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WOCCU CUs should not be penalized

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AMSTERDAM, The Netherlands (4/24/09)--Credit unions should not be penalized by tougher capital requirements than those faced by larger, riskier institutions that present systemic risk to the global financial system, Pete Crear, president/CEO of the World Council of Credit Unions (WOCCU), told the Basel Committee on Banking Supervision. Crear and Dave Grace, WOCCU vice president of association services, met with Basel Chairman Nout Wellink April 15. The visit followed three letters WOCCU sent to the Basel Committee regarding proposed rules on stress-testing procedures and capital level requirements. The committee believes that increased capital reserves are necessary to foster greater global resilience to future episodes of economic and financial stress, and has made a series of recommendations for increasing reserves by 2010, WOCCU said. “We didn't want credit unions and financial cooperatives to pay an unfair price as part of the solution to a crisis they had no hand in making,” Crear said. “Chairman Wellink was very receptive to our comments and assured us that he would bring our concerns forth to his fellow committee members.” In some cases, the proposed standards for credit unions exceed levels required for large, complex banks, which prompted WOCCU to call for a “rebalancing” of inconsistencies. WOCCU addressed these issues in a fourth letter it sent to the committee after last week's visit. Cooperative financial institutions play a vital role, not only in serving the financial needs of 857 million consumers worldwide, but by spreading economic risk over a greater number of institutions, WOCCU said. By contrast, existing industry risk-modeling standards have failed to keep large banks from hemorrhaging losses that have fed the global economic downturn. Smaller institutions, especially member-owned financial cooperatives, hold smaller concentrations of funds, strengthening the global financial network by reducing the risk each institution poses, WOCCU added. “We want to ensure at the implementation of these rules that financial supervisors recognize that credit unions are different from banks,” Grace said. Under Basel II guidelines, larger financial institutions may hold comparatively less capital than smaller institutions. However, the current crisis has shown that many larger institutions are riskier and prone to greater systemic problems. Failure to rebalance capital requirements within Basel II to appropriate levels will potentially weaken smaller institutions. Fair capital requirements for institutions of all sizes not only aid financial cooperatives' operating capabilities, but they strengthen the soundness and stability of the international banking system, WOCCU added. “Chairman Wellink told us the pendulum was swinging toward more stringent regulation and expressed concern that it may swing too far,” Crear said. “We've offered WOCCU as an information resource on financial cooperatives to the committee in hopes of keeping credit unions from being unfairly penalized for the current situation.” To read the letters, use the link.

CU Museum holds financial literacy fair

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MANCHESTER, N.H. (4/24/09)--Students learning about personal finances applied their in-class studies to a real world setting at the CU 4 Reality Financial Literacy Fair held at America’s Credit Union Museum in Manchester, N.H. This is the fifth year students from Rundlett Middle School in Concord, N.H., participated in the CU 4 Reality Program, but the first year students learned the effects of a job loss on their spending plans (BusinessWire April 22). The CU 4 Reality Financial Literacy Program is a financial literacy curriculum that is taught to Rundlett students in partnership with New Hampshire FCU, Concord, N.H., and America’s Credit Union Museum. After completing in-school studies, more than 375 eighth-graders met on April 16-17, and 17 eight-graders gathered at the museum to test their classroom lessons. The CU 4 Reality curriculum creates an interactive learning environment in which students can practice specific financial management skills and learn early on the consequences of getting in over their head when it comes to financial matters, said Polly Saltmarsh, New Hampshire FCU marketing manager. At the fair, students receive a folder that details their personal career information, including starting annual salary. Then, students progress through the fair interacting with salespeople, volunteers, and vendors as they acquire bills for housing, transportation, food, clothing, insurance, entertainment and more. Students also must spin the “Wheel of Reality,” which could provide a financial windfall, such as additional income from refereeing or babysitting, or it could prove a financial disaster. In keeping with the economic hard times this year, students could spin the wheel and lose their jobs. Students had to face the consequences and meet with credit counselors to collect unemployment, and figure out how to make ends meet.

