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CU System briefs (03/12/2014)

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  • MADISON, Wis. (3/12/14)--Friday is the deadline for youth to apply for positions on the Googolplex editorial board. Googolplex is the Credit Union National Association's microsite that teaches money management skills to three age groups: Grades 4-5; grades 6-8; and grades 9-12. Students serve as board members from June 1 to May 31, 2015. Participating on the board allows students to learn more about finances while playing games online, reading stories and developing writing skills--all while getting paid. To request an application or obtain more information, e-mail Laurel Purves, Googolplex youth editorial board liaison ...
  • BISMARCK, N.D. (3/12/14)--The North Dakota Housing Finance Agency (NDHFA) recognized First Community CU, Jamestown, N.D., as a champion of affordable housing during the recent Statewide Housing Conference. Awards went to the $471 million-asset credit union and Mary Radenz, loan officer. "North Dakota has experienced dramatic changes in recent years, and the Housing Finance Agency's challenge to provide safe, decent and affordable housing for every North Dakotan has grown substantially," said Agriculture Commissioner Doug Goehring (The Memo March 11). NDHFA's lender awards are based on participation in its homeownership programs and involvement in locally sponsored affordable housing projects and events ...
  • SAN RAFAEL, Calif. (3/12/14)--The San Rafael Chamber of Commerce honored Redwood CU, Santa Rosa, Calif., as large business of the year for its contributions to community and nonprofit organizations. "We believe (the credit union) plays a vital role in job creation and the vitality of local economies," said Brett Martinez, president/CEO of the $2.27 billion-asset credit union. "The recognition by the San Rafael Chamber is an affirmation that we are making a difference." The credit union supports a wide variety of community efforts including small business lending and financial literacy ...  
 

Filene report: Risk-weighted capital standards 'compelling' for policymakers

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MADISON, Wis. (3/12/14)--The adoption of appropriate risk-weighted capital adequacy standards would put banks and credit unions on the same safety-and-soundness footing, making such standards a "compelling" consideration for policymakers, according to a new report from the Filene Research Institute.
 
The Credit Union National Association supports risk-based capital but has strong concerns that there's a multi-billion-dollar price tag of additional capital for credit unions attached to the National Credit Union Administration's proposed risk-based capital (RBC) rule. For risk-based capital to be implemented correctly, CUNA asserts, it must be part of overall capital and prompt corrective action reform---changes that will require congressional action.
 
The Filene report says that allowing credit unions to access alternative capital would bolster their stability during times of stress and strengthen their ability to grow in both good and bad times, according to the report, "Credit Union Capital Adequacy: What's New and What's Next?"
 
The paper outlines the mismatch between credit unions and investor-owned banks, focusing on the implications of Basel III capital guidelines, prompt corrective action (PCA), and the structure challenges of maintaining the principle of member ownership in the face of outside capital.
 
With risk-weighted capital adequacy standards, simple credit unions could stick with a leverage-only requirement, while those with more complicated balance sheets could opt for risk-weighted reporting, the report said.
 
For U.S. lawmakers, the case to revise the current regime is compelling, the paper said. Alternative capital would moderate draconian PCA requirements by providing an alternative to jacking up income or shrinking assets. The Government Accountability Office (GAO), the research arm of the U.S. Congress, concluded in 2004 that it was too early to recommend changes to credit union PCA, but the financial crisis showed that the risks posed by credit unions do not warrant more stringent PCA triggers.
 
The newly released U.S. final capital rule for banks should be catalyst for alternative capital reforms, the paper advised. A streamlined approach for credit unions that mirrors the rule, and related Basel III requirements, would support a safer, more resilient credit union system.
 
Where credit unions can issue alternative capital instruments, it is possible to balance the interests of member-ownership with those of outside, the paper said. Credit unions would be safer and more flexible with additional access to capital.
 
To download the paper, use the link.

GCUA puts 'Idol' spin on value of members' votes

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DULUTH, Ga. (3/12/14)--In a video encouraging credit union members to make their votes count in Nov. 4 elections, Georgia Credit Union Affiliates (GCUA) spoofs the irony that Americans are more engaged in "American Idol" voting than taking part in governmental elections.
 
