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Storms wake Midwest CUs reopen Northeast digs out

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MADISON, Wis. (2/4/11)--Most credit unions and leagues in the West and Midwest were back to work Thursday after weathering this week's deep snow, ice storms and teeth chattering temperatures. Credit unions and leagues in the Northeast were at work Wednesday and Thursday, despite icy conditions and up to a foot of snow in Massachusetts and New Hampshire. Wednesday "was messy but things are back to normal today," said Rob Kimmett, senior vice president of marketing and public relations at the Massachusetts, New Hampshire and Rhode Island Credit Union Leagues. "This time the snow turned to sleet and freezing rain halfway through, so we didn't get the monster accumulations," he said Thursday, adding the Boston area received "only about 10 inches or so." "New Hampshire got the volume, because the storm was all snow there, but it ended Wednesday and was cleaned up for the morning commute," Kimmett told News Now Thursday. "Right now the area is dealing with too much snow on the side of the roads and on roof tops from our non-stop parade of snow storms. Fortunately, there are no reports of credit unions suffering any damage to their roofs from too much snow," Kimmett said. More than a foot of snow was recorded in parts of Oklahoma, Kansas, Missouri, Iowa, Wisconsin, Illinois, Indiana, Michigan, Ohio, Massachusetts and New Hampshire, with several other states close behind, reported the National Weather Service (The New York Times Feb. 3). It had to upgrade its website to handle the traffic of 20 million hits per hour. Hundreds of thousands of homes and businesses were left without power, especially in Ohio and Pennsylvania. In the Midwest, credit unions and leagues closed early on Tuesday and some stayed closed Wednesday. The storm closed the Credit Union National Association's Madison, Wis., offices early Tuesday and on Wednesday. The offices were open on Thursday. In Pennsylvania, snow varied across the state, said Janet Johnson, communications specialist at the Pennsylvania Credit Union Association (PCUA). There were no reports from credit unions of storm-related incidents. Some credit unions in the eastern part of the state had delayed openings Wednesday. PCUA is located in Harrisburg, which had a "good coating of ice overnight." However, temperatures rose early Wednesday morning and the roads were cleared. "The biggest problem in some areas was power outages, but I didn't hear of any credit unions being directly affected," said Johnson. Most schools were closed Wednesday. In Albany, N.Y., the Credit Union Association of New York was open Wednesday and Thursday, said Bonnie Sklar, public relations coordinator. "Our storm was not as bad as originally predicted. We had about six-eight inches of snow on Tuesday and around the same Wednesday." The snow turned to sleet, which reduced the snow predictions there. Some credit unions in the state may have closed based on the higher snow predictions but none reported closing or having problems, she said. The Maine Credit Union League reported the league and its credit unions were open Thursday. Jon Paradise, governmental and public affairs manager, said the state got between 10 and 14 inches of snow, depending on location. The Credit Union League of Connecticut was open Thursday and had not heard of any credit unions in the state closing. Snow varied from four inches to about eight inches. "Connecticut experienced icy rain and sleet, which made driving extremely hazardous," Ed Zagorski, director of communications, said. There were numerous incidents throughout the state of roofs caving in due to the weight of the ice on top of already large amounts of snow. Luckily no credit unions have been affected." "As far as we know, it's over," he said. "But, another storm will hit Connecticut on Saturday."

