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Op-ed CU would lose 600K a year on interchange

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SANTA CLARA, Calif. (5/23/11)--In an editorial published in the San Jose Mercury News, the president/CEO of KeyPoint CU said his credit union stands to lose $600,000 a year if the proposed interchange rule is implemented. “Credit unions like mine will lose a big chunk of income that we depend on to give consumers lower rates and free services,” wrote Tim Kramer in the editorial, published Thursday. “So if the rules are implemented by the Fed, my institution is looking at potential losses of roughly $600,000 a year. That’s small change for Wal-Mart, but big money for us.” The losses may force KeyPoint to eliminate reward programs, to begin charging for checking accounts and to impose fees on debit cards, Kramer said. The possibility of these changes give Kramer reason to worry about the future of his credit union, he wrote, because he will no longer be able to offer members the services they expect from a community financial institution. The proposed debit card interchange fee cap of seven cents to 12 cents, down from a current average charge of 44 cents, is 70% to 90% below market rates, Kramer said. “Remember, this expense is for merchants, not consumers,” he wrote. “When you use your debit card to make a purchase, the consumer pays nothing for that convenience. The merchant pays a small fee that helps cover the cost of services like issuing the card, processing transactions and protecting consumers from fraud.” The recent breach of Sony data is an example of the expense fraud can create, Kramer wrote. Credit unions and community banks will end up spending millions reissuing cards as a result of the incident. He noted that 275 of the largest employers in the San Francisco-Silicon Valley region sent a letter to Sen. Dianne Feinstein (D-Calif.) in support of delay and study of the proposal. The group also asked consumers to e-mail and call the state’s congressional delegation to support The Debit Interchange Free Study Act, which would temporarily delay the rules. 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. To read the complete editorial, use the link.

McGrail named Carolinas foundation CEO

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GREENSBORO, N.C. (5/23/11)--John McGrail has been named the new president/CEO of the Carolinas Credit Union Foundation (CCUF). He has 22 years of experience in the credit union industry. For the past 11 years he has served as president/CEO of Lion’s Share FCU in Salisbury, N.C. McGrail has served on the North Carolina Credit Union League board of directors since 2005. He is also a member of the supervisory committee for First Carolina Corporate CU. “John has demonstrated himself to be a talented leader with excellent interpersonal skills and a passion for our industry,” CCUF Chairman John Carlson said. “He brings to the foundation a new vision and a sense of excitement for credit unions’ futures.”

Maine league opposes bill attacking first liens

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PORTLAND, Maine (5/23/11)--The Maine Credit Union League is opposing a third bill in state legislature that seeks to give certain assessments or liens priority over first mortgage liens. The league issued a statewide call to action against the latest bill, L.D. 1332, which would amend the Maine Condominium Act to allow a six-month condo assessment lien to take priority over first-mortgage liens (Weekly Update May 20). Earlier in the month the state's Judiciary Committee voted 9-4 to pass the bill, but the "league is working hard to get the necessary votes to defeat the bill when it is debated on the House floor," likely within the next week or so, said the league. It is asking credit unions in the state to "communicate their opposition to this bill," said League President John Murphy in the newsletter. The other bills, dealing with P.A.C.E. and with child support, were defeated earlier. The league said its position "remains that nothing and no one should take priority over the first lien holders."

