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CU System

Ala. Fla. leagues form League of Southeastern CUs

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BIRMINGHAM, Ala., and TALLAHASSEE, Fla. (3/6/09)--The memberships of the Florida Credit Union League (FCUL) and the Alabama Credit Union League (ACUL) voted overwhelmingly this week to combine the leagues into one entity, the League of Southeastern Credit Unions (LSCU). Florida members voted Wednesday and Alabama members on Thursday to combine into a single entity representing 332 credit unions with combined total assets of $55 billion. "This has indeed been a historic day as our credit unions took positive action towards securing the future of our movement in these two states," said Steve Swofford, ACUL chairman. "It is now time for us to put our shoulders to the wheel and ensure a smooth transition into the new joint league." "Credit unions from both states will benefit in this consolidation," said Rich Helber, FCUL chairman. "Coming together as the League of Southeastern Credit Unions will create a stronger, more strategic position for all of our credit unions in numerous areas." The credit unions approved the proposal by a vote that exceeded the required two-thirds majority of members present at each meeting. Each state's previous board chairman will become a member of the new combined board and will select seven board members to serve on the LSCU board. The 16-member board will then elect a chairman from amongst them. Also, the new board will begin an immediate search for the LSCU's new CEO. "With my and [ACUL President/CEO] Gary Wolter's upcoming retirement, we determined this was the perfect opportunity to create a strong, stragically positioned entity which will help our credit unions across both states," said Guy M. Hood, FCUL president/ CEO. "With the continuing economic uncertainties, financial pressures and regulatory challenges, it is more important than ever that we help our credit unions build the strongest framework possible for their futures." Previously, the two leagues' boards voted Dec. 8 and 9 to propose a consolidation of the two groups. "The decision today by Alabama's credit unions recognizes that change dictates new ways to represent credit unions in today's environment," said Wolter. " I applaud the forward-thinking leadership in Alabama and Florida for taking this bold step and I truly believe the LSCU will become a model for other leagues to consider," he added.

Moodys adjusts Australian CUs outlook rating

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SYDNEY (3/6/09)--Moody's Investors Services says it has adjusted the Australian credit union sector's credit outlook rating to negative, with consolidation in the industry remaining the most dynamic of all Australian deposit-taking institutions (ADIs). The outlook applies across the sector, as funding pressures increase from strong retail deposit competition and credit quality weakens, reflecting the current economic environment, said Moody's Sydney office (The Asian Banker Interactive Feb. 28). Marina Ip, assistant vice president in Moody's Sydney office, said larger credit unions have more robust balance sheets and are likely to withstand funding pressures and erosion of net interest margins. However, smaller institutions may not survive the environment without further consolidation, Ip said. The report said funding pressures are more evident, with strong competition for retail deposits coming from ADIs such as banks that are aggressive in pricing strategies to attract new deposits. However, the government's guarantee of deposits in October 2008 should reinforce confidence in smaller ADIs such as credit unions, Moody's said. "With the 10 largest credit unions averaging non-performing loans to gross loans at 0.21% and nonperforming loans to equity and loan loss reserves at 2%, the [credit union] sector remains within Moody's highest category for asset quality," said Ip.

Letter to WSJ editor touts CUs co-ops

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NEW YORK (3/6/09)--A letter to the editor of the The Wall Street Journal (March 5) says the country needs to invest in business cooperatives, such as credit unions. "While bank partnerships can mitigate risk-taking by executives, there is no direct benefit to bank customers unless they, too, are shareholders," wrote Pia Duryea of Arlington, Va. "We need to invest in business cooperatives," Duryea wrote. "Credit unions, or financial cooperatives, are distinct from investor-owned businesses. Those who use credit union services own an equal share of the business. As a result, credit unions thoughtfully weigh the risks they take." Duryea cited statistics, saying that as of June 2008, credit unions experienced low levels of delinquent mortgage payments: 0.78% as compared with banks' 2.7%. The letter noted credit unions' better interest rates, reduced fees and democratic control, saving credit union members 11 billion more than bank customers. "So, while partnership is good, cooperation is better," Duryea concluded.

