identify what is going very well in exams and could be broadened out."

The similar national CUNA/leagues survey is live online (use the link). The deadline for completing the survey is Dec. 15, but more time to complete and file may be made available to credit unions dealing with the holiday rush.

"Advocating on behalf of credit unions to improve the examination process is one of the highest priorities of both CUNA and the leagues," said CUNA President/CEO Bill Cheney. "A firm grasp of the current state of credit union examination process is needed to ensure that credit unions are effectively represented in discussions with the NCUA and state supervisory authorities."

The nationwide survey covers such topics as the length of the on-site exam, how satisfied the credit union was with the exam and results, and which problem areas, if any, were noted by the examiner. It also asks questions to gauge how the credit union perceived the examiner's performance and the exam process, and asks what are the biggest issues credit unions would like CUNA and their leagues to focus on to reduce reg compliance burdens.

The exam results will serve as a tool for CUNA and the leagues to work constructively with regulators on improving the examination process and ensuring consistency in how examiners apply regulations.

November bankruptcies drop 12 from last year

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ALEXANDRIA, Va. (12/11/12)--Total U.S. bankruptcy filings for November decreased 12% from November 2011, the American Bankruptcy Institute (ABI) said.

November bankruptcy filings--commercial and noncommercial--totaled 86,946, down from the 98,534 filings registered in November of last year, according to data provided by Epiq Systems.

Total commercial filings were 4,199--a 19% decrease from the 5,216 filings during the same period in 2011.

The 82,747 total noncommercial filings for November were an 11% drop from last November's noncommercial filing total of 93,318.

In the aftermath of a sustained drop in consumer spending on credit, November continued the trend of declining bankruptcies, said ABI executive director Samuel Gerdano (Subprimenews.com Dec. 10).

The U.S. is on track to see the lowest total new bankruptcies since before the financial crisis in 2008, he added.

Last month's 664 commercial Chapter 11 filings were a 10% rise from the 601 commercial Chapter 11 filings in November 2011. Last month's total commercial Chapter 11 filings also constituted a 23% increase from the October total of 542. Total, commercial and consumer bankruptcy filings in November also declined from October.

Total November filings were down 14% from the October's total of 101,307. Commercial filings dropped 13% in November from the October total of 4,800, and noncommercial filings decreased 14% from 96,507.

The average nationwide per capita bankruptcy-filing rate through the first 11 months of 2012 was 3.91 total filings per 1,000 per population.

Average total filings per day in November were 2,898, compared with the 3,285 total daily filings in November of last year--a 12% decline.

N Y CUs take steps to grow Hispanic membership

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DES MOINES, Iowa (12/11/12)--Four New York credit unions are taking steps to serve Hispanic members in the inaugural Hispanic Member Growth Strategy Program, a program of the Credit Union Association of New York (CUANY) and Coopera.

Coopera, a firm that helps credit unions reach the critical Hispanic market, will provide resources and counseling to New York credit unions working to grow their Hispanic membership in the program.

The program helps small (assets under $25 million) and mid-sized ($25 million to $500 million in assets) New York credit unions expand their business opportunities by serving the Hispanic market, according to Coopera CEO Miriam De Dios.

"Today, 17% of New York's population is Hispanic," De Dios said. "And by 2025, one in five New York residents will claim Hispanic heritage. Because it is a largely underserved group, yet one of the largest and fastest-growing demographics in America, helping Hispanic members navigate the U.S. financial system is important to the overall credit union mission."

Through the program, Coopera works with the credit unions to identify Hispanic outreach opportunities in their neighborhoods and create affordable banking alternatives to meet the needs of this community. Credit unions participating in program include:

  • Cooperative FCU of Syracuse;
  • Entertainment Industries FCU of New York City;
  • Bridgeway FCU of Poughkeepsie; and
  • MSBA Employees FCU of Rockville Centre.
Compared with other U.S. ethnic groups, the Hispanic population is very young, according to Allison Barna, director of the New York Credit Union Foundation and Community Development for the association.

"New York credit unions looking to lower the average age of their membership must consider investing in these members as a part of their overall efforts," Barna said, noting that the program "gives them access to Coopera's expertise, including identifying outreach opportunities within their neighborhoods, as well as creating affordable banking alternatives to meet the needs of Hispanic members within their community, at a significantly reduced price."

Wright-Patt CU sees record year in home loans

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DAYTON, Ohio (12/11/12)--Fairborn, Ohio-based Wright-Patt CU has experienced a recording year mortgage loans--and gained a greater market share in the process--thanks in part historically low interest rates and an improved home-sale market.

Through the end of October the $2.5 billion asset Wright-Patt CU closed more than 3,000 loans for refinances and new home purchases for the year--a 46% increase from the prior year, said Tim Mislansky, chief lending officer of Wright-Patt (Dayton Daily News Dec. 8).

Wright-Patt CU is have a better year than it expected because it is taking market share from other financial institutions, Mislansky said.

Wright-Patt CU grew to be Dayton's third largest mortgage lender in 2011, according to analysis of Home Mortgage Disclosure Act data provided by Mislansky. Four years ago, Wright-Patt was the eighth-largest lender in the Dayton area.

The growth caused Wright-Patt CU to add about 20 mortgage lending jobs this year, bringing its mortgage staff to 91 employees. It has 10 positions open.

About 2,000 of Wright-Patt CU's 3,000 home loans were refinances. Purchase volume, about 1,000 loans, increased 53% this year from 2011.

Low rates also have helped Day Air CU of Kettering, Ohio, have a record mortgage-lending year, according Bill Burke, the credit union's president/CEO.

There has been a lot of refinance activity because of low rates, but Burke likes to see purchase activity because it means people are buying houses, he told the Daily News.

While credit unions built their reputation on car loans, Wright-Patt has made efforts to establish a presence in the Dayton mortgage market, Mislansky said.

The credit union partners with local housing programs such as the federal Neighborhood Stabilization Program and the HomeOwnership Center of Greater Dayton. It was a presenting sponsor of this year's Eco-Rehabarama home show in Huber Heights with the Home Builders Association of Dayton. In June, Wright-Patt and Irongate Inc. Realtors of Centerville, a real estate firm, formed a new mortgage company making Wright-Patt the preferred home lender to Irongate's clients.

Mich CUs gain market share ramp up lending

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LANSING, Mich. (12/11/12)--Credit unions are increasingly becoming the financial service providers of choice for Michigan consumers, according to an analysis of third-quarter data by the Michigan Credit Union League & Affiliates (MCUL).

Michigan has 4.53 million credit union members, a 1.3% increase since the end of 2011, according to the National Credit Union Administration. With 84,000 new members so far this year, Michigan credit unions are on their way to the largest annual increase in at least eight years, MCUL said.

For the 12-month period ending Sept. 30, deposits at Michigan credit unions increased by more than $2 billion or 5.6%. Credit unions now have 18.6% of the state's deposit market share, compared with 16.2% in 2009, according to an analysis of data for all Federal Deposit Insurance Corp.-insured bank branches operating in the state. That represents a significant shift of business away from banks and toward credit unions, as total deposits at credit unions over that time period are up more than $6.1 billion or 19.5%, MCUL said.

The third-quarter data also show other high points:

  • Net worth at Michigan's credit unions is back up above 11%, from 10.82% one year ago;
  • Return on assets is up to .97%, compared with .66% one year ago; and
  • Loan delinquencies are down to 1.13% from 1.48% one year ago.
"Michigan consumers are turning to credit unions in record numbers to take advantage of the better rates, lower fees, and superior financial products and services we offer," said MCUL CEO David Adams.

"Credit unions have developed and cultivated innovative ways to reach out to build relationships with members and to help the people of the state prosper, and that's why more and more Michigan consumers trust credit unions with their hard-earned money," Adams said. "In addition to financial counseling, credit unions offer programs such as SaveUp and Save to Win, which reward members for saving their money and paying down debt. This approach is what sets credit unions apart."

Overall lending at Michigan credit unions rose by 1.4% in the third quarter, the highest increase in at least nine quarters. In particular, the third quarter of 2012 was the best quarter in three years for new-auto loans at credit unions, which rose by 2.4%. Used-auto-loan growth also was strong at 2.7%.

Michigan credit unions also are gaining auto-loan market share, according to data from Experian AutoCount, which tracks loan data registered with the Michigan Secretary of State. In the third quarter 2011, credit unions accounted for 10.4% and 35.2% of new- and used-auto loans, respectively. In the third quarter of 2012, those figures rose to 15.7% and 37.8%, respectively.

Year-to-date mortgage loans issued by Michigan credit unions are nearly double where they were this time last year, totaling $3.2 billion, as consumers continue to refinance with historically low interest rates.

Michigan credit unions' member business loans were up 4.8% in the third quarter, far ahead of the national rate of 2.3%, MCUL said.

"Credit unions could do even more to help if Congress would act on S. 2331, the Small Business Lending Enhancement Act, which would raise the current cap on how much credit unions can lend to small businesses," said Adams. "It's critical for Congress to pass this bipartisan, commonsense legislation now so our nation's small businesses can create jobs and renew our economy's vitality."

