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CU System Briefs (05/22/2013)

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  • HARRISBURG, Pa. (5/22/13)--Michael Williams, representing the Erie Chapter Credit Unions was named the 2013 Credit Union Youth Ambassador of Pennsylvania. The Pennsylvania Credit Union Association has been holding the Credit Union Youth Ambassador Contest since the early 1970s to attract young people to credit unions and help prepare them for leadership roles. Contestants are judged on their ability to communicate their knowledge of the credit union system. Williams, who is now the director of business development for Widget Financial FCU, Erie, will spend the next year representing PCUA at several events. Rebekah Frischkorn, who received the first alternate award, is a marketing specialist at AmeriChoice FCU and represented the Harrisburg Chapter of Credit Unions. The second alternate award was won by Nicholas Jones, a member service representative at Service 1st FCU. He represented the N.W. Susquehanna Chapter of Credit Unions ...
  • FARMERS BRANCH, Texas (5/22/13)--Shared Resources CU, Pasadena, Texas, has been approved by the Texas Credit Union League to be a "Juntos Avanzamos" credit union.  TCUL President/CEO Dick Ensweiler presented the credit union with a Juntos Avanzamos flag to fly, as a symbol to the Hispanic community that the credit union has the capacity, commitment, and compassion to serve their financial needs.  To receive the designation, Shared Recourses CU had to pass the program by offering members bilingual services and information, affordable products and services that fit the needs of Hispanic families, and important financial information to empower Hispanic families. It is an honor to receive the Juntos Avanzamos certification from the league," said the Shared Resources CU President/CEO Stephanie Salazar. "We believe this is exactly in line with the vision of Shared Resources, which is 'being the best at making life changes'" (LoneStar Leaguer May 21) ...

NEW: Oklahoma CU Foundation Activates Tornado Disaster Relief Fund

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OKLAHOMA CITY, Okla. (FILED 5/22/13 at 11:50 a.m. CT)--The Oklahoma Credit Union Foundation has deployed its Tornado Disaster Relief Fund to assist credit union people with the impact of tornadoes that occurred Sunday and Monday in Shawnee and Moore.

Gary Jones, president/CEO of the Credit Union Association of Oklahoma, was en route to Shawnee to meet with two credit unions affected by Sunday's tornado. He had already met with credit unions in Moore, which was hit by an EFL5 tornado Monday. "I've been talking with a lot of people who are hurting. The human stories are incredible," he said.

Those wishing to donate funds to assist credit unions in Oklahoma should may checks payable to the Oklahoma Credit Union Foundation, mark them designated for the Tornado Disaster Relief Fund and send to:

Credit Union Association of Oklahoma

631 E. Hill Street

Oklahoma City, OK 73105

For more information, contact Carrie Buchholz at 405-702-8622, ext. 215 or at carrie @ cuaok.org.

"We have a lot of individuals who are credit union people who have loss of property and displacement of homes," Jones told News Now.  CUAOK reached out early Monday to two credit unions  headquartered in Shawnee--Bison FCU and Tri CountyFCU--as well as credit unions in Moore and Oklahoma City, including Tinker FCU, whose branch was destroyed. (See Related Story: Tinker FCU Branch Destroyed, Assisting Staff and Members)

"All feedback indicated there was not significant damage to credit union property and no loss of life, which was encouraging," Jones said. "We're resilient here and we truly have experience dealing with tornados."

The National Credit Union Foundation, which runs CUAid, the national online disaster relief fundraising mechanism for credit unions, has been in touch with the Oklahoma league, which has, at this time, decided not to activate CUAid given the number of people affected.

"As an individual, the outpouring from around the country from colleagues and others in the credit union movement and from vendors, reporters, regulators and  business partners has been universally positive and caring, and  their response  is a comfort," Jones said, noting the collaboration that credit unions enjoy.

The tornado in Shawnee killed one person, while estimates of the death toll in Moore 24.

Oklahoma League On Tornado: 'We're Prepared To Get Through This'

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OKLAHOMA CITY, Okla.  (5/22/13)--Three credit unions in Moore, Okla., saw different outcomes when Monday's EF5 tornado swept through with 200 mile-per-hour winds that leveled thousands of homes and businesses in an area as much as two miles wide and 17 miles long.

"The good news is there is no loss of life or injury to credit union staff and there is minimal property damage to credit unions," said Gary Jones, president/CEO of the Credit Union Association of Oklahoma.  "But a lot of people are hurting, and credit union employees are among them.

