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CU System Archive

CU System

Iowa League To Develop Innovation Group

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DES MOINES, Iowa (2/27/13)--The Iowa Credit Union League is seeking 15 innovative credit union professionals for its new Iowa Innovation Group to help build the future of credit unions.

The league is collaborating with the Filene Research Institute on the program, which will be exclusively for Iowa credit unions.

"We feel there is no better time for the Iowa system to make this investment," said Jim Niederhauser, vice president of Member Services at ICUL. "Innovation is such a critical approach on a number of levels, but ultimately it's concentrating resources for our future sustainability and success."

The 15 innovators should be innovative, insightful and energetic credit union professionals with substantial responsibility, be passionate about the credit union system and constantly envision ways to help credit union members.

"While the recruitment focuses on credit union senior managers who are on a career path toward CEO status, the opportunity is ripe for high potential employees who are committed to professional development, developing an innovation competency, and contributing to transformational change for credit unions at this exciting historic time," said Neiderhauser.

The program is modeled after Filene's i3 program and will use Filene's "Method of Innovation," with coaching from Filene's staff.  Participants will reveal their work at the Iowa Credit Union Annual Convention Sept. 18-20 in Des Moines.

"Over the past decade, Filene has helped develop a proven methodology for innovation that has helped transformative financial services ideas get off the ground," said Matt Davis, Financial innovation director. "ICUL's desire to put this curriculum to work for the citizens of Iowa proves, as they have time and time again, their dedication to improving consumers' lives through credit unions," he added.

Applications are due March 1. Selections will take place by March 15. For more information, use the link.

CU System Briefs (02/27/2013)

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  • RALEIGH, N.C. (2/27/13)--State Employees' CU is developing a new property management subsidiary--SECU*Real Estate (SECU*RE), announced its board Tuesday. In its initial start-up phase, SECU*RE will provide SECU with the ability to streamline management of real-estate owned (REO) properties in North Carolina.  It will take the Raleigh, N.C.-based SECU's existing REOs and work to minimize lost equity through property revitalization efforts and partnerships with the North Carolina housing industry. Its service options will range from rentals to property listings, and its ultimate objective will be to provide affordable homeownership opportunities to SECU members and their families throughout the state. The new company complements SECU's ongoing Mortgage Assistance Program, which has helped more than 8,000 families avoid foreclosure …
  • NEW YORK (2/27/13)--The National Federation of Community Development Credit Unions' second edition of its new quarterly e-magazine, The Bridge, focuses on opportunities from serving immigrant populations within a credit union field of membership. In it, the federation encourages credit unions to consider products, services and strategies to reach immigrant populations.  The cover story looks at immigrants' economic contributions in America, the role they play in their communities and the opportunity for credit unions. It also includes a brief legal background on the state of the Deferred Action for Childhood Arrivals program, a need for a loan fund that serves young immigrants and the role credit unions could play. It highlights four credit unions reaching out to immigrant communities. Also in the edition, Bill Cheney, president/CEO of the Credit Union National Association, reminds readers of a shared vision that embodies the credit union movement based on value and trust, and points to the collective potential of credit unions to become America's most trusted financial partner …

BofA Made Mistake On Fee, Cheney Tells Bloomberg News

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WASHINGTON (2/27/13)--Bank of America--the bank that started the Bank Transfer Day movement in September 2011 when it proposed a $5 fee on debit cards--made a mistake by introducing that fee, Bill Cheney, president/CEO of the Credit Union National Association, told Bloomberg News.

"Clearly, it was a strategic error, especially since they backed down from it," Cheney said in an article, which centered on a number of gaffes made by the bank's executive management, gaffes that the bank is still recovering from. Cheney was the only credit union system executive interviewed in the article.

The article pointed out that credit unions "were among the beneficiaries of [BofA CEO Brian] Moynihan's missteps, gaining 650,000 new account holders in the month after the $5 fee was announced."  It also noted that "Moynihan hit his nadir with the debit-card fee, which was seen as a move by greedy bankers to reach further into consumers' wallets."

The decision to charge the fee, said the article, "was met with protests at branches from Los Angeles to Boston." Thousands closed their accounts. Five weeks later, the bank reversed its decision.

The article also addressed customer dissatisfaction at the bank.  "Rather than court new customers, Bank of America's strategy is to wring more profit from existing ones, soliciting checking-account holders for mortgages, credit cards and investments. That's easier when people appreciate the job you're doing for them. The bank had the lowest customer satisfaction of the four biggest lenders in 2012," the article said, quoting the Ann Arbor, Mich.-based American Customer Satisfaction Index.

Credit unions were the top-rated institutions on that index. And the Bank Transfer Day surge, which urged consumers disgruntled with bank fees to switch to a credit union or local institution, helped prompt a gain of 2.2 million new member accounts at credit unions.

The article, "BofA Surge Affirms Buffett Bet as Moynihan Recovers From Gaffes," appears in Money News (moneynews.com Feb. 26).  For the full article, use the link.

Latino Network Honors Cheney, Williams

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WASHINGTON (2/27/13)--

Click to view larger image CUNA President/CEO Bill Cheney, fourth from left, poses with Network for Latino Credit Unions and Professionals (NLCUP) board members after receiving NLCUP's Leadership & Vision Award.

Hispanics are critical to the future growth of the nation's credit unions, according to Credit Union National Association President/CEO Bill Cheney.

Cheney spoke Tuesday at the annual networking reception sponsored by the Network for Latino Credit Unions and Professionals (NLCUP) at the Hall of the Americas in Washington, D.C.

Cheney was the recipient of NCLUP's 2013 Leadership & Vision Award.

He noted that the importance of ethnic diversity has been apparent during his entire career in the credit union movement, beginning in his hometown of San Antonio and continuing during his days as a credit union CEO and then as CEO of the California and Nevada credit union leagues.

"Last fall's presidential election was a clear indication of how strong a presence Hispanics now have," said Cheney. "And you can see the future by simply looking at diversity of school children across America."

Joining Cheney as an award recipient was Iowa Credit Union League Chief Operating Officer Murray Williams, who received NLCUP's Leadership & Support Award.

Murray spoke of the late Warren Morrow, the founder of the league's Hispanic consulting subsidiary,Coopera Consulting, and of the passion and vision Morrow had for credit unions and the important role they must play in building wealth in Hispanic communities.

Williams was instrumental in creating the partnership between CUNA and Coopera and the emerging partnership between those two organizations and NLCUP.

Speakers at the event included U.S. Reps. Eleanor Holmes Norton (D-D.C.) and Pete P. Gallego (D-Texas).

The luncheon was sponsored by CUNA's Hispanic Outreach Committee and Coopera Consulting.

NLCUP's event was held in conjunction with CUNA's Governmental Affairs Conference, which is meeting this week in Washington, D.C., and which will include 4,200 credit union representatives visiting their legislators on Capitol Hill this afternoon and Thursday.

Click to view larger image Murray Williams (second from left),  chief operating officer at the Iowa Credit Union League, receives the Network of Latino Credit Unions and Professionals (NLCUP) 2013 Leadership and Support Award from NLCUP Board Member Maria Martinez, while members of the NLCUP board look on. (Photos provided by CUNA)

NCUF's Wegner Awards Go To Craig, Hoosman, CU Miracle Day

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Click to view larger image National Credit Union Foundation Chairman Laida Garcia and Vice Chairman John Radebaugh present Rick Craig (right), retired president/CEO of America First FCU, Riverdale, Utah, with the Herb Wegner Award for Lifetime Achievement.

WASHINGTON (2/27/13)--The National Credit Union Foundation presented three Herb Wegner Memorial Awards at its annual dinner Monday night at the Credit Union National Association's Governmental Affairs Conference in Washington, D.C.  

The event celebrated three of the highest national honors in the credit union movement:

"I am appreciative of the support and guidance that senior managers and the rest of the America First FCU team gave in insuring that we focused on the needs of the membership, especially during the Great Recession," Craig said after accepting his award. "What lawmakers permit or prohibit will be the rules under which credit unions will operate, so please become advocates for credit unions with Congress and state legislatures. Your credit union and its ideals are worth fighting for."

  • Lifetime Achievement: Rick Craig, retired president/CEO of America First FCU, Riverdale, Utah;
  • Individual Achievement: Hubert H. Hoosman Jr., president/CEO of Vantage CU, Bridgeton, Mo.; and
  • Outstanding Program: Credit Union Miracle Day.

Craig became executive vice president at America First FCU in 1977. In 1997, he was appointed president/CEO. In addition to the credit union's many community activities, Craig is regarded a leader in adopting new technologies at America First FCU to benefit members and make managing money easier. America First FCU also participates in the Member Loyalty Group, which consists of large credit unions nationwide using the Net Promoter survey score. America First FCU consistently leads the group in the highest scores from its members.

Hoosman, during the past 30 years, has held several management positions, including loan department manager, branch manager, and vice president of operations and executive vice president, before becoming president/CEO of Vantage CU in 1994. When Hoosman started his career at the credit union in 1982, the asset size of the credit union was $34 million. Today, Vantage CU is the fourth-largest credit union in Missouri, with assets approaching $700 million. Hoosman took the lead nationally with credit unions in helping to recognize Dr. Martin Luther King Jr. by raising funds for a national monument which now stands in Washington, D.C.

Click to view larger image Hubert Hoosman, president/CEO of Vantage CU, Bridgeton, Mo., speaks after accepting the Herb Wegner Award for Individual Achievement.

Credit Union Miracle Day (CUMD), through its family of races benefiting Children's Miracle Network Hospitals, has made a significant impact in the credit union industry, said NCUF. CUMD is the largest national credit union event for Credit Unions for Kids, a nonprofit collaboration of credit union organizations engaged in fundraising activities to benefit the hospitals. CUMD started with the 2002 credit union sponsorship of its now flagship event, the Credit Union Cherry Blossom Ten Mile Run in Washington, D.C. Last year, CUMD expanded its cause to a family of races benefiting children's hospitals through Credit Unions for Kids. To date, Credit Union Miracle Day has generated more than $5.5 million for 136 Children's Miracle Network Hospitals nationwide.

This year's winners will join a group of 49 individuals and 23 organizations whose efforts during the past 25 years have earned them the recognition of Herb Wegner Memorial Awards. More than 830 credit union leaders and supporters attended Monday night's dinner in conjunction with CUNA's GAC.

Click to view larger image Juri Valdov, Credit Union Miracle Day chairman, speaks after accepting the Herb Wegner Award for Outstanding Program.  (Photos provided by the National Credit Union Foundation)

Full Speed Ahead For Health Care Reform Compliance, GAC Told

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WASHINGTON (2/27/13)--Credit unions can prepare for moving full speed ahead on complying with the new health care reform mandates, including those going into effect later this year and beyond, a CUNA Mutual Group product executive told a breakout session audience at the Credit Union National Association's Governmental Affairs Conference.

The presidential election's outcome and the U.S. Supreme Court's June decision to uphold the Affordable Care Act  (ACA) should signal a green light for employers--including credit unions--to  do this, said Brad Pricer, senior manager, Employee Benefits Product Management.

"Requirements are already in place, and more are slated for 2013 and 2014, which may require action by health plans, including the distribution of Summary of Benefits and Coverage and Exchange Notice Requirements to employees," Pricer said. He told the group that the U.S. government also had taken a wait-and-see approach but is now moving ahead with a spate of proposed regulations and clarifications for employers to comply with related to the ACA

The Department of Labor has started auditing health care reform compliance, although to what extent is unclear. "I have yet to hear of a credit union that has actually been audited, but now is the time to rely on your broker or consultant to stay on top of the flurry of information coming from the government," Pricer added.

As employers, credit unions have the option to sponsor health plans for employees due to the ACA's individual mandate, but they will have to pay a penalty under "Play or Pay" provisions if they choose not to offer coverage. The penalty tax will apply to certain businesses that do not offer health insurance to their employees at certain levels of coverage and affordability, or do not offer it at all.

"As more details emerge on Play or Pay penalties and how they may be calculated, it's important credit unions understand what effect this may have on them if they don't offer certain levels of coverage deemed 'affordable' under healthcare reform," Pricer said.

Enough information exists that a credit union can estimate if its current plan puts it at risk of incurring Play or Pay penalties. Pricer urged all credit unions to use CUNA Mutual Group's free calculator on its website to assist them in this analysis. Use the link.

He also recommended attendees look for potential opportunities with health care reform, such as shifting to a defined contribution approach for funding a health plan. Such an approach is made easier when combined with offering coverage through a private health exchange. "This moves the risk of incurring high health care costs from employers to employees and is similar to the previous shift with retirement plans. You may find this enables you to better plan health care costs year over year."

Public exchanges also are playing catch-up following the elections. How each will operate, and the quality of the experience for those enrolling through them, is likely to vary state-to-state, he noted.

Credit unions looking to maintain an "employer of choice" strategy in attracting and retaining talent will likely not want to stop offering coverage to employees (leaving them to buy through the public exchanges) , he said. Surveys show most employers will not drop coverage.

Health care coverage could become a deciding factor for individuals in choosing their place of employment. If a credit union no longer provides health coverage, wages for employees likely will need increased, as providing health care is considered a part of employees' compensation.

The bottom line is a credit union's decision to offer health care coverage will likely be driven by affordability and whether it embraces the philosophy of being an employer of choice to recruit and retain the best available talent.

Pricer urged the audience to stay informed about ACA requirements for 2013 and how to best form an appropriate strategy by visiting CUNA Mutual's webpage on Health Care Reform  for timelines, legislative briefs, model notices and forms. Use the link.

Renewed Interest In Credit Up, Market Cards More--CO-OP, TMG

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RANCHO CUCAMONGA, Calif. (2/27/13)--Now that consumers have renewed their interest in credit, credit unions should market their credit cards more aggressively, say CO-OP Financial Services and The Members Group (TMG).

"We are seeing renewed momentum for credit card usage," said Shazia Manus, TMG's CEO. "Balances are going up, credit lines are increasing, and so credit unions should be consistently marketing their credit cards to their members to remain competitive financial service providers."

"Credit and debit transactions drive non-interest revenue at credit unions," said Stan Hollen, president/CEO of CO-OP Financial Services. "If we focus on a few key priorities, credit unions can grow both debit and credit in 2013. As consumers look to deepen card usage, we can strengthen member relations by providing the convenience of these payment options."

CO-OP and TMG, which provide credit card transaction processing programs and other payment solutions to the credit union industry, will host a webinar March 20 at 12:30 p.m. PT about the debit/credit outlook.  Findings they will present include:

  • Consumers racked up $53.5 billion in credit card debt in 2012--five times what they accumulated in 2010, according to TRK Advisors.
  • Credit union card balances are up 4.6% since November 2011, according to CUNA Mutual Group. That compares with growth of 0.4% for the rest of the market.
  • Charge-offs have declined to less than 3%, says TRK Advisors.
  • Managing risk continues to be a challenge, but as the economy improves, so does the credit outlook for consumers.
CO-OP and TMG say credit unions can capitalize on the growing credit market by:

  • Increasing credit lines for responsible credit users who try to keep their card use under 30% of their total lines of credit;
  • Adding products that address credit-bruised consumers--a classic approach for credit unions;
  • Promoting credit to debit card holders and checking accounts to credit cardholders in a move to become the cardholders' primary financial  institution; and
  • Winning business with balance transfer offers.

Federation Roundtable Shows Benefits Of CDFI Certification

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WASHINGTON (2/27/13)--More than 42% of current Community Development Fund Institution (CDFI)-certified credit unions must resubmit their recertification applications by April 1, announced the National Federation of Community Development Credit Unions Monday at its CDFI Roundtable.

The roundtable was held in conjunction with the Credit Union National Association's Governmental Affairs Conference in Washington, D.C.  The federation's event addressed the benefits and process of becoming a certified CDFI and explored new programs, long-term investment prospects from the fund, and opportunities to shape the fund's agenda moving forward.

Ninety-four of the 221 current CDFI credit unions will need to submit the applications, said the federation. The federation has provided a list of credit unions that must resubmit on its website. Use the link.

Jodie Harris, senior advisor to the director of the CDFI Fund, told the group that with the tremendous growth in the number of low-income designated credit unions, the CDFI Fund anticipates the number of CDFI-certified credit unions to "go up immensely."

She commented on the fund's coordination with the federation to streamline the certification process for eligible credit unions. Harris also spotlighted CDFI Fund's grant programs and noted the "large increase in the number of credit unions receiving grants" in recent years.

Regarding streamlining the CDFI Fund's certification process, Pablo DeFilippi, the federation's  director of membership, said, "We've made tremendous progress in this front with the acceptance of our random methodology to demonstrate target market eligibility," adding "we are very pleased with their recognition of the unique governance structure of credit unions that makes them directly accountable to their target market."

Federation President/CEO Cathie Mahon noted the work the organization has done to ensure that essential financial services  that credit unions provide to low-income communities are recognized by the fund in its certification and grant-making process.

Credit unions attending also heard from several credit unions about assistance they received from the federation's CU Breakthrough consulting services in obtaining certification and grant support and about how they are using their CDFI Fund grants.

CUNA's GAC ends Thursday in Washington, D.C.

Click to view larger image The National Federation of Community Development Credit Unions has worked closely with the CDFI Fund to streamline its application process, said Pablo DeFilippi, the federation's  director of membership, at the federation's CDFI Roundtable held Monday in conjunction with the Credit Union National Association's Governmental Affairs Conference in Washington, D.C.  (Photo provided by the National Federation of Community Development Credit Unions)

CUNA Mutual Contributes $135K To NCUF

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WASHINGTON (2/27/13)--CUNA Mutual Group Monday presented a $135,000 check to the National Credit Union Foundation to support the organization's general fund and for Credit Union Development Education.

The check was presented prior to NCUF's 2013 Herb Wegner Memorial Awards Dinner Monday night at the Credit Union National Association's Governmental Affairs Conference in Washington, D.C.

"The NCUF's renewed focus on consumer financial education, training of Credit Union Development Educators and its outreach to the young and elderly to help prepare them for their future or retirement aligns closely with CUNA Mutual Group's mission," said Jeff Post, CUNA Mutual president/CEO. "We are pleased to support an organization that devotes so much energy to develop and strengthen the credit union movement."

As the movement's charitable arm, NCUF funds projects that support industrywide development initiatives--including financial education to consumers of all ages, disaster assistance, greater access to affordable financial services--and empower more consumers to save, build assets and own homes.

"CUNA Mutual Group has been constant in its support of NCUF over the years," said Wendell "Bucky" Sebastian, NCUF executive director. "Our work to help improve consumer financial independence would not be possible without the continuing support of organizations like CUNA Mutual Group."

CU System Briefs (02/26/2013)

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  • RALEIGH, N.C. (2/26/13)--SECU Foundation at Raleigh, N.C.-based State Employees' CU has partnered with the NC Rural Economic Development Center Inc. to fund 35 paid internships for college students from rural North Carolina this summer. The four-week internships will go to students who will be sophomores or juniors at state universities or community colleges. The member-funded foundation will contribute $7,500 per participant for the program's costs, with a total initiative cost of $262,500.  Applications will be accepted in March, with interns selected in April, said SECU ...

OMG! One In Three CUs Abandoned Twitter Accounts

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WASHINGTON (2/26/13)--Nearly one in three credit unions that once had an active presence on Twitter have abandoned their accounts, according to a survey released Monday by marketing research firm, The Financial Brand.

The survey does not answer the question of why they've stopped tweeting. However, the numbers give several clues that indicate a Twitter following may not yield the marketing potential that many assume it does.

The credit unions surveyed with still active Twitter accounts averaged about 400 followers, 20% of whom are from inactive or spam accounts.  The average credit union with such accounts added about 100 new followers last year and sent roughly 500 all-time tweets, with 200 of those sent last year.

"While some of the larger banks and credit unions have been able to find traction on the world's No. 2 social media network, the overwhelming majority have enjoyed little to no success," said the company (thefinancialbrand.com Feb. 25).

As a group, credit unions' Twitter audience is about 0.79% of their aggregate membership. In other words, a credit union can expect, on average, one follower for every $1.5 million in assets, or one follower for each 126 members.

In 2011, about 3.1% of the credit unions with accounts resurrected an account they had previously abandoned, only to abandon it a second time.

Many followers of Twitter are "deadwood"--fake followers such as spam accounts or inactive ones.  The average percent of Twitter deadwood for all credit unions is 18.2%, with 4.2% of them fake followers and 14.67% inactive, said The Financial Brand.  Anyone anywhere can follow a financial institution's Twitter account, including social media self-promoters (5% of the deadwood), consultants and industry insiders (another 5%) and other credit unions and banks (5%-15%), it said.

That means the average credit union on Twitter will have potential marketing value from 50% to 60% of their followers.

The survey was conducted during the fall of 2012 and is based on 350 credit unions or roughly 5% of all U.S. credit unions. For more details from the survey, use the resource link.

New York Times: Big Banks Are Allies With Online Payday Lenders

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NEW YORK (2/26/13)--With 15 states banning high-interest payday loans, big banks have become a critical link for online payday lenders who sometimes charge rates exceeding 500%, according to The New York Times.

Although the big banks don't make the loans, they allow automatic withdrawals for payments of the payday loans, which often trigger overdraft fee--even in states that have banned such loans.

The Federal Deposit Insurance Corp. and the Consumer Financial Protection Bureau are examining banks' roles in Internet payday loans, said the article (Feb. 23). The New York State's Department of Financial Institutions is investigating how banks enable online offshore payday lenders to make the loans in New York, which caps the interest rates at 35%.

Credit unions are often noted as lower-cost alternatives to payday loans for members needing to borrow funds short-term, the Credit Union National Association points out. They don't charge exorbitant interest rates, and some tie their programs to loans that put back funds into a savings account as a condition of the loan, helping the borrower build wealth, or they have a financial counseling component.

More payday lenders are setting up business offshore to evade statewide caps on interest rates, but they couldn't do business without giants like J.P. Morgan Chase, Bank of America and Wells Fargo, said the Times.

"In some cases, the banks allow lenders to tap checking accounts even after the customers have begged them to stop the withdrawals," said the Times.

About 27% of payday loan borrowers surveyed by Pew Charitable Trusts say that the loans caused them to overdraw their accounts, forcing fees.

The article points out that the loans are easy to obtain but hard to stop. One Chase customer told the Times she had six Internet loans. When she asked Chase to close the account in March, it kept the account open between April and May. In the meantime the lenders tried to withdraw funds from the account 55 times. Chase charged her $1,523 if fees--44 insufficient funds fees, extended overdraft fees and service fees.

US Rep Braley Backs MBL At League Conference

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DES MOINES, Iowa (2/26/13)--
Click to view larger image At the Iowa Credit Union League's annual Legislative and Regulatory Conference were, from left: Justin Hupfer, league vice president government affairs; Joe Hearn, CEO of Dupaco Community CU, Dubuque; U.S. Rep. Bruce Braley (D-Iowa); and Jim Hagerman,CEO of Linn Area CU, Cedar Rapids.
U.S. Rep. Bruce Braley (D-Iowa) kicked off the Iowa Credit Union League's annual Legislative and Regulatory Conference last week by speaking about the importance of member business lending (MBL).

"I believe the work you do matters," he told more than 100 Iowa credit union representatives convened in Des Moines Feb. 19-20 to learn more about the legislative issues affecting the credit union industry and to interact with their legislators. 

"The people you serve are an important part of our state," Braley said, adding he believes in the value of MBL and thinks there should be enough room for all parties involved. "To me, there should be plenty of room at the table for lenders doing commercial and business lending," he said.

Credit unions, the leagues and the Credit Union National Association are urging Congress to help credit unions make even more business loans by raising their MBL cap to 27.5% of assets, up from 12.25%. Doing so would help boost the economy by generating $14.5 billion in new loans and 158,000 new jobs, says CUNA, all without costing the taxpayer a dime.

Click to view larger image Iowa State University Head Football Coach Paul Rhoads likened building blocks for a team to that of credit unions at Iowa Credit Union League's annual Legislative and Regulatory Conference last week. (Photos provided by the Iowa Credit Union League)
Credit unions also got kudos at the Iowa conference on trust from Iowa State University Head Football Coach Paul Rhoads, said the league.

Rhoads spoke about the importance of building a team with mental toughness, willingness to continuously improve and that have a commitment to teamwork. "Credit unions have a similarity in the building blocks I use for my team. Smart decision makers. Be accountable. Trust." He explained that "You can't accomplish anything without people--especially in credit unions and the work they do for their members."

Also speaking to attendees were CUNA Chief Economist Bill Hampel, who provided the economic outlook for credit unions; Ed Wallace, deputy director of Workforce Development; and Amy Hudson, director of business development for CoOportunity Health.

Leagues Providing GAC Coverage For Folks Back Home

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WASHINGTON (2/26/13)--While News Now and other media and social media channels at the Credit Union National Association are covering CUNA's Governmental Affairs Conference in Washington, D.C., this week, several leagues are generating some GAC buzz on their own, by providing daily videos and other coverage about the activities for the folks back home.

The Michigan Credit Union League's online video portal, CUBE TV, is providing "Live From the GAC" updates each day about the activities, including interviews with league personnel and credit unions. Roughly 125 credit union leaders are attending from Michigan, which the league says is one of the largest delegations from the state in recent years.

The League of Southeastern Credit Unions is podcasting a daily video "LSCU from the CUNA GAC" on its eSignal Weekly for credit unions in Alabama and Florida. Each day it posts a video chronicling the day's events.  LSCU's first video set the stage for the next four days, with two credit union officials talking about what they hope to accomplish this week.  More than 130 credit union officials from Alabama and Florida are attending the GAC.

Several leagues are covering the events for their daily online or e-mail newsletters. The Credit Union Association of the Dakotas brought highlights and photos to its publication, the Memo from Monday's general session and from the CUNA Strategic Services Board meeting.  About 50 CUAD members are participating in the GAC this year--28 from North Dakota and 22 from South Dakota.

The North Carolina Credit Union League's online newsletter The Daily Conversation recaps the Twitter links shared by the league, North Carolina's credit unions and other sources.  More than 80 advocates from 20 North Carolina credit unions are attending.

Also covering the events: the Texas Credit Union League's LoneStar Leaguer, the Pennsylvania Credit Union Association's Life is a Highway, the New Jersey Credit Union League's The Daily Exchange and more.

For CUNA's extensive multimedia coverage, see related story "CUNA To Deliver Extensive On-Site Coverage Of Action-Packed GAC" in Monday's News Now.

To see the Michigan and LSCU videos, use the link.

Survey: Members Delay Financial Decisions On Life's Big Moments

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WASHINGTON (2/26/13)--Credit union members--especially younger ones--are taking longer to make decisions, causing major purchases and subsequent life events to be delayed, a survey released Monday by TruStage, the consumer brand of CUNA Mutual Group, has revealed.

The survey of more than 1,600 credit union members asked about major financial life events they face in 2013. It focused on the financial decisions members made regarding vehicle purchases, home buying, the birth of a child and planning for college, weddings and retirement.

"When we took a deeper look at the survey results, we were surprised to see that it's taking longer to make major financial decisions and purchases," said Alan Bergstrom, TruStage brand and creative services director. "Given the nature of our fast-paced culture, we anticipated those decisions to happen faster, but the results show many people are actually slowing down and taking more time to plan and decide."

The survey uncovered several generational trends in making major life purchases and decisions. For instance:

  • Generation Y (18-34 year-olds), typically the most connected and tech-savvy demographic, actually takes 18 days longer, on average, to shop for a car than those who are 45-54 years old.
  • People date much longer now before marrying, therefore delaying wedding-related purchases and big life events such as buying a home or a car.
  • Current 18-44 year-olds have underestimated how long it will take to graduate from college, despite rapidly increasing tuition costs and student-loan debt.
  • Retirements are taking longer to reach. For those planning retirement, the expected retirement age is nearly 64 years. For those already retired, the average retirement age was 59 years.
The 18-44 age group--the group underestimating time in college--"is actually attending college at least one full semester longer than they had planned," Bergstrom said. "As a result, the big moments we usually associate with post-graduation--the car buying, weddings and home-buying--are delayed."

The survey also found 18-34 year-olds plan to retire at a significantly older age than preceding generations, with 71% starting to make retirement plans earlier in life--starting, on average, at age 24.

"This presents an opportunity, as our survey indicated this generation considers credit unions to be one of several 'trusted sources' for help in planning retirement," Bergstrom said.

Credit unions should ask some very important questions, he said. "What does this information mean for credit unions?" he asked. "How are economic, social or cultural factors affecting decisions and life event plans? What role does instant access to information and mobile technology play in the decision-making process? When we learn about members' mindsets and behaviors and how they continue to change, we can apply that knowledge to member connections and relationships."

For more information, use the link.

Pat Wesenberg Is New CUNA Board Chair

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WASHINGTON (2/26/13)--Pat Wesenberg, president/CEO of Central City CU in Marshfield, Wis., was elected Monday as chairman of the Credit Union National Association Board of Directors, during a board meeting at CUNA's Governmental Affairs Conference in Washington, D.C.

"I look forward to working with our board under Pat's leadership as we strive to have more Americans choose credit unions as their best financial partner," said CUNA President/CEO Bill Cheney. "I have always valued Pat's perspective and insight, and the way both are energized by her passionate belief in the ability of credit unions to improve people's financial well-being."

Wesenberg succeeds outgoing board Chairman Mike Mercer, president/CEO of the Georgia Credit Union Affiliates.

Other  newly elected board officers are:

  • Vice Chair: Dennis Pierce, president/CEO, CommunityAmerica CU, Kansas City, Mo.;
  • Secretary: Susan Streifel, president/CEO, Woodstone CU, Federal Way, Wash.;
  • Treasurer: Rod Staatz, president/CEO, SECU of Maryland, Linthicum, Md.; and
  • At-large Member: Pat Jury, president/CEO, the Iowa Credit Union League.
Newly elected board members include:

  • Brad Green, president/CEO, Listerhill FCU, Muscle Shoals, Ala., replacing Laida Garcia, Floridacentral CU, Tampa, Fla.;
  • Bill Mellin, president/CEO, the Credit Union Association of New York, replacing Paul Gentile, former president /CEO, the New Jersey Credit Union League;
  • Troy Stang, president/CEO, the Northwest Credit Union Association, replacing Dennis Tanimoto, president/ CEO, the Hawaii Credit Union League; and
  • Scott Sullivan, president /CEO, the Nebraska Credit Union League, replacing Marla Marsh, president/CEO, the Kansas Credit Union Association.

Postal CU's New Student Branch Features ATM

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OAKDALE, Minn. (2/25/13)--Postal CU, based in Woodbury, Minn., has opened an in-school branch that features an ATM.

Click to view larger image Postal CU President Brian Sherrick helps celebrate the grand opening of the credit union's student-run branch at Tartan High School, in Oakdale, Minn. The branch features an ATM. (Photo provided by the Minnesota Credit Union Network)
The credit union recently celebrated the grand opening of its student-run office at Tartan High School, in Oakdale, Minn. The branch serves the credit union's mission of offering financial education and providing students with tools to prepare them for life after high school.

"We have always been a strong supporter of financial literacy and giving back to the community," said Brian Sherrick, Postal CU president. "Implementing a student-operated credit union is the perfect way to merge those two goals into one product that is representative of what we stand for as a financial institution."

The three students who helped start the branch, and who are responsible for the branch's day-to-day operations, are part of the high school's marketing and business club.

The credit union has developed two products to help students learn about finances and develop good credit. The Savers CD pays an above-market rate of 2% and is available to members ages 12-17. Students get a certificate of deposit for amounts from $25 to $1,000 that mature on their 18th birthday.

The Credit Builder Loan is a personal loan of up to $2,500, which is placed on hold in the student's savings account. Monthly payments are made to help build the student's credit, and when the loan is paid in full, the funds are released to the student.

CU System Briefs (02/25/2013)

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  • MADISON, Wis. (2/25/13)--Filene Research Institute has hired Mollie Bell to a new position--chief engagement officer. In that role she will work to grow awareness about Filene, promote the institute's research and innovation findings, develop partnerships and deepen Filene's relationships with credit union professionals and other industry leaders. Bell previously was vice president in the Program Management Office of CUNA Mutual Group. Before joining CUNA Mutual, she held consulting positions with Accenture, a global management consulting and technology services organization. She also has experience in teaching, sales and business ownership …
  • HARRISBURG, Pa. (2/25/13)--Representatives of two Pennsylvania credit unions and the Pennsylvania Credit Union Association met Thursday with new State Rep. Patty Kim (D-Dist. 103) in the State Capitol. Topics discussed included the structure of credit unions, membership base and services. The credit unions shared what services and programs they provide to the City of Harrisburg and Kim's constituents. Kim hopes to help her home city out of its current debt crisis and focus on education and local government issues, said PCUA (Life is a Highway Feb. 22). Shown with Kim are George Nahodil, left, executive vice president, marketing/public relations of Members 1st FCU, Mechanicsburg, and Nate Muniz, public relations manager of PSECU, Harrisburg. Christina Mihalik, PCUA vice president, governmental affairs, also attended the meeting. (Photo provided by the Pennsylvania Credit Union Association) …
  • FRANKFORT, Ky. (2/25/13)--Board and staff of Ashland, Ky.-based Members Choice CU paid a visit with four state lawmakers in Frankfort recently, said the Kentucky Credit Union League  (By The Way Newsletter Feb. 22). Their message: "We just wanted to come by and say thank you for your service and your support of credit unions." The credit union's board and staff make the trip a priority every year. They visited with Rep. Tanya Pullin, Rep. Kevin Sinnett, Sen. Walter Blevins and Rep. Rocky Adkins. Shown in Pullin's office are, from left: Bryan Sparks, loan manager, and Rusty White, board chair of Members Choice; Debbie Painter, league executive vice president; Pullin; Members Choice Directors Gary Darnell and Ken Smith; and Members Choice Board Member Johnny Abbot. (Photo provided by the Kentucky Credit Union League) …
  • LANSING, Mich. (2/25/13)--The Michigan Credit Union League has added generosity and social responsibility initiatives to its educational events. Attendees at the league's recent Lending and Marketing Conference in Grand Rapids were encouraged to bring donations of canned goods, toiletries and pet supplies for Feeding America West Michigan through the West Michigan Food Bank. They collected items from their co-workers, members and chapters before the conference and distributed more than 71 pounds of food and cash donations, which will provide 223 meals for people in need. "We hope to make this sort of 'leave behind' initiative a regular part of our conference and event lineup," said MCUL CEO Dave Adams. (Photo provided by the Michigan Credit Union League) …
  • BISMARCK, N.D. (2/25/13)--The Credit Union Association of the Dakotas has opened a small satellite office in Pierre, S. D., just two blocks from the South Dakota Capitol. It will be used primarily by staff and lobbyists during the legislative session, said CUAD. The office has attention-getting signage clearly visible to the busy street traffic and to legislators who often drive by the location at 112 N. Euclid Ave.  "The board and staff felt that we needed a physical presence in South Dakota to aid in our lobbying efforts and continue to build our relevancy as an advocacy organization in South Dakota," said CUAD President/CEO Robbie Thompson, shown in front of the building (the Memo Feb. 21).  (Photo provided by the Credit Union Association of the Dakotas) …

America Saves, Military Saves Week Kicks Off

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WASHINGTON  (2/25/13)--Credit unions are significant participants of America Saves Week and Military Saves Week,  national educational campaigns that began Sunday and continue through Saturday with the theme "Set a Goal, Make a Plan, Save Automatically."

The Credit Union National Association is among the associations encouraging credit unions to educate families about the importance of saving and of taking steps to build their personal wealth.

"We are proud to support America Saves/Military Saves Week.  Encouraging thrift and wise financial behavior is an essential part of credit unions' makeup," said CUNA President Bill Cheney.

The campaigns unite government, nonprofit and corporate groups in the effort. America Saves lists 87 credit unions as official participants. Official participants also include the National Credit Union Administration and the Defense Credit Union Council. Many other credit unions and organizations are participating in local savings efforts.

For Military Saves, 46 defense-related credit unions are participating, with many having multiple branches involved, according the Military Saves website.  For example, the largest credit union has 231 locations around the world participating.

