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Internet crime complaints up 33 CUs report scams

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WASHINGTON (4/1/09)--Complaints from victims of Internet crime rose 33% in the U.S. during 2008 from the year before, indicating that the economy's downturn is exacerbating electronic fraud, says the Internet Crime Complaint Center. And a number of credit unions in several states are warning about the latest rash on scams, some of them generated on the Internet. The Internet Crime Complaint Center tracks trends and refers cases to law enforcement agencies for investigation. It announced Monday it had processed a record 275,284 complaints last year, up from 207,000 in 2007 ( Associated Press via Google.com). The number of complaints filed each month grew as the year progressed and the economy deteriorated. October, November and December were three of the worst five months, the center said (Financial Times March 31). The total dollar loss reported from scams was $265 million, nearly $25 million more than the $239 million lost to Internet fraud in 2007. One-third of the complaints were over electronic correspondents failing to deliver promised goods or failing to pay for goods they received. Another 25% were fraud at auction sites such as Ebay and Craigslist. Men lost much more money to Web-based scammers than women. Among those who lost funds, men lost $1.69 for ever $1 women lost. The center said that differences in the kinds of shopping men and women do online and the different types of fraud they encounter, could be factors in the results. Paul Bresson, of the Federal Bureau of Investigation, said the study indicates that the economy is a factor. Unemployed people in hard times turn to crime while consumers who are pinching pennies are more gullible to too-good-to-be-true schemes. The past two weeks scam alerts and warnings have been sent to local media from credit unions in: Colorado Springs, Colo.; Jay, Maine; Dubuque, Iowa; Chicopee, Mass.; Pittsfield, Mass.; San Antonio, Texas; Beaumont, Texas; and Katy, Texas. They involved scams via automated telephone calls, text messages and e-mails. Many of the credit unions are educating their members and the public about what to do if they are approached with a possible fraudulent scheme.

Michigan Senates altered foreclosure bills good for CUs

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LANSING, Mich. (4/1/09)--A Michigan State Senate panel has presented three foreclosure prevention bills that removed a provision that allowed consumers or borrowers trying to rework their mortgage to take their case to court if a lender wasn’t cooperating with loan modification. The provision was controversial and its removal is a positive development for credit unions, according to the Michigan Credit Union League (MCUL) (Michigan Monitor March 30). The reworked versions of House Bills 4453, 4454 and 4455 addressed a concern of the Michigan financial services industry that governmental officials could be left to decide whether a lender has cooperated with loan modification, the league said. “The Senate panel’s decision came down to a party-line, 4-3 vote,” MCUL Executive Vice President Patrick La Pine told the Monitor. “Democrats were strongly opposed to stripping the provision that would allow borrowers to take foreclosure proceedings to court if a lender would not modify the mortgage. “Ultimately, it's good for credit unions and other responsible lenders that this was removed from the language, but hopefully the legislation will continue to move forward so its other provisions can assist Michigan homeowners as soon as possible,” he added. State Sen. Randy Richardville (R-Monroe), who chairs the Senate Banking and Financial Services Committee, described the bills as a “compromise” and said that although the bills remained a “work in progress,” he expects the Senate to act quickly on the package. MCUL said it will continue to update credit unions as the foreclosure package moves through the state legislature.

Wisconsin CUs urging tax filers to use quick options

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PEWAUKEE, Wis. (4/1/09)--Wisconsin credit unions are encouraging tax filers to use direct deposit when receiving their tax returns. When paired with state and federal electronic filing options, this method can deliver tax refunds within days. Consumers can open a basic savings account at a credit union for as little as a $5 deposit. “Although we’re approaching the end of tax season, Wisconsin consumers still have free options available that can save time and money--especially if you’re filing a simple tax return,” said Brett Thompson, president/CEO of the Wisconsin Credit Union League. “Even for those who get assistance from a tax preparer, there’s no need to pay additional fees to get a refund quickly.” Wisconsin credit unions have assisted at volunteer return preparation sites throughout the state this tax season, operated in partnership with the Internal Revenue Service, the state Department of Revenue and AARP. The sites offer free tax preparation, tax education and asset-building strategies, and help filers claim their full refund by using direct deposit. Many filers think the only way to get their refund quickly is through paid preparation firms that charge excessive fees, said the league. Thompson said short-term, high-interest loans like refund anticipation loans (RALs) are heavily marketed during tax time and can drain hundreds of dollars from a typical refund. These loans cost Wisconsin tax filers $21.8 million in 2006--the most recent year for data--in exchange for the promise of a fast refund. Data show that RAL usage increases considerably among Wisconsin taxpayers eligible for the Earned Income Tax Credit (EITC)--a credit for low to moderate-income filers. Nearly 18% of EITC filers use RALs to receive their refunds, compared with 3.4% of all Wisconsin tax filers. EITC-qualifying tax filers who use RALs lost $13.7 million in 2006.

Enterprise Car Sales donates to REAL Solutions

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ST. LOUIS (4/1/09)--Enterprise Car Sales has earmarked a portion of its $50,050 donation to the National Credit Union Foundation (NCUF) for the REAL Solutions program.
From left, Enterprise Car Sales Assistant Vice President Mark McAndrews and National Marketing Manager Brooke Gilchrist present a check for $50,050 to National Credit Union Foundation Chairman Allan Kemp McMorris. (Photo provided by National Credit Union Foundation)
REAL Solutions, which stands for “Relevant, Effective, Asset-building, Loyalty-producing” Solutions, works through 31 state credit union leagues to help credit unions offer services for people of modest means and “low wealth.” “By dedicating a portion of its donation to REAL Solutions, Enterprise Car Sales’ creative promotion helps credit unions provide affordable products that have proven attractive in serving America’s working families,” NCUF Executive Director Steve Delfin said. The donation resulted from transactions made during Enterprise Car Sales’ annual Credit Union Appreciation Month last September and from additional funds given by the Enterprise Rent-A-Car Foundation. Enterprise announced the donation at NCUF’s Major Donors’ Reception during the Credit Union National Association’s 2009 Governmental Affairs Conference. With the most recent donation, Enterprise has donated roughly $175,000 to NCUF the past four years. Enterprise specializes in working with credit unions of all sizes to increase auto loan volume.

N.J. ad campaign taking shape for April

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HIGHTSTOWN, N.J. (4/1/09)--The New Jersey Credit Unions' Statewide Advertising campaign will move forward this month with television, radio and print advertising, says the New Jersey Credit Union League. This month, the league will film its first television commercial to air on News 12 NJ, which covers 1.8 million households in the state. Broadcast dates will be announced later. The campaign is sponsoring "It's Your Money," a program that airs on the weekends, and also will air 30-second commercials during normal programming (The Weekly Exchange March 23). The league is also working on a deal to get coverage in areas that News 12 NJ misses and will provide an On-Demand two-minute video about credit unions to cable households. Also this month, the campaign will sponsor a radio contest on 101.5 FM. The contest will award $50,750 to a listener. The money will be deposited in a credit union that the winner is eligible to join. Commercials promoting the contest and credit unions' sponsorship will air throughout the month. Also, ads will appear once a week in Atlantic City's newspaper and once a month on its website.

Serving the Underserved conference speakers announced

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NEW YORK (4/1/09)--The National Federation of Community Development Credit Unions confirmed the keynote presenters for its upcoming 35th Annual Conference on Serving the Underserved, which will be held June 11-13 in Phoenix. Confirmed keynote speakers include:
* Donna J. Gambrell, director of the U.S. Treasury Department's Community Development Financial Institutions (CDFI) Fund; * Errol T. Louis, columnist for the New York Daily News, television commentator, and former community development credit union (CDCU) organizer; and * Ellen Seidman, senior policy advisor at ShoreBank, a community development bank.
With as much as $400 million available the next 18 months, the CDFI Fund is poised for the greatest expansion in its history, and Gambrell has played a leading role in the fund’s high profile within the Obama Administration, the federation said. Having served as deputy director of consumer protection and community affairs in the Division of Supervision and Consumer Protection at the Federal Deposit Insurance Corporation (FDIC), Gambrell has led initiatives related to reaching underserved populations; provided guidance to consumers on issues such as subprime and predatory lending; and increased the public's understanding of and confidence in the financial system. A former CDCU organizer and federation program officer, Louis is knowledgeable about issues affecting low-income people and communities. As a regular guest on “Lou Dobbs” and other CNN programs, Louis gave political analyses to national television audiences throughout the recent presidential campaign. Louis is a twice-weekly columnist for the New York Daily News, and hosts the “Morning Show” on radio station AM 1600 WWRL, a weekday political talk show. Seidman also is chairman of the board of directors of the Center for Financial Services Innovation, which helps financial services providers serve underserved consumers. The federation’s conference will offer breakout sessions, networking opportunities, and a site visit to a local CDCU, the $61 million-in-assets, First American CU in Casa Grande, Ariz. For more information, use the link.

CU System briefs (03/31/2009)

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* HARRISBURG, Pa. (4/1/09)--The Pennsylvania Credit Union Foundation approved a $9,500 grant to the National Credit Union Foundation (NCUF) for NCUF's REAL Solutions program during its board meeting Friday. The grant will fund services by REAL Solutions Field Coach Vicki Joyal, in providing expertise and support for the program in Pennsylvania. The Pennsylvania Credit Union Association will fund the remainder of the program, including funding for John Kebles, program manager. The grant is effective through June 1, 2010 (Life is a Highway March 31) … * ALBANY, N.Y. (4/1/09)--A team of students from Saranac Lake (N.Y.) High School captured the 2009 New York State
Click to view larger image Click for larger view
LifeSmarts title by defeating 11 teams from around the state at the finals competition last week in Albany. The event is coordinated in the state by the New York Credit Union Foundation. The school's team won the championship by successfully fielding questions about real-life marketplace issues, such as personal finance, health and safety, the environment, technology, and consumer rights and responsibilities. From left are Assistant Coach Jemell Ellis-Branch, Alex Beideck, Alexandra Cummings, Mackenzie Davison, Sen. Betty Little (R-Adirondack), Brian Wolff, Team Captain Hillary Pond and Coach Tricia Preston. (Photo provided by the New York Credit Union Foundation) … * YOUNGSTOWN, Ohio (4/1/09)--Associated School Employees CU (ASECU) announced Tuesday it has merged with Cavalier FCU, effective today. Members voted to approve the merger of the Youngstown, Ohio-based credit unions earlier this month. ASECU serves anyone living, working or attending school in three counties--Mahoning, Trumbull or Columbiana--in Northeast Ohio. It has more than $70 million in assets and more than 8,500 members. Cavalier, with about $20 million in assets, served employees of the GM Lordstown Complex and the communities of Lordstown and Newton Falls. ASECU will retain all of Cavalier's employees and its two Trumbull County branches. Cavalier members' accounts will become ASECU accounts. Robyn Darocha, Cavalier CEO, will continue as chief operations officer at ASECU, and ASECU President/CEO Michael Kurish will remain as CEO of the combined credit union … * HEATH, Ohio (4/1/09)--Hopewell FCU went a little further than the typical pig-kissing contests in raising funds for Operation Feed and the Food Pantry Network of Licking County. The $64.1 million asset, Heath-based credit union's fundraiser involved a smooch with a camel. Employees voted--by donating to Operation Feed--for which of their bosses had the honor. Executive Vice President and Chief Operations Officer Jim Johnson was selected and held an animal cracker in his mouth to entice the camel. Johnson told local media the kiss was "great" and that he'd do it again. The camel was provided by a nearby ranch. This year's fund-raising goal for 115 participating organizations is 2.4 million food item points (The Advocate March 27) …

Central States Mortgage files for receivership

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MILWAUKEE, Wis. (3/31/09)--Central States Mortgage Co., which provided mortgage services to more than 250 credit unions, has filed for receivership and plans to liquidate its assets. The Wauwatosa, Wis.-based company, which closed its doors March 9, filed its liquidation receivership petition in Milwaukee County Circuit Court late Friday (The Business Journal of Milwaukee and Milwaukee Journal Sentinel March 28). The filing is similar to a federal bankruptcy, with the company liquidating its assets with oversight from a court-appointed receiver. Central States is asking that Philip Ostroski, managing director of MorrisAnderson & Associates, be appointed receiver. The filing did not summarize Central States' assets and liabilities. Dean Wilson, chairman of Central States' board of directors and CEO of Focus CU, Menomonee Falls, Wis., said the company was taking the action to protect customers creditors and former employees by providing an orderly transition of business. The filing will help ensure that everyone involved is protected and treated as fairly as possible in the process, Wilson said. The company is working with AmeriCU Mortgage Co., based in Troy, Mich., to close and fund mortgage loans that had stalled when Central States closed its operations. (SEE RELATED: "New mortgage co. opens in Central States offices" in News Now's System section.) Central States wrote more than $500 million in loans last year. When it closed, about 220 people in five states lost their jobs. Wisconsin's Department of Workforce Development says that Central States' closure notification was dated the same day it shut down its Wauwatosa office and it is conducting an investigation. The agency said it filed a $3 million wage lien against the company to cover possible violations of the law (TMJ-4 Milwaukee March 30). The mortgage servicer was largely owned by credit unions. It recently sued its former CEO and founder, Richard Jungen, and several former executives, alleging that the group ran a business that caused $15 million in losses for the company.

New mortgage co. opens in Central States offices

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MILWAUKEE, Wis. (3/31/09)--AmeriCU Mortgage, a Troy, Michigan-based provider of mortgage services to credit unions, has opened an operations center in Wauwatosa, Wis.--in the offices formerly held by the now-defunct Central States Mortgage Co. AmeriCU said Sunday that it had received approval from the state Department of Financial Institutions on March 18 and immediately began operations. Within 72 hours, it had hired 45 staffers and worked with local credit unions to close 15 loans for homeowners who were in danger of losing funding. "AmeriCU hit the ground running as fast as it possibly could," said Dean Wilson, president/CEO of Focus CU, Menomonee Falls, Wis. "They were able to support many families that had closed on their mortgages but were still in the rescission period, by processing and financing these loans. "Their willingness to step in and work with data that came from applications that had been processed by another company as well as computer systems that were not their own helped many families realize their dreams of home ownership," Wilson added. According to AmeriCU CEO Don Calcaterra Jr., "We believe the most effective lending is done locally, through people in the community who understand the unique needs of its residents. We find those people by working with credit unions." The center is currently staffed by 13 employees. AmeriCU also hired 27 mortgage professions throughout Wisconsin and is looking for additional staff for its operations center. AmeriCU Mortgage is a division of Towne Mortgage Co., a privately held mortgage banking company providing residential and commercial real estate financing in a number of states. It provides mortgage origination and servicing support, membership and income growth strategies, mortgage loan asset valuations and sales, and default management services. See the related story, "Central States Mortgage files for receivership."

Azerbaijan Uzbekistan now WOCCU members

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MADISON, Wis. (3/31/09)--The credit union associations of Azerbaijan and Uzbekistan have joined the World Council of Credit Unions (WOCCU). WOCCU’s board of directors approved applications from the two countries’ national organizations earlier this month. “The entrance into membership of two more former Soviet satellite [countries’ movements or associations] that began as WOCCU development programs speaks to the strength credit unions can bring to developing nations,” said Pete Crear, WOCCU president/CEO. The Azerbaijan Credit Union Association (AKIA) represents 56 of the 70 credit unions serving the country. AKIA’s member institutions serve 90% of the country’s estimated 9,800 credit union members. The association is the first to receive WOCCU’s new affiliate member designation, designed to admit credit union associations without the financial resources to support direct memberships. “On behalf of all Azerbaijan credit unions, we will do all the work necessary to promote the development of credit unions in our country,” said Elchin Bagirov, AKIA's chairman. “We plan to start our work immediately.” WOCCU's board also accepted the Credit Union Association (CUA) of Uzbekistan as a direct member of the organization. CUA was formed by 11 credit unions in 2005 as the first phase of WOCCU's development program in the Central Asian nation ended. WOCCU began working in Uzbekistan in 1998, laying the foundation for a national credit union movement. In 2002, Uzbekistan’s first credit union law was passed with the assistance of WOCCU and guidance from its Model Law for Credit Unions publication. The first three credit unions formed that same year. Today, Uzbekistan has 78 credit unions that serve more than 99,000 members. The institutions hold $80 million in assets and 4.6% of domestic retail savings accounts. “We are honored to be part of the WOCCU community,” said Nizomiddin Muradov, CUA executive director. “We will put all our efforts forth to add value to the development of credit unions and their members worldwide.” As new WOCCU members, AKIA and CUA join Ghana Co-operative Credit Union Association and Seychelles CU, which were admitted as members effective Jan 1. On that same date, Abacus Australian Mutuals became Australia’s member to the global trade association, assuming the role formerly occupied by Cuscal Ltd. Representatives from the new member associations will be introduced and given the opportunity to speak to delegates at WOCCU's next Annual General Meeting at the World Credit Union Conference, July 26-29, in Barcelona, Spain. For more information, use the link.

Pennsylvania CUs 4Q loan growth strong

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HARRISBURG, Pa. (3/31/09)--Loan growth for Pennsylvania credit unions continues to be strong, according to the just-released Pennsylvania Profile Fourth Quarter 2008, despite the U.S. economy, which contracted at a 6.2% annual rate during the fourth quarter of 2008. Overall credit union loan growth totaled 8.1%, with business loans increasing by 35.7%, first mortgages by 17.9%, and used-car loans by 8.7%. The only loan category seeing negative loan growth was new-car loans, falling 4.9% due to lower consumer demand in the marketplace (Life in a Highway March 30). “While others in the marketplace have restricted their extensions of credit, credit unions continue to accept deposits and make loans to members,” said Jim McCormack, president/CEO of the Pennsylvania Credit Union Association. “Many of Pennsylvania’s credit unions were born out of the Great Depression when average consumers found it difficult to get credit,” McCormack added. “So it’s not surprising that as we are in the deepest recession since the 1930s, credit unions are still a strong source of consumer and small business credit in communities throughout Pennsylvania.” Pennsylvania credit unions also experienced increased deposit numbers and growth in membership during the quarter. Against a difficult economic backdrop, Pennsylvania credit unions reported a 31 basis point return on assets (ROA), down from 77 basis points in the third quarter. For the full year, Pennsylvania credit unions reported 65 basis points in ROA--above the national average of 31 basis points.

Bystander shot during robbery getaway

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LENEXA, Kan. (3/31/09)--A man who may have witnessed a robbery at Credit Union of Johnson County's branch in Lenexa, Kan., was shot several times about two blocks from the credit union as the robber fled the scene Saturday morning. The victim was rushed to the hospital. His condition is unknown, said several local news sources. The credit union was robbed just after 9 a.m. Saturday, when a lone man entered the branch, vaulted the counter and displayed a silver pistol, said a spokeswoman with the Federal Bureau of Investigation (Kansas City Star March 28). He left the credit union driving a light-colored sport utility vehicle with Colorado license plates. About two blocks from the credit union, the robber shot the victim several times. It was unclear whether the victim was a member of the credit union or if he had followed the robbery suspect. Conflicting reports had the victim's age in the sixties or as 71 (WDAF via fox4kc.com and WIBW TV March 28).

N.D. CU moves to escape flood NCUA activates help

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FARGO, N.D. (3/31/09)--Fargo (N.D.) VA FCU will move into another Fargo credit union on Wednesday to escape flood waters from the Red River. Fargo VA will move into Freedom Community CU for three days--Wednesday, Thursday and Friday--Jana Thune, Fargo VA CEO, told News Now. On Thursday night and early Friday morning, the credit union moved some of it records from the basement of the VA Hospital where it is located, up to the second floor to avoid any potential flood waters, she said. The credit union was closed Friday, Monday and today to comply with the city’s request that all non-essential businesses be closed for three days. “We will likely open Wednesday and be there through Friday,” Thune said. “We’re open 10 a.m. to 2 p.m., Wednesday and Thursday, a full day on Friday--which is a big VA processing day. We’ll just sign on and work out of Freedom Community’s facility. It uses the same data processing facility that we use.” Although no flood waters have affected the VA Hospital--which sits right next to the Red River--as of Monday afternoon, the potential threat of flooding caused the credit union to relocate its operations, Thune said. None of the other 15 Fargo credit unions had plans to relocate as of Friday, according to Tony Richards, CEO of Mid-America Credit Union Association. Many places in the state, including the association, were closed Monday due to a heavy snowstorm. After reaching a historic high level of 40.82 feet over the weekend, the river dropped below 40 feet Sunday and could drop to 38 feet by the end of the week, meteorologists said (USA Today March 30). The National Credit Union Administration (NCUA) has activated its disaster relief policy to assist credit unions and their members affected by the severe weather and flooding in North Dakota and Minnesota. President Barack Obama has declared an emergency exists in the two states and has ordered federal aid to supplement state and local response efforts. Under its disaster assistance policy, NCUA will, where necessary:
* Encourage credit unions to make loans with special terms and reduced documentation to affected members; * Reschedule routine examinations of affected credit unions if necessary; * Guarantee lines of credit for credit unions through the National Credit Union Share Insurance Fund; and * Make loans to meet the liquidity needs of member credit unions through the Central Liquidity Facility.
NCUA works with individual state league organizations and state regulators to ensure all federally insured credit unions are aware of NCUA’s available assistance. NCUA Region IV examiners are in close contact with affected credit unions to offer advice and assistance. During disaster conditions, NCUA personnel operate under three priorities:
* Determine the safety of credit union staff and operational condition of credit unions; * Provide needed material and technical assistance to affected credit unions; and * Return credit unions to normal operations as quickly as possible.

N.J. group endorses municipal deposits bill

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TRENTON, N.J. (3/31/09)--The New Jersey State League of Municipalities voted to endorse a proposed municipal deposits bill amendment last week and include it among its legislative priorities. The measure would allow New Jersey credit unions to accept municipal deposits. It would allow credit unions in the state to become eligible depositories for public entities such as county and municipal governments and school boards (News Now Nov. 20). Representing the state’s 566 municipalities, the League of Municipalities is highly regarded by the legislative and executive branches of state government, said the New Jersey Credit Union League. The endorsement lends weight to the legislation’s credibility and is considered almost crucial to favorable action on legislative matters relating to local governments, the league added (The Weekly Exchange March 23). In addition, three legislators have indicated their intent to sign on as prime cosponsors of the bills in their respective houses: State Sen. Robert Singer (R-30), State Rep. John Wisniewski (D-19) and Assembly Deputy Speaker Uprenda Chivukula (D-17). Singer is on the Senate Commerce Committee where the bill will be considered before being reported for a vote by the full Senate. He is also a Republican, which gives the legislation bipartisan sponsorship in the upper house, the league said. Wisniewski is a member of the Assembly Financial Institutions and Insurance Committee where the bill will be considered before being reported for a floor vote. With Assembly Deputy Speaker Chivukula’s co-sponsorship, the measure has leadership support in both houses of the legislature.

CU System briefs (03/30/2009)

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* ST. LOUIS (3/31/09)--The Missouri Credit Union Association (MCUA) has canceled its 2009 Managing in the Middle Conference, which was to be held at Lake of the Ozarks April 21-23. MCUA made the announcement in its newsletter, The Missouri Difference March 27) … * RALEIGH, N.C. (3/31/09)--More than 25 North Carolina credit union professionals from the Tarheel, Northeast and Southeast chapters trekked to Raleigh last week to discuss issues facing credit unions with their state legislators. They visited 41 legislative offices and discussed the health of credit unions, safety and soundness of members' accounts, and steps credit unions are taking to secure members in their homes. The North Carolina Credit Union League said this message was well-received by all legislators and was a bright spot considering the economy. State Senate Majority Leader Tony Rand, third from left, heard the positive message from credit unions during one visit. (Photo provided by the North Carolina Credit Union League) … * HARRISBURG, Pa. (3/31/09)--Maria LaVelle, CEO of Westmoreland Community FCU, Greensburg, Pa., has been elected as board director for District 4 for the Pennsylvania Credit Union Association (PCUA), announced PCUA Board Chair Diana Roberts (Life is a Highway March 30). LaVelle has been CEO of the credit union since 2001. She serves on the Pennsylvania Credit Union Foundation board and is vice president of the Greensburg Chapter of Credit Unions. She began her credit union career in 1996 at Allegent Community FCU. LaVelle succeeds retiring director Lanny Horn. Her term will begin in May at the conclusion of PCUA's Annual Convention … * RALEIGH, N.C. (3/31/09)--State Employees' CU (SECU) has received the Employer Support of the Guard and Reserve's (ESGR) State Chairman's Above and Beyond Award. The award is presented to employers who exceed legal requirements in providing support to service members in the Guard and Reserve. The credit union was nominated by lst Lt. Benjamin Liebermann, an SECU employee currently deployed with the National Guard. From left are: Mark Twisdale, SECU senior vice president of human resources; Kelly Liebermann, wife of Lt. Leibermann; Lori Waters, SECU Network Operations manager; and Jamie Applequist, SECU senior vice president in Jacksonville and master sergeant in the Air Force Reserves. (Photo provided by State Employees' CU)… * DES MOINES, Iowa (3/31/09)--Michael Rowan Knutson, 42, of Mason City, Iowa, a suspect in a July 14, 2007, robbery of the Mercy-City-Lehigh Family CU in Mason City, was sentenced to two consecutive life imprisonment terms for armed robbery at another financial institution. The robbery for which Knutson was convicted occurred May 16, 2007, at First Bank, West Des Moines. He and another suspect, James Stenger, who was convicted in a separate trial, brandished weapons in a takeover style robbery at the bank. Evidence at the trial included evidence from other robberies, including the credit union heist. The sentencing was mandatory under the federal "three strikes" law because Knutson had at least two prior crimes of violence (US Fed News March 28) … * HARRISBURG, Pa. (3/31/09)--Madeline Judge, widow of former Pennsylvania Credit Union Association (PCUA) President/CEO Mike Judge, died Saturday at the age of 80. She was well-known throughout Pennsylvania and the nation because she often accompanied her husband to credit union events, said PCUA. Services will be Wednesday at 10 a.m. at St. Margaret Mary Alacoque Church, Harrisburg (Life is a Highway March 30) …

NCUF distributes Filene tax report to REAL Solutions CUs

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WASHINGTON (3/30/09)--As a resource for credit unions providing free tax services as part of the REAL Solutions program, the National Credit Union Foundation (NCUF) is distributing a new report that suggests credit unions can raise revenue by providing tax services in different venues. The Economics of Serving Low-Income Employees at Tax Time: Implications for Credit Unions was published this month by the Filene Research Institute and partially funded by NCUF (News Now, March 26). Rather than tweaking existing Volunteer Income Tax Assistance (VITA) programs, the report suggests opportunities for credit unions to provide fee-based tax assistance to:
* Credit union employees; * Members and non-members--especially those residing in densely populated, low-income or underserved areas, and; * Large companies’ employees--especially select employee groups of credit unions.
The report suggests that credit unions could partner with tax preparers, non-profits, and corporations to provide fee-based tax assistance in the workplace--an often overlooked delivery channel. In the report’s case study, a large company--Staples--saved $480 for each employee who received tax assistance--at a cost of $75. It also proved to be an investment in loyalty. Employees who received tax assistance in the workplace were 32% more likely to remain with their employer a year later. “Fee-based workplace tax assistance could be a new way for credit unions to expand services, build net income, attract new loyal members, and strengthen relationships with companies in their communities,” said NCUF Executive Director Steve Delfin. “For all of these reasons, we plan to incorporate findings from this report into the REAL Solutions program moving forward.”

Minnesota CU Network helps stem state foreclosures

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SAINT PAUL, Minn. (3/30/09)--As foreclosures and their consequences continue to spread across the state and the nation, the Minnesota Credit Union Network (MnCUN) has teamed up with the Minnesota Home Ownership Center to provide credit unions access to a certified network of foreclosure counselors to help struggling members. Through this network, counseling agencies are available in every county in the state. While Minnesota credit unions have been proactively working to assist members who encounter hard times, this relationship with the center gives credit unions another tool to have at their disposal. Credit unions can refer members who are facing the threat of foreclosure to a Home Ownership Center-certified counselor, all of whom provide free services. “Preventing foreclosures through counseling is a small fraction of the cost compared with the overall cost to families, neighborhoods and communities,” said Ed Nelson from the center. “This program helps all Minnesotans. Every time a foreclosure is prevented, everybody wins--and even if the foreclosure can’t be avoided, Minnesota families will be in a better position going forward for having worked with one of our counselors.” The number of Minnesota homes lost to foreclosure in 2008 was 26,265, a 29% increase over 2007, according to a report published by the center, The Family Housing Fund and The Greater Minnesota Housing Fund. Through its network of local providers, the center assisted an estimated 20,000 people with pre-purchase, refinance and foreclosure prevention counseling last year. Of those families facing foreclosure, the center has an effectiveness rate higher than 50%. The Minnesota Home Ownership Center is the state’s leading independent, non-profit provider of information and resources aimed at helping Minnesotans obtain and maintain home ownership. With services available to all in need, the center places an emphasis on supporting low- and moderate-income Minnesotans and those who face barriers to home ownership by actively engaging in education, partnerships and outreach. Counseling support is available in English, Hmong and Spanish. The center also will fund interpretation services in another language, if necessary, through the counseling network. “Since credit unions are not-for-profit and have a true concern for their members’ financial well being, this relationship with the Home Ownership Center can enhance credit unions’ existing efforts and can be a win-win for all parties involved,” said Mark D. Cummins, MnCUN president/CEO. “Oftentimes consumers at risk of foreclosure are scared or embarrassed of their situation. By publicizing this counseling network to their members, credit unions can position themselves--yet again--as a go-to resource for their members.” Also, the center will host free training workshops specially designed for organizations that have regular contact with at-risk homeowners, including credit unions. Marketing materials are also available for credit unions to promote the counseling network to their members.

CU weighs in on overdraft fees in IWSJI

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NEW YORK (3/30/09)--An Oregon credit union administrator weighed in on the issue of overdraft fees in a Thursday article in The Wall Street Journal concerning the Federal Reserve’s decision about whether to reign in the fees. The Fed’s 60-day public comment period on the matter ends March 30. The Fed is contemplating several different approaches to the issue, ranging from not changing any current practices to requiring financial institutions to give notification to consumers on every purchase that would cause an overdraft, the newspaper said. However, many financial institutions said the latter option is not realistic “People think when they're making a purchase it’s like a direct line into their account but it's not; it's a third-party processor making the transaction,” Judy Rigwood, compliance director at TLC FCU, a $90 million asset, Tillamook, Ore.-based credit union, told the paper. “We don't have the technology to do that. “Frankly, we offer overdraft service as a way to help our members,” she added. “Some people rely on it almost like they would a payday loan. It allows them to make vital purchases.”

Need a loan Texas newspaper suggests CUs

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SAN ANTONIO, Texas (3/30/09)--Scott Metzger, who owns a brewing company in San Antonio, Texas, turned to his local credit union for help when his bank loan fell through. Security Service FCU, San Antonio, provided Metzger with a $550,000 small business loan and a $200,000 bridge loan (Express-News March 27). Nick Naik, a hotel developer in the San Antonio area, also turned to the $5-billion-asset Security Service to refinance a $9 million loan for his hotel. His credit union experience was “excellent,” simple and straightforward. Both businessmen were interviewed by the Express-News for an article titled, “Need a Loan? Try a Credit Union,” which noted that credit unions continue to lend money despite tough economic times. Randolph-Brooks FCU, Universal City, Texas, also told the newspaper it provided funds for 215 real estate transactions in February. Credit unions can make loans because they didn’t use the lending formulas that many banks used--which left them with toxic assets, said Robert Zearfoss, Randolph-Brooks senior vice president of mortgage lending. Randolph-Brooks has $3.1 billion in assets. Credit unions are “flush with cash,” Texas Credit Union League CEO Dick Ensweiler told the Express-News. Credit unions are safe lenders and do not make risky loans, he added.

AVCU launches CU awareness campaign

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SOUTH BURLINGTON, Vt. (3/30/09)--The Association of Vermont Credit Unions (AVCU) will launch a credit union awareness campaign April 6 that is modeled after the Pennsylvania Credit Union Association’s iBelong campaign. The campaign will use television ads to explain what credit unions are and how Vermont residents can find a credit union to join. The ads will air for eight weeks during morning network news shows, late afternoon talk shows, prime time shows and on cable networks (Newsline Express March 27). The call-to-action of the campaign will be the iBelong website, where users can use a Google Maps locator to find a credit union. The iBelong website will go live this week and features a page about Vermont credit unions with links, and a “My Story” section where members can write about what their credit union means to them. The ads also will run in the fall in conjunction with Co-op Month and International Credit Union Day. Vermont is the third state, along with Illinois and Mississippi, to secure licensing for iBelong, AVCU said. For more information, use the link.

Schenk Tax increases affect few small businesses

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MADISON, Wis. (3/30/09)--Tax increases will affect only a small portion of small business owners, Mike Schenk, senior economist for the Credit Union National Association, told Business Week Thursday. Debate among small business owners has raged since President Barack Obama announced a plan to cut back federal income taxes on those with incomes under $250,000, Business Week said. Proponents claim less than 3% of small business owners have incomes above $250,000, while opponents counter that 15% or more of small business owners will be negatively affected by the proposal. While the tax increases will have a substantial negative impact, they will only affect a small number of business owners, Schenk told the publication. “I would ultimately conclude as an economist, that on balance there are some real positives to come out of [the budget proposal],” Schenk said. “The negatives will be apparent to a small sliver of the universe.”

Citadel expands into Greater Philadelphia

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THORNDALE, Pa. (3/27/09)--Citadel FCU is "extremely pleased" that the National Credit Union Administration (NCUA) last week approved the expansion of the Thorndale, Pa.-based credit union's charter into the five-county Greater Philadelphia region. "It has been a long process of continuous dialogue with the NCUA to assure that Citadel has met the very high standards expected for a charter expansion," said Citadel President/CEO Jeff March. Previously, the $1 billion asset Citadel served Chester County. Now it will serve Philadelphia, Montgomery, Delaware, Bucks and Chester counties. "In the past, we have had to turn away countless people from all corners of the Greater Philadelphia region who were unable to meet Citadel's eligibility requirements," said March. At a time when other financial institutions are struggling, Citadel continued to prosper with rates, products and services and member service, he said, adding, "Today, we are eager and excited to open our doors to those people who are no eligible and are searching for a trusted, locally owned financial institution." Citadel is evaluating opening additional offices that are more accessible to the expanded range of members. Meanwhile, members can use online banking, bank by phone and shared branches.

IE-Commerce JournalI explains the CU difference

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BOSTON (3/27/09)--Credit unions have become excellent alternative to banks, says the E-Commerce Journal in an article entitled, "Credit unions vs. banks. Your choice!" The March 26 article says that credit unions offer similar products and services as banks, offer better terms and conditions for loans, and have several fundamental differences. It urges readers to learn more about them to make a more educated choice. The article then outlines the differences in structure, membership and membership eligibility, and how the structure benefits members with lower fees and better rates. It also explains credit unions have their own federal deposit insurance that is "as safe as deposits in FDIC insured banks." And it makes the points that credit unions' conservative lending policies have helped them avoid much of the subprime and credit crises. For the entire article, use the resource link.

NCBA board member objects to Coastway conversion plan

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PROVIDENCE, R.I. (3/27/09)--A letter to the editor of the Providence Journal (March 25) objects to Coastway CU's plans to convert to a mutual savings bank. The letter writer, Erbin Crowell of Glocester, R.I., is a member of the Cranston, R.I.-based credit union and a member of the board of the National Cooperative Business Association. Coastway's members will vote on April 29 on whether to change charters (News Now March 13). "With our financial system in disarray, I was surprised to learn that my credit union, Coastway CU, has proposed converting from a member-owned nonprofit into a bank," Crowell wrote. "After all, credit unions have been a bright spot in these difficult times, providing loans in a responsible manner and avoiding the kinds of risky, greed-driven lending that fed the crisis," he added. He noted "serious questions" about the conversion attempt regarding motivation of the credit union's leadership, whether it would raise rates and fees after losing its credit union tax-exempt status and what will happen to the $25 million owned by members. "These are the sorts of concerns that have led national organizations such as the Consumer Federation of America and the NCBA to oppose proposed credit union conversions such as Coastway's," he added. He doubted that becoming a bank would better serve members. "First, credit unions that have converted to banks now charge higher rates on loans and offer lower-paying deposits," he said, citing BankRateData. Second, members' ownership of the $25 million of member-equity "is at risk" if the credit union becomes a bank, he wrote, adding that Coastway's leadership tries to assure members it has no plans to sell stock while converting, but the credit union's literature "leaves plenty of wiggle room." He noted 75% of credit unions that have converted have eventually sold stock and questioned why the credit union is using Georgeson, Inc., which specializes in "strategic shareholder consulting" if it doesn't intend to become stock-owned. He urged members to reject the conversion in their vote and urged legislators to reform the U.S. conversion law. For his complete letter, use the resource link.

