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Fed Mobile banking rising security still a barrier

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WASHINGTON (4/20/12)--Mobile phones and mobile Internet access are in widespread use, and the ubiquity of the devices is changing the way consumers access their financial services, according to a report commissioned by the Federal Reserve. However, two issues continue to hold back others from adopting mobile financial services.

About 87% of the U.S. population has cell phones, said the Fed's report, entitled "Consumers and Mobile Financial Services March 2012."  

Roughly  21% of those with cell phones used them for mobile banking in the past 12 months, and others plan to--11% of the rest said they  probably will do so in the next 12 months.

Those who used their phones for mobile banking indicated that the most common use was to check  their account balances (90% of mobile banking users did this). The second most common activity: transferring money between accounts, (42% of mobile banking users).

Mobile phones also are changing the way consumers make payments, said the Fed's report.  About 12% of mobile phone users making a mobile payment in the past 23 months, with 47% of those making an online bill payment with their phones and 21% transferring money directly to another person's bank, credit card, or Paypal account.

Two issues, however, continue to plague adoption of mobile banking services: security and a perception of limited usefulness, said the Fed.

Fifty-eight percent of mobile phone users who have not adopted mobile banking yet said that their banking needs were already being met without the use of mobile banking.  Later in the report, however, it was noted that consumers who employ mobile phones to timely financial incentives and emotional appeals about saving time and convenience.

Security was cited as the main reason for not mobile banking by 42% and the second main reason by another 48% . They expressed concerns about hackers gaining access to their phones and their personal financial information and about the costs related to security.

More than one-third of mobile phone users who don't engage mobile banking said they didn't see any benefit from using mobile payments. They also said they found it easier to pay with another method.

Another key finding:  The "underbanked" make significant use of mobile financial services, with 29% using mobile banking and 17% using mobile payments in the past 12 months.  Of the 17% who made mobile payments, 62% did so to pay bills.

Mobile phone use is high among the younger generations, minorities and those with low levels of income--groups that are prone to be underbanked or unbanked, said the Fed.

A lesson for credit unions from this report:  Offering mobile banking  to these groups might be the ticket to developing relationships with new members, especially those in two areas targeted for growth by many credit unions: serving Gen Y and serving Hispanics. But credit unions will have to have the technology to ensure their mobile banking services are more secure.

The survey was administered by Knowledge Networks, an online consumer research company commissioned by the Fed. It took samples of adults ages 18 and 0ver. There were 2,290 respondents who completed the survey. To see the report, use the link.

One dead one injured in shooting in CU parking lot

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CHESTERFIELD, Va. (4/20/12)--One person is dead and another injured as a result of a shooting that occurred in the parking lot of Virginia State University FCU in Ettrick, Va.

Police said Tyrail W. Hughes, 20, of Petersburg, Va., was fatally wounded after he and two other young men confronted a group of four males sitting on a curb near the $11 million asset credit union, said Chesterfield police Capt. David Pritchard (Richmond-Times Dispatch April 18).

Hughes and his friends approached the second group of males, who felt threatened, resulting in a confrontation, Pritchard told the newspaper.

An unidentified male from the second group then pulled a pistol and fired several shots, fatally wounding Hughes. A stray bullet struck an 18-year-old university student who was not involved in the confrontation and happened to be walking by, Pritchard told the paper.

The unidentified student was treated at a local medical facility for a gunshot wound to his foot and released.

Surveillance cameras in the area captured the entire incident, Pritchard told the paper. Investigators are reviewing that footage to identify the participants, he added.

TCUF honors fin. literacy champions

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FARMERS BRANCH, Texas (4/20/12)--The Texas Credit Union Foundation honored the dedication, commitment and hard work of Texas' best financial literacy advocates with its annual FOCUS Awards.

The awards were given during the Texas Credit Union League's 78th Annual Meeting & Convention in Galveston Wednesday (LoneStar Leaguer April 19).

Honored were:

  • Generations FCU in San Antonio in the credit union category;
  • The Fort Worth Chapter of Credit Unions in the organization category; and
  • Kelsey Balcaitis of A+ FCU in Austin, who received a Foundation Focus Network Member award.
Generations FCU was commended for collaborating with private and public schools, as well as colleges and universities to ensure that students of all ages have access to resources and to make smart financial choices. The credit union offers NerdWallet.com, an online financial literacy library, and its "No Suckers Here" employee-driven program that helps students in local high schools, colleges and universities understand basic financial concepts.

The Fort Worth Chapter of Credit Unions earned accolades for sponsoring CU 4 Reality Fairs at two different local middle schools, reaching more than 300 students. Financial reality fairs give young people the opportunity to participate in a hands-on event that guides them through the personal financial management process, including budgeting, saving and investing in a simulated real-world environment.

