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CU System Archive

CU System

Small biz employment grew slightly in March says Intuit

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MOUNTAIN VIEW, Calif. (4/16/10)--Employment for small business grew slightly more in March than in February, extending a trend that began in mid-2009, according to the Small Business Employment Index from Intuit Inc. Intuit Inc. includes Intuit Financial Services, a CUNA Strategic Services provider of online banking services to credit unions. Small business growth can translate into increased business for credit unions providing member business services or member business lending.. The index showed that March employment went up 0.25% , which projects to a 3% annual growth rate, said Intuit. That translates to roughly 50,000 new jobs in March and a slightly revised estimate of roughly 175,000 new jobs since June 2009, when the upward trend began. "All the numbers indicate a continuing recovery for small businesses that began in the summer of 2009," said Susan Woodward, an economist who helped Intuit create the recently launched monthly index. "And while the numbers may seem small, they show clearly that small businesses are hiring, and stopped trimming their payrolls last summer." The average compensation for all employees and hours worked per month for hourly employees were flat, said Intuit, at $2,562 per month and 103.1 hours worked. That translates to annual wages of $31,000 and a 24-hour work week. Small businesses are hiring, but with the excess of workers, they don't have to pay more to attract employees, said Woodward, a former chief economist of the U.S. Department of Housing and Urban Development and at the Securities and Exchange Commission. The index includes aggregate and anonymous employment data from about 50,000 small businesses.

Scot editor Put CUs in schools banks not fit to teach

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GLASGOW, Scot. (4/16/10)--A newspaper columnist in Scotland took the Royal Bank of Scotland to task for handing out promotional literature to students as part of money management classes. Instead, put credit unions in the schools, the article said. "Credit unions are all the good bits of banking and none of the bad. They lend at sensible rates and they pay sensible rates. [It is] Banking without the bull and the bonuses," wrote Lesley Campbell in the Daily Record (April 15). "Since we have an established network of well-run credit unions, managed by experts in responsible lending, why are they not in the schools instead of the banks?" Campbell asked. "A bank is not fit to teach money skills, just as a soft drinks manufacturer shouldn't be allowed to teach nutrition," said the article. Campbell had the chance to make the same points to the Scottish government at the invitation of the Association of British Credit Unions (ABCUL), the trade association for credit unions in the United Kingdom. "Get the banks out of schools and get credit unions to take their place," the article concluded.

Texas small biz owner urges removal of MBL cap

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FARMERS BRANCH, Texas (4/16/10)--Quentin and Melissa Gallagher, owners of Mesquite Oilfield Services in Monahans, Texas, and members of Ward County Teachers CU, Monahans, needed capital to expand their small business, so they turned to their credit union. With the help of the $11-million-asset credit union, the Gallaghers purchased much-needed digging equipment and a company truck, according to a letter they sent to their national legislators (LoneStar Leaguer April 15). They urged their legislators to lift the cap on member business loans (MBLs). “There was never an option when it came to who we would choose to help back our business--our credit union of course. They know our business,” the Gallaghers wrote in a letter to U.S. Rep. Mike Conaway (R-Texas) and U.S. Sens. Kay Bailey Hutchison (R-Texas) and John Cornyn (R-Texas). “We are proud of the fact that we have not only survived the latest downturn in the petroleum industry, but that we have also grown our business. We realize we are small in the big picture, but when you are welcomed and your lender is interested in what you do--not if your next payment will be on time--it sure helps. “We ask that you consider the removal of the maximum amount the credit union can have in member business loans,” the letter continued. “Small business borrowing is difficult as is and tying the hands of those who want to help us just doesn’t make sense.” The Texas Credit Union League (TCUL) encouraged credit union CEOs, board members and staff who work with small business in the state to contact legislators to urge their support of S. 2919, legislation that would raise the cap on MBLs.

