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AVCU CUs have right to use banking in ads

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COLCHESTER, Vt. (7/19/12)--The Association of Vermont Credit Unions (AVCU) is encouraging  the state credit union regulator to re-evaluate its interpretation of the word "banking" after the regulator ordered a state-chartered credit union to "cease and desist" from using the words "bank," "banking," and similar words in its marketing, communications, and advertising.

The situation came to light when Montpelier-basedVermont State Employees CU filed an appeal Monday with the state's Department of Financial Regulation (DFR) over DFR's June 18 notice of the cease-and-desist order.  It ordered the credit union to stop using "bank," "banking," "banking cooperative," and similar words in its materials. (See "Vermont CU says it's targeted in bank battle" in Wednesday's News Now.)

"Most people would agree that the term 'banking,' and variations thereof, is a common and widespread nomenclature used by most everyone to describe the generic handling of their financial matters with some type of provider of financial services," said Joe Bergeron, AVCU president, in a statement.

Although the matter is currently between the credit union and the regulator, "we support the right of any credit union to use the term," he told News Now, "just like consumers use it and the media use it."  He noted the real question should be, "Is the credit union really deceiving people into thinking it is a bank?" he said, adding it isn't.

"Consumers use the term to describe what they're doing, not particular to any type of service provider," Bergeron said in a statement later e-mailed to News Now. "They commonly say, 'I do my banking at' at ABC bank, XYZ credit union, or whatever other provider they so choose. In fact, the media itself accepts and fosters such use in hundreds of articles we all see throughout the year on advising consumers on 'where to do their banking,' or where to 'get the best deal on banking,'" he added.

"The intent of the Vermont law is to prevent persons and entities who are clearly not regulated financial institutions of any sort, from deceiving consumers into believing they are something they are not by masquerading as some form of bank," he said.

"VSECU, and every other Vermont credit union to our knowledge, is proud to be a cooperative credit union and has never tried to convince consumers it is something other than a cooperative credit union. Everyone understands that use of the word 'banking' is in reference to a consumer's action, not the form of the entity," he added.

"Restricting credit unions from using the same word their members use in reference to their credit union transactions won't prevent consumers and the media from still using such words, he said, adding, "It does, however, serve to disadvantage Vermont's local cooperative state-chartered credit unions compared to federal credit unions and all other financial service providers."

"We encourage [DFR] to re-evaluate its interpretation to correctly recognize the public's generic use of a term denoting a commonplace activity, while supporting the regulator's efforts to insure that consumers are not misled by any entity into believing it is something that it's not."

DFR regulates both state-chartered banks and credit unions.

Out of curiosity, News Now checked to see who else, besides financial institutions, uses a form of the word "bank" in their marketing. It found references to food banks, blood banks, data banks, time banks, flower banks, river banks, eye banks, left and right banks, outer banks, and health record banks, not to mention retailer Christopher and Banks, supermodel Tyra Banks, writer Russell Banks, and actress Elizabeth Banks.

Membership hike leads to job creation at CU

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PLYMOUTH, Mich. (7/19/12)--Community Financial Members FCU in Plymouth, Mich., has hired 21 new team members since January.

As part of its inaugural Community Matters Annual Community Report, the $478 million asset Community Financial reported that 2011 was a record year regarding membership, which grew by more than 10%, and for its overall member satisfaction rankings (PR NewsWire July 17).

"We are thrilled to be growing, because not only do we continue to provide great service and sound financial advice to our members, but we also have the opportunities to hire more people and give back to the communities we serve," said Bill Lawton, president/CEO of Community Financial.

Through the first quarter of 2012, credit unions nationwide combined for a record 92.5 million members, according to a recent National Credit Union Administration report.

Back-to-school costs rise CUs are helping

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MADISON, Wis. (7/19/12)--With back-to-school costs for students on the rise, several credit unions and credit union organizations nationwide are pitching in with schools supplies or programs to help defray the costs.

