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Irish league CUs will overcome challenges

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BELFAST (5/3/11)--Ireland's credit union movement cannot be immune from the financial crisis affecting that country, but it can meet and overcome that challenge, the president of the Irish League of Credit Unions told 1,200 credit union delegates attending the league's annual meeting last weekend in Belfast. The credit union sector would come through whatever exposure it faced in bad loans and other difficulties, league President Mark Bailey said, adding that the movement will be safer, stronger and more secure for all credit union members as a result of the challenge (The Irish Times May 2). Ireland has 498 credit union serving 2.98 million members, including 40,000 new members who joined in the past year. Credit unions have US$17.8 billion in savings, and US$8.9 billion in loans and an equal amount available to loan, Bailey said. He noted 12 credit unions have been assisted by the movement's Savings Protection Scheme (SPS), a movement-owned share deposit insurance fund. When credit unions have received SPS funds in the past, they have traded out of their difficulties, said Bailey. Also speaking was Sinn Fein Deputy First Minister Martin McGuinness, who said that credit unions were absolutely vital and would weather the storms. Credit unions can always be depended upon to be there at times of adversity, he said in an interview after his speech, adding that the world recession and economic circumstances mean that people will be even more dependent on credit unions. Earlier last week the league confirmed that it is in talks with the Central Bank about introducing a statutory resolution plan for the credit union sector that will ensure and support the future of credit unions (The Irish Times April 29) .

Missouri CUs lent a hand after April 22 tornadoes

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ST. LOUIS (5/3/11)--Missouri credit unions helped the state and its residents get back on their feet after a series of tornadoes touched down in the state April 22. An F4-rated tornado swept through St. Louis, leaving in its path a swath of destruction for miles, according to the Missouri Credit Union Association (MCUA). Missouri credit unions in the way of the half-mile wide twister were mostly unharmed (The Missouri difference April 29). Missouri credit unions holding events to help with the aftermath of the tornados include:
* First Community CU, Chesterfield, held a dress-down day Friday and will match all employee donations for tornado relief. To date, the amount to be donated is $4,000. * A loan sale is on the books at 1st Financial FCU, Wentzville, where members affected by the storm can apply for a 90-day no interest loan. * Neighbors CU, St. Louis, is offering assistance also. It established an Emergency Relief Loan for victims. Neighbors will donate $25 to the St. Louis Chapter of the Red Cross for every new checking account with direct deposit opened at the credit union from April 28 through May 15.
Some tornado damage reports include:
* At Vantage CU, Bridgeton, the tornado hit the building across the street, skipped over the credit union and hit the hotel just behind it. Damage to Vantage was minor. Vantage has implemented a loan special to help members finance repairs to damaged property. Vantage employees grilled lunch--hamburgers and brats--for Bridgeton police, firemen and city workers, during the recovery efforts. * At the American Airlines CU branch located just above the security area heading into Concourse C at Lambert Airport in St. Louis, Airport Manager Lindsey Beadsley’s office was smashed up with broken windows and things knocked around. No one was hurt. * CommunityAmerica CU’s branch on the Lambert Airport campus received only minor exterior damage and was closed on Saturday. Buildings directly across the road from the credit union were demolished in the storm. * In southeast Missouri, more than six inches of rain fell on Poplar Bluff, bringing the four-day total in the area to 15 inches and causing the Black River to pour over the levee in 30 places. “Poplar Bluff (Mo.) FCU is built on ground high enough that there is no impact to the credit union,” Kirk Mondy, Poplar Bluff president/CEO, told MCUA. “What has been amazing to see is how social networking like Facebook has made it easy to communicate the needs within the community. From donations of food and toiletries to help walking dogs, the community has been out in-force because of postings on Facebook.” * At Cape Regional CU, Cape Girardeau, the credit union had three inches of water in the basement. “We’ve been very lucky,” said Cape Regional President Jim Cauble. “The three sump pumps we have just couldn’t keep up with the incoming water.”

