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N.Y. Senate Majority Leader to banks Learn from CUs

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ALBANY, N.Y. (2/10/09)--The New York Senate Majority Leader cracked a joke at the beginning of his speech to the New York Bankers Association Monday. But the real punch line came later--when he told banks to think out of the box and learn something from their chief competitors--credit unions. Banks need to think outside the box in solving the financial and mortgage crises, said Sen. Malcolm A. Smith, (D-Metropolitan). He noted that credit unions have "by and large escaped problems of our mainstream banking system." The 100 or so bankers attending reacted with incredulous laughter and some eye-rolling, said "The Daily Politics" blog in The Daily News (Feb. 9). Smith told the group: "I know some of you are sitting here and you might say, 'How can you come to this room and talk about credit unions?' The fact of the matter is, business as usual has to change." "We are all in this together, whether they are competitors or not," he added. Smith later told reporters, "I'm not here to make friends. I'm here to do what’s right for the homeowners and people trying to purchase homes….When you think about it, the credit unions are the only ones who basically did not have a challenge in the financial markets, so they did something right. And these guys have to take their head up and say, 'You know what, maybe we need to take a look at what they're doing as well.'" Mike Smith, president of the bankers association, noted that everything was on the table "but clearly with this audience, the credit unions, there's always going to be a reaction." For the article, use the link.

Corporate plan would cost PolishSlavic FCU 7.5 million

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BROOKLYN, N.Y. (2/10/09)--The National Credit Union Administration’s (NCUA) corporate stabilization program would cost Brooklyn, N.Y.-based Polish and Slavic FCU (PSFCU) $7.5 million, PSFCU said. “This bailout will actually hurt us, as our insurance premiums to the National Credit Union Share Insurance Fund will increase $7.5 million just to prop up these failing institutions,” said Bogdan Chmielewski, PSFCU CEO, in a press release.. “Although we remain financially sound and have adequate reserve funds, this is going to negatively impact our bottom line.” PSFCU has 70,000 members and $1.2 billion in assets. It has joined several natural-person credit unions to support the demand that NCUA control the corporate credit union system. NCUA said it would provide $1 billion for the corporate stabilization program. The $1 billion injection is intended to provide reserves to offset anticipated realized losses on some mortgage- and asset-based securities held by U.S. Central, known as the “corporates’ corporate” (News Now Jan. 29).

Desjardins award rules forms for 2009 available

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MADISON, Wis. (2/10/09)--Entry forms for the Desjardins Youth Financial Education Award recognition program are available. The due date is Sept. 4--earlier than usual. The earlier deadline matches deadlines for two other competitions--Dora Maxwell Social Responsibility and Louise Herring Philosophy in Action awards. Participating leagues will determine the entry deadlines for credit unions and chapters for state-level Desjardins competition judging. Details and entry forms are available on the Credit Union National Association (CUNA) website. Judges rate the entries by:
* Awareness and teacher training; * Youth instruction; * Collaboration; * In-school branch programs; and * Legislative and regulatory advocacy.
Last year’s winner, Sonoma County Grange CU, Santa Rosa, Calif., customized the National Endowment for Financial Education High School Financial Planning Program materials to be relevant to youth and adults in the local community. The credit union also teamed up with the local 4-H and participated in local agricultural events. The program reached more than 5,000 youth, CUNA said. For more information, use the links.

CU in Fiji provides 500000 to form insurance plan

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FIJI (2/10/09)--A credit union in Fiji announced it has presented $500,000 to start an insurance plan for credit unions in that country. The credit union is Fiji Public Service CU (FPS CU). The plan is through the Fiji Savings and Credit Union League (Fiji Times Online Feb. 9). According to Manoa Seruvakula, a former commissioner of insurance, Scuna Insurance LTD would apply to the country's reserve bank for an insurance business license and provide the insurance. The proposal aims to encourage savings among potential members of the credit union movement.

Pa. foundation to continue BizKid support

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HARRISBURG, Pa. (2/10/09)--The Pennsylvania Credit Union Foundation approved a grant of $10,000 to continue funding the BizKid$ Program during its fourth year of operation. BizKid$ is a public television series--underwritten by America's Credit Unions--that aims to teach youth about financial literacy. The grant reflected BizKid$’ successful entry into the Pennsylvania Public Broadcasting (PBS) market in 2008, a culmination of operational support of $30,000 previously received from the foundation (Life is a Highway Feb. 9). The BizKid$ grant signals the board’s optimism that Pennsylvania credit unions will take the opportunity to market their services and recruit new members through local contributions to PBS, the foundation told the Pennsylvania Credit Union Association. The program was broadcast on seven PBS stations in the Allentown/Bethlehem, Philadelphia, Pittsburgh, Harrisburg, Johnstown, Pittsburgh and Erie markets. It reached a potential audience of more than 8.1 million people in the state. At least four PBS stations are scheduled to continue broadcasting BizKid$’ year-two programs in 2009, with more expected to come on board.

