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Detroits cash-strapped schools turn to ads for funds

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DETROIT (4/2/10)--Cash-strapped school districts in Detroit are presenting a marketing opportunity for credit unions by allowing advertisements on gym walls, athletic fields and school websites to help earn funds for the school districts. The key categories for ad sales include credit unions, banks, car dealers, quick-service foods, and fine dining restaurants, said Alternative Revenue Development, a Bloomfield Hills-based company that is selling the idea to schools. The first campaign will roll out at Trenton High School April 14, with three other Downriver districts participating. In August about 30 more school districts will begin displaying ads. Trenton-based Metro Shores CU said its ad campaign is half philanthropic, considering the state's funding crisis, but the ad campaign is expected to bring in business. The credit union has a sign on the school campus and website, and can set up a booth at sporting events to distribute brochures and talk to potential members The revenue generator comes amid a state funding crisis that is forcing school districts to get creative in making more revenue.

Neighbors FCUs program puts people in cars

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BATON ROUGE, La. (4/2/10)--Neighbors FCU, Baton Rouge, La., is working with an Enterprise Rent-A-Car dealer and Catholic Charities in a special loan program to help people get transportation to and from work. Enterprise sells cars that it is replacing in its rental fleet, all about one or two years old and worth about $10,000. Catholic Charities puts up $2,500 for a down payment, the first three monthly payments and to help with car insurance. The credit union provides low-interest loans to people who otherwise wouldn't qualify for them (The Advocate March 19). The Moving Toward Self-Sufficiency Program started after Hurricane Katrina drove thousands of people from New Orleans to Baton Rouge. Many had relied on New Orleans' public transportation to commute to work. Baton Rouge's bus system didn't meet their needs. Transportation prevented people from getting to work. Catholic Charities tried to solve the problem by buying inexpensive cars for clients needing transportation, but the vehicles broke down often and the organization couldn't fix them. Enterprise regional marketing manager Kevin Guice began working with the credit union and Catholic Charities on a solution, which turned out to be the loan program. Of the 60 participants so far, only one has defaulted, Steve Webb, chief operations officer at Neighbors FCU, told The Advocate. Everyone pays because they understand they're being given an opportunity and they need to uphold their end of the process, Webb said. Neighbors FCU provides basic financial training of the program's participants, all Catholic Charities clients. Participants are encouraged to open a checking account, use direct deposit and become educated about high-cost financing they should avoid, Webb told the publication. Seed money from the Baton Rouge Area Foundation helped start the program, and grants from the National Credit Union Foundation and Enterprise Foundation got it operating. The Catholic Charities is holding a raffle to keep the program going.

CUs showcase efforts in Financial Literacy Month

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WASHINGTON (4/2/10)--April is Financial Literacy Month, an opportunity for credit unions to showcase their financial literacy education efforts for an entire month. Many are focusing on promoting savings through the Credit Union National Association's (CUNA's) National Youth Saving Challenge. And National Credit Union Youth Week April 18-24 will bring opportunities to show what credit unions can do. National Financial Literacy Month is part of a national awareness campaign with the goal of increasing public knowledge about the need for and the value of personal financial education and how to obtain it. "CUNA is proud to carry on the legacy of its member credit unions through its support of Financial Literacy Month," said CUNA President/CEO Dan Mica. "In fact, since 2004, CUNA, the leagues and our member credit unions went a step further by launching the National Credit Union Youth Week, which puts into action for our young people the teachings of financial literacy--in particular, by learning how to become savers. "Last year, nearly 140,000 youth participated in our program, saving more than $26 million--double what they saved the previous year and a record. We look forward to another record-setting year--and helping our members, and future members, become ever more financially literate," Mica said. This year's saving challenge theme is "Get in the Savings Game at the Credit Union," and the sports theme is popular with credit unions. But credit unions are serious about their efforts.s Redwood CU, based in Santa Rosa, Calif., said its planned festivities include free educational seminars for children, teens and parents, plus contests, informative handouts, giveaways and more. The seminars include "Today's Money Smart Family," for parents, kids and teens; "Winning the Savings Game," with basic financial concepts and benefits of saving designed for elementary students and their parents; "Be a Player in the Savings Game" for younger teens; and "Smart Spending in the Real World," a hands on guide to help teens prepare for college and the work force. Credit unions are getting creative, too. At Portland (Mich.) FCU, one of the activities scheduled is "an M&M budget lesson" for middle school students. Several credit unions in St. Louis, Mo., are donating $5 to Children's Miracle Network for every new youth account opened or $50 deposit made into an existing youth account, according to Electro Savings CU. Industrial FCU, Lafayette, Inc., will use an adapted version of Aesop's fable, "The Ant and the Grasshopper" to teach the concept of opportunity cost--saving now and spending later--and ask kids to write their own ending. "National Credit Union Youth Week provides us a great opportunity to educate young people about financial matters in a fun and exciting way," said Lee Alderman, assistant vice president of educational development at Redwood CU. "Engaging them with fun opportunities like Credit Union Youth Week is the first step in helping them develop responsible money habits at an early age, which will benefit them for a lifetime."