CUNA has supported the campaign by educating credit unions and the public about the effort. Most recently, CUNA featured Military Saves Week on its weekly Home & Family Finance Radio Show, which aired yesterday.  Sunday's show included a segment with Andia Dinesen, manager of the Department of Defense's Financial Readiness Campaign's Military Saves, Washington, D.C., who discussed using social media to encourage military families to save money automatically every month.

Sunday's program also included segments about living beyond one's means with Grant Cardone,  New York Times best-selling author and host of "Turnaround King," and saving wisely, spending happily, with Sharon Lechter, a certified public accountant and financial literacy spokesperson for the American Institute of CPAs.

Home & Family Finance Radio provides consumers information and advice about money management each week. The show is carried in 63 U.S. markets and is beamed to U.S. military bases worldwide via the American Forces Radio Network.

America Saves Week is coordinated by America Saves and the American Savings Education Council. Military Saves is part of the Defense Department's Financial Readiness Campaign and has been a partner with the department since 2003.

Deposit Growth In CUs, Small Banks Double Big Banks'

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BIRMINGHAM, Ala. (2/25/13)--U.S. credit unions and small community banks saw their deposit growth in the past four years nearly double that of large U.S. banks, according to an annual outlook report issued this month by Bancography, a strategic branch planning firm.

Also, branch closures and consolidations may create opportunities for credit unions, the report indicated. 

Credit unions saw deposit growth of 16.3% during the past four years, compared with 16.9% for community banks, 8.1% for super regional banks (operating in 10-plus states), 7.6% for national banks, 5.7% for super community banks (serving one to three states), and 5.5% for regional banks (operating in four to nine mostly contiguous states within a single U.S. region), Bancography said.

Credit unions' deposit growth between 2011 and 2012 was 3.8%, compared with national banks'  3.9%; community banks, 2.7%; super-regional banks, 1.7%;  super community banks, 1.2%; and regional banks, -0.8%,  the report indicated.

In the report's summary, "Advice for the Year Ahead," Bancography noted a good opportunity for credit unions.

"In long-established markets, branch closures and consolidations may create opportunities for community banks and credit unions to purchase or lease sites at favorable terms," said the report. "But in less-concentrated markets, market leaders continue to add branches, and the costs of keeping pace may prove prohibitive.

"In such markets, smaller institutions may be better served pursuing only specific corridors rather than marketwide branching, or focusing on specific non-retail lines of business such as wealth management or business banking," Bancography added.         

To view the report, use the link.

Seven CUs, Banks Appeal Heartland Breach Lawsuit Dismissal

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NEW ORLEANS (2/25/13)--Seven credit unions and banks have asked a federal appellate court in New Orleans to reverse the dismissal by a lower court of their  lawsuit against Heartland Payment Systems Inc. over losses from a data breach at the payments processor in 2008.

The motion was filed Feb. 8 in the U.S. Court of Appeals for the Fifth Circuit  by four credit unions--Sea Board FCU, Bucksport, Maine; O Bee CU, Tumwater, Wash.; PBC CU, West Palm Beach, Fla., and Pennsylvania State Employees CU, Harrisburg, Pa.--and three banks--Lone Star National Bank, Amalgamated Bank and First Bankers Trust Co.

The lower court, the U.S. District Court for the Southern District of Texas in Houston, had dismissed the case, saying that the financial institutions were not protected as "third-party beneficiaries" in contracts between Heartland and its two acquiring banks; were not protected under the contracts between Heartland and the major card brands, such as Visa, MasterCard and Discover; and were not consumers who could claim misrepresentation or negligence under various state consumer protection laws (News Now Dec. 15, 2011).

The motion to dismiss makes three arguments:

  • Heartland owed the issuing banks a duty to take reasonable measures to avoid the risk of a foreseeable intrusion into its computer network and theft of the confidential payment card data,  and New Jersey law applies to appellants' negligence claim.
  • The complaint satisfies applicable pleading standards by noting specific facts, including: a Visa executive's statement that the breach would not have occurred if Heartland had been vigilant in maintaining its compliance with applicable security standards; a statement by Heartland' s president that it could have done more to prevent the breach; the removal of Heartland from Visa's Payment Card Industry Data Security Standard-compliant entities;  and fines assessed by MasterCard for not taking appropriate security measures.
  • None of the financial institutions are collaterally estopped from pursuing their negligence claims against Heartland because their claim is for Heartland's failure to adequately monitor its own security systems.
Heartland 's data breach--one of the largest ever recorded--compromised roughly 130 million credit and debit card accounts, including thousands of credit union member accounts. More than 560 financial institutions, including at least 178 credit unions, reissued credit and debit cards as a result of the breach.

Both consumers and financial institutions filed lawsuits. Financial institutions' suits were consolidated into a single case while consumers' lawsuits were consolidated into a separate case. Heartland reached several settlements with Visa, MasterCard and Discover, which also had sued on behalf of their financial institution clients.

Survey: Pesky Fees Linked With Lower Loyalty

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CHICAGO (2/25/13)--Pesky fees--the kind that penalize members for inactivity or using paper statements as opposed to fees for bounced checks--have been linked to an erosion of loyalty among consumers of financial institutions.

Fees were the common theme in comments from "detractors" of low performing institutions on the Satmetrix Net Promoter Score (NPS), a program offered credit unions by Chicago-based credit union service organization (CUSO) Member Loyalty Group.  The score examined more than one million survey responses for the CUSO's 2011 relationship survey focusing on overall member relationship versus specific transactions.

The survey defines "pesky fees" as fees such as those charged for inactivity, paper statements or picking one's own personal identification number. Comments expressing frustration over pesky fees were three times more common in bottom-performing institutions when compared with loyalty leaders.

"The irritation members feel when they discover 'pesky fees' can erode member loyalty and even muddle the credit union difference," said Michelle Bloedorn, CEO of the Chicago-based Member Loyalty Group. "Members understand that fees have to be charged when they overdraft their checking account, but fees that are not based on member action or seem to be punitive in nature are extremely frustrating," she added.

NPS found that the actual fee income per member at top NPS performers is nearly identical to that of loyalty laggards. However, the NPS score is significantly higher in credit unions without negative member comments regarding fees. The score is based on the premise that all customers fall into three categories: promoters, passives, and detractors. To get the score, subtract the detractors from the promoters.

Consumers in the 35-54 age range were the group most particularly frustrated by pesky fees. Member comments, especially from older members, also showed they clearly understand the credit union difference and take pride in being a member of an organization that offers high quality service and does not charge as many fees as the big banks, said Member Loyalty Group.

"While other factors are likely at play in both the top and bottom performers, the 'pesky fees' are one common theme that credit unions should be aware of and may be able to avoid," said the CUSO.

The effect of fees on loyalty was a significant factor for credit union growth in 2011, when millions of people fed up with big bank fees switched to credit unions during the months surrounding Bank Transfer Day. That movement was triggered by proposed debit card fees at big banks such as Bank of America. The Credit Union National Association estimates that more than 2.2 million consumers opened accounts at credit unions in the 12 months that ended June 20, 2012.

Pa Young Pros Plan Networking Organization

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Twelve young Pennsylvania credit union professionals met at Pennsylvania Credit Union Association headquarters in Harrisburg to begin planning a young professionals organization for credit union employees in the state. (Photo provided by the Pennsylvania Credit Union Association) 
HARRISBURG, Pa. (2/25/13)--A group of 12 young professionals from Pennsylvania credit unions met in Harrisburg Wednesday to begin planning a young professionals organization for credit union employees in the state.

The group will focus on three areas--advocacy, education and community service. The group--co-sponsored by the Pennsylvania Credit Union Association and Mid-Atlantic Corporate FCU--aims to help bring a voice to young credit union professionals and to help credit unions attract and retain them (Life is a Highway Feb. 21).

Association President/CEO Jim McCormack stopped by, voiced his support for the group and expressed how important its mission is to the future of the credit union movement.

The organization will be open to employees between the ages of 18 and 35 from affiliated credit unions.

The organization will have two goals--to create an informal network for young professionals to meet and become more involved in the movement, and to develop a certificate program for emerging credit union leaders.

Financial Columnist: Innovate To Increase Marketshare

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SAN FRANCISCO (2/25/13)--Credit unions must take an innovator's approach to increase their marketshare and disrupt the commercial financial industry with low-cost, high quality alternatives to existing products and services, says a financial technology columnist.

"Credit unions have to popularize great products that banks would never dare to launch for fear of cannibalizing existing revenue streams," wrote Ivan Schneider, a columnist specializing in financial technology for Enterprise Efficiency.

Credit unions rely too much on the concept that they are superior to banks because of their community focus, ethical lending policies and member-owned structure, Schneider said in the column, "Advice to Credit Unions: Innovate or Die." By sending that virtue-based message, credit unions create the expectation that they must only maintain service levels on par with commercial banks, he said.

"And by that thinking, credit unions will stagnate at 6% market share forever," Schneider wrote.

But while credit unions for the most part lack the resources to develop new technology themselves, they are great proving grounds for new technology, Schneider wrote. Financial technology is full of startups and established providers with new approaches to core banking, multichannel management, mobile access, branch reconfiguration, "and other powerful and potentially disruptive technologies," he added.

"If credit unions intend to shift financial power away from big banks, there's no quicker route than for credit unions to discover a better technological formula for serving customers," he wrote.

The main challenge is that credit union leaders remain open to new ideas and pitches from industry vendors, Schneider concluded.

To read the full article, use the link.

Foreclosure Process Too Long--Maine CUs

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PORTLAND, Maine (2/25/13)--"The foreclosure process is too long" was the overwhelming consensus from respon­dents to a recent survey by the Maine Credit Union League. The survey asked all credit unions in the state about the Foreclosure Diversion Program, es­tablished in 2009 as part of foreclosure legislation passed, so the league could gauge how well it is working.  

"Anecdotally, we have been hearing that for the past couple of years but what the survey is doing is providing us with real examples and feedback from credit unions," said Quincy Hentzel, league di­rector of governmental affairs (Weekly Update Feb. 22). "While the league and credit unions are supportive of the Foreclosure Diversion Program, there may be an opportunity to explore and propose ways to make it better. The league will evaluate our options to have the feedback and concerns of credit unions about the length of the process addressed."

The survey will help determine the successfulness of the program and whether the league will recommend any changes to increase its effec­tiveness or efficiency.

An Act To Preserve Home Ownership and Stabilize the Economy by Preventing Unnecessary Foreclosures, passed by the Maine Legislature, established the Foreclosure Diversion Program. Its purpose is to assist homeowners and lenders in achieving mu­tually agreeable resolutions to mortgage foreclosure actions through the me­diation process.

The Maine Supreme Judicial Court was required by law to report on the program to the state legislature by Feb. 15.  Based on the court's report and recommendations, the legisla­ture may introduce legislation to amend or enhance the program.

Several states are considering laws to streamline the foreclosure and modification process in the wake of revelations of business practices by some mortgage originators and servicers during the housing crisis.

SunCorp Moves Its Office

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WESTMINSTER, Colo. (2/22/13)--System United Corporate FCU (SunCorp) has relocated its operations to a new building in Westminster, Colo., to reduce operating expenses.

The move is expected to save its member credit unions and organizations roughly $350,000 a year, said SunCorp.

"SunCorp was able to secure a property that will bring value to our member owners for subsequent years, as well as saving the organization thousands of dollars in leasing costs," said Kim Withers, SunCorp Board chair and CEO of Meridian Trust FCU in Cheyenne, Wyo.

The move was completed during the Jan. 19-21 holiday weekend. The transition went smoothly, with few disruptions to normal operations, the corporate said.

During the weeks surrounding the transition, the corporate also tested and executed its business resumption plans. SunCorp provides payment services, lines-of-credit and investments to its member credit unions, credit union service organizations and credit union associations in the Western states.

CU System Briefs (02/22/2013)

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  • WACO, Texas (2/22/13)--A man convicted of an August robbery of $238 million asset Genco FCU CU in Lacy Lakeview, Texas, was sentenced to more than seven years in federal prison by a federal judge. U.S. District Judge Walter S. Smith in Waco, Texas, also ordered Bradley Kilmer, 33, of Fort Worth, Texas, to be placed on three years of supervised release following his prison term, and to pay $14,032.84 in restitution and a $100 special assessment to the court. Kilmer also was wanted for robbery in at least two states, including August robberies of a Fort Worth Community CU branch in Weatherford, Texas, and a bank in Alvarado, Texas …
  • PLATTSMOUTH, Neb. (2/22/13)--A Nebraska man faces up to 20 years in prison after pleading guilty Tuesday to being in possession of money allegedly taken during a Dec. 7 robbery of  Sac FCU, Plattsmouth, Neb. Caleb M. Searcy, 21, was charged in Cass County District Court with receiving stolen money greater than $1,500, a felony (Omaha World-Herald Feb. 21). An empty bank box was found in the woods near the credit union the day after the robbery. It was later discovered that Searcy had obtained a significant amount of money. He admitted he found the box in the woods. Also, Gabriel L. Coen, 29, and Brandi L. Coen, 31, both of Plattsmouth, were arrested by Plattsmouth police Tuesday in connection with the robbery. They were booked on suspicion of theft by receiving stolen property over $1,500 …
  • NEW BERLIN, Wis. (2/22/13)--Dodge Central CU, which is now part of New Berlin, Wis.-based Landmark CU, announced it has made a $100,000 commitment to a proposed community center, The Watermark  project, located in Beaver Dam.  The Watermark will be a 22,000-square-foot home to the Beaver Dam Community Activities and Services Department, including senior services. To honor the gift, The Watermark will name one of its premier rooms in recognition of the $1.98 billion asset credit union's support. The announcement was "one of our first acts as Landmark CU in Beaver Dam," said Barbara Campbell, Landmark regional president. "We want to continue to make a notable impact in helping our community achieve projects like The Watermark that will appeal to all ages and community members from all walks of life," she added (Beaver Dam Daily Citizen Feb. 21) …

Buckley Named Deputy Commissioner Of Texas CU Department

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AUSTIN, Texas (2/22/13)--The Texas Credit Union Department announced that Daniel "Dan" Buckley will become the department's Deputy Commissioner, effective Monday, according to a newsletter posted on the department's website.    

Buckley has 27 years of experience in the credit union industry, most recently serving as senior vice president of risk management at Corporate America CU in Irondale, Ala.

He worked 25 years for the National Credit Union Administration, serving as an examiner, supervision analyst, problem case officer, loss/risk analysis officer, director of administration, and corporate field supervisor.

Buckley also completed NCUA's Management Development Program.

Report: ID Fraud Victims, Amounts Stolen Up In 2012

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PLEASANTON, Calif. (2/2/13)--For the second consecutive year, identity fraud in 2012 increased in the U.S., affecting 12.6 million consumers, or 5.26% of adults--the highest level since 2009, according to the 2013 Identity Fraud Report issued by Javelin Research & Strategy.

Identity fraud affected one victim every three seconds, costing consumers an average $365 in 2012, up from $354 in 2011. Most fraud costs were borne by credit unions and other financial institutions, merchants and businesses. The average resolution time remains unchanged at 12 hours, Javelin said.

On the upside, consumers information is being misused for the shortest time--48 hours--and more cases are being resolved--a 92% resolution rate--than at any other time in the past seven years, the report indicated.

One of the major findings of the report is that new account fraud (NAF) increased nearly 50%--to 1.22% of all adults in 2012 from 0.82% in 2011. With total fraud loss doubling to $9.8 billion in 2012 from 2011, NAF is a growing threat to consumers and the bottom line of private industries, Javelin said.

Many fraud cases can be detected by monitoring credit reports, because 57% of NAF cases involved the establishment of general-use and store-branded credit cards, the report said.

Data breaches are the most prevalent way for fraudsters to pilfer huge amounts of consumer information with much less risk than prior methods, such as going through a victim's trash or stealing records from an individual's health-care provider's office. In fact, one in four persons who received a notification of a breach became a fraud victim.

So to combat identity fraud, it is necessary to protect against a data breach and to properly respond if one does occur, Javelin said.

To access a summary of the report, use the link.

The Credit Union National Association, through its CUNA Strategic Services provider alliances, offers several resources and services to combat identity fraud. To view CUNA's Identity Theft Resources, use the links.

Winter Storm Closes Dozens of CUs In Kansas

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WICHITA, Kan. (2/22/13)--A winter storm that swept through Kansas Thursday closed more than two dozen credit unions and two credit union service organizations, said the Kansas Credit Union Association.

By 11 a.m. Thursday, the storm had dropped 10 inches of snow, and an accumulation of 18 inches was expected in some parts of the state, KCUA Communications Director Susan Dyer told News Now. KCUA offices were open Thursday, with some staff working from home.

"We haven't had this big of a storm in several years," she said, noting at the time the storm front was pushing toward Kansas City. Most of the state was under a winter storm warning, with the storm moving eastward.

As of 10 a.m. CT, 22 credit unions and two CUSOs in Kansas had closed. Later in the day, more credit unions announced closings. Most had closed all their branch locations. Closed were:

  • Bell Government CU, Dodge City;
  • Bluestem Community CU, El Dorado;
  • Central Kansas CU, Hutchinson;
  • Credit Union of America, Wichita;
  • Credit Union of Emporia, Emporia;
  • Credit Union of Dodge City (Kan.);
  • Central Star CU, Wichita;
  • Educational CU, Topeka;
  • Emporia State FCU, Emporia;
  • Envista CU, Topeka;
  • EquiShare CU, Wichita;
  • Hutchinson (Kan.) CU;
  • Hutchinson Government Employees CU, Hutchinson;
  • Kansas State University FCU's West Branch, Manhattan;
  • KU CU's Lawrence branch;
  • Mainstreet CU, Lenexa;
  • McPherson (Kan.) CO-OP CU;
  • Medical Community CU, Wichita;
  • Meritrust CU, Wichita;
  • Midwest Regional CU, Kansas City;
  • New Century CU, Topeka;
  • Quest CU, Topeka;
  • River Cities Community CU, Atchinson;
  • TECU CU, Wichita;  and
  • USPLK Employees FCU, Leavenworth.
Two CUSOs also closed: Cap CUSO and Educational CUSO. Frontier Community CU closed early, and Medical Community CU was open but with limited staff.

The Missouri Credit Union Association was also bracing for the storm, according to its Facebook postings.

KCUA said it was posting information on its Facebook page. "We're trying to keep our Facebook page updated: facebook.com/KansasCreditUnion Association," said Dyer. KCUA's Twitter account is @TheKCUA.

Oregonians Would Side With CUs On Tax Issue, Says Poll

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BEAVERTON, Ore. (2/22/13)--Oregon voters have overwhelming loyalty to credit unions over banks and they largely support the credit union not-for-profit tax exemption, according to a new poll.

Seventy percent of those polled said they agree that because credit unions are not-for-profit, they should not have to pay business or occupation taxes. The telephone survey was conducted by Voter/Consumer Research in late January, with 300 registered Oregon voters, according to the Northwest Credit Union Association.

"Loyalty to credit unions is very high, and this doesn't surprise us given how much money consumers save by leaving their banks," said Troy Stang, president/CEO of NWCUA.

The poll was released as bank lobbyists again pressed the Oregon Legislature to begin imposing a corporate tax on the state's largest credit unions.  Credit unions pay property and payroll taxes but are exempt from state occupation tax. As not-for-profit cooperatives, their earnings are returned to members in the form of lower fees, lower loan rates and higher returns on deposits.

Protecting credit unions' tax exempt status is the top priority for credit unions, leagues and the Credit Union National Association, and will be among the topics discussed during CUNA's Governmental Affairs Conference next week in Washington. D.C. The conference begins Sunday and ends with visits to Capitol Hill by more than 4,200 attendees. Use the link for more information.

The results of the Oregon poll suggest that banks' attacks against credit unions won't be popular with the public, said NWCUA.

Other findings:

  • Roughly 90% of Oregonians surveyed have a positive impression of credit unions, with 56% having a favorable opinion of banks. Credit unions have a 96% approval rating among their members.
  • When asked which side they would take if a disagreement between banks and credit unions erupted in the legislature, 71%  of those polled said they would side with credit unions, and 18% said they would side with banks.
Oregon's tax officials estimate that the bank-supported legislation to tax credit unions could generate $1 million to $4 million a year in revenue. However, CUNA estimates that Oregon's working class credit union members saved much more--$121 million in direct benefits during the 12 months ending in September, 2012.

"That's $170 a year in real savings for the average credit union household," Stang said. "That is a benefit bank customers do not enjoy. Our members--teachers, truck drivers, working moms and dads--didn't pay those banking fees and instead invested their savings right back into Oregon's economy," he added.

JP Morgan/Bear Stearns Files Motion To Dismiss NCUA Lawsuit

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KANSAS CITY, Kan. (2/22/13)--J.P. Morgan Securities, formerly known as Bear, Stearns & Co., Wednesday asked a federal judge in Kansas to dismiss a lawsuit by the National Credit Union Administration over $3.6 billion in residential mortgage-backed securities (RMBS) sold to four corporate credit unions that later failed, or stay any action until an appellate court decision on a similar lawsuit.

The motion was filed in the U.S. District Court in Kansas City, Kan.  It asks that if the court can't dismiss the case entirely, it should stay any action pending results of an appeal in similar RMBS lawsuit NCUA filed against RBS Securities Inc.  That case is on appeal before the Tenth Circuit Court of Appeals in Denver.

NCUA's lawsuit, filed Dec. 14, alleges that Bear Stearns violated federal and state securities laws when it sold the RMBS to U.S. Central FCU, Western Corporate FCU, Southwest Corporate FCU, and Members United Corporate FCU. It alleges that the company's underwriting guidelines had been systemically abandoned and the investments were presented as less risky than they really were.

The motion to dismiss or stay said that "despite warnings from the offering documents, the news media and even the board itself, the credit unions made the informed decision to plunge the majority of their assets into RMBS at the height of the housing bubble. That investment strategy--which even the board has condemned as 'aggressive,' 'excessive' and 'unreasonable'--backfired when the housing bubble burst. The credit unions lost their 'unreasonable' wager and subsequently collapsed."

Defendants base their motion on three arguments:

  • NCUA's claims are time-barred by the applicable statutes of limitation and repose;
  • It "fails to plead an actionable misrepresentation or omission"; and
  • It "cannot plausibly allege materiality" related to any purported misrepresentation because of the offering documents' "extensive disclosures and the information publicly available at the time of the credit unions' purchases."
J.P. Morgan bought Bear, Stearns and Co. in 2008, after the sales occurred. The credit unions were liquidated in 2010. NCUA's lawsuits are filed in its role as liquidating agent of the corporate credit unions.

So far, NCUA has sued Credit Suisse (USA), J.P. Morgan Securities, RBS Securities, Goldman Sachs Group Inc.,  Barclays Capital and Wachovia. Those cases are progressing through various courts. Other suits against Citigroup, Deutsche Bank Securities and HSBC were settled  for more than $170 million.

Look Outside Industry For Strategic Insight, Says TMG Paper

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DES MOINES, Iowa (2/22/13)--A new white paper from The Members Group (TMG) looks outside the financial services industry to help credit unions better determine their core competencies and get in touch with the value proposition they bring to the marketplace.

"Strategic Planning's Big Questions," written by Shazia Manus, TMG CEO, studies how companies such as FedEx, U.S. Cellular, Walgreens, Dell, the Mayo Clinic and National Geographic create unique value propositions. She recommended that credit union leaders "can and should look outside the industry for inspiration."

Media companies today are facing as many, if not more, challenges to their business model as financial institutions. To more fully "bring to life" the experience of reading a

National Geographic magazine or watching the brand's cable channel, the company took its content on tour, creating interactive content for mall-goers. Passersby saw themselves interacting with dolphins, dinosaurs, storms and spacemen on a theater-size screen.

"For me, it brought back all those memories of being a child, lying on the floor looking at all of the pictures in my grandpa's and dad's copies of National Geographic," said one person who experienced the tour. The same user concluded "that's exactly what marketing should do … make us smile and bring back those memories we hold close."

Value propositions fall into four basic categories: Best quality, best price, luxury or must-have, according to Anthony Tjan, CEO of the venture-capital firm Cue Ball. Credit unions must determine if and how their unique competencies can work to make consumers recognize them as the leader in one of the four categories, Tjan said.

"Figure out how to reposition your offering. Stop being stuck in the middle and aim to set a new standard," Tjan said.

ND CUs Make Progress On Fin Ed, Adult Abuse Bills

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BISMARCK, N.D. (2/22/13)--North Dakota credit unions are tracking 34 bills in the state legislature, and Credit Union Association of the Dakotas (CUAD) Thursday reported progress on a financial education bill and a bill relating to reporting adult abuse.

HB 1217, a bill relating to financial education at the middle school level, came out of committee, passing 12 to 0 and then passed in the House 90 to 2. The bill is now in front of the Senate Education Committee, said CUAD (the Memo Feb. 21). The bill would require that concepts of personal finance--such as checkbook mechanics, savings and credit card use--be included in the curriculum of grades seven and eight.

Also, CUAD is monitoring SB 2323, a bill relating to mandatory reporting of vulnerable adult abuse. While CUAD said it is not completely opposed to the premise of SB 2323, it is concerned as to how it will be applied to the role of financial institutions.

Passage of SB 2323 in its current language could leave North Dakota's financial institutions vulnerable to civil action or lawsuits, said Jeff Olson, vice president of advocacy and awareness at CUAD, in the article.

"A primary role of financial institutions is to protect assets, prevent losses and safeguard consumer information," said CUAD in testimony Monday before the North Dakota Senate Appropriations Committee on SB 2323.

"While regular customer contact puts financial institutions in a unique position to detect financial exploitation of vulnerable adult abuse, credit unions and other depository institutions are resistent to the enactment of statutes requiring reporting and participation in both voluntary and mandatory reporting programs, on the premise that disclosure of confidential information regarding a customer may result in liability. Specifically, civil and/or criminal penalties for violation of federal and state laws regulating the disclosure of personal financial information," said CUAD.

The testimony referred to "a number of court decisions in which credit union members and bank customers have sued their financial institution for damages allegedly resulting from the disclosure of damaging or embarrassing financial information. Specifically, theories under which a customer might sue a credit union or bank for disclosure of private information include: breach of a contractual duty of confidentiality, defamation and invasion of privacy."

CUAD said the solution is to not include financial institutions, and to exempt them from the bill based on an individual's right to financial privacy and the potential breach of that information. It also is based on violating federal and state laws regulating personal financial information disclosure.

Filene Features 'Black Belt' CUs on Online Mobile, Strategies

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MADISON, Wis. (2/22/13)--Credit unions are deploying online and mobile banking to enhance the member experience, rather than as a tool for cost reduction, as has been the case with many technological innovations, according to a new white paper from the Filene Research Institute.

The report, "Online and Mobile Channels: Strategies of High-Performing Credit Unions," was developed from a survey of 481 U.S. based credit union executives conducted by Filene in the third quarter of 2012.

Nearly 90% of credit unions surveyed cite enhancing the member experience as a major objective of their online channel efforts. Maintaining competitive parity is a major objective for three-quarters of credit unions, and seven in 10 consider building member trust a major objective.

The report identified the credit unions respondents as Black Belts, Blue Belts and Green Belts, based on the extent to which their information technology departments were committed as business enablers, how well they coordinated with other business functions within their organizations and the extent to which the credit union demonstrated a tolerance or aversion for technology-related risk.

Black Belts, which accounted for 36% of respondents, exhibited a strong commitment as business enablers, had excellent coordination with other business functions and were risk tolerant, said Filene.

Blue Belts (35%) demonstrated a strong commitment as business enablers, had moderate coordination with other business functions and were risk neutral.

Green Belts (30%) were moderately committed as business enablers, had inconsistent coordination with other business functions and were risk averse.

Black Belts and Blue Belts outperform Green Belts in driving adoption of their online and mobile banking offerings. About four in 10 members of Black and Blue Belt credit unions use their credit union's online banking site, in contrast to a third of Green Belt credit union members.

About twice as many Black and Blue Belt credit union members (9%) are banking with a mobile device, compared with Green Belt credit union members (5%). Black Belts also have higher online product application rates than other credit unions. Black Belt credit unions report that about one in five personal and auto loans came in through the online channel in 2011.

The report concluded that credit unions have different styles of technology management and that style predicts online channel strategy.

Kid's CU Tracks Students' Fin Ed Progress Through School Years

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Southern Chautauqua FCU President/CEO John Felton talks to students at a local school about the Kid's Credit Union program and how they can graduate high school with $10,000 by meeting yearly savings goals. Candy White, Kid's Credit Union coordinator,  is standing behind a table, with $10,000 in cash on display.
LAKEWOOD, N.Y. (2/21/13)--Southern Chautauqua FCU in Lakewood, N.Y., has expanded its "Kid's Credit Union" financial education program by more than 200% in area schools last year.

The National Credit Union Foundation provided the $59 million asset credit union a grant to cover the cost of materials for the program. 

"The vision of the credit union is to strengthen students' financial position so they will have a positive impact in the workforce after high school and become the community's bright future," said John Felton, Southern Chautauqua president/CEO. "The best way to affect the future is to teach a child the value of saving money and rewarding them for their efforts."

The program begins by providing financial education to second graders in Southern Chautauqua FCU's community and follows participants through to their graduation in high school. They have yearly goals, with the end-goal to graduate with a balance in their accounts of more than $10,000.

"Educating youth on the importance of saving and being financially savvy is critical," said Lois Kitsch, NCUF national program director. "Southern Chautauqua FCU's Kid's Credit Union program is a great mix of financial education with an attractive savings product."

Click to view larger image A billboard advertises Southern Chautauqua FCUs' Kids Credit Union program around New York. (Photos provided by the National Credit Union Foundation)
Kid's Credit Union is a 10-year project, educating students about Southern Chautauqua FCU's  "Save First" philosophy. Kid's Credit Union was established in 2005 at two elementary schools. Today, the credit union works with six area elementary schools in low-income-designated areas.

Southern Chautauqua uses its own financial education curriculum in the schools, and employees teach the lessons. It also donates piggy banks to get students started saving.

One major difference in the program is in the structuring of students' accounts as certificates. Participants receive a schedule so they see how their money will grow through the 10-year process.  As the end of the school year nears, students receive reminders about the amount in their account and the amount needed to achieve their goal for that year.

Southern Chautauqua FCU is set to expand to another area school soon.

CU System Briefs (02/21/2013)

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  • RIVERSIDE, Calif. (2/21/13)--Altura CU, Riverside, Calif., has created a fund to assist the family of San Bernardino County Sheriff Deputy Jeremiah McKay, who was killed Feb. 12 in a shootout with fugitive former Los Angeles police officer Christopher Dorner. Dorner is accused of killing four people in a revenge-style killing spree in Southern California last week. Deputy McKay is survived by his wife, Lynette, a former Altura employee who worked at the credit union for many years; a 7-year-old daughter and 4-month-old son.  "We are deeply saddened by this event," said  Jennifer Binkley, Altura chief operating officer. "Because of Lynette's time with Altura, we feel a special connection to this family and want to help them through this terrible tragedy." Altura seeded the fund with a $5,000 donation and is accepting donations from employees, members and the community at its nine branches and through its Member Services Center at 888-883-7228 …
  • GALESBURG, Ill. (2/21/13)--Two credit unions and a bank in the Galesburg, Ill., area are warning consumers of a scam involving automated phone calls to members/customers asking for account information (The Register-Mail Feb. 15).  They include Gale CU, Bulington Northern CU and Midwest Bank of Western Illinois. The institutions said the callers have more information about the member/customer than with past scams, including bank account numbers and corresponding phone numbers. One call went to Janice Gioannini, an office manager at Burlington Northern CU. It asked her to respond to "problems" with her debit card. Fewer than 25 instances were reported to the institutions, which reminded consumers that their business practices do not include calling member/customers and seeking account information …
  • KANSAS CITY, Kan. (2/21/13)--A Kansas City man was sentenced to 95 years in federal prison for robberies of Education CU in Topeka and another credit union and bank in Leavenworth. Charles Shaw, 55, also was ordered to pay more than $54,000 in restitution.  He also was convicted of trying to rob Education CU a second time. He allegedly fell during the attempted robbery and broke an ankle as he tried to flee, said The Associated Press Newswires and WIBW-AM (Feb.20). He reportedly had five other convictions for armed robbery dating back to 1983 ...
  • PHILADELPHIA (2/21/13)--Philadelphia, which local media say is not known as a bank-robbery town, is seeing a spike in robberies, according to the Federal Bureau of Investigation and Philadelphia Police (Philly.com Feb. 18). Last week, however, robbers hit five city banksin six days, making the total 14 in one month. That compares with 75 attempts each of the past two years.  None of the recent robberies were of credit unions and they all were in different parts of the city and its suburbs. Area members of the FBI Violent Crimes Task Force said the uptick is peculiar, with no serial robber, no organized crew or clear pattern.  A suspect has been identified in one of the robberies …
  • HARRISBURG, Pa.  (2/21/13)--Representatives from the Pennsylvania Credit Union Association and three credit unions met recently with U.S. Rep. Keith Rothfus (R-Pa.) to discuss credit unions and current issues, said PCUA (Life is a Highway Feb. 20). Among those meeting with the freshman congressman were PCUA Director Bill Wehr, CEO of R-S Bellco FCU, New Brighton; Dave Ackerman, CEO of USX FCU, Cranberry Township; and Joe Marzullo, CEO, Washington (Pa.) Area Teachers FCU.  PCUA said Rothfus was attentive and appreciated the briefing. Another meeting is scheduled with Rothfus next week in Washington, D.C., during the Credit Union National Association's Governmental Affairs Conference …

Municipal Deposits, Other CU Bills Introduced In NY

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ALBANY, N.Y. (2/21/13)--Bills that address municipal deposits, robbery penalties and inclusion in New York's Banking Development District (BDD) Program have been introduced in the state legislature, as the Credit Union Association of New York continues to advance credit unions' state legislative agenda for 2013.

Companion bills that would allow New York municipalities to make deposits into credit unions and savings banks up to the deposit insurance limit per deposit (currently $250,000) were introduced in the state Senate and Assembly, said CUANY.

Senate Bill S.3161 was introduced by Sen. Jack Martins (R-Long Island) and was referred to the Senate Local Government Committee. Assembly Bill A.4520 was introduced by Assemblyman Harvey Weisenberg (D-Long Island) and was reported to the Assembly Banks Committee. Both legislators introduced similar bills in 2012.

An additional municipal deposits bill, A. 1112, was introduced by Assemblyman Carl Heastie (D-Metropolitan) last month and was referred to the Assembly Banks Committee, said CUANY.

Legislation to increase the penalty for robbery of property from a financial institution was introduced  in the Senate by Sen. Joseph Griffo (R-Utica-Rome) and referred to the Senate Banks Committee.  S.3559 would make the crime a class C felony.  The bill is a companion to A. 2485, introduced last month by Assemblyman Charles Lavine (D-Long Island).

Additional robbery legislation (S.3039) provides that the threat of using a firearm or explosive device during a robbery would constitute robbery in the second degree. It  was introduced by Sen. John Bonacic (R-Catskill-Hudson/Southern Tier) and referred to the Senate Codes Committee.

In the Senate, S.3569, which authorizes credit unions to participate in the Banking Development District Program, was introduced by Sen. Malcolm Smith (D-Metropolitan) and referred to the Senate Banks Committee. A similar bill, A.4555, was introduced by Assemblyman Dennis Gabryszak (D-Buffalo) and referred to the Assembly Banks Committee.

Also, companion bills that would enable low-income credit unions in cities with one million or more in population to participate in the BDD program were introduced in both the Senate and the Assembly, said CUANY.

According to the New York City Comptroller's office, the BDD program establishes bank branches in geographic locations where there is a demonstrated need for banking services and authorizes municipalities to deposit funds at below-market rates into bank branches located in the BDD.

CUAD Broadcast, Cheney Showcase CU Difference, Issues

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BISMARCK, N.D. (2/21/13)--The credit union difference and the Credit Union National Association's role in promoting it and other credit union legislative issues were discussed Tuesday by CUNA President/CEO Bill Cheney, who was a guest on a Credit Union Association of the Dakotas-sponsored "Legislature Today" podcast. 