UW CU introduces Rapid Refinance for home loans

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MADISON, Wis. (3/27/09)--UW CU is introducing Rapid Refinance, a program for members looking to refinance their home loans without paying traditional closing costs. Rapid Refinance will allow members who are planning on paying off their loans within 15 years to lock into a low, fixed rate for $79, saving them hundreds of dollars of closing costs over traditional home loans. A new, streamlined loan process will speed up the closing process and reduce the documentation required to get the loan closed, the credit union said. “These members will now be able to refinance their homes when it otherwise may not have made sense financially due to high closing costs,” said Mike Long, UW CU vice president of lending. Rapid Refinance is available for loans up to $125,000 and will offer a 12-year term with a low, fixed rate and no prepayment penalties. An online calculator also is available so members can compare their Rapid Refinance payments to traditional home loan payments. UW CU, based in Madison, Wis., has $1.08 billion assets.

G-20 gets WOCCU input on financial co-ops

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MADISON, Wis. (3/27/09)--Members of the Group of 20 (G-20) nations attending The London Summit 2009 April will know that credit unions and financial cooperatives worldwide have contributed to the solution for, not the cause of, the struggling global economy. The World Council of Credit Unions (WOCUU) alerted attendees to the role credit unions play in their countries in serving members and contributing to economic stability. WOCCU originally submitted a letter last fall to G-20 countries attending the Nov. 15 summit in Washington, D.C. The letter, addressed to participating finance ministers, asked the group to acknowledge the strength and safety of credit unions and financial cooperatives, and to not make cooperatives part of inappropriate legislation or regulations that may restrict the practices that give member-owned institutions their capability to serve. After its November meeting, the G-20 established four working groups. One focuses on supervision, enhancing sound regulation, and increasing and strengthening transparency. WOCCU wrote to committee co-chairs Rakesh Mohan, deputy governor of the Reserve Bank of India, and Tiff Macklem, associate deputy minister of the Canadian Ministry of Finance, outlining the role of credit unions and their supervisory structures. “We also have been in communication with the World Bank representative who sits on the committee,“ said Dave Grace, WOCCU vice president of association services. "He assured us that credit unions are not within the scope of the regulatory review." The other three working groups are not expected to consider issues involving credit unions and financial cooperatives, Grace added. Before the November meeting, WOCCU President/CEO Pete Crear wrote a letter requesting the group take three steps during the fall summit:
* That any future financial rescue packages implemented at global or national levels be unbiased against cooperative financial institutions relative to the commercial banking sector; * That in any pronouncements emanating from the summit, cooperative financial institutions be recognized as secure, locally owned financial institutions that have presented safe and sound financial alternatives during the current crisis; and * That future regulations or legislation that may result from this crisis clearly recognize that cooperative financial institutions have not been the source of these problems, have been significantly less affected by the economic fallout and should not be punished by inclusion in a series of new rules designed to correct a problem they have not caused.
"We believe strongly that cooperative financial institutions must be consulted prior to any regulatory actions that may affect them," wrote Crear, "and we urge you to make this step a permanent part of your protocols." WOCCU's current efforts support the initiatives outlined in Crear's letter. Based on discussions with committee members, WOCCU expects the London Summit to produce a principle-based approach to regulatory reform that includes several outcomes:
* All systemically important financial entities will require supervision; * The perimeter of regulation will expand to include hedge funds and private equity funds; * Regulator "colleges" will coordinate cross-border supervision for systemically important financial entities; and * There will be reductions in pro-cyclicality of capital ratios that require institutions to build stronger capital bases in periods of strength.
"Throughout all our efforts we stressed our support for independent credit union regulators who are knowledgeable about financial cooperative activities and the credit union difference," Grace said. "As seen from past financial crises at national levels, during this global crisis credit unions have performed better than many other financial institutions. We are unaware of any credit union in any market that has received capital infusions from government as a result of the current crisis," Grace added. Established after the emerging markets financial crisis of the late 1990s, the G-20 is an informal forum that promotes open and constructive discussion between industrial and emerging-market countries on key issues related to global economic stability. The G-20 includes Argentina, Australia, Brazil, Canada, China, France, Germany, Great Britain, India, Indonesia, Italy, Japan, Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the U.S. and the European Union. In G-20 countries, financial cooperatives serve 621 million people and have over US$7.6 trillion in assets.

Kansas legislature passes three measures supported by CUs

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TOPEKA, Kan. (3/27/09)--The Kansas legislature passed three pieces of legislation supported by the Kansas Credit Union Association (KCUA) on membership requirements, disclosures of mortgage trigger leads and financial literacy. The first is a credit union membership eligibility bill, introduced by KCUA, which clarifies that membership eligibility components, such as family members and volunteers, are protected going forward. It passed 123-0. The question had been raised that, because these components were referenced only in the grandfathered portion of the statute, versus the prospective portion, they may not be allowable. KCUA sought changes to eliminate confusion. “KCUA wanted to make sure there are no misinterpretations of the law and how it should be applied,” said Haley DaVee, director of state legislative and public affairs. The second bill requires greater disclosure of mortgage trigger leads. The bill requires that in oral and written solicitations for products or services based on a mortgage trigger lead, the solicitation must state clearly that the solicitor is not affiliated with the initial lender, and that the solicitation is based on personal information about the consumer that was purchased from a consumer reporting agency without the knowledge or permission. Other states have taken steps to require full disclosure of unsolicited offers of mortgage credit. In its testimony to the House Financial Institutions Committee, KCUA said, “Requiring full disclosure from users of mortgage trigger leads is ultimately a consumer protection measure. Kansas credit unions recognize consumers’ interest in preserving the privacy of their personal information.” The legislature passed financial literacy legislation for grades K-12 that requires the State Board of Education to develop state curriculum standards for personal financial literacy for all grade levels. The legislation also requires the board to encourage school districts to select textbooks containing provisions on personal finance when appropriate. “Personal financial literacy is critical as consumers today have more options for credit in an increasingly complex and overwhelming marketplace,” KCUA said in its testimony.

Navy Army FCU grows by being lender of choice

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CORPUS CHRISTI, Texas (3/27/09)--Navy Army FCU has built its growth model based on being able to lend money and becoming the “lender of choice” in the area it serves. The $780 million asset, Corpus Christi-based credit union experienced 11% membership growth in 2008. It usually grows more than 10% each year, Wayne Vann, Navy Army CEO, told News Now. Navy Army has been a community credit union since 2003 and serves a six-county area with a population of about 400,000. In January 2003, the credit union had about 40,000 members. Today, it has more than 68,000. The population of Corpus Christi and the surrounding area is nearly 70% Hispanic--not first generation, but an established Hispanic population, Vann said. “Corpus Christi is one of the weakest credit areas in the nation with an average FICO (financing corporation) score of 578,” Vann said. “To serve those people we have decentralized loan approval, versus the usual centralized approval process at most credit unions. We have more than 40 lenders at our 10 branches. We decentralized it, because with a centralized process most of our members wouldn’t make the cut. “All our growth revolves around our ability to lend money,” he added. “Our loan to-share percentage is 92% to 97% generally. We try to stay north of 90%.” About 50% of Navy Army's loans consist of C-paper (600 to 639 FICO scores) and D- paper (below 600 FICO scores). The credit union’s A-paper consists of FICO scores of 680 and above, and its B-paper is in a FICO score range of 640 to 679. “We have to build a model that will fit our audience,” Vann said. “Our growth philosophy is based on building relationships.” Navy Army uses five rungs to establish a lending ladder with members: capacity, stability, relationship, credit score and collateral. “We look at a member’s capacity to make loan payments; are they stable in terms of having a job; our relationship with the member--consisting of how many deposits and services they have with us--how well we know them; and their FICO score,” Vann explained. “So based on the first four rungs, we decide whether to give out a loan. We look at the collateral piece last.” About 55% of all the credit union’s loans are automobile loans. Of that, 60% are for used cars and 40% are for new ones. “Because our members have mostly low- to moderate- incomes and marginal credit, they mostly buy used cars,” Vann explained. About 35% of the credit union’s loan portfolio is real estate, he added. Although Navy Army does a lot of print and media advertising, its biggest source of business is referrals. “Once referrals start, then there is some pressure on the referring persons to make their loan payments and maintain good credit,” Vann said. Many Hispanics refer family members and “throw out a wide net” with referrals because often times they cannot obtain loans at other financial institutions, Vann said. As for the future, “there is plenty of business out there and it all revolves around relationships,” Vann said. “Most of our employees start as tellers and learn their knowledge base internally,” he added. “We’re service-oriented and listen to our members to see if we can make the service fit somehow in term of their needs. “We’ve built this whole [growth] model off of being able to loan money. We’re known in this area as the lender of choice. You need a stomach for risk and need to know your audience. Then you train your staff appropriately,” he concluded.

CU System briefs (03/26/2009)

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* HARRISBURG, Pa. (3/27/09)--John Kebles, retired president/CEO of Choice One Community FCU, Wilkes-Barre, has been named REAL Solutions program manager in Pennsylvania, announced the Pennsylvania Credit Union Association and the Pennsylvania Credit Union Foundation (Life is a Highway March 26). REAL Solutions is a national project of the National Credit Union Foundation. Kebles will work with credit unions to provide financial services to people struggling to save and build assets. (Photo provided by the Pennsylvania Credit Union Association) … * WARMINSTER, Pa. (3/27/09)--Freedom CU received 1,085 nominations for its 2009 Annual Voices of Inspiration Awards for Teaching Excellence. Nominations were submitted on behalf of exceptional educators in Montgomery County. Twenty-three finalists--one teacher from each Montgomery County public school districts, Montgomery County Intermediate Unit, and Montgomery County non-public school--will receive $500 and be recognized at a banquet on May 7. From those, three winners--one high school, one middle school, and one elementary school teacher--will be awarded the awards and given an additional $1,500. Also, the three schools--one in each grade level category--with the most nominations will receive cash prizes--$1,000 for the most nominations and $500 each for the runners up … * DEXTER, Maine (3/27/09)--Two men were sentenced Wednesday for forging $14,725 in stolen checks owned by a soldier serving in Iraq who had a credit union account. Duane Hyde, 37, and Robert Brammer, 29, were sentenced to two years in prison. Both men are accused of forging checks in the name of Shawn Burke, 23, who lost his life savings when his checks were stolen. Burke was serving in Iraq when the theft occurred. Burke’s account was at Maine Highlands FCU, Dexter, Maine. The credit union has refunded him $3,995 so far. Two other individuals allegedly involved in the case have not been charged (Bangor Daily News March 26) ... * LIVE OAK, Texas (3/27/09)-- Randolph-Brooks FCU just completed its 13th Annual Credit Unions for Kids Bowl-A-Thon, raising more than $34,000 to benefit the children of South Central Texas who use the Christus Santa Rosa Children’s Hospital in San Antonio and Dell Children’s Medical Center in Austin. The Randolph-Brooks Bowl-A-Thon requires a bowling center to host the event for an entire day. This year, Fiesta Lanes in New Braunfels, Texas, hosted 69 teams of five to bowl in two shifts--morning and afternoon. A group of 14 committee members worked six months to coordinate the event, including teaming up with a long list of companies willing to offer money or in-kind goods to make the event successful and ultimately benefit the children ...

Americas CU ConferenceExpo announces keynoters

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MADISON, Wis. (3/27/09)--America's Credit Union Conference and Expo will offer five keynoters, according to the Credit Union National Association (CUNA). The conference will take place June 21-24 in Boston.
Bert Jacobs, co-founder of Life is good, will speak about how he and his brother John turned three simple words on a T-shirt into a major brand with more than $100 million in annual sales. In 1989 they designed their first T-shirt. They spent five years traveling the East Coast, selling their shirts on the streets and door-to-door in college dormitories, sleeping in a beat up van. When they introduced "Jake," a smiling stick-figure-turned-mascot into the "Life is good" mix, sales soared. Jacobs will discuss making a difference while making a profit by selling feel-good products and embracing optimism as a force for powerful change. He also will discuss the company's business model, which includes almost no advertising. Instead, the company harnessed good public relations by organizing Life is good Festivals, which raise money for children. The conference marks the centennial celebration of credit unions with presentations honoring the first 100 years of credit unions in the U.S. Attendees at Sunday's reception and keynote session will be treated to a humorous, thought-provoking look at the life of Sen. George Norris, a key figure in the signing of the Federal Credit Union Act of 1934. Other keynoters include:
* Bill Hampel, CUNA's senior vice president of research and chief economist, and Mike Schenk, CUNA's vice president of economics and statistics. They will address the best ways to respond to current economic challenges and help attendees gain insight into the outlook for the economy and credit unions, the economic slowdown and more. Hampel and Schenk's expertise has been featured throughout the year in venues such as Bloomberg TV, MarketWatch, The New York Times, USA Today, The Associated Press, The Wall Street Journal, and CNN, among others. * Dan Roam, author of "The Back of the Napkin: Solving Problems and Selling Ideas With Pictures." Roam will show how to use pictures to describe complex concepts and solve problems and demonstrate how anyone can use visual thinking, regardless of artistic talent, to approach and resolve business challenges. * Guy Kawasaki, best-selling author of "Rules for Revolutionaries: The Capitalist Manifesto for Creating and Marketing New Products and Services." Kawasaki will discuss his experience with world-class companies to explain how to innovate, improve, and create new credit union products and services. His presentation will be modeled after his book.
For more information or to register, use the resource link.

California CUs saw slight growth in 4Q says DFI

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SACRAMENTO, Calif. (3/26/09)--California's credit unions continued to experience growth in total assets, total loans and total shares, according to statistics released for fourth quarter 2008 by the state's Department of Financial Institutions (DFI). Credit unions' assets, which totaled $72.6 billion, grew 1.7% from the $71.4 billion reported as of Dec. 31, 2007. Loans rose a fraction of a percent during the year to $52 billion, while shares grew 1.4% to $60.5 billion from $59.7 billion the year before. However, for the full year 2008, loans rose 2.5%. "Given the economy, the growth rate is excellent," Daniel Penrod, industry analyst with the California and Nevada Credit Union Leagues, told News Now. "Banks have pulled back and contracted their lending or are not lending at all, and credit unions are filling the market," he said. Also, credit unions' conservative lending has served them well. "Credit unions have never had to change their lending standards. Loan standards are conservative, the same as they were years ago. That's why credit unions are still lending," Penrod added. California credit unions' share growth for the full year was 4.25%, which is very good, Penrod added. "The key to these numbers is that they're sustainable. The growth doesn't throw the organization out of whack," he said. "In the lending boom, you had growth in double digits--that's not sustainable over a long time. You need 3% to 5% growth to sustain the credit union over the long term." Members equity decreased 2.4% during the year to $7.4 billion from $7.6 billion, causing the capital-to-asset ratio to decrease to 10.23% at year-end 2008 from 10.66% at year-end 2007. Credit unions are still well-capitalized, said Penrod, noting that 7% is considered well-capitalized. DFI noted the allowance for loan losses was up 82.2%--from $450.7 million to $821.3 million. But credit unions' charge-off ratio in California is at 1.17 for 2008, still very low, Penrod said. "Credit unions are finding ways to modify loans and avoid charge-offs. Credit unions increase their loan loss reserves and put money aside to prepare for it. They are well-capitalized enough to absorb loss and continue business as usual and even grow." Net margin to average assets rose to 4.22% from 4.02% a year earlier, and the provision for loan losses more than doubled--to $1.1 billion from $483 million at the end of 2007. Net income dropped from $218.1 million in 2007 to a net loss of $197 million, a decrease of $415 million or 190.3%. Delinquent loans were up 86.6%, or $411.7 million, to $887.2 million from $411.7 million. That doesn’t tell the full story, however. "Delinquent loans increased, but the actual delinquency ratio for 2008 is 1.65. Banks would kill for that kind of ratio," Penrod told News Now. Banks' delinquency ratio is significantly higher, at 3%. Nine fewer credit unions existed in the state at the end of 2008, with the number dropping to 187 from 196, said DFI. California's state-chartered commercial banks also saw losses during fourth quarter. Their net interest margin dropped to 3.23% from 3.50%, constricted by the increased cost of funds. Loan loss reserves for the banks were up 60.2% to $3.1 billion at year-end 2008 from $1.9 billion a year earlier. However, noncurrent loans went up from $1.5 billion to $4.6 billion, which caused reserve coverage of noncurrent loans to decrease to 66.61% from 130.02%.

Ex-Enron FCU CEO on crisis Communicate

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LaPORTE, Texas (3/26/09)--The former CEO of Enron FCU (now Startrust FCU) has advice for credit unions trying to differentiate themselves in the public eye from bankers and other entities with "credit union" in their name: Communicate. When Enron FCU's sponsor, the Enron Corp., filed for bankruptcy, the credit union suddenly found its name a liability. People lined up around the credit union to withdraw their funds. Members didn't understand that the credit union was separate from the failing company. Jack McAdoo, who is now CEO of Beacon FCU in LaPorte Texas, made a decision to communicate, he told Natasha Melugin, director of REAL Solutions at the Texas Credit Union League, for the league's blog, CU Grow (March 25). It turned out to be his best decision. "Communicate. Communicate. Communicate. And do it in person as much as possible. People like to hear 'it' straight from the horse's mouth," McAdoo said. He spoke to people in person and over the phone, sent letters and used the Web to "constantly and repeatedly" tell the story of how the credit union was different, independent, and safe and sound. Within seven months, McAdoo oversaw a name change, relocation and a field of membership expansion. Among his tips:
* Be ready to communicate with talking points and handouts. Know your plan and what you will say today, but wait, " he said. "Don't create a crisis by scaring everybody before something happens." * Keep staff informed so they can handle situations with members confidently. * Manage the grapevine. Make everyone understand nothing may be communicated publicly unless it has been previously approved. The person responsible for approving communications must be constantly available to handle situations that come up. Designate individuals to handle media inquiries.
For the full interview, use the link.

ICNNMoney.comI reassures CU members about CUs

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NEW YORK (3/26/09)--CNNMoney.com Monday reassured credit union members that their credit unions are safe. The article, “Credit Union Members: Don’t Panic,” reminds members that credit unions offer some of the “best deals” in banking. The piece was written in response to news about two corporate credit unions being placed into conservatorship. CNNMoney also noted that member deposits at federally insured credit unions are backed by the National Credit Union Administration. “You’re still going to find low fees and good deals at credit unions,” the article said. “As long as your institution is federally insured and your deposits fall below the insured limits, you can rest easy.” The article also prompted a debate in a comments forum about credit unions’ tax-exempt status. Several readers noted that credit unions, unlike banks, have not asked for taxpayer money to bail them out.

Eight corporates ratings reaffirmed with some changes

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CHICAGO (3/26/09)--The issuer default ratings (IDRs) of eight corporate credit unions were reaffirmed with a stable outlook by Fitch Ratings, which also lowered individual ratings of each corporate. Fitch said it based the affirmations on the National Credit Union Administration's (NCUA) "continued demonstrated support for these entities." In February, Fitch raised the support ratings of the corporates to "1" and established a support rating floor of "A+" to emphasize the importance of government support in assessing the probability of default for the entities. Fitch added that the adjusted rating action on each corporate's individual ratings follows NCUA's announcement that it was placing U.S. Central FCU into conservatorship. "The conservatorship will impair the value of the capital share investment in USC of each corporate credit union rated by Fitch, resulting in a significant negative impact on each institution's capital," Fitch said. The corporates are:
* Central Corporate CU (CenCorp), Southfield, Mich.; * Constitution Corporate FCU, Wallingford, Conn.; * Eastern Corporate (EasCorp) FCU, Auburn, Mass.; * First Corporate (FirstCorp) CU, Phoenix ; * Mid-Atlantic Corporate FCU, Middletown, Pa.; * Members United Corporate FCU, Eagan, Minn.; * Southeast Corporate FCU, Tallahassee, Fla.; and * Southwest Corporate FCU, Plano, Texas.
To view the ratings, use the link.

Manitoba CUs grew in 08 expect a tighter 09

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MANITOBA, Canada (3/26/09)--Manitoba’s 48 credit unions experienced significant growth in 2008 despite the global economic crisis, but 2009 could be tighter. For the 12 months ended Dec. 31, credit unions in the province increased their assets by 11.9% to $14.4 billion; their loan portfolio by 14.7% to $12.1 billion; and their deposits by 11.5% to $13.4 billion--which marks the ninth consecutive year of double-digit growth (Winnipeg Free Press March 25). Because the province’s 182 credit union branches continued to attract deposits in 2008, they were able to lend money to members and businesses, Garth Manness, CEO, Credit Union Central of Manitoba, told the newspaper. “The [global] liquidity crisis meant most financial institutions were short of [lending capital] and had trouble financing lending,” Manness said. “Our credit unions had the liquidity to be able to meet lending demand.” However, the continuing economic downturn will likely temper credit union growth in 2009, Mannes told the paper. “It’s going to be a tighter year, but credit unions still have liquidity,” he said. “They’re still lending it out and they’re still attracting deposits.”

Governor nominates three to Texas CU Commission

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AUSTIN, Texas (3/26/09)--Texas Gov. Rick Perry appointed three people to positions on the Texas Credit Union Commission (TCUC). Perry reappointed current TCUC Chairman Gary Janacek, CEO of Scott & White CU, Temple, Texas, to a second six-year term (The Advocate March 24). Perry also appointed two new public members--David Cibrian and John Yoggerst--to serve six-year terms. Cibrian, who replaces public member Mary Ann Grant, is an attorney in San Antonio. Yoggerst, who replaces Rusty Ballard, is a general partner in a construction management company in San Antonio.

NCUF Innovation Grant attracts Spanish members

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FAIRFAX, Va. (3/26/09)--Fairfax County FCU is leveraging a $99,900 Innovation Grant from the National Credit Union Foundation (NCUF) to attract members from the Hispanic community through partnerships with Spanish media. This is the second-largest of 14 NCUF Innovation Grants helping credit unions invest in their communities in 2009. Innovation Grants are made possible by supporters of NCUF and investors in the Community Investment Fund. CBS Spanish affiliate El Zol Radio, Cox Cable en Espanol, and Entravision--including Telefutura, Univision, and WJAL--are contributing a combined $430,000 worth of in-kind media for the $223.1 million asset, Fairfax. Va.-based credit union to use throughout 2009. The in-kind media include radio and TV commercials, public service announcements, long-form interviews, news segments, banner placements and literature distribution at Hispanic community events. “The launch of our media campaign has already resulted in 17% of our new members coming from Hispanic origins and 60% opening checking accounts,” said Fairfax Chief Marketing Officer Matthew Kaudy. “I am forecasting the trend to continue upward as the frequency of our message continues to increase and we continue to expand our messages through additional channels.” More than 100,000 of Virginia’s 400,000 Hispanics reside in Fairfax County. “Other financial institutions entering the Hispanic market primarily implement only a limited, short-term strategy: simply translating their current products into Spanish,” said Fairfax CEO Joe Thomas. “We must go much further. We have a valuable long-term opportunity to serve the Hispanic community, based on the credit union philosophy of ‘People Helping People,’ as opposed to a solely profit-based opportunity.” “Education about the benefits of the credit union system is imperative to the success of all programs reaching out to the Hispanic market,” Kaudy said. “Our campaign is designed to educate Hispanics about the credit union by connecting them emotionally. For example, one television ad on Univision features our Hispanic-branded checking account ‘Cuenta Corriente American’ while incorporating overseas footage from Salvadoran and Bolivian cooperatives drawing a connection to American credit unions.” In addition to radio and TV, Fairfax County FCU is bringing educational outreach into the community via partnerships with Hispanic organizations and bilingual member personnel at all touch points. For example, the credit union is partnering with local Hispanic groups to present financial education events themed around Central and South American countries and featuring Hispanic media personalities. Specific products and services designed to meet Hispanics’ needs include:
* A Spanish website featuring online account opening and bill payment; * Hispanic-branded checking accounts with debit rewards cards; * “Safe Accounts” for immigrants without Social Security cards; * Remittance programs that allow immigrants to send money abroad for less than standard wire transfers; and, * Opportunities to earn free international remittances and money orders.
“These products and services are designed to provide Hispanics the opportunity to accumulate assets and ultimately generate wealth for their families,” Kaudy concluded.

Pennsylvania bill would treat FI robberies as felonies

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HARRISBURG, Pa. (3/26/09)--A bill that would ensure robberies at financial institutions--including credit unions--would be treated as a felonies gained unanimous support of the Pennsylvania State Senate Judiciary Committee Tuesday. The Pennsylvania Credit Union Association said it is supporting and monitoring the legislation, and will keep credit unions updated on the status of the bill. Senate Bill 605, introduced by State Sen. Mike Waugh (R-York), calls for robbery of a financial institution to be classified as a second-degree felony, regardless of the method used to commit the robbery (Life is a Highway March 25). SB 605 amends the Pennsylvania Consolidated Statutes, which contains sections pertaining to “robbery” and “robbery of a motor vehicle.” Currently, bank robberies are simply grouped with other “robberies,” and if no bodily harm is done but property is taken, they are classified as third-degree felonies. The legislation, however, addresses the specific action of taking or removing money from a financial institution. The bill also gives prosecutors the tools to prosecute offenders, regardless of the method used by robbers, whether with a note or a gun. Even if no weapon were used to commit the robbery and no bodily harm done, a person could still be found guilty of a second-degree felony.

California Nevada leagues go green at new site

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ONTARIO, Calif. (3/26/09)--The California and Nevada Credit Union Leagues move into the new Ontario Airport Towers this week, marking the sixth change of venue for the trade association. This time the league decided to go green--not the color--but design. Interior materials, including paints, carpeting, and furniture, were selected because of their low chemical emissions and recycled content. Daylight from the office’s numerous windows, combined with efficient lighting fixtures, will help reduce energy use, said the league. Energy Star equipment and appliances were used where possible. And low-flow plumbing fixtures were installed to help reduce water use.
The Ontario Airport Towers Office Complex is the site of the California and Nevada Credit Union Leagues’ new office headquarters--which features sustainable “green’’ elements. The league will move in this week. (Photo provided by the California and Nevada Credit Union Leagues)
Also, the league recycled furniture by reupholstering and reusing much of its existing furniture, reducing the amount of material sent to the landfill. “The league already practices several green activities--from recycling to carpooling--and we wanted to continue in the same spirit of conservation with this move,” said Bill Cheney, league president/CEO. When the league decided in 2007 to relocate from Rancho Cucamonga, league executives searched for a new headquarters. They selected the new Ontario Airport Towers project, partially because of its LEED-approved green design and because the overall occupancy cost would be less than the lease for the old headquarters. The new location features the latest in technological advancements, and the office space is better-suited for the needs of employees and league members, the league said. The league will occupy the entire sixth floor of the project’s first phase, a 150,000-square-foot steel-frame building. The Ontario Airport Towers office complex is scheduled to be completed in three phases and will contain roughly 850,000 square feet of office space. It is currently the largest Class “A” office building in development in the area.

CU System briefs (03/25/2009)

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* NEW YORK (3/26/09)--Washington Square News, a campus paper at New York University, is urging New York University FCU to offer student loans. NYU FCU is considering expanding its services to offer student loans as early as the Fall 2009 semester, said the editorial Tuesday. "We feel this would be a wise and necessary decision in order to ensure that students are able to afford education during the recession," said the newspaper. "We hope that NYU FCU will choose to provide student loan services," said the editorial, noting students would benefit from lower interest rates, no collateral requirement and the security offered by a small, local system. The editorial also discussed credit unions' structure and philosophy and gave information about the $11.2 million asset credit union. For the complete editorial, click on the link … * CHARLOTTE, N.C. (3/26/09)--Forty representatives from North and South Carolina credit unions raised about $57,000 during a charity golf event for the Victory Junction Gang Camp, a NASCAR-themed facility for chronically and terminally ill children. The Fifth Annual Carolinas Cup, held March 15-17, in Southern Pines, N.C., was hosted by the Carolinas Credit Union Foundation, the North and South Carolina Credit Union Leagues, and CUNA Mutual Group. The annual event has generated more than $222,000 for the camp, founded by NASCAR driver Kyle Petty and his wife, Pattie, in memory of their son, Adam, who was killed in a NASCAR racing accident in 2000. From left are John Slack, president/CEO, Carolinas Credit Union Foundation; Kyle Petty; and Robin Kolvek, sales manager, CUNA Mutual Group South Region. (Photo provided by CUNA Mutual Group) … * OMAHA, Neb. (3/26/09)--Caroline Domanski, 62, a former executive of First Nebraska Educators and Employees Group CU, was sentenced to two years in prison and ordered to pay more than $786,000 in restitution for embezzling $1.4 million from the Omaha-based credit union. Domanski also was ordered to serve four years supervised release after the prison sentence. She was a former vice president of accounting during the embezzlements, which began in 1993 and continued over 15 years, said court documents (Associated Press Newswires March 25). Domanski created fake entries into various ledger accounts and made cash withdrawals from accounts and from the credit union's vault. The sentence resulted from a plea bargain …

Youth Saving Challenge can help tell positive story

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MADISON (3/25/09)--Credit unions will have another opportunity to emphasize the credit union difference with the National Youth Saving Challenge during National Credit Union Youth Week April 19-25. The challenge provides a "good news" story that credit unions can take to their local media. "The Youth Week and Saving Challenge is the perfect opportunity to help credit unions tell a very positive story--one that isn't told by the banks," said Lin Standke, manager of youth programs at the Credit Union National Association (CUNA). A recent Nielsen study notes that positive stories increase consumers' confidence in their financial institution, she said. Reading positive stories in the press about the institution was cited by 44% of respondents as a factor that would increase their confidence in the safety and soundness of their financial institution. Ads, mail offers, and Internet ads ranged from 25% to 21% as factors increasing confidence. (See "Study: Ads build financial-brand confidence" is News Now's System news section). This year's program has expanded. "This year, based on credit union feedback, the Credit Union National Saving Challenge runs the entire month of April," said Standke. "That means a credit union can promote the challenge during Youth Week, all of April, or any days it wants." Dawn M. Ambuehl-Sadek, financial education specialist at the A+ FCU, Austin Texas, put together a nice Youth Week page on her credit union's website, Standke added. To view it, use the resource link. As of Tuesday, 324 credit unions--24% of them new to the program--signed up to participate in the Saving Challenge. Combined, credit unions expect to collect more than $9 million in deposits. "We anticipate many more sign ups in the coming week," she said. The theme for National Credit Union Youth Week is The Magic of Saving. Use the links for information about the free saving challenge and how to promote youth week, or to sign up for the challenge.

CUs loan sparks interest in electric cars

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BERKELEY, Calif. (3/25/09)--Cooperative Center FCU will finance 100% of the purchase price of a ZENN electric car at a local auto dealership with fixed interest rates as low as 5% for those with good credit. “We felt it was good for the environment and good for consumers as well,” said Gary Bell, Cooperative CEO (ContraCostaTimes.com March 14). A demo model of the $19,000 car, which goes 35 miles between charges, attracted a lot of members who swarmed around the vehicle in the credit union’s lobby, the newspaper said. Obtaining financing for vehicle purchases is getting tougher--vehicle financing is down 32% compared with a year ago, according to Experian Automotive. Credit unions such as Cooperative are becoming “safe havens” for borrowers who are having a harder time obtaining car loans from banks battered by the tough economy, the paper said. “At this point, the credit union industry is solid,” Karen Dorway, president and director of research for Bauer Financial, told the paper. BauerFinancial is a firm that analyzes banks and credit unions. Credit unions are in better shape than large banks, so they have money available for vehicle financing, Chinton Talaati of online auto website Edmunds.com, told the paper. “Credit unions are emerging as one of the first places to look when financing a vehicle,” he added.

Study Ads build financial brand confidence

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NEW YORK (3/25/09)--Consumer confidence in the long-term health of financial institutions is significantly influenced by advertising and marketing efforts, according to a new study by Nielsen IAG. “This research shows that ‘out of sight’ can mean ‘out of business,’” said Richard Khaleel, executive vice president of Nielsen IAG’s Financial practice. “The current economic climate makes it more important than ever for financial institutions to bolster confidence among their clients, and this study clearly demonstrates the link between advertising and confidence levels. “With constant scrutiny on the industry, it’s clear that taking control of the message in advertising and press can make all the difference for a brand,” he added. The study comes as data indicate year-to-year reductions in advertising expenditures in the financial services and insurance categories. Year-over-year ad spending in financial services and insurance was down 13.4% in 2008 compared with 2007. The study also found that confidence was linked to age and affluence, and the amount of risk associated with the financial institution. Older adults aged 55-plus and those with assets over $100,000 were more confident than average adults. Financial institutions fared better than life insurance companies and investment firms. Overall, a minority of study respondents said they had “complete confidence” in their financial institutions:
* Less than 38% had confidence in their checking and savings institution; * Only 28% were confident of the company that manages their investment or retirement accounts; and * Only 28% had confidence in their life insurance company.

CUDL Kia team on auto discounts in Wash. Ore.

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ONTARIO, Calif. (3/25/09)--CUDL, which administers a point-of-sale and indirect auto-lending network for credit unions, announced it has entered into a new partnership with auto manufacturer Kia Motors America (KMA) to provide discounts in Washington and Oregon. The partnership between the credit union service organization (CUSO) and KMA provides members at CUDL’s partnering credit unions access to special manufacturer discounts on the purchase of new Kia vehicles. The program will be rolled out in Washington and Oregon. Members in those two states will receive discounts offered on all 2008 and 2009 new Kia vehicles. Credit union members purchasing a new Kia vehicle will receive either a $500 or $1,000 discount, depending on the vehicle model purchased. The initial discount program will run through April 30, and will be offered to CUDL’s 71 credit unions and 22 partnering Kia dealerships in Washington and Oregon. Executives from CUDL and KMA confirmed that the partnership includes expanding the discount program into other markets nationwide, although a timetable has not been finalized. The CUSO’s auto lending network currently includes 700 credit unions and their 20 million members nationwide, and includes more than 260 partnering Kia stores throughout the U.S. “This is a great opportunity for us to continue to build the Kia brand and provide additional financing options to new and existing customers as well as to our dealers,” said Tom Loveless, vice president of sales, KMA. “It also serves to help us strengthen our network of partnerships with various financial institutions and relationships with their members.” CUDL credit union members will save $500 on any new Kia Spectra, Rio, Sportage, Optima or Rondo models, and $1,000 on any new Kia Sedona, Sorento, Amanti or Borrego. The credit union member discount can be used in combination with any other incentives offered by Kia dealerships, providing members with deeper discounts. “Our goal through this new partnership is to help our credit unions capture loans, offer members discount value on their next Kia purchase, and to provide our Kia dealerships with new customer opportunities to help grow their bottom lines,” said Jerry Neemann, CUDL’s executive vice president and chief security officer. CUDL also has partnered with Livonia, Mich.-based CUcorp to promote “Invest in America,” credit unions’ nationwide auto lending program with General Motors and Chrysler.

A.M. Best affirms CUNA Mutual rating adjusts outlook

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MADISON, Wis. (3/25/09)--A.M. Best affirmed its “A” (Excellent) financial strength rating for CUNA Mutual Group in its annual ratings review, and adjusted its outlook for CUNA Mutual. A.M. Best revised CUNA Mutual’s outlook from stable to negative, consistent with the rating agency’s negative outlook for the entire life insurance sector. “Since late in 2007, CUNA Mutual has been taking steps to maintain its financial strength in the midst of this economic crisis,” said Jim Buchheim, CUNA Mutual vice president, corporate communications. “We’re pleased to continue to earn strong, independent financial ratings in these difficult times.” The “A” rating applies to the principal companies of CUNA Mutual Group--CUNA Mutual Insurance Society, a life and health insurer, and CUMIS Insurance Society Inc., a property and casualty subsidiary. The “A” rating is the third highest rating of 16 ratings categories A.M. Best issues. In affirming the rating, A.M. Best also acknowledges CUNA Mutual’s “long-established position as a leader in providing financial solutions through its life, health and retirement products to members and employees of credit unions. “Due to the ongoing implementation of three years of transformation initiatives, CUNA Mutual has improved its overall operating efficiency in its core target market of credit unions,” A.M. Best added. CUNA Mutual’s financial strength and capital position remain strong. The company’s revenues grew by nearly 7%, and operating gain exceeded $150 million last year. CUNA Mutual’s statutory surplus declined slightly in 2008 as a result of investment losses. A.M. Best also issued several secondary ratings to CUNA Mutual Group subsidiaries:
* The Issuer Credit Ratings on CMIS and CUMIS were adjusted from a+ to a. Because CUNA Mutual has issued no public or private debt and has limited borrowing, these ratings have little significance, CUNA Mutual said; * The financial strength rating of MEMBERS Life, a dormant, downstream life company that is not core to CUNA Mutual’s operations, was moved from A- to B++ with a stable outlook. The policies still outstanding are valid and the company’s ability to pay on their value is completely unaffected by this adjustment, CUNA Mutual said; and * A stand-alone rating on each of CUNA Mutual Group’s property/casualty entities was issued. CUMIS Insurance Society Inc., the primary property/casualty company, was affirmed at “A” with a stable outlook. CUMIS Specialty, a surplus lines company, had its rating adjusted to A- with a stable outlook. There are assets in CUMIS Specialty, but no business has been written.
A.M. Best Co. is a full-service credit rating organization of financial services industries, including the banking and insurance sectors.

