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Merger OKd in Pa. another set for Texas

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TREVOSE, Pa., and HOUSTON, Texas (4/5/12)--Two mergers of credit unions in Pennsylvania and Texas are in the works.

The Pennsylvania Department of Banking approved on Sunday the merger of $1.3 million asset Kenrick FCU, Bryn Mawr, Pa., with TruMark Financial CU, a $1.36 billion asset credit union in Trevose, announced TruMark Financial in a press release.

The merger provides the former Kenrick members access to an expanded branch network and a wider menu of financial products and services, said TruMark Financial.  The new members will have access to consumer loans, first mortgages, and insurance and investment products, as well as online and mobile banking services and a large surcharge-free ATM network.

In Texas, Houston-based Space City CU, with more than $34 million in assets, said it plans to merge this year with Independence Parkway FCU, a $21 million-plus asset credit union located in La Porte.

Combined, they will serve 8,200 members and have more than $56 million in assets (Houston Business Journal Online March 30).  The  challenging economy prompted Independence Parkway to merge as the best move to provide its members with quality services, said a statement by Space City in the article.

With the merger, members will have access to branches in downtown Houston, the Galleria area, and in La Porte, as well as access to mobile banking, online check deposit, free checking and business services.

Kansas CUs finish 2011 on strong note says KCUA

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WICHITA, Kan. (4/5/12)--Kansas credit unions finished 2011 with high growth rates in loans, assets, shares and members, according to the Kansas Credit Union Association's  (KCUA) Quarterly Performance Summary for fourth quarter 2011.

Loan growth continued, with a 5.88% increase--five times the national average--over fourth quarter 2010, said KCUA. Used-auto loans and mortgages were the leaders in the loans category.  Used-auto loans grew 8.5% annually, offsetting a 4.7% in new-auto balances. 

Credit unions in Kansas originated $354 million in first mortgages during the year, nearly 22.5% of total loan originations. The fourth quarter of 2011 was one of the strongest quarters for first mortgage originations in Kansas credit union history, with more than $120 million loaned out. This was the second highest quarter in more than five years, since $128.8 million was originated in fourth quarter 2010, said KCUA's report.

Shares or savings increased nearly 8% last year, to $4.1 billion deposited with credit unions. Checking shares showed the largest percentage increase, up 15.6%.  The checking penetration also increased, indicating more credit union members are opening checking accounts, the association said.

Membership rose 2.4% --to 627,564--with Kansas credit unions adding 14, 638 members during the year, compared with the national average of 1.4%.

"Kansas credit unions remain strong, especially in light of our economy," said Bob Mayes, vice president of Member and Strategic Services at KCUA.  "With unemployment declining, delinquency and losses seem to have stabilized. Our used-auto loan growth continues to be high, balancing new-auto loans, which have declined in 2011," he added.

CU System briefs (04/04/2012)

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  • KANSAS CITY, Kan. (4/5/12)--Vershon Moore, 21, a former all-conference running back at Washburn University in Topeka, was sentenced this week to 30 months in federal prison for his role in robbing a credit union last summer.  A co-defendant in the case, Tracie Bacon, worked at the Topeka credit union that was targeted and admitted to helping plan the robbery. She also was sentenced to 30 months in prison. Press reports referring to a news release from the U.S. attorney's office said both Moore and Bacon pleaded guilty to one count each of bank robbery. Moore admitted he held up two employees at Envista CU, of Topeka, as they worked to refill an outdoor ATM machine. It was reported that Bacon gave Moore the schedule for ATM refills, as well as texted him shortly before the robbery. The pilfered funds were found by investigators in Bacon's basement (Kansas City Star and The Capitol Journal April 2)…
  • ELIZABETH, Pa. (4/5/12)--Clairton Works FCU, Elizabeth, Pa., has reported that fraudulent checks, bearing the credit union's routing number but an invalid account number, have been issued to hotels and motels. Clairton has received account verification requests and checks presented in the name of Thomas Johnson Inc. of Alpharetta, Georgia. However, the credit union does not have business accounts. No losses to the credit union have occurred (Life is a Highway March 30)…

Pelican State CU transfers branch to Eagle FCU

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CHALMETTE, La. (4/5/12)--A branch acquired to help credit union members in the wake of Hurricane Katrina is being transferred from $191 million asset Pelican State CU to $92 million asset Eagle FCU as of April 17. Both credit unions are based in Baton Rouge, La.

Pelican State CU acquired the branch in Chalmette, La., through a merger with Chalmette Refinery CU, which was in danger of closing after Hurricane Katrina.

