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Ohio Senate passes stringent payday lending bill

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DUBLIN, Ohio (5/15/08)--The Ohio Senate voted 29-4 Wednesday to approve landmark legislation that will impose some of the most restrictive regulations in the country upon Ohio’s payday lending industry. State lawmakers made a distinction between Ohio's payday lending industry and a program offered by credit unions as an alternative to short-term lending. The legislation, substitute House Bill 545, does not impact the StretchPay program offered by many Ohio credit unions as an alternative to short-term lending. The bill caps the interest rates that payday lenders can charge consumers at 28% annual percentage rate (APR) (down from the current 391% APR), prohibits loans of less than 31 days, and limits consumers to four payday loans per year. It would also ban Internet payday lending. Despite attempts within the past few days by some opponents of the bill to equate themselves with credit unions, the Ohio Credit Union League was able to continue its educational work in the Senate by again informing legislators on the all-around financial relationships that credit unions have with their members. “While some parties talked about credit unions possibly being an alternative vehicle for payday lending customers, the league has always maintained, and legislators supported, the idea that our mission is not remotely close to the corporate design of a payday lender,” said league General Counsel John Kozlowski. “Comparing the two entities was an extreme reach at the very best.” League President Paul Mercer praised Kozlowski and Capitol Advocates, the league’s retained Statehouse lobbying partners. “Credit union interests were protected and advanced with great success,” said Mercer. He also complimented politically active credit unions throughout Ohio. “The personal relationships that credit unions have with legislators in their districts were crucial in deterring efforts by some parties to draw credit unions into the debate on HB 545,” said Mercer. “We have maintained since day one that credit unions are not payday lenders and do not exist for the sole purpose of providing small-amount loans,” said Kozlowski. “Credit unions have always focused on an overall financial relationship, including financial literacy and education, for all members.” The Senate Finance and Financial Institutions Committee Wednesday morning made minimal changes to the legislation, which the Ohio House of Representatives passed two weeks ago. Most of the minor changes to the bill were requested by the Ohio Department of Commerce. They included a seven-month delay in implementing a statewide consumer database required by the legislation. Substitute HB 545 will go back to the Ohio House next week for a vote to approve the changes made by the Senate. If the House concurs with the Senate bill, HB 545 will then go to Gov. Ted Strickland for his signature.

Calif. CUs healthy despite housing impact says league

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RANCHO CUCAMONGA, Calif. (5/15/08)--California's credit unions are well-equipped to weather the downturns in the state's and nation's economy, says the California Credit Union League. Because of a few high-profile losses, credit unions elsewhere may get a skewed view of credit unions' economic status in the state. But credit unions overall in the state are healthy. "Credit unions in California remain well-capitalized and therefore are equipped to handle the economic downturns," said Terrin Griffiths, league economist and analyst. Capital at the state's credit unions for year-end 2007 was at 10.94%, compared with 10.99% at year-end 2006, she told News Now. "We haven't seen an erosion of capital in the state's credit unions." Chris Collver, league regulatory and legislative analyst, said "delinquencies to total loans have increased from 2006 to 2007 but are still well below 1%." In 2007, delinquencies were 0.85%, compared with 0.47% in 2006. The National Credit Union Administration historically has considered 1.25%-1.50% and under as acceptable, he added. California has more than 500 credit unions. A few credit unions have seen widespread coverage in the news because of problems with home equity loans failing as the housing market boom state struggles with the nation's housing market crisis. "The other credit unions that are in the news are there not because they're in the trouble but because they're taking corrective steps to move their loan delinquencies to the allowance for loan losses side, which they are supposed to do. That's why credit unions have capital," Collver told News Now. Since the state is in a housing crisis, why aren't more California credit unions affected? "Credit unions have different, more stringent lending standards," said Griffiths. "During the boom in the housing market, credit unions offered a wide variety of affordable loans but they didn't relax (lending) standards." They weren't making as many loans, which may not be good from a growth perspective at that time, but now their standards are serving them well, she said. Collver noted that CEOs have told the league their credit unions are taking losses because of bad loans given to members by other financial institutions, whether in the form of credit cards or loans the members got somewhere else and that were not in the best interest of the members. "A ripple effect has been felt by some credit unions," he said. True to their nature, credit unions are reaching out to help those members. "Credit unions are extending their outreach to help members and nonmembers and making them aware of their products. They've invited members to review their line of products," said Griffiths. "Because housing prices are declining in California, however, it is hard to work with some of the (original) loans. Credit unions can offer help for those going into foreclosure or who need to sell their homes. They can make loans to help the members buy time. They try to alleviate the stress that is part of being the homeowner," she said. The point is, says Collver, "credit unions are not engaged in abusive lending tactics, and they're well-capitalized and continue to be." That's true for credit unions both in the state and in the nation, he said. "In the U.S., it's the same story, with credit unions in a very healthy position."

