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CU System Briefs (06/05/2013)

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  • LANSING, Mich. (6/5/13)--Three Michigan credit unions' participation in affordable Housing Advisory Council programs were featured in the council's 2012 Annual Report, said the Michigan Credit Union League. The council is part of the Federal Home Loan Bank of Indianapolis. The bank's member institutions were able to access more than $125 million in grants to help spur more affordable housing and job opportunities. Case CU in Lansing provided a $7,500 Neighborhood Impact Program grant to a member to replace antiquated single-pane windows with new energy-efficient and also to replace a leaky roof. The credit union also provided a $10,000 grant to help a couple replace worn out windows and exterior doors. Communicating Arts CU in Detroit helped a member get a new roof, gutter, downspouts and windows for her home. Also, CEO Bernie Williams of Wanigas CU in Saginaw helped coordinate a revitalization forum for the city of Saginaw to increase awareness of affordable housing programs (Michigan Monitor June 3) ...
  • LEOMINSTER, Mass. (6/5/13)--The board of Leominster (Mass.) CU (LCU) has appointed John J. O'Brien to be the $608 million asset credit union's president/CEO, reported the Massachusetts Credit Union League. He will take over for Carol A. Southworth, who served as interim president/CEO since January. O'Brien came to LCU in 2007 as senior vice president of lending and was responsible for the credit union's consumer, indirect lending and real estate programs, along with collections and loan-servicing operations (Values & Visions May 23) ...

CU's Digital Billboards Provide Weather Updates

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KALAMAZOO, Mich. (6/5/13)--Consumers CU, Kalamazoo, Mich., has partnered with a local television station to sponsor weather forecasts on several media platforms.

Click to view larger image WWMT's three-day forecast now appears on Consumers CU's digital billboards in Kalamazoo and Holland, Mich. The seven-day forecast appears on the credit union's in-office video education monitors. (Photo provided by Consumers CU)
WMMT Channel 3 will feature three-day forecasts on Consumers CU's digital billboards in Kalamazoo, Mich., and Holland, Mich.

Seven-day forecasts will be featured on WWMT Channel 3 newscasts, Consumers CU in-office video education monitors, and in all WWMT online Web and weather applications.

"In just this past week alone, we've had freeze warnings, tornado warnings, and have gone from hot to cold in a matter of an hour," said Kit Snyder, Consumers CU president/CEO. "We take assisting our members in their everyday lives very seriously. This is one more way we can help members plan for their days."

CUs Rock Consumer Satisfaction With Online Sites

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ANN ARBOR, Mich. (6/5/13)--Credit union sites scored the highest in user satisfaction with average scores of 82--or "highly satisfied," in Foresee's Financial Services Benchmark released last week.

The Foresee survey reports on online and mobile customer satisfaction trends for several industry segments, including credit unions, banks, investments and lending companies and miscellaneous financially focused organizations.

The research allows companies to gauge the state of the industry and determine how their online and mobile experiences compare to industry averages. ForeSee, a company that uses technology-driven customer experience analytics, developed the benchmark with data from first quarter 2013 culled from more than 335,000 surveys, in which consumers shared their experiences with online websites, mobile websites and mobile applications.

Overall, average customer satisfaction with financial websites is at 72 on ForeSee's 100-point scale. Scores of 80 and higher are classified as "highly satisfied," while scores of 69 and lower are "dissatisfied." While the industry average score of 72 indicates that many consumers are satisfied with their online banking experience, it leaves room for improvement across the industry, Foresee said.

Investments and lending organizations scored much lower than credit unions with average satisfaction scores of 69 and 70, respectively. Banking and miscellaneous financially focused organizations--such as financial media sites--fell in the middle range, with average satisfaction scores of 71 and 74.

Across all industry segments, highly satisfied customers are more likely to recommend their institution than less-satisfied customers. For example, highly satisfied credit union members are 92% more likely to recommend their credit union, Foresee said.

Highly satisfied customers also are more likely to use the website in the future. Highly satisfied credit union members are 29% more likely to use the credit union again.

Three financial industry segments were measured to calculate customers' "likelihood to use more services," which is a key marker for future growth and long-term satisfaction. Credit union members who are highly satisfied are 75% more likely than less-satisfied members to use more products/services in the future.

