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CU System briefs (03/15/2011)

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* COMMERCE CITY, Colo. (3/16/11)--Denver-based Westerra CU has been named presenting sponsor for the MLS Cup Champion Colorado Rapids 2011 season. The soccer team and credit union brands will be incorporated in a new composite logo marking the partnership, which is the first of its kind in the club's history. Westerra CU President/CEO C. Alan Peppers noted that the $1.2 billion asset credit union and soccer team "share a commitment to our local community and the kind of teamwork it takes to produce excellence." The partnership includes increased community involvement focusing on the Rapids Youth Academy, Colorado youth soccer initiatives and education, the Rapids and Commerce City "4thFest," exclusive benefits and opportunities for Westerra's members, and more. The sponsorship will extend to the 2012 and 2013 seasons. Financial terms were not disclosed … * MADISON, Wis. (3/16/11)--Heritage CU, based in Madison, Wis., has promoted Anita Rauch to president. Bob Lestina will remain the credit union's CEO until his retirement. Rauch has worked with the $163.4 million asset credit union for 28 years, serving the last eight years as its chief operating officer. Heritage CU has more than $200 million in assets … * ST. LOUIS, Mo. (3/16/11)--Michael R. Miodunski, former manager of Electro Savings CU, St. Louis, died Feb. 24 at the age of 84. According to the Missouri Credit Union Association, Miodunski served several positions at the Missouri Credit Union League before his service at the credit union. He was living in Seguin, Texas, at the time of his death. He is survived by his wife, four children, five grandchildren and seven great-grandchildren (The Missouri difference March 11) …

CU rates are better deal CUNA details in letter to editor

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WASHINGTON (3/16/11)--Credit unions' rates remain a better deal for consumers than bank rates, Credit Union National Association (CUNA) Chief Economist Bill Hampel said in a letter to the editor of American Banker, which was published Tuesday. Hampel's letter addressed what he called "mixed up" assertions from an earlier letter published on March 8 and that strove to say banks pay higher rates on savings. CUNA's letter made three points:
* Financial institutions match competitive offers on rates, but the earlier analysis "would require that banks offer better than posted rates significantly more frequently than credit unions do. That is doubtful," Hampel said. * The earlier letter compared the average cost of deposits at banks and credit unions, and said banks have a higher average cost--and therefore pay higher rates on consumer deposits. However, said Hampel, the analysis actually "excludes direct deposit accounts from the denominator for banks, boosting the average yield while leaving in the almost equivalent 'share drafts' for credit unions. Credit unions typically pay interest on share drafts, but at much lower rates than on other types of deposits." * The analysis is also "mixed up because of the very different mixes of credit union and bank deposits," said Hampel. "Credit union deposits are virtually all retail. Almost nonexistent on credit union balance sheets are large, negotiable certificates of deposit and brokered deposits, both of which tend to pay much higher rates than consumer deposits."
Thirty percent of bank assets are in banks with more than $10 billion in assets. "These larger institutions are most likely to rely on more expensive wholesale funding, driving up their average cost of deposits," Hampel wrote. "Only 5% of credit union assets in the group are in credit unions that size. So the average cost of credit union deposits represents rates paid to consumers while the average cost on bank deposits is driven by a mixture of consumer and wholesale rates." "Therefore, there is no reason to doubt the basic reality revealed by rate-tracking firms: credit union rates and fees are more consumer friendly than at banks," Hampel said. Hampel also noted that "over the recent financial crisis the National Credit Union Share Insurance Fund has fared much better than the Federal Deposit Insurance Corp. (FDIC). So far, credit union insurance premiums have been quite a bit lower than at banks, and over the next decade, even after the FDIC's latest assessment changes that favor small banks, insurance costs to credit unions and community banks will be similar to each other," he concluded.

