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MBLs GAC speakers draw media attention

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WASHINGTON (2/26/10)--Comments by key congressional supporters of raising credit unions' member business lending cap that were made during the Credit Union National Association's (CUNA) Governmental Affairs Conference (GAC) were the focus of a number of media reports this week. Market News International and MarketWatch Wednesday reported on the issue. In the article, "US Rep Says Congress Should Increase Credit Union Lending Cap," Market News International began with Rep. Ed Perlmutter's (D-Colo.) comments at the GAC that Congress needs to support credit unions by raising the lending cap to allow credit unions to help more small businesses. It noted that credit unions currently can lending a maximum of 12.5% of total assets to small businesses and that the Small Business Lending Enhancement Act (H.R. 3380 and S 2919) proposes to raise the cap to 25%. It also noted CUNA estimates the measure would increase lending by $10 billion in the first year and create roughly 100,000 jobs without any cost to the taxpayer. The article also quoted Sen. Mark Udall (D-Colo.), noting the importance of small businesses to the economy, and Rep. Spencer Bachus (R-Ala.), chairman of the House subcommittee on financial institutions and consumer credit, who said it is very important that the government's attempts at financial reform "don't punish our credit unions." The MarketWatch article reported Rep. Brad Sherman (D-Calif.)'s comments "to a cheering crowd at the credit union conference," that "we look at credit unions who didn't cause the problem, who aren't asking for a bailout or taxpayer money. They are asking for Congress to get out of the way and allow for reasonable sources of capital." MarketWatch also reported Federal Reserve Chairman Ben Bernanke arguing that changing credit unions would raise additional questions. When Sherman asked about the legislation, Bernanke told a House committee that credit unions enjoy "tax-favored" status because there are certain restrictions placed on their activities. "The banks would complain obviously that if credit unions are allowed to do everything banks can do, why are they tax favored?" He noted it was a trade-off. Other topics brought up during the GAC also have been addressed in the media. Bloomberg via Business Week (Feb. 25) reported House Financial Services Committee Chairman Rep. Barney Frank (D-Mass.) telling the GAC that interchange fees are "not on our agenda this year," reported And Reuters News (Feb. 24) reported that Senate Banking Committee Chairman Christopher Dodd (D-Conn.) told reporters at the GAC that a financial regulatory reform bipartisan agreement may be reached "soon." The New York Times News Service also reported his comments at the GAC. A number of media also reported comments by Assistant Treasury Secretary Michael Barr about banks benefiting from a Consumer Financial Protection Agency and mentioned he made the comments at CUNA's conference. They included Reuters (Feb. 23), and The New York Times and (Feb. 24). National Credit Union Administration Board member Gigi Hyland's speech at the GAC was reported in Sources World (Feb. 23).

Study marks consumers transitions in FI relationships

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LITTLE ROCK, Ark. (2/26/10)--The economy has changed consumers' relationships with their financial institutions--and those relationships are in transition, according to an inaugural Retail Banking Consumer Dynamics study by Acxiom Corp., a marketing and management consulting group. The study is designed to help marketers understand shifting consumer behaviors emerging from the recession and financial institutions' challenges in growing business across three fronts--a crisis of trust, regulatory changes, and the emergence of virtual and mobile banking. Everyone surveyed has made adjustments in response to economic pressures, with 38% focused on paying down debt, said the Little Rock, Ark.-based firm. Regardless of economic status, one in four customers will shop around buying financial products, the study found. The study focused on 12 consumer segments. Mainstream and retired groups surveyed are more likely than affluent consumers to prefer local or community banks, while affluent consumers leaned toward national, super-regional/regional banks and credit unions. Of those surveyed, 32% would consider distributing their business across multiple institutions. Consumers are still wary of financial institutions and prefer to spread their risk across financial institutions, with affluent segments most likely to spread their wealth. said Acxiom. The strongest target for retail financial institutions' marketing is young adults, the study found. The group avoids running up debt and takes advantage of favorable conditions to make large-ticket purchases such as homes and furniture. Although members of this group have modest means, they are more likely than the other groups studied to buy a home within the next six months. That intent and their renewed financial responsibility make them prime for establishing long-term banking relationships, the study concluded. "It's a unique time to establish relationships with these young customers and communicate with them about products such as mortgage financing, retirement savings and investment education," said Randy Watson, vice president of account management at Acxiom. Affluent families don't want to give up much of their lifestyle aspirations and needs but they realize they need to better control their finances during a downturn, said the report. While they are more likely to buy big-ticket items soon, they also are trying to pay down debt and pay with cash when possible. The survey also found that virtual banking, although growing, still represents only 3% of all banking relationships. Those preferring virtual banking are mainly in the affluent and younger market segments, which means the virtual channel should not be ignored. Traditional brick and mortar branches may want to consider incorporating online banking solutions with incentives as part of a multichannel product offering, the survey said. "Now, more than ever, financial institutions need to pay attention to important emerging segments such as young adults, focus on competing at the product level instead of the overall brand level, and continue to engage consumers in multichannel relationships," said Watson.

