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Northwest FCU car show generates 221000 in loans

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HERNDON, Va. (5/5/09)--Northwest FCU's members-only Car Show at its Herndon, Va., headquarters April 18 showcased 100 new vehicle makes and models and resulted in $221,000 in loans. The vehicles were from 13 area dealerships that participate in Northwest's auto locating service, said the $1.6 billion asset credit union. The four-hour event featured one-stop shopping, with a variety of makes and models on one lot, on-site trade-in appraisals and on-the-spot financing. Attendees also received a coupon with a 0.75% discount off Northwest's auto loan rates along with dealer incentives worth up to $300 on vehicle purchases. Nine vehicles were sold, and the credit union sold two cars from its selection of off-lease vehicles. "This event was mutually beneficial for our members, the credit union, and our network of dealers," said Mark Rumsey, auto resources manager at the credit union. "At a time when auto sales are down and consumers are experiencing economic challenges, it's exciting to have had such a positive response to this show."

MarylandD.C. and Virginia leagues to develop ad campaign

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COLUMBIA, Md. (5/5/09)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) and the Virginia Credit Union League (VACUL) are working together to develop an advertising campaign focusing on the credit union difference. According to MDDCCUA, representatives from credit unions in Maryland, the District of Columbia and Northern Virginia met recently to create a cooperative campaign employing radio, metro bus and Internet advertising (FOCUS Newsletter May 11). "The need is greater than ever for policy makers and consumers to understand that credit unions are not responsible for the conditions we face and that we will continue to act in the best interest of our members," said MDDCCUA. Media professionals will develop message points, determine ad placement in the region and analyze results. The campaign is scheduled to begin this month. It is being financed by the two credit union associations and contributions from their credit unions.

Former Hawaii league chairman Okimoto dies

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HONOLULU (5/5/09)--Humio Okimoto, former board member for the Hawaii Credit Union League (HCUL) and long-time credit union volunteer, died April 14 at the age of 83 at Maui Memorial Medical Center. Okimoto was an HCUL board member for eight years and its chairman for four years. He served the national credit union movement as a Credit Union National Association (CUNA) national director, as a member of CUNA’s future committee, and 20 years as a member of the CUNA Mutual Group board of directors, including a stint as its chairman. He was a pioneer in Hawaii’s credit union movement, and his service spanned half a century. He was secretary and president of the HCUL’s Valley Isle Chapter for more than a decade. Okimoto also served the statewide credit union movement as a member of the league’s annual convention, personnel, planning, ad hoc policy review, bylaws and finance committees.

Filenes Basement files for Chapter 11 bankruptcy

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BOSTON (5/5/09)--Filene's Basement, the Boston, Mass. discount store founded in 1909 by U.S. credit union pioneer Edward A. Filene, filed for Chapter 11 bankruptcy protection in Delaware Monday. It was the second time in 20 years, it has filed bankruptcy papers. The store said it will sell 17 of its 25 stores, including its flagship store in Boston, to Crown Acquisitions for $22 million (The New York Times May 5). The retailer, hit by sluggish sales at new stories and increased competition from other discount stores, owed $4.4 million to CIT Group Commercial Services, $1.1 million to Best Buy, and millions to others. It estimated it had $50 million to $100 million in assets and $100 million to $500 million in liabilities, said the Times. The retailer closed 11 underperforming stores in January and its parent company, Retail Ventures, was renegotiating leases for 25 stores and its corporate office and warehouse. Filene founded Filene's Basement to clear out excess merchandise from his father's store upstairs. The store helped earn millions for Filene and enabled him to donate $1 million (which today would amount to more than $20 million) to help organize credit unions in the U.S. During his travels, Filene discovered financial cooperatives operating in India's small villages in 1907. He returned to the U.S. and helped establish the first credit union in America--St. Mary's Bank CU, in Manchester, N.H., which celebrated its 100th anniversary in 2008. Filene hired Roy F. Bergengren to promote credit unions, and with Bergengren founded the Credit Union National Extension Bureau--the predecessor of the Credit Union National Association (CUNA). Filene also pioneered workplace practices such as the 40-hour workweek, minimum wages, profit-sharing plans and medical insurance for employees (News Now Aug. 2, 2005)