In a Pelican State CU release, CEO Jeffrey K. Conrad noted that while Chalmette Refinery CU's members needed a helping hand, Pelican State's strategic plan did not call for growth in the greater New Orleans area.

The release noted the branch is being transferred to Eagle FCU because Chalmette members can benefit from a credit union with a larger presence in the community and plans for growth in that area.

Conrad noted the branch and accounts will not be sold for a profit, but transferred in an "even exchange." Eagle FCU intends to retain all Pelican employees and members.

Eagle FCU CEO Ginger Manint said the transfer demonstrates both the cooperative spirit of credit unions and decision-making that is in the best interest of members.

INerdWalletI promotes CUs checking accounts as top picks

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SAN FRANCISCO, Calif.  (4/5/12)--Checking accounts at America's credit unions offer "free checking with good karma," according to consumer financial website NerdWallet.

In a recent blog post, NerdWallet highlighted the advantages of credit unions' checking accounts and other products when compared to banks. The April 2 blog post honored six credit unions for offering "top" checking account options:

  • Members 1st CU, Redding, Calif., offers its "Basic Checking Account" with no minimum transaction level to save households an average of $150 per year. E-statements are required, but the account also offers free bill pay and free access to MoneyDesktop, a personal financial management tool.
  • 3Rivers FCU, Fort Wayne, Ind., has "Livin' Free Spending" accounts to provide free access to ATMs through two major networks, shared branching and  "Oops Refunds" that repay penalty charges up to three times a year for up to $30 per refund.
  • San Diego County CU, San Diego, Calif., requires only $25 to open the account, which includes online banking and bill pay and offers mobile deposit via smartphones.
  • Randolph Brooks FCU, Universal City, Texas, provides 10 cents cash back on all debit card purchases on top of a 0.15% annual percentage yield (APY) on balances. Free standard checks are provided for online orders. E-deposits are available with a smartphone or scanner, balances are provided on mobile phones, and free e-alerts send text messages about account activity.
  • First Abilene FCU, Abilene, Texas, comes with two annual fee refunds, a consumer loan discount and no limits on checks or withdrawals.
  • Northern FCU, Watertown, N.Y., offers ATM refunds as well as 2.01% APY on balances up to $25,000 for accounts that qualify by using e-statements, accessing online banking at least monthly and having one automatic payment or direct deposit each month.
NerdWallet noted that while banks are increasing fees, credit unions are "rolling out the welcome mat" for new members.

"In the ongoing battle of credit union vs. bank, credit unions almost always come out ahead," NerdWallet reminded readers.

To read the full article, "Top Free Checking Accounts at Credit Unions," use the link.

WOCCU extends leadership program deadline to April 20

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MADISON, Wis. (4/5/12)--The World Council of Credit Unions has extended the application deadline for the latest phase of its International Leadership Program to April 20.

The International Credit Union Leadership Program, which promotes internships for young credit union people from various countries, is designed to facilitate idea exchanges, promote foreign language skill development, enhance cultural diversity and improve problem-solving within a global credit union context.

MBL push at state level grows reported in media

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CHARLOTTE, N.C. (4/5/12)--Small businesses in North Carolina are supporting credit unions' push to get passage of the bill that would increase their member business lending (MBL) cap, according to a report in The Charlotte Observer.

Several small businesses described to the Observer (April 4) how credit unions saved their businesses after they were turned down by banks. They support a bill before Congress that would enable credit unions to make more small business loans by increasing credit unions' MBL cap to 27.5% of assets from the current 12.25% so credit unions can make more small business loans.

For example:

  • David Settle, who owns a heating and air conditioning company, decided to refinance with Truliant FCU, Winston-Salem, because it was eager to loan to him while banks have not been willing to work with people, he told the newspaper.
  • Joe Trettel, managing partner of aluminum product manufacturer Permatech Inc., near Greensboro, said he laid off half of his 105 employees and was on the verge of collapsing when Truliant FCU gave him a loan. Now the company is back at full strength.
  • Victor Lytvinenko, co-founder and designer of Raleigh Denim, who received a $10,000 loan in 2009 from Coastal FCU,  Raleigh, has grown into a 24-employee company.  He told the newspaper his business grew in the middle of the credit crunch mostly because the credit union worked with it.
  • Jim Dobbins, Sharp Interiors Inc., Winston-Salem, said his bank dropped him and seven other banks turned him down. His company, which earns about $10 million a year, was picked up by Allegacy FCU, Winston-Salem. "I'm with a credit union because they were the only alternative I had," Dobbins told the newspaper. "Without them, I wouldn't be here."
The article noted that several North Carolina credit unions are bumping up against the cap, or close to it. It cited the Credit Union National Association's (CUNA) statistics: credit unions hold about $40 billion in business loans, less than 6% of all small-business loan. Dan Schline, senior vice president of association services at the North Carolina Credit Union League,  said the total has grown more than 44%.

