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CU System Briefs (04/24/2013)

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  • FARMERS BRANCH, Texas (4/24/13)--Texas Partners FCU, Killeen, Texas, has opened an account, "West, TX Relief Fund," to accept monetary donations for  victims of last week's fertilizer plant explosion in West, said the Texas Credit Union League (LoneStar Leaguer April 23).  To enable long-distance giving as well as donations via debit or credit card, the $130.4 million asset credit union has joined with Projekt Karma, a locally created crowdfunding online platform. Texas Partners began accepting monetary donations last Thursday at this website. It also is selling World's Finest Chocolate, and collecting non-perishable food and household items to benefit the residents of West. The campaign will run through the end of the month ...
  • ST. PAUL, Minn. (4/24/13)--Roger McClure, a 36-year board member at Postal CU, Woodbury, Minn., was recently honored with the Minnesota Credit Union Foundation's Credit Union Builder Award. The distinction recognizes those who have dedicated time and energy to building the credit union movement. McClure, who was first elected to PCU's board in 1977, will retire his post on April 28.  He has served on a variety of board committees and as committee chair throughout his tenure with the credit union ...
  • SPRINGFIELD, Mo. (4/24/13)--BluCurrent CU President/CEO Steve Pierson has announced he will retire after 38 years' service, effective June 30.  Pierson is only the second president in the credit union's 84-year history.  The $143 million asset credit union's board also announced that BluCurrent Vice President Craig Tabor, will succeed as president/CEO on Pierson's retirement. Pierson joined the credit union in 1975, when it was called Postal Federal Employees CU. He became president/CEO in 1977. At the time, the credit union had one branch, $8 million assets and served roughly 3,500 members, mostly employees of the U.S. Postal Service. Today it has more than $148 million assets and six locations serving nearly 20,000 members. Tabor has more than 23 years of credit union experience. Before joining BluCurrent's management team in 2004, he was an area manager for Ent FCU, Colorado Springs, Colo., and vice president of operations for Qualtrust CU, San Angelo, Texas. He is active in the Springfield Chapter of Credit Unions and the Missouri Credit Union Association ...

NEW: Connecticut League's Emerson Named CEO Of IC FCU

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FITCHBURG, Mass. (FILED 12:38 p.m. ET 4/24/13)--IC FCU in Fitchburg, Mass., has tapped Anthony "Tony" Emerson, president/CEO of The Credit Union League of Connecticut, as its new CEO, to replace retiring CEO Tony Cali.

Emerson, president of the league since March of 2008, said he will remain with the league through June 14 and will start his new position at the $475 million asset credit union on June 17.

"After an extensive national search process and many strong potential candidates, the board feels Tony has the skills and leadership capabilities to take IC FCU to the next level of growth," said IC FCU Board Chairman Ken Stone.

Emerson served as vice president of finance/accounting/operations for Maine Savings FCU, Hampden, Maine, from 2003 to 2008.  He began his credit union career in 2001 at Penobscot County FCU, Old Town, Maine, after serving as an executive with a world-wide manufacturing firm and several years as a contracting officer in the Air Force. He has served on various boards, steering and league committees, and as chapter president for a two-year term.

He has earned degrees in contract law, logistics management and accounting, a master of business administration, and a doctorate in international business, and graduated with high honors from the Academy of Military Science.  He also has consulted the past five years on business strategy and strategic management.

"The board, staff and members are all loyal and dedicated to the success of the credit union," said Emerson. "I look forward to working with all of them well into the future to ensure the continued growth and prosperity of the credit union."

Washington Governor Signs Board Compensation Bill

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FEDERAL WAY, Wash. (4/24/13)--Washington Gov. Jay Inslee Monday signed Senate Bill 5302, which will allow credit unions to offer board compensation and other updates to the state Credit Union Act. The changes will take effect July 28.

