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CU System briefs (05/07/2010)

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* KNOXVILLE, Tenn. (5/10/10)--UT FCU in Knoxville, Tenn., has created an account so members can donate funds for the storm recovery efforts in Middle and West Tennessee. Nashville and Clarksville and other cities were hit with floods after a storm stalled over the Southeast last weekend (The Knoxville News Sentinel (May 7). The credit union said it also will accept donated items such as canned food and water at all its branches to help victims of the flooding. Donated funds will go to the American Red Cross's Disaster Relief Fund. Items donated will go to the Salvation Army in Knoxville for distribution to centers in Nashville, said the newspaper ... * BELLINGHAM, Wash. (5/10/10)--GaPac Community FCU in Bellingham, Wash., has saved the day for the Bellingham Kids' Festival. The $51 million asset credit union signed up for a $10,000 sponsorship for the festival, which will take place after all this summer (The Bellingham Herald May 7). The city's Parks and Recreation Department had announced earlier this spring that the 20-year-old event would be canceled by budget cuts and staff constraints. GaPac Community CEO Katie Zowada, presented the idea to help to her board and received unanimous approval. The event will be the first Saturday in August. Parks department recreation coordinator Cori Kauk told the newspaper: "The community and GaPac stepped up. They've always supported the Kids' Festival. If they didn't step up and take on that sponsorship role, it wouldn't be happening." ... * PENSACOLA, Fla. (5/10/10)--A man entered a Pensacola, Fla., bookkeeping business Tuesday and kidnapped a woman after roughing up her husband and tying him up in an office. Then the robber forced the woman at knifepoint to leave the business and drive to the Pen Air CU, where she was forced to cash a check. A surveillance camera at the credit union captured the robber, wearing a ball cap and talking on a cell phone, standing behind the woman as she cashed the check. They then drove back to the business, where the robber fled with the money. The woman went inside, untied her husband, and called the Sheriff's Office. Deputies had not yet apprehended the man and did not announce the amount stolen (Pensacola News Journal and Escambria.com May 5) ... * DUBLIN, Ohio (5/10/10)--Julia Gee, CEO of Community United CU, Strongsville, Ohio, has been named to the Board of Trustees of the Ohio Credit Union Foundation. She was appointed to a vacant at-large category position. Gee will serve the remainder of the term, which expires in 2013, according to the Ohio Credit Union League (eLumination Newsletter May 5) ...

Dump that sucker for a CU says ICBS MoneyWatchI

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SAN FRANCISCO (5/10/10)--CBS MoneyWatch has the latest media report of customers' dissatisfaction with banks and their migration toward credit unions. In a segment entitled, "Hate Your Bank? Dump That Sucker for a Credit Union!" MoneyWatch (April 26) asks in its online blurb for the video: "Are you sick and tired of the shenanigans? Don't want to play the games anymore? Then break up with your bank and join a credit union." In the video, MoneyWatch's editor-at-large, Jill Schlesinger, reports, that Seth Rosenblatt, a customer at Washington Mutual Bank when it collapsed a year and a half ago, was "so outraged he gave up on banks altogether and joined a credit union." Rosenblatt tells why he joined--he didn't want his money to be part of banks' shenanigans. Schlesinger reports that credit unions are seeing "their fastest growth in seven years due to public dissatisfaction with big banks." She lists the benefits of joining a credit union, compares rates on new car loans (4.82% at credit unions and 6.08% at banks). In the segment, Nate Burns of San Francisco-based Patelco CU, notes that "We pay attention to the members...they're not just a number." Schlesinger concludes that "credit unions offer a viable alternative" for consumers who want to break up with their bank. To view the video, use the link.