"There are some stories of near misses, and credit union employees have lost their home and property. We are responding to help," Jones told News Now.

At least 26 credit union employees in the Oklahoma City area may have been affected by severe damage or loss of homes and automobiles, according to tallies of two of the credit unions in Moore--Tinker FCU and  Oklahoma Educators CU.

Jones noted that staff and members at Tinker FCU's branch took shelter in the credit union's vault and survived the event while the tornado destroyed the branch around them. (See related story and photo:  Tinker FCU Branch Destroyed, Assisting Staff and Members.) The branch is closed indefinitely.

The tornado packed winds between 200 and 210 mph, making it in the strongest category of tornadoes measured under the Enhanced Fujita Scale assigned by the National Weather Service. It killed at least 24 people, including nine children, and injured more than 230 as of late Tuesday afternoon (CNN.com and USA TODAY May 21).

Oklahoma Educators CU President Cindy White was on her way Tuesday afternoon to assess any damage to the credit union's Moore branch, which was closed at the time the tornado hit.

"We know our facility is not leveled, not like Tinker FCU down the street, but we have not been allowed into the area yet," she told News Now. "Our employees there report that the building is still standing, and it is locked." One staffer's home was directly impacted by the tornado.

The third credit union with a branch in Moore, WEOKIE CU, said that branch and the Express Branch South were closed Tuesday due to power outages, Moore's Credit Union Service Center, a shared-branch, also was reportedly closed.

WEOKIE  said it will provide no-interest and no-payment loan options to assist members through the crisis. "The WEOKIE family is saddened by the loss of lives and destruction resulting from the May 20 tornadoes," said a message on its website. "We are grateful for the remarkable survival stories, including our colleagues at Tinker FCU," it said.

CUNA Mutual Group told News Now Tuesday that its Property and Casualty Claims Disaster Team had been in contact with CUAO and the credit unions in the Oklahoma City area. As of late Monday afternoon, the only credit union reporting damage was Tinker FCU's branch in Moore, said Phil Tschudy, CUNA Mutual media relations manager. "Fortunately, no one was injured there."

CUNA Mutual is "making arrangements to get adjusters to the area as soon as authorities allow. However, that may not happen until later today or early Wednesday," he said Tuesday. "Any policyholder credit union that has sustained damage should contact our disaster claims line at 800-637-2676," Tschudy said. "It is staffed 24/7."

The Oklahoma Credit Union Foundation is mobilizing to put in place the ability to respond to the needs of credit union. "Our foundation and board will be meeting this afternoon to go over a proposal on how to deploy assistance," Jones told News Now on Tuesday.

The Texas Credit Union Foundation said it is working directly with the Oklahoma foundation and is accepting online donations to the Oklahoma Tornado Relief Fund, as well as assisting Oklahoma in its disaster relief grant process (LoneStar Leaguer May 21).

"We have had incredible amounts of outreach from around the nation from credit unions who have told us they want to help. It is humbling," Jones said, adding CUAO has received a number of e-mails and phone calls.  "We are still evaluating what is needed."

"Please convey our incredible gratitude for all the prayers and offers of help," CUAO's Jones told News Now," he said. "We're prepared to get through this."

CU Service Network Elects New Board

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LAKEWOOD, Colo. (5/22/13)--CU Service Network (CUSN) elected a new board of directors at its 21st annual meeting May 14 in Denver.

With 21 member credit unions and 66 attendees present, the board election results were:

  • Carla Hedrick, incumbent, president/CEO at Denver Community CU, Denver, was re-elected for a three-year term.
  • Gerry Agnes, incumbent, president/CEO of Elevations CU, Boulder, Colo., was re-elected for a three-year term.
  • Scott McNeil, president/CEO of Foothills CU, Lakewood, Colo., was elected to a three-year term.
CU Service Network CEO Doug Burke presented innovations that took place during 2012, including new mapping tools, peer-to-peer convenience analysis, and a learning-management system. He also spoke about upcoming 2013 changes, including a new website.

Equifax: Student Debt Up 27%, Credit At 5-Year High

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ATLANTA (5/22/13)--Student loans increased nearly 27%, to $11.7 billion in February from $9.2 billion in February 2012, according to Equifax's most recent National Consumer Credit Trends Report.

That reaffirms the results of the Credit Union National Association's Student Borrowing Survey, which found that student debt is increasing, with half of high school seniors having no idea what college will cost or how debt works and indicating many lack basic financial knowledge. CUNA surveyed 846 teens age 17-18 last month.

