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CU System brief (04/12/2012)

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  • TALLAHASSEE, Fla. (4/13/12)--A U.S. Court of Appeals for the Eleventh Circuit in Tallahassee, Fla., Tuesday upheld the convictions  and sentences of a former credit union CEO and a former Florida A&M University policy institute director on charges of embezzling $134,000 in grant funds from U.S. Department of Housing and Urban Development (HUD) that were administered by A&M University FCU (leagle.com April 10). The court denied the appeals of Eugene Telfair, who was president of the Tallahasse-based credit union, and co-defendant Robert Nixon.  The court said the evidence was sufficient for a reasonable jury to conclude that the two men knowing and willingly conspired to steal, and actually did steal, the grant funds through a wire scheme. The fraudulent contracts occurred between 2004 and 2008 …

DuTrac teams with Walgreens to expand ATM network

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DUBUQUE, Iowa (4/13/12)--Du Trac Community CU has expanded its ATM network through a new partnership with national retailer Walgreens.

Beginning immediately, DuTrac members can withdraw cash and make balance inquiries at ATMs located within any Walgreens store throughout Iowa without paying a surcharge.

Also, the $551 million asset, Dubuque, Iowa-based credit union has begun branding ATMs inside the Walgreens stores in Dubuque and on the Iowa side of the Quad Cities area.

"DuTrac's focus is always finding new and improved ways to serve our members' financial needs," said DuTrac President/CEO Andrew Hawkinson, adding the partnership will provide more ways for members to access cash free of charge.

The new standalone ATMs are typically located just inside the stores' entrance.

DuTrac has an existing partnership with Casey's General Stores throughout eastern Iowa, and is a member of the Privileged Status ATM network.

Ohio CUs preparing to march for hospitals

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DUBLIN, Ohio (4/13/12)--Ohio credit unions are breaking in their walking shoes to prepare for the 2012 "Ohio Credit Unions: Marching Miles for Miracle Kids," which aims to raise $135,000 this year to add to the more than $500,000 they've raised for Ohio Children's Miracle Network Hospitals since 2007.

The Credit Unions for Kids Steering Committee believes the campaign has the momentum to reach the goal, said committee Chair Jaime Crooks of Ohio Healthcare FCU, Dublin.  "We have infused the 2012 campaign with new, unique fundraisers. I think the result will be more involvement on the grassroots level, helping us reach our goal."

Credit union staff, volunteers, members and the general public can participate as marchers or sponsors in the march-a-thon. The first march will be in Youngstown on May 5, with subsequent walks to follow in other areas of the state through May 12. 

Ohio Credit Union League President Paul Mercer noted, "This is another example of how credit unions are making a difference in the communities they serve."

Funds go to local children's hospitals.  Nationally, credit unions contribute to their local Children's Miracle Network Hospitals through Credit Unions for Kids fundraising efforts. For more information use the links.

CUs video in NJ taps into anti-bank sentiments

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PARSIPPANY, N.J. (4/13/12)--Parsippany, N.J.-based Garden Savings FCU has launched a new video pointing out the difference between credit unions and banks. This time, the video taps into the negative press that big banks have attracted since Bank Transfer Day in November.

In the video, which is depicted in a dark setting, a man, in closeup, introduces himself as a bank and outlines a less-than-flattering list of features the bank has for the consumer.

"We realize it's a fairly aggressive video in some respects," Garden Savings Chief Sales Officer Michael Powers told the New Jersey Credit Union League (The Daily Exchange April 12).  "But on the other hand, it's clearly meant to be a little bit over the top and at the end of the day, it does show what we believe to be some clear differentiations between banks and credit unions."

He noted it shows the $206.5 million asset credit union's take on what the perceptions of those differences are from the consumer's standpoint, and "it is meant to call people to action and say to themselves, 'Why am I still banking at a bank?'"

The video in its full form, as well as a 30-second version, will air on county cable television in Morris and Essex counties next month.

To view the video, use the link.

Several leagues report MBL advocacy efforts

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MADISON, Wis, (4/13/12)--As credit unions nationwide step up their grassroots efforts to expand their ability to offer  loans to small businesses, several leagues reported what their credit unions are doing to support the effort.