Oklahoma Texas leagues discuss partnership

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TULSA, Okla. (5/15/08)--The Oklahoma Credit Union League is discussing a possible partnership with the Texas Credit Union League to outsource services. In August, the Oklahoma league approached other credit union leagues to see if they had any services they could offer Oklahoma, said Debra Morrow Ingram, league interim president/CEO. Four leagues responded and put together proposals for a partnership with Oklahoma. All of the proposals were good, but partnering with Texas makes the most sense, Morrow told News Now. The Oklahoma league is evaluating what a partnership with Texas would entail. No financial arrangements have been made. A solid proposal for the board of directors to evaluate should be ready by the May 28 board meeting, Morrow said. A partnership between leagues makes a lot of sense, because “there are similar things we all do,” she said. "We are delighted to have an opportunity to partner with a neighboring league," Dick Ensweiler, president/CEO of the Texas Credit Union League, told News Now. Even though a partnership would lead to the outsourcing of some services, there are some things that each league should handle on their own--like advocacy, legislative advocacy, compliance and media relations, Morrow said. The Oklahoma league decided to pursue a possible partnership with another league after looking at itself to see what services it offers and what services it can improve upon. Other factors contributing to the decision to seek a partnership are some changes the league has and will undergo--such as the departure of the league’s former CEO and plans for the league to move its headquarters from Tulsa to Oklahoma City. The partnership exploration process has “been a good learning experience,” Morrow noted. “We saw the good services we provide to members, and we saw the services other leagues provide. “Even if we don’t contract with a league for services, we may try to emulate them,” she said.

CUNA Management School tops list of July learning events

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MADISON, Wis. (5/15/08)--CUNA Management School is one of several learning opportunities available for credit union professionals in the Credit Union National Association (CUNA)’s July event schedule. CUNA Management School is scheduled for July 13-25 in Madison. The program challenges credit union professionals to be leaders in the credit union movement by providing them with leadership skills and lessons. The program consists of three years of a single two-week session each summer. Topics addressed include credit union philosophy, organizational behavior, crisis management, coaching and leadership, business law, politics and legislation, marketing, human resources, finance, accounting, ethics and economics. CUNA Management School has three regional locations:
* Southwest region--Texas Christian University, Fort Worth, Texas. Contact Janine McBee at the Texas Credit Union League; * Southeast region--University of Georgia, Athens, Ga. Contact Jennifer Green at the Louisiana Credit Union League; and * Western region--Pomona College in Claremont, Calif. Contact Nancy Dotson at the California Credit Union League.
Other July learning opportunities from CUNA include:
* Business Lending Certification Institute: Management Strategies, July 21-25, Madison, Wis. The program is created for those responsible for the strategy, planning, and management of an established program and will include an evaluation process to help attendees formu action plans to improve their current lending program. * Business Lending Certification Institute: Fundamentals, July 21-25, Madison, Wis. The program explains the components of offering business lending services to build a solid program foundation. It will start with lending regulations and business basics, and move into financial and application analysis, loan structuring, loan default warning signs, member loan protection, and additional member business services. * Business Lending Certification Institute: Credit Analysis, July 21-25, Madison, Wis. The program will help attendees develop skills to perform an in-depth evaluation of the credit needs of member businesses. Topics include: business credit and tax return analysis, financing fast-growth businesses, loan repayment, business life cycles, financial projections, and business plan case studies. * Business Lending Certification Institute: Advanced Credit Analysis, July 21-25, Madison, Wis. The program focuses on evaluating the financing needs of different industries--manufacturing, service sector, retail and commercial real estate. It also covers financing the purchase of an existing business and uses case studies and loan requests to help participants better understand the specific markets, issues, and red flags of each industry. * Compliance Fundamentals Seminar, July 19-20, Chicago. The overview seminar is offered as an introduction or refresher of more than 25 regulations that affect credit unions on a daily basis; * Regulatory Compliance School, July 20-25, Chicago. It will cover regulations for mortgage and consumer lending, deposit accounts, and general operations, along with National Credit Union Administration requirements and guidance issues. * Regulatory Compliance School: Update, July 20-24, Chicago. The school will explore vendor due diligence and the Bank Secrecy Act, as well as compliance issues for mortgage and consumer lending, eBanking, and more. Participants also will learn about the NCUA’s red flag issues for the year, credit card breaches, and effective compliance audits. * Building Credit Union Leadership Through Communications eSchool, July 23-Aug. 20. Course work will uncover the keys to engaging communications and how to use these skills to build collaborative teams, develop relationships with staff, and create member service excellence.
For more information, use the links.

