Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

CU System Archive

CU System

NY CU Loan Growth Up 50%, Says CUANY

 Permanent link
ALBANY, N.Y. (3/29/13)--Credit unions across New York State continued to post strong financial performance and exceed national averages in many key categories during fourth quarter 2012, said the Credit Union Association of New York.

Data show that New York credit unions are growing and lending at a pace that far exceeds national averages. Most notably, New York credit unions had annual outstanding loan growth of 6.5% in 2012, significantly higher than the national average of 4.5%. Loans to businesses were up by 14.6% over 2011 totals.

"This report clearly shows that credit unions are playing a significant role in helping grow the economy and provide critical funds to families and businesses in the communities they serve," said William Mellin, CUANY president/CEO. "Credit unions are truly about people helping people--and having New York outpace national trends demonstrates that New York consumers understand this philosophy more and more each year."

Other highlights:

  • Annual growth figures for assets, shares, members and loans in 2012 exceeded national averages, and the average member relationship increased.
  • Credit unions in New York saw share balances rise 7.8%, faster than the national average of 6.1%. Regular shares, money market accounts and share drafts grew at a double-digit annual pace.
  • Asset quality for the state's credit unions improved. The overall delinquency rate was 1.26%, which is below the local bank average.
  • Capital levels remained high at New York credit unions at 11.3% of assets. This is a higher level than New York banks and thrifts, as well as credit unions and banks nationwide.
  • Business loans at New York credit unions increased 14.6% from 2011, with member business loan originations totaling nearly $3 billion in 2012.
CUANY said the data are from a quarterly Credit Union Performance and Trends Report by Callahan & Associates.

Banks' Customer Service No Match For CUs--Tempkin Survey

 Permanent link
WABAN, Mass. (3/29/13)--Credit unions still lead the banking sector by a sizeable margin in customer experience, even though customer service has improved overall in the banking sector, according to the just-released 2013 Temkin Experience Ratings.

"Credit unions take first place in the industry for the second straight year with a rating of 79%," said Waban, Mass.-based Temkin Group. Credit unions are well above the banking sector's average score of 68.6%.

Credit unions led in two out of three evaluation areas: Functional (can member/customers do what they want to do) and Accessible (how easy it is to work with the company). USAA, which got the second highest banking sector score at 78%, led in the third area, Emotional (how consumers feel about their interactions).

"Credit unions and USAA continue to lead the banking industry in customer experience, but the entire sector is making great progress," said Bruce Temkin, managing partner at Temkin Group.

Tempkin noted that the banking industry has steadily improved the past three years, from an average rating of 62% in 2011 to this year's 68.6%.  HSBC (57% score)  and Capital One (62%) and Bank of America (63%) were the lowest-ranked banks.

Ratings for two of the banks declined since 2011. PNC lost six percentage points, while HSBC lost one point.

The banking industry earned the fifth highest average rating out of 19 industries served. Scoring higher than the banking sector were grocery chains, fast food chains, parcel delivery services and retailers.

The results are based on a study of 10,000 U.S. consumers. Credit unions already are getting positive headlines in media because of the survey. The Sacramento Bee, the Birmingham Business Journal, and The FinancialBrand.com reported on the study this week.

Last year, credit unions topped a number of customer service ranking studies.

Decision To Drop Exam Appeal Was For Good Of All, Says CEO

 Permanent link
OAK HARBOR, Ohio (3/29/13)--Commodore Perry FCU's decision to withdraw its appeal of a National Credit Union Administration examination "was based, in large part, on the belief that the needs of the industry were more important than the CAMEL scores were to us," said Commodore Perry FCU CEO Thomas Renz Thursday.

"Our hope is that by extending an olive branch, so to speak, the NCUA will allow us to work with them to share what we have learned in a positive way to strengthen a critical process," Renz told News Now Thursday in an e-mail.

The Oak Harbor, Ohio-based, $32 million asset credit union had contested the results of a 2011 examination in which it received its lowest CAMEL rating ever. It maintained the low rating was retribution after it reported the conduct of an examiner and that the final examination contained factually incorrect findings. However, NCUA received a letter from Renz on Tuesday withdrawing the appeal.

"It is our absolute desire to work with the NCUA to share what we have learned," he said, noting that CPFCU "has never considered this to be a personal fight, but we do have a moral obligation to protect our staff and members." He believes the credit union would have succeeded if it had taken the appeal further. Given that, "we hope that our willingness to withdraw demonstrates how serious we are about our desire to work positively to improve the process."

The credit union is "working with the Ohio Credit Union League and the Credit Union National Association now and over the course of this year" he said, noting NCUA Region III Director Herb Yolles "has been very professional and willing to listen. We hope to continue discussions with him and will be contacting the NCUA offices in Washington to set a meeting to discuss some of these issues in the near future."

Although NCU does its best to responsibly govern the credit union industry, Renz told News Now, "no organization is perfect and so we must strengthen due process protections to ensure that when something goes wrong there is a meaningful and reasonable path for a credit union to take to remedy that problem."

Credit unions in similar situations must consider two things, he said. "First, ask yourself if you are right. If the NCUA is telling you there is a problem with your credit union and you have a 5% capital ratio, they are probably right and you will simply waste your time trying to fight them."

"Second, look at the cost/benefit," he said. "The process as it stands is broken…. Until the process is strengthened, this is a fight that will almost always end up being cost prohibitive."

The withdrawal doesn't mean the credit union is done or dropping the issue. It "is actually a relatively risky demonstration of good faith meant to move the issues we are fighting for forward. You may think you have a good examiner and this issue is not that important to you, but remember due process rights are rarely important to good people or organizations until they need them," Renz said.

"I hope that what has occurred so far will act as a call to action for both credit unions and the NCUA to take a hard look at the examination and appellate process and ensure credit union rights are protected," he concluded.

Both CUNA and the Ohio league told News Now Wednesday they will work with the credit union to seek improvements in the examination appeals process (News Now March 28).

Tennessee, Washington CU Board Compensation Bills Advance

 Permanent link
NASHVILLE, Tenn., and FEDERAL WAY, Wash. (3/29/13)--Tennessee Gov. Bill Haslam this week signed into law legislation that would allow Tennessee state-chartered credit unions to compensate board members or reimburse them for any lost wages caused by time spent in the service of the credit union.

"Whether Tennessee credit unions will remain volunteer-governed is the choice of each credit union," Trish Patterson, vice president of education and information for the Tennessee Credit Union League, told News Now.

Tennessee is the second state--with Washington the other--to consider such legislation in 2013. The legislative battle in Nashville has been going on since 2009.

The original legislative proposal gave members of a credit union board the ability to compensate themselves and to set the amount of compensation, said the Tennessee Credit Union League (News Now March 4). There was broad, general opposition to the proposal from credit unions statewide, and the league board and management indicated that opposition in meetings with legislators on the committees that would hear the bill, said the league.

However, when it became apparent the bill would pass in some form this year, the league worked to negotiate conditions required for a credit union to compensate its board members, TCUL President/CEO Fred Robinson told News Nowearlier this month.

In Washington state, legislation that would make broad governance changes--including removing the prohibition for state-chartered credit unions from paying board members and supervisory committee members, and increase credit union investment options--passed through the state Senate this week.

The legislation now is in the Washington State House Rules Committee "awaiting to be pulled to the House floor for a full vote," Lynn Heider, Northwest Credit Union Association vice president of communications, told News Now. "We are not aware of any opposition," she added, noting that no timetable has been set.

The legislation is backed by NWCUA (Anthem March 7).

NWCUA supports the legislation because compensation may help in recruiting and keeping a more diverse board, Heider told News Now last month.

Lending, Membership Fuel Maine CUs' Milestone Growth

 Permanent link
PORTLAND, Maine (3/29/13)--The inclination of more Maine consumers to establish and strengthen a relationship with a credit union continues to push Maine's credit unions to new growth levels, according to year-end statistics for 2012.

"These figures reflect the significant changes in consumer attitudes and preferences over the past few years, with consumers turning to Maine's credit unions in growing numbers," said John Murphy, president of the Maine Credit Union League. "Consumers with existing credit union relationships are utilizing additional products and services, as well, which is solidifying the increasing number of consumers that use their credit union as their primary financial institution."  

For the 12-month period ending Dec. 31, Maine's 61 credit unions experienced solid growth in all categories including members, assets, savings and loans, the league said.

As of Dec. 31, combined assets at Maine's credit unions increased nearly $275 million to $5.88 billion, an increase of 4.9%.  Loan growth represents a key economic indicator, not only for Maine credit unions, but for the overall economy, the league said. For 2012, loans outstanding to members increased by $227 million, reflecting a 6.2% increase, over year-end 2011 figures.

Last year, savings at Maine's credit unions grew 5.4%, to $5.04 billion. Also, membership reflected a net gain of nearly 8,500 new members, a 1.4% rise. Total membership at Maine's credit unions is at 625,500 members--the highest year-end total ever.

Murphy noted that strong loan growth and membership growth "reinforces the many positives that credit unions are providing to members including value, trust and safety. As financial cooperatives, credit unions are focused on helping and serving their members and, clearly, Maine consumers appreciate the benefits and advantages that using a credit union offers."

Convenience and access is playing a key role in the growth of credit unions, said the league.

Alabama, Florida CUs End Year With $31B Assets

 Permanent link
BIRMINGHAM, Ala., and TALLAHASSEE, Fla. (3/29/13)--For a third consecutive year, credit unions in Alabama and Florida ended 2012 with a record number of assets. The 285 credit unions in both states added $3.1 billion in assets.

That equates to 6% growth for the year and a record $17.7 billion in total assets in Alabama. Alabama credit unions added slightly more than $1 billion in new assets. In Florida, the growth rate in 2012 was nearly 5%, for a record $45.5 billion in assets. Florida credit unions added $2.1 billion in new assets for the year.

"A trend we've noticed for the past three years now is that credit unions are gaining a greater share of wallet from existing members," said Patrick La Pine, president/CEO, League of Southeastern Credit Unions & Affiliates. "While membership is rising most quarters, there are more assets being added than members. This shows existing credit union members are seeing the value and moving more of their money to the credit union."

Alabama credit unions added 6,000 new members in fourth quarter to end the year with a record 1.83 million members. That constitutes a 3% membership growth rate--well above the national credit union average, LSCU said. It also places Alabama with the 17th highest credit union growth rate in the U.S., said the league. Florida credit unions' membership numbers dipped in the fourth quarter, when financial institutions typically purge dormant accounts, LSCU explained.

With lending, Alabama and Florida credit unions saw a positive growth rate for the first time in three years. Member business lending continues to gain in both states. Alabama credit unions saw nearly a 13 % gain, year over year, in member business loans. That is twice the national average and equates to $54 million in MBL growth. Florida credit unions outpaced the national average by showing a 6.8% growth rate. That equates to adding $81 million in new MBL loans. That also indicates credit unions are lending to small businesses in communities across both states, LSCU said.

Delinquencies and net charge offs continue to fall--a sign that the loans made in each state are better quality. Florida's delinquent loans to total loans and net charge-offs fell for a third consecutive year. In Alabama, delinquent loans to total loans remained consistently low, while net charge-offs fell for the fourth year.

TransUnion CU Survey: Auto Loans Are Biggest Opportunity

 Permanent link
CHICAGO (3/29/13)--Loan growth, with auto loans likely being the most promising area, is the critical business issue facing the credit union industry in 2013, roughly two-thirds of credit union executives told TransUnion in a new survey. More than half of credit union respondents said auto loans are their biggest opportunity.

TransUnion administered the survey to 104 credit union executives at the CUNA Governmental Affairs Conference in Washington, D.C. in late February. Nearly all respondents from across the U.S. were board members, executives or in managerial roles for their credit union.

"Many credit unions are finding that auto loans provide a great revenue opportunity as delinquencies continue to stay near historic lows," said David Dodson, credit union vice president in TransUnion's financial services business unit. "TransUnion projects auto loan delinquencies to continue to remain low with balances rising for the remainder of the year-- pointing to more new- and used-auto sales."

TransUnion's latest auto loan Trend Data report found that 60-day auto-loan delinquencies stand at 0.41% as of fourth quarter 2012, and will likely remain around 0.4% at the end of 2013. Bank auto debt per borrower has risen for seven consecutive quarters and is expected to rise from $13,747 in fourth quarter 2012 to above $14,000 by the end of 2013.

Some credit union executives surveyed said their best opportunities for loan growth are with mortgage (18%) and small business (13%) loans--an indication that the housing market may be improving, the company said. TransUnion data also support this. It expects 60-day mortgage-loan delinquencies to experience a double-digit percentage drop in 2013.

Regarding those small business loans, credit unions want to do more to help people start up or grow their small businesses. That's why the Credit Union National Association and credit unions supported legislation reintroduced in Congress last month to raise credit unions' MBL cap to 27.5% of total assets, up from 12.25%. Doing so would generate $14.5 billion available for MBLs--and increase jobs by 158,000 in the first year without costing the taxpayer, according to new statistics from CUNA.

While most credit union respondents (68%) said loan growth was the biggest critical issue they were facing this year, 11% indicated regulation was their main concern. Technology/operation efficiencies (7%) and membership growth (6%) also were cited as major issues this year.

The biggest challenges to meeting loan-growth goals are competition from large banks and captive finance companies (40%), regulation (27%) and a lack of prospects (17%), said credit union respondents.

"Loan growth is traditionally the biggest concern for credit unions, but it is interesting to see regulatory scrutiny and operational efficiencies called out as critical issues by some credit unions," said Dodson. "Credit unions realize that to effectively compete and grow in today's market, technology and analytics must be leveraged to help in acquisition efforts and to know how to best maximize members' wallets at the right time in the [member] lifecycle."

Fed On Mobile Banking: Use Is Up, Confidence In Security Down

 Permanent link
WASHINGTON (3/29/13)--The Credit Union National Association's Payments Subcommittee will review the Federal Reserve Board's  new mobile financial services survey results, which note significant increases in how consumers use mobile phones and smartphones for banking and payments.

The Fed released the report, "Consumers and Mobile Financial Services 2013," on Wednesday.  Among its key findings: In the past 12 months, more consumers used mobile phones to access banking and credit card accounts or make financial decisions while shopping. Mobile use spiked among the underbanked and unbanked. However, consumers had less confidence in the security of the devices than in 2011.

"CUNA's Payments Subcommittee is increasing its focus on efforts to ensure credit unions have the access they need to the latest developments in payments," said CUNA Deputy General Counsel Mary Dunn.

As of November, 28% of all mobile phone users and 48% of smartphone users had employed mobile banking in the previous 12 months--a significant hike from 21% and 42%, respectively, in December 2011, said the Fed.  Consumers who paid point-of-sale purchases with their mobile phone increased threefold, with 6% of smartphone users making the purchases.

Mobile financial services are particularly prevalent among the underbanked--those who have banking accounts but also use check cashers, payday lenders or payroll cards and who make up 10% of the population. Ninety percent of this group had mobile phones, and among them, 49% used mobile banking during the period, up from 29% in 2011.

The 10% of the population without a bank account also is using the mobile devices, with 59% of the unbanked having a mobile phone. Half of those are smartphones, said the Fed.

Although mobile banking use rose 33% between 2011 and 2012, more than half of mobile phone owners who don't use mobile banking services remained skeptical about the benefit of mobile banking and its level of security. They said they have no interest in it or believe another method of payment was easier. Making purchases via mobile phone at the point-of-sale drew less interest--under one-fourth expressed interest.

Credit unions will want to make sure their mobile banking has at least these features--they're the most common activities cited by consumers surveyed: Reviewing account balances, monitoring recent transactions, or transferring money between accounts.

They also will want to check out remote deposits: Using mobile phones to deposit checks doubled, with 21% of mobile banking users doing so during the period studied.

Brad Miller Named CEO Of Palmetto Cooperative Services

 Permanent link
IRMO, S.C. (3/28/13)--The Board of Palmetto Cooperative Services LLC Wednesday announced Brad Miller will serve as the credit union service organization's new president/CEO, effective April 8. He succeeds longtime-CEO Ed Culpepper, who retired late last year.

"His background as president/CEO for two different corporate credit unions and leadership experience with both non-profit and for profit financial service providers will be a great asset to us," said Jerry Miller, chairman of the PCS Board and president/CEO of Carolina Trust FCU in Myrtle Beach, S.C.

Miller--who has 25 years of experience in the financial services industry--served as president/CEO of Southeast Corporate FCU in Tallahassee, Fla., from 2010-2012. Previously, he was the executive director of the Association of Corporate Credit Unions (ACCU), served as president/CEO of Treasure State Corporate CU, and held management roles at the Federal Reserve Bank of Minneapolis and a consulting company.

During the past decade, Miller has served as board chairman for three CUSOs (Member Business Solutions, Accolade Investment Advisory and Corporate Synergies), as a board member of EastPay Regional Payments Association, vice chairman of the Montana Council on Economic Education and secretary/treasurer for ACCU.

CU System Briefs (03/28/2013)

 Permanent link
  • LINCOLN, Neb. (3/28/13)--The University of Nebraska FCU, based in Lincoln, has announced Keith Kauffeld will become its president/CEO, effective April 29. Kauffeld has more than 16 years of senior level operations and administrative management experience. He most recently served as vice president/chief administrative officer at Colorado Springs, Colo.-based Air Academy FCU.  There he was instrumental in acquiring additional non-interest income while playing a key role in reducing operating expenses through streamlining processes.  He also oversaw human resources, talent management, employee training/development, administration, contract management, non-interest income management, off-balance sheet management, security and facilities. NUFCU has more than 10,000 members and more than $70 million in assets …

CU SacTown Race To Benefit Children's Hospitals

 Permanent link
SACRAMENTO, Calif. (3/28/13)--The second annual Credit Union SacTown 10 Mile Run will take place April 7 in downtown Sacramento, Calif., to raise money for Children's Miracle Network hospitals in California and Nevada.

The race increases national awareness of credit unions and will take place the same day as the 41st Annual Credit Union Cherry Blossom Ten-Mile Run in Washington, D.C. It is part of the Credit Union Miracle Day "Family of Races."

SacTown 10 raised more than $140,000 for Children's Miracle Network hospitals last year. Children's Hospital & Research Center Oakland used the funds it received to support its Pedi Rehab department, specifically for rehab equipment such as specialized wheelchairs, according to Tina L. Evans, director at the hospital.

At the University of California-Davis Children's Hospital in Sacramento, the money went to support child life programs, such as research, equipment and music therapy, said Jacquelyn Mills, director of development.  

California and Nevada credit unions have raised nearly $164,000 so far this year. Major sponsors include:

  • CO-OP Financial Services, Rancho Cucamonga, Calif.;
  • The Golden 1 CU, Sacramento;
  • Patelco CU, Pleasanton, Calif.;
  • San Francisco Fire CU; San Mateo CU, Redwood City, Calif.;
  • SchoolsFirst FCU, Santa Ana, Calif.;
  • Travis CU, Vacaville, Calif.;
  • Xceed Financial FCU, El Segundo, Calif.;
  • CU Direct Corporation, Ontario, Calif.;
  • CUNA Mutual Group;
  • Intuit; and
  • Vining Sparks.
More than 1,300 racers, including 652 credit union employees and members, are scheduled to participate. More than 200 credit union volunteers are expected to work the event.

Website Recommends CUs For Short-Term Loans

 Permanent link
NEW YORK (3/28/13)--Credit unions are a good, lower-cost option for consumers with short-term loan needs, according to a website that links consumers with payday lenders and is touting credit unions as a good alternative.

The site, PaydayLoan-Lenders.com, has published a list of alternatives to payday lending for individuals living in any state that prohibits payday loans or who need "low-cost options for borrowing," the New York-based site said in a press release.

Credit unions are often cited as lower-cost alternatives to payday loans for members needing short-term funds, said the Credit Union National Association.  That's because they don't charge exorbitant interest rates. Some credit unions tie their programs to wealth-building loans that require putting part of  the funds into a savings account and/or participating in financial counseling, as conditions for the loan.

Currently, 13 states prohibit the use of payday loans, said PaydayLoan-Lenders.com. "Countless more have restrictions placed on the interest rates applicable to the loans, making them virtually off-limits," said the company's statement. "For servicemen and women in the U.S. military, there are additional restrictions on the total amount of interest that can be charged.

"This means that there are millions of consumers whose short-term lending needs cannot be met by payday loans or cash advances."

The website offers a free contact list that includes "information on community-based credit unions, which are well-provided for across all 50 states and the District of Columbia." The list also includes military aid societies that offer financial planning and emergency loans and grants.

The site lists six tips for consumers. The No. 1 Tip:  Approach a local credit union. "Community-based organizations called credit unions are popular and cheap ways to borrow extra money, particularly if you have a low-income or are saddled with a poor credit rating."

Other tips included using a low-cost credit card, negotiating with creditors, investigating using an overdraft on a checking account, researching extra protections and possibilities for military personnel, and asking friends, family, or an employer for a short-term loan.

Payday loans are prohibited in Arizona, Arkansas, Connecticut, the District of Columbia, Georgia, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Vermont and West Virginia, said the website.  Maine allows payday loans only from authorized lenders and the loans have interest rate caps. Since 2007, military personnel have been limited to a 36% total interest rate cap on payday loans if available in their states.

Equifax: Student Loans 'Severe Derogatory' Balances Up 36%

 Permanent link
ATLANTA (3/28/13)-- An Equifax report that found student loan "severe derogatory" balances increased 36% over last year hits home that consumers need the type of affordable private student loans that credit unions offer.

That's because credit unions require a small payment each month while the student is in college, which invests the student in paying back the loan from the beginning. As a result, private student loan delinquency in credit unions is  just 1.45%, according to statistics from the Credit Union National Association reported in January in News Now (Jan. 15).

Credit unions can consider student lending a niche to help them increase their loan portfolios, says Paul Gentile, CUNA executive vice president of strategic communications and outreach. And since credit unions show the credit union difference in their approach to student lending,  they can continue to keep student-loan write-offs low despite the trend with other lenders--another demonstration of the value of credit unions.

Equifax's latest National Consumer Credit Trends Report indicates that severe derogatory or charged-off balances--the bulk of student loan write-offs--for January and February hit $3 billion, or 36% more than the $1.9 billion in  same period a year earlier.

"Driven heavily by economic factors, including unemployed or under-employed consumers going back to school along with the rising cost of tuition, student lending has demonstrated consistent, year-over-year growth," said Equifax Chief Economist Amy Crews Cutts.

"Continued weakness in labor markets is limiting work options once people graduate or quit their programs, leading to a steady rise in delinquencies and loan write-offs," she said. "Many policy options are being discussed regarding how to reduce some of the burden, including graduated payments that reflect the lower starting salaries of new graduates, and improve the performance of these loans."

Other changes in student loan characteristics from February 2012 to February 2013:

  • Balances outstanding rose more than 14% on student loans, to $852.7 billion from $746.3 billion; and
  • The number of student loans outstanding increased nearly 13%, to more than $123 million from $108 million.
"Student loans are unique today in that they are the only major form of credit that is not rigorously underwritten on either a past credit-performance basis (such as using credit scores) or ability to pay based in income," Crews Cutts said.

FCU Drops Appeal Of Protest Against Examiner

 Permanent link
WASHINGTON (3/28/13)--The Credit Union National Association and the Ohio Credit Union League will work with Commodore Perry FCU to seek improvements in the examinations appeals process, they said Wednesday after it was announced that Commodore Perry had withdrawn its appeal of an exam decision by the National Credit Union Administration (NCUA).

The Oak Harbor, Ohio-based credit union had challenged an NCUA examination from 2011 that had resulted in the lowest CAMEL rating it had ever received. The$32 million asset credit union maintained that the rating was retribution for its reporting an examiner's conduct and that the final examination contained a number of factually incorrect findings (News Now Jan. 23).

The withdrawal letter from Commodore Perry CEO Thomas Renz arrived at NCUA on Tuesday.

"CUNA's Examination and Supervision Subcommittee plans to work with Renz to focus on key supervisory concerns and problem areas and to seek improvements in the appeals process," said Mary Dunn, CUNA deputy general counsel. "This review will supplement the work CUNA is undertaking to pursue examination issues identified by credit unions in CUNA's recent Examination Survey," she told News Now.

NCUA confirmed that it had received Renz'  letter and said it "will review it carefully and provide a response."

"Commodore Perry requested and received a 60-day extension to file an appeal to the NCUA Board about the Supervisory Review Committee's decision," said John Fairbanks, NCUA public affairs specialist, in an e-mail to News Now. "The deadline for filing the appeal passed on March 18.  NCUA received a letter on March 26 indicating that the credit union would not file an appeal."

He noted, "NCUA has taken steps to provide greater details to credit unions about how to file appeals, and the agency is committed to continuing to improve the examination process."

Ohio league President/CEO Paul Mercer said that the credit union's decision to drop the appeal is positive because the credit union needs to move forward and focus on serving members. Commodore Perry's willingness to share its examination experience helped the advocacy effort by revealing how the examination and appeals process works in the real world, Mercer said.

The league's position on exam reform has been the same since the first exam legislation was introduced and backed by CUNA, said Patrick Harris, director of media and public relations at the league.  "We are standing behind CUNA in getting exam legislation to move forward," he told News Now.

The next step is "between the regulator and the credit union," Harris said. "The league has been supportive of Commodore Perry's pursuit for fairness, and we've been standing alongside the credit union like any good league would do for its credit unions." He noted that Commodore Perry has submitted the letter in hopes that it will terminate the appeals process.

"We're following CUNA's lead in the exam legislations process like a good league would do and we look forward to working with CUNA and legislators to get something passed," he added.

The credit union was unavailable for comment by News Now's deadline.

Florida GAC Sees Support For Public Funds Deposit

 Permanent link
TALLAHASSEE, Fla. (3/28/13)--Nearly 40 credit union officials at the Florida State Governmental Affairs Conference (GAC) in Tallahassee last week heard from state officials who support their quest for public funds deposits and learned the value of credit union advocacy efforts.

Click to view larger image Florida Chief Financial Officer Jeff  Atwater drew applause when he told credit unions attending the Florida State Governmental Affairs Conference  that he supports credit unions getting public funds deposits. The event was sponsored by the League of Southeastern Credit Unions. (Photo provided by the League of Southeastern Credit Unions)
Florida Chief Financial Officer Jeff Atwater drew applause when he told credit unions that he supports their being able to accept public deposits, said the League of Southeastern Credit Unions. During a question and answer period, he reiterated that credit unions were safe and sound, and any financial institution that was safe and sound and had deposit insurance should be able to accept public deposits.

The No. 1 legislative priority for Florida's credit unions is to pass Senate Bill 918 and House Bill 251, which would allow credit unions to receive deposits from public entities.

During a reception attended by 27 legislators, State Rep. Kevin Rader (D-Delray Beach), who opposed the public deposits bill, spent time with Mack MacVicar, a director with City County CU of Fort Lauderdale. By the end of their visit, Rader told LSCU he may be coming around to the public deposits issues. "This is a great example of how credit unions can make a difference during advocacy events," the league said.

During credit unions' visits to legislators' offices, many lawmakers said they support the public deposits issue and what credit unions do for their members. Sen. Rene Garcia (R-Hialeah),  sponsor of S.B. 918, told credit unions he supports credit unions in the long run.

Other speakers included:

  • Darrick McGhee, legislative director for the governor's office, who outlined the governor's agenda, said the state will have a surplus this year, and noted the governor has given the Affordable Care Act to the legislature to determine what is best for the state.
  • Ryan Donovan, senior vice president of legislative affairs, the Credit Union National Association, who updated credit unions about federal issues and behind-the-scenes efforts by CUNA to get credit union legislation before legislators. He noted the 112th Congress passed fewer bills than the "do nothing" Congress of the 1940s did.
  • Marian Johnson, senior vice president of political strategy, the Florida Chamber of Commerce, who advised that grassroots advocacy is a 52-week-a-year job that must be ongoing at all times.
  • Bruce Ricca and Robert Hayes of the Florida Office of Financial Regulation and Robert Parrish from the National Credit Union Administration.
Rep. Jason Brodeur (R-Sanford)--who sponsored public deposits legislation last year in the House and was the first representative to co-sponsor  public deposits legislation in 2013--was presented the LSCU Lawmaker of the Year Award.

CUNA Mutual On World's Most Ethical Companies List

 Permanent link
MADISON, Wis. (3/28/13)--CUNA Mutual Group was identified as one of the most ethical companies in the world, according to an international organization that rates companies' business ethics and corporate social responsibility.

The organization, Ethisphere, cited CUNA Mutual Group along with 140 other companies from three dozen industries as the World's Most Ethical Companies for outperforming their industry peers in ethical behavior.

"CUNA Mutual Group is being recognized for its credit union advocacy, commitment to ethics, and compliance and community involvement," Ethisphere officials said. 

"It's an honor to be recognized for walking the talk on our commitment to corporate responsibility and ethics in business," said Steve Koslow, senior vice president, chief ethics and compliance officer, CUNA Mutual Group.

Companies from more than 100 countries and 36 industries were reviewed. This year's listed totaled 14 new honorees, including CUNA Mutual Group.

"Not only were there more applicants for the World's Most Ethical Companies recognition this year than any year in the past, but we are also seeing more companies be proactive and create new initiatives that expand ethics programs and cultures across entire industries," said Alex Brigham, Ethisphere executive director.

Ethisphere reviewed codes of ethics, litigation and regulatory infraction histories; investment in innovation and sustainable business practices; activities designed to improve corporate citizenship; and nominations from senior executives, industry peers, suppliers and customers.

ND Gov Signs Late Fee Bill, Rural Home Appraisals Bill Passes

 Permanent link
BISMARCK, N.D. (3/28/13)--Two bills--including a victory for credit unions--have progressed in the North Dakota legislature, says the Credit Union Association of the Dakotas.

Gov. Jack Dalrymple last week signed into law Senate Bill 2136, which will allow financial institutions to impose a late charge payment penalty if the amount of the late charge or method of calculation have been agreed to by the parties in the loan documents signed by the borrower, said CUAD (The Memo March 27).

The Financial Service Coalition, made up of credit unions, banks, independent community banks and farm credit services in the state, supported and advocated passage of the bill. "Financial institutions have not had the ability to negotiate or revise these terms since 1991," said CUAD.

Another bill, House Bill 1225, which would speed up the appraisal processes for rural homes, was passed by the House and Senate and awaits signature on the governor's desk. The bill, if approved, will make home sales prices public. That will aid real estate appraisers in gaining access to comparable sales prices in rural areas, and eliminate hurdles and delays in tracking down that information, said CUAD. The State's Tax Assessor Association also favored making the information public, it said.

To date, 29 bills of interest to North Dakota credit unions are still being debated in the legislature. Credit unions have appeared and testified at 18 hearings so far, said CUAD.

Washington CUs Launch Save To Win

 Permanent link
FEDERAL WAY, Wash. (3/28/13)--The Northwest Credit Union Association (NWCUA) and six credit unions in Washington have partnered with CU Solutions Group (CUSG) to offer the savings program Save to Win beginning Monday. Washington is the fourth state to offer the program.

"Research has shown that with Save to Win, un-banked and under-banked consumers become savers, often for the first time in their lives," said Troy Stang, NWCUA president/CEO. He added, "We know the result will be more financially fit consumers who are better prepared now to save for their goals."

NWCUA and its launching credit unions researched operations models and opted to contract with Michigan-based CUSG to operate the program for three years. Michigan's program has resulted in 40,000 unique accounts and deposits in excess of $70 million.

Legislation allowing credit unions to offer prize-linked savings accounts passed in the Washington Legislature in 2011. Washington's Save to Win program has a similar model to those currently offered in Michigan, Nebraska and North Carolina.

By making a $25 deposit, members at the six participating credit unions will be entered into a drawing to win a $5,000 annual prize and monthly prizes up to $5,000. The savings program is available to Washington state residents 18 years of age or older, who open accounts at a participating credit union.

Save to Win offers the excitement of a lottery without the risks of losing the money used to purchase a ticket. Members are guaranteed to have more money saved than when they started, because their funds stay in the account.  NWCUA's Strategic Link subsidiary is funding the prize pool for three years. 

Members open a share certificate and for each deposit of $25 or more they earn an entry into the monthly prize drawings, up to 10 prize entries per month. At the end of the month, prizes totaling up to $5,000 will be awarded to members. The member entries also will be entered for the annual prize drawing of $5,000 in April 2014.

Credit unions participating in this program are:

  • OBee CU, Tumwater;
  • Fibre FCU, Longview;
  • TwinStar CU, Lacey;
  • Connection CU, Silverdale;
  • North Coast CU, Bellingham; and
  • Express CU, Seattle.

CU System Briefs (03/27/2013)

 Permanent link
  • RALEIGH, N.C. (3/27/13)--
    Click to view larger image Click for larger view
    Raleigh, N.C.-based State Employees' CU is working with local school students and the farming community in Ahoskie, N.C., for a community gardening project. In mid-April, SECU's Ahoskie branch staff and advisory board  will oversee development of a 1.5-acre field adjacent to the branch. The garden will offer outdoor experience through local elementary school field trips, providing teachers with interactive, hands-on tools to meet curriculum objectives in social studies, math and geography.  Shown are Ahoksi branch staff, standing alongside the tractor manned by SECU Senior Vice President James Eure. Local farmers will help students learn how to plant, maintain and harvest fresh produce including watermelon, corn and cucumbers. Eure came up with the community garden concept after attending conferences on the state's farming industry. (Photo provided by State Employees' CU) …
  • FARMERS BRANCH, Texas (3/27/13)--Arlington, Texas-based Security One FCU has received the Juntos Avanzamos designation and flag from the Texas Credit Union League, the league reported (LoneStar Leaguer March 26). In a ceremony Saturday Father Philip D. Petta of the St. Matthew Catholic Church blessed the credit union for continued success in meeting the needs of local Hispanic families. Security One held its first community health fair, with 19 vendors participating, and offered special dance performances by the Ballet Folklorico de Fort Worth and Ballet Folkorico Huehuecoyotl. Dignitaries present included Pastor Enrique Gonzalez, Ph.D., of the Iglesia Bautista Trinidad; Arlington Councilman Robert Rivera;  Dr. Juan Hernandez, a political activist and former cabinet member in the Mexican government; and Texas league President/CEO Dick Ensweiler. Juntos Avanzamos designation means the credit union has completed a rigorous application process that confirms it has the capacity, commitment and compassion to serve the financial needs of Hispanic families. (Photo provided by the Texas Credit Union League) …

Natco CU Opens Community Empowerment Center

 Permanent link
RICHMOND, Ind. (3/27/13)--Natco CU in Richmond, Ind., will open the Natco Community Empowerment Center (NCEC) to provide assistance and resources so area consumers achieve economic empowerment. The move comes after the credit union noticed a significant increase in unemployed or under-employed individuals in its community.

This is a just one example of how credit unions take the initiative to move forward in their mission of serving their communities--especially during tough economic times, said the Credit Union National Association.

"Our focus has been on helping credit-challenged individuals rebuild their credit and raise their credit score," Natco CEO Cynthia Gribben explained. "We've seen first-hand how this approach, in combination with various other tools/resources, increases a consumer's ability to obtain future loans at reasonable interest rates, and avoid future financial crisis.

"The Empowerment Center and Natco have a team of Certified Financial Counselors who work one-on-one with our community members to provide effective solutions that will help them through challenging times," she added. "By doing so, we are not only building secure futures, we build relationships."

CU Strategic Planning, a Community Development Financial Institution certification and grant writing firm, provided consulting services to the $63.5 million asset Natco in seeking grants to fund the NCEC and in helping with set up. The not for profit, low-income designated credit union is expanding its resources through the NCEC.

Many individuals within the credit union's community have become over-extended, living off their credit cards or using payday loans during periods of reduced income, said Gribben. The credit union seeks solutions that will allow those individuals to rebuild their credit and consolidate their credit-card debt, with the goal of being debt free within three-to-five years.

The center will provide the community with no-cost programs and services, including: one-on-one financial counseling, resume/job seeking assistance, homeownership/foreclosure assistance, small-business support, budgeting, credit/debt assistance, access to computers and office resources, financial/life skills outreach, workshops and scholarship/federal student aid resources.

Judge Rules Against Cardtronics In ATM Access Case

 Permanent link

BOSTON (3/27/13)--A federal judge in Boston Thursday, saying that retail ATM operator Cardtronics "failed to satisfy self-imposed deadlines" for making its ATMs compliant with guidelines of a 2007 settlement agreement, imposed on the company three of four sanctions sought by the National Federation of the Blind and the Massachusetts Commonwealth.

Cardtronics, headquartered in Houston, Texas, owns and operates Allpoint Network, the ATM network that provides 55,000 surcharge-free ATMs to more than 1,100 financial institutions, including credit unions.

The order, by U.S. District Judge Nathaniel M. Gorton, noted that the court had approved a class action settlement in 2007 and a remediation plan in 2010 in which Cardtronics agreed to take certain steps to accommodate blind ATM users. 

The June 2007 agreement required gradual compliance. In July, 2011, the NFB filed a motion for contempt that alleged the company failed to meet all but one of the 10 requirements set forth in the remediation plan. The court gave the ATM company until March 15, 2012, to comply with all the obligations in the agreement or face significant monetary sanctions.

The court had instructed the company to install "enhanced scripts to enable voice guidance, tactilely discernable controls and appropriate signage" on all Cardtronics-owned ATMs not located in 7-Eleven stores and to inspect the ATMs to make sure the new features worked.

NFB filed a second motion for contempt in August 2012 and noted that 2,100 ATMs still had operational issues that rendered voice guidance systems inoperable. It also said Cardtronics had acquired 9,100 new ATMs without requiring their compliance with the remediation plan, and had failed to install Braille signage on all of its ATMs.  It asked for these sanctions:

The judge imposed the last three conditions and said the exact amount of the fine to be assessed will be determined in an upcoming hearing.

Litigation concerning ATM compliance with Americans With Disabilities Act regulations is on the rise. The Credit Union National Association recommends that credit unions take the opportunity to check their compliance with ADA regulations. For more information on how to comply with these regulations, use the resource links to CUNA's compliance E-Guide and CompBlog below.

  • A fine of $50 per ATM per month;
  • Appointment of a special master to monitor more closely the enforcement of the plan's terms;
  • Extension of the monthly reporting requirements through March 31, 2014; and
  • Payment of attorneys' fees and costs to plaintiff.
The judge imposed the last three conditions and said the exact amount of the fine to be assessed will be determined in an upcoming hearing.

Litigation concerning ATM compliance with Americans With Disabilities Act regulations is on the rise. The Credit Union National Association recommends that credit unions take the opportunity to check their compliance with ADA regulations. For more information on how to comply with these regulations, use the resource links to CUNA's compliance E-Guide and CompBlog below.

Survey: Small Businesses Prefer In-Person Over Mobile FI Services

 Permanent link
CHICAGO, Ill. (3/27/13)--Credit unions interested in better serving their small business members might want to note findings of a new BAI Research study: Unlike retail consumers who increasingly crave mobile banking systems, small businesses continue to prefer in-branch services and place high value on personalized service.

The study indicates that small businesses continue to be quite traditional in their pursuit of financial services--highly valuing proximity to their branch, access to quick "local" decisions on credit, and help with problem resolution.

Whether it is with a credit union or a bank, the study says that more than half of all business transactions are conducted at a branch. Small businesses also show a strong preference for in-person and live-agent phone conversations with their financial institutions, which drives them to greater branch usage.

In fact, the BAI research found that less than 25% of small businesses surveyed used mobile banking; only 8% used mobile bill pay.  Only 20% of respondents indicated that they prefer online over in-person banking.

A competitive plus for credit unions--the BAI survey found small businesses are very sensitive to fees. They value a good fee structure more than other innovations, rates or rewards programs.

In fact, survey respondents indicated that higher fees are the factor most likely to affect a decision to switch financial institutions. Credit unions are owned  and governed by members and don't have stockholders and return their earnings to members through lower rates for loans, higher rates for deposits and no or lower fees.

BAI Research noted its survey was sponsored by ARGO, a software innovator for banks, credit unions, lenders, and healthcare providers.

