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Leap Year An extra day to put finances in order

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WASHINGTON (2/29/12)--Credit unions can celebrate Leap Year today by pointing out to members that they have an extra 24 hours this year to get their finances in order.

According to the National Foundation for Credit Counseling (NFCC), the phenomenon that makes Feb. 29 occur only once every four years provides an extra day that consumers can dedicate to tackling the financial tasks they've been procrastinating.

NFCC has some suggestions that credit unions can share with members on how to use the day:

  • Prepare federal income taxes.  Members can gather all the 1099s, W-2s, and receipts for deductions. These items will be needed to prepare an accurate tax return.
  • Create or organize a home financial center.  Create files for each category of financial documents to stay organized all year long.   It will make preparing next year's tax returns much simpler.
  • Review all insurance policies.  Making a claim is not the time to become familiar with one's insurance policy. "Insurance is not something to buy and forget, as life changes often dictate adjustments to the policy. Make an appointment with your insurance provider to confirm that your current needs match your coverage," said NFCC.
  • Review retirement contributions. With the payroll tax cut, Americans have extra money in their paychecks. The best use of this money could be increasing the retirement contribution at work, said NFCC.  Maximize the benefits of an employer match and age-related allowable contribution increases.
  • Order your credit report and score. Many people don't realize that their credit score is related to information on their credit report.  Although consumers can get free reports through www.annualcreditreport.com, NFCC said its Financial Literacy study revealed that 65% of Americans had not ordered a credit report in the past 12 months, and 63% indicated they had not ordered their credit score.  These numbers dictate much of consumers' financial future, said NFCC.
"Those who use the extra time afforded by Leap Year to accomplish these five financial moves will wake up March 1st with a well-earned sense of accomplishment," said Gail Cunningham, spokesperson for the NFCC. "The efforts they put forth on this bonus day will yield rewards throughout the year."

Occupy group seeks to launch CU

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FULLERTON, Calif. (2/29/12)--A group in Fullerton, Calif.,  calling itself  "Occupy OC"--OC stands for Orange County--is trying to launch a credit union.

The protest group said it  plans to launch a federation of member-owned credit unions that are "competitive, stable and democratic" and "dedicated to peacefully combating economic injustice," according to a report in The Orange County Register (Feb. 25).

An inaugural general assembly was set for the "Occupy First Federal Credit Unions" project for last weekend.  The group has not updated its website to reflect any decisions made at the meeting.

CUs enjoy another round of BTD publicity

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MADISON, Wis. (2/29/12)--Although Bank Transfer Day (BTD) was months ago, its impact is still being discussed. Credit unions recently were featured in more media outlets as a result of their BTD growth and the public's general dissatisfaction with banks.

Michigan credit unions gained 27,900 new members between Sept. 29 and Oct. 29--quite a bit more than typical for a month, according to estimates by the Credit Union National Association (CUNA) reported in Crain's Detroit Business (Feb. 26).

Increasing bank fees, more scrutiny of loan customers by banks, and the credit crisis in 2009 and 2010, helped credit unions gain more business, David Adams, president/CEO of the Michigan Credit Union League, told Crain's.

Michigan has 4.5 million members, the publication said.

Nationwide, nearly 700,000 people had opened new accounts at credit unions as a result of activities leading up to BTD on Nov. 5, said The Motley Fool (via Nasdaq.com Feb. 28), citing CUNA statistics.

The upshot, according to The Motley Fool, is that even if BTD fell short of its desired results in acquiring members from big banks, it will be a lot more positive for consumers in the long term for one basic reason: "It shows that they're empowered to take action to boost their own  personal financial situations.

"By moving to smaller institutions that are better suited to meet their needs, millions of customers will get better service and have a more valuable experience," the article continued. "That, in turn, should help encourage many people who otherwise would've been too intimidated to take further steps toward smarter money management moves like investing. In the end, the winners of BTD were those who saw the light and made moves to save them money. That's a lasting lesson that could serve you well throughout your lifetime."

Also, The Washington Post Tuesday reported on one of its blogs that more U.S. citizens are transferring their money out of large and mid-sized banks. About 9.6% moved their money in 2011--up from 8.7% in 2010, and 7.7% in 2009, according to a new study by J.D. Power and Associates, cited by Housing Wire. (See Feb. 28 News Now report on the study: "Big bank exodus good for smaller FIs: JD Powers").

To read the articles, use the links.

One in four online households use mobile banking

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BROOKFIELD, Wis. (2/29/12)--Here's another sign that credit unions should offer mobile banking options. One in four U.S. online households already use a mobile banking service, and many are moving beyond employing mobile devices for information (such as checking a balance or locating an ATM) and toward making transactions (paying bills and transferring money), says a new study.