Paperless mortgage closings offered at Mountain America

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SALT LAKE CITY (2/4/11)--Members of West Jordan, Utah-based Mountain America can now close their mortgages electronically, the $2.77 billion asset credit union announced. "Members can accomplish their mortgage closings in an eco-friendly way," said Jeanie Olsen, Mountain America's vice president of mortgage services. "With all of the documents viewable online, paper can essentially be eliminated from the process. No longer do home buyers have a stack of closing documents an inch or more thick--they can sign electronically and receive all of their documents on an easily transportable flash drive," she added. The credit union also provides access to the documents online after closing, if needed, she said. Members buying homes can access and preapprove most of the documents online before the closing through a paperless mortgage closing service called Quick Close. The service is the primary communication and document delivery vehicle, where title agents, real estate professionals and lenders meet to compile the entire closing package from a secure website. It is powered by SureClose, a paperless transaction management system developed by PropertyInfo Corp., a Stewart company. Title offices that set up Quick Close and eClosingRoom, a program also provided by PropertyInfo, can close mortgages using designated computers and electronic signature capture pads. Mountain America members simply sign any remaining closing documents on the personal computer and sign a digital signature pad once. That signature is then affixed to all of the closing documents, said the credit union's press release.

Catalyst Corporate FCU to be merged corporates new name

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DULUTH, Ga. (2/4/11)--Catalyst Corporate FCU will be the new name of the combined Georgia Corporate FCU and Southwest Bridge Corporate FCU, pending Georgia's successful purchase and acquisition of Southwest. Georgia Corporate said it anticipated that a purchase and assumption proposal will be submitted to the National Credit Union Administration (NCUA) Board in mid-2011. "Choosing a name that represents the forging of a new corporate entity is an important step forward," said Greg Moore, Georgia Corporate CEO, which is based in Duluth, Ga. Both existing names--Georgia Corporate and Southwest Bridge Corporate--will be abandoned. The new name was developed by a committee representing both corporates and was approved by Georgia Corporate's board of directors. "Catalyst is a mission-driven word that implies 'building,' 'creating' and 'moving forward,'" said Dianne Addington, CEO of the Plano, Texas-based Southwest Bridge Corporate. Addington and Moore noted the name implies "an entity working to make credit unions more successful" while strongly suggesting it "is the result of credit unions coming together to create a new cooperative corporate solution." The new name won't become official until the consolidation is completed later this year. However, executives at both corporates said the name will be used unofficially in the coming months to help reinforce the direction credit unions are headed. The new entity's business plan calls for lower capital requirements than previously required by either corporate. Because of new NCUA regulations, the proposed entity will maintain a smaller balance sheet to minimize risk. However, Catalyst Corporate, if approved by NCUA and capitalized by members, will continue to offer its current product and service line-up and will leverage increased economies of scale to create additional efficient, low-cost services in the future.

Pa. Wis. foundations CUs bet on Super Bowl teams

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PEWAUKEE, Wis., and HARRISBURG, Pa. (2/4/11)--Credit unions and their state foundations in Pennsylvania and Wisconsin are making friendly wagers on the outcome of Sunday's Super Bowl XLV between the Green Bay Packers and the Pittsburgh Steelers--and finding similarities between the teams and credit unions. The Wisconsin Credit Union Foundation and the Pennsylvania Credit Union Foundation say the other foundation will provide a basket of state goodies to them when their team comes out on top. "We've seen the Steelers in action," said Wisconsin foundation Chair Carol Adler of Marshfield Medical Center CU in Marshfield. "So when the folks in Pennsylvania suggested we put a little skin in the game, we said, 'done deal.' You have to have a little fun with these things. And by that I mean have fun cashing in when we win." "Last time I looked, steel was stronger than cheese," said Pennsylvania foundation Chair Diana Roberts. "Likewise, the Steelers will surely prove to be the stronger team on Super Bowl Sunday." Regardless of the outcome, no one will be a loser. Both state foundations pledged to use their basket of state-themed goodies in an auction to raise funds for foundation programs. For example, Wisconsin's foundation provides free resources to all public high schools to help teens achieve state teaching standards for sound money management. The Pennsylvania foundation supports financial education and has projects to aid small credit unions and disaster relief. Both foundations saw similarities between their teams and credit unions. "The history of Pennsylvania credit unions and the Steelers mirror one another," said Pennsylvania Credit Union Association (PCUA) Board Chair and season ticket holder Ray Brunner. "Both were officially formed in 1933 with roots in representing hard-working Americans," Brunner said. "Each has also demonstrated that success comes through team work. Following tough early days during World Wars, merger of the AFL-NFL and business pressures, the Steelers are an elite NFL franchise. Likewise credit unions throughout the decades have had to face down fierce competitors and overcome outside pressures. "The Packers, like all credit unions, are unique in that they are community-owned not-for profits," said Wisconsin's Adler. "The Pack is the only team in the NFL jointly owned by the fans. Similarly, credit unions are financial institutions whose depositors are the owners." At the individual credit union level, three credit unions--one in Pennsylvania and two in Wisconsin--also have made a friendly wager that will benefit a local hospital. The PA Healthcare CU, Sewickley, Pa., has teamed up with Green Bay, Wis.-based Horizon Community CU and Wisconsin Medical CU in the wager, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway 2/1/11). A Steelers victory will aid the Heritage Valley Sewickley and Heritage Valley Beaver community-based health care initiatives. A Packers victory will benefit the Children's Hospital of Wisconsin. "We have had a few wagers like this over the years, and it is a great way to showcase how credit unions make a difference in our communities," Paul Fero, CEO of PA Healthcare CU, told PCUA.

