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Youth Saving Challenge can help tell positive story

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MADISON (3/25/09)--Credit unions will have another opportunity to emphasize the credit union difference with the National Youth Saving Challenge during National Credit Union Youth Week April 19-25. The challenge provides a "good news" story that credit unions can take to their local media. "The Youth Week and Saving Challenge is the perfect opportunity to help credit unions tell a very positive story--one that isn't told by the banks," said Lin Standke, manager of youth programs at the Credit Union National Association (CUNA). A recent Nielsen study notes that positive stories increase consumers' confidence in their financial institution, she said. Reading positive stories in the press about the institution was cited by 44% of respondents as a factor that would increase their confidence in the safety and soundness of their financial institution. Ads, mail offers, and Internet ads ranged from 25% to 21% as factors increasing confidence. (See "Study: Ads build financial-brand confidence" is News Now's System news section). This year's program has expanded. "This year, based on credit union feedback, the Credit Union National Saving Challenge runs the entire month of April," said Standke. "That means a credit union can promote the challenge during Youth Week, all of April, or any days it wants." Dawn M. Ambuehl-Sadek, financial education specialist at the A+ FCU, Austin Texas, put together a nice Youth Week page on her credit union's website, Standke added. To view it, use the resource link. As of Tuesday, 324 credit unions--24% of them new to the program--signed up to participate in the Saving Challenge. Combined, credit unions expect to collect more than $9 million in deposits. "We anticipate many more sign ups in the coming week," she said. The theme for National Credit Union Youth Week is The Magic of Saving. Use the links for information about the free saving challenge and how to promote youth week, or to sign up for the challenge.

CUs loan sparks interest in electric cars

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BERKELEY, Calif. (3/25/09)--Cooperative Center FCU will finance 100% of the purchase price of a ZENN electric car at a local auto dealership with fixed interest rates as low as 5% for those with good credit. “We felt it was good for the environment and good for consumers as well,” said Gary Bell, Cooperative CEO ( March 14). A demo model of the $19,000 car, which goes 35 miles between charges, attracted a lot of members who swarmed around the vehicle in the credit union’s lobby, the newspaper said. Obtaining financing for vehicle purchases is getting tougher--vehicle financing is down 32% compared with a year ago, according to Experian Automotive. Credit unions such as Cooperative are becoming “safe havens” for borrowers who are having a harder time obtaining car loans from banks battered by the tough economy, the paper said. “At this point, the credit union industry is solid,” Karen Dorway, president and director of research for Bauer Financial, told the paper. BauerFinancial is a firm that analyzes banks and credit unions. Credit unions are in better shape than large banks, so they have money available for vehicle financing, Chinton Talaati of online auto website, told the paper. “Credit unions are emerging as one of the first places to look when financing a vehicle,” he added.

Study Ads build financial brand confidence

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NEW YORK (3/25/09)--Consumer confidence in the long-term health of financial institutions is significantly influenced by advertising and marketing efforts, according to a new study by Nielsen IAG. “This research shows that ‘out of sight’ can mean ‘out of business,’” said Richard Khaleel, executive vice president of Nielsen IAG’s Financial practice. “The current economic climate makes it more important than ever for financial institutions to bolster confidence among their clients, and this study clearly demonstrates the link between advertising and confidence levels. “With constant scrutiny on the industry, it’s clear that taking control of the message in advertising and press can make all the difference for a brand,” he added. The study comes as data indicate year-to-year reductions in advertising expenditures in the financial services and insurance categories. Year-over-year ad spending in financial services and insurance was down 13.4% in 2008 compared with 2007. The study also found that confidence was linked to age and affluence, and the amount of risk associated with the financial institution. Older adults aged 55-plus and those with assets over $100,000 were more confident than average adults. Financial institutions fared better than life insurance companies and investment firms. Overall, a minority of study respondents said they had “complete confidence” in their financial institutions:
* Less than 38% had confidence in their checking and savings institution; * Only 28% were confident of the company that manages their investment or retirement accounts; and * Only 28% had confidence in their life insurance company.

CUDL Kia team on auto discounts in Wash. Ore.

