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CU System

CU System brief (05/18/2011)

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* DURHAM, N.C. (5/19/11)--Alejandro Sanchez, an employee of Latino Community CU, Durham, N.C., is launching an organization to aid entrepreneurs in the Hispanic community with starting businesses. The program, Accion Emprendedora USA, is a non-governmental organization and not a program of the credit union (The Herald Sun May 18). Sanchez told the publication that many Hispanic entrepreneurs could not grow their businesses without more financial resources or training. The organization will provide training on how to get started, manage their business and access opportunities to grow in the Hispanic community …

Weidler winner of first CO-OPTHINK prize

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RANCHO CUCAMONGA, Calif. (5/19/11)--Matt Weidler. information technology asset coordinator of Evangelical Christian CU, Brea, Calif., is the winner of the first annual CO-OP THINK Prize and recipient of $10,000 for his idea for mobile phone ATM access. Three finalists in the new competition presented their ideas to attendees of THINK 11 in Anaheim, Calif., April 17. In addition to Weidler, finalists were:
* Shari Storm, senior vice president, chief marketing officer at Verity CU, Seattle, for her business plan for the Squirrel smartphone application; and * Candace Vogelsong, marketing specialist at Community Powered FCU of Newark, Del. Her business plan proposed an industry cooperative for social media so individual credit unions would not require dedicated staff.
The award was presented by CO-OP Financial Services and CO-OP THINK Prize sponsor MasterCard. Weidler's idea of cellular ATM access is at its core a customer convenience initiative allowing members to use ATMs through a second mechanism of their choice in case they forget their debit card or prefer not to carry it with them. His video presentation related the many times he has headed to the ATM and had to turn around because he didn't have his debit card with him. He asked why not be able to access the ATM via his mobile phone, which he always has with him. "One of the key criteria for the CO-OP THINK Prize was impact," said Caroline Lane, senior vice president, business development and marketing for CO-OP Financial Services. "His idea clearly resonated with the competition voters." Finalists were selected by judges from CO-OP Financial Services and the Filene Research Institute based on four standards: impact, creativity, aggregation (or application of the idea across the industry) and implementation (or the ability to be adopted quickly). Entries for the CO-OP THINK Prize for 2012 opened Wednesday. For more information, use the link.

Two factors contribute to Jersey CUs battle with banks

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HIGHTSTOWN, N.J. (5/19/11)--Two factors--credit unions' aggressive ad campaign and legislation seeking credit unions' participation in municipal deposits--are contributing to the attacks against credit unions by bankers in New Jersey through the media, said Paul Gentile, New Jersey Credit Union League president/CEO, after the latest volley of op-ed pieces. A letter to the editor from Gentile was published in the Trenton Times Tuesday and in Press of Atlantic City Wednesday--the latest of several letters the league has written to counter letters and op-eds from New Jersey Bankers Association CEO John McWeeney attacking credit unions' tax exempt-status. The banks "are responding to a very aggressive advertising campaign, New Jersey credit unions' Banking You Can Trust campaign," Gentile told News Now. "We're all over cable, radio, and newspapers, and New Jersey credit unions have received the most searches (to locate a credit union) on FindaCU.com the past three months. The campaign has very strong messaging, hitting bank fees and promoting credit unions as an alternative," he said. "Banks have gone to their association and said, "Credit unions are coming after us. What are you going to do about it?'" he added, noting that banks don't work cooperatively so their association has responded by writing letters in various media outlets in the state. The second factor--the municipal deposit legislation, which passed the state Senate overwhelmingly and is in an Assembly committee for negotiation--affects banks. Credit unions are seeking to participate in municipal deposits, which are controlled by the banks. "It's a $15 billion market and banks control it entirely, so we're aggressively pushing" to get the legislation through," Gentile said. The two factors "have put the banks on edge," Gentile said. He noted that banks also mention issues such as credit unions' member business lending and tax-exemption. "Credit unions have the high ground and shouldn't apologize for their tax exemption," Gentile noted, adding that credit unions return it to members in terms of better rates and lower fees while New Jersey banks made $860 million in profits in 2010. "We shouldn't feel sorry for banks. Credit unions have just 6% of the market." Other states might learn from what New Jersey is experiencing. "While it may look like we are playing 'defense' to these banker letter attacks, it's actually the opposite," he said. "Our 'Banking You Can Trust' consumer advertising campaign and our legislative push for credit unions to be able to participate in municipal deposits has spurred them to write these letters. "We welcome the public volley because credit unions have the public policy high ground. We are about helping consumers first, not shareholders. We only exist for the savings and lending needs of our member/owners. We have a powerful value proposition in these tough economic times and the bankers know it. We must keep relentlessly telling our good story. These public battles can only help to continue position credit unions as the good guys," Gentile said. To review the league's latest volleys in the credit union vs. bank debate in New Jersey, use the links.