NCCUL Sponsors Video Contest For Young Pros

 Permanent link
GREENSBORO, N.C. (3/27/13)--The North Carolina Credit Union League announced a new video contest for young credit union professionals in which the winner will attend the league's Future Leaders Forum during its Annual Meeting June 9-10 in Pinehurst, N.C.

"Emerging leaders bring with them a lot of enthusiasm, creativity and a fresh perspective," said Lauren DeAngelis, NCCUL's director of professional development (The Weekly Conversation March 22). "We thought the video contest would be a fun way to spotlight some of the gifted people who make up the next generation of credit union leadership in North Carolina."

Video applications must be uploaded by 5 p.m. EDT May 1.  Applicants should:

  • Produce a video not more than two minutes long that answers the questions: What is your vision for engaging young professionals in the credit union movement? What ideas do you have to realize that vision?
  • Currently work at a North Carolina credit union and be 35 years old or younger as of June 10.
The winner will be announced May 17.  The league will waive the registration fee to the forum and provide free lodging for the winner.

Wash DFI Issues Guidance For Employee Benefits Trusts Investments

 Permanent link
FEDERAL WAY, Wash. (3/27/13)--The Washington State Department of Financial Institutions (DFI) has issued an interpretive letter  indicating that state-chartered credit unions may make certain investments that otherwise would be impermissible, so long as they are for the express purpose funding employee benefit obligations.

DCU Interpretive Letter 1-13-02 creates parity between state and federal credit unions. Both now have the same investment latitude in funding employee benefit obligations through an employee benefit trust, said the Northwest Credit Union Association (Anthem Recap March 22).

Three limitations federal credit unions have in investing in this area now apply to state-chartered credit unions exercising the parity provision:

  • The purpose of the investment must be for funding "an employee benefit plan" obligation. The National Credit Union Administration defines "employee benefit plan" the same as the Employment Retirement Income Security Act (ERISA), which includes employee welfare benefit plans or employee pension benefit plans.
  • The investment must be directly related to the credit union's obligation or potential obligation, and the credit union must be able to explicitly demonstrate that relationship.
  • The credit union can hold the investment only for the period in which it has an actual or potential obligation under the plan the investments are to fund. If a credit union holds an investment to fund retirement benefits for an employee, the employee retires and the obligation is paid, the credit union must divest of the investment unless additional employee benefit obligations exist that would replace the original and take its place directly related to the investment in question.
To segregate the employee benefit plan investments from the credit union's own investments, credit unions can establish an employee benefit funding trust using a trust agreement. For more detail, use the link.

Hannaford Breach Judge: Cardholders Not a Class

 Permanent link
PORTLAND, Maine (3/27/13)--A U.S. District judge in Portland, Maine, has denied a class-action certification to plaintiffs in the data breach lawsuit against Hannaford Bros., a New England grocery chain.

The case is a consolidation of a number of civil lawsuits filed. Plaintiffs sought compensation for costs they bore in replacing compromised debit and credit cards, reimbursing fraudulent charges on the cards, notifying members or customers whose cards were compromised, closing and setting up new accounts, and footing the bill for credit and ID theft monitoring and insurance services.

Hannaford Bros. suffered the point-of-sale breach from Dec. 7, 2007, through March10, 2008, when an estimated four million card numbers were stolen . The numbers were used at 165 Hannaford markets in the Northeast and 106 Sweetbay supermarkets in Florida (News Now Nov. 30, 2011).

U.S. District Judge D. Brock Hornby's opinion noted that the plaintiffs satisfied all the criteria but one--predominance--to be designated a Rule 23 (b) (3) class.  The rule provides for class certification where "questions of law or fact common to class members predominate over any questions affecting only individual members," the ruling said. 

Hannaford's argument--that it has a due process right to cross-examine every class member individually about their experience related to damages--"would basically eliminate consumer class actions," said the ruling.  On the other hand, Hornby added, plaintiffs could not provide the total lump sum of damages without an expert to review the data. "Without an expert, they cannot prove total damages, and the alternative…is a trial involving individual issues for each class member as to what happened to his/her data and account, what he/she did about it, and why."

The argument noted that the plaintiffs satisfied all the other criteria for the class:

  • Numerosity (whether the class as defined is composed of sufficient numbers to warrant a class action treatment);
  • Commonality (whether questions of law or fact are common to the class);
  • Typicality (whether class representatives, in pursuing their own interests, concurrently will advance those of the class);
  • Adequacy (have no potential conflict between plaintiffs and potential class members,  and choose lawyers who can "vigorously conduct the proposed litigation");  and
  • Superiority (whether the case is the best way to adjudicate the issue). In the last category, the court said Hannaford's gift-card refund program could not be considered a method of "adjudicating the controversy."
The judge noted that the plaintiffs needed to "show that Hannaford was negligent or breached an implied contract, that Hannaford's conduct caused the data breach, that the data breach affected their debit or credit cards, and that they took reasonable mitigating efforts as a result."

CUs Garner More Good Media Coverage In NY Times, NerdWallet, Go Banking

 Permanent link
NEW YORK (3/27/13)--Credit unions garnered press coverage Monday from several national media outlets, including The New York Times, Nerd Wallet and Go Banking. They all pointed to the benefits and value of credit unions.

A New York Times blog post Monday picked up on a widely circulated Bankrate.com survey released last week. Nearly three-quarters of credit unions surveyed nationwide offer free checking accounts with no strings attached, compared with fewer than half of U.S. banks--39%, it reported.

News Now reported on the Bankrate survey March19 and March 21. The survey was covered by several other media outlets.

The Times noted that the survey of the 50 biggest credit unions--based on total deposits--indicated 36 out of the 50 offered free checking; half did not require a minimum deposit; and none had a minimum opening deposit requirement of more than $100. Free checking availability at banks has "plummeted" since 2010, while only modestly declining at credit unions, according to the Bankrate survey.

NerdWallet Monday compiled a list of the top 10 best cities for consumer banking, and in seven of the cities listed, a credit union was mentioned as being a financial institution that served consumers well in some way. Cincinnati was listed as the best city for consumer banking.

Credit unions mentioned were:

  • Pittsburgh Central FCU for being among the best local options for free checking accounts;
  • University of Wisconsin CU in Madison, Wis., as an institution dedicated to serving a highly educated population in a big college town;
  • TTCU CU in Tulsa Okla., singled out for offering members an annual percentage yield (APY) of 0.35% on basic savings accounts;
  • Energen CU in Birmingham, Ala., for helping lead the high-yield environment with a saving account rate (or dividend) of 0.75% APY;
  • FedChoice FCU in Washington, D.C., as a good local financial institution  option;
  • Buffalo (N.Y.) Community FCU for being a good consumer option for financial institutions operating within that city; and
  • Orlando FCU as a good locally based option for  Floridians' financial needs.
GoBankingRates.com Monday mentioned 10 credit unions with great perks and service, and which anyone can join.

They are:

  • CommunityWide CU, South Bend, Ind.;
  • GTE Financial CU, Tampa;
  • Self-Help CU, Durham, N.C.;
  • NuVision FCU, Huntington Beach, Calif.;  
  • America's CU, Garland, Texas;
  • State Department FCU, Alexandria, Va.;
  • Alliant CU, Dubuque, Iowa;
  • Pentagon FCU, Alexandria, Va.;
  • NASA FCU, Upper Marlboro, Md.; and
  • Consumers CU, Round Lake Beach, Ill.
To read the articles, use the links.

Mid-Atlantic Corporate Becomes Filene Gold Benefactor

 Permanent link
MADISON, Wis. (3/26/13)--Mid-Atlantic Corporate FCU in Middletown, Pa., a longtime contributor to the Filene Research Institute, has increased its support of the institute's work and now is a Gold Benefactor.

Filene shares the corporate's commitment to the credit union model--particularly the desire to help improve the economic well-being of people and their communities, said Jay Murray, president/CEO of the corporate. 

"The Filene team has influenced our strategic thinking," Murray added. "We have discovered new ideas and created partnerships to advance the credit union cause. I find the interactions with the Filene team, the nationally recognized universities and the participating credit unions a tremendous benefit to our organization."

Filene is collaborating with Mid-Atlantic Corporate on internal strategic plans. The corporate has participated in several Filene projects, including:

  • A Filene i3 pilot program exploring a variation of the MoneyWorks program, now known as the Gatherings program, a direct sales model of financial services in a home party environment; and
  • Filene i3 and  big.bright.minds meetings where staff participated in innovation and research programming.

CU System Briefs (03/26/2013)

 Permanent link
  • TUKWILA, Wash. (3/26/13)--Tukwila, Wash.-based BECU has made more than $100,000 in educational grants to 49 schools in the state, the 11th consecutive year it has awarded more than $100,000 to support educational projects. "BECU School Grants allow us to support programs that previously lacked the funding to get started," said Tom Berquist, SECU senior vice president of member strategies. "We love awarding grants that can make an impact on student success and are inspired every year by the schools who receive the grants." The grants fund educational materials, programs and events, environmental learning trips and technology tools such as calculators, microscopes, electronic dictionaries and more. Grants are awarded in three categories: Financial Literacy, Environmental Sustainability, and Technology Tools. Each grant is awarded based on specific need, up to $2,500. BECU received 84 applications and narrowed it down to 49, based on eligibility of the request, impact on student learning, number of students reached with grant funds, and potential ongoing use of the item or program …
  • LOGAN, Ohio (3/26/13)--An employee of  Piketon, Ohio-based Atomic CU employee was indicted by a grand jury on theft and safecracking charges in the theft of $6,000 from the credit union's cash vault. Cassie L. Wildermuth, 28, of Logan, pleaded not guilty to the charges. The Logan Police Department reported the thefts occurred between Oct. 20 and Nov. 24 and Wildermuth allegedly was the last employee to conduct an audit. The credit union also discovered two binders with information about the last vault audit were missing. A jury trial is set for June 6 in Hocking County Common Pleas Court. (Logan Daily News March 21) …

Court: CU Can't Pursue Acquired CU's Legal Claims

 Permanent link
DENVER (3/26/13)--A federal judge in Denver has dismissed Security Service FCU's lawsuit over fraudulent mortgage construction loans sold to New Horizons Community CU before New Horizons went into conservatorship and was acquired by Security Service.

U.S. District Senior Judge Wiley Y. Daniel of the U.S. District Court for the District of Colorado ruled that "Security Service is not the proper plaintiff in this action and therefore its claims are dismissed with prejudice."

At issue were 26 construction loans financed by New Horizons in an agreement that occurred Aug. 1, 2003. Defendants in the case are First American Mortgage Funding (FAM) and several title companies.

Last Wednesday's ruling noted that in the purchase and acquisition (P&A) agreement between the National Credit Union Administration--New Horizon's liquidating agent--and the San Antonio-based Security Service, NCUA transferred  New Horizons' assets but "retains, for the benefit of the liquidation estate of the liquidating credit union (New Horizons), the sole right to pursue claims (through arbitration, litigation, insurance claims, bond claims or otherwise) and to recover any and all losses incurred by the liquidating credit union prior to liquidation."

Security Service had argued that its P&A agreement with NCUA assigns and transfers any and all evidence that could possibly be used to litigate claims arising from New Horizon's losses to Security Service.

However, the judge noted, Provision 9 of the agreement also grants NCUA "unconditional access" to such evidence and that the credit union agreed "to cooperate in any investigation of the liquidating credit union" as well as agreed to assist NCUA in "documenting any bond claim the liquidating agent (NCUA) may file in connection with losses sustained by" New Horizons.

New Horizons Community, a Denver-based credit union, was one of three credit unions that collapsed as a result of the mortgage construction loan fraud scheme, which involved "straw buyers"--people who allegedly were paid by defendants FAM and the title companies to use the borrowers' personal information and credit score to secure the loans, according to the ruling.

The straw buyers defaulted, leaving several million dollars in debt and contributing to New Horizons' conservatorship in April 2006. NCUA and Security Service entered the P&A agreement on July 10, 2007. Security Service's suit alleged breach of contract, breach of fiduciary duty, negligence, negligent misrepresentation, conspiracy and fraud.

The fraud also led to conservatorships of Fort Collins, Colo.-based Norlarco CU and Michigan-based Huron River Area FCU.

Oregon Legislators, Regulators Express Support For CUs

 Permanent link
SALEM, Ore. (3/26/13)--At Oregon Credit Union Day Wednesday at the Oregon Capitol in Salem, State Speaker of the House Tina Kotek (D-44) joined State Treasurer Ted Wheeler and Department of Consumer and Business Services Director Pat Allen in addressing the group and expressing praise and support for the state's credit unions, said the Northwest Credit Union Association.

Nearly 300 credit union advocates representing Oregon's credit unions were present to talk about the credit union difference and meet with 88 of 90 state legislators (NWCUA's Anthem Recap March 22).

Kotek said she has not been swayed by banks' recent lobbying efforts. "I understand where they're coming from," Kotek said with regard to the three bank lobby-backed bills currently under consideration. "The reality is, we don't need them."

The three bills in the Oregon legislature would impose an excise tax on large credit unions as well as require Community Reinvestment Act-type disclosures from credit unions about their service to low-income residents (News Now March 14).

Kotek encouraged credit unions to continue serving the public and to fill a need wherever possible. "You have a role," she said, pointing to examples such as proactively helping members avoid foreclosure and to credit unions' financial literacy outreach.

Wheeler and Allen spoke at a reception at the Salem Convention Center. Wheeler has been a champion for financial education and for the way credit unions provide it, saying he admires the movement's work and its partnerships with organizations such as JumpStart, NWCUA said.

"We want to help you be successful in any way we can," Wheeler said. "We want to partner with you to raise the financial IQ in Oregon."

Also, the state Treasurer's office will administer a public funds program for credit unions, which launches Monday, Wheeler said

At that time, all of Oregon's public entities--which include city governments, schools and fire departments and many others--will be allowed to deposit funds in their local credit unions (Anthem March 19).

CBS This Morning Features CU Difference Via Our Family Social CU

 Permanent link
OMAHA, Neb. (3/26/13)--Our Family Social CU (OFSCU) in Omaha, Neb., which serves only direct descendants of a family line, was featured Sunday on news show CBS This Morning, in a story that illustrated the credit union difference.

OFSCU is a microcosm of what credit unions always are doing for their members--helping each other out and cooperating for the good of their members as not-for-profit institutions, says the Credit Union National Association.

The show's producers also visited America's Credit Union Museum in Manchester, N.H., and CUNA's communications staff provided background information for the segment.

OFSCU allows direct descendants of Manley and Lucy Williams or someone married to them to become members after making a $5 deposit and paying a 25-cent handling fee. 

The $515,543 asset credit union, run out of the home of the credit union's manager, Sue Cain, has 51l members in 22 states. The credit union is mostly a volunteer enterprise. Cain is a middle school math teacher; Dave Cain, chairman of the board, teaches sixth grade English; and Chief Loan Officer Art Peters works in construction.

As for the credit union difference, it is significant, Peggy Powell, executive director of America's Credit Union Museum, told CBS This Morning. "Banks have shareholders, and they have to satisfy their shareholders; credit unions are not-for-profit organizations," Powell said.

"That does not mean that credit unions don't make a profit," she added. "It means their profits are returned to their members."

To see a transcript of the segment, use the link.

S&P Documents 'Highly Relevant' To Claims Vs RBS--CUNA Mutual

 Permanent link
MADISON, Wis. (3/26/13)--CUNA Mutual Group filed a brief Monday in a federal court in New York that argues documents it subpoenaed from ratings agency Standard & Poor's  (S&P) are "highly relevant" to its claims in its lawsuit over residential mortgage-backed securities (RMBS) sold by RBS Securities.

S&P, in a motion last week before the U.S. District Court for the Southern District of New York, had alleged that CUNA Mutual's subpoena of documents was a fishing expedition that would involve tens of millions of pages of documents it had already produced to state and federal agencies, plus more than 100 transcripts of depositions. S&P is not a party in CUNA Mutual's suit against RBS.

"We strongly disagree with S&P and consider the documents we are seeking to be highly relevant to our claims against RBS," said Phil Tschudy, CUNA Mutual Group media relations manager. 

"Specifically, we are seeking documents about the relationship between RBS and S&P with respect to S&P's rating of MBS, including whether RBS improperly influenced those ratings," he told News Now. "The information is relevant because RBS claims to have no responsibility for the outcome of the S&P ratings."

CUNA Mutual's reply brief filed Monday "will establish the relevance and necessity of these documents in greater detail," Tschudy said.

The brief noted that a Pennsylvania court rejected a nearly identical argument made by S&P a week before it filed its motion in this case.

CUNA Mutual argues:

  • Its subpoena seeks "relevant, discoverable information" that will show "among other things, that RBS engaged in a campaign of coercion against the credit ratings agencies to rate RMBS higher than justified so that RBS could use the inflated ratings to convince investors to purchase the securities."
  • It would not be an undue burden to produce the documents since S&P already has collected and has available in ready-to-produce format the material CUNA Mutual seeks.
"CUNA Mutual already possesses documents showing that RBS attempted to bully credit ratings agencies, including S&P, to raise their ratings," said the company's brief. "The documents requested under the subpoena will provide the next link in the chain--they will show that RBS' tactics actually influenced S&P's behavior, and caused it to issue artificially high ratings."

CUNA Mutual's lawsuit against RBS is in the U.S. District Court for the Western District of Wisconsin, Madison. It claims rescission and unjust enrichment for more than $70 million in investments it made in 15 "investment grade" certificates from 10 RMBS offerings from 2004 to 2007.  Investors later learned the certificates were backed by defective loans that were improperly underwritten, according to court documents.

Rep Castro To Address Texas League Conference

 Permanent link
FARMERS BRANCH, Texas (3/26/13)--U.S. Rep. Joaquin Castro (D-Texas) will address more than 500 credit union executives at the Texas Credit Union League's Texas Governmental Affairs Conference and Member Meeting and Expo, which meets April 2-5 in Austin.

A long-time credit union member, Castro served five terms in the state legislature before being elected in 2012 to the U.S. Congress, representing District 20.

"Rep. Castro is considered by many to be a rising star of the Democratic Party, and we are delighted he is taking time out of his busy schedule to share his perspectives and insights at this very important gathering of credit union leaders," said league President/CEO Dick Ensweiler.

The conference, which combines the GAC and the Members Meeting and Expo for the first time, will feature a business meeting, an exhibit hall, networking opportunities and educational sessions exploring key issues impacting the financial marketplace. Attendees also will meet with elected officials at the Capitol.

"The sheer volume of credit union leaders who attend this conference each year illustrates the level of cooperativeness that exists between credit unions. In the end, it is the members who benefit most from this collaborative sharing of ideas and resources," Ensweiler said.

This year's sponsors include CUNA Mutual Group, Catalyst Corporate FCU, Pulse, CO-OP Financial Services, Credit Union Resources Inc. and the Texas Credit Union Foundation.

Red Canoe, Empower CUs To Launch Joint Employee Sales Training

 Permanent link
LONGVIEW, Wash., and SYRACUSE, N.Y. (3/26/13)--The power of cooperation at work among credit unions is a factor in a new partnership between sales and training staff at Longview, Wash.-based Red Canoe CU and Syracuse, N.Y.-based Empower CU.

Red Canoe CU, a $578.6 million asset credit union, and Empower CU, with $1.128 billion in assets in Syracuse, N.Y., are teaming together to implement a joint employee sales promotion, called "Apples to Apples," that focuses on sharing best practices and challenges related to the loan buyout process.

The name connects Washington apples to the New York's well-known "Big Apple" nickname, said the Northwest Credit Union Association (Anthem Recap March 22).

The credit unions will house the initiative in a dedicated website with blogging capabilities. Employees at each credit union can share real-time challenges and success stories while networking with other professionals in their field.

"We met Empower CU while networking at a conference and quickly realized we had several training initiatives in common," Rod Snyder, assistant vice president of sales and branch performance at Red Canoe, told NWCUA. "We had a common goal of helping our members save as much money as possible and decided by working together, we could create something that perhaps has never been done before."

"The program was designed to build on the strengths both credit unions already housed," said Ken Kelly, training and development manager at Red Canoe. Empower "has an extensive database tracking system and excels in data management," while "Red Canoe has a unique internal brand and sales culture that has been finely tuned over the years with the support of our senior management team," Kelly said.

The Apples to Apples promotion has been in development for the past five months and is expected to launch to sales staff at both credit unions in April.

"We have been working together via teleconference since early November, and now we are at a weekly meeting point," Michelle Trakas, Red Canoe sales and service training manager, told NWCUA.

Wegner Award Nominations Due June 28

 Permanent link
MADISON, Wis. (3/26/13)--Credit union supporters have until June 28 to nominate individuals and organizations for the Herb Wegner Memorial Awards to be presented by the National Credit Union Foundation.

Winners will be honored at NCUF's annual awards dinner Feb. 24 in conjunction with the Credit Union National Association Governmental Affairs Conference in Washington, D.C.

Nominations are for:

  • The Individual Achievement Award, which honors an unsung hero for innovative concepts, accomplishments that are ongoing and current contributions to the credit union community, and work within the past three to five years. Accomplishments must have had a significant impact or potential impact on the local, national and/or international credit union movement with measured results. Nominations must cite a specific subject of achievement such as financial literacy, service to the underserved, alternatives to predatory lending, and/or new products.
  • The Outstanding Organization/Program Award, which honors an organization, program or business for innovative concepts and/or product/services that have had a significant impact on the local, national and/or international credit union movement with measured results.
  • The Lifetime Achievement Award, which honors an individual who has dedicated his or her life to promoting the credit union philosophy, created innovative concepts and provided leadership that has had a significant and lasting impact on the local, national and/or international credit union movement.
Nominations can come from individuals and/or organizations. To make a nomination:

  1. Complete the Wegner Awards nomination form on the NCUF website.
  1. Gather at least five letters of recommendation citing examples of the nominee's achievements relevant to the award criteria.
  1. Send the nomination form and recommendation letters electronically to NCUF by June 28.
Questions about the Wegner Awards can be directed to Josie Collins at jcollins@ncuf.coop or 800-356-9655, ext. 4374.

Texas CU Launches First-Time Auto Buyers Program

 Permanent link
SAN ANTONIO (3/25/13)--Generations FCU in San Antonio recently launched a first-time auto-buyers program to help members deal with financial problems they may encounter when trying to buy their first new or used car.

The Your Ride, Your Rules program requires first-time buyers to be at least 18 years of age, provide proof of three months of income, show proof of insurance coverage and have no prior auto-loan credit. The loan maximum is $25,000, and the term is for 48 months. Participants' payments cannot exceed 20% of their monthly gross income (LoneStar Leaguer March 22).  

"Buying your first car, no matter if it's new or used, can be a nerve-wracking and difficult experience, especially when it comes to financing," Andrew Wilson, Generations vice president of lending, told the Texas Credit Union League. "As a credit union we are committed to being an advocate for our members. Your Ride, Your Rules helps them get a fair deal on that first car and also to be successful in paying it off and building a strong credit history."

The program requires borrowers to complete a one-hour online Financial Literacy 101 course to help ensure they can repay the loans. Topics include financing a car purchase, the total cost of ownership, negotiating a sale price, common mistakes to avoid when purchasing an auto and how to avoid surprises.

Program applicants do not need a co-signer for the loan and are not required to have a two-year employment history.

CU System Briefs (03/25/2013)

 Permanent link
  • FORT WORTH, Texas (3/25/13)--EECU  surpassed the $1 billion milestone in loans at the end of 2012 and has sustained that amount since, according to the Texas Credit Union League (LoneStar Leaguer March 22). The Fort Worth-based credit union offers new- and used-car loans, recreational vehicle and boat loans, mortgages, home equity loans, personal loans and credit cards. It receives and processes loans through 13 branch locations, online channels and indirect lenders such as auto dealerships. The milestone represents the credit union's "commitment to developing the financial solutions that North Texans are looking for," said Lonnie Nicholson, EECU president/CEO …
  • WINSTON-SALEM, N.C. (3/25/13)--Rodney Jerome Rainey, 41, of Winston-Salem, N.C., on trial for the Feb. 3, 2012, robbery of Latino Community CU's Winston-Salem branch, interrupted testimony by his uncle and changed his plea to guilty (Winston-Salem Journal March 21).  He had been charged with common-law robbery and being a habitual felon. His uncle was the third witness called in the case and testified that Rainey work a camouflage jacket like the one worn by the robber and had given him money after the robbery.  Rainey jumped up and told the judge he would plead guilty.  The judge dismissed the jury and sentenced Rainey to between eight years and five months to 11 years and two months in prison. During the heist, the robber demanded $7,500 from the teller and told her to avoid a stacked bundle of cash. He fled with $2,000 …
  • BATH, Maine (3/25/13)--Midcoast FCU in Bath, Maine, announced that Joe Gervais will become president/CEO of $127 million asset credit union in June, upon the retirement of Gail Richardson, according to the Maine Credit Union League (Weekly Update March 22).  Gervais has been with Orono-based University CU for the past 20 years, including the past seven years as executive vice president. He will join the credit union on April 22 and work with Richardson on the leadership transition this spring …
  • GARDINER, Maine (3/25/13)--Gardiner (Maine) FCU has announced that Vicki Lemieux will become the $37 million asset credit union's new president/CEO in June, upon the retirement of Phil Bergeron.  Lemieux has held the position of loan/collections manager for several years at the credit union, according to the Maine Credit Union League (Weekly Update March 22) …

15 Join Iowa League Innovators Group

 Permanent link
DES MOINES, Iowa (3/25/13)--The Iowa Credit Union League (ICUL) selected 15 credit union executives to join its inaugural Iowa Innovation Group (IIG) program, which fosters the development of new ideas and innovations for credit unions.

Each member will serve a seven-month term, participate in meetings led by a team from ICUL and the Filene Research Institute, and pilot new ideas at their credit unions.

"While the struggles of consumers and financial institutions are all too real, this environment is perfect for innovation," says Jim Niederhauser, ICUL vice president of member services. "We're confident that this new group of innovators has the skills, passion, and grit to transform the lives of consumers through credit unions in Iowa."

Modeled after Filene's i3 (Ideas, Innovation, Implementation), IIG seeks to launch similar programs such as the i3 Save to Win (prize-based savings accounts), nationwide Savings Challenges (reality TV meets wallet improvement) and Debt in Focus (an anonymous, online financial assessment tool).

IIG will identify ways to improve how credit unions provide financial guidance to their membership.

IIG members include:

  • Alejandro Alaniz, account relationship specialist, Des Moines (Iowa) Metro CU;
  • Dan Davis, vice president of finance/information technology, Financial Plus CU, West Des Moines;
  • Brian Day, Dwolla product leader, The Members Group;
  • Paul Farmer, innovation officer, Veridian CU, Waterloo;
  • Rich Head, information technology director, Linn Area CU, Cedar Rapids;
  • Maria Johnson, assistant vice president, marketing, Collins Community CU, Cedar Rapids;
  • Janet Lintin, CEO, Des Moines (Iowa) Police Officers CU;
  • Kris Lundquist, vice president, marketing, The Family CU, Davenport;
  • Penny McCoy, branch manager, First Class CU, West Des Moines;
  • Jonathon Miller, president/CEO, Dubuque (Iowa) Teachers CU;
  • Samantha Pingel, member service representatives, Fort Dodge (Iowa) Family CU;
  • Aaron Plein, vice president, branch manager/service delivery, Dupaco Community CU, Dubuque;
  • Denny Siemers, CEO, Town and Country CU, Harlan;
  • Kathy Steffes, branch manager, Iowa Community CU, Cedar Falls; and
  • Jennifer Tebbe, eServices branch manager, Greater Iowa CU, Ames.

CUs' Small Biz Loans Help Put New Sauces On The Market

 Permanent link
DURHAM, N.C. (3/25/13)--Two North Carolina credit unions provided member business loans (MBL) to local entrepreneur Michael Lloyd to help get his small business off the ground and parlay his family's recipe for a sauce into a mass-produced condiment.

In 2010, Self-Help FCU in Durham N.C., with $580 million is assets, loaned Lloyd $10,000 for equipment and marketing for his company (newsobserver.com March 18).

Then in 2011, the Durham-based Generations Community CU, with $23 million in assets, approved a $15,000 loan to help Lloyd increase the production of his sauce to two 60-gallon batches per month, from three 20-gallon batches per month, the newspaper said.

Lloyd, who is working toward his doctorate in food and nutritional sciences at North Carolina State University, is continuing to grow his business, which now sells sauces and mustards in 24 stores--primarily located in North Carolina and South Carolina.

Down the road, Lloyd hopes to market his Num Num brand, which has low sodium and no gluten, to schools as a substitute for high-sodium condiments. He also hopes to hire interns to educate the public about the benefits of a low-sodium condiment, the paper said.   

Credit unions want to do more to assist such entrepreneurs to start up and grow their small businesses. That's why the Credit Union National Association and credit unions supported legislation reintroduced in Congress last month to raise credit unions' MBL cap to 27.5% of total assets, up from 12.25%.  Doing so would generate $14.5 billion available for MBLs--and increase jobs by 158,000 in the first year without costing the taxpayer, according to new statistics from CUNA.  

To read the article, use the link.

Vermont Banks Oppose Bank Tax, Call For CU Tax

 Permanent link
SOUTH BURLINGTON, Vt. (3/25/13)--Three banks testifying before a Vermont state legislative committee brought up taxing credit unions when they spoke of their opposition to increasing a bank franchise tax. But the idea "didn't get enough traction with legislators to go anywhere," said Joe Bergeron, president/CEO of the Association of Vermont Credit Unions.

Even though the idea went nowhere, it is "just one of many reasons why Vermont leaders need to join AVCU's lobbying team at our annual Credit Unions in the Statehouse day on Wednesday, April 10," said Bergeron. "It's important for credit unions to be active in political involvement and advocacy," he told News Now.

Protecting and defending credit unions' tax-exempt status is the No. 1 legislative priority for the credit union system, said the Credit Union National Association. To that end, CUNA has made available a Credit UnionTax Status Advocacy Toolkit to help credit unions show members the value of credit union membership. Use the link for more information. (See related News Now story, "Tools Added To CUNA Tax Advocacy Arsenal.")

The banks' comments were made in testimony Wednesday morning before the House Ways and Means Committee, which is searching for $20 million to fill the state's 2014 budget deficit, said AVCU. "A broad range of approaches was entertained, including a 25% increase on the franchise fee (0.000096 of the institution's average monthly deposits held in the state) paid quarterly by banks." The franchise tax is an alternative to an income tax (Newslines Express March 22).

Vermont Bankers Association President Chris D'Elia and two bank CEOs objected to an increase in their franchise tax, then attempted to get credit unions on the table as well, without prompting by legislators, said AVCU.

AVCU's lobbying team monitored legislators' reaction to the banks' suggestions very closely, said AVCU.  By day's end, however, the suggestion to increase the banks' franchise tax was off the table and the legislators moved on to other alternatives.

Financial Literacy Month an Opportunity For CUs to Shine

 Permanent link
MADISON, Wis. (3/25/13)--As Financial Literacy Month, April will present an opportunity for credit unions to rededicate themselves to their core operating principles of education and social responsibility, says Lois Kitsch, National Credit Union Foundation national program director.

"It is part of our mission," Kitsch said. "It is why we exist. But I also think it makes good business sense. The more educated members we have the more successful and productive they will be as members of the credit union. It makes common sense that access to financial information should be the core of everything credit unions do."

NCUF raises funds, makes grants, manages programs, and provides education to help consumers achieve financial freedom through credit unions. Through NCUF grants and programs, credit unions fund financial education and empower more consumers to save, build assets and own homes.

There is evidence that a need for financial education exists among U.S. consumers. The sixth annual Financial Literacy Survey of adults, conducted in 2012 on behalf of the National Foundation for Credit Counseling and the Network Branded Prepaid Card Association revealed that:

  • Two in five U.S. adults gave themselves a C, D or F on their knowledge of personal finance;
  • 56% admit that they do not have a budget;
  • One-third, or more than 77 million Americans, do not pay all of their bills on time;
  • 39% carry credit card debt over from month to month;
  • Two in five adults indicated that they now save less than they did one year ago; and about 39% do not have any non-retirement savings.
"It's a logical step financial education should start with credit unions, which are philosophically grounded in it," Kitsch.

NCUF is inviting credit union organizations to hold a "Financially Fit Day" on April 3 to kick off National Financial Literacy Month. Credit unions can hold fundraising days with members or staff on April 3 or throughout April, NCUF said. Donations will be split between NCUF and a state's credit union foundation.

Credit unions will have plenty of resources to assist in their financial literacy efforts. In April, the Credit Union National Association will offer credit unions two opportunities to increase credit union awareness while building financial literacy among America's youth.

National Credit Union Youth Week, April 21-27, was created by CUNA so credit unions nationwide could focus on the financial needs of young people and provide financial literacy education. The event focuses on teaching the benefits of saving and goal setting, and invites youth to open savings accounts at their credit union and make deposits throughout the year.

This year's theme, "Savings Sleuth: Solve the Mystery" employs mystery and mustaches to engage youth. For National Credit Union Youth Week promotional materials and resources, use the link.

Because National Credit Union Youth Week occurs during Financial Literacy Month, credit unions can extend their youth activities throughout April.

CUNA conducts the National Youth Saving Challenge throughout April. The challenge rewards 10 savers with $100 cash prizes. Last April, 241 credit unions joined the Saving Challenge and engaged 125,867 youth, who deposited a collective $21.3 million in their credit union savings accounts, including 7,300 new member accounts.

"It makes good business sense for credit unions to help members make the most of their financial resources. We believe that educated consumers choose credit unions as their best financial partner," said Susan Tiffany, CUNA director of consumer periodicals. "We also believe it's the right thing to do."

NM Legislative Session Ends, No New Regs Impact CUs

 Permanent link
ALBUQUERQUE, N.M. (3/22/13)--New Mexico's 60-day state legislative session ended March 16, with no additional regulatory or tax burdens enacted that would impact credit unions, said the Credit Union Association of New Mexico.

Credit unions were "extremely active, visible and engaged," and they took the "opportunity to showcase the credit union difference" and the work credit unions do daily, said CUANM Vice President Governmental Affairs Juan E. Fernandez Ceballos. "We worked diligently to ensure that no additional regulatory or tax burdens were enacted and successfully achieved this goal," he added.

A key data breach bill, SB 347, which would have made it illegal for merchants to keep unencrypted credit or debit card data after an authorization process and made them liable for the costs associated with data breaches of unencrypted data,  ran out of time and was not addressed by the time the session ended.

Credit unions strongly supported the bill and had met with the Senate Majority Leader to explain credit unions' position, Ceballos told News Now. However, SB 347 "clocked out." Earlier, SB 347 "had passed unanimously in the Senate Judiciary Committee and the Corporations and Transportation Committee," he said.

"We plan to reintroduce the legislation," he added. It was modeled after legislation in other states and would have given credit unions grounds to sue breached merchants if they didn't purge or encrypt their data. It would have enabled them to sue for costs of reissuing cards, notifying breach-affected members, dealing with fraud on the accounts, and for closing and reopening the account, he said.

Other legislative proposal the association tracked included bills on:

  • Unclaimed insurance benefits and policies, which would provide an affirmative duty for insurers to search databases to find deceased policyholders. CUANM supported the legislation, which passed both chambers of the legislature. Credit unions already have processes to identify deceased members or dormant accounts. Forcing them to perform an extension search of their records, only to pay themselves as a beneficiary, would be "a costly exercise that is likely to outweigh the financial benefits," said CUANM.
  • Creation of a "state financial regulation fund" to administer funds allotted to the state from a court settlement reached by state attorneys general and mortgage lenders. The legislation was signed into law on March 3.
  • Expansion of the New Mexico Finance Authority (NMFA), which would allow NMFA to make participation loans with lenders. The association and its allies worked to amend the proposal to include credit unions, which CUANM said were purposely left off the initial proposal. Although the measure clocked out, the amendment to include credit unions passed unanimously. CUANM said it would work to make sure future bills include the credit union language.
Several other bills tracked by the association clocked out when the legislative session ended.

AVCU Board Recommends Bylaw Changes

 Permanent link
MONTPELIER, Vt. (3/25/13)--The Association of Vermont Credit Unions (AVCU) Board of Directors is recommending several changes to the association's bylaws to facilitate electronic voting and add an associate membership category.

AVCU President Joe Bergeron last week informed member credit unions the board will suggest the changes at the upcoming AVCU annual meeting on May 18 (Newslines Express March 22).

The purpose of the amendments recommended is three-fold:

1. To provide the option of voting and /or meeting by electronic means. Current bylaw language presumes that meetings of members and the board and voting on any matter are in person. Since technology changes are frequent, the proposed language mirrors Vermont's not-for-profit statutory language and allows meetings to be conducted by any means where participants are aware of comments by others, visually or audibly.

2. To create an associate membership category that carries no voting or right to hold office. Although none exist in Vermont today, it is becoming common for credit unions to have a presence in another state in addition to the one where they are domiciled. Such credit unions often request the same advocacy and information sharing as those domiciled in the state.  Also, vendor organizations have increasingly sought to become associate members of AVCU to participate in events and receive AVCU communications. An associate member category would allow them to be connected to AVCU, without the same rights as Vermont member credit unions.

3. To accommodate minor housekeeping changes from a review of the bylaws, and to recognize changes in technology.

Kundert Elected Filene Board Chairman

 Permanent link
MADISON, Wis. (3/25/13)--The Filene Research Institute board of directors elected Paul Kundert, president/CEO of UW CU, Madison, Wis., as its new chairman during its quarterly board meeting.

Kundert replaces Pat Smith, president/CEO of  Unitus Community CU in Portland, Ore., who served as chairman for the last three years and remains on the board as a director. 

Kundert previously served as vice-chair on the Filene board. Prior to joining UW CU, he was president and chief operating officer of Think CU (formerly IBM MidAmerica, and now chartered as Think Mutual Bank of Rochester, Minn.). Kundert has previously served on the board of the Wisconsin Credit Union League, the Wisconsin Credit Union Foundation and the Filene Research Council.

Filene board officers include Patsy Van Ouwerkerk, president/CEO of Travis CU, Vacaville, Calif., as the newly elected vice-chair; Bill Cheney, president/CEO of Credit Union National Association as treasurer; and Brett Thompson, president/CEO of The Wisconsin Credit Union League, Pewaukee, Wis., as secretary. 

Jan Roche, president/CEO of State Employees FCU, Alexandria, Va., was re-elected to a second three-year term as director.  She joins Smith and Jeff Post, president/CEO of CUNA Mutual Group, as at-large board members.

ACCU Featured On Terry Bradshaw Show

 Permanent link
GLENDORA, Calif. (3/25/13)--America's Christian CU in Glendora, Calif., was briefly featured in a recent episode of Today In America with Terry Bradshaw. The five-minute segment talked about ACCU as a business leader in the community during the show's "City Of Glendora" special.

In the episode, ACCU President/CEO Mendell L. Thompson was interviewed about ACCU's business growth and innovation since it moved to Glendora, and the community partnerships and charitable efforts that resulted from working with the city council and leaders.

"Glendora gave us a chance to hire smart, gifted and talented staff," Thompson said in the episode. He added, "Leadership here [from the city] has been very supportive of everything that we are and that we stand for."

The segment also highlighted photos from events such as the $256.5 million asset ACCU's Annual Snow Day and its staff at the Glendora Christmas Parade.

"We were honored to have been selected as a community business leader within the city of Glendora," Thompson said. "This is an outstanding city to live and work in, and we congratulate the city on their selection for this award-winning news program."

To view the segment, use the link.