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25% so that more loans could be made to small businesses. CUNA and credit unions say that increasing credit unions' MBL cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

CUs loans help 670 members with Sandy recovery

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WARMINSTER, Pa. (12/11/12)--Freedom FCU, with $574 million in assets, Warminster, Pa., has helped 650 members affected by Hurricane Sandy by issuing more than $650,000 in low interest rate loans.

Members could borrow up to $1,500 and were approved quickly so they could begin to recover from the storm, the credit union said.

"Words can't express enough my gratitude for this service at such a time like this," said Janice Jones, a Jefferson Hospital employee said. "Thank you again for all that you have done."

Radio group grows thanks to CU MBL

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LONGVIEW, Wash. (12/11/12)--Fibre FCU, Longview, Wash., recently provided a member business loan (MBL) that helped a local radio company add a third brand.

Joel Hanson literally grew up in the radio business. He was just a year old when his family put KLOG on the air in Kelso, Wash. KLOG's brand of "hometown news, home team sports and classic hit songs" remains popular, and is now the older sibling to two additional radio brands.

The family launched KUKN--a country music station--in 1990, and added a third radio brand, "The Wave, with the assistance of the $742 million asset credit union's MBL.

The Wave is the company's fastest growing station, Hanson told the Northwest Credit Union Association (NWCUA) (Anthem Recap Dec. 7).

The family business has a connection with many of the area's credit unions, Hanson said. The loan process with Fibre was seamless, he added.

"I was able to really simply, without a whole lot of work, explain what we were trying to achieve with the station, and obviously we had good track records with our previous stations." Hanson said.

MBLs help dreams comes true, said Angie Leppert, Fibre marketing specialist. "It's what puts food on the table for their families," she told NWCUA. "It allows them to have employment opportunities for our community."

Fibre, along with the Credit Union National Association (CUNA) and credit unions nationwide are lobbying Congress for passage of S. 2231 and H.R. 1418, bills that would increase credit unions' MBL cap to 27.5% of assets from 12.25%. A Senate vote on S. 2231, known as the Small Business Lending Enhancement Act, is possible during the current lame-duck session, which ends Dec. 21.

CUNA and credit unions say that increasing the cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

Virginia CU helps members with ATM rebates

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RICHMOND, Va. (12/10/12)--A new program at Virginia CU (VACU) in Richmond, Va., is overcoming one of the most common objections to joining a credit union--"not enough ATMs."  Its solution  is not to build more ATMs, but to rebate the ATM fees charged by others.

The rebates have few restrictions and will take effect when members at the $2.33 billion-asset credit union use another institution's ATM for a cash withdrawal from their checking accounts.  

"When you build a new ATM, you increase convenience only for those who live or work near it. By going with surcharge rebates, we are now enabling our members to use ATMs virtually anywhere and have surcharge fees returned," explained Deb Wreden, Virginia CU senior vice president of product and delivery strategy.

The program went into effect in November and the first surcharge rebates were credited to member accounts Dec. 3.

VACU will rebate up to $8 per month in ATM surcharges for its credit union checking accounts that qualify. To receive surcharge rebates, members use their debit card for the withdrawal and have a qualifying direct deposit to their checking account.

ATM surcharges are fees assessed by other institutions for using their ATM to get cash. The amount of the surcharges varies, but is typically $2 to $5 per withdrawal. Surcharges are in addition to the network fee that consumers' own financial institutions charge for providing access to other network ATMs.

VACU already provides its members up to four checking withdrawals per month at other institutions' ATMs with no fee assessed. Members also enjoy free access to the ATMs at all WAWA (a chain of convenience store/gas stations located along the East Coast) locations in Virginia. In addition, VACU continues to offer free checking with no minimum balance requirements.

CUANYs Mellin rebuts bankers opposition to raising MBL

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ALBANY. N.Y. (12/10/12)--William J. Mellin, president/CEO of the Credit Union Association of New York (CUANY), refuted bank arguments against increased member business lending (MBL) authority for credit unions, in a letter to an area paper.

Mellin wrote a response to The Troy Record last week "strongly disagreeing" with a letter the paper ran by Frank Capaldo, head of the Independent Bankers Association of New York that opposes increasing small business lending (MBL) by credit unions.

"On behalf of New York's 421 credit unions, I strongly disagree with the opinions set forth by Mr. Capaldo,' Mellin wrote Thursday in The Troy Record. "Once again, banks are opposing credit unions' efforts to help small businesses access credit to help them grow and create much-needed jobs without offering alternatives to address the reduction of business credit by banks as a result of the recession.

"Mr. Capaldo states that the small businesses he spoke with claim they do not need access to more credit," Mellin continued. "How is it then that a recent poll commissioned by the American Sustainable Business Council, the Main Street Alliance and the Small Business Majority found 90% of small business owners believe that the availability of small business loans is a problem, and 60%  have faced difficulty trying to obtain loans that would grow their small business.

"Further, the survey found that 90% of small-business owners support making it easier for community banks and credit unions to make loans to small businesses," Mellin added.

To read the letter, use the link.

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25% so that more loans could be made to small businesses. CUNA and credit unions say that increasing credit unions' MBL cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

Consumer notification OKd by court in SC data breach

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COLUMBIA, S.C. (12/10/12)--The South Carolina Department of Revenue last week received court approval to release the 3.3 million financial institution account numbers compromised in an October data breach to determine which taxpayers' accounts are at risk.

In the Court of Common Pleas for Richland County, the Revenue Department summoned the South Carolina Credit Union League (SCCUL) and South Carolina the Bankers Association (SCBA) and asked for an exemption from the state law that prohibits release of any tax return information (The Post and Courier Dec. 7).

The state Department of Revenue required permission from a judge because the agency is not allowed under state law to release the information to the financial institutions without a judicial order. Credit unions and banks now can request their account numbers.

Judge James R. Barber III ordered the agency to provide the account numbers as soon as possible.

"With this decision given, we and the SCBA are identifying the best method for providing our member institutions the information our taxpaying members and customers need to protect themselves," Steve Fowler, SCCUL president/CEO told News Now. "Once complete, these procedures will dictate that information is provided only at the request of the account holder, and that in return it is accessed solely for resolution to potential identity theft and fraud--nothing more."

As many as 3.8 million individual taxpayers, 1.9 million dependents, 699,900 businesses, 3.3 million bank accounts and 5,000 expired credit card accounts were compromised, according to  to Mandiant, a cyber security company hired by the state to investigate the incident.

The data could be used to steal identities, make fraudulent purchases and illegally access bank accounts, according to experts.

The breach was initiated when someone clicked on a malicious "phishing" e-mail sent to multiple Revenue Department employees in August.

SECU assists with teacher housing complex

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Raleigh, N.C. (12/10/12)--State Employees' CU (SECU) members helped fill the housing needs of North Carolina teachers with a $2.4 million, 0% interest-free loan. 

Click to view larger image Local representatives assist in the groundbreaking of the Echo Ridge Teacher Housing Complex located in Raeford, NC. The project was helped made possible by a $2.4 million 0% interest-free loan from the SECU Foundation, the charitable arm of State Employees' CU, Raleigh, N.C. (Photo provided by State Employees' CU)
The loan will assist in the construction of the Echo Ridge Teacher Housing Complex located in Raeford, N.C. The new complex will provide a safe and affordable housing option for new and current teachers in Hoke County and serve as a recruitment incentive for the school system. 

The SECU Foundation provided the loan funding through a partnership with the Partners for Hoke County Public Schools Education Foundation. A groundbreaking ceremony was held in November for the 24-unit, two-bedroom apartment complex, with Raeford City and Hoke County representatives and SECU and Hoke County school officials on hand. 

The complex is scheduled for completion in July.

This is the fourth teacher housing initiative supported by the SECU Foundation. Several North Carolina counties have struggled with recruitment and retention of teachers due to lack of affordable housing. As a result of the housing shortage, some teachers sought jobs in other counties where housing was more affordable and abundant.

The funding concept for Echo Ridge is one that has been replicated from SECU Foundation's first housing initiative that began in 2006.  As funds for the $2.4 million construction loan for Echo Ridge are repaid through rental income, SECU Foundation will recycle those assets to be used for future projects in other counties throughout North Carolina.

North Carolina Kansas CUs report growth

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RALEIGH, N.C. and WICHITA, Kan. (12/10/12)--Credit unions in Kansas and North Carolina reported robust growth last week.

Loans, assets and profitability were improved for the third quarter compared with a year ago for Kansas credit unions, according to according to the Kansas Department of Credit Unions' Third Quarter 2012 Call Report Statistics (Wichita Eagle Dec. 5).

Combined assets of the state's 79 credit unions increased 8.6% from a year ago to $4.3 billion.

Loans for the three-month period ending Sept. 30 rose 6.7% to $2.8 billion, compared with the same quarter a year ago, the report said.

