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Filene report Dont expect retirees to unload stock

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MADISON, Wis. (6/17/10)--Credit unions offering investment services may believe there will be a huge wave of selling of stock as the Baby Boomers begin to fund their retirement. But not so fast, says a new Filene Institute Research Report, Pre- and Post-Retirement Asset Portfolios. The report draws on the Rand Corp.'s Health and Retirement Study, which tracks the asset-selling trends of previous generations. Although stock holding has changed over time in the general population, the holdings among older generations have generally moved in concert, according to the Ben Rogers, Filene research director, in the executive summary of the report. It appears "that the boomers' retirement will be no more or less significant in the equities market than the retirement of previous generations," he wrote. Previous retirement waves indicate that no significant changes to direct stock holdings occur near the time of retirement. Economic theory may assume people will sell off assets to compensate for lost wages and to smooth retirement expenses, but the actual data indicate that real-world behaviors are much more nuanced. For example, half the households studied did not hold stock before or after retirement. However, one in 10 households acquired stock while one in 10 divested of stock. Other findings:
* Households with less than $50,000 in total financial assets hold about 11% of those assets in stock. Those with total financial assets of more than $150,000 have a lower stock-holding rate after retirement than before, indicating they may sell assets to pay for retirement. * A high school education matters in stock ownership. Those with less than a high school education are less likely than those with a high school education to own stocks after retirement. * Households with higher mathematical ability and more wealth tend to hold rather than sell stocks after retirement. * Those with traditional pensions are more likely to directly hold stock than those with defined contributions plans, probably because annuitized retirement plans allow their holders to take more risks elsewhere.
The report indicates that credit unions offering investment services should pay attention to findings that show consumers--especially higher-wealth consumers--maintaining direct stock holdings long after retirement. Although it's tempting to think that members will unload direct stock holdings at retirement, it's also far too simplistic a view, said the researchers. As credit union membership continues to age, it will be increasingly important to cater to members' actual behavior, said the report. While the research suggests that baby boomer retirement surge will not depress the stock market significantly, it's essential to ferret out the individual needs of retiring members. Researchers authoring the report were Jinkook Lee, Filene research fellow and senior economist at RAND Corp.; Arie Kapteyn, senior economist at RAND; Erik Meijer, Ph.D., economist at RAND; and Jung-Seung Yang, a doctorate candidate in economics at Seoul National University, South Korea.

IUSA TodayI cites CUs as way to avoid payday loan trap

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NEW YORK (6/17/10)--Credit unions are among the ways consumers in a bind can raise cash fast and avoid the payday loan trap, says USA Today (June 15). "Many credit unions and community banks offer short-term loans with more favorable rates and terms than payday loans. For example, Alternatives FCU's Credit Builder Loan has an interest rate of 14.25%, no fees, and doesn't have to be repaid for six months," wrote the newspaper's personal finance columnist, Sandra Block. Lauren Saunders, attorney for the National Consumer Law Center, told Block that some banks and credit unions offer loans with competitive rates and terms that aren't widely advertised. If consumers in a bind can convince the credit union or bank there's a legitimate need and a realistic chance of paying off the loan, they may qualify--even with less than perfect credit--for a loan, Saunders told the newspaper. Other payday lending alternatives mentioned included tapping into 401(k)s , and obtaining credit card cash advances. Both have certain drawbacks, including higher fees and interest rates. To access the article, use the link.