N.C. mortgage loan bill with CU provision clears committee

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GREENSBORO, N.C. (5/5/09)--A mortgage loan bill has cleared the North Carolina Committee on Financial Institutions with a key change that will benefit credit unions, the North Carolina Credit Union League announced Friday. The bill--the Secure and Fair Enforcement Mortgage Licensing (SAFE) Act--aims to reduce mortgage fraud. The bill’s original language did not include credit unions. “In reviewing the original bill, it was clear to our legal counsel that credit unions would have reported to the North Carolina Commissioner of Banks to comply with the SAFE Act,” said Dan Schline, North Carolina league senior vice president of association services. With the change, credit unions can report to their regulator regulator, the State Credit Union Division, instead of the State Banking Commission. A federal statute mandates that each state have a law such as the SAFE Act on the books by July 31. The bill now moves to the State Finance Committee.

CU savings rise loan growth to fall

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MADISON, Wis. (5/5/09)--The credit union movement’s capital-to-asset ratio fell to 9.58% in March from 10.26% in February as credit unions recognized the costs of the Corporate Stabilization Plan, according to Steve Rick, senior economist with the Credit Union National Association (CUNA). With earnings expected to be weak and savings growth strong, the capital-to-asset ratio could fall below 9% later this year, Rick added. Credit union loans outstanding decreased 0.1% in March, but rose 0.6% for the first quarter of 2009, according to the March CUNA monthly sample of credit unions. Fixed-rate first mortgages rose 1% during March, followed by increases in adjustable-rate mortgages (0.5%), used-auto loans (0.4%), and other mortgages (0.1%). Declining in March were other loans (4.1%), home equity loans (1.1%), credit card loans (0.7%), and unsecured personal loans (0.6%).
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Credit union savings balances grew 1.2% in March, the same rate as during March of last year. Savings growth for the first quarter of 2009 was 5.7%, compared with 5% for the same period last year. Growing in March were money market accounts (3%), regular shares (2.5%), one-year certificates (1%) and individual retirement accounts (0.7%). Share drafts declined 3.3% during March. “During the first quarter, credit union savings balances rose 5.7%, up from the 5% recorded in the first quarter of 2008,” Rick said. “U.S. households are changing their financial behavior by saving more, spending less, and trading down to less expensive substitutes. “Households’ decline in spending is reflected in credit union loan growth numbers,” he added. “For the first quarter, credit union loan balances rose 0.1%, down from 0.4% reported last year. For the full year, we expect loan growth to fall to 6%, the slowest since the 5.8% reported in 1998.” The movement’s overall capital-to-asset ratio decreased to 9.58% in March from 10.3% in February. The total dollar amount of capital ended the first quarter at $83 billion, a decrease of 6.5% from the previous month.
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The loan-to-savings ratio decreased to 78.8% in March from 79.9% in February. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 20%. Credit union 60-+-day delinquencies were 1.54% in March, an increase from 1.48% in February. “Credit union loan quality deteriorated further in March as the overall loan delinquency rate crossed over 1.5% to reach 1.54%,” Rick said. “With the unemployment rate expected to reach double digits over the next year, the delinquency rate is expected to climb over 1.75% in 2009.”

IBuffalo NewsI Many prefer CUs to banks

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BUFFALO, N.Y. (5/5/09)--Many consumers prefer credit unions to banks, according to The Buffalo News (May 4), which says attractive rates and friendly service are helping credit unions to grow. The article explains credit unions' history. In it, Patrick Keefe, vice president of communications at the Credit Union National Association, explains the structure and philosophy of credit unions. "Every saver in the credit unions owns the credit union, and it doesn't matter the amount they have in a credit union. Everybody has an equal share," Keefe told the publication. "Credit unions are democratically elected, volunteer-led, cooperatively owned and not-for-profit," Keefe noted. "That doesn't mean that credit unions do no realize a net return after paying all their bills. The real difference is a bank exists to maximize profit for shareholders. Credit unions exist to maximize service for members." The article makes mention of area credit unions such as Buffalo Metropolitan FCU, Buffalo Postal Community FCU, St. John Buffalo FCU, Cornerstorne Community FCU, and Kenmore N.Y. Teachers FCU. The newspaper article also discusses credit unions' focus on members, their difference from banks and the fact that credit unions are gaining momentum by improving their accessibility. For the entire article, use the link.

