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Three of four consumers clinging to paper statements

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SAN FRANCISCO (6/3/08)--While many credit unions are turning their operations green and encouraging their members to do the same, old habits die hard. Three out of four consumers still cling to their paper statements. A new report released Monday by Javelin Strategy & Research found that green banking habits have yet to take hold. The San Francisco-based firm noted that if every U.S. household stopped receiving paper bills and statements, they would save 687,000 tons of paper every year--enough to circle Earth 239 times. The report found that consumers aren't aware of how they can make a difference, and financial institutions have yet to find incentives that compel consumers to participate. "Most consumers want to do the right thing, but if the process appears confusing or inconvenient, they simply aren't going to bother changing their habits," said Mark Schwanhausser, research analyst at Javelin Strategy & Research. Of the 13 companies mentioned in the report, five are credit unions: Credit Union One of Oklahoma, Oklahoma City; Sound CU, Tacoma, Wash.; Star One CU, Sunnyvale, Calif.; Technology CU, San Jose, Calif.; and Vancouver City Savings CU, Vancouver, B.C. The Green Banking Report's key findings:
* Three out of four consumers receive paper statements; * Of those surveyed, 34% said they switched to electronic statements to reduce their impact on the environment; * 43% said they are more likely to do business with companies they perceive to be green; * 22% said green initiatives cement the bond they have with their bank; * 60% of "green bankers"--consumers who say environmental impact is "extremely important" in purchasing and banking decisions--are women; and * 64% of "skeptics"--consumers who are "very less likely" to be more loyal to their bank because of its environmental activities--are men.
Availability, accessibility and complexity are the key challenges stalling the adoption of green banking behavior, said Javelin. It advised financial institutions to focus on products and promotions that speak directly to environmentally conscious consumers. These include "green audit" calculators to help consumers compute the environmental impact of their banking behavior, a one-stop paper statement shut-off option for all accounts and green banking marketing campaigns that reward consumers for eco-friendly practices.

Ohio governor signs payday lending law

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COLUMBUS, Ohio (6/3/08)--A bill that would place new restrictions on payday lending in Ohio was signed by Gov. Ted Strickland Monday. The law would limit borrowers to four short-term loans per year. It also caps annual interest rates at 28%(Associated Press June 2). Payday lenders had charged borrowers $15 for each $100 on a two-week loan--an annual interest rate of 391%, the news service said. “The league continues to impress upon legislators that the mission of credit unions is separate from that of a payday lender,” John Kozlowski, Ohio Credit Union League general counsel, told News Now. “Credit unions have always focused on an overall financial relationship with their members, and the governor and the Ohio General Assembly have been receptive to our mission.”

CU System briefs (06/02/2008)