Michigan state-chartered CUs can buy non-CU assetsliabilities

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LANSING, Mich. (3/25/09)--The state regulator has granted state-chartered credit unions in Michigan additional powers to acquire assets and assume liabilities, including deposits from depository institutions other than credit unions, in purchase and assumption contracts. Michigan's Office of Financial and Insurance Regulation (OFIR) Commissioner Ken Ross authorized the additional powers on March 3. The power is already available to federally chartered credit unions and other domestically chartered non-credit union depositories, according to a March 13 letter to state-chartered credit union boards from Deputy Commissioner Roger W. Little. Authorizing the power provides state-chartered credit unions greater opportunity to compete with other financial service providers and to better meet the financial needs of their memberships and communities, said Little. The order was requested on Dec. 4, 2008, by Lake Michigan Credit Union, a state-chartered credit union. The order said it would "level the competitive playing field among credit unions operating in Michigan."

CU System briefs (03/24/2009)

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* THORNDALE, Pa. (3/25/09)--The Coatesville Relief Fund, established at Citadel FCU, Thorndale, Pa., after arson attacks in the town Jan. 24 destroyed 15 rowhomes, is helping those affected by the fires. Funds were distributed two weeks ago to 25 of the 35 families relocated to permanent housing. Money was distributed, based on family size, and was allocated to housing needs, utilities, moving items and a Visa gift card. “Citadel’s roots are in Coatesville, so many of our members have been affected by both the physical destruction of these meaningless fires and the continuing fear that they have caused,” said Jeff March, Citadel president/CEO. Citadel opened the Coatesville Family Fund after the fires. Fifteen separate fires have been started in the area by arsonists (News Now Feb. 5). Citadel has $1.2 billion in assets... * BURNSVILLE, Minn. (3/25/09)--US FCU, Burnsville, Minn., reported a 79% increase to 336 auto loans for February--the highest number of loans the credit union has had in the past 5 years. USFCU offered incentives through the Invest in America program, which was launched in February and offers discounts for General Motors and Chrysler vehicles. It also launched a “Do the Dashboard Hula” campaign, which offers new car rates extended to used vehicle purchases of model years 2005 or higher, a refinancing discount of 2% off loans financed elsewhere and no payments for the first 90 days on most vehicle loans ... * RALEIGH, N.C. (3/25/09)--State Employees’ CU (SECU) pledged $300,000 through the SECU Foundation to help build a six-suite addition to Hospice House of Rutherford County. The addition will be completed in May. The foundation pledge completed the “Hospice Hands of Hope” campaign to construct the addition. The house is now known as the SECU Hospice House of Rutherford. Attending the check presentation were (from left): Lt. Gov. Walter Dalton; Kim Hollifield, senior vice president, SECU, Forest City; Rita Burch, director of SECU Hospice House of Rutherford; and Michael Benfield, chairman, SECU Forest City Advisory Board. SECU, Raleigh, N.C., has $16 billion in assets. (Photo provided by State Employees’ CU) ... * PALATKA, Fla. (3/25/09)--A robbery attempt at Putnam County FCU, Palatka, Fla., was foiled when two men couldn’t get into the credit union’s safe. Two robbers approached Putnam’s manager at 6:30 a.m. Monday as he was entering the credit union. The robbers told him to open the credit union and safe. One robber carried an assault rifle (St. Augustine Record March 24). When the robbers weren’t able to get into the safe, they stole the manager’s wallet and fled. The manager was not injured, and police are still investigating the incident ...

Minnesota CUs take part in Co-op Day at Capitol

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ST. PAUL, Minn. (3/25/09)--Representatives from Minnesota credit unions and the Minnesota Credit Union Network (MnCUN) joined forces with the Cooperative Network on March 11, to take part in the first annual Co-op Day at the Capitol in St. Paul. Attended by more than 75 participants, the new grassroots event was offered to representatives from cooperative businesses in all industries to educate elected officials about the uniqueness of co-ops, discuss legislative issues and build long-term relationships. Cooperative Network is the Minnesota and Wisconsin trade association of cooperative businesses. It serves more than 600 member cooperatives, including credit unions.
Seven Minnesota credit union representatives attended Co-op Day at the Capitol in St. Paul March 11. Pictured, from left: Russ Plunkett, Postal CU, Woodbury; Monica Weber, MnCUN; Bill Oemichen, Cooperative Network; and Neil Christy, MnCUN. (Photo provided by Minnesota Credit Union Network)
Three individuals from the MnCUN, along with three representatives from SPIRE FCU, Falcon Heights, and one from Postal CU, Woodbury, attended the event. “It’s important that all credit unions remember that we are a part of the larger co-op community, and just as important for our legislators to identify us as members of the greater cooperative family,” said Neil Christy, MnCUN vice president of education and credit union development, and Cooperative Network board member. “It is very rewarding to work with the representatives of other co-ops to advance the cause for cooperative member/owners throughout the state,” Christy added.

Cash-strapped California gets help from CU

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SACRAMENTO, Calif. (3/25/09)--Even states can turn to their credit unions when strapped for cash in tough times. The state of California got a boost from Sacramento-based The Golden 1 CU, when the credit union bought $500 million in short-term "revenue anticipation notes" in a private placement deal Monday with the state Treasurer's Office. By conducting a private placement with the $6.9 billion asset credit union, the state reduced to $1.5 billion the amount of borrowing it must do to meet its cash-flow needs through the 2008-2009 fiscal year, (Sacramento Business Journal and Dow Jones via The Wall Street Journal March 23). The Golden 1 is charging the state 2.2% interest. The notes will mature on June 23, said a release from the Treasurer's Office. The state also began a two day $4 billion general obligation bond offering Monday and sold $2.4 billion to individual investors.

Mich. league CUs visit St. Lucia partners

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CASTRIES, St. Lucia (3/25/09)--Jonathan Elliott, CEO and manager of MemberFocus Community CU, Dearborn, Mich., sees both similarities and differences between Michigan’s credit unions and those on the Caribbean island nation of St. Lucia. Elliot is part of a recent seven-member Michigan Credit Union League delegation that recently visited St. Lucia as a part of the World Council of Credit Unions’ (WOCCU) International Partnership program.
Click to view larger image Michigan Credit Union League delegation members (from left) Jonathan Elliott, Bill Harvey and Jan Rose learn about member services from a St. Lucia credit union staff member.
Click to view larger image St. Lucia Co-operative League CEO Alexander Joseph (left) provides a tour of island credit unions for Michigan league delegation participants Bill Harvey, Kathleen Bennett and Martha Ninichuck. (Photos provided by the World Council of Credit Unions)
“We're all trying to educate our members about financial issues to help them save and think about the future, and the youth market is a concern for all of us,” Elliot said. “The major difference has to do with a lack of financial transaction technology in St. Lucia. The availability of electronic services is just not there.” One of the delegation's goals was to work towards increasing technological capabilities by conducting a needs assessment of St. Lucia's credit unions during its visit to the island. A daylong seminar on new product promotion, cooperative advertising, credit union consolidation, mergers and shared branching was a focal point. A seminar on operational solutions, including technological ones, and a peer job-shadowing exchange also highlighted the visit. Participants found the differences between the two credit union systems sometimes striking. “It's easy to take for granted the luxuries afforded us,” said Lauren Vance, marketing manager for Christian Financial CU, Roseville, Mich. “Things like technology, innovation and sharing cooperative concepts characterize our industry at home, but not in St. Lucia. Visiting the island allowed me to play an active role in pushing our movement forward on a global scale.” Other Michigan delegation participants in the weeklong visit included Bill Harvey, board chair for MemberFocus Community CU; Kathleen Bennett, board vice chair, and Jan Rose, CEO, of E&A CU, Port Huron; Jim Kirk, director of business and community development for the University of Michigan CU, Ann Arbor; and Martha Ninichuck, director of membership relations for the Michigan league. According to WOCCU's 2007 Statistical Report published in June 2008, St. Lucia's 15 credit unions serve more than 60,000 members. While mergers may be inevitable for the small system, shared branching offers promise toward helping credit unions expand to reach more of the island's population, according to Victor Miguel Corro, senior manager of WOCCU's International Partnerships Program. “Participants were very curious about shared branching and agreed that credit unions in St. Lucia should make a serious effort toward this goal,” Corro said. “Shared branching may be the next logical step for this partnership to pursue.” The needs assessment during the visit identified a demand for more long-distance training, such as webinars, which can be attended for a relatively low cost. Alexander Joseph, CEO of the St. Lucia Co-operative League, identified financial education, budgeting practices and building a savings culture as webinar topics St. Lucia's credit unions would find useful.

CU System briefs (03/23/2009)

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* HARRISBURG, Pa. (3/24/09)--So far in 2009, Pennsylvania's credit union members have purchased 1,928 new vehicles through Invest in America, the auto loan partnership between credit unions and General Motors and Chrysler Corp. LLC. GM dealers reported sales of 1,234 vehicles, and Chrysler reported 694 new vehicles sold to qualifying credit union borrowers. "While many lenders have scaled back or stopped making loans, the good news is that credit unions are still making loans to qualified vehicle buyers," said Pennsylvania Credit Union Association President/CEO Jim McCormack ... * WASHOUGAL, Wash. (3/24/09)--A black tube in a duffle bag, thought to be a bomb, outside Vancouver, Wash.-based Columbia CU's branch in Washougal, Wash. turned out to be fishing gear, according to kgw.com (March 20). A man who left the luggage and fishing gear outside the credit union returned just before the bomb squad evacuated the area. Police had already closed roads around the credit union. The incident followed another incident last week when police arrested a suspect in the robbery of LaCamas CU and discovered a bomb in the getaway car …

Drill tests drive-thrus as pandemic medicine distributors

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TOOELE, Utah (3/24/09)--Heritage West FCU was among the financial institutions involved in a county health pandemic drill that focused on distributing medicine through drive-throughs at financial institutions. The Tooele (Utah) County Health Department, which set up the drill Saturday, tested the use of credit union and bank drive-through windows to disseminate anti-viral medications to the public in the event of a flu pandemic, bioterrorism attack or other disaster (Deseret News March 22). Tooele residents participated by driving up to the window and sending a filled-out form through the pneumatic,cash-handling tube. The "medication"--a new gold dollar for each person in the vehicle--was placed in a prepared envelope by a public health nurse, under the direction of a pharmacist, and sent back through the tube to the vehicle. Health officials told the publication that 60% to 70% of the population could go through a nonmedical model to receive medication by driving in and out with directions on how to take the medicine. The drive-through model would reduce risk to exposure and provide an efficient way to dispense medication, which would be critical to saving the greatest number of lives, they said. The exercise in Tooele and a similar one in Grantsville served 809 cars, with 2,369 gold dollars given out in about two hours. The only difficulty: Getting sufficient size or amount of medication through the pneumatic tubes. The officials plan to work on packaging.

Mid-Atlantic Corporate reaffirms strength

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HARRISBURG, Pa. (3/24/09)--Mid-Atlantic Corporate FCU says the investments it holds with U.S. Central FCU "have continued to earn dividends, and we plan on holding them to maturity." The Middletown, Pa.-based corporate made the statement in a fax broadcast to its members Friday after the National Credit Union Administration announced it had placed U.S. Central and Western Corporate FCU (WesCorp) into conservatorship (Life is a Highway March 24). The corporate noted the deposits are guaranteed under NCUA's extended guarantee of corporate deposits. "Mid-Atlantic Corporate will maintain our normal practices of analyzing and evaluating portfolio valuation and risk, and the corporate will continue to look to various investment sources as our U.S. Central investments mature." Mid-Atlantic had moved toward greater diversification in its portfolio the past year and has not invested directly in retail mortgage backed securities, collateralized debt obligations or specialized investment vehicles. "We have no direct risk with these types of securities because we do not hold them in our portfolio," the statement said. "Our operations are not directly affected by these announcements," it said, noting it remains "a safe and sound institution that is perfectly positioned to meet our members' liquidity and investment needs."

CUs an emergency first responder in economy

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MANCHESTER, N.H. (3/24/09)--Credit unions in New Hampshire have taken on the role of emergency first responders in the ongoing economic crisis, according to a local newspaper. By offering higher interest rates, more mortgage refinancing programs and continuing consumer education to help members and the general public, credit unions are doing a better job than banks, said the Nashua Telegraph (March 23). The 23 credit unions headquartered in the state are making substantial efforts to help consumers, Rob Kimmett, senior vice president of marketing for the New Hampshire Credit Union League, told the newspaper. By “sticking with the basics,” credit unions have remained successful, even during the Great Depression, Kimmett added. The basics, seasoned with some incentives, have created a credit union recipe for success, the paper said. Some examples:
* Triangle CU, Nashua, offers an online savings account that was introduced in October and yields a return of 3.25%; * Bellwether CU, Manchester, encourages its members to call whenever life’s challenges--sickness, divorce, death--happen, or else the credit union contacts its members directly, said President/CEO Mike L’Ecuyer, adding that deposits at the credit union have been going up; * Granite State CU, Amherst, has been “hauling in mortgages,” the past few months, said Jody Ducharme, marketing communications liaison. She cited the non-profit credit union model for providing an edge over banks during tough economic times; and * St. Mary’s Bank, Manchester, the nation’s first credit union, is experiencing business as usual, said Steven Macek, director of retail lending. In the second quarter of 2008, the credit union recognized that members were facing difficulties, so it went through alternatives, modifications and short sales to help raise awareness and educate members about foreclosures.

Filene studies CUs tax-time help for low-income staff

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MADISON, Wis. (3/24/09)--For most people--especially for low-income consumers--income tax filing is the single biggest financial event of the year, and credit unions may be in a position to help, according to a new Filene Research Institute study. The study, The Economics of Serving Low-Income Employees at Tax Time: Implications for Credit Unions, authored by John Hoffmire, explores a partnership between Progress Through Business, a nonprofit organization focused on poverty alleviation issues, and H&R Block to offer tax preparation to low-income employees of Staples, Inc. The report shows how tax preparation services, corporations and nonprofit organizations can work together in the process. The study was conducted with funding from the National Credit Union Foundation and its signature program, REAL Solutions. More than 400 Staples employees took advantage of tax preparation and benefits enrollment services. These employees received higher tax credits or refunds and other tax advantages than they would have received without the service. The combination of tax preparation and public and private benefits enrollment also increased employee participation in employer-sponsored plans such as employee stock purchase plans, 401(k) retirement plans and tuition reimbursement programs. Enrollment in public benefits also increased, with higher claims for Earned Income Tax Credit, child care credits, renters’ credits, education credits, and other benefits aimed at low-income taxpayers. The advantage for Staples was a reduction in employee turnover. After one full year of tracking, those who participated in the program during the 2007 tax season showed a 32% improvement in retention over those who did not participate. “For each employee who participated in this program at a cost of $75, the company saved $480,” the study said. “The Tax Break program is more than a modest tweak in mainstream Volunteer Income Tax Assistance programs,” said George Hofheimer, Filene chief research officer. “This study is about providing tax preparation and public/private benefits enrollment to low- and modest-income employee groups for a fee,” he added. “Previous work by the Filene Research Institute confirmed the efficacy of at-work financial service programs, and this report suggests that replicating the Staples program at credit unions could have dramatic implications.”

New leadership appointed for U.S. Central WesCorp

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LENEXA, Kan., and SAN DIMAS, Calif. (3/24/09)--U.S. Central FCU and Western Corporate FCU (WesCorp) have new leaders to see them through the conservatorships imposed Friday by the National Credit Union Administration (NCUA). Jim Nance, who oversaw U.S. Central's asset and liability management from 1993 to 1996, has been named president/CEO of U.S. Central, effective yesterday. He most recently was chief administration officer of Icap Capital Markets, based in Jersey City, New Jersey. Nance told Reuters that credit unions will handle their problems on their own without having to turn outside the credit union system. He stressed that the credit union industry remains extremely well capitalized and will not likely need a bailout from taxpayers (Reuters March 22). Nance replaces Francis Lee. All other senior management remains intact, but the board has been replaced by NCUA, said Lyle Niedens, director of communications at U.S. Central. Philip R. Perkins has been named president/CEO of San Dimas, Calif.-based WesCorp, replacing Bob Siravo. Chief Investment Officer Bob Burrell also is no longer with the corporate, according to its website. Perkins brings more than 25 years of experience in the financial services industry, according to the website. Most recently, Perkins served as senior vice president, senior portfolio manager at Delaware Instruments, where he was responsible for asset allocation and sector decisions for a $5 billion Multi-Sector Fixed Income Mutual Fund complex. He also was with Deutsche Bank for five years as managing director of global markets in London, and as director, emerging markets in Moscow. Prior to that, Perkins was CEO of Dinner Key Advisors, a registered broker-dealer founded to trade derivative mortgage-backed bonds with institutional clients. He was a mortgage/collateralized mortgage obligation trader at Salomon Brothers from 1985 to 1990. In a letter to members on Friday, Perkins said WesCorp "will continue uninterrupted and members will not experience any disruption of services." NCUA Executive Director David Marquis told a webinar Monday afternoon that both Nance and Perkins "have extensive capital markets backgrounds."

CU bailout not from taxpayers--league op-ed letter

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MADISON, Wis. (3/24/09)--A so-called “federal bailout” of corporate credit unions is no such thing, and the $4.7 billion in aid comes from credit unions’ own self-funded insurance system--not from taxpayers, according to an op-ed letter from the Wisconsin Credit Union League. “That’s a novel idea--an industry trying to solve its own problems, credit unions helping credit unions,” wrote Brett Thompson, league president/CEO, in a letter in Monday’s Wisconsin State Journal, refuting the “federal bailout” assertion made in a March 13 letter to the editor by Kurt Bauer, president/CEO of the Wisconsin Bankers Association. “Bauer would be better off addressing the issues faced by his own industry than by trying to undermine confidence in credit unions at a time when regulators have proclaimed credit unions to be safe, healthy and lending vigorously,” Thompson concluded.

Mortgage company ordered to turn funds over to CU

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NEWARK, N.J. (3/24/09)--The U.S. Bankruptcy Court approved a consent order Friday requiring CU National Mortgage LLC to turn over all funds belonging to Picatinny FCU that the mortgage servicer allegedly withheld and to transfer mortgages it had been servicing to Picatinny's new servicer. CU National Mortgage and its parent U.S. Mortgage, based in Pine Brook, N.J., had filed for a Chapter 11 bankruptcy in U.S. Bankruptcy Court in Newark, N.J., listing more than $200 million in debts to Fannie Mae and 19 credit unions (News Now March 2). Picatinny FCU, a $247.5 million credit union based in Dover, N.J., alleged in a petition to the court that CU National Mortgage sold 58 of the credit union's mortgage loans-- totaling more than $14 million--to Fannie Mae without the credit union's knowledge or authorization. Credit unions have claimed more than $160 million of their mortgages went to Fannie Mae without authorization and that CU National Mortgage pocketed the money. The mortgage service also must turn over all loan files, reports, documents and other information, including electronic data, on the loans and any escrow being held on the properties.

Scots angry at banks boost CUs membership 38

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GLASGOW, Scot. (3/23/09)--Glasgow's City Council reported that applications in western Scotland to join some credit unions have risen by about 38% in the past six months, as potential members seek a financial institution they can trust. West of Scotland NHS Employees CU saw a 38% increase in applications for new memberships during that time period because people are uncertain about the current banking situation and are placing more trust in credit unions, Robert Kelly, general manager, told BBC News March 20). Scotwest CU CEO Rod Ashley told BBC that his credit union has recruited more than 3,000 new members--a 12% increase since January 2008--from throughout western Scotland. Over the past six years, Glasgow's 35 community and industrial credit unions increased six-fold in membership and managed assets. They now have 110,000 members combined. Around one in five people in Glasgow are believed to be credit union members, the highest urban membership rate in the United Kingdom.

CU System briefs (03/20/2009)

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* RALEIGH, N.C. (3/23/09)--Members of State Employees' CU have topped $20 million in People Helping People Scholarships, provided through the SECU Foundation to students in every traditional public high school in North Carolina. The four-year college scholarships, valued at $10,000 each, are awarded to graduating seniors to study at one of 16 constituent campuses of the University of North Carolina System … * RALEIGH, N.C. (3/23/09)--Local Government FCU's (LGFCU) special affinity Visa Check Card exclusive to all North Carolina's firefighters and their families has resulted in $254,316 in donations to the North Carolina State Firemen's Association (NCSFA). The bright red cards feature a firefighter's helmet. Instead of fees coming from firefighters and their families, store merchants pay the fees to process the debit card transaction, and LGFCU takes half the fee for every purchase and directs it to NCSFA. According to LGFCU President Maurice Smith, the partnership generates about $20,000 per quarter in donations. More than 4,000 of the cards are in circulation (Weekly Update March 20) … * KANSAS CITY, Mo. (3/23/09)--Mazuma CU, based in Kansas City, Mo., has presented a $40,000 endowment to the University of Missouri-
Click to view larger image Click for larger view
Kansas City (UMKC), according to the Missouri Credit Union Association (The Missouri difference March 20). The endowment will provide two $1,000 scholarships for years to come--one to a student in the Business and Public Administration School and one to an Education School student. In the photo, Mazuma President/CEO Rob Givens, left, presents the endowment on Feb. 25. (Photo provided by the Missouri Credit Union Association) … * GIG HARBOR, Wash. (3/23/09)--Harborstone CU has decided to offer reverse mortgage services to its senior members. The Tacoma, Wash.-based credit union partnered with Security Reverse Mortgage, Gig Harbor, Wash., to offer the Security Reverse Credit Union Program to educate, process and fund reverse mortgage loans for senior members. Over 25% of the credit union's members qualify for a reverse mortgage, said Roger Johansen Sr., vice president of lending at the $550 million asset credit union. Seniors often have difficulty paying for living expenses due to inflation and reduction in retirement accounts, said the credit union. A reverse mortgage helps members increase monthly cash flow and retire their monthly mortgage payments, said Harborstone …

CUs auto loan workout options aid struggling members

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EUGENE, Ore. (3/23/09)--Northwest Community CU has seen its auto repossessions double in the past two years, but says it is still happy to lend. To help, it is providing its members with several loan workout options. Northwest is allowing members to skip two loan payments per year, and hundreds of members have taken advantage of that offer. The credit union also sent direct mailings to members last fall letting them know they have options. “We’ll find ways to make things work,” Matt Purvis, Northwest vice president of marketing told News Now. Some other options Northwest offers include interest-only payments for several months, no payments for several months, or reduced payments. So far, 120 have taken advantage of the modifications. “We’re promoting this,” Purvis said. “We’re telling members, ‘Don’t wait. Come in and let’s talk.’” During the first half of 2007, Northwest averaged about 28 repossessions per month. In 2008, that figure jumped to 66. Of those 66, more than half were voluntary. There are 32 additional auto loans--totaling about $500,000--pending in Northwest’s rework file. From last fall to March, Northwest altered more than $2 million in auto loans. But those loans made up only 1% of the credit union’s auto loan portfolio. Modifications are “a lot of work, and use a lot of people,” he said. “The numbers are holding steady,” Purvis said. “We haven’t seen it tail off yet, but we’re looking forward to that day.” Layoffs and a slow motor home and wood products industry have rippled across the region. Northwest was originally created to serve wood products workers. “It’s very slow,” Purvis said. “It’s never been what it was.” Many defaults have resulted from layoffs or significant pay cutbacks. Often two-income families have lost one income, making it tough for members to pay their bills on time. Northwest watches local and regional news for industry cutbacks and keeps in touch with members whose jobs may be in danger. And although auto lending is slow, the credit union keeps expanding its portfolio. “We’re very active in commercial loans and are promoting Invest in America,” Purvis said. Invest in America is a national program by that offers auto loan discounts to credit union members through General Motors and Chrysler. “We’re trying to raise our profile and let people know we’re investing in communities,” he added.

Invest in America grows in February

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LANSING, Mich. (3/23/09)--The Invest in America campaign closed about 32,000 vehicle sales in February, on top of 25,000 in January, for a total of 57,000 sales in the two months since the program went national. Invest in America is credit unions’ auto loan discount program with auto manufacturers General Motors Corp. (GM) and Chrysler Corp. The program started in December with a four-state pilot program for GM and a 12-state pilot for Chrysler. The campaign includes contractual credit union member incentives from GM and Chrysler. GM is offering supplier pricing, which averages about $1,500 per vehicle, with its Credit Union Member Discount, and Chrysler is offering $500 or $1,000 rebates through its Credit Union Member Cash program. The nationwide program is on a 90-day pilot with GM and a 180-day pilot with Chrysler. All 7,800 U.S. credit unions are eligible to participate in and market the program to their nearly 90 million credit union members. Collectively, U.S. credit unions have about $160 billion in capital to lend. About 70% to 80% of the 57,000 sales were financed by credit unions, estimated David Adams, CEO of CUcorp and president/CEO of the Michigan Credit Union League, in a conference call Friday. “Those sales are coming during the toughest months of the year,” Adams said. “We’re confident that credit unions are making a significant impact in the auto industry when it really matters.” So far, support for the program has come from more than 1,000 credit unions nationwide, and 40 state credit union leagues and associations support it. Credit unions’ share of auto loans rose to about 25% in January, compared with 14.8% in March of 2008, Adams added. Invest in America is a “natural” due to the collective customer bases of credit unions and General Motors (GM), Mark Degnan, GM director of local advertising and marketing, said during the conference call. “Credit unions have loyal customer bases and that has helped us gain customers through Invest in America,” he said. “It’s been a [beneficial situation] for GM, credit unions and dealers by adding additional credit capacity for consumers.” A strong percentage of the program participants appear to be first-time buyers. About 66% are either buying a GM vehicle for the first time, or are former GM customers who left and now have come back to purchase a GM vehicle through the program, Degnan said. Also, five of the 10 largest U.S. credit unions have begun to market the program, including: Navy FCU, Vienna, Va.; Suncoast Schools FCU, Tampa, Fla.; The Golden 1 CU, Sacramento, Calif.; Ent FCU, Colorado Springs, Colo.; and State Employees CU, Raleigh, N.C.

Huffington on IMSNBCI Bolster CUs

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WASHINGTON (3/23/09)--Credit unions are healthy and should be bolstered, according to Arianna Huffington, co-founder and editor in chief of The Huffington Post. Huffington appeared on MSNBC’s “Morning Joe,” show Friday morning to talk about the financial crisis, specifically related to news of American International Group’s bonus package. “There’s a lot of good stuff happening in this country--look at credit unions,” Huffington said. “How many people know that credit unions are healthy, they keep lending money and there have been no problems with them? “Why not bolster what is good in our economy as opposed to continuing to subsidize what is not working?” she added.

Robbery suspect nabbed with bomb in getaway car

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WASHOUGAL, Wash. (3/23/09)--A man who allegedly robbed a credit union in Washougal, Wash., was arrested Wednesday after he told police he had a bomb inside of his car. Shawn Bromley allegedly stole money from a branch of Lacamas CU, Camas, Wash., Wednesday. Police chased him after the robbery until Bromley crashed his car. After the crash, he told police that he had a bomb inside of his car--which the Federal Bureau Investigation later confirmed (KPTV.com March 19). The bomb was safely removed from the vehicle, and Bromley was taken into custody. Police have not yet disclosed the amount of money taken from the credit union, or whether Bromley was injured during the crash.

N.Y. CUs tell media why they want MBL cap lifted

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NEW YORK (3/23/09)--Loosening restrictions on member business lending at credit unions would not only help small businesses access sorely needed credit, it would also encourage more credit unions to get in the game, several New York credit unions told the media. The additional $10 billion in credit nationwide that could be freed up if the cap--12.25% of total credit union assets--was lifted would constitute a considerable amount of cash that could be injected into businesses, Edward Paternostro, CEO, Nassau Educators FCU, Westbury, told the Long Island Business News (March 19). Also, easing the cap restrictions would encourage more credit unions to take part in commercial lending, Bob Allen, CEO, Teachers FCU, in Farmingville, told the newspaper. With the current cap, smaller credit unions have higher costs with business lending than they make in return on their assets, Allen said. Also, if credit unions could make more commercial loans, they could lend to micro-cap businesses--which are too small to get bank loans, he added. A higher cap would allow credit unions to put more resources, staff, marketing and technology behind business lending, Allen told the paper.

Federation CDFI Fund outstrips previous actions

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NEW YORK (3/23/09)--The size and speed of the Treasury’s funding for the Community Development Financial Institutions (CDFI) Fund far outstrips any previous CDFI Fund actions, says the National Federation of Community Development Credit Unions. CDFI’s Fund--just weeks after receiving a $100-million allocation from the American Recovery and Reinvestment Act of 2009--has released its plan to award and disburse the monies in record time. The larger awards will be awarded by the end of June, with a “supplemental” round awarded by the end of September. A total of $145 million will be awarded to CDFIs nationwide. Under the plan:
* CDFIs with applications pending in the current round (2008-09) can amend their applications and apply for an increased amount--up to $2 million for Financial Assistance, and $600,000 for the Small and Emerging CDFI Assistance program. It is anticipated that about $90 million will be awarded by the end of June. * CDFIs that do not have a current application pending can apply for funding totaling $50 million, to be awarded by Sept. 30. Unsuccessful applicants in the June round will be eligible to reapply in this supplemental round. * No matching funds will be required for either round. * Native American CDFIs also will benefit from a higher ceiling on awards and an increase in the total number of Native American CDFI Assistance awards.
The CDFI Fund declared that it will make more awards than in previous rounds and dig further into the applicant pool. Also, awards may be larger than in past years. On Tuesday, from 4:00 p.m. to 5:00 p.m., the federation will be hosting a web conference for its members to discuss the new changes. A representative from the CDFI Fund will be on the call to answer questions, and federation staff will discuss the various resources available to CDCUs. For more information, use the link.

CU Day attracts 100 Vermont lawmakers

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SOUTH BURLINGTON, Vt. (3/23/09)--Vermont credit unions' Credit Union Day in the Vermont Statehouse attracted more than 100 state legislators, who stopped by the Association of Vermont Credit Unions' (AVCU) display Thursday.
Posing with the Association of Vermont Credit Unions' (AVCU) display in the Statehouse are, from left, University of Vermont faculty member and Chittenden County Rep. Ann Pugh; Richard Brock, AVCU legal counsel/lobbyist; and Adam Necrason, AVCU lobbyist. (Photo provided by the Association of Vermont Credit Unions)
AVCU management and its lobbying team spent the day chatting with lawmakers, answering questions, distributing informational handouts, and registering legislators for a random drawing for a Garmin GPS navigation system. The winner will be presented at AVCU's annual Legislator Appreciation Reception in late April. According to AVCU President Joe Bergeron, advocacy for Vermont credit unions is the association's primary mission. "This day in the Statehouse, and our upcoming Legislator Appreciation Reception, are integral components of our overall effort to make sure legislators understand what credit unions are all about," he said. "Connecting lawmakers with credit union leaders, and maintaining a positive dialogue with the legislators who ultimately determine the regulatory landscape under which we operate, is one of our most important functions," Bergeron added. Throughout the day, conversation focused on the state and national economies, said AVCU. Legislators expressed their understanding that credit unions played no part in causing the turmoil and continue to act responsibly to help their members. In its display, AVCU used graphics from the Credit Union National Association's "Credit Unions Look Out for the Little Guy" campaign to reinforce the message. "We heard many legislators speak positively about credit unions and the efforts they've made during these adverse economic times," said Bryan Kent, AVCU vice president. "Several of the legislators we spoke with expressed their appreciation for all that credit unions are doing to help consumers weather the storm."

League of Southeastern CUs announces new board

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BIRMINGHAM, Ala. and TALLAHASSEE, Fla. (3/23/09)--The League of Southeastern Credit Unions (LSCU) announced its new 16-member board of directors. The new board, which consists of eight representatives from Alabama credit unions and eight from Florida credit unions, will preside over LSCU--the entity formed from the recent consolidation of the Alabama and Florida Credit Union Leagues. Each state’s previous board chairman became a member of the new board and selected seven board members from their states to serve on the LSCU board. Executive officers will be elected at an upcoming organizational meeting. The LSCU board of directors consists of:
* Ola Anise--Azalea City CU, Mobile, Ala.; * Alvin Cowans--McCoy FCU, Orlando, Fla.; * Dale Dalbey--Mutual Savings CU, Birmingham, Ala.; * John Hirabayashi--Community First CU of FL, Jacksonville, Fla.; * Rich Helber--GTE FCU, Tampa, Fla.; * Brent Lister--First Florida CU, Jacksonville, Fla.; * Pat Mason--Sun CU, Hollywood, Fla.; * Joe McGee--Legacy Community FCU, Birmingham, Ala.; * Greg Olmsted--North Alabama Educators CU, Huntsville, Ala.; * Larry Scott--Campus USA CU, Gainesville, Fla.; * Deborah Seymour--Multi-Media CU, Orlando, Fla.; * Bob Steensma--Five Star CU, Dothan, Ala.; * Steve Swofford--Alabama CU, Tuscaloosa, Ala.; * Linda Walker--Riverdale CU, Selma, Ala.; * Tina Williams--The Infirmary FCU, Mobile, Ala.; and * Mary Wood--West Coast FCU, Clearwater, Fla.
The memberships of the Alabama and Florida leagues recently voted to combine the two organizations into one, which represents 332 credit unions with combined assets of $55 billion. As the League of Southeastern Credit Unions (LSCU), the joining of these two entities will create a stronger, more strategically situated organization, the league said.

No cease and desist here CUs cooperate instead

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GREENSBORO, N.C. (3/23/09)--Two credit unions across the country from each other found out they're using the same slogan in their membership campaigns, "Membership Matters." But, instead of one issuing a cease-and-desist order against the other, the two took their cooperative nature to heart. Unitus Community CU, a $734 million asset credit union in Portland, Ore., created the "Membership Matters" slogan for its campaign, only to discover that Charlotte, N.C.-based Carolina Postal CU already had a trademark fo the phrase, said the North Carolina Credit Union League (Weekly Update March 20).
Deb McLean of Carolina Postal CU offered to lease the credit union's campaign slogan, "Membership Matters." Laurie Kriesl of Unitus Community CU took the offer as part of the cooperative philosophy of credit unions. (Photos provided by the North Carolina Credit Union League)
Pat Smith, CEO of Unitus contacted the $62.8 million asset Carolina Postal to see if something could be worked out. Carolina Postal turned out to be a willing colleague. "We've been there," Joy Watts, Carolina Postal CEO, told the league, "and I knew exactly what Pat was feeling. We've had a terrific campaign, or a new product, just rolled out, only to receive a 'cease and desist' letter from a credit union in another state. It was so frustrating when the other credit unions would not partner with us on sharing the phrase or slogan. Especially irritating was the fact that our territories and member base didn't cross over or even come close to one another." When she joined Carolina Postal in 2007, Marketing Vice President Deb McLean was instructed by the board to trademark every phrase and slogan she created. "I was surprised but I understood the frustration," she said. "I agreed to do it, but only if we could take it to the next level." The next level in this case turned out to be McLean contacting Unitus to offer a lease for the phrase for a year or two, according to Laurie Kresl, Unitus vice president of marketing. The credit unions' territories didn't overlap and they both had clearly defined, limited fields of membership in each state. Sharing wouldn’t hurt each other's brand nor cause member confusion, said McLean. The decision made sense, she said, adding that credit unions who demand the cease and desist are "extremely short-sighted. They are simply lock-stepping to their lawyer's tune to 'protect' the trademark versus thinking outside the box." Leasing a trademark could become an income provider for credit unions and serves the credit union industry as a whole to work together as a cooperative movement, McLean said. "Now more than ever, credit unions need to go back to our core philosophy and work together," McLean said. Kresl agreed. "This is yet another example of how we, as credit unions, can set ourselves apart from the banking industry."

CUs Bill of Rights to attract new members

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HARRISBURG, Pa. (3/20/09)--Philadelphia FCU is using a "Bill of Rights" theme to attract new members on its micro website, www.BetterThanMyBank.com. The Bill of Rights theme captures the nation's populist mood and turn frustration with banks into consumer empowerment, said the credit union (Life is a Highway March 18). The credit union shot a video in front of Independence Hall that features people from demographic groups reciting concerns as account holders of large banks. Each person proclaims, "Enough!" and then declares a right, such as "I have a right to an education," or "I have a right not to be nickeled and dimed." PFCU's Bill of Rights then appears, linked to videos of member testimonials. Visitors can sign the Bill of Rights and enter a monthly contest with $500 as the prize, and sign up for an account at the credit union. The Bill of Rights provided a local-tie in, since it was signed in Philadelphia, said the credit union.