National Saving Challenge passes 100M mark

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MADISON, Wis. (5/19/11)--The National Youth Saving Challenge, hosted by the Credit Union National Association (CUNA), attracted more than $28 million in deposits from children in April.
Kylee, a youth member with Cascade Community CU, Roseburg, Ore., was one of 10 randomly selected children who each received a $100 prize during the Credit Union National Association’s National Youth Saving Challenge last month. Joining Kylee is Member Services Supervisor Charla Bay. (Photo provided by Cascade Community CU)
With this year’s deposits, the National Youth Saving Challenge has surpassed the $100 million milestone, with $117, 628,671 in total deposits since the program’s inception in 2004. Held in conjunction with National Credit Union Youth Week, the saving challenge puts the spotlight on youth in a contest tracking deposits throughout the month of April. Participating credit unions use the challenge to motivate children, teenagers and their parents to start and maintain good money management practices by opening accounts and making deposits. With 305 credit unions reporting this year, deposits totaled $28,545,722. More than 146,000 kids made deposits during the month, with 9,058 new accounts opened. The average amount deposited per child was $196. By comparison, last year 384 credit unions reported $24,811,741 in total deposits. Roughly, 168,438 children made deposits, with 10,385 new accounts opened. The average amount deposited per child was $147. In 2011, National Credit Union Youth Week was April 17-23, with the theme “Money at my Credit Union Rocks.” Among the ways credit unions inspired their young members to save:
* SECU, Raleigh, N.C., offered prizes for its “Money Rocks” Savings challenge. Prizes included a Nintendo Wii, Nintendo DSi, iPod Touch and an iPod Nano. At SECU’s 237 branches, more than 700 new youth accounts were opened with deposits totaling $3.2 million. * OUR CU, Royal Oak, Mich., introduced its young members to the personal finance website FamilyMint and offered a savings raffle for deposits made during the week. Two members each won a $25 VISA gift card. * First Community CU, St. Louis, sponsored a contest in which members collected autographs from Louie the Loan Star. With four autographs, kids could enter a drawing to win four tickets to see Taylor Swift in concert. * Cascade Community CU, Roseburg, Ore., let its youth members rock out to Guitar Hero in its lobbies. Kids could also guess how much coin was in a piggy bank and take part in a coloring contest. * Community 1st CU, Ottumwa, Iowa, hosted an outdoor free concert by the local rock band “Compulsive Liars.”

Mergers announced by CUs in several states

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MADISON, Wis. (5/19/11)--Mergers continue to reshape the credit union industry. Among the mergers taking place:
* Texas Dow Employees CU, $1.6 billion in assets, Lake Jackson, Texas, and Bluebonnet CU, $80 million in assets, Houston, have agreed to merge. * American 1 FCU, $178 million in assets, Jackson, Mich., is merging with Premier Financial CU, $56 million in assets, Clinton Township, Mich. * TruStone Financial FCU, $664 million in assets, Plymouth, Minn., has agreed to merge with $6 million-asset Ukrainian CU, Minneapolis. * Cal State Central CU, $110 million in assets, Santa Rosa, Calif., will merge into $1.7 billion-asset Redwood CU, also of Santa Rosa (California Department of Financial Institutions Monthly Bulletin April 1). * Metro CU, $780 million in assets, Chelsea, Mass., has merged with University CU, $58 million-asset, Boston.

