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CU System briefs (02/03/2014)

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  • MADISON, Wis. (2/3/14)--The president/CEO of Electrical FCU, Arvada, Colo., was appointed by the State of Wisconsin to be deputy director of the Office of Credit Unions at the Department of Financial Institutions. Thomas Theune, who has 30 years of credit union experience, returns to his native Wisconsin where he attended the University of Wisconsin-Milwaukee. Theune also was CEO at Jeffco CU, Lakewood, Colo., and was on the board of the Pikes Peak and Denver Chapter and of Tri-CUE, a Denver-based IT credit union services organization. The Office of Credit Unions regulates all state-chartered credit unions in Wisconsin ...
     
  • BIRMINGHAM, Ala. (2/3/14)--Alabama Telco CU, Hoover, Ala., collected nearly 1,040 cell phones for the Cell Phones for Soldiers program during November and December (eSignal Jan. 31). The donations, which were dropped off at branches of the $600 million-asset credit union, rang up a total of 62,340 calling minutes for military personnel serving overseas . . .
     
  • COLUMBIA, Mo. (2/3/14)--Young patients at the Missouri University Women's and Children's Hospital can now relax during lengthy MRI procedures thanks to the central Missouri chapter of Credit Unions for Kids (The Maneater Jan. 29). Instead of being sedated for the 45-minute procedure, children can wear a special pair of $44,000 goggles to watch a movie and communicate with MRI technicians. "When we found out there was a need, we knew we could band together and help," said Loretta Roney, president/CEO, Highway Alliance CU, Jefferson City. It took about a year for the chapter to raise the $44,000 for the Children's Miracle Network hospital . . .

Pa. CU second to file suit against Target after breach

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PITTSBURGH (2/3/14)--First Choice FCU, New Castle, Pa., is the second credit union to file a lawsuit against the retail giant Target after a security breach late last year compromised the debit, credit and personal information of about 110 million people.  
 
According to the Pittsburgh Tribune-Review, the $38 million-asset credit union filed suit in U.S. District Court in Pittsburgh Friday.
 
In the filing, the credit union said it has had to cancel and reissue 75 cards for members. It also faces the potential losses of reimbursing fraudulent charges on members' accounts, interest and transaction fees, and other expenses for monitoring and preventing fraud.
 
Alabama State Employees CU, Montgomery, was the first credit union to take legal action against Target, filing a class action suit Dec. 30. (See News Now 1/3/14: CU seeks restitution in class action filed against Target).
 
The lawsuit also claims that the Minneapolis-based retailer was negligent in protecting consumer data and violated Minnesota law by retaining magnetic strip information from purchased made by customers with credit and debit cards.
 
The Credit Union National Association has been collecting data from credit unions on the costs and burdens created by the Target data breach. According to CUNA estimates released earlier this month, the total cost of the breach for credit unions is between $25 million and $30 million. However, the actual costs could exceed this estimate in the coming weeks if greater fraud losses are incurred or those that have reported already add additional costs to their reported totals.

WOCCU accepting nominations for young CU leaders

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MADISON, Wis. (2/3/14)--The deadline for nominations to the World Council of Credit Unions' Young Credit Union People (WYCUP) scholarship program is June 16.
 
Click to view larger image 2013 World Council of Credit Unions' Young Credit Union People winners included, from left, Benjamin Janzen, Canada; Eber Ostemberg, Brazil; Caroline Domanski, United Kingdom; Jenn Vandehaar, Canada; and Christopher Morris, United States. (Photo provided by World Council of Credit Unions)
The scholarship program is an international networking and educational opportunity for promising credit union leaders, said World Council. The program and awards ceremony will take place at the 2014 World Credit Union Conference in Gold Coast, Australia, July 27-30.
 
The program seeks individuals who have made significant contributions to their credit union organizations and have the potential to make a global credit union impact. Credit unions and credit union organizations affiliated with WOCCU can nominate young leaders to compete for the scholarship.
 
"Investing in young people means investing in your credit union's future," said Brian Branch, World Council president/CEO. "WYCUP provides an opportunity to strengthen movements worldwide by exposing this group to new ideas about the most critical issues facing credit unions in and outside their countries."
 
