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CU System Archive

CU System

WesCorp former board wont contest conservatorship

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SAN DIMAS, Calif. (4/7/09)--The former board of directors of Western Corporate FCU (WesCorp) Monday announced its unanimous vote against contesting the recent decision by the National Credit Union Administration (NCUA) to place WesCorp into conservatorship. The former board met four times to review legal options since the NCUA took conservatorship action on March 20, said the corporate in a press release. "Counsel was received from multiple law firms across the country, and the board unanimously concluded that any legal challenge to the establishment of the conversatorship would be very problematic and the cost extraordinarily high, given the likely outcome," WesCorp said. Bob Harvey, former chairman of the board, said, "We received encouragement and support from many WesCorp members, but the former board, after careful consideration, believes litigation is not a viable alternative. "At this point in time, the best way to minimize losses to the share insurance fund and member credit unions is to support the NCUA in its strategy to hold US Central and WesCorp investments to maturity," Harvey added.

BizKid host closes out NASDAQ

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NEW YORK (4/7/09)--Biz Kid$ host Austin Siedentopf, accompanied by executive producers and biz kids from the popular television show sponsored by America's Credit Unions, helped ring the closing bell at the NASDAQ stock market at New York's Times Square Monday afternoon. The group attended the closing bell at 4 p.m. EDT. The event was beamed onto the huge screens at Times Square, with Biz Kid$ promotions airing in 30-second intervals from 3:30 to 4:30 p.m., and is available on the Internet. Biz Kid$, which teaches youth about money, is broadcast on more than 334 PBS stations, roughly 97% of the U.S. public television market. It is underwritten by a coalition of America's Credit Unions, comprising more than 150 credit unions, credit union foundations and other supporting organizations. The largest funder is the National Credit Union Foundation

MDDCCUA testifies against state card rates bill

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ANNAPOLIS, Md. (4/7/09)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) testified in opposition to a state bill that would prohibit card companies from placing clauses in consumer contracts that would allow the companies to retroactively change credit card interest rates. House Bill 1048 would create an unlevel playing field between state and federally chartered credit unions because federal credit unions would be pre-empted by federal law, said MDDCCUA (Focus Newsletter April 6). House Bill 1048, as drafted, would place state-chartered credit unions at a disadvantage because federal credit unions would be pre-empted, said Brian Tate, vice president of legislative affairs at MDDCCUA, testifying Thursday before the Maryland State Senate Finance Committee. However, he told the committee that the association does not support universal default. In addition, the bill would go beyond the intent of the bill's sponsor, Del. William Frick (D-Montgomery County), and impact consumer contracts in general, including areas such as default provisions in promissory notes, which can be triggered by events unrelated to a borrower's activity such as the borrower's death, the association said. Credit union representative Jim Brown also testified against the bill, pointing out that 10 years ago state law regarding credit union regulation was amended to mirror federal law. Joining MDDCCUA in opposing the bill were a number of associations, including the Maryland Bankers Association. They testified that the bill's reach exceeds its intent.

Study Shared branching positively impacts margins

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ATLANTA (4/7/09)--Shared branching positively impacts credit unions' profitability, according to research findings from Raddon Financial Group released at CO-OP Financial Services' THINK 09 conference. Fifteen credit unions from various regions, asset sizes and peer groups participated in the study, conducted by Raddon in conjunction with CO-OP Shared Branching. The study found that retaining and gaining members via shared branching increases the profitability of surveyed credit unions through their own cross-sales channels. Other key findings:
* Shared-branch users represent 23% of surveyed credit unions' overall profitability. While statistics range by individual credit union, one participant noted 13% of members using shared branching at the credit union represented 65% of its overall profitability. * The "middle market" segment accounts for 28% of shared-branch user households. The market is comprised of young to middle-aged members with incomes ranging from $30,000 to $100,000 and who have built up enough in household balances to offer good profit potential in both savings and borrowing. * Shared-branch households generated an average profit of $119.10 among those credit unions surveyed, while non-user households averaged $28.47. Factor in the costs of shared branching, and user households still average a significantly higher profit of $73.17. * While 30% of overall households are profitable, 38% of shared-branch households are profitable. * Shared branching can be considered a profit center for acquiring institutions (those that welcome guest members into their own branches). Based on study findings, shared branch net income totals nearly $23,000 per credit union annually. * Deposits are the most common shared-branching transaction type, with an average of $784 per transaction. * Transfers and loan payments are significant in shared branching--line of credit advances or loan disbursements on average are $2,454 per transaction among the credit unions surveyed. * With 13% of transactions occurring after 5 p.m., extended hours continue to be important to shared-branch users. * Members of credit unions in the study used 428 different locations.
"Many credit unions are already aware of the benefits of shared branching. But as organizations look to cut costs during these tough times, this study shows that shared branching has never been more important," said Carroll Beach, president/chief operating officer of CO-OP Shared Branching.

