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CU System Briefs (04/16/2013)

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  • WILMINGTON, Del. (4/16/13)--Christine Marie Kaczmarczyk, age 73, a former CEO of Dexsta FCU here, died April 10 at her home. Kaczmarczyk retired from Dexsta as CEO in 2005 after 36 years of service to the credit union. During her time at the helm, the credit union experienced significant growth and Kaczmarczyk expressed pride in her associates, co-workers and in the credit union network. A burial service will be held at 10 a.m. (ET), Wednesday, at St. Thomas the Apostle Church, 301 N. Bancroft Parkway, Wilmington, Del. …

2013 Diamond Award Winners Honored by Council

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MADISON, Wis. (4/16/13)--First Entertainment CU was recognized with the "Diamond Best of Show"--the highest "Best of Show" award--in the CUNA Marketing and Business Development Council's Diamond Awards competition during the council's 20th annual conference, March 24-27 in Anaheim, Calif.

"This year's Diamond Awards featured the best of the best in marketing and business development in the credit union industry," said Nancy C. Hutchinson, chair of the council Diamond Awards. "This year we endorsed a new matrix scoring system along with a redesign on the actual Diamond Awards. The members of the council were awestruck at the new design of the Diamond Awards."

Entered in the Brand Awareness category, Hollywood, Calif.-based First Entertainment CU created three commercials to highlight the difference between the credit union and a bank--a key component of its brand.

Each commercial emphasized the location on the studio lot and focused on a product or service. By the end of the commercial's run, the spots will have been seen by more than 50,000 viewers.

This year's awards competition received more than 1,100 entries. Judges awarded six entries as Best of Show, along with 88 Category's Best and 207 Diamond Awards.

Other Best of Show honorees included:

  • Color Award for Best Use of Art--Operating Engineers Local Union 3 FCU in Livermore, Calif., for its entry in the Plastic Access Card Design category. OE FCU rebranded and redesigned it credit and debit cards to be inclusive of all labor organizations. The cards incorporate a bold, rugged look, with a new color palette and allow members to upload a custom photo or choose from a catalog of images that include the new OE FCU branded choices.
  • Best Use of Humor--First Entertainment CU in Hollywood, Calif., for its "Don't feed the goat, No Dead Leaves, Terms and Conditions" ad campaign. First Entertainment CU used light-hearted TV ads featuring a well-known character actor to highlight the differences between the credit union and a bank.
  • Cut Award for Most Edgy--University of Kentucky FCU in Lexington, Ky., for its Complete Campaign. The credit union's campaign created awareness of the value and benefit it offers to members in a fun, not-so-traditional way. It did this through billboards, print and online ads, postcards and staff buttons directing visitors to its lipstickonabank.com microsite, which touted the credit union as a better option than traditional banks.
  • Clarity Award for Most Sentimental--Travis CU in Vacaville, Calif., for its Annual Report. Travis CU's annual report theme of "Looking Bank. Reaching Forward." captured the credit union's beginnings and showed members how it has grown over the decades while remaining committed to the vision of its founding members.
  • Carat Award for Greatest Impact--Woodstone CU in Federal Way, Wash., for its Awareness Campaign. As attitudes toward big banks declined, Woodstone CU created a campaign to differentiate itself in a heavily "over-banked" market.
For a complete list of awardees, use the link.

Leagues Defend CU Tax Exemption, Urge MBL Cap Increase

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MADISON, Wis. (4/16/13)--League presidents in Louisiana, Oregon and New York took to the media to defend credit unions' tax exemption or urge Congress to raise credit unions' member business lending (MBL) cap. Both are key issues on the Credit Union National Association's legislative priority list.

Credit unions do pay their taxes, said Louisiana Credit Union League President/CEO Anne Cochran, in a Sunday letter in The Advocate responding to a Louisiana Bankers Association attack on credit unions' tax-exempt status.

"Banks struggle with the reasoning behind why credit unions are tax-exempt," Cochran wrote. "Credit unions do pay federal, state and local taxes as any business, such as employment and property taxes. Credit unions are exempt from paying corporate income taxes because earnings are returned to their members, who are taxpayers themselves. They are not shareholders in for-profit businesses like banks.

