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Rejected for home loans Try CU says Conn. league

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SEATTLE (3/13/09)--About half of all mortgage applicants are being turned down, according to the Mortgage Bankers Association, and acceptance rates on refinancings have dropped 10 percentage points. But consumers who are members of credit unions should check with their credit union, the Credit Union League of Connecticut said. In an article in The Seattle Times (March 8), Marilyn Kennedy Malia of Bankrate.com wrote about the dilemma. Tony Emerson, president of the Credit Union League of Connecticut, noted that members can look for loans at their credit unions. Credit unions may be more forgiving, and some credit unions judge loan eligibility based on the unique relationship they have with their members, he said. He noted many offer memberships to employees of companies and would know more about a member's job stability, he said. For the entire article, use the link.

Coastway bank-charter vote scheduled

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CRANSTON, R.I. (3/13/09)--Members of Cranston, R.I.-based Coastway CU will vote April 29 on whether to change the credit union's charter to a mutual savings bank charter. About 21,000 members in good standing as of March 31 at the $303.5 million asset credit union will be eligible to vote at the meeting, which begins at 7 p.m. at Crown Plaza Hotel. They also can vote at Coastway's seven branches or by mail after ballots are distributed. Despite the economy's effect on banks, Coastway President/CEO Bill White told the The Warwick Beacon (March 10) the conversion is still being planned. White said the credit union has hit the 12.25% of assets cap on its business loans and a bank charter would eliminate the cap. He said he knows of no organized group of members opposing the conversion but acknowledge some will be opposed to the change.

Pa. payday alternative saves consumers big bucks

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HARRISBURG, Pa. (3/13/09)--Pennsylvania's Credit Union Better Choice payday-loan-alternative program has saved borrowers nearly $5 million in interest and fees, according to the Pennsylvania Credit Union Association (PCUA). The payday lending alternative was developed in conjunction with the Pennsylvania Treasury Department. The state's consumers saved an average 80 cents in loan fees and costs for every dollar borrowed through the program rather than through a typical payday loan. That translates to more than $4.9 million. Also, borrowers placed $686,155 into savings accounts Since the program's inception in October 2006, roughly 79 credit unions with 211 locations have agreed to offer the loans, with additional participants continuing to sign on, said PCUA. Participating credit unions made nearly 15,000 loans totaling $6.8 million in volume since the program started. The average loan amount was $466.33. During the six months ending Dec. 31, 2008, about 72 credit unions reported 5,205 loans totaling more than $2,388,278. "As many Pennsylvanians feel squeezed in our rough economy, the ongoing usage of the Credit Union Better Choice program indicates that consumers need access to low-cost short-term loans," said Jim McCormack, PCUA president/CEO. "I'm pleased that they can turn to a credit union to fulfill that need in a fairly priced way." "Pennsylvania's families feel the effects of the recession and should have quick access to reasonable and fair loans," said Treasurer Rob McCord. "In this new era of responsibility, consumers should be able to use loan products that will help them make ends meet--and also pay dividends into the future. Better Choice does just that by pairing short-term loans with savings and financial education." A typical $500 payday loan costs consumers $15 for every $100 borrowed for two weeks, or about $450 over 90 days. A $500 Better Choice loan costs about $42.50 for the same 90 days, and at the end of the loan term, consumers also have $50 in a savings account. The program also provides financial education.

