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Proper ATM fee disclosures can avoid lawsuits

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LAS VEGAS (7/13/09)--Lawsuits charging improper ATM fee disclosures against financial institutions--including credit unions--and others operating ATMs continue to be filed in Pennsylvania. The most recent lawsuit, filed in a U.S. District Court in Pennsylvania Wednesday, is against Global Cash Access Holdings Inc., a Las Vegas-based company that provides credit and ATM services to casinos around the country (Las Vegas Sun July 10). Recently four lawsuits against credit unions were filed claiming there were no fee disclosures on their ATMs. At least 10 lawsuits against financial institutions are making those same claims. The suits have prompted credit unions to check their disclosure notice requirements, according to the Pennsylvania Credit Union Association (PCUA) (Life is a Highway July 10). Its compliance department has received several calls about ATM fee disclosures. Credit unions operating an ATM and charging consumer fees for balance inquiries or an electronic funds transfer such as a cash withdrawal or transfer should be sure that all ATMs, including those in the lobby, comply with the fee disclosure regulations in Regulation E, said PCUA. CUNA Mutual Group provided these tips, said PCUA:
* Post a sign on or near every credit union ATM stating that fees will or may apply. If the credit union chooses to state the fee's amount on its signage, procedures should be in place to ensure the accurate charge amount is always reflected on the signs. * Rely on the ATM screen to state the actual amount of the fee. Once notified, consumers must be able to cancel the transaction and avoid the fee if they want. * Disclose the fee on the receipt. * Adopt procedures to inspect the ATMs to ensure the required signage or notices are present, current and have not been altered.

MATCU cuts five management positions

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MEMPHIS, Tenn. (7/13/09)--Memphis Area Teachers CU (MATCU) eliminated five management positions last month resulting from of a $10 million loss last year and regulators’ recommendations. Positions cut at the $527.8 million asset, Memphis-based credit union include: vice president of lending, vice president of community affairs, vice president of credit union service organization, vice president of liabilities, and chief financial officer, said James Hayslip, chairman of the MATCU board of directors (The Commercial Appeal July 10). The board’s action followed the resignation of CEO Carlos Webb in April. Once the credit union finishes its restructuring--which could result in more job cuts--it will initiate a search for a new CEO, the newspaper said. The credit union needed to operate with a more streamlined organization, so the board restructured the leadership roles, Maria McLendon, assistant vice president of marketing, told the paper. MATCU invested in bonds several years ago that nose-dived in value last year--particularly in the fourth quarter 2008. They resulted in the credit union losing $10 million, Hayslip told the paper. A call to MATCU by News Now was not returned by press time.

CUs work with members on auto delinquencies

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PERRYSBURG, SYLVANIA TOWNSHIP and HOLLAND, Ohio (7/13/09)--Several credit unions in Ohio are doing their best to work with their members who become delinquent on auto loans. Great Lakes CU, Perrysburg, Ohio, has been working to reduce the burden on its members who have had their cars repossessed. Instead of sending the cars to auction, the credit union has begun selling the vehicles itself--a situation CEO Dave Seeger describes as a “win-win.” Great Lakes received about 40 cents on the dollar when it auctioned cars. Now, the credit union receives 94% of the National Auto Dealers Association value of the cars. Auctions drove the price of the cars down, Seeger said. Although the sales process is more labor intensive for the credit union, the member, buyer and credit union receive a higher return than they would at an auction, he added. Great Lakes CU uses its website to advertise the cars it has for sale. It also has a partnership with a local tire store and parks two to three cars in the store’s lot to advertise. The credit union also may partner with a local dealership. One of the reasons the credit union’s auto sales have been successful is because the cars are in good shape. Generally, repossessed cars are in “tougher” shape because they weren’t taken care of, Seeger said. Today’s repossessions are due to job loss. The vehicles are newer, and the owners took care of them--but the owners happened to lose a job, Seeger said. When Great Lakes receives a car, it has the car detailed. Then staff look at repairing the car if there is something wrong with it. If a high rate of return is expected on the investment of the repair, the credit union will have the car fixed. Such investments have paid off, Seeger said. The credit union has sold more than 50 cars in the past year. Delinquency rates at Great Lakes have leveled off a little, but rates are higher now than they had been in previous years. However, repossessions are starting to decline, Seeger said. The most important thing a credit union can do to help members with delinquencies is to be proactive, according to Ron Patton, senior vice president of lending at Directions CU, Sylvania Township. The credit union’s real estate department will call members if they are late on their payments, Patton said. “They’re thankful we’re proactive,” Patton said. “Some are embarrassed about calling us. You can be proactive in a nice way--and it really helps to solve problems early.” When members are delinquent on their auto loans, the credit union will determine if their financial troubles are long term or short term. Often, they’re short term, he said. The credit union can modify the loan, reduce payments for a period of time, or rewrite the loan. “[We do] anything we can do to help them out, within reason,” Patton said. “It’s important to work with them as soon as you can--after two or three months, it’s really hard.” The three primary reasons for delinquencies are job loss, divorce and death. If the repossessed vehicle is in good shape, the credit union will try to sell it. If the vehicle needs repair or is in poor shape, it will be auctioned. About 60% to 65% of repossessions are taken to auction, Patton said. The money earned from the auction is not usually enough to pay off the loan--just a portion of it, he said. Jeep Country FCU, Holland, sells repossessed cars through sealed bids. After the car is repossessed, the member has 20 days to redeem it. If the car is not redeemed, the public can submit bids on it. The highest bid wins, Joyce Jones, collections manager, told News Now. The money earned from the sealed bid is seldom enough to pay off the member’s loan. The credit union also can choose not to take a bid if it’s too low, she said. Delinquencies at Jeep Country are starting to level off--but they’re still much higher than they were last year. The credit union has repossessed 27 vehicles so far this year--most of them due to job loss, Jones added. Jeep Country wants to work with members who are struggling to make payments because it does not want to repossess cars. “You call, we listen,” Jones said. “We do the best we can.”

