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Two CUs lead in Visa EMV-chip card surge

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SAN FRANCISCO (2/21/12)--Two credit unions are at the forefront of the nation's attempt to catch up on the rest of the world's card payments systems by moving from magnetic-strip-based cards to the more secure Europay, MasterCard and Visa (EMV) chip-enabled cards that are popular overseas.

The credit unions--$23 billion asset State Employees' CU (SECU), Raleigh, N.C., and $3.4 billion asset United Nations FCU, Long Island City, N.Y.--were among  just five large financial institutions Visa named as early adopters in its announcement earlier this month  of  Visa Chip Services. Banks named as early adopters were Chase Card Services, U.S. Bank and Wells Fargo.

Visa Chip Services is new suite of services that help card issuers sidestep some of the infrastructure problems involved in authenticating EMV card transactions. Instead, Visa does the authenticating for them.

For example, the service's  iCVV service enables financial institutions to offer a more secure EMV-chip enabled card without costly, time-consuming technology investments. The iCVV is a special code that transmits with each transaction to prove the card is legitimate. It serves the same purpose as a magnetic-stripe card's CVV verification process. Visa converts the iCVV to a CVV before sending the transaction to the issuer, according to Visa's press release.

Another updated service is Visa's Chip Authenticate Service, which SECU uses. The service validates a separate cryptogram used by EMV and minimizes the need for the issuer to make authentication-related host system changes to verify the chip transaction data.

SECU "was able to build on Visa's expertise and solutions to engage quickly and launch an EMV chip card program in a matter of months, not years," said Leanne Phelps, senior vice president, card services at SECU. "The jump-start helped us to be a leader and provide our members the products and services they want and need."

Visa's EMV issuers have introduced chip card programs targeted primarily to international travelers. More than a dozen programs have been introduced since 2010.

As of Dec. 31, U.S. financial institutions had issued one million Visa branded, EMV chip cards. To put that into perspective, 18 months ago no Visa EMV contact chip cards existed in the U.S., Visa said in its news release.

Still a major roadblock continues to be merchants' reluctance to upgrade their terminals to accept the cards. Merchants say they are concerned over whether the U.S.-based chip cards would use the same level of security as the cards overseas (Bank Technology News Feb. 6).

S.C. CUs launch MADTAG campaign to make difference

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COLUMBIA, S.C. (2/21/12)--Credit unions throughout South Carolina have launched a pilot cooperative campaign called "MADTAG," hosting free and discounted gas giveaways in Charleston, Columbia, Florence and Greenville that brought media results far exceeding expenses, said the South Carolina Credit Union League (SCCUL).

The marketing task force that created the concept presented background and results Thursday at the South Carolina Credit Union Management Association (SCCUMA) meeting in Columbia.

The launch events were within a limited budget of $10,000 approved by the league's Media Committee. Yet, according to the marketing task force, the events led to an estimated $205,000 or more in media coverage from radio and television stations throughout the state.

MADTAG refers to "Make a Difference. Tag, You're It!" The campaign highlights acts of service and encourages South Carolinians to pass the goodwill along to others. The task force chose the gas launch to create a noticeable impact and prompt visits to www.madtag.org. There, credit unions can post their community involvement, while citizens touched by difference-making can comment and share their stories. 

"MADTAG is all about finding ways to 'Make a Difference' in the lives of others and our community," said Media Committee Chair Anne Shivers, who is CEO of Carolina Collegiate FCU in Columbia. "But we don't want it to stop there. Just like a game of tag, we want people to pass on the good deed to someone else."

The task force also shared with SCCUMA participants the background in creating MADTAG, including consideration of the assets carried from the former "Discover Our culture/itpays2CU.org" campaign and of grassroots support for "Every day is Bank Transfer Day" branding. The group saw limited value in itpays2CU.org based on its results and terminology, and noted that MADTAG and "Every day is Bank Transfer Day" serve different purposes and can be used simultaneously.

The MADTAG campaign--with SCCUL Media Committee approval--will feature three more service events per region and add a spring statewide radio campaign highlighting credit unions as difference-makers and sponsors of Children's Miracle Network Hospitals radio-thons in the state.

Members of Maple Hill CU vote to merge with Connexus

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WAUSAU, Wis. (2/21/12)--Members of Maple Hill CU voted Thursday to approve merging the Wausau, Wis.-based credit union with Connexus CU, also located in Wausau.

The special vote was conducted at Maple Hill CU's Annual Meeting, and the merger was "overwhelmingly approved," said the credit unions in a press release.

"While we are a strong credit union with a proud history of serving our members, stringent new federal regulations and requirements have made it impossible for us to generate a profit for the past three years," said Jack Kruit, Maple Hill board chair. "Rather than wait for a negative situation to arise, we decided to act in the best interest of our credit union and our members--as we always have--and recommend a merger with Connexus," he added.

"Connexus shares our values, has been an excellent partner to us in the past with mortgage services, and will honor our requests to keep our branches open and our employees serving our members," Kruit said.

