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NCUF distributes Filene tax report to REAL Solutions CUs

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WASHINGTON (3/30/09)--As a resource for credit unions providing free tax services as part of the REAL Solutions program, the National Credit Union Foundation (NCUF) is distributing a new report that suggests credit unions can raise revenue by providing tax services in different venues. The Economics of Serving Low-Income Employees at Tax Time: Implications for Credit Unions was published this month by the Filene Research Institute and partially funded by NCUF (News Now, March 26). Rather than tweaking existing Volunteer Income Tax Assistance (VITA) programs, the report suggests opportunities for credit unions to provide fee-based tax assistance to:
* Credit union employees; * Members and non-members--especially those residing in densely populated, low-income or underserved areas, and; * Large companies’ employees--especially select employee groups of credit unions.
The report suggests that credit unions could partner with tax preparers, non-profits, and corporations to provide fee-based tax assistance in the workplace--an often overlooked delivery channel. In the report’s case study, a large company--Staples--saved $480 for each employee who received tax assistance--at a cost of $75. It also proved to be an investment in loyalty. Employees who received tax assistance in the workplace were 32% more likely to remain with their employer a year later. “Fee-based workplace tax assistance could be a new way for credit unions to expand services, build net income, attract new loyal members, and strengthen relationships with companies in their communities,” said NCUF Executive Director Steve Delfin. “For all of these reasons, we plan to incorporate findings from this report into the REAL Solutions program moving forward.”

Minnesota CU Network helps stem state foreclosures

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SAINT PAUL, Minn. (3/30/09)--As foreclosures and their consequences continue to spread across the state and the nation, the Minnesota Credit Union Network (MnCUN) has teamed up with the Minnesota Home Ownership Center to provide credit unions access to a certified network of foreclosure counselors to help struggling members. Through this network, counseling agencies are available in every county in the state. While Minnesota credit unions have been proactively working to assist members who encounter hard times, this relationship with the center gives credit unions another tool to have at their disposal. Credit unions can refer members who are facing the threat of foreclosure to a Home Ownership Center-certified counselor, all of whom provide free services. “Preventing foreclosures through counseling is a small fraction of the cost compared with the overall cost to families, neighborhoods and communities,” said Ed Nelson from the center. “This program helps all Minnesotans. Every time a foreclosure is prevented, everybody wins--and even if the foreclosure can’t be avoided, Minnesota families will be in a better position going forward for having worked with one of our counselors.” The number of Minnesota homes lost to foreclosure in 2008 was 26,265, a 29% increase over 2007, according to a report published by the center, The Family Housing Fund and The Greater Minnesota Housing Fund. Through its network of local providers, the center assisted an estimated 20,000 people with pre-purchase, refinance and foreclosure prevention counseling last year. Of those families facing foreclosure, the center has an effectiveness rate higher than 50%. The Minnesota Home Ownership Center is the state’s leading independent, non-profit provider of information and resources aimed at helping Minnesotans obtain and maintain home ownership. With services available to all in need, the center places an emphasis on supporting low- and moderate-income Minnesotans and those who face barriers to home ownership by actively engaging in education, partnerships and outreach. Counseling support is available in English, Hmong and Spanish. The center also will fund interpretation services in another language, if necessary, through the counseling network. “Since credit unions are not-for-profit and have a true concern for their members’ financial well being, this relationship with the Home Ownership Center can enhance credit unions’ existing efforts and can be a win-win for all parties involved,” said Mark D. Cummins, MnCUN president/CEO. “Oftentimes consumers at risk of foreclosure are scared or embarrassed of their situation. By publicizing this counseling network to their members, credit unions can position themselves--yet again--as a go-to resource for their members.” Also, the center will host free training workshops specially designed for organizations that have regular contact with at-risk homeowners, including credit unions. Marketing materials are also available for credit unions to promote the counseling network to their members.

CU weighs in on overdraft fees in IWSJI

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NEW YORK (3/30/09)--An Oregon credit union administrator weighed in on the issue of overdraft fees in a Thursday article in The Wall Street Journal concerning the Federal Reserve’s decision about whether to reign in the fees. The Fed’s 60-day public comment period on the matter ends March 30. The Fed is contemplating several different approaches to the issue, ranging from not changing any current practices to requiring financial institutions to give notification to consumers on every purchase that would cause an overdraft, the newspaper said. However, many financial institutions said the latter option is not realistic “People think when they're making a purchase it’s like a direct line into their account but it's not; it's a third-party processor making the transaction,” Judy Rigwood, compliance director at TLC FCU, a $90 million asset, Tillamook, Ore.-based credit union, told the paper. “We don't have the technology to do that. “Frankly, we offer overdraft service as a way to help our members,” she added. “Some people rely on it almost like they would a payday loan. It allows them to make vital purchases.”

Need a loan Texas newspaper suggests CUs

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SAN ANTONIO, Texas (3/30/09)--Scott Metzger, who owns a brewing company in San Antonio, Texas, turned to his local credit union for help when his bank loan fell through. Security Service FCU, San Antonio, provided Metzger with a $550,000 small business loan and a $200,000 bridge loan (Express-News March 27). Nick Naik, a hotel developer in the San Antonio area, also turned to the $5-billion-asset Security Service to refinance a $9 million loan for his hotel. His credit union experience was “excellent,” simple and straightforward. Both businessmen were interviewed by the Express-News for an article titled, “Need a Loan? Try a Credit Union,” which noted that credit unions continue to lend money despite tough economic times. Randolph-Brooks FCU, Universal City, Texas, also told the newspaper it provided funds for 215 real estate transactions in February. Credit unions can make loans because they didn’t use the lending formulas that many banks used--which left them with toxic assets, said Robert Zearfoss, Randolph-Brooks senior vice president of mortgage lending. Randolph-Brooks has $3.1 billion in assets. Credit unions are “flush with cash,” Texas Credit Union League CEO Dick Ensweiler told the Express-News. Credit unions are safe lenders and do not make risky loans, he added.

AVCU launches CU awareness campaign

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SOUTH BURLINGTON, Vt. (3/30/09)--The Association of Vermont Credit Unions (AVCU) will launch a credit union awareness campaign April 6 that is modeled after the Pennsylvania Credit Union Association’s iBelong campaign. The campaign will use television ads to explain what credit unions are and how Vermont residents can find a credit union to join. The ads will air for eight weeks during morning network news shows, late afternoon talk shows, prime time shows and on cable networks (Newsline Express March 27). The call-to-action of the campaign will be the iBelong website, where users can use a Google Maps locator to find a credit union. The iBelong website will go live this week and features a page about Vermont credit unions with links, and a “My Story” section where members can write about what their credit union means to them. The ads also will run in the fall in conjunction with Co-op Month and International Credit Union Day. Vermont is the third state, along with Illinois and Mississippi, to secure licensing for iBelong, AVCU said. For more information, use the link.

Schenk Tax increases affect few small businesses

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MADISON, Wis. (3/30/09)--Tax increases will affect only a small portion of small business owners, Mike Schenk, senior economist for the Credit Union National Association, told Business Week Thursday. Debate among small business owners has raged since President Barack Obama announced a plan to cut back federal income taxes on those with incomes under $250,000, Business Week said. Proponents claim less than 3% of small business owners have incomes above $250,000, while opponents counter that 15% or more of small business owners will be negatively affected by the proposal. While the tax increases will have a substantial negative impact, they will only affect a small number of business owners, Schenk told the publication. “I would ultimately conclude as an economist, that on balance there are some real positives to come out of [the budget proposal],” Schenk said. “The negatives will be apparent to a small sliver of the universe.”