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ONTARIO, Calif. (3/25/09)--CUDL, which administers a point-of-sale and indirect auto-lending network for credit unions, announced it has entered into a new partnership with auto manufacturer Kia Motors America (KMA) to provide discounts in Washington and Oregon. The partnership between the credit union service organization (CUSO) and KMA provides members at CUDL’s partnering credit unions access to special manufacturer discounts on the purchase of new Kia vehicles. The program will be rolled out in Washington and Oregon. Members in those two states will receive discounts offered on all 2008 and 2009 new Kia vehicles. Credit union members purchasing a new Kia vehicle will receive either a $500 or $1,000 discount, depending on the vehicle model purchased. The initial discount program will run through April 30, and will be offered to CUDL’s 71 credit unions and 22 partnering Kia dealerships in Washington and Oregon. Executives from CUDL and KMA confirmed that the partnership includes expanding the discount program into other markets nationwide, although a timetable has not been finalized. The CUSO’s auto lending network currently includes 700 credit unions and their 20 million members nationwide, and includes more than 260 partnering Kia stores throughout the U.S. “This is a great opportunity for us to continue to build the Kia brand and provide additional financing options to new and existing customers as well as to our dealers,” said Tom Loveless, vice president of sales, KMA. “It also serves to help us strengthen our network of partnerships with various financial institutions and relationships with their members.” CUDL credit union members will save $500 on any new Kia Spectra, Rio, Sportage, Optima or Rondo models, and $1,000 on any new Kia Sedona, Sorento, Amanti or Borrego. The credit union member discount can be used in combination with any other incentives offered by Kia dealerships, providing members with deeper discounts. “Our goal through this new partnership is to help our credit unions capture loans, offer members discount value on their next Kia purchase, and to provide our Kia dealerships with new customer opportunities to help grow their bottom lines,” said Jerry Neemann, CUDL’s executive vice president and chief security officer. CUDL also has partnered with Livonia, Mich.-based CUcorp to promote “Invest in America,” credit unions’ nationwide auto lending program with General Motors and Chrysler.

A.M. Best affirms CUNA Mutual rating adjusts outlook

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MADISON, Wis. (3/25/09)--A.M. Best affirmed its “A” (Excellent) financial strength rating for CUNA Mutual Group in its annual ratings review, and adjusted its outlook for CUNA Mutual. A.M. Best revised CUNA Mutual’s outlook from stable to negative, consistent with the rating agency’s negative outlook for the entire life insurance sector. “Since late in 2007, CUNA Mutual has been taking steps to maintain its financial strength in the midst of this economic crisis,” said Jim Buchheim, CUNA Mutual vice president, corporate communications. “We’re pleased to continue to earn strong, independent financial ratings in these difficult times.” The “A” rating applies to the principal companies of CUNA Mutual Group--CUNA Mutual Insurance Society, a life and health insurer, and CUMIS Insurance Society Inc., a property and casualty subsidiary. The “A” rating is the third highest rating of 16 ratings categories A.M. Best issues. In affirming the rating, A.M. Best also acknowledges CUNA Mutual’s “long-established position as a leader in providing financial solutions through its life, health and retirement products to members and employees of credit unions. “Due to the ongoing implementation of three years of transformation initiatives, CUNA Mutual has improved its overall operating efficiency in its core target market of credit unions,” A.M. Best added. CUNA Mutual’s financial strength and capital position remain strong. The company’s revenues grew by nearly 7%, and operating gain exceeded $150 million last year. CUNA Mutual’s statutory surplus declined slightly in 2008 as a result of investment losses. A.M. Best also issued several secondary ratings to CUNA Mutual Group subsidiaries:
* The Issuer Credit Ratings on CMIS and CUMIS were adjusted from a+ to a. Because CUNA Mutual has issued no public or private debt and has limited borrowing, these ratings have little significance, CUNA Mutual said; * The financial strength rating of MEMBERS Life, a dormant, downstream life company that is not core to CUNA Mutual’s operations, was moved from A- to B++ with a stable outlook. The policies still outstanding are valid and the company’s ability to pay on their value is completely unaffected by this adjustment, CUNA Mutual said; and * A stand-alone rating on each of CUNA Mutual Group’s property/casualty entities was issued. CUMIS Insurance Society Inc., the primary property/casualty company, was affirmed at “A” with a stable outlook. CUMIS Specialty, a surplus lines company, had its rating adjusted to A- with a stable outlook. There are assets in CUMIS Specialty, but no business has been written.
A.M. Best Co. is a full-service credit rating organization of financial services industries, including the banking and insurance sectors.