The video supports ElectionWatch 2014, a nonpartisan political program designed by the Georgia Credit Union Affiliates to encourage credit union members to "Be Counted." and "Vote!" in city, state and congressional elections this year.
 
In the video, "Government Idol" contestants vie for the approval of actors portraying former Idol judges Randy "The Dog" Jackson, Paula Abdul and Simon Cowell, as anxious would-be voters watch the show on their TVs at home. With the judges' collective nod, the contestants win a ticket to the capital.
 
In between performances, a series of messages is displayed: "Every year, important legislation is introduced that could drastically impact the way your credit union helps you.
 
"Now that's something to get excited about.
 
"If credit union people don't vote, credit union people don't count."
 
GCUA's ElectionWatch 2014 offers current information on the candidates, issues and special events so that members can become more informed of the political process and how it can affect their everyday lives.
 
To watch the video, use the link.

Schnucks' data breach takes $1M toll on Mo. CUs

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ST. LOUIS (3/12/14)--The data breach that bit St. Louis-based Schnucks supermarkets last April has dealt at least a $1 million blow to Missouri credit unions, a Missouri Credit Union Association (MCUA) survey found.

When MCUA leaders attended the Credit Union National Association's Governmental Affairs Conference in Washington last month, they made sure to relay the financial implications of the breach to elected officials.

"Being able to provide members of Congress with hard numbers about the impact of the Schnucks data breach on credit unions in Missouri had a real impact during GAC," said Amy McLard, MCUA senior vice president of advocacy. "This puts a cost and effect on how data breaches impact their constituents."

CUNA has repeatedly encouraged members of the U.S. Congress to address inconsistent rules that require credit unions and other financial institutions to follow high security standards while holding merchants to different standards. CUNA President/CEO Bill Cheney has also called on the House Financial Services Committee to hold hearings on the last year's Target data security breach. In addition to new payment security standards, merchants must also be held accountable for the damages that breaches to their systems cause financial institutions and consumers.

Credit unions who responded to the Missouri survey--28 in all--spent about $246,000 to replace compromised cards as a result of the incident. At least 67,900 credit and debit cards total had to be replaced, and the cost to reimburse members for fraudulent charges totaled about $643,000.

Not all credit unions who responded answered each survey question. About 2.4 million credit and debit card numbers were stolen at the time.  

To help MCUA accurately illustrate the total impact, Missouri credit unions that have not responded to the survey and that suffered losses because of the Schnucks breach are encouraged to contact McLard at amclard@mcua.org or 314-542-1370.

TMG gives $10K to NCUF from GAC promo

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DES MOINES, Iowa (3/12/14)--The Members Group (TMG) and its sister companies will make a $10,000 donation to the National Credit Union Foundation (NCUF), the Des Moines, Iowa-based payments processor announced Tuesday.
 
Click to view larger image Attendees who visited The Members Group's exhibit hall booth at the Credit Union National Association's Governmental Affairs Conference in Washington Feb. 23-27 were asked to fill out a "Make a Difference" card with an example of how they've made a difference in the lives of others. In honor of the "Make a Difference" project, The Members Group and its sister companies pledged to donate $10,000 to the National Credit Union Foundation. (The Members Group photo)
The gift is the result of a campaign TMG conducted by the Des Moines, Iowa-based payments processor from its booth at the Credit Union National Association's Governmental Affairs Conference (GAC) Feb. 23-27 in Washington, D.C.
 
Joined by Hispanic market solutions company Coopera, credit union regulatory firm PolicyWorks and credit card agent issuer TMG Financial Services, TMG hosted its "Make a Difference" project at GAC. Attendees who visited the booth were asked to fill out a "Make a Difference" card with an example of how they've made a difference in the lives of others.
 
In honor of the Make a Difference project participants and their contributions, the sister companies and their parent organization, Affiliates Management Company, pledged to donate to NCUF.
 
"As a group, all of our sister companies decided to take a minimalist approach to our GAC booth display to keep the focus on our shared mission, which is to ensure the vitality of credit unions by improving the financial lives of consumers," said Georgann Smith, TMG vice president of marketing. "By simply doing good for others, organizations like ours can have a tremendous, positive impact on the credit union movement."
 