WOCCU DSA nominations due March 25

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MADISON, Wis. (2/4/11)--The nomination deadline for World Council of Credit Unions’ (WOCCU) Distinguished Service Award (DSA), the highest honor bestowed by the international credit union system, is March 25.
Click to view larger image Polish parliament member Jarosław Stawiarski (left) accepted the 2010 Distinguished Service Award on behalf of the late President Lech Kaczyński and his family from World Council of Credit Unions Chair Barry Jolette at The 1 Credit Union Conference in Las Vegas. (Photo provided by the World Council of Credit Unions)
Each year, the DSA honors the outstanding contributions of its recipients to the global credit union movement. WOCCU’s vision is “Improving people’s lives through credit unions,” and the DSA recognizes the most distinguished achievements in support of that pursuit. The award is presented to individuals and organizations that have offered exemplary service to credit union movements outside their home country. “The list of past DSA recipients reads like a who’s who in international credit union development and support,” said WOCCU Director Ron Hance, president/CEO of Heritage Family CU, Rutland, Vt., and chair of the WOCCU Awards Committee. “Recognizing such outstanding talent and dedication is the goal of DSA, and we often have a very rich pool of talent and achievements from which to choose.” In 2010, DSA recognized the late Lech Kaczyñski, the former president of Poland, who was central in helping establish that country’s credit union movement. Other 2010 recipients included Credit Union National Association (CUNA) Chair Harriet May, president/CEO of GECU, El Paso, Texas; and Credit Union Executives Society (CUES), the Madison, Wis.-based professional development organization for credit union executives and volunteers. The 2010 awards were presented during The 1 Credit Union Conference, last year's event held jointly with CUNA in Las Vegas. WOCCU does not give the DSA honor every year. Award presentations this year will be made at WOCCU’s World Credit Union Conference, which is expected to attract attendees from more than 50 countries to Glasgow, Scotland, July 24-27. In the case of individuals, recipients may be WOCCU or member organization officers, directors or representatives; international credit union pioneers; field technicians with a long and outstanding service record; or persons whose actions have benefitted global credit union development. Institutional recipients may be organizations or agencies that have provided financial and technical assistance to develop international credit union movements and their service infrastructures over an extended time. WOCCU will present no more than three individual awards and one institutional award in a single year.

Three incumbents re-elected to PCUA board

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HARRISBURG, Pa. (2/4/11)--All three incumbents have been re-elected to the Pennsylvania Credit Union Association (PCUA) board of directors without opposition, PCUA Board Chairman Ray Brunner announced. These include Paula Nihoff (District 5), Mike Kaczenski (District 6) and Louise Lingenfelser (District 9). Nihoff is CEO of HealthCare First CU, Johnstown; Kaczenski is CEO of Sun East FCU, Aston, and currently serves as vice chairman of the board; and Lingenfelser is CEO of UGI Employees FCU, Wyomissing (Life is a Highway Feb. 2). Their terms will begin at the conclusion of the association’s 2011 Annual Convention & Expo in May.