Fraud cases prey on economically distressed

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MADISON, Wis. (3/20/09)--Fraudsters are having a field day with consumers during the recession, as credit unions receive alert after alert about members and others who took the bait and found out the deal was too good to be true. During times of economic turmoil, consumers are especially vulnerable to fraud. This year, there are some new frauds. This report excludes phishing, vishing and smishing scams--News Now reported those on March 19. Here are the latest schemes:
* Consumers are being victimized while attempting to buy vehicles on the Internet, reports the Federal Bureau of Investigation (FBI). The victims find low-priced cars or trucks on Web classified ad sites. In a new twist, some scammers pose as members of the military who must sell the vehicle quickly and cheaply because they are being deployed overseas. Many scams include a third-party vehicle protection program to ensure a "safer" transaction. Victims are directed to send full payment, or a percentage, to the agent via wire. But no vehicle arrives. Credit unions can advise members to do as much due diligence as possible on such transactions and pay attention to the website's rules. If someone asks a member to break the site's rules, it is possibly a scam (LoneStar Leaguer March 11) . * There have been several incidents of fraudulent cashier's checks and members taken in by "Cash for Gold" advertisements in Pennsylvania, according to the Altoona (Pa.) Chapter of Credit Unions (Life is a Highway March 13). * Residents in Reading, Pa., have been targeted by work-at-home scams. These are especially popular during times of high unemployment. A letter from an entity purporting to be Truenorth Monitoring and Research Services of Quebec, Canada, informs the victims that based on a previous survey with Consumer Survey Specialist, they indicated an interest in part-time income. The letter offers employment as a Mystery Shopper to serve as a Consumer Service Evaluator of select retail stores. The victims would make purchases at the stores and evaluate the provider on a probationary basis. An application and a counterfeit check for $3,975 accompany the letter. The fraudsters aim to have the victim deposit the check, spend $150 at a retail store, then send money to another location via Western Union/Moneygram (Life is a Highway March 16). * Retirees attempting to recover from market losses are especially vulnerable to financial or investment scams, says Brent Neiser, certified financial planner and director with the National Endowment for Financial Education (NEFE) (LoneStar Leaguer March 12). According to the Securities and Exchange Commission, investment scams commonly used include: high-return or "risk-free" investments; pyramid schemes; "ponzi" schemes; promissory notes; Internet investment fraud; and affinity fraud. Credit unions should tell members to thoroughly research any person, organization or company that offers financial planning or investment advice or sells products or services. They should say no if seller: guarantees results; is in a hurry to close the deal; makes the offer via an unsolicited telephone call, post card or e-mail; or promises huge crude oil profit--a scheme particularly popular in Texas (LoneStar Leaguer March 13).

Self-Help gets 2.5 million to ease foreclosures

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DURHAM, N.C. (3/20/09)--Self-Help CU was awarded a $2.5 million grant Wednesday under a new federal program to help stem foreclosures. The grant is part of a Neighborhood Stabilization Program developed late last year by the U.S. Department of Housing and Urban Development. The program’s purpose is to assist areas hit hardest by the housing crisis. Self-Help’s grant was one of 20 in North Carolina announced Wednesday by Gov. Bev Perdue and awarded to local governments, nonprofits and other organizations in the state as part of the federal program. The Self-Help grant will fund two programs. One will provide provide low-interest loans to nonprofit and for-profit affordable housing developers to rehabilitate and purchase foreclosed properties. The other will allow the credit union to lend to members at or below 120% of area median income to help them purchase foreclosed properties. Self-Help, based in Durham, N.C., is a $333.4 million asset, community development credit union.

Canadas Central 1 posts 29.8 million net income

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VANCOUVER, B.C. and MISSISSAUGA, Ont. (3/20/09)--Central 1 CU, a Canadian central banking facility and trade association for credit unions, posted $29.8 million in net income for 2008. Central 1 was formed on July 1 when CU Central of British Columbia (B.C. Central) and Credit Union Central of Ontario (Ontario Central) merged (Marketwire March 19). The combined institution serves nearly 200 credit unions in the two Canadian provinces. In 2008, net income rose 22% from the record $22.4 million, posted alone by B.C. Central in 2007. “This demonstrates the benefits of consolidating the systems’ second-tier organizations,” said Don Rolfe, Central 1 president/CEO. Central 1 serves as the primary source of borrowed liquidity for credit unions, and facilitates access to other liquidity sources such as Canada Mortgage and Housing Corp.’s mortgage-backed securities programs. Under Central 1’s management, member credit unions sold $1.8 billion in assets through those programs in 2008. The financial margin grew to $47.1 million from $31.1 million in 2007, reflecting higher net interest spreads and the impact of the merger. Total assets exceeded $8.5 billion at year-end, up from $8.1 billion--or $5.7 billion for B.C. Central, and $2.4 billion for Ontario Central--at the end of 2007. Central 1 paid a dividend at an annualized rate of 5.76 % for the first half of 2008, and at an annualized rate of 4.13% for the second half, in line with its policy of paying a dividend equivalent to twice the average 90-day Treasury Bill rate.

WOCCU to Basel Rebalance capital requirements

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MADISON, Wis. (3/20/09)--World Council of Credit Unions (WOCCU) is calling for a fundamental review of the Basel II capital framework by the Basel Committee on Banking Supervision so smaller institutions and credit unions that fared better during the recession aren't subject to tougher capital requirements than larger, riskier institutions that present systemic risk. In three letters to Basel Committee Chairman Nout Wellink, Dave Grace, WOCCU's vice president of association services, urged the committee to "rebalance" inconsistencies outlined in its consultative documents, which classify small financial cooperatives together with large, more complex banks. The letters are in response to the Basel Committee's March 12 announcement that all financial institution capital levels will need to be raised to increase resilience to future economic and financial stress. Its process aims to increase not only the amounts, but also the quality of capital required; improve the risk coverage of capital structures; and enact supplementary protective measures. Cooperative financial institutions help spread economic risk over a greater number of institutions, said WOCCU. By contrast, existing industry risk-modeling standards have failed to keep large banks from hemorrhaging losses. Smaller institutions, especially member-owned financial cooperatives, hold smaller concentrations of funds, strengthening the global financial network by reducing the risk each institutions poses, WOCCU added. "While we understand the committee's interest in advancing risk modeling, the current crisis may indicate that existing models were not well-developed to begin with, causing many banking sectors to suffer high levels of concentrated risk among few institutions," Grace wrote in a March 13 letter. He noted that no financial cooperatives have been bailed out with taxpayer dollars. According to a 2007 International Monetary Fund study, financial cooperatives in general are more stable than commercial banks, especially considering threats to their viability based on earnings and capital. Basel II means larger entities could hold comparatively less capital than smaller institutions. However, the current crisis has shown many larger institutions are riskier and prone to greater systemic problems, Grace wrote. Failure to rebalance capital requirements within Basel II to appropriate levels will potentially weaken smaller institutions WOCCU's position also emphasized the need for stress-testing procedures appropriate to financial cooperatives. "Unfortunately, it's taken a crisis of the current magnitude to demonstrate our point that credit unions are conservatively managed institutions with lower risk profiles on average than larger commercial banks," Grace said. "Our message to the Basel Committee is essentially, 'Don't punish us--we're not banks.' Modifying the edges of Basel II as the proposals suggest may cover some existing gaps but will do little to lessen the blow of future problems in the financial sector." Capital-level compliance by global financial institutions in response to the announcement will not go under review until 2010 due to the financial industry's current inability to meet the newly defined capital levels. Grace will represent WOCCU at an April 15 meeting with Wellink in Amsterdam to ensure policymakers take into account credit unions' needs. To view the three letters in their entirety, use the link.

Ohio league state awards announced

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COLUMBUS, Ohio (3/20/09)--The Ohio Credit Union League announced winners of its 2009 state awards. Honors were given for political action, chapter effectiveness, youth financial education, social responsibility and marketing (eLumination Newsletter March 18). Award winners are:
* Catherine Herring, CEO, Communicating Arts CU, Cincinnati, and Seven Seventeen CU, Warren--Claude Clarke Political Inspiration Award for an individual and credit union, respectively; * Western Buckeye Chapter and Cincinnati Chapter--Spectacular Chapter Award in Categories One and Two, respectively; * Ohio University CU, Athens--Desjardins Youth Financial Education Award in more than $101 million-asset category; * Kent (Ohio) CU and AurGroup Financial CU, Fairfield--Dora Maxwell Social Responsibility Award, for their fundraising campaign to assist local organizations; and * Members First CU, Cleveland, and AurGroup Financial CU--Cutting Edge Marketing Brilliance Award for agency and non-agency entries.
Winners will be honored April 23-24 at the league’s Zenith09 conference in Cleveland.

Filene seeks sustainability project participants

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MADISON, Wis. (3/20/09)--The Filene Research Institute is seeking participants for a sustainability project involving credit unions. The report, “Sustainability: An Implementation Guide for CUs” by Coro Strandberg, is due out later this year and will provide credit unions:
* A business case for sustainability; * A detailed implementation guide on sustainability strategy; and * Several case studies of U.S. and Canadian credit unions and their experiences in sustainability.
The project is a continuation of research the institute already has presented on the topic. Three credit union case studies also will be included. Space is limited for participation, but all credit unions applying to participate will be able to review and comment on the initial draft of the report. Credit unions also are invited to take a poll for the project by March 27. For more information, use the link.

CU sees change in members defaulting on auto loans

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FORT COLLINS, Colo. (3/20/09)--Norbel CU, Fort Collins, Colo., has noticed a change in the kinds of members that have come into the credit union to give up their car keys. “Good members are having problems,” Ed Bigby, Norbel CEU CEO, told News Now. “My biggest fear is when a good member loses his job and the ability to pay.” Norbel has had five vehicle repossessions this year. However, its delinquency rates remain low, because the credit union has lended very conservatively, Bigby said. To help out “good” members who have endured financial hardships, such as a job loss, Norbel is offering a temporary forgiveness program. The program is offered on a case-by-case basis to members who have defaulted on loan payments. Under the program, Norbel will accept a loan payment from a member--anything he or she can afford--and put “everything back to principle,” Bigby said. “We forgive the interest.” About 12 members are using the program, which is offered “judiciously” because the credit union doesn’t want half of its loan portfolio on it. But although the credit union gives up some revenue by forgiving interest on loan payments, it’s creating member loyalty and gaining public relations, he said. A field examiner from Colorado recently asked Norbel to send a copy of the program to him. This could indicate that there are other credit unions in the area that could use a similar tactic, added. Norbel has 6,500 members and $115 million in assets.

Outreach survey reveals Ohio CUs dedication

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COLUMBUS, Ohio (3/20/09)--Not only do Ohio credit unions provide financial products and service to members, they also strive to improve people’s lives, according to the Ohio Credit Union League’s 2008 outreach survey (eLumination Newsletter March 18). The survey revealed:
* Two out of three Ohio credit unions provide free financial education in their communities, primarily to adults (57%), high school students (45%), and elementary students (37%); * Roughly only 20% offer financial education to college students; * The top four topics taught were budgeting (58%), checking and savings basics (48%), identity theft (47%), and credit concepts (45%); and * About 67% of Ohio’s credit unions incorporate the movement’s social mission into their strategic planning processes, and 39% offer special savings and alternative loan programs.
The report will be used as an advocacy tool to strengthen legislative, media and regulatory initiatives that impact credit unions, said the league. The results were mailed to all Ohio credit unions. For more information, use the link.

CU System briefs (03/19/2009)

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* JEFFERSON CITY, Mo. (3/20/09)--St. Louis-based Southpointe CU President Brian Eyestone visited with state lawmakers in Jefferson City March 9 to discuss bills impacting credit unions. He visited Sen. Jim Lembke (R-1), Rep. Sue Schoemehl (D-100) and Rep. Walt Bivins (R-97). Eyestone thanked Lembke for working with credit unions on a bill that would help protect a credit union's lien interest on motorized vehicles. State lawmakers are on their annual spring break and in their home districts through Monday. The Missouri Credit Union Association will have its Annual Advocacy and Business Meeting March 30-31 in Jefferson City (The Missouri difference March 18) … * DOVER, Del. (3/20/09)--Dover FCU CEO David Clendaniel and a team of 11 credit union representatives met in Washington, D.C., with Delaware's newest U.S. senator, Sen. Ted Kaufman, to discuss credit unions' viewpoint on several key bills preparing for a vote. The senator challenged Clendaniel on credit unions' tax exempt status, which gave Clendaniel the opportunity to explain the unique structure and philosophy of credit unions. He gave examples of how credit unions serve their community and invited the senator to visit Dover Federal branches to meet members and learn first-hand the credit unions difference. Also at the meeting were Philip Lynch, Dover Federal vice president of finance; a representative from the Delaware Credit Union League, and executives and volunteers from several other Delaware credit unions … * COLUMBUS, Ohio (3/20/09)--The small credit union 50% discount for the Ohio Credit Union League's ZENITH09 conference has been expanded so more leaders from small credit unions can attend. Now, credit unions with assets of $20 million or less can register an unlimited number of staff and volunteers to attend for half price, according to the league's eLumination Newsletter (March 18) … * SUITLAND, Md. (3/20/09)--Andrews FCU's overseas headquarters and Wiesbaden, Germany, branch received the 2008 Bronze Award for outstanding participation in the Combined Federal Campaign Overseas, an annual fundraising drive that allows all federal government personnel serving overseas, military and civilian, to donate to authorized charities. From left are: Gen. Carter F. Ham, commanding general, USAREUR and 7th Arm; Georgia Dismukes, Andrews Federal overseas training and development administrator; Alfred Johnson, Andrews Federal vice president of overseas operations; and Diane M. Devens, director, IMCOM-E. (Photo provided by Andrews FCU) … * WARMINSTER, Pa. (3/20/09)--Representatives from Freedom CU spoke to educators Saturday at the PFT Educational Conference: Programs for Teaching, sponsored by the Philadelphia Federation of Teachers Health and Welfare Fund. Kirby Wood, vice president, member services, and Shawn Murphy, new business development representative, presented the credit union's Learn & Earn program, a financial literacy program that uses the Internet to teach basic banking functions, allows students to open an online account and offers monetary incentives. They explained how the program incorporates financial literacy lessons taught in classes with the student's first banking account. Here, Murphy, second from left, discusses the program with educators from the Philadelphia School District. (Photo provided by Freedom CU) …

CU System briefs (03/18/2009)

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* MERIDEN, Conn. (3/19/09)--Contributions from strategic business partners, the Connecticut Credit Union Solutions Foundation and the Credit Union League of Connecticut's dues-discount program have raised $25,000 for the league's Small Credit Union Support Fund, exceeding its goal. "It's heartening to know that a variety of financial services-related organizations understand the important role small credit unions play in this industry," said league President/CEO Tony Emerson. He noted that "especially with the current challenges credit unions are facing, small credit unions continually seek to serve their members faithfully day after day, member by member. Any support we can provide them strengthens the entire credit union movement" … * RALEIGH, N.C. (3/19/09)--Members of State Employees' CU (SECU), via the SECU Foundation have provided a $750,000 grant to Home Health and Hospice Care Inc. for the expansion of Kitty Askins Hospice Center in Goldsboro, N.C. The grant will be used to expand the center by 13,000 square feet, doubling its facilities from 12 beds to 24. The new wing will be named SECU House at Kitty Askins … * SOUTHBRIDGE, Mass (3/19/09)--Southbridge (Mass.) CU has named Jeffrey Davenport as president/CEO to succeed Thomas J. Smalarz, who will retire March 31. Smarlarz had been with the credit union for 35 years, serving the last 15 as president/CEO. During his tenure, assets grew to $166 million from $102 million. Davenport has been a regional sales manager for CUNA Mutual Group the past six years. Before that, he headed County FCU, Caribou, Maine and held lending and management positions at two banks. He also was director of the Massachusetts Share Insurance Corp. (Worcester Business Journal March 17) … * VIRGINIA BEACH, Va. (3/19/09)--Carl M. Atkinson, founding board member (emeritus) of Chartway FCU, died Sunday in Virginia Beach. He was 82. Atkinson served on the $1.206 billion asset credit union's board for 44 years and was employed with M&T Co. He is survived by his wife, three sons, seven grandchildren, three great-grandchildren, and seven half brothers and sisters (The Virginian-Pilot & The Ledger-Star March 16) …

State Treasurer CU discuss Better Choice on NBC

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HARRISBURG, Pa. (3/19/09)--Pennsylvania's Credit Union Better Choice payday loan alternative was the topic of a news report featuring the state's treasurer and a credit union on Philadelphia's NBC 10, according to the Pennsylvania Credit Union Association. The payday loan alternative was developed in conjunction with the state Treasury Department. The program features State Treasurer Rob McChord and Anthony Silvi of Warminster-based Freedom CU describing how the program is helping people avoid payday lenders. To view the video, use the link.

Poland CU campaign Dont blame us were not banks

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WARSAW (3/19/09)--Poland's credit unions, called SKOKs, have launched a new campaign promoting the credit union difference and aimed at convincing consumers that they are not responsible for the problems experienced by the country's banks. The campaign's motto: "Don't blame us, we are not banks." The campaign emphasizes that savings cooperatives and credit unions are based on family capital and that SKOKs offer unbeatable deposit rates (Polish News Bulletin March 18). The SKOKs hope to attract individual members and small firms having difficulty finding financing from banks in the current economy.

Michigan Financial Literacy Challenge has lawmakers interest

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PLYMOUTH, Mich. (3/19/09)--More than two dozen lawmakers have expressed interest in partnering with credit unions for the Michigan Credit Union League’s (MCUL) Financial Literacy Legislative Challenge, an April initiative that pairs lawmakers with schools and credit unions in their district for financial education events. Credit unions holding events in April can contact MCUL, to be matched with a legislator. About 27 state legislators have responded (Michigan Monitor March 16). In its sixth year, the program helps build relationships between credit unions and lawmakers through collaborative financial education presentations to students or visits to student-run credit union branches. The challenge takes place throughout April to coincide with National Financial Literacy Month. The third week in April is National Credit Union Youth Week as well as Michigan's Money Smart Week--an initiative of the Federal Reserve Bank of Chicago.

CUs functioned fine without a biz cap says Schenk

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RALEIGH, N.C. (3/19/09)--Credit unions were operating very well before 1998 when Congress mandated a cap on business loans at 12.25% of a credit union’s total assets, said Mike Schenk, senior economist at the Credit Union National Association (CUNA). “For almost 100 years, credit unions have been making business loans,” Schenk told the Raleigh, N.C., News & Observer Wednesday. “For all but 10 of those years, there wasn’t a cap.” If the cap were removed, credit unions nationwide could loan an additional $10 billion to businesses, according to CUNA estimates, the newspaper said. Living under the cap is causing a lot of frustration for Coastal FCU, Pete VanGraafeiland, vice president of business lending, told the newspaper. Coastal turned down more than $30 million in loans during the past 90 days because it hit the limit. Coastal is a $2.087 billion asset, Raleigh, N.C.-based credit union. Small-business owners are “the people who are beating on our doors” because their lines of credit have been cut back or canceled by other financial institutions, VanGraafeiland told the paper. “It’s kind of heart-rending,” he added.

NCUF federation post foreclosure survival report

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WASHINGTON (3/19/09)--The National Credit Union Foundation (NCUF), in partnership with the National Federation of Community Development Credit Unions, has posted a report for credit unions to address one of their most pressing issues: Helping Members Avoid or Survive Foreclosure. The report is free on the REAL Solutions Impact Center. Use the resource link. “Foreclosures are having a devastating impact on communities,” Mark Lynch, REAL Solutions field coach and U.S. Department of Housing and Urban Development (HUD) technical assistance consultant, told 30 state credit union league liaisons on the latest REAL Solutions conference call. To gauge the magnitude of the problem: One million families--one out of every 200 homeowners--will enter foreclosure this year, according to the Mortgage Bankers Association. Lynch stressed the importance of credit unions developing a proactive communications strategy. “Getting the correct information and education to members and potential members at the right time is vital,” he emphasized. “The key message to credit unions is to be proactive. Don't wait for members to come to you for assistance and advice; then it may be too late. If a member has a delinquent mortgage with your credit union, certified housing counselors should work to determine the best way for the member to stay in the home. Most often, this is the best option for both the member and the credit union.” Some credit unions will refinance mortgage loans with up to 80-year terms if it will help members lower their monthly payments enough to keep their homes. But rather than expecting members to pay out those longer terms, credit unions plan to reduce the terms once members can afford their regular payments again. Bucky Sebastian, CEO of GTE FCU, Tampa, Fla., explained how this works in a video. (Use the second resource link.) “Every credit union can help its members with basic, accurate information and appropriate referrals, even if the credit union is not a mortgage lender,” said Terry Ratigan, senior consultant and coordinator of the federation’s national housing counseling program. “Many members in distress will turn to their credit unions as trusted advisors, so every credit union must be prepared to connect its members to the appropriate resources.” Despite credit unions’ desire to help their members, the federation warned that credit unions should not try to serve as counselors unless they are trained and certified to do so. “Because of the complex legal issues that arise with potential defaults, and because policies and workout options are changing almost daily, credit unions should not give individual advice,” cautioned Lisa Williams, director of the federation’s CDCU Mortgage Center LLC. “Doing so could put the credit union itself at risk.” Williams recommended that credit unions identify housing counseling agencies in their communities that have been approved by HUD, and refer members to those organizations. Other resources for credit unions are being developed by the federation, whose website includes a new CU Homeownership Counseling clearinghouse to help credit unions find local, certified housing counselors. (See resource link.) The site includes a list of certified credit union housing counseling agencies, links to the national HOPE Now hotline, scripts to help explain the latest federal loan modification programs, and more. As a HUD-approved National Housing Counseling Intermediary, the federation can assist credit unions and affiliated non-profits interested in becoming approved counseling agencies. Once approved, credit unions can apply for federal grants to support the cost of counseling activities. For more information, check the federation’s website or contact Ratigan at tratigan@cdcu.coop or 800-437-8711, ext. 251.

CUs warn of rash of automated phishing calls

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MADISON, Wis. (3/19/09)--Several credit unions nationwide are reporting an uptick in the number of automated phishing calls seeking to obtain personal information from members. Some recent incidents:
* Several Wisconsin credit unions report scam artists are using automated phone calls with recordings that ask members to divulge personal financial information, according to the Wisconsin Credit Union League. Phishing calls reported Tuesday claimed the member’s credit and/or debit card had been locked and asked for the card number to unlock it. The Credit Union National Association also noted variations on scam tactics and said unsolicited requests for personal information have circulated under the subjects: “Account Deactivation,” “Account Status Alert,” “Changes to Terms and Conditions,” and “Irregular Activity.” * Brazos Valley Schools CU, Katy, Texas, reports its members are being inundated with phishing e-mails saying the recipient’s debit card or ATM card has a problem. Other messages say illegal access to the cards was attempted (SPAMfighter March 18). * Several people in Tennessee said they received calls after normal business hours supposedly representing a credit union. The calls included instructions to use the keypad of a telephone to enter the customer’s debit card number. The caller told the recipient that this would help clear up problems with the customer’s account (timesfreepress.com March 17). * A phish that looks like an official notice from a Virginia credit union tells members that their primary e-mail address registered at the local credit union was changed on March 16. They are told to sign on to an Online Account Access and to correct it. * GPO FCU, New Hartford, N.Y., posted an alert for members that said: “There’s a telephone scam going on, and the callers want to rip you off. We’ve heard from people who received a call around 8 p.m. Monday. It was from an automated message that claims their card has been compromised and then asks [recipients] to enter their card number and personal identification number.” The credit union tells members that the call is bogus and to hang up (The Real Deal-News Channel 9 WSYR March 11). * Scam artists are promoting a fake credit union on the Internet, dubbed Communal CU in Dearborn, Mich. The Michigan Office of Financial and Insurance Regulation (OFIR) ordered a cease-and-desist order for the bogus credit union. OFIR officials found an empty storefront when they visited the Dearborn address for the credit union (Detroit Free Press March 12). * Several Utah credit unions said their members have been targets of a new “phishing” or “smishing” scam after several Utah-based accounts were accessed in February for fraudulent transactions in California. Identity thieves, posing as credit unions, sent out fake alerts to members through automated phone calls and e-mail and text messages. The message asserts the member’s account has been suspended and tells the member to verify account information to reactivate the account (StandardNET March 1). * Using automated phone calls, scammers attempted to elicit personal information from members of Consumer CU, Greeneville, Tenn. “No one is making authorized calls from Consumer CC or would ever do so,” Consumer President Sam Miller told media. “Please give no one your account number. We already have it.” The credit union received about 100 calls from members contacted by the automated calls (GreenevilleSun.com March 17). * Several Vermont financial institutions, including Central Vermont Medical Center Inc. CU, Barre, Vt., have been referenced in a spate of fraudulent calls, according to Vermont State Police. An automated messaging system claims the call recipient’s credit card information has been accessed. The message then asks for credit card information to fix the problem, police said (Burlingtonfreepress.com March 16). * Dozens of members of Greylock FCU, Pittsfield, Mass., were the target of a phone scam last weekend, but few fell for it, according to Greylock Senior Vice President John Bissell. A pre-recorded message claiming to be the credit union sought credit card account and personal identification numbers to verify an alleged claim of fraudulent purchases against the member’s card. Greylock issued an alert to its weekend answering service and called in staff to deal with members who had concerns or who had given out their credit card numbers (The Berkshire Eagle March 16).

More consumers underwater on auto loans

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MADISON, Wis. (3/19/09)--As the economy continues to struggle, more credit unions are reporting an increase in vehicle repossessions, as members discover they owe more than the car is worth. MidFlorida CU, Lakeland, Fla., this week opened MidFlorida Wholesale Auto Sales to sell some of its repossessed vehicles. The credit union had previously run an auto sales service that was opened one day per week, but expanded to five days a week. The credit union sees about 40 to 50 repossessions per month, up from about 30 to 40 last year, Kevin Jones, MidFlorida CEO told News Now. Jones said he frequently talks with the credit union’s collection manager, and says the cars are repossessed because of divorce, death, or lost jobs. “Our repo numbers are pretty modest for our asset size,” he added. MidFlorida has $1.2 billion in assets. MidFlorida is not having many problems with delinquent home loans, so it’s not seeing as much spillover from the mortgage market’s assets on the auto loan side, Jones said. Colorado’s Norbel CU and Public Service CU told The Coloradoan that the number of cars they have taken back has increased this year. Norbel took back 15 cars last year, and had five repossessions in January and February, Norbel CU CEI Ed Bigby told the newspaper (March 16). Public Service CU, Denver, also has experienced a spike in repossessions. But credit unions are still making loans, which is good news, Public Service CU President/CEO David Maus told the newspaper. He added that auto dealers may have to close their doors if there weren’t credit unions to finance vehicles. Jim Craft, director of lending, Oregon Community CU, told the Associated Press that the credit union created a car lot recently for repossessed vehicles. Many members have lost their vehicles because of the recession, and many were “great members,” he told the AP (March 7). SELCO CU Director of Lending Jim Mau told the Associated Press that the credit union’s auto loan defaults were 0.5%, but the figure increased to 0.72% last year. Though defaults have risen, it’s expected with the economy, he said. The credit union still wants to make loans, he added. The AP also noted a statistic from the American Financial Services Association that says credit unions or other lenders lose about $8,000 on each repossessed vehicle. According to Trans-Union, the national 60-day auto delinquency rate edged up between the third and fourth quarter of 2008 to 0.86% from 0.80%. However, 14 states experienced a drop in year-to-year rates, compared with a national 8.86% increase.

CUNA Council honors three CU women

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MADISON, Wis. (3/19/09)--Three women were honored for their credit union marketing and business development achievements at the CUNA Marketing and Business Development Council (CMBDC) Conference last week in San Diego. Mary Olson, vice president of marketing for Delta Community CU, Atlanta, was the 2009 Hall of Fame inductee. She led Delta Community through a rebranding effort to match its look and message with the credit union’s new community charter. She also helped launch an aggressive branch expansion effort and a “Standing Strong” certificate of deposit promotion that brought in $278 million and 1,274 new members in six weeks. A charter member of CMBDC, Olson served as chair and vice chair of the executive committee, served on her league’s cooperative advertising committee and as a board member for the financial literacy organization, Operation Hope. She also has held positions with CUNA Mutual Group, Georgia Credit Union Affiliates, and the Credit Union National Association. Kathryn Davis, senior vice president of marketing for Xceed Financial CU, El Segundo, Calif., won the Marketing Professional of the Year Award. Davis headed a rebranding and name change that refocused the credit union and sought to reach out to working people in the credit union’s community. She used innovative e-mail, Web strategies and guerilla marketing techniques that connected with the audience. Davis has expertise as a conference speaker and is a member of the Filene Research Institute’s i3 team dedicated to stimulating the development of new ideas and innovations for credit unions. Nancy Hutchinson, senior vice president of marketing and business development for Minnesota Power Employees CU, Duluth, Minn., was presented the Business Development Professional of the Year Award. During her 12-year tenure at her credit union, Hutchinson developed programs that increased membership by 41% and more than doubled asset size. She also introduced a model to increase membership penetration in select employee groups, and created branding strategies, a new website and a youth financial literacy program for her credit union. For more information on the CMBDC awards, use the link and choose the appropriate links on the “Events” pull-down menu.

Top 10 INews Now Istories for February

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MADISON, Wis. (3/19/09)--Here are the Top 10 News Now stories most requested by readers during February. Use the link to review the entire story online. 10. House panel OKs bill with permanent insurance increase WASHINGTON (2/5/09)--The House Financial Services Committee Wednesday approved H.R. 786, a bill designed to make permanent the $250,000 deposit and share insurance increase enacted as part of the Emergency Economic Stabilization Act of 2008. 9. CUNA audio conference: NCUA must explore options WASHINGTON (2/5/09)--Credit Union National Association (CUNA) President/CEO Dan Mica told participants on an audio conference call Wednesday that while CUNA recognizes federal regulators had no choice but to take action on behalf of the corporate credit unions, CUNA opposes the means chosen to fund the corporate credit union stabilization. 8. Corporate CU Task Force backs CUNA alternatives WASHINGTON (2/13/09)--The Credit Union National Association (CUNA) Corporate Credit Union Task Force Thursday reaffirmed strong support for using the Central Liquidity Facility (CLF) and TARP funds as a back up to help fund corporate credit union liquidity. 7. NCUA approves stabilization efforts for corporates ALEXANDRIA, Va.(2/29/09)--The National Credit Union Administration (NCUA) Wednesday took steps to "enhance and support" the corporate credit union system. 6. New data breach hits another card processor NEW YORK (2/24/09)--Another payment processor has been hit with a data breach that is affecting credit unions and banks. It is the third major breach of a card processor since December and comes on the heels of what may be the largest data breach in history, the Heartland Payment Systems breach. 5. Cramdown provisions in Obama's foreclosure plan WASHINGTON (2/19/09)--The Credit Union National Association (CUNA) is reviewing President Barack Obama's Homeowner Affordability and Stability plan, which was released Wednesday and includes a provision for mortgage cramdowns. 4. Alternatives to premium assessment urged by CUNA WASHINGTON (2/2/09)--Federal regulators must consider alternatives to their plan to assess a share insurance premium to help fund a stabilization plan for corporate credit unions, the Credit Union National Association (CUNA) urged. 3. New info required in March 2009 call report WASHINGTON (2/4/09)--Credit unions will be required to supply more information on delinquencies, foreclosures, and repossessions on the quarterly form 5300 "call report"-- which is no surprise given the current market pressures. 2. CUNA site compiles NCUA stabilization program info WASHINGTON (2/6/09)--The Credit Union National Association (CUNA) has compiled information that may be useful to credit unions regarding the National Credit Union Administration's (NCUA) Corporate Stabilization Program. 1. New: CUNA concerned about costs of NCUA corporate plan WASHINGTON (1/30/09, UPDATED 10:30 a.m. ET)—The Credit Union National Association (CUNA) said that is does not welcome federal regulators' action to support corporate credit union liquidity by extracting a high price from credit unions, but does understand the need for the agency to act. To receive News Now headlines on your desktop free each morning, simply enter your e-mail address in this page's upper-left box. Click on the resource link below to learn more.

CUSOs foundation to help staff with hardship

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ST. PETERSBURG, Fla. (3/19/09)--PSCU Financial Services has created a foundation to enable its employees to help colleagues overcome financial hardships. The PSCU Financial Services Employee Hardship Foundation will be funded by voluntary employee contributions through check or payroll deduction. Any employees with at least 90 days of service can apply to the foundation for grants to cover hardship expenses from illness, loss of income, benefits, repossession of a primary vehicle or foreclosure. A team of employees will review applications and make funding decisions. “The goal of this foundation is to reduce the stress created by financial emergencies and to ensure that our employees know they can rely upon each other in times of need,” said David J. Serlo, president/CEO, PSCU Financial Services. PSCU is a credit union service organization serving more than 1,300 financial institutions nationwide.

New CUNA scholarships to defray training costs

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MADISON, Wis. (3/19/09)--As the current economy forces many credit unions to trim their training budgets, the Credit Union National Association (CUNA) announces a new scholarship program to cover tuition for its on-site schools and conferences. To be eligible, applicants must:
* Be an affiliated credit union employee or volunteer; * Demonstrate a financial need; and * Stay at the designated conference hotel.
Scholarship applications and supporting materials for eligible CUNA schools and conferences must be received by the CUNA Scholarship Committee at least 45 days prior to the program. For more information, use the link.

Great Basin FCU to close Sparks branch

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RENO, Nev. (3/18/09)--Reno-based Great Basin FCU, which has four branches, will close one on April 15. The branch, located at a shopping center in Sparks, is two miles from a Sparks Crossing branch that opened last year. The credit union said that,--coupled with projected slow growth--contributed to the decision (RGJ.com March 16). The credit union told members in a letter that its current size and expectations of minimal growth due to a declining loan demand mean closing the branch as soon as possible so it could maintain the best rates and free structure for members, said the article. Members who used the branch can use the branch's ATM until further notice. The branch operated for nearly two decades. Two employees will be let go, while others will be relocated. The credit union emphasized that it remains financially strong, well-capitalized and continues making sound and thoughtful decisions to ensure success.

IHuffington Post I writer Worst CU better than best bank

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WASHINGTON (3/18/09)--The worst credit union is better than the best bank when it comes to pricing loans and other products, according to an article in Huffington Post (March 17). That's a fact, says consumer advocate Remar Sutton, who wrote the item in response to an article that asked, "Why aren't credit unions taking advantage of the moral mess banks are drowning in?" The real question should be: "Why aren't you joining a credit union right now?" said Sutton, former Credit Union Magazine columnist on auto lending and author of Don't Get Taken Every Time. Credit unions feel obligated to find members the cheapest product rather than the most expensive, he says, adding, "You cannot say that about virtually any bank and definitely not about any for-profit 'specialty' loan company." Credit unions know the financial well-being of the member has a direct impact on the well-being of the credit union. he says. Credit unions aren't reacting as a group to the bank crisis for "a very charming reason. They aren't slick marketers on the whole," Sutton says. Small credit unions have smaller marketing budgets that are targeted to their members, not the general public. And some are involved in the most important aspect of recovery from the economy--teaching young people about money and the realities of the free enterprise system. To read the entire article, use the link.

Sunset data breach bills in Texas legislature

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AUSTIN, Tex. (3/18/09)--Key Texas Sunset bills that must pass the state legislature so the Texas Credit Union Department can continue operating until Sept. 1, 2021, have been filed, according to the Texas Credit Union League. State Sen. Craig Estes (R-Wichita Falls) sponsored Senate Bill 1012, and the identical House companion bill, House Bill 2735, is sponsored by State Rep. Dan Flynn (R-Canton). The bills embody the recommendations of the Texas Sunset Advisory Commission. The recommendations include continuation of the Texas Credit Union Department for an additional 12 years. Two areas of concerns--elimination of the department’s ability to file consolidated Internal Revenue Service 990s (which save credit unions $500 to $2,000 in filing costs) and new authority to impose monetary fines--are not in the bill. These concerns were raised by the league during the hearing process. The bill next heads to the Senate Committee on Government Organization, and the league is organizing key contacts for those senators. “This bill is our top priority,” said league President/CEO Dick Ensweiler. “We are hopeful that it will move through the process quickly.” Another measure of interest to the state’s credit unions involves data breaches. The Texas House Business & Industry Committee held a hearing on data security breaches on March 9, and meetings are underway with stakeholders attempting to negotiate a bill. Texas banking trades joined with the league in publicly supporting the legislation at the hearing, said the league. The hearing went very well, said the league, with lawmakers receptive to the view that merchants had a duty to safeguard the sensitive personal information they collect from plastic cards. The league continues to attend stakeholder meetings to negotiate a bill in order to move the legislative process forward. “We are especially grateful to the bill’s author and the Banking & Industry Vice-Chair State Rep. Gary Elkins (R-Houston) for his unwavering support for finding a solution to the data security breach issue,” said Ensweiler. Gary Davis, CEO of Chocolate Bayou FCU, Alvin, testified for the league, noting the hundreds of thousands of cards compromised at Texas credit unions alone in the Heartland Payment Systems breach.

Biz Kid on radar at two education conferences

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FEDERAL WAY, Wash. (3/18/09)--"Biz Kid$," the television program underwritten by America's Credit Unions to teach youth about money, was on the radar of educators at two recent conferences in New York City. According to Jamie Hammond, Biz Kid$ executive producer, the program was discussed at "Learning First Alliance," an invitation only meeting of educators, principals and education association directors from all 50 states, and at WNET PBS New York-hosted "The Celebration of Teaching and Learning," which registered between 7,500 and 8,000 teachers. At the first conference, said Hammond in an e-mail, "Biz Kid$ was on their radar, and they asked our education outreach director from WXXI and myself to attend and talk to them …It was very interesting …They feel Biz Kid$ teaches 21st Century skills that every child needs to learn." At the second conference, Biz Kid$ was the only PBS series invited to have a booth in the PBS Neighborhood at the conference's tradeshow. The other seven PBS booths emphasized teacher and documentary distribution services. "Over 1,000 teachers visited our booth," Hammond said. "Without exception, they were excited about Biz Kid$ and wanted to use it in their classes." The booth used the same banner that the group displayed at the Credit Union National Association's Governmental Affairs Conference in February. It included the America's Credit Unions and the program's logos with the message, "Working together to help kids to learn how to manage the business of their lives." Hammond said they shared received "very positive" responses from attendees about credit unions' involvement. "Many teachers are members of teacher/educational credit unions," she said, "and they were really happy that we are working together to teach kids financial literacy, entrepreneurship and life skills." She added that 387 educators answered a short survey and said they intended to use the program in their classrooms. That intended use, if materialized, would reach 48,338 students, said Hammond, who noted that librarians at the conference also said they wanted the series for their libraries. Other organizations, such as the Council for Economic Education and the National PTA also were interested. PTA President Jan Harp Domene invited them to present at that organization's conference in June. A producer from PBS "News Hour" also approached Hammond about developing a segment about Biz Kid$ for "News Hour" either on air or on the website. Biz Kid$ is broadcast on more than 334 PBS stations, roughly 97% of the U.S. public television market. It is underwritten by a coalition of America's Credit Unions, comprising more than 150 credit unions, credit union foundations and other supporting organizations. The largest funder is the National Credit Union Foundation.