To read the full survey, use the link.

NEW: League President Dan Egan To Retire In December

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MARLBOROUGH, Mass. (6/5/13, UPDATED 2:35 p.m. ET)--President Daniel F. Egan, Jr. of the Massachusetts Credit Union League, New Hampshire Credit Union League, and the Credit Union Association of Rhode Island, has announced that he will retire on Dec. 31.

Egan said he will be retiring as the president and CEO of the three trade groups as well as New England Credit Union Services, the jointly owned firm which manages and provides services to the three trade associations.

Credit Union National Association President/CEO Bill Cheney said of Egan, "Dan's long service for credit unions, and particularly his leadership at the state and national levels, has strengthened and enhanced the credit union movement at all levels. While he will be retiring from the movement, his legacy of service and contributions to the movement will no doubt stand for years to come."

Massachusetts Credit Union League Chairman David Surface added that Egan will be greatly missed: "He has been many things to many people in our credit union community:  a leader, an innovator, a consensus builder, and a trusted advisor, to name a few." 

He went on to say, "Fortunately, he has constructed a tremendous foundation and we are confident that his successor will build on the many accomplishments we have seen under Dan's leadership." Surface is the president of St. Jean's Credit Union in Lynn, Mass.

Egan reflected on his 32-year career in the credit union movement, saying, "It's been a true privilege to assist the credit unions in Massachusetts, New Hampshire, and Rhode Island in their mission to provide outstanding financial services. I'm proud to have had a part in this great cooperative effort to improve the financial lives of working families."

A committee comprised of members of the boards of the credit union trade groups from the three states has selected O'Rourke & Associates, a consulting firm headquartered in South San Francisco, Calif., to conduct a search for a new leader.  The firm will begin recruiting immediately and interested individuals should contact Mike Juratovac, chief executive officer of O'Rourke & Associates.

Survey Shows CUs Best In All Satisfaction Drivers

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ANN ARBOR, Mich. (6/5/13)--Credit unions score consistently higher than banks across the board in six areas that drive consumer satisfaction, says a new credit union industry study from CFI Group, a customer satisfaction technology and analytics firm based in Ann Arbor, Mich.

The 2013 Credit Union Satisfaction Index found credit unions scored an overall 90 on a 0-to-100 point scale, significantly higher thant other industries, including retail banking. CFI Group's report noted that it considers scores in the 70s as good, 80s as excellent and 90s as outstanding.

Credit unions had these scores in six areas that drive member satisfaction:

  • Branch staff, 93;
  • Online banking, 92;
  • Information/communications, 90;
  • Products and services, 89;
  • Branch convenience, 85; and
  • Rates and fees, 83.

The report noted that of the six drivers, four are key and should get credit unions' focus.  Online banking contributes 42% toward increasing member satisfaction; branch staff contributes 31%; branch convenience, 17%; and information/communications, 10%.

The index also tells why members joined their credit union:

  • Benefit through employer, 23%;
  • Someone recommended it, 20%;
  • Good rates and fees, 14%;
  • Offerings are right for me, 13%;
  • Convenient location, 11%;
  • More personalized service, 11%; and
  • Other, 7%.

The survey also looks at penetration of products and services among members. Checking and savings products each account for 94% penetration, and debit cards, 73%.  Other products have 30% or less penetration.

The index is powered by the American Customer Satisfaction Index methodology and surveyed 400 active credit union members from across the U.S. between March 13 and March 17. Use the link to access the full report.

Fostering service excellence is one of the three foundations--along with removing barriers and raising awareness--of the national Unite for Good campaign aimed at achieving credit unions' strategic vision in which Americans choose credit unions as their best financial institution, according to the Credit Union National Association. For more information, use the Unite for Good and aSmarterChoice.org links.

Tornado Victims Receive CU Relief: 'Outpouring Of Generosity Is Humbling'

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OKLAHOMA CITY, Okla. (6/5/13)--Credit unions have contributed more than $66,000 to the Oklahoma Credit Union Foundation's Tornado Disaster Relief Fund to assist credit union people who were impacted by a rash of tornados near Oklahoma City the past two weeks.