Consumers access mobile banking through mobile browsers (60%), downloadable apps (41%) and text messaging (32%), according to The Consumer Trends Survey--conducted on behalf of Brookfield, Wis.-based Fiserv by The Marketing Workshop.

Roughly 40% of mobile banking users surveyed had paid a bill with their mobile phone in 2011, compared with 28% in 2010. About 32% transferred funds with the device last year, up from 25% the year before, said the report.

Other findings:

  • By mid-2012, nearly 40% of households surveyed will own a tablet. Currently 19% already own one, and another 20% expect to buy one. What's more, 37% of households that own one tablet are planning to buy a second one.
  • Forty-five percent of current and future U.S. tablet owners would like to use their tablet to access banking services. They said they want to: View monthly statements, 69%; pay bills, 56%; view real-time account information , 50%; and transfer money between accounts at the same financial institution, 49%.
  • Two out of three people surveyed indicated interest in using a downloadable app from their credit union or bank that would allow them to use their tablet for online banking and bill pay services.
  • Forty percent of mobile phone users surveyed said they would trust their credit union or bank to handle mobile payments, followed by PayPal at 35% and Visa at 33%.
  • In 2011, half of U.S. respondents who opened a money market account did so online--up from 16% in 2010. Of those who applied for a credit card, 42% did so online, compared with 31% in 2010. Similar increases were seen in first mortgages and car loans, said Fiserv.
  • Between January 2010 and July 2011, the number of U.S. online households that banked online rose by 9%. Those that paid bills at company websites rose 11%, and those that paid bills at financial institution websites also rose 11%. Online bill payments accounted for half of all bill payments, while checks accounted for 23% of the payments.
For the full report, entitled "Financial Services Continue the Digital Shift," use the resource link.

Michigan Firsts new scholarship attracts media attention

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LATHRUP VILLAGE, Mich. (2/29/12)--Michigan First CU's inaugural $10,000 college video scholarship contest has captured local media attention.

Participants in the scholarship contest are asked to submit a 60-second video answering the question: "What impact will your education have on where you will be in 10 years?"

The contest is offered as part of Lathrup Village, Mich.-based Michigan First's Young & Free Program.

Linda Douglas, Michigan First vice president of marketing, and Janelle O'Hara, the credit union's Young & Free spokesperson, were featured on WDIV television on Saturday morning promoting the contest.

Young & Free is a nationwide program designed to help credit unions connect with young adults using social media and Gen Y spokespeople.

"We understand that not everyone has the strongest essay writing skills," O'Hara said on the WDIV segment. "This offers a different medium for people who want to show their personalities in a scholarship competition."

Also, Monica Horger, Michigan First vice president of human resources, described the contest to listeners of the "Blaine & Allyson Radio Show" on 96.3 FM WDVD.

Horger appeared on the "Put You Back to Work" segment of Blaine and Allyson's show. In addition to describing the scholarship program, she said Michigan First CU has 10 job openings in several departments. Michigan First is adding 1,000 new members a month, creating the need for more employees, she said.

Current college students ages 18-25 and high school graduates planning to attend college in the fall are eligible to compete in the scholarship contest, which is offered through the credit union's Michigan First Foundation.

Beyond first prize, the foundation will award scholarships of $5,000 for second place, $2,500 for third place and an iPad 2 for the "People's Choice" winner of online voting.

"We began as a credit union for Detroit teachers, and we'll never forget that heritage or diminish our deep commitment to education," said Michael Poulos, Michigan First president/CEO. "This year, we've created the foundation to leverage our commitment to metro Detroit and expand our reach. Adding the college scholarship contest gives more students the encouragement and support to continue with higher education, paying dividends for the strength of our communities and to help build a better future for Michigan."

Garner selected as Catalyst Corporates new CEO

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PLANO, Texas (2/29/12)--Kathy Garner has been selected as the new president/CEO of Catalyst Corporate FCU, effective March 5, Catalyst's board of directors announced Tuesday.

Most recently, Garner served as executive vice president of member relations and business development at Catalyst.

She will replace Dianne Addington, who has served as the president/CEO at Catalyst Corporate since it was created in September 2011 from the combination of Georgia Corporate FCU and Southwest Bridge Corporate FCU. Addington had beens tapped by the National Credit Union Administration (NCUA)  to run Southwest Bridge when it was conserved prior to the formation of Catalyst.  Addington had long indicated her intent to return to retirement once Catalyst Corporate was on its feet and a new CEO was selected.

"I worked closely with Kathy Garner for almost 12 months at one of the most difficult times in the history of this organization," Addington said. "During her time with Southwest, Kathy helped in the development of the low-risk business plan and was instrumental in conducting the Town Hall meetings that led to the capitalization of Catalyst Corporate. She has always been a staunch supporter of Catalyst Corporate." 