GM Chrysler CU discounts to continue though year-end

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LANSING, Mich. (7/13/09)--General Motors (GM) and Chrysler credit union member discounts as part of the “Invest in America” program will continue through the end of the year, the Michigan Credit Union League announced Thursday. “Invest in America” is credit unions’ auto loan discount program with auto manufacturers General Motors Corp. (GM) and Chrysler Corp. The program started in December with a four-state pilot program for GM and a 12-state pilot for Chrysler. The program’s sales totaled 35,938 in June, the league said. Of Chrysler’s sales in June, 26% came through “Invest in America.” The number of GM and Chrysler car sales facilitated through the program so far--December through June--is 175,261. The program is on pace to sell 300,000 vehicles this year. To date, 140,209 loans value at $2.8 billion combined have been made through credit unions as part of the program.

Media blitz nets positive stories for CUs in California

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RANCHO CUCAMONGA, Calif. (7/13/09)--A media blitz conducted by the California Credit Union League netted a wealth of positive print stories about California credit unions accepting IOUs (registered warrants) during the state’s ongoing budget crisis. Stories have run or will run in several of the state’s prominent newspapers and business journals, and national news outlets such as CNNMoney.com and the Associated Press. Daniel Penrod, the league’s credit union industry analyst, and Henry Kertman, league vice president of public affairs, also have talked to public broadcasting station reporters. Dan Mica, president/CEO of the Credit Union National Association, will represent California credit unions when he speaks on the Public Broadcasting Station program “Nightly Business Report” scheduled for Tuesday evening, the league said. Many large banks said they would not accept IOUs after July 10 (Los Angeles Times July 10). Most credit unions told the league they are accepting IOUs and are not putting a time limit on them, Penrod told the Orange County Register Tuesday. The league has not found any of the 490 credit unions in the state that will not accept IOUs, he said. As of Thursday, 78 credit unions confirmed they are accepting the IOUs, the league told The Press Democrat. “Credit unions are being very proactive in letting their members know they will accept IOUs,” Penrod added. “Credit unions are owned by their members. Some have specialized memberships, such as public employees or firefighters.” Although some credit unions might not be able to accept the warrants because of pressure wrought by the credit crunch, “the vast majority have higher capital levels built in to handle situations like this,” Penrod told the Register. Since many credit unions largely avoided the risky loans that afflicted banks, they can afford to hold the IOUs until the state pays them off, said the Los Angeles Times Friday. Santa Ana, Calif.-based SchoolsFirst FCU, one of the largest U.S. credit unions with $7.750 billion in assets and more than 400,000 members, will accept IOUs until the end of July, Derek Longshore, vice president of marketing, told the newspaper. The credit union then will re-evaluate its position on a monthly basis before deciding whether to continue with IOUs, the paper added. “We'll be eating up capital when we do that, but we have conservative financial practices and have been able to amass a great deal of capital,” Longshore told the Times. “I don’t know whether secondary markets are charging fees, but we definitely are not.” The majority of credit unions have not set a deadline to stop accepting IOUs, Penrod told The San Diego Union-Tribune Wednesday. Storefronts that cash checks for a fee will compete with the banking industry for California’s IOU business, Penrod told Reuters Tuesday. “I could see a lot of bank customers turning to a third-party source and losing a lot of their paycheck,” he added.

