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Its Financial Literacy Month

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MADISON, Wis. (4/1/11)--National Financial Literacy Month officially begins today, with credit unions helping celebrate the importance of financial literacy while teaching consumers--especially youth--how to establish and maintain healthy financial habits. For 2011, the Credit Union National Association (CUNA) has designated April as Youth Month, an expansion of its annual National Credit Union Youth Week. This year Youth Week will be April 17-23, but credit unions have the option to celebrate throughout the month. The theme for Youth Month is Money Rocks at My Credit Union (or Moneyrocks@mycreditunion). This means more time for credit unions to join CUNA's National Youth Saving Challenge. Instead of limiting the challenge to Youth Week, credit unions can choose when and how long they will celebrate.. Although many credit unions already have firmed up their plans--those who have participated in the Saving Challenge tend to return year after year--it's not too late to set up special activities at the credit union. Credit unions can sign up throughout the month (participation is free). Visit CUNA's Youth Week webpage (see the link) to get graphics and materials, ideas, and giveaways to make participating easier. Rachael Gregoire at Aurora (Colo.) Schools FCU told CUNA staff how her credit union will celebrate: It is decorating its lobby with inflatable guitars and other music theme decorations. Staff will dress up as rock stars for a day, with senior management dressing up as KISS. The lobby will feature a television with Rock Band, so kids can play and feel like "saving" rock stars. Youth who open an account or make a deposit will be entered in a drawing for an iPod shuffle. The credit union will also have fun prizes, including quarter saver folders and guitar-shaped key chains displaying the credit union's logo and "My credit union rocks!" And finally, a little history about how April came to be designated as National Financial Literacy Month: National Financial Literacy Month was introduced more than a decade ago by the National Endowment for Financial Education (NEFE) to help teach students develop better money management habits. The Jump$tart Coalition for Personal Financial Literacy in 2000 designated April as Financial Literacy for Youth Month. In 2004, the U.S. Senate officially recognized April as National Financial Literacy Month, according to Keystone Extra (April 1) from the Pennsylvania Credit Union Association.. In 2006, the National Foundation for Credit Counseling (NFCC) began promoting the month with an annual survey on financial education and an annual poster contest for students, Be Money Wi$e. Also, Money Management International, a nonprofit credit and debt counseling firm, created FinancialLiteracyMonth.com, which encourages consumers to commit to improving their financial health. Whether the efforts are national, statewide, or local, a sure bet is that credit unions will be behind much of the education this month about financial literacy.

N.J. league sets Bergen Record straight on CUs

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HIGHTSTOWN, N.J. (4/1/11)--A letter to the editor written by the New Jersey Credit Union League and setting the record straight on credit unions' safety and soundness as well as members' high satisfaction level with credit unions was published Thursday in the Bergen Record. The letter, from league President/CEO Paul Gentile, defended credit unions' safety and soundness and reiterated customer/member satisfaction reports showing consumers are confident in doing business with credit unions. It was written in response to a March 6 article, titled "Credit union cutbacks," which hinted that credit unions are slipping in satisfaction and some are starting to charge fees. In his letter, Gentile noted several member satisfaction surveys. A Forrester Research survey indicated that "credit unions were ranked first among financial service institutions and 13th among all companies" and a poll by CNNMoney.com said that 51% of survey respondents chose credit unions as the safest, "once again proving the confidence credit union members have in their financial institutions," he wrote. He also compared fees of credit unions and banks, which indicated most credit unions charge less banks, and noted credit unions have fewer failures than banks--three to 25 so far this year, respectively. Lending remained strong for credit unions. "New Jersey's 208 credit unions also are lending, particularly for small businesses, for which they are true lenders. Their average small-business loan is about $123,000--loans that banks don't want to make," he said.