Profitability also increased for Kansas credit unions, to 0.9% return on average assets--a key measure of profitability--compared with 0.72% in the third quarter of 2011. Kansas credit unions' return on average assets also was more than the 0.86% for credit unions nationwide in the third quarter, according to data from the National Credit Union Administration (NCUA).

In North Carolina, credit union membership numbers surged in the third quarter (Triangle Business Journal Dec. 7).

Two examples cited by the Journal were State Employees' CU and Local Government FCU, both of Raleigh.

State Employees' CU, with assets of $25.3 billion, boosted membership by 5.2%, to 1.8 million, in the 12 months ending Sept. 30-- nearly double the national growth rate of 2.7% for the same time frame, according to the NCUA.

Local Government FCU increased its membership by 7.4%, once again outpacing the national rate and the statewide growth rate of 3.2%.

Credit Union National Association senior economist, Steve Rick, credited the growth to improving consumer confidence, an aversion to higher bank fees and an improving new-car loan market. Nationally, the volume of new-car lending rose by 7% for the year ending Sept. 30 after shrinking for the past four years.

New-car loans at Local Government FCU increased by 80% to total loans of $45 million, in the year ending Sept. 30.

Local Government FCU lowered its interest rate on new-car loans to 1.99% in June and plans to keep it there through January, said spokeswoman Erica Hinton.

Video gaming teaches personal finance

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HELENA, Mont. (12/10/12)--In a world of gadgets and electronic games, credit unions have increasingly more options--and challenges--to engage teenagers. In 2010, the Credit Union National Association (CUNA) and the Wisconsin Credit Union League launched Money Mission, an online game that teaches teens between the ages of 15 and 19 about personal finances and, more importantly, how to strike a balance between financial matters and living an enjoyable life. 

Vanessa Lowe from National Credit Union Administration's Office of Small Credit Union Initiatives listens to Ben Schweder, vice president of Wisconsin Credit Union League Services talk about Money Mission at recent convention in Helena, Mont. (Photo provided by Montana Credit Union Network)
Now, Montana credit unions want to bring this interactive game to high school students in their state. Ben Schweder, vice president of Wisconsin Credit Union League Services, recently provided a demo of the gaming platform to group of credit union professionals at the Montana Credit Union Network Fall Forum in Helena.

Within the game, students live in a virtual community where they earn money, pay bills, decide on investments, and make purchases. "It's a dramatic tool that teaches real life skills like buying a car or stocks and managing a savings account after they've developed their own avatar," said Schweder.

In addition to teaching financial awareness to teens, Money Mission offers opportunities to apply for and earn scholarships to students, free classroom resources to teachers, and brand awareness to credit unions.

Kelly Cresswell, vice president of foundation activities for Student Assistance Foundation (SAF), a nonprofit in Helena, Montana, works with a number of financial literacy programs, but she says that only Money Mission places emphasis on maintaining personal happiness. "The link between happiness and financial security is pretty solid," Cresswell said. "And Money Mission backs up what they say with a scholarship program where participants can seek higher education, backing up the principles learned in the game."

Cresswell convinced SAF to apply for a grant to bring Money Mission to all Montana credit unions. If the grant is approved, the state's 57 credit unions will have the opportunity to implement the program and make it available to high school students state-wide.

Montana credit unions would be following in the footsteps of credit unions across six states that currently offer Money Mission: It's been a hit at Kauai High School in Hawaii. Student Tyler Schields said he is learning while having fun. "In this class we have to deal with stocks, essays, and research," Schields said. "It's really fun to go to a school-approved game site and play."

CUNA org offline for upgrade this weekend (12/06/2012)

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MADISON, Wis. (12/7/12)--The CUNA.org website will be unavailable for product purchases, meeting registrations and member-only log-ins this weekend, said the Credit Union National Association (CUNA).

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

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

ATM Survey Skimming biggest threat

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SIOUX FALLS, S.D. and LONDON (12/7/12)--Skimming remains the biggest global threat to ATM security, according to a survey released Thursday by the ATM Industry Association (ATMIA) this week.

The (ATMIA), the only global non-profit association for the ATM industry, announced the release of its second ATM fraud survey conducted among its members.

The second most cited threat was cash and card trapping, which is primarily a European problem which has not migrated to North America as yet, ATMIA said. Gas and explosive attacks were seen by the respondents as the third biggest threat, followed by ATM burglary and cyber attacks.

Respondents were asked if criminal attacks in general on ATMs in their country/region were

increasing or decreasing. About 14% said criminal attacks were increasing sharply. Another 33% said they were increasing moderately.

Also, 60% said costs to ATM businesses arising from ATM fraud were increasing sharply or moderately

About 93.7% stated that security best practices are either "essential" or "very important."

"The security of ATMs is undoubtedly world-class--but we need to stay vigilant to ward off new and emerging threats," said Mike Lee ATMIA CEO.

The association will study mobile apps fraud in the first quarter of 2013, Lee said.

To download the survey results, use the link.

INewsdayI op-ed Govt should bless increased MBLs

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NEW YORK (12/7/12)--Congress should pass the Small Business Lending Enhancement bill and allow credit unions to lend more money to small businesses, Newsday wrote in an op-ed published Thursday. "It's a marriage the deficit-burdened federal government should bless," Newsday concluded.

The bill, introduced in the U.S. Senate by Sen. Kirsten Gillibrand (D-N.Y.), would create a good match between credit unions that have capital and small businesses that are have a difficult time procuring the capital they need to operate and expand, Newsday said.

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' member business lending (MBL) cap to 27.5% of assets from 12.25% so that more loans could be made to small businesses. CUNA and credit unions say that increasing credit unions' MBL cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

"The change could boost lending to small businesses nationally by $10 billion in the first year, and in New York by $1 billion," Newsday said. "On Long Island, where there are 36 credit unions, the estimated increase in lending potential would be $320 million.

"The higher cap would be phased in for individual credit unions that demonstrate sound underwriting and business-loan servicing practices to the National Credit Union Administration, the agency that insures their deposits and oversees their lending," the publication added.

To read the op-ed, use the link.

CUNA amicus brief backs lower court ATM ruling

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MADISON, Wis. (12/7/12)--The Credit Union National Association (CUNA) is urging a federal appeals court to uphold a lower court decision spelling out how credit unions and ATM vendors qualify for immunity from liability for missing "fee decals," which have been the target of a number of lawsuits brought against the credit unions and vendors.

The lawsuits are proceeding even though the decals are obsolete, since interactive notices also now appear on ATM screens.

In a "friend of the court" brief filed late Wednesday in the U.S. Court of Appeals for the ninth circuit, CUNA argues that the court should hold that "ATM operators are not required to establish the identity of the vandal or third party that removes an affixed fee decal in order to establish immunity from civil liability under the safe harbor defense" under federal law. Adoption of this standard would mean, in effect, that missing stickers are presumed to be the work of vandals for which credit unions will not be held liable.

Doing so, CUNA states, recognizes that ATMs are remote, unmanned, and often beyond any practicable means of surveillance.

Further, CUNA argues that--as found by the lower court--the appeals court should affirm that good faith compliance "should be measured by a standard of reasonableness under the circumstances applicable to the particular ATM and its operator."

Doing so, CUNA states, recognizes that "a 'one-size-fits-all' solution does not address the realities of a diverse, decentralized ATM industry whose financial institutions and other members endeavor in good faith to comply with the Electronic Funds Transfer Act (EFTA) and Regulation E. Under this approach, smaller institutions, with their limited staff, would not be held to an unreasonably high standard concerning the monitoring of their machines.

"This is consistent with the intent of the EFTA and Regulation E and balances consumer protection with the realities of the ATM industry," CUNA wrote.

"Our filing in this case is of critical interest to credit unions facing numerous lawsuits over ATM signage. Just as CUNA seeks results for credit unions in Congress and with regulators, we look for effective opportunities to seek protections in the courts," said CUNA General Counsel and Executive Vice President Eric Richard.

To download CUNA's brief, use the link.

The lower court ruling in the U.S. District Court for the Southern District of California in San Diego outlined two scenarios that show a good-faith compliance effort.

EFTA requires ATM operators to provide notice to the consumer that a fee has been imposed by the operator for providing the service, and the amount of the fee, the court said.

However, the court ruled there are two defenses for a lack of notice.

"The  bona fide error defense provides that 'a person may not be held liable … if that person shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid such error,'" the court said. Therefore, "a defendant is not liable for a missing ATM fee notice if: 1)  the defendant maintained 'procedures reasonably adopted to avoid' a missing notice: and 2) the lack of a notice was 'not intentional,' but was a "bona fide error.'"

In the second scenario, the safe harbor defenses provides: "If the notice required to be posted  …  by an automated teller machine operator has been posted by such operator  … and the notice  is subsequently removed, damaged, or altered by any person other than the operator of the automated teller machine, then the operator shall have no liability under his section for failure to comply …"

Wisconsins Thompson Let CUs make MBLs

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MADISON, Wis. (12/7/12)--A letter to the editor penned by Brett Thompson, president/CEO of the Wisconsin Credit Union League, published Dec. 3 in The Capital Times, a south central Wisconsin newspaper, touted the benefits of increasing the credit union member business lending (MBL) cap. 