NACUSO Collaboration will help CUs overcome economy

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NEWPORT BEACH, Calif. (3/13/09)--Credit union service organizations (CUSOs) should collaborate with credit unions to help them overcome economic difficulties afflicting the country, said Thomas C. Davis, president/CEO of the National Association of Credit Union Service Organizations (NACUSO). This topic will be discussed at NACUSO’s 2009 Annual Conference to be held May 3-6 in Las Vegas. “The bad news is that credit unions are being assessed 62 basis points as part of the corporate bailout plan,” Davis said. “The good news is that credit union and CUSO executives have the power to make changes that will enhance their ability to overcome the difficult economic issues facing their credit unions. “Through collaborations and partnering with other credit unions, they can make back the 62 basis points and more,” he added. “Collaborations are currently creating salable platforms, earning millions of dollars in non-interest income, and saving millions of dollars in operational expense for credit unions.” Davis referenced data from Callahan & Associates’ peer-to-peer financial analysis, to emphasize the positive results of collaboration in the credit union industry. The data compares the five-year average annual performance of credit unions with an investment in a multi-owned CUSO versus those with no investment in it. Credit unions invested in a multi-owned CUSO had 7.04% asset growth, 9.51% loan growth, and 2.82% member growth. Credit unions with no multi-owned CUSO had 4.50% asset growth, 6.35% loan growth, and 0.82% member growth. “Although you cannot [infer] cause and effect from these data, the message is clear,” Davis said. “Credit unions with investments in multi-owned CUSOs perform better than credit unions that do not participate in multi-owned CUSOs. Credit union collaborations also provide additional resource and expertise, spread risk and capital investment in business ventures, and ultimately drive more value back to credit union members.”

IPost-DispatchI applauds CU auto lending

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ST. LOUIS (3/13/09)--The St. Louis Post-Dispatch is giving Missouri credit unions kudos for their efforts to help consumers buy vehicles at a time when other financial institutions are making it harder to access credit. The newspaper published an article Sunday that touted credit unions as a solution to the credit crunch (The Missouri difference March 11). “Not everyone tightened lending,” the article said. “Credit unions suddenly saw competition contract after some big banks and automakers’ finance companies cut back.” “The other sources of lending aren't there,” Amy McLard, vice president of public/legislative affairs for the Missouri Credit Union Association, told the paper. “People are turning to credit unions, and we have money to lend.” First Community CU, Chesterfield, issued 25% more auto loans in the second half of 2008 compared with the first half, Laura Alfeldt, the credit union’s vice president of marketing, told the paper. January--generally a slow time--was the top month for First Community’s auto loans in the past five years, she added. Credit Union Lending Systems, a St. Louis County-based intermediary between 31 credit unions statewide and 270 new- and used-auto dealerships, told the paper that January was its best month since the company’s inception in May 2000. Credit unions have significantly helped Jim Butler Auto Plaza get through the credit crunch, which began in August, Kyle Kaverman, general manager for the St. Louis-based used-vehicle dealership, told the paper.

WalletPop features CUs fin ed program

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DENVER, Colo. (3/13/09)--WalletPop, AOL's financial advice website, on Monday began showcasing a free financial education program offered through some credit unions. The program, FoolProof, was featured on eight WalletPop home pages, all directing readers to local credit unions. It aims to "get across the lessons of financial security without any strings attached," said AOL. AOL's promo segment features consumer advocate Remar Sutton, former Credit Union Magazinecolumnist on auto lending and author of Don't Get Taken Every Time. Maryland and District of Columbia Credit Union Association launched the tool on Feb. 25, and The Colorado and Wyoming Credit Union Associations and their service corporation, Credit Union Strategic Partners, also offer the program.

Idaho TV station reports CUs help recovery

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POCATELLO, Idaho (3/13/09)--Credit unions plan to help lead the U.S. economic recovery, said Alan Cameron, president of the Idaho Credit Union League, in a story reported by a local NBC affiliate. “We stand to ready to make loans,” Cameron said, speaking at Potelco United CU’s annual membership meeting Wednesday. “We have the equity, the network, the stability and the desire to help our members to do a better job financially. In helping our members do better financially, we help our community in doing better financially” (KPVI.com March 11). Credit unions are part of the larger economic scenario, and are feeling some strain because members are taking out fewer loans--which results in less revenue to put back into members’ hands, the TV station reported. However, conservative lending practices help credit unions be part of the solution to the economy’s troubles, members said at the meeting. Potelco United CU, based in Pocatello, Idaho, has $56.2 million in assets.

