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U.S. Central 1Q financials reflect more OTTI charges

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LENEXA, Kan. (5/3/10)--U.S. Central FCU's latest financial report indicates its projection of losses in existing investments has moderated during first quarter 2010, with total projected losses largely flat with fourth quarter 2009 levels. However, other-than-temporary-impairment (OTTI) charges increased for certain bonds. U.S. Central recorded a $45.4 million net loss for the quarter, compared with $507.3 million of losses in first quarter 2009. In both instances, U.S. Central's net losses were driven primarily by OTTI charges, which totaled $57.7 million and $519.5 million in first quarters 2010 and 2009, respectively. First quarter 2010 OTTI charges of $57.7 million were caused by further deterioration of certain non-agency residential mortgage backed securities. Excluding the OTTI charges, U.S. Central recorded net gains on financial instruments of $3.8 million, compared with $4.7 million for first quarter 2009. "As a result of cumulative OTTI charges recorded through the first quarter of 2010, U.S. Central's retained earnings have been fully exhausted, and all [Paid- in Capital] and [Membership Capital Shares] have been fully depleted. In addition, the Capital Note has been depleted by $650.3 million," the financial report said. The capital note refers to a $1 billion capital note U.S. Central received on Jan. 28, 2009, from the National Credit Union Share Insurance Fund. U.S. Central's regulatory capital ratio and retained earnings ratio, as of March 31, equaled 6.9% and 1.8%, respectively, the same as in March 31, 2009. Using actual capital balances, the capital ratio and retained earnings ratio were 0.9% and 0.0% for first quarter 2010, compared with 5% and 0% as of March 31, 2009. Net interest income for the Lenexa, Kan.-based U.S. Central totaled $14.3 million. That compares with $24.3 million for first quarter 2009--a 41.1% or $10 million decrease. Fee income totaled $6.1 million, compared with $5.4 million in first quarter last year. That marks an increase of $700,000 or 13.4%. Operating expenses were $11.7 million--a decrease of $1.1 million or 8.8% from first quarter 2009. Assets dropped $2.7 billion or 7.7% to $32.4 billion from $35.1 billion as of Dec. 31, 2009. The assets reflect primarily a $2.3 billion decrease in cash held at the Federal Reserve Bank of Kansas City. As of March 31, total funding--excluding capital accounts--was $38 billion, compared with $41.5 billion on Dec. 31, 2009. That is a decrease of 8.4% or $3.5 billion. Within this category, borrowed funds dropped by $5.8 billion, reflecting the repayment of U.S. Central's borrowings under NCUA's Credit Union System Investment Program (CU SIP). Members' share and certificate accounts rose by $2.3 billion. Member accounts remain U.S. Central's primary source of funding, totaling $28.8 billion at March 31. Its borrowings of $164.3 million under NCUA's Credit Union Homeowners Affordability Relief Program (CU HARP) will mature in fourth quarter. U.S. Central owns certain investments securities guaranteed by monoline insurers, including Financial Guaranty Insurance Co. (FGIC) and Ambac Assurance Corp. In fourth quarter 2008, U.S. Central concluded that FGIC had insufficient funds to pay claims. In fourth quarter 2009, it concluded the same for Ambac. OTTI charges have been recorded on securities insured by the two companies. Ambac is expected to pay 25% of required claims but nothing is expected from FGIC. For the full first quarter financial report, use the resource link.

IWall St. JournalI notes CUs mortgagejumbo loans

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NEW YORK (5/3/10)--More lenders--including credit unions--are stepping up to offer jumbo loans or mortgages that exceed $729,750, and The Wall Street Journal points to two credit unions' programs in particular in its Friday issue. "Since the mortgage crisis, banks haven't been eager to make large loans without federal protection, so the market for such mortgages suffered, crimping sales of expensive homes," said the article. However, the money is gradually becoming more available, said the article. It notes that the New York region benefits from having a number of financial institutions that make the loans--"from national lenders and investment firms to credit unions and smaller banks." "Credit unions have also become a popular jumbo outlet," said the Journal. "They certainly filled the void locally...You used to never see a credit union do mortgage lending," said the article, quoting Guy Cecala, publisher of Inside Mortgage Finance. "Long Island's Teachers FCU offers jumbo loans up to $1.5 million with 20% down, while Bethpage FCU will make loans up to $2.5 million, though it requires a 45%^ down-payment on those loans," said the Journal noting that the availability of money is improving. For the full article, use the link.

Third nomination received for CUNA board special election

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MADISON, Wis., and WASHINGTON (5/3/10)--The Credit Union National Association (CUNA) has received a third nomination for the District 5, Class B CUNA Board position, which is up for a special election. The latest nomination announced is for William Jacobs, White Sands FCU, Las Cruces, N.M. Other candidates are Angela S. McCathran of People's Trust FCU, Houston, and Roger Heacock, president/CEO of Black Hills FCU, Rapid City, S.D. The nomination deadline is at the close of the business day Wednesday. A special election will be conducted by written ballot beginning Friday and ending June 4. District 5 includes Arizona, Colorado, Kansas, Montana, Nebraska New Mexico, North Dakota, Oklahoma, South Dakota, Texas, Utah and Wyoming. The seat is currently held by CUNA Chairman Kris Mecham, who resigned, effective June 1. He will leave the U.S. this summer to perform mission work in Mongolia for his church. The successful candidate's term of office will begin immediately and will expire at the adjournment of CUNA's 2013 Annual General Meeting. Nominees must be an employee or voting board member of the nominating credit union. The nomination must be in writing and seconded by two other credit unions of the same size group from the district. Credit unions wishing to nominate a candidate should complete a nomination form and obtain the candidate's consent and two seconding nominations. Nomination forms will be accepted by fax at 608-231-4878, by email at thanson@cuna.coop, or by hard copy at 5710 Mineral Point Road, Madison, WI 53705.

Vermont card acceptance bill moves to governors desk

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BURLINGTON, Vt. (5/3/10)--A card acceptance bill that could affect how consumers use their credit and debit cards at merchant locations in Vermont has passed the state Senate, according to the Association of Vermont Credit Unions (AVCU). Vermont Gov. Jim Douglas is expected to sign the legislation into law when it arrives on his desk, AVCU said. On Thursday, the Vermont House of Representatives voted to send a scaled down version of S. 138 back to the Senate by a vote of 139-0 (Newslines Express April 30). AVCU, Vermont credit union leaders and experts from payment processors, card companies and Vermont banks have told legislators that S.138 was bad consumer legislation that could negatively affect the ability of consumers to use their credit and debit cards at merchant locations statewide. Although all parties on the card-issuing side of the merchant transaction--and card networks themselves--still strongly oppose the bill, opposition by AVCU and others resulted in improvements, AVCU said. Key changes include:
* Removal of language that could have allowed surcharging by merchants for payment by credit or debit card; * The setting of an allowable minimum plastic card transaction of no more than $10, which must be prominently displayed at point of sale. Merchants previously sought a limitless minimum of their choosing; * Merchants will not be required to accept plastic at all of their locations; however, this was already the case under most network regulations; * Statutory penalties for violations by networks of certain provisions having to do with locations, minimums and discounts have been limited to offenses in those areas only, as opposed to prior language which opened the door for penalties against all kinds of other possible violations; * A confusing definition of “processor,” which could have unintentionally included credit union card processors--as opposed to merchant processors--or credit unions as processors, has been eliminated; and * The bill’s provisions apply only to merchants with a physical presence in Vermont.
The House version also moved the effective date for many of the provisions from July 1 to Jan. 1. The House bill altered the Senate version’s mandate that Vermont’s financial institution regulator conduct a study of the impact of direct interchange fee negotiation between merchants and card issuers. The report, due by Dec. 15, requires the regulator to compile results of already performed studies and make recommendations back to the legislature. One provision never in contention by any of the parties remains unchanged between House and Senate. It makes the possession of card skimming devices illegal and carries a penalty of 10 years imprisonment and up to a $10,000 fine.

Savings up 0.7 loans down 0.4 in March

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MADISON, Wis. (5/3/10)--Credit unions’ savings nationwide are robust, while credit unions collective loan growth is still meager, according to a Credit Union National Association (CUNA) economist’s analysis of CUNA’s monthly review of credit unions for March. Credit union loans outstanding decreased 0.4% during March, up from a 0.6% decrease during February. Credit union loans in March totaled $578.8 billion, compared with $580.9 billion in March 2009. Fixed-rate mortgages led loan growth, increasing 0.7%, followed by adjustable-rate mortgages and unsecured personal loans, which rose
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0.4% and 0.1%, respectively. On the decline were new-auto loans (-2.1%), other mortgages (-1.8%), and credit card loans and home equity loans (-0.4%). Used-auto loans decreased less than 0.1%. “The recent results show that credit union loan growth remains very weak while savings inflows are strong,” Mike Schenk, CUNA vice president of economics and statistics, told News Now. “Several factors are contributing to the weak loan growth. For one, members appear to be concerned about debt loads and are paying down balances in an effort to adjust to new economic realities. “In addition, credit unions remain concerned about the specter of rising interest rates and are selling substantial portions of fixed- rate first-mortgage originations,” he added. Credit union savings balances increased 0.7% in March, down from a 1.9% increase during February. Credit union savings in March totaled -
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$768.5 billion, compared with $741.2 billion in March 2009. Regular shares grew 2.7%, followed by money market accounts (2%) and individual retirement accounts (1.7%). One-year certificates and share drafts decreased 0.9% and 2.6%, respectively. Credit unions’ 60-plus-day delinquencies decreased slightly to 1.8% in March. “One of the more promising developments seen in the data is that the delinquency rate inched down--the first time that’s happened in more than a year,” Schenk said. “An improving economy and recent labor market growth may mean this is the beginning of a trend--but we'll have to wait to see if this is the case. In any event, the decline seems especially significant because it occurred even though loan balances had declined marginally.” The loan-to-savings ratio remained at 74% in March. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 19%. The movement’s overall capital-to-asset ratio remained at 10% in March. The total dollar amount of capital is $90 billion.

SECUs youth week challenge nets 2.3M deposits

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RALEIGH, N.C., and MADISON, Wis. (5/3/10)--State Employees' CU (SECU), based in Raleigh, N.C., saw 13,000 young members save $2.3 million in deposits in one week during the National Youth Saving Challenge, which it held during National Credit Union Youth Week (April 19-23).
The Dobson, N.C., branch of Raleigh-based State Employees' CU and its youth program mascot, Fat Cat, welcomed students from a local school during its Youth Saving Challenge, the week of April 19-23. (Photo provided by the State Employees' CU)
SECU also opened 527 new youth accounts during the nationwide campaign spearheaded by the Credit Union National Association (CUNA). Challenge prizes at SECU included extra deposits of $50 to $100 to randomly selected winners. To promote the Saving Challenge, branch personnel at SECU's 230 locations created displays, held financial education activities, and presented workshops on financial topics in schools and communities. SECU's youth programs--Fat Cat for ages 12 and under, and Zard for teens up to 19 years old--focus on financial education. Both have dedicated educational websites. www.cufatcats.org and www.teenzard.org, plus newsletters to complement the specialized savings accounts. The $20 billion asset SECU has a Fat Cat mascot and uses Fat Cat "Smart Money" workbooks to teach financial concepts to its youngest members. It incorporates the Biz Kid$ television show and National Endowment for Financial Education (NEFE) curricula for middle school and high school students, respectively. CUNA will have nationwide results this week, and News Nowwill report the results as well as a roundup of some of the activities credit unions conducted to encourage youth to Get in the Saving Game.

How Wright-Patt saved members 26M

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FAIRBORN, Ohio (5/3/10)--Wright-Patt CU, Fairborn, Ohio, saved its members more than $26 million in direct financial benefits during 2009. The Credit Union National Association (CUNA) estimated in its annual Benefits of Membership report that the credit union provided $1,268 in savings throughout the year for households with “high use” of the credit union. CUNA’s report compares credit unions’ dividend rates, loan rates and fees to those of other banking institutions. The 2009 report shows an increase of more than $3 million for the credit union from the previous year’s report. The following shows how Wright-Patt’s products and services compared to area banks:
* Classic credit card: 8.70% lower rate; * Credit card late fee: $15 lower fee; * Regular savings ($1,000 balance): 0.52% higher return; * Checking nonsufficient funds fees: $5 lower fee; * Mortgage closing costs: $359 lower; and * 60-month new car loan: 1.72% lower rate.
In the past two years, Wright-Patt also paid more than $7 million in excess earnings to its membership in special patronage dividends. Wright-Patt has $1.7 billion in assets.

Mississippi CUs raise 13000 for tornado victims

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YAZOO CITY, Miss. (5/3/10)--Mississippi credit unions have raised $13,000 and counting for victims of a tornado that destroyed homes and killed 12 individuals in the state on April 24. “I was in tears when I saw the response,” said Dawn Parks, CEO of BenchSmart CU, Yazoo City. Yazoo City was hit hardest by the storm. Parks had asked credit unions using the Mississippi Credit Union Association’s (MSCUA) listserv to help the storm victims. After the message, donations began pouring in from credit unions around the state. Parks and her staff are shopping, assembling and delivering care baskets containing personal care items for individuals who lost their homes or suffered severe damages as a result of the storm. She said she was passing out the baskets as fast as she could Friday before more storms were scheduled to hit the area last weekend. “People have lost their homes and cars, and they can’t get to the [American] Red Cross,” Parks said. “Their faces turn white when we pull up [with the baskets].” So far, BenchSmart has delivered about 60 baskets, and hopes to deliver another 60 this week, depending on funds. Parks said she anticipates her staff will continue shopping for, filling and delivering the baskets every day this week. “It’s going great so far,” Parks said. “We’ve also had a few board members come and volunteer.” Parks said it’s important to her that credit union representatives deliver the baskets. “We wanted them to be touched by a credit union employee,” she said. It’s unknown how many BenchSmart members suffered damage to their homes, but Parks said she hopes to have a count next week. The credit union did not suffer any damages, and neither did credit union staff. “We were all blessed, which made us capable to help others,” she said. “It’s been an awesome, humbling experience.”

CU System briefs (04/30/2010)

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KANSAS CITY, Mo. (5/3/10)--The Association of Corporate Credit Unions (ACCU) has appointed Larry Harmon as interim executive director. He replaces Brad Miller, who recently became president/CEO of Southeast Corporate FCU. Harmon is president of Qversal Financial Solutions LLC, based in Kansas City, Mo. Qversal provides consulting services to corporates, credit unions, broker-dealers and investment advisors on regulatory compliance, financial-project initiatives, mergers and enterprisewide risk- management initiatives. Harmon has more than 30 years' experience in the financial industry, with expertise in investments, derivatives, operations, payment systems and audit, and strategic planning and budgeting. "Our first objective will be to work closely with corporates as the [National Credit Union Administration] finalizes plans for a legacy asset program, and the pending developments with the rules and regulations governing corporates," said Harmon. Steve Roy, ACCU chairman and president/CEO of TRICORP FCU, Portland, Maine, noted Harmon's background with corporate credit unions, credit unions and the broader financial industry. "His understanding of the regulatory and compliance issues, coupled with a deep knowledge of financial analysis, will prove invaluable as we navigate the changing corporate environment," Roy said ... * MADISON, Wis. (5/3/10)--Brian McCrory has been appointed to represent the Irish League of Credit Unions (ILCU) as a director on the World Council of Credit Unions (WOCCU) board, replacing board representative Mark Bailey. McCrory, in his first year as an ILCU board member, spent six years on the ILCU Supervisory Committee and was chair in 2006-2007. He serves on the Legislation and Administration committees, is chair of the Northern Ireland Committee and editor of CU Focus magazine. He has also served on advisory committees to the first and deputy first ministers' offices in Northern Ireland's Legislative Assembly and as director of the Northern Ireland Social Economy Forum. An educator, he is credit committee chair of Belfast Teachers' CU Ltd. Bailey's original WOCCU board term expires in July, making McCrory eligible to run as an incumbent for another term. Earlier, it was announced that Anne Cochran, president/CEO of the Louisiana Credit Union League, was elected to the WOCCU treasurer position, which Bailey also had held (News Now April 22) ... *
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CHICAGO (5/3/10)--National Credit Union Administration (NCUA) Chairman Deb Debbie Matz, right, and NCUA Board Member Mike Fryzel, left, meet with Illinois Gov. Pat Quinn, center, during the Illinois Credit Union League’s 80th Annual Meeting in Chicago last week. Quinn--a staunch supporter of credit unions and a lifelong credit union member--and Matz were both keynote speakers at the event, which began Thursday and ended Saturday. Nearly 690 executives representing 120 credit unions attended the conference, said the league.(Photo provided by the National Credit Union Administration) ... * BOULDER, Colo. (5/3/10)--Elevations CU and Longs Peak CU announced Thursday plans to merge, subject to a vote by the members of Longs Peak CU and approval by regulators. If approved, the merger would take effect June 1, with each credit union operating separately until the organizations' integration is complete, which would require several months, said a press release. Elevations would be the name of the surviving organization, with Gerry Agnes continuing as president/CEO. Long Peakes CU President Lisa Cortese would become vice president of the Loveland market. The merger would result in an expanded Front Range market, which will include Boulder and Broomfield Counties plus the city of Loveland in Larimer County. Longs Peak Board Chair Bob Jansma said the merger "would mean a stronger credit union better able to meet the financial needs of all members." The merged credit union would have nine branches and additional products and services ... * PALM BAY, Fla. (5/3/10)--An off-duty security guard was credited for thwarting an attempted robbery of a Palm Bay, Fla., branch of Melbourne-based Space Coast CU Thursday afternoon. The suspect, Floyd Francis, 23, was arrested after the guard, Rueben Torres noted that Francis put a plastic bag on his head while waiting in line. Torres went to his car and got his gun, a 9mm, and pulled it on the would-be robber, who was weaponless and gave up (Orlando Sentinel and Florida Today April 29) ... * MONTPELIER, Vt. (5/3/10)--Gordon A. Fish, a longtime leader in Vermont's credit union movement, has died, the Association of Vermont Credit Unions has learned (Newslines Express April 30). Fish served on the board of the then-called Vermont Credit Union League from 1961 through 1969 and from 1978 to 1983. He was second vice chair of the board in 1978 and first vice-chair from 1979 through 1982. He also was a league appointed delegate to meetings of the Credit Union National Association, and was active in his chapter and on league committees. Fish was a board member and chairman/president of Fairbanks CU (now Northern Lights FCU) for many years ...

Illinois league foundation hold elections

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NAPERVILLE, Ill. (5/3/10)--The Illinois Credit Union League (ICUL) elected its table officers for the coming year at its 80th Annual Convention Friday. Also, the Illinois Credit Union Foundation (ICU Foundation) elected officers to its board. With a Hawaiian theme of “Surf’s Up: Catch a New Wave,” ICUL’s three-day convention concluded Saturday in Chicago. Dennis Hall, CEO of I.H. Mississippi Valley CU in East Moline, was elected chairman for a one-year term. Hall has been on the league
Incoming Illinois Credit Union League (ICUL) Chairman Dennis Hall (left), receives the oath of office from outgoing league chairman, John Bratsakis, during the ICUL’s annual convention last week.
board, representing the Illinois Quad Cities Chapter of Credit Unions since 2001 and was a member of the legislative, executive and Credit Union Service Group committees. He will serve in this capacity for the ICUL Service Corporation (LSC). Outgoing chairman John Bratsakis will continue as ICUL director for the Thomas W. Doig Chapter of Credit Unions, a position he has held since 2001. Bratsakis is senior vice president of Baxter CU in Vernon Hills. Geraldine Burek, CEO of South Division CU, Evergreen Park, was elected as vice chairman. Burek has served as ICUL director since 2003, representing the Chicago Metro Chapter of Credit Unions. She also was chairman of the annual convention and legislative committees, served on the executive committee, and on the Credit Union Political Action Council (CUPAC) board for 21 years. She began serving on the ICU Foundation board last year. Burek will also serve as LSC vice chairman. Pete Paulson, CEO of Corporate America Family CU, Elgin, was elected as secretary/ treasurer. He has served as ICUL director representing
Click to view larger image New officers and board members of the Illinois Credit Union Foundation board of directors include: in front, sitting from left: Thomas Pierce, foundation secretary/treasurer and CEO, Canals & Trails CU, Lockport; Greg Worthen, foundation chairman and vice president, Olin Community CU, Bethalto; and David Mooney, Foundation vice chairman and CEO, Alliant CU, Chicago. In back, standing from left: Geraldine Burek, CEO, South Division CU, Evergreen Park; Ed Jacob, CEO, North Side Community FCU, Chicago; Peggy Cummins, CEO, Three Rivers Community CU, Mt. Carmel; and Michael Lee, president, Midwest region, Members United Corporate FCU, Warrenville. (Photos provided by the Illinois Credit Union League)
the Fox Valley Chapter of Credit Unions since 2003. Paulson also participated on the annual convention and executive committees, and just completed chairing the legislative committee. He was also on the LSC board for four years. Also as part of the convention, the ICU Foundation held its annual meeting and elected new officers: Greg Worthen, vice president at Olin Community CU, Bethalto, as foundation chairman; David Mooney, CEO, Alliant CU, Chicago, as vice chairman; and Tom Pierce, CEO, Canals & Trails CU, Lockport, as secretary/treasurer. Current board members include: Burek; Peggy Cummins, CEO, Three Rivers Community CU, Mt. Carmel; John Fiore, CEO, Motorola ECU, Schaumburg; Janet Francoeur, CEO, Riverside Community CU, Kankakee; Ed Jacob, CEO, North Side Community FCU, Chicago; Michael Lee, president, Midwest region, Members United Corporate FCU, Warrenville; and Thomas Pierce, CEO, Canals & Trails CU, Lockport.

CU in Oregon tells how it increased loans 18

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EUGENE, Ore. (4/30/10)--Oregon Community CU, based in Eugene, saw an 18% increase in loan results, year over year, for first quarter 2010. It booked more than $53 million in loans, compared with $44 million in first quarter 2009. "We decided early on that we were dedicated to helping the community weather the economic turbulence we feel today," said Mandy Jones, CEO. "Our members are getting a leg up on their financial lives, and we are proud to help them achieve their financial dreams, even when the economy is trying to convince them otherwise." Jones challenged her senior managers to build a comprehensive strategy--from the ground up--aimed at generating earnings, improving net worth and increasing loan volume. It includes:
* Setting aggressive--even "big, hairy, audacious"--goals for staff; * Providing comprehensive sales and product/service training so staff are knowledgeable and confident; * Measuring progress constantly and providing immediate feedback; and * Providing incentives, motivation and financially rewarding staff; * Constantly monitoring the market and pricing competitively; and * Making the strategy fun and celebrating success.
To accomplish this they developed an in-house training program to equip staff with the skills to become a member-centric sales force. "In 2010, we wanted to see what would happen if we implemented our own training program, designed by the employees for the employees," said Cheryl Collins, development manager at the credit union. A cross-functional team, called 360 Degree Training: Excelling in a Sales Culture, taught staff that the difference between good service and exceptional service is sales, but it doesn't have to feel like sales. "Our goal with sales training is to develop staff into trusted financial advisors." It set a goal to double loan growth in 2010. Each branch, the member contact center, and lending staff had specific goals. "At first, some staff wondered what we were thinking when we told them our goals," said Jerry Liudahl, vice president for retail operations and lending. "But now, the engagement and excitement throughout the organization is absolutely palpable."

Illinois league elects directors

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NAPERVILLE, Ill. (4/30/10)--Two directors were sworn in to the Illinois Credit Union League (ICUL) board of directors Thursday at the league's annual Delegates' Meeting by Chairman John Bratsakis.
Illinois Credit Union League Chairman John Bratsakis, right, swears in two new league board directors--Alan Meyer, left, executive vice president and chief operating officer of Olin Community CU, and Dennis Schaefer, center, CEO of SIU CU--during the league's annual Delegates' Meeting Thursday. (Photo provided by the Illinois Credit Union League).
New directors elected were Alan Meyer, executive vice president and chief operating officer of Olin Community CU, Bethalto, Ill., and Dennis Schaefer, CEO of SIU CU, Carbondale. Meyer was elected at the Jan. 26 meeting of the George G. Burnett Chapter, and Schaefer was elected at the Jan. 28 meeting of the Egyptian Chapter. Their terms began immediately after the meeting. The Delegates' Meeting was one of a series of meetings and educational sessions just getting underway as part of ICUL's 80th Annual Convention, Wednesday through Saturday at the Chicago Hilton. Wednesday's agenda included an exhibit hall grand opening with more than 80 vendors attending. "Surf's Up: Catch a New Wave" is the conference theme. Nearly 690 individuals from more than 120 credit unions are attending.

CUs help Mississippi tornado victims

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JACKSON, Miss. (4/30/10)--Credit unions in Mississippi are pitching in to help communities after a tornado plowed through the state last weekend, killing 12 and damaging hundreds of homes. No credit unions have reported damages to the Mississippi Credit Union Association (MSCUA) after the tornado hit, said Amy Manley, league corporate relations manager. BenchSmart FCU, Yazoo City--a community hit hardest by the storm--is providing care baskets with personal items to be delivered to affected individuals. Dawn Parks, BenchSmart president/CEO, used the MSCUA listserv to ask credit unions in the state to help, said Mansel Guerry, MS Employees FCU president/CEO, Jackson. Guerry said his credit union donated to the effort, and donations are still pouring in. As of press time, donations were pushing $10,000, he told News Now. “I called Dawn yesterday to check on her,” Guerry said. “She had just stepped out from buying items for people. She went out and bought items without knowing what people would donate [to cover the costs]. She took it upon herself to help.” The tornado hit Yazoo City on Saturday around noon, Guerry said. While Benchsmart was not open during the storm--the credit union is not open on Saturdays, Guerry said--and did not suffer any damages, many community members suffered damage. “It was a pretty rough hit,” he said. “The governor went up there after the storm and likened the damage to Hurricane Katrina.” Guerry said his area, which is about 45 miles from Yazoo City, was under a tornado watch for much of Saturday. “We were constantly monitoring the weather,” he said. “It was pretty touch-and-go, and everyone was on alert.” Guerry said the efforts credit unions are making to help people in the area exemplifies the philosophy of the credit union movement. Messages exchanged yesterday on the listserv questioned whether local banks would send each other messages to try and raise money to help tornado victims--but “I doubt it,” Guerry said. As for credit unions, “we are there to support each other,” he said. “That’s the real takeaway from this.” News Now contacted Parks for a comment. She was out delivering care baskets to the community.

Westerra member in Afghanistan donates 2K for scholarships

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DENVER (4/30/10)--While Westerra CU again is offering graduating high school seniors $1,000 scholarships to attend a technical school, college or university, two extra scholarships--for a total of 17--were added this year due to the generosity of Westerra member Steve Willey, who resides overseas. When he learned about the Westerra college scholarship program, Willey sent an e-mail to the credit union from his base in Afghanistan: “Is there any way I can contribute to the scholarship fund?” he wrote. “It is a bad economy now, I know. My brother lost his job, my sister’s employer is bankrupt, and my other sister is working two part-time jobs--but education for the next generation is so important that I would like to help where I can. How can I donate [$2,000] to that fund?” The 17 scholarship winners will be announced in May by the $1.18 billion asset, Denver-based credit union.

La. league Bill would repeal CU exemptions

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BATON ROUGE, La. (4/30/10)--The Louisiana Credit Union League was informed that proposed legislation targeting credit unions would be introduced in the state Senate. If Senate Bill 224 becomes law, it would repeal the credit union exemptions from the Louisiana Consumer Credit Law and the Louisiana Motor Vehicle Sales Finance Act. However, the league and credit unions met with State Sen. Ann Duplessis (D-2) in Baton Rouge to discuss S.B. 224 and succeeded in getting her to agree not to schedule the bill for a hearing without further discussion with the league. Anne Cochran, league president/CEO; Connie Major, league executive vice president; and Jeff Conrad, president/CEO, Pelican State CU, Baton Rouge, attended the meeting to discuss how S.B. 224 would affect Louisiana credit unions (eNews April 28). The group shared information about the credit union philosophy and the unique service and programs that credit unions have to help improve the financial well-being of Louisiana consumers. Also, they discussed ways and opportunities to advance financial literacy and small-business lending in the state. The league expects to maintain regular discussions with the senator to advance topics of mutual interest. The Louisiana Motor Vehicle Sales Finance Act provides for maximum interest rates, maximum fees for certain items--such as documentation, notary, tag/title convenience fees, transfer fees, and attorney’s fees--and regulates credit life and other insurance related to motor vehicle loans. The Louisiana Consumer Credit Law provides for maximum finance charges of consumer loans and credit cards, and maximum fees for certain items--such as origination, documentation, notary, delinquency charges and attorney’s fees. It also prohibits certain collections practices and limits creditor contacts after a consumer instructs the creditor to cease further contacts about indebtedness. The consumer credit law also regulates the release of consumer information by creditors and requires credit card issuers to register intent to solicit students prior to soliciting on a college campus. The two laws regulate matters that are specifically not preempted by National Credit Union Administration Regulation 701.21, said the league. Therefore, all Louisiana credit unions would have needed to perform a comprehensive review of their loan documentation to ensure compliance, and draft new documentation that complies with the new laws.

Silver State Schools CU to close five branches

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LAS VEGAS (4/30/10)--Silver State Schools CU, Las Vegas, will close five of its branches effective June 4, the credit union announced on its website. The branches will be closed as part of the credit union’s plan to save money. Affected branches include:
* Mae Anne, Reno; * Damonte, Reno; * Clayton, North Las Vegas; * Desert Foothills, Las Vegas; and *Anthem, Henderson.
The credit union also said it has implemented a new e-Checking program that encourages members to “go green” while saving costs for the credit union. Silver State Schools CU also plans to implement a new credit card program. The credit union is operating and working with the Nevada Financial Institutions Division under a consent order and following a plan that has been developed and put in place to benefit the credit union’s financial health. In 2008, the credit union reported a record $10 million net income from operations but set aside $10 million in reserves for potential loan losses. During 2009, as property values continued to decline and record numbers of members experienced reduced income, the credit union recorded $8.1 million net income from operations. However, it set aside $59 million to cover current and potential future loan losses (News Now Feb. 22). In February, the credit union received a capital infusion to bolster its general reserves from its private share insurer, American Share Insurance.

N.Y.s IMore ReportI outlines CUs outreach efforts

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ALBANY, N.Y. (4/30/10)--The Credit Union Association of New York has released its 2009 More Report, an annual compilation of New York credit unions’ outreach efforts. The report, which stands for Member Outreach and Reinvestment Endeavor, is shared with lawmakers to offer evidence of how the state’s credit unions are fulfilling their mission. Stories in this year’s report note:
* Genesee Co-op FCU’s Family Aid loan program for members whose relatives are overseas or living as refugees. Members use the loans to assist their families with medical expenses, education costs and transportation out of refugee camps. Genesee, Rochester, N.Y., provided more than 100 loans totaling $267,000. * Jamestown (N.Y.) Area Community FCU’s New York Gear Up program, which helps at-risk students in junior high and high school attend college. Credit union employees mentor the students and encourage them to stay in school and pursue a college education. * ServU FCU’s Volunteer Income Tax Assistance (VITA) site, which the credit union has offered for six years. Employees volunteered their time to provide free tax preparation to the public. The Painted Post, N.Y.-based credit union completed 315 filings with combined state and federal returns totaling more than $560,000 in 2009.
For more information, use the link.

Flight to safety results in growth for Ohio CUs

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COLUMBUS, Ohio (4/30/10)--Consumers' flight to safety shows up in the 2009 statistics for Ohio's credit unions. The state's credit unions are well-capitalized at 11.7% of assets--higher than banks and thrifts around the state and nationally, said the Ohio Credit Union Quarterly Performance Summary. Nearly all the economic indicators for financial institutions saw growth. Loans and deposits increased more than $600 million and $1.8 billion respectively from Dec. 31, 2008 to Dec. 31, 2009. Membership increased nearly 30,000 for that time. "2009 was a banner year for our credit unions, and every indication is that this growth will continue," said Paul Mercer, president of the Ohio Credit Union League. "Many factors contributed to our success, but the anti-banking sentiment among consumers and their eagerness to invest in a community-based financial institution were important drivers," he said. "Our credit unions also impressed upon new and existing members the empowerment that comes with becoming an owner of your institution, not just a customer," Mercer added. Credit unions in the state totaled $12.4 billion in loans at year-end 2009. Auto lending continued to be a driving force behind loan growth, with market share growing from 12.4% in December. 2008 to 17.1% in December 2009. The credit unions also saw an 11.2% increase in member business lending for that period. A number of credit union members took advantage of historic low 30-year fixed-rate mortgage rates to refinance their homes. First mortgage originations in 2009 in Ohio totaled $1.66 billion versus $1.1 billion in 2008--an increase of 51.3%. First mortgages outstanding grew 4.2% to $23.95 billion, all despite a continued weaker than usual housing market, said the league. Total delinquency rose to 1.42% in December, up 0.10% during the 12-month period. However, Ohio credit unions remain below the Ohio bank delinquency average of 3.26%, the league noted. The average Ohio credit union has 6,748 members, $51.82 million in assets, and $31.73 million in loans. Ohio credit unions employ more than 6,800 Ohioans and contribute nearly $140 million in compensation to employees annually, according to the most recent quarterly financial report.

Computer consultant sentenced stole 2M from four CUs

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PROVO, Utah (4/30/10)--A Provo, Utah, consultant who worked as a third-party consultant for a computer systems company was sentenced Tuesday to nearly five years in a federal prison for stealing nearly $2 million from four credit unions. Zeldon Thomas Morris, 42, who owned a controlling interest in Provo-based Lee & Morris, pleaded not guilty to one count of bank fraud. He was charged with the fraud based on using passwords provided to him in his computer system consultant position to access the credit unions' accounts (Daily Herald April 28 and April 8 and Deseret News April 10). The credit unions are Family First FCU and Alpine CU, both of Orem; Deseret First CU, Salt Lake City; and First CU. Morris was hired as an outside contractor by the Orem office of Open Solutions Inc. His business partner discovered discrepancies in the Lee & Morris accounts in October. 2008, said Daily Herald. Morris also will be on supervised release for five years after serving his term, and he was ordered to forfeit property and pay $1.8 million in restitution.

Bloomberg Maloney help N.Y. celebrate new CDCU

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NEW YORK (4/30/10)--The East River Development Alliance (ERDA) Monday celebrated the grand opening of the ERDA FCU, a community development credit union (CDCU) that will serve residents of New York City's Long Island City, Astoria, Woodside and Sunnyside communities.
Cliff Rosenthal, president/CEO of the National Federation of Community Development Credit Unions, speaks at the grand opening of East River Development Alliance FCU, New York.
The credit union will focus much of its work on the Woodside, Ravenswood, Astoria and Queensbridge Houses, which make up the primary membership of the new CDCU. The new credit union is one of only two new federal charters granted in 2009--both CDCUs. The event drew more than 500 attendees. Cliff Rosenthal, president/CEO of the National Federation of Community Development Credit Unions, which assisted ERDA organizers for nearly five years, joined keynote speakers including:
* U.S. Rep. Carolyn Maloney (D-N.Y.); * New York City Mayor Michael R. Bloomberg; * New York City Comptroller John Liu; * New York State Assembly Member Catherine Nolan; * New York City Council Speaker Christine Quinn; * New York City Council Members Jimmy VanBramer and Peter Vallone Jr.; and * New York City Housing Authority (NYCHA) Chairman John Rhea.
"The federation has been working with ERDA credit union organizers since their start, nearly five years ago," said Rosenthal. He noted
New York City Mayor Michael R. Bloomberg helped celebrate the grand opening Monday of the East River Development Alliance FCU, which will serve residents of several New York City neighborhoods.
that communities interested in organizing a CDCU "can learn a lot from ERDA's experience." In a neighborhood where three in 10 residents lack bank accounts and most residents use check cashers, the ERDA FCU seeks to revolutionize the way public housing residents manage their money, build capital and achieve their financial goals, the federation said. ERDA Founder and President Bishop Mitchell G. Taylor, explained: "ERDA is dedicated to making public housing developments places of great opportunity, places which house a positive vision of the future for the people who live here. The establishment of this financial cooperative, owned by residents, makes resident empowerment and ownership real. The opening of the ERDA FCU marks the next phase of ERDA's work for change, and presents a model for every public housing neighborhood in New York City."
Carmen Simon (left), CEO of East River Development Alliance FCU, New York, and Bishop Mitchell Taylor (standing) help open a credit union account for New York City Housing Authority Chairman John Rhea. (Photos provided by the National Federation of Community Development Credit Unions)
Bloomberg echoed the need for more community-controlled financial institutions to serve the city's unbanked. "Nearly 50,000 Queens households--many in public housing--don't have bank accounts, and one of the major reasons is a lack of access to local credit unions," Bloomberg explained. "The East River Development Alliance is committed to helping public housing residents in Long Island City move up the economic ladder, and its new federal credit union is a major step forward." Maloney who represents Long Island City, said: "Opening a credit union opens the door to financial security--and financial security brings hope, stability and wealth to a community. This is great news for western Queens and the people who live and work here." The ERDA FCU has secured 1,000 pledges to open accounts from community residents, and $1.1 million in non-member deposit pledges, many from local credit unions, including United Nations FCU, the federation, Alternatives FCU, Bethex FCU, Consumers FCU, Lower East Side People's FCU and Amalgamated Bank.

The Tennessee CU to open student branch name academy

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NASHVILLE, Tenn. (4/29/10)--In an unprecedented move, The Tennessee Credit Union will open a branch inside Antioch High School, Nashville, Tenn., and will serve as an official sponsor of the school's academy of business and finance. The credit union will open in the fall and be run by students enrolled in The Tennessee Credit Union Academy of Business and Finance, which is part of the school's Academy of Business and Hospitality--one of three career academies at the school. Career academies are similar to college majors, where students are grouped by subject interest. It is the first time in the history of Nashville's public school system that a local business has earned the rights to be an official, named sponsor of a school program, said the credit union and Metropolitan Nashville Public Schools (MNPS) in a joint release. According to local media, the credit union paid $150,000 for the right to name the program. The school board approved a two-year contract Tuesday night. The credit union will train Antioch students to run the fully functioning branch, which will operate during school lunch hours, 10:33 a.m. to 12:28 p.m. The branch will offer deposit and withdrawal transactions for checking and savings accounts and take loan payments, although it will not make loans. Students will get lessons in business ethics, corporate values and financial literacy. Principal Aimee Wyatt and credit union CEO Michael Martin have worked toward the partnership for several months to provide students and staff exposure to "real world" experiences and practical application of course material. "Since our beginning in 1950, The Tennessee Credit Union has been a supporter of public education," said Martin. "Our loyal members employed by MNPS have contributed greatly to our success. We see this opportunity to partner with an excellent school like Antioch as a way we can help promote financial literacy as well as help to prepare students for a career in the field of personal finance." School administrators anticipate that more than 50 local businesses, organizations and post-secondary institutions will sign letters of intent to partner and support individual school academies during an Academy Partners signing event on May 5. The high school has planned and implemented a school redesign since 2006 when the district was awarded a $6.5 million smaller learning communities grant. It has a Freshman Academy and three primary academies, each with two areas of emphasis.

Moodys Canada CUs chipping at big banks market

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TORONTO (4/29/10)--Canada's credit unions are eroding the stranglehold held by the "Big Six" full-service banks in the retail banking market, and Moody's Investors Service says that trend will accelerate if the Canada's government allows credit unions to incorporate on a federal level. A proposal in the Canadian government's budget would allow legislation to amend the Bank Act so that Canada's 419 credit unions can build membership beyond their provinces to build national franchises (Dow Jones April 27). Currently they are limited to staying within their province, but many have formed alliances to build up their service offerings and infrastructure. Credit unions already have significant shares in certain areas, said Moody's analysts. In 2009, credit unions' market share included 16% of retail deposits, 19% of residential mortgages and 13% of Canada's automated clearing settlement system. The government's proposal could accelerate consolidation, but that trend has already been developing for most of the past decade, said Moody's.

Biz Kid kicks off fourth season rings NYSE closing bell

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NEW YORK, N.Y. (4/29/10)--The Emmy Award-winning Biz Kid$, the credit union-funded public television series that educates youth about finances, launched its fourth season by ringing the closing bell at the New York Stock Exchange (NYSE) Wednesday. The Biz Kid$ team, accompanied by credit unions, visited NYSE in celebration of National Financial Literacy Month.
Click to view larger imageStars from Biz Kid$ and credit unions ring the closing bell at the New York Stock Exchange Wednesday in celebration of National Financial Literacy Month and the launch of the fourth season of the popular credit union-funded public television series that educates youth about finances. (Photo provided by the Washington Credit Union League)
Bringing down the gavel were three of the show's young stars, Seattle natives Kaelon Horst, Alexander Oki and Austin Siedentopf; executive producers Jamie Hammond and Jeannine Glista; and Washington Credit Union League President/CEO John Annaloro, who represented the show's underwriters, America's Credit Unions. "This hit series has been such a success," said Annaloro. "Ringing the closing bell is just the latest recognition of Biz Kid$' importance and scope, as well as all the work and dedication that [is from] the credit union community." Glista said the new episodes, funded entirely by the credit union system, were some of the best and most timely the series has made. Also attending were:
* Mark S. Brantley, chairman, Municipal CU, New York, representing the African American Credit Union Coalition; * Clifford Rosenthal, president/CEO of the National Federation of Community Development Credit Unions; * Kent Buckham, director of the National Credit Union Administration's Office of Consumer Protection; and * Ray Harris, vice president of Morgan Stanley Smith Barney.
Biz Kid$ was involved in a similar event last April at the NYSE's cross-street rival, NASDAQ. Other events tied with Biz Kid$' efforts to highlight financial literacy:
* The show is partnering with New York PBS station WNET to demonstrate the show's curriculum and collateral materials to New York City teachers. * Young entrepreneurs profiled on the show will teach the city's youths in a separate workshop about how to start business ventures and the importance of financial literacy. * The Washington Credit Union Foundation is instigating a new donation recognition program where contributors receive thank you gifts, tiered to the level of giving. Gifts include signed thank you letters, DVDs, t-shirts, studio tours and a chance to have a child appear on an episode of Biz Kid$.
To watch a video of the group ringing the bell, use the resource link.

Governor to keynote Illinois league convention

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NAPERVILLE, Ill. (4/29/10)--Nearly 690 executives representing more than 120 credit unions are expected to attend the Illinois Credit Union League’s (ICUL) 80th Annual Convention starting today. The event runs through Saturday in Chicago. With a Hawaiian theme of “Surf’s Up: Catch a New Wave,” the convention will begin today with the Delegates’ Meeting. The meeting will include the swearing in of two new ICUL directors. The Exhibit Hall Grand Opening, with more than 80 vendors, will follow. This year, ICUL will host two keynote speakers: Illinois Gov. Patrick Quinn, a staunch supporter of Illinois credit unions, and National Credit Union Administration Chairman Deborah Matz. The convention also includes 18 educational sessions. A closing session on Saturday morning, titled “Moving Ideas to Action,” will feature credit union speaker and president of St. Louis Community CU, Patrick Adams.