IUSA TODAYI Student branches dispense financial sense

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NEW YORK (4/2/10)--Students across the nation are getting hands-on financial experience through credit unions and banks operating in schools, says a prominent story in Thursday's USA TODAY. While the Federal Deposit Insurance Corp., told USA TODAY that banks have several dozen in-school branches, "the number of credit unions partnering with schools is even greater (than banks); there are at least 324 credit union in-school branches" tracked by the National Credit Union Administration," the national publication said. Working with schools is an opportunity to promote financial literacy, an area of weakness in school systems, Janine Williams, vice president of marketing at the University of Virginia Community CU, Charlottesville, Va., told the newspaper. "It fits our vision of improving the financial lives of our members and our community," she said. The article also noted that since an in-school branch of Appleton, Wis.-based Community First CU, opened in December at Jefferson Elementary School, 125 savings accounts have been opened. The student credit union is run by fifth and sixth graders. Use the link for the full article.

CU savings growth for February strong at 1.9

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MADISON, Wis. (4/2/10)--Savings growth at credit unions was strong in February--at about 1.9%, according to the Credit Union National Association’s (CUNA) Monthly Credit Union Estimates for February. February typically experiences growth of 0.9% when adjusted for seasonal variation. The additional 1% signals underlying trend growth, said Steve Rick, CUNA senior economist. If the growth continues--at an additional 1% each month for the remainder of the year for a total of 12%--credit unions will experience strong savings, he said.
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One continued development taking place is that consumers are paying down their debts. For the first two months of the year, all mortgage categories were negative, meaning that the mortgage loan balance is falling. “People are paying their mortgages off faster than they are taking on new ones,” Rick said. Credit union loans outstanding decreased 0.6% during February, down from a 0.5% increase during January. Home equity loans and used-auto loans decreased 0.1% and 0.3%, respectively. Fixed-rate mortgages decreased 0.4%, followed by unsecured personal loans and credit card loans, each of which decreased 2.0%. Adjustable-rate mortgages led loan growth, increasing 0.1%. Overall loan growth was weak at 1.1%, due to uncertainty in the labor market. “People don’t want to borrow,” Rick said. The delinquency rate at credit unions is rising at a slower pace and is headed for a peak. “If we hit a turning point, the rate will go down,” Rick said. The rate has been rising for the last few years because of the recession. “If jobs come back, we could see delinquencies start to fall,” he added. Rick also noted the continued drop in share certificates. One-year certificates dropped by 0.3% in February and by 1.1% in January. As the certificates mature, people are deciding not to get another certificate and placing their money into a money market account. People are waiting for the rates to rise, Rick said. During February, share drafts increased 5.7%, followed by regular shares and money market accounts, which increased 3.9% and 1.4%, respectively. Individual retirement accounts increased 0.1%. Another area of interest is the loan-to-savings ratio, which has dropped significantly since last year, Rick said. The loan-to-savings ratio decreased to 74.4% in February 2010 from 79.6% one year ago. The liquidity ratio, the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities, remained at 19%.
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Credit unions have deposits to make more loans, but consumers are not seeking loans because of uncertainty in the job market. Credit unions are instead investing the money into short-term investments like Treasury bonds. Placing the money into short-term investments will keep downward pressure on credit unions’ earnings. “Credit unions would rather put that money into a mortgage,” Rick said. When the labor market picks up, the loan market will pick up, he added. He also noted that the Fed will not change interest rates until the fall. “The low-rate environment will continue,” he said. The movement’s overall capital-to-asset ratio remained at 10% in January 2009. The total dollar amount of capital is $90 billion.

