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Bank branches take a tumble in 2011

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HARRISBURG, Pa., and CHARLOTTESVILLE, Va. (8/1/12)--U.S. banks and thrifts lopped off more than 767 branches during 2011, with banks in Pennsylvania leading the exodus. However, credit union branches in that state increased, said the Pennsylvania Credit Union Association.

Pennsylvania lost the most bank branches--83--of all the states, according to SNL Financial LLC of Charlottesville, Va.  Georgia had the second-highest closures, with 51 branches cut, and Virginia, was third-highest, with 46 branches dropped in the past year. 

Four states saw gains: California gained 22 bank branches; Rhode Island, three; New Mexico, two; and Delaware, one.  Three states--New Hampshire, Alaska and North Dakota--broke even with no branch cuts or additions. The rest saw decreases in bank branches.

PCUA noted that 119 bank branches were shut in the state, while 36 new ones opened--for a net loss of 83.   But the state gained 14 credit union branches in 2011, said PCUA.  During the past five years,  credit unions have added 157 branches in the state (Life is a Highway July 31)

Pennsylvania experienced its largest growth spurt in credit union branches in 2008, when 44 new branches opened.

The metro area with the greatest number of bank branches closed--30--was the Philadelphia-Camden, N.J.-Wilmington, Del. metro area. It lost 10 more branches than did New York's metropolitan statistical area. The SNL Financial report indicated that six of the major banks with the most branch closures have large networks in Pennsylvania, said PCUA. The losses were attributed to consolidation of existing sites and closures to cut expenses.

The report also indicated that consumers have been reluctant to abandon brick and mortar branches for online or mobile branch services and that a typical bank branch employs up to 20 people. Use the link to access the report summary.

CU System briefs (07/31/2012)

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  • RUSSELLVILLE, Ark. (8/1/12)--The police department in Russellville, Ark., Friday advised area residents not to fall for  a text scam under the heading "Credit Union Alert." The text states a credit union alert has been issued and the recipient's credit or debit card canceled. It directs callers to a phone number and asks for their financial information.  The message, said the department, is a fraud.  Police reiterated that recipients should not give any information, and instead "always hang up and contact the creditor back directly to verify the call." It cautioned to find the creditor's number on a verified source, such as balance statements, the back of the credit card or online.  The department received several calls from concerned recipients (The Courier News July 28) …
  • BISMARCK, N.D. (8/1/12)--CU on the Road tour, part of the Credit Union Association of the Dakotas' (CUAD)  awareness campaign, visited the North Dakota State Fair in Minot last week. On Tuesday, CUAD President/CEO Robbie Thompson and Director of Strategic Initiatives Kristie Heit greeted fairgoers alongside the CU on the Road vehicle at the entry gates, handing out credit union information and 1,500 stickers that said "Credit Unions R Cool" to visitors, including these four teens. The CU on the Road vehicle was filled with balloons for a "guess the number" prize game. On Wednesday, Co-op Day at the Fair, volunteers including Heit and Minot area credit unions GEM FCU, Prairie FCU and Town & Country CU, served more than 800 guests breakfast--pancakes, sausage and fruit. At the credit union's booth in the Co-op tent, volunteers talked to and handed stickers out to 1,200 additional visitors. More than 1,000 people attempted to guess the number of balloons in the CU on the Road vehicle. One person guessed the number--192--and won a $100 prize. Later, the coop and credit union volunteers served more than 3,000 free ice cream cones to thank members for their support. (Photo provided by the Credit Union Association of the Dakotas) …

Chicago area CUs host Ecuadoran CU delegation

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NAPERVILLE, Ill. (8/1/12)--OSCUS, a credit union in Ecuador, last week sent four individuals to visit three Chicago area credit unions, including one with which it has a formal partnership via the World Council of Credit Unions' (WOCCU) International Partnerships Program, according to the Illinois Credit Union League (ICUL).

Leading the delegation was Joshua Fetting, WOCCU international partnerships officer.

Located in Ambato, Ecuador, a city of about 400,000 people in the country's central mountainous region, OSCUS holds $171 million in assets and serves more than 160,000 members. With 11 branches nationwide, OSCUS offers services such as savings, debit cards, consumer loans, auto loans, small-business loans and mortgages.