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* HERNDON, Va. (6/3/08)--With its headquarters decorated in yellow ribbons and American flags, Northwest FCU (NWFCU) employees
Click to view larger image Click for larger view
celebrated the return on May 19 of fellow employee Joshua Speights (shown here) to work after a year-long tour of duty with the Army Reserve in Iraq. Speights was stationed at Baquaba, Iraq Dilyah Province. NWFCU rolled out the red carpet with a large "Welcome Home Joshua" banner hung high on the building as a tribute to Speights and his service. At an employee luncheon, Speights told the group, "I can't thank NWFCU enough for the warm homecoming, and all the care packages and cards while I was away. They made my time away from home a little easier. Knowing that you have a strong support group makes a difference. I am grateful and happy to be home." According to President/CEO Gerrianne "Winky" Burks, "We are proud to have him home and thrilled he is home safely." … * LOS ANGELES and IRWINDALE, Calif. (6/3/08)--The boards of First City CU, Los Angeles, and SCE FCU, El Monte, Calif., announced Friday they have signed a letter of intent to merge the two credit unions. Both credit unions are strong and growing, and have similar asset sizes, complementary membership bases and branch networks, as well as healthy balance sheets, the boards said. The combined credit union will have $785 million in assets and serve 80,000 members in the greater L.A. area. SCE FCU CEO Dennis J. Huber will become CEO of the new combined organization, which will retain the First City name and state charter. All employees of both credit unions will continue employment with the combined credit union. The merger is pending approval of state and federal regulators and SCE FCU's members … * BOWIE, Md. (6/3/08)--The Tire Industry Association (TIA) announced that its members and employees are now eligible to join the $889.1 million asset, Bowie, Md.-based NASA FCU. TIA's members will have access to all the credit union's services, including: competitive rates on deposits and loans, free online bill pay, Visa credit cards with low fixed rates, and account access nationwide at more than 1,900 branches in 43 states as well as surcharge-free ATM access at more than 5,300 7-Eleven store ATMs. TIA members and employees and their immediate family and persons living in the same residence are eligible. TIA represents all segments of the tire industry … * CHAGUANAS, Trinidad & Tobago, (6/3/08)--The government of Trinidad & Tobago has intervened with support for a struggling cooperative, Hindu CU, nearly three years after thousands of members began demanding their deposits back. The credit union paid out about $420 million. Finance Minister Karen Nunez-Tesheira confirmed that the government would assist the credit union. Hindu CU had asked for a $71 million loan that would be collateralized by real estate assets (Trinidad Express June 1) … * ANTIGUA (6/3/08)--Antigua police are questioning two suspects in the kidnapping Sunday night of a credit union manager at gunpoint. She allegedly was bound, gagged and forced into the trunk of her car, then taken to Community First Cooperative CU Monday morning. There the robbers forced her to open the credit union's ATM. The abductors left with an estimated $200,000, police said (Antigua Sun June 2) …

WOCCU extends WYCUP Scholarship deadline to June 12

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MADISON, Wis. (6/3/08)--The deadline for nominations for the World Council of Credit Unions' (WOCCU) Young Credit Union People (WYCUP) Scholarship Program has been extended to Thursday, June 12. The WOCCU Scholarship will be awarded to five recipients at the 2008 World Credit Union Conference in Hong Kong. Winners earn an all-expenses-paid trip to the 2009 World Credit Union Conference in Barcelona, Spain. The WYCUP Scholarship Program is part of WOCCU's commitment to ensuring the future sustainability of the international credit union system. It seeks individuals 35 years of age or younger who have made significant contributions to the development of their own credit unions, regional or national credit union systems, and who have demonstrated the potential to employ their unique talents at the international level. Credit unions and credit union organizations that are WOCCU members can nominate their next generation of credit union leaders to compete for the WYCUP Scholarship. To be eligible for the scholarship, nominees must:
* Be sponsored by their credit union or credit union organization to attend the conference in Hong Kong in July; * Be 35 years of age or younger as of Jan. 1, 2008; and * Submit a completed nomination form and supporting materials to WOCCU no later than June 12.
All WYCUP nominees will be formally recognized in Hong Kong and invited to take part in events, including a networking session, organized for participants 35 years of age and younger. Registrants in this age group qualify for a discounted registration fee regardless of whether they compete for the scholarship. For more information, use the link or contact Liliana Tangwall at 608-395-2043 or ltangwall@woccu.org.

Study CUs ahead of competitors on mobile banking

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BOSTON (6/3/08)--Mobile banking in financial institutions is still lagging behind the growing rate of mobile phone use in the U.S. But credit unions are leaders in the mobile banking efforts surfacing so far, according to a new study. Of the 260 financial institutions studied, 39 institutions--or 15%--provide mobile banking, noted Mercator Advisory Group Inc.'s report, "U.S. Mobile Banking: Sedate Growth, Disruptive Potential." Mercator is based in Boston (Cardline May 30). The study found that 23% of the largest credit unions have mobile-banking services. That compares with 17% of the largest banks and none of the largest community banks, according to the report. In 2007, roughly two million Americans were mobile-banking subscribers, fewer than the 3.7 million the Mercator Advisory Group had predicted last year. The report's author, George Peabody, noted that last year not enough financial institutions offered mobile banking. But he predicted steady growth of mobile-banking users of 33.1 million by 2012. Poor marketing and lack of consumer awareness about mobile banking may prevent mobile banking from succeeding, Peabody said. Financial institutions aren't promoting their mobile banking on their websites, which would lure Generation Y customers, he said.

