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HOPE launches grocery program in underserved parish

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NEW ORLEANS, La. (4/4/11)--A New Orleans-based credit union and its affiliated community corporation have launched a program that will expand fresh food access to underserved neighborhoods in Orleans Parish. HOPE (Hope Enterprise Corp. and Hope CU) is launching the New Orleans Fresh Food Retailer Initiative (FFRI), a program that will award $14 million in forgivable and low-interest loans to supermarkets and grocery stores that locate or plan to locate in the parish's underserved areas. The FFRI program will help vendors to open, renovate or expand retail outlets that sell fresh fruits and vegetables where fresh foods are lacking, particularly for low-income residents, said the credit union. "Communities will be able to reap all the economic development benefits that come along with a grocery store: the creation of steady jobs at decent wages and serving as a catalyst for complementary retail stores and services nearby," said Bill Bynum, HOPE CEO. In a post-Katrina survey conducted by Tulane University, nearly 60% of low-income residents surveyed said they must drive at least three miles to reach a supermarket, but only 58% owned a car. Only 30 full-service groceries had reopened in the city, according to a 2010 study by Social Compact. The city will provide $7 million in Disaster-Community Development Block Grant funds, which will be matched 1:1 by HOPE. The Food Trust, a national non-profit organization that has expanded access to fresh foods in Pennsylvania and New York, will be part of the program delivery team.

N.M. Maine leagues launch Gen Y spokester searches

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ALBUQUERQUE, N.M., and PORTLAND, Maine (4/4/11)--Two state credit union associations--the Credit Union Association of New Mexico (CUANM) and the Maine Credit Union League--have launched searches for a Generation Y "spokester" to help credit unions engage Gen Yers ages 18-25 in their states to get on track for a lifetime of financial well-being. Both states are launching the Young & Free program, developed by Currency Marketing of Canada, with credit union professionals participating in filming a video--the first step in the "American Idol" style search for a spokester who will use social media, special events, meet-ups and other "off-script" methods to reach out to Gen Yers and who will "create a buzz," said Sylvia Lyon, CEO of CUANM. Lyon and other credit union professionals recently met in New Mexico to film a video for the state's program, which is sponsored by 17 New Mexico credit unions. (Use the link to view the video.) Credit unions, with the average membership age in the late 40s, had to do something to stay relevant and to gain a new, young base of members," Lyon said. The program starts with a search for a media and social media-savvy young adult who will engage peers in credit unions, which will work to understand and serve Gen Yers in age-appropriate ways such as free checking accounts, online and mobile services, overdraft forgiveness and other benefits, said Lyon. In Augusta, Maine, credit union CEOs gathered March 24 to film a call for entries video for their Young & Free spokesperson search. On hand to educate the group about the campaign and to film the video and coordinate the "talent," was Currency Marketing. "The fact that so many of [credit union executives] are taking the time to communicate with this generation through this video is a testament to the commitment of Maine credit unions to reaching this demographic," said John Murphy, president of the Maine Credit Union League (Weekly Update April 1). The commercial--and its bloopers reel--will go live April 18 on YoungFreeMaine.com. Both leagues will select three applicants as finalists to be voted on. In New Mexico, the winning spokester will receive an Apple MacBook Pro and high-def video camera, a one year contact, a smart phone and a salary and use of a vehicle for a year. New Mexico's spokester will be announced June 10. Maine's YoungFreeMaine.com website will be the hub of its search, with applicants submitting video entries. The league also is using Facebook, online and radio advertising, and college campus promotions to spread the word from April 18 to May 16. Voting on the three Maine finalists will begin at the league's Annual Meeting & Convention on May 20 and conclude on June 6, with the winner announced June 13.

