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Corporate One releases financial statements for March

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COLUMBUS, Ohio (5/7/10)--The $3.7 million asset Corporate One FCU reported its unaudited financial statements for the three months ended March 31, noting that it remains in a positive Reserves and Undivided Earnings (RUDE) position at $25.7 million, with its members' capital shares and paid-in capital intact. Earnings for the quarter totaled $2.17 million, exceeding the Columbus, Ohio-based corporate's budget by $1.42 million. Net interest income was roughly $481,000 more than budgeted, and net settlement income was $143,000 greater than budgeted, largely due to better-than-expected sales of its off-balance sheet products, namely SimpliCD, the corporate said. The financials are on its website. Operating expenses were roughly $403,000 under budget. Corporate One's coverage ratio, which measures the amount of gross settlement expense and total operating expenses covered by gross settlement income, was 87.1% for the period, the corporate said. During first quarter, Corporate One recorded other-than-temporary-impairment (OTTI) charges of $1.56 million related to credit loss on nine mortgage-related securities. Total capital was $169.3 million--which includes the $25.7 million in RUDE, membership capital shares of $117.9 million and paid-in capital (PIC) of $25.7 million. Capital decreased about 20% or $43.2 million since March 31, 2009. That decrease was due to $44.1 million in OTTI charges related to securities, as well as $15.1 million in charges related to U.S. Central FCU capital investments. Corporate One's financial statement noted that if it had classified members' share accounts as liabilities, in accordance with generally accepted accounting principles, members equity as of March 31 would have been at a $159.8 million deficit. Its mortgage-related securities have a book value of about $549.9 million as of March 31, representing 14% of the book value of Corporate One's total investable portfolio. Monoline insurers have accounted for OTTI charges. Corporate One has placed reliance on Financial Security Assurance Inc. and MBIA Inc., which are paying principal and interest claims. Deterioration of these insurers could result in additional OTTI charges, the corporate said. Because monline insurer Ambac has a temporary moratorium on claims payments while it undergoes a plan of rehabilitation, the corporate said it would "continue to place reliance on Ambac for full repayment. However, the realization of surplus note proceeds is subject to many factors including a minimum capital requirement, which in turn is a function of the ultimate performance of Ambac's insured exposures." The corporate noted that since 2008, it recorded total OTTI, or unexpected credit losses, of $52 million. "To date, we have had principal shortfalls of approximately $4.60 million," Corporate One's report said. Its regulatory capital ratio was nearly $169.3 million, with a regulatory capital ratio of 4.53%, while reserves and undivided earnings totaled $25.7 million for a retained earnings ratio of 0.69%.

Southwest Corporate announces March 2010 financials

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DALLAS (5/7/10)--The $9.9 billion asset Southwest Corporate FCU has released its unaudited financials as of March 31. Net income for first quarter totaled $6.69 million, an increase of $525,000 over first quarter 2009. Actual year-to-date net operating expense for the quarter was nearly $1.14 million, under budget by $48,000. Total net loss on investments for first quarter was $697,000. The Dallas-based Southwest Corporate's exposure to monoline insurers, which have been impacted by the same events that caused loss projections on the corporate's mortgage-based securities, totals nearly $474.6 million (par value) or $456.5 million (amortized cost) or a fair value of nearly $243.2 million, according to the financial report. The corporate's largest monoline insurer is Ambac Financial Group, which is undergoing a rehabilitation plan. The corporate had placed a reliance on Ambac to pay future principal or interest shortfalls at 90%. However, because detailed financial information about Ambac's rehabilitation plan and collateralized debt obligation (CDO) exposures are limited and ongoing, the corporate has not yet determined if it needs to make any revision to its expectation on Ambac's ability to pay claims, the report said. It cited court filings in which Wisconsin Insurance Commissioner Sean Dilweg states that "full payment to policyholders remains possible even in spite of Ambac's presently troubled financial condition." "Southwest Corporate will be better able to assess the overall impact of the various Ambac developments as additional information becomes available in the coming months. At March 31, 2020, assuming no further payments from Ambac are received for principal and interest shortfalls, the possible additional other-than-temporary impairment could be $43,869,000," said the financial report. Southwest Corporate's capital ratio at March 31 is 1.36%, while its retained earnings ratio (retained earnings over net average assets) is 0.08%. In accordance with NCUA guidance letter 09-CU-10, the corporate depleted members' capital accounts in January by $134.6 million to cover the retained deficit that existed at Dec. 31, 2009. After the depletion actions taken in October 2009 and January 2010, membership capital shares have been depleted by nearly $293.4 million or 72.68%.

