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CU System briefs (07/01/2011)

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* HARAHAN, La. (7/5/11)--GEA FCU, St. Gabriel, La., is the newest branch of $460.1 million asset Neighbors FCU, based in Baton Rouge, according to the Louisiana Credit Union League (eNews June 29). Neighbors now has 600 new members from the merger, finalized in April. The GEA FCU branch will remain open and serve all employees of the PCS Nitrogen, Honeywell and Williams-Olefins plants. Long-time GEA Manager Amanda Decoteau will remain at the location … * SEATTLE (7/5/11)--Members of Watermark CU, a $557.3 million asset credit union in Seattle, have approved a merger with Sound CU, a $537 million asset credit union in Tacoma, Wash. The merger, to be effective Sept. 1, will form Washington State's fifth-largest credit union, operating under the name of Sound CU. It will be based in Tacoma and have nearly $1.1 billion in assets, with 21 branches. Sound CU CEO Rick Brandsma will remain in the position, while Watermark CEO Sharon Sanford will stay on as a consultant during the transition. The vote was the final step in the merger process. No layoffs are planned (The Seattle Times June 24) … * HARRISBURG, Pa. (7/5/11)--The Pennsylvania Credit Union Association (PCUA) has slated a pilot Reality Fair at the State Capitol in November, announced PCUA's newsletter, Life is a Highway (July 1). The fair is a program of the National Credit Union Foundation and supported by PCUA and the Pennsylvania Credit Union Foundation. PCUA plans to follow the pilot with four fairs across the state toward the end of the school year in April 2012 … * READING, Pa. (7/5/11)--CTCE FCU, an $84 million asset credit union in Reading, Pa., opened five offices Friday as shared-branch outlets (Life is a Highway July 1). Four of the branches will be open seven days a week. The outlets are in Reading, Westlawn and Shillington. One is inside Redner's Warehouse Markets in a shopping mall, and three are inside Giant Food Stores. Pennsylvania has 131 shared branching outlets … * FRANKLIN, Va. (7/5/11)--Bronco FCU CEO Bob Petty has announced his retirement. Petty has been with the Franklin, Va.-based credit union for 27 years, the past 13 as CEO. "Under Bob's leadership, first as a manager, then a board member, and lastly as CEO, assets have grown from $13.3 million to $201 million," said Charlie Wrenn, chairman of Bronco's board. "Members grew from 3,650 to over 20,000," he added. Petty also has served on various committees and the board of the Virginia Credit Union League, including serving as board chairman. He is also a member of VACORP FCU and the Credit Unions Care Foundation of Virginia ...

Texas Trust CU focuses on loans to power growth jobs

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MANSFIELD, Texas (7/5/11)--Texas Trust CU announced an aggressive new small business lending program last week, in which tens of millions of dollars will be available in both conventional and Small Business Administration (SBA) loans. The Mansfield, Texas-based, $680 million asset credit union is focusing on loans of $3 million or less, particularly in the medical and healthcare sectors. The loans will extend the available pool of loan funds to a greater number of small businesses than if Texas Trust offered only a few large loans, said, Mark Joyce, executive director of business services. "We are open to any sound request for loan funds from small businesses," he said. Joyce noted that Texas Trust CU came through the recession "in a very strong position. We aren't in the tenuous position that so many banks are in today. That allows us to make funds available to the small business community, an area where banks have been so reluctant to invest." The credit union sees the loans "as an important way for Texas Trust to invest in the community we serve, encouraging job growth and economic activity. This will benefit not only our members, but everyone in and around the cities and communities of North Texas and East Texas," Joyce said. The Credit Union National Association and credit unions are pushing for Congress to increase the member business lending cap to 27.5% of assets from 12.25% to help generate $13 billion in new small business loans and 140,000 new jobs without costing taxpayers.