Corporates present biz plans to NCUA

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WASHINGTON (4/1/11)--Thursday was the deadline for corporate credit unions and the bridge corporates to file their new business plans with the National Credit Union Administration (NCUA), bringing them another step closer to restructuring the corporate system. Plans were due by the end of the day. "NCUA anticipates receiving the required capital plans from each of the corporate credit unions by the close of business today and has begun the review process," said Todd Harper, NCUA director of public and congressional affairs, Thursday afternoon. Bridge corporates were to submit to NCUA their member-approved transition plans to preserve services. Plans were to include transferring members or the bridge operations into a new corporate charter, an existing corporate charter, or another entity, according to NCUA's transition timeline document. Other undercapitalized corporate credit unions were required to submit strategic and capital compliance plans. Corporates with legacy assets remaining on their balance sheets were to include a stress test that identifies a range of potential credit or other losses from legacy assets, the impact on potential losses to capital, and a transparency framework to cultivate credibility and trust with member credit unions. NCUA had "not yet received any plan" related to a possible bid by a group of corporates to acquire U.S. Central Bridge Corporate's products and services, Harper told News Now. The agency has until April 29 to finalize its review of the plans submitted Thursday for any changes and request revision where appropriate. Other significant milestones in 2011 for corporate action include:
* May 31: Corporates present their strategic business and capital compliance plans to their members, with transparency of potential, future other-than-temporary impairment (OTTI) charges related to legacy assets. Their "capital subscription" process will begin, with corporates announcing a targeted goal for capital subscriptions. Those unable to reach their goal will be required to return funds to credit unions who participated in the subscription. They will be required to use escrow accounts to accumulate subscriptions to provide protection to credit unions if sufficient capital doesn't materialize. * May 31: Bridge corporates' leadership teams will initiate their transition plan. Those with a new or existing charter will begin the application and capital subscription process, if needed. They can use escrow accounts through the capital raise period to protect member credit unions. Within a targeted 24 months, NCUA will wind down bridge operations if members have not implemented a collective solution. * Aug. 31: Corporates must have an interim benchmark for evaluating their progress and submit a progress report to NCUA. * Oct. 20: The first capital deadline. The corporates' initial Part 704 capital requirements take effect. For those planning to raise capital to meet required minimums but falling short, all newly subscribed capital can be subject to release. These corporates will be subject to prompt corrective action, which may include filing net worth restoration plans and being subject to the discretionary and mandatory actions of the new rule. * Oct. 20: First capital deadline. Bridge corporates must meet initial capital requirements of Part 704, assuming the bridge transitions to a new charter or another corporate. If the bridge fails to meet the capital required, all subscribed capital will be released and the bridge wound down over time.
Other dates in the transition timeline include Oct. 20, 2012, which is the targeted end of bridge corporate transition period, and Oct. 20, 2013, when the full phase-in of rules on new capital requirements. By that date, Tier 1 capital (retained earnings and perpetual capital only) must equal 4%. For more detail, use the resource link.

Dakotas association welcomes three new affiliates

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BISMARCK, N.D (4/1/11)--Three new South Dakota affiliates have joined the Credit Union Association of the Dakotas (CUAD) : Dakotaland FCU, Huron; Simply Service FCU, Belle Fourche; and Dakota Star FCU, Rapid City. Dan Cumbee, president of $152 million-asset Dakotaland FCU, South Dakota’s third largest credit union, said he understood the importance of unity among credit unions both statewide and nationally. “The credit union industry as a whole is going to evolve and there is no margin for error,” said Cumbee. “By being together we can benefit from each other’s strengths.” Kelli Wold, president of $17 million-asset Dakota Star FCU said that affiliation dues are not just about dollars and cents. “When we were not affiliated, we felt like we were out there by ourselves,” she said Simply Service FCU has already seen the benefit of affiliation by taking advantages of services available through the league. The credit union has participated in Bank Secrecy Act training, strategic planning, compliance support, the Pee Wee and Friends youth program, and website/information technology services available through CUAD and its service corporation. CUAD President/CEO Robbie Thompson welcomed the three new affiliates. “We can’t change history,” Thompson said. “We can simply strive to improve every day, and I think these credit unions see that happening and want to help shape the future of their association and their industry.” “We have power in numbers,” said Doug Thompson, CUAD board chairman. “As credit unions we don’t always agree on everything, but we know we are stronger together. Hopefully other credit unions will step up and be part of the Association as well.”

