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J.D. Power Banks brand image dropping

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WESTLAKE VILLAGE, Calif. (4/26/10)--For the fourth straight year, customer loyalty and perceptions of brand image among retail banking customers continues to decline while satisfaction has leveled off, according to J.D. Power and Associates’ 2010 U.S. Retail Banking Satisfaction Study. Overall satisfaction of retail banking customers averages 748 on a 1,000-point scale--a decrease from 749 last year. The brand image of banks also has continued to decline, with customers perceiving banks as more profit-driven than customer-driven, compared with 2009, the study said. The percentage of customers who said they “definitely will not” switch banks during the next year also decreased to 34%, compared with 46% in 2007. Poor customer service--the most common reason given for switching banks--was cited by 37% of customers who changed their primary bank in 2010. Greeting customers as they enter the branch, offering additional assistance, and thanking them for their business may increase overall satisfaction by nearly 50 index points, yet less than 60% of customers reported experiencing those amenities. “As retail banking customers become considerably less loyal, banks need to focus on getting the fundamentals right,” said Michael Beird, director of banking at J.D. Power and Associates. “Banks that get back to the basics--such as maintaining a clean branch and greeting customers upon entering--may help to alleviate some of the distress customers are experiencing and increase their overall satisfaction.” About 29% of customers who switched banks in 2010 cited high fees for products or services as their reason for switching. Use of remote banking options is becoming increasingly common, with 51% of customers in 2010 indicating a preference for online banking, up from 45% in 2008. Also, 7% of customers reported using a mobile device for checking balances, transferring funds and paying bills. Surveys by Forrester, the Chicago Booth/Kellogg School Financial Trust Index (News Now Feb. 5), and the Rasmussen Index, have all showed credit unions to be more trustworthy than banks. Forrester Research’s annual Customer Advocacy rankings placed credit unions well ahead of banks after about 70% of credit union members surveyed told Forrester that their financial institution puts their interests first. Credit unions were ranked higher than banks because they have a different operating model--they are owned by their members--and they emphasize customer service, said Bill Doyle, Forrester vice president (News Now via The New York Times Feb. 5).

Texas CUs to send e-mail urging lifting of MBL cap

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FARMERS BRANCH, Texas (4/26/10)--The Texas Association of Business (TAB) Thursday asked leaders of Texas credit unions that offer member business loans (MBLs) to send an e-mail to their small business members, urging them to sign onto an open letter by promoting more small business lending. TAB, which is the Texas state Chamber of Commerce representing more than 140,000 businesses, held a press conference Thursday in Austin calling for doubling the cap on member business lending at credit unions to 25% of total assets. The letter asks U.S. Sens. Kay Bailey Hutchison (R-Texas) and John Cornyn (R-Texas) for their support of credit union member business lending and S. 2919, legislation that would raise the cap on MBLs (LoneStar Leaguer April 23). The congressional measure would free up $10 billion nationally for small business lending to credit union members, including $575 million in Texas, where more than 6,000 new jobs would be created as a result of its passage, said TAB President Bill Hammond. The proposal to double the member business lending cap would engender an additional 108,000 jobs or more nationwide, Hammond added. “Small business and free enterprise form the backbone of our nation,” Hammond said. “It’s time we tipped our hat to the men and women [who are] small-business owners across our state and nation, and gave them the access they need to capital to grow their business, hire more workers and put this country back on the right track.” TAB is contacting its members on the issue, driving potentially hundreds of small businesses to sign the open letter calling for change on MBLs, said the Texas Credit Union League (TCUL). TAB will later present the letter in person to Texas’ senators, with thousands of signatures from small businesses in support of raising the MBL cap. Credit unions are urged to forward the TAB website link containing the open letter to their MBL recipients, TCUL said.

CUNA tells IBankrateI who can join a CU

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MADISON, Wis. (4/26/10)--Consumers looking to join credit unions can do so through more avenues than most think, the Credit Union National Association (CUNA) told Bankrate.com Friday. The article, titled “Can you join a credit union?” mentions that while the majority of Americans obtain access to a credit union through their employers, there are other ways to become a member. “Out of the 8,000 credit unions, almost 25% are community-based,” Jim Hanson, CUNA vice president of personal finance, told Bankrate. “The vast majority of consumers, especially in large communities and cities, have an opportunity to join a credit union.” Churchgoers are eligible to join their church credit union, as are students and faculty of a college or university. At some credit unions, such as the University of Wisconsin’s credit union, you only need to have taken one class to become a member, Hanson said. “It’s not that hard to get into a credit union,” he added. Credit unions offer the full gamut of financial services from savings accounts to automobile loans, are attractive to consumers because they offer competitive rates on loans and have money to put to work, Bankrate said. “Credit unions have enjoyed a nice spurt in growth since the financial crisis and are flush with cash and want to make loans,” Hanson told Bankrate. To read the article, use the link.