Georgia Central economic symposium in June

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DULUTH, Ga. (4/16/10)--Georgia Central CU will host its 2010 Economic Symposium June 16-17 in Atlanta with economists, regulators, legislative experts and asset-liability management professionals to help attending credit unions plan for the future. The program includes topics aimed at helping credit unions manage their challenges in 2011 and grow in the future. Speakers include:
* Mike Schenk, vice president of economics and statistics at the Credit Union National Association (CUNA); * Richard Gose, senior vice president of political affairs, CUNA; * Rajeev Dhawan, director of the Economic Forecasting Center at the Robinson College of Business at Georgia State University; * Roger Tutterow, professor of economics at Mercer University; * Tim Gardner, sales executive, CUNA Mutual Group, who will discuss asset liability management; * Rob Braswell, commissioner of the Georgia Department of Banking and Finance; * Alonzo Swan, regional director of Region III at the National Credit Union Administration; * Greg Moore, president/CEO, Georgia Central CU; and * Cory Johnston, senior vice president and chief investment officer, Georgia Central CU.

Wis. league addresses banker opposition to MBL

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PEWAUKEE, Wis. (4/16/10)--Brett Thompson, president/CEO of the Wisconsin Credit Union League, addressed the Wisconsin Bankers Association’s response to a league April 8 press release about credit unions’ successful efforts to accommodate member business lending (MBL) needs. “Credit unions are eager to be part of a solution that keeps small businesses healthy and that keeps people in their jobs. Banks want to prevent that--all to the detriment of the Wisconsin economy and working families,” Thompson said Wednesday. “It's déjà vu all over again,” he continued. “The Wisconsin Bankers Association (WBA) keeps repeating the same factual inaccuracies over and over, apparently believing that tireless repetition will somehow make the statements true and deflect attention from banks’ recent poor performance in serving Wisconsin’s businesses and working families. Instead, it just weakens their credibility even more.” WBA’s April 9 press release posits that credit unions do a poor job of serving the low-to-moderate income populations and have strayed from the mission they were given an expensive corporate tax subsidy to serve. The bankers say that “tax-paying banks do a far better job of reaching underserved consumer than credit unions.” WBA opposes the federal legislation to expand business lending that “the credit union industry is ill-equipped to handle increased commercial lending.” Thompson rebutted:
* Wisconsin credit unions’ business lending was not subject to any cap for credit unions’ first 70 years of existence. Since the cap was put in place in 1998, there has been no evidence of systemic risk due to credit unions’ business lending. * The league has data illustrating more clearly banks’ recent financial woes. In 2009, banks’ loan losses were 2.36% compared with 0.59% for credit unions. * Regulators and small businesses alike support lifting the cap because it is good public policy. There's no cost to taxpayers, and the banks are not providing a solution.
“It’s time we ask ourselves--who do we believe? It’s either banks, which generate record profits when the economy is strong but turn their backs when working families struggle, or not-for-profit financial cooperatives that support working families regardless of the prevailing economic conditions,” Thompson concluded.

Heartland debit card to distribute financial aid

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PRINCETON, N.J. (4/16/10)--Heartland Payment Systems Campus Solutions division is offering a debit card linked to a student’s identification (ID) card that can be used to distribute financial aid in lieu of paper checks. Heartland’s Acceluraid uses a single financial account that can be integrated with a campus’s card system. The program gives students access to their financial aid refunds through a unified financial account that links to a prepaid campus identification card and a school-branded debit card. The card can be integrated with an ID card or used as a standalone, Heartland said. North Central Missouri College, Trenton, Mo., introduced the program in January. It distributed $2 million in financial aid to students. The funds can be used for online bill pay or accessed through free withdrawals from campus ATMs and cash-back options at participating merchants. “Acceluraid has transformed financial aid disbursement on our campus,” said Sharon Barnett, vice president of administrative services. “It enables our administration to save money on personnel costs, check issuance and reconciliation issues caused by delayed deliveries and lost or returned checks.” The college also plans to disburse its student payroll through the Heartland’s OneCard system in the near future, she said. Heartland Payment Systems received significant media attention when its processing system was breached in 2008. The company provides card processing services for financial institutions nationwide, including credit unions.