Four individuals from OSCUS, a credit union in Ecuador, last week visited three credit unions in the Chicago area, including a World Council of Credit Unions' (WOCCU) International Partnerships Program partner. From left, are: Front row: Jim Block, vice president, lending, Baxter CU (BCU); Santiago Martin Ortiz Nunez, chief financial officer of OSCUS; Patti Dixon, vice president, member service branch operations; BCU; Lisa Baron, senior vice president, human resources, BCU;  Rosa Marlene Marino Lescano, branch manager, OSCUS; Sarah Thorrens, vice president, talent management, BCU; and Bob Pondelicek, manager, mortgage sales, BCU. Back row, Tom Moore, chief financial officer, BCU; Chuck Smith, vice president/controller, BCU; Carey Price, vice president, sales and service, BCU; Bob McKay, chief operating officer, BCU; Mike Valentine, CEO, BCU; Joshua Fetting, international partnerships officer, WOCCU; Carlos Alonso Santamaria Sanchez, chief information officer, OSCUS; Juan Carlos Basantez Gaona, vice president, national sales, OSCUS; and Maria Garcia, manager, cards and lending operations, BCU.  (Photo provided by the Illinois Credit Union League)
 

OSCUS is the fifth-largest out of the 32 regulated credit unions in Ecuador, which collectively hold $1.9 billion in assets.  About one in five of the country's residents, or 1.8 million, are credit union members, said the league.

OSCUS holds a formal partnership with Baxter CU (BCU) in Vernon Hills, which was the first stop for the delegation. "Our team did a terrific job presenting and discussing key areas of interest with OSCUS, which included mobile technology and information technology solutions, marketing and financial operations and management among other areas," said Tom Moore, BCU senior vice president/chief financial officer.

The delegation also spent time with Mike Valentine, BCU CEO, and many BCU management team members. Next year, BCU will go to Ecuador for meetings with OSCUS management, staff and board, and talk first with OSCUS members to learn about how they are served. The visit will coincide with OSCUS' 50th anniversary.

"WOCCU has the key role to put credit unions around the world in contact so they can mutually tackle operational, structural and philosophical issues," said Victor Miguel Corro, WOCCU vice president. "The goal is to improve members' lives by providing them with the best access to financial services."

The second stop for the delegation was Motorola Employees CU (MECU) in Schaumburg. Larry Rosin, executive vice president/chief financial officer, said the visit was a good exchange, with many questions from the delegation about MECU's investment strategies.

He noted OSCUS is in a position of excess liquidity but--unlike credit unions in the U.S.-- operates within an environment of significantly higher interest rates. Rosin was joined by MECU CEO John Fiore, and staff from the credit union's lending, information technology and operations areas.

The final stop for the delegation was with Sean Rathjen, CEO of Consumers Cooperative CU in Waukegan, and his staff, who covered topics, including marketing and use of social media, liquidity planning and reporting, and how the credit union manages and prices for credit risk with its loans. Rathjen also reviewed Consumers' technology plan and the management and structure of its multi-media contact center, which integrates Web, chat, e-mail, phone and fax services, including the bilingual design.

"Anytime that you can share information, it can only benefit the credit union movement locally and on an international basis," said Dan Plauda, ICUL president/CEO.

Affinity FCU launches hybrid ARM

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BASKING RIDGE, N.J. (8/1/12)--Affinity FCU has introduced an adjustable rate mortgage (ARM) product designed to add stability for home buyers in the aftermath of the mortgage market collapse.

The 5/5 hybrid ARM locks in the original rate for five years, then makes adjustments once every five years thereafter, allowing the borrower to anticipate and budget for mortgage rate adjustments, according to the New Jersey Credit Union League (The Daily Exchange July 31).

The product protects against dramatic rate increases by limiting rate changes to no more than 2% to 3% at each adjustment period and 5% to 6% over the life of the loan, depending on the term. If market rates change 6% to 7% during a five-year period, the borrower's rate will change 2% to 3%, according to the $2.2 billion Basking Ridge, N.J.-based credit union.

The 5/5 ARM is designed to give home buyers the advantages of an ARM while providing more rate stability--a key consideration since the economic collapse, when ARMs came under criticism because borrowers had trouble adjusting to unexpected higher payments.

Affinity FCU's product allows homebuyers to take advantage of low rates at the outset while planning for possible higher rates at a predictable time, knowing that any possible increase will go only so far, the credit union said. And for those who buy during a time of higher rates, the 5/5 ARM protects them from being locked into high rates throughout the mortgage term.

Auto lending up under relaxed criteria

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BURTON, Mich. (8/1/12)--Family Community CU in Burton, Mich., has reported an ongoing 12% to 15% increase in auto loans during the past two years amid more relaxed credit conditions for consumers looking for auto loans.

