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CO-OP selects Catalyst Corporate for payment settlement services

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RANCHO CUCAMONGA, Calif. (3/8/12)--CO-OP Financial Services has selected Catalyst Corporate FCU, Plano, Texas, to continue to provide payment services for CO-OP's client credit unions.

CO-OP Financial Services, which provides ATM network and payments services for credit unions nationwide, previously used payment services from Western Bridge Corporate FCU.

Catalyst Corporate began providing those services after it acquired the assets of Western Bridge Corporate in December from the National Credit Union Administration (NCUA), which held the assets in receivership.

CO-OP Financial Services President/CEO Stan Hollen said the move reflects CO-OP's support for corporate credit unions and their "key role" in the future of the credit union movement.

Catalyst's settlement services include check clearing and automated clearinghouse, electronic funds transfers and ATM transactions. Catalyst also markets CO-OP's network access and other services.

CU System briefs (03/06/2012)

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  • PITTSFIELD, Mass. (3/7/12)--Felisa Kazimierczak, 43, of Adams, Mass., a head teller at Pittsfield, Mass.-based Greylock FCU, pleaded not guilty Monday to charges of embezzling $58,000 from the credit union, falsely reporting an extortion crime and witness intimidation. Kazimierczak allegedly told police that she found a note on her car threatening her teenage daughter with harm unless she handed over money. However, police said video surveillance showed no one near the car.  She has worked for the credit union for 11 years (Associated Press Newswires March 6) …
  • EAST ST. LOUIS, Ill. (3/7/12)--A former vice president of operations and loan officer at Alton (Ill.) Employees FCU has been sentenced to eight months in federal prison for defrauding the credit union out of $72,000.  Kalicza Tegel-Mills, 26, of  Plainview had pleaded guilty in November to one count of defrauding the credit union by allegedly increasing personal loan amounts without supervisory approval or proper documentation and wrongly posting payments to her and her husband's credit card accounts. She also allegedly used the money to buy a truck. Tegel-Mills also was sentenced to eight months of house arrest and ordered to repay $72,010 to the credit union. She repaid $62,842 at her sentencing hearing (STL Today and The Alton Telegraph via Associated Press Newswires March 6) …
  • BOULDER, Colo. (3/7/12)--Boulder Valley CU, based in Boulder, Colo., was awarded the Education Credit Union Council's 2011 "It's About People Helping People" Lifetime Achiever Award for its financial literacy program. The more than $240 million asset credit union integrated student credit unions into the school district's financial literacy curriculum and incorporated classroom presentations to provide an educational foundation. Its primary focus was to give students an opportunity to manage their own accounts and establish credit responsibility skills before graduation. The program also incorporated on-line financial education modules. Students were trained and worked at the student  branches; drafting class students designed the student branch office; media students developed viral ads to raise awareness of the benefits of joining the student credit union; and selected students served on the credit union's advisory board to develop business plans and marketing strategies …

Banks play hard to get on mortgage loans--N.J. paper

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ASBURY PARK, N.J. (3/7/12)--Many of the nation's largest banks aren't lending to homebuyers, even though they are well-capitalized, says a New Jersey Press Media investigation cited in an article in Sunday's Asbury Park (N.J.) Press.

The article, "Mortgage Loans Prove Hard to Get," is the first of a two-part series on banks' tight lending despite their position of "sitting on a mountain of cash they've accumulated since the recession." The article was cited by the New Jersey Credit Union League in the league's newsletter, The Daily Exchange (March 5).

Instead of lending to homebuyers, big banks are busy refinancing existing mortgages, paying off debt and cutting expenses, even after receiving bailout money from taxpayers, the article said.

The new lending environment is a turnaround from five years ago, when banks made mortgage loans to nearly everyone, said Park Press. Borrowers looking to buy a home in the current environment are finding banks scrutinizing every financial move they make. The changes have slammed the brakes on the housing market, the article added.

It cites examples of New Jersey residents with good income, good credit and qualifying down payments who are encountering difficulties in the mortgage-qualification process.

The league reported that the article also said banks have seen mortgage lending drop because of tighter restrictions from lenders and government agencies, less demand from potential buyers and low interest rates, the league reported.

