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NEFE 59 of parents financially support adult kids

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DENVER (6/1/11)--Fifty-nine percent of parents are financially supporting adult children when they are no longer in school, reports a survey from a partner well-known to credit unions. The statistic reflects how the current economic and job landscape is presenting a bigger challenge than expected--for those who should be leaving the nest as well as their parents. Commissioned by the National Endowment for Financial Education (NEFE), in cooperation with Forbes.com, the poll was conducted by Harris Interactive in May. NEFE has worked with many credit unions in making classroom financial education presentations the past several years through its High School Financial Planning Program. Credit unions noting the intergenerational living trend can help their members--both the adult children and their parents--by addressing the impact the trend can have on the parents' finances, and by educating them on ways to encourage independence. In the survey, 65% of adult children--ages 18 to 39 who are not in school--believe the financial pressures faced by their generation are tougher than those experienced by previous generations. Parents agree, with 32% of parents indicating their own generation had it easier than their children's generation. "This doesn't surprise me. The job market is terrible for people my age. We all got our college degrees but there was no place to go. Even the fast food joints say we're overqualified," said one 29-year old member of University of Wisconsin CU, Madison, Wis., who has lived the past year with his parents. When he was laid off two years ago, he had saved enough money to stay afloat for eight months. He told News Now that he has turned in more than 2,000 resumes since he lost his job. He gets by on sporadic temp work but "hunting for a job is my full-time job." He worries about emergencies even though "I can make a dollar last longer than anyone I know. I have a 12-year-old car; no health insurance; and I absolutely hate depending on my parents." His parents aren't too happy either. They decided to foot the bill for catastrophic health insurance for their son. "He's taking care of his car insurance and his basic bills--the phone bill and his student loan and day to day expenses--and he helps out a lot in other ways, but he can't swing the health insurance, too, on what he makes," said his mother. According to the survey, 43% of parents providing the financial support do so because they are "legitimately concerned" with their child's financial well-being, while 37% said they struggled in the past and do not want their children to struggle the same way. "Parents are continuing their involvement longer than we expected," said Ted Beck, NEFE president/CEO. "The general sentiment is that financial pressures are higher for this generation. But if parents are going to financially support their adult children, they should first have a serious talk about their kids' expectations so that everyone protects their financial futures." He noted it is a mistake for parents to make sacrifices such as taking on extra debt or delaying retirement to help their adult child because they are putting their own financial future in jeopardy. Parents, the survey found, are providing support in these ways:
* 50% are providing housing; * 48% are helping with living expenses; * 41% are aiding with transportation costs; * 35% are providing insurance coverage; * 29% are handing out spending money; and * 28% are helping with medical bills.
Among the children at home, 42% said they contribute in non-financial ways, such as cooking, cleaning or child care, but 75% financially contribute to the household with:
* 52% chipping in toward groceries/other food expenses; * 34% helping with utilities; * 31% putting gas in the family car; and * 29% helping with the rent or mortgage.

Agency has latitude on CU-to-bank conversions

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WASHINGTON (6/1/11)--A Wisconsin budget amendment that aims to make it easier for state-chartered credit unions to convert directly to banks doesn't mean it will be easier for them to receive approval to convert. Federal law treats a conversion from a federally insured credit union to a mutual savings bank differently from direct conversions to stock issuing banks. The National Credit Union Administration (NCUA) would have wider latitude in its decision in the latter situation, said the Credit Union National Association (CUNA). Under Section 205 (b)(2) of the Federal Credit Union Act (FCUA), which governs conversions of federally insured credit unions to mutual savings banks, NCUA's role in the conversion process is generally limited to establishing guidelines for the conversion proposal, for proper notice and for ensuring a fair membership vote on the matter. But credit unions that are converting to something other than a mutual savings bank--such as a stock bank or stock thrift--must get approval from NCUA under Section 205 (c) of the act, which generally allows the NCUA Board to approve or deny a conversion to stock form based on a six-factor weighing analysis, said Michael Edwards, CUNA's senior assistant general counsel. NCUA has established specific regulations under part 708(a) of its rules for federally insured credit union conversions to mutual saving banks and for federally insured credit union mergers with banks, but not for direct conversions from a federally insured credit union to any form of stock institution. Conversions to a stock institution without a merger are therefore generally subject to the six-factor statutory weighing analysis on a case-by-case basis. The six factors that the NCUA Board would typically weigh for a conversion to a stock bank or stock thrift are:
* The history,financial condition and management policies of the credit union; * The adequacy of the credit union's reserves; * The economic advisability of the transaction; * The general character and fitness of the credit union's management; * The convenience and needs of the member to be served by the credit union; and * Whether it is a cooperative association organized for the purpose of promoting thrift among its members and creating a source of credit for provident or productive purposes.
In most situations, the NCUA Board would consider the six factors, and make a decision that was, on balance, the most appropriate under the facts. "The NCUA Board would likely have discretion in its decision so long as it's not acting in an arbitrary and capricious manner in light of the facts and the six weighing facotrs," Edwards told News Now.

CU in Oklahoma offers low-rate storm shelter loans

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OKLAHOMA CITY, Okla. (6/1/11)--An Oklahoma City-based credit union is offering special low-interest loans so Oklahomans can build storm shelters as protection from deadly tornadoes. Oklahoma was one of the states battered in the past few weeks by tornadoes. According to a local TV station, storm shelters are the safest place to be and can sustain the debris impact of a F5 tornado. Ten people in the state were killed recently by tornados. None were in a storm shelter--six were in their vehicles and four were inside their homes (KFOR-TV May 27). Communication FCU is doing its part to make storm shelters--which can cost $3,000 to $6,000--more affordable so Oklahomans can be safer, according to the $803 million asset credit union's website. It is offering loans specifically for the shelters at a 2.99% annual percentage rate for qualified borrowers. The 2.99% rate is not an introductory rate but the rate for the term of the loan, the credit union said.

CU System briefs (05/31/2011)

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* COLUMBIA, Md. (6/1/11)--The annual Maryland and District of
Columbia Credit Union Association's (MDDCCUA)Credit Unions for Kids bowling tournament--held May 17-18 at AMF Bowling Center, Alexandria, Va.--raised $11,787 for local Children's Miracle Network Hospitals. Nineteen credit unions sent 49 teams. Bowlers from Enterprise and Visions Ink. joined in . A 50/50 raffle both nights leveraged the donation. CUNA Mutual Group, MDDCCUA, Morgan Keller Specialty Contracts Group and Visions Ink donated items for the door raffle prize. Among those attending were, from left, Denise Goode of Johns Hopkins Children's Center, Erika Lanceskes of U.S. Postal Service FCU, Clinton Md.; and Patty Jasper-Zellner of Children's National Medical Center. (Photo provided by the Maryland and District of Columbia Credit Union Association) … * BANGOR, Maine (6/1/11)--Thaddeus Justice McDonald, 32, of Augusta, Maine, was charged with Class B robbery of the Penobscot County FCU May 25 in Bangor after using a taxi as the getaway vehicle. Class B indicates a weapon was not used in the incident. Police, told that the robber fled in a taxi, stopped the vehicle on a nearby highway and detained McDonald. the suspect. McDonald also was charged with a probation violation (Bangor Daily News June 1) … * MINNEAPOLIS (6/1/11)--A federal court Friday found a 23-year-old Mankato, Minn., man guilty of driving the getaway car in the robbery of a branch of Affinity Plus FCU, a $1.3 billion-asset, St. Paul-based credit union (7thspace.com May 28). The robbery took place Dec. 16 on the Minnesota State University campus in Mankato. A jury convicted Anthony Akiti on one count of armed credit union robbery and one count of obstruction of justice for driving the getaway car while co-defendant Chop Nguot Tang allegedly stole $17,078 at gunpoint from the credit union. Akiti and Tang each face a potential maximum sentence of 25 years in prison ... * SIOUX FALLS, S.D. (6/1/11)--Cory Bender, 30, of Huron, S.D., was sentenced to five months in custody and five months of home detention for burglarizing M-O FCU, Huron, in October 2010 (Associated Press May 20). Bender entered the credit union with a key he obtained from his job as a maintenance worker and stole $20,000 from a safe, breaking a window to make the burglary appear to be a forced entry, according to court records ...

CU CEO named to Michigan ORR committee

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LANSING, Mich. (6/1/11)--Patty Campbell, CEO of Christian Financial CU, Roseville, Mich., was one of 13 new members appointed by the state of Michigan’s Office of Regulatory Reinvention (ORR) to its Insurance and Finance Rules Committee. The committee will assist the ORR in identifying duplicative, obsolete, unnecessary or unduly restrictive rules affecting the insurance, banking and finance industries, said the Michigan Credit Union League Michigan Monitor May 31). The committee’s first meeting will be held this month in Lansing. “This process will hopefully assure that proper safety and soundness regulations and practices are in place, but without creating too many regulatory burdens and costs for credit unions,” said David Adams, league CEO. “Eliminating unnecessary regulatory hurdles helps credit unions lend and serve Michigan’s economy.” Michigan credit union rules were last reviewed and revised as part of the Michigan Credit Union Act modernization effort during 2004-2005. “Our goal is to ensure strong consumer protections remain in place while eliminating unnecessary and burdensome regulations,” said Steve Hilfinger, ORR chief regulatory officer and director. “These appointments will help the Office of Regulatory Reinvention identify these types of rules that are preventing business growth and job creation.”

PCUA board member challenges readers tax argument

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HARRISBURG, Pa. (6/1/11)--Pennsylvania Credit Union Association board member Paula A. Nihoff advocated for credit unions’ tax-exempt status in a May 26 Readers Forum letter to The Tribune Democrat. Nihoff, who is president/CEO, HealthCare First CU, Johnstown, Pa., was writing in response to a May 20 letter, “It’s time credit unions paid their ‘fair share.’” In 1937, Congress granted credit unions federal tax-exemption based upon their cooperative structure as financial institutions that are operated by and for their members, Nihoff explained. Credit unions operate as democratically cooperative institutions, serving only their members, on a not-for-profit basis. “Credit unions put people (their members) ahead of profit,” Nihoff wrote. She noted that 92 million credit union members receive benefits from better pricing on services as a result of the tax exemption, saving them $7.5 billion a year. “That savings is especially significant when measured against $1.5 billion in lost federal revenue that the government says is represented by the credit union tax exemption,” Nihoff wrote. To read the full letter, use the link.

Md. D.C. CUs recognized for marketingoutreach

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COLUMBIA, Md. (6/1/11)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) at its 25th annual awards ceremony presented 39 awards to 25 credit unions, in recognition of their marketing and communications and outreach activities. More than 70 credit unions attended the event May 25 in Columbia, Md.
OAS Staff FCU, Washington, D.C., won the late Christine DeWitt Memorial Award for Excellence in Marketing, Best of Show at the 25th Maryland and District of Columbia Credit Union Association Trailblazer and National Awards Ceremony. Attending were (from left), DeWitt’s husband, Charlie; Carlos Calderon, president/CEO of OAS Staff FCU; Dewitt’s daughter, Alexandra DeWitt; and Vicki Johnston, acting CEO of COMSTAR FCU, Frederick, Md. (Photo provided by the Maryland and District of Columbia Credit Union Association)
The highlight of the program is the awarding of the Christine DeWitt Memorial Award for Excellence in Marketing, Best of Show, which went to OAS Staff FCU, Washington, D.C. The credit union was recognized for its marketing campaign “Hot Rate Loans” and a special “Green Initiatives” project that included elements in multiple marketing channels. The MDDCCUA Best of Show award, instituted in 2008, is named in honor of late Christine DeWitt, who was the vice president of operations at COMSTAR FCU, Frederick, Md. Her husband, Charlie, and daughter, Alexandra, presented the award to Carlos Calderon, president/CEO of OAS Staff FCU. The National Credit Union Recognition awards recognize credit unions that demonstrate the credit union people helping people philosophy and include the Dora Maxwell Social Responsibility Community Service Award, the Louise Herring Philosophy in Action Member Service Award and the Desjardins Youth and Adult Financial Education Award. The winners will advance to a national competition sponsored by the Credit Union National Association. The MDDCCUA Trailblazer Awards for Excellence in Marketing and Communications honors staff and volunteers who exhibit creativity in marketing and communicating the benefits of their products, services and activities in 12 categories. For a list of the award winners, use the link.

MCUL elects new directors

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LANSING, Mich. (6/1/11)--One new director and two new alternate directors were elected at the Michigan Credit Union League annual convention May 14 in Grand Rapids. John Buckley moved up to director in District III, replacing Dan Witkowski who decided not to seek re-election. Marc McKeller was elected to fill out Buckley’s term as alternate (Michigan Credit Union League Michigan Monitor May 31). Tom Blake did not seek re-election as the District IV alternate director. Connie Bonnee-Toensing was elected as the new alternate. The 2011-12 directors, with alternates in parentheses, are:
* District I--Rudy Callen (Ted Parsons); * District II-- Dan Baines (Tim Hemenway); * District III--Buckley (McKeller); * District IV--George Isola (Bonnee-Toensing); * District V--Howard J. Spencer (Tim Benecke); * District VI--Donald Yuvan (Karen Church); * District VII--Director Victoria L. McIntosh (Lisa Pionk); * District VIII--Director Lonnie L. Bone (Martin Hansen); * District IX--Director Anthony Carnarvon (Dean Trudeau); and * District X--Director Jim Francis (Mike Newman).

Canadas Central 1 CU reports 18.3M profit

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VANCOUVER, B.C., and TORONTO, Ont. (6/1/11)--Central 1 CU, a corporate credit union and trade association serving individual credit unions in the Canadian provinces of British Columbia and Ontario, reported a profit of $18.3 million in the first quarter of 2011. The profit compares with a $7.5 million profit in the same period last year. The latest figure reflects gains of $12.1 million from disposal of financial instruments and a $2.4 million net gain on mark-to-market valuation of Central 1’s portfolio (Marketwire via digitalmedianet.com May 25). Central 1’s return on equity was 12.6%, compared with 5.3% a year earlier. Assets increased 2.9% year-over-year, hitting $14.1 billion as of March 31, compared with $13.7 billion a year ago. In a related matter, Central 1 announced the resignation and retirement of Rowland Kelly from his position as chief financial officer and chief operating officer, effective Sept. 30. Helen Blackburn, Central 1 senior vice president of strategy, has been appointed chief financial officer to succeed Kelly, effective Oct. 1.

Four inducted into Tennessee CU Hall of Fame

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CHATTANOOGA, Tenn., and NASHVILLE, Tenn. (6/1/11)--The Tennessee Credit Union League (TCUL) and Volunteer Corporate Credit Union (VolCorp) recently inducted four individuals into the Tennessee Credit Union Hall of Fame at the TCUL Annual Convention and Expo in Gatlinburg, Tenn. Jointly sponsored by TCUL and VolCorp, induction into the hall of fame is awarded annually to recognize the commitment, leadership and dedication that individuals from the state have made to the credit union movement. The 2011 inductees into the hall of fame are:
* Sandy Lingerfelt, Clinchfield CU, Erwin; * William “Bill” and Alice Jenkins, Rohm and Haas Employees CU, Knoxville; and * Hardie Phipps, Kennedy VA Employees FCU, Memphis.
Lingerfelt has been active in the credit union movement since she began working with several small credit unions in the 1970s. She joined Clinchfield FCU in 1977 and was promoted from part-time clerk to manager when the credit union was $1.6 million in assets. Assets are now more than $60 million. Lingerfelt has more than 10 years of service on the Credit Union National Association board and more than eight years as a board member of the National Credit Union Foundation. The Jenkinses served together in the credit union industry for more than 50 years. As an employee of Rohm and Haas, Bill started the credit union for employees in 1949. Until his death in September 2009, he reported to the credit union every day it was open--more than 58 years. Alice worked alongside Bill for more than 55 years until 2006. She died in 2008. Together, they grew Rohm and Hass to more than $16 million in assets. The late Phipps, former manager/CEO of Kennedy VA Employees FCU, served the credit union for 37 years, from 1971 through 2008. He was an advocate for small credit unions, and he encouraged other credit union managers and volunteers to be active within the credit union system. Phipps served as the treasurer of the Memphis Chapter of Credit Unions for 21 years. Phipps also served on the Tennessee Credit Union League board of directors from 2000 through 2008.

NCUA files sealed response in Vensure case

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WASHINGTON (5/31/11)--The National Credit Union Administration (NCUA) filed a sealed response last week to Vensure FCU's arguments in the credit union's lawsuit seeking to delay NCUA's placing the credit union into conservatorship. Mesa, Ariz.-based Vensure had filed a sealed document on May 19, and NCUA had until Thursday to respond. The credit union had sought a temporary restraining order to halt the conservatorship. The case was heard May 11 in the U.S. District Court for the District of Columbia, and U.S. District Judge Rosemary Collyer had indicated she was inclined to rule in favor of NCUA and let the conservatorship stand. However, she gave the option for an additional written filing from the credit union before ruling. Vensure FCU was taken into conservatorship on April 15. It is one of 16 financial institutions that allegedly held funds tied to online gambling sites under investigation by the Federal Bureau of Investigation.

Wash. regulator urges student loan due diligence

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OLYMPIA, Wash. (5/31/11)--Washington State's credit union regulator has issued guidelines urging credit unions to use thorough due diligence when adopting student loan programs. The Division of Credit Unions (DCU) in the Washington State Department of Financial Institutions (DFI) is "giving closer attention to new loan programs. Recently, examiners found a few Washington credit unions have adopted student loan programs with very limited research and few controls," said the DCU in a bulletin dated May 17 and revised May 24. It outlined these conditions that examiners expect to find before a student loan program will be considered safe and sound:
* Perform due diligence by analyzing the conditions, costs, and benefits to the credit union of the program before implementing it. "One key objective of the credit union due diligence will be for management to understand the program and be prepared to make appropriate adjustments to protect the credit union as risk levels fluctuate," the bulletin said. * Have an analysis by the credit union's attorney to strengthen the contract in favor of the credit union. * Check reputation risk by analyzing all costs to the borrower of a private student loan program. "Critics have chastised some lenders for high cost debt to students as well as inflexible repayment options," said DCU. * Project the credit union's expected revenue, expenses and anticipated rate of return on the amount invested in student loans. * Adopt a policy for governing the loan program and managing the vendor before embarking in an indirect student loan program. If student loans are risk-priced, set reasonable limits on the loan amount in each risk category. "A credit union with an indirect student loan program should carefully analyze the third party's underwriting criteria," the bulletin urged. * Limit the concentration of private student loans on the books, as a new unsecured loan program, to growth of no more than 10% of the credit union's net worth per year, and keep the limit in place until the credit union has more than three years satisfactory experience with the program. * Provide adequate allowance for loans. Federal student loan programs may have controls and guarantees in place that the credit union is unable to duplicate to achieve a similar lower risk. Private loan programs may have a higher risk profile and require additional reserves, the regulator said. * Make sure insurance meets state requirements and the provider is licensed in the state. * Verify membership eligibility of each applicant before making the loan. * Continue monitoring the loans' service quality and the third-party vendor's financial health. * Include interest rate characteristics of the student loans when measuring interest rate risk before and after implementing the program.

Vermont letters outline interchange concerns

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SOUTH BURLINGTON, Vt. (5/31/11)--Joe Bergeron, president of the Association of Vermont Credit Unions (AVCU), outlined interchange concerns in letters to U.S. Sens. Pat Leahy (D-Vt.) and Bernie Sanders (I-Vt.) last week. Bergeron wrote a letter to each expressing “grave concerns by Vermont credit unions” about the looming Federal Reserve debit interchange control proposal that will become law on July 21 unless Congress acts to delay its implementation (Newslines Express May 27). Bergeron’s letters were sent as the National Retail Federation (NRF) launched a 60-day campaign, which NRF said will include a Washington fly-in by hundreds of business owners, an “aggressive media relations campaign,” and a nationwide print and radio advertising campaign, including inside-the-beltway print and radio ads that propose to spend “hundreds of thousands of dollars.” “Vermont consumers will ultimately be the ones who suffer because merchants have no more incentive to reduce prices due to lowered interchange than they would if they found a better deal on insurance premiums,” Bergeron wrote in the letter. Debit-card-issuing institutions will naturally seek to recoup any lost revenues by other means, costing consumers more in new or higher fees or lower rates of return, he added. Bergeron ended the letter by pointing out that credit unions “are not arguing for merely the status quo or to kill any reform effort,” but for support of a proposal that would delay implementation for 15 months while the issue receives comprehensive review. Such a delay would ensure that consumers and credit unions don’t get caught up in a “marketplace train wreck” and that a balance can be struck between merchants, card issuers and consumers, he added. Because the Credit Union National Association (CUNA), leagues and credit unions nationwide are entering a critical stage in the battle to ensure the best possible operating environment for credit unions, CUNA President/CEO Bill Cheney again called on credit unions and state leagues to maintain the grassroots pressure during the Memorial Day congressional recess and the weeks that follow by continuing to urge their legislators to delay implementation of the Federal Reserve’s debit interchange fee cap regulation (News Now May 26).

CUAid tornado donations top 110K in South 75K for Mo.

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MADISON, Wis. (5/31/11)--The National Credit Union Foundation (NCUF) has received more than $110,000 in donations to help credit union people affected by the devastating storms throughout Alabama on April 27. Also, more than $75,000 has been raised from the credit union community for Joplin, Mo.-area credit unions since the May 22 tornado. The Southeastern Credit Union Foundation (SECUF) said it will match up to $100,000 of donations made to CUAid for further community reinvestment projects in the affected areas of Alabama. “We can’t thank the credit union community enough for their generous giving in the wake of the tornadoes in Alabama,” said SECUF Executive Director Amber Tynan. “With SECUF’s $100,000 match, we have doubled the money that has come in and it’s making a difference. For many credit union staff, this money has given them a road back to normalcy. With the outbreak of tornadoes in Missouri and Oklahoma, we know that the needs of credit unions are great right now across the country. I know the credit unions in Alabama are thankful for the generosity of their peers.” SECUF has handed out more than $35,000 in grants to credit union staff affected by the tornadoes. The CUAid money and the SECUF match will help many more credit union staff who have applied for grants. The foundation also is working with six Alabama chapters on a Rebuilding Alabama initiative where the foundation matches the chapter project request up to $10,000. Currently SECUF is working with two chapters on projects. In Missouri, because of the quick response from the credit union community, the Missouri Credit Union Charitable Foundation processed and mailed checks to affected members, employees and volunteers within three days after the tornado. “Your call was truly a blessing,” said Cathy Stroud, president/CEO at Community Financial CU in Springfield, Mo. “I am so thankful that we are part of such a great association of credit unions. The amount collected is phenomenal. I was totally without words and it’s not often I am without words.” In both cases, as donations are posted through CUAid.coop, NCUF is coordinating with SECUF and the Missouri Credit Union Charitable Foundation to efficiently distribute money to credit union employees and members in the affected areas. To make a donation, use the link.

Kansas tornado destroyed CU employees home

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READING, Kan. (5/31/11)--A tornado that ripped through Reading, Kan., and surrounding areas on Saturday, May 21, took the home of an Emporia State FCU staffer. Judy Sorenson, a member services representative at the Emporia, Kan.-based credit union, was on vacation with her husband when the severe weather hit. Her son and daughter-in-law, who were at the Sorenson house in Reading, took cover in the basement. No one was injured, but the house was destroyed, said the Kansas Credit Union Association (KCUA). Emporia State FCU staff have gathered food and supplies for Sorenson, who is staying in a nearby hotel. Throughout the week, staff continued to help the community clean up and salvage items from the rubble, while the rest of the employees covered for them back at the credit union. In addition to food, supplies, and a helping hand, staff donated money in support of Sorenson. The credit union set up a fund for donations. For more information, call 620-342-2336. Andrew Smarsh, a member service representative at the credit union, helped with the cleanup. "I have never actually helped out personally with someone who has lost a lot of their belongings," he said. "You could definitely tell where the tornado traveled…on one side of the road, rubble and belongings where a house stood, and on the other side, the house's windows were just blown out and minimal damage done to the house." Branch manager Angie Miller said she is overwhelmed and amazed at the willingness of the staff to help their co-worker. "The board and staff have been wonderful," she said. "Their generosity simply can't be matched--they've donated their time, physical help, monetary help, made food, and taken care of Judy at both the storm site and her new motel home." Sorenson has worked at Emporia State since 2005 and has been a member of the credit union since 1971. Her father had been a member since 1960, and her two sons worked at the credit union part time while attending Emporia State University. The credit union had about 60 members in Reading. Roughly half were affected, ranging from no losses to total car losses, to residences and rental homes either damaged or total losses, KCUA told News Now. The credit union is offering a small, short-term 30-day notes at 0% for members with damage covered by insurance, if requested. Reading, which has a population of 250, is located 20 miles northeast of Emporia, Kan. About half the town's 10 homes were destroyed, as well as half the businesses. One person was killed and five injured, said KCUA.

Women worldwide to meet at global leadership forum

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MADISON, Wis. (5/31/11)--Women credit union leaders worldwide will convene at this year's Global Women’s Leadership Forum in Glasgow, Scotland, July 23-24, in conjunction with the World Council of Credit Unions’ (WOCCU) World Credit Union Conference.
Click to view larger imageParticipants gathered at the 2010 Global Women’s Leadership Forum in Las Vegas. (Photo provided by the World Council of Credit Unions)
Global Women’s Leadership Network members--an international group of proactive, professional credit union women--will discuss challenges facing credit unions and hear from speakers including British Broadcasting Co. Radio 4’s on-air personality Liz Barclay. Barclay is one of the most recognized voices on British radio with a common-sense approach to money and finance on her show, You and Yours. During the only international peer-to-peer exchange in the industry, attendees share ideas and learn from their counterparts in other credit union movements around the globe. Despite operating in vastly different environments, women in the network face similar leadership challenges at their credit unions and together find insight and strategic solutions. “I had the opportunity to network and learn about the successful strategies my peers use to grow their credit unions,” said Winona Nava, CEO of Guadalupe CU in Santa Fe, N.M. “The stories shared demonstrate that the credit union philosophy is alive and prospering around the globe. Even though vast distances separate us, we are all united in our desire to improve the lives of our members and our communities. It was remarkable that in spite of our various backgrounds, nationalities and geographic locations, we all share the same struggles as women and as leaders.” The network, co-founded by WOCCU and the Canadian Co-operative Association, provides women the opportunity and resources to make a measureable difference in each other’s lives, and in their credit unions and communities. It engages members with professional and personal development through social media and educational forums, and provides tools for women to connect with their peers. Women credit union leaders and volunteers can sign up for membership; use the link. Organizations such as credit unions, service organizations and vendors also can join and appoint two women leaders to represent their organization. For more information, use the link or e-mail cuwomen.woccu.org.

Wisconsin Farmers Union opposes CU conversion bill

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MADISON, Wis. (5/31/11)--The president of the Wisconsin Farmers Union has written an op-ed article opposing a measure in a state legislative committee that would make it easier to convert a credit union directly to a bank. The column, posted on madison.com Friday, is by Darin Von Ruden. His organization works to enhance the quality of life for family farmers, rural communities and all citizens. The measure passed the Wisconsin Legislature's Joint Finance Committee on May 12 as a budget amendment, and the Wisconsin Credit Union League has called on Gov. Scott Walker to veto it. "There were no public hearings on this proposal, nor were any credit unions or credit union members given an opportunity to comment on the proposal," said Von Ruden's article. "This is a major law change that would undermine the stability of credit unions." He noted that many of the 220 credit unions in Wisconsin are in rural areas and farming communities, which are "often underserved by investor-owned banks." "Credit unions are an important part of a diverse and competitive financial industry in rural Wisconsin. We should not be making it easier for investor-owned banks to gobble up locally owned credit unions," said Von Ruden. Current state law contains safeguards to ensure that members know that a vote on conversion is taking place, and that they have the information to cast an informed vote, he said. The new provision requires only a simple majority of those present at any given meeting to vote in favor of conversion. "It would allow for a very rapid conversion from a credit union to a bank, without allowing time for members of the credit union to understand the implications…or even know that the conversion is taking place," Von Ruden wrote. "Credit unions have always been an excellent source of loans, financial education and general support for Wisconsin's farmers and rural residents," he said, adding that the Wisconsin Farmers Union "calls on members of the legislature to safeguard the future of the state's credit unions by removing the credit union conversion language from the omnibus budget package. Creating a new method to dissemble Wisconsin's credit unions is unnecessary and unwise."

CU System brief (05/30/2011)

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* NEW YORK (5/31/11)--The Brooklyn, N.Y.-based Polish & Slavic FCU announced Thursday it has hired Oskar Mielczarek as its new president/CEO. Mielczarek has extensive background in credit, asset-backed financing and marketing of financial products from his service at J.P. Morgan Chase, Merrill Lynch and Barclays in North America and Europe. According to board Chairman Tomasz Bortnik, the board is "confident that Mr. Mielczarek's stewardship and team-oriented managerial style will bring great value to the largest ethic credit union in the country." He has a master's in business administration from Harvard Business School. PSFCU, which has nearly $1.4 billion in assets, recently opened its third Chicago area branch and its sixth branch in three and a half years. It has increased assets 7% the past two years and membership is up by 4% for the same period …

Judge OKs settlement in suit involving Centrix

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KANSAS CITY (5/27/11)--A federal judge has approved a settlement totaling $2.6 million in a class action suit involving the Centrix Financial LLC, a Centennial, Colo.-based company that financed subprime auto loans for credit unions and went bankrupt in 2008. U.S. District Judge Gary A. Fenner of the U.S. District Court for the Western District of Missouri on May 19 approved the settlement, which had been filed with the court on Feb. 4, for the class action case of Cecil E. Hopkins vs. Kansas City Teachers Community CU and Marathon Rothschild CU, Rothschild, Wis., according to court documents. The suit included 140 class action claimants who obtained vehicle loans from the credit unions in conjunction with a portfolio management program administered by Centrix Financial and whose vehicles were repossessed. The settlement allows a cash payment of about $9,315 per person, totaling $1.3 million, plus write-offs on deficiencies or account balances remaining on their loans totaling $8,968 or $1.25 million so borrowers can improve their credit scores. The settlement dismisses the suit against the credit union without prejudice. After a 40-day waiting period to see if any appeals are filed, the settlement will be distributed. Attorneys in the case were awarded $819,631, which includes litigation expenses and court costs incurred, as well as 30.4% of the gross settlement fund in attorneys fees. Centrix Financial was placed under involuntary Chapter 11 protection on Sept. 15, 2008. Several days later the company and its affiliates filed voluntary petitions for Chapter 11 protection (News Now Oct. 20, 2008). Credit unions and other entities claimed millions against the company's assets. More than two-thirds of Centrix's portfolio was owned by about 230 credit unions across the nation. It underwrote more than 250,000 loans totaling $4 billion.

Wisconsin payday loan rule takes effect Wednesday

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MADISON, Wis. (5/27/11)--A rule implementing a Wisconsin law that regulates payday lenders and establishes uniform rules for them will go into effect Wednesday, according to the State of Wisconsin Department of Financial Institutions (DFI). The Wisconsin Legislature created the 2009 Wisconsin Act 405, requiring the DFI's Division of Banking to regulate the sector. The rule aims to establish clear standards and requirements for the payday lenders, including notice of repayment guidelines and other protections for their customers. It also defines database requirements for the secure entry, retention and transmission of customer information, said the DFI. DFI said the rule:
* Defines the type of loans covered and notice as to what practices are prohibited; * Provides the industry with clear, itemized requirements for disclosures, repayment plans and standard calculations for income determination; * Provides for safe and secure transmission of payday lending transactions into a database; and * Addresses permissible fees and default matters.
The statutes and the rule include many consumer protections such as requiring that the loan agreement disclose repayment options, the 24-hour right to rescind the loans, and a limit of one rollover per loan. To view the rule, use the link.

Excellence in lending entries deadline Aug. 5

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MADISON, Wis. (5/27/11)--Entries are being accepted for the 12th annual Excellence in Lending Awards, which recognizes outstanding lending results and practices by credit unions. CUNA Mutual Group and the CUNA Lending Council established the Excellence in Lending Awards in 2000. The Excellence in Lending Awards recognize individual credit unions for their ability to serve members while sustaining sound financial performance. Credit unions demonstrating an ability to meet their members’ needs through innovation are excellent award candidates, said the organization. “This competition offers the opportunity for a credit union to be recognized as one of the industry’s best lenders,” said Dan Murray, vice president for lending services at CUNA Mutual. “This national recognition provides a great opportunity for credit unions to promote their award-winning lending success locally to potential members.” Credit unions may be nominated for the 2011 award in four categories:
* Consumer Lending Excellence--for credit unions with assets less than $250 million, and for more than $250 million; * Mortgage Lending Excellence--for those with assets less than $250 million, and for more than $250 million; * Low/Modest Means Excellence--any asset level; and * Business Lending Excellence--any asset level.
The awards will be presented at the CUNA Lending Council’s annual conference, Nov. 6-9 in New Orleans. Airfare, hotel and conference registration for one representative from each winning credit union is included with the award. For more information, use the link.

CU wins appeal on fidelity bond claim

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LATHRUP VILLAGE, Mich. (5/27/11)--A 2009 jury decision in for Michigan First CU in a case about an insurer's denial of a fidelity bond claim involving hundreds of defaulted indirect auto loans has been affirmed by the U.S. Court of Appeals, Sixth Circuit. The $568 million asset, Lathrup Village, Mich.-based credit union is entitled to $5 million in damages and another $2.7 million in interest from CUMIS Insurance Society Inc., according to the ruling filed Tuesday by the appeals court regarding the jury decision in the U.S. District Court of the Eastern District of Michigan at Detroit (leagle.com May 25). In 2003, the credit union began offering the loans, with a third-party administrator approving low-risk loans and forwarding higher risk loan applications to the credit union for review. A credit union vice president was charged with submitting monthly reports to the board to ensure compliance, but failed to monitor the program, the ruling said. A quarterly internal audit in October 2003 discovered one loan that violated the credit union's indirect lending policy, said the court documents. But in January 2004, it was discovered that "hundreds of loan applications in violation of the lending policy" were made, resulting in "numerous defaulted loans." The credit union claimed that it suffered financial harm as a result of three of its employees' "conscious disregard of its lending" policies and filed a fidelity bond claim with its insurer, which denied the claim. A seven-day jury trial ensued, with the jury awarding $5.05 million in damages. A motion for a new trial was denied, and the court imposed a $2.7 million interest award. CUMIS appealed the judgment and the credit union countered with an appeal on the interest calculation. In Tuesday's ruling, the court said there was sufficient record evidence to support the jury's finding that the credit union "did not acquiesce to the policy violations at issue." CUNA Mutual Group declined to comment on the case.

CUNA closed on Monday no INews NowI

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WASHINGTON and MADISON, Wis. (5/27/11)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association will be closed Monday in observance of the Memorial Day holiday. News Now will not publish a Monday issue, but will resume regular publication on Tuesday.

Schlehuber elected to CO-OP board

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RANCHO CUCAMONGA, Calif. (5/27/11)--Lisa Schlehuber, CEO of Eli Lilly FCU of Indianapolis, has been elected to the CO-OP Financial Services board of directors. Two incumbents also were re-elected to new three-year terms on the board at the annual meeting of CO-OP shareholders. They include:
* Tom Dorety, president/CEO, of Suncoast Schools FCU, Tampa, Fla., and * Gary Oakland, president/CEO, of BECU, Tukwila, Wash.
Also, officers of the 11-member board were appointed to remain in their positions for another year. They include:
* Chairman--Doug Allman, President/CEO, of NASA FCU, Upper Marlboro, Md.; * Vice chairman/chairman-elect--Terry Laudick, president/CEO, of New Mexico Educators FCU, Albuquerque, N.M.; * Treasurer--Doug Ferrero, president/CEO, of Bellco CU, Greenwood Village, Colo.; and * Secretary--Patsy Van Ouwerkerk, president/CEO, of Travis CU, Vacaville, Calif.
Based in Rancho Cucamonga, Calif., CO-OP Financial Services connects credit union members to their accounts through network, payment processing, e-commerce, shared branching and call center services.

NACUSO requests clarity on Texas CUSO proposal

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AUSTIN, Texas (5/27/11)--The National Association of Credit Union Service Organizations (NACUSO) joined with the Texas Credit Union League in filing a comment letter Monday opposing proposed state regulation of Texas credit union-owned credit union service organization (CUSOs). NACUSO told the Texas Credit Union Commission that its primary objectives are protecting the ability of CUSOs to bring added member services and non-interest income, lower costs through economies of scale achieved by collaboration, and sharing the cost and risk of innovation among several credit unions. Innovation costs to obtain the expertise to introduce new products and services “can be prohibitively expensive for an individual credit union, and yet affordable when shared with several credit unions through a CUSO,” the letter said. Therefore, NACUSO said it is concerned about the commission’s recent proposal in Subsection (g) stating: “All legal limitations imposed on a credit union by Texas Finance Code, Title 3, Subtitle D and any rules adopted under that Subtitle, apply equally to CUSO activities.” “It is our belief that this would not be good public policy for the State of Texas,” said NACUSO’s letter. “We are uncertain of the full implications of the proposal. Will CUSOs have the same powers and limitations of credit unions? What is meant by the term ‘limitations’? If the intent is to subject CUSOs to the same regulatory restrictions and supervisory authority as those facing credit unions, this is a serious departure from the current powers in every other state that regulates credit unions and the federal authority of the National Credit Union Administration (NCUA). “There is no jurisdiction in the U.S. that restricts CUSOs to those permissible activities only credit unions are permitted to perform,” the letter added. “NCUA does not have regulatory authority over CUSOs but has expressed a desire to petition Congress for that authority. Even NCUA does not seek to have CUSOs confined to permitted credit union activities. What is the value of CUSOs if they become mere shadows of credit unions? There would be little need for CUSOs as the risk, presently being often shared through collaboration via a CUSO, would now be taken back within the credit union seeking to innovate or offer an expanded service. Frankly, it would not be an overstatement to characterize the proposed action in Texas as a radical departure from the norm.” Because the commission already has the ability to inspect a CUSO’s books and records, the commission already can compel a CUSO to take action that is in the best interests of credit unions if the CUSO poses a safe and soundness risk to credit unions, NACUSO said in the letter. That power includes the ability of the commission to issue a cease-and-desist order “to prevent credit unions from using the services of the CUSO and/or requiring the owner credit unions to divest their investment in the CUSO.” NACUSO also said it has concerns about a proposal limiting a credit union’s investment in a CUSO to 15% of net worth, because it could have a “chilling effect on new CUSO investment.” The organization also questions the commission’s proposed 20-day notice required if a CUSO makes a material change in its organizational structure or performs a new activity. NACUSO said more clarity is needed on what the changes would entail. The letter concludes that it would like the commission to revisit the proposal. To read the letter, use the link.

La. CUs promote CU difference at state GAC

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HARAHAN, LA. (5/27/11)--Nearly 70 Louisiana credit union professionals and volunteers representing 24 credit unions statewide attended the 2011 Louisiana Credit Union League Governmental Affairs Conference May 17-18 in Baton Rouge, La., to promote the credit union difference.
Joe Battaglia (left), CEO of Homeland FCU, Metairie, La., meets with Louisiana State Rep. Joseph Lopinto (R-80), vice chairman of the Louisiana Commerce Committee at the 2011 Louisiana Credit Union League Governmental Affairs Conference, May 17-18, in Baton Rouge. (Photo provided by the Louisiana Credit Union league) .
The conference opened with State Rep. Joseph Lopinto (R-80), vice chairman of the Commerce Committee, addressing attendees. Presenter Kelly Parks conducted an afternoon session in which she discussed “Integrating Advocacy into Credit Union Marketing” (eNews May 25). Attendees congregated at the State Capitol to meet one-on-one with lawmakers. The group spoke with one voice in promoting the credit union difference and the value credit unions offer to their members, said the league. Attendees also heard from Lt. Gov. Jay Dardenne, J.D. Fields from the Louisiana Office of Financial Institutions, and Valerie Bogart from National Credit Union Administration. Rob Rieger from law firm Adams and Reese, LLP, presented an overview of the current climate of the state legislature and its impact on credit unions. Jeff Brooks, Adams and Reese LLP, presented an overview of Congress and legislation affecting credit unions on a national level.

Peruvian co-op law becomes reality

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LIMA, Peru (5/27/11)--The government of Peru has passed landmark legislation that recognizes the not-for-profit status of the country’s 160 credit unions and other cooperatives and grants them tax exemption. World Council of Credit Unions’ (WOCCU) member La Federación Nacional de Cooperativas de Ahorro y Crédito del Perú (FENACREP) has worked with a coalition of cooperative advocacy groups on the bill since introduction into the legislature in December 2009. Manuel Rabines Ripalda, first vice chair of WOCCU’s board of directors and president/CEO of FENACREP, said the country’s cooperatives have long struggled to help lawmakers understand that cooperatives’ transactions with members are not designed to produce profit, and therefore should not be taxed. “This is not just about a tax break for cooperatives,” Rabines said. “This law is simply correcting the interpretation of existing cooperative legislation so that tax laws will be properly applied to cooperative acts.” The new law specifies the scope of two articles in Peru’s existing General Law of Cooperatives by recognizing that cooperatives are different from commercial enterprises because their transactions with members are “cooperative acts.” Since these cooperative acts are considered internal--carried out in accordance with the cooperatives’ social objectives--they have no motive for profit. Cooperative acts are not considered a “sale of goods” or “provision of services,” so the sales tax associated with these activities is not applicable, said WOCCU. “Credit unions and other cooperatives have historically had a strong presence in Peru and throughout Latin America,” said Pete Crear, WOCCU president/CEO. “Earning and maintaining the support of government is vital to our global movement, and the enactment of this new law in Peru is a great achievement.”

