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Javelin says 5.6M people switched from banks

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SAN FRANCISCO (2/2/12)--New research highlighting the impact of Bank Transfer Day and the Occupy Movement on the financial services industry estimates that 5.6 million U.S. adults with a banking relationship switched their providers in the past 90 days.

That's nearly three times more than people who moved funds from large banks for similar reasons the previous 90 days, said Javelin Strategy and Research.

It is "the first time we have market research data to measure the impact on the financial services industry," said James Van Dyke, founder of the San Francisco-based Javelin in a blog on the company's website last week.

Of the 5.6 million who switched, 610,000 U.S. adults or 11% cited Bank Transfer Day as the reason they moved their accounts from large institutions to smaller institutions, such as credit unions and community banks, said Van Dyke.

He noted that a Google search of  "bank transfer day" yielded 22 million responses. The company is not surprised at the results.

Javelin's nine years of customer-transaction research indicates that people are highly resistant to moving their money, Van Dyke said. For example, Huffington Post's 2008  "failed to barely register in previous Javelin surveys. Yet this time, Bank Transfer Day and the Occupy Movement did have a measurable impact," he added.

Of the 11% of actual bank switchers who cited BTD, 26% said they switched because the bank charged too many fees during the 90 day measurement period.

The blog also noted that individuals who state dissatisfaction with their banks have reasons that range from customer service to rates and fees.  Some individuals switch banks because they are relocating their primary residence, which points to the essential importance of a local branch or ATM. "The transition to electronic money inches steadily forward, but the evolution is far from complete."

"Javelin urges banks and credit unions alike to increasingly focus on sustainable mutual-prosperity for both provider and customer," he said, noting that technology can increasingly help make a shared-value approach possible.

The findings are from an online survey of 5,878 consumers filed in December.

CUNA Mutuals CMIS now a mutual insurance holding company

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MADISON, Wis. (2/2/12)--CUNA Mutual Insurance Society  (CMIS) is now a mutual insurance holding company. The reorganization of its structure was effective Wednesday. As a mutual holding company (MHC), CMIS is changing its legal name to CMFG Life Insurance Co.

Although the name changes, there is no change in control of the company, which will continue to be mutually owned with the same policyholders having full ownership of the new parent mutual holding company (MHC)  entity. The company and its subsidiaries will continue to use the trade name "CUNA Mutual Group."

CUNA Mutual Group received approval in October from the Iowa Insurance Commissioner for its plan for the new ownership structure, which was approved by more than 90% of policyholders in September.

"The conversion to a mutual holding company structure maintains policyholders' rights and significantly enhances our ability to compete and serve," said Jeff Post, president/CEO of CUNA Mutual Group. "This is a natural and positive step in our continuing commitment to credit unions and to the successful and proven strategy we have been pursuing in recent years."

Insurance policies and annuity contracts remain the same, and policyholder benefits and rights will not be reduced or altered, said the company, which added that premiums will not increase as a result of the MHC corporation.

VolCorp W.Va. Corporate receive members merger approval

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NASHVILLE, Tenn., and PARKERSBURG, W.Va. (2/2/12)--Members have given final approval to the merger of West Virginia Corporate FCU, Parkersburg, W.Va., and Volunteer Corporate FCU, Nashville, Tenn., the corporates announced Wednesday.

Volunteer will be the surviving entity, with offices in both Nashville and Parkersburg, the corporates said. Both corporates went into the union with capital commitments that will create a strong institution exceeding minimum regulatory requirements, they said.

The combined membership vote was 147-7 in favor of the merger, for an approval rate exceeding 95%.  Also, 82% of West Virginia Corporate's members agreed to invest in Volunteer Corporate PPC, using the same formula that applied to previous VolCorp members.

The combined corporate will have more than 250 PCC owning credit union members located in seven states. Assets will be about $1.4 billion, while capital will be about $72 million.

The National Credit Union Administration approved the merger at a closed on Jan. 26 (News Now Jan. 27).

Michigan league redirects small-CU fund

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LANSING, Mich. (2/2/12)--The Michigan Credit Union League (MCUL) is redirecting the former MCUL Small-Asset-Size Initiative Fund to include all affiliated Michigan credit unions, regardless of size, and based on need. It will be renamed the MCUL Credit Union Assistance Fund.

Because of the success of the league's subsidiaries and the continued support from affiliated credit unions, the league said it is increasing the fund to $100,000 from $70,000 (Michigan Monitor Jan. 30).

The league explained it wants to offer assistance to the state's credit unions facing the most significant financial challenges.

While the funds will assist fewer Michigan credit unions, the league will take a more targeted approach to assisting credit unions in need by offering free or discounted services on regulatory compliance, board governance, income improvement, education, marketing and asset liability management.