Mo. House passes resolution supporting highway CUs

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ST. LOUIS (4/29/10)--The Missouri House of Representatives unanimously voted in support of Missouri’s highway credit unions this week, according to the Missouri Credit Union Association (MCUA). The credit unions were in danger of losing their offices with the state transportation office. The House voted 157-0 in favor of the House Concurrent Resolution, which states that 10 highway credit unions should remain in Missouri Department of Transportation (MoDOT) facilities despite the department’s intent to sever ties with the credit unions. The measure was sponsored by Rep. Mike Cunningham (R-145), and co-sponsored by 35 House members (The Missouri difference April 28). On Jan. 21, MoDOT told credit unions that they must vacate their premises by Sept. 30, and they would no longer be able to process payroll and benefits through MoDOT after that date. The date for credit unions to leave MoDOT facilities has been extended to December 2012. During debate Monday, House members spoke in favor of credit unions. “This issue came through my committee, and I urge the body to vote in support of it,” said State Rep. Sharon Pace (D-70). “These credit unions have been serving their members since the 1950s.” The unanimous passage sends a strong message to MoDOT and clearly demonstrates the support of lawmakers for credit unions on the issue, said Rosie Holub, MCUA president/CEO. The resolution now goes to the Senate. The House vote follows months of communication between MCUA and the legislature about the issue.

Papua New Guinea is WOCCUs newest member

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MADISON, Wis. (4/29/10)--World Council of Credit Unions’ (WOCCU) board of directors accepted--with a unanimous vote--the Federation of Savings and Loan Societies (FESALOS) in Papua New Guinea as a direct WOCCU member. The new membership, voted on by the board at its April meeting, is effective immediately. “We are delighted and thankful that the WOCCU board has accepted the Papua New Guinea Federation of Savings and Loan Societies Ltd. as a direct member,” said Michael Koisen, FESALOS president and board chair. “WOCCU’s continued support of Papua New Guinea and the Pacific is indeed acknowledged.” FESALOS, founded in 1962, today represents all 20 of the country’s credit unions--still referred to locally as savings and loan societies. The 20 institutions serve 250,000 members and hold $249 million in total assets. The federation provides advocacy, information, technical assistance, management information systems support and training services to its credit unions. Dave Grace, WOCCU vice president of association services, noted WOCCU already has “long, historical connections” with FESALOS. Over the past several years, WOCCU has assisted FESALOS in reviewing legislation for Papua New Guinea’s credit unions, and the federation sees its membership with WOCCU as critical to maintaining a strong connection with the international credit union movement, said WOCCU. FESALOS has been an active participant in WOCCU’s Pacific Technical Congress program in past years and has maintained a long-time partnership with Credit Union Foundation Australia (CUFA). This year, FESALOS and CUFA will co-host WOCCU’s Pacific Technical Congress, scheduled for Sept. 13-Sept. 17 in Papua New Guinea.

CU System briefs (04/28/2010)

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* COLORADO SPRINGS, Colo. (4/29/10)--Ent FCU, based in Colorado Springs, has awarded 11 regional organizations its Youth Endowment Series (YES) program grants for 2010. The program, which was introduced in 2000, directs specific support to organizations benefiting children and young people in the Pikes Peak region and Pueblo, Denver and Weld Counties. So far, the program has provided nearly $475,000 to agencies servicing education, health care, and cultural needs, among other services. Sixty organizations applied for the grants. Among the criteria: past and projected benefit to the community, potential ability to use the grant to obtain additional funds, and degree of community support ... * FLINT, Mich. (4/29/10)--Six lawmakers and 25 representatives of credit unions attended the Flint (Mich.) Chapter's legislative breakfast at Financial Plus FCU April 19 (Michigan Monitor April 26). Pictured is State Rep. Lee Gonzalez (D-Flint Township) addressing the group. Others attending were State Sens. Deb Cherry (D-Burton) and John Gleason (D-Flushing); Gleason's district representative Berton Brown; and State Reps. Rick Hammel (D-Flushing), Jim Slezak (D-Davison) and Woodrow Stanley(D-Flint). They discussed issues such as government restructuring, the state budget, taxes, payroll debit card legislation, foreclosure consultant scams, notary requirement legislation, road funding, texting while driving and the 2010 elections. (Photo provided by the Michigan Credit Union League) ... * LOUISVILLE, Ky. (4/29/10)--Kentucky credit unions have been busy with advocacy efforts, with three meetings with legislators, according to the Kentucky Credit Union League's newsletter By The Way (April 27). In Frankfort, Members Choice CU CEO Pat Ferry and volunteer Johnny Abbott visited with House Banking and Insurance Committee Vice-Chair Kevin Sinnette (D-100), a credit union advocate who has pledged his support on credit union issues. In Elizabethtown, Fort Knox FCU CEO Bill Rissel and Senior Vice President of Branch Operations Ray Springsteen, and Kentucky Credit Union League Director of Governmental Affairs Debbie Painter attended an event for U.S. Rep. Brett Guthrie, a supporter of credit union issues. (Pictured are, from left, Rissel, Guthrie, Painter and Springsteen.) Also, Dr. Rand Paul, a candidate for the U.S. Senate seat held by retiring Sen. Jim Bunning, visited Kentucky Telco FCU. Paul said he supports the credit union tax exemption and expressed support for increasing the member business lending cap. (Photo provided by the Kentucky Credit Union League) ...

Vermont credit card acceptance bill passes House committee

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MONTPELIER, Vt. (4/29/10)--The Vermont Legislature’s House Commerce Committee voted out a version of a credit card bill that could endanger card programs at Vermont credit unions. The bill, S. 138, was voted out of an 11-member committee Tuesday, 10-1-0, according to the Association of Vermont Credit Unions (AVCU). The bill will go to the House floor for initial reading later this week, and then be sent back to the Senate Judiciary Committee for review. If senators support the House version, the bill will be sent to the Senate floor for approval. If not, it will go to a conference committee. “We’ve been working very hard for many weeks to minimize several negative unintended consequences of S. 138 as introduced in the Senate,” said AVCU President/CEO Joe Bergeron. “Originally S.138 was mostly a consumer protection effort, but just before the legislature’s crossover date, the Senate Judiciary Committee removed the consumer protection provisions, and replaced them with ‘merchant protection’ provisions proposed by grocer and retailer associations. “We would have preferred no bill at all, but given deep support among legislators for laws to address claims by small business, complaints of increasing card processing costs and so-called abuses by credit card companies, there has been little doubt that some kind of legislation would ultimately pass. Our challenge, and that of banks, credit card networks, and processors, has been to insure against unintended ramifications--particularly for credit unions, from our perspective,” Bergeron said in an update to Vermont credit union CEOs Tuesday night. He also noted some key changes made in the House bill:
* Verbiage that AVCU believes would have allowed surcharging by merchants for use of plastic has been removed/altered. Although the wording allows merchants to provide discounts, or other benefits for other forms of payment, AVCU was told by the networks this was already allowed. * Merchants have been limited to setting an allowable minimum plastic card transaction of no more than $10, which many small merchants already do in technical violation of network rules. Previously, merchants had sought a limitless minimum of their choosing. The bill requires merchants to disclose the minimum prominently at the point of sale. * Although merchants will not be required to accept plastic at all of their locations, this was already allowed under network regulations. * Statutory penalties for violations by networks of provisions regarding locations, minimums and discounts, have been limited to offenses in those areas only, as opposed to prior language that opened the door for penalties against other possible violations. * A confusing definition of “processor” that could have unintentionally included credit union card processors--as opposed to merchant processors or credit unions as processors--has been eliminated. * The bill’s provisions are available only to merchants with a physical presence in Vermont.

Mica D.C. mayor highlight unveiling of Bank on DC program

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WASHINGTON (4/29/10)--Six District of Columbia credit unions are taking a central role in a program aimed at opening 10,000 new accounts and establishing 10,000 direct deposits for D.C. residents by the end of 2010.
Click to view larger image From left: Credit Union National Association President/CEO Dan Mica, Maryland and District of Columbia Credit Union Association President/CEO Mike Beall and Fiona Greig, D.C. Mayor Adrian Fenty's Bank on DC program director. Also speaking were Patricia Ellis, second from right in background, HEW FCU chair, and Fenty (in hat). Six credit unions have a central role in the program. (Photo provided by CUNA)
The program was launched Wednesday at Credit Union House on Capitol Hill. D.C. Mayor Adrian Fenty and Credit Union National Association (CUNA) President/CEO Dan Mica attended the event. In opening the new accounts and direct deposits, according to the Maryland and District of Columbia Credit Union Association (MDDCCUA), the credit unions are offering low or no-fee savings and checking accounts. Further, the accounts are being offered to all current members of the credit unions. The six credit unions are:
* Agriculture FCU; * District Government Employees FCU; * Signal Financial FCU; * Treasury FCU; * DVA FCU; and * HEW FCU.
HEW FCU has been honored as a leader in the program, earning a “platinum” designation. Other participants in the program--which is billed as the “first comprehensive program in the District of Columbia to serve the ‘unbanked,’ those who live without access to mainstream financial institutions and those forced to rely on expensive check-cashing services"--include national and local banks and thrifts. At Wednesday’s launch, CUNA’s Mica noted that the program is natural fit for credit unions, whose checking accounts--by and large (80%)--provide one free account with no minimum balance requirement and no maintenance or activity fees. Mica was joined at the launch by Mayor Fenty and U.S. Treasury Assistant Secretary Michael Barr. “Credit unions are a dominant force in area consumer finance with more than 60 credit unions located in the District of Columbia, about 40% of D.C. residents owning accounts at a local credit union and 20% calling a credit union their primary financial institution,” said MDDCCUA President/CEO Mike Beall. “One in five auto loans in the area is made through a credit union, and credit unions experienced a 20% increase in mortgage originations in the D.C. area in 2009. Clearly, credit unions have been the open outlet of safe, reasonable credit to DC consumers in spite of the economic downturn,” he said.

N.Y. CUs to hear baseballs Johnny Bench at convention

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ALBANY, N.Y. (4/29/10)--Major League Baseball great Johnny “Catcher of the Century” Bench will give the keynote address at the Credit Union Association of New York’s Annual Business Meeting and Convention, June 8 in Cooperstown, N.Y. As a Baseball Hall of Famer, broadcaster, author, philanthropist and Emmy Award winner, Bench is a symbol of winning through hard work and teamwork, said the association. He will offer his strategies for success--drawing parallels between the worlds of sports, entertainment and civic involvement. Bench signed a limited number of baseballs to be sold during the convention’s vendor expo. The proceeds will benefit CUPAC, the association’s Political Action Committee, which provides non-partisan contributions to pro-credit union New York State and local political candidates. Bench made the Cincinnati Reds’ roster for the 1968 season and stayed with the team until his retirement. Bench was a 14-time All-Star and 10-time Golden Glove recipient. He holds the major league record for home runs by a catcher (327) and set an endurance record by catching 100 or more games for 13 consecutive seasons. In 1989, he was elected to the Baseball Hall of Fame with the third highest percentage of total votes cast.

NCUF grant to help Oregon CUs attract young adults

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BEAVERTON, Ore. (4/29/10)--A grant from the National Credit Union Foundation’s REAL Solutions program will allow the Credit Union Association of Oregon (CUAO) to partner with the Filene Research Institute to reach young adults, CUAO announced this week. The partnership with Filene will help Oregon credit unions create a blueprint to members of the millennial generation. Filene’s Young Adult Outreach Initiative will consist of a combination of webinars and workshops throughout 2010. Credit unions will learn about the tools and mindset needed to reach the market. The program is free to Oregon’s 21 REAL Solutions credit unions. REAL Solutions, or “Relevant, Effective, Asset-building, Loyalty-producing” Solutions, works through state leagues to help credit unions offer services that are successful for people of modest means and low-wealth.

MnCUN professional volunteer of year recognized

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BROOKLYN PARK, Minn. (4/29/10)--The Minnesota Credit Union Network (MnCUN) Saturday announced the recipients of its two most prestigious awards. The Outstanding Credit Union Volunteer of the Year and the Outstanding Credit Union Professional of the Year Awards honor two individuals for demonstrated excellence in the movement. These and other awards were presented at the MnCUN 2010 Annual Meeting and Convention during the weekend. The Volunteer of the Year Award honoree is Jim Snyder of City & County CU (CCCU), a volunteer at CCCU for nearly 20 years. Snyder served as board chair and a member of the supervisory committee. He championed numerous initiatives, such as helping to develop numerous five-year plans and the 25-year vision of the credit union.
From left, MnCUN President Mark Cummins and Jim Snyder, City & County CU, Outstanding Volunteer of the Year.
From left: MnCUN President Mark Cummins and Lynn Kothe, president/CEO, North Memorial FCU, Outstanding Professional of the Year. (Photos provided by the Minnesota Credit Union Network)
MnCUN’s Professional of the Year Award is Lynn Kothe, president of North Memorial FCU (NMFCU), Robbinsdale. Since 1978, Kothe has grown the credit union to $32 million from $369,000 in assets. She has been involved in politics at the local, state and national levels. In 2007, she provided testimony that helped passage of Minnesota’s Plastic Card Security Act. Kothe represents credit unions on the Minnesota Item Processing Board and as the vice chair of the Minnesota Credit Union Foundation.

Ohios march across state nets 110k for hospitals

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COLUMBUS, Ohio (4/29/10)--
Click to view larger imageCredit union leaders presented a check for $110,000 to benefit Ohio children’s hospitals. Pictured are, from left: Kristina Hurlburt, Standard Register FCU, Dayton; Jennifer Ferguson, Bay Area CU, Oregon; Brian Brunsman, Tracy Brunsman and their children; and Mike Cronin, head basketball coach at the University of Cincinnati. (Photo provided by the Ohio Credit Union League)
Credit union leaders from across Ohio presented $110,000 to Children’s Miracle Network as a result of their annual statewide fundraising to benefit children’s hospitals. The Brunsman family, ambassadors for the Cincinnati Children’s Hospital, accept the check. Two of the Brunsman children have been treated at the hospital--one for cerebral palsy and the other for cancer. Spearheaded by the Ohio Credit Union League’s Credit Unions for Kids committee, the annual Ohio Credit Unions: Marching Miles for Miracle Kids walk-a-thon raises funds for the eight children’s hospitals in Ohio. Ohio credit unions have raised more than $370,000 since the event’s inception four years ago. The march kicked off in Dublin March 28 and concluded in Cincinnati April 15 at the Ohio league’s ZENITH10 annual meeting. University of Cincinnati head basketball coach Mike Cronin welcomed the final leg of marchers.

Members United Corp. delays 1Q financials to end of May

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WARRENVILLE, Ill. (4/28/10)--Full first quarter 2010 financial results for Members United Corporate FCU have been delayed another month, according to a portfolio update the corporate posted on its website. The corporate is now targeting the end of May to release audited financial statements. The $9.3 billion asset corporate said the delay is prompted by a March 25 announcement of an organizational restructuring by monoline insurer Ambac. The restructuring means Members United, like several other corporates, must revisit its Other Than Temporary Impairment (OTTI) estimates on bonds insured by Ambac. Ambac ceased payment of claims as of March 25 per an order by the Wisconsin Office of the Commissioner of Insurance. Original estimates indicated Ambac was expected to pay 80% on claims; however, the restructuring announcement indicated the insurer would pay 25% on claims. Members United said it has more than $300 million total holdings (based on a book value) wrapped with Ambac. The full financial report was to be released on Friday. "We are now targeting the end of May 2010 to release the audited statements," said the portfolio update. The corporate expects to record additional OTTI losses once McGladrey and Pullen completes its review of the year-end 2009 estimate recorded as of Dec. 31, including the final determination regarding Ambac support. The losses are expected to result in a retained deficit and the corporate will be required to deplete membership capital shares in accordance with federal regulator's rules related to Paid-in Capital and Membership Capital. "At this time, Members United believes that existing capital in the amount of $151 million will be sufficient to absorb losses that will arise from the OTTI review," said the update on the website. In lieu of providing the full financial results, Members United provided these financial highlights:
* Core net income year-to-date, excluding the OTTI loss estimates, totaled $3 million, compared with $2.9 million for the same period in 2009; * Operating expenses year-to-date were $2.2 million less that the previous year; * Liquidity is adequate as cash and cash equivalents totaled $4 billion; and * Capital totaled $151 million prior to any OTTI charges that may result from the review underway.

CUs a topic on AOLs IWalletpopI

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NEW YORK (4/28/10)--AOL's Walletpop Tuesday featured an article that tells why credit unions are "the good guys" and banks aren't, and directs readers to Credit Union National Association's (CUNA) website as the key source to find out about credit unions. The article, "Should You Join a Credit Union? Here's What You Need to Know," was written by Geoff Williams, co-author of Living Well With Bad Credit. The article asked the question "what makes credit unions so wonderful?" Credit unions are nonprofit, noted Glen Lazovick, senior vice president of business development and marketing, Mid-Atlantic FCU, Germantown, Md. Credit unions are local and therefore accountable, said consumer/credit union advocate Remar Sutton. They don't make "opportunity profits," he told the publication. And, "a bad credit union is better than the best bank," he said. Credit unions are more willing to work with members and offer back up options so members can avoid fees and penalties on nonsufficient funds, said Amy Stanton, assistant vice-president, Connex CU, North Haven, Conn. The number of ATMs available was seen as a major drawback, but credit unions are engaged in partnerships to create ATM networks, said Williams, who added that "it's pretty hard to come up with a significant drawback to banking at a credit union." The article also noted credit unions have federal insurance. And it suggested going to the CUNA website or a state league website to locate a credit union. The National Credit Union Administration site is a "good follow up" for those interested in checking a credit union's financial performance, it said. For the entire article, use the link.

CU System brief (04/27/2010)

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* CHANDLER, Ariz. (4/28/10)--First CU, based in Chandler, Ariz., has teamed up with the Arizona Rattlers football team, becoming the official 2010 "Kick-to-Win" sponsor. The promotion gives one Rattlers fan the opportunity to win $25,000 by kicking a field goal from the 25-yard line after the game's third quarter. First CU maintains a booth where fans can sign up. One entry form is randomly selected by the Rattlers at each of the team's eight home games. The eight chosen will kick for a chance to win the prize. First CU has more than $400 million in assets ...

South Carolina CUs elect smaller league board

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COLUMBIA, S.C. (4/28/10)--South Carolina credit unions elected seven directors to a new, downsized South Carolina Credit Union League (SCCUL) Board of Directors. The streamlined board replaces a 14-member group that existed for decades. Election results were announced at Saturday's business session of the SCCUL & Affiliates 2010 Annual Meeting in Myrtle Beach, S.C. New to the 2010-2011 SCCUL board of directors are Rick Hammond, president/CEO of S.C. State CU, Columbia, and Robert Harris, CEO of Health Facilities FCU, Florence. Re-elected from the 2009 body are:
* Faye Crocker, CEO of Greater Abbeville (S.C.) FCU; * Jerry Miller, president/CEO of Carolina Trust FCU, Myrtle Beach; * Ray Partain, chairman of the board for Anderson (S.C.) FCU; * Ed Templeton, president/CEO of SRP FCU, North Augusta; and * Linda Weatherford, vice president at SPC Cooperative CU, Hartsville.
New board officers are: Weatherford, chairman; Templeton, first vice chairman; Crocker, secretary; and Miller, treasurer. As former chairman, Scott Woods—president/CEO of SC FCU, Nothr Charleston--remains as an ex-officio board member, as is league President/CEO Steve Fowler. League-member credit unions had voted on Oct. 28 to reduce the SCCUL board size in light of changes in organizational complexity--including the spin-off of some services to a limited-liability corporation--and the slowly diminishing number of in-state credit unions. Of the 75 member credit unions eligible to vote for the new directors, 54 sent ballots to independent accounting firm Cantey, Tiller, Pierce, & Green LLP of Camden, S.C.

Dupaco pairs Twitter with digital billboard

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DUBUQUE, Iowa (4/28/10)--Dupaco Community CU forged new ground in promoting this year's Community-Wide Garage Sale in Dubuque, Iowa. It paired a Twitter feed with iSpot digital billboard technology, which caught the attention of the local media.
Click to view larger image Dupaco Community CU's digital billboard featured tweets by staff about a Community-Wide Garage Sale and drew local media attention as well. (Photo provided by Dupaco Community CU)
Dupaco co-sponsors the sale, which was in its 17th year and held Thursday through Saturday. To get more exposure for the event, credit union staff sent real-time message updates to display on Dubuque's LAMAR-owned digital billboards via Web and mobile phone texting. They highlighted featured items of registered garage sale locations. On Saturday morning the credit union and Radio Dubque staff used Twitter to announce registered garage sale locations where free prizes were awarded. Shoppers followed the announcements on Dupaco's Twitter page at www.twitter.com/dupaco. The Dubuque Telegraph Herald featured a story on the new technology's application to a traditional spring event. To access the article, use the link. Eastern Iowa's KCRG-TV news also reported the event, with Dupaco staff tweeting in front of the big digital billboard, on the Friday 6 p.m. and 10 p.m. and Saturday morning newscasts. The credit union featured a complete list of the 400 garage sale locations and full descriptions at www.dupaco.com/garagesale and inside the official garage sale directory published in the April 21 edition of The Dubuque Advertiser. "The purpose of the garage sale is to stimulate economic activity while promoting recycling and positive social interaction among area residents," said Dupaco President/CEO Bob Hoefer. "From a credit union perspective, we're about people, thrift and the community. That's also what the Community-Wide Garage Sale is about, and why it's a perfect fit for Dupaco." Hoefer noted that the credit union's use of modern technologies to help promote the event makes sense. "Using Twitter and iSpot technology is allowing Dupaco to bring the garage sale message to people in a new environment," he said. "Combining this technology with a more traditional promotional mix helps ensure our message about this worthwhile, community-focused event is received."

CUs a trusted source for fin ed--Minn. league CEO

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ST. PAUL, Minn. (4/28/10)--As many organizations celebrate Financial Literacy Month this April, Minnesota Credit Union Network (MnCUN) President/CEO Mark D. Cummins discussed credit unions’ involvement in financial education in the April 23 issue of Finance & Commerce newspaper. A regular columnist for the publication, Cummins cited that only three states include personal finance education as a high school graduation requirement, and he provided examples of how credit unions work in this arena. “The need for financial education is staggering,” Cummins wrote, using recent statistics from a HarrisInteractive 2009 poll on consumer financial literacy to make his case. Some of the statistics include:
* Forty-one percent of U.S. adults--more than 92 million Americans--gave themselves a grade of C, D, or F on their knowledge of personal finance. This number is highest among Generation Y adults at 47%; * Showing no improvement since 2007, less than half of adults--42%--keep close track of spending; * Twenty-six percent--more than 58 million adults--admit to not paying all of their bills on time; and * One-third of adults--72 million people--report that they have no savings. Forty-eight percent of Gen Y adults--more than any other age group--report having no savings;
Cummins commended Minnesota Gov. Tim Pawlenty and President Barack Obama for making financial literacy proclamations this month. Their formal statements recognize the need for financial education--especially in today’s economic climate--and discuss how learning the basics of personal finance will improve citizens’ quality of life, Cummins said. “While there is still much that can be done in the realm of financial education--both for youth and for adults--your local credit union should be viewed as a trusted source for information and advice,” Cummins wrote, providing examples of credit unions’ financial literacy efforts, through grants an classrooms presentations. “Personal finance is among [credit unions’] top priorities, because we know that improving financial literacy, increasing personal savings, decreasing debt and living within your means is a formula for success,” he said. To read the column, use the link.

Tenn. league VolCorp honor Hall of Fame inductees

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NASHVILLE, Tenn. (4/28/10)--The Tennessee Credit Union League and Volunteer Corporate CU (VolCorp) inducted two individuals into the Tennessee Credit Union Hall of Fame during the league's Annual Convention and Expo in Chattanooga, Tenn. Jointly sponsored by the league and VolCorp, the Hall of Fame induction recognizes the commitment, leadership and dedication to the credit union movement of individuals from the state. Inducted were Dr. W. Craig Esrael, president/CEO of First South CU, Bartlett, and Milton Ward, chairman of the board for Kimberly Clark CU, Memphis. Esrael arrived at First South CU (formerly Navy Memphis FCU) in 1983, when the credit union was nearly placed into conservatorship. Six straight quarters of net losses and rising delinquencies had sunk employee morale and almost caused the credit union to close its doors. Seeing only opportunity, Esrael led the credit union to one
Milton Ward, center, board chairman of Kimberly Clark CU, is one of two inductees into the Tennessee Credit Union Hall of Fame. With him are, from left, Tom Gaines, Tennessee Credit Union League president, and Rick Veach, president/CEO of Volunteer Corporate CU (VolCorp.) (Photos provided by the Volunteer Corporate CU)
of the most extraordinary transformations in credit union history, said the league and VolCorp. The credit union achieved asset growth of more than 950%, capital growth of more than 4,000%, an increase to 15 service centers from two, an increase in employee efficiency to one employee per $3.5 million in assets from one employee per $800,000, and 63 consecutive quarters of perfect five-star ratings by a rating agency. Ward, with 37 years of service to the credit union system, exemplified the spirit of a true volunteer, according to Kimberly Clark CU CEO Janice Welch. "From changing light bulbs at the credit union to replacing water heaters, he understands the true credit union spirit and philosophy by putting the needs of others first."

Mica reports on quake-damaged Haitian CUs

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WASHINGTON (4/28/10)--Credit Union National Association (CUNA) President/CEO Dan Mica returned April 22 from a World Council of Credit Unions (WOCCU) field-engagement program in Haiti, where the credit union delegation met with credit unions and their members suffering from the effects of the Jan. 12 earthquake. Mica and the group studied the credit union movement in Haiti and discussed how WOCCU and the global credit union community can best help the country rebuild, using strengths inherent in credit unions’ financial cooperative structure.
Dan Mica, president/CEO of the Credit Union National Association, (right) meets Bozil Jean Sanon, director of Mamev CU, Gressier, Haiti. Mamev is operating out of a tent supplied by the credit union system, and Mamev's staff have received tents, allowing them to get back to work after the earthquake earlier this year. (Photo provided by World Council of Credit Unions)
“The deterioration was beyond what TV could show,” Mica told News Now upon his return. “I looked down every street I came upon and saw rubble on all sides of the streets. I saw miles and miles of tents and tent cities, and people selling scraps they had scavenged, such as bed frames, batteries and auto parts. Schools consist of blackboards placed on stands inside tents with the sides up, located on what used to be sports fields. Kids, still dressed in school uniforms, walk home, stepping over rubble. “It was one of the most depressing sights I have ever seen--balanced by the human spirit--people trying to get their lives to go on,” he continued. “There was poverty and need beyond everything you can imagine. There was an overwhelming sense of human disaster. I’m not an emotional person, but it was very moving.” Fourteen participants representing major credit union organizations and WOCCU leaders participated in the intensive experience led by Pete Crear, WOCCU president/CEO. The delegation first gathered in Miami for a pre-visit briefing from WOCCU staff and a Haitian microfinance leader. Discussion topics included the economic impact of Haitian emigration, financial literacy work and the impact of Haiti’s underdeveloped financial infrastructure. While in Haiti, the delegation visited three credit unions, known as “caisses populaires.” The credit unions’ buildings were destroyed so they operate out of office tents donated by WOCCU. WOCCU Haiti program director Greta Greathouse, who led the delegation’s program, now also leads the credit union disaster relief and rebuilding effort. WOCCU has been working with Haiti’s credit unions since July, with funding from the U.S. Agency for International Development through the Academy for Educational Development. Mica and the other participants toured damaged credit unions in Port-au-Prince and in the earthquake epicenter of Leogane, hearing first-hand how the earthquake affected credit union operations, as well as the staff and members of the credit unions. The visit has helped focus credit union leaders on what to do to help Haiti’s credit unions. “I will soon send a letter to our credit union system looking for 150 volunteer credit unions, each to partner with one credit union in Haiti to send it supplies, equipment or money once a quarter,” Mica said. “The need is astronomical. Credit unions can’t do nearly enough to help the earthquake situation overall. But the least we can do is help credit unions there directly. Also, WOCCU will set up a stabilizations fund to help.” Will Haiti’s credit unions survive? Mica said he believes they will. “People there need credit unions more than ever right now,” he said. “People were coming and going to credit union tents wherever we went. I have no doubt they will survive. This is going to be a very long long-term situation. “People on that island benefit tremendously from the presence of credit unions,” he concluded. “If they weren’t down there, we’d go down there and set them up.”

The 1 conference session to feature Canadian singer

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MADISON, Wis. (4/28/10)--Bernard Lachance, a noted Canadian singer, has been added to the lineup of ‘The 1 Credit Union Conference,’ a joint venture of the Credit Union National Association (CUNA) and the World Council of Credit Unions (WOCCU). Lachance, who has sold more than 30,000 CDs, will share his story in a breakout session, “Innovation on a Shoestring.” Lachance’s innovative one-to-one approach of selling tickets landed him an appearance on “The Oprah Winfrey Show.” The 1 Credit Union Conference will be held in Las Vegas July 11-14. Other keynote speakers include bestselling author Jim Collins, who wrote “Good to Great: Why Some Companies Make the Leap ... and Others Don’t.” Collins will speak about how credit unions can go from “good to great” in serving their members. Kevin “the Katalyst” Carroll also will speak. He founded Kevin Carroll Katalyst LLC and is the author of “Rules of the Red Rubber Ball,” “What’s Your Red Rubber Ball?!” and “The Red Rubber Ball at Work,” which inspire businesses, organizations and individuals to embrace their spirit of play and creativity to maximize their human potential to sustain meaningful business and personal growth. Carroll’s keynote session, “Credit Unions: Uncommon Catalysts Turning Dreams into Reality,” Credit union leaders will discover new ways of thinking and problem solving to build a productive, passionate credit union team to better serve members, says CUNA and WOCCU.

MnCUN meeting focuses on advocacy board elections

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BROOKLYN PARK, Minn.(4/28/10)--The Minnesota Credit Union Network (MnCUN) held its annual meeting and convention April 23-24. More than 360 credit union professionals and volunteers attended the meeting, which focused on advocacy.
Ryan Donovan, Credit Union National Association vice president of legislative affairs, spoke at the Minnesota Credit Union Network’s annual meeting and convention April 23-24. (Photo provided by the Minnesota Credit Union Network)
Ryan Donovan, Credit Union National Association (CUNA) vice president of legislative affairs, spoke about the credit union movement’s grassroots advocacy efforts. He complimented Minnesota credit unions’ for their work on business lending advocacy and provided them with an overview of the political landscape. In the coming months, CUNA will remain focused on pushing member business lending legislation forward and minimizing the adverse impact of regulatory restructuring, Donovan said. He encouraged credit unions to remain “engaged political advocates” by visiting their representatives in Minnesota and Washington, D.C. Also at the meeting, one incumbent and three new representatives were elected to three-year terms on the board:
* Jeff Schwalen, incumbent, Hiway FCU, St. Paul; * Kelly McDonough, First Alliance CU, Rochester; * Kim Boysen, Mower County Catholic Parishes CU, Austin; and * David Sawin, St. John’s CU, St. Paul.
The board also elected new table officers:
* Chairman Kyle Markland, Affinity Plus FCU, St. Paul; * Vice Chairman Patrick Pierce, City & County CU, St. Paul; and * Secretary/treasurer Chuck Albrecht, Mid-Minnesota FCU, Brainerd.

State interchange bill meets CU opposition

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MADISON, Wis. (4/27/10)--Any government intervention that results in the inability of small institutions to offer credit and debit card services to members would place credit unions at a huge disadvantage with their members, according to testimony in one of the states whose legislature is considering changes in credit card company practices. On Friday, the Georgia House Banks and Banking Committee heard testimony on HB 1456, a credit card interchange bill, from opponents of the bill, including the Georgia Credit Union Affiliates (GCUA), the Community Bankers Association, the Georgia Bankers Association and the Electronic Payments Coalition. The bill, introduced on March 22 by sponsors and co-sponsors with business ties, was heard in full committee but likely will go nowhere. "We are as confident as we can be with two days left in the session that this bill will not have any more traction other than the hearing," said GCUA Senior Vice President of Government Influence Cindy Connelly. She noted that the issue, which has been waged for years in Washington and in the courts, is beginning to surface in state legislatures across the country, such as Vermont, Colorado, Georgia and California, and the credit union system is taking steps to educate credit unions about the issues. For example, the Electronic Payments Coalition is hosting webinars on interchange, that discuss what interchange is and why it's important, myths and facts surrounding the interchange debate, and unintended consequences of proposals to regulate interchange fees. The next webinar is Thursday at 10a.m.-11 a.m. ET. For more information, use the link. No vote has been scheduled for the Georgia bill, since the date for crossover into the other legislative chamber has passed. However, Committee Chairman James Mills has indicated the issue could resurface (NACS Daily News April 26). The bill had aimed to:
* Provide retailers the ability to set different prices; * Determine if they can accept specific payment products, and * Reward retailers with fees and fines if an electronic payment system violated the
Testifying before the committee on behalf of credit unions Friday was Mike Culbertson, GCUA's chief advocacy officer. He noted that members demand credit and debit card services and credit unions offer these in direct response to members' needs and demands for convenience. Other points he argued:
* Government intervention would put smaller institutions at a huge disadvantage with members who expect their credit union to offer the services and could lead to members seeking an alternative provider. * A key feature is the universal acceptability of debit and credit cards worldwide. * Adopting laws impacting universal acceptance would confuses consumers, who will see problems of acceptability tied to the card. Consumers might not take time to understand problems that are due to anything else other than the card; they would seek a card from competitors. * Even the largest credit unions don't have negotiating power or opportunity to negotiate with merchants on interchange; they rely on the stability of the default schedules for most transactions. * The strength of any network is in rules that enable the widespread acceptance of cards, even from the smallest issuers.

Irish CUs OK plan to go electronic

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DUBLIN (4/27/10)--In what is described as the biggest single change to the Irish credit union movement in decades, delegates at the Irish League of Credit Unions (ILCU) approved plans for a new payment service that would allow credit unions to offer debit cards and electronic transfers. They approved the plans during the league's annual general meeting last weekend at the University of Limerick. More than 1,500 delegates representing 505 credit unions attended (The Irish Examiner April 26). Establishing a credit union service organization (CUSO) was a key issue at the meeting. The approved CUSO "will be the biggest thing to hit the movement in decades, answering the calls from members and nonmembers alike about access to payment solutions, specifically electronic debit transfers, electronic credit transfers and debit cards," said ILCU President Mark Bailey. Kieron Brennan, CEO of the ILCU, said the "momentous" decision was required by members, who called to say " they have lost faith in other financial institutions and the level of trust they have in credit unions is at an all-time high, and they would like to have more access to a bigger range of financial services through our credit unions." Less than 10% of credit unions affiliated with the league have the ability to provide electronic funds transfers and just 5% provide debit cards. In other news from the conference, Financial Regulator Matthew Elderfield warned credit unions to remain vigilant for another challenging year due to the country's economic circumstances. Credit unions are in the front line of the battle to ensure these problems are kept at bay, he said. He added loan arrears and level of rescheduled loans have risen sharply the past two years.

CU System briefs (04/26/2010)

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* BRAINTREE, S.D. (4/27/10)--Red Sox first baseman Kevin Youkilis and Liberty Bay CU, Braintree, have made a three-year deal to sponsor his charity, Hits for Kids (Boston Business Journal April 26). The $650 million asset credit union will donate to the charity over the span of three years and will establish a T-shirt program with proceeds benefitting Hits for Kids. Youkilis will make personal appearances on behalf of the credit union, and Liberty Bell will feature him in promotions ... * RIDLEY, Pa. (4/27/10)--A former executive vice president and marketing director of Ridley-based Boeing Helicopters CU was to begin a 28-month prison sentence Monday for fraud for taking kickbacks to arrange loans for unqualifed applicants. Anthony Forte Jr., who was also president of the Boeing company's largest union, also must pay restitution totaling $1.25 million. Forte, 44, pleaded guilty to the charges. His younger brother and six other people considered middlemen in the scheme were also convicted (DelcoTimes.com April 25 and News Now Feb. 24) ... * GREENSBORO, N.C. (4/27/10)--The North Carolina Credit Union League has named Jeanne Couchois as vice president of compliance and risk management. Couchois, who joined the league in 2009, will assist credit unions in addressing their compliance needs. Under Couchois, the department will continue to offer a full range of compliance services including answering compliance questions from member credit unions, conducting training sessions and providing intensive compliance support through the compliance specialist program. Couchois helped pilot the league's new compliance specialist program when she joined the league on a part-time basis. She also conducted training sessions on compliance-related topics for the league. Prior to joining the league, she worked for the North Carolina State Employees' CU (The Weekly Update April 23) ...

Small CUs fewer banding together on services

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WORCESTER, Mass. (4/27/10)--Small U.S. credit unions are dwindling in number and some of the remaining ones are banding together to achieve economies of scale, according to a Monday article in the Worcester Business Journal. “Big credit unions are getting bigger and there are more of them while small credit unions are dwindling in number. All this is happening while the total number of credit unions continues to decline around the country," said the article titled, “Big Credit Unions Keep Getting Bigger.” One distinct factor has caused the decrease in the number of small-asset credit unions, Daniel Egan, president/CEO of the Massachusetts Credit Union League, New Hampshire Credit Union League and the Credit Union Association of Rhode Island, told the Journal. “This is a direct response to smaller-asset credit unions not being able to maintain the continuingly increasing regulatory requirements,” Egan added. One remedy is that roughly a dozen small-asset credit unions in central Massachusetts have banded together and use their combined purchasing power to achieve economies of scale--such as hiring an information technology (IT) director, Debbie Guiney, president of Allcom CU, Worcester, told the Journal. “We got a great price for someone to come in, do IT audits and check for vulnerabilities, and it was much less than what any of us could have individually achieved,” she said. “This type of collaboration will be critical for institutions to survive.” Also, the collapse of the financial services industry highlights the need for smaller locally based credit unions and banks, Egan told the Journal. “Given the recent economic crisis, the whole idea of ‘too-big-to-fail’ is being called into question,” he added. “We’re seeing an increased interest in people going to credit unions to have the safety and security of local financial institutions.” To read the article, use the link.

Vt. card acceptance bill would endanger CU programs league says

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BURLINGTON, Vt. (4/27/10)--Association of Vermont Credit Unions (AVCU) President Joe Bergeron was among the first to testify Wednesday in front of the Vermont House Commerce Committee regarding a controversial credit card acceptance bill. The bill, S. 138, would endanger how and where Vermont credit union members’ credit and debit cards are accepted, AVCU said. Bergeron and Department of Banking, Insurance, Securities and Healthcare Deputy Commissioner Tom Candon testified, along with the primary representative of the Electronic Payments Coalition (Newslines Express April 23). On Thursday, Vermont State Employees CU President/CEO Steve Post and New England FCU chief financial officer Sue Leonard also testified in favor of credit unions. They focused on the potentially detrimental effects of S.138 on their cardholders and credit union card programs. “In line with testimony provided by Candon and me [Wednesay], Post and Leonard referenced the negative effects of possible surcharging by merchants, negativity of minimums and maximums, and unreliability of card functionality if S.138 is passed,” Bergeron said in AVCU’s newsletter. “Also referenced were the burden card issuers bear resulting from data breaches occurring at merchants and processors, and resultant fraud.” Of special note was testimony by MasterCard’s Vice President of State Governmental Affairs Rich Santoro, whose participation Bergeron specifically requested. “Visa and MasterCard are the primary recipients of much of the opposition’s criticism and claims that network rules and interchange are restrictive, unfair and detrimental to small business,” Bergeron said. “Taking the witness chair was a bit of an unknown that ultimately seemed to work out favorably.” All parties emphasized that the bill’s verbiage would permit minimums and maximums on card purchases, and surcharging at different amounts on different types or brands of plastic, and perhaps differently by location. Although it was apparent at the start that legislators were confused by the interpretation that S. 138 would permit these practices by merchants, by the end of testimony there appeared to be agreement on the need for clarification, AVCU said. Bergeron said a vote could be expected on the matter today or Wednesday, depending on floor actions.

Polish and Slavic FCU offers 2.5M special dividend

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NEW YORK (4/27/10)--Polish & Slavic FCU (PSFCU), the largest U.S. ethnic credit union, announced April 15 it earmarked $2.5 million for a special dividend to assist members in tough economic times. The PSFCU board of directors declared the special dividend will be paid out May 3--a historic date for Poles, commemorating the anniversary of the Polish Constitution of 1791--one of the most progressive constitutions in the world at that time, said the credit union. To qualify for the dividend, the individual or business must be a member of PSFCU as of both Dec. 31 and May 3, 2010. Members will receive a lump sum equal to 0.25% of their total average share balances for the year ended Dec. 31. The special dividend will be automatically deposited into members’ regular share accounts at the close of business May 3. “We have once again demonstrated the benefit of membership in a well-managed, member-driven credit union,” said Tomasz Bortnik, chairman of the PSFCU board. “There’s never been a more appropriate time for us to share our success with our members. This special dividend sends a clear signal to all members that we place a tremendous importance on contributing to their financial well-being.” This marks the first time in its 34-year history that PSFCU has paid a special dividend. The election of a new board last October, during which members chose candidates who championed the dividend, was the primary impetus for the payout. The winning directors ran on the promise to “share the wealth” of the credit union with its members. “We are in a strong financial position that we can afford to help our members in these extremely difficult times,” said Agnieszka Poslednik, PSFCU chief operating officer. “We have a net-worth-to-asset ratio of 10.46% and $1.31 billion in assets.”

Second nomination for CUNA Board seat

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MADISON, Wis., and WASHINGTON (4/27/10)--The Credit Union National Association (CUNA) has received a second nomination in a special election for the CUNA Board District 5, Class B seat. The candidate is Angela S. McCathran of People’s Trust FCU, Houston. The other candidate is Roger Heacock, president/CEO of Black Hills FCU, Rapid City, S.D. Deadline for nominations is the close of business May 5. Since there is more than one candidate, the special election will be conducted by written ballot from May 7 to June 4. District 5 comprises the Arizona, Colorado, Kansas, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, Utah and Wyoming leagues. The seat is currently held by CUNA Chairman Kris Mecham, who announced his resignation from the board effective June 1. Mecham is leaving the U.S. this summer to perform mission work in Mongolia for his church. The term of office for the position will begin immediately after a successful candidate is determined and will expire at the adjournment of CUNA’s 2013 Annual General Meeting. Nominees must be an employee or voting board member of the nominating credit union. The nomination must be in writing and seconded in writing by two other credit unions of the same size group from the district. Credit unions wishing to nominate a candidate should complete a nomination form and obtain the candidate’s consent and two seconding nominations. Forms will be accepted by fax at 608-231-4878, email thanson@cuna.coop or by hard copy to 5710 Mineral Point Road, Madison, WI 53705.