CU System Briefs (03/22/2013)

 Permanent link
  • BROOKSVILLE, Fla. (3/22/13)--Jennifer Hoefler, 41, of Floral City, Fla., has been charged with organized fraud related to the theft of more than $49,125 from member accounts while she was branch manager at the Brooksville branch of Tampa-based Suncoast Schools FCU. She had been employed by the credit union since 1993. The thefts occurred between Sept. 25, 2012 and Feb. 13 in transactions from $100 to $5,000. The thefts allegedly supported a prescription drug habit, said the Hernando County Sheriff's Office(Tampa Bay Times March 20) …
  • EL PASO, Texas (3/22/13)--El Paso-based evolve FCU has formed a young adult team to increase its visibility in the community (LoneStar Leaguer March 20). The evolve project team for 2013 includes (pictured) Antonio Marquez, a film student at New Mexico State University; Christopher Valverde, a journalism graduate  of the University of Arizona and marketing assistant for Valor Hispano Magazine, and Ashley Ann Hernandez, a senior at Bel Air High School.  They will provide monthly "Man on the Street" videos educating the public about the differences between credit unions and banks, and will assist with evolve FCU's social media efforts. (Photo provided by the Texas Credit Union League) …
  • BURNSVILLE, Minn. (3/22/13)--For the 10th year, US FCU, Burnsville, Minn., has partnered with AccountAbility Minnesota (AAM) to provide free tax filing assistance for low-income qualified residents in the Twin Cities metro area through the Volunteer Income Tax Assistance (VITA) program. In 2012, USFCU employee volunteers processed 146 returns resulting in $209,009 in refunds. So far in 2013, volunteers have helped complete more than 100 returns. Volunteers also understand many of the specialized tax credits such as the Earned Income Tax Credit, Child Tax Credit, and Credit for the Elderly or the Disabled. This helps ensure individuals are taking advantage of all credits available to them, said the credit union …

MSUFCU Awards $25K To Biz Model Contest Winner

 Permanent link
EAST LANSING, Mich. (3/22/13)--Michigan State University FCU (MSUFCU) in East Lansing, Mich., awarded $25,000 to Kymeria Advance Materials, the grand prize winner in its business model contest.

Click to view larger image Michigan State University FCU in East Lansing, Mich., awarded $50,000 in prizes to start-up business ventures--including $25,000 to Kymeria Advanced Materials, the grand prize winner in its business model contest. (Photo provided by Michigan State University FCU)
The 2013 Greenlight Business Model Competition, created by Spartan Innovation and the $2.34 billion asset MSUFCU, allowed entrepreneurs statewide to pitch their business ideas. There was more than $50,000 in available prizes, sponsored by MSUFCU.

MSUFCU sponsored the Greenlight Competition this year and the program "will bring new businesses to Michigan to help improve our economic conditions statewide," said panel judge April Clobes, MSUFCU executive vice president and chief operating officer.

During the first round of the competition, participants were asked to complete an application and business plan. Then 25 finalists pitched their business ideas in front of seven judges. Prizes were awarded based on best pitch, fastest growth potential, best idea for Michigan, most creative, and most needed in the marketplace. Three endowments were designated for undergraduate students.

Kymeria Advanced Materials was created by Cameron Smith, Vincent Alessi, Dave Hatfield and Reed Shick. The start-up is developing new chemistry for ceramics, which brings the benefits of existing advanced ceramics to new parts and markets.

CU Consolidation Continues With M&As

 Permanent link
MADISON, Wis. (3/22/13)--Continuing a trend of consolidation in the credit union industry, several credit union mergers and acquisitions have been announced or completed across the nation in March.

Northwest Community CU in Springfield, Ore., with $766 million in assets, announced the completion of its merger with Coos Educators CU in Coos Bay, Ore., with 14 million in assets.

Coos Educators' lone branch began operating March 16 as Northwest Community CU. For smaller struggling credit unions, a merger can fulfill commitments to loyal members and improve access to financial services, Northwest Community said in release.

"We chose to pursue a potential merger with Northwest community CU as a way to strengthen our organization during a challenging economy, and ensure continued service of excellence for our members," said former Coos Educators FCU Board Chair Chuck Inman. "We chose Northwest Community CU because of its long history of caring about the local communities they serve, and their successful track record as a stable organization."

Other recent mergers and acquisitions include:

  • Houston-based InvesTex CU, with $117 million in assets, plans to purchase a Houston branch of Star Trust FCU's (formerly Enron FCU, which once serviced the now-defunct Enron Corp.) StarTrust has $51.6 million in assets. The acquisition is subject to regulatory and member approval.
  • The $1.89 billion asset Summit CU, based in Madison, Wis., said it is acquiring Milwaukee-based Veteran's Administration CU (VACU), with $14.8 million in assets (Milwaukee Business Journal Online March 19).  The acquisition is slated for completion in September and is contingent on approval of regulators and VACU membership.
  • Kinecta FCU in Manhattan Beach, Calif., with $3.17 billion in assets, Wednesday absorbed Inglewood, Calif.-based I.C.E. FCU, which was liquidated March 15 by the National Credit Union Administration. NCUA determined I.C.E. was insolvent and had no prospects of restoring viable operations (CUinsight.com March 20).
  • Plymouth, Minn.-based TruStone Financial FCU (formerly Teacher FCU), with $861 million in assets, announced an agreement March 1 to merge with  Ladish Community CU (formerly Ladish  Employees CU)  in Cudahy, Wis., with $13.4 million in assets. Starting April 1, the combined entity will operate as TruStone Financial FCU (Marketline March 4 and PlymouthPatch March 6).
  • A merger of $32.7 million asset U.S. Coast Guard Community CU in Baltimore into Tower FCU, based in Laurel, Md., with $2.52 billion in assets, was approved by Coast Guard Community members at the end of last month (Washington Business Journal Online March 5). The proposed merger is scheduled to be finalized by June 30, pending regulatory approval (SNL.com March 2). 

Ohio CUs On Sales Tax Watch

 Permanent link
COLUMBUS, Ohio (3/22/13)--The Ohio Credit Union League is among the groups voicing concerns over impacts from the proposed state sales tax provision in the state's budget proposal. The provision is seeing activity in the state legislature.

The league "continues to aggressively monitor legislative activity" on the provision included in the governor's proposed budget, it said (eLumination Newsletter March 20).

"Led by the State Budget Impact Work Group, the league is better grasping the true impact of an expanded sales tax base, which would include taxes on services utilized and offered by credit unions," the league said.

Last week the league sent two letters to key legislators, sharing credit unions' concerns and highlighting how the proposed changes could hamper credit unions' ability to serve their members and impact the state-charter system.

The league is one of many trade groups voicing opposition, it said.  Roughly 75 interested parties testified in budget related committees last week, with the majority strongly opposing the sales tax proposal, the league said. During the first week of March more than 50 witnesses testified on the proposal.

Gov. John Kasich's biennium budget would expand the products and services subject to sales tax and lower the overall rate to 5% from 5.5%. The State Budget Impact Work Group consists of 16 Ohio credit union leaders and league staff who are researching the bottom-line impact on credit unions.

NY Advances Bill To Protect CUs From Nuisance ATM Lawsuits

 Permanent link
ALBANY, N.Y. (3/22/13)--A Credit Union Association of New York-backed bill that would protect New York's credit unions from nuisance ATM disclosure lawsuits has been introduced in the State Assembly.

CUANY announced Thursday that "important legislation that CUANY has been fighting for has been introduced in the New York State Assembly by the chair of the Banks Committee, Assemblywoman Annette Robinson."

The bill (A.6234) addresses an issue that has created legal and financial issues for many credit unions--ATM fee disclosure regulations-- by eliminating the requirement for physical fee disclosures to be placed on ATMs.

Current state law requires ATM operators to display notices in two locations, both physically on the ATM and on the electronic notification on the screen, informing consumers they might be charged fees for withdrawing cash from the ATM.

In some cases, vandals have removed the physical disclosure and then sued the financial institutions for noncompliance. To protect themselves from lawsuits, credit unions have had to spend time and money documenting their compliance and fighting frivolous lawsuits, said CUANY.

Assemblywoman Robinson's bill would eliminate the requirement of physical fee disclosures on ATMs, which would bring New York State law into conformity with federal law signed by President Obama last December.

The Credit Union National Association strongly backed the federal law, with CUNA President/CEO Bill Cheney noting that the law represented a "substantial realization of regulatory relief that will have an impact on every credit union that owns an ATM" while having no adverse effect on consumers (News Now Dec. 12)

CUANY President/CEO William J. Mellin noted that CUANY has been advocating aggressively for state passage of this legislation.

"Our state's law on this issue needs to be modernized, and the introduction of this bill is a significant step in the right direction. We commend Assemblywoman Robinson for her leadership, and we will continue to advocate for advancement of the bill in both the Assembly and the Senate," Mellin said.

Last month a similar bill to eliminate the requirement for a physical disclosure on ATMs about fees passed the Nebraska State Legislature, 47-0.  That will was supported by credit unions and the Nebraska Credit Union League (News Now Feb. 12).

Nebraska, New York, Illinois, Nevada, Vermont and Wyoming are the only states that require dual disclosures.

CU's Get Naked Campaign Touts Free Checking

 Permanent link
WICHITA, Kan. (3/22/13)--Wichita, Kan.-based Central Star CU's has bared the essentials of its latest ad campaign for its free checking service, Naked Checking. It urges members to Get Naked Checking, and its tagline is: "It's free, so there's nothing to hide."

Click to view larger image Click for larger view
The campaign notes the $75 million asset credit union's free checking has no service charge, no hidden fees, free debit card with cash-back incentives and no annual fee, free e-statements, unlimited check writing, and free online banking and bill pay.

The campaign features a hairless cats and dogs in YouTube videos, print ads and billboard ads. 

To watch the "Feel Good Naked--Get Naked Checking" and "Nothing Wrong With Naked--Get Naked Checking" videos, use the YouTube links.

In the first, a man walking his "naked" dog gets a series of  jaw-dropping and second-takes from bystanders as they pass by. A second video features the man in a bathrobe searching empty drawers, shelves and closets for clothes while the dog looks on. Finally the man goes outside and finds a trail of clothes to the dog house.

The campaign also asks members to "Get Naked & Give Back," by raising funds for the Kansas Humane Society. Members can donate items on the society's wish list. For every item donated, Central Star will give $1 to the Humane Society, up to $2,000.

16 CUs On 'Cool Vehicles' List

 Permanent link
MADISON, Wis. (3/22/13)--What do a Zamboni, a Volkswagen bug, a VW bus, a Honda Cube, a Smart Car, a Hummer, and a day-glow minivan have in common? They all have been dubbed "cool" as promotional vehicles for credit unions and banks.

Click to view larger image CommunityAmerica CU based in Kansas City, Mo., has two vehicles featured on the "25 Coolest Vehicles" list, including the "Getaway Car."  (Photo provided by CommunityAmerica CU).
The website of The Financial Brand, which offers marketing insight to credit unions and banks, noted while most financial institutions have a vehicle fleet with a sticker or two, some institutions took their vehicles to a new level. It listed, with photos,  25 of the "coolest vehicle designs" from financial institutions. Vehicles from 16 credit unions are on the list, including the Zamboni from Fort Wayne, Ind.-based MidWest America FCU.

Other vehicles from credit unions highlighted were:

  • Lathrup Village, Mich.-based Michigan First CU's "Young & Free" Ride;
  • Kansas City-based CommunityAmerica's "Getaway Car," which urges consumers to "unbank yourself" and "liberate your money,"  and its "Escape Mobile," which says "remove the bank cuffs" and "go bankless."
  • Bridgeton, Mo.-based Vantage CU's  turquoise wrapped Honda Cube touting Young & Free;
  • Ridgecrest, Calif.'s AltaOne CU  banana colored  "Good Deeds Mystery Wagon";
  • Idaho Central CU's green-flamed van in Pocatello, Idaho;
  • Knoxville, Tenn.-based UT FCU's "Orange & White: Volkswagen bug;
  • Cheyenne, Wyo.'s Warren FCU  "It's Not a Bank" auto;
  • Brockton, Mass.-based HarborOne CU's  Smart Car;
  • Bristol, Pa.-based Bucks First CU's "Project Flipside vehicle;
  • Edwardsville, Ill.-based Scott CU's "Big Barkers Kidz Club" Hummers;
  • Global CU's vehicle in Spokane,Wash.;
  • Five Star CU's "Patriotic SUV" in Dothan, Ala.;
  • Illawarra CU (in Australia)'s "Red Camouflage";
  • Jax FCU's "Blue Scion" in Jacksonville, Fla.; and
  • Seasons FCU's "Do You Kasasa" vehicle in Middletown, Conn.
To view all the the colorful vehicles, use the link.  The Financial Brand offers marketing insights for credit unions and banks.

ATM Group Publishes Best Practices To Prevent Mobile Fraud

 Permanent link
SIOUX FALLS, S.D. (3/22/13)--The ATM Industry Association has published a new best practices manual for preventing mobile banking fraud, with special reference to applications linked to ATMs.

Due to the increasing popularity of mobile phones--in particular smartphones and tablet computers that offer Internet access--mobile banking and related mobile commerce has become an important channel for the financial services industry, including the ATM industry, ATMIA said.

Mobile device interactions with an ATM can include:

  • Cashing out transactions initiated on a mobile device;
  • Alerting consumers to transactions performed at an ATM;
  • Receiving an electronic receipt for a transaction performed at an ATM; and
  • Providing a one-time password to authorize an ATM transaction by replacing the traditional card and personal identification number used to perform an ATM transaction.
"In a time when the ATM can be used to complete transactions begun on a mobile phone, and as cardless ATM transactions gradually replace ones initiated by plastic cards, it is important to check out any security vulnerabilities associated with mobile phone banking applications," explained Mike Lee, ATMIA CEO.

The manual also is designed increase understanding of the relationship between the mobile and ATM channels.

"Downloadable apps for smartphones and some tablet computers are creating new, more sophisticated interactions between the mobile device and the consumer's bank accounts, so we fully expect mobile banking to grow significantly," Lee said.

CU Marks 10 Years Of 100% Employee Community Support

 Permanent link
CAPITOLA, Calif. (3/21/13)--In 1992, Capitola, Calif.-based Fay FCU set an ambitious goal for its annual community support initiatives: 100% employee participation. Employees accepted the challenge and during the next 12 months far exceeded their individual goals in volunteering. Ten years later, they are still going strong.

Participating at a recent fundraiser are from left, Bay FCU employees Laura Owen, Angelynn Dang, Chris Lewis, Cameron Haste, Alicia Flores and Michelle Haddix. (Photo provided by Bay FCU)
For 10 consecutive years, 100% of the $678 million asset credit union's employees have participated in volunteering and fundraising opportunities for local schools and nonprofit organizations.

"On the surface, it is remarkable that we've been able to do this," said President/CEO Carrie Birkhofer.  "However, upon quick reflection, it is not really surprising at all. Bay Federal employees believe in our community. They understand that they can make a real difference in our community by just showing up and getting involved. Volunteerism is a core value that employees readily embrace."

Volunteer projects are all employee-driven and coordinated by an all-employee steering committee. "Employees choose the organizations and events they want to support, organize volunteer teams, and bring their families and friends to help out," said Birkhofer.

They earn a credit for volunteering and receive recognition pins signifying the number of credits earned in the previous year. "It's not uncommon for employees to earn five to 10 credits or more in a year," said Birkhofer. "It's become a competition for some, but most people just enjoy knowing that their hard work is appreciated. And for most people, the reward of giving is often equal to the value provided."

"Bay Federal members have come to understand that service doesn't stop at our front doors," she added.

In 2010, Bay Federal became the first recipient of the Governor and First Lady's Medal of Service Award as California's Small Business Volunteer Program of the Year. It has received "Organization of the Year" awards from five chambers of commerce and the United Way of Santa Cruz County. It also repeatedly is voted "Best Financial Institution" in annual reader polls for the Good Times, Press Banner and Santa Cruz Weekly regional newspapers.

CU System Briefs (03/21/2013)

 Permanent link
  • TOPEKA, Kan. (3/21/13)--Deborah Bomia, a former employee of Enterprise (Kan.) CU, has been sentenced by a U.S. District Court in Topeka to two years of probation for embezzling $85,000 from the credit union between April 2005 and August 2011. Bomia also was ordered to pay that amount in restitution to the credit union. She pleaded guilty to kiting checks between accounts in her name at the credit union to create fictitious balances (Associated Press Newswires March 20) …
  • SAN FRANCISCO (3/21/13)--San Francisco-based J.R. Bruno & Associates, a consulting firm to Small Business Administration and member business lenders, has opened an office in Colorado. JRB Associate Vern Hansen will head the Colorado operations, serving credit unions in that state as well as Arizona, Wyoming, Utah and Nevada.  Hansen has 39 years of financial services and commercial lending experience. He has served in executive positions including president and executive vice president-chief lending officer at financial institutions of all sizes …
  • HARRISBURG, Pa. (3/21/13)--Bill Dooner, former field representative and consultant for the Pennsylvania Credit Union Association, died Monday. He was 83.  Born in Ireland, he came to America in 1948 and joined his first credit union--K. of C. Upper Darby FCU--in 1955 in Philadelphia, said PCUA  (Life is a Highway March 20).  He joined PCUA as a field representative in 1966 and served credit unions in southeastern Pennsylvania for 28 years, until retiring as a consultant in 1994.  He is credited with organizing 45 credit unions. He is survived by seven children and two great-grandchildren …

Free Checking? It's CUs Hands Down--More Media Coverage

 Permanent link
MADISON, Wis. (3/21/13)--More media outlets are reporting on the Bankrate.com survey released earlier this week. The survey indicated credit unions are consumers' best chance--hands down--of finding a free checking account.

News Now reported on the survey Tuesday in an article, "CNNMoney: CU Is 'Best Bet' For Free Checking."

"You want free checking account with no strings attached? You're not likely to find it at a bank," said ConsumerAffairs in a Tuesday article. "According to Bankrate.com's  2013 Credit Union  Checking Survey, 72% of America's 50 largest credit unions offer them, compared with 39% of banks."

Commenting on the same survey, The New York Daily News Monday focused on the statistic that free checking at banks is a "dwindling perk"--down to 39% now from 65% in 2010.  Meanwhile, 96% of credit unions surveyed by Bankrate offer free checking accounts or accounts that can become free if members agree to use services such as direct deposit or e-statements offered at the credit union.

"Not much is free these days--but there's a good chance you will find free checking if you go to a credit union," the Daily News said.  The newspaper added: "How can credit unions afford to hand you this perk, even as banks' fees are on the rise? Banks are looking to make up for billions of dollars in annual lost revenue as a result of regulations imposed in recent years. Because credit unions are not-for-profit institutions, they are not driven by improving their own profits and therefore can often offer their [members] better terms."

In Tuesday articles about the Bankrate survey, the Deseret News and WWLP.com also noted that more credit unions than banks offer free checking.

To read the articles, use the links.

Biz Kid$ Piggy Hunt Teaches Financial Literacy

 Permanent link
Josh Allison, relationship development manager at Horizon CU, Spokane, Wash., developed the Biz Kid$ Piggy Hunt, which incorporates materials from the Biz Kids$ financial literacy initiative to engage children and adults. Here, a group of teachers work on the hunt.
MADISON, Wis. (3/21/13)--Biz Kid$, a financial literacy initiative that teaches kids about money and business, is now part of a treasure hunt for financial literacy. The Biz Kid$ Piggy Hunt is a collaboration of Biz Kid$ and Horizon CU of Spokane, Wash.

Sarah Rusnak, a single mother who won the $500 prize in a Piggy Hunt sponsored by Horizon CU, Spokane, Wash., displays her winning check after finding a pig hidden in a coffee shop. (Photos provided National Credit Union Foundation.) In the case of Horizon CU, the treasure is a $500 prize, with $250 going to the winner and $250 donated to the charity of the student's choice. Allison and Horizon CU have launched the program at several area middle schools, and the initiative has been expanded to include teachers and parents.

The creators of Biz Kid$ thought so much of Allison's idea that they branded it made it available credit unions to use nationwide, said NCUF.

The game has attracted media attention. The Bonner County Daily Bee and the Columbia Basin Herald also feature articles on the Biz Kid$ Piggy Hunt. The Anthem, the newsletter of the Northwest Credit Union Association, also featured the hunt.

Biz Kid$ includes an award-wining TV series, free classroom curriculum, outreach activities, a website and a monthly online newsletter targeting children 9-16 years old.

A coalition of credit unions and credit union organizations underwrites the program, raising $13.2 million during the past six years to support its production, website and curriculum. The NCUF oversees fundraising, outreach and administration.

Court Tentatively Dismisses Some NCUA Claims Vs Goldman Sachs

 Permanent link
LOS ANGELES, Calif.  (3/21/13)--A federal judge in Los Angeles has tentatively dismissed several claims in the lawsuit filed by the National Credit Union Administration (NCUA) against Wall Street bank Goldman Sachs about residential mortgage-backed securities (RMBS) sold to several corporate credit unions before the financial crisis.

U.S. District Judge George Wu, in the tentative ruling that became available Tuesday, dismissed with prejudice  NCUA's claims about seven of the eight securities certificates at issue in the suit, saying NCUA's complaint was untimely unless it could prove the tranches were certified in covering the purchase.

Goldman Sachs had argued NCUA's claims were either barred by the applicable statute of repose--meaning the lawsuit was filed too late--or did not plead sufficient information to tell if the statute rule of tolling (extending the statute of limitations) would apply.

NCUA's complaint argued that the originators of the loans backing the RMBS vehicles engaged in a "systematic disregard or abandonment of underwriting standards and guidelines," and the court concluded that these allegations against three of the originators are sufficient.

"Although Goldman would like the court to view many of these allegations not as systematic disregard of underwriting guidelines, but instead as blind adherence to underwriting guidelines involving loan products that, by their very nature, were risky products, that is not a conclusion that the court is prepared to reach on the basis of the NCUA's pleadings,"  Wu wrote.

In the eighth certificate sold and at issue in the case, Wu said the court believes, based on arguments presented so far, that "NCUA had at least a "bona fide dispute" with respect to the standing of the representative plaintiffs in earlier cases covering the certificate. He also reiterated earlier rulings in which he said he expected "something more" than post-origination performance statistics to demonstrate systemic abandonment of underwriting guidelines.

Wu denied Goldman Sachs' motion to strike "immaterial information" from NCUA's complaint, which Goldman said relied on allegations other parties made in other court actions. His ruling cited a case that indicated "where material 'relates directly to the plaintiff's underlying claim for relief' it cannot be considered 'immaterial."

The tentative ruling comes nearly a year after Wu gave the go-ahead for the case to proceed, saying NCUA had met the requirements on an extended "tolling" statute of limitations agreement before it filed its lawsuit over the RMBS sold to U.S. Central Corporate FCU and Western Corporate FCU.

It also comes a week after the U.S. Supreme Court refused to hear Goldman Sachs' appeal of a lower court decision in a similar RMBS case, a class action lawsuit by pension funds.

NCUA, as conservator of five corporate credit unions that collapsed in 2009 from RMBS investments, has also sued RBS Secrutieis, Wachovia Capital Markets LLOC and Wachovia Mortgage Loan , JP Morgan Chase, UBS Securities, Barclay's Capital and Credit Suisse Securities and more.   The agency uses similar arguments in several of the cases.

CUNA Mutual 2012 Net Income Increases For Fourth Year

 Permanent link
MADISON, Wis. (3/21/13)--Despite a slugging economy and weather-related losses, CUNA Mutual Group posted its fourth consecutive year of earnings growth during 2012.

CUNA Mutual  attributed the growth to strong operating results in three core credit union businesses. Consolidated generally accepted accounting principles(GAAP) operating revenue, net income and capital levels all increased over 2011. 

CUNA Mutual recorded $150 million of net income (GAAP), compared with $83 million in 2011.  Strong operating results, particularly in lending, direct-to-consumer and asset accumulation products, helped offset drought-related losses in the company's crop insurance business and weather-related losses in its auto and home businesses.  Solid investment performance also contributed heavily to higher net income in 2012, said the company. 

GAAP operating revenue grew by 3%. An improved lending environment, the company's focus on investing in and growing its consumer product lines, and strong immediate annuity sales were key factors driving the year's revenue growth, CUNA Mutual said.   

"Strong operating results in our core credit union businesses, prudent expense management and a $40 million reinvestment in a number of those businesses all contributed to very favorable results," said Alastair Shore, executive vice president and chief financial officer.

CUNA Mutual Group's total cash and investments grew to $11.1 billion in 2012, an increase of $1.2 billion over 2011.  The company's investment portfolio is well-diversified with an average credit quality of "A." 

The company continued to build its financial strength.  Statutory total adjusted capital of CMFG Life Insurance Co., CUNA Mutual's lead life insurance company, grew to $1.6 billion in 2012, up $133 million from 2011.  The company's consolidated GAAP surplus ended the year at $2.5 billion, a 17% increase.  A.M. Best recently affirmed its key insurance companies' ratings at "A" (Excellent), the third highest of 16 financial strength categories, with a stable outlook.

The company also continued its strong advocacy for credit unions in 2012, contributing $39 million to support credit union leagues and industry efforts, compared with $35 million in 2011.  It also reinvested more than $40 million in a number of businesses, including consumer, asset management, crop insurance and technology. Benefits paid to credit unions in 2012 totaled $964 million, up slightly from 2011.

League Poll: Texans Won't Tap Savings For Big Purchases

 Permanent link
FARMERS BRANCH, Texas (3/21/13)--Demand for affordable loans likely will rise because most Texans won't be tapping their savings accounts to facilitate big purchases, according to a poll conducted by the Texas Credit Union League.

The poll indicated 13.5% of Texans surveyed intend to buy a car this year, and 12.2% plan to purchase a house. Roughly 65.8% of Texans don't plan to purchase a car this year, and another 20% are undecided. Also, 87.8% said they won't buy a home (LoneStar Leaguer March 20).

Many consumers make the mistake of focusing exclusively on the interest rate of a loan, according to Courtney Moran, executive director of the Texas Credit Union Foundation.

"People need to consider the overall costs of the loan," she said. "Many times there is great variance in the cost of ancillary products like gap insurance and extended warranties. And sometimes dealers will aggressively sell things that people don't necessarily need or want."

Homebuyers need to ask questions regarding closing costs, discount points, and what prepaid items are required--such as prepaid insurance, Moran added.

"Often individuals focus on the monthly payment," she said. "Even though a monthly payment may be affordable, it's important to consider overall costs. Fixating on monthly payments is another common mistake, which results in paying much more over the life of the loan."

By paying their bills on time and checking their credit report often, people can protect their credit rating, Moran told the league. Zero-percent financing isn't always the best deal, she warned.

"If you can choose a rebate instead of the 0% financing, you may do better to forego the 0% financing and choose a low-interest loan elsewhere," added Moran. "It's simple arithmetic and will only take a few minutes to calculate which option is really the best deal."

Texas League, Real Solutions Join On Elder Fin Abuse Project

 Permanent link
FARMERS BRANCH, Texas, and MADISON, Wis. (3/21/13)--The Texas Credit Union League and its REAL Solutions program have partnered to develop an initiative to promote awareness about elder financial abuse and exploitation in the financial services industry.

"Credit unions can play a critical role in helping to reduce elder financial abuse and exploitation," said Mike Delker, TCUL senior vice president of Credit Union Relations. "Frontline staff members are the first defense in identifying suspicious activity" (LoneStar Leaguer March 20).

Red flags regarding abuse may include unusual, suspicious or stepped-up activity by accountholders on their own or in conjunction with another person who could be coercing the accountholder to make transactions they normally would not make. Credit unions should watch for:

  • Transactions made outside a credit union, such as several ATM transactions the accountholder normally would visit inside the branch to make;
  • Unusual or accelerated debit card activity for an accountholder;
  • Closure of certificates of deposit without regard to penalties;
  • Frequent or large wire transfers, which might start small but grow in amounts as the scammer or abuser gains confidence;
  • Online banking activities: new online accounts with accelerated activity;
  • Lines of credit with accelerated activity or with the credit always maxed out;
  • Home-equity lines of credit with previous little activity and that are always maxed out;
  • New loan applications for purchases unusual for elders;
  • Stepped-up non-sufficient funds activity;
  • Several checks written on an account that usually has a few written, or many out-of-sequence check numbers;
  • Unusual changes in account beneficiaries;
  • New or unusual transactions via powers of attorneys;
  • Change of address for monthly statements but for the home address;
  • Change in marital status by widows/widowers, in combination with other red flags;
  • Unusual or suspicious automated clearing house transactions;
  • New co-signer on an account, in conjunction with other red flags; and
  • Banking by mobile phone, in conjunction with other red flags.

NPR, Kiplinger Note CUs' Value

 Permanent link
MADISON, Wis. (3/21/13)--Credit unions' value was noted in brief pieces this week by National Public Radio, Kiplinger and Lifehacker.

In a National Public Radio, a two-minute Marketplace "Money Matters" segment Wednesday, Paddy Hirsch, Marketplace senior producer, personal finance, answered questions about why people would chose a credit union over a bank.

"You might choose a credit union because you like free checking, because 72% of credit unions offer it, whereas banks tend not to these days," Hirsch said. Credit unions also offer better rates on loans and better interest rates  on savings accounts, he added.

People are moving toward credit unions since the financial crisis, and credit unions "have stepped up their game online," with 85% of credit union online users saying they like their services, compared with 66% for bank online users, Hirsch said.    

In a question-and-answer column asking whether credit unions have deposit insurance, Kiplinger.com responded Tuesday in a segment: "Deposits in most credit unions are covered by the National Credit Union Share Insurance Fund (NCUSIF), rather than by the Federal Deposit Insurance Corporation. The coverage is similar, and the limits are the same as for the FDIC: The fund covers up to $250,000 for all of your individual accounts combined at each credit union, up to $250,000 for each person's share of their joint accounts at each credit union, and up to $250,000 for all of their retirement accounts, such as IRAs, per credit union."

For people looking for auto loans, lifehacker.com, in a brief article Wednesday, advised consumers to check out credit unions.

"You may already know to check with your credit union for financing on that new car, since their interest rates are likely lower than anything a bank or (heaven forbid) an auto dealer will offer you," lifehacker said. "However, credit unions also offer car buying and discount programs through selected auto dealerships that can cut hundreds--sometimes thousands--off of the sticker price of the car you want."

To hear or view the segments and articles, use the links.

Craig Inducted Into Utah CU Association Hall Of Fame

 Permanent link
RIVERDALE, Utah (3/20/13)--The Utah Credit Union Association will induct the former president of America First CU, Rick Craig, into the organization's Hall of Fame.

Craig recently retired from America First CU, Riverdale, Utah, after serving 16 years as president (The Pak Banker March 19).

He previously spent 20 years as the credit union's executive vice president and two years on the board of directors.

Under his leadership, America First CU in 2007 was recognized as one of the best places to work in Utah.

Craig served on the CUNA Governmental Affairs Committee and was on the faculty of Western CUNA Management School for 31 years.

Craig also served on the America Institute of Certified Public Accountants (AICPA) Audit and Accounting Guide Task Force, and on the AICPA Governmental Affairs Field of Membership Committee.

CU System Briefs (03/20/2013)

 Permanent link
  • SAN ANTONIO (3/20/13)--Security Service FCU in San Antonio has hit the $7 billion mark in total assets. The credit union's success is due to its conservative business principles, sound lending and controlled growth during the past several years, said SSFCU officials. Also, its quality service to members, along with competitive products and services, and its convenient service delivery channels were factors, they added. "Security Service is fortunate to be in such a positive position," said Jim Laffoon, SSFCU president. "The trust and loyalty we have received from our members over the years and the service our employees provide them have played key roles in our credit union's success" (LoneStar Leaguer March18) …
  • WESTBURY, N.Y. (3/20/13)--NEFCU, based in Westbury, N.Y., and serving Long Island, has passed the $1 million mark in scholarships and grants it donates to high school students, student teachers, graduate students and educators. "Our scholarship and grant programs provide an opportunity to reward students who will be our future leaders and acknowledge those educators who provide the inspiration, support and resources to help them succeed," said Valerie Garguilo, vice president of marketing and community relations for NEFCU. The $2 billion asset credit union offers four scholarships and grant opportunities a year: Funding Your Ideas (FYI) Teacher Grants of up to $250; Making a Difference Family Scholarship of $1, 000; Making a Difference Premier Scholarship, $20,000 over four years; and the NEFCU Making a Difference College Scholarship for Student Teachers and Graduate Students of $1,500 …
  • HUNT VALLEY, Md. (3/20/13)--Atlantic Financial FCU's Board of Directors has appointed Matthew P.  Piazza, as the new president/CEO, effective March 7. A certified public accountant, Piazza previously headed the finance department as vice president of finance at the Hunt Valley, Md.-based, $98 million asset AFFCU. He prepared monthly, quarterly and annual financial reports, managed the credit union's investment portfolio, and updated policies and procedures. He also oversaw AFFCU in two credit union mergers by spearheading the accounting processes, and he served on AFFCU's Asset Liability Management Committee. Before joining AFFCU Piazza was an assurance manager at CliftonLarsonAllen LLP (formerly Clifton Gunderston LLP), where he audited credit unions across the country with assets as large as $21 billion. He succeeds long-time President/CEO Richard T. Webb, who announced his plans to retire by this month …

PCUF Marks 17th Year With 500th Grant

 Permanent link
HARRISBURG, Pa. (3/20/13)--The Pennsylvania Credit Union Foundation marked its 17th anniversary Tuesday by providing its 500th grant.

The grant was given to a staff member at City Co FCU in Pittsburgh to allow her to attend the Judge Bradley Leadership School (Life is a Highway March 19).

"What is remarkable is that today, the foundation continues its astounding success because of its consistency in a philosophy that all of its programs will result in continued, increased credit union membership, as well as a more financially savvy consumer," said Ray Brunner, PCUF chairman.

The first PCUF grant was awarded Dec. 27, 1996, to PHILCup, a nonprofit organization, to assist three low-income credit unions in Philadelphia.

The foundation since has raised more $3 million and awarded more than $2.2 million in grants.

Court Dismisses Space Coast Suit On CDOs, Allows Amended Complaint

 Permanent link
FORT LAUDERDALE, Fla. (3/20/13)--A federal court Monday dismissed without prejudice Space Coast FCU's more than $100 million lawsuit against Wall Street banks and ratings agencies over collateralized debt obligations (CDOs) sold to Eastern Financial Florida CU. However, it will allow Space Coast to amend its complaint to remedy shortcomings in its case.

Space Coast, based in Melbourne, Fla., acquired Miramar, Fla.-based Eastern Financial Florida CU in June 2009 in an emergency merger approved by state regulators. As successor in interest, Space Coast filed the lawsuit in the U.S. District Court for the Southern District of Florida, in Fort Lauderdale. The case involves 12 CDOs sold to Eastern Financial between 2005 and 2007.

"Space Coast's complaint must be dismissed because it does not plead defendants' alleged fraud with particularity, nor does it state a plausible claim for relief," wrote U.S. District Judge James I Cohn in Monday's ruling.

He declined to address other issues raised in the complaint because "Space Coast has not identified any fraudulent statements or omissions that defendants made regarding the specific CDOs purchased by Eastern, the court cannot evaluate defendants' other arguments that depend on those statements or omissions," according to the court document.

Space Coast's complaint alleged that the banks and ratings agencies engaged in six types of systemic fraud by "using knowingly inflated, inaccurate and unreliable credit ratings to sell the rated CDOs" and omitting that:

  • The ratings were the results of secret, out-of-model investments;
  • The ratings for CDOs were graded on a curve;
  • Certain ratings assigned were unreliable guesses instead of educated opinions;
  • CDOs were mispriced in the first quarter of 2007 to dump over-valued mortgage related bonds from their balance sheets onto investors;
  • Secret short sellers had warped CDO assets and priced them so they would fail; and
  • The correlation input used to create the CDOs and rate the notes were inaccurate.
The judge's ruling said the complaint "failed to plead in detail how each defendant defrauded Eastern." But, the judge wrote, "Space Coast may be able to cure these problems by alleging in detail, and with a plausible factual basis, the fraud that each defendant committed in connection with the CDOs owned by Eastern."

Defendants in the suit are: Merrill Lynch and its credit corporation, Merrill Lynch Home Loans; Wells Fargo Securities (former Wachovia Capital Markets); J.P. Morgan Securities (formerly Bear Stearns & Co.); UBS Securities; Barclay's Capital Inc.; Richard S. Fuld Jr., who ran Lehman Brothers at the time; Moody's Investors Service Inc.; and The McGraw-Hill Cos. Inc. (Standard & Poor's Ratings Services).

CO-OP On EMV News: Stay Cautious on Deployment Until 2014

 Permanent link
RANCHO CUCAMONGA, Calif. (3/19/13)--CO-OP Financial Services supports and voted in favor of the Secure Remote Payment Council (SRPc) Chip and PIN Workgroup's agreement on a common U.S. debit application identifier (AID) and application for Europay, MasterCard and Visa (EMV) deployment. But CO-OP urged credit unions to be cautious on deploying EMV until 2014.

SRPc announced Tuesday that 10 of its debit network members agreed to adopt a common U.S. debit AID and work with Discover Financial Services to license the D-Payment Application Specification, known as D-PAS, as the foundation for the common U.S. debit chip payment solution.(Use the link to access the press release)

Adoption of the AID and application "is extremely important to credit unions because it preserves their routing and network choices in connection with the emerging EMV standard," said Stan Hollen, president/CEO, CO-OP Financial Services.

"As a founding member of the Workgroup, CO-OP has actively participated in the SRPc to represent the interests of credit unions, and we will continue to help drive next steps, both in governance and deployment of the common U.S. debit AID and application," he said.

"While this solution simplifies efforts for the industry, commercialization will take time," Hollen continued. "Given that EMV is being driven by liability shifts, not regulatory or network mandates, we recommend that issuers wait until 2014 before moving forward with their business case for EMV deployment in order to ensure that the market is ready."

He noted that in the coming months CO-OP will provide guidance to its client credit unions "in the form of multiple tools to help them determine their own roadmap for EMV. This will include tactical advice on upgrading ATMs, issuing debit cards with the common AID, what to do about credit, how to calculate the economics of switching to EMV and related fraud trends."

SRPc's announcement said the Workgroup "will also evaluate enhancing the specification's security by including the one-time card number technology developed by First Data/STAR specifically to mitigate impact from skimming and data breach frauds."

CO-OP Financial Services will host a free webinar on March 26, at 11 a.m. PT to discuss the latest developments concerning the EMV standard. For more information, use the link.

The SRPc is a trade association focused on security standards for Internet- and mobile-based payment methods, including EMV. For more information on EMV, visit the "Ask the EMV Expert" page on CO-OP's website by clicking on the link below.

Mich CUs Testify For Homestead Exemption In Foreclosures

 Permanent link
LANSING, Mich. (3/20/13)--The Michigan Credit Union League last week testified before the state House Committee on Tax Policy in support of legislation that would allow financial institutions to realize the full benefit of the principal residence exemption, or "homestead exemption," on foreclosed properties.

"This legislation would provide actual relief to credit unions that are forced to foreclose, despite their best efforts to keep the borrower in their home," MCUL CEO David Adams said.

MCUL officials were joined in their testimony by representatives from Michigan State University FCU, East Lansing, Mich. and E&A CU, Port Huron. (Michigan Monitor March 18). The legislation was also supported by the Michigan Association of Realtors and the Michigan Bankers Association, but was opposed by the state Department of Treasury.

Law enacted in 2012 allows financial institutions to file paperwork to technically retain the exemption so future buyers don't have disruptions or additional cost. However, the financial institution is still required to pay additional non-homestead amounts through a different statutory route.

The proposed legislation, sponsored by state Rep. Frank Foster (R-Petoskey), would eliminate the non-homestead requirement.

"The additional mills from the non-homestead rate represent conditional revenue, based on our members' decision whether or not to foreclose, and eliminating this requirement doesn't reduce the amount that would normally be due to the state under the homestead rate," Adams said.

The bill also would reduce the costs associated with unfortunate circumstances for borrowers and lenders, and would benefit communities by providing more flexibility to repopulate homes, Adams said.

Bankrate: Five Doors To CU Membership

 Permanent link
MADISON, Wis. (3/20/13)--While credit unions have membership requirements, most consumers qualify for membership at a credit union. A Bankrate.com article outlined the different "flavors" of credit unions that serve consumers' interests.

The article cited Credit Union National statistics that track about 7,200 credit unions in the U.S.

