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NY lawmakers push for lifting MBL caps

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ALBANY, N.Y. (4/21/10)--U.S. Sen. Kristen Gillibrand (D-N.Y.) and U.S. Rep. Paul Tonko (D-N.Y.) pushed for legislation that would lift the caps on member business lending at credit unions during an event at SEFCU in Albany. Mayor Jerry Jennings, Credit Union Association of New York President/CEO William Mellin and several other local business leaders attended the event. Credit unions are required to cap their lending at 12.25% of their assets, but would like the cap to be raised to 25% of total assets and increase the minimum business loan subject to the cap to $250,000 from $50,000. Gillibrand is working on a bill that would increase those caps to include in an upcoming small business jobs package to be drafted by Congress. “This commonsense legislation would free up lending at not-for-profit credit unions in every corner of America to small businesses,” she said. “This would give small businesses more of the capital they need to get off the ground, grow and get thousands of Americans get back to work.” Tonko added, “This bill will deliver a new and badly needed stream of capital through or credit unions, which will help new and existing small businesses invest, expand and create new jobs, and greatly improve our economic outcome.” If the cap was raised, SEFCU could provide another $260 million in business loans, said Michael J. Castellana, SEFCU president/CEO. “I thank Sen. Gillibrand for her leadership on this legislation that would help New York’s credit unions help small businesses,” Mellin said. “Not only has she lent her name to the legislation, Gillibrand has been a vocal advocate with Sen. Charles Schumer (D-N.Y.) to see this legislation enacted. We applaud the senator’s recognition of SEFCU’s contributions to the community, and appreciate her support for credit unions across New York.” Gillibrand also has spoken at Bethpage (N.Y.) FCU and written an op-ed piece explaining why she supports lifting the caps on member business lending.

Conference Board CEO confidence slightly declines

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FARMERS BRANCH, Texas (4/21/10)--The Conference Board’s Measure of CEO Confidence decreased slightly in first quarter 2010 after it had increased in the fourth quarter 2009. The Conference Board is nonprofit, private business research firm based in New York City. The measure decreased to 62, down from 64 in the last quarter. A reading of more than 50 points reflects more positive than negative responses (LoneStar Leaguer April 19). “CEOs continue to rate current economic and industry conditions favorably, but expectations are that the pace of growth will not pick up in the months ahead,” said Lynn Franco, director of The Conference Board Consumer Research Center. “Hiring plans are improved from last year, but less than a third expects employment levels to increase this year.” CEOs’ assessment of current economic conditions is less favorable. About 71% said conditions have improved, compared with six months ago, down from 75% last quarter. However, in assessing their own industries, business leaders’ attitudes improved, with 59% claiming conditions are now better, compared with 54% last quarter. Looking ahead six months, CEOs are slightly less optimistic. Roughly 52% of business leaders expect economic conditions to improve in the next six months, down from 58% last quarter. Expectations for their own industries also are less positive, with 42% of CEOs anticipating an improvement in the months ahead, down from 45% last quarter. More than 30% of CEOs anticipate an increase in employment levels in their industry, up significantly from less than 3% a year ago. The proportion of CEOs who anticipate a decrease in hiring nosedived to 22% from 86% a year ago.

More members use cash back at POS

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TALLAHASSEE, Fla. (4/21/10)--U.S. credit-union-member behavior has evolved since 2009, with 63% of respondents citing that their members’ of point-of-sale (POS) use has increased since then, according to a new survey. Credit Union 24 conducted the survey in February at the Credit Union National Association’ Governmental Affairs Conference.
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Thirty-seven percent of respondents said that POS usage has remained steady since 2009, and 0% of respondents cited that POS use has decreased among their membership (see Figure No. 1). Use of POS for cash-back among credit unions members is also on the incline, with a large majority (89%) of credit union leaders citing that up to 40% of their membership uses POS for cash-back. Why is POS for cash-back increasing? “More and more merchants accept POS transactions [for cash-back]--fast-food restaurants, service stations and the like,” Jim Gowan, Credit Union 24 executive vice president and chief operating officer, told News Now. “People are just using debit cards more. The economic downturn helped cause that. But also with POS, members can track expenses more through online banking and can budget better.” Yet while POS use is increasing, ATM use appears to be gradually slowing down, with 7% of credit union leaders citing that their members’ use of ATMs has decreased since 2009. Only 50% cited an increase in ATM use over 2009 (see Figure No. 2).
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“The younger generation now is using debit cards like cash---the way my kids do,” Gowan said. “The debit transactions have been outpacing credit card transactions. Debit card use is growing faster at POS versus signature debit transactions, though both are going up. Also, debit card use has outpaced credit card use for several years. “Traditionally, lots of credit unions encourage members to use signature debit over Personal Identification Number (PIN) debit because the interchange was higher,” he added. “But PIN is safer than signature because of fraud, so credit unions should note that. POS is a good opportunity to increase income for credit unions.” Also, by changing member behavior so they get cash back at POS, credit unions receive money on the interchange fee from the transaction, but eliminate the ATM charge they would have to pay out, Gowan said. “So it’s a good double whammy because there’s no expense for the credit union,” he added. Credit Union 24 is a member-owned, full-service, deposit-taking ATM and POS network with multiple processor links, hundreds of thousands of POS locations at national retailers and local merchants, and more than 100,000 ATM terminals nationwide.