Texas foundation elects officers

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FARMERS BRANCH, Texas (4/27/10)--The Texas Credit Union Foundation (TCUF) announced that it has elected a new slate of officers (LoneStar Leaguer April 26). This year’s officers include:
* President Dick Ensweiler, president/CEO of the Texas Credit Union League; * Chair Lily Newfarmer, CEO, Tarrant County CU; * Vice-chair Maria Martinez, CEO, Border FCU, Del Rio; * Treasurer Jerry Merrill, CEO, Concho Educators FCU, San Angelo; and * Secretary Arna Reynolds, CEO, Amarillo (Texas) Community FCU.
The foundation also recognized:
* Angela McCathran, CEO, People’s Trust FCU, Houston. She was chair of TCUF for two years and served seven years on the board. She will be an advisory trustee for two more years; * Anne Boatright, CEO, Capitol CU, Austin, who served two years as a trustee in the league chair position, and two years as an advisory trustee in the past chair position; and * Kerry Parker, CEO, A+FCU, Austin, who served 10 years on the TCUF board, two as chair.

White House sees HSFPP NEFE in action

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WASHINGTON (4/27/10)--Thirteen high school girls at the White House Friday learned life skills related to financial management in a lively session presented by the National Endowment for Financial Education's (NEFE) High School Financial Planning Program (HSFPP).
Lisa Moore, a teacher from the Arlington (Va.) Career Center, smiles on her way into the White House Friday to teach a budgeting lesson from the National Endowment for Financial Education's High School Financial Planning Program to 13 girls in a program mentored by First Lady Michelle Obama and senior White House staff.
Using the NEFE program, Lisa Moore, a teacher from the Arlington (Va.) Career Center, presented the 90-minute lesson in budgeting to the group in the State Dining Room of the White House in Washington, D.C. Last week was National Credit Union Youth Week, which is a part of financial literacy month. The White House, under the direction of First Lady Michelle Obama, is conducting a program for 20 teens, who are mentored by senior White House staff members. The First Lady often attends meetings of the group. The group's activities included a visit in March to the Supreme Court to visit Justices Ruth Bader Ginsberg and Sonia Sotomayor. Part of the mentoring program's goals is to teach life skills, including financial education, said John A. Parfrey, director of NEFE HSFPP, who accompanied Moore to the event. NEFE first learned of the White House program when a call went to the National Institute of Food and Agriculture (formerly Cooperative Extension) at the U.S. Department of Agriculture for samples of NEFE materials. NEFE sent complete sets of HSFPP materials to Obama's office.
Thirteen high school students work in the White House State Dining Room on budgeting skills during a High School Financial Planning Program's session taught by Lisa Moore of the Arlington (Va.) Career Center. Calculators were provided by Arlington Community FCU. (Photos provided by the National Endowment for Financial Education)
During the week of April 12, NEFE was asked to send class materials and a teacher. Dawn Linley, Virginia Credit Union League director of marketing and financial literacy, and Patty Browne of the Arlington Community FCU helped put NEFE in touch with Moore, who immediately accepted the assignment. CUNA and the leagues have partnered with NEFE since 2000, helping to broaden the program's reach into high school classrooms nationwide. The group met Friday for the lesson while the first lady was on a long weekend break in North Carolina. Moore and Parfrey arrived at the White House to meet their liaison, Carynne Hardy and her supervisor, Domestic Policy Advisor Jocelyn Frye, who is senior assistant to Michelle Obama and a member of President Barack Obama's Domestic Policy Council. The group set up in the chandelier-studded State Dining Room, and the White House provided two large TV screens for PowerPoint presentations. All the girls had "White House, Washington, DC" writing pads and Moore brought along calculators contributed by the Arlington Community FCU. "I hope that word of this class reaches the First Lady and that maybe because this one class helped a group of bright young girls start to think differently about money, Mrs. Obama will do something to help all of us in this endeavor process of getting our whole nation thinking about money in a new and different way," Parfrey said.

Author of Ohio CU Act others honored by league

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COLUMBUS, Ohio (4/27/10)--The Ohio Credit Union League honored several individuals for their contributions to the credit union movement during an April 15 awards ceremony, at its ZENITH10 conference, in Cincinnati.
Tim Clarke Bonow addresses attendees and reflects on his father’s legacy after accepting the Louise McCarren Herring Lifetime Achievement Award from the Ohio Credit Union League on behalf of his grandfather, Claude Clarke. (Photos provided by the Ohio Credit Union League)
Claude Clarke, author of the Ohio Credit Union Act of 1934, was posthumously honored with the Louise McCarren Herring Lifetime Achievement Award. Clarke served as the manager of the league and is a former Credit Union National Association chairman. He died in 1975. Clarke’s grandson, Tim Clarke Bonow, accepted the award on his behalf. The league also honored Bill Burke, CEO of Day Air CU, Kettering, with the 2010 Professional of the Year Award. Under Burke, Day Air experienced a 7% growth in membership, 11% growth in assets and a 15% growth in deposits in 2009.
Bill Burke, CEO of Day Air CU, Kettering, accepts the Professional of the Year Award at ZENITH10, the Ohio Credit Union League’s conference, held April 15 in Cincinnati. League board chair Jennifer Ferguson is also pictured.
Jerry Gramke received the 2010 Volunteer of the Year Award for his work at Cincinnati Police FCU. “When I began, we had just hired our second employee and offered only auto loans and savings accounts,” Gramke said. “Today I am proud to say we are a full-time financial institution and growing.” The 2010 Claude Clarke Political Inspiration Awards were presented to Phil Buell, CEO of Superior FCU, Lima; and Seven Seventeen CU, Warren. The awards recognize an individual and a credit union for their advocacy efforts. Seven Seventeen CEO Gary Soukenik accepted the award on behalf of the credit union. He said: “Don’t let banks set our agenda. All credit unions must maintain and increase their advocacy efforts, and we all must work collectively to educate legislators to make the right choices.”

J.D. Power Banks brand image dropping

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WESTLAKE VILLAGE, Calif. (4/26/10)--For the fourth straight year, customer loyalty and perceptions of brand image among retail banking customers continues to decline while satisfaction has leveled off, according to J.D. Power and Associates’ 2010 U.S. Retail Banking Satisfaction Study. Overall satisfaction of retail banking customers averages 748 on a 1,000-point scale--a decrease from 749 last year. The brand image of banks also has continued to decline, with customers perceiving banks as more profit-driven than customer-driven, compared with 2009, the study said. The percentage of customers who said they “definitely will not” switch banks during the next year also decreased to 34%, compared with 46% in 2007. Poor customer service--the most common reason given for switching banks--was cited by 37% of customers who changed their primary bank in 2010. Greeting customers as they enter the branch, offering additional assistance, and thanking them for their business may increase overall satisfaction by nearly 50 index points, yet less than 60% of customers reported experiencing those amenities. “As retail banking customers become considerably less loyal, banks need to focus on getting the fundamentals right,” said Michael Beird, director of banking at J.D. Power and Associates. “Banks that get back to the basics--such as maintaining a clean branch and greeting customers upon entering--may help to alleviate some of the distress customers are experiencing and increase their overall satisfaction.” About 29% of customers who switched banks in 2010 cited high fees for products or services as their reason for switching. Use of remote banking options is becoming increasingly common, with 51% of customers in 2010 indicating a preference for online banking, up from 45% in 2008. Also, 7% of customers reported using a mobile device for checking balances, transferring funds and paying bills. Surveys by Forrester, the Chicago Booth/Kellogg School Financial Trust Index (News Now Feb. 5), and the Rasmussen Index, have all showed credit unions to be more trustworthy than banks. Forrester Research’s annual Customer Advocacy rankings placed credit unions well ahead of banks after about 70% of credit union members surveyed told Forrester that their financial institution puts their interests first. Credit unions were ranked higher than banks because they have a different operating model--they are owned by their members--and they emphasize customer service, said Bill Doyle, Forrester vice president (News Now via The New York Times Feb. 5).

Texas CUs to send e-mail urging lifting of MBL cap

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FARMERS BRANCH, Texas (4/26/10)--The Texas Association of Business (TAB) Thursday asked leaders of Texas credit unions that offer member business loans (MBLs) to send an e-mail to their small business members, urging them to sign onto an open letter by promoting more small business lending. TAB, which is the Texas state Chamber of Commerce representing more than 140,000 businesses, held a press conference Thursday in Austin calling for doubling the cap on member business lending at credit unions to 25% of total assets. The letter asks U.S. Sens. Kay Bailey Hutchison (R-Texas) and John Cornyn (R-Texas) for their support of credit union member business lending and S. 2919, legislation that would raise the cap on MBLs (LoneStar Leaguer April 23). The congressional measure would free up $10 billion nationally for small business lending to credit union members, including $575 million in Texas, where more than 6,000 new jobs would be created as a result of its passage, said TAB President Bill Hammond. The proposal to double the member business lending cap would engender an additional 108,000 jobs or more nationwide, Hammond added. “Small business and free enterprise form the backbone of our nation,” Hammond said. “It’s time we tipped our hat to the men and women [who are] small-business owners across our state and nation, and gave them the access they need to capital to grow their business, hire more workers and put this country back on the right track.” TAB is contacting its members on the issue, driving potentially hundreds of small businesses to sign the open letter calling for change on MBLs, said the Texas Credit Union League (TCUL). TAB will later present the letter in person to Texas’ senators, with thousands of signatures from small businesses in support of raising the MBL cap. Credit unions are urged to forward the TAB website link containing the open letter to their MBL recipients, TCUL said.

CUNA tells IBankrateI who can join a CU

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MADISON, Wis. (4/26/10)--Consumers looking to join credit unions can do so through more avenues than most think, the Credit Union National Association (CUNA) told Bankrate.com Friday. The article, titled “Can you join a credit union?” mentions that while the majority of Americans obtain access to a credit union through their employers, there are other ways to become a member. “Out of the 8,000 credit unions, almost 25% are community-based,” Jim Hanson, CUNA vice president of personal finance, told Bankrate. “The vast majority of consumers, especially in large communities and cities, have an opportunity to join a credit union.” Churchgoers are eligible to join their church credit union, as are students and faculty of a college or university. At some credit unions, such as the University of Wisconsin’s credit union, you only need to have taken one class to become a member, Hanson said. “It’s not that hard to get into a credit union,” he added. Credit unions offer the full gamut of financial services from savings accounts to automobile loans, are attractive to consumers because they offer competitive rates on loans and have money to put to work, Bankrate said. “Credit unions have enjoyed a nice spurt in growth since the financial crisis and are flush with cash and want to make loans,” Hanson told Bankrate. To read the article, use the link.

CUs help members turn around financial woes

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MADISON, Wis. (4/26/10)--Credit unions are helping their members turn their financial situations around, by offering help through counseling or savings products. Sheila Jensen is one individual who was helped by a credit union--Affinity Plus FCU in Duluth, Minn. Jensen had troubled paying her bills when she accumulated credit card debt, and went to Affinity for help. The credit union helped her improve her finances through financial counseling (Duluth News-Tribune April 12). Jensen met with the credit union every week to work on her budget and bill payments. She paid her bills with automatic withdrawals and cashiers’ checks. She stopped using personal checks to resist spending, and the credit union helped Jensen deal with collection agencies and set up payment plans for back taxes. Jensen also was given a cash allowance each payday. With the credit union’s help, Jensen paid off her debt, and learned how to budget and manage her money. Her credit score has improved, and she’s feeling more in control of her financial situation, the newspaper said. Kristina Wright, vice president of communications for the Minnesota Credit Union Network, said credit unions are known for their member service. Some credit unions have financial counselors on staff, while others outsource counseling. Credit unions will try to work with their members, especially during the housing crisis and recession, she said. Duluth Teachers CU also offers financial counseling. Bryan Lent, assistant vice president of lending, told the newspaper his staff will provide income and debt comparisons to members as a tool to help them better manage their money.

Conn. CUs sponsor youth financial reality fair

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BRIDGEPORT, Conn. (4/26/10)--Local and state politicians joined high school students in the third Financial Reality Fair sponsored by Connecticut credit unions this spring. The fair is an exercise in financial reality that young people need to experience for successful transition from school and familial
Click to view larger image Bridgeport, Conn., Mayor William Finch, (left) with constituent students at a Financial Reality Fair’s “Wheel of Reality” when student spinners learn if they receive a windfall or an unexpected expense for their budgets. Students spin the wheel as part of working out a hypothetical monthly budget based on their career choice.
dependence to independent adult living on their own, said the Connecticut Credit Union Association (CTCUA). Nearly 300 students from seven high schools in the Bridgeport, Conn., area gathered at Housatonic Community College to move from booth to booth making decisions about adult life choices such as housing, transportation, clothing, food, and social amenities all on a projected monthly budget based on their career choice. Connecticut State Rep. Theresa Conroy (D-105th) and Bridgeport Mayor William Finch assisted students from constituent schools at the Wheel of Reality, a spinning assortment of windfalls and unexpected expenses that illustrate how life can reward or penalize-- often by chance. Dozens of volunteers from 19 credit unions and related businesses
Connecticut State Rep. Theresa Conroy (D-105), left, watches as Nick, Ansonia High School senior, spins the ‘Wheel of Reality’ at a Financial Reality Fair held at Housatonic Community College. Students spin the wheel as part of working out a hypothetical monthly budget to learn if they receive a windfall or an unexpected expense. (Photos provided by the Connecticut Credit Union Association)
managed the booths, offering advice and temptations along with the choices, after which students met with financial counselors to see how well they did or did not manage their budgets. “This is an outstanding opportunity for the students,” said Conroy. Mayor Finch added: “It’s a great start on their way to learning to manage their money wisely.” Connecticut credit unions are completing their second year of offering Financial Reality Fairs statewide as part of a commitment to foster financial literacy among youth. The Housatonic Community College Business Department partnered with Connecticut credit unions and donated the space for the fair.

WesCorp revises March 2010 financials

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SAN DIMAS, Calif. (4/26/10)--Western Corporate FCU (WesCorp) has revised its March 2010 financials. WesCorp realized a net loss of $36.3 million for March 2010, including additional other-than-temporary-impairment (OTTI) charges for the month of $49.4 million. Excluding the OTTI charge, income from normal operations for March was $13.2 million, consistent with operating results for the first two months of the year, according to WesCorp’s website. Actual realized losses on 40 securities incurred in March totaled $76.5 million, bringing actual realized losses to date to $270 million for 43 securities in the portfolio on a cumulative basis. The actual losses experienced in March have no additional impact on WesCorp’s financial statement since the actual losses have already been recognized in prior periods through OTTI. For more information, use the link.

CU System briefs (04/22/2010)

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* GREENSBORO, N.C. (4/23/10)--Two State Employees’ CU (SECU) members have received the first-ever award from the North Carolina Credit Union League’s Robbery Reward Fund. The reward fund was created several years ago to help law enforcement agencies in the area. Up to $5,000 may be awarded to anyone who helps law enforcement arrest a robber. The members, who wish to remain anonymous, helped SECU nab a robber last September. The robbery took place at a SECU branch in Mint Hill, N.C., Sept. 15. The members, who were in the parking lot next door, followed a man who had come into the credit union and demanded money from a teller. The man had covered his license plate with paper to avoid being tracked, but pulled off to the side of the road to uncover his plate after being followed by the members for several miles. The members called 911 and gave the information to police. The man, Jeremy Scott Lemmond, was found at his home a few hours later. Lemmond pleaded guilty to armed robbery in January. SECU does not encourage people to pursue robbers, but the members “were in the right place at the right time,” said SECU Security Officer Jonathan Mallaber ... * DUBLIN, Ohio (4/23/10)--The 2010 Ohio Credit Unions: Marching Miles for Miracle Kids raised $110,000--surpassing its goal, according to the Ohio Credit Union League (eLumination newsletter April 21). The 170-mile relay-style march began March 28 in Dublin, Ohio, with hopes to raise $100,000. During a welcome rally last week, University of Cincinnati Head Basketball Coach Mike Cronin thanked the marchers and contributors. Event emcee Kristina Hurlburt of Standard Register FCU, Dayton, discussed her daughter’s battle with multiple sclerosis and how the Children’s Medical Center of Dayton is helping her family ... * DUBLIN, Ohio (4/23/10)--The Ohio Credit Union League honored several individuals during its 2010 Leadership Recognition awards Claude Clarke, who wrote the Ohio Credit Union Act and was the first part-time manager of the lague, was named one of the recipients of the Louise McCarren Herring Lifetime Achievement Award (eLumination newsletter April 23). Jerry Gramke, Board Chair of Cincinnati Police FCU, was named Volunteer of the Year, and Bill Burke, CEO of Day Air CU, Kettering, was named Professional of the Year. Phil Buell, CEO of Superior FCU, Lima, and Seven Seventeen CU, Warren, have been named winners of the Claude Clarke Political Inspiration Award for an individual and credit union, respectively. Unity Catholic FCU, Parma, and Day Air CU won the Desjardins Youth Financial Education Award, and Community Star CU, Elyria, Directions CU, Toledo, and the Central Ohio Chapter received the Dora Maxwell Social Responsibility Award. Toledo Police FCU and Wright-Patt CU, Fairborn, received the Louise Herring Award for Philosophy in Action, and Members First CU, Columbus, and Wright-Patt CU were honored with the Cutting Edge Marketing Brilliance Award ...

Move Your Money moving to nonprofit org

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MADISON, Wis. (4/23/10)--'Move Your Money' is now moving to become a nonprofit organization. The campaign urges consumers to deposit their money into credit unions and community banks instead of large banks. The 'Move Your Money' project has functioned on a volunteer basis. However, the project is now looking to hire a few full-time staffers and expand the project into a national campaign. 'Move' also partnered with Network for Good, a fundraising site, to generate money for the organization. Since its inception, the 'Move Your Money' website has received millions of hits, and mentioned on major news outlets. The campaign also has generated numerous fans on its Facebook page. 'Move' has consistently noted credit unions as good alternatives to big banks. The Huffington Post launched the campaign last December. It carried an article by Credit Union National Association (CUNA) President/CEO Dan Mica and a link to CUNA's credit union locator.

Media touts Ohio CUs successes

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CLEVELAND (4/23/10)--A front-page article that discussed the continued increases in assets, loans and membership among Northeast Ohio credit unions was featured in the April 19 issue of Crain’s Cleveland Business. Titled “Credit unions become beneficiaries of economy as asset levels increase,” the article was written by Arielle Kass, who spoke at the Ohio Credit Union League’s media training last year (eLumination Newsletter April 21). Pete Grimm, president of Medina County FCU, Wadsworth, and Kevin Ralofsky, CEO of Vacationland FCU, Sandusky, offered insight into the growth at their credit unions--highlighting a better deal for consumers and a flight to safety. Dave Fearing, vice president of credit union solutions for the league, echoed the comments of the two credit union leaders, saying that credit union success is a combination of the affordable rates and the attractiveness of the “People Helping People” collaborative nature.

Bankrate CUs have better deals on credit cards

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NEW YORK (4/23/10)--Credit unions charge lower fees on credit cards than banks, according to Bankrate.com. Bankrate conducted a survey of 73 cards issued by 28 banks and 19 credit unions. The survey found that none of the credit union credit cards charged an inactivity fee, while three banks charged inactivity fees. Fifth Third Bank charges a $19 fee if no transactions were made in the previous year, while First National Bank of Omaha could charge a $29 to $75 fee after six months of inactivity (April 19). The study also found that 20 credit union cards charge a flat late fee, regardless of balance or degree of lateness--ranging from $5 to $30. Only one credit union charged a fee based on balance, compared to the 25 bank cards that had a tiered fee structure. San Diego County CU issues a $10 late fee, but not until the payment is 10 or more days past due. Bankrate noted that 25 of the 33 credit union cards it surveyed don’t charge balance transfer fees, and 20 credit union cards don’t charge a cash-advance fee. However, of the bank cards Bankrate surveyed, bank-advance fees ranged up to 5% of the cash advance amount.

Wis. league CEO editorial CUs keep local money local

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MADISON, Wis. (4/23/10)--Brett Thompson, president/CEO of the Wisconsin Credit Union League, touted the fact that credit unions help keep local money local, in an opinion piece that responded to a prior editorial by a Wisconsin newspaper, which discussed the advantages of a state-run bank. “We encourage investigation of the [state-run bank] concept,” Thompson wrote. “And we encourage any analysis to take into account credit unions, which are locally owned and managed financial institutions where deposited dollars are loaned out to individuals and businesses within the community” (The Capital Times April 19). More than 2.2 million Wisconsinites belong to credit unions, and in 2009, credit unions in the state increased their lending to hometown businesses by 13% to take up the slack because of decreased lending by banks, Thompson added. “As a result, these not-for-profit co-ops return $200 million annually to depositors through better rates on loans and savings and lower and fewer fees,” Thompson wrote. “Through their REAL Solutions initiative, credit unions help families by making affordable loans, refinancing mortgages, consolidating debt and adjusting loan terms,” he added. “They help members sort out complex financial challenges, stretch budgets, rebuild battered credit scores and avoid payday lenders They also offer free financial education. When members need help, credit unions step up.” The REAL Solutions program works through state credit union leagues to help credit unions offer services that have proven successful for people of modest means and “low wealth.”

WOCCU honors late Polish president with award

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MADISON, Wis. (4/23/10)--The World Council of Credit Unions (WOCCU) board of directors unanimously voted to award Lech Kaczyñski, the former president of Poland who died with 95 other government officials and their spouses in a tragic airplane crash April 10, the 2010 Distinguished Service Award.
Click to view larger imagePoland’s late President Lech Kaczynski (left) shook hands with Grzegorz Bierecki, World Council of Credit Unions’ second vice chair and CEO of Poland’s national credit union association. (Photo provided by World Council of Credit Unions)
The honor, conferred during last week’s WOCCU board meeting, recognizes the significant contributions the late statesman made to Poland's credit unions. “Rarely does a head of state offer the level of support that President Kaczyñski did to the credit union movement,” said Pete Crear, WOCCU president/CEO. “Poland has one of the world’s most successful and progressive credit union systems due largely to the direct involvement, support and friendship of its former president. His tragic death was a loss to all credit unions.” Kaczyñski's relationship with credit unions began in 1989 when he was a direct report to Lech Walesa, the former leader of Poland’s Solidarity movement that helped secure the country’s freedom from Soviet rule. Kaczyñski charged one of his staff members, Grzegorz Bierecki--currently CEO of the National Association of Co-operative Savings & Credit Unions (NACSCU) and second vice chair of the WOCCU board--to find U.S. banks that would help Poland stabilize its financial services sector. No bank was interested, but several suggested Bierecki meet with credit unions. In 1991, WOCCU officials met with members of Solidarity, including Walesa and Kaczyñski, the Ministry of Finance and the Catholic Church to examine the role that credit unions could play in helping Poland's financial services development. WOCCU conducted credit union development programs in Poland from 1992-1999, which played a large role in the formation of the Polish credit union system of today. Between 1990 and 1991, Kaczyñski was supervisory board president of the Foundation for Polish Cooperative Savings and Credit Unions, created by WOCCU at the request of the Solidarity movement. Since then, Kaczyñski, who was a professor of law prior to his political involvement, has been committed to developing and strengthening the country’s financial cooperative movement. He was elected Poland’s president in 2005 and continued his vigorous support for Poland’s credit unions while in office. WOCCU's Distinguished Service Award, the international credit union system’s highest honor, will be awarded to Kaczyñski posthumously in a special presentation at The 1 Credit Union Conference, the jointly hosted conference of WOCCU and Credit Union National Association, its U.S. member. The conference will convene July 11-14 in Las Vegas. “Lech Kaczyñski was one of the founders of our movement, but his interest in credit union development was not limited to Poland,” Bierecki said. “His encouragement resulted in the development of credit unions throughout Central and Eastern Europe. He realized, as we have, that credit unions are schools of democracy and play an important role in a democratic society.”

U.S. Central revises 4Q financials

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LENEXA, Kan. (4/23/10)--U.S. Central FCU has revised its fourth quarter 2009 financials, according to a statement on the credit union’s website. On March 1, U.S. Central posted its fourth quarter 2009 financial statements. Included in the results were other-than-temporary (OTTI) impairment charges of $142.1 million related to investment securities insured by Ambac. The charges were based on information available to U.S. Central at the time, and placed 80% reliance on Ambac to pay claims when due. On March 25, Ambac stated it had taken actions at the direction of its regulator, the Office of the Commissioner of Insurance and the State of Wisconsin, to address its weakened financial position. Based on this information, U.S. Central has revised its reliance on Ambac for claims payments downward to 25% after an expected six-month interruption of payments. OTTI charges recorded in earnings for the fourth quarter of 2009 increased by $274 million. The changes have been incorporated into the corporate’s 2009 audited financial statement. To view the revised statement, use the link.

State Employees CU offers college savings investment

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RALEIGH, N.C. (4/22/10)--North Carolina’s National College Savings Program (NC 529 Plan) has added the Federally Insured Deposit Account, which is provided by State Employees’ Credit Union (SECU), Raleigh, N.C., to the investment options it offers. Announced by College Foundation of North Carolina on April 12, the deposit account provides protection of principal and earnings, offers a competitive interest rate, and is insured by the National Credit Union Administration. The new investment option is the culmination of collaboration between SECU, College Foundation, Inc. and the North Carolina State Education Assistance Authority. “SECU members have expressed an interest in this type of account, and we are very pleased that credit union members and non-members interested in investing for college have this option,” said Joan McCool, senior vice president of SECU’s Individual Retirement Account & Investment Services department. A 529 Plan is a tax-advantaged education savings plan operated by a state or educational institution and is designed to help families set aside funds for future college costs. Contributions by North Carolina taxpayers made to the Federally Insured Deposit Account or any of the other 13 investment options available in the NC 529 Plan may be eligible for an annual state income tax deduction. Earnings on investment options in a NC 529 account also grow free from federal and North Carolina income tax, and are not taxed by North Carolina or the federal government upon withdrawal when used for qualified higher education expenses. “This new option should be particularly appealing for conservative investors who want return without worry about investment loss, or perhaps have an older child who will soon be attending college,” said Shera Hube, vice president for marketing and savings at College Foundation, Inc., which administers the NC 529 Plan. Steve Brooks, executive director for the North Carolina State Education Assistance Authority, which established and maintains the NC 529 Plan, added: “We have worked with SECU on several projects that have been a real benefit to families paying for college. Making a federally insured investment option available now for all NC 529 Plan participants to consider is another good example of how our organizations collaborate to make higher education possible.”

Southeastern CU League adds members increases lending

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BIRMINGHAM, Ala. and TALLAHASSEE, Fla. (4/22/10)--Consumers in Alabama and Florida were very clear in 2009--they were looking for a local financial institution with their best interest in mind. Southeastern credit unions earned consumers’ trust by adding 74,000 new members last year--the highest total in four years, according to the League of Southeastern Credit Unions. The league represents 313 credit unions in Alabama and Florida with a combined total of $54 billion in assets and more than 6.3 million members. Credit union members also saw the benefits of a local institution that would help them save money. Southeastern credit unions saw record growth in savings with members saving more in 2009 than in the past five years. Alabama credit union members’ savings was up 12%--two times the national credit union average. Florida members’ savings was 5% higher--a 100% improvement from 2008. The gauge of strength for a financial institution is its net worth ratio. A financial institution with a 7% ratio is considered well-capitalized. Collectively, Florida credit unions are at 9.5%, while Alabama credit unions are collectively at 11.2%. As the economy begins to pick up, lending remains scarce. In Alabama, credit unions are doing their part by lending to their members in the areas of new- and used-auto loans, as well as first mortgages. Alabama credit unions saw a 5% growth in lending, which is five times the national credit union average. “If you look inside the Alabama numbers, the credit unions are making high-quality loans with low delinquencies and charge offs,” said league President/CEO Patrick La Pine. “In Florida, the local economy continues to struggle, but credit unions remain on solid ground. They are working with their members to help them save, as well as continuing to meet their lending needs.” Florida credit unions maintain a 66% loans-to-assets ratio. This is higher than the national credit union average and shows credit unions aren’t pulling their money back during a tough economic stretch. In 2009, Southeastern credit unions earned their members trust, had their best interest in mind and helped them achieve a higher level of savings, the league said.

CUNA Council offers guidance on leadership training process review

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MADISON, Wis. (4/22/10)--Creating the best value for the member/consumer and streamlining employee workflow is the topic of one of two new white papers from the CUNA Human Resources/Training Development (HR/TD) Council. “Effective Credit Union Leadership Training” looks at success factors and benefits of a successful program, such as higher productivity, bottom-line savings, alignment between values and the credit union’s culture, and a way to embrace the changes and challenges that can be overwhelming in today’s workplace. Employees are a credit union’s most valued possession. They are the ones who, among other things, make member contact, and keep the credit union running efficiently. Leadership training is a powerful way to utilize and maximize the efficiencies of credit union managers and supervisors. The paper examines the successful leadership training program at GECU in El Paso, Texas, describes how it works well, and what other credit unions can take away from its example. Also released is “LEAN--A Diet Credit Unions and Members Can Benefit From,” which examines the underlying principles and discipline of LEAN process review. At LEAN’s core is the idea of re-engineering a selected task and eliminating unnecessary, outdated and redundant steps. The people most connected to a selected task are considered to be the most experienced as opposed to rank within the credit union. Frontline personnel are a key part of cross-functional teams and are engaged in deciphering root causes of waste, determining solutions, and assisting in their implementation. The paper includes a step-by-step overview of LEAN process review with real-life credit union examples and insights from experts. Additional guidance is given on project and team selection, the emotional dynamics and interactions that can occur during a LEAN review, and the boundaries of what LEAN can and cannot do. Its target audience is human resource and training development personnel, but the paper also may prove valuable to other members of senior management and board personnel. For more information, use the links.

CU System briefs (04/21/2010)

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* MADISON, Wis. (4/22/10)--Anne Cochran, president/CEO of the Louisiana Credit Union League, has been elected treasurer of the World Council of Credit Unions (WOCCU). Cochran has two decades of experience in the credit union movement, serving on various Credit Union National Association and American Association of Credit Union League committees. She also has been an avid WOCCU supporter for 10 years. Some of Cochran's accomplishments include fostering a partnership with the Louisiana league, WOCCU, the Iowa Credit Union League and its subsidiary Coopera and Mexico's Caha Morelia Valladolid credit union to launch a program to teach New Orleans' credit unions to better serve the Hispanic market. "As I continue to work in Louisiana to broaden the reach of the credit union movement, lessons and fruit of the work that is ongoing in our home state can be useful to emerging credit unions in other countries," she said. "I am honored to represent CUNA and the U.S. credit union movement at the international level. I share WOCCU's focus in attracting donor funding to implement development projects where great need for credit unions services exist." Among her other contributions, Cochran has presented educational training programs in Uganda, sponsored and hosted the chairman of the Uganda League of Credit Unions for one week in New Orleans, and was inducted into WOCCU's International Executive Volunteer Corps in 2009, which recognizes individuals for their years of valuable technical assistance and international service to support WOCCU's efforts in developing countries. "Her passion has developed from perseverance, growth under pressure, an understanding of the varying needs of credit unions worldwide and bringing financial dignity to current and potential membership in credit unions throughout the world," said the Louisiana league… * HERNDON, Va. (4/22/10)--The Northwest FCU Foundation sponsored Super Saturday at Herndon High School, presented by the Dulles Regional Chamber of Commerce’s Education Council with College Access Fairfax and Fairfax County Public Schools. The free event helped Fairfax County students and parents complete and submit the electronic version of the Free Application for Federal Student Aid (FASFA). More than 90 individuals attended the event. In addition to sponsoring Super Saturday, four $100 book scholarships were awarded to students at the event ... * SACO, Maine (4/22/10)--PeoplesChoice CU, Saco, Maine, donated
Click to view larger image Click for larger view
$7,606 to 11 York County food pantries. The credit union raised the money as part of the total $375,924 raised by the Maine Credit Unions’ Campaign for Ending Hunger. To raise money, the credit union held a golf tournament, bake sales and casual days. All of the funds raised will stay in-state. Since 1990, Maine’s credit unions have raised more than $3.5 million to help hunger in Maine. PeoplesChoice has $120 million in assets. (Photo provided by PeoplesChoice CU) ... * LIVINGSTON, Texas (4/22/10)--William Josef Berkley, who was convicted of killing 18-year-old Sophia Martinez in 2000, is scheduled to be executed today in Huntsville, Texas (Associated Press April 21). A man climbed into Martinez’s car while she was withdrawing money from an ATM at a Government Employees CU branch. He forced her to withdraw $200 from the ATM before the two drove off. Two days later, Martinez’s body was found in the desert. She had been shot in the head five times and there was evidence that she had been raped, the newspaper said. Attorneys had tried this week to put off Berkley’s lethal injection. Government Employees CU, El Paso, Texas, has $1.6 billion in assets ...

NY CUs make their case at state GAC

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ALBANY, N.Y. (4/22/10)--Ninety New York credit union representatives attended the Credit Union Association of New York’s annual state Governmental Affairs Conference in Albany. The group discussed political issues and opportunities affecting credit unions.
Mark Pfisterer, president/CEO, Americu CU, questioned state banking examiners during a roundtable meeting at the Credit Union Association of New York’s annual governmental affairs conference in Albany. (Photo provided by the Credit Union Association of New York)
The event opened with a state-chartered credit union roundtable featuring New York State Banking Department Principal Examiner Marcel Baruth and Banking Examiner Richard Cordner, who spoke about credit unions’ strong performance in 2009. Association staff and leaders also joined a coalition of local groups and legislators at a press conference in support of municipal depository choice, which would allow government entities to deposit tax dollars in credit unions or local banks. Speakers at the press conference included: William Mellin, president/CEO, Credit Union Association of New York; Albany Mayor Jerry Jennings; Michael Breslin, Albany County executive; State Reps. Tim Gordon (I-Bethlehem), Carl Heastie (D-Bronx) and Harvey Weisenberg (D-Long Island); State Sens. Kevin Parker (D-Brooklyn) and Craig Johnson (D-Long Island); Vestal Town Supervisor Pete Andreasen; and Mike Tobler of Albany Firemen’s FCU. Credit union representatives also met with more than 100 senators and assembly members, urging lawmakers to support the municipal deposit legislation. “Municipal deposit choice puts more public dollars back on Main Street,” Mellin said. John McKechnie, National Credit Union Administration director of public and congressional affairs, discussed the political climate in Washington, D.C. and how it will affect credit unions, and Michael Hook, founding partner of Greener and Hook, discussed upcoming state and national elections.

W. Va. league elects officers

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CHARLESTON, W. Va. (4/22/10)--The West Virginia Credit Union League has re-elected Tom Walker as chairman of its board. The elections were conducted during the league’s annual meeting Saturday in Charleston. Walker is a 40-year veteran of the credit union movement and a director of Universal FCU, Huntington. Other officers elected include:
* First Vice Chairman Dave Van Middlesworth, Eastern Panhandle FCU, Martinsburg; * Second Vice Chairman Donna Gordon, Mercer Co. WV FCU, Bluefield; * Treasurer Doris Cunningham, Members Choice WV FCU, Charleston; and * Secretary Mike Tucker, West Virginia Central CU, Parkersburg.
Also at the meeting, Janet Stagani, Tin Mill EFCU, Weirton, received the William Bryan Hawkins Award. The award is the league’s highest annual recognition of a credit union volunteer. Barbara Roberts, Raleigh Co. Educators FCU, Beckley, received the Pacesetter Award. The award symbolizes excellence among credit union staff in West Virginia.

NY lawmakers push for lifting MBL caps

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ALBANY, N.Y. (4/21/10)--U.S. Sen. Kristen Gillibrand (D-N.Y.) and U.S. Rep. Paul Tonko (D-N.Y.) pushed for legislation that would lift the caps on member business lending at credit unions during an event at SEFCU in Albany. Mayor Jerry Jennings, Credit Union Association of New York President/CEO William Mellin and several other local business leaders attended the event. Credit unions are required to cap their lending at 12.25% of their assets, but would like the cap to be raised to 25% of total assets and increase the minimum business loan subject to the cap to $250,000 from $50,000. Gillibrand is working on a bill that would increase those caps to include in an upcoming small business jobs package to be drafted by Congress. “This commonsense legislation would free up lending at not-for-profit credit unions in every corner of America to small businesses,” she said. “This would give small businesses more of the capital they need to get off the ground, grow and get thousands of Americans get back to work.” Tonko added, “This bill will deliver a new and badly needed stream of capital through or credit unions, which will help new and existing small businesses invest, expand and create new jobs, and greatly improve our economic outcome.” If the cap was raised, SEFCU could provide another $260 million in business loans, said Michael J. Castellana, SEFCU president/CEO. “I thank Sen. Gillibrand for her leadership on this legislation that would help New York’s credit unions help small businesses,” Mellin said. “Not only has she lent her name to the legislation, Gillibrand has been a vocal advocate with Sen. Charles Schumer (D-N.Y.) to see this legislation enacted. We applaud the senator’s recognition of SEFCU’s contributions to the community, and appreciate her support for credit unions across New York.” Gillibrand also has spoken at Bethpage (N.Y.) FCU and written an op-ed piece explaining why she supports lifting the caps on member business lending.

Conference Board CEO confidence slightly declines

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FARMERS BRANCH, Texas (4/21/10)--The Conference Board’s Measure of CEO Confidence decreased slightly in first quarter 2010 after it had increased in the fourth quarter 2009. The Conference Board is nonprofit, private business research firm based in New York City. The measure decreased to 62, down from 64 in the last quarter. A reading of more than 50 points reflects more positive than negative responses (LoneStar Leaguer April 19). “CEOs continue to rate current economic and industry conditions favorably, but expectations are that the pace of growth will not pick up in the months ahead,” said Lynn Franco, director of The Conference Board Consumer Research Center. “Hiring plans are improved from last year, but less than a third expects employment levels to increase this year.” CEOs’ assessment of current economic conditions is less favorable. About 71% said conditions have improved, compared with six months ago, down from 75% last quarter. However, in assessing their own industries, business leaders’ attitudes improved, with 59% claiming conditions are now better, compared with 54% last quarter. Looking ahead six months, CEOs are slightly less optimistic. Roughly 52% of business leaders expect economic conditions to improve in the next six months, down from 58% last quarter. Expectations for their own industries also are less positive, with 42% of CEOs anticipating an improvement in the months ahead, down from 45% last quarter. More than 30% of CEOs anticipate an increase in employment levels in their industry, up significantly from less than 3% a year ago. The proportion of CEOs who anticipate a decrease in hiring nosedived to 22% from 86% a year ago.

More members use cash back at POS

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TALLAHASSEE, Fla. (4/21/10)--U.S. credit-union-member behavior has evolved since 2009, with 63% of respondents citing that their members’ of point-of-sale (POS) use has increased since then, according to a new survey. Credit Union 24 conducted the survey in February at the Credit Union National Association’ Governmental Affairs Conference.
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Thirty-seven percent of respondents said that POS usage has remained steady since 2009, and 0% of respondents cited that POS use has decreased among their membership (see Figure No. 1). Use of POS for cash-back among credit unions members is also on the incline, with a large majority (89%) of credit union leaders citing that up to 40% of their membership uses POS for cash-back. Why is POS for cash-back increasing? “More and more merchants accept POS transactions [for cash-back]--fast-food restaurants, service stations and the like,” Jim Gowan, Credit Union 24 executive vice president and chief operating officer, told News Now. “People are just using debit cards more. The economic downturn helped cause that. But also with POS, members can track expenses more through online banking and can budget better.” Yet while POS use is increasing, ATM use appears to be gradually slowing down, with 7% of credit union leaders citing that their members’ use of ATMs has decreased since 2009. Only 50% cited an increase in ATM use over 2009 (see Figure No. 2).
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“The younger generation now is using debit cards like cash---the way my kids do,” Gowan said. “The debit transactions have been outpacing credit card transactions. Debit card use is growing faster at POS versus signature debit transactions, though both are going up. Also, debit card use has outpaced credit card use for several years. “Traditionally, lots of credit unions encourage members to use signature debit over Personal Identification Number (PIN) debit because the interchange was higher,” he added. “But PIN is safer than signature because of fraud, so credit unions should note that. POS is a good opportunity to increase income for credit unions.” Also, by changing member behavior so they get cash back at POS, credit unions receive money on the interchange fee from the transaction, but eliminate the ATM charge they would have to pay out, Gowan said. “So it’s a good double whammy because there’s no expense for the credit union,” he added. Credit Union 24 is a member-owned, full-service, deposit-taking ATM and POS network with multiple processor links, hundreds of thousands of POS locations at national retailers and local merchants, and more than 100,000 ATM terminals nationwide.

White paper suggests financial training wheels for Gen Y

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ST. PETERSBURG, Fla. (4/21/10)--Thirty-six percent of Generation Y opened a new financial account in 2009--leading all other age groups in signing up for new savings, debit and primary checking accounts. Building financial relationships with this consumer segment is the topic of a new white paper from PSCU Financial Services. The paper, “Building a Gen Y Continuum,” is available free at www.projectnewage.com and discusses what credit unions can do to attract members of this age group. For instance, credit unions can consider offering them reloadable prepaid cards as “financial training wheels,” which can teach youth how to manage a budget. Teen checking accounts with parental oversight also can be offered to high school students, along with debit cards tied to a teen checking or savings account--with parental cosigners. The youth will then be a good prospect for products from the credit union such as student or auto loans, savings and checking accounts, when they reach adulthood. “Credit unions are in an excellent position to attract these young adults because of our member-friendly practices and because their parents may well be members of a credit union,” said David J. Serlo, president, PSCU Financial Services. “Credit unions can build important long-term relationships by promoting and offering financial products that are designed to serve the evolving needs of this generation with an appropriate level of parental involvement along the way. Because of their numbers, this generation is critical to the success of our industry.” PSCU Financial Services also offers www.GiveMe20.com, a site to help credit unions attract Generation Y through interactions with young adults and their parents. PSCU Financial Services is a credit union service organization based in St. Petersburg, Fla.

