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CDCU to test self-service kiosks for unbanked

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MONTVALE, N.J., and NEW YORK, N.Y. (3/6/08)--A new Community Development Partner will team up with New York community development credit unions (CDCUs) for a pilot project that would test self-service kiosks in communities with high numbers of underserved and unbanked consumers. Tellagent LLC, a credit union service organization (CUSO) of the $374 million assets Paragon FCU, Montvale, N.J., has joined the National Federation of Community Development Credit Unions as a Community Development Partner, said the federation. The CUSO will deploy kiosks in a number of CDCUs in New York City. Lower East Side People's FCU will be the first credit union to participate. The federation's Community Development Partners program sees to engage a broader spectrum of credit unions in the work of CDCUs. "Larger, 'traditional' credit unions bring substantial resources and technical expertise in the delivery of financial services," said Pablo DeFilippi, director of membership services at the federation. "CDCUs bring their mission-driven focus and vast experience in serving underserved markets, which makes them ideal partners for larger credit unions looking to do more in low-income communities." To view a full list of the federation's Community Development Partners, use the resource link.

CUNA launches personal finance online resource center

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WASHINGTON (3/6/08)—The Credit Union National Association (CUNA) this week launched the Personal Finance Initiative (PFI), an online network for leaders of the credit union movement to share best practices and discuss financial education. The site’s launch coincided with the Governmental Affairs Conference (GAC) in Washington, D.C., and was noted by immediate past CUNA Board Chairman Allan Kemp McMorris during the annual general meeting Monday. “(PFI) is a one-stop shop for financial education,” McMorris said. The network is an accomplishment of the financial literacy task force, which McMorris appointed in 2007. The task force will hold the Personal Finance Institute, slated for Sept. 10-12 in Virginia, as a follow-up to the network. The institute will provide attendees with three days’ worth of hands-on sessions geared at teaching credit union professionals how to improve member financial literacy. The task force also is working to create an awards program that would recognize credit unions actively improving member financial literacy. In a GAC breakout session Tuesday, Juri Valdov, financial literacy task force chairman, noted the importance of credit unions teaching their members how to be more financially literate. Valdov is president/CEO of Northwest FCU in Herndon, Va. Research conducted by the task force indicated that parents are not capable of educating their children about financial literacy. They expect schools to teach their children about money, but “the schools don’t do it either,” he noted. “Credit unions are in the position to educate people about financial literacy,” Valdov said. He encouraged credit unions not to drop financial literacy from their programs. “If we pull back on those things we have become the problem instead of the solution,” he said. Financial literacy is “not a diversity, age, or geographic issue,” Valdov concluded. “It’s a universal issue. We as credit unions are best situated to do something about it and the programs we share (on PFI) will help us do that.”

CU System briefs (03/05/2008)