Potential Latino CU in Toledo seeking a CEO

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TOLEDO, Ohio (2/26/10)--Nueva Esperanza Community CU, a proposed state-chartered, federally insured community development credit union in Toledo, Ohio, is seeking candidates to be its CEO. The credit union is being established to serve the increasing Latino-American population in the Toledo area (e-Lumination Feb. 24). Finding a CEO is one of the next steps in the formation and chartering of the credit union, said the Ohio Credit Union League. One of the credit union’s goals is financial education, counseling and outreach to working-class Latinos. Another is providing a safe, reasonably priced alternatives to many high-fee financial services such as certified checks, savings accounts and international money transfers, the league said.

Ohio league elects board officers

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COLUMBUS, Ohio (2/26/10)--The Ohio Credit Union League’s (OCUL) Board of Directors elected its 2010 officers during February quarterly meetings. Jennifer Ferguson, Bay Area FCU, Oregon, was elected league chair (eLumination Feb. 24). Other league officers are:
* Vice Chair: Tim Boellner, AurGroup Financial CU, Fairfield; * Treasurer: Barry Shaner, Directions CU, Toledo; and * Secretary: Stan Barnes, CSE FCU, Lake Charles, La.
Elected to the OCUL Services Corp. Board were:
* Chair: Tamlyn Straight-Schervish, Unity Catholic FCU, Parma; * Vice Chair: Bill Burke, Day Air CU, Kettering; * Treasurer: Shaner, and * Secretary: Phil Meyer, Ohio University CU, Athens.

Former bankers employed at CUs learn the CU way

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MADISON, Wis. (2/26/10)--Some employees at credit unions who used to work for banks say their work experience is significantly different when their clients are not just customers but also owners, according to a publication for bankers. Several advisors and program managers who switched jobs to credit unions from banks said the genuine service culture perpetuated by credit unions creates member loyalty worth noting ( March 1). “The relationship with members is just incredibly compelling, and the internal support is also amazing, because the employees at a credit union have a real drive to make a difference in the members’ lives,” Michael Gradl, a program manager at Redwood CU in Santa Rosa, Calif., told the publication. Larry Braley moved from Guaranty Bank in Stockton, Calif., to the Kern Schools FCU in Bakersfield, Calif., because, with $1.8 billion in assets and 185,000 members, it was the biggest financial institution in Bakersfield. Initially, he worked for CFS, a credit union-owned broker-dealer, but the investment program moved in-house when it grew to five representatives and three assistants, the publication said. “When our logo changed from KFS to Kern Schools FCU, it gave us instant credibility,” he added. “It turns out that link with the members is critical. Within weeks of that change, referrals jumped like crazy.” While some people say that credit unions’ characteristics are similar to community banks in terms of service and community loyalty, some of the former community bankers interviewed say that isn’t the case. “At a bank, even a community bank, even when they put a focus on service, it’s still ultimately about sales,” Donna McNeely, who in mid-February left a bank job to become program manager at Premier America CU in Chatsworth, Calif., told the publication. “At a credit union, even if they try to increase sales, the focus is still on service to the members,” she added. She also noted that there’s collaboration-- rather than competition--among different credit unions. To read the article, use the link.