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. CUNA and credit unions say that increasing the cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

"A whopping 80% of Wisconsin voters polled by the Wisconsin Credit Union League say they support the credit union small business jobs bill--legislation that would add $408 million of new credit for Wisconsin businesses through credit unions," Thompson wrote.

Other statistics noted by Thompson include:

  • A 2011 study from Pepperdine University shows that banks are denying the majority (60% ) of loan applications.
  • Credit unions have done all they can. Since the start of the recession in 2007, Wisconsin banks decreased their business lending by 2% while Wisconsin credit unions grew theirs by 55% to compensate.
  • The legislation would add close to 5,000 jobs in Wisconsin the first year alone.
  • Half of credit union business loans help families with income under $50,000.
  • A bipartisan coalition of more than 30 organizations supports the legislation. They represent small businesses, the self-employed and the insurance, textile, realty, construction, automotive and technology industries.
  • The legislation won't hurt banks. Banks hold 95% of U.S. business loans; this legislation won't dent their market share. In fact, almost half of banks support the legislation.
To read the complete letter, use the link.

NorthSouth Carolina leagues to consider merging

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COLUMBIA, S.C. and RALEIGH, N.C. (12/7/12)--The North Carolina Credit Union League (NCCUL) and South Carolina Credit Union League (SCCUL) boards of directors announced Thursday their unanimous votes to move forward with a process to formally consider consolidation of the two leagues.

Their votes authorize creation of a six-member consolidation task force consisting of three board members from each state.

The task force will assess whether consolidation best positions both organizations to continue meeting the needs of credit unions in North and South Carolina. Further movement toward consolidation would be subject to approval by each board and the membership of each organization.

"For the past year, the South Carolina Credit Union League board of directors has been engaged in a process to determine the strategic future of the organization," said SCCUL Chairwoman Faye Crocker, acknowledging the retirement of current President/CEO Steve Fowler at the end of 2013.

The two associations history of collaboration, including joint ownership in multiple entities, and they share a foundation and corporate credit union. Credit union leaders in both states know each other and have developed strong working relationships through the years, the leagues said. 

"We have established great trust and mutual respect with the South Carolina Credit Union League and its credit unions over the years," said NCCUL Chairman Maurice Smith.  "Both boards continue to look to the future to ensure we have the strongest possible league to serve credit unions in the Carolinas for years to come. We look forward to examining that issue through the Consolidation Task Force."

Individuals slated to serve on the consolidation task force include:

  • Crocker,  Greater Abbeville (S.C) FCU;
  • Linda Weatherford of SPC CU, Hartsville, S.C.;
  • Nick Wodogaza of Palmetto Citizens FCU, Columbia, S.C.;
  • Maurice Smith of Local Government FCU, Raleigh, N.C.;
  • Patty Idol of Mountain CU, Waynesville, N.C; and
  • Jeff Jones of Freedom FCU, Rocky Mount, N.C.

Check forging scheme uses homeless men

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MADISON, Wis. (12/7/12)--Eight homeless men were charged with forgery in Wisconsin Tuesday for allegedly cashing forged checks at credit unions during three days in August.

"We think we've traced the leaders of the operation to Georgia," police spokesman Joel DeSpain told News  Now.  "They've pulled this scheme in other cities in Wisconsin and Minnesota that we are aware of.  They find out where the homeless hang out in cities and target them for their operation."

But Madison police said the organizers of the scheme remain at the large and pulled same scam in several Wisconsin cities. The organizers targeted homeless men, provided them with clothes, gave them the fake checks and took most of the proceeds from them, remain at large (Wisconsin State Journal Dec. 4).

In September, two suspects described as "middle level players" in the scam by Det. Scott Sachtjen of the Madison Police Department were arrested in Brown County, Wis., near Green Bay. The suspects were found with checks in a car with Georgia license plates, but would provide no information to lead police to organizers of the scheme.

"It's frustrating," Sachtjen said. "These rings are big in the south. Now they appear to be going nationwide."

Sachjten stressed the importance of educating frontline staff to be aware of suspicious checks.

"It's so easy to counterfeit checks, and tellers are the first line of defense because they see them every day," Sachtjen said. "They are also aware of who comes into the branches."

The 16 counterfeit checks that were cashed in Madison in August were created to look like they came from Hoffman Manufacturing, a store fixture manufacturer in Madison, and were cashed at branches of Summit CU, also of Madison, according to the complaint.

The homeless men contacted by police for allegedly cashing the checks told similar stories.

Daven Pinkard, one of the homeless men, told police that two men he didn't know picked him up at a local resource center for the homeless. They told Pinkard and two other homeless men that they would be put on the payroll of a construction firm to make $200 to $400. The men said they had a check from the construction firm, which was owned by the uncle of one of the men.

The two men drove the homeless men to a retail store and bought them shirts, ties and shoes. The homeless men were then transported to an Arby's restaurant to change clothes. They were later provided a meal at McDonald's.

Pickard and the other homeless men cashed checks at two Summit CU locations. They were then asked by the leaders of the scam if they had other friends to cash checks.

Other men who were brought into the scheme told police they were picked up at a local church and at local parks.

The checks were each written for amounts between $1,500 and $4,300. The homeless men received about $300 each for cashing them.

CU System briefs (12/05/2012)

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

State regulator issues warning about crowdfunding

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

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

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

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

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

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

TMG Black Friday results Consumers spent more

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

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

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

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

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

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

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

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

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

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

Other findings:

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

CU survey Georgians wise up on managing money

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

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

They learned lessons about:

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

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

Other areas in which people report learning money lessons include:

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

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

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

Two mergers in Hawaii involve CUs

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

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

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

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

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

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

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

CU branch closed after explosion at ATM

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

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

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

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

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

Social media tips for CUs outlined

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

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

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

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

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

Auto loans rev their engines

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

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

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

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

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

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

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

CUSO CEO Wind down a planned strategy

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

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

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

The CUSO's owners include:

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

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

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

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

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. CUNA and credit unions say that increasing the cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

CUNA org offline for upgrade this weekend

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

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

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

Startups creating more jobs than established firms

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KANSAS CITY, Mo. (12/5/12)--While credit unions advocate raising the member business lending (MBL) cap to help create more jobs at small businesses, a new report indicates that job creation and the hiring rate in firms less than two years old has outpaced job creation in more established firms.

The report, "Job Creation, Worker Churning, and Wages at Young Businesses," was released by the Kansas City, Mo.-based Kauffman Foundation, which specializes in entrepreneurship.

The study follows on other studies that "established the important role of startups and fast-growing young businesses in job creation and employment growth in the U.S. economy," said the report. It noted that "new firms and young businesses account for about 70% of gross job creation and disproportionately contribute to net job creation."

The current study, based on quarterly work force indicators in 28 states, finds that young firms, in the first two years of their lives "have higher job creation and job destruction rates than older firms. A substantial fraction of the job creation for young firms is due to the job creation that occurs in the quarter of starting up.

"However, there is substantial subsequent job creation as well as job destruction in the succeeding quarters in the first two years. The overall net job creation (the difference between job creation and destruction) is much higher for young firms than for older firms," said the report.

"Job creation rates for the youngest firms are twice those in the firm age range of two to 10 years, and four times as large as the rates for mature businesses (11-plus years old)," the report said, noting that  four out of every 10 hires at young firms "are for newly created jobs, much higher than in older firms, where the ratio fluctuates between 0.25 and 0.33."

Also, worker churn rate has slowed, which could indicate the economy is becoming less dynamic, said the Kauffman Foundation.  For workers with fewer opportunities to change companies and job roles, it will be harder for them to advance their careers and grow their earnings, said the report.

The report also indicated that the 2007/09 recession hit the youngest businesses much harder than the 2001 recession did. Despite being hit hard in the financial crisis, youngest businesses have had the most robust recovery, with their job creation rate growing from 0.18 to 0.23 between 2009 and 2011.

Credit unions currently have a limit of how much they can loan to small businesses--12.25% of assets. They are urging Congress to pass bills that would raise theMBL to 27.5%. The Credit Union National Association estimates that raising the cap would generate $13 billion in new funds for small businesses, which in turn could result in 140,000 new jobs the first year of enactment, at no cost to taxpayers.

For the full report, use the link.

WOCCU European CUs meet with EU policymakers

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BRUSSELS (12/5/12)--The European Network of Credit Unions (ENCU) and World Council of Credit Unions (WOCCU) met with policymakers in Brussels this week to discuss regulatory issues related to draft directives about data protection, the proposed pan-European banking union and deposit guarantee plans being considered in the European Union (EU).

