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Pa. CUs to help state employees with payless paydays

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HARRISBURG, Pa. (5/26/09)--Pennsylvania credit unions will help state employees who will not be paid for their work beyond July 1 unless the state budget passes. The budget deadline is July 1, but employees can continue working beyond it. Pennsylvania State Employees CU (PSECU) is developing accommodations to help state workers, according to the Pennsylvania Credit Union Association (PCUA) (Life is a Highway May 22). Other state credit unions that offer Better Choice loans are preparing to make small loans to state employees. Better Choice is PCUA’s short-term, payday loan alternative. PCUA also will help the Pennsylvania State Treasury publicize credit union alternatives to affected employees. A number of states, including California, have reported that their state workers would not be paid until the state budgets are settled. Credit unions have pitched in to help members affected by the delays. In February, 11 California credit unions provided lines of credit to residents impacted by the state’s cash crunch, which forced the controller’s office to delay roughly $3.3 billion in payments (News Now Feb. 5).

CU System briefs (05/25/2009)

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* PALO ALTO, Calif. (5/26/09)--Addison Avenue FCU has launched a virtual Family Center to provide members and their children information about managing money, student loan and scholarship offerings, and recommendations about accounts. "With a belief that developing good financial habits starts early, we recognized the need to provide our members with the tools to start their kids on the right foot," said Jonathan Gowins, e-commerce social media manager at the $2.187 billion asset, Palo Alto credit union. The Family Center also covers topics such as how to read credit reports, find the right checking and savings accounts and how to use credit cards wisely, he said … * COLORADO SPRINGS, Colo. (5/26/09)--Colorado Springs CU, a $119.1 million asset credit union, has changed its name to Aventa CU. Established in 1957 as Colorado Springs Employees CU serving utilities employees, the credit union expanded its membership and rebranded itself as Colorado Springs CU. Today, nearly 40% of its 16,000 members live outside the city and the credit union wanted a name to reflect the growing membership (Colorado Springs Business Journal May 20) … * HARRISBURG, Pa. (5/26/09)--A Nazareth, Pa., man was sentenced Thursday to more than 11 years in federal prison for a robbery spree in three states that involved 15 financial institutions and convenience stores and more than $58,000. John Snuggs, 42, was sentenced by U.S. District Court Judge Richard P. Conaboy for the crime spree through Pennsylvania, New Jersey and Virginia between September 2007 and March 2008. One of the six financial institutions robbed was Baker FCU, Phillipsburg, N.J. The prolific robber was ordered to be placed on supervised release for five years after serving the prison sentence, pay more than $58,000 in restitution, and pay a special assessment of $1,500 (States News Service May 21) … * AUGUSTA, Maine (5/26/09)--Maine State CU Wednesday announced it has awarded $20,000 in scholarships of $1,000 each to 20 Maine high school students who will attend a post-secondary educational institution next year. The $250 million asset credit union serves Kennebeck and Somerset Counties and the employees of the state of Maine (MaineBusiness.com May 21) … * HARRISBURG, Pa. (5/26/09)--Eugene "Gene" Bradley, founding member and retired CEO of Ingersoll-Rand FCU in Athens, Pa., died Tuesday at the age of 76. He was past president of the Endless Mountains Chapter of Credit Unions, according to the Pennsylvania Credit Union Association (Life is a Highway May 22). He is survived by his wife of 52 years, Hazel; five children; 11 grandchildren; and six great-grandchildren. Funeral services were Friday (Morning Times May 20) …

Charlotte Metro FCU profiled in auto-refinance story

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CHARLOTTE, N.C. (5/26/09)--Charlotte Metro FCU was profiled last week in a story about auto-loan refinancing on WSOC-TV Channel 9 in Charlotte, N.C. The segment focused on credit union member Monica Johnson, who refinanced the auto loan on her Jeep Commander two weeks ago at 6.25%, down from an initial rate of 7.64%. With the lower rate, Johnson’s monthly payment dropped to $288 from $298, which may not seem like much, but it adds up, the segment indicated. “Over the life of the loan, I’ll probably save a good--I’d say about a good $2,000,” Johnson said. Auto-loan refinancing is a big draw for new members at the $184.3 million asset credit union. No matter the type of car or the age of the vehicle, the credit union can save members a percentage point or more on interest rates, depending on the member’s loan balance and credit score, said Liz Ramos, Charlotte Metro vice president. “We can save [members] anywhere from $25 to $50, $75 [per payment],” she added. Members can refinance in about 30 minutes if they bring in their old auto finance contract, their account number and mailing address for the payoff, a 10-day payoff quote, a driver’s license and two pay stubs, the credit union said.