Innovation grants deadline is nearing says NCUF

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WASHINGTON (6/17/10)--Credit union organizations now are eligible to apply for new Innovation Grants from the National Credit Union Foundation (NCUF) through June 30. Innovation Grants are aligned with NCUF’s signature program, REAL Solutions, which aims to help the low-wealth achieve financial stability. However, participation in REAL Solutions is not required to apply for a grant. NCUF is seeking grant applications in any of REAL Solutions’ five service areas:
* Education. Innovation Grants assist credit union organizations participating in national financial education programs including Biz Kid$ and the National Endowment for Financial Education (NEFE). They also support initiatives such as financial counseling, product awareness and staff training. * Transaction Services. Examples include check cashing, money orders, pre-paid stored value cards, remittances, second-chance/fresh-start checking and tax preparation. * Savings. Examples include prize-based savings, safe accounts, savings challenges and step-up share certificates. * Credit. Innovation Grants support initiatives that help nonprime borrowers build and improve credit through credit unions. Initiatives include alternative credit reports, citizenship loans, first and last rent loans, flexible loan policies, nonprime used-car loans, score builder loans and thin-file loans. * Homeownership. Examples include foreclosure assistance loans, green loans, Home Loan Payment Relief mortgages, Individual Taxpayer ID Number loans and timely repayment rewards.
“We have added a grant application criterion asking, ‘Can your project be replicated by other leagues or credit unions?’” said NCUF Executive Director Bucky Sebastian. “We’re looking to maximize our funding to help credit unions reach new members and deliver innovative services.” Credit unions, credit union service organizations, state credit union associations, state credit union foundations, and any other organizations owned or controlled by credit unions can apply for the grants. Grant dollar availability depends on how much credit union organizations invest in the Community Investment Fund (CIF). Those interested in applying for grants and/or investing in the CIF can contact Lois Kitsch at 407-616-2409.

Pa. CUs on state Hill interchange a hot topic

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HARRISBURG, Pa. (6/17/10)--Pennsylvania credit unions just concluded two days of political advocacy efforts in the state--and interchange fees was among the issues addressed.
Pennsylvania Governmental Affairs Committee members John Schmidt and Carol Humenick meet with State Rep. Tim Hennessey, center, (R-Chester) during Hill visits after a joint meeting of the Pennsylvania Credit Union Association’s (PCUA) Governmental Affairs and State Credit Union Advisory Committees.
The second day of a two-day joint meeting of the Pennsylvania Credit Union Association’s (PCUA) Governmental Affairs and State Credit Union Advisory Committees featured more than 40 Hill visits Tuesday to representatives at the state Capitol (Life is a Highway June 16). Credit union leaders told lawmakers or staffers about credit unions’ community activities and how they are bettering the lives of their members. Discussion topics included the Credit Union Better Choice program--a payday loan alternative--savings and loan rates, and the impacts of credit card and mortgage reform. The interchange amendment to the Senate version of the financial regulatory reform bill came up because the state has several programs that use prepaid debit cards. Also, the state is researching using purchasing prepaid cards (P-Cards) to pay vendors directly to reduce administrative costs, and allow the state to garner revenue from card issuer rebates. Committee members also discussed how card-use costs would be shifted to consumers who are on state benefits--unemployment, public assistance, supplemental security income--and can’t afford it. That cost also undermines efforts to move low- and mid-income individuals into mainstream banking, PCUA said.
Bruce Foulke (left), vice chairman of the Pennsylvania Credit Union Association’s (PCUA) Governmental Affairs Committee, greets Trey Hawkins, vice president of political affairs for the Credit Union National Association, at a joint meeting Monday of PCUA’s Governmental Affairs and State Credit Union Advisory Committees. (Photos provided by the Pennsylvania Credit Union Association)
On Monday, the committees received an update on the status of the state and federal political advocacy efforts, including interchange, financial reform, and the state budget, along with pending regulatory issues from the National Credit Union Administration (Life is a Highway June 15). Trey Hawkins, vice president of political affairs for the Credit Union National Association, discussed upcoming elections. Nationally, there are 13 open Senate seats and 39 open House seats for the 2010 election cycle. There also are 14 competitive Senate races and 69 competitive House races. In Pennsylvania, both the U.S. Senate race and the 7th District seat are toss-ups. There are six seats that are deemed vulnerable, PCUA said. Hawkins touted ways for credit unions to get involved in the political process: campaign involvement, voter drives, and direct action to members--endorsements and promotion.

