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CU System briefs (07/23/2014)

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  • MADISON, Wis., and ST. PETERSBURG, Fla. (7/23/14)-- PSCU, a card services credit union service organization, signed a three-year agreement to be the premiere sponsor for the Global Women's Leadership Network Sister Societies. Sister Societies, which have been established in the United States and five other countries, are local groups of Global Women's Leadership Network members who gather regularly to exchange ideas and share information. PSCU's financial support will help underwrite initiatives that promote gender balance at the executive level and increase leadership opportunities for women in the credit union industry. The Global Women's Leadership Forum begins Saturday at the World Credit Union Conference in Australia and is expected to draw 100 women leaders from 22 countries  ...
  • WAUKEGAN, Ill. (7/23/14)-- Consumers CU, a $614 million-asset credit union in Waukegan, Ill., has a new mascot that--as the name implies--earnestly engages community members. Earnest the Pig has been making the rounds at festivals and fairs. "We wanted to create an image that would resonate with people of all ages--an icon that would work with both traditional and new-age, social media marketing," said Maria Contreras, marketing manager at the 85-year-old credit union. "The public reaction has been fantastic and as a result, we have many more activities lined up for him." While on location, Earnest provides stickers and photo opportunities for kids, but he also refunds ATM fees for adults, as he did for Anne Van Van Der Basch (Consumers CU Photo) ...
  • ATLANTA and CHESAPEAKE, Va. (7/23/14 )--Floyd County Postal Employees CU, a $3.7 million-asset credit union in Rome, Ga., has merged with $2 billion-asset Atlanta Postal CU ( Northwest Georgia News July 21). The branch that served as Floyd County Postal Employees CU will be relocated to an expanded location this fall and will include a drive-through ATM and shared-branch services. Members Alliance FCU, Columbus, Ga., with $26 million in assets, also recently merged with Atlanta Postal CU . In Virginia, the boards of Guardian FCU, Portsmouth, with $43 million in assets, and ABNB FCU, Chesapeake, with $420 million in assets, have approved a merger which, if approved by members, would become effective Nov. 1. "Is it better to go out on the top of your game or something less?" Guardian FCU's President/CEO Chris Anuswith told Hampton Roads Business Journal (July 21). "There's no reason to wait for that when we can get together and make something that is far stronger than we are individually" ...

85% of members feel 100% safe with a CU: Filene

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MADISON, Wis. (7/23/14)--Because they hold credit unions in such high regard, credit union members are more likely than bank customers to keep a greater portion of their holdings with their financial institution--an encouraging development as credit unions continue to seek ways to expand member outreach, according to a new Filene Research Institute white paper.
"The Consumer Experience: Financial Institution Preference and Usage Factors," which analyzed McKinsey and Co. survey data from 2013, found that 85% feel their assets are completely safe at their credit union, while only 68% of bank customers feel the same about their institution.

"Credit unions can't prevent every member from shifting their funds or closing their account, but the current outlook for growth is extremely promising," the report noted. "Research is showing how effective credit unions are at creating trust with their members.
"As long as this trust is sustained, there is no reason to think credit unions can't grab more market share," the report continued. "We have learned that consumers choose financial institutions based on income, age and attitudes toward service offerings. These preferences are always subject to change. The onus will be on credit union leaders to ensure they don't."

"Lessons learned" in the report included:
  • Credit union members keep a greater portion of their holdings with their primary financial institution than bank customers;
  • Wealthy consumers with more than $150,000 in annual income tend to keep a smaller proportion of their personal assets at their primary financial institution;
  • Consumers with less than $20,000 in household income keep 80% to 100% of their total assets with their primary financial institution;
  • Consumers who use a credit union as their primary financial institution are much more likely than bank customers to agree strongly with positive statements about their primary financial institution;
  • Forty-eight percent of credit union members feel their credit union rewards them for remaining loyal to their brand, compared with 34% of bank customers;
  • Between 75% and 90% of consumers use websites to check balances;
  • Those who use a credit union as their primary financial institution consistently report the highest level of satisfaction with various attributes of their primary financial institution;
  • Only 14% of respondents with incomes of less than $20,000 switched financial institutions for better products, rates, fees or returns; and
  • Forty percent of respondents with more than $150,000 in annual income switched to find better products, rates, fees or returns.
To download the white paper, use the link.