Turned away by bank small biz owner gets help from CU

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MADISON, Wis. (4/21/10)--Melissa Destree needed a line of credit for her Madison, Wis.-based architectural firm last year, but when she went to her longtime bank, a banker told her to lay off an employee rather than give her more credit. Destree, owner of Destree Design Architects, said she had gone through cost-cutting and did not want to fire anyone because her six-person staff was crucial to business. So Destree went to Summit CU, Madison, Wis., for help (Milwaukee Journal Sentinel April 17). Within five days, Summit gave her a loan at a lower interest rate than the bank to pay off her debt to the bank, and a $50,000 line of credit. Brett Thompson, CEO of the Wisconsin Credit Union League, told the newspaper that credit unions are ready to “pick up the slack from banks that have financial troubles or are nervous about lending in the current economic environment.” Credit unions are lobbying to increase their member business lending caps to 25% of total assets from 12.25%, but bankers have argued that the higher cap would give credit unions an unfair advantage. Thompson told the newspaper there is “no logical reason” why the caps should not be raised. Credit unions have the willingness, market and desire to make business loans, he said. The Credit Union National Association estimates that lifting the cap would generate $362 million in new credit union business loans in Wisconsin and $10 billion nationally in the first year.

CU System briefs (04/20/2010)

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* OKLAHOMA CITY (4/21/10)--Allegiance CU, Oklahoma City, formerly Federal Employees CU, is remembering the blast that killed 18 of its employees and two of its volunteers during the bombing of the Alfred P. Murrah Federal Building in Oklahoma City, April 19, 1995. The credit union noted the bombing on its website, Facebook and Twitter pages. “We remember our co-workers, friends, and loved ones whose lives were ended by the events of April 19, 1995,” the credit union said on its Facebook page. The credit union also posted a video of how the bombing changed the credit union ... * NEW CASTLE, Del. (4/21/10)--A Chevrolet suburban crashed into the building that houses New Castle (Del.) County School Employees FCU, causing $20,000 worth of damage. Police said a 17-year-old boy was at the wheel of the vehicle when he lost control and hit a parked car and the front wall of the credit union’s office. The credit union was closed for business on the day of the accident. Repairs will take about two weeks (Together April 15). A police officer was stationed in front of the building on the day of the accident and a security will be on the property until reconstruction is finished. “All credit unions should ensure that their disaster plans are up to date, because you never know what might happen,” said CEO Terri Keene. “This was the last type of disaster that we expected.” The credit union did not have to activate its disaster plan but did notify CUNA Mutual, its data processor and the National Credit Union Administration. (Photo provided by the Delaware Credit Union League) ... * FARMERS BRANCH, Texas (4/21/10)--The Texas Credit Union League and the Michigan Credit Union League will offer a webinar Wednesday, “Saving Money by Going Green,” from 12 p.m. to 1:30 p.m. CT. During the event, Jan and Colleen Byrnes, co-founders of A World of Green, a green consulting company, will share how credit unions can get everyone on their institution involved in green efforts, reduce their organization’s impact on the environment, discover the rewards for making an effort, and identify ways to make a difference. Registration for the webinar is on the Texas league’s website ...

CUNAs Mica WOCCU delegation in Haiti

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MADISON, Wis. and WASHINGTON (4/21/10)--Credit Union National Association President/CEO Dan Mica is part of a delegation of credit unions and organizations, led by World Council of Credit Unions (WOCCU) President/CEO Pete Crear, that will arrive in Haiti today to meet with credit unions and members suffering from the effects of Haiti's Jan. 12 earthquake. The delegation representing WOCCU, CUNA, state credit union leagues, and major credit unions and associations met in Miami Tuesday for a briefing from WOCCU staff and Kathleen Felix, the Haitian Diaspora liaison to Miami from Fonkoze, a Haitian microfinance organization with offices in the U.S. Discussion topics included the economic impact of Haitian emigration, financial literacy work and the impact of Haiti's underdeveloped financial infrastructure. More than 400,000 people in Haiti are served by 220 member-owned credit unions. Several credit unions were destroyed in the 7.0-magnitude earthquake. “Our challenge will be to help the strongest credit unions get back on their feet to help Haitians help themselves and their communities rebuild their lives through small loans and a safe place to save,” Mica said. While in Haiti, the delegation will visit several caisses populaires (credit unions), all of which have operated from tents since the destruction of their buildings. The tents are donated by WOCCU. (See resource link: “WOCCU tents help Haiti office stay safe, productive.”) WOCCU Haiti program director Greta Greathouse, who led the delegation, has taken on additional work of leading the credit union disaster relief and rebuilding efforts. WOCCU has been working with Haiti's credit unions since July in a project funded by the U.S. Agency for International Development through the Academy for Educational Development. Mica and the rest of the delegation will visit damaged credit unions in Port-au-Prince and the earthquake epicenter at Leogane, to hear first-hand how the quake affected staff and members of the credit unions. (See resource link: “Haiti's CUs face grave issues on capital.”) Barry Jolette is the chairman of the WOCCU board. In addition to Mica and Crear, members of the delegation include:
* Sue Albrecht, senior vice president, international division, CUNA Mutual Group, Madison, Wis.; * Valerie Breunig, executive director, Worldwide Foundation for Credit Unions, Madison; * Bill Cheney, president/CEO, California and Nevada Credit Union Leagues, Rancho Cucamonga, Calif.; * Josh Fetting, WOCCU partnership program director, Madison; * Virginio Gerardo, executive director, Asociacion de Instituciones Rurales de Ahorro y Credito Inc., Santo Domingo, Dominican Republic; * Linda Hanson, vice president, strategic planning, Schools First FCU, Santa Ana, Calif.; * Bert Hash, president/CEO, Municipal Employees CU of Baltimore (Md.) Inc.; * Jose Joaquin Suriel, Asociacion de Instituciones Rurales de Ahorro y Credito Inc., Santa Domingo, Dominican Republic; * Fred Johnson, president/CEO, Credit Union Executives Society, Madison; * Barry Jolette, president/CEO, San Mateo CU, Redwood City, Calif.; * Alan Kaufman, CEO, Melrose CU, Briarwood, N.Y.; * Mike Muckian, WOCCU senior communications manager, Madison; * Cassie Rademaekers, WOCCU program specialist, Africa/Asia/Europe, Madison; * Brett Thompson, president/CEO, Wisconsin Credit Union League, Pewaukee, Wis.; * Ralph Wharton, CEO, Caribbean Confederation of Credit Unions, Basseterre, St. Kitts and Nevis; and * Marlene Shiels, WOCCU board member and CEO, Capital CU, Edinburgh, Scotland.
More than 1,000 donors have contributed to the WOCCU Haitian Relief Fund, including U.S. credit unions contributing through CUAid. coop. The fund received more than $1 million in donations from the movements. For more information on the WOCCU Supporters program or the Haiti Relief Fund, contact Valerie Breunig, executive director of Worldwide Foundation for Credit Unions, at vbreunig@woccu.org or at 608-395-2055.

CUs compete with dealers on auto financing

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BAKERSFIELD, Calif. (4/20/10)--Credit unions “must go toe-to-toe with automobile manufacturers hungry for customers” when offering auto loans to credit union members, according to a California newspaper. However, credit unions can emphasize their member service advantage. The Bakersfield Californian reported Friday that competition is tough for auto financing between credit unions and auto manufacturers. Auto manufacturers can offer financing at 0% interest because they can make money in other ways--while credit unions cannot. It’s hard to compete with zero percent interest, said Doug Kileen, president/CEO of Safe 1 CU, Bakersfield. Steve Renock, president/CEO of Kern Schools FCU, said his credit union hasn’t changed its strategies in auto financing but recognized that there is more competition from manufacturers’ captive finance companies. While competition may be tight, credit unions have an advantage over manufacturers. Credit unions can respond to their members’ needs--like extend the term of a loan beyond what manufacturers offer, said Linda Crosby, senior vice president of financial services at Kern FCU, Bakersfield. Credit unions need to speak out about the potential drawbacks of manufacturers’ low interest deals--which can mean shorter loan terms and bigger monthly payments, added Bill Meyer, communicators for CUDL, an Ontario, Calif.-based indirect auto lender for credit unions. The deals offered by captive finance companies also may only be available to those with good credit, Meyer added.

Missouri CU Assoc. involved with two bills affecting CUs

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JEFFERSON CITY, Mo. (4/20/10)--The Missouri Credit Union Association (MCUA) said it helped kill a “revenue enhancement” bill that would require financial institutions to run a data match for the state to help collect from delinquent taxpayers. The bill was considered in the Missouri state Senate last week. The Senate spent all last week debating appropriations bills that they received from the state House the prior week. The Senate finished debate on April 15, and the bills will now go to conference committee. This has been a serious business with lawmakers who are struggling to make the appropriate cuts to bring the state to a balanced budget without hurting vital state programs, MCUA said (The Missouri difference April 16). Also, MCUA’s Halley Hayden, director of communications, and Doug Macias, field representative, helped out lobbying last week as the association prepared for a bill to come to the floor that would allow highway credit unions to stay in Missouri Department of Transportation (MoDOT) facilities. The Missouri Highways and Transportation Commission approved a staff recommendation Wednesday to sever ties with the 10 credit unions located in MoDOT facilities in the state, according to MCUA (News Now March 12). The credit unions were told Jan. 21 that they would be required to vacate their locations by Sept. 30. They would no longer be able to process payroll and benefits through MoDOT after that date. Credit union employees were on MoDOT's salary and benefits plan but credit unions fully reimbursed MoDOT for those costs, MCUA said. The legislative session ends May 14. In the next few weeks, the House and Senate will dispense with rules regarding time limits on how long amendments must be filed prior to being offered as well as time frames on how bills are reported between the two houses of the General Assembly. When that starts, MCUA said its work at the capitol will begin in earnest.

INY Daily NewsI endorses municipal deposit choice

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NEW YORK (4/20/10)--The New York Daily News Sunday endorsed municipal deposit choice, which would allow New York government agencies to put their money into credit unions and community banks. The state Senate already has passed a budget resolution with support for municipal deposit choice. Currently, the law gives corporate banks a monopoly on municipal deposits. “There’s no earthly reason why the city should be barred from [placing its money in credit unions and community banks],” the paper said. “Allowing the Bloomberg administration to deposit public funds in these credit unions makes all the sense in the world,” the paper added. “But it will require Albany lawmakers to wake up and realize that, in this election year, voters will be keeping close tabs on which pols supported Wall Street over Main Street.” Credit unions offer consumers great deals, the newspaper said. “Small but effective institutions on the lower East Side, in the South Bronx, East Harlem and Central Brooklyn have been helping working-class families save money, send kids to schools and start home-based businesses,” the paper added.

White paper from CUNA Councils focuses on CU mergers

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MADISON, Wis. (4/20/10)--The credit union merger landscape is shifting in ways that are both subtle and dramatic, according to a CUNA Councils white paper. More than one-third of all credit unions operating in 2008, for example, had participated in at least one merger between 1979 and 2008. As a result, a growing number of credit union executives have been through multiple mergers and have developed a merger competency that will likely become part of an essential skill set for CEOs and senior management during the next decade. That’s the finding of a new white paper, “Developing a Merger Competency,” sponsored by the six CUNA Councils. The paper looks at many areas surrounding credit union mergers including the rationale behind many mergers, roles of staff involved and board, effective mergers, mergers to reject, members point of view, and more. Attitudes also are evolving; mergers are no longer considered the last resort for a failing institution--in some cases, they are part of a thoughtful strategy for healthy credit unions. A merger, like most financial decisions, may at first seem to be about operations and numbers, but its success, will hinge on whether the emotions and culture of the two parties involved were respected and treated fairly, the paper noted. Mergers sometimes flounder because they focus on the mechanics--financials, operations, products, services--when merging talent and traditions from both organizations is often the critical element. While integrating two cultures, capable leaders know the importance of symbols and signals in communicating with employees about change. Alan Peppers, CEO of Westerra CU, a $1.2 billion asset, Denver-based credit union, brought four credit unions together through mergers in the last five years. Emphasizing the importance of being proud of one’s past, the organization developed a museum to preserve the history of the four organizations, which includes a “Spirit of Volunteerism” wall honoring past chairmen and historical documents from each credit union. “The most challenging part of any merger is the cultural integration, winning the hearts and minds of employees and members,” Peppers said. Westerra focuses efforts on the integration process by using face-to-face communication in groups of 10 to 15 employees. The credit union follows up by using a third party to facilitate focus groups to ask employees how they did their work, identifying any gaps between the two cultures. By identifying the gaps, it helped redefine the mission, vision and values of the credit union that would become Westerra. This was then followed by ongoing electronic opinion surveys. For more information, use the links.

WOCCU to Basel Promote financial community diversity

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MADISON, Wis. (4/20/10)--The stability provided by smaller, community-based financial institutions is critical in keeping the overall economies of communities and countries upright when the growth schemes of large, complex banks go awry, World Council of Credit Unions (WOCCU) told the Basel Committee on Banking Supervision. That key lesson was learned by many during the 2009 global economic crisis. WOCCU said it would like to make sure new recommendations put forth by the Basel Committee not only recognize this fact, but offer provisions that don’t penalize smaller institutions, especially credit unions. The new guidelines, released for public comment in December and adapted with guidance from the Group of 20 (G-20) nations in response to last year’s global economic crisis, recognize for the first time differences between large for-profit financial corporations and non-joint stock companies, which include mutuals, cooperatives and credit unions. WOCCU sought input from its member organizations worldwide to craft two April 16 response letters that ensure these differences and other factors that favorably affect financial cooperatives appear in the final guidelines. “The presence of community-based, not-for-profit financial institutions has been a redeeming aspect of financial sectors during the great recession, and they have aided many economies in finding solutions to harsh economic problems,” wrote Dave Grace, WOCCU vice president of association services and the letters' author. “It is imperative that the Basel Committee's work not only do no harm to financial cooperatives, but actively promote diversity of the financial sector.” WOCCU has submitted its ideas and suggestions for consideration by the Basel Committee in the past, and had met with committee Chairman Nout Wellink in 2009 to make the case for credit unions. In response, current amendments to the Basel II Accord reflect a greater understanding of the different structure and nature of financial cooperatives. The reform package covers key areas of interest to credit unions:
* Raising the quality, consistency and transparency of the capital base. The new guidelines seek to ensure that financial institutions move to a higher capital standard that promotes long-term stability and sustainable growth, enabling the banking system to better absorb losses on existing banks and banks that have gone out of business. The committee proposes that Tier 1 capital be defined as common shares and retained earnings and tailored accordingly for credit unions’ structure. Tier 2 capital instruments must be better aligned and Tier 3 capital instruments should be eliminated. * Reducing procyclicality and promoting countercyclical buffers. A countercyclical capital framework will help better stabilize the banking system than a procyclical one, dampening rather than amplifying economic and financial shocks. To this end, adequate capital buffers at individual institutions should be established. The committee also is promoting more forward-looking provisioning based on expected losses that captures actual losses more transparently and is less procyclical than the current model.
On April 7, WOCCU held a webinar its members, global financial regulators and Basel Committee staff to discuss the impact of proposed changes to the Basel II Accord. Input from the webinar and from member groups served as the basis for WOCCU's response letters, according to Grace. “With the exception of recognizing that a cooperative's ownership shares qualify as Tier 1 capital, the committee's proposals do little to aid credit union development,” Grace said. “We strongly urge the Basel Committee to more actively enable the development of such institutions and serve as a counter-weight to the too-big-to-fail entities by ensuring credit unions access to deposit insurance systems, central bank liquidity windows, payment/settlement systems and card networks. “We also encourage prudential, but proportional supervision of the sector to help ensure that local community-based financial institutions can support the industry's financial stability,” Grace added. For more information, use the link.

Local biz mag Higher MBL caps could help Idaho

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BOISE, Idaho (4/20/10)--An Idaho business magazine recently noted that raising the caps on member business lending (MBL) at credit unions in the state could help spur Idaho’s economy. U.S. Rep. Mike Simpson (R-Idaho), who is on the committee reviewing the MBL bill, told The Idaho Business Review that businesses in Idaho have shared with him the difficulty they’ve had in securing the loans they need for their businesses. “By raising the cap on credit union member business lending, we can help ensure that they have access to the credit they need to do so,” Simpson told the newspaper. Lifting the caps on member business lending at credit unions--to 25% from 12.25%--could help spur the economy, said Valerie Brooks, director of regulatory and governmental affairs for the Idaho Credit Union League. “If a small business can borrow the capital it needs to expand, it would make sense to help that business to grow, thus being able to hire additional employees,” Brooks told the newspaper. Brooks added that the cap increases are necessary because some credit unions have made loans above $50,000, which means the loans must be reported to federal regulators and applied toward the credit unions’ lending cap. Idaho Advantage CU, Boise, has been offering small business loans since fall 2009. Pat Vaughn, president, said the program is aimed toward “mom-and-pop businesses.” “I think we do a much better job of handling these small business loans than some banks,” he said.

NCUF offers new grants for CU innovations (04/19/2010)

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WASHINGTON (4/20/10)--Credit union organizations are eligible to apply for new Innovation Grants from the National Credit Union Foundation (NCUF) through June 30. Innovation Grants are aligned with NCUF’s signature program, REAL Solutions. While participation in REAL Solutions is not required to apply for a grant, NCUF is seeking grant applications in any of REAL Solutions’ five service areas:
* Financial Education--Innovation Grants assist credit union organizations participating in national financial education programs including Biz Kid$ and the National Endowment for Financial Education (NEFE). Innovation Grants also support other initiatives consistent with the education components of REAL Solutions: financial counseling, product awareness and staff training. * Transaction Services--Innovation Grants support transaction services that help credit unions attract underserved consumers. Examples include check cashing, money orders, prepaid stored value cards, remittances, second chance/fresh start checking, and tax preparation. * Savings--Innovation Grants support programs that help credit union members with low wealth establish and maintain savings. Examples include prize-based savings, safe accounts, savings challenges, and step-up certificates of deposit. * Credit--Innovation Grants support initiatives that help non-prime borrowers build and improve credit through credit unions. Examples include alternative credit reports, citizenship loans, first and last rent loans, flexible loan policies, non-prime used car loans, score builder loans, and thin file loans. * Homeownership--Innovation Grants support responsible programs that help credit union members with lower credit scores qualify as first-time homebuyers. Examples include foreclosure assistance loans, green loans, Home Loan Payment Relief mortgages, Individual Taxpayer ID Number loans, and timely repayment rewards.
Eligible applicants include credit unions, credit union service organizations, state credit union associations, state credit union foundations, and any other organizations owned or controlled by credit unions. How many grant dollars are available depends on how much credit union organizations invest in the Community Investment Fund.

CU System briefs (04/19/2010)

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* MADISON, Wis. (4/20/10)--Representatives from credit unions in North and South Carolina competed in a charity golf event that
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raised more than $67,000 for the Victory Junction Gang Camp, a NASCAR-themed facility for chronically and terminally ill children. The event, the Sixth Annual Carolinas Cup, March 28-30, was hosted by the Carolinas Credit Union Foundation, the North and South Carolina credit union leagues and CUNA Mutual Group. The camp was founded by NASCAR driver Kyle Petty and his wife, Pattie, in memory of their son, Adam, who was killed in a NASCAR racing accident in 2000. Pictured are John Slack, (left) president/CEO, Carolinas Credit Union Foundation, and Mike Defnet, senior vice president of sales, CUNA Mutual Group. (Photo provided by CUNA Mutual Group) ... * MERIDEN, Conn. (4/20/10)--The Credit Union League of Connecticut received a $7,500 grant from REAL Solutions through the National Credit Union Foundation for the development of financial education programs for graduating college students. The grant will allow the league to organize a financial education curriculum on an advanced level. The league will work with three Connecticut universities this year to implement a college program. REAL Solutions is a program of the foundation that works through state credit union leagues to help credit unions offer services that have proven successful for people of modest means ...

K.C. Police CU forms Code 1 CU subsidiary

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KANSAS CITY, Mo. (4/19/10)--K.C. Police CU Thursday launched a subsidiary, Code 1 CU, aiming its outreach at a specific select employee group (SEG)--public safety employees in the Kansas City metropolitan area and throughout the state of Missouri. Code 1 CU, "will allow us to strengthen and grow the credit union by allowing us to more effectively reach out to other public safety agencies in our existing field of membership," the credit union said in a member announcement on its website. The credit union's field of membership includes police officers, firefighters and public safety employees in Missouri and in three Kansas counties within the Kansas City metropolitan area. The new subsidiary would allow it to grow beyond its historic boundaries in the police department (Kansas City Business Journal April 14). Code 1 CU installed an ATM at the Independence Police Department headquarters and will seek other ATM or branch locations. K.C. Police CU was founded in 1934 as K.C. Policemen's CU. Today, it has about $95 million and about 8,000 members.

New Hampshire CUs see record growth of 10.7

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MANCHESTER, N.H. (4/19/10)--New Hampshire's credit unions grew 10.7% in aggregate assets during 2009--exceeding credit unions' overall national growth rate of 8.9%, according to the New Hampshire Credit Union League. The league cited year-end results from the National Credit Union Administration, which indicated that aggregate growth in assets for the state's credit unions grew to $4.68 billion--from $4.22 billion in 2008 (Business Wire April 15). Deposits at New Hampshire's credit unions rose $437 million. Loans increased by $276 million. Their membership rolls increased by 26,000 members to 452,000. "As the financial crisis unfolded in last year, more people discovered and embraced the credit union difference," said league President Daniel F. Egan Jr. "Simply put, locally member-owned credit unions devote all of their energy and resources to making sure that they meet the financial needs and expectations of their members here in New Hampshire right on Main Street." Savings were up 13.2% since the beginning of the year, compared with more than 10% nationally. Egan noted credit unions' competitive savings rates and cited data from the Credit Union National Association highlighting credit unions' performance over banks, and an October 2009 study by Pew Charitable Trust noting the credit union advantage on card services. Loans outstanding at New Hampshire credit unions grew by 9.7% to $3.13 billion in 2009, outpacing the national rate of 1.2%. Business loans at the Granite State's credit unions rose by 11.9% during the period. Egan noted that credit unions are ready and able to make more business loans, but they are bumping against an arbitrary cap that limits member business loans to 12.25% of assets. Credit unions are working to get the cap increased to 25% by Congress, he said.

CUs vital to small firms--letter in Detroit News

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DETROIT (4/19/10)--Small businesses are being squeezed from all directions and finding it tough to get capital in the current economy, but credit unions are in a unique position to make loans to help small businesses turn around. So says a letter in The Detroit News Friday from Michigan Credit Union League President/CEO David Adams. "Banks statewide have had to shrink their balance sheets to get stronger. Credit union small-business loans were up 18% in 2009 while banks' commercial and industrial loans fell by 68%. We all hope that banks return to full strength soon because our economy needs a strong banking sector. In the meantime, credit unions are a viable alternative for small businesses and they are doing their part to move Michigan forward," wrote Adams. He listed credit unions' Invest in America program that promotes buying American products such as vehicles through credit unions, and Michigan credit unions' partnership with the Small Business Financing Alliance, where 30 credit unions have made available $43 million for small business loans. He also mentioned credit unions "significantly lower" delinquency rates and the movement's push in Washington, D.C., to lift the 12.25% of assets cap on member business loans to 25%. for credit unions. The article also notes the Credit Union National Association's calculation that loans from credit unions could help provide more than 100,000 jobs across the nation.

Redwood CU offers discount on jumbo loans

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SANTA ROSA, Calif. (4/19/10)--To assist local homebuyers, Redwood CU (RCU) is offering special pricing on adjustable rate loans over $417,000--commonly known as jumbo loans. Buyers can receive the same rate as they would on a lower-priced mortgage, making it easier and more affordable to buy or refinance properties that would otherwise only qualify for jumbo rates, the credit union said. Although home prices in general declined over the past few years, Northern California is a desirable geographic location with many modest properties still within the jumbo loan price range, making the offer particularly relevant for residents seeking to purchase or refinance and stay local, RCU said. Typically, jumbo home loans have interest rates averaging about 0.75% higher than standard or “conforming” loan rates. Under RCU’s current pricing, buyers would see lower monthly payments and lower interest paid over the life of the loan, resulting in thousands of dollars in savings, RCU said. “There are many desirable areas in the North Bay and San Francisco where home prices are high and sales can be facilitated only with jumbo loans,” said Michael Conway, RCU senior vice president of lending. “By offering jumbo loans at conforming rates, we are helping local buyers better afford the cost of home ownership in a responsible manner, whether they are purchasing a new home, or refinancing their existing property.” The limited-time pricing is available on loans for California properties up to $1 million.

Final breach conspirator sentenced to five years

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BOSTON (4/19/10)--The sixth--and last--U.S. defendant in the data breach of TJX Cos. was sentenced in a Boston court Thursday to five years, $100,000 fine and three years of supervised release. Damon Patrick Toey, 25, allegedly helped TJX hacker Albert Gonzalez breach the networks of several companies in 2007 and 2008, and sold stolen card data (Wired.com April 15). Toey, who earned about $80,000 for his role in the crimes, had faced a maximum of 22 years in prison. He cooperated with authorities, leading investigators to two servers in Eastern Europe and providing them the encyption keys to access evidence. Authorities found 16.3 million stolen card numbers on a Latvian server and another 27.5 million stolen numbers on a server in Ukraine. Toey also helped persuade Gonzalez to plead guilty to the hacking, said prosecutors. In March, Gonzalez was sentenced to three concurrent sentences, totaling 20 years in prison, for hacking TJX, Hannaford Brothers, Heartland Payment Systems and more. TJX's breach, along with other high-profile breaches, cost credit unions millions when they had to reissue cards that were compromised in the attacks.

OregonSW Wash. raise 847600 for CUs for Kids

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BEAVERTON, Ore. (4/19/10)--With the 2009 fundraising tally for the Credit Unions for Kids campaign in Oregon and Southwest Washington complete, a new milestone has been achieved, with more than $847,600 raised during 2009. The tally brings total amount raised since 1986 by Oregon and Southwest Washington credit unions to more than $10.6 million. “Even in these challenging times credit unions, friends of credit unions and members have not forgotten the importance of helping the children in our region and holding true to the credit union mission of people helping people,” said Kasey Rockwell, director of credit union development for the Credit Union Association of Oregon. Rockwell is the statewide Credit Unions for Kids campaign coordinator.

Testimony on Vermont card bill slated for Wednesday

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MONTPELIER, Vt. (4/19/10)--Testimony will begin Wednesday in the Vermont House Commerce Committee on a bill that would endanger how and where Vermont credit union members’ credit and debit cards are accepted, according to the Association of Vermont Credit Unions (AVCU). ACVU President Joe Bergeron issued an action alert to the state’s credit unions with talking points aimed at helping legislators understand the consequences the bill would have for consumers and merchants (Newsline Express April 16). “Credit unions need to explain to member of House Commerce why this bill is bad for Vermont consumers and the potentially seriously negative consequences it could have on the entire state economy,” he said. AVCU is urging credit union leaders across the state to make contact with House Commerce members. The bill, S. 138, is part of a national strategic effort that seeks passage of interchange control legislation, AVCU said. It would:
* Allow merchants to set minimum and maximum amounts for acceptance of debit and credit cards; * Forbid electronic payments system network processors from imposing penalties or requirements on the way merchants advertise, thus allowing merchants to add a surcharge for customers using a credit or debit card in the state; and * Require a state regulatory study, due Dec. 15, 2011, to determine the economic impact on banks, credit unions and consumers of prohibiting electronic networks from inhibiting merchants as to whose cards they can not accept.

Vote for iCU Magazinesi 2010 CU Hero

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MADISON, Wis. (4/19/10)--Credit Union Magazine subscribers have nominated four individuals for the 2010 Credit Union Hero of the Year Award. Readers are asked to vote for the individual they think deserves the award. Nominees are:
* Leslie Ellis, CEO of Credit Union 1, Anchorage. Ellis assumed leadership of the credit union 25 years ago, at the credit union’s lowest point in terms of capital but also operational problems, and turned it around. * Augustine Kang (posthumous), first CEO of the Association of Asian Confederation of Credit Unions and special project director for the World Council of Credit Unions’ China project. Kang died in August. He was known by some as a “a man of the world” and “a humble giant.” * Dave Maus, CEO of Public Service CU, Denver, and a former Credit Union National Association chairman. Maus also received the 2009 Ally of the Year Award from Denver’s Women’s Vision Foundation. * Vic Thate, executive vice president of FAA CU, Oklahoma City. He has the nickname as the “godfather” of Credit Unions for Kids because he donated large portions of time and effort to the organization, a partner with Children’s Miracle Network.
Voting takes place through May 31. To vote, use the link. This year’s winner will be honored at The 1 Credit Union Conference in Las Vegas July 11-14 and will receive free conference registration and lodging. Last year’s winner was Cathie Tierney of Community First CU, Appleton, Wis.

Blaine discusses SECU decision on risk-based lending

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WASHINGTON (4/19/10)--State Employees’ CU of North Carolina (SECU) President/CEO Jim Blaine recently discussed SECU’s decision not to rely on risk-based lending, opting instead to consider each loan request on a case-by-case basis. “A credit score can tell you 10% will default, but not who will default. The reverse--90%-- will do exactly what they say they’ll do and pay their loans on time,” he said. “We look for the 90%.” The $19.6 billion credit union, based in Raleigh, N.C., is one of many credit unions increasing its loan portfolio and growing loans faster than the national average, said Callahan & Associates, a Washington, D.C.-based firm specializing in financial publications, software development, strategic planning and investment management for credit unions. At a time when banks saw their largest drop in lending since World War II, credit unions provided a record-breaking $271 billion in new and refinanced loans during 2009, a 7% increase over 2008, according to Credit Union Strategy and Performance (CUSP). Blaine’s message was captured in a new video component of the quarterly publication, CUSP, by Callahan & Associates. “Credit unions’ most important role is to make loans to members, and their cooperative system lets them do it very well,” says Alix Patterson, Callahan’s chief operating officer. “In fact, for the past 64 out of 65 years, credit unions have increased their loan portfolios.”

Its National CU Youth Week

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MADISON, Wis. (4/19/10)--National Credit Union Youth Week kicked off Sunday, and credit unions nationwide are celebrating the week with community-oriented activities.
Click to view larger image Chris Wolgamott, Meritrust CU, teaches eighth grade students about money during a Money$mart financial management camp at a middle school in Hutchinson, Kan.
This year’s theme is “Get in the Savings Game.” Youth Week, which is sponsored by the Credit Union National Association, ends Saturday. The National Saving Challenge takes place all month. So far, 386 credit unions have registered for the Saving Challenge. At this time last year, 397 had registered. Credit unions can register any time, up until they report results, according to Lin Standke, CUNA Youth Week manager. Standke noted that many credit unions are choosing activities that benefit the community to celebrate this year’s Youth Week. Electro Savings CU, St. Louis, Mo., is joining three other credit unions to donate $5 to the Children’s Miracle Network for every new youth account opened or $50 deposited into an existing youth account. WESC FCU, Casper, Wyo., is collecting new or slightly used sports equipment to be donated to the Special Olympics. NorState FCU, Madawaska, Maine, will donate $1 to local food pantries for every $10 deposit made into an Eager Beaver Youth Savings Account or each new NorState FCU Youth Savings Account opened. Donations help support local food pantries in our communities provide immediate assistance to needy families.
Click to view larger image Malynda Lightsey, Hutchinson CU, teaches students about the difference between simple and compound interest during a Money$mart financial management camp. (Photos provided by the Kansas Credit Union Association)
First CU, Chandler, Ariz., will give youth a free “Good Start Guide to Money” or a “How Much Does it Cost?” worksheets for younger children. Youth who open an account during Youth Week also will receive a free $5 deposit. In other activities, a Money$mart financial management camp created in partnership with the Kansas Credit Union Association and the Wheatbelt Chapter of Credit Unions was held April 15 at a middle school in Hutchinson, Kan. The camp provided students with an overview of how to use a credit card, saving, budgeting and cash management. The event was sponsored by the Kansas state treasurer’s office. “The students were engaged in activities and discussions regarding money and choices, goal-setting, savings, budgeting and credit,” said Michelle Kaberline, financial literacy coordinator, office of the state treasurer.

CU System briefs (04/16/2010)

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* DANA POINT, Calif. (4/19/10)--A record $200,000 was raised for the Children’s Miracle Network during the fifth annual California and
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Nevada Credit Unions for Kids Wine Auction March 26. Diana Dykstra, left, president/CEO of San Francisco Fire CU, generated $40,000 in pledges by shaving her head, having attendees then select a wig for her to wear during the event, and a cash paddle bid at the end of the live auction to remove her wig. Darren Williams, president/CEO of Wescom CU, Pasadena, raised $16,000 for promising not to cut his hair for a full year--until the next auction. Pictured are Dykstra and Williams. More than 230 people attended from 80 credit unions and other organizations. In addition to the California and Nevada Credit Union Leagues, corporate sponsors included CUDL, Financial Service Centers Cooperative Inc., CUNA Mutual Group, and CO-Financial Services. (Photo provided by the California and Nevada Credit Union League ) ... * BRADENTON, Fla. (4/19/10)--Tropicana FCU announced Thursday it will change its name to Manatee Community FCU, effective June 1 (BradentonHerald.com April 16). It is making the change to better reflect its position in the community, said credit union officials. According to CEO Billy Woods, the name reflects its membership base better. The Tropicana Co., will continue to be a part of the credit union's history, he told the Herald. The $24 million asset credit unions was chartered in 1958 ... * RALEIGH, N.C. (4/19/10)-- State Employees’ CU (SECU) members are providing funding through the SECU Foundation to benefit Hospice and
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Palliative Care of Iredell County (HPCIC), helping to expand hospice services in Iredell, N.C., and surrounding counties. The project, which will include a new six-bed wing, will be accompanied by an education center to assist in training staff to better serve end-of-life patients. The $250,000 grant check from the $17 billion asset, Raleigh, NC.-based credit union was presented at the hospice's annual meeting in March. A groundbreaking ceremony was held March 25 to officially kick off the project. Pictured are various HPCIC and SECU Foundation representatives, including SECU volunteer Advisory Board members Jo Beatty of Mooresville, N.C. and Harvey Pons of Statesville, N.C. (Photo provided by State Employees’ CU) …

Small biz employment grew slightly in March says Intuit

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MOUNTAIN VIEW, Calif. (4/16/10)--Employment for small business grew slightly more in March than in February, extending a trend that began in mid-2009, according to the Small Business Employment Index from Intuit Inc. Intuit Inc. includes Intuit Financial Services, a CUNA Strategic Services provider of online banking services to credit unions. Small business growth can translate into increased business for credit unions providing member business services or member business lending.. The index showed that March employment went up 0.25% , which projects to a 3% annual growth rate, said Intuit. That translates to roughly 50,000 new jobs in March and a slightly revised estimate of roughly 175,000 new jobs since June 2009, when the upward trend began. "All the numbers indicate a continuing recovery for small businesses that began in the summer of 2009," said Susan Woodward, an economist who helped Intuit create the recently launched monthly index. "And while the numbers may seem small, they show clearly that small businesses are hiring, and stopped trimming their payrolls last summer." The average compensation for all employees and hours worked per month for hourly employees were flat, said Intuit, at $2,562 per month and 103.1 hours worked. That translates to annual wages of $31,000 and a 24-hour work week. Small businesses are hiring, but with the excess of workers, they don't have to pay more to attract employees, said Woodward, a former chief economist of the U.S. Department of Housing and Urban Development and at the Securities and Exchange Commission. The index includes aggregate and anonymous employment data from about 50,000 small businesses.

Scot editor Put CUs in schools banks not fit to teach

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GLASGOW, Scot. (4/16/10)--A newspaper columnist in Scotland took the Royal Bank of Scotland to task for handing out promotional literature to students as part of money management classes. Instead, put credit unions in the schools, the article said. "Credit unions are all the good bits of banking and none of the bad. They lend at sensible rates and they pay sensible rates. [It is] Banking without the bull and the bonuses," wrote Lesley Campbell in the Daily Record (April 15). "Since we have an established network of well-run credit unions, managed by experts in responsible lending, why are they not in the schools instead of the banks?" Campbell asked. "A bank is not fit to teach money skills, just as a soft drinks manufacturer shouldn't be allowed to teach nutrition," said the article. Campbell had the chance to make the same points to the Scottish government at the invitation of the Association of British Credit Unions (ABCUL), the trade association for credit unions in the United Kingdom. "Get the banks out of schools and get credit unions to take their place," the article concluded.

Texas small biz owner urges removal of MBL cap

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FARMERS BRANCH, Texas (4/16/10)--Quentin and Melissa Gallagher, owners of Mesquite Oilfield Services in Monahans, Texas, and members of Ward County Teachers CU, Monahans, needed capital to expand their small business, so they turned to their credit union. With the help of the $11-million-asset credit union, the Gallaghers purchased much-needed digging equipment and a company truck, according to a letter they sent to their national legislators (LoneStar Leaguer April 15). They urged their legislators to lift the cap on member business loans (MBLs). “There was never an option when it came to who we would choose to help back our business--our credit union of course. They know our business,” the Gallaghers wrote in a letter to U.S. Rep. Mike Conaway (R-Texas) and U.S. Sens. Kay Bailey Hutchison (R-Texas) and John Cornyn (R-Texas). “We are proud of the fact that we have not only survived the latest downturn in the petroleum industry, but that we have also grown our business. We realize we are small in the big picture, but when you are welcomed and your lender is interested in what you do--not if your next payment will be on time--it sure helps. “We ask that you consider the removal of the maximum amount the credit union can have in member business loans,” the letter continued. “Small business borrowing is difficult as is and tying the hands of those who want to help us just doesn’t make sense.” The Texas Credit Union League (TCUL) encouraged credit union CEOs, board members and staff who work with small business in the state to contact legislators to urge their support of S. 2919, legislation that would raise the cap on MBLs.

Georgia Central economic symposium in June

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DULUTH, Ga. (4/16/10)--Georgia Central CU will host its 2010 Economic Symposium June 16-17 in Atlanta with economists, regulators, legislative experts and asset-liability management professionals to help attending credit unions plan for the future. The program includes topics aimed at helping credit unions manage their challenges in 2011 and grow in the future. Speakers include:
* Mike Schenk, vice president of economics and statistics at the Credit Union National Association (CUNA); * Richard Gose, senior vice president of political affairs, CUNA; * Rajeev Dhawan, director of the Economic Forecasting Center at the Robinson College of Business at Georgia State University; * Roger Tutterow, professor of economics at Mercer University; * Tim Gardner, sales executive, CUNA Mutual Group, who will discuss asset liability management; * Rob Braswell, commissioner of the Georgia Department of Banking and Finance; * Alonzo Swan, regional director of Region III at the National Credit Union Administration; * Greg Moore, president/CEO, Georgia Central CU; and * Cory Johnston, senior vice president and chief investment officer, Georgia Central CU.

Wis. league addresses banker opposition to MBL

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PEWAUKEE, Wis. (4/16/10)--Brett Thompson, president/CEO of the Wisconsin Credit Union League, addressed the Wisconsin Bankers Association’s response to a league April 8 press release about credit unions’ successful efforts to accommodate member business lending (MBL) needs. “Credit unions are eager to be part of a solution that keeps small businesses healthy and that keeps people in their jobs. Banks want to prevent that--all to the detriment of the Wisconsin economy and working families,” Thompson said Wednesday. “It's déjà vu all over again,” he continued. “The Wisconsin Bankers Association (WBA) keeps repeating the same factual inaccuracies over and over, apparently believing that tireless repetition will somehow make the statements true and deflect attention from banks’ recent poor performance in serving Wisconsin’s businesses and working families. Instead, it just weakens their credibility even more.” WBA’s April 9 press release posits that credit unions do a poor job of serving the low-to-moderate income populations and have strayed from the mission they were given an expensive corporate tax subsidy to serve. The bankers say that “tax-paying banks do a far better job of reaching underserved consumer than credit unions.” WBA opposes the federal legislation to expand business lending that “the credit union industry is ill-equipped to handle increased commercial lending.” Thompson rebutted:
* Wisconsin credit unions’ business lending was not subject to any cap for credit unions’ first 70 years of existence. Since the cap was put in place in 1998, there has been no evidence of systemic risk due to credit unions’ business lending. * The league has data illustrating more clearly banks’ recent financial woes. In 2009, banks’ loan losses were 2.36% compared with 0.59% for credit unions. * Regulators and small businesses alike support lifting the cap because it is good public policy. There's no cost to taxpayers, and the banks are not providing a solution.
“It’s time we ask ourselves--who do we believe? It’s either banks, which generate record profits when the economy is strong but turn their backs when working families struggle, or not-for-profit financial cooperatives that support working families regardless of the prevailing economic conditions,” Thompson concluded.

Heartland debit card to distribute financial aid

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PRINCETON, N.J. (4/16/10)--Heartland Payment Systems Campus Solutions division is offering a debit card linked to a student’s identification (ID) card that can be used to distribute financial aid in lieu of paper checks. Heartland’s Acceluraid uses a single financial account that can be integrated with a campus’s card system. The program gives students access to their financial aid refunds through a unified financial account that links to a prepaid campus identification card and a school-branded debit card. The card can be integrated with an ID card or used as a standalone, Heartland said. North Central Missouri College, Trenton, Mo., introduced the program in January. It distributed $2 million in financial aid to students. The funds can be used for online bill pay or accessed through free withdrawals from campus ATMs and cash-back options at participating merchants. “Acceluraid has transformed financial aid disbursement on our campus,” said Sharon Barnett, vice president of administrative services. “It enables our administration to save money on personnel costs, check issuance and reconciliation issues caused by delayed deliveries and lost or returned checks.” The college also plans to disburse its student payroll through the Heartland’s OneCard system in the near future, she said. Heartland Payment Systems received significant media attention when its processing system was breached in 2008. The company provides card processing services for financial institutions nationwide, including credit unions.

Louisiana House bill would eliminate cap on loan fees

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NEW ORLEANS (4/16/10)--The Louisiana House of Representatives voted Tuesday to get rid of a cap on upfront fees that banks charge for making consumer loans. Under the bill, authored by Rep. Jeff Arnold (D-Algiers), borrowers would not have the benefit of a $50-limit on loan origination fees and a $20-limit on documentation fees. The bill would allow banks to charge any amount agreed to by the borrower, relieving banks’ regulatory burden (The Times-Picayune April 14). The legislation also would put banks on the same “level playing field as credit unions,” which are not restricted by fees, the newspaper said. The Louisiana Credit Union League doesn’t expect the legislation to have a huge effect on credit unions, Lacey Hyer, league public relations specialist, told News Now. “Credit unions have always had the best [loan] rates,” she said. The league is aware of the legislation and is putting together an informational packet for lawmakers to reinforce the credit union difference, Hyer added.