About 46% of consumers surveyed said that they planned to spend more this year than they did last year, according to a survey by Pricegrabber (LoneStar Leaguer July 17). Also, 63% said they were budgeting up to $500 for school-related gear--up from 48% last year, while 20% said they had between $500 and $1,000 set aside for back-to-school purchases.

Allocations for electronics are a big reason the back-to-school budget is higher, the survey indicated. The Pricegrabber survey showed 40% of respondents said they plan to buy new laptops or tablet computers for their kids; 28% of those consumers said they were looking to obtain some sort of smartphone, and 10% were considering the purchase of a new desktop computer.

Some examples of credit unions helping members are:

  • FirstLight FCU, a $760 million asset El Paso, Texas-based credit union, offers a Back-2-School credit card promotion (LoneStar Leaguer July 17). "If members use their FirstLight FCU credit card during July 1 to Aug. 31 they get a 2% drop on their annual percentage rate or double their reward points for back-to-school purchases that fall under certain merchant codes (including school supplies, books, electronics, clothing)," said  Alex Yu, marketing specialist at the El Paso-based credit union. Yu said the credit union has offered the Back-2-School credit card promotion for the past three years and it has been well-received.
  • The 100% for Kids Utah Credit Union Education Foundation awarded Beehive Elementary in Salt Lake City, Utah, with a grant to purchase books for the entire school last year. Janet Christensen, a teacher, applied for and received the grant.  She started "Read the Book, See the Movie" at Beehive at the beginning of the school year, promising the students that after they finished reading the book, they could have an outdoor movie party with their families. More than 30 students and their families showed up for the event, featuring the movie, "The City of Ember" presented on a giant, outdoor, inflatable screen on the school's lawn. Liz White, 100% for Kids Foundation director, said the foundation board was impressed with the creative idea. "It surprises me that more schools don't do something like this. There are so many books being made into movies, it's a great way to make reading fun for kids," White said.
  • Apple FCU, a $1.35 billion asset credit union base in Fairfax, Va., earlier this month launched its annual backpack and school supply drive benefiting needy kids (BusinessWire July 2). The credit union is encouraging the public to drop off backpacks and cash donations at the nearest Apple branch. For the first time, Apple said it will match up to $5,000 made in contributions.
  • Ouachita Valley FCU, a $141 million asset credit union based in West Monroe, La., this month began its eighth annual Sunny School Supply drive to gather school supplies for needy students (thenewssstar.com July 18). The credit union received more than 350 applications for school supplies and is asking the community to help it raise more than $8,000 to fulfill those applications.
Credit Union Marketing Resources' Back to School Express Loan Campaign at CU SuperMarket" is a one-stop, cost-efficient way to reach a credit union's members, said the Texas Credit Union League (LoneStar Leaguer July 17). Marketing materials available include: postcards, statement inserts, lobby posters, Web banners, T-shirts and other items. Credit unions can use the copy already written or supply their own. Credit Union Marketing Resources also will customize all marketing materials with a credit union's logo and contact information.

Illinois wraps up second year of enhanced FICEP program

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NAPERVILLE, Ill. (7/19/12)--Forty representatives from 19 Illinois credit unions are on their way to becoming Certified Credit Union Financial Counselors (CCUFC) after completing the final webinar of the REAL Solutions Enhanced Financial Counseling Certification Program (FICEP) Tuesday.

The final CCUFC designation will be awarded by the Credit Union National Association (CUNA) upon successful passage of two in-person proctored exams--the second of which took place last month.

In bringing back FiCEP for the second year, the Illinois Credit Union Foundation agreed to cover the cost of the REAL Solutions enhancement, which had been shared among participants last year. The only cost to Illinois credit unions this year was the purchase of the FiCEP books and exams from CUNA. ICUF awarded scholarships to help offset participant costs for the program.

Exams were also expanded to new testing sites for 2012, including Chicago, Danville, Gurnee, Moline, Rockford and St. Louis. Last year, Naperville was the only testing site.

