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CU System briefs (02/02/2010)

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* LENEXA, Kan. (2/3/10)--CommunityAmerica CU announced it paid Owner Participation Dividends totaling $500,000 to its members Monday. The 2010 payout brings the total dividends paid to its members for the past 10 years to more than $13 million, said the $1.734 billion asset credit union. Individual payments are based on the number of products and services each member uses (cjonline.com Feb. 1) ... * HARRISBURG, Pa. (2/3/10)--The Pennsylvania Credit Union Association (PCUA) announced the election results for PCUA board seats for Districts 3, 7, and 8. Newly elected were: Cookie Yoder, president/CEO of Pittsburgh FCU, and Bill Lavage, president/CEO of Service 1st FCU, Danville. Re-elected was Diana Roberts, president/CEO of Hershey (Pa.) FCU. They were elected to three-year terms that begin at the conclusion of the association's convention in May (Life is a Highway Feb. 2) ...

White paper Gen Y turn to parents for financial info

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ST. PETERSBURG, Fla. (2/3/10)--While members of Generation Y spend a third of their life logged on, they still turn to their parents for financial information and advice, according to a new white paper. That means credit unions have a unique resource in their current members who are parents of the young adults. Gen Yers, defined as people aged 18-30, total 90 million, says "Y: A Generation of Opportunity." The white paper was written by PSCU Financial Services, a St. Petersburg, Fla.-based credit union service organization (CUSO), and is available free online. (Use the resource link and click on "white papers.") The CUSO said the paper is the first of three white papers on Gen Y. It quotes several research studies and reports that marketing to Gen Y must involve social networking sites and offering a personalized approach when possible. Gen Y-ers are time-sensitive, so gaining their attention requires messages that emphasize 24/7 support, electronic banking and money management tools, the report says. "Credit unions have a unique appeal to this audience because young adults are skeptical of large, profit-hungry companies and favor cooperative institutions that can meet their needs while simultaneously giving back to the local community," said David J. Serlo, president, PSCU Financial Services. Attracting Gen Y is worth the effort, said the CUSO. Less than 40% of Gen Yers are satisified with their financial services provider, according to a 2009 Javelin Research study, and that discontent creates a tremendous opportunity for progressive credit unions, said PSCU Financial Services. A second paper in the Gen Y series will discuss developing a strong package of "youth-centric" solutions and financial education materials designed to build long-term relationships with young adults. PSCU Financial Services provides service to more than 1,300 financial institutions.

Irish league calls for separate CU regulator

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DUBLIN (2/3/10)--The president of the Irish League of Credit Unions called for the government to form an independent credit union regulator, saying the country's credit unions had serious concerns about new regulatory structures being proposed to deal with the banking crisis. Mark Bailey, president of the league, made the comments while speaking to the Joint Oireachtas Committee on Economic Regulatory Affairs (RTE Business Feb. 2). Bailey said credit unions are concerned the government will take a one-size-fits-all approach that could result in regulation of credit unions that would be excessive and disproportionate. He noted the current system of regulating credit unions has worked effectively so far. The Registry of Credit Unions operates within the Financial Regulator.

Va. league still at the table on bankCU merger bills

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LYNCHBURG, Va. (2/3/10)--The Virginia Credit Union League is still at the table with state lawmakers and bankers, working on an agreement that would resolve the battle over bills in state legislature that would allow state banks to merge or consolidate with state-chartered credit unions. The two identical bills--House Bill 482 and Senate Bill 440--also would allow a federal credit union on state-chartered credit union to merge or consolidate with a state bank. However, the league considers them to be a one-way street and opposes them as written. The league is focusing on two areas, according to Lewis Wood, director of public relations and communications:
* Providing state-chartered credit unions with the same charter conversion options currently available to federally chartered credit unions. The league hopes to "provide a clear path for state-chartered credit unions to convert to a mutual savings bank," Wood said. * Ensuring adequate member safeguards are in place to govern such a conversion. "We're suggesting that a state-chartered credit union looking at such a conversion should be required to adhere to the same member safeguards currently in place at the federal level," Wood told News Now.
"Basically, we're trying to transform the legislation from a merger/acquisition bill to a credit union charter choice bill," Wood said. Earlier League President Rick Pillow had told News Now that the bills, as written, give no protections of members, their rights or their equity in the credit union in a merger situation. The bills are scheduled to be heard Thursday before the House Commerce and Labor Committee, Wood said. Until then, the exact language of the bill is still fluid. The bills were introduced in January by Del. Mark Sickles (D-43) and Senate Commerce and Labor Committee Chairman Richard Saslaw (D-35) (News Now Jan. 22).

