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CU System briefs (06/04/2010)

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* JACKSON, Miss. (6/7/10)--Sarah Dale Simpkins, 22, of Starkdale, Miss., has been chosen as the first Young & Free Mississippi spokesperson by Credit Unions of Mississippi. As spokesperson for the state's 18 to 25 year olds, Simpkins becomes a contract employee of the Mississippi Credit Union Association (MSCUA). She will serve as a reporter and advocate for her age group, attending events and creating regular online videos and writing blogs to keep YoungFreeMississippi.com an information hub for the 25-and-younger set. "I am so impressed with the videos, blogs and posts Sarah made during the spokesperson search," said Charles Elliott, MSCUA CEO. Simpkins won the competition with 48% of the online public voting. Other finalists were Aaron Dollar, 25, of Long Beach, and Josh Butler, 24, of Byram. They will receive iPod Touches or cash for their work during the competition ... * MADISON, Wis. (6/7/10)--UW CU announced it will purchase the Equitable Bank property in Waukesha, Wis., to become the credit union's fourth branch in Milwaukee and 18th branch location in Wisconsin. "Our strong balance sheet allows us to expand service to the Milwaukee community with the purchase of a new location that will provide our more than 8,500 members and University of Wisconsin alumni living in the area with added convenience," said President/CEO Paul Kundert. UW CU will open the full-service Waukesha branch in Summer 2011. It will include drive-up lanes and surcharge-free ATMs. The credit union's purchase of the property does not include customer deposits, loans or investment center, which will remain with Equitable Bank ... * WILKES-BARRE, Pa. (6/7/10)-- Michael L. Pesta of West Pittston, Pa., died Wednesday at the age of 79. He was CEO of the UFCW FCU, Wyoming, Pa., for 29 years until his retirement in 1995. Pesta is survived by his wife, a daughter, and two grandchildren. Services were held Saturday in Exeter, Pa. (The Wilkes-Barre Times Leader June 3) ...

AARP IConsumer ReportsI Time to check out CUs

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NEW YORK (6/7/10)--Credit unions are the place to go if you want to move your money, AARP Magazine tells its 47 million readers in its July/August issue. The sentiments are echoed in the July issue of Consumer Reports. In "The Little Banks That Can," AARP cites "three compelling reasons" to switch: lower fees, higher interest rates on deposits and better service. "As it turns out, you are likely to find all three at some of the smallest financial institutions in the nation: credit unions," says the two-page article. The article references data from the Credit Union National Association (CUNA) about how much consumers save using a credit union rather than a bank. It also cites CUNA's online credit union locator at creditunion.coop and CU Infosight's findacreditunion.com. It provides several favorable quotes and anecdotes about credit unions. "The average consumer does much better at a credit union than a bank," said Ed Mierzwinski, consumer program director at U.S. Public Interest Research Group. Curtis Arnold, founder of CardRatings.com, a credit card information website, said, "I'm a big fan [of credit unions]. Unlike a lot of banks, most credit unions don't try to cross-sell you products you don't really want." The article also addresses the credit unions' interest in raising the member business lending cap, discusses credit unions' "can-do attitude," and suggests checking for CO-OP Network membership to access surcharge-free ATMs. In Consumer Reports' July issue, "When to Bail on Your Bank" discusses the "Move Your Money" campaign to get consumers to switch from big banks to smaller institutions, including credit unions. While big banks may have better online banking, "there are great deals at local banks and especially at credit unions," said the article. It cites the benefits of better card rates, higher yields on savings and low rate loans, and it links to both creditunion.coop and findacreditunion.com. Use the links to access the articles.

IAPI circulating IDenver PostI item on battle to lift MBL cap

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DENVER (6/7/10)--An article in The Denver Post Friday about credit unions' efforts in Congress to lift their member business lending cap to 25% of assets from 12.25% has been picked up by the Associated Press and is circulating the country. The item has appeared in The Daily Times in Farmington, N.M., on Syracuse.com in Syracuse, N.Y.; NJ.com in New Jersey; as well as in Alabama.com and Mississippi Press. The article reports estimates from the Credit Union National Association (CUNA) that lifting the cap would create more than 100,000 jobs and increase small-business lending by $10 billion within a year. "We feel like this is the first time since the cap was put in place that we have an opportunity to get something done," Pete Kirchhof, interim CEO of the Credit Union Association of Colorado, said in the article. "All the right people are saying the right things, but we have to just wait and see what happens." The article also reports that Stacy Hamon, a salon owner, and her husband Bob received a $25,000 loan from Westminster (Colo.) FCU in 2006 to expand their business after three banks turned them down. "The credit union stepped in and took a chance on us when no one else would," Hamon said. "They saved us. As small as we were, I don't think we could have kept the doors open with everything going on during the last two years."

