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Oral arguments heard in Hudson Valley FCU appeal

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POUGHKEEPSIE, N.Y. (5/13/11)--The Appellate Division of the Supreme Court of New York Thursday heard oral arguments regarding Hudson Valley FCU’s appeal of a lower court ruling that denied the Poughkeepsie, N.Y. credit union’s challenge to the state’s mortgage recording tax (MRT). The credit union had filed the suit on May 12, 2009 against the New York State Department of Taxation and Finance, Commissioner Robert L. Megna and the State of New York. It sought a declaratory judgment that the state may not impose the MRT on mortgages granted to secure loans made by the credit union because it is a federal credit union with a federal tax exemption. The credit union also sought reimbursement of tax it had already paid. Last year, New York Supreme Court Justice Judith Gische dismissed Hudson Valley’s case, declaring that it was not “actionable.” During yesterday’s court session, one judge queried the credit union as to why the nature of the tax, as defined by New York State, shouldn’t control the issue. The judge describe the MRT as a tax on the privilege of filing the mortgage under state law, and asked how then could it be considered a tax on the credit union. Unlike most states, which only charge administrative fees for mortgage recordation, New York charges a tax that can be more than 2% of the mortgage's face value in places like New York City. Hudson Valley FCU argued Thuraday that the tax is not considered a "priviledge tax" under federal law and that the credit union federal tax exemption and applicable U.S. Supreme Court holdings should control. Recording a mortgage is required in New York for lenders to be able to foreclose on a mortgaged property or have other rights related to the mortgaged real estate. CUNA and the Credit Union Association of New York filed an amicus brief with th court arguing in favor of the credit union, as did the U.S. Department of Justice in order to support the credit union's argument that the tax-exemption and other federal laws mean that mortgages it made should not be subject to the tax. A decision in the appeal is not expected for until later thi year.

CU System Briefs (05/12/2011)

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* WASHINGTON (5/13/11)--In a lawsuit alleging redlining discrimination in Detroit, the U.S. Department of Justice (DOJ) has reached a settlement with Citizens Republic Bancorp Inc. and Citizens Bank of Flint, Michigan (online.wsj.com May 10). The lawsuit specifically alleged that Citizens violated the Fair Housing Act and Equal Credit Opportunity Act by serving the credit needs of residents of mostly white neighborhoods to a substantially greater extent than it served the credit needs of majority African-American neighborhoods. Thomas Perez, Assistant Attorney General in charge of DOJ's Civil Rights Division, called the settlement “innovative” and noted it may serve as a model in other areas, per the Detroit News. DOJ is involved in 60 cases nationwide involving comparable accusations of discriminatory lending practices, Perez further stated ... * WASHINGTON (5/13/11)--National Credit Union Administration (NCUA) Board Member Michael E. Fryzel along with over 200 other dignitaries and new credit union members attended the grand opening of the Polish & Slavic FCU’s newest branch in Bridgeview, Ill., May 5, NCUA said. The credit union has served the New York and New Jersey area for more than 35 years. Fryzel also marched with the credit union in the annual Polish Constitution Day Parade on Saturday, May 7. Fryzel is the first Polish American to serve on the NCUA Board as a member and (previously) as its chairman … * IOWA CITY, Iowa (5/13/11)--The University of Iowa Community CU (UICCU) has been recognized as one of the top credit unions in the country in terms of its return rates to members (Iowa City Press-Citizen May 6). UICCU was ranked third of 7,491 credit unions nationwide reviewed in 2010 for their Return of the Member measurement (ROM) by Callahan & Associates, an independent research firm. The ROM index attempts to measure the value credit unions provide to their members based on three core components: return to savers, return to borrowers and member service usage …