They are urging Congress to pass Senate Bill 2231, the Credit Union Small Business Jobs Bill, which would raise the MBL cap to 27.5% of assets from the current 12.25%. The Credit Union National Association says that doing so would inject $13 billion into small businesses to help create 140,000 new jobs, without costing the taxpayer a dime.

In New York, credit unions are engaging their members in MBL advocacy and have reported "extremely positive results," said the Credit Union Association of New York (CUANY).  Corning (N.Y.) FCU, for example, obtained 2,256 signatures in two days for advocacy letters to lawmakers on the issue.

On Wednesday, New York credit union CEOs from across the state participated in two MBL conference calls hosted by CUANY. They shared advocacy strategies and discussed the importance of contacting their lawmakers in Congress and recognizing those who already support the measure in Congress.

New Jersey credit union representatives discuss member business lending with Sen. Frank Lautenberg (D-N.J.) during a political event in New Jersey. (Photo provided by the New Jersey Credit Union League) .
Some lawmakers "have been strong advocates of MBL reform, and we know they are being bombarded by banker opposition as a result," said CUANY President/CEO William J. Mellin. He urged New Jersey credit unions to "flood their offices with credit union e-mails, letters and phone calls expressing our appreciation and reaffirming how essential they are to the success of this legislation--legislation that will benefit small business owners, create jobs and help stimulate the economy without any cost to taxpayers."

In Lawrenceville, N.J., credit unions took advantage of an opportunity to meet with Sen. Frank Lautenberg (D-N.J.) to make the case for MBL reform personally. They attended  Rider University's Rebovich Institute for New Jersey Politics' financial session of its 2011-12 Governing New Jersey series, said the New Jersey Credit Union League  (NJCUL) (The Daily Exchange April 12).

Credit Union of New Jersey Director  Gary Chizmadia, Advanced Financial FCU CEO  Alan Feigenbaum,  Hamilton-Horizons CEO Cindy Rein-Zima and McGraw-Hill FCU Marketing Manager Rob Carabelli joined NJCUL Director of Government Affairs Chris Abeel urged supporting the bill comes up for a vote, expected any time after the Senate returns to session on April 16.

"This wasn't a small opportunity," said league President/CEO Paul Gentile. "We need our senators to hear a loud voice here in New Jersey. We're running radio and internet ads, generating lots of e-mails, letters and calls, and have an MBL postcard campaign in full swing. But to have people there to be able to pose the question live and in-person is incredibly valuable for our efforts as we have never before seen such a high level of anti-credit union propaganda coming from the bankers," he said.

Pennsylvania Credit Union Association (PCUA), which sent out a special advocacy edition of its newsletter, Life is a Highway Thursday, noted that representatives from Members 1st CU, Mechanicsburg, including CEO Bob Marquette, met Tuesday with a lawmaker's

regional staff in Harrisburg. They shared statistics on MBL, provided a package of information and delivered copies of letters written by several of the credit union's member businesses.

Mary Beth Wilcher, CEO, of Erie (Pa.)  FCU, and Trent Mason, chief marketing officer, Erie General Electric FCU, also met with a lawmaker's regional office in Erie. They explained the credit union difference and the importance of the MBL legislation. Other meetings with regional staff are in the works with American Heritage FCU, Cross Valley FCU, First Commonwealth FCU, Freedom CU, Penn East FCU, SPE FCU, Sun East FCU, and TruMark Financial CU.

"Come Monday, we will have six of the seven regional offices covered," said a special edition of PCUA's Life is a Highway (April 12).

Wisconsin regulator New business formation up 12.2

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MADISON, Wis. (4/13/12)--The number of new businesses formed in Wisconsin in the first quarter increased by 12.2%, compared with the same period in 2011, according to data released April 9 by the Wisconsin Department of Financial Institutions (DFI). That growth is due in part to assistance from credit unions, said the Wisconsin Credit Union League.

In the first quarter 9,821 new businesses were formed in Wisconsin, compared to 8,752 during the same period in 2011.

March showed a 4.3% improvement over 2011, the 10th time in the past 12 months that new business activity has increased over the previous year, said the DFI, which regulates state-chartered credit unions and banks.

Since the start of the recession in 2007, Wisconsin banks increased their business loans a mere 5%, while state credit unions grew member business loans (MBL) by 52.3% to compensate, noted Brett Thompson, league president/CEO.