CU loans rise 0.4 in May

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MADISON, Wis. (7/5/11)--After experiencing a good month in May, credit union loan portfolios are positioned to record gains in 2011, according to a Credit Union National Association (CUNA) economist’s analysis of May’s monthly estimates of credit unions.
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Credit union loans outstanding increased 0.4% during May, compared with a 0.2% increase in April. Unsecured personal loans led loan growth with a 1.7% gain, followed by credit card loans (1%) and adjustable-rate mortgages (0.9%). Used-auto loans and fixed-rate mortgages grew 0.7% and 0.3% respectively, while home-equity loans and new-auto loans declined 0.2% and 0.6%, respectively. Credit union loans totaled $576.4 billion, compared with $579.7 billion in May 2010, according to the monthly estimates. Loans balances increased for the second consecutive month and the May increase (0.4%) was double the increase CUNA reported in April (0.2%). May loan growth also was about four times faster than the growth posted in May of 2010 (0.1%), Mike Schenk, CUNA vice president of economics and statistics, told News Now. “While this month’s loan growth was relatively weak in the broader scheme of things, the good news is that it appears that momentum is picking up and that portfolios may be back on track to record gains in 2011,” Schenk said. “Having said this, we continue to stress that weak labor markets and a lackluster housing market will keep many consumers focused on paying down debt rather than acquiring more--and that suggests that annual increases will be far below those normally seen in economic recoveries. CUNA economists’ baseline forecast for movement-wide loan growth in 2011 remains at 2%.” Unsecured personal loans (1.7%), credit cards (1.0%), adjustable rate mortgages (0.9%), and used-auto loans (0.7%) reflected the most significant increases in May, he added. “Another interesting development this month is the fact that the loan growth we saw, while small, occurred at the same time that credit unions reported a decline in savings balances, which was -0.67%,” Schenk said. “Because loans grew and savings declined, credit union loan-to-savings ratios increased to 69.5% from 68.7%--the first increase in six months. “This is welcome news if it turns out to be the beginning of a trend because the nation’s credit unions are awash in liquidity, and their large investment portfolios with near-zero yields are putting a significant drag on earnings,” he continued. “Of course, on a seasonal basis, loan growth tends to outpace savings growth in the summer months so further improvement in this ratio is expected.”
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Credit union savings balances decreased 0.7% in May, compared with a 0.7% increase during April. Money-market accounts led savings growth, increasing 0.6%. Regular shares fell 0.1%, followed by individual retirement accounts, which decreased 0.4%. One-year certificates dropped 0.5%, and share drafts declined 4.7%. Credit union savings in May totaled $829.9 billion--or $32 billion more than the $797.9 billion in May 2010. Regarding asset quality, credit unions’ 60-plus-day delinquency rate slightly improved, declining to 1.61% in May from 1.63% in April. “Slowly improving labor markets should help to buoy incomes and fuel further improvement in asset quality as the tepid but sustainable U.S. economic recovery continues,” Schenk said. 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--fell slightly to 18%. The movement’s overall capital-to-asset ratio remained at 10%. The total dollar amount of capital is $97 billion.

Owning home still American dream for 90 polled

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NEW YORK (7/1/11)--Despite the housing crisis, nearly 90% of Americans polled in June continue to say homeownership is an important part of the American dream and that people in financial crisis over housing should get support. They also increasingly blame financial institutions and lenders for the housing problems. In the nationwide telephone poll, conducted by The New York Times/CBS News Juny 24-28 with 979 adults, researchers found blame for the financial crisis is shifting from regulators to financial institutions (The New York Times June 30). In the most recent poll, 42% blamed lenders and 29% blamed regulators. That compares with 28% and 40%, respectively, in the publications' 2008 poll. A few respondents in each poll blamed borrowers who took on loans they couldn't afford. Consumers polled also indicated more support for helping people in financial crisis over housing than for supporting those without jobs for months. About 45% of respondents said the government should do more to improve the housing market; 16% said it should do less. Roughly 53% said the government should help people who are having trouble paying their mortgages. Almost all said the mortgage tax deduction should not be eliminated. Other findings:
* Roughly 45% of respondents said buying a home is risky; before the financial crisis, housing was considered one of the safest investments. * Half of those surveyed said the market downturn affected their long-term plans, with one in five respondents saying the crisis prevented them from moving to another city or taking a different job. * Nearly 25% of those surveyed said their home is worth less now than what they owe on their mortgage. * Those who said the economy's downturn is permanent rose to 39%, up from 28%. * Many respondents dismissed stocks as a long-term savings vehicle in favor of a savings or money market account (22%); a house (26%); or a 401(k) or individual retirement account (41%). * Roughly 58% said lenders should require a 20% down payment when selling a house; 36% said they should not. * Of those surveyed, 28% said that strategic default (foreclosing on a home because it has lost too much value) is justified. * Three-fourths of respondents said neighborhood foreclosures are a problem in their communities.

Public Service CU rolls out first mobile shared branch

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ROMULUS, Mich. (7/5/11)--Public Service Credit Union (PSCU), Romulus, Mich., can serve members of multiple credit unions with the first mobile Co-Op Services Shared Branch. The new PSCU “Branch A-Go-Go” made its debut in June. The mobile branch includes an ATM available to all consumers, and a full service branch open for banking transactions for PSCU members and credit union members who are part of the Co-Op Services Shared Branching network. “We already have shared-branching services at three of our branches, and we know how much it is utilized and appreciated by the members who use them,” said Dean Trudeau, PSCU president/CEO. “Helping people get easy access to financial services is a trademark of credit unions and this mobile unit represents a giant leap forward in strengthening that objective.” Plans for the mobile branch range from festivals, events and schools as well as taking the branch to PSCU’s business partners on paydays.

