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Subprime crunch boosts ATM sales at CUs banks

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NEW YORK (5/28/08)--ATM manufacturers are finding that, contrary to expectations, the credit crunch stemming from the housing market's woes is boosting ATM sales at credit unions and banks. According to ATM & Debit News (May 22), some analysts had expected ATM sales of less than zero this year in the U.S. They based those expectations on the large financial losses major banks were reporting from the subprime-lending fallout. One analyst had predicted ATM sales in the U.S. would drop 5% this year, compared with flat-to-minimum sales growth of 1% last year and in 2006. Now he says sales for 2008 may be flat or up slightly. So, who's buying? Bank of America Corp., JP Morgan Chase & Co., and Wells Fargo & Co. are driving up sales in the U.S. for envelope-free ATMs, including some that accept bulk-cash and bulk-check deposits. They are using the ATMs to shore up frontline relationships with their customers. ATMs are cheaper than financing other bank operations. Credit unions and small banks are driving up sales of bulk-check deposit, envelope-free ATMs, said the article. It pointed out that BECU (formerly Boeing Employees CU), an $8.124 billion asset credit union based in Tukwila, Wash., and other credit unions have purchased multifunctional kiosks. Regional banks, who are often takeover targets, aren’t buying; they're worried about capital expenditures, said analysts. North Canton, Ohio-based Diebold, a CUNA Strategic Service provider, reported first-quarter revenue for its ATM manufacturing unit as $495.8 million, an 8.1% increase over the $458.9 million in first-quarter 2007. It had installed 7,400 deposit automation ATMs in the U.S. as of April 30, said Diebold President/CEO Thomas W. Swidarksi.

Tornado damages CU former Filene director loses car

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WINDSOR, Colo. (5/28/08)--Denver-based Public Service CU is doing its part to help the community of Windsor, Colo., rebuild after a tornado struck the area Thursday and slightly damaged its branch there.
Public Service CU, Denver, donated $10,000 to the American Red Cross Tuesday to help those affected by a tornado that hit the Windsor, Colo., area Thursday. From left are three American Red Cross workers, David Maus, president/CEO of Public Service CU, and Sunny Lubbick, Public Service CU vice president of community outreach and former Colorado State University football coach. (Photo provided by Public Service CU)
The storm destroyed more than 100 homes, and another 100 are uninhabitable, said Bob Hoel, a Filene Research Institute Fellow and member of the board of directors at the $637 million asset credit union. Hoel told News Now that his car was lost in the storm. “The storm took out my car while I was eating in a restaurant,” he said. The downtown Windsor branch of Public Service suffered minor damage and a power outage. “The branch itself was fine,” Steve Ferrero, Public Service vice president of marketing, told News Now. “The heating and air conditioning unit was blown over." Both Hoel and Ferrero agreed that “the credit union was spared,” and noted that buildings within two blocks had severe damage. Though the tornado didn’t affect the branch, it did affect some of the employees--at least one had damage to her home, Ferrero said. Public Service CU moved aggressively to meet the community’s needs after the storm, Hoel added. The credit union donated $10,000 Tuesday morning to the American Red Cross, and is allowing affected members to defer payment on loans. It also is providing emergency lines of credit with low rates, he said. At a shred event in Fort Collins over the weekend, the credit union also collected $2,000 from additional donations to help storm victims. The money will go to benefit those affected by the storms in northern Colorado, Ferrero said. Windsor, which has a population of about 15,000, responded to the storm quickly, Hoel said. “It’s just incredible how quickly they patched up the town. We’re a part of that community and we’re on the fast track to get the city repaired,” he said. Public Service CU has 5,502 members who live in Windsor, and several more who work in Windsor but live outside of town, Ferrero added. Hoel is the retired executive director of the Filene Research Institute.