"During challenging economic times, many discouraged job seekers are more likely to form businesses," Thompson said. "And that means credit unions that make loans to them are helping 'Main Street' Americans. For example, the Treasury Department found that 25% of credit unions' business loans were made to members with household income of less than $30,000 and another 20% went to households with incomes between $30,000 and $50,000."

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase the MBL cap to 27.5% of assets from 12.25%. Doing so, would inject $13 billion in the U.S. economy for small business lending. That, in turn, would create 140,000 new jobs at no cost to the taxpayer. 

Legislation to increase the cap is active in both the U.S. Senate and the House, and a vote on S. 2231 is expected to take place after Congress returns from its spring recess, said CUNA.

Iowa pizza place owner CUs help fuel American dreams

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DES MOINES, Iowa (4/13/12)--Credit unions are a key to helping small businesses operate, and as such, they should be allowed to provide more loans to small businesses than currently allowed under the federal member business lending (MBL) cap, an owner of several pizza stores in Iowa wrote Thursday in a letter to the editor of the Des Moines Register.

"As a small business owner, I agree with the phrase, 'small businesses are the engine of our economy,'" wrote Brad Loney, who owns Little Caesar's Pizza stores. "I also know my small business engine wouldn't be running without the critical fuel provided by my Iowa credit union. I am the proud owner of pizza-franchise outlets, with locations in Fort Dodge, Newton and West Des Moines. None of this would have been possible had it not been for Community Choice CU [based in Johnston, Iowa]."

Loney wrote that he personally met with nearly every banker in Central Iowa and also sent his business plan to 12 other banks, and was told in each instance that even though his business plan was good, they weren't lending.

"Community Choice reviewed my business plan and saw the potential of my business," Loney explained. "But more important, it understood that I had a dream. It was willing to loan my business money when the banks wouldn't.

"I now employ more than 40 people in Iowa and hope to continue to expand," he added. "Because my credit union experience has been so positive, I've gone back to it for my home loan as well."

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

To read the letter, use the link.

Tax deadline means extra hours helping members

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MADISON, Wis. (4/13/12)--With the April 17 tax deadline approaching credit unions nationwide are dedicating resources to helping community members prepare their tax returns.

The Wisconsin Credit Union League maintains the website www.freetaxrefund.org, which explains how consumers can access a free refund whether they prepare their own taxes, use a paid tax preparation service, or use a free tax preparation service. The site explains how to use direct deposit to get a no-cost tax refund, where to find free tax assistance sites and what to bring for help with filing.

Each of Wisconsin's more than two million credit union members already has a savings account that can be used to receive a free tax refund, according to the Wisconsin league.

Many credit unions are offering their expertise through the Internal Revenue Service Volunteer Income Tax Assistance (VITA) program and the Earned Income Tax Credit (EITC) program. Also, IRS has a Tax Counseling for the Elderly (TCE) Program offering free tax help to taxpayers who are 60 and older.

VITA offers free tax help to people earning $50,000 or less. It provides trained and certified community and credit union volunteers to help taxpayers access special tax credits and complete their forms. Through the VITA program, credit unions help lower-income consumers keep more of their EITC refunds in their own pockets, according to the National Credit Union Foundation's REAL Solutions VITA site.

Taxpayers who qualify can claim the EITC credit and could pay less federal, tax, no tax, or get a tax refund. The credit is for low-income working families to offset the burden of Social Security taxes and provide an incentive to work (News Now Jan. 30).

GHS FCU, Greenville, S.C. used volunteer tax preparers from Broome Community College to assist with its VITA program for low-income families (Press & Sun Bulletin March 29).

In a Pennsylvania Credit Union Association Highway Quick Poll, 40%, or 32, of 80 responding credit unions said they are offering VITA services this year (Life is a Highway Feb. 17).

Responding Pennsylvania credit unions also offered feedback on how they would provide tax preparation services. Responses included:

  • 84% said they will use certified employees to prepare tax forms in branch;
  • 45% said they will serve all eligible consumers;   
  • 22.6% said they will provide free space for VITA volunteers in branch;
  • 9.7% said certified employees will prepare tax forms at other locations; and
  • 6.5% said they will serve only eligible members.
The $876 million asset Georgia United CU, Duluth, Ga., is partnering with IRS and the College of Family and Consumer Sciences of the University of Georgia to provide its VITA program.