CU System briefs (04/15/2010)

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* SALT LAKE CITY (4/16/10)--Mountain America CU, Salt Lake City, is a lead sponsor of one of Utah’s newest attractions--the Penguin Encounter at the Living Planet Aquarium. The aquarium recently held a Penguin Encounter VIP Party to introduce the Gentoo penguin exhibit to the Salt Lake community. More than 400 dignitaries and guests were on hand for the opening of the family attraction, which completes the Aquarium’s “Journey to South America” gallery. “Mountain America CU has been a founding sponsor of The Living Planet Aquarium since 2004,” said Brent Andersen, founder/CEO of the aquarium. “Its ongoing support has assisted us in achieving our mission to create a deeper understanding of Earth’s diverse ecosystems." (Photo provided by Mountain America CU) … * NEW BERLIN, Wis. (4/16/10)--Landmark CU, New Berlin, Wis., raised $29,000 for the Children’s Hospital Foundation by selling $1 Links
Click to view larger image Click for larger view
and $10 Hearts during its Credit Unions for Kids Chain of Hearts campaign. The amount raised is a 32% increase compared with last year.. From left are Landmark CU’s April Shorter, Karen Garcia, Roberta Cochrane, Monica Evans, Chuck Schuyler, Pi la Yang, Matea Maca and Marta Anderson. Credit unions have raised more than $73 million for the Children’s Miracle Network since the program began in 1996. Wisconsin credit unions raised more than $292,000 last year. Landmark CU has $1.43 billion in assets. (Photo provided by Landmark CU) ... * BOSSIER CITY, La. (4/16/10)--Carl M. Schneider III, who served key management positions with credit unions in Louisiana and Texas, died Tuesday in Shreveport, La. He was 66. He enjoyed more than 35 years in the financial industry. Schneider formerly served as president of Southwest 66 CU, Odessa, Texas, and as former chief operating officer at Barksdale FCU, Barksdale Air Force Base, La. He also served on the staff of the American Bankers Association (ABA) in Washington, D.C. (LoneStar Leaguer and Shreveport Times April 15). He chaired ABA's National School of Retail Banking and the Stonier Graduate School of Banking ...

N.Y. state officials op-ed backs muni-deposit choice

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ALBANY, N.Y. (4/16/10)--The commissioner of the New York City Department of Consumer Affairs and the state Assembly's assistant speaker pro tempore have written an op-ed item in support of municipal depository choice for the state in Albany's Times Union. In Thursday's article, Commissioner Jonathan Mintz and Assemblyman Harvey Weisenberg say that for nearly 100 years, New York municipalities have been prohibited from depositing taxpayer funds into credit unions, savings banks or savings and loans institutions, "based on an anachronistic law dating to a time before credit unions even existed." They wrote that credit unions "offer rates of return that are competitive with--and may be higher than--commercial banks. Credit unions and savings banks often provide low-income communities with access to loans that can help them start a business, purchase a home or meet other financial needs." Mintz and Weisenberg noted that local governments are "fighting for autonomy and asking the state to pass a law that lifts this prohibition," which would give them "greater freedom to decide where best to deposit taxpayer dollars--taking into account the safety of funds, pricing and other taxpayer benefits. Arbitrarily restricting deposits based on a century-old law means limiting competition and reducing options." They also referred to New York City Mayor Michael Bloomberg's plan to make $25 million in deposits available to credit unions and savings banks located in low- and moderate-income communities once state legislature passes municipal deposit reform. The Credit Union Association of New York thanked Mintz and Weisenberg for their action in support of municipal depository choice. Earlier this week the association conducted a press conference with a number of officials urging the state legislature to pass a muni-deposit choice bill. For the full article, use the link.

Raise the MBL cap says letter to Sun-Sentinel

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MIRAMAR, Fla. (4/15/10)--There is another way to infuse capital into the marketplace without using taxpayer's money: raise the member business lending (MBL) cap and let credit unions make more business loans, says an opinion-editorial by a South Florida credit union CEO in the South Florida Sun-Sentinel.com. Rich Helber, CEO of Tropical Financial Center CU, based in Miramar, Fla., points out in Wednesday's article that credit unions are asking Congress to lift the statutory limit on small business lending to 25% from 12.25%. Helber noted that in 1998, the Federal Credit Union Act was amended to expand credit union powers. "The bankers successfully lobbied to impose the arbitrary 12.25% cap on credit union MBL. It seems ironic, given many banks are now not lending to consumers and small businesses," he wrote. He pointed out the additional $10 billion that would be available for MBLs and the 108,000 jobs that could be created by helping businesses grow by lifting the cap. He noted that MBL bill, HR 3380, has 99 co-sponsors in the House, including six from Florida. For the full opinion, use the link.

Canadas small businesses favor CUs

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TORONTO (4/15/10)--Credit unions are favored by owners of Canada's smallest businesses, according to a study released Tuesday by the Canadian Federation of Independent Business (CFIB). CFIB surveyed 12,124 owners of Canadian businesses with fewer than 50 employees. It found that credit unions and Scotiabank have doubled their market share over the past two decades, while large banks such as Canadian Imperial Bank of Commerce, Royal Bank of Canada and National Bank lost one-fourth of their small business clients in tht period (CBC News April 13). The report, Banking on Better Service, singled out the Canadian Imperial Bank of Commerce as "far and away the worst bank when it comes to servicing Canada's smallest businesses." On a scale of 0 to 10, with 10 being best, credit unions scored tops in two categories--micro businesses or those zero to four employees, and small businesses with five to 49 employees. They also were ranked on financing, fees and service. In the zero-four employees group, credit unions ranked the highest in overall scores at 7.5 and in three service categories--financing, 6.8; fees, 8.8; and service, 7.6. In the five-49 employees category, credit unions topped others in the overall score ( 8), fees (9.9), and service (7.5). Their rank dropped to the middle for mid-sized businesses with 50-499 employees, although these businesses scored credit unions a perfect 10 on fees. In almost all the fees categories, credit unions' scores nearly doubled the scores of the closest bank.

Nomination received for CUNA Board special election

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MADISON, Wis., and WASHINGTON (4/15/10)--The Credit Union National Association (CUNA) has received the first nomination in a special election for the CUNA Board District 5, Class B seat. The candidate is Roger Heacock, president/CEO of Black Hills FCU, Rapid City, S.D. Deadline for nominations is the close of business on May 5. If there is more than one candidate, the special election will be conducted by written ballot from May 7 to June 4. District 5 is comprised of the following leagues: Arizona, Colorado, Kansas, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, Utah and Wyoming. The seat currently is held by CUNA Chairman Kris Mecham, who announced his resignation from the board, effective June 1. Mecham is leaving the U.S. this summer to perform mission work in Mongolia for his church. The term of office for the position will begin immediately after a successful candidate is determined and will expire at the adjournment of CUNA's 2013 Annual General Meeting. Nominees must be an employee or voting board member of the nominating credit union. The nomination must be in writing and seconded in writing by two other credit unions of the same size group from the district. Credit unions wishing to nominate a candidate should complete a nomination form and obtain the candidate's consent and two seconding nominations. Forms will be accepted by fax at 608-231-4874, e-mail to thanson@cuna.coop, or hard copy at 5710 Mineral Point Road, Madison, WI 53705.

Payday loans addressed in several states

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MADISON, Wis. (4/15/10)--Credit union leagues in several states are supporting efforts by lawmakers to stop payday lenders from taking advantage of consumers. The Arizona Credit Union League was instrumental in defeating the latest attempt by the state’s payday lending industry last week. The measure would have allowed lenders to continue operating after a June 30 sunset date. Lenders tried to amend language in a state consumer lending code to fit their product model, and the league worked throughout the weekend to defeat the measure, said Austin DeBey, vice president of governmental affairs for the league. Although the defeat won’t be certain until the legislature adjourns in early May, the league “doesn’t see it coming back,” DeBey said. Including its latest attempt, the payday lending industry had tried three times to continue operating beyond the sunset date. The league partnered with the Center for Responsible Lending, AARP, credit unions and other community groups to defeat the industry’s attempts to continue offering payday lending. The league hasn’t taken a position against an industry before, but decided to get involved because it has seen credit union members fall victim to payday lending, DeBey added. In its next step, the league will partner with lawmakers and other community groups on a public awareness campaign to ramp up its REAL Solutions efforts. “We’re going to try and provide some public outreach on what small dollar loans are out there,” DeBey said. “We want to create a way for people to transition from post-payday lending. We opposed payday lending, but are looking to find ways to help people [obtain small loans].” The Maryland General Assembly approved legislation to close a loophole payday lenders use to avoid Maryland’s interest rate cap on small consumer loans--especially those made online. Gov. Martin O’Malley is expected to sign the bill, which would be effective Oct. 1 (Baltimore Sun April 12). The Maryland and District of Columbia Credit Union Association (MDDCCUA) supports the effort. “MDDCCUA, as an original REAL Solutions league, applauds Maryland’s efforts to regulate the payday lending industry,” MDDCCUA President/CEO Mike Beall told News Now. “The ability to have payday lending outlets on the Internet sidesteps Maryland’s strong anti-payday lending laws should not be allowed by technicalities that further confuse consumers.” In New Mexico, The Daily Times published an op-ed piece Sunday about payday lending. The newspaper urged readers to “consider a small loan from your credit union or a small loan company” instead of using payday lenders. “You may want to check with your employer, credit union or housing authority for no- or low-cost credit counseling programs, too,” the paper said. The Times also noted that laws passed in the state within the past few years have helped regulate the industry. Under the law, lender charge fees instead of an interest rate--at no more than $15.50 for each $100 borrowed.

HRTD Council names 2010 executive committee

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MADISON, Wis. (4/15/10)--The coming year’s executive committee and officers for the CUNA HR/TD Council were announced during the council’s 16th annual conference this week in Orlando, Fla. Incumbents re-elected to the Human Resource/Training Development Council were:
* Diana S. Wozniak, manager of human resources for Tampa Bay (Fla.) FCU; and * Jennifer Godel, vice president of HR/TD & quality, Desert Schools FCU, Phoenix.
Also newly elected to the executive committee is Rob Carmichael, senior vice president of human resources, training, compliance and information technology for Maine Savings FCU in Hampden, Maine. He replaces outgoing committee member Mike Nicholas, who left his position as former vice president of human resources for United FCU in Saint Joseph, Mich. Jennifer Morse, vice president of human resources for Empower FCU, Syracuse, N.Y., will remain the council chair. Suzanne Oliver, senior vice president of educational services and chief learning officer for Mountain America FCU, West Jordan, Utah, will remain vice chair. The CUNA HR/TD Council executive committee also includes:
* Michelle Greear, assistant vice president of training and career development for Technology CU, San Jose, Calif.; * Jeffrey Duke, organizational development and leadership manager, BECU, Tukwila, Wash.; * Robert Davis, senior vice president of human resources, Vystar CU, Jacksonville, Fla.; * Danielle Brown, senior vice president of operations, Credit Union Association of Oregon, who serves as the league representative; and * Kathy Spahr, human resources, training and development director, EECU, Jackson, Mich.

Idaho State prof honored for CU research

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POCATELLO, Idaho (4/15/10)--A Idaho State University (ISU) professor whose work on how credit unions impact financial institutions' behavior is cited widely is one of three professors to be honored by the university with 2010 Outstanding Researcher Awards. Bob Tokle, professor of economics, will receive the award April 28 with two other Idaho State faculty members. One of them will also be presented the 2010 ISU Distinguished Researcher Award. Tokle joined ISU as assistant professor in economics in 1986. His research specialties include the economics of advertising and the effects of credit unions on the behavior of banking institutions, said ISU. His work's national, public policy impact is evident in its citation in testimony before the U.S. House Ways and Means Committee in matters related to credit unions, the university said. (agweekly.com April 12). Tokle's study concluded that consumers benefit from credit unions because they force banks to price their products lower than they would if competition from credit unions were absent. He has contributed to studies for the Filene Research Institute and for the Credit Union National Association and he is a board member of a credit union in Idaho.

Mich. gubernatorial hopefuls job tour stops at CU

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LANSING, Mich. (4/15/10)--U.S. Rep. Pete Hoekstra (R-Mich.), a candidate for Michigan governor, visited Frankenmuth (Mich.) CU Monday as part of his “100 Jobs Across the State” tour. He led the Republican gubernatorial field in the most recent state poll, said the Michigan Credit Union League. Hoekstra went inside the $214.5 million asset credit union to meet its members and staff, and to learn about the credit union’s functions. Credit union staff informed him about the local economy and the steps their institution is taking to improve it. “It was really neat that he got to see the inner workings of the credit union to understand how things happen behind the scenes,” said Vickie Schmitzer, Frankenmuth CEO. “It’s a wonderful event for both our staff and our members, and we were happy to be involved and share it with the community.” Hoekstra also worked for a half-hour behind a teller window greeting members, and then helped credit union staff review an application for a small-business loan--a prime focus for the credit union. Staff told Hoekstra about the credit union’s recent growth, the most recent area bankruptcy numbers and what the credit union is doing to prevent and mitigate members’ financial problems.

Improved perceptions could boost CU growth

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TALLAHASSEE, Fla. (4/15/10)--About 77% of credit union leaders surveyed said consumer misunderstanding of credit union benefits over those of banks is the greatest challenge in attracting new members, according to a new survey. Credit Union 24 conducted the survey in February at the Governmental Affairs Conference sponsored by the Credit Union National Association. The number is an increase of 10% from last year when 67% of credit union leaders cited perception as the greatest challenge, said the credit union service organization. (See Figure No. 1).
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For the second year in a row, the perception that credit unions have limited offerings, when compared with banks, was the second greatest challenge cited by 45% of credit union leaders surveyed. While consumer misunderstanding is the greatest challenge, attracting new members is a key overall concern of credit union leaders. Nearly three-quarters, or roughly 70%, of those polled cited the current economic climate and National Credit Union Administration assessments as key challenges facing credit unions today, an 11% increase over last year. Retaining current members and developing successful marketing tools were also cited as significant challenges. (See Figure No 2). “An economic cloud still hovers over our nation’s credit unions, as evidenced by credit union leaders’ concern about attracting new members having decreased by only 2% since last year,” said Jim Park, president/CEO of Credit Union 24. “It’s rather interesting that the concern of attracting new members and the economic situation have reversed this year, with the economy being the No. 1 cause of anxiety among credit union leaders. “We’re starting to see rays of sunshine peek through,” he said, yet “credit unions are focusing very intently on maintaining and enhancing their bottom line as the economy slowly starts to rebound,” he added. “Credit unions are being cautious yet proactive, and are taking advantage of the potential member-recruitment opportunities created by the capsizing of numerous banks.” In 2009, about 61% of polled credit union leaders cited attracting new members as their greatest challenge, while 59% of those polled said the economic climate is their greatest challenge. Despite the challenges, 56% of credit union leaders said their credit union’s membership increased since 2009, with 41% of credit union leaders citing failing banks as a major factor in the uptick in membership. About half, or 51%, of respondents believe that better customer service is credit unions’ strongest competitive advantage over banks. Roughly 22% cited lower interest rates on loan products as their strongest competitive advantage. (See Figure No. 3). “Even though credit unions are still experiencing challenges in educating consumers of credit union benefits over banks, the volatility of our economy is changing consumer behaviors, many of which are in favor of credit unions,” Park said. “Many credit unions are finding unique ways to remind consumers who fall within their charter’s target audience of the benefits they provide to consumers. “These methods of member outreach, which include marketing competitive interest rates on savings and loan products, can be implemented by nearly every credit union and have a positive impact the industry overall,” he concluded.

CU System briefs (04/14/2010)

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* JERSEY CITY, N.J. (4/15/10)--On April 1, Liberty Savings FCU launched its "CURE" membership campaign to raise awareness of the opportunities and benefits of joining a credit union (The Daily Exchange April 14). The name refers to helping consumers find the right "medicine" for financial "ailments" they might be experiencing at other financial institutions. Staff, pictured here, will wear medical scrubs and lab coats throughout the campaign. In addition to promotions in its branches, the credit union is advertising in local newspapers and has banner ads on NJ.com. It also will conduct several financial literacy seminars. "We want to help consumers realize there is an alternative to the high fees, high interest rates and bad service they may be experiencing in their dealings with other financial institutions," said Sean McDonald, chief marketing officer. (Photo provided by the New Jersey Credit Union League) ... * CHARLESTON, S.C. (4/15/10)--Two former employees of South Carolina FCU's Summerville, S.C., office pleaded guilty to siphoning off between $200,000 and $400,000 from inactive accounts. Robert Tam, 42, former risk analyst, and Jason Nicklous Kizer, 31, former account manager, took the funds from the accounts of a deceased woman, deployed military personnel, and others between 2005 and 2009. They were fired last fall. They face a maximum penalty of 30 years in prison and $1 million in fines (Associated Press and The Post and Courier April 14) ... * ST. LOUIS (4/15/10)--Vantage CU President/CEO Hubert Hoosman Jr.,
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right, presented a check for 10,000 to Diane Buhr, left, executive director of the Special Education Foundation (SEF), and Linda Fahrenkrog, SEF vice president, to be used for scholarships for students with disabilities who plan to obtain a higher education. "For years Vantage has been serving educators in a variety of ways, including sponsoring scholarships and offering free financial education presentations," said Hoosman. The check presentation was made at the credit union's main office in Bridgeton, Mo. SEF has been awarding scholarships since 1988. Vantage is a $628 million asset credit union with more than 111,500 members. (Photo provided by Vantage CU) ...

Hundreds in Missouri HFOT Build Brigade

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ST. LOUIS, Mo. (4/15/10)--Hundreds of volunteers, including credit unions and the Missouri Credit Union Association (MCUA),
Staff Sgt. Robert Canine (center) helped to raise the first wall to build his new home with the help of family, friends, and credit union representatives who volunteered their time to participate in a three-day Build Brigade to construct Canine’s home. (Photos provided by the Missouri Credit Union Association)
Click to view larger image About 450 volunteers, including credit union representatives, helped with a three-day Build Brigade to construct a home for Staff Sgt. Robert Canine and his family through the Homes for Our Troops program.
participated in a build brigade to construct a home for Staff Sgt. Robert Canine and his family in Columbia, Mo., as a part of the Homes for Our Troops (HFOT) program. HFOT estimated that 450 people participated in the three-day brigade last weekend. Missouri credit union representatives traveled to the site to participate. Volunteers also stopped by the site to thank Canine for his service, and cars parked on the streets had signs welcoming the family. People also wrote messages on the backside of the home’s shingles, according to MCUA (The Missouri difference April 14). “The Build Brigade was such a rewarding experience,” said Linda Fedrick, Anheuser-Busch Employees’ CU vice president of member relations. “I had the chance to meet Canine and his wife, and they are a terrific and modest couple.” “The house is amazing,” Canine added. “It’s more than I expected--more than anyone could have expected--and I’m so thankful for everyone who is making this possible.” HFOT, a program supported by credit unions and the Credit Union National Association, helps build specially adapted homes for wounded soldiers. Credit unions participating in the brigade include:
* Alliance CU, Fenton; * Anheuser-Busch Employees’ CU, St. Louis; * County CU, Clayton; * Mazuma CU, Kansas City; * Mid Missouri CU, Fort Leonard Wood; * Missouri CU, Columbia; * Neighbors CU, St. Louis; * River Region CU, Jefferson City; * Rolla (Mo.) FCU; * United CU, Mexico; and * Missouri Corporate CU, St. Louis.

Retirement plan sponsors at CUs shift their approach

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GRAPEVINE, Texas (4/14/10)--The economic meltdown has prompted credit union plan sponsors to rethink how retirement plans are offered to their employees, attendees of the Texas Credit Union League Annual Meeting were told Friday. The financial crisis has prompted many credit union plan sponsors to move from processed-based to outcome-based retirement planning, saidScott Knapp, director of investment strategy for CUNA Mutual Group. "In a process-based scenario, plan sponsors exclusively focus on seeking high investment returns and low fees. Both are important, but they are not ends to themselves," Knapp said. "The economic crisis exposed the limits of this process-based orientation. As many as 60% of plan participants ages 56 to 65 had most of their retirement-plan assets in stocks. They got crushed, and many have been forced to postpone their retirements. Something has to change if the 401(k) plan is to continue to be the nation's primary retirement savings vehicle," he added. Knapp said many sponsors are finding an outcome-based strategy a better option for helping their employees achieve retirement security. "Outcome-based plans make it easy for participants to save enough for retirement and avoid the huge investment mistakes that often occur under a process-based scenario. Investments offered in an outcome-based plan are often not the best performing, but they support better decision making among participants. Ultimately, they can end up more financially secure during retirement." In outcome-based planning, Knapp said, achieving retirement security is contingent on an employer offering a quality plan, the employee’s decision to save--and save enough--and the employee’s decision to invest properly. It’s important for the employer to address the employee’s decision to save in order for any plan to be successful, Knapp said. “First, credit unions need to show strong support for 401(k) plans and create a ‘culture of saving.’ Enrollment in those plans must be made simple, whether face to face or online, and auto enrollment should be considered.” And it’s especially important for the employer to adopt and support Target-Date Funds, Knapp said. “Target-Date Funds take the guesswork out of investing for your employees. Essentially, all the employees need to know is when they’ll retire. If they know that, the Target-Date plan works to achieve success based on that timeframe." Why is such a framework important for credit union employees? Knapp cited alarming statistics about workers’ lack of confidence in attaining a financially secure future. According to 2008 data from Employee Benefit Research Institute:
* Only 13% of workers feel very confident they will have enough money for retirement--a 50% decline from 2007; * More than 28% of workers say they have adjusted their retirement age; * Only 44% of workers have calculated retirement savings needs; * And 22% of current retirees feel confident about their retirement security.
CUNA Mutual manages 4,000 credit union retirement plans representing $6 billion in assets under administration. Knapp said the company has embraced outcome-based retirement planning for 15 years. “There’s a heightened sense of urgency for sponsors to demonstrate vigilance in helping their employees increase their chances of reaching retirement security.”

CU System briefs (04/13/2010)

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* ERIE, Pa. (4/14/10)--Three Erie, Pa., residents have been charged with trying to extort money from an Erie couple after the wife told a teller at Erie FCU that her husband was being held hostage and that the couple were being held against their will. Tayron Cargile, 24, and Devon Henderson, 27, are accused of trying to force the wife to withdraw funds from her account at the credit union on Monday morning (TimesNews via goerie.com April 13). Gerald Pass, 23, is accused of using an ice pick to hold the husband at the couple's apartment while the others went to the credit union. The wife told the teller than a man and woman were in a car outside, waiting for her to turn money over to them. The teller called police. No funds were withdrawn, no one was hurt, and no weapons were found in the car. The three suspects are charged with false imprisonment, extortion and conspiracy to commit theft by extortion ... * GREENSBORO, N.C. (4/14/10)--Two men forced a 75-year-old woman to drive to a State Employees CU branch and withdraw cash Thursday, said police. The woman told police she was in a bank parking lot when a man asked her for a ride. She drove him to a grocery, where they picked up another man. They forced her to drive to the credit union. One man accompanied her into the credit union and forced her to withdraw an undisclosed amount. After forcing her to drive them back to the original pickup point, they took two rings and fled (News-Record.com April 9) ... * BOSTON (4/14/10)--Industrial CU (ICU) announced the winners of its 17th annual
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John J. Campana Memorial College Scholarship Program. Hosting the drawing were U.S. Sen. Scott Brown (R-Mass.) and Massachusetts National Guard Adjutant Gen. Joseph C. Carter. Also on hand was Dan Egan, president of the Massachusetts and New Hampshire Credit Union Leagues and the Credit Union Association of Rhode Island. Ten winners were awarded $1,000 each for college tuition, books and/or fees. The scholarship is named after John J. Campana, who served as the $126 million asset credit union's treasurer for more than 50 years. From left are: ICU President Roy Campana, Brown, and Egan. (Photo provided by Industrial CU) ... * METAIRIE, La. (4/14/10)--Greater New Orleans FCU, based in Metairie, is offering Mobile Banking and Account Alerts, so members can view their GNO accounts on their mobile phone, make transfers, review histories, stop payments on checks and view cleared checks from any phone with a Web browser. Account Alerts will allow online Home Banking users to track their finances by receiving prompt notifications of key activity taking place in their accounts via e-mail alerts. Nearly 52% of GNO's membership is younger than 45 years old, said the $103 million asset credit union ... * RALEIGH, N.C. (4/14/10)--State Employees' CU (SECU) is offering a new Federally-Insured Deposit Account, the newest addition to North Carolina's National College Savings Program. The account will appeal to parents, grandparents and others looking for the security of a deposit account with the investment advantages of a NC 529 plan. Contributions made by North Carolina taxpayers to the account, or any of the other 13 investment options available under the NC 529 account, may be eligible for an annual state income tax deduction. Earnings on the account's investments options also are free from federal and state income tax when used for qualified higher education expenses. SECU launched the account on Monday ...

Oral arguments begin in N.Y. mortgage case

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MANHATTAN, N.Y. (4/14/10)--The Credit Union National Association (CUNA) and the Credit Union Association of New York (CUANY) were present Tuesday for oral arguments in support of Hudson Valley FCU's challenge against a New York state assessment required on credit union mortgage loans. The 90-minute hearing was in the Supreme Court of New York County, a trial-level court located in Manhattan. At issue is whether a federal credit union (including its members) must pay a mortgage registration tax to New York to record its mortgages with the state. In Tuesday's proceeding, Judge Judith Gische accepted amicus curiae (friend of the court) briefs prepared in October in support of the credit union by CUNA, CUANY, the Department of Justice and the National Association of Federal Credit Unions. A fire drill interrupted the proceedings before oral arguments began. The Poughkeepsie-based credit union filed the suit on May 15, 2009, against the New York State Department of Taxation and Finance, Commissioner Robert L. Megna, and the State of New York. Hudson Valley says its mortgages are exempt from the state's mortgage recording tax, which is used by New York as a general revenue collecting mechanism for its general fund. This is different from most other states' fee charged to cover the cost of operating the recording office. Hudson Valley has paid nearly $3 million in the mortgage recording taxes on "no closing cost" loans made to its members (News Now Feb. 25). It also is seeking a refund of the tax in a separate administrative proceeding. The state claims federal credit unions must pay the recording tax by arguing that federal credit unions are not federal instrumentalities and that the tax is a "privilege tax" paid voluntarily for the so-called privilege of recording a mortgage. Tuesday's hearing centered on the credit union's opposition to a motion to dismiss the case by the New York Attorney General's office. Hudson Valley FCU has asked for a declaratory judgment to not pay the mortgage tax. CUNA General Counsel Eric Richard and Counsel for Special Projects Michael Edwards were among those attending Tuesday's hearing in Manhattan. CUANY Associate General Counsel Henry Meier presented arguments on behalf of CUANY and CUNA. Also, "it's very significant that the Department of Justice Tax Division sent an attorney to argue in support of the credit union position in the case," Richard told News Now.

NY CUs governments urge municipal deposit choice

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ALBANY, N.Y. (4/14/10)--The Credit Union Association of New York, a coalition of local government groups and leaders including Albany Mayor Jerry Jennings and Albany County Executive Michael Breslin, and several state lawmakers called on New York's state legislature Tuesday to pass legislation to allow municipal deposit choice. The group conducted a press conference at the State Capitol to bring the matter to legislators’ attention.
William J. Mellin, right, president/CEO of the Credit Union Association of New York (CUANY), thanks Albany Mayor Jerry Jennings after Jennings spoke in support of municipal deposit choice at CUANY's press conference Tuesday. Looking on are other speakers at the conference--from left, Assemblyman Harvey Weisenberg, state Sen. Kevin Parker and Albany County Executive Michael Breslin.
Municipal deposit choice allows government entities the option of depositing tax dollars in local credit unions or community savings banks. The state Senate already has passed a budget resolution with support for municipal deposit choice. Currently, the law gives corporate banks a monopoly on municipal deposits. Supporting organizations include the New York State Conference of Mayors and Municipal Officials (NYCOM), the Association of Towns of the State of New York, New York State Association of Counties (NYSAC), the Fireman's Association of New York, the New York School Boards Association and the New York Library Association. "We appreciate our local government association partners and the many state and local leaders who stand with us today as we ask the State Assembly to join the govern and state Senate in supporting municipal deposit choice in this year's final state budget agreement,” said William Mellin, association president/CEO. “This much-needed reform allows local governments, including schools and libraries, the freedom to deposit their taxpayer dollars in credit unions and savings banks, as well as commercial banks." He noted that municipal deposit choice "will help local governments save revenue, encourage more funds to stay local through community reinvestment, and create more opportunities for local residents to take out personal or small business loans,” he said. He added: “Access to municipal deposits would allow credit unions to further reinvest in our local communities, via loans to local taxpayers and local small businesses at a time when credit and borrowing opportunities are drying up for the very people and small businesses who need it most." Albany Mayor Jennings urged the legislature "to get this through this year. Credit unions play a vital role in New York and they will give local leaders the flexibility we need, if we have municipal deposit choice. It saves the taxpayers through increased competition and that's what built America. This is something we're all looking for."
With signs of support, credit union representatives from Rome, N.Y., were on hand for the Credit Union Association of New York's press conference at the State Capitol to urge state legislature to pass municipal deposit choice. (Photos provided by the Credit Union Association of New York)
Breslin said he will "stand squarely behind municipal deposit choice. We need an opportunity to utilize all of our resources including credit unions and community banks. Vestal Town Supervisor Pete Andreasen has been "a vocal supporter for municipal deposit choice for years, because it would allow towns to seek the highest rate of return. Individuals, businesses and other entities have the ability to shop around for the best rates, why shouldn't New York's local governments have those same choices?" Several state legislators also spoke in support of municipal deposit choice. "We must pass municipal reform now, as we are looking to shift our investments from Wall Street to Main Street and try to help our local communities," said Sen. Kevin Parker (21st District, Brooklyn). Assemblyman Harvey Weisenberg (20th District, Long Island), a member of the Assembly Banking Committee, said, "We need everyone's support in this effort, and I'm asking supporters of municipal deposit reform to get involved, reach out to your legislators, and help us get this passed." Assemblyman Carl Heastie (83rd District, Bronx) announced his support, adding that "increased competition will improve our rates of return on local tax dollars and benefit underserved communities." Others attending were Assemblypersons Tim Gordon, Vanessa Gibson and Michael Benjamin. Mellin asked "every New York taxpayer to call, e-mail or write their state legislators" to support municipal deposit choice.

Dickerson ex-CUNA director DC league chair dies

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ANNAPOLIS, Md. (4/14/10)--Paul Boyce Dickerson, former president/general manager of the U.S. Postal Service FCU, Clinton, Md., for more than 30 years, died April 8 at a medical center in Maryland. He was 78.
Click to view larger image Paul Dickerson (second from left), former Credit Union National Association director and president of the District of Columbia Credit Union League, died recently. He is shown in the Red Room of the White House with credit union leaders and Anne Wexler, special presidential assistant to President Jimmy Carter, after the signing of the Depository Institutions Deregulation and Monetary Control Act of 1980 (H>R> 4986)--share draft legislation--on March 31, 1980. With him, from left are Fred Krause, Joseph Cugini, James Barr, Al George, Wexler, Howard Jeter (hidden), Lawrence Connell, and David Wright. (Photo provided by CUNA).
A well-known credit union advocate, he had been involved with credit unions since 1959 and was a recipient of the Wright Patman Award for distinguished service to credit unions. Dickerson served as Credit Union National Association director in 1968 and as vice-chairman of CUNA in 1978. Dickerson also was a director of CUNA Service Group Inc. He also served as president (now chairman) in 1974 of the District of Columbia Credit Union League (now the Maryland/District of Columbia Credit Union Association). In addition, Dickerson was president of Capitol Corporate FCU in 1969 and of Credit Union Services Inc. in 1967. He is survived by one son, two grandsons and three sisters. Funeral services will be at 10 a.m. today at the George P. Kalas Funeral Home in Edgewater.

Main St. needs small biz small biz needs CUs

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MADISON, Wis. (4/14/10)--Credit unions’ efforts to expand member business lending has been garnering press coverage nationwide. Some examples are:
* John Rhea, CEO of Robins FCU, Warner Robbins, Ga., wrote in a Monday opinion/editorial in the The Macon Telegraph: “The road to economic recovery is going to be a long one, and it’s going to start on main streets in Macon and throughout Georgia with small businesses. Small businesses remain a key driver of economic progress in Macon, but right now many prospective or existing small business owners aren’t getting the support they need to start or grow their businesses. Members increasingly tell credit unions that they have been cut back or turned down by their existing lenders. They want to know if credit unions can help with their small-business loan needs. Raising the cap on business lending for credit unions would have an immediate, positive effect on the economy by giving small-business owners the resources they need to survive, prosper and create jobs for Georgians. Credit unions want to play a bigger role in our economic recovery. Let’s hope Congress allows them to do just that by acting soon.” * San Antonio Express-News (April 7) business columnist David Hendricks last week wrote: “As Congress mulls a second job-creating bill as mid-term elections approach, it ought to embrace a measure that wouldn't cost taxpayers a cent. All Congress would have to do is lift the cap on business loans credit unions make for their commercially active members from 12.25% of loan portfolios to 25%. A typical credit union, with $90 million in assets, could make $17 million in commercial loans to members instead of $10 million if the cap were raised to 25%, the Texas Credit Union League says.” * To obtain positive media attention and continue urging Congress to increase the member business lending cap, Patrick Harris and John Florian of the Ohio Credit Union League visited with the editorial boards of the Portsmouth Daily Times and Lima News earlier this month. Lee Powell, CEO of Desco FCU, Portsmouth, joined them, and the editor said she saw no reason why the paper could not support the measure. The next day, Phil Buell, CEO of Superior FCU in Lima, shared with the Lima News editorial board how his credit union entered the small business lending market, and how the results have benefited the credit union and community. Both Powell and Buell gave specific examples of the increased demand for small business lending because of banks pulling out of the market. The Lima News ran a story the following day as a result of the meeting (eLumination April 7). * Steve Dahlstrom, president/CEO Spokane (Wash.) Teachers CU and Credit Union National Association (CUNA) board member, was the subject of an article in the March 25 issue of the Journal of Business-Spokane in which he talked about CUNA’s purpose and overall advocacy efforts on behalf of the credit union industry. He mentioned that one of the biggest issues CUNA is dealing with is the potential to expand credit union business loans. * State credit union leagues have been extremely active as the MBL push nears its conclusion, with the Iowa Credit Union League using its relationship with the office of the U.S. Secretary of Agriculture, Tom Vilsack, to showcase the need for MBL cap increase to help rural areas and encouraging credit union staff to visit district congressional offices. The Iowa League also provided the rationale in the Des Moines Register for an MBL cap increase, via print advertisements and an editorial (News Now April 9).

Fin lit month helps youth get a savings focus

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MADISON, Wis. (4/14/10)--Credit unions are helping youth to focus on savings during National Financial Literacy Month with a variety of youth savings activities. They also are gearing up for National Credit Union Youth Week April 19-24.
Click to view larger image (From left) John Williams, Allegacy vice president of Community and Governmental Affairs, State Superintendent of Public Instruction June Atkinson, and North Carolina State Treasurer Janet Cowell visited Allegacy FCU’s student-run credit union in Winston Salem to celebrate Financial Literacy for Youth Month in the state. With them is Belinda Wilson, Allegacy director of student run credit union programs and student credit union employees. (Photo provided by Allegacy FCU)
Pennsylvania Newsmakers focused on April as Financial Education Month during a recent broadcast. From left are Dr. Terry Madonna, host; Mary Rosenkrans, director of the Pennsylvania Office of Financial Education; and Mike Wishnow, senior vice president of communications and marketing at the Pennsylvania Credit Union Association. (Photo provided by the Pennsylvania Credit Union Association)
North Carolina Governor Beverly Perdue proclaimed this month as Financial Literacy for Youth Month. To celebrate, State Treasurer Janet Cowell and State Superintendent of Public Instruction June Atkinson visited Allegacy FCU’s student-run credit union in Winston Salem to discuss with student employees what they learned from the program. Allegacy has four student-run credit unions in the area. “This experience taught me responsibility, how to save and manage my money, and the importance of establishing and maintaining good credit,” student K’shawn Sutton told the state representatives. In Pennsylvania, a recent financial education segment of Pennsylvania Newsmakers focused on April as Financial Education Month. During the taping, Mary Rosenkrans, director of the Pennsylvania Office of Financial Education, and Mike Wishnow, senior vice president of communications and marketing at the Pennsylvania Credit Union Association, discussed the need for more financial education in schools with host Dr. Terry Madonna (Life is a Highway April 7). California Gov. Arnold Schwarzenegger and Pennsylvania Gov. Ed Rendell also declared April as Financial Literacy Month for each state (Life is a Highway April 8). As a part of Financial Education Month, credit unions nationwide are preparing for Youth Week, sponsored by the Credit Union National Association, and the National Youth Saving Challenge. This year’s Youth Week theme is “Get in the Savings Game.”
* Great Lakes CU, North Chicago, Ill., is celebrating Youth Week by inviting young members to open new accounts and make deposits throughout the week. The credit union also will host a 3 Point Shoot Out for Charity, and a “Mad City Money” budget simulation for teens. * Ticonderoga (N.Y.) FCU will celebrate Youth Week with several prize giveaways, including three savings bonds. Other activities include coloring contests and sign-up for Money & Me, the credit union’s teen-themed summer money management class. * MaPS CU, Salem, Ore., will offer two $75 awards to youth in honor of the credit union’s 75th anniversary. Branches also will host coloring contests during Youth Week. * Hawthorne CU, Naperville, Ill., will celebrate Youth Week with free coin counting, gifts with deposits, the opportunity to open a youth savings account, a cash-back check card with a parent’s signature, and information about opening a young investors fund. The credit union also will host coloring contests for the chance to win a savings account deposit of $25.

MCUL summit IPolitico advertorialI urge MBL support

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LANSING, Mich. (4/14/10)--The Michigan Credit Union League (MCUL) placed an advertorial in Politico and hosted a summit aimed at promoting credit unions’ member business lending (MBL).
Click to view larger image Download the pdf file.
To support the Credit Union National Association’s grassroots advocacy efforts and to send a message to lawmakers in Washington, MCUL said it is posting a one-time advertorial in today’s issue of Politico, appealing for their support of H.R. 3380 and S. 2919 to lift the 12.25% of total-assets cap on credit unions’ MBL. MCUL has partnered with the state in a Small Business Financing Alliance announced by Gov. Jennifer Granholm in her Feb. 3 State of the State Address. In Michigan last year, banks cut business loans by 68%, while credit unions increased their business lending by 18% to $838 million to meet the needs of small-business owners and entrepreneurs and the jobs they create, MCUL said. “Michigan’s credit unions have stepped up to the plate to make small loans at a time when other institutions have cut back,” said MCUL President/CEO David Adams. “As other lenders have struggled to make credit available to consumers and businesses in Michigan or as banks have added new fees on credit cards and other products, credit unions have continued to offer consumer-friendly products and services and have continued to lend.
The discussion panel at the Michigan Credit Union League’s member business lending summit April 6 in Troy, Mich., featured Ken Ross, commissioner of the Office of Financial and Insurance Regulation; Terry McHugh, Commercial Alliance; Dutch Ducher, CenCorp Business Solutions; Dave Wible, Michigan Business Connection; and MCUL President/CEO David Adams. (Photo provided by the Michigan Credit Union League)
“Credit unions’ small-business loan growth and record membership growth particularly demonstrate that more and more people are turning to credit unions as their trusted financial institution of choice during tough economic times,” he added. Also, Michigan’s Office of Financial and Insurance Regulation (OFIR) Commissioner Ken Ross and his senior Credit Union Division staff, credit unions and Michigan’s three-member business lending credit union service organizations engaged in dialogue on MBL issues during an April 6 summit in Troy, Mich. (Michigan Monitor April 12). The MCUL-hosted event covered the growing role credit unions are playing in commercial lending, including the Michigan Small Business Financing Alliance, and the risks and appropriate practices that go with it. About 40 participants attended. The summit featured a panel comprising Ken Ross, OFIR commissioner; Terry McHugh, Commercial Alliance; Dutch Ducher, CenCorp Business Solutions; Dave Wible, Michigan Business Connection; and MCUL President/CEO David Adams. Also attending were OFIR Deputy Commissioner Roger Little and Assistant Director John Kolhoff.

Members contribute to Red Cross disaster fund

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MADISON, Wis. (4/14/2010)--In addition to contributing to the Worldwide Foundation for Credit Unions' Disaster Relief Fund for colleagues hard-hit by the impact of Haiti's Jan. 12 earthquake, a number of credit unions have collected funds for general relief efforts. Most recently, three credit unions wrote out hefty checks to the American Red Cross for its efforts. In Chicago, $7 billion asset Alliant CU Foundation developed a $10-to$1 donation matching donation program that resulted in more than $39,000 in contributions. "The $10-to-$1 match provided our employees with extra incentive to give, knowing their donations would result in much larger amounts," said Alliant President/CEO David W. Mooney.
Click to view larger image At Indianapolis, Ind.-based Financial Center FCU's check presentation to the American Red Cross for the Haitian earthquake relief are, from left: Andre Arnold, Financial Center vice president of community development; Kevin Ryan, Financial Center CEO; Bill Sweeney, American Red Cross board member; and Bryan Fluke, Financial Center vice presiden of marketing.
Click to view larger image Children from a day nursery in the Minton-Capehart Federal Building in Indianapolis held a bake sale in the building and stopped by Financial Center FCU to proudly deliver more than $265 for the American Red Cross Haitian earthquake fund. (Photos provided by Finance Center FCU)
In Indianapolis, Finance Center FCU presented a check totaling nearly $26,268, saying the American Red Cross Assistance Program will continue for the next three to five years providing shelter, improving the water supply and sewage systems, developing health programs and helping families rebuild their lives with financial assistance. The $390 million asset credit union made an initial $5,000 contribution and matched the first $2,500 in member donations. The credit union's efforts also attracted contributions from several groups. Indianapolis Public Schools' Building America's Dream (BAD) Club, an after-school leadership activities group that promotes a drug and violence-free lifestyle, issued challenges to its clubs in nine schools and raised nearly $7,848. The Social Security Administration collected $170. And a day nursery's bake sale in the Minton-Capehart Federal Building raised $265 for the fund. In Capitola, Calif., Bay FCU set up a fund to collect donations for priority needs in Haiti--food, water, temporary shelter, medical services and search efforts through the American Red Cross. In less than two months, members, employees and community residents chipped in nearly $24,847. "As soon as we heard the news about the earthquake, we knew we had to help the people," said Bay Federal President/CEO Carrie Birkhofer. "Our employees jumped right in with their own donations and fundraising ideas. I'm extremely proud of their generosity." Credit unions also can contribute to a fund to assist Haiti's credit unions, employees and members. Use the links for more information.

