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Bankrate.com: CUs help members reconstruct credit scores

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NORTH PALM BEACH, Fla. (3/5/14)--Credit scores carry a lot of weight with lenders when they're considering the credit risk of potential borrowers. A shaky FICO score can negatively impact loan fees, in turn making borrowing burdensome for consumers.
 
With this in mind, credit unions are offering myriad ways to help their members build up or rectify those all-important scores, a recent article in Bankrate.com noted.  
 
Through low-cost secured loan programs, free credit counseling and online debt management courses, credit unions are enabling members to establish credit, or in many cases rebuild what they lost when the economy fell apart in 2008.   
 
Bankrate.com's March 3 article featured four ways credit unions across the country are helping boost their members' credit.
 
First, credit unions are offering up credit-builder loans.
 
Rather than handing over cash upfront, per traditional loans, credit unions such as Digital FCU, Marlborough, Mass., will instead tuck the loan into a savings account.
 
Members gradually pay off the loan, which in turn improves their payment history, and subsequently their credit scores should improve. Once the loan has been paid off in full, the $5.25 billion-asset credit union gives them the funds, in addition to any interest that's accrued.
 
Many credit unions such as Charlotte (N.C.) Metro FCU, with $289 million in assets, are offering free credit counseling to their members.
 
Members who have used such programs often watch their credit scores climb, according to Susan Coughlin, electronic delivery and member retention manager for Charlotte Metro.
 
"The counseling helps create a more financially healthy member," Coughlin told Bankrate.com.
 
SAC FCU, Bellevue, Neb., with $694 million in assets, offers the third type of program highlighted in the article: Free online services. SAC FCU maintains a blog on credit repair, which is available to anyone, and consumers can download an e-book that details the basics of fixing credit.
 
Lastly, the article suggests looking into establishing credit with secured credit cards, a service that many credit unions provide. The service works by allowing members to use cash as collateral for the credit card, and the cash becomes the credit line for the account.

CU System Briefs

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  • NEW YORK (3/5/14)--The National Federation of Community Development Credit Unions' 2014 Annual Conference will be held May 14-16 in Detroit. The conference, co-hosted by Detroit-based $31 million-asset Communicating Arts CU and the Michigan Credit Union League, will celebrate credit unions' commitment to expanding financial inclusion to families, new immigrants, young people, seniors and an ever-growing number of Americans seeking alternatives to mainstream banks. Detroit Mayor Mike Duggan will offer opening remarks. Communicating Arts CU will host a site visit to its Highland Park branch followed by a bus tour that will include housing financed by the credit union and development projects financed by Detroit native Dan Gilbert, founder and chairman of Quicken Loans ...
     
  • MARLBOROUGH, Mass. (3/5/14)--During January, Central One FCU, headquartered in Shrewsbury, Mass., surprised both members and non-members alike by giving away free money through its five ATMs, the Massachusetts Credit Union League reported (Daily Scan March 4). One hundred $50 bill vouchers were included in the credit union's various ATMs in place of $20 bills. Random ATM users received the vouchers in place of $20 bills. The recipient then redeemed the voucher at the branch for the extra money ...
     
  • BISMARCK, N.D. (3/5/14)--Western Cooperative CU, with $318 million in assets, Williston, N.D., has donated $50,000 to St. Joseph's Hospital and Health Center to support the construction of a new health center and medical office building, the Credit Union Association of the Dakotas reported (The Memo March 4) ...
     
  • MADISON, Wis. (3/5/14)--Credit union staff can vote for this year's theme for International Credit Union Day, which will be Oct. 16. The team will submit the two themes with the most votes to the World Committee for consideration. The poll is open through Saturday. The U.S. will be part of the world committee that selects a theme and design, which will be revealed in May ...

URM card breach costs NW CUs $687,000

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SEATAC, Wash. (3/5/14)--Before the Target data security breach hit, credit unions in the Spokane, Wash., area were dealing with the aftereffects of a grocery-store chain breach--one that cost them $687,000.
 
The Northwest Credit Union Association (NWCUA) surveyed credit unions about the November 2013 breach linked to Spokane, Wash.-based URM Stores Inc. (News Now Dec. 18).
 
The average affected credit union incurred more than $62,500 in total losses--a number that was noted in the March 4 edition of The Spokesman-Review. The URM breach caused severe losses to local financial institutions, said Debie Keesee, CEO, Spokane (Wash.) Media FCU. "The URM impact was much more concentrated in this area than Target," Keesee told The Spokesman-Review.
 
"Whether it's a Target or a non-Target, credit unions are covering the costs," Lynn Heider, NWCUA vice president of public relations and communications, told News Now.
 
NWCUA prepared a fact sheet to take to the Credit Union National Association's 2014 Governmental Affairs Conference to inform the Washington state delegation about the costs incurred.
 
Combined with the results from CUNA's Target data security breach, which reported $30.6 million in losses nationwide, the fact sheet "armed us with really good eye-opening data that shows how much damage these breaches do," Heider added.
 
The fact sheet also called for stronger data security standards for retailers; required reimbursement of costs incurred by credit unions after a breach; and the ability for credit unions to share the name of the merchant where the breach occurred.
 
CUNA also is pressing Congress to address the shared responsibility that retailers and credit unions have in protecting consumers' data.

KCUA picks 3 for Money Possible: Destroy Debt

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WICHITA, Kan. (3/5/14)--The Kansas Credit Union Association has selected three families to take part in the Money Possible: Destroy Debt campaign, its consumer financial literacy program.
 
Loosely based on the "Biggest Loser" TV show, KCUA's campaign will follow Kansas credit union members as they work with the Consumer Credit Counseling Service to destroy their household debt and learn smart money management skills.
 
