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Raise the MBL cap says letter to Sun-Sentinel

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MIRAMAR, Fla. (4/15/10)--There is another way to infuse capital into the marketplace without using taxpayer's money: raise the member business lending (MBL) cap and let credit unions make more business loans, says an opinion-editorial by a South Florida credit union CEO in the South Florida Sun-Sentinel.com. Rich Helber, CEO of Tropical Financial Center CU, based in Miramar, Fla., points out in Wednesday's article that credit unions are asking Congress to lift the statutory limit on small business lending to 25% from 12.25%. Helber noted that in 1998, the Federal Credit Union Act was amended to expand credit union powers. "The bankers successfully lobbied to impose the arbitrary 12.25% cap on credit union MBL. It seems ironic, given many banks are now not lending to consumers and small businesses," he wrote. He pointed out the additional $10 billion that would be available for MBLs and the 108,000 jobs that could be created by helping businesses grow by lifting the cap. He noted that MBL bill, HR 3380, has 99 co-sponsors in the House, including six from Florida. For the full opinion, use the link.

Canadas small businesses favor CUs

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TORONTO (4/15/10)--Credit unions are favored by owners of Canada's smallest businesses, according to a study released Tuesday by the Canadian Federation of Independent Business (CFIB). CFIB surveyed 12,124 owners of Canadian businesses with fewer than 50 employees. It found that credit unions and Scotiabank have doubled their market share over the past two decades, while large banks such as Canadian Imperial Bank of Commerce, Royal Bank of Canada and National Bank lost one-fourth of their small business clients in tht period (CBC News April 13). The report, Banking on Better Service, singled out the Canadian Imperial Bank of Commerce as "far and away the worst bank when it comes to servicing Canada's smallest businesses." On a scale of 0 to 10, with 10 being best, credit unions scored tops in two categories--micro businesses or those zero to four employees, and small businesses with five to 49 employees. They also were ranked on financing, fees and service. In the zero-four employees group, credit unions ranked the highest in overall scores at 7.5 and in three service categories--financing, 6.8; fees, 8.8; and service, 7.6. In the five-49 employees category, credit unions topped others in the overall score ( 8), fees (9.9), and service (7.5). Their rank dropped to the middle for mid-sized businesses with 50-499 employees, although these businesses scored credit unions a perfect 10 on fees. In almost all the fees categories, credit unions' scores nearly doubled the scores of the closest bank.

Nomination received for CUNA Board special election

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MADISON, Wis., and WASHINGTON (4/15/10)--The Credit Union National Association (CUNA) has received the first nomination in a special election for the CUNA Board District 5, Class B seat. The candidate is Roger Heacock, president/CEO of Black Hills FCU, Rapid City, S.D. Deadline for nominations is the close of business on May 5. If there is more than one candidate, the special election will be conducted by written ballot from May 7 to June 4. District 5 is comprised of the following leagues: Arizona, Colorado, Kansas, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, Utah and Wyoming. The seat currently is held by CUNA Chairman Kris Mecham, who announced his resignation from the board, effective June 1. Mecham is leaving the U.S. this summer to perform mission work in Mongolia for his church. The term of office for the position will begin immediately after a successful candidate is determined and will expire at the adjournment of CUNA's 2013 Annual General Meeting. Nominees must be an employee or voting board member of the nominating credit union. The nomination must be in writing and seconded in writing by two other credit unions of the same size group from the district. Credit unions wishing to nominate a candidate should complete a nomination form and obtain the candidate's consent and two seconding nominations. Forms will be accepted by fax at 608-231-4874, e-mail to thanson@cuna.coop, or hard copy at 5710 Mineral Point Road, Madison, WI 53705.

