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CU System briefs (07/21/2009)

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* PASCAGOULA, Miss. (7/22/09)--Two Pascagoula, Miss.-based credit unions plan to merge, pending approval from the Mississippi State Banking Department and the National Credit Union Administration. The $200 million asset Navigator CU and the $3 million asset Jackson County CU (JCCU) announced that JCCU's members overwhelming approved the merger in a meeting July 14. Navigator will be the surviving credit union, serving JCCU's 700 members at all locations, including continued service at JCCU's branch. All JCCU employees have accepted positions at Navigator (The Sun Herald July 21) … * SYRACUSE, N.Y. (7/22/09)--Empower FCU, a $714 million asset credit union based in Syracuse, has acquired Telco FCU, a $22.8 million asset credit union in Elmira, N.Y. Telco will change its name to Empower. The deal was completed July 17, according to Datamonitor's Financial Deals Tracker (July 20) …

Economy dominates Michigan league convention sessions

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TRAVERSE CITY, Mich. (7/22/09)--The economy dominated several sessions during the Michigan Credit Union League's Annual Convention and Exposition last week in Traverse City as Michigan's credit unions work with members affected by manufacturing cutbacks. Michigan State University Economics Prof. Charles Ballard explained an "economic transformation," comparing cyclical events such as a few years of a downward trends to a decade of losing jobs, which means something bigger is in play (Michigan Monitor July 20). "Manufacturing has been shrinking as a percentage of our economy for at least 50, maybe 60 years, so we really have been slow to adjust to those changes," he said. "I think we can stabilize the manufacturing portion of our economy, but it's never going to regain the kind of prominence it had in the 1950s, so we're going to have to find higher-tech, higher-skill ways of making a living." His suggestions for stabilizing the economy include a progressive income tax and the reduction or elimination of the Michigan Business Tax. MCUL President/CEO David Adams discussed strategies the league and credit unions will need to develop for the near future, as the economic downturn has lawmakers turning to increased regulations to prevent another crisis. "We need to keep trying to find alignment with public policy priorities to see how we can do even more," Adams said. "Right now there is a very pro-consumer sentiment, but we don't want too much regulation or unnecessary regulation," he said. He added that the league is "in the game to strike a good balance so [credit unions] can be as helpful as they can for the consumer on issues like foreclosure prevention and reigning in bad pricing practices in the broader financial services industry, while at the same time making sure they're able to operate freely and help our members and communities." Global strategist Mike Williams spoke about the opportunities for investment that the economic downturn presents. "What we do usually is we get too greedy and don't understand risk when we should," Williams said. "When things are really good is when they're the most risky. When things are really horrible, like right now, or the early 90s, or the early 80s, the risk is actually the smallest. Whenever we have perceived extremely difficult economic times, they have actually been the seeds of something great to come," he said.

Get em young says CU liaison in IFree PressI

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DETROIT (7/22/09)--Credit Union National Association's (CUNA) preschoolers money management program, Thrive by 5, is listed among the resource websites for an article addressing teaching young children about money in the Detroit Free Press (July 20). The article also features the National Endowment for Financial Education's website, and interviews Erica Tobe, program leader for youth financial education at Michigan State University's Extension Service. Tobe is the extension's liaison to the credit union movement. She works closely with the Michigan Credit Union League and Michigan credit unions. In the article Tobe noted children ages 4 and 5 can be taught to recognize coins. Financial education is critical, she said. Children can see their money grow by having piggy banks at home, and opening savings accounts when they're older. "Shop with your child for banks or credit unions that offer the best deals. Some credit unions, in particular, offer giveaways and teaching tools for young people," Tobe said. She also noted that by budgeting, youngsters "learn that money doesn't grow on trees." To read the full article, use the link.

