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CU System Briefs (06/17/2013)

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HATTIESBURG, Miss. (6/17/13)--A women has been indicted for embezzling more than $60,000 while she was employed by University of Southern Mississippi FCU, Hattiesburg, Miss., as a teller (Hattiesburg American June 14). Helen A. Fitzgerald, 55, was initially arrested on an embezzlement charge Dec. 12 by Hattiesburg Police Department officers. An indictment handed down May 14 accuses her of racking up a total of $60,300 in stolen funds between Oct. 31, 2011 and July 20, 2012 ...

Filene Paper Links Member Satisfaction, Share of Deposits

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MADISON (6/17/13)--A new paper from the Filene Research Institute addresses how credit unions can translate high member satisfaction scores into improved share of deposits.

Credit unions spend a great deal of time and money trying to improve member loyalty by measuring and managing metrics like satisfaction and Net Promoter Scores (NPSs), according to the paper, "Linking Member Satisfaction to Share of Deposits: Applying the Wallet Allocation Rule in CUs." As a result, credit unions have far higher satisfaction and Net Promoter levels than their retail banking competitors.

However, despite having consistently higher satisfaction and Net Promoter levels, credit unions hold a small percentage of total deposits relative to their retail banking competitors. Part of the reason for this is that metrics like satisfaction and Net Promoter correlate poorly with the share of deposits that members allocate among the financial institutions they use. This fact runs counter to what most credit union managers believe.

The paper introduces the Wallet Allocation Rule, which takes into account the credit union's rank among all the financial institutions the member uses. For example, if a credit union is one of only two financial institutions a member uses for a given purpose, the rule shows that the difference between being the first choice and being the second can have a major financial impact. In such a situation, even being tied has grave consequences: Half of each dollar the credit unions could be collecting from the member is going to a competitor.

To read the paper, use the link.

Social Media And CU Help Woman Get Lost $1,000 Back

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ST. LOUIS (6/17/13)--A Facebook message sent to Vantage CU in Bridgeton, Mo., by a Good Samaritan helped a member of the credit union retrieve a lost $1,000 in cash.

A tech-savvy person Tuesday night found an envelope full of cash labeled with the credit unions' logo, left at a New York City restaurant, so he sent the $702 million asset Vantage a Facebook message, saying he found the envelope and wanted to return it to the rightful owner (KTVI June 12).

Although the task of finding the owner appeared daunting, the credit union decided to post a message to its Facebook page and use social media the way the man who found the envelope did, Jenn Cloud, Vantage social media specialist, told KTVI.

Inspired by the altruistic gesture of the Good Samaritan, the credit union's members shared and retweeted the Facebook post to help, the station said.

When Jennie Guenzler saw her cash envelope was gone, she backtracked to the restaurant when she realized she had left it at dinner the previous night. Guenzler then received a phone call from Cloud at Vantage who had contacted the New York restaurant. Cloud put Guenzler in contact with the man who had found her cash.

Guenzler gave the man a portion of the cash as a reward for his honesty, KTVI said.

North Carolina League Honors Seven

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RALEIGH, N.C. (6/17/13)--The North Carolina Credit Union League honored Robert S. (Bobby) Hall, who recently retired from State Employee's CU (SECU), Raleigh, N.C., and six other individuals at its annual meeting last week.

Hall received the Larry Johnson Order of Merit Lifetime Achievement Award.  The award, which is the state's highest individual credit union honor, recognizes individuals who have dedicated their careers to promoting the credit union philosophy, and whose leadership to North Carolina credit unions and related organizations has been or was sustained throughout their careers.

Hall served in the credit union movement for more than 43 years--all at SECU.

Four individuals were honored with the Mark of Excellence award, which recognizes sustained leadership among North Carolina credit union people. Eligibility is limited to past winners of the Ronald J. Hutchins Credit Union Person of the Year Award who have at least 25 years of service in the credit union industry.

This year's honorees included:

  • David Campbell, board member, Telco Community CU; Tarboro;
  • Leslie Colin (L.C.) Kelly, board member, Charlotte (N.C.) Fire Department CU;
  • Jack Thornton, board member, Summit CU, Greensboro; and
  • Sam Whitehurst, president/CEO, Summit CU.
David Elliott, the president/CEO of Fort Bragg FCU, Fayetteville, won the Ronald J. Hutchins Award as the outstanding Credit Union Person of the Year. The Ronald J. Hutchins Award is given each year to a credit union professional and volunteer to recognize their outstanding accomplishments, time and effort given in support and promotion of the credit union ideal of people helping people.