Thompson named CEO at Mid-America CU Association

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BISMARCK, N.D. (6/7/10)--Mid-America Credit Union Association (MACUA) has named Robbie Thompson as president/CEO, the association announced Friday. Thompson, currently vice president general counsel of Members Cooperative CU, a $280 million asset credit union based in Cloquet, Minn., has almost 20 years in the financial services industry. Previously, he served as association general counsel of the Minnesota Credit Union Network (MnCUN). He also served as senior vice president of league services and general counsel at the New Jersey Credit Union League. While there, Thompson provided legal advice and support to the league, and oversaw several areas of the association, including the education department, compliance and legal department, foundation, and small credit union initiative. Thompson also has been a speaker at numerous local and national conferences on compliance and legal topics and has published articles in a number of publications. "Robbie brings a tremendous amount of credit union and association management experience to our organization," said MACUA Board Chair Doug Thompson. "His background in working directly in credit unions as well as association leadership and his 'hands on' experience in professional trade association advocacy will be a valuable asset to our credit union members across the Dakotas," he added. "Credit unions face many challenges in the years ahead, but also have many opportunities," said Robbie Thompson. "A strong MACUA now and in the future will help credit unions both address those challenges and find those solutions. I want to put a significant focus on MACUA being a strong advocate both politically and in our communities for credit unions. I look forward to getting to work and hearing from the credit unions in North and South Dakota about the direction they hope to see MACUA take in the future." Minnesota Credit Union Network President/CEO Mark Cummins noted that he was pleased to see a former MnCUN employee and credit union senior staff member "continuing his career in the movement. Through his leadership, I look forward to developing a close working relationship with our neighboring credit unions in North and South Dakota." "Robbie understands the operational, marketplace, and political challenges credit unions are facing," said New Jersey league President/CEO Paul Gentile. "He will be a great leader for North and South Dakota credit unions during these very interesting times." MACU, headquartered in Bismarck, serves 78 credit unions with more than 442,000 members and assets in excess of $4.38 billion.

Four CMIS directors re-elected

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MADISON, Wis. (6/7/10)--Four directors were re-elected to positions on the CUNA Mutual Insurance Society (CMIS) Board of Directors at the annual policyholder meeting May 27. CMIS directors re-elected to three-year terms included:
* Bert Hash, president/CEO, Municipal Employees CU of Baltimore Inc.; * Alan Peppers, president/CEO, Westerra CU, Denver; * Farouk Wang, Buildings & Grounds Management, University of Hawaii; and * Larry Wilson, president/CEO, Coastal FCU, Raleigh, N.C.
Other CUNA Mutual board members include:
* Loretta Burd, president/CEO, Centra CU, Columbus, Ind.; * Eldon Arnold, retired president/CEO, CEFCU, Peoria, Ill.; * Joseph Gasper, retired president/chief operating officer, Nationwide Insurance; * Robert Marzec, retired audit partner, PricewaterhouseCoopers; * Victoria Miller, retired executive vice president and chief financial officer, Turner Broadcasting System Inc.; * Randy Smith, president/CEO, Randolph-Brooks FCU, Live Oak, Texas; * James Zilinski, retired chairman, president, CEO, Berkshire Life Insurance Co.; and * Jeff Post, president/CEO, CUNA Mutual.

