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CU System Archive

CU System

Wildfire in New Mexico closes three CU offices

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LOS ALAMOS, N.M. (7/1/11)--A huge wildfire has closed three credit union locations in Los Alamos, N.M., after the city was evacuated, said the Credit Union Association of New Mexico. Los Alamos Schools CU, Zia CU and Del Norte CU closed their Los Alamos locations for at least a day after smoke overwhelmed the town and the fire threatened the internationally known Los Alamos National Laboratory. The wildfire is said to be the largest ever in the state's history, burning more than 92,000 acres so far. Zia CU, which has more than $130 million in assets, has another office about 20 miles away in Espanola. The $383 million asset Del Norte CU has five other area branches to serve its members. Del Norte CU, which has assets of more than $383 million, opened its doors to $14.8 million asset Los Alamos Schools CU CEO Matt Schmidt and his staff, who set up temporary shop in Del Norte's Sante Fe office about 35 miles away. "The kind of support we've received would never have happened in a bank, and I'm a former banker," Schmidt said. "The spirit of people helping people really sets credit unions apart," said Denise Wymore, Del Norte vice president of marketing.

Digital FCUs 1.99 gas helps fund tornado relief

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WORCESTER, Mass. (7/1/11)--A Massachusetts credit union's $1.99-per-gallon gas promo generated lines that backed up for more than a mile and saved drivers $13,000 in what NECN.com called "more than a good deal." Part of the proceeds will go to tornado relief efforts. Digital FCU, a $3.2 billion asset credit union based in Marlborough, sponsored the promotion at a gas pump in Worcester. For six hours, it offered regular gas for $1.99 a gallon. Nearly 850 cars pumped more than 8,000 gallons of gas, saving the drivers more than $13,000 overall, said the credit union (NECN.com June 29. The promotion was so popular that by noon, traffic had backed up more than a mile. For each trip to the pump, the credit union donated $1.99 to the American Red Cross tornado relief efforts, raising more than $1,600 by the end of the day. The event cost Digital FCU about $20,000.

VolCorp exceeds 43.9M PPC goal

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NASHVILLE, Tenn. (7/1/11)--Volunteer Corporate CU announced Thursday it has exceeded its $43.9 million goal for perpetual contributed capital (PPC). The goal was determined in VolCorp's strategic plan as the amount of PCC required to continue its current business model and not have to shrink assets, discontinue any services or raise member prices, said the Nashville, Tenn.-based corporate's announcement. VolCorp has not depleted any member contributed capital; it asked members only to convert what they already had in their membership capital accounts. "We are very thankful to our members for believing so strongly in this collaborative association and making this long-term commitment," said VolCorp CEO Rick Veach. "We pledge to devote ourselves to increasing our value to our members and making this the best investment decision they have ever made." VolCorp will continue to receive PCC commitments and build its capital base even further. That will include adding new members. VolCorp also is involved in a possible merger with West Virginia Corporate FCU, which would further enhance VolCorp's capabilities and financial strength. The two corporates announced their intent to merge in May. The agreement calls for VolCorp to be the surviving corporate while maintaining offices in both Nashville and Parkersburg, W.Va.

CUNA closed Monday for holiday no INews NowI (06/30/2011)

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WASHINGTON and MADISON, Wis. (7/1/11)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association will be closed on Monday, in observance of the Fourth of July holiday. News Now will not publish a Monday edition but will resume regular publication on Tuesday.

First Carolina Corporate funds PPC at 65M

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GREENSBORO, N.C. (7/1/11)--First Carolina Corporate CU has fully funded its perpetual contributed capital (PPC) program, with 142 member/owners subscribing to its capital offering, totaling nearly $65 million, the corporate announced Thursday. "While we have additional commitments that will soon be funded, the support received thus far speaks volumes about our members' belief in First Carolina's future and that of the credit union system as a whole," said Mark Brown, senior vice president/chief financial officer. "With this significant investment, we are moving forward, focused on providing the products and services credit unions need to serve their own members," Brown added. The Greensboro, N.C.-based corporate submitted its capital restoration plan in January to the National Credit Union Administration (NCUA). It called for both new capital and conversion of existing membership capital share deposits. With its funding in place, the $1.7 billion asset First Carolina will meet NCUA's October deadline for capital and net-income requirements, the corporate said. It is continuing to accept PCC commitments. "While funding technically is due today (Thursday), some credit unions are still finalizing their paperwork and we understand that," Brown said.

CUSO urges CUs to offer promote no fee-debit cards

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ST. PETERSBURG, Fla. (7/1/11)--The Federal Reserve Board ruling on debit interchange gives credit unions an opportunity to capture their debit and checking market share by continuing to offer fee-free products, said Michael Kelly, president/CEO of the credit union service organization PSCU Financial Services in St. Petersburg, Fla. “The prospect of reduced interchange rates for large banks has already prompted them to increase fees,” Kelly said. “While this can negatively impact consumers, it is a bonus for credit unions because it makes their debit cards even more attractive. “Now is definitely not the time for credit unions to raise fees on checking or debit offerings,” Kelly added. “Credit unions need to seize this opportunity to win market share from banks by attracting members with these loyalty-driven products.” The final rule would cap large issuer debit interchange fees at 21 cents, to cover network connectivity, hardware, software, and labor costs, and related to network processing and transaction monitoring. An additional five basis points per transaction may be charged to cover fraud losses. Debit card issuers with less than $10 billion in assets are exempt from the direct impact of the cap provisions. Prepaid cards and government-issued cards are also exempted (News Now June 30). Issuers must provide a debit card that can be processed on at least two unaffiliated card networks, such as one signature network and one unaffiliated personal identification number network. As a second alternative, issuers may also provide a debit card that can be processed on two or more unaffiliated signature networks, but not on any PIN networks, or that can be processed on two or more unaffiliated PIN networks, but not on any signature networks. Issuers and payment card networks will be prohibited from limiting merchants to choose the network on which a transaction is routed, limited to those networks on which the debit card is enabled. The debit interchange rules will go into effect on Oct. 1, instead of the original proposed date of July 21. Credit Union National Association (CUNA) President/CEO Bill Cheney CUNA’s focus would turn to ensuring that the small issuer exemption provided in the final rule would work as planned. Cheney said that many credit unions may be forced to adopt new member fees or take other measures if the two-tiered system does not work as planned.

WOCCU accepting donations for July auction

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MADISON, Wis. (7/1/11)--World Council of Credit Unions (WOCCU) is collecting item donations for its online auction, which runs July 11 through July 26. Participants can show support by clicking on the “Donate Items” button (see link) to contribute to WOCCU’s catalog. Items may be donated through July 24. Those attending the World Credit Union Conference, July 24-27, in Glasgow, Scotland, can register their donated items online to save time standing in line and drop off their items at the registration desk at the conference. Donors also can choose to ship the item directly to the winning bidder. WOCCU’s goal this year is to raise $40,000 to support The Worldwide Foundation for Credit Unions. WOCCU will add items for participants to preview to its site as the auction date approaches. Participants can check back often to see what’s new.

Iowa league launches Facebook page

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DES MOINES, Iowa (7/1/11)--The Iowa Credit Union League (ICUL) has launched its official Facebook page, the “Iowa Little Guy,” as part of its ongoing efforts to communicate with credit unions, members and consumers. The league said it created the page to educate consumers about the credit union difference, while also creating a community of proud credit union members. The page will feature updates on credit union issues, member success stories, financial education and other information for Iowans. “The Iowa Little Guy represents those whom credit unions serve--everyday Iowans of all walks of life,” said Patrick S. Jury, ICUL president/CEO. “The Iowa Little Guy Facebook page will create an online community for Iowans where they can find financial tips, share how their credit union assisted them and learn how new laws and regulations may affect them financially.”

Arizona league convention focuses on New Journey

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PHOENIX (7/1/11)--Under the theme “A New Journey” to recognize its upcoming merger with the Colorado and Wyoming leagues, 300 Arizona credit union leaders took part in the Arizona Credit Union League’s (ACUL) 2011 annual convention in Scottsdale, June 16-18. Keynote speakers Mark Arnold, credit union brand expert and strategic planner, and Jody Urquhart, author of, “All Work and No Say,” highlighted the meeting’s educational sessions. Breakout sessions included volunteer, executive and operational tracks, each reinforcing the meeting’s key messages. For the second year, a young professional session was offered and led by Brent Dixon, credit union research adviser on generational marketing with the Filene Research Institute. The R.C. Robertson CU Advocate of the Year Award was presented to Susan Frank of Desert Schools FCU, with $2.8 billion assets, Phoenix. She is the fifth person to receive the award. The Very Outstanding Credit Union Person (VOCUP) award was presented to Dan Desmond, CEO of TruWest CU, with $783 million assets, Tempe. Larry Pfeiffer, treasurer and board member of Arizona Central CU, with $413 million in assets, Phoenix, was presented the Rose Mofford Credit Union Volunteer Award. Since 1989, ACUL has presented the award to an individual for distinguished volunteer service. Also, six credit unions received recognition for 100% participation in advocacy efforts relating to statewide fundraising for ACUL-PAC in support of credit union-friendly candidates. Honored credit unions include:
* Altier CU, with $167 million in assets, Tempe, first year; * First Corporate CU, with $1 billion in assets, Phoenix, first year: * First CU, with $414 million in assets, Chandler, second year; * Arizona Central CU, fifth year; * Desert Schools FCU, sixth year; and * TruWest CU, 18th year.
The Valley of the Sun Chapter, Southern Arizona Chapter and Yuma Chapter were also recognized for fundraising. Each year, the league also honors credit unions that manage their growth in a positive way with the Credit Union Progress Awards (CUPA). The winners are determined based upon the number of credit unions in the state divided into six categories of roughly the same number of credit unions. The 2011 winners are:
* Desert Medical FCU, $8 million assets, Scottsdale, $4 to $12 million category; * Alhambra CU, $20 million assets, Phoenix, $12 to $26 million category; * Coconino FCU, $47 million assets, Flaggstaff, in the $27 to $99 million category; and * Hughes FCU, $534 million assets, Tucson, in the $300 million plus category.
As the league completes its merger with the Associations of Colorado and Wyoming, it recognized all its board members for their dedication and service. ACUL’s four executive board members will continue to serve on the board of the new merged association. They are:
* Robert Ramirez, president/CEO, Vantage West CU, Tucson, chairman; * Frank, vice chair; * Colleen Curtis, treasurer/director, Mountain West CU, treasurer; and * Desmond; secretary.

Experience Learning Live to honor training excellence

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MADISON, Wis. (7/1/11)--The Credit Union National Association (CUNA) will recognize five credit union training programs and trainers for their staff development achievements during this year’s Experience Learning Live! (ELLy) Training Awards program. CUNA’s Experience Learning Live! is an untraditional training conference designed to provide ready-for-work experiences and peer interaction. This year’s event will be Oct.16-19 in Las Vegas. The ELLy Awards are the only national awards presented to credit union trainers for accomplishments in professional staff development, said CUNA. Awards will be presented in two divisions--less than and greater than $250 million in assets--in each of five categories:
* Chi Phi Delta X II Award--Represents the best development of a Credit Union University, and its effect on staff learning and performance, using CUNA’s Center for Professional Development products as the foundation. * eLearning Award--Presented to participants who demonstrate how technology-based training was successfully incorporated into and enhanced their credit union training programs. * Training Champion Award--Recognizes senior management staff who go beyond the call of duty to support and develop their credit union’s training program. * Training Professional of the Year Award--Honors exceptional achievements in performance and learning by a credit union training professional or department. *WOW Award--Presented to the credit union with the best overall training curriculum or best training event that energizes, empowers and excites participants.
Entries are due July 22. For more information, use the link or call 800-356-9655, ext. 4249. Development of Experience Learning Live! is guided by the ELL Advisory Committee. The seven volunteers advise on program themes, content and speakers, and serve as conference hosts. ELL Advisory Committee members receive a complimentary registration the year that they serve. For ELL Advisory Committee application information, use the link or contact Marlo Foltz, director of blended learning, at mfoltz@cuna.coop.

Governor addresses Connecticut league GAC

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MERIDEN, Conn. (7/1/11)--Connecticut Gov. Dannel Malloy opened the Credit Union League of Connecticut Governmental Affairs Conference Wednesday and spoke of the important role credit unions play in state economics. He encouraged the nearly 90 credit union representatives attending to continue serving members in these challenging economic times.
Connecticut Gov. Dannel Malloy, left, follows a point made by Tony Emerson, president/CEO, Credit Union League of Connecticut, Wednesday at the Connecticut Governmental Affairs Conference. (Photo provided by The Credit Union League of Connecticut)
Following the governor’s remarks, which also included comments on the state’s economy and budgetary issues, U.S. Rep. John Larson (D-Conn.) spoke in favor of the credit union nonprofit, tax-exempt status; gave full support for raising the cap on member business loans; and talked about the importance of resolving the interchange issue so it is favorable to credit unions. The conference concluded with a luncheon meeting with U.S. Rep. Jim Himes (D-Conn.), a member of the House Committee on Financial Services, who put current critical issues affecting credit unions in perspective for attendees. “It is extremely important for us to provide our members with great opportunities to hear about issues of importance affecting them, and to meet with our elected officials both in Washington, D.C. and in Connecticut,” said Kelly Fuhlbrigge, league vice president, government relations. “It is equally important for our elected officials to see that credit unions are a collective force. I believe we accomplished all of these goals here in Connecticut today with our Government Affairs Conference.” Additional speakers included: U.S. Rep. Chris Murphy (D-Conn.); State Senator and Assistant Majority Leader Bob Duff (D-Norwalk and Darien); Connecticut Banking Commissioner Howard Pitkin; House Republican Leader Lawrence Cafero Jr. (R-Norwalk) and former state senator and current political editorialist Kevin Rennie.

WOCCU names Branch as new presidentCEO

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MADISON, Wis. (7/1/11)--Brian Branch, World Council of Credit Unions (WOCCU) executive vice president and chief operating officer (COO), has been named as WOCCU's next president/CEO, announced the organization's board Thursday. Branch will succeed President/CEO Pete Crear, who retires in August. "We couldn't have selected a better leader for WOCCU," said Barry Jolette, WOCCU board chair and CEO of San Mateo (Calif.) CU. "We've all seen the organization dramatically evolve under Pete's tenure, and we expect the same kind of growth and maturity under Brian's leadership." "Brian has the expertise, training and deep connections among leaders in the world credit union movement," said Credit Union National Association President/CEO Bill Cheney. "He has worked tirelessly on behalf of both established and developing credit union movements." Cheney noted Branch's appointment "is a testament to the World Council’s commitment to continuity and consistency in fostering the worldwide growth and development of credit unions. I have had the privilege of knowing and working with Brian for many years, and I look forward to continuing our professional relationship--and friendship--for many years to come," Cheney added. Branch has worked with credit unions and microfinance and other financial institutions for more than 20 years, with hands-on field experience in 47 countries. Nearly half his career has been at WOCCU, previously as vice president of development services, director of technical services, regional manager for Latin America, manager of research and development, and economist. He also served as interim CEO prior to Crear's appointment in 2005. "Brian is the best COO I've worked with, and that's easy to see just by looking at the way the organization operates," said Crear, who will retire after WOCCU's World Credit Union Conference in Glasgow, Scotland, July 24-27. "We've seen tremendous change in the direction of the industry the past several years, especially in the use of new technology, but he's kept pace to make sure WOCCU stays relevant and keeps moving forward." Under Branch's operational leadership, WOCCU diversified its funding sources, tripled annual operations and introduced handheld technology for credit unions to extend remote service delivery in rural areas. He oversaw development programs in more than 40 countries, and led legislative and regulatory development in 12 countries. He also increased opportunities for international engagement and exchange among credit unions and leagues across developed and developing systems. "The market has changed significantly under Pete's tenure, but the organization's values have remained constant," said Branch. "We will work hard to continue this tradition, helping credit unions make a difference in people's lives and provide better services for our members."

CU System briefs (06/29/2011)

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* TAMPA, Fla. (6/30/11)--Akimmie D. Wesley, 29, of Polk County, Fla., was sentenced Monday to 42 years in federal prison on a variety of charges related to a carjacking and forced withdrawal of funds from a credit union member's account. According to court documents, Wesley robbed, at gunpoint, the owner of a carwash in Polk County on May 3, 2010. He forced her into her car and ordered her to drive to a branch of Lakeland-based MidFlorida CU, where he forced her to withdraw $6,500 from a drive-through ATM and a drive-through teller. Among the charges were robbery, carjacking, bank robbery, carrying a firearm during a crime of violence, and possession of a firearm by a convicted felon. He pleaded guilty on Oct. 5 to the charges in a U.S. District Court (US Fed News June 27) … * HARAHAN, La. (6/30/11)--The "Crash"--which involves young credit union professionals under the age of 35--is arriving in Louisiana, announced the Louisiana Credit Union League Tuesday. The league and CUNA Mutual Group are sponsoring 14 up-and-coming credit union employees or volunteers in the state to receive free registration to the league's Annual Meeting & Convention, which will take place Aug. 3-6 in New Orleans. Deadline to apply is July 6. Crash attendees will be announced by July 8 … * ALBANY, N.Y. (6/30/11)--Covera Card Solutions received a 2011 Gold Hermes Creative Award for Get Carducated, a youth video contest that rewarded teens for being educated about responsible debit, credit and ATM use. Hermes Creative Awards is an international competition for creative professionals involved in the concept, writing and design of traditional materials and programs, and emerging technologies. Covera's online video contest was recognized in the Web Multimedia, Games, Contests, Presentation category. Participating credit unions' members aged 16-21 who attended college or were college-bound were asked to film a short video expressing their ideas about debit, credit and ATM card use--why it's important, lessons they learned and more. They uploaded their videos to YouTube and promoted them to generate as many views as possible. The video with the most views received a $5,000 college scholarship. The Hermes competition received more than 4,400 entries from the U.S., Canada, and other countries. The awards are administered by the Association of Marketing and Communication Professionals … * FORT LAUDERDALE, Fla. (6/30/11)--City County CU is now processing member loans through mobile devices like iPad. The $288 million asset credit union in Fort Lauderdale recently added ProDOC Packages and eDOCSignature to its list of DocLogic products. All of members' loans can be done strictly over the phone, through the Web or on a mobile device like an iPad, said Nancy Bourdon, chief information officer at the credit union. "This allows for a quicker loan process without the hassle of mailing applications to a member's home for signature," she added. The new service means the credit union can process more applications in less time and increase its volume of funded loan accounts, for a better flow of business, Bourdon said. The credit union also is considering storing legal documents transmitted to members and internal forms through the new services …

N.J. CUs municipal deposits bill passed by Assembly

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HIGHTSTOWN, N.J. (6/30/11)--Legislation that would enable New Jersey’s counties, school boards, municipalities, and other local government entities to use credit unions as depositories (S-1807/A-1597)was passed by the full state Assembly Wednesday. The vote was 67-8 vote, with two abstentions. The bill is sponsored by Assembly Speaker Shelia Oliver (D-34), Deputy Speakers Upendra Chivukula (D-17), and John Wisnieski (D-19), and has 13 additional co-sponsors from both sides of the aisle (The Daily Exchange June 29). A companion bill (S-1807) sponsored by state Senate President Stephen Sweeney (D-3), Senate Republican Conference Leader Bob Singer (R-30), and Senate Deputy Majority Leader Paul Sarlo (D-36) passed the Senate last June. The New Jersey Credit Union League has been leading a grassroots campaign in support of the legislation that has included some 5,000 postcards from credit union volunteers, professionals, and members; two Credit Union Days at the State House; and credit union exhibits at government-related conventions. "This is a great win for New Jersey credit unions and taxpayers alike. Credit unions will bring new competition to the public deposits market that is sorely needed," said league President Paul Gentile. The bill now moves to the governor's office.

4.4B asset CEFCU joins shared-branch network

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INDIANAPOLIS (6/30/11)--A $4.4 billion asset credit union in Illinois has joined the Credit Union Centers' shared-branch network, announced the Indianapolis-based network. Peoria, Ill.-based CEFCU, which has 279,000 members, went live on the shared branch network on May 1, Since then, CEFCU members have had access to more than 4,200 branches nationwide, including more than 275 in Indiana and Illinois. CEFCU Vice President of Market Development Giann Walker cited two reasons for joining the network. "First, when CEFCU acquired Valley CU (VCU) at the end of 2008, VCU members already had access to shared branching. So, it was extremely important that the credit union continued to offer theis delivery channel that had been enjoyed and utilized by VCU members," Walker said. "At the same time, joining the CO-OP Shared Branching Network allows CEFCU to provide a valuable delivery channel to members throughout the nation." "Now, members traveling on vacation, wintering in a warmer climate, going off to college, or living outside of CEFCU's core membership areas have a member center nearby for personal service," Walker said. She noted the ability to work with a local provider of the CO-OP network "was very appealing."

Ohio CUF Corporate One NCUF offer new CIF option

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COLUMBUS, Ohio (6/30/11)--A partnership among Corporate One FCU in Columbus, Ohio, the Ohio Credit Union Foundation (OCUF) and the National Credit Union Foundation (NCUF) has prompted a new Community Investment Fund (CIF) option. It will give credit unions a vehicle to support financial education, professional development, community outreach and disaster relief initiatives in Ohio and nationwide, said OCUF. “Not long ago, the CIF was a substantial funding source for OCUF,” said Becky Hart, OCUF executive director. “But difficult economic conditions over the last two to three years has yielded dwindling returns. Corporate One FCU took the initiative to examine the traditional CIF model, with the goal of creating a new option that benefits investors and helps sustain OCUF and the national foundation. We believe we accomplished that goal with this new option.” The Corporate One CIF option offers credit unions the ability to choose products such as callable and bullet U.S. government agency securities, and negotiable certificates of deposit. No capital is required from the credit union, and Corporate One FCU membership is not required to invest. Corporate One also will work with credit unions to ensure a fixed amount is returned to the foundation(s) by choosing products to fit their asset/liability strategy. The new CIF model is a result of the winding down of the traditional CIF option used more than a decade with U.S. Central in Lenexa, Kan. “Providing Ohio credit unions with an offering that provides a convenient way for them to give back to their state and national foundations, coupled with our free safekeeping program, which helps increase the size of each credit union’s donation, is simply the right thing to do,” said Lee Butke, Corporate One president/CEO. “There are times when we all need a helping hand, and we’re extremely proud to assist credit unions in lending a hand to those in need, both in Ohio and the rest of the nation, through support of the CIF.” The CIF “truly is a simple way to make a big impact,” said Bucky Sebastian, NCUF executive director. “With just one CIF investment, a credit union can help consumers achieve financial freedom in their state and across the country.” NCUF’s CIF helps credit unions leverage their investments to support innovative credit union programs. To participate in the Corporate One CIF option, credit unions invest in a security that is held in a separate free safekeeping account. As interest is paid on the security, a share of the interest is returned to investing credit unions, with the remaining share paid to the NCUF, half of which is then granted to the OCUF. NCUF uses the remaining portion of the CIF interest to support its national programs, including REAL Solutions, Financial Education including Biz Kid$ & Grants, Credit Union Development Education and CUAid-Disaster Relief.

RACOM DuTrac Community CUs to merge

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DYERSVILLE, IOWA and DUBUQUE, Iowa (6/30/11)--Two Iowa credit unions--RACOM Community CU, Dyersville, and DuTrac Community CU, Dubuque--have signed a letter of intent to merge. The proposed merger would create a $515 million-asset credit union serving more than 42,000 members. The continuing credit union will be called DuTrac Community CU with DuTrac’s Andrew Hawkinson as president/CEO. The RACOM name will remain on the Dyersville location for the next two years with signage incorporating the look and feel of the DuTrac logo along with the words “A division of DuTrac Community Credit Union.” The combined organization will have 11 branches throughout a 14-county region bordering the Mississippi River and serving the tri-state area of Iowa, Illinois and Wisconsin. Other merger activity in the U.S.:
* Members of Seacoast CU, with 36 million in assets, Hampton, N.H., voted in favor of merging into $1.8 billion asset Service CU, Portsmouth, N.H., at a special meeting this month. The merger has also been approved by the National Credit Union Administration (NCUA). * First MidAmerica CU, with $450 million in assets, Bethalto, Ill., has agreed to merge with $5 million asset Alton Area Employees CU, Alton, Ill. The merger has also been approved by NCUA (TheTelegraph.com June 16) * Texas Dow Employees CU, with $1.6 billion assets, Lake Jackson, Texas has announced a potential merger with $60 million asset San Jacinto Area CU, Pasadena, Texas (Houston Business Journal June 22).

No indictment in shooting death of Atlanta CEO

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NEWARK , N.J. (6/30/11)--A grand jury has declined to indict a New Jersey's sheriff's detective in the fatal shooting last summer of an unarmed CEO from an Atlanta, Ga.,-based credit union in a Newark park. DeFarra Ivan "Dean" Gaymon, 48, was shot July 16 by Detective Edward Esposito, 30, while Gaymon was in New Jersey to attend a class reunion. Esposito was working undercover in the park and a confrontation developed between the two men. Gaymon was CEO of the $61 million asset Credit Union of Atlanta and the father of four children. The Garden State Equality group asked the U.S. Justice Department to conduct a federal civil rights investigation into the shooting. The family has filed a civil rights lawsuit against the detective, the sheriff's department and other parties.

Court denies TCF interchange injunction motion

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WASHINGTON (6/30/11)--A federal appeals court has refused TCF National Bank's request for a preliminary injunction to halt the Federal Reserve Board's debit interchange fee regulation. On a positive note for credit unions, the court also denied as "meritless" TCF's claim that the law's small-issuer exemption for banks and credit unions with less than $10 billion in assets violated the U.S. Constitution. The U.S. Court of Appeals for the Eight Circuit issued its decision Wednesday. TCF filed its lawsuit in October in the U.S. District Court for the District of South Dakota alleging the Dodd-Frank Act's debit interchange price setting provisions were unconstitutional on three grounds:
* The law violated substantive due process because it limits the costs that issuers can recoup in a way that excludes many of the actual costs of running a debit interchange program; * The law was a "regulatory taking" because it would require issuers to charge lower interchange rates than are currently permitted; and * Its small-issuer exemption violated the Equal Protection Clause.
The district court in April denied the preliminary injunction motion, indicating the issue was not ripe for decision because the Fed had not yet issued its final regulations on debit interchange. It also denied the Fed's motion to dismiss the case. The bank appealed on April 12 to the Eighth Circuit. Oral arguments were made on June 16. The Credit Union National Association and other financial institution trade associations filed a joint amicus brief supporting TCF's arguments regarding the first two issues but not the small-issuer exemption argument in both the lower district court and the appeals court. In its ruling, the Eighth Circuit denied the bank's request for the preliminary injunction, saying it did "not believe that TCF is likely to prevail" with its constitutional arguments and that it did not think the interchange price-setting aspects of the law violated substantive due process because "TCF is free under the Durbin Amendment to assess fees on its customers to offset any losses under" the amendment. The appeals court also held the regulation was not a "regulatory taking" because Visa and similar payment systems had previously been free to adjust their interchange rates. The court did not believe the bank had a sufficient expectation of receiving in the future the level of interchange income it currently receives (whether or not Congress had chosen to mandate debit interchange price controls). The Eighth Circuit also wrote that the small-issuer exemption argument "is meritless" and that "we agree with the district court's conclusion that the Durbin Amendment's distinction between larger and smaller issuers of debit cards is rationally related to the government's legitimate interest in protecting smaller banks, which do not enjoy the competitive advantage of their larger counterparts and which provide valuable diversity in the financial industry, and in ensuring consumer access to debit cards." It also said "the record is not clear that smaller banks will have a competitive advantage" over larger issuers as a factual matter. The court based this holding in part on Fed Chairman Ben Bernanke's recent testimony before the Senate. He testified that smaller institutions may, in practice, not be exempted from the interchange price setting rates for larger issuers--since card networks may not implement a two-tiered system--even though the law includes a small-issuer exemption as a legal matter. The case will now continue to trial before the lower court in South Dakota, where the judge has indicated a willingness to review the Fed's final regulation on debit interchange to see if it is valid under constitutional and administrative law principles.

KCUA to relocate Wichita office

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WICHITA, Kan. (6/30/11)--The Kansas Credit Union Association (KCUA) is relocating its Wichita office from 650 S. Westdale Drive, a building it has owned since 1999. A pending sale to Credit Union of America is scheduled to be finalized by the end of September. The moving plans include taking possession of the leased space Sept. 1. After minor modifications, KCUA will start moving its operations Sept. 23. If all goes as planned, the association said it will be up and running by Sept. 26. The new address is:

2868 North Ridge Road

Suite 122

Wichita, KS 67205

The phone and fax numbers remain the same:

Phone: 800-362-2076

Phone in Wichita: 316-942-7965

Fax: 316- 206-2203

“The building we bought more than 10 years ago has served us well, but with increased efficiencies and new technology and processing systems, our space needs have been greatly reduced,” said Marla Marsh, KCUA president/CEO. “By moving to leased space, we are able to focus on our core functions and have the flexibility to adjust to the changes in both trade association and payment systems business lines.” The KCUA administrative offices, education and training, marketing, communications and consulting services, and KCUA’s for-profit entity, Shared Financial Solutions (SFS) are housed at the Wichita facility. SFS provides services to credit unions throughout Kansas and Nebraska. KCUA has a satellite office in Topeka, which provides governmental and regulatory advocacy and compliance services. The association serves 93 credit unions in Kansas.

12 students join iGoogolplexi youth editorial board

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MADISON, Wis. (6/30/11)--Twelve students from across the U.S. have been selected to serve one-year terms as youth editorial board members for the Credit Union National Association’s (CUNA) toolkit called Googolplex: The CU Guide for Student Moneymakers, part of CUNA’s Center for Personal Finance. “The insight we receive from these bright students is instrumental in allowing us to design financial literacy tools that resonate strongly with children and young adults,” said Rena Crispin, Googolplex managing editor. “At CUNA, we believe that it’s vital to start financial education at a young age.” Googolplex is a youth-focused element of CUNA’s onlineEDGE program, which guides credit union members through financial decisions at every stage of life. It features interactive games, videos, blogs and other content dealing with money matters and real life issues to promote financial literacy for youth aged 6-18. Youth editorial board members write critiques of stories and games in age-specific sections of Googolplex’s website each month. At the end of their terms, each writes an original story for Googolplex. The board members and their areas of focus are:
* Kaylee (Illinois), Zach and Scott (Pennsylvania), and Talia (Washington) serve on the Clubhouse Crew for 5-Spot, aimed at elementary school students. * Kaela and Sarah (Ohio) and Rylee (Montana) make up the Super Youth Team for AJ’s, which focuses on middle school students. * Elijah (Texas), Chloe (Oregon), Spencer and Rachel (Ohio), and Kapriann (Washington) are on the Teenage Panel advising C-Note, for high school students.
“Our youth board members provide us with feedback that ensures that their peers feel welcome and validated whenever they use Googolplex on their credit union’s website,” said Susan Tiffany CUNA’s director of consumer periodicals.

Mexican visitors exchange info with N.C. CUs

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RALEIGH, N.C. (6/30/11)--Four visitors representing a Mexican credit union association began a week-long stay in North Carolina Monday by visiting with the North Carolina Credit Union League. The visit, sponsored by the World Council of Credit Unions (WOCCU), allowed credit unions to exchange information about products and services, member services and information technology. Caja Zongolica, located in the state of Veracruz in east central Mexico, serves 35,000 members in 25 cities and towns statewide. Miguel Angel Lara Mata, Caja Zongolica’s credit and collections manager; Oliver Hernandez Rivera, marketing manager; Cristian Alonso Hernandez Sanchez, assistant manager; and Jorge Ivan Hernandez Rivera, systems consultant, made the trip to North Carolina. Joshua Fetting, WOCCU international partnerships officer, coordinated the visit and translated the meetings when needed. The meeting with league staff included a visit from Gabriela Zabala, director of the North Carolina Governor’s Office of Hispanic/Latino Affairs. Zabala spoke with the group about the increase of Latino immigrants in the state, and focused on small- and micro-business lending targeting the Latino population. League staff outlined its mission and services, and provided a primer on the credit union movement in North Carolina and the U.S. The exchange helped to outline key similarities and differences between Mexican credit unions and their U.S. counterparts. One difference is the flexibility credit unions in Mexico have in managing delinquent loans in their portfolios. “We have delinquent loans that have been stretched out over five years,” Sanchez said. He added that while the credit union’s loan delinquency rate is 15% to 20%, the vast majority of loans are eventually repaid. This willingness to work with the member underscores the social purpose of credit unions, which is a key similarity with U.S. credit unions. “Credit unions may be different in their approaches to delivering services, but as cooperatives, credit unions everywhere exist to help people,” said league President/CEO John Radebaugh. The delegation met with Latino Community CU, Durham, on Tuesday; Coastal FCU, Raleigh, on Wednesday; and ElecTel FCU, Raleigh, today. To view photos of the visit, use the link.

CU System briefs (06/28/2011)

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* BEAUMONT, Texas (6/29/11)--The former president of the now defunct Beaumont, Texas-based Orange County Employees FCU was sentenced Friday to five years and three months in federal prison for money laundering and embezzlement of $1.16 million from the credit union. Sandra H. Cooper, 56, who was president and treasurer, also was ordered to repay nearly $1.8 million in restitution (Courthouse News Service June 27). Cooper pleaded guilty to the charges on Feb. 28. The embezzlement occurred over 4 1/2 years. The National Credit Union Administration declared the credit union insolvent in June 2010. Members' accounts were transferred to Sabine FCU, Orange, Texas (News Now March 2) … * JANESVILLE, Wis. (6/29/11)--A loan manager who worked at Janesville, Wis.-based Parker Community CU (PCCU) for 20 years has been arrested on charges of embezzling funds by taking out loans in other people's names. Laura Powers, 50, was arrested Friday and accused of taking $615,000 in loans by using the names of family members, then friends, and finally strangers. In addition to the embezzlement charges, she is charged with 12 counts of felony misappropriation of identification. The embezzlements cost the credit union $712,247. Police said Powers allegedly took out at least 18 loans--ranging from $2,000 to $150,000-- in other people's names and bought vehicles, a boat, ATVs, property and jewelry among other things (The Janesville Gazette June 27) … * FRANKFORT, Ky. (6/29/11)--Three men face multiple charges related to the theft of an ATM from Kentucky Employees CU in Frankfort, Ky. Thieves used a stolen backhoe to pull the ATM out of a parking lot, leaving a torn cable and broken glass. The ATM was found later. Arrested were Tony Traylor, 36; Michael Raisor, 37; and Craig Ellis, 31. Ellis was already in jail on a drug-related charge. Investigators said the ATM theft was likely connected with drugs (lex18.com June 28) … * CHARLESTON, W. Va. (6/29/11)--West Virginia FCU has tapped Nick Arvon as its new CEO, announced the South Charleston-based credit union. Arvon has been CEO of the Charleston Area Medical Center's CAMC FCU for the past 13 years. He also has served in management positions at accounting firms Arnett & Foster, and Ernst and Young. Arvon succeeds Wally Preston, who is retiring after 33 years. Preston will remain as treasurer on the $166.3 million asset credit union's board. West Virginia Federal has 12,912 members and three locations. It serves members in six counties (Daily Mail June 28) … * HAGERSTOWN, Md. (6/29/11)-- Ongoing Operations, a business continuity credit union service organization (CUSO), is celebrating its fifth anniversary this month. It was founded by 10 credit unions. "After Sept. 11, many credit unions in the Washington, D.C., metropolitan area found themselves in the same boat--with restricted access to branches and a need for a much broader business continuity solution," said Juri Valdov, chairman of the board of managers. "The CUSO helped solve local challenges and evolved to service credit unions nationwide," he said. It serves 130 credit unions and protects one-fifth of all industry assets with facilities in Hagerstown, Md.; Phoenix, Ariz.; Longmont, Colo.; and Middletown, Va. …

Calif. Capital Access Program CUs work on biz loans

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SACRAMENTO, Calif. (6/29/11)--A program in California has begun providing new lending and economic opportunities for small businesses and credit unions in the state. So far, three credit unions have enrolled in the California Capital Access Program (CalCAP), and several others are considering it. CalCAP, which received $84 million in federal funding from the Small Business Lending Act of 2010, can use the funds to leverage more than $2 billion in small business loans in the state. The program is administered by the California Pollution Control Financing Authority (CPCFA) in the State Treasurer's Office. The program encourages financial institutions in the state to make loans to small businesses that fall just outside conventional underwriting standards. The program provides a form of loan portfolio insurance that can give lenders up to 100% coverage on certain loan defaults. With each new loan, the borrower, lender and CalCAP each contribute to a loan-loss reserve fund. The fund grows over time and encourages lenders to make loans that do not fit under normal lending guidelines. Under the program, small businesses can receive loans from $500 to several million dollars. Mid-Cities Financial CU, a $25 million asset credit union based in Compton, Calif., was among the first credit unions on board with the program. "This gives the credit union the opportunity to help a group of struggling small businesses we may not have otherwise been able to assist," said Melia Keller, president/CEO. "CalCAP provides loans to businesses that may not otherwise qualify for a loan," said Bill Lockyer, state treasurer and chair of CPCFA. "In a tough economy, the additional risk coverage on loans is a win-win for the businesses and financial institutions." For a list of participants, use the link.

Texas league to create Facebook game app

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FARMERS BRANCH, Texas (6/29/11)--With a grant from the Texas Credit Union Foundation (TCUF), the Texas Credit Union League (TCUL) is creating an interactive Facebook game that will educate consumers about personal finance. Because TCUF’s mission is to empower consumers to improve their financial well being, supporting the development of a game application to help them make smarter financial choices was a natural fit, foundation Executive Director Courtney Nickles told the LoneStar Leaguer (June 28). The league is working with AES Connect, a San Francisco-based Facebook development company to create the game. Still in the early stages of development, the game will feature multiple levels of play on topics such as budgeting, savings and investing. When players have mastered one level, they will not move on to the next level until reading a pop-up factoid about credit unions. The Facebook game is one element of an International Year of Cooperatives campaign that TCUL has developed for 2012.

AmeriChoice FCU broadcasts reality show on weddings

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MECHANICSBURG, Pa. (6/29/11)--AmeriChoice FCU in Mechanicsburg, Pa., has found a new venue for its ongoing effort to provide financial education--to help young couples in south-central Pennsylvania through Reality TV. The credit union has partnered with the TV show “Wedding in Style” as it follows engaged couples through the process of planning their weddings (Life is a Highway June 28). Throughout the series, the $166 million-asset AmeriChoice in Mechanicsburg, Pa., helps the engaged couples navigate the financial situations associated with combining two lives into one. This includes advising couples in financing their wedding and honeymoon, providing a mortgage to buy their first home, and combining their finances. “At AmeriChoice, we understand the excitement and stress of getting married, and we are here to help educate our members and community as they make important financial decisions,” Carol Fastrich, vice president of marketing, told the Pennsylvania Credit Union Association. “This reality program is a great tool for us to reach out to young couples and help them make educated decisions at the beginning of their marriage and avoid future financial mistakes.” The first edition of “Wedding in Style” aired Monday night before “The Bachelorette” on ABC27, Harrisburg, Pa., and will continue to air on the last Monday of every month at 7:30 p.m. ET.

Federation holds 37th Serving the Underserved Conference

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HOLLYWOOD, Calif. (6/29/11)--Diana Dykstra, president/CEO of the California/Nevada Credit Union League was the keynote speaker at the opening of the National Federation of Community Development Credit Unions’ 37th Serving the Underserved Conference in Hollywood, Calif.
Click to view larger image California/Nevada Credit Union League President/CEO Diana Dykstra, left, keynoted the opening of the National Federation of Community Development Credit Unions’ 37th annual conference in Hollywood, Calif. On the right is Cliff Rosenthal, president/CEO of the federation.
Dykstra commended the group for serving low-income groups that are often overlooked in the financial services world. “While lots of credit unions were licking their wounds and scaling back during the recession, you continued serving your communities the best you could,” Dykstra said. “You do remarkable work, you change lives, and most of all, you embody what credit unions are all about.” Terry Agius, vice president of advocacy for SchoolsFirst FCU and CEO of Comunidad Latina FCU, both of Santa Ana, Calif., shared the story behind Comunidad Latina’s beginnings. With the federation’s help, Communidad Latina now boasts a solid capital base, growing loan portfolio and steadily increasing membership base.
Click to view larger image Terry Agius, vice president of advocacy for SchoolsFirst FCU and CEO of Comunidad Latina FCU, both of Santa Ana, Calif., discussed Comunidad Latina’s successful start up.
Federation President/CEO Cliff Rosenthal presented a recognition plaque to Sister Corinne Florek, director of the Mercy Partnership Fund and Mercy Investment Services, and a pioneer in community investing. The group was the first investor in the federation nearly 30 years ago, while fostering other nonprofit organizations through its Religious Communities Investment Fund. Rosenthal told the audience that the federation’s Community Development Investment Program was no more than a concept until the sisters made an initial investment of $30,000. “We had an idea to start a loan fund, but we had no track record and no net worth,” Rosenthal said. Florek applauded the credit union movement’s ability to help members better themselves. The industry mirrors the sisterhood’s mission in several ways: it creates financial democracy, spurs collaboration and promotes justice, she said.
Click to view larger image From left, National Federation of Community Development Credit Unions President/CEO Cliff Rosenthal presents a proclamation to Sister Corinne Florek. (Photos provided by the National Federation of Community Development Credit Unions)
“Your stories and ours have become interwoven,” she said. “Because we sisters hold things in common, we have money to do things. We are one big cooperative--one that’s so countercultural, yet so powerful. We are in this for the long haul. You could almost say we're like one big credit union.” She said credit unions are the sisterhood’s boots on the ground. “You credit unions are present where we can’t see,” Florek said. “You are our eyes, our hearts, and our ears. Without you, we could not carry out our mission.” When it comes to the sisters’ ministry goals, they aren’t immune from tight budgets and a growing lack of participation by young adults. Even with these obstacles, Florek said she’s remained steadfast with the federation because it gives her meaning and purpose. “Just like you, when times get tough, I still know that what I'm doing is right,” Florek told the audience. “You’re all about people, value, and mission just like we sisters are. We’re both motivated by service, we’re both democratic, and we both pull our resources for the common good.”

Filene studies diversifications impact on CU performance

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MADISON, Wis. (6/29/11)--Should credit unions diversify their products and services or specialize? According to new research from the Filene Research Institute, diversifying is sometimes linked with better performance--and sometimes not. In the report, "Does Diversification Improve or Worsen U.S. Credit Union Performance?" author William Jackson, a professor of management and finance at the University of Alabama, asks the diversity or specialize question. He tested whether diversification impacted aggregate credit union performance over a 10-year period, from 2000 to 2009, and constructed diversification measurements around loan products, deposit products, revenue sources, and markets served (field of membership). The findings:
* High revenue diversification (higher than credit union median revenue from noninterest income) is associated with higher return on assets (ROA) at 10.7 basis points over the decade studied. * High deposit diversification (higher than credit union median number of deposit products) is associated with lower ROA at 7 basis points during the period.
"The key, actionable findings appear to be that credit unions could benefit by diversifying their noninterest revenue streams, decreasing the variety of deposit products offered, and questioning the effectiveness of a diversified loan product strategy," said a summary written by George Hofheimer, chief research officer at Filene. He suggested that credit unions ask three questions:
* Is less more? The concept of "choice overload" indicates that less choice is actually preferable to consumers. Perhaps a less diversified deposit and loan product set would encourage more members to take up the credit union's services, said Filene. * Low cost and differentiation? Filene has suggested that credit unions search for uncontested market opportunities through the simultaneous pursuit of lower cost and differentiation. However, credit unions would need to eliminate or reduce certain elements of what is considered as "standard" in financial services. * Should we temper these findings? The study represents aggregate credit union data, said Hofheimer. Individual results vary. The study's' biggest take-away, according to Jackson, is that "diversification is sometimes directly linked with better (or much better) performance, and sometimes it is directly linked with worse (or much worse) performance.

North Dakota flooding prompts CUAid activation

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MADISON, Wis. (6/29/11)--The National Credit Union Foundation (NCUF) has activated the online disaster relief system CUAid.coop to raise money for victims of flooding in North Dakota.
Click to view larger image This is the submerged neighborhood of a credit union employee in Minot, N.D., which was hit by flooding.
“It’s nearly impossible to imagine the devastation a flood can cause until you see it or live through one,” says Robbie Thompson, president/CEO of the Credit Union Association of the Dakotas. “The pictures and video coming from Minot are heartbreaking. With one credit union totally under water and seven others in the immediate area affected by the flood, more than half of the 40,000 members have been impacted by a combination of home loss, forced evacuation from their home, or job loss due to their employer’s business being destroyed. “We sincerely appreciate the efforts and support from credit union members across the country and we encourage and appreciate your kind consideration and contributions to CUAid in this time of need,” Thompson added. Credit union supporters can make donations through a secured website that accepts credit cards and wire transfers. Anyone connected with the credit union movement, including credit union organizations and vendors, can contribute to CUAid directly to support other credit union people.
Click to view larger image GEM FCU in Minot, N.D., remains underwater Tuesday from flooding that hit the area. (Photos provided by the Credit Union Association of the Dakotas)
“We encourage credit union leaders to use CUAid as a channel to collect donations from their employees, volunteers, and members,” said NCUF Executive Director Bucky Sebastian. As donations are posted through CUAid.coop, NCUF will coordinate with the Credit Union Association of the Dakotas to distribute money to credit union employees and members in the affected areas. CUAid was developed by NCUF in cooperation with state credit union foundations, state credit union leagues, and the Credit Union National Association’s Disaster Preparedness Committee in 2006. The secure online tool links the entire credit union system to raise money for disaster relief. This is the third time in three months that CUAid has been activated, which is unprecedented. The most recent occasions were after tornadoes in Alabama and Missouri.

Members vote down merger in Australia

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MALENY and BRISBANE, Australia (6/29/11)--Members of Maleny (Australia) CU (MCU) voted down a merger with Credit Union Australia, Brisbane, at a special general meeting Saturday. After speakers for and against the merger made their cases, 22% of members voted, 637 to 464, to reject the planned merger (sunshinecoastdaily.com June 25). The vote came after MCU board members lobbied for several months, saying that the credit unions would not have a sustainable future if the merger did not happen. The MCU board said the merger was needed to overcome limitations of the credit union’s current capital base and the increasing complexities of compliance, management and governance, the newspaper said. The board also said being a part of larger organization would create increased access to products and services. Credit Union Australia is the largest credit union in the country.

N.Y. CUs presented Maxwell Herring awards

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ALBANY, N.Y. (6/29/11)--The Credit Union Association of New York announced the five recipients of its Dora Maxwell Social Responsibility Service Award and the three recipients of its Louise Herring Philosophy in Action Member Service Award.
Click to view larger image The Credit Union Association of New York winners of the 2011 Dora Maxwell Social Responsibility Community Service Award are, from left: Mark Bowman, Visions FCU, Endicott; Donna Spada and Patti Osterhoudt, Mid-Hudson Valley FCU, Kingston; Marsha Brauer, Clarence (N.Y.) Community & Schools FCU; and Mario DiFulvio, Horizons FCU, Binghamton.
These credit unions received 2011 Dora Maxwell first-place awards based on their demonstration of credit union philosophy and their community activities:
* Bethex FCU, Bronx, N.Y., in the $5 million to $20 million assets category, for organizing the We Care grassroots network. The network coordinates the resources of 25 church-based and community development credit unions, and National Credit Union Administration regulators, association advisers, service providers and volunteering organizations, to provide mutual support, information and assistance. * Horizons FCU, Binghamton, in the $50 million to $100 million asset category, for partnering with the Safe Streets Association to improve Binghamton’s West Side neighborhood. Credit union employees have participated in lobbying, community meetings, community events and other initiatives to make the area safer for their members and their community. * Mid-Hudson Valley FCU, Kingston, in the $500 million or more asset category, for supporting the American Cancer Society’s Relay for Life campaign. Through personal and team fundraising, credit union employees raised more than $25,000--earning the credit union the distinction of top corporate donor and 13th highest fundraising team in the Eastern Division.
Click to view larger image Winners of the 2011 Louise Herring Philosophy in Action Member Service Award for the Credit Union Association of New York are, from left: Mark Welshoff, Palisades FCU, Pearl River; Marsha Brauer, Clarence (N.Y.) Community & Schools FCU; and Mark Bowman, Visions FCU, Endicott. (Photos provided by the Credit Union Association of New York)
In recognition of the practical application of the credit union philosophy, these credit unions were first-place recipients of 2011 Louise Herring Awards:
* Clarence (N.Y.) Community and Schools FCU, in the $50 million and under asset category. The credit union expanded its ATM network access in 2010, offering members more convenient, surcharge-free ATM locations. * Palisades FCU (PFCU), Pearl River, in the $50 million to $250 million asset category. In 2010, the credit union began using a 38-foot mobile banking center, PFCU One, to deliver its services to more than 20 locations each week. The mobile bank stops primarily at businesses and senior adult residential facilities, offering members onsite a complete range of services. * Visions FCU, Endicott, in the $250 million and over asset category. The credit union partnered with the American Safety Council to provide its members with an online defensive driving course as an alternative to traditional defensive driving classes. More than 200 members completed the online course in 2010.
Winning entries from both categories go on to the national finals, the results of which will be announced in March 2012 by the Credit Union National Association.

WOCCU helping CUs re-emergence in Liberia

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GANTA, Liberia (6/29/11)--For the first time since the last of two civil wars ended eight years ago in Liberia, activists are taking serious steps towards reactivating the African nation’s credit union movement.
Click to view larger image The Liberian credit union movement is regaining traction in the aftermath of two civil wars. A representative of Liberia Credit Union National Association, Liberia’s credit union trade association, makes a point at a recent meeting in Ganta.
The country’s original credit unions, which all but ceased to exist at the outbreak of the first war in 1989, hope to resuscitate their movement under the leadership of the Liberia Credit Union National Association (LCUNA). In the seven years that the first civil conflict raged in Liberia, a country colonized by freed American slaves in 1847, more than 200,000 people lost their lives and another one million were displaced. After three years of relative peace, a second conflict erupted in 1999. In 2003, the combined actions of United Nations peacekeeping forces and Women of Liberia Mass Action for Peace, a social-action group of 3,000 Christian and Muslim women, helped bring the conflict to a close. The women’s group’s actions also are credited with helping elect President Ellen Johnson Sirleaf, Liberia’s and Africa’s first democratically elected female president. Prior to the 1989 civil war, Liberia had 71 credit unions with $10 million in savings and 20,000 members. Today, the country has 22 credit unions with $2.3 million in savings serving fewer than 10,000 people, according to Dave Grace, World Council of Credit Unions (WOCCU) senior vice president of association services, who attended a credit union organizational meeting in rural Ganta last month.
Click to view larger image WOCCU’s Dave Grace (right) participates in a radio interview during a two-day meeting with Liberia's credit union organizers. (Photos provided by the World Council of Credit Unions)
“The biggest challenge facing Liberia’s credit unions is not their lack of systems or training, but rather the struggle to look to the future and realize that the best days are still ahead for the country and its credit union movement,” said Grace, who attended the two-day workshop at the invitation of the Central Bank of Liberia and the United Nations Capital Development Fund. In late 2006, WOCCU led a two-day workshop in the capital city of Monrovia to teach representatives from Liberia’s credit unions about topics ranging from model credit union building and savings mobilization to governance and WOCCU’s PEARLS monitoring system. About 40 credit union directors and staff from 18 credit unions, along with officials from LCUNA, the Liberian Cooperative Development Agency and the U.N. Development Program, attended. Many participants received their first-ever training at the workshop. WOCCU said it remains optimistic that the resurgence of interest in credit unions, coupled with the stable, democratically elected government in Liberia, will help the country’s movement gain the traction it lacked in 2006 to move forward. Sirleaf's background--she earned an accounting degree from the University of Wisconsin-Madison and an economics degree from the University of Colorado-Boulder, worked for Citibank and World Bank in Africa, and was part of the Liberia’s government before being elected president--creates a climate conducive to the re-emergence of the country’s credit unions, according to Pete Crear, WOCCU president/CEO. “It’s long been my dream to see the Liberian credit union movement restarted,” said Crear, who will retire at the end of July. “It will be a fabulous capstone on my career at WOCCU if this happens.” On a fundraising visit to the U.S. in 2008, Sirleaf said that credit unions providing women with small business loans may be part of an initiative to improve the lives of Liberia’s women and revitalize its local marketplaces, many of which are home to women-owned stands.

