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Community Trust outlines 75 years of the CU difference

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GURNEE, Ill. (5/19/08)--A lot has changed at Community Trust CU in the past 75 years; yet, much remains the same, especially the philosophy, according to an article in The News Sun (April 29). The newspaper interviewed President/CEO Madeline Lipka, who outlined the credit union difference throughout the history of the credit union, which was founded as Warren Township CU. Today it has more than $161 million assets. Lipka told the newspaper the credit union was formed to create a comfortable environment where people could find an alterative to the high-interest loans and low-yield savings offered by local banks. "That's still our biggest draw three-quarters of a century later," she said. Many people don't realize credit unions offer high-tech, secured financial services, she said. The biggest difference (from banks) is that we treat our members like they own the place, because they do." She noted the member-owned, not-for-profit financial cooperative structure and pointed out the credit union and its employees are heavily involved with community service groups. "Everything we do, and each of the products and services that we offer, begins with the realizations that our members want to enjoy a comfortable lifestyle, followed by a prosperous retirement. The communities and families we serve are the reason for our continued success, so we make them our top priority."

CUs not hurting banks says letter to the editor

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BATON ROUGE, La. (5/19/08)--Credit unions are not hurting banks, according to a credit union CEO’s letter to the editor published in the Baton Rouge Advocate this month. A 2006 study by the Government Accountability Office (GAO) indicated that banks are not harmed by credit union competition, wrote Cary J. Anderson, president/CEO of LA DOTD FCU in Denham Springs, La. The study, which was conducted from 1996 to 2006, said banks had a net income growth rate of 7%, compared with credit unions’ net income growth rate of 3% (Baton Rouge Advocate May 5). Banks reported a net income of $146 billion in 2006, compared with credit unions’ net income of $6 billion, the letter said. The study also said that banks use tax deductions, and 31% of banks are Subchapter S corporations. Subchapter S corporations pay no tax by providing income to shareholders, who then are taxed individually. Some banks have used tax shelters and transactions the Internal Revenue Service deems abusive, Anderson wrote. Credit unions are chartered to serve people of modest means, and provide members with higher dividends, lower loan rates, lower fees and in the case of LA DOTD FCU, a cooperative network in 3,200 locations with thousands of surcharge-free ATMs, Anderson noted. Credit unions are tax-exempt because of their charter, and pass along savings to members. Credit unions also provide members with financial education. LA DOTD FCU sponsors three in-school credit union branches and provides a certified financial literacy teacher to schools for free, the letter said.

25 grants total 10900 for flood relief in Maine

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WASHINGTON (5/19/08)--Twenty-five members in flood-stricken northern Maine will receive a combined total of $10,900 in flood relief checks from credit unions. "The National Credit Union Foundation (NCUF) commends the Maine Credit Union League and the Maine credit union community for rallying to support survivors of the worst flooding in northern Maine in over 100 years," said Steve Bosack, deputy director of NCUF. Maine credit unions and their supporters raised $13,290 through for credit union members whose homes were flooded in Aroostook County. NCUA is now moving forward to prepare disaster relief grant checks to flood victims whose needs have been classified as "critical" or "very serious" by their credit union CEO. Fifteen members of Acadia FCU with critical needs will receive a total of $7,500 in grants or $500 each. Five members of NorState FCU with critical needs will receive a total of $2,100 in grants, ranging from $100 to $500. Two members of Acadia and three members of NorState also will receive a combined total of $1,300 for members with very serious needs. NCUF will deliver the checks next week to the credit unions, who verified and prioritized their members' flood losses. More flood relief applications are in the pipeline, with more than $2,000 still available for grants in the state, said Bosack. NCUF will hold off for another week on funding for members with less serious needs. Any new "critical" or "very serious" applications coming in will take priority. Maine credit unions are still raising donations. "We hope to be able to fund all of the pending applications--and perhaps even consider larger grants to members who suffered the largest unrecoverable losses," he said. For more information on the flood and relief measures, use the resource link.

IVermont WomanI article on CUs draws readers response

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BURLINGTON, Vt. (5/19/08)--An article published in a women’s newspaper about the benefits of joining a credit union garnered positive feedback from readers, according to the Association of Vermont Credit Unions. The article, “Explore the Benefits of Joining a Credit Union,” written by Financial Coach and Speaker C.D. Moriarty, was published in the May issue of Vermont Woman. The article drew a lot of interest from readers, according to Ellen Biddle, account executive at the newspaper. She told the association that many comments the newspaper received “echoed the sentiments expressed in the piece...that credit unions are locally owned, member-controlled and highly beneficial alternatives to large commercial banks, which answer to stockholders” (Newsline Express May 16). A number of credit union staff and members were quoted in the piece, including Association President Joe Bergeron. “On average, Vermont credit union members receive $240 in benefits a year,” he told Moriarty. Sue Leonard, New England FCU, Williston, Vt.; Ginny Fleischman, Green Mountain CU, South Burlington, Vt.; and Mary Robert, Vermont FCU, Burlington, also are quoted. Robert, 35, joined the credit union when she was 16. The article also profiled credit union pioneers Dora Maxwell, Louise Herring, and Angela Melville, addressing the role that women have played in the credit union movement. Maxwell was an avid organizer for the credit union movement’s trade association as well as an original signer of the Credit Union National Association’s constitution. Herring signed the original constitution for the national credit union association when she was the Ohio delegate to the 1934 national credit union conference in Estes Park, Colo. Melville helped farmers, coal miners and other laborers organize credit unions in Kentucky. She rode horseback across 20 states, encouraging communities to start credit unions.

