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Banks eyeing checking accounts for fees

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NEW YORK (6/1/09)--While credit card rates are under scrutiny in Washington, banks are already looking for other ways to boost their fee income. They are raising fees on checking accounts. Credit unions might want to monitor this development and market more aggressively their own low rates on checking accounts. Banks are making it easier for consumers to spend more than they have in their checking accounts, and when consumers do, the banks hit them with steeper punitive fees, according to USA TODAY (May 28). Also rising: ATM fees, minimum balance requirements for interest checking accounts, and monthly service fees. These fees hit record highs during 2008, according to Bankrate.com. Greg McBride, senior analyst at Bankrate.com, expects these fees to increase even more in 2009. Several banks have already announced their fee hikes:
* Bank of America will raise its monthly fee on some checking accounts and start charging a fee on accounts that remain overdrawn. The reason for the fees: the bank's costs are up and consumers are riskier today. Beginning this month, BofA will raise its monthly account-maintenance fees on its MyAccess checking to $8.95--a $3 increase. It will begin charging a one-time $35 fee if an account remains overdrawn for five business days. The bank has also increased the number of times customers can be hit with overdraft fees per day to 10, or double that of last year. * Wachovia (now Wells Fargo) doubled its fee for transferring funds to cover an overdrawn checking account to $10. It will charge the fee to a credit card rather than taking it from a linked bank account, which means the consumer could pay interest on the fees. A Wachovia spokesman said the fees were increased to make fees the same across multiple accounts. * SunTrust began charging last month a higher fee on basic checking if a customer overdraws multiple times, similar to what banks have done with late fees on credit card accounts. It also raised its overdraft fee on other bank accounts. Even though it charges higher overdraft fees on premier accounts, SunTrust automatically waives one to three overdraft charges a year on the accounts. * Citigroup is charging 3% of the transaction for certain debit purchases and ATM withdrawals made outside the U.S. Last year it charged 2%. Its fund transfers to cover overdrafts are being rounded to the nearest $100 to buffer additional transactions. It also is deducting a $10 transfer fee from checking instead of savings accounts. It also increased its overdraft fee to $34 per incident from $30 in May 2009. It considers the fee in line with industry standards.
Consumer advocacy groups are already monitoring the fees, saying that the banks are perpetrating the downward debt spiral for vulnerable consumers.

Ohio league works to add public funds to bill

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DUBLIN, Ohio (6/1/09)--As a state budget bill progresses through the Ohio Senate, the Ohio Credit Union League continues working to include credit unions as eligible depositories of public funds. According to the league, the Omnibus Budget Amendment passed last month by the state House included an amendment that added federal savings associations and savings banks as eligible depositories for public funds. Credit unions currently are excluded from the list of depositories (eLumination Newsletter May 27). The league communicated the inequity to members of the Senate and asked for the same deference. It also delivered letters to members of the Senate and sent an Action Alert to Ohio credit union officials. Amendments are under consideration, the league said. "This issue isn't about credit unions and other depositories. It is about the people, the businesses and the public entities in Ohio," league General Counsel John Kozlowski said in the newsletter. "They should have a choice of where they can deposit funds, and where they can participate in programs through Ohio's Treasurer's Office," he added.

CU System briefs (05/29/2009)

