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CUs remain healthy say leagues

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MADISON, Wis. (7/23/08)--Credit unions and credit union leagues nationwide are continuing to spread the message that credit unions are healthy despite an economic downturn. On Monday, Kansas Credit Union Association staff met to address ways to offset the rising concern on behalf of members about the safety and soundness of credit unions, Ashley Bridgeman, communications specialist, told News Now. The association will offer a free webinar to educate credit unions on talking with their members about the soundness of their credit union and more specifically, the National Credit Union Administration’s (NCUA) Share Insurance Fund. The association also will continue public relations efforts to educate members and nonmembers about the credit union difference and the safety of members’ deposits. “In addition, we are going to initiate a conference with the members of KCUA’s Member Growth and Profitability Task Force to accurately gauge the situation and develop additional tactics to not only help credit unions communicate with their members, but also provide support for credit union operations during this time as well,” Bridgeman added. Georgia Credit Union Affiliates (GCUA) built a new web page on its league website with resources to assist Georgia credit unions, the media and general public, Anita Paul, GCUA director of communications, told News Now. Washington State Employers CU, Olympia, Wash., spoke with the Seattle Post-Intelligencer about the safety of credit unions. Ann Flannigan, spokesperson for the credit union, told the newspaper that its members’ funds are insured by the National Credit Union Administration up to $100,000. The Credit Union League of Connecticut released information in which President/CEO Anthony L. Emerson guaranteed that the state’s credit unions will “remain safe during changes in the economy and credit markets.” The league noted that credit unions’ structure, which is different from other financial institutions, is the cornerstone of why credit unions remain healthy.

Study Gens X Y more likely to switch PFIs

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ST. LOUIS (7/23/08)--Generation X and Y may be the future of retail banking, but they are the most likely to switch primary financial institutions (PFIs) because of fees or poor service, according to a poll by Maritz Inc. That means credit unions and banks will be working harder to attract and keep these groups. Maritz, a marketing services company based in St. Louis, surveyed 1,008 people and found that 53% of those in Gen X (30-42 years old) and 61% of Gen Y (18-29 years old) had either changed their PFI or considered doing so in the past two years. That compares with 20% of the Silent Generation and 37% of Baby Boomers surveyed. "The current customer experience model at banks caters to the Silent Generation and the Boomers, who more frequently bank in person at branches," said Thad Peterson, division vice president, sector strategy and solutions of Maritz's financial services sector. "But younger generation customers are much more mobile and rely more heavily on online interactions," he said. Financial institutions' "most unstable relationships exist with younger customers, because younger people often haven't settled into a stable financial pattern yet," he said. Institutions hoping to build long-term relationships with Gen Y and Gen X need to think about three basic steps, Peterson said:
* Attracting Gen Y and Gen X as customers/members in the first place. Locational convenience has been the primary tool for attracting new members/customers. That's still the case with the younger generations, but their definition of "locational convenience" is changing. Now it includes online and mobile transactions, and they expect anytime anywhere banking. Banks (and credit unions) need a strategy to attract and retain prospective customers who rarely step into a banking office, he said. * Identifying and offering products that give young people "roots" at the bank or credit union. Example: provide incentives for online bill paying services and debit rewards programs. * Treating the younger generations the way they want to be treated. Ensure that their member/customer experience is appropriate for Gen X and Gen Y, and consistent at all major banking touch points.
The survey indicates that young people can be more impatient, less tolerant and harder to please than their cohorts in the older generations. It also found that younger customers are more likely than older customers to find fault or have problems with their primary financial institutions. For example:
* 37% of Gen Y and 36% of Gen X believe they would get better customer service at a different bank; * 22% of Gen Y and 21% of Gen X reported being upset in the past year about high fees, compared with 14% of Boomer and 6% of Silent Generation respondents; and * 18% of Gen Y and 17% of Gen X reported being upset about a lack of ATM locations, compared with 11% of Boomers and 3% of the Silent Generation.
So how does a credit union reach Gen X and Y members? Businesses are beginning to reach out via social media such as Facebook, but Peterson warns against relying too heavily on social media to initially reach these groups. "Using Facebook to attract new customers is like standing in a corner passing out business cards at a cocktail party," Peterson says. "If you don't have a genuine relationship with them, all you are going to accomplish is to diminish the value of your brand to that individual." He suggests that financial institutions:
* Be the source or their primary debit card--Gen X and Y comprise the debit card generation; * Highly "incent" them to migrate to online banking with a significant reward for paying bills online; * Make sure front-line employees are treating Gen X and Y the way they want to be treated and can solve problems on the spot--a key to securing lifelong patrons; and * Stay in tune with how younger customers want to connect--online banking, bill pay and mobile banking are three touchpoints that must be state-of-the-art and part of the overall customer experience.