CUs grow as bank fees loom--media roundup

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MADISON, Wis. (3/7/12)--As banks introduce another round of fees, media across the nation continue to report on credit unions' membership growth due in part to consumers' disillusionment with bank fees. Newspapers in Ohio, Wisconsin, Los Angeles, Georgia and more, as well as CNNMoney, reported that credit unions grew in membership.

"Credit unions hit a record number of members last year, as a growing number of consumers grew fed up with the fees at the nation's biggest banks and took their money elsewhere," said CNNMoney (March 1). Credit unions added 1.3 million new memberships in 2011, bringing total membership to a record 91.8 million by the end of 2011. The article noted that much of the growth was in fourth quarter and spurred by consumer movements like Bank Transfer Day. It also referred to a J.D. Power and Associates report that showed a similar exodus from big banks to smaller banks and credit unions.

Ohio's credit unions also benefitted from banks' fees, said the Dayton Daily News Monday in the article, "Bank fees push customers to area credit unions." "Consumers frustrated with bank fees and services helped area credit unions add more than 35,000 new members last year," it said.  More than 40 credit unions in a seven-county area finished the year with a record 491,160 members--a 7.6% increase over 2010 and an 11.3% increase over membership in 2009.

The Ohio Credit Union League told the Daily News that although credit unions account for about 7% of all deposits in Ohio, many are growing their memberships through word of mouth and frustration with bank fees and policies.

Jennifer Tschudi of Kettering, Ohio, said she joined Wright-Patt FCU, a Fairborn, Ohio-based credit union, and closed her Bank of America account in October because the bank was not meeting her needs and she was dismayed by its announcement in September that it would charge a $5 monthly debit card fee. That fee was rescinded after the public outcry it prompted.  The article reported on Bank Transfer Day's impact, which prompted 441,000 new memberships in September and October, it said.

"The discontent with big banks in 2011 was a boon for credit unions across the nation, including many in Wisconsin," reported The Post-Crescent in Appleton, Wis., Monday.  Although the area didn't get as big a membership growth last year as counterparts elsewhere in the nation, that may be "because we have such a strong credit union presence," Cathie Tierney, president of Community First CU, Appleton, told the newspaper.

Statewide the number of members increased by 39,421 over last year, said the state's Office of Credit Unions. In the month leading up to Nov. 5's Bank Transfer Day, Wisconsin credit unions added 14,700 new members and $102 million in new deposits, said the Wisconsin Credit Union League in the article.

Capital CU, Kimberly, Wis., added 800 new members last year to reach 33,000. Lakeview CU, Neenah, added 50 people "the best year we've had in a long, long time," Pat Lowney, Lakeview president, told the newspaper. He attributed the increase to the increased visibility and awareness of credit unions. Member service representatives told him people joined because of dissatisfaction with big banks.

Forty percent of the state's population belongs to a credit union.

The Los Angeles Times' Morning Money column also noted that credit unions doubled new memberships last year as major banks were targeted by the Occupy Wall Street Movement and the Bank of America's plans for the debit card fee were announced. "Consumers fed up with the rising tide of bank fees helped the nation's credit unions more than double their number of new customers last year," the article said, citing National Credit Union Administration's statistics.

In Savannah, Ga., the Savannah Morning News reported that statewide, deposits grew 10.5% last year "driven largely by new fees and account changes imposed by the large banks." It said the results of four local credit unions--Georgia Heritage FCU, Georgia's Own CU, GeoVista FCU and Workmen's Circle CU--increased their deposits and assets in 23011.

SECU branch reports damages by tornado in N.C.

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MURPHY, N.C. (3/7/12)--A branch of State Employees' CU (SECU) in North Carolina sustained some damage from last weekend's widespread tornadoes that touched down in parts of the Midwest, Southeast and Atlantic Coast regions.

Fortunately, there was only minimal damage to the Murphy, N.C., branch of SECU as a result of a tornado, Sandra Jones, SECU vice president-member education, told News Now after speaking with Bobby Hall, SECU senior executive vice president.

"There was no structural damage, only minor damage to the drive-thru area and some ceiling-tile damage due to water leakage," Jones explained. "Power was out over the weekend, but it was restored mid-morning on Monday and the branch was able to reopen before lunch. Repairs are already underway."