"There's a credit union for everyone," Bill Cheney, CUNA president/CEO told Brankrate.com. "You just have to find it."

The article points readers to aSmarterChoice.org to find a credit union that serves their needs.

Bankrate.com cited five types of credit unions that consumers are eligible to join. They include:

  • University credit unions, which are usually open to alumni, faculty, students and nearby residents, the article said. At the University of Southern California CU in Los Angeles, students, alumni and staff can use the credit union's three on-campus branches. Los Angeles residents are also eligible for membership.
  • Community development financial institutions, which serve consumers of low- to moderate-income. The CDFI designation allows them to apply for government grants to open multiple branches in hard-hit communities, Pamela Owens, vice president of programs for the National Federation of Community Development Credit Unions, told Bankrate.com. For example, members of Alternatives FCU in Ithaca, N.Y., can get free tax preparation and a seven-week financial education course.
  • Credit unions with ties to special causes. For example some credit unions are building their memberships around green initiatives and sustainability, the article said. Since being founded in 2000, Permaculture CU in Santa Fe, N.M., has funded $15.2 million in loans to support sustainable living projects such as energy-saving cars, microloans to farmers and educating the public on permaculture, a design principle that promotes self-sustaining ecosystems.
  • Church-based credit unions, which have a long history within the credit union system. The Alliance Catholic CU in Ann Arbor, Mich., for example, serves several Catholic parishes and offers 48-month auto loans at less than 2%, and debit and credit cards. Many church-based credit unions have extended eligibility to their surrounding communities, the article said.
  • Military credit unions, which serve the needs of service members, their families and veterans. One such credit union, Service CU in Portsmouth, N.H., offers free checking accounts with no minimum deposit, online banking, free bill pay and rewards debit cards to its members.

St Paul Croatian FCU Fraud Ring Member Sentenced

 Permanent link
CLEVELAND (3/20/13)--A man who pleaded guilty to working with a loan fraud ring that brought about the collapse in 2010 of Eastlake, Ohio-based St. Paul Croatian FCU has been sentenced Monday to 27 months in prison and ordered to pay $1 million in restitution.

Marko Nikoli, 35, was sentenced in a U.S. District Court in Cleveland. He had pleaded guilty to two counts of bank fraud and one count of money laundering. The latter charge stemmed from the purchase of a $60,000 Mercedes Benz (News-Herald.com March 18).

One of nearly two dozen persons arrested in connection with the fraud, Nikoli is the nephew of Koljo Nikolovski, considered the ringleader for the fraud scheme. Niklovoski, of both Eastlake and Macedonia, is serving an 18-year prison term in connection with more than $2.9 million in fraudulent loans.

The loan scheme involved more than 1,000 loans for more than $70 million combined to about 300 accountholders at the credit union.  The credit union's CEO, Anthony Raguz, is serving a 14-year prison sentence and was ordered to pay $72 million for pocketing bribes, kickbacks and cash gifts related to the loans.

The National Credit Union Administration placed the credit union into conservatorship in April 2010 and liquidated it a week later, saying it was insolvent. The conservatorship reflected $170 million in losses to the National Credit Union Share Insurance Fund in one of the biggest credit union failures in U.S. history.

NJ Bill Would Add FCUs To Advisory Council

 Permanent link
TRENTON, N.J. (3/20/13)--New Jersey Senate President Steven Sweeney (D) has introduced legislation that would expand the state's Credit Union Advisory Council (CUAC) to seven members and provide for representation of a minimum of two federally chartered credit unions.

Through the CUAC, state-chartered credit unions advise the state government on credit union-related matters, said the New Jersey Credit Union League. (The Daily Exchange March 20). Members are nominated by the governor and must be confirmed by the state Senate.

The legislation recognizes that federally chartered credit unions, though primarily regulated by the federal government, also are subject to state laws and regulations and should be represented on the council.

"Preserving and expanding the independent council are part of the New Jersey Credit Union League's strategic plan," Chris Abeel, league director of government affairs, told News Now.

In October, NJCUL successfully lobbied for an amendment to preserve an independent CUAC. The bill was a response to a Department of Banking & Insurance (DOBI) recommendation under an executive order from Gov. Chris Christie that directed all departments to review the duties and spending of independent state boards, commissions, authorities and agencies.

DOBI determined that the consolidation of CUAC and two other boards into one Consumer Finance Advisory Board "would best serve the needs of the citizens of this State," said the league. The new board would have included nine statutorily defined representatives with two seats designated for credit unions.

The league argued that the consolidation would lump very different financial service providers into one advisory board with duties that would be inconsistent with those individual providers' businesses and expertise, Abeel said.

"The board would have included representatives with conflicted expertise and interests," Abeel told News Now.

The new legislation, with amended language, would consolidate two of the boards while preserving an independent CUAC.

Military Publications Make The Case For CUs

 Permanent link
WASHINGTON (3/20/13)--More consumers are looking to credit unions during tough economic times because of better interest rates on checking and saving accounts and more consumer-friendly products, according to an article that appeared in several military publications. 

Since 2004, credit union membership is up 12%, rising to a total of  93.8 million members last year, according to the National Credit Union Administration, said the Army Times (March 25). The article, "Making a Case for Credit Unions," also appeared in Marine Corps, Navy and Air Force publications. The Credit Union National Association provided information for the story.

Credit unions are a good fit to serve mobile military populations, Retired Army Col. Roland "Arty" Arteaga, DCUC president, told the publications. The Defense Credit Union Council has 210 member credit unions, he added.

"Once a member always a member," Arteaga told the publications.  "With technology the way it is, you don't physically have to walk into any particular facility. You can conduct your transactions from any part of the world." 

Some credit unions that were founded to serve military members have expanded outside of the military, the article said. "For example, Security Service FCU [in San Antonio] was founded by service members but has greatly expanded it field of membership," the article explained. "Troops and their families now make up less than 10% of the credit union's membership base."

The article also featured a sidebar about several credit unions that serve military communities and that are offering products to help those affected by sequestration--not military personnel who are currently unaffected, but rather spouses of military members and military retirees who work for the federal government as civilians. Andrews FCU, Joint Base Andrews, Md., and Redstone FCU, Redstone Arsenal, Ala., are offering a "Sequestration Bridge Loan" and "Furlough Assistance Loan" respectively, each up to $5,000 to those displaced from their jobs, the article said.

In a related matter, Tinker FCU (TFCU) in Oklahoma City, with $2.9 billion in assets, is telling it members who receive furlough letters in the aftermath of the federal budget sequestration to bring them into the credit union for assistance. It has about one-third of it 270,000 members relying on the U.S Air Force for their livelihoods (Journal Record March 18).  

TFCU will provide free planning, special loan repayment arrangements--such as skipping a payment--and a reduction in short-term loan-interest rates. "We don't want to get [members] into long-term debt to solve a short-term problem," Matt Stratton, TFCU marketing vice president, told the Journal Record.  

Patelco CEO To Resign

 Permanent link
PLEASANTON, Calif. (3/19/13)--Patelco CU President/CEO Ken Burns announced Monday that he will be leaving the Pleasanton, Calif.-based credit union.

"He will continue to lead the credit union over the next several months to ensure a smooth transition until a new CEO is secured," said a spokesperson for the $3.9 billion asset credit union.

Burns joined Patelco in 2009 "with the objective to turnaround the credit union during an economically challenging time in the nation," the spokesperson told News Now. "During his tenure, the credit union achieved its best performing year (2012) in the organization's history."

The spokesperson also said that "Patelco appreciates Ken's leadership, and we are thankful for his ongoing assistance during this transition. We remain committed to be the pre-eminent financial service provider to our valued members and community."

CU System Briefs (03/19/2013)

 Permanent link
  • BAKERSFIELD, Calif. (3/19/13)--Golden 1 CU is offering a $10,000 reward for information that leads to the arrest and prosecution of three men who robbed its Bakersfield, Calif., branch on March 12. The robbery occurred at about 2:30 p.m., and the three suspects exited the building and fled in a 1990s-era silver Toyota Camry, which later was recovered as stolen. The men are shown fleeing toward the getaway car. The men all wore black ski masks, and hooded sweatshirts and tennis shoes. One wore sweatpants, one dark pants, and one dark shorts.  One was armed with a black semi-automatic gun. Anyone with information should call the Bakersfield Police Department at 661-327-7111, said the credit union in a press release.  (Photo provided by Golden 1 CU) …
  • TALLAHASSEE, Fla. (3/19/13)--Dan Clark, former CEO of Tallahassee-Leon FCU and a financial consultant with Dan Clark Associates LLC in Tallahassee, died on March 7. Clark served as CEO of the credit union from 1987 through 2005. He also served seven years from 1971 to 1978 as a regional examiner for Florida's Department of Financial Institutions and worked for the Florida Credit Union League (now the League of Southeastern Credit Unions) from 1978 to 1980 as an auditor and then led marketing at the league's service corporation. He was director of the Florida Council of the Credit Union Executives Society, according to his company's website …
  • NEWARK, N.J. (3/19/13)--Calvin Jackson, former director of St. James A.M.E. FCU and former director at the New Jersey Credit Union League died Saturday while exercising on a treadmill, according to the league.  In addition to his position as board member, Jackson also served as the credit union's loan officer and chairperson of its credit committee, as well as trustee and board member of the organization that manages housing projects owned by St. James A.M.E., a church and parent organization of the credit union (The Daily Exchange March 18). He served on the league's board from 2008 to 2011, was president of the Essex/West Hudson Chapter, and served as a CULAC trustee. In 2011, Jackson was named NJCUL's Volunteer of the Year …
 

CNN Money: CU Is 'Best Bet' For Free Checking

 Permanent link
EW YORK (3/19/13)--Consumers' "best bet" for finding a free checking account is to go to a credit union, CNNMoney said in a Monday article.

If members meet certain conditions, 96% of credit union checking accounts are free or can become free, Bankrate.com said.

"Once again, free checking is the rule rather than the exception among the largest credit unions," said Greg McBride, Bankrate's senior financial analyst. "That's in stark contrast to the sharp year-over-year declines that we continue to see in the banking sector."

To read the CNNMoney and Bankrate.com articles, use the links.

US Supreme Court Rejects Goldman Appeal On MBS

 Permanent link
WASHINGTON (3/19/13)--The U.S. Supreme Court Monday refused to hear an appeal by Goldman Sachs of a lower court's decision involving mortgage backed securities (MBS) in a case similar to lawsuits filed by the National Credit Union Administration against securities dealers, including Goldman Sachs.

Monday's case does not involve NCUA, but  has similar arguments that were argued in the lower courts before the nation's highest judicial body denied the case without comment. 

Goldman Sachs, an investment bank, asked the Supreme Court to overturn  a decision by the 2nd Circuit Court of Appeals in  a class-action lawsuit filed by NECA-IBEW Health & Welfare Fund. NECU's suit alleged Goldman Sachs provided false and misleading information about the securities it underwrote and issued before the financial crisis hit (The Wall Street Journal and American Banker March 18).

NECA-IBEW said it bought securities in 2007 and 2008 from two of 17 trusts that Sachs offered. It alleged that Sachs' materials for the offerings included misleading information about the practices of mortgage lenders and the appraisals of properties backing the securities.  NECA-IBEW also maintained that Goldman misled investors about the underwriting and appraisal standards of the banks originating the loans backing the MBS offerings.

A lower trial court dismissed claims involving securities from 15 trusts NECA-IBEW did not do business with. However, last year the New York-based Second U.S. Circuit Court of Appeals ruled NECA could bring a class action related to the other offerings.  In a separate case, the First Circuit Court of Appeals ruled that investors can't sue an issuer over MBS that they did not purchase.

NCUA, as a conservator of corporate credit unions that bought similar MBS offerings before they collapsed, has filed several lawsuits seeking compensation for losses to the National Credit Union Share Insurance Fund when the corporates closed.

CUNA, League On Bank Charter Vote: Members' Interests Matter Most

 Permanent link
BROCKTON, Mass. (3/19/13)--Members' interests matter most, said the Credit Union National Association and the Massachusetts Credit Union League upon learning Monday that members of Brockton, Mass.-based HarborOne CU had approved converting the credit union into a state-chartered mutual cooperative bank.

"CUNA strongly believes that the best financial services model for consumers is the credit union model, which offers better rates, lower and fewer fees, and superior personal service," said CUNA Executive Vice President of Strategic Communications and Engagement Paul Gentile. "All of that stems from the basic credit union structure of being not-for-profit, cooperatively owned and member-directed."

CUNA policy with regard to credit union conversion to a bank is that the decision is one for the membership to make since credit unions are cooperatively owned by their members, said Gentile. "It is important, however, for the members to be fully informed about what's being proposed and its implications prior to the conversion."

Roughly 62% of voting members of the $1.9 billion asset credit union cast ballots in favor of the change. The credit union has 139,078 members. Of that, more than 22.433--or 21% of eligible voters actually voted either by mailing in ballots or voting at a special member meeting on March 11 (Fort Mills Times and The Enterprise March 18).

While it is the prerogative of the membership to determine the fate of their credit union, members are best-served by a credit union operating with a credit union charter, the Massachusetts league noted Monday.

"Any charter conversion has to be approached from the viewpoint of the credit union's members--owners of the credit union," said league President Daniel F. Egan Jr.  "Unfortunately, in this case, the members seemed to have accepted the argument that the operational advantages of the bank charter outweighed their rights and privileges as credit union members."

The league said it strongly believes that the member-owner, not-for-profit credit union charters is the charter of choice. "Credit unions now have 2.5 million members in Massachusetts and 95 million members nationwide because they put the interests of the consumers first," said Egan.

"Under current laws and regulations, credit unions operate under more restrictions than banks," Egan said. "In particular, credit unions lack access to alternate sources of capital, face higher net worth requirements, are more restricted in business lending and serve a defined field of membership." 

"These issues are real and indicative of the challenges that credit unions face as they seek to meet the modern needs of today's consumers. It is vitally important that legislators and regulators pay heed to these challenges and work to adopt new laws and regulations that keep the credit union charter viable," Egan added.

HarborOne , the largest state-chartered credit union in New England, said it applied for the change after it had to turn down mortgage lending business because its charter was limited to four counties and prevented it from growing in the Boston market. It also said it was nearing its member business lending cap.

The National Credit Union Administration said the credit union had the alternative to petition the state to widen its geographic boundaries and that it was not near its MBL cap.

US Candidates Needed For International Leadership Program

 Permanent link
Click to view larger image Rodney Wilson, California and Nevada Credit Union Leagues legislative and regulatory lobbyist and a participant in the World Council of Credit Unions International Credit Union Leadership Program, shares best practices on government relations at a credit union conference in the Dominican Republic.  (Photo provided by the World Council of Credit Unions)
MADISON, Wis. (3/19/13)--The World Council of Credit Unions (WOCCU) is seeking U.S. credit union professionals to apply for a two-week credit union internship in Costa Rica, June 9- 22, through WOCCU's International Credit Union Leadership Program. The application deadline is April 12.

Twelve candidates will participate in the scholarship program, which covers all expenses except airfare.

The program "offers excellent opportunities for emerging credit union leaders to better understand how another country's credit unions reach underserved populations and support their communities through member education and other special projects," said Brian Branch, WOCCU president/CEO.

"At the same time, interns gain deeper cultural appreciation and foreign language practice while living with host families," he said.

The program facilitates idea exchanges, promotes foreign language skills, exposes participants to cultural diversity and improves problem-solving skills as they relate to the credit union industry. Participating U.S. credit union leaders learn about methods to better serve an increasingly diverse membership, including youth, businesses and low-income and Hispanic members.

In exchange, credit union professionals from Costa Rica can intern in the U.S. Twelve Costa Rican credit union professionals will begin their U.S. internships April 7. The program is part of the U.S. Department of State's Professional Fellows Program and is funded by a grant from the U.S. Department of State, Bureau of Educational and Cultural Affairs, Office of Citizen Exchanges.

The leadership program provides each participant with credit union placement, lodging with a host family, meals and communication stipends, local transportation and traveler's insurance. Sponsoring U.S. credit unions must cover airfare of roughly $950.

For more information, use the link or contact Michael Suing at msuing@woccu.org or 608-395-2075.

CUANY And NYCUF Team To Attract Young Pros To Convention

 Permanent link
ALBANY, N.Y. (3/19/13)--The Credit Union Association of New York, through a partnership with the New York Credit Union Foundation, will offer two grants to assist credit union employees under the age of 35 in attending the association's Annual Meeting And Convention, June 13-16.

"Our convention provides an excellent background of the statewide credit union landscape for young professionals," said young professional Cara Carlevatti, Great Erie FCU, Orchard Park, N.Y. "It's a great chance to network with vendors, association staff and other credit union professionals.

The association's Young Professionals Commission (YPC) will once again host a networking event at the conference. The group will also manage the NYCUF booth.

"Convention is a central meeting place for New York's credit union leaders to gather and learn—together and from each other," said YPC Chairman Lisa Totaro, Sunmark FCU, Latham, N.Y. "Young professionals who attend convention alongside statewide leaders benefit from knowledge-sharing while also providing a fresh perspective on the issues confronting our industry today."

Texas League Monitoring Bills Of Interest To CUs

 Permanent link
AUSTIN, Texas (3/19/13)--The Texas Credit Union League is monitoring several bills in the state  legislature that are of interest to credit unions.

March 8 was the last day for lawmakers to file legislation for this session. They filed more than 6,000 new bills, TCUL said (The Advocate March 15).

TCUL will be closely monitoring several for their potential impact on credit unions, but there are no bills filed that are a directly attacking the franchise tax exemption or other aspects of credit union operations, TCUL said.

Highlights of recent activity likely to be of the most interest to credit unions include:  

  • SB 244 passed favorably out of the Senate and was sent to the House. This is the Texas Credit Union Department's bill, which would increase the number of advisory/honorary directors for credit unions to six from three.
  • HB 560 was reported favorably out of the House Investments and Financial Institutions Committee and sent to the floor of the house. The stand-alone House bill increases the number of advisory/honorary directors.
  • HB 1602, which is identical to SB 244, was heard in the House Investments and Financial Institutions Committee. It's expected that it will be reported favorably out of the committee in the next week, said TCUL.
  • HB 1451 would require the Texas Credit Union Department to establish a program to encourage credit unions to make micro-loans to victims of domestic abuse.
  • SB 295 would require lenders to notify contractors of the suspension of a loan disbursement, with certain exceptions. At the moment, this legislation does not appear to have any momentum, but TCUL said it is watching it closely and is expressing concerns about the bill to the sponsor.
  • SB 385 proposes a new section in the law called "Property Assessed Clean Energy Act,"  TCUL said. The act would create a superior lien for loans that finance energy upgrades to the borrower's property.
  • SB 232 would permit the Office of Consumer Credit Commissioner to require Nationwide Mortgage Licensing System and Registry registration for additional industries, such as property tax lenders, credit access businesses, and pawnshops, under its jurisdiction
  • SB 247 gives the Finance Commission additional administrative powers over property tax lenders. Property tax lenders are prohibited from deceptive advertisements and must disclose all fees and charges in solicitations or for any subsequent transactions. Other entities such as credit unions, with pre-existing recorded liens on encumbered properties gain a regulated form and process to request a payoff from property tax lenders.
  • SB 474 would change financing statements that are filed to protect secured transactions to require lenders, including credit unions, to use new financing forms.

Bankrate Busts Myths About CUs

 Permanent link
MADISON, Wis. (3/19/13)--A March 18 Bankrate.com article shatters the myth that switching to a credit union means sacrificing convenience.

Having a branch nearby is one of the most important criteria for many people when choosing a financial institution. A 2009 study by the Rand Corp. in Santa Monica, Calif., found that 59% of those surveyed ranked branch convenience as one of their primary reasons for why they choose chosen a financial institution.

The article also cites Credit Union National Association statistics in outlining how credit unions meet their members' expectations of convenience.

Credit unions have collaborated together to create shared branching networks, the Bankrate.com article explained. One credit union branch network, Credit Union Service Centers Network, has more than 5,000 branches nationwide and operates a 24-hour customer service call center.

Credit unions also offer access to an ATM network shared with other credit unions called the CO-OP ATM Network, which maintains nearly 30,000 ATMs nationwide, including more than 9,000 that can take deposits.

Also, some credit unions will waive out-of-network ATM fees and even reimburse members for fees charged by other ATM operators, Bankrates's 2013 Credit Union Checking Survey found.

Credit unions also leverage technology to offer convenience, said the article. About 85% of credit union members were satisfied with their access to online and mobile banking services, compared with 66% of customers of large national banks, according to 2012 survey by Boston research firm Chadwick Martin Bailey.

CU System Briefs (03/18/2013)

 Permanent link
  • WASHINGTON (3/18/13)--Credit Union National Association President/CEO Bill Cheney (right) talks with former Federal Deposit Insurance Corp. chairman Sheila Bair and Stephen Brobeck, executive director of the Consumer Federation of America (CFA).  Bair was a keynote speaker at CFA's annual meeting in Washington Thursday. The former regulator urged higher capital levels for the nation's largest banks as a way to avoid future failures and a halt to lending should another deep recession occur. She praised the mission of the Consumer Financial Protection Bureau and said Congress should confirm its director, Richard Cordray, but Bair also said regulators need to be mindful of the growing burden that complex and costly regulations pose for smaller banks and credit unions. (Photo provided by CUNA) …
  • APPLETON, Wis. (3/18/13)--Community First CU, a $1.7 billion asset credit union in Appleton,Wis., has installed automated external defibrillators (AED) at all its branches in the Fox Valley and northeast Wisconsin (The Post-Crescent March 15). Mark Evers, maintenance specialist at the credit union and a volunteer firefighter and first responder with the Greenville Fire Department, suggested the credit union install the AEDs. "All you have to do is listen to it and do what it says. It gives that individual a lot better chance of survival," he told the publication. Evers has used an AED in his vehicle six times to revive cardiac victims. Although the credit union has trained first responders at all locations, now every employee has the ability to help in an emergency, said spokesperson Amanda Secord …
  • FARMERS BRANCH, Texas (3/18/13)--The Alamo Chapter of Credit Unions (ACCU) in Texas was back on Capitol Hill, just one week after Hill visits during the Credit Union National Association's Governmental Affairs Conference in Washington, says the Texas Credit Union League (LoneStar Leaguer March 15). This time the group is participating in SA to DC, an annual conference hosted by the Greater San Antonio Chamber of Commerce, the San Antonio Hispanic Chamber of Commerce and the Free Trade Alliance. The chapter served as a sponsor for speakers Sen. Ted Cruz (R-Texas) and U.S. Rep. Henry Cuellar (D-Texas). ACCU Board President Ashley Harris introduced the speakers. Harris is pictured here with Rep. Pete Gallego (D-Texas). (Photo provided by the Texas Credit Union League) …
  • RALEIGH, N.C. (3/18/13)--The Carolinas Credit Union Foundation (CCUF) Board of Directors announced it has elected Chuck Purvis to fill a board vacancy. Purvis, president/CEO of Raleigh-based Coastal CU, is former chairman of the National Credit Union Foundation (NCUF)  and was a member of its board from 1995 to 2007. He is a champion of the Community Investment Fund, a family of funds that has become a major source of funding for NCUF. He joins Brian Sponaugle, chief operations officer of Greenville (S.C.) FCU, and Michelle Bragg, chief operating officer of Sharonview FCU, Fort Mill, S.C.,  as the three newest CCUF board members added since July, according to the North Carolina Credit Union League's newsletter, The Weekly Conversation (March 15) …

NEW: HarborOne Members Vote To Convert To Bank

 Permanent link
BROCKTON, Mass. (3/18/13 Filed 11:10 p.m. ET)--Members of HarborOne CU in Brockton, Mass., have voted to convert the $1.9 billion asset credit union to a mutual cooperative bank charter.

Roughly 62% of voting members cast their ballots in favor of the change. Of its 139,078 members, more than 22,433 or 21% of eligible voters actually voted by mailing ballots or attending a special member meeting held March 11 (Fort Mills Times and The Enterprise (March 18).

The votes were confirmed by an independent auditing firm, the Colbent Corp. of Braintree, Mass. The ballots and materials used for the vote will now go to state banking officials and the National Credit Union National Administration.

The credit union is the largest state-chartered credit union in New England. The credit union had said when it applied for the change that it had to turn down mortgage lending business because its charter was limited to four counties, it was nearing its member business lending cap, and it could not grow in the Boston market.

NCUA had said the credit union could have petitioned the state to widen its geographic boundaries and that it was not near its MBL cap.

Both the Credit Union National Association and the Massachusetts Credit Union League  have said a credit union charter is the best option for credit union members and any decision should be in the best interest of the members.

Three Olympians To Compete In CU Cherry Blossom Run

 Permanent link
WASHINGTON (3/18/13)--U.S. Olympians Janet Cherebon-Bawcom, Jen Rhines and Colleen De Reuck will compete in the upcoming USA Women's 10-Mile Championship, presented by America's Credit Unions, which will be held in conjunction with the 2013 Credit Union Cherry Blossom 10-Mile Run in Washington, D.C. April 7.

On the men's side, last year's winner, Allan Kiprono, will return to defend his title, and will face 2012 runner-up Lani Kiplagat.

"The American women will be racing for both open and U.S. Championship prize money, with $14,400 specifically earmarked to be paid to the top 10 American women," said race director Phil Stewart.

De Reuck set the women's course record of 51:16 in 1998, when she competed on behalf of the Republic of South Africa. Kiprono set the men's course record last year in a time of 45:15, which was the fastest 10-mile time of the year and the fifth fastest of all time.

Cherebon-Bawcom was a finalist in the 10,000 meters for the U.S. in last summer's London Games. Rhines represented the U.S. in the 5,000 meters, 10,000 meters and marathon in the Beijing, Sydney and Athens Olympics, respectively. De Reuck competed for the U.S. in the marathon in Athens, after representing South Africa in Barcelona, Atlanta and Sydney.

Credit Union Miracle Day, the sponsor group of a family of races, in cooperation with the Credit Union National Association and the National Association of Federal Credit Unions, secured the naming rights for the championship run. The championship name will say it is Presented by America's Credit Unions (News Now Feb. 20).

More than 26,000 runners submitted applications to participate in the 2013 Credit Union Cherry Blossom 10 Mile and 5K.

Since 2002, the Credit Union Cherry Blossom 10 Mile and 5K have raised more than $5.5 million for the Children's Miracle Network Hospitals under the umbrella of Credit Unions for Kids.

Yo, Listen Up! Puppet Rappers Tout CUs' Student Loans

 Permanent link
NEW YORK (3/18/13)--The Muppets have captured the imagination of adults and children for decades. Now, cuStudentLoans, powered by LendKey, is hoping videos featuring "hip" Muppet-like characters and rap music will encourage college students to learn about credit unions and student loans.

LendKey is a CUNA Strategic Services provider.

cuStudentLoans' Squeaky Jams YouTube video series features a bear, Business Barry, and a squirrel, Squeaky, rapping to their puppet friends about real-world finance and how credit unions and student loans can help them meet everyday challenges.

Barry and Squeaky are more than entertainers. Among the issues addressed in the five-part series:

  • The difference between student loan consolidation and refinancing;
  • How to lower the interest rate on a student loan;
  • What to do if the student can't afford student loan payments; and
  • The benefits of credit unions.
To view the videos on YouTube, use the link.

League Testifies Fourth Time On Elder Abuse, Signage

 Permanent link
PORTLAND, Maine (3/18/13)--The Maine Credit Union League provided testimo­ny before state legislative committees for the fourth time in less than two weeks about pending legislation on elder abuse and signage to promote small businesses.

Quincy Hentzel, league director of governmental affairs, addressed the Criminal Justice and Public Safety Commit­tee at a Wednesday public hearing in support of L.D. 527, which would implement measures to help protect the elderly and vulnerable adults from being exploited (Weekly Update March 15).

"Abuse of elderly citizens is a very serious and extremely devastating and heart-breaking crime, and its occur­rence has unfortunately been increasing over the years," Hentzel explained to the committee. "Speaking on behalf of the credit union industry, the type of abuse we see all too often is that of financial elder abuse. Maine's credit unions have been proactive in provid­ing information, building awareness and working to help prevent elder and dependent adult financial abuse, and support any and all initiatives that aim to deter this type of behavior."

Last year, the Credit Union National Association, state leagues and credit unions coordinated efforts to curb elder financial abuse. Steps taken by those groups were detailed in a CUNA comment letter to the Consumer Financial Protection Bureau in August (News Now Aug. 22). CUNA also has conducted webinars on elder abuse.

Hentzel testified March 8 in support of L.D. 483--which would enhance the use of on-premises signs to promote small businesses.

Hentzel noted before the legislature's Trans­portation Committee that the legislation "would provide support for the many businesses in this state by allowing them greater latitude for their on-premises advertising by permitting them to use their electronic signs to their full capacity.

"In order to help build awareness for our industry, a number of credit unions across the state have already purchased electronic signs as a means of informing and promoting the products and services we offer to our members and consumers," she added. "These signs represent a significant financial investment, costing upwards of $40,000 or more."

Work sessions for the two bills have not been scheduled.

More CUs Line Up To Assist Members In Sequestration

 Permanent link
MADISON, Wis. (3/18/13)--News Now has heard from at least a dozen more credit unions that serve federal employees and are offering programs to help their members through furloughs generated by the federal government's budget cuts, or sequestration.

That is in addition to 25 credit unions from 14 states News Now reported in two articles the week after sequestration began March 1. The latest group continues to indicate the widespread impact of the furloughs. Those credit unons are helping members in Kentucky, Washington state, Virginia, Nebraska, Oklahoma, Kansas, California, and Washington, D.C.

As many as one million federal employees are expected to lose 20% of their paychecks between April and the end of the fiscal year in September. They could be furloughed for up to 176 "noncontinguous hours," which add up to 22 eight-hour workdays, according to Fort Knox FCU, Radcliff, Ky. (The News-Enterprise March 9).

Bill Rissell, the $1 billion asset credit union's president/CEO, told the publication that the Fort Knox area has more than 5,000 Department of Defense (DoD) civilians and contractors impacted by the sequestration.

As a result, Fort Knox FCU will reactivate its interest-free loan for 30 days, an offer previously used during disasters or emergencies. It will also extend furlough loans as an interest-only payment after the initial 30 days. Members can also request a temporary, interest-only payment on current loans for three months. That would reduce, for example, an auto loan payment from $325 a month to less than $55. And members can take early withdrawals of up to $10,000 from share certificates of deposit.

Education is also at the forefront of credit unions' assistance to furloughed members and the public. Three credit unions in Washington state--Connection CU of Silverdale; Kitsap CU of Bremerton and Peninsula Community FCU in Shelton--are working as a group to help the community prepare for furloughs. They are sponsoring a free community event, Surviving Sequestration: A Community Town Hall, on March 26. The event will feature speakers and a resource fair to provide attendees help addressing financial, physical and emotional needs during the times of financial change.

Their main message: Credit unions are here to help.  They said they want to work with their members and community to be proactive in thinking through their household financial scenario during furloughs. The community has 16,000 local DoD civilian employees, contractors, families and others facing furloughs.

Many of the nation's credit unions offering assistance are taking the extra steps to work with individual members  to customize plans tailored to the individual's circumstances.

In Alexandria, Va., Commonwealth One FCU said it "understands that each member's situation is unique and they will be affected differently by the government's action." 

"The first step in the process of sequestration is for the member to understand their financial situation before they can factor in the effects of sequestration on their income," Commonwealth One said in a press release. Its free, online debt analysis tool, Debt In Focus, provides a personalized financial assessment in plain language.  The credit union also encouraged members to contact itto discuss a solution tailored to their needs and established a hotline to allow members easy access.

"We're here to help our members through the challenges of facing a reduced income," said Ashley Baldeon, Commonwealth One's marketing manager.  "We thoroughly support 'people helping people."

Vacaville, Calif.-based Travis CU echoed that thought. "We are here for our members and are doing everything we can to support them during these challenging economic times," President/CEO Patsy Van Ouwerkerk said in The Davis Enterprise (March 10). "Members are encouraged to visit any of our branches so that we can work with them to address any financial difficulties that these furloughs and loss of income may create."

Other credit unions reporting furlough assistance programs included: Global CU in Spokane, Wash.; SAC FCU in Bellevue, Neb.; Frontier Community CU, Leavenworth, Kan.;  Transportation FCU, Washington, D.C.; and FAA CU and Tinker FCU, both located in Oklahoma City, Okla.

New Video Educates About NCUF Mission

 Permanent link
MADISON, Wis. (3/18/13)--The National Credit Union Foundation posted a new video on YouTube Friday providing a general overview about the foundation, its mission and its programs.

The two-minute long video touts the credit union people helping people philosophy and centers on telling how the foundation makes financial freedom achievable. The video points to NCUF programs such as Real Solutions, Credit Union Development Education, the award-winning national public television program Biz Kid$, grants, and CUAid, the movement's disaster relief program.

To view the video, use the link.

PCUA Hosts MBL Participations Conference

 Permanent link
HARRISBURG, Pa. (3/18/13)--The Pennsylvania Credit Union Association's Member Business Lending (MBL) Participations Conference and Buyer/Seller Networking featured several expert speakers Thursday in Lancaster.

A Pennsylvania Credit Union Association panel discussion on member business lending  participations included, from left: Rick Wieczorek, Mid-Atlantic Corporate FCU, Middletown; Dallas Zulli, AmeriChoice FCU, Mechanicsburg; Tammy Baker, Members 1st FCU, Mechanicsburg; Robert Fox, American Heritage FCU, Philadelphia; and Jeff Judy, Jeff Judy & Associates. (Photo provided by the Pennsylvania Credit Union Association)
The event attracted more than 50 people from 30 credit unions in four states. It was sponsored by Keystone Business Lending Services LLC and Member Business Financial Services LLC (Life is a Highway March 15).

Kevin Dion, vice president of business lending for Citadel FCU, Exton, explained the basics of loan participations and why the basics are critical to comprehend. Bill MacMaster, National Credit Union Administration regional lending specialist, provided information about the NCUA's perspective on MBL participations and answered questions.

PCUA staff attending included: Rick Wargo, executive vice president/general counsel; Molly Snody, director, business advisory services; and Glenn Cermak, director, education and professional development.

The Credit Union National Association and credit unions reintroduced in Congress last month legislation to raise credit unions' member business lending cap to 27.5% of total assets, from the current 12.25%. Doing so would generate $14.5 billion available for MBLs and increase jobs by 158,000 in the first year, without costing the taxpayer, according to new statistics from CUNA.

Loyalty To Mobile Banking Kept Some From Switching To CUs

 Permanent link
PLANO, Texas (3/18/13)--Credit unions could have gained even more members than the 2.2 million members they added  in the weeks surrounding Bank Transfer Day, if they had made it easier for consumers to transfer their mobile accounts, according to  Jim Van Dyke , CEO of Javelin Strategy & Research.

Although the Nov. 5, 2011 event was a big gift to credit unions, not all credit unions were ready to turn unhappy customers into loyal members, he said.  Many people dissatisfied with their big bank's overwhelming fees and underwhelming customer service supported the idea of moving their accounts to a credit union, but disconnecting from their big bank's mobile banking product proved to be a deal-killer for some, said Van Dyke.

Van Dyke will be among the presenters at Catalyst Corporate FCU's Accelerating Success Conference, to be held April 9-10 in conjunction with Catalyst's Annual Meeting in San Diego.

Javelin conducts research on risks and opportunities in mobile initiatives, multichannel financial services, payments and security, risk, and fraud. As part of that research, Van Dyke traveled to Occupy movement protest sites in the fall of 2012 to research consumer attitudes associated with Bank Transfer Day and certain financial services, including mobile banking.

"I spoke with people who wanted to move their accounts from a bank to a credit union," he said. "But when I asked, 'Are you going to switch,' I heard, 'No. I do everything on my mobile.' If implemented correctly, a loyalty factor exists with mobile banking, much like the loyalty surrounding bill pay in the late 1990s," Van Dyke told Catalyst Corporate.

Mobile has emerged as the new critical access point for consumer accounts, he said. "It can move members from a secondary to a primary relationship with a financial institution. That's important, because secondary relationships have all of the same costs that are associated with a primary relationship, but without the profitability," he said.

How credit unions deploy mobile matters, Van Dyke said.  Credit unions should not feel pressured by vendors to buy the latest, greatest technology. Nor should they sit back on their heels to wait for a better time to evaluate participation in the mobile arena, he added.

Certain features--such as the ability to check balances--are important to all mobile programs, but they have to be blended with strategy unique to an individual financial institution. To be successful, Van Dyke said, strategy should be built on answers to questions such as:

  • Who are you trying to serve (field of membership)?
  • What are your age concentrations?
  • Is your membership high-tech or low-tech?
  • What is the service distribution channel mix?
  • Who are you competing with?
  • What makes your institution different?
  • Where are you in the mobile life cycle?
  • Does your purchase align with branch strategy? For example, would mobile deposit make sense given the location of your members and the number of branches you have?
"Avoid the extremes of trying to do everything and doing nothing," he said. "You must be in mobile, but you can pick your battles."  He recommended two "smart bets" for lower cost, higher return strategies:

  • Provide text message alerts for low balances or payment due dates,  and
  • Plug into apps--Android for the younger members and iPhone for the older. Put Windows and Blackberry platforms farther down the list, he added.
Van Dyke will share additional insights from Javelin studies on mobile banking in his April 9 conference presentation, "How Mobile Banking Can Increase Return on Investment." Catalyst Corporate will have information on its mobile services at the conference product expo.  Early bird registration ends Tuesday. For more information, use the link.

NCUF Has Distributed 55,000 Copies Of 'Money Rules'

 Permanent link
MADISON, Wis. (3/15/13)--The National Credit Union Foundation says it has distributed more than 55,000 copies of bestselling personal finance author Jean Chatzky's book, "Money Rules: The Simple Path to Lifelong Security" to credit union members since it began making the book available in December.

The book contains a set of actionable rules that readers can follow to enjoy financial security and eliminate money stress.  NCUF is offering  credit unions and other credit union  organizations the book at a reduced rate (via a donation to NCUF) so they can distribute  it to members.

Chatzky was a speaker at the Credit Union National Association's Governmental Affairs Conference last month in Washington, D.C. NCUF sponsored a book signing in its booth at the exhibit hall at the GAC, where more than 300 attendees met Chatzky.

She also spoke at NCUF's Dinner Presenting the Herb Wegner Awards and pre-signed copies for every attendee.

An organization ordering 1,000 or more copies of the book will get its name included on a sticker on the front cover. Each book already comes with a "Compliments of: NCUF" printed on the cover. For more information, use the link.

CU System Briefs (03/15/2013)

 Permanent link
  • MINNEAPOLIS/ ST. PAUL (3/15/13)--Chiropractic FCU, a Farmington, Mich. based credit union, has expanded to Bloomington, Minn., with a branch located in the Minnesota Chiropractic Association, announced MCA CEO and Executive Director Debra Hurston (Minneapolis/St. Paul Business Journal Online March12).  The credit union serves chiropractors, their employees and family members. Although it is renting space at MCA, it does not have employees in Minnesota yet but plans to open a full service branch within the next five years. Minnesota has about 2,600 chiropractors with twice as many employees. The expansion was approved by the National Credit Union Administration …
  • PEORIA, Ill. (3/15/13)--Citizens Equity First CU (CEFCU) in Peoria, Ill., is alerting its members about a possible telephone scam. CEFCU officials said they were notified by a member who received a call from a company claiming it had been hired by the $4.8 billion asset credit union to conduct security on its accounts, and asked for the member's account number.  CEFCU said no one was hired to conduct security on its accounts and urged members who receive calls from this company--which uses "security" in its name--to immediately contact the credit union  (Peoria Journal Star March 9) …
  • TULARE, Calif. (3/15/13)--Anna Belle Brown, former manager of Tucoemas FCU, Visalia, Calif., died March 7. Brown was born March 5, 1921. She started working at the credit union in 1954 as the part-time treasurer-manager while she was a full-time employee of the Tulare County Auditor's Office (The Desert Sun March 13). In 1954, she became the full-time manager, a position she held until her retirement in 1986. She was active in many credit union organizations, including the California Credit Union League's Sequoia Chapter and the Credit Union Executives Society ...