Ohio CUs gain members for eighth consecutive quarter

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COLUMBUS, Ohio (5/13/11)--For the eighth consecutive quarter, Ohio credit unions collectively netted positive member growth, most recently posting a gain of 32,500 new members, according to the Ohio Credit Union League’s (OCUL) year-end Quarterly Performance Summary. The trend comes after a long period of flat membership growth leading up to the recession, suggesting consumers continue the recent tendency to move their money to community-based financial institutions, OCUL said. Similarly, assets and capital at Ohio credit unions also posted gains, while lending slightly slowed statewide, but remained higher than the credit union national average. “Demand for local, community-based, affordable financial services continues to rise,” noted Paul Mercer, OCUL president. “Membership growth, paired with an increase in deposits and assets, tells us that credit unions are becoming an answer for more Ohioans, their families, and small businesses, than ever. And the passion behind our movement to continue to meet the needs of credit union members is stronger than ever before.” Ohio membership increased 1.23% during the most recent 12-month statistical period (Dec. 2009 – Dec. 2010), outpacing the national credit union membership growth rate of .66%. Ohio is home to 387 credit unions totaling 2.68 million members. OCUL analysts point to two reasons for the continued growth of credit unions: consumers moving from large regional banks to community-based financial institutions, and the typically higher rate of return on savings at credit unions. Previous growth was part of a “flight-to-safety;” however, economic recovery has slowed many consumers from liquidating investments. Growth figures for assets and shares in December have slowed from what was reported in the previous quarter, but both remain positive. Assets at Ohio credit unions posted 3.84% growth from Dec. 2009 to Dec. 2010. Shares grew 4.68% during the same time period, with money market balances growing at the fastest rate, up 15.5% over the 12-month period. Ohio credit unions continue strong capital growth, gaining 4.41% during the year. Annual loan growth figures remain stagnant, but improved slightly from September’s figure of -0.36% to December’s of -0.24%. Despite renewed growth in the vehicle sales market, credit unions in Ohio saw their auto-loan balances decline 50 basis points over the last 12 months. However, first mortgage originations picked up in the second half of the year, with Ohio credit unions recording $5 billion in first mortgage originations. The average member relationship, or the outstanding combined loan and share balances per member, increased from $11,306 in December 2009 to $11,464 in December 2010. Although it represents only 3.1% of the Ohio credit union loan portfolio, member business lending is becoming an increasingly important part of a credit union’s suite of products. As of December 2010, 99 of Ohio’s 387 credit unions reported outstanding business loan balances, representing a total of $389.6 million in outstanding balances. In 2010, 15.5% of credit unions in the state reported originating a business loan, up from 15.5% reported 12 months ago. Overall, business loan balances grew 5.8% during the 12-month period. Ohio credit union economic indicators remain positive overall, with capital levels at 11.6% on average, which is higher than Ohio banks and thrifts, and credit unions and banks nationally. Asset quality in Ohio remains strong, as the delinquency rate of 1.33% remains below the national average.

Minnesota CUs monthly column provides fin ed to consumers

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INNER GROVE HEIGHTS, Minn. (5/13/11)--Heartland CU, Inver Grove Heights, Minn., has a monthly opinion column on Patch.com to provide financial education to consumers within the community--a community eligible for credit union membership and the location of Heartland’s main branch. Patch.com is a community-specific online news and information platform dedicated to providing comprehensive and trusted local coverage for individual towns and communities. After meeting the Inver Grove Heights Patch editor at a community event, Alyssa Karl, Heartland director of marketing, proposed the “On the Money” educational column to the online news source and the first article published on Jan. 27. Heartland contributes an article every second and fourth Thursday of the month. Column topics have included:
* “What is a Credit Union?” * “The Language of Finance: Understanding Commonly Used Financial Words”; * “Improving Your Credit Score”; * “Is Zero Percent Financing the Best Choice?”; and * “Tips for Talking to Preschoolers About Money.”
“We’re always looking for ways to help educate members, as well as those in the communities we serve,” Karl said. “This column allows us to reach out and provide free financial education to a broad audience and we’re looking forward to growing the column as the site’s readership grows.”

NCB Honors CUNAs Hampel with 2011 Spirit of Cooperation Award

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WASHINGTON (5/12/11)--NCB, a financial services company serving cooperatives, has named Bill Hampel, senior vice president and chief economist for the Credit Union National Association (CUNA), as this year’s recipient of the Stan Dreyer Spirit of Cooperation Award. The honor was presented at the bank’s annual meeting held May 5 in Washington, D.C. The bank awards The Stan Dreyer Spirit of Cooperation Award annually, selecting a recipient--an individual or organization--who lives the spirit of the cooperative principles. Dryer, the award's namesake and who is now retired from NCB, was one of the people instrumental in passage of the 1978 Congressional Bank Act, which created NCB. Charles Snyder, president/CEO of NCB, said about Hampel's award: “Bill has been instrumental in forging a great partnership between the bank and credit unions nationwide. His contributions to the bank and the cooperative community for decades are countless, and we are extremely pleased to honor him and his accomplishments.” Hampel’s dedication to working with credit unions and cooperatives made him a natural recipient for the award, NCB said in a release. As an NCB board director for more than seven years, he has taken his credit union knowledge and successfully applied it to other cooperative sectors. Hampel has helped NCB work with credit unions nationwide with deposits, cash management, lending and loan sales, NCB noted. Hampel also is a senior member of CUNA’s credit union advocacy team in Washington D.C. He writes economic analysis columns that appear in several credit union publications, and is an expert on the economy and credit union issues. He is regularly interviewed by the media for stories appearing on major national television, radio and print outlets.