Mortgage broker bankruptcy hearing creditors set

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NEWARK, N.J. (3/18/09)--A federal bankruptcy court in New Jersey took two actions related to the U.S. Mortgage Corp. (known as CU National Mortgage) bankruptcy case: it appointed seven credit union representatives to an Unsecured Creditors' Committee and set a hearing date for May 11. U.S. Mortgage filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of New Jersey, listing more than $200 million in debts to Fannie Mae and 19 credit unions, among others (News Now March 2). Nearly 300 creditors are listed in the petition, with 19 credit unions among the top 20 unsecured creditors. According to documents filed with the court March 11, the Unsecured Creditors' Committee includes:
* Chairperson, Chris Conway, Educational Systems FCU, Greenbelt, Md. * Lisa Mingoia, Suffolk FCU, Medford, N.Y.; * Robert N. Squillante, Picatinny FCU, Dover, N.J.; * Alfred Scipio, Treasury Department FCU, Washington, D.C.; * Harry R. Jacobson, Pinnacle FCU, Edison, N.J.; * Ann M. South, Novartis FCU, East Hanover, N.J.; and * Ronald P. Roy, Energy FCU, Rockville, Md.
Attorney for the committee is Carollyn Callari of Venable LLP, New York, N.Y. According to documents filed Monday, a hearing on a motion for relief from a stay and order granting Sovereign Bank relief from an automatic stay will begin at 11 a.m. EDT on May 11 in Newark.

CU places no hats policy on hold

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VIENNA, Va. (3/18/09)--A credit union that received objections based on religious grounds to its "no hats, no hoods, no sunglasses" policy has suspended the policy until its officials can decide how it could be applied fairly. The policy is popular among many credit unions and other financial institutions because it acts as a robbery and identity theft deterrent. Navy FCU told employees to stop enforcing the new policy, according to a memo obtained by The Washington Post (March 17). The Post said the memo tells employees not to approach anyone wearing the items, but also says not to remove the signs prohibiting the items. The $36.5 billion asset Navy Federal had complaints from at least two Muslin women wearing Islamic head scarves who were pulled out of line and told they had to be served in a back room at branches in Maryland and California. The head scarves did not cover their faces, and the credit union said they were clearly identifiable (News Now March 12, March 11 and Feb. 4). Putting the policy on hold will enable the credit union time to determine training needs to ensure the policy is enforced consistently.

Diamond Award winners honored at council conference

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MADISON, Wis. (3/18/09)--Spelled in all lowercase, riverset cu in Pittsburgh was named “Competition’s Best”--the highest “Best of Show” award in the CUNA Marketing and Business Development Council’s Diamond Awards competition. The winners were acknowledged during the council’s 16th annual conference, held Wednesday through Sunday in San Diego. Entered in the Branding/Corporate Identity category, riverset underwent a branding transition centered on its name change. The $93.3 million asset credit union sought to increase its electronic audience and create traction for its website--riverset.com-- among members and the underserved community. Also, riverset hoped to attract more young people and those that share the credit union philosophy. This year’s awards competition received nearly 1,200 entries. Judges awarded four entries as Best of Show, along with 125 Diamond Awards and 198 Awards of Merit. Other Best of Show honorees included:
* Best Association Entry: Florida Credit Union League, Tallahassee, Fla., for its league marketing campaign, “Your Porthole to Credit Union Growth and Longevity,” promoting the league’s annual convention as the premier networking opportunity for Florida credit union executives. The campaign also advanced cooperative efforts toward the common goal of securing a place for credit unions within the financial services industry; * Best Use of Art: DHCU Community CU, Moline, Ill., for its “13th Avenue,” entry in the Retail Merchandising category. The artwork for the $358 million asset credit union was designed to create a product-focused sales environment to motivate current and potential members to use the credit union as their financial partner; and * Best Use of Humor: Community Choice CU, Johnston, Iowa, for its “Don't Dance Around Your Bills” television spot. The spot for the $224 million asset credit union created a buzz for the “Bills” marketing campaign while growing home equity line of credit (HELOC) volume. The campaign surpassed its $3.5 million goal and generated $4 million in HELOCs.
The Diamond Awards, presented for credit union marketing and business development, feature 34 categories, ranging from direct mail and website marketing to public relations and political action. Judges evaluated entries based on strategy, design and production, creative concept, copy and communication, and results. For a complete list of award winners, use the link.

N.J. state funds legislation clears Senate 37-0

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TRENTON, N.J. (3/18/09)--Legislation to temporarily expand the range of investment vehicles for New Jersey Cash Management Fund and state pension fund moneys so credit unions have equal footing with banks passed the Senate Monday, 37-0. The legislation (S-2552), sponsored by Senate Majority Leader Steve Sweeney (D-3), authorizes the director of the state Division of Investments for the funds to invest in any obligation guaranteed by either the Federal Deposit Insurance Corp. (FDIC) or the National Credit Union Share Insurance Fund (NCUSIF). Existing statutes do not recognize NCUSIF insurance. Similar to Government Unit Depository Protection Act of 1970 (GUDPA) legislation pending in both state houses, S-2552 marks only the second time it's been proposed that credit unions be given equal footing with FDIC-insured depositaries for state and local government funds. Assembly Financial Institutions and Insurance Committee Chairman Gary Schaer (D-36) introduced a companion bill, A-3817, in the Assembly earlier this month. However, Schaer held the measure just before it was to be considered by the Assembly Appropriations Committee last week. The New Jersey Credit Union League submitted a formal statement of support to the Senate committee and will do the same on the Assembly side when consideration is rescheduled. Although they have not filed formal statements or testified, both the New Jersey Bankers Association and the New Jersey Business and Industry registered their support when the Senate committee considered the bill. They are expected to do the same for the Assembly bill, said the league. The legislation is intended to spur economic growth by creating additional lending capacity among New Jersey depositories, enabling them to make more and less expensive capital available to small businesses and individual borrowers. Sen. Sweeney is sponsor of legislation to amend GUDPA to enable credit unions to become eligible depositories for New Jersey's counties, school boards and municipalities as well. The league expects the municipal deposits measure, pending in both houses, to receive committee consideration when the legislature returns from its annual budget break in early June.

Are CUs better than banks topic on Philly TV

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PHILADELPHIA (3/18/09)--It is worthwhile for consumers to consider the advantages of being a member of a credit union versus being a bank depositor, a financial expert said on a Philadelphia Fox TV affiliate. Although credit unions are a “member-only type of organization,” they are community based, and there are many ways available for consumers to join them, Joe Murray of First Financial Group, said on Fox TV Station 29. “It’s a totally different experience being a member of a credit union versus being a depositor at a bank,” Murray said. Murray compared rates of loan increases in 2008, loan delinquencies, certificates of deposit and home equity loans of credit unions and banks, showing the advantage credit unions have. Because credit unions keep their loans in their community and know the people to whom they are lending, credit unions experience fewer loan delinquencies than banks, he explained. “Because credit unions are nonprofit, they can give more money back to depositors instead of paying money out in taxes like banks do,” Murray said. “Credit unions are not a bad place to take a look; they do a lot of good things for their members.” “They watch their dollars carefully; they’re very good,” he concluded. To view the TV segment, use the link.

Two CDCUs recognized for community impact

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NEW YORK (3/18/09)--Two community development credit unions (CDCUs) recently received accolades for their innovative work in serving the underserved. Both CDCUs are members of the National Federation of Community Development Credit Unions, which welcomed the recognition
William Bynum (left), CEO, Hope Community CU, Jackson, Miss., is congratulated by Cliff Rosenthal, president/CEO of the National Federation of Community Development Credit Unions, for innovative work in serving the underserved.
for the role that CDCUs play in the lives low- and moderate-income Americans. Hope Community CU, a $68.7 million asset, Jackson, Miss.-based credit union, which serves members in four Mississippi Delta states, is one of the fastest growing CDCUs in the country. The credit union and its non-profit sponsor, the Enterprise Corporation of the Delta (referred to jointly as ECD/Hope), were honored with the Credit Union Times 2009 Trailblazer Award for Outstanding Service to the Underserved. Founded in 1995 to serve a single congregation in Jackson, Miss., Hope Community CU has grown thanks to its partnership with ECD. Beginning with members of a small church and a vision, the credit union grew to nearly $69 million in assets with nearly 10,000 members in low-income communities across Mississippi, Arkansas, Louisiana and Tennessee. A few hundred miles to the north, Gregg Brown, founder and CEO of South Side Community FCU, Chicago-based credit union, was featured
Gregg Brown, founder/CEO of South Side Community FCU, Chicago, was noted by the National Federation of Community Development Credit Unions for a commitment to empowering low-income members in its community. (Photos provided by the National Federation of Community Development Credit Unions)
as one of 15 Chicago Matters Global Visionaries by Chicago Public Radio. Brown also serves on the federation’s board of directors. Founded in 2003, South Side Community FCU serves nearly 1,400 low-income residents in Chicago's South Side community. In four years, the credit union has grown to more than $4.1 million in assets, and provides its members with savings and checking accounts, personal loans, low-cost payday loan alternatives, car loans, financial literacy education and counseling, matched-savings individual development accounts, and a burgeoning youth credit union program. Both credit unions share a common mission and commitment to empower the low-income communities they serve. “ECD/Hope is a leading innovator among CDCUs and community development financial institutions,” said federation President/CEO Cliff Rosenthal. “The collective efforts of the two affiliates have allowed them to expand to serve low-income and minority communities across the entire Mississippi Delta in a very short period of time.” “Similarly, what South Side Community FCU has accomplished in four short years has been tremendous,” Rosenthal said.

Superior CU sues over Norlarco payout

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DENVER (3/17/09)--A Wisconsin-based credit union that had participation loans with Fort Collins, Colo.-based Norlarco CU before it was liquidated is suing the National Credit Union Administration (NCUA) as the liquidating agent for an additional $10.2 million or more the credit union claims Norlarco owed it. Superior Choice CU, based in Superior, Wis., filed the suit in a U.S. District Court in Colorado, on Nov. 5, 2008. It was first reported by The Coloradoan on March 10. In court documents obtained by News Now, Superior Choice said it entered into participation loan agreements with Norlarco in the Florida market but was not told that many of the loans were for investor mortgage loans, instead of the less risky owner-occupied mortgages. In its complaint, Superior Choice also said it was not notified that Norlarco and the builders in 2005 had amended their agreement, releasing First Home Builders from any responsibility to pay off the construction loans if the borrowers defaulted. Superior Choice said it would not have participated in the last two participation loans if it had known this. Norlarco lost more than $50 million on the loans and was placed into conservatorship in May 2007. On Feb. 29, 2008, NCUA placed Norlarco into involuntary liquidation, and NCUA assumed part of the troubled assets as part of a merger agreement in which Denver-based Public Service CU would assume Norlarco's assets and employees. Superior Choice had initiated a lawsuit on June 27, 2007 against Norlarco in the District Court for Larimer County, Colo., and the November lawsuit is a continuation of that suit with the liquidation agent. Superior Choice said it funded more than $22 million total for 112 loans, not knowing 45 of them were investor loans. Of the 112 loans, 40% defaulted, said court records. They represented more than $9.4 million. NCUA has filed a motion for dismissal, saying that Superior failed to file its claims in a timely manner and that the credit union did not exhaust all administrative remedies for each claim.

Biz Kid grants go to 16 PBS stations

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FEDERAL WAY, Wash. (3/17/09)--Sixteen Public Broadcasting Stations have received "Biz Kid$" outreach grants ranging from $7,000 to $4,000 each, for a combined total of $102,500, to extend the television series' reach into communities. The stations and local credit unions partner with volunteers to implement their projects related to financial education. "Biz Kid$" is a television program underwritten by America's Credit Unions and aimed at teaching youths about money. It airs on more than 334 PBS stations--97% of the U.S. public television market. Outreach Extensions, the creator of educational materials for "Bill Nye the Science Guy" and other public television series, developed the "Biz Kid$" curriculum using national financial literacy standards and provided a national campaign to extend the series into the communities through partnerships with credit unions. Eleven Tier 1 grantees received a combined $82,000, or $7,500 each. They and their credit union partners are:
* Iowa Public Television, partner to be determined; * KLRN, San Antonio, partnering with Security Service FCU; * Maryland Public Television, with State Employees CU; * Mountain Lake PBS, with UFirst FCU; * UNC-TV/North Carolina, with State Employees' CU; * Rhode Island PBS, with Navigant CU; * Wisconsin Public Television, with University of Wisconsin CU; * WFYI/Indianapolis, partner to be determined; * WGTE/Toledo, Ohio, with Ohio CU, Glass City FCU, and Great Lakes CU; * WVIZ/ Cleveland, Ohio, with the Ohio Credit Union League; and * WXXI/Rochester, N.Y., partner to be determined.
Five Tier 2 grantees received a combined $20,000, or $4,000 each. They are:
* WETA/Washington, D.C., with State Department FCU; * WEDU/Tampa, Fla., with Suncoast Schools FCU; * WJCT/Jacksonville, Fla., with VyStar CU and Community First CU; * WQLN/Erie, Pa., with Erie FCU; and * WSIU/Carbondale, Ill., with SIU CU.
The funds are from a pool created by the program's national underwriters, a coalition of America's Credit Unions. The coalition includes more than 150 credit unions, credit union foundations, and other supporting organizations. The largest funder is the National Credit Union Foundation.

CUNA Council honors best practice winners

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MADISON, Wis. (3/17/09)--The CUNA Marketing and Business Development Council announced its Best Practices Award winners during its 16th annual conference last week in San Diego. The awards recognize outstanding new marketing and business development approaches with potential for universal application across the credit union movement. Without regard to asset size, judges selected winners based on strategy, process, application and results. This year’s winners are:
* Beehive FCU, Rexburg, Idaho, for its cross-selling system to help it move toward a sales culture. The $130 million asset credit union implemented a system to track employee cross sales, establish goals, and provide incentives. The system helps generate reports that measure activity for individual employees, for one or more branches, and for the entire organization. In just over a year, the new system helped bring in $1.6 million in loans, $2.7 million in deposits, and more than 4,200 additional products and services. * Financial Partners CU, Downey, Calif., for its Marketing 212 program for staff. With only three team members to service all locations, staff, and departments for the $727 million asset credit union, the marketing team created ia Marketing 212 portal linked to the credit union’s Intranet. The portal--a one-stop location for information about marketing and communications--included all internal communications, marketing presentations and forms, current promotions, and more. With its fresh content and prizes for suggestions, the portal’s traffic has been high, and it has decreased calls to the marketing department. * TLC Community CU, Adrian, Mich., for its Merillat Industries newsletter, Creating Your Financial Future. When Merillat Industries announced it would close its Adrian plant in April, TLC acted to helps 221 members employed by Merillat. The $282 million asset credit union partnered with The Taylor Agency investment firm to create the Merillat newsletter. The content focused on TLC’s “People Helping People” philosophy, gave reassurance, highlighted familiar faces, and provided options for employees. TLC also interacted with employees at the plant and analyzed account structures to maintain open communications with employees. The project was successful, and the total cost of the newsletter was $509. With more plant closings likely for Michigan, TLC is looking at future considerations for the project.
For more information on the 2009 Best Practice Award winners or to view PowerPoint presentations of the winning entries, use the resource link.

N.J. budget may raise CU payrollproperty taxes

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TRENTON, N.J. (3/17/09)--Credit unions in New Jersey should expect their payroll and property taxes to increase under the state budget announced by Gov. Jon Corzine, says the New Jersey Credit Union League. Corzine made his annual budget address to a joint session of the state legislature March 4, said the league (Weekly Update March 9). With a deepening recession, rising unemployment, mounting state debt and falling state revenues, the budget touched every sector including government, private enterprise, individuals and not-for-profits such as credit unions. Corzine promised to pump $270 million into the state Unemployment Insurance Trust Fund, but officials said that probably won't be enough to avoid triggering an automatic tax increase on July 1st. The tax is triggered when the fund dips below a threshold measured on March 31. The Labor Department said the fund, which is down to $126.6 million, is paying $75 million a week in claims--nearly double that of last year. State officials indicated a tax increase of about $70 per employee is likely, the league said. A reduction in aid to municipalities also likely will increase real property tax on both homeowners and commercial properties, including credit union facilities, the league said. The state has the nation's highest real property tax.

IWall Street JournalI CUs are safe havens

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NEW YORK (3/17/09)--Credit unions are gaining new stature as reliable sources of lending in the tempest-tossed credit market, says an article headlined "Safe Havens: Credit Unions Earn Some Interest" in Sunday's The Wall Street Journal. "Big banks have become wards of the government while smaller banks are failing at a rate of about one a week," says the article. However, "more and more savers and borrowers are finding a safe harbor in the sleepiest, most unexciting corner of the financial world: credit unions." The article discusses rates on one-year certificates of deposit, home-equity lines of credit and fixed-rate mortgages for both credit unions and banks and provides charts and statistics provided by the Credit Union National Association (CUNA). Mike Schenk, CUNA senior economist, also provides statistics on credit unions' robust loan growth in first mortgages and used-auto loans. In an interview with Stephen Birkelbach, who joined Community First CU in Jacksonville, Fla., three years ago to finance a truck, Birkelbach talks about how he was so impressed with the customer service at the credit union that he moved all his financial business, including the accounts of his local carpet-cleaning business, to the credit union. The article also discusses today's economic environment and notes that although feeling pinched, credit unions have maintained stability. To access the full article, use the resource link.

MarketingBiz Development Council exec committee named

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MADISON, Wis. (3/17/09)--The CUNA Marketing and Business Development Council announced its executive committee and officers during the council’s 16th annual conference last week in San Diego. Anne Legg, vice president of marketing, Cabrillo CU, San Diego, will remain the council chair. Rich Jones, vice president of marketing, Elevations CU, Boulder, Colo., was re-appointed vice chair. Bryn Johansen, director of marketing, First Tech CU, Beaverton, Ore., is the secretary/treasurer. During recent elections for three available seats, incumbents Jones and Johansen retained their seats. Sonya Allen, marketing manager for Pelican State CU, Baton Rouge, La., was elected to the seat formerly held by Sandi Carangi, vice president of marketing and business development for Erie (Pa.) FCU. Other continuing members of the executive committee are:
* Carol Payne, vice president of communications and marketing, California and Nevada Credit Union Leagues; * Susan Miller, business development representative, Delta Community CU, Atlanta; * Rene McKee, vice president of marketing, California Coast CU, San Diego; * Lesley Carrell, vice president of marketing, Fibre FCU, Longview, Wash: * Tyler Disburg, chief administrative officer, Montana First CU, Missoula, Mont.; * Michelle Hunter, senior vice president of marketing and development, CU of Southern California, Whittier, Calif.; and * Kerry Goodliffe Parry, vice president of marketing, Premier Members FCU, Boulder, Colo.

CU takes lead in older-homes-renovation loans

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KANSAS CITY (3/17/09)--CommunityAmerica CU is sponsoring a low-interest, fixed-rate home equity loan program for older homes in Kansas City’s Lee’s Summit area, as part of an expanded MARC Home Remodeling Loan Program. Any house in the area would be eligible as long as its value doesn’t exceed $250,000, according to Mark Dunning, city director of codes administration (The Kansas City Star March 14). The loans for homes in the Lees Summit area should be of particular benefit because many homes are smaller and older, leading residents to seek improvements such as a remodeled kitchen, Dunning added. When the MARC program began several years ago, it asked financial institutions for proposals to improve housing in Kansas City’s inner-ring suburbs, the newspaper said. There was minimal response--except for CommunityAmerica, a $1.636 billion asset, Lenexa, Kan.-based credit union, Jody Ladd Craig, public affairs directors for MARC, told the paper. CommunityAmerica has been very easy to work with, and MARC’s alliance with the credit union has created “a very good partnership,” Craig added. The program made 130 loans totaling nearly $2.3 million during its first two years, the paper said.

Mountain America SBA loans create 700 jobs

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SALT LAKE CITY, Utah (3/17/09)--Mountain America CU helped create more than 700 jobs in Utah last year through Small Business Administration (SBA) loans. The $2.772 billion asset, West Jordan, Utah-based credit union has been a top lender since the inception of its SBA program in 2003, Mountain America said. Some financial institutions--such as Mountain America--have slightly altered their application requirements, but continue to lend. The Wall Street Journal recently noted credit unions’ role in small business lending in an article titled, “Small Businesses Find a New Source for Funding. “We’re one of the only solutions for a start-up, and we want to be a part of that,” Mountain America spokesman Curtis Anderson said in the article. Experts agree that small businesses are the key to job creation, the credit union said. Utah had more than 230,000 small businesses in 2006, and from 2004 through 2005 created 86.5% of the state’s new jobs, according to the most recent statistics from the SBA. “Utah has a strong entrepreneurial spirit,” said Mike Turner, senior vice president of Mountain America’s Business Services. “Small businesses are the backbone of our society and we need to support them and generate capital to keep Utah going strong.”

IN.Y. TimesI mentions two CUs favorably

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NEW YORK (3/17/09)--The “Your Money” column in Friday’s New York Times favorably mentioned two credit unions for helping borrowers with troubled or foreclosed mortgages get back on their feet. Columnist Ron Lieber wrote about The Golden 1 CU, Sacramento, Calif., and Boeing Employees CU (BECU), Tukwila, Wash. “The Golden 1, one of the nations’ largest credit unions, now has a mortgage repair loan for people who have lost a home to foreclosure but want to buy a new one,” Lieber wrote. Aaron Bresko, BECU vice president of lending, is helping create a panel called “How to Lend to the Newly Credit Impaired” for a conference to be held later this year, Lieber added. Lieber quoted Bresko about the rationale for the panel: “Good people have bad things happen to them, so how do you find those people and reach out to them?” Bresko said. “As the year progresses, it’s going to be an emerging market.” The Golden 1 has $6.971 billion in assets. BECU has $8.639 billion in assets.

International Partnerships program adds two CUs

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CORDOBA, Mexico (3/17/09)--Two innovative North American credit unions may pair up through World Council of Credit Unions’ (WOCCU) International Partnerships Program.
Click to view larger image Steve Blakely, Servus CU president/CEO (left), confers with a Caja Yanga financial representative during a transaction with one of the Mexican credit union's rural members.
The proposed partnership would be the first time a Canadian credit union has individually participated in the program with an institution in another country, WOCCU said. Officials from both Servus CU, in Alberta, Canada, and Caja Popular de Ahorros Yanga, S.C. de A.P. de R.L. de C.V., better known as Caja Yanga, in Veracruz, Mexico, agreed to implement the two-way flow of lessons in transaction technology, management strategies and credit union philosophy they will share as part of the new relationship. The fact that Servus CU has assets of nearly $8 billion and Caja Yanga has assets of about $20 million strengthens the relationship through exposure to different approaches they bring to member service, WOCCU said. “As your credit union grows larger it can sometimes be a challenge to maintain your co-operative roots,” said Steve Blakely, Servus CU’s president/CEO. “At Servus CU, we believe deeply in our roots and that being a credit union makes a difference to the members we serve. Caja Yanga continues to help members through innovative delivery channels and services and products designed to fit its members. We were very impressed with its approach and success in growing its membership, particularly in the youth service area.”
As part of its semilla cooperativa (cooperative seed) methodology, Chja Yanga sends financial representatives, often on motorcycle, to serve members kiving in rural areas. (Photos provided by World Council of Credit Unions)
Caja Yanga has taken an additional member-service step outside of its partnership role to pilot WOCCU’s MatchSavings.org. The online program allows people worldwide to match the small savings of individual Caja Yanga members through a dedicated website. By helping Caja Yanga members save for things like housing, microenterprise, education and healthcare expenses, MatchSavings.org participants help the credit union’s poorest members build savings habits as a first step toward overcoming poverty, WOCCU said. For more information, use the link. Servus CU is the first Canadian credit union to explore a direct credit union-to-credit union partnership under WOCCU’s partnerships program. As an initial step, the two partner-credit unions last week met in Cordoba, Mexico, to examine Caja Yanga's outreach to rural communities and the success of WOCCU's PATMIR II project funded by the Mexican Ministry of Agriculture, Livestock, Rural Development, Fishing and Food. The project has helped Caja Yanga grow its membership and strengthen its role as a financial institution. The Servus delegation traveled from village to village within the state of Veracruz, then visited the small community of El Moral where Caja Yanga has implemented WOCCU's semilla cooperativa (cooperative seed) model. Members using the semilla cooperativa model form small groups of 10 to 20 people in their communities. Group members encourage each other to save and sometimes guarantee individual loans within the group. Before Caja Yanga became involved, it was impossible for El Moral's residents to receive credit or even open a savings account, because residents have few financial resources and live far from the nearest city. To serve El Moral, Caja Yanga sends field officers to the small town armed with personal digital assistant devices and handheld printers to process financial transactions in real time. Caja Yanga provides the same service to more than 60 small communities around the state. In addition to WOCCU staff members and Blakely, Servus CU delegates visiting Caja Yanga included: board member Penny Reeves, also a WOCCU board member; K. Wayne Cook, vice president of credit; and Mike Dickinson, senior manager of corporate communications. Reeves said they hope the partnership will encourage other Canadian credit unions to participate in the WOCCU partnerships program.

Visa puts Heartland on probation citing data breach

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NEW YORK (3/16/09)--Credit card processors Heartland Payment Systems and RBS WorldPay have been removed from Visa's list of service providers that are compliant with Payment Card Industry Data Security Standards (PCI DSS), Visa announced Friday. Both processors have had massive data breaches in recent months affecting hundreds of credit unions and banks and thousands of members. The decision is significant because merchants accepting Visa and MasterCard are required to use processors that are PCI compliant or risk paying fines themselves (SCMagazine March 13). Key players in the card industry had established a single standard to serve as a consistent framework of data security requirements. "Compliance with the PCI DSS has significantly reduced unauthorized access to cardholder data," Visa said Friday. "Recently Heartland Payment Systems and RBS WorldPay publicly disclosed unauthorized access to their systems resulting in the compromise of card account information from all major card brands, "Visa said. "Based on compromise event findings, Visa has removed Heartland and RBS WorldPay from its list of PCI DSS compliant service providers." However, Visa added that "Heartland and RBS WorldPay are actively working on revalidation of PCI DSS compliance using a Qualified Security Assessor. Visa will reconsider relisting both organizations following their submissions of their PCI DSS reports on compliance." Heartland, which disclosed Jan. 20 that a malicious software may have exposed tens of millions of records from its system to hackers, said in a statement it was "pleased to continue our long relationship with Visa. Heartland is cooperating fully with Visa and other card brands, and we are committed to having a safe and secure processing environment." It had been certified as PCI-Dss compliant in April 2008. Its assessment will be completed by May, Heartland said. (TheTechHerald March 13). RBS's data breach, announced in December, compromised 1.5 million cards. The breaches, as well as those of the Hannaford Bros. grocery chain and discount retailer TJX Cos., have all affected credit unions. But Hannaford and Heartland had said they were PCI DSS compliant at the time of the breaches. As a result, there has been debate about the effectiveness of the standards against highly sophisticated organized networks of cybercriminals. Meanwhile in another development, a data breach announced in late February that affected credit unions and banks was not a breach of a new payment processor, but was instead related to an earlier incident, Visa said last week. It did not identify the unnamed card processing company (Computerworld March 9). News of it surfaced when Visa and MasterCard began to quietly alert credit unions and banks that an unnamed credit card processing company experienced a compromise of its systems (News Now Feb. 24).

Massachusetts CUs assets grew in 2008

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MARLBOROUGH, Mass. (3/16/09)--Massachusetts' 223 credit unions grew during 2008 in assets, deposits, loans and membership, according data from year-end reports released by the National Credit Union Administration. Assets grew 7.94% to $26.5 billion from $24.6 billion at the beginning of 2008, according to the statistics cited by the Massachusetts Credit Union League (E-Weekly March 11). Asset growth for Massachusetts' credit unions was half a percentage point over the national growth rate of 7.23%. Savings in Massachusetts credit unions rose 5.21%, compared with nearly 7% for credit unions nationwide. Credit unions in the commonwealth attracted 13,000 new members in 2008, an increase of 0.53%. Loans outstanding grew by more than 6.37% , or $1.16 billion. Nationwide, loans at credit unions rose by 6.71%

Judge freezes Central States funds

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MILWAUKEE (3/16/09)--A Milwaukee County Circuit Court judge has frozen up to $3.37 million in loan money held in a credit union account on behalf of CSMC Inc., better known as Central States Mortgage Co., which suspended operations on March 9. Circuit Judge David Hansher issued a temporary restraining order late Thursday after Associated Bank sued the Wisconsin-based mortgage lender, alleging fraud for refusing to promptly pay down a loan, said the Milwaukee Journal Sentinel (March 12). Central States Mortgage Co. (CSM) had served 250 credit unions nationwide, originating and servicing mortgages. Twenty-three wrote off their investment in the company during fourth quarter, according to regulatory reports obtained by the Journal Sentinel. The Associated Bank lawsuit alleges that Central States borrowed funds from the bank to finance 13 mortgage loans and then sold 12 to investors but did not pay down the loan, as required. The bank alleged the mortgage company tapped its line of credit between Christmas and New Year's Eve, about two months after it was informed the credit line would close Jan. 5. Last month, a Wisconsin court awarded U.S. Bank a $2.7 million judgment against Interim Funding LLC of Wauwatosa, Wis., a firm owned by the founder and former CEO of CSM, Dick Jungen. The bank sued Jungen and five executives of Interim, including three former CSM employees, alleging the company defaulted on a $3 million revolving loan from the bank. CSM fired Jungen in July 2008 after the credit union service organization learned he secretly controlled Interim Funding. The CUSO sued in February, alleging he scammed the CUSO out of $15 million (News Now March 2). The case is pending (The Business Journal Milwaukee March 9). Central States' parent company, CSCM, also is a defendant in a lawsuit filed Feb. 24 by Equitable Bank of Wauwatosa involving a foreclosure on a condo project in West Allis, Wis. CSMC holds a $4.3 million mortgage with a development group that includes Jungen, said the newspaper.

Carolina DMV halts used-car sales at CU

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NORTH AUGUSTA, S. C. (3/16/09)--A community used-car lot held weekends at the parking lot of SRP FCU has been closed by the South Carolina Department of Motor Vehicles, which says the sales are affecting vehicle sales of used-car dealers. However, the case is different from one that occurred earlier in Wisconsin, where auto dealers closed a credit union's auto sales lot (News Now April 10 and Dec. 11, 2008). In this case, the North Augusta, S.C.-based SRP FCU isn't selling or financing the cars. It's just providing a spot for the community to barter. According to SRP FCU President Ed Templeton, every weekend for years, between 6 p.m. Friday and 8 a.m. Monday, people in the community took their used-cars, boats, motorcycles, travel trailers and more to the credit union's Silver Bluff Road branch parking lot. They slapped a For Sale sign on their vehicle with their contact information. "It started out with one or two, and over the years, it just grew. We have 75 parking spaces and every weekend, the lot will have 50-75 cars," and other vehicles, Templeton told News Now, noting that the credit union is closed during the weekend. Other branches occasionally get one or two vehicles, but this lot was "a mecca." Templeton said used-car dealers complained to the DMV that the sales were taking away their business. DMV sent an agent several weekends to the lot to gather tag numbers and vehicle identification numbers, and last weekend the lot was officially closed. "They told us we were violating the law. The code has benign language about 'affecting the sale of vehicles' in cases where we might lend money to a buyer. The code says we'd need a dealer's license, which we don't want and aren't qualified for under the regulations." Technically, the DMV is correct, according to the credit union's lawyers. The only recourse is to go to the state legislature to change the code to allow "tent sales." However, that won't happen. "We're not ready to take that on. There is so much going on right now, that we have to pick our battles," Templeton said. The credit union doesn't conduct the sale, and if a buyer of a car on the lot happens to come into the credit union Monday morning to get financing, the credit union has no way of knowing where the car is purchased, he said. "It's a disappointment to me, a disappointment to the community. We were the only place available where people could offer their cars. The one beacon was our parking lot." The credit union has signs up on the lot informing sellers and buyers the lot is under police jurisdiction and they could be towed for trespassing. "It's the epitome of stupid," he said, adding that "towing would be a last resort." People aren't happy about the change, said Templeton. Some members have fired off e-mails to the DMV and a new-car dealer suggested it would help if the credit union wants to change the law. "It's gratifying when people rally around you," he added. And then, there's the irony: The DMV agent's son complained when he found out he couldn't use the credit union's lot to sell his motorcycle.

Media across country report CUs are safe sound

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MADISON, Wis. (3/16/09)--Media nationwide are reporting on credit unions’ safety and soundness, and their willingness to lend when many financial institutions are cutting back. Some examples:
* Truliant FCU, Winston-Salem, N.C., said its “credit is flowing like nothing is wrong with the economy,” according to TV station WXII 12. The segment noted that car loans in January were up 30% from a year ago, and mortgages were up 39%. Using loans obtained at Truliant, an engaged couple refinanced a loan on one car and purchased a used car. With the money saved through favorable loan rates, the couple is paying down credit card debt and will finance a wedding and honeymoon. The wife of a preacher refinanced her church mortgage with a loan from the $1.195 billion-asset Truliant. With the savings realized, she is hiring more staff to help run the church. The credit union said it is a conservative lender that did not get involved in subprime lending or option adjustable-rate mortgages, or “put profits ahead of practicality” like many banks. To view the video, use the link (Weekly Update March 13). * In Michigan, total credit union loans grew 8.2% to $22.3 billion at year-end 2008, compared with a 4.05 % growth rate in 2007, and 5.17% in 2006. Auto loans by Michigan credit unions rose 10.72% to $5.35 billion in 2008--an increase driven in part by Invest in America, credit unions’ lending program with General Motors and Chrysler--after two years of small decreases. Credit union executives in the state said tight credit at banks and last fall’s financial meltdown resulted in consumers taking their business elsewhere. “We are seeing a transformative shift here,” said David Adams, president/CEO of the Michigan Credit Union League. “It’s a great business opportunity” (Mlive.com March 10). * First South CU, Bartlett, Tenn., earned $9.4 million is 2008, while many financial institutions were reporting losses. The credit union is earmarking $900,000 to cover possible bad loans. While two-thirds of the credit union’s loan portfolios consists of mortgages, First South will not issue mortgages to members it believes cannot repay them. The credit union has only one delinquent mortgage borrower, said Craig Esrael, CEO. The $333.2 million-asset First South started construction last month on its 14th branch (The Commercial Appeal March 5). * Credit unions are healthy and prepared to rescue the corporate credit union system, according to a story in the March 6 Central Penn Business Journal. The article provides background on the corporate credit union system, the proposed corporate stabilization plan, and how credit unions will be affected. Diana Roberts, CEO of Hershey (Pa.) FCU, said she supports the financial rescue and hopes credit unions can repair the system on their own. “It is our duty to do that,” she said. “We own the system and we’re going to come out looking a lot better if we do it ourselves” (Life is a Highway March 10).

Fitch adjusts rating for CUNA Mutual

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MADISON, Wis. (3/16/09)--Fitch Ratings lowered the insurer financial strength rating for CUNA Mutual Group. The rating was adjusted from ‘AA-’ (Very strong) to ‘A’ (Strong) with a Negative Outlook in its annual ratings review, citing current and future economic turmoil as the primary drivers for the ratings change. The change reflects CUNA Mutual’s above-average exposure to residential mortgage-backed securities and asset-backed securities, Fitch said. Fitch had previously put the life insurance sector on an industry-wide negative outlook. “CUNA Mutual is not immune to market events, but even in the current economic environment we remain financially strong,” said Jeff Holley, CUNA Mutual’s chief financial officer. “Our ability to pay claims has not been impeded and we remain well capitalized--even in these difficult economic times.” Fitch said the ratings "reflect the expectation that operating performance will be hindered by a further decline in assets under management.” Fitch wrote in its release, "Favorably, CUNA Mutual’s ratings consider its strong market position in the credit union marketplace, conservative reserving practices, and solid liquidity.” CUNA Mutual’s financial strength and capital position remain strong and the company’s business operations produced solid revenue growth and operating results in 2008. The company’s revenues grew by nearly 7% and operating gain exceeded $150 million last year, the company said. Fitch noted that CUNA Mutual reported a $148.9 million net loss in 2008, compared with $183.6 million of net income in 2007--which it said reflected deterioration in its investment portfolio along with lower earnings in its asset accumulation and commercial products. Many financial experts predict the economic recession will continue throughout 2009-- and Fitch has built this expectation into its ‘A’ rating of CUNA Mutual. The ‘A’ rating applies to the principal companies of CUNA Mutual Insurance Society and CUMIS Insurance Society Inc., a property and casualty subsidiary. The ‘A’ rating is the sixth highest rating of 19 categories of ratings Fitch issues. Fitch also placed CMG Mortgage Insurance Co., which is 50% owned by CUNA Mutual and 50% owned by PMI Mortgage Insurance Company, on Rating Watch Negative.

