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Mainstreet cites regulatory relief, desire for increased service, for charter change

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LENEXA, Kan. (6/20/14)--Citing an encroaching regulatory burden and a desire to serve more consumers, Mainstreet CU will change from a state to a federal charter. The Lenexa, Kan.-based credit union's request for the charter change was granted by the National Credit Union Administration Thursday.
The $353 million-asset credit union will now operate as Mainstreet FCU.
"Being chartered in Kansas and with branch locations here and in Missouri, we must monitor and follow both states' laws and regulations, while also following federal regulations for a federally insured credit union," said Mainstreet FCU President/CEO John Beverlin. "Switching to a federal charter means we only have to concentrate on one set of laws, not three. And it simplifies any future expansion plans we may want to pursue, especially on the Missouri side of the state line."
Mainstreet FCU was chartered in Kansas in 1953 as the Northeast Johnson County Teachers' Union CU. It became a community charter in 1979, open to anyone living or working in Johnson County. It expanded its field of membership in 2005 to include residents of the Kansas City metropolitan area, and then again in 2008 to residents of Douglas County. It became Mainstreet CU in 2011.
About 10% of Mainstreet FCU's current members live in Missouri, but 60% of its potential members live in that state. Mainstreet FCU plans to build three new branches in Missouri over the next four years, and increase its marketing budget by 20% in each of the next two years.
"Once Mainstreet is able to move into Missouri, they plan to target marketing efforts toward that untapped market," said NCUA Chair Deborah Matz Thursday, who called the credit union's plan "a strong commitment."
Mainstreet also has five branches in underserved areas, and commissioned a study of the demographics around 12 of its branches, and used that data to create different products and services tailored to demographics of each branch.
Mainstreet FCU also offers many low-income services, including prepaid Visa debit cards and small unsecured loans. It offered free financial education, which includes setting up a branch twice a week at a local county corrections work release facility, aimed at providing ex-cons with the training needed to create and stick to a budget.

CU System briefs (06/20/2014)

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  • SIOUX FALLS, S.D. (6/20/14)--Service First FCU, Sioux Falls, S.D., with $132 million in assets, was recognized as the first-place winner of the South Dakota Dora Maxwell Social Responsibility Awards. The program recognizes credit unions that have excelled in community relations and are committed to ongoing charitable programs within their communities. The award is named for Dora Maxwell, a credit union pioneer who worked to improve the living standards of the underserved. Service First FCU will move on to the Credit Union National Association's national award competition. The winners are honored at the 2015 CUNA Government Affairs Conference in Washington, D.C. ...
  • HILLIARD, Ohio (6/20/14)--
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    Credit Union of Ohio hosted a community carnival June 13 at its Hilliard, Ohio, headquarters. More than 300 people attended the family-friendly event, which provided free activities for kids of all ages, including 12 carnival game stations, live music, face painting, a bounce house, balloon twisting, prizes, popcorn, cotton candy and a chance to win cash in a money-blowing machine. "We plan at least one large event per year to show appreciation to our members and positively give back to the communities we serve," said Jill Gerschutz, the $134 million-asset credit union's vice president of marketing ...

