VANCOUVER, B.C. and TORONTO (3/28/11)--Central 1 Credit Union has reported net income of $50.1 million for 2010. The net income figure was down from the extraordinary level of $99.9 million in 2009, but ahead of the $26.6 million posted in 2008, when the credit union centrals of B.C. and Ontario combined at mid-year as Central 1. “Against a backdrop of volatile financial markets and a challenging economic environment, Central 1 performed well last year,” said Don Rolfe, president and chief executive officer of Central 1 CU. “In 2009, we were able to take advantage of highly unusual conditions in the financial markets and make conservative investments that produced very strong results, but we had no expectation of matching that exceptional performance in 2010.” Rolfe said gains on the sale of financial instruments and revenue from provision of services contributed to the positive results for 2010. Another factor was equity income from Central 1’s investment at the end of 2009 in The CUMIS Group. Total assets at year-end were $10.4 billion, compared with $11.1 billion in 2009 and $8.6 billion in 2008. Return on average equity was 8.9%, compared with 19.6% in 2009 and 7.7% in 2008. Central 1 paid $9.6 million in dividends to its member shareholders.
PHOENIX (3/28/11)--Arizona State Treasurer Doug Ducey announced the continuation of a program launched in 2010 designed to put state and local tax dollars back to work in Arizona’s banking community, including credit unions. The program is designed to invest in Federal Deposit Insurance Corporation (FDIC) or National Credit Union Share Insurance Fund (NCUSIF) products at Arizona banks and credit unions through a monthly bid process. “We are pleased that our State Treasurer will continue this valuable program and provide Arizona credit unions with the opportunity to participate,” Austin De Bey, vice president of governmental affairs for the Arizona Credit Union League, told News Now. “The program ensures that taxpayers dollars are invested back into the local community, and provides a valuable option for credit unions that may choose to bid on state monies in the future. The league will continue to work with the State Treasurer’s office and inform our credit unions on the ability to participate in the program.” Each month, the Treasurer’s Office will entertain bids from local banks and credit unions for the placement of up to $250,000 in cash per institution for either one-month, three-month, six-month, one-year, two-year or five-year products that are fully insured with the FDIC or the NCUSIF. “Investing a portion of Arizona taxpayer dollars in local banks can have a very positive economic impact,” Ducey said. “We currently have more than $50 million invested with eight Arizona banks, and look forward to expanding our relationship with those banks and others.” The program asks banks and credit unions interested in receiving these investments to provide the Treasurer’s Office with their bids five business days prior to end of each month. Awarded bids will settle on the first business day of the following month. Each institution is encouraged to quote rates for all maturities they offer. Once bids are received, the Treasurer’s Office will notify each institution if their bid is accepted. Minimum qualifications for bidders require Arizona deposits of at least $10 million; for banks a Capital Leverage Ratio of at least 6% in the previous quarter and for credit unions a Prompt Corrective Action Net Worth Ratio of at least 6% in the previous quarter.
MADISON, Wis. (3/28/11)--Credit unions nationwide continue to gather support for victims of the Japanese disaster. On March 11, an earthquake struck off the coast of Japan, causing a tsunami that swept over cities and farmland in the northern part of the country. Recorded as 9.0 on the Richter scale, it was the largest quake ever to hit the country. As the nation struggles with a rescue effort, it also faces the worst nuclear emergency since Chernobyl. As of March 25, the official death toll had been raised to more than 10,000, and in excess of 16,000 people are listed as missing, although there may be some overlap between the two groups. The final toll is expected to reach nearly 20,000 (New York Times
March 25). Among the credit union relief efforts are:
* Credit Union 1, Anchorage, Alaska, created an account to which members could make donations for Japan relief. Members could also donate their “One for All” reward points from the credit union; * Freedom CU, Warminster, Pa, donated $1,000 to the American Red Cross. Also, Freedom CU is offering members options for making safe donations. The credit union also has provided a quick payment link to the American Red Cross in its online bill pay portal. This link will allow members to have donations securely and immediately deducted from their checking accounts and sent directly to the Red Cross. Through its website, the Freedom CU is offering links to a list of trusted relief organizations’ websites. When members make a donation to one of these organizations using a Visa credit card or check/ATM card, Visa will waive any associated interchange fees; * The Pennsylvania Credit Union Association, Harrisburg, Pa., directed its member credit unions to forward donations to the American Red Cross, Save the Children or World Vision. (Use the links below.); and * University of Louisiana FCU, Lafayette, La., spread the word about Soles4Souls efforts to collect shoes for Japanese survivors.