CUs continue interchange efforts in media

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MADISON, Wis. (4/4/11)--Credit unions, and ATM fees and the proposed cap on interchange fees continued to draw interest last week from media such as CNBC, Fox 2 News in St. Louis, and the Charleston (W.Va.) Gazette. On "$5 Fees May Be Coming to an ATM Near You" on CNBC (March 31), the Federal Reserve's proposed rule capping interchange fees charged merchants crept into an exchange between Joe Ridout of Consumer Action and Nessa Feddis from the American College of Consumer Financial Services. "Credit unions don't charge fees," said Ridout, because they "don't aim to turn a profit, they have not relied on overdraft fees that gouge consumers and they don't pay their executives eight-figure salaries or multi-million-dollar bonuses, and they don't have to come up with rinky-dink fees to support these irresponsible levels of compensation." Use the link to see the article or the video of the exchange. In St. Louis, Mo., Patrick Adams, president/CEO of St. Louis Community CU, was interviewed by Fox 2 News (March 30). He educated viewers about the differences between debit and credit transactions, and how the proposed changes in interchange income will impact their financial institution. To listen to what he said, use the link. In Charleston, W.Va., Dan Smithson, president of the $150 million asset Star USA FCU, told the Charleston Gazette (March 26) that credit unions want Congress to stop proposed interchange regulations that would prompt small institutions to charge customers up to $60 for using their debit cards. Credit unions would have to charge extra fees to recoup revenue losses, he told the publication. The rules would unfairly penalize credit unions and community banks and it is unrealistic to expect that any merchant would pass savings to consumers, he said. The article also noted that Rep. Shelley Moore Capito (R- W.Va.) had introduced legislation to postpone the final swipe fee rule changes until federal agencies could study how the interchange cap would affect consumers, banks and credit unions, and merchants. Use the link to access the article. The Credit Union National Association opposes the cap on interchange fees and has urged Congress to stop the Fed's work on the interchange proposal and study the possible unintended consequences of the Dodd-Frank Act provision. In addition to Moore Capito's bill in the House, Sen. Jon Tester (D-Mont.) introduced a similar bill that would delay implementation of the proposed rule.

Two W. Va. CUs to merge

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CHARLESTON, W.Va. (4/4/11)--Members of Charleston (W.Va.) Newspapers FCU have voted to merge with Members Choice WV FCU, also in Charleston. Dwindling membership was the driving force behind the merger, said Connie Risner, CEO of Charleston Newspapers FCU, who added that the credit union’s membership has declined to 310 from a one-time level of more than 600 (The Charleston Gazette March 31). The $2.3 million-asset Charleston Newspapers FCU hopes to complete the merger with the $76 million-asset Members Choice WV FCU by the end of June, Risner told the newspaper. Members Choice serves more than 60 select employer groups, and has a community charter, the paper said.

N.H. governor lauds CUs commitment

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PORTSMOUTH, N.H. (4/4/11)--New Hampshire Gov. John Lynch lauded Service CU in Portsmouth, N.H., as a shining example of a community-based business Thursday night at the credit union’s 54th annual meeting. Lynch, who was a keynote speaker at the event attended by more than 300 people, said the credit union’s “unyielding” commitment to its members, employees and community has set the standard against which other companies are measured (seacoastonline.com March 25). When disasters strike, Gordon Simmons, CEO of Service CU, is always the first to call in to the governor’s office to offer help, Lynch said. The $1.7 billion asset Service CU is a reflection of all that is good with New Hampshire organizations, Lynch said. Examples of the credit union’s service include $125,000 donations for three years in a row for local flooding victims; $265,000 donated after a tsunami; and support of local groups and organizations such as the Boy Scouts, Simmons told the publication. To read the article, use the link.

Maine league to testify Tues. on state interchange bill

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PORTLAND, Maine (4/4/11)--The Maine Credit Union League will testify Tuesday at a hearing on a state interchange bill. Last week, L.D. 1251--An Act to Prevent Credit Card Company Unfair Trade Practices was printed and introduced in the Maine Legislature, said the league (Weekly Update April 1). The bill was then referred to the Legislature’s Insurance and Financial Services Committee. Sponsored by State Sen. Richard Rosen (R-31), it would prohibit electronic payment systems from imposing certain restrictions on merchants related to the acceptance of credit cards, charge cards, debit cards or other stored-value cards as payment for goods and services. The league said it is “strongly” opposed to the bill because of the impact it would have on both credit unions and consumers. The committee is holding a public hearing on the bill Tuesday, and the league has been preparing testimony for it. Other states with pending or approved interchange legislation, according to the Credit Union National Association’s State Governmental Affairs Update, include:
* Rhode Island’s HB 5467 and SB 319, which will allow merchants to discriminate against certain cards and will give merchants the authority to set pricing; * Vermont’s bill (2010), which contains similar language to the bills in Maine and Rhode Island; * Oklahoma’s HR 1014, which will stop or delay the implementation of Section 1075 of the Wall Street Reform and Consumer Protection Act so statutory changes can be made to ensure institutions with less than $10 billion in assets are exempted without consequences so as not to result in increased fees on consumers at exempted institutions. The bill was recently passed by the Oklahoma House; and * Oregon’s SJM 18, which was introduced in March. It urges Congress to uphold small-business and consumer protections contained in the Durbin Amendment and to reject calls to overturn interchange reforms.
The Credit Union National Association (CUNA) opposes the cap on interchange fees and has told federal lawmakers that such action would harm consumers by driving up costs of debit cards, limiting consumer options, and harming competition and technological innovation. Interchange fees allow business costs, including the risk of consumer nonpayment, to be shared by the payments participants, CUNA said.