CU System briefs (02/01/2012)

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  • LANSING, Mich. (2/2/12)--Michigan's Office of Financial and Insurance announced a new organizational structure for the office, which regulates state-chartered credit unions and other financial institutions, said the Michigan Credit Union League (Michigan Monitor Jan. 30).  The new structure consolidates similar and/or complementary functions within divisions, and better uses the skills and regulatory experience of the staff, said OFIR Commissioner Kevin Clinton.  The major changes include the consolidation of consumer finance-related activities under a Consumer Finance Division that centralizes insurance examination and monitoring functions under an Insurance Evaluation Division and the consolidation of rate and form review responsibilities within an Insurance Rate and Forms Division …
  • PORTSMOUTH, N.H. (2/2/12)--A fifth arrest has been made in the  Dec. 19 robbery of Northeast CU, Manchester, N.H. Merry Beth Miner, 34, Laconia, was arrested on a felony charge of criminal liability to robbery. Walter Williams, 43, and Prince Sage, 27, were charged with robbery. Shyloe Johnson, 24, also was charged with criminal liability. Also arrested was Katie Falls, 28, Meredith, who allegedly drove the other suspects to scout out the credit union the day before the robbery. During the incident, two masked men entered the credit union office. One man held a gun while the other took money from teller drawers and the vault. The robbers fled with $60,000 (Union Leader Jan. 31) …
  • FAIRBANKS, Alaska (2/2/12)--Jessica Nel Brown, 33, of Fairbanks, Alaska, is charged with robbing a credit union hours before she was scheduled to appear in court on an unrelated theft charge (The Republic Jan. 31). Brown is charged with holding up a Fairbanks branch of Anchorage-based Alaska USA FCU at 12:40 p.m. Monday. Police said Brown allegedly walked into the branch and passed a robbery note to a teller. She as arrested in a vehicle at 3 p.m. Police said  Brown allegedly had a money envelope from the credit union at the time of the arrest … 
  • SEATTLE (2/2/12)--The board of directors at Seattle Metropolitan CU has named Richard Romero as CEO, effective in mid-February. Romero has more than 24 years'  financial services experience, most recently as chief operations officer at the $820 million asset Los Angeles Firemen's CU from 2004 to 2012. There he led teams responsible for consumer lending, member services, operations, call center, facilities, real estate and business services, commercial lending and information technology. From 2000 to 2002 he served as director of Branches and as vice president at Telesis Community CU, Northridge, Calif. Before that he worked in various positions at Washington Mutual and Great Western Bank …

Dakotas CU Foundation offers fin. literacy grants

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BISMARCK, N.D. (2/2/12)--The Credit Union Foundation of the Dakotas has grants available to community organizations and credit unions affiliated with the Credit Union Association of the Dakotas.

The foundation is funded by participating North and South Dakota credit unions. It funds projects in the areas of access to financial services, financial education, savings and asset accumulation, and small credit union development.

The foundation's grant committee will consider grant proposals throughout the year. Applications are due March 31.

Funds may be used for these purposes:

  • Education of credit union employees and volunteers;
  • Public education initiatives related to consumer finance;
  • Projects and programs that support new, small or community development credit unions;
  • Enhancement to league/association projects funded by other sources that are consistent with the foundation's mission and purposes;
  • Programs or projects that extend credit union services to the full range of membership, with emphasis on un-served, underserved or low-income consumers;
  • Affordable housing projects;
  • Disaster relief;
  • Partnerships that provide services or carry out projects consistent with the foundation's mission and purposes; and
  • Other purposes consistent with the foundation's 501(c) (3) mission and purpose.

Those applying must meet these criteria:

  • Be an affiliated North and South Dakota Credit Union or a community organization.  Non-credit union organizations may apply for grant funding, but must partner with a North or South Dakota credit union and clearly demonstrate how the project will impact credit unions and their members.
  • Solicit endorsement and/or funding from at least one local credit union or credit union-related supporter.
  • Be able to leverage funds from other community, philanthropic, government or other sources to maximize the benefit and ensure sustainability at the conclusion of the grant.
  • Obtain letters confirming in-kind support or funding commitments from partners within and outside the credit union movement.
  • Have tangible, achievable goals and objectives.

Organizations obtaining funds will be required to file a grant report. The report should include a summary of the project or event, and how the funds were used.

Applications for crashing the GAC due Friday

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MADISON, Wis. (2/12/12)--Applications to "crash" the Credit Union National Association's (CUNA) Governmental Affairs Conference (GAC) are due Friday.

The CUNA GAC will be held March 18-22 in Washington, D.C.

Fifteen young credit union leaders will be selected to Crash the GAC, said the Filene Research Institute.