Vote expected today on Vermont credit card bill

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MONTPELIER, Vt. (4/2/10)--A final reading and vote on an amended credit card bill that would give Vermont merchants the power to refuse some credit cards is expected in the Vermont Senate today, according to the Association of Vermont Credit Unions (AVCU). SB 138, which if passed would be the first state law in the nation on the issue, is opposed by credit unions, banks and electronic payments processors and favored by the merchants and their associations. The bill began as a consumer protection bill that largely duplicated the federal Credit Card Accountability, Responsibility and Disclosures (CARD) Act, but it has ended up a merchant protection bill, said Joe Bergeron, AVCU president/CEO. Credit unions and others activated their grassroots efforts and over last weekend met with legislators to lobby against the bill on the basis that it duplicated the federal act and the state should let the federal act play out before attempting to address the issue. On Tuesday the bill had only half of the Senate's support at the first reading. However, the 11th hour amendments offered Wednesday by the merchants' groups in a so-called "compromise" bill, received the full support of the Senate. The legislation is ill-conceived, said Bergeron. "We understand the merchants' dilemma and we're willing to work with them, but we can't go along with legislation that favors one side--the merchants--and hurts all the others, including credit unions, banks and processors and consumers," he told News Now. The measure needs a thorough examination by those knowledgeable about the payments process, he said. The latest amended version of the bill, which passed a second reading, 30-0 on Wednesday, would:
* Allow merchants to set minimum and maximum amounts for acceptance of debit and credit cards. * Forbid electronic payments system network processors from imposing penalties or requirements on the way merchants advertise, thus allowing merchants to add a surcharge for customers using a credit or debit card. Bergeron noted that merchants already can allow a discount for using cash. * Require a state regulatory study, due Dec. 15, 2011, to determine the economic impact on banks, credit unions and consumers of prohibiting electronic networks from inhibiting merchants as to whose cards they can not accept.
The bill would result in "Vermont becoming an island in the electronic funds transfer (EFT) world," Bergeron said. "It will have a negative effect on cardholders from credit unions and banks...who will find surcharges when they go skiing in Vermont, or find they can't use their card because they're not spending enough or spending too much," he said. The bill would be detrimental to credit unions, he said. "I'm a credit union and I give my member a card. And the member finds it's not working at certain locations. I have to decide whether to continue to issue plastic." He noted it was also bad for Vermont's economy. "It's a very complicated issue and not an easy fix." If passed today, the bill then goes to the House. AVCU is already addressing the issues with some House members but much will depend on which committee gets the bill. Vermont is already two-three weeks past the date in which bills can cross over from one legislative chamber to the other. There likely would not be much work on the bill until after the holiday "so there's not a lot of time," Bergeron told News Now. AVCU and credit unions will get a critical opportunity to lobby their case with lawmakers on Thursday afternoon during credit unions' Legislator Appreciation Reception, he said.

Top 10 INews NowI stories for March (04/01/2010)