CU System briefs (06/27/2011)

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* FLINT Mich. (6/28/11)--Leroy Nesbit Jr., longtime volunteer at Flint, Mich.-based Dort FCU, died June 20. He was a volunteer for 36 years. "Leroy was the epitome of credit union volunteerism," said David Adams, president/CEO of the Michigan Credit Union League (Michigan Monitor June 27). "He was active with the Michigan league and the Credit Union National Association throughout his career, participating regularly in Washington, D.C., and Lansing lobbying trips. He was well-known and respected by lawmakers and he always represented credit unions with character and determination," said Adams. Nesbit was awarded the league's Distinguished Service Award and was inducted into the league's credit union Hall of Fame. Funeral services were Saturday … * FLINT, Mich. (6/28/11)--Walter L. Skidmore, former general manager of Auto Workers Flint FCU, died June 15 at home surrounded by his family. He was 79. Skidmore was general manager of the credit union until 1988, when it merged into Motor City Co-op, said the Michigan Credit Union League (Michigan Monitor June 27). He is survived by his wife, five children, five grandchildren, one great-granddaughter, and one brother …

DFI Wis. budget maintains support for safety soundness

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MADISON, Wis. (6/28/11)--Although Wisconsin credit unions are disappointed at the credit union-to-bank conversion measure included in the budget signed by the state's governor, another aspect of the budget brought good news for their regulator. Wisconsin Department of Financial Institutions (DFI) Secretary Peter Bildsten said the passage of the state budget "maintains support for DFI's efforts to ensure safety and soundness of Wisconsin's financial institutions." "I am pleased that the legislature and the governor provided the resources we need to preserve and protect the state's financial institutions," said Bildsten. "Wisconsin families and businesses can be confident in our state's financial services providers." The new budget increased efficiencies for new business formations by transferring some functions of the Office of the Secretary of State to DFI. "Moving these functions will streamline the process for starting new business," Bildsten said, noting the budget also provides continuing support to DFI's Office of Financial Literacy to help Wisconsin citizens better manage their personal finances. The Wisconsin Credit Union League, which had urged the governor to veto the part of the budget provision that makes it easier to convert credit unions to banks, supported the Office of Credit Unions (OCU), which is part of the DFI, in its measure to create a credit union examiner provision to meet statutory examination requirements and provide adequate oversight of the credit union industry. "Regular examinations of all financial institutions by the state regulator help to ensure safe and sound operations," said the league in a memo to the Joint Committee on Finance. "The safe and sound provision of services to credit union member-owners is the single highest priority of Wisconsin's credit unions." For more detail on the conversions provision opposed by the league and credit unions, see the elated story, "Wis. gov. fails to veto CU-bank conversion bill" in News Now's System section.

UW CU staffer named to Gov.s Fin Lit Council

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MADISON, Wis. (6/28/11)--Jaimes Johnson, director of community and campus relations at Madison, Wis.-based UW CU, has been named to the State of Wisconsin Governor's Council on Financial Literacy. He was nominated by Ray Allen, deputy secretary of the Department of Financial Institutions (DFI) and confirmed by Gov. Scott Walker. Johnson was selected because of his experience with and dedication to financial education outreach for UW CU on a statewide level. The council's mission is to measurably improve the financial literacy of Wisconsin citizens. Council members, collaborating with the DFI's Office of Financial Literacy, will consider and implement research and policy initiatives and be responsible for annual initiatives such as Money Smart Week Wisconsin, a statewide public financial literacy awareness campaign set for October. Johnson will represent UW CU on the council. He will work alongside representatives from the state Department of Public Instruction, the office of the Commissioner of Insurance, Wisconsin's National Institute of Financial and Economic Literacy, and other partners committed to improving financial literacy.

CUNA board resolution supports 2012 Year of Co-ops

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WASHINGTON (6/28/11)--The Credit Union National Association (CUNA) board is calling on U.S. credit unions to participate in upcoming activities marking 2012 as the International Year of Cooperatives. In a resolution adopted at its June 20 meeting in San Antonio, the CUNA board pledged to “lead efforts to engage the credit union community in the promotion of International Year of Cooperative Activities.” Of the more than 29,000 cooperatives in the U.S.--including those in the agriculture, dairy, housing, grocery, and rural electric sectors--credit unions represent the largest component, with 7,400 institutions with nearly $1 trillion in assets cooperatively owned by more than 92 million consumers, the CUNA board resolution noted. The United Nations General Assembly has proclaimed 2012 to be the International Year of Cooperatives (IYC). Celebratory events will begin Oct. 31, 2011, with a speech on the floor of the United Nations General Assembly by the U.N. Secretary General in New York. Recognition events will then extend throughout the remainder of 2011 and into 2012. “Just as the Year of Micro-finance in 2005 helped draw national and international attention to that issue, we in the cooperative community see the 2012 designation as a unique opportunity to raise awareness and strengthen the co-op brand,” said CUNA President/CEO Bill Cheney. The theme for the international year is “Cooperative Enterprises Build a Better World.” CUNA and the World Council of Credit Unions have already dovetailed that theme with this year’s International Credit Union Day on Oct. 18, whose theme is “Credit Unions Build a Better World.” CUNA is also participating on an IYC steering committee spearheaded by the National Cooperative Business Association (NCBA). The group is developing a comprehensive plan whose goals include raising the profile of cooperatives, improving access to cooperative business, educating senior government officials, supporting objective studies demonstrating the economic value of co-ops, and reaching out to youth. Tactics include hiring a public relations firm, engaging a celebrity spokesperson, implementing a social media strategy, distributing marketing tool kits to credit unions and other individual cooperatives, funding for research, and outreach to policy makers. Earlier this year, a resolution on the IYC was introduced in the U.S. Senate by Sens. Tim Johnson (D-S.D.) and Thad Cochran (R-Miss). The NCBA- and CUNA-backed measure currently has 30 co-sponsors. NCBA has asked CUNA and other national co-operative organizations to adopt resolutions of their own aimed at engaging their members in IYC activities. The CUNA board resolution was drafted and recommended by the CUNA Cooperative Alliances Committee and approved June 20 at the board’s meeting that was held in conjunction with CUNA’s America’s Credit Union Conference & Expo in San Antonio. Use the link to access the text of the CUNA board resolution.

Montana CDCUs win national award for VITA work

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HELENA, Mont. (6/28/11)--The National Community Tax Coalition (NCTC) has recognized Montana Credit Unions for Community Development (MCUCD) for its Volunteer Income Tax Assistance (VITA) Program, naming MCUCD, the charitable arm of the Montana Credit Union Network, as its most innovative affiliate. A statewide nonprofit organization based in Helena, MCUCD works with Montana’s credit unions to improve the lives and financial independence of all Montanans. The VITA program is a key component in that effort. The Internal Revenue Service’s VITA Program provides free tax preparation through trained and certified volunteers to assist low-income people who cannot prepare their own. Since 2006, MCUCD has assisted 24 Montana credit unions to sponsor VITA sites in their branches, offering free tax preparation services in 21 communities. Most of the credit unions are in rural Montana where no other free, on-site tax preparation is available for area residents. Volunteers at Montana’s credit unions have filed 7,795 returns for low-income Montanans, helping them claim more than $6.4 million in federal tax refunds. MCUCD won the award for its innovative model of providing VITA sites in rural credit unions. “In a state as large and rural as Montana, we have to be creative in order to keep our credit unions and volunteers engaged and supported,” said Jeanne Saarinen, MCUCD executive director. Creative problem solving earned MCUCD the first-ever Affiliate Innovation Award given by NCTC. The innovation MCUCD implemented is a way of interacting with volunteers to ensure tax returns are prepared accurately, and volunteers preparing those returns always have the support they need. NCTC is a national membership organization for organizations offering free tax and financial services to low-income working families.

Potential state shutdown prompts aid from CU

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BURNSVILLE, Minn. (6/28/11)--With a potential state government shutdown looming on Friday, Burnsville-Minn.,-based U.S. FCU is offering aid and education to those who may experience a sudden change in their take-home pay. In support of potentially displaced state employees, U.S. Federal is rolling out new programs and reminding the community of existing services. The credit union is offering a financial education and loan restructuring program to help members get their finances in order, pay down debt, and ultimately reach their financial goals. The credit union’s Borrower Resources program was introduced in 2008 in response to the changing economic times and has since served hundreds of members. Loan restructuring, consolidation, credit repayment assistance, and financial counseling are services available through the program. The credit union also is offering a short-term signature loan to fill temporary financial needs caused by a government shutdown. Also, US FCU hosted a seminar last night and will host another July 7 that addresses how to proactively manage financial spending and obligations during the shutdown period. The seminar, “Surviving the Shutdown,” presented by Lutheran Social Service of Minnesota, focuses on strategies for re-evaluating budgets and developing a credit management plan during the transition.

Federation in new digs

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NEW YORK (6/28/11)--The National Federation of Community Development Credit Unions has relocated its main office just a few blocks away from its former location. The federation’s new home will be at 39 Broadway, 21st Floor, New York, N.Y. 10006. The new offices are located just 1.5 blocks south of the 4/5 Wall Street Subway Station and 1.5 blocks north of the 4/5 Bowling Green Subway Station. The federation moved Monday. Throughout the move, New York City staff were mostly unavailable because the federation’s telephone system and e-mail servers were disconnected. New York City staff members are slated to be back online today.

Wis. gov. fails to veto CU-bank conversion measure

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MADISON, Wis. (6/28/11)--The Wisconsin Credit Union League expressed disappointment Monday that Gov. Scott Walker failed to use his line-item veto to eliminate a non-budgetary financial institution chartering policy that permits direct conversion of a member-owned credit union into a stockholder-owned bank. The policy, slipped into the 1,500-page, $66-billion budget bill by the Joint Finance Committee and approved by the legislature, makes it easier for Wisconsin’s 2.2 million credit union members to be stripped of their equity in the cooperative financial institutions they own, said the league The measure was added to the budget bill at the last minute at the request of the Wisconsin Bankers Association without notice to any credit union, member, or credit union trade association, and without a public hearing. “We sincerely hoped Governor Walker would have heeded the recommendation of nearly 1,000 credit union advocates, dozens of cooperative businesses and the credit unions’ trade association, all of whom requested a veto,” said league President/CEO Brett A. Thompson. “Controversial and complex financial institution chartering policy clearly does not belong in a bill related to the state’s finances.” Thompson expressed concern that Walker signed a policy into law that can easily be abused by a small group of individuals at the expense of the majority of credit union member-owners. “It’s discouraging that the legislature and governor didn’t provide an opportunity for the consumers who own their credit unions to share their perspectives on the matters directly related to them,” said Thompson. “With this new law, the legislature has made it easier for a few individuals to latch onto the equity of credit union members and turn it into even bigger profits for a few bank shareholders.” Any policy to allow for the conversion of a state-chartered, not-for-profit, member-owned credit union to a shareholder-owned, stock bank should include a transparent, neutral and prescriptive member notification process and a meaningful voting threshold, Thompson said. Notification and voting ensure that the membership understands the consequences of the conversion vote and has made an informed judgment about the future of the institution they own. “Unfortunately, the policy the governor left in the budget bill fails on all counts,” Thompson said.

Crears legacy to continue through new fund

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MADISON, Wis. (6/28/11)--The African American Credit Union Coalition (AACUC) and World Council of Credit Unions (WOCCU) have teamed up to honor outgoing WOCCU President/CEO Pete Crear by raising funds to continue his work after he retires.
Click to view larger image Pete Crear (center), outgoing president/CEO of the World Council of Credit Unions (WOCCU), spent time with credit unions around the world during his tenure at WOCCU. (Photo provided by the World Council of Credit Unions)
The newly created Pete Crear Fund will support the work he was passionate about throughout his credit union career of more than 40 years. AACUC will use its share of donated funds to support financial literacy, minority internships and small credit union development programs. WOCCU’s share of the funds will support credit union development programs in Africa and training for African credit union leaders. “Pete believes in building the credit union industry by training young adults for leadership positions,” said AACUC Chair Bert Hash Jr., president/CEO of MECU, Baltimore. “Through the Pete Crear Fund, AACUC will continue providing internships, mentorships, hands-on technical assistance and management opportunities to encourage the youth and train them to become future leaders in the movement.” After joining the credit union movement in 1965 as a management trainee with the Michigan Credit Union League, Crear drove the industry forward on local, national and international levels. Throughout his career, he worked in leadership positions for the Connecticut and Indiana Credit Union Leagues, Credit Union National Association and the American Association of Credit Union League Executives before joining WOCCU in 2005. Under Crear’s leadership, WOCCU expanded its membership, increased its services and has reached out to a growing number of countries in an effort to improve more people’s lives through credit unions. To honor Crear, credit unions can make a U.S. tax-deductible donation on the WOCCU website. See the link. Please type “Pete Crear” in the comments box.

Arizona league honors outstanding CU people

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PHOENIX (6/28/11)--The Arizona Credit Union League (ACUL) presented two individual awards during its 2011 annual convention. The 38th annual Very Outstanding Credit Union Person (VOCUP) award was presented to Dan Desmond, CEO of TruWest CU, with $783 million assets, Tempe. The VOCUP award is presented to a credit union executive or volunteer who has given time and energy to the movement through serving on league, chapter and credit union boards or committees as well other volunteer activities. Each recipient exemplifies the spirit of philosophy and professionalism that made the credit union movement a success in Arizona. Larry Pfeiffer, treasurer and board member of Arizona Central CU, Phoenix, was presented the Rose Mofford Credit Union Volunteer Award. Since 1989, ACUL has presented the award to an individual for distinguished volunteer service. Pfeiffer has been a member of the $413 million-asset Arizona Central CU for nearly 40 years and has been an active volunteer with ACCU and his community for more than 25 years, serving in several capacities.

CUANY elects new board chair directors

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ALBANY, N.Y. (6/27/11)--The Credit Union Association of New York recently elected Louis Jimenez, CEO/treasurer of Montauk CU, New York, as chair of its board of directors at the association’s annual membership meeting in Lake Placid, N.Y. Jimenez served as the board’s vice chair for the past two years. Jimenez succeeds Alfred Frosolone, CEO of Niagara’s Choice FCU, Niagara Falls. Frosolone’s service on the board will continue. Other board officers include:
* Vice-chair--Laurie Baker, senior vice president/chief operations officer, The Summit FCU, Rochester; * Secretary--Ann Hynes, president/CEO, St. Pius X Church FCU, Rochester; and * Treasurer--Mark Pfisterer, president/CEO of AmeriCU, Rome.
Two new members were also elected to the board for three-year terms during the meeting:
* Barbara Dillon, CEO, SUNY Geneseo FCU--up to $25 million assets; and * Shirley Jenkins, board secretary, Municipal CU, New York--more than $500 million assets.
Other Credit Union Association of New York board members include:
* Marie Betti, treasurer/CEO, Western New York FCU, West Seneca; * John Gibardi, president/CEO, Entertainment Industries FCU, New York; and * Michael Tobler, president/CEO, Albany (N.Y.) Firemen’s FCU.
Leaving the board after 25 years of service was former chair John Prumo, president/CEO, GPO FCU, New Hartford. There will be a special election for one seat, representing the $50-$100 million asset category. In addition to Prumo, outgoing Chairman Frosolone also recognized two other directors whose terms ended in 2011: Vicky Matteson, manager/CEO, Jamestown (N.Y.) Area Community FCU and William Spearman, president/CEO, Mid-Hudson Valley FCU, Kingston. The association’s board of directors comprises 11 directors, representing five asset categories: up to $25 million, $25-$50 million, $50-$100 million, $100-$500 million and more than $500 million.

CMG to fund Filene consumer lending study

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MADISON, Wis. (6/27/11)--CUNA Mutual Group is funding a Filene Research Institute study on consumer loan growth strategies and best practices to help credit unions make the most of every lending opportunity. “The study shows the innovation under way today in credit union lending programs and provides real, practical applications for our marketplace,” said Mark Meyer, Filene CEO. For the study, Filene conducted interviews with credit unions that consistently showed more than 5% annual growth in their consumer lending programs (auto and credit card) between 2008 and 2010 and had more than $50 million in assets. “Only 24 credit unions out of a potential 1,500 showed growth,” Meyer said. The study identifies commonalities, best practices and case studies for credit unions to use to help them grow loans. “Through our own voice of customer research, we know that loan growth is a top priority for credit unions today,” said Dan Kaiser, CUNA Mutual vice president of lending. The study is scheduled for a late-summer release. The nonprofit Filene Research Institute is a consumer finance think tank serving the North American credit union system of 100 million members and $950 billion in assets. Filene publishes objective research and fosters consumer-focused financial innovation. The institute collaborates with leading researchers and academic institutions worldwide.

Steinberger named dean of Western CUNA Mgmt. School

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ONTARIO, Calif. (6/27/11)--Michael Steinberger, associate dean of Western CUNA Management School (WCMS), has been named dean of WCMS. James Likens--the school’s CEO, who has served as both president and dean--will retain his title as president. Both will continue working together to direct the school’s operations. Steinberger, an economics professor at Pomona College in Claremont, Calif., became associate dean of WCMS in 2006. “This much-deserved change in Michael’s status reflects the reality of his growth and assumption of increasing responsibility,” Likens said. “WCMS is most fortunate to have Michael; his skills and commitment have enhanced the effectiveness of this school.” WCMS Board Chairman and Travis CU CEO Patsy van Ouwerkerk said Steinberger’s appointment is well-deserved. “Many of us on the WCMS board remember first meeting Michael, and being so impressed,” she said. “Now it feels like he has always been one of us. We value Michael and applaud his commitment to this school and the role he is playing in increasing the students’ learning opportunities.” Steinberger said he was touched and honored by the recognition. “It is a great honor to be a part of Western CUNA Management School,” he said. “I have seen first-hand how the school has helped change the lives of its students and alumni. My involvement with WCMS is some of the most significant work I have ever done. I very much appreciate the opportunity to contribute to the school’s success.” Presently Steinberger is taking the lead in organizing the celebration of the WCMS 50th graduating class. A special alumni program is planned that will take place July 20-21 at the end of the 2011 school session. Steinberger graduated from the University of California at Berkeley with degrees in economics, political science, and statistics in 1999. He received highest honors in each of his three degrees, was awarded the Department Citation Award in statistics, and was admitted to Phi Beta Kappa as a junior. He earned a Ph.D. in economics from the Massachusetts Institute of Technology in 2005. He came to Pomona College in 2004, where he currently serves as associate professor of economics. In his very first year of eligibility, in May 2008, Steinberger received the R.J. Wig Distinguished Professor Award for Excellence in Teaching, Pomona College’s highest honor for exceptional teaching, concern for students, and service to the college and community. He also is a credit union enthusiast. Following the example of his parents, he first joined Schools First FCU in Orange County, Calif., at age 13, and today serves on the Supervisory Committee for First City CU in Los Angeles. WCMS is sponsored by the leagues of Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming in cooperation with Pomona College. Graduates who have developed their skills and knowledge at the school occupy positions of leadership and responsibility at some of the nation’s leading credit unions. Western CUNA Management School helps credit union professionals prepare themselves to keep pace with a rapidly changing business environment. The school is designed for managers and upper-level operational staff who have set credit union management as their career goal and understand the need to keep abreast of developments in the industry.

July 8 is NYIB classroom reporting deadline

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ALBUQUERQUE, N.M. (6/27/11)--Financial educators and marketers have until Friday, July 8, to report classroom work for official recognition from the National Youth Involvement Board (NYIB). NYIB collects annual figures through user profiles on its website to recognize outstanding performance and support credit union advocacy. While the NYIB website accepts continual data entry, the network’s official reporting year is July 1, 2010 to June 30, 2011. Currently, credit unions for the first time in a decade fall short of average annual growth in financial education classroom presentation statistics NYIB will recognize top presenters and states in terms of presentations made and students reached at its 2011 Annual Conference July 25-28 in Pittsburgh. Reported data currently has credit unions reaching more than 300,000 students reached for the fourth consecutive year. Youth advocates reported reaching 413,460 students in 13,577 classrooms presentations during the 2009-10 reporting year. “Credit unions continue to do amazing things with young people, so our goal has been to maintain the average annual increase of just over 10% in students reached. If that holds true, we will have reached 450,000 young people in 2010-11,” NYIB Chairman Rebecca Isaacs noted. “We have long maintained that the numbers are in fact higher than our annual totals based on awareness of NYIB’s data collection, so we challenge all those who work in classrooms for credit unions--or those who know others who do--to close this reporting year with a flourish and get the recognition they deserve.” A feature on the NYIB’s website called “MyNYIB” allows users to set up profiles, retrieve data, and enter schools or organizations as recurring options for streamlined presentation entry. Presentation types include basic concepts, plus the NEFE High School Financial Planning Program and the PBS Biz Kid$ companion curriculum. Data collected by NYIB is valuable to credit unions, associations, regulators, and legislators. NYIB offered annual statistics at CUNA’s 2011 Governmental Affairs Conference and it encourages regular reporting throughout the year to provide relatively accurate search results for site visitors.

Illinois CUs talk to U.S. Rep. about their role in biz

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EAST ALTON, Ill. (6/27/11)--Illinois credit union representatives held a breakfast dialogue session this week in East Alton with U.S. Rep. John Shimkus (R-Ill.) as part of an ongoing effort to better acquaint local lawmakers with credit unions’ chapter network of political activists and show the importance of credit unions in the financial marketplace. More than 40 representatives from local credit unions and the Illinois Credit Union League (ICUL) attended the event, coordinated by the George G. Burnett and Southern Illinois chapters of credit unions. Within these chapter areas, 42 credit unions provide financial services to nearly 242,000 members and hold more than $4.3 billion in assets. During the event, credit union attendees discussed their legislative priorities and other issues of importance. Also, the Shimkus held a discussion about topics on the federal landscape and the environment in Congress. Events such as the recent breakfast with Shimkus are just one part of ICUL’s ongoing political action process. Other activities include a Hike the Hill event in Washington, D.C., an annual state legislative day event and reception in Springfield, district office visits, candidate interviews, and fundraising efforts for the Credit Union Political Action Council. Overall, 91 million U.S. consumers are member-owners of, and receive all or part of their financial services from the nation's 7,794 credit unions. In Illinois, there are 394 credit unions that serve more than 2.7 million members.

Students learn about CUs vs. banks at N.Y. CU

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BUFFALO, N.Y. (6/27/11)--Local elementary students visited Buffalo (N.Y.) Metropolitan FCU (BMFCU) to learn about the benefits of a credit union versus a bank, and a career in marketing. Sixty students from Discovery School #67 gathered outside the credit union’s newly renovated building on May 18 to listen to the assistant marketing director’s answers to their questions. The $71.6 million-asset BMFCU has been partnered with Discovery School for three years, providing a savings program. For young students today, a savings program and field trip are vital, said Patricia Edinger, CEO of BMFCU. “The job market and the financial industry are getting tougher and with programs like these, students will get a head start on deciding their professional career and setting goals for their financial well-being,” she added. “It has been such a wonderful partnership between the credit union and Discovery School,” Maureen Myers, the field trip coordinator and third-grade teacher said. “Participating in the programs encourages our students to become responsible financially. In the words of the children involved in our banking program this past year … ‘I love saving money’ … ‘I can’t wait to go to college. One thing is for sure, BMFCU is doing so much in helping to shape the future.” David Roy, the assistant marketing director, talked to students about the renovation of the credit union’s building and talked about a marketing profession at BMFCU. “It’s great to see career field trips designed for young students to interact with actual people in specific professions,” Roy said. “The interaction with the students was incredible and I loved the questions students asked me. The questions really helped students understand the importance of school.” He also used the opportunity to educate the students on credit unions.

La. league announces YPN steering committee

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HARAHAN, La. (6/27/11)--The Louisiana Credit Union League’s Young Professionals Network (YPN) recently announced the members chosen to serve on its steering committee. Those chosen include:
* Chairperson: Ronaldo Hardy, La Capitol FCU, Baton Rouge; * Alexandria Chapter: Cindy Beauregard, Heart of Louisiana FCU, Pineville; * Baton Rouge Chapter: Brett Reynolds, Neighbor’s FCU, Baton Rouge; * East Orleans Chapter: Kati Buchanan, NAS JRB CU, New Orleans; * Lafayette Chapter: Brian Leger, Lafayette (La.) Schools FCU; * Lake Charles Chapter: Jesse Busby, Calcasieu Teachers & Employees CU, Lake Charles; * Monroe Chapter: Jamie Walker, Ouachita Valley FCU, West Monroe; * Shreveport Chapter: Stephanie Sievers, St. Joseph’s Broadmoor FCU, Shreveport; * Tri-parish Chapter: Lacey Lingo, St. Tammany FCU, Slidell; and * West Orleans Chapter: Shasta Leininger, The New Orleans Firemen's FCU, Metairie.
The YPN Steering Committee will be challenged to create innovative solutions to meet the needs of young credit union professionals in Louisiana, said the league. Committee members will participate in a planning session on July 13, where they will define the mission of the network and begin setting goals and objectives for the network. Since its launch less than one month ago, the YPN already has more than 40 members from credit unions statewide. The first opportunity these members will have to connect with each other and meet their steering committee will be at LCUL’s 2011 Annual Meeting & Convention, Aug. 3-6 in New Orleans. The league is offering a discounted registration fee to YPN members, and also has designed a special education track for the young professionals.

Missouri CU Assoc. calls for MBL action and oversight

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ST. LOUIS (6/27/11)--The Missouri Credit Union Association (MCUA) is calling for action on member business lending (MBL) legislation and for members of the U.S. Congress to conduct an oversight hearing on the $30 billion dollars granted to the banking industry in the Small Business Jobs Act of 2010. The effort follows hearings on small business issues critical to credit unions and their 90 million members by the Senate Committee on Banking, Housing and Urban Affairs, and the Senate Committee on Small Business and Entrepreneurship, MCUA said. In letters sent to House Small Business Committee Chairman Sam Graves (Missouri- District 6) and Sens. Claire McCaskill (D-Mo.) and Roy Blunt (R-Mo.), MCUA President/CEO Mike Beall responds to issues raised during the recent hearings. Legislation to increase the limit to 27.5% from 12.25% of assets has been introduced in the Senate (S. 509) and House of Representatives (H.R. 1418) by Sen. Mark Udall (D-Colo.) and Rep. Ed Royce (R-Calif.), respectively. “The Missouri Credit Union Association strongly supports both bills,” Beall said. “Credit unions stand ready to do their part to facilitate economic recovery by deploying credit union resources to aid the small business community in a safe and sound manner.” In Missouri, 31 credit unions currently offer member business loans. Member business loans outstanding for all credit unions in Missouri total $224,343,238, with the average size of a member business loan standing at $163,685 as of March 2011 Four Missouri credit unions are near the MBL cap. This includes Mazuma CU, Kansas City, with $38,495,020 in member business loans. With a cap of $51,500,479, the credit union is in a position where it must turn down business loans due to the MBL limit. The other three credit unions near the MBL limit and facing this same challenge are Assemblies of God CU, Springfield, with $13 million in member business loans and a cap of $13.3 million; West Community CU, O’Fallon, with $11.5 million in member business loans and a cap of $15.4 million; and Alliance CU, Fenton, with $14.3 million in member business loans and a cap of $21.7 million. “This arbitrary limit has not only prevented much-needed capital from flowing to the entrepreneur community, but also acted as a disincentive to many credit unions in Missouri and across the country from offering this valuable option to their members,” Beall said. “The start-up investment of staff and financial resources in creating a viable member business lending program is considerable, a reality that would be remedied by the proposed legislation.” It is estimated that if the member business lending cap is lifted, 1,676 new jobs could be generated in Missouri and an additional $154,212,459 in business loans made to small business entrepreneurs in the first year. “This ‘zero-dollar stimulus’ envisioned by both the Royce and Udall bills, utilizing private sector funds, stands in direct contrast to the $30 billion dollars granted to the banking industry in the Small Business Jobs Act of 2010,” Beall said. “While these funds were ostensibly given to banks by taxpayers for small business job creation, little or no evidence exists that banks are actually using those monies in the manner intended by the statute.” MCUA is asking the House Small Business Committee to conduct an oversight hearing on whether or not the banking industry is appropriately using the $30 billion in federal funds provided last year for the purpose of stimulating small business lending. A March report by the Department of Treasury’s Inspector General concluded that “Although the small business lending plan is a vital part of an institution’s application for the program, neither the FBAs (federal banking agencies) nor Treasury intend to review the likelihood of participants meeting their small business lending goals.” In the letter to House Small Business Committee Chairman Graves, Beall writes: “…I would encourage you to call upon the credit union community to participate in such a hearing, not only to discuss credit union interest in assisting small business but also to provide suggestions on ways in which the banking industry might improve its performance.” Beall continued: “Banking industry opposition to small business access to credit union loans frequently cites the notion that ‘credit unions should not be permitted to encroach on our [the banking industry’s] market.’ I disagree strongly with that premise. The small business lending market does not belong to any one kind of financial institution; rather it belongs to the men and women who innovate, create and sacrifice to build a business. Credit unions have historically done much in this area, and I ask your help in empowering them to do even more.” The Credit Union National Association (CUNA) and credit unions are trying to get Congress to increase credit unions’ MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

Golden 1 donates sandbox

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SACRAMENTO, Calif. (6/27/11)--Employees of The Golden 1 CU, Sacramento, showed their caring spirit by making and donating a sandbox to St. John’s Shelter for Women and Children in Sacramento.
Click to view larger image Employees of The Golden 1 CU recently constructed and donated a sandbox to St. John’s Shelter for Women and Children in Sacramento. Here, Golden 1’s mascot Goldie plays with children at St. John’s Shelter.
Golden 1 employees were able to purchase materials to make the sandbox through funds raised from several nacho sales in the credit union’s cafeteria during lunch. “The employees here at Golden 1 never cease to amaze me with their generosity,” said Donna A. Bland, president/CEO. “This was a wonderful experience for us, plus it helped show residents at St. John’s that the community does care,” Bland added. St. John’s Shelter for Women and Children is the only shelter in the Sacramento area focused on providing support to homeless women with children--the most vulnerable members of the homeless population. Since 1985, more than 23,000 displaced women and children have been given a head start toward rebuilding their lives thanks to the efforts of St. John’s Shelter. Based in Sacramento, Calif., The Golden 1 CU is a $7.7 billion institution.

LSCU raises more than 1M for image campaign

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TALLAHASSEE, Fla. (6/27/11)--The League of Southeastern Credit Unions (LSCU) has raised more than $1.2 million for an image campaign--themed “Credit Unions: we’re giving banking a better name”--to be launched this fall in Alabama and Florida. Funding for the campaign was raised primarily through voluntary contributions by credit unions, according to the league, which represents more than 309 credit unions in Alabama and Florida. A TV ad, which will run in many of the two states’ 14 media markets, debuted at the LSCU Annual Convention and Exposition June 17. The campaign is targeting Generation X--consumers born between roughly 1965 and 1980--which research shows is the largest demographic in the southeast that does not belong to a credit union. The campaign will employ a combination of TV, radio, web, social media and public relations efforts, depending on the amount of money raised in each media market. Research found that 60% of consumers in the southeast don’t know what a credit union is or that they can join, according to the LSCU. The LSCU image campaign will seek to show consumers that credit unions save their members money and traditionally have lower rates and fees. “The response to the concept of a cooperative advertising campaign and the TV ad has been tremendous,” said LSCU President/CEO Patrick La Pine. “The strength of the credit union movement is through cooperation. This campaign shows that our member credit unions see the value in working together to raise awareness for all credit unions.” A website will illustrate the credit union difference by showing how much money potential members can save on a mortgage or auto loan. The website will include a credit union finder, with credit unions that contribute to the campaign will get top priority on the search engine. One section of the website will highlight the benefits of shared branching. The website will also feature a real-time social media feed. LEVERAGE, the LSCU Service Corporation, contributed the first $100,000 to the campaign. This money is being used to fund the creative development of the project. The shared branching networks in Alabama and Florida each contributed $25,000 to the campaign. Scout Branding of Birmingham, Ala., was selected to develop the creative direction of the campaign.

Scenes from the ACUC

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Click for slide show An enthusiastic group of credit union conference attendees gear up for a general session at America’s Credit Union Conference, which was presented by the Credit Union National Association this week in San Antonio. (CUNA photo)
SAN ANTONIO (6/24/11)--This year’s America’s Credit Union Conference & Expo in San Antonio may be over, but attendees have gathered a lot of take-aways to share with others at their credit unions about the big issues, big concerns and big opportunities they heard discussed while there. But sometimes it is the other, seemingly small things that make a conference memorable. It’s the energy of the people attending and delivering. It’s the new friends made, the old ones re-established, and new connections that attendees know they can call on as resources for whatever their credit union needs to know. It’s taking a tour of the most up-to-date products and services and newest gizmos. It’s the realization that you’ve exhausted the supply of business cards you brought along. It’s asking the burning question of the experts and getting an answer. This year, conference attendees smiled more, laughed a lot, and argued their points. They learned and they were entertained. Their enthusiasm shows in these photos (see slide show) and about a 1,000 more taken during the event. It’s the comraderie of people who enjoy what they do for a living--people helping people. If you missed it this year, next year’s America’s Credit Union Conference will be presented by the Credit Union National Association in San Diego in June 2012.

Vendor files patent infringement suit against CUs and banks

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WILMINGTON, Del. (6/24/11)--A worldwide technology vendor is suing 15 businesses and financial institutions, including three credit unions, in a civil action alleging patent infringement on the vendor’s card customization technology. Card customization allows credit unions and banks to personalize credit cards and debit cards with a user’s personal photo or a logo, such as that of a favorite sports team. Plaintiffs Serverside Group Limited and Serverside Graphics Inc. filed suit Wednesday in U.S. District Court for the District of Delaware (Wilmington), naming PSCU Financial Services, St. Petersburg, Fla.; The Members Group (TMG), Des Moines, Iowa: Credit Union 1, Anchorage, Alaska; Neighbors CU, St. Louis, and Anheuser-Bush Employees’ CU, St. Louis, among the defendants. Also named are: CPI Card Group-Minnesota Inc., CPI Card Group-Colorado Inc., HJA Payment Processing Solutions, T8 Webware, Dimpledough Inc., Design One Creative, United Solutions Co., American State Bank, Eastern Bank and Bank Iowa Corporation. The suit alleges two counts of patent infringement by the named entities and asks the court to permanently keep the defendants from continuing the alleged patent infringements. Specifically, the suit’s complaint claims that CPI Minnesota, CPI Colorado and TMG jointly launched a financial transaction card customization platform known as MyPhotoCard. CPI Minnesota, CPI Colorado and TMG market this platform to credit unions and other financial institutions, including TMG members, the complaint said. MyPhotoCard allows customers of financial institutions to personalize their credit card and debit cards, using images uploaded from personal computers or selected from pre-populated photo galleries. The complaint states: “ … CPI Minnesota has infringed and continues to infringe ... the patent, at least by making, using, selling, and/or offering to sell within the U.S. equipment for producing customized credit and debit cards in connection with the MyPhotoCard platform.” The U.S. Patent and Trademark Office did not grant the patent in question until April 26 of this year.

Dakota CUs report positive 1Q results Davis is new chair

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BISMARCK, N.D. (6/24/11)--Dakota credit unions reported strong financial results for the first quarter, with capital ratios in excess of 10% for North Dakota and 9% for South Dakota. In North Dakota, total assets grew by about $79 million or about 3.3% in the first quarter to $2.42 billion from $2.34 billion. For South Dakota, total assets grew by about $73 million or about 3.1% in the first quarter to $2.34 billion from $2.27 billion. Much of the asset growth can be attributed to continued strong deposit growth. Deposits increased by $78.7 million in North Dakota--about 3.7%--and now stand at roughly $2.1 billion. In South Dakota, deposits were up by around $71 million--about 3.3%--and also stand at 2.1 billion. Total loans were down in both states as consumers continue to pay down debt and increase savings, and membership growth remained essentially flat for North and South Dakota in the first quarter. Net income increased significantly in the first quarter for both states: to about $4.78 million from $2.43 million for North Dakota, and to just more than $2.88 million from $1.48 million for South Dakota. This puts North Dakota slightly ahead of 2010’s total annual earnings of about $16 million and puts South Dakota credit unions well ahead of 2010, when total earnings for the full year were just over $4 million. In other Dakota credit union news, Steve Davis was elected as board chair of the Credit Union Association of the Dakotas. Davis was elected to a two-year term by the nine-member board at the association’s annual meeting in Fargo, N.D., becoming just the second board chair since the two state financial trade associations merged four years ago. He succeeds founding chair Doug Thompson, who served in that role since June 2007. Davis is the chief operations officer at $265 million-asset Capital CU, Bismarck, N.D.

Schenk to IBankrateI CUs have best checking rates

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MADISON, Wis. (6/24/11)--Credit unions have the best interest rates for checking accounts when compared to banks and other financial institutions, a Credit Union National Association (CUNA) economist told Bankrate.com Thursday. “On average, there’s about a 15-basis-point advantage with credit unions,” Mike Schenk, CUNA vice president of economics and statistics, told Bankrate. He expects the advantage to increase when the economy improves. “Credit unions are not for profit. They’re owned by their member depositors, so any profits go back to those members,” he added. If an interest checking account earns more than the industry average, it typically has conditions attached, such as requirements for a minimum number of debit transactions each month or direct deposit, Schenk told Bankrate. Consumers should look at different institutions and review product offerings before becoming a member, Schenk advised. Potential account holders should be aware of annual percentage yield of the interest checking account and understand specific rules and restrictions--such as electronic statement requirements or transaction minimums, he added. “The best thing to do is shop around and make sure you’re comparing apples to apples with checking account features,” Schenk concluded. The article also mentioned US FCU, Burnsville, Minn., and First Community CU, St. Louis. To read the article, use the link.

U.S. CDCUs honor WOCCU head Pete Crear

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HOLLYWOOD (6/24/11)--Pete Crear, outgoing president/CEO for World Council of Credit Unions, received “Friend of the Federation” honors from the National Federation of Community Development Credit Unions. The award, presented at the federation’s recent annual conference in Hollywood, is part of a lengthy list of awards Crear has received from credit union and cooperative groups worldwide.
Click to view larger image Pete Crear, outgoing president/CEO of the World Council of Credit Unions, received “Friend of the Federation” honors at the National Federation of Community Development Credit Unions’ recent conference in Hollywood, Calif. (Photo provided by the World Council of Credit Unions)
“I am honored to be recognized by the federation,” Crear said. “The good work they’ve done on behalf of community development credit unions across the U.S. is similar to World Council's philosophy and something I greatly admire.” The award was presented following a presentation Crear gave at the event. “You brought honor to every role you have fulfilled in the credit union movement,” the plaque read. “Our thanks for your support and inspiration!” In 2008, Crear received the Foundation for Polish Credit Unions’ Feniks Prize, the Polish credit union system’s most prestigious award. In 2007, the Michigan Credit Union League presented Crear with its Distinguished Service Award and inducted him into the Michigan Credit Union League Hall of Fame. In 2006, he received the Esther Peterson Consumer Service Award from the Consumer Federation of America. Crear also has received the inaugural African-American Credit Union Lifetime Achievement Award and was further honored by having the award named after him and a college scholarship established in his name. Crear’s contributions to the credit union movement have merited his induction into the CUES Hall of Fame, the Cooperative Development Foundation Hall of Fame and earned him the National Credit Union Foundation’s Herb Wegner Lifetime Achievement Award, the U.S. credit union movement’s highest honor. Credit union delegates worldwide will further honor Crear at the 2011 World Credit Union Conference, his last official public appearance as WOCCU president/CEO. For more information about the event, use the link.

N.Y. legislature passes CU bill providing subpoena guidelines

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ALBANY, N.Y. (6/24/11)--At the end the New York State 2011 Legislative Session, the state Assembly joined their Senate counterparts when they unanimously passed a bill Wednesday that will establish stricter guidelines for creditors serving information subpoenas to credit unions. The bill, sponsored by State Rep. Joseph Lentol (D-Metropolitan) and State Sen. Stephen Saland (R-Catskill/Hudson), now moves to Gov. Andrew Cuomo’s desk, who the Credit Union Association of New York believes will sign the legislation into law. When signed, the bill (S.4530/A.6875) would require creditors to keep records of their good-faith basis determinations for sending information subpoenas to credit unions. It would also authorize the imposition of civil penalties against creditors that do not keep such records and allow credit unions to sue creditors that send out 50 or more information subpoenas in a month without appropriate record keeping. “This is an important step in the efforts of credit unions to curb the onslaught of subpoenas sent to credit unions daily in search of debtors who don’t even qualify for credit union membership,” said Michael Lanotte, association senior vice president/general counsel and lobbyist for this legislation. “It has been the association’s top legislative priority this year.” In spite of changes in 2006 that required creditors to certify reasonable belief that the credit union has records or maintains the debtors account(s), piles of information subpoenas kept coming--some credit unions receiving hundreds of requests daily. This caused them to unnecessarily redirect staff and resources to respond to these subpoenas, impacting service to their members. In the end, it was found that the individual named in the vast majority of the subpoenas was not, is not and could not be a credit union member. “We want to thank the legislative sponsors of this bill for their support. Their leadership, together with support from their colleagues on both sides of the aisle, was vital to the bill’s passage before this legislative session closed,” said William J, Mellin, president/CEO of the association.

CUs team up to support Cell Phones for Soldiers

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LIVONIA, Mich.--More than 270 credit unions nationwide, General Motors Co. and CU Solution Group’s Invest in America are supporting the 150,000 U.S. troops stationed overseas by collecting and selling used cell phones to raise money for calling cards. Credit union members can support the collection drive by donating their phones at more than 700 participating credit union branches. In 2004, 13-year-old Robbie and 15-year-old Brittany Bergquist of Norwell, Mass., founded Cell Phones for Soldiers with $21 of their own money. Since then, the nonprofit has raised millions of dollars in donations and distributed millions of prepaid calling cards to soldiers serving overseas. Cell Phone for Soldiers hopes to collect more than one million cell phones this year and to raise more than $10 million in the next five years to fund new programs, such as providing video phones and prepaid service to allow troops abroad to see their families on a regular basis. The donated phones are sent to ReCellular, which pays Cell Phones for Soldiers for each phone--the money is used to purchase prepaid calling cards which are sent to troops. About half the phones ReCellular processes are reconditioned and resold to wholesale companies in over 40 countries worldwide. Phones and components that cannot be refurbished are dismantled and recycled to reclaim materials. CU Solutions Group, a marketing, technology and human resources company based in Livonia, Michigan, holds contracts with U.S.-based companies for exclusive credit union member discounts through the “Invest in America” program.

Poll Only 15 of H.S. students aware of CU difference

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WASHINGTON, D.C. (6/24/11)--A new national opinion poll of nearly 900 high school students shows that only 15% of students are aware that credit unions are different than banks with respect to their not-for-profit status. Philip Heckman, director of youth programs at the Credit Union National Association’s (CUNA) Center for Personal Finance, said this failure to connect with America’s youth has a cost. “Any credit union that isn’t using its full-family membership policy to form a lifelong bond with children is setting itself up for the much more expensive challenge of trying to overcome their ignorance and cynicism later to win their business as adults,” Heckman said. CUNA has established a consumer-friendly website, aSmarterchoice.org, intended to help consumers--both young and old--better understand the benefits of credit union membership, and how to sign up to be a member. “We honestly believe that to know credit unions--and their better rates--is to love them, and we are helping to forge a credit union relationship for more consumers,” said Pat Keefe, CUNA vice president of communications and media outreach. More than two years after the country suffered the massive financial crisis of 2008 and 2009, the majority of poll respondents harbor a significant amount of distrust toward credit unions, banks, credit card companies, businesses and investment institutions. This sense of distrust is compounded by a lack of understanding about the basic services and products of financial institutions, said Dr. Michael Staten, director of the University of Arizona’s Take Charge America Institute for Consumer Financial Education and Research, which commissioned The Financial Literacy Group consulting firm to conduct the survey earlier this year. “This poll is extremely revealing,” Staten said. “In addition to students’ lack of knowledge about the building blocks of personal finance, which we have seen for years in these types of surveys, it shows the next generation of American consumers now also actively distrusts many of the pillars of the financial services industry. Despite their strong suspicion of financial institutions, survey respondents believe that financial education is important and financial success can be achieved with the right decisions, Staten said. “This is a hopeful sign and it tells us that more financial education is needed,” he added. “It may not yet be too late to defuse this sense of cynicism about all things financial, and to prepare these young consumers for the financial choices they will face in adulthood.” Some of the poll’s findings include:
* The majority of students responding to the survey (60%) believe that credit card companies often entice people into taking on more debt that they can handle. * More than 70% of students believe that businesses often try to “trick young people” into spending more than they should. * Only 25% of students disagreed with the following statement: “The stock market is rigged mostly to benefit greedy Wall Street bankers.” * Only 15% of students are aware that credit unions are different than banks with respect to their not-for-profit status. * Fewer than one in fivestudents who responded to the survey (17%) disagreed with the statement that “Banks are mostly interested in getting my money through hidden fees.”
The poll was offered to students at 18 high schools in 11 states nationwide, and 878 students completed the survey in January and February. Respondents from all levels of high school were represented. “While some organizations are making strong efforts in the field of financial education, overall not enough is being done to educate America’s youth about money, at school or at home,” said Dan Iannicola Jr., former deputy assistant secretary for financial education at the U.S. Treasury Department and CEO of The Financial Literacy Group consulting firm. “But as these results show, just because we aren’t teaching about money, doesn’t mean kids aren’t learning about it. This survey asks the question, just what are they learning?” Iannicola said the level of distrust is about more than bad public relations for the financial services industry. “Adolescents with this level of distrust of financial institutions become adults who don’t open bank accounts, invest for retirement, insure against risks or finance important purchases like college educations or homes,” he said. “This type of financial disengagement could push a generation of consumers away from mainstream institutions and toward risky alternative service providers or toward simple inactivity, which has its own perils.”

CUs hit hard by scammers

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MADISON, Wis. (6/24/11)--Credit unions have been hit by a variety of different scams, fraud attempts and security breaches, as reflected by this collection of reports from media outlets nationwide. Among incidents reported by credit unions:
* Associated CU, with $1.2 billion assets, Norcross, Ga., said identity thieves have used duplicated ATM cards at teller machines and retailers in several states (WSBTV.com June 17). The credit union has limited ATM transactions to two per day, with a daily maximum of $400. Out-of-town transactions are under close watch. About 100 members have been defrauded. * Bragg Mutual FCU, with $47 million assets, Fayetteville, S.C., said its members have been targeted by scammers who sent out text messages purporting to be from the credit union. The text messages seek account numbers, passwords and other personal data, according Chief Financial Officer Robin Holtz (Fayetteville Observer June 16). The messages claim that members’ debit cards have been deactivated and ask victims to call a phone number. Those who call the number are prompted to leave a voice message with their account information. * Northumberland County Schools FCU, with $16 million in assets, Milton, Pa., reported that several members have received automated calls to their cell phones advising that “their credit union debit card will be blocked for security reasons (Pennsylvania Credit Union Association Life is a Highway June 17). To prevent their cards from being blocked, members are requested to enter their personal identification numbers. If the call is not answered a message indicates the card will be blocked. Northumberland County Schools FCU has posted an alert on its website. * Vystar CU, with $4.2 billion in assets, Jacksonville, Fla., said its members have received a recorded message requesting bank information, including account numbers in an apparent phishing scheme First Coast News June 16). On June 15, Vystar’s call center received 25 calls related to the phishing scam. Other credit unions in the area have received similar messages, according to Richard Alfirevic, Vystar chief operations officer. * Akron Police CU, with $10 million in assets, Akron, Ohio, last month issued new MasterCard debit cards after several accounts were compromised (Akron Beacon Journal June 17). Thieves apparently used computer software to create random account numbers. * Oregon Community CU, with $974 million in assets, Eugene, Ore., extended hours at five branches through the weekend to help members whose debit cards were suddenly canceled because of fraudulent activity believed to be related to a security breach at Michaels craft stores (The Register-Guard June 20). The credit union said it is mailing new cards to all affected customers. The credit union also advised its members on Sunday to beware of a phishing scam in which people are being contacted through e-mail, text messages or phone calls by people fraudulently claiming to represent Summit Bank. * Fall River Municipal CU, with $231 million in assets, Fall River, Mass., discovered a camera attached to an ATM presumably used to record members entering personal identification numbers on the machine’s keypad, according to police, (Herald News June 18). Police officers also discovered a card reader placed over the ATM’s original card reader in an attempt to obtain debit card numbers. The security breach may have affected “less than a couple dozen” ATM users, according Fall River Municipal President/CEO Matthew Schondek. All credit union members were notified of the discovery.

Find the bright spots to tweak changes

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SAN ANTONIO (6/23/11)--Change is hard, largely due to a fundamental split in the brain between the rational/conscious/deliberate side of the brain that plans the change, and the emotional/unconscious/automatic side that acts on impulse, often thwarting change. When these two sides fight, it’s not a fair fight.
Click to view larger image Dan Heath, author of Switch: How to Change Things When Change is Hard, closed the America’s Credit Union Conference & Expo in San Antonio Wednesday by outlining a three-part framework for change that involves direction, motivation and removing obstacles to change. Heath is a member of Amplify FCU, Austin, Texas, and State Employees’ CU in Raleigh, N.C. (CUNA photo)
So says Dan Heath, author of Switch: How to Change Things When Change is Hard and keynoter at the closing general session Wednesday at the America’s Credit Union Conference & Expo in San Antonio. Heath told those gathered he is “a loyal credit union member” at Amplify FCU, Austin, Texas, and State Employees’ CU in Raleigh, N.C. He was a speaker at the ACUC’s predecessor conference in 2008. Heath likened the dichotomy to a rider on an elephant. The rider, epitomizing the rational side, thinks he’s in charge of the elephant or the emotional side, but it’s absurd to think a rider could rein in a five-ton beast, Heath said. The elephant is also the source of passion and curiosity, which fuels action. Heath outlined a three step framework for change:
* Direct the rider by asking the right question. Companies often focus on what is not working. Instead, they should ask what works well and how to clone it. “Find the bright spots,” he urged. “We’re expert problem solvers because it comes naturally. But apply the analysis to what is working.” At credit unions, bright spots can focus on an employee with the best sales record. For membership, how did the credit union attract its best member? “Even if things aren’t going well, there’s some bright spot. Your role is to obsess about success.” * Motivate the elephant. Change can spook the elephant, especially if the change is big and daunting. Heath advises shrinking the change into pieces to move the elephant. If one has difficulty giving employees feedback, use “one-minute praisings”--catch the employee doing something well. The word “sales” spooks a lot of employees, while members are spooked by the idea of switching checking account.
If you can’t shrink the change, try fueling the motivation. Logic and information are rarely enough to spark change, Heath said. “We tend to shove information at people.” An example is a credit card disclosure form. Even though consumers fought for clear disclosures of fees, the typical disclosure form is daunting. When compared with banks, credit unions offer better savings and loan rates, are universally acknowledged for providing better service, and have lower fees while banks have blown the economy, Heath said. “Still banks have 15 times the assets and a higher growth rate. This is bizarre outcome.” He noted credit unions are masters at talking with the rider and providing information, but they need emotion to motivate. Emotion is tied to identity. Credit unions need to focus on these angles: “I’m a credit union kind of person, not a bank person. The credit union looks out for my best interests. The credit union takes an interest in its community. “If we showed people, we’d rally a herd of elephants,” Heath said.
* Shape the path they are to follow. Credit unions can “tweak the environment” to pave the way to make progress. People take the path of least resistance, so make it easy to follow the path. An example: the one-click order button on the Amazon website.
If you want change, failure is part of the deal. Change requires persistence to try and try again. “To accomplish anything great in life or work requires a struggle,” Heath concluded.