N.J. ad campaign directs consumers to aSmarterChoice

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HIGHTSTOWN, N.J. (5/27/11)--The New Jersey Credit Union League’s (NJCUL) “Banking You Can Trust” ad campaign now directs consumers to aSmarterChoice.org, the new website created by the Credit Union National Association (CUNA) and the state leagues to help consumers learn more about credit unions and find one they are eligible to join. “Our ‘Banking You Can Trust’ campaign here in New Jersey continues to gain steam,” said NJCUL President/CEO Paul Gentile. “Now that we’re in our third year, the branding is becoming more established in the marketplace. “We have recently adjusted our ads to include aSmarterChoice.org as the destination that the ads direct consumers. aSmarterChoice.org is an effective site to direct consumers because it explains the story of credit unions in simple terms and clearly defines our value proposition as credit unions,” he said. New Jersey’s ad campaign informs consumers about the benefits of using credit unions. aSmarterChoice.org provides consumers with the necessary information to make the switch. The credit union locator tool on aSmarterChoice.org not only shows consumers which credit unions are nearby, but which ones they are eligible to join. The website’s online locator tool is powered by findacreditunion.com and includes all U.S. credit unions in its database. The stimulus for aSmarterChoice.org, which was introduced in March at CUNA’s Governmental Affairs Conference, came from a task force created by the American Association of Credit Union Leagues with the goal of raising awareness and fostering credit union membership growth, especially among young adults. Gentile was chairman of the task force.

CU System briefs (05/26/2011)

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* ALBUQUERQUE, N.M. (5/27/11)--A Bloomfield, N.M., man, Kacey Allen Fisher, 34, was sentenced in a U.S. District Court in Albuquerque, N.M., to more than 12 years in prison after pleading guilty to robbing eight financial institutions, including a credit union, in New Mexico, Arizona and Colorado. He also was sentenced to five years of supervised release after his 151-month prison term and ordered to pay restitution to the banks and the only credit union robbed, Animas CU, Farmington, N.M. The credit union holdup, on April 3, 2008, was the last robbery committed in the spree that began on Feb. 25, 2008. In each case, Fisher entered the bank or credit union and robbed it while another man served as getaway driver. Fisher was arrested in August, 2008. They men robbed the credit union and two banks in New Mexico, three banks in Arizona, and two banks in Colorado (US Fed News May 24) … * PANAMA CITY, Fla. (5/27/11)--Anthony David Stalnaker, 42, of Lynn Haven, Fla., was arrested about eight hours after he allegedly walked into Panama City-based Tyndall FCU, sat down with a member service representative, and said he had a bomb in the case he was holding. When asked if he were serious, he said no but then asked if she had a panic button and indicated he knew she had keys to the vault. He also allegedly asked whether there would be oxygen inside the vault. Stalnaker then collected his credit union statements from the employee and left with the case and without money. Tyndall issued a press release assuring members that proper security procedures were followed and members and staff remained safe. No money was taken and no accounts compromised (The News Herald May 26) … * HANSCOM AFB, Mass. (5/27/11)--Hanscom FCU's 57th Annual Meeting highlighted its fundraising successes of 2010, with the presentation
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of $21,911 to the CU Kids at Heart Program to benefit Children's Hospital Boston. Raised throughout the year by members, staff and volunteers, the funds represent a 30% increase over 2009, said Board Chairman Paul Marotta. The credit union also was lead fundraiser for the Massachusetts Credit Union League's Credit Union Hope Initiative in 2010 and supported the Massachusetts Coalition for the Homeless, veterans' charities, scholarships, and a high school ROTC program. It also collected personal care items for hospitalized veterans and provided a giving tree at Hanscom AFB, and sponsored the Airman Leadership School, the Patriot Honor Guard, the Patriot Enlisted Association and the Patriot Senor NCO Association. It is a major sponsor of Hanscom Heroes Homecoming, which honors troops returning from deployment in Iraq and Afghanistan. Here, Jane Melchionda of the CU Kids at Heart program is presented the check with, from left, David Sprague, Hanscom FCU president/CEO; Andy Martin Jr., the credit uniok's Children's Hospital patient partner; and Ray Phillips, board member and Hanscom FCU's Boston Marathon runner. (Photo provided by Hanscom FCU) … * MADISON, Wis. (5/27/11)--The Disclosures, a Madison, Wis.-based thrift rock band sings about credit unions and has an album of the songs, made its television debut Monday morning on Madisonscw.com. In the band are Christopher Morris, director of marketing at the National Credit Union Foundation, and Chad Helminak, web and member development strategist at the Wisconsin Credit Union League …

CU System briefs (05/25/2011)

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* CHICAGO (5/26/11)--A reward of up to $50,000 is being offered for the capture of the "Wheaton Bandit," one of the most prolific serial robbers of credit unions and banks in Chicago area history. Seven of the 16 armed-takeover-style robberies occurred in the suburb of Wheaton. The Federal Bureau of Investigation (FBI) and six police departments are asking the public's help in identifying the man, who first struck in January 2002 and continued robbing until Dec. 7, 2006, netting about $150,000 in the holdups. The five-year statute of limitations on the last robbery runs out Dec. 7. The suspect may have prior law enforcement or military weapon experience because of the way he handled a semi-automatic handgun, which he used to threaten employees and member/customers. He is described as white, between the ages of 25 and 35 years old at the time of the heists, about six feet tall with medium build and blue eyes. He is possibly left handed (Chicago Sun-Times, Examiner and Fox Chicago May 25 ) … * MADISON, Wis. (5/26/11)--Wisconsin's Department of Financial Institutions (DFI) Wednesday urged employers in the state to apply for the Workplace Leader in Financial Education Award, a first-ever national honor to recognize employers with exemplary workplace financial literacy efforts aimed at enhancing employee financial well-being. The award was launched by the American Institute of Certified Public Accountants and the Society for Human Resource Management. DFI Secretary Peter Bildsten also encouraged employers not providing financial education to begin doing so. Deadline for award submissions is July 1 and winners will be announced in October … * DALLAS and ALBUQUERQUE, N.M. (5/26/11)--Today is Financial Institution Crime Day in Albuquerque, N.M. Dallas, Texas-based SWACHA-The Electronic Payments Resource has teamed up with the Federal Bureau of Investigation's Albuquerque office to host a seminar to help local credit unions and banks reduce their exposure to fraud, according to a press release from SWACHA. A number of speakers will cover issues such as white collar crime, fraud, robbery and identity theft, Social Security protection, electronic pickpocketing, and cyber-crime trends in the area and across the nation. According to SWACHA President/CEO Dennis Simmons, there were 180,000 phishing attacks reported in the U.S. last year … * LANSING, Mich. (5/26/11)--Michigan credit unions were among the 4,000 people who braved a driving rain and chilly temperatures for
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the 2011 National Kidney Foundation of Michigan's annual Kidney Walk May 15 at the Detroit Zoo in Royal Oak. The walk raised more than $300,000 for the foundation's prevention programs and patient services throughout the state. The Michigan Credit Union League (MCUL) and Affiliates's team, shown here, contributed more than $47,000. MCUL CEO David Adams, far right in the photo, the 2011 honorary chair of the event, opened the walk with 9-year-old Danny Zivian, a patient and this year's top fundraiser. Major sponsors included MCUL and Affiliates, CU Solutions Group, CUcorp, Meijer, Fresenius Medical Care, Michigan Kidney Consultants, Greenfield Health Systems and other businesses. Kolleen Schocke of CU Solutions Group was the top individual contributor from the credit union community, raising $2,375, followed by Adams with $2,295, and Drew Egan with $1,815. Local credit union organizations participating included: ELGA CU, Downriver Community FCU, Good Shepherd CU, Shore to Shore Community FCU, First Catholic FCU, Co-op Services CU, Public Service CU, Michigan Services CU, and CenCorp (Photo provided by the Michigan Credit Union League) … * HERNDON, Va. (5/26/11)--Northwest FCU Foundation is bringing financial education to local elementary schools with an interactive school assembly featuring its children's book, Westie's Triple Decker Decision. The foundation already has reached 1,000 kindergarten through third grade students at three local elementary schools in Herndon and Vienna, Va. The assembly also performed at Northwest Federal's Member Appreciation Day. The assembly features an interactive book reading with children's author and Northwest Federal employee Joelle Hahn, foundation employee Shannon Tackett, and the credit union's mascot, Westie the dog. The children's story helps kids understand the importance of finding a balance among saving, spending and sharing. Students then create their own story about saving, spending and sharing by using ideas learned in the Westie in the Schools seminar and submit it in a foundation essay writing contest …

NCUA response in Vensure case due today

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WASHINGTON (5/26/11)--Today is the deadline for the National Credit Union Administration (NCUA) to file its response to Vensure FCU's arguments in a lawsuit seeking to delay NCUA's conservatorship of the Mesa, Ariz.-based credit union. Vensure filed a sealed document on May 19, and NCUA has seven days to file its response, according to court documents. Because NCUA would be responding to a sealed brief, it is possible NCUA's response would be sealed also. Vensure had $4.7 million in assets and served 144 members at the time NCUA put it into conservatorship on April 15 (News Now April 18). The credit union sought a temporary restraining order to halt the conservatorship, saying the agency's order was "arbitrary and capricious and threatens to significantly damage or destroy" the credit union (News Now April 27). The case was heard May 11 in the U.S. District Court for the District of Columbia before U.S. District Judge Rosemary Collyer, who indicated she was initially inclined to rule in favor of NCUA and let the conservatorship stand. However, she said she would consider an additional written filing by the credit union before making the ruling. The additional filing was the sealed document. In its original complaint, the credit union said the conservatorship order "contained only cursory and incomplete facts to support the grounds for conservancy and included no exhibits, appendices or empirical data in support." It also said the agency "took possession of the very financial records [the credit union] needs to demonstrate that conservatorship is improper." (News Now April 27). News accounts have said that the credit union was one of 16 financial institutions that allegedly held funds tied to recent Federal Bureau of Investigation actions taken against online gambling sites PokerStars, Full Tilt Poker and Absolute Poker. In its complaint, the credit union admitted it had taken part in poker-related fund transactions and said its work with online poker sites had helped it increase its size from a $150,000 asset credit union to one that held millions in assets. Vensure said it never intended to permanently depend on those revenues, adding its directors had voted recently to stop doing business with the online poker companies. It maintained it would have remained insolvent, even without the funds provided from its relationship with the gambling companies. In announcing the conservatorship, NCUA said the move was to "conserve the assets of a federally insured credit union, protect members' interests, or protect the National Credit Union Share Insurance Fund." Vensure FCU serves employees of Vensure Employer Services Inc., employees of various related companies and their families.

AmTraks magazine touts CUs as banking option

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WASHINGTON (5/26/11)--Credit unions were touted as an alternative to banks in an article in the May/June issue of Arrive magazine, Amtrak’s bimonthly publication, which Amtrak said has more than 1.4 million readers. The article, in the personal finance section of the magazine and titled “Banking Without a Bank,” contrasts the member-owned nonprofit structure of credit unions with the profit-driven shareholder-owned structure of banks. “Our goal is to maximize benefits of our depositors, from lower fees to higher interest rates on savings,” Bill Cheney, president/CEO of the Credit Union National Association (CUNA), told the magazine. When banks “walked away from customers” during the financial crisis, Cheney added, credit unions loaned $6 billion during that two-year period “and it didn’t cost taxpayers anything.” Credit unions annually save each member $80 in fees and loan interest, according to CUNA research, the magazine noted.

Two CUs partner to open shared branch

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ASTON, Pa. and WEST CHESTER, Pa. (5/26/11)--Sun East FCU, Aston, Pa., and Keystone FCU, West Chester, Pa., have opened the doors on shared a branch that was built as a collaborative effort. The credit unions shared the cost of building the branch and will share operating expenses while remaining separate entities. “Building a branch together is an exciting innovation which allows both credit unions to expand without a huge impact to our respective bottom lines,” said Keystone President/CEO Chris Woods. “Focusing on credit union philosophy allows us to concentrate on the similarities in the missions of both credit unions rather than feeling threatened by any perceived competition.” The joint branch is $429 million asset Sun East FCU’s ninth location in the Delaware Valley. It is $76 million-asset Keystone FCU’s third branch location.

Kinecta FCU on a wholesale sales growth spree

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MANHATTAN BEACH, Calif. (5/26/11)--Saying a national presence is its ultimate goal, Kinecta FCU is expanding its wholesale lending sales staff to the 25 states in which it is currently lending. New lenders have been added in Arizona, California, Colorado, Oregon, Kansas, Illinois, Missouri, Ohio and Washington. The Manhattan Beach, California-based credit union, with 3.5 billion in assets, is seeking additional mortgage sales professionals as it prepares enter Idaho and Utah in the western U.S. and Maryland, Virginia, Wisconsin and Washington D.C. in the east. Those states are currently serviced through its West Coast and Midwest Operations Centers, located in El Segundo, Calif. and Rosemont, Ill., respectively.

CUs in four states announce merger agreements

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TACOMA, Wash. (5/26/11)--Credit unions in four states--Washington, Hawaii, Massachusetts and New York--recently announced merger agreements. Washington’s largest proposed merger among credit unions was approved by the National Credit Union Administration (NCUA) Monday, for a $1.1 billion merger between Watermark CU, Seattle, and Sound CU, Tacoma, Wash. The final step in the process will be approval by Watermark members. Qualifying Watermark members will receive ballots by the end of this month. The outcome of the vote is expected to be announced by June 24. Richard Brandsma, president/CEO of Sound CU, will lead the continuing organization with 21 branches. The combined credit union will use Sound CU’s charter and operate as Sound CU with its corporate office in Tacoma. Sharon Sanford, Watermark CU president/CEO, will retire as of the merger date. Other mergers include:
* Webster First FCU, a $502.7 million-asset credit union, based in Worcester, Mass., will merge with $59 million-asset Saugus (Mass.) FCU, with a merger completion date set for Tuesday (telegram.com May 25); * Valley Isle Community FCU, a $98.4 million-asset credit union, based in Kahului, Hawaii, will acquire Kulia Ohana FCU, a $4.4 million-asset credit union in Wailuku, Hawaii, with a completed merger date slated for July 1 (staradvertiser.com May 24);and * The Summit FCU, a $625 million-asset, Rochester, N.Y.-based credit union will merge with Frontier FCU, a $2 million-asset, Kenmore, N.Y.-based credit union, on July 1 (democratandchroncile.com May 25).

Cameroon co-op league visits MnCUN

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ST. PAUL, Minn. (5/26/11)--The Minnesota Credit Union Network (MnCUN) provided insight into the operations of a U.S. credit union league to a visitor from Cameroon this week.
Click to view larger image During a visit to the Minnesota Credit Union Network, Cameroon Cooperative Credit Union League Representative Prasedes Banseka (right) provided gave an overview of the country’s credit union system.
Cameroon Cooperative Credit Union League Representative Prasedes Banseka’s visit was part of a 30-day credit union internship in Minnesota, during which she is learning about the credit unions’ approach to internal control and member services. Banseka is in the U.S. on a fully funded 10-month scholarship with the U.S. Department of State’s Hubert H. Humphrey Fellowship Program. The program selects young professionals from foreign countries with potential to be future leaders and brings them to the U.S. to learn about American institutions, people and culture. During her time in the U.S., Banseka has studied at Michigan State University and completed a short internship at a credit union in Michigan. The final part of her training is a 30-day internship at US FCU, Burnsville, Minn.
Click to view larger image Minnesota Credit Union Network (MnCUN) Director of Education Sue Groskreutz (left) tells Cameroon Cooperative Credit Union League Representative Prasedes Banseka about educational opportunities offered by MnCUN. (Photos provided by Minnesota Credit Union Network)
At MnCUN, Banseka learned about the resources the league provides to the state’s credit unions. Banseka took part in one-on-one meetings with network staff, who provided overviews of each department’s basic functions and offered ways Banseka could implement new ideas in Cameroon. Banseka shared photos and stories in an overview of her country’s credit union system. Cameroon has about 200 credit unions that serve 336,000 members. The Cameroon league has a unique structure and approach to service, meeting regularly with each credit union to oversee the management of the organization, training staff and volunteers and coordinating board elections. The league also acts as a regulator, auditing credit unions, offering insurance, and assisting credit unions with their financials. “The network’s meeting with Prasedes opened our eyes to the true diversity of the international credit union movement,” said Kristina Wright, MnCUN vice president of association services. “While the products and services offered by our countries may differ, we discovered that the fundamental credit union philosophy of people helping people remains strong.”

Texas Senate passes payday lending bill

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AUSTIN, Texas (5/26/11)--The Texas State Senate passed two bills Monday that will regulate payday lenders. HB252 requires credit service organizations to give consumers “adequate information” about costs they will be charged before they sign any lending agreements (The Texas Tribune May 23). The bill expands notice and disclosure requirements for lenders. A companion bill--HB 2594--requires payday and car-title lenders to be licensed and regulated by the state of Texas. The two bills now go back to the Texas House of Representatives for another review. If the House approves the legislation, the bills go to Gov. Rick Perry for signature.

Tornado is first time CUAid in two-at-once relief campaigns

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MADISON, Wis. and JOPLIN, Mo. (5/26/11)--Tornadoes last month in Alabama and the South as well as this week's in Missouri, Wisconsin and Oklahoma have marked a first for CUAid, says the National Credit Union Foundation (NCUF). It's the first time the credit unions' disaster relief program has run two relief campaigns simultaneously.
Click to view larger image Although it had minor tornado damage, Postal Federal Community CU's Joplin, Mo., branch location and employees are aiding neighbors affected by Sunday's massive tornado. The credit union is providing computer and internet use, a charging station, and refreshments. One of the appliances charged was an electric wheelchair, said Steve Pierson, president/CEO.
Click to view larger image Postal Federal Community CU, located two blocks from the major tornado devastation in Joplin, Mo., opened its drive-through and ATM Tuesday for business. The lobby remains closed until windows are replaced and other repairs are made. (Photo provided by Postal Federal Community CU)
CUAid had raised more than $50,000 by Wednesday to help credit unions, their employees and members in Sunday's Joplin, Mo., tornado, which damaged four credit unions, one severely. (To make contributions to the fund, use the link.) Meanwhile, a campaign begun after Alabama's devastation by a rash of tornadoes in April is still running, said Christopher Morris, director of communications at NCUF. CUAid.coop is the online disaster relief system activated by NCUF to raise funds for credit union people affected by disasters. "For the Alabama tornadoes we have raised close to $75,000," said Morris. "At the moment, we still have both campaigns open, and this is the first time we have ever had two disaster relief campaigns open simultaneously." He noted that "a large number of the donations have been $20 and $50…even a few for $5." Most are from individuals. However, credit union organizations "have donated more in sum. We've truly seen a groundswell of support so far for our fellow credit union people struck by tragedy," he told News Now. Credit unions at ground zero in Joplin are starting to clean up as well as provide relief to their neighbors. Employees of Postal Federal Community CU (PFCCU) are using its Joplin location to aid neighbors by providing computer and internet use, a charging station and refreshments. The 2007 S. Sergeant branch, located in a residential neighborhood two blocks from where much of the major devastation took place, suffered minor damage and was closed on Monday. With the help of generators, the drive-through and ATM reopened Tuesday. However, the lobby will remain closed while windows are replaced and other repairs are made, said the credit union. Employees of the credit union have been walking through area neighborhoods passing out food and water and inviting those without power to visit the branch to recharge. Eight employees volunteered to help on Wednesday, with more planning to do so throughout the coming weeks. "We were hoping those living near our Joplin branch would be able to benefit by using our electricity to charge their cell phones," said Steve Pierson, president/CEO of PFCCU. He noted that "one woman was so grateful to be able to charge her electric wheelchair--something that hadn't even crossed our minds, but we were glad to do it. There's a reason that this branch was left standing, so now we want to use it to help our neighbors in any way possible." He said the credit union will offer the services to its Joplin neighbors as long as necessary. PFCCU's Springfield and Nixa branches are drop-off locations for 88.3 The Wind radio station's relief effort. For the next few weeks, they will collect prepaid Visa and MasterCard gift cards, which will be donated to Convoy of Hope. All Ozarks credit unions are participating in this effort.
Click to view larger image Bridgeton, Mo.-based Vantage CU has donated $2,000 to the CUAid disaster relief fund activated by the National Credit Union Foundation to help credit unions in Joplin, Mo. Its branches also are donating to American Red Cross and collecting personal items and spare change from members. President/CEO Hubert Hoosman (center, back row) is shown with staff wearing red to support the Red Cross. (Photo provided by Vantage CU)
In St. Louis, Vantage CU President/CEO Hubert Hoosman Jr. announced Wednesday that his credit union is sending $2,000 to NCUF to assist in emergency relief for Joplin's credit unions. The credit union said Hoosman is grateful that both the New Year's Eve and Good Friday tornadoes that hit the St. Louis area left Vantage CU relatively unscathed. "We see the destruction literally all around us and we count our blessings that we were spared," he said. "We just could not pass up an opportunity to join NCUF in such a worthwhile and timely cause." Employees at the credit union had a dress-down day Wednesday, which by midday had netted $1,400. Proceeds will go to the American Red Cross. They also are collecting toiletries and have spare change jars in the credit unions branches so members can contribute.

WOCCU proceeds with Haiti mobile banking

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PORT-AU-PRINCE, Haiti (5/26/11)--A World Council of Credit Unions (WOCCU) initiative may one day provide nearly all people living in Haiti with the ability to conduct financial transactions on their cell phones.
Click to view larger image Haiti’s 2010 earthquake left more than one million survivors homeless, and many still live in tent camps, where robbery and assault is a constant danger, said the World Council of Credit Unions. It is working with the Haiti Mobile Money Initiative to provide access to affordable, secure transactions through their cell phones, keeping their money safe in an unsafe environment. (Photo provided by World Council of Credit Unions)
The Haiti Mobile Money Initiative (HMMI), a partnership between the Bill & Melinda Gates Foundation and the U.S. Agency for International Development (USAID), is managed by WOCCU's Haiti Integrated Financing for Value Chains and Enterprises (HIFIVE) program. HMMI is working with local mobile network operators and their partner financial institutions to provide Haitians with improved access to financial services nationwide. The initiative believes that access to safe, affordable financial services is an effective way to provide disaster and poverty relief and stimulate economic development. Mobile money allows the poor in rural or underserved areas to safely and cheaply receive, send and save money, which directly contributes to improved economic well-being, said WOCCU. “This is a program the scope of which has never before been tried,” said Greta Greathouse, HIFIVE chief of party. “We have created a competition to provide the private sector with incentives to launch payment platforms that will contribute to our goal of increased financial inclusion.” HIFIVE has been involved in the initiative since its launch in June 2010. WOCCU oversees the program and has administrative authority over a grant from the Gates foundation to award prizes to organizations providing mobile money services via cell phones to as many of Haiti’s estimated 9.5 million people as possible. The Gates foundation funding provides up to $10 million in prize money for HMMI program participants. Up to $5 million of technical assistance grants from USAID are available to help address obstacles to implementation and to assure that more Haitians have access to mobile banking. (All amounts are in U.S. dollars.) “We have seen remote banking services work effectively in Mexico and Kenya and are encouraged by the support of our initiative in Haiti,” said Brian Branch, WOCCU executive vice president and chief operating officer. “Given the challenges the Haitian people face, we believe mobile banking may be the best and, in some cases, only option for financial services as their country continues to rebuild.” Haiti’s devastating earthquake on Jan. 12, 2010, left 316,000 dead and more than a million homeless, half of whom still live in tent camps. Lack of a secure place to keep their money puts many Haitians at risk for robbery and assault, problems that are reduced through a widespread cell phone banking program, said WOCCU. Such payment platforms can help address the limited points of financial service available in Haiti, where the population in many zones may face more than a seven-hour walk to conduct the simplest financial transactions. Service provider Digicel, based in Bermuda and serving countries throughout Latin America and the Caribbean, in January won the $2.5 million “First to Market Award” for providing mobile money services within the program’s parameters. The company’s Tcho Tcho Mobile--tcho tcho is Creole slang for “money”--is the first service to offer Haitians an electronic alternative to carrying cash. The remaining $7.5 million in award money will be presented to companies that help expand and grow mobile banking services. “Haiti has a very high rate of cell phone penetration and a massive pre-existing cell phone platform,” Greathouse said, noting that nearly half of the country’s population owns cell phones. “Haitians have shown themselves to be highly adaptive to new technology, and we see a very bright future for this program.”

Six honored by Maine league

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PORTLAND, Maine (5/26/11)--The Maine Credit Union League recently honored six individuals for their contributions to the success of Maine’s credit unions. The recipients were recognized and presented with their awards in Augusta on May 20 in conjunction with the Maine League's 73rd Annual Meeting and Convention. The 2011 Maine Credit Union League award winners are:
Click to view larger image Robert Brewer (left), chair of Five County CU, Bath, Maine, is pictured with Five County CU President/CEO, Richard Dupuis, after Brewer received the Maine CU League’s Outstanding Credit Union Volunteer Award.
* Robert “Bobby” Brewer--Alexander Ferguson Award for Outstanding Credit Union Volunteer. Brewer is board chair of Five County CU, Bath, and has been involved with the credit union for 33 years, including the past seven as board chair. Brewer also is involved in community organizations including Habitat for Humanity, the Cancer Foundation and the Salvation Army.
Click to view larger image Gail Richardson (left), Bath, Maine-based Midcoast FCU’s President/CEO, received the Maine Credit Union League’s Award for Outstanding Credit Union President/CEO. She was presented the Award by the 2010 recipient, Ken Acker, President/CEO of TruChoice FCU, South Portland, Maine. (Photos provided by the Maine Credit Union League)
* Gail Richardson--James M. Gratto Award for Outstanding Credit Union Manager. Richardson is president/CEO of Midcoast FCU, Bath. A 29-year employee of Midcoast FCU, Richardson rose through the ranks starting as a part-time teller in 1982. In 2000, she became president/CEO and, under her leadership, the credit union’s assets have doubled. Richardson has served as a member of the Maine Credit Union League’s board of directors for the past 11 years, and is active in raising funds for Special Olympics and the Maine Credit Unions’ Campaign for Ending Hunger. * Trina Mercier--Jeannette G. Morin Award for Outstanding Credit Union Employee. Mercier is assistant vice president at Central Maine FCU in Lewiston. Since joining the credit union in 1996, Mercier has held a variety of positions including teller, computer clerk, and operations specialist. * Luke Labbe--Maine CU League President's Award for Outstanding League Volunteer. Labbe is president/CEO of PeoplesChoice CU, Saco, and was honored by league President John Murphy. Labbe, who chairs the league’s Social Responsibility Committee, was recognized for his activities, including testifying on behalf of Maine credit unions in Augusta, and creating the Polar Bear Scramble, a benefit, virtual golf tournament that raised $80,000 for the Maine Credit Unions’ Campaign for Ending Hunger and other causes in its eight-year history. * Catie Scribner--Diane L. Oceretko “People Helping People” Award. Scribner is executive administrator at Evergreen CU, Portland. An 18-year credit union employee, Scribner has been a part of the committee that helps coordinate the Maine Credit Unions’ Campaign for Ending Hunger for the past decade, and helped her credit union be one of the fundraising leaders in the campaign. * Roland Poirier--Governmental Affairs and Political Involvement Award. Poirier is president/CEO of Otis FCU, Jay. Poirier was recognized for volunteering on various political campaigns and communicating with legislators and members of Congress regularly.

GCUA study Georgia consumers reluctant to spend

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ATLANTA (5/25/11)--Georgia consumers remain reluctant to spend money on big ticket items, opting instead to squirrel away as much of their income as possible, according to new data and poll results from the Georgia Credit Union Affiliates (GCUA). Coinciding with their desire to spend less, the balances of credit union members' savings accounts grew more than 4.6% during the first three months of 2011 while credit card debt decreased 4.2%, according to Georgia Credit Unions' "Paying Attention." The quarterly report compiles recent poll responses from more than 4,000 credit union members and aggregated data from credit unions statewide. "It's no surprise that Georgia consumers are still reluctant to get out there and spend given the continued economic uncertainty," said Mike Mercer, GCUA president/CEO. "Consumers are still working to save as much money as they realistically can and they're making progress at reducing their debt load." For example, 77.1% of people polled reported they are keeping their vehicles longer to avoid the cost of a new or used automobile. Of the 13.2% who said they plan to purchase a vehicle in 2011, only 16.4% indicated they were considering a new vehicle. Travel plans showed similar results. Only 20.9% of respondents plan to spend more on travel in 2011 than in 2010, while 37.8% plan to spend less, according to the GCUA poll. Also, 50.8% put off travel and/or vacation plans in 2010, while 51.5% said they spent less on travel in 2010 than they did a year earlier. In conjunction with the consumer poll, GCUA compiled savings and lending data from 39 credit unions that represent 91% of credit union assets and 84% of members in Georgia. The results reflect a continuing trend toward savings, while figures for lending varied, said GCUA. Findings include:
* Total savings deposits rose at a rate of 4.6% during the first quarter and 8.3% over the past 12 months; * Money market accounts grew 4.34% for the quarter and 15.47% over the past 12 months; * New-vehicle loans grew 0.52% during the quarter, but decreased 4.08% over the past year; * First mortgage balances increased 0.99% for the quarter and 9.04% during the past year; * The number of bankruptcy filings among members decreased 3.18% during March 2011 compared with March 2010; * Credit card balances decreased 4.22% during the first three months of the year, but have still increased 3.53% from a year ago; and * Balances for other forms of unsecured loans dropped 4.49% during the first quarter.

CU System briefs (05/24/2011)

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* FARMERS BRANCH, Texas (5/25/11)--Counterfeit checks are circulating under the name of Austin (Texas) Telco FCU, according to the Texas Credit Union League (LoneStar Leaguer May 25). Three checks were reported to have been deposited or cashed in the northeastern part of the country, Karen Robinson, senior vice president of human resources and branch operations at the $1 billion asset credit union, told the league. No losses have been reported. The bogus checks have a routing number that doesn't belong to the credit union, said the article …

Sunmark creates Duck Pirates video game

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LATHAM, N.Y. (5/25/11)--Move over, Angry Birds, and make room for the Duck Pirates, a video game created by Latham, N.C.-based Sunmark FCU to help build the credit union's profile among Generation Y while raising funds for a local food bank. Duck Pirates was created in-house at the credit union by Ryan Hickman, whose day job at Sunmark is spent working on its website and mobile banking platforms. It took him two weeks to build Duck Pirates, which is patterned after the Angry Birds video game (timesunion.com May 21). The game pits a Sunmark duck against pirate monkeys. The player gets points by hurling a duck at the monkeys and knocking them from their perches. The credit union created the game to reach an audience that pays less attention to traditional media and to benefit the Regional Food Bank of Northeaster New York. At the beginning of the game, players receive an option to donate $5 to the food bank. Sunmark did not publicize or promote the game but relied on word-of-mouth. By Friday, the game had been downloaded 8,500 times. The credit union launched a broader promotional campaign on Monday. The credit union said it plans to team up with the Tri-City ValleyCats and radio station WGNA on spin-offs of the game, which would also benefit the food bank. The game, which is on Sunmark's Facebook page, is free to download and is available at Apple and Droid application stores. Use the link to learn more.

NCUA assists Missouri CUs in tornados wake

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WASHINGTON and ST. LOUIS (5/25/11)--Four credit unions damaged in the massive tornado Sunday in Joplin, Mo., are operating, with one relocating its Joplin operations to another branch until further notice. The National Credit Union Administration (NCUA) Board reminded that its disaster relief policy will assist credit unions and their members in dealing with local recovery efforts. Missouri credit unions are open, but some Joplin branches are closed as they work to fix storm damage, repair telephone lines and restore electricity, said NCUA. The Missouri Credit Union Association (MCUA) provided an update Tuesday afternoon on the four Joplin credit union branches that reported varying degrees of damages. All of them are distributing forms for CUAid.coop, said Amy M. Bucaida, vice president, marketing and communications at MCUA. CUAid.coop is the online disaster relief system activated by the National Credit Union Foundation to raise funds for credit union people affected by the Missouri twister. To make contributions to the fund, use the link. Here's the status of the credit unions:
* District 7 Highway CU, which had minimal damage and was without power or a telephone on Monday, reported Tuesday that its offices are open and business is being conducted as usual. Its operations were not terribly affected by the storm, said Bucaida. * Postal Federal Community CU's Joplin branch opened at 10 a.m. Tuesday, ready to do business, said MCUA. Its branch, a CO-OP Network shared branch, was severely damaged with windows blown out and was closed on Monday (News Now May 24). * Great Plains FCU has moved its Joplin operations to its Carthage branch. "We have not received any information as to when they believe the Joplin branch will be up and running," said MCUA. On Monday, Great Plains' President Ken Martin had said the branch had damages and advised employees to stay home while the Missouri National Guard continued to search for more victims. MCUA noted that the credit union's staff "are very happy to have CUAid and have commented they are really appreciative of the help they've received." * Joplin Metro CU, which sustained minor damage at several branches, reported Tuesday to the association that its branches are up and running and that it "would get CUAid forms today."
NCUA said that under its disaster assistance policy, it will, where necessary:
* Encourage credit unions to make loans with special terms and reduced documentation to affected members; * Reschedule routine examinations of affected credit unions, if necessary; * Guarantee lines of credit for credit unions through the National Credit Union Share Insurance Fund; and * Make loans to meet the liquidity needs of member credit unions through the Central Liquidity Facility.
The agency will work with Missouri state league organizations and state regulators to ensure all federally insured credit unions know about NCUA's available assistance. Agency examiners will remain in close contact with the affected credit unions to offer advice and assistance. During disaster conditions, NCUA personnel operate under three priorities:
* Ensure the safety of credit union staff; * Keep facilities and operations available to members; and * Provide material and technical assistance, as needed, to affected credit unions.
Federal credit unions may also provide assistance to other credit unions and non-members in the affected areas under certain conditions:
* A federal credit union may provide services to persons who are members of another credit union under their correspondent services authority. * Emergency financial services for non-members, including check cashing, access to ATM networks, or other services to meet short-term emergency needs of individuals in the areas affected by the storms, can be provided under the authority to engage in charitable activities. * Federal credit unions providing services on a charitable basis may not impose charges for services that exceed their direct costs.
NCUA's Region IV office in Austin can be contacted at 512-342-5600 during normal business hours to assist credit unions and members needing help in Joplin. Previous presidential disaster declarations already cover Joplin, which means NCUA's services were in effect at the time the tornado hit. While tornados are in the news, CUNA Strategic Services provider Agility Recovery noted that it is National Hurricane Preparedness Week. Agility is hosting a webinar today on preparing for the hurricane season. Use the link for more information.

SECU eliminates wage garnishment option

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RALEIGH, N.C. (5/25/11)--State Employees’ CU (SECU), Raleigh, N.C., will no longer use wage garnishment as a collection tool for its members. Although the state of North Carolina protects employees’ wages against garnishment, SECU has members in all 50 states, and wage garnishment is legally available in the bordering states of Georgia, Virginia and Tennessee. The ban on wage garnishment as a collection practice is effective June 1, said SECU. “In this economic environment, with the increased financial stress on members from layoffs, furloughs, and cutbacks, wage garnishment can further heighten the family crises that are now occurring to many fine, dependable SECU members,” said Phil Greer, senior vice president of loan administration at SECU. “Wage garnishment is also highly disruptive to the employer/employee relationship for members who are continuing to work, creating additional stress in the work environment,” Greer added. “These are exceptionally severe economic times and require exceptional care in helping members work through this crisis.” Greer noted that SECU supports the use of wage garnishment in helping resolve social obligations such as taxes, child support, alimony and fraud. “Working directly with the member on personal debts is the better, fairer choice in this economic climate,” he said. “Helping our good members regain their financial footing quickly is the best way to assure that existing obligations will be honored.”

Harbor CU closes Algoma branch

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GREEN BAY, Wis. (5/25/11)--Harbor CU has closed its Algoma, Wis. branch. A rise in loan delinquencies related to the current economic climate was the reason behind the closing, Michael DeGrand, president/CEO of the $105 million-asset Green Bay, Wis.-based credit union told the Door County Advocate May 23). After a management review, the credit union’s only options for cutting expenses were staff layoffs or branch consolidation, De Grand said. Harbor CU remains well capitalized, he added. The credit union’s presence in Algoma dates back to 1986 after a merger with Kewaunee County Community CU. Harbor has branches in five Wisconsin cities.

Indiana league Businesses need access to credit

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INDIANAPOLIS (5/25/11)--U.S. businesses need more access to credit, and credit unions are poised to help them out, the Indiana Credit Union League told IBJNEWS Sunday. Not only do businesses need more credit, they also need more options to find the best rates possible, John McKenzie, president of the league, told the publication. Credit unions are ready and able to provide more member business lending (MBL) that businesses are asking for, McKenzie added. The Credit Union National Association (CUNA) and credit unions are trying to get Congress to increase credit unions’ MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA has said. About 10 Indiana credit unions do roughly half the state’s credit union lending, and most of those credit unions are approaching the cap, McKenzie told IBJNEWS. The article also mentioned Forum CU, Indianapolis, and how it almost bumped the MBL cap two years ago. To read the article, use the link.

State official to N.Y. CDFIs Input on councils needed

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NEW YORK (5/25/11)--New York Lt. Gov. Robert Duffy said it is Gov. Andrew Cuomo’s intention to include state community development financial institutions (CDFIs) in the regional economic development process “because nobody has a better sense of what is happening on the street than CDFIs.”
New York Lt. Gov. Robert Duffy, speaking at the 2011 New York Coalition of CDFIs Statewide Conference, May 16-17 in Albany, N.Y., said Gov. Andrew Cuomo’s administration seeks the input of community development financial institutions in the regional economic development process. (Photo provided by National Federation of Community Development Credit Unions)
Duffy delivered the keynote address at the 2011 New York Coalition of CDFIs Statewide Conference, May 16-17 in Albany, N.Y. The conference was organized by the National Federation of Community Development Credit Unions, the sponsor and founder of the coalition. In January, Cuomo announced a series of regional economic councils that will work with state agencies to help allocate economic development resources where they are most needed. Duffy--who will lead the councils--reiterated the administration’s commitment to ensuring those most affected by the poor economy are reached. He said CDFIs should “tell us what we should be doing [to support their efforts].” Also, at the conference, Clifford Rosenthal, federation president/CEO and board member of the national CDFI Coalition, discussed threats to the U.S. Department of Treasury CDFI Fund, which has provided more than $117 million to New York CDFIs since its inception. The fund has $227 million funded for the fiscal year ending Sept. 30. It was was spared major cuts in the recent budget battle, with a $20 million reduction from fiscal year 2010, and a $23 million reduction compared from what was requested for fiscal year 2011, according to the federation. However, the program could face significant reductions next year. “CDFIs received unprecedented levels of funding and support in 2010 for asset building, savings, entrepreneurship and microenterprise programs, but most importantly recognition that CDFIs are an integral part of the solution to the country’s economic woes and the critical role they play in stimulating the nation’s economic growth,” Rosenthal said. “Now that funding is being threatened.” New York state has the largest concentration of CDFIs in the U.S., with more than 110 community development credit unions, loan funds, community development banks, and affordable housing agencies ranging from multi-million dollar financial intermediaries to small microenterprise loans funds.

