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Delinquency trend shows improvement CUNA

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WASHINGTON (5/10/11)--Tucked into the Credit Union National Association’s (CUNA) analysis of the monthly estimates of credit unions for March is asset quality news that might be even better than the slight decrease in delinquencies let’s on as a stand-alone number. CUNA Chief Economist Bill Hampel notes the number should be viewed in concert with the monthly report’s stated decline in loan volume. The CUNA analysis shows delinquencies dropping in March to 1.6%--a two-tenths of one percent decline from the 1.8% a month earlier. (See News Now March 3: Savings grow, loan-to-savings ratio lowest since 1994.) However, loan balances also declined--about 0.1% in March, and 1.1% in the first quarter. And credit union loans outstanding decreased 0.1% during March, compared with a 0.4% decline in February. “The loan delinquency rate in credit unions continues to decline even though the amount of loans has also declined. If the dollar amount of loans is falling and delinquencies are also falling--that means the delinquency rate is truly falling nicely,” Hampel points out. This is an important trend to note, Hampel explains, because recently the delinquency rate--the result of the country’s economic struggles since 2007--has rivaled that of the one witnessed in the early 1980s. That’s when the country was hit with “a double whammy” of recessions--one in 1980 followed by one in 1982, Hampel says. CUNA Monthly CU Data http://www.cuna.org/research/index.html

Payments corporate business plan moves forward

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WESTMINSTER, COLO. (5/10/11)--The Office of Corporate Credit Unions (OCCU) has given the Organizing Council representing a group of U.S. Central Bridge members permission to move forward with plans to create a payments corporate for the transition of certain payment products and services currently operated by U.S. Central Bridge. The payments corporate safeguards the continuity of payments products to credit unions and their members and limits any risk-of-service disruption. The Organizing Council will prepare and submit to the OCCU an organization and charter application for the payments corporate. While a final timeline has not been determined, the transition of products from U.S. Central Bridge will comply with National Credit Union Administration timelines, the OCCU said. The new corporate will not provide any liquidity or investment products and services. “In my view this is a win-win solution for corporates and credit unions,” said Brandt Peterson, executive vice president at SunCorp and a member of the Organizing Council for the payments corporate. “The payments corporate will rely on known expertise and proven technology, limiting risks associated with moving to another service provider and continuing to minimize credit unions’ administrative burdens through the use of existing delivery and support structure.”

CU CEO Interchange fee cap would hurt CU members

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PLYMOUTH, Mich. (5/10/11)--Capping debit card interchange fees could have unintentional consequences that would diminish important services that credit union members and small businesses depend upon, a Michigan credit union CEO wrote in a Sunday letter to the editor in the Lansing State Journal. “Government should not choose winners and losers in the marketplace,” wrote Steve Winninger, CEO of Lake Trust CU in Plymouth, Mich. “The Durbin amendment to last year’s Wall Street reform legislation does just that, and must be delayed, studied and fixed. The amendment was passed quickly without hearings. If it goes into effect in July, retailers will get $20 billion per year. Good for them, but bad for consumers. “Unfortunately, capping the charge retailers pay for each consumer debit card swipe will have the unintended consequence of squeezing consumers by potentially endangering vital services such as free checking, which millions of credit union families and small businesses count on,” he added. “For their debit card programs, credit unions absorb all the risks and costs of fraud,” Winninger wrote. “By cutting interchange fees by 75%, financial institutions of all sizes will feel an immediate impact and may be forced to cut programs rather than supporting consumers and making loans to help the economy. It will hurt those who can afford it the least--low-income households with basic checking accounts.” To read the letter to the editor, use the link. The Credit Union National Association (CUNA) opposes a proposal in Congress capping interchange fees and has told federal lawmakers that such action would harm consumers by driving up costs of debit cards, limiting consumer options, and harming competition and technological innovation. Interchange fees allow business costs, including the risk of consumer nonpayment, to be shared by the payments participants, CUNA said.

Wichita Falls CU pays it forward

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WICHITA FALLS, Texas (5/10/11)--Texoma Community CU, Wichita Falls, Texas, has established a fund for spontaneous good deeds. Each month $1,300 is distributed into the WOW fund. Credit union employees can use the money to give cash or gifts to members they feel could use a boost, a little inspiration or a token of appreciation. The fund was the idea of Kevin Scott, chief operations officer at Texoma Community CU and a student at Southwest CUNA Management School. The credit union cut the $1,300 it pays monthly for an ad in the yellow pages to fund the WOW initiative (LoneStar Leaguer April 22). The fund has been a source of goodwill for Texoma members, employees and their families. Texas was recently hit with wildfires that destroyed more than 100 homes, displacing families and their pets. Cindy Foster, an individual retirement account specialist at the credit union whose husband is a fire chief, knew what local firemen--both paid and volunteer--were going through to fight the fires. So Foster used money from the WOW fund to send cupcakes to every fire house in Wichita. The WOW fund even has local bank employees singing the praises of Texoma Community CU. One member who was having a bad day shared her story with a teller at the credit union. The empathetic teller dipped into the WOW fund to turn the member’s day around. The member was so impressed she personally delivered a plant to the credit union as a thank you. While she was delivering the plant, she casually mentioned that she had spoken with a teller at a local bank about what the credit union had done for her. The member said the bank receptionist couldn’t believe a financial institution would do that for one of its members. A credit union employee found out the name of the bank receptionist and learned she was about to undergo treatment for a minor medical condition. When the bank receptionist returned to work from her medical procedure, she was greeted with get-well flowers, courtesy of the Texoma WOW fund. But it’s not just members that are touched by the WOW fund. The credit union’s ACH processor works remotely from Great Falls, Mont. Her husband a career member of the Air Force was transferred there, but the Texoma wanted to keep the employee on because of her exceptional performance. After settling in their new home in Montana, the employee’s husband was deployed. Soon after, the employee, the mother of two young children, suffered a medical condition that resulted in an extended hospital stay. With no family nearby, a neighbor agreed to take care of the children. With money from its WOW fund, Texoma stepped in to help. The credit union paid to have dinner delivered each night to the family caring for the employee’s children, and also paid to have their house and the employee’s house cleaned.