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* WASHINGTON (3/6/08)--National Credit Union Foundation (NCUF) Executive Director Steve Delfin presents a check for $79,657 to African-American Credit Union Coalition (AACUC) Chairwoman Barbara Stephens, president/CEO of Houston Municipal Employees FCU. The check represents the most recent of four quarterly dividends from the Pete Crear Fund, a donor-designated fund within the Community Investment Fund named for the CEO of the World Council of Credit Unions. Credit unions that invest in the Crear Fund designate the dividends to benefit the AACUC. (Photo provided by the National Credit Union Foundation) … * DUBLIN, Ohio (3/6/08)--The Ohio Credit Union Foundation (OCUF) granted an additional $30,000 to the Biz Kid$ television series about financial literacy and entrepreneurship sponsored by America's Credit Unions. The gift brings OCUF's total gift to $60,000, making it the program's third-highest contributor, behind the Washington Credit Union Foundation and California's RMJ Foundation. All nine of Ohio's Public Broadcasting Service (PBS) stations are airing the show, which began broadcasting nationally in January. It runs for 26 weeks on 300 PBS stations nationwide. "Credit unions should be major players in taking Biz Kid$ into classrooms across Ohio and making educators aware of this tremendous resource," said Kathy Kanipe, chair of OCUF and CEO of Parish FCU, Toledo … * WASHINGTON (3/6/08)--Allen Chew is the recipient of the second Kelly J. Purcell Credit Union Memorial Scholarship, named for the former director of federal government affairs at the California and Nevada Credit Union Leagues. Chew is a legislative affairs graduate student at The George Washington University Graduate School for Political Management, where Purcell received her master's. He has worked with the Credit Union National Association in Washington, D.C., for four years. From left are: University Professor Dean Christopher Arterton; Dr. Steven Billet, director of the university's legislative affairs program; Chew; and Bill Cheney, president/CEO of the leagues (Photo provided by the California and Nevada Credit Union Leagues) … * BURNSVILLE, Minn. (3/6/08)--US FCU's new "Borrower Resources" services encourage members to get early access to financial education and loan restructuring, instead of waiting until a crisis. "Borrower Resources" has four components. Financial Counseling offers complimentary one-to-one financial counseling through Lutheran Social Service of Minnesota (LSS). Loan Consolidation provides opportunities to combine loan balances into a single monthly payment to reduce debt more quickly. Loan Restructuring includes custom-designed loan modifications and can include loans from other institutions. Referral Programs provide awareness of and access to resources offered through local civic groups or charities. "This is a very proactive approach," said Jeff Olson, assistant vice president of asset protection, "and one that encourages our members to take control of their financial situation. If they see difficult times ahead, we want to have those conversations with our members early, allowing us to work together to reduce or eliminate future financial hardship" … * HARRISBURG, Pa. (3/6/08)--Belco Community CU introduced three new above-market interest rate accounts. The Sizzling Savings account offers members 7% annual percentage yield (APY) on new money balances up to $500, with a minimum balance of $5 required. The new Savvy Senior checking account for members 50 and older offers 1.25% APY, with a minimum balance of $500 required. The account also offers free basic checks and a one-time certificate rate increase coupon on 0.25% for new or refinanced certificates. The new Cha-CHING! Checking account offers 3.25% APY with a $1,000 minimum-balance requirement, plus free basic checks …

Pennsylvania Maxwell Herring Desjardins winners named

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HARRISBURG, Pa. (3/6/08)--The Pennsylvania Credit Union Association (PCUA) announced the winners of the state-level 2008 Credit Union Community Awards. The awards include the Dora Maxwell Award for Social Responsibility; the Louise Herring Award for Philosophy in Action; and the Desjardins Youth Financial Education Award. Recipients will be recognized at PCUA’s Annual Convention May 1-3 in Pittsburgh. Winners also will go on to the Credit Union National Association for the national competition later this year. First place recipients for Dora Maxwell Award for Social Responsibility are:
* $20 million-$50 million in assets, PALCO FCU, Muncy; * $50 milion-$100 million, Bellco FCU, Wyomissing; * $100 million-$200 million, Cross Valley FCU, Wilkes Barre; * $200 milion-$500 million, Belco Community CU, Harrisburg: and * $500+ million, American Heritage FCU, Philadelphia.
Louise A. Herring Award for Philosophy in Action first-place award winner for less than $50 million went to Horizon FCU, Williamsport. Desjardins Youth Financial Education Award first-place recipients:
* $35 million-$75 million, A-K Valley FCU, Lower Burrell; * $75 million-$250 million, Erie FCU, Erie; and * More than $250 million, Freedom CU, Warminster.