"Additionally, credit unions are regulated extensively by state and federal government," she continued. "We follow many of the same guidelines as bankers do. Unlike banks, credit unions always have and always will exist to help people, not make a profit. We give back in ways that bankers don't," she said, adding that members enjoy lower loan rates, higher savings rates and superior service.

Troy Stang, president/CEO of the Northwest Credit Union Association, wrote in the Portland (Ore.) Tribune Thursday, "Bankers bristle at the realization that a not-for-profit financial alternative remains an important buffer for consumers to the high fees, higher loan rates and lower return on savings that are cornerstones of the banking industry's for-profit model."

"While credit unions continue to focus on serving their communities, the Oregon Bankers Association has joined its national Wall Street counterparts in trying to stifle credit unions," Stang said, noting banks control more than 90% of all assets in the U.S.

"The bank lobby is the man-behind-the-curtain introducing legislation to impose additional taxes and regulatory burdens on credit unions," Stang said. "They want to saddle credit unions with regulatory burdens such as paperwork itemizing the very civic and community investments that have benefited credit union members for decades."

He also noted that "it is the structure, not the size of credit unions, that makes them different. Profit-hungry banks are structured to generate payments to stockholders. Not-for-profit credit unions exist for one purpose: to provide value to their members."

Credit Union Association of New York President/CEO Bill Mellin and CUNA Executive Vice President of Governmental Affairs John Magill were  interviewed in The Street Thursday about credit unions' seeking an increase in the MBL cap to 27.5% of assets from 12.25% .  They noted that raising the MBL cap would create jobs and provide lending opportunities for small businesses without costing the taxpayer a dime.  CUNA estimates 158,000 new jobs and $14.5 billion in small business loans could be generated by raising the cap.

For the full articles, use the link.

NEW: CU Participants At Boston Marathon Are Safe

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BOSTON (FILED at 12:25 p.m.  4/16/13)--While credit unions maintained a presence at yesterday's Boston Marathon, no credit union representatives were reported injured as a result of the explosions that tore through the finish line of the race on Monday, killing at least two people and injuring dozens more.

Several credit union representatives were participating and volunteering in the historic marathon as part of the Credit Union Kids at Heart fund raising for Children's Hospital through Eascorp. All of the runners were identified and determined to be safe.

Federal officials said authorities were questioning a Saudi national who was taken to the hospital with injuries from the scene (Los Angeles Times April  15). Authorities were also seeking a Penske truck leaving the scene.

CU Hero Of The Year Voting Under Way

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MADISON, Wis. (4/16/13)--Voting is underway for Credit Union Magazine's 2013 Credit Union Hero of the Year.

The annual award honors individuals who exemplify the credit union philosophy of "people helping people," and who have made an extra effort to extend credit union service within their communities.

The year's candidates, nominated by Credit Union Magazine readers, are:

  • Warren Morrow (posthumous), founder of Coopera, a full-service Hispanic market-solution company, Des Moines, Iowa;
  • Lily Newfarmer, CEO of Tarrant County CU,  Fort Worth, Texas;
  • Anabela Pereira, CEO of Pioneer Valley CU, Springfield, Mass.; and
  • Scott Prior, president/CEO of Connection CU, Silverdale, Wash.
Voting ends May 17. Use the link to learn more about the candidates and to cast a vote.

This year's winner, or a representative, will be honored at the Credit Union National Association's America's Credit Union Conference in New York City, June 30 to July 3.

Fla Public Deposits Bill Still Alive In Committee

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TALLAHASSEE, Fla. (4/16/13)--Legislation that would allow Florida credit unions to accept public deposits is still alive in a Florida Senate committee awaiting action, said the League of Southeastern Credit Unions.

"There is a possibility it could get a hearing this year in the Banking and Insurance Committee," Mike Bridges, LSCU vice president of communications, told News Now. "The Florida legislature will be in session for three more weeks. While our public deposits bill has not been heard yet in committee, we still hope that it will pass this year.

"It still remains one of our top priorities," he added. "The league has made a strong push to educate consumers and municipalities on the issue. We have gotten great press coverage across the state. If it does not pass this year, our job is to continue to build this momentum and educate even more after session ends."  

House Bill 251, sponsored by State Rep. Bill Hager (R-Boca Raton), and Senate Bill 918, sponsored by State Sen. Rene Garcia (R-Hialeah), look to reverse the state law's mandate that public entities--such as fire and sheriff departments, schools and libraries--use only banks.