N.Y. CUs address corporate stabilization plan

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ALBANY, N.Y. (3/16/09)--More than 45 New York credit union representatives attended a special Manager/CEO Roundable Thursday to discuss the National Credit Union Administration's (NCUA) Corporate Stabilization Program and its impact.
National Credit Union Administration (NCUA) Region I Associate Director Anthony LaCreta updated the New York Manager/CEO Roundtable on NCUA's Corporate Stabilization Program Thursday.
The event was hosted and organized by the Credit Union Association of New York in Albany for credit unions with assets up to $50 million. Victor Vrigen, senior vice president of Members United Corporate FCU, shared information about the current corporate atmosphere, and Anthony LaCreta, NCUA Region I associate regional director of operations, provided an overview and update on the program. The group analyzed corporate credit union system alternatives in an effort to build a consensus for comments for NCUA's Advance Notice of Proposed Rulemaking (ANPR) on the plan. "Small to mid-size credit unions will be uniquely impacted by this program," said association President/CEO William J. Mellin. "Which is why this type of forum was an ideal medium through which they could discuss credit union issues in relation to the current financial crisis in conjunction with how we, as their association, can assist them."
A focused group gathered at the Credit Union Association of New York's headquarters Thursday to discuss the National Credit Union Administration's Corporate Stabilization Program. (Photos provided by the Credit Union Association of New York)
Association management staff provided information on related initiatives, Web resources, the ANPR, ANPR survey results, and a legislative briefing on the program. "Getting together with like-size credit unions in a venue like today's gives us the opportunity to talk, ask questions and reinforce our message so that we speak with one voice when commenting collectively and independently" on the program, said Barry Stilwell, CEO, Canandaigua (N.Y.) FCU. The Credit Union National Association (CUNA) and CUNA's Corporate Credit Union Task Force are working to lessen credit unions' insurance costs associated with the program and are continuing efforts to encourage NCUA to adopt one or more alternatives to the funding to mitigate the stabilization program's costs to credit unions.

CU System briefs (03/13/2009)

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* MADISON, Wis. (3/16/09)--Summit CU, based in Madison, Wis., is seeking four individuals or families to participate in an interactive competition, Project Money. The prize: $10,000 for the winner and $2,500 each for the runners up. Participants will meet with financial coaches during the seven-month challenge to develop customized tools and advice aimed at meeting their financial goals. The nearly $1.3 billion asset credit union will award points in three categories: Increase in savings (40%), debt reduction (40%), and participation in program events such as educational sessions, coaching meetings, and web blogs (20%). Other members can participate in the Play at Home option on Summit's website … * TALLAHASSEE, Fla. (3/16/09)--Florida Commerce CU has appointed Cecilia D. Homison as its new CEO. The appointment was effective March 1. Homison succeeds long-time CEO Ron Fye, who is retiring. Homison has been chief financial officer of Florida Commerce CU since 2000. She began her credit union career in 1988 at Heritage Trust FCU, Charleston, S.C., as assistant vice president/controller. Later she served as vice president finance, senior vice president finance/controller and chief operations officer. The Tallahassee-based credit union is the largest credit union in North Florida, with more than 36,000 members and $300 million in assets … * GREENSBORO, N.C. (3/16/09)--Greensboro (N.C.) Municipal CU's board of directors has named Jerry Wise to the position of CEO/president. Wise has more than 12 years' experience in the credit union movement, most recently as executive vice president of Fremont (Ohio) FCU. Prior to that he served as executive vice president at Firelands FCU, Bellevue, Ohio, according to the North Carolina Credit Union League (Weekly Update March 6). In those positions Wise was involved with all operations of the credit union and worked to improve the quality of services to members. Greensboro Municipal CU has more than $31.3 million in assets … * VAN NUYS, Calif. (3/16/09)--Los Angeles Police FCU (LAPFCU) been selected as one of California's best places to work, according to Employer's Group, a human resources and advocacy firm serving California employers (Market Wire March 10). The $694.8 million asset credit union earned second place out of five winners in the medium-size companies' category. The ranking was based on LAPFCU's scores against 490 companies in employer and employees surveys in nine categories: work-life balance, pay, benefits, training and advancement opportunities, diversity programs, turnover, perks, employee voice and workplace culture, and community involvement …

Rejected for home loans Try CU says Conn. league

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SEATTLE (3/13/09)--About half of all mortgage applicants are being turned down, according to the Mortgage Bankers Association, and acceptance rates on refinancings have dropped 10 percentage points. But consumers who are members of credit unions should check with their credit union, the Credit Union League of Connecticut said. In an article in The Seattle Times (March 8), Marilyn Kennedy Malia of Bankrate.com wrote about the dilemma. Tony Emerson, president of the Credit Union League of Connecticut, noted that members can look for loans at their credit unions. Credit unions may be more forgiving, and some credit unions judge loan eligibility based on the unique relationship they have with their members, he said. He noted many offer memberships to employees of companies and would know more about a member's job stability, he said. For the entire article, use the link.

Coastway bank-charter vote scheduled

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CRANSTON, R.I. (3/13/09)--Members of Cranston, R.I.-based Coastway CU will vote April 29 on whether to change the credit union's charter to a mutual savings bank charter. About 21,000 members in good standing as of March 31 at the $303.5 million asset credit union will be eligible to vote at the meeting, which begins at 7 p.m. at Crown Plaza Hotel. They also can vote at Coastway's seven branches or by mail after ballots are distributed. Despite the economy's effect on banks, Coastway President/CEO Bill White told the The Warwick Beacon (March 10) the conversion is still being planned. White said the credit union has hit the 12.25% of assets cap on its business loans and a bank charter would eliminate the cap. He said he knows of no organized group of members opposing the conversion but acknowledge some will be opposed to the change.

Pa. payday alternative saves consumers big bucks

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HARRISBURG, Pa. (3/13/09)--Pennsylvania's Credit Union Better Choice payday-loan-alternative program has saved borrowers nearly $5 million in interest and fees, according to the Pennsylvania Credit Union Association (PCUA). The payday lending alternative was developed in conjunction with the Pennsylvania Treasury Department. The state's consumers saved an average 80 cents in loan fees and costs for every dollar borrowed through the program rather than through a typical payday loan. That translates to more than $4.9 million. Also, borrowers placed $686,155 into savings accounts Since the program's inception in October 2006, roughly 79 credit unions with 211 locations have agreed to offer the loans, with additional participants continuing to sign on, said PCUA. Participating credit unions made nearly 15,000 loans totaling $6.8 million in volume since the program started. The average loan amount was $466.33. During the six months ending Dec. 31, 2008, about 72 credit unions reported 5,205 loans totaling more than $2,388,278. "As many Pennsylvanians feel squeezed in our rough economy, the ongoing usage of the Credit Union Better Choice program indicates that consumers need access to low-cost short-term loans," said Jim McCormack, PCUA president/CEO. "I'm pleased that they can turn to a credit union to fulfill that need in a fairly priced way." "Pennsylvania's families feel the effects of the recession and should have quick access to reasonable and fair loans," said Treasurer Rob McCord. "In this new era of responsibility, consumers should be able to use loan products that will help them make ends meet--and also pay dividends into the future. Better Choice does just that by pairing short-term loans with savings and financial education." A typical $500 payday loan costs consumers $15 for every $100 borrowed for two weeks, or about $450 over 90 days. A $500 Better Choice loan costs about $42.50 for the same 90 days, and at the end of the loan term, consumers also have $50 in a savings account. The program also provides financial education.

NACUSO Collaboration will help CUs overcome economy

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NEWPORT BEACH, Calif. (3/13/09)--Credit union service organizations (CUSOs) should collaborate with credit unions to help them overcome economic difficulties afflicting the country, said Thomas C. Davis, president/CEO of the National Association of Credit Union Service Organizations (NACUSO). This topic will be discussed at NACUSO’s 2009 Annual Conference to be held May 3-6 in Las Vegas. “The bad news is that credit unions are being assessed 62 basis points as part of the corporate bailout plan,” Davis said. “The good news is that credit union and CUSO executives have the power to make changes that will enhance their ability to overcome the difficult economic issues facing their credit unions. “Through collaborations and partnering with other credit unions, they can make back the 62 basis points and more,” he added. “Collaborations are currently creating salable platforms, earning millions of dollars in non-interest income, and saving millions of dollars in operational expense for credit unions.” Davis referenced data from Callahan & Associates’ peer-to-peer financial analysis, to emphasize the positive results of collaboration in the credit union industry. The data compares the five-year average annual performance of credit unions with an investment in a multi-owned CUSO versus those with no investment in it. Credit unions invested in a multi-owned CUSO had 7.04% asset growth, 9.51% loan growth, and 2.82% member growth. Credit unions with no multi-owned CUSO had 4.50% asset growth, 6.35% loan growth, and 0.82% member growth. “Although you cannot [infer] cause and effect from these data, the message is clear,” Davis said. “Credit unions with investments in multi-owned CUSOs perform better than credit unions that do not participate in multi-owned CUSOs. Credit union collaborations also provide additional resource and expertise, spread risk and capital investment in business ventures, and ultimately drive more value back to credit union members.”

IPost-DispatchI applauds CU auto lending

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ST. LOUIS (3/13/09)--The St. Louis Post-Dispatch is giving Missouri credit unions kudos for their efforts to help consumers buy vehicles at a time when other financial institutions are making it harder to access credit. The newspaper published an article Sunday that touted credit unions as a solution to the credit crunch (The Missouri difference March 11). “Not everyone tightened lending,” the article said. “Credit unions suddenly saw competition contract after some big banks and automakers’ finance companies cut back.” “The other sources of lending aren't there,” Amy McLard, vice president of public/legislative affairs for the Missouri Credit Union Association, told the paper. “People are turning to credit unions, and we have money to lend.” First Community CU, Chesterfield, issued 25% more auto loans in the second half of 2008 compared with the first half, Laura Alfeldt, the credit union’s vice president of marketing, told the paper. January--generally a slow time--was the top month for First Community’s auto loans in the past five years, she added. Credit Union Lending Systems, a St. Louis County-based intermediary between 31 credit unions statewide and 270 new- and used-auto dealerships, told the paper that January was its best month since the company’s inception in May 2000. Credit unions have significantly helped Jim Butler Auto Plaza get through the credit crunch, which began in August, Kyle Kaverman, general manager for the St. Louis-based used-vehicle dealership, told the paper.

WalletPop features CUs fin ed program

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DENVER, Colo. (3/13/09)--WalletPop, AOL's financial advice website, on Monday began showcasing a free financial education program offered through some credit unions. The program, FoolProof, was featured on eight WalletPop home pages, all directing readers to local credit unions. It aims to "get across the lessons of financial security without any strings attached," said AOL. AOL's promo segment features consumer advocate Remar Sutton, former Credit Union Magazinecolumnist on auto lending and author of Don't Get Taken Every Time. Maryland and District of Columbia Credit Union Association launched the tool on Feb. 25, and The Colorado and Wyoming Credit Union Associations and their service corporation, Credit Union Strategic Partners, also offer the program.

Idaho TV station reports CUs help recovery

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POCATELLO, Idaho (3/13/09)--Credit unions plan to help lead the U.S. economic recovery, said Alan Cameron, president of the Idaho Credit Union League, in a story reported by a local NBC affiliate. “We stand to ready to make loans,” Cameron said, speaking at Potelco United CU’s annual membership meeting Wednesday. “We have the equity, the network, the stability and the desire to help our members to do a better job financially. In helping our members do better financially, we help our community in doing better financially” (KPVI.com March 11). Credit unions are part of the larger economic scenario, and are feeling some strain because members are taking out fewer loans--which results in less revenue to put back into members’ hands, the TV station reported. However, conservative lending practices help credit unions be part of the solution to the economy’s troubles, members said at the meeting. Potelco United CU, based in Pocatello, Idaho, has $56.2 million in assets.

CUs banks to finance Maines energy program

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AUGUSTA, Maine (3/13/09)--Maine plans to work with credit unions and other financial institutions to guarantee up to $100 million in weatherization loans to help state residents achieve greater energy independence, according to a proposed initiative by Gov. John Baldacci. Credit unions and banks will do the lending of the loans, but the state will back the loans, which will give credit unions and banks an incentive to increase the amount of loans issued, the governor and his aides said (Bangor Daily News March 12). Maine’s goal is to use the loans and $32 million in federal stimulus money to increase weatherization projects in the state 20-fold as part of a longer-range goal to enhance energy efficiency in all Maine homes the next 20 years, the newspaper said. Over the past few months, the Maine Credit Union League has had multiple discussions with the governor’s office about ways in which Maine’s credit unions and the state can work together to help provide programs to help consumers with weatherization and energy assistance loans, Jon Paradise, governmental and public affairs manager for the Maine Credit Union League, told News Now. John Murphy, president of the Maine Credit Union League, explained the genesis of the league’s involvement. “Last month, the league met again with the governor’s chief of staff to review the governor’s current proposal and to discuss how credit unions could support the needs of those members who may be interested in participating and determine if Maine credit unions would be interested in participating,” Murphy said. “During the meeting, the governor came in to let the league know how appreciative he was of the willingness of Maine’s credit unions to participate and assist in his energy plan, and for the assistance Maine credit unions have already provided,” he added. After the meeting, the league surveyed its member credit unions to gauge the level of interest in participating in the Maine Housing program. An overwhelming majority of credit unions expressed their willingness and desire to participate in this program, Murphy said. “The league and Maine credit unions are now awaiting further details and information from the governor’s office and Maine Housing, and anticipate that credit unions will begin offering this program to members soon,” Murphy added.

CU System briefs (03/12/2009)

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* ALTON, Ill. (3/13/09)--An independent funeral director whose business was failing has been charged with robbing two financial institutions, including the Dec. 5 robbery of Evansville (Ind.) FCU. George Chestnut, 46, of Alton, Ill., was arrested last week in Gibson County, Ind., shortly after a robbery Friday at First Bank of Princeton. Tuesday he was charged with the credit union robbery. An undisclosed sum from the credit union holdup has not been recovered, said police (St. Louis Post-Dispatch March 12) … * ANTIOCH, Calif. (3/13/09)--A teller who allegedly pretended to be a hostage and helped orchestrate a robbery at First Metropolitan CU's Antioch branch was one of five people arrested this week. Arrested were: Daniel Ramsey, 20, the teller; his friends, Angelo Leyesa, 21, and Shannon Sorrell, 18, a college student; and two people allegedly recruited as gunmen, Jarret Sermeno, 19, and Kevin Taylor, 18. The robbery occurred about 5:50 p.m. Feb. 25 when two men wearing ski masks and brandishing handguns entered the branch and ordered Ramsey at gunpoint to open the vault. He filled the bag with $74,000. The suspects fled, dropping $20,000, and allegedly joined Leyesa and Sorrell in a getaway car. No one was injured. Two days earlier an attempt to rob the credit union failed when one of the suspects, believed to be Leyesa, lost his nerve. That prompted the recruiting of Sermeno and Taylor, police said. Police believed the job was an inside job after witnesses noted the robbers seemed familiar with the credit union's layout (Contra Costa Times March 12) … * FARMERS BRANCH, Texas (3/13/09)--The Texas Credit Union League is looking for singers for the league's 75th Annual Meeting and Expo April 14-17 in Austin. Entrants to the "Sing Your Way There" National Anthem contest must submit a YouTube video performance of a song showcasing their talent by the close of business today. The winner will perform the National Anthem at the meeting and received a waived registration to the event (LoneStar Leaguer March 12) … * WASHINGTON (3/13/09)--Police FCU--headquartered in Upper Marlboro, Md., with a branch office in Washington, D.C.--has unveiled its new CO-OP Fast Branch kiosks in two police stations. The kiosks, one at each location, are the first kiosks in the nation to be located inside a police station, according to the Maryland and District of Columbia Credit Union Association (FOCUS Newsletter March 9). They replace the credit union's older ATMs, which operated since 1998. The credit union, which serves the law enforcement community exclusively, was the first financial institution in Washington to install ATMs in police substations. It did so to provide a safe, secure place for the local community to access their funds …

CU signs 20-year naming rights contract

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MADISON, Wis. (3/12/09)--Madison-based Summit CU has signed a 20-year naming rights agreement with the Sun Prairie, Wis., school board. The $1.287 billion asset credit union donated $99,537 for a baseball field, which will be known as Summit Credit Union Baseball Field (Wisconsin State Journal March 11). The field will be at Sun Prairie's new high school, slated to open in fall 2010. The donation pays for about one-third of the cost of the field's artificial turf on the infield. The Sun Prairie School Board approved the agreement Monday night. It is the first district in Dane County to sell naming rights for a specific school facility, said the article. The article included the price tag for various other facilities at the school-- from $500,000 for naming rights to the school's performing arts center or its field house, to $4,714 for a corner mounted scoreboard.

Apology extended by CU in head-scarf incident

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WASHINGTON (3/12/09)--A Muslim woman who wore an Islamic head scarf received an apology Tuesday from a credit union that made her leave the teller line and conduct financial business in a back room because of the credit union's new "no hats, no hoods, no sunglasses" policy. Kenza Shelley received the call from Navy FCU's senior vice president for security, who apologized and said the credit union's new security policy should have allowed Shelley to be served by tellers at the front counter of its branch in Southern Maryland. The credit union is headquartered in Vienna, Va. The religious scarf left Shelley clearly identifiable, the credit union told The Washington Post (March 10), adding that its policy does not prohibit religious head gear. The credit union implemented the policy in December as a deterrent to robberies and identity theft. It is in the process of training employees. The Maryland incident is the second at a branch of the credit union within a month. In February the credit union issued an apology after another woman in an Islamic head scarf experienced the same situation at a branch in Mission, Calif. (News Now March 11).

IWSJI reader denied bank credit gets CU OK

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NEW YORK (3/12/09)--A Wall Street Journal reader was denied a credit card by Bank of America, but was pre-approved for an auto loan after joining a credit union, according to a letter Wednesday. Morgan Myrmo of San Diego wrote in response to an op-ed by Bank of America CEO Kenneth D. Lewis titled “Some Myths About Banks.” Lewis said in his op-ed piece that it is not true that banks aren’t lending. Federal Reserve data shows “bank credit has actually increased over the course of this recession,” he said. Myrmo writes: “I was denied a credit card from his bank on March 2. I was a bit surprised since I have an Equifax credit score of 750 and a solid credit history. I wonder why the bank would not want to extend credit to a healthy borrower with no debt and taxable income of $50,000 per year. Perhaps the banks are in bigger trouble than we think. “After joining a local credit union I was pre-approved for an auto loan. I know where my deposits are now headed. Do you?” Myrmo added.

PCUA announces community award winners

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HARRISBURG, Pa. (3/12/09)--The Pennsylvania Credit Union Association announced the winners of its 2009 Credit Union Community Awards. The 2009 state-level awards were given for the Dora Maxwell Award for Social Responsibility, the Louise A. Herring Award for Philosophy in Action, and the Desjardins Youth Financial Education Award (Life is a Highway March 11). Maxwell Award first-place winners:
* Wyrope Williamsport FCU, South Williamsport, in the $5-million-to-$20-million-assets category; * Timberland FCU, Du Bois, $20 million to $50 million; * Cross Valley FCU, Wilkes Barre, $100 million to $200 million; * Belco Community CU, Harrisburg, $200 million to $500 million; and * American Heritage FCU, Philadelphia, $550 million-plus.
Desjardins Award first-place winners:
* Wyrope Williamsport FCU, less than $35 million; * Keystone FCU, West Chester, $35 million to $75 million; and * Erie (Pa.) FCU, more than $250 million.
The Herring Award first-place winner was Wyrope Williamsport FCU, less than $50 million.

Michigan unveils ads for Invest in America

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LANSING, Mich. (3/12/09)--Michigan credit unions have run television and radio ads since March 9, asking consumers to buy American. Four of the ads carry the Invest in America theme--credit unions’ auto loan discount program with auto manufacturers General Motors Corp. and Chrysler Corp.
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The nearly 1,000 participating Invest in America credit unions nationwide will be able to run the ads in their respective media markets. The two TV ads and two radio ads focus on helping consumers buy from General Motors and Chrysler through the Invest in America program while pushing consumers to the program’s newly redesigned website. The Invest in America program has a built-in advertising pool which stands at $1 million for participating credit unions. The ad pool will grow as more credit unions actively promote Invest in America. “There has never been a more important time to buy a domestic automobile,” said David Adams, president/CEO of the Michigan Credit Union League (MCUL). “Invest in America has shown tremendous results
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in the first few months. These ads will help credit unions across the country step up their marketing efforts, while showing that they have money to lend. That’s important right now for the automakers and the economy.” The timing of the new ads couldn’t be better for credit unions because many are seeing their auto loans grow exponentially, MCUL said. CUcorp, a wholly-owned subsidiary of MCUL, will coordinate the marketing with credit unions. The Invest in America program has yielded more than 25,000 vehicle sales nationwide since January. The campaign is supported by 40 state credit union state leagues, CUNA Mutual Group, American Automobile Association, Credit Union Direct Lending and GroovCar. To see the ads, use the link.

30 Under 30 reports young adult financial habits

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MADISON, Wis. (3/12/09)--The report of Filene Research Institute’s ’30 Under 30’ group about young adult financial habits and needs is now available.
Click to view larger image The Filene Research Institute’s a “30 Under 30” group focused on research about young adult financial habits and needs to help credit unions attract younger members, professionals and volunteers. (Photo provided by Filene Research Institute)
Because credit unions need to attract younger members, professionals and volunteers, Filene created the “30 Under 30” group to focus on research regarding young adult financial habits and needs. The group’s final report is "10 Young Adult Innovations: From the 30 Under 30 Group," edited by Filene’s driver of the CU Tomorrow project, Ben Rogers. The research, funded in part by PSCU Financial Services, Credit Union Executives Society, Fiserv, and the Corporate Credit Union Network, highlights 10 business plans that align facets of young adult life with credit union needs. The business plans fall into three categories. "Plans for Younger Members" has the following features:
* Change Your Savings: Harnesses the power of debit to fund worthy goals; * CUre Card: Members improve their communities with a credit union debit card; * GrassHopper: Life planning meets credit union products; * Mortgage Down Payment Accelerator: Rewards those who are saving for a home; * Win-Win Savings: Prize-based savings for young adults; and * What’s Next? A responsible way to build credit and save.
"Plans for Talented Young Professionals" has:
* Shared Staffing: Short-term sabbaticals for professional development; * Gen Y Fast Track: Mentorships and job rotation for superior retention; and * iAdvanceCU.com: Credit union career paths and improved recruiting.
"A Plan for Younger Volunteers" features a “Member Advisory Panel (MAP): Connecting young adult volunteers with credit union leaders.” Each business plan details the product’s overall aim, outlines its benefits for the member and the credit union, explains how to put the product into practice at a credit union, and shows what further considerations apply to each. “The aging of credit union membership is a challenge for the credit union system,” Rogers said. “Engaging ambitious young professionals and giving them enough room to improve and innovate is essential for credit union success over the next 10 years.”

CU System briefs (03/11/2009)

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* OMAHA, Neb., and ALEXANDRIA, Va. (3/12/09)--Before his keynote address at the Omaha Chapter meeting, National Credit Union Administration (NCUA) Vice Chairman Rodney Hood toured Gallup FCU, Strategic Air
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Command (SAC) FCU, Omaha FCU and Omaha Police FCU, and praised their innovative products and services, noting each has found ways to offer affordable loans even in the national credit freeze. Before the chapter, Hood discussed the unstable economy and steps the NCUA Board has taken to ensure safety and soundness of the credit union industry, including the Corporate Stabilization Program, the "Making Home Affordable" Loan Modification Program and recent modifications to the NCUA Call Report. He applauded the Nebraska Credit Union League for taking a proactive approach to provide its members with information about the stabilization efforts to maintain open communication lines. At Omaha Police FCU are, from left: Mary Johnson, president; John Friend, board secretary; Hood; and Eric Buske, board vice chairman. (Photo provided by the National Credit Union Administration) … * KANSAS CITY, Mo. (3/12/09)--Mazuma CU employees manned a phone booth at a local NBC affiliate news station during the national America Saves Week Feb. 22-March 1, as part of a local initiative, Kansas City Saves. Joell Dickerson, financial counselor, and Bill Sherman, MEMBERS Financial Services, were among the volunteers from financial institutions who fielded questions from area residents about personal finance during economically challenged times. The goal, said Dickerson, "was to help people find the resources to help with their personal finances." Any person who joined Mazuma that week received a "Save a Buck with a Cup" coffee mug. The program enrolled almost 150 savers for the week, said Heather Davis Richards, vice president of public affairs for Essential Knowledge LLC, a partner in the local initiative … * HARRISBURG, Pa. (3/12/09)--Erie (Pa.) FCU has deployed the first credit union-owned shared-branch kiosk in Pennsylvania, says the Pennsylvania Credit Union Association (Life is a Highway March 10). The kiosk functions as an ATM, allowing transactions by not only members of Erie FCU and other credit unions, but also by other financial institutions' customers. Members on the shared-branching network can process deposits, withdrawals, transfers, transaction history, cashier check withdrawals, loan payments and loan advances for line-of-credit accounts. The kiosk is located in a Shell gas/convenience store in Union City. The kiosk brings the total shared branching locations in the state to 88 …

Michigan OFIR orders ceasedesist to fake online CU

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LANSING, Mich. (3/12/09)--Michigan's credit union regulator has issued a cease-and-desist order against a fake online credit union, doing business as Communal CU of Dearborn. The Michigan Office of Insurance and Financial Regulation (OFIR) said no one is at the physical address listed on the bogus credit union's website (Detroit Free Press March 11). The address was listed as 330 Town Center Drive, Suite 900, Dearborn, MI 48126. OFIR says that scam artists are promoting the fake credit union on the Internet to consumers looking for a break on a loan or wanting to refinance their mortgage. News Now visited the website at www.communalcreditunion.com. On it, Communal says it specializes in refinance loans and home mortgage loans. "Whether your dream is to buy a home or refinance your mortgage, our Mortgage Specialists are there to help. Refinance today to consolidate debt, lower monthly payments and get cash out," it says. OFIR discovered the bogus credit union after consumers complained about its website. They told OFIR they were asked to provide two pay stubs, Social Security numbers and bank account numbers, information that could be used for identity theft and unauthorized access to financial and card accounts, according to the article. The Detroit Free Press offered websites where consumers could check to verify that a credit union actually exists. They included OFIR's website and the website of the National Credit Union Administration.

Point Loma CU sponsors YouTube video contest

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SAN DIEGO (3/12/09)--Point Loma CU (PLCU) is sponsoring a YouTube video contest to help the next generation of moviemakers--or to least give younger members a chance to have fun--with its “PLCU in :30” video contest. Teens and young adults can enter by creating a 30-second spot about PLCU’s checking account. The commercials, aimed at youth peers, should cover what makes PLCU checking the best, promote the convenience of PLCU’s 24-hour nationwide access services, and explain how to open an account. The winner will receive an iPhone and could have the winning ad played on a local cable TV station. Four runners-up will each win an iPod. The entry deadline is March 31. “YouTube is ubiquitous, so this contest is a great way to reach our younger members,” said Ted Dennis, PLCU president/CEO. “I’m looking forward to seeing the results of their creative vision; I expect we’ll discover some real talent.” PLCU has assets of more than $475 million.

Picatinny sues Fannie Mae wants mortgages back

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MORRISTOWN, N.J. (3/11/09)--Picatinny FCU has sued mortgage giant Fannie Mae, seeking the return of more than $14 million in mortgages that the credit union says were sold without authorization by its former mortgage loan servicer to Fannie. The lawsuit was filed Monday in a state court in Morristown, N.J. , by the Dover, N.J.-based credit union (DailyRecord.com March 10). The action was just a week and a half after Picatinny filed a response to a Chapter 11 bankruptcy filed by its former mortgage loan servicer, U.S. Mortgage Corp., doing business as CU National Mortgage. The bankruptcy was filed in the U.S. Bankruptcy Court in Newark, N.J. (News Now March 2). Picatinny's lawsuit said U.S. Mortgage Corp., based in Pine Brook, N.J., sold 58 mortgages without the credit union's consent to Fannie. On Feb. 24, the credit union asked Fannie Mae to return the mortgages, but the government-run agency declined, its attorney told the Record. The lawsuit states that Michael J. McGrath, president/CEO of U.S. Mortgage, pretended to be the credit union's assistant vice president when he brokered the sales to Fannie Mae. The suit said McGrath was not an assistant vice president and was not authorized to perform such transactions on behalf of the credit union. According to lawyers in the case, the credit union is negotiating with U.S. Mortgage in bankruptcy court and reached an agreement Monday that bars the company from having control over any of the credit union's mortgages. The agreement, however, must be approved by a judge, said the article.

Michigan CU Card delinquencies lower than normal

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ISHPEMING, Mich. (3/11/09)--Ishpeming Community FCU says that its members are hunkering down to pay bills and manage debt, which is consistent with what a consumer tracking agency that monitors debt found. TransUnion, which tracks consumer debt, found that the number of people who are three months behind on their bank card payments dropped 11% during fourth quarter 2008, from the year before. Consumers also restrained their spending during the holidays, adding less than 2% to their balances, the bureau found. Ishpeming Community FCU, based in Ishpeming, Mich., told Upper Michigan's Source.com that its delinquency is "quite low." It averages about seven credit card delinquencies a year but currently it has four credit card delinquencies. Toni Lawson, consumer loan manager at the $93.4 million asset credit union, told the publication that people are being more conservative and watching their spending because they're nervous about the economy. Nevada led the nation with the highest incidence of delinquency, with bankcard borrowers 90 days or more delinquent on one of their cards, at 2.04%. Florida ranked 1.71% and Arizona ranked 1.54% (Jacksonville Business Journal March 10). The highest state average of debt on a bankcard was $7,466, in Alaska, followed by Nevada at $6,638 and Tennessee at $6,560. The lowest average bankcard debt was in Iowa, with $4,267, followed by North Dakota with $4,414, and West Virginia with $4,555.

Another Muslim woman protests head scarf policy

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WASHINGTON (3/11/09)--A Muslim woman was asked Saturday to leave the line at a credit union in Southern Maryland and conduct her financial business in a backroom because the Islamic scarf she wore violated the branch's new "no hats, no hoods, no sunglasses" policy. Kenza Shelley, 54, said the request is the second time within a month she had been asked to leave the line at the credit union, a branch of Vienna, Va.-based Navy FCU. The first time she complied but asked if she would have to go through the same process every time she made a transaction (The Washington Post March 10). On Saturday, she refused, saying she wanted to be served like everyone else, according to the article. She then left the credit union and called the Council on American-Islamic Relations (CAIR), a national Islamic civil rights and advocacy group, which maintains the policy is unconstitutional. The Maryland incident is the second incident within a month involving a woman wearing an Islamic scarf for religious reasons at a branch of the credit union. In February, a similar incident at a Mission, Calif.-based branch of the same credit union occurred, with another woman, Amal Hersi, complaining she felt singled out. The credit union investigated and issued an apology. The no-hats policy is increasingly popular among credit unions and other financial institutions. It also has been encouraged by law enforcement authorities in several states as a measure to thwart robberies and identity theft. Often robbers wear hats, hoods and sunglasses to disguise themselves. Making them remove the articles before they enter for business would act as a deterrent because they could be identified.

National Bank of Poland president praises PSFCU

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BROOKLYN, N.Y. (3/11/09)--The president of the National Bank of Poland praised the Polish & Slavic FCU (PSFCU) for its investment strategies, programs and commitment to Poland and Polish-Americans. Bank President Slawomir Skrzypek was briefed on the history and achievements of the largest ethnic credit union in the country at a meeting at the PSFCU headquarters in Brooklyn last week. In turn, he spoke with the PSFCU's board of directors about the state of the Polish economy (PR Newswire March 9). “You can all be proud of your credit union,” said Skrzypek. “It is no secret that PSFCU has become a symbol of [Poland’s] financial strength. So quite naturally, planning my trip to the U.S., I made a point to find out first-hand what stands behind your success. You are doing a fantastic job.” “It was a true honor to have such a distinguished official spend time getting to know us, our members and how we do business,” said Bogdan Chmielewski, PSFCU's CEO. “This is a sign of how financial leaders--here and in Poland--are increasingly recognizing the strides and successes we've made in our credit union and acknowledging the positive impact of the credit union movement as a whole. “A few months ago, we met here with representatives of Polish credit unions--the SKOKs--and they also reported that their good financial standing translated into strengthening their overall position in Poland,” he added. The fact that PSFCU has awarded more than $1.8 million in scholarships to students was of particular interest to Skrzypek. “I think President Skrzypek felt that this community program captured the true essence of a local ethnic credit union: one that placed such a great emphasis on the future of its community and on the betterment of its members and their families,” said Krzysztof Matyszczyk, PSFCU's board chairman.

Scholarships available for DE Training

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DELAVAN, Wis. (3/11/09)--Scholarships are available for the first of two Credit Union Development Education (DE) training classes in 2009. The first class will take place May 13-19 at a new location: Lake Lawn Resort, Delavan, Wis. The $1,750 registration fee includes a room for six nights, meals, and educational materials. Scholarships are available through the National Credit Union Foundation’s (NCUF) DE Fund, several state credit union foundations and leagues. Credit union advocates interested in a scholarship can contact their state foundation or league, or contact DE Training Facilitator Tom Decker at tdecker@ncuf.coop or 800-356-9655, ext. 4374. A running list of states confirming DE scholarships is posted on the NCUF website. “We realize the economy is tough, so we will do everything we can to help credit unions achieve a ‘triple bottom line,’” explained Decker, NCUF director of social impact management. “A triple bottom line will benefit credit unions’ business, membership and community.” This year’s DE training will incorporate emerging bottom-line discussions while providing traditional lessons in cooperative principles and credit union philosophy. “We plan to show how the member-centric business model will enable credit unions to weather the economic storm better than most for-profit institutions,” Decker said. “All financial institutions offer a commodity,” pointed out 2008 DE graduate Lily Newfarmer, president/CEO of Tarrant County CU, Fort Worth, Texas. “We are all trying to get the same loans, checking accounts and so forth. What sets credit unions apart from our fierce competition are our cooperative principles and credit union philosophy. If we don’t embrace these differences and show our members that we’re better because we’re unique, our very existence is in jeopardy.” The second DE training class will take place August 12-18 at IslandWood, an environmental learning center on Bainbridge Island, Wash. NCUF is the DE program’s primary sponsor. Support is provided by CUNA Mutual Group, Credit Union National Association, World Council of Credit Unions, state foundations and leagues.

Robbery suspect dies in getaway crash

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HARVARD, Ill. (3/11/09)--A man who allegedly robbed the Harvard Community CU died Monday in a single-vehicle crash while fleeing police officers. Robert Menk of Brookfield, Wis., entered the $9.3 million asset, Harvard,, Ill.-based credit union at about 9 a.m. and demanded money, according to Harvard Police Chief Dan Kazy-Garey. No one was injured. At the credit union, police would not say whether Menk was armed (Northwest Herald March 9). Menk left with the money on foot, but dye packs hidden with the cash activated outside the credit union, and the money was recovered, police said. When Harvard police officers arrived on the scene, they spotted a man, who was leaving a business establishment that was closed at the time, driving a Toyota Prius. When police tried to stop the vehicle, the driver fled. The vehicle then crashed into a tree, killing Menk.

National Maxwell Herring award winners honored

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WASHINGTON (3/11/09)--Recipients of the National 2008 Dora Maxwell Social Responsibility and Louise Herring Philosophy in Action Awards were honored during the Credit Union National Association (CUNA) Government Affairs Conference Feb. 25. They were chosen from the state-winning entries by CUNA’s national awards committee. The 2008 Dora Maxwell Award winners include:
* Great Horizons FCU, Hammond, Ind., in less-than-$5-million assets category; * Kekaha FCU, Kekaha, Hawaii, $5 million to $20 million; * Evansville FCU, Evansville, Ind., $20 million to $50 million; * Education First CU, Southgate, Mich., $50 million to $100 million; * Class Act FCU, Louisville, Ky., $100 million to $200 million; * Rogue FCU, Medford, Ore., $200 million to $500 million; * Chartway FCU, Virginia Beach, Va., $500-plus million; and * Flatirons Chapter of Colorado, Credit Union Chapters category.
Winners of this year’s Louise Herring Award are:
* Affinity First FCU, Minot, N.D., less than $50 million; * Jersey Shore FCU, Northfield, N.J., $50 million to $250 million; and * Credit Union 1, Anchorage, Alaska, more than $250 million.

