Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

CU System Archive

CU System

Fundraising for quake victims totals 854983

 Permanent link
MADISON, Wis., and WASHINGTON (3/25/10)--Credit unions, learning more about the plight of colleagues and their 404,000-plus members in Haiti, are still donating to the Haiti Credit Union Disaster Relief Fund to assist victims of the Jan. 12 earthquake that devastated the country. So far, the Worldwide Foundation of Credit Unions, affiliated with the World Council of Credit Unions (WOCCU), has received in hand $854,983 from credit unions and organizations worldwide, said Valerie Breunig, executive director of the foundation. Of that total, U.S. credit unions and organizations have raised $442,142.54 through the National Credit Union Foundation's (NCUF) CUAid.coop, said Jill Stevenson, marketing and communications coordinator at NCUF. The overall total is actually higher "because Canada is holding money for us that we don't want to count until it is in hand, probably next week," Breunig told News Now. "Our campaign is still progressing with donations arriving from around the world," she added. On-the-scene reports from WOCCU's staff in Haiti indicate a number of credit unions were damaged and some destroyed, but many more are expecting capital problems as their members' situations become more evident. (See related story in News Now's System section: "Haiti's CUs face grave issues on capital"). Credit unions still standing have used their existing network to help displaced members of damaged institutions access their accounts with biometric identification cards, allowing them to receive much-needed remittances. WOCCU has helped credit union staff with funds to provide immediate relief, including food, clothing, and tents for shelter and offices. It has partnered with Food for the Poor to provide general relief to people in the hard-hit Port-au-Prince area. Once damage to all credit union facilities has been assessed, a formal rebuilding program will begin so credit unions can open their doors and help more members. Meanwhile credit unions and organizations continue to raise funds to help:
* The Georgia Credit Union Foundation collected more than $25,000 for the Haiti relief effort, thanks to more than two dozen credit unions, one chapter and three individuals in the state. "So many people were affected by this earthquake and we were glad to do what we could to support WOCCU's efforts to help those in need during these very difficult and sad times," said Dan Denning, executive director of the foundation. * Earlier this month the Maine Credit Union League and credit unions raised nearly $3,000 in one week, bringing total funds raised for Haiti by Maine credit unions to more than $20,000. "The need for contributions has not diminished in the two months since the earthquake, and Maine's credit unions remain committed do doing all that we can to help," said Jon Paradise, governmental and public affairs manager for the league. * California Bear CU, in downtown Los Angeles, said its staff and volunteers donated $955.31 to the WOCCU fund, which the credit union matched with a $1,000 donation of its own. CEO Jennifer Oliver noted the credit union chose the WOCCU Relief Fund "because making our donation to a credit union organization would embrace the spirit and support the international development of the credit union movement."
Credit unions and organizations also are collecting for efforts to assist Haiti's general public. Credit unions in Charleston, S.C. pooled resources and collected $25,000 to give to Water Missions to send a complete water treatment system to Haiti. MAFCU in Brookline, Mass., contributed $6,100 to Partners in Health to provide medical care. CPCU, in Somerville, Mass., used coin counting machines to collect money and raised $5,359 for the American Red Cross. MoneyGram, a CUNA Strategic Services provider, announced last week that its Global Giving program expanded its support to include a minimum $250,000 grant to the American Red Cross. Through June 30, it will donate $2 from every transaction sent to Haiti as a donation for relief services. Many credit unions, however, are concentrating their efforts to the WOCCU fund so their efforts help colleagues and their members. To support Haiti's credit unions and members through the international credit union disaster fund, make payments, via check, credit card or wire to: Worldwide Foundation for Credit Unions Inc., 5710 Mineral Point Road, Madison, WI 53705, USA. Donations also can be made online with a credit card at www.woccu.org/give. For wire transfer information, contact Valerie Breunig, Worldwide Foundation for Credit Unions at 608-395-2055 or via e-mail vbreunig@woccu.org. Please indicate the donation is designated for the Haiti Disaster Relief Fund. U.S. credit unions also can support WOCCU's relief efforts by donating through the NCUF's CU Aid at www.CUAid.coop. For more information, use the links.