School board considering Summit CU in-school branch

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MADISON, Wis. (2/3/10)--The Madison, Wis., School Board is considering a proposal that would place a Summit CU branch in LaFollette High School to serve students and staff. The $1.36 billion-asset Summit would operate the branch with two teller lines staffed by student interns, and feature a check-writing area and a safe-equipped office for the branch manager, according to a front-page article in the Wisconsin State Journal (Feb. 1). Wisconsin has 86 school-based credit unions statewide--second in the U.S. behind Michigan with 341, according to the Wisconsin Credit Union League. Savings in Wisconsin youth credit unions total $1.6 million, the league added. The school board could vote Monday on whether to allow the credit union to proceed, the newspaper said. The proposal stipulates that $100,000 in construction costs would be paid by Summit; $100,000 would be financed with a no-interest, 10-year loan; and the high school would raise the remainder of the necessary funds--roughly $12,000, the paper said.

Its dead of winter but CUs thinking green

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MADISON, Wis. (2/3/10)--From tree plantings to paperless promotions, credit unions are embracing green practices that are not only saving them money--but also helping the environment. Last April, People’s Trust FCU in Houston placed its six-page member newsletter online, saving $35,000 by year-end. To encourage readership of its online newsletter, People’s Trust placed three multiple-choice reading comprehension questions on the last page. Readers were invited to answer the questions and enter a contest to win $500. About 600 readers entered the contest, said Patsy Jalomo, business development and marketing manager. The $420 million asset credit union received no complaints when the newsletter went online, but is considering sending paper copies to 4,500 members who have been with the credit union for 20 years or more. One reason for this is because the credit union recently gave members copies of annual reports on USB jump drives, and some older members were not familiar with the technology. “When I think about the older members I feel they might be separated,” Jalomo told News Now. “[The online newsletter] is a great tool for younger members, but we don’t want to leave out the older members.” People’s Trust had sent paper newsletters to its members of 20 years or more in April, but stopped because it had not heard any feedback. Jalomo urged credit unions to assess their membership’s needs when undergoing environmental initiatives. She also emphasized that many individuals want to do business with companies that preserve the environment. Through a tree-planting promotion, OSU FCU, Corvallis, Ore., has encouraged its members to choose e-statements instead of monthly printed statements. For each member who converted to e-statements,
Click to view larger image OSU FCU branch managers (left) Ranelle Crosby, Peter Walker, Jenipher Miller, Nathan Wuerch and Patti Ferry and District silviculturist Evelyn Hukari of the Oregon Department of Forestry planted tree samplings in a 38-acre parcel near Hoskins, Ore. The credit union donated 11,000-trees for the reforestation based on member participation in moving from monthly paper statements to e-statements. (Photo provided by OSU FCU)
the credit union donated $1 toward a reforestation effort by the Oregon Department of Forestry. Members also were entered into a drawing for a Kindle, said Mike Corwin, assistant vice president of public relations and business development. The promotion ran Oct. 8 through Dec. 31 and 3,424 members signed up for e-statements. The $3,424 generated by the signups helped plant 11,000 trees. OSU FCU branch managers helped plant about 60 of the trees at a 38-acre site. “It was a rainy, soggy day, but they had fun,” Corwin told News Now. The forestry department will plant the rest. Members’ response to the credit union’s efforts was positive and has helped further spike e-statement conversion even after the promotion ended. The promotion was “relatively simple,” Corwin said. “This is the thing to do,” he said. “It has benefited us in a huge way.” A team of Redwood CU (RCU) employees joined 100 community volunteers for the first annual Laguna de Santa Rose Tree-A-Thon, a local tree planting effort to help preserve Laguna’s oak woodland ecosystem, restore lost animal habitats and provide food for the area’s native wildlife. Volunteers planted more than 750 trees on a five-acre parcel of land.
Click to view larger image Redwood CU employees recently joined community volunteers to participate in the first annual Laguna de Santa Rose Tree-a-Thon, where volunteers planted 750 trees. The credit union is based in Santa Rosa, Calif. (Photo provided by Redwood CU)
“It was just amazing that we were able to plant so many trees,” said Kate Kelly, assistant vice president of marketing and public relations. Kelly grew up in the Laguna area, so she said she was extremely passionate about the project, which was organized by a fellow credit union employee. RCU--which embraced environmentally friendly practices “before they were in fashion,” according to Kelly--offers several sustainability programs including recycling, paper-free online banking, bill pay and e-statements, loan discounts on qualified hybrid vehicles, and an online green center where members can find tips on energy efficiency and reducing waste. The credit union also has a sustainability committee that meets regularly to consider sustainability practices and how to use less paper and produce less waste. “We are committed to being a leader [in green efforts],” Kelly said. When RCU began offering online statements instead of paper statements, it sent its members e-mails and direct mailings about the benefits--including security, and saving paper and emissions. The credit union targeted members who used online banking but had not signed up for e-statements. “There were great response rates,” Kelly said. To excite employees about green efforts, Kelly suggested creating a culture that values volunteerism. “Employees at RCU are so passionate about their community,” Kelly said. “If you create a culture that values volunteerism, you’ll find that staff is on board [with your initiatives].” RCU, with $1.7 billion in assets, is based in Santa Rosa, Calif.