CUNA CU savings to stay steady loans to rise

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MADISON, Wis. (4/4/11)--As the economy grows, credit unions' saving balances are expected to stay steady and their loan balances are expected to rise during the next two years, according to Credit Union National Association (CUNA) economists, who met last week to update their outlook for economic conditions and credit union operating results.
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"In short, we now believe that the U.S. economy will grow above trend in 2011 and slow to 3.25% in 2012," said Senior Economist Steve Rick in his summary for CUNA's U.S. Credit Union Profile: Year-End 2010 Summary of Credit Union Operating Results. The profile, as of Thursday, can be accessed on CUNA's site by using the resource link. "Expansionary monetary and fiscal policy along with the natural dynamics of the business cycle will support economic growth in 2011. Economic growth will slow in 2012 as government stimulus programs are withdrawn," said Rick. "At the same time core inflation will remain below the Federal Reserve's implicit target of 2% through 2012" and "labor markets will continue to improve but only slowly." That means the federal funds targeted interest rate "will not begin an upward path until the end of 2011. We expect a 25 basis-point interest rate move at the end of 2011 followed by a two-percentage-point increase in 2012. Thus, the Treasury yield curve should flatten in 2012," he added. He noted that with this backdrop, credit union savings balance growth is expected to remain at 5% for the next two years. "Despite rising disposable incomes, savings balance growth will remain below its five-year average of 6.3%, as members begin to spend again to relieve some pent up demand and deleveraging continues. Currently, members are paying off debt rather than saving any additional surplus funds due to the large interest rate differential between loan and deposit interest rates." CUNA's economists expect credit union loan balances to rise to 4% in 2011 and 6% in 2012. "After falling over 1% in 2010, we expect a rebound in credit union loan balance growth in the next two years as the economy and consumer confidence recovers. Auto loans, credit card loans and purchase mortgage loans will be strong growth areas," Rick said.
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"Credit quality will improve in 2011 and 2012 as job growth picks up. Provisions for loan losses will decline as credit unions shift from building their allowance-for-loan-loss account to maintaining the current level. This will help credit unions' return on assets to recover to 0.60% in 2011 and 0.70% in 2012. Rising net interest margins and cost containment efforts also will boost earnings. "We expect National Credit Union Administration assessments to come in at 20 and 15 basis points of average assets in 2011 and 2012, respectively. We don’t expect a significant drop in interchange income in 2011, but possibly a 10 basis point hit in 2012," he said. The U.S. Credit Union Profile contains detailed full-year 2010 data for credit union operating results and recent data for a variety of economic indicators. Use the resource link to access the report, which includes the current forecast and commentary.

Colorado CUs to media MBL means for small biz

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BOULDER, Colo. (4/4/11)--Colorado's credit unions and the Credit Union Association of Colorado (CUAC) were featured touting small business loans in an article about the bill before Congress to lift the member business lending (MBL) cap in Thursday's Boulder County Business Report. In the article, "Credit unions poised to loan," the association said that raising the lending cap to 27.5% of a credit union's assets from 12.25% would create an estimated 100,000 new jobs across the U.S. The bill was introduced in Congress by Sen. Mark Udall (D-Colo.), who is quoted in the article as saying his bill would "free up capital--without costing taxpayers a dime--so that credit unions can loan to local small businesses that need to make payroll, buy inventory or expand their businesses." Jay Champion, head of business lending and services at Boulder-based Elevations CU, told the publication that the credit union plans to hire two business loan officers in the next 12 months, but if the cap were raised, it probably would hire four employees. Raising the cap also would allow the credit union to make a more substantial impact on the community and businesses, and help credit unions become bigger players in the community, he said, adding the credit union has money to loan. Banks are lobbying against the plan, but raising the cap would free up some money to lend, said CUAC spokesman Tom Dore in the article. Also interviewed were Rick Allen, president/CEO of Boulder Valley CU, and Carlos Pacheco, president of Boulder-based Premier Members FCU, who both said they are looking for ways to lend more money. Some credit unions are close to the MBL cap and may have to stop helping small businesses, even though credit unions can provide a lot of benefit to local small businesses, said Pacheco. The article also cites statistics from the Credit Union National Association (CUNA) about the impact of raising the MBL cap. CUNA recently released updated statistics indicating that raising the cap would create 140,000 new jobs and provide $13 billion in new small-business loans. To access the full article, use the link.