Also, there were no reports of damages to credit unions in Tennessee, Trish Patterson, vice president for education/information at the Tennessee Credit Union League, told News Now.

Two significant bouts of severe weather hit Tennessee Friday but no deaths were reported. Roughly 75 tornado warnings were issued in the state, with several tornadoes causing injuries statewide ( March 3).

Storms and tornadoes that struck the Chattanooga, Tenn., area Friday injured at least 33 people and did damage to hundreds of homes--making it the second-largest outbreak in the past 25 years, according to local experts ( March 4).

Not so fast on mobile banking says survey

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MADISON, Wis. (3/7/12)--Growth in mobile banking and payments is being driven by younger consumers, according to a new study. Most adults are more reluctant to bank over their cellphones.

In an online survey of 504 U.S. debit cardholders conducted in January, Auriemma Consulting found that 40% of respondents had a cell phone capable of performing mobile-banking tasks. Of those, (84%) used their smartphone to bank within the previous year (PaymentsSource March 2).

Younger consumers are more likely to download a mobile-banking app. The study indicated that 43% of respondents younger than 45 had downloaded a mobile app from their financial institution within the previous year, while only about 22% of those older than 45 had done so.

Most respondents expressed some discomfort in making purchases with their mobile phones. About 47% said they were very or somewhat uncomfortable, 34% were very or somewhat comfortable, and 19% were unsure.

Among respondents younger than 45, about 48% said they were comfortable making purchases with their mobile phone, compared with 21% of those older than 45 who said the same.

The top reason respondents cited for their discomfort making purchases with their mobile phone was uncertainty about the technology's security (58%). That was followed by identity theft concerns (55%), fear of losing the phone and sensitive data (52%), "not needing a new way to make payments" (43%), distrust of the mobile-payment systems (34%), concern that it "may cost money" (27%), the belief that it "would not save any time" (21%) and they "do not understand it" (15%).

Saving time (51%) was the most common reason respondents listed for making payments through mobile, followed by "like new technology" (44%), it "would be free" (41%), it would create an option for a physical wallet (36%), they "understand it" (33%), it would provide greater security (31%), and it would be a more convenient way to pay (27%).

As the banking industry and other players develop products for banking and shopping with smartphones, "mobile payments are inevitable," Auriemma said.

About 75% of respondents with mobile-banking capabilities used their smartphone to check their account balance, 36% paid a bill, 32% received a bank notification, 31% paid by phone and also made a deposit, and 3% transferred funds. Some 17% of respondents said they made no mobile payments.

Until mobile banking and payments offer tangible consumer benefits such as saving time and money and provide a more-secure method for conducting transactions, mainstream consumer adoption is unlikely to materialize, Auriemma concluded.

Gen Y and CUs discussed on Dallas TV

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DALLAS (3/7/12)--When Gen Yers are financially sound, they also are likely to be socially sound, said Jared Cahill, CEO of On Your Way of Dallas, a reward-based, Web program that helps credit unions attract, engage, educate and retain Generation Y (ages 18-32) members.

Kabani travels the world talking about social and technology trends. She is CEO of The Marketing Zen Group of Dallas and author of "The Zen of Social Media Marketing," an area in which many credit unions are eager to gain traction.

"Unfortunately, GenY also has become known as Gen Debt," Cahill told the TV host. "Step into a financial hole when you are young, and it's hard to get out."

Asked by Kabani to distinguish credit unions from banks, Cahill responded: "They have distinct advantages. Credit unions are a cooperative not-for-profit, so rates are better, and they're focused on customer service and relationships."

Kabani and Cahill agreed that too many young adults--"through no fault of their own"--are not learning in school, at home, or even in college, how to effectively handle their money in economically challenging times.

"Credit unions pride themselves on building respectful relationships with their members," Cahill said. "We want to help GenYs establish relationships with credit unions, which demonstrate as an industry their willingness to invest in their members' long-term well-being."

Young adults can be turned into financially literate borrowers, he told Kabani. "Credit unions can make better-qualified loans and lower delinquencies for this fiscally challenged demographic," Cahill added.