Louisiana House bill would eliminate cap on loan fees

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NEW ORLEANS (4/16/10)--The Louisiana House of Representatives voted Tuesday to get rid of a cap on upfront fees that banks charge for making consumer loans. Under the bill, authored by Rep. Jeff Arnold (D-Algiers), borrowers would not have the benefit of a $50-limit on loan origination fees and a $20-limit on documentation fees. The bill would allow banks to charge any amount agreed to by the borrower, relieving banks’ regulatory burden (The Times-Picayune April 14). The legislation also would put banks on the same “level playing field as credit unions,” which are not restricted by fees, the newspaper said. The Louisiana Credit Union League doesn’t expect the legislation to have a huge effect on credit unions, Lacey Hyer, league public relations specialist, told News Now. “Credit unions have always had the best [loan] rates,” she said. The league is aware of the legislation and is putting together an informational packet for lawmakers to reinforce the credit union difference, Hyer added.

CU System briefs (04/15/2010)

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* SALT LAKE CITY (4/16/10)--Mountain America CU, Salt Lake City, is a lead sponsor of one of Utah’s newest attractions--the Penguin Encounter at the Living Planet Aquarium. The aquarium recently held a Penguin Encounter VIP Party to introduce the Gentoo penguin exhibit to the Salt Lake community. More than 400 dignitaries and guests were on hand for the opening of the family attraction, which completes the Aquarium’s “Journey to South America” gallery. “Mountain America CU has been a founding sponsor of The Living Planet Aquarium since 2004,” said Brent Andersen, founder/CEO of the aquarium. “Its ongoing support has assisted us in achieving our mission to create a deeper understanding of Earth’s diverse ecosystems." (Photo provided by Mountain America CU) … * NEW BERLIN, Wis. (4/16/10)--Landmark CU, New Berlin, Wis., raised $29,000 for the Children’s Hospital Foundation by selling $1 Links
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and $10 Hearts during its Credit Unions for Kids Chain of Hearts campaign. The amount raised is a 32% increase compared with last year.. From left are Landmark CU’s April Shorter, Karen Garcia, Roberta Cochrane, Monica Evans, Chuck Schuyler, Pi la Yang, Matea Maca and Marta Anderson. Credit unions have raised more than $73 million for the Children’s Miracle Network since the program began in 1996. Wisconsin credit unions raised more than $292,000 last year. Landmark CU has $1.43 billion in assets. (Photo provided by Landmark CU) ... * BOSSIER CITY, La. (4/16/10)--Carl M. Schneider III, who served key management positions with credit unions in Louisiana and Texas, died Tuesday in Shreveport, La. He was 66. He enjoyed more than 35 years in the financial industry. Schneider formerly served as president of Southwest 66 CU, Odessa, Texas, and as former chief operating officer at Barksdale FCU, Barksdale Air Force Base, La. He also served on the staff of the American Bankers Association (ABA) in Washington, D.C. (LoneStar Leaguer and Shreveport Times April 15). He chaired ABA's National School of Retail Banking and the Stonier Graduate School of Banking ...

N.Y. state officials op-ed backs muni-deposit choice

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ALBANY, N.Y. (4/16/10)--The commissioner of the New York City Department of Consumer Affairs and the state Assembly's assistant speaker pro tempore have written an op-ed item in support of municipal depository choice for the state in Albany's Times Union. In Thursday's article, Commissioner Jonathan Mintz and Assemblyman Harvey Weisenberg say that for nearly 100 years, New York municipalities have been prohibited from depositing taxpayer funds into credit unions, savings banks or savings and loans institutions, "based on an anachronistic law dating to a time before credit unions even existed." They wrote that credit unions "offer rates of return that are competitive with--and may be higher than--commercial banks. Credit unions and savings banks often provide low-income communities with access to loans that can help them start a business, purchase a home or meet other financial needs." Mintz and Weisenberg noted that local governments are "fighting for autonomy and asking the state to pass a law that lifts this prohibition," which would give them "greater freedom to decide where best to deposit taxpayer dollars--taking into account the safety of funds, pricing and other taxpayer benefits. Arbitrarily restricting deposits based on a century-old law means limiting competition and reducing options." They also referred to New York City Mayor Michael Bloomberg's plan to make $25 million in deposits available to credit unions and savings banks located in low- and moderate-income communities once state legislature passes municipal deposit reform. The Credit Union Association of New York thanked Mintz and Weisenberg for their action in support of municipal depository choice. Earlier this week the association conducted a press conference with a number of officials urging the state legislature to pass a muni-deposit choice bill. For the full article, use the link.