To be eligible, nominees must:
  • Be sponsored by their credit union or credit union organization to attend the conference in Australia;
  • Be 35 years or younger as of this past Jan. 1; and
  • Submit a completed nomination form with supporting materials to WOCCU by June 3.
WYCUP scholarships will be awarded to five recipients for an all-expense-paid trip to the 2015 World Credit Union Conference in Denver. Conference registrants age 40 and younger qualify for a discounted registration fee and can participate in the joint WYCUP/Emerging Leaders program with Customer Owned Banking Association in Australia, whether or not they apply for the scholarship.
 
For more information, use the links.

MCUA addressing patent abuses, multiple issues in state session

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ST. LOUIS (2/3/14)--It will be a busy spring for the Missouri Credit Union Association advocacy team. More than 900 bills have already been filed in the Missouri General Assembly, and the league figures to track at least 10% with direct or potential impact to credit unions, according to Amy McLard, MCUA senior vice president of advocacy, and David Kent, director of state legislative affairs.
 
"The state legislature is quick out of the gate," McLard told News Now. The Missouri General Assembly is a part-time or "citizen" legislature, which meets each year from January until mid-May.
 
Of course, some bills have more impact than others, McLard noted. Among those at the top of the list so far are bills to limit patent troll abuse that have been introduced in both the Missouri Senate and House. The bills are based on similar legislation passed in Vermont, McLard said.
 
The Credit Union National Association backs federal legislation that would curb abusive patent litigation by removing some of the financial incentives sought by firms that assert low-quality patents.  So-called "patent trolls" continue to use low-quality patents to try to extract settlements from credit unions and others.
 
Credit unions have been sued for the use of certain ATM technologies, check-imaging applications and check cashing applications, and providing members with mobile transactions through their smartphones.
 
"We know of specific instances where our member credit unions have been directly affected by patent trolls," McLard said. "It's important we explain to lawmakers the severity of the issue, and that the costs associated with patent trolling affect both the credit union and the consumers that the credit union serves."
 
The league testified in support of a pension advance bill that was heard in committee in January. A pension advance is a financial agreement promising access to up-front cash in exchange for a portion of the individual's pension plan, which can ultimately cost retirees thousands in interest and fees. Pension advance contracts are unregulated and often do not fully disclose the effective interest rate and other fees associated with them.
 
The league is also monitoring a condo lien bill which specifies the order of preference of liens on unit owners. "We're checking with our membership to make sure that any legislation would not have a negative impact on them," McLard said.
 
Not all action is taking place in the legislature.  There is a petition effort under way that would place a constitutional amendment on the ballot that could limit political action committee contributions by financial institutions as well as other businesses and organizations, McLard said.  "We are working with all of the groups affected in hopes to come to a resolution with the initiative petition that won't limit citizens' ability to participate in the political process."
 
Missouri's credit unions are closely scrutinizing the impact of data breaches, following both the Target breach and a credit card breach that affected an estimated 2.4 million cards, used at 79 stores, by Missouri-based Schnucks Markets Inc. in early 2013. "MCUA is asking our credit unions to respond to a survey assessing the overall impact the Schnucks data breach, as it gives a very state-specific example to demonstrate just how much data breaches are negatively affecting consumers and credit unions," McLard said.
 
McLard said multiple tax bills are filed every legislative session in Missouri, and "you always have to be diligent in monitoring them," she said.

Maine CUs counter bankers' letter to Sen. King

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WESTBROOK, Maine (2/3/14)--The Maine Credit Union League is reinforcing the importance of "Don't Tax My Credit Union" after it learned about a Maine Bankers Association (MBA) letter to U.S. Sen. Angus King Jr. (I) and other Congressional delegates.
 
The letter, signed by MBA President Christopher Pinkham and Chairman Rick Vail, urged King to "reconsider your position on continuing a tax-exemption for the trillion dollar credit union industry. Credit unions have moved sharply away from their original mission while growing substantially in size."
 
"It's the same old, tired arguments from the banks and, honestly, takes a lot of nerve for them to write it, in light of all of the issues the banks have had in recent years," said league President/CEO John Murphy (Weekly Update Jan. 31). "However, it serves as a reminder of the banks' ongoing state and national efforts to attempt to restrict credit union operations and taxation."
 
During the holiday season, advocacy efforts had slowed, but Murphy said credit union involvement in advocacy is "more important than ever."
 
Positive media coverage and record-high membership keep credit unions' profile high and solidly in bankers' sights.
 