Click to view larger image Washington Gov. Jay Inslee, seated, is flanked by representatives of credit unions and the Northwest Credit Union Association supporting Senate Bill 5302, updating the Washington Credit Union Act. Inslee signed the bill into law Monday. (Photo provided by the Northwest Credit Union Association)
The updates were identified by the Washington Model Act Subcommittee and are designed to advance the charter and operating environment for credit unions in the state, said the Northwest Credit Union Association, which worked on drafting the bill and backed the bill (Anthem April 23).

NWCUA's regulatory and compliance teams will disseminate information on any rulemaking by the Washington Department of Financial Institutions, said Mark Minickiello, vice president of legislative affairs.

"It's inspiring to see what we can accomplish when we commit to advocacy and build good relationships with our lawmakers," he said. "It's an ongoing process, but as the results from this past year demonstrate, when credit unions get involved in advocacy, great things can happen."

April 28 is the last day allowed for the 105-day regular legislative session. NWCUA pointed out there are three budgets--operating, capital, and transportation--to negotiate and pass before that deadline.

Inslee is the second state governor within a month to sign into law a measure allowing credit unions to compensate board members. Last month Tennessee Gov. Bill Haslam signed a law that  allows state-chartered credit unions to compensate board members or reimburse any lost wages from time spent serving their credit union (News Now March 29).

Key measures of the new law:

  • Creates more flexibility for credit unions investing in real property by allowing up to six years for use of unimproved property or three years for improved property;
  • Allows credit unions to invest in mutual funds made up of securities already otherwise permitted for credit union investment;
  • Clarifies that a credit union need not divest itself of an investment if permissible when made and the nature of the investment changes making it impermissible;
  • Removes the requirement that a credit union board meet monthly and allows for a minimum of six meetings per year, one at least quarterly;
  • Gives credit unions greater flexibility in the timing requirements of calling a special membership meeting, by extending the notice from no longer than 30 days, to no longer than 90 days;
  • Removes the prohibition on board and committee compensation and gives the state regulator authority to conduct rulemaking concerning reasonable director compensation; and
  • Changes the merger vote requirement to a simple majority vote from the current two-thirds majority requirement.

Missouri Corporate CEO DeGroodt To Retire In July

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ST. LOUIS (4/24/13)--Dennis DeGroodt will retire as president/CEO of $1.2 billion asset Missouri Corporate CU in St. Louis, effective July 31, the corporate announced Tuesday.

Kathleen "Kitty" Gray, Missouri Corporate's chief financial officer (CFO), will succeed DeGroodt.

DeGroodt has served as president/CEO of the corporate since 1997 and has been involved in the credit union system since 1978.  He was a director of Missouri State Employees CU, president of Wetterau Employees CU, vice president of operations of Missouri Corporate and vice president of U.S. Central FCU, before entering his present position. From 1994 to 1997 he ran his own consulting firm for credit unions, Dennis DeGroodt and Associates LLC.

He has also served on the boards of the Missouri Credit Union Association and the National Credit Union Foundation.

Gray has been CFO at Missouri Corporate since 1999, after a career in accounting with KPMG Peat Marwick and Rubin Brown in Clayton, Mo.

Missouri Corporate serves 157 credit unions in Missouri, Oklahoma, Illinois and North Dakota.

Oregon, Washington CUs Commit To Financial Ed

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BEAVERTON, Ore. (4/24/13)--While National Credit Union Youth Week celebrates youth and savings, it also is a time to recognize credit unions for their year-round activities in providing financial literacy assistance to America's youth. Providing financial literacy education is part of everyday business for many Oregon and Washington credit unions.

Oregon and Washington credit union educators are highly regarded resources for teachers and community organizations trying to fill the gaps between the state education requirements, and the needs of students, said the Northwest Credit Union Association.

For example, in Oregon, Corvallis-based OSU FCU shared financial education with nearly 14,000 students last year. Educators from SELCO Community CU in Eugene reached 7,000 students. Also in Eugene, Oregon Community CU contributed $114,000 in financial outreach grants and scholarships last year. Portland-based OnPoint Community CU contributed $2.3 million to local schools and nonprofits in 2012 and provided free financial counseling to students and adults.