Michigan credit unions saw record growth in 2009

 Permanent link
LANSING, Mich. (3/25/10)--While other institutions pulled back or closed their doors during 2009, credit unions in Michigan saw strong growth in members, deposits and small-business lending, reports the Michigan Credit Union League (MCUL). Members' savings deposits at the state's credit unions grew by 12.2% to $32.5 billion in 2009, according to year-end statistics compiled by the National Credit Union Administration (NCUA). The best measure of industry strength--net worth-to-assets ratio--showed credit unions at 10.9%--above the 7% ratio considered well-capitalized by regulators and a percentage point higher than the 9.9% average for credit unions nationwide. Credit unions' total loans were up 4.1% while other lenders reported sharp drops in lending, said the league. New-auto loans rose 19.7%, used-auto loans 12.5%,, credit card loans 4.5% and first-mortgage loans 2.8%, despite Michigan's depressed real estate market. Michigan credit union auto lending benefited from the industry's participation in the Invest in America program, which offers member discounts on General Motors and Chrysler vehicles in return for credit unions' promotional efforts supporting domestic automakers nationwide. "Michigan's credit unions have stepped up to the plate to make small loans at a time when other institutions have cut back," said MCUL President/CEO David Adams. "As other lenders have struggled to make credit available to consumers and businesses in Michigan, or as banks have added new fees on credit cards and other products, credit unions have continued to offer consumer-friendly products and services, and continued to lend." he said. He noted that their small-business loan growth and record membership growth "particularly demonstrates that more and more people are turning to credit unions as their trusted financial institutions of choice during tough economic times." Small-business loans grew 18% to $838 million, and credit unions in the state have pledged $43 million in business loans as part of the state's entrepreneurship program, the Small Business Financing Alliance, in partnership with Gov. Jennifer Granholm and the Michigan Economic Development Corp. Adams pointed out that Michigan households are turning to credit unions in record numbers. Membership had flat growth since 2001 while Michigan's population shrank. In 2009, however, membership grew by more than 37,000 to more than 4.4 million members. He attributed the recent growth to "public outcry over Wall Street and big bank abuses nationally."

CU System briefs (03/24/2010)

 Permanent link
* YOUNGSTOWN, Ohio (3/25/10)--Howard Shreve, the last charter board member of Associated School Employees CU (ASECU) has resigned from ASECU's board of directors after more than 50 years' service. Shreve helped found Austintown School Employees CU on 1959 in Youngstown, Ohio. It was renamed later. During his tenure, the credit union has merged six credit unions, expanded its field of membership twice, and built two new branch facilities. Currently ASECU has eight branches, serves more than 20,000 members and has more than $150 million in assets. "Howard has helped build this credit union from a small operation in the basement of his home to the successful venture it is today," said President/CEO Michael J. Kurish ... * NORFOLK, Va. (3/25/10)--A Chesapeake, Va., man was convicted in a U.S. District Court on 30 felony counts related to a dozen bank and credit union robberies or attempted robberies and faces up to 383 years in prison. Leonard Earl Roulhac, 39, was found guilty Monday of the robberies, which occurred during a six-month robbery spree last year. He was apprehended in May after an off-duty police officer chased him after the last armed robbery. The financial institutions lost about $36,000 in the heists. He will be sentenced in June (The Virginian-Pilot and The Ledger Star March 24) ... * ORLANDO, Fla. (3/25/10)--Orlando-based Insight Financial CU has shortened its name to Insight CU, effective in May, according to Florida Today (March 19). Credit union officials told the publication they hope the new logo and new outdoor signs and name will boost branch location awareness. The $459 million asset credit union has 10 branches in Central Florida ... * PHOENIX, Ariz. (3/25/10)--Arizona State CU has been named the No. 1 credit union for the fourth consecutive year in the 2010 Ranking Arizona: The Best of Arizona Business, published by Arizona Business Magazine. The rankings are based on voters' opinions in the largest business opinion poll taken in the state. This year, the $1.3 billion asset credit union has opened a new location in Scottsdale, introduced an online account opening service for new and existing members, and responded to changing community needs resulting from the area's economic difficulties by launching a community forum, HelpingAZ.com, for Arizona residents ...

Oral arguments in N.Y. mortgage case postponed

 Permanent link
MANHATTAN, N.Y. (3/25/10)--Oral arguments originally scheduled for today in Hudson Valley FCU's challenge against a New York state assessment requirement on credit union mortgage loans have been postponed until April 13. Credit Union National Association (CUNA) General Counsel Eric Richard and Counsel for Special Projects Michael Edwards were en route to New York Wednesday to attend the hearing when the postponement was announced. Oral arguments next month will be heard before the Supreme Court for New York County, a trial-level court located in Manhattan. Judge Judith Gische will preside. At issue is whether a federal credit union (including its members) must pay a mortgage registration tax to New York to record its mortgages with the state. The Poughkeepsie-based credit union filed the suit on May 15, 2009, against the New York State Department of Taxation and Finance, Commissioner Robert L. Megna, and the State of New York. CUNA will continue to monitor developments in the case and News Now will provide updates.