Fla. league letter to IMiami HeraldI stresses CU soundness

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MIAMI (5/5/09)--In a letter to The Miami Herald, Florida Credit Union League President/CEO Guy M. Hood stresses that credit unions overall are sound. The letter responds to bankers' attacks after the conservatorship of Eastern Financial Florida CU, a $1.7 billion asset credit union in Miramar, Fla., was announced. The credit union's situation is "an anomaly in the credit union movement and not reflective of credit unions as a whole," Hood writes. He reiterates that the credit union continues to be financially sound and each member's deposits are federally insured up to $250,000. "Credit unions are extremely responsible lenders. The Florida Bankers Association's agenda toward credit unions clearly nullifies any opinion they might offer concerning credit unions," he says. Although loan delinquency rates and charge-off rates at credit unions are edging up in the bad economy, as might be expected, "they are still low compared with those of commercial banks…" Hood adds. Credit unions continue providing better rates because they are member-owned and not-for-profit cooperatives, and although others are unable to lend, the credit union industry's lending is expected to increase in all categories, he says. He also mentions' credit unions' healthy capital-to-asset ratio of 10.9%, and the fact that credit unions are more highly regulated than any other financial institution. "What happened at Eastern Financial is not costing taxpayers one penny in terms of bailout or subsidy. Can that be said about banks caught in similar situations?" he concludes. For the full published letter, use the link.

Lehrers News Hour features work of CU

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NEW YORK (5/5/09)--Jim Lehrer’s “NewsHour” on PBS recently focused on helping low-income residents in New York’s Washington Heights, noting the work of Neighborhood Trust FCU. The NewsHour piece opened with a story about a hairdresser from the Dominican Republic who wanted to open her own salon but didn’t have the means to do so. Neighborhood FCU helped her come up with a budget, avoid bouncing checks, pay her bills on time and save the money she needed to eventually open the salon. Neighborhood Trust FCU is operated by Credit Where Credit is Due and was established by Mark Lavine, a Washington Heights schoolteacher. Lavine got to know the families of his students and was shocked by how few had bank accounts and how many used loan sharks and pawn shops to receive credit. Lavine raised money to open Neighborhood Trust, which has a bilingual staff and offers small loans to those with no credit. The credit union has 4,000 members and is located in a bus terminal under the Washington Bridge. Neighborhood Trust offers free financial counseling and has expanded to other parts of New York City. The credit union’s financial education classes have been more in demand with the down economy, according to NewsHour. Neighborhood Trust has $6.6 million in assets. To hear the newscast, use the link.

Hawaii league announces board of directors

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HONOLULU (5/5/09)--The Hawaii Credit Union League announced its 2009-2010 board of directors at its 71st Annual Convention April 25. On the board are:
* Chairman, Wallace Watanabe, president/CEO of Aloha Pacific FCU, Honolulu, Oahu; * Vice chairman, Gordon Sam, chairman of Pearl Harbor FCU, Waipio, Oahu; * Treasurer, Scot Tsuchiyama, manager of Kekaha FCU, Kekaha, Kauai; * Secretary, Alan Arai, president/CEO of Valley Isle Community FCU, Kahului, Maui; * Director, Albert “Benny” Rodero, chairman of Hamakua Coast Community FCU, Pepeekeo, Hawaii; * Director, Clayton Fuchigami, president/CEO of Maui FCU, Kahului, Maui; and * Director Melvin Chiba, president/CEO of Kauai Community FCU, Lihue, Hawaii.

IL.A. TimesI CUs most misunderstood banking bargain

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LOS ANGELES (5/5/09)--Nonprofit cooperatives such as credit unions are the most misunderstood bargain in banking, according to a Los Angeles Times article. Although credit unions offer higher rates for deposits, lower costs for loans and reduced fees for overdrafts and checking accounts, many consumers are confused about how to go about banking with one, the article said (May 3). “Many consumers have an old-school notion that credit unions are always exclusive clubs, only open to employees of a single company, members of a particular church, union or profession. But with many credit unions that’s no longer the case,” the article continued. To help consumers find a credit union, the article cited the locator tool on the Credit Union National Association's consumer web page, www.creditunion.coop, as a resource. The article’s author, Kathy Kristof, said she conducted a search of credit unions in 10 minutes and found five that could have accepted her, based on geography alone. Working as a teacher, engineer, broadcaster or public worker could yield access to a dozen credit unions or more, Kristof said. Kristof also noted that deposit rates are 25% better at credit unions than at banks and six of the top 10 earning checking accounts offered through www.checkingfinder.com were credit union accounts.