Gen Y and the future of CUs

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SAN ANTONIO (6/23/11)--Young credit union professionals educated a mostly over-40 crowd about nurturing young talent in their credit unions, dispelling a few myths about Generation Y workers during a Discovery breakout session Tuesday afternoon at America’s Credit Union Conference & Expo in San Antonio.
Click to view larger image Gen Yers trust credit unions less than banks, even after negative banking headlines stemming from the economy, said the Filene Research Institute at a panel comprising young credit union professionals discussing how to attract and work with young adults. The Tuesday Discovery breakout session met at America’s Credit Union Conference in San Antonio. From left are Matt Vance, marketing and communications manager, Industrial CU of Whatcom County, Bellingham, Wash.; Ronaldo Hardy, branch manager, La Capitol FCU, Baton Rouge, La.; Amy Stanton, vice president marketing, Connex CU, New Haven, Conn.; Jen Shefner, assistant vice president eCommerce, Columbia CU, Vancouver, Wash.; and Brent Dixon, young adult adviser, Filene Research Institute. (CUNA photo)
“We need to rethink our perspective about trust and loyalty” especially with the younger market, said Brent Dixon, young adult adviser at Filene Research Institute and moderator of the panel. Filene and McKenzie research indicates those in the 18 to 34 age group trust credit unions less than banks, while older consumers place more trust in the credit union. “And that’s after the economic crisis brought by banks,” he said. The lost trust in banks “should be an opportunity for credit unions, but our market-share is level or even drifting downward,” Dixon said. “Capital One just bought ING direct, and that should terrify you.” He also noted a disconnect between perception and action. Consumers may believe that “credit unions are great for others, but I need more sophisticated products and services.” Credit unions can help their Gen Y employees by creating an environment of self-management, said Jen Shefner, assistant vice president of eCommerce at Columbia CU, Vancouver, Wash. Gen Y employees “want feedback but not micromanagement, they want context and rapid learning, a job that’s meaningful, with complexity to stretch and grow into their best selves.” Sixty-nine percent of Gen Y professionals think support from managers is needed to innovate at work. Find ways to say yes,” Shefner said. Columbia CU allows each staffer one hour per week for a self-managed project. As a result, it has added four new forms on its website for members’ requests, and that provides a knowledge base for the departments. Awards to other departments have proved popular. Credit unions should also share the big picture with staff. Young adults need a sense of purpose and “purpose is built into the thread of credit unions.” There’s an “underlying fear that credit union passion is retiring with the Baby Boomers,” Amy Stanton, vice president marketing at Connex CU, New Haven, Conn., said. However younger professionals want their organizations to be socially responsible. “About 50% of 18- to 34-year-olds would take a pay cut to work for a socially responsible organization, and 89% would switch companies because of it. Credit unions are more socially responsible than others.” “There are a lot of ways younger professionals can get involved in the industry through supplemental activities,” Stanton said. Examples include Filene’s “30 Under 30” group, advisory board panels at credit unions, blogging, music and more. A real opportunity to get involved in the movement at a deeper level, said Dixon, is on political issues such as interchange Gen Yers can be passionate about the industry and about politics, but there is a knowledge barrier, Shefner said. “Share information with your staff.” Ronaldo Hardy branch manager, La Capitol FCU, Baton Rouge, La., discussed research on these myths about Gen Yers: They are disloyal, can’t make a real commitment, won’t do grunt work, have short attention spans, and they want their job to be fun. Research, however, indicates Gen Y employees look for other things. Listed as most important were:
* Mentorship/acceptance/recognition from supervisors , 27%; * Growth and opportunity to advance, 41%; * A culture or value system of the company, 39%; * Opportunity to contribute , work in innovation, 33%; and * Compensation, 18%.
He also noted why Gen Y employees would leave a job:
* Lack of respect, communication from management, 47%; * Lack of advancement, 37%; * Resistance to change, 18%; and * Better job offer, 14%.
“Gen Yers want acceptance, mentorship, management, and to be treated fairly. Didn’t you want the same thing at that age?” Hardy asked. Credit unions should enable younger staff to tap into older employees’ knowledge through mentoring, said Matt Vance, marketing and communications manager, Industrial CU of Whatcom County, Bellingham, Wash. Beginning Jan. 1, 2011, more than 10,000 Baby Boomers will reach 65 every day for the next 19 years. “That scares me,” said Vance. “That’s a tremendous amount of knowledge to lose. We can tap into it through mentoring. Mentoring is a brain to pick, an ear to listen, and a push in the right direction,” he said. Vance cited a study that indicates mentored employees are more committed to their job and have higher job satisfaction than unmentored employees. They want guidance, advice, support and honest feedback, he added. Credit Union Association of New York partnered with the Crash Network in a six-month mentoring program with nine mentoring relationship in New York and California. Long-distance mentorship can be conducted across regions with technology such as telephones, Skype and e-mail. The Crash Network is looking for mentors. Mentoring can be as “easy as handing out a business card,” Vance said. The conference, presented by the Credit Union National Association, ended Wednesday.

Magazine IForbesI blog in favor of increased CU MBL

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MADISON, Wis. (6/23/11)--Credit unions’ member business lending (MBL) should be raised according to a Sunday article in Entrepreneur magazine and a Saturday Forbes blog posting. There are “hopeful signals from the world of commercial lending,” including credit unions, which should help small businesses seeking loans, Entrepreneur said. “ … Credit unions are saddled with a 12.25% asset cap, which has been in place since 1998. The cap means that they can’t extend more than 12.25% of their total assets in business loans,” said the Entrepreneur article. “According to the Credit Union National Association (CUNA) in Washington, D.C., 360 credit unions are at or quickly approaching the cap, accounting for about 60% of credit union business lending.” The article also solicited the perspective of Mike Schenk, senior economist for the Credit Union National Association. Largely because of the cap, commercial lending at credit unions has slowed. However, many credit unions have yet to reach their caps, and they often offer advantages for small businesses, including lower interest rates and easier qualifying terms, Schenk said. “Because credit unions are member-owned financial cooperatives, we don’t have to make a lot of money,” Schenk told Entrepreneur. “You’ll often find interest rates and fees lower than at commercial banks, and because small-business borrowers are members, the credit union leadership is often more likely to have more flexibility in lending to them.” “Why won’t the government allow credit unions to lend more money to small businesses?” Forbes asks in a blog posting about helping small businesses without incurring any additional expense to taxpayers. “Credit unions and their regulatory bodies are clearly equally as capable as the banking industry to disperse funds to commercial enterprises,” Forbes said. “The argument that credit unions have an unfair advantage to banks because of their preferred tax position and therefore should not be allowed to make more commercial loans is not helping the U.S. economy and its taxpayers. This topic of credit union taxation is a separate argument in itself.” To read the article and blog posting, use the links. The Credit Union National Association (CUNA) and credit unions are trying to get Congress to increase credit unions’ MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

Business services offer CUs growth risks

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SAN ANTONIO (6/23/11)--Credit unions looking to expand membership by adding business accounts and related services, including online banking and depository (checking account) services, need to perform proper due diligence and be wary of potential losses that may be uninsurable, a CUNA Mutual Group risk manager told an America’s Credit Union Conference Discovery breakout session audience Tuesday.
Click to view larger image Ken Otsuka, senior consultant, Credit Union Protection Risk Management, CUNA Mutual Group, talks about the benefits and risk involved in credit unions adding business services at an America’s Credit Union Conference Discovery breakout session on Tuesday. (Photo provided by CUNA Mutual Group)
Many credit unions are finding that merely offering business loans is not enough to attract new business members who want more than a source of financing, said Ken Otsuka, senior consultant, Credit Union Protection Risk Management. “Credit unions are introducing additional services to enhance their service portfolio and be a one-stop source for a business’ needs, but failure to adopt sound banking practices and important loss controls exposes credit unions to significant losses,” Otsuka said. Business checking accounts and online banking services pose unique risks. Before opening a new business checking account, credit unions should first perform a risk assessment for two key reasons. “First, you must verify the existence of the business entity to comply with Customer Identification Program rules. Secondly, a risk assessment should be performed to determine the financial condition of the entity to qualify the business for various services,” Otsuka said. Some of the largest check-related losses have involved unauthorized accounts opened at credit unions by dishonest employees of businesses to aid in their embezzlement schemes against those businesses. The severity of losses could be significant due to the volume and dollar amount of check transactions. “The embezzlements can take place over several years before they are discovered, and these losses may not be insurable,” he added. Otsuka went on to address the alarming escalation of online banking fraud in the financial services industry. The root of the problem has been Trojan keyloggers, primarily the Zeus Trojan, which monitors and captures keystrokes, logs them to a file and sends them to cyber thieves. The Trojan resides on users’ computers without their knowledge and is primarily used to capture online banking login credentials. Trojans such as Zeus are spread through phishing e-mails, generally targeting key employees of an organization. Users of popular social networking websites, such as Facebook, have also been targeted. Thousands of computers infected with customizable Trojans like Zeus form a botnet allowing cyber thieves to control the infected machines through command and control centers. Attacks can infiltrate computers at credit unions and those of business members they serve. Zeus is also used in man-in-browser (MITB) attacks, whereby the victim’s browser is infected with the Trojan, which sits patiently for the user to access online banking websites, Otsuka added. “When the user visits a targeted online banking website, Zeus silently springs to life. After the user is successfully authenticated--even with two-factor authentication such as a one-time-password generated by a token--Zeus ‘piggybacks’ on the user’s session. It intercepts and modifies details of a transaction entered by the user and initiates new transactions without the user’s knowledge,” Otsuka said. To better protect themselves and member accounts, Otsuka urged credit unions to implement the following:
* Stronger two-factor authentication method, rather than the common method of computer recognition (using cookies) combined with challenge questions; * Out-of-band authentication (e.g., by telephone) to authenticate members through a separate communication channel; * Fraud detection tools to monitor user access behavior and individual transactions; and * Out-of-band transaction verification for large dollar transfers.
Otsuka recommended attendees visit CUNA Mutual’s Protection Resource Center on the company’s website to access white papers in the site’s loss prevention library that can help credit unions identify risks associated with offering various services to business members along with important loss controls.

June 30 deadline for NCUF grants

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MADISON, Wis. (6/23/11)--Credit union organizations have until June 30 to apply for new Financial Education Grants from the National Credit Union Foundation (NCUF). NCUF’s annual grant program was formerly known as “innovation grants,” but has been updated this year to realign with the foundation’s new focus on financial education. Whether it’s to sponsor a financial reality fair for high school students or a financial counseling program, Lois Kitsch, national program director at NCUF, encourage credit union organizations to apply. “We are looking to fund innovative programs that improve the financial capability of all Americans,” Kitsch said. The goals of NCUF’s Financial Education Grants are aligned with REAL Solutions, NCUF’s signature program. REAL Solutions provides financial education and literacy programs that are designed to increase family financial capability through access to information, training opportunities and wealth coaching. Research has shown that the low-wealth market--one of REAL Solutions’ primary targets--includes not only lower-income consumers, but also consumers with moderate and middle incomes who have been unable to build significant savings or assets. REAL Solutions aims to help these consumers become credit union members, grow savings, and accumulate assets that will generate wealth for their families. Ongoing NCUF grant commitments support credit union participation in national financial education programs, including the Biz Kid$ television program and the National Endowment for Financial Education (NEFE). New financial education grants can assist credit union organizations participating in these programs, or other initiatives consistent with the financial education components of REAL Solutions:
* Providing financial counseling; * Building employee and member financial capacity through savings challenges and other wealth coaching programs; and * Presenting experiential learning programs such as reality fairs and poverty simulations, after-school financial education programs, product awareness, and staff training.
Eligible applicants for the grant program include credit unions, credit union service organizations, state credit union associations, state credit union foundations, and any other organizations owned or controlled by credit unions.

East Allen FCU closes branch cites reg burden

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NEW HAVEN, Ind. (6/23/11)--Karen Bishop always took pride in fact that $13 million-asset East Allen FCU operated two branches, despite its small size and operating budget relative to so many big financial institutions. “Not many credit unions could say they operate two full branches on our budget,” Bishop, CEO of East Allen FCU, told News Now Wednesday. This week, East Allen FCU closed one of its two branches (The Journal Gazette June 21). Bishop said the cost of mounting regulations combined with down economy since the financial crisis were the primary reasons. Bishop said though regulations such as the CARD Act and the Dodd-Frank Act weren’t designed to make life harder for community financial institutions, that’s exactly what they’ve done. “I don’t think lawmakers really understood the effect the new laws would have,” Bishop said. The U.S. Senate vote earlier this month against imposing a delay on the interchange fee cap rule ordered by last year's Dodd-Frank Wall Street Reform Act was the latest blow, Bishop said “That is going to be huge cost to our credit union,” Bishop explained. “We are currently on one network for debit cards. Not only are we concerned with with losing interchange income, but we will also have to join a second network. That’s a huge increase to our operating costs.” East Allen also contributed $184,000 to the corporate credit union bailout in 2009 and 2010, Bishop said. The regulations, the corporate situation, and a prolonged low-interest rate environment have combined to create what Bishop calls “a perfect storm” that her lean operating budget can no longer absorb. “It’s time to make hard decisions,” Bishop said.

Guatemala CUs explore international banking

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ONTARIO, Calif. (6/22/11)--Representatives from the Federación Nacional de Cooperativas de Ahorro y Crédito (FENACOAC), Guatemala’s national credit union federation and a World Council of Credit Unions (WOCCU) member, would like to introduce international shared branching through its member credit unions to better serve the country’s more than one million members.
Click to view larger image Financial Service Centers Cooperative’s (FSCC) Nathan Rogers instructs a Guatemalan delegation about international shared branching capabilities at FSCC’s Ontario, Calif., headquarters. (Photo provided by World Council of Credit Unions)
Financial Service Centers Cooperative (FSCC), a California-based credit union electronic services provider and WOCCU associate member, is working in cooperation with WOCCU’s International Partnerships Program to make the goal a reality. A combined delegation from Guatemala’s credit union system joined FSCC and WOCCU staff in a visit last week to Puerto Rico, where FSCC has been providing credit union shared branching services since 2008, to examine the application and implementation of shared branching among the island’s credit unions. The delegation then traveled to California, where it met with officials both from FSCC and the California & Nevada Credit Union Leagues, which first partnered with FENACOAC through WOCCU's International Partnerships Program in 2009, to discuss in greater depth how shared branching could be implemented in Guatemala. “It’s the cooperation and collaboration that we bring as trade associations and CUSOs to help credit unions better serve their members no matter where they are located,” said Bonnie Kraemer, FSCC executive vice president and chief operating officer. “We feel technology is one of the best ways to get more consumers to look closely at the services credit unions can provide and help the movement grow.” Shared branching has served the Puerto Rican diaspora well, officials said, especially in connecting those living in New York and Florida with credit unions on the island. The delegation visited two credit unions in Puerto Rico--Jesús Obrero in Guaynabo and Bonicoop in Aibonito-- where they reviewed FSCC’s shared branching technology and measured its use and acceptance among Hispanic members. Puerto Rican credit union officials described the challenges they faced during implementation and the success they have enjoyed since they began offering the service. Delegates were also able to witness live shared branching transactions and closely examine the system and its operations. The Guatemalan delegation included Vinicio Garcia, CEO of Guadalupana credit union; FENACOAC Chair Felipe Godoy, CEO of UPA credit union; and FENACOAC staffers Deeynar León, director of research, development and technology; and Magda Escalante de Barrios, treasury and comptroller coordinator. The trip to Puerto Rico also included Nathan Rogers, FSCC vice president of marketing, and WOCCU staffers Victor Miguel Corro, senior manager of partnerships and training, and Joshua Fetting, partnerships officer. The group’s meetings in California stressed the roles that the leagues and FSCC play in strengthening the credit union movement and facilitating technology solutions. Guatemalan delegates examined shared branching applications in depth, measuring their potential impact on improving credit union efficiency and service in Guatemala. "Bringing new markets to the global credit union movement is a key aspect to the project we’re pursuing here,” said FSCC's Rogers. “I am confident that we’re not going to run into any technological hurdles that we can’t overcome.” One aspect that bears further discussion is addressing regulatory criteria about moving funds from the U.S. to Guatemala. New requirements under U.S. Regulation E, which governs electronic funds transfer systems, will affect the nature of disclosure and other aspects of transparency that participants in any shared branching system will have to face, including both sending and receiving institutions. But the capabilities such a system would bring to Guatemalans living in the U.S.and seeking a low-cost alternative to current remittance capabilities between credit unions in the two countries make all efforts worthwhile, delegates said. “We see the link that shared branching provides as another opportunity to grow and improve products and services,” said FENACOAC’s Corday. “We envision credit unions that go beyond traditional business lines, making this initiative an anchor for growth and modernization. We will be relentless in our work toward connecting our national shared branching system to that of the U.S.”

Do what you can with what you have

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SAN ANTONIO (6/23/11)--A road well-taken has brought lessons about
Click to view larger image Eric Saperston told America’s Credit Union Conference & Expo attendees Tuesday afternoon of his inspiring journey around America interviewing and filming the famous and not so famous “who get up in the morning excited and go to bed at night fulfilled.” He described his search for meaning as “following your bliss with invisible hands kicking in to maneuver and guiding you.” He told of lessons learned and showed a short film based on his journey. (CUNA photo)
the meaning of life from more than 200 of the famous and not so famous for Eric Saperston, who recalled his year-long journey around the U.S. for the attendees of America’s Credit Union Conference Tuesday in San Antonio. After graduation from college, he decided to take a year off, follow the Grateful Dead and spend the ski season in Aspen. But a mentor changed that with one question; “What else can you do on the trip to provide meaning or value? “That question asked set me on a trajectory that changed my life,” he told the conference. Saperston had noticed that there is a breakdown between the young people and their elders. He decided to find people “who get up in the morning excited, and who go to bed at night fulfilled.” He would call up people in power and invite them to coffee and learn from them. He set out with a couple of friends to record the adventure in a 1971 Volkswagen camper with little money. He sold “sexy kind grilled cheese sandwiches made with love” in roadside parks to fund the trip, and his conversations with people often sparked them to give more to help his project along. Some bought a $1 sandwich for double that, some paid $5 and even $50. “People are afraid to speak their possibility out loud to others for fear of judgment, being ostracized,” afraid they will appear foolish, he said. Part of it is “following your bliss, with invisible hands kicking in, guiding you and maneuvering you.” This happened again and again as the people he interviewed and videotaped opened up. From the moment actor Peter Fonda told him to travel while he’s young, to Hispanic advertising executive Lionel Sosa buying a “boom pole” to hold a microphone during filming after Saperston and his friends showed up to videotape the interview with a microphone duct-taped to a light bulb changer. From the MTV cinematographer who gave a crash course from 1 a.m. to 4 a.m in how to film with videotape, to Disney jumping on board to produce a feature film based on the trip that ended up at the Sundance Film Festival , to 12-time Olympic medal winner Carl Lewis telling “how it is to be me.” Among the people he interviewed: Bill Sessions, Gov. Ann Richards, actor Henry Winkler, and comedian Billy Crystal. “The world does everything it can to dilute our unique qualities.” Saperston said. “Be yourself, because every one else is taken. Live with no regrets. Get up in the morning excited and go to bed at night fulfilled.” His next adventure? A study of wonder and awe.

CUNA Mutual provides lending reg update at ACUC

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SAN ANTONIO (6/23/11)--During a Discovery breakout session Tuesday at the Credit Union National Association’s America’s Credit Union Conference, CUNA Mutual Group’s Bill Klewin helped credit union leaders prepare for the next wave of lending regulations.
Click to view larger image CUNA Mutual’s Bill Klewin helped credit union leaders prepare for the next wave of lending regulations during a Discovery breakout session Tuesday at the Credit Union National Association’s America’s Credit Union Conference (Photo provided by CUNA Mutual Group)
“Regulatory compliance is a major issue for credit unions to manage, especially when the rules keep changing,” said Klewin, CUNA Mutual director of regulatory compliance. “Because the rules are complex and lengthy, credit unions must plan effectively for the risks.” Klewin reminded the audience of “the deluge of laws” with which financial institutions have been faced in the last few years, including:
* SAFE Act of 2008; * Credit CARD Act of 2009; * Mortgage Disclosure Improvement Act; * Dodd-Frank Wall Street Reform and Consumer Protection Act; * Unfair and Deceptive Acts and Practice Rules; * Real Estate Settlement Procedures Act; * Department of Defense Rules; * Servicemembers’ Civil Relief Act; and * Private student loans;
In addition to new laws, credit unions are subject to regulations related to truth-in-lending (Regulation Z), consumer leasing (Regulation M), equal credit opportunity (Regulation B) and the Fair Credit Reporting Act. “Reg Z was once a relatively stable regulation,” said Klewin. “Not anymore. It’s become a catch-all for anything remotely related to lending, making compliance a challenge for every lender.” Klewin took the audience through the many changes and additions to Reg Z that directly affect lending regulations, reminding them that putting their heads in the sand is not a good strategy. “The complexity and depth of the compliance changes will tax your staff and will be expensive, so the news isn’t good,” he said. “You really need to plan long-term to deal with all the changes and uncertainty. But because compliance is a priority, you must understand the risks.”

CUNA Mutual Group researcher Embrace technology increase loans

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SAN ANTONIO (6/23/11)--Credit unions looking to increase member loans should invest in their technology infrastructure to meet the needs of current and future members, a CUNA Mutual Group researcher told an America’s Credit Union Conference Discovery breakout session audience Wednesday in San Antonio.
Click to view larger image During a Credit Union National Association America’s Credit Union Conference Discovery breakout session Wednesday, David Polet, Voice of Customer research manager at CUNA Mutual, said to grow member loans credit unions should invest in their technology infrastructure. (Photo provided by CUNA Mutual)
“How do you get new members in the door? By investing in technology, not loan officers and new lending processes,” said David Polet, Voice of Customer research manager. Credit unions will grow loans by focusing on how consumers shop, Polet added. With today’s technology, consumers no longer have to rely on the credit union for information. “Members have the ability to compare rates and quotes for loans at the tip of their fingers,” he said. Credit unions need to adapt to the changing shopping landscape to grow loans, Polet said. Fifteen years ago, the loan officer controlled the lending process because the consumer didn’t have access to as much information. That’s not the case today. “Generation Y consumes and makes decisions completely differently than their parents,” Polet said, urging credit unions to embrace technology to meet Generation Y’s needs and to attract new members for loans. “Baby boomers are retiring; their lending lives are coming to an end,” Polet said. “That’s not the case for Generation Y, whose lending lives are just beginning to grow.” Credit unions must focus on meeting the expectations of Generation Y, especially since there are 84 million Generation Y consumers compared to 80 million baby boomers, according to 2010 U.S. Census Bureau findings. Polet explained how banks have more technology that is in tune with what Generation Y consumers expect. “Picture check deposits, text banking and mobile banking are all being embraced by banks,” said Polet, highlighting the need for credit unions to do the same. In fact, many analysts are predicting mobile banking will overtake online banking in just a few years, he added. “You must know your members and potential members to effectively use new technology,” Polet said. Mobile financial service capabilities were more influential in a consumer’s decision to select a financial institution than availability of online banking, access to ATMs, or nearby branches, according to a December 2009 Mercatus mobile banking study. The study also indicated that by 2014, more consumers will access their accounts through mobile devices than through the Internet. “Mobile banking is clearly taking over the online channel. Keep in mind, in order to grow member loans you must grow your membership, which means your technology must benefit future members,” said Polet, stressing the need for credit unions to embrace mobile technology to attract the mobile member. To better understand the needs of potential Generation Y members, Polet urged audience members to read:
* “Customer Experience and Credit Union Opportunities: A Collaboration with McKinsey and Company,” Jan. 8, 2010, Filene Research Institute; * “The Future of Member Facing Technologies in Credit Unions,” Jan. 6, 2011, Filene Research Institute; and * “The Changing Consumer,” April 18, 2011, McKinsey & Co. (available through Filene Research Institute).
He also recommended attendees read CUNA Mutual’s latest “Lending Strategies and Trends” white paper published in June 2011. It is the first of several white papers addressing lending and other challenges facing credit unions today. To read the publications, use the links.

Risk consultant Adopt enterprise fraud management strategy

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SAN ANTONIO (6/23/11)--Credit unions can no longer monitor fraud in “silos” within each product area, Ann Davidson, CUNA Mutual senior risk management consultant, told a Credit Union National Association America’s Credit Union Conference Discovery breakout audience.
Credit unions can better manage fraud risk by adopting an enterprise fraud management strategy, CUNA Mutual risk manager Ann Davidson told a Credit Union National Association America’s Credit Union Conference Discovery breakout audience Wednesday. (Photo provided by CUNA Mutual Group)
Criminals are working harder and becoming more sophisticated in their quest to steal from businesses, financial institutions and individuals. To thwart their activities, credit unions must rethink their approach must adopt an enterprise fraud management strategy, Davidson said. Companies manage areas in silos when the fail to integrate or synchronize them. “Enterprise fraud management coordinates fraud detection and prevention efforts across the entire business enterprise, and it establishes a framework for enterprise-wide deployment of fraud resources,” Davidson said. It helps a credit union gather and cross-match fraud-relevant data from all product lines, organizational units and geographic regions of the enterprise. It will prepare credit unions to “connect the dots and spot large-scale fraud attacks early in their life cycle,” she said. Rather than having individuals working in siloed areas, enterprise fraud management uses fraud teams that prioritize fraud alerts based on the level of risk they pose to the entire credit union. Teams can plan and execute focused countermeasures to combat large-scale attacks. Despite preventative efforts, what if fraud still occurs? “It’s not a matter of ‘if’, but ‘when’ you are attacked,” Davidson said. Getting to the root cause of fraud is critical. Know what controls are already in place and where there may be gaps. Davidson provided an update of the most popular fraud schemes being perpetrated and best practices for minimizing risks. The most common schemes include:
* Card fraud, including skimming, phishing via e-mail, phone and text, and kiting between business and consumer cards; * Wire fraud by phone fax or email; * Insider dealings (embezzlement); and * Data breaches and system intrusions.
To help combat system intrusions, Davidson recommended the following:
* Use antivirus software and update it often; * Use a hard-to-guess password--containing a mix of numbers and letters--the longer the password the harder it is to compromise; * Use different passwords for different websites and applications to keep hackers guessing; * Install firewall software to screen traffic; * Don’t open email attachments unless you know the source; and * Utilize a dedicated computer for the incoming/outgoing of funds by the credit union.
Regardless of how the fraudsters get in, their end game is financial gain, and how they accomplish that continues to evolve, Davidson said. Fraud prevention measures are vital, but knowing where fraud is occurring and plugging the hole is even more important. “It’s sort of like misplacing the lid to the candy jar in a roomful of kids,” Davidson said.

Build clarity into your financial statements

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SAN ANTONIO (6/23/11)--Financial institutions tend to have confusing financial statements, which makes it difficult for boards of
Click to view larger image Mike Higgins tells credit union directors Wednesday morning they should focus on their expense ratios and product mix to make sure they're creating maximum value for members. He spoke during a breakout session at America’s Credit Union Conference & Expo in San Antonio, which ended Wednesday. (CUNA photo)
directors to understand them and to use them in strategic planning, according to Mike Higgins, a partner in the accounting firm Mike Higgins & Associates. Higgins spoke Wednesday morning during the America’s Credit Union & Expo breakout sessions. “You need to restructure your financials so you bring clarity out of confusion,” said Higgins. “Once you do this, your board can use your credit union’s financials to set relevant growth targets that create value for your members.” “Too many boards use net income or ROA as a benchmark of success, but that’s shortsighted and lacks strategic focus,” said Higgins. “It demonstrates ignorance of how a successful credit union operates. The bottom line isn’t really your true bottom line.” Higgins said credit unions’ strategic priorities should be:
* The strength of the net revenue engine is very important—it seals your credit union’s fate; * Operating expenses relative to net revenue; * Credit loss tolerance; * An adequate capital-ratio range; and * Ongoing creation of value for members.
Boards should pay attention to and develop targets for their credit union’s product mix and expense ratios. “A focus on these areas will help your board stay focused on creating value for members.” Higgins also suggests boards use a rolling 12-quarter budget or operating plan. “The annual budget has become a dinosaur--it’s too long of a time period,” he said. He said the ideal performance scorecard would include net revenue or return on assets, balance growth, product mix, rate differential, expense ratio, credit losses, capital ratio, and return on equity before and after credit losses.

Succession plans only part of board governance

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SAN ANTONIO (6/23/11)--“If one of the most important roles of credit union boards is to select, compensate and evaluate well-qualified
Click to view larger image Succession planning isn’t the only thing that falls under a credit union’s board governance responsibilities, said Bob Hoel, a senior fellow with the Filene Research Institute. He described governance best practices at a Discovery breakout session during the Credit Union National Association conference, America’s Credit Union Conference & Expo in San Antonio Tuesday afternoon. (CUNA photo)
CEOs, why do so many boards not have CEO succession plans?” Bob Hoel, a senior fellow with the Filene Research Institute, asked America’s Credit Union Convention & Expo attendees at a Discovery breakout session Tuesday afternoon. “Continuity of leadership is extremely important for your credit union, and everyone should have a CEO succession plan,” said Hoel. In additional to succession planning, credit union boards need to:
* Monitor the credit union on behalf of members. * Maintain an attitude of constructive criticism and ask incisive, probing questions and require accurate answers. * Act with integrity and diligence, and commit to long-term member value. * Make sure your board has the right mix of skills and expertise to enable effective oversight. “Look around your boardroom,” says Hoel, “and if everyone looks just like you, you probably need a greater diversity of skills and expertise.” * Understand the credit union movement and the broader financial services industry. “Have you been to a Wal-Mart Money Center?” asks Hoel. “That’s where the action is, and that’s where your future members are.” * Participate in strategic planning. Develop, review, monitor, and understand your credit union’s strategic plans. * Oversee your credit union’s risk plan and disaster preparedness. * Minimize board/CEO conflict by building trust, not micromanaging, understanding your board’s roles and boundaries, and resolving conflict in the earliest possible stages. Conflict, if left unaddressed, almost always gets worse.
Hoel encouraged attendees to do everything they can to increase the number of members who attend credit union annual meetings. “Usually these things are pretty dull and uninteresting, but they don’t have to be,” said Hoel. “Make them fun, give things away, and make them promotional extravaganzas for your credit union.” He used the example of Tarrant County CU in Fort Worth, Texas, which attracts 500 to 700 members to its annual meetings, even though it’s relatively small with $60 million in assets. Hoel said organizations actually discourage stakeholder/member involvement when they:
* Don’t disclose executive compensation; * Don’t disclose merger offers; and * Tightly control the board nomination process.
He encouraged attendees to make their credit unions more transparent as a way to build stronger levels of member trust. For example, Northwestern Mutual has a practice of inviting five or six policy owners into its home office every year and giving them full access to the entire company and all its records. The policy owners then write reports about their experiences and their unedited reports are published in the company’s annual report.

NEW Fed decides to keep target rate at 0 to 0.25

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WASHINGTON (6/22/11 LIVE: 12:07 p.m. CST)--The Federal Reserve’s policymakers Wednesday decided to keep the fed funds target rate steady at 0 to 0.25% to promote the ongoing economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate. The Federal Open Market Committee (FOMC) will complete its purchases of $600 billion of longer-term Treasury securities by the end of this month and will maintain its existing policy of reinvesting principal payments from its securities holdings. Information received since the committee met in April indicates that the economic recovery is continuing at a moderate pace, though somewhat more slowly than the committee had expected. Also, recent labor market indicators have been weaker than anticipated. The slower pace of the recovery reflects in part factors that are likely to be temporary, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan. Household spending and business investment in equipment and software continue to expand. However, investment in nonresidential structures is still weak, and the housing sector continues to be depressed. Inflation has picked up in recent months, mainly reflecting higher prices for some commodities and imported goods, as well as the recent supply chain disruptions. However, longer-term inflation expectations have remained stable. Consistent with its statutory mandate, the committee seeks to foster maximum employment and price stability. The unemployment rate remains elevated; however, the committee expects the pace of recovery to pick up over coming quarters and the unemployment rate to resume its gradual decline toward levels that the committee judges to be consistent with its dual mandate. Inflation has moved up recently, but the FOMC anticipates that inflation will subside to levels at or below those consistent with the committee's dual mandate as the effects of past energy and other commodity price increases dissipate. However, the committee will continue to pay close attention to the evolution of inflation and inflation expectations. The committee continues to anticipate that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate for an extended period. The FOMC will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate. The committee will monitor the economic outlook and financial developments and will act as needed to best foster maximum employment and price stability. Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen.

Heard at the ACUC Remarry your members and more

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Click for slide show Motivation speaker Martin Seca pumps up an already enthusiastic gathering at a reception Monday evening for the Network of Latino CUs and Professionals during America's Credit Union Conference. The crowd that gathered also heard welcoming remarks from Credit Union National President/CEO Bill Cheney and Texas CU League President Dick Ensweiler. (CUNA photo)
SAN ANTONIO (6/22/11)--The customer-service bar has been set so low, it has become relatively easy to excel at it--you just don’t have to try that hard,” Scott Stratten, president of unMarketing and social media expert, told attendees at a Tuesday morning America’s Credit Union Conference & Expo breakout session. (That was only one of the topics under discussion at the conference presented by the Credit Union National Association. The conference ends today. See the slide show for more discussions and related stories in News Now’s System section.) “I used to do business with a certain bank,” Stratten confessed, “and whenever I called the bank I heard the message--‘due to unusually heavy call volume…’ I heard this message every time I called for five years. And then I asked myself, ‘At what point does unusually heavy call volume become usually heavy call volume?’” Stratten said many service providers treat their existing customers poorly but fall all over themselves to roll out the red carpet for new customers. “What you should be doing is celebrating every member who walks into your lobby,” said Stratten. “Don’t treat them like they’re an interruption.” “I noticed an ad in the newspaper recently that said my bank was giving away iPods, so I walked in to the lobby and asked for my iPod. But the teller told me the iPods were only for new customers opening new accounts. I felt penalized for having a pre-existing relationship with them. What kind of message does that send? “Instead of treating your existing members poorly, you need to be like that cheesy couple who get remarried after 40 years. You need to remarry your members. Tell them how much you love them. After all, the best source of future members is ecstatic members--not static members--but ecstatic members.” Stratten’s advice for credit unions using--or planning to use--social media is to think of social media as talking. “If you don’t like talking to your members,” he said, “social media probably isn’t for you. Financial institutions that don’t like talking to people are called ‘banks.’ But talking to people is in your DNA. It’s who you are.” “Remember that people spread awesome content on social media; people don’t spread average content. Don’t engage in ‘frequent futility’--don’t blog or tweet if you don’t have something awesome to say.”

CUs challenged Lead innovation to meaningful uniqueness

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SAN ANTONIO, Texas (6/22/11)--“The only intelligent life form in the banking industry is credit unions. It is not good for an organization to have stupid competitors. It hurts innovation” and leads to complacency, Doug Hall, CEO and founder of the Eureka! Ranch, an invention and research think tank, told America’s Credit Union Conference (ACUC) & Expo Tuesday morning in San Antonio.
Click to view larger image A challenge for today’s organizations is to lead the innovation to become meaningfully unique. “If your organization is not meaningfully unique, you better be cheaper,” said Doug Hall, CEO and founder of the Eureka! Ranch, an invention and research think tank. He told Tuesday morning’s general session at America’s Credit Union Conference & Expo in San Antonio that he is a credit union member. (CUNA Photo)
In his keynote speech about “Innovative Engineering: How to Innovate and Grow Your Credit Union,” Hall said he is a credit union member “here to challenge you” to be “meaningfully unique. “If you are not meaningfully unique, you better be cheaper [than the competition].” He told credit unions to confront reality by figuring out where they fall in the business life cycle, whether they are growing or declining. “Would you buy your credit union? If not, the business is declining,” Hall said. “Use innovation to reboot and restart your growth curve. There’s never been a better time [to do so] than now,” he said, adding that the average age of membership is older and needs rebooting in an age of accelerated change. Credit unions should be winning in the race for the market. “You should be winning tremendously. You should be slaughtering the competition.” While the world changes faster and faster, management has not moved much, he said, citing research that disclosed challenges for credit unions and shows they could do better. It is not enough to give good service,” Hall said. “You must be proactive…here in his room, you are 40% proactive and that’s the highest proactive rate I’ve seen in two years.” To be more innovative, credit unions can:
* Explore stimulus. Instead of brainstorming, which sucks ideas out of the head, feed the brain with stimulus. * Leverage diversity of ideas. * Communicate and turn employees into marketers who can identify the member/customer’s problem, provide a promise of a benefit from the product/service, and offer the proof the product/service delivers.t, offer the product/service proof. Tell consumers why they should care.
The ACUC, presented in San Antonio by the Credit Union National Association, ends today.

CUNA Chairman May addresses top issues

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SAN ANTONIO (6/22/11)--Interchange and other Washington issues, staying relevant to members, attracting new members such as youth and the Latino market, and the need for industry unity are “real challenges” that credit unions are facing. And to help overcome them, the Credit Union National Association (CUNA) Board of Directors has set “an ambitious, but necessary goal,” said CUNA Chairman Harriet May Tuesday.
Click to view larger image Credit Union National Association Chairman Harriet May, president/CEO of GECU, El Paso, Texas, announced plans for a strategic vision that will rally and guide the credit union movement, unify them, help them deal with the challenges they face and reach their full potential with the American consumer at Tuesday afternoon’s general session at America’s Credit Union Conference, which ends today in San Antonio. (CUNA photo)
“Our goal is to develop a new, strategic vision that will rally and guide the credit union movement, unify us, help us deal with all of these challenges and reach our full potential with the American consumer,” she told attendees at Tuesday afternoon’s general session at America’s Credit Union Conference & Expo, which ends this afternoon. “But this will not be a CUNA staff, vendor, or even board initiative. This will draw on the best and the brightest minds throughout our movement. It will be more than a vision statement—it will set the direction from which specific strategies and actions will flow. At stake is our ability to define ourselves, rather than have others define us.” The initiative is “in the preliminary stages, and we’ll need broader input. But I am confident of this: Any new strategic vision and plan for the future will be firmly rooted in those attributes that have made our movement great these past 100 years--our cooperative principles, our not-for-profit structure and our “people helping people” philosophy. These are undeniable, and the foundation of our success.” May, who is president/CEO of GECU in El Paso, Texas, discussed issues of concern to credit unions, calling interchange a “huge issue, affecting every one of us with a debit card program. “The Fed’s final rule is due out any day. The general expectation is that it will be an improvement over the original proposal. How much of an improvement remains to be seen, but it will very likely be better than before. And that is a testament to your activism on this issue.” While the final Senate vote to delay interchange was disappointing, it was a majority, “with 54 of 99 senators voting with us, including 12 who voted for the amendment last year but voted against Durbin this time,” she said. "Your work at the grassroots level made that happen. The half a million contacts you made to Congress prior to the vote was just extraordinary. While the final tally fell six votes short of the 60 we needed, the signal sent was unmistakable: A majority of U.S. senators determined the Fed proposal was flawed. That message has not been lost on the Fed as they finalized their rule. Neither have the concerns expressed in the more than 5,000 comment letters that credit unions sent to the Fed.” She noted that Sen. Durbin and others “said on the floor, for the record, that if the exemption for smaller institutions doesn’t work, they’ll fix it. And we plan to hold them to their word.” May also addressed the “fast and furious” changes in the financial services industry. Relevance is “a much greater challenge” but the movement “will meet the challenge, she said. “By aligning together, we can become the financial institution of choice for American consumers. Why shouldn’t we be? We are trusted. We provide phenomenal value. And our cooperative business model is exactly right for these times.” Among the other challenges:
* An aging membership needs specific services. “As the Baby Boomers move into their retirement years, we need to have the product lines, the reach and convenience to provide the wealth management services the Boomers will demand.” * As membership ages, all financial institutions are vying to attract younger people, but CUNA’s new Environmental Scan reports that 70% of consumers aged 18 to 24 are “not at all familiar” with credit unions. Mobile banking and social media are two essential ingredients for reaching the younger market. * As to the challenge of serving the Latino marketing, understanding cultural differences, getting out into the communities, hiring the right personnel, “our movement has made enormous strides. CUNA’s partnership with the Coopera Group and Texas credit unions’ Juntos Avanzamos program are examples. “But this will be an ongoing challenge.” * A challenge “that keeps me up at night” is “too much fragmentation within our credit union movement. I’ve seen it on National Credit Union Share Insurance Fund prepayments, the corporates, even interchange. Too many of us circle the wagons around ourselves instead of circling the wagons around our whole [movement], when instead we could be working together to find solutions that will benefit us all. * Credit unions face an array of challenges in Washington--securing member business lending legislation; gaining access to supplemental capital; issues with our primary regulator; new rules from the Consumer Financial Protection Bureau; scrutiny of our tax status; and educating our corps of volunteers to cope with it all.
“The challenges are all very real. But they can be overcome,” she said. “Credit unions are America’s best choice for financial services. With a new strategic vision, we can also be the American consumer’s top choice, the one more turn to in order to make their financial dreams become a reality.”

CUNA Mutual CUs can help members weather financial crisis

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SAN ANTONIO (6/22/11)--Credit unions are positioned to help their members climb back from the continued financial fallout of the recession. But credit union leaders must be willing to learn more about their members and provide the appropriate products and services, a CUNA Mutual Group representative told a Discovery breakout session audience at Monday’s Credit Union National Association’s America’s Credit Union Conference in San Antonio.
Click to view larger image Credit unions can help members climb back from the economy if leadership is willing to learn more about their members and provide appropriate products and servicds, said Heather Thiltgen, CUNA Mutual vice president of consumer marketing during a Discovery breakout session at America's Credit Union Conference Monday. (CUNA photo)
Heather Thiltgen, CUNA Mutual vice president of consumer marketing, told the credit union audience that knowing their members is key to providing the right tools to help them get back on the right financial track. The good news, she said, is that credit union members are “overwhelmingly confident, positive and self-reliant,” based on research CUNA Mutual conducted this year on consumer financial needs. Thiltgen said the research shows credit union members are hard-working, middle-aged, family-oriented and have annual household incomes averaging between $55,000-$60,000 to $100,000. Thiltgen also noted that one of the primary reasons members do business with their credit unions is because they trust them. “The advantage of trust means members are likely to purchase more products from you in the future,” Thiltgen said. “Credit unions focus on helping their members first. Considering consumers have been burned by mutual fund scandals and the housing bubble, doing business with the right financial institution is important to them, making credit unions uniquely positioned in this regard.” Thiltgen recommended credit unions know their current product penetration and offer a broad set of products to meet their needs. Recognizing that members are seeking value and crunched for time, products need to be simple and affordable, she said. And once in place, products and services should be widely marketed. “You’re known for your great loan rates; advertise them and make your loans easy to get,” said Thiltgen. “Make it easy for members to get pre-approved online and even print a check they can take to the dealers. Think about how to eliminate points of inertia in every step of the process.” Providing members with their preferred channel is also important, she said, encouraging credit unions to “build toward multiple integrated channels by rapidly developing your website, online banking and email functionality.” CUNA’s ACUC runs through today.

Mid-Atlantic Corporate re-elects three to board

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MIDDLETOWN, Pa. (6/21/11)--Mid-Atlantic Corporate FCU, Middletown, Pa., announced the results of its board elections during its annual meeting, held in Harrisburg, Pa., last week. Three incumbents were re-elected to the board (Pennsylvania Credit Union Association Life is a Highway June 17). They are:
* Joan Moran, CEO of Labor Department FCU, Washington, D.C.; * Mike Pastirik, president/CEO, United Community FCU, West Mifflin, Pa.; and * Connie Wheeler, CEO, Penn State FCU, State College, Pa.

CUs need to be aware of health care reform landscape

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SAN ANTONIO (6/22/11)--The potential impact of health care reform on employers is beginning to take shape, and credit unions need to educate themselves on the emerging landscape and determine what their future employee benefits philosophy will be, said CUNA Mutual Group’s Brad Pricer at an America’s Credit Union Conference Discovery breakout session late Monday.
Click to view larger image Brad Pricer, senior manager of employee benefits product management for CUNA Mutual Group, discusses impacts of health care reform on credit unions’ employee benefits programs Monday at a Discovery breakout session at America’s Credit Union Conference in San Antonio. (Photo provided by the Credit Union National Association)
Health care insurance exchanges and “Play or Pay” penalties will likely have the most influence on whether or not credit unions offer health care benefits to employees and, if so, to what degree, said Pricer, CUNA Mutual senior manager of employee benefits product management. By Jan. 1, 2014, each state must establish an “American Health Benefit Exchange.” These will provide a platform for businesses and individuals to purchase qualified health plans (QHPs) and provide for a Small Business Health Options Program (SHOP Exchange) to assist small employers in enrolling their employees in QHPs in the small group market. “With the assistance of the Department of Health and Human Services, each state will develop its own exchange within certain parameters mandated by the federal government,” Pricer said. “How those are built within each state will determine what realistic insurance options are available to employers through the private market or through the exchange.” Also starting in 2014 will be implementation of the Exchange-Related Employer Penalty Tax--the so-called, “Play or Pay” tax. Certain large employers may be subject to penalty taxes if they do not offer a health plan to employees or if the plan doesn’t offer a certain level of coverage. Specifically, penalty taxes could apply for:
* Failing to offer health care coverage for all full-time employees; * Offering minimum essential coverage that is unaffordable, or * Offering minimum essential coverage under which the plan’s share of the total allowed cost of benefits is less than 60%.
“Credit unions will need to make a decision,” Pricer said. “Is it better to offer a health insurance plan to employees at a certain price, or not offer coverage and pay the federal Play or Pay penalty taxes on an ongoing basis?” The answer will be driven by affordability and whether a credit union embraces the philosophy of being an “employer of choice” to recruit and retain the best available talent. “We don’t have all the financial information yet, but understanding your options will help you make intelligent decisions when more is known,” Pricer said. Citing a McKinsey & Company study, Pricer said it’s estimated between 7% to 30% of businesses may opt to drop health care coverage for their employees. Pricer also provided attendees with an update on ongoing judicial challenges to the Health Care Reform Law. Twenty-six states have challenged the law’s constitutionality, with the most notable case being “Bondi vs. HHS” in Florida. The judge in this case declared that the constitutionality of the individual health insurance mandate is so intertwined with all other aspects of health care reform that the entire law is unconstitutional. The case appears headed to the U.S. Supreme Court, he said. In the meantime, Pricer reminded credit unions of key provisions of the law slated to go into effect in 2011:
* Availability of consumer rebates for excessive medical loss ratios; * Employers may optionally report health coverage costs on form W-2; * Employees need a prescription to be reimbursed for over-the-counter medications/supplies run through their health spending and savings accounts; * Updated employee notice requirements; and * Grants for wellness programs are established.
Pricer encouraged attendees to go to the CUNA Mutual website for timelines, legislative briefs, model notices and forms. Use the link.

Ireland creates commission on restructuring CUs

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DUBLIN, Ireland (6/17/11)--Ireland’s government has established a commission to review the country’s credit union movement and make restructuring recommendations for institutions struggling with rising delinquencies and a dismal lending market. An 11-person commission, comprising primarily credit union senior managers, will provide the government with an interim report in September, with a final report due in March, (Reuters June 16). Many of country’s credit unions have been hit hard by the global recession and falling property values, Reuters said. A study by consultants Grant Thornton concluded that Ireland has too many credit unions functioning at an inappropriately high risk level, according to credit union regulator James O’Brien (News Now June 16) As many as 80 credit unions could be forced to close as a result of bad loans, according to Ireland Finance Minister Michael Noonan (Daily Mirror June 17).

South American CU execs visit Alliance CU

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FENTON, Mo. (6/22/11)--Two Colombian credit unions executives spent June 8-16 with their counterparts at Alliance CU in Fenton, Mo., learning how American financial institutions operate and discussing their role in the economy.
Click to view larger image Dennis Sommer, president/CEO of Alliance CU in Fenton, Mo., works with Sylvia Gonzalez and David Orjuela, two credit union executives who visited from Colombia, South America. The executives came to learn how American credit unions operate within the U.S. economy. (Photo provided by Alliance CU)
Dennis Sommer, president/CEO of the $177 million-asset credit union, arranged the program through the World Council of Credit Unions (WOCCU). Sommer has a long association with credit unions dating back to the 1970’s when he was a Peace Corps volunteer working with credit cooperatives in Cali, Colombia. David Orjuela and Silvia Liliana Gonzalez came to St. Louis to learn about the roles of credit unions within the U.S. financial system, and specific practices used at Alliance CU. Both plan to adapt the knowledge they have gained during their visit to improve operations and expand services at their own credit unions. Orjuela is the director of risk management at the Cooperativa de Ahorro Y Credito Coprocenva in Cali, Colombia. He has a master’s degree in economics and his work is targeted in risk analysis, asset liability management, loan portfolio analysis, credit systems, and research and development of new credit methodologies. Gonzalez is director of collections at Financiera Comultrasan Ltda. in Bucaramanga, Colombia. She is a financial and corporate law specialist with an eight-year career at her “cooperativa de ahorro y credito.” Gonzalez manages collections, consumer credit, commercial loan portfolios and financial services at her credit union. “Being able to share how we manage our credit union and plan its future growth with our South American neighbors was an outstanding learning experience for everyone involved,” Sommer said. “Our credit unions have many of the same opportunities, and it was great to be able to exchange ideas on how to approach those opportunities.”

MDDCCUA convention Elections awards Cheney as keynoter

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OCEAN City, Md. (6/22/11)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) Sixth Annual Meeting and Convention convened June 12-15 for a half-week of education, networking and social activities. More than 240 credit union officials attended the meeting, which was held at the Convention Center in Ocean City, Md. Bill Cheney, president/CEO of the Credit Union National Association (CUNA), gave the keynote address at the annual business meeting. He said the U.S. Senate vote on the interchange delay bill was deeply disappointing, but that credit unions need to redouble efforts to minimize the impact of the law both in Congress and at the Federal Reserve. (NOTE: U.S. Sens. Tester (D-Mont.), Corker (R-Tenn), Hagan (D-N.C.), Carper (R-Del.), Crapo (R-Idaho), Blunt (R-Mo.), Kyl (R-Ariz.), Coons (D-Del.), and Bennet (D-Colo.) had introduced an amendment to the Economic Development Administration Reauthorization Act which would have stopped, studied and started over on debit interchange.) Cheney praised Maryland and District of Columbia credit unions’ efforts to get U.S. Sen. Barbara Mikulski (D-Md.) to vote for the bill. He said CUNA will continue to be out front in advocacy for member business lending and remain vigilant of any efforts to tax credit unions. He said credit unions should “continue to do what you do best for the members. You provide value for your members and a have great story to tell.” At the business meeting it was announced that Miguel Boluda, PAHO/WHO FCU; Rod Staatz, SECU; and Chris Conway, Educational Systems FCU, Greenbelt; were re-elected to the board of directors by acclamation. The newly-elected officers of the board were announced:
* Chairman--Miguel Boluda, president/CEO of PAHO/WHO FCU, Washington, D.C.; * Vice Chairman, Rod Staatz, president/CEO of SECU, Linthicum, Md. * Secretary--Theresa Mann, president/CEO of The Partnership FCU, Arlington, Va. * Treasurer--Rob Windsor, president/CEO of First Financial FCU of Maryland, Lutherville, Md.; and * Chairman of the Community Outreach Committee--Debbie Connors, president/CEO of Money One FCU, Largo, Md.
An informational session followed the business meeting, in which Boluda discussed the Board’s decision not to move forward with the merger with the New Jersey League and to proceed with a CEO search using D. Hilton and Associates. He highlighted that the board was committed to working through the summer on the recruitment and hiring of an association CEO. The Professional and Volunteer Awards were presented on Wednesday morning. Paul Coakley, chairman of St. Agnes Employees FCU, Baltimore, was honored as the Volunteer of the Year and Chris Conway, president/CEO of Educational Systems FCU, Greenbelt, Md., was presented with the Professional of the Year. Many credit union directors attended the pre-conference workshop, “The Financial Role of Credit Union Volunteers,” led by Kenneth Welch, CPA, of Larson Allen LLP. Credit union officials took advantage of two full days of 25 break-out sessions, none repeated, and keynote speakers. The break-out educational session topics ranged from compliance issues to social media, credit score migration to auto loans, branding to due board governance. The keynote addresses were:
* Dave Colby, CUNA Mutual Group’s chief economist, provided a review of today’s economic trends, and its effect on members and credit union operations. * Mark DeBellis, president of PSB Integrated Marketing, gave his insights on credit unions after 100 days on the road visiting credit unions throughout Western U.S. He shared some of the best and brightest stories of how credit unions are serving their members. * Jane Walters, NCUA Region II director, shared her perspectives on the state of credit unions Region II, which now includes California. She gave an overview of what to expect during examinations, including examiner review of policies related to director financial education. * Scott Christopher, humorist and corporate culture expert, lightened up the audience at Wednesday’s luncheon. He established the case for levity leadership, which incorporates humor in the workplace.
A total of $2,394 was raised for Credit Unions for Kids through the sale of Mulligans at the golf tournament, the sale of Credit Union Cherry Blossom Ten-Mile Run Snuggle Up for Kids t-shirts and the 50-50 drawings. All of the winners of the 50-50 drawings for CUs for Kids returned their cash to benefit Children’s Miracle Network Hospitals: Dan Rhoades and Linda Albrecht of CUNA Mutual Group, and Shelly Fears of CU Title.