In Washington, TwinStar CU, Lacey, educated 4,159 students through financial education outreach last year. Kitsap CU, Bremerton, taught more than 3,000 students. Spokane Teachers CU, Liberty Lake, also helped more than 3,000 teens, young adults and college students improve their money-management skills.

Spokane, Wash.-based Horizon CU won a national award for its "Piggy Bank Hunt," a financial literacy treasure hunt for middle school students last year. Its model has been adapted nationally.

At least five Oregon credit unions have branches located inside schools. They are:

  • Marion and Polk Schools CU, Salem;
  • Northwest Community, Eugene;
  • Rogue FCU, Medford;
  • SELCO Community CU, and;
  • St. Helens (Ore.) Community CU.
At least eight Washington credit unions have in-school branches at Washington high schools. They are:

  • Gesa CU, Richland;
  • iQ CU, Vancouver;
  • Kitsap CU;
  • Sno Falls CU, Snoqualmie;
  • Solarity CU, Yakima;
  • TwinStar CU; and
  • White River CU, Enumclaw.

North Dakota To Be Second State Requiring Electronic Lien Filing

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BISMARCK, N.D. (4/24/13)--House Bill 1136, a bill in the North Dakota Legislature that would  require credit unions and others to file liens and security interests electronically, should become law by the end of the week, says the Credit Union Association of the Dakotas.

That means North Dakota will be the second state to mandate electronic lien filing. Colorado is the first. South Dakota also is primarily electronic, but that is not mandated, said Jeff Olson, CUAD vice president of advocacy and awareness (The Memo April 23).

HB 1136, which was supported by CUAD in both its original form and with approved amendments, has passed the House and Senate.  "Now that it has passed the Senate, the Senate president will sign, then it is back to the House for the speaker to sign, then to the governor," Olson told News Now. It "should be signed into law late this week," he said.

"We were at the table in the development of the proposed recommendations that were included in the final bill," Olson wrote in a legislative update in The Memo. "Credit unions and other financial institutions will also be included in the final development of the Central Indexing System (CIS) software development."

The bill makes three changes. It:

  • Mandates the electronic filing of all lien documents into the CIS, which would allow for the unlimited listing of collateral.
  • Reinstates the SSN/FIN as a unique identifier for searching for debtor information. North Dakota is one of two states that use both numbers. However, national paper lien forms don't require these numbers, which meant national forms would be rejected in North Dakota. Electronic lien filing would eliminate the national paper forms and the problem with the numbers, which are useful especially in agricultural liens.
  • Creates an upfront filing fee for the initial lien document and eliminates the fee for searching and retrieval of the document. The upfront fee eliminates more than 35 fees and subscription charges. Under the bill, those services will be available at no extra cost.
The bill's passage will allow the Secretary of State to develop one software program to accommodate the electronic filing of all lien documents, rather than developing a system to accommodate both paper and electronic filings, required under current law.  The bill has no fiscal impact because the agency already appropriated for the new system, said CUAD.

The bill moved quickly. This week the joint House and Senate Judiciary Committee concurred on proposed amendments. The House adopted the Conference Committee report Monday by a voice vote on the floor, with concurrences from the Senate floor Tuesday morning, 42-3.

CUNA Mutual: Employee Benefits' Future 'Clear As Mud'

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ANAHEIM, Calif. (4/24/13)--Their presentation was titled, "Employee Benefits Evolution: The Future is Clear," but two presenters speaking Monday at the CUNA Human Resources and Training and Development Council Conference said "clear as mud" might be a better description in predicting the future of employee benefits in the U.S.

Mike Evert, employee benefits product manager with CUNA Mutual Group, and David Martin, managing principal, credit union services with Digital Benefit Advisors, agreed there is nothing clear about the future of employee benefits--and health care coverage in particular.