N.Y. Pa. CUs meet on interchange with lawmakers

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ALBANY, N.Y., and HARRISBURG, Pa. (5/25/11)--Debit interchange fees was the topic addressed at meetings that New York and Pennsylvania credit unions recently held with their respective members of Congress.
Talking about interchange last week at the office of U.S. Rep. Ann Marie Buerkle (R-N.Y.) were, from left: Michael Lanotte, John Stevenson, Michael Vadala, John Wakefield, Vicky O'Neill, William J. Mellin, Pamela Heald, Jack Houseknecht, Marilyn Marra-Crolick, Christine Peters, Buerkle, Mark Pfisterer, Luis Marina, Mike Giles and Ann Tyler. (Photo provided by the Credit Union Association of New York)
Fifteen leaders from nine New York credit unions and the Credit Union Association of New York met Friday with freshman U.S. Rep. Ann Marie Buerkle (R-N.Y.) at her Syracuse office. The only item on their agenda was interchange. Buerkle listened as the group explained the ins and outs of the Dodd-Frank Act and how--in its current state--it would be detrimental not only to members but to all consumers nationwide, said the association. They shared letters from their members asking support for H.R. 1081, legislation proposed by U.S. Rep. Shelley Moore Capito (R-W.Va.) and seeking a delay of the implementation of the Federal Reserve's debit interchange rule until a more comprehensive study of its implications can be completed. Five congressional representatives from the state are co-sponsors of the bill. Association President/CEO William J. Mellin and Senior Vice President/General Counsel Michael Lanotte were joined by leaders from AmeriCU CU; ACMG FCU; CORE FCU; Empower FCU; Family First of NY FCU, Focal Point FCU, Reliant Community FCU, The Summit FCU, and Visions FCU.
U.S. Rep. Mike Kelly (R-Pa.), center, met with Erie, Pa., credit union representatives, from left: Erie FCU's Tracey Cettin, director of human resources; Brian Waugaman, chief operating officer, and Mary Beth Wilcher, CEO; and Erie General Electric FCU's Gail Cook, CEO; and Trent Mason, chief managing officer; and Sandi Carangi, vice president of business services, Erie FCU. (Photo provided by the Pennsylvania Credit Union Association)
In Pennsylvania, credit union officials met with U.S. Rep. Mike Kelly (R-Pa.) at Erie (Pa.) FCU's corporate office to thank him for supporting the interchange delay legislation. The group emphasized that the Fed's proposal would hurt the ability of smaller financial institutions to serve members and operate. The Pennsylvania group also discussed raising the member business lending cap as well as the state and federal budgets and reliance of domestic energy. The Credit Union National Association supports both the legislation to delay implementation of the interchange rule until a study can be completed on the effects of the rule, and a measure that would raise credit unions' member business lending cap to 27.5% from 12.25%.

CU of So. Calif. Inland Empire CU plan merger

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WHITTIER and POMONA, Calif. (5/25/11)--Credit Union of Southern Calif. (CU SoCal), Whittier, Calif., and Inland Empire CU (IECU), Pomona, Calif., Monday announced plans to merge after the boards of both credit unions filed for regulatory approval to do so. The merger would create a combined organization--retaining the CU SoCal name--with $642 million in assets, eight branches and 19 proprietary ATMs, which would serve 50,000 members, said a press release. Dave Gunderson, CU SoCal president/CEO, would become president/CEO of the combined credit union. Rick Hoffman, IECU president/CEO, would assume the role of vice president of legislative affairs and business development with the new organization. All branches of both credit unions would stay open, and all employees of CU SoCal and IECU would remain employed after completion of the merger. Although both credit unions are financially strong and performing well, a combined organization will engender a stronger commitment to the area community and provide additional opportunities for employees, Gunderson said.

Michigan CU regulator appointed to NASCUS board

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ARLINGTON, Va. (5/25/11)--Tom Candon, Vermont credit union regulator and chairman of the National Association of State Credit Union Supervisors (NASCUS), has appointed John J. Kolhoff of Michigan to the NASCUS Board of Directors. Kolhoff, deputy commissioner of credit unions for the Michigan Office of Financial and Insurance Regulation, has held several positions with the Michigan agency since 1994. In his current role, he is responsible for safety and soundness supervision of 199 state-chartered credit unions and information technology examinations for all state-chartered credit unions and banks in the state. Kolhoff also has served on numerous NASCUS committees and task forces and is currently chairman of the organization’s National Institute for State Credit Union Examination (NISCUE). Kolhoff will fill an unexpired term ending in September. “John is a respected, long-time member of NASCUS and the state credit union regulatory community,” said NASCUS President/CEO Mary Martha Fortney, in welcoming Kolhoff to the board.

More suits filed on ATM notices in New Mexico

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LAS CRUCES, N.M. (5/24/11)--Three more lawsuits over ATM disclosures of fees have been filed against three credit unions in New Mexico by a Michigan couple who have already filed dozens of similar suits in Michigan and elsewhere. Nancy Kinder and Ray Harrison of Fowlerville, Mich., both retirees, drive around the country looking for ATMs without proper fee-notification signs and photograph ATMs without legal signage, according to court records. They then file class actions lawsuits against credit unions and banks who own the ATMs, saying nondisclosure of fees charged for transactions at ATMs violates Regulation E, the Electronics Funds Transfer Act. The law requires institutions to post a notice in a prominent place on the ATM about fees. More than 36 lawsuits, excluding the most recent three, have been filed in the past 18 months. Working with them is a Chevy Chase, Md., lawyer, Geoffrey Bestor, who teams with local attorneys to file the cases in other states. Bestor and Richard N. Feferman of Feferman & Warren, Albuquerque, N.M., filed the three New Mexico lawsuits. The latest suits are against White Sands FCU and Chino, FCU, both of Las Cruces, N.M., and Firstlight FCU, El Paso, Texas. Firstlight owns and operates several ATMs in New Mexico, said court documents. The suits filed are identical, except for the ATM and credit union information, and were all filed May 17. The rash of suits prompted CUNA Mutual Group to issue a warning to credit unions about a "significant" spike in lawsuits against credit unions related to ATM fee disclosures. Twelve suits were filed between mid-December and January (News Now Jan. 14). At that time, the insurance company said many credit unions sued erroneously believed that a fee notice sign was not necessary since the fee was disclosed on the terminal screen of the ATM. Some suits were prompted when institutions changed their fees but not their signs.

Fed in TCF case files appeals court argument

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WASHINGTON (5/24/11)--Free market vs. price fixing in the interchange debate has found its way into the Federal Reserve Board arguments filed Friday against TCF National Bank's appeal to block the Fed's implementation of proposed debit card interchange fee cap regulations. In its brief, filed in the U.S. Court of Appeals for the Eighth Circuit, the Fed argued that TCF Bank's expectation for a continued revenue stream from debit transactions is not dependent on the free market but on card companies such as Visa, who set the prices. In its court case brief, the Fed maintained that the a debit card interchange fee cap contained in the Dodd-Frank Wall Street Reform Act "seeks to correct inefficiencies in the market for debit card service by requiring that interchange fees be "reasonable and proportional to the costs of debit transactions is entirely consistent with principles of due process." It noted that TCF Bank "characterizes its interest as a 'right to recover costs plus a reasonable return on the capital invested in its extensive, debit card operation." A protected interest, however, must be more than a unilateral expectation or an abstract need and cannot be merely speculative, the Fed argued. "Nothing in plaintiff's contract with Visa guarantees any minimum interchange fee or even limits the circumstances in which Visa can reduce the fee schedule," said the Fed, noting the lower district court found that "Visa retains unmitigated discretion to set debit interchange fees and there is no statutory or contractual provision guaranteeing TCF a certain level of interchange income." The Fed also indicated that "a continuing threat of litigation creates a meaningful risk that Visa will have to make additional fee adjustments." The bank had argued that Visa has the theoretical right to cut its interchange drastically but said economic and business constraints on Visa will prevent it from substantially reducing the fees. Its appeal is from a decision by the U.S. District Court for the District of South Dakota in Sioux Falls, in which the court denied the bank's motion for a preliminary injunction on April 4 but also did not dismiss the case. TCF's lawsuit, filed in October, states the government cannot write laws--such as the interchange law--that would arbitrarily prevent a business from recovering its costs sufficiently to avoid losses on its business operations. The Credit Union National Association as well as the Clearing House Association LLC, American Bankers Association, Consumer Bankers Association, The Financial Services Roundtable, Independent Community Bankers of America, Midsize Bank Coalition of America, and the National Association of Federal Credit Unions have backed TCF in its suit.

Pair guilty in 1.2M theft in Sharebuilders FCU collapse

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LAS VEGAS (5/24/11)--A Las Vegas couple pleaded guilty Thursday to embezzling $1.2 million from the now defunct Sharebuilders FCU in Northridge, Calif. Mireya Guadaloupe Gonzalez, 37, former manager of the credit union from January 2005 to March 2007, pleaded guilty to one count of embezzlement. She and her husband, Jorge Luis Gonzalez, 35, also pleaded guilty to one count of subscribing to false income tax returns (Las Vegas Sun May 20 and Las Vegas Review-Journal May 21). The Internal Revenue Service (IRS) Criminal Investigation unit and the Federal Bureau of Investigation said Mireye Gonzalez electronically transferred funds from several accounts that were inactive or had minimal funds to a joint checking account with her husband and to two accounts in her children's names. She also allegedly deposited funds from the credit union's general ledger accounts to family accounts. She covered up the thefts by changing names and numbers assigned to the dormant accounts, transferring balances to the dormant accounts from other accounts and providing false information to auditors hired by the credit union. IRS said they didn't report $676,000 in embezzled income in 2005 on their joints tax returns, as well as $338,000 for 2006 and $150,000 for 2007. The withdrawals created large negative balances that substantially jeopardized the safety and soundness of the credit union, said the IRS. The National Credit Union Administration shuttered the credit union in April 2007 due to insolvency.

CUSN announces shared-branch excellence awards

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LAKEWOOD, Colo. (5/24/11)--CU Service Network (CUSN) announced its honorees for the fourth annual Shared Branching Excellence Awards. The awards were presented during the CUSN 2011 annual meeting in Aurora, Colo., May 11. CUSN participants and partners are recognized by CUSN for their work in support of shared branching. CUSN presented awards in two categories. For the Excellence Awards, two awards were presented to credit unions that are active on the network and have achieved the greatest growth/transactions in 2010. They are:
* Latah FCU, Moscow, Idaho--greatest acquirer transaction growth--84%; and * White Crown FCU, Denver--largest ratio of annual issuer transactions to total members--ratio of 6.67.
For the Marketing Excellence Awards, two awards were presented:
* Dupaco Community CU, Dubuque, Iowa--best marketing campaign; and * Horizons North CU, Northglenn, Colo.--best marketing campaign (honorable mention).

CUs hit by tornados CUAid activated

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ST. LOUIS (5/24/11)--Tornados touched down in Missouri and Wisconsin Sunday, causing the National Credit Union Foundation (NCUF) to activate its online disaster relief system, CUAid.coop, to raise money for credit union people affected by a Missouri tornado. A massive tornado struck the town of Joplin, Mo., Sunday, leaving at least 89 dead, the business district demolished and nearly one-third of the community devastated in its wake. The Missouri Credit Union Association (MCUA) is working with local credit unions to help in the aftermath. “All four credit unions with locations in Joplin have checked in with some level of damage,” said Mike Beall, president of MCUA. “Following reports from local credit union leaders, we asked the NCUF to activate CUAid.” MCUA made a donation of $10,000 to CUAid to kick-off the fundraising efforts, and contributions from credit unions bring the total to in excess of $40,000 just hours after activation. The four Missouri credit unions with branches in Joplin--District 7 Highway CU, Great Plains FCU, Joplin Metro CU and Postal Federal Community CU--experienced various levels of damage. Details are currently limited to impact on credit union structures. Postal Federal Community CU’s Joplin branch--a CO-OP Network shared branch--is severely damaged and closed. President Steve Pierson reported there are windows blown out, no power and little access. There is no word when the credit union will reopen. Cindy Atteberry, president of Joplin Metro CU, reported minor damage to the credit union’s locations. Offices are closed without computer access and security running on generators. “I hope no one ever has to go through this,” said Atteberry. “It’s truly horrible.” In addition to the damage at the credit union, Atteberry has a personal toll to bear. Her home was demolished in the storm. Ken Martin, president of Great Plains FCU, said its offices have suffered damage and instructed employees to stay home. The Missouri National Guard closed the area to traffic while it continued its search for storm victims. Offices of District 7 Highway CU had minimal damage, but are without power or telephone. “It’s heartbreaking to see such devastation,” Beall said. “With nearly 40,000 members in the area represented by these four credit unions, we know the need for support from the movement will be great. I urge everyone to give what they can to CUAid to help credit unions do what they do best--be there in times of need for their members.” Natural and man-made disasters often create immediate, emergency needs as well as long-term, ongoing needs. In response, the NCUF’s CUAid disaster relief funds can be used for a broad range of disaster-related needs such as critical care, long-term recovery, insurance pay-outs and reasonable operational needs. MCUA also has made a $5,000 contribution to the American Red Cross for Missouri tornado victims. The Wisconsin Credit Union League told News Now it had received not reports from credit unions in the LaCrosse, Wis., area, which was hit by a tornado Sunday. To make a donation, use the link.

Interchange addressed in Longs meeting with CUs

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SPRINGFIELD, Mo. (5/24/11)--The need for a delay in implementing the debit interchange amendment led the conversation that representatives of five Springfield area credit unions had with U.S. Rep. Billy Long (R-Mo.) May 16 at a meeting in his district office.
Click to view larger image Members of Springfield, Mo., credit unions who recently met with U.S. Rep. Billy Long (R-Mo.) about interchange were, from left: Don Ackerman, TelComm; Amy McLard, Missouri Credit Union Association; Steve Pierson, Postal Federal Community; Cathy Stroud, Community Financial; Carolina Decker, CU Community; Long; Judy Hadsall, CU Community; and Debbie Bills and Kathie Peterie, Metro. (Photo provided by the Missouri Credit Union Association)
Long discussed the issue at length and said his office is hearing from merchants, claiming they are responsible for fraud costs. Meeting attendees brought up a recent data breach and fraud at Sony and Michaels Stores, and how financial institutions cover fraud costs (The Missouri difference May 20). “Our meeting with Congressman Long illustrated that too often [lawmakers] are given misinformation by our opponents, as was the case here,” said Steve Pierson, Postal Federal Community CU president/CEO. The Federal Reserve is not allowed to incorporate most fraud costs into the calculation for the debit interchange rule that is set to go into effect on July 21, said the Missouri Credit Union Association. Although it was due on April 21, the final rule has not been released. The House bill, H.R. 1081, the Consumers Payment System Protection Act, is co-sponsored by U.S. Rep. Blaine Luetkemeyer (R-Mo.), and would delay implementation of the debit interchange amendment language for one year. Attendees also discussed the need to increase member business lending limits for credit unions and the importance of the credit union tax-exempt status. U.S House members nationwide are home in their districts this week. “I think it’s important to get an audience with our politicians as much as possible in today’s environment,” said Judy Hadsall, CU Community CU president/CEO. “We provided information on several issues to Mr. Long, and as a businessman, he understands the importance of protecting the open marketplace without government intervention.” 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. CUNA supports delaying implementation of the proposal until its impact is studied. In a related matter, Cathy Stroud, president/ CEO of Community Financial CU, Springfield, is representing credit union concerns as a member Long’s Small Business and Banking Advisory Council. Long established the council to focus on small business and banking policies, legislation, and additional concerns of the small business and banking industries. Stroud accepted the invitation last week.

Federation CEO honored by Lawyers Alliance of N.Y.

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NEW YORK (5/24/11)--The Lawyers Alliance for New York honored Clifford N. Rosenthal, president/CEO of the National Federations of Community Development Credit Unions, for his public service leadership. In 2009 and 2010, the federation and its Community Development Financial Institution (CDFI) allies worked with the U.S. Department of the Treasury to create the Community Development Capital Initiative (CDCI), which invested capital in financial institutions serving low-income communities. Through the program, the federation partnered with the Lawyers Alliance to pair 45 community development credit unions (CDCUs) with pro bono counsel from 15 law firms in New York and nationwide. The assistance provided by those firms helped participating CDCUs to access about $70 million in low-interest CDCI secondary capital loans. “That kind of money is simply not out there in the current economy, so for our CDCUs to be able to access these funds to expand their service in low- and moderate-income communities nationwide has been a major victory for our movement,” Rosenthal told an audience of more than 450 leaders from the legal financial and nonprofit sectors at the 2011 Business Law & Leadership Gala at Gotham Hall in Manhattan. Rosenthal also noted the daunting the requirements to access CDCI funds would have made it nearly impossible for most CDCUs to comply without the help of the Lawyers Alliance. “I can confidently say that without the assistance provided by the Lawyers Alliance and the pro bono counsel from attorneys nationwide, many of our credit unions would have been forced to drop out of the program,” he said. “They literally saved our members hundreds of thousands of dollars in lawyer fees, and helped us bring millions in much-needed capital to low-income communities across the nation.”

Indiana congressman visits Regional FCUs PAC meeting

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HAMMOND, Ind. (5/24/11)--U.S. Rep. Pete Visclosky (D-Ind.) visited Regional FCU, Hammond, Ind., for the first meeting of the credit union’s new political action committee (PAC).
Click to view larger image U.S. Rep. Pete Visclosky (D-Ind.) met with Northwest Indiana credit union leaders at the first meeting of Hammond, Ind.-based Regional FCU’s newly established political action committee (PAC). From left, Visclosky; Regional FCU President/CEO Jill Banning; Regional Director of Business Development and PAC Chairman Kevin Kosek. (Photo provided by the Indiana Credit Union League)
Visclosky addressed staff, officials and members of the credit union and representatives from the Indiana Credit Union League and other credit unions in northwest Indiana. He discussed national credit union issues, such as maintaining credit unions’ tax exempt status, member business lending and interchange, and district-level concerns, such as job issues in Lake County, Ind. Regional FCU President/CEO Jill Banning emphasized the credit union difference—saying that as financial cooperatives credit unions are owned by members and work to keep costs down for them. If the interchange legislation delay bill does not pass, those who will be hardest hit are the members who can least afford it, she stressed. “Having Rep. Visclosky come to our office and spend time with our group was very valuable,” Banning said. “The purpose of our PAC is to make members more informed about the issues that are important to them and to provide access to those individuals who are legislative decision makers. I think we accomplished that in this first meeting and we have a good model for future events.” The Regional FCU PAC is chaired by Kevin Kosek and will meet again in September. 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. It is asking Congress to stop and study the impact of the proposal.

Moldovan regulators visit Wisconsin CUs

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MADISON, Wis. (5/24/11)--A visiting group of four financial regulators from the former Soviet satellite country of Moldova was told by a Wisconsin credit union executive that adhering to philosophy and maintaining consistency is the key to success.
Click to view larger image Dave Grace (left), World Council of Credit Unions’ senior vice president of association services, explains the importance of savings mobilization to a visiting delegation of Moldovan financial regulators that included (clockwise from left) Tatiana Balan, Alina Cataraga, Alina Dima, Elena Pui and translator Andrey Kutuzov. (Photo provided by the World Council of Credit Unions)
When Ron Kase joined the staff of Landmark CU, now headquartered in New Berlin, Wis., in 1973, assets were $2 million, and members were served by Kase and three employees. Today, as Kase prepares to retire as Landmark’s president/CEO, the credit union--now Wisconsin’s second largest--boasts $1.6 billion in assets and serves 167,252 members from 19 offices. Credit unions grow best when they can mobilize savings for both institutional strengthening and member service, characteristics that contributed greatly to Landmark’s growth, Kase told the Moldovan group. The Moldovans’ visit to Landmark highlighted a week of credit union education sponsored by World Council of Credit Unions (WOCCU). The visiting regulators sought to better understand how successful credit unions operate so their country’s own fledgling industry would be better poised to meet operational standards when the country applies to join the European Union (EU) later this year. “We know that savings-led development coupled with appropriate and enabling regulations are key ingredients for credit union growth,” said Dave Grace, WOCCU senior vice president of association services who co-hosted the visitors with Liliana Tangwall, WOCCU credit union analyst and a Moldova native. “Wisconsin's credit union movement and its regulators did a fantastic job demonstrating the success of these principles.” Adhering to higher standards will be critical for Moldova’s credit unions, which serve about the same number of members as Landmark CU, WOCCU said. The EU requires deposit-taking financial institutions in all its member countries to insure each deposit for up to 100,000 euros (about US$135,000), a sizeable investment for Moldova’s small financial cooperatives and just one of the challenges they face. Landmark was only one stop for the representatives from the National Commission of Financial Market (NCFM), Moldova’s financial regulatory body. The group also visited with Madison CU and Dane County CU, both in Madison, and the Wisconsin Credit Union League, Credit Union National Association and the Wisconsin Department of Financial Institutions’ Office of Credit Unions. A webinar conducted from WOCCU’s Madison headquarters with members of the European Network of Credit Unions, WOCCU’s sub-organization of EU members, provided a European context for what the regulators had learned. The delegation also learned about risk-based supervision, deposit insurance and the importance of sharing best practices among credit unions, their trade association and their regulator, according to Elena Pui, a board member of NCFM. “Considering that Moldova’s system is passing through an emerging consolidation to increase its credibility, information on insurance for shares and loan loss was especially important,” Pui said. “It was very helpful to hear them discussed from many different points of view.” Joining Pui on the delegation were NCFM credit union and microfinance department staff members Alina Dima, Alina Cataraga and Tatiana Balin. The delegation agreed to maintain an ongoing dialogue with WOCCU while it pursues EU membership.

Two join N.Y.s CU Hall of Fame

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ALBANY, N.Y. (5/24/11)--Edward Albright and John Bryson will be inducted into the Credit Union Association of New York’s Credit Union Hall of Fame June 5 at the association’s Annual Meeting and Convention in Lake Placid, N.Y. Albright is a 25-year veteran of the credit union industry. After working as a National Credit Union Administration examiner from 1974 to 1986, he became the manager/CEO and treasurer of Dannemora (N.Y.) FCU, a position he held until his retirement in 2004. Albright also served in multiple leadership roles for the Credit Union Association of New York and its Adirondack chapter. He was his chapter’s Credit Union Legislative Action Council/Credit Union Political Action Council trustee, representing New York credit unions at federal and state governmental affairs conferences. When Dannemora FCU was recently without a CEO, Albright came out of retirement and resumed that role for nine months until a new leader could be hired. John Bryson, who passed away in 2002, became assistant manager of Rochester (N.Y.) Telephone FCU (since renamed The Summit FCU) in 1973, and general manager shortly thereafter. Through his advocacy with NCUA and work with area employers, he grew the Telephone FCU from a single-sponsor, $7 million-asset credit union to a multi-group credit union with more than $150 million in assets. Bryson also helped form the International Telephone Credit Union Association. Long before the credit union industry had shared branching or ATMs, Bryson negotiated a deal with Lincoln First Bank (now Chase Bank) allowing credit union members to make deposits or cash checks at any of the bank’s nearly 150 upstate branches. Prior to his retirement in 1995, Bryson led the planning for the construction of The Summit FCU’s current corporate headquarters in Rochester. “Both of these individuals made credit unions their life work,” said association President/CEO William J. Mellin. “The success and stature of their respective credit unions today can be traced back to their dedication to and involvement in all aspects of the credit union movement throughout their years of service.”

Southeast Corporate proceeds with cap-building plan

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TALLAHASSEE, Fla. (5/24/11)--With no objections from the National Credit Union Administration to its recapitalization plan, Southeast Corporate FCU will has announced it will present its perpetual contributed capital (PCC) subscription to its membership with the goal of raising $80 million. “Over the past few months, we have laid out a comprehensive, 10-year strategy for member/owner credit unions,” said Southeast Corporate FCU President/CEO Brad Miller. “We have incorporated members’ feedback and are pleased to move ahead with our PCC offering.” In communicating the recapitalization plan, the corporate held town hall meetings, webinars, presentations at chapter meetings, credit union manager luncheons and other meetings. Southeast Corporate staff also met one-on-one with credit union executives and and their boards. Jeanne Kucey, president/CEO of JetStream FCU, Miami Lakes, Fla., said her credit union’s board of directors voted unanimously to recapitalize Southeast Corporate. “It’s our best opportunity to preserve current capital,” Kucey said. “There will be no disruption of services or member inconvenience, and it allows for maintaining an effective and cost-efficient single source for payment, settlement and liquidity services.” Tallahassee, Fla.-based Southeast Corporate FCU said its plan focuses on continuity of service, preservation and protection of member capital, long-term sustainable value to credit unions, and compliance with NCUA’s new Part 704 corporate regulation as various requirements take effect in the next few years. The priority is to make sure member credit unions retain access to the efficiencies and economies of scale that are foundational to the corporate business mode, Miller said. Southeast Corporate a will conduct 90-day capital subscription process beginning Wednesday.

Op-ed CU would lose 600K a year on interchange

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SANTA CLARA, Calif. (5/23/11)--In an editorial published in the San Jose Mercury News, the president/CEO of KeyPoint CU said his credit union stands to lose $600,000 a year if the proposed interchange rule is implemented. “Credit unions like mine will lose a big chunk of income that we depend on to give consumers lower rates and free services,” wrote Tim Kramer in the editorial, published Thursday. “So if the rules are implemented by the Fed, my institution is looking at potential losses of roughly $600,000 a year. That’s small change for Wal-Mart, but big money for us.” The losses may force KeyPoint to eliminate reward programs, to begin charging for checking accounts and to impose fees on debit cards, Kramer said. The possibility of these changes give Kramer reason to worry about the future of his credit union, he wrote, because he will no longer be able to offer members the services they expect from a community financial institution. The proposed debit card interchange fee cap of seven cents to 12 cents, down from a current average charge of 44 cents, is 70% to 90% below market rates, Kramer said. “Remember, this expense is for merchants, not consumers,” he wrote. “When you use your debit card to make a purchase, the consumer pays nothing for that convenience. The merchant pays a small fee that helps cover the cost of services like issuing the card, processing transactions and protecting consumers from fraud.” The recent breach of Sony data is an example of the expense fraud can create, Kramer wrote. Credit unions and community banks will end up spending millions reissuing cards as a result of the incident. He noted that 275 of the largest employers in the San Francisco-Silicon Valley region sent a letter to Sen. Dianne Feinstein (D-Calif.) in support of delay and study of the proposal. The group also asked consumers to e-mail and call the state’s congressional delegation to support The Debit Interchange Free Study Act, which would temporarily delay the rules. 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. It is asking Congress to stop and study the impact of the proposal. To read the complete editorial, use the link.

McGrail named Carolinas foundation CEO

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GREENSBORO, N.C. (5/23/11)--John McGrail has been named the new president/CEO of the Carolinas Credit Union Foundation (CCUF). He has 22 years of experience in the credit union industry. For the past 11 years he has served as president/CEO of Lion’s Share FCU in Salisbury, N.C. McGrail has served on the North Carolina Credit Union League board of directors since 2005. He is also a member of the supervisory committee for First Carolina Corporate CU. “John has demonstrated himself to be a talented leader with excellent interpersonal skills and a passion for our industry,” CCUF Chairman John Carlson said. “He brings to the foundation a new vision and a sense of excitement for credit unions’ futures.”

Maine league opposes bill attacking first liens

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PORTLAND, Maine (5/23/11)--The Maine Credit Union League is opposing a third bill in state legislature that seeks to give certain assessments or liens priority over first mortgage liens. The league issued a statewide call to action against the latest bill, L.D. 1332, which would amend the Maine Condominium Act to allow a six-month condo assessment lien to take priority over first-mortgage liens (Weekly Update May 20). Earlier in the month the state's Judiciary Committee voted 9-4 to pass the bill, but the "league is working hard to get the necessary votes to defeat the bill when it is debated on the House floor," likely within the next week or so, said the league. It is asking credit unions in the state to "communicate their opposition to this bill," said League President John Murphy in the newsletter. The other bills, dealing with P.A.C.E. and with child support, were defeated earlier. The league said its position "remains that nothing and no one should take priority over the first lien holders."

Southeastern CU Foundation donates 25K for Alabama relief

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BIRMINGHAM, Ala. (5/23/11)--The Southeastern Credit Union Foundation (SECUF) presented the American Red Cross of Alabama with a check for $25,000 Wednesday in Birmingham to assist the organization with relief efforts stemming from last month's tornadoes.
Click to view larger image From left, Amber Tynan, Southeastern Credit Union Foundation (SECUF) executive director; James Tittle, American Red Cross deputy director of Alabama Tornadoes Disaster Relief Operations; and Joe McGee, chairman of SECUF, with a $25,000 check presented by the foundation to assist with relief efforts from last month's tornadoes. (Photo provided by the League of Southeastern Credit Unions
The foundation visited the Red Cross Operations Center to make the presentation. The Operations Center was a fitting place since the Red Cross uses the center to hand out assignments for workers, medical and mental health professionals, said the foundation. It’s also used to deploy vehicles and the distribution of its supplies. It takes a lot of money to run the Operations Center and large donations keep the operation running smoothly, said SECUF. “Our foundation has been working to help the needs of our credit union staff in Alabama,” said foundation Chairman Joe McGee. “However, the need is so great across the state that we felt we needed to also reach out and offer as much assistance as we could to the residents of Alabama. Donating to the Red Cross will ensure as many people as possible are helped by this contribution.” The SECUF also is continuing to assess the needs of credit union staff who have been affected by the storms. More than $30,000 in grants have been handed out to credit union staff, many of whom have lost everything. The foundation is still accepting donations to its Disaster Relief fund and encourages all credit unions to contribute to the National Credit Union Foundation’s CUAid fund, which the SECUF will match up to $100,000. Information on the Disaster Relief fund and CUAid can be found on the League of Southeastern Credit Unions website at www.lscu.coop or use the resource links.

Idaho league honors volunteer of the year

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BOISE, Idaho (5/23/11)--Joshua Holt of Beehive FCU has been named the Idaho Credit Union League’s Volunteer of the Year. The award was presented at the league’s 75th annual meeting. Holt has been a member of Rexburg-based Beehive FCU's board of directors for the past eight years. He has served as board chair since 2005. In addition to his leadership role at Beehive FCU, Holt volunteers with Kiwanis International, Boy Scouts of America and his church. Holt holds a doctorate in education with an emphasis in organizational learning and is a professor of business at Brigham Young University-Idaho. He is also the coordinator of the Integrated Business Corporation (IBC) on campus, teaching organizational behavior. In the IBC program, students learn what it is like to run a small business from the concept stage to start up. Student groups must run their business on campus for eight weeks. A donation of $250 will be made to the National Credit Union Foundation in Holt’s name, said the league.

Chicago CU uses grant for low-wealth car loans

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CHICAGO (5/23/11)--A $35,000 grant from the National Credit Union Foundation (NCUF) has helped North Side Community FCU, Chicago, offer affordable car loans to low-wealth individuals and families.
With the help of a grant from the National Credit Union Foundation, North Side Community FCU, Chicago, has expanded its used-auto lending program to provide more benefit to low-wealth members. North Side member Chiku Jallah stands next to her 2009 Kia Spectra, purchased through a loan made possible by the credit union’s risk-based auto-lending program. (Photo provided by the National Credit Union Foundation)
North Side Community FCU used the grant to expand its used-auto loan initiative, a sustainable program for low-wealth consumers historically untargeted by traditional community financial institutions. “The purchase of an affordable, quality used car has become more important as jobs become more decentralized,” said Lois Kitsch, NCUF national program director. “Programs like North Side Community FCU’s are essential to helping low-wealth families access the expanded job and housing opportunities that a car can help provide.” The core products and services of North Side Community FCU’s used-auto loan initiative include:
* Refinancing of subprime used-auto loans; * Risk-based auto lending; * Access to affordable used-auto loans to individuals who lack a conventional credit history; * Credit enhancements, including disability and job loss insurance; * Used-car buying seminars in partnership with select-employee groups (SEGs); and * An affordable and accessible menu of financial products and services.
“I wanted to finance with North Side Community FCU because I knew that with my lengthy history as a member, my good credit and their superb customer service, they would offer me a great interest rate with excellent service,” said Chiku Jallah, a credit union member since 200. Her first auto loan was under the credit union’s Access Auto Lending program. Her 2009 Kia Spectra was bought through North Side’s partner, Enterprise Car Sales. Throughout its history, North Side Community FCU has focused on helping low-wealth people build wealth through financial education and basic financial service products. More than half of the credit union’s members have balances of less than $100 in their savings accounts, and more than 75% have balances less than $250. For those with limited means, the only options for financial services are often predatory lenders. As a result North Side Community FCU developed its used-auto initiative to aid borrowers with limited options for obtaining financing due to a lack of conventional credit history. The NCUF report “How Credit Unions Help Car-Buyers Steer Clear of Predatory Loans” helped guide the credit union in developing the program. As of March, 24% of the auto loans underwritten through the program were refinanced auto loans from other lenders. One member improved his interest rate to 7.5% from 10.25%, saving nearly $1,000 in finance charges. Another member refinanced her auto loan to 10% from a 17%, reducing her monthly payment by $300 and freeing up additional funds to pay other debts. The Northside Community FCU has also been able to opened auto loan financing to a wider spectrum of borrowers, including those with low scores or with thin credit files that cannot be scored. The lowest borrower credit score under the program has been 463. Those with credit scores averaged a score of 616. The credit union has held eight “How to Buy a Good Used Car” seminars, with more planned this year. Four of the seminars were in partnership with Heartland Alliance--one of the credit union’s SEGs--and two were led in Spanish. The credit union researched, created and compiled its own curriculum, including a video produced by Consumers for Auto Reliability and Safety. North Side Community FCU’s ability to serve its core membership has helped it grow. The credit union experienced a 57.5% membership increase in 2010 among low- and moderate-income community residents and clients or staff of its 50 SEG partners. Many members are new immigrants to the U.S., mentally ill, and those whose only income is either disability or social security. NCUF grants are made possible by supporters of the foundation and the Community Investment Fund (CIF), an award-winning system of investments that help credit unions earn dividends while donating to national and state community development programs.

CEO finds value in WYCUP program

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MADISON, Wis. (5/23/11)--Since its inception in 2001, more than 125 young credit union leaders have been a part of World Council of Credit Unions’ (WOCCU) Young Credit Union People (WYCUP) scholarship program, which promotes international education and networking opportunities for credit union professionals and volunteers age 35 and under.
Click to view larger image World Council of Credit Unions’ (WOCCU) Young Credit Union People winner Cas Scott of Australia accepts her medal from WOCCU President/CEO Pete Crear at the 2010 World Credit Union Conference. (Photo provided by the World Council of Credit Unions)
June 14 is the deadline to nominate rising stars in the international credit union movement. It may be a first-time nomination or one in a line of multiple WYCUP winners from a credit union, as with Robert Keogh, CEO at Community CPS Australia in Adelaide, South Australia, said WOCCU. “At Community CPS Australia we have been fortunate enough to have two of our young leaders awarded with the WYCUP scholarship--Cas Scott in 2010 and Nick May in 2008,” Keogh said, adding that nominating “potential young leaders for the WYCUP award is a great opportunity to raise the profile of your credit union within industry groups and recognize the efforts of your young leaders.” Nominations are being accepted for individuals under the age of 35 who have made significant contributions within their own credit union system-- locally, regionally or nationally. All WYCUP nominees will be formally recognized at this year’s World Credit Union Conference, July 24-27 in Glasgow, Scotland, and invited to participate in events specifically for WYCU attendees. Events include an all-day educational session and lunch with the WOCCU board of directors. During the awards ceremony, five nominees will receive all-expense-paid scholarships to the 2012 World Credit Union Conference in Gdañsk, Poland. “The WYCUP program has provided our young leaders with international insights and contacts that can be used for collaboration on our credit union's projects, along with invaluable leadership skills and the confidence to make a difference,” Keogh said. “The WYCUP program has also enhanced Cas' and Nick's career paths, and they both hold senior positions within Community CPS Australia.” For more information, use the link, or contact Liliana Tangwall at ltangwall@woccu.org or by calling 1-608-395-2043.

CU System briefs (05/20/2011)

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* GRAND RAPIDS, Mich. (5/23/11)--Marcie Graham, 30, of Lansing, Mich., was indicted last week on federal embezzlement charges. The indictment alleges that she embezzled about $236,000 between December 2008 and October 2010 while employed as an assistant branch manager of Lansing-based Case CU. If convicted, Graham faces up to 30 years in prison, restitution, and/or a fine of $250,000 (Lansing State Journal May 19) … * YORKTOWN, Va. (5/23/11)--Longtime 1st Advantage FCU CEO Adrian "Casey" Duplantier has announced he will retire at the end of the year as the credit union's fourth CEO since it was founded in 1951. He had been with the credit union industry for more than 30 years, including 10 as a CEO in New Orleans and under 25 years with 1st Advantage, Duplantier said. Under his leadership, the credit union grew more than 500% in assets to its current $550 million, merged with several smaller credit unions, changed its membership base to a community charter, and increased branches to seven from four. 1st Advantage ended 2010 with a record net income. The credit union said it expects to have a successor in place by fourth quarter … * PONTIAC, Mich. (5/23/11)--The board of directors at Pontiac, Mich.-based Affinity Group CU, announced that Glenda West has been named as its new president/CEO. The appointment was effective in April. With 32 years of experience, West previously served as vice president of branch operations for eight years at Genisys CU, Pontiac, and as CEO of DuPont CU for eight years. She also has served on the board of the Michigan Credit Union League's Oakland County Chapter for 15 years (Hometownlife.com May 12) … * PORTLAND, Maine (5/23/11)--Herbert Aldrich Sr., current board chairman at Taconnet FCU, Winslow, Maine, died May 11, according to the Maine Credit Union League (Weekly Update May 20). He was 88 (The Morning Sentinel via legacy.com May 14). Aldrich was an active participant not only in his credit union but in the entire credit union movement, said the league.

NCUF prelim data CUs strong fin ed providers

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MADISON, Wis. (5/23/11)--Credit unions are making a difference through financial education, according to preliminary data collected by the National Credit Union Foundation (NCUF) as part of its 2011 Credit Union Member Education Inventory.
Click to view larger image Click for larger view
Click for larger viewIn 2010, for example, 200 credit unions reached 182,000 students through classroom presentations and over a million people received financial counseling or advice. Sponsored by state credit union leagues and NCUF’s REAL Solutions program, the data and information gathered from credit unions will help the credit union movement demonstrate the power of financial education and counseling in the lives of members and communities across the country. A sampling of preliminary results as of May 5, based on the first 200 credit union survey submissions from 37 states, indicates that in 2010, these credit unions:
* Provided formal financial counseling to 225,00 people through199 certified in-house professional counselors; * Referred an additional 37,000 members to counseling agencies; * Provided informal financial counseling to788,000 members; * Developed debt management plans for 19,000 members; * Established mortgage loan workout options for 7,000 members; * Provided 7,300 classroom presentations to 182,000 students; * Conducted 3,000 seminars for 64,000 adults resulting in 3,600 new accounts; * Produced 358 experiential learning programs (such as real-world fairs) for 29,000 students resulting in 800 new members; and * Operated 161 in-school branches with 14,000 student members, $5.9 million on deposit, and 850 student workers.
The information could be used for state and national public awareness, advocacy, and related outreach efforts, said NCUF. The report also will contain state-specific data and comparisons with national statistics and will be accessible to participating credit unions at no charge through the REAL Solutions Impact Center (use the link). Also, a companion tool will detail member financial education/counseling products and credit union best practices. An online survey tool began gathering the data in March. Credit union leagues in 29 states are working with Lois Kitsch, NCUF REAL Solutions national program director, to collect data. All U.S. credit unions are invited to participate. For more information, contact Kitsch at lkitsch@ncuf.coop or at 414-793-1991.

Texas CUs lose friend in baseball great Killebrews death

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FARMERS BRANCH, Texas (5/20/11)--The death Wednesday of baseball legend Harmon Killebrew--whose total of 573 homeruns ranks 11th on the baseball career list--means that Texas credit unions have lost a friend, according to Dick Ensweiler, president/CEO of the Texas Credit Union League. Killebrew went to bat for credit unions a couple of years ago after Hurricane Ike ravaged the Texas Gulf Coast, Ensweiler wrote in the league newsletter, LoneStar Leaguer (May 19). Ensweiler had visited the stricken area after the storm to survey damage to credit unions. He was so moved by credit union employees who went to work every day to help members devastated by the hurricane while suffering losses themselves, that he wrote a memo to himself "so I would never forget the bravery and selflessness of those credit union employees." He shared the memo via e-mail with friends, including Killebrew, who hit at least 40 homes eight times for the Senators and the Minnesota Twins during his career (The New York Times May 19). Killebrew called him and left a message: "What can I do to help?" Ensweiler asked him to assist in a golf charity event to benefit credit union employees who were left homeless or affected by the hurricane, and Killebrew agreed. "He then offered the organization he uses to coordinate his charity golf events to help our Texas Credit Union Foundation (TCUF) staff set up the tournament. Additionally, he would bring celebrities--current and former baseball players--to help add luster to the event," said Ensweiler. After six weeks of planning, Killebrew arrived at the Cowboys Golf Club and brought with him among others, Ozzie Smith, Tim Worrell, Frank Quilici, Frank Kostrow, Charlie Pride, Eddie Bonine and several Rangers, including Kevin Millwood, Cameron Loe and Jim Sundberg. "The event was all we could hope for," wrote Ensweiler. "Because of Harmon's stature with the players, they stayed until the end of all activities, posed for pictures, signed balls and other memorabilia, mingled and talked baseball, all of which made the event very special for those that participated." The event netted $60,000 for TCUF, all of which went to storm-affected employees of credit unions, he said, adding, "I have lost a good friend, and so did the credit unions of Texas."