If the cap is increased, North Carolina would likely see an additional $200 million in loans closed, creating 2,100 jobs, the league said.

CUNA projects that increasing the cap would inject $13 billion in new investments in small businesses, creating 140,000 jobs at no cost to the taxpayer.

WOCCU supports global AML reg revisions

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PARIS (4/5/12)--The World Council of Credit Unions (WOCCU) Tuesday said it strongly supports revisions to regulations developed by the Financial Action Task Force (FATF) designed to combat money laundering and terrorist financing, and supports the FATF's revised due diligence recommendations that can be scaled to acknowledge credit union members' relative lack of risk in these areas.

Click to view larger image World Council of Credit Unions' Michael Edwards (left) and Credit Union Central of Canada's David Phillips represented financial cooperatives to support revisions of regulations developed by the Financial Action Task Force designed to combat money laundering and terrorist financing. Edwards and Phillips also promoted credit unions' low-risk as money laundering targets. (Photo provided by the World Council of Credit Unions)
World Council representatives spoke to this issue at an April 2 FATF meeting at the Paris headquarters of the Organization for Economic Cooperation and Development, where the inter-governmental regulatory body is domiciled.

More than 100 participants attended the two-day meeting to discuss revisions to FATF's International Standards on Combatting Money Laundering and the Financing of Terrorism and Proliferation, better known as the 40 recommendations. WOCCU supports the recommendations overall, and especially the FATF's revised customer due diligence (CDD) recommendations that should apply to the relatively low-risk scenarios offered through credit unions, according to Michael Edwards, WOCCU chief counsel and vice president for advocacy and government affairs.

"World Council strongly supports the FATF's recommendations and interpretive notes regarding simplified CDD measures for lower risk customers and transactions," said Edwards, who represented the global credit union trade organization with David Phillips, president/CEO of Credit Union Central of Canada, a World Council member organization. "We asked the FATF to consider issuing additional guidance on this issue to help reduce regulatory burdens on credit unions when there is no indication of money laundering or terrorist financing."

The revisions WOCCU supports recognize the relative lack of risk generally offered by credit union members and their transactions. As natural-person financial cooperatives, credit unions do not serve corporate entities with opaque ownership structures that might easily hide criminal money laundering or terrorist activities, said WOCCU.

Language already exists within the CDD recommendations offering a simplified approach, which WOCCU believes will reduce regulatory burdens to levels appropriate to the general risk found in credit unions, Edwards explained. FATF reacted positively to WOCCU's comments, noting that while a simplified CDD could not uniformly apply to all credit unions on an institution-wide basis, national or provincial regulators could reduce regulatory burdens on credit unions in cases where members were likely to be low-risk.

FATF's revisions also indicate further recognition that credit unions generally pose less risk overall due to their cooperative nature and the role played by their member-owners, according to Brian Branch, WOCCU president/CEO.

"We urge FATF to recognize the value of financial cooperatives' relationships with their members through the simplified customer due diligence revisions," said Branch. "Credit unions continue to be a positive global economic force and recognition of that role by global regulatory bodies is necessary to maintain and protect that positive role that financial cooperatives fulfill."

Texas tornado destroys home of CU employee

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MADISON, Wis. (4/5/12)--The home of at least one Texas credit union employee was destroyed by tornadoes that swept through the Dallas-Fort Worth area Tuesday. However, Texas credit unions appear to have escaped major damage.

One tornado destroyed the home of an employee of City CU in Dallas, and another employee was temporarily displaced when an apartment building was damaged, the Texas Credit Union League told News Now.

"It's devastating," Taunya Williams, City CU chief marketing officer, said of the employee's loss. Williams said the credit union is opening an account to accept donations for the employee. Other employees have offered to volunteer with clean up and other assistance.

CUNA Mutual Group's Credit Union Protection Claims unit contacted credit unions in the disaster area, and there were no reports of any major damages to credit unions, said Phil Tschudy, CUNA Mutual Group's media relations manager. A few credit union locations sustained some wind and hail damage to their facilities, but these were minor in relation to other damages in the affected areas.

A branch of Neighborhood CU received roof and window damage, Carolyn Jordan, senior vice president at the credit union, told News Now. The glass door of a community room was also blown out, Jordan said.

About 20 vehicles owned by employees of YOUR Community CU in Irving, Texas, suffered hail damage, according to Rick Stokes, assistant vice president of marketing at the credit union. Although the area wasn't hit by tornadoes, storms did bring golf ball-sized hail, which broke windshields and dented vehicles, Stokes said.