CUNA Mutual Group and DBA announced in February they were working together to provide compliance resources, expertise to help credit unions navigate the complexities of the Affordable Care Act, and deliver wellness services and enhanced employee education.

Per capita health care spending in 2010 was $8,402 per person, which translates into $2.6 trillion or 17.9% of the nation's total economic activity, or gross domestic product, according to the Center for Medicare and Medicaid Services. In 1960, that amount was just $147 per person, and 5.2% of GDP.

"The availability and cost of health care coverage will play a significant role in employees' decisions on where they choose to work," Martin said.

"How health care premiums get paid is evolving," he added. One trend is a shift toward a defined contribution approach in medical insurance. This transformation will be similar to a previous shift from defined benefits to defined contribution retirement plans. How healthcare coverage is purchased will transform dramatically in the coming years.

"Fewer of us will have access through our employers, causing us to seek coverage via a public or private exchange," Martin said. "Employers who continue to offer coverage will participate in or build an exchange themselves."

Consumer-driven health care plans (CDHPs) are also growing more popular, Martin added. A CDHP is a health insurance plan with lower premiums and features higher deductibles and co-insurance than traditional health plans. The plans incorporate tax-advantaged tools that benefit the consumer and leverage increased personal accountability when purchasing medical services.

"However, a CDHP can't solve the problem alone," Martin said. "Greater emphasis on medical cost transparency is imperative. We can't ask for personal accountability when health care providers aren't willing to share their fees. To sum it up, regardless of what efforts are taken, it will get ugly before it gets better."

CU's Mad City Money Hosts Scholarship Competition

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About 120 high school students participated in a Mad City Money scholarship competition hosted April 20 by Cardinal Community CU in Mentor, Ohio. The winner earned a $1,200 scholarship from the credit union. (Photo provided by Cardinal Community CU)
MENTOR, Ohio (4/24/13)--Cardinal Community CU in Mentor, Ohio, hosted a Mad City Money scholarship competition Saturday, and the winner earned a $1,200 scholarship from the $171 million asset credit union.

Mad City Money is the equivalent of a life-sized board game that allows young people to deal with real-world financial situations--in a setting that provides information on occupations, salaries, credit card debt, student loan debt and medical insurance payments ( April 19).

Similar to the board game Life, Mad City Money allows high school students to assume the role of an adult in the futuristic Mad City. Provided with jobs, families, income and debt, participants visit merchants and choose clothing, daycare, food, household necessities, housing and other needs and wants while creating and working within a budget. The game was created by the Credit Union National Association.

Roughly 120 students participated in the event.

In the course of the competition, students make mistakes and endure their consequences "in a realistic but safe environment," Christine Blake, Cardinal Community president/CEO, told mentorpatch.

The experience allows students to formulate a basic-budgeting understanding, Blake added, noting that nearly 350 students were taught those concepts last year through the Mad City Money program.

Four CUs Have New Monikers

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MADISON, Wis. (4/24/13)--Four credit unions--in Pennsylvania, Maryland, Oregon and Louisiana--are sporting new names, the result of rebranding efforts to attract a wider range of members.

Widget FCU, or Widget Financial, based in Erie, Pa. is Erie General Electric FCU's new name.. Originally created 77 years ago to serve employees at Erie's General Electric Transportation plant, the $260 million asset credit union now offers financial services to those living in Erie and Crawford counties.

On Jan. 13, the GE Corporate Office informed EGEFCU  it must stop using the GE mark and eliminate General Electric from its name. Several credit unions bearing the GE name received similar letters across the U.S.

"We actually began the process to change our name about two years ago, so receiving this letter from GE was no surprise and only reinforced our name change announcement in 2013," said Gail Cook, president/CEO of Widget Financial. The new name is a tribute to GE Transportation (widGET) and  the region, which produces widgets.  The name also is familiar in service industries including technology, manufacturing, education and health care.