As CUNA's financial counseling certification self-study program, FiCEP provides credit union staff with the knowledge and insight to help members build a stronger financial future. FiCEP is designed for credit union staff members who work in the financial counseling, collections and loan departments, or others committed to helping members gain control of their financial futures. 

Modeled after the CUNA Certified Financial Counselor Schools, FiCEP includes two parts of four learning modules each. When participants successfully complete the proctored exams for both parts (eight total modules), they become a CCUFC.

The 2012 Illinois program, which began Feb. 21, included 10 webinars--one per module, plus an orientation session, and a session dedicated to implementing financial counseling at participating credit unions; the two proctored exams, and one in-person meeting.

Speaker CUs no longer a place but an app

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GDAŃSK, Poland--The future of banking may not be a physical presence, but an "app" that makes life's processes easier, author Brett King told a World Credit Union Conference audience Wednesday.

Click to view larger imageThis is an exciting time for credit unions--but a terrifying time for credit union executives, Brett King told a World Credit Union Conference audience in Gdańsk, Poland.
For many that future is now, and credit unions not prepared for the transformation already engulfing the financial services industry will not have much of a future themselves, King said. "This is an incredibly exciting time for credit unions," said King, author of the forthcoming book Bank 3.0 and the closing speaker for the conference, presented by World Council of Credit Unions in Gdańsk, Poland. "But it is a terrifying time for credit union executives."

Technology has brought a dramatic shift to not only to how financial services are delivered, but also to the capabilities and preferences of future generations of members. For these "digital natives," technology is not new--it is all they have known. It is up to credit unions to meet the nature and needs of those consumers or lose them to the competition, King said.

"The perceptions of what credit unions are in the world will change over the next 10 years," King said. "How will you build a great journey for your members? That's the trick."

Through Internet access and especially smartphone technology, credit union business has become something members do at a time and place that suits their needs, and those needs rarely include a visit to a branch. In fact, smartphone technology has taken the place of other transaction devices, such as debit cards, due to its capability to complete transactions with the flick of an "app" and display account balance information in real time.

Audience members learned that credit unions must redefine themselves as "app" providers.
"The iPhone has become a proxy for the debit card," King said. "It's the debit card of the future." He cited the Kenyan cellphone-based transaction company M-PESA ("pesa" is Swahili for "money") as the world's fastest growing "bank," based on its widespread use and growing market penetration. Currently, 20% of Kenya's population of 40 million have financial institution accounts, while 50% have M-PESA relationships that enable them to transfer cash, pay bills and perform other basic financial services.

Kenya's figures roughly translate to those of the entire world, King said. Sixty percent of the global population are unbanked, but 85% have cellphones. He predicted that by 2017, the entire population will have smartphones and most will use them for financial transaction services, especially Generation Y members.

"By 2020, about half of your credit union member population will be Gen Y," he explained. "They will be mobile-first, and that will be their preferred way to do business."

The changing reality will spell the end to many credit union branches, said King. "If you think the branch is the place that the magic happens, where you define your relationship with your members, then you are in trouble," he added.

Generation Y members are mobile-first, which will change the way credit unions do business, King said. (Photos provided by World Council of Credit Unions.)
The best option for credit unions is to redefine themselves as providers of "apps" that enable members to gain crucial information when and where they need it. Such thinking will close the gap that is developing between credit unions and their members, and open the door for a new generation of digital natives who may even sing credit unions' praises through social media.

"It is all about the context in which you operate," said King. "Financial services need to be part of the journey, and you need to become embedded in the lives of your members."

King went into even greater depth during Wednesday's "Bacon, Eggs & Business Experts," one of the conference's two separate-fee breakfast sessions that started the day. In between, breakout session audiences looked at increasing regulatory reporting requirements, studied lessons in credit union lobbying and learned to cultivate social responsibility as part of sustainability.

The conference ended Wednesday.