WOCCUs Crear notes five global trends in interview

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MADISON, Wis. and SAN DIEGO (4/1/11)--World Council of Credit Unions President and CEO Peter Crear recently discussed five emerging trends that will affect the global credit union movement with Mike Lawson of CU Broadcast, an online interview show. The five “mega-trends” were identified at the recent World Council of Credit Unions (WOCCU) G-10 meeting (News Now March 11). Here is Crear’s perspective on each of the five trends:
* A greater need for urbanization: Crear tied this trend directly to better serving the younger generation throughout the world. As people migrate to cities—the United Nations predicts that with 40 years 92% of the world’s population will occupy urban areas. That migration will be fueled by the younger generation. “What we’re after is to get better representation with younger people … and secondly, pushing that string uphill a little bit, getting better established in areas where don’t traditionally have the strongest relationships, and that’s in urban areas.” * An increasing microfinance malaise: Microlenders have lately earned a “black eye” in some developing countries, with commercial firms reaping profits on the impoverished, Crear said. For better or worse, in many parts of the world, credit unions are painted within the broad brush strokes of micro lenders. “Therein lies a problem for us,” Crear said. “We have to separate ourselves and continue to help people of modest means because that’s where our future lies.” Crear cited the need for better metrics and standards of behavior within the micro-lending sector. *An uptick in transactional mobility: Again, Crear tied mobile communication to the younger generation. “If you’ve got the younger generation in credit unions, you’ve got to go mobile,” Crear said. “We’ve got to attract young people and get mobile at the same time, because that’s the wave of the future.” But for WOCCU and the global credit union movement, going mobile is sometimes simply the most effective way to serve members that live in outlying areas. Crear called the cell phone “a credit union in your hand.” * A push for membership growth: Again, credit unions must get better at attracting young people, but not just as members, he said. The average attendee at WOCCU events is probably late middle age. “I love our volunteers, but that tells you we’re missing that younger element we need to bridge to the future with,” Crear said. * Fostering the middle class. For the first time, about half the world is in the middle class, Crear said. That’s the good news. Most of the rest of the world lives on about $2 a day. The challenge for credit unions is meeting the needs of both groups. “We have to do what we’ve always done: Help those that are living on two bucks a day,” Crear said. “We also have to continue to help those in the middle class. We were a big component of their reaching the middle class.”

Natural disasters cost CUNA Mutual roughly 1.3 M in 2010

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MADISON, Wis. (4/1/11)--The recent tsunami and earthquake in Japan proves that disasters can strike quickly and without warning--an unfortunate element of surprise that U.S. credit unions know well. of. In 2010, CUNA Mutual Group paid out an estimated $1.8 million in claims to credit unions as a result of natural disasters, representing an estimated 113 claims. On a worldwide basis, the disaster in Japan appears to be part of calamitous trend. In 2010, losses from catastrophes increased by 59% for insurers from the previous year, according to a Swiss Re report (PropertyCasualty360 March 30). Insurance claims from 304 catastrophe events in 2010 cost the overall property and casualty insurance industry in excess of $43 billion, compared with $27 billion in 2009, according to the Zurich, Switzerland-based insurer. However, the overall economic loss from catastrophes was much worse at $218 billion. Catastrophes also claimed 304,000 lives. Natural catastrophes accounted for most of costs to insurers--about $40 billion--Swiss Re said. By comparison, man-made disasters cost about $3 billion. Swiss Re said 2010 was the seventh costliest year for insurers. The costliest? The year of Hurricane Katrina--2005--when catastrophe losses surpassed $117 billion. Earthquakes accounted for the most losses in 2010. The earthquake in Chile cost insurers $8 billion and claimed 562 lives, while New Zealand’s earthquake cost insurers $4 billion with no fatalities. The massive Tohoku earthquake that struck Sendai, Japan, on March 11 is expected to trigger significant insured losses, Swiss Re notes. CUNA Mutual noted that its numbers are based on claims from its property and casualty customers, about 80% of credit unions. The company paid $26,000 in disaster claims so far in 2011. Catastrophe modelers have given insured loss estimates from the event as high as $30 billion. Hurricane season begins June 1, and CUNA Mutual is prepared for what could be another active hurricane season, said Phil Tschudy, CUNA Mutual media relations manager. To help credit unions prepare for a potential disaster, CUNA Mutual Group’s next Credit Union Protection Webinar, set for 10 a.m. CT April 13, will focus on disaster preparedness. The session is part of the webinar series developed exclusively for the insurer’s Credit Union Bond policyholders, said Brad Mundine, senior manager of credit union protection risk management at CUNA Mutual.

