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CU System briefs (06/30/2014)

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  • WASHINGTON (6/30/14)-- The U.S. Census Bureau gave a nod to the 80th anniversary of the signing of the Federal Credit Union Act during its daily "Profile America" feature. The 60-second audio clip, "Credit Where It's Due," said, "Consumers' options for managing their finances were greatly broadened on this date in 1934 after President Roosevelt signed the Federal Credit Union Act the day before, promoting the nationwide formation of credit unions. These differ from banks by being member owned and controlled. Credit unions are nonprofit institutions where groups of people can save, borrow, and obtain other financial services" ...
  • ALBANY, N.Y. (6/30/14)-- Twenty-three young members of Capital Communications (CAP COM) FCU, Albany, N.Y., received more than $57,000 in college scholarships last week. The $1.08 billion-asset credit union reviewed 474 applications for $2,500 Weidner "Ed" Davis Scholarships--which went to 20 winners--and three Harold Horning Scholarships worth $2,500 each. "As more and more families struggle to invest in their children's future, supporting access to quality education has become a primary focus for CAP COM," said President/CEO Paula Stopera. "The CAP COM Cares Foundation has contributed more than $500,000 to support educational initiatives and scholarships in our community because we believe education is one of the best gifts we can give the next generation of leaders" ...
  • MORRISTOWN, Tenn. (6/30/14)-- Police in Morristown, Tenn., are looking for the suspects in the theft of an ATM from a Consumer CU branch ( WATE-TV June 27).  According to a police report, officers responded to an ATM alarm early Friday morning at a branch of the $344 million-asset credit union. When police arrived, they found a forklift--parked behind the credit union--and no ATM to be found. Surveillance video captured suspects pulling into the parking lot with a white Dodge pickup and a CAT forklift. The suspects then removed the ATM and loaded it into the back of the pickup, which appeared to have Florida plates. The forklift had been stolen from a nearby construction site ...

SRO expected at RBC session: ACUC launches today

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SAN FRANCISCO (6/30/14)--Of all the events slated for the Credit Union National Association's America's Credit Union Conference, which kicks off today, perhaps none is more anticipated than a session covering the National Credit Union Administration's controversial risk-based capital (RBC) proposal.

Click to view larger image NCUA Chair Debbie Matz (far left) speaks to a capacity crowd at the agency's Listening Session in Los Angeles.  The regulator told credit unions that there is no race to finalize a RBC plan and said there will be changes to the proposal. Larry Fazio, director of the NCUA Office of Examination and Insurance, also spoke at the Listening Session and will be addressing the proposal at America's Credit Union Conference in San Francisco this week. (California and Nevada Credit Union Leagues Photo)
Interested attendees, who have streamed into San Francisco's Union Square from far and wide to attend one of CUNA's two marquee annual conferences, will listen in on a panel discussion on the proposal; a discussion that will feature Larry Fazio, NCUA director of the Office of Examination and Insurance.

The discussion panel, which also features CUNA's Interim Chief Economist Mike Schenk; Vice President of Legislative Affairs Ryan Donovan; and Deputy General Counsel Mary Dunn, will take place at 2 p.m. Tuesday. The conference runs through Thursday.  

The original RBC proposal would rewrite Prompt Corrective Action rules, substituting risk-weighted asset and capital requirements for the current system of risk-based net worth requirements. The rule would apply to federally insured, "natural person" credit unions with more than $50 million in assets.

While the original proposal could dramatically affect credit unions, NCUA Chair Debbie Matz reiterated Thursday during a spirited administration Listening Session that "everything is (still) on the table" in regards to possible revisions of the plan ( News Now June 27).

But the lesson in risk-based capital, and its implications for credit unions, is far from the conference's only draw.

Four influential leaders will headline the week's keynote speaking lineup as well, including:
  • Marcus Luttrell, a former U.S. Navy Seal whose harrowing story was recently captured on silver screens throughout the country in the movie "Lone Survivor," 10:30 a.m. Thursday;
  • Steve Farber, the "Extreme Leadership" guru, 5 p.m. today;
     
  • Simon Sinek, leadership author and adjunct member of the Rand Corp., 10:30 a.m. Tuesday; and
     
  • Amber MacArthur, digital media expert and TV show host, 10:30 a.m. Wednesday.
Other noteworthy happenings:
  • Reality Fair: Credit union professionals will organize a simulation for kids that illustrates what it's like to live through poverty, 8:30 a.m.-12:30 p.m. today;
     
  • Discovery/education sessions, including: "Engineering the Right Branch Experience," 8:30 a.m., Tuesday; "Integrating Mobile into Your Loan Growth Strategy," 3:15 p.m. Tuesday; and "Integrated Market: How to Create Killer Campaigns for Young Adults," 1:45 p.m. Wednesday;
     
  • Three "Young Leaders" sessions; and
     
  • Other breakout events covering community events, cloud computing, Hispanic marketing, compliance and cybersecurity risks.
Be sure to visit News Now and Credit Union Magazine frequently this week to keep up with all the ACUC action in San Francisco. You can also follow ACUC on Twitter using the handles and hashtag below:

Hampel: CUs are for everyone-including athletes, their families

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TULSA, Okla. (6/30/14)--Quoted in a Tulsa World op-ed piece, Credit Union National Association Interim President/CEO Bill Hampel debunked claims by the American Bankers Association (ABA) that professional athletes don't deserve membership to a credit union specific to their needs.
 