CUs help members turn around financial woes

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MADISON, Wis. (4/26/10)--Credit unions are helping their members turn their financial situations around, by offering help through counseling or savings products. Sheila Jensen is one individual who was helped by a credit union--Affinity Plus FCU in Duluth, Minn. Jensen had troubled paying her bills when she accumulated credit card debt, and went to Affinity for help. The credit union helped her improve her finances through financial counseling (Duluth News-Tribune April 12). Jensen met with the credit union every week to work on her budget and bill payments. She paid her bills with automatic withdrawals and cashiers’ checks. She stopped using personal checks to resist spending, and the credit union helped Jensen deal with collection agencies and set up payment plans for back taxes. Jensen also was given a cash allowance each payday. With the credit union’s help, Jensen paid off her debt, and learned how to budget and manage her money. Her credit score has improved, and she’s feeling more in control of her financial situation, the newspaper said. Kristina Wright, vice president of communications for the Minnesota Credit Union Network, said credit unions are known for their member service. Some credit unions have financial counselors on staff, while others outsource counseling. Credit unions will try to work with their members, especially during the housing crisis and recession, she said. Duluth Teachers CU also offers financial counseling. Bryan Lent, assistant vice president of lending, told the newspaper his staff will provide income and debt comparisons to members as a tool to help them better manage their money.

Conn. CUs sponsor youth financial reality fair

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BRIDGEPORT, Conn. (4/26/10)--Local and state politicians joined high school students in the third Financial Reality Fair sponsored by Connecticut credit unions this spring. The fair is an exercise in financial reality that young people need to experience for successful transition from school and familial
Click to view larger image Bridgeport, Conn., Mayor William Finch, (left) with constituent students at a Financial Reality Fair’s “Wheel of Reality” when student spinners learn if they receive a windfall or an unexpected expense for their budgets. Students spin the wheel as part of working out a hypothetical monthly budget based on their career choice.
dependence to independent adult living on their own, said the Connecticut Credit Union Association (CTCUA). Nearly 300 students from seven high schools in the Bridgeport, Conn., area gathered at Housatonic Community College to move from booth to booth making decisions about adult life choices such as housing, transportation, clothing, food, and social amenities all on a projected monthly budget based on their career choice. Connecticut State Rep. Theresa Conroy (D-105th) and Bridgeport Mayor William Finch assisted students from constituent schools at the Wheel of Reality, a spinning assortment of windfalls and unexpected expenses that illustrate how life can reward or penalize-- often by chance. Dozens of volunteers from 19 credit unions and related businesses
Connecticut State Rep. Theresa Conroy (D-105), left, watches as Nick, Ansonia High School senior, spins the ‘Wheel of Reality’ at a Financial Reality Fair held at Housatonic Community College. Students spin the wheel as part of working out a hypothetical monthly budget to learn if they receive a windfall or an unexpected expense. (Photos provided by the Connecticut Credit Union Association)
managed the booths, offering advice and temptations along with the choices, after which students met with financial counselors to see how well they did or did not manage their budgets. “This is an outstanding opportunity for the students,” said Conroy. Mayor Finch added: “It’s a great start on their way to learning to manage their money wisely.” Connecticut credit unions are completing their second year of offering Financial Reality Fairs statewide as part of a commitment to foster financial literacy among youth. The Housatonic Community College Business Department partnered with Connecticut credit unions and donated the space for the fair.

WesCorp revises March 2010 financials

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SAN DIMAS, Calif. (4/26/10)--Western Corporate FCU (WesCorp) has revised its March 2010 financials. WesCorp realized a net loss of $36.3 million for March 2010, including additional other-than-temporary-impairment (OTTI) charges for the month of $49.4 million. Excluding the OTTI charge, income from normal operations for March was $13.2 million, consistent with operating results for the first two months of the year, according to WesCorp’s website. Actual realized losses on 40 securities incurred in March totaled $76.5 million, bringing actual realized losses to date to $270 million for 43 securities in the portfolio on a cumulative basis. The actual losses experienced in March have no additional impact on WesCorp’s financial statement since the actual losses have already been recognized in prior periods through OTTI. For more information, use the link.