Tinker FCU's Moore, Okla., branch, gutted by an EF-5 tornado on May 20, will be rebuilt in the same location,, Tinker's senior management and board announced. The branch made national news when 22 people survived the tornado inside a safe deposit box vault--the only thing left standing. The branch is expected to be completed before the end of the year. (Photo provided by Tinker FCU)
"And more more checks are still coming in," said Gary Jones, president/CEO of the Credit Union Association of Oklahoma. So far, the association has delivered $24,000 in grants.

"In the three back-to-back events, we used a short form to get $500  within 12 to 24 hours into the hands of CEOs or management to deliver to individuals, so they have cash in hand for personal things like showers and toothbrushes," Jones told News Now. "Then we prepare a more robust form" to distribute the other funds for longer-term needs.

In the three back-to-back tornado events that hit Shawnee May 19, Moore May 20, and El Reno Friday, the only serious damage was to the Moore branch of Tinker FCU, which was destroyed, said Jones. Other credit unions had interruptions in power, utilities and water and minor damage that did not adversely affect credit union buildings.

However, the human stories are more telling. The Supervisory Committee chairman of a credit union near El Reno told him that after one tornado passed, he and his wife left their shelter only to be confronted with a second storm that tossed them back into their shelter and took their home. They suffered scrapes and bruises but are OK, he said.

Another credit union told him that a comptroller's sister and brother in law were caught in a tornado. While he was putting a mattress over her, he was swept up by the twister and killed.

CUAOK has received an outpouring of generosity from around the country," Jones said, noting generosity of regulators, peers and vendors. "Please convey my sincere gratitude to people across the country. It has been humbling." He told of one credit union in Wichita that arrived with a van full of nonperishable food  and a $10,000 check for the fund.

"I try to personally deliver each check and I see the gratitude of the staff."

Meanwhile, Tinker FCU's senior management and board of directors announced that they would immediately start the process of rebuilding the Moore branch in the same location it previously was located. The facility was destroyed in the EF-5 tornado that hit Moore on May 20, killing two dozen people. Twenty-two people in the credit union survived by seeking shelter in a safe deposit box vault--the only thing left standing once the storm was over.

TFCU officials said they hope to have the new branch completed before the end of the year. The property has already been cleared of debris and the old foundation removed, said Tinker's website.

The new floor plan being finalized will have improved traffic flow, while offering the same services to members as before. The new building will have more than 6,000 square feet, with a safe deposit box vault, a Personal Finance Café, Investment Center and children's play area inside and six drive-thru lanes and an ATM outside.

"I am thrilled we are beginning the construction process so soon," said Assistant Vice President/Branch Manager Jan Davis. "I love the Moore community and the people we have served at that branch since opening in 2005. We're very excited to be staying in the same area."

To contribute to the Tornado Disaster Relief Fund, make checks payable to the Oklahoma Credit Union Foundation, mark them designated for the Tornado Disaster Relief Fund and send them to:

Credit Union Association of Oklahoma

631 E. Hill Street

Oklahoma City, OK 73105

For more information, contact Carrie Buchholz at 405-702-8622, ext. 215, or at carrie@cuaok.org.

Pa. Bill To Legalize Short-Term Loan Alternatives

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HARRISBURG, Pa. (6/5/13)--Legislation that would legalize a new type of short-term loans called "microloans" and place a cap on the loan amount was introduced Friday in the Pennsylvania Senate, reports the Pennsylvania Credit Union Association.

The measure, introduced by State Sen. Pat Brown (R-Lehigh County), would provide an avenue for borrowers to earn their way to longer-term, less expensive loan products, said PCUA (Life Is a Highway June 4).

Legislation to legalize so-called payday loans stalled last year in the Senate after passing the House.

The bill would cap the maximum loan amount to 25% of the consumer's gross monthly income, limit interest rates for each loan at 28%, and restrict fees to 5% of the loan amount. Loans could also be rescinded the next day without penalty or fee and an extended repayment option allowed.

