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CU System briefs (07/16/2014)

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  • WARWICK, R.I. (7/16/14)-- The Credit Union Association of Rhode Island presented a $65,000 check to Special Olympics Rhode Island at the Credit Unions of Rhode Island Charity Golf Tournament July 14 ( Daily CU Scan July 15). The check represents the total amount raised this year, bringing the 17-year total to $714,100. Special Olympics Rhode Island Executive Director Dennis DeJesus commended the league's year-round fundraising efforts and credit unions' support of "the concepts of acceptance, inclusion and respect for those individuals with intellectual disabilities." Navigant CU, Smithfield, with $1.4 billion in assets, had the winning team. From left, Joseph Beretta, Navigant CU President/CEO Gary Furtado, Special Olympics Rhode Island athlete Michael Lucca and John McCarthy (Credit Union Association of Rhode Island Photo) ...
     
  • INDIANAPOLIS (7/16/14)-- The Indiana Credit Union League announced a new award program for credit unions that are achieving excellence in four categories: finance and human resources/training; lending; marketing/business development; and operations and technology. The Best Practice Awards entries should consist of a video or presentation of no more than 3 minutes and a 400-word or less description of the strategy, execution, results and flexibility of the best practice. Credit unions will be judged in three asset sizes: less than $100 million in assets, $100 million to $500 million in assets, and more than $500 million in assets. Entries are due Aug. 11 , and winners will be featured during the Chairman's Awards Banquet at the league's annual convention ...
  • PHILADELPHIA (7/16/14)-- American Heritage FCU, Philadelphia, hosted a recent visit by Tom Ridge, former secretary of the U.S. Department of Homeland Security, for a discussion on credit union security and business issues. Pennsylvania Credit Union Association President/CEO Patrick Conway and Credit Union National Association representatives also met with Pennsylvania's former governor. "This was a great opportunity to reconnect with Governor Ridge, who has always been a great supporter of credit unions," said Bruce Foulke, president/CEO of the $1.4 billion-asset credit union. From left, Richard Gose, CUNA senior vice president of political affairs; Ryan Donovan, CUNA senior vice president of legislative affairs; Ridge; Conway and Foulke (American Heritage FCU Photo) ...

Former Pres. Clinton cites Hope FCU's fight against 'bank deserts'

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JACKSON, Miss. (7/16/14)--Hope FCU's efforts to eradicate "bank deserts" in the Deep South were recently recognized in public remarks by former U.S. President Bill Clinton.
 
Speaking on behalf of the Clinton Global Initiative, the 42nd U.S. president cited Hope FCU's commitment to bring financial services to ZIP codes that are served by two or fewer financial institutions.

"Hope FCU made a commitment two years ago, in 2012, to serve people who were in what they call 'bank deserts' in the Deep South where local banks were closing up or not serving low-income working people," Clinton said. "That is emblematic of what we could be doing everywhere to be creating opportunity at the bottom of the (economic) pyramid."
 

Clinton specifically mentioned how Hope FCU opened branches in Utica, Miss., and on the campus of the University of Arkansas-Pine Bluff.
 
Hope FCU has increased its branch network to 23 from seven locations since the onset of the recession in 2008, according to Bill Bynum, president/CEO of the $187 million-asset Jackson, Miss.-based community development financial institution.
 
"Banks are really leaving these communities," Bynum told News Now . "There's a huge need for the services we provide. We're doing everything we can do to respond to that need."
 
That need is indeed great. Of Mississippi's 533 ZIP codes in 2012, 369 had one bank or fewer, the Corporation for Enterprise Development reported. And about 37% of Hope's new members did not have previous banking relationship, Bynum said.
 
Reaching underserved communities is about more than branches. Mississippi also has great stretches of rural areas, which account for lack of access to financial services. To fill that gap, Bynum and Hope FCU have worked to equip and educate new members on mobile branching.
 
"We think that could be a real way to democratize financial services," Bynum said. "People in rural areas are smart enough to know that a smart phone gives them access to the Internet.

"They can text. They can communicate. They can participate in social media, and not have the cost of a landline or a computer. At the same time, so many of them are outside the banking system. We're excited about the potential to put the power of banking in people's hands," he said.

More than half of the credit union's active mobile-banking members live in high-poverty areas, Bynum told News Now . "It's allowing us to reach a population that is woefully underserved," he added.
 
Bynum said his employees have moved beyond helping members with transactions to become real problem solvers. Clinton mentioned this in his remarks, noting that employees helped members get up to speed on mobile banking.
 
"In addition to banks leaving these communities, we've got payday lenders entering at an epidemic rate, so helping people avoid those debt traps is another challenge we face," Bynum said.
 
Another challenge is raising capital to continue the credit union's outreach efforts. "Most credit unions grow organically, but we're very serious about tackling these bank deserts," Bynum said. He said the credit union is about halfway to its goal of raising $20 million in capital and seeks deposits from other sources, including other credit unions. With the additional funding, the credit union can add 15 additional branches and open new accounts for 30,000 consumers, Bynum said, while making more than $500 million in consumer and business loans.
 