Are credit union robberies getting more violent

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MADISON, Wis. (5/19/08)--Are credit union robberies becoming more violent? That is difficult to answer, because robberies by nature are violent; the threat of violence is always there, according to a CUNA Mutual robbery expert. The trend over the past few years with the use of weapons in credit union robberies is staying consistent, Vince Wagner, risk manager for CUNA Mutual Group, told News Now. In 2006, 434 credit union robberies were reported to CUNA Mutual Group, with 246 (57%) involving a weapon, Wagner said. In 2007, 349 robberies were reported, with 179 (51%) involving a weapon. “But based on media reports, it appears that perhaps weapons are being used more now, as opposed to just being displayed,” he said, adding that CUNA Mutual doesn’t make that distinction in the statistics it keeps. “I want to emphasize that credit unions need to be cognizant of the possibilities of robbery and provide their staffs with training,” Wagner said. “The key thing to remember during a robbery is cooperate, cooperate, cooperate. Don’t panic, remain calm, and get the robber out of the credit union as quickly as possible, because then there is less likelihood something will go wrong,” he concluded. Some incidents of violence with credit union robberies in the past year:
* An armed man lined up eight credit union employees and one member in Fibre FCU, Longview, Wash., and pepper sprayed them all, then fled with a bag of cash Tuesday afternoon (Associated Press May 14). * An armed man entered Keesler FCU, Biloxi, Miss., and took two employees hostage, Tammy Brister, vice president of branch operations, told News Now (April 22). The man had several weapons, and the credit union was "extremely busy" at the time of the robbery, she added. Because he came to the credit union on foot, he forced the tellers into a car to escape. The three left the credit union, and after a high-speed chase, the car drove into a ditch and the robber was caught by police, Brister said. "The tellers are fine," she said. "No one was hurt physically." * A teller of a Charlotte, N.C., branch of Raleigh-based State Employees CU' was shot and seriously injured during a robbery in March (Charlotte Observer April 1). * A suspect involved with an attempted armed robbery and shootout at the Niles, Mich., branch of Berrien Teachers CU died in surgery at a local hospital in January. The suspect was allegedly shot during the attempted robbery the morning of Jan. 18 by a security guard. Two men entered the credit union and exchanged gunfire, both inside and outside of the credit union, with the guard. At least five shots were fired, police told the Tribune (Jan. 22).
Some other violent incidents at credit unions, not involving robberies:
* A Concord, N.H., police officer was shot inside an under-construction branch of Granite State CU in May when another officer's gun discharged. The officer was treated and released from a local hospital. "We're glad nobody was seriously injured," Denise Caristi, president/CEO, Granite State CU, told News Now (May 5). * A Maine man who waved a chain saw over his head, revved it up to threaten passing motorists, and performed impromptu pruning of local shrubbery was eventually arrested at gunpoint near Howland Enfield CU. A local deputy sheriff and a Maine State Police Trooper took Lionel Dube, Jr., of Argyle, into custody. He was charged with criminal threatening, disorderly conduct and violation of bail conditions (Associated Press June 7).

Online banking beats branches call centers

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NEW YORK (5/19/08)--Customer satisfaction with online banking sites has risen significantly the past five years, indicating that Americans are more pleased with online banking operations than with branches and call centers, according to a study. The 2008 ForeSee Results/ Online Financial Services Study employs the University of Michigan's American Customer Satisfaction Index (ACSI). The study measures customer satisfaction with the online experience in three areas: Banks (defined as large banks, regional banks and credit unions), credit card companies, and investment services firms. Online banking websites scored 82 on ACSI's 100-point scale, up 12% or nine points from 73 in 2003. Credit card websites and investment websites each scored 75. Overall retail banking scored 78 when measured by ACSI last year. Three factors were cited in the study as why banking sites had higher customer satisfaction levels. They have made it easy for customers to access information and conduct transactions at their convenience; they have convinced large numbers of customers of the convenience, value and security of the online channel; and they know to use the web as a tool to build stronger customer relationships. The survey found that highly satisfied online banking customers are significantly more likely to purchase more services (31%), use the website as a primary channel (57%) and recommend their financial institution (54%) as its website (63%). The survey report noted several opportunities for financial institutions to raise customers' satisfaction and loyalty. They can: increase online bill payment; increase Web usage; increase online applications for loans and other activities; and increase use of online customer service features, such as demos and tutorials.

