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Indirect lending growth addressed during CUAC session

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COLORADO SPRINGS, Colo. (4/28/08)--Indirect lending is a key source of credit union membership growth, but it is difficult to deepen relationships with indirect borrowers, attendees at the Credit Union Association of Colorado (CUAC)'s 74th Annual Meeting were told last week. Relationships with indirect borrowers are fragile and their profitability is questionable, said Heather Thiltgen, vice president, consumer segment programs at CUNA Mutual Group. Thiltgen stressed the importance of deepening relationships with indirect borrowers in a session on "Building Members from Indirect Borrowers, Lessons Learned." She profiled two credit unions that are successful in attracting members via indirect lending: Altra FCU in LaCrosse, Wis., and BCU in Vernon Hills, Ill. Atlra focuses on the dealer and underscores its dealer relationship to drive the business, she said. This method generated 90% of business from local dealers. Alta also sells its finance managers on the membership, and the dealer account representative is an indirect buyer. Thiltgen noted Altra works with dealers and does not deny loans based on score alone. It also practices cross-selling strategies. Dealer account reps review credit reports, cross-selling through the finance manager. The credit union follows up with a welcome letter two weeks later, then a newsletter within the month, she said. As a result, indirect borrowers took out 49% additional products from Altra, or 1.72 services per member--excluding the basic share account or indirect loan. At BCU, the focus was on outbound sales and attention to personal contact. BCU uses the consultative sales approach by emphasizing benefits, asking open-ended questions, and being sensitive to time and circumstances, Thiltgen said. The credit union has aggressive incentives and tracks results, which were an 82% contact rate for January. Also, 40% of members contacted accepted additional products and services. The average amount of loan or credit card balances per attempt was $1,761, she said. CUNA Mutual Group's Indirect Borrowers Pilot was designed using best practices to help credit unions deep relationships with new indirect borrowers, increase credit union loan balances and non-interest income, and make ongoing marketing efforts more effective, she said. The pilot indicates that members are receptive to outbound calls and the welcome/service approach has relationship-building benefits. Thiltgen advised that a credit union should:
* Dedicate resources to making its program successful; * Verify compliance with regulations surrounding use of credit data; * Obtain technology/systems support needed; * Track the results; * Keep in mind that auto loans are seasonal and consider other outbound opportunities such as new member onboarding programs; and * Price for relationship.
More than 500 credit union people, representing 62 credit unions, attended CUAC's convention, which was held in Colorado Springs Thursday and Friday.

Carolina CU Services elects new board members

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GREENSBORO, N.C. (4/28/08)--Two new board members were elected to serve on the Carolina Credit Union Services (CCUS) board of directors. Joy Watts, president/CEO, Carolina Postal CU, Charlotte, and Judy Tharp, president/CEO, Piedmont Aviation CU, Winston-Salem, will serve three-year terms. CCUS oversees the network of shared branching locations in North Carolina. Watts was re-elected to a second three-year term on the board. She has been CEO of Carolina Postal CU since 1997. Watts served on several committees of the North Carolina Credit Union League and the credit committee for the First Carolina Corporate CU. Tharp worked in senior leadership positions for Founders CU and South Carolina CU. She also served as an officer of CUNA Mutual Group, overseeing lending strategy and solution development. Tharp has been active in a variety of credit union leadership organizations.

Wisconsin CUs receive governors fin lit award

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MADISON, Wis. (4/28/08)--Wisconsin credit unions were presented recently with the Governor's Financial Literacy Award, the second time the state's credit unions have collectively received the award. According to the Wisconsin Credit Union League, this year's award was for providing the state's 603 high schools with financial education resources for teachers and students. Credit unions also received the award in 2006 for their REAL Solutions initiative (The League April 25). During the awards presentation by First Lady Jessica Doyle, credit unions also received a proclamation signed by Gov. Jim Doyle commemorating National Credit Union Youth Week, which was last week. Representatives from Alta FCU of LaCrosse, Community First CU of Appleton and CoVantage CU of Antigo were honored as the state's top Desjardins Youth Financial Education Award winners.

Oregon CUs people helping paws program benefits community

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BEAVERTON, Ore. (4/28/08)--Oregon credit unions presented a $1,000 donation April 3 to Lane County Animal Services as a part of their “people helping paws” program.
Click to view larger image Kylie Belachaikovsky (holding check), volunteer and outreach coordinator for Lane County Animal Services, accepted a check from Oregon credit unions. The donation was the result of a statewide contest held with Oregon’s You Belong credit union awareness campaign. (Photo provided by the Credit Union Association of Oregon)
The donation came from a statewide contest held in conjunction with Oregon’s You Belong credit union awareness campaign. For the contest, consumers were asked, “How would you improve your community with $1,000?” The response rate was overwhemingly in favor of animal shelter services in Lane County. Northwest Community CU and SELCO Community CU, both of Eugene, donated an additional $1,000 each to bring the total to $3,000. During the check presentation, Kylie Belachaikovsky, volunteer and outreach coordinator for the animal shelter, noted that people who rely on the shelter systems often have lower or no incomes “We have formed strong partnerships with several Lane County non profit agencies whose focus is low- or no-income pet owners and services, not only for their pets, but also for abandoned and homeless animals,” said Jan Burch, director of community involvement, SELCO Community CU. “SELCO understands the need for support from local area businesses and is proud to make a difference.” Check presentation attendees included contest entrants and Lane County residents Rita Castillo and Lori Smith, who were in favor of supporting the shelter; and staffers from the Credit Union Association of Oregon; SELCO Community CU; Northwest Community CU; Oregon Community CU, Eugene; Oregonians FCU, Portland; and O.U.R. FCU, Shelton.