PSECUs interchange site can be used by Pa. CUs

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HARRISBURG, Pa. (4/1/11)--PSECU in Harrisburg, Pa., has unveiled a website for consumers to gear up grassroots efforts to rally against the federal government’s proposed change in debit-interchange fees. The site, Don’t Lose Your Shirt, provides consumers with facts and figures about the negative consequences that the Federal Reserve’s interchange proposal will have on them. The $3.64 billion-asset credit union’s site also provides videos and links for consumers to contact their lawmakers. Use the link (Life is a Highway March 31). As of Thursday, the site had generated 2,100 hits. PSECU is offering the website to all Pennsylvania credit unions to use for their own interchange efforts. “Our goal in creating the website was to provide a tool to educate members about the importance of this issue,” said PSECU President Greg Smith. “Interchange is crucial to credit unions’ ability to offer a debit card program, and given the urgency of the situation, it’s our hope other credit unions will use the site as well.” The Credit Union National Association (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, and harming competition and technological innovation. Interchange fees allow business costs, including the risk of consumer nonpayment, to be shared by the payments participants, CUNA said. For more information, contact Nate Muniz at nmuniz@psecu.com.

What does Mazuma mean CUs ad campaign knows

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KANSAS CITY, Mo. (4/1/11)--A new advertising campaign/contest by Kansas City-based Mazuma CU focuses on pronouncing the credit union's name to generate more awareness of the 62-year-old credit union. "Our team members are asked all the time, 'What does Mazuma stand for?' 'What does it mean?' and 'How do you say it correctly?" said Rob Givens, president/CEO of the $420 million asset credit union. The "Pronouncing Mazuma" campaign answers the questions using billboards, radio commercials, social media, and a microsite, www.saymazuma.com, as well as the Mazuma Mystery Box Challenge. The ads use a phonetic approach. Billboards prominently display: Mazuma [Muh-zoo-muh] with dictionary-style definitions of the credit union's products and services, such as Mobile Banking [on-ur-phone] and Better Experience [warm-fuh-zees]. "Mazuma" is Yiddish slang for "money," Givens said. The credit union's radio commercials portray a humorous play-on-words so consumers get the point: that Mazuma means money. The ads depict a member and friends exchanging quips such as "Put your Mazuma where your mouth is," and "Mazuma doesn't grow on trees." The ads end with the tagline, "Pronounced Better Banking," which declares Mazuma's commitment to a better banking experience. Mazuma's microsite provides more about the credit union's history, products and services, and the credit union difference. Its Mazuma Mystery Box Challenge displays a digital box with a random item locked inside. Visitors are asked to guess what's in the box. The site reveals clues three times a week to lead consumers to the correct answer. Winners of the challenge will win prizes such as an iPad, Xbox 360 or an iPod Touch. The contest ends April 15. "The contest is a way to interact with consumers and keep them coming back to the microsite to learn more about credit unions and more about Mazuma," said Givens. The campaign was created by Beyond Marketing LLC, said the credit union.

Texas foundation funds 100 webinars for Fin Lit Month

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FARMERS BRANCH, Texas (4/1/11)--The Texas Credit Union Foundation (TCUF) is providing grant dollars to the Consumer Counseling Service Center of Greater Dallas (CCCS) to help CCCS offer 100 free webinars through April in honor of National Financial Literacy Month. Consumers who attend at least three webinars will have a chance to win one of three $100 gift cards, TCUF said. The CCCS webinars will focus on personal finance topics including information for consumers on recession proofing their finances, surviving a financial crisis, credit scores, basic money management, budgeting and savings goals, foreclosure prevention, identity theft, couples and money, and financial planning for milestones such as getting married, buying a home or having a baby. “Collaborating with CCCS is a natural fit, as our organizations have a like-minded mission of empowering people to improve their financial well-being,” said Courtney Nickels, NCUF executive director. She noted the outreach initiatives “are aimed at lifting Texas families out of financial crisis and on the path toward financial freedom.” TCUF also is partnering with CCCS and The Texas Credit Union League to host “Your money, Your Matters,” a live, weekly blog talk-radio program that informs and educates the public on issues related to personal finance--such as asset building, retirement planning and investments. The program also addresses current issues--including the economy, financial marketplace and credit unions in general. Throughout April, the program’s discussion will focus on National Financial Literacy Month.