League letter in Iowa paper Help CUs help biz

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CEDAR RAPIDS, Iowa (5/10/10)--A letter in the Cedar Rapids Gazette last week from Iowa Credit Union League President/CEO Patrick Jury addresses member business lending (MBL) and appeals to Congress to "help credit unions help business." Congress' efforts in the bipartisan legislation "would support credit unions' ability to jump-start lending to small businesses by $10 billion in the coming year," at no cost to taxpayers, said Jury's letter (Gazette May 3). H.R. 3380, the Promoting Lending to America's Small Businesses Act, and S. 2919, the Small Business Lending Enhancement Act, would give the country's more than 8,000 credit unions more capacity to make small business loans to their members, Jury said. During the credit crunch, "Iowans are turning to credit unions for more of their lending needs. Last year, small business loans made by credit unions grew more than 17%. Iowa credit unions are in a position to do even more, allowing for greater capital expenditures, greater economic activity and job creation," the letter said. "However, as Iowa credit unions reach the 12.25% cap, they are forced to turn away qualified business owners in need of access to capital," he added. Raising the cap to 25% would make roughly $10 billion of additional, reasonably priced credit available to the nation's small businesses in the first year while generating more than 100,000 jobs, Jury wrote. "In Iowa, this would amount to approximately $137 million in new lending and more than 1,400 jobs," said Jury. "Credit unions offer a viable solution to the credit crunch small businesses are experiencing. Our industry supports this bipartisan legislation to help small business owners. We urge Congress to seize this opportunity and provide a common sense reform in the midst of this economic crisis for small businesses," Jury concluded.

Parity reg would enhance Massachusetts CUSOs

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BOSTON (5/10/10)--Massachusetts state-chartered credit unions and credit union service organizations (CUSOs) would receive new powers--perhaps by August at the earliest--under the state’s parity regulation. “This is an ongoing process that goes on every year to review the parity regulation,” Rob Kimmett, senior vice president of marketing and public relations for the Massachusetts Credit Union League, told News Now. “There were no major changes this year, just series of developments.” New authorities for credit unions would include providing:
* Additional types of employee benefit plans and authority to make investments to fund employee benefit plans that would otherwise be impermissible; * Correspondent services to foreign as well as state- and federally chartered credit unions; and * Payroll services.
New authorities for CUSOs would include:
* Purchasing an insurance agency; * Engaging in credit card loan origination, including the authority to purchase credit unions' credit card portfolios and retain them within the credit union affiliated structure; * Offering payroll processing, employee leasing services and stored value products; * Introducing two amendments to clarify that CUSOs may buy and sell loan participations, such as student, consumer and so-called member business loans that they are currently authorized to originate; and * Offering check cashing and money transfer services to certain nonmembers within the credit unions’ fields of membership.
The legislative approval process must be completed within 90 days, Kimmett said. Then the amendments of the regulation are sent to the Secretary of State for publication. In the best-case scenario, the regulation would be in place by Aug. 20, he added. “By working together, the credit union industry and the banking division can fine tune the regulation--going back and forth--and make it more efficient,” Kimmett said.

MoDOT CU bill not on hearing schedule

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ST. LOUIS (5/10/10)--A bill that would allow 10 highway department credit unions to remain in Missouri Department of Transportation (MoDOT) facilities has not been placed on the state Senate’s hearing schedule, according to the Missouri Credit Union Association. “It wasn’t placed on the hearing schedule, so HCR 70 won’t make it out of committee,” Amy McLard, vice president of public and legislative affairs, told News Now. “There is always the possibility it could be placed onto another bill in the last days of session, but not likely.” The credit unions were told Jan. 21 that they would be required to leave their locations by Sept. 30 and would no longer be able to process payroll and benefits through MoDOT after that date. Credit union employees were on MoDOT’s salary and benefits plan, but credit unions reimbursed the department for the costs. The department has since extended the date credit unions must leave to Dec. 31, 2012. The bill was assigned to a committee, but MCUA was told other bills of more importance took precedence (The Missouri difference May 7). It is sponsored by Rep. Mike Cunningham (R-District 145). Cunningham has no credit unions in his district. “He supported us and got the bill filed because he felt it was the right thing to do,” the association said.