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* CHARLOTTE. N.C. (6/1/09)--Charlotte (N.C.) Metro FCU received a Telly Award--a national competition that recognizes local, regional and national creative video production--for its 2008 “coach” commercial, which aired locally during the second quarter of the Super Bowl XLII last year. The commercial featured coach Sam Vincent and forward Jared Dudley, who were then members of the National Basketball Association’s (NBA) Charlotte Bobcats. The two are shown on the floor of the local NBA arena, helping a member better understand the credit union’s financial services during a timeout in a basketball game. Charlotte Metro said it experienced dramatic increases in online account-opening and savings deposit activity after the ad aired … * WASHINGTON (6/1/09)--The Credit Union Challenge Cup of the Credit Union Cherry Blossom Ten Mile Run held April 5 in Washington was awarded to FRB FCU's "Cash Us If You Can" team at the credit union's annual meeting at the Federal Reserve Board May 27. The team scored 3:03:31, setting a new record since credit unions became the title sponsor of the run in 2002. From left are: Theresa Mann, CEO, FDIC FCU and Credit Union Miracle Day (CUMD) vice chair; Mary Beth Muething, FRB FCU team and the fastest credit union female runner; Elizabeth O'Beirne, CUNA Mutual Group and CUMD Marketing Committee; Juri Valdov, Ret. CEO, Northwest FCU and CUMD chair; Jan Roche, CEO, State Department FCU and CUMD treasurer: Theresa Trimble, FRB FCU chair; Luisa Isaacs de Perez (FRB FCU); and Kevin Moore, FRB FCU team runner). Fastest credit union team male winner was Alvin Yew of NASA FCU's "Mercury" team. (Photo provided by the Maryland and District of Columbia Credit Union Association) … * PITTSFIELD, Mass. (6/1/09)--Greylock FCU donated $10,000
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to a "Homes for Our Troops" (HFOT) initiative to help build a house in western Massachusetts for a military veteran injured during his tour in Iraq. The Massachusetts Credit Union League is working with HFOT in supporting a home being built for Army Sgt. Peter Rooney of Worthington, Mass. Rooney, pictured here with his wife Suzanne, was injured when a vehicle he was riding in hit a roadside bomb on April 16, 2007 in Ramadi, Iraq. Recently Massachusetts league President Dan Egan sent a letter to the state's credit unions, urging them to mark the 100th anniversary of the founding of the credit union movement by supporting the HFOT effort. (Photo provided by Homes For Our Troops and Greylock FCU) … * RALEIGH, N.C. (6/1/09)--State Employees' CU (SECU) has unveiled plans for a 12-story branch and office facility in the State Government Complex in downtown Raleigh. The 240,000-square-foot building will include a six-story parking deck, a credit union branch, and about 77,500 square feet of office space reserved for future growth. The $16.7 billion asset credit union plans to begin construction in the fall. The credit union said its board had been considering building the facility for several years and decided to implement the plans to bolster the state's economy and to take advantage of much lower- construction costs. It is being built with the State of North Carolina, which plans to build new offices for the Department of Environment and Natural Resources, and to expand the state Museum of Natural Sciences, which is next to the credit union site. The coordination will save substantial costs for both SECU and the state, said SECU in a press release. The site sits on the location of the credit union's first branch office. According to Patty Munns, SECU's senior vice president of facilities services, SECU is planning to open about 15 new branches in the next fiscal year. It will have one office in each of North Carolina's 100 counties by the end of fiscal year 2010 (Photo provided by State Employees' CU) … * PHOENIX (6/1/09)--Arizona State CU has received four Hermes Creative Awards, which honor creative professionals who concept, write and design traditional and emerging media. The Phoenix-based credit union won awards for its website, 2007 annual report, and its YourSavings Economic Stimulus newsprint and an honorable mention for a corresponding radio spot. The awards are judged by the Association of Marketing and Communication Professionals--an international organization with marketing, advertising, public relations, media and web specialists. Arizona State CU has $1.3 billion in assets ...

Half of Irelands CUs may report losses

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DUBLIN, Ireland (6/1/09)--As many as half of Ireland’s 405 credit unions could report losses this year. The driving forces behind credit unions heading into the red are losses on investments and a sharp uptick in members becoming delinquent on their loans, analysts said (Irish Independent May 29). Most of the nation’s credit unions have sustained significant losses in bank bonds--known as perpetual bonds--which now are worth a fraction of their original value in the wake of the worldwide banking collapse, analysts added. Also, the inability of as many as 180 of Ireland’s credit unions to pay dividends this year will lead to a “catastrophic” run on members’ savings, the Irish League of Credit Unions (ILCU) warned (The Irish Examiner May 29). Losses at credit unions and the need to bolster cash reserves under new regulations could lead to a crisis, the league said. Kieron Brennan, ILCU chief executive, asked the nation’s Financial Regulator not to introduce strict new reserve ratios in September, which will mandate a statutory reserve of 10% of total assets for the country’s 405 credit unions. The ILCU said the new regulations will lessen credit unions’ ability to pay dividends to their 2.2 million members.

PSECU to help potential state budget impasse

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HARRISBURG, Pa. (6/1/09)--With the possibility of a potential state budget impasse, Pennsylvania State Employees Credit Union (PSECU) said it will reach out to its members who may be affected if a budget agreement is not reached by July 1. If there is an impasse, the credit union has created a special loan program for state employees who are PSECU members. Employees who stay on the job, but don’t receive a paycheck can apply for a 0% Annual Percentage Rate (APR) loan (Life is a Highway May 29). For members who meet the credit criteria, the 0% rate will be available up until 60 days after the governor signs the new budget into law. After 60 days, the loan will begin accruing interest at 3.9% APR until paid in full. Members participating in the loan program will have the option of borrowing up to $1,000 per pay period. PSECU said it also is encouraging state employees who experience financial hardship with their account from any impasse to contact the credit union about additional ways PSECU can assist them. “This loan is an example of how we haven’t lost touch with our history and purpose,” said Gregory A. Smith, PSECU president. “When we were formed 75 years ago, state employees banded together to form a credit union to help one another through hard times. What was true 75 years ago is still true today--PSECU is still a cooperative financial institution that uses the strength of all to help members in need.”