CUNA contributes to IBankrateI debit card advice

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MADISON, Wis. (5/19/11)--The Credit Union National Association (CUNA) contributed to a Bankrate.com story on advice about debit cards, which was subsequently picked up by Fox Business.com and Yahoo! Finance. In an article titled “8 secrets about your debit card,” Michelle Dosher, CUNA managing editor for consumer publications, contributed comments to two of the eight items (items four and six below). Bankrate listed eight things about a debit card that consumers may not know:
* It may have fraud and theft protection. However, some debit card issuers offer no liability protection against fraud and theft. To protect themselves, consumers need to ask specific questions such as: How do you have to use the card? What’s the timetable for reporting a loss due to an unauthorized transaction? * The card can help find lost receipts. Some issuers will offer a service to find receipts and e-mail them to users. * It may impose a daily spending limit. No matter how much is in a user’s account, the financial institution will cap debit spending once the limit is reached. * A card likes routine. If a user deviates from normal use patterns, the debit card may not work because institutions often will deactivate a card if they notice atypical use. However, with some issuers, users can let their credit union or bank know if they intend to use the card when they are out of town, and the issuer will put a “travel alert” on the account, CUNA’s Dosher told Bankrate. * Transactions may not be deducted in the order they are purchased. Some institutions deduct large purchases first, which can produce maximum fees if a customer overdraws an account. * The balance may be smaller than it appears. With signature-based purchases, money can take a few days before it exits an account, Dosher told Bankrate. To keep track of purchases, customers and members should look into online banking services offered by their credit union or bank, she added. * The card could tap a savings account. At many credit unions and banks, one option for low-cost overdraft protection is to link checking and savings accounts. However, if the two accounts are linked, anyone with the access to the debit card can empty both accounts. * Users might have another option. Many credit unions and banks offer ATM cards designed just to withdraw cash from ATMs. However, ATM cards can still be used to purchase gas or merchandise at some locations--any place that accepts a personal identification number.
To read the article, use the link.

SECU a finalist in Defense Employee Support Award

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RALEIGH, N.C. (5/19/11)--State Employees’ Credit Union (SECU) of Raleigh, N.C., is a finalist for the 2011 Secretary of Defense Employer Support Freedom Award.
State Employees’ CU, Raleigh, N.C., has been named a finalist for the 2011 Secretary of Defense Employer Support Freedom Award. SECU Benson Vice President Elizabeth Fair (standing) took care of the children of National Guard Reservist/Benson Financial Services Officer Cathy Baker during her deployment. (Photo provided by State Employees CU)
The Freedom Award is the Department of Defense’s highest recognition of employers for support of their employees serving in the National Guard and Reserve. SECU is one of 30 finalists selected from 4,049 nominations from Guard and Reserve service members or their families. The finalists were selected from a group of 148 semifinalists announced last month. The credit union was nominated by Jamie Applequist, SECU senior vice president and an Air Force reservist. Employers named as finalists for the Freedom Award stand out for the initiatives they put in place for Guard and Reserve employees and their families. Among the examples of support that Applequist cited in her nomination were differential pay and ongoing benefits support, an SECU co-worker who took care of a service member’s children for a month and other employees handling chores for a service member involved in a car accident. Also, SECU has been supportive of the North Carolina National Guard and other deployed state soldiers. The credit union provided 5,000 gift boxes during the past holiday season to soldiers serving abroad and participated in National Guard Yellow Ribbon and Welcome Home events. The SECU Foundation, funded solely by SECU members, also supports National Guard initiatives, including Operation Kids on Guard and educational scholarships. A national selection board of senior defense officials, business leaders and prior awardees will select 15 recipients for the 2011 Freedom Award. The Department of Defense is expected to announce the award recipients in early summer. The 2011 recipients will be honored in Washington, D.C., at the 16th annual Secretary of Defense Employer Support Freedom Award Ceremony Sept. 22.