Credit unions have the same public depository requirements as for-profit banks. They also must offer the same protections to members and have the same accountability standards. However, because state law renders credit unions ineligible to receive these funds, Florida credit unions are forced to turn down deposit requests from local government entities, said the league.

If enacted, the legislation would provide local elected officials depository choice and allow credit unions to bring competition to public deposits for better returns and economic benefits to Florida's taxpayers, LSCU said.

Catalyst Annual Meeting Reviews Corporate's First Year

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PLANO, Texas (4/16/13)--Catalyst Corporate FCU in Plano, Texas, outlined its new business plan in 2011 and quickly attained its preliminary goals, President/CEO Kathy Garner told attendees at the corporate's second annual meeting April 9 in San Diego.

Garner cited examples in her review of the corporate's 2012 activities and financial performance:

  • Two consolidations. In July and October, Catalyst Corporate welcomed members of the former Western Bridge Corporate and FirstCorp.
  • Membership growth. During 2012, Catalyst Corporate increased its membership to nearly 1,300 capitalizing credit unions, up from roughly 900 members at inception. Catalyst Corporate has members in 21 states.
  • Financial achievement. Last year, Catalyst Corporate exceeded its projections for financial performance and efficiency, with net income of $13.9 million and under-budget operating expenses. The corporate's coverage ratio was in line with its 88% target--meaning 88% of expenses were covered by fee income. That degree of efficiency has the effect of reducing reliance on the balance sheet, Garner said.
  • Stability. By year-end 2012, Catalyst Corporate recorded about $160 million in perpetual contributed capital and a leverage ratio of 7.75%, exceeding the National Credit Union Administration's requirement of 5% to be considered "well-capitalized." The corporate also is ahead of plan on achieving its 2013 retained-earnings ratio target of 86 basis points, compared with the 45 basis points NCUA requires by October 2013.
Deepening member relationships and establishing more meaningful member feedback had been a goal since Garner became CEO in March 2012, she noted. To accomplish that goal, Garner and her management team attended credit union events and met with the Catalyst Councils--three regional groups founded to channel member feedback into Catalyst Corporate's planning efforts--and by conducting member surveys, she said.

Catalyst Corporate also committed to transparency in 2012, Garner said. The organization published financial results throughout the year and a "score card" that charted its progress toward achieving its business plan goals. In late 2012, the corporate fine-tuned the information available in the Due Diligence section of its website and rolled it into one comprehensive Due Diligence Report, which is now updated and published quarterly.

Catalyst members elected to three-year terms on its board of directors were:

  • Bill Before, STCU, Liberty Lake, Wash.;
  • Syed Dinar, Texas Bay Area CU, Houston;
  • Lin Hodges, Associated CU, Norcross, Ga.; and
  • John Papagno, Alive CU, Jacksonville, Fla.
Trevor Tokishi, Valley Isle Community FCU, Kahului, Hawaii, was elected to a one-year board term.

New Survey: CUNA Tracking Training Trends

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MADISON, Wis. (4/16/13)--Like their counterparts in the corporate world, credit unions report that they are increasing their training dollars, according to a new Credit Union National Association State of the Credit Union Training Industry Survey.

In 2012, the amount budgeted for education specific expenses (conferences, training materials, online training) averaged $46,574, while education-related expenses (travel, meals, lodging and so forth) averaged $30,592. That compares with $42,101 and $27,697, respectively, spent on these in 2011.

These averages grow as assets increase, ranging from $20,000 among credit unions with assets of less than $100 million to nearly $150,000 among those with assets of $1 billion or more.

CUNA surveyed more than 100 credit union training professionals about their budgets, training challenges and methods. The survey forecasts consistent or increasing training budgets, with less than 10% of credit unions surveyed planning any cutbacks.

Credit unions' training results largely mirror those found in national corporate world surveys by the American Society of Training and Development (ASTD), said Marlo Foltz, CUNA's director of blended learning.

One finding: Executive management teams and volunteer boards adopt tablet training, but that trend has not seeped to nonmanagement staff yet. "Nonmanagement staff is still heavy in the face-to-face training," Foltz said.