The previously named "Crash Network" has been renamed the "Cooperative Trust," which carries the support of three-year seed funding from CUNA Mutual Group.

Crashers will design new ways for credit unions to use the cooperative model to grow, improve their communities and heighten advocacy. The crasher group with the most promising initiative, chosen by a panel of judges, will present its concept and results at CUNA's Community & Growth Conference in October.

Held for a third consecutive year, Crash the GAC will include many of its familiar elements. CUNA's Center for Professional Development has offered full scholarships for crashers to attend the conference. Crashers will attend conversational mentor sessions with system leaders, hill hikes to meet their state's representatives, and the Thunderpunch Party.

In addition to Crash the GAC, the Cooperative Trust has three national and four regional events planned with many new opportunities, including a second round of The Collider innovation tournament.

CU credit-quality metrics stabilized in December

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MADISON, Wis. (2/2/12)--Credit union credit-quality metrics stabilized in December, while 2011 saw a rise in credit union assets and a reduction in the overall number of credit unions, according to a Credit Union National Association (CUNA) economist's analysis of December's monthly sample of credit unions.

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"Credit union credit-quality metrics have stabilized at a relatively high level," Steve Rick, CUNA senior economist, told News Now. "Credit union loan delinquency rates averaged roughly 1.6% since March 2011, after falling from the recent high of 1.88% in March of 2010. With the economic recovery continuing through 2012, we expect the unemployment rate to continue to fall, albeit slowly, which should put further downward pressure on the loan delinquency rate."

For December, credit unions' 60-plus-day delinquency rate remained at 1.6%, the monthly estimates said.

Credit union loans outstanding increased about 0.4% during December, compared with a 0.1% gain in November. Credit card loans led loan growth with a 2.4% rise, followed by fixed-rate mortgages (1.9%), unsecured personal loans (0.9%) and used-auto loans (0.4%). New-auto loans and home equity loans each decreased 0.4%, and adjustable-rate mortgages declined 1.2%. Credit union loans totaled $586.3 billion, compared with $580.3 billion in December 2010, said the monthly estimates.

"Credit union loan balances increased 1% in 2011, a slight turnaround from the 1.2% drop in loan balances in 2010, according to CUNA's monthly survey of credit unions," Rick said. "Last year was the third consecutive year of basically little-to-no loan growth at credit unions.

"We expect loan growth in 2012 to be a little better, with forecasts of around 3%, as credit union members relieve some pent-up demand for durable goods such as automobiles and home furnishings," he added.

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Credit union savings balances grew 1.1% in December, compared with a 0.1% increase in November. Share drafts led savings growth with a 4.4% gain, followed by regular shares, which rose 1.3%, and money market accounts, which climbed 0.7%. Individual retirement accounts increased 0.4%, and one-year certificates increased 0.1%. Credit union savings in December totaled $846.7 billion--or $42.9 billion more than the $803.8 billion in December 2010.

The loan-to-savings ratio decreased slightly to 69%. Credit unions' liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 18%.

The movement's overall capital-to-asset ratio remained at 10%. The total dollar amount of capital is $101 billion.

Overall, last year saw an increase in credit union assets, while there was further consolidation in the industry. "Credit union assets rose 5.3% in 2011 to reach $847 billion, while the number of credit unions fell 3.4% to 7,339," Rick said.

Legislative bus tour visits Maine league praises CUs

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PORTLAND, Maine (2/2/12)--A bus tour designed to give state lawmakers a flavor of businesses and organizations across Maine pulled in Jan. 12 for a visit with the Maine Credit Union League, which was one of the sponsors of the tour.

Maine's House Assistant Minority Leader, Teresea Hayes, poses with Phil Moreau, president/CEO of Rainbow FCU and chair of the Maine Credit Union League's Governmental Affairs Committee at the Maine Development Foundation's Legislative Bus Tour. The league was a sponsor of the visit.
The league hosted a dinner and reception for nearly 60 legislators and guests during the Maine Development Foundation's Legislative Bus Tour. Legislators visited with attendees, received an update on credit unions and asked questions about credit unions' perspective on issues.

During the event, Maine House Assistant Majority Leader Andre Cushing III noted  he is "a proud member of Maine Savings FCU, which is located in my hometown of Hampden, and I see first-hand the benefits that they provide to members and the community," reported the league in the February monthly newsletter, News&Views.

House Minority Leader Teresa Hayes told the group, "I love my credit union and the services it offers."

Among the lawmakers attending were two credit union volunteers: Rep. John Picchiotti, board chair at KSW FCU, Waterville, and Rep. Ray Wallace, a member of the Supervisory Committee at Maine Highlands FCU, Dexter.  Both reiterated how supportive the league and credit unions are in the legislature.