"We appreciate the trust that Maple Hill has placed in us to serve its members' needs now and in the future," said J. David Christenson, president/CEO of Connexus.

The two credit unions expect the merger transition to be completed by the end of March.

Maple Hill, which has more than $11.3 million in assets and more than 2,000 members, was established on Sept. 10, 1965, at St. Mary's Hospital on Maple Hill in Wausau.

Connexus has more than $340 million assets and serves more than 30,000 members. It was established as Employers Mutual's CU in 1935 and changed its name to Wausau Insurance Employees CU in 1980. To reflect its growing membership, it changed its name again in 2003 to Connexus.

Wisconsin Assembly doubles CUs charity gifts

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MADISON, Wis. (2/21/12)--The Wisconsin State Assembly--at the request of credit unions in the state--has passed Senate Bill 356, which will allow credit unions to double their financial support for charitable and community organizations.

As was the case in the Senate, the bill was adopted with no dissenting votes, said the Wisconsin Credit Union League.

SB 356 increases credit unions' charitable giving limit, set in 1971 at 0.5%, to 1% of regular reserves. The State Senate passed the bill late last month.

"Wisconsin's member-owned financial institutions are socially responsible, [and] vested in and committed to making significant contributions to the communities they serve," said league President/CEO Brett Thompson.

Authors of the proposal are State Sen. Glen Grothman (R-20) and State Rep. Dale Kooyenga (R-14). The bill had more than 30 co-sponsors, he said.

Wisconsin credit unions support nearly 3,000 charities and programs, with hundreds of thousands of dollars of monetary, in-kind and volunteer support annually. That support is in addition to the more than $200 million that credit unions saved their member-owners in the form of lower rates on loans, higher rates on savings and lower and fewer fees for financial services in 2011.

Credit unions' social responsibility is detailed in the 2011 REAL Solutions Scorecard  for Wisconsin Credit Unions. Use the link.

Maine saw 1.2 M shared-branch transactions in 11

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PORTLAND, Maine (2/21/12)--Shared branching transactions in Maine broke records in 2011, with more than 1,219,000 transactions, said the Maine Credit Union League.

The state has more than 150 credit union shared branches in the Shared Branch Network--more than any single bank in the state, the league added (Weekly Update Feb. 10). The network has more than 4,400 locations nationwide.

"This high number of total transactions illustrates how Maine credit unions are meeting the consumer demand for convenience through this expanding network of shared branches," said league President John Murphy. "Sharing the fact that we have more branches than any single Maine bank is an effective way to attract new members, especially Gen Y, a demographic that is important to the continued growth of credit unions," Murphy added.

The league is launching a new Shared Branch campaign that features seasonal stories told by members--such as snowbirds heading for sunnier climates and snowmobilers heading north for recreation--who share how a shared branch helped save the day.

All ads direct consumers to a microsite, MyCUshares.com, which went live last week and features a Shared Branch locator.

Foreclosureaffordable housing bill passes N.J. committee

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TRENTON, N.J. (2/21/12)--The New Jersey Senate Economic Growth Committee Thursday approved a bill that would allow a state agency to buy and deed-restrict foreclosed properties for affordable housing.

The bill, S. 1566, would establish a central agency under the state's Housing and Mortgage Finance Agency to use the State Affordable Housing Trust Fund to buy foreclosed properties, said the New Jersey Credit Union League  (The Daily Exchange Feb. 17).

State Sen. Ray Lesniak (D-20) introduced the bill last week, and a companion bill was introduced Thursday by Assemblyman Jerry Green (D-22), the league said. The measure now goes to the Senate Budget and Appropriations committee before consideration in the full Senate.

The legislation would turn 10,000 foreclosed homes into 10,000 affordable homes, and the "Foreclosure Relief Corp." would give municipalities 45 days to decide whether they want the vacant properties converted to affordable housing before the corporation goes into a market rate bulk sale.

Hanscom FCU launches insurance agency

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HANSCOM AFB, Mass. (2/21/12)--Hanscom FCU, located at Hanscom Air Force Base, Mass., has opened its own insurance agency.

Hanscom Insurance Agency will provide car insurance, homeowners insurance, life insurance, business insurance and renters insurance, as well as specialty products such as wedding and pet insurance.

The agency will use quotes from multiple insurance carriers, the credit union said.

"Hanscom Insurance Agency is a natural fit for the credit union," says Paul Marotta, Hanscom FCU board chair. "The new agency will enhance Hanscom FCU's competitive position, and deepen its member relationships with insurance products that feature the best combination of price, convenience and selection."

Hanscom FCU has $938 million in assets.

CUs share opinions on BTD at NWCUA symposium

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BEAVERTON, Ore., and FEDERAL WAY, Wash. (2/21/12--The implications of Bank Transfer Day for credit unions were discussed by about 30 credit union leaders from Washington and Oregon  recently during the Northwest Credit Union Association's (NWCUA) first Leadership Symposium.