CUs offer a variety of environmental efforts

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MADISON, Wis. (4/28/08)--Credit unions have a lot to offer members and their communities through their efforts to help the environment, and they are finding a variety of ways to go green.
First graders from Klondike Elementary School water a tree they helped plant on Arbor Day in an event sponsored by Purdue Employees FCU and West Lafayette, Ind., Parks Department. (Photo provided by Purdue Employees FCU)
In West Lafayette, Ind., Purdue Employees FCU (PEFCU) partnered with the West Lafayette Parks Department and a first grade class from Klondike Elementary School to plant trees donated by the credit union in Celery Bog. The trees were planted Friday, which was Arbor Day in the community. Students received a gift bag from the credit union that contained a Colorado Blue Spruce seeding to plant at home. The $475 million asset credit union also celebrated the fact that its members saved 22 trees per month in 2007 by choosing to receive eStatements rather than traditional paper statements in the mail. In Washougal, Wash., Columbia CU made donations totaling $3,000 to two parks on April 22 to celebrate the opening of the Vancouver-based credit union's green Washougal branch.
From left: Columbia CU President/CEO Parker Cann presents the credit union's donation for Washougal, Wash., parks to Cheri Martin, Vancouver-Clark Parks Foundation; Janice Ferguson and Suzanne Bachelder, Washougal Parks Foundation board members; and Henry Gerhard, Vancouver-Clark Parks Foundation. (Photo provided by Columbia CU)
President/CEO Parker Cann presented the checks to Steigerwald Lake National Wildlife Refuge and Washougal Parks to aid in the funding of education programs for Steigerwald and to help finance improvements at Hathaway Park. The new branch, built to LEED standards, uses natural resources. It harvests rain for plumbing and irrigation, and its natural ventilation will cool the branch during warmer months. A skylight and high-efficiency HVAC system reduce electricity needs. The branch also features local Camas stone and lumber certified by the Forest Stewardship Council for environmentally responsible harvesting methods. Seventy-five percent of construction waste from building the branch was diverted from landfills through using sustainable products and tracking materials and waste. In Raleigh, N.C., State Employees' CU (SECU) participated in the state's first annual Planet Earth Celebration April 19. SECU's partnerships with NC GreenPower and Advanced Energy prompted the invitation to the event. SECU staff and youth mascot Fat Cat provided information on the
State Employees' CU's youth mascot, Fat Cat, and volunteers employed an interactive Wheel of Knowledge--instead of tree-eating brochures and handouts--to provide information on environmental topics at a recent Planet Earth Celebration in Raleigh, N.C. (Photo provided by State Employees' CU)
credit union's green products, including mortgages, auto loans and e-statements. The credit union refrained from distributing paper brochures or handouts, but chose the interactive educational format using Fat Cat's "Wheel of Knowledge," which quizzed young visitors on topics such as recycling, energy conservation and environmental awareness. The credit union's members support 1.3 million kilowatt hours of renewable energy generated annually, resulting in an environmental impact equal to planting more than 200,000 trees. Staff also pointed out SECU Foundation's teacher housing initiative at Herford Pointe, which has Energy Star rating and green design. "Our ultimate goals are to not only help members keep money in their pockets, but also sustain North Carolina's natural resources, " said Leigh Brady, senior vice president of SECU's education services department. She added the Planet Earth Day event fits nicely with the 'Do the Right Thing' mentality of SECU's staff.

Vote for ICU MagazineI 2008 Hero of the Year

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MADISON, Wis. (4/28/08)--Credit Union Magazine is celebrating the credit union movement’s heroes by having the movement help select the 2008 Hero of the Year. Credit union leaders have nominated four CU heroes:
* Lynda Hamilton, CEO, Houston (Texas) Teamsters FCU. She has worked 41 years saving, serving and supporting small credit unions; * Bill Myers, retired CEO, Alternatives FCU, N.Y. He retires this month after 28 years as sole CEO of the $51 million asset credit union; * Larry Stapleton, president/CEO, United Southeast FCU, Bristol, Tenn. His credit union was one of the pilots for CUNA Mutual Group's Lending Plan in the early 1970s; and * Mendell Thompson, president/CEO, America’s Christian CU, Glendora, Calif. He has served as president/CEO of the $220 million asset credit union since 1986.
To read about the nominees and vote, use the link. Voting ends May 15. The winner will be posted on the Credit Union Magazine website by June 2. CU Heroes will be honored at the Credit Union National Association’s 2008 America’s Credit Union Conference & Expo, June 29-July 2 in New York City.