WOCCU welcomes new members

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GDANSK, Poland (7/19/12)--One new credit union trade group and one newly revived one have joined the World Council of Credit Unions (WOCCU). The two new members and four organizations that have joined WOCCU since July 2011 were announced Monday at WOCCU's 2012 annual general meeting, held in conjunction with the World Credit Union Conference this week in Gdańsk, Poland.

Federación Nacional de Cooperativas de Ahorro y Crédito Financieras (FECOLFIN), which represents Colombia's largest credit unions, joined WOCCU as a direct member. FECOLFIN was chartered in March and may be the world's newest credit union association, said WOCCU. Part of the group's growth strategy includes membership in WOCCU. Jaime Chavez, the trade group's CEO, was present at the meeting to accept the WOCCU flag denoting its membership.

The Liberian Credit Union National Association (LCUNA) joined WOCCU as an affiliate member. Liberia's credit unions have existed for a while, but political conditions within the country had rendered the credit unions and their trade association inactive. With support from the Liberian government and its central bank, the country's credit unions and LCUNA are once again functional. However, no LCUNA representatives were able to attend the meeting.

Other new members approved since the 2011 annual general meeting and present at this year's meeting included the Central Association of Savings and Credit Associations (CASCA), which represents Moldova's credit unions as a direct WOCCU member. CASCA Executive Director Efim Lupanciuc accepted the WOCCU flag.

New associate members honored included Credit Union Direct, which administrates an auto lending network in the U.S.; Credit Union Shared Services Cooperative Ltd. (CUSSCO), a credit union service organization owned by Capital CU Ltd. and Scotwest CU, both located in Scotland, U.K.; and Cooperativa Médica del Valle, a cooperatively owned financial holding company based in Colombia. Credit Union Direct's Jerry Neeman and CUSSCO's Marlene Shiels were on hand to accept the WOCCU flags denoting their memberships.

The World Credit Union Conference ended Wednesday.

World Council of Credit Unions (WOCCU) Director Manfred Dasenbrock (left) presents Jaime Chavez, who represents an association of Colombia's largest credit unions, with a WOCCU flag signifying membership at the World Credit Union Conference this week in Gdańsk, Poland.  Grzegorz Bierecki (left), World Council of Credit Unions first vice chair, welcomes Efim Lupanciuc and CASCA into membership.
Former World Council of Credit Unions (WOCCU) Chair Barry Jolette (right) presents CU Direct's Jerry Neeman with a WOCCU flag.  

Louise Petschler (left), World Council of Credit Unions (WOCCU) secretary, welcomes Credit Union Shared Services Cooperative Ltd.'s Marlene Shiels, a former WOCCU director, into membership. (Photos provided by the World Council of Credit Unions)

Eagle One FCU SERVCO FCU open joint branch

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PHILADELPHIA (7/19/12)--Eagle One FCU and SERVCO FCU celebrated the opening of a joint branch in Philadelphia on Tuesday.

Eagle One FCU CEO John King and SERVCO FCU CEO Joni Brown stand outside their newly opened joint branch office in the Rhawnhurst section of Philadelphia. (Photo provided by Pennsylvania Credit Union Association)
The joint branch is the first branch for $3 million SERVCO FCU, in addition to its main office in Bensalem, Pa. SERVCO originally served employees of the old Gulf Oil Corp., and now serves a varied membership base in the Philadelphia area, according to the Pennsylvania Credit Union Association (Life is a Highway July 18)

The branch is the fifth for $45 million Eagle One, which serves postal employees in the Philadelphia District and the communities of Fishtown in Philadelphia and Claymont, Del.

The new branch office has three teller windows and back offices for administrative staff and loan officers. The location in northeast Philadelphia will enable Eagle One to serve the large number of members who live in that area. In return, SERVCO will share the expenses of the office with Eagle One, thereby reducing the burden of operating the branch independently.

"We believe that this partnership will serve as an example for other credit unions to follow," said John F. King, Eagle One FCU CEO. "We have always held true to the idea of People Helping People."