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MADISON, Wis. (4/2/10)--An article about the 10 places consumers should not use their debit cards leads March’s top 10 list of News Now stories. Top stories include: 10. NCUA says ‘cease’ building plan to CU in S.D. ALEXANDRIA, Va. (3/4/10)--The National Credit Union Administration on Wednesday issued a cease and desist order against South Dakota-based Rapid City Telco FCU. 9. CUNA comment on corporates suggests new model WASHINGTON (3/10/10)--Credit Union National Association President/CEO Dan Mica in a comment letter to the National Credit Union Administration said that CUNA supports corporate credit unions but not the business model that many, but not all, used. 8. CUNA applauds NCUA on ‘legacy asset’ timetable ALEXANDRIA, Va. (3/24/10)--Credit Union National Association President/CEO Dan Mica yesterday commended the National Credit Union Administration’s projected timetable for solving the corporate credit union “legacy asset” issue. 7. Matz responds to CUNA urging to help CUs bear NCUSIF costs WASHINGTON (3/22/10)--Responding to the Credit Union National Association’s urging to help credit unions deal with unprecedented National Credit Union Share Insurance Fund costs, Debbie Matz wrote that the National Credit Union Administration will look at the operating level target in the fall. 6. Compliance Challenge: Can CUs give overdraft incentives? WASHINGTON (3/9/10)--In this month’s Compliance Challenge, the Credit Union National Association addresses a question regarding overdraft protection policies. 5. 42 charged in Fla. fraud ring, targeted CUs ORLANDO, Fla. (3/26/10)--Florida law enforcement authorities are looking for the ringleader of a fraud and identity theft ring involving 42 people who stole more than $200,000 from five Orlando area credit unions over three years. 4. Compliance: Answers to overdraft questions WASHINGTON (3/17/10)--The Credit Union National Association has added five questions to its “frequently asked questions” on Regulation E’s new overdraft rules requiring members to consent before being assessed fees on overdraft services for ATM and one-time debit card transactions. 3. CUNA Compliance: CUs need to review check-hold disclosures WASHINGTON (3/2/10)--As of Feb. 27, the Federal Reserve Board consolidated all its check-processing operations into Cleveland, Ohio. This action eliminates all “nonlocal checks” under Regulation CC, which implements the Expedited Funds Availability Act. 2. Three banned from CU work ALEXANDRIA, Va. (3/22/10)--The National Credit Union Administration issued orders prohibiting the following individuals from participating in the affairs of any federally insured financial institution. 1. CreditCards.com lists 10 places not to use a debit card MADISON, Wis. (3/18/10)--There are 10 situations where consumers should keep their debit card in their wallet, according to CreditCards.com. Susan Tiffany, the Credit Union National Association’s director of consumer periodicals, provides some of the advice.

PCUAs iBelong campaign aims to fuel growth

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HARRISBURG, Pa. (4/2/10)--The Pennsylvania Credit Union Association’s (PCUA) iBelong campaign began a new series of television and radio ads this week. The spots will run throughout the year.
The Pennsylvania Credit Union Association's iBelong campaign began a new series of television and radio ads this week that will feature credit union members in their homes and at work. (Photo provided by the Pennsylvania Credit Union Association)
The campaign portrays credit unions as local, stable and willing to lend to consumers and small businesses, said PCUA (Life is a Highway April 1). The new radio and television spots feature credit union members in their homes and at work. “Our original ads stressed eligibility [for membership],” said Mike Kaczenski, chair of the Advocacy Marketing/Steering Committee, which is comprised of 18 credit union marketers and developed the campaign’s new creative. “But given the recent economic events, we decided to go more aggressive and encourage people to move their funds from a large bank to a credit union. We hope the campaign helps fuel the growing ‘Move Your Money’ sentiment sweeping the country.” The campaign website, iBelong.org, also was redesigned. Credit unions can access media schedules and other campaign information through the iBelong page on PCUA’s website, and obtain campaign graphics, logos and marketing assistance from cuink.com. The annual member growth rate among Pennsylvania credit unions was 2.4% at the end of 2009, above the national average of 1.4%, noted Jim McCormack, PCUA president/CEO. “Certainly iBelong played a large role in this increase,” he said. For more information, use the link.