FirstCorp asks CUs to join the revolution

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PHOENIX (7/5/11)--Claiming it has survived the financial crisis, First Corporate CU invited credit unions to “Join the Revolution” during its 34th annual business meeting in Scottsdale, Ariz. First Corporate CU delivered its business and capital compliance plan to its membership on Thursday. First Corporate CU credit union-members have until July 31 to notify the corporate about perpetual contributed capital conversion and nonperpetual capital account subscriptions. “Now that we have survived the crisis, developed a business and capital compliance plan and have proven the critics who said ‘bigger is better’ wrong, our next test will be administered when the future of FirstCorp is in the rightful hands of our member-owners,” said Pete Pritts, president/CEO of the Phoenix-based corporate. FirstCorp will make the necessary operating adjustments “to live and fight another day,” said Greg Harden, FirstCorp executive vice president and chief investment officer. FirstCorp board and committee election results were also announced at the annual meeting. Elected to three-year terms to the board of directors via acclamation were:
* David E. Doss, president/CEO Arizona State CU, Phoenix; * Bruce Rodela, president/CEO, Frontier Financial CU, Reno, Nev.; and * Robert Swick, president/CEO, Hughes FCU, Tucson, Ariz.
FirstCorp 2011-2012 Board officers are:
* Chair--Doss; * Vice Chair--Rodela; * Treasurer--Robert Ramirez, Vantage West CU, Tucson, Ariz; and * Secretary--Dan Desmond, president/CEO, TruWest CU, Tempe.
Incumbent Robin Romano, CEO, Marisol FCU, Mesa, Ariz.; was appointed to a three-year term to the FirstCorp Supervisory Committee, and incumbent Stephen Dunham, president/CEO, Canyon State CU, Phoenix, was appointed to a three-year term to the FirstCorp Credit Committee. In another development, Fitch ratings agency on Friday affirmed and witdrew its ratings of FirstCorp, including its long- and short-term issuer default rating (IDR) of ‘A-’ and ‘F1+,’ respectively. The rating withdrawal reflects Fitch’s view that FirstCorp is no longer considered relevant to Fitch’s coverage due to lack of market interest. Fitch will no longer provide rating or analytical coverage of the corporate. Fitch affirmed and withdrew the following ratings:
* Long-term IDR ‘A+’ * Short-term IDR ‘F1+’ * Individual ‘E’ * Support ‘1’ * Support Floor ‘A+’

Senate Banking chair seeks interchange input from S.D. CUs

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BISMARCK, N.D. (7/5/11)--Senate Banking Committee Chair Tim Johnson (D-S.D.) is soliciting feedback from South Dakota credit unions on how the Dodd-Frank regulatory legislation has impacted their businesses, in a credit union-only conference call at 2 p.m. (CT) today. “South Dakota credit unions have a great opportunity [today] to discuss Dodd-Frank, one year later, with the Senate Banking Committee chairman,” said Jeff Olson, vice president of advocacy and awareness for the Credit Union Association of the Dakotas. “This will be a vehicle for participants to share how the financial regulatory legislation directly impacted their respective credits unions, and more importantly, their members.” The Credit Union Association of the Dakotas host the call from its headquarters in Bismarck, N.D. Participating credit unions will be Black Hills FCU, with $894 million assets, Rapid City; Bell FCU, with $35 million assets, Sioux Falls; Dakota Plains FCU, with $38 million assets, Lemmon; Service First FCU, with $121 million assets Sioux Falls; HealthCare Plus FCU, with $34 million assets, Aberdeen; and Sioux Falls (S.D.) FCU, with $159 million in assets. Credit Union National Association (CUNA) President/CEO Bill Cheney said CUNA’s focus would turn to ensuring that the small issuer exemption provided in the final rule would work as planned. Cheney said 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.