Cheney said CUNA is trying to get credit unions exempted from regulations in many cases because "no one has to protect consumers from credit unions," he said, quoting former U.S. Rep. Barney Frank.

Maintaining the federal income tax exemption for credit unions is on top of CUNA's list of priorities this year, along with regulatory relief and some charter enhancements, Cheney added.

"A tax on credit unions isn't a corporate tax, but a tax on 96 million working credit union members," he said regarding the credit unions' exemption. "Congress, I believe, doesn't want to tax middle-class Americans." 

Show host Dale Wetzel asked Cheney about current credit union national membership trends.

"Credit unions have seen substantial growth in the past year sparked by Bank Transfer Day … on Nov. 5, 2011," Cheney said. "Bank Transfer Day shed light on credit unions and that they don't charge all the fees that banks do. It resulted in lots of media, consumer and small-business interest in credit unions. In the past 15 months, credit unions have seen the most growth they have in the past 15 years."

Since BTD, two-and-a-half million people have joined credit unions, and three million checking accounts have been opened at credit unions nationwide, he said. 

Why? "Because credit unions are a better deal," Cheney explained. "The growth is continuous and is accelerating." Word of mouth and social media have helped spread the word, he added.

What makes the credit union option truly different is that every member is on equal footing--with one member, one vote--so everyone has a say in the operation of a credit union and how it treats its members--which is different than how banks operate, Cheney explained.      

When asked about the financial shape of credit unions today, Cheney replied that while the financial crisis was tough on everyone, credit unions went into it well-capitalized, didn't engage in predatory lending practices and did not make loans that contributed to the crisis. Therefore, credit unions weathered it better than most financial institutions. Since then, they have climbed back on their feet with a quick recovery, he added, citing a key statistic

"Credit unions saw an increase in business lending of 45% during the financial crisis on a national level, while banks decreased lending by 15%," Cheney said. "Credit unions filled a void when they were most needed by consumers and small businesses."

Regarding new financial regulations, Cheney said their effects on credit unions have been huge. "Every dollar a credit union has to spend in compliance costs is a dollar they can't spend to help members,"  he explained. "It is a costly and serious issue."

To hear the podcast, use the link.

CUs' Mobile Banking Enters Second Generation: Special Report

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MADISON, Wis. (2/20/13)--Mobile banking is here to stay at credit unions. Today, about one-third of all credit unions offer mobile banking. The rest are likely to roll it out within the next 48 months. By comparison, online banking took about twice as long to reach similar numbers.

So says Robb Gaynor, chief product officer of Malauzai Software Inc., a provider of mobile banking applications for community financial institutions, including credit unions, for News Now's special report.

Rob Kimmett, senior vice president of marketing for the Massachusetts Credit Union League and its subsidiary, New England Credit Union Services, discussed the ascendance of the mobile channel in a recent blog post on the league's website.

"Credit unions need to think of the smart phone as an intrinsic part of their checking/debit product," Kimmett wrote. "Someday in the very near future  ... the phone will be the payment device. But for now it is still a part of the product because it manages the account. It is in the member's pocket or bag and the check book and register are collecting dust at home."

Mobile banking is already moving beyond providing members with the ability to make basic transactions to a second generation that includes account management, member engagement and lending functions.

Malauzai will focus on three growth areas in mobile banking during the next six to 12 months:

  • Tablet applications. Malauzai's first client to roll out a mobile banking application for iPad had enlisted 20% of its membership for the application within five days, Gaynor said. "A lot of people have iPads out there, and they love to use them," he added.
  • Smart phone cameras. As many as 25% of members who enroll in mobile banking use remote deposit capture when it is offered, Gaynor said. Malauzai also has rolled out Picture Pay, through which credit union members take a photo of a bill statement, confirm the amount to be paid and submit the payment to the credit union digitally. "The camera is going to shine this year," Gaynor said.
  • Mobile employees. Increasingly credit union employees will employ mobile apps internally to enlist new members and perform teller transactions, Gaynor said. Supervisors will also use mobile apps to perform the "override" function required on many teller transactions.
First Financial CU, Chicago, offers loan applications through a mobile application from CU Mobile Apps, a subsidiary of Member Service Corp. Members can view and sign their documents using their smart phones. About 1,000 members downloaded the app within 30 days of its roll out, Patrick Basler, president/CEO of the $60 million credit union told News Now. The credit union approved 67 mobile applications during a personal loan special the week of Black Friday.

"The reason I emphasize mobile technology is because it allows a small shop like mine to compete with the Bank of America and Wells Fargo," Basler said. "Mobile levels the playing field for credit unions."

Credit unions also are beginning to employ the mobile channel to market to their members. Members receive targeted advertisements and can click through to learn more about offers. These ads can have a click-through rate as high as 10% to 12%, Gaynor said.

The reason for that high rate is obvious for anyone who has sat in an airport or coffee shop and saw the high percentage of people with their eyes glued to their phones, said Rick Hargis, president/CEO of Member Service Corp.

"This is the single best opportunity in my lifetime to reach the member," Hargis said. "They have got to see that message. And the credit unions have the advantage of working from a position of trust with their members."

Conn League: State Foreclosure Mediation Bill Adds Burden

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MERIDEN, Conn. (2/21/13)--The Credit Union League of Connecticut testified Tuesday before state lawmakers that a bill on the foreclosure mediation process would add unnecessary levels of mandated bureaucracy in the foreclosure and mediation process.

In a Connecticut State General Assembly hearing, league President/CEO Tony Emerson testified on behalf of the 125 state- and federally chartered credit unions that would be affected if the measure passes in its current form.

"The bill prescribes certain actions that may hinder the processes already used by credit unions as they diligently work to help their members remain in their homes," Emerson said.

"In addition, there may be 'unintended consequences' in the form of added provision expenses, resulting in unnecessary incurred expenses that would further deteriorate the bottom lines of a fragile, but slowly recovering economy," he said.

The bill was introduced to attempt changes in the mediation process of foreclosures, but one of its provisions would extend the process. As a result of testimony at the hearing, the committee is considering ways to amend the legislation, the league said.

Measures involving the foreclosure mediation process have cropped up in several cities and states and in congressional committees as a result of practices of mortgage originators and servicers during the housing crisis.

CSS Provider LendKey To Raise Hurricane Sandy Funds At GAC

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NEW YORK (2/21/13)--Cloud-based lending services provider LendKey (formerly Fynanz) will raise funds for credit union victims of Hurricane Sandy at this year's Credit Union National Association Governmental Affairs Conference (GAC).

Click to view larger image Click for larger view
LendKey is CUNA Strategic Services provider.

"The destruction caused by Hurricane Sandy was devastating to the New York City area," said LendKey CEO Vince Passione. "Our employees, and many of our clients, are residents in some of the hardest hit areas of New York and New Jersey. Their perseverance and dedication to their communities inspired us to match their courage with action."

Based in New York City, LendKey has strong ties to the East Coast victims of last fall's Hurricane Sandy. The company has pledged to raise donations for the storm's victims through the National Credit Union Foundation's CUAid.coop disaster relief fund, the only national online disaster relief fundraising center for credit union staff, volunteers and members.

LendKey will donate $5 for every business card posted on its booth's "Goodwill Wall" at Booth No. 347 at the GAC Feb. 24-28, in Washington, D.C.

Lending Spurs Wis State CUs' Highest ROA Since 2003

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MADISON, Wis. (2/21/13)--Wisconsin state-chartered credit unions reported an average return on assets of 1.0% in 2012, the highest since 2003, the Wisconsin Department of Financial Institutions (DFI) reported Friday.

Earnings increased more than 81% over 2011 to $225.7 million.

The results were driven by a strong lending market and improved delinquency rates, said Brett Thompson, president/CEO of the Wisconsin Credit Union League.  Wisconsin credit unions' loan ratio of 1.36% was the lowest since 2007.

"Credit unions have picked up their lending, and when you see an increase in the loans you are making and a reduction in loan losses, you create greater income, and that's exactly what you are seeing here," Thompson said. "A big part of that is in the mortgage area. With rates being low, credit unions are doing more mortgage loans, some of which they are selling to the secondary market."

In the 12 months ending Dec. 31, Wisconsin's 187 state-chartered credit unions:

  • Achieved a net worth ratio of 10.25%, the highest since 2008;
  • Grew assets by 6.6% to $23.4 billion; and
  • Reduced provisions for loan losses by 21.5%.
A full report on the 2012 performance of Wisconsin credit unions will be available on the DFI website later this month.

Nebraska's 'Save To Win' Grand Prize Winner Announced

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KEARNEY, Neb. (2/18/13)--The Nebraska "Save to Win" $25,000 Grand Prize has been presented to KEE FCU member Laverne Brickner, announced the Nebraska Credit Union League.

Click to view larger image Laverne "Vern" Brickner, third from left, a member of KEE FCU, Kearney, Neb., is the $25,000 Grand Prize winner of the Nebraska Credit Union League's Save to Win program. At the check presentation were, from left:  league President/CEO Scott Sullivan; KEE FCU President/CEO Cheryl Montgomery; Brickner;  his wife DeAnn Brickner; Marion McDermott of the Kearney Chamber of Commerce; Kearney City Councilman Bob Lammers; and state Sen. Galen Hadley. (Photo provided by the Nebraska Credit Union League)
Brickner was among 1,643 credit union members across the state who participated in the program. During 2012,  Save to Win accounts opened saved more than $1.97 million, averaging about $1,200 per account.

"I want to thank credit unions for offering this program, which helped me save and helped all those members to save across the state," Brickner said at the check presentation.  He said he and his wife plan to use a part of the winnings to remodel their home.

On hand for the presentation were league President Scott Sullivan, State Sen. Galen Hadley (NP-Dist. 37) of Kearney, Kearney City Councilman Bob Lammers, Kearney Chamber of Commerce representative Marion McDermott, and KEE FCU President CEO Cheryl Montgomery.  KEE FCU is located in Kearney.

"The grand prize certainly changed the life of Mr. Brickner and his family, but we also believe it can help to change the lives of all participants in a positive way by helping them to begin saving or escalate their current savings habits," said Sullivan.

In addition to the $25,000 Grand Prize, Nebraska's Save to Win also awarded $18,000 total in monthly cash prizes throughout the year. For every $25 members deposited, up to $250 monthly, in their Save to Win account, their name was entered into the monthly drawing.

Ten credit unions from Omaha, Lincoln and Kearney began offering the savings program in 2012 by offering one-year share certificates or certificates of deposit, which the member could open with $25 and build by depositing into the account throughout the year.

The program was first launched in 2009 by the Michigan Credit Union League in partnership with Doorway to Dreams, the Filene Research Institute and eight Michigan credit unions. In 2011, the Nebraska Legislature passed legislation to allow Nebraska credit unions to offer a similar program. Throughout 2012, Michigan and Nebraska were the only states of offer Save to Win programs to credit union members.

The program's goal "is to show our members that building a savings nest egg is possible even in small amounts and that saving doesn't have to be boring, but rather, it can and should be fun," said the league's Sullivan.

LSCU Announces 10% Dues Rebate To Member CUs

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BIRMINGHAM, Ala., and TALLAHASSEE, Tenn. (2/20/13)--Member credit unions of the League of Southeastern Credit Unions & Affiliates will receive a 10% dues rebate in 2013--the first time credit unions in either state have received a dues rebate.

A strong financial 2012 recorded by the league and LEVERAGE, its League Service Corp., made the rebate possible, LSCU announced Tuesday.

"The LSCU & Affiliates works hard to be streamlined and efficient," said LSCU & Affiliates President/CEO Patrick La Pine. "When we have a great year, it only makes sense to share our successes with our member credit unions that helped us achieve this success."

The rebate is "a good example of how the league doesn't take affiliation for granted," said LSCU/LEVERAGE Board Chairman Mary Ott Wood, CEO of Brandon-based Florida West Coast CU.  She noted the rebate "is not a marketing ploy to drive up affiliation," but just "good business sense…We're working together to help all of our credit unions succeed."

The rebate will be in the form of a paper check at the end of first quarter. The league also noted several restrictions:

  • Credit unions must pay their dues in full by March 31;
  • Those that aren't affiliated in previous years are eligible to receive the rebate in 2013, but  must pay dues in full by March 31; and
  • Any credit union granted a dues waiver or reduction in 2013 is not eligible for the rebate.
LSCU closed the year with $150,000 in net income, which it attributed to running a streamlined operation and an increase in attendance at its education and training events.

LEVERAGE recorded more than $340,000 in net income. LEVERAGE provided part of its surplus to the league as a dividend to help fund the dues rebate.

CU System Briefs (02/20/2013)

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  • LIVE OAK, Texas (2/20/13)--Randolph Brooks FCU (RBFCU) has presented a check for $150,000 to create the Randy M. Smith Endowed Scholarship for Alamo Colleges, named for the former president/CEO of the Live Oak, Texas-based credit union. The presentation was made at a recent meeting of the Alamo Colleges Board of Trustees. It represented one of thelargest endowed scholarships at the Alamo Colleges Foundation. The first scholarships will be awarded for the Fall 2013 semester. Smith served as president/CEO from 1987 to Dec. 31, 2012, after a stint as vice president. He now serves as senior adviser to the RBFCU board of directors. He is also a committee chair and member of the college foundation board. He has been active in the Texas Credit Union League, the Credit Union National Association and other credit union industry groups. Smith was a charter member of the Federal Reserve Bank of Dallas' Community Depository Institutions advisory council and advised the Federal Reserve Board in Washington, D.C., on community institution issues. Smith, at left, is pictured with Alamo Colleges Foundation Director Jim Eskin.  (Photo provided by Randolph Brooks FCU) …

Mich Members Start Week Of Winning With $43M Saved

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LANSING, Mich. (2/20/13)--Ten Michigan credit union members each will receive a $10,000 check this week as grand-prize winners in Michigan's Save to Win program.

The checks will be delivered by the group of the Prize Squad, a group of Michigan Credit Union League employees, during the "Week of Winning" statewide tour.

In 2012, members from 58 credit unions that participated in Michigan's Save to Win program saved $43.6 million, with an average account balance of more than $2,872--both up from the $37.3 million saved in 2011, when the average account balance was $2,235.

In February 2009, the league launched the Save to Win program, which focuses on how much money people save, in contrast to most reward-type programs based on how much people spend (News Now Feb. 11, 2009).

Credit unions in other states such as Nebraska, Washington and North Carolina have adopted the program.

For every $25 that goes into a certificate of deposit, a credit union member gets one chance at winning a weekly lottery and one entry for an annual grand prize of $100,000.

Most participating credit unions also individually award prizes to members who sign up for Save to Win, with prizes varying from credit union to credit union. All Save to Win deposits generate interest and build savings.

"Save to Win is the consummate example of Michigan credit unions doing what they do best: helping members to better their lives," said David Adams league president/CEO. "Through Save to Win, members are learning a critical life skill, growing their personal wealth, and having fun all at the same time."

Credit unions with grand-prize winners include:

  • Besser CU, Alpena;
  • ELGA CU, Fenton;
  • Community Alliance CU, Dearborn;
  • Peninsula FCU, Escanaba;
  • Grand Rapids (Mich.) Family CU;
  • Ishpeming (Mich.) Community FCU;
  • Lake Trust CU, Lansing;
  • U.P Catholic CU, Marquette;
  • Royal Oak, OUR CU, Royal Oak; and
  • Christian Financial CU, Roseville.

CUNA Mutual: Drought Draws 30,000 Claims So Far

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MADISON, Wis. (2/20/13)--The drought of 2012 was the worst in roughly a half century, pushing down corn yields in some states to their lowest level in nearly 30 years, with soybean yields also hard hit. That meant more claims filed by farmers insured by CUNA Mutual Group's crop insurance business.  

Click to view larger image Corn damaged by the drought this summer in Southern Illinois. (Photo provided by CUNA Mutual Group)
Through the Standard Reinsurance Agreement (SRA) with the U.S Department of Agriculture, ProAg--a crop insurance company that CUNA Mutual purchased in 2009--paid 30,000 claims in 2012. That amounts to $784 million so far and compares to a premium total for the program in 2012 of $608 million, Mike Connealy, president/CEO of ProAg, told News Now for this special report.

In 2011, the drought in the Southern Plains also resulted in significant crop losses--particularly with cotton--but it had less of an impact on ProAg's earnings. However, the loss numbers are similar year over year, Connealy said.

CUNA Mutual has been involved with ProAg since 2006, and the company diversified its insurance coverage to include a bigger role in crop insurance in 2009.  

Due to the complex nature of the SRA and private sector reinsurance, the actual year-to-date underwriting loss in 2012 so far for ProAg is in the 2% of premium range, Connealy explained.

"It's a cyclical business," Connealy added. "You'll have several good years, then one really bad year. Like any insurance business, financial results in crop insurance can be better in some years than others.

"For example, in 2010, ProAg accounted for almost half of CUNA Mutual Group's operating revenue growth, which offset challenges in our credit union business lines due to the down economy," he explained. "As a result of ProAg's performance that year, credit union leagues received $5 million more from CUNA Mutual than in previous years."

From CUNA Mutual's perspective, there are some lessons to be learned and conclusions drawn from a big event like the severe drought.

Preparation for a disaster year requires adequate staffing of field claims adjusters, Connealy explained. ProAg was well-prepared to handle the large number of claims due its staff levels and the ability to move employee adjusters from low-loss frequency areas such as Minnesota to drought states such as Nebraska, he added.

"We are in the weather business, and a drought such as 2012 provides us a chance to exhibit our ability to handle claims," Connealy said. "Any insurance provider can look good when the test is easy. Our record in 2012 is one of execution when the pressure was on due to the heavy claim volume. We will retain and grow our book going forward thanks to passing this test."

The 2012 drought means an upswing in future business for ProAg, with a caveat.

"Farmers will tend to buy higher levels of coverage than what they might have had in 2012," Connealy said. "This will tend to increase the premium volume for the industry. However, that increase may be a bit uneven, as states such as California or Florida--where ProAg has a decent footprint--were not affected by the 2012 drought."

So what is the outlook heading into this summer for crop insurance coverage?

"The only known effect is that farmers will still have coverage for 2013," Connealy concluded. "Whether they decide to plant corn, soybeans or another crop is up in the air until April or so, as world markets for commodity prices move up and down. The drought appears to have broken in the Eastern Corn Belt. The Western Corn Belt is still on the dry side. It is a good two to three months for the planting season in the Western Corn Belt, so there is plenty of time for the weather pattern to change."  

(See tomorrow's issue for another News Now special report on second-generation mobile banking.)

CUs Help As Study Says Nation Struggles To Save

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NORTHBROOK, Ill., and MADISON, Wis. (2/20/13)--While many credit unions are assisting a nation that still struggles to save, a new study points out why it is necessary to keep educating overly optimistic consumers about managing their finances and making saving a life-long habit.

Credit unions help consumers in many ways: with better savings rates, lower interest rates on loans, short-term loan alternatives to payday lending, special programs such as savings lotteries, contests, affordable mortgages, and providing business loans to new entrepreneurs, to name a few. But most of all, they stand out in member-centric financial education.

Americans are treading water and need financial management skills, according to the second Allstate Life Tracks Poll by Allstate Financial. Half of Americans surveyed have money left over after paying for essentials each month, but more than 41% live paycheck to paycheck. Another 8% don't earn enough to pay for essentials.

Consumers' debt is increasing, said the report. Sixty-five percent of Americans with credit card debt say their debt level has increased or remained the same in the past year. Of those surveyed, 49% pay credit card debt; 43% pay mortgage payments; 36%, car payments; 17%, student loans; and 15%, medical debts. Of the 51% who are expecting tax refunds this year, 45% intend to pay off debt with the refund.

Still, Americans remain optimistic about their finances. Roughly  91% of  respondents surveyed say they are confident they can manage their  personal finances, with 42% of parents very confident about paying for their children's educational opportunities, 41% believing they can afford a new car; 47% confident they can buy a new home; and 41% confident about retirement. Eighty-nine percent indicate they are doing the same or better financially than their friends, neighbors and co-workers. More than 52% say they are doing better financially than their family did when they were growing up.

But their optimism may be tempered with their savings habits, creating a disconnect that will be an opening for credit unions to tout their financial education services. Many Americans, the survey found, place other priorities higher than dealing with their personal finances.  Roughly 59% say they know what they are supposed to do and make the right decisions generally, but 34% don't always make the correct decisions and 6% are unsure what to do. Nearly half (47%) say they are saving less than they should be.

The good news: 91% believe personal financial management is a skill people can improve over their lifetime. Enter credit unions, with a slew of tools and programs aimed at members and consumers.  For some possible sources credit unions can use to assist their members, use the links.

Oregon Op-Ed Cites The Many Benefits Of CUs

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SALEM, Ore. (2/20/13)--Credit unions' tax-exempt status results in many benefits for Oregon residents, says the head of an Oregon credit union in an opinion-editorial in a state newspaper.

Credit unions "continue to grow assets, increase membership and invest in their communities," wrote Jean Wheat-Palm, president/CEO of Valley CU in Salem, Ore., and vice chair of the Northwest Credit Union Association, in a Sunday op-ed in the StatesmanJournal.com

That trend validates that residents in the area find value by trusting their financial livelihoods "to a member-driven institution that helps families and local businesses," she added.

Wheat-Palm was writing in response to a board member of an area bank previously asking in a Guest Column on Feb. 13, what benefits are Oregonians receiving in exchange for credit unions tax-exempt status?

Preserving credit unions' tax status is the top priority in 2013 for the Credit Union National Association, according to CUNA President/CEO Bill Cheney.

Wheat-Palm noted CUNA "estimates Oregon credit unions provided $121,469,487 in direct financial benefits to the state's 1.4 million members during the 12 months ending September 2012."

Wheat-Palm concludes that "If banks (which still control 93% of all assets nationally) believe the state credit union charter gives credit unions an advantage over for-profit banks, they can solve their concerns by converting their bank into a not-for-profit credit union."

To read the op-ed, use the link.

USA Women's Championship To Race At Cherry Blossom Run

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WASHINGTON (2/20/13)--This year's USA Women's 10 Mile Championship, presented by America's Credit Unions, will join in on the festivities at the 41st Runners Rite of Spring on April 7 in Washington D.C., announced the organizers of the Credit Union Cherry Blossom 10 Mile Run and USA Track & Field (USATF).

Credit Union Miracle Day, the sponsor group of a family of races, in cooperation with the Credit Union National Association and the National Association of Federal Credit Unions, secured the naming rights of the championship run. The championship name will say it is Presented by America's Credit Unions.

"This designation elevates not only this world-class running event, it also raises awareness of credit unions' commitment to serving their 95 million member-owners and communities," said Charlie Mallon, president/CEO of Congressional FCU and chairman of the race committee for the Credit Union Cherry Blossom 10 Mile Run.

The  run will provide an advance start for the elite women, so they can compete for times that will be recognized as coming from a women's-only race.

With the level of U.S.  talent expected for the championship, it is likely that the American record for a women's-only 10 mile race will be set at the event, said organizers. The current mark of 54:37 was set by the late Sally Meyerhioff in the 2009 Credit Union Cherry Blossom 10 Mile Run. USATF's rules distinguish between American record times set in women's-only races and mixed races.

"The addition of the USA Women's 10 Mile Championships to our slate of weekend activities complements and reinforces our mission, which is to be the only truly elite road race in our nation's capital," said Race Director Phil Stewart.

"We appreciate the support of America's Credit Unions, which made it possible for us to host the women's championship, and are excited to host the very best American women distance runners, and look forward to them taking aim at the single-sex U.S. record."

"The Credit Union Cherry Blossom 10 Mile Run has been a spring institution for road runners for more than four decades," Max Siegel, CEO of USATF said.

More than 26,000 runners submitted applications to participate in the 2013 Credit Union Cherry Blossom 10 Mile and 5K. With a field limit of 15,000 established by the National Park Service and selected by lottery in December, not everyone who hoped to run will be able to participate in this year's "Runners Rite of Spring." Runners include more than 900 Capitol Hill staffers

.

There are, however, a limited number of openings for Charity Race entrants, who must register by March 1. Charity Race entrants gain entry by raising a minimum of $500 for the Children's Miracle Network Hospitals. Use the link  for more information about becoming a Charity Race entry participant.

Since 2002, the Credit Union Cherry Blossom 10 Mile and 5K have raised over $5.5 million for the Children's Miracle Network Hospitals under the umbrella of Credit Unions for Kids. A significant part of that sum has been raised by Charity Race entrants. Charity Race entrants are required to raise a minimum of $500 by March 1, but lots of runners in the past have gone above and beyond the minimum; it's not at all unusual for a Charity Entrant to raise thousands of dollars.

The family of races also includes the Credit Union SacTown 10-Mile Run in Sacramento, Calif., and two runs for overseas troops: Camp Arifjan in Kuwait and Wiesbaden Army Garrison in Germany.

Credit Union Miracle Day is a collaboration of 86 credit unions and 59 business partners, including lead partner PSCU.

Global Women's Group Seeks Scholarship Applicants

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MADISON, Wis. (2/20/13)--The World Council of Credit Unions (WOCCU) is seeking eligible women leaders working in developing credit union movements worldwide to apply for a 2013 Global Women's Leadership Network scholarship.

The scholarship provides an annual network membership and access to the 2013 Global Women's Leadership Forum, July 13-14, in conjunction with WOCCU's  2013 World Credit Union Conference in Ottawa, Canada.

Click to view larger image Last year's Global Women's Leadership Network scholarship recipients were panelists at the 2012 Global Women's Leadership Forum in Gdańsk, Poland, in July. They included, from left: Jedidah Nyongesa Musamali, Goezraal Springs Empowerment Foundation (Kenya); Yamata Karki, Prakritinagar Women Independent Group and Nayapati SACCO Ltd. (Nepal); Lara Thomas, The MILLA Project (U.S.); and Gail Rajkumar, TATECO Credit Union Co-op. Society Ltd. (Trinidad). Not pictured is Arou Christine Tanyi, Cameroon Cooperative Credit Union League (Cameroon).
Click to view larger image Global Women's Leadership Network scholarship recipient Lara Thomas (right) poses with fellow network member and Credit Union Executives Society Senior Vice President and Chief Operating Officer Barb Kachelski at the 2012 Global Women's Leadership Network Reception in Gdańsk, Poland. (Photos provided by the World Council of Credit Unions)
"The purpose of the Global Women's Leadership Network is to provide peer network support to women growing into leadership roles in the global credit union community," said Brian Branch, World Council president/CEO. "We saw last year's scholarship winners go on to integrate credit unions into community development, women's outreach and human rights programs in places such as Trinidad, Kenya and Libya."

For Lara Thomas, founder of The MILLA Project and one of five scholarship recipients in 2012, the experience offered professional value for both her and the international human rights organization she established. Thomas collaborated with WOCCU to explore the development of democratic financial institutions in Libya. She also made global connections on a personal level.

Network scholarships cover the cost of the 2013 network membership, the World Credit Union Conference, forum registration fees and partial travel costs. The annual forum includes a networking reception and a full-day peer-advisory session.

Applicants must demonstrate financial need and contributions to their communities, credit unions and/or credit union systems. Preference will be given to recipients from diverse backgrounds who have the most to gain from the experience. Scholarships are funded by network membership dues, WOCCU and the Canadian Co-operative Association, which is financially supporting the program for the third year.

Scholarship applications and references must be sent by March 1. Use the link. Scholarship offers will be made to successful candidates by April 1.

For more information, use the link or contact Nicole Bice at nbice@woccu.org or 1-608-395-2027.

League Study: Most Texans To Use Tax Refund To Pay Debt

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FARMERS BRANCH, Texas (2/20/13)--Roughly 65.6% of Texans surveyed by the Texas Credit Union League plan to use their tax refund to pay off debt, while another 45.9% plan to use the refund to jump start their savings.

About 7.3% of those surveyed plan to make large purchases with the refund, and 4.3% have designated the funds for a vacation, said the league (LoneStar Leaguer Feb. 19).

Consumers who don't already have investment options can make the most of their tax refund by using it to establish an "emergency fund," said Courtney Moran, executive director of the Texas Credit Union Foundation.

"While it's important to save for those short- and long-term financial goals, it's equally important to have a savings account that is used exclusively for those unexpected emergencies," she said. "Keeping these funds separate from a regular checking account will discourage spending."

Moran pointed out that the Internal Revenue Service has made it easier for consumers to save their tax refund for a rainy day by allowing recipients to have the refund deposited in up to three accounts. This provides an option for consumers to earmark their refund for spending and/or saving.

Her advice to consumers:  Save as much of the refund as possible. "If you don't need the money in the near future, consider putting it away for retirement or in an individual retirement account fund. For shorter-term savings, look into a certificate of deposit," she added.

For some consumers, however, paying off debt may be better. "Tax returns are a great way to get rid of high interest credit card debt or a short-term personal loan," Moran said. "Credit cards tend to carry a highest interest rate, so keeping this debt to a minimum is beneficial."

In a national study, by Northbrook, Ill.-based Allstate Financial,  of the 51% of respondents expecting a tax return, 45% said they intended to pay off debt with the refund. (See related News Now story, "CUs Help As Study Says Nation Struggles To Save.")

Fourteen Selected For Indiana Innovators Program

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INDIANAPOLIS (2/19/13)--Fourteen credit union representatives have been selected to participate in ignite, the Indiana Credit Union League's program to develop innovations so credit unions can better the financial lives of members.

"Many of our igniters have gone on to other successes at their credit unions and some have used their experience with ignite to contribute to projects that have a national scope," said League Director Doug True, of Indianapolis-based FORUM CU.

True, Bob Falk of Lafayette-based Purdue FCU, and Nan Morrow of Columbus-based Centra CU are the three members of  ignite's Leadership Team.

"Under the direction of our Leadership Team, the ignite initiative has thrived in Indiana," said league President John McKenzie. "The credit union support has been tremendous, as many have shared very talented and innovative employees."

The group began developing innovations for 2013 at a meeting last month.

So far, ignite has developed 21 innovations. Several have been adopted by credit unions in Indiana and elsewhere. To develop and promote their innovations, members of ignite working groups attend meetings coordinated by the league and make presentations during the League Convention, the annual Hoosier Credit Union Executives Society meeting, and chapter meetings.

New igniters, who will serve two-year terms, are:

  • Amy Benner, Solidarity Community FCU, Kokomo;
  • Amy Wells, Teachers CU, South Bend;
  • Andrea Buescher, Evansville (Ind.) Teachers FCU;
  • Ashli Moore, Eli Lilly FCU, Indianapolis;
  • Bryan Myers, Crane FCU, Odon;
  • Darlene Beers, Purdue FCU;
  • David Dekker, Interra CU, Goshen;
  • Kelly Baran, FORUM CU;
  • Lee Cramer, Finance Center FCU, Indianapolis;
  • Micaela Wise, AAA FCU, South Bend;
  • Staci Goss, Interra CU;
  • Sven Leander, Finance Center FCU;
  • Tony Belton, General CU, Fort Wayne; and
  • Deidra Davis, Notre Dame FCU.
Continuing igniters in the second year of their terms are:

  • Catrina Tate, Teachers CU;
  • Craig Dauksas, Members Choice FCU, Bloomington;
  • Elaine Rinehart, Eli Lilly FCU;
  • Karen Houser, Natco CU, Richmond;
  • Mike Pence, KEMBA CU, Indianapolis; and
  • Raine Lee, Vigo County FCU, Terre Haute.

CU System Briefs (02/19/2013)

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  • BIRMINGHAM, Ala. (2/19/13)--Corporate America CU, based in Birmingham, Ala., upgraded its phone system Friday. Callers now will be greeted by an automated attendant directing them to a specific extension or staff directory, or to hold for a member service representative. Employees' extensions are listed on the Contact Us page of the corporate's website.  Credit unions calling after hours will also get the automated attendant and have the option to reach the branch capture , automated clearinghouse and member services departments …
  • MADISON, Wis. (2/19/13)--CUNA Mutual Group has hired Paul Chong as senior vicepresident of Retirement Plan Services. He will lead the development of the company's Retirement Plan Services business in both the credit union and small business markets, overseeing teams in Madison, Wis., and at CPI Qualified Plan Consultants in Great Bend, Kan. He succeeds Kevin Thompson, who returned to CUNA Mutual's Legal Division  as vice president-associate general counsel. Chong formerly served as executive director, head of institutional consulting and 401(k) at UBS, where he was responsible for UBS Wealth Management's $100-plus billion Institutional Consulting and Corporate Retirement business. He also has served as executive vice president for business development at Prudential Retirement and as president of Corporate Market Groups for CitiStreet. He also was an entrepreneur and owned businesses in Florida …

Online Marketing At FIs Dominates Traditional Channels

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MADISON, Wis. (2/19/13)--The attention of marketers at banks and credit unions is clearly shifting to online and digital channels, according to The Financial Brand, a website for financial services marketers.

Seven in 10 bank and credit union marketers were asked about which media channels would be most important in 2013.  Their answers: online advertising and social media, said The Brand's  2013 State of Bank and Credit Union Marketing study, conducted this year in partnership with Aite Group.  This is the third year the Brand has produced the study.

The gains in online ads and social media come at the expense of print ads, which lost the most ground in the study, said The Brand's report. About half (47.3%) of all financial marketers surveyed said print advertising is less important, an increase of 9.3% over last year's survey. However, nearly one in four (39.9%) said print advertising's importance was about the same as last year. Only 10.6% said print ads are more important.

For online ads, 71.7% of financial marketers surveyed said they were more important, while 19.4% indicated these ads' importance was about the same.  More than seven in ten (70.5%) said social media are more important, while 18.9% indicated social media are about the same.

Less than one-third said TV/radio ads (28.3%) and outdoor/billboard ads (30.7%) were less important. However 45% said the tv/radio ads are about the same and 23% said they were more important than last year. For outdoor/billboard ads, nearly half (48.1%) indicated these ads were about the same in importance, while 16.4% indicated they were more important.

Onboarding (following up a new membership with a contact to deepen the relationship and solidify loyalty) also increased in popularity, with 59.3% deeming this as more important, and 25.4% saying onboarding's importance is about the same as last year.

Other channels that saw increases in importance:

  • Database/matrix marketing (MCIF), 48.9%;
  • Public relations/community events, 44.2%;
  • Data analytics/ big data, 43.9%;
  • Guerilla/word-of-mouth campaigns, 40.3%;
  • Direct mail, 36.9%;
  • Customer Relationship Management system, 31.1%;
  • In-branch video merchandising, 28.4%;
  • Incentives/giveaways, 27.5%; and
  • Sales collateral and brochures, 16.9%.
For the full report, use the link.

AVCU Testifies On State Cybersecurity, Lemon Law Bills

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MONTPELIER, Vt. (2/19/13)--The Association of Vermont Credit Unions last week testified on two bills that could have potential impacts for state credit unions. The bills relate to cybersecurity and lemon laws.

On Wednesday, Joe Bergeron, AVCU president, testified before the 11-member House Commerce Committee on cybersecurity draft legislation put forth by the state Attorney General's office (Newslines Express Feb. 15). 

Bergeron also testified on a proposed lemon law for dealer-purchased used vehicles.

The cybersecurity legislation would require all Vermont entities in possession of confidential consumer information to have safeguards similar to those imposed on credit unions by federal and state financial regulators, including consumer notification of data breaches;

The proposal would also include a requirement to notify the Attorney General, or the Department of Financial Regulation in the case of state chartered institutions, of data breaches within their own organizations.

Credit unions would be exempt from the first provision, provided they comply with similar National Credit Union Administration mandates stemming from National Credit Union Share Insurance Fund coverage. 

Credit unions already are required to notify their state or federal regulator, dependent on charter, of security breaches of their organization, but the draft legislation would require federal charters to also notify the Vermont Attorney General.

In his testimony, Bergeron explained the regulatory oversight and practices followed by credit unions and the greater potential complexity of a financial institution breach compared with a typical merchant breach. Credit unions typically report data breaches to the financial regulator who conducts the information technology audit, he said.

The lemon-law legislation, H.165, would create a 30-day/2,000-mile warranty on used-vehicle purchases of $4,000 or more and a consumer's right of cancellation of sale or lease under certain circumstances. The law does not obligate dealers to provide a warranty, but does require documentation between the buyer and seller if none is provided. 