Citadel FCU explains difference on Philly TV

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PHILADELPHIA (5/26/09)--Citadel FCU recently explained the difference between credit unions and banks to Philadelphia’s CBS affiliate, KYW, in a news story May 4. KYW noted that credit unions have avoided risky loans and the problems encountered by large U.S. banks such as Bank of America, Citigroup and Wells Fargo. Credit unions like Thorndale, Pa.-based Citadel didn’t take government bailout money, and welcomed new members, KYW reporter Jim Donovan said. “Credit unions in general are viewed as very conservatively managed financial institutions,” Kristianna Del Grande, Citadel public relations specialist, told the news outlet. “While a bank is held accountable to its stock holders to generate a profit to boost its stock value, to boost dividends, a credit union on the other hand is only held accountable to its members, because its members are its owners.” Del Grande noted that 99% of Americans are eligible to join a credit union. Citadel recently expanded its charter to extend membership to residents who live in five other counties. At the end of the newscast, the KYW news team members noted that credit unions didn’t ask for bailout money. “We admire them for that,” they said. To watch the newscast, use the link.

WOCCU helps Kenya develop first CU reg

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NAIROBI, Kenya (5/26/09)--Seven months after passing its first credit union law, Kenya’s government is taking its initial steps toward creating regulations with the help of the World Council of Credit Unions (WOCCU). The Kenyan government is working to ensure it gets the rules for credit unions right the first time--after worldwide fallout against some poorly regulated financial institutions, said WOCCU. In November 2008, Kenya became the first country to develop a law that specifically regulates savings and credit cooperatives (SACCOs), as credit unions are known. A committee is working in Kenya to develop regulations, design a regulatory agency, create model bylaws and develop a deposit guarantee fund. WOCCU joined the 15-person committee two weeks ago in Nairobi to set priorities and timelines to establish the SACCO regulation. “WOCCU has a lot of experience working with SACCOs in Kenya and understands the strengths, challenges and opportunities that exist in the Kenyan SACCO sector,” said F.F. Odhiambo, cooperative development commissioner with Kenya's Ministry of Cooperative Development and Marketing. The ministry is involved with the technical development of the country's financial and non-financial cooperatives.
Kenyan savings and credit cooperatives (SACCOs) workshop participants, from left, Jesús Chavez, World Council of Credit Unions (WOCCU)-Kenya; Daniel Tallam, Central Bank; Brian Branch, WOCCU; David Ferrand, FSD Kenya; and Carilus Ademba, Kenya Unions of Savings and Credit Co-operatives, share ideas about forming a regulatory agency for SACCOs.
Brian Branch, World Council of Credit Unions’ executive vice president and chief operating officer, discusses the requirements for establishing a deposit guarantee fund for savings and credit cooperatives in Kenya. (Photos provided by World Council of Credit Unions)
“Given WOCCU's vast international experience in regulatory development, the task force invited the organization to help implement the SACCO Societies Regulatory Agency,” Odhiambo added. Brian Branch, WOCCU executive vice president and chief operating officer, who helped spearhead the legislative initiative, facilitated the workshop. He joined WOCCU-Kenya program directors Jesús Chavez and Erick Silé to provide an overview to the committee on the SACCO sector. “Kenya’s SACCO system has grown at a tremendous rate in the past several years, but it has lacked any kind of regulatory oversight and supervision that would enable SACCOs to really evoke trust in their communities and to compete against banks and microfinance institutions,” Branch said. “Passing the SACCO law was the first step in establishing a strong supervisory framework. Now the real work begins.” The committee agreed to establish a task force of consultants and representatives from Kenya's Ministry of Finance, Central Bank and WOCCU to draft regulations based on the new legislation and recommendations from the workshop. It also discussed establishing a deposit guarantee fund to protect the institutions and their members’ savings. The fund would be at risk of collapsing if any large SACCO failed during the next five years so the committee proposed to solicit temporary government funding to get started. Most of the workshop was dedicated to creating SACCO Societies Regulatory Authority. It would license deposit-taking SACCOs, regulate and supervise the institutions and manage the deposit guarantee fund. Regulators would be based in Nairobi rather than in the field to ensure adequate training. Of the nearly 4,000 SACCOs in Kenya, slightly more than 200 are deposit-taking institutions. The committee expects about half will be able to comply with regulatory standards required for licensing. SACCOs have 12 months from the time of their application to become licensed. The committee seeks to amend the law so that SACCOs that improve within a specific range can become certified institutions. Workshop participants included representatives from the Central Bank of Kenya, the country's Ministry of Finance, Financial Sector Deepening Kenya (an independent trust that supports the development of inclusive financial markets) and Kenya's two SACCO trade associations--Kenya Unions of Savings and Credit Cooperatives and Kenya Rural Savings and Credit Societies Union. The committee will meet every two weeks until it presents draft regulations to the Minister of Finance, planned for December. For more information, use the link to Branch’s travel blog.

