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CUs not immune to the weather

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MADISON, Wis. (2/2/11)--Regional groundhogs, prognosticators of just how long winter will last, got a good dose of their own medicine the past two days. Credit unions and leagues throughout the Plains, Midwest, South and Northeast began closing Tuesday in preparation for the night's snow and ice storm, billed as "potentially historic." Much of the nation was in winter's grip last night. Winter watches were posted Tuesday for 31 states, from New Mexico to Maine--more than 2,000 miles, said USA Today. A 2,100 mile path from the southern Plains to coastal New England was told to expect from a foot to 20 inches of snow. Just south of the area, another 1,500 mile stretch was expecting ice. The weather would affect nearly a third of the nation's population. The Credit Union National Association (CUNA) closed its Madison, Wis., offices at 2 p.m. Tuesday so staff could beat the storm home. CUNA's Madison office remains closed today. As of midnight the city had acquired at least 12 inches of new snow amd was still under blizzard conditions. News Now canvassed some leagues Tuesday to see how they were doing. A number reported closures, while others made contingency plans for today. All day long credit union folks from different regions checked in with each other, comparing weather notes. Their e-mails often ended with "stay warm," and "drive safe." Kansas Credit Union Association (KCUA) President/CEO Marla Marsh closed KCUA at 3 p.m., but its Expandacheck division still processed until 4 p.m. In Wichita, conditions were snowy and windy with winds of 35 mph and gusts up to 43 mph. Ten credit unions had closed "due to the inclement weather," said Susan Dyer, communications specialist, who was working remotely from home. They included:
* Emporia State FCU * CU Leavenworth County, which closed at noon; * First Choice CU, closed at noon; * Wakarusa Valley CU; * Campus CU; * USPLK Employees FCU; * Kansas Teachers Comm. CU * CU of Emporia; and * Meritrust, which closed at 2 p.m.
The Texas Credit Union League said its offices in Dallas would not open Tuesday and it would monitor conditions for today. The Dallas Fort-Worth airport canceled hundreds of flights. The Indiana Credit Union League and Servicecorp office closed at 3 p.m. Tuesday, and staff worked remotely because of "increasingly severe winter weather--a more intense ice storm moving into the Indianapolis area" and the "dangerous driving conditions around our office," said Kay Neidlinger, vice president of communications. The Missouri Credit Union Association (MCUA) said its St. Louis offices would open late today at 10 a.m. The Kansas City and Jefferson City offices remained closed due to the winter storm and snow accumulation, said Amy McLard, vice president of public/legislative affairs. MCUA was closed Tuesday although its League Item Processing Center was open until early afternoon. "They are closing shortly, however, to allow staff to get home before the snow piles on top of the icy mix." Many credit unions "either decided to close Monday night after Gov. Jay Nixon put the Missouri National Guard on alert to assist with weather related issues, or closed early today," she told News Now. News reports said the area already had six inches of snow when the day began. The Credit Union League of Connecticut closed at noon, with staff working from home, said Ed Zagorski, director of communications. "As for tomorrow, we'll have to wait and see what happens." The Maine Credit Union League remained open, but Jon Paradise, governmental and public affairs manager, noted the region "is bracing for a bigger storm due tomorrow but, as of now, I am not aware of any closings." In Colorado, Timothy Dore, senior vice president of governmental affairs at the Credit Union Associations in Colorado and Wyoming, said the association was open Tuesday. He noted temperatures of -10 degrees and a windchill of -33, saying it was "too cold to snow more than a couple of inches." The Ohio Credit Union League was open for business yesterday, said Patrick Harris, director of media relations, adding he had not heard of any credit unions changing business operations and that precipitation had been less than expected so far. Most leagues were not making the decision on closures for today until this morning. Watch News Now and its LiveWire for updates today.