AVCU surveyed Vermont credit unions about the potential impact on their lending practices. Bergeron reported the results in testimony.

League, CUs In Dialogue With Manufactured Housing Forum

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PORTLAND, Maine (2/19/13)--The Maine Credit Union League helped coordinate credit union input--as it relates to credit union lending--in a forum hosted Wednesday by representatives from Maine's Manufactured Housing Industry in Scarborough, Maine.

"[The event was] a good opportunity to get differ­ent perspectives about the manufactured housing industry and local lenders," said Quincy Hentzel, league director of governmental affairs. "Manufactured housing is an important part of Maine's housing market, and we had a good discussion about some of the regulatory challenges facing credit unions and other lenders when it comes to lending for manufactured homes."

A representative from the office of U.S. Sen. Angus King (I-Maine) attended and expressed interest in what could be done to help ease regulatory burdens. John Gallagher, the new director of the Maine State Housing Authority, indicated at the meeting he wants to find ways to continue support of the manufactured housing option.

Richard Bradstreet, who owns a manufactured housing dealership in Winslow, Maine, and is a board member at Win­slow Community FCU, participated. He has worked with the league to help facilitate a positive dialogue--especially between credit unions and the manufactured housing industry.

"We want to provide financing to consum­ers purchasing a manufactured home, but it is particularly challenging when the home is on leased land," said Luke Labbe, president/CEO of People­sChoice CU, Saco, who attended the event.

Hentzel said the event was beneficial, and further discussions are planned.

Clarification On Probe Of Pittsburgh Police Funds

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PITTSBURGH, Pa. (2/19/13)--An investigation into misappropriation of funds at the Pittsburgh Police Department does not involve Greater Pittsburgh Police CU, according to Karen Janoski, CEO of the credit union.

Janoski contacted News Now seeking clarification of News Now's story Tuesday, which had said that the Federal Bureau of Investigation and the Internal Revenue Service had confiscated financial records of police department accounts at the credit union.

The investigation is against the police department--not the credit union, which was simply caught up in a widening search for evidence because it is the financial institution of certain accountholders.

"The credit union received a subpoena, and we carried our compliance with the subpoena, just as any credit union does in any investigation," she told News Now.  The authorities "did not come into the credit union and remove boxes of records or confiscate anything."

Maine CUs Raise $471K-plus For Ending Hunger

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PORTLAND, Maine (2/19/13)--Maine credit unions raised a record $471,744.19 to help feed the state's hungry, the Maine Credit Union League announced Thursday.

Maine credit unions raised a record $471,744.19 for their Campaign for Ending Hunger Celebration. Pictured at a luncheon celebrating announcement are, from left, John Murphy, Maine Credit Union League president; musician Jonathan Edwards; and Luke Labbe, chair of the Maine Credit Union League's Social Responsibility Committee and CEO of PeoplesChoice CU, Saco, Maine. (Photo provided by the Maine Credit Union League)
The amount is an increase of nearly $25,000 over last year's record donations for Maine Credit Unions' Campaign for Ending Hunger.

"The generosity of the nearly 627,000 credit union members in Maine is extraordinary," explained John Murphy,  league president. "This marks the 17th consecutive year that the campaign has raised a record-setting total. To raise nearly a half a million dollars this past year is especially remarkable in such a challenging economy."

The funds will help food pantries and hunger organizations to purchase nearly $7 million worth of food to help Maine's hungry, the league said.

A luncheon announcing the record total included a performance by Maine musician Jonathan Edwards, who provided songs to CDs sold to raise funds for the campaign. 

The top-three credit unions for total funds raised included:

  • Maine State CU, Augusta;
  • NorState FCU, Madawaska; and
  • Maine Savings FCU, Hampden.
The top three-credit unions with highest per-member contributions were:

  • Gardiner FCU, Kennebec;
  • NorState FCU; and
  • Saco (Maine) Valley CU.

Service CU Already Providing EMV Smart Cards

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PORTSMOUTH, N.H. (2/19/13)--Service CU in Portsmouth, N.H., is providing Visa-branded Europay, MasterCard and Visa (EMV) smart cards to U.S. military members stationed in Germany. Meanwhile, the U.S. still is moving toward adoption of the EMV chip-card standard.

Service CU has 17 branches near military bases in Germany and 23 U.S. branches. Some overseas members have had difficulty overseas using magnetic stripe cards--the prevailing technology in the U.S. (PaymentsSource Feb. 14). The EMV cards have better security and fraud-prevention standards than magnetic stripe cards.

The $2.15 billion asset Service CU is using CardWizard software, an instant card-issuing program, to issue its EMV cards. The software interfaces with a credit union's core banking application, network processors and data-prep systems, which allow card development and personalization to be built into Service CU's existing card-issuing environment, said PaymentsSource.

The new cards issued by Service CU work at all Visa-accepting retailers and are magnetic stripe and EMV compliant. In Germany, EMV cards will be the primary ones issued, while U.S-based members will have a choice.

In line with card network-imposed deadlines and other technology shifts, it is anticipated that the U.S. migration to EMV will take a few more years, said PaymentsSource.

In the meantime, issuers such as United Nations FCU in Long Island City, N.Y., will offer EMV cards for travelers, the publication said.

ATM Group Asks MasterCard To Delay EMV Shift, Align With Visa

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JACKSONVILLE, Fla. (2/19/13)--The National ATM CounciI Inc. (NAC) has sent a letter to MasterCard requesting a delay in implementing EMV chip card liability shifts for Maestro international cards used at ATMs in the U.S. 

NAC is a trade association representing U.S. Independent ATM providers--including credit unions--and their suppliers.

"With little more than two months until MasterCard's April 19 liability shift for Maestro cards, there is still no universally applicable AID [Application Identifier] for EMV [Europay, MasterCard and Visa]  in the U.S.," said Bruce Renard, NAC executive director. "And, even if one were available today that would meet federal laws on financial network routing, there is no financially or operationally realistic way the entire U.S. ATM embedded base can be expected to be made EMV compliant in the timeframe involved."

The letter was co-signed by NAC and 36 member organizations, including ATM deployers, processors and manufacturers, many of whom attended the Jan. 29 NAC-sponsored EMV ATM Summit Meeting in Dallas.

The letter requests that the Maestro card liability shift in the U.S. be delayed until:

  • Formulation of a universally accepted AID consistent with financial transaction network routing requirements established under the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act.
  • Adequate time is provided for the ATM industry to test and deploy the AID, and all related hardware and software upgrades and change outs necessary to render the embedded U.S. ATM base of more than 425,000 terminals EMV compliant.
In September 2011, MasterCard announced that a liability shift for all counterfeit ATM transactions performed on the Maestro network would be implemented on April 19, 2013. More recently, on Sept. 10, 2012, MasterCard announced that it would implement its liability shift hierarchy on Oct. 1, 2016. That has created confusion in the marketplace as to the status of the earlier announced liability shift for MasterCard's international Maestro cards used at U.S. ATMs, said NAC.  

NAC has asked MasterCard to clarify that the Maestro card liability shift was intended to be included in the overall Oct. 1, 2016, EMV-related liability-shift plan. NAC also has requested that MasterCard consider aligning its liability shift plan for Maestro and all other domestic debit cards with Visa's recently announced Oct. 1, 2017 deadline. That would provide a uniform and more realistic implementation timetable for all ATMs in the U.S. to be made EMV compliant, NAC said.

"In addition to developing a universal AID, the industry needs reasonable time for certification, deployment, testing and trouble shooting of hardware and software for all of the different ATM makes and models that comprise the approximately 425,000 ATMs currently deployed in the U.S, and we are hopeful that MasterCard will acknowledge these realities and reconcile its timetable accordingly," Renard said.

Rep Braley, Coach Highlight Iowa Leg/Reg Conference

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DES MOINES, Iowa (2/15/13)--The Iowa Credit Union League 's annual Legislative and Regulatory Issues Conference will take place Tuesday and Wednesday in Des Moines, with more than 100 Iowa credit union representatives expected to attend.

Those attending will learn more about the legislative and regulatory issues affecting the credit union industry.

U.S. Rep. Bruce Braley (D-Iowa) will speak to attendees on Tuesday at 4 p.m. about issues taking place in Washington, D.C.  Keynoter Paul Rhoads, head football coach at Iowa State University, will present at 1 p.m. Tuesday on Building Pride in Your Team and Organization.

Other speaker highlights include:

  • Bill Hampel, Credit Union National Association  chief economist, who will discuss the economic outlook for 2013;
  • Ed Wallace, deputy director of Workforce Development; and
  • Amy Hudson, director of Business Development for CoOportunity Health.

CU System Briefs (02/15/2013)

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  • PAMPA, Texas (2/15/13)--A former employee of Pampa (Texas) Teachers FCU was indicted Wednesday by a Lubbock federal grand jury on charges of falsifying entries at the $11.7 million asset credit union (amarillo.com Feb. 13). Erin Dawn Trevathan is charged with fraud related to federal credit union entries. Trevathan  allegedly funded loans to credit union members,  taking money from other members' accounts and purportedly falsifying credit union records to swindle the credit union, according  to the indictment. The thefts covered a two-year period between 2008 and 2010 …
  • TULSA, Okla. (2/15/13)--A Texas man was sentenced Tuesday to one year and one day in prison by a Tulsa, Okla., federal court for identity theft related to vehicle-loan fraud (Tulsa World Feb. 13).  In addition to the prison time, U.S. District Judge Claire Eagan ordered Don Eugene Osby Jr., 38, to pay more than $100,000 in restitution and to be placed under court supervision for five years after his release from prison. Osby was accused of providing a false Social Security number to obtain approval for six vehicle loans from $616 million asset Tulsa (Okla.) FCU and $1.2 billion asset Tulsa Teachers FCU in 2010 and 2011 ...
  • JACKSON, Mich. (2/15/13)--Sentencing has been delayed for Renee Mainstone, a former branch manager at Jackson, Mich.-based EECU, on charges related to the embezzlement of more than $194,445 from the credit union. Mainstone, 45, of Battle Creek, was to be sentenced Wednesday but the hearing was delayed for one week (mlive.com Feb. 13). In a plea bargain, Mainstone pleaded guilty in December to a charge of taking $50,000-$100,000 and agreed to pay full restitution to the credit union.  She faces up to 15 years in prison and a large fine …
  • HARRISBURG, Pa. (2/15/13)--Carl William "Bill"Anderson, a longtime manager of the former Federal Employees CU in Warren, Pa., died Monday in Warren, according to the Pennsylvania Credit Union Association (Life is a Highway Feb. 14). He was 85. Anderson was employed with the Warren Post Office as an accountant, window clerk and floor worker. He retired as manager of the credit union after 37 years.  Services will be Saturday at Trinity Memorial Episcopal Church. He is survived by his wife, four children, two sisters, nine grandchildren and three great-grandchildren (The Times Observer Feb. 13) …

'Financially Fit Day' Set For April 3

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MADISON (2/15/13)--The National Credit Union Foundation (NCUF) is inviting credit union organizations to hold a "Financially Fit Day" on April 3 to kick off National Financial Literacy Month. The fundraising day is part of the campaign "Credit Unions Support Financial Education: Leading the Way to Financial Freedom."

Credit unions can hold fundraising days with members or staff on April 3 or throughout April, NCUF said. Donations will be split between NCUF and the state credit union foundation.

Fundraising ideas are included in a toolkit on the campaign website. It also includes other campaign resources such as optional pledge forms, sample newsletter articles, sign-up sheets, stickers, a flyer, a statement stuffer, wall pin-up templates, a YouTube video and Web buttons. Use the link.

Credit unions are also encouraged to leverage the campaign as part of a broader appeal to staff and members around financial education, said NCUF.

Donations will be split between NCUF and the credit union's state credit union foundation. Funds will support NCUF financial education programs such as Biz Kid$ and REAL Solutions and state credit union foundation financial education programs.

April is also National Credit Union Month. National Credit Union Youth Week, sponsored by the Credit Union National Association, will be April 21-27. This year's theme, "Savings Sleuth: Solve the Mystery," will draw in youth (and adults) with the fun of mystery and mustaches. CUNA offers a "Collect the Clues" kit of clue posters and activity sheets credit unions can pair up with prizes. Use the link.

CUNA also sponsors the National Youth Saving Challenge the entire month of April. The challenge rewards 10 savers each with $100 cash prizes.

Eight States Seek To Join Lawsuit Challenging Key Provisions Of Dodd-Frank

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WASHINGTON (2/15/13)--Eight states filed a motion asking a federal district court to allow them to join a lawsuit that challenges the constitutionality of the Dodd-Frank Wall Street Reform Act, particularly the formation of the Consumer Financial Protection Bureau  (CFPB) and Financial Stability Oversight Council (FSOC) and the establishment of their Orderly Liquidation Authority, which allows the government to liquidate the largest banks if they failed.

The addition will bring the total of states involved in the lawsuit to 11.  If the court approves the motion, joining the original states--Michigan, Oklahoma and South Carolina--will be: Alabama, Georgia, Kansas, Montana, Nebraska, Ohio, Texas and West Virginia.  Also suing are three private entities: the State National Bank of Big Spring, Texas; the 60 Plus Association Inc., a seniors advocacy group in Alexandria, Va.; and the Competitive Enterprise Institute, a public interest organization in Washington, D.C.

The states are challenging only the government's liquidation authority part of the lawsuit.

The proposed amended complaint for declaratory and injunctive relief, which was filed Wednesday in the U.S. District Court for the District of Columbia,  claims the formation of CFPB, the appointment of CFPB Director Richard Cordray, and the formation of the FSOC violate the U.S. Constitution, specifically its provisions for separation of power. 

"Title X of the Dodd-Frank Act delegates effectively unbounded power to the CFPB, and couples that power with provisions insulating the CFPB against meaningful checks by the Legislative, Executive and Judicial Branches," the complaint said.

The FSOC, it added, violates the separation of powers with "sweeping and unprecedented discretion to choose which nonbank financial companies to designate as 'systemically important' (or, 'too big to fail'). That designation signals that the selected companies have the implicit backing of the federal government--and, accordingly, an unfair advantage over competitors in attracting scarce, fungible investment capital."

The act's provision "empowers the Treasury Secretary to order the liquidation of a financial company with little or no advance warning, under cover of mandatory secrecy, and without either useful statutory guidance or meaningful legislative, executive or judicial oversight."

The suit claims the liquidation authority also violates the Fifth Amendment's due process clause and a requirement that bankruptcy laws throughout the U.S. be "uniform."

The states maintain that they have pension funds with investments in institutions that would qualify as falling under the liquidation authority.

The suit names as defendants a number of federal agencies, including the National Credit Union Administration.

NCUA: CUs Can Educate During America Saves, Military Saves Week

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ALEXANDRIA, Va. (2/15/13)--Credit unions can educate members and their families about the importance of saving during this year's annual America Saves and Military Saves Week, Feb. 25-March 2, said National Credit Union Administration (NCUA) Chairman Debbie Matz Thursday.

"Having a savings account is the first step towards financial stability, but a recent study indicated a little more than 29% of America's households do not have a savings account," Matz said.

"People need to learn more about how to save and have a place to save," she said. "This year's campaign is a perfect opportunity for credit unions to educate and empower their members and their families so they can balance their budgets, buy a home, or put money aside for their children's educations."

America Saves Week and Military Saves Week are national campaigns that unite government, nonprofit and corporate groups to encourage individuals and families to save and build personal wealth. American Saves Week is coordinated by America Saves and the American Savings Education Council. Military Saves is part of the Defense Department's Financial Readiness Campaign and has been a partner with the department since 2003.

Both programs, which encourage saving, debt reduction and wealth building, are managed by the Consumer Federation of America. Credit unions can partner with local campaigns to offer motivational workshops and obtain posters, brochures and other resources, said NCUA.

During last year's America Saves Week, the 2012 Annual National Survey Assessing Household Savings revealed that a savings plan with specific goals can have beneficial financial effects, even for lower-income families, said the Pennsylvania Credit Union Association (Life is a Highway Feb. 5).

That survey found:

  • 66% of Americans spend less than their income and save the difference;
  • 66% have enough emergency savings to pay for unexpected expenses such as car repairs or a doctor's visit;
  • 42% have a savings plan with specific goals; and
  • 52% of non-retired Americans think they are saving enough for a retirement with a desirable standard of living.
For additional information, use the resource links.

Expert: CUs Should Take Holistic Approach To Online Fraud

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FARMERS BRANCH, Texas (2/15/13)--Credit unions should take a holistic approach to preventing online fraud, an information technology (IT) expert advised the Texas Credit Union League.

That strategy should include training, a robust patch management program, testing and security devices on network perimeters, said Idrees Rafiq, assistant vice president of IT Consulting for Financial & Technology Resources, who was interviewed by the league for the Feb. 14 edition of its LoneStar Leaguer newsletter.

Fraud will increase in 2013, in tandem with the continued surge in consumer online transactions, said Rafiq. Fraud is evolving at the same rate as technology, he said.

A holistic approach to fraud prevention includes:

  • Training--Train members, employees, volunteers, and even custodians one topics such as online and e-mail safety, social engineering and the credit union's overall information security policy and program. A breach will most likely target the weakest link in the training, Rafiq said.
  • Patch Management--The program should patch critical vulnerabilities in operating systems (Windows), firmware (routers) and software (Adobe Flash).
  • Security Devices--An antivirus is not sufficient and often will not detect more complex viruses, Rafiq said. Firewalls and intrusion prevention systems that can detect anomalies in traffic are more effective. The National Credit Union Administration requires credit unions to implement encryption technologies for member information both in storage and in transit, he said.
  • Testing--The credit union can best identify vulnerabilities by reviewing and testing security procedures. A third-party review of the processes can help a credit union increase its overall security posture, he added.

Mergers Announced By CUs Across the Country

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MADISON, Wis. (2/15/13)--Several credit unions nationwide have recently announced mergers or intentions to merge.

They include:

  • Houston-based El Paso Corp. FCU (EPCFCU), with $121 million in assets, announced plans to merge into First Service CU in Houston, with $331 million in assets, First Service said in a press release Wednesday. The merger is tentatively scheduled to be completed this spring, pending regulatory approval and a passing vote by EPCFCU members. The combined organizations will continue as First Service CU and will have roughly $450 million in assets.
  • The boards of Mendo Lake CU (MLCU) in Ukiah, Calif., with $123.4 million in assets, and Fort Bragg (Calif.) Community FCU (FBCFCU), with $30.6 million in assets, have signed a memorandum of understanding for FBCFCU to merge into MLCU, pending a vote by FBCFCU members (lakeconews.com Feb. 8). MLCU will be the continuing credit union.
  • The $209 million asset National 1st CU in Santa Clara, Calif., requested approval last month from the California Department of Financial Institutions (DFI) to merge with San Jose (Calif.) CU, with $141 million in assets, according to the DFI's January Monthly Bulletin.
  • Milestone CU in Birmingham, Ala., with $20.2 million in assets, has merged into Tuscaloosa, Ala.-based Alabama CU, with $517 million in assets, effective Feb. 1 (The Birmingham News Feb. 10).
  • The $39.1 million asset Premier Source CU in East Longmeadow, Mass., has applied for permission to acquire Wemelco in Springfield, Mass., with $31 million in assets, according to the Massachusetts Division of Banks January Activity Report.
  • Preferred FCU in Greenville, Mich., with $51 million in assets, is proposing a merger with $88 million asset Grand Valley Co-op CU in Grand Rapids, Mich., according to Preferred FCU's website. The continuing entity would be Preferred CU. The merger is contingent upon membership and regulatory approval.

CUMIS: HELOC Wire Transfers 'Red Flag' For Fraud

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HIGHTSTOWN, N.J. (2/15/13)--Fraud targeted at credit unions--including wire/home equity line of credit (HELOC) fraud, online banking fraud and data breaches--continues to increase, according to CUMIS Insurance Society Inc., the property and casualty company of CUNA Mutual Group.

Credit unions at the New Jersey Credit Union League headquarters, shown here, and at two remote areas discuss--via videoconferencing--emerging areas of fraud with Carlos Molina, risk management consultant at CUMIS Insurance Society Inc.  (Photo provided by the New Jersey Credit Union League)
Any wires funded by HELOCS should be a big red flag, said Carlos Molina, risk management consultant in Credit Union Protection's Risk Management Division at CUMIS. Molina spoke before a group of New Jersey credit unions Tuesday at a special roundtable on emerging fraud issues. The meeting was held at the New Jersey Credit Union League's headquarters in Hightstown, with some participants at two remote locations (The Daily Exchange Feb. 14).

Credit unions, as member-focused service providers, are considered easier prey because they often sacrifice security to provide service, he told the group.

Most credit unions' wire policies usually contain step-by-step instructions on how to perform the wire transfer but don't include verification procedures.  Molina suggested increasing standard verifications since it is easier to access personal information online. The standard name, account number and last four digits of a Social Security number are not enough to positively identify a member over the phone, he said.  Credit unions should take extra caution with fax requests and call backs.  It is too easy for fraudsters to forward phones and fool financial institutions further, he added.

Molina also cautioned credit unions about the type of transactions members can perform using audio response functions.

In reviewing online banking fraud, he cited examples of scams, including phishing, man-in-the-browser attacks and more, and offered recommendations for minimizing the risk.  In discussing data breaches, Molina said a breach can result in more than loss of data; it can also damage the credit union's reputation, and cause financial, compliance and legal risks.  He advocated having more business controls in place and training staff and members on personal safety.

Monday Holiday: CUNA Open, No News Now

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WASHINGTON and MADISON, Wis. (2/15/13)--Monday is a federal holiday (Presidents' Day) and many financial institutions will be closed. However, the Washington, D.C. and Madison, Wis., offices of the Credit Union National Association will be open. 

CUNA's News Now will not publish a Monday edition. News Now will resume regular publication on Tuesday.

CUAnswers Awards Innovator Grants

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GRAND RAPIDS, Mich. (2/14/13)--CU*Answers, a Grand Rapids, Mich.-based credit union service organization, awarded grant funds for the second round of its Innovator Investment and Grant Program to three credit unions.

Funds were award to:

  • Jenny Bickel, Frankenmuth (Mich.) CU,  Frankenmuth, Mich., $5,000 for "Field of Dreams";
  • Renee Maeder, Best Advantage CU in Brillion, Wis., $5,500 for "Flix in the Sticks"; and
  • Annie Lepper, Superior Choice CU in Superior, Wis., $5,000 for its "Great Debt Pay Down."
For the 2012 program, the company received 10 entries, which were narrowed to four finalists. Each finalist gave a presentation at CU Answers' CEO Roundtable in November.

At its January meeting, the CU*Answers Board reviewed ballots submitted by audience members, and after deliberation voted to award the grant monies.

The four credit unions who presented at this year's event will receive a new Microsoft Surface tablet for participating. CU*Answers will announce the 2013 Innovator Investment & Grant Program in the next few months.

CU System Briefs (02/14/2013)

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  • LIVE OAK, Texas (2/14/12)--In a version of Pay It Forward, Live Oak, Texas-based Randolph-Brooks FCU distributed gift cards as "Random Acts of Payment" to shoppers at the Steiner Ranch (Austin) Randalls location.  The credit union then asked the shoppers if they would consider using part of their gift card to donate food items for the Capital Area Food Bank. Shoppers responded with generosity, giving enough food to provide 1,300 meals for the food bank and Austin area residents. The concept was inspired by an opportunity to encourage goodwill among local residents and empower them to serve others, said RBFCU Business Development Director Mark Matthews. "Our goal was to thank our local community by giving them the chance to serve others," he said. "We gave local residents both the means and the opportunity to give back, and it was inspiring to see so many willing to share the gifts they received." (Photo provided by Randolph-Brooks FCU) …
  • MIAMI LAKES, Fla. (2/14/12)--Miami Lakes, Fla.-based JetStream FCU, whose membership is 75% low-income and distressed members, is using a $92,500 grant it received to fund a new bilingual position for its Community Development Financial Institutions (CDFI) Community Outreach program. The grant, from the Emerging CDFI Fund, was obtained with the grantwriting help of Tacoma, Wash.-based CU Strategic Planning. Vanessa Ortega, who is bilingual and will assist Spanish-speaking members, is the $152 million asset credit union's new Community Outreach Program manager. Ortega's immediate goals include creating a low-income advisory panel, signing up new community partners, and better connecting with current and prospective members. The award also funded a business lending feasibility study for the credit union to enter the business lending field in Puerto Rico, where it has a branch, as part of its efforts to build an official CDFI program, said the credit union …
  • TACOMA, Wash. (2/14/12)--Richard Brandsma, president/CEO of the $1.067 billion asset Sound CU, based in Tacoma, Wash., will be recognized as theBusiness Leader of the Year by the University of Washington Tacoma Milgard School of Businesson April 30. The announcement was made by Sound CU Board Chairman Dave Wasson. Brandsma has been president/CEO of Sound (formerly Tacoma Telco FCU) since 1981. At that time the credit union had one branch, 26 employees and $18.9 million in assets. Since then, Sound CU has grown to 21 branches, 230 employees and more than $1 billion in assets. Brandsma led the credit union through the transition from federal to state charter and through 14 mergers, including a recent merger with Watermark, the largest credit union merger in the state. "Rick Brandsma is one of the most admired leaders in the Northwest credit union community," said Troy Stang, president/CEO of the Northwest Credit Union Association. "His footprints are on so many positive developments in the financial services industry that have benefited consumers," Stang added …

SECU Foundation Announces First Of Four Innovation Grants

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McKinley Wooten, board chair at State Employees' CU in Raleigh, N.C., announced the SECU Foundation Prize for Innovation Grant at the Emerging Issues Forum at North Carolina State University in Raleigh. (Photo provided by the State Employees CU Foundation)

Click to view larger image
RALEIGH, N.C. (2/14/13)--State Employees' CU Foundation Tuesday announced the first of four planned $200,000 annual grants in support of the newly named SECU Emerging Issues Prize for Innovation through the Institute for Emerging Issues (IEI) at North Carolina State University.

The 2014 Prize for Innovation competition will help college-level students collaborate and respond to challenges facing their communities and state, in the areas of education, health, natural and built environments, and the economy. SECU Foundation's gift will allow IEI to expand on its Prize for Innovation competition, offering $50,000 in prizes to winning college teams in each issue area.

"The Prize for Innovation has been one of the most effective and engaging programs we've managed at IEI," said Anita Brown-Graham, IEI director. "With the support of SECU Foundation, we'll now be able to engage even more young people. This means more ideas, more innovation and more opportunities for a new generation to lead the way to a brighter future for our state. "

McKinley Wooten, SECU Board of Directors chairman, presented the grant at the Emerging Issues Forum on behalf of SECU members, who fund the foundation.

IEI developed the Emerging Issues Prize for Innovation in 2010. The prize engages and energizes North Carolina's young people about the role they can play in policy and economic development, and highlights the collaborative spirit, talent and initiative it takes to put ideas into action, SECU said.

Ark, Okla, Texas Leagues Agree To Consolidate, Set Meetings To Vote

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FARMERS BRANCH, Texas (2/14/13)--Three leagues--the Arkansas Credit Union League, the Credit Union Association of Oklahoma and the Texas Credit Union League--have signed an agreement to consolidate into one regional league, the Cornerstone Credit Union League.

The three leagues announced their intent to pursue consolidation on Dec. 17, and signed the agreement to consolidate on Jan. 3. Members of each league will vote on the proposal at their separate annual meetings in April and May.

"The signing of this agreement comes after years of extensive and productive dialogue," said Michael Kloiber, CEO of Tinker FCU and chairman of the Regionalization Task Force. "The strength of our movement is our ability to collaborate, and this consolidation illustrates the commitment of all three leagues to remain relevant and innovative for our member credit unions," he added.

"An online voter guide that affiliated credit unions of all three leagues can access has been established," explained Kloiber. The member-only microsite contains helpful resources such as frequently asked questions and a sample ballot, he told News Now.

Each state is conducting meetings to inform credit unions about consolidation and the upcoming vote. "These meetings are already under way," he said.

The Arkansas league held its meetings in Little Rock, Hot Springs, Camden, Fort Smith and Pine Bluff. Its last meeting was in Pine Bluff on Tuesday, according to its website. 

Texas league members will vote at its member meeting April 2-5 in Austin. Its annual business meeting is set for April 3.  Arkansas credit unions will vote on the measure on April 11, just prior to its Annual Meeting in Hot Springs. CUAOk members will vote at its annual conference May 13-15 in Norman, Okla.

At the time the intent to consolidate was announced, the leagues said consolidation would allow credit unions in each state to enjoy the services and strengths of a new, larger league, which will maintain an advocacy-focused office in each state's capital to continue a local presence.  All three leagues have worked closely over the years (News Now Dec. 17).

Forbes Features CU's Advice From NerdWallet Article

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NEW YORK (2/14/13)--A credit union's advice to small businesses in NerdWallet this week was singled out in Forbes.com's coverage Wednesday about how small businesses can succeed in obtaining loans.

Patsy Van Ouwerkerk, president/CEO of Travis CU, Vacaville, Calif., was one of 10 credit union CEOs interviewed by NerdWallet for its series. News Now reported on the series in Wednesday's issue.

"Many new business owners might have a great vision, but aren't able to put their ideas down on paper yet," Ouwerkerk said of loan applications in both the original article and Forbes' summary of credit scores, cash flow and collateral as ways to shore up a business loan application.

"[Small Business Development Centers] provide business owners with free classes and provide them with technical assistance with things like putting together a business plan, legal information, financial statements and projects, and anything related to accessing capital," she added.

"At the end of the day, a loan officer at any financial institution cannot spend hours a day helping borrowers put together basic documents. SBDCs can help business owners with their loan package such that when they sit down with the loan officer, they'll be in better shape," Ouwerkerk concluded.

Keeping the ability to make small business loans and help the economy is a key priority for credit unions and the Credit Union National Association. They are urging Congress to pass legislation that would raise credit unions' member business lending cap to 27.5% of assets from 12.25%. Doing so would generate $13 billion for business loans and help create 140,000 jobs, said CUNA.

For both the Forbes and NerdWallet articles, use the links.

Iowa League: State's Savings Rates Boil Down To Competition

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DES MOINES (2/14/13)--Competition among Iowa financial institutions is creating some of the best rates for certificates of deposit and savings accounts, the Iowa Credit Union League told The Des Moines Register Wednesday.

It boils down to competition because consumers reap benefits when a state such as Iowa has an abundance of credit unions and locally owned banks--instead of just a few huge banks, Pat Jury, league president/CEO, told the newspaper.   

"The more choices consumers have, the more responsive financial institutions have to be in the marketplace," Jury told the paper.

River Community CU, based in Ottumwa, Iowa, with $17 million in assets, offers the state's best one-year CD rates, the paper said. The credit union's website lists it at 0.75%.The average rate for Iowa credit unions and banks is 0.54% on a one-year CD--eight basis points better than the national average, the Register said.

GoBankingRates.com says Iowa ranks 13th nationally in interest rates for six-month and one-year certificates, and ninth for savings.

To read the article, use the link.

#iHeartMYCU: aSmarterChoice Says Share the Love

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WASHINGTON (2/14/13)-- aSmarterChoice.org, the consumer website designed to bring people together with the benefits of credit union membership, wants to share a little love for Valentine's Day.  For all the "tweethearts" out there, the site asks: What says 'I love my credit union' better than a tweet? How about 1,000 tweets--or more--saying the same thing!

"Initiating a conversation through Twitter with credit union members about what they love about their credit unions is a terrific way to display the loyalty of credit union members," said Jill Stevenson, Credit Union National Association consumer website coordinator for aSmarterChoice.org. "And Valentine's Day is just the day for sharing the love."  aSmarterChoice.org is sponsored by CUNA and the state credit union leagues.

Credit unions on Twitter can get the ball rolling today by reaching out to their members and asking for a  "love tweet"--a short personal message about how they enjoy the credit union difference.

"All credit unions have to do is let their members using Twitter know that Valentine's Day is the perfect day to tweet what they love about their credit union--and to be sure to include the hashtag #iHeartMYCU," Stevenson said, encouraging credit unions to show a little self-love by creating this great buzz for the movement.  The #iHeartMYCU idea originated with Patrick Harris, director of Media & Public Relations at the Ohio Credit Union League.

The twitter handle for aSmarterChoice.org is @aSmarterChoice.

Florida's Grow Financial Expands Into S Carolina

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TAMPA, Fla. (2/14/13)--Tampa, Fla.-based Grow Financial FCU has announced plans to expand into South Carolina. The $1.8 billion credit union will open three branches in Columbia, S.C., in the next two years.

Grow Financial said it will open two branches this year and one in 2014. One office will serve as a home base for Vice President of Operations in South Carolina Chase Clelland and Dealer Relationship Representative John Paul (Business Wire Feb. 12).

The Columbia branches will feature an alternative design to traditional financial-institution lobby designs, with interactive technology and contemporary colors.

Grow Financial will provide member business services in addition to personal financial services at the Columbia branches, said Jason Moss, senior vice president of delivery channels.

The credit union plans to establish 15 branches in South Carolina, eventually expanding to the Greenville and Charleston markets. Currently, it has 19 branches in Florida, with two others in development. It will also open branches in Lakeland, Fla., and Wesley Chapel, Fla.,                                                                                                                                                                                                                                                                                         later this year.

LA Chamber Board Member First To Represent CUs

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MANHATTAN BEACH, Calif. (2/14/13)--Kinecta FCU Board Chairman Darryl F. Johnson has been elected to the Los Angeles Area Chamber of Commerce Board, serving as its first credit union representative.

Governed by a 140-member Board of Directors, the L.A. Area Chamber works to shape the region through strategic initiatives and advocacy on key issues facing Southern California.

"Given his extensive experience in L.A. area business, including his current board chair position at Kinecta FCU, coupled with his strong commitment to serve the community, he is an ideal addition," said L.A. Area Chamber President/CEO Gary Toebben.

Kinecta is a $3.17 billion asset credit union based in Manhattan Beach.

Johnson said he "can contribute to enhancing the region economically and culturally.  My ties are strong to Los Angeles and its businesses, schools and communities. Having the opportunity to give back in this way is an honor."

He is a retired aerospace executive and a retired colonel in the Army Reserves. Before retiring, he held leadership positions at Raytheon Systems Co. (formerly Hughes Aircraft Co.), including director of group administration and executive in charge of enterprise services.

He is active in a number of community organizations, including the University of California at Los Angeles, where he was former chair of the Chancellor's Cabinet, former chair of the UCLA Fund, board member of the UCLA Foundation, member of the UCLA Board of Governors, and more. He also served as president of the Hughes Black Professional Forum, vice president of the board of directors for the Girl Scouts of America, Long Beach, and board member of the African-American Unity Center of the Brotherhood Crusade of Los Angeles.

Identity Theft In Real Life: Not a Laughing Matter

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MADISON, Wis. (2/14/13)--The hit movie "Identity Theft" makes light of the topic, but identity theft is no laughing matter for the 11.6 million adults who were identity fraud victims in 2011, according to Javelin Strategy & Research, a financial services consultancy (lifeinctoday.com Feb. 10).

The top consumer complaint for the past 12 years has been identity theft, said the Federal Trade Commission. It received 279,156 identity theft complaints in 2011, compared with 86,250 complains in 2001.

Identity theft is the fastest growing nonviolent crime in the U.S., according to Purdue University's Center for Education and Research in Information Assurance and Security. An identity is stolen every 60 seconds, which translates to 1,440 identities stolen per day, said the center.

Scottsdale, Aris.-based identity fraud management firm Identity Theft 911 puts the number much higher. In the two hours it takes to watch the Jason Bateman/Melissa McCarthy movie, roughly 2,000 Americans will be hit with identity fraud, it said (LoneStar Leaguer Feb. 13).

Identity theft is also popular at tax-filing time. Since January, the Internal Revenue Service (IRS)  has identified hundreds of fraudulent tax returns with stolen identities. In fiscal year 2012, IRS's enforcement actions totaled 2,400 against 1,310 suspects. In fiscal year 2013--after just four months--actions totaled 1,703, against 907 suspects (wzzm13.com Feb. 13).