Balcaitis was recognized for being a dedicated advocate for improving the financial knowledge of young people. Under her direction, A+ FCU operated a Youth Financial Camp for the past two years. In her role as community education specialist, Balcaitis developed the "Business Proposal Challenge" for the credit union's first Youth Financial Camp in 2010. The goal of the challenge is to give campers hands-on experience with being an entrepreneur.

For the 2011 camp, Balcaitis developed the "Great Money Race," an interactive board game that tests campers' financial knowledge and decision-making skills. In 2011, 117 young people attended the summer camp-- a 60% increase from the previous year.

CU System briefs (04/19/2012)

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  • EDINBURG, Texas (4/20/12)--Two people were injured Wednesday when a car plowed into the front glass frame of the Edinburg (Texas) CU.  The incident occurred shortly before noon at the $72 million asset credit union when the driver of the car drove it into the building. Emergency personnel transported a man and a woman to a local hospital. It is not known whether they were passengers in the car or how seriously they were injured. (The Monitor April 19) …
  • ALBANY, N.Y. (4/20/12)--Credit Union National Association Chief Economist Bill Hampel will address credit unions at the Credit Union Association of New York's Annual Meeting and Convention June 9 in Lake George, N.Y.  Hampel's general session presentation will address the current economy as well as key legislative and regulatory issues impacting credit unions. Hampel is senior vice president of research and policy analysis at CUNA. He regularly is interviewed on the economy and credit union issues and has appeared in major national news outlets such as Bloomberg TV and Radio, The Wall Street Journal, MarketWatch, The Associated Press, CNBC, Reuters, CNN, SmartMoney, Dow Jones News Service, Kiplinger's Personal Finance magazine and USA Today, among others ...
  • LOS ANGELES (4/20/12)-- Joseph "Joe" S. Melchione, longtime  credit union attorney and advocate and senior partner of Styskal, Wiese & Melchione (SW&M) , is dead at the age of 64.  He died Tuesday after a battle with lung cancer.  He joined the firm in 1974, and under his leadership SW&M was the first law firm in the nation to specialize in serving the needs of the credit union industry. It grew to serve more than 350 credit unions nationwide. "Joe's unfailing belief in the core values and principles of the cooperative model and its place as an essential consumer service has left a long legacy spanning hundreds of clients and helping shape the industry today," said Bruce Pearson, a partner at SW&M.  A passionate and vocal advocate for the philosophy, ideals and future of credit unions,  Melchione was instrumental in the development of wide-ranging credit union legislation and regulations for more than three decades. He was a well-known speaker in the movement. He was also a faculty member for more than 25 years at Western CUNA Management School. Funeral arrangements have not been finalized but will be posted on www.law4cus.com as details are completed …

CUNA chairman to Texas CUs What you do makes a difference

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"No matter your role at a credit union--you could be a hired strategist or an elected official--the highest form of gratification is to know that what you do makes a difference," Mike Mercer, CUNA chairman and president of Georgia Credit Union & Affiliates, told attendees of the Texas Credit Union League annual meeting Wednesday. (Photo provided by the Texas Credit Union League) 
FARMERS BRANCH, Texas  (4/20/12)--The chairman of the Credit Union National Association  (CUNA) and several other speakers told Texas credit unions that they make a real difference for members at many levels, during the Texas Credit Union League (TCUL) annual meeting Wednesday.

"If you're like most people serving in the credit union movement today, you likely discovered your credit union professional or volunteer career by accident," CUNA Chairman and President of Georgia Credit Union & Affiliates Mike Mercer told attendees (LoneStar Leaguer April 19).

"I was supposed to be a rock star," Mercer said. "But I soon discovered I wasn't very good at it."

Instead, Mercer went to college, studied finance, and by accident, discovered credit unions. "After college, I had planned to go to Wall Street, but I found my passion was credit unions," he added.

"No matter your role at a credit union--you could be a hired strategist or an elected official--the highest form of gratification is to know that what you do makes a difference," said Mercer.

Other speakers gave similar positive  messages. They included:

  • Josh Allison of Horizon CU in Spokane Valley, Wash., who said credit unions are structured to provide real value to consumers. The conditions for success couldn't be better. Consumers today want to do business with a financial institution whose values aligns with their personal values, he added. "It's not about the products and services you provide," Allison said. "It's about the purpose. Great organizations have a cause."
  • TCUL President/CEO Dick Ensweiler, who said that while consumers must understand and be more aware of the credit union difference, they cannot ignore elected officials. "We have to get political," he added. "We cannot allow the banks to dictate our future. We have to take control of our destiny." Credit unions can get more engaged politically, Ensweiler said, by getting more engaged in grassroots advocacy. One example is TCUL's latest initiative, CU: R.O.A.R., which stands for Ready, Organized, Activated, and Responsive. Another is TCUL PAC, which allows Texas credit unions to support those candidates that support credit unions' cause.
  • TCUL Chief Advocacy Officer Tom Haider, who said Senate Bill 2231, the Credit Union Small Business Jobs Bill, is a focal point of key credit union legislative issues. The bill, which will raise the member business lending cap to 27.5% from 12.25% is about credit unions controlling their own destiny, he added. Noting that the bill is the first credit union focused legislation since H.R. 1151, he encouraged attendees to write lawmakers and ask for their vote. "We have to stand united as a movement," Haider said.