E-banking satisfaction outpaces offline channels--study

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ANN ARBOR, Mich. (5/20/11)--Customer satisfaction with online banking has increased its lead over customer satisfaction with the overall banking experience, with all types of financial institutions seeing a rise in satisfaction, says the U.S. 2011 ForeSee Results Online Banking Study. Credit unions have gained two points since 2010 in member satisfaction with their online banking service for a total of 86 points--higher than the online banking industry's overall total of 83 on a 100-point scale, according to the Ann Arbor, Mich.-based research firm, ForeSee Results. Nearly every category of banks and credit unions improved since last year's study, with large banks improving the most. Large banks--the ones with the big bucks to spend on online banking channels and who are moving consumers to channels that are less expensive to operate--saw a gain of five points--to 87 from 82. Community banks gained three points to 85. Top banks in two categories received 83, and 82 points. While credit unions' showing continues to be strong, the results indicate that they are facing more challenges in providing online banking services. When asked which banking channel they were most satisfied with, 55% of member/customers surveyed selected the online channel, 28% chose the branch, 13% the ATM, and 2% call center and mobile banking. "Brick-and-mortar banks will never go away, but the huge lead online banking has over other channels when it comes to satisfaction emphasizes the importance to a bank's relationship with its customers," said Larry Freed, president/CEO of ForeSee Results and author of the report. "The roadmap for improving satisfaction will vary from bank to bank, but the only way to manage and improve the customer experience is to measure it." The study measured seven elements of satisfaction with online banking, including navigation, ease of executing online transactions, privacy, the look and feel of the website, selection of bank products and services and the information available about them, website value, and site performance. Credit unions gave the highest priority for improvements to self-directed transactions and establishing the value of the website--both of which have high impact on satisfaction level, said the report. Their lowest priorities were in navigation and products and services, areas of low impact on satisfaction level, the report added. Researchers found that when member/customers are highly satisfied with online banking, they are:
* 41% more likely to continue using online banking services; * 52% more likely to continue using the website instead of costlier channels such as branches and call centers; * 50% more likely to purchase additional services; * 63% more likely to recommend the financial institution; * 63% more likely to trust their banking institution overall; and * 56% more satisfied with their institution overall, regardless of channel.

CU System briefs (05/19/2011)

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* ALTON, Ill. (5/20/11)--A Springfield, Ill., man was charged Wednesday with a robbery last month of Laclede Community CU's North Alton branch in addition to charges in connection with a May 5th robbery of Members First Community CU, Quincy. Adam Taylor Wright, 31, was charged with taking $10,000 from an employee of Laclede on April 22 by threatening the imminent use of force, and theft over $10,000, said a state attorney for Madison County. Members First was robbed of an undisclosed amount by a man wearing a Cleveland Indians baseball cap. He did not display a weapon (The Telegraph.com May 18) … * LENOIR, N.C. (5/20/11)--A man claiming he had placed a pipe bomb in the bathroom of the Lenoir, N.C., branch of Raleigh-based State Employees' CU escaped Tuesday afternoon with an undisclosed amount of cash. No bombs or other weapons were found in the credit union, said Lenoir police. The robbery suspect did not show a weapon or use a written note to demand money. He escaped in a charcoal Buick sedan. The incident occurred at about 4:40 p.m. Tuesday. (Hickory Daily Record May 18) … * ALBANY, N.Y. (5/20/11)--The Credit Union Association of New York is the recipient of three 2011 Hermes Creative Awards--a platinum, gold and an honorable mention. Hermes Creative Awards is an international competition for creative professionals involved in the concept, writing and design of traditional materials and programs, and emerging technologies. The association received a Platinum Award in the Publications/Magazine category for the September 2010 issue of Connection, its quarterly full-color magazine. Get Carducated, Covera Card Solutions’ online video contest, was recognized with a Gold Award in the Web Multimedia, Games, Contests, Presentation category. Connection magazine also received an honorable mention in the Design/Publication Cover category for its March 2011 issue. The 2011 competition received more than 4,400 entries from throughout the U.S., Canada and several other countries ... * KANSAS CITY (5/20/11)--Rob Givens, president/CEO of Mazuma CU, Kansas City, announced Wednesday that he will retire from the $448 million-asset credit union, effective Jan. 1. He began his career at Mazuma in 2001. Since that time, the credit union has grown from $230 million in assets to more than $448 million while increasing Mazuma’s membership to more than 52,000 members and operating 10 branches within a three-county area. Givens has spent more than 25 years in the credit union industry, holding leadership positions at seven credit unions in California, Nevada and Missouri varying in asset size from $75 million to more than $2 billion … * NEENAH, Wis. (5/20/11)--Sherry Johnson, president of Evergreen CU, Neenah, Wis., will retire June 30 after 27 years of service with the credit union. She began as president in 1984 when the credit union was named Wisconsin Tissue Employees CU. She has led the credit union through a number of changes, including the name change, a change to a community charter, the opening of a new headquarters, and a sustained period of growth. Mike Brandt, vice president of lending at Evergreen CU, has been selected to replace Johnson … * ST. JOHN’S, Newfoundland (5/20/11)--Jamie King, president/CEO and co-founder of Verafin, a provider of compliance, anti-money laundering and fraud detection software, has been chosen as one of Atlantic Business magazine’s Top 50 CEOs for 2011. “This award really recognizes the devotion of the entire Verafin team, including my fellow co-founders Brendan Brothers and Raymond Pretty,” King said. Verafin reported a 36% increase in customer growth in 2010, while maintaining a 99% customer retention rate. This year the company launched Winter ’11, a major new release of its fraud detection and anti-money laundering software. Verafin is a CUNA Strategic Services provider

MSCUA announces board recognitions

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JACKSON, Miss. (5/20/11)--With more than 550 people in attendance, the Mississippi Credit Union Association (MSCUA) announced the results of its board elections and recognized other individuals and organizations at its 74th annual meeting in Biloxi, May 11-14. Elected to three-year board terms were:
* Billy Bridges, Mutual CU, Vicksburg; * Elmer Dickens, Gulf Coast Community FCU, Gulfport; * Steve Pollman, Magnolia FCU, Jackson; and * Lt. Col. Dean Todd, USAF, (Ret.), Keesler FCU, Biloxi.
Elected to fill un-expired terms were Dennis Florreich, Meridian (Miss.) Mutual FCU (one year), and Kaye Ray, Central Sunbelt FCU, Laurel (two years). MSCUA board officers are:
* Chairman--Jimmy Smith, Singing River FCU, Moss Point; * Vice-chairman--Bridges; * Treasurer--Ray Scott, USM FCU, Hattiesburg; and * Executive committee member--Todd.
Four individuals were inducted into the Mississippi Credit Union Hall of Fame:
* John Baker, Mississippi Postal Employees FCU, Jackson; * George Kirby, Ferguson FCU, Monticello; * Lavina Robison, Missississippi DHS FCU, Jackson; and * Todd.
Recognition was paid to the these individuals and credit unions:
* Scotty Broome, retired president/CEO of Keesler FCU, Biloxi, for his 2011 induction into the Credit Union House Hall of Leaders; * Keesler FCU for its 2010 Dora Maxwell Social Responsibility Program and Desjardin Youth Financial Education awards; and * Statewide FCU, Flowood, as the top 2010 Credit Unions for Kids fundraiser.

Maine league kicks off convention today

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PORTLAND, Maine (5/20/11)--The Maine Credit Union League will hold its 73rd Annual Meeting and Convention today and tomorrow. This year’s theme, “Maine’s Credit Unions--Unleash the Power,” highlights the strength of the state’s cooperative financial institutions. More consumers are using the state’s credit unions, and credit unions’ growth has been documented. Total assets for Maine credit unions grew nearly 4% in 2010, said the league. Combined assets now total $5.39 billion. Loans grew by more than $83 million or 2.3% for the year, while shares increased by 4.5% or $206 million. Membership at Maine credit unions increased 1% in 2010, with a net gain of 4,115 members in 2010. Membership at Maine’s credit unions is now 611,000. During the two-day annual conference, U.S. Reps. Michael Michaud (D-Maine) and Chellie Pingree (D-Maine) will address an expected 700 attendees. Former Maine Gov. Angus King Jr. will be the keynote speaker at the annual delegates’ meeting. Gov. King will discuss the powerful role that leadership has in building and continuing success in the marketplace.

PCUA receives state kudos on fin ed

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HARRISBURG, Pa. (5/20/11)--The Pennsylvania Credit Union Association (PCUA) and a key staffer received kudos as strong partners in promoting financial education this week at the fifth Annual Common Wealth Symposium in Grantville, Pa. Mary Rosenkrans, director of the Pennsylvania Office of Financial Education, which sponsored the event, recognized PCUA and Mike Wishnow, PCUA senior vice president, communications and marketing, as strong partners in promoting financial education in the state (Life is a Highway May 18). She noted the Investor Education in Your Workplace program, and the PCUA’s work with the Pennsylvania Securities Commission in offering the program to credit unions. Wishnow acknowledged the efforts of the Pennsylvania Credit Union Foundation in supporting and promoting financial education programs. Secretary of Banking Glenn Moyer was the keynote speaker. He told attendees, “Financial education is an employee benefit that costs little to nothing and helps to improve both the financial capabilities of employees, as well as employee productivity.” Ted Beck, CEO of the National Endowment for Financial Education and the President’s Advisory Council on Financial Capability, spoke to the group on the National Strategy for Financial Literacy, including goals and core competencies. Credit unions were well represented at the conference, PCUA said. Participants included: Kim Dietrich, AmeriChoice FCU, Mechanicsburg; Tricia Heisey, Belco Community CU, Harrisburg; Trish Shermot, CTCE FCU, Reading; Nancy Urban, HealthCare First CU, Johnstown; and Holly Wilds, NE PA Community FCU, Stroudsburg.

2011 Exec Committee announced by CFO Council

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MADISON, Wis. (5/20/11)--CUNA CFO Council officers and executive committee election results were announced during the council’s 17th annual conference this week in San Diego. New council officers are:
* Chair--David D’Annunzio, senior vice president and chief financial officer (CFO), Heritage Trust FCU, Charleston, S.C.; * Vice chair--Brandon Michaels, CFO, Mazuma CU, Kansas City; and * Secretary/Treasurer--Kevin Durrance, CFO, Old Hickory (Tenn.) CU.
Suzanne Weinstein, CFO, Orlando (Fla.) FCU, and William Kennedy, CFO, Jersey Shore FCU, Northfield, N.J., were elected to the executive committee. They replace outgoing members Dan LeClerc, president/CEO, GHS FCU, Binghamton, N.Y., and Steve Smith, CFO, Sharonview FCU, Fort Mill, S.C. Mary Torsney, senior vice president and CFO, Financial Partners CU, Downey, Calif., was appointed to replace Peg Lamb, former CFO for Marine CU, LaCrosse, Wis., on the committee. Also serving on the committee are Robert Warren Jr., senior vice president and CFO, Virginia CU, Richmond, Va., and Kevin Brueseke, chief operating officer and CFO, Missouri Credit Union Association, St. Louis.

League surprises gov. with Positively Michigan campaign

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LANSING, Mich. (5/20/11)--The Michigan Credit Union League (MCUL) surprised Gov. Rick Snyder last week with a video montage celebrating all that is good about Michigan, highlighting the theme of MCUL’s 2011 Annual Conference and Exposition, “Positively Michigan!”
Michigan Gov. Rick Snyder last week addressed the Michigan Credit Union League’s 2011 Annual Conference and Exposition, “Positively Michigan!” (Photo provided by the Michigan Credit Union League)
The MCUL and Michigan credit unions launched the “Positively Michigan!” campaign to promote all of the good things in Michigan. “I love that campaign because that’s what it’s about, being positive in Michigan,” Snyder said at the opening of the league’s conference. Some people in the governor’s office have started using the acronym RPA--for relentlessly positive attitude--to describe their mindset. In the video, MCUL CEO David Adams said “great ideas can come from anybody.” “Michigan residents are able to submit positive ideas for helping Michigan at this newly created website,” Adams said. To view the website and video, use the links. In other action at the convention:
* Stephen Dubner, co-author of “Super Freakonomics,” suggested how credit unions can overcome the frequent complaint that switching financial institutions is too difficult and time consuming. He suggested that credit unions offer a “switch kit” to people who are thinking about switching. * Debbie Matz, chair of the National Credit Union Administration, told attendees that while some have questioned the agency’s aggressive action, it was needed. “NCUA’s actions have saved you hundreds of millions of dollars in insurance premiums,” Matz said. She also called on credit unions to step up their efforts to market to Generation Y by offering into mobile banking, deposits by phone and 24-hour service. * John Kolhoff, new deputy commissioner in charge of credit unions for the Michigan Office of Insurance and Financial Regulation, said that he is cautiously optimistic about the future. “Improvement in Michigan outpaced the nation,” Kolhoff said. * Washington analyst Bert Ely discussed the debit interchange issue, adding the Durbin Amendment was poorly thought out and the Fed is now worried about unintended consequences of the new law. “The retailers will … try to steer business to the institutions that charge lower fees,” Ely said.

Filene Sustainability report from colloquium available

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MADISON, Wis. (5/20/11)--A Filene Research Institute report on credit union financial sustainability and listing six key factors for return on equity is now available. Controlling key variables is vital to staying on course, according to speakers at a Harvard University Colloquium on Credit Union Financial Sustainability, sponsored by the Filene Research Institute. The report is based on issues discussed at the colloquium held in October. The Colloquium featured presenters: Frances Frei, UPS Foundation professor of service management at Harvard Business School; John Lass, senior vice president at CUNA Mutual Group; Dorian Stone, partner at McKinsey & Co. and Filene research fellow; and Peter Tufano, Sylvan C. Coleman professor of financial management at Harvard Business School and Filene Research Fellow. In today’s financial turbulence caused by a combination of market and regulatory forces, the key to keeping credit unions thriving, the speakers said, is to understand and control the intricate interrelationships among six primary factors that feed into the overall return on equity equation:
* Interest rate spread; * Fee income; * Loan-loss provision; * Operating expense; * Asset turnover; and * Leverage factor.
The report points out that any company, including a credit union, can only grow in a way that keeps these factors in good correspondence. “A key takeaway is that you should at least understand that you cannot be great at everything and that relentlessly seeking out problems coincides with above-average rates of improvement,” said Mark Meyer, Filene CEO. Credit unions tend to operate less efficiently than banks of similar size, according to the report, which cites case studies illustrating how efficiency improvements contribute to the success of other organizations. “Credit unions should adapt the mindset that every dollar that they do not spend efficiently is a dollar that they may be taking out of their members’ pockets,” said George Hofheimer, Filene chief research officer. The colloquium was supported by Harvard University Employees CU, the Massachusetts and New Hampshire Credit Union Leagues, and the Credit Union Association of Rhode Island. For more information, use the link.

Kansas gets first certified CU fin counselors

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WICHITA, Kan. (5/20/11)--Two employees of Wichita, Kan.-based credit unions have become the only two credit union professionals in Kansas to earn the Certified Credit Union Financial Counselors (CCUFC) designation, announced the Kansas Credit Union Association (KCUA).
Sara Holt of Mid American CU and Chris Wolgamott of Meritrust CU recently completed training with the Credit Union National Association's Financial Counseling Certification Program (FiCEP). The program enhances credit unions' services with proven financial counseling skills, differentiates credit unions with certified financial counselors and helps members transform the way they handle money through real-world counseling. Participants learn everything from controlling living expenses and understanding consumer credit to retirement and special issues. "Having two credit union employees well versed in financial counseling is a great asset to credit union members in our state," said Gina Evans, assistant vice president, education and training at KCUA. "Financial literacy is such a hot topic right now and is relevant to all consumers." Holt said she wanted to ensure Mid American CU offered relevant topics to its membership and had the knowledge to answer questions from members. Wolgamott noted that Meritrust CU will "continue developing new ways to aid our members in becoming more financially savvy and building solid financial futures." His credit union plans to start counseling members this summer.

CU System brief (05/18/2011)

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* DURHAM, N.C. (5/19/11)--Alejandro Sanchez, an employee of Latino Community CU, Durham, N.C., is launching an organization to aid entrepreneurs in the Hispanic community with starting businesses. The program, Accion Emprendedora USA, is a non-governmental organization and not a program of the credit union (The Herald Sun May 18). Sanchez told the publication that many Hispanic entrepreneurs could not grow their businesses without more financial resources or training. The organization will provide training on how to get started, manage their business and access opportunities to grow in the Hispanic community …

Weidler winner of first CO-OPTHINK prize

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RANCHO CUCAMONGA, Calif. (5/19/11)--Matt Weidler. information technology asset coordinator of Evangelical Christian CU, Brea, Calif., is the winner of the first annual CO-OP THINK Prize and recipient of $10,000 for his idea for mobile phone ATM access. Three finalists in the new competition presented their ideas to attendees of THINK 11 in Anaheim, Calif., April 17. In addition to Weidler, finalists were:
* Shari Storm, senior vice president, chief marketing officer at Verity CU, Seattle, for her business plan for the Squirrel smartphone application; and * Candace Vogelsong, marketing specialist at Community Powered FCU of Newark, Del. Her business plan proposed an industry cooperative for social media so individual credit unions would not require dedicated staff.
The award was presented by CO-OP Financial Services and CO-OP THINK Prize sponsor MasterCard. Weidler's idea of cellular ATM access is at its core a customer convenience initiative allowing members to use ATMs through a second mechanism of their choice in case they forget their debit card or prefer not to carry it with them. His video presentation related the many times he has headed to the ATM and had to turn around because he didn't have his debit card with him. He asked why not be able to access the ATM via his mobile phone, which he always has with him. "One of the key criteria for the CO-OP THINK Prize was impact," said Caroline Lane, senior vice president, business development and marketing for CO-OP Financial Services. "His idea clearly resonated with the competition voters." Finalists were selected by judges from CO-OP Financial Services and the Filene Research Institute based on four standards: impact, creativity, aggregation (or application of the idea across the industry) and implementation (or the ability to be adopted quickly). Entries for the CO-OP THINK Prize for 2012 opened Wednesday. For more information, use the link.

Two factors contribute to Jersey CUs battle with banks

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HIGHTSTOWN, N.J. (5/19/11)--Two factors--credit unions' aggressive ad campaign and legislation seeking credit unions' participation in municipal deposits--are contributing to the attacks against credit unions by bankers in New Jersey through the media, said Paul Gentile, New Jersey Credit Union League president/CEO, after the latest volley of op-ed pieces. A letter to the editor from Gentile was published in the Trenton Times Tuesday and in Press of Atlantic City Wednesday--the latest of several letters the league has written to counter letters and op-eds from New Jersey Bankers Association CEO John McWeeney attacking credit unions' tax exempt-status. The banks "are responding to a very aggressive advertising campaign, New Jersey credit unions' Banking You Can Trust campaign," Gentile told News Now. "We're all over cable, radio, and newspapers, and New Jersey credit unions have received the most searches (to locate a credit union) on FindaCU.com the past three months. The campaign has very strong messaging, hitting bank fees and promoting credit unions as an alternative," he said. "Banks have gone to their association and said, "Credit unions are coming after us. What are you going to do about it?'" he added, noting that banks don't work cooperatively so their association has responded by writing letters in various media outlets in the state. The second factor--the municipal deposit legislation, which passed the state Senate overwhelmingly and is in an Assembly committee for negotiation--affects banks. Credit unions are seeking to participate in municipal deposits, which are controlled by the banks. "It's a $15 billion market and banks control it entirely, so we're aggressively pushing" to get the legislation through," Gentile said. The two factors "have put the banks on edge," Gentile said. He noted that banks also mention issues such as credit unions' member business lending and tax-exemption. "Credit unions have the high ground and shouldn't apologize for their tax exemption," Gentile noted, adding that credit unions return it to members in terms of better rates and lower fees while New Jersey banks made $860 million in profits in 2010. "We shouldn't feel sorry for banks. Credit unions have just 6% of the market." Other states might learn from what New Jersey is experiencing. "While it may look like we are playing 'defense' to these banker letter attacks, it's actually the opposite," he said. "Our 'Banking You Can Trust' consumer advertising campaign and our legislative push for credit unions to be able to participate in municipal deposits has spurred them to write these letters. "We welcome the public volley because credit unions have the public policy high ground. We are about helping consumers first, not shareholders. We only exist for the savings and lending needs of our member/owners. We have a powerful value proposition in these tough economic times and the bankers know it. We must keep relentlessly telling our good story. These public battles can only help to continue position credit unions as the good guys," Gentile said. To review the league's latest volleys in the credit union vs. bank debate in New Jersey, use the links.

National Saving Challenge passes 100M mark

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MADISON, Wis. (5/19/11)--The National Youth Saving Challenge, hosted by the Credit Union National Association (CUNA), attracted more than $28 million in deposits from children in April.
Kylee, a youth member with Cascade Community CU, Roseburg, Ore., was one of 10 randomly selected children who each received a $100 prize during the Credit Union National Association’s National Youth Saving Challenge last month. Joining Kylee is Member Services Supervisor Charla Bay. (Photo provided by Cascade Community CU)
With this year’s deposits, the National Youth Saving Challenge has surpassed the $100 million milestone, with $117, 628,671 in total deposits since the program’s inception in 2004. Held in conjunction with National Credit Union Youth Week, the saving challenge puts the spotlight on youth in a contest tracking deposits throughout the month of April. Participating credit unions use the challenge to motivate children, teenagers and their parents to start and maintain good money management practices by opening accounts and making deposits. With 305 credit unions reporting this year, deposits totaled $28,545,722. More than 146,000 kids made deposits during the month, with 9,058 new accounts opened. The average amount deposited per child was $196. By comparison, last year 384 credit unions reported $24,811,741 in total deposits. Roughly, 168,438 children made deposits, with 10,385 new accounts opened. The average amount deposited per child was $147. In 2011, National Credit Union Youth Week was April 17-23, with the theme “Money at my Credit Union Rocks.” Among the ways credit unions inspired their young members to save:
* SECU, Raleigh, N.C., offered prizes for its “Money Rocks” Savings challenge. Prizes included a Nintendo Wii, Nintendo DSi, iPod Touch and an iPod Nano. At SECU’s 237 branches, more than 700 new youth accounts were opened with deposits totaling $3.2 million. * OUR CU, Royal Oak, Mich., introduced its young members to the personal finance website FamilyMint and offered a savings raffle for deposits made during the week. Two members each won a $25 VISA gift card. * First Community CU, St. Louis, sponsored a contest in which members collected autographs from Louie the Loan Star. With four autographs, kids could enter a drawing to win four tickets to see Taylor Swift in concert. * Cascade Community CU, Roseburg, Ore., let its youth members rock out to Guitar Hero in its lobbies. Kids could also guess how much coin was in a piggy bank and take part in a coloring contest. * Community 1st CU, Ottumwa, Iowa, hosted an outdoor free concert by the local rock band “Compulsive Liars.”

Mergers announced by CUs in several states

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MADISON, Wis. (5/19/11)--Mergers continue to reshape the credit union industry. Among the mergers taking place:
* Texas Dow Employees CU, $1.6 billion in assets, Lake Jackson, Texas, and Bluebonnet CU, $80 million in assets, Houston, have agreed to merge. * American 1 FCU, $178 million in assets, Jackson, Mich., is merging with Premier Financial CU, $56 million in assets, Clinton Township, Mich. * TruStone Financial FCU, $664 million in assets, Plymouth, Minn., has agreed to merge with $6 million-asset Ukrainian CU, Minneapolis. * Cal State Central CU, $110 million in assets, Santa Rosa, Calif., will merge into $1.7 billion-asset Redwood CU, also of Santa Rosa (California Department of Financial Institutions Monthly Bulletin April 1). * Metro CU, $780 million in assets, Chelsea, Mass., has merged with University CU, $58 million-asset, Boston.

CUNA contributes to IBankrateI debit card advice

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MADISON, Wis. (5/19/11)--The Credit Union National Association (CUNA) contributed to a Bankrate.com story on advice about debit cards, which was subsequently picked up by Fox Business.com and Yahoo! Finance. In an article titled “8 secrets about your debit card,” Michelle Dosher, CUNA managing editor for consumer publications, contributed comments to two of the eight items (items four and six below). Bankrate listed eight things about a debit card that consumers may not know:
* It may have fraud and theft protection. However, some debit card issuers offer no liability protection against fraud and theft. To protect themselves, consumers need to ask specific questions such as: How do you have to use the card? What’s the timetable for reporting a loss due to an unauthorized transaction? * The card can help find lost receipts. Some issuers will offer a service to find receipts and e-mail them to users. * It may impose a daily spending limit. No matter how much is in a user’s account, the financial institution will cap debit spending once the limit is reached. * A card likes routine. If a user deviates from normal use patterns, the debit card may not work because institutions often will deactivate a card if they notice atypical use. However, with some issuers, users can let their credit union or bank know if they intend to use the card when they are out of town, and the issuer will put a “travel alert” on the account, CUNA’s Dosher told Bankrate. * Transactions may not be deducted in the order they are purchased. Some institutions deduct large purchases first, which can produce maximum fees if a customer overdraws an account. * The balance may be smaller than it appears. With signature-based purchases, money can take a few days before it exits an account, Dosher told Bankrate. To keep track of purchases, customers and members should look into online banking services offered by their credit union or bank, she added. * The card could tap a savings account. At many credit unions and banks, one option for low-cost overdraft protection is to link checking and savings accounts. However, if the two accounts are linked, anyone with the access to the debit card can empty both accounts. * Users might have another option. Many credit unions and banks offer ATM cards designed just to withdraw cash from ATMs. However, ATM cards can still be used to purchase gas or merchandise at some locations--any place that accepts a personal identification number.
To read the article, use the link.

SECU a finalist in Defense Employee Support Award

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RALEIGH, N.C. (5/19/11)--State Employees’ Credit Union (SECU) of Raleigh, N.C., is a finalist for the 2011 Secretary of Defense Employer Support Freedom Award.
State Employees’ CU, Raleigh, N.C., has been named a finalist for the 2011 Secretary of Defense Employer Support Freedom Award. SECU Benson Vice President Elizabeth Fair (standing) took care of the children of National Guard Reservist/Benson Financial Services Officer Cathy Baker during her deployment. (Photo provided by State Employees CU)
The Freedom Award is the Department of Defense’s highest recognition of employers for support of their employees serving in the National Guard and Reserve. SECU is one of 30 finalists selected from 4,049 nominations from Guard and Reserve service members or their families. The finalists were selected from a group of 148 semifinalists announced last month. The credit union was nominated by Jamie Applequist, SECU senior vice president and an Air Force reservist. Employers named as finalists for the Freedom Award stand out for the initiatives they put in place for Guard and Reserve employees and their families. Among the examples of support that Applequist cited in her nomination were differential pay and ongoing benefits support, an SECU co-worker who took care of a service member’s children for a month and other employees handling chores for a service member involved in a car accident. Also, SECU has been supportive of the North Carolina National Guard and other deployed state soldiers. The credit union provided 5,000 gift boxes during the past holiday season to soldiers serving abroad and participated in National Guard Yellow Ribbon and Welcome Home events. The SECU Foundation, funded solely by SECU members, also supports National Guard initiatives, including Operation Kids on Guard and educational scholarships. A national selection board of senior defense officials, business leaders and prior awardees will select 15 recipients for the 2011 Freedom Award. The Department of Defense is expected to announce the award recipients in early summer. The 2011 recipients will be honored in Washington, D.C., at the 16th annual Secretary of Defense Employer Support Freedom Award Ceremony Sept. 22.

CU to become first mutual bank in Australia

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BRISBANE, Australia (5/19/11)--Queensland Teachers' CU (QTCU), in Brisbane, Australia, has applied to become the first mutual bank in Australia, according to The Courier-Mail (May 18). The credit union, which has 70,000 members, applied to the Australian Prudential Regulation Authority (APRA) to change to QT Mutual Bank Ltd. It will need 70% of members to vote on the name change at a special general meeting in Brisbane June 21. CEO Mike Murphy told the publication that the opportunity to become a mutual bank was created by the federal government's "fifth pillar" reforms to develop a more competitive and sustainable banking system. The credit union is one of the few credit unions meeting APRA's guidelines to use the term "bank," he said. He said the current name was not resonating with or attracting new members and the credit union could access cheaper wholesale funding once it is rated as a bank.

Access to lower fees available at CUs In the media

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MADISON, Wis. (5/19/11)--Credit unions are providing access to lower fees for services, relative to large banks, according to some media sources. George Poitou, chief operating officer for SCE FCU, El Monte, Calif., said his $81 million-asset credit union attempts to keep fees low for members while maintaining a high level of service (sgvtribune.com May 16). However, pending legislation in Congress that would reduce debit interchange fees from their current average of 44 cents per transaction to 12 cents per transaction would hurt his credit union, Poitou told the publication. SCE would have lost money last year if interchange fees his credit union received from merchants were reduced by 70%. If the new interchange proposal goes into effect, SCE will either have to eliminate free checking or alter its interest rates on loans and deposits, he added. Credit unions often help people who are unable to obtain loans elsewhere, Poitou told sgvtribune.com. And credit unions operate--in contrast to banks--by modifying loans right from the start. Without that type of help, many more people would have lost their homes by now, he added. The California Credit Union League is monitoring the proposed legislation as it approaches the extended July 21 deadline, Jeremy Empol, league director of federal government grass roots advocacy, told sgvtribune.com. In a related matter, money.blogs.time.com Tuesday said the best terms on financial accounts and loans most often are available at credit unions and small banks. Credit unions also regularly drub banks in customer satisfaction surveys, the publication said. 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. It is asking Congress to stop and study the impact of the proposal.

PCUA presents Keystone other awards

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HARRISBURG, Pa. (5/19/11)--The Pennsylvania Credit Union Association (PCUA) presented its awards during its 77th Annual Convention May 11-13 in Hershey. Hundreds of credit union and supporters statewide attended the convention, which featured a keynote address by newly confirmed Pennsylvania Secretary of Banking, Glenn Moyer. PCUA’s board of directors awarded the Keystone Award to Michael Kaczenski, Aston-based Sun East FCU President/CEO. A native of Ohio, Kaczenski has been active in the credit union movement for nearly 25 years and has served as president/CEO of Sun East FCU since 2001. The Keystone Award was first presented in 2000 to honor an individual or organization that epitomizes the credit union philosophy. PCUA Chairman Ray Brunner cited Kaczenski’s leadership in developing the iBelong statewide credit union awareness campaign. The iBelong campaign, launched in 2007, features TV and radio commercials promoting credit unions as safe and consumer-friendly financial institutions for Pennsylvanians. Kaczenski has served on the association’s board since 2004 and is active in the Delaware Chapter of Credit Unions. PCUA also announced the 2011 Credit Union Youth Ambassador of Pennsylvania, Whitney Thompson, 25, representing the Philadelphia Chapter of Credit Unions and employed as a member service officer at the Philadelphia Stock Exchange branch of American Heritage FCU. As youth ambassador, Thompson will promote credit union youth activities and serve as a representative of PCUA during events and meetings. Also, Joshua Madore, 25, of Bethel Park, representing Riverset CU, Pittsburgh, and the Pittsburgh Chapter of Credit Unions was named first alternate; and Mike Williams, 21, of Erie, representing Erie General Electric FCU and the Erie Chapter of Credit Unions was named second alternate. A number of awards were presented to credit unions for of their community work. The Desjardins Youth Financial Education first-place awards were given to:
* Keystone FCU, Downingtown, $50 million to $150 million in assets; * Service 1st FCU, Danville, $150 million to $500 million; and * TruMark Financial CU, Trevose, more than $500 million.
The Louise Herring Award for Philosophy in Action first-place award was presented to SPE FCU, State College, with less than $50 million to $250 million in assets. The Dora Maxwell first-place awards for social responsibility were presented to:
* Timberland FCU, DuBois, $20 million to $50 million in assets; * Meadville (Pa.) Area FCU, $50 million to $100 million; * Cross Valley FCU, Wilkes-Barre, $100 million to $200 million; * Belco Community CU, Harrisburg, $200 million to $500 million; and * American Heritage FCU, Philadelphia, more than $500 million.
PCUA presented marketing awards to credit unions for their work in creating annual reports, newsletters and websites. The Credit Union Annual Report Contest first-place award winners:
* Wyse FCU, Baden, less than $20 million in assets; * HealthCare First CU, Johnstown, $20 million to $100 million; * TruMark Financial CU, more than $100 million.
Credit Union Newsletter first-place award winners:
* North Penn FCU, Colmar, less than $20 million in assets; * CTCE FCU, Reading, $20 million to $100 million; * Riverset CU, Pittsburgh, more than $100 million;
Credit Union Website first-place awards were given to:
* Keystone United Methodist FCU, Cranberry Township, less than $20 million; * Hershey (Pa.) FCU, $20 million to $100 million; * Discovery FCU, Reading, more than $100 million.

Wis. league Out-of-state group behind CU conversion bill

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PEWAUKEE, Wis. (5/19/11)--State legislation to make it easier to convert Wisconsin credit union charters to bank charters is being supported by an out-of-state group dedicated to eliminating competition for for-profit banks, said the Wisconsin Credit Union League. The proposal appears as a budget amendment and the league has called on Gov. Scott Walker to veto the proposal when the budget bill hits his desk (News Now May 16). In a press release on WisPolitics.com (May 17), the league noted that "one way to tell a piece of proposed legislation is suspect is when it's introduced at the last minute, under cover of darkness, and without notice to any of the people who will be affected by it." The legislation is supported by the Coalition for Credit Union Charter Options (CCUCO). "The group's claim that it's somehow better for Wisconsin credit unions to have faster, easier path to becoming a bank is irresponsible and misleading," said Brett Thompson, league president/CEO. "This effort to eliminate credit unions under the guise of greater operational flexibility is being driven by the banking industry, which has been trying for decades to legislate, regulate and litigate credit unions out of business," Thompson added. "Especially disingenuous is the group's claim that if a credit union becomes a bank it could make more loans, accept more deposits, and open more branches," he noted. "Never in history have banks been in favor of credit unions making more loans, accepting more deposits and opening more branches. In fact, they've sued credit unions and lobbied Congress and the state legislature to keep them from doing just that," he said. "This legislation has nothing to do with serving the public. It's about just the opposite--quelling competition so banks can make even more money." The group's statement that credit unions that convert would help the state by paying more in taxes is "equally misleading," Thompson said. "The annual member benefits that credit unions deliver to Wisconsin citizens outweigh the potential tax revenue," he emphasized. Last year, credit unions returned nearly $203 million to members in the state in the form of better rates and fewer and lower fees than banks. "This legislation is really about bankers looking for a way to make even bigger bank profits," Thompson said. "Public policy should protect credit union members' right to determine the future of the financial institutions they own. Passing legislation--secretly, without public notice, debate or hearing--that makes it easier to turn the equity of Wisconsin's 2.2 million credit union members into additional riches for a few bank shareholders cannot in any way be considered in the public interest," Thompson said.

CU System briefs (05/17/2011)

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* POUGHKEEPSIE, N.Y. (5/18/11)--A former marketing director at Poughkeepsie, N.Y.-based Hudson Valley Community CU pleaded guilty to grand larceny in the theft of $400,000 from the branch he worked for in Corinth. Jason LaPierre, 35, of Hudson Falls, who also was a minister at a church there, will be sentenced July 11 for the theft, which occurred over a four-year period. State police said he duplicated some checks and deposited the money into his own accounts. The theft was discovered in December. He faces three to nine years in prison and an order for restitution of the funds (The Daily Gazette May 17) … * GRESHAM, Ore. (5/18/11)--A woman robbed the Gresham, Ore., branch of Beaverton-based Rivermark Community CU late Monday morning after threatening to detonate what turned out to be a fake bomb. Police said the woman handed a teller a note demanding money and pulled the fake bomb out of her pocket. The device was black, cylinder shaped and had wires sticking out of it. The woman demanded large bills and fled with the cash in a sport utility vehicle driven by a man. The Portland bomb squad used a specialized robot to analyze the device and determined it was a fake (nwcn.com May 16) … * MADISON, Wis. (5/18/11)--UW CU, based in Madison, Wis., has been named a 2011 Mpower ChaMpion and a 2011 EPA Green Power Partner. The Mpower ChaMpion program is a free, voluntary carbon reduction program for Madison area businesses. The credit union was one of 18 businesses chosen for the program sponsored by U.S. EPA, City of Madison, Madison Gas & Electric, Campos Comprehensive Engineering and Focus on Energy. It will commit to sustainability initiatives and receive tools and support to complete them. The $1 billion asset credit union also was selected as an EPA Green Power Partner because 57.2% of the electricity for its branch network is generated from renewable resources such as wind power. UW CU is the first credit union in the nation to receive the designation, as well as the first financial institution in Wisconsin, and the 50th company in the state to become a Green Power Partner …

Cheney outlines CU issues at Wisconsin league meeting

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PEWAUKEE, Wis. (5/18/11)--Some of the top issues of concern to credit unions are truly consumer issues and top concerns of 2.2 million Wisconsin citizens who are the member-owners of the
Credit Union National Association President/CEO Bill Cheney tells the Wisconsin Credit Union League annual meeting this week that credit unions' top issues are truly consumer issues. (Photo provided by the Wisconsin Credit Union League)
financial co-ops. That was the message shared by Bill Cheney, president/CEO of the Credit Union National Association (CUNA), with credit unions at the Wisconsin Credit Union League's 77th Annual Meeting & Convention in the Wisconsin Dells. Cheney cited the strength and stability of credit unions nationally--with strong net worth, solid earnings and strong asset quality--as well was their more recognizable profile on Capitol Hill. During a CUNA conference, he said, House Speaker John Boehner praised credit unions and thanked them for not turning their backs on their members during challenging economic times. CUNA presses constantly to know where all 535 members of Congress stand on issues that concern credit unions and be responsive to them, he said. Among the top concerns he discussed were:
* Interchange legislation: The Federal Reserve's proposed rule on debit card interchange fees--set to go into effect July 21--would disadvantage consumers because its current exemption for smaller card issuers won't work as intended. Credit union members who can least afford increased costs would shoulder the effect of the rule, Cheney said, noting that the Dodd-Frank reforms passed last year did not allow the Fed to consider all the costs of providing a card program. However, Cheney added the Fed received more than 11,000 comment letters--about half of them from credit unions--on the issue and that CUNA is working diligently on regulatory, legislative and legal fronts to delay the rule’s implementation. He encouraged activists to use league resources and CUNA’s Grassroots Action Center to urge Wisconsin’s U.S. senators for a delay in the rule, further study and do-over. * Member business lending (MBL). The proposed MBL bill by Sen. Mark Udall (D-Colo.) and Rep. Ed Royce (R-Calif.) to increase the MBL lending cap is “a win on the public policy argument,” Cheney said. The measure, supported by the Treasury Secretary and Obama administration, would add $13 billion of new credit and create 140,000 jobs in the first year alone at no cost to taxpayers. Already, including Udall and Royce, it has 19 co-sponsors in the U.S. Senate and 26 in the House, and support is bipartisan. “The MBL legislation is important to all credit unions because of how important it is to the whole economy,” Cheney emphasized. Credit union business loans nationally have a charge off rate of 0.66% for 2010, compared with banks’ rate that is nearly three times higher at 1.75%. “Long before there was a Federal Credit Union Act, credit unions made business loans for provident purposes,” he said, adding that a banker once admitted to him that credit unions making business loans helps his bank because everyone benefits when entire economies are more prosperous. Passing the MBL legislation is still a top priority for the movement, he said. * Credit union taxation. While no one on Capitol Hill has suggested increasing taxes on credit unions, Cheney emphasized that the movement should be vigilant because Congress is looking to broaden the U.S. tax base to lower tax rates for everyone. A tax on credit unions is a tax on members, not a corporation, he said, urging credit unions to continue sharing stories of how they help working people and communities. The most revenue that could be raised by new taxes on credit unions--around $1 billion--pales in comparison to the $14 billion in annual savings from better rates and lower fees that credit unions accrue for their members, he said, adding that preserving credit unions’ tax status is policy that is pro-consumer. * Supplemental capital. Credit unions must have access to new forms of capital so they don’t have to pass costs on to members and can avoid needing to shun member deposits, Cheney stressed. He noted comments of National Credit Union Administration (NCUA) Board Chair Debbie Matz in support of supplemental capital and distinguished between new streams of capital and “ownership capital,” which credit unions would not be willing to forego. * Regulation & exams. Credit unions’ increasing regulatory burden is not a sustainable path forward, Cheney said, adding that CUNA would continue to challenge the NCUA budget as a continuing drain on member resources. He pointed to the Credit Union Bill of Rights intended as a guide credit unions can point to when interacting with NCUA examiners, as well as a website for sharing concerns about exam practices.
To access those, use the links.

New CUs for Kids website now live

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SCOTTSDALE, Ariz. (5/18/11)--A new Credit Unions for Kids website went live Monday. Credit Unions for Kids is a nonprofit collaboration of credit unions, chapters, leagues/associations, and business partners nationwide engaged in fundraising activities to benefit 170 Children’s Miracle Network (CMN) Hospitals. The website allows credit union supporters to:
* Meet their state’s Champion patient; * Share their personal miracle story; * Learn about Credit Unions for Kids national campaigns; * Download fundraising ideas and materials; * Discover best practices; * Find their local CMN Hospital; and * Reveal their Credit Unions for Kids success stories.
“The new website will be a critical component in our effort to drive both awareness and fundraising,” Joe Dearborn, senior director of Credit Unions for Kids, told News Now. “The site really has something for every credit union that’s interested in fundraising for their local Children’s Miracle Network Hospital. “A very special shout out and thank you to Fabian Geyrhalter and Sara Hoerner at Geyrhalter & Company for a fantastic job with the design and rebuild,” Dearborn added. “Without the very generous support from the team at Geyrhalter this project would not have been possible. In addition, a sincere thanks to Felicity Guerin [in the Washington, D.C., office of the Credit Union National Association] for all her efforts.” To see the website, use the link.