New fin-lit resources on

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WASHINGTON (4/28/08)—Does financial literacy education really work? What’s on the minds and in the wallets of Generations X and Y? What advice do you have for the President’s council of financial literacy mavens? These are some of the reasons to visit, CUNA’s financial literacy resource center. “The Financial Literacy Task Force under CUNA board member and former Chair Juri Valdov recommended that CUNA develop a clearinghouse for anyone in the credit union movement who was looking for statistics, methods, and materials to improve the ability of members and potential members to manage their money wisely using credit union services,” explained Mark Condon , senior vice president of CUNA’s Research & Advisory Services. “We hope that financial literacy advocates throughout the credit union movement will use as a jumping-off point for their efforts to help people of all ages and economic means make better use of their income and build wealth,” Condon added. Among the most recent additions to
* “Evidence and ideology in assessing the effectiveness of financial literacy education. (Research analysis from Lauren E. Willis, University of Pennsylvania Law School.) * “A look at the financial state of Gen X and Gen Y.” (A new study from the American Savings Education Council and AARP.) * “2008 parents and money survey.” (The views, behavior, and knowledge of spending, saving, borrowing, and earning money of American teenagers between the ages of 13-18, as seen through the eyes of their parents, from the Charles Schwab Corp.) * “Here’s your chance to tell the government what to do.” (An online soapbox for comments for the President’s Advisory Council on Financial Literacy—requires free registration/login. * Federal Deposit Insurance Corp. (FDIC) statement on financial literacy and education.” (Congressional testimony from the FDIC’s Robert W. Mooney.)

Report CUs keeping key presence in auto loan market

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RANCHO CUCAMONGA, Calif. (4/28/08)--Credit unions’ performance in the auto lending marketplace mirrored the performance of banks and other financial institutions in 2007, according to CU Direct Corp. (CUDL).
Click to view larger image
The annual report, which highlights key credit union auto lending trends and statistics during the course of the previous year, indicated that credit unions maintained a significant market presence in 2007. Of all auto loans originated last year, 16.9% were through credit unions--down slightly from 18.0% in 2006, according to the report. Likewise, banks’ market share declined to 32.6% in 2007 from 34.2% in 2006. CUDL, which administers the nation’s largest indirect and point-of-sale lending network for credit unions, has developed the Auto Lending Business Intelligence Report as a resource for credit union organizations to better understand credit unions’ role in the auto lending market, benchmark their performance and learn best practices. The network includes more than 500 credit unions and 9,000 automotive dealers nationwide. A key to credit unions’ success in 2007 was their ability to offer competitive financing to their members when compared with other lending institutions, the report said. Credit unions continued to offer low rates and flexible loan terms to grow loan volume, while other financial institutions turned to nonprime and subprime lending to boost their loan volumes. For instance, subprime loans made up nearly half of all the loans that finance companies originated in 2007. “Auto lending continues to be the one area in which credit unions hold a significant market share,” said CUDL Market Research Analyst Joe James. “In fact, there are five states in which an individual credit union is the top lender in the entire state.” The report also indicated that credit unions continue to effectively manage risk of their auto lending portfolios.

CU System briefs (04/25/2008)

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* HARRISBURG, Pa. (4/28/08)--Two employees at York, Pa.-based First Capital FCU were credited for helping arrest a woman wanted for filling up her gas tank at a gas station, then leaving without paying, according to the Pennsylvania Credit Union Association (Life is a Highway April 25). The employees, Gidget Smith and Tracey Hufnagle, saw a woman pull up her car into the credit union's parking lot and remove her license plate. The woman then drove to a nearby gas station to pump gas. Smith and Hufnagle called the store to warn of a possible drive-off. A gas station employee went outside and talked to the woman. She pulled up her car, as if to pay, and when the employee went inside, she took off. The employee followed her and got her license plate number when she stopped to put the plate back on, then called police. The woman was arrested … * DENVER (4/28/08)--Mortgage representatives from Westerra CU spent a day visiting with more than 3,500 realtors at the 2008 Realtor Rally in Denver. Attendees were drawn to the Westerra booth by an opportunity to have their picture taken sitting on a Harley Davidson motorcycle wearing biking gear provided by the credit union. "It gave our staff an opportunity to share information about the many programs we have available to assist their clients in obtaining a mortgage for their new home," said John McCloy, Westerra's chief lending officer. Pictured here is Westerra Chairman Kathy Betts, trying out the cycle. (Photo provided by Westerra CU) … * RIVERSIDE, Calif. (4/28/08)--Altura CU's marketing efforts earned 17 awards for its print ads, e-newsletters, billboards, radio and TV spots and more. Altura and its subsidiary, Auto Expert, earned the awards from the Inland Empire Ad Club at its annual ADDY Awards. The program, sponsored by the American Advertising Federal, is the first of a three-tier national competitition. Inland Empire's competition received 455 entries …