NACUSO What industry does now will echo in eternity

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LAS VEGAS (5/7/10)--The National Association of Credit Union Service Organizations (NACUSO) 2010 Annual Conference featured speakers with outside-the-industry perspectives at this year’s conference in Las Vegas, April 25-28. NACUSO CEO Tom Davis, who hosted the event, encouraged credit unions to embrace the unknown. “What we do in this industry now will echo in eternity,” he said. Credit union and CUSO executives, board members and vendors participated in applied workshops and breakout sessions focused on embracing and achieving a meaningful and transformative level of sustainability through collaboration and the networked business model. Jeff Russell, president/CEO of TMG Financial Services, quoted William Gibson, saying began his presentation with the words “The future is already here… It’s just unevenly distributed.” A main theme of the event was “Collaboration will be most beneficial when we can leverage the collective balance sheets of credit unions to benefit consumers--to collaborate with capital,” he said. Russell challenged participants to set aside everything they know about capital and business growth and the traditional credit union mindset, become an entrepreneurial visionary, and consider the impact of a new networked business model on the credit union industry. Sarah Canepa Bang, CEO, Financial Service Centers Cooperative, presented “The New Customer Facing Technology: Using Self Service Kiosks for Member Convenience and Continuity.” She provided some statistics about changing habits of consumer spending. Forty-seven percent of consumers report they will ‘always’ or ‘usually’ use self-service when choosing between a person or a self-serve option. This number jumps to 60% for consumers under the age of 35, according to a 2009 Self-Service Consumer Survey. Other speakers at the event included Jack M. Antonini, former vice chairman and president/CEO of USAA Federal Savings Bank, and Joe Batista, director and chief creatologist, Hewlett-Packard Company. For more information, use the link.

CU System briefs (05/06/2010)

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* DENVER (5/7/10)--Credit Union of Colorado is the official sponsor for the 2010, 2011 and 2012 soccer seasons for the Colorado Rapids. It will exclusively sponsor the "Rapids Rookie for a Day" program, which recognizes student-athletes who are well-rounded representatives of their school and communities. Ten winners will be selected throughout the season to participate in an official Rapids practice. They will receive a Rapids jersey and tickets to a Rapids home game and be recognized at halftime at five games. The credit union also will sponsor the "Community Coach" program recognizing youth soccer coaches who go beyond their day-to-day coaching responsibilities to make a difference in their players' lives. Two winners will be recognized at Rapids home games. The sponsorship also includes naming a field within Dick's Sporting Goods Park as "Credit Union of Colorado Field" ... * COLUMBUS, Ohio (5/7/10)--Today is the last day of John Reardon's service as superintendent of the Ohio Division of Financial Institutions with the Ohio Department of Commerce. He has served since his February 2007 appointment by then-Gov. Ted Strickland. Ohio Credit Union League President/CEO Paul Mercer noted that Reardon was proactive, accessible and supportive of Ohio's financial institutions. "The league is grateful for Superintendent Reardon's close attention to and strong support of the credit union movement in general and Ohio's state-chartered credit unions specifically, and we wish him success in his future endeavors," Mercer said. He added the league would be in close contact with the administration during the transition and will advocate for consideration of potential successors with demonstrated understanding of and support for Ohio's credit unions (eLumination Newsletter May 5) ... * WYOMISSING, Pa. (5/7/10)--One of Discovery FCU's billboards located in the outfield of the Reading (Pa.) Phillies baseball team was prominently displayed in a photo in The New York Times (April 27). The story was about last year's No. 1 draft pick--Harrisburg Senators pitcher Stephen Strasburg (Life is a Highway May 6). In the photo with the credit union's billboard, Strasburg was shown performing warm-ups before a game against the Reading Phillies last week. Strasburg has since moved up a level to Syracuse. The $129 million asset credit union is based in Wyomissing, Pa. To see the photo, click on the link ...