Social media marketing topic of webinar series

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MADISON, Wis. (7/13/09)--Credit unions can learn how to effectively incorporate social media into their marketing programs through a new webinar series from the Credit Union National Association. The Social Media Webinar Series explains how to develop and incorporate a social media strategy into credit union marketing efforts by using free tools such as blogs, YouTube, Twitter, MySpace and Facebook. The four-session series runs Aug. 11-27 and is held in conjunction with the CUNA Marketing and Business Development Council (CMBDC). The series includes:
* Web 2.0 101--An Introduction to Social Media for Credit Unions. The Aug. 11 webinar is a social media primer that provides specific examples of the free online tools that are available to credit unions. It includes examples of how credit unions and others are successfully using these technologies and suggests tools that marketers should be leveraging, regardless of their level of engagement. * Results 2.0: Using Web 2.0 Tools to Achieve Real Business Objectives. The Aug. 18 webinar demonstrates how to build a Web 2.0 strategy that will accomplish credit union objectives. Jeffry Pilcher, publisher of TheFinancialBrand.com and founder of financial brand consultancy company ICONiQ, will also explain how Web tools can build a brand while selling products. Finally, he will offer his thoughts on the right and wrong way to build a strategy. * How to Tie Your Social Media Strategy into Your Overall Credit Union Objectives and Marketing Plan. The Aug. 25 webinar explores how to tie a social media strategy into currently existing channels. Using all of the lessons from this series, this offering helps determine how and where social media align with current marketing plans and other objectives and how to best integrate these plans. * Peer-to-Peer Social Media Web Roundtable. The Aug. 27 bonus session is open to those who attend the entire Social Media Webinar Series. It begins with panelists from three credit unions engaging in social media, followed by questions from participants.
Credit unions can register for individual sessions for $149 or for the entire series for $298. Members of the CUNA Councils can sign up for special discounted rates of $49 and $99, respectively, and will also receive access to an online social media discussion group included in their series registration package. For more information, use the link.

S.W. CUNA school looking for videos

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FARMERS BRANCH, Texas (7/13/09)--Southwest CUNA Management School and the Texas Credit Union League are accepting nominees for the 2009 Credit Union Movie of the Year Award (CUMA). Last year, at Southwest CUNA Management School, Larissa Walkiw, spokesperson for Commonwealth CU’s Young and Free campaign, won the first CUMA award for “The Difference Between Banks and Credit Unions--Part One.” The deadline for this year’s nominations is Thursday. The winning video will be chosen through an online vote. The winner will be announced July 21 at the school’s Alumni and Student Scholarship Auction and Networking Dinner. Eligible videos:
* Are no more than five minutes in length; * Premiered after July 2008; * Promote the credit union industry in a positive way; and * Are uploaded to a public site, such as YouTube.
For more information, use the link.

Illinois REAL Solutions CUs discuss VITA foreclosures

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NAPERVILLE, Ill. (7/13/09)--Illinois credit unions participating in the REAL Solutions program met to discuss the Volunteer Income Tax Assistance (VITA) program and resources from the state Treasurer's office regarding foreclosure and homeownership, said the Illinois Credit Union League. Duane Cole from the Center for Economic Progress and four credit unions that joined the VITA effort--NuMark CU, Sherwin Williams CU, Generations CU, and NorthSide Community FCU--briefed the group on their experiences with VITA. Foreclosure assistance was the primary topic of the meeting. Kevin Smith, director of financial education for the State Treasurer's Office, told attendees how the issue of foreclosure is affecting homeowners and communities across the state and how credit unions could act as a resource for members near foreclosure. He also highlighted tips and resources available from his office. Also from the Treasurer's office was Ben Noven, director of the Finally Home program, which helps state residents buy a home or keep their existing home from going into foreclosure. Credit unions can get involved in the program to help members with bruised credit or a high debt-to-income ratio obtain mortgage loans. The free program is open to credit unions who originate mortgages. The league and the Illinois Credit Union Foundation are working with the National Credit Union Foundation to offer the REAL Solutions for Low Wealth Households program. REAL stands for Relevant, Effective, Asset-building, Loyalty-producing solutions. (See RELATED story: "REAL Solutions CUs offer 26 products in low-wealth markets.")