ICU MagazineI names its 2008 CU Hero of the Year

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MADISON, Wis. (6/3/08)--Lynda Milton, CEO of Houston Teamsters FCU, is Credit Union Magazine’s 2008 CU Hero of the Year. She’ll receive her award at (and complimentary registration to) the America’s Credit Union Conference June 29-July 2 in New York City. Nominated for the award by her peers, Milton has spent 41 years saving, serving, and supporting small credit unions. Also honored as credit union heroes were Bill Myers, former CEO of Alternatives FCU, Ithaca, N.Y.; Larry Stapleton, CEO of Southeast FCU, Bristol, Tenn.; and Mendell Thompson, CEO of America’s Christian CU, Glendora, Calif. To nominate a credit union hero, visit creditunionmagazine.com or contact Credit Union Magazine Managing Editor Sue Lanphear at slanphear@cuna.com. Qualified individuals:
* Are credit union employees or volunteers; * Are working or retired; * Are unsung heroes, going above and beyond to promote credit union philosophy; * Take a stand or exhibit a firm belief in credit union values; * Show dedication to credit union principles; and * Make a difference in the local community.

MDDCCUA presents Maxwell Herring Desjardins awards

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COLUMBIA, Md. (6/3/08)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) Annual Awards Program presented three state-level Credit Union National Association recognition awards Wednesday. The awards honor credit unions for their efforts in the areas of common philosophy in daily operations, and youth financial literacy. First-place winners advance to the nationals. Dora Maxwell Social Responsibility Award:
* First place, $20 million-$50 million assets: Allegany Co. Teachers FCU, Lavale; * First place, $100 million-$200 million assets: Chessie FCU, Cumberland; * First place, $500 million or more assets: State Employees CU, Linthicum; * Second place, $500 million or more: MECU of Baltimore; and * First Place, CU Organization: Credit Union Miracle Day Inc., Washington, D.C.
Louise Herring Award for Philosophy in Action:
* First place, $100 million-$300 million assets: Chessie FCU; and * First place, $500 million or more assets: MECU of Baltimore.
Desjardins Youth Financial Education Award:
* First Place, $500 million or more assets: MECU of Baltimore; and * Honorable Mention, $500 million or more: State Employees CU.

ColoradoWyoming associations in new headquarters

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DENVER (6/3/08)--The Credit Union Associations of Colorado (CUAC) and Wyoming (CUAW) have moved to a new headquarters building in Denver, occupying a fully renovated 1929 historic structure just four blocks from the Colorado Capitol.
The Credit Union Associations of Colorado and Wyoming have moved to a new headquarters building in Denver, occupying a renovated 1929 historic structure just four blocks from the Colorado Capitol. (Photo provided by the Credit Union Associations of Colorado and Wyoming)
The move culminates a multi-year effort by the associations to improve the visibility of the credit union movement. “When I was hired in 2004, the board of directors of the Colorado association put this move high on our agenda, and for obvious reasons,” said John Dill, president/CEO of CUAC/CUAW. “Our old headquarters in Arvada was a great facility when it was opened in 1972, but it no longer addressed two of our critical missions--advocacy and visibility.” The new facility will answer both of those needs while still providing the necessary parking and on-site training at the facility, which credit unions have come to expect from their statewide trade associations, Dill said. The new facility is also “right-sized” for the needs of CUAC/CUAW in the 21st century--containing approximately 23,000 square feet, or roughly half the size of the old facility in Arvada. “When we had functions such as check and item processing and office supplies, we needed that extra room in the suburbs,” Dill said. “In 2008, we need to be close to our elected officials and able to easily brand credit unions as the preferred financial service provider in our two states.” Known as the “Casa Grande” building, the historic 1929, four-story structure reflects an architectural design by Denver architect and master builder Walter H. Simon. The facility was Class C office condos before it was purchased by the credit union group. An old underground parking garage has been renovated and will be used as a state-of-the-art training facility, which will be named “The Sterner Center,” after Bill Sterner, the recently deceased chairman of CUAC. The building is owned by Credit Union Strategic Partners (CUSP), the league service corporation that services both Colorado and Wyoming. The cost of the renovation was paid out of the reserve funds of CUSP. “The associations offered old furniture, shelving, file cabinets and supplies to the credit unions in Colorado and Wyoming, and several smaller ones took advantage of that offer,” said Dill. The old facility has been sold to an investor and will be occupied by a charter school. The associations will plan a grand opening later in the summer, and will host VIPs and other credit union leaders at the facility during the Democratic National Convention in Denver in August.