Meeting at the Permanent Representation of Ireland to the European Union (EU) in Brussels this week to discuss draft directives for EU-wide legislation were, from left: Paweł Grzesik, NACSCU in Poland; Brian Branch, World Council of Credit Unions in the U.S.; Brian McCrory, ILCU, Ireland; Michael Taggart, Permanent Representation of Ireland to the EU; and Matt Bland, ABCUL, Britain. (Photo provided by World Council of Credit Unions)
"Everywhere credit unions are seeing increased regulatory burden," said Brian Branch, WOCCU president/CEO. He and Michael Edwards, WOCCU chief counsel and vice president for advocacy and government affairs, joined the ENCU delegation in Brussels. "While we believe strongly in rigorous prudential discipline and risk management, we need to constantly dialogue with policymakers to educate them about the proportionately high compliance cost of such rules for smaller and less risky credit unions," Branch said.

ENCU representatives included Matt Bland, policy and communications officer, Association of British Credit Unions Ltd.; Andrus Ristkok, president, Estonian Union of Credit Cooperatives; Brian McCrory, director, Irish League of Credit Unions; and Paweł Grzesik, Warsaw representative of the National Association of Co-operative Savings and Credit Unions in Poland.

The ENCU group visited representatives from the European Commission and from the European Parliament's Civil Liberties, Justice and Home Affairs Committee to discuss a new regulation that would help harmonize data protection laws in the EU's 27 member states and would require most organizations dealing with sensitive personal data to appoint a data protection officer.

Small and medium businesses with fewer than 250 employees would be excluded from the requirement unless they conducted regular and systemic customer monitoring as part of their core business.

The group sought clarification on the regulation's application to credit unions and suggested ways to achieve the regulation's objectives without unreasonably burdening credit unions. It emphasized to policymakers that financial services, not managing personal data, are the core business of credit unions.

In anticipation of Ireland becoming the EU president, ENCU delegates also met with Michael Taggart, financial services attaché, Permanent Representation of Ireland to the EU, to address proposed directives that would excessively burden credit unions.

The EU is seriously considering expanding authority of the European Central Bank and other EU banking supervision entities to directly supervise all banking institutions in the EU. ENCU and World Council representatives advocated having local, national regulatory bodies with day-to-day regulatory and examination responsibility to retain jurisdiction over credit union business activities, corporate governance and related activities. ENCU delegates noted to Taggart that credit unions do not operate on a cross-border basis, unlike systemically important commercial banks certain to be subject to increased EU-level supervision.

The delegation also addressed with Taggart the EU's forthcoming mortgage lending requirements, which would require significant training of credit union personnel. ENCU representatives stressed that credit unions not engaged in purchase-money first mortgage lending, which includes virtually all EU credit unions, should be exempt from such requirements.

The group also met with MEP Peter Simon, a key member of the influential Economic and Monetary Affairs Committee who is the rapporteur of the draft directive on an EU-wide deposit guarantee scheme.

Arizona CU ATMs offer prepaid gift cards

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PHOENIX and MESA, Ariz. (12/5/12)--Banner FCU in Phoenix and Better ATM Services, a technology provider in the ATM industry, Tuesday announced a partnership to provide an ATM-issued multibrand prepaid card, the myGIFT card.

The ATM-dispensed myGIFT One Card Many Choices Discover Prepaid Card allows consumers to shop at nationally recognized restaurant and retail stores including Macys, Lowe's, Outback Steakhouse, and Bonefish Grill. Cards are redeemable to buy goods and services at specific merchants that accept Discover cards.

During the pilot program, myGIFT cards will be available at walk-up Banner FCU ATMs at 11select Banner Health ATM locations throughout Arizona.

Technology-enabled ATMs, supplied and run by Express Teller Services for Banner FCU, will include a menu screen option offering consumers the prepaid card for purchase in addition to cash and other banking service options. The new ATM-dispensed card is made of a thin, durable material, allowing cards to easily pass through an ATM's cash mechanisms and works like any other prepaid card.

Early card sales will have an important impact on Arizona communities, said Better ATM Services. For every ATM-dispensed myGIFT Discover Prepaid card sold through March, fifty cents will be donated to Banner Health Foundation.

Earlier this year, three Arizona credit unions participated in a similar pilot program offering Visa's first ATM-dispensed gift cards. Credit Union West, Glendale; MariSol FCU, Phoenix; and Pinal County FCU, Casa Grande; began offering their members Visa gift cards at walk-up and drive-through ATMs (News Now Jan 12).

Calif and Nevada leagues elect board officers

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ONTARIO, Calif. (12/5/12)--Both the California and Nevada Credit Union Leagues recently elected new board chairmen at their annual meetings held in Las Vegas--Teresa Halleck and Wayne Tew, respectively.

Halleck, president/CEO of San Diego County CU (SDCCU), San Diego's largest locally owned financial institution, was re-elected as chairman of the board of the California Credit Union League.

Also elected to the executive committee of the board were Teresa Freeborn, president/ CEO of Xceed Financial FCU in El Segundo, as vice chairman; and Jon Hernandez, president/CEO of CalCom FCU in Torrance, City of Downey FCU in Downey, and Mattel FCU in El Segundo, as an at-large director.  

Halleck, with more than 20 years of financial industry experience, joined SDCCU as president/CEO in August 2010. Prior to SDCCU, she served as president/CEO of Sacramento-based The Golden 1 CU for nearly eight years. Under Halleck's leadership, SDCCU has continued to remain the top financial performer in San Diego. SDCCU's membership growth is roughly three times the industry average in 2012.

Halleck also has served on the California Department of Financial Institutions' Credit Union Advisory Committee. 

The California league represents more than 300 credit unions and more than 8.7 million members in California.

Tew, president/CEO of Clark County CU in Las Vegas, was elected as the Nevada Credit Union League board chairman. The other members of the board are:

  • Vice Chairman Eric Estes, president/CEO of Boulder Dam CU, Boulder City;
  • Treasurer Wally Murray, president /CEO of Greater Nevada CU, Carson City;
  • Director Dennis Flannigan, president/CEO of Great Basin FCU, Reno, Nev.; and
  • Director Barbara Reuter, president/CEO of Financial Horizons CU, Hawthorne.
Tew has served as president/ CEO of Clark County since 1986. He has served as chairman of the Client Group Board for SUMMIT Information Systems, a FiServ company that provides data processing software to credit unions throughout the world, and on the advisory board for American Share Insurance, the largest private deposit insurance company in the U.S.

The Nevada Credit Union League represents 14 credit unions and more than 193,000 credit union members in Nevada.

CU System briefs (12/04/2012)

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  • SHEBOYGAN, Wis. (12/5/12)--The former president of Midwest CU, a $3.8 million asset credit union based in Sheboygan, Wis., was sentenced Monday to one year in jail and eight years of probation in the embezzlement of more than $100,000 from the credit union. Sarah M. Gora, 33, of Mosinee, was also ordered by the Sheboygan County Circuit Court to repay $91,547 and will be granted work-release while in jail, with a portion of her wages going to the credit union (Sheboygan Press Dec. 3). Gora, in a plea bargain, pleaded no contest to one felony count of theft from a financial institution. An audit discovered stolen funds, falsified loan documents and the use of a company credit card for personal items and vacations. She was the only full-time employee at the credit union from June 2006 until March 2011. Gora allegedly put the stolen funds into a personal account at another credit union …
  • MARLBOROUGH, Mass. (12/5/12)--The Massachusetts Credit Union League's Financial Literacy Committee has announced the league will sponsor six college sponsorships to be awarded in late April to high school seniors. The scholarships are $1,500 each and will be awarded to one of each of the league's six chapters. Credit unions must submit their top three choices to their chapter president by March 19. The chapter's top entry must be submitted no later than April 9, said the league (Values & Visions December) …
  • SPRINGFIELD, Mass. (12/5/12)--The Massachusetts District Office of the U.S. Small Business Admiminstration (SBA) has named Springfield, Mass.-based Freedom CU as the top SBA 7(a) Lender in total dollars throughout Western Massachusetts (The Republican Dec. 3). In 2012, Freedom approved seven loans totaling $2.8 billion. Freedom's commercial loan officer, Bryan Kaye, accepted the award at a ceremony in Boston …

Media reports CUs want to lend to small businesses

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MADISON, Wis. (12/5/12)--Two newspapers, one on the East Coast and one in the Midwest, have reported that credit unions are eager and able to provide small businesses with loans to grow their businesses.

St. Mary's Bank in Manchester, N.H., the first U.S. credit union, has been lending to businesses for more than a century, so if federal legislators allowed it to lend more money to businesses, that would be right in the heart of its mission, Ron Covey, St. Mary's president/CEO, told the New Hampshire Union Leader (Dec. 1).   

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' member business lending (MBL) cap to 27.5% of assets from 12.25% so that more loans could be made to small businesses. CUNA and credit unions say that increasing credit unions' MBL cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers. (See related News Now article "Startups creating more jobs than established firms.")

If that legislation passes, St. Mary's could double or triple its business loan portfolio of roughly $90 million, Covey told the Union Leader. With less than 5% of the business loans in New Hampshire, credit unions would not be taking way large amounts of business from banks if legislation passed, he added.

