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Missouri CUs see savings loan growth

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ST. LOUIS (6/10/09)--Missouri credit unions experienced a growth in loans at a time when national loan numbers dropped, according to first quarter 2009 call report data from the National Credit Union Administration. For Missouri credit unions, the first quarter of 2009 saw assets increase 7.1% --to $10 billion from $9.4 billion at year-end 2008 (The Missouri difference June 5). Loans for the state's credit unions rose 0.8% to $6.5 billion from $6.4 billion. Nationwide, credit unions' loans have declined 0.1% to $565.2 billion from $565.9 billion. Other results for the state:
* Investments rose 26.2% to $3.2 billion from $2.5 billion; * Shares increased 6.6% to $8.4 billion from $7.9 billion; * Net worth declined 5.6% to $1 billion from $1.1 billion; and * Membership increased 0.8% to 1.33 million members from 1.32 million at year-end 2008.
"First-quarter statistics support the fact that credit unions are viewed by consumers as a financial oasis during a time of economic stress," said Rosie Holub, president/CEO of the Missouri Credit Union Association. "The performance of Missouri's credit unions demonstrates their commitment to strengthening their communities."

Smaller is better say Massachusetts CUs

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WORCESTER, Mass. (6/10/09)--Small credit unions in Central Massachusetts have not succumbed to the mergers trend, while three merger deals are in the works for area banks. Several credit unions say they likely will remain small and independent. At the $9.8 million asset W-G FCU in Worcester, smaller is better, explained Deborah Beando, manager/treasurer. The credit union knows its members. "We work with them if they are having problems, and the majority of our members stick with us through thick and thin," she told the Worcester business Journal (June 8). It serves several employee groups related to the health industry. W.H. Nichols Employees FCU, a $1.08 million credit union serving employees of the former W.H. Nichols Co. in Devens, focuses on what it does well, said Helen Desrochers, treasurer/manager for the past 47 years. The credit union offers two types of loans: personal and vehicle. Its size prevents it from offering mortgages. Its future is tied closely with that of its corporate parent Parker Hannifin, she said. Leominster Employees FCU, a $12.6 million asset credit union based in Leominster, moves forward because of its service and its relationship with members, said Thomas Clark, treasurer/CEO. It entered the mortgage lending business through a partnership with Allanach Mortgage Group of Nashua, N.H., which offers mortgages for more than 50 credit unions in New England and Florida. Such partnerships make sense for survival and make it easier for small credit unions to stay independent, said Robert Kimmett, senior vice president of public relations with the Massachusetts Credit Union League. Small credit unions traditionally do well because they're well connected to their members but they face challenges because they don't have the same resources and personnel as larger institutions, Kimmett told the newspaper. He noted that the league helps keep credit unions updated on new regulations and legislation and provides group buying for debit and credit card programs and other business services. The cooperative nature works well in efforts such as shared ATM networks and shared branching he said. Use the link for the full article.