Consumers should check their credit reports for inaccuracies and initiate a fraud alert on their credit report to make it harder for a thief to open accounts in their name, says the Texas Credit Union League (LoneStar Leaguer Feb. 13).   It warned not to give out information such as Social Security numbers and checking account information to unknown organizations or businesses. It also suggested that consumers:

  • Use a different personal identification number (PIN) or password for each account and change them frequently;
  • Be aware of phishing tactics where an e-mail poses as a financial institution or store to trick the recipient into providing personal data. Instead of clicking links in the e-mail, contact the business by phone or in person;
  • Install firewalls and anti-spyware on computers to prevent viruses or downloads that steal information;
  • Avoid storing Social Security cards, bank account numbers, passwords or PINs  in their wallet;
  • Shred papers with account numbers and other details on them; and
  • Opt out of junk mail and credit offers so they are not delivered to an unsecured mailbox.

CU's Student Branch Wins Progress Minnesota Award

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ST. PAUL, Minn. (2/13/13)--Hometown CU has been recognized with Finance and Commerce's Progress Minnesota award for opening the state's first student-run, in-school credit union branch.

HomeTown CU hosted a grand opening event for its in-school branch office in January 2012. The credit union received the Finance & Commerce Progress Minnesota award for opening the state's first student-run, in-school credit union branch. (Photo provided by the Minnesota Credit Union Network)
The Progress Minnesota program recognizes individuals, entrepreneurs, businesses and organizations driving economic growth and development in innovative ways. Of this year's 27 honorees, the Owatonna, Minn. credit union is the only financial institution to make the list.

HomeTown CU opened the student-run branch in the fall of 2011 after working for five years with teachers, the school board and school administrators of Owatonna High School.

"We really pushed the financial literacy component when we proposed this idea (for the student credit union branch)," said Marian Murphy, vice president of business growth at the credit union. "Financial education is not a requirement in Minnesota schools, but just having a student credit union branch can help spark students' interest in financial education."

The primary objective of the branch is to promote financial literacy, Murphy said. Seven students work in the branch. The office acts as a resource for the high school's business and marketing classes, and extracurricular business clubs. The credit union included students in focus groups and product development and marketing campaigns.

HomeTown's long-term goal is to have students develop and implement their own business plan for the branch.

CU System Briefs (02/13/2013)

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  • ENTERPRISE, Kan. (2/13/13)--Pamela Emig, 48, of Solomon, Kan., was sentenced Monday to three years in prison for embezzling $817,000 from Enterprise (Kan.) CU, where she was manager. Enterprise was released from conservatorship on Oct. 12, and is now open for business. Emig also was ordered to pay $817,000 in restitution. She pleaded guilty to one count of embezzlement. From 2005 to 2011 she allegedly kited checks between accounts at the credit union to cover up the embezzlements (Salina Journal Feb. 12) …
  • POCATELLO, Idaho (2/13/13)--Virginia Mecham, 40, of Idaho Falls, pleaded guilty Friday in a federal court in Pocatello, Idaho, to embezzling $23,000 from accounts at Idaho Falls Westmark CU, where she was a teller. The theft was discovered after members contacted the credit union to report unauthorized withdrawals from their accounts, all of which were handled by Mecham. She agreed to pay restitution of $23,625, and faces up to 30 years in prison, a maximum fine of $1 million and up to three years of supervised release. Sentencing has been set for April 30 (Idaho State Journal Feb. 12) …
  • SPOKANE, Wash. (2/13/13)--Spokane Teachers CU (STCU) announced it plans to "reclaim an architectural treasure" by opening a branch in the historic Hutton Building this year. The branch will be located on the building's main floor, and the building will house STCU's commercial lending staff. The seven-story building, valued at $3.5 million, was added to the National Register of Historic Places in 1983 (The Spokesman Review Feb. 8). It was built by Levi and May Hutton who became millionaires when the Hercules Mine struck silver in 1901. They lived in the building's penthouse and hosted lavish parties. The building later was the site of Hutton Settlement, providing a home for children in need of long-term care. The previous owner, Selkirk Trading, filed for Chapter 11 bankruptcy last year. STCU has held the loan for the past 10 years …
  • BIRMINGHAM, Ala., and TALLAHASSEE, Tenn. (2/13/13)--LEVERAGE, the League of Southeastern Credit Unions Service Corp., has hired Kevin Lytle as its new vice president, innovation and business development. He has more than 22 years' experience in marketing, business development, product management and sales within the credit union industry. He will oversee LEVERAGE's product development, marketing and sales team. Lytle previously was vice president, marketing and product management at WesCorp FCU for seven years. There his duties included all marketing strategies, developing new products to reduce operating costs for credit unions and public relations. He was with the Credit Union National Association for 14 years, first with CUNA Service Corp. then as vice president of national marketing at CUNA. He began his duties Monday and is working out of the Tallahassee office …

News Report Features West Massachusetts CUs' Growth

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HADLEY, Mass. (2/13/13)--The growth of several credit unions in Western Massachusetts was featured Monday in a state news report.

The article mentioned UMassFive College FCU in Hadley, Freedom CU in Springfield, Holyoke (Mass.) CU, and Polish National CU, Chicopee (masslive.com Feb. 11).

Credit unions in the state had good growth last year in membership, deposits and loans based on data available through the third quarter 2012, Rob Kimmett, senior vice president of public relations and marketing for the Massachusetts Credit Union League, told the publication.

With more than $30.7 billion in assets, credit union assets were up 4.4% from third quarter 2011, Kimmett said. Loans rose 5% in that period to more than $20.5 billion, while membership in credit unions statewide increased 2.2% to more than 2.5 million members--37% of Massachusetts' population, Kimmett added.

To read the article, use the link.

State Of Bank/CU Marketing: Budgets , ROIs Top Challenges

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MADISON, Wis. (2/13/13)--Insufficient budgets and/or manpower and difficulty in measuring performance for a return on investments (ROI) are the two major challenges in 2013 facing credit union and bank marketers, reports a new survey. Top priorities for marketing staff is loan growth and deepening relationships or improving share of wallet.

The Financial Brand, a website that covers retail banking marketing topics, conducted the survey with 300 banks and credit unions. Half the survey respondents were credit unions of all sizes.

Of those surveyed,  33.8% cited budget challenges and 29.9% cited ROI challenges. It was the second year that budget was seen as a major challenge by at least one-third of the respondents, said the website.

Inadequate marketing customer information files (MCIF)/customer relationship management (CRM) was the third largest challenge. "Clearly, the financial industry is in no position to capitalize on the promise of "big data" this year," said The Financial Brand's report. "Banks and credit unions have a long way to go before they'll be in any position to wield terabyte-sized data sets."

For 2013, about 41.89% of financial marketers surveyed said their marketing budget would stay about the same as 2012, with 20.2% saying their budget would increase by up to 10% and another 11.1% indicating it would decrease by less than 10%.

The group was surveyed about marketing priorities for the year. About 36.7% of the respondents cited loan growth as the top priority while nearly 60% placed loan growth in the top three priorities. Second top priority was cross-sell, deepen relationships, improve share-of-wallet, or increase persons per household (about 65.1% ranked this priority in the top three).  Customer/member acquisition rated third, with 32.8% ranking it among their top three priorities.

Although financial marketers ranked loan growth as their top priority, loans weren't the most important product or service they would promote. Instead, mobile banking solutions took the top most important products/services spot, with 63.3% saying it was important. Auto loans, with 58.5%, and mortgage loans, with 57.6%, were the second and third most important products/services to promote.

Newtek, 10 CU CEOs Give Small Biz Advice On Nerdwallet

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MADISON, Wis. (2/13/13)--Chief executive officers from 10 credit unions and CUNA Strategic Services provider Newtek: The Small Business Authority are among those helping with advice for small businesses in a new NerdWallet.com series on business lending.

The series features interviews with 31 CEOs that do business with small businesses or offer business loans. The Credit Union National Association and the state leagues provided NerdWallet with credit union contacts for the articles.

Member business lending (MBL) is one of CUNA's top advocacy issues this year, with CUNA, the state leagues, and credit unions urging Congress to raise credit unions' 12.25%-of-assets MBL cap to 27.5% so credit unions can work with more small businesses.

In the lending predictions article, credit unions addressed the MBL cap. The cap "limits our ability to grow further in this area…Otherwise, there will continue to be less competition in the small business lending space, which might lead to higher rates and fees," said Christina Lethlean, president/CEO of Gesa CU, Richland, Wash.

CoastHills FCU, in Lompoc, Calif., will hit its MBL cap in 18-24 months, said Jeff York, CEO. "This is unfortunate considering the local pull-back of community banks and big banks in the small business lending arena." He noted that "Congress is unwilling to do what they promised on the campaign trail--provide small businesses with the tools they need to prosper. Increasing or removing the business lending cap will do just that--give small business access to billions of dollars in capital, help small businesses create tens of thousands of jobs and all this without costing taxpayers a dime."

Jim Minge, president/CEO of Texas Trust CU, Mansfield, Texas, said the lending cap increase "would make an additional $13 billion available for lending to small businesses. This investment would certainly result in new jobs and economic growth."

Other credit union and Newtek executives interviewed included:

  • Mark Antonioli, Meriwest CU, San Jose, Calif.;
  • Brad Canfield, KeyPoint CU, Santa Clara,Calif.;
  • Gary Grinnell, Corning (N.Y.)  FCU;
  • Brett Martinez, Redwood CU, Santa Rosa, Calif.:
  • Stephen O'Connell, North Island CU, San Diego, Calif.;
  • Barry Sloane, Newtek Business Services, New York, N.Y.;
  • Steven Stapp, San Francisco (Calif.) FCU; and
  • Patsy Van Ouwerkerk, Travis CU, Vacaville, Calif.
The series includes four "sidebar" articles featuring CEOs answers about: Financing Advice (a roadmap of where to go, when, what to consider), Loan Advice (how business owners can make themselves better loan candidates), General Business Advice, and Lending Predictions.

To view the articles, use the links.

Two US Lawmakers Express Support Of CU Tax Exemption At Idaho GAC

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BOISE, Idaho (2/13/13)--Two U.S. lawmakers--one of them the ranking Republican member of the Senate Banking Committee--expressed support of credit unions' tax exemption  last week during the Idaho Credit Union League's Governmental Affairs Conference.

Eighty-seven Idaho credit union professionals and volunteers gathered in Boise to meet with their state legislators about credit union issues and to learn more about the legislative process.

U.S. Sen. Mike Crapo (R-Idaho) and U.S. Rep. Mike Simpson (R-2) said they support maintaining the tax exemption for credit unions, Will Hall, Idaho league compliance and governmental affairs specialist, told News Now.

Crapo, the ranking Republican member of the Senate Banking Committee, urged credit unions to watch Congress regarding upcoming legislation and to be an active participant in the process. Simpson said Congress needs to make sure that all tax exemptions make sense for the 21st century and those that do should remain--that list should include the credit union tax exemption, Hall added.    

Defending the credit union tax exemption is the Credit Union National Association's No. 1 priority this year, CUNA President/CEO Bill Cheney has said. Several credit union leagues such as those in Ohio and Oregon are monitoring tax reform proposals in their states.

The day-long event also included call-in visits with U.S. Sen. Jim Risch (R-Idaho), and U.S Rep. Raul Labrador's (R-1) Chief of Staff Jason Bohrer.

All the federal delegates at the league GAC said that bringing down the federal budget deficit is of primary importance, Hall said.

Risch and Bohrer said reducing the federal budget deficit should be the primary focus for everyone. Bohrer added that everything is on the table to get a handle on the federal budget deficit and to get it down, Hall reported. 

Visits from state legislators, including Sen. Brent Hill (R-34), President Pro Tem, Rexburg; Sen. Elliot Werk (D-17), Boise; and Rep. John Rusche (D-6), Lewiston, gave credit union attendees a look at current issues in the state legislature this session from both sides of the aisle. Rusche also drew attention to the decline of household income and its long-term negative impact on the state. The state legislators did not discuss national credit union issues, Hall told News Now.

Political commentator Dr. Jim Weatherby gave an overview of the 2013 legislative session, and Republican Party Chairman Joshua Whitworth spoke on attracting new members to the party and staying relevant.

A visit from long-time friend of credit unions, Gov. C.L. "Butch" Otter, was the highlight of the event as he talked of his personal relationship with credit unions in Idaho and their community of interest. News Now covered his comments Feb. 12.

"I've always appreciated that credit unions have a local focus, and they're attuned to the needs of their members," Otter said. "It's my goal to advocate for Idaho citizens in the same way. That's why it's so important for Idaho to have a voice in designing and implementing a state-based health insurance exchange" (News Now Feb. 12).

Gavin Gee, director of the Idaho Department of Finance, told attendees that Idaho credit unions are among the nation's healthiest in terms of asset growth and new members.

CU Better Choice Saves Consumers $23M-plus

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HARRISBURG, Pa. (2/13/13)--Since launching in 2006, nearly 65,000 Credit Union Better Choice loans have been issued to Pennsylvania credit union members for short-term cash needs, saving borrowers more than $23 million over using a traditional payday lending product, said the Pennsylvania Credit Union Association.

The continued growth in the program, the credit union alternative to payday loans, indicates that consumers still are in need of small-dollar loans, PCUA said.

The 72 participating credit unions statewide have issued 64,930 loans totaling more than $32 million since the program's inception.

In the Credit Union Better Choice loan, in which credit unions offer borrowers a 90-day loan with a $500 limit. The loans have been used for Christmas gifts, taxes, car repairs, heating fuel and funeral expenses. The program was developed through a collaboration of PCUA, the Pennsylvania Treasury Department, and the Pennsylvania Department of Banking and Securities.

Roughly 206 locations offer the loans statewide. From July 1 to Dec. 31, 2012, about 6,044 loans totaling $3.9 million were issued. Borrowers also placed more than $385,000 into savings accounts during the period.

A typical $500 payday loan costs consumers $15 for every $100 borrowed for two weeks, or roughly $450 over 90 days. A $500 Credit Union Better Choice loan costs $42.50 for the same 90 days and at the end of the loan term, consumers have $50 in a savings account to save. Also, the program provides financial education to consumers to help them make better informed financial decisions.

Pennsylvania consumers saved an average of 80 cents in loan fees and costs for every dollar borrowed.

Filene Report: Members' Happiness, Money Skills Related

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MADISON, Wis. (2/13/13)--Credit union members with strong financial skills are more likely to be happy and experience less stress, according to a new report from the Filene Research Institute. This presents an opportunity for credit unions, which can improve members' financial capability and, by extension, their overall well-being.

The report, Mind over Money: Measuring Health and Happiness among Credit Union Members, explores the interrelationships between financial capability and psychological well-being through analysis of 1,600 U.S. credit union respondents to an online survey.

The report also describes the importance of self-efficacy and individuals' belief in the ability to take care of their finances. Such belief engenders the confidence required to effectively control personal finances.

Findings in the report include:

  • Gender splits are real. The data suggest that female members generally believe less in their own abilities than males and that they also are more stressed and unhappier than males. When it comes to managing money, the data also suggest that women are not as good as men at keeping track of their finances. Credit unions should consider segmented outreach and tools for women.
  • Middle-aged and younger adults need more help. Adult members aged 44 years or under have significantly lower financial capability and psychological well-being than those aged 45 years or older, including those in, or nearing, retirement. Retirees, on the other hand, are the most capable group of the sample.
  • Using multiple institutions is linked to higher capability. Those who reported using another institution in addition to their credit union were more likely to report better overall financial and psychological health, affirming a long-standing tradition of credit unions referring members for products and services they don't offer.
To download the report, use the link.

NJ Law Bans Card Solicitations On Public Campuses

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TRENTON, N.J. (2/13/13)--New Jersey Gov. Chris Christie Thursday signed a law banning credit card companies from soliciting students on public college campuses in the state.

The legislation was sponsored by State Sen. Kevin O'Toole (R-40). It forbids a New Jersey public institution of higher education from entering into an agreement, or permitting its agents or a student organization from entering into any agreement, for direct merchandising of credit cards in person or by displays to students (polotichernj.com Feb. 7).

The New Jersey Credit Union League said it did not take a position on the bill. The law is designed to prohibit New Jersey public colleges and universities, and their sanctioned organizations from entering into agreements with credit card issuers that allow an issuer to solicit students via direct mail, exhibits and take-one stands, Chris Abeel, league director of government affairs, told News Now.

"In short, the public institution cannot profit from or assist in a credit card issuer's solicitation of its students," Abeel added. "The bill sponsors noted that in 2010, Penn State [University] made $4.2 million from such agreements."

The law affects credit unions the same way it would banks or other credit card issuers. None will be able to enter into credit card solicitation arrangements with New Jersey public colleges and universities, Abeel explained.   

The law does not prevent a college or university credit union, such as Rutgers FCU, from offering credit cards to its members, even those who are currently students, Abeel said.  

"The credit union is an instrumentality of either the state or federal government, not a college or university organization or agent," he explained. "There was no testimony--nor was it the sponsors' intention--to prevent student access to responsible financial service providers such as credit unions."

Ill Governor Signs League-backed Fast-track Foreclosure Act

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NAPERVILLE, Ill. (2/13/13)--Illinois Gov. Pat Quinn Friday signed into law the Illinois Credit Union League-backed Senate Bill 16, a measure that establishes a "fast track" expedited foreclosure process to help address the issue of abandoned residential properties in the state.

Click to view larger image Surrounded by representatives of the Illinois Credit Union League, state lawmakers, housing advocates, county officials and other community stakeholders, Illinois Gov. Pat Quinn Friday signed into law a league-backed landmark "fast-track" expedited foreclosure process to address the issue of abandoned residential properties in Illinois. The league played a key role in advancing the legislation. (Photo provided by the Illinois Credit Union League)
The league, after two years of negotiations, played a key role in advancing the measure. SB 16 cleared both chambers during the second week of the "veto" session of the Illinois General Assembly (IGA). It passed the House on Dec. 4 by 87 to 17 and the Senate on Dec. 5, 47-0.

"Throughout the two-year process, the excellent reputation and respect credit unions have earned with legislators were very apparent," said Stephen R. Olson, ICUL executive vice president and general counsel. "The active participation and support of Illinois credit unions played a key part in helping to pass this critical measure," he added.

"This law will help restore neighborhoods and property values while fighting crime and blight by decreasing the time a home sits empty and getting it back on the market quickly," Quinn said when he signed what is now Public Act 97-1164.. "It also allows us to make major investments to keep families in their homes by preventing foreclosures in the first place."

The new law:

  • Establishes a "fast-track" expedited foreclosure process. The league worked with sponsors to fine-tune the mortgage foreclosure process to make it more efficient and expedient and to avoid provisions that penalize lenders, and ultimately borrowers, through increased fines and penalties. Lenders can shorten the process for abandoned properties by about 18 months, obtaining the title to the properties and assuming responsibility to maintain and secure the properties more quickly. That means the properties are in better condition and more saleable when the lender obtains the title.
  • Provides funding for remediation of abandoned property and pre-foreclosure counseling. The law includes an additional residential foreclosure filing fee to support local governments and struggling homeowners. Institutions that filed 175 or more foreclosures during the preceding calendar year will pay $500, those filing 50-174 foreclosures will pay $250, and those filing fewer than 50 foreclosures will pay $50.  Most credit unions and community banks will pay $50, said the league. The fees will generate about $41 million a year, with $28 million earmarked for abandoned property cleanup and the remainder for housing counseling for homeowners.
  • Provides for bankruptcy relief. SB16's language clarifies that a portion of the Conveyances Act is permissive, not mandatory, so it cannot be used to affect the validity or priority of a properly recorded mortgage by a trustee in bankruptcy. "This provides a tremendous benefit to every Illinois credit unions by protecting against the avoidance of mortgage liens in bankruptcy proceedings," said the league.
During discussions of the foreclosure problem various measures in the Illinois General Assembly the past two years, lawmakers widely acknowledged that credit unions were not the cause of the housing crisis and said SB 16 represents a fairly balanced compromise that will not only benefit credit unions but citizens of the state.

Pa launches 2013 iBelong campaign this week

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With three new 30-second spots, and three new 15-second video spots, the 2013 iBelong campaign is running in six of Pennsylvania's seven media markets this week (Photo provided by the Pennsylvania Credit Union Association)
HARRISBURG, Pa. (2/12/13)--The 2013 iBelong campaign is running in six of Pennsylvania's seven media markets this week, with three new 30-second spots, and three new 15-second video spots created to emphasize lending, said the Pennsylvania Credit Union Association.

The iBelong campaign is a cooperative campaign designed to build awareness of credit unions and to assist consumers in finding a credit union that's right for them. The campaign originated with support from credit unions affiliated with PCUA. It also is supported by credit unions in Kentucky, Illinois, Indiana, Mississippi and Vermont.

To view the six spots, which feature testimonials from people and businesses that went to credit unions for their lending needs, use the link. Credit unions can see the media schedule for their market and obtain graphics on the iBelong page of the association's website (Life is a Highway Feb. 11).

The association board also authorized up to $250,000 to use with voluntary contributions from credit unions in existing media markets throughout Pennsylvania. Participating credit unions are highlighted in the search results of iBelong.org.

Belvoir ready for federal budget cuts

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WOODBRIDGE, Va. (2/12/13)--Belvoir FCU is preparing for the possibility of $1.2 trillion in automatic U.S. government spending reductions by offering emergency loan products and services for its members.

Congress is working to avoid the massive spending cutbacks, also known as sequestration, set to take effect March 1.

"We truly hope a sequestration is averted and Congress comes to an agreement," said Patricia Kimmel, president/CEO of the Woodbridge, Va., credit union. "However, if a concession is not attained, Belvoir Federal stands ready to serve our members by providing financial options and supportive services during this strenuous time."

In the event of a sequestration, $298 million asset Belvoir FCU will offer an emergency loan with a 0% annual percentage rate for the first 60 days. The credit union also will facilitate loan workouts and skip-a-pay options to help members avoid defaults on existing loans.

Belvoir FCU also will provide financial coaching to members in need of guidance.

CU System brief (02/12/2013)

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  • EAST LANSING, Mich. (2/12/13)--John Burnell, former chairman and director of Farmington Heights, Mich.-based Community Choice CU has died, according to the Michigan Credit Union League (Michigan Monitor Feb. 11). He served Community Choice for more than 30 years. In 1976, he began as a volunteer on the board at Redford Township CU, one of Community Choice's founding credit unions. He served as chairman of Community Choice's board from 2001 through 2004 and again from 2006 to 2007. Burnell was the first inductee into the Community Choice Volunteer Wall of Fame.  Visitation will be Friday from 2 p.m. to 4 p.m. at the Charles R. Step Funeral Home in Redford. A memorial service will be at Covenant Baptist Church, West Bloomfield on Saturday at 11 a.m. …

New England getting back to normal after blizzard

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BOSTON and MERIDEN, Conn.  (2/12/13)--New England's credit unions were still digging out Monday from three feet of snow this weekend dropped by Winter Storm  Nemo, but services were up and running ahead of schedule in the Boston area. Connecticut credit unions likely will be open today.

No New England credit unions reported any closings to the Massachusetts Credit Union League, New Hampshire Credit Union League or the Association of Rhode Island Credit Unions as of Monday afternoon, said Rob Kimmett, league senior vice president, public relations and marketing at the Massachusetts league.

"A lot of people were doing hand-to-hand combat with the storm this weekend," Kimmett told News Now. "It does not seem to have affected credit unions, however."

Boston's Logan Airport received 24.9 inches of snow, but by Monday Boston's subway and bus systems were working and residents had dug their cars out from snowdrifts (USA Today Feb. 11). The newspaper said electric power was restored in most areas, commuter trains and Amtrak were running, and airports were open.

In Connecticut, it was another matter. Hamden, Conn., got 40 inches of snow, the most recorded, said the National Weather Service.  

The Credit Union League of Connecticut was closed Monday but expected to be open today and said it expected most credit unions will be open as well.

"The governor declared a state of emergency Saturday through Monday, ordering nonessential personnel to stay home," said Tony Emerson, president/CEO of the league. "A good number of credit unions were closed or had delayed openings [Monday]," he said.

"We had to work out of the office today," said Emerson told News Now Monday night.  "Meriden, where our offices are located, got about 37 inches of snow. The parking lot was not yet plowed as of this morning."

Connecticut had about two to three hours of freezing rain first thing Monday morning. "The highways were a mess, with the rain exacerbating everything," he said.  One credit union told him its driveway was cleared but staff couldn't get into the building because the snow plow had pushed the snow against the front door. "There's no where to put the snow," he said.

Nebraska legislature passes CU-supported ATM disclosure bill

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OMAHA, Neb. (2/12/13)--The Nebraska State Legislature, in a 47-0 vote Monday, passed a bill to eliminate the requirement for a physical disclosure on ATMs notifying consumers of fees they may incur while using the ATM. The bill was supported by Nebraska's credit unions.

"Credit unions appreciate and support sound regulations that protect consumers and promote fair play in the marketplace," said Nebraska Credit Union League Director of Governmental Affairs Brandon Luetkenhaus during testimony at a Jan. 22 public hearing on the measure before the state Banking, Commerce and Insurance Committee.

"However, sometimes well-intended regulation can be unnecessary and burdensome, and we believe that's the case with these physical disclosures," he said.

Luetkenhaus cited that LB 100 would eliminate the physical disclosure but keep in place the requirement for an electronic notification.

LB 100 was introduced on Jan. 10 by state Sen. Dan Watermeier (NP-District 1).  It follows legislation passed unanimously by Congress late in 2012 that eliminated the physical disclosure on ATMs. That measure was backed by the Credit Union National Association.

Nebraska, Illinois, Nevada, New York, Vermont and Wyoming were the only states with statutues requiring the dual disclosures.  Nebraska is the first to amend its statute to conform with the fedearl law.

Congress' ATM bill, H.R. 4367, was the result of a CUNA/league-sponsored Hike the Hill event. CUNA, leagues and credit unions had noted that outside notices on ATMs were sometimes being intentionally removed or destroyed without the financial institution's knowledge. Perpetrators would then photograph the vandalized ATM and allege the financial institution was not in compliance with Regulation E.

Nebraska's LB 100 included an emergency clause that would cause the bill to go into effect immediately upon receiving the signature of Gov. Dave Heineman.

Texas league backs bill to double CUs' board size

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AUSTIN, Texas (2/12/13)--The Texas Credit Union League is backing a provision in a Texas Credit Union Department omnibus bill that seeks to provide state-chartered credit unions with an increase in the size of their boards.

Senate Bill 244 has several housekeeping measures to update the Credit Union Act, said TCUL in one its legislative updates (The Advocate Update Feb. 8).

"The Texas Credit Union League is seeking an increase in the number of advisory directors that can serve on a state-chartered credit union's board," Jim Phelps, TCUL vice president of advocacy, told News Now. "Current law limits Texas credit unions to appointing three honorary or advisory directors; TCUL is seeking to increase this limit to six honorary or advisory directors.

"Making this change would allow credit unions the opportunity to identify and engage new directors who wish to serve in a board governance role, and, facilitate the transition of long-term directors who may no longer wish to serve as an active member of the board, but whose institutional knowledge will continue to benefit the credit unions and its members," he added.   

The Credit Union Department of the Credit Union Commission has regulatory authority over state-chartered credit unions.

S.B. 244 allows credit unions to provide financial services in an efficient manner and ensure sound practices among state-regulated institutions, said a state analysis of the bill. The bill clarifies supervisory and regulatory matters, removes outdated references, enhances corporate governance, and provides rules for the disclosure of information.

S.B. 244 also provides guidance for compliance with federal and foreign credit unions, clarifies the process by which a state-chartered credit union converts to a federal credit union, and gives state-chartered credit unions limited parity with federal credit unions on interest rates for certain losses.

TCUL said it expects a Senate committee vote on the bill later this week. The bill has not been introduced in the state House yet.

CU Social Good site has 500 doing-good stories

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BISMARCK, N.D. (2/12/13)--The Credit Union Association of the Dakotas announced its CU Social Good website has just passed the 500 mark--with 500 stories about the great things that credit unions do each day accumulated and archived in one place for all to see. 

The stories are all about credit unions' charitable contributions, volunteer work, fundraising activities, financial literacy efforts and scholarships--among others.

CUAD announced the official launch of the new website last month.

Credit unions give back to their local communities in creative and generous ways, and credit union employees and members are well known for their volunteer work and charitable fundraising events, said CUAD. CUAD encouraged credit unions nationwide to contribute their stories.

Another site credit unions are being encouraged to visit is aSmarterChoice.org, established in 2011 by the Credit Union National Association. aSmarterChoice.org is a website designed for consumers and media to learn more about credit unions and to help consumers find a credit union they are eligible to join. The website provides a comprehensive credit union locater that includes every credit union in the nation, and helps consumers find credit unions to join by answering a few simple questions about where they live, work or worship.

More than 20,200 total visits were made to the site in January. To visit aSmarterChoice.org, use the link.

To view both sites, use the links.

MCUL provides input on state's 'blight' measure

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LANSING, Mich. (2/12/13)--Sponsors of state legislation that reintroduces proposed fines and other sanctions for blight violations issued by qualified municipalities are working with the Michigan Credit Union League & Affiliates and other groups to modify the bill.

The modifications to Senate Bill 35-39 would be based on recognition that the legislation is designed to target "bad actors" and that financial institutions largely are not the cause of damage to neglected properties, said the league (Michigan Monitor Feb. 11).

"Michigan has gone through extremely tough times over the past several years, and issues related to blight must be addressed in comprehensive fashion," said MCUL CEO David Adams (Michigan Monitor Feb. 11). "This includes a necessary recognition that financial institutions need to be partners in this effort, and not just deeper pockets to target for fines."

The legislation "must also include a larger discussion about abandoned property, the length of the foreclosure process and resulting property damage, criminal activity and enforcement capacity for protecting vacated homes," he added.

The state Senate Judiciary Committee on Feb. 5 took testimony on S.B. 35-39., whose key sponsor is Sen. Virgil Smith (D-Detroit).  Gov. Rick Snyder had called for action on the legislation in his State of the State address, said the league. 

The legislation may become part of an umbrella initiative on blight, which includes stronger regulation of the scrap metal industry to prevent the stripping of metal from residential property, procedures to identify abandoned property and expedite its foreclosure, and possible reforms to the foreclosure process, said the league.

"We applaud Sen. Smith and his colleagues for their recognition of the broader issues involved, and the positive role that credit unions can and do play in this process," Adams said.

Idaho league supports governor on insurance exchange

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BOISE, Idaho (2/12/13)--The Idaho Credit Union League Thursday offered its support for Gov. C. L. "Butch" Otter's position to form a state-based health insurance exchange.

"Credit unions believe that a state-based health exchange will be best for employers, and for their employees, resulting in more efficient administration, operation and lower costs," said Alan Cameron, league president.

The league advised Otter of its support at its annual Governmental Affairs Conference, held Thursday in Boise, where Otter spoke to participants about his long association with credit unions.

"I've always appreciated that credit unions have a local focus, and they're attuned to the needs of their members," Otter said. "It's my goal to advocate for Idaho citizens in the same way. That's why it's so important for Idaho to have a voice in designing and implementing a state-based health insurance exchange."

Under the Affordable Healthcare Act, states can choose to operate as a state-based exchange, or the U.S. Department of Health and Human Services will establish and operate a federally facilitated exchange for the state.

In a federally-facilitated exchange, the state may pursue a state partnership exchange, in which it administers and operates exchange activities associated with plan management and/or consumer assistance. States that elect to participate in a state partnership exchange will administer these functions in both the individual and the small-group market.

WVa CUs continue to thrive, league tells media

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CHARLESTON, W.Va. (2/12/13)--Consumers have lost trust in the financial services industry, but West Virginians continue to show faith in their credit unions, according to the Charleston, W.Va. Sunday Gazette-Mail, the state's largest daily newspaper.

Members show that trust by increasing their deposits, year after year. Credit unions are in very good shape, despite two difficult years in the financial industry, and have seen record growth, said Ken Watts, president of the West Virginia Credit Union League, in the article.

Credit union assets in the state grew 7%-8% to $3.1 billion, and the league expects the state's 100 credit unions will have about $3.2 billion in assets by year-end, Watts told the publication.

As of June 30, West Virginia's credit unions had 388,492 members, who are "safe and confident [in credit unions] and continue to bring in more money," Watts added.

Credit unions face a number of regulations, he said, adding they are paying for problems they weren't responsible for and are affected by a "broad-brush approach" in regulations. 

The article also noted that banks are phasing out products such as free checking accounts, and credit unions have found a way to compete. It cited Charleston-based Pioneer WV CU's two free checking and savings accounts that offer rewards to members who meet monthly qualifications. Kasava Cash is a free checking account with high interest--up to 3%--for members who sign up for electronic statements and use their debit cards a minimum number of times each month.

To read the full article, use the link.

Reality Fair during GAC to showcase youth fin ed

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MADISON, Wis. (2/12/13)--The National Credit Union Foundation will conduct a Financial Reality Fair in conjunction with the Credit Union National Association's Governmental Affairs Conference in Washington, D.C., for a third consecutive year.

Volunteer and National Credit Union Foundation Deputy Executive Director Tom Candell counsels a teen on her budget after she visited all the booths at last year's Reality Fair during the Credit Union National Association's Governmental Affairs Conference. (Photo provided by the National Credit Union Foundation)

A Reality Fair is an interactive financial literacy tool for high school students.

"Conducting a Reality Fair at GAC is a great way to expose legislators and their staff about the unique and impactful financial education programs that are offered by credit unions," said Lois Kitsch, NCUF national REAL Solutions program director. "Not only are area high school students benefiting from the experience as well, but we welcome GAC attendees to the fair to see the benefits of holding a reality fair in their community."

The fair will be at the Rayburn House Office Building on Feb. 27, from noon to 2:00 p.m., with students attending from area schools--Capital City Public Charter School, Luke Charles Moore Academy, and Washington Metropolitan High School. GAC attendees can visit anytime to observe the fair.  

Last year, NCUF held a Reality Fair on Capitol Hill for Roosevelt Senior High School students. Afterwards, students indicated that almost 90% will start to budget their money every month, and 100% of students said it changed the way they will save and spend money.

The GAC event is sponsored by NCUF with support and expertise from:

  • The Credit Union League of Connecticut;
  • Maryland and D.C. Credit Union Association;
  • Congressional FCU, Washington, D.C.;
  • HEW FCU, Alexandria. Va.; and
  • GPO FCU, New Hartford, N.Y.
In the Reality Fair concept, students experience financial challenges similar to what they will face when they start life on their own. Students identify their career choice and starting salaries then complete a budget sheet requiring them to live within their monthly salary while paying for basics such as housing, utilities, transportation, clothing and food. Expenditures such as entertainment and travel are factored in as well.

Throughout the fair, students experience many temptations for additional spending and learn to balance their wants and needs to live on their own. After the students have visited the booths, students balance their budget, and then sit down with a "financial counselor" for review.

LAFCU switches to state charter, tweaks name

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LANSING, Mich. (2/11/13)--Lansing Automakers FCU will switch to a state charter and change its name as it makes plans to expand its service area.

The Lansing, Mich.-based credit union has received approval from the National Credit Union Administration for the change (Lansing State Journal Feb. 8). It has also received approval from the state regulator.

The credit union will also change its name to Lansing Automakers Financial CU, but will market itself by the acronym LAFCU, the credit union's CEO, Robin Frucci told News Now.

LAFCU will expand its service into several additional Michigan counties. There are no plans to open new branches in those counties.

The credit union pursued the charter change because of federal limits on how far geographically it could expand its service, the Journal said.

"We have had a strong indirect lending program since the 1970s," Frucci told News Now. "In the past we have had to turn down applications because they were out of our service area. We will probably gain new members through indirect lending as we look into other plans for expanding service."

LAFCU has about 50,000 members and roughly $530 million in assets.