Savings grow loan-to-savings ratio lowest since 1994

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MADISON, Wis. (5/3/11)--Credit unions savings continue to grow at a fast pace, while credit union loan balances still are declining, leading to the lowest loan-to-savings ratio since 1994, according to a Credit Union National Association (CUNA) economist’s analysis of March’s monthly estimates of credit unions.
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Credit union savings balances grew 1.3% in March, compared with a 1.8% increase during February. Regular shares led savings growth, rising 3.6%, followed by money market accounts (1.4%) and share drafts (1.2%). Individual retirement accounts grew 0.7%, while one-year certificates fell by 0.8%. “Savings growth continues at a relatively fast pace,” Mike Schenk, CUNA vice president of economics and statistics, told News Now. “Growth in credit unions’ savings accounts was 1.3% in March and nearly 3% in the first quarter. Short-term liquid accounts are growing quickly while balances and certificate accounts declined.” Credit union loans outstanding decreased 0.1% during March, compared with a 0.4% decline in February. Adjustable-rate mortgages grew 1.9% and fixed-rate mortgages increased 0.5%. Used-auto loans increased 0.5%, followed by credit card loans and home equity loans, which fell 0.7% and 0.8% respectively. New-auto loans dropped 0.6% and unsecured personal loans declined 1.3%.
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“Overall, loan balances continue to decline,” Schenk said, “though the ratio of decline eased from the prior month and from year-ago results. Loan balances declined 0.1% in March, and 1.1% in the first quarter. Loans dropped by 0.4% in February and by 1.4% in the first quarter of 2010. “Because savings growth continues to outpace loan growth, the loan-to-savings ratio once again declined--from 70.4% in February to 69.4% in March,” he continued. “This is the lowest reading since 1994. Interestingly, even though loan balances were declining, the delinquency ratio once again fell--from 1.67% in February to 1.60% in March. And this is the lowest reading since June 2009. “It’s important to remember that the first quarter is generally a quarter of relatively fast savings growth and slow loan growth,” Schenk said. “Loans should begin to grow in the coming months due to a combination of an expectation of stronger seasonal growth patterns, improving job markets, income gains--and resulting increases in consumer confidence.” Concerning asset quality, credit unions’ 60-plus-day delinquencies fell slightly to 1.6% during March 2011. The loan-to-savings ratio dropped to 69% in March from 70% in February. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 19%. The movement’s overall capital-to-asset ratio remained at 10% in March. The total dollar amount of capital is $94 billion.

Online Resources announces verdict in former CEOs suit

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CHANTILLY, Va. (5/3/11)--A civil court jury in Fairfax County, Va., has awarded former Online Resources Corp. Chairman/CEO Matthew P. Lawlor $5.3 million in damages in a wrongful termination lawsuit against the company. The jury rejected his claim that he had been wrongfully terminated but found in his favor on other claims. Lawlor had sought $15.9 million in damages plus pre-judgement interest from the date of his separation in February 2010 from the Chantilly, Va., based Online Resources Corp. Online Resources provides Internet banking and bill payment services for credit unions. The verdict was announced on April 22 in the Circuit Court of Fairfax County, Va., said a press release from Online Resources. A deadline has not been set yet for the argument of post-trial motions or an appeal by the company. "We are very disappointed in this verdict and we intend to aggressively pursue all available avenues to have this verdict overturned or set aside," said John C. Dorman, chairman of Online Resources' board of directors. The company said it would reserve for and disclose the potential liability in its first quarter financial statements and public filings. To give the company time to prepare and review the information, it is postponing its first quarter earnings release to May 10. However, it said revenue for first quarter is expected to be about $39.3 million. Before considering any reserve it may take for potential legal liability, its adjusted Ebitda and Ebitda are expected to be about $6.2 million and $5.4 million. Management will conduct a conference call on first quarter results at 5 p.m. ET on May 10. The conference dial-in number is 877-303-6496 for domestic participants. A live webcast of the call will be available in the "investors" section of the company's website at

