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Post office cutbacks could affect CUs marginally

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WASHINGTON (3/3/10)--Mounting costs and dwindling business this year have the U.S. Postal Service pushing for changes in delivery schedules and prices. Some of the changes--if implemented--would result in credit unions adjusting their operations and members adjusting their expectations. The Postal Service is facing an estimated $238 billion in losses in the next 10 years. Last fiscal year it experienced a 13% decrease in mail volume--more than double any previous decline. Last year alone the service lost $3.8 billion. Postmaster General John E. Potter is seeking changes such as an end to Saturday deliveries, longer delivery time for letters and packages, and increases in the prices of postage stamps (The Washington Post March 2). The changes aren't a done deal. According to a statement from the post office obtained by Dupaco Community CU, Dubuque, Iowa, the proposals made to legislators have not moved on, and there is nothing definite. Still, News Now asked credit unions how such changes would impact them. Dupaco Community CU, which had $777.8 million assets at the end of 2009, has 55,000 members, said Tami Rechtenbach, director of member service delivery at the credit union. She addressed the issue of losing Saturday delivery first. "Saturday's not a big day for outgoing mail for us. We mail from 2,100 to 2,400 pieces of mail every day on Monday through Friday. On Saturday, we mail only 10 or 15 pieces," Rechtenbach told News Now. "So from a processing point, not much would be changing." Most of the credit union's branches are open 8:30 a.m. to 12:30 p.m. on Saturday. A branch open Saturday and Sunday in a store does its processing on regular business days anyway, she said. However, skipping a day of delivery on the weekend means it will take at least a day longer for mail to get to a member. One option is to go electronic. Dupaco Community has a "very robust and very popular" online banking program, with online statements. "We do try to get people to use electronic delivery on statements, but a lot of folks stand by their paper statements," Rechtenbach said. "Those with certified CD notices and certificate maturities who are expecting a check will want the same service," even though the check may take four days to arrive instead of the next day. "We can push electronic payment as a quicker delivery method," she said, "especially to those who want their checks right away." "We'll have to pay attention to deadlines and adjust placing the mail accordingly," she said. "We would have to make sure we've allowed time to enable members to receive it." ORNL FCU, Oak Ridge, Tenn., doesn't see much impact from the proposed changes in terms of budget or delivery. "Over all, I don’t think it will affect us too much," said Nancy J. Ballard, public relations director at ORNL FCU, Oak Ridge, Tenn. "If the changes go through as planned, we would just make adjustments as needed. For example, with our members, we have been encouraging the shift to electronic services such as e-Statements, Web Bill Pay, and newsletters online, for quite some time," she told News Now. Delays in direct mail marketing pieces may be delayed if mail service isn't available or if layoffs at the postal service affect the speed of delivery. "If we see a delay in delivery of an item, then we may adjust our editing and printing deadlines to accommodate a timely arrival of our news or promotional pieces." Ballard did not envision having problems with third party vendors because of the proposed delays. "We have very good relationships with our third party vendors and would be able together to avoid any bumps in the road," she said. "With our budget, we usually do a good job of predicting what we will spend. If costs are over our projections, we have ways to adjust," Ballard added.

Arizona CUs raise more than half a million for hospitals

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PHOENIX (3/3/10)--Arizona credit unions raised $558,574 for Credit Unions for Kids, the credit union movement's program for raising money and supporting Children's Miracle Network hospitals, said the Arizona Credit Union League. In 2009, Phoenix credit unions raised $493,341 to benefit Phoenix Children's Hospital, while Tucson credit unions raised $65,233 for Tucson Medical Center. Phoenix funds help support One Darn Cool School, a K-12 inpatient education program enabling kids to continue their regular classroom studies while at the hospital. Tucson funds help the Hands On Therapy program that ensures a child is not held back in development. Desert Schools FCU raised $324,476, the most money from any Phoenix credit union for the Phoenix hospital. It was followed by First CU ($45,500), TruWest CU ($28,806), AEA FCU ($14,000) and the league ($13,779). In Southern Arizona, AEA FCU was the top earner, bringing in $14,000. Rounding out the top five contributers were Pima FCU, $10,000; Arizona Central CU, $7,500; Hughes FCU, $6,618; and First CU, $5,000. Overall, fundraising in Arizona ranked fourth among all other states in the country, trailing only Texas, Oregon and California. Phoenix totals ranked third among all U.S. cities, said the league.