NASCUS to NCUA Well work to ensure prudent prepay participation

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ARLINGTON, Va. (6/22/11)--In a letter to the National Credit Union Administration (NCUA), the National Association of State Credit Union Supervisors (NASCUS) said it will work to ensure participation in the agency’s voluntary prepaid assessments program is prudent in light of each state-chartered credit union’s financial condition. The addition of safety and soundness thresholds would mitigate the risk of imprudent credit union participation, NASCUS said. NCUA has proposed a potential voluntary prepaid assessments program through which credit unions may choose to voluntarily prepay future assessments up to 36 basis points. When the Temporary Corporate Credit Union Stabilization Fund was established in 2009, NCUA communicated to the credit union system that significant upfront cash outlays would be expected in 2011 and 2012. The funds collected from a potential prepayment program would address some of the cash outlay issues and potentially lower the assessment rates for this year and next, while allowing credit unions to prepay for assessments starting in 2013. Whether NCUA offers a program, and whether credit unions choose to participate, are issues primarily between NCUA and federally insured credit unions, NASCUS outlined in its letter. NASCUS’ comments were confined to ensuring that a credit union’s decision to participate is a prudent one given its particular condition and recommends the agency add a safety and soundness threshold for participation. “If NCUA proceeds with a prepaid assessment program, state regulators will work to ensure participation of state-chartered credit unions is prudent in light of the credit unions’ condition. The addition of safety and soundness thresholds would mitigate the risk of imprudent credit union participation,” the letter stated. Such an approach would be consistent with regulatory expectations of a troubled institution that was seeking to pre-pay or expend up to 36 basis points on something other than the stabilization fund, NASCUS said.

Financial Training certification reaches mid-point in Illinois

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NAPERVILLE, Ill. (6/22/11)--More than 20 individuals from Illinois credit unions are halfway to “graduating” as Certified Credit Union Financial Counselors (CCUFC) of the REAL Solutions Enhanced Financial Counseling Certification Program (FiCEP). Illinois’ REAL Solutions program started its participation in FiCEP in March as a result of support from the Illinois Credit Union Foundation (ICU Foundation). As the Credit Union National Association’s (CUNA) Financial Counseling Certification Program, FiCEP enables all credit union staff to become more confident in helping members build a stronger financial future. It is designed for those who work in financial counseling, collections, and loan departments, and any other staff members who are committed to helping members gain control of their financial future. To date, the participants have taken part in an orientation session, four webinars and a proctored exam on the first group of program modules. They include: Introduction to Financial Counseling, Financial Counseling Essentials, Special Issues in Financial Counseling, and Using Communication Skills During Financial Counseling. Recently, the first of two in-person meetings were held to recap the first half of the training. Included on the program were Jadwiga Goraczynski, branch lending and product specialist, Alliant CU, Chicago; and Gwendolyn M. Hawkins, manager, Gwen’s Helping Hands LLC Credit and Education Rebuilding Program. Both have gained the CCUFC designation and spoke about their experiences providing financial counseling for members and promoting this service within the credit union. Modules for the second half of the program will include: Taxes, Insurance, and Investments; Controlling Living Expenses and Understanding Consumer Credit; Matching Values to Money; and Retirement and Special Issues. The program is scheduled to conclude July 20, with the second of two in-person meetings to be held at the ICU System Center in Naperville that will include proctored testing on the final four modules. Modeled after the CUNA Certified Financial Counselor Schools, FiCEP includes two parts of four learning modules each. When an individual successfully completes the proctored exams for both parts (eight total modules), he or she will be a CCUFC ready and able to assist members in reaching their financial goals.

Heard at the ACUC Breakout session highlights

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SAN ANTONIO (6/21/11)--Attendees at the America’s Credit Union Conference & Expo in San Antonio this week had several choices among educational sessions on Monday afternoon. Here are highlights from three of the nine Thought Leader Sessions and Discovery breakout sessions offered. The conference is presented by the Credit Union National Association (CUNA), with CUNA Mutual Group contributing the Discovery breakout sessions each day.
Click for slide show To achieve high levels of member loyalty, your credit union must go far beyond member service that results only in satisfaction, says Neil Goldman, CEO of Goldman Consulting and Strategy, during a Monday session at the America’s Credit Union Conference & Expo. To ensure growth in the future, Goldman says credit unions must practice operational efficiency, product leadership or distinction, and member intimacy or loyalty (CUNA photo).
In the “Competitive Opportunity for Small Business Services” breakout session, credit unions learned they have large small-business opportunities. About 10% of small businesses have switched financial institutions during the past year, according to Leigh Sherman of Cornerstone Advisors. “Small businesses are leaving megabanks because the business owners are concerned about future access to credit, and they’re feeling alienated by megabank mergers that result in poor or inconsistent service,” Sherman said. “This represents an obvious opportunity for credit unions.” And the opportunity is large:
* There are 27 million small businesses in the U.S. and six million of those have fewer than 20 employees. * Fifty percent of all U.S. employees work for small businesses. * Small businesses spend $500 billion on financial products and services. * Banks with more than $50 billion in assets have 55% of the small-business market. Credit unions have 8% of the market. * Fifty-four percent of small-business owners have their business and personal accounts at the same financial institution. * About 50% of small-business owners use online banking; 44% use direct deposit for their employees; 37% use online bill pay; and 30% use smart phones or personal digital assistants(PDAs).
“In the small-business relationship, the credit card is trump,” said Sherman. “Credit cards fund more small businesses than traditional bank loans because of the convenience factor and the 30-day float. About 60% of small businesses use credit cards to finance basically everything. "And the use of social media is growing exponentially among small-business owners. Many business owners use Facebook and Twitter instead of developing their own websites,” he concluded. In another breakout session, attendees learned that member satisfaction is worthless, but member loyalty is priceless, according to Neil Goldman, CEO of Goldman Consulting and Strategy. “You don’t achieve member loyalty until your credit union far exceeds member satisfaction,” said Goldman. “Satisfaction helps your credit union play defense, but loyalty helps your credit union play offense. Defensive strategies prevent your credit union from shrinking too much during times of adversity, but offensive strategies help your credit union grow during times of prosperity. You need high member-loyalty levels to grow. Goldman is a proponent of the Net Promoter Score (NPS) for measuring member loyalty. This research technique categorizes members into “detractors,” “passives” and “promoters.” If your credit union has 10% detractors, 10% passives, and 80% promoters, your NPS is 70 (throw out the passives and subtract the detractors from the promoters for your NPS). “The NPS is kind of like the Fahrenheit temperature gauge,” says Goldman. “If you score 32 or below, your credit union is frozen and dead. If you score in the 50s or 60s, your credit union is tepid and growth will be a struggle. But if you score in the 70s and 80s, your credit union will grow and thrive.” In a third afternoon session co-presenters and credit union development educators from CUNA Mutual Group and Seattle-based BECU indicated that credit unions can grow and thrive through their cooperative principles. Many credit unions develop principle-centered initiatives and generate positive economic results for their members, the community and the credit union itself, said Jennifer Kuhn, talent management and recruiting director at CUNA Mutual. “Credit unions are unique in the financial services space with their cooperative model. Leveraging the credit union difference can help generate growth and financial success,” she said. Deborah Wege, community affairs manager at BECU and executive director of the BECU Foundation, told about BECU’s support of Express CU in King County, Wash. Express CU’s focus is on providing low- and moderate-income families affordable financial services as an alternative to payday loans and check cashers. BECU works with Express CU to expand its capital and extend its influence to immigrant and low-income families in the Puget Sound region. “Not only does BECU’s sponsorship help the members of Express CU, it enhances the ability of BECU to do our cooperative part in strengthening our underserved communities,” said Wege. The two credit unions demonstrate two of the seven principles of highly effective credit unions: A concern for the community and cooperation among cooperatives. Kuhn and Wege shared the seven principles of highly effective cooperatives developed by the International Co-Operative Alliance and challenged attendees to develop a cooperative, purpose-driven credit union. The principles are:
* Voluntary and Open Membership. Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination. * Democratic Member Control. Cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions. The elected representatives are accountable to the membership. * Members’ Economic Participation. Members contribute equitably to, and democratically control, the capital of their cooperative. Members allocate surpluses for any or all of the following purposes: developing the cooperative, benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership. * Autonomy and Independence. Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy. * Education, Training and Information. Cooperatives provide education and training for their members, elected representatives, managers and employees so they can contribute effectively to the development of their cooperatives. They inform the general public, particularly young people and opinion leaders, about the nature and benefits of cooperation. * Cooperation Among Cooperatives. Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures. * Concern for Community. While focusing on member needs, cooperatives work for the sustainable development of their communities through policies accepted by their members.
Cooperative principle learning is at the core of the National Credit Union Foundation’s Credit Union Development Educators (CUDE) Certification program. Kuhn and Wege are credit union development educators, representing the CUDE Advisory Council. The conference ends Wednesday.

Supplemental capital Whats it mean for CUs

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SAN ANTONIO (6/21/11)--Supplemental capital--the ability to add to the primary or core regulatory capital beyond retained earnings--can help credit unions build sustainability, but comes with costs, said a speaker in a Thought Leader Session Monday afternoon at the America’s Credit Union Conference (ACUC) & Expo. ACUC is presented by the Credit Union National Association (CUNA) in San Antonio through Wednesday.
Click to view larger image John Lass, CUNA Mutual Group senior vice president of strategy and business development, discusses pros and cons of credit unions' use of supplemental capital to build a sustainable financial model during a Discovery breakout session at America’s Credit Union Conference & Expo Monday after. The conference, presented by the Credit Union National Association, ends Wednesday in San Antonio. (CUNA photo)
U.S. credit unions are one of two countries--Ireland being the second—that cannot raise capital by means other than retained earnings. Supplemental capital has been named on of CUNA’s top priorities, with CUNA President/CEO Bill Cheney vowing to press the issue forward. John Lass, senior vice president of strategy and business development at CUNA Mutual Group, took a packed session through the pros and cons of building a sustainable financial model through the use of supplemental and answered some of the most common questions credit unions ask about the use of supplemental capital as a strategy to build a sustainable business. As part of the discussion, he explored the potential benefits and costs associated using subordinated debt to strengthen a business. Most U.S. credit unions generate capital entirely through retained earnings, said Lass. However, major financial cooperatives elsewhere effectively use subordinated debt that can count as capital without violating the movement’s seven cooperative principles. “Supplemental capital can enable individual credit unions to grow even if capital has been drawn down,” Lass said. “There are many examples of financial cooperative systems around the world that have effectively used alternative capital to build sustainable financial models.” Lass cited Desjardins, which is based in Quebec and is the largest Canadian cooperative, as one of several examples of financial cooperatives that have successfully used subordinated debt to strengthen their businesses and gain market share. Other cooperatives such as DZ Bank of Germany, Rabobank of the Netherlands and the Farm Credit system in the U.S. have also tapped the capital markets to infuse their businesses with capital. He discussed several types of capital:
* Equity through selling stock, which would violate cooperative principles, especially the democratic member control that is one of the things that differentiates credit unions from banks and therefore not a viable option to credit unions; * Risk-based capital; * Subordinated debt; * Voluntary membership capital: and * Mandatory member capital.
“As with any other debt, a business’s subordinated debt has expenses tied to it in the form of interest rates that are determined by the capital markets,” Lass said. “If a credit union is going to raise supplemental capital, it must have a solid business plan in place to show an ability to repay the cost of the debt.” For federally insured, natural-person credit unions, only those with a low income designation are currently able to include debt capital as part of their regulatory capital. Low-income designated credit unions comprise only 15% of all federally insured credit unions and 4% of assets. Supplemental capital has potential benefits, but with it comes costs and tradeoffs, Lass said. In addition, because credit unions are tax exempt, they do not benefit from interest payment tax deductions enjoyed by for-profit institutions. There are also non-financial costs associated with raising supplemental capital. Lass said subordinated debt may involve restrictive covenants that constrain future management options. “The important thing to remember about raising alternative capital is that it’s not an end-all silver bullet. In order for it to even be an option, a credit union must have the combination of a strong financial structure and a strong value proposition to members and prospective members,” Lass added.

Cheney at ACUC State of CUs is extremely good

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SAN ANTONIO (6/21/11)--Credit unions are coming out of the financial crisis in “extremely good” condition, Credit Union National Association (CUNA) President/CEO Bill Cheney told America’s Credit Union Conference & Expo in Monday’s General Session. Attendees also heard from keynoter Dan Pink about trends in motivation. Cheney outlined the state of the credit union industry in the financial, political, and regulatory areas. Politically, things are looking up, he said.
Click to view larger image Credit Union National Association (CUNA) President/CEO Bill Cheney called for credit unions to be consistent in their messages to Congress as part of his State of the Credit Unions address at the Monday General Session at America’s Credit Union Conference & Expo in San Antonio this week. “There are 435 members of the House and 100 Senators, and we need a strategic plan for every one.” He noted that the CUNA Board is working on a vision for the credit union movement. “We’ve gone too long letting others define what credit unions should be.”
“We lost an important fight on (debit fee) interchange,” he said, referring to the 60 votes needed to delay the Federal Reserve’s implementation of its rule that bill. Credit unions came up with 54 votes. “The last time I checked 54% of 100 is a majority. That majority is resonating throughout Congress.” Credit unions “did a tremendous job” and “the atmosphere has changed.” The Fed is going to go back and look at the rule to enforce credit union exemption. The Fed’s rule issuing the July 21 implementation should be passed in the next few days but he indicated the Fed may not put compliance in effect for 60 to 90 days. Credit unions have “made the issue of interchange fees toxic with an election next year. The issue is off the table for a while, he said. “Credit unions moved straight from interchange to member business lending (MBL),” he said, noting that in his testimony last week before the Senate Banking Committee about Senate Bill 509 to raise the MBL cap to 27.5% of assets from 12.25%, he told legislators that “it is hard for small businesses and credit union employees and volunteers to believe that the government is telling them that they can’t help create jobs. “And when credit unions ask me why Congress will not let credit unions do more business lending, there is just one answer: The banks oppose it. The answer is not good enough for taxpayers who have given the banks $30 billion of their money to lend to small businesses but have only seen the banks use $9.2 billion.” Cheney also re-rang the alarm bell he sounded at CUNA’s Governmental Affairs Conference on threats to credit unions’ tax-exempt status. Credit unions need “to be more vigilant in defending their tax exemption. There are huge deficits in trillions of dollars,” he said noting the search for a broader tax base to lower rates for everyone. “I’m concerned when I hear that…there’s a real threat and we need to make sure we tell our story.” CUNA continues to receive assurances from key lawmakers that credit unions’ exemption is not on the table. Lawmakers “have said to continue to deliver great service and value to your members. We know what credit unions’ grassroots are like in a tax fight. Please don’t turn out your credit unions…everything’s fine,” he was told. Last year, Cheney named supplemental capital as the No. 1 priority. “It is one of the top priorities this year. It is essential to the long-term health and viability of credit unions and we must not trade our tax exempt status or other credit union powers for it. Credit unions are the only cooperatives in this country without supplemental capital. We will continue to press the issue to move forward.” He also addressed the need for a consistent message to Congress. “There are 435 members of the House and 100 Senators, and we need a strategic plan for every one.” He noted past grassroots strength in 1998 for the Credit Union Membership Access Act, but “credit unions’ response now is inconsistent and uneven. We need a strategy for every member of Congress and we need to be willing to engage the movement at the state and credit union level. He noted that the CUNA Board is working on a vision for the credit union movement. “We’ve gone too long letting others define what credit unions should be.” On the regulatory front, Cheney mentioned several areas CUNA will work on credit unions’ concerns about the National Credit Union Administration’s (NCUA) increase in its budget while credit unions are told to cut back; an examination Bill of Rights; concerns about front loading assessments and new rules that don’t overstep as a result of lessons learned from the financial crisis. He also noted that credit unions’ return on assets is at 74 bp nationally. Cheney noted that when he prepared for a recent congressional hearing, “everywhere I went, I heard comments on the strength of credit unions and how well they serve their members.” NCUA, which had anticipated a premium as high as 10%, has now said it is anticipating a 0% premium, because of the improvement in credit unions. CUNA economists expect savings to be strong and loan growth improving as consumer confidence and the economy improve, Cheney noted.
Click to view larger image Best-selling author and America’s Credit Union Conference keynoter Dan Pink says current behavioral research is helping organizations see how their traditional approaches to boosting performance are backfiring. He told Monday’s General Session attendees there are three primary factors of motivation: autonomy (give employees more control over their work), mastery (give employees frequent feedback to help them master their work), and purpose (tell employees “why” they’re working, not “how” to work). (CUNA photos)
Also at Monday’s General Session, keynote speaker and best-selling author Dan Pink noted that most motivational practices are outdated. “The past few decades of behavioral research have taught us a great deal about what motivates people,” Pink told attendees. “The problem is, most organizations have ignored the research and continue to practice terribly outdated methods of employee motivation.” Most organizations continue to use “if/then” motivators to try to increase employee and organizational performance--“if” employees perform at superior levels, “then” employers will reward them. “If/then motivators were popular in the 19th and 20th Centuries and they work well for simple, routine, mechanical tasks,” said Pink. “But recent research has shown us if/then motivators do not work well with complex problems that require innovation and creativity. And most 21st Century workplaces are full of complex problems that require innovative solutions.” Pink says 21st Century organizations must move beyond if/then motivators and start practicing these three principles of motivation: autonomy, mastery, and purpose:
* Autonomy. “When asked to describe the best boss you ever had, most people don’t describe someone who constantly micromanaged them and looked over their shoulder on every project,” said Pink. Employers need to give employees more autonomy and let them direct their own activities and come up with their own creative solutions. Companies that excel at this, according to Pink, are Zappos, Facebook, Atlassian, Intuit, and Google. They intentionally designate 10% to 20% of their employees’ workweek as unstructured time--when they’re free to work on any project they’d like that aligns with the company’s goals. At Google, for example, employees used this unstructured time to create products like g-mail and g-news. * Mastery. “People love to get better at things,” said Pink. “And motivational studies have shown that people at work say they’re most motivated when they’re making progress on assignments or projects. But employees won’t know whether or not they’re making progress at work if they don’t have regular feedback. The annual performance appraisal isn’t working because it’s annual. Employees need constant feedback on their progress toward mastering projects or tasks.” * Purpose. “Instead of telling employees how to do things, tell them why they’re doing them,” he said. “Organizations need to embrace the purpose motive, not merely the profit motive.”
The conference, presented by CUNA, continues through Wednesday in San Antonio.

OpSS Council releases paper on plastics payments

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Madison, Wis. (6/21/11)--CUNA Operations Sales & Service Council has released “A Brave New World of Plastic and Payments,” a white paper that considers the near future of credit and debit cards, mobile banking and people-to-people payments. There are, of course, no clear-cut answers to the future, but some credit unions are taking the lead in the financial services industry, according to the white paper. State Employees’ CU, for instance, was one of the first financial institutions in the U.S. to add a microchip to its debit card. The $22.5 billion-asset organization in Raleigh, N.C., has 16,000 members currently using the card. and plans to offer the chip technology to its remaining 960,000 cardholders. Plans are also in the works to introduce chip cards to credit card holders in the first quarter of 2012. Mobile banking is also making progress, as the white paper describes. Verity CU, with $380 million assets, Seattle, launched mobile banking in May and within a month the credit union had almost 1,050 members sign up--about 10% of its active online users. “It was one of the easiest launches ever,” says Shari Storm, Verity senior vice president and chief marketing officer. “It was relatively inexpensive and right after we launched mobile banking, members were already asking for remote deposit capture.” “There is something weirdly engaging about using apps and the smart phone,” Storm adds. “I heard a brain scientist speak at a luncheon and she told us about a study that showed dopamine levels in the brain shoot up higher when you hear a ping on your Blackberry or smart phone then when you look your children in the eye.”

CU System Briefs (06/20/2011)

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* CHARLOTTESVILLE, Va. (6/21/11)--A June 17 News Now story, “Study: CUs can tap $169B Latino, unbanked market,” was wholly written by the study’s authors--Greg Fairchild, executive director of the Tayloe Murphy Center and Darden professor, and Kulwant Rai, research director at the Tayloe Murphy Center at the University of Virginia Darden School of Business and its Tayloe Murphy Center. Three comments were erroneously attributed to the National Federation of Community Development Credit Unions, which issued the press release on the study. News Now apologizes for any confusion this caused. A corrected version of the story can be viewed in the News Now archives …

WOCCUs online auction goes live July 11

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MADISON, Wis. (6/21/11)--MADISON, Wis. (6/21/11)--Credit unions, as well as individuals, are invited to take part in the World Council of Credit Unions online auction, which goes live July 11.
Click to view larger image The World Council of Credit Unions online auction goes live July 11. Auction co-chair Crissy Cheney, wife of Credit Union National Association President and CEO Bill Cheney, bids on an item at last year’s live auction in Las Vegas.
Those interested in participating can donate items or take part in the bidding process. Popular items in the past include state-themed baskets, tickets to sporting events, unique travel experiences and items related to a credit union’s primary membership. “This is a fantastic way to support developing credit union systems,” said Crissy Cheney, wife of Credit Union National Association President/CEO Bill Cheney, who is co-chairing the auction this year with Judy Ensweiler, wife of Texas Credit Union League President/CEO Dick Ensweiler. “Get creative and donate something that represents you, your credit union, league or location. Bidders always love the variety and unique items. The online auction truly has something for everyone, from distinctive regional items to personal experiences you can't find anywhere else.” All proceeds go to the Worldwide Foundation for Credit Unions, WOCCU’s charitable arm, to support credit union development programs and further WOCCU's mission of improving people’s lives through credit unions.

Wis. league urges governor to veto conversion-to-bank measure

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PEWAUKEE, Wis. (6/21/11)--The Wisconsin Credit Union League is asking Gov. Scott Walker to veto provisions in the state budget bill that would allow direct conversions of member-owned credit unions to shareholder-owned banks. “The direct-conversion provisions subvert the interests of a credit union’s full membership to that of a few who intend to own and profit from a stockholder-owned--and not member-owned-- business structure,” said Brett Thompson, league president/CEO. Thompson said many major deficiencies in the conversion language are stunning. The provisions adopted by the legislature allow for the direct charter conversion of a credit union to stock-bank with little meaningful notice requirements, no protections of members’ voting rights and no requirement that any equity in the converted institution be returned to members. Unless the governor vetoes the provisions, he added, Wisconsin may ultimately see fewer credit unions available to serve average citizens who can’t get the financial help they need from profit-driven banks. “This is a continuation of covert moves by the banking industry to kill the healthy not-for-profit competition,” Thompson said. “And when you consider that 2.2 million citizens--nearly 40% of our state’s population--rely on credit unions to grant the affordable small personal loans or business loans they need to make a go of it, where will they turn if the for-profit banks successfully eliminate the credit union alternative?” The provision was slipped into the budget at the request of the Wisconsin Bankers Association, the league said. Neither credit unions nor the league were consulted, and no public debate or input by regulators was considered prior to the adoption of the language by the state’s Joint Finance Committee, the league said.

Corporate Central partners with firm to offer risk solutions to CUs

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MUSKEGO, Wis. (6/21/11)--Corporate Central CU, Muskego, Wis., and Lockton, a Kansas City-based privately held insurance broker, have partnered to launch a new program designed to provide risk solutions for credit unions nationwide. The partnership will provide preferential access to a nationwide network of insurers and coverage options for bonds, directors and officers’ liability, property, liability, workers’ compensation, and other insurance offerings for credit unions. Lockton’s expertise as an independent broker/advisor, its market relationships, and the buying power of Corporate Central CU’s membership, will provide opportunities to negotiate more competitive rates and improved coverage enhancements, said Corporate Central. “By going through the extensive coverage review process with Lockton, we were able to specifically identify any risks and gaps and apply the appropriate solutions,” said Bob Fouch, Corporate Central president/CEO. “It became clear to us early on that our members could benefit from the education process and ultimately help them more effectively manage risk, while gaining a much better understanding of their insurance coverage.” “By leveraging the power of Corporate Central’s membership, we are able to create best-in-class solutions for each of their members and improve coverage,” said Matt Sweeney, Lockton credit union practice leader. The thorough risk-review process conducted by Lockton will help members understand their current coverage needs and risk preference, provide expert feedback on current coverage and identify any gaps or issues, benchmark against other credit unions and compare to what can be achieved in the marketplace, Corporate Central said. Following the risk-review process, Lockton will obtain alternative coverage solutions from a selection of best-in-class insurance markets to tailor the right solution for each individual credit union. The process is intended to help credit unions gain a better understanding of their insurance coverage and satisfy their fiduciary duty to their members and/or regulators. This membership benefit will launch Aug.1. Announcements with more information about the program, a dedicated insurance program website for Corporate Central members, and a toll-free number will be released to Corporate Central members in the coming weeks.

CU Association of New Mexico new officers elected

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ALBUQUERQUE, N.M. (6/21/11)--The Credit Union Association of New Mexico elected new officers and directors to its board of directors at its annual meeting June 9. Elected were:
* Chair--Chris Fitzgerald, president/CEO, Rio Grande CU, Albuquerque; * Vice Chair--Harold Dixon, president/CEO, State Employees CU, Sante Fe; * Treasurer--Chuck Valenti, CEO, Del Norte CU, Sante Fe; * Secretary--Karen Griffo, CEO, Roswell (N.M.) Community FCU; * Director--Phyllis Crawford, manager, Four Corners FCU, Kirtland; and * Director--Ron Moorehead, senior vice president/chief financial officer, First Financial CU, Albuquerque.
Remaining on the board as directors are:
* William Jacobs, president/CEO, White Sands FCU, Las Cruces; * Ronnie Johnston, CEO, Artesia (N.M.) CU; * Andi Baum, president/CEO, Everyone’s FCU, Tucumcari ; * Scott Connely, president/CEO, Sandia Area FCU, Albuquerque; and * Larry Lujan, CEO, Northern New Mexico School Employees FCU, Sante Fe.

Interchange cap like charging for eggs not cheese in omelet CU tells paper

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WINSTON-SALEM, N.C. (6/21/11)--Marcus Schaefer, president/CEO of Truliant CU, Winston-Salem, N.C., used an example from the restaurant business to explain the credit union side of the interchange issue in a letter to the editor that appeared in the June 20 edition of the Winston-Salem Journal. There is no guarantee that merchant will pass saving to consumers under debit card interchange fee cap regulations, Schaeffer said. Financial institutions, on the other hand, will have to find ways to cover their costs. Schaefer was responding to a letter to the editor to that appeared in the June 14 issue of the Journal. The letter, from a restaurant owner, said the portion of interchange fees that restaurants include in the price of their menu items are used subsidize Wall Street profits. Merchants also have significant costs when they handle cash or checks, Schaefer noted. “Debit transactions allow them to accept cards issued by any bank or credit union without risk and with immediate receipt of funds,” Schaeffer wrote. “They agree to that by voluntarily signing contracts with credit card processors.” Schaeffer used a restaurant metaphor to illustrate his point. “Asking other businesses, including community banks and credit unions, to eat the costs of fraud, issuing cards, etc., would be akin to [a restaurant] being able to charge for the eggs in the Monterrey omelet but not for the turkey, pepper-jack cheese, black olives, salsa, the service, etc.” he wrote. Now that a legislative solution to the interchange implementation issue is off the table, CUNA President/CEO Bill Cheney said that credit unions are focusing on the legal and regulatory systems to challenge the pending debit interchange fee cap. CUNA has developed a list of 13 specific points senators should be asked to make to the Fed. They include asking the Fed to require the card networks to report to it that they have developed a two-tiered system providing higher fee income for small issuers than the board allows for large issuers.

ACUC opens up with heroes adventure

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SAN ANTONIO (6/20/11)--It may have been 100 degrees outside, but inside the opening General Session of America’s Credit Union Conference (ACUC) & Expo in San Antonio Sunday, attendees were treated to lessons about breaking boundaries while mountain climbing in frigid temperatures. Those lessons can be applied by credit unions during the daily course of business.
Click for slide show Comedian and Emcee Greg Schwem gets things rolling along in introducing Credit Union Magazine’s Credit Union Hero Award recipient at the Opening General Session at the Credit Union National Association America’s Credit Union Conference & Expo in San Antonio Sunday. The conference runs through Wednesday. (CUNA photo)
The ACUC is presented by the Credit Union National Association (CUNA) in San Antonio through Wednesday. Its theme is Big Time. Big Ideas. Big Opportunities. Standing at the top of a mountain isn’t the important thing, but it’s the journey and its lessons and what you do with them that are, said opening keynote speaker Alison Levin, who has climbed the highest peaks atop seven continents and skied to the North and South Poles. Levin drew parallels between her mountain climbing experiences and her experience in the fast-paced business world. Using slides from her climbs of the world’s tallest mountains, she shared these lessons:
* When the going gets tough and you have no choice, stop stressing the little things and get the job done. * Ask the right questions. If someone tells you “no” or says a job is impossible, keep asking the question until you get a “yes.” It is easier to say no than to help you find a solution. * Don’t let fear keep you from doing what you want to do. When initially presented with the opportunity to lead the first American Women’s Everest Expedition, she turned it down at first, thinking it would be too challenging. “But if I didn’t step up and try, I wouldn’t find out if I could do it.” * Pick your team well. Recruiting mistakes can be costly. * When faced with an overwhelming task, break it down into small increments. The entire 29,000-foot climb up Mount Everest seemed daunting, so she broke the task into getting to Base Camp, then from Base Camp to Camp 1 and then to Camp 2. * You can go backwards to get where you want to be. The climbers had to acclimate their bodies gradually to each stage of the climb by going up to the first camp, and then back down, and repeating that process for days, each day going farther to the next camp. * Fear is OK. Fear is normal. But complacency can kill you. Be prepared to react to an environment as it is moving. * It is critical to build relationships. Before ascending a mountain, she gets to know people outside her team, because their help may be needed if there is trouble. In a life or death situation, “I want people to feel obligated to help us.’ * No matter how good or prepared you are, tragedy can either blow up your team or every one pulls together. * Be prudent about the risks you take. You have a responsibility to your team. * Take action based on the situation at the time, not on your plan. Plan less, execute more. * Use your judgment. Her team was almost to the summit of Everest when a storm hit and the team had to turn back. “Turning around and walking away is harder than continuing on when conditions aren’t perfect,” Levine said.
Also at the opening, Credit Union Magazine’s 2011 Credit Union Hero Award was presented to Maurice Smith, president/CEO of Local Government FCU, Raleigh, N.C., by CUNA President/CEO Bill Cheney. Smith, who joined the staff in 1992, has been president since 1999. During that time membership has grown to more than 200,000 members from 63,000, and assets have increased to $1.1 billion from $217 million. During the economic downturn, his credit union developed innovative programs to help members through tough times, including an unemployment protection program, a subprime direct mailing effort and mortgage modifications. Smith told the audience the award is “bittersweet. I had hoped even though it was statistically unlikely that there would be a four-way tie. I don’t feel any more deserving (than the others). Each and every one of you have a story about what you’re doing for members. This gives us an opportunity to tell our stories.”

Latino forum touts ways to engage Hispanics

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SAN ANTONIO (6/20/11)--Many credit unions are considering Hispanic outreach as part of their membership growth strategy, but several barriers have kept them from engaging fully with programs that are effective, attendees were told at the Latino Membership Growth Forum, Sunday’s pre-conference workshop at the America’s Credit Union Conference (ACUC) & Expo. The ACUC is presented by the Credit Union National Association (CUNA) in San Antonio through Wednesday. The event’s emcee, Warren Morrow, president/CEO of Coopera, an Iowa-based consulting firm specializing in Hispanic outreach, noted that “at the end of the day, it all comes down to someone feeling
Click to view larger image The Hispanic market is the largest, fastest-growing, youngest, and most-underserved , said Warren Morrow, president of Iowa-based Coopera, a Hispanic outreach consulting firm, who provided statistics on Coopera’s research during Sunday’s Latino Membership Growth Forum, held before Sunday’s kickoff of America’s Credit Union Conference & Exposition, being presented until Wednesday by the Credit Union National Association.
Click to view larger image Texas Credit Union League President/CEO Dick Ensweiler discussed the history of the league’s Juntos Avanzamos (“Together We Advance”) program for credit unions designated as meeting the needs of Hispanic members during Sunday’s Latino Membership Growth Forum. The forum was a preconference workshop before the beginning of America’s Credit Union Conference & Exposition, being presented until Wednesday by the Credit Union National Association (CUNA).
Click to view larger image A panel of credit unions that serve Hispanics outlined their programs. Gary Williams, CEO of Unity One CU, Fort Worth, Texas; Arna Reynolds, president/CEO, Amarillo (Texas) Community CU; and Eve Hernandez, senior vice president of marketing and business development for River City FCU, San Antonio, each provided advice on their strategies and challenges.
like they were treated with dignity. You are here. You want to serve these members better. The Hispanic market is the largest, fastest-growing, youngest and most underserved population.” “Credit unions have a bigger potential membership population in the Hispanic market, but they weren’t really sure what to do,” said Dick Ensweiler, president/CEO of the Texas Credit Union League who also chaired CUNA’s membership growth task force, which found membership growth was flat. He outlined the history of the league’s Juntos Avanzamos (“Together We Advance”) program for credit unions designated as meeting the needs of Hispanic members. In Texas, which has a high Hispanic population, 29.4% of credit unions surveyed by the league have no plans for serving the Hispanic market, said Linda Manon-Webb, vice president of public relations at the league. She noted three roadblocks:
* The perception that it is too expensive to reach or service the Hispanic market or that return on investment would be low; * The perception that is too expensive to educate the market about the credit union and its benefits; and; * Credit unions do not understand the market well enough.
Manon-Webb outlined statistics from Texas credit unions about their service and noted that the credit union system needs to provide more tools so credit unions are more confident about their credit unions’ ability to serve the Hispanic market. She noted the Juntos Avanzamos program in Texas and the Hispanic Opportunity Navigator offered by Coopera work with credit unions. Jill Tomlinson, senior vice president of association services at CUNA, told the group, “ CUNA has learned it is really good at curriculum development, outreach and communications to credit unions and advocacy, but there were gaps that its partnership with Coopera has filled. Now we can leverage each other’s strengths. Hispanic membership growth has such opportunity for credit unions, she said. A panel of credit unions that serve Hispanics outlined their programs. Gary Williams, CEO of Unity One CU, Fort Worth, Texas; Arna Reynolds, president/CEO, Amarillo (Texas) Community CU; and Eve Hernandez, senior vice president of marketing and business development for River City FCU, San Antonio, each provided advice on their strategies and challenges. Williams noted that when his credit union considered expanding from a predominantly Anglo credit union serving Anglo members to an area where 85% of residents are Latino, “there was nothing to guide us so we were literally starting from scratch.”
* Understand the market. Unity One CU spent two years in market research and sought advice from another credit union already serving the market. * Educate your staff, especially if it is primarily Anglo. * Build a presence in the community. * Hire bilingual staff. * Create a Hispanic advisory board. * Have a physical location in the Hispanic community. “If you don’t have a physical presence, you won’t succeed. We bought a Burger King and consulted with an architect to bring details of the Hispanic culture for the feel of home.” * Build trust by becoming heavily involved in community activities.
Williams also addressed difficulties including:
* Breaking Hispanics’ “chain of dependence on non-traditional service; * Serving members who have difficulty qualifying for loans; * Addressing compliance issues related to matricula consular cards and fake IDs; and * Weathering today’s current debate on immigration.
Arna Reynolds noted that 40% of Amarillo Community’s board is second generation Hispanic. She suggested hiring and recruiting staff from the Hispanic population and using their knowledge of that culture. The credit union became a Juntos Avanzamos credit union in 2000 and the Hispanic population is just starting to be more aware of it. Make a big deal about serving the Hispanic market. “We raised the flag but did not capitalize on it.” She also noted that she believed the credit union was progressive in its service to Hispanics until it took the Hispanic Opportunity Navigator. Awareness doesn’t happen overnight, she said. Eve Hernandez discussed what it is like being on the underserved end, noting her personal experience of not being able to get accounts, even though she worked for the city. “I tried to open bank accounts but was treated like scum …being unbanked is very expensive, in terms of time.” She said the Hispanic community is hugely diverse, and that CUNA’s Environmental Scan has lots of information about Hispanics and the marketing potential. The credit union offers a number of programs that can benefit this market, including financial literacy, special savings and loan programs, and help with tax refunds. Morrow concluded the event by debunking common myths and urging credit unions to make their efforts more culturally aware. They should avoid providing literal translations of English into Spanish in their marketing materials. Make sure it's culturally relevant, he concluded.

Justice Dept. seeks court OK in card antitrust settlement

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NEW YORK (6/20/11)--The Justice Department last week asked a federal court in Brooklyn, N.Y., to approve a settlement with Visa Inc. and MasterCard Inc. in an antitrust suit that alleged the card industry illegally forced merchants to accept certain cards that carried higher interchange fees. The filing Tuesday has set off the latest debate about how interchange fee restrictions will impact smaller card issuers such as credit unions and community banks. The proposed Federal Reserve debit card fees interchange rule prohibits retailers from discriminating against debit cards issued by small financial institutions, which are exempt from the proposed 12-cent fee caps required of large banks. Although the settlement, which was reached last year, pertains to credit cards, the issue can apply to interchange of debit cards said several analysts. It would bar the card companies from restricting merchants from steering transactions to lower-cost, plain vanilla cards with no rewards or points programs (The Wall Street Journal June 14). Under the settlement, merchants could offer discounts, rebates and other incentives to attract customers to use cards with lower merchant fees--something that could impact smaller card issuers. Retailers complained they can't distinguish which cards carry higher interchange fees on sight. However, the Justice Department said it is working with the card companies to offer an electronic means to differentiate among card types. In fact, retailers already can obtain information to help them calculate what they would pay for processing the card transaction (American Banker June 17). Visa has offered a Product Eligibility Inquiry Service since 2006, which allows a merchant to swipe a credit card to request information about the card type and the interchange rates charged. MasterCard indicated in its filings in the lawsuit that it plans to offer a new Product Validation service in August. Retailers could use the information to offer discounts based on the type of card used. Although the settlement applies to credit cards, Framingham, Mass.-based IDC Financial Insights told the American Banker that the cost-vetting services could be troubling for small banks if the payment networks make them available for debit cards. The case "legitimizes some of the concerns of community banks [and credit unions]" and some of the practices may not benefit smaller issuers, said IDC. Credit unions and community banks have said they would be at a disadvantage under the Fed's proposed debit fee interchange rule mandated in the Dodd-Frank Act. They believe merchants will discriminate against small banks' debit cards, which may cost more than large banks' cards at the point of sale. Aaron McPherson, practice director with IDC Financial Insights, indicated the smaller institutions might have a point regarding the "inadequacy of the exemption to protect their interchange revenues." Merchants could label rewards cards, which may cost more for them to accept, and offer a discount to consumers who change their payment method, the article said. Another civil antitrust suit was filed against American Express Co. after it refused to join the Visa/MasterCard settlement agreement. AmEx is fighting the suit, saying the settlement hands Visa and MasterCard more market power because it would permit merchants to direct customers away from AmEx, which typically charges merchants higher fees. The settlement filing comes just after the Senate last week narrowly defeated a proposal to delay implementation of the Federal Reserve's new rules capping debit interchange fees. The Credit Union National Association (CUNA) and other groups supported the delay, saying that the impact on smaller institutions such as credit unions and on consumers should be studied first. CUNA is continuing to press the Fed to minimize the cap's impact on credit unions.

CU System briefs (06/17/2011)

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* PINEHURST, N.C. (6/20/11)--U.S. Rep. Larry Kissell (D-N.C.) received the Credit Union Advocate Award from the North Carolina
Click to view larger image Click for larger view
Credit Union League during a Governmental Affairs Forum at the league's annual meeting June 13. The new award honors state and federal legislators who have demonstrated a clear, consistent understanding and appreciation of credit unions; willingly publicly and strongly support credit unions; and seek out credit union perspectives when considering proposed legislation. "As we work to increase access to capital for our families and small businesses, credit unions play such an important role in the process," Kissell said. "Many of my constituents rely on [credit unions] for their day-to-day needs, whether it be access to savings and checking accounts or loans. I'm honored to have received this award and will continue to do all I can to stand up for credit unions, their members and employees," he added. He said he didn't go to Washington, D.C., intending to be a credit union advocate, but "the positions you take represent common sense." The league's Governmental Affairs Committee also selected U.S. Rep. Virginia Foxx (R-N.C.), who was unavailable and will receive her award later this summer, said the league. Pictured are, from left: Dan Schline, league senior vice president of association services; Kissell; and league President/CEO John Radebaugh. (Photo provided by the North Carolina Credit Union League) … * ALBANY, N.Y. (6/20/11)--The CUNA Mutual Group Golf Tournament at
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Lake Placid Club Mountain Course raised more than $26,000 for the New York Credit Union Foundation. Roughly 110 attended from across the state. "This is the most money we have ever raised from the annual tournament," said Mike Vadala, president/CEO of The Summit FCU, Rochester, N.Y., and event committee co-chair. Chris Guild from CMG served as co-chairman. Pictured are the winning foursome from Dannemora FCU, Plattsburgh: from left, Matthew Barbell, Tyler Smith, Nancy Drolette and Matt Davis. Second place went to a foursome with players from Albany Firemen's FCU, Multi-Bank Securities and Olean Area FCU. Third place represented School Systems FCU and CUC Mortgage Corp. (Photo provided by the New York Credit Union Foundation) …

TMG paper offers seven tips to change debit program

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DES MOINES, Iowa (6/20/11)--A new TMG white paper shares seven ways financial institutions can encourage debit cardholders to use their cards more often as credit unions and banks brace for a reduction in interchange income. Community-based financial institutions should avoid a “sky is falling” mentality in the current debit interchange climate, cautioned Aris Jerahian, TMG vice president of client relations, in “Bracing for Durbin--Seven Small, Impactful Ways Your FI Can Increase Interchange.” Instead, credit unions and community banks should focus on taking steps to increase debit transactions--and therefore--interchange revenue, Jerahian writes. “If your financial institution has found itself questioning the future of debit or giving into the temptation to reinvent your debit program in a knee-jerk fashion, stop,” Jerahian wrote. “Debit is--and will continue to be--a very strong payment method and revenue-generating offering.” A sampling of the insights offered by Jerahian:
* Market to young adults. More than half of adults age 18 to 34 consider debit to be the best overall payment method, according to Visa. * Step up fraud prevention. Members are more likely to reach for the card with the better security features. * Keep debit cardholders moving with technology. It’s one thing to have debit-card holders download your mobile app; it’s another to have them actually use it. * Get personal. The ability to add photos and graphics on cards is a differentiator for financial institutions. * Make their debit choice rewarding. Debit rewards programs are catching up with credit rewards. Hint: Consumers like cash. * Re-examine the free in free checking. While consumers don’t like maintenance fees, they are surprisingly accepting of minimum balance requirements. Nearly 60% of those surveyed by ACTON Market Intelligence said they would comply with new balance requirements. * Cut costs. Converting members away from paper statements is one way to cut costs.
TMG is a wholly-owned subsidiary of the Affiliates Management Co., which is owned by Iowa credit unions and their members.

Thursdays MBL hearing had wide media reach

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WASHINGTON (6/20/11)--Credit union testimony in favor of raising the member business lending (MBL) cap Thursday before the Senate Banking Committee drew coverage from a wide range of media, including Dow Jones Newswires, Marketplace radio and American Banker. Among those testifying were Bill Cheney, Credit Union National Association (CUNA) president/CEO, and Debbie Matz, National Credit Union Administration (NCUA) chairman. Raising the “artificially low” credit union MBL cap, which stands at 12.25% of assets, would increase the safety and soundness of credit unions by helping them diversify their portfolios and reducing risk concentrations, Matz said during testimony before the committee (News Now June 17). The NCUA chairman testified before a committee hearing on S. 509, a bill that would increase the credit union member business lending cap to 27.5% of assets. Cheney and other credit union and bank representatives also testified during the hearing. The credit union industry has more money to lend to businesses, Cheney told the committee Dow Jones Newswires June 16). “Failure to expand the credit union MBL cap would literally leave money on the table that could be loaned to small business,” he added. The time to act is now, John Magill, CUNA senior vice president of legislative affairs, said to the committee (Marketplace radio June 16). “With high unemployment, the need for small-business lending, we think the time is absolutely right for this,” he said. “But small-business loans can be risky. Think about how many restaurants you’ve seen fail.” If the bill passed, it would not only benefit credit unions, more importantly it would help small businesses in the U.S, Michael Lussier, president/CEO of Webster First FCU in Worcester, Mass., and chairman of the National Association of Federal Credit Unions, told the committee (American Banker June 17). CUNA and credit unions are urging Congress to increase credit unions’ MBL cap. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

B of A invests 10M in federations CDIP

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NEW YORK (6/20/11)--Bank of America (BofA) has committed $10 million for deposits in low-income designated community development credit unions (CDCUs) nationwide, the National Federation of Community Development Credit Unions announced Thursday. BofA’s commitment is the largest private-sector investment in the history of the community development credit union (CDCU) movement, the federation said. “Our commitment supports the valuable work and services that community development credit unions provide to millions of low-income consumers,” said Dan Letendre, senior vice president at Bank of America. “Now more than ever, these credit unions fill a gap in providing financial services in underserved communities” The funds will be placed in the federation’s Community Development Investment Program for deposits in credit unions to provide financial support for lending and balance sheet management, with a primary focus on markets served by the bank. Bank of America is the nation's largest investor in Community Development Financial Institutions (CDFIs), including community development loan funds as well as community development banks and credit unions, with more than $1 billion invested with 120 CDFIs in 37 states, according to the federation. The federation has a network of more than 237 CDCUs providing credit, savings, transaction services and financial education to roughly 1.7 million residents of low-income urban and rural communities across 44 states and the District of Columbia.

WOCCU extends WYCUP scholarship deadline

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MADISON, Wis. (6/20/11)--The deadline for World Council of Credit Unions’ (WOCCU) Young Credit Union People (WYCUP) scholarship program has been extended to Wednesday. All winners qualify for an all-expense-paid trip to WOCCU's 2012 World Credit Union Conference in Gdañsk, Poland. To be eligible for one of five WYCUP scholarships, nominees must:
* Submit a completed nomination form with supporting materials by Wednesday; * Be 35 years of age or younger as of Jan. 1, 2011; and * Attend WOCCU’s 2011 World Credit Union Conference in Glasgow, Scotland, July 24-27, when winners will be announced.
The WYCUP scholarship program seeks young individuals who have made significant contributions to the development of their credit unions, or regional or national credit union systems and have demonstrated the potential to employ their unique talents at the international level. For more information, use the link, or contact Liliana Tangwall at ltangwall@woccu.org or 608-395-2043.

Ford Foundation invests 2M for CDCUs secondary capital

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HOLLYWOOD, Calif. (6/20/11)--The National Federation of Community Development Credit Unions Friday announced a $2-million investment from the Ford Foundation for making secondary-capital investments in community development credit unions (CDCUs). “The Ford Foundation is our largest foundation investor, with a history of supporting CDCUs and the federation going back more than 20 years,” said federation President/CEO Clifford N. Rosenthal. “It was their support in 1996 that enabled us to pioneer and implement our secondary-capital program, which was totally new in the credit union movement at that time. Over the years, the federation’s Community Development Investment Program has made nearly $12 million in secondary-capital investments in low-income credit unions from Vermont to Hawaii.” Secondary capital is long-term, subordinated debt that acts as regulatory net worth, subject to certain conditions. It is currently available exclusively to low-income credit unions. “Secondary capital is crucial to the growth of credit unions, because it enables them to meet mandatory net-worth standards,” Rosenthal explained. “Credit unions cannot add deposits unless they remain in compliance with these standards, and every single additional dollar of secondary capital enables a credit union to add more than $12 in deposits while remaining compliant with their regulator. Without this capital, most low-income credit unions would find it difficult, if not impossible, to grow.” The federation and the CDCU movement achieved an enormous success in 2010 when the Treasury Department made $69.9 million in secondary-capital investments in 48 credit unions under its Community Development Capital Initiative (CDCI), the federation said. “CDCI was an important vindication of the financial innovation that the Ford Foundation’s support made possible for our movement some 15 years ago,” Rosenthal said. During the past two years, credit unions and their regulators have also called for legislation to allow credit unions of all types to raise supplemental or secondary capital, Rosenthal said. The Credit Union National Association (CUNA) strongly supports credit union alternative capital authority and has steadily worked to get the Obama administration on board with the idea of alternative sources of capital for credit unions. In part, CUNA has reinforced to key contacts within the U.S. Treasury Department the importance of credit union alternative capital authority.

CUNA Mutual board OKs new mutual ownership

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MADISON, Wis. (6/20/11)--CUNA Mutual Insurance Society (CMIS) will be converted from a mutual insurance company structure to a mutual holding company (MHC) structure, under a plan approved by the CUNA Mutual Group’s board at its June meeting. In the mutual holding company structure, CUNA Mutual will continue to be mutually owned with policyholders having full ownership of the MHC. “The mutual holding company structure significantly improves our ability to access capital and to sustain the responsible growth we need without requiring that we move away from a mutual ownership structure and culture,” said CUNA Mutual President/CEO Jeff Post. The CUNA Mutual board indicated it believes in a mutual ownership structure, but sees the mutual holding company structure providing more power to implement the company’s strategy and improve its financial strength and long-term growth. The mutual holding company plan must be approved by a two-thirds majority of a policyholder vote. The plan also requires regulatory approval.

Committee passes Jersey municipal deposit bill

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TRENTON, N.J. (6/17/11)--A state legislative committee in New Jersey Thursday passed a bill that would allow municipalities to use credit unions as depositories, according to the New Jersey Credit Union League. The New Jersey Assembly Financial Institutions and Insurance Committee passed the Governmental Unit Depository Act (GUDPA) Reform legislation (A-1597) by a 6-2 vote. The state's credit unions have lobbied for the measure since last year. Fifteen credit union representatives attended to support the legislation through testimony and "Support Slips." Also attending were representatives from the New Jersey Bankers Association and banks, who oppose the measure. "This is another step forward for New Jersey's credit unions," said league President/CEO Paul Gentile. "We are closer to updating the arcane 40-year-old law prohibiting credit unions from participating in public deposits," he said in applauding "the support that our credit unions have shown towards making this happen." The GUDPA Reform legislation will enable counties, school boards, municipalities and other local government entities to consider credit unions as potential depositories, which will promote competition among providers of government banking services and save taxpayer dollars, the league said. Choosing to deposit funds in a credit union also increases the likelihood that taxpayer dollars will be leant back to the community, and promotes local economic development, the league added. Sponsoring the bill are Assembly Speaker Sheila Oliver (D-34), Deputy Speakers Upendra Chivukula (D-17) and John Wisnieski (D-19). The bill has 13 additional co-sponsors from both sides of the aisle. A companion bill, S-1807, sponsored by Senate President Stephen Sweeney (D-3), Senate Republican Conference Leader Bob Singer (R-30), and Deputy Majority Leader Paul Sarlo (D-36) passed the Senate last June.