Mass. league welcomes Cotney as new bank commissioner

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MARLBOROUGH, Mass. (2/4/11)--David J. Cotney has been appointed the new Commissioner of Banks in Massachusetts by Gov. Deval Patrick. Cotney, 43, began his 20-year career at the state’s division of banks as an examiner and most recently served as chief operating officer of the agency. He will oversee a staff of about 160 employees and a budget of $15.8 million, said the Massachusetts Credit Union League (e-WeeklyFeb. 3). Cotney has served as acting commissioner since the departure of Steven Antonakes in November. Cotney played a national role in the creation of the Nationwide Mortgage Licensing System, which allows regulators and consumers to track a mortgage broker through an online database of licensed brokers. Cotney and the Massachusetts Division of Banks were leaders in getting all states and territories entered into the system. League President Daniel F. Egan Jr. welcomed the news of Cotney’s appointment. “His long experience at the division together with his insight into the financial services is a real benefit to consumers of the Commonwealth and the industry,” Egan said.

Three CU CEOs on Chicago Fed advisory council

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CHICAGO (2/4/11)--Three credit union CEOs were among 12 members appointed to the Chicago Federal Reserve’s Community Depository Institution Advisory Council. The CEOs area:
Council members were sought out by the Chicago Fed through its leveraging of relationships with:
* State trade associations representing credit unions, banks and thrifts; * State and federal regulatory counterparts; and * The Chicago Fed’s knowledge of senior executives managing community depository institutions.

Minn. N.Y. leagues update state committees on CUs

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ST. PAUL, Minn. and ALBANY, N.Y. (2/4/11)--Minnesota and New York credit union leagues have been busy educating their state lawmakers on the role of credit unions within the financial services industry.
Click to view larger image Minnesota Credit Union Network President/CEO Mark D. Cummins and Vice President of Governmental Affairs Mara Humphrey spoke on the credit union difference at a State Senate hearing on Feb. 2. (Photo provided by Minnesota Credit Union Network)
Representatives from the Minnesota Credit Union Network (MnCUN) spoke Wednesday at an informational hearing for the State Senate Commerce & Consumer Protection Committee, providing an industry overview for local lawmakers. Sixty freshmen legislators were elected to the Minnesota Legislature in November. The newcomers comprise seven of 14 seats on the State Commerce Committee. MnCUN’s President/CEO Mark D. Cummins and Vice President of Governmental Affairs Mara Humphrey spoke about the credit union difference, regulatory structure and current economic trends. Cummins and Humphrey also discussed the National Credit Union Administration and the National Credit Union Share Insurance Fund. The MnCUN representatives spoke about specific state issues, future challenges for the industry and the current regulatory environment. Among the regulatory topics addressed were the Dodd-Frank Regulatory Reform Bill, the Consumer Financial Protection Bureau and the Federal Reserve’s proposed rule on interchange fees. “We understand that the future success and viability of the credit union movement is very much in the hands of our elected officials--both here at the State Capitol and in Washington, D.C.,” Humphrey said. “The more education, information and feedback we can provide to both new and veteran legislators, the more impact we can have in the long-term.” Across the country, representatives from the Credit Union Association of New York and several credit union leaders from the Utica-Rome, N.Y., area visited the Utica offices of Sen. Joseph A. Griffo (R-Utica/Rome), the new chairman of the New York State Senate Banks Committee. In his new position, Griffo will be instrumental in shaping the legislative environment for the state’s credit unions and other financial institutions. While visiting the senator, the group discussed the role of credit unions in the financial services industry and the benefits they provide members and their communities. “During our discussions, Sen. Griffo shared his vision for the Senate Banks Committee--one based on fairness, deliberation and open communication,” said Michael Lanotte, senior vice president and general counsel for the association. “We look forward to working with the senator and the entire committee this session.”