White paper suggests financial training wheels for Gen Y

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ST. PETERSBURG, Fla. (4/21/10)--Thirty-six percent of Generation Y opened a new financial account in 2009--leading all other age groups in signing up for new savings, debit and primary checking accounts. Building financial relationships with this consumer segment is the topic of a new white paper from PSCU Financial Services. The paper, “Building a Gen Y Continuum,” is available free at and discusses what credit unions can do to attract members of this age group. For instance, credit unions can consider offering them reloadable prepaid cards as “financial training wheels,” which can teach youth how to manage a budget. Teen checking accounts with parental oversight also can be offered to high school students, along with debit cards tied to a teen checking or savings account--with parental cosigners. The youth will then be a good prospect for products from the credit union such as student or auto loans, savings and checking accounts, when they reach adulthood. “Credit unions are in an excellent position to attract these young adults because of our member-friendly practices and because their parents may well be members of a credit union,” said David J. Serlo, president, PSCU Financial Services. “Credit unions can build important long-term relationships by promoting and offering financial products that are designed to serve the evolving needs of this generation with an appropriate level of parental involvement along the way. Because of their numbers, this generation is critical to the success of our industry.” PSCU Financial Services also offers, a site to help credit unions attract Generation Y through interactions with young adults and their parents. PSCU Financial Services is a credit union service organization based in St. Petersburg, Fla.

Turned away by bank small biz owner gets help from CU

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MADISON, Wis. (4/21/10)--Melissa Destree needed a line of credit for her Madison, Wis.-based architectural firm last year, but when she went to her longtime bank, a banker told her to lay off an employee rather than give her more credit. Destree, owner of Destree Design Architects, said she had gone through cost-cutting and did not want to fire anyone because her six-person staff was crucial to business. So Destree went to Summit CU, Madison, Wis., for help (Milwaukee Journal Sentinel April 17). Within five days, Summit gave her a loan at a lower interest rate than the bank to pay off her debt to the bank, and a $50,000 line of credit. Brett Thompson, CEO of the Wisconsin Credit Union League, told the newspaper that credit unions are ready to “pick up the slack from banks that have financial troubles or are nervous about lending in the current economic environment.” Credit unions are lobbying to increase their member business lending caps to 25% of total assets from 12.25%, but bankers have argued that the higher cap would give credit unions an unfair advantage. Thompson told the newspaper there is “no logical reason” why the caps should not be raised. Credit unions have the willingness, market and desire to make business loans, he said. The Credit Union National Association estimates that lifting the cap would generate $362 million in new credit union business loans in Wisconsin and $10 billion nationally in the first year.

CU System briefs (04/20/2010)

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* OKLAHOMA CITY (4/21/10)--Allegiance CU, Oklahoma City, formerly Federal Employees CU, is remembering the blast that killed 18 of its employees and two of its volunteers during the bombing of the Alfred P. Murrah Federal Building in Oklahoma City, April 19, 1995. The credit union noted the bombing on its website, Facebook and Twitter pages. “We remember our co-workers, friends, and loved ones whose lives were ended by the events of April 19, 1995,” the credit union said on its Facebook page. The credit union also posted a video of how the bombing changed the credit union ... * NEW CASTLE, Del. (4/21/10)--A Chevrolet suburban crashed into the building that houses New Castle (Del.) County School Employees FCU, causing $20,000 worth of damage. Police said a 17-year-old boy was at the wheel of the vehicle when he lost control and hit a parked car and the front wall of the credit union’s office. The credit union was closed for business on the day of the accident. Repairs will take about two weeks (Together April 15). A police officer was stationed in front of the building on the day of the accident and a security will be on the property until reconstruction is finished. “All credit unions should ensure that their disaster plans are up to date, because you never know what might happen,” said CEO Terri Keene. “This was the last type of disaster that we expected.” The credit union did not have to activate its disaster plan but did notify CUNA Mutual, its data processor and the National Credit Union Administration. (Photo provided by the Delaware Credit Union League) ... * FARMERS BRANCH, Texas (4/21/10)--The Texas Credit Union League and the Michigan Credit Union League will offer a webinar Wednesday, “Saving Money by Going Green,” from 12 p.m. to 1:30 p.m. CT. During the event, Jan and Colleen Byrnes, co-founders of A World of Green, a green consulting company, will share how credit unions can get everyone on their institution involved in green efforts, reduce their organization’s impact on the environment, discover the rewards for making an effort, and identify ways to make a difference. Registration for the webinar is on the Texas league’s website ...

