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BTD not the first mass movement from banks to CUs

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FEDERAL WAY, Wash. and BEAVERTON, Ore. (3/13/12)--Nov. 5--Bank Transfer Day (BTD)--was not the first mass movement away from banks and into cooperative financial institutions, says the Northwest Credit Union Association (NWCUA).

Instead,  2011 marked the "third significant membership milestone in the 100-year history of  American credit unions," according to a special edition of NWCUA's Anthem newsletter (March 12), which puts BTD and the resulting membership gains for credit unions into perspective. It also provides information and statistics about national and statewide (Washington and Oregon) membership growth.

Consumers' movement from banks to credit unions "happened several times in America during the 20th Century under circumstances similar to those that occurred during 2011's fourth quarter," said one of the Anthem's articles, "Bank Transfer Day in Context, What Caused the Movement, and What Comes Next?" written by David Bennett, director of publications at NWCUA.

"However, at two specific points in time--in 1934 and again in the mid-Seventies--there was a confluence of events very similar to those that led to last fall's Bank Transfer Season," the article said.

"While credit unions themselves didn't exist before the first state credit union act became law in Massachusetts on April 15, 1909, the conditions that spawned them did," said NWCUA.

The article noted that "the 1909 Massachusetts Credit Union Act was passed on the heels of a systemic banking failure and crisis in 1907-08, when the labor and women's movements were converging and progress was being made to advance their causes. Personal lending was scarce but desperately needed, and most of the nation's citizens lived in rural communities where access to credit was almost nonexistent. Parallel to the interest in credit unions was an interest in maintaining a stable economy. So, with the first state credit union act also came the implementation of the first major bank reform in the U.S."

The first credit union membership spike occurred between 1934 and 1939 during the height of the Great Depression and after the passage of the Federal Credit Union Act, said the article. Credit unions experienced a heyday, while many banks closed their doors, "leaving communities without banking facilities and creating some general hostility toward and fears of banking institutions."

The World War years were lean for credit unions, but in the 1950s, credit unions would turn into a revolution running concurrently with a new economic and post-war industrial revolution. By the end of 1963, credit unions had increased membership by more than 168%--to 14.5 million from three million.

Between 1969 and 1975, the U.S. entered two recessions.  "Politically, what happened in the early 1970s is nearly identical to what we are seeing today," said NWCUA. The recession then coincided with a government's attempts at fiscal tightening to close the Vietnam War budget deficit, coupled with the oil and gas crisis. The poor economic situation led to a recession in 1973.  Credit unions were maturing but their environment was affected by aggressive banks and revolving retail credit added to the rising tension. The economy began its full switch to a credit-based economy as the rise of ATMs meant more convenience to bank customers, the article said.

"It was do-or-die time for credit unions, so they did," said the report. The result was sweeping changes to the Federal Credit Union Act to allow credit unions to become full-service financial institutions and to institute the corporate credit union system to provide liquidity.  The regulations increased and a period of consolidation began, followed by improvements to state credit union acts.  Charters advanced and some regions were positive climates for credit unions.

The next test, however, would be Sept. 11, 2001, when terrorists prompted a downward economic spiral and an increase in non-domestic government spending. While the U.S. was "distracted," economic indicators began showing signs of a slowdown. Unregulated investment products, fueled by greed, created a bubble that led to an economic crash and recession, which led to consumers' discontent, the article said.

"What credit unions provided to consumers in 2011 was the opportunity to act in their own combined personal best interests. Credit unions became a positive outlet for the public's bank-directed anger. Credit unions gave the opportunity to punish an industry in the court of public opinion when the justice system couldn't--or wouldn't--punish it in a court of law," said Bennett in the article.

"Credit unions have reached a tipping point again as all the social, political and economic signs are flashing. History is calling on credit unions again to be pillars during this time of need, to serve American consumers on a day-to-day basis in the present, but also to focus on the future of the movement and all that it can be as opposed to just the well-being of individual institutions."