In the meantime, Bynum said it was "fantastic" to receive public recognition from Clinton. "He has been a leader in solving huge problems around the world since he left the White House," Bynum said. "For him to highlight Hope as an example of what's possible in serving people at the bottom of the pyramid serves as a challenge for us to keep pushing forward."

Dakotas hit right note with 'Orchestrating the Goodness'

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BISMARCK, N.D. (7/16/14)--Pop on the radio and you may never hear a catchier tune than the one about credit unions written by attendees of the Credit Union Association of the Dakotas' annual meeting last month.

"Regulations, challenges, changes abound / Better ways to serve members must always be found / By collaborating we'll be orchestrating the goodness / Getting better every day, we'll be orchestrating the goodness," the song goes.  

During a general session at the meeting, credit union professionals transformed into lyricists when they were joined by a pair of Nashville songwriters called The Song Team to create a tune that reflected the meeting's theme: Orchestrating the Goodness.

League President/CEO Robbie Thompson said the musicians asked for suggestions from the audience for lyrics and then blended them into the "Orchestrating the Goodness" song.

"They worked with the audience and tried to show how by cooperating and working together and getting different views they were able to create an original song," Thompson told News Now .

While the musicians initially didn't plan on recording a rendition of the song, attendees enjoyed it so much that many asked if they could have a copy of it after the session.

Eventually, The Song Team created the below YouTube video.

Thirteen CUs to pilot Filene's employer small-dollar loans

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MADISON, Wis. (7/16/14)--Filene Research Institute announced Tuesday that its new small-dollar loan product, which aims to benefit low- and moderate-income workers, will be tested at 13 credit unions and one community bank located throughout the country.

Called the Employer Sponsored Small Dollar Loan, loan amounts range from $300 to $1,500 and are available to workers at their places of business. Loans are based on tenure, rather than the individual's credit score, and the terms last six months to ease the burden on the employee's cash flow, according to Filene.

Loans also aren't reported to credit bureaus.

This product will "create a partnership between employers and credit unions so that we can better support the financial needs of employees, and in turn improve the turnover, tardiness and absenteeism rates for employers since they are often tied to employees with financial stress," said Cynthia Campbell, Filene director of innovation.

The financial institutions participating in the pilot are:
  • Fitzsimmons FCU, Aurora, Colo., with $167 million in assets;
  • CU of the Rockies, Golden, Colo., with $89 million in assets;
  • Denver Community CU, with $264 million in assets;
  • Metrum Community CU, Centennial, Colo., with $57 million in assets;
  • SEFCU, Albany, N.Y., with $2.8 billion in assets;
  • Spring Bank, Bronx, N.Y.;
  • Holy Rosary CU, Kansas City., Mo., with $19 million in assets;
  • Promedica FCU, Toledo, Ohio, with $51 million in assets;
  • Toledo (Ohio) Urban FCU, with $4.6 million in assets;
  • Toledo (Ohio) Metro FCU, with $39 million in assets;
  • Sun FCU, Maumee, Ohio, with $508 million in assets;
  • Commodore Perry FCU, Oak Harbor, Ohio, with $34 million in assets;
  • Cy Fair FCU, Houston, with $199 million in assets; and
  • NorthCountry FCU, South Burlington, Vt., with $447 million in assets.
The product initially was submitted by NorthCountry FCU to Filene's accessible financial services incubator, which is funded by the Ford Foundation.

NorthCountry has already piloted the product and experienced success, prompting the program to be expanded to 14 financial institutions.

CUNA annual report details 'outstanding' year for CUs, says Hampel

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MADISON, Wis. (7/16/14)--In its 2013 annual report, the Credit Union National Association traced its steps of success and the steps the credit union movement is taking toward 100 million memberships.
 
"Last year turned out to be an outstanding one for the credit union movement, as we laid the groundwork to protect our tax exemption, delineated a vision for the future, and worked to reduce the regulatory burden," said Bill Hampel, CUNA interim president/CEO. "This report neatly outlines the efforts that the three-tier system of CUNA, leagues and credit unions took together to realize these results, and build for the future."
 
Advocacy programs continue to be CUNA's strength with the "Don't Tax My Credit Union" campaign to protect the credit union tax status, and the more than 4,000 credit union professionals who attended the annual Governmental Affairs Conference.
 
In 2013, CUNA wrote 50 letters to members of the U.S. Congress, testified seven times before six different committees and subcommittees and filed 60 comment letters to a variety of regulators.
 
CUNA also provided support to states challenged by banking associations and pro-taxation legislative language.
 
New communications vehicles such as The President's Report and In the News were added to enhance CUNA's reputation for quality information regarding credit unions, their members and the financial industry at large. National media outlets such as FOX Business , The Washington Post , USA Today , Politico and The Hill regularly cite CUNA experts and research.
 
In the training and development arena, 382,000 courses and exams were completed through CUNA's online training portal, and more than 9,900 professionals attended on-site CUNA events.

Top priority for CUs must be cybersecurity, advises Council white paper

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WESTBURY, N.Y. (7/16/14)--Unless the goal of protecting sensitive data is paramount to a credit union's operation, it's likely not doing enough, according to a new white paper released Tuesday by the CUNA Technology Council.