CU programs are tailor-made for Hispanic members' success

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FARMERS BRANCH, Texas (7/23/14)--Hispanics are likely to have clear financial goals but are unsure about how to achieve them, according to a recent survey by Prudentia, thus giving credit unions an opportunity to start conversations about how they can support these goals.
Prudential's "Hispanic American Financial Experience" report found that personal debt is culturally taboo--62% indicated there is no such thing as "good debt"--and the desire by almost half of respondents to pay for items with cash.
However, nearly 70% recognize that living debt free is not possible, which may create educational opportunities for credit unions and other financial institutions, the report noted.
The Prudential study was conducted Oct. 28-Nov. 18 and polled 1,023 Americans age 25-70 who self-identified as Hispanic, had a household income of more than $25,000 and had some involvement in household financial decisions.
Through increased community involvement and financial literacy opportunities, credit unions can engage the Hispanic community in setting goals. This is a tactic taken by some credit unions in the Cornerstone Credit Union League's Juntos Avanzamos program.
"There is a great financial opportunity for credit unions in the Hispanic market," said Bob Peterson, chair of Cornerstone's International Relationship Committee ( Leaguer July 17). "However, if we want to earn their business, we have to be at the forefront of educating them on how we can help them meet their financial goals."
Peterson is also president/CEO of $90 million-asset OneSource FCU, El Paso, Texas--one of 28 credit unions that have received the Juntos Avanzamos (Together We Advance) designation.
The Prudential survey also asked what financial institutions could do to better meet Hispanics' needs. The leading answer was to be more involved in the community, followed by having the ability to communicate in Spanish; offer financial education for the community; tailor products/services to the community; provide jobs for Hispanic workers; and use easy-to-understand language.
Southwest 66 CU, Odessa, Texas, has tailored products and services to its local Hispanic community. President/CEO Sean Cahill said the $85 million-asset credit union--also a member of the Juntos Avanzamos program--has created a number of specialty loans including a "borrow and save" loan to combat payday lending and establish savings behaviors and a quinceanera loan to cover the cost of celebrations held for girls' fifteenth birthdays ( Perspectives June 26).
"The thing we are most proud of is our citizenship loan, as it combines funding with community partnerships," Cahill said. "There are five unique stages to this loan, and each stage requires a commitment from the member before the next portion is funded. We use a local attorney to ensure the member is protected, and make local (English as a Second Language) partnerships to bring the greatest value to the member. We even offer a loan for a suit or dress for the member to wear while attending their citizenship ceremony."

Iowa league survey touts value of college education

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DES MOINES, Iowa (7/23/14)--It might be reasonable to assume most U.S. citizens believe college is important, but many still often struggle with figuring out how to finance such a major expense.

In response to survey by the Iowa Credit Union League that once again demonstrated the value people place on a college education--70% of Iowans said a college degree is worth the financial investment--the Iowa Credit Union Foundation (ICUF) has offered up tips on how to tackle paying for school.

"With tuition costs on the rise, it's important for consumers to begin planning their financing as soon as possible," said Jamie Miller, ICUF executive director. "There are many college financing options available, and which one you choose will depend on your individual needs."

The foundation proposes several tips for financing a college education including:
  • Start saving now: Whether you're months, years or decades away from paying for college, start saving today, as the earlier the money is put away, the more time it has to grow. Take advantage of college savings calculators to determine how much you will need to save.
  • Seek assistance: Speak with an experienced financial adviser about college savings goals and financing options who can present the advantages and disadvantages to each possible method.
  • Do the research: There are several options available to finance a college education, including scholarships and grants, prepaid tuition plans, 529 college savings plans, work-study programs and individual retirement accounts. Look into each option and meet with a financial adviser to learn the full benefits of each.

Plaintiffs push to continue Target data breach class action

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MINNEAPOLIS (7/23/14)--In response to Target Corp.'s attempt to delay discovery in multidistrict litigation regarding last year's data security breach, plaintiffs filed a joint memorandum opposing Target's request.
Earlier this month, the retail giant requested a stay of discovery for the multidistrict litigation, citing a desire to wait until rulings are made on motions to dismiss the class-action lawsuits brought by consumers and financial institutions. This could push discovery until as late as November.
"Given the burden that discovery regarding potentially moot questions would impose on the parties and this court, good cause exists for continuing the discovery stay for a few months until the motions to dismiss can be resolved," the retailer said ( Law360 July 3).
However, last week, plaintiffs fought the attempted delay of discovery with a joint memorandum filed in the U.S. District Court in Minnesota. "Fact discovery should begin and should not be delayed," the memorandum says, adding that "federal courts disfavor staying discovery while a motion to dismiss is pending, and here, Target has not met its burden of demonstrating that its anticipated motion to dismiss will resolve all claims in its favor."
The memo adds, "Target's arguments that Financial Institution Plaintiffs' claims will be dismissed and that Consumer Plaintiffs lack standing are premature and incorrect. Neither argument warrants a stay of discovery. Accordingly, this Court should deny Target's Motion."
Financial institution plaintiffs' consolidated complaint will be filed Aug. 1, and Aug. 25 is the due date to file the consumer plaintiffs' consolidated complaint.
In May, U.S. District Judge Paul Magnuson said "big, long, indefinite stays" for the class-action lawsuits would not be appropriate ( News Now May 19).
Target revealed Dec. 19 that about 40 million debit and credit card numbers were compromised as was the personal information of as many as 70 million customers.
A survey by the Credit Union National Association found that credit unions incurred $30.6 million in costs directly related to the breach--not including fraud costs. CUNA is pressing federal lawmakers to address data security relative to merchants, who are not held to the same standards of security as credit unions and other financial institutions.