Pennsylvania Supreme Court hears FOM case

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HARRISBURG, Pa. (3/6/08)--The Pennsylvania Supreme Court heard oral arguments in Pittsburgh Tuesday in a case bankers have filed against the Pennsylvania Department of Banking on its community-chartering application process. The case, filed by the Pennsylvania Bankers Association, involves field-of-membership (FOM) issues and focuses on the application process for community charter, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway March 5). The Supreme Court case is an appeal relating to a Nov. 13, 2006, decision by the Pennsylvania Commonwealth Court that the department did not follow procedural due process requirements when it did not conduct hearings or make records available to banking interest groups, who oppose field of membership expansions (News Now Feb. 25). Attending were: Lonny Maurer, Belco Community CU, Harrisburg ; Lee MacMinn and John King of Freedom CU,Warminster; Rick Stipa of TruMark Financial CU, Trevose; Laurie Kennedy of the Pennsylvania Credit Union Association; Linda Carroll of the banking department; and representatives of the credit unions' outside law firms: Blank Rome and Stradley Ronon. "We felt the credit unions and the Department of Banking put on our best case," said PCUA's Kennedy. "Now we will await a decision by the State Supreme Court."

Wisconsin league Banks distort facts to deflect failures

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PEWAUKEE, Wis. (3/6/08)--"It's nothing but the same old broken record. What banks are doing is deflecting attention from their own failures by distorting facts about credit unions," said Brett Thompson, president/CEO of the Wisconsin Credit Union League. The Wisconsin Bankers Association's (WBA) support for an amended state bill that would subject large credit unions to the same type of Community Reinvestment Act (CRA) regulations banks must follow for their failure to meet financial needs in their communities, particularly those of low-income customers, said the league. The amended bill, AB 897, would require credit unions with more than $100 million in assets to document their efforts in serving lower-income populations (News Now March 5). "Not one valid study has ever cited locally owned credit unions--whose purpose is to serve their members, not make profits--for failure to fulfill their mission, and that includes the largest credit unions," Thompson said. "Banks want to heap costly regulations on credit unions at taxpayers' expense, with no documented need for doing so," said Thompson. "Credit unions are restricted to serving only eligible members, and they've done a great job doing just that." He noted WBA ignores the evidence, including the $176 million that Wisconsin credit unions return to their 2.1 million members annually in lower rates on loans, higher rates on deposits and lower or fewer fees. "Consumers already reap these benefits from credit unions without CRA," he added. Thompson added that WBA continues to point at studies that are statistically flawed or inconclusive to mislead lawmakers and deflect attention from banks' failure to satisfy the spirit of the CRA. For a more detailed look at Thompson's comments, use the resource link.

First Basin hangs up bank-conversion bid

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ODESSA, Texas (3/6/08)--First Basin CU in Texas announced Wednesday it has terminated its plans to convert to a mutual savings bank. It "will remain a credit union," said a press release on the credit union's website. The Odessa, Texas-based credit union has "terminated its plan of Mutual Charter Conversion and voluntarily withdrawn its applications to convert from a credit union to a mutual savings bank," said President/CEO Shem Culpepper in the press release. He said the $125 million asset credit union's board "made this decision based upon concerns surrounding false and misleading information being disseminated which affected the fairness of the voting process." "The board had become concerned that the controversy surrounding the vote was having an adverse impact on the credit union and its ability to serve its members," he said. Last month the credit union suspended the Feb. 21 membership vote on the conversion proposal, saying that members had received calls telling them that if they don't vote against the conversion, they would lose some of their deposits and their accounts would be closed. Other false statements included information about rate and fee changes, said Culpepper (News Now Feb. 18 and 19). According to Annette Snowden, board chairman, "Our first priority is, and always will be, to First Basin and its members. We look forward to returning First Basin to its normal business operations, providing highly personalized service and the exceptional value our members have come to expect." Members who opposed the conversion attempt are planning to run candidates in the next board election, according to Letty Morales, who founded Save First Basin, the group opposing the conversion (News Now Feb. 29).