New Zealand CU members see savings increase

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WELLINGTON, New Zealand (5/10/11)--NZCU South, a New Zealand credit union, cited a 30% increase in savings deposits in March--compared with the same time period last year--to support assertions that New Zealanders are saving more. The increase in savings in the credit union’s Christmas Saver scheme was mentioned as a highlight of a real change in attitude toward saving, according to Andrew Leys, CEO of NZCU South (Scoop.co.nz April 20). Rather than relying on credit cards to get them through the Christmas season and piling up debt, it was good that members have realized the benefit in starting their savings for Christmas early, Leys told the publication. In New Zealand, Christmas accounts on an annual basis help more than 28,000 credit union members nationwide maintain regular saving habits, Scoop.co.nz said. The savings trend bolsters New Zealand Finance Minister Bill English’s comments that New Zealanders are seeking ways to save rather than having to borrow after spending, Leys told the publication. NZCU members can regularly make deposits into their Christmas Saver accounts throughout the year. The money in the accounts is available before Christmas each year when cash withdrawals and transfers are free.

CUNA announces session at ACUC on regulatory threats

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MADISON, Wis. (5/10/11)--The Credit Union National Association (CUNA) announced Monday that a new general session about regulatory threats will be added to its 2011 America’s Credit Union Conference & Expo (ACUC) in San Antonio, Texas. Considered the signature event for credit union innovation and leadership, the ACUC’s theme is Big Time: Big Ideas and Big Opportunities. On June 21, the new general session will feature vital topics concerning regulatory threats to credit unions’ financial health, including interchange, defending the credit union tax exemption, the consumer financial protection agency, corporate credit union stabilization and member business lending. A panel of CUNA experts including Bill Hampel, senior economist; John Magill, senior vice president of legislative affairs; Mary Dunn, senior vice president and deputy general counsel; and Ryan Donovan, vice president of legislative affairs, will brief the audience on the latest regulatory and legislative updates and follow with a question-and-answer session. “Regulatory pressures are front-of-the-mind issues for credit unions,” said Dick Ensweiler, president/CEO of the Texas Credit Union League. “Despite the economy, credit unions have been there to support our members. Our commitment to service is what sets us apart. And protecting our ability to provide that high level of service is critical to our future. I’m pleased to be hearing from CUNA’s experts on the latest news from Washington and what we need to do to help ensure our future in the financial services marketplace.” This year’s ACUC also will hold a special session on supplemental capital. In identifying financial strategies that allow credit unions to achieve sustainable growth, CUNA Mutual leader Jon Lass will link financial strategies to competitive value propositions that can help credit union management avoid an increasingly crowded financial services marketplace. Harriet May, chair of CUNA’s board, will lead a general session on Tuesday. “I am looking forward to hearing from the speakers and the audience at this year’s conference,” May said. “The content of the ACUC program is sure to energize our movement and inspire all of us as we move forward together.” For more information, use the links.

Visterra CU offers 25K reward in slaying

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MORENO VALLEY, Calif. (5/10/11)--Visterra CU is offering a $25,000 reward for information leading to the arrest and conviction of the person or persons responsible for the murder of Carrie Thomas. Carrie Thomas, 23 years old, was found slain at about 11:45 p.m. March 27 after using the drive-through ATM at the credit union. She was making a withdrawal for down payment on a home she planned to lease with her boyfriend. Police have declined to say how much money was taken. Detectives are actively investigating this case and say they have no specific suspect or motive (Riverside Press-Enterprise May 7). Police release an enhanced surveillance photo from the ATM on Friday. About 300 people attended a march and prayer vigil April 12 for Thomas and other Moreno Valley crime victims. Thomas’ family has received letters from people nationwide.

Va. league board officer elections held

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LYNCHBURG, Va. (5/10/11)--Four members were elected to the Virginia Credit Union League’s board of directors at the league’s recent annual meeting in Norfolk, Va. Also, Cheryl Dickerson, manager of Fairfax (Va.) City FCU and Gaye DeCesare, chief administrative officer Belvoir FCU , Woodbridge, were re-elected to the board for three-year terms. Dickerson will represent credit unions with less than $50 million in assets in Northern Virginia, the Shenandoah Valley and Charlottesville. She has served on the board since 2007. DeCesare was re-elected to one of the board’s five at-large seats, representing credit unions statewide. She was first elected to the board 2008. Chris Williams, CEO of Henrico (Va.) FCU and Rose Gilliam, of DuPont Fibers FCU, Richmond, were also elected to the board. Williams will represent credit unions in Richmond, Petersburg and southern Virginia with $50 million or more in assets. Gilliam won one of the board’s five at-large seats, and will represent credit unions statewide. At the league board’s reorganization meeting, the following board members were re-elected to serve as the organization’s officers/executive committee:
* Chairman--Bob Petty, Bronco FCU, Franklin; * Vice Chairman--Suzanne Hughes, University of Virginia Community CU, Charlottesville; * Treasurer--Paul Phillips, Freedom First FCU, Roanoke; * Secretary--Dickerson.