As executive vice president at Catalyst Corporate, Garner was responsible for correspondent and payment services sales, communications and marketing, member services and the Northwest Regional office. She held that position since the merger of Northwest Corporate FCU with Southwest Corporate in December 2007. Prior to that merger, she was the president/CEO of Northwest Corporate from 1995 to 2007.

Garner worked for U.S. Central FCU from 1984 to 1995, primarily as a manager in the asset/liability department. Prior to that, she was the assistant manager of Corporate Central Credit Union of Utah for more than a year.

Garner has also served as past chair of CU Business Group LLC and Primary Financial Co. LLC, two credit union service organizations partially owned by Catalyst Corporate. She served on the Governmental Affairs Committee for the Credit Union Association of Oregon, and was a board member of the Oregon Credit Union Foundation, the Washington Credit Union Foundation, and the Western Payments Alliance (WesPay). Garner currently serves on the board of the North West Credit Union Foundation.

Lin Hodges, Catalyst Corporate chairman and president/CEO of Associated CU, Norcross, Ga., made the announcement.

Study CUs small banks need more sales efforts

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FORT ATKINSON, Wis. (2/29/12)--While credit unions traditionally pride themselves on superior member service, a more aggressive approach to sales by big banks is costing community financial institutions a chance to grab market share from major financial institutions, according to a new study.

In conducting the study, released jointly by IntelliShop and RateWatch, 120 auditors posed as new checking account prospects. They found that the large banks not only did a better job of assessing customer needs, they were much more proactive about "selling" the benefits of the bank and its services.

Credit unions traditionally train their member service representative to offer products and services based on long-term relationship building, rather than a "product-of-the-day" approach. But the recent backlash against Wall Street institutions provided community financial institutions a great opening to grow their customer base, said Chris Denove, IntelliShop's senior vice president of research and analytics.

The study found that account representatives at the local institutions were pleasant, but took a more laid-back approach when they answered questions and didn't bring up the institution's benefits on their own. For example, the study found that large banks were:

  • Four times more likely to try to find out about other types of banking relationships member/customers had at their current institution.
  • Nearly twice as likely to ask if the consumer wanted to actually "sign up today."
  • Nearly twice as likely to collect a prospect's contact information for follow up.
Smaller institutions, however, were more likely to hand prospects collateral material to take home and read, thereby requiring the customer to uncover the financial institution's benefits on their own.

The study also found that in addition to placing a greater emphasis on "selling," large banks also exhibited better "people skills." The mystery auditors reported:

  • Large banks were more likely to greet customers as they entered the bank.
  • Large banks were twice as likely to initiate conversation (small talk) unrelated to the transaction to build rapport with the prospect.
"The fact that the larger banks were more engaging at a personal level came as a surprise," said Rachelle Zorn, RateWatch general manager. "In the past, small banks have tended to do better in terms of customer satisfaction. It will be interesting to see if the larger banks begin carrying this service-oriented sales approach over to their existing clients."

System on way to 1 trillion assets CUNA tells IMonitorI

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WASHINGTON  (2/29/12)--The credit union system is nearing the $1 trillion total asset threshold, the Credit Union National Association (CUNA) said in an article about credit unions' and small banks' growth in The Christian Science Monitor.

Monday's  article, "Why credit unions and small businesses are beating out big banks," was written by Billy Parish, president of Solar Mosaic, a solar investment platform, and author of "Making Good: Finding Meaning, Money, and Community in a Changing World."  In it, he says that a "new economy is emerging, a kind of constructive capitalism that offers an exciting new model for American prosperity and a way out of the current economic morass."

The article notes that credit unions and community banks all over the country are growing their market share "and doing it in a way that benefits the communities they serve." It cited CUNA statistics about the number of new credit union accounts opened, and CUNA Chief Economist Bill Hampel said in the article the recent growth could cause the credit union system to have more than $1 trillion in total assets.

Investment banks still have important roles to play in the economy, but the nation can look to more community-based models for economy growth, and big banks may follow suit, the article said.

N.E. Marylands largest indoor venue named APGFCU Arena

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BEL AIR, Md. (2/29/12)--The largest indoor venue in northeastern Maryland will be named the APG Federal Credit Union Arena at Harford Community College.

The college and APGFCU jointly announced that naming rights were awarded in exchange for APGFCU's annual contribution of about $50,000 for the next 15 years. The contribution will be used for scholarships for college students as well as arena operations and programming.

Now under construction, the arena will seat 3,200 and will be the home for men's and women's basketball and women's volleyball. It also will host community and regional events, commencements, concerts, conferences and trade shows.