Another customer survey ranks CUs above banks

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ANDOVER, Mass. (4/14/10)--Members/customers at credit unions and community banks continue to show much more satisfaction and better advocacy rates than customers of larger regional or national banks, according to a recent study. ath Power Consulting’s Ideal Banking Study 2010 indicates that 50% of credit union members surveyed are highly satisfied with their financial institution, compared to 31% at large regional or national banks and 46% at small local or regional banks. About 61% said they were likely to recommend credit unions, compared with 51% who were likely would recommend small local or regional banks and 36% who were likely to recommend large regional or national banks. “The largest financial institutions are trying to replicate the positive experience most customers enjoy in smaller institutions,” said Frank Aloi, president of the Andover, Mass.-based banking market research firm. “Customers are most interested in strong service, personal relationships and personal advice. This is where the smaller institutions have an edge.” Consumers surveyed by ath said the most important thing they want in a banking relationship is customer service, followed by convenience, rates and fees, and trust and respect. The survey also found that problem resolution is not being adequately addressed by most financial institutions. Only 25% of customers who experienced a problem felt it was resolved to their satisfaction. Customers whose problems were resolved satisfactorily were likely to remain satisfied with their banking relationship. More than half said those who did not receive an adequate resolution to their problems were likely to change banks. “When customer service expectations are met or exceeded, the outcome is a substantial increase in advocacy/referrals, additional product sales and long-term loyalty,” Aloi said. “This study shows that banks need to do a better job of meeting and exceeding customer expectations.”

Neighborhood CU partners with Mexican Consulate

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DALLAS (4/13/10)--Neighborhood CU has launched a partnership with the Mexican Consulate in Dallas to serve thousands of Hispanics in North Texas who often lack access to mainstream financial institutions. The $250 million asset, Dallas-based credit union announced on its website that it is the only Dallas credit union partner in the consulate's "Directo a Mexico" program. In the program, the credit union will open savings and checking accounts, and provide secure, affordable wire services to any financial institution in Mexico to North Texans who present either a Mexican passport or Matricular Consular card. Chet Kimmell, president/CEO of Neighborhood CU, pointed out that "longer-term benefits are possible when someone opens a savings and checking account and begins to build a more solid financial foundation for the future."

Texas league announces officers new board members

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GRAPEVINE, Texas (4/13/10)--The Texas Credit Union League has seated two new directors and elected its board officers during its annual meeting Thursday in Grapevine, Texas. New directors serving two-year terms are James Tuggle, president/CEO of Transtar FCU, Houston, and Sonya Jaynes, chief financial officer and strategic planning coordinator for Red River Employees FCU, Texarkana. Board officers elected are:
* Chair, Pamela Stephens, president/CEO of Security One FCU, Arlington; * First Vice Chair, Jim Minge, senior vice president of Randolph-Brooks FCU, Universal City; * Second Vice Chair, Paul Trylko, president/CEO of Amplify FCU, Austin; and * Secretary/treasurer, Robert Peterson, president/CEO of One Source FCU, El Paso.
The four board officers are members of the executive committee. Elected to the three at-large committee positions are:
* Debbie Blackshear, president/CEO of Cy-Fair FCU, Houston; * Suzanne Chism, president/CEO of Texas Health Resources CU, Dallas; * Buddy Schroeder, president/CEO of United Heritage CU, Austin; and * Past chair and ex officio, Ayn Talley, Houston Police FCU.

CUs collaborate to finance medical facility

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YELM, Wash. (4/13/10)--Several credit unions in the Pacific Northwest are collaborating to finance a multi-million dollar medical facility in a Yelm, Wash., a growing community. Financing the project, which broke ground April 3, is Commercial Lending Solutions (CLS), a credit union service organization owned by Chetco FCU, a $375.3 million asset credit union in Harbor, Ore.. The financing package also includes an unusual aspect: the involvement of three credit unions from around the region. "It's all about collaboration," said Jim Falls, president/CEO of CLS. "With good communication and lots of hard work, we were able to put together a loan that most individual credit unions can't, due to [member business lending] cap issues, but together and collectively we could." Three Washington and Oregon regional credit unions, through participations with CLS, are providing the funds for the building. Each conducts its own underwriting and approval process. The credit unions benefit from the yield on their investment and can mitigate their risk by investing only a portion of the entire loan amount. Not all the credit unions want to be named in the project because the project isn't in their area. "Without the efforts of a CUSO partnering several credit unions together, these types of projects used to traditionally go to banks," said Stephen Wymer, business services manager for Northwest Community CU, which is a participant. The $631.3 million asset Northwest Community is based in Eugene, Ore. "Even with all that is happening in our economy, it is still an exciting time to be a part of the credit union movement," said Falls after the ground breaking ceremony. "These types of projects that require more than one credit union to fund make what I do very rewarding." The borrower, Yelm Medical Office Building (YMOB) LLC, plans to relocate its existing family practice of seven doctors to a larger facility to expand the practice and add medical services to the area. Scott Ritter, manager of YMOB said the group "went to many different lending institutions to obtain financing, but in these difficult times the amount of funding we were requesting wasn't available at any one institution or they weren't interested in construction lending." YMOB met with CLS and was intrigued about the concept of bringing money together through several credit unions to fund a project of this size, he said. CLS has been providing commercial lending for more than 26 years and has a current loss ratio of 0.006. It is a full-service MBL CUSO that provides credit unions assistance in loan origination, underwriting, servicing and loan participations.

Judge combines 3 CU National Mortgage fraud cases

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NEWARK, N.J. (4/13/10)--A U.S. District Court in New Jersey has ordered the consolidation of three lawsuits brought by credit unions seeking the return of more than $35 million in mortgages fraudulently sold to Fannie Mae by U.S. Mortgage/Credit Union National Mortgage. Two of the cases were brought against Fannie Mae by Dover, N.J.-based Picatinny FCU, with $273.3 million in assets; and New Hyde Park, N.J.-based Sperry Associates FCU, with assets of $372.4 million. The third involves a civil action filed by Fannie against Nutley, N.J.-based Proponent FCU, with $451 million in assets. Citing "good and sufficient cause" and saying that the consolidation "is in the best interests of the parties," U.S. District Judge Garrett E. Brown issued the consolidation order March 29 at the request of Fannie Mae. The consolidation is for discovery purposes, the court document said. The Pine Brook, N.J.-based U.S. Mortgage and Credit Union National Mortgage filed for Chapter 11 bankruptcy in February 2009 in Newark. The companies listed more than $200 million in debts to Fannie Mae and 28 credit unions (News Now March 22). Michael McGrath, president of the former mortgage companies, pleaded guilty last June in the fraud of $139.6 million from the credit unions. His sentencing date has been reset several times and is now scheduled for May 18. At that time U.S. District Judge Katherine S. Hayden will decide whether to accept the recommendation for 12.5 to 20 years in prison as a result of a plea bargain.

Debtors smart expect a lot says bankruptcy expert

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UNION, N.J. (4/13/10)--The biggest challenge for credit unions involved in bankruptcy proceedings is that debtors are smart and they hold credit unions to the same standards as big banks and expect the same results, a bankruptcy expert Wednesday told the Union/Morris Chapter of the New Jersey Credit Union League. Debtors keep current with bankruptcy laws and they bring that knowledge to their case to keep their money, Andrew Altenburg, an attorney specializing in bankruptcy law, credit union representations and commercial litigation, told the chapter (The Weekly Exchange April 5-9). It is paramount for credit unions to protect themselves in these times of economic uncertainty by filing proofs of claim--particularly in Chapter 13 bankruptcy cases--Altenburg added. A positive trend in the bankruptcy arena is that debtors are receiving advice to join a credit union in the aftermath of a bankruptcy, Altenburg said. After going through bankruptcy, debtors have discharged their debt, making them a viable prospect for credit unions, which are more willing than big banks to lend to these debtors, Altenburg said.

Committee appointments announced by CUNA

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MADISON, Wis. (4/13/10)--Kris Mecham, chairman of the Credit Union National Association (CUNA) board of directors, has announced the CUNA committee appointments for 2010. CUNA thanks those individuals who expressed an interest in participating in the committee process. For a complete list of committee chairs and members, use the link.

Special election for Mechams seat on CUNA Board

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MADISON, Wis. (4/13/10)--Kris Mecham has indicated he will resign as chairman of the Credit Union National Association (CUNA) board of directors, effective June 1. The CUNA Executive Committee recently voted to proceed with a special election to fill the position. The call for nominations was sent to affiliated credit unions in District 5, Class B Friday. Class B credit unions are those with at least 21,000 but not more than 76,999 members. The timeline for the election is:
* May 5--Deadline for nominations to be received; * May 7--Ballots mailed out to credit unions (if there is a contested election); * June 4--Deadline for ballots to be received; and * June 7--Winner announced/individual assumes position on board.
Mecham said he will be performing mission work in Mongolia for his church.

Complaints about banks climb says Better Biz Bureau

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WASHINGTON (4/13/10)--Complaints about banks are on a sharp rise, according to the Better Business Bureau (BBB), and one publication warns that they could lose business to credit unions. Banks rank third in the most recent list of top U.S. consumer complaints, behind cell phone providers and cable TV companies (Yahoo Finance April 1). Banks saw a 43.2% increase in complaints since 2008--up to 29,920 complaints, according to BBB data. “One reason why big banks may have trouble with customer service is that some of them have bitten off more than they can chew,” said the online publication. “With industry takeovers of major lenders like Washington Mutual and Wachovia, banks have more customers and fewer resources to accommodate their needs. “If that’s the case, larger banks better beef up their customer service efforts fast--before customers decide that the credit union down the street will treat them, and their money, with greater care,” the publication concluded. To read the article, use the link.

CU System briefs (04/12/2010)

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* GREENSBORO, N.C. (4/13/10)--North Carolina credit unions seeking to raise credit unions' member business lending (MBL) cap met recently with U.S. Rep. G.K. Butterfield, left, in Greensboro, N.C., to discuss the importance of MBL. Butterfield is a co-sponsor of the business lending bill, H.R. 3380. He heard from Raleigh-based Local Government FCU Vice President of Financial Services Deborah Isenhour (center) and Lemuel Bartlett (right), treasurer of the Belfast Volunteer Fire Department, as well as from North Carolina Community FCU, based in Goldsboro. Both credit unions provide lending to fire and rescue departments. They also expressed concern about investment limits for credit union service organizations. Isenhour said that her credit union's investment dollars will soon be completely loaned out. If the limit were increased to 3% from 1%, the credit union could make an additional $34 million in business loans in the area. (Photo provided by the North Carolina Credit Union League) ... * AUSTIN, Texas (4/13/10)--The Texas Credit Union Department has received applications for two separate mergers. The first was from EECU, Ft. Worth, seeking approval to merge with Ft. Worth Star Telegram Employees FCU. EECU would be the surviving credit union. Also, America's CU, Garland, is seeking approval to merge with CAM FCU, Dallas. America's CU would be the surviving credit union (Credit Union Department Newsletter March 31) ... * PHOENIX (4/13/10)--SunWest FCU, based in Phoenix, was presented with the
Click to view larger image Click for larger view
Arizona Credit Union League & Affiliates' sixth annual Indirect Lender of the Year Award for 2009. The award is presented to a participating credit union that shows the greatest progress in the application of its indirect program awarded Indirect Lender award by Arizona league. During 2009, SunWest completed nearly $36.2 million in 1,503 funded loans. From left are SunWest Indirect Lending Staff Dawn Foote, indirect lending manager; Jennifer Gorman, funding specialist; Debbie Lamping, funding specialist; Lindsey Eazor, loan officer; and Art Serabian, loan officer. (Photo provided by SunWest FCU) ... * MEDFORD, Ore. (4/13/10)--Vicki Smith, former chief member relations officer of Medford, Ore.-based Rogue FCU, died March 16 after a brief battle with cancer. She began working at Rogue 30 years ago as branch manager of the Ashland branch. As the credit union grew, she began serving on the senior management team, including as chief operations officer. She finished her career as chief member relations officer, where she was responsible for operations, supervising branch and department managers, and service delivery. She also chaired the Operations Sales and Services Council Executive Committee for the Credit Union National Association and served on the Credit Union Association of Oregon Foundation Scholarship Committee. Smith retired in 2007. She is survived by her husband, two daughters, father, two brothers, and three sisters (Oregon Outlook April) ... * HARRISBURG, Pa. (4/13/10)--Joseph G. Danver, one of the founders and a longtime board member and officer of Wyse FCU, Baden, Pa., died Saturday. He was 90. He was a retired electrician with Wycoff Steel Corp., the original sponsor of the credit union. The credit union's 50th anniversary is this year. Survivors include one son, three daughters, six grandchildren, and five great-grandchildren (Beaver County Times April 11) ...

Poland loses key CU movement leader in plane crash

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WARSAW and MADISON, Wis. (4/13/10)--The death of Poland President Lech Kaczynski in a plane crash Saturday with 95 others, including political, military and religious leaders, has stilled the voice of a key credit union supporter in that nation.
Poland President Lech Kaczynski, right, posed with Bobby McVeigh, World Council of Credit Unions board member, during a meeting with credit unions in 2003. Kaczynski was killed in a plane crash Saturday. (Photo provided by the World Council of Credit Unions)
"Polish President Lech Kaczynski has been a powerful force in the growth of Poland's democracy," said Pete Crear, president/CEO of the World Council of Credit Unions. "He worked side by side with Solidarity movement leader Lech Walesa and helped his then youthful associate Grzegorz Bierecki, who now sits on the World Council board, determine that credit unions would be the key to Poland's economic future," said Crear. "Since his election, President Kaczynski has been a strong supporter of credit unions in Poland and his tragic death will touch all credit unions everywhere." Bierecki, who is president of the National Association of Cooperative Savings and Credit Unions (NACSCU), WOCCU's member organization in Poland, and WOCCU's second chair, will miss WOCCU's board meeting later this week in Madison, Wis. In February, Kaczynski had named Bierecki to Poland's National Development Council, a nonpartisan advisory body that offers input on social and economic issues to Kaczynski (News Now Feb. 23). Kaczynski was elected president on Oct. 23, 2005, with almost 55% of the vote. Since the rebirth of the Polish movement in the early 1990s, he has been actively involved in the development and strengthening of the country's credit union system, with the goal of building a financial network that would provide Polish citizens with access to affordable, high quality financial services. He charged Bierecki to find U.S. banks that would open in Poland. Banks were not interested, but suggested Bierecki meet with credit unions. WOCCU conducted credit union development programs in Poland from 1992 to 1999, which played a large role in forming today's credit union system, one of the fastest growing movements in the world. In 1990-1991, Kaczynski was the first president of the Supervisory Board of the Foundation for Polish Cooperative Savings and Credit Unions, created by WOCCU upon request from Solidarity--a fact he mentioned during a visit at the Polish & Slavic FCU, Brooklyn, N.Y., in September when he was in New York for the opening of the United Nations General Assembly. There he shared stories of his credit union roots and the role U.S. credit unions played in Poland's march toward democracy 20 years ago (News Now Oct. 9). He has participated in many national conferences organized by the Polish cooperative savings and credit unions. In 1995, he received the Feniks Award, the most prestigious award of the Polish credit union movement. Also killed in the crash were Kaczynski's wife, Maria, and Poland's army chief of staff, the navy chief commander, the heads of the air and land forces, the national bank president, the deputy foreign minister, the head of the National Security Office and the deputy parliament speaker.

Three CU Centrals finalizing merger in Canada

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WINNIPEG (4/12/10)--Credit union centrals from three Canadian prairie provinces--Manitoba, Saskatchewan and Alberta--will vote later this year on finalizing a merger into a single prairie central, according to Winnipeg Free Press (April 9). The move is the result of the trend in financial cooperatives toward consolidation. With fewer, but larger credit unions, the three centrals are finding it more difficult to perform their roles and meet the needs of small, medium and large credit unions together, said Garth Manness, CEO of Credit Union Central of Manitoba, in the article. A combination of the three would result in an entity with 1.7 million members, $46.8 billion assets, 155 credit unions and 709 branches, said the publication. For more information, use the link.

Texas CU Department reports hike in complaints

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AUSTIN, Texas (4/12/10)--The Texas Credit Union Department says that it saw a spike in written complaints about state-chartered credit unions in that state during the fiscal year 2009. The department handled 100 written complaints, up 30% from 77 the year before, according to the department's newsletter (March 31). The report did not say whether the complaints generated were actionable or whether consumers had misunderstood the credit unions' procedures and generally accepted practices. Although credit unions are consistently noted throughout the country for their low fees and better interest rates than banks, there is still some trickle down from the overall dissatisfaction with financial institutions in general during the financial crisis and economic recession. The nation's financial crisis and economic recession, coupled with the bombardment of consumers throughout much of 2009 with negative messages about financial institutions' fees, overdrafts, disclosures, and credit card practices, have set the stage for a more involved, angry consumer. Because of the tightening of credit, housing woes and job layoffs, many consumers spent 2009 on high alert, worried about finances and complaining more. In Texas, overdraft fees were the most common complaint, said the state regulator. Those complaints said the fees were too high, made too frequently and unfairly, and were charged when members had funds in their accounts. Some questioned the timing of deposits and withdrawals and whether that generated fees, according to the department. Another common complaint centered on the placement of collateral protection insurance, said the regulator. Members complained that insurance was added to the loan unjustifiably and that refunds were not calculated fairly. Others complained about customer service or the failure to grant or refinance a loan. Other complaints were about the use of cross-collateralization clauses. Some did not understand the effect of interest accrual when they used skip pay or made late payments. And one member questioned the rate increase on a credit card. Still, the number of complaints about credit unions is small. The department oversees 207 credit unions with state charters. It was not clear from the report whether the complaints were about a few credit unions or many.

N.Y. CUs to Assembly Support muni-deposit choice

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ALBANY, N.Y. (4/12/10)--The Credit Union Association of New York (CUANY), New York credit unions and a coalition of local government groups will be at the State Capitol for the next three days, calling on State Legislature to pass municipal deposit reform. Municipal deposit reform would allow local government entities such as towns, counties, school districts, fire districts and public libraries the option of depositing tax dollars in local credit unions or community savings banks. Currently, corporate banks have a monopoly on municipal tax deposits. The three-day government affairs advocacy conference, which begins today, will include legislative briefings, a press conference on Tuesday and visits to state legislators. "We are asking the State Assembly to join the Governor and State Senate in supporting municipal deposit choice," said William J. Mellin, president/CEO of CUANY. Calling the reform "much needed," Mellin said it would "help local governments save revenue, encourage more funds to stay local through community reinvestment, and create more opportunities for local residents to take out personal or small business loans." Mellin continued, "We're hoping that Speaker (Sheldon) Silver (D-64) and the Assembly--all of whom represent local governments, districts with credit unions, and thousands of credit union members--will do the right thing and support municipal deposit choice in the final budget. In short, municipal deposit puts more public dollars back on Main Street." Most states, including Connecticut and New Jersey, allow municipal deposit choice. Credit unions have the potential to help state and local officials in a way that doesn't cost state or local taxpayers anything, said CUANY.

Texas league board make-up to change

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FARMERS BRANCH, Texas (4/12/10)--The Texas Credit Union League’s (TCUL) board of directors in 2012 will undergo significant changes in its make-up, the league said. At Friday’s business meeting, the voting delegates approved restated bylaws effective in 2012; and an amendment to provide for the transition in electing asset category directors for a one-year term in 2011, effective immediately (LoneStar Leaguer April 8). The recently approved board composition consists of four directors in the asset category of $250 million-plus; four directors in the asset category of $50 million to $250 million, and four directors in the less than $50 million asset category. The current board composition consists of 10 directors in the asset categories of $100 million to $250 million and $250 million-plus; five directors in the asset category of $50 million to $100 million; three directors in the asset category of $20 million to $50 million; two directors in the asset category of $10 million to $20 million; and one director in the up to $10 million asset category. Prior to voting, Randy Smith, president/CEO of Randolph-Brooks FCU, Universal City, and chair of the league’s Corporate Governance Task Force, indicated the task force determined:
* The league board structure could be reduced; * Current technology enhances communications among credit unions; * Asset categories are the best way for credit unions to be represented on the board; * Geographic representation should be built into the structure; there is value in credit unions being represented like credit unions with some geographic relationship, and * With a smaller board, expenses could be reduced from league dues by as much as $50,000 a year.

Top topic at Vt. legislator event credit card bill

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MONTPELIER, Vt. (4/12/10)--A delegation of Vermont credit union leaders from across the state met Thursday with Gov. Jim Douglas, Speaker of the House Shap Smith, and House Commerce Committee Vice-Chairman Michael Marcotte before the credit unions' annual Legislator Appreciation Reception. The No. 1 topic: S. 138, a credit card bill that passed from the Senate to the House last week.
Vermont Gov. Jim Douglas talks with Karen Thomas-Cedergren, vice president of branch administration, River Valley CU, Brattleboror, Vt., at Thursday's Legislator Appreciation Reception.
The bill will be sent to the House Commerce Committee, the Association of Vermont Credit Unions (AVCU) learned, and will fall under the supervision of Rep. Marcotte (R-2), said AVCU's Newslines Express (April 9). Marcotte owns a convenience store in Newport and as a store owner like Sen. Richard Mazza, who expressed serious concern over the Senate legislation, Marcotte understands the complexity of the electronic payments system, said AVCU. He told credit union leaders that when the legislation reaches the committee, he would ensure it receives extensive input from all concerned parties and studies thoroughly the possible consequences before a vote is taken on the measure.
Dozens of Vermont state representatives and senators attended Thursday's Legislator Appreciation Reception hosted by the Association of Vermont Credit Unions.and the state's credit unions. (Photos provided by the Association of Vermont Credit Unions)
Speaker of the House Smith spoke about many challenges facing the House during the rest of the legislative session, which tentatively is set to end in early May. Among other topics of discussion, Smith said he is aware of the controversial issues around S. 138 and confirmed that it would be sent to Commerce. During a 15-minue meeting with Gov. Douglas in his ceremonial office, Douglas gave a brief legislative affairs status report. At one point, he semi-seriously told the group he hoped some of them would seek election to the legislature so the state government could benefit from their leadership, business experience, and the care and compassion with which they treat their members. He expressed concern that if SB 138 passed, it could separate Vermont from the rest of the country in terms of credit and debit card acceptance. He later stopped at the reception to continue chatting with credit union leaders. S.B. 138 would:
* Allow merchants to set minimum and maximum amounts for acceptance of debit and credit cards; * Forbid electronic payments system network processors from imposing penalties or requirements on the way merchants advertise, thus allowing merchants to add a surcharge for customers using a credit or debit card in the state; and * Require a state regulatory study, due Dec. 15, 2011, to determine the economic impact on banks, credit unions and consumers of prohibiting electronic networks from inhibiting merchants as to whose cards they can not accept.
The provisions are detrimental for credit unions, their cardholders and Vermont's economy, Bergeron has said (News Now April 5 and April 2).

BBB includes Better Choice as option to payday lending

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HARRISBURG, Pa. (4/12/10)--The Better Business Bureau of Western Pennsylvania listed Credit Union Better Choice as an option to payday lending, according to the Pennsylvania Credit Union Association (PCUA). The bureau had issued a press release warning consumers about online payday lenders who claim they are not required to follow state or federal laws regarding licensing requirements, debt collection practices or interest rate caps (Life is a Highway April 9). PCUA provided information to the bureau about Credit Union Better Choice, where credit unions have issued more than 28,000 short-term loans totaling more than $13.4 million since 2006. Members saved nearly $10 million dollars by using the program instead of a traditional payday lending product (News Now March 3).

ATM attacks more sophisticated says Javelin

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PLEASANTON, Calif. (4/12/09)--ATM attacks have become more sophisticated--shifting from traditional skimming to use of malware inside ATMs or ATM networks, fraudulent mobile alerts and account takeover from stolen information, according to a new report. Attacks have been reported in which maintenance crews opened up ATMs and installed malware, according to a Javelin Strategy and Research study. ATM manufacturer Diebold issued a security update last year for its ATMs after they were attacked by criminals who installed malware to steal sensitive customer information (Financial Services Information Security News April 6). Individuals can gain access to sensitive information in ATMs via administrative privileges to encrypted personal identification number (PIN) data, then use a computer to reverse the PIN encryption, said Robert Vamosi, analyst at Javelin Strategy and Research. Other attacks have involved sending customers fake message alerts asking for account information. Criminals then use the information to create a cloned card, the publication said. The financial services industry is moving toward Triple Data Encryption Standard for all ATMs that will help prevent such attacks. Other steps financial institutions can take to protect their ATMs include using security software that guards against malware and using encrypted PIN pads in ATMs that are Payment Card Industry Data Security Standard-compliant, Vamosi added. About 10% of fraud victims experienced fraudulent ATM withdrawals, Javelin said. About 23% of those with the fraudulent withdrawals left their primary financial institution.

IKiplingersI Dr. Oz tout CUNA locator website

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MADISON, Wis. (4/12/10)--Two national financial publications last week told consumers to check the Credit Union National Association’s website and credit union locator to find credit unions to join in their area. Kiplinger.com on Thursday also said, “Read our August 2009 article ‘Banks That Put You First’ for a sampling of the special deals and better terms that consumers are discovering as they switch to local banks and credit unions.” Doctoroz.com told readers in an article titled “Financial Health Plan”: “Community banks and credit unions offer up to 20% lower rates and may allow you to transfer your balance for no extra fee. Visit cuna.org to locate the credit union in your area. To read the articles, use the links.

Mississippi becomes sixth Young and Free region

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JACKSON, Miss. and CHILLIWACK, B.C. (4/12/10)--The Mississippi Credit Union Association (MSCUA) and Currency Marketing are partnering to offer the Young & Free program in Mississippi, which will pick a young spokesperson for the state’s credit unions. Mississippi, with 21 credit unions participating, joins Alberta, Canada; Texas; South Carolina; Alabama; and Tennessee to become the sixth Young & Free region in North America. Young & Free helps credit unions reach young adults through social media. The goal of Young & Free Mississippi is to help credit unions connect with young adults and help the association understand how it can serve the under-25 Mississippi crowd, said Charles Elliott, MSCUA CEO. Young & Free provides an individual aged 18 to 25 with an opportunity to become a spokesperson for Mississippi credit unions. The program aims to educate young adults about money. The individual will receive a full-time contract with an annual salary, a laptop computer, an iPhone and a video camera. The job includes traveling, attending and speaking at events throughout the state, and posting daily blog entries and weekly video blogs on the Young & Free Mississippi website. “We launched Young & Free Mississippi because we felt strongly that young people were not being well-served by large faceless financial institutions,” said the Young & Free Mississippi website. “Young people in Mississippi didn’t have a voice when it came to getting what they needed financially.” Mississippi credit unions encourage youth to visit the website, add comments to the blog, submit events to the calendar and ask questions. Every interaction on the site earns visitors entries into monthly prize drawings. Participating credit unions also will offer the Free2B Account, a line of free products and services for members age 18 to 25. The account offers free checking, debit and direct deposit. Interested 18 to 25-year-olds can submit a 60-second YouTube video, write a blog post and complete an application at YoungFreeMississippi.com by May 10. Applicants will be narrowed to three finalists, and site visitors will vote for the finalist starting May 14.

Prospera CU restructures closes branch

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APPLETON, Wis. (4/12/10)--Prospera CU, Appleton, Wis., is closing one of its branches and two of its GoodMoney payday lending loan alternative sites as a part of a restructuring plan. The credit union said Thursday it would close its Grand Chute branch June 5. Two GoodMoney sites inside of Goodwill stores in Green Bay, Wis., will close June 4. Six positions will be eliminated (Appleton Post-Crescent April 8). The closures are not a result of economics, Sheila Schinke, interim CEO for Prospera, told the newspaper. Trends within the industry show a preference toward automated and electronic branch services, the credit union said. About 50% of Prospera’s Grand Chute members used online account access and 36% used direct deposit. The credit union will continue to maintain locations in Appleton, Neenah and Menasha. Prospera also will continue to offer its GoodMoney services at its remaining locations. GoodMoney services launched in 2006.

Missouri CUs raise walls for wounded vets home

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COLUMBIA, Mo. (4/12/10)--Missouri credit unions built a specially adapted home in Columbia, Mo., for wounded Staff Sgt. (SSG) Robert Canine and his family during a three-day building blitz this past weekend as part of The Homes for Our Troops (HFOT) program. The HFOT Build Brigade brought volunteers together to build the home from a concrete foundation to a weather-tight structure in three days, said the Missouri Credit Union Association (MCUA) (The Missouri difference April 9). The Friday-through-Sunday Build Brigade began with a procession through Columbia
Staff Sgt. Robert Canine and his wife, Jennifer, and their son, Sebastian, look forward to life in Columbia, Mo., in their new home built by Missouri's credit unions and Homes For Our Troops this past weekend.
Missouri credit unions helped bring this concrete slab on Staff Sgt. Robert Canine's lot to a weather-tight home as part of a project built this past weekend by the Homes For Our Troops and the Missouri Credit Union Association. (Photos provided by the Missouri Credit Union Association)
that included SSG Canine and his family, Patriot Guard Riders, National Guard Humvees, and police escorts. Starting at Lowe’s Home Improvement, which served as a registration site for volunteers in January, the procession ended at the build site. An opening ceremony welcomed volunteers and officially kicked off the project. Special guests included U.S. Rep. Blaine Luetkemeyer (R-Mo.), State Sen. Kurt Schaefer (R-19), State Reps. Chris Kelly (D-24) and Mary Still (D-25), Columbia Mayor Darwin Hindman, and Sarah Barfield, a representative from U.S. Sen. Kit Bond’s (R-Mo.) office. As a surprise for SSG Canine, soldiers from his unit in Fort Riley, Kan., served as Color Guard, and his commander, Lt. Col. John Vermeesch, addressed the crowd. Before the first wall was raised, SSG Canine expressed his appreciation for the home-building effort. “I’m so thankful for what Homes for Our Troops and the Missouri Credit Union Association are doing for me,” Canine said. “The MCUA basically made this home happen for me …This is unbelievable. I want to thank everybody for coming out. I am so honored by this whole event.” The Build Brigade follows two years of fundraising by Missouri credit unions. This is the first of two specially adapted homes that Missouri credit unions have committed to build in the state with HFOT. Several state leagues and the Credit Union National Association have teamed up with HFOT for projects in other states.

Wisconsin banks decline CUs increase biz loans

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PEWAUKEE, Wis. (4/12/10)--Wisconsin credit unions experienced a 13% increase in business lending in 2009 while Wisconsin banks’ saw a 15% decrease over that same period. However, while the void for affordable business credit has shifted greater responsibility to credit unions to make the kind of loans the state needs to stimulate the economy and preserve jobs, credit unions can’t do more because of an arbitrary federal cap of 12.25% of total assets on their business lending, said the Wisconsin Credit Union League. The drop in lending by Wisconsin banks aligns with a national trend described by The Wall Street Journal as the largest since 1942. Credit unions have rushed to lend to firms turned down by banks because the requested loan was deemed “too small” and to entrepreneurs whose bank lines of credit were suddenly and inexplicably pulled. But credit unions are hard pressed to do more, the league said in a press release. Some credit unions are bumping up against a federal cap that limits how much they can lend to businesses; others can’t offer business loans at all because the cap prevents them from recovering the costs of doing so. Prior to 1998, when the cap was put in place, credit unions had no statutory limits on their business lending and had been making safe, secure business loans for more than 80 years. Credit unions’ business loan loss rate today is just one-ninth of that seen by Wisconsin banks. Credit unions have acted so responsibly that federal regulators have voiced support for increased credit union business lending, said the league. “If the current cap were lifted, credit unions could offer $362 million of new business credit and add 3,937 jobs in Wisconsin in the first year alone,” said Brett Thompson, league president/CEO. “Nationally, credit unions could offer $10 billion in new credit in the first year, creating 108,500 new jobs. And this can be done without expanding government and at no additional cost to taxpayers.” Bills in the U.S. House and U.S. Senate would raise the cap to 25% of total assets and raise to $250,000 the threshold for a loan to be considered a member business loan. Wisconsin U.S. Reps. Steve Kagen, Tammy Baldwin and Tom Petri are co-sponsors of the House bill. “Banks’ opposition to this effort is an affront to the average person on Main Street who has already paid dearly for the sins of those on Wall Street,” Thompson said. “Considering many credit unions’ business borrowers were denied by banks, it’s incredible that banks will stand in their way of receiving credit from a willing source--all to the detriment of job creation and our state economy as a whole.” Thompson also noted that Wisconsin credit unions’ average business loan is around $170,000 and most credit union business loans are to households with annual incomes below $50,000. “There’s no way banks can continue to distance themselves from the credit crisis when their actions--and the latest data citing banks’ failure to lend--prove otherwise,” Thompson added. “Banks aren’t competing with credit unions for the same loans, so they should get out of the way of the credit unions that are willing to help small businesses.”

Give social media a shot Texas league meeting told

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FARMERS BRANCH, Texas (4/9/10)--Credit unions resistant to engaging in social media should give it more thought, according to Amanda Vega of Amanda Vega Consulting, who opened the Texas Credit Union League's (TCUL) 76th Annual Meeting and Expo this week in Grapevine, Texas. Social media is a powerful tool that can help credit unions grow membership, increase awareness in the market space and influence decision-making, Vega said. "Credit unions are organically built on the premise of social media," she told the credit unions attending. Because credit unions are formed with a common bond, they have the ability to "connect faster and deeper with your members than your competition," Vega said. Vega cautioned that social media isn't about taking traditional stuff and putting it online. "It's about being a part of the conversation," she said. "Think of social media as a party. Your host invites you and then she introduces you to other people, and your connections grow." To develop a social media plan, Vega listed six steps:
* Listen; * Create content document; * Create the plan/footprint; * Assign staff to implement and oversee; * Interact: and * Track and regroup.
"The reality is, social media isn't going away. You may think it's only a kids' party, but those 'kids' are your future members," she said. Because there are inherent risks using social media, credit unions will find it's critical to have policies and procedures in place to mitigate the risks, she said.

Consumer credit--even at CUs--dips in February

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WASHINGTON (4/9/10)--Consumers took out almost 5.6% fewer loans in February than they did in January, according to the Federal Reserve's Consumer Credit statistics released Thursday. Almost all lenders--including credit unions--saw their consumer loans outstanding drop for the month. The lone exception: the federal government. Consumers still racked up more than $2.45 trillion in loans for February. That compares with January's nearly $2.46 trillion and December's nearly $2.45 trillion. Revolving credit, which is largely credit-card borrowing, declined at a 13.1% annual pace during February, accounting for $858.1 billion in loans compared with January's $867.6 billion. In January, consumers typically rein in their card payments because they've run up larger balances during the holidays, said analysts in The Wall Street Journal (April 8). They attributed part of the February decline to winter storms that prevented consumers from leaving home. Nonrevolving credit--loans for cars, boats and education--totaled $1.589 trillion, down from $1.591 trillion. At credit unions, loans outstanding for February totaled $231.6 billion, down from the $234 billion they loaned out in January. That compares with loans made during the first quarter 2009 that totaled $233.3 billion. Revolving loans at credit unions totaled $34.4 billion--a decline from $35.1 billion in January but the same as loans made in December. During first quarter 2009, credit unions made $32.2 billion in revolving loans. Nonrevolving loans from credit unions totaled $197.2 billion in February. In January, they loaned $198.9 billion out to members. In first quarter 2009, they loaned out $201.1 billion.

Sen. Cornyn sees members biz applauds CUs efforts

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SAN ANTONIO (4/9/10)--U.S. Sen. John Cornyn (R-Texas) visited The Bagel Factory, a small business in San Antonio made possible by a member business loan from Randolph-Brooks FCU, and applauded the credit union’s efforts in business lending. John and Suzanne Hermann said they had been turned down by several banks, but found a willing lender at the $3.75 billion asset, Universal City, Texas-based credit union (LoneStar Leaguer April 8). “So much of what we’ve heard in the recent financial crisis is that the big banks and Wall Street seem to be getting help, but what about folks at the main street level,” Cornyn told the Texas Credit Union League. “Because of regulatory concerns, rules have tightened up, perhaps, and made it harder for small businesses to get credit,” he added. “We appreciate the good work of Randolph-Brooks FCU in working with the Small Business Administration (SBA) and working with small businesses like The Bagel Factory to make [access to credit] possible.” “Business lending by credit unions is one of the better kept secrets,” said Randy Smith, CEO of Randolph-Brooks FCU. “I’m here to tell you business lending is open for business at Texas credit unions. Last year we increased our business lending by 20% and this year we hope to do even more.” The Hermanns arrived in San Antonio with experience running several coffee shops in Augusta, Ga. Originally from New York, Suzanne Hermann had a special interest in bagels and knew they would be a perfect addition to expand her coffee shops. In San Antonio, Hermann was ready to open her bagel shop but was turned away at both community and national banks there. Some institutions said they weren’t doing any business lending at all, others said they wouldn’t consider a restaurant, and Bank of America suggested the Hermanns check back when they were ready to launch their second location. “Fortunately we found help at Randolph-Brooks FCU,” said Suzanne Hermann. Randolph-Brooks helped them secure a Patriot Express Loan from the SBA in 30 days. The Bagel Factory opened on Nov. 9 and is operating well ahead of projections, thanks to access to capital from a credit union, TCUL said. “Small businesses can find it challenging during tough economic times, and sometimes these businesses don’t think of a credit union for a loan,” noted SBA District Director Pamela Sapia. “I’m proud to say that the No. 1 Patriot Express Loan lender in Texas and fourth in the nation is Randolph-Brooks FCU.”

NYIB offering youth advocate scholarships

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MADISON, Wis. (4/9/10)--The National Youth Involvement Board (NYIB) is accepting registrations for its 2010 Annual Conference and applications for several scholarships. The conference is July 26-29 in St. Louis. It will offer resources for credit unions interested in offering age-appropriate services and financial education for young consumers and members. Scholarship applications are due April 16. The deadline may be extended but prompt entry is encouraged, NYIB said. Scholarship winners and award recipients will be recognized during the conference awards program. All interested credit union professionals are eligible, NYIB said. Five of the awards help professionals attend the conference--three by region, one for “Serving the Underserved” and another named for Robert L. Curry, former president/CEO of CUNA Mutual Group. Two other scholarships are for Credit Union Development Education (CUDE) Training programs April 14-21 in Madison, Wis., and Aug. 11-18 in Bainbridge Island, Wash., and another names the NYIB designee for the World Council of Credit Unions’ (WOCCU) Young Credit Union People (WYCUP) Program. The 2010 WYCUP Program will be held in conjunction with the Credit Union National Association’s and WOCCU’s “The 1 Credit Union Conference” in Las Vegas July 11-14. For more information, use the link.

WOCCU Haiti relief fund tops 1 million

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MADISON, Wis. (4/9/10)--A $25,000 donation from Georgia Credit Union Affiliates and its members helped push World Council of Credit Unions' (WOCCU) Haiti Relief Fund past the $1 million mark. The fund, which provides immediate relief to victims of the Jan. 12 earthquake, will also be used to finance the rebuilding of Haiti's credit unions so they can assist members and support local relief efforts.
Click to view larger image BEFORE: Prior to the Jan. 12 earthquake, the Magloire Ambroise branch of KOTALEM CU was the busiest branch of the largest credit union in Port-au-Prince, Haiti.
Click to view larger image AFTER: The quake's tremors caused the building of the Magloire Ambroise branch of KOTALEM CU to collapse, killing two employees and reducing the once-busy branch to rubble. (Photos provided by the World Council of Credit Unions)
WOCCU's fundraising drive--launched after the earthquake devastated Haiti's capital, Port au Prince, and surrounding areas--attracted donations from individuals, credit unions and credit union groups worldwide. Some of the largest single-donor gifts came from CUNA Mutual Group, Melrose CU in Jamaica, N.Y., and the Irish League of Credit Unions and its international development foundation. The U.S. National Credit Union Foundation, The Co-operative Development Foundation of Canada and the Caribbean Confederation of Credit Unions each led national fundraising efforts to support the campaign that also resulted in major contributions. "The fact that so many individuals, credit unions and credit union organizations have responded to our call illustrates the compassion and unity found within our movement," said Pete Crear, WOCCU president/CEO. "We are honored and humbled to be able to help the poorest country in the Western Hemisphere begin its rebuilding efforts after suffering such a terrible disaster." WOCCU was seven months into its first development efforts in Haiti, which began last July, when the January earthquake struck. WOCCU staff is working with credit unions, local organizations and even the national regulator to provide short-term emergency relief in the form of food, water and tents in Port-au-Prince and in nearby Léogâne, the earthquake's epicenter. Intermediate efforts also are underway to research possibilities for establishing a credit union-to-credit union remittance network to allow Haitians living abroad to cost-effectively send money to friends and relatives in Haiti. A WOCCU team is developing a long-term plan for rebuilding damaged credit unions. The plan may also include consulting on providing credit union products and services most in need. The WOCCU Supporter regular renewal campaign will begin soon. To support global credit unions and their members through the WOCCU Priority Fund, make payments via check, or wire to:

Worldwide Foundation for Credit Unions Inc.

5710 Mineral Point Road

Madison, WI 53705

USA

Credit card donations may be made online using the links. For wire transfer information, contact Valerie Breunig, Worldwide Foundation for Credit Unions, 608-395-2055, or via email at vbreunig@woccu.org.

Governor keynotes Illinois Legislative Day for first time

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NAPERVILLE, Ill. (4/9/10)--Illinois Gov. Patrick Quinn was the keynote speaker at the Illinois Credit Union League’s (ICUL) annual Legislative Day event in Springfield for the first time before 140 Illinois credit union officials.
Click to view larger image Illinois Gov. Patrick Quinn (left) addresses attendees at the Illinois Credit Union League’s (ICUL) annual Legislative Day in Springfield while Dan Plauda, ICUL president/CEO looks on. (Photo provided by the Illinois Credit Union League)
Quinn highlighted his support of credit unions. The governor mentioned that he is a member of three credit unions and his father actually started a credit union. State Sen. David Koehler (D-46, Edwards), a board member at CEFCU in Peoria, introduced the governor prior to his speech, ICUL said. Also on the agenda was Robert Meza, director of the Illinois Division of Financial Institutions, and Michael Fryzel, board member of the National Credit Union Administration. Meza and Fryzel provided a general overview of the state and national credit union movement. Prior to Hill visits with state legislators to discuss issues critical to credit unions, participants were briefed by ICUL staff about key legislative initiatives and the current legislative environment in Illinois. While the credit union delegation was in Springfield, members of the Illinois General Assembly were involved in the third reading of bills and on deadline to pass bills out of their original chamber. There were nearly 10,000 bills filed for consideration during the spring session. ICUL staff identified more than 200 bills that directly impact credit unions and their business operations and have been working to defeat or amend many potentially adverse bills, the league said. Bills of interest to credit unions include:
* House Bill (H.B.) 4865--ICUL’s Credit Union Act Changes: The bill passed the House 110-0 and is assigned to the Senate Financial Institutions Committee. H.B. 4865 amends the Illinois Credit Union Act to establish a due date of 90 days after Dec. 31 for the completion and mailing of the credit union’s external audit report to the state Department of Financial Institutions (DFI). The change will provide most credit unions with an extra 30 days to submit their report to state regulators. Also, H.B. 4865 contains a provision to codify member proxy revocation bylaw provisions to make the act consistent with the DFI standard bylaws. * H.B. 6412 (formerly H.B. 5027)--Credit Card Changes: The bill passed the House 112-0. H.B. 6412 incorporates changes from the federal credit card law into state law and makes state law consistent with applicable federal credit card laws. The legislation will benefit credit unions by allowing them to avoid possible compliance conflicts between federal and state laws regarding consumer notices and other provisions, said the league. * Mortgage Foreclosure Bills: More than 25 bills designed to provide some type of “mortgage relief” have been filed to date. ICUL has worked with the financial services industry to minimize the negative impact of the bills. Negotiations are continuing over several pieces of mortgage foreclosure legislation.