The article also looks to the future and provides a graphic that illustrates 111 years of the U.S. credit union movement from 1900 to 2011. It includes a timeline of social movements, economic indicators and credit union milestones. Use the links to access both the article and the graphic.

Piedmont Advantage undergoes restructuring

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WINSTON-SALEM, N.C. (3/13/12)--Piedmont Advantage CU, based in Winston-Salem, N.C., says it is restructuring positions to streamline its business and reflect the changing financial services environment.

The $214.4 million asset credit union, headquartered in Winston-Salem, N.C., is eliminating some positions  while enhancing or adding others to reflect changes in today's financial services environment.

It told the Winston-Salem Journal (March 9) that collections services are being outsourced, which affected some jobs.  CEO Judy Tharp told the publication that 11 employees were let go. However, some have the opportunity to apply for redesigned positions or new ones, such as mortgage loan positions, which the credit union expects to fill within a month.

Marketing Council Best Practices winners honored

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MADISON, Wis. (3/13/12)--Best Practices Award winners from the CUNA Marketing and Business Development Council were announced during the council's 19th annual conference, which ended Saturday in New Orleans.

The awards recognize new marketing and business development approaches  that have potential for universal application across the credit union movement, said the council. Winners are based on strategy, process, application and results.

Winners by category were:

  • Business Development: Maps CU in Salem, Ore., for its Buy Local program. The program aimed to increase the credit union's relationships with local businesses, drive additional traffic to existing businesses, and engage the community with the idea of buying local.  It saw a 10% increase in participating businesses in 2011, a 95% renewal rate for 2012, increased website traffic on the Buy Local page and about $2,500 infused into the local business community.
  • Community Outreach and/or Political Advocacy: Truliant FCU, Winston-Salem, N.C., for R.E.A.L. (Rural Entrepreneurship through Action Learning), a program that provided participants with networking opportunities, small business education, financial literacy and counseling to build their financial strength and business skills. The program has 126 graduates. Eight individuals have already opened a new business and 22 plan to open a business within the next five years. For its efforts, Truliant FCU was honored as a 2011 recipient of the prestigious National Association of Housing and Redevelopment Officials (NAHRO) Merit Award for job creation and entrepreneurship training.
  • Miscellaneous: Fort Worth Community CU, Bedford, Texas, for the creation of its virtual spokeswoman "Gabby." Through social media tools including Facebook, Twitter, a blog, Pinterest, and her own website, Gabby engages and interacts with a targeted female audience (women, ages 28-55)  to develop relationships that will lead to membership growth and increased product/service usage among current members. In addition to features and accolades from various credit union organizations, the campaign has led to an 8.4% membership growth in less than 10 months and a 17.1% increase in loan growth over the previous year.
For more information on the 2012 Best Practice Award winners,  go to the council's website and click on the Best Practices link on the "Events" pull-down menu.

CU System briefs (03/12/2012)