The YOUR Community CU branch in Irvine does not appear to have been damaged, Stokes said. "We seem to have been right on the edge of the tornadic activity," Stokes said. "A block away there was no hail."

The Texas league told News Now it had been in contact with member credit unions throughout the Dallas-Fort Worth area. The area was hit by an estimated 18 tornadoes, according to

TCUL spokesperson Linda Webb-Manon said she expects to hear from credit unions with members who were affected by the tornadoes. The American Red Cross estimates 650 homes were damaged in the Dallas-Fort Worth area on Tuesday.  

"It usually takes a couple days to get reports credit unions, but we expect more people will need some help," Webb-Manon said. "The tornadoes hit a heavily populated area, and we know there were extensive damages to some residential areas."

Texas Credit Union Foundation said it is ready to implement phase one emergency grants to any credit union employees affected by the tornadoes (Lone Star Leaguer April 4).

Phase one emergency grants are provided to credit union employees to assist with immediate disaster relief needs, such as out of pocket costs that may result from being evacuated. The grants are up to $500 per credit union employee. The grants are provided to help stabilize credit union employees' individual situations so they can return to work.

Although her credit union escaped damaged, Stacey McDonald, CEO of Corner Stone CU, in Lancaster—the hardest hit area, according to USA Today--saw one of the tornadoes first hand about a mile from her credit union as she stood outside the branch.

"We are just lucky we didn't get any damage," McDonald said. "The area just up the street did."

McDonald directed about 12 employees and three members--including her pregnant daughter--into the credit union's restrooms until the storms passed.

One employee was frantic because she heard the tornado was headed directly for her neighborhood, McDonald recalled. "But somebody called to tell her that it bounded over the neighborhood just like a frog," McDonald said.

The American Red Cross estimated that about 300 Lancaster homes were damaged.

"As a financial institution, we will do whatever we can to help," she said. "Right now I feel like someone was looking out for us."

Catalyst Councils hold preliminary meetings

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PLANO, Texas (4/5/12)--Nearly two dozen credit union officials--representing the membership of Catalyst Corporate FCU in the central and eastern regions of the U.S,---met last week to offer their perspectives on topics such as mobile banking and person-to-person payment initiatives; enterprise risk management concerns and member satisfaction surveys.

Attendees were members of the newly formed Catalyst Councils, which focus on service delivery, product development and enhancements, and "over-the-horizon planning," said Kathy Garner, Catalyst Corporate FCU president/CEO.

"There was a good mix of topics to cover, and the participation among the council members was well-balanced," said Sam Whitehurst, president/CEO of the $135 million Summit CU, in Greensboro, N.C. and a representative of the Eastern Catalyst Council. "I think the council members rallied around the Catalyst spirit of member-ownership, so everyone was engaged in a meaningful way."

Catalyst Corporate was launched last September with 860 member credit unions that contributed nearly $90 million in capital. Catalyst's credit union membership now approaches 1,200, with $139 million in capital.

"From the start, the Catalyst team has understood the importance of building upon a member-focused culture," Garner said. "This council process deepens the cooperative relationship between member credit unions and staff as they work side-by-side to set and achieve organizational objectives."

Garner noted that the council input will help Catalyst align its offerings with member credit unions' own strategic plans. "Catalyst Councils will serve as a springboard for member-driven service enhancements, and help ensure that resources are allocated to projects that members need and appreciate," Garner added.

Catalyst will soon announce the formation of a third council to represent credit unions in the western region of the U.S. The corporate had delayed formation of the Western Council to accommodate credit unions migrating to Catalyst Corporate as a result of the National Credit Union Administration's wind-down of Western Bridge Corporate.

Two re-elected to PCUA board

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HARRISBURG, Pa. (4/5/12)--The results of a recent director election for positions on the Pennsylvania Credit Union Association (PCUA) Board of Directors have been announced by board Chairman Michael Kaczenski.

She will represent credit unions in Asset Category 2, with total assets of more than $30 million to $100 million.

Ray Brunner, CEO of  the $179 million asset WEST-AIRCOMM FCU, located in Beaver, Pa., has been re-elected to the board and will represent credit unions in Asset Category 3, total assets greater than $100 million.

Their three-year terms will begin after PCUA's Annual Convention in May.

Dakotas associations new campaign draws media

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BISMARCK, N.D. (4/5/12)--The Credit Union Association of the Dakotas' (CUAD) press conference this week announcing the launch of its new awareness campaign drew the attention of Bismarck, N.D., media, says CUAD.