Texas 12 crashes league annual meeting

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Members of the Texas 12--a Texas Credit Union League (TCUL) initiative for up-and-coming young credit union professionals under the age of 35--'crashed' the TCUL annual meeting Wednesday. (Photo provided by the Texas Credit Union League)
FARMERS BRANCH, Texas (4/20/12)--Members of the Texas 12 talked about credit union issues with Texas Credit Union League (TCUL) President/CEO Dick Ensweiler Wednesday. The Texas 12 is a new TCUL initiative, involving up-and-coming young credit union professionals under the age of 35.

"We are an aging movement and we need to attract a younger audience," Ensweiler told the group. "To successfully attract younger members, it's important that we have engaged young professionals serving in our movement"  (LoneStar Leaguer April 19).

TCUL should not dictate what the Texas 12 does, but rather the group members should share their thoughts and ideas for making the credit union movement more relevant to young people, Ensweiler said.

The league, in collaboration with the Filene Research Institute, created the Texas 12 to help catalyze change in the system and spark positive growth in the credit union community.

The Texas 12 also will hold a planning session today, and throughout the three-day conference in Galveston, its members will attend educational sessions, social functions and network with veteran credit union leaders.

The Texas 12 members are:

  • Shelby Ames, Liberty (Texas) County Teachers FCU;
  • Kelsey Balcaitis, A+ FCU, Austin;
  • Doug Bedner, Resource One CU, Dallas;
  • Victoria Cline, Neighborhood CU, Dallas;
  • Brittany Doering, Family 1st of Texas FCU, Fort Worth;
  • Kate Donovan, Texoma Community CU, Wichita Falls;
 

  • Chad Holz, University FCU, Austin;
  • Lori Martinez, Houston Fire Fighters FCU;
  • Jana Mearns, People's Trust FCU, Houston;
  • Casey Moehring, Kelly Community FCU, Tyler;
  • Nikki Moore, Space City CU, Houston; and
  • Jamaal Dwayne Robinson, New Mt. Zion Baptist Church CU, Dallas.

Wanted CU global brand identity

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MADISON, Wis. (4/20/12)--
Click to view larger image Participants at World Council of Credit Unions' Build a Brand Workshop include, standing from left, Mary De Sousa, Canada; Lynda Savoit, U.S.; Trish Shermot, U.S.; Rich Harries, Canada; Mark Wolff, U.S.; Daniel McDougall, Australia; Denise Gabel, U.S.; Peter Challis, Australia; Sue Mitchell, U.S.; Nathalie LaChance, Canada; Paula Martin, Canada; and Suzanne Gendron, Canada; kneeling, WOCCU staffers Liliana Tangwell, left, and Tiffany Litscher.
Credit unions have made great strides worldwide from consumers' disillusionment with banks during the recession. However, they still need to better articulate the credit union difference in a way that resonates with consumers, according to an international group gathered by the World Council of Credit Unions (WOCCU) to take the first step toward developing a global credit union brand.

The Build a Brand Workshop, funded by a grant from Vancity CU, Vancouver, B.C., brought together 12 credit union and trade association executives from Australia, Canada and the U.S. earlier this week. Its goal was to identify best practices in current credit union messaging and work together toward a refreshed approach as part of the larger strategy to build a global credit union brand, said WOCCU President/CEO Brian Branch.

"We have learned a lot about changes in consumer preferences, and our members around the world are adapting their messages to today's changing market," Branch said.

In addition to Branch and WOCCU staff, participants included: 

  • Peter Challis, CEO of WAW CU and Daniel McDougall, senior media adviser for Abacus-Australian Mutuals, both from Australia;
  • Suzanne Gendron, vice president of executive services, and Nathalie LaChance, vice president of brand management and public relations, from the Desjardins Group in Canada;
  • Paula Martin, adviser to the CEO of Vancity; Mary De Sousa, assistant vice president of marketing at FirstOntario CU; and Rich Harries, community development manager, Affinity CU, all from Canada;
  • Denise Gabel, chief financial officer and strategy officer for the Filene Research Institute; Sue Mitchell, CEO of Mitchell, Stankovic & Associates; Trish Shermot, marketing manager of CTCE FCU in Pennsylvania; Lynda Savoit, senior vice president and chief operating officer for Orange County's CU in California; and Mark Wolff, senior vice president of communications at the Credit Union National Association, all from the U.S.
Click to view larger image Peter Challis, left, explains marketing challenges Australia credit unions face to Canada's Nathalie LaChance, and World Council of Credit Unions President/CEO Brian Branch.
The session was moderated by Maya Bourdeau and Jiao Zhang, partners of consulting firm Attune LLC.  The group told of these challenges facing credit unions:

