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Small-biz loan guarantee program available for Pa. CUs

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HARRISBURG, Pa. (3/19/14)--Credit unions are reminded that they can use the Pennsylvania Capital Access Program (PennCap) to guarantee their small business loans programs.
 
PennCap was established under the auspices of the Pennsylvania Economic Development Finance Authority (PEDFA) in 1994.  Now, as the need for credit unions to provide these types of loans grows to meet increased demand, the Pennsylvania Credit Union Association (PCUA) investigated if the program would be valuable to credit unions, said Molly Snody, director of business advisory services.
 
Christina Mihalik, PCUA vice president of governmental affairs, coordinated meetings with the Pennsylvania Department of Community and Economic Development (DCED), which led to the league's discovery of the program and the fact that credit unions are allowed to participate. 
 
"Participating in PennCap would be a positive step forward for Pennsylvania credit unions and make us more recognizable as small business lenders," Snody added.
 
The reserve, owned and controlled by PEDFA, is designed to cover future losses from a portfolio of loans that are made through this program. Essentially, when a credit union signs up, $50,000 is set aside in a trust account managed by Mellon Bank. This $50,000 is held in trust as a reserve against future losses. Fees are collected at the onset of each program loan; they are collected from the borrower, the credit union and DCED, then added to the credit union's funds held in trust. 
 
The fees are combined with the initial $50,000 investment made by DCED.  If a program loan does go bad and the credit union suffers a loss, it can go to the trust to make up the loss, up to the aggregate amount held in trust for that credit union. "This is a loan portfolio risk mitigation tool that we found out is available to credit unions," Snody told News Now.
 
The program can be used for all ranges of loans, she said, so it fits credit unions of all sizes. The average member small business loan in Pennsylvania is $150,000, excluding microloans or those less than $50,000 granted to small businesses.
 
The Credit Union National Association strongly supports congressional efforts to increase the credit union member business lending cap to 27.5% of assets, up from the current 12.25% limit. It is estimated that credit unions would be able to lend an additional $13 billion to small businesses and help them create more than 146,000 new jobs in the first year after enactment, CUNA noted.

Deadlines nearing for Mich. league annual convention

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LIVONIA, Mich. (3/19/14)--Innovators and young credit union professionals are being sought for the Michigan Credit Union League's annual convention and exposition, set for June 5-7 in Grand Rapids.
 
This Friday is the deadline for the Innovation Competition, which highlights credit unions' creative and effective campaigns, initiatives, products or services. Credit unions should submit a 400-word essay or a video, three minutes or less, describing their innovation with a maximum of four supporting documents (Monitor March 17).
 
One winner will be selected from each asset group: Less than $50 million in assets; $50 million to $400 million in assets; and more than $400 million in assets. In addition to a $1,000 prize, all three winners and their innovations will be showcased at the June meeting.
 
The deadline for Crash Michigan applications is March 31. Up to 10 young credit union professionals will receive free registration to the annual conference. The Cooperative Trust, CUNA Mutual Group and the league are sponsoring credit union staffers under age 30 as Crashers in order to increase engagement and broaden the experience of the industry's future leaders.

CUNA marketing, biz development council unveils exec committee

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MADISON, Wis. (3/19/14)--The executive committee and its officers of the Credit Union National Association's Marketing and Business Development Council were unveiled at the council's annual conference in Orlando, Fla., last weekend.

With a nationwide network of more than 1,100 credit union leaders, the council serves as a resource for all CUNA members and their marketing and business development needs.

Michelle Hunter, senior vice president of marketing and development for CU of Southern California, Whittier, Calif., $711 million in assets, will stay on as council chair; while Kathryn Davis, senior vice president of marketing and human resources for Xceed Financial CU, El Segundo, Calif., $807 million in assets, will remain vice chair.

Andy Reed, manager of business development for $5.6 billion-asset American Airlines FCU, Fort Worth, Texas, will take the second vice-chair seat.

Brian Grytdal, vice president of marketing at Horizon CU, Spokane, Wash., $584 million in assets, was newly elected to the committee, replacing Sean McDonald, director of business development for Mid-State FCU, Carteret, N.J., $16 million in assets.

The CUNA Marketing and Business Development Council executive committee also includes:
  • Amy Davis, vice president of marketing, Red Canoe CU, Longview, Wash., $581 million in assets.
     