Development Education demand continues to rise

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MADISON, Wis. (3/2/10)--Despite predictions that credit unions would stay home and wait out the recession, the Credit Union Development Education (DE) training class scheduled for April 14-21 is already half-full. The first of this year’s DE training classes will have a new location: The Lowell Center, part of the University of Wisconsin-Extension in Madison, Wis. “DE Training in 2010 will incorporate emerging economic discussions while continuing to provide critical lessons in cooperative principles and credit union philosophy, all of which is applied to domestic and international development issues” said Tom Decker, DE training facilitator and director of social impact management for the National Credit Union Foundation (NCUF). "We plan to show this year’s trainees how the member-centric business model, as well as the principles of cooperative social responsibility, will enable credit unions to weather the economic storm better than most for-profit institutions,” he said. DE training is open to everyone. Participants will:
* Learn skills in credit union outreach initiatives, problem solving, technical assistance, team building, and public presentations; * Become certified as Credit Union Development Educators (CUDEs) and join a networking group of more than 1,000 graduates across America and in more than 30 other countries; * Realize that local issues are indeed global--and that global issues are local; * Understand that credit unions grow stronger by working cooperatively; and * Return to their jobs with new understanding of how to promote cooperative principles and credit union values as distinct advantages in today’s competitive financial services marketplace.
“All financial institutions offer a commodity,” said 2008 graduate Lily Newfarmer, CUDE and president/CEO of Tarrant County CU, Fort Worth, Texas. “We are all trying to get the same loans, checking accounts, etc. What sets credit unions apart from our fierce competition are our cooperative principles and credit union philosophy. If we don’t embrace these differences and show our members that we’re better because we’re unique, our very existence is in jeopardy.” Scholarships are available through DE Educational Fund and through several state credit union foundations and leagues. Credit union advocates interested in a scholarship can contact their state foundation or league, or contact Decker at tdecker@ncuf.coop or 800-356-9655, ext. 4374. A list of states confirming DE scholarships is posted on the NCUF website. Use the resource link. NCUF is the primary sponsor of the DE program. Support is provided by CUNA Mutual Group, the Credit Union National Association, the World Council of Credit Unions, state foundations and leagues.

CUSO CollaborationInnovation Award nominations sought

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NEWPORT BEACH, Calif. (3/3/10)--The National Association of Credit Union Service Organizations (NACUSO) announced Monday that nominations for the 2010 CUSO Collaboration and Innovation Award are being accepted from NACUSO members. The formal announcement and presentation of the award to the winning CUSO will be April 25 during the 2010 NACUSO Annual Conference in Las Vegas. Nominations are due by March 29. NACUSO will acknowledge all CUSOs that submit applications during the annual conference. The 2010 CUSO Collaboration and Innovation award will be judged using these criteria:
* A clear description of how the organization and the collaborative model have brought value to the industry, owners and credit union members; * Thought leadership and critical thinking; * Value created through use of collaboration; innovation in organizational design; * Implementation and execution; and * Results, outcomes and performance.
NACUSO will accept self-nominations; however, winners of any NACUSO award from 2007-2009 are ineligible. Nominations may be sent to NACUSO, PMB 3419 Via Lido #135, Newport Beach, CA 92663 or Shawna@nacuso.org. For more information, use the link.

CU System briefs (03/02/2010)

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* UNION, N.J. (3/3/10)--Rep. Leonard Lance (R-N.J.) Monday pointed out credit unions are the "good guys" and not responsible for the nation's banking crisis. He made the comments at a packed multi-chapter meeting hosted by the Union-Morris chapter of the New Jersey Credit Union League. "I do not think we should be doing anything to limit credit unions," said the congressman. "We should be strengthening credit unions. I would be opposed to anything that puts more limits on credit unions." Lance noted that credit unions "are well represented by your leadership. We will be continuing our conversation to better understand your concerns." He noted that New Jersey's delegation hiking the Hill during the Credit Union National Association Government Affairs Conference made him aware of the legislation to raise credit unions member business lending cap. He said he understands the importance of the MBL issue to credit unions and his office is evaluating the legislation. Lance is a member of the House Financial Services Committee and serves on its subcommittee on financial institutions and consumer credit. (Photo provided by the New Jersey Credit Union League) ... * ST. PAUL, Minn. (3/3/10)--The Minnesota Credit Union Foundation funded a $3,000 grant to ICOP, a non-profit direct service organization that provides affordable housing, financial education and wealth accumulation for low-incomers. The grant will provide financial literacy education for its clients. The classes are held in collaboration with West Financial CU, based in Medina. "IOCP has an excellent track record of integrating financial education into its larger goal of financial independence for low-income families," said Kristi Mukomela, foundation chair. ICOP expects to work with more than 30 individuals during its two financial education sessions, slated for May and October ... * ALBUQUERQUE, N.M. (3/3/10)--The Credit Union Association of New Mexico (CUANM) debuted its revamped website at www.cuanm.org last week. The site is now more user friendly, protects credit union professionals' information with passwords and helps credit union members or prospective members find out more about credit unions. The site will include key events and topics on the home page and an up-to-the-minute feed of important credit union issues and news, said Mary Beth King, communications coordinator at the league. It also will link to CUANM Learning Center, Kirby Kangaroo and CU Succeed youth services, a CUANM Twitter account, and other related sites. Credit union professionals can sign up for an account to access password-protected information and receive the CUANM Network newsletter ...