"Student borrowing continues to increase rapidly, and well beyond just tuition increases as more and more people are attending colleges and professional training," said Equifax Chief Economist Amy Crews Cutts.

"In the past, some students might have relied on their parents who would have funded tuition payments using home equity lines of credit, but the small volume of home equity lending that is occurring today, at a little over $12 billion, is not sufficient to cover those costs."

Overall, new credit generated during January-February 2013 was $141 billion--the highest balance for that time period in five-years--and an increase of more than 33% over recession lows of $94 billion originated during January-February 2010.

New credit balance changes year-to-date in February 2013 versus February 2012 were:

  • Home equity lines of credit increased nearly 16%, to $12.4 billion from $10.7 billion; and
  • Auto loans rose more than 13%, to $69.6 billion from $61.5 billion.
"The rise in auto loans is reflecting the strong demand for new cars and light trucks, which increased almost 9% over the same time a year ago," Cutts said.

"On a year-to-date basis through February, auto loan origination activity this year is the strongest it has been for banks since Equifax began tracking this information in 2006, totaling $35.6 billion, and the second strongest showing for non-bank auto financing companies at $34 billion. Consumers are tired of their old, patched-up cars and demand is really starting to pick up.

"At the same time, there is a slight increase in the willingness of lenders to finance car purchases for consumers with less than perfect credit," she added.

Other highlights from the most recent data include:

Student Loans:

  • The total new credit balances for February, year-over-year 2012-2013, nearly 29%--to $5.1 billion from $4 billion.
Auto Loans:

  • The total number of new loans increased nearly 9%, from 3.2 million in February 2012, to 3.5 million in February 2013, the highest in more than seven years.
  • By source, bank-funded auto loans increased more than 12% from February 2012 to February 2013--to $17.4 billion from $15.4 billion, while auto finance company-funded loans increased less than 3%, to $17.9 billion from $17.4 billion. 
Home Equity Revolving:

  • The total number of new loans year-to-date in February 2013, are 130,200, a year-over-year increase of more than 11%.
  • Year-over-year, the total balance of new credit increased more than 11%, to $6.3 billion in February 2013 from $5.6 billion the year before.

Ponzi Scheme Claims Process Made Available Until Sept. 5

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MADISON, Wis. (5/22/13)--A federal court in North Carolina has approved and implemented the claims process related to the Rex Venture/Zeek Rewards Ponzi Scheme, which victimized credit union members and involved at least $19.8 million in losses to credit unions.

As of May 15th, individuals may file a claim using the online claim form  provided at the Zeek Rewards Receivership website. To access, use the link. The claims process will be available until Sept. 5, according to a May 8 decision in the U.S. District Court for the Western District of North Carolina.

The Credit Union National Association was instrumental in providing advance notice to credit unions of the scheme. CUNA participated in BITS Fraud Steering Committee ad hoc calls related to the scheme. On August 12, 2012, the Securities and Exchange Commission had shut down the North Carolina-based Rex Venture Group, which did business as  Zeek Rewards and as penny auction site Zeekler.com.

Credit unions can share the information with members who were impacted by the scheme and appropriate individuals within the credit union to help answer any questions members may have, said Julie Esser, director of new alliances, CUNA Strategic Services, who is one of CUNA's staff liaisons with BITS.

In its complaint filed, SEC had said the $600 million Ponzi scheme, which was then on the verge of collapse, attracted  more than one million online customers, including many credit union members, who were promised 50% of the company's daily net profits through a profit sharing system that involved accumulating rewards points redeemable for cash payouts (News Now Oct. 26, 2012).

SEC's complaint said that 98% of Zeek Rewards' total revenues and  "net profits" paid to current investors was comprised of funds from new investors.  Other activity involved money orders, cashier's checks, debit and credit cards and automated clearinghouse transactions, with check amounts ranging from $10 to $10,000.

In October of 2012, CUNA said more than 8,200 checks, totaling $19.8 million, were issued by about 1,150 credit unions affected by the scheme. CUNA notified credit unions with valid e-mail addresses and whose members had been affected by the scheme, and notified CUNA Mutual Group, which issued three Risk Alerts to policyholders.

For more information use the links.

Morrow Named 2013 CU Hero Of The Year

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MADISON, Wis. (5/22/13)--Credit Union Magazine readers have posthumously named Warren Morrow, the late founder of the Hispanic market solutions company Coopera, as the 2013 Credit Union Hero of the Year.

Morrow founded Coopera with the belief that Hispanics need credit unions as much as credit unions need Hispanics.