The lifting of the MBL cap  is needed to bolster many small businesses in Wisconsin, Brett Thompson, president/CEO of the Wisconsin Credit Union League, told the Milwaukee Journal Sentinel (Dec. 1).

Many small businesses are increasingly looking to credit unions for their lending needs because they have seen their credit resources and lines of credit eliminated from their banking relationships, he added. 

Small businesses would be helped and the economy turned around at no cost to taxpayers if the MBL cap were raised, Thompson told the Journal Sentinel. Most business loans that credit unions are issuing are too small for banks to be interested anyway, he added.

The average size of credit unions' business loans in Wisconsin is $176,000. Many members who come to credit unions have been turned down by banks because they do not want to handle such a small amount of credit, Thompson told the newspaper.

To read the articles, use the links.

More CUs announce mergers

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MADISON, Wis. (12/5/12)--Mergers continue to reshape the credit union marketplace nationwide.

Mergers initiated or in the works include:

  • Safeway Los Angeles FCU, with $55 million in assets, Norwalk, Calif., has merged into $750 million Xceed Financial FCU, according to the Xceed FCU website. The merger was approved Nov. 7 by the National Credit Union Administration.
  • Detroit (Mich.) Metropolitan CU, with $452 million in assets, and $24 million asset Clawson (Mich.) Community CU have merged, with Detroit Metropolitan remaining as the surviving credit union (Observer and Eccentric Dec. 2). The membership of Clawson Community CU approved the merger Oct. 25.
  • Community First CU, with $143 million in assets, and located in Santa Rosa, Calif., has initiated a merger with $5.5 million Health Care Professionals of Napa (Calif.) FCU, according to the California Department of Financial Institutions (DFI) (DFI Monthly Bulletin October 2012).
  • National 1st CU, with $208 million in assets, Santa Clara, Calif., has announced its intention to merge with $140 million asset San Jose (Calif.) CU, according to the California Department of Financial Institutions (DFI Monthly Bulletin October 2012).
  • Valley First CU, with $410 million in assets, Modesto, Calif., will merge with $72 million State Center CU in Fresno, Calif., said the California Department of Financial Institutions (DFI Monthly Bulletin October 2012).
  • Eaton County Educational CU, with $32 million in assets, Charlotte, Mich., will merge into $2.2 billion asset Michigan State University FCU, East Lansing, Mich. (Lansing State Journal Nov. 30). Eaton County Educational CU membership must approve the merger. Regulatory approval is also required.
  • On a second vote, members of the Main Street Financial FCU, with $97 million in assets, Denham Springs, La., approved a merger with $283 million Jefferson Financial FCU, Metairie, La. Main Street will change its name to Jefferson Financial CU on Jan. 1 (The Advocate Dec. 3).
  • Credit Union of America, with $488 million in assets, has merged with $72 million asset First Choice CU. Both credit unions are located in Wichita, Kan. The credit unions merged data systems this week (Wichita Eagle Dec. 4).

League More Texans putting trust in CUs

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FARMERS BRANCH, Texas (12/5/12)--Texas credit unions continue to grow, with state membership in cooperative financial institutions nearing $8 million consumers, and that surge is a result of the trust credit unions have built in the minds of consumers, according to Dick Ensweiler, president/CEO of the Texas Credit Union League.

"Consumers want to do business with a financial institution they can trust," notes Ensweiler.  "Texas credit unions have experienced remarkable growth in 2012 because consumers appreciate the fact that credit unions put people over profit."

Texas credit unions have grown in membership more rapidly in the past nine months than at any time since the beginning of the recession, Ensweiler said. Through September, Texas credit union membership grew 3.3% for the year, outpacing the high water mark of 2.9% in 2008 and 2009.

"The current growth rate exceeds the national average of 2.7% and brings the total membership to 7.96 million Texas residents," notes Ensweiler. "At the current growth rate, membership in Texas credit unions could easily top eight million Texans by year-end."

Membership growth is also reflected in financial results. Texas credit unions' assets now exceed $76 billion. Members have added $2.8 billion to savings deposits in their credit unions since the beginning of the year.  Credit union loan portfolios have grown by $2.5 billion--to a consolidated $47.4 billion.

While membership, savings, and borrowing have increased, delinquencies and net charge-offs have decreased. Total loan delinquencies are 0.84% while net charge-offs are nearly one-half of one percent. First mortgages are better, with over 99.2% of all first mortgages in good standing.

"Texas credit unions are responsive to the needs of their communities, and their commitment to the financial success of Texas families has resulted in tremendous growth across the board," adds Ensweiler.

Boulder Valley CU assumes Indiana Members CU branch ops

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BOULDER, Colo. (12/5/12)--In a rare move for the credit union industry, Boulder Valley CU (BVCU) has assumed control of the Boulder, Colo.-based branch and equipment of Indiana Members CU (IMCU).

BVCU opened the branch Monday as a branch of BVCU and will continue service for IMCU's Colorado members. IMCU began encouraging its Colorado members to switch their accounts to BVCU in October so they would be ready for Monday's branch assumption. Staff at the branch will not change.

IMCU is a $1.4 billion asset credit union based in Indianapolis.  BVCU has more than $265 million in assets and is based in Boulder.

The agreement has several benefits to members and the credit unions, said BVCU. IMCU will see more efficient operations by focusing on Indiana only, while BVCU adds another branch location and obtains increased membership and loans.

Members of the new branch now have a financial institution with a local infrastructure and increased overall convenience, such as nationwide access to their money through more than 28,000 surcharge-free ATMs and more than 4,500 shared-branch locations; access to Mobile Banking apps; FREE BillPay; and BVCU's online eBranch and account opening services.

"This collaboration and cooperation between not-for-profit financial institutions are what makes credit unions unique and special as an industry," said Rick Allen, BVCU president/CEO.

Governor announces appointments to Ohio CU Council

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COLUMBUS, Ohio (12/5/12)--Ohio Gov. John Kasich has appointed Mike King, CEO of Genesis Employees CU in Zanesville, to a three-year term on the Ohio Credit Union Council.

The governor also reappointed to the council Vidya Iyengar, CEO of Marion (Ohio) Community CU, and Greg Kidwell, president of Pathways Financial, Gahanna, said the Ohio Credit Union League (eLumination Newsletter Nov. 28).

The seven-member council advises the Ohio Division of Financial Institutions (ODFI) about matters that affect state-chartered credit unions--including field of membership, regulation, examination, and safety and soundness issues.

It also confirms the annual supervisory fees that ODFI assesses state-chartered credit unions.

Other members of the council include: Christine Blake, CEO of Cardinal Community CU, Mentor; Gary Soukenik, CEO of Seven Seventeen CU, Warren; and Matthew Studer, CEO of Toledo Postal Employees CU, Toledo.

The council is chaired by Mike Wettrich, ODFI's deputy superintendent for credit unions.

NCUF grant combines fin ed movies

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SPRINGHILL, La. (12/5/12)--Carter FCU (CFCU), Springhill, La., has developed a financial education program that combines education with entertainment through partnerships with local businesses.

Carter FCU's Collaborative Financial Education Pilot Program combines education with entertainment. A CFCU volunteer distributes information on Biz Kid$ and tips for starting a business at a Biz Kid$ screening at Springhill Theatre, in Springhill, La.
In developing its Collaborative Financial Education Pilot Program, CFCU partnered with a local studio to film a series of financial literacy video trailers to be shown before movie features in a theatre. It also provided interactive workshops around Biz Kid$ financial education programming.

Biz Kid$ is the Emmy Award-winning and credit union-funded public television series that teaches kids about money management and entrepreneurship.

CFCU's program was launched this year with a grant from the National Credit Union Foundation (NCUF) to help increase its capacity for delivering financial education programming and expand opportunities to access financial literacy training and financial counseling in low-wealth and underserved populations in Northwest Louisiana and South Arkansas.

Two CFCU member businesses, Fairfield Studios and The Spring Theatre LLC, have partnered with the credit union to develop and implement the project by contributing services, products and funding. 

"Carter FCU's multi-faceted approach to financial literacy is great," said Lois Kitsch, NCUF national program director. "Plus, trailers are an integral part of the theater experience, which makes this such a clever way to reach moviegoers with a message that will resonate."

CFCU's pilot program includes three initiatives to deliver financial education and literacy training to target populations by increasing the number of trainers and venues available, specifically venues beyond traditional classroom settings.

The marquee of Springhill Theatre, in Springhill, La. displays information about an upcoming Biz Kid$ screening. (Photos provided by National Credit Union Foundation)
CFCU's first initiative was to establish a member volunteer training program. During the pilot phase, 10 member volunteers were trained and certified by the credit union to deliver financial education workshops and presentations in communities served by CFCU. The group was named the "Carter Federal Education Team" (CFET) and includes credit union members and employees. More than 500 people have received financial education training as a result of the initiative. 

CFCU's second initiative--its partnership with Fairfield Studios--created a series of educational video trailers that are shown in Spring Theatre, a local movie theater. The videos introduce financial literacy topics to age-appropriate audiences using a "Carter's Fun Facts About Money" concept. Filmed on location in the communities CFCU serves, the videos combine familiar surroundings, and social and cultural elements with financial literacy topics to peak interest and raise awareness among viewers.