Fundraising for Haiti quake victims continues

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MADISON, Wis., and WASHINGTON (2/3/10)--It's been 23 days since the 7.0 magnitude earthquake turned the capital city of Haiti into rubble, and it will take at least 10 years to rebuild. Credit unions are contributing funds to assist colleagues and their members survive during the recovery. The magnitude of what will be needed for Haiti to recover is daunting. Haitian Prime Minister Jean-Max Bellerive has said that in 30 seconds, Haiti lost 60% of its gross domestic product. The country estimates it will need $3 billion to rebuild the country (USA Today Feb. 2).
Click to view larger image Members of the H.U.G.S. (Help Us Give to OtherS) Team at Evergreen CU, Neenah, Wis., enlisted members, volunteers, family and friends for a bake sale that raised more than $300 to benefit Haiti earthquake victims. "When we saw the absolute devastation in Haiti, we all felt we had to do something to help these people," said Debbie Bruley, vice president. (Photo provided by Evergreen CU)
Credit unions from all around the world have raised more than $530,308 for the credit union disaster relief fund, according to the Worldwide Foundation of Credit Unions, affiliated with World Council of Credit Unions (WOCCU). Of that total, U.S. credit unions and organizations have raised $221,656 through the National Credit Union Foundation's CUAid.coop. Haiti, which has an active credit union movement with 175 credit unions and 4040,090 members, also is the site of a WOCCU project. The Michigan Credit Union League, CUcorp and the Michigan Credit Union Foundation contributed $12,500 to the relief fund. "With the death toll estimates rising in Haiti, and given the incredible destruction in that country, our credit union community should do its part to step up with financial support," said MCUL President/CEO David Adams. The third-year and second-year classes of Western CUNA Management School (WCMS) pooled their resources and funds to contribute $1,000 to the relief effort. Each class donated $500. "When the Theta presidency first discussed making a donation to help those devastated by the earthquake in Haiti, we focused on the three words that are the philosophy of our entire industry--'People Helping People,'" said Robert York, president of the Theta Class (third-year students) and vice president of marketing and business development at California Bear CU, Los Angeles. "We chose the WOCCU Relief Fund because making our donation to a credit union organization would embrace the spirit and support the international development of the credit union movement," York said. Daniel Penrod, president of the Iota Class (second-year students) and senior industry analyst with the California and Nevada Credit Union Leagues, noted that, "Our hope is that our modest donation, coupled with those already given by others will combine to have a profound impact." To support Haiti's credit unions and members through the international credit union disaster fund, make payments, via check, credit card or wire to: Worldwide Foundation for Credit Unions Inc., 5710 Mineral Point Road, Madison, WI 53705, USA. Donations also can be made online with a credit card at www.woccu.org/give. For wire transfer information, contact Valerie Breunig, Worldwide Foundation for Credit Unions at 608-395-2055 or via e-mail vbreunig@woccu.org. Please indicate the donation is designated for the Haiti Disaster Relief Fund. U.S. credit unions also can support WOCCU's relief efforts by donating through the NCUF's CU Aid at www.CUAid.coop. In addition to their efforts for their credit unions colleagues and members, credit unions have other efforts underway for broader relief organizations. Some are organizing fundraising for the American Red Cross International Response Fund.