CU System briefs (02/11/2013)

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  • CONYERS, Ga. (2/11/13)--Three men, two of whom were specialists with the Georgia Army National Guard at the time, were sentenced to more than 30 years each in prison for the Dec. 23, 2010, robbery of Atlanta-based Georgia's Own CU's branch in Conyers. Sean Jamarko Foster of Stone Mountain was sentenced to 30 years, with the first 10 served in confinement. Menshack Jah Nyepah of Decatur received a 50 year sentence and will serve 25 years. Jamelle Lloyd Francis, Grayson, was sentenced to 40 years and ordered to serve 18. They were charged with armed robbery, aggravated assault and false imprisonment.  The incident occurred at about 12:30 p.m. when the credit union was full of members. The robbers pointed guns at members, including one child, and forced them to get face down on the floor. Foster, who allegedly was the getaway driver, was late picking up the other two after the robbery. A couple driving in the area noticed two men wearing black masks and carrying a trash bag get into the car. The couple called police and followed the car until police arrived. Francis later allegedly entered a home and called 911 to report his car had been hijacked. The three pleaded guilty (Rockdale Citizen Feb. 6) …
  • JACKSONVILLE, Ark. (2/11/13)--Arkansas FCU employees and members raised $70,560 for Arkansas Children's Hospital and combined it with a $10,000 matching donation from CO-OP Network. When the credit union presented a check this month, it brought its total of funds donated to the hospital since 1998 to more than $680,000. Arkansas Federal's contributions over the past four years alone helped fund the ENT Clinic Waiting Room. The year's fundraising events included the Seventh Annual Arkansas Federal Golf Classic; Painting with a Purpose, a sponsored painting class with a fundraising twist; candy and cardstock sales; and several Bunko Bash events, featuring games and a silent auction. Arkansas Children's Hospital is the only pediatric medical center in Arkansas and one of the largest in the U.S., serving children from birth to age 21. CO-OP, the nation's largest credit union-owned electronic funds transfer network and processor, has a Miracle Match program, which encourages credit unions across the U.S. to raise funds for their local Children's Miracle Network (CMN) hospitals, like the one in Arkansas. CMN Hospitals is a national organization dedicated to helping raise awareness and funds for its 70 member hospitals. In the photo, Arkansas Children's Hospital Foundation President Fred Scarborough (second from left) accepts Arkansas Federal's donation from (from left) AFCU President/CEO Larry Biernacki and board members Garold White and Phillip Boudreaux (Photo provided by Arkansas FCU) …
  • COLUMBUS, Ohio (2/11/13)--Dave Shoup, leader of the compliance and information team at the Ohio Credit Union League, will retire April 5 after 27 years of service to Ohio's credit unions, announced the league (eLumination Newsletter Feb. 6). He began as a field consultant for the Texas Credit Union League and served as director of services at the Colorado Credit Union League before returning to his native Ohio. As an architect of InfoSight in 2003, Shoup was responsible for the online tool used by credit unions throughout the country …
  • FARMERS BRANCH, Texas (2/11/13)--Chocolate Bayou Community FCU, a $92 million asset credit union based in Alvin, Texas, hosted a meet and greet with newly elected U.S. Rep. Randy Weber (R-Texas) on Jan. 31, according to the Texas Credit Union League (LoneStar Leaguer Feb. 7). Alvin residents packed the credit union's lobby to meet the congressman, who represents Congressional District 4. Shown at the event are, from left, Rep. Weber, and local residents and longtime Chocolate Bayou members Larry and Nancy Phillips. (Photo provided by the Texas Credit Union League)…

Federal court stays Space Coast CU suit over CDOs

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FORT LAUDERDALE, Fla. (2/11/13)--A federal judge in Fort Lauderdale, Fla., has issued a stay in Space Coast CU's lawsuit against Wall Street big banks and ratings agencies Moody's and Standard & Poor's over losses from collateralized debt obligations (CDOs) sold to the now-defunct Eastern Financial Florida CU.

Eastern Financial Florida CU, Miramar, Fla., lost over $100 million from the CDOs, a type of  mortgage-backed securities it bought from the companies. Melbourne, Fla.-based Space Coast acquired Eastern Financial in 2009 and filed the lawsuit as its successor.

U.S. District Judge James I. Cohn Tuesday granted the motion for a stay of discovery on all written discovery, depositions and obligations to produce documents, pending a ruling on the defendants' motion to dismiss the case.

Space Coast's suit alleges the banks' process of "creating and selling CDOs revolved around shoe-horning residential mortgage securities into Moody's and S&P's credit rating models to generate 'investment grade' ratings" and that most investors rely on the credit ratings. It also alleges the banks made "material misrepresentations and/or omissions" to induce Eastern Financial to purchase the notes.

The stay was filed on the same day that the Justice Department announced it was bringing civil fraud charges against Standard & Poor's and its parent company, McGraw-Hill, for inflating ratings that misrepresented the true risks behind many investment products that caused the subprime mortgage meltdown that led to the Great Recession. In that lawsuit, Eastern Financial and the now defunct Western Corporate FCU were noted among the buyers of CDOs (News Now Feb. 6).

The Space Coast lawsuit names as defendants: Merrill Lynch, Pierce, Fenner & Smith Inc.; Merrill Lynch Credit Corp. (Merrill Lynch Home Loans); Wells Fargo Securities LLC (former Wachovia Capital Markets LLC); JP Morgan Securities Inc. (former Bear Stearns & Co. Inc.); UBS Securities LLC; Barclays Capital Inc.; Richard S. Fuld Jr.; Moody's Investors Service Inc.; and McGraw Hill Cos. Inc. (formerly Standard & Poor's Ratings Services).

CUNA Mutual to sell CMG Mortgage Insurance Co

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MADISON, Wis. (2/11/13)--CUNA Mutual Group and PMI Mortgage Insurance announced Friday they have agreed to sell CMG Mortgage Insurance Co. (CMB MI) to a U.S. subsidiary of Arch Capital Ltd., a Bermuda-based insurance and reinsurance company.

Arch U.S. MI will acquire all outstanding equity interests in the private mortgage insurance company from PMI and Madison, Wis.-based CUNA Mutual Group.

"This is a win-win for credit unions and CUNA Mutual. This ensures credit unions will continue to have a high-quality, low-cost PMI option, with no interruption of service," said CUNA Mutual CEO Jeff Post Friday.

CUNA Mutual will enter into distribution and reinsurance agreements with CMG MI.

Arch U.S. MI will also purchase PMI's information technology platform and systems and, as a result, CMG MI is expected to provide uninterrupted delivery of technology support for its operations. With the proposed distribution arrangement, CUNA Mutual Group mortgage insurance sales staff will continue to serve credit union customers on behalf of CMG MI.

Post stressed that the regulatory approval process, which spans about nine months, must happen first before the deal can be closed.

He also noted that due to the shrinking number of private mortgage insurance providers in the marketplace, for many credit unions it would not be easy to find a new provider. "We wanted to be sure that gap didn't develop and our credit unions continue to be served with PMI," Post said. "Our goal is for this to be seamless."

PMI was placed into receivership in 2011. PMI owns a 50% stake in CMG MI, with the other 50% owned by CUNA Mutual Group. CMG MI is a stand-alone, incorporated entity with its own capital and dedicated staffing from its shareholders.

aSmarterChoiceorg records healthy start to 2013

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MADISON, Wis. (2/11/13)--Consumers continue to show a healthy interest in credit unions, as illustrated by the number of visitors last month to aSmarterChoice.org, which nearly matched the number of visitors the same month one year ago in the wake of Bank Transfer Day.

aSmarterChoice.org, established in 2011, is a website designed for consumers and media to learn more about credit unions and to help consumers find a credit union they are eligible to join. The website provides a comprehensive credit union locater that includes every credit union in the nation, and helps consumers find credit unions to join by answering a few simple questions about where they live, work or worship.

More than 20,200 total visits were made to the site last month. That's down about 5% from January 2012. But, one year ago, credit unions were still in the public eye following "Bank Transfer Day," the consumer-inspired movement to switch from big banks to credit unions after the imposition of new, high fees by the big banks. And aSmarterChoice.org reaped the benefit of high consumer interest in credit unions as a result--for up to six months following Bank Transfer Day.

"Frankly, we were pleasantly surprised by January 2013 numbers," said Paul Gentile, Credit Union National Association executive vice president of strategic engagement and communications. "The number of visitors each month during the latter part of 2012 had dropped off a bit, and then leveled off. But these latest numbers indicate that consumer interest in credit unions has picked up again."

Gentile pointed out that CUNA's analysis of credit union membership growth since September 2011 indicates a continuing interest in the benefits of credit unions.

He said CUNA estimates indicate memberships grew by 2.4 million (2.6%) in the year ending December 2012, and have grown 3.1 million (3.4%) in the period between the start of September 2011--the month when high bank fees were announced--and the end of December 2012. "Both in numbers and in percentage terms, the 12-month increase reported in 2012 is the fastest we've seen in about 15 years," Gentile said.

Also respectable, Gentile said, were the number of credit union searches conducted on aSmarterChoice.org in January 2013, compared with the same month last year. The total number of searches reached 17,021; in January 2012, the total searches were 15,800.

aSmarterChoice.org is a joint project of CUNA and the American Association of Credit Union Leagues. It is a prime example of credit unions, leagues and CUNA cooperating together to advance the credit union system and is aimed at helping create consumer awareness of and building membership in credit unions.

More states introduce checkout surcharge bills

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MADISON, Wis. (2/11/13)--The Credit Union National Association continues to monitor bills introduced in various states to ban merchants from charging "checkout" surcharge fees on credit card transactions. The state bills now total 11, in addition to two other states said to be drafting similar legislation.

Last week Vermont, Kentucky, Missouri, South Carolina, Utah, and Tennessee introduced bills in their state legislatures to ban the surcharges, and an earlier measure banning surcharges made progress in the New Jersey legislature.

Six other states--Hawaii, Illinois, Mississippi, New Jersey and Rhode Island--had introduced similar bills earlier. Pennsylvania and West Virginia also are said to be drafting similar bills. Since 10 states already have laws on the books banning the fees, if these states' measures also became law, a total of 23 would have bans.

However, Maine--one of the original 10 states with a surcharge ban already enacted--is considering repealing that law. Last week legislators introduced a bill seeking to repeal its existing surcharge ban.

The flurry of bills are the result of a provision in a $7.2 billion industry court settlement that merchants negotiated with Visa and MasterCard and banks in an antitrust lawsuit. The settlement allows merchants to charge a checkout fee that must be equal to what the merchant pays to accept the card, which is typically 1.5% to 3% in the U.S. and not to exceed 4%. The surcharge provision of the settlement took effect Jan. 27. The surcharge does not affect debit cards.

CUNA is monitoring the developments because any surcharge on credit card transactions would affect all financial institutions, including credit unions, as well as credit union members. Here's a rundown on last week's activities:

  • Vermont S.B.  87 specifies "a Vermont merchant in any sales transaction shall not impose a surcharge on a person who elects to use a credit card in lieu of payment by cash, check, or similar means," said the Association of Vermont Credit Unions (Newslines Express Feb. 8). The ban would take effect in July. A bipartisan group introduced the bill: Judiciary Committee Chair Richard Sears (D), Economic Development Committee Chair Kevin Mullin (R), Committee Chair Timothy Ash (D) and Sen. Philip Baruth (D).
  • A New Jersey bill making it illegal to impose a surcharge on credit card transactions passed the full Senate Thursday and the Assembly Financial Institutions and Insurance Committee, said the New Jersey Credit Union League (Daily Exchange Feb. 8).
  • The new Missouri bill, H.B. 495, would amend state laws to ban surcharges "on a cardholder who elects to use a credit card in lieu of payment by cash, check or similar means." Its sponsor is Rep. Randy Dunn (D-Kansas City).
  • Utah S.B. 67, sponsored by Sen. Curtis S. Bramble (R-Provo), does not make the distinction between credit cards and debit cards but "prohibits sellers from imposing a surcharge on a transaction paid for with a financial transaction card."
  • Tennessee's H.B.0897, sponsored by Rep. Jason Powell (D), prohibits sellers and lessors, as well as "any entity issuing credit or charge cards" from imposing a surcharge on credit card payments.
  • News Now also verified state laws prohibiting credit card surcharges have been introduced in Kentucky (HB 256 and HB 259) and in South Carolina (H. 3477), but details  were not available.
The 10 states with laws already on the books are: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

Pennsylvania CU Assoc announces board

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HARRISBURG, Pa. (2/11/13)--The Pennsylvania Credit Union Association has announced the election of two board members--Richard Stipa and Christine Woods--and the re-election of one other--Cookie Yoder.

Stipa, CEO of TruMark Financial CU, will serve a three-year term and represent credit unions in the greater than $100 million assets category. Since 2001, he has served as the CEO of the Trevose-headquartered credit union. 

At the national level, he serves on the Federal Reserve Credit Union Advisory Council, Credit Union National Association state credit union subcommittee, and the PSCU Strategic Planning Committee. Also, Stipa serves on the Pennsylvania Credit Union Foundation Board of Directors, the PCUA State Credit Union Advisory Committee, and PCUA Governmental Affairs Committee/PAC Trustee. He also represented credit union interests on the Gov. Tom Corbett Transition Team.

Woods, president/CEO of Keystone FCU will serve a three-year term and represent credit unions in the greater than $30 million and up to $100 million assets category. Since 2008, Woods has served as the CEO of the West Chester-based credit union.

Yoder, president/CEO of City Co FCU, was re-elected and will serve a three-year term and represent credit unions in the up to $30 million assets category. With more than 35 years of credit union experience, Yoder was named president/CEO of the Pittsburgh-based credit union in 2011. Previously, she served as president/CEO of Pittsburgh FCU for 22 years.

CUs in Northeast closed for blizzard

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BOSTON (2/11/13)--Northeast credit unions and leagues Friday were bracing for what turned out to be a record blizzard during the past weekend, as cold air traveling south from Canada combined with a storm moving northward from the Carolinas and brought more than three feet of snow to the region.

As of Saturday morning, five states--New York, Massachusetts, Connecticut, New Hampshire and Rhode Island--had declared state of emergencies and closed highways, with the Boston area at the center of the storm. Maine declared a partial emergency. The storm had dumped from 29.1 inches of snow in Commach, Long Island, N.Y., to 38 inches in Milford, Conn.  Portland, Maine, saw a record 29 inches. Credit unions and leagues in the states began closing Friday.

"We are getting quite a storm today," Rob Kimmett, senior vice president of marketing and public relations for the Massachusetts Credit Union League, New Hampshire Credit Union League and Credit Union Association of Rhode Island, told News Now Friday.

"We were closed Friday, but our staff has been continually monitoring e-mail and voice mail as they work from home. Most credit unions in the region closed around 12 noon," Kimmett said. He noted the storm was expected to intensify around 6 p.m. ET Friday in the Boston area.  "We expect that most, if not all, credit unions will be closed Saturday."

"Our credit unions knew this blizzard was coming and are prepared. It has been the top news item for the past three or four days. Although it has been a couple of years, anyone who has lived in New England for any length of time has seen a blizzard--2010, 2005, 2003 being the most recent storms that left more than 18 inches of snow," he said.

Parts of the area were still recovering from damage wreaked in October from another combination of storms, the huge Superstorm Sandy.

Last weekend's blizzard brought wind gusts up to 83 mph and had closed 6,333 flights at Boston's Logan Airport as of Saturday morning. It caused flooding along the Massachusetts coast as 15- to 20-foot waves pounded the coastal area. Roads were impassable due to snow, downed trees and stalled cars.

Six deaths were reported as of Saturday morning.  More  than 600,000 customers were without power in the region--with 400,000 in Massachusetts alone, according to the first reports (The Wall Street Journal and The New York Times Feb. 8).  Power outages hit entire towns and closed a nuclear power plant in Plymouth, Mass. The Times reported that snowflakes were as big as dollar bills.

Wash state legislature holds hearings on CU governance, investments

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OLYMPIA, Wash. (2/11/13)--Two bills that would make broad governance changes, including removing the prohibition for Washington state-chartered credit unions from paying board members and supervisory committee members, and increase credit union investment options had public hearings Thursday.

Both bills were promoted by the Northwest Credit Union Association.

"Many of the recommendations were nurtured in the association's Evolutions Task Force and became important policy positions of the Washington Government Affairs Committee which strives for a better operating environment for credit unions in the state as they work diligently to help the members they serve," Lynn Heider, NWCUA vice president of public relations and communications, told News Now. "They have been in the vetting process for several years."

Advancing the credit union charter and enhancing the operating environment for the credit unions in the northwest is a key priority for the Northwest Credit Union Association," said Troy Stang, NWCUA president/CEO.

"It was an honor to be joined by well over a hundred credit union advocates in Olympia on Thursday as these bills had hearings in both chambers. It truly demonstrates the active engagement of our community in amplifying the credit union voice to enhance our collective influence."

"There has been a really high level of engagement on these bills--a lot of study and a lot of collaboration in the NWCUA credit union community," Heider said. "Many credit union CEOs were involved and they provide input routinely. The association has been considering these issues for a while and everything in [the bills] is based on the requests and recommendations of our credit unions."

The reason the NWCUA supports pay for credit unions' board members is simple, Heider said.

"The option of being able to compensate board members may help some credit unions recruit and keep a more diverse board--young working professionals and highly trained professional people to recruit and retain," she explained.

Small CU leader involves staff in advocacy

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CHILLICOTHE, Ohio (2/8/13)--Despite her credit union's small size, Laura Roberts insists that Chivaho FCU stands tall as an advocate for cooperative financial institutions.

Roberts, CEO of the $24 million asset Chillicothe, Ohio, credit union and president of the Ohio Credit Union League's (OCUL) South Central Chapter, developed an essay contest offering a professional development scholarship to one of her credit union's seven employees to attend the Credit Union National Association's 2013 Governmental Affairs Conference, said the league (eLuminationNewsletter Feb. 6).

CUNA's 2013 GAC will take place Feb. 24-28 at the Washington Convention Center in Washington, D.C. This year's GAC theme, "Powerful Cause, Positive Effect," reflects the credit union commitment to the 95 million working Americans who rely on credit unions every day.

Preserving the tax status of credit unions is CUNA's top advocacy priority in 2013 and maintaining that status will be the main goal of credit union grassroots and political advocacy efforts during the year--and among the topics addressed at the GAC.

"I have a passion for political involvement, and I've been to the GAC and it is awesome," Roberts told the Ohio league. "Small credit unions like ours are challenged to participate because we don't have the resources." She said she "wanted to find a way for our own staff to recognize the importance of political involvement."

Chivaho's scholarship includes travel, lodging expenses, registration fees and paid time off to attend.

Essay contest participants answered the question: Why are you interested in attending the GAC? In our current economic climate, what should our credit union do to make a difference in our community and our members' lives? In reviewing the credit union strategic plan, what specific goals of the plan do you feel are most important? If you were asked to add a goal to the plan, what would it be?

The contest winner, Gina Plummer, will detail her GAC experience in a written report that she will share with the credit union's board of directors.

Legislators on the GAC speaking schedule include: Speaker of the House Rep. John Boehner (R-Ohio); Democratic National Committee Chairman and credit union supporter Rep. Debbie Wasserman Schultz (D-Fla.); and credit union champions Sen. Mark Udall (D-Colo.), Rep. Ed Royce (R-Calif.) and Rep. Brad Sherman (D-Calif.).

House Majority Leader Eric Cantor (R-Va.)., House Financial Services Committee Chairman Jeb Hensarling (R-Texas), House Financial Services Committee Ranking Member Maxine Waters (D-Calif.), House Majority Whip Kevin McCarthy (R-Calif.), House Financial Services Committee senior member Spencer Bachus (R-Ala.), Rep. Gregory Meeks (D-N.Y.), Sen. Elizabeth Warren (D-Mass.), Sen. Jon Tester (D-Mont.), Rep. Peter King (R-N.Y.) and Rep. Blaine Luetkemeyer (R-Mo.) are also slated to speak at the 2013 GAC.

WOCCU seeks young CU leaders for internat'l scholarships

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MADISON, Wis. (2/8/13)--
At the presentation of the 2012 World Council of Credit Unions (WOCCU) Young Credit Union People (WYCUP) scholarships were, from left: WOCCU Chair Manuel Raines;  WYCUP recipients Miriam De Dios (U.S.), Edyta Grzybowska (Poland), Brian Aalbers (Canada), Wesley Diniz Alves (Brazil) and Maire Doyle (Ireland); WOCCU President/CEO Brian Branch; and WOCCU Director and Awards Committee Chair Ron Hance. (Photo provided by the World Council of Credit Unions)
The deadline for nominations to the World Council of Credit Unions' (WOCCU) Young Credit Union People (WYCUP) scholarship program is June 3.

The scholarship program is an international networking and educational opportunity for promising credit union leaders, said WOCCU. The program and awards ceremony will take place at the 2013 World Credit Union Conference in Ottawa, Canada, July 14-17.

"Outstanding young leaders are critical to the future success of the international credit union movement," said Brian Branch, WOCCU president/CEO. "WYCUP is an excellent opportunity to broaden the horizons and expand the depth of industry knowledge among this group of credit union professionals."

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.

To be eligible, nominees must:

  • Be sponsored by their credit union or credit union organization to attend the conference in Ottawa;
  • Be 35 years or younger as of this past Jan. 1; and
  • Submit a completed nomination form to WOCCU with supporting materials by June 3.
Five young leaders will receive WYCUP scholarships at the Ottawa conference for an all-expense-paid trip to the 2014 World Credit Union Conference in Australia.  All nominees will receive recognition in Ottawa, where they can participate in events and networking sessions organized specifically for young leaders.  Conference registrants age 35 or younger also qualify for a discounted registration fee, regardless of whether they compete for the scholarship.

For more information, use the links.

One in four small businesses lack financing: NSBA report

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WASHINGTON (2/8/13)--Financing markets for small businesses are starting to thaw, with 73% of small businesses surveyed reporting the ability to gain financing, the highest in four years. However, one in four small businesses still can't get financing for their capital business needs, said the National Small Business Association (NSBA).

NSBA's 2012 Year-End Economic Survey piles on another log in the stack of reasons why credit unions--which loaned to small businesses through the recession when banks abandoned them--are seeking legislation to allow them to continue providing more small-business loans, said the Credit Union National Association.

CUNA and credit unions are urging Congress to raise credit unions' member business lending (MBL) cap to 27.5% of total assets, up from the current 12.25%.  Doing so would generate $13 billion available for MBLs--and increase jobs by 140,000 in the first year without costing the taxpayer.  Enhancing credit unions' charter to include increased MBL authority is one of CUNA's top 10 priorities for 2013 (News Now Jan. 3).

Using data from as far back as 1993, NSBA has found a "clear correlation to a small-business owner's ability to hire and his/her ability to get financing.  While the last four years have seen a small-business community struggling to stay afloat, we also have seen their ability to get capital diminish."

The study indicates small businesses are less optimistic about their outlook and the U.S. economy than a year ago. "Despite modest gains in the number of small businesses projecting U.S. economic expansion, the overwhelming majority--86%--still believe the U.S. economy will be flat or recessionary in the coming year," said SNBA President/CEO Todd McCracken. "Half of all small businesses project no growth whatsoever in their own business year," he added.

However, the survey's timing --conducted during the fiscal cliff debates--could have lowered optimism, said NSBA.

Other findings:

  • Thirty-eight percent of those surveyed expect to grow in the coming year--the lowest indication since researchers began asking the question in December 2009;
  • Hiring remains stagnant, with 16% of those surveyed projecting decreases in employment size in the next, up from 12%;
  • Economic uncertainty is the No. 1 challenge facing small-business owners, followed by regulatory burdens and health care costs; and
  • Reducing the national deficit is the No. 1 thing small business owners want from Congress.

Ohio governor proposes CU budget-impacting sales tax

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COLUMBUS, Ohio (2/8/13)--Ohio state-chartered credit unions could see their business costs rise as result of the governor's proposed budget, the Ohio Credit Union League reported. 

Gov. John Kasich this week officially proposed the Ohio biennium budget, which expands the products and services subject to sales tax, and lowers the overall rate to 5% from 5.5% (eLumination Newsletter Feb. 6).

"There are more than 80 services added that could be subject to the sales tax," John Kozlowski, league general counsel, told News Now. "The areas that credit unions could see affected are in accounting, auditing, fees for financial services, and debt and credit collections. Those probably are the most logical areas that would be affected."

The league is closely monitoring the proposal.

There are two general areas of concern, Kozlowski added. One is the additional burden an increased sales tax would have on credit union members.

The other is the additional burden placed on credit unions because of additional administrative costs that would be incurred, he said. "Some of credit unions' services--such as fee-based services--and products that weren't previously taxed could be subject to sales tax," Kozlowski explained. "For instance, even areas such as credit union sales of amusement park tickets could be taxed."

With Kasich's proposal, services subject to state sales tax would include financial services' fee income (non-interest income), insurance-related services (excluding premiums), legal and accounting services, professional services (consulting, advertising marketing, lobbying), and administrative and support services (collection agencies, credit rating services).

It is important to note the governor's budget is only a proposal, and will be introduced in the Ohio General Assembly and deliberated by the legislature, the league said.

Several credit union leagues, such as the one in North Carolina, are monitoring tax-reform proposals in their states.

Relief funds distributed 331 Hurricane Sandy grants

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Joni Flannery (right), Teachers FCU's Amityville branch manager, presents Patricia McAuiliffe of Lindenhurst, N.Y., a check on behalf of the New York Credit Union Foundation Disaster Relief Grant program for damages caused by Hurricane Sandy. (Photo provided by the New York Credit Union Foundation)
ALBANY, N.Y. (2/8/13)--The credit union community has raised enough money to provide 331 Hurricane Sandy victims and two credit unions disaster relief grants to help fund their recovery.

Funds were raised and distributed through the National Credit Union Foundation CUAid program and the New York Credit Union Foundation (NYCUF) statewide Disaster Relief Fund.

"The devastation caused by Hurricane Sandy was significant, but so was the outpouring of support we saw from the credit union community in its aftermath," said William J. Mellin, president/CEO of the Credit Union Association of New York. "Thanks to our national and statewide disaster relief funds, we have been able to step in and help hundreds of families with their recovery."

Through the CUAid program, NCUF awarded more than $260,000 in grants to credit union employees, volunteers and members in New York and New Jersey. A total of 94 New York applicants received CUAid grants.

NYCUF's statewide Disaster Relief Fund raised and awarded $149,158 to 237 New York credit union employees, volunteers and members from 22 credit unions, and to two credit unions--Oceanside Christopher FCU in Oceanside, and Entertainment Industries FCU, New York City.

Looking for Hispanic members? Know their mobile use

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NEW YORK (2/8/13)--Credit unions trolling for Hispanic members can pick up pointers about serving them from a recent survey examining this group's use of smartphones vs. tablets for mobile banking and determining how much Hispanics interact with their primary financial institution's mobile social media page.

Hispanics use both smartphones and tablets, but they have preferences, depending on the type of task involved, according to a 2012 Hispanic Mobile Banking Survey, a study of people age 18 to 70 by Zpryme and ThinkNow Research (eMarketer.com Feb. 6). 

They prefer smartphones for checking balances (80%), receiving bank alerts (43%), and asking for customer service (12%).  However, they are more apt to use tablets for all other tasks, including viewing transactions (66%), transferring money (46%), paying bills (46%), and finding the nearest bank/ATM (30%). The differences in preference were most pronounced (averaging about a 10- percentage point difference) in transferring money, paying bills.

Both devices received less than 14% use in several other areas. The tablet was used more frequently for editing account preferences (14%), managing investments (11%), and depositing checks remotely (11%). The two devices tied, at 4% in using them for applying for a loan or credit card.

The other aspect of the study examined the percentage of Hispanic respondents who have interacted with their bank's mobile media page and what social network channels they used.  Interactions were defined as visitations, shares, likes, video views, follow, posts and comments.

The most popular network was Facebook, with 44% of those surveyed using this network, nearly twice that of the next most popular contender, Google. YouTube was used by 17%, Twitter by 15% and Pinterest by 4%.

Banking mobile apps missing the boat, says study

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SEATTLE (2/8/13)--A disparity exists between what consumers want in mobile banking applications and what their financial institutions are offering them, according to a new survey. That means credit unions have an opportunity to seize a service advantage over their for-profit competitors.

"There's an app for everything in today's mobile-driven consumer environment. And, as the economy has suffered over the past few years, consumers are turning to apps for financial management as well," said Brian Moore, financial services market manager for Varolii Corp., which conducted the study. "However, our study shows that most banks are failing to deliver on consumer expectations with first or second generation mobile applications."

Nearly two in three consumers believe it's their financial institution's responsibility to immediately alert them when they have a low balance or insufficient funds to pay a bill, according to the study. Nearly 70% of survey respondents said a banking application could have helped them avoid an overdraft or bounced check.

But 68% of respondents said they have not been notified of a low balance or reminded to make a bill payment. And, the younger consumers are, the more strongly they believe in the importance of financial institutions being proactive--73% of 18- to-24-year-olds believe they should receive notifications from their financial institutions versus 56% of those over 55 years old.

Consumers also prefer to be contacted through multiple digital channels. Survey respondents said they want to receive these notifications and reminders by e-mail (47%), text message (22%) and through their smartphone application (13%).

CU System briefs (02/07/2013)

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  • FARMERS BRANCH, Texas (2/7/13)--Texas Trust CU, Mansfield, Texas, has appointed 14 students from five north Texas school districts, two private schools and two colleges to its Youth Advisory Council (LoneStar Leaguer Feb. 4). The leadership development program focuses on personal finance and meets twice a month to learn about personal financial issues, service leadership, marketing and career opportunities in the financial field. The newest members were chosen from among 70 applicants and will serve through the end of May. "We continue to receive a large number of interested applicants, which indicates high school students are highly interested in learning about personal finance," said Amber Danford, vice president of marketing at the $754 million asset credit union. "Beyond teaching them how to become money-wise, we give them opportunities to serve in the community and learn about business operations so they have a better understanding of how financial institutions work," she added … 
  • NEWARK, Ohio (2/7/13)--Ronald D. McCullough, past president of Newark, Ohio-based Fiberglas FCU, died Jan. 25 in Newark. He was 77.  He retired after 33 years as an electrical supervisor at Owens Corning. McCullough also served as past president of IBEW Local 1280. He is survived by his wife, a son, a daughter, three step-sons, two grandchildren, six step-grandchildren, three brothers and three sisters (The Advocate Jan. 27) …

Will stopping Saturday mail delivery matter to CUs?

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MADISON, Wis. (2/7/13)--When the U.S. Postal Service announced Wednesday it will stop delivering  mail on Saturdays, beginning the week of Aug. 5, Credit Union National Association  staff began to assess what that might mean for credit unions' operations.

CUNA's regulatory staff are looking into whether any federal regulation requiring that disclosures, periodic statements, or notices be received at the credit union within a certain number of days would become problematic if Saturday mail delivery ended.

Late last year, the Postal Regulatory Commission asked CUNA for help in distributing a request for comments on how well the postal service has been fulfilling its role.

Many credit unions have been encouraging members to wean themselves from paper statements and mailed payments by accepting electronic communications from their credit union.

The Postal Service's  announcement  is viewed by some as an attempt to force Congress to deal with the service's financial woes (Los Angeles Times and The Washington Post Feb. 6). Congress has resisted past attempts to eliminate Saturday delivery.

At least one credit union is adopting a wait-and-see position before it makes any operational decisions. "Congress and the government have not chimed in yet," said Darryl Belinski, CEO of Trenton, N.J.-based Postal Employees CU. The Saturday delivery deadline "is six months from now, and a lot can happen in that time.

"It's way too premature to deal with anything that might be done. It took [Congress and the government] long enough to deal with the fiscal cliff," he told News Now. "As the date gets closer, we'll deal with it."

Members at the $44 million asset credit union have not expressed concern about missing a Saturday delivery. As for an impact on its operations, Belinski said, "We're closed on weekends so it won't impact us."

The Postal Service lost $16 billion in fiscal 2012, about three times more than in 2011. Ending Saturday deliveries would save about $2 billion a year. Nearly seven in 10 Americans support the switch, said officials. Package delivery on Saturdays would continue.

Catalyst Corporate to offer loan participation program

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DULUTH, GA. (2/7/13)--Catalyst Corporate FCU in Duluth, Ga., said Monday it will launch a major initiative in upcoming weeks--an agent loan participation program.

"The loan participation program will connect credit unions that want to sell loans with credit unions that want to purchase an interest in a loan pool," said Jeff Hamilton, newly hired vice president, member credit at Catalyst Corporate. "This will help both parties in managing their balance sheets--sellers create liquidity, while buyers have the potential to earn higher yields."

More information about loan pools for sale will be posted on Catalyst's website as it becomes available. As an agent, Catalyst Corporate will provide detailed review packages to prospective buyers about the pools for sale, Hamilton said.

However, he emphasized that buyers must perform their own due diligence and make independent purchasing decisions. Catalyst Corporate will not guarantee loan performance. Buyers and sellers are not required to be members of Catalyst, but members will be given first priority on loan participation transactions.

Hamilton spent 13 years at Western Corporate FCU in San Dimas, Calif., including three years as vice president of research and lending. There, he managed the corporate's lending programs, including a loan participation program. He served previously as vice president of portfolio management and as founder/director of the Financial Solutions Group, WesCorp's asset liability management consulting service.

US Rep Jordan affirms support for CU tax exemption

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COLUMBUS, Ohio (2/7/13)--U.S. Rep. Jim Jordan (R-Ohio) gave a ringing endorsement of credit unions' tax exempt status at a recent Western Buckeye dinner in Lima, Ohio, according to the Ohio Credit Union League.

"It's important that we protect your tax status in the midst of the tax reform debate over the next few months," said Jordan, the leader of the conservative wing of the U.S. House of Representatives. "Credit unions are already taxed enough," he said.

"The government is fond of saying 'we need more of your revenue, and then we'll give it back to you,'" Jordan said. "But they almost never do. Washington has a spending problem, not a taxing problem. [Credit unions] are in good shape because your tax exemption has been there from the beginning," he said.

John Florian, league vice president of governmental affairs, attended the event on Jan. 30 and praised the congressman for his statement.  "Rep. Jordan continues to grow in stature in Washington, and his opinion carries a lot of weight among fellow members of Congress. We are thrilled that he has taken such a strong and public stance on this critical issue," Florian said.

Jordan also announced he plans to visit credit unions in the northern section of his newly expanded 4th Congressional District in the coming months and said he looked forward to meeting with credit union officials during the Credit Union National Association's Governmental Affairs Conference Feb. 24-28 in Washington, D.C.

Preserving the credit union tax status is always a top priority for the Credit Union National Association. (See related  News Now story: Ways and Means starts look at reforms with charitable deductions hearing.)

CUNA to select 12 for Googolplex youth ed board

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MADISON, Wis. (2/7/13)--Credit Union National Association representatives will select 12 students nationwide to serve one-year terms as youth editorial board members for CUNA's microsite, Googolplex: The Credit Union Guide for Student Moneymakers.

"Our youth board members provide us with feedback that ensures that their peers feel welcome and engaged whenever they use Googolplex on their credit union's website," said Rena Crispin, Googolplex managing editor. "At CUNA, we believe that it's vital to start financial education at a young age."

Applications are being accepted through March 8. The new student board members' terms will begin on June 1.

Googolplex is a youth-focused element of CUNA's suite of microsites, which guide credit union members through financial decisions at every stage of life. Googolplex features interactive games, videos, blogs and other content that deal with money matters and real-life issues to promote financial literacy for youth, aged 6-18.

Youth editorial board members complete each month two brief online critiques of stories and games in age-specific sections of Googolplex's three-in-one website. At the end of their terms, each of the middle- and high-school board members writes an original story for Googolplex.

The 12 students selected will serve in one of three sections:

  • Four elementary school-aged students will serve on the Clubhouse Crew for 5-Spot.
  • Four middle school-aged students make up the Super Youth Team for AJ's.
  • Four high-school-aged students will be on the Teenage Panel advising C-Note.
Board members must be in grades 3-12 in the fall of 2013 or, if home-schooled, of the same grade-level ages, and will work from home. Applications are available from Laurel Purves, Googolplex youth editorial board liaison, lpurves@cuna.coop, 608-231-4088. Applicants should state the child's grade level or age equivalent if home-schooled.

