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CU System briefs (03/19/2012)

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  • RALEIGH, N.C. (3/20/12)--State Employees' CU, Raleigh, N.C., continues to waive late fees on first mortgage loans up to 45 days late to maintain its efforts to help members whose lives have been disrupted by significant events such as a job loss. By doing so, the $24 billion asset SECU has saved members more than $1.8 million in fees the past year. SECU's board first implemented the waiver after hearing that members were struggling to meet day-to-day needs as a result of an unexpected event. Other changes SECU has implemented have included eliminating private mortgage insurance requirements, reducing origination fees, providing specialty mortgage programs for first-time home buyers and providing an in-house Mortgage Assistance Program to help members stay in their homes …
  • LANSING, Mich. (3/20/12)--Michigan Credit Union League (MCUL) & Affiliates is welcoming Kieran Marion back to the league as vice president of governmental affairs.  Marion was legislative affairs manager in 2003 when the league worked on Michigan Credit Union Act modernization. He replaces Marcia Hune, who is joining Government Consulting Services Inc., a multi-client lobbying firm in Lansing (Michigan Monitor March 19).  After leaving the league, Marion worked as a government relations professional for Dykema Gossett for two years and served one year as legislative director for state Sen. Shirley Johnson, who at the time was chairwoman of the Senate Appropriations Committee before she was term-limited. Since leaving that position, Marion has served as legislative counsel for the Uniform Law Commission in Chicago, where he lobbied for passage of proposed uniform and model legislation in the 50 states, the District of Columbia, U.S. Virgin Islands and Puerto Rico. In that position, he also was primary staff counsel for legislative policy and appropriations efforts in Michigan …

SECU letter to CFPB supports overdraft reform

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RALEIGH, N.C. (3/20/12)--State Employees' CU (SECU), based in Raleigh, N.C.,  has written the Consumer Financial Protection Bureau (CFPB) outlining the credit union's consumer-friendly overdraft practices and mitigation efforts.

The letter, written in response to CFPB's call for comments about overdraft practices in the financial marketplace, highlights the credit union's low-cost and no-cost overdraft options, as well as services provided to help members avoid more than $53 million in overdraft-related fees.

The Credit Union National Association met with CFPB Director Richard Cordray Monday on the issue. He was a speaker at CUNA's Governmental Affairs Conference Monday in Washington D.C. (See related story on his speech in today's News Now, "Cordray says CUs give high-quality services").

SECU's regular overdraft option, used by more than 80% of its 900,000 checking accountholders, protects against high fees associated with "bounced checks." It allows members to select their deposit accounts, open-end loans or credit card to use for automatic transfer of funds if needed to "pay" a checking account item.  It debits 50 cents from the protected checking account for the service.

However, SECU members can avoid fees in several ways, SECU said.  Members can receive two-way text messaging and alert options on their mobile device or through online Member Access when potential "red flags"--such as low balances--occur on their checking account. Last year, 8.1 million messages and alerts were sent to SECU members.

Also, the credit union's "Another Chance" program provides an alert when an item is posting to a member's checking account without sufficient funds to cover the item. Members have until the end of the business day to make a branch or online deposit to avoid any nonsufficient funds (NSF) fees. This option saved SECU members nearly $2.6 million last year in NSF fees.

SECU also offers "Fee Free Days" where it waives any $12 NSF fees on two separate days in which items marked as NSF are returned, regardless of the number of items. SECU also waives the 50-cent overdraft transfer fees on two days each year.

Shell FCU using iPads for board meetings

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FARMERS BRANCH, Texas (3/20/12)--Shell FCU, a $482 million asset credit union in Deer Park, Texas, has implemented the use of iPads for board and other meeting presentations, according to the Texas Credit Union League.

"Sharing presentations across multiple iPads not only improves visibility but cuts back on paper usage and expenses," Angela Head, the credit union's chief operating officer, told the league (LoneStar Leaguer March 16).

Click to view larger image Click for larger view
Implementing and installing local network access via WiFi, the credit union's information systems staff set up IdeaFlight, a software program that provides access for one "pilot" to drive presentations and up to 15 "passengers" following the presentations. It created a universal presentation file format through PDF, said Joe Herrera, IS manager at the credit union. (See the photo of  a typical board meeting set up).

The article also noted that a national study of small and mid-size business (SMB) owners by The Business Journals revealed that iPad and other mobile devices have become critical to this business segment. iPad use nearly quadrupled among the SMB market over the past year--to 34% in 2011 from 9% in 2010. That indicates that the tablet is the fastest growing technology among the SMB market, said the article.