CU System briefs (02/09/2009)

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* HARRISBURG, Pa. (2/10/09)--Due to overwhelming demand, Mid-Atlantic Corporate FCU and the Pennsylvania Credit Union Association (PCUA) have changed the location of their town hall meeting Wednesday. The meeting will be held at the Sheraton Harrisburg-Hershey, 4650 Lindle Road, Harrisburg, said PCUA. The meeting will address actions by the National Credit Union Administration (NCUA) about corporate credit unions and their impact on natural-person credit unions (Life is a Highway Feb. 9) … * JACKSONVILLE, Ark. (2/10/09)--Arkansas FCU President/CEO Larry Biernacki presented a check for $73,000 to Arkansas Children's Hospital Foundation Vice President Fred Scarborough at a press conference at the hospital Feb. 3. Arkansas Federal employees and members raise $36,500 in the past year through several fundraisers, and the credit union's board voted to match the money, bringing the total to $73,000. Since 1998, the credit union has contributed more than $415,000 to the hospital as part of the Credit Unions for Kids program, a national sponsor of the Children's Miracle Network. Pictured are, from left: Scarborough; Denise Goforth, marketing manager at Arkansas Federal; and the hospital's Kim Dupas, senior community development coordinator; Biernacki; and Gloriane Kabat, child life and education director. (Photo provided by Arkansas FCU) … * BOULDER, Colo. (2/10/09)--Danny Citron, 76, of Longmont, Colo., turned the key, the car started, and he walked away a winner in Elevations CU's $20,000 car giveaway promotion. Citron had the option of taking the car his key started--a Ford Explorer Eddie Bauer Edition vehicle--or selecting either a $20,000 credit at Automotive Avenues or $14,000 in cash. He opted for the cash. Five finalists in the event were Joy McElroy, 87, of Boulder; Christopher Church, 48, of Broomfield; Samantha Vazquez, 31, of Longmont; Rebekah Adams, 18, Longmont; and Citron. They became eligible by opening new accounts at the credit union between Oct. 1 and Dec. 31. Each attended a key-turning event. The promotion aimed to increase new membership, and Elevations reported a "sizeable increase" in new member growth compared with fourth quarter 2007 growth. (Photo provided by Elevations CU) …

Loose change turns to savings at Towpath CU

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FAIRLAWN, Ohio (2/10/09)--Towpath CU and five other financial institutions urged Akron, Ohio-area residents to turn their loose change into savings by bringing it in for deposit. The campaign netted $266,000 in coins at Towpath. The recent campaign, conducted by the $63.8 million asset Fairlawn, Ohio-based credit union, took the initiative a step further by placing coin-sorting machines at its two locations for members’ convenience (eLumination Newsletter Feb. 4). Towpath also made a 10% matching deposit on up to $1,000 in coin deposits. The added bonus required that deposits be placed in new or existing accounts and remain for 30 days. The member who made the largest deposit of change received a $100 three-month certificate. During the week of the campaign, Towpath accepted 833 deposits, opened 188 new accounts and collected $266,000 in coins. One area resident deposited more than $4,120 in loose change that her husband had accumulated over several years. Another resident--striving to win the $100 certificate-- deposited $4,279 in coins collected over 10 years, with pennies alone accounting for $1,300. The credit union told the Ohio Credit Union League that it was overwhelmed by the community’s participation in the program. “It was way more than we expected,” said Towpath CEO Alan McArthur. He assisted a member who brought in a five-gallon jug filled with coins, which was too heavy to put in the coin-counting machine. McArthur solved the problem by using a hammer and screw driver to punch a hole in the jug’s bottom so the coins could slide out. The credit union said it received significant media attention for the savings program.