St. Paul Croatian depositors sue NCUA

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CLEVELAND (5/18/11)--Two former members of St. Paul Croatian FCU, the now defunct Eastlake, Ohio, credit union, are suing the National Credit Union Administration (NCUA) in federal court, alleging NCUA erred in calculating their accounts and that the deposit insurance money paid to them was inadequate. Plaintiffs Steve and Marija Skertic owned several joint accounts at the credit union and are petitioning the U.S. District Court for the Northern District of Ohio, Cleveland, for additional payment of $164,000 from NCUA. NCUA had to liquidate St. Paul Croatian in April 2010 because of fraud. The failure cost the National Credit Union Share Insurance Fund $170 million. A grand jury already has indicted 16 people on charges related to fraud at the credit union (News Now March 4 and May 17). According to court documents, the balance of the Skertics’ joint account with St. Paul Croation on the liquidation’s date of April 30, 2010, was $718,330. NCUA determined that only $553,844 of the Skertics’ joint accounts was insured, and paid that amount to them on June 24, 2010. The balance of $164,486 was deemed uninsured and was not returned, the complaint said. On March 17, NCUA denied the Skertics’ appeal regarding the deposit payment, upholding the liquidating agent’s decision. Under NCUA rules governing share insurance, the Skertics could have simply moved money from some of their accounts to other accounts to be fully insured. However, NCUA and St. Paul Croatian FCU told the Skertics their accounts were fully insured, the complaint said. They claim NCUA’s action violates Section 745 of its rules regarding notice of insurance coverage of member accounts and that it violated the fifth and fourteenth amendments of the U.S. Constitution regarding deprivation of property without due process.

PCUA PCUF boards elect officers

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HARRISBURG, Pa. (5/18/11)--The Pennsylvania Credit Union
Association (PCUA) and the Pennsylvania Credit Union Foundation (PCUF) have elected new board officers, according to PCUA (Life is a Highway May 17). Mike Kaczenski, CEO of Sun East FCU, Aston, has been elected chairman of PCUA's board, succeeding Ray Brunner, CEO of WEST AIRCOMM FCU, Beaver. Brunner's term ended Friday at the conclusion of PCUA's 77th Annual Convention. Kaczenski has served on the board since 2004 and was vice chairman the past two years. Maria LaVelle, CEO of Westmoreland Community FCU, Greensburg, was elected vice chairman of the PCUA Board. LaVelle has served on the board since 2009. She also is a member of the foundation's board. Brunner will become the foundation's chairman for a two-year term, succeeding Diana Roberts, Hershey (Pa.) FCU. Kaczenski will serve as an ex officio member of the PCUF board, along with Roberts, who replaces foundation chairman Norb Kaczmarek on the board. Also, Carol Fastrich-Aranos of AmeriChoice FCU, Mechanicsburg, was named to the PCUF board to fill a seat vacated by Margie Coan of Transit Workers FCU, Philadelphia.

ACUCs Hispanic Outreach events begin May 24

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MADISON, Wis. (5/18/11)--The Credit Union National Association (CUNA) and Coopera Consulting, a credit union Hispanic outreach consulting firm, Monday announced two Hispanic outreach events will be held in conjunction with CUNA’s America’s Credit Union Conference & Expo (ACUC), June 19-22 in San Antonio. CUNA and Coopera will host a free pre-conference webinar May 24 on Latino Membership Growth. The event is for credit unions seeking to learn more about how to grow Latino membership by exploring trends, tools and best practices. The interactive webinar will include a presentation and Q&A with the presenters, Miriam De Dios, vice president of Coopera, and Warren Morrow, CEO and founder of Coopera Consulting. Coopera and CUNA also will host a half-day Latino Membership Growth Forum June 19 at CUNA’s ACUC. The session will provide hands-on opportunities to work with tools that help grow and serve Hispanic membership. Each participant will receive a free assessment of the financial opportunity and membership growth potential for reaching Hispanics within their credit union’s market. Participants also will learn about the Texas Credit Union League’s Juntos Avanzamos initiative--an outreach initiative TCUL created to empower Texas credit unions to more effectively meet the needs of their Hispanic community--and about the Network of Latino Credit Unions and Professionals--an organization dedicated to increasing the representation and participation of Latinos in the credit union movement. The 2010 Census reported that more than half of the growth in the total U.S. population between 2000 and 2010 was due to an increase in the Hispanic population. “Credit unions that offer products and services tailored to Hispanic markets are well-positioned to capture a loyal and growing member base,” said Laida Garcia, chair of CUNA’s Hispanic Outreach Committee. “These events and the overall program at ACUC will help prepare credit union leaders to capture the opportunity.” For more information, use the links.

2011 year of system intrusion says CUNA Mutual fraud expert

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MADISON, Wis. (5/18/11)--Last week’s debit breach at retailer Michael Stores Inc., where at least 90 payment terminals in 20 states were tampered with, came as no surprise to Ann Davidson, senior consultant in risk management for CUNA Mutual Group, and others in the card security business. Davidson called 2011 “the year of the system intrusion,” with card associations such as Visa and MasterCard reporting two or three breaches every day. The uptick in fraud is one of the downsides of the today’s wired world, Davidson said. “As everything is moving to electronic, criminals are getting more sophisticated too,” Davidson told News Nows. “They’re relentless. They continue to search until they find the weakest link. At the end of the day, they want to find the easiest way to put cash in their pockets.” And there are many “links” in the card processing chain that provide potential points for entry for fraudsters. In addition to the credit union’s card system, criminals can tap into merchant encryption, third-party processors and point-of sale software. With such sophisticated attacks, Davidson said it is critical that a credit union has in place a fraud management system that automates the process of fraud detection, raising alerts based on pre-defined rules and proactively analyzing transaction data. Davidson likened a fraud management system to a home smoke detector. “If something’s smoking, the alert goes off,” she said. But just as important, she adds, someone has to be home to extinguish the flames. “It’s great to have it in place, but somebody has to be in place to react 24 hours a day, seven days a week, 365 days a year,” she said. Once fraudulent activity is detected, Davidson advised credit unions to contact their service provider, processors and card associations. “Communication is key,” she said. As proof she pointed to the detection of the Heartland Payment Systems breach in 2009. “Credit unions were critical to uncovering that breach,” Davidson said. “They got on the horn with their card associations. They sent out communications to everyone involved that they were noticing an increase in card fraud.” Communication is vital because if multiple financial institutions or merchants are involved, processors and associations are equipped to put the pieces to together to detect a global breach. “It’s a team effort,” Davidson said. “There’s no silver bullet in the world of card exposures.”

Illinois CU activists unlock the vault at state Capitol

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NAPERVILLE, Ill. (5/18/11)--Nearly 120 credit union leaders attended the Illinois Credit Union League’s (ICUL) recent Legislative Day.
Click to view larger image Attendees of the Illinois Credit Union League’s recent Legislative Day in Springfield were offered an impromptu tour of the state’s vault. (Photo provided by Illinois Credit Union League)
Illinois State Treasurer Dan Rutherford, a strong credit union supporter, delivered the keynote address, and offered the ICUL delegation an impromptu tour of the state’s vault. The vault, located two stories beneath the Capitol, no longer stores cash, but is used for storing valuables from unclaimed property. Brent Adams, secretary of the Illinois Department of Financial and Professional Regulation, and Michael Fryzel, National Credit Union Administration board member, provided attendees with an overview of the regulatory environment from both state and national perspectives. State Rep. Joe Lyons (D-Chicago) and State Sen. David Koehler (D-Pekin) also addressed the delegation, with most of their remarks focusing on the state’s fiscal challenges. Prior to Hill visits with their state legislators, participants were briefed by ICUL staff members. Steve Olson, executive vice president, general counsel and chief operating officer, and Keith Sias, vice president of state governmental affairs, provided an overview of key legislative initiatives and the current legislative environment in Illinois. Nearly 6,000 bills have been filed during the spring session of the Illinois General Assembly. The ICUL is monitoring 250 bills with a potential impact on credit unions. Of those, about 25 remain in process. As expected, several bills that would negatively impact lenders in the areas of mortgage foreclosures and collections have been introduced. ICUL has worked to defeat these bills in committees. Bills of interest to credit unions include:
* H.B. 3050, an initiative to keep components resulting from Executive Order 2004-6 negotiated as part of an agency consolidation in 2004, including maintaining an independent department of financial institutions with its own director. The league is neutral on this bill as a result of a civil penalties assessments provision proposed by the Illinois Department of Financial and Professional Regulation. The bill has unanimously passed both chambers and is being forwarded to Illinois Gov. Patrick Quinn. * H.B. 2101, which clarifies the existing authority of counties to invest funds with credit unions and provides clarification within the counties code for procedures for such investments. The league supports this bill, which passed the House on April 5 and is on a third reading in the Senate.
More than 50 bills relating to the mortgage foreclosure crisis were filed during the spring session. ICUL said it has been actively involved in efforts to provide meaningful relief to Illinois homeowners impacted by the foreclosure crisis without burdening the financial services industry. The league’s approach is to attempt to fine-tune the mortgage foreclosure process, rather than penalize lenders--and, ultimately borrowers--through increased fines and penalties. Three competing bills are moving through the legislature to address foreclosures in different ways. Of the three, ICUL opposes two, because they would impose new fees, assessments and restrictions on lenders with little relief for homeowners. ICUL’s Legislative Day concluded with a reception, where more than 160 were in attendance, including credit union officials and 30 members of the Illinois General Assembly and other dignitaries. The Illinois General Assembly is scheduled to adjourn May 31.

CUs good press on fees picked up by IUSA TodayI Detroit paper

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DETROIT, Mich., and NEW YORK (5/17/11)--The good press credit unions have received for their role in helping consumers avoid fees--while banks make it harder to avoid them--was reported in Friday's Detroit Free Press and picked up by USA Today's website. The story, by Detroit Free Press business writer Katherine Yung, discussed the trend amongst banks such as Bank of America and Chase Bank to be creative in raising their fees on checking accounts. One Chase customer, Jennifer Amilivia, when hit with a $12 a month checking account fee because she needed a single monthly direct deposit of at least $500--pulled her account, noting she "shouldn't have to pay to use your bank," said the article. She joined Dearborn, Mich.-based DFCU Financial, where she isn't required to pay such fees. The situation, said the article is "likely to drive more consumers to community banks and nonprofit credit unions." It cited Michigan credit unions' growth as an example and quoted Michigan Credit Union League statistics on the growth of members. The state's credit unions gained more than 2,600 members in first quarter, in addition to the 96,000 new members gained the past two years. According to Michigan league President/CEO David Adams, the story in the Free Press drew hundreds of consumer comments, "predominantly, incredibly supportive of credit unions." The original article was facilitated by an earlier story that reacted to credit union membership growth in Michigan, prompted by the league's call report news release, he said. To view the article and the comments in either the Free Press or USA Today's website, use the links.

Police shoot CU robbery suspect during chase

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DES MOINES, Iowa (5/17/11)--A credit union robbery suspect accused of leading police on a car chase, carjacking a van, and ramming a police cruiser and other cars with the stolen van is in stable condition at a Des Moines, Iowa, medical center after he was shot by police Friday afternoon during the chase. Robin Terry Brooks, 27, faces charges of attempted murder, first-degree theft and second-degree robbery (The Des Moines Register (May 14). The incident began after noon when a man walked into Tradesmen Community CU, told a clerk he had a gun and demanded money. A credit union employee triggered a silent alarm. The robber fled in a white sedan. Police gave chase onto a nearby interstate highway and Brooks allegedly ditched the car and fled on foot. About a block away, he dragged a woman from her van and drove away. The woman was not injured, and police recovered a handgun at the scene of the carjacking. Witnesses and police said Brooks allegedly rammed a police cruiser and another car. Four police officers fired on the van and the injured Brooks was captured. Brooks did not fire his gun, said a police spokesperson. Officers involved in the shooting are on administrative leave pending an internal investigation--standard practice when police weapons are fired.

Two Sioux Falls CUs to merge

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SIOUX Falls, S.D. (5/17/11)--Two credit unions based in Sioux Falls, S.D., have announced they are merging to create a new credit union. The merger is between the $33 million asset Bell FCU, which serves 5,046 members, and the $28.8 million asset Midwest Partners FCU, with 4,704 members. Both serve Lincoln/Minnehaha Counties and have offices on the same cul de sac. Midwest Partners FCU's members voted May 11 in favor of the merger, with 94% of votes cast approving the proposal. "Unlike some mergers, ours was one of choice and not of financial need," said the credit union on its website. "Midwest Partners FCU and Bell FCU are both well capitalized and positioned for the future." The combined organization will assume a new name, and both boards of directors will combine into a seven-member board. Midwest Partners FCU President Jeff Schmidt will assume the role of chief operating officer. Bell FCU CEO Darla Erb will remain CEO of the merged credit union, according to a member letter on Midwest Partners FCU's website. The merger will provide more branches and more services, the credit unions said. Members will experience business as usual for the next several months until the transition is complete. Information about branch usage, the new credit union's name, and data processor conversions will be available later, the website said. With more than $60 million in combined assets, the newly combined credit union will be the fourth largest in the Lincoln/Minnehaha County area in asset size.

Seven more charged in St. Paul Croatian FCU collapse

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CLEVELAND, Ohio (5/17/11)--Seven more people were charged last week with fraud that led to a $170 million loss for--and the eventual collapse of--Eastlake, Ohio-based St. Paul Croatian FCU. The indictments bring the number of people charged for fraud related to the credit union's liquidation to 16. Arben Alia, 34, of Eastlake, was charged with 11 counts of bank fraud, one count of bank bribery and five of money laundering for allegedly obtaining $4.5 million in loans from the credit union with assistance from the credit union's chief operating officer at the time, Anthony Raguz (US Fed News May 13). Raguz, 51, of Mentor, Ohio, is one of nine people indicted in March and accused of bank fraud for their roles in the credit union's collapse (News Now March 4). Alia's loans allegedly were made from 2006 through 2009 and funded gambling excursions and renovations to a bar and grill. The indictment also charged Alia with giving about $100,000 to Raguz in exchange for approving and facilitating the fraudulent loans for Alia, his friends and relatives. Charged last week with assisting Alia were:
* Ilir Marku, 34, Willowick, Ohio, three counts bank fraud and two counts money laundering; * Vaso Shani, 36, Eastlake, one count of bank fraud and two counts of money laundering; * Alban Sulkaj, 35, Clinton Township, Mich., one count each of bank fraud and money laundering; * Zoge Ahmetaj, 68, Eastlake, one count bank fraud, two counts money laundering; and * Qerim Ahmetaj, 74, Eastlake, one count each of bank fraud and money laundering.
In a related case last week, a seventh person--Skender Demiri, 36, North Ridgeville, Ohio--was charged with one count of financial institution fraud, one count of bribery in connection with the business dealings of a financial institution and one count of money laundering. The indictment said that from June 24, 2004, through March 2, 2010, Demiri, aided by Raguz, obtained several loans totaling $1.6 million from the credit union by making false representations and saying the loans were to start a business. The credit union lost the full $1.6 million on the deals. Demiri was also charged with providing $50,000 in checks and cash to Raguz for approving and facilitating the loan approvals, and with three counts of money laundering, including a September 2009 wire transfer to a bank account in Germany. In addition to Raguz, others charged in March include: Koljo Nikolovski, 48, Eastlake; Rose Ann Nikolovski, 48, Eastlake; Marko Nikoli, 33, Eastlake; John Cendol Jr., 48, Kirtland; Ruth Cendol, 55 of Kirtland; Daniel Kocher, 72, of Euclid; Edward Watral, 37, Creston; and Jennifer Cerjan, 33, Orrville (News Now March 4). The credit union was placed into conservatorship by the National Credit Union Administration (NCUA) April 23, 2010 and shuttered May 1, 2010. At the time of its closing it held $238.8 million in funds from 5,400 members. NCUA's Office of the Inspector General reported last year that fraudulent loans pushed the credit union into liquidation.

Georgia CU Affiliates honors pro of the year

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DULUTH, Ga. (5/17/11)--Cassandra Brown of Credit Union of Atlanta has been named the Georgia Credit Union Affiliates’ Professional of the Year.
Cassandra Brown, assistant vice president of marketing and business development at Credit Union of Atlanta, was awarded the Professional of the Year Award at the Georgia Credit Union Affiliate’s (GCUA) annual meeting. From left, Mike Mercer, president/CEO, GCUA; Bill Cheney, president/CEO of the Credit Union National Association; and Brown. (Photo provided by Georgia Credit Union Affiliates).
Brown, assistant vice president of marketing and business development at the credit union, is the first African-American female to receive this honor from Georgia Credit Union Affiliates. The award is given to individuals who have made significant contributions to their credit union, chapter and the credit union industry in Georgia and the nation. It highlights individuals nominated by their peers as examples of the dedication and professionalism that help credit unions succeed. Brown began her credit union career more than 15 years ago working in the areas of regulation, operations, consulting and marketing. In her three years with Credit Union of Atlanta, Brown has led the organization through the process of redefining its field of membership. These efforts resulted in a 5% increase in membership. She also spearheaded the implementation of a rebranding campaign that included a name change, logo update and a new Web site. In 2009, she received the credit union development educator designation.

CU Direct elects officers recognizes CU achievements

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NEWPORT BEACH, Calif. (5/17/11)--CU Direct Corporation, a credit union service organization (CUSO) that provides lending solutions, last week announced the results of its board of directors elections and the winners of its 2011 Best Practices Awards. Joe Brancucci, president/CEO of GTE FCU, Tampa, Fla., was elected the new chairman of CU Direct. Two board members of CU Direct’s nine-member board were up for re-election. Both board members, Jeff March, president, Citadel FCU, Exton, Pa., and Barry Jolette, president/CEO, San Mateo (Calif.) CU, were re-elected to three-year terms. The board also elected board member John Lund, executive vice president, America First CU, Riverdale, Utah, as vice chairman of the board and March as the board’s secretary and treasurer. The CU Direct 2011 Best Practices Awards were presented last week during the CUSO’s inaugural Lending Redefined Conference . In the business development and dealer relations category, San Antonio CU, San Antonio and Hermantown (Minn.) FCU, were awarded the CU Direct Best Practice Award. In the marketing to members category, Point Breeze CU, Hunt Valley, Md. and Erie (Pa.) FCU were recognized. Vantage West CU, Tucson, Ariz. was recognized for collections. Service CU, Portsmouth, N.H. was honored in both the risk management and collections categories.

Volunteer Corporate W.Va. Corporate plan merger

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NASHVILLE, Tenn., and PARKERSBURG, W.Va. (5/17/11)--The boards of directors of Volunteer Corporate CU (VolCorp) and West Virginia Corporate FCU (WVCFCU) Monday announced their intent to enter into a merger agreement. The agreement calls for Nashville, Tenn.-based VolCorp to be the survivor, with the name and primary office location being maintained. Following regulatory and member approval, the corporates intend to merge operations for the benefit of the current members of both institutions. The plan also provides for a continued presence in West Virginia by maintaining operations and staff at WVCFCU’s current base in Parkersburg, W.Va. “After months of review of multiple proposals and due diligence, our board has determined that this decision to merge with VolCorp will provide the best future opportunity for our members and will bring excellent value,” said Tom Brewer, WVCFCU’s board chairman. "The combined institution will provide a greatly increased number of enhanced service offerings to the West Virginia credit unions,” he added. Hank Flury, VolCorp’s board chairman, said he believes the merger “will create synergies that result in a win-win for all members. Together, we will move forward, creating a stronger VolCorp to further meet the changing needs of our member credit unions.” Creation of a merger timeline is under way.

PCUA presents lifetime achievement awards

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HARRISBURG, Pa. (5/17/11)--The Pennsylvania Credit Union Association (PCUA) 2011 Annual Convention ended last week with a banquet honoring its lifetime achievement winners. Fran Muto, CEO of People First FCU, Allentown, received the 2011 William W. Pratt Professional of the Year Award. Muto recently announced his retirement from the credit union after 36 years (Life is a Highway May 16). Jim Stere, director of Wheatland FCU, Lancaster, was presented the 2011 Joseph A. Moore Volunteer of the Year Award. PCUA’s 2012 convention is scheduled for May 20-22 at the Wyndham Grand Pittsburgh Downtown.

N.J. league staves off bankers in publishing battle

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HIGHTSTOWN, N.J. (5/17/11)--The New Jersey Credit Union League has once again set the record straight in response to two letters to separate editors from the New Jersey Bankers Association. In letters to the Courier News (May 6), the Home News Tribune (May 9), and The Times of Trenton (May 13) New Jersey banks claimed that credit unions have “overstepped their mission” and should pay taxes because they “act like banks.” New Jersey Credit Union League President Paul Gentile responded with letters of his own explaining how credit unions:
* Are financial cooperatives with volunteer boards of directors; * Fulfill the basis of their tax exemption with better rates and lower fees than banks; * Have not cost taxpayers any money, unlike banks using Troubled Asset Relief Program funds during the financial crisis; and * Saw lending increase by 7.6% from December 2007 to September 2010 while it decreased by 6.5% at banks.
Gentile also noted credit union efforts to extend the business lending cap will help the U.S. economy and New Jersey credit union efforts to pursue legislation allowing them to accept municipal deposits--currently a monopoly held by state banks. “It’s important to respond to these baseless claims by bankers about credit unions expanding beyond their mission,” Gentile told News Now. “These claims about ‘mission” have been mispresented by bankers for years. We exist to serve our members with the best loan and saving products.” Gentile’s letters appeared in the May 16 editions of the Courier News and the Home News Tribune. Another letter was scheduled to appear in the Trenton Times today. This is the second round of attack on credit unions from New Jersey bankers in the last two months A March 6 article in the Bergen Record, titled "Credit union cutbacks," hinted that credit unions are slipping in satisfaction and some are starting to charge fees. Gentile defended credit unions' safety and soundness and reiterated customer/member satisfaction reports showing consumers are confident in doing business with credit unions in a letter that appeared in the the Bergen Record March 31. An editorial later in March by New Jersey Bankers President John McWeeney to njbiz.com claimed banks and credit unions don’t compete on equal footing. Gentile volleyed back with a letter to the editor published April 4 noting credit union structural differences, the lower rates they offer consumers, and their positive effect on the economy. New Jersey Credit Union League President Paul Gentile wrote an editorial in the April 4 edition of njbiz.com in response to an editorial by New Jersey Bankers President John McWeeney.

Maurice Smith named CU Hero of the Year

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MADISON, Wis. (5/17/11)--Maurice Smith, president/CEO of Local Government FCU, Raleigh, N.C., has been voted Credit Union Magazine’s Credit Union Hero of the Year. Smith is helping his members confront a difficult economy by providing alternatives to subprime debt, mortgage loan modifications and unemployment protection options. Much of North Carolina is rural. Often local banks aren’t interested in making small loans to the inhabitants. And that reluctance extends to small loans for critically needed equipment, such as fire trucks, Smith told Credit Union Magazine. While the credit union serves the employees of local government units, it formed a credit union service organization (CUSO), LGFCU Financial Partners, in 2006, to meet the needs of the state’s local municipalities. “In North Carolina, local government units can only deposit funds in banks, savings and loans, and trust companies because of state investment laws for units,” Smith told the publication. “The CUSO was a perfect match for us. It made sense for us to provide services to the towns. They came to us.” LGFCU Financial Partners is a wholly owned subsidiary with separate governance from the credit union’s board, to provide limited liability. About 76% of its lending is to fire departments, 22% to emergency medical services, and 2% to city/county units. In the four years since it launched, 139 borrowers from 53 counties have borrowed roughly $38 million. The CUSO has had no losses. Smith will be honored at the Credit Union National Association’s America’s Credit Union Conference & Expo in San Antonio, June 19-22. Credit Union Magazine also honored three other credit union leaders this year:
* Ron Amstutz, executive vice president, Desert Schools CU, Phoenix. He faced a personal challenge when his son was diagnosed with Guillain-Barre Syndrome. His son recovered and Amstutz paid it forward; helping Desert Schools become the No. 1 U.S. credit union for Children’s Miracle Network Hospitals fund raising. * Michael Bittle, CEO, Vanderbilt University Employees’ CU, Nashville, Tenn. When his neighbors and members sustained damage from the May 2010 Nashville floods, he created a suite of flood-relief loan products to help victims through the ordeal. * Carol Schillios, founder of Schillios Consulting Group, Seattle. A microfinance entrepreneur, she has helped establish cooperative programs in countries worldwide. Her peers refer to her as “Ms. Credit Union.”

Freiberg to keynote at N.Y. convention

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ALBANY, N.Y. (5/17/11)--Kevin Freiberg, recently named one of the “Top 30 Best Minds on Leadership” by Leadership Excellence Magazine, will present the closing keynote speech at the Credit Union Association of New York’s Annual Meeting & Convention, June 5 in Lake Placid, N.Y. Freiberg is the author of Nuts! Southwest Airlines’ Crazy Recipe for Business and Personal Success. He has also co-authored Boom!: 7 Choices for Blowing the Doors Off Business-As-Usual; Guts!: Companies that Blow the Doors off Business-as-usual; and the forthcoming Nanovation: How a Little Car Can Teach the World to Think Big. Freiberg is the president of San Diego Consulting Group, Inc., a professional speaking and consulting firm dedicated to equipping leaders for a world of change. In his keynote, Freiberg will share with credit union leaders his views on the links among leadership, corporate culture, innovation and exceptional customer loyalty; how those links have played out in companies such as Southwest Airlines and Motorola; and how to translate those strategies into success. The Credit Union Association of New York’s 2011 Annual Business Meeting & Convention will also feature an expo with more than 60 industry vendors, and education sessions led by industry experts. Attendees can choose from 14 sessions during the three-day event, with topics ranging from compliance, to risk management, to growth strategies. For under-30-year-old attendees, there will be a reverse panel with the “Crashers” led by members of the association’s Young Professionals Commission.

CU System briefs (05/16/2011)

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* SPRING VALLEY, N.Y. (5/17/11)--Cynthia Vaughan, 54, CEO of Rockland Employees FCU, Spring Valley, N.Y., pleaded guilty Thursday to bank fraud in the embezzlement of $150,000 from the credit union. She faces up to 30 years in prison and a maximum fine of $1 million or twice the gross gain or loss from the fraud (The Journal News May 14). According to the U.S. Attorney's Office, Vaughan accessed the credit union's computer system to transfer funds from its operating accounts into her personal accounts. The embezzlement occurred from October 2000 to July 2006 … * BATON ROUGE, La. (5/17/11)--Linda S. Dunn, 59, of Zachary, La., a former loan officer and assistant manager at East Baton Rouge (La.) Teachers FCU, was sentenced Thursday to eight years in federal prison for fraud and money laundering that cost the credit union $150,833. Chief U.S. District Judge Ralph E. Tyson also ordered Dunn to pay full restitution to the credit union and its insurer (The Advocate May 13) … * MANSFIELD, Texas(5/17/11)--Texas Trust CU has selected James Minge as the Mansfield, Texas-based, $700 million asset credit union's new president/CEO, effective May 31, announced board chairman Larry Skinner. Minge succeeds retiring CEO Jim Gray, who provided executive leadership to Texas Trust CU for the past 20 years. Minge, a certified public accountant, previously was senior vice president/chief project officer at the $4 billion asset Randolph Brooks FCU, Live Oak, Texas. His position there included being responsible for leading a core system conversion for more than 325,000 members. He also served as senior vice president of operations, responsible for the performance of 37 branch locations, at Randolph Brooks FCU … * NEW CASTLE, Del. (5/17/11)--J. Michael Dunlap of Wilmington, Del., died May 7 at the age of 57 of heart complications (The News Journal via Legacy.com May 10). Dunlap was a credit union volunteer for more than 30 years, including serving on the boards of the New Castle, Dela.-based Delaware Alliance FCU and the former WILDUPCO FCU, said the Delaware Credit Union League (Together May 16). He currently was the financial officer for Delaware Alliance FCU. Dunlap also previously served on the league board, said the league …

Missouri CU act modernization bill passes

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JEFRESON CITY, Mo. (5/16/11)--Missouri credit unions successfully passed legislation modernizing the Missouri Credit Union Act during the final weeks of the 2011 state legislative session, according to the Missouri Credit Union Association (MCUA). Companion bills H.B. 465 and S.B. 306, sponsored by State Rep. Don Wells (R-District 147) and State Sen. Jay Wasson (R-District 20) respectively, passed unanimously in both chambers of the Missouri General Assembly. The Credit Union Act modernization:
* Provides consumer protections for personal information contained in examinations; * Lifts the $25,000 limit on unsecured loans for volunteers; * Authorizes electronic balloting for mergers and conversions; and * Establishes due process for removing a credit union volunteer or officer.
“It makes sense for Missouri credit unions to update and improve their charter, just like other businesses in Missouri,” says Mike Beall, MCUA president/CEO. “With the passage of this legislation, we’ve renewed that concept for the Missouri state credit union charter.” MCUA worked with the Missouri Division of Credit Unions to develop the legislation. MCUA Chief Advocacy Officer Peggy Nalls ushered the credit union legislation through the General Assembly. This is the first credit union bill introduced in the Missouri General Assembly since 2008. “There are a great many things credit unions can champion for consumers,” Nalls noted. “Modernization of the state statute allows us keep pace with changes in a fast-paced regulatory environment, which helps credit unions grow to meet the changing needs of their members. We are very appreciative that the bill passed unanimously. That indicates a strong level of support for credit unions in the Missouri General Assembly.” The 2011 legislative session officially ended Friday. During the next two weeks, Missouri Capitol staff members and the reviser of statues will be working to post the final versions of all bills, MCUA said.

Wis. provision in budget bill would make CU conversions easier

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PEWAUKEE, Wis. (5/16/11)--The Wisconsin Legislature’s Joint Finance Committee Thursday voted to include language in the state budget bill that would make it easier for Wisconsin’s 2.2 million credit union members to be stripped of their equity in the cooperative financial institutions they own--by permitting direct conversion from a credit union to a bank charter, according to the Wisconsin Credit Union League. The vote on the budget amendment came after the provision was inserted into the bill without any public hearings, without any notice to credit unions, and without seeking any input from credit unions or their members, the Wisconsin league said. The conversion of any financial institution from one type of charter to another is a complex matter that should require thoughtful consideration, appropriate information-sharing with stakeholders, and sufficient protections for the financial institution’s owners, the league said. A Wisconsin credit union whose management or board of directors wishes to convert to a bank already has two avenues by which it can bring its plan to its member-owners for their vote. The budget bill amendment for a new third avenue, slipped in surreptitiously, is unnecessary and bypasses all the considerations and owner protections provided by the two currently available avenues, the league said. “It’s no surprise that this anti-consumer provision was included at the request of the Wisconsin Bankers Association (WBA),” said Brett Thompson, president/CEO of the Wisconsin league. “They have made clear their intent to harm or eliminate not-for-profit credit unions and have no business determining public policy on behalf of Wisconsin credit union members.” The WBA represents dozens of bailed out for-profit banks that still have more than a 90% market share for banking services in the state. “We would certainly support a legislative discussion regarding the conversion issue, but this is a major policy item that stands to negatively affect Wisconsin credit union members and should not be part of a state budget bill,” said Thompson. “If the WBA thinks it’s good policy to make it easier for a credit union to become a bank, then it should have a stand- alone bill introduced, permitting all interested and affected parties a chance to speak up and be heard in an open discussion. “Attaching a non-budgetary amendment that affects the property and rights and interests of so many Wisconsin citizens to the budget bill--at the very last moment and under cover of darkness--is not the Wisconsin way,” Thompson added. Last year alone, credit unions returned almost $203 million dollars to their member-owners in Wisconsin--in the form of lower rates on loans, higher rates paid on deposits, and fewer and lower fees. Wisconsin’s credit unions are calling on Gov. Scott Walker to commit to vetoing the conversion provision when the budget bill gets to his desk.

N. Carolina Save to Win bill passes state senate

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RALEIGH, N.C. (5/16/11)--North Carolina’s credit unions saw a key step accomplished in their efforts to promote more savings among their members, as SB 513 passed the State Senate unanimously on Wednesday afternoon, according to the North Carolina Credit Union League. The bill would allow credit unions in North Carolina to introduce a special savings program--called Save to Win--which permits participants who save money to be eligible to win monthly prizes, and compete for a grand prize ( North Carolina league’s The Weekly Update May 13). Credit union members at participating credit unions in North Carolina will be able to open a $25 certificate of deposit account to enter the Save to Win program, just as Michigan structured its program. Members can then deposit additional money, in $25 minimum increments, into the Save to Win account each month to earn chances to win monthly prizes and the annual grand prize. Credit unions currently are limited to two raffle drawings per year. SB 513 would exempt so-called savings promotion raffles like Save to Win from this limit to allow for monthly prize drawings, and thus encourage credit union members to save more. Also, the bill defines a savings promotion raffle under the general statues governing credit unions, requiring that money be deposited into a special savings account in order to win. In 2009, Michigan conducted the first Save to Win program in the U.S. Working with the Doorways to Dreams Fund, the Michigan Credit Union League and the Filene Research Group, eight credit unions in Michigan launched Save to Win in January of 2009. In that year-long campaign, 11,000 credit union members saved nearly $9 million. The Michigan program has since been renewed and grown steadily in the past few years, with more than 28,500 accounts opened and $37 million saved. “Pending the passage of SB 513 in the North Carolina House, we plan to work with the Michigan league and Doorways to Dream to launch Save to Win in North Carolina in 2012,” said Lauren Whaley, the North Carolina league’s director of legislative and regulatory affairs. “Like most other states, people in North Carolina do not save enough money. This savings program can provide a safe, fun and powerful incentive for credit unions to get more families saving and help those who are financially vulnerable build financial security.” State Sen. Rick Gunn, a Republican from Alamance and Caswell counties, led efforts to get SB 513 through the Senate Chamber. “I’m proud to have been the primary sponsor of a bill that gathered unanimous support from the senate showing that we are serious about building a strong financial future, even through something as fun as a savings raffle,” Gunn said. SB 513 will now move to the House Chamber for a hearing in the House Banking Committee before it is voted on among all House members and then sent to Gov. Bev Perdue to be signed into law. In a related matter, Washington state’s prize-linked savings bill was signed into law by Gov. Christine Gregoire Tuesday, surrounded by supporters who championed the bill through a difficult legislative session that was in special session. The bill goes into effect 90 days after signing (News Now May 12).

N.Y. CU Foundation partners with co-op to hold fair

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ALBANY, N.Y. (5/16/11)--The New York Credit Union Foundation and Cabot Creamery Cooperative recently held a Health & Wealth Fair for more than 75 kids, teens, parents and grandparents in Syracuse, N.Y.
Click to view larger image Thom Dellwo, from Cooperative FCU, Syracuse, N.Y, reviews the basics of credit scores--including how they’re determined and how to improve them--at a workshop for adults at the Health & Wealth Fair, sponsored by the New York Credit Union Foundation and Cabot Creamery Cooperative. (Photo provided by the New York Credit Union Foundation)
The fair was created as a hands-on, fun way to connect grandparents to their grandchildren, and parents to their children. It featured finance workshops, led by local credit unions, specific to ages 5-8, 9-12, 13-15 and adult and health workshops for all ages led by Cabot and WellTrail Inc. The fair also served as the launch of the Growing Health and Wealth Program, an awareness campaign/kit for children (ages 6-10) and their families developed by the foundation in partnership with Cabot Creamery Cooperative. The campaign was created to promote correlation between health and wealth and to emphasize that, the earlier parents and grandparents help their young ones learn the benefits of a healthy diet and money management, the better off they will be. To help give kids that head start, the foundation and Cabot created a kit that includes a set of three saving, spending, sharing moneyboxes; a dual Growing Health and Wealth activity book; a financial goals poster; and a family guide. The kits were provided free of charge to fair participants. An additional 12,000 kits will be distributed by Central New York credit unions. “Many people get into financial trouble because of health-related issues,” said Diane LaVigna-Wixted, executive director of the foundation. “You can’t turn on the television or computer without witnessing news of the health care issue or the economy and its attending gloom and doom message. The sooner children are taught about the benefits of diet and exercise and managing money, the better prepared they will be for their futures.” Credit unions participating in the Growing Health & Wealth Program include: ACMG FCU, Solvay; AmeriCU, CU, Rome; Compass FCU, Oswego; Cooperative FCU, Syracuse; CORE FCU, East Syracuse; Empower FCU, Syracuse; Focal Point FCU, Syracuse; Liverpool (N.Y.) Central Schools FCU; MONEY FCU, Syracuse; Oswego (N.Y.) County FCU, Oswego Heritage FCU, Fulton: Syracuse (N.Y.) Fire Department EFCU and Westar FCU, Camillus. Fair partners included: Huntington Family Center, WellTrail, Inc., Open Hand Theater, Child Care Solutions and St. Lucy’s Church Community Garden. Cabot Creamery Cooperative has been in continuous operation in Vermont since 1919. The farmers who own Cabot--1,275 dairy farm families located throughout New England and upstate New York--support healthy initiatives for schools and, as a cooperative, reach out to other cooperatives to support that message.

SECU receives congratulatory visit from IRS

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RALEIGH, N.C. (5/16/11)--Michael Beebe, Internal Revenue Service (IRS) director of stakeholder partnerships, education and communication (SPEC) recently paid a visit to State Employees’ Credit Union (SECU), to share his appreciation for SECU’s efforts in helping North Carolina taxpayers through the IRS free Volunteer Income Tax Assistance (VITA) program.
Click to view larger image An IRS representative recently paid a personal visit to State Employees’ Credit Union (SECU), Raleigh, N.C. to share his appreciation for SECU’s involvement the IRS free Volunteer Income Tax Assistance (VITA) program. From left, Michael Beebe, director, IRS director of stakeholder partnerships, education and communication (SPEC); Tenesha Carter, SECU senior vice president, tax preparation services; Roger Burton, territory manager, IRS SPEC and Robyn Happoldt, SECU senior tax preparer. (Photo provided by State Employees CU)
In 2011, SECU helped nearly 48,000 members claim roughly $74 million in refunds while saving them over $7 million in tax preparation fees. SECU became a VITA partner in 2007, offering sites in all of its 237 branch locations statewide. “The support that credit unions provide to the VITA program clearly is a benefit to educating taxpayers in our communities,” said Beebe. “We are happy to see taxpayers taking advantage of these volunteer services and appreciate the support of our credit union partners.” “As a not-for-profit member-owned financial cooperative, the credit union has always been committed to providing low or no-cost services that are beneficial to members, and the VITA program aligns perfectly with that commitment,” said Tenesha Carter, SECU’s SVP of Tax Preparation Services said. “With the continuing economic climate and high unemployment rate in North Carolina, there has also never been a better time to help put money back in the pockets of those who need it most.”

National Fed. of CDCUs honors two

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NEW YORK (5/16/11)--The National Federation of Community Development Credit Unions has announced the recipients of the 2011 Annie Vamper “Helping Hands” Award, the organization’s highest honor for community development credit union (CDCU) staff and volunteers. This year’s recipients of the awards are Mignhon Tourné, president/CEO of ASI FCU, Harahan, La., and Kim Vermander, senior vice president of Communicating Arts CU, Detroit. “While presented to individual CDCU heroes, the Annie Vamper ‘Helping Hands’ award not only recognize each awardees selfless work to promote the credit union ideal of ‘people helping people,’ but they also honor the credit unions that have enabled these individuals to shine,” said Cliff Rosenthal, president of the federation. “Through the individual efforts of our honorees, and the collective efforts of their credit unions, thousands of low- and moderate-income residents of New Orleans and Detroit, have access to affordable and responsible financial services.” Tourné and Vermander will receive their awards at a special ceremony on June 17, during the federation’s 37th Annual Conference on Serving the Underserved in Hollywood, Calif. Mignhon Tourné served on ASI FCU board of directors for over twenty years, spending 10 years as board president. While serving on ASI FCU board, she was a champion of diversity, encouraging the credit union to extend inclusive banking services to those segments of the population left behind by traditional financial institutions. Under her leadership as board president, ASI FCU grew from $10 million in assets to more than $250 million. During her tenure as CEO, Tourné has been equally instrumental in the creation and development of a many innovative programs, products, and services to benefit ASI FCU’s membership. She has spearheaded the creation two new bilingual branches, offering a welcoming multi-cultural environment and greater access of the credit union’s services by the Vietnamese-American community and the Spanish-speaking community--groups whose numbers have grown significantly in the greater New Orleans area over the past several years. When Communication Arts CU opened a new branch in Highland Park, one of the most low-income and underserved communities in all of Detroit, “Kim was responsible for literally everything,” said Hank Hubbard, the credit union’s CEO, “from supervising the pouring of the cement floor to the selecting the shape of the counter, and from getting our name out in local churches to becoming treasurer of the Highland Park Business Association.”The Highland Park branch now serves about 2,500 members, accounts for nearly $2 million in savings and $3 million in loans. “And all of this was accomplished through word of mouth based on our service to the community--we have not done any traditional marketing--and Kim is a big reason for this success,” Hubbard said. Communicating Arts CU opened a second new branch in an equally devastated area in East Detroit in January, attracting more than 50 members in the first month alone. Successfully branching into neighborhoods forsaken by other institutions has become one of Vermander’s specialties. It is a skill that the credit union is putting to use as it refocuses its efforts to become Detroit's premier community development credit union. When told Vermander would receive a Vamper Award, Hubbard praised her selection. “Kim is our go-to person at the credit union,” he said. “She has been responsible for driving nearly all of the changes we have gone through since becoming a CDCU.”