CUNA Mutual Heritage Challenge nets funds for NCUF

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WASHINGTON (2/26/10)--The hundreds of Governmental Affairs Conference attendees who participated in CUNA Mutual Group’s “Heritage Challenge” helped raise $2,500 for the National Credit Union Foundation (NCUF).
CUNA Mutual Group’s Jerry Pavelich, chief financial officer, left, presented a $2,500 check Tuesday to Tom Decker, National Credit Union Foundation (NCUF) program director, and Tom Candell, NCUF interim executive director and managing administrative director, at the Credit Union National Association’s Governmental Affairs Conference in Washington, D.C. (Photo provided by CUNA Mutual Group)
The challenge, an interactive game, tested players’ knowledge of the long and often overlapping history shared by credit unions and CUNA Mutual. CUNA Mutual pledged a donation to NCUF for every point scored, and attendees responded by earning a $1,750 donation. CUNA Mutual added an additional $750 to bring the total donation to $2,500, which will be targeted to NCUF’s Development Education Program. The activity helped launch CUNA Mutual’s 75th anniversary celebration in 2010. “Our 75th anniversary is the perfect time to remind ourselves of the cooperative character that binds us,” said Christopher Roe, CUNA Mutual senior vice president of corporate-legislative affairs.” The funds and additional support provided by CUNA Mutual enable NCUF to sustain and grow its Development Education Program, said Tom Candell, NCUF interim executive director and managing administrative director. “More than 900 credit union professionals and volunteers have experienced developmental education training, which helps put into action the cooperative values and principles that make credit unions uniquely socially responsible,” Candell said. All who took the challenge were given a commemorative box containing a 1935 penny, symbolic of CUNA Mutual’s humble beginnings and its roots in the credit union movement, said the company.

CU System briefs (02/25/2010)

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* NEW YORK (2/26/10)--Terri J. Fowlkes, former director of the National Federation of Community Development Credit Unions' CDCU Mortgage Center LLC, has rejoined the federation in an expanded role as director of the Community Development Investment Program. Fowlkes succeeds Alice Greenwald, who had been with the federation for five years. Greenwald had just helped the federation complete its $25 million capital campaign, the largest in the organization's history. She has agreed to serve on the federation's Community Development Investment Advisory Committee. Fowlkes is founder and principal of TJF & Associates LLC, a strategic planning and consulting firm. She also has served in management positions at Citi, Carver Federal Savings Bank, and the New York Community Investment Co. LLC, and has taught financial courses at Seton Hall University, South Orange, N.J., and York College in Jamaica, N.Y. Part of her new duties will include overseeing the mortgage center ... * FT. LAUDERDALE, Fla. (2/26/10)--City County CU in Ft. Lauderdale has joined Mokugift's 1,000 Ways to Plant A Tree campaign. The credit union will plant a tree for every member who opts-in to paperless e-statements. As of Wednesday, the $294 million asset credit union has planted 168 trees, which will absorb an average total of 9,300 lbs. of carbon dioxide per year (PRWeb Feb. 25). The campaign enables innovative companies to invent new ways to plant a real tree as a gift for members at $1 apiece. The campaign aims to plant 100,000 trees by July 29. If the goal is reached, those trees would absorb an average of five million pounds of carbon dioxide per year ... * OAK RIDGE, Tenn. (2/26/10)--ORNL FCU President/CEO John McKittrick has been presented the Oak Ridge (Tenn.) Chamber of Commerce's Eugene L. Joyce Lifetime Achievement Award. The award honors him for his community service, professional achievement, dedication, leadership and personal values. Past recipients have included former Sen. Howard Baker, former State Rep. Gene Caldwell, and Oak Ridgers Tom Hill, Wanda Craven and George Matthews. McKittrick has been with ORNL FCU since 1989, when he became operations manager. He became president/CEO in 1994. He is a former chair of the Tennessee Credit Union League. ORNL has more than $1 billion in assets and more than 140,000 members ...