Since Apple launched the iPad in April 2010,  nearly 75% of SMB owners report being "very" or "somewhat" familiar with the device--an "incredibly high" level of familiarity, said the study. Of those surveyed, 34% are tech-savvy and financially successful, 72% have annual household incomes averaging $176,000, and their companies are well-established, existing for an average of 28 years.

Filenes new IBlueprints for InnovationI report released

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MADISON, Wis. (3/20/12)--The Filene Research Institute has released its latest Key Findings: Blueprints for Innovation, a report from Filene i3 (Ideas, Innovation, Implementation), the institute's group of innovators.

The report features 16 new idea blueprints designed to help members, and three updated blueprints on ready-to-implement ideas gaining traction nationally. The ideas fall into five categories:

  1. Building wealth;
  2. Navigating financial waters;
  3. Meeting life's milestones;
  4. Making community connections; and
  5. Borrowing responsibly.
Mark Meyer, Filene CEO, encouraged Filene members to "keep this catalog of ideas at hand as you develop your organization's goals and tactics for today's challenging times.

Filene i3 is a group of credit union executives from across the nation. Its objectives are to:

  • Develop and implement new, innovative ideas;
  • Provide a forum for cooperation, collaboration, professional development, and industry succession planning; and
  • Act as ambassadors for change and innovation.
For more information, use the links.

Maine CUs mortgage bill amendment progresses

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PORTLAND, Maine (3/20/12)--Maine's mortgage note bill, with credit unions' amendment attached, is making fast progress through the state legislature, and credit unions' grassroots efforts on it were praised by a state senator on the Senate floor, according to the Maine Credit Union League.

The bill requires an entity foreclosing on a home to show proof that it owns the mortgage note.  The league had presented the amendment that provides consumer protection if the original document cannot be produced without harming credit unions' interests.

State Sen. David Hastings (R-Fryeburg) praised credit unions' involvement, thanking them "for all of their work on this issue. They were willing to try and find a solution, and I appreciate it." (Weekly Update March 16).

After he spoke, the Senate voted 32-2 to pass the measure, L.D. 145, The Original Mortgage Note Bill. The measure went back to the House for a second time, where it passed under the hammer. It is headed back to the Senate for final approval.

League President John Murphy noted that credit unions made thousands of e-mails and calls to urge support of the bill. "It made a big difference and once again demonstrated the impact of credit unions' grassroots efforts," he said. He noted that the league's governmental affairs team--Quincy Hentzel, Jon Paradise, Ed and Cate Pineau and Ben Marcus--have been working on the bill for more than a year.

Judge strikes several WesCorp officials defenses

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LOS ANGELES (3/20/12)--A federal judge has granted the National Credit Union Administration's (NCUA) motion to strike down certain defenses offered by officials of the now defunct Western Corporate FCU in NCUA's suit against them to recoup $6.8 million in investment portfolio losses from mortgage-backed securities.

It was the second decision within a week that supported some of NCUA's motions in the lawsuit, which alleges that senior WesCorp executives were negligent in monitoring the corporate's  investments and that there was a breach of fiduciary duty and fraud related to the investments that caused WesCorp to collapse.

U.S. District Judge George H. Wu of the U.S. District Court for the Central California, Western Division in Los Angeles, in an order filed Thursday granted NCUA's motion to strike several affirmative defenses in the executives' amended answers to its complaint.

He struck "without leave to amend," defenses that claimed NCUA ratified, consented, approved, acquiesced or participated in the events; that the state's business judgment rule applied; that there was due diligence and reasonable investigation; that the decisions were made according to business custom and usage, candor and good faith.

Judge Wu also struck several other defenses "but only to the extent that they assert as affirmative defenses the alleged approval, acquiescence, consent, participation or ratification of NCUA examiners and supervisory personnel before the NCUA placed WesCorp into conservatorship in March 2009."  In these defenses, several defendants maintained there was reliance on others' expertise, apportionment, and consent, approval, acquiescence, authorization and ratification. These are struck as they relate to NCUA personnel and examiners.

The court did not strike defenses that "assert approval, acquiescence, consent, participation or ratification by the WesCorp board of directors" or its committees. It said the same for directives or guidance given to the officer defendants by WesCorp's board or committees. It also said the same for statements from NCUA to the WesCorp board or committees that might have influenced any directives or guidance given to the officers by the WesCorp board,  and for reliance by the defendants on people other than NCUA personnel such as professionals.