Top 10 INews NowI stories for June

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MADISON, Wis. (7/5/11)--Regulatory and compliance issues dominated News Now’s monthly top 10 stories list for June. The stories are: 10. Two small CUs placed into conservatorships ALEXANDRIA, Va. (6/28/11)--Just two-and-a-half weeks after issuing a cease-and-desist order to the $7 million-asset credit union, the National Credit Union Administration (NCUA) assumed control of Borinquen FCU of Philadelphia on Friday. 9. CUNA Reg CC changes could spike compliance costs WASHINGTON (6/6/11)--A Federal Reserve proposal to amend Regulation CC to increase next business day availability and encourage electronic check processing and returns “would substantially increase fraud-related and compliance costs if adopted,” the Credit Union National Association said in a Friday comment letter. 8. Fed to consider final interchange rule June 29 WASHINGTON (6/22/11)--The Federal Reserve Board Tuesday announced it will consider a final rule to implement a statutory cap on debit card interchange fees at an open meeting on Wednesday, June 29. 7. CUNA delves into corporate fund prepayment issues WASHINGTON (6/14/11)--The National Credit Union Administration (NCUA) continues to evaluate credit union interest in its proposal to allow credit unions to prepay some of their corporate credit union stabilization fund assessments, and NCUA Deputy Director Larry Fazio on Monday said that whether or not a given credit union participates in the plan would not affect its NCUA examination or treatment by examiners. 6. CUNA: Strong Senate support can be used to shape interchange rule WASHINGTON (6/10/11)--Credit Union National Association President/CEO Bill Cheney said the Senate clearly acknowledged with its 54-45 vote Wednesday that there are issues with the debit card interchange fee cap that need to be examined before a rule goes into effect. 5. Compliance: What to know about Reg Z changes WASHINGTON (6/24/11)--CompBlog, the Credit Union National Association’s newest addition to its electronic information toolshed for members, has started a conversation about what credit unions should focus on in the changes the Federal Reserve made this spring to its Regulation Z. 4. Fed final interchange rule reflects CU input, Cheney says WASHINGTON (6/30/11)--Credit Union National Association (CUNA) President/CEO Bill Cheney said that the Federal Reserve “listened to the real concerns of credit unions” as it developed its final debit interchange fee cap rule, which was approved by a 4 to 1 vote by the Fed on Wednesday. 3. Gen Y and the future of CUs 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. 2. CU efforts intensify at Fed as interchange delay fails in Senate WASHINGTON (6/9/11)--Credit Union National Association (CUNA) President/CEO Bill Cheney said Wednesday that the U.S. Senate’s failure to delay implementation of the Federal Reserve’s debit card interchange fee cap is deeply disappointing and CUNA and credit unions will continue pressing the Federal Reserve to improve the proposed rule to minimize negative effects on credit unions and their members. 1. Supreme Court to look at RESPA case WASHINGTON (6/27/11)--Credit unions will want to be aware of last week’s U.S. Supreme Court decision to hear a Real Estate Settlement Procedures Act--or RESPA--class action case that involves title insurance.

Ohio league supports state probate bill

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COLUMBUS, Ohio (7/5/11)--The Ohio Credit Union League testified recently before a state House Judiciary and Ethics Committee in support of a bill that would modernize Ohio's probate act and include credit unions as fiduciaries or custodians of funds for probate purposes. Senate Bill 127 sponsor state Sen. Kevin Bacon (R-Columbus) amended his original measure to include credit unions, said the league (eLumination Newsletter June 29). "To put this into perspective, credit unions in Ohio were not eligible to accept probate funds for their members until 2006," testified John Koslowski, league general counsel. He also stressed that the General Assembly must continue modernizing the state's laws for the benefit of people, businesses and communities. The league constantly pursues legislation, regulation and policies that provide credit unions with the authority and tools to offer affordable financial products and services.

Minnesota foundation supports IBizKidI

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ST. PAUL, Minn. (7/5/11)--The Minnesota Credit Union Foundation (MnCUF) has provided a grant to BizKid$, a public television program aimed at financial education for students. The Emmy Award-winning series, launched in 2008, teaches students how to use credit wisely and reinforces the importance of budgeting, saving and giving back to the community. The foundation has helped fund the program for the past three years, said MnCUF Chairman Pat Brekken, president of Richfield-Bloomington CU, Richfield. "Thanks in part to the foundation's grant, our credit unions can use this relevant and engaging tool to provide financial education to their members and communities across the state," said Brekken. BizKid$ has national support from America's Credit Unions, a coalition of more than 130 credit unions, leagues, foundations and affiliates--including the Minnesota foundation--and from the National Credit Union Foundation. The credit union system and its affiliates have contributed more than $10.4 million to the series' production, its website and its curriculum. In its fourth season, which began airing in April, BizKid$ returns with 13 episodes focusing on life skills such as goal-setting, protecting against identity theft, and understanding taxes. BizKid$ has a viewership range of 271 million and has aired on more than 340 PBS stations nationwide. It has the highest pick-up rate with public broadcasters of any children's program broadcast by American Public Television. More than 1.2 million people tune in to each episode. This fall, Minnesota credit unions can also participate in an online series of financial education training offered through the University of Minnesota Extension and funded by MnCUF. The webinars aim to improve financial literacy levels of Minnesota educators, including classroom teachers, agency staff, financial professionals and others who teach personal finance.