CUs Gen Y contests are lesson for banks says CACR

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MADISON, Wis. (5/3/11)--Credit unions, providing a lesson that banks could learn, are increasingly using a combination of online contests and social media to hire spokespeople who are young and media-savvy, according to a Sunday article in Collections and Credit Risk (CACR). As part of the Young & Free Campaign, launched in 2007 by Currency Marketing, a credit union marketing company in Chilliwack, Canada, the company provides credit unions the tools to engage the youth market, the publication said. The key to the spokespeople’s success is using the Internet to build a community that still is mostly local. Faced with aging members, credit unions needed a method of staying relevant and garnering a new base of young members, CACR said. To date, nine credit unions have participated in Young & Free, with many saying they have doubled their Gen-Y membership year-over-year. Only one credit union per state participates in the program, the article reported. Eleven percent of people in Generation Y have had a primary financial relationship with a credit union, compared with 15% of all other ages, according to an August 2010 survey by Javelin Strategy and Research. By contrast, 43% of Generation Y had a primary relationship with a top-10 bank, compared with 38% of all other consumers, CACR said. The article mentioned ORNL FCU Oak Ridge, Tenn.; Michigan First CU, Lathrup Village, Mich., and South Carolina FCU, North Charleston, S.C. Although credit unions may not have all the technology of the biggest banks to extend their reach, they have something those large banks do not, Mark Schwanhausser, a Javelin senior analyst, told CACR. Credit unions are nonprofit, and they have roots in an intensely local and specific community, he said.

NASA FCU offers no- or low-down-payment mortgages

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UPPER MARLBORO, Md. (5/3/11)--Saying it wants to offer mortgage products that fit its members’ needs, NASA FCU is offering no-money-down mortgages. NASA FCU is offering a 100% loan-to-value (LTV) mortgage with no private mortgage insurance (PMI) required for new home purchases up to $650,000. The mortgage products are available for a consumer's primary residence in Maryland, Washington D.C. and Virginia. Waiving the PMI requirement will save members hundreds or even thousands of dollars, according to NASA FCU. Also, for new home purchases in the $650,000 to $850,000 range, the credit union is offering a 95% LTV mortgage with 5% down payment is available as is a 90% refinance option for current homeowners. The loan products will be limited to highly qualified borrowers, which will offset the risk of making the no- and low-down payment loans, Bill White, NASA FCU vice president of mortgage lending, told the The Wall Street Journal May 2. White said home prices in the Washington, D.C., area have remained steady in comparison to other regions of the country.

Georgia United CU State Employees of Atlanta merge

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ATLANTA (5/3/11)--Georgia United CU, Duluth, Ga., has welcomed the State Employees CU of Atlanta in a strategic merger that has been in the works for more than a year. The merger became official Saturday after the end of the business day. Georgia United CU, formerly known as Georgia Federal, serves school system employees and more than 450 employee groups across the state, including the University of Georgia faculty, staff, student and alumni. State Employees CU is a 50-year-old credit union in downtown Atlanta whose members include all Georgia state agencies' employees and retirees. The partnership will unite two of the state's largest and strongest credit unions "to allow greater economies of scale and an expanded branch network," said Georgia United President/CEO Warren Butler. Georgia United has 13 branches and $655 million in assets. State Employees has three branches and $205 million in assets and 26,000 members. Both credit unions will share the Georgia United name. According to State Employees CU President/CEO Ken Merritt, the credit union's board had explored a partnership with another like-minded credit union to expand its service offerings and delivery channels to members. "Georgia United was our choice due to their commitment to service and value. All existing SECU branches will remain open," he said. Members will see the addition of Georgia United's products and services, especially certificates of deposit, credit cards and mobile banking. Ninety-two percent of State Employees CU's membership voting on Jan. 24 approved the proposal.