N.J. CUs help families send Web greetings to soldier dads

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HIGHTSTOWN, New Jersey (6/3/08)--New Jersey credit unions are helping send free online greetings from military children, spouses and families to soldier dads for Father’s Day. The program, Operation Father’s Day Salute, invites families into a recording studio to record a 10-minute greeting June 9-13. The greetings will be sent using the studio’s encoded high-speed Internet connection. The soldiers can view and respond to the greetings through instant text messaging, or access the greetings at a later date. Families can reserve their recording session prior to the event by visiting www.operationbestwishes.com. Operation Father’s Day Salute is sponsored by the New Jersey Credit Union League, with additional support from CU Abstract, CUNA Mutual Group, East Coast Business Lenders, P.W. Campbell and Sprint.

E-scan Opportunity in refinancing toxic mortgages

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MADISON, Wis. (6/3/08)--Credit unions should focus on mortgages and other loan products that are more insulated from the economic downturn, according to the Credit Union National Association’s (CUNA) 2008-2009 Credit Union Environmental Scan (E-Scan). The E-scan, which offers issues and trends affecting the financial services industry, is used by credit unions to prepare for strategic planning sessions, budgeting, product development and new initiatives. Top insights from this year’s report are:
* Economy--The economy will continue to present challenges for credit unions as it recovers from a mild but longer-than-normal recession. Negative trends likely in the coming year include rising delinquency and loan losses, falling net-worth ratios and net income, and a weak labor market; * Housing--To address problems in the U.S. housing market, the government must adopt regulatory changes that protect borrowers and maintain a competitive industry, as well as bring back market discipline and transparency; * Lending--Credit union loan growth will slow to 5% in 2008 and 6% in 2009; loan delinquency rates will rise, especially in areas with the biggest housing price corrections. To ensure future loan growth, it’s essential that credit unions do a better job of building relationships with Generations X and Y, and look for opportunities in business, student, and mortgage lending; * Earnings--Credit union return on assets is expected to fall to 0.53% in 2008, as deteriorating credit quality and slower loan growth reduce earnings to the lowest level since 1980. Credit union capital-to-asset ratios are expected to decline from a record high in 2007. Most credit unions have built strong capital cushions over the past decade and should let that cushion protect their credit unions during this temporary decline in net income; * Membership growth--Membership growth was 1.7% in 2007, but factoring out new members who enter fields of membership through the indirect lending channel, membership growth rates appear to be on the decline. About 53% of credit union CEOs say superior service is their most successful strategy for attracting new members and improving the bottom line; * Competition--Credit unions are part of a mature industry whose numbers are shrinking as an aging business model constricts new growth opportunities. Large retail banks and other competitors have immense resources that are far beyond the reach of most credit unions unless they innovate and collaborate; * Collaboration--When surveyed informally, two-thirds of CEOs of large credit unions identified collaboration among credit unions as critical or very important. Credit unions will be well-positioned for the future if they leverage their members’ loyalty and their reputation as consumer advocates and look to their rich cooperative heritage and opportunities for collaboration to reduce costs and to subsidize the price tag of innovation; * Regulation--Although focusing on lending, credit unions’ analysis of all types of third-party vendors before contracting with them and during the life of the contract will be a high priority for National Credit Union Administration examiners in 2008 and beyond; * Legislation--The Treasury Department’s plan to overhaul the financial regulatory system would call for the creation of a “prudential financial regulator” and a new type of charter that would consolidate the national bank, federal savings association, and federal credit union charters. Opposed to the plan, CUNA received assurances from House Financial Services Committee Chairman Barney Frank (D-Mass.) that any proposal to do away with credit unions “will go nowhere”; and * Technology--Financial institutions will increase their technology spending at a slower pace than previous years. Credit unions are committing the greatest percentage of their technology budgets to software needs (26%), followed by hardware (23%), data/voice communication (14%), and online banking (11%).
The E-Scan analysis is divided into key issue areas: competition and collaboration, demographics; economics; marketing; lending; technology; products and services; payment systems; human resources; and legislation and regulation. It covers more than 50 key credit union topics and 125 strategic implications for planning. The E-Scan is available in report, PowerPoint presentation, and DVD for use in planning, presentations and discussions. The PowerPoint presentation contains more than 100 slides that can be mixed and matched to meet specific needs. The 30-minute video provides an overview of the report. New this year is the E-Scan Strategic Planning Kit to help guide credit unions through a step-by-step strategic planning process to achieve actionable short- and long-term goals. In addition to the planning guide and accompanying resources, the kit also includes the DVD and 12 copies of the E-Scan report. For more information, use the resource link.

