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Members United Corporate adds OTTIs in April

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WARRENVILLE, Ill. (5/20/10)--Members United Corporate FCU's unaudited financial statements as of April 30 have been announced, along with year-end 2009 audited financials, with additional other-than-temporary-impairment (OTTI) charges depleting membership capital shares (MCS) by 96.9%. Members United's assets totaled $9.5 billion as of April 30, with $4.1 billion of that held in cash and cash equivalents and overnight deposits with U.S. Central FCU, $3.5 billion in marketable securities, $0.7 billion in loans to members, $1.1 billion in term deposits at U.S. Central, and $0.1 billion in accrued income and other assets, according to the financial statements on the corporate's website. The corporate credit union recorded $116.9 million of OTTI charges during December 2009. This included a $87.1 million charge for monoline insurance exposure through Wisconsin-based Ambac. In addition, Members United recorded another $21 million in OTTI charges in April. The OTTI was partially offset by core earnings of $1.6 million rolled forward since Nov. 30, 2009. As a result, Members United has a retained deficit totaling $129.9 million, requiring it to deplete MCS in accordance with the National Credit Union Administration's rules. Capital remaining after depletion is $145 million, which includes $11.1 million of amortized shares representing capital that is placed on notice but has not met the three-year notice period of withdrawal. These shares are available to cover losses and replenish retained earnings and will be subject to depletion action on May 28. Total depletion as a percentage of beginning MCS is 96.9%, said the financial statement.

Big banks fill out hall of shame on MSN.com survey

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NEW YORK (5/20/10)--As if big banks didn't have enough to hang their head in shame about these days, yet another customer survey indicates that banks are at the bottom of the heap in customer service, according to MoneyCentral on MSN.com. MSN Money's fourth annual customer-service survey, conducted by Zogby International, identified 150 customer-facing industries, from fast food chains to financial services companies, and asked customers about their experiences with the companies. Half of the bottom 10 companies relegated to the "2010 Customer Service Hall of Shame" are banks, credit card servicers or both. The rest are telecommunications and cable companies. "There's one place that people clearly aren't feeling the love: at the big banks," said MSN Money on its website. "Of the 20 companies at the bottom of our customer-service ranking, nine sell financial services." The worst customer service was rendered by:
* AOL, with 42.3% of respondents saying service was poor; * Bank of America, with 34.6%; * Comcast, 34%; * Sprint Nextel, 32.7%; * Capital One, with 31.3%; * Dish Network, 31.2%; * Time Warner Cable, 31.1%; * Wells Fargo, 28.3%; * Citibank, 28.3%; and * HSBC, 28.1%.
All of the banks on the list are repeat Hall of Shamers. Bank of America, which has been on the list all four years of the survey, received its worst rating yet. Capital One's rating improved; last year 34.7% rated it poor, compared to this year's 31.3%. The 2010 rank is its third appearance on the Hall of Shame. Wells Fargo made the list in 2007, when 21% of those surveyed said its service was poor. Citibank was also on the list last year, when 28.4% of respondents rated its service as poor. HSBC, in the No. 10 spot, appeared on the list for a third year. None of the Top 10 companies for customer service--called the Hall of Fame--were financial institutions. For more, use the resource link.