Video titles include:

  • "A New Bike," targeted towards youth and shown before G-rated movies. It addresses careless spending and the importance of savings.
  • "Your Financial Future Preview," targeted towards viewers 21 years and older. It addresses the importance of retirement planning, savings and investing for the future.
  • "Looking Back Looking Forward," targeting a broad audience age 17 years and older. It is shown during PG rated movies. The script was written to address the financial literacy issues that are most relevant to CFCU members and its communities.
The trailers are also available on YouTube. Use the links

CFCU's third initiative is its partnership with the Spring Theatre LLC, to develop a financial education program that adds an educational component to its summer Kids Camp Movie Program and Senior Citizens Night. The initiative increases the financial literacy of up to 2,818 students ages five to 18 years and up to 3,000 senior citizens.

CU System briefs (12/03/2012)

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  • MANASSAS, Va.(12/4/12)--Three people in Manassas, Va., have reported fraudulent charges to their credit/debit cards and Prince William County Police said the crimes may be linked to a card skimmer placed on an ATM at a credit union in the area. The victims used the ATM between 11:45 a.m. and 2:45 p.m. on Nov. 25, and began noticing fraudulent charges. Police urged consumers to check any ATM they use for anything looking suspicious, especially around the card reader area (Manassas.Patch.com Nov. 30) …
  • GENEVA, Ill. (12/4/12)--The former president of $1.8 million asset Aurora (Ill.) Firefighters CU has been charged with felony theft and unlawful use of a credit card stemming from $35,000 in misappropriated credit union funds. Anne Schaal, who was president from 1996 to 2011, allegedly posted phantom payments to a general and personal credit accounts, used the credit union's credit card for personal expenses, failed to make required tax filings on the credit union's behalf, and made an error on member credit cards that resulted in losses to the credit union. Schaal allegedly also spent $580,000 in family assets on a gambling addiction hidden from her former husband. Both the criminal case and a civil lawsuit filed by the credit union are set to continue in January (BeaconNews.com Nov. 29) …
  • GRAND RAPIDS, Mich. (12/4/12)--Deanna Waskelis of Kentwood, Mich., a member of Lake Michigan CU, has won $20,000 in the Michigan Credit Union League & Affiliates Grand Raffle, which benefits the league's federal PAC, MCULLAF. When the credit union's CEO, Sandy Jelinski, notified Waskelis, who works in a Grand Rapids dental lab, Waskelis thought the call was a joke. "I'm not sure if there are enough words to describe how much I can use this right now," she said (Michigan Monitor Dec. 3). Waskelis, center, is shown with, from left: Lake Michigan CU's Bill Clancy, vice president of retail strategy; Don Bratt, vice president of marketing; Leo Vicari, vice president of facilities; and Jelinski. This year's raffle took in a record $200,460. (Photo provided by the Michigan Credit Union League) …
  • BAYTOWN, Texas (12/4/12)--Baytown, Texas-based Community Resource CU has been named a "Juntos Avanzamos" credit union, a designation reserved for credit unions that have demonstrated exceptional commitment and service to the Hispanic community, announced the Texas Credit Union League (LoneStar Leaguer, Dec. 3). The league presented the $298 million asset credit union with the Juntos Avanzamos flag Thursday. Juntos Avanzamos translates as "Together We Advance." The initiative is part of the league's goal to identify Texas credit unions that effectively serve the emerging Hispanic market, so Hispanic families know that the location has affordable and friendly financial services.  To see the ceremony, use the link to the YouTube video
  • BATTLE CREEK, Mich. (12/4/12)--Dale Seward Chidester, former manager, and treasurer-manager of Kellogg Community FCU, Battle Creek, Mich., died Oct. 23 in Salt Lake City, Utah (Battle Creek Enquirer Dec. 2). He was 100 years old. Chidester was a founding member of the credit union and served as treasurer-manager from 1941 to 1958. From 1958 to 1973, he served as full-time management.  He also was vice president of the Michigan Credit Union League for nine years in the 1940s, served on a number of key committees, and was a national director of the Credit Union National Association at the time of his retirement …

NCUA in JP Morgan MBS case A stay would risk documents

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WICHITA, Kan. (12/4/12)--The National Credit Union Administration (NCUA) has asked a federal court in Kansas to reject JP Morgan Chase's request for a stay of NCUA's lawsuit against the Wall Street Bank over mortgage backed securities (MBS) sold to four corporates, including U.S. Central FCU and Western Corporate FCU.

JP Morgan Securities, JP Morgan Acceptance Corp. I, and Bond Securitization LLC--all units of JP Morgan--had filed the motion to stay the case until an appeals court in the 10th Circuit had decided issues in a similar case NCUA had filed against RBS Securities.

The issues under appeal involve an extender statute, which sets statutes of limitations and statutes of repose--deadlines that affect when lawsuits may or may not be filed. Several banks have claimed NCUA did not file its MBS cases early enough.

NCUA filed its opposition to JP Morgan's motion on Friday in the U.S. District Court for the District of Kansas, saying that delaying the case would prevent NCUA from expeditiously vindicating its claims, would likely result in prejudice impacting its ability to obtain critical materials from third parties such as loan originators, and would potentially delay any potential payment of damages to credit unions.

"JP Morgan has failed to meet its burden to justify a wholesale stay of this litigation," said NCUA's opposition motion.  "The bulk of this case is outside the scope of the RBS appeal, and regardless of the outcome of that appeal, this court will be required to move forward on most of the claims in the complaint," said NCUA. It's motion also noted that "no defendant in any other NCUA case has made a similar motion."

NCUA pointed out that courts consider five factors in assessing a motion to stay: the plaintiff's interest in proceeding expeditiously and without potential prejudice; the burden on defendants; the convenience of the court; the interests of persons who are not parties in the litigation, and the public interest.

JP Morgan issued and underwrote securities to the corporates from 2006 to 2007.  The corporates collapsed in 2009, and NCUA, as their liquidating agent, sued a number of Wall Street banks who issued or underwrote the securities that contributed to the corporates' collapse.

NCUA's lawsuits, including the one against JP Morgan, allege the banks made numerous misrepresentations and omissions of material facts in the documents offered the failed corporates. The agency alleges systemic disregard of underwriting guidelines stated in the offering documents and says the alleged misrepresentations caused U.S. Central and WesCorp to believe the risk of loss on the investments was minimal, when in fact, the risk was substantial.

In addition to  JP Morgan and RBS Securities, NCUA has filed lawsuits against Wachovia Capital Markets and Wells Fargo, Barclay's Capital Inc., Goldman Sachs, and UBS Securities. The agency has already settled claims of more than $170 million with Citigroup, Deutsche Bank Securities and HSBC.

CASE Option 1 CUs to share branch facility

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GRAND RAPIDS, Mich. (12/4/12)--CASE CU in Lansing, Mich., and Option 1 CU in Grand Rapids, Mich., said they will share a branch facility in East Lansing starting early next year.

The branch sharing will create a "unique opportunity" for both credit unions, they said in a joint press release issued Friday (mlive.com Nov. 30).

The move will allow the $219.5 million asset CASE CU to maintain its presence in the Lake Lansing Road area of East Lansing.  It is leaving its branches in the area because they are too small to accommodate the growth it is experiencing, Jeffrey Benson, CASE president/CEO, said.

The credit union now will focus on procuring bigger branches that have drive-up service lanes for its members, which CASE has been seeking for some time, Benson added.

In the meantime, Option 1 said it has found a business to occupy a space that is too big for its current needs, the release said.

Oct CU balance sheets earnings continued to improve

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MADISON, Wis. (12/4/12)--Credit union balance sheets and earnings improved in October, continuing a trend that has been in place during the past 10 months, according to a Credit Union National Association (CUNA) economist's analysis of October's monthly sample of credit unions. 

"The capital-to-asset ratio reached 10.5% in October, up from 10.2% at the beginning of the year," Steve Rick, CUNA senior economist, told News Now. "The continued rise in the capital-to-asset ratio was due to better earnings. Credit union earnings as a percentage of average assets year-to-date are running at 76 basis points, up from 68 basis points for all of 2011. Earnings rose mainly due to falling loan-loss provisions. Provisions fell, in turn, because of falling loan charge-offs and loan delinquency ratios.

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"Since the beginning of 2012, delinquent loans as a percent of total loans fell--from 1.6% to 1.1% today," Rick added. "This 32% drop in the delinquency ratio was because of the simultaneous drop in the dollar amount of delinquent loans by 28% and the rise in total loans by 4%. CUNA is forecasting credit union earnings to come in at 70 basis points in 2013."

The total dollar amount of capital is $108 billion.

Credit union loans outstanding grew 0.4% in October, up from 0.3% growth in September. They totaled $608 billion in October, compared with $583.9 billion in October 2011. Adjustable-rate mortgages led loan growth with a 2.2% increase, followed by new-auto loans, which grew at 1.1%, and used-auto loans, which grew at 0.8%. Unsecured personal loans increased 0.7%, and credit card loans rose 0.2%, while fixed-rate mortgages fell 0.4%, and home equity loans declined 2.6%.