New branches in this economy are a success

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MADISON, Wis. (6/10/09)--Some credit unions have announced branch closures as part of their belt-tightening during the recession. But others are experiencing success with newly opened branches--despite the nation's economic turmoil. How do they do it? San Francisco-based Patelco CU is reporting success with its new Financial Resource Center, which opened Feb. 17 in downtown Danville, Calif. The facility is the $4.129 billion asset credit union's 18th branch on the East Bay. Since it opened, more than 525 people have joined the credit union at that location and are taking advantage of its products and services. It attributes its success to a series of community events and to its location. During its first eight weeks of operation, the new branch played host to a number of community events, such as a Pet Adoption Day with Tony La Russa's Animal Rescue Foundation, and a preview exhibition and reception for Danville Open Studios to promote local artists. At its ribbon-cutting ceremony on April 16, five residents played Patelco's Mountain of Cash game for a chance to win up to $50,000. Although no one won the full amount, each contestant took home $250 for participating. More than 75 people attended that event. The events, coupled with cross-promotions with other local merchants and a "perfect location," have propelled the new branch into one of Patelco's most popular branches. "In a time when many banks and credit unions have unfortunately needed to close certain branches, ourselves included, it's great to see this location flourish. It truly is the perfect place for Patelco to make a difference to the community and the local economy," said Danville Branch Manager Toni Sciaky. Ken Burns, Patelco's new CEO, noted that the credit union "is continuing to expand in certain key market areas, and we are certainly glad to see that not-for-profit, community-minded banking has struck a chord with Danville residents." Louisiana FCU, a $113.7 million asset credit union in La Place, La., opened its Gramercy branch in May in the heart of St. James Parish. The new location features a drive-up ATM, full-service lobby, and drive-through services (eNews June 3). A ribbon cutting ceremony and some attractive specials helped drive business to the location. The credit union offered a five-month term share certificate special at a 5% rate through the end of the month. The offer brought $1 million in less than three weeks to the credit union. The new ATM onsite dispersed random $50 bills instead of $20 bills as an incentive to drive traffic to the new machine. Members also received $100 when they opened a new checking account with direct deposit. "It's exciting to see the community support the branch," said Mia Perez, director of marketing and business development. "We're happy to be able to provide alternative financial solutions to our members and potential members in this market." Education First FCU, a $252.9 million asset credit union in Beaumont, Texas, is finding growth in a real-world lesson in what a local financial institution with a solid balance sheet can achieve, President Jimmy Lackey told The Beaumont Enterprise (June 4). The credit union has expanded by seven offices in the past year, all of them in supermarkets in the area. As a result, Education First is building a $528,209 training center next to its main office. "We've added 30 employees in the last year. We needed a training facility," Lackey said. The credit union saw an increase in assets of about 25% from last year, to its current $270 million assets. Lackey attributes the growth to the new locations.

Eastern Financial seeks judgment vs. condo developer

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PALM BEACH, Fla. (6/10/09)--Eastern Financial Florida CU is seeking a $37.25 million deficiency judgment against condominium developer Merco Group and its principals related to the defunct Palladio condominium project in West Palm Beach, Fla. The project was not finished and it became one of the Miramar, Fla.-based credit union's largest real-estate losses (Palm Beach Daily Business Review June 9). A deficiency judgment is a court order stipulating the amount a borrower still owes the lender after a foreclosure. To get the amount, the appraised value of the property on the day of a foreclosure sale is subtracted from the total amount owed on the loan. Merco Group was the guarantor on a loan used to purchase the site of the condominiums that were never built. The credit union foreclosed on the 4.5 acre site in December 2008. In January, it filed the deficiency judgment claim in Palm Beach Circuit Court against Merco Group, Belinda Mereulo and Homero Meruelo. The $37.25 million represents the loan principal, interest and fees, minus the credit union's winning $100 bid for the property at a court-ordered auction. Last year the property was appraised at $43 million. The Merco Group claims the credit union can't have both a deficiency judgment and the property. Its attorney said it will fight the lawsuit. The condo project was one of a series of real-estate losses that sent the credit union into conservatorship in April. It is being run by Melbourne-based Space Coast CU.

Universal savings accounts topic at Filene ACUC lunch

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MADISON, Wis. (6/10/09)--Universal savings accounts will be discussed during the Filene Research Institute’s 2009 Membership Luncheon and Annual Meeting during the Credit Union National Association’s America’s Credit Union Conference and Expo in Boston. The lunch will take place June 22 from 11:30 a.m. to 1 p.m. EDT. Keynoting the event will be Fred Goldberg, partner at Skadden, Arps, Slate, Leagher and Flom. The event also will feature special guest Tim Flacke, executive director, D2D Fund. Universal savings accounts have been available for more than 15 years and can be used for getting a post-secondary education, purchasing a first home, making investments, starting a small business and building retirement. Credit unions are ideally suited to implement the accounts, which could help Americans develop savings and assets, according to Filene. Great Britain implemented a universal savings account program in 2005 for its 700,000 children born each year. The accounts have triggered a dramatic increase in savings rates among poor families, Filene said. America’s Credit Union Conference and Expo will take place June 21-24 in Boston.