State Employees' CU, Raleigh, N.C., will operate its VITA until April 17. It has offered the VITA service for four years and its own low-cost tax preparation service for consumers earning more than the $50,000 VITA annual income cutoff for two years. In 2011, SECU tax preparers filed more than 53,000 returns, with members receiving $82 million in refunds and saving $7.9 million in tax preparation fees.

For the ninth year, the $4.2 billion asset Bethpage (N.Y.) FCU is helping low- to moderate-income households on Long Island through the VITA program at 12 of its branches. Bethpage FCU is making available 150 IRS-certified volunteers, including bilingual tax assessors, to members and nonmembers.

Royal CU, a $1.2 billion asset credit union in Eau Claire, Wis., is among the credit unions offering the VITA program. Royal CU offers assistance filling out basic tax forms (1040EZ, 1040A and 1040). Volunteers are University of Wisconsin-Eau Claire and Chippewa Valley Technical College accounting students certified by the IRS, says RCU's website (News Now Jan. 31).

More than 100 Michigan credit unions are offering Just File It, a web-based program that allows individuals and families to file for state and federal tax credits that might otherwise be overlooked, said First Community FCU, Parchment, Mich., one of the credit unions offering the program. The program uses a free, online software program that poses questions to users and offers assistance via online chats. The technology was development by the Legal Aid Society of Orange County, California.

Oregon Community CU, Eugene, Ore., is again offering the use of a meeting room and equipment to host a Tax-Aide site for the AARP Tax-Aide program. The credit union's South Eugene branch is serving as a Tax-Aide through Saturday. Tax-Aide is available to all taxpayers with low to moderate incomes, with special attention to those ages 60 and over. Membership with AARP is not required.

North Side Community FCU, Chicago, offered free and reduced rate tax preparation services on April 5 and April 12 to both members and nonmembers.

For tax filers fortunate enough to get a refund, Nino Gemma, CEO of Stark FCU, Canton, Ohio, offers these recommendations for making good use of the funds (CantonRep.com April 2):

  • Build an emergency fund;
  • Pay off credit cards;
  • Make a down payment;
  • Start a college fund; and
  • Invest in home improvements.
See related story, "Last-minute tax tips on H&FF Radio," in News Now's Consumer News section.

San Antonio business owners CUs urge lifting MBL cap

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SAN ANTONIO (4/13/12)--San Antonio small business owners united with credit unions in the Texas community Wednesday for a joint press conference at Freetail Brewery Co. to call on lawmakers to support the measure before Congress to raise credit unions' member business lending (MBL) cap.

San Antonio  business owner and Generations FCU small business lending member Kathy Carrizales talks to a local Univision reporter about the need to raise credit unions' member business lending cap to infuse more business loans into the economy. (Photo provided by Generations FCU)
They urged support of the Small Business Lending Enhancement Act (S. 2231), which would raise the MBL cap to 27.5% of assets, up from the current 12.25% of assets.

"Ninety percent of small business owners have indicated that access to capital is a significant issue for them, hindering them from growing their business and hiring new employees," said Tim F. Haegelin, Generations FCU president/CEO. 

"Fifty percent of Americans work for small business owners," Haegelin said. "At a time when our country is struggling to get its economy back on track, it doesn't make sense to limit responsible growth that will enable these individuals, who are the backbone of our communities, to hire workers and expand their businesses," he added.

The press conference was attended by numerous San Antonio small business owners as well as Generations FCU, Firstmark CU, United SA FCU, and Randolph-Brooks FCU.

Each of the small business owners had approached multiple banks but was unable to obtain necessary funding to grow and expand its business. However, all later received funding from their local credit unions.

The Credit Union National Association estimates that passage of S. 2231 would infuse $13 billion into the economy and create roughly 140,000 jobs nationwide. According to the credit unions present at the conference, that would include more than 8,500 jobs in Texas alone, at no cost to taxpayers and without expansion of government. Also, banks would still keep about 90% of their market share of business loans.

"The average credit union business loan is a little over $200,000," said Haegelin. "These are quite literally the loans that banks do not want to make because [the loans] are too small and because it doesn't provide enough return on investment for [the banks]."

"As not-for-profit financial institutions, credit unions can make these smaller loans. And that helps the local nail salon owner or air conditioning repairman buy equipment, expand their business and hire more workers, putting our community and our economy back to work," Haegelin said.

The vote on the S. 2231 is expected within the next two weeks.