CU System briefs (05/27/2008)

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* SAN DIEGO (5/28/08)--Credit Union National Association's Home &
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Family Finance (H&FF) Radio show taped a program live at Western Corporate FCU's (WesCorp) 2008 Annual Meeting and Future Forum in San Diego. Guests included, from left: Robert "Camo" Gleisberg, membership education and development officer, Pacific Marine CU; attorney Mari Frank, who specializes in identity theft issues; Donna Bland, senior vice president, The Golden One CU; Diana Dykstra, CEO, San Francisco Fire CU; Joe Shroeder, CEO, San Diego Metropolitan CU; Yvette Urea Moe, San Diego County Office of Emergency Services; and H&FF Radio host Paul Berry. Topics discussed: creating a savings strategy in today's economy, coping in today's mortgage market, protection yourself against ID theft, and emergency preparedness for your home and family. The program is scheduled to air Sunday at 3 p.m. EDT on the Radio America network. A podcast can be downloaded afterward from www.radioamerica.org or www.cuna.org. WesCorp is one of the show's national sponsors. (Photo provided by WesCorp) … * BANGOR, Maine(5/28/08)--Kristie Libby, left, of Penobscot County FCU helps a student at the Housing Booth at the Bangor Chapter of Credit Unions' Fourth Annual Financial Fitness Money Management Experience, which involved more than 100 area high school students from five high schools. Credit unions in eastern Maine presented the event on May 22 at Eastern Maine Community College in Bangor. The half-day event features an interactive "game of life," where students map our their financial future at age 22 and create a budget. (Photo provided by the Maine Credit Union League) … * ALBUQUERQUE, N.M. (5/28/08)--John Thompson, former CEO of U.S. New Mexico FCU, died earlier this month in Canton, Ohio, according to the Credit Union Association of New Mexico (CUANM). He was a former president of the New Mexico Credit Union League board and was active in the national and local credit union movements. Thompson is a former board member of the Credit Union National Association, the National Association of Federal Credit Union and Southwest Corporate. He was hired to lead the credit union when it was U.S. Employees FCU in 1979 and led the credit union for 20 years. Thompson received the Ron Moore Hall of Fame Award from CUANM in 2006. He requested no services be held … * HUNT VALLEY, Md.(5/28/08)--Kenneth Jones, former board chairman of Point Breeze CU (PBCU), Hunt Valley, Md., died April 23, the Maryland and District of Columbia Credit Union Association has learned (Focus Newsletter May 27). Jones also served as vice chairman of the credit union. He was a member of the Maryland Credit Union League's legislative committee and was appointed by the governor in 1971 to serve as an original member and director emeritus of Credit Union Insurance Corp. (CUIC). Upon his retirement as PBCU board chairman in 2003, he was named as director emeritus of the credit union … * NORTHVILLE TOWNSHIP, Mich. (5/28/08)--John Mann, retired CEO/president of MPG Community CU, Romeo, Mich., died May 10 at the age of 75. He was former chairperson of the Blue Water Chapter of Credit Unions, according to the Michigan Credit Union League (Michigan Monitor May 26). He was CEO of MPG Community CU from 1981 to 2006 and was first elected chapter chairman in 1991. He is survived by his wife, a daughter, two sons, eight grandchildren and one great-granddaughter …

Southwest Corporate paper makes a case for mortgages

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FARMERS BRANCH, Texas, and DALLAS (5/28/08)--A new white paper released by Southwest Corporate Investment Services, “Making a Case for Mortgages,” suggests that mortgage lending still offers credit unions opportunity. The paper examines the benefits of mortgage lending for credit unions and combats the notion that retaining mortgage originations is too risky, the Texas Credit Union League said (LoneStar Leaguer May 27). Author Joe Arnold also discusses the outlook for mortgage originations this year. Credit quality of credit union mortgage loans is high, interest rate risk is manageable, and current spreads make mortgage lending a valuable opportunity for credit unions, he said.