"This is a great day for SERVCO FCU and our members," said Joni Brown, CEO/manager of SERVCO FCU. "Our first branch office will provide us the opportunity to serve our members better, and in a convenient location. We value our partnership with Eagle One. This could not have happened without their cooperation. We look forward to a long and mutually beneficial relationship."

CU System briefs (07/18/2012)

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  • PHILLIPSBURG, N.J. (7/19/12)--A former teller at Phillipsburg, N.J.-based Baker FCU has been charged with stealing more than $73,000 from the accounts of several elderly members over five years. Lisa Frace, 32, was charged with seven counts of thefts, 35 counts of forgery and 35 counts of uttering a forged document. The thefts occurred from 2007 through spring 2012 and were discovered when a member questioned an unauthorized withdrawal from her savings account and discovered more funds missing (The Morning Call July 18). During that period, said police, Frace's teller drawer allegedly was about $4,000 short and she allegedly made 75 withdrawals from the credit union, forging signatures on withdrawal slips. Also, she allegedly signed members up for online banking, cutting them off from mailed account information …
  • ALBANY, N.Y. (7/19/12)--AmeriCU CU, a $1 billion asset credit union based in Rome, N.Y., received the 2012 Ralph W. Hillman Marketing Award from Universal Sharing Network Inc. (UsNet). The award recognizes a participating UsNet credit union for exemplifying the spirit and enthusiasm exhibited by the late Hillman, a former chairman and board member of UsNet, in his support of the shared branching network. AmeriCU CU last year introduced a revised mobile application for the iPhone and Android, which integrates with smartphones' global positioning system to locate the closest CU Service Center. From left: Marc Inger, chief operating officer at UsNet presents the award to AmeriCU CU Board Chairman Ann S. Tyler. (Photo provided by Universal Sharing Network Inc.) …
  • ALEXANDRIA, Va. (7/19/12)--Charlotte H. Cash has been named as president/CEO of the CommonWealth One FCU, announced its board of directors. The appointment will be effective on Monday. Cash has been with the credit union for 27 years, serving as vice president, retail sales and marketing, for the past 12 years. She succeeds John Blair, who retires on Friday. Blair has served as president/CEO of the Alexandria, Va.-based, $300 million asset credit union for 18 years …
  • CARSON CITY, Nev. (7/19/12)--For the second consecutive year, Greater Nevada CU (GNCU) was named an Ace Award winner at the Reno-Tahoe American Marketing Association's annual awards ceremony. GNCU's "Embarrassing Care Syndrome" TV commercial was named "Best in Video." "The Embarrassing Care Syndrome kept everyone at the credit union focused on promoting our vehicle loans and helping members get the financing they need," said GNCU Vice President of Lending Patty Lewis. "Plus the concept of 'curing' people of their inefficient and unreliable vehicles was fun to play on." The ad centered on a GNCU "doctor" offering a cure for people embarrassed of driving clunkers, as well as people adopting disguises so they are not recognized in their car. The campaign increased vehicle loans to $4.1 million in November 2011, up from $1.58 million in November 2010. (Photo provided by Greater Nevada CU) …
  • BISMARCK, N.D. (7/19/12)--The Credit Union Association of the Dakotas (CUAD) continued its "CU on the Road" tour at Red River Valley Fair last weekend in Fargo, N.D. The tour is part of an awareness campaign CUAD is conducting across the state. Roughly 1,417 people stopped by its booth. Visitors were from Fargo and as far away as Canada, North Carolina and Hawaii. CUAD's Robbie Thompson and Kristie Heit were on site with the CU on the Road vehicle filled with balloons. Visitors guessed the number of balloons (163) and four guessed the correct amount. One of them won the $100 grand prize, with three others receiving $50 prizes. Heit noted the CUAD staff "dispelled a lot of myths, including one credit union member who had a savings account at a credit union for a very long time but had no idea he could get a mortgage there." Many visitors were unaware that credit unions offer  mortgage loans. They also dispelled the notion that credit unions are hard to join. (Photo provided by the Credit Union Association of the Dakotas) …