CUNA Mutual flood response pause on non-renewals cancellations

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MADISON, Wis. (5/20/10)--In response to widespread flooding in Tennessee, CUNA Mutual Group has implemented a moratorium for policyholders there on company-initiated cancellations and non-renewals of any in-force insurance policies due to non-payment of premium. “People are enduring severe hardships due to the record-setting floods in Tennessee. CUNA Mutual will stand by its credit union customers and help them through this disaster,” said Jeff Post, president/CEO of CUNA Mutual. The moratorium is in place for a minimum of 90 days. It applies to all policyholders of in-force policies underwritten by CUNA Mutual in Tennessee. Policyholders statewide--not just those located within federally declared disaster areas--are covered by the moratorium, said CUNA Mutual. CUNA Mutual is waiving all penalties and fees for the late payment of premiums during the moratorium. It has imposed a minimum 90-day grace period for other provisions within the covered policyholders’ insurance policy that impose specific time limits on the insured or claimants and that would otherwise expire during the moratorium period. “It has always been CUNA Mutual’s policy to step forward and provide aid to our customers in the face of natural disaster," said Alastair Shore, chief underwriter at CUNA Mutual. "People have been displaced from their homes and their jobs by this flooding. Some have even lost family members or friends. As a company built on the principles of cooperation, we’re committed to helping our customers get their lives back." CUNA Mutual said it reserves the right to cancel or non-renew policies for causes other than nonpayment of premium. New policies will be required to pay premium at inception, or as otherwise required. Policyholders with questions about how the moratorium applies to them, or other questions relating to the moratorium announcement, can contact CUNA Mutual toll-free at 800-637-2676. More information on the company is available on the company’s website. Also, the state of Tennessee has provided information for Tennessee residents, including: FEMA, at 800-621-FEMA or www.fema.gov, or visit www.disasterassistance.gov, and the Division of Insurance, at 800-342-4029 or e-mail CIS.complaints@tn.gov.

CU first in U.S. to plan Europe-style smart card

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NEW YORK (5/20/10)--United Nations FCU in New York City is the first U.S. financial institution to announce plans to issue credit cards that comply with the Europay MasterCard Visa (EMV) smart card standard. The $3.09 billion-asset credit union’s new Platinum Visa EMV cards will be issued to roughly 5,000 of its high-value members and can be used anywhere EMV cards are accepted (Bloomberg Businessweek May 19). Cards based on the EMV standard use an embedded microprocessor instead of a magnetic strip to store cardholder data and information necessary to use the card for a transaction. Many financial institutions that issue the EMV chip card also require cardholders to enter a personal identification number as an extra security measure when they use the card, Bloomberg said. Although credit cards that use smartcard technology have been prevalent worldwide for several years, that is not the case in the U.S., where financial institutions have continued using cards based on less secure magnetic strip technology, Bloomberg said.

Roundup Media report CUs MBLs checking cards

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MADISON, Wis. (5/20/10)--Several recent media reports say credit unions are where consumers should go for small-business lending, credit cards for college students and free checking. The reports included:
* An op-ed column in the Toledo Blade Tuesday about member business lending written by Beth Carpenter, president of the Northwest Chapter of the Ohio Credit Union League. To address the lack of credit available to small businesses in Ohio, Carpenter said lawmakers in Washington, D.C., should pass legislation that would increase the lending authority of credit unions. “Credit unions are well-capitalized, not-for-profit financial cooperatives that have withstood difficult financial times because of smart stewardship and responsible lending,” said Carpenter. “Best of all, they have money to lend.” * A CBS MoneyWatch Web story Tuesday about credit card options for college students that tells students: “As a young adult opening up a credit card for the first time, you may want to scour the offers from your local credit union first. Credit unions generally offer the lowest annual percentage rates on credit cards. They’re also known for above-average customer service. If you want one-on-one help where they will remember your name, a credit union is the place to go.” The article also contains a link to the Credit Union National Association’s Credit Union Locator. * An AOL.WalletPop.com article Tuesday that told readers who want to open a new bank account and obtain free checking to look at Bankrate.com’s new survey of credit unions (use the link to view a News Now article about the survey) to see which credit unions offer free checking. “Of the 50 largest credit unions in the country, 39 of them have free checking,” the article said.
To read the articles, use the links.