"Credit unions are slower in adopting online and blended training," she said. "That's likely because more credit union trainers come up through the ranks. Their experience is with one-on-one, face-to-face course skills training. Now, more trainers are coming from outside with experience in the education industry and who have experience with instructional design."

She noted similarities in the studies about the barriers to adopting blending learning. ASTD found that for corporations, the main barriers to adopting blended lending are budgets, a lack of understanding from senior management leaders, and a lack of an information technology (IT) structure. In CUNA's survey, credit unions' top barriers were budgets, security and a lack of IT infrastructure.

CUNA has made several adjustments in its learning programs. It will:

  • Continue meeting the needs of executives and boards by offering tablet-ready instruction;
  • Provide more tools so credit unions can create their own training programs;
  • Partner with course authoring tools for CUNA CPD Online subscribers;
  • Offer a Blended Learning white paper from CUNA Councils;
  • Expand Take-Charge Ideas for Trainers Webinar Series; and
  • Develop in-depth topics for CUNA HR/TD Council Conference and CUNA Experience Learning Live!
CUNA Experience Learning Live! in October will focus on how trainers can measure their success with training metrics so they can take actual numbers to their boards to show the value of the training to the bottom line and focus on the business of training, Foltz told News Now.

"Nationally, and in credit union-specific industries, the training outlook for 2014 is a positive one," Foltz said.  "Credit unions will offer more training, and devote more of their budgets to training," she added, noting that the improving economy is a factor in the training growth.

For more information, use the links.

Court To Consider Dismissal Of WesCorp Exec Case After Settlement

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LOS ANGELES (4/16/13)--Papers were filed Monday in a federal court in Los Angeles that would end the last negligence lawsuit against a Western Corporate FCU executive by the National Credit Union Administration as well as a countersuit by the executive, in light of a settlement in the case.

NCUA, as liquidating agent for WesCorp, had sued several executives, including Todd M. Lane, former chief financial officer at WesCorp, about their roles in the corporate's investment in residential mortgage-backed securities. Losses from those securities contributed to the conservatorship and liquidation of the corporate.

The joint motion calls for U.S. District Judge George H. Wu Monday to dismiss with prejudice all claims and counterclaims between NCUA and Lane.  It had been announced in January that they had reached a tentative settlement, subject to approval of NCUA's counsel and board (News Now Jan. 7).

Other former WesCorp employees sued by NCUA had settled their cases earlier.  They included Robert Siravo, former WesCorp CEO, Thomas Swedberg, former human resources director; Bob Burrell, chief investment officer; and Timothy Sidley, former chief risk officer. NCUA has since issued cease and desist orders, prohibiting them from participating in any affairs of a federally insured credit union.

Donna Gordon Elected West Virginia League Chairman

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MORGANTOWN, W.Va. (4/16/13)--Donna Gordon, manager of Mercer County WV Teachers FCU, Bluefield, W. Va., has been elected chairman of the West Virginia Credit Union League board of directors.

The elections were conducted following the league's 77th annual meeting Saturday in Morgantown, W.Va.

Other board officers elected include:

  • First Vice Chairman--Carol Johnson, CWV Tel FCU, Clarksburg;
  • Second Vice Chairman--Lynne Teets, Whetelco FCU, Wheeling;
  • Treasurer--Mike Tucker, WV Central CU, Parkersburg; and
  • Secretary--Joetta Heck, Kemba Charleston FCU, Dunbar. 
Heck received the William Bryan Hawkins Award, the league's highest volunteer honor.

Receiving the Pacesetter Award was John Peterman, First Choice America Community FCU, Weirton. The award symbolizes excellence among paid credit union staff in West Virginia.

Longest Serving CU Volunteer Leaves After 70 Years

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GREENSBORO, N.C. (4/16/13)--Elizabeth N. "Sis" Hamilton was just a teen in 1943, when she became the secretary of the board of directors at Tri-City Telco CU, now Summit CU.  After 70 years of service, Hamilton--the longest-serving credit union volunteer in U.S. history--has decided not to seek re-election to the board.

Hamilton was the manager and CEO of Greensboro, N.C., based Summit CU for 55 years, before retiring in 2003.  During that time, she managed as many as five other credit unions while running Summit, which has $138.8 million in assets, with roughly 24,000 members.