Elliott's 35-year credit union career began as a branch manager at Members CU in Winston-Salem. He joined Fort Bragg FCU in 1986 as director of branch operations, and was named CEO of the $409 million asset credit union in 1996.

Wayne Weddington, the chairman of the Internal Revenue Employees' FCU, Greensboro, won the Ronald J. Hutchins Award as the outstanding Credit Union Volunteer Person of the Year.

Weddington, the chairman of Internal Revenue Employees FCU, joined the board of the credit union in 1979, he has served in many positions on the board and as an executive.

Gladwell To Give First Presentation Of New Book at ACUC

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MADISON, Wis. (6/17/13)--Malcolm Gladwell, a keynoter at the Credit Union National Association's 2013 America's Credit Union Conference (ACUC), will do a first-time presentation on his new book at ACUC, the Credit Union National Association announced. ACUC will be held June 30-July 4 at the Hilton New York in New York City.

The New Yorker staff writer and author of four New York Times bestsellers, Gladwell is known for turning conventional wisdom on its head as he does in his soon-to-be-released book, "David vs. Goliath." 

Gladwell was interviewed for a feature article in Credit Union Magazine by Paul Gentile, executive vice president, strategic communications and engagement, at CUNA, which presents the conference.

Credit unions are David to the banks' Goliath, and credit unions should look to use their smaller size to their advantage in a financial services arena that is as unsettled as it ever has been, said author and reporter Gladwell.

"I am interested in the idea that a lot of our intuition about what is an advantage and what a disadvantage is are wrong--that we confuse those two things," Gladwell said. "We can make a list of things that help us or hurt us. I think the wrong things are on the list." 

Future success is not ensured by being more powerful in the marketplace, because bigger is not always better, Gladwell explained.

"True innovation comes from the marginal people who push innovation into the center," he concluded.

In 2005, he was announced as one of Time's 100 most influential people. He is ranked No. 10 on The Thinkers 50 2011, and in 2007 he received the American Sociological Association's first Award for Excellence in the Reporting of Social Issues.

Ohio League Launches Social Media Campaign To Connect Youth With CUs

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COLUMBUS, Ohio (6/17/13)--The Ohio Credit Union League has begun a new social media initiative aimed at bringing credit-union community values to the attention of young consumers.

"There is a disconnect between the next generation of consumers and credit unions," said league Director of Media and Public Relations, Patrick Harris. "Gen-Y and Millenials are itching to get involved, make a difference in their communities, and belong to something. We want to show them there is a movement ready to embrace them."

Your Best Financial Friend, or "Your BFF," looks to connect the community-involvement and sense-of-belonging desires of 18-30 year-old consumers with the philosophical mission of credit unions. The campaign will feature the tagline, "Your BFF would never steer you wrong, and neither should your financial institution."

The Your BFF team strives to create awareness about the social impact of credit unions through three social channels:

  • Facebook: www.Facebook.com/YourBestFinancialFriend will serve as the Your BFF command center, with links to videos of Ohio credit unions serving their communities through charitable events, financial education, reality fairs and seminars. The Facebook page will also share insight into smart financial decisions tailored to a younger audience.   
  • Twitter: @YourBFFs is the real-time hub of activity as the Your BFF team travels statewide, tweeting live updates at credit union events, and upcoming events and important news and updates from the Facebook page.
  • Contests and Events: Your BFF aims to not only push information out to its target audience, but to create interaction. In 2013, Your BFF will challenge its followers to generate a logo and suggest ideas for the "BFF Gift," a one-day statewide charitable event. Also, Your BFF will showcase credit unions in action during a reality-day event at the Ohio Statehouse.
The league is looking to its member credit unions to keep them up to date on events throughout the state. As events occur, the Your BFF team will capture examples of philosophy in action.

"Your BFF is social media in its purest and simplest form," said Stewart. "We are not big budget, but we are full of passion. It is our intention to make sure younger Ohioans see the difference credit unions make in the lives of their members and communities, and help them choose credit unions as their financial partner."

By year-end, Your BFF hopes to garner 1,000 "likes" on the campaign's Facebook page and 500 followers on Twitter.

Belvoir FCU Annual Web Hunt Offers High-Tech Prizes

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WOODBRIDGE, Va. (6/17/13)--Belvoir FCU's Web Hunt game, now in its fourth year, continues to grow. The Web Hunt increased overall visits to the credit union's website to  189,951 during the game from 176,421 last year, a 7% improvement, and page views exceeded the projected 5% increase.