Javelin Number of ID fraud victims up 22

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SAN FRANCISCO (2/10/09)--The number of identity fraud victims in 2008 increased 22% to 9.9 million adults in the U.S., according to the 2009 Identity Fraud Survey Report, issued Monday by Javelin Strategy & Research. However, the total annual fraud amount rose only slightly--7%--to $8 billion during the past year, the survey said (Business Wire Feb. 9). Javelin, based in Pleasanton, Calif., is an independent provider of quantitative and qualitative research focused on financial services topics. Other key survey findings:
* Overall identity fraud incidents increased in the U.S. The number of identity fraud incidents in 2008 rose by 22% over 2007, which brings the number back up to levels not seen since 2004. Javelin said the rise was due to economic misfortune. Historically, higher rates of fraud occur when the economy worsens. Identity fraud remains substantially lower overall when compared to the 2004 level of $60 billion. * Cost to consumers is down. The mean consumer cost of identity fraud decreased 31% to $496-- its lowest level since 2005--from $718 per incident. The lower cost per incident is attributable to faster detection of fraud, lower fraud amounts, and quicker resolution times thanks to industry efforts and consumer education, Javelin said. * Fraudsters are moving much more quickly. In cases where identity fraud was reported, 71% of the fraud incidents began occurring less than one week from when the data was stolen, up from 33% in 2005. The dramatic increase points to more sophisticated attacks by fraudsters and an increasing number of “attacks of opportunity” in which people or businesses leave data exposed. * Gender disparity. Women were 26% more likely to be victims of identity fraud than men in 2008. Women are making more purchases in stores, and more women than men experienced breaches last year. * Low-tech methods still most popular. Lost or stolen wallets, checkbooks and credit and debit cards were still the most likely avenues of fraudsters’ attacks. These avenues totaled 43% of all incidents in which the method of access was known. By protecting their information, consumers can significantly lower their risks, Javelin said.
Businesses and financial institution such as credit unions should continue working together and educating consumers on how to protect their data, Javelin added.

Delegates from Japan visit California CUs

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RANCHO CUCAMONGA, Calif. (2/10/09)--Representatives from Japan’s Agricultural and Fishery Cooperative Savings Insurance Corp. and the Norinchukin Research Institute visited with executives at three California credit unions last week to learn about the credit union cooperative business model. The group visited California Agribusiness CU, Buena Park, on Feb. 3. Then a member of the delegation visited two San Francisco-based community development credit unions--Mission SF FCU and Northeast Community FCU--to learn how they serve lower-income individuals.
Click to view larger image From left, front row: Mitsugi Nakashima, Agricultural and Fishery Cooperative Savings Insurance Corp. deputy director of the planning division; Hiroaki Funamoto, deputy governor; and Shinya Furue, Norinchukin Research Institute financial and investment division economist. Back row: Tena Lozano, director of credit union development, California Credit Union League; and California Agribusiness CU's Ruth Brock, Buena Park Branch manager; Adam Denbo, president/CEO; Gloria Lopez, vice president of business development; Lisa Mills, City of Industry Branch manager; and Mary Whipple, chief financial officer. (Photo provided by the California Credit Union League)
California Agribusiness CU CEO Adam Denbo, joined by his executive team and Tena Lozano, California Credit Union League director of credit union development, described the National Credit Union Share Insurance Fund (NCUSIF) structure; private vs. federal insurance; the difference between state- and federally-chartered credit unions; the corporate credit union structure; his credit union’s unique field of membership. They also discussed issues such as credit unions' continued fight to increase the member business lending cap, concerns about the increase to the NCUSIF insurance premium, and the need for a risk-based capital system. The executives learned that Japanese not-for-profit financial cooperatives have the same capital requirements as banks (4%). If they conduct international business, the requirement increases to 8%. “The meeting went far better than expected, with mutual sharing of information. We studied the culture and were well prepared, and they understood and valued our perspectives,” said Denbo. “We each shared our concerns about the global economy as well as ideas regarding how regulators could deal with current balance sheet risks of financial cooperatives.” The visiting delegation included Deputy Governor Hiroaki Funamoto and Deputy Director of the Planning Division Mitsugi Nakashima of the Agricultural and Fishery Cooperative Savings Insurance Corp.; and Shinya Furue, economist with the Financial and Investment Division of the Norinchukin Research Institute. Similar to the FDIC and National Credit Union Administration, the Agricultural and Fishery Cooperative Savings Insurance Corp. is similar to the Federal Deposit Insurance Corp. and the National Credit Union Administration. The corporation administers Japan’s savings insurance system. The research institute, an affiliate of The Norinchukin Bank, is the information center for Japan's Cooperative System for agriculture, forestry and fisheries. Both Funamoto and Nakashima asked questions about the present state of agricultural finance and how California Agribusiness CU fits into that marketplace. Furue expressed interest in taking the credit union business model back to Japan. He was particularly interested in learning how credit unions build and retain “firm relationships with members,” and how credit unions will address the economic crisis in terms of lending standards and underwriting. Furue then traveled to the San Francisco-based credit unions. At Mission SF FCU, Furue learned more about the credit union’s nonprofit business model, how it does outreach and marketing, its strategy for reaching low-income borrowers, and its Salva Vida/Lifesaver Loan—a payday loan alternative program. “He found out about us through our website, and he was interested in our work with low-income individuals,” said Ivan Barriga, outreach and financial education director with Mission SF Community Financial Center, affiliated with Mission SF FCU. “He is doing research on a hybrid model of banking that incorporates ‘corporate social responsibility’--and he thought our credit union was an excellent example of this because of our social mission and social impact," said Barriga. "We were flattered they wanted to talk to us--after all, this is a $20 billion bank asking an $8 million credit union for advice on strategy.” “I was particularly impressed with the depth of knowledge these gentlemen possessed concerning our industry and the latest issues we face,” remarked Lozano, who acts as a league liaison for international visitors. “It was wonderful to witness the exchange of ideas and to see their interest in the credit union business model.”