Two Dubuque CUs offer tips on new card law

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DUBUQUE, Iowa (6/10/09)--Two Dubuque, Iowa, credit unions are offering tips on how to deal with new credit card legislation signed into law by President Barack Obama. While Dupaco Community CU officials are still examining all the new rules, Matt Dodds, senior vice president for consumer lending, said he’s confident the law won’t result in any significant changes at his credit union (Telegraph Herald June 8). “Certainly not at Dupaco,” he told the newspaper. “But one thing you’re going to see change is more fees, bigger annual fees, [and] taking away benefits like frequent-flier programs.” Consumers need to pay attention to how they use their cards, Dodds added. To deal with the new legislation, Dodds said consumers should:
* Look for a card with a lower interest rate if a balance is carried over from month-to-month; and * Select a card with no annual fee and a longer grace period if expected to pay monthly bills in full and are not concerned about other features such as frequent-flier miles.
Jason Norton, senior vice president of marketing and business development at DuTrac Community CU, told the paper his credit union has received numerous calls from members about the legislation. He recommends that consumers:
* Read the fine print regarding any changes to or disclosures for a credit card account and don't hesitate to contact the credit card issuer or local financial institution with questions; * Question any unexplained finance charges or fees on a statement; and * Shop around for lower rates, and cards with fewer or reduced fees.

Connecticut governor signs leagues student loan bill

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MERIDEN, Conn. (6/10/09)--Connecticut Gov. M. Jodi Rell Tuesday signed into law the Credit Union League of Connecticut's student loan bill, which provides a college student loan program through credit unions. SB 842, An Act Concerning A Student Loan Guarantee Program Reserve Fund, takes effect immediately. Tony Emerson, league president/CEO and Kelly Fuhlbrigge, league vice president-government relations, will participate in a bill-signing ceremony soon. The league and officials from Connecticut’s credit unions met with Rell in December to discuss the state’s economic situation and to propose a new partnership between the state and its credit unions for a college student loan program. Credit unions pledged support of the governor’s concept and estimated that up to $17.5 million could be committed to the program. The program offers low interest rates at no higher than 6% or 5.75%. Institutions offering 6% loans can defer interest payments for one year; credit unions offering 5.75% loans would not defer interest payments. The loans are for students who may not qualify for traditional loans or who already used all their resources and are having difficulty funding tuition. The Connecticut Health and Education Facilities Authority (CHEFA) will provide 20% loan guarantees on the loans. "Credit unions remain healthy in the current economy due to key differences in our structure," said Emerson. "As cooperative financial institutions, credit unions are not reliant upon the capital markets for funding, but are instead funded through member deposits. Therefore, as the credit crunch hit much of the economy, credit unions by contrast have money that they are ready to lend out to their members." Emerson also noted that credit unions' mission of helping people makes credit unions an excellent choice for such a program. The league will administer the program with CHEFA. The program will be open to all students who live or go to school in Connecticut. The funds will not be pooled. Individual credit unions will allocate their own funds. To participate, credit unions must allocate a minimum of $100,000 of their funds. The program will run for one year, with the possibility of extending that period, based on demand and available resources. So far, 21 credit unions have committed to the program, said the league.