Maine State Rep. Andre Cushing III, assistant house majority leader, was among lawmakers attending the Maine Credit Union League's dinner and reception for the Maine Development Foundation's Legislative Bus Tour. He is pictured here with Quincy Hentzel, the league's director of governmental affairs. (Photos provided by the Maine Credit Union League).
Rep. Wes Richardson, chair of the House Insurance and Financial Services Committee, noted the  league's and Maine credit unions' interactions with his committee.  "You do a great job and are well-respected in Augusta." Rep. Joan Nass, chair of the House Judiciary Committee, added that "Maine credit unions are such great advocates for consumers, and are always willing to work with me on important issues."

At the event, league President John Murphy highlighted credit unions' role in Maine's economy, noting they help 615,000 members and employ more than 2,100 full-time and part-time employees. He compared credit union statistics to those cited before a similar legislative bus tour in 2009. From January 2009 to September 2011, credit unions increased loans outstanding by $260 million to $3.6 billion, and members deposited an additional $800 million into credit union savings accounts.

"The increase in lending during the period when other lenders were pulling back, and the significant increase in deposits as consumers staged a very quick 'flight to safety,' clearly demonstrate the important role that Maine credit unions play in our economy," Murphy said.

ID theft among top consumer complaints in Wisconsin

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MADISON, Wis. (2/2/12)--Identity theft--already one of the nation's fastest growing crimes--has made its first appearance among the top 10 consumer complaints in Wisconsin in 2011, ranking fifth, according to Wisconsin Department of Agriculture, Trade and Consumer Protection.

"For identity thieves, accessing personal information like Social Security numbers, credit card numbers, and financial account information is like winning the lottery," said Sandy Chalmers, Division Administrator of Trade and Consumer Protection. "Remember that identity thieves will do or say anything to get their hands on your personal information."

Consumers should use extreme caution when sharing personal information online and safely maintain credit reports and bank statements, Chalmers said. Consumers should report irregular activity to their financial institution or credit card company.

Credit unions can alert members when any questionable activity occurs on their members accounts.

Also, the Internal Revenue Service (IRS) and the Justice Department recently completed a crackdown on suspected identity theft perpetrators as part of a stepped-up effort against refund fraud and identity theft.

The nationwide sweep, led by the Justice Department's Tax Division and local U.S. Attorneys' offices, targeted 105 people in 23 states. The initiative took place over the last week and included indictments, arrests and the execution of search warrants involving the potential theft of thousands of identities and taxpayer refunds. In all, 939 criminal charges are included in the 69 indictments related to identity theft.

IRS auditors and investigators also conducted about 150 compliance visits to check-cashing businesses in nine locations nationwide in the past week. The visits were made to help ensure these check-cashing facilities weren't facilitating refund fraud and identity theft.

The IRS has more than 250 check-cashing operations under audit nationwide to look for indicators of identity theft as part of the exam effort.The information from these audits and compliance visits will be used to assist continuing IRS investigations into refunding fraud and identity theft.

McGraw-Hill FCU launches green awareness campaign

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EAST WINDSOR, N.J. (2/2/12)--McGraw-Hill FCU has launched a solar energy awareness campaign around a renewable energy and solar panel project at The McGraw-Hill Companies' offices in East Windsor, N.J.

McGraw-Hill FCU's new awareness campaign centers around a renewable energy and solar panel project at The McGraw-Hill Companies' offices in East Windsor, N.J. The 70-acre solar facility will be fully operational in March. (Photo provided by McGraw Hill FCU)

The initiative includes an informational website, Facebook updates, and presentations at the credit union's Financial Literacy Series.

The new website provides information on McGraw-Hill Companies' solar energy project, advice for consumers considering solar energy, and links to external websites about solar energy.

Also, plans are underway to incorporate green energy advice into the credit union's monthly Financial Literacy Series seminars.

The inspiration for the renewable energy campaign came from The McGraw-Hill Companies' construction of one of the nation's largest solar energy projects on its property in East Windsor. The solar project will generate 14.1 megawatts of energy and significantly offset the need for other energy sources.

The solar facility sits on 70 acres of land across the street from the company's offices. It is reportedly the largest privately-owned, net metered solar project in the Western Hemisphere. Net metering, or net energy metering, is an electricity policy which allows utility customers to offset some or all of their energy use with self-produced renewable energy. The project is being coordinated with the involvement of NJR Clean Ventures, a subsidiary of New Jersey Resources, which promotes increased energy efficiency and the use of clean, renewable sources of energy, including solar, wind, geothermal and sustainable biomass.

"We were eager to support this initiative by showing our members how to make a difference" said Shawn Gilfedder, McGraw-Hill FCU president/CEO. 

Earlier this year, the credit union launched a "Solar Certificate of Deposit (CD)." Members responded by opening 160 CDs.