"By striking these affirmative defenses, the court does not preclude the officer defendants from offering evidence of the NCUA's statements and conduct to the extent that such evidence is relevant to the issue of whether the officer defendants breached their fiduciary duties, as alleged by NCUA."

He also struck--but gave the defendants the ability to amend these defenses--several statute of limitations defenses asserted by the WesCorp officials, and denied NCUA's motion to strike an estoppel defense made by Thomas Sidley, WesCorp's former chief risk officer.  NCUA and Sidley entered into a settlement agreement earlier this month.

The other former WesCorp officials named as defendants are: CEO Bob Siravo, Chief Financial Officer Todd Lane, Chief Investment Officer Bob Burrell and Human Resources Director Thomas Swedburg.

Last week  Judge Wu dismissed WesCorp officials' efforts to get NCUA to pay legal costs and indemnification but allowed the officials an opportunity to amend their indemnification claim based on state law before April 14.

Small town loses bank NorthCountry FCU steps in

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SOUTH BURLINGTON, Vt. (3/20/12)--NorthCountry FCU in South Burlington, Vt., has stepped in to provide financial services to residents of the small town of Alburgh, Vt., after People's United Bank announced it was closing its branch in the town.

The next closest financial institution to Alburgh is across the state line in Champlain, N.Y. The closest People's United Bank is on the other side of a lake and located in Swanton, Vt. (vpr.net March 15).

Banking in other towns isn't that much of an ordeal for those who commute to work.  However, Alburgh has a substantial number of elderly and low-income residents who don't have access to transportation, the radio station said.

After a search by Alburgh's "Find a Bank Committee," the $350.3 million asset NorthCountry FCU offered to negotiate to buy the People's United branch.

Previously, the committee had called other banks to see if they would open a branch in the town. The committee also considered starting up a credit union or having a mobile bank visit Alburgh, the station said.

New CU in Delaware opens

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WILMINGTON, Del. (3/20/12)--A new federal credit union--Stepping Stones Community FCU in Wilmington, Del.--opened Friday.

The credit union was created through a partnership between the Delaware Community Reinvestment Action Council (DCRAC), non-profit organizations, Delaware's financial services industries and Wilmington Community leaders.

U.S. Rep. John Carney and U.S. Sens. Tom Carper and Chris Coons (all D-Del.) Friday joined those organizations to celebrate the grand opening of the credit union.

Stepping Stones FCU's goal is to assist local residents in entering mainstream banking and give them the financial tools to improve their economic situations, the credit union said in a press release.

Membership in the credit union is open to people who live, work, worship, go to school or have an interest in alleviating poverty in Wilmington.

For $5, members can open an account at the credit union and have access to other financial education programs provided by DCRAC.

"Having access to bank services and affordable credit is critical to helping families escape poverty," said Carney, who serves on the House Financial Services Committee. "Part of the challenge is encouraging those in the community to take advantage of the savings and smart money management opportunities that [credit unions] provide."

Missouri small biz owner MBLs about jobs not politics

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ST. LOUIS (3/20/12)--A small-business owner from St. Louis who participated in the Small Business Hike the Hill event in Washington, D.C., in February, wrote a letter to the editor of a local publication about how a credit union came through for him when he needed a loan-interest-rate reduction, and his bank said no.

He said that member business loans (MBLs) should be about jobs, not politics.

"I went to Washington, D.C. to tell my story," wrote Bob Becker, owner of Becker Contracting Inc., in a letter to the St. Loius Business Journal. "A few years ago, I went to my bank to ask for a reduction in my loan rate, and was turned down flat. They handled all of my accounts, but wouldn't work with me on one loan. So I turned to the credit union that had helped me purchase my wife's wedding ring 30 years ago.

"The credit union lowered the rates of my loan, which meant more money for running my business," he continued. "As a small-business owner, every dollar counts. Having access to funds means I can take advantage of opportunities. Without that access, those opportunities would be shut off, and that means less money put back into the community."

Becker goes on to say that credit unions would like to lend more to small businesses, but they can't because of the MBL cap.

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

"The only group that opposes this legislation is the banks," Becker wrote. "I heard that some members of Congress didn't want to choose between banks and credit unions. But this bill isn't about credit unions. It isn't about banks. This is about helping small-business owners like me, who want to be able to grow their businesses and hire more people."

He concluded by urging Congress to listen to credit union leaders who are in Washington, D.C., this week for CUNA's Governmental Affairs Conference and to take action to help small-business owners.