To learn more about how Googolplex and CUNA's other personal finance microsites benefit credit unions and their members, use the links.

Eighteen charged in $200M credit card scam

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NEWARK, N.J. (2/7/13)--A credit card scam responsible for at least $200 million in losses is racking up impressive statistics: at least 7,000 phony identities, 25,000 fraudulent credit cards, and spanning eight countries and 28 states.  But, for now, it is unclear whether credit unions are among the victim institutions.

The scheme involved:

  • Making up false identities by creating fraudulent identification documents and fraudulent credit profiles with major credit bureaus;
  • Pumping up the credit of the false identities by providing false information about their creditworthiness to the credit bureaus. The bureaus, believing the information was accurate, incorporated the false information into the credit reports, making it appear the false IDs had excellent credit; and
  • Running up large loans using the false identities. The higher the fraudulent credit score, the higher the loans obtained. The loans were never repaid.
The scheme also used "tradelines" providers--a network of black-market businesses providing credit histories and adding "authorized" users to credit card accounts to raise their credit score.

Millions of dollars were wired to Pakistan, India, the United Arab Emirates, China, Romania, Japan and Canada.  

Babar Quereshi, 59, of Iselin, N.J., and Muhammad Shafiq, 38, Bellerose, N.Y., are allegedly the ring's leaders, said the complaint. Most defendants have ethnic ties to Pakistan but live in New Jersey, Philadelphia, and New York.  Three charged earlier have pleaded guilty.

'Secret Agent R' (Riverset CU) on a mission

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PITTSBURGH (2/7/13)--Move over, 007. Riverset CU has assumed the persona of "Secret Agent R" in performing random acts of kindness throughout its community.

Click to view larger image Riverset CU performs random acts of kindness throughout its community as "Secret Agent R." The credit union left this letter for the recipient of its first mission, which included a $5 bill and a package of microwave popcorn placed next to a movie rental vending machine to "pay it forward" for the next movie rental customer. (Photo provided by Riverset CU)
"As a community credit union, we pride ourselves in giving back to the community," said Patrick Flynn, community relations manager at $120 million asset Riverset CU. "We have a deeply held spirit of volunteerism already. This was a way employees could contribute with a minimal amount of time. They love it."

The credit union adopted the secret agent identity from Pittsburgh blogger "Secret Agent L," whose real name is Laura Miller. Pittsburgh-based Riverset CU is the first "Corporate Secret Agent" in the program, and like Secret Agent L, conducts random "day-brightening" missions throughout its community.

The Secret Agent mantra is "Be kind. No exceptions."

Flynn followed Miller on Twitter and Facebook and met her at a charity event, where he proposed the partnership, he told News Now.

For its first mission, Secret Agent R placed a $5 bill and a package of microwave popcorn next to a movie rental vending machine to "pay it forward" for the next movie rental customer. The gift included a note reminding the recipient that "somewhere someone is thinking how important you are to them."

The random acts of kindness are presented anonymously, with a business card that points recipients to the Secret Agent L website.

"We just want people to pick up the package and pay it forward, to go to the website and read what other people have done, so they will be inspired brighten someone else's day," Flynn told News Now.

Schroeder named Calif-Nev leagues' 'unsung hero'

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Lucy Ito (left), California and Nevada Credit Union Leagues' executive vice president and chief operating officer, presents Joe Schroeder, president/CEO of Ventura County CU in Ventura, Calif., with the leagues' Unsung Hero Award recognizing his long-time work in the credit union industry and the community. (Photo provided by the California and Nevada Credit Union Leagues)

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ONTARIO, Calif. (2/7/13)--The California and Nevada Credit Union Leagues named Joe Schroeder, president/ CEO of Ventura County CU, as a recipient of the leagues' Unsung Hero Award for his long-time work and commitment to the credit union industry.

The award honors credit union industry individuals with at least 20 years of service who have made significant contributions to the community.

Schroeder has two-plus decades of credit union leadership experience, including serving as president/CEO at three of Southern California's largest credit unions.  He has served on the board of CO-OP Financial Services and the audit committee of Financial Service Centers Cooperative Inc.--now part of CO-OP Shared Branching.

Schroeder was a founding member of the Marketing Association of California--now Marketing Association of Credit Unions--and served as president. He is a member of the leagues' Government Affairs Committee and has served on the Credit Union National Association's consumer protection subcommittee. He is a board member of Member Business Lending, a credit union service organization in Salt Lake City, and is vice chairman of FOODShare, Ventura County's local food bank.

Schroeder was an early supporter of World Council of Credit Unions' Global Women's Leadership Network, which connects credit union women and leaders worldwide for professional and personal development.

Schroeder received the award Jan. 30 at a Ventura County CU board meeting in Ventura, Calif.

CUs' role in fin lit aired on Pa cable

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Pennsylvania State Treasurer Rob McCord (seated left) explains how parents and grandparents can help children set financial goals and work to achieve them during a financial literacy panel on Pennsylvania Cable Network (PNC) Monday. From left: Corinna Wilson, PCN moderator; McCord; Michael Kaczenski, Pennsylvania Credit Union Association board chairman; Mike Wishnow, PCUA senior vice president, communications and public relations; and Matt Bergman, teacher, Milton Hershey School.  (Photo provided by the Pennsylvania Credit Union Association)
HARRISBURG, Pa. (2/6/13)--Panelists emphasized the importance of ongoing financial literacy--and credit unions' role in furthering it--during a Financial Management 101 program, which debuted on the Pennsylvania Cable Network (PCN) Monday night.

"Financial education begins with a simple conversation between teacher-student, or parent-child," said Pennsylvania Credit Union Association Board Chairman Michael Kaczenski, who also is president/CEO of Sun East FCU in Aston (Life is a Highway Feb. 5).

The panel urged viewers to begin financial literacy education with young children and continue through senior citizens, said PCUA.

Panelists included Pennsylvania Treasurer Rob McCord; Kaczenski; Michael Wishnow, PCUA senior vice of communications and public relations; and Matt Bergman, teacher at the Milton Hershey School. Corinna Wilson of PCN served as moderator.

Bergman suggested parents or teachers take the conversation a step further, to openly discuss with children mistakes made in financial decisions. Wishnow explained the role credit unions play with members, as well as in schools and communities, on financial management and education.

The series of quarterly financial literacy town meetings is sponsored by PCUA and the Pennsylvania Credit Union Foundation.

Ohio league to increase consumer awareness in 2013

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COLUMBUS, Ohio (2/6/13)--After generating earned media coverage equivalent to an $825,000 advertising campaign in 2012, the Ohio Credit Union league is aiming for $1 million in coverage for 2013 to drive more members to credit unions.

"Between the relationships we have developed, the opportunities to develop more, and the large number of Ohioans who do not utilize a credit union, we have plenty of room to grow," said Patrick Harris, league media and public relations director (eLumination Newsletter Jan. 23).

The league used software to track every print article or television news segment that mentioned credit unions in 2012. Every article or segment is assigned an advertising value based on the positive impression left on viewers or readers, the number of likely readers or viewers and the item's placement (News Now Dec. 17).

Ohio credit unions have already been mentioned in multiple outlets in 2013, including ClearChannel radio stations, The Columbus Dispatch and Dayton Business Journal, said the league.

CUNA to FOX Biz: CUs' private student loans better

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NEW YORK (2/6/13)--College tuition has been increasing more than the rate of inflation, but credit unions' private student loans can help, the Credit Union National Association's Mike Schenk told Fox Business  Monday.

Economic instability and stagnate wages have made it difficult for families to save for college, said Schenk, CUNA's vice president of economics and statistics, in the item entitled "Saving for College: Three Trends to Know." Sixty percent of the U.S. population live paycheck to paycheck, he said.

The article outlines three approaches for preparing for college : financial aid including grants, scholarships and government loans; private student loans; and saving accounts, including 529 college savings plans.

Parents and students can turn to the private sector for an unsecured loan, said the article, which noted credit unions are getting into the private student loan market.

"It's not like you can get all your money through the government," Schenk told the publication. "The amount of money is not unlimited, so we offer an alternative."

Credit unions take a little different approach when it comes to student lending, said Schenk. They tend to require students to make a monthly payment,  which can be as low as $25 while the student is in college, he said.

"It gives the student some skin in the game and gets them familiar with the process and helps them understand 'Yes, this needs to be paid back,'" Schenk said. While the interest rate on these unsecured loans varies in each credit union, Schenk pointed out that credit unions have typically been able to offer lower rates than banks.

DoJ sues S&P over rating of RMBS/CDOs bought by WesCorp, others

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WASHINGTON (2/6/13)--Noting losses at Western Corporate FCU and other investors, the Department of Justice filed a lawsuit Monday against Standard & Poor's Financial Services LLC (S&P), alleging that S&P committed fraud in rating residential mortgage-backed securities(RMBS) and collateralized debt obligations (CDOs) in the years leading up to the financial crisis.

The suit against S&P and its parent, McGraw-Hill Companies Inc., was filed in the U.S. District Court for the Central District of California, Los Angeles. It alleges that S&P issued inflated ratings that misrepresented the securities' true credit risks.

The complaint also alleges that S&P falsely represented that its ratings were objective, independent and uninfluenced by its relationships with investment banks, and that its desire for increased revenue and market share led it to favor the interests of those banks over investors.

In announcing the lawsuit, Attorney General Eric Holder said the Central District of California is "home to the now-defunct [WesCorp], which was the largest corporate credit union in the country. Following the 2008 financial crisis, WesCorp collapsed after suffering massive losses on RMBS and CDOs rated by S&P."

U.S. Attorney Andre Birotte Jr. of the Central District of California said that in addition to huge numbers of homeowners with subprime mortgage loans affected in his seven-county district, "institutional investors located in my district, such as WesCorp, suffered massive losses after putting billions of dollars into RMBS and CDOs that received flawed and inflated ratings from S&P."

The complaint includes a list of 76 CDOs as examples of investments that went bad. Eleven were sold to WesCorp and 26 were sold to Eastern Financial Florida CU. Banks receiving the listed CDOs included Citibank, which received 22 on the list; Bank of America, eight; M&T Bank, seven, and First Midwest, 11.

The suit seeks civil penalities under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) based on three forms of alleged fraud: mail fraud, wire fraud, and financial institution fraud.

The complaint says that from 2004 to 2007, S&P was so concerned with possibly losing market share and profits that it limited, adjusted and delayed updates to the ratings criteria and analytical models it used to assess credit risks in CDOs and RMBS. It allegedly weakened those criteria and models from what its analysts believed was necessary to make the ratings more accurate, and  from March to October 2007, it allegedly inflated ratings on hundreds of billions of dollars' of CDOs. Nearly every CDO it rated during the period failed.

Joining in the announcement were attorneys general from California, Connecticut, Delaware, the District of Columbia, Illinois, Indiana, Iowa and Mississippi, who have filed or will file similar civil fraud suits against S&P. In the past three years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants.

NEFCU loans rise while it aids hurricane recovery

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WESTBURY, N.Y. (2/6/13)--Long Island's NEFCU is experiencing substantially increased loan volumes while helping its membership recover from the effects of Hurricane Sandy.

NEFCU provided its members $50 million in special low cost loans in Sandy's wake. The credit union offered a first-year 1% annual percentage rate (APR) on personal loans to assist with repairs, an auto loan discount and auto loan rates as low as 0.74% APR to replace vehicles lost in the storm. NEFCU also offered a special 0% interest rate on its Visa credit card for purchases made at major home improvement retailers

As a result of these programs, the $1.9 billion credit union saw a surge of two-and-a-half times its typical volume for personal loans and one-and-a-half times its usual volume for auto loans.

"We are committed to helping our fellow Long Islanders recover from the aftermath of this devastating storm" said Edward P. Paternostro, president/CEO of the Westbury, N.Y. based credit union. "We are extremely proud to have been able to respond so quickly to the needs of those most hard-hit, and provide the assistance they needed to begin the rebuilding process."

NEFCU was granted the Small Business Loan Expeditor designation, which provides it with the ability to offer expedited business loans and lines of credit to help business owners in need due to Hurricane Sandy.

The credit union also donated $20,000 to Long Island Cares for local Sandy relief efforts.

Also, 54 NEFCU members received funds totaling $35,000 from the National Credit Union Foundation (NCUF) program, CUAid.coop, for disaster relief recovery efforts. NCUF activated the online disaster relief program to raise money for credit union members along the East Coast affected by Hurricane Sandy. CUAid is the only program of its kind that allows credit unions, their employees, volunteers, and members across the U.S., to contribute directly to support fellow credit union staff, volunteers and members in need.

Zai sentenced in St Paul Croatian FCU fraud

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AKRON, Ohio (2/6/13)--Akron, Ohio, financier and developer A. Eddy Zai was sentenced Tuesday to seven years and three months in prison for defrauding the St. Paul Croatian FCU out of $10 million and ordered to pay the largest restitution in the history of Northeast Ohio--$23 million.

Zai was part of an extensive loan fraud ring that contributed to the collapse of the Eastlake, Ohio-based credit union in 2010.

Zai, 45, pleaded guilty in November to conspiracy, bank fraud, bank bribery, money laundering and making false statements to a financial institution (The Plain Dealer Feb. 5). Zai allegedly failed to make payments on the fraudulent loans from 2007 to 2010. Before 2007, he used fraudulent loans from other lenders to repay the credit union, prosecutors said.  His company was allegedly dependent on loans to survive.

He allegedly admitted to paying thousands of dollars in bribes to St. Paul Croatian FCU CEO Anthony Raguz in exchange for loans. Raguz is serving a 14-year prison term for accepting more than $1 million in bribes, kickbacks and gifts in exchange for issuing over 1,000 fraudulent loans involving 300 accountholders (News Now Nov. 27)

More than 24 people have been indicted for taking out fraudulent loans from the credit union. Several have received prison sentences.

The National Credit Union Administration says the credit union's conservatorship was one of the largest failures in credit union history, costing the National Credit Union Share Insurance Fund more than $170 million.

Fall 2013 DE training is open

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MADISON, Wis. (2/6/13)--Registration is open for the Fall 2013 Credit Union Development Education (DE) training class, taking place Sept. 4-11 on the University of Wisconsin campus in Madison, Wis.

Attendees of the National Credit Union Foundation's six-day total-immersion experience will learn about credit unions' social responsibility, and domestic and international development through interactive education and professional networking.

"Registration is limited to just 42 attendees, so the sooner individuals register for DE training the better," said Lois Kitsch, NCUF's national program director. In fact, the spring 2013 DE training has been sold out since last October, she said.

DE training is open to everyone--from new employees who need a credit union orientation, to seasoned executives who need to recharge. 

Credit Union Development Educators return to their jobs with a new understanding of how to promote cooperative principles and credit union values as distinct advantages in today's competitive financial services marketplace, NCUF said.

The registration fee includes seven nights of single-room lodging, and all training materials and meals.

For more information, use the link.

CU System briefs (02/06/2013)

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  • LAWRENCEVILLE, Ga. (2/6/13)--Gwinnett FCU, based in Lawrenceville, Ga., has changed its name to Peach State FCU tobetter reflect its widening membership base and footprint in Georgia, said the 52-year-old , $231 million asset credit union. In the past 20 years, Peach State expanded from Gwinnett County and now includes seven counties: Barrow, Clarke, DeKalb, Gwinnett, Jackson, Oconee and Walton.  It serves more than 41,000 members, 26,000 of whom live outside Gwinnett County, said Peach State President/CEO Marshall Boutwell. "The name Peach State not only acknowledges our entire membership base, but it also allows for future growth without geographic constraints."  Peach State's support to school systems and commitment to members won't change, he said. "Our underlying dedication to education is part of our foundation. We will continue to support education in our service areas through sponsorship of the Teacher of the Year awards, and awarding student and career advancement scholarships because we believe this tradition should be maintained." …
  • CARSON CITY, Nev. (2/6/13)--
    Click to view larger image Click for larger view
    Carson High School, Carson City, Nev.,  has its own "Senators" debit card for student checking accounts. Students designed the card in a contest offered by Greater Nevada CU, which has a branch at the school. More than 60 students entered the contest. The top three design winners, selected by a panel of students, teachers, and credit union representatives, were asked to combine their designs into one to meet Visa criteria and receive approval from the card company. Greater Nevada awarded gift cards to the winners. Shown with their designs are, from left: Mhervin Dagdagan, Amanda Yau and Athena Favero.  The contest was part of an ongoing program to promote awareness of the educational branch and financial literacy at the school.  "Contests like the debit card design pique students' interest in something they may not otherwise think about," said Teresa Breeden, engineering, drafting and art instructor at Carson High. "Plus, we have our very own debit card design now, which should continue creating awareness of the student checking account and other financial resources available right here on campus." (Photo provided by Greater Nevada CU) …
  • FARMERS BRANCH, Texas(2/6/13)--Arlington (Texas) FCU President/CEO Patricia Mott will retire March 31, after 36 years at the credit union, according to the Texas Credit Union League (LoneStar Leaguer Feb. 5). Jim Merrit will act as interim CEO during the search for a successor. In 1976, when Mott began her career, Arlington FCU was a share, certificate and loan credit union serving the city of Arlington employees and their families. It added checking and card services, then mortgage, home improvement and home equity loans, and granted membership eligibility to 57 select employee  groups.  In 1998 and 2001, it expanded charters to the communities of Arlington and Mansfield.  Mott served as a league director in 1990-1998 and as director to Southwest Corporate FCU in 1991-2010 …

Canada's Desjardins Group buys large stake in Qtrade

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MONTREAL, Que., and VANCOUVER, B.C. (2/6/13)--Desjardins Group, Canada's largest cooperative financial institution, has accumulated a sizable minority stake in Qtrade Financial, a discount brokerage firm with business from Ontario to the west coast.

The move expands the cooperative's online trading services outside Quebec and will complement its current discount brokerage, Disnat, said The Globe and Mail (Feb. 5). Both Qtrade and Disnat platforms will be operated independently, said Desjardins spokesperson Andre Chapleau.

Desjardins Group, which is a network of caisses populaires (credit unions)  is based in Quebec, while Qtrade is based in Vancouver, B.C.  Qtrade has built up a wealth management unit that provides a back-office infrastructure credit unions need to offer asset management services, said The Globe and Mail.

Desjardins Group will acquire 25% to 40% of Qtrade's existing privately held shares and has the right to buy the remaining majority stock for the next six years. Qtrade often earns top marks in the newspaper's annual survey of Canadian online trading platforms.

Desjardins has been expanding its reach from Quebec to other provinces the past few years. For example, it acquired Western Financial, a bank and insurance company based in Alberta in 2010.

CU, AmeriCU Mortgage team to build lending

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ST. PAUL, Minn. (2/5/13)--A partnership between HomeTown CU in Owatonna, Minn., and AmeriCU Mortgage Co. is helping bolster new lending relationships in the credit union's community.

The two organizations recently organized an open house for realtors in the area to help the credit union build, strengthen and improve its loan portfolios, according to the Minnesota Credit Union Network.

At the event, representatives in the housing industry met and networked with the credit union's loan officers. The open house also allowed the $107 million asset credit union to educate realtors about available programs and to develop relationships with real estate organizations, MnCUN said.

"This open house event presented a unique opportunity for the credit union to begin to diversify its mortgage lending beyond refinancing, and demonstrate that building relationships with real estate agents and organizations is a key step in finding additional loan sources," said MnCUN Vice President-Network Service Corp. John Ferstl. "The hope is that, through this event, we can create awareness that our strategic alliance partners are willing to work with credit unions and customize ways to improve their bottom line."

AmeriCU Mortgage Co. is a strategic alliance partner of MnCUN. Through MnCUN's Network Service Corp., credit unions have access to products and services that AmeriCU and MnCUN's other strategic alliance partners offer, said MnCUN.

CU System briefs (02/05/2013)

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  • CHARLOTTE, N.C. (2/5/13)--The power outage that delayed Sunday night's Super
    Click to view larger image Click for larger view
    Bowl game between the Baltimore Ravens and the San Francisco 49ers in New Orleans presented an opportunity for business continuity providers. Within minutes of the outage, CUNA Strategic Services provider Agility Recovery Solutions  was reminding everyone on Facebook that disaster strikes "when you least expect it." "This short power outage was yet another reminder that a crisis or disaster can happen at any time, anywhere, and for many organizations those disasters can be quite serious," Scott Teel, Agility Recovery's marketing director, told News Now. He urged credit unions to "take steps to adequately plan for future utility, security, communications and technology failures, as well as the more serious widespread disasters like those caused by Mother Nature." He pointed out a multitude of free, easy-to-use resources available online at www.Ready.gov , www.SBA.gov  and www.PrepareMyBusiness.org. Agility, which provides disaster recovery solutions,  also provides free educational resources specifically for credit unions. It also has an upcoming free webinar on Business Continuity Plan Testing. (Photo provided by Agility Recovery Solutions) …
  • FRIONA, Texas (2/5/13)--John Michael Garibay, 22, of Friona, Texas, was sentenced by a federal judge in Amarillo to 57 months in prison in connection with a robbery of Friona FCU in August.  U.S. District Judge Mary Lou Robinson also ordered Garibay to pay $6,541 in restitution.  The incident occurred when a man wearing a gas mask walked into the credit union and drew a handgun from his waistband. Police trailed the suspect to a mobile home, where they allegedly found items connected with the robbery. Garibay also allegedly told them where to find a pistol used in the holdup (Lubbock Avalanche-Journal Feb. 1) …
  • ALBUQUERQUE, N.M. (2/5/13)--An Albuquerque man, James Charles Mollohan, 35,  was arrested in connection with a robbery Friday of New Mexico Educator's CU, based in Albuquerque. The incident began when a man leaned over the counter and demanded money from a teller. The teller gave him an undisclosed amount of cash and he fled. The teller called police when she thought she recognized a man from another robbery attempt, reported KOB.com (Feb. 1). Police reportedly Tasered the suspect in the credit union's parking lot when they made the arrest ...
  • SAN ANTONIO (2/5/13)--Security Service FCU employees have voted the $6.58 billion asset, San Antonio-based credit union  into a spot in the top 100 American workplaces. SSFCU was ranked 95th out of 872 organizations reviewed, in the category of companies with more than 1,000 employees. The National Top Workplaces list was determined solely by feedback gathered through an objective employee survey. The survey was conducted by WorkplaceDynamics, an on-demand employee survey provider, in conjunction with 30 regional newspapers. The survey uses a proprietary set of 22 questions to rank companies. The award comes after SSFCU was ranked in the top-10 large companies in the city for the second consecutive year in the San Antonio Express News' Top Workplaces 2012 program  (LoneStar Leaguer Feb. 4) ...
  • SCRANTON, Pa. (2/5/13)--Jerome J. "Jerry" McAllister, former CEO of Tobyhanna FCU, Scranton, Pa., died Thursday, said the Pennsylvania Credit Union Association (Life is a Highway Feb. 4). McAllister was born in Scranton. A graduate of Lackawanna College, he was the CEO of the Tobyhanna Army Depot FCU from 1967 to 1996. McAllister was a Navy veteran. Funeral services were held Monday …

SECU invests $25M in NCUF Charitable Trust

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RALEIGH, N.C. (2/5/13)--State Employees' CU invested $25 million in a Charitable Lead Trust to benefit the National Credit Union Foundation and the Carolinas Credit Union Foundation.

State Employees' CU, Raleigh, N.C., invested $25 million in a Charitable Lead Trust created by MEMBERS Trust Co. The investment will generate an annual contribution of about $125,000 each for the National Credit Union Foundation and Carolinas Credit Union Foundation. From left, are: Tom Walker, MEMBERS Trust Co. president/CEO; McKinley Wooten, SECU board chair; and Bucky Sebastian, NCUF executive director. (Photo provided by State Employees' CU)
The trust will generate an annual contribution of about $125,000 each for NCUF and CCUF. 

"Our credit union's $25 million investment provides members with an opportunity to address the financial needs of foundations serving the credit union industry at the national and local level," said McKinley Wooten, board chairman of Raleigh, N.C.-based SECU.

Charitable Lead Trusts are commonly used by donors to make charitable contributions. They are structured to allow donors to create customized charitable gifts and investment plans. 

Under the terms of the NCUF Charitable Trust, MEMBERS Trust Co. FSB will act as the trustee and asset manager. Since 1987, MEMBERS Trust Co. FSB has been cooperatively owned and managed by credit unions nationwide, including the $25 billion asset SECU. 

Two SECU senior executives serve as board members of Charitable Lead Trust partner organizations. Mark Twisdale, SECU Foundation executive director and SECU senior vice president of human resources, serves as an NCUF board member, and Bill Umphlett, SECU senior vice president of financial advisory services, serves on the MEMBERS Trust Co. board.

Securities industry claims NCUA suits vs Wall St banks too late

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DENVER (2/5/13)--An amicus brief filed Friday by The Securities Industry and Financial Markets Association (SIFMA) argues that the National Credit Union Administration's lawsuits against Wall Street banks over sales of residential mortgage-backed securities to corporate credit unions were not filed in time and should be reversed.

SIFMA's brief was filed in the U.S. Court of Appeals for the Tenth Circuit in Denver. The appellate court is reviewing whether NCUA filed its lawsuit against RBS Securities within the  proper statutes of repose and whether the agency should be permitted to extend the time limits  via statutes of repose and limitation. A July 25 decision by the lower U.S. District Court in Wichita, Kan., had ruled that NCUA could proceed with its case.

In its brief, SIFMA maintains that NCUA did not bring its claims against the banks within the three-year statute of repose period required to file a civil suit. Instead, NCUA used an Extender Statute that extends the time period it is allowed to file a case. However, the Extender Statute "clearly and unambiguously does not apply to statutes of repose because it does not even mention them," said SIFMA.

"This case has far-reaching significance not only for SIFMA's members but also for the securities industry as a whole," said the brief. "The NCUA, the [Federal Deposit Insurance Corp.] and the Federal Housing Finance Agency have commenced more than 20 actions against financial institutions concerning the sale of more than $200 billion of residential mortgage backed securities, and seek to apply the same or similar extender statutes to Securities Act claims based on the same incorrect construction" used by the lower court in Kansas.

SIFMA said the lower court failed to "follow the plain language of the Extender Statute, and to recognize that it modifies only 'the applicable statute of limitations' for the NCUA's claims" and not the statute of repose.

NCUA's suits--against RBS Securities, Wachovia Capital Markets LLOC and Wachovia Mortgage Loan and Goldman Sachs, JP Morgan Chase, UBS Securities, Barclay's Capital and Credit Suisse Securities and more--claim they misrepresented and omitted material facts in documents presented to five corporate credit unions in a "systemic disregard of underwriting guidelines." The corporates' investments led to their collapse in 2009.

Iowa op-ed: Taxes mean losing the only FIs driven by service

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DES MOINES, Iowa (2/5/13)--If credit unions lose their tax-exempt status, the U.S. economy would lose the only financial institutions that are motivated by a desire to serve people, according to an opinion-editorial by the head of the Iowa Credit Union League.

Better rates and lower fees saved Iowans more than $76 million in 2012, wrote Patrick Jury, president/CEO of the Iowa Credit Union league, in a Saturday op-ed in The Gazette.

Defending the credit union tax exemption is the Credit Union National Association's No. 1 priority this year, CUNA President/CEO Bill Cheney has said. Several credit union leagues such as those in Ohio and Oregon are monitoring tax reform proposals in their states.

"Consumers benefit by having credit unions in the financial marketplace," Jury wrote. "While Iowa credit unions make up only 10% of this market, this competition creates a better environment for consumers and keeps bank fees from getting even more outrageous. The bankers do not like this competition, and are attacking the credit union tax status, claiming that increasing taxes on credit unions would help solve America's fiscal woes. Bankers want to raise the taxes of Iowa's credit union member owners."

Banks are pointing to national economic challenges as the rationale to tax credit union members, which just makes their claims more outlandish, Jury added. The idea that the banks would advocate for an increase of taxes--after [the Troubled Asset Relief Program] and the taxpayer bailout--on any Iowan "is self-serving," he said.

"Increasing taxes on credit unions increases taxes on Iowa credit union members," Jury wrote. "Credit unions would have to pass along the increased expense to their members in the form of higher fees, higher loan rates and lower savings dividends. There would be no incentive for credit unions to remain not-for-profit and our economy would lose the only sector of the financial industry that is not driven by profit, but, instead, a dedication to serve its members."

To read the op-ed, use the link.

Computerworld features Mich league's CUBE TV

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EAST LANSING, Mich. (2/5/13)--The Michigan Credit Union League's video portal CUBE TV is prominently featured in a Computerworld article about four businesses' success in using videos as a key communications tool.

CUBE TV--CUBE stands for Credit Union Broadcast Experience--was launched in 2008 so the league could provide video content on its website, Dave Adams, MCUL's president/CEO, told the publication (Jan. 23).  It provided updates on the industry, information about league strategic plans and financial performance, and direction to staff and board of directors at about 300 credit unions," he said.

The concept stemmed from the popularity of videos on YouTube. Today, it includes a subsidiary that creates websites and Web content  for credit unions.

"As a trade association, one of our core functions is education and information for our industry," Adams said. The videos focus on the Michigan market but create content that can be shared with other leagues.

Two full-time staffers, a part-timer and one intern are dedicated to CUBE-TV. Two to three others provide regular content such as a monthly video.

The league's first streaming video was inspired by the annual Credit Union National Association Governmental Affairs Conference. The video crew broadcast live from the event  so credit unions could view it from back home and have done so for five years.

CUBE-TV's most popular channel is the Credit Union Compliance Connection, offering 100 vignettes on compliance issues. The site provides 128 videos-- up from 112 in 2011--and was on pace to reach 150 by the end of 2012. Adams said video views increased 200% to 18,000 in 2012 from just over 8,800 the previous year.

Eventually, Adams said, other leagues could plug the videos into their websites and potentially share advertising revenue. Currently, leagues in Georgia and Illinois provide CUBE TV on their websites.

For the full article, use the link.

Mergers announced in four states

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MADISON, Wis. (2/5/13)--Credit union mergers or intentions to merge have been announced in four states in a continuation of the consolidations trend. 

The mergers include:

  • Metro CU, based in Chelsea, Mass., with $1.036 billion in assets, plans to acquire Ashland, Mass.-based Fenwal CU, with $1.8 million in assets (SNL Bank and Thrift Daily Jan. 18). It is anticipated the merger will be finalized in March. Fenwal's one branch will close and its two employees will join Metro CU's staff.
  • Postal Employees CU in Brockton, Mass., with $10.5 million in assets, intends to merge into Crescent CU in Brockton, with $411 million in assets (Enterprisenews.com Feb. 1). Crescent CU has nearly 47,000 members and eight branches in the three Massachusetts cities. Postal Employees CU has one branch inside the Brockton post office and 1,890 members.
  • The $212 million asset Garden Savings FCU in Parsippany, N.J., and Denville, N.J.-based NWNJ FCU, with $2.2 million in assets, announced they have merged, effective last Friday. The credit unions will operate under the Garden Savings name. Garden Savings' 21,000 members will be joined by NWNJ FCU's 700-plus members, Garden Savings said in a press release Friday.
  • The $192.5 million asset Rio Grande CU based in Albuquerque, N.M., acquired Albuquerque-based New Mexico Central CU, with $25 million in assets, in a deal that finalized the account conversion on Dec. 15. The grand opening of the merged credit union occurred Jan. 19 (SNL Bank and Thrift Daily Jan. 16). The merger created an institution with 23,000 members and $228 million in assets.
  • San Francisco Fire CU, with $880.5 million in assets, completed its acquisition last month of the $12.8 million asset San Francisco-based Bay Media FCU (SNL Bank and Thrift Daily Jan. 16). With the merger, San Francisco Fire CU adds one branch for a total of four--three in San Francisco and one in Pacifica.
  • San Jose, Calif.-based Electric FCU, with $11.5 million in assets, has merged into the $352.3 million asset Alliance CU in San Jose (SNL Bank and Thrift Daily Jan. 16).

CUNA Mutual: Six steps to prep for cyber attacks

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MADISON, Wis. (2/5/13)--Distributed denial of service (DDoS) attacks that hit 22 banks as well as two credit unions in California and Texas have prompted advice from CUNA Mutual Group on how to prepare for cyber attacks.

Ken Otsuka, risk management senior consultant for CUNA Mutual Group, noted that the scale and speed of the recent attacks were unprecedented. He defines DDoS attacks as attempts to disrupt or suspend online service by saturating the target's network with external communication requests to overload its server.

Although some hacktivists have called off them off  the attacks, other groups use DDoS attacks as smokescreens for diverting funds from consumers' accounts.

Otsuka advised credit unions to take six steps:

  1. Don't underestimate the threat of cyber attacks.  "It's true that most credit unions don't face the same risk as national banks from attacks by high profile cybercriminal groups. But the first thing to understand about cyber attacks is that we can't predict the next type of attack to come along," he said. "Don't bet on behalf of your members that your credit union isn't big enough to be a target."
  1. Mitigate the risk of service interruptions caused by DDoS.  Although credit unions can't prevent such attacks, they can establish a process to identify them. Monitor bandwidth usage, use firewall logs to determine what is under attack, and employ an intrusion detection system to identify the type of traffic.
  1. Perform due diligence on third-party service providers. Ensure that third parties  such as Internet service providers and Web hosts address website problems caused by the attacks-- and that they have a contingency plan for these.
  1. Be prepared to provide timely and accurate information to members. Have a plan to get the word out. The faster you do so, the better you can control the message and counter any rumors or misconceptions about what is happening.  Monitor social media to find out what is said in cyberspace about any interruption to online services. You may need extra staff or third-party help to work the phones and contact local media to make sure members get correct information.
  1. Check transfers initiated via online banking when an attack occurs. If staff are busy answering calls from members who can't access the website or initiating damange control, they may not notice fraudulent transactions initiated through online banking.  When a DDoS occurs, review online banking transactions. If necessary, delay executing the transfers until their legitimacy is verified.
  1. Have a strong multi-factor authentication method in place for online banking systems. The authentication process should comply with the Federal Financial Institution Examination Council's updated authentication guidance issued in 2011. It expects financial institutions to have a fraud monitoring system  to detect anomalies in initial logins and authentication of members requesting online banking access to system, and in  fund transfers  initiated to others.

Filene colloquium: Monopoly, apps, simulations teach fin lit

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ATLANTA (2/5/13)--Credit unions experimented with the board game Monopoly, mobile applications and simulations in pursuit of ways to improve members' financial literacy at the Filene Research Institute's Experiential Learning Colloquium Thursday in Atlanta. 

"Credit unions have always been committed to financial literacy and members' well-being, but traditional outreach, especially to large groups like students and select employee groups, often falls short," said Ben Rogers, Filene research director. 

Filene brought together five experts to explore the foundations of financial literacy and to help credit unions more effectively use the money they spend reaching out to teach members how to make better financial decisions. The emphasis was on experiential learning. Each speaker presented ideas credit unions can use to help their members learn through doing.

Presenters and topics included:

  • Lou Centini--Experiential Learning Foundations. Centini, professor at the University of Virginia's Darden School of Business, explored the theoretical foundations of experiential learning.
  • Tim Vandenberg--Young Tycoons: A Better Way to Teach Math. Vandenberg, an accomplished Monopoly player, star of the 2010 documentary Under the Boardwalk, and sixth-grade teacher, explained how he uses gamification to bring a record number of disadvantaged students past state standards and teaches them to love math along the way.
  • Jason Young and Ty Moore--Revolutionizing Financial Capability through Mobile Gaming. Mindblown Labs' Young, the founding partner, and Moore, director of business development, discussed how the app revolution makes it easier and more fun to learn financial life skills.
  • Lance Palmer--VITA Sites and Joint Learning. Palmer, associate professor of housing and consumer economics at the University of Georgia, demonstrated how helping credit union members during tax time can benefit volunteers who help, members who learn, and the credit union that serves both.
  • Lois Kitsch--Life Simulation. Kitsch, national program director, National Credit Union Foundation (NCUF), presented The Life Simulation experience, which is designed to help credit union employees, volunteers and leaders understand what it's like to live in a typical low-income family trying to survive from month to month.
The event was presented through support from CO-OP Financial Services and the NCUF.