TCF presents oral arguments in interchange lawsuit

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ST. LOUIS, Mo. (6/17/11)--Oral arguments were made Thursday before an appellate court in the TCF National Bank's appeal to block the Federal Reserve's implementation of proposed debit card interchange fee cap regulations. TCF National Bank is seeking a preliminary injunction before the U.S. Court of Appeals for the Eighth District. The U.S. District Court for the District of South Dakota in Sioux Falls in April denied its motion for a preliminary injunction, but did not dismiss the case. In its oral arguments, the bank's attorney argued that both sides agreed on four points:
* Congress can regulate debit rates; * The Dodd Frank Act's amendment requires deep "Draconian" discounts and provides widespread exemptions, with about 60 banks being regulated and 15,000 issuers being exempted; * Below-cost rates and widespread exemptions are not traditional rate regulations; and * No appellate court has ever approved this form of rate regulation.
The bank's lawsuit alleged that the government cannot constitutionally write laws--such as the interchange law--that would arbitrarily affect businesses' property interests by preventing them from recovering their costs sufficiently to avoid losses on their business operations. The suit also included other constitutional arguments. During the hearing, TCF argued that the court has a choice between a "confiscatory rate doctrine" and "rational basis" doctrine. The confiscatory rate doctrine applies to the case, TCF said. The doctrine, found in public utilities cases, protects businesses from being required to charge below-cost rates that negatively impact business. The interchange statute excludes certain costs, which makes it an unusual and therefore unconstitutional regulation, said TCF. However, the Fed argued in the hearing that the "rational basis doctrine" applies. "Due process requires only that the statute be rationally related to legitimate governmental purpose," said the Fed, noting that the interchange rule amendment is responding to price fixing and anticompetitive conduct by Visa and MasterCard that produced deficiencies in the market. The Fed in its counterargument said that "there is no statutory or constitutional right to receive minimum fees" and therefore the bank has no protected interest. Nothing guarantees any minimum interchange fee or even limits the circumstances in which Visa can reduce the fee schedule, said the Fed. Debit purchases are part of a checking account and "there is no right that all of a costs associated with a broader product should be recovered." "Nothing is being taken by the government here," said the Fed, noting that a principle of "impact on the aggregate" applied, and that even though the profits of one aspect of the business is destroyed, there are considerable options for profits elsewhere. TCF noted that the statute's price regulation is arbitrary, discriminatory and unrelated to proper legislative purpose. "This discriminatory statute is against a small number of large issuers and in favor of a large number of small issuers." If the court decides on the "rational basis" test, "then this will be a brand new ball game, where nobody cares about how much harm is delivered to the person being regulated by the regulation. All they would care about is that no statute will fail the rational basis test. If you go with the traditional rate regulations, you adopt the confiscatory rate, which everyone thinks is law," said TCF. During the hearing, judges asked the attorneys about whether the suit was premature since the rule had not been finalized, and whether debit card fees could be recouped as part of a larger checking account product. They also wanted specific numbers as to what was an acceptable transaction fee. The Credit Union National Association (CUNA), the Clearing House Association LLC, American Bankers Association, Consumer Bankers Association, The Financial Services Roundtable, Independent Community Bankers of America, Midsize Bank Coalition of America, and the National Association of Federal Credit Unions filed an amicus brief in support of some of the aspects of TCF's arguments. Now that a legislative solution to the interchange implementation issue is off the table for now, CUNA President/CEO Bill Cheney said that credit unions are focusing on the legal and regulatory systems to challenge the pending debit interchange fee cap. CUNA has developed a list of 13 specific points senators should be asked to make to the Fed. They include asking the Fed to require the card networks to report to it that they have developed a two-tiered system providing higher fee income for small issuers than the board allows for large issuers.

Expanded FOMs bank fees cited in Wis. CUs growth

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MILWAUKEE (6/17/11)--Wisconsin credit union membership and deposits are on the rise, because credit unions’ fields of membership have been expanded and consumers are tired of high bank fees, according to a financial analyst’s view of a Wisconsin Department of Financial Institutions (DFI) report. There were nearly 2.2 million members of state-chartered credit unions at the end of 2010--a 1% rise from the previous year, said the state DFI (Milwaukee Journal Sentinel June 14). Also, 2010 deposits at Wisconsin’s 220 credit unions increased roughly 6% to nearly $18 billion. Nationally, deposits for the 12-month period ended in March went up 5% to $812 billion. In first quarter 2011, Wisconsin credit union deposits increased to $18.6 billion. Consumers are especially tired of bank fees, and in March, 64% of U.S. consumers surveyed said they would consider changing financial institutions if their checking account fees went up, Greg McBride, senior financial analyst for Bankrate.com told the Journal Sentinel. Also, more consumers are now aware of their eligibility for credit union membership, McBride added. To read the article, use the link.

Study CUs can tap 169B Latino unbanked market

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CHARLOTTESVILLE, VA. (6/17/11)--Credit unions and banks can capture billions of dollars in deposits by following specific steps to reach out to Latino and other unbanked households, according to a study released Thursday by the University of Virginia Darden School of Business and its Tayloe Murphy Center. The year-long study titled “Perdido En La Traducción: The Opportunity in Financial Services for Latinos” also demonstrates that persuading households to keep their money in credit unions and banks could lower the risk of robberies and raise property values, according to the study's authors--Greg Fairchild, executive director of the Tayloe Murphy Center and Darden professor, and Kulwant Rai, research director at the Tayloe Murphy Center. Nationwide, more than $169 billion is floating outside the formal banking system among unbanked households. Of that amount, $53 billion comes from unbanked Latino households. “This study gives the financial services industry, policy makers and market watchers information they can use and a real measurement of the scope of this hidden market,” Fairchild said. “At the same time, it not only represents a significant financial opportunity, but also highlights the wide-ranging benefits for communities.” The study focuses on unbanked Latino households in Virginia and North Carolina. Latinos are the fastest-growing multi-ethnic group in many states. Many of the study’s results can also be applied nationally to any unbanked household, regardless of ethnicity, background, geographic location or length or status of residence, said the authors. California, Texas, New York, Florida and Georgia are the top five states for the most money kept outside banks and credit unions by such households, according to the Federal Deposit Insurance Corp.’s list of yearly income of unbanked households by state. The study “focused on the challenges of serving Latinos and other unbanked households as well as how banks and credit unions can reach this market nationwide,” said Kulwant Rai, research director at the Tayloe Murphy Center. In Virginia, the Tayloe Murphy Center found 39,000 unbanked Latino households, with an average yearly income of $23,500. That adds up annually to nearly $917 million unbanked by Latino households. Much of that unbanked money is serviced by community grocery stores and markets, called “Las Tiendas,” said the report. Las Tiendas offer check-cashing, wire transfers and bill paying with significantly marked-up service fees. For answers on how to capture those billions in deposits and provide unbanked households more control of their finances, researchers examined a Durham, N.C.-based credit union established in 2000--the Latino Community CU (LCCU). LCCU has one of the fastest-growing memberships in the U.S. From 2000 through 2009, the number of LCCU depositors soared to 53,073 from 917 through a strategy that makes Latinos comfortable and educates them on how banking services are beneficial, said the study. Researchers found an added incentive in the credit union’s approach to banking: because of their tendency to carry cash, unbanked households, especially Latinos, are often the victims of violent robberies. “I used to carry my money and hide it in small packets at home. It wasn’t until I was robbed at gunpoint with my son at my side that I realized I needed to put my money in a safer place,” said Roberto Maya, an LCCU member since 2000. LCCU representatives made him feel welcome and spoke to him in Spanish, he said. While he was initially concerned about acquiring debt, LCCU provided financial education workshops where he learned how to obtain his first loans. LCCU “helped me understand how things work and made me feel comfortable,” Maya said. “In the last 10 years, I built my credit history, bought my first home and started a painting business.” Maya’s experience is not unique, the authors said. The Tayloe Murphy Center reviewed statistics from 1990 through 2008 that found each time LCCU opened a branch in North Carolina (in the counties of Durham, Mecklenburg, Wake, Guilford and Cumberland) the number of robberies dropped by an average of 57 per year, almost 4% in each county. The decline in crime also led to a dramatic increase in property values in those same counties. The opening of LCCU branches from 2000 through 2008 is credited with raising property values by 4%, compared with the total appreciation, or $9.8 billion.

Gov. Perdue signs Save to Win bill in N.C.

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RALEIGH, N.C. (6/17/11)--North Carolina credit union representatives Thursday joined with State Sen. Rick Gunn (R-24) and Gov. Bev Perdue as she signed the Credit Union Savings Promotion Raffle Bill into law. Before signing SB 513, Perdue spoke before the group of attendees. “We all know, and those in the House and Senate do, too, that we want people to save more money. This is an absolutely wonderful thing to do,” she said. In early 2010, the North Carolina Credit Union League started exploring launching a collaborative savings program called Save to Win among credit unions in North Carolina. With the program’s success in Michigan and after interest grew from a presentation in North Carolina in June 2010, the league set its plan for implementing Save to Win. Securing a legislative change was the first hurdle. The bill also defines a savings promotion raffle under the general statutes governing credit unions, requiring that money be deposited into a special savings account in order to win. The fundamental principle of collaboration keyed the success of Save to Win in Michigan, and will be needed for the credit unions that participate in North Carolina’s Save to Win program launching in 2012, the league said. Collaboration will enable credit unions that undertake the endeavor to join forces to offer a headline-grabbing grand prize and to share in the costs of product development, marketing, legal and administrative expenses, the league added. As Perdue signed the bill into law, allowing credit unions to implement the Save to Win program to provide a safe, fun and powerful incentive to get more families saving, she praised those who attended on the merits of such a program. “We are proud of you and I thank you,” she said. “It also shows that an organization like this, rather than competing with each other, can come together in collaboration around the common and important goal and can really make a difference.” “With the credit union movement’s historic links to thrift and savings, collaboration will provide not only operating efficiencies but a unique chance for institutions to help one another achieve their missions,” said John Radebaugh, league president/CEO. “The governor hit the nail on the head in her closing statement today.”

N. Carolina announces CU award winners

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RALEIGH, N.C. (6/17/11)--The North Carolina Credit Union League announced its statewide Dora Maxwell, Louise Herring, and Alphonse Desjardins Award winners Monday evening. An Evening with the Stars, held during the 76th Annual Meeting of the League in Pinehurst, also cast a spotlight on the Mark of Excellence and Credit Union Person of the Year Award winners.
The North Carolina Credit Union League announced its statewide Dora Maxwell, Louise Herring, and Alphonse Desjardins Award winners Monday. An Evening with the Stars, held during the 76th Annual Meeting of the League in Pinehurst, also showcased the Mark of Excellence and Credit Union Person of the Year Award winners. (Photo provided by the North Carolina Credit Union League)
The Mark of Excellence Award recognizes sustained leadership among North Carolina credit union people. Eligibility is limited to past winners of the Ronald J. Hutchins Credit Union Person of the Year Award who have at least 25 years of service in the credit union industry. Winners are:
* Dorinda Edwards, American Partners FCU, Reidsville, and * Joy Watts, Carolina Postal CU, Charlotte.
The Ronald J. Hutchins Credit Union Person of the Year Award is given to a credit union professional and volunteer to recognize their outstanding support and promotion of the credit union ideal of people helping people. Winners are:
* Mike Clayton, Champion CU, Canton (Credit Union Person); and * David Campbell, Telco CCU, Asheville (Credit Union Volunteer).
The annual Dora Maxwell Social Responsibility Award recognizes and promotes credit unions’ social responsibility efforts within the communities they serve. First-place winners are:
* Carolina Postal CU, $50 million to $100 million assets; * Members CU, Winston-Salem, $200 million to $500 million; * Marine FCU, Jacksonville, $500 million to $1 billion; * State Employees’ CU, Raleigh, more than $1 billion; and * Western Chapter, Chapter category.
Two honorable mentions in the $100 million to $200 million asset category were awarded to Latino Community CU, Durham; and Premier FCU, Greensboro. The annual Louise A. Herring Award for Philosophy in Action recognizes credit unions that, in day-to-day operations, demonstrate the credit union philosophy of “people helping people” in an extraordinary way. First-place winners are:
* Summit CU, Greensboro, $50 million to $250 million assets; and * State Employees’ CU, more than $1 billion.
The Desjardins Youth Financial Education Award recognizes leadership within the credit union movement on behalf of youth financial literacy. First-place winners are:
* American Partners FCU, Reidsville, under $50 million assets; * Latino Community CU, $50 million to $150 million; and * State Employees’ CU, more than $500 million;
Latino Community CU, in the $50 million to $150 million asset category, won the Desjardins Adult Financial Literacy Award.

CIF with NCB surpasses 10M

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ARLINGTON, Va. (6/17/11)--A collaboration between NCB FSB, a savings bank for cooperatives, and the National Credit Union Foundation (NCUF) to support the Community Investment Fund has reached $10 million in deposits. The program allows NCB customers to donate the interest earned on their deposits to the NCUF to support its national and state community impact programs. More than 60 credit unions from 21 states have participated in the deposit donation program with NCB. Unique to the NCB option is the ability for all types of organizations interested in supporting the foundation to contribute, not solely credit unions. Through the collaboration, NCB expanded upon its mission of supporting underserved communities and cooperative development, which in the past year totaled more than $374 million of capital that directly benefited low- and moderate-income communities nationwide. Interest from the deposit funds are designated for different NCUF financial literacy, cooperative education and community development programs, including REAL Solutions, CU Development Education, Biz Kid$, Financial Education Grants and CUAid. NCUF also shares the donations with state credit unions to support their local grant programs. A participant can choose from five funds to direct the contribution, including: the CIF, the Development Education Fund, International Development Fund, African-American Credit Union Coalition and the Callahan Legacy Fund.

Iowa CUs zero in on reaching Gen Y

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IOWA CITY, Iowa (6/17/11)--More than 85 credit union representatives attended the Iowa Credit Union League’s first Gen Y Summit Wednesday in Iowa City. Keynoter and facilitator Brent Dixon of the Filene Research Institute shared ideas for bundling products around life events, developing a social media strategy and offering unique products and services. “I hope the attendees took away one attainable, solid idea they can go home and execute at their credit union,” said Dixon. “It’s one thing to talk ideas all day, but it’s another to set goals and objectives and actually launch them.” Charise Flynn, chief operating officer of the social payment network Dwolla, and Jeff Russell, executive vice president of The Members Group, showcased how social payment network Dwolla works and how credit unions can integrate the tool into their strategies to reach the Gen Y market. Representatives from Affinity CU, Des Moines; Collins Community CU, Cedar Rapids; Des Moines Police Officers CU; and Linn Area Community CU, Cedar Rapids, served on a panel to share what their credit unions are doing to reach the Gen Y market. Ideas included offering a Hispanic reload card, holding focus groups to understand what their members and employees think, and how to humanizing blogs and social media efforts.

Americas CU Conference kicks off Sunday in San Antonio

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MADISON, Wis. (6/17/11)--More than 1,000 credit unions and supporters will convene Sunday at the Grand Hyatt in San Antonio, Texas, for the annual America's Credit Union Conference & Expo (ACUC), presented by the Credit Union National Association (CUNA) Sunday through Wednesday. According to Todd Spiczenski, vice president of CUNA's center for professional development, attendee demographics break down to 60% male to 40% female, and 50% credit union volunteers to 50% credit union staff. More than 320 vendors will exhibit at 153 booths at the conference. Preceding the event will be an optional pre-conference workshop, the Latino Membership Growth Forum, Sunday morning and a meeting of small credit unions at the Small Credit Union Roundtable Sunday afternoon. The conference officially kicks off with a general session at 4:30 p.m., featuring an official welcome from CUNA President/CEO Bill
Cheney as well as the presentation of Credit Union Magazine's Credit Union "Hero of the Year Award," and the opening keynote address by Alison Levine. After the general session, the Exhibit Hall will have a grand opening and reception. Levine, mountain climber and risk-taker who has survived sub-zero temperatures, hurricane-force winds, sudden avalanches and a career on Wall Street, will draw parallels between staying alive in the mountains and thriving in a fast-paced business world in her address, "Beyond Boundaries." She will focus on leadership, teamwork, overcoming odds, taking responsible risks and dealing with changing environments. Other keynote speakers include:
* CUNA's Cheney, who will deliver the State of the Credit Union Industry address in Monday's general session; * Dan Pink, author of A Whole New Mind, will speak in Monday's general session about "Drive: What the Science of Motivation Can Teach You About High Performance"; * Doug Hall, founder and CEO of Eureka! Ranch, a think tank for helping corporate leaders, will speak Tuesday morning on "Innovative Engineering: How to Innovate and Grow Your Credit Union"; * Eric Saperston, who headed up a team of travelers who interviewed more than 200 people in search of wisdom and inspiration from the famous and not so famous, will speak Tuesday afternoon about "The Journey: Lessons From America's Most Influential Leaders"; and * Dan Heath, co-founder of Thinkwell, a reinvented line of college textbooks, and author of the book, Switch: How to Change Things When Change is Hard, will speak on that topic at Wednesday morning's closing general session.
The convention also will feature, for the first time , 17 CUNA Mutual Group Discovery breakout sessions. In addition, it has several thought leader sessions lined up and will continue its exclusive Executive Series, which allows executives to network and hear from leading business authors. Watch for News Now's on-site coverage of the events, beginning Monday.

Mobile check deposits top m-feature for switching banks

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SAN DIEGO (6/16/11)--Credit unions that want to offer mobile banking features to attract new members, but are not sure which mobile features to offer, now have some guidance. Mobile check deposit ranks as the top mobile-banking feature that would prompt consumers to switch their primary financial institution, according to new research. When asked, "What are the most important features of mobile banking that would cause you to switch primary banks," 43% of consumers interested in mobile banking cited mobile check deposit, according to the study conducted by an independent Boston research firm, Mercatus LLC. Tying for second, with 28% each, were paying bills and checking account balances via mobile devices. The results were previewed last week at the Mobile Banking and Emerging Applications Summit in New Orleans, said Mitek Systems Inc., a San Diego-based provider of mobile-imaging applications using smartphone cameras for check deposits, bill payments and automated clearinghouse enrollments. Mercatus' data "show that mobile banking--with mobile check deposit as a cornerstone capability--is becoming a strategic growth engine for banks," said Mercatus Managing Partner Robert B. Hedges Jr. Mitek President/CEO James B. DeBello said the new findings reflect Mitek's growth. "Mercatus' findings dovetail with the anecdotal reports we hear every day from our technology partners and their financial institution customers about consumers' appetite for mobile RDC (remote deposit capture)," he said. "Given the huge popularity of Android and Apple devices, we believe that banks, credit unions and other financial institutions that don't offer mobile banking with check deposit risk losing customers to those that do offer mobile RDC." Mercatus reported strong interest among surveyed consumers of all ages who said they were "very likely" or "likely" to adopt mobile RDC if it were offered by their financial institution. It found that adoption is gaining traction among consumers who already have access to the technology. Also, demand for mobile RDC is strong enough that an increasing percentage of consumers are willing to pay for the service, said the research firm. Other findings:
* Fifty percent of consumers surveyed who switched banks said mobile played a role in the decision. * Mobile is increasingly a reason consumers leave their banks to move to another that offers mobile capabilities. * Many consumers today do not realize their financial institutions offer mobile-banking capabilities, which means marketing and promotion of mobile offerings are critical to building member/customer awareness.

80 Irish CUs trying to avoid closure

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DUBLIN, Ire. (6/16/11)--An insurer of credit unions in Ireland warned that the movement, while a bright spot in the country's financial system, could face a number of closures unless changes are made. Paul Walsh, chief executive of the insurer, CUNA Mutual Europe, described Irish credit unions as the "Cinderella" of financial services and said the movement is the only part of the country's financial system still intact. He predicted they will have a bright future but only if they change their current practices and collaborate on cost cutting and improving efficiencies (Irish Times June 15). Walsh noted that if credit unions fail to seize the opportunity, many credit union closures would occur. He made the comments in a speech at "The Future Business Model for Credit Unions" conference hosted by CUNA Mutual Group Europe. Earlier this month, the credit union regulator, Registrar James O'Brien, indicated his agency would lead a wave of mergers across the sector in a move that could reduce the country's more than 400 credit unions to roughly half over time. O'Brien said in a speech in Kilkenny June 1, that as many as 80 credit union branches could close because of poor management and lack of financial oversight by boards and supervisory committees. A study by consultants Grant Thornton concluded that Ireland has too many credit unions functioning at an inappropriately high-risk level, said O'Brien. He suggested that weaker credit unions could merge with stronger ones. That would mean an area could still be served by a credit union office operating as a branch of a larger credit union. Another speaker at Wednesday's conference, John Lass, senior vice president of corporate strategy at CUNA Mutual, told attendees that Irish credit unions have the ability to achieve sustainable growth of 7.5% per annum. The challenge and opportunity for credit unions is to balance the three keys to sustainability: governance, financial structure and value proposition, Lass told the credit unions.

Oregon modernized CU Act signed into law

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BEAVERTON, Ore. (6/16/11)--Oregon Gov. John Kitzhaber Tuesday signed into law the Northwest Credit Union Association’s (NWCUA) SB 177--Oregon’s Credit Union Act update bill. In addition to amending board meeting requirements to permit greater scheduling flexibility, the bill exempts standard mortgage loans to directors or senior managers from the requirement for board approval of loans, and adds additional safeguards regarding loans to directors and senior managers among other things. “This is a great victory for Oregon credit unions,” said Association President Troy Stang. “It is essential that the charter keep pace with the changing times, and we are thrilled the Oregon legislature and governor agreed.” Every two years the Oregon association meets with the legislative committee to identify areas of the Credit Union Act that needs to improve, said Stacy Augustine, senior vice president of NWCUA, who added that two parts of the bill stand out. The first, loans to credit union officials, stems from the old Oregon law that specified a board had to approve any loan of $100,000 or more to management staff from the vice president level on up. The modification "would exempt loans under $400,000 that are secured by liens from having to be approved by the board if there are good loan policies in place," Augustine told News Now. The second is credit unions' increased ability to invest in credit union service organizations (CUSOs). "Credit unions were limited to investing 1% of assets in a CUSO and loaning 1% of assets to CUSO. Now they can invest and loan up to 5% of assets cumulatively. For example they could invest 2% and loan 3%, or mix and match. That's a tremendous change, and gives credit unions more flexibility," said Augustine. Key features of SB 177 include:
* Amends board meeting requirements to permit greater scheduling flexibility; * Changes the statutory title of “Credit Manager” to “Chief Credit Officer”; * Exempts standard mortgage loans to directors or senior managers from the requirement for board approval of loans, and adds additional safeguards regarding loans to directors and senior managers; * Increases the limit for loans to, and investments in credit union service organizations from 2% of assets to 5% percent of assets; * Clarifies member voting requirements for credit union mergers, to maximize member participation; and * Outlines procedures allowing members to communicate their support or opposition to a credit union merger.
The credit union modernization bill will go into effect one year after signing, in June 2012. “In a legislative year with a historically split House, many new legislators, and the daunting task of balancing a tough budget, passing this bill is an impressive win,” added Stang. Augustine noted that in addition to those factors mentioned by Stang, banks also opposed the banks. "The bill surpassed some real odds. It's a real win" for credit unions. The NWCUA will now work with the Department of Consumer and Business Services to develop any necessary interpretive rules relating to the bill.

Debit card fraud hits 14 Cleveland CUs banks

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CLEVELAND, Ohio (6/16/11)--At least 14 credit unions and banks in Northeast Ohio are monitoring a wave of debit card frauds from breaches that were discovered last month. Police in several communities say the incidents are all related and the impact is widening. More than six credit unions and eight banks in the Cleveland area have received reports from numerous members and customers about fraudulent transactions, according to a review by the Cleveland Plain Dealer (June 14) of dozens of area police reports. Among the credit unions named who reported the frauds are:
* Century FCU, Cleveland, $313 million assets; * Ohio's First Class CU, Cleveland $34 million assets; * Firefighters Community CU, Cleveland, $177 million assets; * PSE CU, Parma, $106 million; and * Best Reward CU, Brook Park, $96 million.
Banks whose customers were hit included: Key, Dollar Bank, Fifth Third, PNC, Huntington, Charter One, Ohio Savings and FirstMerit. One credit union said that about 200 members experienced fraudulent transactions made on their debit cards. The fraud typically involves account data duplicated on fake cards and used in person with a forged signature--not a personal identification number (PIN)--or for online or telephone purchases. Most appeared to be in person. The victims' cards have not been out of their possession. Police have pieced together other details about the frauds:
* They occur mostly on weekends--especially Memorial Day weekend. Police say the timing may be intentional because financial institutions' fraud departments may not have as many staff working weekends and consumers may be more lax in checking accounts if they are busy or out of town. * Purchases are made at popular everyday retailers like Walmart, Giant Eagle or CVS, so the consumer will be less likely to notice the transaction at a place where he shops. * The thieves "ping" the accounts with small charges of $1 or less to test whether the number is active. * Most of the spending sprees total $600 to $1,700, with four to eight transactions. It's not clear whether thieves stop because the account is empty or because it is frozen to prevent more fraudulent transactions. * Thieves visit different locations of the same store brand in one day. For example, on May 13, a thief visited Acme stores in several cities, making purchases of $172 to $353.

Bike-up lane opens for one day at CU

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FORT COLLINS, Colo. (6/16/11)--Public Service CU will offer a dedicated bike-up lane at its Meldrun branch on Bike to Work Day, June 22. This is the third year that PSCU has set aside one lane of a drive-up area for bicyclists. Bryan Kallenberger, PSCU vice president of human resources, said Fort Collins offers a great environment for bikers. “Bicycling is such an integral part of Northern Colorado, and it offers so many benefits to businesses and employees,” Kallenberger said. For the seventh time, PSCU will also host a breakfast station on as part of Bike to Work Day events. Former Colorado State University football coach Sonny Lubick will greet riders, and breakfast will be provided by the credit union and its cohosts, RE/MAX Advanced, Columbine Health Systems and Cornerstone Mortgage.

CU deflects SBA loan paperwork stigma

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BRIDGEWATER, N.J. (6/16/11)--A loan officer with a New Jersey credit union is trying to offset the stigma about what some say is overwhelming, time-consuming paperwork required to obtain a U.S. Small Business Administration (SBA) loan. SBA loans only require a few more documents than a conventional business loan, said Phillippe Ferreira, commercial loan officer with the $372 million-asset Financial Resources CU in Bridgewater N.J., at a presentation Wednesday to a business group in Somerville, N.J. (Home News Tribune June 8). Another misconception is that SBA loans are only for start-up businesses, Ferreira told the newspaper earlier this month. The money obtained from an SBA loan can give an established business owner the option to hire, to expand or to obtain a line of credit, he added. The SBA can provide capital that small businesses might not otherwise obtain and will provide money for down payments on business properties for as little as 10% down---which is less than conventional financing, Ferreira said. The SBA also offers longer repayment terms, he added. The Credit Union National Association has worked with the SBA to discuss credit union concerns regarding what some have found to be a cumbersome process to qualify to be an SBA lender.

PCUA board OKs new dues structure

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HARRISBURG, Pa. (6/16/11)--The Pennsylvania Credit Union Association (PCUA) board of directors has voted on a new dues structure for 2012 that will not include a mandatory iBelong assessment. The iBelong campaign is a cooperative campaign designed to build awareness of credit unions, and to assist consumers in helping them find a credit union that’s right for them. The campaign started running in 2007 with support from credit unions affiliated with PCUA. It was subsequently licensed by other state leagues, including the Illinois Credit Union League, the Mississippi Credit Union Association and the Association of Vermont Credit Unions. The decision was based on a recommendation given from a Governance and Dues Task Force made up of 14 leaders in Pennsylvania’s credit union movement and chaired by Board member Bill Lavage, CEO of Service 1st FCU, Danville (Life is A Highway June 15). The new dues structure will be based on the square root of a credit union’s assets times a factor of 1.1165. The factor will be in effect for 2012 and is subject to change in the future. A letter explaining the new dues structure was sent Wednesday to all Pennsylvania credit union CEOs. For 2012, smaller credit unions (less than $10 million in assets) will see no increase or a small decrease in dues. Larger credit unions, for the most part, will see an increase in dues with the largest increase going to the largest credit unions. With the elimination of mandatory iBelong assessments, credit unions will be required to pay less to the association in 2012 than they did in 2011, PCUA said. “The iBelong credit union awareness campaign has been extremely successful, thanks to Michael Kaczenski, who chaired the Advocacy/Marketing Task Force and the Steering Committee and, of course, committee members for their support and efforts,” said Jim McCormack, PCUA president/CEO. PCUA Board Chairman Kaczenski will appoint a new task force to look at how iBelong can continue to be relevant without the financial support of the mandatory assessment.

CUs Top 10 list a win for shared branching

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HARRISBURG, Pa. (6/16/11)--Service 1st FCU has won the Pennsylvania Credit Union Service Centers (PaCUSC) “Share It and Win” contest for credit unions with its list of reasons it offers share branching.
Service 1st FCU won the Pennsylvania Credit Union Service Centers (PaCUSC) “Share It and Win” contest for its “Top Ten Reasons We Offer Shared Branching to Members.” Sandy Shenk (center), PaCUSC state coordinator, presents a $1,000 prize check to Service 1st FCU CEO Bill Lavage and Executive Vice President Linda Brown. (Photo provided by Pennsylvania Credit Union Association)
The contest was open to the 45 Pennsylvania credit unions that offer shared branching to their members, said the Pennsylvania Credit Union Association (Life is a Highway). Participants were asked to submit David Letterman-style “Top Ten Reasons We Offer Shared Branching to Members.” Entries were judged on creativity, uniqueness, humor, and overall promotional effectiveness. Service 1st FCU’s winning Top Ten list included these reasons: 10. Wow, Service 1st branch locations just went from eight to 4,000 nationwide! 9. I get the same friendly service as I do at Service 1st FCU, and they won’t try to recruit me as a member. 8. Kiosks are like vending machines, except they dispense money and take deposits. 7. The swirl [logo] means our members are just a few steps away from their money. 6. Even your GPS can display shared branching locations. 5. Government issued identification, the name of your credit union and your account number--Three things you wouldn’t give a fraudster but would share at a shared branching location. 4. Banks can’t compete with this cooperative initiative. 3. Shared branching--there’s even an app for that! 2. Thank goodness there are 17 shared branching locations within 10 miles of Las Vegas! 1. Just one more reason to switch to a credit union! The panel of judges included marketing professionals from the Maine Credit Union League, Target Media and CO-OP Financial Services. Credit unions were not identified during the judging process. Service 1st FCU received a $1,000 prize from PaCUSC, Inc. and will contribute the prize to the Animal Resource Center in Bloomsburg, Pa. The Animal Resource Center provides temporary shelter for homeless, abused and neglected domestic animals. A “Share It and Win” contest for members of participating credit unions will run through July and August. Members will have the opportunity to win a $100 Visa gift card from their credit union each week.

Liquidity supervision top global reg agenda

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ALEXANDRIA, Va. (6/16/11)--Regulatory trends affecting the global credit union movement, especially issues involving capital liquidity and supervisory guidelines, topped the agenda for last week’s fifth annual meeting of the International Credit Union Regulators’ Network (ICURN), an independent organization that World Council of Credit Unions (WOCCU) helps coordinate.
Click to view larger image More than 50 credit union and financial cooperative regulators from 21 countries gathered at National Credit Union Administration headquarters last week for the fifth annual International Credit Union Regulators’ Network meeting in Alexandria, Va.
Click to view larger image The International Credit Union Regulators (ICURN) meetings illustrate similarities among regulatory challenges worldwide, said Gigi Hyland, National Credit Union Administration board member (second from left), joined by participants (from left) Peter Gakunu, Kenya; Dave Grace, World Council of Credit Unions senior vice president of association services, who acts as ICURN secretary; and Carilus Ademba, Kenya. (Photos by Tisara/Halperson)
The three-day event, co-hosted this year by the National Credit Union Administration (NCUA), attracted more than 50 credit union and financial cooperative regulators from 21 countries. Several common themes emerged during the meeting. Participating regulators said many of their countries will implement, modify or restructure depositor protection systems. As credit unions consolidate, the resulting concentration of assets and members in the newly formed larger entities creates potential concerns about their size and significance to the rest of their countries’ respective movements. Many developing and transitional economies are migrating from a sector developmental stage to a prudential supervisory approach, requiring different regulatory environments, some participants said. Interest-rate risk and asset/liability risk--subject to greater scrutiny--could be significant emerging issues globally for credit unions. “In response to global developments, ICURN will be drafting guidance regarding credit union capital and liquidity in the coming months,” said ICURN Chair Andy Poprawa, president/CEO of Deposit Insurance Corp. of Ontario, Canada. “We believe these principles and practices for effectively supervising credit unions will aid with the development of appropriate and sound oversight of credit unions.” The meeting, held June 8-10 at NCUA’s Alexandria, Va., headquarters near Washington, D.C., also included a discussion on wholesale credit unions and their proposed role in the future of the movement. Earlier in the week, credit union supervisors from Kenya and Tanzania participated along with the Maryland Department of Credit Unions in an on-site examination of a Baltimore credit union, while regulators from Brazil and Singapore joined the Virginia Bureau of Financial Institutions in a credit union examination in Richmond, Va. During the meeting, network members reaffirmed appointments of regional ICURN representatives, including:
* Carilus Ademba, SACCO Societies Regulatory Authority, Kenya (Africa); * Singam Karuppasamy, Reserve Bank of India (Asia); * Wiktor Kamiñski, National Association of Co-operative Savings & Credit Unions, Poland (Europe); * José Angelo Mazzillo Jr., Central Bank of Brazil (Latin America/Caribbean); * Poprawa, ICURN chair, Deposit Insurance Corp. of Ontario, Canada; * Mary Martha Fortney, president/CEO of the National Association of State Credit Union Supervisors, U.S.; * Gigi Hyland, NCUA board member, U.S.; and * Brandon Khoo, Australia Prudential Regulation Authority (Oceania).
“These meetings are invaluable and have proven to be an important source in gathering information on the issues facing regulators in other countries,” Hyland said. “It is amazing that no matter how large or how mature a system is, so many of the issues are similar around the globe.” Participating credit union supervisors were joined by senior policy officials from the Basel Committee on Banking Supervision secretariat and the Consultative Group to Assist the Poor, part of the World Bank Group, who provided firsthand insights into the global financial sector reforms. Participants were also given a first look at ICURN’s new logo and website. See the link. “I now have hope that we can improve the situation for credit unions,” said Janie Henriette, credit union supervisor from Central Bank of Seychelles, at the close of the meeting. ICURN, which evolved out of WOCCU’s annual Regulators’ Roundtable, includes 30 organizations from six continents with statutory authority for supervising credit unions. Dave Grace, WOCCU senior vice president of association services, acts as ICURN secretary.

Mountain America offers 80-language interpretation

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SALT LAKE CITY (6/16/11)--Mountain America CU members can now transact business in 80 different languages. The West Jordan, Utah-based credit union offers interpretation services through CU Sources, a subsidiary of Mountain America Financial Services (MAFS). The service was created in response to a growing number of members who speak foreign languages, according to Nathan Anderson, Mountain America’s chief operating officer. One in five U.S. citizens over the age of five speaks a language other than English at home, according to the Census Bureau. Mountain America’s new interpretation service tackles this issue head-on, better equipping the credit union to help its non-English speaking members, Anderson said. “With this system in place, we are able to help our foreign-speaking members overcome an otherwise frustrating language barrier, allowing them to manage their finances better,” Anderson said. To assist non-English speaking members, employees dial an extension using recently installed hardware, and request the specific language they need translated. They are then connected with a qualified interpreter who provides the translation service. The service is a “differentiator” for the credit union, according to Gene Erickson, CU Sources chief operating officer. “Clear communication is an essential part of any financial transaction,” Erickson said. “This new service allows Mountain America employees to communicate with members in a secure and convenient manner while using the member’s preferred language.” CU Sources is a credit union service organization that provides financial institutions with a variety of products. CU Sources is based in South Jordan, Utah, and was created by MAFS, a wholly-owned subsidiary of $2.8 billion-asset Mountain America CU.

CU System briefs (06/15/2011)

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* ATLANTIC CITY, N.J. (6/16/11)--The New Jersey Credit Union League (NJCUL) is among the exhibitors this week at the New Jersey Association of Counties Convention & Annual Meeting in Atlantic City. Thousands of county and state officials attend the conference, which provides an opportunity to take credit union messages to state and local lawmakers and policy leaders, said the league. The association supports credit unions' push to amend the state's 40-year-old Government Unit Depository Protection Act so local government entities can use credit unions as depositories. Pictured are, from left: Yvette Segarra, league manager of special events, and Senate President Steve Sweeney (D-3). Sweeney introduced and has been a driving force behind the legislation to enable local governments to use credit unions. That legislation is scheduled for consideration today by the Assembly Financial Institutions & Insurance Committee. (Photo provided by the New Jersey Credit Union League) … * MEMPHIS, Tenn. ((6/16/11)--Memphis (Tenn.) Area Teachers CU officially switches to a new identity today as Orion FCU (The Commercial Appeal June 15). The credit union said it has suffered from a mistaken identity for years, and that the new name won't define it so narrowly. When the credit union was founded in 1957, membership was limited to educators, but that hasn't been the case for a while, said CEO Daniel Weickenand. Most people probably aren't aware of that so the credit union is taking the opportunity to tell them by introducing a new name and new look, he said. The $440 million asset credit union is open to residents of Shelby County … * COMPTON, Calif. (6/16/11)--Mid-Cities Financial CU, based in Compton, Calif., has shortened its name to Mid Cities CU and adopted an updated look for its logo. "A majority of our members already referred to us as simply Mid Cities, so we shortened our official name," said President/CEO Melia R. Keller. A new logo sports a wave that represents the letters M and C for Mid Cities; geographically represents the beauty of Southern California and philosophically represents the credit union's commitment to renewal and rebirth, much like the key message of Compton, said the credit union … * DES MOINES, Iowa (6/16/11)--Tom Kuehl, a long-time credit union movement advocate, has announced he will retire as CEO of The Members Group (TMG) and as chief operating officer of Affiliates Management Co. (AMC). TMG has helped hundreds of credit unions implement payments solutions, including credit, debit, prepaid cards and alternative payment programs. Kuehl began his career in the early 1980s with Iowa Corporate Central CU. As CEO, he assisted in establishing payment processing companies in 1987, which evolved into today's TMG. Throughout his career, he has served on numerous committees of U.S. Central and as vice chairman of its board. He was a member of the initial executive committee for the Association of Corporate Credit Unions. He also has held positions with Postal Finance Co. and First National Bank, Sioux City, Iowa. He will remain in the CEO position until a successor is appointed and will work with the new TMG CEO to transition the leadership, according to Patrick Jury, president/CEO of AMC and the Iowa Credit Union League … * SPRINGFIELD, Mass. (6/16/11)--Springfield, Mass.-based STCU CU has hired a 30-year banking veteran as its new president/CEO. Michael S. Ostrowski will succeed William "Bill" Brothers, who leaves for retirement this month. Ostrowski comes to STCU from Barre Savings Bank, where he served as senior vice president of lending. Before that, he served eight years as vice president and chief lending officer at Freedom CU, Springfield. He also held positions with Ludlow Savings Bank, Multibank, United Co-operative Bank, and Pioneer Financial Co-operative Bank. He also served seven years as an adjunct professor at Holyoke Community College …

Oregon CUs report fraud related to Michaels breach

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PORTLAND, Ore. (6/15/11)--Members at two credit unions and customers at a local bank in the Beaverton, Ore., area have reported their debit cards were compromised last weekend, with at least one incident attributed to the data breach announced by Michaels Stores Inc., the national craft store based in Texas. Bill Johnson, a member at First Tech CU's Beaverton branch, discovered $800 in unauthorized withdrawals Saturday from ATMs in Las Vegas and Los Angeles within minutes of each other (The Oregonian June 14). He reported the unauthorized transactions to the credit union, which credited his accounts. Johnson learned of other victims while at First Tech and after posting his experience on Twitter and Facebook. His wife shops at the craft store in Beaverton. Another Beaverton-area credit union, Advantis CU, told The Oregonian it had seen an increase in debit card fraud over the weekend. Several customers of U.S. Bank also reported their cards were canceled without notice. At least one incident has been referred to the Secret Service, which is investigating the Michaels breach, said Beaverton police. Michaels reported in May that personal identification number (PIN) pads at about 90 of its stores nationwide had been tampered with between Feb. 8 and May 6, the article said. Two stores in Beaverton as well as stores in other Oregon cities--Tualatin, Roseburg, Springfield and Medford--were among the stores compromised. A business security column on about.com (June 9) said that the breach occurred through point-of-sale swapping, which involves physically replacing a card reader at a retail location, captured card and store information. The data breach has resulted in two lawsuits against the craft store in the U.S. District Court for Northern Illinois. One alleged that Michaels didn't do enough to protect customer data. The second, which is seeking class action status, claims the store didn't notify cardholders early enough that their cards were compromised. Michaels has victims to work directly with their bank and card issuer. Forty-six states have laws requiring companies with breaches to notify victims. However, notice and enforcement aren't consistent. This and other high profile breaches affecting millions of consumers have an impact on credit unions and other financial institutions. Credit unions and other financial institutions--not the retailer--ultimately are required to gather additional information on the breach, reissue cards, cover transaction costs, refund funds to victims of fraud, and among other things, said the Credit Union National Association.

West. Bridge CUs submit charter for United Resources FCU

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BAKERSFIELD, Calif. (6/15/11)--United Resources FCU--the proposed successor to the operations of Western Bridge Corporate--submitted its application for a charter about two weeks ago to the National Credit Union Administration (NCUA), announced the newly elected board for United Resources. Officers from 31 Western Bridge member credit unions signed their names to the application--roughly 4.4 times the seven minimum signatories required by regulations. “Thanks to the dedication of many credit union professionals we are able to move this forward,” said Rudy Hanley, CEO of the $8.8 billion SchoolsFirst FCU, Santa Ana, Calif. “Reaching this milestone has been arduous, but many credit unions will benefit by having access, expertise, and a cost-effective solution that will ultimately benefit credit union members.” NCUA should review the charter and make a decision before October, said Matt Davidson, United Resources' first board chairman and chief financial officer of Kern Schools FCU, a $1.3 billion asset credit union located in Bakersfield, Calif. "We're hoping to raise the capital by Aug. 31," he said. On May 31, capital solicitation began for United Resources, with a Private Placement Memorandum sent to the 885 members of Western Bridge. The credit unions were asked to decide by Aug. 31 whether they will invest capital in the new corporate, with the funds held in escrow pending an October launch. "Once we have the capital commitment of at least $200 million and meet the criteria, we're hoping NCUA will say yes in September. If that's the case, we'll be open for business Oct. 1," Davidson told News Now. The $200 million is a "low estimate," he said. "Potentially we'll have a lot more." The corporate would need 500 members of the 885 members of Western Bridge. "Once we get commitments over $200 million in capital, we will be ready to provide settlement, item processing and liquidity for credit unions." One of the credit unions lending their experience to the future success of United Resources is the $1.2 billion asset F&A FCU, in Monterey Park, Calif.. “F&A and its members have greatly benefited from the established payment system structure at our corporate," said Mike Hardin, chief operating officer of F&A. "The perpetuation of the payment systems we utilize through United Resources will be an integral part of our ongoing efficiency and future success of our credit union.” Kern Schools FCU CEO Steve Renock said his credit union is a chartering applicant for "our new corporate credit union that will not only be a benefit to us but to our entire industry." He and the credit union's board are "very supportive" of Davidson in his role as the newly elected chair of United Resources, Renock said. The 31 credit unions to sign the charter application are based in California, Hawaii, Idaho, Oregon and Washington. Combined, they have nearly $19 billion in assets, representing some $20 million in potential capital to United Resources. After the charter approval is formalized, the next step will be to purchase assets of Western Bridge to start the business. Employees in settlement, item processing and liquidity areas at Western Bridge will be transferred to the United Resources at the San Dimas, Calif., location. Davidson estimated fewer than 200 employees will be transferred. "It's really important to have a cooperative credit union to provide settlement, item processing and liquidity for credit unions," said Davidson adding, "I feel strongly about it." United Resources can leverage the Western Bridge franchise, and "it's better to do it through a credit union than through banks and other providers."

FSCC honors seven CUs for shared branching

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ONTARIO, Calif. (6/15/11)--Financial Service Centers Cooperative, Inc. (FSCC), a national credit union shared-branching network, recognized seven credit unions for their contributions to shared branching in 2010 during the FSCC Globe Awards at its annual shareholders’ meeting Friday. The awards are presented in two categories, “Exceptional Performance” and “Outstanding Service.” Exceptional Performance awards are based on the core system of the FSCC Credit Union procession on the FSCC switch. To be considered, a credit union must process more than 200,000 transactions annually. Winners are:
* Altura CU, Riverside, Calif.: Acquirer Award--The online availability requirement to the FSCC Switch is 98.5%. Altura averaged 100% during 2010, processing 314,274 transactions for guest members at 13 locations. * SAFE CU, Sumter, S.C.: Issuer Award--The online approval requirement of issuer transactions processed by its members on shared branching is 90%. SAFE averaged 100%, processing 213,512 transactions by its members on shared branching in 2010. * Affinity FCU, Des Moines, Iowa: Issuer Award--The online availability requirement to the FSCC Switch is 98.5%. Affinity averaged 99.9%, processing 416,092 transactions by its members on shared branching in 2010. * SAFE CU: Issuer Award--The requirement for percent of denials due to downtime at the FSCC Switch is less than 5%. SAFE averaged less than 0.10%, processing 213,512 transactions from its members on shared branching in 2010.
The Outstanding Service Award is presented to an FSCC credit union that contributed to the success of shared branching in 2010 in an outstanding manner. Winners are:
* Highest Transaction Volume Outlet Acquirer on the Network for 2010--Patelco CU, Pleasanton, Calif., with 41 branches, processing more than 1.6 million guest members’ transactions in 2010. * Largest Deployer on U.S. Military Bases Overseas in 2010--Service CU, Portsmouth, N.H., with 16 locations, including two kiosks, serving guest members in 2010. * Highest Transaction Volume Issuer on the Network for 2010--Digital FCU, Marlborough, Mass., with 848,036 member transactions processed through shared branching in 2010. * Single Highest Transaction Volume Outlet on the Network in 2010--San Bernardino, Calif.-based Arrowhead CU’s Chino, Calif., branch, which processed 184,763 guest members’ transactions in 2010.
FSCC also recognized the contributions made by two of its partners providing services to credit union members using shared branching and custom services to credit unions participating on shared branching. Recognized with the Partner Recognitions Award were:
* PSCU “Total Member Care,” for its call center. The call center processed more than 3.45 million transactions in 2010. * CU Wireless, for the most innovative partner in 2010. Two examples of its innovative contributions were custom mobile text banking and MyCUAnywhere mobile text banking.
FSCC has more than 6,500 network locations nationwide.

Belvoirs Web hunt game draws 1300 players

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WOODBRIDGE, Va. (6/15/11)--Belvoir FCU’s second annual interactive Web hunt game attracted more than 1,300 players during a two-month period, increasing traffic to both the credit union’s website and its Facebook page. There were 174,927 online viewers during the game, 40,547 more than last year, said the Woodbridge, Va.-based credit union. The Web hunt game attracted more than 347,000 page views, nearly 100,000 more than in 2010. Belvoir FCU also saw a 348% increase in “likes” on Facebook during the contest. Each participant searched the credit union’s site for eight puzzle pieces. When the pieces were paired, they formed a secret phrase that users entered into a custom-built application on the credit union’s Facebook fan page. Belvoir FCU rewarded 10 winners with prizes, including an Apple iPad, a Nintendo Wii, an Amazon Kindle, and a four-pack of AMC gift cards with concession-stand gift cards.

MnCUN Lifting MBL cap adds more small biz

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ST. PAUL, Minn. (6/15/11)--Lifting credit unions’ member business lending (MBL) cap to 27.5% of total assets from 12.25% would help U.S. small businesses at a time when small-business lending has declined nationwide, the Minnesota Credit Union Network (MnCUN) told a state business publication. “If you can get more lenders into the game, it’s going to provide more opportunity for businesses to get credit,” Mark Cummins, MnCUN CEO, told Finance & Commerce (June 13). “Lawmakers tell us that that they hear from their constituents all the time that it’s so hard to get credit, especially business credit.” Cummins disputed bankers’ assertions that lawmakers capped credit unions’ business lending in 1998 to keep them focused on helping individuals so they could obtain affordable financial services. “A credit union’s mission is really to serve its members and help them improve their lives,” Cummins said. “Creating jobs and employment opportunities on a small-business level exactly fits into our mission of serving our members and their communities,” he added. A higher lending cap for credit unions would overcome a lending obstacle for members and small businesses and also bring more credit unions to the business-loan-market table, Cummins told the publication. “You need to build expertise in business lending if you’re going to offer that business,” he said. “We don’t know how many, but we’re hearing from a number of members [credit unions] who want to expand into the market.” Minnesota credit unions made $863 million worth of business loans in fourth quarter 2010. There would be an estimated $179 million in additional business loans made in the first year if the U.S. Senate S.509 bill is adopted to raise credit unions’ MBL cap, the publication said. The Credit Union National Association (CUNA) provided the statistics. To read the article, use the link. Legislation that would lift the cap will be the focus of a hearing Thursday before the Senate Banking Committee. CUNA and credit unions are trying to get Congress to increase credit unions’ MBL cap. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA has said.

Shell FCU restructuring debts to help members save

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DEER PARK, Texas (6/15/11)--Shell FCU, Deer Park, Texas, is helping members restructure debt to better suit their needs. A recent Harris Poll on planned spending and saving indicated that an overwhelming number of Americans are less likely to pursue large purchases--a situation similar to the height of the 2009 financial crisis (Texas Credit Union League LoneStar Leaguer). “We believe that many of our members are not in the position to take on new debts, so we focus on restructuring members’ existing debts from other institutions,” D’Anne Turner, vice president of lending at Shell FCU, told the LoneStar Leaguer. “Our goal is to combine those debts and lower the monthly payments. We actively incent our employees to look for those opportunities to ‘save members money.’” Saving money is high is a priority for consumers--9% plan to purchase a house or condo and 14% plan to buy or lease a new automobile, according to the Harris Poll. Turner said she and her staff continually review credit reports for refinance opportunities on auto loans, home equity loan and mortgages to find savings opportunities for members--and lending opportunities for the credit union. “We want to be a one-stop shop and have our members have all of their deposit and lending products with us,” Turner said.

Crear tells Dakotas summit of lifeline CUs

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FARGO, N.D. (6/15/11)--In some developing countries, credit unions can be a “life line for survival,” said Pete Crear, president/CEO of the World Council of Credit Unions (WOCCU), who was a special guest speaker at the Credit Union Association of the Dakotas Summit in Fargo, N.D., this week.
Click to view larger image At the Credit Union Association of the Dakotas (CUAD) Summit in Fargo, N.D., Friday, were, from left, Robbie Thompson, president/CEO of CUAD; Pete Crear, president/CEO of the World Council of Credit Unions, and Doug Thompson, chair of the CUAD Board of Directors. (Photo provided by the Credit Union Association of the Dakotas)
Attendees had the opportunity to have “Breakfast with Pete Crear” on Friday. In his speech, Crear talked about credit union movements around the world: “People Helping People” on a global scale. Some projects gaining support include:
* Afghanistan--WOCCU is helping Afghans to start operating their own credit unions; * Tanzania--WOCCU is helping set up a regulatory framework for credit unions; * Kenya--Working with the Bill Gates Foundation, WOCCU helped change the local crops from tea to rice, which is generating more cash for credit union members; * Mexico--Credit union services are brought to people by horseback or motorcycle; and * Haiti--A micro-lending initiative is gaining support, helping citizens of one of the world’s poorest countries.
“There is a place in this world for institutions with a higher purpose than profit,” said Crear. “It’s about people--the money will take care of itself. If we stay that course, everything will be just fine.” Crear will be retiring later this year, after 46 years devoted to credit unions.