Truliants 0 auto financing nets 1650 loans

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WINSTON-SALEM, N.C. (5/15/08)--Truliant FCU’s first nine months of a 0% auto financing program resulted in 1,650 auto loans worth $25 million. The $1.086 billion asset, Winston-Salem, N.C.-based credit union started the program last year in a move that led to the credit union directly competing with auto dealerships that provide zero financing (Winston-Salem Journal May 13). Truliant took an idea from auto manufacturers and reinvented it to make it more appealing to credit union members, said Jeff Hardin, North Carolina Credit Union League spokesman. Using Truliant’s zero-rate auto loan, members pay all of their interest up front. The down payment lowers their monthly payment and finance costs, Truliant Spokesman Ryan Shell told the newspaper. Members can use the loan to purchase a used or new car or refinance an existing loan on any car. Average savings over the life of the loan for people using zero financing is about $1,200, Shell said. Hardin said he is unaware of any program that is comparable to Truliant’s zero-rate loan.

CUs consolidation featured in Pittsburgh paper

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PITTSBURGH (5/15/08)--A feature article in the Sunday Pittsburgh Tribune-Review discussed the consolidation of Pennsylvania credit unions. The article presented a positive look at how credit unions in the state are weathering current economic conditions and seizing opportunities to serve their members, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway May 12). The interview took place during the PCUA’s annual convention in Pittsburgh and was conducted at Allegent Community FCU. Participating in the interview were: Jim McCormack, PCUA CEO; Diana Roberts, PCUA board chair; Kevin Anglemyer, CEO, Allegent Community FCU, Pittsburgh; and Ralph Canterbury, vice president, Clearview FCU, Moon Township. Although the number of Pennsylvania credit unions has dropped below 600 for the first time in 60 years, the mood at the PCUA convention was upbeat, the article noted. “In these bad times, credit unions see there are opportunities for them,” McCormack was quoted in the article. “They are not cutting back. They have money to lend.” As consumers try to get out of their adjustable rate mortgages and into fixed-rate loans, mortgage refinancings are probably the busiest area for the $109.5 million asset Allegent Community CU, Anglemyer told the paper. A good boost in mortgage refinance volume also is being experienced at the $42.7 million asset, Hummelstown, Pa.-based Hershey FCU, said Roberts, Hershey president. Credit unions have entered business lending in the past five or so years, with about one in six Pennsylvania credit unions writing business loans, McCormack told the paper. The typical business loan is between $100,000 and $1 million--often to buy a piece of equipment, he added. “As credit has dried up at banks, credit unions are welcoming small-business loans,” McCormack said in the article.