Conn. league annual meeting spotlights awards service

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MERIDEN, Conn. (4/9/10)--The Credit Union League of Connecticut’s 2010 Annual Meeting Tuesday marked the second consecutive year of record attendance, with nearly 275 credit union employees, volunteers, and guests gathered in Plantsville, Conn., to present awards and discuss service.
Click to view larger image International speaker Dr. John J. Mahon, (left), poses with former student Tony Emerson, president/CEO of the Credit Union League of Connecticut, following Mahon’s address on service at the league’s 2010 Annual Meeting, Tuesday. (Photo provided by the Credit Union League of Connecticut)
The league’s first single-day annual meeting was free to affiliated Connecticut credit unions. At the business meeting, awards recognized the 2010 Connecticut Credit Union Professional of the Year, Andrew Klimkoski, president/CEO, Achieve Financial CU, Berlin, Conn., and the 2010 Connecticut Credit Union Volunteer of the Year, Frank Porter, secretary of the board and credit committee chairman, 360 FCU, Windsor Locks, Conn. International speaker Dr. John J. Mahon, professor of management and chair of international business policy and strategy at the Maine Business School, University of Maine, and dean of the College of Business Public Policy and Health, was the keynote speaker. Mahon focused on the importance of service and provided dozens of examples from his own and other well-known experiences. In his interactive talk, he urged credit unions to remember that service is not static, “keep your promises,” the member defines good service, and “organizations do not give good service--people do.”

CU System briefs (04/08/2010)

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* DETROIT (4/9/10)--Michigan credit unions' Save to Win lottery savings program will be one of two innovative savings practices discussed at the AARP Foundation Innovation Roundtable: Small Dollars, Big Change on April 20 at the Federal Reserve Bank of Chicago's Detroit branch. According to the foundation, the special session is in observance of Money Smart Week, and leaders of the savings lottery will update attendees on Save to Win's first year. The program has spurred more than $8 million in savings deposits by people who have not ordinarily been savers ... * CHARLOTTE, N.C. (4/9/10)--U.S. District Judge Martin Reidinger sentenced Ricardo Javier Arellano, 23, of Charlotte, to 34 years in federal prison for the armed robberies of two banks and a branch of Winston-Salem-based Truliant FCU, and for forcing a bank employee to accompany robbers to the bank heist. Arellano also was sentenced to three months' supervised release and ordered to pay a special $400 assessment, plus $49,467 in restitution. Reidinger said the case had several factors that warranted the heavier sentences: Arellano and an accomplice invaded a bank employee's home, bound the hands and feet of her children with tape, threatened harm to them if she didn't cooperate, and forced her to drive them to the bank before it opened. They also threatened a second employee with a gun. Arellano got two 25-year sentences for the bank robbery and hostage situation, to be served concurrently, in addition to two other concurrent nine-year sentences for the credit union and third bank robberies. An accomplice was sentenced earlier to 114 months (9.5 years) for his role in two of the robberies (US Fed News April 8) ... * PORTLAND, Maine (/9/10)--cPort CU employee Ginnie Konan was
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honored at the Portland, Maine-based credit union's annual meeting for her 50 years of employment with the credit union. She began in 1960 as a teller for what was then called Government Employees CU. Her positions have included phone operator, member service representative, and vice president of operations. She currently manages the credit union's individual retirement account program. Konan said she has no plans to retire and looks forward to "continuing to serve both the credit union and the members." (Photo provided by the Maine Credit Union League) ...

Collins Roberts receive Texas league accolades

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FARMERS BRANCH, Texas (4/9/10)--The Texas Credit Union Movement inducted two individuals into the Texas Credit Union Hall of Fame awards during the Texas Credit Union League’s annual meeting Wednesday. Curtis Collins and Dale Roberts were honored for their work in the movement. Collins serves on the board at JSC FCU, and Roberts is the retired president/CEO of PrimeWay FCU. Both credit unions are in Houston (LoneStar Leaguer April 7). Roberts has temporarily returned to the credit union as interim CEO to provide leadership while the credit union searches for a candidate to fill his role.

Congressmen join Missouris honorary HFOT brigade

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JEFFERSON, Mo. (4/9/10)--U.S. Sen. Kit Bond (R-Mo.) and U.S. Rep. Blaine Luetkemeyer (R-Mo.) have signed on to become honorary Build Brigade Members, through the Homes For Our Troops (HFOT) program, according to the Missouri Credit Union Association.
The brigade is building a home this weekend Staff Sgt. Robert Canine through the Homes for Our Troops program. Luetkemeyer is expected to attend the Build Brigade opening ceremony at 8:30 a.m. today. Bond staffer Sarah Barfield is scheduled to present a letter for support from the senator. Both lawmakers have sons who served overseas (The Missouri difference April 7). The event begins today and continues through Sunday. Volunteers are still needed to help during the event, the association said. HFOT is a nonprofit organization supported by credit unions that builds specially adapted homes for severely injured service members. The Credit Union National Association and other credit union leagues have participated in several projects.

Vermont credit card bill passes Senate

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MONTPELIER, Vt. (4/8/10)--Vermont's credit card bill, S. 138, made it through the state Senate Tuesday, with one change--to its title--but leaving intact several provisions by which merchants can limit the credit cards they accept. The bill is now named "An Act Relating to Unfair Business Practices of Credit Card Companies and Fraudulent Use of Scanning Devices and Re-encoders" and more appropriately reflects what the bill is now currently about, said Joe Bergeron, president of the Association of Vermont Credit Unions (AVCU). "The bill now goes to the House. We await announcement of which committee gets the assignment," Bergeron told News Now. In the meantime, both bankers and credit unions have events in the State House today, "where S. 138 will no doubt be the primary focus of lobbying efforts," he said. "Bankers have a Hike the Hill, and AVCU is hosting an annually highly attended Legislator Appreciation Reception, preceded by a private meeting of credit union leaders with the Governor and a few key legislators (all individual)." The bill, which was amended earlier, would:
* Allow merchants to set minimum and maximum amounts for acceptance of debit and credit cards; * Forbid electronic payments system network processors from imposing penalties or requirements on the way merchants advertise, thus allowing merchants to add a surcharge for customers using a credit or debit card in the state; and * Require a state regulatory study, due Dec. 15, 2011, to determine the economic impact on banks, credit unions and consumers of prohibiting electronic networks from inhibiting merchants as to whose cards they can not accept.
The provisions are detrimental for credit unions, their cardholders and Vermont's economy, Bergeron has said (News Now April 5 and April 2).

CU System briefs (04/07/2010)

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* HERRIMAN, Utah (4/8/10)--A prankster was arrested Tuesday after he sprayed a foul-smelling product into the pneumatic tube with his deposit at the drive-through lane at a branch of Mountain America FCU (Deseret News April 6). The smell made the teller who opened the tube sick. A website about the prank product said the spray isn't harmful. Police tracked down the prankster from the information he submitted on the transaction and booked Preston Barlow, 21, into Salt Lake County Jail for investigation of disorderly conduct, obstructing justice and other citations ... * TREVOSE, Pa. (4/8/10)--The 13th branch opened by TruMark Financial CU is turning into a lucky one. TruMark Financial already has seen a constant flow of activity at its
Click to view larger image Click for larger view
new Parkwood Shopping Center branch in Philadelphia and opened 45 new relationships since it opened on March 1. At its ribbon-cutting ceremony on March 26 are, from left: Joseph J. Ciaranca, chairperson, supervisory committee; Donna M. Carvin, vice chairperson, supervisory committee; Leonard V. Doughty III, board director; Hugh T. Bray, board president; Daniel L. Dillard and William A. Tollok, board directors; Pennsylvania Speaker of the House of Representatives Dennis M. O'Brien (R-169); State Sen. Michael J. Stack (D-5); Michele Kudrick, Parkwood branch manager; Joseph J. Bily, board treasurer; Wayne J. Goodwin and Richard V. Lawn, board directors; Richard F. Stipa, CEO; and David A. Rufibach, board director. (Photo provided by TruMark Financial CU) ... * PRIOR LAKE, Minn. (4/8/10)--The U.S. Green Building Council has granted a LEED Silver certification to the Shakopee Mdewakanton Sioux Community's new South Metro FCU building in Prior Lake, Minn. The 7,934-square-foot building opened in September. Among its features: pavers made from recycled tires, local and regional materials, natural lighting, air-friendly finishes, a rain garden to treat storm water, water-efficient plumbing fixtures and a geothermal heating systems. Construction waste was reduced by 75%. Other features: "preferred parking" for car pools, fuel-efficient vehicles and low-emitting vehicles (Finance & Commerce April 8) ... * PORT HURON, Mich. (4/8/10)--John Frank Herbert Schultz, former president of E&A CU, Port Huron, Mich., died March 26. He was 66. Schultz worked for the credit union for 30 years and retired as CEO in 2001. E&A CU has $238.9 million in assets and is located in Port Huron, Mich. Schultz is survived by his wife, a son, two step-sons, six step-grandchildren, several step-great-grandchildren and a sister (Times Herald March 29) ...

Auto leasing could be great opportunity for CUs

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MADISON, Wis. (4/8/10)--Credit unions could have a great opportunity in consumer auto leasing this year, according to a credit union auto leasing expert. Terry Bowdler, CEO of Credit Union Leasing of America (CULA), said there could be a significant increase in credit union auto leasing, provided a few things happen. First, interest rates will need to rise. When that happens, the payment differential between lease and loan payments will be magnified--and credit unions could have more opportunities to lease if those payments are more attractive than loan payments. Second, auto manufacturers and their finance arms will have to stop “playing with money” and offering leases at low rates--like 0% or 1%. Those tactics are hurting credit unions because they are undermining credit unions’ rates. A good insurer of residual risk also will need to emerge. Residual risk refers to factoring in what the value of a vehicle will be at the end of a lease term. If a consumer wants to purchase a vehicle for $30,000, and pays $15,000 plus interest to lease it--the risk will be whether or not the car is worth the amount left at the end. If those three events happen, “credit unions are in a great position,” Bowdler said. The opportunity will not happen in the short-term--six months--but credit unions will likely have a great consumer leasing opportunity within the next year and a half, he said. Credit unions do, however, have a great opportunity now to offer commercial leasing--which is leasing to their small business owners, he added. Kiplinger.com noted Monday that auto leasing could be making a comeback this year and that credit unions were stepping up leasing. Of the roughly 12 million new cars that will be sold this year, about one-fifth of them will be leased, Kiplinger said (April 6). About 17% of vehicles were leased annually before the auto market bottomed out in 2008 and 2009, the publication said. In general, credit unions lease about $200 million worth of vehicles each year. CULA hasn’t seen an increase in leases, but while the numbers may be down--they are positioned to go up “and then some” in the future, Bowdler said. For credit unions considering getting into--or getting back into--auto leasing, Bowdler suggested that they perform a great deal of due diligence on their insurer for residual risk. Many credit unions outsource their leases to other providers, so they need to research third party vendors, he said. About 3% of credit unions offer auto leasing, according to the Credit Union National Association. Many automakers halted leasing in 2009 when vehicle sales dropped. However, some lenders--like GMAC--are ramping up their efforts, Kiplinger noted. Regarding auto lending in general, credit unions gained auto lending market share in 2009, according to CUDL, an indirect auto lender for credit unions. Credit unions ended the year at 22.2%--a 3.8 percentage point increase in auto lending market share, CUDL said. Credit unions “gained a lot of shares from captives,” which dropped to 21.7% in 2009 from 25.4% in 2008, according to Andrea Salgado, CUDL market research analyst, who presented CUDL’s Auto Lending Trends & Credit Union Analysis webinar. Credit union auto loan penetration has been at 17% for the past several years. Auto loans make up about one-third of credit unions’ portfolios. “That figure hasn’t changed much,” Salgado said. Indirect loans increased 2% by $1.4 billion at credit unions. Indirect delinquencies went up 1.45% and charge-offs 1.74%. “That’s still below the numbers we see at banks,” Salgado said. She also noted that new-vehicle sales dropped 20% to 10.6 million for 2009. Used vehicle sales were at 35.5 million, down 3% from 2008. In January and February 2010, new auto sales were up over 2009 at 5% and 12%, respectively. CUDL credit unions were the fifth largest lender of auto loans in 2009, moving up from being the seventh largest lender in 2008. Top brands financed on the CUDL platform as of Dec. 31 were General Motors, Chrysler, Ford and Toyota. About 1,467 auto dealerships closed by the end of October--the most since the 1950s, CUDL added.

N.J. league broadcasts roundtable sessions live

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HIGHTSTOWN, N.J. (4/8/10)--The New Jersey Credit Union League hosted its first live broadcasts of two roundtable sessions Tuesday in a pilot it deemed successful.
A screen shot from ustream.tv shows the live broadcast of the New Jersey Credit Union League's Lending Roundtable in action.(Photo provided by the New Jersey Credit Union League)
The league used ustream.tv to broadcast from its boardroom two roundtables on lending and collections. The Web cameras were manned by Barbara Agin, the league's director of education and training. Viewers could join the webcast at any time after the start time and could send questions and comments (The Daily Exchange April 7). The Lending Roundtable was led by Alla Kounin, loan manager for Automatic Data Processing FCU, and focused on the question facing credit unions in the economy: Is there a recipe for the right loan decision? The afternoon Collections Roundtable was led by credit union attorney Stephen Edwards and focused on mortgage modifications, said the league.

Washington islanders aim to create a CU

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VASHON-MAURY ISLANDS, Wash. (4/8/10)--A group of consumers has been trying since January to start a credit union on Vashon Island--off the coast of Washington state. Supporters said the move will provide Vashon with increased control over its financial resources and the ability to create meaningful investment in people and projects (Vashon-Maury Island Beachcomber Reporter April 6). The group is rallying around the motto, “Our Community, Our Money,” which speaks to the essence of a credit union and the group’s desire to establish one, the newspaper said. “We could do the right thing for the environment, stimulate the local economy and invest in our community,” Bill Moyer, one of the main organizers of the credit union project, told the paper. “We could be taking control of our money.” The article noted credit unions’ lower interest rates on loans, higher interest rates on savings, and fewer service fees than banks. “Credit unions can also provide innovative financial services banks often don’t offer,” the paper said, adding that credit unions have enjoyed a surge in popularity as people have become less happy with large banks and their practices. To read the article, use the link.

NCUF offers CIF alternative partners with NCB

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WASHINGTON (4/8/10)--To diversify revenues, the National Credit Union Foundation (NCUF) has entered into a partnership with NCB, FSB, the thrift subsidiary of the National Consumer Cooperative Bank, to provide another Community Investment Fund (CIF) program alternative for programs supported by NCUF and state credit union foundations. The funding pathway through corporate credit unions--considered a crucial partnership by NCUF and the state foundations--remains in place. The CIF with the corporate credit unions have been a successful program for more than 10 years, enabling credit unions to support the foundations' philanthropic work. The corporate credit union network is a generous investor in the fund and donates administrative time to CIF, said NCUF. "If it weren't for the partnership with the corporate credit union network," emphasized Tom Candell, NCUF interim executive director, "critical programs such as REAL Solutions, Innovation Grants, Development Education and the CUAid disaster relief program would never have been made possible. We look forward to our corporate credit union relationship continuing to support our programs and services." In January, NCUF's Board of Directors made the decision to diversify. NCUF said that during the past two years, the value of all CIF investments declined to about $250 million from its peak $370 million, and it had seen a significant number of investments withdrawn for various reasons. Several large certificates were withdrawn even though they carried a penalty and a stated rate of more than 5%. Several withdrawals occurred because their investment return dropped significantly. Some credit unions withdrew their CIF investments because they do not want to invest in corporate credit unions. "It was important for us when we went looking outside the corporate credit union network to stay within the cooperative family," said Candell. "As the cooperative's community bank, NCB is a natural fit." NCB is no stranger to credit unions. "Our partnership exemplifies the unique set of values we share as cooperatives, and we are excited to expand the impact of NCUF's philanthropic efforts and its innovative Community Investment Fund," said Charles Snyder, chairman of NCB, FSB. CIF gives credit unions the ability to leverage their investments to support innovative credit union programs. CIF with NCB is designed as an alternative to the traditional CIF with corporate credit unions. It allows half of the dividend to be returned to investing credit unions. The other half is donated to NCUF, which disburses its half of the dividends to the various programs. For more detail on how CIF works, the programs it supports, and the unique features of CIF with NCB and the unique features of the traditional CIF with corporate credit unions, use the resource links.

Consumer loan delinquencies declined in 4Q

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WASHINGTON (4/8/10)--Consumer loan delinquencies declined in eight of 11 loan categories in fourth quarter 2009, marking the second consecutive quarter of broad-based improvement, according to the American Bankers Association’s (ABA) Consumer Credit Delinquency Bulletin. While credit union members’ loan delinquencies went up in the quarter, credit unions still saw fewer delinquencies than banks, said the Credit Union National Association (CUNA). ABA’s composite ratio, which tracks eight closed-end installment loan categories, fell four basis points to 3.19% of all accounts, compared with 3.23% of all accounts in the previous quarter. Bank card delinquencies dropped 38 basis points to 4.39% of all accounts, which is below the five-year average--4.52%. The report defines a delinquency as a late payment that is 30 days or more overdue. ABA Chief Economist James Chessen said the news is a strong indication that the economy is on an upswing. “The fall in consumer delinquencies is a very positive and hopeful sign,” he said. "Clearly, consumers are shoring up their finances, and banks are putting losses behind them. Overall, there is a prudent approach to credit.” Credit union consumer loan delinquency rates rose to 1.67% in the fourth quarter--up 12 basis points from the previous quarter, Steve Rick, CUNA senior economist, told News Now. “This is roughly half the 3.19% consumer loan delinquency rate reported by banks,” Rick said. “Credit union first-mortgage delinquency rates rose to 2.12%, up from 1.93% in the third quarter. We expect delinquency rates to fall in the summer of 2010 as job growth picks up steam. Economic indicators already are signaling a labor market turnaround. “March payroll numbers rose 162,000, according to the establishment survey of larger firms, the third time in the last five months the economy created more jobs than it lost,” he added. “The household survey--which includes small and start-up businesses--is reporting an even stronger labor market recovery. The Bureau of Labor Statistics reported a 264,000-job gain in March, the third consecutive month of job creation.” In the auto-loan categories, direct loan delinquencies fell 10 basis points to 1.94% of all accounts, ABA said. Indirect auto loan delinquencies--arranged through auto dealers--remained even at 3.15% of all accounts. Housing-related loans showed mixed results, ABA said. Home equity loan delinquencies hit another record, rising to 4.32% of all accounts, compared with 4.30% in the previous quarter. Conversely, home equity lines of credit delinquencies at quarter-end fell for the first time in six quarters to 2.04% of all accounts, compared with 2.12% in the previous quarter. “This first sign of improvement has been a long time coming and is finally some positive indication that the housing market is stabilizing,” Chessen said. He agreed with CUNA’s Rick that while most consumers appear to be handling their finances well, the level of consumer credit delinquencies still is heavily tied to job creation. “People are actively reducing their level of debt relative to their income and are rebuilding their savings,” Chessen said. “But it’s still a very stressful time for many families and this won't disappear until more people have jobs. This will keep delinquencies elevated for the next several quarters.”

Paper Tips for one-person finance departments

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MADISON, Wis. (4/8/10)--Leaders in one-person finance departments must balance what must be done with what they wish they could in the time allotted, according to a new CUNA CFO Council white paper. “Finding Time: The One-Person Finance Department Challenge” shares the experiences of six credit union leaders with chief financial officer (CFO) responsibilities, including some who also are CEOs or serve in other roles. The leaders share the technology tools, personal tips and perspectives that help them balance their workloads. The paper notes that depending on the credit union’s size and situation, a CFO’s assignments in an average day may include compiling financial reports, conducting financial analysis, monitoring progress toward strategic goals, updating software and performing building maintenance. Many CFOs want more time to delve into complex financial issues or explore strategic options for their credit unions. Increasing requirements of regulatory compliance and routine daily tasks siphon time, the council said. “Trying to manage time and be as efficient as possible is probably the biggest challenge that you have,” said CFO Donald Windmueller, Affinity First FCU, Minot, N.D. “You have a lot of functions you have to get done in a finite time period.” For more information, use the link.

SECU launches controlled-spending accountcard

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RALEIGH, N.C. (4/7/10)--State Employees' CU, Raleigh, N.C., is offering members a new account/card option to help them manage their spending--a Cash Points Global (CPG) account. Cash Points Global is a controlled spending account with electronic-only access through the card. It has no checks or paper statements. Transactions are limited to the available funds in the account, so there is no risk of nonsufficient fund or overdraft fees, said SECU. The card is ideal for travelers, frequent online shoppers, students and those without a traditional checking account, said the $19.6 billion asset credit union in a press release. The CPG account/card--with a $1 per month fee that is routed to the SECU Foundation, the credit union's charitable giving arm--can be used anywhere a Visa logo is displayed and at any of SECU's 1,100 Cash Points ATMs. Leanne Phelps, senior vice president of SECU's card and record services, said the credit union opened more than 700 CPG accounts before announcing the service to its membership, which indicates a "strong positive response" to the product.

Canadian island loses its only FI with CU shuttered

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DEER ISLAND, N.B. (4/7/10)--Residents of a small island in the Bay of Fundy off the coast of New Brunswick have lost their only financial institution after a credit union was shuttered Thursday when it couldn't recover from fraud. The Deer Island Credit Union had been on the island for 28 years but had not recovered from losing $1.7 million to fraud during several years. It had recovered $1.3 million of the stolen funds, but the credit union had difficulty staying profitable, said the credit union's regulator, the Risk Management Agency (CBC News April 6). It will be merged with the Charlotte County CU in St. George so residents can make their financial transactions in St. George or St. Stephen. That means the 1,000 Deer Island residents must take a 20-minute ferry trip to the mainland and then drive another 20 minutes to the credit union. Two employees have been transferred to the mainland branch. The Royal Canadian Mounted Police said the fraud case is closed. An employee suspected of the thefts was never charged and has since died, said CBC News. This isn't the first time residents of a Bay of Fundy island lost their credit union. Last year, Campobello Island's credit union shut down and residents had to endure a 200-kilometre round trip drive that crossed the Canadian-U.S. border four times, said the article.

Georgia CU members benefits reflect nations trend

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ATLANTA (4/7/10)--Georgia credit union members saved almost $130 million in 2009 from higher interest rates on savings accounts, fewer fees on credit cards and lower interest rates on loans, according to the latest tracking index from Georgia Credit Union Affiliates (GCUA). The state’s statistics reflect the national trend, said the Credit Union National Association (CUNA). Georgia credit unions last year provided almost $130 million in direct benefits to the state’s 1.8 million credit union members--or $74 per member and $141 per member household--compared with other Georgia banking institutions. Also, interest rates for a number of loan options remained lower in 2009 for credit union members (PRNewswire April 6). CUNA’s Economics and Statistics department estimates that credit unions provided nearly $7.3 billion in direct financial benefits to the nation’s roughly 90 million members during the 12 months ending in December. These benefits are equivalent to an average of $81 per member or $154 per member household. Credit union per-member and per-household benefits are substantial, CUNA said. The total benefits provided are divided across all members--or all member households--even those who conduct very little financial business with credit unions. High-use or loyal members households that use a broad range of credit union services save much more on average, CUNA said. The Georgia Credit Union Benefits Index--based on data collected during December 2009--is the latest installment of an ongoing report updated on a semiannual basis. The report--which uses data compiled from more than 160 Georgia credit unions and banking institutions from Datatrac, a rate survey firm--serves as a metric to help Georgia consumers make more informed personal financial decisions. “Credit union usage continues to translate into substantial savings for Georgians,” said Michael Mercer, GCUA president/CEO. “Many Georgia consumers are switching to credit unions because savings are funneled back directly to our members, providing a direct and positive impact to their wallets. The index also reinforces that the total financial benefit of being part of a credit union is even more substantial to members who use them for multiple financial needs.” The Georgia report also found that:
* Credit unions granted more than 352,000 loans to Georgians in 2009, compared with 368,000 in 2008; * Loans granted totaled more than $4.3 billion in 2009, compared with $4 billion in 2008; * While the number of loans granted decreased from 2008 to 2009, the average loan amount was slightly higher in 2009--$12,235 in 2009, compared with $11,029 in 2008; * The majority of loans generated by credit unions were for consumer purchases, especially for used vehicles, but also for new vehicles, home mortgages, home equity lines of credit and credit cards; * Lower average interest rates on loans issued by Georgia credit unions saved members a total of $53.3 million compared with bank rates; * Higher interest rates on savings products yielded $42.2 million to credit union members’ accounts compared with banks. * Fewer and lower fees for credit union members totaled $34.3 million in savings benefits compared with banks.
For more CUNA information, use the link.

CU System briefs (04/06/2010)

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* WASHINGTON (4/7/10)--Those who can't travel to the 38th Credit Union Cherry Blossom Ten Mile Run Sunday can go online at about 7:15 a.m. to watch the opening ceremonies, the elite women runners and the elite male runners take off, and the winners crossing the finish line. The organizers arranged for a live video streaming at the start/finish line so viewers can catch a glimpse of their friends and co-workers among the 15,000 runners. Viewers can support the race's fundraising by buying a commemorative running t-shirt, "Snuggle Up for Kids." Proceeds will go to the Children's Miracle Network hospitals. For more information about the run use the link ... * SAN DIMAS, Calif. (4/7/10)--Western Corporate FCU (WesCorp) Senior Vice President of Pacific Operations Rand Yamasaki will depart WesCorp on April 23 for a position as executive vice president and chief financial officer of Aloha Pacific FCU, based in Honolulu. Yamasaki served as president/CEO of Pacific Corporate FCU from January 1998 to December 2003. He also has held senior management positions with Hawaii State FCU, Honolulu City and County Employees FCU, and Honolulu Police FCU since 1982. Yamasaki also taught credit union accounting courses for 13 years for the Hawaii Credit Union League and provided expertise in strategic planning, asset-liability management and board governance. At the $620 million-plus asset Aloha Pacific, Yamasaki will be responsible for the finance, information technology, electronic services and support services divisions. WesCorp President/CEO Philip Perkins said WesCorp will begin a search for a successor to oversee its Pacific operations ... * LANSING, Mich. (4/7/10)--Berrien Teachers' CU, headquartered in Saint Joseph, Mich., and Otsego Paperworkers CU, Otsego, Mich., a $2.2 million asset credit union, plan to merge, pending approval from regulators, said the Michigan Credit Union League. Members of the Otsego Paperworkers CU voted in support of the merger, said Berrien Teachers' CU CEO Scott McFarland. The merger will result in a $280 million asset credit unions with more than 26,000 members, serving Allegan, Berrien, Cass and Van Buren counties (Michigan Monitor April 4) ... * FREMONT, Ohio (4/7/10)--A woman has been charged with embezzling about $101,000 from Fremont (Ohio) FCU. Michelle M. Wehring, 36, is being charged with the embezzlement, which occurred between roughly June 15, 2005, and Sept. 8, 2008, according to the U.S. Attorney's office for the Northern District of Ohio (Targeted News Service March 25). No other information was released ... * ALBANY, N.Y. (4/7/10)--The Credit Union Association of New York will award $13,500 to 20 college-bound students as part of its annual Scholarship Program. Each applicant must be a member of a participating New York credit unions. This year, the 10-year-old program will award five $1,000 scholarships and 15 scholarships of $500 each. Ninety-six credit unions participated, submitting 1,593 applications. The winners came from 12 of the association's 14 chapters. Many chapters and credit unions also are awarding their own scholarships in conjunction with the association's programs. Winners of the $1,000 scholarships are: Alexis Glennon, Arlington Heights, Ill., member of Quorum FCU; Adam James Stewart, Barton, N.Y., member of Visions FCU; Julia Catherine Calagiovanni, Syracuse, member of Empower FCU; John David Mihovics, Nanuet, member of Palisades FCU; and Sharon Elizabeth Hartzell, Binghamton, member of Visions FCU ... * PITTSFIELD, Mass. (4/7/10)--Greylock FCU and its employees raised $106,613--a record--during the credit union's annual United Way drive. Employees raised $76,613 through pledges, raffles, flower sale, bingo night and other functions--a 9.5% increase over last year. Their contributions were added to the corporate support total of $30,000. Greylock partnered with Johnson Ford Lincoln Mercury Nissan to donate a car raffled off in support of United Way. The raffle winner was Mayor James Ruberto, who chose the cash option, and in honor of his late wife Ellen Ruberto, split the money between Berkshire United Way and The Colonial Theatre. From left are Gary Johnson of Johnson Ford; Kristine Hazzard of Berkshire United Way; Mayor James Ruberto; and Angelo Stracuzzi, president of Greylock FCU. (Photo provided by Greylock FCU) ...

CUs help youth prepare for a secure future

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MADISON, Wis. (4/7/10)--President Barack Obama and several governors Monday proclaimed April as Financial Literacy Month. However, credit unions nationwide already are active in at least one financial literacy area--helping youth prepare for a secure financial future.
Click to view larger image Kim Watson (right) of The County FCU, Caribou, Maine, helps a student with his food budget at the Financial Fitness--A Money Management Experience in Limestone, Maine. The event was coordinated by the Aroostook Chapter of Credit Unions. High school juniors from throughout Aroostook County participated. (Photo provided by the Maine Credit Union League)
Business Development Manager Adriana Brunner (right) at San Diego-based Point Loma CU’s San Marcos branch poses with GEAR UP (Gaining Early Awareness and Readiness for Undergraduate Programs) members at an outreach program. (Photo provided by Point Loma CU)
Some examples are:
* The Aroostook Chapter of Credit Unions in Maine held its third annual Financial Fitness Money Management Experience at the Loring Job Corps Center in Limestone, Maine, March 30. Nearly 350 students attended, leaving with a better understanding of the financial challenges that they may face in the future, said the Maine Credit Union League. The day’s interactive “game of life” builds awareness for youth education and for credit unions’ dedication to financial literacy in their communities. The Financial Fitness Money Management Experience is a half-day event during which students check in and receive a scenario packet of their life at age 22, which includes their occupation, income and credit history. From there, students map out their financial future from financing their housing to purchasing food and clothing. * San Marcos High School students received an inside look at how the financial services industry operates during a Job Shadow Day program at San Diego-based Point Loma CU’s local branch in San Marcos, Calif. The tour was organized by Palomar College as part of its GEAR UP (Gaining Early Awareness and Readiness for Undergraduate Programs) outreach. California’s GEAR UP program enables low-income students to develop the skills necessary to succeed in college. Palomar College partners with local businesses to introduce middle and high school students to career options. * San Mateo CU (SMCU), Redwood City, Calif., is sponsoring April as Youth Month to commemorate this year’s National Credit Union Youth Week, April 18 to 24. The celebration will be marked by several special events and promotions. The theme of the festivities, “Get in the Savings Game,” has been developed by the Credit Union National Association (CUNA) to teach children of all ages the value and rewards of saving money. In keeping with the sports concept, children can select a prize from basketballs to soccer balls to footballs, softballs and playground balls--for every five deposits they make into an SMCU youth savings account. SMCU also will feature a 12-month add-on youth certificate of deposit with a 1.25% annual percentage yield. After the initial purchase date, additional funds may be deposited with the same interest rate. * Rome, N.Y.-based AmeriCU branches throughout its eight-county area Thursday kicked off the first, official day of the month-long celebration of the annual Credit Union Youth Month. For the third year in a row, AmeriCU has expanded CUNA’s Youth Week to a month-long celebration, giving its staff more time to interact with the youth who come to learn about financial education and literacy. AmeriCU representatives will emphasize the importance of youth earning, spending, saving and managing their own money. Featured are prizes, literacy workshops and games to engage youth ages 5-18 with appropriate, age-related tips on how and why saving money is important, or why they should keep saving if they already save.

CUNA fuses branch managers biz developer schools

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MADISON, Wis. (4/7/10)--The Credit Union National Association (CUNA) is fusing its Branch Management Institute and Business Development School into one event--CUNA FUSE 2010: An Institute for Branch Managers and Business Development School. The new fused school will meet Oct. 25-28 in Nashville, Tenn. CUNA FUSE 2010 will offer business development, branch management and leadership topics. The closing general session will help attendees create a personal action plan to implement when they return to their credit unions. “Over the last few years we have seen an increase in the number of branch managers taking on business development responsibilities and attending our Business Development School,” said Meghann Dawson, CUNA instructional design manager. “The same is true for business development professionals attending our Branch Management Institute. Aligning the two programs to address the evolving responsibilities of both professions is the best solution in helping them achieve their goals and exceed expectations.” Featured sessions include:
* Branch Management and Business Development: Partnering for Success; * Communicating with Impact and Influence: Building Your Business and Team; and * Transferring What You’ve Learned to What You’ll Do.
For more information, use the link.

CUNA Mutual increased claims payments 40 in 2009

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MADISON, Wis. (4/7/10)--CUNA Mutual Group added new Credit Union Protection coverage options and increased claims payments to credit unions covered by its Bond program by more than 40% in 2009, a league webinar audience was told Wednesday. About 60 executives and front-line staff from credit union leagues and league service corporations received product enhancement updates, reviewed risk trends and participated in a question and answer session with CU Protection product leaders. "It’s a very difficult economy, and we recognize that credit unions are faced with increased loss exposures," said Chad Nitschke, vice president of CU Protection. "In addition to paying more claims, we also made enhancements to our products to help credit unions control their losses from new and ever-growing risks." Paid claims were up in 2009. "In fact, Bond benefits paid to customers exceeded premiums by 27%," Nitschke said. Credit unions filed nearly 8,000 CU Protection claims last year. A breakdown::
* Bond--3,000; * Management & Professional Liability (MPL)--1,200; * Property & Business Liability/Workers’ Compensation--3,000; and * Business Auto--700.
Lender Liability was the fastest-growing loss area with a 19% increase, while Directors, Volunteers and Employee (DVE) claims increased by more than 100%. Nitschke said four of the most notable CU Protection product enhancements in 2009 included:
* Plastic Card Claims Automation with FIS and CO-OP Financial Services; * Introduction of Management Umbrella coverage within MPL; * Identity Theft coverage for credit union directors within MPL; and * Fraudulent Mortgage Loan Documentation coverage.
Nitschke reported more customers than ever are staying with CUNA Mutual, and more are moving to CUNA Mutual from competitors. CU Protection premium retention was 98.4%, the highest in recent history and well above industry averages, which run 75% to 85%. "In addition, more than four times as many customers returned to CUNA Mutual in 2009 after being with a competitor, compared to historical averages," Nitschke said. "We enjoyed very positive results for earning customers' business in 2009, and that momentum seemed to continue in the first two months of 2010.” Participants received updates from product heads and a summary of CUNA Mutual’s Risk Management Services and advocacy efforts. These activities include founding membership in the Credit Union Risk Council and lobbying activities to enact legislation for plastic card payment industry change. A.M. Best affirmed CUNA Mutual Group's “A” (Excellent) financial strength rating, which applies to CUNA Mutual's principal companies: CUNA Mutual Insurance Society, a life and health insurer, and CUMIS Insurance Society Inc., a property and casualty subsidiary, which provides the CU Protection products. The “A” rating is the third highest rating of 16 categories of ratings A.M. Best issues.

CU System briefs (04/05/2010)

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* MERRILL, Wis. (4/6/10)-- Linda L. Osness, executive vice president-financial services of Park City CU, Merrill, Wis., died March 31 at her home of a massive heart attack. She was 60. She had worked for the credit union, the former Cooperative League CU, since graduating from high school. She was honored for her 40 years of dedication in October 2007. She was active in the School to Work Program and the Youth Apprenticeship Program with the MAPS district and helped establish the branch office at Merrill Senior High School. She also coordinated the establishment of branch offices in Tomahawk, Minocqua and Rhinelander. She served as co-captain of Park City CU's Relay for Life Team and was recognized by the Wisconsin Credit Union League for her efforts. She is survived by seven brothers and sisters, and many nieces and nephews. Services are today at 10:30 a.m. at Our Saviour's Lutheran Church, Merrill (Wausau Daily Herald April 3) ...

MidFlorida CU reissues cards from Heartland breach

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LAKELAND, Fla. (4/6/10)--MidFlorida CU says it is issuing 12,000 new debit cards after recent fraud attempts stemming from a data breach announced in 2009 by Heartland Payment Systems. Kathy Britt, MidFlorida chief operating officer, told area media that affected members received notices March 26 informing them they will receive new debit cards because of the continued risk of fraud. Members were asked to review their accounts for suspicious activity and to check their credit reports (BankInfoSecurity.com April 1 and The Ledger March 30). The $1.4 billion asset credit union has about 80,000 debit card holders and had replaced 5,000 cards in 2009, when the breach was made public. Heartland, a Princeton, N.J.-based payment processing company announced in January 2009 a breach had exposed information from 130 million credit and debit cards--the largest data breach on record At least one other financial institution--First National Bank of Durango, Colo.-- said it would replace 5,000 debit cards as the result of new fraudulent activity related to the Heartland breach, said Bank Info Security. The man responsible for the Heartland breach and others, Albert Gonzalez, was sentenced March 25 and 26 to concurrent 20-year sentences in prison.

California CUs shook up from quake

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SAN DIEGO (4/6/10)--Several credit union branches suffered damages from an 7.2 magnitude earthquake that hit Southern California and Mexico Sunday afternoon. The El Centro and Calexico branches of Sun Community FCU sustained substantial damages from the quake and will be closed until further notice, according to a notice posted on the credit union’s website. The credit union’s call center also is unavailable. Sun Community’s Imperial branch was open Monday from 10 a.m. to 5 p.m. The Brawley and Calipatria branches are fully functional, and ATMs at all locations are up and running. The Golden 1 CU, Sacramento, also has a branch in El Centro. The branch suffered minor damages but “everything is back to normal now,” said Tina Ramos-Ingold, California Credit Union League public affairs coordinator. The epicenter was in Mexicali, Mexico, southeast of Tijuana, Calif., but affected parts of Southern California and damaged buildings in Mexico-California border cities (The New York Times April 5). Two people were killed and more than 100 injured in Mexico. One person was injured in Calexico. About 100 aftershocks were reported, said The Associated Press (April 5). The earthquake took out three power lines in Calexico, and a gas leak forced an evacuation of about 300 homes. Electricity also was out in the city’s southeast area. “The U.S damage appeared to be limited to California's southeastern Imperial Valley in what was one of the strongest earthquakes to hit the region in decades,” AP said. “The shaking was felt hundreds of miles away in Phoenix and Las Vegas.”

Marriott to build hotel near GAC site

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WASHINGTON (4/6/10)--A District of Columbia Superior Court judge has given Marriott International the go-ahead to build a hotel across the street from the Walter E. Washington Convention Center--the site of the Credit Union National Association's (CUNA) Governmental Affairs Conference (GAC). CUNA's next GAC will be at the convention center Feb. 27-March 2, 2011. The city could break ground on the $537 million, 14-story Marriott Marquis hotel in late May or early June, said D.C. Attorney General Peter J. Nickles (The Washington Post March 31). On March 29, Judge Natalia Combs Greene dismissed a lawsuit brought by Wardman Investor, controlled by JBG Cos., which alleged the city acted illegally and showed favoritism in the bidding process. Last fall, the city agreed to finance the Marriott project with $206 million and give the development team a 99-year ground lease on city-owned land. The district had been trying to attract a convention hotel for 11 years. Nickles said that even if JBG appeals, the hotel will break ground. The judge's ruling doesn't affect countersuits against Wardman by the city, the Washington Convention and Sports Authority, and Marriott alleging the lawsuit was an extortionate plan to stop construction of the convention center hotel and force Marriott to renegotiate a Wardman Park's management agreement. JBG bought the Wardman Park Marriott hotel with another company five years ago. Ben Jacobs, managing partner of JBG, was quoted in the article as saying that in a flat hotel market, competition from a convention center hotel would threaten the Wardman..

Bellcos win moves UBIT victory further says CUNA

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DENVER and WASHINGTON (4/6/10)--A federal judge's ruling Friday--that Bellco CU of Greenwood Village, Colo., is not liable for unrelated business income tax (UBIT) in several significant areas--is a significant victory for credit unions, said Credit Union National Association (CUNA) General Counsel Eric Richard. The U.S District Court for the District of Colorado ruled Friday that income derived from credit life and disability insurance, sold directly or indirectly, as well as royalty income from accidental death and dismemberment (AD&D) insurance should not be subject to UBIT. The decision by U.S. District Judge Christine M. Arguello supplements the court’s ruling last November in the Bellco case that its commissions from vendor sales of financial products and services such as stocks and annuities to its members were “substantially related” to its tax-exempt purpose and so therefore not subject to UBIT. Last year in the U.S. District Court for the Eastern District of Wisconsin, a jury ruled Community First CU, Appleton, Wis., was exempt from UBIT on income from credit life insurance, credit disability insurance and GAP coverage. The Colorado decision “is a substantial victory in credit union court challenges to the Internal Revenue Service's (IRS) policy toward UBIT and its application to credit unions,” said Richard. Richard is a member of the UBIT Steering Committee, comprised of CUNA, CUNA Mutual, the American Association of Credit Union Leagues and the National Association of State Credit Union Supervisors. The committee supported Bellco when the credit union filed the lawsuit last May. “This is the second time in a row the courts have rejected the IRS’s analysis of how UBIT should apply to credit unions, and the combined actions in this case extended that tax-exempt determination beyond credit life and disability insurance and GAP to also include financial products and services and royalty payments on AD&D insurance activities," said Richard. “At some point the IRS is going to have to recognize the inevitable and will have to change its policy based on the court rulings that have now been established,” he added. The government had argued that credit union insurance products are a poor value for members and do not promote thrift. Its case relied heavily on "low loss ratios" experienced by the insurance company that worked with Bellco. Judge Arguello ruled that credit insurance is directly related to the credit union's tax-exempt purpose because it promotes thrift. "In the banking and credit union context, the concept of thrift is tied to sound financial management," she said. "Credit insurance does just that. It permits a borrower to guard against certain difficult circumstances and to know that, if the unfortunate event of death or a serious disability occurs, the borrower's family and/or assets would be protected. For a relatively marginal payment, the borrower buys peace of mind," she added. "None of the government's arguments convince the court otherwise. The government's basic theory is that credit insurance is a 'bad deal' and thus cannot promote thrift," Arguello wrote, adding that the low loss ratio used "simply indicates that the insurance product was purchased by people who had not used it--yet." "In short, nothing about the low loss ratio, standing alone, convinces the court that credit insurance cannot be--and was not--substantially related to Bellco's thrift function." She also noted that "the evidence does not show that profit was the primary motivation in offering credit insurance." The AD&D insurance royalties issue centered on whether the credit union played a passive role in marketing and administering the program. "Much of Bellco's time was spent on activities intended to protect Bellco's goodwill with its members and its member privacy rather than to actively promote the AD&D program or otherwise perform administrative services for that program," Arguello wrote. Bellco's work "was focused on protecting its intangible assets and was sufficiently insubstantial, so as to result in the income appropriately being considered royalties." She noted that the majority of hours logged were at Bellco's call center, answering basic calls from members asking about the AD&D program. Citing insufficient recordkeeping rather than the principles at issue in the case, the court ruled that Bellco was liable for UBIT tax on its Credit Insurance income for tax year 2000 and a portion of tax year 2001, and on its share of profits from the Credit Union Indirect Lending Association. The ruling came after a trial in which court heard testimony of credit union officers and employees, credit union members and credit union league officials, said Michael M. Conway, attorney for Foley and Lardner, who argued the case on behalf of Bellco CU. It shows that this was a considered decision based upon evidence, not just legal interpretation, he said.