Bellco receives UBIT refund from IRS

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GREENWOOD VILLAGE, Colo. (2/2/11)--Bellco CU Tuesday received three checks totaling $291,691.62 from the Internal Revenue Service (IRS), the result of the Greenwood Village, Colo.-based credit union winning its challenge to the IRS's policy toward unrelated business income tax (UBIT) and its application to credit unions. Bellco CU CEO Doug Ferraro told News Now the three checks were "a full refund of the three years in which we sued over" the IRS's policy. He noted his law firm received the checks yesterday. "It nearly brought tears to the eyes of one staff member who worked on this case for so long," Ferraro said. "In the end, credit unions prevailed on every major issue in the lawsuit. It was a decisive blow to the IRS position on various elements of UBIT for state-chartered credit unions, and serves as a template for organizing insurance and investment activities in a way to ensure they are not subject to UBIT," he said. Judge Christine M. Arguello of the U.S. District Court of Colorado in Denver ruled in November 2009 that investment and insurance products sold by Bellco to members, including credit life and disability insurance and some other products, stocks, bonds, mutual funds and annuities, were "substantially related" to Bellco's tax-exempt purposes, and therefore the income from those activities was, under the law, exempt from UBIT (News Now Oct. 20, 2010). In October 2010, the U.S. Department of Justice abandoned its plans to appeal that ruling, prompting Credit Union National Association (CUNA) President/CEO Bill Cheney to call it "fantastic news because it means the government did not see enough merit in its own position to push it further in the courts." "The UBIT Steering Committee did a terrific job in finding an outstanding firm who fought hard for credit unions," Ferraro told News Now. The credit union was represented in the lawsuit by law firm Foley & Lardner LLP and lead attorney Michael M. Conway. Ferraro thanked the UBIT Steering committee--comprised of CUNA, the American Association of Credit Union Leagues, CUNA Mutual Group and the National Association of State Credit Union Supervisors (NASCUS)--"for their leadership in fighting this much-needed battle." The case was the second time within a year that a U.S. District Court had upheld credit unions' challenges to UBIT rules. In 2009, Community First CU, Appleton, Wis., was ruled exempt from UBIT on income from credit life insurance, credit disability insurance and GAP coverage (News Now April 6, 2010).

Kentucky league KYCUL Services boards named

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LOUISVILLE, Ky. (2/2/11)--The Kentucky Credit Union League has
Kentucky CU League's board of directors' executive committee includes from left, front row, second vice chairman, Alesha Saalwaechter; lst vice chairman, Steve Sharp; chairman, Huston Reinle; secretary, Lynn Huether; and treasurer, Henry Wheatley. Other directors, back row, include: John Graham, Brian Tylers, John Graham, Brian Tyler, Ed Wessel, Sharon Board, Laurene Young, Bennie Hoppius, Joann Mason, Larry Lucas, and Carl Hicks (Photos provided by the Kentucky Credit Union League)
announced its 2011 boards of directors for the league and for its subsidiary, KYCUL Services Inc. (By the Way Feb. 1). Executive Committee members of the league board include:
* Chairman, Huston Reinle, director-at-large; * First vice chairman, Steve Sharp, director-at-large; * Second vice chairman, Alesha Saalwaechter, director-at-large; * Secretary, Lynn Huether, director-at-large; and * Treasurer, Henry Wheatley, volunteer director.
KYCUL Services Inc.'s 2011 board of directors include, from left, front row: Steve Sharp, first vice chairman; Mike Fromma, chairman; and Henry Wheatley, treasurer. Back row, Larry Moore, director-at-large; Alesha Saalwaechter, second vice chairman; Lynn Huether, stockholder director; and Carl Hicks, secretary.
Other members of the board include:
* John Graham, * Brian Tyler, * Ed Wessel, * Sharon Board, * Laurene Young, * Bennie Hoppius, * Joann Mason, * Larry Lucas, and * Carl Hicks.
KYCUL Services Inc. board officers include: Chairman, Mike Fromma; First vice chairman, Sharp; Second vice chairman, Saalwaechter; and Treasurer, Wheatley. Other directors include: Larry Moore, Huether, and Hicks.

Savings promo raffles catching on

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MADISON, Wis. (2/2/11)--American consumers have a hard time saving. But they love to play the lottery. Credit unions across the country are taking advantage of consumers’ passion for “that one chance to win big” and enticing them to save at the same time. Credit unions are offering lottery-type drawings for groups of members who make the sacrifice to sock their money away. The concept is straightforward: Members put money in a savings or certificate of deposit account for a chance to win monthly prizes and a grand prize. The more they save, the better their chances of winning. The trend began in the U.S. in Michigan in 2009 with the “Save to Win” program, an idea conceived by finance professor Peter Tufano of Harvard Business School. Through Doorway to Dreams, a foundation that seeks innovative ways to bring financial services to lower-income families, Tufano joined with the Michigan Credit Union League and the Filene Research Institute to pilot the program with eight state credit unions. Members who put $25 or more into a Save to Win one-year CD were entered into a monthly raffle for prizes up to $400, plus one annual drawing for a $100,000 jackpot. Participants could save a maximum of $250 a month--or 10 chances at winning the raffle drawing In 2009, the program attracted more than 11,600 savers who saved $8.6 million. Since then, eight additional states have moved forward with plans for prized-based savings programs. In 2009, Rhode Island, Maine and Maryland enacted laws that allow financial institutions to offers savings promotion or lotteries to boost consumer savings. Legislation is currently pending in five other states: Nebraska, Iowa, Mississippi, New Mexico and Washington. The economic meltdown was hard on consumers' retirement accounts, home equity and cash savings--the three major ways that Americans typically save money, said John Annaloro, the Northwest Credit Union Association's chief executive. Americans' personal savings rate was recently pegged at 5.3 percent. That's a major improvement from 2006 and 2007, when the rate turned negative for the first time since the Great Depression, but still far from the 10 percent saved in 1985 (Associated Press Jan 30). The programs are a “win” for states and consumers. Nebraska State Sen. Amanda McGill, in introducing the bill in her state, noted that the average American family spends $540 on lottery tickets (News NowJan. 25). Through savings raffles a state’s consumers are more financially stable. Consumers save more money--and still satisfy their urge to take a chance on winning big.