Survey CU members trust CUs more than banks

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SAN DIEGO (4/24/09)--A majority of credit union members--88%--said they trust credit unions more than banks, according to CUTS Performance Marketing, a performance marketing network for credit unions, which released the results Wednesday of a survey conducted in partnership with Kelton Research. Even for members who use their banks more often, nearly 7 out of 10 (69%) still find credit unions more trustworthy than banks. Also, 61% of members said they enjoy being a member because they believe credit unions will keep their money safe, while 43% find that credit unions adhere to higher standards than other financial institutions (MarketWire April 22). “It comes as little surprise that most credit union members trust their credit unions more than any other financial institution,” said Jeff Plumer, president of CUTS Performance Marketing. “With issues like insolvency and corruption among today's financial headlines, it’s no wonder members highly value the benefits and standards of their credit unions.” The survey also indicated that nearly 3 out of 4 members (72%) say belonging to a credit union has more advantages than being a bank customer. In fact, more than one-third (35%) said their preference of a credit union over a bank is one of the chief reasons for joining. Of the top credit union advantages, 62% said the best one is knowing their money is safe, followed by access to special discount offers on non-traditional products that fall outside of typical banking offerings (55%) and convenient branch locations (51%). Even though access to special discounts on non-traditional products ranked high and nearly all members (95%) said they trust special discount offers from their credit union, nearly 4 in 5 (79%) still purchase them somewhere other than their credit union. Only a small percentage of products are purchased directly through the credit union's branch or website, including auto insurance (4%), tax preparation software (3%), event tickets (3%) and personal finance management software (2%). Still, there is evidence that the availability of discount offers would increase credit union use, the survey indicated. Almost four in ten (37%) members would use their credit union more than they currently do and a majority of members (85%) expressed a desire to see more special discounts from brand-name companies offered by their credit union. “These survey findings reinforce the immediate opportunity credit unions have to build on the strength of their members’ unique trust and loyalty,” said Van Barker, CUTS senior vice president. “By offering savings on non-traditional products and services, credit unions can broaden the benefits of membership while further differentiating themselves from other types of financial institutions.”

CU System briefs (04/23/2009)

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* DUBUQUE, Iowa (4/24/09)--DuTrac Community CU has been recognized by Iowa Gov. Chet Culver as a leading lender for its participation in the Iowa Finance Authority’s FirstHome Program in 2008. DuTrac’s commitment to homeownership programs is vital to state growth, Culver said. “DuTrac Community CU’s First Time Home Buyers program strives to offer federal and state programs combined with the most attractive rates to help Iowans achieve their dreams of homeownership,” said Andy Hawkinson, DuTrac president/CEO ... * ST. PAUL, Minn. (4/24/09)--The Minnesota Credit Union Network (MnCUN) announced the Outstanding Credit Union Professional of the Year and the Outstanding Credit Union Volunteer of the Year April 18. The Volunteer award was given to Paul Jacobsen, TopLine FCU, Maple Grove. Jacobsen has volunteered at TopLine for 14 years, serving as board vice chair, chair of the executive committee and member of the supervisory committee. Bill Raker, US FCU, Burnsville, received the Professional Award. He is on the MnCUN board of directors and has served on boards and committees, including the Credit Union National Association (CUNA) Governmental Affairs Committee, CUNA’s Due Diligence Task Force and the Credit Union Service Centers Executive Committee. He also is active in the World Council of Credit Unions ... * RALEIGH, N.C. (4/24/09)--State Employees’ CU (SECU) demonstrated its support in making North Carolinians more environmentally aware by participating in the second annual Planet Earth Celebration in Raleigh, N.C. During the event, SECU highlighted its green products--such as the Green Mortgage, Green Vehicle Loan, and its online e-statements and bill pay. “SECU feels strongly about supporting the advancement of green initiatives to improve the environment and quality of life in North Carolina and globally,” said Bobby Hall, SECU senior executive vice president. He added that SECU hopes to work with NC Electric Membership Cooperative to promote solar hot water systems. (Photo provided by State Employees' CU) ... * HERNDON, Va. (4/24/09)--Northwest FCU Foundation (NWFCU) will host a “Night of Magic” ball for patients at Children’s National Medical Center, a Children’s Miracle Network hospital. The ball coincides with prom season and aims to provide patients who may miss their prom a chance to dress up and attend a dance. The foundation is collecting party attire for children of all ages from toddler to 21. NWFCU will collect donations through the end of May. Children’s National Medical Center is located in Washington, D.C. ...

Texas Senate passes revision to state CU Act

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AUSTIN, Texas (4/24/09)--The Texas Senate sent to the Texas House revisions sought by the Texas Credit Union Department (TCUD) and credit unions to the state Credit Union Act on Wednesday by a 30-0 vote. The House Pensions, Investments, and Financial Services Committee also heard the House companion bill--House Bill 3200 by State Rep. Dan Flynn (R-2) Wednesday. The Texas Credit Union League (TCUL) thanked the Senate bill sponsor--State Sen. Kip Averitt (R-22)--for his leadership in getting the bill through the Senate Business and Commerce committee and the Senate chamber (LoneStar Leaguer April 23). Every few years, the TCUD is charged with reviewing the act and rules to keep them modernized. The last major revisions to the state Credit Union Act occurred in the 2003 session. The bill has a number of sections dealing with TCUD powers, credit union powers, and board governance issues. Current law provides for both regulatory oversight and corporate governance of credit unions. The bill amends the finance code to provide for additional regulatory oversight of credit union activities and addresses provisions concerning corporate governance. It also adds provisions to the finance code for regulatory coordination between state and federal agencies. The bill provides the credit union commissioner additional regulatory and supervisory oversight of credit union activities and amends various provisions relating to the administration and operation of credit unions.