Financial CEOs Have Second-Highest Turnover Rate For February

 Permanent link
CHICAGO (3/15/13)--U.S. financial institution CEOs had the second-highest turnover rate out of 26 industries monitored in February, according to the monthly report on CEO turnover released Thursday by global outplacement firm Challenger, Gray & Christmas Inc.

The 18 reported CEO turnovers in the financial industry were more than double that of the seven reported in February 2012. The financial industry departures--mostly at credit unions and banks--was the highest monthly total for the industry since Challenger began tracking in 2008.

"I don't know if we can read too much into the report since Challenger only began tracking this since 2008 and the number of departures (18) is relatively small, compared with the total number of bank and credit union CEOs (14,000)," Steve Rick, senior economist with the Credit Union National Association, told News Now.

"However, there could be two effects taking place here," he continued. "A demographic effect as the very large baby boom generation hits retirement, and we are seeing an exodus of elderly CEO baby boomers. Second, we normally see an increase in job departures as the economy improves and other more lucrative opportunities present themselves."

The health care sector led all others with 20 departures, nine of which came from hospitals and hospital systems.

Overall, the number of CEOs who left their posts decreased slightly in February, with 110 CEOs leaving. The February total was 6% higher than the same month last year, when 104 CEOs left their positions, and 3% lower than the 113 recorded in January.

So far this year, 223 CEOs changed positions, nearly unchanged from the 227 recorded during the same two-month period last year. There were 1,214 turnovers in 2012.

The departing CEOs this year are younger on average (56.6) than those departing last year (57.9) and have stayed in their positions for a shorter time--8.3 years versus 9.8.

Thirteen CEOs left their posts at government/non-profit entities. Retailers had nine CEO departures last month, including CEO changes at RadioShack, Toys 'R Us, Michael's Stores, Ulta and REI.

The circumstances of their departure varied. Most (32) resigned and 21 others retired. Another 19 CEOs left their post, but stepped down into other positions within the company, usually as a board chair or director. Year-to-date departures were led by resignations (62), retired (45), stepped down (44), obtained new position in another company (31), and interim period ended (21). Five left because of mergers or acquisitions.

Youth Advocates At GAC Aim To Educate 500K Students

 Permanent link
WASHINGTON (3/15/13)--The National Youth Involvement Board is asking credit unions to report their financial education efforts online to help surpass its 2012-2013 goal of reaching 500,000 students nationwide.

Credit unions can report their activity on the NYIB website. Use the link.

NYIB leaders carried their youth outreach message to the Credit Union National Association's 2013 Governmental Affairs Conference last month in Washington, D.C. Their focus was to increase awareness, generate support from legislators, and urge credit unions to surpass the 413,106 students they reached with financial education presentations during the 2011-12 school year.

NYIB leaders also addressed state league and association gatherings, presented a session for The Cooperative Trust, co-staffed the National Credit Union Foundation (NCUF) booth, and attended visits on Capitol Hill, while at the GAC.

NYIB Chair Julie McLean emphasized that the work reported to NYIB by 115 credit union educators in 31 states deserves recognition in meetings with legislators and others, because it underscores credit unions' commitment to all young citizens. However, while impressive, these numbers do not provide the full measure of credit unions' efforts, McLean said.

Data collected by the NYIB are also shared with the NCUF, and with credit union leagues and other entities as requested.

Also, NYIB announced its annual conference will meet July 29-Aug. 1 in San Diego. The NYIB conference includes recognition of top presenters and ranking of states in outreach, quantified exclusively by data reported through the NYIB website.

To reach youth in their community, credit union educators can create a "MyNYIB" profile and obtain access to the classroom reporting feature, a searchable document sharing tool, and the ability to upload their own news and success stories. Use the link.

NCUA OKs Alloya/CenCorp Merger, Members Will Vote April 4

 Permanent link
WARRENVILLE, Ill.  (3/15/12)--The National Credit Union Administration Thursday approved the merger application between Southfield, Mich.-based CenCorp and Alloya Corporate FCU.

The announcement was made by Alloya CEO Charles W. Furbee in a letter to members on the Warrenville, Ill.-based Alloya's website.

"CenCorp members will now vote on the merger," he said, adding the vote is set for Thursday, April 4. It is anticipated that the merger would occur by the end of April.

"Assuming a positive vote from CenCorp members, this merger will create improved value for the memberships of both corporates in terms of enhanced strength and access to additional products and services," he said in an e-mail to News Now.

CenCorp CEO Bill Walby, who will become CEO of the new organization, said in an e-mail statement to News Now that "the merger will build value through increased scale, market synergies and enhanced capabilities for the long term, all of which would occur faster than either corporate could generate on its own."

"CenCorp members would convert to Alloya systems later this year, with minimal impact to current Alloya members," said the letter on the website. "Some anticipated system changes to accommodate CenCorp practices will result in enhancements to our systems."

The letter also noted  the merger would build value through "increased scale, elimination of redundancies and additional financial strength." Alloya has more than $1.4 billion in assets, and CenCorp has more than $1.37 billion, Alloya told News Now.

The corporates will discuss the merger "at a high level" during the next transparency webinar, to be held Thursday at 11 a.m. EDT/10 a.m. CDT, Furbee said.

The combined corporate will have a membership of nearly 20% of the nation's credit unions. It will retain Alloya's federal charter and name. Alloya will remain headquartered in Warrenville, Ill., and operate from three locations: Warrenville; Albany, N.Y.; and Southfield, Mich.

Board and committee representation will reflect the combined membership, with the initial board including seven members of Alloya's board and four members of CenCorp's board.

Sinek, Li, Shelley Headline 2013 World CU Conference

 Permanent link
MADISON, Wis. (3/15/13)--The World Council of Credit Unions (WOCCU) has tapped three speakers to headline the 2013 World Credit Union Conference, July 14 -17, in Ottawa, Canada: Simon Sinek, Charlene Li and Ian Shelley. 

The international credit union system educational and networking event will host more than 2,500 credit union executives and volunteers from more than 50 countries. The conference will focus on mobile banking, social media and corporate leadership.

The keynote speakers include:

  • Simon Sinek, corporate leadership strategist, who will speak about corporate leadership strategy July 17. Author of Start With Why: How Great Leaders Inspire Everyone to Take Action, Sinek is known for his theory of the "Golden Circle"--a natural pattern grounded in the biology of human decision-making that explains why some people and organizations are more inspiring than others. Sinek teaches graduate-level strategic communications at Columbia University.
  • Charlene Li, New York Times best-selling author and social media and technologies expert, who will cover social media and the financial sector on July 16. Li is author of Groundswell and Open Leadership. The founder of the Altimeter Group is recognized as an expert on social media and technologies. As former vice president and principal analyst at Forrester Research, Li was named one of the 100 most creative people in business by Fast Company.
  • Ian Shelley, information technology and mobile payments expert and former KPMG partner, who will discuss the future of mobile banking technology on July 15. Shelley's 20 years of experience include work with credit unions, banks, insurance agencies and regulators in Australia, Bermuda, Canada and the United Kingdom.
 Bonus networking and educational sessions include:

  • The Global Women's Leadership Forum, the annual networking and educational gathering of the Global Women's Leadership Network, the peer-to-peer credit union women's leadership organization. The network will meet July 14, just prior to the conference.
  • WOCCU's Young Credit Union People (WYCUP) porgram, the annual educational and networking event for credit union professionals age 35 and younger. Five scholarship applicants will receive all-expense-paid scholarships to the 2014 World Credit Union Conference in Australia. The WYCUP program begins July 14 and runs concurrently with the conference.
  • The Worldwide Foundation for Credit Unions Golf Tournament, a fundraising and networking event at the Loch March 18-hole golf course on July 13.
  • Bacon, Eggs and Business Experts, a two-part breakfast series with insights and expert advice from two top business authors.
At more than 30 breakout sessions, thought leaders from around the world will present on topics in five separate educational tracks--leadership and strategy, technology, international credit union experience, advocacy and governmental affairs, and innovative solutions.

Attendees also can visit some of Canada's most successful Ottawa credit unions, which are known worldwide for their technological achievements and youth outreach success, WOCCU said.

For more information, use the link.

NACUSO Collaboration/Innovation Awards Nominations Due March 21

 Permanent link
NEWPORT BEACH, Calif. (3/15/13)--The National Association of Credit Union Service Organizations announced that nominations for its 2013 Credit Union Collaboration and Innovation Award and the 2013 Credit Union Service Organization Collaboration and Innovation Award are being accepted. The deadline for nominations is Thursday.

"The criteria for both awards were selected to recognize those organizations that are making a significant difference and contribution to our industry," said Jack Antonini, NACUSO president/CEO.

"While the credit union industry faces diverse challenges, there are many people who are engaging in the critical, creative thinking necessary to find solutions to these issues," he added. "We want to recognize and celebrate those CUSOs that demonstrate an exemplary ability to create and implement solutions and those credit unions that use the CUSO model to implement innovative, collaborative solutions to better serve their members."

The awards will be presented April 18 during the 2013 NACUSO Annual Conference in Las Vegas. 

The  CUSO award recognizes organizations that have leveraged the collaborative model to bring value to the industry, its owners and credit union members. In its 15th year, the award has a history of spotlighting CUSOs that continue to play a key role in the industry.

Last year, NACUSO expanded its program to recognize a credit union demonstrating the successful use of a CUSO collaborative model to serve its membership's financial needs. The award aims to showcase a credit union that exhibits leadership in using the CUSO collaborative model to deliver value to the credit union and its members.

Criteria include demonstrating how the credit union's business strategy leverages CUSOs to create value for the credit union and/or its members. Implementation and execution of the CUSO business model and results, outcomes and performance generated by the credit union also are considered.

Send nominations to NACUSO, 3419 Via Lido, PMB #135, Newport Beach, CA 92663, or to shawna@nacuso.org.

For more information, call 888-462-2870 or use the link.

Applications for Biz Kid$ Fin Ed Grants Due March 31

 Permanent link
MADISON, Wis. (3/15/13)--Applications for Biz Kid$ Financial Education Grants from the National Credit Union Foundation are due March 31.

The application can be found online. Use the link.

"The Biz Kid$ program and companion curriculum is a great vehicle for credit unions to utilize to improve the financial literacy skills of youth in the communities they serve," said Danielle Brown, NCUF Biz Kid$ program coordinator.

Biz Kid$ is a financial literacy initiative that teaches kids about money and business. The initiative includes an award-winning TV series, free classroom curriculum, outreach activities, and a website targeting children 9-16 years old.

NCUF is responsible for the fundraising and outreach for the program, and a coalition of over 290 credit unions and affiliates from across the country have helped exclusively fund Biz Kid$. The primary goal of the Biz Kid$ financial literacy initiative is to teach kids from upper elementary through high school to understand and incorporate the skills they need to successfully manage their financial lives.

The goal of the grants is to extend the reach of the series beyond broadcast into the community. 

The grants may be used to fund programs that improve the financial education of youth through the use of the Biz Kid$ program. Each project should create innovative and engaging activities incorporating Biz Kid$ materials. Funds may not be used as a cash donation to a third party.

Eligible applicants include credit unions, credit union service organizations, state credit union associations, state credit union foundations, and any other organizations owned or controlled by credit unions.

States Warn Investors About Securities Agency

 Permanent link
COLUMBUS, Ohio and MADISON, Wis. (3/15/13)--Financial institution and securities regulators from 16 states and five Canadian provinces sent alerts Thursday warning of an investment scheme where investors are told to wire money to Eastern Europe.

Credit unions may want to alert members to the scheme, which several state regulators say is illegal.

The Ohio Department of Commerce Division of Securities and the Wisconsin Department of Financial Institutions (DFI) are among the state regulators issuing warnings against a United Kingdom company called Inter Reef Ltd., doing business as Profitable Sunrise, and its operators,  owner Roman Novak and his brother Radoslav Novak. The entity operates through a website, profitablesunrise.com.

According to the Ohio division, which issued a notice order against the company, Ohio securities laws were violated. The division alleged the company has engaged in securities fraud, selling securities without a license and selling unregistered securities.

"Ohioans should be on guard and hold onto their wallets any time they hear of a no risk/high return investment," said David Goodman, director of the Ohio Department of Commerce, in a press release.

The company promises investors risk-free returns of 1.6% to 2.7% per day for periods ranging from 180 to 240 days, said Patricia Struck, administrator of the Division of Securities at the Wisconsin DFI. The DFI oversees state-chartered credit unions and other financial related institutions.

Struck advised investors to be "extremely wary of any offers" from the company. "The promises being made by this company appear to be in the 'too good to be true' category," she said.

Investors have been instructed to wire money to financial institutions in Eastern Europe, including one bank located in the Czech Republic.  The company's activities could be considered the sale of unregistered securities, which is illegal in Wisconsin, she said.

The Ohio Department of Commerce, which supervises credit unions and other financial institutions, noted the company's website also has a "referral program" where individuals can become regional representatives for an investment group, which includes trains of a pyramid scheme. The department said it was concerned that the businesses could be targeting religious-based organizations. The company's website includes Bible quotations and options for donating investment returns to charity.

Securities officials in North Carolina and South Dakota have issued cease and desist orders against Profitable Sunrise.

If credit union members report dealings with the company, they should contact their state's securities regulator. Also before investing, they should ask these questions:

  • Is the brokerage firm and salesperson licensed in the state?
  • Has any enforcement action been taken against them?
  • Has the security been properly registered with the state's securities regulator?

CU System Briefs (03/14/2013)

 Permanent link
  • LANSING, Mich. (3/14/13)--Michigan state-chartered credit unions' regulation, the Office of Financial and Insurance Regulation, or OFIR, will be renamed the Department of Insurance and Financial Services, or DIFS, effective Sunday, said OFIR's website. It regulates the state's financial industries, including credit unions, banks, insurance and mortgage companies.  Watch for its revamped website …
  • LATHRUP Village, Mich. (3/14/13)--Michigan First CU, based in Lathrup Village, Mich., is seeking its third Young & Free Spokester, announced President/CEO Michael Poulos. The winner will serve as spokesperson for the credit union's education-focused program for younger members for one year. The spokester will create daily blogs and weekly videos to encourage smart financial behavior, and participate in local events and presentations with the college age crowd throughout lower Michigan The person hired will get a $27,500 salary with an opportunity for a $5,000 bonus, an Apple MacBook Pro, and HD video camera and a smart phone, and enjoy the use of the Young and Free car.  Entrants must be 18 to 25 years old, able to work full-time and reside in metro Detroit from June 2013 to June 2014. Applicants should submit a 60-second video demonstrating why they should be the spokesperson and an entertaining blog on a financial topic. Entries are due by noon April 15. A public vote from April 16 to 25 will determine 10 finalists, who will be invited for a meet up event before the final decision …

CU Saves Member Thousands, Stops Fraudulent Check

 Permanent link
FARMERS BRANCH, Texas (3/14/13)--A Texas credit union office manager's vigilant eye stopped a fraudulent check and helped save a member thousands of dollars in potential losses.

The member received a cashier's check for $6,500 along with a letter informing her that she had been hired for a personal assistant position that would pay her $500 a week for working from home.  The member was instructed to deposit the cashier's check into her personal checking account so she could write personal checks for her new employer, the Texas Credit Union League reported (LoneStar Leaguer March 13). 

The woman made the deposit; however, she was not able to write personal checks for her new employer because she hadn't yet received her checkbook, Wendy McMillian, office manager at Shared Resources CU, Pasadena, Texas, told TCUL.

Although the cashier's check had a watermark, two signatures, a routing number and account number, McMillian noticed some red flags. The number sequence for the account number looked suspicious and there was no remitter on the check.

The credit union put a hold on the check, and, once confirmed, notified the member that the cashier's check was fraudulent.  The member arrived at the branch and showed staff the letter she had received from her "new employer."  The letter included several misspellings, McMillian said.

When the member phoned her "new employer" about the trouble with the cashier's check, he suddenly complained of a bad phone connection.

McMillian said she shared the story with the Texas league in hopes of preventing other unsuspecting credit union members from falling prey to similar scams.

Washington DFI Issues Interpretation On Two Rules

 Permanent link
OLYMPIA, Wash. (3/14/13)--The Washington Department of Financial Institutions (DFI) has issued what Northwest Credit Union Association Director of Regulatory Advocacy John Trull described as "favorable" guidance on two regulations impacting state-chartered credit unions.

"It's encouraging to see the positive working relationship we have developed with regulators continuing to develop, and we expect that relationship to continue to translate into better outcomes for credit unions," Trull said (Anthem Recap March 11) .

One of the clarification released last week related to credit unions' use of the terms "audit committee" and "supervisory committee." The other outlined credit unions' investment options and restrictions for funding employee-benefit obligations.

The terms "audit committee" and "supervisory committee" are seen as interchangeable for regulatory purposes as long as the committee is compliant with supervisory committee regulations, DFI Division of Credit Unions (DCU) Director Linda Jekel explained in a letter addressed to Trull (Anthem Recap March 11).

"The Division of Credit Unions is of the view that a state credit union may use the term 'audit committee' synonymously and in place of 'supervisory committee' in its bylaws as long as it complies with the same requirements for a supervisory committee contained in the Act and all applicable rules for a supervisory committee of a federally insured credit union," Jekel wrote.

The second letter was in response to an inquiry from Parker Cann, BECU's general counsel. State-chartered credit unions in Washington may fund employee benefit trusts with investments typically unavailable to credit unions, as long as those investments are not made by the credit union for its own financial gain. This gives state-chartered credit unions permissions already available to credit unions with federal charters, wrote Joseph Vincent, DFI's general counsel,

Vincent clarified that National Credit Union Administration (NCUA) regulations still apply, saying that "in making such investments, a state credit union is subject to all of the limitations set forth in the aforementioned NCUA regulations and other NCUA authority interpreting or applying those regulations."

New Lawsuit Takes Aim At ADA Accessibility Rule For ATMs

 Permanent link
ATLANTA (3/14/13)--A class action lawsuit filed in a federal court in Atlanta alleges that two bank branches do not meet the Americans With Disabilities Act (ADA) accessibility requirements for serving blind customers.

The suit was filed Feb. 28 by a law firm that represented plaintiffs in a number of the lawsuits filed over the past two years against credit unions and banks about missing ATM fee signage that allegedly violated the Electronic Funds Transfer Act (EFTA). The volume of those lawsuits prompted the Credit Union National Association to seek legislation to remove the signage requirement, which President Barack Obama signed into law at the end of 2012.

CUNA is warning that, if the EFTA cases are any guide, this lawsuit could be the start of a trend as plaintiffs' lawyers seek out ADA violators. CUNA recommends that credit unions use this case as an opportunity to check their compliance with ADA regulations concerning ATMs. (For more information on how to comply with these regulations, use the resource links to CUNA's compliance e-Guide, CompBlog and Credit Union Magazine at the bottom of this article.)

In the suit, a blind woman alleges she was denied access at two ATMs owned and operated by Winston-Salem, N.C.-based Branch Banking and Trust Co. (BB&T) in Snellville, Ga., and Lilburn, Ga. The machines had no voice-guidance feature, included no Braille instructions for initiating speech mode, and the function keys did not have tactile symbols required under the ADA.

The complaint states that "if a given ATM does not include the accessibility features that are mandated by federal law, blind consumers like plaintiff cannot use the ATM independently and are thus faced with the prospect of having to share private banking information with other individuals to complete a banking transaction at the ATM."  A similar invasion of privacy argument was used in several earlier ADA lawsuits against credit unions and banks. 

The complaint noted that on a previous occasion when the plaintiff requested assistance in making an ATM withdrawal and provided her personal identification number, her ATM card was stolen and her account looted.

"Though defendant has centralized policies regarding the management and operation of its ATMs, defendant does not have a plan or policy that is reasonably calculated to cause its ATMs to be in timely compliance with Chapter 7 of the 2010 Standards," said the court document.

The lawsuit seeks an injunction and payment of attorney's fees.

Size Has Nothing To Do With Tax Status, CU Tells Oregon Public Broadcasting Debate

 Permanent link
CORVALLIS, Ore. (3/14/13)--"Size has nothing to do with [credit unions'] tax exemption; it's all about structure,"  said Scott Burgess, CEO of Beaverton, Ore.-based Rivermark CU, in a debate aired on Oregon Public Broadcasting's "Think Out Loud."

The show featured Burgess and Lewis & Clark Bank Co-President/CEO Trey Maust discussing three bills in the Oregon legislature that would impose an excise tax on large credit unions as well as require Community Reinvestment Act-type disclosures from credit unions about their service to low-income residents.

"As credit unions, we're not-for-profit and member-owned financial cooperatives," Burgess said. "We're owned  and governed by members and don't have stockholders. We return our earnings to members through lower rates for loans, higher rates for deposits and no or lower fees."

The tax exemption has nothing to do with the type of products and services offered or the size of the credit union, "but everything to do with the not-for-profit, financial cooperative structure-- and we earn that every day."

Taxation "would be devastating to Oregon credit unions and ultimately to credit unions in the rest of the U.S.," Burgess said, adding credit unions "have done a wonderful job" of showing value in the services provided members.  "[Oregon] credit unions put $120 million back in the wallets of our 1.4 million members," he said. Credit unions  offer a choice and competition. "Just being out there and competing with banks has put money in the consumers' wallets."

Protecting and defending credit unions' tax exempt status is the No. 1 legislative priority for the Credit Union National Association for 2013.

The debate also centered on the CRA-type of requirements in two of the bills that would require disclosures. "Giving back to our communities and serving low- to moderate-income members is in our DNA," Burgess said.

He cited statistics that showed loans growing 11% at credit unions since 2007, while banks cut loans 4.2%. In 2005, according to Home Mortgage Disclosure Act data he cited, 66% of mortgage loans at credit unions were to low- to moderate income consumers, compared with 56% at other financial institutions.

The data show "that credit unions have already done an outstanding job" of service, and that passing the two bills would be "overregulation. It addresses a problem that doesn't exist" at credit unions, Burgess added.

Maust noted that community bankers, which act very similar to credit unions, get lumped in with big banks unfairly. When asked if credit unions are the correct target for the banking industry, he said that the priority should be reducing the concentration of assets in large institutions.

The show's website received several dozen comments, with nearly 73% favoring credit unions,  12% favoring banks and the rest making anti-bank statements without addressing credit unions.

To listen to the full report, use the link.

Sievewright: Technology Is a Loyalty Builder

 Permanent link
Credit unions can continue to capitalize on advances in payments technology, Mark Sievewright, president, credit union solutions, at Fiserv, told the New Jersey Credit Union League's first Executive Leadership Session of the year. (Photo provided by the New Jersey Credit Union League)  
HIGHTSTOWN, N.J. (3/14/13)--Statistics indicate that technology is a loyalty builder, and while credit unions have done a good overall job embracing that concept, there is room for improvement, a Fiserv executive told the New Jersey Credit Union League's first Executive Leadership Session of the year.

Although financial institutions have not been on the cutting edge of payments innovations, credit unions are doing a decent job with mobile banking and online banking, said Mark Sievewright, president, credit union solutions, at Fiserv (The Daily Exchange March 13).     

With the increasing availability of technology, financial institution interactions with members are not decreasing as one may expect, but rather increasing--although some face-to-face communications will be replaced technologically, Sievewright explained. 

The adoption of technology is uneven, with some credit unions describing the use of smartphones to deposit checks as "yesterday," while others view it is as ground-breaking, Sievewright said.

Credit unions can parlay technology into revenue by charging for services such as on online transactions and by using information provided by members for cross-selling and making referrals, he said.

New England Leagues Name 13 Rising Star Award Recipients

 Permanent link
MARLBOROUGH, Mass. (3/14/13)--Thirteen people have been named Rising Star recipients in the credit union industry by the Massachusetts Credit Union League, New Hampshire Credit Union League, Credit Union Association of Rhode Island, and CenterPoint magazine.

New England credit unions were asked to nominate individuals during the past few months.

The 2013 Credit Union Rising Stars award recipients, said the Massachusetts league, are:

  • Sean Capaloff-Jones, UMassFive College FCU, Hadley, Mass.;
  • Ellen Coughlin, Leominster (Mass.) CU;
  • Laura Cummings, AllCom CU, Worcester, Mass.;
  • Vyrick Eng, Jeanne D'Arc CU, Lowell, Mass.;
  • Bryce Jackson, Navigant CU, Smithfield, R.I.;
  • Anne Labeta, CPCU CU, Somerville, Mass.;
  • Traci Michel, Metro CU, Chelsea, Mass.;
  • Elizabeth Mulcahy, Jeanne D'Arc CU;
  • Tim Mullen, Bellwether Community CU, Manchester, N.H.;
  • Mychelle Phillips, Leominster CU;
  • Maria Porto, Hanscom FCU, Hanscom Air Force Base, Mass.;
  • Joshua Rakiey, Hanscom FCU; and
  • Debra Lee Surface, St. Jean's CU, Lynn, Mass.
The individuals will be honored April 24 at The Great New England Credit Union Show, during a special "Credit Union Rising Stars Awards Breakfast" sponsored by Macpage.

Illinois League Convention To Host Young Professionals

 Permanent link
NAPERVILLE, Ill. (3/14/13)--The Illinois Credit Union League will once again welcome a group of young professionals to its annual convention, April 18-20.

The initiative is a spinoff of the league's inaugural effort to attract young professionals to last year's conference in partnership with The Cooperative Trust (formerly The Crash Network).  The idea is to create a low-cost event within ICUL's major credit union conferences and provide networking opportunities for credit union employees under age 30. 

An application process open to young professionals 30 and younger took place last month to determine the recipients.

Sponsored by ICUL, the program will give young credit union professionals the opportunity to participate in the event by attending the full convention and additional mentor sessions with industry thought leaders while building relationships with other young credit union professionals.  After a welcome on Thursday prior to the 83rd Annual Convention kick-off, the group will attend several sessions, a lunch and a dinner.

Mark Sievewright, president of Fiserv Inc.'s credit union solutions, will present a keynote address on "How the Future of Credit Unions Will Evolve in the Next 20 Years." He will also present a breakout session, "Competing to Win:  Seven Strategies for Seven Trends in U.S. Financial Services." Bill Hampel, Credit Union National Association senior vice president of research and chief economist, is also among the conference speakers.

CU System Briefs (03/13/2013)

 Permanent link
TRENTON, N.J. (3/13/13)--New Jersey Gov. Chris Christie has nominated Lourdes Cortez, president/CEO of North Jersey FCU in Totowa, N.J., with $214. 6 million in assets, to the William Paterson University Board of Trustees. Founded in 1855 as Paterson City Normal School to train teachers for Paterson public schools, the university became a liberal arts school in 1967. It now serves more than 11,500 students through five colleges, with more than 250 undergraduate and graduate academic programs and 400 full time faculty members. Named for New Jersey's second governor, the university's 370-acre campus is located in Wayne on the former family estate of Garret Hobart, the 24th U.S. vice president (The Daily Exchange March 12) ...

Alabama Shared Branching Network To Pay CU Dividends For 3rd Year

 Permanent link
BIRMINGHAM, Ala. (3/13/13)--The Credit Union Service Centers (CUSC) of Alabama will pay a shareholder dividend for the third consecutive year. The 2013 payout will be the largest to date.

"It's important to the CUSC board to reward participating credit unions with this rebate," said CUSC Chairman Patrick La Pine. "Shared branching is one of the unique ways that credit unions are different from other financial institutions. We have seen more transactions and more growth within the network. The board hopes more credit unions will see this success and help provide members with the convenience they desire."

The CUSC board approved a Patronage Rebate Program of 60% of 2012 net income before taxes. That results in participating credit unions receiving a 20% increase in the amount of the rebate from 2012. The exact amount of the rebate will be based on the credit union's percentage of total transactions during the past year.

CUSC of Alabama currently has 131 service centers statewide, which include eight new shared branching locations that were opened throughout Alabama in 2012. CUSC provides its member credit unions with marketing materials and a promotional video within its website.

A shared branching message is also a part of the League of Southeastern Credit Unions--which represents credit unions in Alabama and Florida--Cooperative Image Campaign, which has run in 2011 and 2012.

Catalyst CEO Reports On Year One At Helm

 Permanent link
PLANO, Texas (3/13/13)--It's been about 18 months since Catalyst Corporate FCU came into being through the merger of Georgia Corporate and Southwest Bridge Corporate and about a year since Kathy Garner took the reins as president and CEO. She used the occasion of that anniversary to send out a scorecard of commitments made to member credit unions and commitments that have been kept.

"Looking back, Catalyst Corporate had a lot to prove a year ago. When we asked credit unions to trust us with their capital, we made a lot of commitments. We have kept each of those commitments," Garner said in a release.

"When I came on board a year ago, my first responsibility was to ensure that Catalyst Corporate was operating safely and soundly by executing the business plan that was presented to capitalizing credit unions," Garner said. "The Catalyst Corporate team has done that, meeting or exceeding all regulatory capital requirements, including retained earnings, prior to (the National Credit Union Administration's) deadlines."

Garner said Catalyst Corporate's retained earnings ratio at Dec. 31, 2012, was 0.84%, compared to the 0.45% that corporate credit unions are required by NCUA to meet by October of this year.

Another metric that Catalyst Corporate tracks is a "coverage" ratio that measures the percentage of the corporate's expenses covered by fee income. While there is no regulatory requirement regarding such a ratio, Garner said it is "an important measure of internal efficiency." An ability to cover expenses through fee income means less reliance on balance sheet activity for income and it means reduced exposure to risk, Garner says. At Catalyst, the ratio generally ranges between 75% and 85%, she reports.

Garner stakes claim to financial transparency as a hallmark of her first year as chief executive. She said it has been achieved through frequent and varied communications with members. They have ranged from the traditional member communications, to such things as a new "regular member update from the CEO," a boost in senior management's in-person contact with credit unions, and installation of new processes for obtaining member feedback, such as its Catalyst Councils and member surveys.

The increased communications has had positive results, Garner says, citing an example of a service that resulted from a member recommendation--Catalyst Corporate's quarterly Due Diligence Report, which pulls together all of Catalyst Corporate's financial statements and supporting documentation in one location.

"Whether you're a member credit union looking to compile a board report or a non-member credit union evaluating Catalyst Corporate's performance, you can find all the information you need on our due diligence web page," she said.

Garner says if anyone is looking for label to affix to her first year as CEO, it could be called a year of integration. Following on the heels of the merger between its own legacy corporates, Catalyst Corporate completed consolidations with both Western Bridge Corporate FCU and First Corporate CU. Garner said tight timeframes made for an intense year, but the broader membership base will benefit all.

Audit Will Delay HarborOne Conversion Vote Results By 10 Days

 Permanent link
BROCKTON, Mass. (3/13/13)--About 115 members of HarborOne CU in Brockton, Mass., attended a special meeting Monday evening to vote on whether to convert to a bank. However, the outcome will not be known for roughly 10 days. 

An independent inspector needs to tally the ballots before the vote can be finalized, according to James Rice, HarborOne vice president of marketing. It is mandated that the inspector complete the tabulation within 10 calendar days of the vote (Banker and Tradesman March 12).

Only about 15 people voted at Monday evening's meeting, Rice told the publication. However, he could not say how many total votes were cast because members were allowed to send in their  ballots by mail or else bring their completed ballots to any one of HarborOne's 14 branches, he added.   

The conversion, if approved, would take effect by the end of 2013 (News Now May 8).

The Credit Union National Association and the Massachusetts Credit Union League have said a credit union charter is the best option for credit union members, and any decision on converting should be in the members' best interest (News Now Feb. 17).

Plans to pursue conversion were announced by the $1.9 billion asset credit union in March 2012. HarborOne said that converting to a bank charter would allow it to raise more capital, such as through a stock sale; increase lending, especially with business loans; and expand its customer base into Boston. It also said it cannot open a branch in Boston because it is restricted to serving four counties in Southeastern Massachusetts.

Mazuma CU Minority Business Client Wins Awards

 Permanent link
KANSAS CITY, Mo. (3/13/13)--Minority-owned Alpha Energy and Electric became a Mazuma CU business resources partner in 2009, after being turned away three times by different banks, when Mazuma came through by providing business loans and deposit accounts. The company now has won several awards.

"Mazuma is honored to be a small part of Alpha Energy's success," said Brandon Michaels, Mazuma president/CEO. "After being declined by numerous area banks, Mazuma simply gave a valuable, talented community asset the opportunity booster-shot to succeed." 

As a corporate sponsor of the Mid-America Minority Supplier Development Council (MSDC), Mazuma CU in  Kansas City, Mo., with $477 million in assets, saw what can be accomplished when its business resources partner Alpha Energy and Electric, Inc., Kansas City, Mo, won the MSDC 'Supplier of the Year' Award (Category II--Annual Sales between $1 million to $10 million).

Also, Alpha E&E received The U.S. Small Business Administration 2012 Minority Small Business of the Year (Kansas City District) Award. The announcement came at the 27th Annual Mid-America MSDC Award Luncheon held Jan. 30 in Kansas City, Mo. 

Alpha Energy and Electric provides innovative design-build approaches and is a local leader in green energy for some of the Midwest's highest profile clients, including the Sprint Center Arena in Kansas City, Missouri, Whiteman Air Force Base in Knob Noster, Missouri, the Robert Denney Federal Courthouse in Lincoln, Neb., and Kansas City's major league sports venues Kauffman Stadium and Arrowhead Stadium.

"In the span of a few short years, Alpha Energy and Electric grew from a tiny outfit operating in a two-room office into a company that contributes to the region's largest construction projects," said Alpha Energy and Electric Chairman and CEO Ike Nwabuonwu. "All of our clients counted on Alpha Energy and Electric's professional expertise. When our growth spurt made day-to-day finances a little tougher to achieve, we counted on Mazuma CU, and they were there for us when typical banks ran the other way.

"Without a partner like Mazuma, Alpha Energy and Electric would not necessarily be receiving the accolades our small minority business enjoys, today," he added." Frankly, our success is also Mazuma's success; we absolutely treasure our relationship."

"It's incredibly gratifying to work with and witness a company like Alpha Energy and Electric grow. All we did was add a little financial fertilizer and water the lawn," said Lisa Snead, Mazuma's vice president of business partnerships. "Never mind the recession. It was the vision, commitment and caring of their fearless principles, chairman and CEO Ike Nwabuonwu and President Gabriel Okafor, which made Alpha Energy reach this new plateau. The recognition of our city's leaders and Alpha Energy's general success is nothing short of inspirational."      

The Credit Union National Association and credit unions reintroduced in Congress last month legislation to raise credit unions' member business lending cap to 27.5% of total assets, up from the current 12.25%. Doing so would generate $14.5 billion available for member business loans--and increase jobs by 158,000 in the first year without costing the taxpayer, according to new statistics from CUNA.

National Journal: Latino Community CU Serves Immigrants

 Permanent link
DURHAM, N.C. (3/13/13)--By understanding the special financial needs of immigrants--many of whom only speak Spanish fluently--Latino Community CU (LCCU) based in Durham, N.C., and with a total of 10 branches in six North Carolina cities, is a standout financial institution in a changing economy, notes the prominent Washington publication National Journal in a feature story this week.

The article, which included background information provided by the Credit Union National Association, explained that the $115 million asset LCCU has many members who don't speak fluent English, live paycheck to paycheck and have never opened a deposit account.

Because of a crime wave in Durham in the late 1990s in which muggers targeted Latinos because they tended to carry large amounts of cash in lieu of any financial accounts, LCCU was initially chartered as a response to that problem. Nationwide, roughly 20% of Latino households don't have a deposit account, according to the Federal Deposit Insurance Corp. 

In its eight years of existence, LCCU, which serves more than 54,000 members, has seen robberies decline by 4.2% each time it has opened a new branch, according to a University of Virginia study, said the National Journal. Also in that time period, property values in host counties increased nearly 4%, constituting $9.8 billion in overall property-value growth.

By opening accounts at the credit union to make deposits, many members now are moving into  the ranks of the middle class, Erika Bell, LCCUs vice president of strategy and service, told the publication. "They now own a home, they have gotten into the habit of budgeting and saving, and have kind of been integrated into the mainstream financial system," she added.

LCCU has contracted with the well-established State Employees' CU in Raleigh, N.C., with $25.1 billion in assets, for its bookkeeping needs and some other financial management issues so it can concentrate on front-office outreach, the National Journal said.

The article is part of a series on "The New Economy," a joint project of National Journal and The Atlantic magazines.

To read the article, use the link.

Top CU Award Winners Announced By PCUA

 Permanent link
HARRISBURG, Penn. (3/13/13)--The Pennsylvania Credit Union Association has announced the winners of some of its highest honors, which include the Desjardin Youth Financial Education Award, the Louise Herring Philosophy in Action Member Service Award, and the Dora Maxwell Social Responsibility Community Service Award.

The awards are named after some of the most prominent names in credit union history. Desjardin, of course, was the co-founder of the Caisses Populaires Desjardins in Canada, a forerunner to North American credit unions. The award honors a core value of credit unions: To assist their members with a better understanding of their finances so that they can make the best decisions possible with their hard-earned money.

The PCUA winners of the first place Desjardins Youth Financial Education Award in their asset categories are:

  • HealthCare First CU, Johnstown--$50 million to $150 million in assets;
  • Service 1st FCU, Danville--$150 million to $500 million in assets; and
  • TruMark Financial CU, Philadelphia region, more than $500 million in assets, and honorable mention for that asset category, Clearview FCU, Moon Township.
The winners of the Louise Herring Philosophy in Action Member Service Award are:
  • First Capital FCU, York--$50 million to $250 million in assets; and
  • TruMark Financial CU, Philadelphia region, for $1 billion and more in assets.

The first place winners of the Dora Maxwell Social Responsibility Community Service Award are:

  • Keystone United Methodist FCU, Cranberry Township--$5 million to $20 million in assets;
  • HealthCare First CU, Johnstown--$50 million to $100 million in assets;
  • Tri County Area FCU, Pottstown--$100 million to $200 million in asset;
  • Merck Sharp & Dohme FCU, Chalfont--$200 million to $500 million in assets, and honorable mention in that category--Service 1st FCU, Danville;
  • For $1 billion and more in assets, first place winner is TruMark Financial CU, Philadelphia Region, and honorable mention goes to American Heritage FCU, Philadelphia; and
  • The Chapter award goes to the York Chapter.

The Dora Maxwell Award is part of a national recognition program to honor credit unions for their outstanding efforts in community projects and activities. The Louise Herring Award for Philosophy in Action was established in 1990 to commend credit unions that make exceptional efforts to include credit union philosophy in their daily operations and member service.

The PCUA said the awards will be presented on Friday, May 17, at its Annual Convention in Hershey.

CU System Briefs(1)

 Permanent link
WOODBURY, Minn. (3/12/13)--Arnold Paulson, president/CEO of the North Dakota Credit Union and Affiliates from 1973 to 1994, died Wednesday in a Woodbury, Minn., hospital. Paulson, age 84, of Woodbury, retired on Feb. 1, 1994, and was interviewed at the time. When asked what his wish for credit unions in the future was, Paulson replied: "I would wish that credit unions would become the premier provider of financial needs for all people. This will entail getting the message across to the world that our special status  is not that we are limited as to who we serve, but that we are in the business of helping people, and that includes everyone." His credit union career continues to be exemplified and honored by a scholarship fund which grants an award to an honored recipient to attend the annual Credit Union Association of the Dakotas' summit--thereby continuing the recipient's credit union education. Visitation will be held Sunday from 4-6 p.m. at the Furness Funeral home in Clark, S.D. Visitation will continue on Monday morning after 9:30 a.m. in the St. Paul Lutheran Church in Clark, S.D., with funeral services being held at 11:00 a.m. Furness Funeral Home of Clark, S.D., is serving the family. There is an on-line registry at http://www.furnessfuneralhome.com ...

Wright-Patt CU Adds 100-plus Jobs

 Permanent link
FAIRBORN, Ohio (3/12/13)--After adding 49 jobs in 2012, Wright-Patt CU, Fairborn, Ohio, plans to add another 68 positions this year, helping its local economy.