League Fla. CFO FBA ask FIs to waive holocaust-payment fees

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TALLAHASSEE, Fla. (3/16/11)--The League of Southeastern Credit Unions has joined Florida’s chief financial officer (CFO) in asking the state’s financial institutions to waive wire transfer fees charged to Holocaust survivors when receiving compensation or reparation payments, according to a release from the World Jewish Congress. The league joined state CFO Jeff Atwater and the Florida Bankers Association in the request. Atwater wrote a letter asking the chief executive officers of the financial institutions doing business in Florida to sign a commitment pledge to voluntarily waive the wire transfer or processing fees on Holocaust-related reparations. The fees range from $10 to $40 per transaction. “The transfer fee on Holocaust reparation payments essentially amounts to a 10% tax on each payment a survivor receives, a significant burden considering that the vast majority rely on these payments to make ends meet,” Atwater said. He added that waiving the fee “is a powerful reflection of the willingness of Florida’s financial community to contribute to the well-being of this important group of Floridians.” Seventeen financial institutions with more than 1,800 branches statewide have pledged to waive wire transfer fees for Holocaust survivors, according to Atwater’s office. Roughly 12,500 Florida Holocaust survivors and their families receive about $300 to $350 in monthly reparation payments.

Fed tax payment rejected message one of new scams

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MADISON, Wis. (3/16/11)--With tax season and the recent tsunami/earthquake disaster in Japan, the climate is ripe for financial scams. Several fraud attempts have been reported nationwide. Since October, Internet Crime Complaint Center (IC3) has received more than 150 complaints reporting that consumers received fraudulent e-mails titled “LAST NOTICE: Your Federal Tax Payment has been rejected.” E-mails stated, “The problem is that system doesn't process your company ID on holidays and we moved your tax payment batch to a waiting list.” Recipients were then directed to click on a link to obtain details about their company’s status and tax payment batch file. Some complainants use the electronic system to pay their estimated quarterly taxes, so the e-mail appeared relevant. Other related phishing e-mails claimed, “the identification number used in the Company Identification Field is not valid.” Recipients were directed to visit hxxp://eftps.gov/r21 and “check the information and refer to Code R21 to get details about your company payment in transaction contacts section.” Another recent complaint filed with the IC3 reported the same type of phishing e-mail except this time, recipients were directed to open an attachment contained in the e-mail. The e-mail was titled “Your Federal Tax Payment Notice.” Like the others, it claimed, “the identification number used in the Company Identification Field is not valid.” To entice the recipient to open the attachment, the e-mail stated, “check the attached information and refer to Code R21 to get details about your company payment in transaction contacts section.” In addition to keeping members apprised of such scams, credit union themselves are receiving complaints about other scams, such as debit card and texting scams. Members of two Massachusetts credit unions were warned to keep a close eye on accounts linked to their debit cards after some apparently fraudulent activity was noticed. Leominster (Mass.) CU, with $596 million in assets, and GFA FCU, with $326 million assets in Gardner, Mass., posted warnings on their websites. GFA FCU also e-mailed its members. Callers to Leominster CU were warned about fraudulent debit card activity in states other than Massachusetts (Worcester Telegram & Gazette March 12). The credit unions said they have implemented measures to protect members’ accounts, and these could cause members debit cards to be declined for certain transactions. Leominster CU Senior Vice President Carol Southworth told the newspaper many financial institutions experienced security breaches through either merchant sites or sites where credit card transactions are processed. Several credit unions and banks are issuing warnings and urging members and customers to monitor their accounts. Dozens of Denver area residents received bogus text messages on March 7 alerting them that their credit cards had been deactivated and directing them to call Sooper CU (Denver 7News March 8). The message instructed recipients to call a number listed in the text. They then received a computer generated message, which directed them to enter their credit card number to be connected to Sooper CU. Sooper CU’s will never ask for credit card or debit card information through telephone, e-mail or text message, its website said. The Texas Credit Union League (TCUL) warned its members of a door-to-door scam targeting elderly individuals in the Corpus Christi and Houston areas (LoanStar Leaguer March 9). The con artists reportedly claim to be from the Area Agency on Aging (AAA), an agency under the umbrella of local Council of Governments (COG) that provide resources and services for elderly citizens. The scammers convince the elder victim to allow them in the house to assist with their financial planning. Representatives from the AAA do not typically solicit through door-to-door activities. Its clients are referred from other community and government agencies. The TCUL offered this list of scams often target the elderly:
* You’ve Already Won … ” Official-looking documents designed to trick recipients into thinking they’ve won money are worded to appear legal. However, they often hide in tiny italic type crucial information, such as the fact that it isn’t really a prize announcement. Seniors who fall for this scam send a check (for a “processing fee”) to a post office box. The victim loses anywhere from $5 to $50. * Telemarketing scams. Seniors are also prime targets for unscrupulous telemarketers. Appreciating the opportunity to engage in conversation with friendly sounding strangers, many seniors are often duped into disclosing sensitive information like credit card and checking account numbers. * Ready-made repairs. In this scam, “gardeners” or “handymen” offer to do “necessary” repair work on just about anything, from roofs to cracked driveways, to trimming shrubs or cutting half-broken limbs. The perpetrators scare seniors into hiring them on the spot to avoid fines due to “city code violations.” Often the scammer insists on payment upfront, and/or once finished with the “job,” demands additional money. Some threaten that to call the police if the victim doesn’t pay. * Charity scams. Scammers will create a fake charity whose name rings familiar to a legitimate charity. Knowing that “causes” such as health and children’s welfare appeal to seniors, the scammer solicits “donations” from unsuspecting victims.
Also, Monday, NACHA warned of a phishing scam perpetrated by individuals who claim to be representatives of NACHA (News Now March 15). The emails, which contain harmful links, have been sent to both individuals and companies and bear the name of NACHA and, at times, the names of fictitious NACHA employees and departments.