CU System briefs (07/22/2008)

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* NEWPORT NEWS, Va. (7/23/08)--The U.S. Attorney's Office in Newport News will seek the death penalty if David Anthony Runyon is found guilty in the for-hire murder of Navy Ensign Cory Allen Voss outside Langley FCU. Voss was shot to death by an ATM on April 20, 2007. Runyon is accused of plotting the murder for $20,000. Catherina Rose Voss, the victim's wife, Friday pleaded guilty to five counts, including conspiracy to commit murder for hire. She is accused of conspiring with her lover, Michael Anthony Eric Draven, to hire Runyon to kill Voss for $20,000. Draven faces life in prison. Voss, in an agreement that must be approved by the judge, would be sentenced to life in prison (Daily Press July 22) … * DES MOINES, Iowa (7/23/08)--The Iowa Jump$tart Coalition named Mary Dahlby, right, family and consumer science teacher at Urbandale Community School District, the 2008 Financial Educator of the Year. The award was provided by the Iowa Credit Union Foundation. Marybeth Foster, left, foundation executive director, presented the award to Dahlby during the annual Jump$tart Coalition Personal Financial Literacy Conference July 17-18. Dahlby spends more than half of her teaching time on financial concepts. She uses the National Endowment for Financial Education materials as the basis of lectures. One of her lessons, “Who Wants to Be a Millionaire,” teaches high school seniors the time value of money. The Iowa Jump$tart Coalition is a partnership of organizations dedicated to improving the financial literacy of Iowa youth ... * RALEIGH, N.C. (7/23/08)--State Employees CU (SECU) was recognized by the North Carolina Board of Education and the North Carolina Department of Public Instruction (DPI) for collaborating with DPI to improve personal financial literacy education in North Carolina’s public schools, according to SECU. SECU, a long-time promoter of the National Endowment for Financial Educations (NEFE) High School Financial Planning Program, partnered with DPI in 2007-2008 to provide NEFE training to the state’s high school civics and economics teachers. With the State Board of Education's approval of the NEFE curriculum, teachers can now incorporate the material into their courses to meet the North Carolina House Bill 1473 mandate for personal financial literacy in the classroom … * OTTAWA, Ill. (7/23/08)--Garnering inspiration from Oprah’s "Big Give" TV show, Financial Plus CU, Ottawa, Ill., has raised $34,781 for local individuals in need, as part of it own “Big Give" fundraiser, according to the Illinois Credit Union League. Each branch and department was given $100 at a recent staff meeting and told to make the money grow and find ways to give back to people and organizations in the community within 30 days. In all, 65 employees participated and grew the seed money through a number of raffles of goods and baskets, a bake sale, a car wash, cleaning windshields at the credit union’s drive-up facility, and guest bartending and waitressing at various establishments … * CHARLOTTE, N.C. (7/23/08)--Two men from Rock Hill were sentenced for plotting to detonate two pipe bombs at a Charlotte school to occupy police while they robbed Founders FCU in Charlotte. William Christopher Puckett, 19, was sentenced to seven years and eight months in prison, and Edgar Scott Williams IV, 19, received six years and eight months in prison, said a press release from the U.S Attorney's office (Rock Hill Herald and Charlotte Observer July 22). The two pleaded guilty and testified against two other co-defendants, Timothy and Steven Eddington. On the morning of the planned robbery, a Crime Stoppers tip led to the men who were sleeping in an abandoned house. Two pipe bombs were found in the house … * APPLETON, Wis. (7/23/08)--Thomas John Maday, former Wisconsin Commissioner of Credit Unions died Friday at an Appleton hospital. He was 60. Maday served as commissioner under Gov. Tommy Thompson. Services were held Tuesday in Fond du Lac, Wis. ( July 20) …