The credit union awarded seven members with high-tech prizes for participating in its the annual interactive game, which asked visitors of the credit union's website to search and collect eight hidden iPads.

When all iPads had been found, the user unscrambled the letters shown to them and inserted the phrase onto Belvoir Federal's Web Hunt application on Facebook.

The credit union set a goal of increasing its Facebook fans by 81 people. At the completion of the Web Hunt, Belvoir Federal achieved 120% of its projected goal. The fans accumulated during electronic pushes, such as the Web hunt, provide Belvoir FCU with the ability to reach members and potential members via on-demand channels such as Facebook.

Belvoir FCU awarded seven prizes for the 2013 Web hunt, ranging from a Windows 8 Touchscreen Laptop, an Amazon Kindle Fire, and five $25 Best Buy gift cards.

CUNA Council Whitepaper Examines Collateral Risk Management

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MADISON, Wis. (6/17/13)--A new white paper from the CUNA Lending Council examines how collateral risk management can be used in an environment in which few financial institutions have been immune to recent dramatic economic effects on loan portfolios and the collateral tied to them.

If a loan is secured by collateral--a home, a car or other personal assets--collateral risk is the chance of loss arising from errors in the nature, quantity, pricing or characteristics of that collateral.

This paper, "Collateral Risk: Insights on Loan Portfolio Monitoring and Management," focuses on the causes of collateral risk exposure, how macro- and microeconomic factors affect collateral risk, risks specific to certain loan types, proactively managing collateral risk, implementing systems, policies, and procedures, National Credit Union Administration requirements, data gathering, and bringing the conversation full circle with a discussion about member outreach.               

Contributing factors to collateral risk are more numerous than the types of collateral, the economic times, and the societal factors that change over time, the paper said. While collateral-risk exposure is most commonly associated with real estate, it noted, for any type of secured loan, managing collateral risk must occur at both the loan and portfolio levels.

The four main risk-collateral "channels" the report describes are:

  • Lender selection--Lenders more often require observably riskier borrowers to pledge collateral to reduce after-the-fact frictions.
  • Borrower selection--"Unobservably safer" borrowers tend to pledge collateral more often to signal their underlying quality.
  • Risk shifting--Borrowers are encouraged to shift into safer investment projects when pledging collateral.
  • Loss mitigation--Collateral reduces losses in the event of borrower default, as the lender is able to recover value from the pledged assets.
For all four, the report noted, the channel should be stronger when the observable economic characteristics of collateral are more desirable. For example, "borrower selection" should be stronger when the collateral is more desirable, because the "unobservably safest borrowers" are expected to choose the lowest loan rates and to pledge the most desired types of collateral.

Corporate Central CU Announces Board At Annual Meeting

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MUSKEGO, Wis. (6/17/13)--Corporate Central CU in Muskego, Wis., held its annual meeting Thursday in Waukesha, Wis., and announced its board of directors.

With more than 70 members in attendance, Chairman Greg Hilbert and President/CEO Robert W. Fouch reported that 2012 was another exceptional year for Corporate Central. The Corporate was able to continue adding to retained earnings and building on the strength of a strong capital position that exceeds all regulatory requirements under the National Credit Union Administration  corporate credit union regulations.

"Your commitment and support have positioned us well for the future," Fouch told meeting attendees. "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."

At the organization meeting held immediately after the annual meeting, the four board members comprising the Executive Committee were determined. They are:

  • Chairman, Greg Hilbert--Fox Communities CU, Appleton, Wis.;
  • Vice Chairman, Kim Sponem--Summit CU, Madison, Wis.;
  • Secretary, Ronald Vogel--Fort Community CU, Fort Atkinson, Wis.; and
  • Treasurer, James Schrimpf-- Brewery CU, Milwaukee.
During the business portion of the meeting, election results stated the time period in which nominations could be accepted had expired, and no additional candidates had been placed in nomination; therefore, Eric Chrisinger, Sponem and Tom Young were declared directors of Corporate Central CU.

Prior to the annual meeting, members also participated in two education sessions. Anthony Gibbs, regional director from the Consumer Financial Protection Bureau (CFPB) presented, "CFPB: Programs, Processes, and Priorities," which provided members with an overview of what regulations are coming into effect and how they will affect financial institutions--specifically credit unions.

Brian Knight, senior vice president and general counsel from the National Association of State Credit Union Supervisors, presented, "The Changing Regulatory Landscape: A National Perspective and Mid-Year Assessment," which provided attendees with a review of the first six months of regulatory activity, focusing on rule changes, guidance issues and examination issues from both a national perspective and across the states.