IMSNBCI to small businesses Consider CUs

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NEW YORK (3/6/09)--Small businesses should look to credit unions for financing, a columnist for MSNBC.com wrote Wednesday. In a column titled “Creative Loan Help for Mom and Pops,” Eve Tahmincioglu mentioned a Tuesday article in The Wall Street Journal that said credit unions are making small business loans because they have been mostly untouched by the subprime mortgage mess. She quoted from the article: “About 27% of the 8,147 credit unions in the U.S. offer business loans, according to the Credit Union National Association, a trade group based in Washington, D.C. The amount of business loans was up 18% last year to almost $33 billion from nearly $28 billion in 2007. The average loan size is about $215,000.” The article mentioned the small-business lending restrictions on credit unions, and how the industry is trying to get Congress to raise credit unions’ small business lending cap.

Kansas CUs did well in 08 expect harder 09

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WICHITA, Kan. (3/6/09)--Kansas credit unions experienced an increase in assets, loans and members in 2008 despite the economic woes that beset the nation in the last half of the year. Last year was good year--on average--for Kansas credit unions, John Smith, Kansas Department of Credit Unions (KDCU) administrator, told The Wichita Eagle Thursday. Kansas credit union assets increased 11.4% to $3.34 billion between 2007 and 2008, according to the KDCU's Fourth Quarter 2008 Call Report Statistics. Total loans were up 10% in the same period, to $2.33 billion. Credit unions added more than 5,600 members, the report said. Also higher were credit union shares and total net worth. Total delinquencies for the state's credit unions were $30.3 million, compared with $26.8 million in 2007. However, a writedown to the National Credit Union Share Insurance Fund--due to a $1 billion fund injection to help Lenexa, Kan.-based U.S. Central FCU--could make 2008 a more difficult year, Smith told state credit union executives and directors in a memo, the newspaper said. It is expected that the writedown will lessen each Kansas credit union’s return on assets and net worth, he added. The National Credit Union Administration told examiners in February not to “overly focus on the financial impact” of the writedown on each credit union examination, Smith told the newspaper.

BizKid cited on NBCs Today Show

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NEW YORK (3/6/09)--NBC's "Today Show" mentioned the credit union-sponsored PBS show, BizKid$, citing it as part of a national push to make the younger generation more money savvy. The mention is about two minutes into the "mini-mogul" segment aired Wednesday morning. The clip is the result of a tour of New York by Biz Kid$ Executive Producer Jamie Hammond, who is presenting the BizKid$ curriculum as a resource for educators at a conference this week in New York City. Roughly 6,500 to 7,000 education leaders from the U.S. and Canada are participating in the program. Across the nation, as part of the national underwriting investment by America's Credit Unions, 16 major media markets are active in Biz Kid$ curriculum outreach projects. The new Biz Kid$ outreach facilitator, Outreach Extensions, is partnering with public television stations, local schools and credit union representatives to talk about how the program can be incorporated into classrooms. To view the program, use the link.

Ohio league expects mergers to increase

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COLUMBUS, Ohio (3/6/09)--The number of credit union mergers in Ohio rose in 2008, and mergers should continue to increase, said the Ohio Credit Union League, citing year-end data from the Credit Union National Association. Although the number of Ohio mergers slumped the past few years, there were 19 mergers in 2008. Ohio has 412 credit unions (eLumination March 4). The trend of increasing mergers should continue due to the troubled economy, and if the National Credit Union Administration’s Corporate Credit Union Stabilization Plan remains unchanged, said Dave Shoup, vice president of regulatory affairs for the league. In 2007, the national loan-to-share ratio was at a 28-year high. It decreased in 2008 to 81.1% nationally--75.6% for Ohio credit union unions. Overall, liquidity is tight, and earnings pressures are becoming more widespread due to economic forces and the added pressure of the stabilization plan, Shoup said.