He died Feb. 15, 2012, at the age of 34. His wife, Christina Fernandez-Morrow, will accept the award on his behalf during the America's Credit Union Conference in New York City June 30 to July 3.

Morrow believed deeply in helping underserved Hispanics receive dignified financial services, said Coopera CEO Miriam De Dios.

"By bringing financial stability to a home, Warren believed, you could begin to address other social issues," De Dios said. "Warren envisioned a credit union movement that rallied around serving the underserved Latino community. He would often say, 'Hispanics need credit unions, as much as credit unions need Hispanics.'"

"Warren had a powerful vision that outreach to the underserved Hispanic community should not be philanthropy," added Murray Williams, chief operating officer for the Iowa Credit Union League. "Instead, a business could do well by doing good--and everyone would benefit."

Coopera is owned by Affiliates Management Co., the holding company of the league.

Credit Union Magazine readers also lauded these leaders as credit union heroes:

  • Lily Newfarmer, CEO Tarrant County CU, Fort Worth, Texas;
  • Anabela Pereira, CEO Pioneer Valley FCU, Springfield, Mass.; and
  • Scott Prior, president/CEO Connection CU, in Silverdale, Wash.
Voting took place on creditunionmagazine.com through May 17.

Peters Backs MBLs: CUs Helped Auto Industry In Darkest Days

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U.S. Rep. Gary Peters (D-Mich.) speaks at the Michigan Credit Union League & Affiliates Annual Convention and Exposition. Peters told why he backs raising credit unions' business lending cap and thanked them for their efforts to provide affordable auto financing during the financial crisis.
DETROIT (5/22/13)--Credit unions should have the authority to make more loans to small businesses, said U.S. Rep. Gary Peters (D-Mich.), who noted credit unions' auto lending during the darkest days of the financial crisis, at the Michigan Credit Union League & Affiliates Annual Convention and exposition.

"Credit unions should be able to make those loans. We need to raise that cap," Peters said (Michigan Monitor May 21).

Peters is one of the original co-sponsors of this year's version of the bill that would raise the cap on member business lending.

U.S. Sen. Mark Udall's (D-Colo.) Small Business Lending Enhancement Act (S. 968), introduced in the Senate on Thursday, would increase the credit union member business lending cap to 27.5% of assets, from the current 12.25% (News Now May 17). Doing so would generate $13 billion in new loans and create 140,000 jobs, the Credit Union National Association said.

Peters thanked credit unions and the credit union industry for maintaining affordable financing for new-car purchases during the bleakest days for the auto industry in 2009, while banks stood on the sidelines.

Entrepreneur Josh Linker speaks about fostering creativity on the job at the Michigan Credit Union League & Affiliates Annual Convention and Exposition.  (Photos provided by the Michigan Credit Union League).

"The credit unions said, 'We will lend for cars,'" Peters said, speaking at MCUL & Affiliates Annual Convention and Exposition. "You stepped up when your country needed you and you made those loans"

Peters also thanked the Michigan credit union community for its endorsement of him for U.S. Senate.

In other events at the convention, entrepreneur Josh Linker encouraged credit union leaders to embrace new ideas rather than stifle creativity.

Fresh thinking should be encouraged, he said, even if it leads to mistakes. "Mistakes are not failure," Linkner said. "Mistakes are the portals to discovery."

CUAD Grants Available For Fin. Lit. Efforts

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BISMARCK, N.D. (5/22/13)--Grants are available to community organizations and credit unions affiliated with the Credit Union Association of the Dakotas through the Credit Union Foundation of the Dakotas.

CUAD is funded by participating North and South Dakota credit unions. It funds projects in the areas of access to financial services, financial education, savings and asset accumulation, and small-credit union development.

Applicants must be an affiliated North and South Dakota credit union or a community organization. Non-credit union organizations may apply for grant funding, but must partner with a North or South Dakota credit union and demonstrate how the project will impact credit unions and their members.

Funds may be used for:

  • Education of credit union employees and volunteers;
  • Public education initiatives related to consumer finance;
  • Projects and programs that support new, small or community development credit unions:
  • Enhancement to league/association projects funded by other sources consistent with the foundation's mission and purposes
  • Programs or projects that extend credit union services to the full range of membership, with emphasis on the un-served, underserved or low-income consumers;
  • Affordable housing projects;
  • Disaster relief;
  • Partnerships that provide services or carry out projects consistent with the Foundation's mission and purposes; and
  • Other purposes consistent with the foundation's 501(c) (3) mission and purpose.
Applicants also must:

  • Solicit endorsement and/or funding from at least one local credit union or credit union-related supporter;
  • Be able to leverage funds from other community, philanthropic, government or other sources to maximize benefit and ensure sustainability after the grant's funding ends;
  • Obtain letters confirming in-kind support or funding commitments from partners both within and outside the credit union movement; and
  • Have tangible, achievable goals and objectives.
For a list of what applications should include, use the link.