CU System briefs (06/14/2011)

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* COLUMBIA, S.C. (6/15/11)--Con artists persuaded a 71-year-old woman into withdrawing $17,000 from her account at Palmetto Citizens CU in Columbia, S.C., last month. According to the Columbia Police Department, the member left a local Kmart on May 24 and was approached by a man who showed her a bag of money that had "fallen off a truck." He and another woman said they would split the cash with the victim if she would help pay the taxes on it. The victim drove the female suspect to the credit union and withdrew the funds. They drove to a parking lot at a business where they were supposed to meet the male suspect. The female suspect said she would get the man and walked away with the money (The State June 13) … * LAUREL, Md. (6/15/11)--Tower FCU raised $25,000 to benefit the Baltimore, Md.-based Johns Hopkins Children's Center, a member hospital of the Children's Miracle Network Hospitals, during the credit union's 29th Annual Tower Classic Golf Tournament. The June 3 tournament in Beltsville, Md., had 60 sponsors and 122 golfers. Proceeds and sponsor donations raised $15,000, and CO-OP Financial Services donated an additional $10,000. Since 1998, the Tower Classic has raised more than $169,000 for the center. Pictured are from left, Sean Zimmerman, Tower's vice president of operations and technology, and Kristen Nock, associate director of development for Johns Hopkins. (Photo provided by Tower FCU) … * HARRISBURG, Pa. (6/15/11)--Philadelphia-based American Heritage FCU raised $25,000 through its 18th Annual Gelatin Olympics for the Children's Seashore House at the Children's Hospital of Philadelphia. The June 8 event attracted more than 100 participants and more than 500 spectators. Despite extreme heat, sliders who had gathered pledges for the event dressed in costumes and took the plunge into a pool of 700 gallons of bright red gelatin. Since 1996, American Heritage's Kids-N-Hope Foundation has contributed more than $675,000 to the Children's Seashore House (Life is a Highway June 14) … * BISMARCK, N.D.(6/15/11)--Credit unions attending the Credit Union Association of the Dakotas this week in Fargo, N.D., raised funds for the Children's Miracle Network Hospitals and for scholarships to attend the Credit Union National Association's 2012 Governmental Affairs Conference (GAC). Proceeds from a golf scramble and matching funds from CO-OP Financial Services netted $3,248 for children's hospitals. Pictured are from left, Stan Hollen, CEO/President of CO-OP Financial and member of the Children's Miracle Network Hospitals board of governors, and Joe Dearborn, director of Children's Miracle Network Hospitals' Credit Unions for Kids. Also, a silent auction raised $3,113 to provide assistance scholarships to members attending the GAC and Hike-The-Hill meetings in Washington. (Photo provided by the Association of the Dakotas) … * HARRISBURG, Pa. (6/15/11)--Johnstown, Pa.-based HealthCare FCU attracted 270 new enrollments in its EBanking program as a result of its six-month promotion of the service. Everyone enrolled was entered into a drawing to win a 32-inch flat screen TV. President/CEO Paula Nihoff told the Pennsylvania Credit Union Association that by offering a cool prize, it got the staff and members talking about the program--"then it's an easy sale." (Life is a Highway June 14) … * REDWOOD CITY, Calif. (6/15/11)--It's the fifth birthday of the On Broadway branch of Redwood Calif.-based San Mateo CU (SMCU), but the members are the ones who get the gifts. The branch is celebrating with several special offers, including depositing $50 into each new checking account, giving members $5 for referring a friend for membership, and offering an appraisal rebate of up to $500 for qualified first mortgage homebuyers. The credit union also will give members approved for a new Visa Platinum card a bonus of 5,000 CURewards points that can be redeemed for credit union products, merchandise and travel options. Members who fund a vehicle loan through the credit union will receive a $50 gas card. The specials can be redeemed at the branch until July 2. SMCU also is featuring auto loan rates as low as 1.99% on new vehicles and 2.99% on used vehicles. And the $600 million asset credit union will waive all membership fees during the period …

HandFF Radio guest on iHuffPoi Teach kids about interest

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MADISON, Wis. (6/15/11)--Parents should teach their kids about interest rates, advises Jason Alderman, senior director of Visa Inc., and a frequent guest on the Credit Union National Association’s (CUNA) Home & Family Finance Radio, in a June 13 Huffington Post article. “One of the most valuable financial lessons you can share with your kids before they leave the nest is to explain what interest rates are and how they work,” Alderman wrote. “The important financial transactions they'll conduct as adults will likely be affected in some way by interest rates, whether as a lender or a borrower.” A recent National Foundation for Credit Counseling’s (NFCC) 2011 Financial Literacy Survey revealed that many parents admit they are not prepared to teach their children about financial topics, such as interest rates. The survey revealed that 41% of adults gave themselves a grade of C, D or F regarding their knowledge of personal finance--even though 42% of kids indicated that they learned the most about personal finance from their parents. In the Huffington Post article, Alderman provides readers with background information on interest rates for lenders and borrowers. He also discusses the difference between the discount rate and prime rate, and fixed rates and adjustable rates. Alderman refers readers to the CUNA website to find credit unions they are eligible to join. CUNA also offers youth financial education resources. (Use the link.)

New Hampshire CU offers HLPR

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MANCHESTER, N.H. (6/14/11)--St. Mary’s Bank, a $710 million asset credit union based in Manchester, N.H., has pledged to make $2.5 million in new funds available for low-income Home Loan Payment Relief (HLPR) mortgages. The HLPR mortgage program was developed by the Credit Union National Association (CUNA) and features below-market adjustable-rate mortgages and fixed-rate mortgages that credit unions offer to their members of modest means to benefit these members and further demonstrate credit unions’ achievement of their mission, CUNA said. “The loans have become less attractive for credit unions to offer since home prices began falling in 2006,” Steve Rick, CUNA senior economist, told News Now. “The program was more popular when home prices were rising during the housing boom. Today, home prices are so low and we have the lowest interest rates in 50 years, creating record affordability. Therefore, the payment relief programs just aren’t needed as much as in 2005 when there were record home prices.” Qualifiying members of St Mary’s--the oldest U.S. credit union--may also be eligible for a grant of up to $10,000 through the Federal Home Loan Bank’s Equity Builder Program, for a limited time period. The grants may be used for down-payment assistance, customary closing costs and eligible prepaid items, and homebuyer counseling costs not covered by another funding source.

Wisconsin CUs 1Q shows consumers rely on CUs

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PEWAUKEE, Wis. (6/14/11)--Wisconsin credit unions continued to see strong performance during the first quarter of 2011, with state consumers relying on them during economic challenges. During first quarter, the state's 220 credit unions' assets increased to $21.3 billion from $20.7 billion at year-end 2010, said the Wisconsin Credit Union League. Net income rose to $27.8 million in first quarter from $22.9 million for the same period in 2010. Credit unions' net worth in the state was strong at 9.83%, helped by solid lending. Members borrowed 84 cents of every dollar on deposit. "Credit unions have fared well because the 2.2 million people of our state who belong to them continue to derive value from owning their financial institution---such as through [credit unions'] continued willingness to make needed loans, offer repayment options to struggling families, and charge lower interest and fewer fees on a full range of financial services," said league President/CEO Brett Thompson. "Credit unions continue to help members with budgeting, consolidating debt at lower rates, and providing small loans to help make ends meet," Thompson said. "They're also making the kinds of loans businesses need but the big banks don't make because they're not profitable enough. So the continued health of credit unions is a sign that Wisconsin consumers and companies are receiving the resources they need to manage their finances," he added. The performance data arrived amid efforts by the Wisconsin Bankers Association to slip a provision to ease converting credit unions to commercial banks into the state budget "without input from credit unions or their members," Thompson said. "The proposed process is so radical that 49 states don't allow it," he said. "Every year, member-owned credit unions return $200 million to consumers via lower rates on loans, higher savings rates and lower and fewer fees. Is a profit-seeking bank going to do that? This is just another covert attempt by banks to rake in even higher profits by eliminating the consumer-friendly competition posed by credit unions," he concluded. Highlights of credit unions' service in the state are detailed in the league's REAL Solutions 2010 Scorecard for Wisconsin Credit Unions. For more, use the resource link.

Money laundering regs challenge Mexican CUs

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EDMONTON, Alberta, Canada (6/14/11)--Like credit unions in both the U.S. and Canada, credit unions in Mexico are feeling the burden from regulations requiring more comprehensive risk-management procedures and anti-money laundering efforts.
Click to view larger image In May, Caja Yanga of Yanga, Veracruz, Mexico, sent three delegates to Servus CU, Edmonton, Alberta, Canada, to study risk management and anti-money laundering practices. From left: Gabriel Martinez, Caja Yanga, accounting and finance vice president; Manuel Hernandez, Caja Yanga chairman; Ana Roccia, Servus CU corporate security senior analyst; Mark Foote; Servus CU corporate security compliance manager; and Abel Martinez, Caja Yanga, risk manager. (Photo provided by World Council of Credit Unions)
Recently, credit unions on both sides of the U.S. border joined forces to prepare to better meet those challenges. Last month, Caja Yanga of Yanga, Veracruz, Mexico, sent three delegates to Edmonton, Alberta, to study risk management and anti-money laundering practices used by Servus CU’s enterprise risk management program and the credit union’s corporate security policies and procedures. It was the second visit between Caja Yanga and Servus CU, which have worked together since 2009 as part of World Council of Credit Unions’ (WOCCU) International Partnerships Program. Caja Yanga Chairman Manuel Hernandez; Abel Martinez, risk manager; and Gabriel Martinez, accounting and finance vice president, studied the operations of Servus’ corporate security team, which is responsible for all of the credit union’s anti-money laundering and anti-fraud efforts. Servus CU’s Mark Foote, corporate security compliance manager, and Ana Roccia, corporate security senior analyst, shared the credit union’s strategies for detecting suspicious activities and identifying accounts representing a high risk for money-laundering activity. “Money laundering has long been recognized as an international issue, and sharing with the group from Caja Yanga gave us unique insight we would not normally have had,” Foote said. “It’s through these important relationships that we can combat money laundering and terrorist financing at an elevated level.” Because Mexico and the U.S. adhere to the guidelines of the Financial Action Task Force, an inter-governmental organization focused on developing and promoting national and international policies to combat money laundering and terrorist financing, both countries have similar anti-money laundering regulations. That will make it much easier for Caja Yanga to implement Servus CU’s strategies in Mexico, said WOCCU. Servus CU’s risk management program identifies eight main risk categories threatening the credit union. Ruth Kizlyk, Servus’ enterprise risk management director, explained how each risk category can impact the credit union and how each category is measured quantitatively, allowing risk management committees to decide how much risk the credit union can bear and how to mitigate that risk when it exceeds desired limits. “One of the hardest aspects of the new regulations is the lack of specificity in how we need to measure and mitigate risk,” Abel Martinez said. “With the help of Servus, we were able to confirm that we are on the right track. We also now know what tools we will need to build a good risk management program as we continue to expand our services.” The Caja Yanga and Servus CU relationship is one of 22 relationships in WOCCU’s International Partnerships Program and the only one involving an individual Canadian credit union.

IWSJI CUs still outdo banks on deals

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NEW YORK (6/14/11)--Credit unions not only are increasingly attracting a broader-based membership, they still are offering significantly better deals than those at large banks that assess heavy fees, The Wall Street Journal said Saturday. “[Credit unions] typically offer better rates than banks on auto and personal loans, certificates of deposit, money-market accounts, home-equity lines of credit, savings and checking accounts, and credit cards--virtually everything except mortgages--according to data compiled by market-research firm Informa Research Services Inc. of Calabasas, Calif.,” wrote Nicole Ridgway in the article “Where the Banking Deals Are: Credit Unions Still Outdo Their Bank Counterparts, and It’s Easier to Get In.” “The deals are looking even better to consumers as rates on bank products fall near multi-decade lows,” she continued. “Over the past five years, membership at credit unions has grown by an average of 1.3% a year, with the total membership reaching 91.8 million in 2010, according to the Credit Union National Association …” Also, an October 2010 Bankrate.com study indicates credit union members pay substantially less in fees for ATM transactions and insufficient funds. The study indicated customers with checking accounts at traditional banks paid an average fee of $30.47 for insufficient funds and $2.33 each time they used an out-of-network ATM. By comparison, a separate Bankrate study in March 2011 indicated credit union members with checking accounts paid an average fee of $26.05 for insufficient funds and $1.28 for using another bank’s ATM. The article also gave specific examples of how credit unions still are offering good deals for auto loans, credit cards, certificates of deposit, money-market accounts and personal loans. The article steers readers to aSmarter.Choice.org to find a credit union. To read the article, use the link.

WCUF transitions iBiz Kidi to NCUF

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FEDERAL WAY, Wash. (6/14/11)--The Washington Credit Union Foundation (WCUF) will pass fundraising, outreach and administrative responsibilities for the children’s financial education TV show, Biz Kid$ to the National Credit Union Foundation (NCUF). WCUF has spearheaded fundraising efforts for the show for the past six years, raising more than $10 million. The transistion was made to maximize support from the national credit union system, the two organizations said. The show, which premiered in January 2008, has aired on more than 340 public television stations in 50 states with a possible viewership reach of 271 million people. Each episode of Biz Kid$ has a viewing audience of more than 1.2 million. The show’s website receives more than 100,000 unique visitors a month hailing from about 140 countries. In its first four seasons, Biz Kid$ has garnered seven Emmy nominations, winning once in 2009. Representatives from the show rang the closing bell at both the New York Stock Exchange and the NASDAQ Exchange for the past three years in conjunction with National Financial Literacy Month. In 2010, Biz Kid$ received the NCUF’s Herb Wegner Award. More recently, the Internal Revenue Service and Ernst & Young have started using the program in their outreach efforts. In recent years, the show’s underwriting has grown from a network of credit unions, credit union associations, foundations and affiliate organizations into a wider coalition. In 2010, the Michigan Credit Union League’s Invest in America program stepped forward with a multi-year, multi-million dollar commitment to the program. “With NCUF’s new focus on financial education, Biz Kid$ is a perfect fit for us and also for credit unions across the country,” said NCUF Executive Director Bucky Sebastian. “This project has national scope and reach, and it is appropriate for the NCUF to take the reins,” said NCUF Chairman Gary Oakland, CEO of BECU in Tukwila, Wash. “Through a national home, we can utilize more resources available through the national credit union system to raise the profile of the show with consumers, teachers and lawmakers.” NCUF has contributed more than $3.4 million in underwriting grants to Biz Kid$ since June 2007. It has also been instrumental in supporting the promotion of the program and its outreach resources through conferences and its website.

Municipal deposits bill in N.J. Assembly committee

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TRENTON, N.J. (6/14/11)--Legislation that would allow counties, school boards, municipalities and other local government entities to use credit unions as depositories has been scheduled for consideration by the New Jersey Assembly’s Financial Institutions and Insurance Committee on Thursday. The New Jersey Credit Union League is scheduled to testify in support of the legislation, (The Daily Exchange June 13). The bill is sponsored by Assemply Speaker Shelia Oliver (D-34), Deputy Speakers Upendra Chivukula (d-17) and John Wisnieski (D-19), and has 11 additional co-sponsors from both sides of the aisle. A companion bill sponsored by New Jersey Senate President Stephen Sweeney (D-3), Senate Republican Conference Leader Bob Singer (R-30), and Deputy Majority Leader Paul Sarlo (D-36) passed the State Senate last June.

Maine announces Young and Free spokesperson

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PORTLAND, Maine (6/14/11)--Seth Poplaski, is the winner of the Young & Free Maine spokesperson job, following a search that attracted 26 applicants.
Seth Poplaski of Bangor, Maine, reviews aspects of the job description for the Young & Free Maine spokesman at the luncheon announcing his selection as the first Young & Free Maine spokesman for Maine’s credit unions. Poplaski begins his job July 1, using a variety of social media to speak to and listen to the under-25 crowd on behalf of Maine’s credit unions. (Photo provided by the Maine Credit Union League)
He is a 24-year-old Winterport, Maine, native who now lives in Bangor, Maine. “We were extremely impressed by the quality of the content our finalists created,” said John Murphy, president/CEO of Maine Credit Union League. “Through the combination of his videos, blog entries, and how he spread the word about Young & Free Maine, Seth was a stand-out applicant, and proved that he has the writing skills, on-air presence and ability to communicate with Maine’s 25-and-under crowd that makes him an obvious choice for this exciting new opportunity.” As the spokesperson for Young & Free Maine, Poplaski will work under a one-year contract with salary on behalf of Maine’s credit unions. He will serve as a reporter and advocate for his age group, attending events and creating daily online content, including blog entries and videos to keep YoungFreeMaine.com an information hub for the 25-and-under crowd in Maine. Young & Free Maine includes a financial headstart with a new account called the Free4ME Account, designed with 18- to-25 year-olds in mind. Maine is the only New England state to offer the program, which has proven successful in connecting with Gen Y in other regions throughout North America.

CU System briefs (06/13/2011)

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* SAN DIEGO, Calif. (6/14/11)--San Diego County CU (SDCCU) is offering same-day payments through its online bill payment solution, Bill Payer Plus. SDCCU says it is one of the first financial institutions to offer the service. "Same-day payments can help our members pay their bills on time and avoid late charges or penalties from their billers," said President/CEO Teresa Hallack. "In today's economy, this can be a very useful service for many members." Members can use same-day payment include auto, mortgage, credit card, utility, phone and other household bills. Members can select the same-day delivery option as part of the normal payment scheduling process. CheckFree RXP from Fiserv powers the payment solutions, said SDCCU … * WILKES-BARRE, Pa. (6/14/11)--The trial of Elvis Riccardi, 33, of Wilkes-Barre, Pa., began Monday on charges of homicide, kidnapping and 11 other charges relating to the murder of Donald Skiff in 2009. Skiff disappeared April 28, 2009. He was beaten and taken to two credit unions in Plains Township, where his kidnappers used a debit card to withdraw money from Skiff's account on April 27 and April 28. His body was found five weeks later. Riccardi faces a possible death penalty. A co-defendant, Michael Simonson, 34, pleaded guilty to second-degree murder and was sentenced to life in prison (The Wilkes-Barre Times Leader June 13). * LANSING, Mich. (6/14/11)--Warren Baker, former president/CEO of Michigan Catholic CU (MCCU), died on June 7, according to the Michigan Credit Union League (Michigan Monitor June 13). He was 81 and lived in Clarkston, Mich. Baker went to work for the $260 million, Troy, Mich.-based credit union in 1972. He retired as CEO in 1994. He also served on the MCCU board of directors as treasurer and was named director emeritus. He is survived by his wife Mary Ann and three children, and three grandchildren …

New E-Scan focuses on board financial literacy recovery

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MADISON, Wis. (6/14/11)--Strategies for board financial literacy and taking advantage of the economic recovery are the focus of the just-released Credit Union National Association's (CUNA) 2011-2012 Environmental Scan. The E-Scan is based on research by CUNA's National Research Group. It presents trends and projections critical to the credit union movement and ideas for action. Credit union executives and boards use the report for their strategic and business planning. This year's E-Scan has a two-fold focus: to help credit unions take advantage of the gradual economic recovery and to help their boards of directors meet the higher expectations for financial literacy set by the National Credit Union Administration (NCUA). Four of the 14 chapters in this year's 100-page E-Scan are dedicated to helping boards meet--and exceed--NCUA's higher standards. The remaining 10 chapters address future trends and projections for key operating areas such as lending, demographics, marketing, economics, technology and compliance. More credit union lending, higher earnings, and an opportunity to serve a young adult market that is mostly unfamiliar with credit unions are among the highlights. Some of the E-Scan's results encompass:
* Lending. Credit union loan balances are expected to rise 4% in 2011 and 6% in 2012. That follows a decline of 1.5% in 2010. Auto loans, private student loans, credit card loans, and purchase mortgages will hold the potential for most credit unions through 2012. * Earnings. Credit union earnings will climb back to 60 basis points this year and 70 basis points in 2012 (after NCUA's corporate assessments of a projected 20 basis points this year and 15 basis points next year). Cost containment will continue to be an important strategy until the economic recovery gains traction. * Young and unaware. Nearly 70% of consumers age 18 to 24 are "not at all familiar" with credit unions. No other age group has such a high level of unfamiliarity with credit unions. Mobile banking and social media are two essential strategies for reaching this age group.
CUNA is offering a specially priced bundle of strategic planning products, including E-Scan, to help credit union planning teams throughout the year. CUNA's Strategic Planning Package includes:
* Twelve copies of the 2011-2012 E-Scan Report, which covers all major operational areas and topics related to improving board performance; * A choice of 35-minute DVD or 100-slide Power Point presentation designed to help focus planning meetings by giving a high-level overview of the entire report; * A one-year subscription to the E-Scan Newsletter for the latest trends in the financial services industry; * An intuitive strategic planning guide to help set actionable short- and long-term goals; and * Full access to the online E-Scan research and advice portal for articles and research reports.

Citi breach a wake-up call for financial institutions

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NEW YORK and WASHINGTON (6/13/11)--Credit unions are watching closely developments related to last week's announcements of two high-profile data breaches--Citigroup and RSA Security. These and others are prompting regulators and lawmakers to look closer at the measures financial institutions take to protect member/customers' data or to notify them when a breach occurs. During the past six years, roughly 288 publicly disclosed breaches at financial service companies compromised records of at least 83 million customers, reported the Identity Theft Resource Center (ITRC). In 2011 so far, 17 breaches of financial institutions--including three credit unions--compromised 19,348 card accounts, said ITRC's website. Breaches at financial institutions account for 8.7% of total breaches and 0.2% of records compromised. But that was before Citigroup's announcement. Citigroup, which has about 21 million card accounts in the U.S., Thursday began notifying half of the 200,000 affected customers whose cards will be replaced at about $20 per pop. Thieves who hacked Citigroup's computer systems gained access to customer names, card numbers, addresses and e-mail details. However, information not compromised included Social Security numbers, expiration dates and the three-digit code located on the back of the cards. Citigroup's debit card business and its online banking operations were not breached. This breach is unusual because it did not occur as a result of a breach at a merchant, but at the bank's card issuer (The Wall Street Journal and The New York Times June 9). Credit unions have not been immune. ITRC data reported breaches at three credit unions since December--including HarborOne CU, Brockton, Mass., on May 9, which exposed 400 cards; Five County CU in Bath, Maine, which compromised 3,000 card accounts; and Pentagon FC, Alexandria, Va., in December, which compromised an unknown number of accounts. Banks are losing the fight against fraud because they aren't focusing on the right things, according to Tom Wills, fraud analyst at Javelin Strategy & Research. Although they take security seriously and invest significant resources to protect data, breaches still occur, he told BankInfoSecurity.com (June 10). How hackers broke into Citi's online banking system is not the main lesson for financial institutions, he said. The main lesson is that banks need more sophisticated fraud detection. But the extremely complex problem has "literally has millions of failure points," which makes 100% ironclad protection impractical, he said. Instead, financial institutions can aim to cover the biggest threats with the biggest impact, he said. The New York Times seems to agree. It points out that every step along the payment chain is outsourced from the time a card is swiped to the time a monthly statement arrives, leaving many opportunities for cyber criminals. A patchwork of data protection laws and regulatory agencies with limited mandates is also an issue. Some have attacked Citigroup's taking several weeks to notify its customers of the attack. Rep. Mary Bono Mack (R-Calif.) suggests the nation needs a uniform national standard for data security and breach notification, said the Times. Reuters Thursday reported that Federal Deposit Insurance Corp. Chairman Sheila Bair said she may ask some banks to strengthen their verification procedures for logging onto customers' online accounts. Any regulations or updating of standards would have more of an impact on smaller institutions than on the big banks, which already spend heavily on data security protection, Aite Group analyst Julie Conroy McNelley told Reuters. The Citigroup breach, which followed a wave of highly publicized breach events at Google's Gmail, Sony, Epsilon and RSA Security, is a wake-up call for financial institutions, several news outlets said, because now it's the financial institutions--instead of the merchants they've criticized--who face direct breach attacks.

Cherry Blossom Run sponsors announce top fundraisers

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WASHINGTON, D.C. (6/13/11)--Credit Union Cherry Blossom Ten Mile Run officials and sponsors announced the top fundraisers for the April 3 race--which attracted more than 15,000 runners this spring--during the event's award luncheon Friday in Alexandria, Va. “In addition to this being our 10th anniversary, we have reached new heights of fundraising as well as gained the attention of legislators and credit unions from across the country," said Juri Valdov, chairman of the title sponsor group, Credit Union Miracle Day Inc., noting, "We have a lot to celebrate." Credit unions have sponsored the run for 10 years to benefit Children’s Miracle Network Hospitals. This year’s donation of $578,000‚ helped bring the 10-year total of funds donated to Children’s Miracle Network Hospitals to over $5 million. “Thanks to the tremendous support of our lead partner‚ PSCU Financial Services‚ we are able to donate 100% of the funds raised by credit unions to children’s hospitals across the country‚” said Valdov. He also thanked Phil Stewart, the race's director for 10 years, CUNA Mutual Group as the event's National Business Partner, and CO-OP Financial Services for sponsoring the awards luncheon. Randy Dotemoto of Kinecta FCU, Manhattan Beach, Calif., was the top online fundraiser for the event, raising more than $7,000, announced Joe Dearborn, director of Children's Miracle Network Hospitals’ Credit Unions for Kids. Other winners included:
* Commonwealth One FCU, Alexandria, Va., Most Spirited Volunteer Team award; * Constellation FCU, Reston, Va., which raised 15 cents per member through an iPad raffle, the Member Donation Challenge award; * Department of Labor FCU, Washington, D.C., which raised 28 cents per member through its skip a pay program, the Organizational Donation Challenge award; * Denise Knickman, a member of Upper Marlboro, Md.-based NASA FCU's team "Atlas," Top Credit Union Female Runner Award with a time of 1:02:21. Knickman holds the Credit Union Open Women’s record and the new age group record for credit union females ages 40-44; * Erik Jones, a member of the Washington-based Federal Reserve Board FCU's team, "Rate $etters--Cash Us if U Can,” Top Credit Union Male Runner Award, with a time of 57:25; and * State Department FCU's "Super Sprinters Team 1," the Credit Union Cup, with a winning time of 3:19:07. The scoring members of the team are Steve Dietz, Jenn Dietz, and Jeffrey Kovar.
The 40th running of the Credit Union Cherry Blossom Ten Mile Run will take place, Sunday, April 1, 2012, during the 100th anniversary of the Cherry Blossom Festival. For more information, use the link or contact Sarah Turner, CUMD director, at 443-325-0778 or at info@cucherryblossomrun.org.

Fire at auto shop causes 100000 damages to CU

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GRAND RAPIDS, Mich. (6/13/11)--An early Thursday morning fire at a Hastings, Mich., auto body shop resulted in more than $100,000 in heat and smoke damage to the credit union next door. Grand Valley Co-op CU (GVCCU) is adjacent to J & L Auto Sales and Detail Shop, which was destroyed. Authorities estimated damages at $241,000 for the auto shop (The Grand Rapids Press June 9). The $100,000 damages to the credit union included smoke and heat damage to the building and about $30,000 worth of computers and other equipment inside. The branch, which is less than three feet from the body shop, was closed Thursday. The fire was reported at 4:35 a.m. Thursday. By the time the fire department, located within sight of both buildings, the entire shop was aflame. The cause is undetermined and an investigation will be held, but the fire department said the fire isn't considered suspicious. The credit union's website said Friday the branch will be temporarily closed and told members to conduct their account transactions at other GVCCU locations and at shared branches, It's ME247 Online Banking or Phone Banking. GVCCU staff also were available around the corner at Thornapple Valley Community CU.

Vermont association board elected

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SOUTH BURLINGTON, Vt. (6/13/11)--The Association of Vermont Credit
Elected to the Association of Vermont Credit Unions board of directors last week were, from left, Jeff Morse, CEO of River Valley CU, Brattleboro; Susan Best of ORLEX Government ECU, Newport; and Bernie Isabelle, CEO of Vermont FCU, Burlington. (Photo provided by the Association of Vermont Credit Unions)
Unions announced the results of its board and officers elections at its annual meeting last week in Stowe, Vt. Bernie Isabelle, CEO of Vermont FCU, Burlington, was newly elected to the board. Directors re-elected include: Susan Best, board member, ORLEX Government ECU, Newport, and Jeff Morse, CEO of River Valley CU, Brattleboro. AVCU officers for 2011 are:
* Chairman--Sean Gammon, CEO, Members Advantage Community CU, Barre; * Vice chair--Susan Poczobut, CEO, Granite Hills CU, Barre; * Treasurer--Morse; and * Secretary--Best.

Melrose CU receives Hillman Marketing Award

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ALBANY, N.Y. (6/13/11)--Melrose CU, Briarwood, N.Y., has received the 2011 Ralph W. Hillman Marketing Award from Universal Sharing Network Inc. (UsNet).
Click to view larger image From left, Marc Inger, chief operating officer of UsNet, presents the 2011 Ralph W. Hillman Marketing Award to Robert Nemeroff, director of marketing and public affairs for Melrose CU, Briarwood, N.Y. (Photo provided by UsNet)
The award recognizes a participating UsNet credit union for exemplifying the spirit and enthusiasm consistently exhibited by the late Hillman in his support and marketing of the shared-branching network. The $1.4 billion Melrose CU increased its issuer volume by 16.3% in 2010 and its acquirer volume by 17.8%, according to Marc Inger, chief operating officer for UsNet. “The credit union consistently promoted the network to its members during a time in which Melrose experienced significant growth,” Inger said. “It proactively marketed the convenience and accessibility of shared branching in order to better serve its members.” Ralph Hillman served on the board of UsNet for five years and was chairman for nearly two years (2001-2003) before his death. UsNet has provided credit unions with a gateway to the national shared branching network since 1993. It is a partner with CO-OP Shared Branching, which offers participating credit unions and their members access to more than 4,000 CU Service Centers both nationally and internationally.

Maine CUs succeed in removing condo lien language

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PORTLAND, Maine (6/13/11)--The Maine Senate voted June 6 to pass a bill removing language that would give condominium lenders precedent over mortgage liens. The bill now goes to Gov. Paul LePage for his signature. The Maine House of Representatives had voted June 3, by an 86-37 margin, to pass the bill. The act was passed, in part, because of hundreds of calls and e-mails from Maine credit unions to the Maine House, and assistance from the Maine Credit Union League in working with key legislators (Maine league’s Weekly Update June 10). The Minority OTP-A Report removed the language that allowed for a priority lien for condo assessments, language which was opposed by the league. During debate on the House floor, several credit union friends in the legislature stood up in support of the Maine league’s position. “This legislation will hurt all lenders who make loans on condos--including our local credit unions and community banks. Lenders may stop lending on condo units all together, may require higher down payments or six months of fees escrowed at closing--adding costs to the borrower,” State Rep. Joan Nass (R-Acton), said in a floor speech. Other legislators who made remarks in support of the league’s position were two credit union board members: State Rep. Mike Lajoie (D-Lewiston), board chair at Lewiston (Maine) Municipal FCU, and State Rep. Herb Clark (D-Millinocket), board vice chair at Katahdin FCU, Millinocket. Both articulated their first-hand knowledge and experience serving on a credit union board, and highlighted the negative impact that allowing condo associations to have a priority lien would have on credit unions and consumers. Three other legislators--state Reps. Sheryl Briggs (D-Mexico), Jarrod Crockett (R-Bethel) and Maeghan Maloney (D-Augusta)--also spoke in support of the Minority Report OTP-A. “The response of credit unions to our calls to action on this issue was significant, and made a difference in the outcome of this legislation,” said league President John Murphy. “We also appreciate our many friends in the Maine House who spoke on this issue, and highlighted their support of Maine’s credit unions.”

NYIB annual conference set for July 25-28

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PITTSBURGH (6/13/11)--The National Youth Involvement Board (NYIB) will hold its 2011 Annual Conference at July 25-28 in Pittsburgh. Challenging participants to “Up Your Youth,” the event is a focused effort to support participants' youth outreach and help lower credit unions’ average member age. Among the conference headliners are:
* David Southall, CEO of Innovations CU, Panama City, Fla. and flash-mob expert; * Denise Wymore, creative strategist; * Rui Domingos, CEO of CPCU CU, Somerville, Mass.; and * Maya Bourdeau, president of the psychology-based marketing firm Attune.
Former University of North Carolina-Chapel Hill Professor Jane Hight McMurry will lead an optional pre-conference workshop on July 25. McMurry will share insight on effective communications with youth. Southall will open the conference general session with “How Do You Lower the Average Age of Your Membership? Up Your Youth!” General session and breakout topics include:
* The 2020 vision of marketing; * Leveraging community partnerships; * Financial football; * Student-run branches; * Virtual classrooms; * Bridging the generational gap; * Pay it forward with your best practice and have a minute to win it; * The psychology of today’s youth; * 17 classroom strategies to break through to kids; and * The hottest trends in reaching and teaching youth.
Organizations sending more than one participant save $100 for each additional person. Go online to see full session descriptions.

N.J. league outlines CU issues in magazine article

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HIGHTSTOWN, N.J. (6/13/11)--The New Jersey Credit Union League explains why New Jersey credit unions were able to maintain their level of success during rough economic times, in a special section in the June issue of COMMERCE Magazine dedicated to banking. “Credit unions stick to their mission of serving their members and don’t stray from that,” Paul Gentile, league CEO, explained. “We didn’t engage in exotic loan practices. We keep it simple” (The Daily Exchange June 10). The story also is featured on the cover of the magazine. Gentile provided a snapshot of New Jersey credit unions and the issues currently affecting them. He discussed trends affecting credit unions in deposits and lending, credit unions’ focus on lowering property taxes, social media--including the launch of the aSmarterChoice.org site, and credit unions’ adjustment to the Great Recession. The most important issue facing the state’s credit unions in 2011 is lowering property taxes by way of municipal deposits, Gentile said. Legislation passed in the New Jersey Senate that allows credit unions to accept these deposits, but it is currently stalled in the state’s Assembly. “Why shouldn’t credit unions be able to compete and give municipalities a better return on their money to help lower taxes?” Gentile asked. As for the future of New Jersey credit unions, Gentile said he expects them to have a growth spurt. “We currently have 1.2 million members,” he said. “I expect that to double in 20 years. I think credit unions will become more tech-savvy than ever and lead the way in consumer satisfaction, which will lead to more growth.”

Save to Win bill heads to North Carolina governors desk

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RALEIGH, N.C. (6/13/11)--The North Carolina House of Representatives Tuesday joined with the state’s Senate in unanimously passing its Save to Win bill. The bill now goes to Gov. Beverly Perdue’s desk. The governor, who is fully supportive of the credit union efforts on the measure, has 10 days to sign the bill or it automatically passes into law.
North Carolina credit union advocates played a key role in educating members of the General Assembly about Save to Win in April during State Capital Connections. State Rep. Efton Sagar (R-11) (second from right), the original bill sponsor in the House, is pictured here with representatives of the Southeast and Northeast Chapters.
Lauren Whaley (left), director of legislative and regulatory affairs for the North Carolina Credit Union League, and State Sen. Rick Gunn (R-24), a key proponent of SB 513, which passed the Senate unanimously in May, posed Tuesday after the North Carolina House of Representatives passed the Save to Win measure. (Photos provided by the North Carolina Credit Union League)
The bill exempts savings promotion raffles like Save to Win from the two-raffle- per-year limit imposed on credit unions. Gaining the exemption was necessary to allow for monthly prize drawings in Save to Win campaigns, which encourage credit union members to develop a regular habit of saving, said the North Carolina Credit Union League (The Weekly Update June 10). The bill also defines a savings promotion raffle under the general statutes governing credit unions, requiring that money be deposited into a special savings account to win. “This is a tremendous development for credit unions and a key step in helping them promote savings to their members in an exciting and innovative way,” said Lauren Whaley, league director of legislative and regulatory affairs. Whaley spent months building consensus on the legislation with members of the North Carolina General Assembly. Her efforts were bolstered in the spring by credit union visits from around the state as part of the State Capital Connections program. Whaley is in contact with the governor’s office to schedule a bill-signing ceremony in the next few days. About 10 North Carolina credit unions plan to roll out the first Save to Win campaign, which will likely happen early in 2012, Whaley said. “With the law passed, hopefully we\'ll add a few more credit unions to the fold,” she added. League President/CEO John Radebaugh praised the efforts in achieving a key legislative win. “When the league added Lauren’s position two years ago, we had outcomes like this one in mind,” he said. “Having a full-time, dedicated presence in the state capital is so important in leveraging our strong grassroots participation in North Carolina. Many people worked hard on this bill, and Lauren did a tremendous job quarterbacking the effort. This is a huge win for credit unions and their members.” In 2009, Michigan conducted the first Save to Win program in the U.S. Working with the Doorways to Dreams Fund, the Michigan Credit Union League and the Filene Research Group, eight credit unions launched Save to Win in January 2009. In that year-long campaign, 11,000 credit union members saved nearly $9 million. The Michigan program has subsequently been renewed and grown steadily, with more than 28,500 accounts opened and $37 million saved.

CU System briefs (06/10/2011)

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* MIDLANDS, S.C. (6/13/11)--A manager of the Midlands, S.C., branch of Columbia, S.C.-based Palmetto Trust FCU thwarted a robbery Thursday morning with action that took the would-be bandit by surprise. The manager, opening up for the day, unlocked the branch's door and found a man holding a gun at the door. She was so surprised that she immediately reached out and pushed him out of the building, then locked the door, said the Lexington County Sheriff James R. Metts. The manager told the sheriff's office that she believed the bandit was so surprised by her reaction that she was able to secure the door and call law enforcement. The man, wearing all dark clothing, a bandanna around his face and a cap, fled in a white or silver sedan with a Georgia license plate (WISTV.com June 10) … * MANCHESTER, N.H. (6/13/11)--The nation's oldest credit union announced it plans to build a new headquarters next year. St. Mary's Bank CU, based in Manchester, N.H., plans to demolish its 41-year-old headquarters and replace it with an energy-efficient three-story building, President/CEO Ron Covey told the New Hampshire Union Leader June 3). St. Mary's Bank CU has redone all its branches in the past four years and will break ground on a $5.5 million. A five year study concluded that it would be less expensive to build a new structure than to renovate the old inefficient and outdated building, Covey said … * EAST ST. LOUIS (6/13/11)--Sentencing has been scheduled for Sept. 16 for Stacy A. Mergelkamp, 33, a former financial operations officer at Belleville, Ill.-based Catholic and Communities CU, who was convicted Thursday of embezzling $38,000 from the credit union. Mergelkamp pleaded guilty to a single count of theft, embezzlement or misapplication by a credit union officer or employee (News-Democrat June 10) in federal court. The embezzlement occurred from December 2008 through August 2009 when Mergelkamp completed a series of cash advances against her personal credit card accounts and those of relatives, then altered the cash advance slips so the credit union deposited more money into her accounts than she actually withdrew from the credit cards. She faces up to 30 years in prison and a $1 million fine … * COVINA, Calif. (6/13/11)--The CEO of a former credit union that converted to a bank--Kay M. Hoveland of Kaiser Federal Bank, Covina, Calif.--has announced she will retire at the end of the month (American Banker Online June 7). The $900 million asset bank converted from the former Kaiser Permanente Employees FCU into a mutual savings association in 1999. It reorganized into a mutual holding company structure in 2003 and became a wholly owned subsidiary of K-Fed Bancorp. The credit union was founded in 1953 to serve employees of the Kaiser Foundation Hospital in Los Angeles (News Now Nov. 6, 2007). Hoveland has been with the bank since it converted from a credit union. Dustin Luton, the holding company's chief financial officers since 2006, will succeed Hoveland as CEO of the bank and president/CEO of the holding company … * WOODBRIDGE, Va. (6/13/11)--At-risk and disadvantaged youth got a
Click to view larger image Click for larger view
dose of financial reality May 26 when Belvoir FCU's Financial Education Program introduced a "Reality Cash Course" to 30 students from The House, an organization on the outskirts of Washington, D.C., focused on youth who are at-risk or disadvantaged. The course was presented and hosted by four volunteers from the credit union--Kelli Jo Anthon, Gaye DeCesare, Wanda Hagen and Ken Worthey Jr.--and four from The House--Leigh Ann Gordon, Todd McCormick, Jessica Streufert and Katrin Sydlik. Students were required to go through real-life scenarios and make financial decisions based on the life situation they were assigned. Belvoir is based in Woodbridge, Va. (Photo provided by Belvoir FCU) … * WARMINSTER, Pa. (6/13/11)--Freedom CU announced it is once again sponsoring the youth-based, financial literacy television series, Biz Kid$, now in its fourth season on WHYY. Biz Kid$ teaches young people about managing their money and how to start a business. It is now nominated for three Daytime Emmy Awards categories: directing; single camera photography; and editing. The series is underwritten by the American Coalition of Credit Unions and distributed by American Public Television. Each episode begins with the tagline: "Production funding for Biz Kid$ is provided by America's Credit Unions, where people are worth more than money" … * HARRISBURG, Pa. (6/13/11)--Christina Mihalik, vice president of governmental affairs for the Pennsylvania Credit Union Association (PCUA), has been appointed to the Pennsylvania Association of Government Relations (PAGR) Board as the association lobbyist representative. PAGR promotes the "purpose and effectiveness of the lobbying profession consistent with the public interest," said PCUA (Life is a Highway June 8). Members also encourage high standards of personal and professional conduct among lobbyists. "The appointment is a testament to Christina's lobbying efforts on behalf of credit unions," said PCUA President/CEO Jim McCormack. "Her role with the PAGR Board will definitely increase the circle of influence of Pennsylvania credit unions" …

Consumers not seeking help on finances say credit counselors

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WASHINGTON (6/10/11)--Every month, tens of millions of credit card statements are mailed to consumers. As a result of the Credit Card Accountability Responsibility and Disclosure Act, commonly known as the CARD Act, every statement is required to display a toll-free number directing consumers to nonprofit credit counseling agencies for help managing their finances. However, most consumers, including credit union members, do not seek help, according to the National Foundation for Credit Counseling (NFCC). NFCC provided a solution to issuers of credit cards, helping them comply with the mandate by providing a user-friendly National Locator Line (NLL) that automatically connects their customers to a network of nearly 800 community-based NFCC member agencies. As a result, the NFCC estimates that its toll-free line has been listed on 500 million statements since the implementation date of Feb. 22, 2010. Nonetheless, only 150,000 people have reached out for help with their financial situation, NFCC said. “The low response rate is confusing, particularly during this current economic environment where millions of consumers have serious financial concerns,” said Gail Cunningham, NFCC spokeswoman. “Consumers are doing themselves a disservice by not taking advantage of this resource, as reviewing their situation with a trained and certified credit counselor could provide solutions they’ve not considered.” One of the key features of the NFCC line is that callers are given the opportunity to connect to the closest local NFCC Member Agency, thus allowing consumers the choice of an in-person counseling session if preferred. “Since launching the NFCC CARD Act NLL 15 months ago, consumers have strongly demonstrated their preference for counseling through local NFCC Member Agencies by selecting the local option more than 75% of the time,” Cunningham said. “The NFCC line is the best solution for issuers and consumers, fully meeting compliance requirements, while providing consumers with multiple choices for high-quality financial counseling services.” For more information, use the link. Credit unions will have free alternatives when NFCC begins charging for its CARD Act NLL phone service on July 1 (News Now June 7). For instance, GreenPath Debt Solutions will provide a similar service for free, according to the Credit Union National Association (CUNA). GreenPath is a CUNA strategic provider. Its service will satisfy Regulation Z requirements that a toll-free number be listed among the loan repayment disclosures to help members obtain information about credit counseling services. Money Management International is also offering a free counseling line.

Michigan CUs add members deposits and branches

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LANSING, Mich. (6/10/11)--The Michigan Credit Union League reported growth in members, and branches statewide, according to quarterly call report data for the first quarter compiled by the National Credit Union Administration. The data also showed strong deposit growth, especially in the area of checking account activity. Most credit unions in Michigan still offer free checking accounts despite many new fees being added to checking accounts by larger banks. At a time when the U.S. Congress is implementing regulations that seek to add consumer protections for banking customers, Michigan’s credit unions continue to show improved strength and growth, especially in basic financial services such as checking accounts and small-business loans, the league said. Quarterly growth rates--shown as annualized numbers--include:
* Deposit growth was a very strong 15.6%, compared with 6.4% in the fourth quarter of 2010. * Credit unions’ free checking accounts grew by a rate of 22%, while typically lower-balance savings accounts grew by 41.6%, compared with 7.2% in the fourth quarter of 2010. * Credit unions grew their total employees statewide by 193 to 12,814, compared with 12,621 one year prior (March 31, 2010) and total branches grew also from 1,044 to 1,064 during the same period. * Small-business loans continued to grow despite enormous pressures on all types of lending in Michigan. Credit unions’ small-business loans surpassed $1 billion for the first time with growth of 10.7%, compared with a similar growth rate of 9.6% in the fourth quarter of 2010. * Total credit union membership continued to grow to 4,474,241, up 42,000 from March 31, 2010, one year prior, despite the state’s shrinking population. Michigan continues to enjoy the highest membership/population penetration (45%) of any of the 10 most populous states in the U.S., the league said.
“Consumers continue to see credit unions as a trusted, safe haven for their money despite the low-interest environment,” says David Adams, CEO of the Michigan Credit Union League. “The growth in checking accounts, total membership and small-business loans is particularly gratifying. Our state needs affordable basic financial services and access to business capital. Credit unions are the price and service leaders and people are responding to that in record numbers.” Credit unions also showed improvement in virtually all financial performance metrics that cover capital strength, earnings and liquidity. Highlights include:
* Net worth/total assets stood strong at 10.56% off slightly from 10.72% on Dec. 31, due to the effect of strong deposit growth. * Delinquent loans/total loans continued to improve with an overall delinquency rate of 1.60%, compared to 1.75% on Dec. 31 and down from 1.82% on March 31. Likewise, net loan charge-off losses also continued trending downward to 0.92% compared with 1.19% in December and 1.17% one year earlier (March 31, 2010). * Net earnings, expressed as a percentage of average assets improved to 0.79%, up from 0.55% in December and up from 0.32% on March 31, 2010. * Liquidity, expressed as the percentage of assets held in total loans (loans/assets) stood at 55.3%, down from 58% in December and 58.9% on March 31, 2010. Total credit union investments (money available to lend) grew to $12.7 billion, up from $10.6 billion one year earlier.
“Credit unions are strong and healthy, flush with capital to lend,” Adams said. “The challenge is in finding good loans where consumers and businesses can meet the more stringent regulatory requirements on lending. Credit unions are stretching to lend more than any other type of financial institution and they are well positioned to help Michigan’s economy moving forward.” (SEE RELATED STORY in today’s News Now: “Kansas CUs increase assets, loans”) News Now recently did a story covering U.S. credit union figures for the National Credit Union Administration’s first-quarter call reports.

Three CU loan fraud conspirators plead guilty

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BALTIMORE (6/10/11)--A Maryland woman, her brother and her boyfriend pleaded guilty in federal court in Maryland Wednesday to bank fraud conspiracy and aggravated identity theft in connection with a plan to obtain fraudulent loans at as many as 29 credit unions. Latesha Brown, age 26, of Edgewood, Md., pleaded guilty, as did Brown’s boyfriend, Christopher Houston, age 34, also of Edgewood, who pleaded guilty to the bank fraud conspiracy. Another conspirator, Brown’s brother, Donald Brown, age 31, of Elkton, Md., pleaded guilty to the bank fraud conspiracy on Monday (US Fed News June 8). U.S. Attorney for the District of Maryland Rod J. Rosenstein and Postal Inspector in Charge Daniel S. Cortez of the U.S. Postal Inspection Service-Washington Division announced the guilty pleas. Latesha Brown, Christopher Houston and Donald Brown face a maximum penalty of 30 years in prison for the bank fraud conspiracy. Latesha Brown also faces two years in prison, consecutive to any other sentence, for aggravated identity theft. U.S. District Judge James K. Bredar, has scheduled sentencing for the three in September. From September 2004 through August 2010, Latesha Brown was at the center of a conspiracy that involved a group of friends and family, including Houston and Donald Brown, who sought fraudulent loans, using falsely created, modified or stolen identities, from credit unions where Latesha Brown was employed, according to the plea agreements. Brown facilitated or processed the fraudulent loan applications for herself and others, including Houston and Donald Brown, accepting false paperwork and stolen materials, including: forged birth certificates and pay stubs; false drivers’ licenses, employment letters, and vehicle invoices; misappropriated Social Security numbers; stolen notary stamp seals; and bank paraphernalia, such as proprietary ink stamps. Brown allegedly also processed the loan applications in a deficient manner, intentionally failing to collect all of the necessary supporting paperwork for a loan, and assisted the co-conspirators in withdrawing their ill-gotten loan funds so as to avoid detection. From March 26, 2007, through August 5, 2010, Brown, using either a false name and/or the stolen identification information of other individuals, applied for jobs at 29 credit unions and for membership in 19 credit unions. In many instances, she also applied for loans in her own name and other names, using stolen identification information and forged documents. The conspirators applied for their loans using false pretenses, including vehicle loans with false dealership invoices where no vehicles were to be purchased, or where the vehicle was already owned outright by Houston. Brown facilitated the false vehicle loans so that the conspirators received clear titles to their “financed” vehicles without liens being placed on the vehicles. The absence of the liens meant the credit unions had no collateral when the conspirators defaulted on their loans, so the credit unions were prevented from seizing the vehicle or other assets after the individuals failed to make payments on the loan. Further, the use of the false Social Security numbers prevented the credit unions from tracking down the borrowers. Brown established a cellular telephone line exclusively for “Marybeth Wright,” a fictitious former supervisor, which she, Houston, and other conspirators used to receive phone calls from credit union personnel and other prospective employers seeking to confirm their prior employment history, according to the plea agreements. All of the individuals involved in the scheme, including Brown, Houston and Donald Brown, listed this number on their loan applications.

Kansas CUs increase assets loans

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TOPEKA, Kan. (6/10/11)--Kansas state-chartered credit unions saw an increase loans and assets during the first quarter, according to a report released this week by their regulator. State credit unions had $2.7 billion in loans for the three-month period ended March 31, up about 6 % from the same quarter a year earlier the Kansas Department of Credit Unions said in its quarterly call report statistics. Total assets were up almost 8% to $4.17 billion, the report said. Membership in state-chartered Kansas credit unions increased 10% to 599,834. Total delinquencies fell 14% in the quarter to $28.5 million. The March 31 return on average assets (ROAA) for all Kansas chartered credit unions combined was 0.82% compared to a ROAA of 0.71% as of Dec. 31. The ROAA for all Kansas chartered credit unions was 0.60% as of March 31, 2010. Michigan credit unions also experienced positive first quarter results. (See related story, “Michigan CUs add members, deposits and branches.”)