Prime Financial CU resumes independent operation

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CUDAHY, Wis. (5/10/10)--Prime Financial CU has officially resumed independent operations with a new board of directors, a more stable market position and a clear path to build additional strength in the future, the credit union announced Thursday. The Cudahy, Wis.-based credit union had been in conservatorship and under the control of the Wisconsin Office of Credit Unions since March 2009. Christine Dawe, who was appointed by the state as interim CEO of Prime Financial last year, will continue to lead the credit union as it returns to normal operations. "We have worked hard--in partnership with the National Credit Union Administration (NCUA), the state, our employees and our members--to strengthen Prime Financial's overall position and performance," Dawe said. "Resuming independent operations with a new member board is a significant milestone." Board members include:
* Harry B. Staffileno, chairman; * Christine Timm, vice chairman; * Eric Moore, secretary; * Ralph DeVito, treasurer; and * Steven Bejma.
Suzanne Cowan, director of the Office of Credit Unions within the state Department of Financial Institutions, said her office "would work closely" with the credit union to ensure it continues "to operate in a safe and sound manner." The credit union was chartered in 1923 as the first credit union chartered in Wisconsin. It is a full-service $144 million asset credit union serving more than 32,000 members. All deposits are insured to $250,000 by NCUA.

Two Madison Wis. CUs to merge

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MADISON, Wis. (5/10/10)--Two Madison, Wis.-based credit unions have announced plans to merge. Madison News CU (MNCU) and Dane County CU announced they intend to merge Oct. 1, pending approval from MNCU’s members and regulators (The Wisconsin State Journal May 7). MNCU has 895 members and $7.7 million in assets. Dane County CU has 11,000 members and $105 million in assets. If approved, MNCU members will be members of Dane County CU. MNCU’s one location at Capital Newspapers in Madison would remain open and staff would be retained, the newspaper said.

NCCUL touts raising MBL cap in newspaper

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GREENSBORO, N.C. (5/10/10)--John Radebaugh, president/CEO North Carolina Credit Union League, voiced support for raising the cap on credit union member business loans in a Wednesday letter to the editor of the Greensboro News-Record. The letter cites the need for increased credit to small businesses and the limits of the current 12.25% member business lending cap (Weekly Update May 7). Radebaugh touted the major benefits of raising the cap, including increased capital to small businesses, job creation and the fact that raising the cap would not cost taxpayers. “Credit unions are seeing a noticeable increase in the demand for small-business credit,” Radebaugh wrote. “Yet some are unable to satisfy this demand, not because they are unwilling to lend, but due to the limits of this arbitrary cap.” He also called attention to North Carolina’s unemployment rate and the impact of raising the cap on joblessness. “If Congress raises the cap on small-business loans, more than 108,000 jobs would be created nationwide in the first year,” Radebaugh wrote, citing projections from the Credit Union National Association. “With more than 500,000 North Carolinians looking for work, I encourage Congress to raise the cap on lending to small businesses. Credit unions stand ready to help businesses create jobs.” Bills in both houses of Congress (H.R. 3380 and S.2919) would raise the business lending cap to 25% of assets. To read the letter, use the link.

CU testifies at Pa. ATM-surcharge hearing

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PHILADELPHIA (5/10/10)--Lee MacMinn, Pennsylvania Credit Union Association (PCUA) Governmental Affairs Committee member and president/CEO of Freedom CU, Warminster, testified Thursday about ATM surcharges on behalf of Pennsylvania credit unions before the State House Commerce Committee.
Lee MacMinn (right) of Freedom CU, Warminster, Pa., testifies before the State House Commerce Committee during a hearing in Philadelphia on ATM surcharging. (Photo provided by the Pennsylvania Credit Union Association)
The hearing was held at the Wharton School of Business in Philadelphia to gather input from stakeholders about ATM surcharging and disclosure, and preauthorized electronic fund transfers (Life is a Highway May 7). Although Regulation E provides a safety network for consumers, the hearing allowed MacMinn to explain what credit unions do for their members in these areas, PCUA said. MacMinn provided the committee with an overview of how credit unions have proactively responded to the issue of surcharging by joining networks like CU$, CO-OP Network, Allpoint, and Shared Branching, so members can access ATMs. State Rep. Rosita Youngblood (D-Philadelphia), the sponsor of the ATM surcharging bill and longtime credit union member, said she and her family feel that they all have a stake in their credit union and recommended that other financial institutions look at implementing programs such as CU$ for their customers. Payday lending and overdraft protection also were discussed at the hearing because some committee members have been hearing concerns from their constituents, said PCUA. State Rep. Curtis Thomas (D-Philadelphia), the sponsor of the electronic funds transfer bill, thanked credit unions for being the best weapon to combat predatory loans. Christina Mihalik, PCUA vice president of governmental affairs, also attended the hearing.