  • Nancy Hutchinson, senior vice president of marketing and business development, MPECU, Duluth, Minn., $85 million in assets.
     
  • Jason Lindstrom, chief marketing officer, Belvoir FCU, Woodbridge, Va., $311 million in assets.
     
  • Mia Perez, chief administrative officer, Louisiana FCU, La Place, La., $170 million in assets.
     
  • Hilary Reed, vice president of marketing, Bucks First FCU, Bristol, Pa., $84 million in assets.  
     
  • Amber Scott, vice president of marketing, 1st MidAmerica CU, Bethalto, Ill., $497 million in assets.
     
  • Debra Trautman, vice president of corporate marketing, Maine Credit Union League.

CU loan balances outpace Ohio savings in 2013

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COLUMBUS, Ohio (3/19/14)--For the second straight year, loan balances at Ohio credit unions increased more than savings balances, according to a report on 2013 numbers from the Ohio Credit Union League.
 
Overall, credit union loan portfolios edged up 1.5% (6% annualized) in the final quarter of 2013 and jumped 9.9% in the 12 months ending December 2013. Savings balances, meanwhile, had a slight uptick of 0.6% (2.4% annualized) in the fourth quarter and 3% over the year.

Stronger economic and labor market conditions--Ohio added 26,000 jobs in 2013, according to the Census Bureau--resulted in across-the-board loan improvement.
 
In response to pent-up demand for vehicles, new auto loans surged 25.6% from a year prior, while used autos accounted for a 9.8% increase.
 
More importantly, the league's report noted, lending saw improvements in nearly every key category. Gains included first mortgage loans, 10.9%; personal unsecured loans, 8.6%; member business loans, 8.4%; and credit cards, 7.1%. 
 
Total membership for credit unions statewide increased by 3.04% in full-year 2013--the strongest annual increase in more than a decade--at a rate significantly higher than the state's population growth of 0.15%.
 

CU joins naturalization initiative to help Silicon Valley workers

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SAN JOSE, Calif. (3/19/14)--Technology CU, San Jose, Calif., joined three other Silicon Valley companies in partnering with the Bethlehem Project Monday to assist employees holding legal-immigrant status achieve citizenship.

The Bethlehem project, in its first year of work as a pilot program that funds services for immigrants pursuing naturalization, will connect the $1.7 billion-asset credit union--and the other participating businesses--with local providers of legal assistance and citizenship test preparation, which they then will offer on-site to their employees at no cost.  

Nokia, ABM and DTZ in Silicon Valley round out the rest of the companies in the program.

"Immigration has shaped the landscape of Silicon Valley for the last century, and it will continue to do so for the foreseeable future," said Barbara B. Kamm, Technology CU president/CEO. "It is one of the biggest influences on our businesses and economy, and one of the most important issues we face as a community."

Qualifying employees will receive a citizenship information session; free one-on-one citizen legal assistance; civics and English test preparation; and help submitting the N-400 citizen application.

About 385,000 legal immigrants who are eligible for citizenship live in Silicon Valley, according to a March 18 report by NPR.

Studies have shown "a clear economic advantage to becoming a citizen," the report said. "Immigrants who naturalize see at least a 5% hike in their wages and they can earn between 50% to 75% more than non-citizens."

So far, the Bethlehem Project has partnered with more than 50 businesses nationwide. This new San Jose-based program is funded by the New Americans Campaign, the Grove Foundation, the Silicon Valley Community Foundation and the James Irvine Foundation.

Prize-linked savings, parity bills intro'ed in N.Y. Legislature

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ALBANY, N.Y. (3/19/14)--Two pro-credit union bills recently made their way to the floors of the New York Legislature (The Point March 18).

The first bill, S.6805/A.9037, would allow credit unions--and other financial institutions--to offer members prize-linked savings accounts that would provide consumers with incentives to actively put away money.

The other bill is an extension of the state's "wild card" law, enacted in 2007, that allows state-chartered credit unions to apply for and exercise banking powers only federally chartered credit unions can now utilize, called S.6735/A.9057.

If passed, the law would be extended for an additional five years.

Versions of both bills were passed by the Legislature last year, but Gov. Andrew Cuomo vetoed each, citing concerns over some of the language used in the bills.

Leaders of the Credit Union Association of New York have been working with the governor's office over the past year to help clean up any issues with the bills, while continuing to drive them forward.