Top 10 INews NowI stories for January (02/01/2011)

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MADISON, Wis. (2/2/11)--Corporate stabilization and interchange, which dominated the News Now monthly top 10 stories list all year during 2010, didn’t crack the January top 10 list. The stories are: 10. CU Times’ parent co. files for Ch.11 bankruptcy NEW YORK (1/28/11)--Summit Business Media, the parent company of trade newspaper Credit Union Times and 12 other business-to-business publications, announced Wednesday it was filing for a Chapter 11 reorganization in a U.S. Bankruptcy Court in Wilmington, Del. 9. Four banned from future FCU work ALEXANDRIA, Va. (1/21/11)--Four former credit union employees have been banned from future work at any federally insured financial institution under prohibition orders issued by the National Credit Union Administration (NCUA). 8. CU-to-bank conversions declining MADISON, Wis. (1/14/11)--2010 was a year without a single credit union-to-bank conversion, and it arrived on the heels of two years in which only one such conversion per year occurred. News Now, sniffing a trend, decided to look closer and noted a decline in conversions since they peaked at eight conversions in 2001. 7. Technology 2011: What's next? Just three years ago, someone who mentioned “twitter” or “tweet” in a business meeting would draw blank stares. Today “Twitter” and “tweet” is part of the everyday lexicon, and using Twitter is an important branding vehicle for many companies, including credit unions. Who would have thought 140-character micro-blogging would become so vital? 6. NCUA applies salary freeze to part of work force ALEXANDRIA, Va. (1/5/11)--The National Credit Union Administration (NCUA) said yesterday it will apply President Barack Obama’s recent executive-ordered federal pay freeze to those agency employees whose salary increases were not negotiated under existing union contracts. These employees’ salaries will be frozen, NCUA Chairman Debbie Matz said, "and we will reduce our budget accordingly." 5. Truth-in-Savings changes finalized by NCUA The National Credit Union Administration (NCUA) on Jan. 13 finalized a rule that requires credit unions to disclose overdraft and returned item (NSF) fees on their members’ periodic statements. Under the rule, fees for both the statement period and for the year-to-date must be included on the disclosures. These and other changes to Regulation DD, the Truth in Savings Act, took effect on Jan. 1. 4. CUNA concerned by CARD Act creditworthiness standard WASHINGTON (1/5/11)--The Credit Union National Association (CUNA) in a recent comment letter said it is concerned by a Federal Reserve proposal that would require creditors to consider only an individual credit applicant's ability to make payments, and not other household income, when determining an individual's creditworthiness. 3. CUNA unveils extensive guidance on CU exam issues WASHINGTON (1/18/11)--After an exhaustive look at credit unions’ increasing frustrations, the Credit Union National Association (CUNA) has developed a bill of "examination rights," which is detailed and cross-referenced to the National Credit Union Administration's (NCUA) own examiner guide. 2. Supreme Court’s bankruptcy ruling a ‘positive for CUs’ WASHINGTON (1/13/11)—Tuesday’s 8-to1 ruling by the Supreme Court of the U.S. in favor of a creditor who contested a bankruptcy filer's disposable income deduction is a "positive for credit unions" or any creditor of unsecured debt in a Chapter 13 bankruptcy, according to Michael Edwards, Credit Union National Association (CUNA) counsel for special projects. 1. What CUs should do in 2011--CUNA economist MADISON, Wis. (1/7/11)--The Credit Union National Association’s (CUNA) 2011 Economic and Credit Union Forecast reflects expectations that the economy will improve, but the level of growth associated with the rebound will be lower than what is typically seen in an economic recovery. This has implications for credit unions' actions, says a CUNA economist.