Melanie Riedl, director of marketing at University of Louisiana FCU told News Now
, “We got a great response from people around the country who were happy to hear about another way to help everyone in Japan. I think people are looking to pitch in however they can.”
ATHENS, Ga. (3/28/11)--While many questions still surround the implementation of the interchange rule, Marshall Boutwell shared a gut feeling with a Georgia newspaper that probably sums up what many people in the credit union industry are thinking about the rule. “There’s no free lunch,” Boutwell, CEO of $160 million-asset Gwinnett FCU, Lawrenceville, Ga., told the Athens Banner-Herald (March 20), not once, but twice. While the interchange rule includes an exemption for financial institutions under $10 billion, until the rule is redrafted, credit union executives like Boutwell fear its negative--even if unintended--consequences. The Credit Union National Association (CUNA) has estimated that up to 67% of credit unions would lose money on their debit card programs if the interchange regulations reduced interchange-related revenues by 40%. Boutwell told the paper the value of the member service that credit unions have built their reputation on is likely to be put to the test because of these consequences. Local banks and credit unions will likely have to charge additional fees to cover the lost revenue that results from the interchange rule, though credit union fees are likely to be a bit lower than those of large banks. But Boutwell is just as concerned about the potential “blow-back” from big retailers. He fears big box retailers like Wal-mart will refuse to pay 44 cents for debit card purchases drawn on credit union accounts when they only have to pay 12 cents if the their customers are using cards from big banks. In the end, the retail customer will have to pay the fee to the retailer when she swipes her card, or to her financial institution in the form of higher fees. Once again, Boutwell said, “no free lunch--for credit unions or consumers. And, unless the rule is rewritten, he remains fearful, he told the paper. CUNA has repeatedly said that to ensure that the planned exemption is effective, Congress should halt the progress of the interchange rule. Both the House and Senate have pending bills that would delay implementation. If an agreement to delay implementation cannot be reached, CUNA has called on the Fed to do all it can to ensure that the proposed exemption works as Congress said it would.
LAS VEGAS (3/28/11)--Best Practices Award winners from the CUNA Marketing and Business Development Council were announced during the council’s 18th annual conference, which took place March 16-19 in Las Vegas. The awards recognize outstanding new marketing and business development approaches with potential for universal application across the credit union movement. Without regard to asset size, a panel of judges selected winners based on strategy, process, application and results. Representatives from the winning credit unions were present at the conference to accept their awards. This year’s winners (by category), with descriptions of their awards are:
* Business Development: Partners FCU in Burbank, Calif., for its Synergy program. As a single sponsor credit union affiliated with The Walt Disney Companies, Partners FCU’s approach to Synergy drives everything from new memberships to member education to inclusion in Cast Member (employee) publications. As a result of its efforts, in 2010 Partners FCU had a positive net member growth (+2%) for the first time in three years. Not only has the credit union experienced membership growth, but product and service referrals have increased dramatically. Partners focus on Synergy has enabled it to grow and prosper while other credit unions in their area have either experienced negative growth or have remained stagnant. * Miscellaneous: Erie FCU in Erie, Pa., for its growing business account services program. Through a combination of targeted business ads, partnerships with business organizations and realigning their employees to better serve their business members--Erie FCU was able to drive more traffic to their business webpage, increase business membership, raise business deposits and generate additional loan volume. This new focus for Erie FCU resulted in a 4.55% increase in business membership growth, a 7.37% rise in business deposit growth and $1.05 million in new business loans. * Miscellaneous: Pioneer WV FCU in Charleston, W. Va., for developing and implementing a brand for their credit union. Its brand was developed around a compass, designed to help steer members in the financial direction they wish to go. Pioneer WV FCU changed all print collateral and updated its branches to reflect the new brand. Also, it created an auto lending campaign around the new brand which resulted in more than double the loan volume of past years.