Mountain America CEO helps TV audience understand credit scores

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SALT LAKE CITY (7/23/14)--To help viewers understand how credit bureaus calculate credit scores, Sterling Nielsen, president/CEO of Mountain America CU, West Jordan, Utah, with $3.9 billion in assets, offered up some insight during a recent appearance on KSL-TV 5 's "Studio 5 with Brooke Walker" in Salt Lake City.

"There are three main (credit reporting agencies), and they all look at things just a little bit differently," said Nielsen.

"First of all you need to make sure that you watch that credit history," he advised. "Make sure that you make your payments on time; they're going to look at how often you make a late payment, how late that payment is (and) how many accounts are late. These all play a big part in your credit score."

Next, Nielsen said, consumers should pay attention to their levels of credit utilization and make sure they're not using too much of their limits.  

"A lot of people think, 'Hey, I have a $5,000 credit card (limit), I might as well charge it all up,'" Nielsen said. "But that hurts your overall credit score. You're better off keeping your utilization down to about 30%," even if you pay off your balance every month. 

Finally, consumers should work to build a strong credit history, Nielsen said.

"You want to show a period of time when, not only were you paying your bills on time, but you were managing credit responsibly," Nielsen said. "The length of time is quite important in managing your credit score."

Nielsen added that consumers with credit scores of 700 or above likely will receive the most advantageous interest rates, while those with credit scores below 600 will not fare as well.

NWCUA launches relief effort for central Wash. wildfires

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PORTLAND, Ore. (7/23/14)--The credit union community is offering assistance to victims of the Carlton Complex fire in central Washington, with an initial $5,000 donated by the Northwest Credit Union Foundation (NWCUF).

NWCUF also is encouraging online donations--a similar effort earlier this year resulted in $108,000 in contributions from credit unions and leagues across the nation for victims of the Oso mudslide.
The fire burned another 7,000 acres overnight Monday, the Northwest Credit Union Association reported Tuesday ( Anthem July 22). An estimated 150 homes have been destroyed. The Carlton Complex fire is the largest of several wildfires burning in Washington and Oregon this week.
"Credit unions in our region have shown time and time again that they understand how important it is to provide immediate support and they always step up when there is a disaster," said Kim Vu, NWCUF executive director. "We always realize that these are not just members of our credit unions, but they also part of the local communities we serve who could be losing their homes and this is when they most need us."
Credit unions are raising funds and offering financial assistance to members who may be directly affected by the wildfires. Spokane Teachers CU, with $1.9 billion in assets, Liberty Lake, Wash., is leveraging a longtime relationship with the American Red Cross and a local television station to raise emergency funds for fire victims.
Numerica CU, with $1.3 billion in assets, Spokane Valley, Wash., reached out to members through its popular Facebook site to offer both financial assistance and personal support. A spokesperson for Numerica CU reports that as many as 30 members in the Patero location live in one of the active fire zones and could be at risk.
Numerica CU also encouraged employees to support the fundraising. For a donation to help victims of the wildfires, employees will receive "Casual for a Cause" coupons valued at $25.
In addition, the credit union is sponsoring the Rain Down Hope Benefit Concert today to benefit the Chelan Valley Hope Fire Relief Fund.
Credit unions and employees interested in making a donation can donate directly through the NWCUF to benefit the Community Foundation of North Central Washington's Fire Relief Fund.

NFL's Cushing continues spokesman, outreach role for Houston CU

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HOUSTON (7/23/14)--First Community CU has extended its partnership with Houston Texans linebacker Brian Cushing, who will continue as spokesperson for the $1 billion-asset Houston-based credit union through 2016.
Cushing will continue his participation in First Community CU's annual "Stars in the Classroom" program, which rewards 10 deserving teachers for going above and beyond in the classroom. The teachers are awarded football tickets, sideline passes and an autographed jersey. In addition, a $500 donation is made to each teacher's school district and Cushing or one of his teammates visits the teacher's classroom. The nominating student receives an autographed Houston Texans football.
Cushing served as the credit union's spokesperson last year and was part of the financial institution's award-winning TV commercial, radio and print ads as well as billboards and other promotions. First Community is developing a new marketing campaign for 2014-2015 with Cushing as the creative centerpiece.
Cushing has played in the NFL since 2009 after being drafted from the University of Southern California as the Texans first-round pick. Since entering the league, Cushing has been voted NFL defensive rookie of the year, selected to the Pro Bowl and named the Texans' most valuable player in 2011.

First Community CU also is the official credit union of the Houston Texans and the exclusive provider of Texans Checking, which features a customized Texans debit card, chances to win autographed merchandise and access to exclusive events.