Workers' CU marks 100th anniversary

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FITCHBURG, Mass. (6/20/14)--Workers' CU, Fitchburg, Mass., was the eighth credit union to open its doors in the United States and it is celebrating 100 years of work this year.  The $1.1 billion-asset credit union has seen new leadership come and go over the last century, but the mission of this member-owned financial institution, to serve its community, has never been altered.
Workers' CU Treasurer J. Gustav Laakso; President of Mass. CUNA Albert Rubin; Executive Director of Mass. CUNA Thomas N. Lowe; Secretary of WCU Savele Syrjala; and President of WCU Eino A. Tofferi, stand around Massachusetts Gov. Endicott Peabody, who signed a bill to increase deposit amounts for credit union members in 1963. (Leominster Champion photo)
Workers' opened in 1914 to serve the local immigrant community, according to Doug Petersen, current president/CEO. The first credit union in the nation--St. Mary's Bank Credit Union of Manchester, N.H.--had been founded only six years earlier (Sentinel and Enterprise June 8).
With language and cultural barriers barring Finnish immigrants from banks, the founder of the credit union, a 26-year-old Finnish man who Petersen has described as having "guts" for trying to cobble together his own financial institution, decided to form the credit union.
The passion of Workers' CU's founder, John Suominen, was captured in the meeting minutes of a 1914 Finnish Socialist Federation meeting held in Fitchburg.
"The existence of workers' banks in America is only a matter of time," Suominen said (Sentinel and Enterprise). "If we consider just the Finnish socialist organizations, newspapers, buildings, cooperatives and all the other efforts in America plus the private savings, we have huge amounts and shining results.
"So it is high time that we begin to organize matters in such a way that the resulting bank will be entirely our own. This is possible only by founding our own bank."
The credit union, which operated primarily in Finnish until 1963, thrived, Petersen told the Sentinel and Enterprise, and had topped $1 million in assets by 1929.
That was five years before the signing of the Federal Credit Union Act--the source of authority for all federally chartered credit unions, which also governs the coverage and terms of all federally-insured credit union accounts.
The act turns 80 on Thursday.  
Workers' was created to serve primarily an underserved immigrant community, but it has evolved into a credit union that now serves the entire region.
The institution gives money and man-hours to the local chamber of commerce, the Boys and Girls Club, Boy Scouts, the United Way and Relay for Life.
Recently, the president of the United Way of North Central Massachusetts, Phil Grzewinski, called the credit union a "Class-A organization" and a major player in community betterment for the region, according to the Sentinel and Enterprise.
The credit union carries on a rich history that has seen political turmoil, wars and the Great Depression, but through it all, has held true to its founding principles of helping neighbors and everyday people achieve their goals, whether it's starting a business, buying a home or paying for an education, Petersen told the Sentinel and Enterprise.

Report: Banks know customers hate them

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MADISON, Wis. (6/20/14)--Banks may often seem oblivious to the enmity they stir up with consumers. But a new report indicates they are at least aware of the impact that a bad reputation may have on their bottom lines.
More than 80% of communications, marketing and investor relations managers at banks, brokerages and other financial services firms said that they think the financial crisis of 2008 is still having a negative impact on their companies, according a survey of banking executives at 225 companies. The survey was done for the public relations and communications firm Makovsky by market researcher Ebiquity and reported by CNNMoney this week.
Those reputation problems have cost banks an estimated 27% in revenue over the past two years, according to Scott Tangney, executive vice president of Makovsky.
But the banks aren't accepting the responsibility for their bad rep. About 55% of the executives surveyed thought regulatory actions, fines and lawsuits were hurting the industry's reputation. State attorneys general and federal regulators continue to go after the industry, keeping banks in the headlines for all the wrong reasons, banks claim.
Still, more than 60% of survey respondents said that improving both customer and employee satisfaction would be a "very important" step towards improving the reputation of banks.
Financial services firms with Wall Street exposure have the most to prove to consumers, Tangney said. JPMorgan Chase, Bank of America and Citigroup have suffered the biggest hits to their reputations in recent years. All have faced multi-billion dollar settlements tied to less-than-reputable banking practices.

McKinsey: FIs must meet consumer needs anytime, anywhere

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NEW YORK (6/20/14)--Consumers have endless, around-the-clock online and off-line options for researching and buying new products and services. Financial institutions, including credit unions, must understand that digital channels no longer simply represent "a cheaper way" to interact with members and customers. Rather, they are critical for promoting, stimulating sales, and increasing market share, according to McKinsey and Company. 
McKinsey says that to keep up with rapid technology cycles and improve their multiplatform marketing efforts, financial institutions must take a different approach to managing the consumer decision journey--one that embraces the speed that digitization brings and focuses on capabilities in three areas:
  • Discover. Financial institutions must apply analytics to the data at their disposal to gain a 360-degree view of their members and customers, McKinsey said. Credit union member engagement strategies should be based on analysis of members' recent behaviors and past experiences with the credit union, as well as the signals embedded in members' mobile or social-media data.
  • Design. Consumers now have much more control over where they will focus their attention, so companies need to craft a compelling customer experience in which all interactions are tailored to a consumer's stage in the decision process.
  • Deliver. Employ "always-on" marketing programs, in which financial institutions engage with consumers in exactly the right way at any contact point along the decision process, and that require agile teams of experts in analytics and information technologies, marketing and experience design.
To get the full member portrait rather than just a series of snapshots, credit unions need a central data mart that combines all the contacts a members has with the credit union brand: basic consumer data plus information about transactions, browsing history, and member-service interactions, according to McKinsey.
"This collection effort requires input from people across multiple functions--a complex undertaking, to be sure, but the payoff can be big," the report said.