PCUA's Credit Union Better Choice program offers a payday loan alternative that includes financial counseling and required saving with a lower-cost short-term loan.  More than 70 credit unions in the state offer 90-day loans with a $500 limit. Since the program launched in 2006, it has loaned more than 64,000 short-term loans--totaling $32 million--to credit union members.

The program has saved borrowers more than $23 million overusing a traditional payday lending product, said PCUA.

Top 10 News Now Articles For May

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MADISON, Wis. (6/5/13)--Two articles about how credit unions were affected by a tornado that devastated Moore, Okla., were the most-read News Now articles in May.

The top 10 articles for the month:

10. Udall Reintroduces Bill To Increase CUs' MBL Cap

WASHINGTON (5/16/13)--Sen. Mark Udall (D-Colo.) today reintroduced legislation that would increase the credit union member business lending cap to 27.5% of assets, from the current 12.25%-of-assets level.

9. CUNA to CFPB: Avoid One-size-fits-all Payday Regs

WASHINGTON (5/3/13)--While oversight of largely unregulated, predatory payday lenders and their products is overdue, the Consumer Financial Protection Bureau must take steps to avoid crafting one-size-fits-all regulations that would harm credit unions as it addresses payday loan issues, the Credit Union National Association said in a Thursday letter to CFPB Director Richard Cordray.

8. Calif. DFI Warns CUs About Ads' FOM Language

SACRAMENTO, Calif. (5/14/13)--The California Department of Financial Institutions issued a warning about credit unions using certain language about their fields of membership in their advertising.

7. Ways and Means Releases Working Group Tax Reform Report

WASHINGTON (5/7/13)--A 550-plus page report on tax policy reform created by 11 House Ways and Means working groups and delivered to the Joint Committee on Taxation Monday mentions the credit union tax exemption, as expected.

6. CFPB Proposes CUNA-sought Credit Rule Delay

WASHINGTON (5/8/13)--The Consumer Financial Protection Bureau has favorably responded to the Credit Union National Association's recent request that the agency delay a June 1 effective date relating to the prohibition on financing certain credit insurance charges. The provision is contained within the bureau's mortgage loan originator compensation rule.

5. NCUA Releases CU Derivatives Program Proposal

ALEXANDRIA, Va. (5/16/13)--Well-run federal credit unions would be permitted to use simple derivatives to hedge against interest rate risks under a just-proposed National Credit Union Administration program.

4. Final CFPB Remittance Rule Is Effective Oct 28

WASHINGTON (5/1/13)--Oct. 28 will be the effective date for the Consumer Financial Protection Bureau's final remittance regulations, the bureau announced Tuesday.

3. 'Don't Tax My CU' Campaign Mobilizes 96 Million Members

WASHINGTON (5/16/13)--The Credit Union National Association and its affiliated state credit union leagues have launched a large-scale, nationwide grassroots-mobilization campaign urging America's 96 million credit union members to deliver a united message to the U.S. Congress: "Don't tax my credit union!"

2. Oklahoma League On Tornado: 'We're Prepared To Get Through This'

OKLAHOMA CITY, Okla.  (5/22/13)--Three credit unions in Moore, Okla., saw different outcomes when Monday's EF5 tornado swept through with 200 mile-per-hour winds that leveled thousands of homes and businesses in an area as much as two miles wide and 17 miles long.

1. Tinker FCU Branch Destroyed, Assisting Staff And Members

OKLAHOMA CITY, Okla. (5/22/13)--For nearly two dozen staff and members of Tinker FCU's branch in Moore, Okla., Monday afternoon had its moment of reckoning. A half-mile wide tornado bore down on the branch and they took cover in the credit union's safe deposit box vault. After it was over, they were safe and sound, and the only thing left standing was the vault.

CUs Urged To Get Into Mobile Payments

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MADISON, Wis. (6/5/13)--Credit unions are being urged to figure out how they will fit in with mobile point-of-sale (POS) payments--before it is too late, according to a May 28 article in The Financial Brand.

The payments space traditionally has been dominated by credit unions and banks. However, financial institutions already are facing competition from new players in the e-commerce and mobile point-of-sale fields.

While checking accounts still are consumers' key payment mechanism, nearly 15% of online consumers have made a mobile POS purchase in the past 30 days, according Rob Rubin, a partner and head of the banking practice with Novarica and author of the article.