Michigan St. Lucia leagues sign partnership

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GRAND RAPIDS, Mich. (5/19/08)--The Michigan Credit Union League (MCUL) and the St. Lucia Credit Union Co-operative League made their international partnership official at a signing ceremony in Grand Rapids, Mich., Thursday. The World Council of Credit Unions (WOCCU), which now oversees 29 such partnerships, including St. Lucia/Michigan, in its International Partnerships Program, was also represented at the ceremony.
Pictured at the signing of an World Council of Credit Unions (WOCCU) international partnership agreement between the Michigan Credit Union League (MCUL) and the St. Lucia Co-operative League are, from left: Alan Babcock, MCUL vice president of credit union relations; Catherine Roberts, WOCCU board secretary and CEO of Community Choice CU, Livonia, Mich.; David Adams, MCUL president/CEO; Victor Miguel Corro, WOCCU international partnerships manager; Alexander Joseph, CEO, St. Lucia Co-operative League; Emmerlyn Monrose, manager, St. Lucia Civil Service CU; and Rupert Branford, director of Elks CU and of the St. Lucia Co-operative League. (Photo provided by the World Council of Credit Unions)
The signing ceremony took place during the MCUL’s 2008 Annual Convention and Exposition. Attending from St. Lucia were Emmerlyn Monrose, manager of St. Lucia Civil Service CU; Rupert Branford, director of Elks CU and of the St. Lucia Co-operative League; and Alexander Joseph, CEO of the St. Lucia league. “We are very happy and appreciative that the WOCCU and the MCUL have effectively started a partnership with St. Lucia, a developing credit union movement with lots of room to grow,” Joseph said. “The MCUL and credit unions have expressed a keen interest in getting to know other movements and cultures, which demonstrates the cooperative spirit of our movement. We look forward to making key achievements,” he said. “We would like the credit unions in St. Lucia to see how mergers work and study their advantages and disadvantages,” said Victor Miguel Corro, International Partnerships manager for WOCCU. “We’d also like them to better understand marketing strategies that will help them attract new members and satisfy the needs of the members with sophisticated, updated and relevant credit union products and services.” "Strengthening the credit union system worldwide is a vital effort for the future of the industry, and the St. Lucia partnership is an excellent opportunity to help do this,” said David Adams, MCUL president/CEO. The partnership will help support WOCCU’s technical assistance project in St. Lucia, designed to shore up the country’s credit unions so they can provide stronger support to the island’s farmers. Many of the farmers lack the resources to grow produce, primarily bananas, to sell to the luxury hotels that are part of the island’s growing tourist industry. WOCCU plans to ask MCUL for assistance in conducting market studies to determine the quality and capabilities of St. Lucia credit unions’ agricultural lending programs to support those efforts, said Matt Garcia, a WOCCU program manager. “Helping island farmers become self sufficient is vital to their survival in a rapidly changing island economy,” Garcia said. “Thanks to the Michigan league’s generous involvement, we’ll be better able to accomplish that goal.” Two MCUL staff members visited St. Lucia in November 2007 to conduct a needs assessment and familiarize themselves with the people and culture. An island nation approximately 28 miles long and 13 miles wide, St. Lucia is home to 15 credit unions. Approximately 150,000 people call St. Lucia their full-time home, with one-third of the population belonging to a credit union.

Stimulus checks can impact CUs bottom line

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FARMERS BRANCH, Texas (5/19/08)--The federal government’s efforts to boost the slumping economy through economic stimulus checks could result in a torrent of cash hitting credit unions. How should credit unions respond? About 130 million Americans will receive checks, ranging in size from $600 to $1,800. Preliminary surveys indicate that only 20%-25% of recipients will spend their checks, while the remainder will deposit the checks to bolster their savings balance or pay down debt--meaning credit unions could be awash in cash (LoneStar Leaguer May 16). Such large inflows of cash are the kind of anomaly that can negatively impact a credit union’s bottom line if the credit union has not been vigilant in adjusting interest rates relative to earnings, said analysts from Southwest Corporate Investment Services Asset/Liability Management (ALM) Service. “If credit union capital is low and investment earnings are renewing at rates lower than those being paid on member dividends, large cash inflows will only exacerbate the move toward negative earnings,” Mark DeBree, senior ALM analyst, told the Texas Credit Union League. “Credit unions should determine whether dividend schedules are reasonable, based on earnings in the current interest rate environment,” he added. “Some credit unions are reticent to cut the cost of funds because they want to provide the greatest value for their members. But maintaining share rates that are too high can result in negative earnings and jeopardize the credit union’s financial condition. “While credit unions can’t ignore what competitors are paying on deposits, it should not be the sole determinant in setting deposit rates,” DeBrees concluded.