Lawmakers thank MarylandDC CUs for soundness

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COLUMBIA, Md. (2/10/09)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) hosted its Annual Maryland General Assembly Legislative Reception Feb. 2 in Annapolis, Md., and heard praise from state lawmakers.
Maryland Delegate Dana Stein (D-Baltimore County), left, co-chairman of the Maryland State Task Force on Financial Literacy, and Maryland and District of Columbia Credit Union Association President/CEO Michael V. Bell at the association's legislative reception.
Maryland House of Delegates Majority Leader Kumar Barve (D-Montgomery County) thanks credit unions for providing safe financial institutions. (Photos provided by the Maryland and District of Columbia Credit Union Association)
Majority Leader of the Maryland House of Delegates Kumar Barve (D-Montgomery County) applauded MDDCCUA and credit unions for providing Maryland with a safe, sound, and stable financial institutions (FOCUS Newsletter Feb. 9). Rod Staatz, CEO of SECU, Baltimore, as well as a member of the boards of MDDCCUA and the Credit Union National Association, said he was proud to be part of such a strong financial community. Delegate Dana Stein (D-Baltimore County) thanked credit unions for being among the first supporters of the State Task Force on Financial Literacy. Stein told about the task force's progress in working with the Maryland State Board of Education to implement financial literacy in Maryland's public schools. MDDCCUA President/CEO Michael V. Bell addressed the financial climate currently facing Maryland and the initiatives credit unions are taking to help the state weather it. More than two dozen credit unions gathered and discussed issues facing credit unions with members of the General Assembly. The occasion presented opportunities for credit unions to educate members of the General Assembly about the variety of services credit unions provide to Maryland consumers.

Filene names new Research Council members

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MADISON, Wis. (2/10/09)--The Filene Research Institute has named two new members to its Research Council--Barry Shaner and Shruti Miyashiro. Shaner is president/CEO of Directions CU, Toledo, Ohio. He has been with Directions for 13 years, first as chief financial officer. During Shaner’s tenure, Directions has grown from $80 million to over $500 million in assets, and completed two mergers with credit unions of comparable size. He has more than 20 years experience in the credit union movement. Shaner was a charter member of the Filene’s i3 innovation group. He is a board member of the Ohio Credit Union League (OCUL), and has chaired or served on numerous committees of the OCUL and its affiliates. Miyashiro is president/CEO of Orange County’s CU, Santa Ana, Calif. She has more than 15 years experience in the credit union industry. Prior to returning to the credit union, Miyashiro was president/CEO of Pasadena (Calif.) FCU and served in executive level positions at First City CU, Los Angeles, and Service Plus CU, Riverside, Calif. Miyashiro is a member of the Western CUNA Management School Board of Trustees. “We are confident that these prominent credit union professionals will make significant contributions to the deliberations of the council,” said Mark Meyer, Filene CEO. “And we appreciate their willingness to serve. The Filene Research Council is a distinguished group of credit union executives who individually and collectively play integral roles in the continued advancement of the Credit Union System.” The Institute’s Research Council is made up of 25 credit union CEOs. It determines the organization’s research priorities. Council members meet twice annually.