Aventa CU grows card portfolio with ice cream campaign

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COLORADO SPRINGS, Colo. (6/10/11)--At a time when credit cards--with reward programs, increased fees and flucating rates--seem more complicated than convenient, Aventa CU in Colorado Springs is implementing a more simple and refreshing approach to market its card program.
Click to view larger image Aventa CU Colorado Springs, Colo. hired a local ice cream vendor to hand out ice cream as a way of promoting its “plain vanilla” credit card program. (Photo provided by Aventa CU)
“We wanted to turn back the clock to a simpler time when credit cards were basic and children stood on the street corner for the ice cream man,” said Toby Hayes, Aventa’s director of marketing. “So, we began handing out ice cream cones to promote our ‘plain vanilla’ Visa cards. The idea really connected with people.” Aventa’s campaign began in February to make their membership aware of the no frills cards that include no annual or balance transfer fees and a fixed rate as low as 10.99%. As the weather got warmer, Aventa hired a local ice cream vendor to park his truck in each of the branch parking lots on rotating Fridays in April and May, handing out ice cream cones to people of all ages. A large banner read “Free ice cream--Celebrating our ‘plain vanilla’ Visa card,” as staff members handed out tickets and information about the cards. After giving out more than 200 ice cream cones, Aventa said it found the results the results of the campaign were an overwhelming success. “We’ve seen our credit card portfolio grow by 27% this year,” said Greg Mills, president/CEO. “The best part is, this campaign really gave our staff the opportunity to talk with members one on one and provide them with a practical financial solution.”

Debit card fraud is increasing says study

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PLEASANTON, Calif. (6/9/11)--Credit unions probably already suspect this, but a new study indicates that debit card fraud is increasing significantly. Debit fraud for 2010 represented 36% of all card fraud, an increase from 27% the year before, according to Javelin Strategy & Research's 2011 Identity Fraud Survey Report. Javelin is a Pleasanton, Calif.-based independent research and consulting firm specializing in financial services. About 1.4% of consumers surveyed are hit by debit card fraud every year--roughly the same as credit card fraud--but debit card fraud is more troubling because it amounts to a loss from the consumer's checking account, said the research firm in The Plain Dealer (June 5). It also is more inconvenient for consumers. Those experiencing debit card fraud typically wait seven to 10 days while their financial institution investigates the fraud, Javelin said. They spend roughly 28 hours making phone calls, dealing with their financial institution, and filing police reports over the matter. The typical debit fraud amount was $2,529, with consumers taking a hit of $795 on average out of pocket. Why is debit card fraud on the rise? According to the article, there are four factors:
* Thieves follow the trend; debit cards are more popular now than credit cards. Debit card use is growing at 15% a year, with 38 billion debit transaction payments in 2009, according to a Federal Reserve report released in December. Credit card payments are declining, and totaled 22 billion payments that year. * Although getting a personal identification number for a debit card is more difficult than for a credit card, criminals and debit card frauds are becoming more sophisticated. * Debit cards aren't monitored as thoroughly as credit cards. Visa and MasterCard networks have more thorough histories on individuals and can spot suspicious transactions faster. The debit card network, however, relies on the consumer's transaction history with a specific financial institution, not the entire Visa and MasterCard system, according to the Identity Theft Resource Center, a nonprofit consumer education organization in California. * Financial institutions are less likely to freeze debit cards when a suspicious transaction occurs because of the inconvenience related to prohibiting someone from accessing his own money.
Consumers should be monitoring their accounts every day, the article said.

Mich. CU taps high schoolers for theatre ads

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GRAND RAPIDS, Mich. (6/9/11)--With children of his own, Community West CU President/CEO John Looman knew that communicating with Gen Y wasn’t easy. “I know they think a lot differently than I do,” Looman told News Now. Looman enlisted a group of four local high school students to develop a 30-second advertisement to attract more Gen Y members to the credit union. The ad is now appearing in local theaters. Under the guidance of the credit union’s ad agency, Full Circle Marketing and Design, the students wrote, directed and shot the video, which revolves around a text-messaging theme. The credit union was under contract to advertise in Celebration Cinema theaters when Looman took over as Community West’s CEO earlier this year. He told News Now he wanted those spots to have a greater impact. He believed Community West needed to build a stronger connection with local schools. “We thought providing kids with real-world experience, teaching them about credit unions, and helping us connect with their peers was a formula for building a stronger relationship,” Looman said. The credit union originally recruited five students from Hudsonville High School in Grand Rapids--one student dropped out because of a scheduling conflict--and charged Full Circle to conduct a series of roundtables with the students and credit union representatives. “The object was to teach kids about credit unions then let them have the freedom to create a message that would attract their friends to the credit union,” Looman said. The ads just started airing in theaters, so Looman said it’s too early to measure the results of the campaign. But the project has already been a success based on the rewarding experience with the students, who each received $500 towards their college tuition, he said. Looman said he would like to expand the concept next year. “I would like to involve four or five schools and give them an even bigger task from a marketing perspective,” he said.

CUs participating in CFSI forum for underserved

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NEW ORLEANS (6/9/11)--The Center for Financial Services Innovation (CFSI) began its sixth Annual Underbanked Financial Services Forum Wednesday with Michael Joseph, the former CEO of Safaricom, delivering the keynote address. Several credit unions are participating. Joseph led the development of M-PESA--the only mobile payments system in the world to achieve scale. His keynote address, “Innovation Abroad: An International Mobile Payment Success Story,” shared lessons and insights on providing financial services to the underserved through mobile channels. Joseph also examined the mobile strategies he said will be the most successful in the U.S. marketplace and worldwide. Before the forum began, CFSI’s Underbanked Solutions Exchange, sponsored by Meta Payment Systems and New Market Partners, met to discuss external forces at play in the financial services marketplace and the meaning of “quality” financial services. The Underbanked Solutions Exchange is a collaborative group of mid-size banks and credit unions engaged in action-oriented discussions with other institutions--all with the goal of profitably and responsibly serving the underbanked. Participants include: Centris FCU, Omaha, Neb.; ESL FCU, Rochester, N.Y.; Kinecta FCU, Manhattan Beach, Calif.; Redstone FCU, Huntsville, Ala.; Self-Help CU, Durham, N.C.; Comerica Bank; Dollar Bank; El Banco de Nuestra Comunidad; Guaranty Bank; and Old National Bank. The forum continues through Friday. Featured speakers include: Chris McWilton, president of U.S. Markets, MasterCard WorldWide; J.C. Max Pedro, vice president of international financial services, Walmart International; Steven Streit, chairman/CEO, Green Dot Corp.; and Jane Thompson, president of financial services, Walmart Stores, Inc.

Iowa league to host Gen Y Summit

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IOWA CITY, Iowa (6/9/11)--More than 75 credit union CEOs, marketers, directors and executives are expected to attend the Iowa Credit Union League’s first-ever Gen Y Summit on Wednesday in Iowa City. “Many Iowa credit unions have implemented some creative strategies to reach and retain younger Iowans,” said Patrick S. Jury, league president/CEO. “This conference will bring together credit union representatives from across the state to collaborate and brainstorm new ideas and tactics they can implement in their own community.” The event will kick off with keynoter and facilitator Brent Dixon of the Filene Research Institute, who will discuss what the Gen Y market expects from its financial institutions. Dixon will share examples of credit unions that have successfully reached the Gen Y market. Charise Flynn of the social payment network Dwolla will explain how credit unions can integrate Dwolla to reach the younger demographic. A panel of representatives from Affinity CU, Des Moines; Collins Community CU, Cedar Rapids; Des Moines Police Officers CU; and Linn Area Community CU, Cedar Rapids, will share Gen Y initiatives they have implemented.

Cheney kicks off Dakotas conference via video

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FARGO, N.D. (6/9/11)--Bill Cheney, president/CEO of the Credit Union National Association (CUNA), was scheduled as the keynote speaker for the Credit Union Association of the Dakotas (CUAD) Annual Summit Opening Ceremonies that kicked off in Fargo, N.D., Wednesday, but instead did a video presentation. Because of this week’s developments regarding the vote on the amendment to delay the implementation of interchange, Cheney was needed in Washington, D.C., where he was meeting with senators whose votes are critical to credit union interests, said the Dakotas association. Cheney did appear at the summit in a 40-minute personalized address played on two movie-size screens at the opening ceremonies. His address also was simulcast to about 80 viewers unable to attend the summit in person this year. Cheney addressed the financial, regulatory and legislative environments of credit unions and thanked Dakotans for their support during the “Stop-Study-Start Over” grass roots movement on interchange. CUAD made three computers available to Summit attendees to use the “Capwiz” link to send messages regarding the interchange issue to legislators in Washington, D.C. Credit unions won the majority of votes Wednesday afternoon when the U.S. Senate weighed in 54 in favor and 45 against an amendment that would have required the U.S. Congress to stop, study, and start over on a statutory debit card interchange fee cap. However, a 60-vote majority was required to pass the delay (News Now June 8). After the vote, Cheney said credit unions are “deeply disappointed the Senate disregarded the more than half a million contacts made by credit unions and their members over the last three months in failing to pass the Tester-Corker amendment.”

Louisiana CU execs in Canada to study CUs

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HARAHAN, La. (6/9/11)--Louisiana credit union executives visited Servus CU in Edmonton, Alberta, Canada, this week to learn about the credit union’s successful business services department.
A group representing the Louisiana Credit Union League recently visited Servus CU in Edmonton, Alberta, Canada to learn about the credit union’s business services area. Participants on the study trip included, from left: Patrick Gullat, Barksdale FCU, Bossier City; Rhonda Hotard, Louisiana FCU, LaPlace; Karen Vines, La Capitol FCU, Baton Rouge; Carie Lopez, Jefferson Financial CU, Metairie; Jennifer Green, Louisiana Credit Union League; Debbie Varnam, Louisiana FCU; Deanna Geisler, Barksdale FCU; and Rod Taylor, Barksdale FCU. Not pictured: Anne Cochran, league president/CEO. (Photo provided by Louisiana Credit Union League)
The Louisiana Credit Union League (LCUL) organized the trip in conjunction with the World Council of Credit Unions (WOCCU). The group includes representatives from Barksdale FCU, Bossier City; Jefferson Financial CU, Metairie; La Capitol FCU, Baton Rouge; Louisiana FCU, LaPlace; and the league (eNews June 8). One of the travelers, Rhonda Hotard, president/CEO of Louisiana FCU, said she has seen a growing interest in business services from her membership. “Our members are looking for a financial institution to help meet their business needs, and they want to deal with a place where they know the people and where the decisions are made locally, so they naturally look to their credit union first,” she told the league. During the trip, participants learned about several facets of Servus CU’s business services operations: credit application, administration, underwriting, collections, business deposit accounts, cash management, payroll processing and employee solutions. Anne Cochran, LCUL president/CEO, said representatives from Louisiana credit unions have expressed an interest in not only offering loans, but providing a complete a complete menu of services to small business owners. “Through my role with WOCCU, we were able to identify a credit union with a very robust member business services department,” Cochran said. “We have learned so much during this trip, and I look forward to developing a plan of action so that we can help our credit unions meet the needs of their members who are also business owners.”

CU System briefs (06/08/2011)

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* ALBANY, N.Y. (6/9/11)--A man with one arm robbed a branch of State Employees FCU in Albany, N.Y. Tuesday afternoon. The man approached a teller and asked for money, but did not indicate he had a weapon, said police. The robber placed the money in a black plastic bag and fled on foot. No one was injured. He was described as a white male, about 5'9", missing his left arm below the elbow and wearing a baseball cap, oversized white T-shirt and white shorts. The incident happened just after noon Tuesday (Times Union and Associated Press via The Wall Street Journal June 7) … * GAINESVILLE, Fla. (6/9/11)--A man suspected of robbing Campus USA CU, a $1 billion asset, Gainesville, Fla.-asset credit union, fled via auto onto Interstate Highway 75 where motorists witnessed him tossing cash out of his car window (The Associated Press via The Miami Herald June 7). Motorists heading south on Interstate 75 called police minutes after the 11 a.m. robbery on Tuesday, saying money was being thrown from a car. The suspect was pulled over at 11:30 a.m., authorities said. Deputies briefly closed sections of the interstate to look for cash. No other details were not immediately available, the newspaper said … * WESTPHALIA, Mich. (6/9/11)--A man allegedly admitted to three previous bank robberies after he was caught robbing a Westphalia, Mich.-branch of Portland FCU, said police. The suspect fled the credit union with a large sum of money shortly after 9 a.m. and was seen by a credit union employee leaving the scene in a vehicle. Police identified the car and pursued the man about 9:30 a.m. (The Morning Sun June 7). When traffic boxed in his vehicle, the man fled on foot and was captured by police shortly thereafter. He later admitted robbing three other area banks in addition to the credit union, according to police …

Two sets of CU mergers filed in California

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SACRAMENTO, Calif. (6/9/11)--Two sets of California credit unions filed merger applications in May, according to the California Department of Financial Institutions. 1st Choice FCU, an $8.2 million asset credit union based in Castro Valley, is slated to merge into SF Police CU, San Francisco, a $634.5 million asset institution. 1st Choice was founded in 1963 and is a multiple group credit union serving primarily healthcare employers. It has two branches--one in Castro Valley and one in San Leandro. SF Police FCU, founded in 1953, serves San Francisco police officers and has four branches-- two in San Francisco, one in San Mateo and one in Pleasanton. Also, Pacifica-Coastside CU, Pacifica, a $1.66 million asset credit union, intends to merge into San Francisco Fire CU, a $676.4 million asset credit union. Pacifica-Coastside was founded in 1958 and has a multiple group field of membership primarily serving government entities. It has one branch in Pacifica. San Francisco Fire CU, founded in 1950, serves San Francisco firefighters, and has two branches in San Francisco.

ATM-fee sticker lawsuits hit Carolinas

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MADISON, Wis. (6/9/11)--Three banks in North and South Carolina are the latest targets in a string of lawsuits brought by a Michigan couple challenging financial institutions' fee-disclosure signage on ATMs the past two years. So far, no lawsuits were filed against credit unions in the Carolinas. However, at least six credit unions have been among the 39 financial institutions sued in the past two years by the couple (Associated Press Newswires April 22 via News Now April 25). The Carolinas are the 17th and 18th states in which suits have been filed. Nancy Kinder and Ray Harrison of Fowlerville, Mich., drive around looking for ATMs without proper fee-notification signs and photograph the machines, then file class-action lawsuits against financial institutions without the stickers. The lawsuits claim that nondisclosure of fees charged for transactions at ATMs violates Regulation E, the Electronics Funds Transfer Act. The act requires financial institutions to post a notice in a prominent place on the ATM. Kinder sued First Federal Savings and Loan Association of Charleston, S.C., in the Florence division of the U.S. District Court of South Carolina on May 31, and First Bank of Troy, N.C., in the Charleston division of the U.S. District Court of South Carolina on May 31. A third bank, Southern Community Bank and Trust, Columbia, S.C., reported it had been summoned (ATM Marketplace June 7). Kinder also has filed cases against:
* Lenco CU, Adrian, Mich., with $51 million assets; * Michigan Schools and Government CU, Clinton Township, more than $1.04 billion assets; * Jackson (Mich.) Community FCU, $29 million assets; * Northwood CU, Royal Oak, Mich.,$20 million assets; * ELGA CU, Burton, Mich., $260 million assets; * Sunrise Family CU, Bay City, Mich., $90 million assets. On Oct., 21, the case was "dismissed with prejudice and without costs, sanctions or attorneys' fees awarded in favor or against either party," said court documents; * United Bancorp Inc.; * Paramount Bank; * Bestbank; * Dearborn Federal Savings Bank; and * Community State Bankcorp. That lawsuit closed Dec. 23, 2010.

CAP COM FCU to acquire Baxter CU branch

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ALBANY, N.Y. (6/8/11)--Albany, N.Y.-based Capital Communications (CAP COM) FCU has announced it is taking over the Glen Falls, N.Y., branch of Baxter CU (BCU), which is headquartered in Vernon Hills, Ill. CAP COM said it will take over the Baxter branch, which serves about 570 employees and family members of Navilyst Medical, a medical device manufacturer, in Glen Falls. They expect the transition to be completed June 13 (timesunion.com and The Business Review June 6). CAP COM, which has assets of $874 million and 80,000 members, was formed in 1953 as Capital District Telephone Employees FCU serving the New York Telephone Co. It has 200 employees and 10 branches. BCU is one of the nation's largest credit unions, with more than $1.45 billion in assets and 140,000 members in the U.S. and Puerto Rico. The branch will become CAP COM's 11th branch in the Albany market.

Kinecta NuVision mega-merger may be as early as 2012

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MANHATTAN BEACH, Calif., and HUNTINGTON BEACH, Calif. (6/8/11)--The $4.7 billion asset mega-merger planned for two federal credit unions in Southern California has been in the works for more than a year, culminating in a 700-page application document filed Friday with the National Credit Union Administration (NCUA), according to the CEO of both institutions. "Our target date for the merger is January 2012, although that will depend on NCUA's review process, which has no discrete time frame," said Roger Ballard, CEO of both the $1.2 billion asset, Huntington Beach-based NuVision FCU and Kinecta FCU, a $3.5 billion asset credit union headquartered in Manhattan Beach, Calif. Since June 1, 2010, Ballard has been CEO of both credit unions. He was CEO of NuVision first. Because the two credit unions' boards were in talks about a potential merger when the CEO position at Kinecta became vacant, he went through the search process and Kinecta's board hired him with the full knowledge of NuVision's board. "We have two healthy, well-capitalized credit unions serving more than 300,000 members with 51 branches and 112 ATMs," Ballard said. Kinecta's capital-to-assets ratio is over 7.74% and will likely increase to 8.0%, and NuVision's is "over 10% and we plan to maintain that." Although the economy has affected just about all organizations and "everyone has experienced bumps in the road," this year, going forward is better than last year, he noted. The next step moves on two tracks, he told News Now:
* Tracking the merger application that the credit unions filed with NCUA. NCUA had expected the application because the credit unions had sought input regarding the types of information the agency needed and questions that needed addressed. "We plan to continue that dialogue," Ballard said. * Working with the credit unions' team for integration planning. "We're planning for success" on the merger, he said. "We won't execute the plans during 2011, but we'll be ready to move when the application goes through."
Once the merger approval arrives, with specifications from NCUA about the ballot and special meeting required, Nu Vision FCU members will go through the voting process since Kinecta FCU will be the continuing credit union. Ballard said he hopes the voting process can be held during fourth quarter. It will largely depend on how fast NCUA moves through those 700 pages of documents. Ballard said the documents answered major questions NCUA would want to know. For example, NuVision has succeeded with other mergers in the past and has experience with the merger process and NCUA's requirements. Many pages dealt with standard forms that included a high level integration plan on the operations of the two credit unions and the combined credit union, information about each of the functions the credit unions perform such as lending; and a focus on the financials and the interest-rate-risk calculations. The merger would be the second largest in assets, after the $4.9 billion combination of First Technology CU and Addison Avenue CU. Even such a large merger won't create a "too big to fail" situation like banks have faced, Ballard said. "Those in the credit union industry are still very small players in the financial services landscape," he said. "Too big to fail doesn't apply to us. We're smaller players and cooperatives serving members, not serving stockholders. Mega banks truly pose a systemic risk " to the economy. The merger will mean "exciting member benefits" mostly related to the credit unions' focus as financial cooperatives, but it also means the continuing credit union will have opportunities in the greater community, with a larger footprint in Los Angeles and Orange Counties. It also will enhance the credit unions as full-service financial institutions, with investment and mortgage services offered, Ballard said. And with its $4.7 billion in assets, it can enhance the service available through 51 branches and 112 ATMs. "We have a really great opportunity to serve more consumers," he concluded.

Mullet man robs remote teller

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COLUMBUS, Ohio (6/8/11)--A serial robber sporting a trademark “mullet” appears to have robbed a remote teller at First Service CU, Columbus, Ohio, on Monday. The robber walked into the branch about 9:30 a.m. on Monday and confronting a employee sitting at a desk, he displayed a note stating that he was robbing the credit union, had a gun and wanted cash (WSYX ABC6). The employee did not have access to cash, but she walked the robber to a location in the branch where they could communicate with a remote teller located in a different part of the building. The employee informed the remote teller that a robbery that was taking place. After obtaining cash from the remote teller, the robber fled the branch. The suspect, dubbed the “Mullet Man Bandit” by the FBI, is also tied to two other bank robberies in central Ohio. Employees of the credit union said they identified the man as the “Mullet Man Bandit” when he entered the branch, but were unable to stop him or contact authorities.

US FCU benefits members 2313 on average

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BURNSVILLE, Minn. (6/8/11)--US FCU (USFCU) members on average saved $2,313 last year just by doing business with it, said the Burnsville, Minn.-based credit union. A recent study by the Credit Union National Association (CUNA) rated the overall value provided to members of the $802.6 million-asset credit union. The survey found that USFCU saved its members $9,678,911 in 2010 because they chose USFCU over other local financial institutions. Savings accrued from lower loan rates, higher deposit rates and fewer and lower fees offered by the federally insured, not-for-profit financial institution. As Minnesota’s first financial cooperative, USFCU said its brick and mortar is its membership and its ‘not for profit, not for charity, but for service’ philosophy. “It is so important to US Federal that we remember and reward those that have been a part of our community and our credit union family,” said USFCU President/CEO Bill Raker. “Our members have figured out how to best benefit from us … the more they utilize our products and services, the more they save.”

Pa. MBL paper Programs thrive with safe practices

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HARRISBURG, Pa. (6/8/11)--A white paper created in conjunction with the Pennsylvania Credit Union Association (PCUA) indicates that member business lending (MBL) programs are thriving and performing in safe and sound ways when provided thoughtfully, logically and collaboratively. The paper was written by Wayne Grinnik, CEO of Keystone Business Lending Solutions LLC; Jim McMahon, CEO of Member Business Financial Services LLC; and Molly Snody, PCUA director of business advisory services (Life is a Highway June 7). Building a Footprint for Solid Member Business Lending Practices focuses on a group of 20 credit unions represented by the two credit union service organizations and PCUA. “Underwriting is the most critical step in any lending process, particularly in commercial lending where the loans are not cookie cutter and each industry brings its own risks,” according to the authors. “That being said, the philosophy of the group is to ‘underwrite as if you retain the loan’ each and every time; regardless of whether the loan may be eventually sold or participated. “Consistency in the underwriting process has been key in providing consistent performance results,” the paper added. At the time of a loan approval--and also throughout the life of the loan--a strong and consistent risk-rating system is crucial, as is loan documentation--especially when a default occurs--the authors said. Some other key findings of the report are:
* The philosophy of the group is to grow their business lending portfolios in small, manageable increments. Many credit unions polled said they wanted to fully understand the process and “the beast” before their portfolios grew too large too quickly. Each credit union found that a slow, controlled growth allowed it to more clearly define its risk appetite. * Clients are taught that business lending is relationship lending. Each credit union is encouraged by the authors to not only seek out loans, but also the depository and other ancillary products that add to the whole relationship. This not only allows clients the right of offset in the event of a default, it also supplies a low-cost source of funds. * Some members of the group are near their business-lending cap. They often sell part of their loan interests to other credit unions. The sale of performing loans is a great tool in not only staying within regulatory guidelines, but also a tool in managing and diversifying their loan portfolio to avoid concentrations of credit, the report said. * Continual education is paramount, because business lending is complex and “you can’t hear this stuff once and get it,” the authors wrote.
The 20 credit unions range in total assets from $37 million to $1.1 billion. Total assets of the group exceed $4.3 billion. Geographically, the locations of the credit unions span from the far western counties of Pennsylvania, heading across the state into Delaware. To read the paper, use the link. The Credit Union National Association (CUNA) and credit unions are trying to get Congress to increase credit unions’ MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

Two Catholic CUs merge in Minnesota

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LITTLE CANADA, Minn. (6/8/11)--St. John’s of Little Canada (Minn.) CU, with $19 million in assets, will acquire $6 million-asset Minnesota Catholic CU, Spring Lake, Minn. through a merger. Due to the broader field of membership it will serve, St. John’s Catholic CU will operate under the Minnestoa Catholic CU name. The anticipated effective date of the merger is July 1. St. John’s CEO David Sawin will lead the new organization. The Minnesota Commerce Department has given regulatory approval to the merger. National Credit Union Administration approval is expected shortly, St. John’s of Little Canada CU said. Minnesota Catholic’s branch will remain open. It’s president, Jill Hein, will retire.

Nebraska league service award officers announced

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OMAHA, Neb. (6/8/11)--The Nebraska Credit Union League awarded its 2011 Professional of the Year distinguished service award June 3 in Omaha, and also announced new officers for its league board and Cooperative Solutions Group board. The league honored Ken Bradshaw, president/CEO of Liberty First CU in Lincoln, as the 2011 Professional of the Year.
Bradshaw began his credit union career at the age of 29 as president/CEO of Oklahoma Highway CU, now Oklahoma Employees CU, in Oklahoma City, Okla. He also served as vice president of operations at Northeast CU, Portsmouth, N.H. During his 19 year career at Liberty First, he took the small one-building credit union and turned it into the largest credit union in Lincoln, with three branches, $145 million is assets and more than 16,000 members. Bradshaw has held several leadership positions with the league, including chairman of the board, a position he was re-elected to on June 3. Bradshaw also serves as chairman of the league’s Governmental Affairs Committee and was the first chairman of the league’s Cooperative Solutions Group board. New league board officer elected are:
* Chairman--Bradshaw; * First vice chair--Mary Johnson, president/CEO, Omaha Police FCU; and * Second vice chair--Ronny Miller, president/CEO, Gallup FCU, Omaha;
Cooperative Solutions Group officers are:
* Chairman--Johnson; * Vice chair-- Miller; and * Secretary/treasurer--Stan Fraser, president/CEO, Nebraska Energy FCU, Columbus,
Each officer will serve in the position until the reorganization meeting on June 8, 2012.

CU System briefs (06/07/2011)

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* COON RAPIDS, Minn. (6/8/11)--A Minnesota mortgage broker was convicted by a federal jury Thursday in a mortgage loan fraud that netted $4.6 million from local lenders, including Anoka Hennepin CU. John Anthony Spencer, 31, brokered fraudulent loans used by recruited purchasers to buy residential real estate at inflated prices in St. Paul, North Minneapolis and Albertville, Minn. He allegedly recruited two co-defendants, Patrick A. Dols, a fellow mortgage banker at Mortgage One, and Bryan J. Lenton, a real estate appraiser, to sell condominiums at inflated prices. They pocketed the extra money as well as kickbacks to buyers. He was found guilty on one count of conspiracy to commit mortgage fraud through interstate wire, 10 counts of wire fraud, and one count of money laundering. Court documents said Spencer borrowed more than $700,000 from the Coon Rapids, Minn.-based credit union to close on his home and received a $73,000 kickback at closing without the credit union's knowledge. Spencer also took out second mortgages on two investment properties secured with phantom equity. He faces a maximum of five years in prison on the conspiracy charge, 20 years each for wire fraud charge, and 30 years on the bank fraud charge (St.Michael.Patch.com June 3) … * CHARLESTON, W.Va. (6/8/11)--A Winfield, W.Va., woman has been indicted for fraud related to obtaining more than $80,000 in loans from her former employer, Charleston, W.Va.-based Star USA FCU. Michelle Morris, 37, was charged Thursday with bank fraud and making false entries by using relatives' names and identification information to obtain the loans. Proceeds from the loans were used to pay off earlier fraudulent loans, the indictment said (The Associated Press via The Republic June 3) … * MADISON, Wis. (6/8/11)--Payments solutions provider Harland Clarke raised $1,600 for the National Credit Union Foundation's (NCUF)
Click to view larger image Click for larger view
CUAid relief efforts for credit unions during a recent CUNA CFO Council conference in San Diego. The CUNA Strategic Services provider pledged a $10 donation for each of the 80 attendees who stopped by its booth; it then matched the $800 pledged. The funds will go to CUAid's current relief campaigns: one for a Joplin, Mo., tornado in late May and one for severe storms in the South in April. Harland Clarke, a longtime NCUF supporter was a sponsor of the conference and is a gold sponsor of NCUF. "Harland Clarke is committed to the credit union community and recognizes the critical role that donations and awareness provide to support humanitarian efforts such as CUAid," said Wes Millar, senior vice president of CUNA Strategic Services. From left: Jerry Austin, executive director, Harland Clarke; Ron Hasebrooke, director, Client Development Group, Harland Clarke; Tom Candell, NCUF deputy executive director/chief operating officer/chief financial officer, NCUF; and Christopher Morris, communications director, NCUF. (Photo provided by CUNA Strategic Services) … * MADISON, Wis. (6/8/11)--Madison, Wis.-based UW CU received the FIS/UNISYS FIRST Award for innovation in providing members free online access to their credit scores. Among the nearly 100 FIS/UNISYS clients nationally, UW CU was chosen as sole recipient of the award, which includes a $10,000 donation to UW CU's charity of choice, the American Family Children's Hospital. UW CU launched My Credit Score, a free online tool that provides members free access to their credit score, on Sept. 13. It also presents resources to help monitor changes in credit scores over time and to improve individual scores. So far, more than 131,000 members received their credit scores online, and more than 24,000 used the in-depth tools to understand and potentially improve their credit score …

CUANY honors outstanding volunteers pros

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ALBANY, N.Y. (6/8/11)--The Credit Union Association of New York honored its outstanding professionals and volunteers at its annual meeting in Lake Placid, N.Y., last week.
Click to view larger image Credit Union Association of New York’s 2011 Credit Union Professionals of the Year are, from left: Barbara Dillon, CEO, SUNY Geneseo, Geneseo; Bob McFadden, executive vice president, Finger Lakes FCU, Geneva, and Michael Parsons, president/CEO, First Source FCU, New Hartford.
Click to view larger image Jessica Herishko, Columbia Greene FCU, Hudson, N.Y., was honored as the 2011 Young Professional of the Year by the Credit Union Association of New York last week in Lake Placid.
Click to view larger image Credit Union Association of New York’s 2011 Credit Union Professionals of the Year are, from left: Barbara Dillon, CEO, SUNY Geneseo, Geneseo; Bob McFadden, executive vice president, Finger Lakes FCU, Geneva, and Michael Parsons, president/CEO, First Source FCU, New Hartford. 2011 Volunteers of the Year honored by the Credit Union Association of New York, are from left: Robert Angelhow, chairman, supervisory committee, AmeriCU CU, Rome; Carol Thompson, volunteer marketing director and assistant treasurer, Greece Community FCU, Rochester; and Steve L. Brooks, board member, Northern FCU, Watertown (Photos provided by Credit Union Association of New York)
Executives recognized as outstanding professionals in three asset size categories are:
* Less than $50 million in assets--Barbara Dillon, CEO, State University of New York (SUNY) Geneseo (N.Y.) FCU, Geneseo, N.Y. Dillon negotiated a contract extension with SUNY Geneseo, securing the credit union’s location for an additional five years and the installation of two new ATM machines on the university campus. She also implemented a marketing plan that increased credit union member accounts by 240, mortgage loan volume by 38%, mortgage funds loaned by 44% and online banking usage and online statements to 89%. * $50 million to $250 million in assets--Bob McFadden, executive vice president, Finger Lakes FCU, Geneva, N.Y. McFadden consolidated the credit union’s multiple card programs under one third-party vendor and created the credit union’s first-ever internal communication platform, The Bullet. McFadden also established and chaired a formal, internal regulatory team to ensure staff awareness of regulatory changes. * More than $250 million in assets--Michael Parsons, president/CEO, First Source FCU, New Hartford, N.Y.. Parsons serves as vice chairman of both National Association of Federal Credit Unions (NAFCU) and NAFCU Services Corp., as chairman of the Small Business Council and as a board member of various community organizations.
The league’s first Outstanding Young Professional Award winner was Jessica Herishko, loan officer at Columbia Greene FCU, Hudson. In 2010, Herishko helped the credit union implement a new, in-house debit and credit card system and now handles all aspects of its operation. She also leads an employee activity committee at the credit union. Volunteers recognized as outstanding volunteers in three asset size categories are:
* Less than $50 million in assets--Carol Thompson, volunteer marketing director and assistant treasurer, Greece Community FCU, Rochester, N.Y. * $50 million to $250 million in assets--Steve L. Brooks, board member, Northern FCU, Watertown, N.Y. * More than $250 million in assets--Robert Angelhow, chairman, supervisory committee, AmeriCU CU, Rome. N.Y.

IForbesI column Is it time to fire your bank

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NEW YORK (6/7/11)--For the second time within a week, Forbes.com has reported favorable information about credit unions. Forbes' Financial Finesse columnist Liz Davidson writes in "Is It Time To Fire Your Bank?" that consumers sick of earning pennies on their savings account while paying their bank more and more in fees can go elsewhere where "you might still be able to increase the interest rate you're getting and decrease the fees you're paying while still keeping your money safe and accessible." She suggests three alternatives: credit unions, online savings accounts and rewards checking accounts. Note that credit unions are the only financial institutions mentioned. About credit unions, she wrote: "Since they're non-profit, credit unions tend to pay more interest and charge less in fees than their for-profit bank counterparts. That doesn't mean they skimp on service though. Credit unions are known for their customer service and generally rate higher than banks in overall customer (or what credit unions call 'member') satisfaction." She also points out that there are limits on which credit unions a consumer may be eligible to join. Last week, Forbes' blog, in "Pros and Cons of Credit Unions--and There Aren't Many Cons," said the advantages of credit unions far outweigh the disadvantages (News Now June 3).

Local CUs lending more CUNA tells IWash. PostI

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WASHINGTON (6/7/11)--Credit unions in the Washington, D.C., area are outpacing their peers nationwide in making loans because that area has a strong economy to help maintain consumer and business confidence, Credit Union National Association (CUNA) senior economist Mike Schenk told the Washington Post. Schenk, who is CUNA's vice president of economics and statistics, was quoted extensively in "Local credit unions are lending more," which appeared in Monday’s Capital Business, a local business journal published weekly by the Post. Excluding the world's largest credit union, which can skew financial indicators, local loan portfolios grew 2.2% on average, Schenk said, adding that first mortgages registered at 9.2%. As a whole, he said, local credit unions have benefited from the resilience of the regional economy, which isn't experiencing the lull in loan demand experienced in the rest of the country, he said. "If you have a fairly strong economy, relatively low unemployment, housing values that have held up, wealth that hasn't declined as much as in other areas of the country, that typically translates into people feeling more confident and secure about taking on additional debt," Schenk said. He also explained, however, that overall loan growth is "weak relative to what we would normally see in a recovery, reflecting that there is still a tremendous amount of uncertainty in the marketplace and a focus on paying down debt." Reductions in operating expenses and loan loss provisions have helped bolster income for credit unions, despite a decline in fee income and narrow net interest margins, Schenk said. Local credit unions' return on assets was 1.24%, compared with 0.79% nationally during the 12 months through March. The Washington area has about 125 credit unions. Their lending increased less than 1% for the 12 months ending in March, compared with a nationwide decrease for that period of 1.1% in loan growth, said the Post. Loans to buy used autos grew 7.6%, first mortgages were up 4.8% and member business loans soared 38.2% in the area, the article said, citing data from the National Credit Union Administration.

Kinecta NuVision FCUs apply for second-largest merger

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MANHATTAN BEACH, Calif., and HUNTINGTON BEACH, Calif. (6/7/11)--Two large Southern California credit unions--Kinecta FCU and NuVision FCU--have filed an application with the National Credit Union Administration (NCUA) to merge, the credit unions announced Monday. If approved, the merger would be the second largest, resulting in a credit union with 300,000 members, $4.7 billion in assets, and 51 branches and 112 ATMs primarily throughout Los Angeles and Orange Counties. Members also would have a wider choice of products and services. The credit unions could also take advantage of economies of scale to provide added resources to expand branches, products, member service initiatives and electronic delivery channels. The credit unions' boards approved moving to the next phase of the merger process after due diligence confirmed the added benefits of a combined organization for their members, sponsor companies and communities. The two credit unions are healthy and well-capitalized, they said, and share Southern California roots in the aerospace industry and complementary branch networks, product/service offerings and membership bases. Roger Ballard, currently joint CEO of the $3.5 billion asset Kinecta and $1.2 billion asset NuVision, will become CEO of the new combined organization, which will retain the Kinecta name and charter. Pending regulatory approval, the merger will be put to NuVision member vote. Kinecta, headquartered in Manhattan Beach, was founded as Hughes Aircraft Employees FCU in 1940. It now serves employees of Boeing Satellite Systems, Raytheon Systems Co., DirecTV and other select employer groups. NuVision, founded in 1935, is headquartered in Huntington Beach and was founded to serve employees of Douglas Aircraft Co. It now serves aerospace employees, primarily from Boeing; Sempra Energy employees and community members in Southern California.

Survey CUs view small-biz segment as critical feasible

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BOSTON (6/7/11)--About 20% of credit unions believe they are now better positioned to penetrate the small-business market than they were before the financial crisis, according to a report from researcher Aite Group. Based on the results of an online survey of 83 U.S. credit unions conducted by Aite Group in December and January, the report considers ways in which credit unions can leverage technology--remote deposit capture, online business banking applications, mobile banking and social media--to serve small businesses. Credit union penetration into the small-business segment is low, and limited primarily to microbusinesses, according to Aite Group. Even the 1,000 largest U.S. credit unions, which are more likely to focus on small business than smaller credit unions, tend to offer limited business services. But that trend is slowly changing as more credit unions have begun to view small-business members as critical to their future success. Also, 17% of credit unions surveyed said they believe small businesses will account for between 11% and 30% of their total member base within three years, compared with only 4% currently the report said. “New and proposed regulations, the need to identify new revenue streams, and a slowdown in membership growth are driving credit unions to grow their penetration in the small-business market,” said Christine Barry, Aite Group research director and author of the report. “Winning small businesses will not be easy, however; it will require a well-thought-out strategy and effective use of strategic technologies. For those institutions with the right plan in place, the rewards will far outweigh the costs.” The Credit Union National Association (CUNA) and credit unions are strongly supporting bills in Congress that would lift the cap on credit unions’ member business lending (MBL) to 27.5% of assets from 12.25% so they can lend to more small businesses. CUNA has estimated that lifting the MBL cap could provide up to $13 billion to small businesses in the first year alone and create over 140,000 new jobs, at no cost to taxpayers.

CU System briefs (06/06/2011)

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* JACKSON, Mich. (6/7/11)--A Jackson, Mich., judge reduced the sentence of Terry L. Brandt, 60, to three to 20 years in prison for stealing more than $100,000 from the former Cascades Community FCU, Leoni Township, Mich., while he was the credit union's chief financial officer and treasurer. Brandt was sentenced in 2008 to five to 20 years in prison, but the Michigan Court of Appeals ruled his sentencing guidelines had been improperly calculated. Jackson County Circuit Court Judge John McBain reduced the sentence, based on Brand's good institutional record, a lack of a significant past criminal history and his health. Brandt has been working to tutor other prisoners. The thefts occurred when Brandt wired money from the credit union's general account to his personal stock trading accounts at least nine times between October 2006 and January 2008 (Jackson Citizen Patriot June 2) … * POTTSVILLE, Pa. (6/7/11)--Jennifer L. Doyle, 31, of Port Carbon, Pa., pleaded guilty Thursday in Schuylkill County Court to stealing more than $58,295 from Pottsville-based Hidden River CU while she was employed there. She was charged with theft by deception, tampering with records or identification and misapplying entrusted, government or financial institution property. Doyle took investment interest checks between January 2077 and February 2010, and did not allocate them to the correct accounts. Instead she deposited the checks in her accounts and hid the deposits. She faces a possible maximum sentence of seven to 14 years in prison (Republican Herald.com June 3) … * PHOENIX (6/7/11)--Austin De Bey, vice president of governmental affairs with the Arizona Credit Union League (ACUL), is this year's recipient of the Arizona Credit Union Foundation's annual Gary L. Plank World Council of Credit Unions' (WOCCU) Young Credit Union Professionals Progam (WYCUP)Scholarship. The program promotes credit union professionals under the age of 35 years. As Arizona's 2011 WYCUP representative, De Bey has been automatically nominated for one of five scholarships WOCCU will award to attend the 2012 World Credit Union Conference in Gdansk, Poland. Scott Earl, ACUL president/CEO, noted that De Bey is already distinguishing himself as a true credit union leader in his work representing the state's credit union movement with lawmakers … * ATHENS, Ga.(6/7/11)--Duluth, Ga.-based Georgia United CU celebrated the completion of its Athens branch remodel and building-
Click to view larger image Click for larger view
expansion project with an Open House Thursday. The renovation was kick-started after a car crashed into the lobby nearly a year ago. The event included Visa gift card drawings and a lunchtime cookout. The project took longer than expected because the branch remained open during the renovation. The facility now has five member services offices, expanded lobby and teller areas, and drive-through lanes. From left are: Doug Foote, senior vice president; Stan Howe, builder and owner of Howe Construction (who treated guests to the cookout); Bill Bland, Athens District director; Yukeya Holloway, branch manager; Warren Butler, president/CEO; and directors Jack Lavender, Tom Cochran, Dr. Jim Williams, and Dr. Stephen Whatley. (PHOTO provided by Georgia United CU) … * HARRISBURG, Pa. (6/7/11)--Ron Lasich, 66, president/CEO of Visionary FCU, Bridgeville, Pa., and former *chairman of the Pennsylvania Credit Union Association (PCUA) died Saturday. Lasich served as association board chairman in 2002-2004, and was chairman of the Pennsylvania Credit Union Foundation from 2004 to 2006. Among his accomplishments: he helped establish the Pennsylvania Capitol View Room of Credit Union House in Washington, D.C., and was instrumental in beginning the process of board governance and streamlining the PCUA board. In 2009, Lasich was inducted into the Credit Union House Hall of Leaders. Funeral services are today at 10 a.m. ET in Nativity Church, Pittsburgh, Pa. …

Latin American CUs boost efforts to serve poor

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QUITO, Ecuador (6/7/11)--Latin American credit unions have provided financial services to the rural poor, powered by new technologies and time-tested strategies, but there are still many more people to serve. How to increase market penetration and reach more underserved communities was the focal point of a World Council of Credit Unions (WOCCU) conference held last month in Ecuador.
Attendees at the International Rural Finance and Financial Inclusion Congress in Ecuador to discuss ways to increase service to rural members included (from left) Mark Cifuentes, senior vice president of technical services for World Council of Credit Unions; Dolores Rivera Ramírez, Caja Zongolica, Mexico; Xavier Loma, Cooperativa CACPECO, Ecuador; and Margarito Saavedra Morales, Caja Yanga, Mexico. (Photo provided by the World Council of Credit Unions)
More than 300 directors, managers and employees of credit unions and organizations in Bolivia, Colombia, Ecuador, Mexico, Nicaragua, Peru and the U.S. attended the Congreso Internacional de Finanzas Rurales e Inclusión Financiera [International Rural Finance and Financial Inclusion Congress] to discuss ways to increase service to rural members. Participants at the two-day event, co-sponsored by COONECTA-Entura, the Quito-based office of WOCCU Services Group, learned how savings mobilization, institutional strengthening, technology and other strategies help credit unions reach and serve more communities. “Good financial discipline, product innovation and technology application are key strategies that enable credit unions to better serve their members,” said Mark Cifuentes, WOCCU senior vice president of technical services, who coordinated the event. “We have a commitment to work not only with traditional donors, but also [with] local governments to help credit unions expand their reach to serve even more people than they already do.” Participants studied how credit unions in Mexico reached the poor through WOCCU’s Semilla Cooperativa [cooperative seed] program, a rural-finance model in which credit unions send representatives on motorcycles to remote towns and villages to conduct transactions, essentially taking the institution to the members. Recently, representatives were equipped with personal digital assistants and tiny printers strapped to their belts to allow members in remote locations to conduct transactions in real time and receive paper records of those transactions. Conference attendees also learned about experiences in various countries, including Ecuador, which has a financial services penetration rate of just 49% and a credit union penetration rate of 20.3%, according to WOCCU’s 2009 Statistical Report. Participants discussed ways to network more effectively and find new collaborative methods to increase penetration levels. Also participating were representatives from the governments of Ecuador and Colombia. Janeth Sánchez, Ecuador’s minister of Social Inclusion, and Geovanny Cardoso, executive director of the Programa Nacional de Finanzas Populares, an Ecuadorian agency devoted to cooperative financial strengthening, opened the event. Carlos Moya, executive director of Colombia’s Banca de las Oportunidades, stressed the need to develop products and define methodologies necessary to reach communities and individuals far outside the realm of traditional financial services. Offering poor people a mechanism through which they can grow financially must have appropriate safeguards to reduce their vulnerability, Moya stressed. Financial inclusion throughout Latin America remains a challenge that credit unions must face if they are going to meet their social and economic obligations, Cifuentes said. New products, more widespread use of technology and, especially, more aggressive distribution strategies will be necessary for credit unions to fulfill their missions. “In WOCCU’s mind, access by the poor to financial services is the best way to improve people’s lives,” Cifuentes said. “Success comes from finding ways to both lower costs and improve services to make these programs more sustainable.”

Belco LEBCO Educators CUs to merge

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HARRISBURG, Pa. (6/7/11)--Belco Community CU, Harrisburg, Pa., and LEBCO Educators FCU, Lebanon, Pa., will merge at the end of the month, with $360 million-asset Belco Community CU remaining as the surviving organization. The merger is scheduled to be completed on June 30, but will be transparent to LEBCO FCU’s nearly 1,300 members until their accounts transition to Belco Community CU on July 5. Members of $6 million-asset LEBCO Educators FCU voted in favor of the merger on May 18 and approvals have been received from the Pennsylvania Department of Banking and the National Credit Union Administration. LEBCO Educators FCU has served Lebanon County’s public school employees for nearly 54 years. “In this environment, it’s been challenging to achieve the financial position and growth needed to provide the products, services and locations that our members want and need,” said Mary Lynn Tylenda, LEBCO’s branch manager. “Our partnership with Belco will allow us to fulfill our mission and provide the added benefits our members deserve.” LEBCO currently operates one branch in Lebanon. Belco will retain the location and all LEBCO employees. Upon the completion of the merger, LEBCO Educators FCU’s membership will have access to Belco’s 11 branches and numerous ATM locations in Central Pennsylvania, expanded branch and telephone center service hours, fee-free access to 50,000 ATMs nationwide, and free online services.

Idahos CUs donate 185570 to kids hospitals

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BOISE, Idaho (6/7/11)--Idaho Credit Union League-affiliated credit unions donated nearly $186,000 to area children’s hospitals though the Credit Unions for Kids program. The funds were distributed to St. Luke’s Children's Hospital in Boise, Idaho ($69,810), Primary Children’s Medical Center in Salt Lake City ($82,218), and children's medical facilities in the Inland Northwest in Spokane, Wash., and Coeur d’Alene, Idaho ($33,419). All the money raised in Idaho goes to benefit sick or injured children from the state, making Children’s Miracle Network Hospitals the charity of choice for credit unions, said the Idaho league. Idaho credit unions have now raised nearly $2.25 million during their 16-year relationship with the charity. Credit unions have several ways they generate funds for the Children’s Miracle Network Hospitals. Some hold monthly gift basket raffles, others a holiday bazaar, while still others offer loan ‘skip-a-payment’ programs--all in the spirit of “people helping people”--the basic operating principle of credit unions. Employees and volunteers from credit unions participated as guests and telephone hosts to take contributions for the Children’s Miracle Network Hospitals Telethons last weekend.

DuTrac Community thanks lawmaker for MBL support

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DUBUQUE, Iowa (6/6/11)--Andy Hawkinson, president/CEO of Dubuque, Iowa-based DuTrac Community CU has applauded the efforts of an Iowa congressman on his support of the Small Business Lending Enhancement Act. The legislation would raise the credit union member business lending (MBL) cap to 27.5% of a credit union's assets from 12.25%. "On behalf of all Iowa small businesses and credit unions, we applaud the efforts of Congressman Bruce Braley (D-Iowa) on his recent co-sponsorship of H.R. 141," said Hawkinson. "By increasing the credit union MBL cap, Congress has the opportunity to inject a substantial amount of less expensive but available credit into the small business lending market," said Hawkinson. "In Iowa, several credit unions are at or near the cap and restricted from making further business loans. It is estimated that this legislation would make more than $200 million of additional, reasonably-priced credit available to Iowa small businesses in the first year and create more than 2,200 new jobs," he added. In a press release, the $484 million asset credit union urged other Iowa lawmakers to co-sponsor the bill.

Cheney Crear to speak at Dakotas association meeting

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BISMARCK, N.D. (6/6/11)--Credit union professionals and volunteers from across North and South Dakota will converge on the greater Fargo-Moorhead area this week for the Credit Union Association of the Dakotas' (CUAD) regional credit union meetings and educational workshops. The event will be Tuesday through Friday with most of the meetings hosted at the Ramada Inn Suites in Fargo, N.D. Scheduled to speak are Bill Cheney, president/CEO of the Credit Union National Association, and Pete Crear, president/CEO of the World Council of Credit Unions. Fargo Mayor Dennis Walaker will welcome attendees at the opening ceremonies. Cheney and Crear will outline issues of national and international importance to credit unions. An integral part of CUAD's services to its affiliated credit unions includes education and training of credit union management, staff and volunteers. The summit is a primary component of the ongoing education CUAD provides, said the association.

Iowa league op eds on interchange in two papers

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DES MOINES (6/6/11)--The Iowa Credit Union League has published two joint op-eds on interchange Friday in the Dubuque Telegraph Herald and the Cedar Rapids Gazette and made other efforts to engage credit union members in the issue. The joint opinions are written by Patrick Jury, president/CEO of the league, and John Sorensen, CEO of the Iowa Bankers Association. "Help keep debit card fees down," the op-ed in the Gazette, and "Congress should protect debit card users" in the Telegraph Herald focused on why the interchange fee cap amendment will have negative consequences for all Iowans using debit cards. Jury's and Sorenson's article in the Gazette noted the Federal Reserve's proposed rule setting a 12 cents per transaction cap on debit card interchange would mean "a 75% to 80% reduction in a financial institution's resource to pay for a world-class payment system. If Congress doesn't take action, consumers will end up paying the freight with new annual fees for debit cards and/or checking accounts. "We're confident that retailers such as Walmart would not reduce the cost of goods to reflect the money it would save by not paying its fair share of interchange expenses," they wrote. They also noted that an exemption for financial institutions under $10 billion in assets "is not practical and has been called into question by Federal Reserve Chairman Ben Bernanke." In both articles, Jury and Sorenson said that Iowa's credit unions and banks are calling on Sen. Charles Grassley (R-Iowa) and Sen. Tom Harkin (D-Iowa) to S. 575 offered by Sen. Jon Tester (D-Mont.) to "delay implementation of the Fed's rule and allow careful study of the interchange issue." The media pieces are part of a coordinated effort to engage members with Iowa's congressional representatives before the vote on the issue, expected sometime this week, is made. The league also will place a paid advertisement in the two publications today and Tuesday. The Credit Union National Association is urging passage of the bill that would require the Fed to stop and study the complex interchange issue and its impact on all parties, including consumers.

