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Payments study Cash no longer king

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DALLAS (2/27/09)--Consumers' use of cash is declining while their use of card-based payment options is increasing, reports a nationwide study. Roughly 41% of consumers indicated they use cash less often today than they did two years ago, according to the 2008 Student of Consumer Payment Preferences. The study--sponsored by First Data, MasterCard Worldwide, Metavante and PULSE--was conducted by BAI Research and Hitachi Consulting. "Of those who reduced their cash use, 97% are shifting to credit, debit or gift/prepaid cards instead," said Ajay Nagarkatte, managing director of BAI Research. For credit cards, consumers carry an average of four cards but use only 2.2 of those to make purchases on any given month, underscoring the competitiveness of the credit card market, said the study. Findings reflected consolidation in the credit card industry, with 75% of consumers' Visa and MasterCard credit cards coming from 10 issuers. Nearly half (46%) of active cardholders surveyed revolve at least part of their total credit card balance each month, while 54% pay all balances in full. More than 75% of cardholders report they have rewards attached to at least one card. Overall, 58% of consumers had cards that earned rewards; 51% of those said rewards strongly affect their use of the card. For debit cards, signature and PIN debit account for a combined 37% of consumers' in-store payments. PIN debit is preferred by 45% of consumers surveyed, while 35% prefer signature and 20% have no preference. Gift/prepaid cards did less well than expected, accounting for 4% of consumers' in-store purchases--the same as in 2005. However, the market for open-loop gift/prepaid cards is increasing, the study indicated. Retailer-specific cards dominated the gift card space. In 2008, more than twice as many consumers received or gave general purpose gift cards than in 2005.

Summit CU plans Pay It Forward program

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MADISON, Wis. (2/27/09)--Summit CU will give members $10 to $100 at each of its 20 branch locations through its “Pay It Forward” program. Members are then asked to use the money to help someone else with financial needs. There will be 100 participants per event, with the events held March 25 through May 14 at the branches. Participants will be videotaped as they describe how they intend to use the money (Wisconsin State Journal Feb. 26). Videos will be posted and rated on the credit union’s website. Summit will give the participant who garners the highest rating $500 with an additional $500 donated to a United Way charity of the winner’s choice. Summit CU, based in Madison, Wis., has $1.287 billion in assets.

Boston mayor announces microloans serviced by CU

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BOSTON (2/27/09)--Boston Mayor Thomas Menino announced a new microloan fund--serviced by Tremont CU--for small businesses located within the City’s Empowerment Zone (EZ). The $350,000 fund is geared to help existing small businesses and eligible entrepreneurs with access of up to $25,000 in loans for working capital needs such as leasehold and inventory improvements (US Fed News Feb. 26). EZ businesses with annual revenues less than $500,000 can apply for financing through the program for loans ranging from $5,000 to $25,000. The loans have a 9% fixed-interest rate. Boston’s EZ is a 5.8 square-mile area, consisting of roughly 60,000 residents--about 10% of the city’s population. Tremont CU, based in Braintree, Mass., has $173.1 million in assets.

Study CUs more active than banks in reaching teens

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CHICAGO (2/27/09)--Credit unions are more active than banks in reaching teens to solicit their business, says a new survey by Mintel Comperemedia. Mintel, which monitors direct mail, e-mail and print advertising, observed financial products and services targeted at teens and their parents (Business Wire Feb. 25). A search of Mintel’s database for campaigns referencing the teen market from January through October 2008 collected 51 results--two-thirds of which came from credit unions. The survey also indicated that nearly four out of five teens (79%) surveyed consider themselves knowledgeable about financial matters. However, the Federal Reserve’s 2008 test of high school seniors indicates teens are falling behind in personal finance education. The test revealed an average financial literacy score of 48%--four percentage points lower than the average score of 52% in 2006. Most teens said they learn about money from their parents (87%), while two-thirds said they learn about finances through school lessons, the survey indicated. Many credit unions work through the National Endowment for Financial Education to present school classroom financial education.

CU System briefs (02/26/2009)

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* WASHINGTON (2/27/09)--At the African-American Credit Union Coalition (AACUC) meeting during the Credit Union National Association's Governmental Affairs Conference, National Credit Union Foundation (NCUF) Executive Director Steve Delfin presented a check for $60,875 to AACUC Chairwoman Barbara Stephens. The check represented the past year's donations to AACUC from NCUF through the Pete Crear Fund, a designated fund of the Community Investment Fund. AACUC uses the annual donations from NCUF to fund financial education, minority internships, and small credit union development. (Photo provided by the National Credit Union Foundation … * HARTFORD, Conn. (2/27/09)--Thomas M. Durkin Sr. died Feb. 20 in Meriden, Conn., at the age of 81. Durkin was formerly with the Connecticut Credit Union League, then CUNA Mutual Insurance Society as a credit union administrator, where he established and organized new credit union charters throughout New England. Visitation is from 10 a.m. to 11 a.m. today at Sheehan-Hilborn-Breen Funeral Home in West Hartford, Conn. (The Hartford Courant Feb. 24) …

Hispanic Marketing Immersion enters third year

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MADISON, Wis. (2/27/09)--World Council of Credit Unions’ (WOCCU) Hispanic Marketing Immersion Program is kicking off its third year Sept. 19, offering Spanish lessons, credit union internships and full cultural immersion in one- and two-week programs in Morelia, Mexico, for U.S. credit union staff.
Participants in WOCCU's Hispanic Marketing Immersion Program will spend part of their time working in credit unions in central Mexico. (Photo provided by World Council of Credit Unions)
Spanish language training for U.S. credit union staff is a step forward in attracting and serving Hispanic members, WOCCU said. Having a cultural understanding of their needs and expectations and knowing how to implement relevant products and services will boost credit unions to the forefront, WOCCU said. Hispanics are the fastest-growing demographic in the U.S. and may count for as much as 44% of the U.S. population by 2020. Credit unions have tremendous opportunities in tapping the Hispanic market, an advantage on which the Hispanic Marketing Immersion Program is designed to capitalize, WOCCU said. In the program, participants stay with a Mexican family, take Spanish language classes through an accredited school and work in a Mexican credit union to gain first-hand knowledge of member service there. Host families will provide participants with private rooms, meals and an opportunity to sharpen language skills in a social setting. WOCCU program staff will be on hand to ease any cultural and social transitions. Participants also will serve practical internships with either Caja Morelia-Valladolid or Caja Alianza, two Mexican credit unions that participate in WOCCU's International Partnerships Program. Participants will learn about daily Mexican credit union operations and study marketing strategies to attract new members and promote financial products. The program is flexible for those who wish to pursue other interests besides marketing. Between the immersion program’s first and second weeks, participants will be able to attend the third annual U.S.-Mexico Marketing Workshop, which is included in the main program cost. Workshop attendees will experience marketing presentations from Mexico’s four largest credit unions. For more information, use the link. Participants can select either a one- or two-week session. Those who register before June 15 will receive an early bird discount.