The hiring is primarily driven by an increase in business at the credit union's mortgage lending lending subsidiary, myCU mortgage, Doug Fecher, president/CEO of the $2.5 billion credit union, told News Now Monday. Fecher estimates that one-third to a half of the new jobs will be credit unions positions leased to the subsidiary.

Last week, the National Credit Union Administration reported that  credit unions posted $8.5 billion earnings for 2012, highest figure ever for the credit union industry, and a 36.1% increase from 2011's earnings total of $6.3 billion. Total credit union assets increased by $60 billion in 2012, taking federal credit union assets across the $1 trillion mark.

The economy in the Dayton, Ohio, area has been relatively flat, Fecher said. However, the credit union is affiliated with the Wright-Patterson Air Force base, which has "had a lot of strength." Fecher said."Some of the hiring is catch our breath and get the staff to reflect the size of the credit union," Fecher said. "We've been growing members at about 10% a year for the past three years."

The new jobs will be added across several areas, including information technology, lending, accounting, collections and branch staffing, Fecher said

Wright Patt plans to open two branches in 2013 and three to four more in 2014, if business conditions allow for it, he added.

The new branches will deploy video technology that allows tellers to serve members in multiple branches from a centralized location.

"This allows the tellers to be virtually anywhere they are needed without getting in their car and traveling," Fecher said. "It creates great efficiencies for us."

EPL To Launch Health Insurance Exchange

 Permanent link
BIRMINGHAM, Ala. (3/12/13)--EPL Inc., a credit union service organization that provides technology solutions for credit unions, will launch in April what it said is the first private health insurance exchange for credit unions and their members.

.

The web-based exchange, called the Credit Union Exchange Blueprint, will offer a portal through which credit unions and their member can access information on health insurance providers and enroll in coverage plans. Members also can access a call center staffed with licensed representatives.

Private and public healthcare insurance exchanges are being developed in support of the Affordable Care Act. The exchanges allow employers and consumers to compare the costs and coverages of health insurance plans.

"Over the next couple of years, 150 to 180 million people insured by employer-employee relationship will be purchasing insurance on their own," Wayne Benson," EPL president/CEO told News Now. "With that, we wanted to create a product and resource that credit unions could use to position themselves in this chaotic new world. We want credit unions to be part of this conversation."

Credit Union Exchange Blueprint was developed with Health Partners of American, an employee benefits administrator.

"We believe it absolutely will be a differentiator for credit unions," Benson said. "It will build another relationship with the credit unions to the member and it will also create another revenue stream for the credit union."

CUNA's Gentile Highlights CU Membership Value on Bloomberg Radio

 Permanent link
WASHINGTON (3/12/13)--Credit unions are a good deal for all Americans and there is a credit union for everyone, Paul Gentile, executive vice president of strategic communications and engagement for the Credit Union National Association, told Bloomberg Radio Monday.

"Not everyone can join each credit union, but there is credit union for everyone, and to find one, all a person has to do is go to aSmarterchoice.org and answer three simple questions," Gentile said.

 

When asked about the difference between credit union and banks, Gentile explained that credit unions are member-centered financial institutions that have no shareholders to satisfy the way banks do, so benefits flow directly to credit union members, providing them more favorable terms on loans and interest rates.  

This was especially true during the financial crisis, he added. "Credit unions continued to lend to meet consumer demand when banks did not," Gentile explained. "Two million people joined credit unions last year, and we want to see regulations loosened so we can lend more," he added referring to 1998 legislation that put in place a lending cap for credit unions.

CUNA and credit unions back legislation, reintroduced in Congress last month legislation, that would raise credit unions' member business lending cap to 27.5% of total assets, up from the current 12.25%. Doing so would generate $14.5 billion available for member business loans--and increase jobs by 158,000 in the first year without costing the taxpayer, according to new statistics from CUNA.

"We think increased lending by credit unions can really help the economy going forward," Gentile said.

Credit unions are financially strong enough to undertake more lending because they have a less-than 2% delinquency rate nationwide, and they have more than 10% in capital and are well-positioned to meet loan demand, Gentile said in response to Bloomberg questions.

South Carolina League Chapters Recognize Emerging Professionals

 Permanent link
COLUMBIA, S.C. (3/12/13)--Five South Carolina regional chapters of credit unions have selected their respective candidates for the Second Annual South Carolina Credit Union League Palmetto Protégé Competition, which recognizes emerging professionals and supports the employment and membership opportunities credit unions provide.

"The Palmetto Protégé Competition showcases some of our brightest emerging leaders," said Steve Fowler, SCCUL president/CEO. "This year's candidates provide a glimpse of our future and the quality of leadership to take South Carolina's credit unions to new levels of success."

The five finalists will vie for selection as the South Carolina Palmetto Protégé April 12 at the 2013 SCCUL Annual Meeting in Myrtle Beach.

Chapter winners in 2013 are:

  • Candice Brady, South Carolina State CU, Columbia, Columbia Chapter;
  • Amanda Crawford ,Carolina Foothills FCU, Spartanburg, Piedmont Chapter;
  • Will Crosswell, Palmetto First FCU, Florence, Pee Dee Chapter;
  • Allison Gilmore, ArrowPointe FCU, Catawba, Catawba Chapter; and
  • Stephanie Ownby, South Carolina FCU, North Charleston, Charleston Area Chapter.
Chapter candidates were judged on credit union knowledge, communication skills, personality, and professional appearance. Each candidate completed a standardized exam and chose a presentation topic from a league-approved list that includes credit union philosophy, economics, viability, activism and promotion.

The South Carolina Palmetto Protégé will serve as a peer advocate for credit unions and liaison to CU Forward: The Leadership Initiative--a group of forward-thinking, driven, cooperative and connected leaders, SCCUL said.

Responsibilities for the Palmetto Protégé coordinated by SCCUL will include:

  • Presentations at each of the state's five chapters on his or her background, experience, CU Forward, and the Palmetto Protégé program;
  • Participation in the SCCUL Leadership Conference as secondary presenter and CU Forward advocate;
  • Liaison to CU Forward Roundtables held during his or her term as Palmetto Protégé; and
  • Regular contributions via social media including the SCCUL Facebook page.
An immediate benefit to the South Carolina Palmetto Protégé is first choice of developmental scholarships.

Alkami gets CUNA Tech Council Best of Show

 Permanent link
MADISON, Wis. (3/12/13)--The CUNA Technology Council presented its Best of Show Award to Alkami for its Online Banking Suite and Online Relationship Banking Platform.

The CUNA Technology Council presented its Best of Show Award to Alkami at CUNA's 2013 Governmental Affairs Conference last month. From left, Heather Moshier, CUNA Technology Council chairman and executive vice president of information technology, San Diego (Calif.) County CU; Tim Kelly, senior sales executive, Alkami; Joey Zollinger, director of product management, Alkami; Chad Graves, CUNA Technology Council second vice chair and senior vice president of information technology, Ent FCU, Colorado Springs, Colo.; Bill Cheney, CUNA president/CEO; David Rohn, vice president, CUNA Councils. Not pictured: Guy Russo, chief information officer, CommunityAmerica CU, Lenexa, Kan., and Stephen Bohanon, president, Alkami. (CUNA photo)
The award was presented at the Credit Union National Association 2013 Governmental Affairs Conference, held Feb. 24-28, in Washington, D.C.

"Alkami is a technology innovator in the space for building member relationships through the online channel," said Heather Moshier, council chair and executive vice president of information technology for San Diego County CU in presenting the award. "Alkami's integrated content management system allows financial institutions to leverage their online platform to build a deeper relationship with their customers."

Since 2001, the CUNA Technology Council has presented the Best of Show award to the exhibitor that demonstrates a commitment to delivering technology that will further growth of products and services in the credit union marketplace. Vendors' products are evaluated according to affordability, the benefit to credit unions and their members, a commitment to open standards, currently in use, and health of the company.

Ohio League Work Group Looks At State Budget Impacts

 Permanent link
COLUMBUS, Ohio (3/12/13)--The Ohio Credit Union League's State Budget Impact Work Group (SBIWG) is looking to identify the potential impact of a proposed Ohio state sales tax expansion on credit unions' bottom lines, and is preparing for the fight to uphold the tax status for state-chartered credit unions.

The group of 16 Ohio credit union leaders and league staff--in a meeting this week--began working through the several taxes that credit unions and consumers would face, and researching the bottom-line impact, the league said (eLumination Newsletter March  6).

League staff are monitoring Ohio State House committee hearings on the proposed biennium state budget for greater clarity and detail, especially regarding which financial institution "service charges" would require credit unions to collect sales tax from members and remit it to the state.

Gov. John Kasich last month officially proposed the Ohio biennium budget, which expands the products and services subject to sales tax, and lowers the overall rate to 5% from 5.5% (eLumination Newsletter Feb. 6).

"The formation of the SBIWG was a response by the league to understand the true impact of the governor's proposed sales tax expansion--on credit unions," Patrick Harris, league media and public relations director, told News Now. "Our credit union leaders are our best resource to inform us and guide us during the budget process, and we have a strong group leading the SBIWG.

"Their charge will be to provide direction and assistance for the Ohio Credit Union League's state budget advocacy response game plan, and in the process, identify impacts of the proposed expansion of the state sales tax on credit union bottom lines," he added.

Regarding the state budget process, more than 50 witnesses testified last week, with a large majority opposing the proposed sales tax provisions or voicing concerns, Harris said. Interested parties testifying included the Ohio Society of Certified Public Accountants, the Ohio Auto Dealers Association, the Ohio Association of Realtors and the Ohio State Bar Association.

As more information becomes available, the league said it will share it and lead the charge for grassroots actions when needed.

Paper: Consumers Using Tablets For Fin Services

 Permanent link
BROOKFIELD, Wis. (3/11/13)--Consumers are using their tablets to access financial services. However, to take advantage of the opportunity credit unions must align their offerings with the ways in which members use the devices, according to a new whitepaper from Fiserv Inc.

Tablet ownership is increasing, with nearly half of U.S. households having Internet access expected to own at least one tablet by the end of 2013, said the research consulting firm Frank N. Magid Associates. Nearly half of tablet owners have used tablets to access their financial institutions' banking services, and almost two-thirds of future tablet owners would like to do so, according to the 2012 Fiserv Consumer Trends Survey.

Instead of just helping consumers access a financial institution's online or mobile banking website designed for personal computers or smartphone users, tablet-specific banking apps should provide a rich experience that leverages touch navigation and makes use of the larger display than that provided on smartphones, the white paper said.

Tablets combine attributes of many Internet-enabled devices: Spacious screen displays akin to PCs, the always-on mobile connectivity of the smartphone and the touch-screen navigation of the latest e-readers. It is the combination of these attributes, in addition to the prevalence of tablet apps, that have inspired consumers to use tablets differently than other devices.

Financial institutions should provide an option designed specifically for the tablet channel, the paper said. The different attributes of the tablet channel shape the kinds of activities that consumers will prefer on the tablet. For example, the tablet lends itself to visual presentations of data, such as charts and graphs and the manipulation of that data with taps, swipes and pinches.

To accelerate support of the tablet channel, financial institutions should consider relying on an experienced technology provider for app development and comprehensive tablet-banking deployment, the paper concluded.

303 words

ATM Association Urges Networks To Delay Chip Card Migration

 Permanent link
SIOUX FALLS, S.D. (3/11/13)--The U.S. ATM Industry Association (ATMIA) urged a consistent approach to chip card migration (EMV) for ATM deployers and operators--specifically pertaining to the resulting imminent liability shift--in an open letter to Global Payment Networks.

ATM owners and operators will become responsible April 19 for foreign transaction fraud at any of the more than 425,000 U.S. machines. However, the retail merchant liability timeline extends to 2015, ATMIA said.

The deadline is not realistic because a proven solution that can be consistently provided to the entire network has not been created or agreed upon by the payment networks and the ATM industry, the letter said. The near-term issue with the deadline is not only the ATM operators' inability to deploy a workable solution, but also that they are not permitted to decline transactions that may be fraudulent, ATMIA said.

Also, there are longer-term issues that need to be resolved, including software development in several areas, and the specific testing and certification procedures that all ATM networks and processors will require, ATMIA said.

ATMIA, established in 1997, is a non-profit global trade association with more than 3,700 members in 60 countries.

Last month, the National ATM Council sent a letter to MasterCard requesting a delay in migration to EMV (News Now Feb. 19).

CU System briefs (03/11/2013)

 Permanent link
  • HARRISBURG, Pa. (3/11/13)--Brian Hahn, American Heritage FCU, Philadelphia, and Tom Smith, Choice One Community FCU, Wilkes-Barre, Pa., have earned another term on the board of directors of the Pennsylvania Credit Union Service Centers Inc. , according to the Pennsylvania Credit Union Association (Life is a Highway March 7). Nominations for the board seats closed on March 6.  Hahn and Smith will each serve a four-year term …
  • HUNT VALLEY, Md. (3/11/13)--Atlantic Financial FCU  has announced the retirement of President/CEO Rick Webb, after serving in that position for nearly 20 years. Before that, he served 23 years on AFFCU's board. Under Webb's leadership, the $98 million asset, Hunt Valley, Md.-based credit union has gained more than 150 select employer groups, including Dunbar, DLA Piper and Transamerica.  Since he took over in 1993, assets and membership have more than doubled. Under his leadership, AFFCU was the first Baltimore-area credit union to be involved with shared branching. Webb has been active on the Baltimore Chapter Board of the Maryland & DC Credit Union Association and national trade groups …

CUNA Mutual Seeks S&P Documents In RBS Securities Lawsuit

 Permanent link
NEW YORK (3/11/13)--CUNA Mutual Group's CUMIS Insurance Thursday asked a federal court in New York to enforce the insurance company's subpoena for documents from Standard & Poor's about $72 million in residential mortgage-backed securities (RMBS) CUMIS bought from RBS Securities before the country's financial crisis hit.

Madison, Wis.-based CUNA Mutual confirmed to News Now Friday that the motion was filed Thursday in the U.S. District Court for the Eastern District of New York.

New York-based S&P is also being sued by Department of Justice over S&P's role in reviewing and inflating the value of  the RMBS pools, which held subprime mortgage loans and collapsed. They included those held by corporate credit unions and CUNA Mutual.

It is the third motion CUNA Mutual has filed seeking documents related to its suit against RBS Securities. That suit involves 15 RMBS sold to CUNA Mutual's MEMBERS Life Insurance Co. and CUMIS Insurance Society between 2004 and 2007.

In November it sought a federal court in Seattle's help in obtain documents from Bellevue, Wash.-based Watterson Prime LLC, which provided due diligence on the securities.  It also filed an enforce-subpoena motion against  Fitch, but that motion was dismissed after Fitch and CUNA Mutual settled (News Now Nov. 29). 

CUNA Mutual filed the lawsuit seeking rescission of the sales against RBS on Jan. 17 in a U.S. District Court in the Western District of Wisconsin (Madison).  It maintains RBS misrepresented the products sold.

Tenn Lawmakers Pass Bill To Allow Paid Boards

 Permanent link
NASHVILLE, Tenn. (3/11/13)--Bills that would allow state-chartered credit unions to compensate board members or reimburse them for any lost wages caused by time spent in the service of the credit union--but not both--now await the signature of Tennessee Gov. Bill Haslam to become law. The Tennessee Senate and House passed the legislation Thursday.

A similar bill, passed in the Washington State House on March 5, is headed to a State Senate committee hearing.  

The original Tennessee legislative proposal simply gave members of a credit union board the ability to compensate themselves and to set the amount of compensation, said the Tennessee Credit Union League. There was broad, general opposition to the proposal from credit unions statewide, and the league board and management reflected that opposition in meetings with legislators on the committees that would hear the bill, the league told News Now at the time (News Now March 4).

However, when it became apparent the bill would pass in some form, the league worked to negotiate four conditions that would be required for a credit union to compensate its board members, TCUL President/CEO Fred Robinson told News Now earlier this month.

In the legislatoin, the decision to reimburse or compensate is optional based on the credit union's philosophy to be governed by volunteers or compensated board members.

In Washington state, legislation that would make broad governance changes, including removing the prohibition for state-chartered credit unions from paying board members and supervisory committee members, and increase credit union investment options passed Tuesday in the State House, according to the state's legislative website.

HB 1582 now awaits a hearing before the Senate Financial Institutions, House and Insurance Committee. SB 5302's hearing before the House Business & Financial Services Committee is scheduled for Thursday, when it will be considered for possible executive action (Anthem March 7).

Both bills were backed by the Northwest Credit Union Association (Anthem March 7).

NWCUA supports the bills because compensation may help in recruiting and keeping a more diverse board, Lynn Heider, NWCUA vice president of public relations and communications, told News Now last month.

Matz Congratulates Minn CUs On Turning Economic Corner

 Permanent link
ST. PAUL, Minn. (3/11/13)--
Click to view larger image National Credit Union Administration Chairman Debbie Matz offered candid insights to more than 50 credit union representatives during a roundtable discussion Friday at the Minnesota Credit Union Network office in St. Paul. (Photo provided by the Minnesota Credit Union Network)
ational Credit Union Administration Chairman Debbie Matz congratulated credit unions on turning an economic corner during an open forum meeting Friday with more than 50 credit unions representatives from Minnesota at the Minnesota Credit Union Network's offices in St. Paul.

The current credit union environment and recent successes across the industry are reflected in NCUA's year-end 2012 data, Matz said in her opening remarks.

The data indicated that 2012 was the best year for credit unions since the Great Recession began in 2007, with $8.5 billion in earnings, up 36.1% from 2011 (News Now March 4). Loan originations and new auto loans increasing dramatically, and credit union loan-loss provisions declined 14 basis points (News Now March 5).

These positive trends are mirrored and, in many cases, eclipsed in Minnesota, Matz told the group.

"It's been a difficult couple of years, but credit unions have really turned the corner," she said, noting substantial improvement in all critical areas of credit union measurement. "Thank you for doing such a good job and for working so hard."

The chairman expressed concern about the widening disparity between large credit unions with more than $250 million in assets and small credit unions with less than $10 million.  She discussed the struggles that smaller institutions face and the need to find ways to keep small credit unions alive and thriving, and pointed out the availability of training resources through NCUA's Office of Small Credit Union Initiatives.

Matz also spoke about changes in staffing at the agency and a reinvigoration of the agency's work force. As credit unions become more complex, NCUA is cognizant of the need to "keep up with the times" and stay ahead of the curve, hiring specific expertise in areas such as technology and commercial lending, she said.

Attendees told her about their regulatory concerns and commented on the credit union exam process, said MnCUN.  They also addressed specific concerns about NCUA letters to credit unions, interest-rate risk, member business loan waivers, and the low-income designation.

"We appreciate the NCUA's willingness to have an open discussion with credit unions in our state," said MnCUN President/CEO Mark Cummins, "and especially for the chairman's strong emphasis on open communication, her common sense approach and her commitment to strengthening the industry."

Maine League Testifies On Breach Notice, Student Loan Insurance Bills

 Permanent link
AUGUSTA, Maine (3/11/13)--The Maine Credit Union League and representatives from Maine's credit unions recently testified on two bills about breach notices and student-loan insurance bills, before two separate state legislative committees in Augusta.

L.D. 158 requires that notice of a security breach must be made no later than 30 days after discovery of the breach to residents affected by the breach. It also would double the financial penalties for a civil violation.

Rebekah Higgins, assistant vice president of card services for Synergent, testified Feb. 28 before the Insurance and Financial Services Committee on behalf of the Maine league, which opposes the bill (Weekly Update March 8).

"The requirement to force notification of the breach within 30 days of discovering the breach might have the effect of compromising an ongoing investigation by law enforcement officials," Higgins testified. "It is for this very reason that federal law allows for notification to be delayed. In at least two recent larger breaches which impacted our members, we were asked by the Secret Service not to disclose the activity pending their vigorous efforts to identify the hackers."

The exception in state law that allows credit unions to only have to comply with federal law, as long as federal law is at least as protective as state law, also was pointed out by Higgins. "We believe this bill would repeal that exception and add additional burden on to credit unions," she explained.

Also, the Maine league and two credit union representatives testified Feb. 28 on L.D. 351, which would modi­fy the Finance Authority of Maine's (FAME) Higher Education Loan Program to say that FAME may provide loan insurance on supplemental student loans.

The Maine league and several credit unions have been working with FAME on the legislation during the past year. Quincy Hentzel, league director of governmental affairs; Joe Gervais, Orono-based University CU's executive vice president; and Kyle Casburn, president/CEO of Seaboard FCU in Bucksport, provided testimony supporting the legislation to the Education Committee.

At the work ses­sion on Wednesday, the committee unanimously voted the bill Ought To Pass.

On the national level, the Credit Union National Association is collecting information from credit unions, concerning their activities in the student lending arena (News Now Feb. 26). The Consumer Financial Protection Bureau is in the process of gathering information from the public so it can develop options for policymakers to make the repayment of student loans easier for borrowers who are financially struggling (News Now Feb. 22).

Student loan debt surpassed $1 trillion in 2012, and exceeds credit card debt as the biggest source of consumer debt in the U.S.

Benefits Of CUs Touted In Biz Publication

 Permanent link
HIGHTSTOWN, N.J. (3/11/13)--The benefits that credit unions offer consumers were cited in an article in the February issue of South Jersey Biz magazine.

The article, titled "Credit Unions vs. Banks," compared the differences between credit unions and banks and what they offer consumers.

As member-owned, nonprofit financial cooperatives, credit unions are designed to represent a union of people with a common bond, Ellen Kuiper, president and co-CEO of ABCO FCU in Rancocas, N.J., told reporter Jennifer L. Nelson.

Because of the cooperative structure, every member is part owner of a credit union, regardless of the dollar amount in the member's account, said Sandra R. Martin, publicity coordinator at South Jersey FCU, Sewell, N.J.

The cooperative structure usually allows credit unions to offer lower rates and more affordable terms than banks, better rates of return on savings accounts, low- or no-fee checking accounts and ATM access and dividends, Martin said.

Credit unions can offer lower rates because they aren't beholden to shareholders or pressured to return profits every quarter, Martin told the publication. Financial gains are returned to members in the form of lower rates, she said.

The article noted that the common bond required for membership is often based on employment or location, and pointed to Campbell Employees FCU, headquartered in Cherry Hill, N.J., as an example. It is open to employees of Campbell Soup Company, PHH Mortgage, Pinnacle Foods, Northeast Products and Southeast Products and their immediate family members.

To read the full article, use the link.

NFL's Joe Montana To Keynote NACUSO Conference

 Permanent link
NEWPORT BEACH, Calif. (3/11/13)--Joe Montana, who led the San Francisco 49ers to four Super Bowl victories, will be the opening keynote speaker at the National Association of Credit Union Service Organizations' Annual Conference, April 17 in Las Vegas.

Montana won more than 70% of the games he started during his 16-year career with the team and is the all-time NFL leader in quarterback ratings.

He was twice named the NFL's Most Valuable Player, and won the Super Bowl Most Valuable Player award three times. He was selected to eight Pro Bowls and named All-Pro five times.

Montana retired from professional football in 1995. In recognition of his achievements, he was elected to the Pro Football Hall of Fame in 2000.

He will speak about what it takes to motivate a team, how to focus on a goal and how to deliver to your members.

Week-long Gas Giveaway Reaps Press Coverage

 Permanent link
COLUMBIA, S.C. (3/11/13)--
Click to view larger image Hundreds of cars lined up for free gas, compliments of Credit Unions of South Carolina, last week in four cities in that state. The events drew widespread media attention and helped consumers counter high gasoline prices. (Photo provided by Credit Unions of South Carolina and Your Marketing Co.)
South Carolina credit unions' gas giveaway, which News Now reported on Wednesday, turned out to be a media bonanza for credit unions, say those involved in the project last week.

"It was impossible to turn on your local television news, tune into a radio station, or open your newspaper and not see the words 'credit union' somewhere," said Bo McDonald, president of Your Marketing Co and organizer of the MADTAG giveaways sponsored by the Credit Unions of South Carolina. MADTAG aims to highlight credit unions' good deeds in their communities.

Several credit unions in the state joined to offer free gas to consumers to the first 100 drivers in a line at gas stations in Florence, Charleston and Columbia, and later in Greenville.

"Last year the gas giveaways totaled more than $240,000 in earned media coverage from television, radio and local newspapers," said McDonald. "So far this year before the Greenville event even takes place, we're estimating almost $250,000 in earned media."

"So far we've given away over 1,700 gallons of gas to 300 people," said Anne Shivers, CEO, Carolina Collegiate FCU.  "The response has been great, and we've heard back from so many thankful drivers. One driver this morning mentioned that her car was on E and was still two days away from getting paid."

While MADTAG representatives estimated about 200 cars in line for the free fill-ups at Tuesday's event, the Florence Police Department put the number closer to 500.

"Twenty dollars will only fill my truck up to about a quarter of a tank," said Woodrow King, a driver who received free gas in Florence. "But the wait is well worth it, with gas prices as high as they are now."

Credit unions will offer one more giveaway upstate.

Gentile Gives Savings Tips In FOXBusiness

 Permanent link
WASHINGTON (3/8/13)--FOXBusiness turned to the Credit Union National Association to provide tips to consumers in an article Thursday on re-evaluating or creating a savings plan.

Paul Gentile, CUNA executive vice president, strategic communications and engagement, gave this advice in the article, "How to Create a Successful Savings Plan":

  • "No matter what, put something away each month. Do it automatically and forget about it. Then one day you'll wake up and be surprised by how much you have."
  • Refinance your mortgage since rates are so low. He noted the average rate consumers pay on mortgages is still around 7%, but rates have been below 4% for more than a year. The money saved should go directly into savings.
  • Try to get a lower interest rate on your car loan and apply the difference to savings. "We are seeing lending opening up a little bit more."
  • Call your telecom provider bill to try to get a reduction in your bill. "More often than not, you'll get off the phone with your carrier with a cheaper plan because they don't want you to turn to another provider."  He noted he received $40 off a $190 a month bill that way.
To read the entire article, use the link.

Severe Weather Week Focused On Preparedness

 Permanent link
MADISON, Wis. (3/8/13)--Several state credit union leagues are taking steps to help credit unions prepare for tornados and severe weather this spring. This week is National Severe Weather Week, and April is National Tornado Preparedness Month.

"The Texas Credit Union League has a Disaster Preparation section on its league website, which is not specific to just tornados but for any type of disaster," Linda Webb-Manon, TCUL vice president of public relations and communications, told News Now.

In that section, TCUL provides a 21-page Disaster Planning Guide that credit unions can use to create their own continuity plans. The guide includes a planning process, plan development, awareness, preparation, mitigation response, recovery, an emergency plan checklist, a credit union disaster preparedness operations checklist, an emergency contact list, and a list of state and national resources.

The TCUL website section also features an American Red Cross disaster supplies kit, three Federal Emergency Management Association guides, brochures on how to deal with hurricanes, and several links to other resources.

The Southeastern League of Credit Unions--which represents Florida and Alabama credit unions--works with its member credit unions to make sure they are prepared for any type of disaster or threat, Mike Bridges, league vice president of marketing and communications, told News Now.  

"We have two Disaster Recovery Conferences, one in Alabama and one in Florida, to help our credit unions prepare for an impending disaster and to make sure they have the most up-to-date information for their disaster recovery plan," Bridges explained. "The league has an 800 number available for credit unions to use to record a message for their employees in case of a major disaster. This phone line helps to keep the lines of communication open when a credit union sustains major damage or an extended power outage, especially in this cellphone age.

"The league recently acquired a mobile branch from Pen Air FCU [Pensacola. Fla.]," he added. "This mobile branch, which has been dispatched to two Alabama credit unions following tornados, allows credit unions to continue offering services to members even though one of its locations is not functional."

The Southeastern league also administers many planning sessions for credit unions. The planning session covers disaster recovery and the need for a plan. That allows credit unions to stay compliant with their plan and to revisit it yearly to ensure it's optimal, Bridges said.  

Tropical Financial CU, based in Miramar, Fla., with $547 million in assets, as part of its disaster recovery/business continuity plan program, has written procedures for action to be taken prior to, during and after hurricanes, tornadoes and/or high wind events, along with other types of disasters or events, Alfredo Goenaga, vice president administration for Tropical Financial, told News Now.

"Additionally, individual business units have their own emergency contact listings along with specific instructions on evacuation and areas to meet at in the event of an emergency situation," Goenaga added. "After hours communication is available through our employee hotline, for general communication, and through more specific channels for key personnel. I am also a member of the Emergency Operations Center for Dade County. This gives us an on-site presence with the Office of Emergency Management prior to, during, or after any crisis." 

The Kansas Credit Union Association monitors weather conditions and responds to credit union needs on an individual basis, Susan Dyer, KCUA communications director, told News Now.  "Because the majority of Kansas is rural, we are lucky in that past tornadoes seemed to have missed our credit unions, for the most part," she added.

The Credit Union National Association has resources for credit unions to deal with severe weather damage and other disasters, including a severe weather webinar on Wednesday. See the links below.

Defense CU Council Marks Golden Anniversary

 Permanent link
WASHINGTON (3/8/13)--For credit unions nationwide serving members of the military and their families, February marked the golden anniversary of the Defense Credit Union Council. DCUC is a niche membership association representing the interests of credit unions operating on military installations worldwide.

"Back in the 1960s, credit unions serving the military came to the realization that their needs and challenges were unique when compared to their counterparts outside of the military gate," explained Roland "Arty" Arteaga, DCUC president/CEO.

"Defense credit unions served a very mobile membership while others, a fixed-membership, defined by their special employment groups. Also, since defense credit unions were operating on Department of Defense military installations, they were subject to DOD policies governing those installations," Arteaga said.

To kick-off the year-long observance, council board members gathered at The Mayflower Hotel in Washington, D.C., while attending DCUC's Defense Issues 2013 Roundtable session. The Mayflower hosted the council's first national conference, where its organizational structure and by-laws were unveiled and ratified by attending military credit unions.

Formed in 1963 as a separate and distinct trade association, DCUC remains faithful to its core mission, serving as the primary liaison to the Pentagon for credit unions operating on military bases worldwide. Arteaga noted the importance of establishing a niche trade association dedicated exclusively to the needs of military-affiliated credit unions, and one sanctioned to act as their liaison to the Pentagon. "They needed that liaison," he said.

A pivotal accomplishment of DCUC was succeeding in getting the Department of Defense (DOD) to develop a regulation for credit unions, providing logistical support from DOD, for operating on military bases.

The golden anniversary observance will include special events during the months leading up to the association's annual conference in August at the Greenbrier in West Virginia.

Festivities will continue in April with DCUC's sponsorship of the Credit Union Cherry Blossom's 10-mile sister race for troops deployed overseas. The race is slated to be held in Kuwait on April 7, the same day it takes place in the nation's capital. Proceeds will help fund the Children's Miracle Network.

The year also will include supporting a number of charities and several subcouncil meetings.

Reality Fair At GAC An Eye-opener For Teens

 Permanent link
MADISON, Wis. (3/8/13)--A financial Reality Fair held in conjunction with the Credit Union National Association's Governmental Affairs Conference (GAC) last week provided an "eye-opening" experience for Washington D.C. teens.

Click to view larger image Last week, the National Credit Union Foundation held a financial reality fair in conjunction with the Credit Union National Association Governmental Affairs Conference in Washington, D.C. Pictured, volunteer Lisa Totaro talks to teens at the transportation booth. (Photo provided by National Credit Union Foundation)
So said Tanya Thomson, art teacher at Washington Metropolitan High School, one of the three schools that participated in the event, organized by the National Credit Union Foundation.

A reality fair is an interactive financial literacy tool for high school students.

"It feels like the students learned a semester's worth of meaningful material in just two hours at the Reality Fair," said Landon Southerly, Math Teacher at Capital City Public Charter School.

The fair was held at the Rayburn House Office Building on Feb. 27. In addition to Washington Metropolitan and Capital City, students from Luke Charles Moore Academy participated in the event.

Many others, including members of Congress and GAC attendees en route to visits with their congressional representatives, stopped by to observe the fair,.

"We encourage even more credit unions and leagues to hold their own Reality Fairs across the country, said Lois Kitsch, NCUF national program director. "An estimated 10,000 students attended a fair in 2012 and that number is expected to grow substantially in 2013."

The GAC event was sponsored by NCUF with support and expertise from:

  • The Credit Union League of Connecticut;
  • Maryland & DC Credit Union Association;
  • Congressional FCU; Oakton, Va..;
  • HEW FCU, Alexandria, Va.; and
  • GPO FCU, New Hartford, N.Y.

Three Hurt When Car Crashes Into NY CU

 Permanent link
GRAND ISLAND, N.Y. (3/8/13)--Three people were injured Thursday morning when a car plowed through the entrance of Grand Island (N.Y.)  FCU and into a teller counter before it came to rest fully inside the building.

The impact pinned a member and an employee inside the building for some time, said Grand Island Fire Co. Chief Kevin Coch (WIVB.com and WGRZ.com March 7). They and the driver of the car were taken to the hospital, and their injuries are not serious. The employee and driver had leg injuries.

Two elderly women were inside the car, and the driver could not recall exactly what happened, said the fire department spokesman.  The incident occurred around 9 a.m. ET.

Since the car went perfectly through the front door of the building, crews at the site said the building didn't suffer structural damage beyond the front door and the counter.

The credit union closed and is still closed today. According to a notice on the $12.8 million asset credit union's website, "The office will be closed Thursday and Friday… due to damage to our building. Check back over the weekend for updates. The hope is that Monday, March 11th, will see us back in business. Thank you for your understanding."

Nominations Due Monday For WOCCU Distinguished Service Award

 Permanent link
Click to view larger image At the 2012 World Credit Union Conference in Gdańsk, Poland, World Council of Credit Union's Chair Manuel Rabines (left) presented the Distinguished Service Award to Barry Jolette, a former regulator, World Council chair and president/ CEO of San Mateo CU, Redwood City, Calif.  (Photo provided by the World Council of Credit Unions)
MADISON, Wis. (3/8/13)--Monday is the deadline to nominate individuals and organizations for the World Council of Credit Unions' (WOCCU) Distinguished Service Award (DSA), the credit union industry's top honor.

Awards will be presented at the World Credit Union Conference in Ottawa, Canada, July 14-17.

The DSA honors individuals and organizations that have made significant contributions to the international credit union movement and who have furthered World Council's vision of "building a global community."

Individual recipients may be WOCCU member organization officers, directors or  representatives; international credit union pioneers; field technicians; or individuals whose actions have  benefitted global credit union development.

Institutional recipients may be organizations or agencies that have provided financial or technical assistance to develop international credit union movements and their service infrastructures over an extended period.

Nominations must be from a WOCCU member organization.

To download a nomination form and see a list of past winners, use the link.

CU System Briefs (03/08/2013)

 Permanent link
  • MERIDEN, Conn. (3/8/13)--The Connecticut Credit Union Charitable Foundation has presented a check for $18,450 to The Avielle Foundation of Sandy Hook, Conn.  The foundation, hosted by the Credit Union League of Connecticut, collected donations from across the U.S. and Canada after the Dec. 14 shootings at Sandy Hook Elementary, Newtown, Conn. The Avielle Foundation was established in memory of Avielle Rose Richman, who died in the shootings, by Jennifer Hensel and her husband, Jeremy Richman. Its mission is to reduce violence in communities. "This donation is going to help us fund cutting-edge mental health research and help develop stronger communities in the hope of protecting our loved ones from acts of violence," said Richman. "This will serve as a lasting legacy in honor of our beautiful daughter, Avielle." "We will watch and try to support this project over the next months and years," said Paul Dorner, chief administrative officer, First Bristol FCU, and chairman of the credit union foundation. Pictured are, from left: Dorner; Richman; and Tony Emerson, league president/CEO.  Emerson noted the Avielle Foundation will "promote a long-lasting, positive effect for those affected by the Newtown shooting, as well as other communities." (Photo provided by the Credit Union League of Connecticut) …
  • GOLDEN, Colo. (3/8/13)--A former assistant branch manager at Golden, Colo.-based Credit Union of the Rockies pleaded guilty in the theft of more than $250,000 from its Black Hawk branch.Autumn Rene Guillot, 30, of Central City pleaded guilty to one count of theft over $20,000 on March 1 and faces a possible prison sentence of four to 12 years. The theft occurred in 2011 and was discovered after an unannounced audit uncovered discrepancies in a ledger allegedly maintained by Guillot, one of two full-time employees at the branch. Two deposits listed had not been received by the clearinghouse. Sentencing was set for April 26 (9news.com March 6) …
  • CHATTANOOGA, Tenn. (3/8/13)--Cheryl Watson, a former bookkeeper at Chattanooga, Tenn.-based Southern CU was sentenced in a U.S. District Court in Chattanooga to 15 months in a federal prison in connection with a $396,000 theft from the credit union.  She was employed with the credit union from October 2005 until March 2010. The embezzlement allegedly involved 200 transactions over four years (The Chattanoogan.com March 6) …
  • LEXINGTON, S.C. (3/8/13)--Philip Eugene "Gene" Richardson, a longtime chairman of the SAFE FCU board of directors, died Sunday. He was 89.  Richardson  spent more than 35 years working with credit unions, all but three as an unpaid volunteer. He served as chairman of the Sumer, S.C., $824 million asset credit union for 21 years. He also served on the May Plant CU board for three years and as its paid manager for three years. A memorial service will be in Camden, S.C., today at 1 p.m. at Bethesda Presbyterian Church. He is survived by his wife, Clara; three daughters; one son; 10 grandchildren and five great-grandchildren (Greensboro News & Record March 6) …

HGTV Star, Lake Michigan CU Offer Home Makeover Sweepstakes

 Permanent link
GRAND RAPIDS, Mich. (3/8/13)--Lake Michigan CU has landed Home and Garden TV host Carter Oosterhouse as its spokesman. The credit union is featuring Oosterhouse in a $25,000 home makeover sweepstakes.

Oosterhouse, the host of the new HGTV network show "Million Dollar Rooms," is a native of Traverse City, Mich., and a member of the Grand Rapids, Mich.-based credit union.

The sweepstakes runs through April 30. A drawing will be May 17. The winner will receive $25,000 in cash for renovations and design advice from Oosterhouse.

Oosterhouse has a friend who works in Lake Michigan CU's mortgage department, Don Bratt, director of marketing for the $3 billion credit union, told News Now.  Lake Michigan CU President/CEO Sandy Jelinski is a fan of Oosterhouse, who has hosted several shows about home renovation and design, and is known for his community outreach work, Bratt said.

In addition to his production company, Oosterhouse runs a nonprofit that builds and develops community parks and playground to promote fitness among youth.

"Sandy thought Carter would be the perfect person to communicate the values of our credit union to the community," Bratt said.

The credit union will feature Oosterhouse on radio, TV, outdoor and print advertising and through social media and mailings. Oosterhouse's image also is featured prominently in the credit union's branches. "Cardboard displays in branches are very popular," Bratt said.

Oosterhouse provides a blend of both celebrity and local appeal, he added.

"His appeal stretches beyond our membership," Bratt said. "People who were not members have inquired about the sweepstakes. That's an opportunity for us to extend our value proposition."