For more information on the 2011 Best Practice Award winners, use the link.
PHOENIX (3/28/11)--Member credit unions throughout Arizona, Colorado and Wyoming cast their votes in favor of the three-way merger, creating the new Mountain West Credit Union Association. The results of the vote were officially announced by Mike Williams, chairman of the Credit Union Association of Colorado, with Marsha Tynsky, chairwoman of the Credit Union Association of Wyoming, and Robert D. Ramirez, chairman of the Arizona Credit Union League, during the Colorado Association’s Annual Meeting Friday in Colorado Springs, Colo. Tynsky said she is pleased with the results and “excited about the possibilities of the future of the new organization,” adding: “Serving our member credit unions is what’s most important. This merger gives us all the opportunity to increase and improve our member services.” Credit Union Association of Colorado (CUAC) chairman, Mike Williams expressed his support for the merger as well. “I am confident this merger will build an association that will be a lasting benefit to all member credit unions,” Williams said. “Working with the leaders in the other two states has been a great fit right from the beginning.” Participation in the membership vote was high with overwhelming support in favor of the merger. “The support credit unions have shown is a strong statement to the energy that is behind this merger,” said Ramirez. “The need for a league is as important as ever. The challenge is how best to achieve efficiencies and still provide what credit unions expect from their league. This merger will allow us to meet the needs of all sizes of credit unions.” Scott Earl, president/CEO of the Arizona Credit Union League will become the new CEO of the Mountain West Credit Union Association. The newly formed association will be headquartered in Denver with offices and staff maintained in Phoenix and Casper, Wyo.
BILLINGS, Mont. (3/28/11)--If the federal government continues with its plan to impose limits on debit card interchange fees, the move would hurt millions of consumers nationwide, a CEO for a Montana credit union wrote in a recent guest column in a local newspaper. “For 76 years, Billings FCU has represented the financial interests of its members, currently standing at 8,500 individuals in the Billings community,” wrote Tom Boos, CEO of Billings (Mont.) FCU. “As CEO, I am writing to sound the alarm that the federal government is on path to imposing new regulations on debit cards. I fear it is going down a risky path that could harm millions of people who belong to credit unions or use community banks” (Billings Gazette March 20). The largest U.S retail chains are behind this regulation and want the government to cap the fees they pay to accept debit cards, Boos wrote. Retailers have spent millions lobbying for this rule, because the biggest 2% of retailers stand to be recipients of a “$12 billion windfall--every year,” he added. “Small institutions like mine are able to issue free debit cards because of the interchange fees merchants pay for accepting them,” Boos wrote. “It is a system that works for everyone from the consumers and small businesses to credit unions and major banks. The fees level the playing field and allow our members the same zero-cost convenience enjoyed by customers of the largest financial institutions. They cover security costs, fraud protection and the vast network itself. Moreover, they permit credit unions to continue providing important services to our members. “If the retailers’ lobby is not stopped, community banks and credit unions around the country may have to increase their fees and rates just to cover debit services,’ Boos added. “Otherwise, we will have little choice but to create new restrictions or limit debit card use. Some of us may have to stop issuing cards altogether. That could spell the death of smaller financial institutions.” The Credit Union National Associations (CUNA) opposes the cap on interchange fees and has told federal lawmakers that such action would harm consumers by driving up costs of debit cards, limiting consumer options, competition and technological innovation. Interchange fees allow business costs, including the risk of consumer nonpayment, to be shared by the payments participants, CUNA says. To read the guest column, use the link