Alabama CU league honors presidentCEO

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BIRMINGHAM, Ala. (4/24/09)--The Alabama Credit Union League honored league President/CEO Gary Wolter during the league’s annual meeting in Destin, Fla. Wolter, who will retire in July, was recognized for his 47 years of service to the credit union industry with a league Distinguished Service Award. The Gary B. Wolter Lifetime Achievement Education scholarship also was established. “Alabama’s credit unions, indeed credit unions across the world, would not be where they are today without Gary’s vision and contributions,” said League of Southeastern Credit Unions Chair-elect Joe McGee. The Alabama league and Florida league recently combined to form the league. The Distinguished Service Award is the Alabama league’s highest honor and has been given to three other recipients. The scholarship will allow credit unions to attend educational seminars, conferences and workshops.

League of Southeastern CUs holds first meeting

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BIRMINGHAM, Ala. and TALLAHASSEE, Fla. (4/24/09)--The board of directors of the newly formed League of Southeastern Credit Unions (LSCU) assembled April 13 for its first face-to-face meeting. Brought together in time for the Alabama Credit Union League’s 76th Annual Membership Meeting & Education Symposium in Destin, Fla., the meeting allowed the new board to spend time together and move the consolidation process forward. The League of Southeastern Credit Unions, formed from the consolidation of Alabama and Florida member credit unions, represents 332 credit unions with combined total assets of $55 billion. As the LSCU, the coming together of these two entities will create an even stronger, more strategically situated organization, LSCU said. Chairman-elect Joe McGee presided over the meeting for Board Chairman Rich Helber. Helber was unable to attend due to a schedule conflict. “This meeting was a historic step in the transition process of our new entity,” said McGee. “This time together enabled the LSCU board to get to know one another better and determine how we will work best to further the success of our credit unions in both states. In the next few months, we will be spending quite a bit of time together, particularly as we continue through the transition process.” With both Alabama President/CEO Gary B. Wolter and Florida Credit Union League President/CEO Guy M. Hood retiring at the end of July, the meeting also provided the opportunity for both leaders to address the new board and staff members.

St. Marys Bank hosts 100th shareholder meeting

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MANCHESTER, N.H. (4/24/09)--St. Mary’s Bank, the nation’s first credit union, conducted its 100th annual shareholder meeting April 14 with more than 260 members, employees, board members and elected officials attending. Elected officials included New Hampshire Gov. John Lynch, State Rep. Carol Shea-Porter (R-23), Manchester Mayor Frank Guinta, and other state representatives from Manchester, Hudson and Nashua. Both Lynch and Porter commended St. Mary’s long-time commitment to New Hampshire residents. “St. Mary’s--in my mind, is so much more than a financial institution,” Lynch said. “It’s a really good neighbor. It’s out there trying to make a difference in the lives of people it serves.” During the meeting, St. Mary’s officials listed the credit union’s accomplishments during the past year. The credit union’s core operations are doing well--especially in lending. St. Mary’s has experienced strong commercial, consumer and mortgage activity in the first quarter of 2009, according to St. Mary’s President/CEO Ronald Covey. “We are ahead of our 2009 business plan for both deposits and loans, and we are ahead of where we were last year at this time,” he said. During the past year, St. Mary’s provided:
* $186 million to members through new loans; * $460 million in total loans; and * $470,000 in savings by not charging ATM fees.
The credit union also had $520 million in member deposits in 2008, the credit union said. During the meeting, St. Mary’s elected Joseph G. Fremeau; Suzanne Vachon; and Ronald Rioux, former president/CEO of St. Mary’s, to three-year terms on the board. Guy Chapdelaine was elected to a two-year term. St. Mary’s Bank, based in Manchester, N.H., has $652 million in assets.

Conn. league highlights CU accomplishments

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MERIDEN, Conn. (4/24/09)--The Connecticut Credit Union League (CCUL) improved its income position, increased legislative visibility and increased participation in league events over the past year, according to CCUL President/CEO Anthony Emerson.
Connecticut Credit Union League President Anthony Emerson listed the league’s accomplishments this past year--including increased income and legislative visibility--during the league’s annual meeting April 17-18. (Photo provided by the Connecticut Credit Union League)
Emerson provided a rundown of the league’s accomplishments during his speech at the annual meeting April 17-18 in Ledyard, Conn. The league’s meeting was held in conjunction with the annual meeting of Constitution Corporate FCU, Wallingford. Emerson said the league:
* Established a strategic partnership program, reorganizing league internal operations and responsibilities, and acquiring reaffiliations; * Developed a Small Credit Union Support program, which includes creating a Small CU Task Force with representatives from every chapter to oversee policies and procedures and establish and monitor fundraising efforts; * Added products and services--such as the CT Compliance Solutions program with a full-time regulatory compliance Answer Person and compliance updates--vendor management policy and a software program free to affiliated credit unions; * Established marketing, finance, and compliance member councils; * Increased league staff contact with affiliated credit unions; * Developed an innovative dues-discount program for multiple-year affiliation with options to underwrite support for the small credit union program; * Responded to inquiries from and assisted out-of-state leagues and organizations requesting information on league programs that are successful with Connecticut member credit unions; and * Created subject-dedicated publications and developed sources for communicating breaking news and events--such as fraud, robbery, and legislative alerts.
The meeting offered educational sessions and 43 vendors exhibited products and service. The official business meeting--where Emerson spoke--broke attendance records, the league said.