Maine governor lawmakers at league convention

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AUGUSTA, Maine (5/26/09)--Maine Gov. John Baldacci, U.S. Rep. Chellie Pingree (D-Maine) and more than 650 credit union representatives attended the Maine Credit Union League’s 71st Annual Meeting and Convention May 15-16 in Augusta, Maine.
U.S. Rep. Chellie Pingree (D-Maine) expressed her gratitude to Maine credit unions attending Maine Credit Union League’s annual convention for their efforts to provide financial products and services that help state consumers. (Photo provided by the Maine Credit Union League)
Baldacci noted credit unions’ work to end hunger, according to the Maine Credit Union League. “When the first lady found out I was speaking to Maine credit unions, she wanted to make sure that you knew how much we appreciate and recognize the work of the Maine Credit Unions’ Campaign for Ending Hunger,” Baldacci said. Pingree said she was grateful for “all that credit unions do to provide financial products and services that are aimed at helping Maine consumers.” Several Maine lawmakers who weren’t able to attend the event sent congratulatory messages, the league said. Sen. Olympia Snowe (R-Maine) praised credit unions’ leadership in providing financial education to Maine children. U.S. Rep. Michael Michaud (D-Maine) reiterated his support for legislation that helps credit unions help consumers.
Maine Gov. John Baldacci (left) and John Murphy, Maine Credit Union League president, at the league’s annual convention. (Photo provided by the Maine Credit Union League)
“Despite the challenges of the past year, Maine's credit unions have again come together to meet those unique and distinct challenges that members have faced,” said John Murphy, league president. “Examples of Maine credit unions reaching out to help members, whether it be offering special low- or no-interest loans for fuel assistance or providing relief for laid-off workers, occur everyday. “Maine credit unions have always been a great deal for consumers but more and more consumers are finding out about the opportunities and values available at their local credit union,” he added. “This year's convention reaffirmed the important role and positive impact that Maine credit unions play in the lives of hundreds of thousands of Maine people.”

ACUC to celebrate movements 100th anniversary

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MADISON, Wis. (5/26/09)--The credit union movement’s 100th anniversary will be celebrated at America’s Credit Union Conference
Click to view larger image President Franklin D. Roosevelt signs the Federal Credit Union Act of 1934 into law on June 26, 1934. (Photo provided by CUNA)
and Expo (ACUC), scheduled for June 21-24 in Boston. Several sessions will focus on credit unions’ history, according to the Credit Union National Association (CUNA). The conference kicks off with a keynote session, “Honoring the Credit Union Revolutionaries,” June 21 from 4 p.m. to 6 p.m. EDT. A presentation honors the first 100 years of credit unions and tells stories about credit union pioneers past and present. During the conference, attendees will experience the 100th anniversary timeline. “Meet the Revolutionaries: Bringing the History Alive” is an interactive timeline, in which attendees will take a self-guided tour to view historic artifacts and the evolution of the credit union movement. Other events scheduled are:
* A special viewing of “King’s X.” Originally produced on film in 1953, “King’s X” stars Hugh Beaumont of the TV show “Leave it to Beaver.” The film follows the story of a family experiencing a sudden financial struggle. While searching for a solution, the main character discovers the benefits of becoming a member of his local credit union. The film covers the credit union philosophy, benefits of membership, and a brief history of credit unions. * The closing event is the 100th Anniversary Revolutionary Celebration--House of Blues, June 23, from 7 p.m. to 10 p.m. The House of Blues is dedicated to educating and celebrating the history of U.S. southern culture and African-American artistic contributions to music and art. * A pre-conference optional event--America’s CU Museum Tours, scheduled for Saturday and Sunday before ACUC, and for Wednesday after the conference concludes. The tour shows how, in 1908, the American credit union movement took a root in a house. Nearly 100 years later, in October 2002, the site became the home of America’s Credit Union Museum. Attendees can experience credit union history through exhibits, personal accounts and storytelling.
All attendees will be provided a free copy of CUNA’s new book “For the People, for 100 Years,” a history of the credit union movement, which features many photographs of key events through history.

Pa. banks tax-status failure good for other states CUs

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HARRISBURG, Pa. (5/26/09)--The failure of banks' challenges to credit unions' tax-exempt status in a Pennsylvania court can only be good for credit unions in other states, too, according to Eric Richard, Credit Union National Association (CUNA) executive vice president and general counsel. The Pennsylvania Commonwealth Court Thursday issued an order discontinuing banks' challenges to credit unions' tax-exempt status. The order "effectively ends the tax litigation," said Jim McCormack, president/CEO of the Pennsylvania Credit Union Association (PCUA) (Life is a Highway May 22). "The banking industry in Pennsylvania seems to have thought it could undermine the credit union tax exemption with this litigation," CUNA's Richard said. "That strategy has failed, and its failure can only be good for credit unions in other states, too. "Pennsylvania's credit unions and PCUA have worked brilliantly to get this issue out of the courts," Richard told News Now. The court order follows months of discovery requests and negotiations over banks' allegations that the taxing scheme applicable to Pennsylvania's state-chartered credit unions violates the state constitution. The state has seen a series of cases beginning in 2003 as banks challenged state credit unions' conversions to community charters. After losing their arguments against the charters before the Pennsylvania Department of Banking, the banks also raised the tax challenge on appeal to the court system. One community chartering case remains active. Freedom CU and TruMark Financial CU serve the well-defined local community of the Philadelphia metropolitan division, said PCUA. The Freedom/TruMark Financial case will be argued on June 10.