PayPal, for example, has captured 57% of the mobile POS users market because it has courted merchant service providers that provide retailers with POS systems. And Starbucks Corp. has its own mobile payment app to accept payments and allow customers to load money in an account to use at a POS.

How big a threat are these competitors?  Starbucks's mobile card volume has reached 4.5 million payments a week--which it calls a "seismic change" in how consumers use mobile phones and social media (PaymentsSource.com May 29).  The coffee company plans to expand its rewards system to grocery stores. It already is distributing bags of coffee with an attached tag that the consumer uses to earn stars.

"This is just the beginning of integrating card loyalty, social and mobile, in multiple channels of distribution," Starbucks Chairman and President/CEO Howard Schultz told the Sanford C. Bernstein Strategic Decisions Conference May 29.

In 2009, Starbucks began its dedicated card app that worked in 16 stores. In 2010, it deployed the system in 1,000 stories built within Target retail stores before rolling the system nationwide.

The net effect of consumers' ability to load money to use at a POS is a disaggregation of features consumers once associated with their checking provider, said Rubin in The Financial Brand article. "This represents a tremendous risk for banks and credit unions because it whittles down the value of  'primary banking relationships'--essential to growing relationships and revenues," he wrote.

Minnesota CUs' Assets Grew 3.2% In First Quarter

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ST. PAUL, Minn. (6/5/13)--Minnesota credit unions improved their financial strength as measured by nearly every indicator during the first quarter, including asset growth of 3.2% during the first quarter.

Credit unions saw growth in the years since the financial crisis, according to the Minnesota Credit Union Network (MnCUN).

Minnesota credit unions showed growth in these areas:

  • Asset Growth--Minnesota credit union saw 7.3% growth between first quarter 2012 and first quarter 2013.
  • Deposit Growth--Deposits in Minnesota credit unions rose 3.5% in the first quarter from the fourth quarter and had 7.7% growth year over year from first quarter 2012 to first quarter 2013.
  • Loan Growth (Total Loans)--Year-over-year growth in loans made by Minnesota credit unions increased by 3.3% between first quarter 2012 and first quarter 2013, while loans decreased 0.5%.
  • Net Income--Minnesota credit unions are rated as "well-capitalized" by the National Credit Union Administration, with a net worth of 10.19%.
Consumers and businesses are choosing credit unions as their primary financial institution--much the same as they are choosing local restaurants and food co-ops, local businesses and other community-focused options, MnCUN said.

"Minnesotans have always been strong advocates for the member-owned model of credit unions," Mark Cummins, MnCUN president/CEO. "Consumers trust credit unions more than other financial institutions, as they align with their values of local, and not-for-profit financial institutions."

Credit unions submit quarterly data to NCUA. The summary and analysis was compiled by the Minnesota Credit Union Network based on NCUA's Call Report Data.

Malawai CUs Tackle New Reg Compliance Challenges

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LILONGWE, Malawi (6/5/13)--World Council of Credit Unions and Malawi Union of Savings & Credit Co-operatives (MUSCCO) representatives met with state officials in Lilongwe, Malawi, last week to discuss expanding credit union services to rural areas.

Click to view larger image A group of World Council of Credit Unions representatives met with the vice president of Malawi in Lilongwe last week to discuss credit union expansion to rural areas. Representatives included, from left, Brian Branch, World Council of Credit Unions president/CEO; Sylvester Kadzola, World Council director and Malawi Union of Savings & Credit Co-operatives (MUSCCO) CEO; Emmanuel Darko, Ghana Co-operative Credit Unions Association Ltd. general manager; Ingrid Fischer, Canadian Cooperative Association Africa region director ; Khumbo Hastings Kachali, Malawi Vice President; Faith Mang'anda, MUSCCO chair; Charles Kayesa, Malawi registrar of cooperatives; and Alex Gomani, Malawi principal secretary ministry of industry and trade.
Malawi's credit unions, known as savings and credit cooperatives (SACCOs), have taken on new compliance challenges since the country's Financial Cooperatives Bill in 2011 led to a new regulatory framework in April.