REAL Solutions CUs offer 26 products in low-wealth markets

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WASHINGTON (7/13/09)--Credit unions providing REAL Solutions, the signature program of the National Credit Union Foundation (NCUF), are offering up to 26 products to serve consumers with low wealth. NCUF’s new baseline survey shows that more than half of REAL Solutions credit unions are offering the 16 most popular products. Nine of the most popular products are lending solutions. The percentage breakdowns are:
* For REAL Solutions credit unions, 91% make used-car loans to borrowers with low credit scores (D and E paper); * About 89% make small loans of $500 or less; * Some 85% offer tiered pricing so that applicants with low credit scores can be approved at risk-based rates; * Small business loans to members with low wealth and low-to-moderate income are made by 67% of the credit unions; * For young adults in the 18-30 age range, 67% of these credit unions design credit cards; * Credit unions that provide or plan to offer payday loan alternatives total 67%; * Roughly 55% provide or plan to structure mortgage programs for low-wealth and first-time homebuyers; * First-time vehicle loans for young adults from ages 18 to 30 are provided by 54%; and * Credit-builder loans to help applicants with thin credit files or no credit history are made by 54%.
Five of the most popular products are transaction services. REAL Solutions credit unions provide:
* Check cashing for members (92%); * Free checking accounts for members (86%); * Money orders for members and non-members (79%); * Checking accounts with debit cards specifically designed for young adults from ages 18-30 (77%); and * International remittances for immigrants to wire money to their families (62% provide or plan to).
Two of the most popular products are savings programs for emerging low-wealth markets:
* REAL Solutions credit unions providing special savings accounts for youth from ages 11 to 17 total 81%; and * About 68% provide or plan to offer comprehensive savings programs, including financial education to help low-wealth members save and build wealth.
NCUF’s survey also measures key criteria for determining REAL Deal credit unions, as defined by the Credit Union National Association and the American Association of Credit Union Leagues. For example:
* A total of 96% of these credit unions collaborate with other organizations to provide outreach; * Some 89% donate money to charitable programs; and * Those that provide financial literacy programs for all types of consumers total 83%.
The full survey report is available on NCUF’s REAL Solutions Impact Center.

CU System briefs (07/10/2009)

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* RIVERSIDE, Calif. (7/13/09)--The Altura Foundation, an educational arm of Altura CU in Riverside, Calif., recently awarded $46,000 in scholarships to 46 Riverside County High School college-bound seniors. The amount was $4,000 more than last year. About 44 were general scholarships and two were memorial scholarships. Since 1993, the credit union has helped more than 250 students receive scholarships. The scholarship program is funded by Altura CU members--$5 from the one-time $12 membership fee goes toward scholarships. Recipients are selected based on academic records, extracurricular activities, financial need and an essay. Altura CU has $889 million in assets ... * BURLINGTON, Vt. (7/13/09)--New England FCU has donated $25,000 to Burlington, Vt.'s Committee on Temporary Shelter (COTS), says the Association of Vermont Credit Unions (Newslines Express July 10). The presentation was made onstage before the Queen City Music Hour at the Flynn Theatre by NEFCU President John Dwyer, right. COTS' Grants Manager Beth Krueger is shown accepting the donation. COTS has provided services and shelter to families with children under age 18 for 25 years. (Photo provided by the Association of Vermont Credit Unions) … * BOULDER, Colo. (7/13/09)--Elevations CU is offering college student loans to help students fill the funding gaps left by federal financial aid, the credit union said. Students enrolled at least half-time in a degree-granting program, and with a qualified co-borrower, are eligible to apply for loans. Students can apply once and secure funding for their entire college career. If approved, students can borrow $1,000 to $30,000 per year, with a $75,000 maximum. Elevations CU, Boulder, Colo., has $898 million in assets ... * BURLINGTON, Mass., and LENEXA, Kan. (7/13/09)--EasCorp's campaign for its DeposZip consumer remote-check deposit service has needed a Bronze Quill award from the Kansas City/International Association of Business Communications (KC/IABC). The award went to EasCorp and its communications firm, MJB Public Relations Group. The Bronze Quill is given for a communications project based on content that demonstrates careful and imaginative planning; a clearly stated purpose; high and consistent editorial and design standards; and significant and measurerable results achieved. The campaign included opinion/editorials and educational articles; print publicity; select print, online and e-mail advertising; and online communications … * MADISON, Wis. (7/13/09)--CUNA Mutual Group has redesigned its
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website to improve search navigation and streamline the information. Changes were made after it received input from its users. The number of pages on the site was reduced to 105 from 2,000. “Customers told us less is more,” said Nancy Fisher, director, CUNA Mutual marketing operations and brand management. “There were too many pages with too much information on them, so we downsized dramatically.” CUNA Mutual also added a Solutions Wizard to help users locate solutions for common issues. More than four million people use the site each year, CUNA Mutual said. (Photo provided by CUNA Mutual Group) ... * CAPITOLA, Calif. (7/13/09)--A Bay FCU employee helped inspire 475 people to register to donate bone marrow during the Be The Match Registry drive the $600 million asset credit union conducted in June. Seventy donors registered in person June 13 at the Capitola branch. Another 405 registered online at www.BeTheMatch.org, the online registry of the National Marrow Donor Program. The credit union's community support team decided to host the registration drive after Amy Ivey, assistant vice president of marketing and development, donated marrow through the program in December 2008. She registered in the program in 2004 and was contacted last fall. After additional testing, Ivey was deemed a perfect match for a 25-year-old man with a prognosis of less than a year to live. He was given an 85% chance of recovery. Local media, including the Santa Cruz Sentinel and a major television state on the coast covered her story, said the credit union …