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  • ALBANY, N.Y. (3/13/12)--Brett King, best-selling business writer and industry innovator, will be the June 8 keynoter at the Credit Union Association of New York's Annual Meeting, which takes place June 7-10 in Lake George, N.Y. King is author of Bank 2.0, which challenges financial institutions to adapt their structures and thinking to reconnect with evolving consumers. He is founder of Movenbank, the first pure-play mobile bank based on Near Field Communication, social media and user experience, and runs User Strategy, a consultancy focusing on improving customer interaction with financial services companies.  He will talk about trends, innovations and technologies that will have the most significant impact on financial services, said the association ...
  • ROYAL OAK, Mich. (3/13/12)--Deb Thompson has been selected as the new CEO/president of OUR CU, announced the Royal Oak, Mich.-based credit union. Thompson has a long history of working in financial institutions, most recently as senior vice president of operations and technology with Bank of Birmingham. Before that, she served as Michigan Schools & Government CU's vice president of strategic business services for two years. She also was with SOC CU as vice president of finance and operations for 16 years. Thompson replaces retiring CEO/President Thomas Zamberlan …
  • OGDEN, Utah (3/13/12)--Shelley Burch Clarke, former CEO of Goldenwest CU in Ogden, Utah, died March 8 after a long battle with brain cancer. She was 60. Clarke spent 37 years with Goldenwest CU. She became vice president in 1983, executive vice president in 1990 and president/CEO in 2001, holding that position until her retirement in December. During her tenure, the credit union grew in assets to $775 million from $190 million, more than doubled its membership to 83,000 members, and doubled its branches to 18 locations. She served in many advisory boards and councils, was active in a number of national credit union organizations including the Credit Union National Association and served as chairperson of the Utah League of Credit Unions. She served on the Governor's Advisory Board and was recognized as one of the top businesswomen in Utah in 2001. "Shelley was a significant force behind the credit union movement's success of the last decade in our state," said Scott Simpson, president of the Utah Credit Unions Association. "Her leadership and vision will truly be missed."  She is survived by her husband, two sons, a granddaughter, her parents, a sister and a brother. Funeral services will be Wednesday at 11 a.m., with viewing tonight from 5 p.m. to 8 p.m, at the Lindquist Mortuary, 3408 Washington Blvd., Ogden, UT 84401 …
  • LANSING, Mich. (3/13/12)--Jackilyn Ravis, former CEO of Members CU, Travers City, Mich., died March 2, in Charleston, Tenn., where she had retired with her husband, Louis, according to the Michigan Credit Union League (Michigan Monitor March 12).  She had also worked at the former Pontiac Telephone Employees CU, now known as Lakes Community CU in Lake Orion. As CEO of Members CU, she led the credit union through a name change from Government Employees CU and saw it grow from $11 million to nearly $71 million in assets. Ravis loved the credit union movement so much that she and her husband married at the MCUL annual meeting in 1985. She is survived by her husband, a son, a daughter, a sister and a grandson. One son preceded her in death. No services are planned …

IL.A. TimesI CUs growing as payday loan alternative

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LOS ANGELES (3/13/12)--Credit unions and local banks are increasingly offering short-term loans to counter an industry typically dominated by storefront payday loan centers, according to a Monday article in the Los Angeles Times.

Although more than two dozen community and regional banks offer versions of payday loans, the largest rise in payday loan alternatives has been seen at credit unions, Jim Puzzanghera reported in the article, "Credit unions, banks grabbing a share of payday loan dollars."

Nearly 400 credit unions now offer these products, the article said. Because of the troubled economy, which has a weak demand for loans, credit unions and banks have entered the payday loan arena because there is an expanding need for short-term loans. Credit unions and banks can offer them at terms that are superior to those of storefront payday lenders, the newspaper said. They have seen more financially strapped consumers turning to payday lenders.

The National Credit Union Administration (NCUA) has implemented restrictions for short-term loans--including a cap on the annual percentage rate, allowing members at least a month to repay, and not permitting them to roll over the loans, the paper said.

The number of federally chartered credit unions that offer payday loans has climbed to 390 this year from 244 in 2011. Payday loans outstanding rose to $18.7 million at the end of December, compared with $8.9 million at the end of March. The increase is a response to a real need, Debbie Matz, NCUA chair, told the Times.

The article also mentioned programs offered by Vons Employee FCU in El Monte, Calif., and Community Trust CU in San Francisco.

CUs 100 project helps teens make a difference

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LIBERTY LAKE, WASH. (3/13/12)--Spokane Teachers CU in Liberty Lake, Wash., has challenged 10 teams of local high school students to make a difference with $100.

Students were asked to form a team, pick a project, set a goal and submit their idea to the credit union. Ten finalists for the contest were announced Feb. 13 (The Spokesman-Review March 1).

Throughout March, the teams will document their projects and air YouTube videos demonstrating how they've used the $100.

The scope of the projects ranges from personal to local to international.

One team is raising money to help a local teen with leukemia. It used the $100 to buy supplies for a burger night fundraiser at a local restaurant.