Utah bill heads to governor

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SALT LAKE CITY (3/6/08)--A bill that would result in some legislative changes to ease restrictions on Utah's state-chartered credit unions unanimously passed the state House Tuesday, and now heads to the governor’s desk for approval to become law. The bill passed in the State Senate last week. “I think it is gratifying that several members of leadership stood up and helped move back some of the more punitive measures that credit unions have been subject to for several years,” Scott Simpson, president of the Utah League of Credit Unions, told News Now. Senate Bill 296, sponsored by State Sen. Curt Bramble (R-Provo), would create several changes to the state charter. It would:
* Increase the amount a credit union can loan to its members to 4% of assets from the current 1%; * Eliminate a requirement that borrowers must be members of a credit union for six months before receiving a business loan, and make them eligible immediately after joining; and * Maintain the current $250,000 cap on business loans, but allow the cap to increase with inflation--pegged to the Consumer Price Index--beginning May 5 with an increase each year on Jan. 1 (Deseret Morning News Feb. 22).
Although only a “handful of state-chartered credit unions do business lending” at present, this bill is very important to them, Simpson said. “No one is going to want to take out a business loan at a state-chartered credit union if they have to go through a six-month waiting period,” he added. Originally, credit unions wanted the business loan cap to be raised to 10% of a credit union's capital and surplus, and the $250,000 business lending cap to be lifted to 12.25% of a credit union's loan portfolio--similar to the cap for federally chartered credit unions. The league and the Utah Bankers Association (UBA) have promised Bramble and leaders of both houses of the state legislature not to return to the legislature seeking changes to the law for five years, the newspaper said. While not supporting the change for credit unions in the bill, the UBA pledged not to oppose the bill, as part of the compromise solution, Howard Headlee, UBA president, told the paper.

Study Top 50 retail banks fall short on e-support

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BELLEVUE, Wash. (3/6/08)--Add another one to the pile of reports that give banks less-than-stellar marks on their customer service. An audit of the online service provided to customers of the top 50 retail banks in North America pointed out significant service failures by the banks, according to Talisma Corp., a Bellevue, Wash.-based online customer service provider. A mystery shopper exercise queried the banks during November on "how to open an account" and "what kind of product and services are available for individual customers." The audit's findings:
* 36% of customers' e-mails went unanswered by the banks; * 96% of the banks audited did not offer live chat as a communication channel; * 94% of banks did not offer a "true" dynamic, flexible knowledge base. A majority offered little more than a list of static Frequently Asked Questions.
According to Steve Cox, vice president, Council of Better Business Bureaus, "Meeting expectations through customer service is a distinct trust issue with consumers in today's competitive marketplace. The Talisma report clearly highlights that our nation's leading banks need to examine, and then take action to improve, performance on customer service practices that build consumer confidence, loyalty and trust." While banks are examining their performance and trying to catch up with credit unions in the personal service arena, credit unions may be tempted to coast on their own success record in member trust and customer satisfaction surveys. But don't. "In an industry where products and services are rapidly commoditized and the cost of switching is low, member/customer service is now a primary competitive differentiator" among banks, said Talisma.

Latino CDC awarded 100000 for new branch

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DURHAM, N.C. (3/6/08)--The Winston-Salem Foundation has awarded a $100,000 grant to Latino Community Development Center (Latino CDC) to support the opening of a Latino Community CU (LCCU) branch. The new branch will be in Winston-Salem, N.C., which is in Forsyth County. Forsyth County has the third-largest Latino population in the state, but it has no financial institution and education program tailored to the needs of Latinos. LCCU’s members will be better served by the new branch, according to the credit union. The branch will offer bilingual, bicultural financial services and education to the rapidly growing underserved Latino community, LCCU said. “The opening of the Winston-Salem branch in these uncertain economic times is proof that we have confidence in this country,” said Roger Montes, regional manager for the Triad area. “Our members in Winston-Salem and nearby counties will appreciate the convenience of a new location closer to their homes.” The full-service branch in the Waughton section of Winston-Salem will provide all the transaction services, deposit products, consumer loans and mortgage products available at LCCU’s other five branches throughout North Carolina. The new location also will offer financial education workshops to members and the larger community. The Winston-Salem Branch of LCCU is tentatively scheduled to open in May 2008.