Private student loan delinquency down in 4Q

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CHICAGO (5/7/10)--Private student loan delinquency--the ratio of student loans 90 days or more past due--decreased about 4.9% in the fourth quarter, according to an analysis of student loan trends by consumer credit reporting agency TransUnion. That figure is down from a high of 6.34% in third quarter 2009. The quarterly decrease represents a reversal of a five-quarter trend that began in second quarter 2008 (Marketwire via Comtex April 27). Thirty-day student loan delinquency rates experienced a 6.6% drop, down from a high of 8.06% in the third quarter. However, year-over-year for the fourth quarter, the 30- and 90-day delinquency rates are up from 2008 (10.4% and 11.67%, respectively) and from 2007 (16.93% and 15.52%, respectively). The average national private student loan debt per loan on active accounts for the quarter was $17,754. The average account balance for delinquent student loan accounts 90 days or more past due was $13,033. States with the highest volume of new private student loans during the quarter were California, Texas, New York, New Jersey and Minnesota, representing 38% of all new loans for the country. The analysis is based on information culled from TransUnion’s U.S. consumer credit database and proprietary analytic capabilities focused on student lending. Of the student loans contained in the database, roughly 20% are estimated to be private loans, also known as “alternative” loans, and 80% are estimated to be federal or government-backed loans--Stafford, Perkins, PLUS and GradPLUS. The highest private student loan delinquency rates, defined as 90 days or more past due, were in Florida (9.44%), Mississippi (9.09%) and Tennessee (9.07%). The lowest delinquency rates were found in Vermont (3.28%), New Hampshire (3.60%) and North Dakota (3.75%). Areas showing the greatest percentage drop in delinquency from the previous quarter were Mississippi (14.45%), Alabama (12.41%) and Kentucky (10.84 %). While the U.S. experienced an 11.67% increase in private student loan 90-day delinquency from the previous year, state-level increases are varied. For example, areas showing the greatest percentage increase were, for low student loan volume states, Vermont (29.80%) and Idaho (24.66%). For higher loan volume states, Illinois (20.32%) and Massachusetts (21.75%) ranked at the top. Of the 50 states, only three showed a decrease year over year: Alabama (0.50%), Michigan (0.56%) and Louisiana (4.47 %). A number of credit unions have recently entered the private student lending market. CUNA Strategic Services has an alliance with one such loan provider, Fynanz. For more information, use the link.

Ohio CUs commit 150M to private student lending

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COLUMBUS, Ohio (5/7/10)--A collaboration of Ohio credit unions has stepped forward to commit $150 million in affordable student lending to college-bound Ohioans in response to the rapidly increasing gap between federal student loans and the cost of higher education.
Click to view larger image Ohio Credit Union League President Paul Mercer (right) presents a check from Ohio credit unions to Ohio college students for $150 million. Lori Jablonski, a mother of two college students from Toledo, and Miami University students Robert Hendricks and Chris McMillan accept the check. (Photo provided by the Ohio Credit Union League)
Ohio Student Choice is an alliance of 11 Ohio credit unions that each committed at least 1% of their assets to student lending. The alliance was officially introduced Thursday at the Ohio Statehouse before state leaders, credit union supporters, parents and college students. The combined fields of membership of the participating credit unions encompass the entire state, said the Ohio Credit Union League. “If you are familiar with the credit union movement, then you know collaboration is something we do very well,” said league President Paul Mercer during a news conference at the Ohio Statehouse. “The lack of private student lending in the market is forcing Ohio’s future leaders to delay or even vacate their goal of earning a college degree. As lending institutions with capital on hand, credit unions cannot sit idly by.” In 2010, the average college student will receive $7,800 in federal loans while attending a public institution, according to the College Board. However, the average cost of tuition is $15,200, leaving students a gap of $7,400 to fill. For private institutions, that gap jumps to more than $35,000. The result is a funding gap increase of 57% for public institutions and 42% for private institutions since 2002. Adding to the problem is the demand for loans and the lack of private lending in the marketplace. The total combined amount lent to college-bound students in the U.S. in 2009 was $112 billion. In 2012, that is expected to rise to $135 billion. With banks scaling back their lending due to financial and regulatory pressures, the supply of loans will not equal the demand, said the league. “With many lenders pulling out of the secondary market, credit unions started asking themselves, ‘Where are these students going to turn,’” said Sharon Custer, CEO of BMI FCU, Dublin. Ohio Student Choice loans will feature competitive interest rates, zero origination fees, flexible repayment options--including deferment while in school--the ability to secure financing during students’ entire undergraduate career, and electronic loan delivery and disbursement. CU Student Choice, a credit union service organization based in Washington D.C., will assist the Ohio credit unions with loan processing. However, students interested in the loans should apply directly at one of the participating credit unions. Participating credit unions include BMI FCU, Cinco Family Financial Center CU, Cincinnati; Directions CU, Sylvania; Day Air CU, Kettering; Kemba CU, Cincinnati; Kemba Financial CU, Gahanna; Seven Seventeen CU, Warren; Ohio Educational CU, Cleveland; MidState Educators CU, Columbus; Midwest Community CU, Defiance; and Wright-Patt CU, Fairborn.