The paper discusses the importance of financial institutions making cybersecurity a top priority, while also outlining the value of educating members, protecting their information, communicating effectively should a breach occur and understanding cybersecurity laws and regulations.  

Called "Cybersecurity Preparedness: Taming the Shock and Awe of Big Breaches," it's the first white paper in a series of four scheduled for 2014 dedicated to security.  

"These big security leaks show we need to take cybersecurity preparedness seriously and do more," said Kevin Prince, principal technology strategist for D+H Compushare, a CUNA Strategic Services alliance provider. "You'll never be 100% secure, but you have to manage it as carefully as possible with the appropriate tools."

The paper first calls on Bill Podborny, chief security officer of $8.2 billion-asset Alliant CU in Chicago, to describe "cybersecurity preparedness." Podborny believes to be prepared means identifying vulnerabilities, understanding where attacks may come from, taking steps to lessen or eliminate exposure and being prepared to respond to any situation as quickly as possible.

Authors of the paper illustrate how to make cybersecurity preparedness a core function of the credit union with examples of what credit unions are already doing to keep security strong.

At Michigan Tech Employees FCU, Houghton, Mich., with $60 million in assets, for example, leaders have dedicated resources that work specifically to bolster security, an action recommended by many U.S. regulatory bodies.

"At a certain point it makes sense to separate these departments to ensure security resources don't diminish in times when the IT department is fighting for the same resources," said Justin Store, information technology services director at Michigan Tech Employees FCU.

Finally, to strengthen cybersecurity, Prince suggests credit unions should:
  • Realize what they're doing today likely isn't adequate, and won't be adequate tomorrow, as threats are constantly shifting and changing;
     
  • Conduct regular and thorough cybersecurity risk assessments and document the findings;
     
  • Mitigate risks as much as possible;
     
  • Stay on top of current threats and future trends in cybersecurity; and
     
  • Consider outsourcing to a community cloud arrangement for IT cybersecurity.
To download the white paper, use the link.

Durham museum honors N.C.'s CU history

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DURHAM., N.C. (7/16/14)--At the Durham A-Z exhibit in the Museum of Durham History, every letter tells a story, sometimes a few stories, including the letter C, which stands for ... you guessed it ... credit unions.
 
North Carolina was home to the first credit union in the South--and, of course, there's a story behind that too ( The Durham News July 15). In the early 1900s the farmers in the community of Lowe's Grove were paid just once a year, at harvest time. In need of credit to keep them flush throughout the year, the farmers pooled $29 and partnered with Durham banker and philanthropist John Sprunt Hill in 1916 to open the Lowe's Grove CU.
 
African-Americans also faced challenges in obtaining credit in the Jim Crow South, and credit unions provided an answer in North Carolina. At one point, North Carolina had more African-American-based credit unions than the rest of the United States combined.
 
One of those credit unions was Mount Vernon Baptist Church CU, which continues to serve its 233 members today. Despite having just $191,000 in assets, Mount Vernon CU makes loans to help its members gain access to cars, homes and education. "Their commitment just amazes me," Katie Spencer, the Museum of Durham History's executive director, told the Carolinas Credit Union League ( In the Loop June 19).
 
That credit union tradition of serving minorities lives on today among Durham credit unions, as Latino CU opened in 2000 and grew to 50,000 members and $100 million in assets by 2010. It serves as a model for credit unions serving immigrant populations.
 
Self-Help CU, which opened in 1984 with $77 from a bake sale, also serves as model for other credit unions. Self-Help CU is leader in community development and lending to low-income borrowers. It has provided more than $6.4 billion to 87,000 families, individuals and organizations across the United States.

Demand drives second ERM institute from CUNA

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MADISON, Wis. (7/16/14)--The CUNA Enterprise Risk Management (ERM) Certification Institute, hosted in collaboration with The Rochdale Group Inc., will be held Dec. 8-11 in Las Vegas, the Credit Union National Association announced Tuesday.

"Enterprise risk management continues to be a major area of strategic focus for credit unions," said Todd Spiczenski, CUNA senior vice president of association services. "We've added a second ERM Institute this year to meet the demand for training on the topic. The Rochdale team's approach to risk will have an even greater impact on the future of the movement as we see fewer credit unions turning to risk management as a survival mechanism and more looking to ERM's role in their ongoing growth."
 
Made possible by collaboration, CUNA Enterprise Risk Management Certification Institute leverages the reach of CUNA with the ERM expertise of The Rochdale Group Inc. to provide credit union executives with risk-management knowledge and the tools to incorporate ERM at their credit unions. Through the insights and advice of Rochdale's ERM consultants, attendees leave with an understanding of their own risk appetite, risk beyond investments and how risk management can drive decision-making at their credit union.
 
At this year's May institute, 81 individuals earned their Credit Union Enterprise Risk Management Expert (CUERME) certifications. Attendees of the December institute will also have the opportunity to be officially certified as credit union ERM experts through the CUERME designation.