PCUA awards honor McCormack others

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HARRISBURG, Pa. (5/20/10)--The Pennsylvania Credit Union Association (PCUA) handed out its most prestigious awards during its 76th Annual Convention held Sunday through Tuesday in Harrisburg.
Click to view larger image Pennsylvania Credit Union Association (PCUA) President/CEO Jim McCormack, left, receives the Keystone Award from PCUA Chairman Ray Brunner, CEO, WEST-AIRCOMM FCU, Beaver, Pa. (Photo provided by the Pennsylvania Credit Union Association)
Hundreds of conferees statewide attended the convention, which featured a keynote address by National Credit Union Administration Chairman Debbie Matz and other educational sessions. Individuals honored are:
* Jim McCormack, PCUA president/CEO, who received the Keystone Award for exemplary commitment to the credit union movement. * Peggy Bosma-LaMascus, president/CEO, Patriot FCU, Chambersburg, who received the William W. Pratt Award for Outstanding Professional of the Year. * Paul Nyman, board director, Horizon FCU, Williamsport, who received the Joseph A. Moore Award for Outstanding Volunteer of the Year. * The late John Marisic, former vice chairman, Pennsylvania State Employees CU, Harrisburg, who was presented the Joseph A. Moore Award for Outstanding Volunteer of the Year.
The new 2010 Credit Union Youth Ambassador of Pennsylvania is Amber Renick, 23, representing the York Chapter of Credit Unions. She is employed at First Capital FCU, York. As Youth Ambassador, Renick will promote credit union youth activities and serve as a PCUA representative during events and meetings. Also, Amanda Eckert of the Harrisburg Chapter of Credit Unions and Members 1st FCU, Mechanicsburg, was named first alternate; and Amy Swonger, representing the Erie Chapter of Credit Unions and Meadville (Pa.) Area FCU, was named second alternate. A number of awards were presented to credit unions in recognition of their work within their communities. The Desjardins Youth Financial Education Awards were presented to:
* Keystone FCU, Downingtown, $50 million to $150 million in assets category; * AmeriChoice FCU, Mechanicsburg, $50 to $150 million; and * TruMark Financial CU, Trevose, more than $500 million.
The Louise Herring Awards for Philosophy in Action were presented to:
* Superior CU, Collegeville, less than $50 million in assets; * Erie General Electric FCU, Erie, $50 to $250 million; and * TruMark Financial CU, more than $250 million.
The Dora Maxwell Awards for Social Responsibility were awarded to:
* Greater Pittsburgh Police FCU, $20 million to $50 million in assets; * MEADVILLE (Pa.) FCU, $50 to $100 million; * Cross Valley FCU, Wilkes-Barre, $100 to $200 million; * Erie (Pa.) Federal CU, $200 to $500 million; and * American Heritage FCU, Philadelphia, more than $500 million.

MBLs top Illinois CUs dialogue with Rep. Halvorson

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NAPERVILLE, Ill. (5/20/10)--Member business loans (MBLs) were the top issue under discussion when Legislative Forum Representatives (LFR) from Illinois met in an open dialogue with U.S. Rep. Debbie Halvorson (D-Ill.) this week.
Click to view larger image Representatives from the Illinois Credit Union League and state credit unions recently met with U.S. Rep. Debbie Halvorson (D-Ill.) at NuMark CU. From left, are: Michelle Balog, executive vice president and David Harris, volunteer director, both of NuMark CU; Halvorson; and, from NuMark, Ann Dubie, CEO; Bill Tierney, director of commercial and residential services and Will County Chapter of Credit Unions legislative forum representative; and Linda Sachaschik, human resources manager. (Photo provided by the Illinois Credit Union League)
The meeting was hosted by NuMark CU in Crest Hill, Ill., and moderated by Bill Tierney, Will County Chapter of Credit Unions LFR and director of commercial and residential services at NuMark. More than 20 credit union executives, volunteers, LFRs and individuals from the Illinois Credit Union League (ICUL) and four league chapters--Bloomington, Kankakee Valley, Tri-County and Will County--attended. Halvorson said the lack of available small business loans is the No. 1 complaint from small business owners in her district. Ann Dubie, CEO of NuMark, said: “Many of our members are small business owners. The current limitations on MBLs restrict our ability to serve them as their primary financial institution. By increasing the asset cap from 12.25% to 25% and raising the MBL exception dollar amount from $50,000 to $250,000, we will be able to fully serve their needs.” The group also discussed interchange fees, regulatory reform, courtesy pay and overdraft protection. “Rep. Halvorson has always been a tireless worker and very supportive of credit union legislative and regulatory issues in Illinois, and in fact, holds a perfect voting record with us,” said Don Edwards, ICUL senior vice president of federal government affairs. “The perspective she brings to the table helps credit unions not only here, but also across the country, and we appreciated the ‘open door’ policy and dialogue session.”