Survey Tellers are key to satisfaction

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DENVER (3/16/11)--Tellers have a giant effect on how members/customers feel about a credit union or bank, according to a new study, “Customer Experience with Teller Transactions” by Prime Performance, which advises financial institutions on improving the client experience. Prime Performance data indicate that the net score for credit unions was 91%. The comparable score for small-bank customers gives their teller service a net score of 92%. and for large banks it was 87%, which is also the national average. Falling below that were: Chase, 77%; Bank of America (BofA), 82%; and Wells Fargo, 84% (PRWeb March 15). A net score is the percent of satisfied customers minus the percent of dissatisfied ones. A score of 100% is perfect. Credit unions led all financial institutions in these three areas:
* Credit union members are most likely to say they would recommend their credit union, with 87% of members saying they would and 2% saying they would not (next best--small banks, 82% and 2% respectively); * When asked the likelihood of switching financial institutions in the next 12 months, 88% of credit union members said they are content to stay put (next best: small banks, 86%); and * With a net score of 64%, credit union members showed the strongest response when asked how important their individual business was to their credit union (next best--small banks, 52%).
“Tellers can affect customer loyalty, satisfaction and retention. Successful service depends on simple actions,” said Jim Miller, Prime Performance president. “These include greeting the customer immediately upon entering the lobby, smiling, using the customer’s name, saying ‘thank you’ and being helpful. Quick, accurate transactions are crucial, but most banks excel at this. So, it isn’t a competitive advantage.” Prime Performance survey results measured how teller actions affected member/customer satisfaction in four areas:
* Transaction speed and accuracy. A quick, accurate transaction satisfies 90% of members/customers and displeases 1%. However, slow and inaccurate transactions satisfy 27% of members/customers and dissatisfy 22%. * Wait time. The net satisfaction score drops from 90% to 23% when members/customers wait too long for service. This occurs in 5% of teller transactions. * Valuing members’/customers’ time. The net satisfaction score falls from 92% to 27% when members/customers feel their time is not valued. * Friendliness. About 90% of members/customers are satisfied--and 1% are dissatisfied--when tellers are friendly. This results in an 89% net score. Unfriendly tellers cut the net score by 74%-- to 15%. Friendliness is demonstrated by thanking members/customers, smiling, making eye contact, greeting members/customers and using the member’s/customer’s name. Other friendliness indicators include starting the transaction by asking “How may I help you?” and finishing with “Is there anything else I can help you with?”
“All teller interactions with customers must be genuine,” Miller said. “Going through the motions is not enough to deliver a superior emotional experience. Customers overwhelmingly react positively to authentic warmth. Conversely, they respond negatively to feigned sincerity.” Selected data from the study on teller performance show these net scores for financial institutions:
* Value my time. Credit unions and small banks did best, scoring 92%. All other institutions fell below the 88% national average. Other scores were: Chase, 79%; large banks and BofA, 85%; and Wells Fargo, 86%. * Used members’/customers’ names. All institutions need to do a better job, the study found. The national average is 59%. BofA and Wells Fargo did best with scores of 64%. Other net scores were: Small banks, 61%; credit unions, 60%; large banks, 59%; and Chase, 45%. * Teller enjoys the job. Small banks led in this category with a net score of 91%. Credit unions followed closely with 90%. Wells Fargo scored 87%, which was the national average. Other scores were: Chase, 77%; BofA, 82%; and large banks, 86%.
These findings and others come from the Prime Performance 2010 Bank and Credit Union Satisfaction Survey. The survey polled more than 6,000 customers of credit unions, small banks, large banks and three mega-banks--Bank of America, Chase and Wells Fargo. For a complete copy of the Prime Performance Customer Experience with Teller Transactions study, use the link.