Southeastern CU Foundation donates 25K for Alabama relief

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BIRMINGHAM, Ala. (5/23/11)--The Southeastern Credit Union Foundation (SECUF) presented the American Red Cross of Alabama with a check for $25,000 Wednesday in Birmingham to assist the organization with relief efforts stemming from last month's tornadoes.
Click to view larger image From left, Amber Tynan, Southeastern Credit Union Foundation (SECUF) executive director; James Tittle, American Red Cross deputy director of Alabama Tornadoes Disaster Relief Operations; and Joe McGee, chairman of SECUF, with a $25,000 check presented by the foundation to assist with relief efforts from last month's tornadoes. (Photo provided by the League of Southeastern Credit Unions
The foundation visited the Red Cross Operations Center to make the presentation. The Operations Center was a fitting place since the Red Cross uses the center to hand out assignments for workers, medical and mental health professionals, said the foundation. It’s also used to deploy vehicles and the distribution of its supplies. It takes a lot of money to run the Operations Center and large donations keep the operation running smoothly, said SECUF. “Our foundation has been working to help the needs of our credit union staff in Alabama,” said foundation Chairman Joe McGee. “However, the need is so great across the state that we felt we needed to also reach out and offer as much assistance as we could to the residents of Alabama. Donating to the Red Cross will ensure as many people as possible are helped by this contribution.” The SECUF also is continuing to assess the needs of credit union staff who have been affected by the storms. More than $30,000 in grants have been handed out to credit union staff, many of whom have lost everything. The foundation is still accepting donations to its Disaster Relief fund and encourages all credit unions to contribute to the National Credit Union Foundation’s CUAid fund, which the SECUF will match up to $100,000. Information on the Disaster Relief fund and CUAid can be found on the League of Southeastern Credit Unions website at www.lscu.coop or use the resource links.

Idaho league honors volunteer of the year

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BOISE, Idaho (5/23/11)--Joshua Holt of Beehive FCU has been named the Idaho Credit Union League’s Volunteer of the Year. The award was presented at the league’s 75th annual meeting. Holt has been a member of Rexburg-based Beehive FCU's board of directors for the past eight years. He has served as board chair since 2005. In addition to his leadership role at Beehive FCU, Holt volunteers with Kiwanis International, Boy Scouts of America and his church. Holt holds a doctorate in education with an emphasis in organizational learning and is a professor of business at Brigham Young University-Idaho. He is also the coordinator of the Integrated Business Corporation (IBC) on campus, teaching organizational behavior. In the IBC program, students learn what it is like to run a small business from the concept stage to start up. Student groups must run their business on campus for eight weeks. A donation of $250 will be made to the National Credit Union Foundation in Holt’s name, said the league.