Official lauds CUs help for state workers in budget limbo

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SACRAMENTO, Calif. (7/23/08)--The Golden 1 CU was thanked by a California official for spearheading a loan program to help state government workers, who are going without paychecks while waiting for the state’s budget to be adopted. June 15 was the last payday not only for California politicians, but also for committee secretaries, security guards, legislative aides and vendors. They are waiting for an overdue budget to be approved by the state legislature and signed by Gov. Arnold Schwarzenegger (Ventura County Star July 22). The Golden 1, a $6.586 billion asset, Sacramento-based credit union, is one of three financial institutions--Wells Fargo and Bank of America are the other two--that provide loans to state legislative staff almost every July when budgets need to be renewed. Usually loans are issued with 0% interest. To qualify, borrowers must have direct deposit on their accounts. The Golden 1 was “the harbinger of the loan program,” according to Tony Beard Jr., California Senate sergeant-at-arms. He said he wanted to be the first to thank the credit union for its service to members of the state legislative staff over the past years. Almost every year, California, like many states, has to operate when one year’s budget expires and the next year’s has yet to be approved. California credit unions have a history of helping people through state budget limbos. In years past, Schools Financial CU, a $1.131 billion asset, Sacramento-based credit union, has offered zero-interest loans to state workers needing financial assistance during a budget impasse (News Now July 5, 2005). Years ago, while mired in a budget crisis, Arrowhead CU, a $1.064 billion asset, San Bernardino, Calif.-based credit union, allowed public nonprofit agencies to borrow up to a $100,000 from Arrowhead to continue operations until the state budget was adopted (News Now July 17, 2003).

CUNA shares ways to protect deposits with IWall St. JournalI

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NEW YORK (7/23/08)--The Credit Union National Association (CUNA) shared some ways to protect consumer deposits at financial institutions in a Monday article in The Wall Street Journal. To make sure that credit union or bank balances greater than $100,000 are protected, the easiest move for consumers is to open a joint account, which is insured up to $200,000, Kathleen Thompson, CUNA senior vice president of compliance, told the newspaper. Additional accounts could protect even more assets, she added. Thompson told the paper that a joint account she has with her husband is insured for up to $200,000, but adding her son to her account would result in another $100,000 under deposit insurance protection, for a total coverage amount of $300,000. While the Federal Deposit Insurance Corp. guarantees bank deposits, the National Credit Union Administration provides the same protection to credit union deposits [through the National Credit Union Share Insurance Fund], the paper mentioned.