CUNAs Mica WOCCU delegation in Haiti

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MADISON, Wis. and WASHINGTON (4/21/10)--Credit Union National Association President/CEO Dan Mica is part of a delegation of credit unions and organizations, led by World Council of Credit Unions (WOCCU) President/CEO Pete Crear, that will arrive in Haiti today to meet with credit unions and members suffering from the effects of Haiti's Jan. 12 earthquake. The delegation representing WOCCU, CUNA, state credit union leagues, and major credit unions and associations met in Miami Tuesday for a briefing from WOCCU staff and Kathleen Felix, the Haitian Diaspora liaison to Miami from Fonkoze, a Haitian microfinance organization with offices in the U.S. Discussion topics included the economic impact of Haitian emigration, financial literacy work and the impact of Haiti's underdeveloped financial infrastructure. More than 400,000 people in Haiti are served by 220 member-owned credit unions. Several credit unions were destroyed in the 7.0-magnitude earthquake. “Our challenge will be to help the strongest credit unions get back on their feet to help Haitians help themselves and their communities rebuild their lives through small loans and a safe place to save,” Mica said. While in Haiti, the delegation will visit several caisses populaires (credit unions), all of which have operated from tents since the destruction of their buildings. The tents are donated by WOCCU. (See resource link: “WOCCU tents help Haiti office stay safe, productive.”) WOCCU Haiti program director Greta Greathouse, who led the delegation, has taken on additional work of leading the credit union disaster relief and rebuilding efforts. WOCCU has been working with Haiti's credit unions since July in a project funded by the U.S. Agency for International Development through the Academy for Educational Development. Mica and the rest of the delegation will visit damaged credit unions in Port-au-Prince and the earthquake epicenter at Leogane, to hear first-hand how the quake affected staff and members of the credit unions. (See resource link: “Haiti's CUs face grave issues on capital.”) Barry Jolette is the chairman of the WOCCU board. In addition to Mica and Crear, members of the delegation include:
* Sue Albrecht, senior vice president, international division, CUNA Mutual Group, Madison, Wis.; * Valerie Breunig, executive director, Worldwide Foundation for Credit Unions, Madison; * Bill Cheney, president/CEO, California and Nevada Credit Union Leagues, Rancho Cucamonga, Calif.; * Josh Fetting, WOCCU partnership program director, Madison; * Virginio Gerardo, executive director, Asociacion de Instituciones Rurales de Ahorro y Credito Inc., Santo Domingo, Dominican Republic; * Linda Hanson, vice president, strategic planning, Schools First FCU, Santa Ana, Calif.; * Bert Hash, president/CEO, Municipal Employees CU of Baltimore (Md.) Inc.; * Jose Joaquin Suriel, Asociacion de Instituciones Rurales de Ahorro y Credito Inc., Santa Domingo, Dominican Republic; * Fred Johnson, president/CEO, Credit Union Executives Society, Madison; * Barry Jolette, president/CEO, San Mateo CU, Redwood City, Calif.; * Alan Kaufman, CEO, Melrose CU, Briarwood, N.Y.; * Mike Muckian, WOCCU senior communications manager, Madison; * Cassie Rademaekers, WOCCU program specialist, Africa/Asia/Europe, Madison; * Brett Thompson, president/CEO, Wisconsin Credit Union League, Pewaukee, Wis.; * Ralph Wharton, CEO, Caribbean Confederation of Credit Unions, Basseterre, St. Kitts and Nevis; and * Marlene Shiels, WOCCU board member and CEO, Capital CU, Edinburgh, Scotland.
More than 1,000 donors have contributed to the WOCCU Haitian Relief Fund, including U.S. credit unions contributing through CUAid. coop. The fund received more than $1 million in donations from the movements. For more information on the WOCCU Supporters program or the Haiti Relief Fund, contact Valerie Breunig, executive director of Worldwide Foundation for Credit Unions, at or at 608-395-2055.