Ohio CUs push public funds bill at CU Day at Statehouse

 Permanent link
COLUMBUS, Ohio (3/25/10)--Legislation that would provide townships, schools, libraries and other public entities the choice of depositing their funds in Ohio credit unions--H.B. 317--highlighted discussions between more than 120 credit union leaders and the Ohio General Assembly during the 2010 Credit Union Day at the Statehouse Tuesday. A record number of participants attended 105 legislative meetings, stressing the benefits of keeping local government deposits within the communities they serve.
Click to view larger image Ohio House Majority Floor Leader Tracy Maxwell Heard (center) (D-Columbus) met with representatives from Telhio CU, Bethel Community FCU, Credit Union of Ohio, Kemba Financial CU, Members First CU, and the Ohio Credit Union League during the league's 2010 Credit Union Day at the Statehouse, held on Tuesday. (Photo provided by the Ohio Credit Union League)
H.B. 317 would amend the Ohio Revised Code to provide local governments a safe alternative for their investments--their local credit union. At a March hearing of the Ohio House Financial Institutions, Real Estate and Securities Committee, House Majority Floor Leader Tracy Maxwell Heard (D-Columbus) and State Rep. Peter Ujvagi (D-Toledo) provided testimony in support of the legislation, urging their colleagues to give local governments an option when choosing a financial institution. Opponents of the legislation argue credit unions have “an unfair tax advantage.” “Last year, the message to our state representatives and senators was that credit unions are safe, sound, and secure amidst the difficult economy,” said John Kozlowski, general counsel of the Ohio Credit Union League. “This year, in H.B. 317, we have legislation crucial to the ability of our credit unions to invest in the communities and small businesses they serve each and every day.” Meetings with legislators also focused on the overall strength of credit unions as financial institutions. Attendees provided their local representatives with statistics showing Ohio credit unions have strong capital (11.2% net worth), strong liquidity (71.2% loan-to-share ratio), sound portfolios (1.42% delinquency), and secure bottom lines (0.45% return on assets). Also, attendees urged their representatives to contact Congress to support raising the member business lending cap on credit unions from 12.25% to 25% (H.R. 3380/S. 2919). Before attendees met with legislators, Rep. Heard discussed her sponsorship of H.B. 317, which, she said, “follows the philosophy of credit unions. Who better to understand the needs of a local school district or a local township trustee than an institution that is right in the midst of that community?” Heard was followed by Assistant Minority Whip Cheryl Grossman (R-Grove City) and H.B. 317 co-sponsor Rep. Carlton Weddington (D-Columbus), who stressed “credit unions make a difference today, tomorrow, and in the future.” During a lunch reception, attendees heard from the leaders of the Ohio Democrat and Republican parties, Chris Redfern and Kevin DeWine, respectively. Redfern and DeWine emphasized the importance of sharing credit union values with legislators before laying out the agenda for their parties and discussing impending races on the state and federal level in advance of the May 4 primary.

Louisiana Corporate loss at 7.4M still well-capitalized

 Permanent link
METAIRIE, La. (3/25/10)--Louisiana Corporate CU’s (LaCorp) auditors have completed the corporate’s 2009 audit, issuing an opinion that the corporate still is well-capitalized. In 2009, LaCorp experienced a net loss of $7.4 million, resulting entirely from writing off all of its capital in U.S. Central FCU. However, even with the writedown, LaCorp continued to be well-capitalized with total capital at $8.4 million, or 5.99%--well above the National Credit Union Administration’s 4% minimum for corporate credit unions. “We believe our members have the right to timely information for their due diligence, so we worked with our certified public accountant firm to get the audit completed and released promptly,” said David Savoie, president/CEO. “As far as we know, LaCorp is the first to release its audited 2009 audit opinion.” “LaCorp has generated strong earnings for yea-to-date 2010, in keeping with our primary objective of providing the most cushion possible between our members’ capital and any further systemic charges,” Savoie said. “While 2009 was a challenging year for all financial institutions, including the credit union sector, I’m pleased that we are on track for positive earnings this year.” The auditors were Rebowe & Company, certified pubic accountants.