CU establishes fund for oil spill wildlife recovery

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PENSACOLA, Fla. (6/7/10)--A Florida credit union that says it can't sit idly by and wait for others to solve the oil spill crisis has committed $50,000 for a matching donation fund to assist the Wildlife Sanctuary of Northwest Florida in its recovery efforts from the spill. "We wanted to create an opportunity for the community to double the amount they give to the Wildlife Sanctuary," said Pensacola-based Gulf Winds FCU President/CEO Chris Rutledge. "When they give through our website, we will match the gift dollar-for-dollar, up to a total of $50,000." The aim is to take the $50,000 pledged and turn it into a $100,000 donation "with help from the Gulf Coast residents," Rutledge said. Rutledge and several Gulf Winds staffers toured the Wildlife Sanctuary recently. "We were very impressed with the facility and the work they are doing,” said Rutledge. "The Wildlife Sanctuary has been a part of this community for over 28 years and will be here long after the BP (British Petroleum] cleanup operation has left the area. "We know that the Wildlife Sanctuary will be assisting and doing all they can do to protect, restore and rehabilitate wildlife that will be affected by this disaster," said Rutledge. "Our wildlife cannot wait while lawsuits are settled. They will need our help now and long term." Although reports indicate that BP has committed to covering the costs associated with the oil spill incident, including the wildlife cleanup, the Wildlife Sanctuary is preparing for a potentially overwhelming amount of work. Dorothy Kaufmann, Wildlife Sanctuary director, said her staff and volunteers are working closely with many collaborating organizations in the recovery efforts. It already has received injured birds from Tri-State Rescue and Research, an organization contracted by BP to rehabilitate wildlife in this incident. "The birds and other animals can't be released to the wild immediately," says Kaufmann. "The oil is still out there. We will be ready to nurse the animals back to health and if needed, hold them until it is safe to release them." The sanctuary is a non-profit organization that has served Northwest Florida since 1982. It does not charge for its services and relies on contributions to stay open. The money is used to build facilities, and for grounds upkeep, medical supplies and food. During a normal year, the sanctuary takes in 3,000-4,000 injured or sick animals. Staff expect a big increase this year. Donations can be made at the resource link. The credit union said 100% of the donation goes directly to the local sanctuary.

SECU top CU in nation for PFI penetration loyalty

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RALEIGH, N.C. (6/7/10)--An annual membership survey indicates that State Employees' CU (SECU) has a 97% member satisfaction rating, with 87% of members saying they are "very satisfied" with the credit union's services. The survey responses also put SECU in the top spot among credit union peers for membership loyalty. The annual survey, administered by the Credit Union National Association (CUNA) Research, polled 5,000 randomly selected SECU members on quality of service, use of SECU products and overall satisfaction with the credit union. It saw a marked increase in the members who indicated the credit union was their primary financial institution (PFI)--77% of members consider SECU as their PFI. CUNA Research noted this places SECU at the top when compared with the average 53% PFI rating established by credit union peers. SECU's PFI figure also spearheaded an increase in the percentage of members considered "highly loyal," to 56%, compared with the industry average of 24%. "SECU's 'Do the Right Thing' approach to offering low-cost, affordable financial services on a non-commissioned basis is unique in today's financial marketplace and allows SECU employees to serve as trusted advisers to members," said Jim Barber, SECU board chairman. "The positive survey results acknowledge that our members welcome this approach and are increasing their utilization of the credit union's consumer friendly products," he added.

Report SECU of N.C. saved members 551M in 2009

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RALEIGH, N.C. (6/7/10)--State Employees' CU (SECU) based in Raleigh, N.C., helped its members save $551 million last year, according to a report written by a professor of finance and management at the University of Alabama. Dr. William E. Jackson III is also the Smith Foundation Endowed Chair of Business Integrity in the Culverhouse College of Commerce at the university. Jackson documented savings for SECU members in several categories, including lower loan rates, higher deposit rates, lower fees, and benefits to members from the credit union's Salary Advance Program. Members received nearly $48.4 million in the salary advance program alone. He noted lower rates on six types of loans, with more than $193.9 million in loans overall and with substantial savings in mortgage costs. Higher deposit rates provided nearly $200 million in benefits to members through the credit union's money market shares, regular shares, interest checking, share term certificates and individual retirement account (IRA)/Keogh services. Lower fees netted savings totaling $109.7 million through reduced charges on nonsufficient fund fees and credit card fees, as well as low checking account maintenance fees, said the credit union.
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The report also mentioned the value of SECU's Mortgage Assistance Program for members having difficulty keeping up with their mortgages and SECU's participation in the Internal Revenue Service's no-cost Volunteer Income Tax Assistance program for members of modest means. "Even in a year when the economy of North Carolina suffered severe unemployment and was in an economic recession, SECU of North Carolina produced an exceptional amount of financial benefits for its members," said Jackson in the report. He also noted the credit union provided "significant value to all North Carolinians, especially through competitive pressures on other financial institutions, through generous scholarships and grants from the SECU Foundation, and via its 1,100 no-surcharge Cash Points ATM network." SECU "is tasked with bringing value to its members and all North Carolina consumers," said SECU Board Chairman Jim Barber. "We take this mission very seriously and are pleased to see that our credit union's efforts have resulted in such an exceptional value for members. In a year where the citizens of our state faced tremendous economic challenges, SECU responded in a variety of ways to help keep more dollars where they belong--in the pockets of North Carolinians." The full report is on the credit union's website.