WOCCU lowers hotel rates for World CU Conference

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MADISON, Wis. (4/7/09)--The World Council of Credit Unions has lowered the hotel rates for the World Credit Union Conference in Barcelona July 26-29. This year, more than ever, credit union leaders worldwide need the opportunity to come together and learn from each other, said WOCCU. It worked with all three conference hotels to reduce the rates. At the Hilton Diagonal Mar, the price has been reduced from 200 euros to 150 euros ($269.81 to $202.36) for single or double occupancy. Prices for both the AC Barcelona and the Barcelona Princess have been reduced from 165 euros to 110 euros ($222.60 to $148.40). The reduced rates are valid for registrations received by May 20. For more information, use the resource link.

MCUA annual advocacybusiness meeting marks 80 years

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JEFFERSON CITY, Mo. (4/7/09)--Keith Morton, National Credit Union Administration (NCUA) regional director and a member of the U.S. Central conservatorship board, fielded credit unions’ questions
NCUA Regional Director Keith Morton answers questions March 31 during the Missouri Credit Union Association's Annual Advocacy and Business Meeting.
Missouri State Sen. Wes Shoemyer (D-18) looks at his playing cards while meeting with Heather DeMint and Donna Evans of United CU.
Recognized during the Missouri Credit Union Association business meeting were, from left: new Board Chair Stan Moeckli, Electro Savings CU ; outgoing Board Chair Betty Clark, United CU; and departing board member Hubert Hoosman Jr., Vantage CU. (Photos provided by the Missouri Credit Union Association)
about NCUA corporate credit union actions at the Missouri Credit Union Association’s (MCUA) Annual Advocacy and 80th Annual Business Meeting, held March 30-31. Morton said supporting the corporate system is “a reality of the situation” facing credit unions. He added that while natural person credit unions are “taking a hit,” they are in good position to weather the storm. “The issue before us is so large and so complex, to think that credit unions wouldn’t be impacted by what’s happening in the global economy is not really possible,” Morton said. MCUA President/CEO Rosie Holub also emphasized economic challenges during the business meeting. “We are in for a long recovery, with unprecedented government intervention as legislators and regulators try to stabilize the economy,” Holub said. MCUA is helping ease the economic strain on credit unions in 2010 by maintaining the reduced dues formula it introduced in 2009. In February, the MCUA board voted to assist member credit unions by distributing $500,000 based on a percentage of dues paid. “Credit unions are capable of handling things on our own without asking for a government bailout,” said outgoing MCUA Board Chair Betty Clark of United CU, Mexico, Mo. Newly elected board officers include:
* Board Chair Stan Moeckli of Electro Savings CU, St. Louis; * First Vice Chair Dennis Pierce, CommunityAmerica CU, Kansas City, Mo.; and * Second Vice Chair Brian Eyestone, Southpointe CU, St. Louis.
Bob Eike, Century CU, St. Louis, was elected to the board, while Hubert Hoosman of Vantage CU, Bridgeton, stepped down after 11 years of service. Moeckli; Tony DiGiovanni of CSD CU, Kansas City; and Carolyn Ross of Northland Teachers Community CU, Gladstone, were re-elected to three-year board terms. The event emphasized legislative action, with almost 50 state legislators and staff members attending a dinner reception. Credit union representatives visited the Missouri State Capitol to present lawmakers with decks of playing cards personalized with the lawmakers’ pictures and a message about the credit union difference.