NYIB annual conference set for July

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FARMERS BRANCH, Texas (6/3/08)--The National Youth Involvement Board’s (NYIB) annual conference is set for July 28-31 at Caesars Palace in Las Vegas, with many business opportunities for credit unions. In addition to speaker and breakouts dedicated to youth marketing and financial education outreach, credit union staffers can gain leadership experience and recognition for youth outreach, said the Texas Credit Union League (TCUL) (LoneStar Leaguer June 2). With the average credit union member’s age (47) about 12 years older than the average American’s (35), credit unions have a need to attract younger people--not only in membership, but also in staff and volunteers, TCUL said. A report by the Credit Union National Association (CUNA) found that one in 100 credit union board members is under 30, and only 40% of nonmembers are familiar with credit unions--indicating a potential shortage of professional staff, as well as members. NYIB Chair John Faries, Space Age FCU, Aurora, Colo., issued a call for leadership opportunities within NYIB, and for logging all youth outreach programs on the organization’s website. The NYIB Executive Committee is made up of a chairman and six regional coordinators from regions across the country, serving two-year rotating terms, Faries said. “The coordinators oversee their region of the U.S. and keep in touch with their league liaisons. “It’s through the regional coordinators that some information is disseminated to leagues, credit unions and individual network members,” he continued. “Regional coordinators provide more of a local connection to NYIB, in addition to our listserv and website.”

Minneapolis may get first Muslim CU next year

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MINNEAPOLIS (6/3/08)--Minneapolis is slated to become the home to the first Muslim credit union in the U.S. The city’s African Chamber of Commerce--which is planning the credit union--currently has a database of 1,500 people who support the credit union, said Martin Mohammed, executive director of the chamber (Northwestern Financial Review May 15). The chamber’s five-year strategic plan drafted in 2007 calls for the formation of a credit union in an unspecified Minneapolis location in 2009. The credit union would provide services to people who are unbanked and families and establishments that conduct business according to tenets of Islamic law. The credit union will institute creative ways to adhere to religious restrictions that prevent Muslims from collecting interest on savings or paying interest on loans, Mohammed said. There is a significant Muslim population, not only in Minneapolis, but in the U.S., Mohammed said. He said the Minneapolis credit union can become a model for credit unions nationwide--particularly in California and Michigan in which there are significant Muslim populations--on how to provide financial services to Muslims.

IN.Y. TimesI to mortgage buyers Look at options like CUs

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MADISON, Wis. (6/3/08)--When seeking a mortgage, home buyers should look at options they haven’t thought of before, such as credit unions, according to a Sunday article in The New York Times. Organizations such as credit unions may offer buyers good rates and can help buyers through the loan process, the newspaper said. “Leave no stone unturned,” said Keith Gumbinger, vice president of HSH Associates, a mortgage research company, in the article. Lenders are interested in traditional buyers who will document their income and assets and don’t have large debts, he added. Sunday’s article, “What You Need to Know to Get a Mortgage,” focused on the challenges faced by many first-time buyers and sellers looking to move on to a new home. Because of the high rate of foreclosures, some buyers will have to look beyond the traditional mortgage options to finance their homes. Some banks now request 15% to 20% down on a home, compared with past estimates of 5% to 10% down, the newspaper said.