Applications are due by June 21.

PCUA Names Desjardins, Maxwell, Herring Award Recipients

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HARRISBURG, Pa. (5/22/13)--The Pennsylvania Credit Union Association  announced winners of its Desjardins, Maxwell and Herring awards May 16-18 at its 79th annual convention in Hershey. 

The Desjardins Financial Education Awards recognize the financial literacy efforts of credit unions in educating youth. The Youth Financial Education first-place award-winners were:

  • HealthCare First CU, Johnstown--$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 Dora Maxwell Awards for Social Responsibility Award signifies a commitment to volunteering time, energy, and resources to boost the living standards of others. First-place awards were presented to:

  • Keystone United Methodist FCU, Cranberry Township--$5 million to $20 million in assets;
  • HealthCare First CU--$50 million to $100 million;
  • Tri County Area FCU, Pottstown--$100 million to $200 million;
  • Merck Sharp & Dohme FCU, Chalfont--$200 million to $500 million;
  • TruMark Financial CU--more than $1 billion: and
  • York Chapter of Credit Unions--Chapter/Multiple Credit Unions.
 

The Louise Herring Awards for Philosophy in Action Award display how credit unions put People Helping People credit union philosophy into action. First-place awards were presented to:

  • First Capital FCU, York--$50 million to $250 million in assets; and
  • TruMark Financial CU--$100 million to $200 million.
 

Tinker FCU Branch Destroyed, Assisting Staff And Members

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OKLAHOMA CITY, Okla. (5/22/13)--
Click to view larger image Only the safe deposit box vault of Tinker FCU's Moore, Okla., branch was left standing in the aftermath of an EF4-scale tornado that hit the area near Oklahoma City. Fourteen staffers and eight members were inside the vault and escaped with no injuries. (Photo provided by Tinker FCU)
For nearly two dozen staff and members of Tinker FCU's branch in Moore, Okla., Monday afternoon had its moment of reckoning. A half-mile wide tornado bore down on the branch and they took cover in the credit union's safe deposit box vault. After it was over, they were safe and sound, and the only thing left standing was the vault.

"The branch is destroyed," said Matthew Stratton, senior vice president of marketing at Tinker FCU. "But the staff and members were safe inside the safe deposit box vault." He noted that 14 employees and eight to 10 members had sought shelter in the vault, "and everyone survived, with no injuries."

After the tornado ended, the building's debris blocked the vault door from opening, but first responders--who arrived within minutes--helped the employees and members get out. Because new storms were on the way, the group took cover a second time in a basement across the street until family members arrived, Stratton said.

The credit union had someone stay on site to keep the credit union's vault secure until 10 p.m. Monday, when the cash in the vault was removed and the safe deposit boxes were secured.

A second branch, the Northeast Oklahoma City branch, is also closed until power can be restored.

Tinker FCU's human resources department is now gathering information for assisting employees directly impacted by the tornado.

"All staff  have been accounted for, and they're OK," Stratton said. However, about 25 employees have some damage to their homes, and four employees' homes were destroyed.

"We've set up an account for donations and financial assistance, but have not yet set up a mechanism for donating property or things," Stratton said. The TFCU Employee Relief Fund, account No. 8599883, is set up to receive funds mailed to:

Tinker FCU

P.O. Box 45750

Tinker Air Force Base, OK 73145-0750

He noted that the Oklahoma Credit Union Foundation is also developing assistance for credit union employees and the American Red Cross is already on the scene.

"We've secured the safe deposit box vault and the branch's computer system is secure," Stratton said. "The branch's system doesn't hold any information. Its computers are more a connection conduit into the core system, which is located elsewhere. Members don't have to worry about their confidential information being housed in a damaged computer."

In addition to securing the cash and vault, ensuring employees are well, Tinker FCU is also offering members a disaster relief loan program. However, he noted that the credit union typically works one-on-one with members through any crisis. "This is just a bigger version."

(See related stories in today's News Now, "Oklahoma League On Tornado: 'We're Prepared To Get Through This,'" and "NCUA Activates Disaster Relief For Oklahoma.")