  • In Australia, credit unions have worked hard and improved their brand identity among consumers, but some consumers still perceive them as less safe than for-profit financial institutions.
  • In Canada, credit unions have done a good job differentiating themselves, but banks have begun marketing similar social values, and consumers tend not to know or care about the difference.
  • In the U.S., credit unions have made great strides as well as faced great challenges in recent years largely due to social turmoil, which has made the situation for credit unions complex and the resulting marketing messages mixed.
  • In all three countries, credit unions are challenged to attract Generation Y and other younger consumers whose personal values closely match those of cooperatives, but whose communications methods and lack of interest in traditional media make marketing credit unions to them difficult.
Click to view larger image Credit unions need to have a clear voice and clear choice, explained Canada's Mary De Sousa at the World Council of Credit Unions' Build a Brand Workshop. (Photos provided by the World Council of Credit Unions)
Changing consumer behavior is always a challenge, and one made even more complicated by the complex process of changing financial institutions, said Bourdeau.  "People need a compelling reason to switch financial institutions," Bourdeau said, adding, "There is a distinct difference between awareness and action. Action occurs when it can be easily accomplished."

Participants agreed, also citing a need for clear, simple articulation of the credit union difference presented as a benefit to consumers.  "In a world where banks hold us for ransom, we need to have a voice and choice," said First Ontario's De Sousa, herself a former banker.

Bourdeau advised participants to keep their marketing consumer-centric, pitch a solid benefit and choose an engaging emotional hook in their explanations of the credit union difference.  If a messaging strategy incorporates those attributes, the credit union difference has a better chance of resonating with more consumers, including the Gen Ys.

Results from the workshop and the next steps of the brand development process will take place during a session at WOCCU's World Credit Union Conference July 15-18 in Gdansk, Poland, during which the panelists will present the workshop's results.

Franken Pawlenty praise CUs at MnCUN meeting

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BLOOMINGTON, Minn. (4/20/12)--U.S. Sen. Al Franken (D-Minn.) and former Minnesota Gov. Tim Pawlenty  cleared their schedules for credit unions this past weekend to speak at the Minnesota Credit Union Network's (MnCUN) Annual Meeting & Convention. They praised credit unions for their service model and contributions to their communities and Minnesota as a whole.
Click to view larger image U.S. Sen. Al Franken (D-Minn.), left, spoke with Credit Union National Association President/CEO Bill Cheney, center, during the Minnesota Credit Union Network's Annual Meeting April 13-14 about the need to increase business lending.
 

Focusing on credit unions' member business lending (MBL) efforts, Sen. Franken applauded the movement for its commitment to making loans during the financial crisis. He noted that credit unions fulfilled the business lending need during the recession, even when banks pulled back on their lending efforts.

Franken, who is a co-sponsor of the MBL bill in the Senate that would raise the cap on credit unions' MBL to 27.5% of assets from the current 12.25%, expressed his dedication to helping credit unions continue to boost their business lending activities.

"I want you to be able to continue providing capital [to small businesses] and to continue doing that at a more robust rate by raising the cap," Franken said.

In a meeting with Franken, Credit Union National Association (CUNA) President/CEO Bill Cheney thanked the senator for his support of the MBL bill and urged him to encourage his colleagues to also co-sponsor the bill.

Click to view larger image Former Minnesota Gov. Tim Pawlenty told credit unions that small and mid-size businesses are the 'real juice of the economy' during the  Minnesota Credit Union Network's Annual Meeting. (Photos provided by the Minnesota Credit Union Network)
During the conference, Pawlenty provided an insider's look at political campaigns and praised credit unions for the work they do for Minnesotans.

"I'm a member of a credit union, and I'm a very satisfied member," Pawlenty said. "I hope you are proud to be working with and for credit unions. They do wonderful work." 

He also provided credit unions insight into his run for president last year. The campaign trail provides for a very humbling experience as candidates work to persuade a small subset of the population to vote for them, he said. Pawlenty noted that in the end "a very small number of people in a very small number of states get to decide who the major candidates are."

He also discussed the nation's unemployment challenges, budget problems, and the desire to build up the economy. The primary focus, he said, should be on strengthening small businesses, which are the engine of economic growth.

"The answer resides not with career politicians but with entrepreneurs. The real juice of the economy is small and mid-size businesses," Pawlenty said.

CUNA estimates that by raising the MBL cap, credit unions can help inject $13 billion into the economy for small business loans, which would create 140,000 new jobs, without costing the taxpayer a cent.