Payday loans addressed in several states

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MADISON, Wis. (4/15/10)--Credit union leagues in several states are supporting efforts by lawmakers to stop payday lenders from taking advantage of consumers. The Arizona Credit Union League was instrumental in defeating the latest attempt by the state’s payday lending industry last week. The measure would have allowed lenders to continue operating after a June 30 sunset date. Lenders tried to amend language in a state consumer lending code to fit their product model, and the league worked throughout the weekend to defeat the measure, said Austin DeBey, vice president of governmental affairs for the league. Although the defeat won’t be certain until the legislature adjourns in early May, the league “doesn’t see it coming back,” DeBey said. Including its latest attempt, the payday lending industry had tried three times to continue operating beyond the sunset date. The league partnered with the Center for Responsible Lending, AARP, credit unions and other community groups to defeat the industry’s attempts to continue offering payday lending. The league hasn’t taken a position against an industry before, but decided to get involved because it has seen credit union members fall victim to payday lending, DeBey added. In its next step, the league will partner with lawmakers and other community groups on a public awareness campaign to ramp up its REAL Solutions efforts. “We’re going to try and provide some public outreach on what small dollar loans are out there,” DeBey said. “We want to create a way for people to transition from post-payday lending. We opposed payday lending, but are looking to find ways to help people [obtain small loans].” The Maryland General Assembly approved legislation to close a loophole payday lenders use to avoid Maryland’s interest rate cap on small consumer loans--especially those made online. Gov. Martin O’Malley is expected to sign the bill, which would be effective Oct. 1 (Baltimore Sun April 12). The Maryland and District of Columbia Credit Union Association (MDDCCUA) supports the effort. “MDDCCUA, as an original REAL Solutions league, applauds Maryland’s efforts to regulate the payday lending industry,” MDDCCUA President/CEO Mike Beall told News Now. “The ability to have payday lending outlets on the Internet sidesteps Maryland’s strong anti-payday lending laws should not be allowed by technicalities that further confuse consumers.” In New Mexico, The Daily Times published an op-ed piece Sunday about payday lending. The newspaper urged readers to “consider a small loan from your credit union or a small loan company” instead of using payday lenders. “You may want to check with your employer, credit union or housing authority for no- or low-cost credit counseling programs, too,” the paper said. The Times also noted that laws passed in the state within the past few years have helped regulate the industry. Under the law, lender charge fees instead of an interest rate--at no more than $15.50 for each $100 borrowed.

HRTD Council names 2010 executive committee

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MADISON, Wis. (4/15/10)--The coming year’s executive committee and officers for the CUNA HR/TD Council were announced during the council’s 16th annual conference this week in Orlando, Fla. Incumbents re-elected to the Human Resource/Training Development Council were:
* Diana S. Wozniak, manager of human resources for Tampa Bay (Fla.) FCU; and * Jennifer Godel, vice president of HR/TD & quality, Desert Schools FCU, Phoenix.
Also newly elected to the executive committee is Rob Carmichael, senior vice president of human resources, training, compliance and information technology for Maine Savings FCU in Hampden, Maine. He replaces outgoing committee member Mike Nicholas, who left his position as former vice president of human resources for United FCU in Saint Joseph, Mich. Jennifer Morse, vice president of human resources for Empower FCU, Syracuse, N.Y., will remain the council chair. Suzanne Oliver, senior vice president of educational services and chief learning officer for Mountain America FCU, West Jordan, Utah, will remain vice chair. The CUNA HR/TD Council executive committee also includes:
* Michelle Greear, assistant vice president of training and career development for Technology CU, San Jose, Calif.; * Jeffrey Duke, organizational development and leadership manager, BECU, Tukwila, Wash.; * Robert Davis, senior vice president of human resources, Vystar CU, Jacksonville, Fla.; * Danielle Brown, senior vice president of operations, Credit Union Association of Oregon, who serves as the league representative; and * Kathy Spahr, human resources, training and development director, EECU, Jackson, Mich.

Idaho State prof honored for CU research

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POCATELLO, Idaho (4/15/10)--A Idaho State University (ISU) professor whose work on how credit unions impact financial institutions' behavior is cited widely is one of three professors to be honored by the university with 2010 Outstanding Researcher Awards. Bob Tokle, professor of economics, will receive the award April 28 with two other Idaho State faculty members. One of them will also be presented the 2010 ISU Distinguished Researcher Award. Tokle joined ISU as assistant professor in economics in 1986. His research specialties include the economics of advertising and the effects of credit unions on the behavior of banking institutions, said ISU. His work's national, public policy impact is evident in its citation in testimony before the U.S. House Ways and Means Committee in matters related to credit unions, the university said. (agweekly.com April 12). Tokle's study concluded that consumers benefit from credit unions because they force banks to price their products lower than they would if competition from credit unions were absent. He has contributed to studies for the Filene Research Institute and for the Credit Union National Association and he is a board member of a credit union in Idaho.

