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CUs topic of L.A. radio show

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LOS ANGELES (7/21/08)--Credit unions were the topic of KNX 1070 News Radio’s “Money 101 with Bob McCormick” last week. The show contrasted the safety of credit unions with that of banks. “Disillusioned bank customers may be turning to credit unions, which have 9 million members in the state of California,” McCormick said in opening the show. Credit unions don’t make subprime loans or risky investments, McCormick noted. He also interviewed Daniel Penrod, an industry analyst with the California Credit Union League. “Credit unions can only build their money through internally generated funds so any project that loses money--is money coming from the membership,” Penrod told McCormick. “They’re much more conservative in what they’re willing to do.” McCormick told viewers they can find a credit union they’re eligible to join, and encouraged them to visit www.findacreditunion.org.

IUSA TodayI CUs a good place for consumer savings

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MADISON, Wis. (7/21/08)--With ongoing economic turmoil and problems with some financial institutions, many people are wondering where the best place is to put their savings. USA TODAY personal finance columnist John Waggoner, mentioned credit unions as a viable option Friday in his column. Waggoner spoke with Bill Hampel, chief economist at the Credit Union National Association (CUNA), before he wrote the column, “Where can you stash your cash,” which dealt with options for consumers trying to safely save in difficult financial times. Often, credit unions will pay higher yields because they are non-profit organizations that don’t pay federal taxes, Waggoner noted. Credit unions’ deposits also are federally insured, he added. In other news, Hampel appeared on FOX News Friday. "Credit unions are very safe and sound," he told the news outlet. "Depositors have nothing to worry about." Loss rates at credit unions also are very low, he added. "You can count on one hand the number of credit unions that will likely fail," he said. To see the video, use the link.
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ICNNI financial advisor touts CUs as alternatives to banks

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WASHINGTON (7/21/08)--CNN’s personal finance editor touted credit unions on her show Friday morning as a good alternative to banks. Gerri Willis, host of “Gerri’s Top Tips” was asked by a man in Florida via e-mail, “Is it possible to find out about credit unions; how safe are they at this time?” Willis replied: “That’s a really great question … Credit unions are a good alternative to banks. They have the same guarantees [as banks]. As long as you have $100,000 or less in an individual account or $250,000 or less in a retirement account, you’re insured. “Plus, credit unions may have slightly better interest rates and rates on CDs, savings accounts and money market accounts,” she added. The Credit Union National Association provided information to assist Willis with her repsonse to the question.

Rhode Island CU considers charter conversion

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CRANSTON, R.I. (7/21/08)--Coastway CU, Cranston, R.I., is considering a charter change to a mutual savings bank, according to a notice on the credit union’s website. “The board of directors believes this conversion would allow Coastway to better meet the current and future needs of our members,” the statement said. “The conversion would also allow us to offer loans to anyone, regardless of whether they have a deposit relationship with Coastway.” Specifically, Coastway said it hopes to offer more member business loans, which would help it generate greater revenues. No director, officer or employee will receive additional compensation as a result of the conversion. The credit union is currently seeking written comments from members on the proposed charter change. Comments must be received before Aug. 20. On Aug. 21, the board will decide on the charter change. Coastway has $302 million in assets and 25,000 members.

Vermont CU partners with businesses to offer income advance loans

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SOUTH BURLINGTON, Vt. (7/21/08)--During a strategic planning session, NorthCountry FCU identified payday lending as a consumer problem it wanted to address, and has developed a product to help--the income advance loan. Bob Morgan, vice present of lending and administration for the $192 million asset, South Burlington, Vt.-based credit union, researched payday loan alternatives and eventually chose a model created by the Ohio Credit Union League, according to the Association of Vermont Credit Unions (Newslines Express July 18). “In the credit union industry, they have the most experience and longest history with payday loan alternatives,” Morgan said. “Their help was instrumental in getting our program off the ground.” Morgan needed buy-in from a local employer to launch the program. He found it with Justin Worthley, general manager at Rhino Foods, which for years had allowed employees to take advances on their pay for short-term credit needs. Because the program proved too cumbersome to manage, it was eventually discontinued. Worthley, however, saw a need for continued quick access to cash for his low- and moderately-paid employees. He contacted NorthCountry, and the income advance program was created and offered to Rhino Foods employees as a benefit. Since its inception, Worthley says employees have used the loan program for emergency expenses including car repairs, home repairs, and international travel to attend a funeral. “In our current economy, trying to provide cost effective and meaningful benefits to low- and moderately-paid employees is becoming increasingly important for employers when recruiting new people,” said Morgan. “The income advance program is one way to meet that goal.” In July, the fixed annual percentage rate for the loan was 16.99%--below the online lenders’ rates of over 400%--for a term of up to six months. Borrowers repay their loans through an automatic payroll deduction each pay period. An employee is limited to one loan at a time. The borrower pays no fee for the service. Although the income advance loans are riskier than some other types of loans, the delinquency rate so far has been only 0.5%--lower than NorthCountry’s average delinquency rate for all loans, according to the association. “This program has given us a way to help our employees build financial resources,” Worthley said. “Instead of ending an employee’s payroll deduction when the loan is repaid, we tell people ‘We’ll shut it off when you tell us to.’ Additional payroll deductions are set aside in a savings account. People have gone from a cash crunch situation to building up savings for things like a home or an upgraded vehicle.” “For many, it is a safety net for week-to-week needs,” Lorri Miller, human resources generalist at Rhino Foods said. “Our folks are very appreciative of this benefit and without fail they all let me know how much this means to them and how much worry and stress we are removing from their lives. It is extremely satisfying to help so many of our employees with income advance.” Employers pay an annual fee to participate in the credit union’s income advance program. In return, their staff members are automatically approved for immediate cash advances up to $1,500. Employees also receive counseling about how to avoid future financial emergencies. In addition to Rhino Foods, two other local employers have signed on for the service. Other local companies have contacted NorthCountry to discuss adding the program to their benefit plans. NorthCountry offers the program, which has an average loan balance of about $650, as a community service.