Mich. CUs at governors small-business roundtable

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LANSING, Mich. (3/3/10)--Michigan credit unions were part of a roundtable discussion held Feb. 24 in Grand Rapids by Gov. Jennifer Granholm to highlight examples of entrepreneurs who started their businesses with local sources of capital. The event was part of a push by Granholm to explain the state’s focus on linking budding businesses with loans and resources they need, including credit union business loans. Glenn Ray, director of public affairs for the Michigan Credit Union League, was part of the roundtable (Michigan Monitor March 1). An initial $43 million put forth by Michigan credit unions for loans to small businesses was mentioned during the discussion. “When other banks cut back on lending last year, Michigan credit unions increased business loans by 17%,” Ray told Mlive.com. Granholm emphasized the need for Michigan to move from a “20th century economy” comprised mostly of big industry toward an economy built on entrepreneurs and small businesses.

Judge denies U.S. Central defendants motion to dismiss

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BIRMINGHAM, Ala. (3/3/10)--A U.S. District Court judge in Alabama Tuesday denied a motion to dismiss Corporate America CU's lawsuit against individual director defendants of U.S. Central FCU. U.S. District Judge Inge Johnson noted in the order that the "complaint raises complex factual issues that are more appropriately addressed in motions for summary judgment. The motion to dismiss is therefore denied." In the lawsuit, Corporate America alleges that U.S. Central violated the Securities and Exchange Act and state laws when it solicited Paid-In-Capital (PIC II) funds from member credit unions. It claims U.S. Central concealed the extent of its investment losses. Last week Judge Johnson denied a separate motion to dismiss filed by U.S. Central's accounting firm, RubinBrown LLP.

Arrowhead CU sells insurance subsidiary

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SAN BERNARDINO, Calif. (3/3/10)--Arrowhead CU, San Bernardino, Calif., sold its Sawyer Cook Insurance subsidiary Friday, according to local media reports. The subsidiary was sold to an undisclosed firm for an undisclosed amount (Daily Bulletin March 2). The firm kept 13 employees but laid off nine others, the newspaper said. The sale will generate $750,000 in revenues for the credit union, which had forecast $4 million to $5 million in profits this year. It suffered a $78 million loss between July 2008 and September. In the most recent quarter, Arrowhead reported $1.7 million in earnings. Arrowhead took several measures to raise its capitalization ratio last year, including closing four branches and laying off 60 employees, the newspaper added. Sawyer Cook offers homeowner, auto, health and other types of insurance.

CU Better Choice saved consumers 10M

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HARRISBURG, Pa. (3/3/10)--Through Credit Union Better Choice, a payday loan alternative, credit unions have issued more than 28,000 loans totaling more than $13.4 million dollars since 2006. Members saved nearly $10 million dollars by using the program instead of a traditional payday lending product. Credit Union Better Choice borrowers also placed $1.3 million into their savings accounts. Borrowers used loans for Christmas gifts, car repairs, traffic fines and funeral expenses. The program is offered through participating credit unions and is a partnership of the Pennsylvania Credit Union Association and the Pennsylvania Treasury Department. Since the program’s inception, 82 credit unions have agreed to offer Credit Union Better Choice loans, with more participants continuing to sign on. From July 1 thorough December 31, about 8,163 loans totaling $3.9 million dollars were issued. For all of 2009, there were 13,462 loans, totaling $6.5 million, issued. “In our rough economy, many Pennsylvanians are finding that their paychecks do not stretch far enough when unexpected expenses occur. I’m proud that credit unions offer an alternative to the high-cost payday lenders for short-term borrowing needs,” said Jim McCormack, president/CEO of the Pennsylvania Credit Union Association. “More important, the credit unions are offering financial counseling to assist borrowers with money management and credit.” “Better Choice connects hard-working individuals with the quick cash they occasionally need for an unexpected expense or between paychecks, and helps them avoid the ‘debt trap’ of usurious loans--in fact, since inception, Better Choice has spared Pennsylvanians nearly $10 million in interest and fees,” Treasurer Rob McCord said. Pennsylvania consumers saved an average of 80 cents in loan fees and costs for every dollar borrowed through a Credit Union Better Choice loan. That translates into more than $9.6 million that consumers kept in their own pockets by using credit unions that offer Credit Union Better Choice loans. Also, borrowers were able to place more than $1.3 million into savings accounts for future needs. To learn more about the program, use the link.