ABA President/CEO Frank Keating wrote a piece in the June 23 issue of The Hill , claiming pro athletes' salaries are too high for them to be eligible for credit unions serving those of "small means." Keating was referring to the National Credit Union Administration's recent preliminary field of membership approval to Players Choice FCU, which would have a multiple common bond of organizations focused on professional and amateur sports ( News Now May 27).
 
However, as Hampel pointed out in Wayne Greene's June 25 column, "Is the (American Bankers Association) suggesting that high-paid, high-profile athletes and others should only be allowed to obtain financial services from banks? Hmm. Not much of an image builder for the banking industry, desperate to rid itself of the rap that it doesn't care much for everyday people."
 
Hampel also noted that there are many pro athletes--including minor league baseball, basketball and soccer players--who have quite low incomes.
 
Tulsa World author Greene himself wrote, "Financial literacy training for pro athletes is a good idea. The NFL, PGA, NBA and Major League Baseball should take responsibility for that immediately."
 
According to Leagues of Their Own, which is a sponsor of the proposed credit union, 85% of athletes are at least a quarter-million dollars in debt and divorced, resulting in financial distress within five years after their career ends.
 
The original idea for a credit union that would serve a membership of professional athletes began with Stacy Fielder August, who believes the credit union can provide needed financial literacy as well as financial services. August was married to retired baseball player Cecil Fielder, who ended up penniless after career earnings of about $47 million. August also is the mother of current Texas Rangers player Prince Fielder.

CU groups announce plans for ICU Day

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MADISON, Wis. (6/30/14)--With the theme of "Local Service. Global Good." International Credit Union (ICU) Day will celebrate the more than 200 million credit union members worldwide Oct. 16.
 
"This year's theme: 'Local Service. Global Good.' underscores how credit unions' community focus makes an impact around the globe," said Credit Union National Association Interim President/CEO Bill Hampel, noting that this year's celebration will be extra special as U.S. memberships hit the 100 million mark this summer.
 
"International Credit Union Day brings together the power of over 200 million worldwide members, 101 countries and a mission-driven message," said Brian Branch, president/CEO, World Council of Credit Unions. CUNA and the World Council collaborate on the annual event, which takes place on the third Thursday of October.
 
This year, ICU Day will be hosted in conjunction with the Shop for Miracles fundraiser which supports Children's Miracle Network (CMN) Hospitals. "CMN Hospitals touch the lives of families across the world," explained Felicity Guerin, development manager of Credit Unions for Kids. "We are delighted to be involved in this year's celebration, and to bring to life the notion of 'Local Service. Global Good.'"
 
CUNA Vice President of Market Research and Consumer Education Kristina Grebener said, "It's a great time to say thank you to loyal members and share the credit union story with your local communities."

Using CUNA's tools and resources, any credit union interested can make a local impact this fall.
 
Credit unions can get involved by hosting in-branch and community events, participating in the Shop for Miracles fundraiser or initiating a small business day. Use the resource link for more information.

Small-biz owners benefit from CU's 'Park City Challenge'

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MERRILL, Wis. (6/30/14)--Park City CU, Merrill, Wis., with $144 million in assets, is using a $7,000 grant from the Wisconsin Credit Union Foundation and additional funding from Wisconsin Valley Chapter of Credit Unions to advertise and deliver the value of the credit union difference to local small businesses.
 
As part of what it calls the "Park City Challenge" the credit union used a REAL Solutions Initiative Grant from the foundation to open 27 new business memberships and more than $1 million in new member business loans (MBL) in a little more than three months. It used radio ads, billboards and printed materials to point to a microsite that calculates how much small businesses can save on financial services by joining a credit union.
 
For example, some local businesses had been paying $200 in monthly fees--around $2,400 a year--because of per-item fees that banks charge on checking.
 
"If you're a grocer, you're getting hit hard when you pay individually for checks over the 150 per month limit imposed by some banks," Melissa Wrycha, Park City CU vice president of sales and marketing, told the Wisconsin Credit Union League ( The League June 27).
 
Credit unions' lower loan rates are also attractive for small business, Wrycha added. "Saving a half a percent doesn't sound like a lot on a loan, but over 10 or 15 years that could be tens of thousands of dollars," Wrycha said.
 
Park City CU branch managers and member service representatives have been trained to approach local businesses leaders to inform them that they can realize these types of savings by switching to a credit union. "The typical concern is things being botched up by switching financial institutions, but we assure them we're their partner so that everything clears and there are no problems," Wrycha said.
 
By reaching out to small businesses with which they have both personal and professional relationships, credit union staff put a personal touch into explaining how member-ownership in a financial cooperative can help small business owners as well as the community.
 
For example, credit union employees urge local businesses to offer a program that gives small businesses' customers extra rewards points for shopping locally using the credit union's debit cards. So far, the credit union has also sent 30 cash mobs to small businesses that benefit from a concentrated increase in local spending.
 