CU System briefs (05/14/2008)

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* OAKLAND, Calif. (5/15/08)--Four men were arrested after a takeover robbery Tuesday at a Berkley, Calif.-based credit union. Police recovered the money and a cache of guns, said Berkeley police. The masked men, two of them armed, entered Cooperative Center FCU before noon on Tuesday. They ordered 20 employees and one member to the ground, and demanded all the money. A female teller was punched in the back of the head but was not seriously hurt. As the four fled, an employee wrote down the getaway car's license plate number. Police spotted the vehicle and after a high-speed chase, the car crashed into a parked vehicle. Three were arrested there and a fourth at a nearby apartment complex (Contra Costa Times May 14) … * DURHAM, N.C. (5/15/08)--Forty Hispanic adults from across North Carolina graduated from Latino Community CU's Financial Education workshops in a ceremony at the Center for Responsible Lending in Durham, N.C. Special guest Rafael Prieto, editor of Charlotte's Mi Gente newspaper, told the group that "as long as we don't know how to manage our income, we will be invisible in this country." In the photo, graduate Miguel Fuentes speaks to the group, who completed six workshops. Workshops are presented three times a year. The next series begins Sept. 8. (Photo provided by Latino Community CU) … * FREDERICTON, N.B. (5/15/08)--New Brunswick lawmakers plan to amend a law to avoid repeating another credit union bailout similar to one the province approved last year. In March 2007, the province approved a $60 million bailout for the credit union Caisse Populaire de Shippagan and the New Brunswick Credit Union Deposit Insurance Corp. The amendments are to provide a better balance between deposit protection and taxpayer protection. Changes would include lowering the maximum coverage of deposit insurance from the current unlimited coverage to $250,000 per qualifying account ( May 14) … * ANTIGO, Wis. (5/15/08)--Richard Goodman, former CEO of Antigo Co-op CU (now known as CoVantage) died May 10, according to the Wisconsin Credit Union League (The League May 12). Goodman began his career in 1957 and spent 33 years with the credit union before retiring. Services will be today at St. John Catholic Church in Antigo …

Corporate Central announces new board

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MUSKEGO, Wis. (5/15/08)--Three credit union CEOs were elected as directors during Muskego, Wis.-based Corporate Central CU’s annual meeting May 8. The new directors are:
* Gerald A. Forsythe, Altra FCU, Onalaska, Wis.; * Greg A. Hilbert, Fox Communities CU, Appleton, Wis.; and * Brian J. Prunty, CoVantage CU, Antigo, Wis.
Corporate Central directors elected officers at the May 8 board meeting to serve for the 2008-2009 year. They are:
* Chairman: Daniel Ige, president/CEO, “Golden Rule” Community CU, Ripon, Wis. * Vice Chairman: Forsythe; * Secretary: Hilbert; * Treasurer: Richard A. Koenig, president/CEO, Prime Financial CU, Cudahy, Wis.
Other directors constituting Corporate Central CU’s nine-member board include:
* Prunty; * Kim Sponem, president/CEO, Great Wisconsin CU, Madison, Wis.; * Gerald E. Tiedt, president/CEO, Premier Financial CU, New Holstein, Wis.; * Ronald Vogel, president/CEO, Fort Community CU, Fort Atkinson, Wis.; and * Thomas P. Young, president/CEO, Pioneer CU, Green Bay, Wis.