CUs letter adds perspective on risk losses

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MIAMI (5/28/08)--There are more than 8,000 credit unions in the U.S., and the vast majority did not make the types of subprime loans that account for problems in the mortgage market, according to a recent letter to the editor in the Miami Herald. Lloyd Gill, executive vice president and chief operating officer, City County CU, Fort Lauderdale, Fla., wrote a letter to the editor, published Monday, recognizing that credit unions are helping borrowers refinance their subprime and exotic mortgages. He wrote in response to a Miami Herald (May 18) article that noted losses by a Florida credit union related to a condominium project that went into foreclosure. Gill, who also is the CUNA Lending Council vice chair, cited a study by the Credit Union National Association, which indicated that credit unions save consumers $6.3 billion per year. “If banks consider this an ‘unfair advantage,’ they are free to convert their bank to a credit union charter at any time,” he wrote.

CUNA CUs address conversion issues in IAmerican BankerI

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WASHINGTON (5/28/08)--Officials with the Credit Union National Association (CUNA) and some credit unions are happy to see that the pace of credit union conversions to mutual savings banks are slowing down, an American Banker article reported Tuesday. Because credit union members have become more educated, switching charters has become more difficult, the article noted. “The more disclosure there is, the more people seem to be against conversion,” said Eric Richard, CUNA executive vice president and general counsel. “I really believe that the system was stacked in favor of management. It’s less so now than it was before.” Bucky Sebastian, CEO of the $2.1 billion asset Tampa, Fla.-based GTE FCU and head of the National Center for Member Trust, Raleigh, N.C., nixes the idea that credit unions convert so they can better compete, the article said. The actual motivation behind the majority of conversions is greed, Sebastian told the American Banker. Top executives and directors--not rank and file credit union members--are the ones who realize profits when converting credit unions become stock companies, Sebastian continued. The credit union industry wants to maintain the status quo with the National Credit Union Administration setting the rules, because easing restrictions against conversions would only diminish the strength of the credit union movement, the article noted. “Those of us who have been in the credit union movement and have a very strong affinity for it would tell you that the issue is all about the membership and the ownership structure,” Tom Dorety, CUNA chairman and CEO of the $6 billion asset Tampa, Fla.-based Suncoast FCU, told American Banker. “At the end of the day, [if conversion] becomes something that is routine and easy, it certainly weakens the entire credit union system,” Dorety concluded.

It Belongs to Me is ICU DayCo-op Week theme

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MADISON, Wis. (5/28/08)--This year’s International Credit Union (ICU) Day and Co-op Week will be themed, “It Belongs to Me.”
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ICU Day is scheduled for Oct. 16. Co-op Week will be Oct. 12-18. This is the first year that Canadian cooperatives have aligned their Co-op Week theme with the international theme used by the World Council of Credit Unions and its members. “It Belongs to Me” was picked by a multi-national committee of U.S. and Canadian credit union officials. To promote worldwide involvement, the committee invited all of its member organizations to submit suggestions for the 2008 theme. Laquita Normore, marketing and communications manager for Eagle River CU, L’Anse au Loup, Newfoundland, submitted the theme. “‘It Belongs to Me’ represents ownership, but also suggests a sense of loyalty and personal pride,” Normore said. “At credit unions, every customer is both a member and owner,” said Dan Mica, president/CEO of the Credit Union National Association. “This year’s theme celebrates the economic democracy and equal ownership of each credit union member regardless of how much money that member may have in savings.” “Credit union principles must be preserved for the sake of these members and the continuing strength of the credit union movement worldwide, a recognition our joint events are designed to celebrate,” said Pete Crear, WOCCU president/CEO. Co-Op Week has been celebrated in Canada since 1958. ICU Day has been celebrated annually on the third Thursday of October since 1948. Co-op Week in Canada became a national event in 1982 with the encouragement of the Cooperative Union of Canada. The events provide an opportunity to honor those who have made contributions to the cooperative movement, to recognize the board and staff members working on behalf of credit unions and cooperatives, and to express appreciation to members of credit unions and cooperatives at home and abroad. Promotional materials and products for ICU Day and Co-op Week will be available online in the coming months. October also is National Cooperative Month. For more information, use the link.