"Loan growth has accelerated in 2012 relative to 2011," Rick said. "Loan balances should rise 4% in 2012, significantly better than the 1.1% growth last year. In October, loan balances grew 0.4%, better than last year's pace of 0.3%, due to rising consumer confidence levels. CUNA is forecasting slightly better loan growth in 2013 of around 5%.

"The big news on the lending side is the return of new-auto loans," Rick added. "New-auto-loan balances grew 1.1% in October, compared to no growth last October, and grew 7.4% since the beginning of the year. This comes on the heels of falling new-auto loan balances over the last few years due to the great recession and the weak recovery."

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Credit union savings balances fell 0.1% in October, compared with a 0.6% decrease in September.  Credit union savings totaled $884.9 billion in October--or $49.2 billion more than the $835.7 billion in October 2011. Money-market accounts led savings growth with a 0.7% increase, followed by regular shares, which grew 0.4%. One-year certificates fell 0.1%, and individual retirement accounts and share drafts dropped 0.4% and 1.1%, respectively.

Regarding asset quality, credit unions' 60-plus-day day delinquencies improved slightly to 1% in October from 1.1% in September.

In terms of liquidity, the loan-to-savings ratio increased slightly in October to 69% from 68% in September.

Fisoc MoneyDesktop share tech council Best award

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MADISON, Wis. (12/4/12)--The CUNA Technology Council presented its second annual Best of Show Award to fisoc and MoneyDesktop at the 17th Annual CUNA Technology Council Conference.

The council recognized fisoc for its commitment to provide credit unions with a financial services platform that combines social media and its Buzz Points Merchants program, which helps credit unions increase member transactions, account balances and loan demand.

"Our mission at fisoc is to develop 21st century technologies that enable credit unions to offer financial services that will level the playing field with the mega banks," said Jay Valanju, CEO of fisoc. "To be recognized as the winner of the Best of Show Award at the CUNA Technology Council's most important annual event is quite an honor for our company."

For the second year, Money Desktop was also recognized as a Best of Show winner for its personal financial management solution which integrates directly into online banking platforms and helps credit unions increase loan volume, attract new users and stay ahead of the competition while enabling account holders to take control of their finances.

"We take the relationship between credit unions and technologies very seriously because we want to help credit unions successfully navigate the future so they can properly engage and retain their members, said Ryan Caldwell, MoneyDesktop CEO. "This is the whole point of everything we build at MoneyDesktop."

Since 2011, the CUNA Technology Council has presented the Best of Show award to the speed round sponsor that demonstrates a commitment to delivering technology that will further the growth of products and services in the credit union marketplace. Vendors' products are evaluated by attendees during speed round presentations at the conference.

IBloombergI PowerBall advice Use Save to Win instead

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NEW YORK (12/4/12)--States nationwide should consider expanding prize-linked savings (PLS)--such as Save to Win, a PLS program for Michigan credit unions launched by the Michigan Credit Union League--according to a Thursday Bloomberg column by Zara Kessler.

The article was written after two people split the record $587.5 million Powerball jackpot last Wednesday (Michigan Monitor Dec. 3.).

PLS is better than a lottery because those who don't win with PLS can keep the money they deposit in their accounts, Kessler wrote.

"In January 2009, the Doorways to Dreams Fund helped launch 'Save to Win,' (STW) the first scaled PLS program in the U.S., in eight Michigan credit unions," Kessler said. "Members of the credit unions were given the chance to save in a one-year, balance-building share certificate that earned interest; the accounts required only $25 to open, and each $25 added gave the account-holder a raffle entry (up to 10 per month) for monthly prizes and a $100,000 annual grand prize.

"By 2011, STW Michigan had over 25,000 unique accounts, with over $40 million saved at dozens of participating credit unions," Kessler continued. "This year, the prize design was altered to offer more chances to win at lower levels and a STW program was launched in Nebraska credit unions. North Carolina and Washington state will launch STW programs in 2013."

Because many states have legal hoops on lotteries, she suggested a federally sponsored program might be possible.

To read the column, use the link.

Top 10 iNews Nowi stories for November (12/03/2012)

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MADISON, Wis. (12/4/12)--A story about the Credit Union National Association's (CUNA) outrage over the National Credit Union Administration's (NCUA) planned 2013 budget increase was the most read News Now article in November.

The list of Top 10 stories for November includes:

10. CFPB remittance rule to be delayed, tweaked

WASHINGTON (11/27/12)--The Consumer Financial Protection Bureau has announced its intentions to make "certain limited adjustments" to its recent final rule on international money transfers--also known as remittances.

9. Small biz stories highlight a day of MBL advocacy

WASHINGTON (11/29/12)--Dayton, Ohio-area real estate developer Jerry Bush said he might not still be in business today were it not for his credit union.

8. Robbery suspect shot dead by intended victim at ATM

ORLANDO, Fla. (11/20/12)--A suspected robber was shot dead Friday by his intended victim at a drive-through ATM at the Fern Park, Fla., branch of Orlando, Fla.-based Fairwinds CU.

7. CUNA identifies CU tax language is an error in bill

WASHINGTON (11/15/12)--When the full text of H.R.6474 became available Wednesday and CUNA identified language within that threatened the federal income tax exemption for federal and state-chartered credit unions, CUNA and the League of Southeastern Credit Unions immediately arranged meetings with the office of the bill's drafter, Rep. Dennis Ross (R-Fla.), and learned an error had been made.

6. NCUA reduces TCCUSF high estimate by $400M

ALEXANDRIA, Va. (11/2/12)—NCUA on Thursday revised projections for the total cost of corporate credit union stabilization assessments to between $6 billion and $8.9 billion, a $400 million reduction from the previous maximum cost of $9.3 billion.

5. Senate vote on MBL bill expected this week

WASHINGTON (11/26/12)--CUNA Monday told its membership to expect a vote this week--probably within the next 48 hours--on a Senate bill that would lift the credit union member business lending cap to 27.5% of assets, up from the current 12.25%.

4. Bank Transfer Day at one year: Love affair continues

WASHINGTON (11/5/12)--CUNA  has distributed a radio news release to stations around the U.S. in anticipation of today's one-year anniversary of Bank Transfer Day, which marked a lovefest for credit unions as consumers fled high-fee banks for sensible financial services.

3. N.Y., N.J. leagues update CUs' status, report 'significant' losses

ALBANY, N.Y., and HIGHTSTOWN, N.J. (11/2/12)--The leagues in New York and New Jersey sent out updates this afternoon on the latest assessments of credit unions in their states impacted by Hurricane/Superstorm Sandy Monday and Tuesday.

2. Fake pop-ups injected into online banking transactions

MADISON, Wis. (11/14/12)--The latest version of the Citadel banking Trojan malware has something malware analysts have never encountered before:  a browser malware that launches fake pop-ups during online banking transactions and tricks online users into re-entering their bank and credit union account logins and passwords.

1. CUNA outraged by NCUA's proposed 2013 budget

WASHINGTON (11/15/12)--CUNA is outraged by the National Credit Union Administration's planned 2013 budget increase, and will be pursuing this with other policymakers to achieve greater accountability and transparency in the agency's budgetary process, CUNA President/CEO Bill Cheney said today.

Landscape firm MBL extends beyond banking biz

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SALEM, Ore. (12/4/12)--Valley CU's relationship with Green Acre Landscaping extends beyond just banking and business needs. But it began with a member business loan.

Green Acres Landscape has been in business 20 years. Valley CU has been the critical factor in enabling the Salem, Ore.-based company to survive the recession, Richard Kansky, president of Green Acres told the Northwest Credit Union Association (NWCUA) (Anthem Recap Nov. 29)

Green Acres was impacted by the downturn in the housing sector, Kansky told the league. The company met its profit goals by relying more on volume and a wider mix of services.

The relationship with Valley CU helped the business weather other changes in the industry that are directly related to today's economic reality, Kansky said. "It is so important to be able to sit across the table from someone who understands your business needs and has the authority to address those needs," Kansky told the NWCUA.

Valley CU demonstrated that understanding by showing flexibility and providing common-sense responses to the company's specific issues, Kansky said.

"Our customers are holding on to their money longer, and often we will not get paid for 60 or 90 days after we complete the work," Kansky said. "That creates a real cash-flow problem, but Valley understands the dynamics of the business and provides us the credit lines needed to address those delays."

Kansky had a previous relationship a major national bank, but Green Acres' credit line was slashed by nearly 70% when the economy turned sour. The bank did not make the change because of a credit issue, Kansky said. "They were just changing their policy, and we really had no recourse," he told the league. "The credit union took the time to understand our business, and it has been a great asset for us."

Today, Green Acres Landscape employs 45 people full-time, with more temporary jobs created on a seasonal basis.

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. CUNA and credit unions say that increasing the cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.