CU System briefs (03/31/2011)

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* GRAND RAPIDS, Mich. (4/1/11)--A woman was sentenced to five years of probation and ordered to repay $232,000 that she took from her parents' account at Grand Rapids, Mich.-based Lake Michigan CU to "invest" in an Internet Nigerian scam. Mary Davis, 57, is the primary caretaker of her parents, Robert and Corinne Davis, age 89 and 86, respectively. Davis told the Kent County Circuit Court Judge Donald Johnston she thought she was doing the right thing. A friend in Indiana was in serious financial trouble and convinced the daughter to invest in the scheme. The money was wired from accounts at the credit union to overseas accounts. She originally was charged with two counts of embezzlement but she pleaded guilty to one charge in a plea bargain (mlive.com and Grand Rapids Press March 30) … * INDIANAPOLIS and WASHINGTON (4/1/11)--Mike Phipps, left, president of Evansville (Ind.) Teachers FCU, received the 2011 Buck Levins
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Award from Mike Mercer, president of the Georgia Credit Union Affiliates and a trustee of the Credit Union Legislative Action Committee (CULAC), at the Credit Union National Association's (CUNA) Governmental Affairs Conference last month. The award recognizes a league, credit union or individual whose efforts in the political arena have contributed to elevating the political presence of credit unions at the state or national level. Phipps received the award partly for his efforts with two congressmen after a representative in the credit union's district voted against HR 1151, the Credit Union Membership Access Act. Phipps' support for U.S. Reps. Brad Ellsworth (D) and Larry Buschon (R) "provide a tremendous example of political involvement to further credit union interests," said Indiana Credit Union League President John McKenzie. The award is named for Buck Levins, who was CUNA chairman during the push to pass HR 1151. (Photo provided by the Indiana Credit Union League) … * PHOENIX (4/1/11)--Vantage West CU in Tucson, Ariz., was presented
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the Arizona Credit Union League (ACUL) & Affiliates' seventh annual Indirect Lender of the Year Award for 2010. The award recognizes progress in a credit union's indirect lending program and substantial and measurable improvements in its numbers. Although auto lending has decreased, Vantage West continues to provide loans through Credit Union Advantage's indirect lending platform, the league's indirect lending arm. The credit union has provided indirect loans for about 15 years and has received the award twice. From left are Robert Ramirez, Vantage West president/CEO; Vantage West staffers Rocky Chandler, Andrew Gosewisch, Cheryl Garrett, Ed Lundgren, Beth Anderson and Bryan Brown; Dixie Hill of ACUL CU Advantage; Vantage West CU staffers Jane O'Regan, Michelle Hunter and Rene Almazan; and Larry Jones, ACUL CU Advantage.(Photo provided by the Arizona Credit Union League) … * BRIDGEPORT, Conn. (4/1/11)--More than 375 students from 10 high schools throughout Connecticut converged Wednesday on Housatonic
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Community College, Bridgeport, Conn., to try their hand at living within a budget. More than 50 volunteers from the state's credit unions and local businesses helped students through choosing housing, transportation, clothing, entertainment and other life areas affecting their lives as young adults. The Financial Reality Fair received kudos from Bridgeport Mayor Bill Finch, who said, "It's great to see these students exposed to these choices at this point in their lives," and from state Sen. Anthony Musto (D-22), who noted, "These inexperienced kids are facing tough choices and making consequential decisions. It's a great experience teaching them what options they will be facing as they enter the adult world." Shown here are, from left, Finch, Musto, and Tony Emerson, president/CEO of the Credit Union League of Connecticut. (Photo provided by Credit Union League of Connecticut) …