Filene calls for i3 candidates

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MADISON, Wis. (5/16/11)--Filene is seeking new members for its i3--Ideas, Innovation, Implementation--team. Filene i3 is a work group of credit union professionals who have not yet reached the CEO level, but are in a position with substantial responsibility. Group members strive to be transformational leaders in building the future of credit unions and to create new ideas, innovate and implement for the benefit of the credit union industry, according to Filene. Filene seeks candidates who are passionate about the credit union system and believe that credit unions are poised to help members along the road to financial recovery. Executives from natural person credit unions in the U.S. and Canada are eligible to apply. The application deadline is June 19. Candidates will be selected and notified by the end of August. “Innovators don’t see obstacles--they see the current environment as an opportunity to contribute to transformational change,” said Denise Gabel, Filene chief innovation officer. Murray Barrick, a professor of business at Texas A&M University, will facilitate the recruiting process for Filene.

Oral arguments heard in Hudson Valley FCU appeal

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POUGHKEEPSIE, N.Y. (5/13/11)--The Appellate Division of the Supreme Court of New York Thursday heard oral arguments regarding Hudson Valley FCU’s appeal of a lower court ruling that denied the Poughkeepsie, N.Y. credit union’s challenge to the state’s mortgage recording tax (MRT). The credit union had filed the suit on May 12, 2009 against the New York State Department of Taxation and Finance, Commissioner Robert L. Megna and the State of New York. It sought a declaratory judgment that the state may not impose the MRT on mortgages granted to secure loans made by the credit union because it is a federal credit union with a federal tax exemption. The credit union also sought reimbursement of tax it had already paid. Last year, New York Supreme Court Justice Judith Gische dismissed Hudson Valley’s case, declaring that it was not “actionable.” During yesterday’s court session, one judge queried the credit union as to why the nature of the tax, as defined by New York State, shouldn’t control the issue. The judge describe the MRT as a tax on the privilege of filing the mortgage under state law, and asked how then could it be considered a tax on the credit union. Unlike most states, which only charge administrative fees for mortgage recordation, New York charges a tax that can be more than 2% of the mortgage's face value in places like New York City. Hudson Valley FCU argued Thuraday that the tax is not considered a "priviledge tax" under federal law and that the credit union federal tax exemption and applicable U.S. Supreme Court holdings should control. Recording a mortgage is required in New York for lenders to be able to foreclose on a mortgaged property or have other rights related to the mortgaged real estate. CUNA and the Credit Union Association of New York filed an amicus brief with th court arguing in favor of the credit union, as did the U.S. Department of Justice in order to support the credit union's argument that the tax-exemption and other federal laws mean that mortgages it made should not be subject to the tax. A decision in the appeal is not expected for until later thi year.

CU System Briefs (05/12/2011)

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* WASHINGTON (5/13/11)--In a lawsuit alleging redlining discrimination in Detroit, the U.S. Department of Justice (DOJ) has reached a settlement with Citizens Republic Bancorp Inc. and Citizens Bank of Flint, Michigan (online.wsj.com May 10). The lawsuit specifically alleged that Citizens violated the Fair Housing Act and Equal Credit Opportunity Act by serving the credit needs of residents of mostly white neighborhoods to a substantially greater extent than it served the credit needs of majority African-American neighborhoods. Thomas Perez, Assistant Attorney General in charge of DOJ's Civil Rights Division, called the settlement “innovative” and noted it may serve as a model in other areas, per the Detroit News. DOJ is involved in 60 cases nationwide involving comparable accusations of discriminatory lending practices, Perez further stated ... * WASHINGTON (5/13/11)--National Credit Union Administration (NCUA) Board Member Michael E. Fryzel along with over 200 other dignitaries and new credit union members attended the grand opening of the Polish & Slavic FCU’s newest branch in Bridgeview, Ill., May 5, NCUA said. The credit union has served the New York and New Jersey area for more than 35 years. Fryzel also marched with the credit union in the annual Polish Constitution Day Parade on Saturday, May 7. Fryzel is the first Polish American to serve on the NCUA Board as a member and (previously) as its chairman … * IOWA CITY, Iowa (5/13/11)--The University of Iowa Community CU (UICCU) has been recognized as one of the top credit unions in the country in terms of its return rates to members (Iowa City Press-Citizen May 6). UICCU was ranked third of 7,491 credit unions nationwide reviewed in 2010 for their Return of the Member measurement (ROM) by Callahan & Associates, an independent research firm. The ROM index attempts to measure the value credit unions provide to their members based on three core components: return to savers, return to borrowers and member service usage …

Ohio CUs gain members for eighth consecutive quarter

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COLUMBUS, Ohio (5/13/11)--For the eighth consecutive quarter, Ohio credit unions collectively netted positive member growth, most recently posting a gain of 32,500 new members, according to the Ohio Credit Union League’s (OCUL) year-end Quarterly Performance Summary. The trend comes after a long period of flat membership growth leading up to the recession, suggesting consumers continue the recent tendency to move their money to community-based financial institutions, OCUL said. Similarly, assets and capital at Ohio credit unions also posted gains, while lending slightly slowed statewide, but remained higher than the credit union national average. “Demand for local, community-based, affordable financial services continues to rise,” noted Paul Mercer, OCUL president. “Membership growth, paired with an increase in deposits and assets, tells us that credit unions are becoming an answer for more Ohioans, their families, and small businesses, than ever. And the passion behind our movement to continue to meet the needs of credit union members is stronger than ever before.” Ohio membership increased 1.23% during the most recent 12-month statistical period (Dec. 2009 – Dec. 2010), outpacing the national credit union membership growth rate of .66%. Ohio is home to 387 credit unions totaling 2.68 million members. OCUL analysts point to two reasons for the continued growth of credit unions: consumers moving from large regional banks to community-based financial institutions, and the typically higher rate of return on savings at credit unions. Previous growth was part of a “flight-to-safety;” however, economic recovery has slowed many consumers from liquidating investments. Growth figures for assets and shares in December have slowed from what was reported in the previous quarter, but both remain positive. Assets at Ohio credit unions posted 3.84% growth from Dec. 2009 to Dec. 2010. Shares grew 4.68% during the same time period, with money market balances growing at the fastest rate, up 15.5% over the 12-month period. Ohio credit unions continue strong capital growth, gaining 4.41% during the year. Annual loan growth figures remain stagnant, but improved slightly from September’s figure of -0.36% to December’s of -0.24%. Despite renewed growth in the vehicle sales market, credit unions in Ohio saw their auto-loan balances decline 50 basis points over the last 12 months. However, first mortgage originations picked up in the second half of the year, with Ohio credit unions recording $5 billion in first mortgage originations. The average member relationship, or the outstanding combined loan and share balances per member, increased from $11,306 in December 2009 to $11,464 in December 2010. Although it represents only 3.1% of the Ohio credit union loan portfolio, member business lending is becoming an increasingly important part of a credit union’s suite of products. As of December 2010, 99 of Ohio’s 387 credit unions reported outstanding business loan balances, representing a total of $389.6 million in outstanding balances. In 2010, 15.5% of credit unions in the state reported originating a business loan, up from 15.5% reported 12 months ago. Overall, business loan balances grew 5.8% during the 12-month period. Ohio credit union economic indicators remain positive overall, with capital levels at 11.6% on average, which is higher than Ohio banks and thrifts, and credit unions and banks nationally. Asset quality in Ohio remains strong, as the delinquency rate of 1.33% remains below the national average.

Minnesota CUs monthly column provides fin ed to consumers

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INNER GROVE HEIGHTS, Minn. (5/13/11)--Heartland CU, Inver Grove Heights, Minn., has a monthly opinion column on Patch.com to provide financial education to consumers within the community--a community eligible for credit union membership and the location of Heartland’s main branch. Patch.com is a community-specific online news and information platform dedicated to providing comprehensive and trusted local coverage for individual towns and communities. After meeting the Inver Grove Heights Patch editor at a community event, Alyssa Karl, Heartland director of marketing, proposed the “On the Money” educational column to the online news source and the first article published on Jan. 27. Heartland contributes an article every second and fourth Thursday of the month. Column topics have included:
* “What is a Credit Union?” * “The Language of Finance: Understanding Commonly Used Financial Words”; * “Improving Your Credit Score”; * “Is Zero Percent Financing the Best Choice?”; and * “Tips for Talking to Preschoolers About Money.”
“We’re always looking for ways to help educate members, as well as those in the communities we serve,” Karl said. “This column allows us to reach out and provide free financial education to a broad audience and we’re looking forward to growing the column as the site’s readership grows.”

NCB Honors CUNAs Hampel with 2011 Spirit of Cooperation Award

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WASHINGTON (5/12/11)--NCB, a financial services company serving cooperatives, has named Bill Hampel, senior vice president and chief economist for the Credit Union National Association (CUNA), as this year’s recipient of the Stan Dreyer Spirit of Cooperation Award. The honor was presented at the bank’s annual meeting held May 5 in Washington, D.C. The bank awards The Stan Dreyer Spirit of Cooperation Award annually, selecting a recipient--an individual or organization--who lives the spirit of the cooperative principles. Dryer, the award's namesake and who is now retired from NCB, was one of the people instrumental in passage of the 1978 Congressional Bank Act, which created NCB. Charles Snyder, president/CEO of NCB, said about Hampel's award: “Bill has been instrumental in forging a great partnership between the bank and credit unions nationwide. His contributions to the bank and the cooperative community for decades are countless, and we are extremely pleased to honor him and his accomplishments.” Hampel’s dedication to working with credit unions and cooperatives made him a natural recipient for the award, NCB said in a release. As an NCB board director for more than seven years, he has taken his credit union knowledge and successfully applied it to other cooperative sectors. Hampel has helped NCB work with credit unions nationwide with deposits, cash management, lending and loan sales, NCB noted. Hampel also is a senior member of CUNA’s credit union advocacy team in Washington D.C. He writes economic analysis columns that appear in several credit union publications, and is an expert on the economy and credit union issues. He is regularly interviewed by the media for stories appearing on major national television, radio and print outlets.

Savings Challenge deadline is May 17

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MADISON, Wis. (5/13/11)--Credit unions are reminded to post their
Click for slide show Nicholas Winchell showed off his guitar skills during Youth Week at ISU CU, Terra Haute, Ind. (Photo provided by ISU CU)
National Youth Savings Challenge results by noon CT, Tuesday, May 17 to be eligible for 10 prize drawings of $100 each, randomly awarded by the Credit Union National Association (CUNA). The National Youth Saving Challenge takes place every year during April. It is held in conjunction with National Credit Union Youth Week, sponspored by CUNA. Credit unions nationwide create inspiration for saving and had fun with their young members during the National Youth Saving Challenge. Among ways credit unions celebrated and taught their young member to save:
* Dynamic FCU, Celina, Ohio, hosted Kirby the Kangaroo. Kids joined Kirby and his Rockin’ Crew on Saturday, April 16 for fun, games and prizes. Kids that made a deposit of $5 or more were given a special gift from Kirby. * Ticonderoga (N.Y.) FCU, offered young members who opened a Savings Safari account Moonjar Moneybox. Moonjars help children learn to manage their money with individual compartments for saving, spending and sharing. The credit union also celebrated National Financial Literacy Month by encouraging youth members to visit the credit union to enter a raffle for a $50 savings bond and the $100 national prize. One randomly selected winner was drawn at each of the credit union’s three branches. * ISU CU, Terra Haute, Ind., invited members under the age of 10 to participate in a coloring contest, with the winner receiving a $15 gift certificate to Toys ‘R Us. Members under the age of 17 were invited to participate in a deposit challenge and a “Guess the Jar” contest. Youth members were also able to play Band Hero and have their picture taken with a rock star background. * Mazuma CU, Kansas City, Mo., gave away fun prizes to youth members and encouraged them to become a Savings Rock Stars by depositing $10 or more into their account during the week. All youth members who deposited $10 or more into their account were put into a drawing for a $50 savings bond. Two $50 savings bonds were awarded to youth members Monday through Saturday. Mazuma’s Annual Spirit Week coincided with Youth Week with “Rock-n-Roll” as its theme. Each day, Team Members wore attire to fit the song choice of the day. Also, Saturday, April 23, Mazuma hosted “Mazuma Rocks Day” by sponsoring a Guitar Hero contest for kids 8–17 and a coloring contest for kids under eight. * Kamehameha FCU, Honolulu, offered kids the chance to play Guitar Hero, and win a $60 Game Stop gift card. They also received double punches to their punch cards for every deposit of $10 or more during the month. For all new youth accounts opened during Youth Savings month, young members received a free My Money Rocks at Kamehameha FCU t-shirt along with their savings passbook, punch card and personal bank. * All 32 branches at ORNL FCU, Oak Ridge, Tenn., worked hard to decorate and celebrate youth during April. The credit union’s Young & Free Tennessee spokesperson, Alex Oliver, was especially instrumental in getting kids fired up for financial literacy. Branches held events with games, activities, food and prizes. Some branches held financial literacy workshops for kids featuring the award-winning Moonjar Moneybox. * Sussex County FCU, Seaford, Del., hosted a free youth fair and member appreciation celebration. Members could take advantage of one-day only loan and deposit specials. Younger guests were entertained with face painting and caricature art. Kids could also climb a rock wall, performing stunts in a bounce house and making personal masterpieces with the spin art. Young members who opened Kids Club accounts could grab for cash in the Typhoon Money Machine.

New banking secretary headlines Pa. league annual meeting

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HARRISBURG, Pa. (5/13/11)--New Pennsylvania Secretary of Banking Glenn Moyer was the opening session speaker at the Pennsylvania Credit Union Association’s annual meeting this week. The meeting also marked PCUA’s President/CEO Jim McCormack’s 30th anniversary with the association. Moyer, recently confirmed as secretary, discussed the functions and roles of the state banking department. He said he was optimistic that the state would approve the budget by June 30. He challenged credit unions support your obligation to support people of all income levels within their communities. As a veteran banker, Moyer reminded attendees: “It doesn’t matter what you do or services you provide, it comes down to how your customers/members perceive what you do for them.” Mark Sievewright, president of Fiserv’s Credit Union Solutions, Brookfield, Wis., challenged credit unions to look toward 2020. “We are undergoing social and demographic changes now,” Sievewright said. Sievewright spoke about “touch finance” and the need for credit unions to keep up with technology. “Both social networks and social business needs to be the focus for future,” he said. “Sometimes you’re so close to the business you’re in, you miss the big picture.” During a pre-convention session, more than 60 volunteers attended the National Credit Union Administration Requirements for Directors session for credit union board members to fulfill NCUA’s new board financial literacy requirements. Participants in this session received a certificate of attendance. The tradeshow officially opened in the afternoon, with more than 80 vendors offering products and services for credit unions. A new feature this year is “showcases,” where selected vendors highlight their services. On Wednesday evening, nearly 100 supporters attended the Wines & Wheels political action committee fundraising event held at The Antique Auto Museum of Hershey.

Overhaul to reduce Irish credit unions

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COUNTY LEITRIM, Ireland (5/13/11)--Stress tests being carried out on the Ireland’s 410 credit unions are expected to lead to a substantial reduction in the number of branches nationally by the end of the year. It is expected that stress test results will show that at least 80 of the country’s credit unions are in serious financial difficulty (Leitrim Observer May 11) All savings deposits in Irish credit unions are covered by a government guarantee. Experts predict that than half of all credit unions nationally may be closed or merged into other credit unions. Sources said they expect the first 80 branches to be closed by the end of the year. “Given the expected adverse stress test results and the challenges facing 400 plus individual credit unions to operate, compete and be regulated in the wider financial sector, it is likely that there will be a major amalgamation of credit unions into fewer and larger entities--one possible method to do this is on a countywide basis,” Colm O’Grady, credit union specialist with Russell Brennan Keane, Chartered Accountants and Business Advisers told the Observer.

International CU Day celebrates financial co-ops global impact

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MADISON, Wis.(5/12/11)--Cooperatives will be celebrated throughout the month of October with Co-op Month in the U.S., Co-op Week in Canada, Oct. 16-22, and International Credit Union Day celebrations on Oct. 20.
Click to view larger image Click for larger view
This year’s International Credit Union Day theme, “Credit Unions Build a Better World,” celebrates the important economic and social contributions credit unions make to their communities worldwide. It also aligns cooperatively owned and controlled credit unions with the greater cooperative business sector and the United Nations as they launch the International Year of Cooperatives 2012, which begins Oct. 31, when cooperatives worldwide will unite in celebration with the theme “Cooperative Enterprises Build a Better World.” “Credit unions continually demonstrate their ability to improve the lives of individuals, families, communities and countries around the world and have done so for generations,” said Pete Crear, president/CEO of World Council of Credit Unions (WOCCU). “As we celebrate International Credit Union Day this October and prepare for the United Nations' International Year of Cooperatives in 2012, we would do well to remember that we're all part of building a better world.” “We need more people to recognize that credit unions as member-owned cooperatives are the best option for financial services,” said Bill Cheney, president/CEO of Credit Union National Association (CUNA). “With the designation of 2012 as the International Year of Cooperatives, we have a unique opportunity to raise awareness. And tying in this year’s ICU Day theme with the larger International Year of Co-ops event will create synergy to further help consumers, policymakers and those in the media better understand that the cooperative model is a proven means of improving people’s lives and building a better world.” Cooperative businesses in the U.S. have celebrated Co-op Month since 1930. Throughout the month, the U.S. National Cooperative Business Association (NCBA) works across cooperative sectors to promote the cooperative business model. NCBA continually strives to make cooperatives a key component of U.S. economic development policy by proposing legislative and regulatory changes that enable the sector’s growth. “It is fitting that this international group of cooperative organizations has come together to do what cooperative enterprise does so well--leverage resources for the mutual benefit of those that use them,” said Paul Hazen, NCBA president/CEO. “The truth of the slogan can be found wherever you find cooperative enterprise. Cooperatives put people first and respond to needs of their member owners.” Canadians celebrate Co-op Week during the third week of October, which coincides with ICU Day. An international committee of representatives from WOCCU, CUNA, Canadian Central, NCBA, CCA, Conseil canadien de la coopération et de la mutualité (CCCM - Canada) and Conseil québécois de la coopération et de la mutualité (CQCM - Canada) collaborated to align the theme and artwork for their annual events with the United Nations’ global recognition of cooperatives.

Georgia CU league announces statewide board leadership

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DULUTH, Ga. (5/12/11)--The Georgia Credit Union League (GCUL) named its slate of board members at its recent annual meeting. Elected to serve for a second term were: Terry Hardy, CEO of MembersFirst CU, Atlanta, and Janet Davis, CEO of TIC FCU, Columbus. Newly elected to the board of directors was Brian Akin, CEO of North Georgia CU, Toccoa. Also, Warren Butler, CEO of Georgia United CU, Atlanta, was nominated and elected to succeed his expired term as member-at-large. The board members join other leaders on the GCUL board of directors, who convene regularly to set the direction for league efforts to enhance the Georgia credit union movement. Georgia Credit Union Affiliates (GCUA) provides services and support that help credit unions meet the financial services needs of the state’s more than 1.8 million credit union members. GCUA offers advocacy, educational, operational and marketing support for Georgia’s 154 credit unions, with combined total assets of almost $16 billion.

Bankruptcy filing up for 12 months ending March 31

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WASHINGTON (5/12/11)--U.S. bankruptcy filings for the 12-month period ending March 31 rose 2.6%, compared with bankruptcy filings for the 12-month period ending March 31, 2010, according to statistics released this week by the Administrative Office of the U.S. Courts. Year-ending March 2011 bankruptcy filings totaled 1,571,183, with 1,531,997 bankruptcy cases filed in the 12-month period ending March 31, 2010. Most bankruptcy filings involve predominantly non-business debts. Non-business filings--also called personal or consumer filings--for the 12-month period ending March 31, totaled 1,516,971, up 3% from the 1,470,849 bankruptcies filed in the 12-month period ending March 31, 2010. Bill Hampel, chief economist for the Credit Union National Association, noted that although bankruptcy filings are disturbingly high, the year-over-year comparisons can be a bit misleading. “On a quarterly basis, consumer bankruptcy filings peaked in the second quarter of 2010 at around 408,000 and have been slowly declining since then to approximately 353,000 in the first quarter of 2011,” Hampel told News Now. “This suggests that credit unions should continue to see improvements in credit quality as the year progresses.” Filings involving predominantly business debts fell. They totaled 54,212, down 11% from the 61,148 business bankruptcies filed in the 12-month period ending March 31.

Washington Gov. signs prize-linked savings bill into law

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FEDERAL WAY, Wash. and BEAVERTON, Ore. (5/12/11)--Washington state’s prize-linked savings bill was signed into law by Gov. Christine Gregoire Tuesday, surrounded by supporters who championed the bill through a difficult legislative session that is currently in special session. “With the household savings rates of Americans in a decade-long decline, this legislation law will allow financial institutions to encourage savings with innovative solutions,” said Northwest Credit Union Association (NWCUA) CEO John Annaloro. “Credit unions are seemingly the only group offering such innovative solutions to a complex societal trend.” The prize-linked savings bill was one of a hand-full of proposals that seem to be on a fast track through the Legislature, passing a House floor vote 91-2 and a Senate floor vote 46-0. “This (legislation) rewards thriftiness and that is a good thing,” said the bill’s prime sponsor, State Sen. Derek Kilmer (D-26), during the Senate debate. “This program doesn’t just encourage people to save, it’s actually shown to improve their saving habits. This isn’t a new government program.” The bill goes into effect 90 days after signing. “I think there were two real keys to getting the bill passed,” Stacy Augustine, NWCUA senior vice president and general counsel, told News Now in April when the bill passed the Washington House of Representatives and was sent to the state Senate. “Making sure legislators don’t perceive it as an expansion of gambling, and making sure the other financial institutions are included so that they don’t feel like credit unions are just creating another program to ‘steal’ their customers. Honestly, I don't think that other financial institutions will be terribly interested in offering the program, but it was important to include them so that they didn’t feel excluded from it. “Amending any state law that could be perceived as gambling is always a tricky venture, so the association is very pleased that the bill has been approved,” she had added. In a related matter, a Save to Win bill (SB 513) unaninmously passed the North Carolina Senate this week, and was referred to the North Carolina House.

Southeastern CU Foundation to match storm donations to CUAid

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MADISON, Wis. (5/12/11)--Credit unions and the communities they serve have a resource to assist them in getting back to “business as usual” following the devastating storms across Alabama on April 27. The Southeastern Credit Union Foundation (SECUF) has announced it will match up to $100,000 of donations made to CUAid for further community reinvestment projects. Since activating its online disaster relief system CUAid.coop, the National Credit Union Foundation (NCUF) has already raised over $65,000 from the credit union community. “We are working with the Southeastern Credit Union Foundation to distribute the funds,” Christopher Morris, NCUF director of communications told News Now. “They are granting the funds and have already starring giving some out.” SECUF has been continually working to initiate financial assistance to credit unions in need. The foundation is offering a chapter community project match to Alabama credit union chapters up to $10,000. This money will help chapters finish projects in their respective areas. The SECUF also announced a $25,000 donation to Red Cross of Alabama to help aid the many people displaced throughout the state. “The storm was so powerful that two weeks later there are still credit unions and credit union staff that need assistance,” said SECUF Chairman Joe McGee. “We’re extremely thankful that NCUF and our peer credit unions have risen to the occasion to aid in the disaster relief efforts for credit unions, their employees and members in Alabama. Our matching funds will only further the aid the SECUF and CUAid will be able to provide.” SECUF has given out nine separate $1,000 grants from the Disaster Relief Fund to individual credit union members. There was also an additional $975 in grants given to credit union members that had needs that fell outside of the traditional disaster relief assistance. “The outpouring of support from the credit union movement has been amazing,” Morris said. “A wide range of CU organizations and individuals have helped make a big difference to those credit union people in need.” Credit union supporters in every state can make donations through a secured website that accepts credit cards and wire transfers. As donations post through CUAid.coop, NCUF will coordinate with SEFCU to distribute money efficiently to credit union employees and members in the affected areas. For more information or to make a donation, use the links.

Alleged robber found inside credit union

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DENVER (5/12/11)--A Public Service CU branch was forced to remain closed Saturday morning when an employee arrived to find an alleged robber lying injured on the floor. The alleged robber, who had broken through a window, was disoriented and bloody, according to news reports, (KDVR May 10). The man also broke into a 2009 Dodge Challenger for sale by the credit union. The car was located just feet from the window where the man entered the credit union. Public Service CU President/CEO Dave Maus described the incident as “bizarre.” The incident forced the credit union to cancel its “Shred Day” event.

CUs find uptick in card fraud

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HIGHTSTOWN, N.J. (5/12/11)--Credit unions nationwide have experienced an increase in card fraud within the past few weeks (New Jersey Credit Union League The Daily Exchange May 2), according to CUNA Mutual Group. The fraudulent transactions are occurring both within and outside of the U.S. with Visa and MasterCard credit and debit cards. Several exchanges have taken place with card processors and the card associations in an attempt to determine the common point of purchase (CPP). To effectively mitigate losses, it is vital to determine the CPP, which is the location where the member’s card may have been compromised. CUNA Mutual Group is seeking the cooperation of credit unions by working together with their card processors and the card associations to help pinpoint the CPPs. The losses involve “card present” transactions (magnetic stripe, signature-based fraud). This may involve a system intrusion rather than skimming, according to CUNA Mutual.

Corporate Central announces board of directors reports positive financial results

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MUSKEGO, WIS. (5/11/11)--Corporate Central CU, Muskego, Wis., announced its board election results and reported a positive financial performance at its recently completed annual meeting. With 200 members in attendance, Chairman Gerald Forsythe and President/CEO Robert W. Fouch reported that Corporate Central CU is on solid financial footing. “Your commitment and support have placed us well ahead of all capital measures contained in the corporate credit union regulations,” Fouch said. “This means that we are able to focus our resources on serving you, developing new services, improving existing services, and welcoming new members as we continue to grow.” Members also heard positive comments about the health and strength of Corporate Central CU and its future from Ginger Larson, director at the office of credit unions and Mary Martha Fortney, president/CEO of the National Association of Credit Union Supervisors. During the business portion of the meeting, because election results showed no additional candidates had been nominated; the slate of candidates was declared to be elected. Those named to the board include:
* Forsythe--president/CEO, Altra FCU, Onalaska, Wis; * Greg Hilbert--Fox Communities CU, president/CEO, Appleton; and * Alan Zierler--Capital CU, Kimberly, Wis.
At the organization meeting held immediately after the Annual Meeting, the four foard members comprising the executive committee were determined. They are:
* Chairman--Forsythe; * Vice Chairman--Hilbert; * Secretary, Kim Sponem--president/CEO, Summit CU, Madison, Wis; * Treasurer, Ronald Vogel--president/CEO, Fort Community CU, Fort Atkinson, Wis.
Prior to the annual meeting, Corporate Central CU hosted an educational session on the Smart Option Student Loan program. Attendees were guided through the start-up process, the online member application experience, and learned about the revenue potential of the program. In about 60 days since Corporate Central CU launched the Smart Option Student Loan program, more than 20 credit unions have signed onto the service.

Corporate One FCU announces capital re-commitment results

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COLUMBUS, Ohio (5/11/11)--Corporate One FCU Monday announced the results of its member capital re-commitment offering, which closed at the end of April. The corporate now holds more than a quarter of a billion dollars in total regulatory capital, which includes reserves and undivided earnings (RUDE) of $37.2 million. The response was overwhelming as the capital offering was even over-subscribed, Corporate One said. With such numbers, Corporate One exceeds all capital ratios at the “well capitalized” level as outlined in the recently updated regulations governing corporate credit unions, and meets all net-economic-value ratios in both base- and stressed-case scenarios. In addition to meeting, the National Credit Union Administration revised Reg. 704 capital ratios at the “well capitalized” levels. Corporate One already boasts a RUDE ratio of 1.14%, which isn’t required until year six, per the regulation. As one of the few corporates not to lose any of its members’ capital investment, Corporate One was in a unique position as it began its campaign because the corporate did not require any additional capital from its current partner members; it only requested members to re-commit their existing capital to the new form of capital--Perpetual Contributed Capital--mandated by the NCUA in the updated regulation. “It brings me great pride to report that Corporate One’s membership capital offering was a huge success and was over-subscribed, and I want to extend my deepest appreciation to those members who re-committed their capital with us,” said Corporate One FCU President/CEO Lee Butke. “The capital re-commitment acknowledged the value Corporate One provides its members and I’m happy to report we’re continuing to receive re-commitment paperwork every day,” he added. “I’ve never been more confident in our ability to serve credit unions with the solutions they need.” The capital offering included the opportunity for members to invest in a non-contributed capital account that in the end was over-subscribed. However, Corporate One’s board has agreed to honor all requests as a thank-you to members. Corporate One filed its capital plan with the NCUA on March 30 and received the agency’s go-ahead on the plan last week. With the close of its member capital re-commitment offering, Corporate One turns its attention to new members. Because credit unions are now doing their due diligence on their future partners, the corporate’s strong financial condition will be an opportunity to provide services to new members. To that end, Corporate One will be hosting a series of town hall meetings in cities nationwide to raise awareness about the corporate and to provide the ability for prospective credit unions to meet with members of Corporate One’s senior management. Corporate One will also open its doors the week of June 6 for an Open House Due Diligence Week, welcoming interested credit unions to visit its headquarters in Columbus, Ohio, to meet with members of its senior team and operations staff.

Florida FCU to media Interchange cap hurts consumers

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TAMPA, Fla. (5/11/11)--A debit card interchange cap of 12 cents per transaction pending in Congress isn’t enough to cover costs of debit card processing and would hurt consumers, a Florida credit union official told newspress.com Sunday. In an article titled, “Debit card use may soon come with a cost,” Linda Darling, chief financial officer at Suncoast Schools FCU in Tampa, Fla., told the newspaper the idea that if merchants are charged less for interchange, they will have lower costs and then offer lower prices hasn’t happened in other countries where debit card interchange fees were reduced. Although the $5 billion-asset Suncoast isn’t against changes in the manner in which interchange fees are assessed, the 12-cent cap per transaction isn’t sufficient for financial institutions to cover costs of debit card processing, Darling added. Consumers already are being harmed because big banks--in anticipation of interchange fee changes--now are charging for checking accounts that used to be free, Darling told the paper. Furthermore, if fees are capped, Suncoast Schools FCU also will be forced to examine changes in free-checking account services it offers members, Darling added. Suncoast has begun a campaign to get its members to call Congress about the matter, she said. To read, the article, 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.

Texas CU receives praise for exceptional service

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EL PASO, Texas (5/11/11)--One Source FCU in El Paso, Texas, provided a level of service that went far above what one would expect from a financial institution, said an El Paso couple who praised the credit union, according to the Texas Credit Union League. “We’ve been a member/owner at One Source for more than 30 years and we simply couldn’t imagine going anywhere else,” said El Paso resident Eddie Rojas. “Over the years our credit union has provided us with a level of personalized service that I don’t believe you can find just anywhere. They’ve more than earned our trust and loyalty.” Rojas mentioned an incident in which he visited the $81.5 million-asset credit union to conduct a simple transaction. While in the lobby, he began having a conversation with a member service representative--a conversation that was overheard by the credit union’s President/CEO, Bob Peterson. “Mr. Peterson apparently heard my voice from inside his office, and he stopped what he was doing to come out into the lobby and greet me,” recalls Rojas. “He said to me, ‘Eddie, I thought I heard your voice.’ Knowing that the CEO of that institution not only knew me by name, but also recognized my voice was an amazing feeling.” “We’ve heard horror stories from some of our friends who have their money at a bank, and we always ask them why they haven’t moved their money to a credit union,” added Norma Rojas. “In the early years as a young married couple, we banked at other financial institutions, but once we joined the credit union, we knew we could never do business elsewhere. The staff at One Source makes us feel like we own the place.” Members do in fact ‘own the place’ at a financial cooperative, said Dick Ensweiler, president/CEO of the Texas league. “Credit unions offer many of the same products and services consumers will find at a bank, but that is where the similarities end,” he explained. “Credit unions are locally owned by the members they serve and are governed by a voluntary board of directors--people from your community, elected by you.” The credit union community has a strong presence in El Paso, said the Texas league. Seventy percent of the population has accounts at one or more of the 11 credit unions with a presence in El Paso. Credit unions have historically rated favorably in the areas of service, competitive rates and low fees, said Harriet May, president/CEO of El Paso-based GECU and chair of the Credit Union National Association. “Credit unions aren’t in the business of maximizing profits,” May said. “We open our doors every day knowing and understanding that our sole purpose for existing is to help improve the financial conditions of our members. Without question, credit unions are mission-driven, not profit-driven.”

Illinois league holds annual legislative day

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NAPERVILLE, Ill. (5/11/11)--The Illinois Credit Union League’s (ICUL) annual legislative day will be held today in Springfield, with State Treasurer Dan Rutherford scheduled to keynote the event. Rutherford, a strong legislative supporter of credit unions, will discuss the importance of political involvement and the key roles credit unions play in the process. Other highlights will include:
* A regulatory update featuring a panel of officials who will provide an update on Illinois’ state-chartered credit unions. National Credit Union Administration Board Member Michael Fryzel will discuss to federal issues. * A briefing from ICUL staff members Steve Olson, executive vice president, general counsel and chief operating officer, and Keith Sias, vice president of state governmental affairs, who will update participants on issues critical to credit unions. * State Capitol visits, where event participants will be shuttled to the Capitol to personally call on their lawmakers. Friday is the deadline to pass bills out of their original chamber, according to the Illinois General Assembly’s schedule. * A legislative reception to cap off the event. All 177 lawmakers from both sides of the aisle, constitutional officers and other dignitaries have been invited.
The Illinois General Assembly is scheduled to adjourn its Spring legislative session on May 31.

New Mexico CUs Consumers cant afford interchange proposal

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ALBUQUERQUE, N.M. (5/11/11)--The interchange proposal will ultimately cost consumers more money, the opposite of what Congress hoped to achieve with the law, a representative from the Credit Union Association of New Mexico recently told the Albuquerque Journal. Although none of New Mexico’s 49 member-owned credit unions come close to the $10 billion in assets that the proposal technically exempts, credit unions are concerned that large processors will implement a single-fee structure that doesn’t differentiate between large and small financial institutions, Sylvia Lyon, president of the association, told the Journal (May 8). Lyon and Jerry Walker, president of New Mexico’s Independent Community Bankers Association, estimated the proposal would reduce fees credit unions collect for debit card use by 70% to 80%. The revenue shortfall will have to be made up somewhere, Lyon said, and that is likely to happen through new fees for debit cards for members. 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.

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.
 

Whats new in INews NowI Tweet Facebook buttons

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MADISON, Wis. (5/6/11)--Notice anything new in News Now today? Hint: Look at the bottom of this article and you will see two brand new buttons--Tweet and Facebook's Share--now live and ready to use. Credit Union National Association (CUNA) Vice President of Editorial Communications Lisa McCue said of the change, "As our readers know, CUNA's News Now is always on the lookout for innovations that makes sense for our readers and bring them the news they need in delivery formats they want. We closely monitor and analyze how widely used News Now's interactive e-mail and print button functions are. We also have watched the rapid growth in the number of readers who subscribe to and disseminate News Now's "Live Wire" tweets. "Seeing how popular those functions have proven to be, CUNA's Web Services department has stepped up News Now's interactive features another notch, so now our readers can send its articles in their tweets or share them with Facebook friends," McCue said. "This is a direct outgrowth of the high use of our interactive features, and of CUNA's desires to remain the premier source of news for credit unions." The buttons appear at the end of each article.

Wis. regulator at league meeting CUs performing well

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MADISON, Wis. (5/9/11)--Credit unions in Wisconsin continue to perform well, according to a Wisconsin regulator speaking at the Wisconsin Credit Union League's 77th Annual Convention and Exposition Friday in the Wisconsin Dells. Peter Bildsten, secretary of the state Department of Financial Institutions (DFI), reported on the positive preliminary first quarter results of the performance by the state's credit unions, according to a DFI press release. "Overall, Wisconsin credit unions continue to perform well based on the preliminary financial results filed as of March 31, 2011," said Bildsten. He noted that total assets increased to $21.3 billion, up from $20.7 billion--a 2.0% increase over year end 2010. The net income ratio for the state's credit unions remained steady at 0.53%. Net worth rose by $42 million, resulting in a capital adequacy ratio of 9.83%. Also Friday, Ginger Larson, director for the Office of Credit Unions, led a "Meet the Regulator" breakout session that addressed current regulatory and compliance issues affecting credit unions at the state and national level. Larson also participated in an Ask the Experts session at the end of the day.

Disaster-fund donations from CU community total 55K

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MADISON, Wis., and WASHINGTON (5/9/11)--Credit unions and their organizations continue to rally behind colleagues who suffered losses during the April 27 tornadoes that swept seven states in the South. As of Friday, donations raised through CUAid.coop, the movement's online disaster relief fund, totaled at least $55,000, said the National Credit Union Foundation (NCUF). Among the new donors providing funds to assist credit unions and their employees in the aftermath of the storms is CUNA Strategic Services (CSS), which donated $10,000, and the American Association of Credit Union Leagues (AACUL), which contributed $2,500 toward the efforts. "Credit unions, their staff and families in these hard-hit areas are still struggling; we want to help them get back on their feet," said Credit Union National Association (CUNA) President/CEO Bill Cheney, who is also CEO of CSS. CSS partners with key vendors to provide products and services to credit unions. "Our desire is to see the damaged credit unions and the people who run them recover as soon as possible," said Brett Thompson, AACUL chairman and president/CEO of the Wisconsin Credit Union League. Credit unions in every state can donate through CUAid.coop, a secured website that accepts credit cards and wire transfers. NCUF will coordinate with the credit union leagues across the southern part of the country to distribute money efficiently to credit union employees and members in the affected areas, said NCUF. In addition to supporting the relief efforts directly for credit unions and their employees, credit unions are finding a variety of other ways to help. Huntsville, Ala.-based Redstone FCU, which had two branches affected by the storms, began trucking in food and supplies to several smaller communities hit hard by tornadoes. It also planned a cookoff this past weekend to feed 1,000 survivors and relief workers and volunteers. Tyndall FCU, based in Panama City, Fla., presented a $1,000 check to American Red Cross to help victims of the tornadoes in Alabama. Representatives from the $1 billion asset credit union's Dothan, Ala., branch also donated cases of bottled water to help in the relief efforts. "As part of the Alabama community, we felt it was important to offer assistance to the residents in the areas devastated by the tornadoes," said Jim Warren, president/CEO of Tyndall. "While our headquarters may be in the Florida Panhandle, we have branches in Dothan, Mobile, and Spanish Fort, Ala., as well, and we wanted to show our support. Living in the southeast, we have seen the destruction such storms can do, and we wanted to do our part to help." For more information about contributing to CUAid.coop, use the link.

Riverset CU guest blogger addresses free checking fees

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PITTSBURGH (5/9/11)--Lisa Florian, director of business development for Riverset CU, Pittsburgh, is author of a blog that warns consumers about so-called “free” checking accounts that contain hidden fees. Florian is a guest blogger for the local Regional Internship Center in Pittsburgh, and posted a blog Tuesday titled “Free Checking Account? Watch Out for Hidden Fees” (Life is a Highway May 6). “You may or may not be aware of a number of regulations within the financial industry that have been passed over the last year or so, which have impacted financial institutions’ ‘lucrative’ stream of fee income as it pertains to overdraft fees,” Florian wrote. “So, the days of FREE checking now seem to be morphing into the days of free checking with fine print and hidden fees. The new regs have forced institutions to find alternative ways to make up for the lost income and free checking has become the target. “A truly free checking account is one with no minimum balance and no monthly fees--or any other hidden fees, period,” she continued, adding, “The bottom line is--read the fine print and be smart with your money so you are not hit with hidden fees.” To read the blog, use the link.

Maine interchange bill stalls in committee

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PORTLAND, Maine. (5/9/11)--The Maine Legislature’s Insurance and Financial Services (IFS) Committee voted unanimously to “ought not to pass” on the state’s interchange bill on April 29, said the Maine Credit Union League. LD 1251--An Act To Prevent Credit Card Company Unfair Trade Practices--would have prohibited electronic payment systems from imposing certain restrictions on merchants relating to the acceptance of credit cards, charge cards, debit cards or other stored value cards as payment for goods and services (Weekly Update May 6). Since the bill was introduced, the league took an active role in opposing the legislation. The league coordinated a call to action by credit unions located within the districts of IFS committee members, stating opposition to the bill. Maine credit unions responded by sending 500 messages to the committee. The committee tabled a vote April 8 on the bill and directed interested parties to participate in a stakeholders’ group meeting (News Now April 18). The league and two credit union representatives participated in the stakeholders meeting, testified at another public hearing on the bill, and communicated directly with legislators on the negative impact the bill would have on Maine credit unions and their members. “We provided the committee with accurate information that was helpful in clearing up much of the misunderstanding about what this bill would really do,” said league President John Murphy. “That information and strategy proved important when the committee took its vote. We appreciate the involvement of our governmental affairs committee and credit unions on this bill.” 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.