Cash mobs are pre-planned events that connect consumers with local businesses. Consumers meet at a business, check out the goods and, hopefully, make purchases.
 
The Credit Union National Association and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. CUNA and credit unions say that increasing the cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.
 
Wrycha urges other credit unions to apply for a REAL Solutions Initiative Grant to expand awareness about credit unions and more consumer-friendly services to new and financially underserved markets.
 
REAL--Relevant, Effective, Asset-building, Loyalty-producing--Solutions is a statewide initiative to help Wisconsinites build financially strong, self-supporting families and communities by offering innovative services and programs.
 
On a national level, REAL Solutions is the signature program of the National Credit Union Foundation. REAL Solutions works through state credit union leagues to help credit unions make the difference for members, families and communities.

Consumers 'confused' by debit overdraft charges: Pew survey

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PHILADELPHIA (6/30/14)--In the four years that checking account holders have had to opt-in for debit-card overdraft protection, consumers still are confused about the process and associated fees. In fact, according to a recent survey by The Pew Charitable Trusts, more than half who paid an overdraft fee in 2013 don't remember agreeing to the service.
 
"Checking accounts are the most widely used financial product in the country, yet many consumers are still concerned and puzzled by bank overdraft practices," said Susan Weinstock, director of Pew's Consumer Banking Project ( CNBC.com June 27).
 
Since 2010, financial institutions need to have the approval of account holders to process debit card transactions when the account has insufficient funds.
 
Faced with the choice of being declined or paying an average $35 fee, 68% of survey respondents preferred that a transaction be declined. Consumers paid an average of $69 in total fees for the last time their account was overdrawn--likely because once the account goes into the red, more fees are assessed as overdrafts domino through the account.
 
Eighty percent of those who overdrew their accounts were most concerned about the high cost of a penalty fee, the fee associated with "extended" overdrafts for failing to repay a negative balance on time and the process of transaction reordering, Pew noted.

CMG Foundation awards $1.2 million grant to UW, Madison schools

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MADISON, Wis. (6/30/14)--Education in Madison, Wis., just received a hefty boost thanks to CUNA Mutual Group, which recently donated $1.2 million to the Madison School District and the University of Wisconsin-Madison School of Education to cultivate a program that will train, keep and develop new teachers.

The donation, which was the largest ever made by CUNA Mutual's foundation, was announced Thursday at Wright Middle School in Madison.

"This is also the largest opportunity we'll ever have to make a difference in the future trajectory of our community and especially the young people who live here," Steve Goldberg, CUNA Mutual Foundation director, told the Wisconsin State Journal (June 26).

The program, "Forward Madison," will pair mentors and coaches with new teachers to enrich their professional development. It also establishes a program that will pave the way for district students to become teachers in Madison themselves.

Organizers hope the program will broaden ties between the university's education program and the local school district as well.

CUNA Mutual's donation, which will fund the mentoring component of the program, will cover 150 new teachers for the next three school years, with the hope that by the end of the three-year period a sustainable model for the program will have been carved out, according to district spokeswoman Rachel Strauch-Nelson ( Wisconsin State Journal ).

The school district and the university also will each contribute nearly $500,000 to the program.

"We liked the idea of helping students succeed by helping their teachers succeed," Goldberg told the Journal. "This will also attract a workforce that reflects more completely the demographics of the students they are teaching."

Students invested in CU's stock market simulation

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DANVILLE, Pa. (6/30/14)--Service 1st FCU, Danville, Pa., with $233 million in assets, and the Pennsylvania Credit Union Foundation awarded the Shikellamy School District a $5,000 grant to offer the Stock Market Game Program (SMGP) to district students in the 2014-15 school year.
 
The SMGP is offered in conjunction with EconomicsPennsylvania, a financial literacy and economic education service provider accredited by the National Council on Economic Education, the Pennsylvania Credit Union Association reported ( Life is a Highway June 27).
 
The program is used in fourth grade through high school classrooms  nationwide to teach economics, math, social studies, language arts and technology, while focusing on the importance of developing real-world, personal-finance skills.
 
Students start with a virtual cash account of $100,000 and strive to create the best-performing portfolio using a live-trading simulation. In building a portfolio, students research and evaluate stocks, and make decisions based on real Internet research and news updates. Players work together in teams, practicing leadership, organization, negotiation and cooperation as they compete.
 
Service 1st FCU acknowledged Rep. Lynda Schlegel-Culver (R-Sunbury) for her interest in the program. The idea for the grant was the result of dialogue Service 1st had with Schlegel-Culver on the importance of educating students about financial matters.
 
"As parents, educators, government representatives and financial institutions, it is important that we invest the time, energy and resources into teaching our children financial literacy," Schlegel-Culver said. "Looking at our youth as the future leaders of our communities, our commonwealth and our country, it is imperative they understand money, banking and investing. This knowledge will empower them with the skills to make informed financial decisions."
 
The grant is the second Service 1st FCU and the foundation have worked together on. The first grant was in 2009 to promote financial literacy in the Danville Area School District.