State legislators favor CUs on dual charter interchange

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PHILADELPHIA (7/22/09)--The National Conference of State Legislatures (NCSL) showed its backing for credit unions' position on dual chartering and withdrew resolutions that favored merchants' interchange fee positions in separate actions Tuesday during its annual legislative conference in Philadelphia. NCSL's Standing Committee on Communications, Financial Services and Interstate Commerce accepted the withdrawal of resolutions that sought government limits on interchange fees, a position pushed by the merchants. The resolutions had been scheduled for consideration. The committee's action is a win for credit unions and effectively takes the interchange issue off the table at NCSL, at least for the foreseeable future. The committee also renewed its credit union dual chartering policy, which reaffirms the importance of state-chartered credit unions in the nation's financial system and state governments' support of the private share insurance option. The dual chartering policy was accepted by a unanimous voice vote of the committee representing 25 states, said Chris Johnson, vice president of state governmental affairs at the Credit Union National Association (CUNA). The policy, which has been in effect the past six years, will continue another three years, he said. "The fact that the committee has readopted this policy is a testament to the good work that credit unions nationwide do each and every day," he told News Now. "The state credit unon leagues and individual credit union members keep state legislators well apprised of the significant benefits of credit union membership, and the committee's readoption of the dual charting policy is an overwhelming acknowledgement of how highly the legislators value credit unions' service to their members." Lynn Coard, CUNA's director of state advocacy, attended the conference for the first time and helped staff CUNA's booth at the conference. "I was so thoroughly impressed with the good will that credit unions have generated through their work. Hundreds of legislators stopped by to thank credit unions for the good works they do in their communities," Coard said. NCSL studies issues of importance to states. It prepares reports that legislatures can consider in their states and prepares policy statements intended to guide state legislatures in adopting laws and lobbying Congress on behalf of the states.

California CUs monitoring new state budget

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SACRAMENTO, Calif. (7/22/09)--Calif. Gov. Arnold Schwarzenegger and state lawmakers agreed Monday to balance the state’s $26 billion deficit by making cuts throughout the state government. The California Credit Union League and the state's credit unions are keeping tabs on the situation. Details about the budget have not been released. The budget means the state will not issue more IOUs, or registered warrants, which will affect more than 90 credit unions in the state that currently accept the IOUs. The California league is closely monitoring the situation as details emerge. The budget document is still being written, Melissa Ameluxen, California league director of state government affairs, told News Now. Monday’s budget agreement also relies on $1.3 billion from monthly three-day furloughs for state workers (The Sacramento Bee July 21). “Credit unions with members that are state employees have been working to assist those affected by furloughs and IOUs as best they can,” Tina Ramos-Ingold, California league public affairs coordinator, told News Now.

Entries sought for Excellence in Lending awards

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MADISON, Wis. (7/22/09)--The 10th annual Excellence in Lending Awards, which recognize outstanding lending results and practices by credit unions, are accepting entries. The deadline for submitting applications is Aug. 7. CUNA Mutual Group and the CUNA Lending Council established the Excellence in Lending Awards in 2000. The awards identify and share examples of lending excellence within the credit union movement by recognizing individual credit unions for their ability to serve members while sustaining sound financial performance. Credit unions demonstrating an ability to meet their members’ needs through innovation are award candidates. Credit unions may submit entries for the 2009 awards in four categories:
* Consumer Lending Excellence Award--assets under $250 million, and assets greater than $250 million; * Mortgage Lending Excellence Award--assets under $250 million, and assets greater than $250 million; * Low/Modest Means Excellence Award--any asset level; and * Business Lending Excellence Award--any asset level.
The Excellence in Lending Awards will be presented at the 15th Annual CUNA Lending Council Conference Nov. 1-4 in San Diego. Airfare, hotel and conference registration fees for one representative from each winning credit union are included with the award. For more information, use the link.

Ex-Central Valley FCU CEO charged in 1M embezzlement

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WHEELING, W.Va. (7/22/09)--A former credit union CEO was arrested Tuesday on federal charges of embezzlement from a West Virginia-based credit union. Bernie D. Metz, 56, former CEO of the now-defunct Wheeling, W.Va.-based Center Valley FCU, is accused of embezzling more than $1 million from the credit union, said U.S. Attorney Sharon L. Potter (WTOV9.com July 21). Metz's residence, three bank accounts and six vehicles were seized by authorities in an ongoing investigation into the failure of the credit union. Metz allegedly misappropriated money from Center Valley and diverted the embezzled funds to benefit herself, her husband, her children and companies that she and her husband controlled, according to information filed in the criminal complaint. Metz was released on bond, pending further court proceedings after appearing Tuesday before Magistrate Judge James E. Seibert. Charges in the criminal complaint carry a maximum penalty of 30 years in prison and a fine of $1 million.