Mutual Savings CU turnaround faster than expected

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BIRMINGHAM, Ala. (5/9/11)--Mutual Savings CU, Birmingham Ala., has rebounded under the leadership of president/CEO Doug Key after being placed in conservatorship in 2009. The credit union had experienced more than $5 million in losses from bad business loans, prompting the state credit union administrator to seize its remaining assets, and replace the CEO and board of directors (The Birmingham News via al.com May 6). Key had served as an outside lawyer for the credit union before taking over its leadership in October 2009. Among Key’s first priorities was problem business loans, the articles said. With the support of the Alabama Credit Union Administration, Mutual Savings CU took aggressive write-downs on much of the portfolio, Sonja Purvis, Mutual Savings’ chief marketing officer and senior vice president, told the newspaper. Expenses also were reduced by $1.5 million. By last summer, Mutual Savings CU had climbed back to solvency, just a year after it had been placed under conservatorship. The credit union reported a profit of more than $700,000 for 2010. With a $169 million in assets, Mutual Savings CU remained profitable for the first quarter 2011. Another turnaround within the credit union was employee morale. Employees were nervous when the state took over the credit union, Purvis told The News, and they faced budget cuts under the conservatorship. Employees bought into a morale-building campaign that focused on the mythical Phoenix, the bird reborn from its own ashes. Key and Purvis even designed a pin to inspire employees. The key to keeping employees engaged was regular detailed communication on how the credit union would move forward and how the work they did was integral to turning those plans into reality, Purvis told the publication.

CUs in Vermont Peru sign partnership agreement

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SOUTH BURLINGTON, Vt. (5/9/11)--Armando Ouchida, CEO of Peru’s Pacifico CU (Cooperativa de Ahorro y Credito Pacifico), traveled to Vermont last week to sign a World Council of Credit Unions (WOCCU) international partnership agreement with NorthCountry FCU, South Burlington, Vt.
Peru's Pacifico CU last week signed a World Council of Credit Unions (WOCCU) international partnership agreement with NorthCountry FCU, South Burlington, Vt. Seated, from left, are: NorthCountry FCU (NCFCU) Board Chair Kathleen Sweeten; NCFCU CEO John Benoit; Armando Ouchida, CEO of Peru’s Pacifico CU; and WOCCU International Partnerships Manager Victor Miguel Corro. Standing, from left, are: NCFCU Vice President of Operations Bob Cowie; Vaughn Carney, NCFCU executive vice president; Association of Vermont Credit Unions (AVCU) Director Bob Morgan; NCFCU Training Specialist Mary McEwen; and AVCU President Joe Bergeron. (Photo provided by the Association of Vermont Credit Unions)
The peer-to-peer relationship is the third of its kind in the state and enhances the partnership between the Association of Vermont Credit Unions (AVCU) and its Peruvian counterpart, the Federacion Nacional de Cooperativas de Ahorro y Credito del Peru, AVCU said (Newslines Express May 6). During his visit, Ouchida met with NorthCountry CEO John Benoit and department managers and learned about the credit union’s lending, finance, technology, operations, and marketing departments. Ouchida and Benoit traveled to Montpelier, where they toured NorthCountry branches, then had lunch with NorthCountry Director Vaughn Carney and Tom Candon, deputy commissioner of Vermont’s Department of Banking, Insurance, Securities and Health Care Administration, which regulates state-chartered credit unions. The two also met with AVCU President Joe Bergeron and Bernie Isabelle, CEO of Vermont FCU, Burlington. Vermont CU has a WOCCU international partnership agreement with a Peru credit union. Pacifico and NorthCountry are working to arrange a visit to Peru for NorthCountry personnel in October.

Philly bans questions about criminal backgrounds

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HARRISBURG, PA. (5/9/11)--A new Philadelphia ordinance restricts employers with more than 10 employees--including credit unions--from inquiring into potential employees' arrests and convictions. The ordinance, which takes effect July 12, prohibits an employer from asking about arrests or criminal charges that are not pending against the individual or did not result in an arrest. The limitation applies during the application process and any time after, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway May 6). Credit unions also won’t be permitted during the application process to ask an individual to disclose any criminal convictions. The application process begins when an applicant inquires about the employment and ends when an employer has accepted an employment application. “This legislation is intended to give the individual with a criminal record an opportunity to be judged on his or her own merit during the submission of the application and at least until the completion of one interview,” a preamble to the ordinance states. “For credit unions with employees in the city of Philadelphia, it might be wise to take a look at your employment applications and questions about criminal history,” advised Rick Wargo, PCUA general counsel. “The ordinance does not compel hiring individuals who have a background that is inconsistent with working at a credit union. But, credit unions may have to exercise some care through the application process and first interview.” Federal and state-chartered credit unions have a specific statutory duty to provide for bond or fidelity coverage for officers and employees who have custody of or handle funds, PCUA said. The Philadelphia ordinance has an exemption provision that appears to render the law inoperable if another applicable law specifically authorizes some of the practices barred by the ordinance, Wargo said. “If an individual is not bondable, they cannot work at the credit union,” Wargo said. “We’re doing some additional analysis to square the bond coverage requirements of the Credit Union Code and Federal Credit Union Act and this new Philadelphia Ordinance and its exemption language.”

100K granted to R.I. CU to aid homebuyers

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WESTERLY, R.I. (5/9/11)--Westerly (R.I.) Community CU Thursday announced it received a $100,000 grant to help low- and moderate-income households with home ownership. A Federal Home Loan Bank (FHLB) approved the $213 million asset credit union to take part in its Equity Builder program, said Meg Sisco, Westerly vice president of marketing (The Day May 6). The Washington, D.C-based FHLB system was created by Congress. FHLBs nationwide are among the biggest source of funding for mortgage lending. Through the home-ownership program, the credit union can award up to $10,000 per eligible family. The awards are provided on a first-come, first-served basis until the funding is gone, the newspaper said. Households that earn 80% of the area’s median income are eligible to participate. Through the program, the credit union said it will offer reduced interest rates for first-time borrowers, and would reduce closing costs by $575.

CU System briefs (05/06/2011)

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* HOUSTON (5/9/11)--Twelve Houston area credit unions demonstrated
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the strength of the cooperative spirit with an April 16th car sale organized by Devon Ader, group car sales manager for Enterprise Car Sales, and James Tuggle, CEO of Transtar FCU. The group closed 25 loans that day. "Even though there may have been some overlap in fields of membership, they worked as a team to market this event to their individual members through direct mail, inserts, lobby signage and even Facebook to grow their loan business," said Ader. CEOs' commitment to attending the event paid off. Tony Black, president of BCM FCU, worked with a member who "wouldn't have financed on the spot if I had not been there to work with him directly and structure a loan that suited his situation," Black said. Participating were SPCO, Transtar, Texas Bay Area, Shared Resources, Houston Highway, BCM, Southwest Financial, Union Fidelity, Lubrizol, Port Terminal, New Light and United Community credit unions. Pictured are Raymond Garcia, member of Union Fidelity FCU, and Enterprise employee Keith Malone. (Photo provided by Transtar FCU) … * RALEIGH, N.C.(5/9/11)--The board of North Carolina's State Employees' CU held a "Volunteer Meet and Greet" for the credit union's Advisory Board and Loan Review Committee members serving in the Raleigh area. More than 200 volunteers gathered to learn about the credit union's commitment to providing new opportunities to assist members with their financial needs. Topics included new products and enhancements to existing products offered by SECU, SECU's assistance to members experiencing job loss, and member-funded community projects through the SECU Foundation. More than 3,000 volunteers serve on local advisory boards at SECU's 237 locations across the state. The volunteers serve as a voice for more than 1.6 million members to communicate member ideas, address issues and offer products and services recommendations to the board … * RALEIGH, N.C. (5/9/11)--Ann R. Suggs, former chairman of the board at Raleigh-based Local Government FCU died on April 23, according to the North Carolina Credit Union League (Weekly Update May 6). She was 64. Suggs served in every official capacity on the LGFCU board. She was a former chairman, vice chairman, treasurer and secretary of the board. She chaired the Asset Liability Management Committee, Operations Management Committee, and the Nominating Committee. She served on the Loan Review Committee prior to joining the board in 1992 … * WACO, Texas (5/9/11)--Brenda Sue Osterholtz, former president/manager of Waco (Texas) FCU, died Thursday in Waco. She was 65. Osterholtz retired from the credit union in 2003. She is survived by a daughter and son in law. Services were held Friday (Waco Tribune and LoneStar Leaguer May 6) …

No vote on deposit insurance levy says Irish league

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BELFAST (5/6/11)--The Irish League of Credit Unions did not present its proposal to add a special levy on member credit unions to boost its deposit protection fund during its annual meeting in Belfast last weekend. The league had planned to raise an additional $8.9 million for its Savings Protection Scheme (SPS), which provides emergency funding to ailing member credit unions (Irish Independent May 5). The movement's fund dropped to $109.8 million from $169.2 million after it provided financial help to 13 troubled credit unions. Since then, another seven credit unions have sought help from the fund. (All amounts reported are in U.S. dollars.) The motion was not presented at the meeting, a league spokesman told the newspaper. The league is in ongoing discussions with the Registrar for Credit Unions at Ireland's Central Bank about the possibility of the Central Bank taking over the stabilization fund and placing it under statutory authority.

Two mergers announced in Pa. and Minn.

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STATE COLLEGE, Pa., and PLYMOUTH, Minn. (5/6/11)--Four credit unions--a pair in Pennsylvania and another pair in Minnesota--have announced intentions to merge. In Pennsylvania, $66 million asset SPE FCU, State College, Pa., will merge with Huntingdon County FCU (HCFCU), a $12 million asset credit union in Huntingdon, the credit unions announced Friday (Centre Daily Times May 5). SPE has 8,500 members, and HCFCU has about 2,200 members. HCFCU had pursued a partnership that would provide members access to more products and services at competitive prices. It also sought reassurance that all its employees would be retained by the surviving credit union. The boards at both credit unions unanimously voted to accept SPEFCU's proposal to merge. Earlier this year, SPEFCU fulfilled a regulatory requirement by obtaining a community charter for Huntingdon County. In Plymouth, Minn., TruStone Financial FCU, a $664 million asset credit union, announced Wednesday an agreement with Ukrainian CU, a $6 million asset credit union based in Minneapolis, to merge operations, pending approval from the National Credit Union Administration this summer. The boards of both credit unions unanimously approved the merger at their last meeting. Both credit unions will operate under the TruStone Financial FCU banner. Ukrainian CU President Oksana Bryn noted that the merger will benefit both credit unions' members. "We will be able to expand our product line, reduce costs and further strengthen our financial value and relationship," Bryn said, adding that TruStone will be able to serve its members in Northeast Minneapolis. Bryn will stay on as branch manager of the Northeast Minneapolis location. TruStone, founded in 1939 as Teacher FCU, will have eight branch locations in the Twin Cities area serving nearly 57,000 members throughout Minnesota. Ukrainian CU, founded in 1968 to serve the Ukrainian community, serves more than 1,245 members.

Equifax report Credit scores are up

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ATLANTA (5/6/11)--The U.S. credit market is stabilizing and growing, and the nation's average credit score is increasing, according to Equifax's monthly National Credit Trends Report for March. That means delinquency rates are improving across the board, and more people will meet eligibility requirements for loans, said Equifax in a press release (PRNewswire May 4). That--and Equifax's finding that auto loans are up 23% over last year--would be good news for credit unions, whose members have slowed borrowing as they pay off debt. Auto loans traditionally have been bread-and-butter loans for credit unions. During the recession, however, mortgage lending and refinancing took on heavier portions of credit unions' loan portfolios. In addition to the auto loan increase, sustained new growth is underway in these markets having year-over-year increases in the number of loans: loans for bankcards are up 14%; consumer finance, up 5%; and home equity lines of credit, up 9%, said the business credit intelligence company. "Across multiple loan products, we are clearly seeing indicators of sustained credit growth--most notably within automobile finance and bankcard originations," said Michael Koukounas, senior vice president-special client services for Equifax. "Consumer behavior is now fueling much of this improved loan performance as borrowers are more aggressively paying off their outstanding debts, which is positively impacting their credit risk scores and making them more attractive to lenders. If this trend continues, I would expect to see a further loosening of available credit," Koukounas said. Consumers continue to more consistently pay credit bills on time while simultaneously paying down existing debit, resulting in an increase in the average credit risk score nationally, said the company. "Although credit available today represents about half of pre-recession levels in 2006, it is steadily increasing, with 2010 levels exceeding 2009," said Equifax. That trend is expected to continue for this year. Month-to-date new credit for 2011 totaled $51 billion--13% more than the $45 billion for the same period in 2010. Other findings:
* Auto loans: Average loan amounts generated through captive finance companies were up 88% over 2009 levels; * First mortgages: Prime originations (with Equifax risk scores of 700 or more) represented more than 75% of all first mortgage originations; * Consumer loans: Installment loans accounted for 33.9% of total consumer loans, a five-year high; * Bankcards: The number of new bankcards issued increased more than 14% over 2010 levels; * Retail card: Retail card originations notably increased for non-prime consumers (having Equifax risk scores less than 660); * Home equity: Data indicated a considerable shift toward prime borrowers--those with the lowest risk scores; and * Student loans: The average student loan amount declined in response to regulatory changes, but data indicate students are seeking supplemental credit to finance education.

CUs bumpy system upgrade a lesson for all

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BAKERSFIELD, Calif. (5/6/11)--Credit union employees--from CEOs to member service representatives--fear system conversions, for a lot of different reasons. Kern Schools FCU’s experience this week is Exhibit No. 1. Bakersfield, Calif.-based Kern Schools FCU began what CEO Steve Renock termed “a major, major conversion” Friday, changing over its core processing, online banking and loan servicing systems. The credit union was closed during its usual Saturday morning hours, and members couldn’t log on to their online accounts through Sunday. The credit union was scheduled to be closed on Monday, but the technical end of the conversion went well enough for Kern Schools to open its doors Monday morning, just 15 minutes later than usual. Then things began to unravel. The credit union was swamped with calls from members with problems logging into their accounts. Long lines formed at branches. A local television station did a story with outraged members who couldn’t access their accounts or speak with credit union representatives. Renock didn’t speak with the television news crew on camera, but he told News Now he believes the problems were somewhat overstated. First, he said there were no issues with data integrity or security, always chief concerns in any system conversion. Second, he estimates that 40% to 50% of the calls were related to password or username issues. “People were seeing things that they hadn’t seen before,” Renock said. “It was more a matter of familiarity. They were getting locked out of their accounts.” As examples, he said members weren’t sure what to use as their user names, which they didn’t have with the previous system, and the names of joint account holders are now listed on accounts--a feature that members requested. Part of the problem was members had grown very used to the old system. The credit union hadn’t done a conversion in 20 years, said Renock. “It was old,” Renock said. “We had to run so many patches to offer members all the services they need today. And it was expensive. This change will improve our expense ratio. And at end of the day, I think the members are going to like it better because we’ll be able to provide more services to them.” The credit union worked with its core system provider Fiserv to communicate the changeover with members, offering information online, including tutorials, and creating a 10-page brochure, Renock said. Renock said he anticipated some confusion among members--the credit union was fully staffed and no employees were allowed to take vacation during the conversion--but not to the extent that it occurred. “Could we have communicated better? Probably,” said Renock. “We could have explained the new system in more ways, in more places. We worked jointly with Fiserv who have been through this many more times we have, and they’ve been great through all of this. But right now, we’re taking our lumps.”

NEFCU college financing webinar broadcast now available

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WESTBURY, N.Y. (5/6/11)--NEFCU, a $1.56 billion asset, Westbury, N.Y.-based credit union, partnered with Hofstra University to sponsor a college financing webinar moderated by Newsday this month. The one-hour webinar, “Get Them There! How to Finance College,” provided information on college-financing subjects that included: Finding scholarships, filling the gap between traditional aid and the cost of college, working with financial-aid offices, avoiding over-borrowing, and estimating the true cost of a college education. The webinar ended with a question-and-answer segment. John Beneri, senior vice president of lending, represented NEFCU on the panel of financial experts, answering questions from webinar participants. The credit union considered the webinar an extension of the education-focused products and services it provides. “That’s a big part of why NEFCU was eager to co-sponsor this event,” Beneri said. “With the entire college financing process being so involved, it’s easy to get overwhelmed and miss some great funding opportunities.” Those who missed the webinar can view it for free online until July 7. Use the link.

CUNA Mutual net income up 71

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MADISON, Wis. (5/6/11)--CUNA Mutual Group’s operating revenues grew more than 3% and net income increased 71% in 2010, according to the company’s 2010 annual report. That performance led to an affirmation of CUNA Mutual’s financial strength and an outlook upgrade by a ratings agency. The company’s bottom line was bolstered by its diversification strategy, the company said. CUNA Mutual’s crop insurance business accounted for almost half of the operating revenue growth in 2010 to offset challenges credit union product lines faced due to poor economic conditions. Meanwhile, operating performance and lower investment impairments propelled net income to $87 million--up from $51 million in 2009. “Despite challenging economic conditions, we grew our financial strength by increasing our GAAP (Generally Accepted Accounting Principles) capital to nearly $1.9 billion, an increase of more than 50% compared to our capital position at the end of 2008,” said Jeff Post, president/CEO of CUNA Mutual. The company increased its support to the credit union system by $6 million. CUNA Mutual also disbursed more than $1.3 billion in benefits to U.S. credit unions and policyholders through claims paid and non-interest income. Though 2011 plans call for modest revenue growth, CUNA Mutual said it will continue to invest in its future with credit unions by increasing financial resources to its lending-related products and consumer businesses. CUNA Mutual said it also will be looking for growth opportunities through acquisitions, similar to the purchases of crop insurer ProAg and retirement plan provider CPI Qualified Plan Consultants in 2009. To access CUNA Mutual’s annual report, use the link. The solid 2010 performance contributed to financial ratings agency A.M. Best’s affirmation of CUNA Mutual Group’s financial strength rating at “A” (Excellent). The agency has returned the company’s outlook to stable. A.M. Best cited CUNA Mutual’s improvement in the overall quality of its balance sheet. The “A” rating applies to the principal companies of CUNA Mutual Group--CUNA Mutual Insurance Society, a life and health insurer, and CUMIS Insurance Society, Inc., a property and casualty subsidiary. The “A” rating is the third highest rating of 16 categories of ratings A.M. Best issues. “During these difficult economic times, CUNA Mutual has worked hard to keep premiums down, deliver greater value to credit unions and their members through our products and services, and still grow our company’s financial strength,” Post said. A.M. Best also affirmed the “A-” (Excellent) financial strength ratings of Producers Agriculture Insurance Company and Producers Lloyds Insurance Company (ProAg) with a stable outlook. A.M. Best also noted ProAg’s historical operating profitability and strong agency relations. The financial strength rating of MEMBERS Life, a dormant downstream life company that is not core to CUNA Mutual’s operations, was affirmed at B++ (Good) with a stable outlook.

CDCU leader Eakes named Ford Foundation Visionary

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NEW YORK (5/6/11)--Long-time community development credit union (CDCU) leader Martin Eakes, has been named a Ford Foundation Visionary, a new award that recognizes innovators whose work provides economic opportunities for marginalized people worldwide. Eakes is the founder of the Durham, N.C.-based Self-Help CU, the Center for Community Self-Help, the consumer advocacy Center for Responsible Lending, and most recently, Self-Help FCU, Oakland, Calif. Visionary Awards seek to raise the profile of leaders whose efforts on the frontlines of key social issues offer pathways to improved economic opportunities and expanded political and social participation for millions of underserved people worldwide, according to the Ford Foundation. Cliff Rosenthal, president/CEO of the National Federation of Community Development Credit Unions, commended the Ford Foundation on their selection of Eakes. “Martin has been a long-time member, colleague and ally of the federation,” he said, “What he and his staff have built in North Carolina has grown into one of the most sophisticated community development financial institutions in the nation. “With community development credit unions operating on both coasts; a multi-billion dollar affordable mortgage secondary market; and a respected consumer advocacy arm helping to combat insidious predatory lenders nationwide, he has single-handedly done more for low-income people in 30 years than many of us could hope to accomplish in a lifetime,” he added. Self-Help CU, the CDCU established in 1980, reaches low-income families underserved by conventional financial institutions. Self-Help has provided nearly $6 billion in financing to more than 60,000 homebuyers, small businesses and nonprofits, and serves more than 25,000 mostly low-income families through seven retail credit unions.

Caribbean CU succeeds with non-traditional services

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MAIMON, Dominican Republic (5/6/11)--Cooperativa de Ahorros y Créditos Maimón Inc. celebrated its 20th year of service last week with workshops, social gatherings and sporting events in the mountainous central valley town of Maimón, Dominican Republic. The credit union has flourished by offering non-traditional services to its members. The credit union has not only provided financial services, it has changed the social fabric of everyday life, said the World Council of Credit Unions (WOCCU). The credit union has established itself in the community by adding value through more than just financial services, offering vocational training programs to hundreds of young adults, fortifying municipal water systems, providing two ambulances and offering the only comprehensive funeral services in town.
Click to view larger image Visitors from the Wisconsin Credit Union League gather outside Maimón credit union’s main branch office in the Dominican Republic. The twin pines, a widely used symbol of cooperatives throughout Latin America and other parts of the world, is prominently displayed outside.
Click to view larger image Wisconsin Credit Union League President/CEO, Brett Thompson (left), accompanies Virginio Rafael Gerardo (right), president/CEO of World Council of Credit Unions’ (WOCCU) member organization in the Dominican Republic, on a visit to Maimón credit union through WOCCU’s International Partnerships Program. (Photos provided by World Council of Credit Unions)
“Maimón credit union has gone far above and beyond the call of duty in terms of service to members and the community,” said Pete Crear, WOCCU president/CEO, who along with the WOCCU board of directors visited the credit union in April. “This credit union provides a shining example of how non-traditional services can play a pivotal role in community development and improve the lives of members.” The credit union’s investments in the community have impacted on the quality of life there. It provides vocational training to young people who might not otherwise have the means to prepare to enter the work force or start their own businesses. It built a water tower to bring running water to residents. It owns and operates a funeral home adjacent to its offices and has a hearse. A funeral insurance plan for members and their families helps ease the financial and logistical burden of a death so the family can focus on mourning. Through four branch offices in the Monseñor Nouel province, Maimón also offers financial products and services, including youth savings and financial literacy programs, a savings incentive program and supplemental group health insurance. Its 43,000 members represent more than 60% of local residents, and assets total about US$52 million. It is currently planning a fifth branch office for the capital city of Santo Domingo. “What makes Maimón credit union truly great is its social engagement to benefit the community,” said Ramón Antonio Diaz Guzmán, Maimón credit union board president. “All types of people in the region, especially those most in need, come to our institution to address small but systemic problems. Maimón credit union will continue to leave footprints in the hearts of our members and the community.” Virginio Rafael Gerardo, president/CEO of Asociación de Instituciones Rurales de Ahorro y Crédito (AIRAC), WOCCU’s member organization in the Dominican Republic, organized the board of directors’ visit to the credit union. He said Maimon’s level of discipline makes it a top performer in the indicators AIRAC measures. It was recently recognized as “Credit Union of the Year.” “For [AIRAC], Maimón credit union has a philosophical importance because it demonstrates the true meaning of the credit union difference through its ability to address the basic needs of the community,” Gerardo said. “This helps show government officials that credit unions are a viable resource for human development, and they can take that into consideration when determining regulatory treatment.” AIRAC maintains connections within the global credit union movement through a partnership with the Wisconsin Credit Union League (WCUL), facilitated by WOCCU’s International Partnerships Program. During a 2009 visit, representatives from AIRAC, WCUL and WOCCU met with the country’s central bank, the Superintendency of Banks and the Institute for Cooperatives to work on modernizing regulations and oversight procedures to better address the country’s credit union structure. Pedro Silverio, CEO of the Central Bank of the Dominican Republic, asked AIRAC to submit comments to the current bill before it was introduced to Congress later that year. Brett Thompson, WCUL president/CEO, worked with the international team to draft comments for submission. Through their combined efforts, AIRAC influenced regulatory change for its country’s credit unions. Thompson and his WCUL colleagues also visited Maimón credit union and saw how the credit union served more than just the financial needs of its members, going beyond its membership to invest in community-wide infrastructure. “Maimón is engaged in possibly the purest form of credit unionism that one could imagine and serves as a great reminder to those of us in the U.S. of what our mission is all about,” Thompson said. WCUL is planning another visit to the Dominican Republic in October to run an advocacy and regulatory education program for credit unions. AIRAC will facilitate several week-long study tours in November for member credit union managers to work on risk management and loan processing issues at Wisconsin credit unions.

ICU Foundation awards 67190 in grants scholarships

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NAPERVILLE, Ill. (5/6/11)--The Illinois Credit Union Foundation recently awarded $67,190 in grants and scholarships to credit unions in the state. The foundation awarded $18,000 in small credit union development (SCUD) grants to 11 credit unions. The SCUD grants will be used for computer equipment, software updates, new printers, and a security system upgrade. The recipients were:
* Alton Bell Community CU, Alton; *C&NW Proviso CU, Northlake; *District 123 FCU, Oak Lawn; *Elgin Mental Health Center CU, Elgin; *Holy Family Oglesby CU, Oglesby; *IBEW Local 146 CU, Decatur; *Motor Coach Employees CU, East St. Louis; *Oak Lawn Municipal Employees CU, Oak Lawn; *Parish Members CU, Metamora; *School District #9 CU, Granite City; and *Urbana Municipal Employees CU, Urbana.
The foundation also awarded $2,000 in community service grants. The program is designed to encourage and reward chapter or credit union participation in local community projects. One chapter and three credit unions received a community service grant. They were: Danville Area Chapter, Milledgeville Community CU, Oak Lawn Municipal Employees CU, and Streator Onized CU, Streator. Armstrong Preferred Members CU, Bourbonnais, received a marketing and business development grant for $2,500. The program was established in 2006 to help credit unions with assets of up to $30 million to start or expand outreach efforts. The maximum grant award is $5,000 per credit union per year. Two credit unions received financial independence and revitalization effort (FIRE) grants totaling $3,500. The FIRE program helps credit unions provide credit and financial services to residents and businesses in low-income and underserved areas of Illinois. Community Plus FCU, Rantoul, and Sherwin Williams ECU, South Holland, used their FIRE grants to partner with the Center for Economic Progress to continue the Volunteer Income Tax Assistance program in their local communities. The foundation also awarded $41,190 in scholarships to 41 credit unions. Scholarships will enable recipients to attend ICUL educational opportunities and Credit Union National Association schools. There are two more grant request deadlines during 2011: July 31 and Oct. 31. Scholarships are reviewed on an ongoing basis while funds last. Online and downloadable grant request forms are available via the league’s website. Eligibility is limited to Illinois credit unions and chapters.

Study Consumers want human help in learning new technology

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ATLANTA (5/6/11)--Four out of 10 consumers surveyed would prefer to learn about new financial services technology by talking with someone at their credit union or bank, rather than learning it on their own, says a new study unveiled at First Data's Leadership Summit 2011. While financial institutions try to keep up with the latest banking innovations, more than a third of their member/customers surveyed said that technology advances too quickly for them (Business Wire May 5). The study, conducted by First Data, an electronic commerce and payment processing provider, and Market Strategies International, a global market research consultancy, reviewed consumer characteristics and their attitudes toward and use of technology such as online and mobile banking. It aimed to help financial institutions better understand which investments in technology will drive increased loyalty and transaction frequency among a wide variety of member/customers. It also identified trends about retail banking customers' perceptions and relationships with their financial institutions. "Our goal is to provide real, actionable data to help our financial institution clients develop focused technology plans," said Larry Drury, senior vice president, Global Marketing, at First Data. "These results will help our clients strike the right balance between technology and personal relationships regarding their retail banking customers." The study's findings included:
* Fifteen percent of consumers surveyed currently use mobile banking, and 3% indicated they intend to start using the feature in the next 12 months. Roughly 47% said they are familiar with the service but are not using it. That indicated that consumer education still is needed regarding the benefits of mobile banking, researchers said. * While two-thirds of consumers are familiar with account alerts, 37% of banked consumers currently use them, indicating that credit unions and banks may need to shift some of their focus from awareness to activation. * Six in 10 consumers surveyed still receive paper statements. That presents a "tremendous opportunity for cost savings" for credit unions and banks, said the report.
The research also identified six simplified but distinct segments of banking consumers based on demographic, behavioral and attitudinal differences--including consumers' inclination to use banking technology products and services. They are:
* Fast trackers--young family types who rely on smart phones and banking apps; * Young aspirationals--singles with varied interests and little banking loyalty; * Simplifiers--middle-aged, lower-income wage earners loyal to their local financial institutions; * Middle of the roaders--Middle-aged wage earners who wait until technology is proven; * Value seekers--Older, well-educated and financially comfortable who aren't interested in a lot of technology; and * Conventional stalwarts--Fixed-income retirees who prefer paper statements and live tellers.
"Having a better understanding of consumers' acceptance of technology, and the level of technology they're comfortable with, will help financial institutions reverse the troubling trend brought on by recent economic challenges," said Mark Willard, senior vice president and head of the financial services division at Market Strategies International. "We need to help financial institutions drive more transactions and strengthen loyalty. Our research points to the way technology can be leveraged to achieve those goals," Willard concluded.

CU System briefs (05/05/2011)

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* WASHINGTON (5/6/11)--The American Association of Credit Union Leagues (AACUL) has issued a call for entries to this year's Pro and Blockbuster Awards, which recognize outstanding league and league service corporations' communications efforts during 2010. Deadline for submission of entries is August 3. For entry guidelines, contact Richard Dines, director of league relations at rdines@cuna.coop. Awards will be announced at the AACUL League Communicators Conference in Minneapolis Oct. 4-6 … * NEZPERCE, Idaho (5/6/11)--A former accounting manager of Kamiah (Idaho) Community CU has been ordered to pay more than $11,000 in restitution after pleading guilty to stealing funds from the credit union's expense accounts (Lewiston Tribune via DailyJournal.net May 5). Lorna D. Vickroy, 64, pleaded guilty last week to grand theft by transferring more than $6,700 into her personal account in a series of thefts between August 2009 and January 2011. She was also ordered to pay $4,750 for the credit union audit. Prosecutors did not recommend jail time because the credit union sought restitution … * DES MOINES, Iowa (5/6/11)--Paul Johnson has joined the Iowa Credit Union League (ICUL), the league announced on Wednesday. In his new position, Johnson will be responsible for the oversight and execution of the league's professional development opportunities as well as its Vendor Involvement Program. He reports to Jim Niederhauser. Prior to joining the league, Johnson served in positions at The Members Group and Wells Fargo International. He has a master's degree in business leadership from William Penn University and is a graudate of the Berklee College of Music …

Technology CU offers lifeline for startups

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SAN JOSE, Calif. (5/5/11)--San Jose, Calif.-based Technology CU is helping startups and emerging businesses grow and thrive in Silicon Valley and the greater Bay Area in California. Its commercial and business banking division is offering a range of lending options for businesses looking for financing, including Small Business Administration (SBA) loans from $10,000 to $5 million and SBA Express Loans for those needing quick financing. The SBA loans "are a lifeline for many startups and emerging growth companies who find themselves in a Catch-22," said Herman White, Tech CU's senior vice president of commercial and small business banking. "They need cash to accelerate growth, but because they are young or very small, they probably don't have the credit history that's required for securing a traditional loan," he said, adding that the SBA "provides an alternative." Tech CU also helps connect business banking members to other partners and funding sources, where appropriate, through its relationship with angel groups, incubators/accelerators, niche venture capital firms, strategic investors and other member companies. "We see ourselves as an essential part of helping our member companies grow," White said. He noted that the nearly $1.5 billion asset credit union has worked with entrepreneurs and startups in the region for more than 50 years. "That's why we understand the needs of emerging companies more than most other financial institutions," he said. Tech CU was one of the first credit unions in the nation to offer a complete suite of business-banking services to its members in 2006. It also offers wealth management services for companies and individuals. Credit unions and the Credit Union National Association (CUNA) support legislation in Congress that would increase credit unions' member business lending cap to 27.5% of assets from 12.25%. CUNA has estimated that by increasing the cap, credit unions can help create 140,000 new jobs with $13 billion in new small business loans, at no expense to the taxpayer.

CU System briefs (05/04/2011)

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* SAGINAW, Mich. (5/5/11)--Team One CU in Saginaw, Mich., announced the winners of its "Ultimate Prom" package--the prizes in a savings contest that encouraged area teens to plan and save for upcoming events such as senior pictures, prom and college. Winners are Lauren Bojo of Swan Valley High School and Haley Shepherd of Hemlock High School. Team One partnered with area businesses and gave away two packages that include prom tickets, photos, dinner, haircut/style, pedicure, car washes, gift cards and more. Students earned an entry into the drawing by visiting the credit union and earned additional entries for opening a savings account, depositing into a current account, opening a new service or referring another student to open an account (Saginaw News via mlive.com May 4) … * WILLIAMSPORT, Pa. (5/5/11)--John Sharp, CEO of Horizon FCU, based in Williamsport, Pa., has announced his retirement, effective at the end of May. He has been with the credit union for 27 years. Sharp oversaw its transition from a $600,000 asset credit union with 1,000 members and an office in the basement of Williamsport Hospital to one with more than $57 million in assets, 9,000 members and three offices. Tracy Donahue, vice president of the credit union, will succeed as CEO, Sharp said in a letter to members on the credit union's website … * LINDEN, N.J. (5/5/11)--Alfreda Earnest, president/CEO of Deepwater Industries FCU, based in Linden, N.J., announced her retirement, effective this past Sunday, according to the New Jersey Credit Union League (The Daily Exchange May 4). Succeeding Earnest will be Bret Rigby, the credit union's chief financial officer for the past five years. Prior to his employment with the credit union, Rigby was a strategic planning and marketing consultant, CEO of a trade organization that promoted milk and dairy products in the Mid-Atlantic, and a marketing specialist with the U.S. Department of Agriculture … * HARRISBURG, Pa.(5/5/11)--The Pennsylvania Senate has confirmed Glenn Moyer as the state's Secretary of Banking, reported the Pennsylvania Credit Union Association (PCUA) (Life is a Highway May 4). Moyer, 59, has spent nearly his entire career in the banking industry, most recently as president/CEO of National Penn Bancshares Inc. He currently serves as a senior adviser to the bank's CEO and as a director with the Pennsylvania Banking Association (News Now 12/29). PCUA congratulated him and said it looks forward to working with him on behalf of credit unions and Pennsylvania consumers …

Advantis CU to close branch in path of rail line

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BROOKLYN, Ore. (5/5/11)--The Brooklyn, Ore.-branch of Advantis CU will close this summer to make way for a light-rail system. Advantis executives have been working with Portland, Ore.-area public transportation authority TriMet, which plans to widen the street where the branch is located for a rail line running from Portland to Milwaukie (The Bee May 4). The branch will close in early June. Most of the branch’s employees will be transferred to a new branch opening in Brooklyn later this summer. Advantis CU will maintain an ATM on the site after the branch closes. The building was once housed PGE CU, which merged with the Union Pacific CU--then called the Rose City of Oregon CU--and changed its name to Electra CU. After a merger with Pace CU in 2005, the site became an Advantis branch.

Hubbard presented Mich. foundation volunteer award

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LANSING, Mich. (5/5/11)--The Michigan Credit Union Foundation trustees have chosen Hank Hubbard, president/CEO of Communicating Arts CU, a community development credit union (CDCU) in Detroit, as the foundation's Community Volunteer Award recipient for 2011. The foundation's board said Hubbard exemplifies the credit union philosophy of People Helping People. He is involved with the community through his leadership of a CDCU and through several community organizations. He has spearheaded his credit union in many service projects, including adopting families for the holidays, and assists other CDCUs, including international credit union development through the Macedonian credit union system. He is the longest serving board member of the Academy of Finance Advisory Board, and works with high school students, provides experience and information regarding careers in finance, has personally mentored more than 30 students, been active in the VITA program since 2006, and more.

Boston Metro CU completes merger with University CU

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BOSTON (5/5/11)--Metro CU, Chelsea, Mass., recently completed its merger with University CU, Boston. Metro will continue to operate the two University credit union branches in Boston. Metro also has Massachusetts branches in Burlington, Dorchester, Framingham, Lawrence, Lynn, Peabody, Swampscott and Tewksbury. Combining the two credit unions will create an institution with more than $865 million in assets.

Ochsner inducted into Texas CU Hall of Fame

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DALLAS (5/5/11)--The late Marty Ochsner, former president of Goodrich Employees FCU, has been inducted into the Texas Credit Union Hall of Fame. “Marty was a gem of a lady,” said Texas Credit Union League President/CEO Dick Ensweiler. “She possessed a genuine passion for the movement, and a sincere compassion for people, and that showed in everything she did. Ochsner’s credit union career began in 1975, when she accepted the manager position at Baptist Hospital FCU. During the next 27 years, was employed by Southeast Texas FCU, Smith’s Bluff Texas FCU and Goodrich Employees FCU. Ochsner also served on the boards of the Texas Credit Union League and the Credit Union National Association. Ochsner also was a member of the Sabine Chapter of Credit Unions board and the Credit Union Managers Association of Texas. She was secretary of the Southwest Corporate FCU and served as vice chair on the board of TCUL Services Inc., which is now Credit Union Resources Inc.

CU to receive excess capital from Calif. small-biz project

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COMPTON, Calif. (5/5/11)--Mid-Cities Financial CU met with the California State Treasurer’s Office to discuss its new role as a California Capital Access Program (CalCAP) financial institution.
Click to view larger image Mid-Cities Financial CU, Compton, Calif., met with the California State Treasurer’s Office to discuss its new role as a California Capital Access Program financial institution. From left are: Mid-Cities Financial CU Loan Manager Henry Perez, Member Business Services President/CEO W.E. Scott Burger, Mid-Cities Branch Manager Maricela Jauregui, Mid-Cities President/CEO Melia Keller, Director of Finance Jj LaBella, Community Development Manager Bessie Griffin, and CalCAP Analyst Nancee Trombley. (Photo provided by Mid-Cities FCU)
The CalCAP program offers Mid-Cities Financial excess capital for loans to small businesses outside the credit union’s normal approval criteria. The CalCAP Program is offered by the State Treasurer’s Office California Pollution Control Finance Authority. Mid-Cities Financial was looking forward to partnering “with the CalCAP program to gain additional funds to aid small businesses that may not qualify under our current loan guidelines,” said President/CEO Melia Keller. “This gives the credit union the opportunity to help a group of struggling small businesses we may not have otherwise been able to assist,” she added. Mid-Cities Financial FCU is a $24 million-asset credit union based in Compton, Calif.

Delaware league elects board presents awards (05/04/2011)

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NEW CASTLE, Del. (5/5/11)--Two incumbents were re-elected to the board of directors of the Delaware Credit Union League at the league’s 53rd annual meeting, April 16. Two awards also were presented. Incumbents Meredith Jeffries and Jerry King were re-elected to serve three-year terms. The league announced its 2011 board officers at the re-organizational meeting of the board, including:
* Chair--King, DEXSTA FCU, Wilmington; * Vice chair--Sharon Schaeffer, Delaware First FCU, Wilmington; * Secretary-- Jeffries, New Castle County Delaware FCU; and * Treasurer--Cheryl Chilcutt, Louviers FCU, Newark.
Board members also include: Allen Riley, Sussex County FCU, Seaford; Joel Romaine, Community Powered FCU, Newark; and Kate Toner, Wilmington Postal FCU, Newport. The annual meeting also included the presentation of outstanding credit union professional and volunteer awards for 2010. The 2010 Outstanding Credit Union Professional was John Watson, CEO of Seaford FCU. The 2010 Outstanding Credit Union Volunteer was awarded to Robert “Breezy” Brown, board member at Del-One (Delaware FCU), Dover. A second volunteer award was awarded posthumously to Ardythe Campbell of Delaware Alliance FCU, New Castle, who died Feb. 13.

