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CUNA Reports Better CU Financials For February

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MADISON, Wis. (4/3/13)--Credit unions reported better financial performance numbers in the first two months of 2013, when compared with a similar period in 2012, according to a Credit Union National Association senior economist's analysis of CUNA's Monthly Credit Union Estimates for February.

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"Loan balances are currently rising at a 5% annual rate, compared to a 4% pace last year," said Steve Rick, CUNA senior economist. "We expect loan growth to accelerate to 5.5% for the full year, up from 4.8% in 2012.  New-auto and used-auto loans are leading the way with growth over the last 12 months of 10.9% and 8.7%, respectfully," he told News Now.

According to the monthly estimates, credit unions' loans in February declined 0.1% from January--to $615.4  billion. That compares with February 2012's total of $586.1 billion in loans, a 1.7% decrease from January 2012.

February saw an increase in new-auto loans, up 1% over January; used-auto loans, up 0.4%, and adjustable-rate mortgages, up 0.3%. Loans that declined included unsecured personal loans and credit cards, down 1.2% each; home-equity loans, down 0.9%;  and fixed-rate first mortgages, down 0.1%.

"The credit quality of the loan portfolio has also improved over the last year," Rick said. "The credit union loan delinquency rate declined to 1.11% in February, down from 1.49% one year earlier, as the dollar amount of delinquent loan balances fell 22% and the total dollar amount of loans rose 5%," he said.

Credit unions' 60-plus day delinquency rate remained at 1% during February, the same as in January, said the estimates report.

"Credit unions also posted better earnings in the first couple of months of 2013," Rick added. "Net income as a percent of average assets (return on assets) rose to 71 basis points from 65 bps during the first two months of each year.  Higher fee income and lower provision for loan loss expense were factors driving the improvement."

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Savings at credit unions in February totaled $914.6 billion, compared with $861.6 billion for the same month in 2012. Savings balances grew 2% since January. Leading that growth were share drafts, which increased 7.3%; regular shares, up 3.6%; money market accounts, up 0.8%; and one-year certificates, which rose 0.4%.  Individual retirement accounts declined 1.8% from January to February.

With savings outpacing loans, credit unions' average loan-to-savings ratio decreased to 67.3% from 68.7% in January. The liquidity ratio, or the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities, was 20% in February.

Credit union membership increased 0.3% in February--to 96.4 million members. That compares with a 0.2% increase for the period a year earlier.

Credit unions' capital-to-asset ratio during the month remained at 10%, with $110 billion in total capital.

"Looking ahead, we expect improved economic growth in 2013 due to improving housing, energy and durable goods sectors," Rick told News Now. "With this backdrop, credit union operating results should generally reflect modest improvement in 2013."

News Now Links Restored

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Due to technical difficulties, there was a delay in the News Now headlines email this morning and the links to the stories were not functioning.  All has been restored.  News Now regrets any inconvenience.

'Thank My Piggy Bank' Fin Ed Song Unveiled

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MADISON, Wis. (4/3/13)--Kicking off National Financial Literacy Month and in advance of National Credit Union Youth Week April 21-27, the credit union music duo The Disclosures have released a new song and music video to teach kids about money.

Credit union music duo The Disclosures have released a new song and video for National Financial Literacy Month and National Credit Union Youth Week, April 21-27. (Photo provided by The Disclosures) "Thank My Piggy Bank" introduces children to the basic concept of saving. It is the first single from The Disclosures' forthcoming financial education album for kids due to be released later this year.

"Financial education is a key part of what credit unions are all about and it's embedded in their structure," said band member Christopher Morris, whose day job is as director of communications with the National Credit Union Foundation. "As Youth Week approaches, we hope this song and video proves useful for credit union organizations to leverage in their outreach."

"Thank My Piggy Bank" is available on most digital music stores including iTunes, Amazon, and CDbaby. The video is available for viewing and embedding on YouTube.  Use the link.

They released their first album in 2011 entitled "(Hey, We're) The Disclosures"--composed of songs that focus on credit union history and philosophy. Since then, Morris and fellow Disclosure Chad Helminak, Web and member development strategist for the Wisconsin Credit Union League, have presented educational sessions and music performances to credit unions, chapters, trade associations and vendors nationwide.

For their next project, The Disclosures will address an area that where consumers often have problems: personal finance. The pop/rock album will entirely focus on youth financial education.

Gibardi Named Chairman of NJ CU Advisory Council

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TRENTON, N.J. (4/3/13)--John C. Gibardi has been elected chairman of the New Jersey Credit Union Advisory Council.

Gibardi is a New Jersey state-chartered credit union member and president/CEO of Entertainment Industries FCU, which is based in New York City and has offices in Elizabeth, N.J., and Lyndhurst, N.J. He will serve a one-year term as chair.