N.Y. league Banks want to limit access to CUs

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ALBANY, N.Y. (2/3/10)--Attacks on credit unions by New York state bankers in their testimony before state legislators Monday has drawn a written rebuttal statement from William J. Mellin, president/CEO of the Credit Union Association of New York. New York bankers have been vocal in trying to derail a state bill that would allow credit unions an expanded role in accepting municipal deposits. “At a time of severe economic crisis caused in no small part by banker excesses, it is disappointing that one of the top priorities of the bankers is to limit access to credit unions,” Mellin wrote. “This agenda was evident in recent budget hearing testimony, and it will no doubt continue during the New York Bankers Association’s (NYBA) designated lobby day." The bankers lobby day was Monday. “I encourage lawmakers and the public to ask themselves why, in the midst of economic crisis, banks are using lawmakers’ valuable time to lobby against not-for-profit credit unions instead of looking for ways to work with the legislature in helping New York's working families save money, find affordable credit and create jobs,” he continued. “The NYBA’s platform is based on denying municipalities critical choices for their financial services and maintaining ineffective monopolies--at the expense of local governments and the citizens they serve,” Mellin added. “Doesn’t this approach simply perpetuate the bad behavior that led us to today’s economic problems?” Mellin testified on behalf of the municipal deposits bill before the New York state legislature last week. He concluded that legislators “realize that now is not the time to further monopolies to drive up earnings; instead, it is the time to employ common sense and let local government--not the commercial banks--decide the best depositories for their tax dollars.”

CUs in debt challenge program saved consumers 20M

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WASHINGTON (2/3/10)--Credit unions participating in the American Debt Relief Challenge have saved consumers an estimated $20 million that they would have spent on interest to keep their credit card balance at a large bank, the program estimated. The goal is to save American families $300 million overall, wrote Jamie Chase in an article posted on Monday’s Huffington Post titled “Measuring the Move: $20 Million and Counting.” The “move” refers to the Post’s campaign to get consumers to move their money to community banks and credit unions. “It's no surprise that searches to find local credit unions have tripled since the launch of Move Your Money,” Chase wrote. “It’s pointing the way to help make life just a little better for American families. The credit union movement soared in the Great Depression. People relied on their neighbors and friends to get through tough times. “It’s natural that people strapped with credit card debt, those facing foreclosure and small business owners with good credit that can't get a loan from the bank, are all looking to credit unions again now,” she added. Participating credit unions nationwide are sending in “consumer miracle stories,” Chase wrote. She told a story about credit union member Michael Wingate, who was overwhelmed when his Citibank credit card interest rate leapt to 40.99% from 4.99%. Wingate had a stable job, a good credit score and was making payments on time to Citibank. That interest rate was the highest she’s ever seen, Marylin Ball-Brown, CEO of Generations CU, Olympia, Wash., told the Post. “Wingate's increased [annual percentage rate] was the result of a predatory banking practice already addressed by the Obama administration's Credit Card Accountability, Responsibility and Disclosure Act of 2009,” Chase wrote. “While it curbs future abuses, the legislation unfortunately could not return Wingate's interest to a traditional rate. The credit union [Generations CU] saved the family $33,000 over the life of the credit card by transferring the $10,400 CitiBank card balance to an unsecured loan with a traditional rate of 12.2%.” To read the article, use the link.