CU System Briefs (03/07/2013)

 Permanent link
  • ALBANY, N.Y. (3/7/13)--Employees of credit unions across New York state raised more than $12,000 by participating in the Credit Union Association of New York's first statewide fundraiser for Children's Miracle Network Hospitals. The "dress down for work" fundraiser was held on Feb. 14.  Employees of credit unions and the association donated money to dress down, with proceeds going to Children's Miracle Hospitals in New York. The money raised was matched by funds from CO-OP Financial Services' Miracle Match program. Pictured are staff from The Summit FCU, Rochester, on Valentine's Day. (Photo provided by the Credit Union Association of New York) …
  • HIGHTSTOWN, N.J. (3/7/13)--The New Jersey Credit Union League will host its 2013 CU Reality Check  [ http://www.CURealityCheck.com ] April 8-10 in Atlantic City. Speakers include Paul Gentile, Credit Union National Association executive vice president of strategic communications and engagement, and former president/CEO of the league; Max Wolff, chief economist with GreenCrest Capital; Moisette I. "Tonya" Sweat, National Credit Union Administration director of consumer compliance policy and outreach; Tom Farin, president, Farin & Associates; Lisa Renner, co-founder and managing principal of Renner Group; Jonathan Bowman, CEO of Clear Picture Leadership; Ed Speed, retired CEO of Texas Dow Employees FCU, Lake Jackson, Texas; and Theran Colwell, director of strategy and business development, CUNA Mutual Group …
  • HARRISBURG, Pa. (3/7/13)--Representatives of the Pennsylvania Credit Union Association and six credit unions participated in Junior Achievement of Central Pennsylvania's 11th annual Young Women's Futures symposium at Lebanon Valley College, Annville. Janice Appleby of Mid-Atlantic Corporate FCU and Toni Montgomery of AmeriChoice FCU served as co-chair and budget session presenter, respectively (Life is a Highway March 6). The event benefited 125 high school students from Dauphin, Lebanon and Schuykill Counties, and included sessions such as team building, interview, dress, resumes, social media and career exploration. The symposium is one of five events in 2013 made possible in part by a $10,000 grant from the Pennsylvania Credit Union Foundation to Junior Achievement. Pictured is Kimberly Berrier, left, of New Cumberland FCU working with two students during a session. Other participants included PCUA staffers T. Fetsko, Sheba Wallish and Vanessa Dettmore; Hershey FCU staffers Radica Persaud, Nicole Smith and Jill Sottile; Tricia Heisey of Belco Community CU and Sara Firestone, Members 1st FCU. (Photo provided by the Pennsylvania Credit Union Association) …
  • MARLBOROUGH, Mass. (3/7/13)--Massachusetts made a "Blanket Statement" during January with the third annual Blanket Drive to help support the Massachusetts Coalition for the Homeless. These blankets help children and families seeking relief from bitterly cold weather. The Massachusetts Credit Union League and 20 credit unions distributed 513 blankets to the coalition and 10 other community agencies in the state (eNews March 6 .  Some credit unions collected sheets, comforters and throws to help the coalition's "A Bed for Every Child" initiative. Collecting the most blankets was Leominster (Mass.) CU, whose staff are pictured presenting two organizations with blankets. From left: Arthur Heusser, Montachusett Interfaith Hospitality Network; Karen Inderwish, Leominster CU branch manager; Rachel Terrell, Leominster executive assistant; and Judith Nest-Pasierb, Our Father's House Inc. (Photo provided by the Massachusetts Credit Union League) …
  • HUNTSVILLE, Ala. (3/7/13)--Charles L. Ray Jr., who was chair of the board of directors at  Huntsville, Ala.-based Redstone FCU from 1983 to 2011, died Tuesday morning (Madison County Record March 5). Ray began serving the credit union as a volunteer in 1977 as a committee member. He oversaw Redstone's growth into a credit union with $3.4 billion in assets, the largest in Alabama and in the top 25 in assets of federal credit unions. "Mr. Ray will be especially remembered for his unwavering commitment to serving the underserved," said the credit union. "He led the great expansion of Redstone's facilities as well as the development of many of the outstanding products and services that Redstone is now known for." Ray owned and operated Nelms Memorial Funeral Home and was a teacher in the Madison County Public Schools. He also held key positions with the Huntsville-Madison County Community Action Agency and the U.S. Army Aviation and Missile Command. He is survived by his wife, Willie Mae, and one daughter, Terri L. Ray …

CO-OP Shared Branching Hits Milestone 5,000 Branches

 Permanent link
RANCHO CUCAMONGA, Calif. (3/7/13)--CO-OP Shared Branching network has reached 5,000 "live teller" branch locations nationwide, just over three years after reaching 4,000 in February 2010.

"Shared branching is one of the best examples we can show potential members that credit unions really are different from banks," said Stan Hollen, CO-OP Financial Services president/CEO. "Through the cooperative spirit of credit unions we have assembled a network leapfrogging all but the very largest banks in terms of convenient access to a branch almost anywhere in the country." 

The 5,000 branch locations gives the credit union system the fourth largest branch network with teller service, trailing three national banks--Wells Fargo, Bank of America and Chase, CO-OP said. CO-OP's records show Wells Fargo at 6,382 branches, Bank of America at 5,916 and Chase at 5,833.

Members of nearly 1,800 credit unions that participate in CO-OP Shared Branching can enter any branch and conduct their business as if they were at their own credit union. CO-OP estimates that if all 7,000-plus U.S.-based credit unions participated in shared branching, the industry's network of shared branching locations would total 20,519 branches.

The rapid growth of CO-OP Shared Branching during the past three years accelerated in 2012, after a merger of CO-OP Financial Services and Financial Service Centers Cooperative Inc., which became effective in January 2012. At that time, 502 branches were added to CO-OP Shared Branching.

Arizona CUs Take Top Spot In Net Income

 Permanent link
PHOENIX (3/7/13)--Credit unions in Arizona told how the state's credit unions took the top spot in the nation on net income earned compared with assets under their management last year in an article entitled "Arizona credit unions earn their way to the top spot" in Tuesday's Arizona Capitol Times.

The state's 50 federally insured credit unions saw a net income of 1.39% of their average assets last year. The national average for credit unions is 0.86%. The article cites statistics from the National Credit Union Administration's (NCUA) quarterly report, which was released Tuesday. (See related story in Wednesday's News Now, "NCUA 4Q Map Details Financial, Membership Gains For CUs.")

Prescott (Ariz.) FCU, which has $6.3 million in assets, hasn't raised fees in more than two and a half years, and the credit union takes care of its members, CEO Kathleen Wallis told the publication.  The credit union is doing better because its "rates are so low, and we haven't had a lot of bankruptcies and collections issues," she added.  It also noted that it doesn't have a lot of delinquencies on auto loans because it is lending to members.

Phoenix-based Arizona State CU, which has $1.43 billion in assets, also had a strong year, with a return on average assets of 1.28%, largely due to auto and mortgage lending, Paul Stull, senior vice president of strategy and brand, told the publication.

During 2012, Arizona State refinanced thousands of mortgages through the federal government's Home Affordable Refinance Program (HARP). By doing this, the credit union helped members reduce their monthly payments by $369 a month, on average, he said.

Arizona's credit unions are seeing loan delinquencies drop as the state's economy recovers from the Great Recession, which means they can hold less in reserves against losses, which helps boost earnings, NCUA told the publication.

The article noted that the return on assets measures how well a credit union invests its members' deposits and can "translate to higher savings rates, lower loan rates and new services such as banking by phone," said the article.

"For the credit union itself, it's a measure of how well it has made lending decisions, primarily auto loans and mortgage loans, as well as how well it has controlled expenses," it added. To read the entire article, use the link.

Kenya's Ambassador Lauds CUs For Promoting Economic Stability

 Permanent link
WASHINGTON (3/7/13)--
Elkanah Odembo, Kenya's ambassador to the U.S., thanked credit unions for their support of his country at a reception at the Kenyan Embassy in Washington, D.C.
Kenya's ambassador to the U.S. recognized 60 U.S. credit union representatives last week for their work to improve Kenya's economic stability in a region hit hard by post-election violence in 2007.

With a new election on the horizon, Ambassador Elkanah Odembo expressed appreciation for the partnership between credit unions in Kenya and in the U.S., and for the difference they make in Kenyans' lives. Odembo made the comments during a reception at the Kenyan Embassy in Washington last week in Washington, D.C.

After ethnic clashes following the 2007 presidential election left more than 1,000 people dead, the World Council of Credit Unions (WOCCU) began providing assistance to Busia Compassionate Centre, a western Kenya orphanage, through support from the international credit union community.

WOCCU initially worked with the orphanage through a U.S. Department of Agriculture-funded  program that extended local credit union financing to small farmers, families and caretakers affected by HIV/AIDS. That program ended in 2010, but WOCCU and credit unions globally continued to support the center.

Credit unions financed educational scholarships, taught caretakers and orphans how to grow crops and raise animals for better nutrition and an income source, and supported building  a safer, more secure facility.

Among 60 credit union representatives and Busia Compassionate Centre Supporters at a reception at the Kenyan Embassy were, from left, Jeff York, Lompoc, Calif.-based CoastHills FCU CEO; Brian Branch, World Council of Credit Unions president/CEO; and Bill Cheney, Credit Union National Association president/CEO. (Photos provided by Larry Glatt)
The orphanage's local volunteers and children have also established a credit union to serve the Busia community. Donations from the international credit union system helped subsidize start-up costs and provide tools and methods to establish the credit union. The credit union is one of Kenya's two digital credit unions, where members can access their accounts via cellphone.

"Through our work with Kenya's savings and credit cooperatives, we were able to provide a sense of hope and security for people deeply affected by the post-election violence," said Brian Branch, WOCCU president/CEO.

"From the seeds of this work sprouted our partnership with the Busia Compassionate Centre, which has grown into a promising foundation for economic stability and growth in western Kenya. Millions of Kenyans streamed to the polls on Monday to cast their votes for a new president, and we are hopeful that this election will mark an era of greater prosperity for the country."

The Global Women's Leadership Network, a World Council initiative, is organizing an engagement program to Kenya, May 25 to June 4, 2013, to help launch the Busia Compassionate Centre's credit union. Participants will learn about the Kenyan credit union system and life in rural Kenya as well as conduct credit union staff and board trainings. Use the link for more information.

CUs Prove Commitment to Members During Tax Time

 Permanent link
MADISON, Wis. (3/7/13)--Credit unions nationwide continue to build trust within their communities by providing members with member-centric services. This time of year they do so with free assistance on tax preparation.

Texas credit unions are participating in the Internal Revenue Service's Volunteer Income Tax Assistance program (VITA). The program offers free tax help to low- to moderate-income individuals who cannot prepare their own tax returns.

City CU in Dallas is among the credit unions involved in the initiative. "We decided to participate with the VITA project based upon two of our guiding principles: People helping people and commitment to education," Sharon Moore, City CU president/CEO said in a Texas Credit Union League press release.

NCI Community Development CU, chartered in Houston last year, also participated in the Texas VITA initiative. "Many families do not file a return and/or lack the knowledge of where to turn for help, and as a result, are not realizing the amount of income they can receive through the Earned Income Tax Credits, for example," said Randy Martinez, president/CEO of NCI Community CU. "It is our hope that by offering free income tax preparation services, the individuals who seek our service will also open an account with the credit union for direct deposit of their tax returns."

The El Paso Affordable Housing Credit Union Service Organization (AHCUSO) has championed VITA for years. It serves as the managing organization for the El Paso Coalition for Family Economic Program. Larry Garcia, president/CEO of AHCUSO, chairs the coalition, a consortium of 22 private, public and not-for-profit organizations instrumental in assisting thousands of El Paso residents with gaining access to the IRS‟ Earned Income and Child Tax Credit Programs.

"There are approximately 30,000 families in our area that have not claimed their Earned Income and Child Tax Credits," Garcia said. "This equates to $100 million left out of our community every year." This year, the coalition is offering 16 VITA sites.

Coastal Community and Teachers CU's VITA program participation is part of the Corpus Christi-based credit union's community outreach efforts, President/CEO Gina Prince told the league. The credit union has 36 employees who assist taxpayers. Through Feb. 23, the credit union has assisted in filing 283 returns totaling $533,660.

Other credit unions nationwide taking part in VITA:

  • Electro Savings CU, St. Louis, partnered with the Gateway EITC Community Coalition, an organization that offers free tax preparation at more 30 sites throughout  the St. Louis area to families with incomes less than $51,000. The credit union will offer free financial services on Saturdays through April 13 (stltoday.com Feb. 12). The credit union seeks to help people avoid high fees in managing their money and those who do not have accounts with financial institutions, said Laura Mugge, community development specialist for Electro Savings CU.
  • For the 10th year, Bethpage (N.Y.) FCU, is helping low- to moderate-income households on Long Island prepare their tax returns for free, by offering Long Island's largest VITA program at 12 of its branch locations.
  • Belco Community CU, Harrisburg, Pa., is providing free tax preparation services through VITA from Jan. 29 to April 29.

Michigan Cooperative Ad Campaign Tops Record $1M

 Permanent link
LANSING, Mich. (3/7/13)--With record contributions topping $1 million, more than half of Michigan's credit unions have contributed to the 2013 CU Link cooperative advertising campaign, said the Michigan Credit Union League.

As of March 1, contributions totaled $1,021,352, MCUL said (Michigan Monitor March 4).

In addition to credit union funding, the Michigan Credit Union League is adding another $2.8 million to the campaign including:

  • $1 million in matching funds from CUcorp, a league subsidiary;
  • $286,000 from MCUL;
  • Another $1 million from CUcorp will be added to the media buy to increase credit union buying power and promote additional product messages for Invest in America and member business loans.
  • $500,000 from CUcorp will be allocated to credit unions for integrating their marketing efforts with the campaign, through pre-printed marketing collateral pieces and direct reimbursements for marketing costs.
The 2013 credit union media spend will be worth more than $3.8 million, and will focus on messages that promote the low rates, products and services, member discounts and value of membership that credit unions bring to the marketplace, MCUL said.

'Rekindle' Sparks CU Collaboration In Mid-Atlantic States

 Permanent link
MIDDLETOWN, Pa. (3/7/13)--To build on its momentum, Rekindle--an initiative to reawaken credit unions' passion for collaboration and for restarting the economic engine that founded the cooperative movement--is launching a website and releasing the second in a series of animated short films.

"The Story Continues," a second animated short about Rekindle, highlights the case for the rebirth of cooperation among credit unions, going deeper into a conversation about bloated back-office expenses.

"Essentially, Rekindle provides credit unions with a structure and method to find solutions to common problems," said Jay Murray, president/CEO of Mid-Atlantic Corporate in Middletown, Pa. "Nearly everyone we speak with sees value in collaboration. What Rekindle has taught us over the past year is that collaboration--for real impact--requires a great deal of hard work."

Rekindle springs from a core group of Pennsylvania credit unions interested in working together to solve problems. Since its debut last fall, Rekindle has grown steadily through the middle-Atlantic states.

After a founding meeting convened by Belco Community CU in Harrisburg, Pa., Mid-Atlantic Corporate FCU assumed a leadership role to develop a scalable collaboration framework for the middle-Atlantic states.   

"Whether it's driving down redundant system costs or sharing staff expertise, our movement has always been at its best when we collaborate," Murray said. "And today--with a growing regulatory burden, ever-thinner margins and fierce competition from the banking sector--it's past time to reignite the cooperation that made our movement strong."

The Rekindle website is designed to enhance the collaboration framework. Hosted by Ongoing Operations, a Maryland credit union service organization that offers cloud-computing, and data backup and recovery solutions, the site will be used to build community, house Rekindle's video library, and keep credit unions updated on Rekindle developments.

Michigan CUs Ramp Up Lending

 Permanent link
LANSING, Mich. (3/7/13)--A strong lending performance propelled Michigan credit unions to record-setting results for 2012, said the Michigan Credit Union League in an analysis of data from the National Credit Union Administration.

Michigan consumers also continue to choose credit unions in record numbers. State credit unions added 76,829 new members in 2012, more than the previous nine years combined, said the league.

With auto sales rising 13.4% in 2012 to the highest point since the start of the recession, Michigan credit unions posted an increase in new-auto loans for the first time since 2009. Credit unions have captured 15.5% of the new-auto loan market, up 3% from 2011, according to data from Experian AutoCount. Michigan credit unions increased their used auto-loan portfolios about 8% during 2012, gaining an additional 1.5% market share.   

"We know that there is tremendous pent-up demand for new cars and we fully expect this growth to continue, which is great news for consumers and for our domestic auto industry," said Dave Adams, MCUL CEO. 

In 2012, Michigan credit unions financed 65% more first mortgages than in 2011, a record. Member foreclosures were down 11.8% in 2012. Overall foreclosure activity in Michigan dropped by 23.5% in 2012, a rate of decline that is among the highest in the nation, according to RealtyTrac.

Student loans at Michigan credit unions also increased--by 42% in 2012---with total student loans nearing $100 million.

Total member business loans (MBL) for the state's credit unions were up 4.3% for the fourth quarter and rose 17% for the year, topping $1 billion for the first time. Nationally, credit union MBLs are up 2.9% on the quarter and 9.2% for the year.

Credit unions, the leagues and the Credit Union National Association are urging Congress to help credit unions make even more business loans by raising their MBL cap to 27.5% of assets, up from 12.25%. Doing so would help boost the economy by generating $14.5 billion in new loans and 158,000 new jobs, says CUNA, with no cost to taxpayers. Raising the MBL cap is one of CUNA's top priorities for 2013.

Ackerman, McFarland Win PCUA Lifetime Achievement Awards

 Permanent link
HARRISBURG, Pa. (3/6/13)--The Pennsylvania Credit Union Association announced the winners of its 2013 Lifetime Achievement Awards.

Dave Ackerman, CEO, USX FCU, Pittsburgh, was selected as the Outstanding Credit Union Professional of the Year. Dr. Ross McFarland, treasurer, Tri County Area FCU, Pottstown, was chosen as the Outstanding Credit Union Volunteer of the Year (Life is a Highway March 5).

Ackerman has been in the credit union movement for 25 years, and has served as CEO for 14 years. He is vice chairman on the board of the Pennsylvania Credit Union Foundation and is chairman of the Grants Committee.

McFarland served for 34 years in several volunteer capacities for credit unions, and has been a treasurer for 18 years. He is on the board of the Montgomery County Chapter of Credit Unions for more than 20 years. He participated in the 1991 Operation Grassroots rally and the 1998 campaign for H.R. 1151, the Campaign for Consumer Choice.

The awards will be presented during the association's annual convention May 18 in Hershey.

Michigan League Foundation Award Recipients Announced

 Permanent link
LANSING, Mich. (3/6/13)--The Michigan Credit Union League and the Michigan Credit Union Foundation announced their annual award recipients.

"2012 was another banner year for credit unions and these winners truly represent the best that the Michigan credit union community has to offer in terms of ideals, philosophy and service," said MCUL and Affiliates CEO David Adams. "The inspiring accomplishments of these hard-working, dedicated individuals and credit unions are clear reminders of the credit union difference in action."

The award winners are:

  • Credit Union Professional of the Year: Daniel Harp, vice president of lending, Dort FCU, Flint;
  • Outstanding Credit Union of the Year: United FCU, St, Joseph;
  • Distinguished Service Award: Catherine Roberts, president/CEO Research FCU, Warren;
  • Chapter Effectiveness Award: Metro West Chapter;
  • Young Professional of the Year: Kaye Chervenak, parish and education coordinator, Alliance Catholic CU, Troy;
  • Youth Advocate Award: Cindy Lardie, youth program coordinator, TBA CU, Traverse City;
  • Award for Excellence in Consumer Education: Jeremy Cybulski, youth coordinator, Co-op Services CU, Livonia;
  • MCUF Community Volunteer of the Year Award: Janice Rose, president/CEO, E&A CU, Port Huron; and
  • MCUF International Credit Union Development Award: Communicating Arts CU, Detroit.
The winners will be recognized at the Honors Awards Breakfast at the MCUL Annual Convention & Exposition, May 16-18 in Detroit.

Gentile in CUInsight: CUNA's New 'Vision,' GAC Highlights

 Permanent link

WASHINGTON (3/6/13)--CUInsight Tuesday featured an extensive wrap-up of all the happenings at last week's Governmental Affairs Conference, as seen through the eyes of Credit Union National Association Executive Vice President of Strategic Communications and Engagement Paul Gentile.

This year's GAC "made headlines, caught the attention of official Washington, unveiled a new approach by the federal regulator, and opened the door to a first-time-ever "vision" for the movement to "unite for good," Gentile notes in the cuinsight.com piece.

Among the items highlighted by Gentile are:

  • CUNA President/CEO Bill Cheney's call for credit unions to rally together and "Unite for Good" to help create a nation in which "Americans choose credit unions as their best financial partner";
  • National Credit Union Administration Chairman Debbie Matz's announcement that the agency plans to modernize and revitalize its examination regime and allow credit unions to offer more innovative products and services;
  • Speaker of the House John Boehner's (R-Ohio) declaration that tax code reform will be the first item considered by the U.S. House this year;
  • House Financial Services Committee Chairman Jeb Hensarling's (R-Texas) proclamation that he would not support taxing credit unions;
  • U.S. Rep. Maxine Walters' (D-Calif.) statement of support  for raising the member business lending (MBL) cap; and
  • U.S. Rep. Ed Royce (D-Calif.), author of the MBL bill, urging credit unions to share their MBL stories with Congress.

Other comments under the spotlight: U.S. Reps. Peter King (R-N.Y.) and Brad Sherman (D-Calif.) on allowing credit unions to accept additional forms of supplemental capital; Sen. Elizabeth Warren's (D-Mass.) call for credit unions to support the Consumer Financial Protection Bureau and confirmation of its director, Richard Cordray, who also spoke at the GAC; and Former House Financial Services Committee Chairman Spencer Bauchus (R-Ala.), who noted talks over a bill to replace CFPB's single director with a bipartisan commission.

"These highlights are just part of the story; so much more was discussed in the breakout sessions, hallways, receptions and intervals between sessions," Gentile noted. He suggested readers could find more GAC coverage in the pages of Credit Union Magazine.

CUNA has created a new members-only tax toolkit, which is designed to help credit unions connect with their members and educate the public and policymakers about the importance of the credit union tax status.

For the original CU Insight article, more on the GAC in Credit Union Magazine, and CUNA's Tax Toolkit, use the resource links.

Wash Post Spotlights CUs, News Now On Furloughs

 Permanent link
WASHINGTON (3/6/13)--The Washington Post highlighted a recent News Now article in its own March 5 story on federal employees facing the threat of sequestration-caused furloughs. The News Now story featured how credit unions are stepping up to help with special assistance programs for members.

The Post article noted that federal employees holding security clearances, who run into financial trouble due to the furloughs, should notify their agency so the troubles don't muddle their clearance status. The article reminded that "indebtedness is one of the potential indicators of reliability, trustworthiness and judgment that go into a decision on granting or continuing security clearances, which are needed for many federal jobs."

The article also noted federal guidance that advises employees that many creditors are willing to work with borrowers in such situations.

"For example, the Credit Union National Association has said that many federal credit unions will offer special low-interest loans with flexible repayment terms and will allow existing loans to be extended, among other benefits for account holders who are furloughed," it said, and hyperlinked to the News Now article. (See resource link.) (Also see second article in the series in this issue, "More CUs Preparing Members For Sequestration Issues.")

News Now is CUNA's highly regarded daily online news service, which features comprehensive news coverage with a credit union audience in mind. Use the second link for a free subscription.

HarborOne Members To Vote On Converting To Bank

 Permanent link
BROCKTON, Mass. (3/6/13)--Members of HarborOne CU in Brockton, Mass., will meet Monday at 5 p.m. EDT to vote on whether to convert to a bank.

The conversion, if approved, would take effect by the end of 2013 (News Now May 8).

The $1.9 billion asset credit union announced in March 2012 it planned to pursue conversion. It said that converting to a bank charter would allow it to expand its customer base into Boston; increase lending, especially with business loans; and raise more capital, such as through a stock sale. It also said it cannot open a branch in Boston because it is restricted to serving four counties in Southeastern Massachusetts.

The National Credit Union Administration has said that HarborOne could expand its geographic boundaries by petitioning the state. HarborOne is not near its member business lending cap and it could sell stock to raise capital, NCUA also said (News Now May 8).

A credit union charter is the best option for credit union members and any decision on converting should be in the members' best interest, the Credit Union National Association and the Massachusetts Credit Union League have said (News Now Feb. 17).

S Carolina CUs Kick Off Week Of Gas Giveaways

 Permanent link
FLORENCE, S.C. (3/6/13)--Cars began arriving at 4:30 a.m. Tuesday for the start of a week-long gas giveaway initiative sponsored by South Carolina credit unions.

On Tuesday, credit unions in the Pee Dee region of South Carolina gave $20 of free gas to the first 100 customers at the Breakers Food Mart in Florence. The gas giveaway is part of a Credit Unions of South Carolina program to spur others to do good deeds in the community.

The offer of free gas kicks off the second year of the Making a Difference campaign, referred to as MADTAG.

The campaign highlights the good deeds being done in the local community, and those who are making a difference.

One of the first vehicles in line stalled. The driver of the next car in line sacrificed his spot in line to give the stranger a jump start. "It really highlighted the whole theme of this event: That's showing the good deeds that happen every day in our community" said Robert Harris, CEO Health Facilities FCU, Florence, S.C.

The gas giveaways will continue throughout South Carolina this week, with an event scheduled in Charleston this morning and the Midlands on Thursday morning. Each event will offer the first 100 drivers in line a free fill-up with up to $20 worth of regular gasoline.

A First: CUs' Contributions To Kids' Hospitals Top $10M

 Permanent link
SALT LAKE CITY (3/6/13)--Credit Unions for Kids, a collaborative effort in the credit union community that raises funds for local Children's Miracle Network Hospitals, raised a record $10.2 million in 2012.

The milestone represented a $1.5 million increase over 2011 when America's credit unions generated $8.7 million for Children's Miracle Network Hospitals. This effort solidified credit unions' third-place ranking among corporate partners supporting the charity.

"We are immensely proud of our partnership with America's credit unions and congratulate them on their record-breaking year," said John Lauck, president/CEO of Children's Miracle Network Hospitals. "Their performance speaks volumes about the character of those in the movement.  Given the challenges facing the industry, credit unions could have cut back on their fundraising but instead they increased their giving in 2012 by over 15%."

The Credit Unions for Kids campaign, which drew the support of about 3,000 credit unions, was highlighted by the CO-OP Financial Services Miracle Match program; two leave behind projects during the national political conventions at children's hospitals in Tampa-St. Petersburg, Fla., and Charlotte, N.C., and a sister project in Greenville, S.C.; Credit Union Miracle Day Inc. Family of Races; wine auction events in the Pacific Northwest and California; golf tournaments in Phoenix and Tampa; a statewide walk in Ohio; and Miracle Jeans Day.

The Credit Unions for Kids program was first launched in 1996 and since that time credit unions have raised $110 million for Children's Miracle Network Hospitals.

In 2013, credit unions will have three national campaigns to support their local children's hospital.  The Change A Child's Life coin drive, which kicked-off March 1 and concludes April 30, accept orders for kits through mid-April. The kits are free and can be ordered online. Use the link.

More CUs Preparing Members For Sequestration Issues: A Special Report

 Permanent link
MADISON, Wis. (3/6/13)--More credit unions are advising their members on how to mitigate the impact of sequestration on their financial well-being and offering special services to reduce the impact from the gap in income generated by government furloughs.

More than one million employees of the federal government, many of them members of credit unions, may receive furlough notices due to the budget cuts, which took effect Friday.

San Diego, Calif.-based Cabrillo CU said Friday it is rolling out a 0% annual percentage rate (APR) Sequestration Assistance Loan (SAL) for $2,500 to help supplement incomes of federal employees facing temporary furloughs or reduced hours as a result of the mandatory budget cuts.

"We've received numerous calls from members in the past week, worried about how the sequestration will affect them and their paychecks," said Robin Lentz, president/CEO of the $196 million asset credit union. "They've asked us if we could help, so we've developed this loan program in response to their needs," Lentz added.

According to Toby Hayes, Cabrillo's vice president of marketing, the credit union has members in "dozens of federal agencies. All of them have different payroll days and each federal agency is handling the temporary budget cuts differently, based on their operational needs. So our biggest challenge was developing a single way to help as many federal employees as possible, to provide some relief caused by the temporary reduction in their payroll."

The National Foundation for Credit Counseling (NFCC) is offering consumers advice--which credit unions can pass along to members--about maintaining financial stability during sequestration.  Consumers should assess their current financial situation and evaluate four personal finance areas: budgeting and credit management, saving and investing, planning for retirement, and home equity. Credit unions have a variety of financial planning tools available from the Credit Union National Association. (Use the links.)

If the assessment finds problems, don't ignore them--especially in emergencies, NFCC said. "Take action sooner rather than later, as delaying only makes the problem harder to resolve," said NFCC.  Consumers can take control by reviewing their credit report and score, creating a cash-flow calendar listing all sources of income and dates bills are due, paying down debt and suspending uses of charge cards; and getting financial counseling.

Other credit unions announcing plans to assist members through the furloughs have similar plans:

  • Metro Atlanta-based Associated CU will offer 0% interest loans and certificates of deposits withdrawals with no penalty fees. Its Federal Employee Relief Loan is for the difference between the member's last direct-deposited paycheck and the sequester paychecks. The loan provides an interest-free money stream during the cuts. "Since 1930, our core membership base has been federal employees," said Associated CU President/CEO Lin Hodges. "We intend to stand shoulder to shoulder with our members if and when we are needed."
  • Excel FCU, Norcross, Ga., has short-term 0% interest loans, loan payment extensions, increased credit card limits, waiving of service fees and late fees, and modification of interest rates on consumer loans and mortgages. "We will evaluate each member's personal situation and their history with the credit union to determine which program or programs would help the most," said Bonnie Trappe, Excel FCU executive vice president.  "We realize these are uncertain times for some of our members. The credit union philosophy is all about helping people, and we're always seeking ways to serve our members.  In uncertain times, we want people to know they can count on us to be on their side."
  • Palmetto Trust FCU, Columbia, S.C., has a process similar to 1995 when Congress shut down the federal government, said CEO Lucile Beckwith. It offers a 30-day, 0% interest loan equal to the members' net pay if they direct deposit their paychecks, with a 30-day renewal available. "We are refinancing vehicle and personal loans to lower payments for our federal employee members who expect to be furloughed," she said, noting  that "they really need the lower payments to help them through the furlough period; and, as we tell them, with our simple interest loans, they can always pay more than the payment amount with no penalties."
  • JetStream FCU, Miami Lakes, Fla., whose core membership includes Federal Aviation Administration and other department branches, is offering a 60-day, 0% interest, no payment Furlough Relief Loan up to $2,000. Members can repay the balance at the end of 60 days or convert the loan to a 12-month signature loan with an 8.99% interest rate. "Assisting our members during this challenging period by providing them with financial options is our top priority," said CEO/President Jeanne Kucey.
  • NSWC FCU, Dahlgren, Va., offers penalty-free withdrawals from share certificates; reduced consumer loan payments for six months that require payment of interest only, which extends the term of the loan six months; skip a monthly payment for one month; and loans, workouts or restructuring of loans.
Another News Now story on sequestration,  "CUs To Furloughees: 'Be Assured, We've Got Your Back,'" was a featured link in a Washington Post story. See related story, "Wash. Post Spotlights News Now On Furloughs." This is a second article in that series.

Furloughs aren't the only time credit unions rally for members. Credit Union Magazine's story, "CUs Lend Members a Hand," addresses how "the worst of economic times tends to bring out the best in credit unions. The not-for-profit, cooperative business model was born in times of economic hardship. It still shines bright during dark days." To access the article use the link.

If you are doing anything special to help your members through the furloughs, e-mail your information to Uniteforgood@cuna.com, newsnow@cuna.coop, and asmarterchoice.org.

CU System Briefs (03/05/2013)

 Permanent link
  • DUBUQUE, Iowa (3/5/13)--DuTrac Community CU's " Kidz 'R' Us" Educational CU at Eisenhower Elementary School in Dubuque, Iowa, was featured recently in an article and a video in the Telegraph Herald. The credit union for kids and educates young students about how credit unions operate, trains them to manage their personal finances and builds relationships with youth for their future. "We have our Kids 'R' Us credit union to provide hands-on, practical experience for children to learn about banking and how to handle their money," said Jason Norton, DuTrac senior vice president of marketing and business development. "It will hopefully create for them, instill in them, a lifetime of savings and good financial habits." Fifth and sixth grade students operate the credit union at five area schools. They are trained by DuTrac staff, and DuTrac provides support, training and guidance throughout the school year. Here, Ava P., age 5, waits for a receipt after making a deposit into her account at Eisenhower. (Photo provided by DuTrac Community CU) …

Filene Report Provides Insights On Engaging Young Adults

 Permanent link
MADISON, Wis. (3/5/13)--A new report from the Filene Research Institute describes how one company employed an on-campus peer-to-peer network to teach young adults about personal finance and enhance awareness of the organization's brand.

Since the Great Recession, young adults have bought fewer homes, purchased fewer cars, and accumulated less debt than they did before the recession, and they are shedding debt faster than older generations, according to a Pew Research Center analysis of government data (News Now March 1.

This report describes the efforts of Thrivent Financial for Lutherans to engage young adults, after a survey revealed it was virtually unknown to college students.

Among the tactics Thrivent employed was Money Revolution, an on-campus program that encourages students to not only learn about financial literacy themselves but also coach their peers.

Money Revolution has two purposes. First, strives to help college students be wiser with money. The initiative focused on a critical life stage in which choices can have lifelong implications, especially when it comes to money. The second purpose is to create business value for Thrivent.

Thrivent hired teams of three students per campus and trained them on financial topics, presentation and networking skills, and teamwork. Thrivent called this the "hire the problem to solve the problem" approach. In Thrivent's case, students helped design and implement a campus engagement strategy to teach students about personal finance.

The content of the messages shared by the Money Revolution representative was driven by what the members of the student body want to learn. Thrivent identified five main areas of focus for financial topics: Saving, credit, student loans, financial protection and spending.

A campus-based, peer-to-peer financial literacy movement like Money Revolution is replicable for credit unions, especially since credit unions have relevant offerings for college students and recent college graduates, the report said. It is critical that the credit union is willing to be patient and take the time to develop intentional relationships, the report said.

To download the report, use the link.

GAC Received Wide Attention In Media Reports

 Permanent link
WASHINGTON (3/5/13)--The Credit Union National Association's Governmental Affairs Conference last week in Washington, D.C., received widespread coverage in national and local media. Several national outlets, including Bloomberg and Businessweek, Reuters,Politico, American Banker, US Banker, The Hill blog and more covered key speakers and events during the week.

Others included mortgage and banking industry publications such as National Mortgage News, Bank Credit News, BankDirector.com and Mortgage Orb, as well as credit union trade press.

One of the standouts among press accounts included an American Banker (Feb. 28) item headlined: "Waters Backs Credit Union Biz Lending Bill."

It referred to a speech Wednesday at the GAC by U.S. Rep. Maxine (Calif.) Waters, the top Democrat on the House Financial Services Committee." The article noted she expressed her support for two credit union bills before Congress:  raising the member business lending cap to 27.5% of assets from 12.25% and allowing credit unions to access supplemental capital.

Much of the reporting focused on the remarks of  U.S. Sen. Elizabeth Warren (D-Mass.), who spoke  at Wednesday's GAC session. National Mortgage News (Feb. 27) for example, quoted her statement: "Credit unions did not break this economy. They did not build business models around tricking their customers. When the economy faltered, they did not turn their backs on the families and small businesses that needed them."

It also noted that Warren told credit unions, "Credit unions that wouldn't adopt a business model based on tricks and traps were competing with slick outfits that pretended to underprice them. In other words, the game was rigged--rigged against customers and rigged against small financial institutions."

Other articles picked up Warren's defense of the Consumer Financial Protection Bureau, which she helped establish, and of Director Richard Cordray against the GOP opposition to confirming a CFPB director.

National Mortgage News (Feb. 27) reported CFPB's Cordray as telling the GAC audience that credit unions are not the target of the CFPB and calling on credit unions to work with the agency to address consumer financial issues. Other reports focused on his call for lenders to move beyond safe qualified mortgage loans (American Banker Feb. 28 and BankDirector.com March 1).  Cordray told credit unions they "should have confidence in your strong underwriting standards, and you should not be holding back" (BankDirector.com).

Reuters (Feb. 27) reported criticism of CFPB by House Financial Services Committee Chairman Jeb Hensarling (R-Texas) at the GAC Tuesday. Although not referenced by Reuters, Hensarling also vowed to help credit unions preserve their tax-exempt status.

House Speaker John Boehner (R-Ohio), who spoke Tuesday at the GAC in his second address in three years before CUNA's audience,  also was featured in reports about his focus on rewriting tax laws (Politico and Bloomberg  Feb. 26).

The GAC culminated with 4,200 attendees hiking Capitol Hill to discuss credit union concerns such as preserving their tax-exempt status, enhancing the credit union charter with increased member business lending authority and supplemental sources of capital, and reducing the regulatory burden on credit unions.

Improving Loan Losses, New Auto Loan Growth Fuel Strong CU Earnings

 Permanent link
MADISON, Wis. (3/5/13)--The National Credit Union Administration's just-released 2012 credit union data confirm that the trends the Credit Union National Association had reported on throughout 2012 continued in fourth quarter, and that 2012--from almost every vantage point--was the best year for credit unions since before the start of the Great Recession in 2007, according to a CUNA economist.

Loan originations and new-auto loans saw dramatic increases, and loan-loss provisions declined last year, Mike Schenk, CUNA vice president of economics and statistics, told News Now.

"Overall, credit union loan originations totaled a record $329 billion in 2012--a 27% increase over 2011," Schenk said. "Strong mortgage refinancings helped to drive those results. In addition, new auto balances increased dramatically--reflecting a resurgent auto industry and lots of pent-up demand."

Click to view larger image Click for larger view
The average age of U.S. cars was near record highs in 2012--at nearly 11 years, he added. The 8.6% increase in new auto loans was the first annual increase since 2006 --when credit union new-auto loan balances rose 5.5%.

Another highlight of the NCUA report was that credit union loan-loss provisions declined 14 basis points because of an improving economy and falling credit union chargeoffs, Schenk said.

"All in all, most of the metrics we follow show that overall credit union operating results have returned very close to normal," Schenk explained. "However, the results are not uniform--not all credit unions are benefiting to the same degree from the improving economy and improving labor markets. In particular smaller credit unions are showing results that lag the movement-wide norms. For example, smaller institutions are more likely than their larger counterparts to have reported weak earnings and relatively low loan and membership growth."

CUNA released its January Monthly Credit Union Estimates on Monday. Credit union loans outstanding increased 0.1% during January, compared with a 0.1% decrease the same period last year. Adjustable-rate mortgages led growth with a 1.4% rise, followed by new auto loans (0.8%), other mortgages and auto loans (both 0.6%), and unsecured personal loans (0.4%). Home equity loans decreased 2.1%, along with credit cards (1.3%) and fixed-rate first mortgages (1%). Credit union loans totaled $613.6 billion, compared with $586.7 billion in January 2012.

"The January MCUE indicates that the robust new auto-loan growth that was reported in 2012, continued into the new year," Schenk said. "On an annualized basis, new-auto loans grew by more than 9% in January."

Click to view larger image Click for larger view
Credit union savings balances held steady during January at $900 billion. Individual retirement accounts, money market accounts, and regular shares increased 0.7%, 0.5%, and 0.2%, respectively. One-year certificates remained constant, while share drafts decreased 1.8%. Credit union savings totaled $899.6 billion in January--or $56.7 billion more than $842.9 billion in January 2012. 

For credit union asset liquidity, the loan-to-savings ratio has remained at 68% for the past three months. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--is 18%.

Total credit union membership grew 0.1% to 97 million. Membership grew 2.7% last year.

The movement's overall capital-to-asset ratio remained at 10%. The total dollar amount of capital is $110 billion.

WOCCU Kenyan Project Sparks Birthday Boy's Gift

 Permanent link
Click to view larger image Seven-year-old Cole Treat joined the featured drumming group's performance at the World Council of Credit Unions' afternoon tea reception for Busia Compassionate Centre Supporters on Wednesday at the Kenya Embassy in Washington, D.C. (Photo provided by Larry Glatt).
MADISON, Wis. (3/5/13)--A Michigan Credit Union League staffer's work with World Council of Credit Unions' (WOCCU) Kenyan Engagement program has prompted a seven-year-old's unique gift to an orphanage.

Cole Treat, the son of friends of league representative Stephanie Klocinski, heard stories about Kenya when Klocinski returned to the U.S. When his parents asked him what he wanted for his seventh birthday, he replied that he didn't need anything and instead wanted to help Kenyan orphans obtain shoes, WOCCU said.