Another team created a clothing store at a high school to help make clothes more affordable for local residents.

A member of one team serves on a board of a nonprofit that performs service work in Uganda. Her team hopes to raise $10,150 to dig a well in Buwambo, Uganda. They will use their $100 to promote a fundraiser.

In April, the public will vote to select three winners. First place will be awarded $2,500, second place gets $1,500; third place receives $1,000.

Pa. Rep. Longietti receives CUNA Desjardins award

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HARRISBURG (3/13/12)--Pennsylvania State Rep. Mark Longietti (D-7) of Hermitage, Pa., is the first Pennsylvania lawmaker to win the Desjardins Financial Literacy Award for State Lawmakers from the Credit Union National Association (CUNA).

The award is given to one state lawmaker each year for leadership on behalf of youth financial literacy.

The Pennsylvania Credit Union Association (PCUA) nominated Longietti for the award to honor the work that he has done toward the advancement of financial education in the state. Longietti will be honored during the PCUA 78th Annual Convention & Exposition in May.

"It's a well-known fact that children and adults lack financial literacy skills to effectively manage their money, said PCUA President/CEO Jim McCormack. "Credit unions have been on the forefront of providing financial education in schools, so we are naturally supportive of Rep. Longietti's efforts to establish financial education programs throughout Pennsylvania," said McCormack.

Longietti sponsored the state House education bill that helps Pennsylvania's educational system incorporate financial education in school systems. After a veto by Gov. Ed Rendell, Longietti gained bipartisan support to overturn the veto. The bill was passed on Nov. 17, 2010, and officially became Act 104.

Act 104 requires the Pennsylvania Department of Education to convene an Economic Education and Personal Financial Literacy Task Force to assess the trends and needs of economic education and personal financial literacy; consider how funds are used to support economic education and personal financial literacy; and make recommendations to the governor and the General Assembly on legislative or regulatory changes to improve economic education and personal financial literacy.

PCUA serves on the state's Economic Education Task Force.

NACUSO opens nominations for expanded CUSO awards

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NEWPORT BEACH, Calif. (3/13/12)--The National Association of Credit Union Service Organizations (NACUSO) has expanded its annual CUSO Collaboration and Innovation Awards to recognize a credit union for using the CUSO model to serve its membership.

NACUSO is accepting nominations from its membership for this year's awards.

Nominations must be submitted by the close of business April 4. During the annual conference NACUSO will acknowledge all CUSOs and credit unions that submit applications.  

"CUSOs are vibrant examples of how collaboration can leverage the credit union system's resources to enhance member value, said Jay Johnson, executive vice president of Callahan & Associates and chairman of the 2012 award committee. "By driving innovation, broadening services provided to members and capturing efficiencies, CUSOs are a critical component of credit union success today and in the future.

"NACUSO would like to recognize both the CUSO and the credit union that best exhibits excellence in utilizing collaboration and innovation to serve the financial and other needs of their membership," he added.

The judging panel for this year's awards will include five leaders from the credit union industry and cooperative business sector who have demonstrated experience in innovation and collaboration.

IWash. Post CUsI close out 2011 on high note

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WASHINGTON (3/13/12)--Credit unions in the Washington, D.C., area saw a surge in earnings and membership in 2011, propelled by a spike in consumer interest as a result of a negative wave of sentiment toward banks last fall, said The Washington Post (March 11).

Last year, assets at locally based credit unions climbed 13.4% to $89 billion, while memberships jumped 15% to seven million, according to National Credit Union Administration (NCUA) data cited by the newspaper.

Also, consumer lending at Washington credit unions rose 10.1% to hit $60.1 billion by the end of last year.

A key measure of growth--return on average assets--was 0.92% for the area, compared with 0.79% the previous year.

"People have been looking for banking alternatives, and the fees issued at large banks brought heightened attention on credit unions in the fourth quarter," John Bratsakis, president/CEO of the Maryland and D.C. Credit Union Association, told the Post.

To read the article, use the link.