CDCUs now have express applications for secondary capital

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NEW YORK (3/6/09)--The National Federation of Community Development Credit Unions has developed a new Express Application for community development credit unions (CDCUs) needing secondary capital. The move is in response to the recent economic downturn and the potential cost of the Corporate Credit Union Stabilization Program on CDCUs nationwide. The new application process will allow the federation to target investments in CDCUs proactively in times of uncertainty and concern. It is expected to speed up the application process for qualified CDCUs, helping support the services CDCUs provide their low- and moderate-income communities. Secondary capital is a subordinated debt counted as net worth in credit union financials. Secondary capital can be a vital instrument to help keep credit unions viable as they continue to serve low-income communities in the current economic environment, the federation said. To apply for the Secondary Capital Application Express Path, credit unions must meet the following criteria based on their Dec. 31, 2008 financials:
* A net asset ratio greater rate than 6.5%; * A return on assets greater than 0%; * Delinquencies/total loans less than 6.25%; and * Loans/assets greater than 50%.
The application requires:
* January and February results plus a three-year financial projection; * Most recent delinquency report; * Most recent business plan. The credit union does not need to create a new plan for this application; * At least three years of lending experience; * Must be a CDCU member of the federation for at least three months at the time of disbursement; and * Must meet National Credit Union Administration regulatory eligibility standards for secondary capital (low income designation plus filing of a secondary capital plan).
CDCUs may request only up to 25% of equity capital--reserves plus undivided earnings-- as of Dec. 31, 2008. The total amount of the request through the express path should not exceed $150,000. The Express Path Application deadline is April 3. For more information, use the link.

Twitter comments on CUs show social-media power

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COLUMBUS, Ohio (3/6/09)--A couple of Twitter comments and a Facebook comment from viewers touted the advantages of credit unions over banks at the end of a Columbus, Ohio, TV station’s segment about bank’s financial troubles and bailouts, and credit unions as an alternative.
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The three-minute segment of WCMH TV4, Columbus Ohio, noted some credit unions in the state are expanding. It featured a brief interview with Patrick Harris, director of media relations for the Ohio Credit Union League, talking about credit unions’ not-for-profit orientation, better rates and member focus. The segment concluded with three comments sent to the station, after it asked viewers what they thought about credit unions. One Twitter user commented: “Been with my credit union for almost 10 years, would never go back to banks and their fees.’ Another user of Twitter said: “Credit unions good, banks bad, customer service, rates, customer service, executive compensation, customer service.” A Facebook user commented: “I started using a credit union about 10 years ago, when I found I could get better interest there. I also started my children [as members] there. As a result, they take pride in saving.”

WOCCU launches Womens global leadership initiative

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MADISON, Wis. (3/6/09)--The World Council of Credit Unions (WOCCU) has launched a new initiative to help women in developing countries build their leadership capacity. WOCCU's Worldwide Foundation for Credit Unions is raising funds through the new Global Women's Leadership Initiative, a network of women credit union leaders, to support women inhibited by financial hardship in developing countries.
Click for video Click for video. (Photo provided by World Council of Credit Unions)
WOCCU will launch the initiative to coincide with International Women's Day, which is Sunday. Funds raised will be used to provide women in need with educational opportunities and expand local microfinance efforts in developing countries. The initiative is led both by WOCCU and the Canadian Co-operative Association (CCA), which offers educational resources and information about women worldwide through its website. Both organizations are dedicating efforts to provide women with greater access to credit union resources that will enable them to lead their communities. "Women are often the vital link between credit unions and their communities in developing countries," said Brian Branch, WOCCU's executive vice president and chief operating officer. "Despite social obstacles many of them face, women lead in the economic development of their communities and manage their families' financial well-being." In countries like Sri Lanka, for example, a new relationship between WOCCU and Women's Bank, a financial cooperative owned and operated entirely by women, provides financing and education to women farmers. The cooperative also guarantees funding for groups comprised of elderly women and those in greatest need. In Afghanistan, despite being subjected to social restrictions under Islamic law, many women have begun working with Islamic investment and finance cooperatives (credit unions) to secure small loans to start micro businesses. The Global Women's Leadership Initiative is designed to support such global efforts. By harnessing the influence, experience and involvement of credit union women leaders from both developed and developing countries, WOCCU and CCA hope women will better serve as leaders within their respective communities, according to Susan Mitchell, CEO of O'Rourke, Mitchell & Associates, San Francisco, Calif., and an advisor to the program. “My work with the Global Women's Leadership Initiative allows me to speak to both genders about the importance of women's roles in creating strong societies," Mitchell stressed. “This effort will allow us to create a network among credit union leaders that truly makes a difference. This is the right time to launch such an initiative because we have the voice, we are visible and it's our chance as leaders to expand the good work done through financial cooperatives for the benefit of people worldwide." Funds donated through the initiative will support development and education efforts, including scholarships to the peer learning session and day-long forum to be held in conjunction with WOCCU's World Credit Union Conference on July 30 in Barcelona, Spain. As the effort grows, additional networking opportunities will be scheduled. Participation in the Global Women's Leadership Forum is by invitation only, and is designed to tap the leadership experience of women credit union CEOs and executive team members, retired women credit union executives, women credit union volunteers and women executives of credit union partner organizations. However, financial contributions to the initiative's goals and objectives are accepted from anyone. Contact Valerie Breunig at vbreunig@woccu.org for more information.