Fire damage to Visions FCU roof is minimal

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JOHNSON CITY, N.Y. (7/22/09)--A weekend fire at a Visions FCU branch under construction caused minimal damage and will not affect the branch’s opening date, the credit union said. “[The fire] started on the roof over the weekend,” Jayne Searles, Visions associate vice president of marketing, told News Now. “It put no damper on the branch’s progress and we’re right on schedule.” The branch, JC Pavilion in Johnson City, N.Y., is scheduled to open in August. The cause of the fire is unknown, Searles said. Visions FCU, based in Endicott, N.Y., has $2.158 billion in assets.

Mass. CUs hit by economy but still maintain capital

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WORCESTER, Mass. (7/22/09)--Massachusetts' credit unions have been largely immune from the financial industry's turmoil. Although assessments to shore up the corporate credit union system and the National Credit Union Share Insurance Fund (NCUSIF) have taken their toll, the credit unions' capital remains solid. Eighty percent of the state's 221 credit unions lost money in the first quarter, according to National Credit Union Administration (NCUA) data (Worcester Business Journal July 20). Most were profitable a year ago for the same period. Much of the losses are related to an increase in deposit insurance premiums from all credit unions to replenish NCUSIF after NCUA guaranteed all shares of corporate credit unions. "The good news is that they, all the credit unions, had enough capital and could continue to do business," Robert Kimmett, executive vice president of public relations and marketing at the Massachusetts Credit Union League, told the newspaper. Normal accounting requirements would account for the increased insurance fund payment in fourth quarter of 2008 or first or second quarter of this year. However, Congress allowed NCUA to borrow up to $6 billion from the U.S. Treasury. Now credit unions can pay their premiums over seven years instead of all at once. The publication also interviewed Marlborough-based Digital FCU, which said its assessment amounted to $22.7 million. The assessment pushed it into the red for a $17.4 million loss in first quarter, Tim Garner, executive vice president of marketing and strategic planning, told the journal. He noted credit unions can put the premium back on their books in second quarter. Frederick Healey, president/CEO of Workers' CU, Fitchburg, said the credit union managed to have a profit of more than $1 million in 2008 and a first-quarter 2009 profit of $665,000. Workers' has conservative lending policies and diversified its revenue sources, which helped, he told the publication. Credit unions were not involved in the subprime mortgages and are not responsible for the problems in the financial market, Digital FCU's Garner said. However, like everyone else, they are being affected by the problems in the financial market.

Global CUs gear up for WOCCU Barcelona conference

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MADISON, Wis. (7/22/09)--More than 1,100 credit union executives, officials and supporters are expected to attend the World Council of Credit Unions’ (WOCCU) World Credit Union Conference in Barcelona, Spain, next week. Attendees at the July 26-29 event represent 62 countries--the most diverse crowd to ever attend a Europe-based WOCCU conference. Speakers at the conference include Vicente Fox, former president of Mexico and a credit union supporter; Luis Pastor, president/CEO of Latino Community CU, Durham, N.C.; Eric Dillon, chief operating officer of Servus CU, Alberta, Canada; and Pete Crear, WOCCU president/CEO. Special events include: a day-long workshop for African savings and credit cooperative executives and officials; the international Regulators’ Roundtable; and the Global Women’s Leadership Forum. Distinguished Service Awards and the WOCCU Young Credit Union People scholarship also will be presented. The conference is co-hosted by WOCCU, the Spanish Cooperative Bank, and Spain’s National Union of Credit Cooperatives.

Ent FCU leads in nine categories and best biz

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COLORADO SPRINGS, Colo. (7/22/09)--Ent FCU, Colorado Springs, Colo., was recognized as a business leader in nine categories by the Colorado Springs Business Journal. The journal asks its readership to vote for the businesses they believe are the best in several categories. Ent FCU was recognized as the best in five categories:
* Best credit union (for the sixth year in a row); * Best mortgage company; * Best commercial lender; * Best large company with the most promising future; and * Best business to support local charities.
Ent also was recognized as a runner-up in four categories:
* Best business bank; * Best corporate financial services; * Best local ad campaign; and * Best local CEO (Ent President/CEO Charles Emmer was runner-up).
Ent FCU has more than $2.8 billion in assets.