CU System briefs (06/09/2009)

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* PHOENIX (6/10/09)--Two small Phoenix-based credit unions serving Latino member bases have merged, effective June. 1. Chicanos Por La Causa FCU, with assets of $4 million, was merged into the $25 million asset MariSol FCU (The Arizona Republic June 9). MariSol CEO Robin L. Romano told the newspaper the combination will result in a larger entity that can provide a more competitive range of products. The economic downturn hit Chicanos Por La Causa and its members, many of whom had ties to the construction industry. It wrote off 18.4% of its loans during first quarter and had lost $1.75 million the past four quarters. It also had difficulty attracting a manager. MariSol, which serves mainly Maricopa County employees and has a significant Latino membership, began operating the smaller credit union in July 2008. The combined credit union has four branches with 24 employees, 8,400 members and $30 million in assets … * WEST JORDAN, Utah (6/10/09)--A trigger-happy robbery suspect who robbed three financial institutions and fired one round into the ceiling at each holdup was sentenced to 35 years in federal prison (The Salt Lake Tribune June 3). William Harrison, 43, of Clearfield, pleaded guilty to the robberies of Mountain America CU's Layton branch, Chase Bank in Midvale, and Cyprus CU of Sandy. The heists were between October and December 2006. In 2007, Harrison's getaway driver, Willie McNeal, 52, of Midvale, was sentenced to nearly 12 years in prison … * MOBILE, Ala. (6/10/09)--Terica Loraine Crook has been indicted for bank fraud and bank theft for allegedly spending more than $100,000 that was mistakenly deposited into her account by Navigator CU, a Pascagoula, Miss.-based credit union (Associated Press Newswires June 4). According to court records, Crook allegedly made ATM withdrawals and check card purchases at area stores in small amounts that totaled $101,918. The transactions occurred between August 2004 and Aug. 30, 2007. Crook faces a maximum of 30 years in prison if convicted, although the actual sentence under advisory guidelines could be 20 months to two years … * HARRISBURG, Pa. (6/10/09)--The Pennsylvania Credit Union Association's (PCUA) Government Affairs Committee (GAC) met in Harrisburg Monday and Tuesday for Hill visits, legislative and regulatory updates, and discussion of regulatory modernization. The 19-member committee--chaired by Mike Kaczenski, PCUA vice chairman and CEO of Sun East FCU, Ashton--was briefed on the state budget by PCUA contract lobbyist John Malady. Budget issues dominated discussions on the Hill visits (Life is a Highway June 9). The GAC met with Sen. Don White (seated at desk), chairman of the Senate Banking and Insurance Committee, where GAC members described credit union outreach efforts such as Credit Union Better Choice loans and financial literacy programs. White commended them for their community outreach work. (Photo provided by the Pennsylvania Credit Union Association) … * ALBANY, N.Y. (6/10/09)--Amy Kramer, vice president of governmental affairs for the Credit Union Association of New York, has been named to The Capitol's inaugural list of 40 (Rising Stars) Under 40. The award recognizes leaders in politics, government and advocacy from the private, public and not-for-profit sectors whose talent, tenacity and passion the past year have distinguished them from their peers. The publication unveiled the 2009 recipients in its June 6 issue. "Amy's drive to advance the credit union movement in New York is an asset to the association and the state's credit union community," said William J. Mellin, president/CEO of the association. Kramer has been with the association since 2001 and was named to her current position in 2004 … * LANSING, Mich. (6/10/09)--Patrick Hills, president/CEO of Flagship Community FCU, a $15 million asset credit union in Port Huron, Mich., died June 2 at his home. He was 64. Hills was active in the league chapter system. Prior to its merger with Metro East Chapter, he held several executive committee positions, including chairman, of the Blue Water Chapter. Funeral services were Saturday. Hills is survived by his wife, three children, 10 grandchildren, mother, two brothers and three sisters (Michigan Monitor June 8) …