Olympian noted marathoners join Cherry Blossom Run

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WASHINGTON (4/6/10)--Famous marathoners and running enthusiasts plan to participate in the Credit Union Cherry Blossom 10 Mile Run Sunday in Washington, D.C. They include Bill Rodgers, Boston Marathon legend and former Olympian Joan Benoit Samuelson. They will sign autographs and talk to media at the event. Lead sponsor for the race is PSCU Financial Services. The Credit Union National Association also is sponsoring the event. The run hopes to raise $4 million for Children’s Miracle Network hospitals. Runners have donated more than $150,000 in the online giving program for the 2010 run. Credit unions also provide volunteers to serve on race day. Entries to the race are determined by lottery. More than 27,000 people applied for 15,000 slots for this year’s run. Rodgers won 22 marathons in his career and set numerous records. He is a member of the National Track and Field Hall of Fame and the National Distance Running Hall of Fame. Samuelson earned an Olympic gold medal in 1984, won two Boston Marathons in 1979 and 1983, and holds numerous world and American records. At 50, she set the American 50-59 women’s record by finishing the 2008 Women’s Olympic Trials Marathon in 2:49:08. This will be her first appearance at the Cherry Blossom Run.

Chrysler temporarily suspends CU program

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LANSING, Mich. (4/6/10)--Chrysler has temporarily suspended its affiliate rewards program, including its arrangement with credit unions under the Invest in America (IIA) program, according to an e-mail message to CUCorp and the leagues. The program "will be temporarily suspended pending fast-track discussion with Chrysler senior management in April," said the e-mail, sent Thursday by Kim Irwin, vice president of IIA. "We are hopeful that the program will have no more than a 30-day interruption, but we will communicate more as soon as we know details." "This is not a reflection of Chrysler's perception of value of the IIA program. Rather, it has to do with executive management's management of all incentive programs with direction from the federal government," Irwin emphasized. "The IIA program and supporting credit unions have benefited greatly from an outstanding relationship with Chrysler Group LLC," said the e-mail. "Since inception, credit unions have sold over 103,000 Chrysler, Jeep, Dodge and Ram Truck vehicles through the IIA program. These sales generated over 101,000 loans totaling more than $2 billion and resulted in member savings in excess of $77 million." Irwin's message noted IIA has experienced a temporary suspension before, and IIA and Chrysler worked through it. "In fact, through your efforts, we have experienced significant Chrysler sales increases in 2010 as the program once again gained traction. We are likewise confident that we can do the same this time." Irwin asked credit unions for patience "as we help Chrysler address the financial challenges associated with the environment they operate in."

LEVERAGE is the new name for LSCUs service corp

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BIRMINGHAM, Ala. and TALLAHASSEE, Fla. (4/6/10)--The League of Southeastern Credit Unions has a new name for its service corporation--LEVERAGE. The company was created through consolidation by the Florida and Alabama Credit Union Leagues’ service corporations. LEVERAGE will offer audit and compliance solutions, human resources, lending, operations, executive search solutions, Sprint Mobile phone services and Office Depot solutions. “The name LEVERAGE is a natural fit for the LSCU Service Corp.,” said Patrick La Pine, LSCU president/CEO. “Everything we do for our credit unions and our business partners is to create an edge for them. The LEVERAGE brand will be a powerful resource for credit unions to maximize their future growth.” The relationship of the Business Services Division with Office Depot is saving credit unions 70% on office supplies, and the relationship with Sprint Mobile Services generated $300,000 in non-interest income for credit unions last year, the league said.

N.Y. Senate sets 15M for state CDFI fund

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ALBANY, N.Y. (4/6/10)--The New York State Senate has called upon Gov. David Paterson to direct $15 million for an initial capitalization of the New York State Community Development Financial Institution (CDFI) Fund. The Senate passed its resolution on March 24 as a part of its Majority Resolution for a Fair and Responsible SFY10-11 Budget. CDFIs are community-based financial institutions that focus on lending to low- and moderate-income people and communities. About 78% of CDFI clients are low-income, 70% are minorities and 63% are female, said the National Federation of Community Development Credit Unions. “In fiscal year 2009, there were 110 CDFIs in New York with more than $1.93 billion in loans outstanding to more than 100,000 customers, including businesses, affordable housing developers, community facilities, microenterprises and individuals,” said Melanie Stern, federation senior program officer and coordinator of the New York Coalition of CDFIs. “CDFIs are experts at leveraging funds, and according to research conducted by the U.S. Department of the Treasury, CDFIs leverage federal dollars with private dollars by an average of 20 to 1. Based on this figure, we estimate that a $15 million appropriation to the New York CDFI Fund will allow the state’s CDFIs to leverage an additional $300 million in private sector investments,” she added. The State Assembly has yet to pass its own resolution for $15 million for CDFIs. But Stern is optimistic because the Assembly has been a traditional champion for CDFIs in New York, Stern said. “The only reason this program exists at all is because members of the assembly kept it alive with yearly allocations of $1 million to $1.5 million to expand CDFI lending to minority and women-owned business enterprises,” she added. “Our coalition is hopeful that the assembly will follow through on its long history of support to CDFIs and pass a resolution with a similar recommendation to the governor.” New York CDFI legislation is unique in that it is modeled after the federal CDFI Fund to allow a full range of CDFI activities. “At the federal level, CDFIs have become central players in promoting economic recovery,” said federation President/CEO Cliff Rosenthal. “Under the Obama administration, the federal CDFI Fund has seen its yearly appropriation more than double from its all-time high under President Clinton. With $250 million requested by the president for 2011, there’s never been a better time for New York State to expand its support of CDFIs.”

NEW Bellco wins UBIT court ruling

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DENVER (Filed 11:55 a.m. CT 4/5/10)--A Colorado judge has issued a ruling in favor of Bellco CU, the Greenwood Village, Colo.-based credit union challenging the government's unrelated business income tax (UBIT). In the opinion issued Friday, U.S. District Judge Christine M. Arguello ruled that:
* Bellco CU is not liable for UBIT on its income from its Direct Lending Program and its Indirect Lending Program for the tax year 2003 and the portion of tax year 2001 for which it has accurate income records; * It is not liable for UBIT on its royalties from Accidental Death and Dismemberment (AD&D) insurance; * Because Bellco lacks accurate income records, it is liable for UBIT tax on its Credit Insurance income for tax year 2000 and a portion of tax year 2001; and * It is liable for UBIT on its share of profits from the Credit Union Indirect Lending Association (CUILA) because the credit union did not meet the evidentiary burden required to prove that its share of income from CUILA "did not, intentionally or inadvertently, include other lines of CUILA's business," which were not tax-exempt.
Bellco had argued that income derived from sales of credit life and disability insurance, as well as royalties from AD&D insurance, should not be subject to UBIT because they are substantially related to the credit union's purpose of promoting thrift and making credit available at fair and reasonable prices. It has also argued that income from a third party vendor's sales of AD&D insurance to its members were "royalties" not subject to UBIT. The government argued that credit union insurance products are a poor value for members and do not promote thrift. Its case relied heavily on "low loss ratios" experienced by the insurance company that worked with Bellco. "In the banking and credit union context, the concept of thrift is tied to sound financial management...Credit insurance does just that...For a relatively marginal payment, the borrower buys peace of mind," Judge Arguello wrote in the summary judgment. "Giving members a convenient way to purchase insurance that protects them, their families, and their assets in the event of a catastrophic event certainly qualifies as a mechanism for careful management of the borrowers' money. "None of the government's arguments convince the court otherwise. The government's basic theory is that credit insurance is a 'bad deal' and thus cannot promote thrift," Arguello wrote, adding that the low loss ratio used "simply indicates that the insurance product was purchased by people who had not used it--yet." "In short, nothing about the low loss ratio, standing alone, convinces the court that credit insurance cannot be--and was not--substantially related to Bellco's thrift function." She also noted that "the evidence does not show that profit was the primary motivation in offering credit insurance." Also at issue was whether AD&D insurance provides royalty income, which is exempt from UBIT. To earn royalties, the credit union must play a passive role in marketing and administering the program. "Much of Bellco's time was spent on activities intended to protect Bellco's goodwill with its members and its member privacy rather than to actively promote the AD&D program or otherwise perform administrative services for that program," Arguello wrote. Bellco's work "was focused on protecting its intangible assets and was sufficiently insubstantial, so as to result in the income appropriately being considered royalties." She noted that the majority of hours logged were at Bellco's call center, answering basic calls from members asking about the AD&D program. In the judgment on indirect loans, the judge noted that the conclusions equally apply in the indirect loan context. The government argued that the program offered a "single premium" product that was more expensive than credit insurance and that auto dealerships are motivated by profit. "Neither of these facts is sufficient to convince the court that the Indirect Lending Program was not substantially related to Bellco's thrift function," she wrote. The other two findings centered on a lack of evidence presented as to calculations of the income from certain credit insurance products. In an earlier opinion issued in November 2009, Judge Arguello ruled that Bellco's income from sales of "financial services," such as securities and annuities, to its members via a third-party vendor was not subject to UBIT. Bellco filed the lawsuit last May with support of the UBIT Steering Committee, which includes the Credit Union National Association, CUNA Mutual, the American Association of Credit Union Leagues and the National Association of State Credit Union Supervisors (News Now Dec. 15).

Personal bankruptcies spike in March

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NEW YORK (4/5/10)--Federal courts reported more than 158,000 personal bankruptcies during March--more than any other month since the Bankruptcy Reform Act was tightened in October 2005. Key factors in the spike include a stagnant economy, high unemployment and the housing crisis, according to a report released Friday from Automated Access to Court Electronic Records, a data collection company (The New York Times April 1). The filings for March are 19% more than the filings in March 2009. March generally has more filings because people in financial distress use their tax refunds to pay for attorneys fees to file a bankruptcy, said analysts. The company said that a bankruptcy surge typically follows an economic contraction by six to 18 months. Chapter 7 filings, which are simpler and less expensive, are increasing faster than Chapter 13 filings, which involve reorganization of assets and repaying part of the debt in order to keep one's home. This suggests fewer people are trying to save their homes, said analysts. The U.S. Trustees Program statistics indicate that Chapter 7 filings as a percentage of all bankruptcies increased to about 73% last year, compared with 62% in 2006-2007. The U. S. Trustees Program is a Justice Department program that oversees bankruptcy cases. Seventy-five percent of the March filings were Chapter 7s. The high unemployment rate is contributing to the boost of Chapter 7s over Chapter 13 filings because unemployed people don't have income to pay into a Chapter 13 plan, said analysts. In other developments, commercial bankruptcies for 2009 totaled 117,659 up from 77,638 in 2008, reported Equifax Inc. "The numbers reflect a very strong and consistent increase from the all-time low of 32,293 filings in 2006," said Equifax in a press release. However, viewing the data on a quarterly or month-over-month basis indicates that while the total numbers remain very high, the rate of the increase is slowing. For example, fourth quarter 2009 filings totaling 28,352 were not that much ahead of fourth quarter 2008 filings totaling 25,140. And the 9,001 filings in December were up slightly from 8,732 filings in December 2008.

CU System briefs (04/02/2010)

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* SEATTLE (4/5/10)--Three teenagers and a 40-year old man have been charged with four counts of first-degree robbery related to a string of heists at banks and a credit union between Jan. 11 and Feb. 24. The incidents included a robbery of a branch of Alaska USA FCU in North Seattle on Feb. 24. Charged are Shennell Kennebrew, 16, who was dubbed the "F-bomb bandit" for presenting profanity laced notes demanding cash; Jade Beers, 17, allegedly the getaway driver; Kennebrew's boyfriend, Dasha Taylor, 17; and Keith Sims, 40, a convicted felon. Court papers said Sims and Taylor persuaded the girls to rob the banks while they stood on lookout (Seattle Times April 1) ... * LANSING, Mich. (4/5/10)--Lake Trust CU, formed by the merger of Plymouth-based Detroit Edison CU and Lansing-based NuUnion CU, marked its first day of operations Thursday with member receptions at each of its 22 branches. Promotions included special giveaways, refreshments, and the kick-off of a special auto loan promotion for April. Lake Trust CU is now Michigan's fourth-largest credit union, with $1.5 billion in assets ... * FORT WAYNE, Ind. (4/5/10)--Three Rivers FCU and other financial institutions in the Fort Wayne, Ind., area are receiving hundreds of calls from local residents saying they had received automated telephone calls about a frozen account or debit card (TimesBulletin.com March 31). The calls are a scam. Three Rivers FCU is the primary institution mentioned in the calls, the credit union told local media, but other banks reported customers receiving similar calls. The automated voice asks to verify the account and asks the recipient to press a phone key to give the information. When the key is pressed, the voice asks for the number of a Visa check card or ATM card and its personal identification number (PIN). The credit union advised consumers to hang up and not give out information, and to notify the financial institution. Those who give out their information are urged to cancel their card ...

No vote taken on Vermont credit card bill

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MONTPELIER, Vt. (4/5/10)--The Vermont Senate took no action Friday on Senate Bill 138, the state's credit card bill that is opposed by credit unions, banks and payment processors, according to the Association of Vermont Credit Unions (AVCU). "Nothing happened today," AVCU President/CEO Joe Bergeron told News Now Friday. He said that the expected vote did not occur because the Senate was bogged down on other measures. "This means that the next time the bill could come up [for a final reading and vote] would be Tuesday morning." If passed by the Senate, the bill would cross over to the House for consideration. The amended bill would:
* Allow merchants to set minimum and maximum amounts for acceptance of debit and credit cards. * Forbid electronic payments system network processors from imposing penalties or requirements on the way merchants advertise, thus allowing merchants to add a surcharge for customers using a credit or debit card. * Require a state regulatory study, due Dec. 15, 2011, to determine the economic impact on banks, credit unions and consumers of prohibiting electronic networks from inhibiting merchants as to whose cards they can not accept.
Although the bill removed a controversial provision that would have let merchants decline certain cards, including credit union-branded cards, "we still have grave concerns about the remaining provisions," Bergeron said in the association's Newslines Express newsletter Friday. AVCU and credit unions will get a critical opportunity to lobby their case with lawmakers on from 4 to 5:30 p.m. ET Thursday during credit unions' Legislator Appreciation Reception at the State House, he said. (News Now April 2). "We always schedule the legislators' appreciation reception for the latter half of the [legislative] session. It stands out during the hectic pace of rushing through bills and provides an opportunity for everyone to take a break," he said. AVCU expects about 180 legislators to stop by. Earlier credit union representatives will meet for briefings and private meetings with key legislators.

Man who held CU employee hostage convicted

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CENTRALIA, Wash. (4/5/10)--A man wounded while holding a credit union teller hostage in January was convicted Wednesday by a Lewis County (Wash.) Superior Court jury of attempted robbery, kidnapping and burglary. Michael Anthony Lar, 57, faces a life term as a three-strikes offender, said the Associated Press (The Seattle Times April 1). Lar broke into the Twin Star CU in Centralia, Wash., before the credit union opened on Jan. 25 and took an employee hostage at gunpoint when she arrived for work. Another employee, who had been talking on the phone with the employee when she was taken hostage, called the police (News Now Feb. 2). A police officer responded and went to the door, where the teller mouthed to him that the robber had a gun. The officer pulled her out of the door and fired two shots at Lar, wounding him. Lar escaped out a window and hid in bushes. He was captured later the same day. Sentencing is scheduled for this week in Chehalis, Wash.

Alaska USA CEO resigns from CUNA Mutual Board

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MADISON, Wis. (4/5/10)--William B. Eckhardt, a member of the CUNA Mutual Board of Directors since 2005, has resigned from his board position. His resignation was effective March 31. He decided to resign as a result of anticipated competing business obligations at Alaska USA FCU, Anchorage, where he is president/CEO, said CUNA Mutual Group. Eckhardt has been president/CEO since 1979. Alaska USA FCU has $4 billion in assets.

Rhode Island CUs help members post-flooding

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WARWICK, R.I. (4/5/10)--Credit unions in Rhode Island are providing their members with flood damage assistance after heavy rainstorms on the East Coast caused flooding in the state and nearby areas. About 5,500 were without power in Rhode Island Thursday--with about half in Westerly, where waters submerged a substation. On Thursday, work crews in Rhode Island pumped roads clear of water, inspected bridges and began restoring power to affected neighborhoods, USA Today reported Friday. The National Credit Union Administration activated its disaster relief policy to help credit unions and their members affected by the flooding. (SEE RELATED STORY: “NCUA invokes disaster response for flood states.”) President Barack Obama declared an emergency in Delaware, New Hampshire, Massachusetts, Rhode Island and West Virginia. “While the flooding has caused a great deal of damage to many homes and businesses in Rhode Island as well as causing major traffic disruptions, no credit unions have reported any damage or closings to the league,” said Rob Kimmett, senior vice president of marketing for the New Hampshire, Massachusetts and Rhode Island Credit Union Association. Rhode Island CU, which has a branch in Cranston--the hardest hit area--did not experience any damages from floods. “We were one of the lucky ones,” said Gina DePalo, vice president of branch administration and marketing. “We managed to dodge it.” Flooding began Tuesday evening into Wednesday. Traffic problems occurred on the interstate as a result, and some employees were unable to get to work Wednesday because of traffic, she told News Now. DePalo said members are still likely assessing the damages they sustained from flooding, and that there will likely be a great deal of hardship. The credit union will address the needs of members as they arise, she added. People’s CU posted on its website that the Kingstown, R.I. branch would be closed throughout the weekend with plans to reopen today. Websites of Westerly (R.I.) Community CU and Wave FCU, Warwick, posted information for members affected by the flooding and about damage-assistance resources. Flooding also affected southeastern Massachusetts, Kimmett noted. The Day reported Thursday that water had seeped into the basement of Connecticut Community CU, Pawcatuck, Conn.

Two Connecticut CUs merge

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NORTH HAVEN and NEW HAVEN, Conn. (4/5/10)--Two Connecticut credit unions have been granted approval to merge, according to the Connecticut Department of Banking. Connex CU, a $386 million asset credit union based in North Haven, and St. Boniface Parish FCU, based in New Haven, received approval on March 3, according to a bulleting on the state regulator's website. The surviving credit union will be called Connex CU. Connex CU President/CEO John Edwards, in a statement to local media, said the merger will help grow Connex's membership base and will offer St. Boniface Parish members more products and services (The New Haven Register April 2). St. Boniface Parish CU has more than 100 members and was operated from the home of its CEO, Susan Smith. Smith told the publication the parish had closed. The credit union sought a partner and Connex had a local presence in New Haven, she added. Connex CU is the state's fifth-largest credit union, with about 40,000 members and seven branches.

Free up CUs boost economy Florida op-ed on MBLs

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TALLAHASSEE, Fla. (4/5/10)--Congress can free up credit unions and boost the economy by lifting the cap on member business loans (MBL), an op-ed from the CEO of Florida Commerce CU in the Tallahassee Democrat suggested Friday. In the article, Cecilia Homison, CEO of the Tallahassee-based credit union, noted government programs for banks that have the word "bailout" attached. "However, there is another way to infuse capital into the marketplace, and it wouldn't cost taxpayers a penny," Homison wrote. "Credit unions are asking Congress to lift the statutory limit on small-business lending from the current 12.25% of an assets cap to 25%," she wrote. If the cap were increased, credit unions could infuse an additional $10 billion to assist struggling small businesses in the first year alone, Homison wrote. "Plus, this would not impact credit unions' ability to make much-needed consumer loans," she said, citing estimates from the Credit Union National Association that the additional capital could create 108,000 jobs by helping small businesses grow. Credit unions' share of the market would double, to 10% nationally but banks would still control 90% of the commercial loan market, Homison explained. "It's OK to use an active word with our financial situation. I think the word 'grow' would be perfect. With credit unions' help, small businesses will continue to 'grow' and the economy will begin to 'grow' out of this downturn. All it will take is active thinking from Congress to raise the credit union member business lending cap," she concluded. For the full article, use the link.

Texas foundation honors CUs fin lit commitment

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FARMERS BRANCH, Texas (4/5/10)--The Texas Credit Union Foundation will present its annual FOCUS awards during its annual meeting and expo Wednesday, according to the Texas Credit Union League. The awards honor individuals and organizations who have demonstrated their commitment to providing financial literacy (LoneStar Leaguer April 2). They include:
* Lee Stafford, financial educator/marketing specialist, Education CU, Amarillo; * Mandy Clayton, financial education specialist, FivePoint CU, Nederland; * Randolph-Brooks FCU, Universal City; * The Austin Chapter of Credit Unions; and * El Paso CU Affordable Housing LLC CUSO.
This year’s winners diversified their creativity and delivery:
* Stafford launched Education CU’s financial literacy program in January 2009 and presented the merits of financial education to 4,663 individuals; * Mandy Clayton, through a partnership with Junior Achievement of the Golden Triangle and the National Endowment for Financial Education High School Financial Planning Program (HSFPP), increased her credit union’s financial education recipients total from 600 individuals in 2008 to more than 3,000 in 2009; * Randolph-Brooks FCU’s Jr. Duel in Ol’ San Antonio engaged 10 area high schools in a competitive program revolving around money-managing principles found in the NEFE HSFPP curriculum; * The Austin Chapter of Credit Unions’ second annual Youth Financial Literacy Fair welcomed more than 200 individuals to booths operated by staffers from various Austin credit unions, foundation volunteers and the Office of the Comptroller; and * The El Paso CU Affordable Housing CUSO taught financial and homeowner classes, free to local communities. In 2009, it presented 73 classes in English and Spanish for 1,125 participants.

Detroits cash-strapped schools turn to ads for funds

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DETROIT (4/2/10)--Cash-strapped school districts in Detroit are presenting a marketing opportunity for credit unions by allowing advertisements on gym walls, athletic fields and school websites to help earn funds for the school districts. The key categories for ad sales include credit unions, banks, car dealers, quick-service foods, and fine dining restaurants, said Alternative Revenue Development, a Bloomfield Hills-based company that is selling the idea to schools. The first campaign will roll out at Trenton High School April 14, with three other Downriver districts participating. In August about 30 more school districts will begin displaying ads. Trenton-based Metro Shores CU said its ad campaign is half philanthropic, considering the state's funding crisis, but the ad campaign is expected to bring in business. The credit union has a sign on the school campus and website, and can set up a booth at sporting events to distribute brochures and talk to potential members The revenue generator comes amid a state funding crisis that is forcing school districts to get creative in making more revenue.

Neighbors FCUs program puts people in cars

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BATON ROUGE, La. (4/2/10)--Neighbors FCU, Baton Rouge, La., is working with an Enterprise Rent-A-Car dealer and Catholic Charities in a special loan program to help people get transportation to and from work. Enterprise sells cars that it is replacing in its rental fleet, all about one or two years old and worth about $10,000. Catholic Charities puts up $2,500 for a down payment, the first three monthly payments and to help with car insurance. The credit union provides low-interest loans to people who otherwise wouldn't qualify for them (The Advocate March 19). The Moving Toward Self-Sufficiency Program started after Hurricane Katrina drove thousands of people from New Orleans to Baton Rouge. Many had relied on New Orleans' public transportation to commute to work. Baton Rouge's bus system didn't meet their needs. Transportation prevented people from getting to work. Catholic Charities tried to solve the problem by buying inexpensive cars for clients needing transportation, but the vehicles broke down often and the organization couldn't fix them. Enterprise regional marketing manager Kevin Guice began working with the credit union and Catholic Charities on a solution, which turned out to be the loan program. Of the 60 participants so far, only one has defaulted, Steve Webb, chief operations officer at Neighbors FCU, told The Advocate. Everyone pays because they understand they're being given an opportunity and they need to uphold their end of the process, Webb said. Neighbors FCU provides basic financial training of the program's participants, all Catholic Charities clients. Participants are encouraged to open a checking account, use direct deposit and become educated about high-cost financing they should avoid, Webb told the publication. Seed money from the Baton Rouge Area Foundation helped start the program, and grants from the National Credit Union Foundation and Enterprise Foundation got it operating. The Catholic Charities is holding a raffle to keep the program going.

CUs showcase efforts in Financial Literacy Month

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WASHINGTON (4/2/10)--April is Financial Literacy Month, an opportunity for credit unions to showcase their financial literacy education efforts for an entire month. Many are focusing on promoting savings through the Credit Union National Association's (CUNA's) National Youth Saving Challenge. And National Credit Union Youth Week April 18-24 will bring opportunities to show what credit unions can do. National Financial Literacy Month is part of a national awareness campaign with the goal of increasing public knowledge about the need for and the value of personal financial education and how to obtain it. "CUNA is proud to carry on the legacy of its member credit unions through its support of Financial Literacy Month," said CUNA President/CEO Dan Mica. "In fact, since 2004, CUNA, the leagues and our member credit unions went a step further by launching the National Credit Union Youth Week, which puts into action for our young people the teachings of financial literacy--in particular, by learning how to become savers. "Last year, nearly 140,000 youth participated in our program, saving more than $26 million--double what they saved the previous year and a record. We look forward to another record-setting year--and helping our members, and future members, become ever more financially literate," Mica said. This year's saving challenge theme is "Get in the Savings Game at the Credit Union," and the sports theme is popular with credit unions. But credit unions are serious about their efforts.s Redwood CU, based in Santa Rosa, Calif., said its planned festivities include free educational seminars for children, teens and parents, plus contests, informative handouts, giveaways and more. The seminars include "Today's Money Smart Family," for parents, kids and teens; "Winning the Savings Game," with basic financial concepts and benefits of saving designed for elementary students and their parents; "Be a Player in the Savings Game" for younger teens; and "Smart Spending in the Real World," a hands on guide to help teens prepare for college and the work force. Credit unions are getting creative, too. At Portland (Mich.) FCU, one of the activities scheduled is "an M&M budget lesson" for middle school students. Several credit unions in St. Louis, Mo., are donating $5 to Children's Miracle Network for every new youth account opened or $50 deposit made into an existing youth account, according to Electro Savings CU. Industrial FCU, Lafayette, Inc., will use an adapted version of Aesop's fable, "The Ant and the Grasshopper" to teach the concept of opportunity cost--saving now and spending later--and ask kids to write their own ending. "National Credit Union Youth Week provides us a great opportunity to educate young people about financial matters in a fun and exciting way," said Lee Alderman, assistant vice president of educational development at Redwood CU. "Engaging them with fun opportunities like Credit Union Youth Week is the first step in helping them develop responsible money habits at an early age, which will benefit them for a lifetime."

IUSA TODAYI Student branches dispense financial sense

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NEW YORK (4/2/10)--Students across the nation are getting hands-on financial experience through credit unions and banks operating in schools, says a prominent story in Thursday's USA TODAY. While the Federal Deposit Insurance Corp., told USA TODAY that banks have several dozen in-school branches, "the number of credit unions partnering with schools is even greater (than banks); there are at least 324 credit union in-school branches" tracked by the National Credit Union Administration," the national publication said. Working with schools is an opportunity to promote financial literacy, an area of weakness in school systems, Janine Williams, vice president of marketing at the University of Virginia Community CU, Charlottesville, Va., told the newspaper. "It fits our vision of improving the financial lives of our members and our community," she said. The article also noted that since an in-school branch of Appleton, Wis.-based Community First CU, opened in December at Jefferson Elementary School, 125 savings accounts have been opened. The student credit union is run by fifth and sixth graders. Use the link for the full article.

CU savings growth for February strong at 1.9

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MADISON, Wis. (4/2/10)--Savings growth at credit unions was strong in February--at about 1.9%, according to the Credit Union National Association’s (CUNA) Monthly Credit Union Estimates for February. February typically experiences growth of 0.9% when adjusted for seasonal variation. The additional 1% signals underlying trend growth, said Steve Rick, CUNA senior economist. If the growth continues--at an additional 1% each month for the remainder of the year for a total of 12%--credit unions will experience strong savings, he said.
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One continued development taking place is that consumers are paying down their debts. For the first two months of the year, all mortgage categories were negative, meaning that the mortgage loan balance is falling. “People are paying their mortgages off faster than they are taking on new ones,” Rick said. Credit union loans outstanding decreased 0.6% during February, down from a 0.5% increase during January. Home equity loans and used-auto loans decreased 0.1% and 0.3%, respectively. Fixed-rate mortgages decreased 0.4%, followed by unsecured personal loans and credit card loans, each of which decreased 2.0%. Adjustable-rate mortgages led loan growth, increasing 0.1%. Overall loan growth was weak at 1.1%, due to uncertainty in the labor market. “People don’t want to borrow,” Rick said. The delinquency rate at credit unions is rising at a slower pace and is headed for a peak. “If we hit a turning point, the rate will go down,” Rick said. The rate has been rising for the last few years because of the recession. “If jobs come back, we could see delinquencies start to fall,” he added. Rick also noted the continued drop in share certificates. One-year certificates dropped by 0.3% in February and by 1.1% in January. As the certificates mature, people are deciding not to get another certificate and placing their money into a money market account. People are waiting for the rates to rise, Rick said. During February, share drafts increased 5.7%, followed by regular shares and money market accounts, which increased 3.9% and 1.4%, respectively. Individual retirement accounts increased 0.1%. Another area of interest is the loan-to-savings ratio, which has dropped significantly since last year, Rick said. The loan-to-savings ratio decreased to 74.4% in February 2010 from 79.6% one year ago. The liquidity ratio, the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities, remained at 19%.
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Credit unions have deposits to make more loans, but consumers are not seeking loans because of uncertainty in the job market. Credit unions are instead investing the money into short-term investments like Treasury bonds. Placing the money into short-term investments will keep downward pressure on credit unions’ earnings. “Credit unions would rather put that money into a mortgage,” Rick said. When the labor market picks up, the loan market will pick up, he added. He also noted that the Fed will not change interest rates until the fall. “The low-rate environment will continue,” he said. The movement’s overall capital-to-asset ratio remained at 10% in January 2009. The total dollar amount of capital is $90 billion.

Vote expected today on Vermont credit card bill

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MONTPELIER, Vt. (4/2/10)--A final reading and vote on an amended credit card bill that would give Vermont merchants the power to refuse some credit cards is expected in the Vermont Senate today, according to the Association of Vermont Credit Unions (AVCU). SB 138, which if passed would be the first state law in the nation on the issue, is opposed by credit unions, banks and electronic payments processors and favored by the merchants and their associations. The bill began as a consumer protection bill that largely duplicated the federal Credit Card Accountability, Responsibility and Disclosures (CARD) Act, but it has ended up a merchant protection bill, said Joe Bergeron, AVCU president/CEO. Credit unions and others activated their grassroots efforts and over last weekend met with legislators to lobby against the bill on the basis that it duplicated the federal act and the state should let the federal act play out before attempting to address the issue. On Tuesday the bill had only half of the Senate's support at the first reading. However, the 11th hour amendments offered Wednesday by the merchants' groups in a so-called "compromise" bill, received the full support of the Senate. The legislation is ill-conceived, said Bergeron. "We understand the merchants' dilemma and we're willing to work with them, but we can't go along with legislation that favors one side--the merchants--and hurts all the others, including credit unions, banks and processors and consumers," he told News Now. The measure needs a thorough examination by those knowledgeable about the payments process, he said. The latest amended version of the bill, which passed a second reading, 30-0 on Wednesday, would:
* Allow merchants to set minimum and maximum amounts for acceptance of debit and credit cards. * Forbid electronic payments system network processors from imposing penalties or requirements on the way merchants advertise, thus allowing merchants to add a surcharge for customers using a credit or debit card. Bergeron noted that merchants already can allow a discount for using cash. * Require a state regulatory study, due Dec. 15, 2011, to determine the economic impact on banks, credit unions and consumers of prohibiting electronic networks from inhibiting merchants as to whose cards they can not accept.
The bill would result in "Vermont becoming an island in the electronic funds transfer (EFT) world," Bergeron said. "It will have a negative effect on cardholders from credit unions and banks...who will find surcharges when they go skiing in Vermont, or find they can't use their card because they're not spending enough or spending too much," he said. The bill would be detrimental to credit unions, he said. "I'm a credit union and I give my member a card. And the member finds it's not working at certain locations. I have to decide whether to continue to issue plastic." He noted it was also bad for Vermont's economy. "It's a very complicated issue and not an easy fix." If passed today, the bill then goes to the House. AVCU is already addressing the issues with some House members but much will depend on which committee gets the bill. Vermont is already two-three weeks past the date in which bills can cross over from one legislative chamber to the other. There likely would not be much work on the bill until after the holiday "so there's not a lot of time," Bergeron told News Now. AVCU and credit unions will get a critical opportunity to lobby their case with lawmakers on Thursday afternoon during credit unions' Legislator Appreciation Reception, he said.

Top 10 INews NowI stories for March (04/01/2010)

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MADISON, Wis. (4/2/10)--An article about the 10 places consumers should not use their debit cards leads March’s top 10 list of News Now stories. Top stories include: 10. NCUA says ‘cease’ building plan to CU in S.D. ALEXANDRIA, Va. (3/4/10)--The National Credit Union Administration on Wednesday issued a cease and desist order against South Dakota-based Rapid City Telco FCU. 9. CUNA comment on corporates suggests new model WASHINGTON (3/10/10)--Credit Union National Association President/CEO Dan Mica in a comment letter to the National Credit Union Administration said that CUNA supports corporate credit unions but not the business model that many, but not all, used. 8. CUNA applauds NCUA on ‘legacy asset’ timetable ALEXANDRIA, Va. (3/24/10)--Credit Union National Association President/CEO Dan Mica yesterday commended the National Credit Union Administration’s projected timetable for solving the corporate credit union “legacy asset” issue. 7. Matz responds to CUNA urging to help CUs bear NCUSIF costs WASHINGTON (3/22/10)--Responding to the Credit Union National Association’s urging to help credit unions deal with unprecedented National Credit Union Share Insurance Fund costs, Debbie Matz wrote that the National Credit Union Administration will look at the operating level target in the fall. 6. Compliance Challenge: Can CUs give overdraft incentives? WASHINGTON (3/9/10)--In this month’s Compliance Challenge, the Credit Union National Association addresses a question regarding overdraft protection policies. 5. 42 charged in Fla. fraud ring, targeted CUs ORLANDO, Fla. (3/26/10)--Florida law enforcement authorities are looking for the ringleader of a fraud and identity theft ring involving 42 people who stole more than $200,000 from five Orlando area credit unions over three years. 4. Compliance: Answers to overdraft questions WASHINGTON (3/17/10)--The Credit Union National Association has added five questions to its “frequently asked questions” on Regulation E’s new overdraft rules requiring members to consent before being assessed fees on overdraft services for ATM and one-time debit card transactions. 3. CUNA Compliance: CUs need to review check-hold disclosures WASHINGTON (3/2/10)--As of Feb. 27, the Federal Reserve Board consolidated all its check-processing operations into Cleveland, Ohio. This action eliminates all “nonlocal checks” under Regulation CC, which implements the Expedited Funds Availability Act. 2. Three banned from CU work ALEXANDRIA, Va. (3/22/10)--The National Credit Union Administration issued orders prohibiting the following individuals from participating in the affairs of any federally insured financial institution. 1. CreditCards.com lists 10 places not to use a debit card MADISON, Wis. (3/18/10)--There are 10 situations where consumers should keep their debit card in their wallet, according to CreditCards.com. Susan Tiffany, the Credit Union National Association’s director of consumer periodicals, provides some of the advice.

PCUAs iBelong campaign aims to fuel growth

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HARRISBURG, Pa. (4/2/10)--The Pennsylvania Credit Union Association’s (PCUA) iBelong campaign began a new series of television and radio ads this week. The spots will run throughout the year.
The Pennsylvania Credit Union Association's iBelong campaign began a new series of television and radio ads this week that will feature credit union members in their homes and at work. (Photo provided by the Pennsylvania Credit Union Association)
The campaign portrays credit unions as local, stable and willing to lend to consumers and small businesses, said PCUA (Life is a Highway April 1). The new radio and television spots feature credit union members in their homes and at work. “Our original ads stressed eligibility [for membership],” said Mike Kaczenski, chair of the Advocacy Marketing/Steering Committee, which is comprised of 18 credit union marketers and developed the campaign’s new creative. “But given the recent economic events, we decided to go more aggressive and encourage people to move their funds from a large bank to a credit union. We hope the campaign helps fuel the growing ‘Move Your Money’ sentiment sweeping the country.” The campaign website, iBelong.org, also was redesigned. Credit unions can access media schedules and other campaign information through the iBelong page on PCUA’s website, and obtain campaign graphics, logos and marketing assistance from cuink.com. The annual member growth rate among Pennsylvania credit unions was 2.4% at the end of 2009, above the national average of 1.4%, noted Jim McCormack, PCUA president/CEO. “Certainly iBelong played a large role in this increase,” he said. For more information, use the link.

CU System briefs (04/01/2010)

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* ALBANY, N.Y. (4/2/10)--The New York Credit Union Foundation (NYFCUF) announced that students from Irondequoit High School, Rochester, N.Y., have won the 2010 New York State LifeSmarts title after defeating 54 other teams in the online competition. The competition was coordinated in New York by the foundation. LifeSmarts ... the Ultimate Consumer Challenge is a financial education competition for students in grades 9-12. Here, Michael Vadala, left, foundation board member and CEO of The Summit FCU, presents the team with a $500 check to cover any expenses incurred when it vies for the National LifeSmarts title in Florida. With Vadala are, from left, Muhammad Zahid, Samantha Jebbett, Daniel Lenzi, Connor Enright, Alicia Kolacki and team coach, Louis DiCesare. (Photo provided by the Credit Union Association of New York) ... * HARRISBURG, Pa. 4/2/10)--Lancaster-area credit union representatives met with U.S. Rep. Joe Pitts (R-16) at Lancaster Red Rose CU, according to the Pennsylvania Credit Union Association (PCUA)(Life is a Highway March 31). Pitts is a co-sponsor of H.R. 3380, the Promoting Lending to America's Small Business Act of 2009, which would raise credit unions' member business lending cap. Participants shared stories about what they are doing for their members and small business during the tough economy. Discussions also covered the recently passed health care bill, student lending and spending. From left: Vernon Grant, controller, Wheatland FCU; Lonny Mauer, State Credit Union Advisory Committee member and CEO, Belco Community CU; Kathy Rye, CEO, Wheatland FCU; Barry Ashenfelder, president/CEO, Lanco FCU; Rep. Pitts; Kent Hartzler, CEO, Mennonite Financial FCU; Abby Achey, PCUA Governmental Affairs Committee member and CEO, Lancaster Red Rose CU; Diana Roberts, PCUA Board member and CEO, Hershey FCU; and Carol Humenick, PACUA Governmental Affairs Committee and senior vice president, Citadel FCU. (Photo provided by the Pennsylvania Credit Union Association) ... * BROOKLYN, N.Y. (4/2/10)--Brooklyn (N.Y.) Cooperative FCU President/CEO Samira Rajan, was named one of Crain's New York Business magazine's "40 Under 40." The annual list recognizes 40 New Yorkers who excel in their fields before turning age 40. Rajan started at Brooklyn Cooperative--a community development credit union serving Brooklyn's Bushwick and Bedford-Stuyvesant neighborhoods--in 2001 as an intern after receiving her master's degree in public policy from Harvard University. She became loan officer, then chief operating officer, and in 2008, CEO. Rajan is also director of Grow Brooklyn, the credit union's non-profit affiliate that allows the credit union to provide high impact services such as foreclosure prevention services and free tax preparation to low-income members. The credit union has $9.4 million assets ...

CUANY commission to address young adult needs

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ALBANY, N.Y. (4/2/10)--The Credit Union Association of New York (CUANY) has created a Young Professionals Commission to explore the need for New York credit unions to reach young adults for membership growth, and for recruitment and retention of young employees and volunteers.
Click to view larger image Brent Dixon (standing) leads members of the Credit Union Association of New York's new Young Professionals Commission through an exercise as a prelude to the group's brainstorming session. (Photo provided by the Credit Union Association of New York)
"Following the association's 2009 Young Adult Initiative through REAL Solutions, we realized that if we are to lead the way in helping New York credit unions stay relevant, we needed to tap into the best possible resource--young adult credit union employees and volunteers," said William J. Mellin, president/CEO of the association. Mellin requested nominees for the 30-member commission from the state's credit unions. Allison Doney, CUANY's community development coordinator, was appointed staff liaison. The commission is charged with developing strategies and practices to assist CUANY and its credit unions with recruiting and developing young adults into leadership positions within New York's credit union community. The commission's first meeting discussed the association, outreach and how the group was formed. The day ended with a brainstorming session that resulted in great ideas, said the association. Ideas ranged from an industry-wide brainstorming network to a formal mentorship program, to a national day of outreach and action from credit union people. "I wish more leagues and associations had groups like this," said Brent Dixon, young adult advisor at The Filene Research Institute, who facilitated the commission meeting. "In the end, if you want to learn about a group of people, you talk to them. You build a relationship. That's what New York has done." The group's next meeting will be a conference call to begin identifying action steps, followed by an in-person meeting during the association's Annual Convention in Cooperstown June 6-8. The commission was developed with assistance from a REAL Solutions grant from the National Credit Union Foundation.