NEFE introduces PSA at Indiana in-school branch

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INDIANAPOLIS (3/6/09)--The National Endowment for Financial Education (NEFE) chose a credit union in Indiana to unveil a Public Service Announcement (PSA) promoting use of NEFE's High School Financial Planning Program (HSFPP) as a tool to improve the financial IQ of the state's teenagers.
Click to view larger image Finance Center FCU (FCFCU) staff hosted the unveiling of the National Endowment for Financial Education (NEFE) Indiana Public Service Announcement on financial literacy at the credit union's Arsenal Technical High School student-run branch, Indianapolis. From left: Haylee Teeple of FCFCU's J. Everett Light in-school branch, North Central High School; John Parfrey, NEFE High School Financial Planning Program director; Tara Turner, CFCU director of financial literacy; Larry Marcum, FCFCU vice president, sales and community development; Indiana Secretary of State Todd Rokita; Indianapolis First Lady Winnie Ballard; and FCFCU's James Davidson, financial literacy manager, and Jo Kiel, vice president, retail operations. (Photo provided by the Indiana Credit Union League)
NEFE unveiled the PSA at Finance Center FCU's student-run branch at Arsenal Technical High School near downtown Indianapolis. NEFE has partnered with credit unions in the state and the Indiana Credit Union League on several levels, said the league. Representatives from the school and the credit union were joined by a number of guests including Indianapolis First Lady Winnie Ballard; Secretary of State Todd Rokita, the featured spokesperson in the PSA; and league staff, and The PSA, which has been distributed statewide for consideration by TV stations, was shot at the school and includes footage of Finance Center FCU Financial Literacy Manager James Davidson teaching a class. It was produced with a grant from the Indiana Department of Financial Institutions. That same grant also was used for Indiana Teen $ucceed, a summer initiative in which more than 300 educators were trained at sessions hosted by Indiana credit unions to teach the NEFE program. To view the PSA, use the resource link.

Three named to two CUNA Council exec committees

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MADISON, Wis. (3/6/09)--Three credit union executives have been named to the executive committees of two CUNA Councils. Gayle Gustafson, vice president of financial services for Rivermark Community CU, Portland, Ore., was appointed to a vacant seat on the executive committee of the CUNA Lending Council. Gustafson has 27 years' experience in the credit union industry in lending, human resources, operations and member service. A member of the CUNA Lending Council since 2002, Gustafson served as chair of the CUNA HRTD Council from 1999 to 2001, and of the CUNA Councils Forum from 2001 to 2004. She was also a member of the Credit Union National Association (CUNA) Membership Growth Task Force. Robert Davis, senior vice president of human resources for VyStar CU, Jacksonville, Fla., was selected to fill a vacant seat on the CUNA HRTD Council executive committee. Davis joined VyStar in 2007, bringing more than 30 years of experience in human resource management and consulting. Davis is a member of the Society for Professional Human Resource Managers and of World at Work. Danielle Brown, senior vice president of operations for the Credit Union Association of Oregon, was named the new league representative of the CUNA HRTD Council. She replaces Tracy Conner, vice president of professional development and member services for the Credit Union Association of New York. Brown serves as chair of the State Credit Union Foundation Network and secretary of the Oregon Jump$tart Coalition for Youth Financial Literacy. She is also a credit union development educator.