McNaught new CUDL board chair best practices awarded

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LAS VEGAS (5/10/10)--CUDL announced that it re-elected Marge McNaught as chairman of its board during the Auto and Mortgage Lending Symposium in Las Vegas last week. It also presented its best practices awards. McNaught, senior vice president, lending and support services, Premier America CU, Chatsworth, Calif., was re-elected for a second term as chairman. She has served on the board since 2003. CUDL also re-elected three individuals to three-year terms:
* Larry Wilson, president/CEO, Coastal FCU, Raleigh, N.C.; * John Lund, executive vice president, America First CU, Ogden, Utah; and * Joe Brancucci, executive vice president and chief operating officer, BECU, Seattle.
Terry Halleck, president/CEO of The Golden 1 CU, Sacramento, was elected vice chairman. Brancucci was elected secretary and Lund was treasurer. The board also recognized Jim Jordan, president/CEO of Schools Financial CU, Sacramento, for his service to CUDL. He served on the board for 12 years and was chairman from 2007 to 2009. At an awards ceremony during the symposium, CUDL also honored credit unions for best practices. Hermantown (Minn.) FCU; Texans CU, Richardson, Texas; and Tulsa (Okla.) Teachers CU (TTCU) received the CUDL Best Practice Award. OnPoint Community CU, Portland, Ore., and Security Service FCU, San Antonio, received awards for best practices in portfolio growth and risk management. The Golden 1 CU and Citadel FCU, Exton, Pa., received the Diamond Award for success in advancing their auto lending programs. Erie (Pa.) FCU and TTCU were recognized for marketing CUDL’s AutoSMART to members. AutoSMART provides credit unions with a vehicle shopping and research site they can customize for their members.

Iowa CUs serve the underserved via remittances outreach

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MADISON, Wis. (5/10/10)--Three Iowa credit unions that acted as money transfer agents for Hispanics through the World Council of Credit Unions’ (WOCCU) International Remittances Network (IRnet) recently documented their guidelines and recommendations in a report, “Reaching the Hispanic Market through Remittances.”
Click to view larger image Greater Iowa CU hired bilingual staff to better serve the Hispanic community. From left, teller Kristie Hollingsworth helps Jose A. Ayala send money home. (Photo provided by Michael Adams and the World Council of Credit Unions)
The institutions developed their Hispanic outreach strategies through WOCCU’s Credit Union Remittances Outreach Program (CUROP). The credit unions--Family CU, Davenport; Greater Iowa CU, Ames; and Village CU, Des Moines--were selected by WOCCU, the Iowa Credit Union League (ICUL), and Coopera Consulting, a subsidiary of the league. Initial results indicate that two of the three CUROP credit unions had higher volumes of remittance transactions during the program’s first year than a sample average of 21 other credit unions offering remittances through IRnet. The credit unions also benefited by cross-selling products and services to remittance senders. “By actively engaging with the Hispanic community, CUROP credit unions learned how to best tailor their services, and the community gained access to a host of financial services beyond remittances,” said Brian Branch, WOCCU executive vice president and CEO. “With ICUL and Coopera’s expertise, these credit unions became shining examples of what is possible with dedication, planning, marketing and follow-through.” With funding from the U.S. Agency for International Development, WOCCU designed CUROP to develop and implement a community outreach plan for membership extension and expansion to remittance-sending, underserved populations. The one-year program ended in March. WOCCU created IRnet in 2000. It is now working with the Texas Credit Union League to pilot an alternative remittance program that will expand the number of remittance providers for credit unions and foster competition to lower prices among firms and to benefit members. The Credit Union National Association (CUNA) has encouraged Senate Banking Committee Chairman Christopher Dodd (D-Conn.) to exempt credit unions or transactions routed through remittance programs administered by major central banks in the proposed regulatory reform bill. The definition of remittances in the recently introduced Senate financial regulatory reform package is “overly broad” and “would essentially make it impossible for credit unions to continue to offer any form of international electronic fund transfer services to their members,” CUNA and WOCCU said in a March 25 letter to Dodd. The language will affect any form of international electronic fund transfer services credit unions offer their members, whether or not those transactions are truly "remittances" sent by an immigrant home to his or her family, CUNA added.