Click to view larger image Robbie Thompson, left, president/CEO of the Credit Union Association of the Dakotas, talks with television station reporters at a press conference launching the "We've Been Waiting For You" campaign to create awareness about the benefits of credit unions in North and South Dakota.(Photos provided by the Credit Union Association of the Dakotas)
Click to view larger image Flanking "The CU on the Road" vehicle that the Credit Union Association of the Dakotas will use to promote the benefits of credit unions in North and South Dakota are, from left: CUAD President/CEO Robbie Thompson; Vice President of Advocacy/Awareness Jeff Olson; Board Chairman Steve Davis; Director of Strategic Initiatives Kristie Heit; and CUAD staffers Karla Clark, Shawn Brummer, Deb Kruckenberg, Joell Kautzman, Amy Jo Johnson and Steve Rahrich.
The event launching "We've Been Waiting For You" was "well-covered by local media, including two local television stations," the association said.

The campaign goal is to create awareness about the benefits of credit unions across North and South Dakota.

"This is a unique campaign in our region," said Robbie Thompson, CUAD president/CEO.

"'We've Been Waiting For You' is about credit unions in North and South Dakota coming together as one to spread the beneficial credit union message," he said.

The campaign relies on testimonials from credit union members in the two states, describing experiences they have had with their credit unions. The testimonials will be incorporated into television and radio spots as well as the campaign's website. Use the resource link for more information.

"Another vital aspect of the campaign will be a grass roots road tour called 'CU on the Road,'" said Thompson.  "CUAD staff will be traveling in our CU on the Road vehicle across both states to meet with the public and talk about the benefits of credit unions."

The road tour kicks off April 17 and runs the rest of the year. Other tour stops include Bismarck, Grand Forks, Rapid City, Sioux Falls and more. Use the link for the full schedule.

CUAD will be conducting a second press conference later this week in Fargo.

CUs help Mexican banana growers prosper

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COAHAYANA, Mexico (4/5/12)--The World Council of Credit Unions (WOCCU)  is working with Caja Providencia, a local credit union, to develop a value chain financing program that ensures that banana growers in Mexico's Michoacan state get a fair market price for their crop to better support themselves and the local economy.

Click to view larger image Dora Leticia Garibo, an acopiador, or collection and processing agent, supports the value chain network launched by World Council of Credit Unions with Caja Providenica to assure banana growers in rural Mexico get fair prices for their crops.
Value chain financing provides financial infusion to farmers at key points in the planting, growing and harvesting cycle so they have sufficient funds to operate their businesses.  Acopiadors, or collection and processing agents, serve as the link among the grower, the buyer and the credit union, through which funds are provided,to support the farming cycle. Farmers who are Caja Providencia members can become part of the value chain process and gain access to additional credit union services.

"The value chain model has worked well to support rural growers, producers and craftspeople throughout Latin America," said Brian Branch, WOCCU president/CEO. "The partnership with Caja Providencia has made a positive difference in the lives of the members involved in this program."

The partnership is part of WOCCU's five-year Cooperative Development Program (CDP), supported by $4 million in funding from the U.S. Agency for International Development.  The program focuses on creating and testing agricultural and financial tools to improve rural economic and financial sector development, personal income and food security. Results from the program, which runs through 2015 and also operates in Guatemala, will include a scalable methodology to increase small farmers' access to markets, inputs and technical assistance.

The programs benefit credit unions by increasing member growth and participation. Caja Providencia, which serves 40,000 members, provides funds for the value chain model and provides the organization necessary to secure market-based prices from buyers.

Click to view larger image Teams of workers, called cuadrillas, spend entire days loading up to 23 tons of bananas into semi-trailer trucks for shipment to market in Mexico.(Photos provided by the World Council of Credit Unions)
WOCCU's partnership with Fideicomisos Instituidos en Relacion con la Agricultura, a development bank that offers credit and guarantees, training, technical assistance and technology-transport support to Mexico's agriculture, livestock, fishing, forestry and agribusiness sectors, has helped Caja Providencia members gain access to subsidized loans to grow their business.

The grower uses the loans, which currently have a 1.5% interest rate, to invest in better equipment, machinery and other inputs that will lead to higher quality crops. That, in turn, will increase prices and enable sale to buyers from markets currently out of the farmers' reach.

Members who participate in the program must increase production, improve their livelihoods and offer better financial support to their communities. Currently, a cuadrilla, or team of 15 workers, spends entire days loading up to 1,300 boxes--totaling 23 tons--of bananas into semi-trailer trucks for transport to market. 

For more information about the value chain finance methodology, use the link.