Md.D.C. Dollars and Sense Guide aimed at commuters

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COLUMBIA, Md. (3/3/10)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) has partnered with The Washington Examiner to publish a 16-page supplement promoting the benefits of credit unions. They hope the supplement will reach more than a half million Washington, D.C.- area consumers. The supplement, “Dollars and Sense Guide: Credit Union's Resource for Financial Management,” was delivered to Washington, D.C.-area homes on Sunday, and around town on Tuesday, according to MDDCCUA. The supplement heightens consumer awareness of credit unions and features articles written by financial experts highlighting the distinct differences between credit unions and banks, credit union safety and soundness, financial literacy, and innovative products and services. It has been delivered to every legislative office on Capitol Hill and was unveiled during the state association’s annual luncheon at the Credit Union National Association’s Governmental Affairs Conference (GAC). “The supplement also showcases area credit unions to other credit unions on a national basis with distribution at last week’s GAC, and promotes the upcoming Dollars and Sense Expo scheduled for Saturday,” the association said. The Dollars and Sense Expo, which is sponsored by MDDCCUA and will take place in Washington, D.C., will offer consumers financial resources, free tax preparation for workers earning less than $48,000 per year, homebuying information, job interview skills and other activities. To view the supplement, use the link.

Wash. State Rep. Santos receives Desjardins award

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FEDERAL WAY, Wash. (3/3/10)--Washington State Rep. Sharon Tomiko Santos (D-37) has been awarded the national credit union system's Desjardins Youth Financial Education Award. The award recognizes her seven years of legislative leadership and innovation in financial literacy. Santos is the only state lawmaker in the nation to receive the 2009 award, which will be presented to her at an upcoming banquet. Santos, a member of the state Insurance, Financial Services and Consumer Protection Committee, first sponsored legislation in 2003 (HB 2009) requiring that financial education be added to the Washington schools' curriculum. It was an uphill battle, with few colleagues understanding the importance of financial literacy education in public schools. The bill failed, but during the next five years, Santos worked to educate lawmakers. The 2003 bill was followed in 2004 with HB 2455, which created the Financial Literacy Public Private Partnership (FLPPP)--now called the Financial Education Public Private Partnership (FEPPP). In 2006, SB 6386 provided the FLPPP with $50,000 in funding. "Without Rep. Santos' unwavering leadership, the public-private partnership would never have gotten off the ground in such a timely fashion, much less received state funding," said Washington Credit Union League President/CEO John Annaloro. "Washington can be proud of this state legislator." In 2007, Gov. Chris Gregoire included the $50,000 appropriation in her budget. Santos sponsored further legislation that expanded the partnership's responsibilities. "2007 was a milestone year for financial education in Washington thanks to the efforts of Rep. Santos," said Stacy Augustine, league senior vice president and a member of FEPPP. "It really shouldn't come as a surprise that as the economy declined, public interest and recognition of the importance of financial literacy have increased." In 2008, as the national economy began wavering, the legislature and educators looked to FEPPP for leadership. The Office of the Superintendent of Public Instruction began working with FEPPP to officially make financial education part of the state social studies standards in seventh grade. FLPPP, chaired by Santos, adopted content standards for personal finance for the state and developed a communication plan to reach teachers, parents, legislators and the media. Its professional development plan created a five-day teacher training workshop and specialist designation for teachers in financial education. Also in 2008, the state legislature passed SB 6272, expanding financial literacy through education and counseling to promote greater homeownership security. Santos served on a new financial literacy workgroup which made recommendations to the governor for legislative enactment in 2009. The group recommended a wide reaching, comprehensive approach to promote and education the public about financial literacy issues. Santos remains chairman of the FEPPP, which is creating a financial education specialist designation for Washington teachers.