LSCU presents annual awards, announces board election results

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BIRMINGHAM, Ala., and TALLAHASSEE, Fla. (6/20/14)--The League of Southeastern Credit Unions (LSCU) made a handful of credit union professionals happy last week, announcing the recipients of its 2014 LSCU Awards. The league also elected its new board members.

The awards recognized professionals, volunteers and individual credit unions that have contributed in an outstanding fashion to the development and growth of the credit union movement in Alabama and Florida.

"The LSCU Awards signify the effort and member-focused approach by each of these recipients," said league President/CEO Patrick La Pine. "They represent some of the best and brightest of our industry and illustrate how credit unions work hard every day to help their members."

The awards were presented June 13 at the Southeast Credit Union Conference and Expo in Orlando.

Recipients included:
  • Larry Scott, past president/CEO, CAMPUS USA CU, Jonesville, Fla., with $1.2 billion in assets, for the Distinguished Service Award, the league's highest honor, which recognizes a credit union professional who has dedicated their entire career to the movement;
  • Arthur J. Wood III, president/CEO, Railroad and Industrial FCU, Tampa, Fla., with $281 million in assets, for the Professional of the Year award;
  • Stephen Taylor, teller and marketing services, Florida State University CU, Tallahassee, Fla., with $149 million in assets, for the Young Professional of the Year award;
  • Lynne April, board member, Alabama CU, Tuscaloosa, Ala., with $641 million in assets, for Volunteer of the Year award; and
  • Baptist Health South Florida FCU, Miami, up to $100 million in assets; First Commerce CU, Tallahassee, $100 to $500 million in assets; and CFE FCU, Lake Mary, Fla., $500 million or more in assets, each were named credit union of the year.
After the expo, which attracted more than 1,100 attendees from four states and featured 136 vendors, the league announced its new board executive committee.

The new members include:
  • Chair: Steve Swofford, Alabama CU;
  • Chairman-elect: Alvin Cowans, McCoy FCU, Orlando, Fla., with $485 million in assets;
  • Vice chair: Tina Williams, Mobile (Ala.) Educators CU, with $77 million in assets;
  • Treasurer: Pat Mason, Sun CU, Hollywood, Fla., with $69 million in assets;
  • Secretary: Bob Steensma, Five Star CU, Dothan, Ala., with $259 million in assets; and
  • Immediate past chair: Mary Ott Wood, Florida West Coast CU, Brandon, Fla., with $86 million in assets.

SBA, Agility partner to offer July 8 'preparedness' webinar

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WASHINGTON (6/20/14)--As part of its ongoing PrepareMyBusiness campaign, the U.S. Small Business Administration is again partnering with Agility Recovery to present an online discussion of how businesses can prepare to blunt the impact of a disaster before it strikes.     

The SBA cites an "overwhelming" Red Cross statistic: 40% of businesses do not reopen after a disaster.  

On July 8, the SBA and Agility will offer a free disaster-preparedness webinar entitled, "The Top 5 Risks to Business in America." Space is limited. A presentation will be followed by a question-and-answer session. (Use the resource link for registration information.)

The Credit Union National Association also offers comprehensive disaster preparedness materials, including a checklist that asks credit unions if they have alternate plans to serve their members' needs if their conventional cash source is cut off, if they have the resources needed to keep their credit union open in the event of a power outage, and if they have the ability to deal with short-term relocation, if needed.

The CUNA disaster preparedness page also links to CUNA Strategic Services (CSS), which offers key products and services to assist credit unions in the event a disaster. SBA and CSS partner Agility Recovery provides disaster recovery services to credit unions across the country.