"By following our members through their challenges and successes, the campaign can be a learning experience for everyone, not just our participants," said Melissa Baptista, KCUA research and development director. "Many consumers have more debt than they'd like, are worried about their retirement options, or just want to ease the stress of their financial situation. By watching others, just like them, we can help those who may be in the same financial situation as our participants."
 
Participants include:
  • Raquel. In her 30s, married and a mother of two young children, her goal is to pay down payday loans, and learn to save.
  • Lisa and Bryan. In their 40s, Lisa and Bryan want to save for retirement. They have three older children. They need to learn to say "no" and live within their means.
  • Fredica. A divorced mother of four in her 50s, Fredica wants to control impulse spending and save enough to buy a house.
The Money Possible campaign will use weekly television segments on KAKE-TV ABC to follow the families. Fifteen-second "Tip of the Week" spots also will air several times a week. Updates will be posted on the MoneyPossible.org blog. The campaign can also be followed on social media with the hashtag #MoneyPossible.

Filene initiates Innovation Immersion for CUSOs, leagues

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MADISON, Wis. (3/5/14)--More and more, credit unions are grappling with external market forces such as competition, fluid consumer preferences and economic imperatives.
 
To remain agile and competitive in the face of these forces, industry leaders believe that the member-owned financial institutions--in addition to the credit union service organizations and state leagues-- must continue to pursue innovation.
 
Filene Research Institute recently launched a new Innovation Immersion program to help those service organizations and leagues accomplish just that.
 
"By trying new approaches to consumer finance, credit unions can better prepare themselves for a changing financial marketplace while improving their members' financial lives," said Tansley Stearns, impact director at Filene, in a press release.
 
The program is a one-day, experimental-learning session that Filene has built to ignite a culture of innovation within the credit union organizations and leagues who participate. A free webinar introducing the program will be April 2 and April 8.
 
So far, more than 10 credit unions and leagues have attended the program.
 
"The Innovation Immersion helped our leadership team to continue building innovation into our culture," said Brett Thompson, president/ CEO of the Wisconsin Credit Union League. "The methodologies and practical approach not only sparked ideas during our one-day session, but will help us to grow a culture of innovation that ensures ideas and innovation are a part of who we are as a league well into the future."

Cash isn't king when buying cars, survey says

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FARMERS BRANCH, Texas (3/5/14)--A consumer survey recently conducted by the Texas-based Cornerstone Credit Union League revealed that a meager 4% of car-buyers among those polled had saved up and paid for their new wheels in cash.
 
Instead, almost 80% of the participating consumers borrowed money from financial institutions to pay for their vehicles, the league's Year-End 2013 Consumer Survey found (Leaguer March 3).
 
Meanwhile, 14% of the car-buyers financed their purchases directly through auto dealerships, which came in as the second most popular financing method.
 
The survey polled nearly 140 consumers--99% of which were members of credit unions.
 
In addition to illustrating how people approach financing their vehicle purchases, the survey also shed some light on where people actually bought their new rides.
 
Most commonly, it seems, consumers are zooming off to new-car dealerships. The survey found that 62% of the car-buyers bought their vehicles from new-car retailers, while 32% headed to used-car dealerships to buy their cars.
 
Only 3% bought vehicles through credit union auto-buying services, which can help prospective car-buyers connect with local credit unions to finance their purchases.
 
The year-end consumer survey also highlighted problems families have sticking to their general household budgets, despite the fact that the large majority of them find budgeting important.
 
Of the 143 consumers polled, 79% said keeping a household budget is important, but only 5% said they spend within the amount they've targeted.
 
The greatest challenge, two-thirds of the consumers said, was overcoming "unexpected expenses," while 22% said poor planning was to blame.

Two CUs purchase banks in Wis., Ala.

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NEW BERLIN, Wis., and DOTHAN, Ala. (3/5/14)--Two credit unions are in the final stages of acquiring bank operations, continuing what might be seen as a recent credit union trend.
 
Landmark CU, New Berlin, Wis., Monday announced the completion of its planned acquisition of Hartford, Wis.-based Hartford Savings Bank.
 
With the acquisition, $2.3 billion-asset Landmark CU adds 8,800 new members and $155 million in assets.
 
Landmark will also assume Hartford Savings Bank branch locations in Hartford, Juneau and Hubertus, Wis., and now serves its members through 32 branches in southeastern Wisconsin. In addition to a wider branch network, former Hartford Savings Bank customers will also have access to a greater range of financial services, James Reichart, Landmark CU vice president of marketing, told News Now.
 
In another credit union-bank acquisition, Dothan, Ala.-based $255-million Five Star CU's purchase of $21 million asset Flint River National Bank in Camilla, Ga., has been approved by the Alabama Credit Union Administration, pending approval from the National Credit Union Administration (NCUA), Robert A. Steensma, Five Star president/CEO told News Now.
 
Five Star has also received a field of membership expansion approval, pending NCUA approval, from the Georgia Department of Banking and Finance, to operate in Mitchell County, Ga., where Flint River National Bank is located, Steensma said.
 
Although Mitchell County is served by four banks, Five Star will be the only credit union offering services in the county, Steensma said. "Unless something changes, we will be the only financial institution in the county that offers free checking," Steensma told News Now.
 
The deal has been approved by Flint River shareholders, Steensma said.
 
Three other credit unions have acquired bank operations since 2011. Municipal Employees CU of Baltimore will took over operations of Advance Bank in December (News Now Dec. 4). GFA FCU, Gardner, Mass., acquired Monadnock Community Bank in December 2012. United FCU, based in St. Joseph, Mich., purchased Griffith (Ind.) Savings Bank in December 2011.