Wisconsin league monitoring anti-payday loan bill

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PEWAUKEE, Wis. (6/1/09)--The Wisconsin Credit Union League is monitoring an anti-payday lending bill announced Thursday in the state that would cap rates on payday loans. Under the bill, payday lenders could not charge more than 36% in annual interest on loans. Wisconsin in the only state that doesn’t cap the rates for licensed lenders, said state Rep. Gordon Hintz (D-Oshkosh), the bill’s author. The average interest rate for a payday loan in Wisconsin is 525% (Associated Press May 29). The league said it is reviewing the bill’s language and hasn’t decided yet whether it will support the measure. While lenders in the state argue the measure would shut down some of their lending centers, credit unions can help consumers with payday loan alternatives that cost less than half of what traditional payday lenders charge, said the league. Credit unions also encourage members to save money, receive financial counseling and make better choices to transition into more traditional loan products with lower rates, said Brett Thompson, Wisconsin league president/CEO. “Because not-for-profit credit unions exist to serve members, not drive profits, a credit union offers loan terms in members’ best interests,” Thompson said. “Lawmakers want to protect consumers because for-profit, non-traditional lenders don’t operate that way.” “While the Federal Reserve considers the minimum profitable loan to be $2,400, almost 90% of Wisconsin credit unions would grant a $500 loan to help a member and more than 75% of them would make a loan of just $100--all without the excessive costs that typify storefront lenders,” the league said. Credit unions also offer help to consumers through REAL Solutions, which helps families improve their financial position by encouraging saving and investing, the league said. Wisconsin had 530 licensed payday lenders in 2008, according to the AP.

Maine league announces board officers

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WESTBROOK, Maine (6/1/09)--The Maine Credit Union League elected its 2009-2010 slate of board officers during its recent annual meeting and convention. Officers are:
* Chairman Richard Dupuis, president/CEO, Five County CU, Bath; * Vice Chairman David Rossignol, president/CEO, NorState FCU, Madawaska; * Secretary Gail Richardson, president/CEO, Midcoast FCU, Bath; and * Treasurer Richard Lachance, president/CEO, Maine Education CU, Augusta.
Normand R. Dubreuil, president/CEO, Maine State CU in Augusta, was elected to serve another three-year term as an at-large director.

CU helps Fort Hood troops moving to Colo.

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FORT HOOD, Texas (6/1/09)--Security Service FCU staffers traveled to Fort Hood, Texas, for a weeklong community fair earlier this month to help the U.S. Army’s 4th Infantry Division prepare for its relocation to Fort Carson, Colo. More than 3,000 troops attended the fair. The troops will be reassigned from Texas to Colorado as part of the most recent Base Realignment and Closure (BRAC) Commission action.
SSG Michael Cruz receives assistance from Security Service FCU representatives Kyung Adams (right) and Kelly Pils at the Fort Hood Community Fair. The fair was held to help soldiers and their families from the U.S. Army’s 4th Infantry Division prepare for relocation to Fort Carson, Colo. (Photo provided by Security Service FCU)
To help prepare the soldiers and their families for the move, realtors, school districts, homebuilders and others were invited to help the troops make a smooth transition to their new location . They provided information about the Colorado Springs area, where Fort Carson is located. Several Security Service employees from its Texas and Colorado operations helped familiarize the soldiers with the credit union, offered information about available services, and assisted attendees with financial questions, including questions about home finance and other products and services. Security Service has operations in three major Colorado market areas, including 14 service centers with one located on the Fort Carson Army Post. The San Antonio-based credit union--the official credit union for Fort Carson--has a long-term relationship with the post and its substantial military population. “Our ultimate goal was to help the military men and women make their transition from Fort Hood to Fort Carson more comfortable,” said Mike Martinez, senior vice president for SSFCU. “We want the soldiers affected by the move to know that they can count on us for any financial advice or assistance they may need as they transition from central Texas to southern Colorado. We are just glad we could be on-site to help them.”