Outstanding pros volunteers honored in New York

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Vicki O’Neill (left), president, ACMG FCU and Marion Smith, vice president and assistant treasurer, Melrose CU, were honored with the Professional of the Year Award by the Credit Union Association of New York. (Photos provided by the Credit Union Association of New York)
ALBANY, N.Y. (6/17/10)--The Credit Union Association of New York honored outstanding credit union professionals and volunteers, along with winners of the Dora Maxwell Social Responsibility and Louise Herring Philosophy in Action awards, during its annual meeting and convention in Cooperstown, N.Y., last week. Vicki O’Neill, president, ACMG FCU, Solvay, and Marion Smith, vice president and assistant treasurer of Melrose CU, Briarwood, received the Outstanding Professional Awards. Recipients of Outstanding Volunteer Awards were:
* Kenneth L. Putt, founding member and long-time volunteer leader, Olean Area FCU; * Hobart Rhinehart, the longest-serving board member at CCSE FCU, Salamanca; and * Pamela Wiss, director and chairperson of the supervisory committee at Palisades FCU, Pearl River.
Recipients of the Dora Maxwell Social Responsibility Award from the Credit Union Association of New York are, from left: Marsha Brauer, CEO, Clarence Community & Schools FCU; Joseph Toochin, board member and Elisabeth Philippe, business manager and public relations manager, United Nations FCU; Mario DiFulvio, president/CEO, Horizons FCU; Kate Burke, marketing specialist, GHS FCU; and Christina Sauve, community development coordinator, Cooperative FCU.
Winners of the Dora Maxwell Social Responsibility Awards were:
* Cooperative FCU, Syracuse, first place,$5 million to $20 million in assets; * Clarence (N.Y.) Community & Schools FCU, second place, $5 million to $20 million; * Western New York FCU, West Seneca, first place, $20 million to $50 million; * Horizons FCU, Binghamton, first place, $50 million to $100 million; * GHS FCU, Binghamton, first place, $100 million to $200 million; * United Nations FCU, Long Island, first place, more than $500 million; and * Visions FCU, Endicott, second place, more than $500 million.
Louise Herring Philosophy in Action winners were:
The Credit Union Association of New York’s Credit Union Volunteers of the Year are Kenneth L. Putt, Olean Area FCU, Hobart Rhinehart, CCSE FCU and Pamela Wiss, Palisades FCU.
* Clarence (N.Y.) Community and Schools FCU, first place, $50 million and under in assets; * Bethex FCU, Bronx, second place, $50 million and under; * GHS FCU, first place, $50 million to $250 million; and * Visions FCU, first place, $250 million or more.
Speakers at the meeting included Pete Crear, president/CEO of the World Council of Credit Unions, who offered an international view of the movement; Johnny Bench, baseball hall of fame member; and Peter Schutz, former president/CEO of Porsche AG. Schutz noted that credit unions can remain innovative and competitive by getting extraordinary results from ordinary people who are impassioned and invested in the larger vision of their organization.

CU blog turns table on groups duck ads

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JACKSON, Mich. (6/17/10)--Calling it "a bunch of quack," a credit union has turned the tables on the efforts of a group to link the interchange debate to the credit union tax exemption. Credit unions across the nation Tuesday and Wednesday reported receiving a fax of an ad (which originally appeared in the Washington political journal, Politico) from a group calling itself "American Family Voices." The faxed ad features a duck with a cigar in its mouth giving the old "if it walks like a duck" argument used for years by banks in the tax exemption debate. The aim of the ad is to support the interchange amendment, which would allow the Federal Reserve to set interchange fees. Credit unions and other small financial institutions contend the amendment would hurt their debit card programs and force more fees on consumers. But, at American 1 FCU, that tactic of faxing the ad backfired. The $173 million asset credit union in Jackson, Mich., pushed back in its blog and produced its parody of the faxed ad. The parody is pictured here. It says, "American Family Voices doesn't know quack." "We got a funny fax the other day from American Family Voices, a lobby group that's looking to enact interchange reforms that could hurt our debit card program," the credit union's blog says. "Pretty goofy, right? So goofy it relies on that ol' banker trick of trying to paint credit unions as do-gooder banks. AFV is trying to do two things at once: dig up the outdated banker argument, and ...spin it to fit their interchange views. It's a bunch of quack," the blog added. The blog outlines the points in the fax and refutes them. At the fax's claim that "this is not your grandfather's credit union," the credit union responds. "Well of course not--is growth a bad thing? Credit unions have grown partly due to customers' disgust with big banks, but our industry is still dwarfed [by] the for-profit banking industry." The blog continues: "We've already made our position on interchange clear, and we can argue about the merits of that all day long. But tying us together with the 'big Wall Street banks that helped caused the financial crisis'? I don't think so." The Credit Union National Association (CUNA) and credit unions strongly oppose the interchange amendment, which would allow the government to intervene in setting fees, damaging credit unions' and small institutions' debit card programs and forcing consumers to pay more as a result. Credit unions have generated more than half a million contacts with lawmakers about interchange since May 24. Also Wednesday: A letter signed by more than 130 members of the House, from both sides of the aisle in support of the credit union position on interchange, was made public.