CU System briefs (05/04/2009)

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* CLEARWATER and SARASOTA, Fla. (5/5/09)--Sarasota Coastal CU is in new merger talks, this time with Achieva CU, based in Clearwater, Fla., according to a news release from Achieva. The two began initial discussions about the feasibility of a merger and will perform a due diligence review beginning this week, said Achieva, a $650 million asset credit union. If a merger is completed, the combined credit union would have more than $800 million in assets and 11 branches serving six counties in Florida. The merger requires the approval by the Florida Office of Financial Regulation and the National Credit Union Administration. If approved, the merger could be completed by the end of September. Last week the $235 million asset Sarasota Coastal CU called off a planned merger with MidFlorida FCU of Lakeland (News Now May 1) … * WORCESTER, Mass. (5/5/09)--Wilfred Cook, 34, was sentenced to five to eight years in prison after pleading guilty to charges of robbing a branch of Digital FCU Nov. 4 and assaulting two tow company employees with a knife during the getaway (Worcester Telegram & Gazette April 30 . After the robbery, Cook ran to a nearby tow yard near the getaway car. The yard's employees gave chase and grabbed him as he climbed a chain-link fence. Cook swung a knife at the employees, dropped some of the stolen money, escaped over the fence and left in a vehicle that belonged to his girlfriend. Cook also was sentenced to five years of probation after his release from prison and was ordered to complete a program for repeat offenders. * RALEIGH, N.C. (5/5/09)--All State Employees' CU (SECU) member credit cards now comply with the "Safe Credit Card Standards" recently issued by The Pew Charitable Trusts' Safe Credit Cards Project. The standards are designed to protect consumers from unfair and deceptive credit card practices and help educate consumers about how to evaluate competing card offers for financial fairness. SECU's board approved adopting the standards, as of last Friday. Under the standards, cardholders will be charged only the interest rate they agree to pay; fees will be imposed responsibly and will be transparent to the cardholder; cardholders will have enough time to review and pay their bills; and payments will be applied first to balances carrying the highest interest rate … * ALEXANDRIA, Va. (5/5/09)--HEW FCU is now a corporate sponsor of DC Divas, the local professional women's tackle football franchise, according to the Maryland and District of Columbia Credit Union Association (FOCUS Newsletter May 4). The partnership means the credit union will provide financial services and seminars to the team's players, staff and game attendees. HEWFCU will have a presence at each home game and will offer free membership to eligible potential members throughout the season. DC Divas is a members of the Independent Women's Football League … * GREENSBORO, N.C. (5/5/09)--The North Carolina Credit Union League has hired Lauren Whaley as its first director of legislative and regulatory affairs, announced Dan Schline, the leagues senior vice president of association services (Weekly Update May 1). Whaley joins the league from the Jennings public relations, branding and advertising agency in Chapel Hill, where she served as public relations and advertising account leader for nearly two years. Prior to that she was communications coordinator at Truliant FCU, Winston-Salem. Whaley will provide advice and assistance in managing state legislative affairs, monitor regulatory issues that impact credit unions in the state, and conduct training on relevant regulatory matters. Schline added that the league's long relationship with Amy Fullbright and the legal team at Hunton & Williams will continue. … * LOS ANGELES (5/5/09)--The Los Angeles Police FCU has donated 25 card readers to the Los Angeles Police Department to assist in the battle against card-related crime. The Magtek Inc. Mini Swipe readers will be used in each of its 23 stations plus at two stations scheduled to be open in the future. The department's Commercial Crimes Division receives 600 to 700 card-related identity theft complaints per month. The readers will help police during bookings of suspects. Officers can check magnetic stripes on credit, debit and gift cards to determine if the person arrested actually owns the card. The readers cost the credit union $85 each (ATM & Debit News April 30) … * HARRISBURG, Pa. (5/5/09)-- Maureen Moss, CEO/treasurer of Indiana Bellco FCU, based in Blairsville, Pa., died Wednesday after a short battle with cancer. She was 38, according to the Pennsylvania Credit Union Association (Life is a Highway May 4). Funeral services were Saturday …