Scholarships announced for CU youth advocates

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COLUMBIA, S.C. (6/1/09)--The National Youth Involvement Board (NYIB)
announced eight credit union professionals will receive NYIB's annual scholarships to aid in promoting leadership development related to youth services and financial education. The awards cover conference and education fees. Five recipients will attend the NYIB Conference Aug. 3-6 in Tempe, Ariz. One will attend the World Council of Credit Unions' (WOCCU) World Credit Union Conference July 26-29 in Barcelona, Spain, and two will attend the National Credit Union Foundation's (NCUF) Credit Union Development Education (CUDE) Program, whose next session is Aug. 12-18 at Bainbridge Island, Wash. Winners will be recognized at the 2009 NYIB Annual Conference, where the group's delegate of the year and volunteer of the year will also be announced. Receiving NYIB Regional Scholarships are:
* LaTonya Allen, member service representative at GPO FCU, Washington, D.C., the East Region Scholarship; * Lauren Mayhew, marketing director at Daviess County Teachers FCU, Owensboro, Ky., the Central Region Scholarship; and * Joann Bergrud, marketing manager at NorthStar Community CU, Maddock, N.D., the West Region Scholarship.
Amy Jo Johnson, education director at the Mid-America Credit Union Association, Bismarck, N.D., will attend the NYIB Conference on the Robert L. Curry Scholarship and Award, named for the former president/CEO of CUNA Mutual Group. Another NYIB Conference participant--Cherise Hunter, youth programs VISTA at Syracuse (N.Y.) Cooperative FCU--will attend with the Serving the Underserved Scholarship, which recognizes individuals working with credit unions designated as serving low-income or underserved markets. Three other winners will participate in other education through NYIB-funded awards. They are:
* Stacey Walker, board member at XCEL FCU, Secaucus, N.J., to attend WOCCU's World Credit Union Conference; * Jeremy Cybulski, youth and community development officer at Coop Services CU, Livonia, Mich., to attend NCUF's CUDE program; and * Shannon Tackett, communications officer for Northwest FCU Foundation, Herndon, Va., also toll attend NCUF's CUDE program.

Nonprofits are key to improved N.Y. economy

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NEW YORK (6/1/09)--In the face of tightening credit and budget cuts, community development financial institutions (CDFIs) continue to lend and provide financial services to their communities--creating jobs, building affordable housing units, and supporting small businesses in urban and rural areas across New York State. This was the message heard by more than 50 community lending and development organizations at the annual New York Coalition of CDFIs Statewide Conference, May 7 in Albany, N.Y. The conference was organized by the National Federation of Community Development Credit Unions.
From left, Ron Ehrenreich, treasurer, Cooperative Federal CU, Syracuse, N.Y.; Melanie Stern, assistant director, Federation Community Development Investments and New York Coalition of community development financial institutions co-coordinator; and David Raynor, executive director, Leviticus 25:23 Alternative Fund, Elmsford, N.Y., meet at the annual New York Coalition of Community Development Financial Institutions Statewide Conference, May 7 in Albany, N.Y.
More than 100 individuals attended to hear about the financial “state of the state” and to discuss the economic downturn’s impact on low- and moderate-income communities. Attendees heard from speakers of state agencies, and experts in the fields of microfinance, homeownership and foreclosure prevention. New York Gov. David Paterson sent a letter confirming the important role CDFIs play. It said: “New York relies upon diversity within its financial services industries. Community-based institutions have far-reaching effects on our overall economic growth and are recognized for the services they provide to New Yorkers of all income levels. CDFIs in New York continue to lead with vision and fresh ideas that help strengthen local and national economic structures.” Jeffrey Metzler, vice president of Empire State Development Corporation (ESD), the state agency responsible for supporting New York’s CDFIs, discussed the expansion of funding for ESD’s economic development programs aimed at small businesses, including an additional $2.5 million, or a 170% increase, for the CDFI grant program aimed at small businesses. While the increase in lending capital for small businesses is welcome, the coalition has sought more substantial support for the full range of CDFIs’ activities. The coalition reached a major milestone in 2007 when the New York State CDFI Fund was signed into law. However, not a single state dollar has been directed toward the new fund, the federation said. “One of the coalition's major goals in 2010 is to ensure that there is a direct allocation for the New York State CDFI Fund in the state budget,” said Federation President/CEO Cliff Rosenthal. “CDFIs are experts at leveraging public monies with private funds, and our research has shown that just a $15 million investment from the state would create as much as $150 million in direct investments in our communities. Our hope is that with adequate support, the New York State CDFI Fund will bring a renewed emphasis for economic development of individuals and small businesses, complementing ESD's traditional large-scale economic development projects.”
Carol Wayman, legislative director at Corporation for Enterprise Development, in Washington, D.C, discusses the American Recovery and Reinvestment Act and its values to community development financial institutions. (Photos provided by the National Federation of Community Development Credit Unions)
Carol Wayman, legislative director of the Corporation for Enterprise Development in Washington D.C., explained that entrepreneurship and microenterprise are being embraced by President Barack Obama and congressional leaders. CDFIs are recognized as critical to the nation’s economic growth and as an integral part of the solution to the country's economic woes, she said. Also, staff of the U.S. Treasury's CDFI fund announced that President Obama's fiscal year (FY) 2010 budget requests $243.6 million for the CDFI Fund--more than doubles the $107 million appropriated for FY 2009. Conference organizers said they hope Gov. Paterson will see the need for more funding in coming years. “Greater support from the state will help position New York CDFIs to access increased federal support, and it is essential that New York State CDFIs be prepared to tap into this important source of funds,” said Melanie Stern, federation assistant director of Community Development Investments and a coordinator of the CDFI Coalition. “CDFI investment will help jump-start local economies and go a long way toward helping struggling New Yorkers through the economic recession.”