"The credit union structure as member-owned cooperatives, and the focus on members is very compelling and one that the banks cannot counter," Murphy said, "but we must remain engaged on this issue and highlight the differences between credit unions and other financial institutions at both the federal and state level."

CEO says CUs' legislative 'social' successful in S.D.

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PIERRE, S.D. (2/3/14)--More than 50 credit union advocates met with members of their South Dakota legislative contingent during last week's legislative social in Pierre, S.D.
 
Click to view larger image More than 50 credit union delegates hiked the Capitol during the Credit Union Association of the Dakotas' legislative day in Pierre Jan. 29. Both the House and Senate chambers recognized the visitors during the visit. (Credit Union Association of the Dakotas photo)
"This was one of our more successful and worthwhile legislative events," said Floyd Rummel III, president/CEO, Northern Hills FCU, Sturgis Memo Jan. 30). "Attendance from our credit unions was great, and we appreciate the time and opportunity to successfully tell our story with lawmakers," he added.
 
Although designed as a social activity, the event gave credit union representatives time to talk to nearly 70 state legislators about the South Dakota Bankers Association's "taxation equity" initiative.
 
Last year, bankers launched a statewide effort to convince local lawmakers to impose local, franchise or federal taxes on not-for-profit credit unions and farm credit services. They claim that credit unions have grown "beyond their intended purposes in both size and scope" and taxing credit unions will solve budget shortfalls at the local, state and national level.
 
Highlighting the legislative day in Pierre was a "Hike the Capitol" where the delegates were recognized by both the House and Senate chambers.

CUs top banks: SF Chronicle lists the many ways

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SAN FRANCISCO (2/3/14)--Consumers remain disillusioned with banks--a 2013 Gallup poll reported 74% of Americans had "some or very little confidence" in them--and an article in the San Francisco Chronicle pointed out the many pros of belonging to a credit union.
 
"Part of the distrust comes from the fact that banks are fundamentally profit institutions, meaning they're more likely to take risks with your money, and will often sock users with high fees and have low rates on deposit accounts," the Jan. 30 article said. "With a credit union, on the other hand, you are more likely to see lower fees, get slightly higher interest rates, and experience better customer service."
 
When it comes to accessibility, it's a draw between big banks and credit unions. Bank ATMs and branches are plentiful, but credit unions have a shared ATM network and mobile options to help members find ATMs.
 
"Hands down, credit unions are friendlier on the fee front," the article said, citing a two surveys. MoneyRates.com reported banks have an average monthly maintenance fee of $12--an extra $150 out of a consumer's pocket every year--overdraft charges of more than $30 and out-of-network ATM charges of about $3.
 
When it comes to checking accounts, more than 70% of the largest credit unions have free offerings, compared with 39% of banks, a Bankrate.com survey showed. Overdraft fees are less than $30, and if there are monthly account maintenance fees, they are $2-$5 and don't require a large balance to escape them, the article said.
 
Interest rates were nearly a draw, primarily because overall rates are so low. Although credit unions do offer higher-yielding accounts, they might need more to entice a consumer to switch from a bank.
 
Credit unions remain at the top for customer service, particularly when compared with the big banks. The article hedged a bit, saying, "as their customer base grows, it will be crucial for the industry to ramp up resources to meet demand."
 
Overall verdict? "Credit unions are better." Big banks may have flashy commercials and glossy logos, but credit unions are "by far the best option for banking today."

London mayor told more CUs equals fewer payday lenders

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LONDON (2/3/14)--A new report from a London assembly member urges the city's mayor to promote credit union membership as a way of stifling payday lenders.
 
"Payday London," a report from Liberal Democrat London assembly member Stephen Knight,  recommends London Mayor Boris Johnson curtail illegal and payday by actively supporting the growth of credit unions with low and capped interest rates.
 
The report calls on Johnson to open a credit union savings account for every new secondary school student and for Johnson to actively encourage London residents to join a credit union. The report recommends that Johnson ensures that regulations are changed to require specific planning permission for payday loan shops.
 
"It is a harsh fact that where credit exclusion is greatest, payday companies and illegal loan sharks thrive," Knight told the 24dash.com. "Borrowing is a reality of life for many people on a low income, but if people have no access to credit at low interest rates they are often driven into the hands of loan sharks."
 
London residents have less access to credit unions than other U.K. residents, Knight said. About 1% of London residents belong to a credit union, compared with 3% in Merseyside and 5% in Glasgow, he said.