Maine league meets with state legislative leaders

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PORTLAND, Maine (2/4/13)--The Maine Credit Union League met last week with the president of the Maine Senate, and the speaker of the house in separate meetings at the State House in Augusta, as part of its ongoing efforts to build and strengthen relationships with legislative leaders.

Both meetings were "educational, informational and beneficial," said league President John Murphy (Weekly Update Feb. 1).

"Having an opportunity to sit down with both of the top legislative officers in the Maine House and Senate prior to hearings on any bills or issues we are working on allowed us to outline and communicate our legislative priorities and perspective," Murphy added. "Both leaders appreciated having a discussion on what bills we are working on and may be involved in during the session very early on before the pace of bills and hearings really picks up."

At the meeting with Senate President Justin Alfond, the league highlighted the strength of credit unions and the willingness and readiness of credit unions to lend money. Alfond learned that Maine's credit unions continued to lend throughout the economic crisis and challenges of the past few years.

Alfond recognized the important role that credit unions have in Maine's economy, saying he he would like credit union feedback included in the work of a new Joint Select Committee on Maine's Workforce and Economic Future recently formed by the legislature.

Speaker of the House Mark Eves said he noticed signs at credit unions in his district about having money to lend. That is a good development because it helps consumers and the economy, he added.

On the same day, the league also hosted its final Legislative Breakfast in Augusta. Many legislators from the county attended, and were supportive and spoke proudly of their credit union membership. Every attendee had at least one credit union account.

Two NY CUs serving Ukrainians announce merger

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NEW YORK (2/4/13)--Two credit unions in New York state that serve Ukrainians have decided to merge.

Ukrainian FCU in Rochester, N.Y., with $149.5 million in assets, and Ukrainian Home Dnipro FCU (UHD FCU) in Buffalo, N.Y., with $8.9 million in assets, received regulatory and membership approval to merge, Ukrainian FCU announced on its website.

UHD FCU's single location became a branch of Ukrainian FCU on Jan.1, with the full merger culminating during the next three months.

With the merger, Ukrainian FCU will have seven branches in four states--New York, Massachusetts, California and Oregon.

CU System briefs (02/04/2013)

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  • SAN ANTONIO (2/4/13)--Generations FCU, San Antonio, will host a Small Business Boot Camp, an eight-week series of four classes to provide emerging entrepreneurs with critical information for building a successful business. Classes are from 6 p.m. to 7:30 p.m. on Feb. 7, 21, 28, and March 28. They cover: a Small Business Overview, The Business Plan, Financials and Projections, and Entity Formation. "Small business owners should never have to face the countless hurdles, stress and difficulties by themselves," said David Rodriguez, financial education advocate for Generations FCU. "Our goal is to be their financial advocate, to offer step-by-step assistance throughout the process, and to put them on the right path so they can grow and succeed and in turn our community can grow and succeed" …
  • MADISON, Wis. (2/4/13)--Summit CU, a $1.8 million asset credit union in Madison, Wis., opened a new branch in the city's Memorial High School on Jan. 26. (The Capital Times and Wisconsin State Journal Jan. 31). The student-staffed branch is open only to students and staff during lunch periods. School officials said they hope an on-site credit union will help students learn life skills such as using a checking account and developing financial responsibility. Summit also has an in-school branch at LaFollette High School, which was the first in-school branch in Dane County …
  • CHARLESTON, S.C. (2/4/13)--Latitude 32 CU Friday launched a search for "Lat 32 Crew," a group of community spokespeople in Charleston, S.C. "The goal is not to acquire paid spokespeople for the credit union but rather to give the influencers of our community a voice on the topics they are passionate about," said Latitude 32 President Brad Rustin. The Lat 32 Crew will share with friends and family ways that the credit union has "not only helped them personally, but made an impact in our local community," he said. Surveys indicate that most consumers don't necessarily believe traditional paid advertising any more, said Mark Dudley, vice president of branding and communication for Your Marketing Co., which will handle the project. "We want to encourage members to take ownership of the message of Latitude 32 CU and tell their personal stories on a level that their friends and family understand and relate to," he said. Applications close at 11:59 p.m. March 15 …
  • WICHITA, Kan. (2/4/13)--Catholic Family FCU, based in Wichita, Kan., has chosen Michael Taylor as president/CEO. He has been in the position for about three weeks. Taylor succeeds Marilyn Wells, who retired after 25 years' service with the $27 million asset credit union. Taylor previously was executive vice president and operations manager at Northwest United FCU, a Catholic credit union based in Arvada, Colo. He served there for 10 years. Taylor has 37 years of financial services experience, including 20 in credit unions (Wichita Business Journal Jan. 29) …

Top 10 News Now stories for January

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MADISON, Wis. (2/4/13)--Articles on the National Credit Union Administration's (NCUA) goals for 2013 and banks targeting credit union taxation were the two most-read News Now stories in January.

Here is the Top 10 stories for the month:

10. Senate student loan bill would allow private debt writeoffs

WASHINGTON (1/28/13)--Legislation that would treat privately issued student loans in bankruptcy the same as other types of private debt was introduced by a group of senators last week.

9. CUNA watches for credit card surcharge change impact

WASHINGTON (1/29/13)--New rules that allow retailers to assess "check out" fees or surcharges on credit card purchases took effect in many states on Jan. 27, and the Credit Union National Association is watching to assess how these rules could impact credit unions.

8. CUs poised to nab bigger share of improved housing market

MADISON, Wis. (1/24/13)--Credit unions are poised to capture an increased share of an improved housing market in 2013--and establish themselves as the primary financial institution of choice for American consumers.

7. Pinterest a flop in banking, but not at CUs

MADISON, Wis. (1/31/13)--Although Pinterest blew into the financial industry with much hype in early 2012, it has mostly been a flop for banks. Credit unions, however, have seen success with it, according to financialbrand.com.

6. Regulators look at what responsibilities social media use brings for FIs

WASHINGTON (1/23/13)--The National Credit Union Administration and bank regulators have asked for comment as they prepare guidelines for social media use by financial institutions.

5. Operating fee invoices will come out in March

ALEXANDRIA, Va. (1/29/13)--Federal credit union operating fees is the topic of the National Credit Union Administration's most recent Letter to Federal Credit Unions (13-FCU-01); the letter reminds of the agency's action in November that increased the fee for credit unions with more than $1 million by 0.24% and eliminated the fees for those with assets less than or equal to $1 million.

4. CUNA exam survey sees strong CU response

WASHINGTON (1/28/13)--Well over 1,000 credit unions sent in their federal and state examination stories to the Credit Union National Association in response to CUNA's recent survey request.

3. CFPB delays remittance rule effective date

WASHINGTON (1/22/13)--The Consumer Financial Protection Bureau is delaying the effective date of its remittance rule that was set to go into effect Feb. 7.

2. ABA targets tax exemption for 2013, CUNA primed to protect

WASHINGTON (1/25/13)--As if there were any doubts about what the banks are up to this year, an American Bankers Association  lobbyist was quoted today by Bloomberg BNA  that a "chief" goal for banks in 2013 is to push for legislation to change or eliminate the credit union federal tax status.

1. NCUA letter to CUs cites 2013 exam goals

ALEXANDRIA, Va. (1/31/13)--Increased clarity in its guidance to it examiners and more consistency in its examination practices is a key supervisory focus of the National Credit Union Administration this year, said NCUA Chairman Debbie Matz in a Letter to Federally Insured Credit Unions released today.

VolCorp's financials impacted by merger with WVa Corporate

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NASHVILLE, Tenn. (2/4/13)--The Volunteer Corporate CU Friday released its unaudited financial results for the year ended Dec. 31, noting that while strong, the results were impacted by last year's merger with West Virginia Corporate CU.

"VolCorp's financial condition remained strong. VolCorp continued to fulfill its mission by providing favorably priced services to its member credit unions while paying a competitive dividend to its member/owners," said the corporate in a press release. It experienced declines in net income, return on average assets, assets, and net unrealized losses.

Net income for 2012 totaled $2.1 million, with a return on average assets (ROA) of 0.15%. Both are down from 2011's $2.6 million and ROA of 0.22%.

"The most significant contributor to the decrease in net income for 2012 was non-recurring charges related to the merger with West Virginia Corporate CU," said VolCorp's press release.

The National Credit Union Administration approved the merger of the two corporates in a closed board meeting on Jan. 26, 2012 (News Now Feb. 2, 2012).

Other results from the report:

  • Member/owners were paid cash dividends totaling $597,526, representing a 28% payout of VolCorp's net income and a 1% return on their perpetual contributed capital.
  • Assets on Dec. 31 totaled $1.18 billion, a 3% or $33 million decrease from year-end 2011, said VolCorp. Total assets for the year averaged $1.32 billion, an increase of $103 million, or 8% from 2011.
  • Capital adequacy continued to significantly exceed all minimum regulatory requirements, VolCorp said. Total capital, which included $9.3 million in total retained earnings, stood on Dec. 31 at $70.4 million or 5.33% of total assets.
  • Net unrealized losses on securities totaled $183,348--a decline of  91% or $1.966 million from year-end 2011.

MCUE: CU asset, loan growth rates up in 2012 from 2011

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MADISON, Wis. (2/4/13)--Credit union assets and loans grew at a higher rate during 2012 than in 2011, according to a Credit Union National Association economist's analysis of December's monthly sample of credit unions.

"Credit union assets grew 6.5% in 2012, up from 5.1% in 2011, as members rebuilt their personal balance sheets," Steve Rick, CUNA senior economist, told News Now. Year-over-year, "most of the savings growth came in the form of liquid deposits like share-draft and regular-share accounts, which increased 13.2% and 12.5%, respectively.  Record-low interest rates kept share certificate balance growth in negative territory, falling 2.4% over the year."

Monthly increases saw credit union loans outstanding up 0.5% in December, over November. The growth was led by credit cards (2.4%), fixed-rate first mortgages (2%), home equity loans (1%), and new- and used-auto loans, which both grew 0.8%, according to CUNA's Monthly Credit Union Estimates (MCUE). Adjustable-rate mortgages declined 1.1%. Credit union loans totaled $613.1 billion, compared with $587 billion in December 2011.

"Loans staged a modest comeback in 2012, growing 4.5%, up from the 1.1% pace set in 2011," Rick said. "We expect loan growth to maintain this acceleration in 2013, with growth over 5%." 

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Credit union savings balances grew 0.1% in December from November, led by regular shares (0.8%), the MCUE said. Money market accounts and individual retirement accounts each rose 0.4%, while share drafts and one-year certificates declined 1.4% and 0.2%, respectively. Credit union savings tallied $899.5 billion in December--or $54.2 billion more than the $845.3 billion in December 2011.

Regarding asset quality, credit unions' 60-plus-day delinquency rate remained at 1.1% for the past three months.

"Credit quality showed dramatic improvement in 2012 as loan delinquency rates fell from 1.6% in December 2011, to 1.1% in December 2012," Rick said. "With expectations for an improving labor market in 2013, we expect delinquency rates to fall to 0.9%, slightly above the long-run average of 0.8%. Falling loan-loss provisions should keep credit union earnings around 0.9% in 2013." 

The loan-to-savings ratio remained at 68% during December.

The movement's overall capital-to-asset ratio is 10.4%. The total dollar amount of capital is $109 billion.

More states propose laws banning surcharges

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WASHINGTON (2/4/13)--Eight states are introducing or considering state legislation that would bar merchants from charging consumers "check out" fees or surcharges on credit card transactions. The surcharges are allowed by an antitrust class action settlement between Visa and MasterCard and a group of merchants.

The Credit Union National Association and the state leagues are monitoring these proposals to see how the rules would impact credit unions.

If the measures pass, the states would join 10 other states already exempt from the $7.2 billion July settlement's provision that, as of Jan. 27, allows merchants in the U.S. and U.S. territories to impose transaction surcharges of between 1.5% and 4% of the cost of the purchase on consumers who use a credit card. (The checkout fee must be equal to what the merchant pays to accept the card, which is typically 1.5% to 3% in the U.S.--not to exceed 4%.)

Bills have been introduced in Hawaii, Illinois, Mississippi, New Jersey and Rhode Island. Legislators in two other states, Pennsylvania and West Virginia, say they are drafting a bill, and there is interest in Vermont as well.

For example, in New Jersey, S-2533, sponsored by Democratic Sens. Jim Whelan, Bob Gordon and Nia H. Gill, would prohibit retailers from imposing a surcharge on those paying with a credit card. Retailers who do so would be subjected to penalties up to $10,000 for the first offense and up to $2,000 for each subsequent offense.  Calling the surcharges "an undue burden on New Jersey families," Whelan noted that nearly one-fourth of all purchases are made with credit cards and a surcharge could  "negatively affect New Jersey's growing consumer confidence" (BankCreditNews.com Feb. 1 and PolitickerNJ.com Jan. 30).

Last week saw a spike in national media reporting on the surcharges, which garnered negative attention from consumers on social media sites and comments to news stories.

Although not all merchants will choose to surcharge, the change affects credit union members and all other consumers using credit cards and could impact financial institutions as a result. The surcharge applies to Visa and MasterCard credit cards only.  Debit, prepaid cards and other company cards such as American Express are not included in the agreement.

The settlement is being opposed in court by other groups of merchants. (See related story in today's News Now, "Appeals court won't review antitrust deal until final lower court decision.")

The original 10 states with laws already on the books outlawing surcharges are: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

Topline FCU effort prompts $800K+ in grants for community

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ST. PAUL, Minn. (2/4/13)--TopLine FCU in Maple Grove, Minn., was recognized as an important community partner when Brooklyn Park, Minn., received a $294,000 Affordable Housing Program grant for 2013 from the Federal Home Loan Bank (FHLB).

Click to view larger image TopLine FCU, based in Maple Gove, Minn., joined the city of Brooklyn Park, Minn., Jan. 28, in announcing the city's receipt of a $294,000 Affordable Housing Program 2013 grant. Pictured, from left: TopLine President/CEO Harry Carter, Brooklyn Park Mayor Jeff Lunde, U.S Rep. Erik Paulsen (R-Minn.) and a Federal Home Loan Bank representative. (Photo provided by the Minnesota Credit Union Network)

Topline's involvement was noted during a ceremony on Jan. 28 in Des Moines, Iowa. The new grant brings the total given to Brooklyn Park families through the FHLB-funded program to more than $800,000.

"As one of the city's small businesses, we are proud to be part of this strategy to help individuals fulfill their dreams of owning and maintaining a home," said TopLine President/Harry Carter.

The grant was made available to the city partly due to TopLine FCU's member/owner status with FHLB, and the $326 million asset TopLine's long-standing relationship with Brooklyn Park. The grant follows a 2011 grant of more than $500,000--with which TopLine also was involved.

By working with credit unions and other community institutions, the FHLB provides stable and secure funding to support individuals' dreams of homeownership, said a press releases from the Minnesota Credit Union Network.

The funds come directly from FHLB without using taxpayer dollars and represent 10% of the bank's net earnings. The money is distributed based on a competitive grant process involving communities nationwide. The grants help low-income homeowners maintain their homes, improve energy efficiency and make repairs.

During the ceremony, Carter joined Brooklyn Park Mayor Jeff Lunde and U.S. Rep. Erik Paulsen (R-Minn.) in praising the grant program and its impact on the community. Lunde--noting that this is the second time Brooklyn Park has succeeded with a competitive grant--emphasized that the grants provide crucial funding to support the city's housing strategy to help citizens obtain and retain home ownership.

Restaurant owner sentenced in St Paul Croatian FCU fraud

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EAST LAKE, Ohio (2/4/13)--An Ohio restaurateur was sentenced  Tuesday to two years in prison and ordered to pay $1.6 million in restitution for his involvement with a loan fraud scheme that led to the failure of East Lake, Ohio-based St. Paul Croatian FCU in 2010.

Bujar "Benny" Sejdic, also known by Burjar Sejdui, 33, had pleaded guilty in October to financial institution fraud, giving gifts for procuring loans and three counts of money laundering (WebTimes.com Jan. 30).

Court documents said that from January 2004 to March 2010, Sejdic received 25 fraudulent loans totaling more than $1.6 million from the credit union. The loans were made under false pretenses, and many loans were made after he already had defaulted on previous loans from the credit union.

In 2009-2010, Sejdic allegedly wired $240,000 from his account at the credit union to an account in Belgrade, Serbia.

Sejdic allegedly gave the credit union's CEO, Anthony Raguz, one check and gifts totaling $40,000 to obtain the loans. 

Raguz is serving a 14-year prison term for accepting bribes, kickbacks and gifts in exchange for loans. He allegedly issued more than 1,000 fraudulent loans totaling more than $70 million to roughly 300 accountholders and accepted more than $1 million in bribes (News Now Nov. 27).

So far, 24 people have been indicted on charges related to the frauds.

The credit union was closed in spring 2010 by the National Credit Union Administration. The frauds cost the National Credit Union Share Insurance Fund more than $170 million.

Appeals court won't review antitrust deal until final lower court decision

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NEW YORK (2/4/13)--A U.S. appellate court in New York Thursday denied a motion to reconsider a lower court's preliminary approval of the $7.5 billion interchange fee settlement that MasterCard and Visa signed in July in an antitrust lawsuit filed against them by merchants.

Instead, the U.S. Court of Appeals for the Second Circuit told the group filing the motion they must refile their objections to the settlement after the lower court has made a final decision on the matter.

Credit unions are not involved in the lawsuit, but the landmark settlement's terms would affect them and other financial institutions, said the Credit Union National Association.

The settlement would require a reduced interchange rate fee of 10 basis points for an eight month period, likely beginning mid-2013 and would apply to all card issuers. A few credit unions with active card programs would lose about $50 million in revenues or about 0.5 basis points on their total assets, CUNA said. The interchange revenue enables credit unions to provide card services to members; a temporary reduction in that revenue would not be passed on to consumers by merchants, CUNA said.

The motion to reconsider was brought by a group of merchants that oppose the settlement after the appellate court in December denied their earlier appeal of the preliminary approval by U.S. District Judge John Gleeson.  They include merchants such as Home Depot and organizations such as the National Association of Convenience Stores, National Cooperative Grocers Association, National Grocers Association, the National Restaurant Association, D'Agostino Supermarkets Inc., and more.

"We construe the motion for reconsideration as a motion to review a single-judge order," said the appellate court's order. "Upon due consideration, it is hereby ordered that the motion is denied. Any challenge to the final settlement agreement must be brought in a new notice of appeal. A new notice of appeal must be filed should any of the parties choose to appeal from the district court's final approval of the settlement agreement."

CO-OP's new venture expands cooperative model vision

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RANCHO CUCAMONGA, Calif. (2/4/13)--With the introduction of CO-OP Sprig last week, CO-OP Financial Services took what it believes is a major step toward creating the virtual credit union branch.

What was once a "pie-in-the-sky" idea--the ability to make transfers from any account to anyone from a mobile device--is fast becoming a reality, especially for consumers who are credit union members.

CO-OP Sprig, CO-OP's version of the virtual branch, is built around credit unions' shared branching model.

"Because of how shared branching is built, we have the ability to move funds between credit unions," said Stan Hollen, CO-OP Financial Service president/CEO. "If you have accounts at different credit unions and those credit unions are connected to the switch, you can move money. If you have the need to make a payment to a friend or neighbor or co-worker, you can make that transfer."

The model offers credit unions a strategic advantage over their banking counterparts in an area of financial services that is primed for growth, according to Hollen.

"There's a lot going on in the payments arena," he said. "It's accelerating. But this is unique. It is something that is special to the credit union industry and it's because of the movement building shared branching."

CO-OP Sprig is the first phase in CO-OP's multi-phase plan to expand the product's person-to-person features and network range into a true digital wallet and beyond, and to make it perform as a virtual credit union branch. In its initial phase, CO-OP Sprig is an in-network solution, allowing members to make transfers between, or payments to, any of their accounts.

Transactions can include savings, checking or loan accounts residing at any credit union participating in CO-OP Shared Branching or connected to CO-OP Connect, the switch that enables CO-OP Sprig. 

In-network "me-to-me" and "me-to-you" payments are supported in this release of CO-OP Sprig, and remote deposit capture via Apple iPhone.

Future phases of the service will include out-of-network "me-to-anyone" payments, a point-of-sale option and remote deposit via Android-enabled smartphones.

Me-to-anyone payments likely will be enabled with a cell phone number or an e-mail address, Hollen said.

Using CO-OP Sprig, credit union members transfer money from their deposit accounts based on real-time good-funds-availability model, rather than the delayed automated clearing house model. Members can make transfers between their accounts and immediately verify funds are available in the destination account.

"It's no different using your smart phone than using your PC at home," Hollen said. "Most credit unions have apps that will lead you straight that credit union's online banking system. While it's called mobile, it's really smart phone access to the Internet."

And the ability of smart phones to connect to the Internet will drive payments growth, including the development of such applications as CO-OP Sprig, Hollen said.

Irish league offers reward after detective gunned down outside CU

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DUBLIN, Ire. (2/1/13)--The Irish League of Credit Unions is offering more than $67,613 (U.S. dollars) as a reward for information leading to the arrest and prosecution of those who gunned down a detective outside Lordship CU in Bellurgan, Ire., during a robbery.

The league said it was inundated with calls from credit unions offering support to the credit union and the gardai, the term used for the local police (Independent Jan. 30 and Irish Times Jan 28).

Detective Garda Adrian Donohoe, 41, a father of two, was shot in the head by five gang members who escaped in a stolen Volkswagen Passat.

He was one of two detectives on escort duty when the robbery occurred.  His colleague, Detective Garda Joe Ryan was held at gunpoint while the gang stole more than $5,409. Donohoe was not supposed to be on duty that day and was substituting for a colleague (BBC News Jan. 30).

The gardai believe the gang had supporters aiding them and that they may be the same gang that robbed the credit union a year and a half ago.  The gardai found the stolen getaway card across the border, where it had been set on fire.

CU System briefs (02/01/2013)

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  • SANTA ROSA, Calif. (2/1/13)--Community First CU reported a record asset increase for 2012, driven by consumers dedicated to keeping their money local, the credit union said. The credit union reported a surge in assets of 15.8% to $150.6 million. Membership rose 18.9% to 15,627 members. The Santa Rosa, Calif.-based credit union also reported double-digit increases in deposits and checking accounts for the second consecutive year. Real estate lending jumped 94.8% to $60 million. Auto loans surged about 28% to $20.7 million. Net revenue of $1.3 million was the second best in the 52-year history of the credit union (Press Democrat Jan. 29) …
  • NORTH HIGHLANDS, Calif. (2/1/13)--SAFE CU has promoted Dave Roughton to president/chief operating officer.  Roughton previously served as executive vice president at the $1.871 billion asset, North Highlands, Calif.-based credit union. SAFE CU is expanding its executive structure amid anticipated continued growth. The appointment means CEO Henry Wirz can focus on SAFE's development strategies, long-term business plan and working more closely with the credit union's board. Roughton has been with SAFE nearly 20 years and previously worked as SAFE's external certified public accountant (sacbee.com Jan. 30) …
  • MARLBOROUGH, Mass. (2/1/13)--Marlborough, Mass.-based St. Mary's CU has appointed James "Jim" Garvey as president/CEO, effective Feb. 19. Garvey was president/CEO of Borel Private Bank, San Mateo, Calif., and Charter Private Bank, Seattle. Both are subsidiaries of Boston Private Financial Holdings. Garvey also led Flagship Bank and Trust in Worcester from 2001 to 2009, when the bank was acquired, and served at Safety Fund National Bank in Fitchburg and Shawmut Bank. He will succeed Thomas H. Wellen, who has served in an interim position since June. (Community Advocate Jan. 29) …
  • UTICA, N.Y. (2/1/13)--Philip G. Vanno Jr. of Utica, N.Y., died Tuesday at the age of 61 after a battle with cancer. He was a board member and held volunteer leadership positions at the $1.1 billion asset AmeriCU CU, based in Rome, N.Y. Vanno worked most recently as a city labor relations specialist, after retiring after 30 years with Business and Technology Park and Griffiss Air Force Base. He was active in the community and was a part-time substitute teacher and teaching assistant for the Utica School District (Observer-Dispatch Jan. 30) …

CUs thank Wis mayor for small-biz credit advocacy

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Click to view larger image Racine Mayor John Dickert was honored at the Wisconsin Credit Union League's annual Government Affairs Conference for helping to pass a resolution at the U.S. Conference of Mayors in support of federal legislation that would ensure small businesses can access needed loans through credit unions. Pictured, from left, are: Brett Thompson, president /CEO, Wisconsin Credit Union League; Dickert; Jack Gill, chair, Wisconsin Credit Union League Government Affairs Committee and president/CEO, First Community CU, Beloit, Wis. (Photo provided by the Wisconsin Credit Union League)
PEWAUKEE, Wis. (2/1/13)--John Dickert, mayor of Racine, Wis., was honored for his small-business advocacy efforts by the Wisconsin Credit Union League's annual Government Affairs Conference in Madison, Wis.

He was recognized in front of 230 attendees for helping to pass a resolution at the U.S. Conference of Mayors in support of federal legislation that would ensure small businesses can access needed loans through credit unions.

"Mayor Dickert understands that credit unions can fill today's huge void for business credit because they have billions available to lend, a 100-year history of making business loans safely, the support of federal regulators and the support of 80% of Wisconsin voters who, like ForbesMagazine, see this as an absolute no-brainer," said Brett Thompson, league president/CEO.

A plaque was presented to Dickert on behalf of the 95 million consumers nationwide who own credit unions, thanking him and acknowledging his help in adding a bipartisan list of 187 mayors to the resolution supporting the Credit Union Small Business Jobs Bill (S.B. 2231/H.R. 1418). 

The legislation, pushed by the Credit Union National Association and credit unions nationwide, was introduced in the previous 112th Congress. It would have increased the ability of credit unions to extend $13 billion in loans to small businesses at no cost to taxpayers. In the first year alone, it would have generated 157,000 new jobs nationwide. In Wisconsin, it would have provided $458 million in new credit and created nearly 5,000 jobs.

A similar version of the bill likely will be reintroduced in the current 113th Congress and is one of CUNA's top priorities for 2013.

Kessler Foundation grant to train disabled to work in CUs

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WEST ORANGE, N.J. (2/1/13)--A $484,452 grant from the non-profit Kessler Foundation to the National Disability Institute (NDI) will provide employment opportunities for people with disabilities in New York credit unions, with support from the Credit Union Association of New York.

The project will fund the "BEST (Building Economic Strength Together) Employees N.Y." initiative--an enhanced version of the 2009 Kessler Foundation-funded pilot project, "BEST Employees in N.J."

Individuals with disabilities will receive training in providing financial services and be given on-the-job training and internships.

CUANY will screen and match applicants with available positions and provide ongoing training to build sustainability of the program.

"We are looking forward to being part of the BEST Employees N.Y. initiative, which will provide training internships and job placement assistance within the financial services community to individuals with varying disabilities," said William J. Mellin, CUANY president/CEO. 

Other elements of the project include:

  • A comprehensive assessment tool to judge participants' performance;
  • Credit union-ready employee training and certification so employees understand how to work with individuals with disabilities; and
  • Collaboration with vendors, and training and technical assistance for credit unions.
The Signature Employment Grant is part of more than $2.17 million in grants distributed by Kessler Foundation to improve employment and job training options for Americans with disabilities.

In the two-year grant cycle, BEST Employees N.Y. will train and place 72 people with disabilities.

The project will provide opportunities for replication nationwide.

BEST Employees N.Y. is a collaborative effort of NDI, the Federation of Community Development Credit Unions, CUANY, the New York Office of Adult Career and Continuing Education Services-Vocational Rehabilitation, the State Department of Labor's Disability Employment Initiative and Syracuse University's Burton Blatt Institute.

Governor praises CUs for service to Minnesotans

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ST.  PAUL, Minn. (2/1/13)--Minnesota Gov. Mark Dayton this week joined other state legislators and officials in praising the services and support credit unions provide consumers. Dayton also stressed that his proposal for tax reform does not involve credit unions' tax exemption, said the Minnesota Credit Union Network.

Click to view larger imageMinnesota Gov. Mark Dayton, praising credit unions, addresses the crowd, during the Minnesota Credit Union Network's Credit Union Day at the Capitol in St. Paul. (Photo provide by the Minnesota Credit Union Network)
Defending the credit union tax exemption is the Credit Union National Association's No. 1 priority this year, CUNA President/CEO Bill Cheney said Jan. 25 in The Cheney Report. Several state credit union leagues such as Ohio and Oregon also are monitoring tax reform proposals in their states. 

Dayton said tax reform in the state won't involve credit unions because they provide important services, and he won't tamper with that.

"I have special regard for those who serve their members and their needs, for those who provide savings back to their customers. I thank you for that," said Dayton, speaking to more than 150 credit union representatives at MnCUN's annual political advocacy event, Tuesday in St. Paul. Credit union leaders also heard the governor's plans for the budget in the next biennium.

Financial literacy also was a hot topic at Credit Union Day, MnCUN said. Dayton and Minnesota Department of Commerce Commissioner Mike Rothman touched on its importance. Rothman told attendees he believes credit unions and the state can work together to make big strides in the financial literacy realm.

"We have a common goal--that people, from kindergarten to retirement, have the lifetime skills to attain financial stability," Rothman said. 

In visits with their local legislators, credit union leaders emphasized the financial literacy and credit union messages. They touted the avenues used to help members with financial education, including in-school, student-run credit union branches--HomeTown CU in Owatonna and St. Paul (Minn.) FCU.

Following the theme of this year's Credit Union Day, "Minnesota Credit Unions: A Trusted Partner," attendees talked with legislators about why more consumers are choosing credit unions--with trust being a top factor.

Participants with MnCUN's young professionals group The Crew--for new and mid-level credit union employees 35 and younger--learned how to advocate for credit unions and address issues in visits with elected officials.

Pennsylvania's McCormack to retire at end of year

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HARRISBURG, Pa. (2/1/13)--Longtime Pennsylvania Credit Union Association President/CEO Jim McCormack will retire on Dec. 31, announced PCUA's board Thursday.

However, McCormack will remain as a consultant to the association's board of directors through November 2014, said PCUA board Chairman Michael Kaczenski.

McCormack's leadership has earned praise from the Credit Union National Association.

"Jim has contributed immeasurably to the growth and success of the credit union movement during his more than 40 years of service," said CUNA President/CEO Bill Cheney.

"I've known Jim for most of my own career with credit unions, and I have always had enormous respect for Jim's leadership ability, his innovative thinking--the league's iBelong public awareness campaign is just one great example--and his extreme passion for the cause of credit unions," Cheney added.

"During my 26 years in the credit union movement, and my tenure on the PCUA board, Jim has exemplified the qualities of a true credit union leader," PCUA's Kaczenski said. "He is a visionary whose commitment to cooperation, advocacy and growth of credit unions around the state, country and globe has made the movement stronger for all who are in it now and will be part of it tomorrow.

"We will miss what Jim has brought to us; yet, we know that he will be an ongoing resource and promoter of the credit union movement in his retirement," said Kaczenski.

A nationwide search for McCormack's successor is being conducted by credit union consulting firm Dollar Associates LLC of Birmingham, Ala.

"It's been a privilege to serve this board and Pennsylvania's credit union movement for the last 32 years," McCormack said.

He began his credit union movement career in 1971. Before joining PCUA, he served in various positions with CUNA Mutual Group, both in Pittsburgh and its corporate headquarters in Madison, Wis. In 2009, he was presented the Eugene H. Farley League Leadership Award by the American Association of Credit Union Leagues.

McCormick also served in the past on the boards of CUNA and the National Credit Union Foundation. He is a native of Scranton, Pa.

Summit CU's Inspiration Branch like sets from a theatre

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MADISON, Wis. (2/1/13)--A new "Inspiration Branch" introduced by Madison, Wis.-based Summit CU provides members with theatre-type sets that portray financial goals such as education, home ownership and travel.

The Fitchburg, Wis., branch of the $1.86 billion asset credit union features a tropical scene in the lobby fitted with a red-striped beach umbrella, two lawn chairs and a 12-foot sailboat (The Wisconsin State Journal Jan. 31).  

Other features include a model of the Leaning Tower of Pisa, and an airplane facade that leads to a children's play area--complete with real airplane seats.

Members conduct business at an open, concierge-type counter, with a mock-up of one of York, England's, historic streets in front of several meeting rooms, the newspaper said. 

The colorful, imaginative branch matches the credit union's philosophy, Kim Sponem, Summit president/CEO, told the paper, adding that the credit union wanted to have a place that reminds people of their aspirations and dreams.

For instance, some members may recall that they wanted to travel to a specific location in the world when they were a child, or the branch might trigger members to create new desires or plans, Sponem added.

As with theatre production sets, many pieces of the Inspiration Branch are removable. If the concept is taken to other credit union branch locations, the sets can be interchanged or added, Sponem told the paper.

Card companies report rising fraud losses

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MADISON, Wis. (2/1/13)--Credit card issuers are reporting a spike in fraud losses for 2012, and U.S. issuers--including credit unions--are the weakest link in the world in terms of preventing these losses, said industry experts.

That's because U.S. institutions, unlike their counterparts in Europe, haven't converted to the Europay MasterCard Visa (EMV) security chip and PIN technology, considered the strongest defense against credit card fraud losses.

Credit unions and other card issuers who delay adopting the EMV will face a rapidly increasing risk of loss as fraud migrates from countries deploying the EMV protection to countries with less stringent standards--such as the U.S., said Mark Rennie Davis, a principal at MasterCard Advisors, the professional arm of MasterCard Worldwide.

In a column he wrote about the topic in Banktech.com (Jan. 25), Davis estimated that a  fictitious bank with five million cardholders and average market characteristics could lose as much as $25 million if EMV migration is delayed until 2015, instead of starting this year.

Although the cost of emigration is estimated at between $5 billion and $13 billion, the risks associated with delaying its deployment are growing, he said. He predicted that counterfeit fraud in the U.S. will rise as EMV chip cards continue to replace magstripe-only cards elsewhere. As counterfeit fraud increases in the U.S., it will focus on issuers who have not migrated to EMV, Davis said.

Also, cross-border revenue will decline because fewer merchants in EMV-mature countries accept cards that don't comply with the EMV standards, he said.

Credit card companies are already reporting increases in fraud losses, after a decline for several years, said American Banker (Jan. 29).  Discover Financial Services reported losses for fiscal 2012 at $93 million, a 70% hike from two years earlier. That figure is adjusted for rising transaction volumes.  The publication also reported Capital One Financial had experienced a 20% increase in fraud losses adjusted for volume from 2010 to 2011--the latest data available.

The major U.S. card brands have said they will require most U.S. merchants to use terminals that can handle EMV cards by October 2015.

Nominations open for WOCCU Distinguished Service Award

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MADISON, Wis. (2/1/13)--Nominations are due March 11 for the World Council of Credit Unions' 2013 Distinguished Service Award (DSA).

World Council of Credit Unions is calling for 2013 Distinguished Service Award nominations. Awards will be presented at the World Credit Union Conference, July 14-17 in Ottawa, Canada. Nominations are due March 11. (Photo provided by the World Council of Credit Unions.)
The DSA, which honors individuals and organizations that have provided outstanding service to the global credit union movement, will be presented at the World Credit Union Conference, July 14-17 in Ottawa, Canada. The award is the international credit union system's highest honor.

"The Distinguished Service Award recognizes those who have dedicated their time, resources and attention to improving credit unions on an international scale," said Brian Branch, WOCCU president/CEO. "Their important work has positively impacted many members and families throughout the world who otherwise may not have had the life-changing opportunities their credit unions were able to provide."

Individuals and organizations that have furthered WOCCU's vision of "building a global community" through their activities and achievements are eligible for nomination.

Individual recipients may be WOCCU member-organization officers, directors or representatives; international credit union pioneers; field technicians; or individuals whose actions have benefitted global credit union development.

Institutional recipients may be organizations or agencies that have provided financial or technical assistance to develop international credit union movements and their service infrastructures during an extended period.

The DSA is not an annual award; it is presented based on the achievements and worthiness of candidates according to the award committee's review. WOCCU presents up to one institutional and three individual awards in a single year.