Bank Transfer Day and its implications for credit unions were among the topics discussed by Oregon and Washington credit unions recently at the Northwest Credit Union Association's first Leadership Symposium. (Photo provided by the Northwest Credit Union Association)
In a session facilitated by Denise Gabel, chief finance and strategy officer at Madison, Wis.-based Filene Research Institute, credit union CEOs and other leaders were asked if the outcome of Bank Transfer Day helped credit unions or hurt them, said NWCUA (Anthem Feb. 14).

Bank Transfer Day, on Nov. 5, more than 610,000 people switch accounts from large banks to credit unions and community banks on that day, according to Javelin Strategy and Research.

The 2011 membership numbers are being finalized, and annual growth is expected to follow general patterns of recent years, with spikes of growth for larger, marketing-savvy credit unions during last fall's run up to Bank Transfer Day, said NWCUA. Credit unions are waiting to see whether new members gained during the fall will translate to deeper relationships.

A regulator shared the opinion that it was good to see credit union awareness driven by real consumers, instead of by financial institutions and those who regulate them.

While credit unions have been effective in communicating why credit unions are better, said one credit union CEO, the credit union needs members to use both loans and savings. 

A popular refrain from members of the group: "You could not buy the positive publicity we go."

The CEO of a smaller credit union noted while her credit union didn't see a huge increase in membership, existing members opened more checking accounts. She called it a "great opportunity for us to build on" and added, "don't let it die."

The leadership group concluded that in the end, Bank Transfer Day presents an ongoing opportunity to market not merely membership but the full line of credit union products and services to new members, said NWCUA.

A regulator shared the opinion that it was good to see credit union awareness driven by real consumers, instead of by financial institutions and those who regulate them.

CU System briefs (02/17/2012)

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  • EUGENE, Ore. (2/21/12)--A former car dealer in Roseburg, Ore., was sentenced to three years and one month in prison for conspiring to commit bank fraud and defrauding $661 million asset Northwest Community CU, Eugene, and PremierWest Bank for a combined loss of almost $3 million (The News-Review Feb. 15). Dave Gilbert, 64, allegedly timed deposits of checks from accounts at one financial institution into the other so the bank and credit union both honored checks even when balances were insufficient to cover them. Prosecutors claimed the scheme provided Gilbert with the equivalent of interest-free loans that were unauthorized and unsecured. More than 500 checks totaling $1.9 million were deposited between Dec. 1 and Dec. 9, 2008. The court ordered Gilbert to pay restitution of $1.9 million …
  • FAIRBANKS, Alaska (2/21/12)--Two women were arrested on felony robbery and theft charges related to a robbery at the Fairbanks branch of $109 million asset True North CU, Juneau. The women are accused of using the drive-through lane's pneumatic tube to send a note claiming there was a bomb inside the branch (Fairbanks Daily News-Miner Feb. 14). The note said the bomb would go off unless the teller filled the tube's carrier with cash. The teller sent $2,198 to the van's occupants while staff checked its license plate. Police quickly spotted the van nearby and arrested Jenesa French Kempski and Paulette Josephine Akerelrea, who were held without bail. Akerelrea was also cited for driving after revocation …
  • SALT LAKE CITY (2/21/12)--The U.S. Small Business Administration's (SBA's) Utah District named $2.9 billion asset Mountain America CU as its 2011 Lender of the Year for business lending performance. Mountain America also received the 2011 Blaine Andrus Memorial Award for community efforts and diversity of its small business lending programs. Mountain America has led the nation's credit unions in SBA lending for the past eight years, the credit union said in a press release. Pictured are staff from the credit union. (Photo provided by Mountain America CU) …
  • SAN JOSE, Calif. (2/21/12)--Technology CU has received designation as a "preferred lender" for Small Business Administration (SBA) guaranteed loans. Preferred lender status allows the $1.5 billion asset credit union to document and process SBA loan requests on behalf of the SBA for loans ranging from $25,000 to $5 million. Mark Quinn, director of SBA San Francisco District, said San Jose, Calif.-based Technology CU ranked in the district's top 20 lenders for guaranteed loans for the year that ended Sept. 30, 2011. Technology CU has added Niki Wong as vice president of commercial and industrial loans to prepare for the demand for SBA loans and other commercial loans …
  • NEW YORK (2/21/12)--Michael J. Connery will retire as president/CEO of United Nations FCU on Jan. 1, 2013. Connery, 67, has led United Nations FCU for almost 24 years. During that period, the credit unions' membership grew from 18,000 to more than 95,000, while assets increased from $235 million to $3.5 billion. A statement from the United Nations FCU Board of Directors said it is relying on its two-year-old succession plan and working with an executive recruiting firm to identify leadership candidates …
  • COCOA BEACH, Fla. (2/21/12)--John R. Eggleston, 79, died Feb. 13. During his lengthy career, Eggleston served as president of Kennedy Space Center CU, Space Coast CU and Community Educators CU and earlier as assistant manager of Navy Orlando FCU. He also was president of the Central Florida Chapter of the Florida Credit Union League as well as the Florida Credit Union Executives Society. Eggleston served in the Navy from 1951 through 1971, retiring as a lieutenant commander (Florida Today, Feb. 16) …