Savings Challenge deadline is May 17

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MADISON, Wis. (5/13/11)--Credit unions are reminded to post their
Click for slide show Nicholas Winchell showed off his guitar skills during Youth Week at ISU CU, Terra Haute, Ind. (Photo provided by ISU CU)
National Youth Savings Challenge results by noon CT, Tuesday, May 17 to be eligible for 10 prize drawings of $100 each, randomly awarded by the Credit Union National Association (CUNA). The National Youth Saving Challenge takes place every year during April. It is held in conjunction with National Credit Union Youth Week, sponspored by CUNA. Credit unions nationwide create inspiration for saving and had fun with their young members during the National Youth Saving Challenge. Among ways credit unions celebrated and taught their young member to save:
* Dynamic FCU, Celina, Ohio, hosted Kirby the Kangaroo. Kids joined Kirby and his Rockin’ Crew on Saturday, April 16 for fun, games and prizes. Kids that made a deposit of $5 or more were given a special gift from Kirby. * Ticonderoga (N.Y.) FCU, offered young members who opened a Savings Safari account Moonjar Moneybox. Moonjars help children learn to manage their money with individual compartments for saving, spending and sharing. The credit union also celebrated National Financial Literacy Month by encouraging youth members to visit the credit union to enter a raffle for a $50 savings bond and the $100 national prize. One randomly selected winner was drawn at each of the credit union’s three branches. * ISU CU, Terra Haute, Ind., invited members under the age of 10 to participate in a coloring contest, with the winner receiving a $15 gift certificate to Toys ‘R Us. Members under the age of 17 were invited to participate in a deposit challenge and a “Guess the Jar” contest. Youth members were also able to play Band Hero and have their picture taken with a rock star background. * Mazuma CU, Kansas City, Mo., gave away fun prizes to youth members and encouraged them to become a Savings Rock Stars by depositing $10 or more into their account during the week. All youth members who deposited $10 or more into their account were put into a drawing for a $50 savings bond. Two $50 savings bonds were awarded to youth members Monday through Saturday. Mazuma’s Annual Spirit Week coincided with Youth Week with “Rock-n-Roll” as its theme. Each day, Team Members wore attire to fit the song choice of the day. Also, Saturday, April 23, Mazuma hosted “Mazuma Rocks Day” by sponsoring a Guitar Hero contest for kids 8–17 and a coloring contest for kids under eight. * Kamehameha FCU, Honolulu, offered kids the chance to play Guitar Hero, and win a $60 Game Stop gift card. They also received double punches to their punch cards for every deposit of $10 or more during the month. For all new youth accounts opened during Youth Savings month, young members received a free My Money Rocks at Kamehameha FCU t-shirt along with their savings passbook, punch card and personal bank. * All 32 branches at ORNL FCU, Oak Ridge, Tenn., worked hard to decorate and celebrate youth during April. The credit union’s Young & Free Tennessee spokesperson, Alex Oliver, was especially instrumental in getting kids fired up for financial literacy. Branches held events with games, activities, food and prizes. Some branches held financial literacy workshops for kids featuring the award-winning Moonjar Moneybox. * Sussex County FCU, Seaford, Del., hosted a free youth fair and member appreciation celebration. Members could take advantage of one-day only loan and deposit specials. Younger guests were entertained with face painting and caricature art. Kids could also climb a rock wall, performing stunts in a bounce house and making personal masterpieces with the spin art. Young members who opened Kids Club accounts could grab for cash in the Typhoon Money Machine.

New banking secretary headlines Pa. league annual meeting

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HARRISBURG, Pa. (5/13/11)--New Pennsylvania Secretary of Banking Glenn Moyer was the opening session speaker at the Pennsylvania Credit Union Association’s annual meeting this week. The meeting also marked PCUA’s President/CEO Jim McCormack’s 30th anniversary with the association. Moyer, recently confirmed as secretary, discussed the functions and roles of the state banking department. He said he was optimistic that the state would approve the budget by June 30. He challenged credit unions support your obligation to support people of all income levels within their communities. As a veteran banker, Moyer reminded attendees: “It doesn’t matter what you do or services you provide, it comes down to how your customers/members perceive what you do for them.” Mark Sievewright, president of Fiserv’s Credit Union Solutions, Brookfield, Wis., challenged credit unions to look toward 2020. “We are undergoing social and demographic changes now,” Sievewright said. Sievewright spoke about “touch finance” and the need for credit unions to keep up with technology. “Both social networks and social business needs to be the focus for future,” he said. “Sometimes you’re so close to the business you’re in, you miss the big picture.” During a pre-convention session, more than 60 volunteers attended the National Credit Union Administration Requirements for Directors session for credit union board members to fulfill NCUA’s new board financial literacy requirements. Participants in this session received a certificate of attendance. The tradeshow officially opened in the afternoon, with more than 80 vendors offering products and services for credit unions. A new feature this year is “showcases,” where selected vendors highlight their services. On Wednesday evening, nearly 100 supporters attended the Wines & Wheels political action committee fundraising event held at The Antique Auto Museum of Hershey.

Overhaul to reduce Irish credit unions

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COUNTY LEITRIM, Ireland (5/13/11)--Stress tests being carried out on the Ireland’s 410 credit unions are expected to lead to a substantial reduction in the number of branches nationally by the end of the year. It is expected that stress test results will show that at least 80 of the country’s credit unions are in serious financial difficulty (Leitrim Observer May 11) All savings deposits in Irish credit unions are covered by a government guarantee. Experts predict that than half of all credit unions nationally may be closed or merged into other credit unions. Sources said they expect the first 80 branches to be closed by the end of the year. “Given the expected adverse stress test results and the challenges facing 400 plus individual credit unions to operate, compete and be regulated in the wider financial sector, it is likely that there will be a major amalgamation of credit unions into fewer and larger entities--one possible method to do this is on a countywide basis,” Colm O’Grady, credit union specialist with Russell Brennan Keane, Chartered Accountants and Business Advisers told the Observer.