Chicago CU uses grant for low-wealth car loans

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CHICAGO (5/23/11)--A $35,000 grant from the National Credit Union Foundation (NCUF) has helped North Side Community FCU, Chicago, offer affordable car loans to low-wealth individuals and families.
With the help of a grant from the National Credit Union Foundation, North Side Community FCU, Chicago, has expanded its used-auto lending program to provide more benefit to low-wealth members. North Side member Chiku Jallah stands next to her 2009 Kia Spectra, purchased through a loan made possible by the credit union’s risk-based auto-lending program. (Photo provided by the National Credit Union Foundation)
North Side Community FCU used the grant to expand its used-auto loan initiative, a sustainable program for low-wealth consumers historically untargeted by traditional community financial institutions. “The purchase of an affordable, quality used car has become more important as jobs become more decentralized,” said Lois Kitsch, NCUF national program director. “Programs like North Side Community FCU’s are essential to helping low-wealth families access the expanded job and housing opportunities that a car can help provide.” The core products and services of North Side Community FCU’s used-auto loan initiative include:
* Refinancing of subprime used-auto loans; * Risk-based auto lending; * Access to affordable used-auto loans to individuals who lack a conventional credit history; * Credit enhancements, including disability and job loss insurance; * Used-car buying seminars in partnership with select-employee groups (SEGs); and * An affordable and accessible menu of financial products and services.
“I wanted to finance with North Side Community FCU because I knew that with my lengthy history as a member, my good credit and their superb customer service, they would offer me a great interest rate with excellent service,” said Chiku Jallah, a credit union member since 200. Her first auto loan was under the credit union’s Access Auto Lending program. Her 2009 Kia Spectra was bought through North Side’s partner, Enterprise Car Sales. Throughout its history, North Side Community FCU has focused on helping low-wealth people build wealth through financial education and basic financial service products. More than half of the credit union’s members have balances of less than $100 in their savings accounts, and more than 75% have balances less than $250. For those with limited means, the only options for financial services are often predatory lenders. As a result North Side Community FCU developed its used-auto initiative to aid borrowers with limited options for obtaining financing due to a lack of conventional credit history. The NCUF report “How Credit Unions Help Car-Buyers Steer Clear of Predatory Loans” helped guide the credit union in developing the program. As of March, 24% of the auto loans underwritten through the program were refinanced auto loans from other lenders. One member improved his interest rate to 7.5% from 10.25%, saving nearly $1,000 in finance charges. Another member refinanced her auto loan to 10% from a 17%, reducing her monthly payment by $300 and freeing up additional funds to pay other debts. The Northside Community FCU has also been able to opened auto loan financing to a wider spectrum of borrowers, including those with low scores or with thin credit files that cannot be scored. The lowest borrower credit score under the program has been 463. Those with credit scores averaged a score of 616. The credit union has held eight “How to Buy a Good Used Car” seminars, with more planned this year. Four of the seminars were in partnership with Heartland Alliance--one of the credit union’s SEGs--and two were led in Spanish. The credit union researched, created and compiled its own curriculum, including a video produced by Consumers for Auto Reliability and Safety. North Side Community FCU’s ability to serve its core membership has helped it grow. The credit union experienced a 57.5% membership increase in 2010 among low- and moderate-income community residents and clients or staff of its 50 SEG partners. Many members are new immigrants to the U.S., mentally ill, and those whose only income is either disability or social security. NCUF grants are made possible by supporters of the foundation and the Community Investment Fund (CIF), an award-winning system of investments that help credit unions earn dividends while donating to national and state community development programs.

CEO finds value in WYCUP program

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MADISON, Wis. (5/23/11)--Since its inception in 2001, more than 125 young credit union leaders have been a part of World Council of Credit Unions’ (WOCCU) Young Credit Union People (WYCUP) scholarship program, which promotes international education and networking opportunities for credit union professionals and volunteers age 35 and under.
Click to view larger image World Council of Credit Unions’ (WOCCU) Young Credit Union People winner Cas Scott of Australia accepts her medal from WOCCU President/CEO Pete Crear at the 2010 World Credit Union Conference. (Photo provided by the World Council of Credit Unions)
June 14 is the deadline to nominate rising stars in the international credit union movement. It may be a first-time nomination or one in a line of multiple WYCUP winners from a credit union, as with Robert Keogh, CEO at Community CPS Australia in Adelaide, South Australia, said WOCCU. “At Community CPS Australia we have been fortunate enough to have two of our young leaders awarded with the WYCUP scholarship--Cas Scott in 2010 and Nick May in 2008,” Keogh said, adding that nominating “potential young leaders for the WYCUP award is a great opportunity to raise the profile of your credit union within industry groups and recognize the efforts of your young leaders.” Nominations are being accepted for individuals under the age of 35 who have made significant contributions within their own credit union system-- locally, regionally or nationally. All WYCUP nominees will be formally recognized at this year’s World Credit Union Conference, July 24-27 in Glasgow, Scotland, and invited to participate in events specifically for WYCU attendees. Events include an all-day educational session and lunch with the WOCCU board of directors. During the awards ceremony, five nominees will receive all-expense-paid scholarships to the 2012 World Credit Union Conference in Gdañsk, Poland. “The WYCUP program has provided our young leaders with international insights and contacts that can be used for collaboration on our credit union's projects, along with invaluable leadership skills and the confidence to make a difference,” Keogh said. “The WYCUP program has also enhanced Cas' and Nick's career paths, and they both hold senior positions within Community CPS Australia.” For more information, use the link, or contact Liliana Tangwall at ltangwall@woccu.org or by calling 1-608-395-2043.