1.8 M-plus deposited in Michigan Save to Win

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LANSING, Mich. (6/10/09)--Michigan credit union members have made more than $1.8 million in deposits through “Save to Win,” a program that eight Michigan credit unions have offered with the Michigan Credit Union League (MCUL) since February. For every $25 members put into a special savings account, they receive a chance at more than $400 in prizes each month and an entry into a $100,000 grand prize drawing, taking place in January. Members can receive up to 10 prize entries per month. Among the eight credit unions, 5,947 accounts have been opened through the program (Michigan Monitor June 8). Data on those using “Save to Win” indicate broad appeal among credit union members and also reveal that low- to moderate-income households are being encouraged to make deposits through the program, the league said. Among the program’s statistics:
* About 27% of participants have financial assets--excluding mortgages--and savings of $2,000 or less; * Roughly 42% of participants report household income of less than $40,000; 15% report less than $20,000; and * About 60% of participants say they spent money on the lottery or gambling in the past six months.
The program is part of a broader “Prize-Linked Savings” initiative that Michigan credit unions use to attract consumers to the concept of saving as an alternative to gambling or purchasing lottery tickets. It also gives credit unions a chance to educate members and potential members about other savings products and building personal assets. Credit unions participating in the program include:
* Central Macomb Community CU, Clinton Township; * Christian Financial CU, Roseville; * Communicating Arts CU, Detroit: * E&A CU, Port Huron; * ELGA CU, Burton; * Frankenmuth CU, Frankenmuth; * NuUnion CU, Lansing; and * Option 1 CU, Grand Rapids.

Members 1st to aid workers if no state budget

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MECHANICSBURG, Pa. (6/10/09)--Members 1st FCU, Mechanicsburg, Pa., has designed a program to assist state employees who are members of the credit union if there is a state budget impasse in Pennsylvania. Members who are affected will have the option to either “skip” a payment on any existing loans at no charge, or take advantage of a special 3.9% Annual Percentage Rate (APR) line of credit, providing they meet credit approval criteria (Life is a Highway June 8). The rate will be effective through July 31, and the first payment will be deferred until August. Qualifying members can borrow up to the amount of their normal paycheck. “We serve many state employees who may be impacted if this budget issue is not resolved,” said Bob Marquette, president of Members 1st. “We understand the difficulty this may present to them and are committed to assisting them in any way that we can.” Pennsylvania State Employees Credit Union (PSECU), Harrisburg, also has said it will help its members who may be affected if a budget agreement is not reached by July 1 (New Now June 1). If there is an impasse, PSECU will offer a special loan program for members who are state employees. Employees who stay on the job but don't receive a paycheck can apply for a 0% APR loan (Life is a Highway May 29). For members who meet PSECU’s credit criteria, the 0% rate will be available up until 60 days after the governor signs the new budget into law. After 60 days, the loan would begin accruing interest at 3.9% APR until paid in full. Members participating in the program can borrow up to $1,000 per pay period.

Peppers elected CMIS board chairman

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MADISON, Wis. (6/10/09)--Alan Peppers, president/CEO of Westerra CU, Denver, was elected chairman of the CUNA Mutual Insurance Society (CMIS) Board of Directors at a meeting May 30. He replaces Loretta Burd, president/CEO, Centra CU, Columbus, Ind. CMIS directors re-elected to three-year terms included:
* Joseph J. Gasper, retired president/chief operating officer, Nationwide Insurance; * Robert J. Marzec, retired audit partner, PricewaterhouseCoopers; * M. Victoria Wood Miller, retired executive vice president and chief financial officer, Turner Broadcasting System Inc.; and * Randy M. Smith, president/CEO, Randolph-Brooks FCU, Universal City, Texas.
Gasper was elected board vice chairman. Other CUNA Mutual board members are:
* Burd; * Eldon Arnold, retired president/CEO, CEFCU, Peoria, Ill.; * William B. Eckhardt, president/CEO, Alaska USA FCU, Anchorage, Alaska; * Bert J. Hash Jr., president/CEO, Municipal Employees Credit Union of Baltimore, Inc., Baltimore; * Farouk D.G. Wang, director, buildings and grounds management, University of Hawaii, Honolulu; * Larry T. Wilson, president/CEO, Coastal FCU, Raleigh, N.C.; * James W. Zilinski, retired chairman and president/CEO of Berkshire Life Insurance Co., Pittsfield, Mass.; and * Jeff Post, president/CEO, CUNA Mutual Group.