Corporate One announces new board officers

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COLUMBUS, Ohio (5/20/10)--Corporate One FCU, Columbus, Ohio, elected three members to its board for three-year terms during its annual meeting in late April. Board members are:
* Sonja Delaney, president/CEO, Midwest Community FCU, Defiance, Ohio; * Charles Plassenthal, CEO/manager, Dayton (Ohio) Firefighters FCU; and * John Shirilla, president/CEO, Best Reward CU, Walton Hills, Ohio.
Delaney, who will serve her first term as a board member, also is as a trustee and treasurer for the Ohio Credit Union Foundation. Plassenthal will serve his third term, and Shirilla will serve his fourth term on the corporate’s board. Plassenthal previously served as a director of the Ohio Credit Union League. In a reorganization meeting after the annual meeting, Corporate One also elected Gerald D. Guy, president/CEO of Kemba Financial CU, Columbus, as chairman, and Janice L. Thomas, president of PSE CU in Parma, Ohio, as vice chairman. Corporate One FCU has more than $5.1 billion in assets and serves nearly 800 credit unions.

Filene reports on financial firestorm

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MADISON, Wis. (5/20/10)--The Filene Research Institution’s most recent publication, “Withstanding a Financial Firestorm: Credit Unions vs. Banks,” examines how the recession affects credit unions and banks. The report found a quantifiable correlation between unemployment and bank lending--with each percentage point rise in unemployment, bank lending growth dropped 1.15%. At credit unions, there was no statistically verifiable decrease, Filene said.

Withstanding a Financial Firestorm: Credit Unions vs. Banks

Other points the paper noted:
* The magnitude of delinquencies and charge-offs at banks is more pronounced than at credit unions; * Because credit unions are about 75% as sensitive to macroeconomic shocks as banks are, regulators should consider imposing lower capital requirements to account for the lower risk; and * More open charters do not seem to have made credit unions more risky. Despite gradual moves away from closed charters after the passage of the National Credit Union Membership Access Act, credit unions have retained conservative portfolio strategies.
The publication was written by David M. Smith, Ph.D, and associate professor of economics at Pepperdine University, and Stephen A. Woodbury, Ph.D., professor of economics at Michigan State University.

CU System briefs (05/19/2010)

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* ST. LOUIS (5/20/10)--June 26 is the date that the Missouri Credit Union Association (MCUA) and Homes for Our Troops (HFOT) will hand
Click to view larger image Click for larger view
over to Staff Sergeant Robert Canine, a severely wounded veteran, the keys to his new home. Missouri credit unions reached their $100,000 fundraising goal, which covers the cost of building the specially adapted home. Credit unions will be landscaping the property on June 19 (The Missouri difference May 19). MCUA pledged to build a second specially adapted home in Missouri, and HFOT is searching for another veteran. SSG Canine, an avid St. Louis Cardinals fan, is shown here with his family and credit union representatives at a Cardinals warm-up Monday. Anheuser-Busch Employees' CU arranged the event. The group spent time on the field and met the players. After the game, the group met former Cardinals player and radio sportscaster Mike Shannon and Al Hrabosky, former Cardinals player and FSN Midwest broadcaster. (Photo provided by Missouri Credit Union Association) ... * MANSFIELD, Ohio (5/20/10)--GR Ohio Community CU, formerly Gorman-Rupp & Associates CU, based in Mansfield, Ohio, has donated bulletproof glass to the Richland County Clerk of Courts office to help protect the office's employees. The 20-foot piece of glass will replace an interior, weaker glass barrier. The glass is worth between $5,000 and $7,000. Installation by county staff will cost about $3,000 (News Journal May 15) ...