On a national level, credit reporting agency Equifax reports auto lending has risen to a six-year high (Saginaw News July 29).

That's because as the economy recovers, more people can afford more and take on new financial responsibilities, Daryl Toor, Equifax assistant vice president of public relations, told the newspaper.  

The credit union has started a new auto-loan marketing campaign. The credit union fully underwrites the loans, measures a member's ability to pay, calculates which members have troubled credit, and assesses the likelihood the credit union will get paid back on its loan, Elizabeth Warden, the credit union's vice president of lending and marketing, told the paper.

Family Community CU more readily lends to people with "bruised credit" for auto loans than for unsecured loans that have no collateral or security involved, Warden added.    

In the past three years, auto loans nationwide have nearly doubled to $52.5 billion in March from $26.9 billion in March 2009, Equifax said.

Get Going microsite showcases CUs auto loans

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OKLAHOMA CITY, Okla. (8/1/12)--For the sixth straight summer, Tinker FCU is running its "Get Going" campaign to promote low-rate auto loans.

The $2.6 billion asset, Oklahoma City, Okla.-based credit union originally developed Get Going to provide both members and nonmembers an incentive during the summer to visit its branches and its web site, to learn about low-rate auto loans, according to Nancy Entz, Tinker FCU vice president of marketing (Deposit Growth Strategies July 1).

Visitors can apply for a loan through the Get Going microsite.

Tinker FCU also offers low rates for watercraft, motorcycles and other popular summertime vehicles.

Each Get Going campaign also includes a grand prize. This year's grand prize is free gas for a year, a choice made by the credit union because gas prices are a prevalent topic in today's economy, Entz said in the article.

Two Missouri CUs to merge for savings

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SPRINGFIELD, Mo. (8/1/12)--CU Community CU announced Friday that it has reached an agreement with Southwest Missouri CU (SWMCU) to merge operations following recent votes by its board of directors and membership. Both credit unions are based in Springfield, Mo.

The combined entity will go forward under the CU Community CU name once the merger receives regulatory approval and integration is complete, which is projected for December, according to a news release on CU Community CU's website.

CU Community CU is the fourth-largest asset credit union in Springfield with more than $76 million in assets and 6,400 members. Its members include employees, families and retirees of City Utilities, other select employee groups, and people who live in Greene and Christian Counties.

Economies of scale and reduced costs were cited as the main reasons for the merger.

Southwest Missouri CU's main sponsors are CoxHealth, SRC Holdings, Reckitt Benckiser, and others. Through the merger, CU Community will gain roughly 3,700 members and assets of $11 million.

Judy Hadsall will continue to serve as president/CEO of CU Community CU. Board members from SWMCU will be added to the CU Community CU board of directors.

Vantage CU closes Eureka branch

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BRIDGETON, Mo. (8/1/12)--Vantage CU, Bridgeton, Mo., has closed the second of two branches it acquired in a 2010 merger with Spirit of St. Louis CU.

Vantage CU, with $710 million in assets, closed its Eureka branch on June 29 due to a lack of "foot traffic," according to a representative for the credit union.

Members are being directed to Vantage CU's West County and Sunset Hills branches for service.

A sign on the closed branch also indicated that free CO-OP Network ATMs were available at another nearby credit union inside a Walmart Supercenter (Eureka-Wildwood Patch Jan. 31).

Vantage closed its Des Peres, Mo., branch, which it also acquired in the merger with Spirit of St. Louis CU, in February 2011. The credit union cited operational challenges, restrictive legislation, a sluggish economy and light patronage for the Des Peres branch closing.

Lowest card rates come from CUs says SNL

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CHARLOTTESVILLE, Va. (8/1/12)--
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When it comes to platinum credit cards and reward cards, credit unions have the lowest rates in the nation, beating bank and thrift rates by nearly 200 basis points, says a new study of interest rates.

The national average rates for the two card products hover around 10% to 11%, but some credit unions studied offer half that, according to Charlottesville, Va.-based SNL Financial LC, which conducted the study.

Total credit card loans at U.S. credit unions stood at $36.55 billion as of March 31--a 34.62% increase over $27.15 billion in 2006.  SNL Financial said credit card loans made up 6.31% of credit unions' total aggregate lending portfolio, compared with 5.37% in 2006.

The statistics are comparable to statistics compiled by the Credit Union National Association (CUNA) in its U.S. Credit Union Profile.  Credit unions saw a 6.7% growth rate in overall credit cards during 2011, with cards making up 6.3% of total loans, according to CUNA. To put the growth rate into perspective, the 6.7% can be compared with 7.6% cards growth rate in 2007, 6.4% in 2008, 3.1% in 2009, and 3.9% in 2010.