CU System briefs (02/03/2011)

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* SACRAMENTO, Calif. (2/4/11)--The Golden 1 CU is offering a $10,000 reward for information leading to the arrest and prosecution of a man and woman who robbed a Golden 1 branch at 1326 Broadway St., Sacramento, on Jan. 21. The suspects entered the credit union wearing masks and demanded money from tellers. No injuries were reported. The suspects fled in a maroon 2000 Dodge Ram, two-door truck with California license plate number 6F31406. The man was described as a black adult, about 5' 11" with a husky build, wearing all black. His jacket was black with a large white circular design. The woman was described as a black adult with a large build and wearing all black. Anyone with information can contact the Sacramento Police Department at 916-808-3835 or Crime Alert at 916-443-HELP or 800-AA-CRIME … * EAU CLAIRE, Wis. (2/4/11)--Charlie Grossklaus, president/CEO of Royal CU (RCU) the past 26 years, has announced he will retire, effective Jan. 2, 2012. He has been employed with RCU for 40 years and is the second CEO to lead RCU since it was founded in 1964 in the Uniroyal Tire Plant. Grossklaus grew RCU to $1 billion in assets in 2010 when RCU purchased 11 AnchorBank offices. When he became CEO in 1985, RCU held $100 million in assets, had 100 employees and six branches. Today it has 582 employees, 25 branches and serves 18 counties in Wisconsin and 12 in Minnesota. Grossklaus said his immediate plans are "to continue business as usual by fulfilling the 2011 goals as set by our board of directors" …

Council offers paper on CFOs evolving merger role

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MADISON, Wis. (2/4/11)--A CUNA CFO Council white paper examines new regulations adopted that require credit unions to change from the pooling to acquisitions method of accounting. The effect of this change in accounting rules made the credit union merger transaction more time consuming, costly and complex for chief financial officers (CFOs), management, staff and their boards, according to CUNA’s CFO Council. The CFO’s Evolving Merger Role is a white paper sponsored by the council that examines the increasing and evolving portfolio of the CFO in credit union mergers. Effective merger business models and the experiences of their CFOs are profiled along with lessons from the corporate world. The increased regulatory scrutiny and the resulting complexity have contributed to an evolution in the CFO’s merger role. The merger transaction in the past was fairly easy, according to Peg Lamb, CFO of Marine CU, a $410 million-asset credit union in La Crosse, Wis. “You completed due diligence, you had the acquired credit union expense as much as possible on their books before the merger, and with the pooling method you could come away with significant increases in either income or capital,” she said. “Accounting is so different now with Statement of Financial Accounting Standards (SFAS) 141-R. Most merger costs can’t be capitalized. Instead it’s required that all acquisition costs--with the exception of capital issuance costs--must be recognized as expense or period costs when incurred, which are usually after the merger.” If, for instance, two credit unions have separate core systems, the core system not chosen may have multiple years left in the contract. Because one can’t eliminate the acquired credit union’s processing system until after the merger when their members’ accounts are converted to the acquirer’s system, these costs are incurred and expensed post-merger. Not factoring these types of issues into the total cost of the merger can be a costly mistake, Lamb said. CFOs are accustomed to working independently with numbers, often in a solitary environment. In the past, the CFO focused on financials and played a minor role in the cultural transformation, but that is no longer the case, said the paper. The CFO today is expected to take a leadership role in developing a new culture that includes educating employees and modeling behavior. Organizational culture has been likened to breathing. One isn’t aware of breathing; it’s done automatically. Mergers tend to rise or fall depending on the ability of the two organizations to combine as one, taking the best parts and eliminating the negative elements of both cultures, the council said.