Mich. gubernatorial hopefuls job tour stops at CU

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LANSING, Mich. (4/15/10)--U.S. Rep. Pete Hoekstra (R-Mich.), a candidate for Michigan governor, visited Frankenmuth (Mich.) CU Monday as part of his “100 Jobs Across the State” tour. He led the Republican gubernatorial field in the most recent state poll, said the Michigan Credit Union League. Hoekstra went inside the $214.5 million asset credit union to meet its members and staff, and to learn about the credit union’s functions. Credit union staff informed him about the local economy and the steps their institution is taking to improve it. “It was really neat that he got to see the inner workings of the credit union to understand how things happen behind the scenes,” said Vickie Schmitzer, Frankenmuth CEO. “It’s a wonderful event for both our staff and our members, and we were happy to be involved and share it with the community.” Hoekstra also worked for a half-hour behind a teller window greeting members, and then helped credit union staff review an application for a small-business loan--a prime focus for the credit union. Staff told Hoekstra about the credit union’s recent growth, the most recent area bankruptcy numbers and what the credit union is doing to prevent and mitigate members’ financial problems.

Improved perceptions could boost CU growth

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TALLAHASSEE, Fla. (4/15/10)--About 77% of credit union leaders surveyed said consumer misunderstanding of credit union benefits over those of banks is the greatest challenge in attracting new members, according to a new survey. Credit Union 24 conducted the survey in February at the Governmental Affairs Conference sponsored by the Credit Union National Association. The number is an increase of 10% from last year when 67% of credit union leaders cited perception as the greatest challenge, said the credit union service organization. (See Figure No. 1).
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For the second year in a row, the perception that credit unions have limited offerings, when compared with banks, was the second greatest challenge cited by 45% of credit union leaders surveyed. While consumer misunderstanding is the greatest challenge, attracting new members is a key overall concern of credit union leaders. Nearly three-quarters, or roughly 70%, of those polled cited the current economic climate and National Credit Union Administration assessments as key challenges facing credit unions today, an 11% increase over last year. Retaining current members and developing successful marketing tools were also cited as significant challenges. (See Figure No 2). “An economic cloud still hovers over our nation’s credit unions, as evidenced by credit union leaders’ concern about attracting new members having decreased by only 2% since last year,” said Jim Park, president/CEO of Credit Union 24. “It’s rather interesting that the concern of attracting new members and the economic situation have reversed this year, with the economy being the No. 1 cause of anxiety among credit union leaders. “We’re starting to see rays of sunshine peek through,” he said, yet “credit unions are focusing very intently on maintaining and enhancing their bottom line as the economy slowly starts to rebound,” he added. “Credit unions are being cautious yet proactive, and are taking advantage of the potential member-recruitment opportunities created by the capsizing of numerous banks.” In 2009, about 61% of polled credit union leaders cited attracting new members as their greatest challenge, while 59% of those polled said the economic climate is their greatest challenge. Despite the challenges, 56% of credit union leaders said their credit union’s membership increased since 2009, with 41% of credit union leaders citing failing banks as a major factor in the uptick in membership. About half, or 51%, of respondents believe that better customer service is credit unions’ strongest competitive advantage over banks. Roughly 22% cited lower interest rates on loan products as their strongest competitive advantage. (See Figure No. 3). “Even though credit unions are still experiencing challenges in educating consumers of credit union benefits over banks, the volatility of our economy is changing consumer behaviors, many of which are in favor of credit unions,” Park said. “Many credit unions are finding unique ways to remind consumers who fall within their charter’s target audience of the benefits they provide to consumers. “These methods of member outreach, which include marketing competitive interest rates on savings and loan products, can be implemented by nearly every credit union and have a positive impact the industry overall,” he concluded.