The 1 conference offers networking entertainment

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MADISON, Wis. (5/7/10)--Attendees of The 1 Credit Union Conference have access to additional events before, during and after the July 11-14 meeting in Las Vegas. The conference, co-hosted by World Council of Credit Unions (WOCCU) and Credit Union National Association (CUNA), offers a full educational program for the four-day event at the MGM Grand Hotel. Also, day tours in and around Las Vegas, tickets to stage shows, an executive breakfast series and a golf tournament are available to attendees at an additional cost. The 1 Credit Union Conference combines WOCCU’s World Credit Union Conference and CUNA’s America’s Credit Union Conference for this year only. The synergy has led to the inclusion of additional events on this year’s agenda. During the conference, six day tours will be offered for a fee. Participants can go on a Las Vegas city tour or travel to the nearby Hoover Dam and Lake Mead. Those interested in a “backstage view” can tour the set of Jubilee! to see the inner workings of a Las Vegas production show and meet the performers. For evening entertainment, blocks of tickets have been purchased for three stage shows: Barry Manilow, The Beatles LOVE Cirque du Soleil and Viva Elvis Cirque du Soleil. Tickets range from $135-$150 and can be purchased online after completing the conference registration.
Click to view larger image Bryce Canyon in Utah is featured as part of The 1 Credit Union U Conference post-tour in July. (Photos provided by the World Council of Credit Unions)
Conference attendees also can travel to Utah and Arizona for the National Parks and Route 66 post-conference tour. During the July 15-18 tour, participants can see Zion and Bryce Canyon national parks, Lake Powell and the Grand Canyon--all before following Route 66 back to Las Vegas. The conference will feature a learning and networking series for credit union CEOs and executives consisting of three breakfast sessions (July 13-15), featuring well-known business authors. The Executive Series focuses on credit union leadership issues. Each participant will receive presenters’ books as part of the program. A new event, the T-Up FORE WOCCU Golf Tournament, will debut in Las Vegas on July 10. The charity golf event will benefit The Global Women’s Leadership Network, a new WOCCU initiative designed to alleviate poverty through the empowerment of women around the world. The entrance fee of $250 per golfer includes continental breakfast and boxed lunch at Bear's Best Golf Course in Las Vegas. For more information, use the links.