CO-OP Financial Services hits 1 million CMN goal

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RANCHO CUCAMONGA, Calif. (7/23/08)--Due to the success of two programs, CO-OP Financial Services has already reached its annual goal of $1 million in donations to Children’s Miracle Network’s (CMN) “Credit Unions for Kids” program. CMN is a non-profit organization dedicated to saving and improving the lives of children by raising funds for children’s hospitals.
Employees of the Alabama Teachers CU, Gadsden, Ala., and Alabama Credit Union League enjoy a casino night fundraiser to benefit Children’s Miracle Network. The event, which raised more than $5,700, was part of CO-OP Financial Services' “Miracle Match” program. From left: Gina Turner, Alabama Teachers CU, and league employees Teresa Gary, director of administration and executive assistant to the CEO; Janice Jordan, director, financial services; and Larry Rodriguez, vice president, financial services. (Photo provided by CO-OP Financial Services)
The first campaign, “Miracle Match,” introduced to CO-OP members six months ago, strove to match credit union contributions at the local level, thereby expanding the money that members already donate and stimulating new credit union giving for CMN. Seventy-one credit unions participated and raised a matched total of $500,000 in record time through community-focused events ranging from balloon sales to golf tournaments. “Champions Across America” is CO-OP’s second fund-raising campaign for CMN. The program chooses a child who has been treated at a CMN hospital from each state as a champion to raise awareness of the work of children’s hospitals. Champions also travel nationwide to spread the message of better care at CMN-supported hospitals. This spring, champions traveled to Walt Disney World for the annual Children’s Miracle Network Celebration, followed by a visit with President Bush at the White House.

DFCU Financial CapCom CUs to merge

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DEARBORN, Mich. (7/23/08)--Two Michigan-based credit unions--Dearborn-based DFCU Financial FCU and Lansing-based CapCom CU--Monday filed an application with the state Office of Financial & Insurance Regulation and the National Credit Union Administration to merge the two credit unions. The new combined organization will assume the DFCU Financial CU name and retain CapCom CU's state charter. The credit union will have $2.2 billion in assets--the largest credit union in Michigan and one of the largest in the nation. It will serve more than 200,000 members with 21 full-service branches and about 500 employees. According to a press release, the new credit union will benefit from geographic market diversification with branches located from Detroit to Grand Rapids; expanded products and services; continued commitment to community initiatives; increased membership growth opportunities; greater operating economies of scale; and proven financial strength, leadership and operating performance. The new credit union's board will consist of the board of directors of both credit unions. The management team will be led by current DFCU Financial President/CEO Mark Shobe and current CapCom President/CEO Renee DeMarco, who will assume responsibility for DFCU Financial’s western Michigan presence as regional president. The credit union does not expect to eliminate any positions as a result of this merger.

Palisades FCU Members can skip summer loan payments

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PEARL RIVER, N.Y. (7/23/08)--Palisades FCU announced that its members can skip their July and August loan payments through its “Take the summer off” loan program. All members in good standing can skip paying their next two loan payments by having only the interest accrue on their accounts, the credit union said. “The extra money will help me cover the increase in energy costs this summer,” said member Alfred Soto in the credit union’s press release. Higher inflation and slower wage growth has led to falling real hourly and weekly earnings for workers in the area. The shift in buying power of workers’ paychecks is forcing families to cut back this summer, the credit union said. Through the program “we are fulfilling our promise to fit into our members’ lives, not the other way around,” said Mark Welshoff, Palisades president/CEO. Palisades FCU, headquartered in Pearl River, N.Y., has more than $147 million in assets.

CU in Texas ends disbursement of loose change

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HOUSTON (7/23/08)--Is it possible to be progressive--without making change? The newest branch of People’s Trust FCU in Houston would say yes. The branch, which opened in May, doesn’t give out loose change to its members. Instead, the credit union places the change into members’ accounts, or gives them the option of contributing the money toward charity through the credit union’s foundation. So far, two members have chosen give their money to the foundation. “We’ve gotten very positive feedback,” Vernon Babilon, executive vice president and chief financial officer, told News Now. People’s Trust decided to go coinless to encourage member savings. “It’s an easy way to get them started,” Babilon said. “When we gave members change, they didn’t count it.” Going coinless is also safer. Without coins, tellers at the credit union don’t need cash drawers, which can attract robbers. Instead, they use bill dispensers. “It’s better for the members, and it’s safer for the members and the tellers,” Babilon said. Though the tellers don’t give back coins, the branch offers a cash machine for members’ loose change, and has rolled coins available, Babilon said. The branch has a nontraditional teller layout. Members are greeted when they walk in the door and can use one of four dialog stations. The four tellers share two bill dispensers. So far, the new Houston branch is the only one of seven that is going coinless. “We hope in the future other branches will follow suit,” Babilon said. The branch also is the only coinless branch in the area, and has generated interest from local financial institutions. The chief financial officer at a Dallas bank recently called Babilon because he liked the idea, Babilon said. Even if the idea of “going coinless” catches on, Babilon doesn’t expect a cashless society. “There’s too much of a need,” he said. “There are always walks of life [that need cash].” People’s Trust has $288 million in assets.