The New Jersey State Legislature created the council in 1984 as a vehicle for credit unions to advise state government on credit union-related issues. Members are nominated by the governor and must be confirmed by the State Senate.

Gibardi, who serves on the Credit Union Association of New York board, is one of five CUAC members. He began his five-year term in 2008.

CUNA White Paper: Buy-in Critical For Blended Learning

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MADISON, Wis. (4/3/13)--Among the critical factors for the success of a blended learning program is buy-in from all levels of the credit union, according to a new white paper from the CUNA HR/TD Council.

"Finding the Right Blend: Learning Solutions for Credit Unions," includes research on the effectiveness of blended learning when compared with face-to-face, instructor-led training and with online learning. In the paper, credit union professionals weigh in on why blended learning works best for their organizations and offer suggestions on how to develop effective blended training programs.

Blended learning is commonly defined as education that combines face-to-face classroom methods with computer-mediated activities. Two-way communication with all stakeholders is critical for the success of a blending learning program, according the paper.

At Sioux Falls (S.D.) FCU, continuous learning is communicated as a priority on employees' first day, said Don Vaughn, training and development specialist for the $200 million asset credit union. "We tell all new employees that training is mandatory, that 'we are investing in you to help you become the best you can become,'" Vaughn said.

"All of our managers, including our CEO, participate in the training program, so all employees see the importance of training," Vaughn added. "It has become a part of our culture."

The credit union works hard to meet specific goals, including:

  • Keep the training relevant to employees' job roles;
  • Provide follow-up coaching from supervisors;
  • Apply proven adult learning theory components; and
  • Incorporate fun activities.
To download the paper, use the link.

Justice Dept Opposes Moving S&P Lawsuits To Federal Court

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HARTFORD, Conn. (4/3/13)--The Department of Justice Friday said it opposes ratings agency Standard & Poor's request to move lawsuits filed against it by state attorneys general in various state courts into a single federal court in Connecticut. The lawsuits allege S&P committed fraud in rating residential mortgage-backed securities (RMBS) and collateralized debt obligations (CDOs).

The suits were filed simultaneously on Feb. 5 by attorneys general in 17 states and the District of Columbia, as well as by the Justice Department in a federal court in California, against the McGraw-Hill Cos. Inc. and S&P's Financial Services LLC, which is owned by McGraw-Hill. The suit in California involves RMBS and CDOs sold to Western Corporate FCU.

S&P filed a motion March 25 in U.S. District Court in Hartford, Conn., asking it to take over the suit brought by Connecticut Attorney General George Jepsen and the other states. S&P does not argue taking over the federal case involving WesCorp.  The Credit Union National Association is monitoring all the cases involving credit unions.

In its motion, S&P contends that state law claims can be moved to the federal court because state-court consideration of those claims would "disrupt and supplant" the regulation of S&P by the Securities & Exchange Commission under the Credit Rating Agency Reform Act of 2006, and would  require "evaluation and adjudication of the scope and nature" of the act's regulatory scheme.

The Justice Department filed Friday a statement of interest supporting the states' claim with the court in Hartford. "There is no necessary federal component to the state-law claims, and hence no basis for S&P's assertion that the state cases fall within the 'special and small category' of cases in which removal may be appropriate," it noted. It made three arguments:

  • The states assert only state-law causes of action;
  • The states' right to relief does not necessarily depend on resolution of a substantial question of federal law; and
  • S&P's asserted preemption and First Amendment defenses do not provide a basis for removal.

210 CUs To Participate In Youth Week Saving Challenge

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MADISON, Wis. (4/3/13)--About 210 credit unions have signed up to participate in the Credit Union National Association's National Youth Saving Challenge.

The challenge, held throughout April, aims to get young members into the savings habit. It rewards 10 savers with $100 cash prizes. Last April, 241 credit unions joined the Saving Challenge and engaged 125,867 youth, who deposited a collective $21.3 million in their credit union savings accounts, including 7,300 new member accounts.

Credit unions can still participate in the challenge. While about half participate the entire month, others track deposits for a week or two.

National Credit Union Youth Week is April 21-27. The week was designated by CUNA so credit unions nationwide could focus on the financial needs of young people and provide financial literacy education. The event focuses on teaching the benefits of saving and goal setting, and invites youth to open savings accounts at their credit union and make deposits throughout the year.

This year's theme, "Savings Sleuth: Solve the Mystery" employs mystery and mustaches to engage youth.

National Credit Union Youth Week promotional materials, resources and giveaways are available from the CUNA website. Use the link. Detective-themed National Credit Union Youth Week T-shirts are also available.