CUs help those displaced by Florida wildfires

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PALM BAY, Fla. (5/15/08)--Several Florida credit unions are working with United Way to help those displaced by recent wildfires in the state. The wildfires began burning on Tuesday. The largest blaze burned 3,800 acres in the towns of Palm Bay and Malabar. About 34 miles of the interstate in Brevard County was closed Tuesday because of smoke, and all 18 schools in Palm Bay were closed Tuesday (USA Today May 14). Police arrested a suspect yesterday regarding a wildfire that was deliberately started in Palm Bay (CNN May 14). Community Educators CU, Rockledge, teamed up with United Way of Brevard County and is collecting donations at all seven of its branch locations in Brevard County. Donations can be made in cash, by check or by using Visa or MasterCard. The fund gives 100% of all donations to relief. The credit union also opened up a business office 9 a.m. to 6 p.m. yesterday for victims in its Palm Bay branch to notify loved ones and contact insurance companies. The credit union held a dinner on Wednesday for those displaced by the fires. “It has long been the policy of Community Educators CU to be responsive to those affected by fire emergencies, hurricanes and natural disasters,” said Sara Stern, Community Educators vice president of marketing. “We hope to help families get back on their feet more quickly by providing the resources they need at this unfortunate time.” The credit union is accepting any non-perishables at all of its branches. Needed items include sun block, bug spray, water and blankets. Firefighters need water, socks, sunscreen and Chapstick. Space Coast CU, Melbourne, is accepting donations for the United Way at all of its branches. It has four branches in the Palm Bay area. The Miami Herald Wednesday reported that a credit union employee, Brenda Civita, lost her home in the fire. The newspaper did not name the credit union. News Now was unable to confirm the credit union by press time.

A whole lot of shredding going on at CUs

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MADISON, Wis. (5/15/08)--Credit unions were busy conducting shredding events around the country the past few weeks, both to combat identity theft and to go green in recycling efforts. State Employees' CU (SECU), Raleigh, N.C., partnered with state agencies and Iron Mountain Shredding Co. for its first Scam Jam on May 3. The event was for SECU's Golden Circle members--those 50 and older--who live within an hour of the site. "Senior adults are the primary target for so many of today's scams, including identity theft," said Karen Daeke, vice president of SECU's security administration department. In addition to shredding personal documents, the event provided educational workshops and informational booths. Other sponsors included the state Attorney General's Office, Division of Aging and Adult Services, and Adult Protective Services Retired Governmental Employees' Association. In Oregon, three credit unions held shredding events April 19, according to the Credit Union Association of Oregon (Oregon Outlook May):
* Mid Oregon FCU and Secure Shred sponsored a "Free Shred" day to help community members purge old tax records and outdated records. The shredded materials are recycled as tissue paper.
Volunteers from MaPS CU, Garten Services and South Salem (Ore.) High School band helped direct traffic and collect items to shred during the credit union's Annual Free Community Shred event. (Photo provided by the Credit Union Association of Oregon)
* At MaPS CU's fourth Annual Community Shred event, co-sponsored with Garten Services and KBZY Radio, members shredded 16,782 pounds of documents, recycled 8,347 pounds of computer systems, and donated 290 pounds of cell phones. The event attracted 668 cars--an average of 2.5 cars per minute. * SELCO Community CU and CDI Vaults partnered to hold ShredFest, an event in which SELCO members and the public could bring up to one trunkload of documents to shred.
In Missouri, more than 700 cars and trucks lined up at First Community CU, Chesterfield, to shred more than 14,000 pounds of documents on its shred day April 12. "Identity theft is an ongoing issue across the country, and shredding documents makes it more difficult on identity thieves, said Debra Wapelhorst, event planner. It's also an "environmentally friendly solution," she told the Missouri Credit Union Association (CourierNet April 23). In Texas, almost 2,500 people used the free shredding service at San Antonio FCU (SACU)'s Sixth Annual Shred Day on April 19. The credit union joined four local shredding companies, WOAI News 4 and the Association of Records Managers and Administrators to sponsor the event. Trucks shredded or collected 59 tons of paper for recycling, and participants donated $5,000 for Dress for Success of San Antonio, an organization that helps women gain skills to re-enter the work force. According to the Texas Credit Union League, other Texas credit unions with recent shredding events were AMOCO FCU, Texas City, with 15,000 pounds of shredded paper from 1,500 boxes; Cy-Fair FCU, Houston; DATCU, Denton; and East Texas Professional CU, Longview (LoneStar Leaguer May 1).