CUs leagues continue to reassure members their money is safe

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MADISON, Wis. (7/21/08)--Credit unions and state credit union leagues nationwide continue to work with their members and local media to get the word out that their deposits at credit unions are safe. In addition to the efforts reported in News Now last week:
* Ohio Credit Union League President Paul Mercer, along with Patrick Harris, league director of media relations, and a group of Ohio credit union CEOs, met face-to-face with the Ohio bureau of the Associated Press on Friday to talk about credit unions.

Tim Boellner, CEO, AurGroup Financial CU, Fairfield; Bill Burke, CEO, Day Air CU, Kettering; Doug Fecher, CEO, Wright-Patt CU, Fairborn; and Greg Kidwell, CEO, Members First CU, Columbus, were present at the meeting, according to the league.

“We have a distinct story to tell, and part of that story is that we are one of the best kept secrets in the country,” Fecher said. “The mission and philosophy behind credit unions is aligned with assisting people when times are difficult, and that is why we continue to succeed.”

“We are very good at what we do, and in particular in Ohio, where the economy has been sluggish for some time, credit unions have adapted and continue to serve their members,” Mercer added. * KMOX Radio, St. Louis, Mo., gave Peggy Nalls, senior vice president of the legislative affairs at the Missouri Credit Union Association, the opportunity to talk about share insurance on a radio program. The league also has provided information in its e-mail newsletter, CourierNet. * The Credit Union Association of Oregon created an online resource area for its credit unions, along with National Credit Union Administration (NCUA) resources and other materials, Laura Wieking, director of communications, told News Now.

“We also offered two training sessions on July 15 on share insurance, which were well-attended,” she said. * The Texas Credit Union League sent a statewide press release, subject material and talking points to credit unions. It also sent a special release to chapters, updated its website for credit unions and press, and created short essay pieces on specific topics related to the safety of credit union deposits in its e-mail newsletter, Rick Grady, league vice president, marketing and communications, told News Now. * The Kansas Credit Union Association submitted a press release to Kansas media and released talking points by the Credit Union National Association to credit unions, said Ashley Bridgeman, association communications specialist. * The Washington Credit Union League put together talking points, drafted a sample newsletter article discussing the strength of Washington’s credit unions, and is developing a frequently asked questions page for its website, according to David Bennett, league director of public relations. He also noted that he would be doing outreach to the largest markets in the state and creating a status report that outlines basic aspects of the state’s and nation’s credit unions compared with banks. * Cliff Rosenthal, president/CEO of the National Federation of Community Development Credit Unions, sent a letter to the editor after AM New York, a daily newspaper in Manhattan, published a front-page story about the bank crisis July 16 without mentioning credit unions. Rosenthal sent the newspaper a letter, “Federal insurance protects banks, credit unions,” which was published the next day. In it, he assured readers that the National Credit Union Share Insurance Fund is backed by full faith and credit of the U.S. government. * Mid-Atlantic FCU, Germantown, Md., also published a press release explaining how the credit union is reaching out to current and potential members in Montgomery County, offering them a safe place to put their money and receive financial counseling. * The Wisconsin Credit Union League has provided a list of resources for its credit unions, including talking points, links to press releases about the safety of credit unions, an insured funds brochure, and other items from the NCUA.

CU System briefs (07/18/2008)

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* WEST LAFAYETTE, Ind. (7/21/08)-- Purdue Employees FCU recently partnered with Purdue Athletes Life Success Program (PALS) to provide financial literacy content and activities during a four-day camp this year. “Economics has become the foundation of our entire culture, said Bill Harper, PALS director. “Kids typically are not exposed to the complications of handling money or differentiating between wants and needs. This is an opportunity to introduce kids to the reality of life in an informal setting.” Campers each received a $100 paycheck, which they had to deposit into the credit union. They used a checkbook to balance their accounts, and then moved to a computer-based program in which they had to make financial decisions based on a pre-set career and salary. They chose to purchase insurance, homes, vehicles and meals at different price levels, and had to pay off debts. (Left) PALS counselor Jill Freeland explains the importance of auto insurance to a child during the life skills game. (Photo provided by Purdue Employees FCU) ... * PORTSMOUTH, N.H. (7/21/08)--Northeast Credit Union (NECU) announced its sponsorship of the BizKid$ television series airing on New Hampshire Public Television. The show is underwritten by America’s Credit Unions, and aims to teach youth about money. Additional sponsorship is provided by the National Credit Union Foundation and the Washington Credit Union League. NECU has more than $550 million in assets ... *
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FARMINGVILLE, N.Y. (7/21/08)--Teachers FCU (TFCU), Farmingville, N.Y., sponsored the “Team TFCU Habitat Build” to support one of Habitat for Humanity of Suffolk’s home building projects. TFCU employees from its 17 branches raised $2,500 to defray the cost of building materials. Twenty volunteers from five TFCU locations volunteered to help build the home. The home will go to Denise Nicotri, a single mother with two sets of twins, Josh and Jonathan, 18, and Jared and Jordan, 13. TFCU has more than $2.2 billion in assets. (Photo provided by Teachers FCU) ... * BILOXI, Miss. (7/21/08)--Keesler FCU, Biloxi, Miss., earned a five-star superior rating from Bauer Financial Inc., Coral Gables, Fla., a credit union rating and research firm. The rating is based on the overall financial picture of the institution and indicates Keesler’s strength, the credit union said in a release. Keesler has $1.6 billion in assets ...