APGFCU's name and logo will appear on interior and exterior signage as well as the arena's floor, pillars and scoreboard. The credit union will also be recognized on arena advertising, posters, basketball and volleyball schedules, event programs and playbills.

The arena project is part of an expansion to the college's Susquehanna Center, which houses college athletics. A grand opening event will be scheduled during the 2012-13 academic year.

APGFCU's long-time partnership with Harford Community College previously included providing scholarships and supporting the Small Business Development Center.  The credit union has $874 million in assets.

International leadership program seeks candidates

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MADISON, Wis. (2/29/12)--Young credit union professionals can submit applications through March 30 for internships at Guatemala credit unions as part of the World Council of Credit Unions' (WOCCU) International Credit Union Leadership Program.

The WOCCU program will select 10 U.S. credit union professionals for internships that run June 10-23. The internships allow young credit union leaders to learn how Guatemalan credit unions reach underserved populations and support communities with member education and special projects.

Participants receive lodging from a host family, a meals stipend, local transportation, traveler's insurance and a limited communications stipend. The sponsoring U.S. credit union is expected to pay the airfare cost of $1,350.

Selection criteria include being age 40 or younger as of Sept. 1, 2011; active involvement as an employee or board member of a credit union or related organization; intermediate-to-advanced Spanish language skills; and the potential to advance the national or international credit union system through initiatives that also help the development of the participant's community.

The selection process includes an application form, an essay and a telephone or Web interview. For more information or to apply, use the link.

In the first phase of the program, 10 participants from Guatemala were chosen to intern at U.S. credit unions. The program is funded by a grant from the U.S. Department of State, Bureau of Educational and Cultural Affairs, Office of Citizen Exchanges, which is part of the larger U.S. Department of State Professional Fellows Program.

CU System briefs (02/28/2012)

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  • SUITLAND, Md. (2/29/12)--Andrews FCU joined with the Armed Forces Financial Network to donate $3,000 in gift cards and then donated an additional $3,000 in gift cards from the credit union to Joint Base Andrews Fisher House. Chris McDonald, left, Andrews FCU president/CEO,  presented the donation to Janet Grampp, Fisher House director; and Walt Serafin, Fisher House board president. Wounded soldiers and their families use Fisher House as a home away from home during medical treatment. The gift cards are used to pay for travel costs as well as the necessities of daily living  (Photo provided by Andrews FCU) …
  • RALEIGH, N.C. (2/29/12)--Students and parents in every county of North Carolina got help completing the Free Application for Federal Student Aid (FAFSA) on Feb. 18 through a partnership among State Employees' CU (SECU), the College Foundation of North Carolina and the North Carolina Association of Student Financial Aid Administrators. SECU opened its 240 branches statewide from 9 a.m. to noon for the FAFSA Day event, with employees and volunteers helping more than 2,100 students complete the FAFSA application that is required for college aid. Statewide, 4,700 FAFSA applications were completed. SECU employees also helped 3,700 high school students complete college applications during North Carolina College Applications Week last November …
  • LANSING, Mich. (2/29/12)--The Michigan Credit Union League (MCUL) & Affiliates recently hosted U.S. Rep. Bill Huizenga (R-Mich.), a member of the House Financial Services Committee, for a discussion of H.R. 1418, which would increase the member business lending (MBL) cap. Huizenga (left), met with MCUL President George Isola and MCUL CEO David Adams as well as other credit union leaders, who cited the importance of increasing access to capital for Michigan small businesses (Michigan Monitor Feb. 27). Huizenga is not currently a co-sponsor of the bill, which lists eight members of Michigan's congressional delegation among its 130 co-sponsors, said the league. The Credit Union National Association (CUNA) says that increasing the MBL limit to 27.5% of assets from the current 12.25% would help generate $13 billion for new small business loans and 140,000 new jobs, with no cost to the taxpayer.  H.R. 3993, which would give credit unions access to supplemental forms of capital, was also discussed. It would allow credit unions to raise capital from sources other than retained earnings, while maintaining their 'one member, one vote' principle and improving their safety and soundness, said CUNA . (Photo provided by the Michigan Credit Union League) ...
  • WOODBRIDGE, Va. (2/29/12)--Belvoir FCU offered a 10% annual percentage yield (APY) certificate to active duty military members for the second year as part of the Military Saves program from Feb. 21-25. More than 24 servicemen and women took advantage of the high-earning certificate offered by the Woodbridge, Va.-based Belvoir FCU as a way to thank active duty military for their service. Military Saves is part of the America Saves program and aims to encourage military families to build wealth by saving more and borrowing less. America Saves Week was Feb. 19-26  …