In addition to the in-booth story collection project, the sister companies sent representatives into the conference crowd with pre-loaded gift cards. They were instructed to hand out the gift cards to anyone they wished, explaining that the idea was to do good for others without an expectation of anything in return.
 
The response was inspiring, according to TMG's Vice President of Product Ryan Anderson, who passed out cards to strangers in line for coffee. "I watched several people 'pay it forward' by handing the card off to someone behind them in line," he said.

CEOs confident about CU climate in '14, survey says

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AUSTIN, Texas (3/12/14)--Credit union CEOs are feeling more optimistic going into 2014, according to a recent survey by Abound Resources.
 
The consulting firm found that 48% of CEOs stated they feel either "somewhat" or "very" optimistic--an attitude bolstered by ongoing credit union profitability, said President/CEO Brad Smith.
 
"Even with a tough interest-rate environment, credit unions have reason to be optimistic," he said, adding, "In our conversations with credit union CEOs, the majority realize that they can do even more to position their credit union to rise above economic and regulatory challenges and remain profitable and relevant in 2014 and beyond."
 
CEOs are firmly committed to consumer lending as a critical part of their growth strategy. In 2013, 88% of CEOs cited consumer lending as a growth priority. This year, it's a resounding 94%, the report said.
 
Membership growth remains a focus, with 25% of CEOs calling it a top priority, up from 17% in 2013. This aligns with the increasing average age of a credit union member and credit unions' desire to add younger members.

Iowa CUs 2nd nationwide in loan, asset growth

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DES MOINES, Iowa (3/12/14)--Iowa credit unions ranked second in the nation in annual loan and annual asset growth, according to numbers released by the National Credit Union Administration.
 
The Iowa Credit Union League pointed out that the state's credit union loans and leases increased 13.6% to $8.2 billion in 2013, compared with 8% nationwide. (See March 4 News Now: 2013 financials show continued positive trends at CUs.)
 
"Iowa credit unions are strong and healthy, and continue to be leaders in the industry," said Pat Jury, league president/CEO. "Our positive growth in credit union membership, loans and deposits affirms that Iowa consumers desire to conduct business with not-for-profit financial cooperatives."
 
Total assets at Iowa credit unions increased by 6.6% compared with the year prior, clocking in at $11.8 billion. Nationally, federally insured credit unions' total assets trended up by $5.3 billion in the fourth quarter.
 
They experienced 6.6% growth in share and deposits to $10.2 billion compared with the national share and deposit growth of 3.7%.
 
Membership at Iowa credit unions ticked upward by 1.2% to 1,015,287, with 12,463 members added since December 2012. Nationally, membership in federally insured credit unions grew 2.6%.
 
The Des Moines Register noted the state's credit unions were led Veridian CU, Waterloo, and the University of Iowa Community CU, North Liberty (March 11). Veridian CU reported total assets increased 3.6% to $2.43 billion during 2013. Membership ended the year at 178,888 members, with a 3.9% growth rate.
 
Meanwhile, the University of Iowa Community CU noted assets bumped up by 20% to $2.16 billion in 2013, and membership came in with a 9.1% increase to 11,706 members.

Entries being accepted for league Blockbuster Awards

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MADISON, Wis. (3/12/14)--Entries are now being accepted for the 2014 Credit Union National Association Blockbuster Awards, an event that recognizes the outstanding marketing, advertising and publication efforts of state leagues and league service corporations promoting the credit union movement.
 
All submissions for 2013 work must include an entry form, the corresponding entry materials and the appropriate fee payment.
 
This year's program also features several new rules: Entries can now be submitted digitally; the program has been streamlined with several adjustments to categories; and the name of the program has been changed from the Pro & Blockbuster Awards to the Blockbuster Awards.
 
The awards will be presented during the GAPS/Communicators Conference June 16-18 at the Marriott Marquis in Washington.
 
The deadline to submit entries is April 18. Winners will be notified in May and honored at an event held at the conference.
 
For all specific submission guidelines, categories and information, use the resource link.