Michigan state-chartered CUs can buy non-CU assetsliabilities

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LANSING, Mich. (3/25/09)--The state regulator has granted state-chartered credit unions in Michigan additional powers to acquire assets and assume liabilities, including deposits from depository institutions other than credit unions, in purchase and assumption contracts. Michigan's Office of Financial and Insurance Regulation (OFIR) Commissioner Ken Ross authorized the additional powers on March 3. The power is already available to federally chartered credit unions and other domestically chartered non-credit union depositories, according to a March 13 letter to state-chartered credit union boards from Deputy Commissioner Roger W. Little. Authorizing the power provides state-chartered credit unions greater opportunity to compete with other financial service providers and to better meet the financial needs of their memberships and communities, said Little. The order was requested on Dec. 4, 2008, by Lake Michigan Credit Union, a state-chartered credit union. The order said it would "level the competitive playing field among credit unions operating in Michigan."

CU System briefs (03/24/2009)

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* THORNDALE, Pa. (3/25/09)--The Coatesville Relief Fund, established at Citadel FCU, Thorndale, Pa., after arson attacks in the town Jan. 24 destroyed 15 rowhomes, is helping those affected by the fires. Funds were distributed two weeks ago to 25 of the 35 families relocated to permanent housing. Money was distributed, based on family size, and was allocated to housing needs, utilities, moving items and a Visa gift card. “Citadel’s roots are in Coatesville, so many of our members have been affected by both the physical destruction of these meaningless fires and the continuing fear that they have caused,” said Jeff March, Citadel president/CEO. Citadel opened the Coatesville Family Fund after the fires. Fifteen separate fires have been started in the area by arsonists (News Now Feb. 5). Citadel has $1.2 billion in assets... * BURNSVILLE, Minn. (3/25/09)--US FCU, Burnsville, Minn., reported a 79% increase to 336 auto loans for February--the highest number of loans the credit union has had in the past 5 years. USFCU offered incentives through the Invest in America program, which was launched in February and offers discounts for General Motors and Chrysler vehicles. It also launched a “Do the Dashboard Hula” campaign, which offers new car rates extended to used vehicle purchases of model years 2005 or higher, a refinancing discount of 2% off loans financed elsewhere and no payments for the first 90 days on most vehicle loans ... * RALEIGH, N.C. (3/25/09)--State Employees’ CU (SECU) pledged $300,000 through the SECU Foundation to help build a six-suite addition to Hospice House of Rutherford County. The addition will be completed in May. The foundation pledge completed the “Hospice Hands of Hope” campaign to construct the addition. The house is now known as the SECU Hospice House of Rutherford. Attending the check presentation were (from left): Lt. Gov. Walter Dalton; Kim Hollifield, senior vice president, SECU, Forest City; Rita Burch, director of SECU Hospice House of Rutherford; and Michael Benfield, chairman, SECU Forest City Advisory Board. SECU, Raleigh, N.C., has $16 billion in assets. (Photo provided by State Employees’ CU) ... * PALATKA, Fla. (3/25/09)--A robbery attempt at Putnam County FCU, Palatka, Fla., was foiled when two men couldn’t get into the credit union’s safe. Two robbers approached Putnam’s manager at 6:30 a.m. Monday as he was entering the credit union. The robbers told him to open the credit union and safe. One robber carried an assault rifle (St. Augustine Record March 24). When the robbers weren’t able to get into the safe, they stole the manager’s wallet and fled. The manager was not injured, and police are still investigating the incident ...

Minnesota CUs take part in Co-op Day at Capitol

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ST. PAUL, Minn. (3/25/09)--Representatives from Minnesota credit unions and the Minnesota Credit Union Network (MnCUN) joined forces with the Cooperative Network on March 11, to take part in the first annual Co-op Day at the Capitol in St. Paul. Attended by more than 75 participants, the new grassroots event was offered to representatives from cooperative businesses in all industries to educate elected officials about the uniqueness of co-ops, discuss legislative issues and build long-term relationships. Cooperative Network is the Minnesota and Wisconsin trade association of cooperative businesses. It serves more than 600 member cooperatives, including credit unions.
Seven Minnesota credit union representatives attended Co-op Day at the Capitol in St. Paul March 11. Pictured, from left: Russ Plunkett, Postal CU, Woodbury; Monica Weber, MnCUN; Bill Oemichen, Cooperative Network; and Neil Christy, MnCUN. (Photo provided by Minnesota Credit Union Network)
Three individuals from the MnCUN, along with three representatives from SPIRE FCU, Falcon Heights, and one from Postal CU, Woodbury, attended the event. “It’s important that all credit unions remember that we are a part of the larger co-op community, and just as important for our legislators to identify us as members of the greater cooperative family,” said Neil Christy, MnCUN vice president of education and credit union development, and Cooperative Network board member. “It is very rewarding to work with the representatives of other co-ops to advance the cause for cooperative member/owners throughout the state,” Christy added.