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For reward card rates, the 16 credit unions with the lowest rates have rates ranging from 5.25% to 7.99%. said SNL Financial.  That compares with rates for the 16 lowest-rate banks and thrifts from 7.24% to 9.24%. The average national rate is 10.86%, said the study report.

The lowest reward card rate--5.25%--is offered by Advantage FCU, Rochester, N.Y. Other credit unions offering the lowest rewards card rates are: Warren FCU, Cheyenne, Wyo., with 6.25%; Sandia Area FCU, Albuquerque, N.M., 6.49%; Apple FCU, Fairfax, Va., 6.74%; and GTE FCU, Tampa, Fla., 6.799%, said SNL Financial. (See SNL Financial chart, "U.S. credit unions with lowest reward credit card rates.)

Three banks in Louisville, Ky.; Warren, Pa.; and Columbus, Ga., tied for the lowest rate among banks and thrifts: 7.24%

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Platinum credit card rates for the 15 credit unions with the lowest rates ranged from 3.25% to 6.25%. That compares with banks and thrifts' lowest rates of 5.15% to 7.25%. Credit unions with the lowest platinum card rates were Educational Systems FCU, Greenbelt, Md., with 3.25%, followed by Town & Country FCU, South Portland, Maine, with 3.99%; Energy One FCU, Tulsa, Okla., with 4.25%; Sandia Area FCU with 4.99%; and San Francisco (Calif.) FCU with 5.15%. (See SNL Financial chart: U.S. credit unions with lowest platinum credit card rates.)

First Tennessee Bank N.A. of Memphis, Tenn., had the lowest rate among banks and thrifts, at 5.15%. Three other banks offered rates under 6%.

The data are based on regulatory filings for the quarter ended March 31 and are rates shown for the most creditworthy borrowers, said SNL Financial.

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The SNL information is just part of the story, however. In addition to providing lower interest rates on outstanding balances, credit unions also charge lower annual fees and lower late fees, according to rate and fee data on  Informa Research Services.

See Informa's Credit Card Products chart (right)  for a comparison of rates, annual fees, and maximum late fees for credit unions and banks in platinum cards and reward cards. Credit unions are lower on all fees as well as interest rates.

A consumer who has a platinum card carrying an average $7,500 balance and who is late on five payments will spend about $230 less per year at a credit union than at a bank, on average," said Mike Schenk, CUNA vice president of economics and statistics.

"A consumer who has a reward card carrying a similar average $7,500 balance, and who is late on five payments, will spend about $420 less per year at a credit union than at a bank, on average," he added.

CUs raise 200K for Boston Childrens Hospital

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BURLINGTON, Mass. (8/1/12)--More than 100 Massachusetts credit union officials took to the golf links in an event organized by EasCorp, wrapping up a year of fundraising to support Boston Children's Hospital as part of the Credit Union Kids at Heart program. Credit unions contributed $200,000 to the hospital in 2012.

Kayla Biagotti, seated, and her mother, Kris Biagiotti, plan to run the 2013 Boston Marathon together next spring as the marathon's first mother-daughter team, with support and encouragement from credit unions in Massachusetts. Pictured with them is Kris Biagiotti's finance, Brian Bridges.  (Photo provided by EasCorp)
t the event, EasCorp announced that 17-year-old Kayla Biagiotti, a life-long Children's Hospital patient and Kids at Heart partner, and her mother, Kris Biagiotti, will compete as the first mother-daughter team to run the 2013 Boston Marathon together. Kris will push Kayla in a specially designed wheelchair for the entire marathon--26.2 miles. They will rely on support and encouragement from the credit union community to race into history, said EasCorp.

The Biagiottis have been part of the Kids at Heart Program since Kayla was eight years old. To ensure that Team Biagiotti has the best and safest equipment, credit unions raised funds within a week for a $4,000 custom-built wheelchair. They will debut the new chair on Sept. 30, when they compete in the Rockfest Marathon in Hampton, N.H., in order to qualify for the Boston Marathon.

The Credit Unions Kids at Heart program began in 1996 with a small group of Massachusetts credit unions and now includes 36 sponsors from across the country. Along with the invitational golf tournament, credit unions sponsor runners in the Boston Marathon each spring and host fundraisers to benefit the hospital.  Since the program's inception, the credit union community has raised more than $3.5 million for the hospital.