Political leaders expert to address Maine convention

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WESTBROOK, Maine (6/17/10)--The Maine Credit Union League will hold its 72nd Annual Meeting and Convention Friday and Saturday in Portland with a theme that highlights the opportunities the state’s credit unions provide to their members and communities. The theme, “Maine’s Credit Unions--Opportunities Rock,” highlights the growing popularity and benefits of credit unions. During the past two years, the financial services industry has seen many changes, said the league. As a result, credit unions have provided consumers with many opportunities not found with other financial institutions--such as a continued source of lending, fewer fees and better rates. The role and value of Maine’s credit unions continue to attract positive attention and increased interest from the existing 600,000 Maine credit union members and also from non-members, the league said. During the two-day event, U.S. Rep. Michael Michaud (D-Maine) and U.S. Rep. Chellie Pingree (D-Maine) will speak to the more than 600 credit union representatives. Both U.S. Sens. Olympia Snowe (D-Maine) and Susan Collins (D-Maine) are expected to send videotaped messages. On Saturday, Mark Sievewright, senior vice president of Fiserv Inc., a provider of information management and technology solutions for credit unions, will be the keynote speaker. Sievewright, with 30 years in the financial services industry, will discuss the challenges and opportunities facing credit unions in the next decade. The convention comes at a time when the Maine credit union system is not only strong but is getting stronger, said the league. Year-end statistics for 2009 show that total assets grew 9% and combined assets at Maine credit unions topped $5 billion. Loans grew by more than $106 million or 3% for the year, while shares increased by 11% or $450 million--nearly double 2008’s growth. Membership at Maine credit unions increased by 5,296 members or 1%. Today, about half of Maine’s population are members of credit unions. Credit unions account for two thirds of the state’s financial institutions.

CU System briefs (06/16/2010)

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* CHESTERFIELD, Mo. (6/17/10)--First Community CU's new Short Message Service (SMS) Text Banking service already has more than 150 members signed onto the service since its launch early in May (The Missouri difference June 16). The service allows members to check account balances and recent transactions anytime, anywhere. The member's mobile device must be enabled with the SMS Text Message service. First Community is offering the service free, other than standard text messaging fees from members' mobile carrier. The credit union added mobile banking and online chat last year. "This is just one more convenient way for members to do their banking," said Glenn D. Barks, First Community president/CEO ... * RALEIGH, N.C. (6/17/10)--Coastal FCU has promoted Chuck Purvis to executive vice president/chief operating officer. With 29 years of credit union experience, Purvis has been part of Coastal's senior management team since 2001. He most recently served as senior vice president/chief operations officer. Purvis is vice chairman of First Carolina Corporate CU and a board member of uGenius LLC, a company that provides video banking technology to financial institutions. He also is former chairman and board member of the National Credit Union Foundation. Purvis has held other senior management positions at various credit union organizations. Coastal is a $2 billion asset credit union based in Raleigh ... * HARRISBURG, Pa. (6/17/10)--Reuben H. "Harry" Miller, longtime volunteer, director and employee at Eagle One FCU, died June 8. Miller was employed by the Philadelphia-based credit union in 1983 and moved on to become a volunteer, serving 12 years on the board, said the Pennsylvania Credit Union Association (Life is a Highway June 15). He served the credit union for more than 27 years. Miller was the father of Eagle One Treasurer Marion Nuss and grandfather of Buddy Nuss, a longtime Eagle One employee ...