So guests at Cole Treat's seventh birthday party brought flip flops instead of gifts for him, and he collected 38 pairs of flip flops in different sizes and donated to them the Kenyan Busia Orphanage by dropping them off at the WOCCU booth at the Credit Union National Association's Governmental Affairs Conference in Washington, D.C., last week.

Click to view larger image After hearing about the Busia Compassionate Centre from family friend Stephanie Klocinski, league representative at the Michigan Credit Union League, who attended a World Council engagement program to the Kenyan orphanage last year, Cole Treat asked family and friends to donate flip flops to orphans for his birthday.  (Photo provided by the World Council of Credit Unions)
 

Cole and his family were at the Kenyan Embassy reception Wednesday in Washington, D.C.

The idea of donating flip flops originated with American Heritage FCU in Philadelphia last year, WOCCU said. The $1.27 billion asset credit union held a local fundraiser to raise money and flip flops for the Kenyan Busia Orphanage, raising about $6,000 and collecting 5,000 pairs of flip flops.

WOCCU took the flip flops to Kenya when it traveled to Busia for the engagement trip in November. Cole likely saw the photos of those flips flops being distributed, WOCCU said.

WOCCU has worked with the orphanage since 2007 and now is focusing on sustainability efforts, including the construction of better facilities, access to water and food sources.

The orphanage volunteers in Busia have created a credit union to bring financial services to the community--efforts supported by WOCCU.

Two arrested for burglary after long standoff in CU

 Permanent link
NORTH HIGHLANDS, Calif. (3/5/13)--A man and a woman were arrested for burglary and other charges after a two-hour standoff with police while they were holed up inside a credit union operations center for  North Highlands, Calif.-based Safe CU.

Angelic Gonzales, 41, and Cody Muscarella, 27, were charged with burglary, conspiracy, obstructing/resisting arrest and being under the influence of a controlled substance in the incident, which occurred at about 8:30 a.m. Sunday (CBS Sacramento, News 10, and Fox 40.com March 3).

They allegedly smashed in the glass on the front door, entered the center and barricaded themselves inside.  Police were called when passersby said they heard loud noises coming from the center.  A SWAT team surrounded the building and spoke with the female suspect on the phone. She allegedly said they would not come out because a group of people were trying to get her. The SWAT team entered the building and the couple was arrested without incident.

Texas CUs' Loan Growth Doubled In 2012

 Permanent link
FARMERS BRANCH, Texas (3/5/13)--Texas credit unions added $3.24 billion in loans during the year, reaching a combined portfolio of $48.11 billion at year end--double the growth rate of 2011, according to the Texas Credit Union League.

First mortgages fueled the growth, increasing 14.3% in 2012. Mortgage loans have replaced auto loans as the largest segment of Texas credit unions' loan portfolios, the league said (LoneStar Leaguer March 4).

Texas credit union assets grew by $4.18 billion in 2012, ending the year at a cumulative $76.94 billion. 

Other financial highlights cited by TCUL include:

  • Texas credit union members added $3.66 billion to their savings accounts during the year, reaching $67.13 billion in savings at year end.
  • The percentage of Texas credit unions experiencing increased assets grew four percentage points over 2011, reaching 80.7% at year end.
  • Return on assets rose 22 basis points over 2011 after stabilization expenses were accounted for, reaching 81 basis points, the highest point in five years.
  • Roughly, 81.5% of Texas credit unions experienced positive return-on-assets ratios.
  • Net-worth ratios in Texas credit unions reached 10%, for the first time since the Great Recession. Also, 96% of Texas credit unions had a net worth ratio greater than 7%, the point at which the National Credit Union Administration considers a credit union well-capitalized.
  • Delinquencies and charge-offs fell again during 2012, with delinquencies accounting for 0.8% of total loans; net charge-offs reached 0.7% in 2012
  • The average savings balance for credit union members in Texas reached $8,553, the highest point in five years.
  • Texas credit unions maintain 46.1% market share of state consumers' checking accounts. Five years ago that figure was 40%.
  • Texas credit unions have penetrated a 0.2% market share of all member business loans. Other financial institutions still account for 99.8% of all small-business lending.

CU's Video Nabs Three National Telly Awards

 Permanent link
INDIANAPOLIS (3/4/13)--The Telly Awards has named Eli Lilly FCU (Elfcu) in Indianapolis and personal finance and social media guru Pete the Planner as three-time Bronze winners in the 34th Annual Telly Awards for "No One Leaves Their Money at the Office Door," about members' needs for financial assistance throughout their lives.  

With nearly 11,000 entries from all 50 states and several nations, the $1.02 billion asset Elfcu and Pete the Planner received:

  • A Bronze Award for Non-Broadcast Corporate Image;
  • A Bronze Award for Non-Broadcast Direct Marketing;  and
  • A Bronze Award for Non-Broadcast Health and Wellness.
The Elfcu video, "No One Leaves Their Money at the Office Door," tells the story of a typical workplace with characters who could be anyone's co-workers. In three minutes, the YouTube-based video introduces viewers to nine scenarios, covering the money challenges typical Americans face daily, even while at work.

One person is divorcing; another is behind on her mortgage; while another can't afford gas for her drive home. The story culminates with a woman who learns that her husband has just lost his job. The ultimate message to the viewer is: "You are not alone."

As the economy and labor market heal this year, consumers nationwide are still facing daily financial challenges--high gas prices, overdraft fees, the costly price of  divorce, tuition, infertility, job loss, and the list goes on, Elfcu said. Companies are not immune to the financial stress their employees are feeling, so many are looking to create financial wellness programming for the first time.

The Telly Awards honors film and video productions, Web commercials, and local, regional, and cable TV commercials and programs. The Telly's mission is to strengthen the visual arts community by inspiring, promoting and supporting creativity.

A panel of more than 500 industry professionals judged the competition. The council evaluated entries to recognize distinction in creative work. Entries do not compete against each other--rather entries are judged against a high standard of merit, said the credit union.

To see the video, use the link.

CUs To Furloughees: 'Be Assured, We've Got Your Back'

 Permanent link
MADISON, Wis. (3/4/13)--In a stellar example of credit unions putting members' interests above the bottom line, credit unions across the U.S. are rallying to assist members with furloughs that began at midnight Friday after the federal government's stalemate on wide-ranging budget cuts, called sequestration.

Among those who will be hit the hardest are civilians working for the government and military families. The Defense Credit Union Council says its member credit unions stand ready to help.

"All of our members have stepped up to the plate, as they've always done and always will," said Roland "Arty" Arteaga, president/CEO of the Defense Credit Union Council. "All of them are on edge" about what sequestration preposits, but many have already let members know they can get help through the furloughs from their credit union.

"Others are looking very closely so they can take measures [to assist] and so they can tell members, 'Be assured, we've got your back,'" he told News Now.

Sequestration doesn't affect just credit unions with a presence on a military base.  "Credit unions in general need to be sensitive to Army Reservists and National Guard citizens who aren't on a base but who still receive a furlough notice," said Arteaga. "We all need to be committed to our pledge of people helping people."

The furlough timing varies, beginning in April. Once the furlough begins, "civilian employees will lose one to two days out of each pay period while the furlough is in existence.  To lose that much pay is huge, given the economic environment," Arteaga said.

Here are just a few examples of how credit unions will help their members:

  • Belvoir FCU, Woodbridge, Va., created emergency loans up to $5,000 at fixed  4.99% annual percentage rate (APR), , with 0% APR the first 60 days and a maximum term of 12 months.  Members can defer the first payment for 60 days. Members must direct deposit.  They also can work with a loan officer on loan workout program, and--if they notify the credit union in advance--can skip a regular consumer loan payment. Members can also get free counseling on handling finances during the furlough.
  • Fort Meade Community CU, Fort Meade, Md., is planning to offer refinancing to lower payments, advance due-date options and short-term loans to bridge gaps in income, plus add delinquencies to the back end of a loan.
  • Fort Bragg, Fort Bragg, Calif., will extend existing loans up to six months with no payments, offer refinancing on both credit union and non-credit union financed vehicle loans and suspend those payments for six months, consolidate loans to reduce monthly payments, and waive early withdrawal fees on certificates.
  • Fort Campbell FCU, Clarksville, Tenn., will offer a payroll/employment gap loan of up to $2,500 at a fixed 5.99% APR and 0% for the first 60 days with no payment for 60 days, at a 12- month term. It, too offers a loan workout program, deferred loan payment and free financial coaching through BALANCE, a financial education and counseling service.
  • APG FCU, Aberdeen, Md., invited its members to call the credit union or visit a branch to discuss their situation. It offers loan assistance, expedited approvals, payment deferrals, free financial guidance and 24/7 educational resources.
  • Andrews FCU, Suitland, Md., offers a Sequestration Bridge Loan up to $5,000 at 0% APR for 90 days, with flexible terms up to a year and payment options such as personal signature loans, secured loans and home equity loans. It also provides financial tools for money management.
  • Hanscom FCU, Hanscomb AFB, Mass., whose Board Chairman Paul Marotta noted "we are true to our roots and the credit union motto, People Helping People," offers an interest-free Life Line Loan attached to the member's checking account to provide additional funds to cover checks, ATM withdrawals and debit card purchases. It also offers 0% APR line of credit for 30 days up to $5,000, and will wave penalties on premature withdrawals of certificates.
  • Scott CU, Edwardsville, Ill., is providing furloughed members with direct deposited paychecks a Sequestration Loan of $5,000 at 0% APR, with no payments for 60 days and one year to repay it After the first 60 days, the loan rate will be 4.75%.
  • AmeriCU CU, Rome, N.Y., is in a state that, according to U.S. Rep. Pete King (R-N.Y.), will be "disproportionately hurt" by cuts to programs such as  Hurricane Sandy relief and 9/11 victims compensation. It offers a Department of Defense Helpline, information, tips for handling financial stress and tells members it is "waiting to work with you to help you and your family through this potentially stressful time."
  • Randolph Brooks FCU, Live Oak, Texas, will provide assistance to federal civilian workers, some of whom might see 20% of their paychecks impacted.  They can withdraw money from their certificates without penalties, or bridge the pay gap with low-rate loans. Payment isn't due until December so members can use the funds gradually as a "step down" resource. "By providing resources to assist members dealing with sequestration, we hope to make their lives and finances a little less stressful," Mark Sekula, chief lending officer at RBFCU, told the Texas Credit Union League (LoneStar Leaguer March 1). "While we can't affect government decisions on payments and furloughs, we can give our members tools to handle a sudden decrease in pay, and to make the next several months more manageable."
  • Pearl Harbor FCU, Honolulu, Hawaii, has a legacy of supporting members over more than 75 years. It provided special assistance to members during World War II, as well as during and after the 2008 economic crisis by continuing free services and not increasing fees, and it offered free services during Japan's tsunami. "It's about helping people and it's more than business as usual--a core value that the credit union embraces," says its website. "Supporting our members in a time of financial crisis is important to us," said Eugene Y.T. Chang, president/CEO. "Providing assistance to our community is a vital part of our operation."  It will offer special furlough relief assistance and options including payment deferments and partial payment plans on existing loans, flexible payment arrangements and term modifications, and low-rate consolidation loans.
Credit unions' philosophy on the furlough issue was summed up RBFCU's Sekkula: "Our goal is to serve our members, whatever the situation. While we hope these financial impacts can be averted, we will be ready to assist our hard-working members with resources so they can continue to meet their obligations and take care of their families."

The sequestration budget cuts refer to a package of automatic federal spending cuts totaling $1.2 trillion, which took effect Friday.  News Now will report on other kinds of credit unions assisting with furloughs soon.  See related story, "How Is Your CU Aiding Members In Sequestration? Tell UniteForGood."

Tennessee Bill Would Allow CU Board Compensation

 Permanent link
NASHVILLE, Tenn. (3/4/13)--Legislation that would allow Tennessee state-chartered credit unions to compensate board members or reimburse them for any lost wages caused by time spent in the service of the credit union--but not both--has advanced in the State Senate and State House.

Tennessee is the second state, along with Washington, to consider such legislation in 2013. The legislative battle in Nashville has been going on since 2009.

According to the Tennessee Credit Union League, the original legislative proposal simply gave members of a credit union board the ability to compensate themselves and to set the amount of compensation. The league said there was broad, general opposition to the proposal from credit unions throughout the state, and the league board and management reflected that opposition in meetings with legislators on the committees that would hear the bill.

However, as TCUL President/CEO Fred Robinson told News Now, this year when it became apparent the bill would pass in some form, the league worked to negotiate some conditions that would be required for a credit union to compensate their board members.

In the bills now under consideration, the decision to reimburse or compensate is optional based on the credit union's philosophy to be governed by volunteers or compensated board members. Four conditions must be met.

House Bill 258 will be placed on the regular calendar for House consideration Thursday. Senate Bill 587 was referred to a committee Tuesday, and has not yet been scheduled to go before the full Tennessee Senate.

22 Inducted Into CU House Hall Of Leaders

 Permanent link
WASHINGTON (3/4/13)--Twenty-two leaders have been named to the Credit Union House Hall of Leaders, honoring their significant contributions to the credit union movement.

"The Credit Union House Hall of Leaders provides lasting recognition at the Capitol Hill facility for a distinguished group of individuals whose leadership serves as a model for credit union leaders throughout the country," said Richard Ensweiler, Credit Union House Chairman and president/CEO of the Texas Credit Union League.

"Their names remind the thousands who annually visit Credit Union House--which include prominent members of Congress--of the strong commitment to the values and mission on which the credit union movement was founded," Ensweiler said.

To date, 78 leaders representing 32 states have been inducted to the Hall of Leaders.  The 2013 inductees are:

  • John Annaloro, former CEO, Northwest Credit Union Association;
  • Susan J. Brayman, director, Bellco CU, Greenwood Village, Colo.;
  • Frank Berrish, president/CEO, Visions FCU, Endicott, N.Y.;
  • Marshall Boutwell, president/CEO, Peach State FCU, Lawrenceville, Ga.;
  • Ken Bradshaw, president/CEO, Liberty First CU, Lincoln, Neb.;
  • Loretta Burd, former president/CEO, Centra CU, Columbus, Ind.;
 

  • Mary Ann Clancy, senior vice president-general counsel, Massachusetts and New Hampshire Credit Union Leagues and Credit Union Association of Rhode Island;
  • Gary R. Clark, president/CEO, Missoula (Mont.) FCU;
  • Ron Collier, president/CEO, Indiana Members CU, Indianapolis;
  • Michael Connery, president/CEO, United Nations FCU, Long Island City, N.Y.;
  • Don Edwards, senior vice president government affairs, Illinois Credit Union League;
  • Clarence Hall Jr., president/CEO, Issaquena County FCU, Mayersville, Miss.;
 

  • Gail Krall, president/CEO, Minnesota Power Employees CU, Duluth, Minn.;
  • James "Jimmy" G. Lankford, former president, Alabama CU, Tuscaloosa,
Ala.;

  • Robin Lentz, president/CEO, Cabrillo CU, San Diego;
  • John McKenzie, president/CEO, Indiana Credit Union League;
  • Robert D. Ramirez, president/CEO, Vantage West CU, Tucson, Ariz.;
  • Randy Smith, former president/CEO, Randolph-Brooks FCU, Live Oak, Texas;


  • Marsha S. Tynsky, president/CEO, Trona Valley Community FCU, Green River,Wyo.;
  • Al Vukasin, president/CEO, Bear Paw CU, Havre, Mont.;
  • Michael A. Williams, president/CEO, Colorado CU, Littleton, Colo.; and
  • Bill Winter, president/CEO, St. Cloud (Minn.) FCU.

US Rep Bonamici Speaks At Global Women's Network

 Permanent link
WASHINGTON (3/4/13)--Rep. Suzanne Bonamici (D-Ore.), who co-sponsored the credit union member business lending (MBL) and supplemental capital bills, addressed the Global Women's Leadership Network at a breakfast event Wednesday during the Credit Union National Association Governmental Affairs Conference.

Speaking at a Credit Union National Association Governmental Affairs Conference Breakfast event Wednesday, Rep. Suzanne Bonamici (D-Ore.) applauded the work credit unions do to improve their local economies and the Global Women's Network's efforts to connect and support women.
Women credit union leaders from more than 23 states nationwide gathered at the National Museum of Women in the Arts to discuss current issues facing women in the industry and to hear from speakers about the role of credit unions and women in economic development.

Bonamici spoke to the group of 105 credit union executives and board members about the important role credit unions play in economic development. Many small businesswomen have been able to contribute to their local economies through the help of their credit unions, she said.

She applauded the network for the work it does and encouraged members to continue helping each other and to see value in learning different points of view.

Other speakers at the event included Bill Cheney, CUNA president/CEO; Teresa Freeborn, president/CEO Xceed Financial CU, El Segundo, Calif.; and Zixta Martinez, Consumer Financial Protection Bureau assistant director of community affairs.

The Northwest Credit Union Association (NWCUA) assisted in coordinating Bonamici's appearance.

"Rep. Bonamici is a powerful example of what it means to be a credit union champion," said Jennifer Wagner, NWCUA vice president of legislative advocacy and network member. "She understands the unique structure of Oregon's credit unions and the critical role credit unions play in their communities. Her first official action in Congress was to sign the credit union MBL bill last year, and she is back fighting for us again this year."

Last month, CUNA and credit unions reintroduced in Congress legislation to raise credit unions' MBL cap to 27.5% of total assets, up from the current 12.25%. Doing so would generate $14.5 billion available for MBLs--and increase jobs by 158,000 in the first year without costing the taxpayer, according to new statistics from CUNA. Enhancing credit unions' charter to include increased MBL authority is one of CUNA's top 10 priorities for 2013.

Also in February, Rep. Pete King (R-N.Y.) and Brad Sherman (D-Calif.) reintroduced legislation that would permit the National Credit Union Administration to allow credit unions to accept additional forms of capital. The legislation would improve the safety and soundness of credit unions by allowing them to develop a supplemental cushion to reduce risk to the National Credit Union Share Insurance Fund.

Click to view larger image Women from 23 U.S. states met and mingled at the National Museum of Women in the Arts, including (from left) Stacy Augustine, Northwest Credit Union Association general counsel; Mary Martha Fortney, National Association of State Credit Union Supervisors president/CEO; Orla Beth Peck, NASCUS chairman; Amy Rapp, consultant; and Lucy Ito, senior vice president of the California and Nevada Credit Union Leagues.
Click to view larger image Fredda McDonald (left), PSCU Financial Services executive vice president, chats with Bill Cheney, Credit Union National Association president/ CEO, at the Global Women's Leadership Network Breakfast in Washington, D.C. during CUNA's Governmental Affairs Conference. (Photos provided by World Council of Credit Unions)

Top 10 News Now Stories For February

 Permanent link
MADISON, Wis. (3/4/13)--A News Now special report about the ascendance of mobile banking among credit unions and second-generation mobile banking apps was the publication's most-read story in February.  Also at the top were stories from last week's Credit Union National Association Governmental Affairs Conference in Washington, D.C., featuring Speaker of the House John Boehner (R-Ohio) and Sen. Elizabeth Warren (D-Mass.).

The Top 10 News Now stories for the month:

10. Reps. King, Sherman Introduce Supplemental Capital Bill

WASHINGTON (2/14/13)--Rep. Pete King (R-N.Y.) and Brad Sherman (D-Calif.) today reintroduced legislation that would permit the National Credit Union Administration to allow credit unions to accept additional forms of capital.

9. NCUA Letter To CUs Cites 2013 Exam Goals

ALEXANDRIA, Va. (2/1/13)--Increased clarity in its guidance to its examiners and more consistency in its examination practices are a key supervisory focus of the National Credit Union Administration this year, said NCUA Chairman Debbie Matz in a Letter to Federally Insured Credit Unions released Thursday.

8. Ways And Means Launches Look At Tax Reforms With Charitable Deductions Hearing

WASHINGTON (2/7/13)--The tax policy-writing House Ways and Means Committee has scheduled a hearing next week on itemized charitable deductions. The hearing is part of what will be a broader look by the committee at the subject of comprehensive tax reform.

7. FHLBs Ask NCUA To Name Them As An Emergency Liquidity Provider

WASHINGTON (2/1/13)--As the National Credit Union Administration considers its emergency liquidity proposal for credit unions, the 12 Federal Home Loan Bank presidents have sent a joint letter asking the agency to name their system specifically within the plan as a source of backup liquidity.

6. NCUA Provides CUs With Cybersecurity Guidance

ALEXANDRIA, Va. (2/20/13)--The National Credit Union Administration has stepped into Washington's cybersecurity discussion, identifying appropriate policies and procedures to guard against distributed denial-of-service attacks in a new credit union risk alert (13-Risk-01).

5. CFPB: Financial Institutions Must Be Able To Make Non-QM Loans

WASHINGTON (2/8/13)--Financial institutions should be allowed to make mortgages that don't meet qualified mortgage (QM) standards under the new ability-to-repay rules. That is what Consumer Financial Protection Bureau Director Richard Cordray said Thursday in response to a Credit Union National Association question during a financial industry briefing on mortgage rules.

4. Boehner Zeroes In On Tax Reform At CUNA GAC

WASHINGTON (2/27/13)--One of the most prominent Republican policymakers on Capitol Hill today discussed one of the hottest, most debated topics ripped out of the headlines to a packed house of credit union representatives in town for the system's premiere governmental affairs conference.

3. Sen. Warren: CU 'Reliable' Model a Bright Spot In Economy

WASHINGTON (2/27/13)--Sen. Elizabeth Warren (D-Mass.), speaking to the Credit Union National Association's Governmental Affairs Conference here this morning, directed the spotlight to shine brightly on the credit union difference.

2. Strong NCUSIF, TCCUSF Performances Decrease Premium Chances

ALEXANDRIA, VA. (2/21/13)--The strong performance in 2012 of the National Credit Union Share Insurance Fund and the Temporary Corporate Credit Union Stabilization Fund, reported by the National Credit Union Administration today, decreases chances for a premium assessment this year.

1. CUs' Mobile Banking Enters Second Generation: Special Report

MADISON, Wis. (2/20/13)--Mobile banking is here to stay at credit unions. Today, about one-third of all credit unions offer mobile banking. The rest are likely to roll it out within the next 48 months. By comparison, online banking took about twice as long to reach similar numbers.

How Is Your CU Aiding Members In Sequestration? Tell Your Story

 Permanent link
WASHINGTON (3/4/13)--Credit unions helping members face furloughs implemented from the federal spending cuts that began Friday have an opportunity to "unite for good" and share stories of what they are doing through the Credit Union National Association and News Now.

Last week during its 2013 Governmental Affairs Conference, CUNA unveiled a "Unite For Good" rallying cry for credit unions. CUNA called upon credit unions to work toward a movement-wide strategic vision of creating a financial services environment in which "Americans choose credit unions as their best financial partner." Use the resource link below to see the Unite For Good webpage.

As News Now spotlights examples of the extra steps credit unions take to secure their members' trust in a series of stories highlighting the help sparked by sequestration cuts, credit unions also can e-mail their information to Uniteforgood@cuna.com, as well as newsnow@cuna.coop.

For examples of credit unions' efforts for furloughed members, see related News Now article, CUs To Furloughees: 'Be Assured, We've Got Your Back.'

Florida Public Deposits Bill Is No 1 Priority For LSCU

 Permanent link
TALLAHASSEE, Fla. (3/4/13)--The No. 1 priority for credit unions during the 2013 Florida legislative session convening Tuesday will be to allow credit unions to accept public deposits, the League of Southeastern Credit Unions and Affiliates announced Friday.

Senate Bill 918, sponsored by State Sen. Rene Garcia (R-Hialeah) and House Bill 251, sponsored  by State Rep. Bill Hager (R-Boca Raton), will seek to reverse the state law's mandate that public entities--such as fire and sheriff departments, schools and libraries--can only use banks and not their local, not-for-profit credit unions for their financial needs.

"Public entities should be given the choice to seek better returns for their tax dollars and lower fees for their business," said Patrick La Pine, LSCU president. "As not-for-profit financial entities that are held to the same standards as banks, credit unions deserve the opportunity to compete in this market and provide for greater consumer choice, accountability and a more stabilized market."

Credit unions are required to meet the same public depository requirements as for-profit banks. They also are held to the same accountability standards and must offer the same protections to their members. However, credit unions across Florida are forced to turn down deposit requests from local government entities because state law renders them ineligible to receive these funds, said the league.

If successful, the proposed legislation would give local elected officials depository choice and would allow credit unions to bring competition to public deposits that will drive better returns and economic benefits to Florida's taxpayers, LSCU said.

"One of the founding principles of credit unions is the commitment to give back to their communities and their members," Garcia said. "By allowing credit unions to accept municipal and public deposits, we would allow for yet another opportunity for credit unions to give back by passing on bigger savings to local governments, who in turn would put the money right back into the communities to meet service, infrastructure or public needs. I see this bill as another means of providing greater consumer choice, fairness in the market and maximizing yields of public funds."

Independent ATM Deployers' Top Concerns: Interchange, EMV

 Permanent link
BLOOMINGTON, Ill., and SIOUX FALLS, S.D. (3/1/13)--U.S.-based independent ATM deployers (IADs) say their top concerns are more reduction in interchange fees; network Europay, MasterCard and Visa (EMV) mandates; and further spikes in lawsuits against them about ATM surcharge notices, according to the most recent IAD survey.

However, despite challenges facing IADs, most deployers surveyed say their plans include growing their businesses during the next 12 months.

"I'm not surprised shrinking interchange is the No. 1 concern for ATM deployers," said Bryan Bauer, president of Kahuna ATM Solutions. "Between decreases in the published net interchange rates and the increased popularity in tiered interchange policies, ATM deployers on average have realized a 16% decline in interchange from one year ago, and a 33% decline in interchange over the past six years." 

Some of the survey's major findings were:

  • 63.8% of survey respondents chose 'Further Reduction in Interchange' as their biggest legislative/compliance/network fears, worries or concerns regarding the health of the ATM industry.
  • Complying with EMV migration deadlines was a major concern for IADs with 50% of respondents indicating it is one of their biggest legislative/compliance/network fears, worries or concerns.
  • 64.4% of respondents would like more information on the U.S. EMV requirements, 62.6% are interested in what the cost involved with EMV migration will be, and 40.1% would like to know what the implications of Visa/MasterCard's liability shift will be on the ATM industry.
Co-sponsored by the ATM Industry Association and Kahuna ATM Solutions, the third annual IAD survey covered topics of importance to ATM deployers, including: concerns about the health of the ATM industry; legislative and compliance issues; migration to EMV; mobile payments; deployers' products and services; and the future of U.S. IADs.

To download a copy of the full survey report, use the link.

Should CUs Offer Portable Account Numbers To Switch FIs?

 Permanent link
IRVING, Texas (3/1/13)--About 61% of U.S. consumers surveyed in a global study want a portable account number that would allow them to switch financial institutions without changing account details. The idea could be a boon--or a bust--for credit unions.

The percentage of U.S. consumers who favored a portable account was the lowest among the six countries, which ranged from 62% in the U.K. to 76% in Spain, according to the online YouGov study conducted by British Telecommunications (BT) Global Services. It surveyed 6,500 people in the U.S., United Kingdom, Germany, France, Hong Kong and Spain.

Switching from banks to credit unions helped prompt 2.2 million new members in a 12-month period surrounding Bank Transfer Day, according to Credit Union National Association statistics. Many credit unions that capitalized on consumers' dissatisfaction with bank fees in 2011 and 2012 helped make it easier for new members to transfer their accounts by offering Switch Banks tool kits.

But to offer a portable account number, credit unions will find that the devil is in the details. The study pointed out that many of those surveyed had mixed feelings about financial institutions sharing their infrastructure and having access to customers' personal information. Roughly 38% said banks sharing infrastructure would be a bad idea even though the idea had the potential to improve competition and make it easier to switch institutions. Roughly 28% were undecided.

"There is clearly an appetite for technology and services which help increase transparency and competition, such as number portability and richer online comparison tools," said Tom Regent, president, global banking and financial markets at BT Global Services. "But there is also a significant level of apprehension around the creation of a shared banking infrastructure."  Consumers, he added, will need "reassurance around security and protection of their data."

Other key findings in the survey:

  • Most respondents did not consider engaging in dialogue or sharing information with their financial institutions over social media channels as a priority. Instead, when asked which three tools they most would like their financial institution to provide, consumers said they wanted more sophisticated online tools such as peer review sections, 32%; webchat facilities, 23%; and "compare-my-bank" type services, 29%.
  • The three most important factors to consumers in considering moving financial institutions were: good online banking facilities, 39%; the presence of a local branch, 45%; and the ability to access banking services 24/7, 29%.
For more information, use the link.

Young Adults Have Fewer Homes And Cars, Less Debt

 Permanent link
WASHINGTON, D.C. (3/1/13)--Since the Great Recession, young adults have bought fewer homes, purchased fewer cars, and accumulated less debt than they did before the recession, and they are shedding debt faster than older generations, says a Pew Research Center analysis of government data.

For credit unions, this may mean delayed gratification in lending to this group. It also means an opportunity to build relationships with young adults before they get to the end zone in taking out larger loans.

This shedding of debt is an about-face from pre-recession years, when adults younger than age 35 racked up record debt-to-income debt, according to the report, which the Washington, D.C.-based Pew released on Feb. 21. Since the recession, they have shed that debt at a faster rate than older adults-- not because they are paying off the debt, but because they aren't taking on any new debt, including houses and cars.

Pew analyzed Federal Reserve Board and other government data for the report.  It found:

  • The median debt in young adult households dropped 29%  from 2007 to 2010. That compares to an 8% drop among households headed by adults age 35 and older for those years. The share of younger households holding any kind of debt fell to 78%--the lowest level since the government began collecting that data in 1983.
  • Young adults' decline of debt during tough economic times is driven largely by the shrinking percentage of this group who own homes and cars. However, it also "reflects a significant decline in the share who are carrying credit card debt," said the report. This group's credit card debt was 39% in 2010--down from 48% in 2007.
  • Young adults carried more student loan debt after the recession. In 2010, 40% of young adults surveyed owed on a student loan, an increase from 34% in 2007 and 26% in 2001. However, the median owed was less in 2010--about $13,410--than the $14,102 owed three years earlier.
  • Younger households who owned their primary residence fell to 34% in 2011 from 40% in 2007.  The drop accompanied a decline in households with debt secured by residential property. In 2010, their median residential property debt totaled $128,000, compared with $150,000 in 2007.
  • In 2011, roughly 66% of adult households headed by an adult younger than 25 had either a leased or owned vehicle. That compares with 73% four years earlier. For households headed by adults younger than 35 years, 32% owed vehicle debt in 2010, compared with 44% owing that debt three years earlier. The vehicle debt amount also fell--to $10,000 in 2010 from $13,000 in 2007.
  • Younger households pared their credit card balances. In 2010, about 39% carried a balance, down from 48% in 2007 and 50% in 2001. The median owed fell to $1,700 in 2010 from $2,500 in 2001.

New CU To Combat Payday Lending With Education

 Permanent link
KALAMAZOO, Mich. (3/1/13)--The newly opened Community Promise FCU in Kalamazoo, Mich., is looking to be an agent of change by using education to combat payday lending abuses targeting the city's low- and middle-income populations.

The Michigan Credit Union League offered advice to the new credit union, as did other credit unions in the state and the Michigan Credit Union Foundation when the credit union was being established. The league will continue to offer advice and support as it does with all small-asset-size credit unions, Mona Shand, MCUL manager of public relations, told News Now.  

To help members obtain a better understanding of borrowing and lending, the community development credit union explains how borrowing money works, said Jim Houston, chairman of the board of directors for Community Promise (mlive.com Feb. 27).

The credit union's lending involves a large educational  component, Lee Kirk, Community Promise director of community relations, told the publication.

Community Promise will teach basic money management skills by working with two organizations--Kalamazoo Public Schools and Communities in Schools of Kalamazoo.

The credit union will help provide members with financial services that are not offered by bigger financial institutions, Kirk told mlive.com.

Those services include: credit-building loans up to $2,500 during a 12-month period; unsecured emergency loans of up to $2,500 for 12 to 24 months; short-terms loans for up to $1,000, to be repaid in six months; auto loans for up to $5,000, to be repaid in 24-, 30- or 36-month terms; and shared secured loans of up to $5,000 to be repaid in up to 60 months.

Community Promise also offers check-cashing services for $3 without a compensating balance, money orders, notary public service, and handling outgoing wire transfers.

A high volume of low-level loans is needed to make the credit union successful, Kirk told the publication. Community Promise is looking to attract 35 new members each month, issue at least 12 loans per month and eventually grow its ranks to 2,000 members, he added.

Other credit union organizations supporting the new credit union include: the National Federation of Community Development Credit Unions, Educational Community CU in Kalamazoo and  First Community FCU in Parchment, Mich., said mlive.com.

To read the article, use the link.

CU System Briefs (03/01/2013)

 Permanent link
  • LAS VEGAS (3/1/13)--Brent Edward Lovett, 50, of Henderson, Nev., was convicted Wednesday in a jury trial of defrauding Lockheed FCU with a $7.5 million commmercial real estate loan (Fox5vegas.com Feb. 27). In 2006, Lovett's company, Bay Resorts International, leased two Las Vegas buildings that later were purchased for $6 million. Another company he allegedly controlled, Equity Resource Inc., then purchased the buildings for $10 million with a loan from the credit union. He was charged with providing false information to obtain a loan and skimming $1.3 million of the proceeds. Lovett faces up to 30 years in prison and a $1 million fine. Sentencing is set for May 29 …
  • LANSING, Mich. (3/1/13)--Leaders from Michigan's Grand River Chapter met Feb. 19 at Grand Rapids Family CU with Marliss McManus, legislative director to U.S. Rep. Bill Huizenga (R-Mich.) to discuss several of the Michigan Credit Union League's  legislative issues, said the league (Michigan Monitor Feb. 25).  Huizenga is a majority member on the U.S. House Financial Services Committee. McManus, shown third from left, handles all financial services industry issues for the congressman. The group discussed regulatory relief including several recent Consumer Financial Protection Bureau proposals; legislation to eliminate the annual mailing requirement for privacy notices, raising the member business lending cap to 27.5% of assets from 12.25%;  supplemental capital, examination fairness and preserving the credit union tax exempt status. The Credit Union National Association has named these issues among its priorities list for 2013, with preserving credit unions' tax exemption as the No. 1 priority.  McManus said government-sponsored enterprise reform is one of Huizenga's top priorities for the year. He is an original co-sponsor of the privacy notices legislation and continues to be a strong supporter of credit unions, the league said. MCUL Director of Government Affairs Jordan Kingdon attended the session …
  • RALEIGH, N.C. (3/1/13)--Tony Almeida, senior advisor to North Carolina Gov. Pat McCrory for jobs and the economy, visited Raleigh-based State Employees' CU to show his support of its participation in the North Carolina Business Committee for Education's Students @ Work Week.  Almeida is shown here speaking to students while Jo Anne Sanford,  SECU board member, and Tim Swinson, vice president of SECU's Centennial Parkway Branch, look on from the far left. Seventeen eighth graders from Daniels Middle School learned the importance of staying in school to further their education. Raleigh-NSCU branch staff coordinated the effort and provided a hands on real-world financial education exercise for the students.  (Photo provided by State Employees' CU) …
  • LEBANON, Conn. (3/1/13)--Edgar Roy Colville III of Lebanon, Conn., died Monday in New London at the age of 82. Colville was a member of the board of the Electric Boat CU (now Charter Oak FCU, Groton, Conn.) for 25 years. He served as board secretary for 22 of those years. A designer with Electric Boat, he revolutionized the communication of information from the field to the design department and from the department to the trades with isometric sketches instead of traditional ortho-graphic projection sketches. He also was active in the Marine Draftsmen's Association, the designers' union, where he served as president for 12 years. He is survived by his wife, one son, a grandson, a brother and a sister …

Several CU Mergers Announced

 Permanent link
MADISON, Wis. (3/1/13)--The credit union industry continues to consolidate, with mergers announced in the past week by credit unions in six states. They include:

New Mexico:  Members of Albuquerque-based New Mexico Energy FCU, with $50 million in assets, voted Wednesday night to merge with the $1.29 billion asset New Mexico Educators FCU, also based in Albuquerque. The credit unions' websites said 91% of voting members approved the merger. The merger was attributed to New Mexico Energy's small size, increased competition and economic pressures that affected its growth while expenses rose (Albuquerque Business First Online Feb. 21).

Connecticut:  Charter Oak FCU, a $750 million asset credit union in Groton, Conn., has filed an application with state and federal regulators to merge with Putnam, Conn.-based, $1.2 million asset Quiet Corner Community CU. If approved, Quiet Corner would become Charter Oak's 13th branch in the region. Audrey Lefevre, Quiet Corner manager and treasurer, would remain on staff to head Charter Oak's new operations in Putnam. Quiet Corner has 611 members; Charter Oak has nearly 65,000 members (The Day Feb. 27).

Texas-Kansas: Fort Worth, Texas-based Unity One CU has acquired Argentine CU of Kansas City, Kan. Adding the 1,900-member and $19 million assets of Argentine CU brings Unity One to 24,000 members and more than $212 million in assets (LoneStar Leaguer Feb. 27).

Texas:  Two Fort Worth, Texas-based credit unions will combine, effective May 31 (LoneStar Leaguer Feb. 27). Fort Worth Telco CU will merge with EECU in an effort to provide enhanced product and service offerings to Telco's 5,000 members. EECU serves more than 167,000 members and has nearly $1.5 billion in assets.

Michigan:  The merger of Charlotte, Mich.-based Eaton County Educational CU into East Lansing, Mich.-based Michigan State University FCU is set to take effect on April 1 (SNL Bank and Thrift Daily Feb. 22 and Lansing State Journal Feb. 21).  ECECU has $32.8 million in assets and nearly 4,000 members who work in the county's schools and businesses. Michigan State University has $2.3 billion in assets and about 169,000 members. The merger was approved by state and federal regulators. Earlier this month, about 95% of voting members at ECECU voted for the consolidation. Its leaders proposed the merger as a result of economic conditions that made it challenging to grow. ECECU staff will become MSUFCU employees.

Ohio:  Athena CU, a $14.2 million asset credit union in Springfield, Ohio, will merge into International Harvester Employee CU, a $255 million asset credit union, also located in Springfield.  Board members of both credit unions voted Feb. 20 to merge. The merger will be effective April 1. IHECU has more than 15,800 members and Athena has 1,933 members. Athena's staff will become employees of IHECU.

LendKey Raises $5K For CUAid With Goodwill Wall At GAC

 Permanent link
WASHINGTON (3/1/13)--
Click to view larger image CUNA Strategic Services provider LendKey donated $5,000 to the National Credit Union Foundation's CU Aid disaster relief program during the Credit Union National Association's Governmental Affairs Conference. From left: Wes Millar,  CSS senior vice president; Jim Merrill, LendKey senior vice president of client services; Vince Passione, LendKey CEO; Tom Candell, NCUF deputy executive director, chief operations officer and chief financial officer; and Christopher Morris, NCUF director of communications. (Photo provided by CUNA)
The small gesture of sharing an individual business card resulted in a large outpouring of support for victims of Hurricane Sandy at the Credit Union National Association's Governmental Affairs Conference in Washington, D.C.

LendKey Technologies, which is a CUNA Strategic Services provider, donated $5,000 to CUAid--the credit union disaster relief fund managed by the National Credit Union Foundation.

The company, formerly known as Fynanz, had pledged a $5 donation for every business card that GAC attendees pinned to the Goodwill Wall in its exhibit hall booth during the convention.

Vince Passione, LendKey CEO, thanked GAC attendees who took the time to visit the booth and support its efforts.

"Our employees, and many of our clients, were in areas hit the hardest by the storm," he said, noting that the contributions would go "toward helping the victims recover fully."

LendKey, based in New York and with offices in Ohio, provides a cloud-based lending platform for credit unions to make private student loans to their members.