Avanta FCU changes name to avoid trademark problems

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BILLINGS, Mont. (6/10/09)--Avanta FCU is changing its name for the second time in five years--this time to avoid a trademark lawsuit. Advanta Bank Corp., which is registered in Delaware and conducts business in Utah, complained that the $137.2 million asset, Billings, Mont.-based Avanta FCU’s name infringed on the trademark the bank has owned since 1987 ( June 9). In 2008, the Utah bank gave the Montana credit union one year to change its name. Consequently, Avanta will become Altana FCU on July 1. Avanta FCU changed its name from Laurel FCU in July 2004. The credit union hired a trademark attorney and applied for a federal trademark on the Altana name, Rhonda Diefenderfer, president/CEO, told the newspaper. She added that finding a new name wasn’t easy. “This time, out of more than 300 names, we gave 90 to the attorney,” she told the paper. “Maybe four names survived in the formal search process.” Five years ago, credit union officials obtained permission from the National Credit Union Administration and Montana regulators to use the name Avanta, so the credit union thought it was in the clear, the paper said.

CUs draw strength in global presence--WOCCU chair

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MADISON, Wis. (6/10/09)--Credit unions’ ethical leadership has given them both integrity and strength during the current financial crisis, according to Melvin Edwards, World Council of Credit Unions (WOCCU) departing chair and board representative from the Caribbean Confederation of Credit Unions.
Click to view larger image World Council of Credit Unions Chair Melvin Edwards addresses attendees at the 2008 World Credit Union Conference in Hong Kong. (Photo provided by World Council of Credit Unions)
However, credit unions can gain even greater influence by speaking as a single global body, supporting credit unions in developing countries and increasing the movement's influence worldwide, he added. “Credit unions are engines of social and economic development, and too many governments have missed the value of their influence,” said Edwards, a St. Kitts and Nevis native whose two-year term as WOCCU chair concludes in July at WOCCU's World Credit Union Conference in Barcelona, Spain. “Credit unions everywhere need to recognize that we exist as a global movement, and we need to speak in one voice.” Much of credit unions’ strength is based on their financial transparency, not-for-profit cooperative natures and focus on member service, aspects that set them apart from many for-profit financial institutions. Their emphasis on education helps financially strengthen not only the credit unions, but also the members they serve, Edwards said. In the end, he said credit unions’ “people helping people” philosophy enables them to grow the movement in developing countries and hone individual members' and their own capabilities to weather economic storms like the global financial crisis. “We need to invest more, not only in educating ourselves but also our members, correcting their assumptions about easy credit and refocusing them on increased savings and safe investments,” Edwards added. “The more members know about managing their own funds, the easier it will be for them to keep their credit unions safe, accountable and honest.” During Edwards’ tenure as chair, WOCCU expanded its membership to include 40 systems or institutions representing 69 countries. It also increased its influence with legislative and regulatory bodies, including the Basel Committee on Banking Supervision, International Accounting Standards Board, European Union, Group of 20 (G-20) Nations and others. WOCCU issued a set of International Consumer Protection Principles to set member service standards for credit unions worldwide last year, and WOCCU’s technical development efforts have employed new technology to reach the rural poor in Mexico, a program it hopes to expand to other countries later this year. “I have been very fortunate to see many sides of credit unions worldwide and have kept my ear to the ground in learning to appreciate this beautiful mosaic,” he said. “I am now better equipped to appreciate the plurality of many cultures and realize that we all gain strength from the common denominator that is the credit union philosophy.” Edwards also says he is confident that when he hands the office to his successor at the Barcelona conference, July 26-29, WOCCU will continue gaining speed in its service to credit unions and their members worldwide. “I know my successor will continue to build on the strengths that were already present when I arrived, and I counsel him to listen closely. The humility of serving in high office will enable him and WOCCU to succeed,” he concluded.