Wisconsin revenue dept. thanks CUs for free tax prep

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MADISON, Wis. (7/23/08)--The Wisconsin Department of Revenue thanked Wisconsin credit unions at a meeting July 18 for participating in the state’s Free Tax Preparation Assistance program.
Brett Thompson (left), president/CEO of the Wisconsin Credit Union League, discussed the future of the state’s Free Tax Preparation Assistance program last week with Roger Ervin, secretary of the Wisconsin Department of Revenue. (Photo provided by the Wisconsin Credit Union League)
Roger Ervin, state revenue secretary, stressed the importance of the program, which is geared to preventing low-income tax filers from becoming victimized by predatory “refund anticipation loans.” The program offers free tax preparation assistance, according to the Wisconsin Credit Union League website. More Wisconsin credit unions need to get involved to help expand the program and to promote more electronic tax filings in the next tax season, Ervin added. Credit unions wanting to get involved in the program can make use of grants made available by the Internal Revenue Service (IRS). The grants are a component of an $8 million, one-year initiative created to extend the program, not only to the underserved population, but also to hard-to-reach areas--both urban and rural. This year, 60,190 people filed tax returns at 231 free tax preparation sites in Wisconsin. The sites were operated in conjunction with the IRS, Wisconsin Department of Revenue and the AARP. With the average cost of fees paid to a tax preparer offering refund anticipation loans at $276, Wisconsin filers saved about of $16.5 million through the free tax preparation assistance, the league said.

Hannaford data breach lawyers meet with judge

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PORTLAND, Maine (7/23/08)--More than 20 attorneys from throughout the U.S. met Monday at a U.S. District Court in Maine, for the first conference in a class-action lawsuit filed against grocery chain Hannaford Bros., which was the target of a data breach earlier this year. The data breach affected store customers, including credit union members, in New England, New York and Florida. It prompted credit unions and other credit and debit card issuers to reissue cards compromised by the data theft, which occurred while store customers swiped their cards to pay for groceries (News Now March 19). Two groups competing to become the lead counsel in the lawsuit argued their positions before U.S. District Judge D. Brock Hornby Monday. More than nine lawsuits were filed, but the court consolidated the cases in April (News Now April 17). Judge Hornby heard the arguments and said he will issue an order designating a lead counsel and establishing a case schedule case this week (Boston Globe and Portland Press Herald July 21). The two groups are competing to lead what is one of the largest data breach lawsuits in history. The first group is Portland-based Murray, Plumb & Murray, and Lewis Saul & Associates, based in Portland and New York City. The other group is Ben Barnow of Chicago-based Barnow & Associates; Lance Harke of Miami-based Harke & Clasby in Miami; Sherrie Savett of Philadelphia-based Berger & Montague; and Thomas Shapiro of Boston-based Shapiro Haber & Umy. The Scarborough, Maine-based Hannaford Bros. said the breach resulted in the exposure of 4.2 million credit and debit card numbers to potential fraud (Times Herald-Record April 16). The breach occurred between Dec. 7, 2007, and March 10. It was discovered Feb. 27, and the breach was made public March 17. The breach affected about 300 grocery stores in the Hannaford Bros. and Florida's Sweetbay chains, plus a number of independent grocers.