A trailblazer, Hamilton held volunteer leadership roles locally and nationally. She spent 25 years on the North Carolina Credit Union League Board as its first female member, 21 years on the Credit Union National Association Board, and 12 years on the National Association of State Credit Union Supervisors Council Board.

Her career gained her accolades in the industry, including the 2003 prestigious Order of Longleaf Pine and the 2007 Larry Johnson Order of Merit Lifetime Achievement Award, the highest award presented to North Carolina credit union leaders. In 2012, Hamilton was named North Carolina Credit Union Volunteer of the Year.

Maine League Backs ATV Bill, Opposes Privacy/Data Bills

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PORTLAND, Maine (4/16/13)--The Maine Credit Union League supports a state bill to require titling for all-terrain vehicles (ATVs), snowmobiles and watercraft, but opposes two separate bills regarding privacy protection and personal data.

The league helped to draft language for L.D. 1190--regarding ATVs, snowmobiles and watercraft. The lead sponsor of the bill is Rep. Ray Wallace, who chairs the supervisory committee at Maine Highlands FCU in Dexter (Weekly Update April 12).

"For many years, the issue of titling ATVs, snowmobiles and boats has been the No. 1 requested piece of legislation from credit unions" in the state, said league President John Murphy.

The league coordinated testimony Thursday by credit union representatives before the Inland Fisheries and Wildlife Committee in support of the bill. Adam Sheehan, executive vice president at Maine Highlands FCU, Dexter, and Roland Poirier, president/CEO of Otis FCU, Jay, testified in support of the bill.

"Titling recreational vehicles would assure consumers that their seller is the true owner," Sheehan explained. In addition, "the lender would be assured that their borrower is the true owner and therefore authorized to pledge the recreational vehicle or device as collateral for a loan.

"This would likely enable lenders to not only make more of these types of loans, thus benefiting the economy, but also offer these loans at lower rates as a result of the titling provision which benefits the consumer," he added.

The league testified April 8 in opposition to L.D. 1195-- a bill that would prevent employers from obtaining consumer reports with information about an individual's credit and financial state. Quincy Hentzel, league director of  governmental affairs, testified before the Labor, Commerce, Research and Economic Development Committee, that the bill "could have significant, negative ramifications, especially in the financial services industry.

"Without having the benefit of knowledge about a potential employee's financial standing and a clear understanding of their credit history, a credit union could be putting its reputation, its organization and its relationships in jeopardy," Hentzel explained. "The impact of hiring an employee who is financially irresponsible could be as damaging to a credit union as hiring a person with a criminal history, which is information that is accessible."  

The league also attended the work session for L.D. 158--which seeks further protection for consumers' personal data. The league testified in opposition to the bill at the public hearing, citing the lack of an exemption for financial institutions. The committee voted the bill 7-5 Ought Not To Pass, and it will go to the full legislature for consideration.

Cavazos Named Chair Of Texas CU Commission

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AUSTIN, Texas (4/16/13)--Texas Gov. Rick Perry has named Manuel "Manny" Cavazos IV of Austin, Texas, chair of the Texas Credit Union Commission, and has appointed three members to the commission for terms that expire Feb. 15, 2019.

The commission supervises the department, which regulates all credit unions organized and chartered under the laws of the state of Texas, according to a release from Perry's office.

Cavazos is an attorney and certified public accountant (CPA) in private practice and rancher. He is a member of the Texas Society of CPAs, American Bar Association, American Immigration Lawyers Association, California State Bar, and National Association of Consumer Bankruptcy Attorneys.

New Credit Union Commission members are:

  • Allyson "Missy" Morrow of San Benito, CEO of the Harlingen (Texas) Area Teachers' CU. She is secretary for District 10 of the Texas Credit Union League, a board member of the Texas Credit Union Foundation, and a member and past board member of the Magic Valley Chapter of Credit Unions.
  • Barbara "Kay" Stewart of Daingerfield, president/CEO of the North East Texas CU in Lone Star. She is a board member of the Texas Credit Union League.
  • Vik Vad of Austin, a licensed real estate broker and president of Om Capital Management Inc. He is a member of the Austin Board of Realtors and a volunteer for the Capital Area Food Bank.
The appointments are subject to State Senate confirmation.