MCUL regulator meet on stabilization plan

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LANSING, Mich. (3/11/09)--The Michigan Credit Union League (MCUL) and the state's Office of Financial and Insurance Regulation (OFIR) addressed the National Credit Union Administration's (NCUA) Corporate Stabilization Program at their spring meeting March 3.
Among those participating in a meeting with the Michigan Credit Union League are, from left: Office of Financial and Insurance Regulation (OFIR) Assistant Director John Kolhoff; OFIR Deputy Commissioner Roger Little; league Helpline Consultant Jody Dabrowski; and league representative Darl McLean. (Photo provided by the Michigan Credit Union League)
The meeting with OFIR Deputy Commissioner Roger Little and OFIR Assistant Director John Kolhoff was conducted at the league's new Lansing headquarters (Michigan Monitor March 10). League staff requested official guidance regarding the stabilization program and its effect on state-chartered credit unions. OFIR said it will keep MCUL advised and information will be communicated with credit unions promptly as it becomes available. Other topics were addressed to ensure league resources are used in the best way to train, consult and otherwise meet compliance needs of the credit unions, the league said. MCUL is planning a similar meeting with NCUA supervisory examiners in mid-April.

CU System briefs (03/10/2009)

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* HARRISBURG, Pa. (3/11/09)--PaCUSC, Pennsylvania's shared branching credit union service organization, announced the results of its board election. Nominees for each open seat were the only nominees presented. That means PaCUSC Chair Ralph Canterbury has declared the nominees elected to the board. They are incumbent Brian Hahn of American Heritage FCU, Philadelphia, and new board member Tom Smith of Choice One Community FCU, Wilkes-Barre. Each will serve a four-year term that begins in May (Life is a Highway March 10) … * RALEIGH, N.C. (3/11/09)--State Employees' CU (SECU) has added a new feature to its secure online Member Access. The feature, called Activity Today, identifies transactions that have been authorized by the accountholder but not fully posted yet to the account. In the past, members could see a field for Activity Today, plus a cumulative amount, but the amount did not indicate individual transaction details. The new feature allows the member to see the individual transaction amounts and a description of where the charge or credit originated. SECU has 660,000 members using its Member Access service … * GREEN BAY, Wis. (3/11/09)--The Brown County (Wis.) Chapter of
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Credit Unions, Corporate Central Credit Union of Wisconsin, and Schenk Business Solutions helped raise nearly $42,300 through supporting the 16th Annual Green Bay Reception for Children's Hospital of Wisconsin. More than 160 people attended. The funds raised will help advance efforts at the hospital's Milwaukee-based Herma Heart Center for pediatric cardiac patients. Austin DeGroot, a 13-year-old cancer patient, sang at the reception. From left are: Denise Hajos of the hospital; Cathy Becks, PCM Employees CU; Pat Josephson, Horizon Community CU; and Cari Josephson, Horizon Community CU. (Photo provided by PCM Employees CU) … * WASHINGTON (3/11/09)--Cory Johnston, chief investment officer of Duluth, Ga.-based Georgia Central CU, has joined the Credit Union Economics Group (CUEG), a working group of credit union officials dedicated to the financial well-being of the credit union movement. Johnston joined the corporate in 2002 and became senior vice president in 2007. He is the architect of Georgia Central's investment portfolio structure and its investment offerings for member credit unions. Before joining Georgia Central, Johnston worked for U.S. Central CU as a director/portfolio strategist. CUEG provides consensus macroeconomic forecasts and industry trend analyses related to the economy … * LANSING, Mich. (3/11/09)--Credit Union ONE, Ferndale, and Genisys CU, Troy, hosted newly elected U.S. Rep. Gary Peters (D-9) last month for a meet and greet with members at Credit Union ONE's Berkeley branch and Genisys' Waterford branch (Michigan Monitor March 10). "Congressman Peters has been a longtime support of credit unions, going back to his service as a state senator," said Credit Union ONE President/CEO Gary Moody. "A member of Congress should do more listening than talking," Peters said, adding, "I appreciate these credit unions providing me with a forum to meet local residents." From left are Moody, Peters, and Lon Bone, Genisys CU vice president of public relations and community involvement. (Photo provided by the Michigan Credit Union League) … * ALBANY, N.Y. (3/11/09)--The Credit Union Association of New York has launched its new website. For Credit Union Association of New York, use the link. The site, which has a new look, includes more information about serving New York credit unions, the association said. The navigation menu has been re-organized to reflect the association’s four core focuses: governmental affairs, member services, outreach and regulatory compliance ... * PLYMOUTH, Mich. (3/11/09)--Robert D. Vreeland, who served in different positions with Telephone Employees (now Telcom CU) for 59 years and helped create Service Center Corporation, died March 3 at the age of 88. Vreeland began his credit union career in 1950 as a teller for Telephone Employees CU. Later, he served as general manager until his retirement in 1981. He joined Telcom’s board of directors in 1984 as treasurer, and retired from the board in 1997 as a lifetime honorary director. He was a director and treasurer for the Michigan Credit Union League and received the league's Distinguished Service Award in 1982 (Michigan Monitor March 10) …

Washington CUs gaining on banks--ISeattle TimesI

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SEATTLE (3/10/09)--A positive article in Sunday's The Seattle Times cites Credit Union National Association statistics in reiterating what credit unions have been pointing out the past several months: credit unions are a safe alternative to banks. In Washington state, credit unions added about 140,000 members in 2008, while their deposits grew 8.8% to more than $27 billion. CUNA statistics show they loaned 9.6% more money last year than in 2007. Lending at Washington's banks and thrifts grew about 5.8%, said the Times, pointing out that credit unions have required no federal takeovers. "I feel a little bit bad about crowing about having a good year," John Annaloro, CEO of the Washington Credit Union League, told the newspaper. He noted many consumers are rethinking their banking relationships, especially in the aftermath of the Washington Mutual (WaMu) failure. Credit unions were built during the worst of economic times and that may be why they whether economic storms so well, Annaloro added. Still, the article points out the economic fallout has drifted toward credit unions, which have seen increases in loan losses. Gary Oakland of Boeing Employees CU (BECU), based in Tukwila, told the Times its charge-offs on bad loans nearly tripled to $79 million, even though that was just 1.1% of its total lending. The charge-offs are from members holding adjustable rate bank mortgages with payments that ballooned so much they couldn't pay their other loans--car loans, credit cards, and home equity loans. The credit union increased 11% in depositors throughout the year, with an intense two week activity in September as consumers fled WaMu for saver havens. In December, new-mortgage applications at BECU totaled more than $900 million, and the credit union can fund all of them. "Credit unions have kept to the straight and narrow since the movement gained federal approval in the midst of the Great Depression," said the Times. "Savings and loans also were depositor-owned institutions originally, but those largely morphed into investor-owned money machines prone to overheating and flaming out (see WaMu)," the newspaper said. In the article Lewis Mandell, visiting professor at the University of Washington's Foster School of Business and whose research focuses on financial literacy and consumer behavior, pointed out that very few credit unions were caught up in the subprime mortgages. "They are old-fashioned entities. They really don't aspire to be more than the are," he said. He also pointed out they pay "significantly higher" interest rates on deposits and offer better rates on loans. For the entire article, use the link.

CEO to IBaltimore SunI Longer loans help manage debt

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BALTIMORE (3/10/09)--A letter to the editor of the Baltimore Sun from a Maryland credit union CEO about extending mortgages says that as a lending institution, he would rather own a long-term 5% loan than have a bankruptcy judge cramdown a mortgage payment. Richard T. Webb, CEO of Hunt Valley, Md.-based Atlantic Financial FCU, was responding to a letter criticizing extending mortgages to 50 years or longer. The point, that such loans increase the borrower's debt is valid, Webb said but fails to consider the length of time most homeowners keep a mortgage. The average time a mortgage is held is around seven to nine years, Webb wrote, adding it would make sense to make smaller payments on a longer-term loan when the chances of staying in a house for 30 years are small. For the full letter, use the link.

Maryland to implement fin lit task forces recommendations

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BALTIMORE, Md. (3/10/09)--Maryland state education officials have written a letter indicating the state will follow through on the recommendations of the Maryland State Task Force on Financial Literacy. The task force included two credit union representatives. The task force submitted its recommendations in a report to the Maryland State Board of Edcuation (MSBE) in January. It requested that MSBE implement financial literacy education within the existing Voluntary Statewide Curriculum. The two credit union representatives on the governor's task force are Bert Hash, CEO of MECU of Baltimore, and Thom Beck, CEO of MCT FCU, Rockville. On March 2, Maryland State Superintendent Nancy Grasmick released the letter replying to the report. In it she outlined three steps MSBE will take in response to the task force report. MSBE will:
* Form a design team to ensure that K-12 content standards are developed that explicitly speak to financial literacy; * Develop a prototype course for local school systems to teach financial literacy concepts to middle and high school students; and * Convene an advisory group to engage local representatives from the education and financial services communities.

MDDCCUA testifies for financial literacy bill

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ANNAPOLIS, Md. (3/10/09)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) testified March 4 before a Maryland State Senate committee in support of a bill that would require developing a financial literacy curriculum for Prince George's County schools. Senate Bill 500, sponsored by state Sen. Anthony Muse (D-Prince George's), would require the county's board of education to develop curriculum content for a financial literacy course and require high school students to complete a financial literacy course to graduate from high school (FOCUS Newsletter March 9). During his testimony before the Senate Education Health and Environmental Affairs Committee, Brian Tate, MDDCCUA vice president of legislative affairs, expressed the association's strong support for financial literacy. "In today's complex society, an understanding of basic financial concepts is essential as today's students become tomorrow's consumers," Tate told the committee. Sen. Muse told the committee that financial literacy education is "essential" for young people to learn and that it is necessary to help them navigate a complicated financial landscape. He is also a member of the Governor's Task Force on Financial Literacy. Also testifying were representatives from the Maryland Coalition on Financial Literacy, the Maryland Bankers Association and two high schools.

Central States Mortgage suspends operations

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WAUWATOSA, Wis. (3/10/09)--CSMC Inc., a Wisconsin-based mortgage broker doing business as Central States Mortgage (CSM), suspended operations Monday, the company announced. While it no longer actively originates loans for the 250 credit unions it served nationwide, some of its staff are remaining to help transfer the operations to other providers, the company said in a press release. The firm will continue servicing loans for credit unions. "While the decision to close was a difficult one, it was necessary and in the best interest of our shareholders," said CSMC Board Chairman Dean Wilson, CEO of FOCUS CU, Menomonee Falls, Wis. Wilson said the firm's shareholder credit unions already reflected the loss of their investment in the firm as part of their 2008 financial statements. "Our goal is to assist our customers now such that this development does not affect service to their members," he said. Last month, a Wisconsin court awarded U.S. Bank a $2.7 million judgment against Interim Funding LLC of Wauwatosa, Wis., a firm owned by the founder and former CEO of CSM, Dick Jungen. The bank sued Jungen and five executives of Interim, including three former CSM employees, alleging the company defaulted on a $3 million revolving loan from the bank. CSM fired Jungen in July 2008 after the credit union service organization learned he secretly controlled Interim Funding. The CUSO sued in February, alleging he scammed the CUSO out of $15 million (News Now March 2). The case is pending (The Business Journal Milwaukee March 9). Central States' parent company, CSCM, also is a defendant in a lawsuit filed Feb. 24 by Equitable Bank of Wauwatosa involving a foreclosure on a condo project in West Allis, Wis. CSMC holds a $4.3 million mortgage with a development group that includes Jungen, said the newspaper. Central States measures sales by loan originations, which totaled $523 million in 2008, a 26% drop from $707 million in 2007. Among the credit unions that had write downs from the distressed loans was Prime Financial CU in Cudahy, Wis., which wrote down $5.5 million. That credit union was taken over by the Wisconsin regulator on Feb. 26 (News Now March 3).

Feliciana FCU closes branch near shuttered mill

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ZACHARY, La. (3/10/09)--Feliciana FCU has shut down its St. Francisville, La., branch and put the building up for sale. The $23.9 million asset Zachary, La.-based credit union has served employees of the shuttered Tembec paper mill for the past 40 years (theadvocate.com). All main office operations have been moved to the Zachary, La., branch. Members can get services there or at its New Roads branch. The 3,000-member credit union’s St. Francisville branch was built on land donated by the mill several decades ago. It had made logistical sense to have the branch just a few miles from the mill, even though the credit union was diversifying its customer base and had become a full-service financial institution, Gigi Robertson, Feliciana president/CEO, told the newspaper. However, with the mill closed now for about 18 months, and the Zachary branch having more of a central location, the St. Francisville branch location no longer made sense, Robertson added.

Two corporates shed ratings agency programs

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COLUMBUS, Ohio and WARRENVILLE, Ill. (3/10/09)--Two corporates announced that they have discontinued relationships with their ratings agencies. Corporate One FCU, Columbus, Ohio, announced Friday that it is discontinuing its commercial paper program and has terminated relationships with Standard & Poor’s and Moody’s. Corporate One will save its members more than $260,000 annually primarily by no longer obtaining short-term credit ratings from the rating agencies, the credit union said in a release. “Credit unions are already being negatively affected by the current economic downturn,” Corporate One said. “Given the unreliability to generate liquidity by issuing commercial paper, it makes sense to save our members from paying for our debt ratings.” "Current high levels of cash and cash equivalents at the corporate (currently at $1.4 billion) combined with the ability to generate additional liquidity(approximately $2.1 billion) through other tested and available sources, drove the decision to discontinue our CP program," said Lee Butke, president/CEO. Members United, Warrenville, Ill., also terminated its relationship with Standard & Poor’s to trim expenses, said Todd Adams, Members United chief financial officer. The corporate also may consider suspending a second agency relationship, he added.

Are CUs relevant asks CUNA Council white paper

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MADISON, Wis. (3/10/09)--Credit union professionals can learn ideas and receive advice to ensure that credit unions remain relevant in the current marketplace in a new all-CUNA Councils white paper. “Are Credit Unions Relevant?” explains that one of the best ways for credit unions to stay relevant is by being member-centric and fully understanding each member’s individual needs. It also addresses the three factors to help create relevance: do the right thing, know your markets, and differentiate. The paper also offers a caveat to its credit union readers: “If you’re not offering competitive products and services, you can talk about the credit union philosophy all you want, but it won’t bring people in, or keep them.” “The public doesn’t really care if you are a credit union or a bank--what they care about is, ‘Can you meet my needs? Can you facilitate my dreams?’” said D.G. Markwell, senior vice president of marketing and business development at MAX FCU, Montgomery, Ala. “It’s too easy to wake up every day and do the same thing we did yesterday, last week, last month, last year and last decade.” For more information, use the link.

Wisconsin CUs boosting loan-loss allowance

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MADISON, Wis. (3/10/09)--Several of Wisconsin’s credit unions boosted their reserves to offset loan losses this year, but the Wisconsin Credit Union League notes that credit unions remain healthy. “Wisconsin credit unions saw some of the largest gains in the country in loan, asset and membership growth,” said Brett Thompson, Wisconsin Credit Union League president/CEO. Wisconsin credit unions are continuing to lend because members are relying on credit unions for loans now more than ever, Thompson added. As such, many credit unions also are preparing for potential delinquencies given the troubled economy. Fourth-quarter reserves at credit unions increased in 2008, according to the State Office of Credit Unions (The Wisconsin State Journal March 6). The $1 billion asset UW CU and $1.2 billion asset Summit CU, two of the state’s largest credit unions and based in Madison, increased their allowances this year. Summit bumped its allowance to $10.5 million from $2.6 million in December 2007. Summit merged with Great Wisconsin CU last October. UW CU increased its allowance to $6.2 million from $4.5 million last year. It also merged with MATC CU in November, which had no delinquencies, the newspaper said. The $151 million asset Heartland CU, Madison, increased its allowance to $662,625 from $651,535. The $153 million-asset Heritage CU, Madison, boosted its allowance to $759,968 from $751,077. Larger credit unions may be boosting their reserves in preparation for losses from real estate loans, the State Office of Credit Unions told the newspaper. About 66% of larger credit unions’ portfolios are from real estate, whereas smaller credit unions have about 13% of their portfolios in real estate, according to the Office of Credit Unions. Kim Sponem, Summit CU president, said Summit anticipates delinquencies and charge-offs to increase this year. She also noted that credit unions with a higher percentage of real estate loans may be hit harder by losses because real estate loans are larger. UW CU has adjusted its loan loss reserve also, but Lisa Girdharry, UW CU marketing director, told the newspaper that the credit union’s loan losses are lower than the industry average. Wisconsin credit unions’ delinquencies increased only slightly last year, by 1.44%, the league noted.

N.J. Assembly bill on state funds includes CUs

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TRENTON, N.J. (3/10/09)--A bill introduced in the New Jersey State Assembly aimed at spurring economic growth by creating more lending capacity among financial institutions would give credit unions equal footing with banks, according to the New Jersey Credit Union League. The bill was introduced in the Assembly Appropriations Committee Monday and has a companion bill in the Senate. The Senate Budget and Appropriations Committee approved the legislation with a vote of 14-0 (The Weekly Exchange March 2). The legislation would temporarily expand the range of investment vehicles available to the director of the New Jersey Division of Investments for the New Jersey Cash Management Fund and state pension fund. It also would authorize the director to invest in any obligation guaranteed by the National Credit Union Share Insurance Fund or the Federal Deposit Insurance Corp., the league said. The league submitted a statement of support to the Senate and will do the same for the Assembly. The New Jersey Bankers Association and the New Jersey Business and Industry also registered their support, the league said.

CU System briefs (03/09/2009)

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* WASHINGTON (3/10/09)--Eight credit union officials from the United Kingdom (UK) attended the Credit Union National Association Governmental Affairs Conference and visited credit unions in the area, says to the Maryland and District of Columbia Credit Union Association (MDDCCUA) . They toured the FRB FCU and the Federal Reserve Board, and the Capitol after MDDCCUA's legislative reception Feb. 25. MDDCCUA signed a partnership last year with the Association of British Credit Unions Ltd. Two World Council of Credit Unions International Partnerships have formed among: MECU, Baltimore, with UK's Capital CU and Agriculture FCU, Alexandria, Va., with UK's Scotwest (FOCUS Newsletter March 9). From left, Robert Taylor, director of Copperpot CU, which serves police officers in Northamptonshire, Eng., meets Danny Gregg, president/CEO of Police FCU, at a legislative luncheon. Hosting the visitors were Agriculture FCU, District Government Employees FCU, FRB FCU, HEW FCU, MECU, and Police FCU. (Photo provided by the Maryland and District of Columbia Credit Union Association) … * COLUMBIA, Md. (3/10/09)--The board of directors of the Maryland and District of Columbia Credit Union Association (MDDCCUA) voted last week to move MDDCCUA's Fourth Annual Meeting and Convention to Baltimore's Inner Harbor from its original location in Ocean City (FOCUS Newsletter March 9). Board Chairman Wes Bone noted that "credit unions are facing extraordinary times." The board made the change because of several factors: An online survey and conversations with CEOs indicated most would be challenged by the cost of an Ocean City event, which would involve a three-night hotel stay. A more local event allows attendees the option of fewer or no hotel room costs, and mileage and other travel expenses would be less … * LANSING, Mich. (3/10/09)--The Michigan Credit Union League unveiled its redesigned website, Lovemycreditunion.org, to showcase its "CU Difference" campaign and Invest in America auto loan program. The theme, "Love + Trust = My Credit Union," focuses on why members love their credit union and the ways credit unions have earned their trust. It also highlights the Invest in America partnership with CUcorp, MCUL's wholly owned subsidiary; General Motors; and Chrysler. The website has more than 25,000 visitors per week … * HARRISBURG, Pa. (3/10/09)--Mike Wishnow, senior vice president, communications and marketing for the Pennsylvania Credit Union Association, participated on the Steve Cordasco WPHT radio show, "The Big Talker 1210," Saturday. The two-hour show airs live on Saturdays from 8 a.m. to 10 a.m. Wishnow told listeners that credit unions continue to make loans to small businesses as credit dries up from other sources. He also discussed pending legislation that would increase the cap on small business loans from 12.25% (Life is a Highway March 9) … * SOMERVILLE, Mass. (3/10/09)--Cambridge Portuguese CU (CPCU), based in Somerville, Mass., is teaming up with the Massachusetts Alliance of Portuguese Speakers (MAPS) to help immigrants with their English skills (wickedlocal.com March 7). CPCU donated $2,500 to the organization to sponsor English for Speakers of Other Languages (ESOL) classes for members. Already 16 members have benefited from the free, 12-week course sponsored by the $80.7 million asset credit union. The two-hour class meets two evenings a week and is open to the community at half price because of the credit union's support … * LEXINGTON, Ky. (3/10/09)--Every year, University of Kentucky FCU
Click to view larger image Click for larger view
donates $15,000 in scholarship funds--$5,000 to each of the three main entities it serves: University of Kentucky (UK), Eastern Kentucky University (EKU) and the Kentucky Community and Technical College System (KCTCS). The scholarships are awarded by the separate Financial Aid offices to students needing financial assistance. From left are: David Kennedy, UKFCU president/CEO; Kayla Chandler, EKU student; Claire Scholly, KCTCS North American Racing Academy student; and Greg Baker, UKFCU vice president of sales and marketing. Not pictured are Christopher VanDevender, UK student; and Ryan Pacheco, KCTCS North American Racing Academy student. (Photo provided by University of Kentucky FCU) … * HARRISBURG, Pa. (3/10/09)--The Pennsylvania Credit Union Association and Pennsylvania Credit Union Foundation helped sponsor the third annual Young Men's Futures Symposium, organized by the Junior Achievement (JA) of Central Pennsylvania. It provides guidance to male high school juniors and sophomores in career choices, interviewing techniques and budgeting, and encourages one-on-one discussions between the students and community business and government representatives (Life is a Highway March 6). George Nahodil (pictured here, standing), executive vice president, marketing, Members lst FCU, led a budget session for the 125 student participants. Jesus Cruz, vice president, Belco Community CU, facilitated eight students; Paul Wagner, vice president, Hershey FCU, facilitated eight students and was mentor for two students; and foundation Executive Director Joe Wambach, was a career presenter for eight students and mentor for two. JA has completed four symposiums during the 2008-2009 period under a $10,000 foundation grant. (Photo provided by the Pennsylvania Credit Union Association) …

Texas CUs member growth shines

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FARMERS BRANCH, Texas (3/10/09)--Texas credit unions saw robust membership growth of 2.9% in 2008, their fastest growth since they posted 3% growth in 2003. Several factors caused the increase, Dick Ensweiler, president/CEO of the Texas Credit Union League and chair of the membership growth task force for the Credit Union National Association, told News Now. The factors include:
* Credit unions have embraced REAL Solutions for a full year, with 24 Texas credit unions signing up. “This has brought on new members who might not have normally come aboard,” Ensweiler said; * Texas has the second-largest shared service center in the U.S. for credit union members, so there are lots of points of contact with members; * Texas has a more stable economy and lower unemployment than most states; and * Of all the people who moved across state lines in the U.S. last year, about 38% moved into Texas, Gov. Rick Perry told Ensweiler.
Ensweiler said the reasons so many people moved into Texas in 2008 are because the state has a stable economy, lower unemployment than the national average, a great climate, no state income tax, and a pro-business environment. “Therefore, as more people move to Texas, credit unions are getting their share of new members,” he explained. Texas is below the foreclosure average for Sunbelt states, and it has home equity laws that are not consumer friendly. Therefore, mortgage refinancings and home equity loans have not been a big part of credit unions’ membership growth, Ensweiler said. “We focus on auto lending,” he explained. “Texas has a higher percentage of auto lending compared with all other types of lending, relative to most states. So indirect lending is big here. Lots of auto dealers in Texas use credit unions as their primary lenders. That brings in new members. We get a significant number of members through indirect lending.” The Texas league also helps credit unions deliver their safety and soundness messages to the public. “We give credit unions talking points, a safety-and- soundness tool kit, and press releases to promote their credit union to members,” Ensweiler said. Ensweiler offered some 2008 statistics, comparing Texas credit unions with those nationwide:
* Increase in money market shares: Texas 19.6% and U.S. 14.8%; * Increase in regular shares: Texas 8.3% and U.S. 5.3%; * Increase in share drafts: Texas 5.3% and U.S. 3.1%; * Increase in used-auto loans: Texas 9.9% and U.S. 5.1%; and * Increase in new-auto loans: Texas 0.4% and U.S. -6.6%.
Looking to future growth for Texas credit unions, Ensweiler said that it is important to educate consumers about two facts: credit unions are open for business and have money to lend, and credit unions are strong and secure. “In times like these, there is a tendency for credit unions to hunker down, crawl in a shell and cut back when--in fact--they have very strong reserve postures, and other financial institutions are cutting back,” he explained. “So the right philosophy is to spend a little more now on marketing and to spend more to make sure that credit union employees are trained as much as possible in service and sales,” he continued. “Because credit unions should be saying ‘We are the answer,’ instead of cutting back.” When financial institutions’ reserves are low, often they don’t want to take on more savings because they need more reserves to back them up, Ensweiler explained. However, credit unions are well-positioned with their capital and reserves to take on more savings and to issue more loans. “We are open for business,” Ensweiler concluded.

28 Minnesota CUs seen as the REAL Deal

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WASHINGTON (3/10/09)--Twenty-eight Minnesota credit unions were recognized as “The REAL Deal” during the Credit Union National Association’s (CUNA) Governmental Affairs Conference in Washington, D.C., Feb. 24. REAL Deal certification recognizes credit union service in loans, financial education, charitable work and partnerships with non profits. The program was created by CUNA and implemented by the Minnesota Credit Union Network (MnCUN). “This program is a great way for credit unions to summarize the good works that they do,” said Monica Weber, MnCUN political advocacy director. “Credit unions certified as the REAL Deal set themselves apart from other financial institutions and are passionate about member service.” For a list of the credit unions that were recognized, use the link.

Wisconsin CUs nab Governors Award for youth branches

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PEWAUKEE, Wis. (3/10/09)--Wisconsin credit unions received their third Governor’s Financial Literacy Award for helping youth recognize the value of saving money, according to the Wisconsin Credit Union League. Individual credit unions receiving the award include Brokaw CU, Weston; Educators CU, Racine; STAR CU, Madison; and UW CU, Madison. Credit unions last received the award in 2008. “Wisconsin has gone far beyond many states in supporting financial education,” said Brett Thompson, president/CEO of the league. “Not only has the Department of Public Instruction defined competencies for personal finance that students should acquire prior to high school graduation, but the [Gov. Jim] Doyle administration has supported effective partnerships across the public, private and nonprofit sectors to advance financial education efforts without adding additional costs to taxpayers.” Wisconsin credit unions also operate 80 youth-run branches inside schools. The branches help students make deposits and withdrawals from savings accounts. Through the credit unions, students “avoid debt, complete their educations and become self-supporting members of the economy through regular saving and responsible borrowing,” Thompson said. “Young people have witnessed within their families the economic pain affecting our country,” Thompson added. “The fact they are saving shows they understand that the proverbial ‘rainy day’ is inevitable and it’s never too early to start building a financial cushion.”

New England leagues sponsor Homes for Our Troops event

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MARLBOROUGH, Mass. (3/9/09)--Three New England leagues are joining together as event sponsor for the Homes for Our Troops third annual gala in June. The Massachusetts Credit Union League, the New Hampshire Credit Union League and the Credit Union Association of Rhode Island will sponsor the event in Boston June 13 (eWeekly March 4). All the proceeds will be used to help build another home constructed for servicemen and women who are seriously injured during duty. League President Dan Egan sent a letter to credit unions asking they support the cause. "There is really no better way for us to mark the 100th anniversary of the founding of the credit union movement than to demonstrate our philosophy of people helping people by giving a helping hand to these men and women who have given so much for us," Egan said.

Wisconsin league CEO interviewed on safetysoundness

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PEWAUKEE, Wis. (3/9/09)--Credit unions in Wisconsin are riding out the current economic storm remarkably well, according to an article in WisBusiness.com Friday. The publication interviewed Brett Thompson, president/CEO of the Wisconsin Credit Union League, who said Wisconsin credit unions are in good shape because they stayed away from toxic subprime mortgages and other exotic loans that brought down some lenders. He pointed out that The Wall Street Journal and other national publications have cited credit unions for their safety and soundness during difficult times. All in all, he said, "I think we are safe, sound and ready to lend." Over the past 12 months, Wisconsin credit unions have had the second-highest asset growth of credit unions in the U.S., the highest loan growth and the sixth-highest membership growth. Thompson also addressed the lending cap on member business loans and noted that at least 13 credit unions in the state are up against the 12.25% of assets cap. "Credit unions here in Wisconsin have historically always made small business loans. Many of them can point to the initial minutes of their forming meetings where some of their first loans were to a local small business," he said. To view the entire article or listen to an audio of the interview, use the link.

Kentucky league addresses cramdown opposition on radio

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LOUISVILLE, Ky. (3/9/09)--Kentucky Credit Union League President Wendell Lyons described credit unions' objections to cramdown provisions in legislation and told listeners facing foreclosures to communicate with their lenders during two segments of the "Tony Cruise Show" on WHAS 84 in Louisville last week. The five-minute shows aired Wednesday and Thursday. In segment one, Lyons noted that devaluing the house and requiring lenders to write down the loss will lead to less homeownership in the long term, as an unintended consequence of the provision. Lenders will end up increasing rates and fees, and raising credit standards. "The people who qualify may not be the people the administration is trying to help." Credit unions have no problem applying the changes to high-cost mortgages, predatory loans, loans with negative amortization or loans that a bankruptcy judge finds were obtained under fraudulent or abusive underwriting standards. He also said that homeowners taking advantage of cramdowns should not be allowed to remortgage the property, and if the home is sold at a profit, the lender should be repaid from the balance it was required to write down. Segment two discussed the effects on second mortgages and home equity lines of credit. These could become unstable, too, Lyons said. He noted that credit unions and banks in Kentucky have lended more responsibly. When asked if the Clinton administration's policies of providing more housing opportunities pressured lenders into giving unqualified borrowers homes, Lyons noted that credit unions haven't seen such pressure. "Credit unions have done a very responsible job of lending throughout the last 75 years," he said. To those who may have lost jobs and are facing possible foreclosures Lyons advised communicating with the lenders. "Lenders don't want to foreclose on property," he said, noting that foreclosures are expensive. "Get in touch with your mortgage lender and work out a solution." He noted lenders can offer a repayment plan, extend the term of a loan, and make loan modifications of their own to avoid bankruptcy. To listen, use the link to the station's website and click on the "mortgage cramdown" and "facing foreclosure"links.

Texas league announces director election results

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FARMERS BRANCH, Texas (3/9/09)--The Texas Credit Union League announced election results for its league director positions in two asset categories. Newly elected are:
* Z. Suzanne Chism, president of Texas Health Resources CU, Dallas, for asset category b ($10 million-$20 million); and * Nancy Croix Stroud, president, First Class American CU, Fort Worth, for asset category c ($20 million-$50 million).
The other asset category elections were uncontested. Directors are:
* Carol Murray, president of Southeast Community CU, San Antonio, asset category a (under $10 million); * Kay Stewart, president, North East Texas CU, Lone Star, asset category d ($50-$100 million); and * Buddy Schroeder, president, United Heritage CU, Austin, asset category e (more than $100 million).
Directors serve two-year terms. The 2009-2011 terms officially begin after the league annual membership meeting and board organization meeting in April in Austin.

CUs get national media attention on MBL proposal

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MADISON, Wis. (3/9/09)--Credit unions received national media attention Thursday from various news sources after Sen. Charles Schumer (D-N.Y.) announced that he intends to draft legislation that would lift credit unions’ member business lending caps. Articles published by Dow Jones, The Wall Street Journal and Reuters have noted Schumer’s plans for the legislation, citing Credit Union National Association (CUNA) statistics, and quoting CUNA President/CEO Dan Mica. Mica commented on credit unions’ willingness to help small businesses thrive in a tough economy if their member business lending (MBL) caps of 12.25% are lifted. “Credit unions want to help but many are chafing against the arbitrary cap that exists under current law,” Mica told the newspapers. Credit unions could lend up to $10 billion in the first year after MBL restrictions are rasied, he added. Schumer announced his intent to draft the legislation on Thursday, saying that the move would “help credit unions fill the gaping void in small-business lending during this credit crisis.” To read the articles, use the links.

CUNA Mutual CEO credits reorganization for survival

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MADISON, Wis. (3/9/09)--CUNA Mutual Group initiated wide-ranging changes as part of a company reorganization in 2005 that now leave it in good shape to meet whatever challenges lie ahead, Jeff Post, CUNA Mutual CEO, told attendees at an information technology conference in Madison, Wis., last week. In 2007, CUNA Mutual posted record net income of $184 million on revenue of $2.8 billion (The Capital Times & Wisconsin State Journal March 5). The housing and mortgage industry collapse in 2008, along with the subsequent credit crisis and stock market declines, resulted in the company posting a $148 million loss in net income last year. However, the company, as a result of the changes it made over the past three years, weathered the economic turmoil in 2008 and remains ready for the future, Post said at the conference. In 2008, CUNA Mutual had total revenue of $2.9 billion, an operating gain of $150.7 million, and operating revenue growth of 6.8%, Phil Tschudy, CUNA Mutual media relations manager, told News Now. Post said in 2006 the new CUNA Mutual is “developing a performance-based culture” by assembling experienced, world-class senior leaders (News Now June 27, 2006). The company's foundational initiatives--corporate governance, investments, sales distribution and back-office transformation--reshaped its products, services and operations. That resulted in a company that is easier to do business with; is more efficient and effective; which lowers credit unions’ costs; has stronger customer and back-office service; and requires higher performance standards for all employees, Post said in 2006. Among the elements in the three-year plan were:
* A new leadership team leading improved decision-making and priority-setting processes; * Establishment of a single point-of-sales contact for credit unions; * A 90-basis point improvement in investment performance in the company's general account, and investment performance improvement in credit union employee and member products; * The building of a new customer service center with expanded coverage, new technologies and higher service standards; and * A new model for the company's internal services.

ESPN airs Hispanic radio spots for Wisconsin CUs

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MILWAUKEE (3/9/09)--ESPN will air Hispanic radio spots for Wisconsin credit unions that are scheduled to run in the Milwaukee area starting this week, Credit Union Service Centers said.
Ana Martinez (right) records an ad for Credit Union Service Centers that will begin airing on ESPN Desportes in Milwaukee this week. (Photo provided by Credit Union Service Centers)
The one-minute spot will run 17 times a week for 10 weeks between 6 a.m. and 7 p.m. CDT on 1510 AM ESPN Desportes in Milwaukee. The station broadcasts sports coverage and news in Spanish. The ad tells credit union members about Credit Union Service Centers and inform non-members they can access other services at the branches. The ad also encourages all listeners to consider credit unions for their banking needs. Through Credit Union Service Centers participating credit unions’members can cash checks and make deposits; make cash and check withdrawals; pay loans; conduct transfers; purchase money orders, traveler's checks and official checks; obtain cash advances; and inquire about balances.

Missouri CUs testify on two state bills

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ST. LOUIS (3/9/09)--Missouri credit unions testified in two state legislative hearings last week and were on hand to monitor bills in several others. In the state’s Senate General Laws Committee, the Missouri Credit Union Association (MCUA) opposed Senate Bill 267, which would institute a complex system of lien waivers between general contractors and subcontractors. Also testifying against the bill were the title company industry, mortgage bankers and Missouri bankers (The Missouri difference March 6). MCUA opposes the bill because the proposed system would make it difficult to determine whether a title is clear. Using a title company to disburse funds for construction and renovation loans would also require credit unions to pass along several hundred dollars in costs to the member. Title companies said at the hearing they couldn’t estimate what they would charge to disburse funds under the proposed language. In the House Special Committee on Urban Issues, credit unions testified against House Bill 753 and House Bill 836, which would require 90-day notices of foreclosure. Credit unions are among a work group talking with bill sponsors to determine if there is an alternate solution to providing renters with notice that the owner of the home they are leasing is going into foreclosure. In Kansas City and Central Missouri, some people have returned home from work to find their belongings on the street--with no prior notice. Missouri statutes do not include a specific requirement in the unlawful detainer chapter to notify tenants. James Spafford, CEO of Postal and Community CU, St. Joseph, visited lawmakers Wednesday and helped explain details of the foreclosure process to legislators. This week, MCUA expects a meeting to be called to work on modifications to S.B. 267. The foreclosure bills are scheduled for a committee vote this week. MCUA also will visit legislators who requested information on payday loan alternative programs offered by credit unions.