CU to become first mutual bank in Australia

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BRISBANE, Australia (5/19/11)--Queensland Teachers' CU (QTCU), in Brisbane, Australia, has applied to become the first mutual bank in Australia, according to The Courier-Mail (May 18). The credit union, which has 70,000 members, applied to the Australian Prudential Regulation Authority (APRA) to change to QT Mutual Bank Ltd. It will need 70% of members to vote on the name change at a special general meeting in Brisbane June 21. CEO Mike Murphy told the publication that the opportunity to become a mutual bank was created by the federal government's "fifth pillar" reforms to develop a more competitive and sustainable banking system. The credit union is one of the few credit unions meeting APRA's guidelines to use the term "bank," he said. He said the current name was not resonating with or attracting new members and the credit union could access cheaper wholesale funding once it is rated as a bank.

Access to lower fees available at CUs In the media

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MADISON, Wis. (5/19/11)--Credit unions are providing access to lower fees for services, relative to large banks, according to some media sources. George Poitou, chief operating officer for SCE FCU, El Monte, Calif., said his $81 million-asset credit union attempts to keep fees low for members while maintaining a high level of service (sgvtribune.com May 16). However, pending legislation in Congress that would reduce debit interchange fees from their current average of 44 cents per transaction to 12 cents per transaction would hurt his credit union, Poitou told the publication. SCE would have lost money last year if interchange fees his credit union received from merchants were reduced by 70%. If the new interchange proposal goes into effect, SCE will either have to eliminate free checking or alter its interest rates on loans and deposits, he added. Credit unions often help people who are unable to obtain loans elsewhere, Poitou told sgvtribune.com. And credit unions operate--in contrast to banks--by modifying loans right from the start. Without that type of help, many more people would have lost their homes by now, he added. The California Credit Union League is monitoring the proposed legislation as it approaches the extended July 21 deadline, Jeremy Empol, league director of federal government grass roots advocacy, told sgvtribune.com. In a related matter, money.blogs.time.com Tuesday said the best terms on financial accounts and loans most often are available at credit unions and small banks. Credit unions also regularly drub banks in customer satisfaction surveys, the publication said. The Credit Union National Association (CUNA) opposes a proposal in Congress capping interchange fees and has told federal lawmakers that such action would harm consumers by driving up costs of debit cards, limiting consumer options, and harming competition and technological innovation. Interchange fees allow business costs, including the risk of consumer nonpayment, to be shared by the payments participants, CUNA said. It is asking Congress to stop and study the impact of the proposal.