League opposes Ohio small-biz bill after CUs excluded

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COLUMBUS, Ohio (6/7/10)--The Ohio Credit Union League is opposing a bill in the Ohio legislature geared to help small businesses raise capital, because the bill excludes credit unions. Members of the Ohio House of Representatives had introduced a small-business initiative to create the Small Business Working Capital Loan Program. House Bill 521 would authorize the state to deposit up to $100 million into eligible lending institutions that have agreed to loan the money to small businesses (e-Lumination Newsletter June 2). Prior to the legislation’s introduction, the league discussed credit unions’ inclusion in any economic initiatives with House and Senate leadership, Gov. Ted Strickland’s administration and key legislators, the league said. However, credit unions were not included in the bill. As a result of being deliberately excluded, league General Counsel John Kozlowski testified in opposition of the bill and informed House members of the league’s opposition. Speaking to the House Economic Development Committee, Kozlowski said, “If the objective of the program … is truly to reach out and provide loans and credit to small businesses in Ohio, why would the state exclude credit unions, many of which are already providing loans and credit to small businesses in Ohio?” House Bill 521 was voted out of committee last week without an amendment to include credit unions. The league said it will continue working with members of the General Assembly to include credit unions in the economic initiative.

Ohio league lobbies to keep separate CU Council

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COLUMBUS, Ohio (6/7/10)--The Ohio Credit Union League said it is lobbying to maintain a separate Credit Union Council in the state to keep the unique needs of credit unions in the forefront. Language to merge the state’s Credit Union Council, Banking Commission, and Savings and Loan and Savings Bank Board into a single Financial Consumer Council was not included in House Bill 495 when it passed out of the Ohio House of Representatives’ State Government Committee (eLumination Newsletter June 2). The league and others worked with representatives from the Ohio Department of Commerce to stress the need for maintaining the current system of three separate entities. Testifying for the league before the committee, General Counsel John Kozlowski said that while “it may appear that the … respective depositories may have many similarities, nothing could be further from the truth. While these depositories do fall under many of the same Federal Reserve regulation, each of the depositories have a different structure, purpose, regulation, laws and rules.” The committee amended the bill to maintain the independent depository boards, and the bill passed the House. It awaits passage in the Senate. The Credit Union Council, created in 1995, comprises six credit union officials from state-chartered credit unions and the Deputy Superintendent of Credit Unions. The council provides advice, makes recommendations on credit union laws and rules, and confirms the supervisory fees assessed to state-chartered credit unions annually.

Filene research on idea flow at CUs holds surprises

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MADISON, Wis. (6/7/10)--Findings from the Filene Research Institute show statistically that good ideas are just as likely to come from the front line as from managers and that job tenure and education levels are weak predictors of who has quality ideas. Research also shows that employees don’t speak up often enough. Therefore, it’s dangerous for leaders to assume they know who at their credit union has good ideas. What’s worse is that many leaders assume good ideas will find them--dangerous again, Filene said. “Employee Voice and (Missed) Opportunities for Learning in Credit Unions” follows an 18-month study by doctorate degree researchers Ethan Burris, University of Texas at Austin; James Detert, Cornell University; and David Harrison, Pennsylvania State University. They solicited ideas from thousands of employees at 11 small to large credit unions, and examined how those ideas were treated by credit union leadership. The results are an in-depth analysis of employee “voice” at credit unions. The researchers describe several findings:
* Demographic and psychological variables--including age, gender, tenure and even education level--do not correspond with idea quality; in other words, good ideas come from everywhere. * About 61% of employees surveyed indicated that they had more ideas than what they ultimately communicated to their supervisors. * Formal upward-reporting mechanisms are less efficient at getting ideas to senior leaders; instead, leaders who actively seek ideas, demonstrate openness, and follow up tend to elicit more voice. * Employees may need coaching to guarantee that they present ideas effectively--for example, by “selling issues” in economic or stakeholder terms and by choosing effective tone and language.
Beyond describing how ideas move in an organization, the research offers four imperatives for leaders to capitalize on in getting ideas from all levels of the credit union. Leaders should:
* Spread a wide net. The research shows statistically that across the 11 credit unions, good ideas are simmering at all levels. * Emphasize voice with mid-level managers. Local managers, especially branch leaders, are critical in getting good ideas to the top. * Actively solicit ideas. Leaders who slide down the organizational chart in search of new ideas, rather than waiting on ideas to bubble up, have much more success. They add to that success by personally following up on quality ideas. * Train for voice. Even a good idea won’t survive poor presentation. Train employees to couch ideas in terms of benefits for the overall organization.
Filene Chief Research Officer George Hofheimer and Filene Research Director Ben Rogers will discuss the report’s findings live Tuesday at 1 p.m. EST. To register for the complimentary live “Lunch with Ed” videocast, use the link.