Iowa CU leaders appointed to CU Review Board

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DES MOINES, Iowa (4/7/09)--Three Iowa credit union leaders were confirmed by the Iowa Senate for positions on the state Credit Union Review Board in the Department of Commerce, Credit Union Division. Dave Cale, CEO of Financial Plus CU, Des Moines, and Tim Marcsisak, CEO of Nishna Valley CU, Atlantic, were confirmed to two open positions on the board. Denise Dolan, board chair off Dupaco Community CU, Dubuque, was reappointed to her position on the review board. The board oversees the operations of the Iowa Credit Union Division and approves any administrative rules proposed by the superintendent. The terms of these volunteer positions will begin May 1 and expire on April 30, 2012. "Iowa credit unions will be well represented by these individuals and I thank them for their service," said Patrick S. Jury, CEO of the Iowa Credit Union League.

WOCCU chair leads overseas delegation to DE training

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DELAVAN, Wis. (4/7/09)--Melvin Edwards, chairman of the World Council of Credit Unions and an international credit union ambassador from the Caribbean, is among the overseas leaders registered to attend Credit Union Development Education (DE) training May 13-19. “Participating in the U.S. DE program will enable me to commence applying Caribbean and worldwide experiences of the past 27 years into academic thought and frameworks, especially in the unprecedented trauma facing the global economy and financial sector,” Edwards said.
Click to view larger image Melvin Edwards, WOCCU chairman, will be among the international leaders participating in Development Education training. (Photo provided by the World Council of Credit Unions)
Inspired by the 2008 joint launch of an international designation between WOCCU and the National Credit Union Foundation (NCUF), Edwards hopes to work with other graduates to start a sustainable Caribbean DE program. DE-designated programs already exist in Asia, Australia, the Philippines and the United Kingdom. DE training in 2009 will incorporate emerging economic discussions while continuing to provide critical lessons in cooperative principles and credit union philosophy, according to DE Training Facilitator Tom Decker, who also serves as NCUF’s director of social impact management. DE training is open to everyone from new employees who need a credit union orientation to seasoned executives who need to recharge. The May session will be held in the new location of Lake Lawn Resort in Delavan, Wis. The lakefront resort is about 50 minutes from either Madison or Milwaukee and less than two hours from Chicago. Scholarships are available through NCUF’s DE Fund and several state credit union foundations and leagues (News Now March 11). For more information, contact your state foundation or league, or contact Decker at tdecker@ncuf.coop or 800-356-9655, ext. 4374. NCUF is the primary sponsor of the DE program, with support from CUNA Mutual Group, the Credit Union National Association, the World Council of Credit Unions and state foundations and leagues.

Congressman to CUs I cherish what you do

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ORLANDO, Fla. (4/7/09)--U.S. Rep. Alan Grayson (D-Fla.) recently told a group of credit union representatives at Orlando (Fla.) FCU that he cherishes what credit unions do. “Credit unions are special,” Grayson said. “They’ve avoided the problems that have laid our economy low. They did it in a simple way--by making the right decisions.” Credit unions made the right decisions because they support their communities, the congressman said. Many institutions and businesses are focused on making as much money as quickly as they can, but that model doesn’t work anymore, Grayson added. The model that does work is the one credit unions use--working together to make people’s lives better. Grayson said he’d like to see more cooperatives, and “I’d like to see more credit unions,” he added. For a video of Grayson’s speech, use the link.