CU System briefs (06/03/2011)

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* ST. LOUIS, Mo. (6/6/11)--Help Wanted: Young & Free spokesperson for Vantage CU’s Gen Y members. Vantage CU is asking young adults, ages 18-25, to apply online by July 11 at YoungFreeStLouis.com to become the credit union’s new voice for young members. The current job holder, Rob Cartwright, completes his term as spokesperson in July, and was credited by the credit union for his impressive videos, blogs and contests during his tenure. The successful candidate to succeed Cartwright as the Young & Free St. Louis spokesperson will become a salaried employee of the credit union for one year. The spokesperson serves as the ‘voice’ of his/her age group, attends events and creates online videos and blog articles to keep YoungFreeStLouis.com an information hub for the 25-and-under crowd in St. Louis, Vantage says … * SANTA ANA, Calif., and DOWNEY, Calif. (6/6/11)--Melina Heights Elementary School and Ward Elementary School each were awarded $500 when they were named “Schools of the Year” by the California and Nevada Youth Involvement Network (CNYIN), which is comprised of credit union professionals seeking to increase the financial literacy of youth in those states. The award honors a California or Nevada school that has an excellent ongoing financial literacy program for its students. It is jointly sponsored by CNYIN and a grant from the RMJ Foundation--the state foundation for credit unions in California and Nevada. Melinda Heights Elementary was noted for its achievements in promoting such financial educational concepts as money management, budgeting, and decision-making, and for teaching youngsters real-life finance lessons through the use of board games, such as Monopoly and Life. Ward Elementary was honored for providing financial literacy opportunities for its students several times a year, through credit-union sponsored assemblies, field trips, classroom presentations, and money management classes. Also, during the past three years, the school has incorporated financial education into its enrichment curriculum …

Appeals court rejects challenge to N.Y. mortgage recording tax

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NEW YORK (6/6/11)--A New York appeals court has upheld a lower court decision against Poughkeepsie, N.Y.-based Hudson River Valley FCU, which challenged a state mortgage recording tax (MRT) under the Federal Credit Union Act (FCUA) tax exemption for credit unions. The Appellate Division of the Supreme Court of New York, First Department, in its decision Thursday in favor of the New York Department of Taxation and Finance, noted that the MRT is "a tax on the privilege of recording a mortgage, not a tax on property." “We respectfully disagree with the court’s conclusion," said Eric Richard, general counsel at the Credit Union National Association (CUNA), which submitted a joint amicus brief in support of the credit union. "We will be discussing with the credit union and the Credit Union Association of New York whether any further litigation steps are advisable at this point,” he told News Now. The credit union had argued the MRT was a tax on the credit union's mortgages and therefore federal credit unions were exempt under the FCUA. It asserted that federally chartered credit unions should be exempt from the tax because the FCUA expressly exempts federally chartered credit unions' "franchises"--meaning credit unions' business activities such as making mortgages--from taxes. Hudson Valley also argued that the U.S. Supreme court holds that MRTs are property taxes, but the appellate court said the cases cited address "whether state entities, not federal instrumentalities governed by federal statute, were exempt from various forms of state taxation in accordance with state law." The court also rejected the credit union's argument that the imposition of the tax undermines the statute's main policy of making low-cost credit available to average Americans by increasing the cost of mortgage loans. "At the time the FCUA was enacted by Congress, federal credit unions did not have the authority to make home loans," the court said in its decision. "Although Congress has amended the FCUA over the years to permit federal credit unions to make residential mortgage loans, it has never amended the statute specifically to exempt federal credit unions' mortgage loans from state MRTs." The credit union filed the suit against the state on May 12, 2009 seeking a declaratory judgment and a reimbursement of the tax it had already paid (News Now May 13). The lower court rendered its decision against the credit union on May 14, 2010, and the credit union filed its appeal on July 27, 2010. In addition to CUNA, the Credit Union Association of New York, the U.S. Department of Justice and the National Association of Federal Credit Unions filed amicus briefs supporting the credit union's challenge in the case.

Two Rhode Island CUs to merge

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PAWTUCKET, R.I. (6/6/11)--Two Rhode Island credit unions--Alliance Blackstone Valley FCU, Pawtucket, and Blackstone River FCU, Woonsocket, have announced they will merge. The merger is slated to be finalized Sept. 30, and the new institution will operate as Alliance Blackstone Valley FCU (pawtuckettimes.com May 19). Joseph J. Cicione III, Alliance Blackstone Valley president/CEO and chief operating officer, will retain his title once the merger is finalized. James Wood, Blackstone River CEO, has been named executive vice president of the merged institution. The move will provide the credit union with three branches: one in Pawtucket and two in Woonsocket. Alliance Blackstone Valley FCU has $41.5 million in assets, while Blackstone River FCU has $42 million in assets.

CUNA in IWash. PostI Job market still rocky

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WASHINGTON (6/6/11)--The U.S. job market is still in rough shape, and the May unemployment report issued Friday will bear that out, a Credit Union National Association (CUNA) economist told The Washington Post Friday in advance of the report. “The employment numbers over the last three months, we all looked at those and cheered and hoped that they were the break-out data that we’ve been looking for,” Mike Schenk, CUNA senior economist, told the Post. “But I think what we get Friday will make it fairly clear that the job market remains in pretty rocky territory and that this recovery both from the jobs perspective and broader perspective is pretty lackluster.” Following several months of strong job growth, U.S. employer hiring significantly slowed in May, adding to worries that the job market could take a long time, perhaps years, to recover because the economy remains weak (The Wall Street Journal and The New York Times June 3). Last month, the U.S. added 54,000 nonfarm payroll jobs after an increase of 232,000 jobs in April, the Labor Department said Friday. The May job increase was roughly a third of what economists had predicted, the Times said. The May unemployment rate inched up to 9.1% from 9% in April. Causes of the employment slowdown include supply disruptions following Japan’s earthquake and tsunami in March, which figured to be a drag on the manufacturing sector, and a manufacturing employment decrease for the first time since October 2010, the Journal said. One of the few positives in the U.S. economic scenario during the past three months has been the private sector’s solid and steady creation of jobs, with private employers adding a monthly average of more than 250,000 jobs in that time, the Post said. To read the Post article, use the link.

Topline CU offers round-up savings transfer program

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MAPLE GROVE, Minn. (6/6/11)--TopLine FCU, Maple Grove, Minn., has brought the spare change jar to the digital age with a savings program that helps members save money at the same time they spend it. With Sum-It-Up Savings, each transaction made with TopLine’s Smart Rewards Check Card is rounded up to the nearest whole dollar, and the difference is transferred into a savings account of the member’s choosing. “TopLine is the first credit union in our market to offer a product like this--a program that makes saving completely painless,” said Harry Carter, president/CEO of TopLine FCU. “It’s an easy way to help our members save money by building an emergency reserve, creating a child’s savings or holiday spending account or even socking dollars away in a ‘mad money’ fund.”

MECU of Baltimore certified as CDFI

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BALTIMORE (6/6/11)--MECU of Baltimore Inc. has been certified as a community development financial institution (CDFI. MECU, with more than $1 billion in assets, is the second-largest credit union in the U.S. to be certified as a CDFI, according to the National Federation of Community Development Credit Unions. The U.S. Treasury Department’s CDFI Fund provides the certification to financial institutions committed to financial inclusion and to providing access to affordable financial services in underserved communities. To obtain the certification, financial institutions must demonstrate that at least 60% of their financing activities are targeted to a qualifying target market, as defined by the CDFI Fund. More than 70% of MECU’s membership have low incomes or live in economically depressed, financially underserved communities, according to its certification application. “It will help us expand our mission of serving the underserved of Baltimore and reflects the credit union mission of people helping people,” Bert J. Hash Jr., MECU president/CEO said of the designation. “Most CDFIs, whether they are credit unions or have another type of business structure, are small. This gives us the ability to reach further into the community.” To obtain this certification, MECU received assistance from the federation, which represents the most of the 200 credit unions are currently certified as CDFIs.

La. league to develop Young Professionals Network

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HARAHAN, La. (6/6/11)--The Louisiana Credit Union League (LCUL) is developing a program to provide networking, development and growth opportunities for Louisiana’s young credit union professionals. Young Professionals Network (YPN) will be developed in cooperation with the YPN Steering Committee to meet the needs of younger professionals in Louisiana. Membership in the network is open to credit union professionals in Louisiana age 40 and under. Provided as a dues-supported service to member credit unions, there is no cost to join the network. There are currently two levels of involvement:
* Steering committee: The committee will consist of up to 10 credit union representatives (one from each chapter, plus a chairperson). Interested individuals should complete the steering committee application and submit it along with a letter of recommendation from their credit union CEO. The deadline for applications is June 15. * Membership: Any young credit union professional in Louisiana can join the YPN and participate in networking sessions, professional development opportunities and more.
Committee selections will be completed by June 24. After the steering committee is selected, an initial planning session will be held prior to LCUL’s Annual Meeting and Convention, Aug. 3-6. The convention will be the first opportunity the program’s members will have to meet their steering committee, network with one another, and participate in education sessions designed for members.

Grant helps N.J. CUs provide fin lit tool

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HIGHTSTOWN, N.J. (6/6/11)--A grant from the National Credit Union Foundation’s REAL Solutions program has helped New Jersey credit unions bring a hands-on financial literacy tool to high school students statewide.
A National Credit Union Foundation grant has helped New Jersey credit unions bring Financial Reality Fairs to state high schools. Mike Reilly, president/CEO of Central Jersey FCU, Woodbridge, N.J., explains the different food purchase options to students at Woodbridge High School. (Photo provided by National Credit Union Foundation)
The beneficiary of the grant, the New Jersey Credit Union Foundation, has partnered with the New Jersey Credit Union League to offer Financial Reality Fairs. During the fairs, students experience some of the financial challenges they will face when they start life on their own. Students identify their career choice and starting salaries, then complete a budget sheet requiring them to live within their monthly salary while paying for basics such as housing, utilities, transportation, clothing and food. Additional expenditures such as entertainment and travel are also factored in. The fair includes many temptations for additional spending, and students must learn to balance their wants and needs to live on their own. After the students have visited the various booths covering components of independent living, they balance their budget, and then sit down with a financial counselor for review. New Jersey credit unions provided Reality Fairs for six high schools throughout the state, reaching about 825 students. The credit unions actually completed seven fairs--one high school was so impressed by its first fair that it offered a second so its entire freshman class could attend.

Kinectas new mortgage loan center creates jobs

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MANHATTAN BEACH, Calif. (6/3/11)--Kinecta FCU plans to open a new mortgage center in Newport Beach, Calif., to serve Orange County residents and expand its footprint in the county. The Manhattan Beach, Calif.-based credit union will invest in a new 9,500 square foot mortgage center to be staffed by 30 experienced mortgage loan professionals. It is hiring new loan officers for the program. In a press release, Kinecta said it will offer a variety of residential and commercial mortgages, including government program such as Federal Housing Administration (FHA) loans and HomePath by Fannie Mae, conforming mortgages, super jumbo mortgages and commercial loans. Orange County currently has four Kinecta branches, in Brea, Fountain Valley, Tustin and Westminster. "While other financial institutions are exiting the real estate arena in Orange County, Kinecta is entering the market to serve the unique needs of area residents looking for a financial institution with a strong track record," said Brian Robinett, chief credit officer. The $3.5 billion asset Kinecta made more than $2.7 billion in home originations in 2010, helping more than 6,000 members afford their homes. Its loan origination capacities span 25 states, the credit union said.

Connecticut CUs fin ed fairs wrap up 2011-2012

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MERIDEN, Conn. (6/3/11)--The Credit Union League of Connecticut and the state's credit unions have wrapped up the 2010-2011 academic year after sponsoring 10 Financial Reality Fairs throughout the state. During the period, 72 credit unions participated in the fundraising, planning, organizing, volunteering and overseeing the fairs, which counseled more than 3,400 students from 76 schools. More than 4,400 hours were volunteered for the events (CT League Update June). Since the league began offering the events, 80 credit unions have conducted 26 fairs, educating 6,465 students from 104 schools. The fairs provide a reality check for students, who make real-life decisions and learn the consequences of their choices. New this year was an EZ Loan booth, which represented payday lenders and high-cost financial companies. Students learned that what looks like an opportunity can quickly hit the pocketbook if they don't fully investigate options before borrowing. The league said the exercise was so popular that it is considering it again for next year. Connecticut credit unions also partnered with the National Credit Union Foundation and REAL Solutions to host the first Financial Reality Fair on March 2 for high school students in Washington, D.C., during the Credit Union National Association's (CUNA) Governmental Affairs Conference (GAC). Plans are underway to expand the event at the 2012 GAC, said the league. Earlier this year, the league received the 2011 Desjardins Youth Financial Education Award from CUNA for its involvement in financial education.

Study CUs impact is 20M in St. Louis area

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ST. LOUIS (6/3/11)--A recent study by the Olin School of Business at Washington University indicates that St. Louis Community CU has an annual economic impact of nearly $20 million in the St. Louis area. The study compares the Missouri credit union's impact with that of banks, payday lenders and check cashers and focuses on the credit union's overall long-term sustainability, which includes the value of having a banking relationship with the credit union as well as its social influence, said the credit union. "St. Louis Community CU may be the most community-oriented financial institution in St. Louis," said Stuart Greenbaum, former dean and Bank of America professor emeritus of managerial leadership at Olin. The full-service credit union serves low- to moderate-income individuals living in and around the region's urban areas, a segment often underserved. St. Louis Community CU invests time and resources into developing offices, products and services that cater to the underserved. It offers second-chance checking products, credit building services and a payday loan alternative to help break the predatory lending cycle for consumers. Patrick Adams, president/CEO of the $204 million asset credit union, noted that as a responsible corporate citizen the credit union realizes "that people are experiencing tough economic times. There are people who don't have a lot of options available when it comes to building and maintaining financial security, and we want to do our part to make things a little bit easier by promoting value and economic empowerment. Social responsibility isn't just a buzz word for us, it's a strategy." The study also found that merely by existing, the credit union recycles dollars back into the community. It offers several avenues of community support in terms of financial education and outreach. Last year, it conducted more than 430 free, financial literacy presentations for social service agencies, local schools and community groups, and it reached 8,440 people. It also launched the St. Louis Community CU Foundation, which provides financial literacy education, resources and support to the region's residents to help improve their standard of living. It awarded its inaugural Janice Mosby Scholarship to two adult students seeking higher education opportunities.

Pa. CUs announce VITA results IRS seeks applicants

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HARRISBURG, Pa. (6/3/11)--While the Internal Revenue Service (IRS) is accepting applications for the Tax Counseling for the Elderly (TCE) and Volunteer Income Tax Assistance (VITA) grant programs, Pennsylvania credit unions that participated in the VITA program this year are reporting successful results. Several credit unions in Pennsylvania--as well as many in other states--provide volunteers, office space and time to offer free tax-filing assistance to low- and moderate-income wage earners (Life is a Highway June 1). Here are results from four of them:
* Through Erie (Pa.) FREE Taxes, Erie FCU's seven volunteers and three branch locations completed 110 returns for more than $60,000 in refunds during the 2010 tax-filing season that ended two months ago. * Dena Miller, CEO of Craftmaster FCU, Towanda, teamed up with Partners in Family & Community Development, a local agency, to help with the program. She was awarded a $6,500 grant through the National Credit Union Administration to jumpstart the VITA program in her rural area, said PCUA. This was the first year for the joint venture. They prepared 157 returns, exceeding their goal of 125 returns. The average adjusted gross income of the returns was $26,815. Tax refunds totaled $258,801; roughly $70,102 of that amount was earned tax income credit (ETIC) returned to the member or consumer. Members/consumers saved more than $20,000 in tax preparation programs. * Karen Janoski, manager of Consumer Healthcare FCU, Pittsburgh, worked with Moon Township-based Clearview FCU to prepare more than 90 returns, mostly for senior citizens at a retirement complex near her home. Janoski volunteered two evenings a week, plus Saturdays, throughout the tax season. * Timberland FCU's Dubois office completed 240 VITA tax returns throughout the tax season, with more than $350,000 refunded. The credit union also offered a low-cost refund anticipation loan to members faced with a financial emergency. However, in most cases, the credit union persuaded members to opt for direct deposit and receive their refund within days. Of the returns filed, 81 taxpayers claimed the earned income credit with the average taxpayer receiving more than $1,400 from EITC.
During 2011, the IRS awarded 31 TCE grantees $6.1 million and 179 VITA grantees $12 million. The two grant programs filed more than two million returns at nearly 9,000 sites nationwide, as of April 10. IRS is accepting applications through June 30 for the grant programs, which will allow some organizations to apply for annual funding for up to three years. Previous grant recipients can opt to apply for up to three years of annual funding, which reduces the amount of paperwork required over the period. The annual funding also helps recipients with budget planning, said PCUA. The 2012 applications and guidelines are on the IRS website. More information is available in Publication 4680, TCE & VITA Grant Programs.

No CU damages reported in Massachusetts tornadoes

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SPRINGFIELD, Mass. (6/3/11)--While at least one Springfield, Mass.-area credit union struggled through a power outage, no credit unions reported damages as a result of two tornadoes that swept through Western and Central Massachusetts Wednesday. No credit unions had reported damages to the Massachusetts Credit Union League as of Thursday afternoon, the league said. A message on the website of ValleyStone CU said the credit union was without power. Calls to the credit union were unanswered. Four were killed in the tornadoes and another 200 were injured, according to Yahoo! News. At least 48,000 homes were without electricity. Because of the magnitude of the damages in the Springfield area, employees and members of credit union were almost certainly affected, said Rob Kimmett, senior vice president of public relations and marketing for the Massachusetts Credit Union League. “It’s just one of those situations where so many people suffered substantial damages, that you’re going to have friends and neighbors have to who have to put the pieces of their lives back together,” Kimmett.

IForbesI blog Pros far outweigh any cons in CUs

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MADISON, Wis. (6/3/11)--The advantages offered by credit unions far outweigh the disadvantages, according to an article by SavingsAccounts.com that appeared Wednesday on the Forbes blog. In an article titled “Pros and Cons of Credit Unions--and There Aren’t Many Cons,” SavingsAccounts.com, a website that focuses on consumer online banking and high-yield banking accounts, discusses the nature of credit unions, who can join and how credit unions differ from banks. “Tired of paying exorbitant bank fees on everything from ATM withdrawals to monthly account maintenance?” the article asked. “Want to be earning a better interest rate on your savings account? It might be time to look into switching to a credit union. A credit union functions a lot like a bank, but it’s built on a different business model. One that is, as a general rule, friendlier to customers. That can mean big savings on fees, and better interest rates on both savings and loans.” The article cites the Cambridge, Mass.-based Massachusetts Institute of Technology FCU as an example of how credit unions are “typically small, local institutions, serving a specific local population.” Consumers who prefer local banks tend to be happy with credit unions because they can usually be more flexible than banks in lending and offer a more personal approach in handling accounts, the article said. To read the article, use the link.

MDDCCUA N.J. league decide not to merge

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HIGHTSTOWN, N.J., and COLUMBIA, Md. (6/3/11)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) and the New Jersey Credit Union League (NJCUL) have decided to remain as separate, independent entities, instead of merging, they announced Thursday afternoon. The two associations had announced in February that they would explore a merger. Both created merger committees, made up of a subset of their respective boards, to conduct the initial due diligence. "It was an open, interactive process between both associations," said NJCUL Chairman Shawn Gilfedder, CEO of McGraw Hill Employees FCU, East Windsor, N.J. "The committees did an excellent job exploring the organizations and identifying the positives and negatives in merging the two well-established associations." According to MDDCCUA Chairman Miguel Boluda, CEO of PAHO/WHO FCU, Washington, D.C., "we couldn’t have been more pleased with the cooperation and good intentions of both sides throughout this exploratory process. Each association learned a lot as we explored a potential merger." The merger committees found some compelling reasons to merge and regionalize, a trend occurring with leagues in several other parts of the country. However, the boards determined that at this time the best course of action for affiliated member credit unions was to remain independent, the two associations said in a press release. They said the timing of the merger was not optimal. Both organizations are financially healthy and provide robust member service to their affiliate base, making a merger a matter of choice, not necessity, Boluda and Gilfedder said. MDDCUA will continue its national CEO search to fill its vacancy left by Mike Beall when he became president/CEO of the Missouri Credit Union Association. Boluda stressed that member service has remained strong during the vacancy and that MDDCCUA's board remains committed to providing its credit unions the best possible service offerings at an optimum price. The New Jersey league, led by CEO Paul Gentile, has focused on branding and communications and will continue to advocate for the state's credit unions through its "Banking You Can Trust" consumer campaign and revamped state legislative efforts. Gilfedder and Boluda stressed that both associations are strong cogs in the Credit Union National Association (CUNA)/League system and will continue to be powerful state arms of CUNA. MDDCCUA has 129 affiliates in Maryland and the District of Columbia. The New Jersey league serves more than 153 affiliated credit unions.

MnCUN reps visit Paraguay partners

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ASUNCION, Paraguay (6/3/11)--Representatives from the Minnesota Credit Union Network (MnCUN) visited Paraguay May 22-28 as part of the World Council of Credit Unions’ (WOCCU’s) International Partnerships Program.
Click to view larger image During an international exchange in Paraguay, three Minnesota Credit Union Network (MnCUN) representatives toured “multi-purpose” credit unions that provide financial services and additional services to their members. From left: Mark D. Cummins, president/CEO of MnCUN; Thomas Belekevich, World Council of Credit Unions; Dick Nesvold, CEO of SouthPoint CU, Sleepy Eye, Minn., Heriberto González, general manager, Cooperativa Oviedo Ltda.; Jeff Schwalen, president/CEO, HiWay FCU, St. Paul, Minn.; Pedro Löblein, chairman, Central de Cooperativas del Area Nacional. (Photo provided by Minnesota Credit Union Network)
The travelers met with the Paraguayan credit union association, Central de Cooperativas del Area Nacional (CENCOPAN), to learn about the country’s credit unions and share their knowledge and experience, focusing on share insurance, political advocacy and the cooperative difference. Mark D. Cummins, president/CEO of MnCUN; Dick Nesvold, president/CEO of SouthPoint FCU, Sleepy Eye, Minn.; and Jeff Schwalen, president/CEO of Hiway FCU, St. Paul, Minn., participated in this international exchange, which included credit union visits, lobbying and education The visit was part of a series of collaborative activities between MnCUN and CENCOPAN, which began in 2004 when the trade associations partnered through WOCCU. The relationship between Minnesota and Paraguay is one of 23 international partnerships in WOCCU’s International Partnerships Program. This year, Cummins, Nesvold and Schwalen were invited to attend CENCOPAN’s ninth annual International Seminar, which coincided with the organization’s 17th anniversary. The event featured speakers from the U.S., Canada, Germany, Brazil and Ecuador, who provided insight on topics pertinent to Paraguayan credit unions. Schwalen and Nesvold co-presented a session on “The History of Deposit Insurance in the U.S.,” and Cummins provided the trade association perspective during his “Building Non-Dues Revenue” presentation. The Minnesota delegation also visited four credit unions that serve as “multi-purpose” cooperatives. In addition to financial services, thecredit unions provide other services to their members. For example, Cooperativa Coronel Oviedo Ltda. is a credit union that provides members with low-cost medical services. It runs a pharmacy that offers the lowest prices in the city and has built an ethanol factory to serve the city’s farmers. “It was truly an inspiration to see the impact that these ‘multi-purpose’ cooperatives have in the communities by providing diverse services that directly improve the quality of life for their members,” Schwalen said. The group also spent time discussing credit union issues with national politicians. The goal of the visits was to demonstrate the international support behind CENCOPAN’s efforts to expand its services to members. The Minnesota delegation stressed the influential role cooperatives play in building and strengthening nations. It emphasized the importance of deposit insurance and its role in stabilizing the credit union system and building confidence among members. MnCUN and CENCOPAN will continue their international exchange in November when Paraguayan representatives will visit Minnesota credit unions.

League Include Ohio CUs on state bills

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COLUMBUS, Ohio (6/3/11)--The Ohio Credit Union League is working to include credit unions’ interests in two bills pending before the state legislature--one regarding funds deposited by public entities, and the other regarding the modernization of Ohio probate law. Legislation introduced in Ohio would allow banks and thrifts to place additional funds from public entities using sweep accounts, thereby allowing participating banks to be fully insured under the Federal Deposit Insurance Corp. beyond the $250,000 account limit (eLumination Newsletter June 1). Proponents say House Bill 209 will “create a win-win-win” for local governments, taxpayers and banks, the league said. John Kozlowski, league general, testified that HB 209 should be part of a collection of bills to use other financial institutions, such as credit unions, to provide more choices for public entities and small-business owners. “Unfortunately, those who want to provide additional choices and resources to public entities and small businesses oppose legislation that would include credit unions,” Kozlowski said. “Only the inclusion of credit unions will make this a ‘win-win-win-WIN’ for everyone.” Regarding probate, State Sen. Kevin Bacon (R-Columbus) reintroduced legislation from the last General Assembly that would update and modernize various sections of the Ohio Probate Law. However, Senate Bill 124 initially did not include credit unions as fiduciaries or custodians on funds for probate purposes. The Ohio league worked closely with Bacon and other interested parties, and the bill was amended last week on the state Senate floor to include credit unions as eligible estate depositories. “It is important that credit unions continue to receive the tools they need to serve their members through legislation and regulation,” Kozlowski said. “The league daily tracks, comments, and provides testimony and input on legislation, and takes every opportunity to include language that could positively affect credit unions, and remove detrimental language.”

Ohio league helps WOCCU develop Romanian CU movement

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BUCHAREST, Romania (6/3/11)--The Romanian Federation of Credit Unions (FEDCAR) and the Ohio Credit Union League (OCUL) last month signed an agreement of mutual support as the newest participants in World Council of Credit Unions’ (WOCCU) International Partnerships Program.
A formal international partnership agreement between Ohio and Romania was signed by (from left) Paul Mercer, president of the Ohio Credit Union League; Constantine Cristea, president of the Romanian Federation of Credit Unions; and Brian Branch, executive vice president and chief operating officer of World Council of Credit Unions. (Photo provided by the World Council of Credit Unions)
Bill Herring, CEO of Cincinnati Central CU, leads a training session on risk management for an audience of 64 Romanian credit union officials in Romania. (Photo provided by the Ohio Credit Union League)
Paul Mercer, OCUL president, and John Florian, league vice president of government affairs, traveled with Bill Herring, CEO of Cincinnati Central CU, to Romania to formalize a partnership between the league and FEDCAR. WOCCU’s Brian Branch, executive vice president and chief operating officer, and Victor Miguel Corro, senior manager in charge of the International Partnerships Program, also were part of the group. While Romanian credit unions are growing, their operating environment presents challenges to future growth and success, including a narrow product-service mix limited to a savings-type deposit account and small loans for terms of five years or less. Lobbying for legislative and regulatory changes is crucial to Romanian credit unions’ continued ability to serve their members, said OCUL (eLumination Newsletter June 1). The Ohioans met with leaders of two credit unions and observed common factors among FEDCAR credit unions: high delinquencies, high liquidity, increased costs and low loan volume. The combined group identified three areas of immediate need in which OCUL could help FEDCAR:
* Support lobbying efforts for better credit union legislation in Romania; * Assist with marketing efforts to bring more credit unions into FEDCAR's membership; and * Provide continued training in risk management, including a possible visit to Ohio by Romanian credit union leaders for intensive training.
Mercer, Florian and Herring ended the visit by conducting a training session on risk management, advocacy, and the value of trade association membership for 64 leaders from all 17 FEDCAR-affiliated credit unions.

Swans collision tests CUAnswers recovery plan

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GRAND RAPIDS, Mich. (6/3/11)--CU*Answers, the Grand Rapids, Mich.-based core data processing services provider, on Monday underwent an unplanned test of its disaster recovery plan when two swans collided with the power line supporting its data processing center, causing a brief power interruption. The collision resulted in a sudden loss of cooling capability because air handlers were shut down by the outage, according to the credit union service organization. But back-up generators kicked in according to the plans procedures and staff performed functions resulting in the necessary support. CU*Answers said that neither a credit union client nor a credit union member was aware of the incident. The swans were seen later that day swimming on a neighboring pond and appeared to have fully recovered, said CU*Answers.

CU System briefs (06/02/2011)

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* TULSA, Okla. (6/3/11)--A woman claiming her cell phone was a bomb robbed Oklahoma Central CU in Tulsa Tuesday afternoon. The woman told tellers a man in the parking lot had rigged her phone with a bomb and it would go off unless she filled her purse with money (Tulsa World June 2). She left the credit union with an undetermined amount in a silver car with no tag. No one was hurt in the incident … * HARRISBURG, Pa. (6/3/11)--Christina Mihalik, left, vice president of governmental affairs at the Pennsylvania Credit Union Association met with U.S. Rep. Mark Critz, right, (D-Pa.) last week to thank him for co-sponsoring H.R. 1081, the interchange delay legislation (Life is a Highway June 1). Critz is one of four Pennsylvanians in the House who are co-sponsors of the bill. Mihalik and Critz also discussed data breaches' cost to credit unions, district issues, re-districting, and raising the cap on credit unions' member business lending. The Credit Union National Association advocates delaying the interchange rule so its impact can be studied and raising the MBL cap to 27.5% of total assets from 12.25%. (Photo provided by the Pennsylvania Credit Union Association) … * SPOKANE VALLEY, Wash. (6/3/11)--Employees and board members of
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the Spokane Valley-based Numerica CU surprised President/CEO Dennis Cutter Thursday when they revealed a new sign on Numerica's headquarters building that reads "The Dennis A. Cutter Administration Building." The sign's reveal took place at Cutter's retirement party, celebrating his 40 years as CEO, with more than 150 employees, retirees and members of the board and supervisory committee present. "It's fitting that this building, with its sturdy foundation, be named after the person who was the foundation of Numerica's success over the last 40 years," said Board President Dave Shriver. Once he recovered from the shock, Cutter thanked employees for their hard work and dedication to members. The surprise was pulled off after months of careful planning that included secret e-mails, parking lot diversions, and perfectly-timed tee times. Cutter's last day will be in July. (Photo provided by Numerica CU) … * SPRINGFIELD, Mo. (6/3/11)--The board at Assemblies of God CU (AGCU), Springfield, Mo., has named Paul Ebisch as the new president/CEO, reports the Missouri Credit Union Association (The Missouri difference May 27). He succeeds Ed Hirsch, who retired on May 1. Hirsch served as AGCU's president for seven years. Ebisch has worked at the credit union the past six years as executive vice president and chief financial officer. He has more than 15 years of experience in the financial services industry. Also, Ebisch recently promoted Justin Lumby, former vice president of commercial banking, to senior vice president of lending. Lumby previously worked as a bank examiner for the Federal Deposit Insurance Corp. and has worked two years in church lending …

Losses from breaches fraud reported by CUs

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MADISON, Wis. (6/2/11)--Several credit unions have reported incidents of losses from unauthorized transactions or compromised accounts related to breaches in the past couple of weeks. The People's FCU (TPFCU), a $125 million asset credit union based in Amarillo, Texas, said dozens of members lost thousands of dollars in unauthorized transactions after a network breach by an organized crime group last weekend. The cybercrooks breached the debit card system and used software to generate random debit card numbers used to make purchases in other states such as California (Amarillo.com June 1). The crooks attempted small charges, and when the randomly generated number didn't return as invalid, they used the numbers at merchants that did not require the three-digit code on the back of the card or a PIN, the credit union said. TPFCU General Manager/CEO Art Hornell said on the credit union's website that the credit union is working diligently to address the breach. "But our priority right now is our members. We are working with affected members to ascertain what unauthorized transactions posted and getting the funds put back into their accounts as quickly as possible." The credit union was experiencing a heavy call load and set up a special alternative number to call. No individual member information such as personal identification numbers (PINs) was taken during the breach. The credit union is requiring PINs for all transactions outside of Texas and is denying signature requests made outside the state. In Massachusetts, Brockton-based, $1.85 billion asset HarborOne CU sent out letters to about 800 members warning that their paperwork from transactions conducted at its Randolph, Mass., branch on May 9 may have been compromised when an assailant attacked the credit union's courier after closing time that day. The attacker didn't get any cash, but some sensitive information was in the courier's bag. (The Patriot Ledger (May 20). A suspect has been arrested, but the bag had not been found. The compromised information included checks, names, addresses and account numbers, but no Social Security numbers, dates of birth or other personal data. The credit union also flagged about 400 accounts so staff can monitor any suspicious activities on the accounts, and it recommended that affected members should place a freeze on their consumer credit report to block criminals from opening up lines of credit with the information stolen. CUNA Mutual's Protection Resource Center distributed several alerts recently warning that credit unions are experiencing an uptick in card fraud the past few weeks, said the New Jersey Credit Union League's newsletter (The Daily Exchange May 25). Several New Jersey and Pennsylvania credit unions experienced card fraud, with some reporting losses. In Springfield, Ore., The Register-Guard FCU was swamped with calls May 21 from residents who reported automated phone messages using the credit union's name. The messages said there was a problem with residents' account at the credit union and asked them to provide account information. CEO Carolyn Stahly told The Register-Guard (May 22)the credit union fielded calls for several hours from consumers reporting the scam. The newspaper also received calls. In Georgia, a county sheriff who tried to use his debit card at a car wash and at his credit union's ATM learned that someone charged nearly $300 on his account in New York City and at a Walmart in Houston, Texas. His debit card had been cloned (FoxBusiness.com May 30). The Akron (Ohio) Police CU deactivated members' debit cards and reissued new ones after several accounts were exposed to fraud (Ohio.com May 19). The credit union told the newspaper that card processor First Data discovered the scheme, which is hitting multiple financial institutions. Thieves use the card numbers to make purchases at various national hotel/motel or retail chains such as Target stores in California. The credit union replaced 390 debit cards, although not all debit card holders were affected, and said no one's personal information had been compromised.

Survey CU members more pessimistic about economy

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RIVERWOODS, Ill. (6/2/11)--Credit union members ranked the economy higher than non-members and all adults surveyed in April by the Discover U.S. Spending Monitor. But many said the economy is "poor" or worse than the previous month. Many rated their personal finances as "fair" and "poor," and nearly half said their personal finances are worse than the previous month. The poll tracks economic confidence and spending intentions throughout each month with 8,200 consumers. Credit union members' sentiment on the economy was more positive than both non-members and all adults surveyed, according to the survey data. Members ranked the economy at 92.2 in April--an increase over 90.8 in March. Non-members' sentiment was at 87.5 in April and 88.7 in March, while rankings by overall adults--members and nonmembers alike--were at 89.4 in April and 89.5 in March. However, 55.8% of members and 55% of total adults surveyed rated the overall economy as "poor" in April. In March, 53.3% of members gave the same rating. High gas prices are having an impact, according to the data. Roughly 61.6% of credit union members surveyed said high gas prices are forcing them to change their vacation plans, while 26.8% said the prices are not affecting their vacations. And 68.1% of members said high gas prices have forced them to cut back on discretionary spending. "Skyrocketing gas prices are affecting consumer attitudes about the economy and their personal finances, particularly since the job market is lagging," said Julie Loeger, senior vice president of brand and product management for Discover. "While sentiments improved somewhat by month's end, gas prices are still on the rise, making it less likely that consumer confidence will rebound in May." Consumers in general are offsetting rising prices by curtailing entertainment and travel and memberships expenses. The only spending bright spot: 16% of consumers surveyed said they plan to increase spending on home improvements. Other findings related specifically to credit unions:
* Among members surveyed in April, 50.9% indicated the economy was worse. That compares with 52.5% of members in March and 55% of total adults surveyed in April. * Nearly 60% of members ranked their personal finances as either "fair" (40.2%) or "poor" (19.4%). That compares with nearly 64% of adults surveyed. In March, 61.4% of members rated their finances in the fair and poor categories. * Those who said their personal finances were worse included 49.2% of members and 49.2% of adults. In March, nearly 49% of members said their finances were worse. * When asked about their spending compared with the month before, 47.4% of credit union members and 42.6% of adults polled indicated they were spending more in April. In March, 41.2% of members said they were spending more. * Nearly 39% of members surveyed indicated they would spend more the following month, while 13.7% said they would spend less and 45.4% the same as in March. * Roughly 51% of members said they would have money left over after they paid their debts, while 37.9% said no. * Members asked how many months could they hold their current lifestyle if they lost their jobs. More than one-fourth (25.5%) said no months, and 19.8% indicated one month; 9.7%, two months; 10.6%, three months; 5.1%, four months; 3%, five months; and 21.8%, six months.
Use the link to access the entire report.

CU loans increase in April for first time in eight months

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MADISON, Wis. (6/2/11)--U.S. credit unions reported an increase of 0.17% in their loan portfolios in April--the first monthly increase since August of last year--according to a Credit Union National Association (CUNA) economist’s analysis of April’s monthly estimate of credit unions.
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The gain for credit union loans compared with a 0.1% decrease in March. Adjustable-rate mortgages grew 2%, home-equity loans rose 1%, used-auto loans increased 0.8%, and credit card loans went up less than 0.1%. New-auto loans fell 0.7%, unsecured personal loans dropped 1.1%, and fixed-rate mortgages declined 1.8%. Credit union loans totaled $575.2 billion, compared with $579 billion in April 2010, according to the monthly estimate. “Loan balances, however, typically rise 0.24% in April due to seasonal factors, so the underlying monthly trend is running at a negative 0.07%,” Steve Rick, CUNA senior economist, told News Now. “Over the last year, credit union loan portfolios are down -0.7%. Used-auto loans, adjustable-rate mortgages and home equity loans grew at around 1% or greater in April. “Recent declines in consumer confidence surveys may be a leading indicator of weak loan growth for the remainder of the summer,” he added. “If job growth doesn’t pick up soon, loan growth in 2011 may not be that much better than the negative 1.2% reported last year.”
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Credit union savings balances grew 0.7% in April, compared with a 1.3% increase during March. Share drafts led savings growth, increasing 4.3%, followed by regular shares (1.1%), individual retirement accounts (0.2%) and money market accounts (0.1%). One-year certificates fell 0.4%. Credit union savings in April totaled $833.8 billion--or $35.1 billion more than the $798.7 billion in April 2010. Credit unions’ 60-plus-day delinquencies remained at 1.6% during April. The loan-to-savings ratio remained at 69%. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 19%. The movement’s overall capital-to-asset ratio remained at 10% in March. The total dollar amount of capital is $96 billion.

CDCU supporter Sister Corinne to keynote NFCDCU conference

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NEW YORK (6/2/11)--Sister Corinne Florek, OP, and other members of the Adrian Dominican order will be honored at the National Federation of Community Credit Unions’ 37th annual Conference on Serving the Underserved, June 15-18 in Hollywood, Calif. Sister Corinne and the Adrian Dominican Sisters made the first investment in the federation’s National Capitalization Program for Community Development Credit Unions (CDCUs) in 1982. The program has become the federation’s signature community development investment initiative, maintaining more than $50 million in below-market investments in more than 180 CDCUs service low-income urban-, rural- and reservation-based communities nationwide. Since its inception, the Community Development Investment Program has invested nearly $100 million in hundreds of CDCUs. “Corinne took a leap of faith in supporting our work and our mission,” said federation President/CEO Cliff Rosenthal. “But that support has allowed our member CDCUs to serve millions of low- and moderate-income Americans, who might otherwise have been left behind by mainstream financial institutions.” Also at the conference, the federation expects to announce two new investments from a major bank and a major foundation. The investments will be among the largest the federation has ever received to support the work of CDCUs nationally, said the federation.

Redwood Cal State Central CUs complete merger

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SANTA ROSA, Calif. (6/2/11)--Two Santa Rosa, Calif.-based credit unions--Redwood CU (RCU) and Cal State Central CU (CSCCU)--completed a merger, with RCU remaining as the surviving organization.
Click to view larger image Jim Larson (left), CEO of Cal State Central CU, and Brett Martinez, president/CEO of Redwood CU, announced the completion of a merger between the two organizations, which will operate as Redwood CU. (Photo provided by Redwood CU)
The merger, announced earlier this year, was approved by the boards of directors of both organizations, and by industry regulators, the National Credit Union Administration and the California Department of Financial Institutions. The organizational merger was completed April 1, and the integration of CSCCU member accounts and branches into RCU’s network was completed Wednesday. "All of our nearly 200,000 members will benefit from the three additional locations to our branch and ATM network resulting from this joining,” said Brett Martinez, RCU president/CEO. CSCCU’s prior locations in Santa Rosa, Sonoma and Glen Ellen have become RCU branches. Cal State’s Rohnert Park office was closed since RCU offers a nearby branch and ATMs in Rohnert Park. “CSCCU has served the financial needs of state employees and our community for nearly 75 years,” said Jim Larson, CSCCU’s CEO. “Our partnership with RCU is allowing us to fulfill our mission and provide the added benefits our members want and deserve.”

Ten Maine CUs recognized with 16 awards

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PORTLAND, Maine (6/2/11)--Ten Maine credit unions have been recognized with a record 16 awards as the 2011 honorees of the state-level Dora Maxwell Social Responsibility Community Services Awards, the Louise Herring Philosophy in Action Member Service Awards, and the Desjardins Youth and Adult Financial Education Awards.
Click to view larger image Richard Dupuis (left), chair of the Maine Credit Union League board, presents a first-place Dora Maxwell Social Responsibility Community Service Award to Donna Steckino, president/CEO of Community CU, Lewiston, one of four first-place awards the credit union received.
Click to view larger image Maine Credit Union League Board Chair Richard Dupuis (left) presents a first-place Desjardins Youth Financial Education Award to Vicki Stuart, president/CEO of Central Maine FCU, Lewiston, one of three first-place awards the credit union received. (Photos provided by the Maine Credit Union League)
The state awards were presented at the Maine Credit Union League’s Annual Meeting and Convention in Augusta. During the past year, Maine credit unions raised nearly $1.4 million for various causes, such as a record-setting $402,740 for the Maine Credit Unions’ Campaign for Ending Hunger, $65,000 for Maine Special Olympics, $55,000 for the Children's Miracle Network, $55,000 for the Maine Children's Cancer Program, and $30,000 for Haiti Relief. Also, Maine credit unions volunteered nearly 31,000 hours for community organizations and activities statewide. Maine’s credit unions provided initiatives to members that highlight the credit union difference, such as special low- or no-interest loans for fuel assistance, building a community vegetable garden in a low-income neighborhood, programs for financial education and other programs to help members in difficult times. The 2011 first-place recipients of the Dora Maxwell Social Responsibility Community Service Award are:
* Community CU, Lewiston, $20 million to $50 million in assets; * Central Maine FCU, Lewiston, $50 million to $100 million; * Five County CU, Bath, $100 million to $200 million; and * Town & Country FCU, South Portland, $200 million to $500 million in assets.
Louise Herring Philosophy in Action Member Service Awards went to:
* Community CU, less than $50 million in assets; and * Central Maine FCU, $50 million to $250 million.
The Desjardins Youth Financial Education Award winners recognized are:
* Community CU, less than $50 million in assets; and * Central Maine FCU, $50 million to $250 million.
First-place Desjardins Adult Financial Education Awards went to:
* Community CU, less than $50 million in assets; and * University CU, Orono, $50 million to 250 million.

Afghan-owned CUs stimulate growth in conflict areas

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KABUL, Afghanistan (6/2/11)--Despite ongoing security risks, Afghanistan’s Islamic investment and finance cooperatives (IIFCs), or credit unions, are providing increasing levels of working capital to small and medium-scale business owners and farmers.
Click to view larger image Despite conflict in many areas, Afghanistan’s Islamic investment and finance cooperatives, or credit unions, provide increasing levels of working capital to small and medium-scale business owners and farmers. Here, a membership development officer tells vendors about Islamic investment and finance cooperatives services in Lashkar Gah, the capital of Helmand province.
Click to view larger image Following violent protests in Kandahar City, Afghanistan, last month, Kandahar Islamic investment and finance cooperatives disbursed member loans for rebuilding inventory and repairing shops. (Photos provided by World Council of Credit Unions)
In the last quarter, 30 IIFCs distributed nearly 8,000 loans totaling $7.4 million and increased total membership by 10%, said the World Council of Credit Unions (WOCCU). WOCCU will soon test a new hybrid loan product with the IIFCs that will combine financial leasing and lines of credit to offer larger and longer-term loans to small-business owners and farmers in Helmand province. The IIFCs have increased membership in high-risk provinces such as Helmand, Kandahar and Uruzgan with funding from the U.S. Agency for International Development (USAID) through its WOCCU-managed Rural Finance and Cooperative Development (RUFCOD) program. IIFC membership development officers work with board members from local shura, or community councils, to travel into previously unserved areas and introduce the IIFC to groups of small farmers and business owners. A female membership development officer from Nangarhar province is reaching out to women’s groups in the area. Recent funding from the United Kingdom Department for International Development (DFID) will build on the RUFCOD program and allow five IIFCs in Helmand province to test the new hybrid loan product, which will target entrepreneurs and farmers who have the potential for expansion but lack reliable financial records or collateral to guarantee a loan. Members will be able to access larger and longer-term loans to invest in their businesses, while the IIFCs’ ability to recover and resell leased assets will reduce the institutional risk in lending. WOCCU expects the new product will increase loan demand and accelerate IIFC sustainability in the south. The IIFCs are the first--and only--cooperative financial institutions in Afghanistan to offer products and services compliant with Islamic law. Since helping the first two Afghan IIFCs open their doors in 2005, WOCCU has worked with the Afghan people in 14 provinces to establish 40 IIFCs and points of service, 25 of which are located in the conflict-ridden southern and eastern provinces. Today, the IIFC network boasts a growing membership of 70,047 and $20.3 million in assets. WOCCU estimates that nearly 45,903 jobs have been created during the past year with IIFC financing. “The IIFC structure is quite different from other microfinance institutions and banks in Afghanistan,” explained Barry Lennon, WOCCU’s senior vice president who oversees WOCCU’s programs in Afghanistan. “The Afghans who become IIFC members each own a piece of these Islamic cooperatives. They see the IIFCs as Islamic financial institutions where they can access fully Shari’a-compliant products and services. The member ownership and the participation of local elders have permitted the IIFCs to penetrate remote rural communities where others haven’t been able to reach.”

WOCCU development engagement programs in Belarus Kenya

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MADISON, Wis. (6/2/11)--The World Council of Credit Unions (WOCCU) and Global Women's Leadership Network announced Wednesday that two new development engagement programs will be offered this year--one in Belarus and one in Kenya. In the programs, credit union leaders will get hands-on experience in the global credit union movement, learning about challenges other credit unions face in their regulatory environments and working alongside WOCCU development staff on key credit union issues. "Participants have the opportunity to travel to another country, learn about the local credit union system and provide knowledge that will help other movements flourish," said Brian Branch, WOCCU executive vice president and chief operations officer. "Each program needs different expertise, so attendees should select one that best matches their interests." Belarus, located in Central Europe, will host an engagement program Sept. 4-10. It will focus on developing credit union legislation and regulation, and providing staff training to the credit union trade association there. WOCCU said this is a unique opportunity to help a newly established credit union movement get off the ground. Kenya's program in East Africa will be Oct. 30-Nov. 6. Participants will develop savings and credit products tailored to the needs of the rural poor and see first-hand how small credit unions reach the unbanked through an application service provider program developed by WOCCU. During the trip, participants also will volunteer at a WOCCU-supported orphanage, Busia Compassionate Centre. "My trip to Kenya was inspiring on many levels," said Joanne Duncan, senior vice president and chief financial officer at the Credit Union National Association. She participated in an engagement program last year in Kenya. "WOCCU and its staff live the philosophy of people helping people and seeing them in action, knowing the impact they've had at Busia, was inspiring. I'm challenged every day to incorporate that philosophy into my work. That's what sets credit unions apart from other institutions," Duncan said. The programs are open to men and women. Participants do not need to be members of the Global Women's Leadership Network. However, network members receive a discounted registration fee. For more information use the link.

CU System briefs (06/01/2011)

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* SAGINAW, Mich.(6/2/11)--Team One CU is offering 'gas discount' day today at a local gas station. The $324.5 million asset, Saginaw-based credit union will provide a 25-cent per gallon discount and distribute more than 4,000 gallons of gas today. The credit union's employees also will be on hand to wash windshields and direct traffic (Saginaw News May 29). Team One President Gerald Hutto told the News that it is sponsoring the event because high gas prices affect everyone … * SAN FRANCISCO (6/2/11)--CMG Mortgage Co. (CMG MI) announced that
Joe Dillon, senior vice president and general manager, will retire Oct. 31. He arrived at CMG MI in 2009 after working at CUNA Mutual Group in executive roles in various business units. Kimberly Shaul will assume Dillon's leadership role and responsibilities. CMG MI is a joint venture between PMI Mortgage Insurance Co. and CUNA Mutual Insurance Society, and is managed by two senior vice presidents/general managers. CMG MI's co-senior vice president and general manager, Michael Edwards, supervises insurance operations while Dillon oversees marketing, sales, legal and product development. Shaul most recently served as deputy secretary of revenue for Wisconsin and spent three years as state deputy commissioner of insurance. She acted as agency lead for the National Association of Insurance Commissioners in the financial supervision of monoline (bond and mortgage) insurers. She also served in leadership positions at American Family Insurance Group, Madison, Wis. … * SUMTER, S.C. (6/2/11)--Rollin Reynolds Jr. of Rembert, S.C., died May 26 at the age of 79. He was a volunteer at SUMTER, S.C.-based SAFE FCU for 48 years and served on the board of directors from 1964 to the present. He was chairman of the board for nine of those years. Upon his retirement, he was named director emeritus. Reynolds also served on the South Carolina Credit Union League board of directors (Chronicle-Independent.com May 30) …

iNews Nowsi Top 10 stories for May

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MADISON, Wis. (6/2/11)--An article about how language in the Wisconsin state budget bill would make it easier for the state’s credit union members to be stripped of their ownership equity by permitting direct conversion from a credit union to a bank charter was the top News Now story in May. Here is a list of the top 10 most-visited stories for the month. Note that two stories tied for the ninth spot. 9. (tie) Breach argues for interchange delay, CUNA says WASHINGTON (5/2/11)--Days after a widespread data breach occurred, the Credit Union National Association (CUNA) noted that the Federal Reserves interchange-fee-cap regulations would give merchants a profit windfall while leaving credit unions to “cover even more of the costs of merchant data breaches.” The data breach in question happened when credit card numbers and other personal information of 77 million users of Sony’s online gaming platform PlayStation Network was compromised and potentially stolen last week by hackers. 9. (tie) Survey: CUs’ biggest challenge--attracting new members TALLAHASSEE, Fla. (5/2/11)--A majority (61%) of credit union industry leaders cited attracting new members as the greatest challenge affecting credit unions, after concerns over the U.S.’s economic climate declined, according to a recent industry survey by Credit Union 24, a deposit-taking ATM and point- of-service credit union service organization. 8. Bernanke: ‘Good reason’ for interchange concerns WASHINGTON (5/13/11)—Federal Reserve Chairman Ben Bernanke yesterday reiterated that he is not sure that the small institution exemption in pending interchange fee cap regulations would work as planned, adding that there “is good reason to be concerned” about its effectiveness. 7. Fed can delay some interchange provisions: CUNA WASHINGTON (5/3/11)--Credit Union National Association (CUNA) President/CEO Bill Cheney Monday said the Federal Reserve Board has the authority to delay portions of pending statutory changes to debit card interchange rules, and he urged the Fed to use that authority. 6. Two FCUs placed into conservatorship by NCUA ALEXANDRIA, Va. (5/4/11)--Noting it would work with both financial institutions to “resolve issues” affecting safety and soundness, the National Credit Union Administration announced yesterday that it had placed two federal credit unions into conservatorship: Valued Members, of Jackson, Miss., and Hmong American, of St. Paul, Minn. 5. Ad shows interchange cap’s ‘domino’ effect WASHINGTON (5/10/11)--The Credit Union National Association and associated Electronic Payments Coalition partners are showing consumers the ‘domino effect’ that pending interchange fee rate cap legislation could have on their own financial situations via a new 30-second ad. 4. CUNA IDs NCUA corporate prepayment plan concerns WASHINGTON (5/25/11)--The Credit Union National Association (CUNA) has developed more useful information on the key elements of the National Credit Union Administration’s (NCUA) proposed plan for voluntary prepayment of corporate credit union stabilization fund assessments. The information, which is in a question-and-answer document, is designed to help credit union officials understand the proposal and assess whether they want to take part in NCUA’s proposed prepayment plan. 3. Compliance: Notifying members under Reg E WASHINGTON (5/31/11)--Member notifications and other disclosures are addressed in this month’s Credit Union National Association (CUNA) Compliance Challenge. 2. CUs could pre-pay assessment under NCUA plan ALEXANDRIA, Va. (5/20/11)--Responding to the comments of many credit unions nationwide, the National Credit Union Administration (NCUA) Thursday released a proposal that would allow most credit unions to voluntarily prepay a portion of their future Corporate Credit Union Stabilization Fund assessments. 1. Wis. provision in budget bill would make CU conversions easier PEWAUKEE, Wis. (5/16/11)--The Wisconsin Legislature’s Joint Finance Committee Thursday voted to include language in the state budget bill that would make it easier for Wisconsin's 2.2 million credit union members to be stripped of their equity in the cooperative financial institutions they own--by permitting direct conversion from a credit union to a bank charter, according to the Wisconsin Credit Union League.