Jane Bryant Quinn expresses support for CURIA

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GRAND RAPIDS, Mich. (5/28/08)--Newsweek contributing editor Jane Bryant Quinn expressed her support for the Credit Union Regulatory Improvements Act (CURIA) during a keynote speech at the Michigan Credit Union League's Annual Convention and Exposition. recently. Quinn, ranked by World Almanac as one of the 25 most influential women in America, said she supported CURIA, in particular its provision that would allow credit unions to expand their lending to small business, according to the league (Michigan Monitor May 26).
Jane Bryant Quinn expressed support for the Credit Union Regulatory Improvements Act during the Michigan Credit Union League's Annual Convention and Exposition. (Photo provided by the Michigan Credit Union League)
The convention was held in Grand Rapids May 15-17. Quinn spoke about "Financial Empowerment in Today's Economy." Citing the "extraordinary irresponsible behavior of banks and the financial system" in recent years, Quinn termed credit unions "an island of sanity in a sea of madness." "Your communities need you now more than ever," Quinn told credit unions. The U.S. economy is in a recession, she said, noting a rise in unemployment, a decline in national income and corresponding drops in consumer spending and consumer confidence. "I don't see a lot of rescue coming from Washington, and I don't think we've hit bottom yet," she said. She urged the audience to abandon the notion that a home purchase represents a sure-fire growth investment because it won't generate a huge return. From a long historical perspective, the housing boom of the 1990s was an aberration, she told attendees. During a question and answer period, a member of the audience queried her on her past public support for credit union taxation. "I've changed my mind," she said. "Ten or 12 years ago, I thought the banks had an issue. Looking at the situation today--I was wrong." She offered guidelines for prospering in today's market. Among them: "Measure your risk and live a little below your income," she said.

Filene offering free innovation webinars

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MADISON, Wis. (5/28/08)--The Filene Research Institute is holding free innovation webinars in June. The 30-minute webinars show participants how to be innovators at their credit unions. Kent Sugg, Tinker FCU, Oklahoma City, and Maureen Maddox, Filene Research Institute, will present three Filene i³ innovations: MatriMoney, Savings Revolution, and Prize-Based Savings. The manner in which credit unions have implemented the programs and benefited from them will be addressed. Webinars will be held:
* June 6, 10:30 a.m. (all times are CDT); * June 9, 2:30 p.m.; and * June 11, 10:30 a.m.
Those interested in more information can e-mail their name, credit union and desired session to Kent Sugg at kentsugg@filene.org. Participants must register three days before a session. Space is limited.

Andy List named chairman of Michigan league

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PLYMOUTH, Mich. (5/28/08)--Andy List, president/CEO, Option 1 CU, Grand Rapids, was elected the 32nd chairman of the Michigan Credit Union League (MCUL) May 17, during the 2008 MCUL Annual Convention and Exposition in Grand Rapids.
Outgoing Michigan Credit Union League Chairman Terry Pierce (left), general manager, Security FCU, Flint, passes the chairman’s gavel to his successor, Andy List, president/CEO, Option 1 CU, Grand Rapids. (Photo provided by the Michigan Credit Union League)
He succeeds Terry Pierce, general manager, Security FCU, Flint. George Isola, manager at Ishpeming (Mich.) Community FCU, succeeds List as MCUL vice chairman. Howard Spencer, chairman, Northland Area FCU, Oscoda, was elected secretary/treasurer (Michigan Monitor May 26). The 2008 business meeting consisted primarily of the chairman’s and president’s reports. MCUL President/CEO David Adams focused on “Issues, Initiatives and Solutions” and the role of the league and its affiliates in successfully serving the needs and interests of its member credit unions.