INY TimesI advertorial highlights benefit of co-ops

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WASHINGTON (4/7/09)--A four-page “advertorial” in the front section of yesterday’s New York Times spotlighted the various types of cooperatives, including credit unions, as a better business model in the economy today both in the U.S. and abroad. Headlined “Power to the People: Cooperatives Spread the Benefits,” the feature noted U.S. cooperatives today run the gamut from multibillion dollar agribusinesses to tiny food co-ops and worker-owned businesses. But whatever the type, the Times noted, the traits they share are member-ownership and earnings that go back to the members rather than outside stockholders. “It’s all about mission,” emphasized Roberta MacDonald, senior vice president, marketing, for Vermont-based Cabot Creamery Cooperative. “People involved in cooperatives believe they are on a mission--we really do!” Added Glenn English, CEO of the National Rural Electric Cooperative Association, “There is no finer business model.” Paul Hazen, CEO of the National Cooperative Business Association, predicted continued growth as more Americans discover co-ops. NCBA spearheaded the New York Times initiative as part of its effort to raise awareness about co-ops after the paper published a similar advertorial about credit unions in January. A half-page NCBA ad accompanying yesterday’s piece steers readers to www.thebetterchoice.coop, a site where they can learn more about credit unions and other co-ops. The co-op advertorial also included a section on credit unions, which The New York Times called “perhaps the most visible of cooperatives on the American scene.” Credit unions are based on the idea of people helping people, explained Mike Ness, CEO of New York University FCU, one of the CUs featured. “We did not issue toxic mortgages. That wouldn’t benefit our members. We are usually very conservative in our lending.”

CU System briefs (04/06/2009)

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* NORTH PHILADELPHIA, Pa. (4/7/09)--TruMark Financial CU has opened a new branch to reach underserved residents of a predominantly Latino community in North Philadelphia (Life Is A Highway April 3). The branch was developed with partners that include Asociacion Puertorriquenos en Marcha (APM), which was turned down by several banks before approaching TruMark. The community has lacked a financial services provider for almost 60 years. Participating in the opening ceremony were, from left, Mike Wishnow, senior vice president of the Pennsylvania Credit Union Association (PCUA); Pennsylvania Secretary of Banking Steve Kaplan; TruMark CEO Mark Stipa; TruMark Board Chair Hugh Bray; and PCUA Vice President Christina Mihalik. (Photo provided by Pennsylvania Credit Union Association) … * SPRING GROVE, Pa. (4/7/09)--Glatco CU recently held a ribbon-cutting ceremony to open a student credit union branch at Spring Grove High School. Student Melissa Pendleton, right, was the first to open an account at the branch, assisted by Teller Missy Altland and CEO Bill Bowker. The student branch and a cooperative store located nearby help boost financial education for high school students (Life Is A Highway April 3). David Stricker, superintendent of the Spring Grove School District, noted that Glatco CU has close ties to the community, including several board and staff members who are Spring Grove High alumni. Spring Grove joins 21 other student branches operating in the state. (Photo provided by Pennsylvania Credit Union Association) … * ABILENE, Texas (4/7/09)--Abilene Teachers FCU has presented $95,000 raised by its holiday “Skip-a-Payment” program to the Boys and Girls Clubs of Abilene. Members who elected to skip one or two loan payments in the months of November, December or January paid a fee of $10 per month (Reporternews.com April 3). During its six-year history, the “Skip-a-Payment” program has raised more than $400,000 for Abilene’s Boys and Girls Clubs, which will use the 2009 gift to provide summer programs and support operating costs. Abilene Teachers CEO James Boyd said credit union members look forward to the event all year … * DALLAS (4/7/09)--U.S. District Court Judge Reed O’Connor has sentenced the former president of the defunct Texas Department of Transportation-Wichita Falls CU to 71 months in prison (Times Record News April 3). Joanna Lynn McGee must also pay restitution of $2.6 million for embezzling at least $850,000 from the credit union for herself, family members and friends from 2001 to 2008. McGee, 40, used names from dormant accounts and dead members to obtain 129 fictitious loans worth approximately $3 million during the seven-year period. During the sentencing, Reed told McGee that she “crashed an entire credit union” (Texomashome.com April 3). Mandi Nicole Shook, another credit union employee who has pleaded guilty to embezzlement in the same case, still awaits sentencing … * GRAND RAPIDS, Mich. (4/7/09)--The former general manager of Plainwell Community FCU has been ordered to serve nearly four years in prison for money laundering and embezzlement. Ronald Alan Tran, 45, also must pay almost $1 million in restitution for money channeled from the credit union into personal accounts. Discovery of a fraudulent loan approval led authorities to uncover Tran’s embezzlement, which occurred over a four-year period …