Tax prep sites at CDCUs lauded by San Francisco media

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SAN FRANCISCO (3/16/11)--Two San Francisco area community development credit unions (CDCUs) were the focus of recent media pieces lauding their work with the Internal Revenue Service’s Volunteer Income Tax Assistance (VITA) program.
Click to view larger image Northeast Community FCU and Cooperative Center FCU were the focus of recent media pieces lauding their work with the Internal Revenue Service’s Volunteer Income Tax Assistance (VITA) programs in the San Francisco area. Here, Northeast Community FCU CEO Lily Lo assists a member with free tax preparation at the community development credit unions VITA site in its Tenderloin branch. (Photo provided by National Federation of Community Development Credit Unions)
The VITA program offers free tax preparation services to low- and moderate-income consumers. Northeast Community FCU, San Francisco, was featured on ABC7 television’s “Money on Your Side" segment. Cooperative Center FCU, Berkeley, Calif., was featured in an article in the San Francisco Chronicle’s SF Gate. Originally organized to serve low-income residents in San Francisco's Chinatown, Northeast Community FCU has expanded over the years to other low-income neighborhoods. The $10 million asset credit union has branches in the Tenderloin and in the South of Market's (SOMA's) Sixth Street corridor, historically known as the city’s Skid Row. “We have four VITA sites in San Francisco this year,” explained Northeast Community FCU CEO Lily Lo, “in our main branch in Chinatown, our Tenderloin branch, Golden Gate Church in the Richmond District, and our newest site in our SOMA branch, which opened last year,” she said. “VITA is an important service we provide our members, and with the high unemployment in California, we’ve seen big increases in people coming in for free tax preparation compared to last year,” Lo added. “Already this year, we’ve opened 30 new accounts with previously unbanked people who came to us for VITA. It’s clear that the need is great right now, and we’re happy to help them.” Across the bay in Berkeley, another CDCU, Cooperative Center FCU, is also operating a VITA site, but in addition to preparing taxes for free, the credit union is piloting a new program that offers participants affordable refund anticipation loans (RALs) for $19. “As a nonprofit financial institution, our mission centers around serving our members and our community, not just padding our bottom line,” said Gary Bell CEO of Cooperative Center FCU. “By helping these individuals and families save their hard-earned cash, we build a trusting relationship with them and hopefully they’ll come back and become members of our credit union.” Northeast Community CU also offers RALs to its VITA filers, with 11 filers requesting them to date, nearly double the total number made during last year's entire tax season. Its RALs also are very affordable. Northeast's RALs carry a maximum interest rate of 18% and no fees. VITA provides free tax preparation to households earning less than $49,000 per year, and assists low-income people in saving millions by helping them claim their tax benefits, such as the Earned Income Tax Credit (EITC), a credit of up to $5,666 for the 2010 tax year. Many credit union VITA sites operate in partnership with United Way’s Earn It! Keep It! Save It! campaign. Tax refunds returned to low-income households are generally spent locally, multiplying their economic impact, said The United Way. Since 2003, Earn It! Keep It! Save It! VITA sites have generated an estimated $228.5 million in local sales, 1,057 jobs and $55 million in wages across the Bay Area. “Ultimately, we don’t do this because it necessarily makes the most financial sense for our institution,” Bell explained. “We do this because ‘people helping people’ is what credit unions are all about. It’s in our mission and it’s the right thing to do.”