Nymeo FCU, Fredrick, Md., is the new moniker for the former COMSTAR FCU. Nymeo is "a new way to look at money," says the $234 million asset credit union, which was founded in 1933 by a small group of Bureau of Standards employees as the Standards CU.  It changed its name in 1989 to COMSTAR to reflect growing membership in the Combined Science, Technology and Research areas and merged with Monocacy FCU in 2002.  "As we move forward, we believe our new identity as Nymeo will allows us to change the way we do business and ensure  not only that we'll be here in the next 80 years--but that we will be a strong and viable institution," said its site.

Northwest Resources FCU, Portland, Ore., will change its name to Trailhead CU, with the tag line "Small Enough to Know Better,"  effective June 3. As one of nine credit unions in Oregon with "Northwest" in its name, the $92 million asset Trailhead wanted to better distinguish itself in the marketplace. "We pride ourselves in opening new paths and financial opportunities for our members," said Northwest Resources President/CEO Jim McCarthy. "Both the new name and brand reflect this philosophy as well as the Northwest region and Portland's treasured urban and natural trails."

Shell New Orleans FCU, in New Orleans, is now Xplore FCU. The $112.2 million asset credit union hopes the new name will attract a wider base of members. It has had a community charter since 2007, but many still believe the credit union serves only Shell employees. The new brand is a nod to its roots serving workers in the oil and gas exploration and production industry while better positioning it to grow and diversify, it said  (New Orleans CityBusiness April 9).

Texas CUs On College Costs: Be Prepared, Do Research

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FARMERS BRANCH, Texas (4/24/13)--College costs are expensive, so parents and students need to be prepared and do research. Credits unions should be ready for members' questions on the matter and help guide them, according to a Texas Credit Union League Blog Talk Radio broadcast Tuesday.

The show, "Your Money, Your Matters," featured Linda Birt, relationship coordinator with People's Trust FCU in Houston. The show was hosted by radio personalities Linda Webb-Manon and Rick Grady of the Texas Credit Union League, and Todd Mark, Consumer Credit Counseling Services. They discussed the importance of planning and budgeting for college and taking advantage of available grant and scholarship dollars.

"College is expensive," Mark said. "Even at a state college, the costs are $15,000 to $20,000 per year."  The show's panelists talked about statistics indicating that between 2008 and 2010, college tuition nationally increased 15%--fueled by budget cuts.

Limited budgets often impact college choices at the last minute, the panelists said. "It happens all the time--parents don't know about costs," Birt said. "It's never too early to learn about college costs. There are so many college scholarships available. Start [researching them] early. Get the child involved as early as possible; it is then more meaningful to them."

A key point is to understand the difference between federal government loans and private student loans, Birt added. Private loans have variable interest rates. Those interest rates are not tax deductible, the loans cannot be consolidated or deferred, and students sometimes have to make payments on the loans while still in school, she explained. "There are so many types of grants and scholarships out there, private loans should be a last choice," Birt said.

"Resources are out there, you need to network and find them," she added, noting that credit unions and employers are a great source for scholarships."   

If students choose to study specific fields, organizations in those fields will provide scholarships for certain costs, Mark said. To find scholarship money use the Internet and ask your librarian. "They have catalogues of this material," he explained. "Also ask high school guidance counselors."

When asking for money, meeting deadlines is crucial, Birt said. It also is important for parents and students to understand the obligations of repayment and to keep up with loan payments, she added.

The Credit Union National Association is lobbying the federal government to allow student loans of a longer duration than the current 15-year standard because most borrowers are taking out more loans for larger amounts (News Now April 17).

Earlier this month, CUNA released the result of its first annual High School Student Borrowing Survey. It found that nearly half of high school seniors don't know how much they will need for college costs. (See also News Now story "CU Advantage Noted in Fox, Huffpo Coverage").

Eighty-three percent did not know the interest rates for student loans, and 77% didn't know the duration of their existing or anticipated college loans, CUNA added.