Mich. GAC panel Right time to step up biz lending

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LANSING, Mich. (5/3/11)--The slow market for business credit presents an opportunity for credit unions to offer member business lending, according to panelists speaking on “Economic Development Initiatives for a Stronger Michigan” at the Michigan Credit Union League’s Governmental Affairs Conference, April 26-27 (Michigan Monitor May 2).
Bill Beardsley, right, moderator of “Economic Development Initiatives” at the Michigan Credit Union League’s Governmental Affairs Conference, introduces panelists, from left, Eric Hanna, Michigan Economic Development Corp.; Tom Donaldson of the Small Business and Technology Development Center; and Al Cook of the U.S. Small Business Administration’s Detroit office. (Photo provided by Michigan Credit Union League)
Big banks may not begin lending again for two or three years, said Eric Hanna, capital markets development associate for the Michigan Economic Development Corp. “There’s a tremendous opportunity for credit unions to step into the breach,” Hanna said, but he added the window could be short because when banks do start lending, they will aggressively pursue volume. The shift toward lending by smaller lenders has already taken place, according to Al Cook, deputy district director for the U.S. Small Business Administration's (SBA) Detroit office. Cook said that even though the SBA has raised the cap on small business loans to $5 million, most of the loans it does still fall under the old $2 million cap. “The shift I’ve seen is from big lenders to small lenders,” Cook said. He added that the SBA prefers to work with lenders who know the local market. Credit union leaders should make sure proposed deals fit within their business model, said Tom Donaldson, regional director for the Small Business and Technology Development Center. “Ultimately, we want to refer deals that you want to do,” Donaldson said. Credit unions seem ready to fill the business credit void in their local communities, according to Bill Beardsley, moderator of the panel and president of the Michigan Business Connection. “I’m excited about working with a group of credit unions because they really put their money where their mission is,” Beardsley said. The Credit Union National Association (CUNA) has estimated that the MBL cap lift could provide up to $13 billion to small businesses in the first year alone and create over 140,000 new jobs, at no cost to taxpayers.

iNews Nowsi Top 10 stories for April

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News Now’s Top 10 stories for April MADISON, Wis. (5/3/11)--An article about how credit unions would serve their members during a possible federal shutdown was the top News Now story in April, with articles about debit interchange issues dominating the rest of the top 10. 10. Interchange delay bill: Co-sponsor list growing WASHINGTON (4/4/11)--The ranks of House interchange delay supporters grew to 64 late last week, and support for an examination of interchange fee cap legislation is growing as the July 21 effective date comes ever nearer. 9. Frank’s call for interchange delay ‘significant,’ says CUNA. WASHINGTON (4/6/11)--Rep. Barney Frank's comments in support of a delay of the Federal Reserve's debit card interchange fee rule are "extremely welcome and helpful," said CUNA Senior Vice President of Legislative Affairs John Magill, and their importance "cannot be overstated." 8. Five cost-effective ways to thwart robberies INDIANAPOLIS (4/7/11)--The lingering recession has some individuals looking for new ways to make money, and a few venture down the wrong path, taking desperate measures such as robbing credit unions and banks. 7. Texans CU, Vensure FCU placed into conservatorship ALEXANDRIA, Va. (4/18/11)--The National Credit Union Administration (NCUA) on Friday placed Mesa, Ariz.'s Vensure FCU and Texans CU of Richardson, Texas, into conservatorship. 6. CUNA plans national interchange teleconference WASHINGTON (4/11/11)--Interchange continues to be the issue of the moment for many credit unions, and the Credit Union National Association (CUNA) will give credit unions the latest developments on the interchange issue plus guidance on how to mobilize their members during an April 13 national teleconference. 5. NCUA makes key changes to final corporate CU rule ALEXANDRIA, Va. (4/22/11)--The National Credit Union Administration (NCUA) on Thursday approved a final corporate credit union rule that alters some corporate internal control and reporting requirements, but made some key changes from its original proposal. 4. Banks still hide fees from consumers, says U.S.PIRG WASHINGTON (4/21/11)--Banks are still hiding their fees from consumers, even the fees mandated by the Truth in Savings Act, says a new study by U.S. Public Interest Research Group (U.S. PIRG). That's why one of the study's key recommendations is to “bank at a credit union, not a bank.” 3. PULSE: Issuers expect 73% drop in interchange revenue HOUSTON (4/27/11)--Small debit card issuers such as credit unions and community banks on average expect a 73% decrease in debit interchange revenue as a result of pending interchange fee rules, according to the 2011 Debit Issuer Study commissioned by PULSE, an electronic funds network. 2. Compliance: Credit reporting changes coming WASHINGTON (4/14/11)--The July implementation deadline for many portions of the Dodd-Frank Act is approaching, and many credit unions still have questions regarding how the new Dodd-Frank rules will impact their practices. 1. Federal shutdown: CUs stand ready to assist members. MADISON, Wis. (4/8/11)--Credit unions nationwide are preparing to serve members with urgent financial needs in the event of a federal government shutdown at midnight ET today.