PCUA presents Keystone other awards

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HARRISBURG, Pa. (5/19/11)--The Pennsylvania Credit Union Association (PCUA) presented its awards during its 77th Annual Convention May 11-13 in Hershey. Hundreds of credit union and supporters statewide attended the convention, which featured a keynote address by newly confirmed Pennsylvania Secretary of Banking, Glenn Moyer. PCUA’s board of directors awarded the Keystone Award to Michael Kaczenski, Aston-based Sun East FCU President/CEO. A native of Ohio, Kaczenski has been active in the credit union movement for nearly 25 years and has served as president/CEO of Sun East FCU since 2001. The Keystone Award was first presented in 2000 to honor an individual or organization that epitomizes the credit union philosophy. PCUA Chairman Ray Brunner cited Kaczenski’s leadership in developing the iBelong statewide credit union awareness campaign. The iBelong campaign, launched in 2007, features TV and radio commercials promoting credit unions as safe and consumer-friendly financial institutions for Pennsylvanians. Kaczenski has served on the association’s board since 2004 and is active in the Delaware Chapter of Credit Unions. PCUA also announced the 2011 Credit Union Youth Ambassador of Pennsylvania, Whitney Thompson, 25, representing the Philadelphia Chapter of Credit Unions and employed as a member service officer at the Philadelphia Stock Exchange branch of American Heritage FCU. As youth ambassador, Thompson will promote credit union youth activities and serve as a representative of PCUA during events and meetings. Also, Joshua Madore, 25, of Bethel Park, representing Riverset CU, Pittsburgh, and the Pittsburgh Chapter of Credit Unions was named first alternate; and Mike Williams, 21, of Erie, representing Erie General Electric FCU and the Erie Chapter of Credit Unions was named second alternate. A number of awards were presented to credit unions for of their community work. The Desjardins Youth Financial Education first-place awards were given to:
* Keystone FCU, Downingtown, $50 million to $150 million in assets; * Service 1st FCU, Danville, $150 million to $500 million; and * TruMark Financial CU, Trevose, more than $500 million.
The Louise Herring Award for Philosophy in Action first-place award was presented to SPE FCU, State College, with less than $50 million to $250 million in assets. The Dora Maxwell first-place awards for social responsibility were presented to:
* Timberland FCU, DuBois, $20 million to $50 million in assets; * Meadville (Pa.) Area FCU, $50 million to $100 million; * Cross Valley FCU, Wilkes-Barre, $100 million to $200 million; * Belco Community CU, Harrisburg, $200 million to $500 million; and * American Heritage FCU, Philadelphia, more than $500 million.
PCUA presented marketing awards to credit unions for their work in creating annual reports, newsletters and websites. The Credit Union Annual Report Contest first-place award winners:
* Wyse FCU, Baden, less than $20 million in assets; * HealthCare First CU, Johnstown, $20 million to $100 million; * TruMark Financial CU, more than $100 million.
Credit Union Newsletter first-place award winners:
* North Penn FCU, Colmar, less than $20 million in assets; * CTCE FCU, Reading, $20 million to $100 million; * Riverset CU, Pittsburgh, more than $100 million;
Credit Union Website first-place awards were given to:
* Keystone United Methodist FCU, Cranberry Township, less than $20 million; * Hershey (Pa.) FCU, $20 million to $100 million; * Discovery FCU, Reading, more than $100 million.

Wis. league Out-of-state group behind CU conversion bill

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PEWAUKEE, Wis. (5/19/11)--State legislation to make it easier to convert Wisconsin credit union charters to bank charters is being supported by an out-of-state group dedicated to eliminating competition for for-profit banks, said the Wisconsin Credit Union League. The proposal appears as a budget amendment and the league has called on Gov. Scott Walker to veto the proposal when the budget bill hits his desk (News Now May 16). In a press release on WisPolitics.com (May 17), the league noted that "one way to tell a piece of proposed legislation is suspect is when it's introduced at the last minute, under cover of darkness, and without notice to any of the people who will be affected by it." The legislation is supported by the Coalition for Credit Union Charter Options (CCUCO). "The group's claim that it's somehow better for Wisconsin credit unions to have faster, easier path to becoming a bank is irresponsible and misleading," said Brett Thompson, league president/CEO. "This effort to eliminate credit unions under the guise of greater operational flexibility is being driven by the banking industry, which has been trying for decades to legislate, regulate and litigate credit unions out of business," Thompson added. "Especially disingenuous is the group's claim that if a credit union becomes a bank it could make more loans, accept more deposits, and open more branches," he noted. "Never in history have banks been in favor of credit unions making more loans, accepting more deposits and opening more branches. In fact, they've sued credit unions and lobbied Congress and the state legislature to keep them from doing just that," he said. "This legislation has nothing to do with serving the public. It's about just the opposite--quelling competition so banks can make even more money." The group's statement that credit unions that convert would help the state by paying more in taxes is "equally misleading," Thompson said. "The annual member benefits that credit unions deliver to Wisconsin citizens outweigh the potential tax revenue," he emphasized. Last year, credit unions returned nearly $203 million to members in the state in the form of better rates and fewer and lower fees than banks. "This legislation is really about bankers looking for a way to make even bigger bank profits," Thompson said. "Public policy should protect credit union members' right to determine the future of the financial institutions they own. Passing legislation--secretly, without public notice, debate or hearing--that makes it easier to turn the equity of Wisconsin's 2.2 million credit union members into additional riches for a few bank shareholders cannot in any way be considered in the public interest," Thompson said.