CU System briefs (04/01/2010)

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* ALBANY, N.Y. (4/2/10)--The New York Credit Union Foundation (NYFCUF) announced that students from Irondequoit High School, Rochester, N.Y., have won the 2010 New York State LifeSmarts title after defeating 54 other teams in the online competition. The competition was coordinated in New York by the foundation. LifeSmarts ... the Ultimate Consumer Challenge is a financial education competition for students in grades 9-12. Here, Michael Vadala, left, foundation board member and CEO of The Summit FCU, presents the team with a $500 check to cover any expenses incurred when it vies for the National LifeSmarts title in Florida. With Vadala are, from left, Muhammad Zahid, Samantha Jebbett, Daniel Lenzi, Connor Enright, Alicia Kolacki and team coach, Louis DiCesare. (Photo provided by the Credit Union Association of New York) ... * HARRISBURG, Pa. 4/2/10)--Lancaster-area credit union representatives met with U.S. Rep. Joe Pitts (R-16) at Lancaster Red Rose CU, according to the Pennsylvania Credit Union Association (PCUA)(Life is a Highway March 31). Pitts is a co-sponsor of H.R. 3380, the Promoting Lending to America's Small Business Act of 2009, which would raise credit unions' member business lending cap. Participants shared stories about what they are doing for their members and small business during the tough economy. Discussions also covered the recently passed health care bill, student lending and spending. From left: Vernon Grant, controller, Wheatland FCU; Lonny Mauer, State Credit Union Advisory Committee member and CEO, Belco Community CU; Kathy Rye, CEO, Wheatland FCU; Barry Ashenfelder, president/CEO, Lanco FCU; Rep. Pitts; Kent Hartzler, CEO, Mennonite Financial FCU; Abby Achey, PCUA Governmental Affairs Committee member and CEO, Lancaster Red Rose CU; Diana Roberts, PCUA Board member and CEO, Hershey FCU; and Carol Humenick, PACUA Governmental Affairs Committee and senior vice president, Citadel FCU. (Photo provided by the Pennsylvania Credit Union Association) ... * BROOKLYN, N.Y. (4/2/10)--Brooklyn (N.Y.) Cooperative FCU President/CEO Samira Rajan, was named one of Crain's New York Business magazine's "40 Under 40." The annual list recognizes 40 New Yorkers who excel in their fields before turning age 40. Rajan started at Brooklyn Cooperative--a community development credit union serving Brooklyn's Bushwick and Bedford-Stuyvesant neighborhoods--in 2001 as an intern after receiving her master's degree in public policy from Harvard University. She became loan officer, then chief operating officer, and in 2008, CEO. Rajan is also director of Grow Brooklyn, the credit union's non-profit affiliate that allows the credit union to provide high impact services such as foreclosure prevention services and free tax preparation to low-income members. The credit union has $9.4 million assets ...

CUANY commission to address young adult needs

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ALBANY, N.Y. (4/2/10)--The Credit Union Association of New York (CUANY) has created a Young Professionals Commission to explore the need for New York credit unions to reach young adults for membership growth, and for recruitment and retention of young employees and volunteers.
Click to view larger image Brent Dixon (standing) leads members of the Credit Union Association of New York's new Young Professionals Commission through an exercise as a prelude to the group's brainstorming session. (Photo provided by the Credit Union Association of New York)
"Following the association's 2009 Young Adult Initiative through REAL Solutions, we realized that if we are to lead the way in helping New York credit unions stay relevant, we needed to tap into the best possible resource--young adult credit union employees and volunteers," said William J. Mellin, president/CEO of the association. Mellin requested nominees for the 30-member commission from the state's credit unions. Allison Doney, CUANY's community development coordinator, was appointed staff liaison. The commission is charged with developing strategies and practices to assist CUANY and its credit unions with recruiting and developing young adults into leadership positions within New York's credit union community. The commission's first meeting discussed the association, outreach and how the group was formed. The day ended with a brainstorming session that resulted in great ideas, said the association. Ideas ranged from an industry-wide brainstorming network to a formal mentorship program, to a national day of outreach and action from credit union people. "I wish more leagues and associations had groups like this," said Brent Dixon, young adult advisor at The Filene Research Institute, who facilitated the commission meeting. "In the end, if you want to learn about a group of people, you talk to them. You build a relationship. That's what New York has done." The group's next meeting will be a conference call to begin identifying action steps, followed by an in-person meeting during the association's Annual Convention in Cooperstown June 6-8. The commission was developed with assistance from a REAL Solutions grant from the National Credit Union Foundation.