CUs banks to finance Maines energy program

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AUGUSTA, Maine (3/13/09)--Maine plans to work with credit unions and other financial institutions to guarantee up to $100 million in weatherization loans to help state residents achieve greater energy independence, according to a proposed initiative by Gov. John Baldacci. Credit unions and banks will do the lending of the loans, but the state will back the loans, which will give credit unions and banks an incentive to increase the amount of loans issued, the governor and his aides said (Bangor Daily News March 12). Maine’s goal is to use the loans and $32 million in federal stimulus money to increase weatherization projects in the state 20-fold as part of a longer-range goal to enhance energy efficiency in all Maine homes the next 20 years, the newspaper said. Over the past few months, the Maine Credit Union League has had multiple discussions with the governor’s office about ways in which Maine’s credit unions and the state can work together to help provide programs to help consumers with weatherization and energy assistance loans, Jon Paradise, governmental and public affairs manager for the Maine Credit Union League, told News Now. John Murphy, president of the Maine Credit Union League, explained the genesis of the league’s involvement. “Last month, the league met again with the governor’s chief of staff to review the governor’s current proposal and to discuss how credit unions could support the needs of those members who may be interested in participating and determine if Maine credit unions would be interested in participating,” Murphy said. “During the meeting, the governor came in to let the league know how appreciative he was of the willingness of Maine’s credit unions to participate and assist in his energy plan, and for the assistance Maine credit unions have already provided,” he added. After the meeting, the league surveyed its member credit unions to gauge the level of interest in participating in the Maine Housing program. An overwhelming majority of credit unions expressed their willingness and desire to participate in this program, Murphy said. “The league and Maine credit unions are now awaiting further details and information from the governor’s office and Maine Housing, and anticipate that credit unions will begin offering this program to members soon,” Murphy added.

CU System briefs (03/12/2009)

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* ALTON, Ill. (3/13/09)--An independent funeral director whose business was failing has been charged with robbing two financial institutions, including the Dec. 5 robbery of Evansville (Ind.) FCU. George Chestnut, 46, of Alton, Ill., was arrested last week in Gibson County, Ind., shortly after a robbery Friday at First Bank of Princeton. Tuesday he was charged with the credit union robbery. An undisclosed sum from the credit union holdup has not been recovered, said police (St. Louis Post-Dispatch March 12) … * ANTIOCH, Calif. (3/13/09)--A teller who allegedly pretended to be a hostage and helped orchestrate a robbery at First Metropolitan CU's Antioch branch was one of five people arrested this week. Arrested were: Daniel Ramsey, 20, the teller; his friends, Angelo Leyesa, 21, and Shannon Sorrell, 18, a college student; and two people allegedly recruited as gunmen, Jarret Sermeno, 19, and Kevin Taylor, 18. The robbery occurred about 5:50 p.m. Feb. 25 when two men wearing ski masks and brandishing handguns entered the branch and ordered Ramsey at gunpoint to open the vault. He filled the bag with $74,000. The suspects fled, dropping $20,000, and allegedly joined Leyesa and Sorrell in a getaway car. No one was injured. Two days earlier an attempt to rob the credit union failed when one of the suspects, believed to be Leyesa, lost his nerve. That prompted the recruiting of Sermeno and Taylor, police said. Police believed the job was an inside job after witnesses noted the robbers seemed familiar with the credit union's layout (Contra Costa Times March 12) … * FARMERS BRANCH, Texas (3/13/09)--The Texas Credit Union League is looking for singers for the league's 75th Annual Meeting and Expo April 14-17 in Austin. Entrants to the "Sing Your Way There" National Anthem contest must submit a YouTube video performance of a song showcasing their talent by the close of business today. The winner will perform the National Anthem at the meeting and received a waived registration to the event (LoneStar Leaguer March 12) … * WASHINGTON (3/13/09)--Police FCU--headquartered in Upper Marlboro, Md., with a branch office in Washington, D.C.--has unveiled its new CO-OP Fast Branch kiosks in two police stations. The kiosks, one at each location, are the first kiosks in the nation to be located inside a police station, according to the Maryland and District of Columbia Credit Union Association (FOCUS Newsletter March 9). They replace the credit union's older ATMs, which operated since 1998. The credit union, which serves the law enforcement community exclusively, was the first financial institution in Washington to install ATMs in police substations. It did so to provide a safe, secure place for the local community to access their funds …