Cash-strapped California gets help from CU

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SACRAMENTO, Calif. (3/25/09)--Even states can turn to their credit unions when strapped for cash in tough times. The state of California got a boost from Sacramento-based The Golden 1 CU, when the credit union bought $500 million in short-term "revenue anticipation notes" in a private placement deal Monday with the state Treasurer's Office. By conducting a private placement with the $6.9 billion asset credit union, the state reduced to $1.5 billion the amount of borrowing it must do to meet its cash-flow needs through the 2008-2009 fiscal year, (Sacramento Business Journal and Dow Jones via The Wall Street Journal March 23). The Golden 1 is charging the state 2.2% interest. The notes will mature on June 23, said a release from the Treasurer's Office. The state also began a two day $4 billion general obligation bond offering Monday and sold $2.4 billion to individual investors.

Mich. league CUs visit St. Lucia partners

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CASTRIES, St. Lucia (3/25/09)--Jonathan Elliott, CEO and manager of MemberFocus Community CU, Dearborn, Mich., sees both similarities and differences between Michigan’s credit unions and those on the Caribbean island nation of St. Lucia. Elliot is part of a recent seven-member Michigan Credit Union League delegation that recently visited St. Lucia as a part of the World Council of Credit Unions’ (WOCCU) International Partnership program.
Click to view larger image Michigan Credit Union League delegation members (from left) Jonathan Elliott, Bill Harvey and Jan Rose learn about member services from a St. Lucia credit union staff member.
Click to view larger image St. Lucia Co-operative League CEO Alexander Joseph (left) provides a tour of island credit unions for Michigan league delegation participants Bill Harvey, Kathleen Bennett and Martha Ninichuck. (Photos provided by the World Council of Credit Unions)
“We're all trying to educate our members about financial issues to help them save and think about the future, and the youth market is a concern for all of us,” Elliot said. “The major difference has to do with a lack of financial transaction technology in St. Lucia. The availability of electronic services is just not there.” One of the delegation's goals was to work towards increasing technological capabilities by conducting a needs assessment of St. Lucia's credit unions during its visit to the island. A daylong seminar on new product promotion, cooperative advertising, credit union consolidation, mergers and shared branching was a focal point. A seminar on operational solutions, including technological ones, and a peer job-shadowing exchange also highlighted the visit. Participants found the differences between the two credit union systems sometimes striking. “It's easy to take for granted the luxuries afforded us,” said Lauren Vance, marketing manager for Christian Financial CU, Roseville, Mich. “Things like technology, innovation and sharing cooperative concepts characterize our industry at home, but not in St. Lucia. Visiting the island allowed me to play an active role in pushing our movement forward on a global scale.” Other Michigan delegation participants in the weeklong visit included Bill Harvey, board chair for MemberFocus Community CU; Kathleen Bennett, board vice chair, and Jan Rose, CEO, of E&A CU, Port Huron; Jim Kirk, director of business and community development for the University of Michigan CU, Ann Arbor; and Martha Ninichuck, director of membership relations for the Michigan league. According to WOCCU's 2007 Statistical Report published in June 2008, St. Lucia's 15 credit unions serve more than 60,000 members. While mergers may be inevitable for the small system, shared branching offers promise toward helping credit unions expand to reach more of the island's population, according to Victor Miguel Corro, senior manager of WOCCU's International Partnerships Program. “Participants were very curious about shared branching and agreed that credit unions in St. Lucia should make a serious effort toward this goal,” Corro said. “Shared branching may be the next logical step for this partnership to pursue.” The needs assessment during the visit identified a demand for more long-distance training, such as webinars, which can be attended for a relatively low cost. Alexander Joseph, CEO of the St. Lucia Co-operative League, identified financial education, budgeting practices and building a savings culture as webinar topics St. Lucia's credit unions would find useful.