Siouxland FCUs gas cards a hit at the pump

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SOUTH SIOUX CITY, Neb. (5/3/11)--A Nebraska credit union's "give back" to the community campaign turned out to be popular Friday when it was coupled with these magic words: "Free Gas." Siouxland FCU 's latest give-back effort provided $3,000 worth of $20 gas cards at Kum and Go' pumps in Sioux City. Twenty dollars in free fuel went to the first 150 drivers stopping by the gas station. Most were surprised to get the $20 off, and some said they were excited about it. Troy Bloch, marketing director of the $138 million asset, South Sioux City-based credit union, told KMEG14 that with gas prices at $4 a gallon, the credit union thought that people would really respond to the free gas. According to the television station, "Friday's event was a huge success. All of the free gas was guzzled up in about half an hour. " To see videos of the run on the pumps and more information about Siouxland FCU's give-back campaign, use the links.

CU System briefs (05/02/2011)

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* ALBANY, N.Y. (5/3/11)--New York credit unions and the Credit Union Association of N.Y. took advantage of congressional representatives' visits back to their district recently to pay a visit to first-term U.S. Rep. Chris Gibson (R-20) at his Saratoga Springs office. The group discussed debit interchange and increasing the member business lending cap. Gibson assured the group he is concerned about possible implications of interchange and is research the issue in depth. He asked credit unions in his district to "stay tuned" for action on the issue. From left are: Edward Gilligan, Capital Communications FCU; Linda MacFarlane, Columbia Greene FCU; Paula Stopera, Capital Communications FCU; CUANY President/CEO William J. Mellin; and Gibson. (Photo provided by the Credit Union Association of New York) … * ST. LOUIS (5/3/11)--Missouri credit unions continued efforts to discuss debit interchange with members of Congress during a recent recess. U.S. Rep. Emanuel Cleaver (D-5) heard about the issue from Pat Yokely, CommunityAmerica CU, during his town hall meeting in Kansas City April 23. Rob Givens of Mazuma CU met with him at a Small Business Administration ceremony April 23 and at a fundraiser on April 17. Carol White (left), president/CEO of Central Missouri Community CU, discussed the issue with U.S. Rep. Vicky Hartzler (right) (R-4) at a Chamber of Commerce reception April 25. Hartzler had four meetings last week with other credit unions also. Credit union advocates also took part in U.S. Rep. Russ Carnahan's (D-3) town hall meeting April 28 in St. Louis. And Missouri Credit Union Association Chief Advocacy Officer Peggy Nalls discussed interchange with U.S. Rep. Lacy Clay (D-1) in Jefferson City April 27. (Photo provided by the Missouri Credit Union Association) … * NASHVILLE, Tenn. (5/3/11)--US Community CU, based in Nashville, Tenn., will open a student-run branch in the fall at Nashville's McGavock High School to provide students real world training in the financial services industry. Students will operate the credit union in the school's hospitality and finance academy in the main hallway for other students and faculty. Ten students have been selected as tellers; they will work during four lunch periods. The credit union will spend $100,000 to renovate the space (The Tennessean via The Republic May 2) … * WISCONSIN RAPIDS, Wis. (5/3/11)--Another phone scam has targeted Bull's Eye CU, based in Wisconsin Rapids, Wis. Members and nonmembers are receiving automated calls seeking personal financial information that could be used in identity theft fraud. President Dave Stark urged recipients not to respond to the scams. The randomly generated calls are not from the credit union and no member information has been compromised, he said in a press release ( April 29) …