Blanchard inducted into Cooperative Hall of Fame

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WASHINGTON (5/7/10)--Larry Blanchard was inducted Wednesday into the Cooperative Hall of Fame by the Cooperative Development Foundation during a dinner and induction ceremony at the Washington, D.C., Press Club.
Click to view larger image Larry Blanchard, right, who worked for every major credit union organization in the U.S., receives a standing ovation as he is inducted into the Cooperative Development Foundation's Cooperative Hall of Fame by CUNA Mutual Group President/CEO Jeff Post, left. Blanchard was the nominee of the Credit Union National Association and its Cooperative Alliance Committee. (Photo provided by CUNA Mutual Group)
Blanchard, who retired in 2008 as senior vice president for special projects from CUNA Mutual Group, was one of four people inducted and the only credit union industry representative. He now serves as a consultant for corporate and legislative affairs at CUNA Mutual. "I was so floored. I had no clue. To be nominated for such a prestigious award by the Credit Union National Association (CUNA) and its Cooperative Alliances Committee was an honor. I'm blown away," Blanchard told News Now. Blanchard was head of communications in CUNA's Washington, D.C., office during the late 1980s and early 1990s before going to CUNA Mutual Group. His nomination was approved by the CUNA Board. He is considered by many in the movement as a shaper of today's credit union landscape, according to the foundation. He was an employee and organizer of credit unions who worked for every major credit union organization in the U.S. He also was a credit union development educator who helped guide the evolution of the Campus Credit Union Council. He also was a leader of Operation Grassroots--an effort to maintain regulatory independence for credit unions. Others inducted were Glenn English (rural utilities), Werqu Mekasha (agriculture) and David Thompson (general).

WYCUP deadline draws near

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MADISON, Wis. (5/7/10)--The deadline for applications to participate in this year’s World Council of Credit Unions’ (WOCCU) Young Credit Union People (WYCUP) scholarship program is June 7. Five recipients will be recognized at The 1 Credit Union Conference, July 11-14 in Las Vegas. Recipients will receive all-expenses-paid trips to WOCCU’s 2011 World Credit Union Conference in Glasgow, Scotland. The program seeks individuals who have contributed to the development of their credit unions or the credit union movement, and who demonstrate the potential to employ their talents at the international level. Credit unions and credit union organizations that are WOCCU members can nominate leaders for the scholarship, WOCCU said. Nominees must be sponsored by a credit union or credit union organization to attend the conference, be 35 or younger on Jan. 1, and submit a completed nomination form with supporting materials to WOCCU. All nominees will be formally recognized in Las Vegas and invited to participate in events and networking sessions organized throughout the conference for participants under 35. Conference registrants under age 35 also qualify for a discounted registration fee, regardless of whether they compete for the scholarship. For more information, use the link.

Anderson Bordelon receive CDCUs highest honor

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NEW YORK (5/7/10)--The National Federation of Community Development Credit Unions announced the recipients of its 2010 Annie Vamper “Helping Hands” Award, its highest honor for community development credit union (CDCU) staff and volunteers. This year’s recipients are Rebecca “Becky” Anderson, board secretary and supervisory committee chairman, Northwest Baptist FCU, Seattle, and Marcus Bordelon, president/CEO, Appalachian FCU, Berea, Ky. They will receive their awards June 11 during the federation’s Annual Conference on Serving the Underserved in Pittsburgh. Anderson joined the credit union movement in the 1980s, when she was a member and leader of the Mount Zion Baptist Church Sojourner Truth Circle, a church women’s leadership group for young adults. When Northwest Baptist FCU expanded its charter in 1990 and 1994, Anderson helped gather support from other churches to join Northwest Baptist FCU’s field of membership. She has served on the credit union’s board of directors and supervisory committee, helped create the Youth Credit Union Program (YCUP) in 1993, and volunteered with the federation’s Youth Credit Union Network, serving as chairman of the task force responsible for coordinating the network's yearly youth conferences. Bordelon became president/CEO of the Central Appalachian Peoples’ FCU, now Appalachian FCU, in 1990. Under his tenure, Appalachian FCU grew to become a nearly $18 million CDCU serving more than 2,200 low- and moderate-income residents in rural Appalachia. Bordelon helped expand the credit union’s consumer lending into real estate and business loans. He also pushed for Appalachian FCU to become a member of the Federal Home Loan Bank and spearheaded the credit union’s predatory lending alternatives, developing underwriting policies so the credit union could offer affordable car loans and payday loan alternatives. Since 1993, the federation has honored 45 credit union staff and volunteers with the “Helping Hands” award. Vamper began her credit union career at College City Elks Lodge FCU in 1958. She worked for the Bureau of Federal Credit Unions and the National Credit Union Administration’s CDCU division. Vamper helped rebuild the federation with current President/CEO Cliff Rosenthal. Vamper served as chief financial officer, a regulatory analyst and on the federation’s Capitalization Program staff.