CU System briefs (05/20/2011)

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* GRAND RAPIDS, Mich. (5/23/11)--Marcie Graham, 30, of Lansing, Mich., was indicted last week on federal embezzlement charges. The indictment alleges that she embezzled about $236,000 between December 2008 and October 2010 while employed as an assistant branch manager of Lansing-based Case CU. If convicted, Graham faces up to 30 years in prison, restitution, and/or a fine of $250,000 (Lansing State Journal May 19) … * YORKTOWN, Va. (5/23/11)--Longtime 1st Advantage FCU CEO Adrian "Casey" Duplantier has announced he will retire at the end of the year as the credit union's fourth CEO since it was founded in 1951. He had been with the credit union industry for more than 30 years, including 10 as a CEO in New Orleans and under 25 years with 1st Advantage, Duplantier said. Under his leadership, the credit union grew more than 500% in assets to its current $550 million, merged with several smaller credit unions, changed its membership base to a community charter, and increased branches to seven from four. 1st Advantage ended 2010 with a record net income. The credit union said it expects to have a successor in place by fourth quarter … * PONTIAC, Mich. (5/23/11)--The board of directors at Pontiac, Mich.-based Affinity Group CU, announced that Glenda West has been named as its new president/CEO. The appointment was effective in April. With 32 years of experience, West previously served as vice president of branch operations for eight years at Genisys CU, Pontiac, and as CEO of DuPont CU for eight years. She also has served on the board of the Michigan Credit Union League's Oakland County Chapter for 15 years (Hometownlife.com May 12) … * PORTLAND, Maine (5/23/11)--Herbert Aldrich Sr., current board chairman at Taconnet FCU, Winslow, Maine, died May 11, according to the Maine Credit Union League (Weekly Update May 20). He was 88 (The Morning Sentinel via legacy.com May 14). Aldrich was an active participant not only in his credit union but in the entire credit union movement, said the league.

NCUF prelim data CUs strong fin ed providers

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MADISON, Wis. (5/23/11)--Credit unions are making a difference through financial education, according to preliminary data collected by the National Credit Union Foundation (NCUF) as part of its 2011 Credit Union Member Education Inventory.
Click to view larger image Click for larger view
Click for larger viewIn 2010, for example, 200 credit unions reached 182,000 students through classroom presentations and over a million people received financial counseling or advice. Sponsored by state credit union leagues and NCUF’s REAL Solutions program, the data and information gathered from credit unions will help the credit union movement demonstrate the power of financial education and counseling in the lives of members and communities across the country. A sampling of preliminary results as of May 5, based on the first 200 credit union survey submissions from 37 states, indicates that in 2010, these credit unions:
* Provided formal financial counseling to 225,00 people through199 certified in-house professional counselors; * Referred an additional 37,000 members to counseling agencies; * Provided informal financial counseling to788,000 members; * Developed debt management plans for 19,000 members; * Established mortgage loan workout options for 7,000 members; * Provided 7,300 classroom presentations to 182,000 students; * Conducted 3,000 seminars for 64,000 adults resulting in 3,600 new accounts; * Produced 358 experiential learning programs (such as real-world fairs) for 29,000 students resulting in 800 new members; and * Operated 161 in-school branches with 14,000 student members, $5.9 million on deposit, and 850 student workers.
The information could be used for state and national public awareness, advocacy, and related outreach efforts, said NCUF. The report also will contain state-specific data and comparisons with national statistics and will be accessible to participating credit unions at no charge through the REAL Solutions Impact Center (use the link). Also, a companion tool will detail member financial education/counseling products and credit union best practices. An online survey tool began gathering the data in March. Credit union leagues in 29 states are working with Lois Kitsch, NCUF REAL Solutions national program director, to collect data. All U.S. credit unions are invited to participate. For more information, contact Kitsch at lkitsch@ncuf.coop or at 414-793-1991.