Hard-hit CUs Just being here means a lot

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RAINSVILLE, Ala. (5/5/11)--The League of Southeastern Credit Unions, led by President/CEO Patrick La Pine, Tuesday delivered a mobile
Click to view larger image Pictured is the brick branch and drive through of the Rainsville, Ala., branch of Gadsden, Ala.-based Community CU as it looked before the building was demolished in last week’s tornados across the South.
Click to view larger image A flat slab and a pneumatic tube to a drive-through are what is left of Community CU’s Rainsville, Ala., branch after a tornado destroyed the brick building last week. In the background is a mobile branch leant to the credit union by Pen Air FCU of Pensacola, Fla. The League of Southeastern Credit Unions delivered the mobile branch Tuesday.
Click to view larger image Meeting Tuesday in the aftermath of last week’s tornadoes to deliver a mobile branch from Pen Air FCU, Pensacola, Fla., to Community CU’s Rainsville, Ala., branch are from left: Patrick La Pine, president/CEO of the League of Southeastern Credit Unions (LSCU); Charlie Atchley, Community CU chairman; Joan Smith, Community CU chief operating officer; David Eubanks, Community CU CEO; Bill Berg, LSCU vice president, regulatory affairs; and Sharon Lett, director of human resources. (Photos provided by the League of Southeastern Credit Unions)
branch to a credit union whose Rainsville, Ala.-brick branch was flattened in last week's tornadoes that swept several Southern states. Meanwhile, credit unions have doubled their contributions to the CUaid.coop fund activated to help credit union staff and members through the disaster. The mobile branch is from Pen Air FCU, Pensacola, Fla. The league drove it to Community CU headquarters in Gadsden, Ala., Tuesday and gave a tour of the branch to show how it worked. Then the league delivered it in Rainsville. "All that remains in Rainsville is one drive-up tube system; the rest is a flat slab," said Mike Bridges, LSCU vice president, marketing and communications. "Community set the mobile branch up Tuesday and expects to staff it Wednesday for service," he told News Now late Tuesday. Community CU CEO David Eubanks told the league's delegation, "Just being here means a lot. Now we have to get the word out that the ATM service is up and running and we can service our members." He also indicated that the credit union will begin the process of rebuilding. "He has already been in contact with the firm to begin putting building plans together," Bridges told News Now. The league also visited the Cullman area, which was hit hard, as well. Branch managers at Alabama CU, Listerhill CU and America's First CU said their branches are in good shape. America's First branch has been without power for a week. It is operating from 10 a.m. to 3 p.m. "to capitalize on daylight," Bridges reported. The credit union met Tuesday afternoon with the city to learn when the electricity might be turned on again, he said Tuesday. The branch is "right off the main street of town," which was hit hard with major power outages, he said, adding that if the electricity doesn't return soon, it will need to bring in a mobile branch to serve members. Branch managers at Alabama CU and Listerhill told the league they were working with members to extend loan payments, waive late fees, and "generally do what they can to ease the burden on their members in this time of need," Bridges said. One Alabama CU branch employee is still without power. "Most of the rest of the credit union staff in the area are doing OK." Redstone FCU, Huntsville, is offering assistance to storm victims, it said in a press release. Power was restored in some areas, and all branches except branches on Redstone Arsenal and Highway 53, were open Wednesday from 9 a.m. to 5 p.m. Most ATMs are operational. Officials said that the credit union "understands the impact this disaster has brought upon our members by incurring many unplanned expenses. Qualifying members with RFCU personal and vehicle loans can request our Skip-A-Pay service." The service allows members to skip one month's payment with a temporarily waived processing fee. Redstone also is offering disaster recovery loans and emergency relief loans. The National Credit Union Foundation (NCUF) said that the credit union community has raised $30,000--double what it was Tuesday--after it activated its online disaster relief system, CUAid.coop. Credit unions in every state can donate through the secured website, which accepts credit cards and wire transfers. As donations post through CUAid.coop, NCUF will coordinate with the credit union leagues across the southern part of the country to distribute money efficiently to credit union employees and members in the affected areas, said NCUF.

CU System briefs (05/03/2011)

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* NEW BERLIN, Wis. (5/4/11)--Jay Magulski, chief operating officer (COO) of New Berlin, Wis.-based Landmark CU, has been promoted to president/COO, while CEO Ron Kase retains his title as CEO, the credit union said Tuesday. The news was announced after Landmark earned $2.9 million in first quarter, compared with $2.08 million in first-quarter 2010. Delinquent loans declined to 2.37% of the portfolio--down from 2.87% a year earlier. Noting that "Landmark weathered the great recession with a strong balance sheet and earnings" and continued loaning to members and small businesses throughout the downturn, Kase said the credit union "is now in a strong position to build its leadership team of the future." Magulski has more than 25 years of experience. He joined Landmark in 2002 as vice president of business development and training. He became senior vice president in 2003, and COO in 2007. The credit union's board said it anticipates that Magulski will earn the CEO title sometime before Kase's official retirement date of Jan. 19, 2013 … * HIGHTSTOWN, N.J. (5/4/11)--The New Jersey Credit Union League will showcase the state's credit unions next week at the State House in Trenton. Volunteers from several credit unions will help man the league booth, which will be located strategically in the tunnel that connects the State House, State House Annex and Capitol Complex garage. They will be at the State House on Monday, when the Assembly meets in session, and again that Thursday, May 12, when Senate committees are scheduled to meet. "This is an excellent opportunity to highlight the great work of New Jersey's credit unions, raise our visibility among state lawmakers, as well as talk up municipal deposit reform," said league President/CEO Paul Gentile …

British Columbia CUs earnings up 30

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VANCOUVER, B.C. (5/4/11)--British Columbia credit unions' earnings in 2010 reached a record $380.4 million--before taxes and dividends--an increase of 29.6% from the $293.6 million posted in 2009, announced Central 1 CU, the trade association for British Columbia and Ontario credit unions in Canada. Assets totaled $49.4 billion, up 2.1% or $1 billion. Asset growth was concentrated in residential mortgage loans, which increased 8.1% to $28.7 billion. The system's total loan portfolio was $41.5 billion at year-end. Home mortgages accounted for 69.2% of the loan portfolio, said Central 1. Loans to small and medium-sized businesses--representing 24.5% of the portfolio, were up by 3.4% to $10.2 billion. "As the B.C. economy improved during the year, credit unions successfully met their members' demand for loans and other financial services," said Don Rolfe, Central 1 president/CEO. "Credit unions saw steady loan growth in 2010, which they financed mainly through increased deposits by members." Growth was attributed to a high financial margin, mainly due to a 6.1% loan growth and favorable interest-rate spreads, as well as higher income from subsidiaries such as insurance agencies. Members' deposits were up 4%, reaching $44.1 billion. Membership totaled 1.72 million members at year-end, an increase of 24,790 members from 2009. Members received $42.6 million in dividends and patronage rebates.

Wright-Patt joins state business lending network

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COLUMBUS, Ohio (5/4/11)--Fairborn, Ohio-based Wright-Patt CU has joined the Ohio Business Lending Clearinghouse (OBLC), a network that helps small businesses in the state to connect with loan opportunities and other tools needed to grow, prosper and create jobs. The clearinghouse is administered by the Ohio Department of Development's Office of Insurance and Financial Development. It is a public/private partnership and uses a free Web-based tool that helps businesses looking for a loan to enter its company information onto the site, which works to match it with a lender. The site contacts lenders with the loan and business profile details of the business and within 48 hours, lenders contact the small business to discuss the loan request. Businesses that aren't matched or that don't qualify for a loan are referred to a network of business development resources that can assist them. "Local banks and credit unions are just as important as larger institutions to small businesses as they search for funding," said James A. Leftwich, director of the Ohio Department of Development. "Increasing potential for small business loans is critical as we work to grow Ohio's economy," he added. "Wright-Patt CU recognizes the importance of small businesses helping drive economic success in our market," said Tim Mislansky, senior vice president at the credit union, adding that the OBLC is a convenient way to connect with more area businesses. "As a community-based lending institution, we understand the need to provide well-priced financing, and feel we have an obligation to help local businesses grow and prosper." Credit unions and the Credit Union National Association (CUNA) support legislation that would increase the cap to credit unions' member business lending to 27.5% of assets from 12.25%. CUNA has estimated that by increasing the cap, credit unions can help create 140,000 new jobs with $13 billion in new small business loans, at no expense to the taxpayer.

Texas foundation presents FOCUS Awards

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FARMERS BRANCH, Texas (5/4/11)--The Texas Credit Union Foundation presented its annual FOCUS Awards during a ceremony at the Texas Credit Union League's 77th Annual Meeting & Expo in Austin last week (LoneStar Leaguer May 3). The awards recognize champions of financial literacy in the Texas credit union movement "for the difference they are making within the lives of their members and communities," said Courtney Nickles, the foundation's executive director. Awards went to:
* Individual award, Sherry Cassidy, manager of public relations and financial education at In Touch CU, Plano, for her advocacy and implementation of financial education in local schools; * Credit union award, Amarillo (Texas) Community FCU, for improving financial education among youth and adults; * Organization award, San Antonio Chapter of the Texas Society of Certified Public Accountants; and * FOCUS member award, Victor Garza, Consumer Credit Counseling of Greater Dallas.

Voting ends Friday for ICU MagazinesI heroes

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MADISON, Wis. (5/4/11)--Credit Union Magazine is celebrating credit union heroes by asking the credit union movement to help select the 2011 CU Hero of the Year. Credit Union Magazine subscribers have nominated four heroes for the 2011 award:
* Ron Amstutz, executive vice president, Desert Schools FCU, Phoenix; * Michael Bittle, CEO, Vanderbilt University Employees’ CU, Nashville, Tenn.; * Carol Schillios, founder of Schillios Consulting Group, Seattle; and * Maurice Smith, CEO, Local Government FCU, Raleigh, N.C.
Voting ends May 13. This year’s winner will be honored at the Credit Union National Association’s America’s Credit Union Conference & Expo (ACUC), in San Antonio, June 19-22, and will receive free conference registration and lodging. To read about the nominees and vote, use the link.

15K raised for CUs in tornadoes league surveys damage

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MADISON, Wis., and TUSCALOOSA, Ala. (5/4/11)--The League of Southeastern Credit Unions (LSCU) is on site in Alabama to survey
Click to view larger image League of Southeastern Credit Unions President/CEO Patrick La Pine talks with Becky White, assistant to the CEO of DCH CU, Tuscaloosa, Ala., about damage to the credit union from the April 27 tornadoes in six Southern states. DCH CU lost part of its roof.
Click to view larger image A reminder of the hit and miss devastation of last week's tornadoes in Tuscaloosa, Ala., where Tuscaloosa CU is working with low-income families in this housing project who were affected by the disaster .
Click to view larger image Last week's tornadoes in the South destroyed a Tuscaloosa (Ala.) Housing Authority low-income housing project. Tuscaloosa CU is working with the families who lived here to help meet their essential needs. (Photos provided by the League of Southeastern Credit Unions)
the needs of credit unions, employees and volunteers, and members from last week's tornadoes in the South. The National Credit Union Foundation (NCUF) has collected $15,000 from the credit union community since activating its online disaster relief system, CUAid.coop, Saturday. "Visiting the affected areas and talking to credit union officials and members really drive home the human toll an event like last Wednesday's tornadoes have on our communities," said Patrick La Pine, president/CEO of LSCU. "I am heartened by the response of our credit union community and the human spirit in responding to this tragedy, which will have a lasting impact on the region for years to come." The CUAid campaign is to assist credit union people affected in the Southern part of the country. The tornadoes killed at least 342 people in seven states--250 of them in Alabama--and damaged credit unions, and members and employees' homes. In Tuscaloosa, Ala., alone, the tornadoes cut a six-mile swath that destroyed more than 5,000 homes and businesses--including a credit union branch--and left several thousand people homeless. City officials confirmed 34 fatalities but say 434 more people are missing (USA Today May 2). On Monday and Tuesday, LSCU visited credit unions in Tuscaloosa, Ala., where one credit union lost a branch and another lost part of a roof. Monday league staff visited DCH CU, which lost part of its roof. The league reported Monday night that DCH, which serves employees and families of a local hospital, was operating on generator power and leveraging shared branching so members can access their money. DCH opened at noon Monday after being closed last Thursday and Friday, said the league. Alabama CU and Tuscaloosa CU are helping DCH members access their money and helped them get a maximum of $200 out of their account, even though DCH's server was down, said the league. "Many hospital employees count on DCH for accessing their money right after payday," said Mike Bridges, league vice president of marketing and communications. DCH set up a mobile center in the hospital cafeteria and allowed each member an emergency $500 loan. It processed $125,000 worth of emergency loans and "truly went above and beyond to help members in their greatest time of need," said Bridges. Two DCH employees lost everything they had in the tornado. The Southeastern Credit Union Foundation (SCUF) is working to access their needs and accepting donations through its Disaster Relief fund at www.lscu.coop, Bridges said. Alabama CU is working with members to provide help. It is providing loan extensions and $1,000 no-interest loans, waiving payments, and restructuring loans, said the league. Tuscaloosa CU is working with SCUF and the Tuscaloosa Housing Authority to help 116 families whose homes were destroyed in the tornado. The housing authority is finding the families homes, but they need money to turn on the electricity. Then they will need essentials such as pots and pans, towels, sheets, Tupperware and furniture. Pen Air FCU, Pensacola, Fla., donated a mobile branch to Community CU in Gadsden, which the league delivered Tuesday in Rainsville, where the credit union's branch was destroyed by a tornado. Pen Air also is donating supplies. Pen Air President/CEO Ron Fields personally drove the first round of supplies collected--1,200 bottles of water and 100 packs of Baby Wipes, which were requested by rescue workers--to the affected areas during the weekend. In addition, Pen Air FCU will collect donations and supplies for the relief efforts in the coming weeks, it said in a press release. The credit union community is making an impact, said NCUF. "Thank you to the individuals and organizations such as the Ohio Credit Union Foundastion, Credit Union Association of the Dakotas, the World Council of Credit Unions, St. Agnes Employees FCU (Baltimore), and Premier FCU (Greensboro, N.C.) who have made donations to CUAid," said Tom Candell, NCUF deputy executive director, chief operating officer and chief financial officer. "Everyone who supports CUAid is helping affected credit union people directly with critical needs, longer-term recovery needs, operational needs, and assisting credit union members," Candell added. Credit unions in every state can donate through the secured website, which accepts credit cards and wire transfers. As donations post through CUAid.coop, NCUF will coordinate with the credit union leagues across the southern part of the country to distribute money efficiently to credit union employees and members in the affected areas, said NCUF.

CUnext group encourages young pros in Kansas CUs

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TOPEKA, Kan. (5/4/11)--The Kansas Credit Union Association said it has launched an initiative to give young credit union leaders the opportunity to help shape the future of the industry.
Click to view larger image Kansas Credit Union Association’s young leadership group, CUnext, includes professionals from Area CU, Kansas City, Kan.; Credit Union of Dodge City; Envista CU, Topeka; Kansas State University FCU, Manhattan; Meritrust CU, Wichita; Mid American CU, Wichita; and Quest CU, Topeka.
The group, CUnext: Young Leaders of Kansas, met in March to learn about credit union advocacy and meet state legislators. The group met again in April at the KCUA annual meeting, where its members participated in networking and educational sessions with other credit union professionals. CUnext group member Travis Colibert, newly promoted to a branch manager at Mid-American CU, Wichita, attended both CUnext functions. He said he left both meetings with ideas to strengthen his skills within the industry. “The program opens our eyes to different aspects of credit unions and allows us to get our feet wet in other related areas,” he said.
Click to view larger image U.S. Rep. Kevin Yoder (Kan.-R) visits with the members of CUnext group while attending the Kansas Credit Union Assocation’s annual meeting in April. (Photos provided by the Kansas Credit Union Association)
The goal of the initiative is to provide the next generation of credit union leaders with opportunities to learn more about the credit union system while giving them the chance to network with each other and create opportunities for growth and innovation. Understanding advocacy and the connection with legislators is essential for today’s credit union professionals, said Haley DaVee, vice president of governmental and public affairs for KCUA and the CUnext coordinator. “It’s important that the future leaders of Kansas’ credit unions have access to information and contacts at the state and national levels, as well as opportunities to get involved,” DaVee said. “Not all our meet-ups will be legislative in nature, though. We are planning a variety of programs to help young professionals expand their understanding and involvement in all aspects the credit union movement.” CUnext was inspired by CRASH Network!, a national credit union program encouraging industry participation among young professionals, DaVee said.

Wash DFI Disclose once-a-member policy in bylaws

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OLYMPIA, Wash. (5/4/11)--“Once a member, always a member,” a principle that credit unions use to express their inclusiveness to consumers, must explicitly be described in state-chartered credit unions’ bylaws, according to new legal guidance issued by the Washington Department of Financial Institutions. The once-a-member, always-a-member policy does not apply to members who have closed their accounts and left a credit union’s field of membership, wrote Linda Jekel, director of credit unions for the state of Washington in DCU Interpretive Letter I-11-02. “This principle does not provide re-instatement for an individual after he terminated his membership with the credit union and no longer meets the field of membership requirements,” wrote Jekel. Washington state-chartered credit union can employ the “once-a-member” principle by adding it to their bylaws, Jekel added. She also advised boards of directors to approve any requirements for retaining memberships, such as maintaining a share account.

Asian CU confederation turns 40

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BANGKOK, Thailand (5/4/11)--The Association of Asian Confederation of Credit Unions (ACCU) is celebrating its 40th anniversary--on the heels of World Council of Credit Unions (WOCCU) marking the same milestone.
Click to view larger image Andrew So (standing), first president of the Asian Confederation of Credit Unions, lectures before a credit union group in this 1971 photo.
Click to view larger image World Council of Credit Unions General Manager A.A. “Paddy” Bailey (left) signs the documents that help form the Asian Confederation of Credit Unions in 1971. (Photos provided by the World Council of Credit Unions)
Bangkok-based ACCU was launched April 28, 1971, as the Asian Confederation of Credit Unions with the help of WOCCU officials and Asian credit union leaders. The organization celebrated its 40th anniversary year last week at its conference in Thailand. ACCU was founded by credit union systems representing Hong Kong, Japan, Korea, the Philippines, the Republic of China and Taiwan. It serves 13 regular and associate members, 18 affiliate members and 44 supporter member credit unions representing 10 countries. The genesis of ACCU was at WOCCU’s fourth regional Training Conference, themed “The Future is Asian,” held at the International Cooperative Education Institute in Seoul, South Korea, in April 1971. WOCCU General Manager A.A. “Paddy” Bailey was one of the officials who helped usher ACCU into existence. The organization named Augustine Kang, then WOCCU’s Asian representative, as its first general manager. “ACCU owes its success to the many men and women who in past years devoted their lives to translating the ideal of brotherhood into an everyday reality,” said Andrew So, who served as president of ACCU’s founding board of directors and spent 10 years as a WOCCU board member. ACCU’s member organizations serve more than 38 million people. ACCU’s conference this year attracted 380 representatives from 21 Asian nations, and Thailand’s finance minister, Korn Chatikavanji. “Asia’s role in the global economy has never been greater, as evidenced by the strong presence of Asian countries in the Group of 20 (G-20) nations,” said Dave Grace, WOCCU senior vice president of association services who attended the ACCU conference. “A strong global credit union system needs Asia's credit unions to play a significant role. From supervisory structures to [information technology] systems, there is much to be learned from the Asian credit union movement, and we congratulate ACCU on this milestone.”

Fin ed project leads to stint on Sesame Street

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MADISON, Wis. (5/4/11)--A University of Wisconsin (UW) professor, whose research on preschool financial education was funded by a grant from the National Credit Union Foundation (NCUF) and sponsored by the Credit Union National Assoociation, served as an adviser on a recently launched "Sesame Street" financial education initiative. Karen Holden, UW-Madison Center for Financial Security affiliate and professor emerita of consumer science in the School of Human Ecology, was one of six advisers on “For me, for You, for Later: First Steps to Sharing, and Saving,” a project developed by Sesame Workshop, the nonprofit behind the “Sesame Street” television show (University of Wisconsin-Madison News May 2). The bilingual, research-based multimedia outreach initiative establishes a foundation for financial education for children between the ages of three and five. Project advisers helped determine the fundamental lessons applied through the program. They reviewed drafts of the script and educational materials, including parent-caregiver guides to be released with the program DVD. Holden was on the set to watch one day of filming, meet the puppets and their puppeteers and some of the “Sesame Street” human characters. “For Me, for You, for Later: First Steps to Spending, Sharing, and Saving” uses Sesame Street characters to emphasize financial learning opportunities that occur during every day routines and experiences. The materials highlight the basic concepts of making choices and the value of people, things, and money that can lead young children towards a solid understanding of saving, spending, and sharing. The outreach kit includes an original “Sesame Street” DVD, a parent/caregiver guide and a children's activity book highlighting the financial basics. Holden conducted research that showed young children are capable of acquiring basic money concepts long before they enter school. Through social interaction and observation, preschoolers can begin to comprehend such abstractions as the purpose of money. CUNA developed the research concept and offered advice for the study, based on its “Thrive by 5” pre-school financial literacy program. A grant from NCUF funded the research.

World CU Conference early bird deadline nears

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MADISON, Wis. (5/4/11)--The “early bird” deadline for World Council of Credit Unions’ (WOCCU) 2011 World Credit Union Conference in Glasgow, Scotland, July 24-27, is drawing near. Those who sign up before May 19 will receive a discounted rate.
Click to view larger image Pete Crear, World Council of Credit Unions’ (WOCCU) president/CEO, will network with attendees in Glasgow, Scotland, at the WOCCU 2011 World Credit Union Conference, July 24-27, before retiring in August. (Photo provided by the World Council of Credit Unions)
During the conference, attendees can connect with peers from around the world, hear from world-renowned speakers including former Prime Minister of Great Britain Gordon Brown, celebrate WOCCU’s 40th anniversary and bid farewell to WOCCU President/CEO Pete Crear before his retirement in August. “This will be a groundbreaking conference as we celebrate WOCCU's 40th anniversary and say goodbye to Pete,” said WOCCU Chair Barry Jolette, president/CEO of San Mateo CU in Redwood City, Calif. “Pete has played a critical role in the worldwide credit union movement, and I hope many of his colleagues will be able to wish him well as he starts the next chapter of his life.” The conference also will include local credit union visits, networking, golf events and a breakfast series featuring leading business authors. Special tributes will honor Crear’s achievements and celebrate WOCCU and its members during the past 40 years. For more information, use the link.

Irish league CUs will overcome challenges

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BELFAST (5/3/11)--Ireland's credit union movement cannot be immune from the financial crisis affecting that country, but it can meet and overcome that challenge, the president of the Irish League of Credit Unions told 1,200 credit union delegates attending the league's annual meeting last weekend in Belfast. The credit union sector would come through whatever exposure it faced in bad loans and other difficulties, league President Mark Bailey said, adding that the movement will be safer, stronger and more secure for all credit union members as a result of the challenge (The Irish Times May 2). Ireland has 498 credit union serving 2.98 million members, including 40,000 new members who joined in the past year. Credit unions have US$17.8 billion in savings, and US$8.9 billion in loans and an equal amount available to loan, Bailey said. He noted 12 credit unions have been assisted by the movement's Savings Protection Scheme (SPS), a movement-owned share deposit insurance fund. When credit unions have received SPS funds in the past, they have traded out of their difficulties, said Bailey. Also speaking was Sinn Fein Deputy First Minister Martin McGuinness, who said that credit unions were absolutely vital and would weather the storms. Credit unions can always be depended upon to be there at times of adversity, he said in an interview after his speech, adding that the world recession and economic circumstances mean that people will be even more dependent on credit unions. Earlier last week the league confirmed that it is in talks with the Central Bank about introducing a statutory resolution plan for the credit union sector that will ensure and support the future of credit unions (The Irish Times April 29) .

Missouri CUs lent a hand after April 22 tornadoes

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ST. LOUIS (5/3/11)--Missouri credit unions helped the state and its residents get back on their feet after a series of tornadoes touched down in the state April 22. An F4-rated tornado swept through St. Louis, leaving in its path a swath of destruction for miles, according to the Missouri Credit Union Association (MCUA). Missouri credit unions in the way of the half-mile wide twister were mostly unharmed (The Missouri difference April 29). Missouri credit unions holding events to help with the aftermath of the tornados include:
* First Community CU, Chesterfield, held a dress-down day Friday and will match all employee donations for tornado relief. To date, the amount to be donated is $4,000. * A loan sale is on the books at 1st Financial FCU, Wentzville, where members affected by the storm can apply for a 90-day no interest loan. * Neighbors CU, St. Louis, is offering assistance also. It established an Emergency Relief Loan for victims. Neighbors will donate $25 to the St. Louis Chapter of the Red Cross for every new checking account with direct deposit opened at the credit union from April 28 through May 15.
Some tornado damage reports include:
* At Vantage CU, Bridgeton, the tornado hit the building across the street, skipped over the credit union and hit the hotel just behind it. Damage to Vantage was minor. Vantage has implemented a loan special to help members finance repairs to damaged property. Vantage employees grilled lunch--hamburgers and brats--for Bridgeton police, firemen and city workers, during the recovery efforts. * At the American Airlines CU branch located just above the security area heading into Concourse C at Lambert Airport in St. Louis, Airport Manager Lindsey Beadsley’s office was smashed up with broken windows and things knocked around. No one was hurt. * CommunityAmerica CU’s branch on the Lambert Airport campus received only minor exterior damage and was closed on Saturday. Buildings directly across the road from the credit union were demolished in the storm. * In southeast Missouri, more than six inches of rain fell on Poplar Bluff, bringing the four-day total in the area to 15 inches and causing the Black River to pour over the levee in 30 places. “Poplar Bluff (Mo.) FCU is built on ground high enough that there is no impact to the credit union,” Kirk Mondy, Poplar Bluff president/CEO, told MCUA. “What has been amazing to see is how social networking like Facebook has made it easy to communicate the needs within the community. From donations of food and toiletries to help walking dogs, the community has been out in-force because of postings on Facebook.” * At Cape Regional CU, Cape Girardeau, the credit union had three inches of water in the basement. “We’ve been very lucky,” said Cape Regional President Jim Cauble. “The three sump pumps we have just couldn’t keep up with the incoming water.”

Savings grow loan-to-savings ratio lowest since 1994

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MADISON, Wis. (5/3/11)--Credit unions savings continue to grow at a fast pace, while credit union loan balances still are declining, leading to the lowest loan-to-savings ratio since 1994, according to a Credit Union National Association (CUNA) economist’s analysis of March’s monthly estimates of credit unions.
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Credit union savings balances grew 1.3% in March, compared with a 1.8% increase during February. Regular shares led savings growth, rising 3.6%, followed by money market accounts (1.4%) and share drafts (1.2%). Individual retirement accounts grew 0.7%, while one-year certificates fell by 0.8%. “Savings growth continues at a relatively fast pace,” Mike Schenk, CUNA vice president of economics and statistics, told News Now. “Growth in credit unions’ savings accounts was 1.3% in March and nearly 3% in the first quarter. Short-term liquid accounts are growing quickly while balances and certificate accounts declined.” Credit union loans outstanding decreased 0.1% during March, compared with a 0.4% decline in February. Adjustable-rate mortgages grew 1.9% and fixed-rate mortgages increased 0.5%. Used-auto loans increased 0.5%, followed by credit card loans and home equity loans, which fell 0.7% and 0.8% respectively. New-auto loans dropped 0.6% and unsecured personal loans declined 1.3%.
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“Overall, loan balances continue to decline,” Schenk said, “though the ratio of decline eased from the prior month and from year-ago results. Loan balances declined 0.1% in March, and 1.1% in the first quarter. Loans dropped by 0.4% in February and by 1.4% in the first quarter of 2010. “Because savings growth continues to outpace loan growth, the loan-to-savings ratio once again declined--from 70.4% in February to 69.4% in March,” he continued. “This is the lowest reading since 1994. Interestingly, even though loan balances were declining, the delinquency ratio once again fell--from 1.67% in February to 1.60% in March. And this is the lowest reading since June 2009. “It’s important to remember that the first quarter is generally a quarter of relatively fast savings growth and slow loan growth,” Schenk said. “Loans should begin to grow in the coming months due to a combination of an expectation of stronger seasonal growth patterns, improving job markets, income gains--and resulting increases in consumer confidence.” Concerning asset quality, credit unions’ 60-plus-day delinquencies fell slightly to 1.6% during March 2011. The loan-to-savings ratio dropped to 69% in March from 70% in February. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 19%. The movement’s overall capital-to-asset ratio remained at 10% in March. The total dollar amount of capital is $94 billion.

Online Resources announces verdict in former CEOs suit

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CHANTILLY, Va. (5/3/11)--A civil court jury in Fairfax County, Va., has awarded former Online Resources Corp. Chairman/CEO Matthew P. Lawlor $5.3 million in damages in a wrongful termination lawsuit against the company. The jury rejected his claim that he had been wrongfully terminated but found in his favor on other claims. Lawlor had sought $15.9 million in damages plus pre-judgement interest from the date of his separation in February 2010 from the Chantilly, Va., based Online Resources Corp. Online Resources provides Internet banking and bill payment services for credit unions. The verdict was announced on April 22 in the Circuit Court of Fairfax County, Va., said a press release from Online Resources. A deadline has not been set yet for the argument of post-trial motions or an appeal by the company. "We are very disappointed in this verdict and we intend to aggressively pursue all available avenues to have this verdict overturned or set aside," said John C. Dorman, chairman of Online Resources' board of directors. The company said it would reserve for and disclose the potential liability in its first quarter financial statements and public filings. To give the company time to prepare and review the information, it is postponing its first quarter earnings release to May 10. However, it said revenue for first quarter is expected to be about $39.3 million. Before considering any reserve it may take for potential legal liability, its adjusted Ebitda and Ebitda are expected to be about $6.2 million and $5.4 million. Management will conduct a conference call on first quarter results at 5 p.m. ET on May 10. The conference dial-in number is 877-303-6496 for domestic participants. A live webcast of the call will be available in the "investors" section of the company's website at www.orcc.com.

CUs Gen Y contests are lesson for banks says CACR

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MADISON, Wis. (5/3/11)--Credit unions, providing a lesson that banks could learn, are increasingly using a combination of online contests and social media to hire spokespeople who are young and media-savvy, according to a Sunday article in Collections and Credit Risk (CACR). As part of the Young & Free Campaign, launched in 2007 by Currency Marketing, a credit union marketing company in Chilliwack, Canada, the company provides credit unions the tools to engage the youth market, the publication said. The key to the spokespeople’s success is using the Internet to build a community that still is mostly local. Faced with aging members, credit unions needed a method of staying relevant and garnering a new base of young members, CACR said. To date, nine credit unions have participated in Young & Free, with many saying they have doubled their Gen-Y membership year-over-year. Only one credit union per state participates in the program, the article reported. Eleven percent of people in Generation Y have had a primary financial relationship with a credit union, compared with 15% of all other ages, according to an August 2010 survey by Javelin Strategy and Research. By contrast, 43% of Generation Y had a primary relationship with a top-10 bank, compared with 38% of all other consumers, CACR said. The article mentioned ORNL FCU Oak Ridge, Tenn.; Michigan First CU, Lathrup Village, Mich., and South Carolina FCU, North Charleston, S.C. Although credit unions may not have all the technology of the biggest banks to extend their reach, they have something those large banks do not, Mark Schwanhausser, a Javelin senior analyst, told CACR. Credit unions are nonprofit, and they have roots in an intensely local and specific community, he said.

NASA FCU offers no- or low-down-payment mortgages

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UPPER MARLBORO, Md. (5/3/11)--Saying it wants to offer mortgage products that fit its members’ needs, NASA FCU is offering no-money-down mortgages. NASA FCU is offering a 100% loan-to-value (LTV) mortgage with no private mortgage insurance (PMI) required for new home purchases up to $650,000. The mortgage products are available for a consumer's primary residence in Maryland, Washington D.C. and Virginia. Waiving the PMI requirement will save members hundreds or even thousands of dollars, according to NASA FCU. Also, for new home purchases in the $650,000 to $850,000 range, the credit union is offering a 95% LTV mortgage with 5% down payment is available as is a 90% refinance option for current homeowners. The loan products will be limited to highly qualified borrowers, which will offset the risk of making the no- and low-down payment loans, Bill White, NASA FCU vice president of mortgage lending, told the The Wall Street Journal May 2. White said home prices in the Washington, D.C., area have remained steady in comparison to other regions of the country.

Georgia United CU State Employees of Atlanta merge

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ATLANTA (5/3/11)--Georgia United CU, Duluth, Ga., has welcomed the State Employees CU of Atlanta in a strategic merger that has been in the works for more than a year. The merger became official Saturday after the end of the business day. Georgia United CU, formerly known as Georgia Federal, serves school system employees and more than 450 employee groups across the state, including the University of Georgia faculty, staff, student and alumni. State Employees CU is a 50-year-old credit union in downtown Atlanta whose members include all Georgia state agencies' employees and retirees. The partnership will unite two of the state's largest and strongest credit unions "to allow greater economies of scale and an expanded branch network," said Georgia United President/CEO Warren Butler. Georgia United has 13 branches and $655 million in assets. State Employees has three branches and $205 million in assets and 26,000 members. Both credit unions will share the Georgia United name. According to State Employees CU President/CEO Ken Merritt, the credit union's board had explored a partnership with another like-minded credit union to expand its service offerings and delivery channels to members. "Georgia United was our choice due to their commitment to service and value. All existing SECU branches will remain open," he said. Members will see the addition of Georgia United's products and services, especially certificates of deposit, credit cards and mobile banking. Ninety-two percent of State Employees CU's membership voting on Jan. 24 approved the proposal.

Mich. GAC panel Right time to step up biz lending

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LANSING, Mich. (5/3/11)--The slow market for business credit presents an opportunity for credit unions to offer member business lending, according to panelists speaking on “Economic Development Initiatives for a Stronger Michigan” at the Michigan Credit Union League’s Governmental Affairs Conference, April 26-27 (Michigan Monitor May 2).
Bill Beardsley, right, moderator of “Economic Development Initiatives” at the Michigan Credit Union League’s Governmental Affairs Conference, introduces panelists, from left, Eric Hanna, Michigan Economic Development Corp.; Tom Donaldson of the Small Business and Technology Development Center; and Al Cook of the U.S. Small Business Administration’s Detroit office. (Photo provided by Michigan Credit Union League)
Big banks may not begin lending again for two or three years, said Eric Hanna, capital markets development associate for the Michigan Economic Development Corp. “There’s a tremendous opportunity for credit unions to step into the breach,” Hanna said, but he added the window could be short because when banks do start lending, they will aggressively pursue volume. The shift toward lending by smaller lenders has already taken place, according to Al Cook, deputy district director for the U.S. Small Business Administration's (SBA) Detroit office. Cook said that even though the SBA has raised the cap on small business loans to $5 million, most of the loans it does still fall under the old $2 million cap. “The shift I’ve seen is from big lenders to small lenders,” Cook said. He added that the SBA prefers to work with lenders who know the local market. Credit union leaders should make sure proposed deals fit within their business model, said Tom Donaldson, regional director for the Small Business and Technology Development Center. “Ultimately, we want to refer deals that you want to do,” Donaldson said. Credit unions seem ready to fill the business credit void in their local communities, according to Bill Beardsley, moderator of the panel and president of the Michigan Business Connection. “I’m excited about working with a group of credit unions because they really put their money where their mission is,” Beardsley said. The Credit Union National Association (CUNA) has estimated that the MBL cap lift could provide up to $13 billion to small businesses in the first year alone and create over 140,000 new jobs, at no cost to taxpayers.

iNews Nowsi Top 10 stories for April

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News Now’s Top 10 stories for April MADISON, Wis. (5/3/11)--An article about how credit unions would serve their members during a possible federal shutdown was the top News Now story in April, with articles about debit interchange issues dominating the rest of the top 10. 10. Interchange delay bill: Co-sponsor list growing WASHINGTON (4/4/11)--The ranks of House interchange delay supporters grew to 64 late last week, and support for an examination of interchange fee cap legislation is growing as the July 21 effective date comes ever nearer. 9. Frank’s call for interchange delay ‘significant,’ says CUNA. WASHINGTON (4/6/11)--Rep. Barney Frank's comments in support of a delay of the Federal Reserve's debit card interchange fee rule are "extremely welcome and helpful," said CUNA Senior Vice President of Legislative Affairs John Magill, and their importance "cannot be overstated." 8. Five cost-effective ways to thwart robberies INDIANAPOLIS (4/7/11)--The lingering recession has some individuals looking for new ways to make money, and a few venture down the wrong path, taking desperate measures such as robbing credit unions and banks. 7. Texans CU, Vensure FCU placed into conservatorship ALEXANDRIA, Va. (4/18/11)--The National Credit Union Administration (NCUA) on Friday placed Mesa, Ariz.'s Vensure FCU and Texans CU of Richardson, Texas, into conservatorship. 6. CUNA plans national interchange teleconference WASHINGTON (4/11/11)--Interchange continues to be the issue of the moment for many credit unions, and the Credit Union National Association (CUNA) will give credit unions the latest developments on the interchange issue plus guidance on how to mobilize their members during an April 13 national teleconference. 5. NCUA makes key changes to final corporate CU rule ALEXANDRIA, Va. (4/22/11)--The National Credit Union Administration (NCUA) on Thursday approved a final corporate credit union rule that alters some corporate internal control and reporting requirements, but made some key changes from its original proposal. 4. Banks still hide fees from consumers, says U.S.PIRG WASHINGTON (4/21/11)--Banks are still hiding their fees from consumers, even the fees mandated by the Truth in Savings Act, says a new study by U.S. Public Interest Research Group (U.S. PIRG). That's why one of the study's key recommendations is to “bank at a credit union, not a bank.” 3. PULSE: Issuers expect 73% drop in interchange revenue HOUSTON (4/27/11)--Small debit card issuers such as credit unions and community banks on average expect a 73% decrease in debit interchange revenue as a result of pending interchange fee rules, according to the 2011 Debit Issuer Study commissioned by PULSE, an electronic funds network. 2. Compliance: Credit reporting changes coming WASHINGTON (4/14/11)--The July implementation deadline for many portions of the Dodd-Frank Act is approaching, and many credit unions still have questions regarding how the new Dodd-Frank rules will impact their practices. 1. Federal shutdown: CUs stand ready to assist members. MADISON, Wis. (4/8/11)--Credit unions nationwide are preparing to serve members with urgent financial needs in the event of a federal government shutdown at midnight ET today.

Siouxland FCUs gas cards a hit at the pump

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SOUTH SIOUX CITY, Neb. (5/3/11)--A Nebraska credit union's "give back" to the community campaign turned out to be popular Friday when it was coupled with these magic words: "Free Gas." Siouxland FCU 's latest give-back effort provided $3,000 worth of $20 gas cards at Kum and Go' pumps in Sioux City. Twenty dollars in free fuel went to the first 150 drivers stopping by the gas station. Most were surprised to get the $20 off, and some said they were excited about it. Troy Bloch, marketing director of the $138 million asset, South Sioux City-based credit union, told KMEG14 that with gas prices at $4 a gallon, the credit union thought that people would really respond to the free gas. According to the television station, "Friday's event was a huge success. All of the free gas was guzzled up in about half an hour. " To see videos of the run on the pumps and more information about Siouxland FCU's give-back campaign, use the links.

CU System briefs (05/02/2011)

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* ALBANY, N.Y. (5/3/11)--New York credit unions and the Credit Union Association of N.Y. took advantage of congressional representatives' visits back to their district recently to pay a visit to first-term U.S. Rep. Chris Gibson (R-20) at his Saratoga Springs office. The group discussed debit interchange and increasing the member business lending cap. Gibson assured the group he is concerned about possible implications of interchange and is research the issue in depth. He asked credit unions in his district to "stay tuned" for action on the issue. From left are: Edward Gilligan, Capital Communications FCU; Linda MacFarlane, Columbia Greene FCU; Paula Stopera, Capital Communications FCU; CUANY President/CEO William J. Mellin; and Gibson. (Photo provided by the Credit Union Association of New York) … * ST. LOUIS (5/3/11)--Missouri credit unions continued efforts to discuss debit interchange with members of Congress during a recent recess. U.S. Rep. Emanuel Cleaver (D-5) heard about the issue from Pat Yokely, CommunityAmerica CU, during his town hall meeting in Kansas City April 23. Rob Givens of Mazuma CU met with him at a Small Business Administration ceremony April 23 and at a fundraiser on April 17. Carol White (left), president/CEO of Central Missouri Community CU, discussed the issue with U.S. Rep. Vicky Hartzler (right) (R-4) at a Chamber of Commerce reception April 25. Hartzler had four meetings last week with other credit unions also. Credit union advocates also took part in U.S. Rep. Russ Carnahan's (D-3) town hall meeting April 28 in St. Louis. And Missouri Credit Union Association Chief Advocacy Officer Peggy Nalls discussed interchange with U.S. Rep. Lacy Clay (D-1) in Jefferson City April 27. (Photo provided by the Missouri Credit Union Association) … * NASHVILLE, Tenn. (5/3/11)--US Community CU, based in Nashville, Tenn., will open a student-run branch in the fall at Nashville's McGavock High School to provide students real world training in the financial services industry. Students will operate the credit union in the school's hospitality and finance academy in the main hallway for other students and faculty. Ten students have been selected as tellers; they will work during four lunch periods. The credit union will spend $100,000 to renovate the space (The Tennessean via The Republic May 2) … * WISCONSIN RAPIDS, Wis. (5/3/11)--Another phone scam has targeted Bull's Eye CU, based in Wisconsin Rapids, Wis. Members and nonmembers are receiving automated calls seeking personal financial information that could be used in identity theft fraud. President Dave Stark urged recipients not to respond to the scams. The randomly generated calls are not from the credit union and no member information has been compromised, he said in a press release (WSAW.com April 29) …