CU System briefs (04/14/2010)

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* JERSEY CITY, N.J. (4/15/10)--On April 1, Liberty Savings FCU launched its "CURE" membership campaign to raise awareness of the opportunities and benefits of joining a credit union (The Daily Exchange April 14). The name refers to helping consumers find the right "medicine" for financial "ailments" they might be experiencing at other financial institutions. Staff, pictured here, will wear medical scrubs and lab coats throughout the campaign. In addition to promotions in its branches, the credit union is advertising in local newspapers and has banner ads on NJ.com. It also will conduct several financial literacy seminars. "We want to help consumers realize there is an alternative to the high fees, high interest rates and bad service they may be experiencing in their dealings with other financial institutions," said Sean McDonald, chief marketing officer. (Photo provided by the New Jersey Credit Union League) ... * CHARLESTON, S.C. (4/15/10)--Two former employees of South Carolina FCU's Summerville, S.C., office pleaded guilty to siphoning off between $200,000 and $400,000 from inactive accounts. Robert Tam, 42, former risk analyst, and Jason Nicklous Kizer, 31, former account manager, took the funds from the accounts of a deceased woman, deployed military personnel, and others between 2005 and 2009. They were fired last fall. They face a maximum penalty of 30 years in prison and $1 million in fines (Associated Press and The Post and Courier April 14) ... * ST. LOUIS (4/15/10)--Vantage CU President/CEO Hubert Hoosman Jr.,
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right, presented a check for 10,000 to Diane Buhr, left, executive director of the Special Education Foundation (SEF), and Linda Fahrenkrog, SEF vice president, to be used for scholarships for students with disabilities who plan to obtain a higher education. "For years Vantage has been serving educators in a variety of ways, including sponsoring scholarships and offering free financial education presentations," said Hoosman. The check presentation was made at the credit union's main office in Bridgeton, Mo. SEF has been awarding scholarships since 1988. Vantage is a $628 million asset credit union with more than 111,500 members. (Photo provided by Vantage CU) ...

Hundreds in Missouri HFOT Build Brigade

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ST. LOUIS, Mo. (4/15/10)--Hundreds of volunteers, including credit unions and the Missouri Credit Union Association (MCUA),
Staff Sgt. Robert Canine (center) helped to raise the first wall to build his new home with the help of family, friends, and credit union representatives who volunteered their time to participate in a three-day Build Brigade to construct Canine’s home. (Photos provided by the Missouri Credit Union Association)
Click to view larger image About 450 volunteers, including credit union representatives, helped with a three-day Build Brigade to construct a home for Staff Sgt. Robert Canine and his family through the Homes for Our Troops program.
participated in a build brigade to construct a home for Staff Sgt. Robert Canine and his family in Columbia, Mo., as a part of the Homes for Our Troops (HFOT) program. HFOT estimated that 450 people participated in the three-day brigade last weekend. Missouri credit union representatives traveled to the site to participate. Volunteers also stopped by the site to thank Canine for his service, and cars parked on the streets had signs welcoming the family. People also wrote messages on the backside of the home’s shingles, according to MCUA (The Missouri difference April 14). “The Build Brigade was such a rewarding experience,” said Linda Fedrick, Anheuser-Busch Employees’ CU vice president of member relations. “I had the chance to meet Canine and his wife, and they are a terrific and modest couple.” “The house is amazing,” Canine added. “It’s more than I expected--more than anyone could have expected--and I’m so thankful for everyone who is making this possible.” HFOT, a program supported by credit unions and the Credit Union National Association, helps build specially adapted homes for wounded soldiers. Credit unions participating in the brigade include:
* Alliance CU, Fenton; * Anheuser-Busch Employees’ CU, St. Louis; * County CU, Clayton; * Mazuma CU, Kansas City; * Mid Missouri CU, Fort Leonard Wood; * Missouri CU, Columbia; * Neighbors CU, St. Louis; * River Region CU, Jefferson City; * Rolla (Mo.) FCU; * United CU, Mexico; and * Missouri Corporate CU, St. Louis.