CU System briefs (03/06/2009)

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* SAN FRANCISCO (3/9/09)--The California Senate Rules Committee voted 5-0 Wednesday to support the confirmation of Department of Financial Institutions Commissioner William S. Haraf to that position. Gov. Arnold Schwarzenegger appointed Haraf as commissioner, effective March 8, 2008. Haraf was sworn in on April 8, 2008, by Business, Transportation and Housing Agency Secretary Dale E. Bonner. Haraf said the full Senate will take up his confirmation within two weeks and the process is "generally pro forma." He noted the "vast majority of financial institutions licensed by DFI are healthy and operating with good capital cushions." … * VANCOUVER, Wash. (3/9/09)--Parker Cann, president/CEO of Vancouver-based Columbia CU, will leave the credit union April 30 to become senior vice president and corporate counsel at Boeing Employees' CU (BECU), the two credit unions announced. Cann will start his new position May 4. He will oversee the division that manages BECU's legal affairs and influences its legislative and regulatory environment. Cann joined the credit union four years ago after its attempted conversion to a bank charter failed. He has nearly 30 years' financial industry experience. Prior to joining Columbia, he served three years as executive vice president and chief operating officer at Arrow Head CU and seven years as the head credit union regulator in Washington state. Columbia's board will conduct a nationwide search for a replacement. It expects the search process to take at least three months … * CHESTERFIELD, Mo. (3/9/09)--An alert teller at Chesterfield-based First Community CU helped stop a check fraud scheme that originated in Springfield, according to the Missouri Credit Union Association (The Missouri difference March 4). The credit union's branch coordinator, Berni Roth, sent an alert warning employees of local fraudulent check activity on Feb. 26. The alert, which included surveillance photos of the suspect, arrived a few minutes before the suspect appeared at the credit union's drive-through in St. Charles and allegedly tried to pass a stolen check. The drive-through teller, Jennifer Parker, recognized her from the photos. As employees questioned the transaction, the suspect left. Denecia Simpson, Springfield, was arrested on a forgery charge. "With such a large branch network, it's essential to use technology to communicate," said Glenn D. Barks, president/CEO of the $1.351 billion asset credit union … * FORT WORTH, Texas (3/9/09)--Friday the 13th was a lucky day for American Eagle pilot Cap. William Karr Jr. of Lake Dallas, Texas. On Feb. 13, American Airlines FCU President/CEO Angie Owens called Karr to say he was $50,000 richer and the grand prize winner of $50K Your Way Sweepstakes. The sweepstakes was sponsored by Digital Insight, a third-party provider of the credit union's online banking services. Karr was randomly chosen in the nationwide contest to help raise awareness of the benefits of paying bills online. In the sweepstakes, new Bill Pay users earned $10 by paying 10 bills online. Ten daily instant prizes of $100 were also available, as well as a chance for the grand prize … * HARRISBURG, Pa. (3/9/09)--Pennsylvania Credit Union Association President/CEO Jim McCormack and State Treasurer Rob McCord gave an overview of PCUA's Credit Union Better Choice payday loan alternative program during a news segment of "Pennsylvania Newsmakers," taped Wednesday in Harrisburg. McCord, who took office in January and is supportive of the program, said he believes all Pennsylvanians should have access to fair and appropriate finance tools. McCormack noted 80 credit unions with more than 200 branches in the state have agreed to offer the program. It was launched in October 2006 through a partnership with the Department of Treasury and a $20 million investment in the credit union system. The program, part of PCUA's monthly financial education sponsorship, can be seen across Pennsylvania from March 15 through 17 (Life is a Highway March 5) … * PITTSFIELD, Mass. (3/9/09)--Greylock announced that its annual employee United Way campaigns collected a record $70,000. President Angelo C. Stracuzzi thanked campaign tri-chairs Dan Dillon and Sherry Van Bramer from Greylock FCU and Kathy Chenail from Greylock Insurance Agency for their efforts. Greylock also donated the services of two employees--Dan Dillon, relationship development officer, and Joanne Billow, marketing services coordinator--and provided an additional $29,691, including a partnership with Johnson Ford to donate a car in a raffle for United Way … * HARAHAN, La. (3/9/09)--Helen Godfrey-Smith, CEO of Shreveport (La.) FCU, is among seven recipients of the Louisiana Legislative Women's Caucus Foundation's 2009 Women of Excellent Awards, says the Louisiana Credit Union League (eNews March 4). The award recognizes extraordinary women of outstanding professional excellence across the state for their achievements and contributions. Each of the seven categories had one recipient, and Godfrey-Smith was chosen in the Banking and Finance category. Awards will be presented at the Women of Excellence Awards Gala on May 6 in Baton Rouge …

Patelco confirms four branches closing

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SAN FRANCISCO (3/9/09)--Patelco CU has confirmed it will close four branches on April 30. The closings come "in the context of historic times. That said, these are more strategic branch network decisions and not cost-cutting measures," Andy Hunter, president/CEO told News Now. In the past year, the San Francisco-based Patelco has made two acquisitions with six branches, opened a branch, and closed a branch, Hunter said. Branches effected are in Eureka, Windsor, Bakersfield, and Pleasant Hill. Closures are based on a matter of their location. One is an acquired branch that is close to an existing Patelco branch. Others are outside Patelco's primary membership area. Members served by those branches have other services available in the areas, including other branches, online banking, shared branches and ATMs, Hunter added. One branch, in Bakersfield, is a shared branch with another credit union under the Financial Service Centers Cooperative (FSCC) network. "We are working with the other credit union" for a transition, Hunter said. Of the 520 full-time equivalent jobs employed by Patelco, about 12 jobs will be lost, although some may be absorbed. The closures will leave the credit union with 43 branches.

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.
Click for video Click for video.
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.

CU finances Flagstaffs first solar housing development

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FLAGSTAFF, Ariz. (3/5/09)--Arizona State CU has partnered with Hope Construction to build Flagstaff, Ariz.'s first solar-powered multi-family housing development. The development is described as "the green standard" for eco-friendly residential planning and construction. "The immediate benefit of building in the community is clear, but what makes this especially remarkable is that the building itself is designed to increase efficiency and sustainability, which, in turn, provides stability in the community and the natural environment," said Paul B. Stull, senior vice president of marketing at the Phoenix-based, $1.3 billion asset credit union. The credit union provides loans to community focused businesses such as Hope Construction to support a local and prosperous economy, and it also maintains a sustainable financial model in its member-owned, democratically controlled structure.

Chrysler details Invest in America CU discount

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DETROIT (3/5/09)--Chrysler announced a change to its Invest in America credit union discount, effective Tuesday. Credit union members will be able to receive a $1,000 cash allowance on any of the vehicles listed below. Discounts will also be available on previously excluded SRT models (LoneStar Leaguer March 4). Chrysler reports that 90% of the sales using the credit union discount were on vehicles that qualified for the $1,000 discount. Chrysler’s $1,000 Bonus Cash Incentive applies to these 2008 model cars: Dodge Models:
* Charger; * Magnum; * Grand Caravan; * Ram (all models); * Dakota; * Durango; and * Nitro.
Chrysler Models:
* 300/300C; * Town & Country; * Aspen; and * Pacifica.
Jeep Models:
* Wrangler; * Liberty; and * Grand Cherokee.
The incentive applies to these 2009 model cars: Dodge Models:
* Charger; * Challenger; * Grand Caravan; * Ram (all models); * Dakota; * Durango; * Nitro; and * Journey.
Chrysler Models:
* 300/300C; * Town & Country; and * Aspen.
Jeep Models:
* Wrangler; * Liberty; and * Grand Cherokee.

Vermont CUs have highest growth rate in nation

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SOUTH BURLINGTON, Vt. (3/5/09)--Asset growth at all Vermont credit unions in 2008 was 17%--the highest growth rate in the nation and double the national median of 8.7%, according to a 2008 Call Report Data Summary from the Credit Union National Association (CUNA). The data, summarized by CUNA’s Economics & Statistics department, also indicates Vermont credit unions were above national medians in other areas (Newslines Express Feb. 27). Vermont ranked second in the fewest net charge-offs as a percentage of average loans, third in fewest delinquent loans, ninth in loan-to-savings ratio and 15th in 12-month loan growth. The state’s rankings for fixed-rate first mortgages (No. 23) and return on assets (No. 26) fall just above and right at the national medians of 13.1% and 0.49, respectively. Although Vermont’s credit union membership grew at a rate of 1.7% in 2008, this lags slightly behind the national median of 1.9%. Given the asset growth Vermont credit unions experienced last year, the state’s net worth ratio of 9.9% was negatively influenced by large deposit numbers, the Association of Vermont Credit Unions said. However, the state’s average net worth is still nearly 3% above what the National Credit Union Administration determines as “well capitalized.”

Moodys changes long-term rating outlook for Quebecs CUs

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MONTREAL (3/5/09)--Moody's Investors Service said it has changed the long-term rating outlook for Desjardins, the Quebec-based network of caisses populaires or credit unions. The debt-rating service said the rating outlook moved to negative from stable, but it left intact the "Aa1" credit rating for the credit union network (The Canadian Press March 3). Monday Desjardins Group had announced a $476 million loss during fourth quarter 2008, compared with a surplus of $273 million in fourth quarter 2007. Moody's report acknowledged Desjardins' "sound asset statement, its excellent capitalization with capital ratios above regulatory targets and among Canada's best in the financial sector, the quality of its loan portfolio and its dominant market share in Quebec." The rating change stemmed from losses associated with asset-backed commercial paper (ABCP) and their impact on the Desjardins Group's financials for 2008. ABCPs are short-term investments that were affected by the U.S. subprime mortgage crisis.

Washington CUs ads provide respite from economic chaos

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FEDERAL WAY, Wash. (3/5/09)--A series of TV and print ads with the theme “Financial Chaos-Free Moments” is being run statewide by Washington state credit unions to emphasize credit unions’ stability in a time of economic chaos. The campaign started in February and will run through the end of March, John Annaloro, president/CEO of the Washington Credit Union League, told News Now. The ads were made by Big Bang Electrical--a Seattle-based advertising agency. “The campaign is aimed at all the members of the credit union system,” Annalaro said. “It speaks to existing members and new members while they are reconsidering their institutional relationships. This is a historic opportunity for credit unions to be heard. “This campaign is designed to accelerate growth by speaking to traditional values of credit unions, and emphasizing calm and stability amidst a massive financial crisis--that credit unions are islands of peace and happiness in all the chaos,” he added. “The continued impact of the ads is undeniable for existing members and employees of credit unions. Washington is a state that uses a lot media buying. Of all the ads, the values-based ads are the ones that are most effective in driving new relationships,” Annalaro said. Credit union growth in Washington was already accelerating when the ads began, Annaloro said. Washington ranked fifth in the nation in 2008 with 5% aggregate growth as a percentage of new assets and new members, he added. To see one of the TV ads, use the link and click on “Watch the Commercial.”

CU program helps Duluths low-incomers buy cars

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DULUTH, Minn. (3/5/09)--Northern Communities CU is helping people who are employed but struggling buy dependable used cars that won't saddle them with constant repair bills. Jump Start Duluth offers low-income families a low-interest, five-year loan for good used cars with low mileage (Duluth News Tribune Feb. 25). The $72.8 million asset credit union, based in Duluth, is working with Community Action Duluth on the program. Duluth resident Denise Lewis, who was approved for a loan in the program, told the newspaper that two years ago she scraped together $500 for a 1996 vehicle with nearly 200,000 miles on it, but shortly after she bought it, the transmission failed. Loan applicants must fill out a detailed budget to prove they can afford car payments, which typically run $100 to $200 a month. The program is for people who have jobs but need help in affording a good vehicle. The cars come from Ideal Auto, a nonprofit dealership in Glenwood City, Wis., which buys auction cars that have fewer than 55,000 miles and get at least 32 miles per gallon. The cars typically are sold for $7,000 to $8,000 to the program's participants. Participants deposit $20 a month into a savings account to cover oil changes, tires and repairs and they attend a financial education workshop and get an auto maintenance lesson from a local auto shop, said the newspaper.

Shared branching helps CU in conservatorship keep members

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LAKEWOOD, Colo. (3/5/09)--Shared branching helped Union Pacific Streamliner FCU serve its members when the credit union was placed under conservatorship in 2006. The National Credit Union Administration took control of the credit union because of financial difficulties, causing the credit union to close two of its branches. The credit union joined shared branching through CO-OP Shared Branching’s partner, Credit Union Service Network. “I truly believe shared branching has helped us retain our membership,” said Janet Anderson, Union Pacific CEO. “I don’t think we would have come out of conservatorship without the access that shared branching has given us.” With shared branching, the credit union can serve members through more locations with extended hours, including Saturdays. “Another plus for our members is the out-of-state access,” Anderson said. “Our membership travels a great deal.” Though the credit union has one branch, its members have access to 3,600 branches through CO-OP, Anderson added.

CU System briefs (03/04/2009)

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* PLANO, Texas (3/5/09)--Southwest Corporate FCU will conduct its regular monthly Financial Review Webinar today at 3 p.m. CT (eFACTS March 3). The online event will highlight its investment portfolio, credit risk management and financial results for January. Members may register for the no-cost webinar at Southwest Corporate's website … * AUGUSTA, Maine (3/5/09)--Maine State CU announced Wednesday it will donate nearly $36,000 to32 local hunger organizations in Kennebec and Somerset Counties. Today each organization will receive $406.79, with those that participated in credit unions' 2008 annual Walk to Stop Hunger receiving an additional $1,250. The credit union's annual Walk to Stop Hunger raised more than $18,000 in 2008. The fourth annual Walk to Stop Hunger will be April 25 at Capitol Park, said the credit union. "In this tough economy, we are pleased by the generosity of the people in our community," said Maine State CU President/CEO Normand Dubreuil (mainetoday.com March 5) … * BEAVERTON, Ore. (3/5/09)--The Credit Union Association of Oregon (CUAO) announces that Kasey Rockwell has been selected for the new position of director of credit union development. Rockwell has worked with CUAO since 1999, first as director of credit union relations and most recently as director of advocacy since 2002. In the new position, Rockwell will work with credit unions in the areas of development and outreach, including small credit union development, planning sessions, assistance with education, financial literacy and chapter outreach as well as managing the Credit Unions for Kids program. The position also will be responsible for researching and implementing government programs to benefit Oregon credit unions. Rockwell will continue to support CUAO advocacy programs during the active state legislative session until a replacement is named … * ALEXANDRIA, Va. (3/5/09)--John DuPree Sr., founder and chairman of Shiloh of Alexandria FCU, Alexandria, Va., has died, according to the National Federation of Community Development Credit Unions. His son, John DuPree Jr., now manages the $1.3 million asset credit union, which serves 678 members. The DuPree family has managed and operated the credit union since 1993, providing financial education and service to the Parker Gray community of Alexandria, said the federation. John DuPree Sr. was a staunch community development credit union supporter and former director of the federation. Funeral services will be Friday at 11 a.m. EST, with viewing at 10 a.m. at the Shiloh Baptist Church, 1401 Duke St., Alexandria, VA 22314. Services are being handled by the Lewis Funeral Home in Alexandria, 703-549-2632 …

Handheld units link Rwandas co-ops in WOCCU program

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KIGALI, Rwanda (3/5/09)--Clement Rugumiriza considers his branch of Banque Populaire du Rwanda (BPR) as up-to-date as many credit unions around the world, now that he can offer member-clients branch-to-branch electronic transaction capabilities through the World Council of Credit Unions (WOCCU) development program.
Clement Rugumiriza (left), aided by a teller, shows off one of the new point-of-sale devices--which offer electronic transaction capabilities--at Banque Populaire du Rwanda. (Photo provided by World Council of Credit Unions)
Rugumiriza and other managers in BPR's 22-branch system--can now offer electronic services through handheld point-of-sale (POS) units housed at each of the credit union branches. The new technology has brought financial capabilities a long way in an African country ravaged by genocidal warfare barely 15 years ago, WOCCU said. Introduced in December, the technology enables BPR’s member-clients to make deposits and withdrawals in real time at any of its branch offices in Rwanda. With 140 points of service, BPR is Rwanda's largest financial network, according to Paul Graslie, WOCCU technical services manager. “This is really a form of shared branching, something BPR was not capable of offering prior to the introduction of POS,” Graslie said. “The system removes the geographic constraints that otherwise have limited member-clients when they travel in the country. Volume has risen to 100 transactions per day since the technology’s introduction.” BPR installed the handheld units inside each branch office. The transactions run through the POS units using biometrics technology that requires both thumb and index fingerprints of the member-clients. The devices may not be used either outside the branch or the BPR network due to Rwandan law. The new technology marks a major step forward in a country that lost an estimated 800,000 citizens during a genocidal civil war in 1994. Rwanda's gross domestic product fell by 50% during the war, and an estimated US$7 million was stolen from the country's financial cooperative system for use by perpetrators of the genocide, according to a WOCCU FOCUS report. Since 2000, WOCCU has been helping Rwanda’s financial cooperatives rebuild, aided by funding from donors such as the U.S. Agency for International Development and the Bill & Melinda Gates Foundation. BPR recently launched a major media campaign to promote the new technology, named “BPR Mobile Counter.” While keeping costs low, the technology allows BPR to offer contemporary electronic services to its member-clients. It’s a competitive edge in the country of more than 10 million people that branch managers like Rugumiriza know will set BPR apart in its service to Rwanda’s people, WOCCU said. WOCCU launched a similar effort in Morelia, Mexico, in December to help local credit unions reach out to people living in rural, marginalized areas. Credit unions there use personal digital assistants and mobile printers to perform financial transactions during field visits to their members. The two efforts are among the first in their financial cooperative systems to use such technology, WOCCU said.

In tough economy Mica urges CUs to reassure youth

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WASHINGTON (3/5/09)--Because of the worsening economy, Credit Union National Association (CUNA) President /CEO Dan Mica is urging credit unions to single out youth for special consideration during National Credit Union Youth Week, April 19-25. "By even the most optimistic estimates, combating this recession will mean passing $10 trillion in debt on to our descendants. How we as a nation mitigate the pain of that legacy will say a lot about our character," Mica said. "The bill for cleaning up this economic mess threatens to injure young people’s prospects for a financially secure life for themselves and their families. But it would be even more detrimental to sacrifice our grandchildren’s financial security by neglecting to give them the knowledge and skill to manage the debt that we will bequeath them," he said. The CUNA leader emphasized the importance of giving coming generations the tools to thrive. "Youth Week 2009 offers us a chance to reassure tomorrow’s workforce that we will not abandon them to debt. Engage in Youth Week activities as a way of telling your young members: 'We will help you reach your financial goals; we will help you build wealth, even in bad times; we will show you the credit union way to personal prosperity.'" CUNA offers a range of Youth Week resources--many at no cost, including participation in the National Youth Saving Challenge. Use the resource link.

The Union CU opens branch in Kennewick Wash.

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KENNEWICK, Wash. (3/4/09)--A Spokane, Wash.-based credit union serving union employees, their families and businesses that hire union workers has opened a branch Monday in Kennewick, Wash. The Union CU, with $12.8 million in assets, decided to open the branch to better serve members in the Tri-Cities. Many already use the credit union's online banking facilities, CEO Demaris Krummel told the Tri-City Herald (March 3). In a financial environment of tightening credit, the credit union has become more important to members. The bulk of its growth occurred last year, Krummel said. Established in 1968 by members of the Bricklayers Local 3 in Spokane, the credit union has about 4,500 members. The new branch employs three employees, including manager Jeff Burckhard. All employees--including the CEO and board members--are union members. Krummel told the paper that members earn 3% interest on their checking accounts, and it is helping its members through tough times. Out-of-work members are allowed to skip loan payments. The credit union is also planning a branch in Seattle next year.

Desjardins fourth-quarter losses total 476 million

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MONTREAL (3/4/09)--Desjardins Financial Group, Quebec's largest credit union, saw member dividends sink 64% to $215 million in 2008, down from 2007's total of $592 million as a result of investments in asset-backed commercial paper (ABCP) and the global financial crisis. The financial cooperative experienced a $476 million loss during fourth quarter 2008, before member dividends. A year earlier, Desjardins had reported a $273 million surplus (The Canadian Press March 2). The cooperative attributed the losses to the divestment of its hedge fund holdings, which supported Desjardins' guaranteed capital investments. Desjardins President Monique Leroux said that the credit unions are encouraged to pour their surpluses into their reserves, which would result in reduced member dividends. Its guaranteed capital investments included $785 million in ABCP, a short term investment vehicle that was hit by the subprime mortgage crisis in the U.S., said the article. Desjardins' surplus earnings for 2008 fell 93%--to $78 million from $1.1 billion in 2007. Fourth quarter 2008 revenues totaled $1.73 billion, a 36% decline from a year earlier. Revenues for the entire year totaled $8.37 billion, which was 13% less than in 2007.

U.S. Central January net income at 9.2 million

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LENEXA, Kan. (3/4/09)--U.S. Central recorded net income of $9.2 million during the month of January, according to the January 2009 financials posted Monday on its website. Some of U.S. Central's available-for-sale investment securities improved. Accumulated other comprehensive income (AOCI) on the balance sheet reflected an unrealized loss of $5.9 billion--down from $6 billion in December. The $100 million improvement resulted from tightened spreads during the month for asset-backed securities supported by credit card and student loan receivables. Member balances, consisting of share and certificate accounts and Fed Funds purchased, as applicable, averaged $23.1 billion, compared with $35.3 billion during January 2008. Net interest income totaled $12.8 million in January, compared with $18.9 million in December. In January, the National Credit Union Administration announced its $1 billion capital infusion into U.S. Central to assist with the announced 2008 other-than-temporary impairment charge. That brought U.S. Central's total regulatory capital to 6.326% for January, up from 3.756% in December. The new paid-in-capital was funded by the National Credit Union Share Insurance Fund in late January and qualified as core capital. For more detail use the link.

California bill prohibits FIs from spending

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SACRAMENTO, Calif. (3/4/09)--A California bill that would prohibit financial institutions--including credit unions--from using federal or state emergency economic assistance for certain purposes was introduced in the state Assembly Friday. State Rep. Pedro Nava (D-35), chairman of the state Assembly Banking Committee, introduced Assembly Bill 1075. The bill states: A credit union, or any subsidiary, that is a recipient of federal or state emergency economic assistance shall not use any funds derived from that assistance for:
* Lobbying expenditures or political contributions; * The hosting or sponsorship of, or payments for, conferences and events; * Corporate aircraft, travel accommodations, and travel expenditures; * Mergers or acquisitions; * Office or facility renovations or relocations; and * Entertainment, holiday parties, employee recognition events, or similar ancillary corporate expenses.”
Any credit union that violates the provision will be subject to a civil fine of at least $100,000 per violation and shall be ineligible to receive any future emergency economic assistance until the credit union completes measures to comply with, and to prevent future violations of, the provisions. Fines collected will be deposited in the state Credit Union Fund. Similar provisions in the bill apply to banks. The California Credit Union League will have a committee meeting in two weeks to review A.B. 1075, and currently has taken no position on the legislation since it is so new, Melissa Ameluxen, league director of state government affairs, told News Now. “If the bill prevents credit union people from exercising their freedom, we might be against it,” she said. “However, a lot of items in the bill sound reasonable. “No California credit unions have received federal government TARP [Troubled Asset Relief Program] money,” she added. “Credit unions in California and Nevada have spent money wisely--keeping the best interests of their members in mind. And the credit unions will continue to do so--even if they do receive TARP money.”

IWall St. JournalI Small businesses turning to CUs

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NEW YORK (3/4/09)--Unable to get loans at banks, more small-business owners are turning to credit unions, reports the The Wall Street Journal. And credit unions could do more if an arbitrary cap on business loans were lifted, the Credit Union National Association told the nationwide newspaper. "Credit unions are more able--and willing--than most of their banking counterparts to dole out money to small businesses," the newspaper noted (March 3). It cited CUNA statistics, noting that 27% of credit unions in the U.S. offer business loans, and the amount of the loans was up 18%--to almost $33 billion--last year. "In this really bad environment, we're doing more and more loans," said Mike Schenk, CUNA senior economist, told the Journal. The Journal reported that "Many credit unions say they would lend out even more money if they could. But a 1008 federal law caps the amount of business loans credit unions can have at 12.25% of assets." Credit unions hope to convince Congress to introduce legislation to lift the cap, it added. CUNA's Schenk also noted that the 12.25% cap is "an arbitrary cap that was imposed in 1998 as part of the Credit Union Membership Access Act." Historically, there were no restrictions on credit union business lending. Also interviewed were:
* Larry Wilson, president/CEO of Coastal FCU, Raleigh, N.C., who told the paper credit unions could provide $10 billion in small-business loans within the next 12 months without costing taxpayers; * Kenneth Beine, president/CEO, Shoreline CU, Two Rivers, Wis., who said more "Main Street" loans have arrived to the credit union since traditional sources of funding dried up; * John Duggan, president, Chem-Dry of Madison, and Matt Rosenhal, vice president of business services, Summit CU, Madison, Wis., who were in a photograph with the article and told about Chem-Dry receiving two business loans from Summit; * Nick Frescas, member of West Texas CU, El Paso, which gave him a loan after his home day-care business failed to get a bank loan in 2005 because it didn't have enough assets. It is now applying for a $750,000 loan for its second building--with the credit union; * Curtis Anderson, vice president, Mountain America CU, West Jordan, Utah, who said his credit union requires more proof in underwriting but continues lending to people starting businesses.
Use the link to access the entire article.

CU System briefs (03/03/2009)

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* RANCHO CUCAMONGA, Calif. (3/4/09)--Yadira Feliciana-Lacot received the third Kelly J. Purcell Credit Union Memorial Scholarship, named for the California and Nevada Credit Union Leagues' former director of federal government affairs, at a reception at Credit Union National Association's Governmental Affairs Conference in Washington, D.C., last week. She is a graduate student at The George Washington University (GWU) Graduate School for Political Management (GSPM), where Purcell received her master's degree. Originally from San Juan, Puerto Rico, Feliciana-Lacot moved to the U.S. a year ago to attend school and expects to begin the GSPM Master's Program in Advocacy Politics this fall. She is assistant director of communications at the National Minority AIDS Council in Washington, D.C. From left: Lucy Ito, league senior vice president of credit union growth; league President/CEO Bill Cheney; Feliciana-Lacot; GWU Dean Christopher Atherton; Bob Arnould, league senior vice president of government affairs; and Prof. Larry Parnell, GWU director of strategic public relations. (Photo provided by the California and Nevada Credit Union Leagues) … * SAN ANTONIO (3/4/09)--Security Service FCU has reached the $5 billion asset milestone, officials announced Monday. That makes the credit union the largest credit union in San Antonio, the second largest in Texas, and the 10th largest in the U.S. It reached its first $1 billion in 1995, and its second billion in 2001. The credit union achieved $3 billion in 2003 and more than $4 billion in 2007. "We are grateful for the trust and loyalty of our members and our dedicated employees who have made our success possible in these tough economic times," said President/CEO David Reynolds … * SAN FRANCISCO, Calif. (3/4/09)--Two men have pleaded guilty to robbing a San Francisco branch of San Jose, Calif.-based Pacific Postal CU on Aug. 6, with assistance from one suspect's niece, a former credit union employee. Sefo Sagote, 27, and former employee Angelica Sagote, 20, pleaded guilty Thursday. Elisara Taito, 26, pleaded guilty in December. On Aug. 4, two men attempted to rob the credit union but were caught in a "bandit barrier" that protects tellers. They fled with the purses of two members. On Aug. 6, two men robbed the credit union of more than $76,000. Police believe the two incidents are linked. Sefo Sagote faces more than 11 years in prison; Angelica Sagote faces between 46 and 57 months in prison. Taito is to be sentenced on March 23 (San Francisco Chronicle via sfgate.com March 3) … * WINSTON-SALEM, N.C. (3/4/09)--Piedmont Aviation CU has announced it has changed its name to Piedmont Advantage CU. The Winston-Salem, N.C.,-based credit union said the name change is to emphasize its expansion into serving other employee groups. President/CEO Judy Tharp told the Winston-Salem Journal (March 3) the change helps overcome confusion with potential new members who may believe they can't join because they're not employees in the aviation industry. The credit union was established in 1949 to serve employees of Piedmont Aviation and Piedmont Airlines but expanding its field of membership to serve residents in six counties …

Suncoast Schools GTE FCUs plan merger

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TAMPA, Fla. (3/4/09)--The boards of two Tampa-based credit unions--Suncoast Schools FCU and GTE FCU--have signed a letter of intent to merge the two large credit unions, subject to satisfactory due diligence reviews and regulatory approval. In a joint press release, the credit unions said they will conduct due diligence to review a number of points including but not limited to financial statements, reports of operation, contracts, loan quality and underwriting standards, computer and telecommunication systems, human resource practices, regulatory examinations and others. "We believe this merger would help both credit unions achieve their ultimate goal to provide better value to our member-owners," Tom Dorety, president of SSFCU, said. "The due diligence process will be thorough and deliberate, with both parties agreeing along the way." The credit unions expect the process to take about four to six months before the merger application will be turned over to regulators to determine compliance. After that, the time frame is unknown, they said. "Benefits such as an expanded branch and ATM network and greater efficiency in several areas are just part of the merger potential," said Bucky Sebastian, CEO/president of GTE FCU. "While we have an agreement to consider the merger, we realize it will take time to complete, but we look forward to the process unfolding." Both credit unions will continue operating in a manner consistent with current operations, they said, adding that business will not be interrupted in any way during the due diligence process. Suncoast Schools FCU, chartered in 1934, serves more than 473,000 members and operates 50 full-service branches in 15 Florida counties. With $6 billion in assets, it is the largest credit union in Florida and the seventh largest in the U.S. GTE FCU, chartered in 1935, serves 205,000 members and operates 38 branches in 14 counties in Florida. It has $1.8 billion in assets.

Ireland regulator says some CUs hit by economy

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DUBLIN, Ireland (3/4/09)--Ireland’s financial regulator said Tuesday it is trying to help a few credit unions with financial difficulties as the country’s economy drops deeper into a recession and more borrowers fall behind on loan payments. However, the reserves and liquidity of the Ireland’s credit unions overall are “quite adequate,” Brendan Logue, the regulator’s registrar of credit unions, told Ireland’s state broadcaster, RTE (Reuters March 3). Of the 419 credit unions nationwide, fewer than 10 are in a risky position, Logue said, adding that the problems of the few credit unions resulted from “looser lending” during the economy’s boom years. Because some credit unions have gradually moved away from the “very prudent lending rules” they deployed in the past, they now are facing difficulties, Logue told the news service. The country’s credit union members should not worry about the safety or security of their savings because the credit union movement has $1.76 billion in reserves, said Ciaran Brennan, CEO of the Irish League of Credit Unions (RTE March 3). The regulator has asked Mitchelstown CU in the southern county of Cork to stop business lending and limit its personal lending because loan delinquencies are rising.

Deustsche Bank to invest 1 million in CDCUs

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NEW YORK (3/4/09)--Deutsche Bank invested in the National Federation of Community Development Credit Unions with a $1 million commitment to the Community Development Investment Program (CDIP). With the funds, the federation will place below-market rate deposits in community development credit unions (CDCUs) in New York and California. The deposits likely will support CDCUs serving Manhattan’s Lower East Side, Washington Heights and East Harlem neighborhoods. Other target areas include Syracuse and Lakewood in upstate New York, and Oakland, Calif., the federation said. “This investment could not have come at a more opportune time,” said Alice Greenwald, director of the Community Development Investment Program. “The liquidity needs of CDCUs have grown tremendously throughout the last year as increasing numbers of people in underserved communities turn to their local credit unions for personal, vehicle and home loans. “Deutsche Bank's generous support will help us sustain our member CDCUs’ vital community lending at a time when most low-income individuals are finding it harder and harder to access affordable credit and financing,” she added. The federation launched its 25th anniversary capital campaign two years ago, with a goal of bringing assets under management to $50 million by the end of 2009. In addition to significant support from the banking and philanthropic sectors, the CDIP also has received direct investments from some of its Community Development Partner credit unions. “Access to credit for individuals and small businesses is a key feature of current economic recovery plans, and the community lending that the federation supports is more important than ever,” said Gary Hattem, president of the Deutsche Bank Americas Foundation. The federation makes secondary capital loans and risk-sharing Predatory Relief and Intervention Deposits, and administers special grant programs for CDCUs. Deutsche Bank’s new investment brings the CDIP portfolio to a record $48.8 million in funds under management.

Beware of bogus IRS phishing scam

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MADISON, Wis. (3/3/09)--A bogus e-mail that appears to be from the Internal Revenue Service (IRS) is making the rounds. It tells recipients they are about to be audited or are due a big refund. The Delaware Credit Union League is alerting its member credit unions about the scam. The e-mail uses the IRS logo at the top, but the message is phony (MSNBC.com via Delaware Credit Union League Risk Alert March 2). The scammers want consumers to click on a link in the e-mail that takes the recipient to the scammers’ website--which looks identical to the IRS site. The bogus site contains a form that asks for Social Security number, birth date, mother’s maiden name, credit card information and an ATM card personal identification number. With this information, scammers could charge items to consumers’ credit cards and drain their bank and credit union accounts. The Social Security numbers could be used to access medical records and financial accounts, and even assume the consumer’s identity. The IRS will never send taxpayers an e-mail if it has to do with their account or private information. An unsolicited e-mail that purports to be from the IRS is bogus. Don’t click on links or open attachments. Delete the e-mail.

DFCU Financial CapCom CU merger finalized

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DEARBORN, Mich. (3/3/09)--Members of DFCU Financial voted to approve the merger of CapCom CU into DFCU Financial. Of the nearly 40,000 votes cast, 91% voted in favor of the merger. “The vote turnout exceeded our expectations,” said Mark Shobe, president/CEO of DFCU Financial. “This merger will afford us the geographic diversity needed while Southeastern Michigan recovers economically.” “We’re excited to proceed with integration so that CapCom members can begin enjoying our benefits of membership,” said Renee DeMarco, regional president of DFCU Financial and past president/CEO of CapCom. “Immediately, we have increased the interest rates on some of our savings products.” The new DFCU Financial now serves more than 200,000 members with 21 full-service branches--12 in the Detroit area, five in Grand Rapids, three in Lansing and one in Greenville. With about 500 employees, Dearborn, Mich.-based DFCU Financial has $2.4 billion in assets and remains the largest credit union in Michigan and one of the largest in the nation. CapCom, based in Lansing, has $203.2 million in assets.

Wisconsin regulator takes over Prime Financial CU

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CUDAHY, Wis. (3/3/09)--The Wisconsin Office of Credit Unions took control of Prime Financial CU of Cudahy, Wis., on Friday, and appointed Christine Dawe as an agent to conduct the business of the credit union. A new management structure will be put in place, but the credit union’s daily operations should remain the same, the Wisconsin Department of Financial Institutions (DFI) said in a press release. Members of Prime should not experience any interruption of service at any location served by the credit union. Member accounts remain federally insured by the National Credit Union Share Insurance Fund up to at least $250,000. Regulators have removed Prime Financial’s CEO, Richard Koenig, and the credit union’s board of directors, said Suzanne Cowan, director of the Wisconsin Office of Credit Unions. Dawe, a consultant with expertise in helping troubled credit unions, is currently leading the credit union, Cowan said (Milwaukee Journal-Sentinel Feb. 28). An investigation concerning the management of Prime Financial is being conducted, but members' deposits are safe, Catherine Haberland, executive assistant for the Wisconsin DFI, told the newspaper. Although the credit union lost nearly $8 million in 2008, it is solvent and conducting business as usual while under the purview of the state regulator, Haberland added. Prime Financial CU is a state-chartered, federally insured credit union chartered in 1923. It was the first credit union chartered in Wisconsin. It is a full-service, $190 million credit union with more than 37,500 members.

PCUA announces lifetime achievement award winners

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HARRISURG, Pa. (3/3/09)--The Pennsylvania Credit Union Association (PCUA) announced the winners of its 2009 Lifetime Achievement Awards. Barb Fortney, retired CEO of LANCO FCU, Lancaster, was named the 2009 William W. Pratt Professional of the Year (Life is a Highway March 2). Herb Yost, board chair of Diamond CU, Pottstown, was named the 2009 Joseph A. Moore Volunteer of the Year. Fortney retired in January after 25 years as CEO of LANCO FCU. She holds the Credit Union Development Educator designation, was active in the Lan-Chester Chapter of Credit Unions, and helped form the Lancaster Consortium for Hispanic Financial Literacy. Under her leadership, the credit union grew from $2.5 million in assets to more than $46 million, and expanded to four locations under a community charter, which includes all of Lancaster County. The credit union serves more than 10,000 members. Yost, who recently announced his retirement from the board, has dedicated 26 years of volunteer service to Diamond CU, including the past 16 years as chairman. His leadership has influenced the growth of the credit union from $10 million to more than $348 million in assets. It serves nearly 38,000 members. The awards will be presented during the gala banquet of PCUA’s 75th Annual Convention, May 16 in Hershey.

Council keynoter to address championship biz coaching

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MADISON, Wis. (3/3/09)--Mark Adams, former college basketball coach and ESPN analyst, will provide his advice on how to become a champion business coach during the 15th Annual CUNA HR/TD Council Summit, April 6-9, in Las Vegas. During “Playing to Your Strengths! Real Championship Coaching,” Adams will share how he identified his strengths, and the strengths of his co-workers and players, to drive results. A member of the coaching staff at colleges including Washington State University, Idaho State University, and Central Connecticut State University, Adams will discuss the lessons learned from his experiences to help attendees learn to play to their strengths. Breakout sessions will be divided into three learning tracks:
* Human Resources (HR) Track--mediation, employment branding, finance for HR professionals, new Family and Medical Leave Act regulations and compensation issues; * Training--career development strategies, coaching, leadership, strategic level training and networking; and * Executive Series--situational and transformational leadership, innovative technology, mergers, succession planning, and a legislative update.
The executive series is free, but is limited to the first 40 participants who register. For more information, use the link.