LifeLock to pay 12M in false-claims settlement

 Permanent link
WASHINGTON (3/25/10)--LifeLock Inc. has agreed to pay $11 million to the Federal Trade Commission (FTC) and $1 million to a group of 35 state attorneys general to settle charges that the company used false claims to promote its identity theft protection services. It is one of the largest FTC-state coordinated settlements on record, said FTC. LifeLock and its principals will be barred from making deceptive claims and required to take more stringent measures to safeguard the personal data they collect from customers, FTC said. The company and its co-founders, Richard Todd Davis and Robert J. Maynard Jr., are barred from misrepresenting the "means, methods, procedures, effects, effectiveness, coverage, or scope of any identity theft protection service." The settlements also bar misrepresentations about the risk of identity theft and the manner and extent to which LifeLock protects consumers' personal information. The settlements also require LifeLock to establish a comprehensive data security program and obtain biennial independent third-party assessments of that program for 20 years. Since 2006, LifeLock's ads claimed it could prevent identity theft for consumers willing to sign up for its $10-a-month service, said the FTC. The agency noted that LifeLock's fraud alerts on customers' credit files protected against only certain forms of identity theft and gave no protection against the misuse of existing accounts; that they did not protect against medical identity theft or employment identity theft; and that they could not provide absolute protection against new account fraud, where fraud alerts are most common. Other claims made--that LifeLock could prevent unauthorized changes to customers' address information, that it constantly monitored activity on customer credit reports, and that it would ensure the customer always received a telephone call from a potential creditor before opening a new account--were also false, said FTC. The FTC said it will use the $11 million it receives from the settlements to provide refunds to consumers. It will send letters to current and former LifeLock customers who may be eligible for the refunds, and instructions for applying. For fuller detail, use the resource link.

Haitis CUs face grave issues on capital

 Permanent link
PETIONVILLE, Haiti (3/25/10)--Nine of its member institutions were seriously damaged in a Jan. 12 earthquake and three were destroyed, reported officials at La Fédération des Caisses Populaires Le Levier, an organization serving 50 caisses populaires, or credit unions, throughout Haiti.
Click to view larger image Staff members and workers dig through the wreckage of KOTELAM's Magoire Ambrose caisse populaire--or credit union--branch office in Port-au-Prince, Haiti, following a Jan. 12 earthquake. The building was destroyed.
One institution, KOTELAM, was reduced to rubble. However, the remaining institutions, many in rural areas, face even greater challenges in the coming months, said World Council of Credit Unions (WOCCU). Many of Haiti’s 120 credit unions survived the earthquake with minimal damage, but that’s not necessarily the case for their members. Members who died or faced a complete loss of personal assets could undermine the financial well-being of their credit unions. Increasing loan defaults could lead to the financial collapse of some credit unions, many of which are struggling to restore their operations. “Haiti’s credit unions are already facing physical challenges that include structural damage, logistics and computer connectivity,” said Greta Greathouse, chief of party for the Haiti Integrated Financing for Value Chains and Enterprises (HIFIVE) program administered in Haiti by WOCCU. “But many of them will soon be facing grave issues regarding their capital position.” Most credit unions in Haiti are self-funded, with members’ savings as the only source of capital on their balance sheets. Members whose homes were destroyed, assets lost and relatives killed in the earthquake no longer can repay their loans. Each default drives the credit unions closer to financial ruin. “If members can't repay their loans, credit unions could lose all of their net worth ... and then some,” said Greathouse.
Click to view larger image Greta Greathouse (center), who heads up World Council of Credit Unions’ (WOCCU) program in Haiti, explains the challenges facing credit unions to Barry Lennon, WOCCU senior vice president (left), and Dave Richardson, WOCCU senior manager of technical development, in one of WOCCU’s temporary Haiti offices inside an art gallery. (Photos provided by World Council of Credit Unions)
HIFIVE, a three-year, $34.4 million multi-partner program funded by the U.S. Agency for International Development through the Academy for Educational Development and administered by WOCCU, is designed to strengthen enterprise development and promote job creation in rural Haiti. HIFIVE is working with the financial sector to bring savings, credit and remittance-linked products to underserved areas of the country and provide technical training to micro-, small- and medium-sized enterprises. WOCCU's Haiti office is undergoing its own logistical challenges. It is operating out of temporary space in two locations, one on the veranda of an apartment building and the other inside Gallerie Expressions, an art gallery in the Port-au-Prince suburb of Petionville. Permanent office space has been rented, but will require significant refurbishing before it becomes functional. “We hope to be in the new space in a few weeks, but then we had hoped to be in March 1,” Greathouse said. Meanwhile, logistical connectivity issues continue to challenge daily operations and escalating prices have caused additional hardship for the staff, most of whom live in tents near the sites of their homes. WOCCU staff stability will continue to be critical in the program’s efforts to help the country’s credit unions, she added. “If employees have a house or tent, chances are they have between five and 20 relatives living with them,” Greathouse said. “With prices climbing since the earthquake, our budget has been challenged and it’s become that much harder for staff to care for family members’ needs.” Haiti’s credit unions also are strapped for critical resources and face similar challenges. Regulators at the Central Bank of Haiti have already earmarked 15 struggling caisses for closure, a number that could climb to as high as 50 of the country’s roughly 220 financial cooperatives. Any type of assistance judicially administered could help the struggling movement continue serving members, according to Evans Jerome, the Central Bank's assistant director. “Before the earthquake, many of [the credit unions] needed help,” Jerome said. “Now they will appreciate that help even more.” (See related story in News Now's System section, "Fundraising for quake victims totals $854,983.")