Malawi has 46 SACCOs serving 123,540 members and having total assets of roughly $21 million.

Brian Branch, World Council president/CEO, joined World Council Director Sylvester Kadzola, CEO of Malawi Union of Savings & Credit Co-operatives (MUSCCO), a World Council member organization, in a meeting with Malawi Vice President Khumbo Hastings Kachali and Reserve Bank of Malawi Governor Charles Chuka.

"New regulatory forums and structures under new 2012 regulatory framework reflect an increase in regulatory compliance for credit union systems everywhere around the world," Branch said. "National regulatory bodies are working to bring up to international standards the supervision of all institutions that take savings."

Click to view larger image Reserve Bank of Malawi Governor Charles Chuka, left, stressed strong leadership and good governance practices among Malawi's savings and credit cooperatives to Brian Branch, World Council president/CEO.  (Photos provided by World Council of Credit Unions)
During the meeting, Kachali asked for the expansion of SACCO services to rural areas. Chuka encouraged MUSCCO to work on strengthening leadership and good-governance practices among SACCOs. Kadzola stressed the importance of SACCOs in achieving broad-based financial inclusion and building a strong savings base for the country.

The Reserve Bank of Malawi, which acts as SACCOs' regulator and supervisor, issued new regulations in April. Supervision for SACCOs with assets less than $280,000 was delegated to MUSCCO in liaison with the Reserve Bank.

MUSCCO has since instituted regular reporting and examination systems to monitor credit union performance. The new regulatory framework also puts into place a national identification system and credit bureau in which the SACCOs will participate.

Mid-Atlantic Corporate Outreach Models CUs' Efforts

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MIDDLETOWN, Pa. (6/5/13)--The staff at Mid-Atlantic Corporate FCU in Middletown, Pa., has been busy this year modeling the credit union community's "people-helping people" spirit through community outreach initiatives.

"Helping people and their communities is at the heart of credit unions' mission, and it's integral to the credit union brand," said Jay Murray, president/CEO of Mid-Atlantic Corporate. "At our corporate, we offer a wide variety of ways our employees can get involved, but they need little encouragement."

To better organize the activities, the senior team created a community involvement committee for 2013 to develop new ways for the staff to assist in the community.

Among the corporate's 2013 outreach activities organized by the committee are:

  • In February, Mid-Atlantic Corporate hosted a blood drive to support local blood banks. This is an annual, onsite event, and since 1998, it has collected 554 pints of blood.
  • During March, the corporate raised nearly $800 in support of "Daffodil Days," which brings in funding for research and services of the American Cancer Society. Many staffers purchased bunches or pots of daffodils, and 12 employees volunteered their time to sell the flowers in the Pennsylvania State Capitol Building.
  • In April, the corporate offered staff two ways to get involved in National Financial Literacy Month. On April 3, employees who donated $5 or purchased treats at a bake sale could dress in jeans for the day. And April 3-26, staff took part in a "Loose Change Challenge," pitting departments against each other in a coin collection contest. The events collected $728 to support the financial education efforts of the National Credit Union Foundation.
  • Also in April, the corporate celebrated Earth Day and its own "green" initiatives by distributing reusable cups with lids to all staff, sharing a tip sheet offering earth-friendly activities for employees, and planting a tree as a living reminder of the importance of protecting the planet.
  • May offered employees a chance to support the Humane Society of Harrisburg Area. Their efforts resulted in more than 100 items collected to care for and treat pets awaiting adoption.
  • In partnership with the Cumberland Valley Appalachian Trail Club, several Mid-Atlantic Corporate employees and family members volunteered their time to clean and beautify the trail at a work day May 18. The group helped with digging trenches, repairing bridges, hauling shale and removing fallen trees and debris.
This month, the corporate will support Children's Miracle Network (CMN), a key national charity of the credit union movement.

Saturday, employees answered phones and accepted donations at the local CMN Telethon, where the corporate presented its 2012 proceeds in a $15,300 check. On June 15, staff will volunteer and others will run in the Hershey Company's 10th Annual Chocolate Miracle 5K Race to benefit CMN. Also, the corporate's annual golf tournament to support CMN is scheduled for June 20.