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Auto loan originations for Q1 up 20

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ATLANTA (7/7/11)--Auto loan originations for first quarter 2011 rose 20% over originations during first quarter 2010, according to Equifax's May 2011 National Credit Trend Report. While that is a good trend, credit unions will need to improve their share of the auto loan market--what historically has been termed their bread and butter. Credit unions' new-auto loan balances declined 16.5% in 2010, while used-auto loan growth increased modestly (3.4% ), says Credit Union National Association's U.S. Credit Union Profile Year-End Summary for 2010. Last year, credit unions' market penetration was 5% for new-auto loans and 11.4% for used-auto loans. Yet, 94.7% of credit unions offered new-auto loans and 95.7% offered used-auto loans last year. In March 2011, auto loan originations nationwide represented $1.8 million, the largest monthly total since summer 2008, said the report from Equifax, a credit information solutions provider. That total eclipsed the $1.6 million monthly totals driven by the "Cash for Clunkers" program in summer 2009. During first quarter, lenders made $87 billion in new-auto loans--a 21% increase over the loans in first quarter 2010. For March, loan amounts totaled $33.6 billion, up from $30 billion in the same month last year. The loans continue to approach pre-recession lending levels for $34.7 billion in March 2007. Other findings among Equifax's statistics for March:
* Average auto loan amounts among all borrowers were relatively unchanged from March 2010. Credit unions, banks and savings and loans originated loans averaging $18,661, compared with $18,463 in March 2010. Auto finance companies originated an average $19,013 loan, compared with $19,236 for March last year. * Average new-auto loan payments among all borrowers are slightly lower than the same period's averages in 2010. Borrowers at credit unions and other financial institutions average a $366 payment, compared with $377 in March 2010. Auto loan companies averaged $397 versus $404 in March 2010. * Average loan amount for prime borrowers is about equal to or slightly higher than pre-recession levels. * Auto delinquencies and write-offs are approaching pre-recession levels , with both continuing to improve in 2011.
"While some sectors of the economy--most notably housing--continue to struggle, the auto lending sector has displayed positive gains on loosening of credit to both prime and subprime borrowers paired with improvements in consumer payment behavior, which is reflected in the declining number of auto loan delinquencies," said Michael Koukounas, senior vice president of special client services at the Atlanta-based Equifax. The study is based on data from more than 55 million consumers and 81 million businesses worldwide.

Pedestrian killed in CUs parking lot

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KOKOMO, Ind. (7/7/11)--A pedestrian crossing a credit union's parking lot in Kokomo, Ind., was killed Monday morning when a driver lost control of her pickup truck after it left the drive-through lane. Kelsey R. Comer, 23, of Monticello, was killed just after 10:30 a.m. Monday as she walked in the parking lot of Financial Builders CU, according to several news reports (Kokomo Perspective.com, theindychannel.com and WISH TV.com July 5). The driver of the pickup truck, Blanche Stewart, 81, of Kokomo told police she had left the drive-through lane and was westbound in the lot when she lost control of the truck and hit a parked van, the credit union building, and Comer, who died at the scene.

MCUA board seats new officers

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ST. LOUIS (7/7/11)--The Missouri Credit Union Association (MCUA) board of directors finalized its executive team at its annual planning session by naming Mike O’Brien, senior vice president and chief marketing officer at St. Louis Community CU, as its secretary, and Rick Nichols, president of River Region CU, Jefferson City, as its treasurer. They join: Chair--Dennis Pierce, president, CommunityAmerica CU, Lenexa; First Vice Chair Brian Eyestone, president, Southpointe CU, St. Louis; and Second Vice Chair--Judy Hadsall, president, CU Community CU, Springfield. The board spent two days in St. Louis discussing the future of credit unions in Missouri, and the role MCUA will play in assisting them. Discussion included regulatory and legislative concerns; economic conditions and the financial health of credit unions; continuing education and professional development (The Missouri difference July 5). “The planning session this year put a spotlight on what the association can do to help keep credit unions a vibrant, growing consumer-friendly banking choice for Missouri citizens,” said Mike Beall, MCUA president. Other 2011 MCUA Board of Directors include:
* Tony DiGiovani, president, CSD CU, Kansas City; * Carolyn Ross, president, Northland Teachers Community CU, Gladstone; * Bob Eike, president, Century CU, St. Louis; * Louie Delk, president, Conservation Employees CU, Jefferson City; * Kirk Mondy, president, Poplar Bluff (Mo.) FCU; * Coby Lamb, president, Northwest Missouri Regional CU, Maryville; * Ex Officio--Stan Moekli, president, Electro Savings CU, St. Louis.

CUMIS lawsuit CU staffer fraud came before bankruptcy

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SPRINGFIELD, Ill. (7/7/11)--CUMIS Insurance Society Inc., a provider of employee fidelity insurance to credit unions, and which also is part of CUNA Mutual Group, has filed a lawsuit to prevent a former credit union staffer convicted of fraud from discharging debt under bankruptcy. CUMIS is trying to recoup insurance money paid to Staley CU, Decatur, Ill., stemming from her fraudulent actions while employed at the credit union, saying the fraudulent actions occurred before she declared bankruptcy. Plaintiff CUMIS filed suit Friday against defendant Diane Shelton, a former loan officer at the credit union, in U.S. Bankruptcy Court for the Central District of Illinois, in Springfield. The insurance company paid nearly $1.7 million to Staley CU as a result of alleged fraud perpetrated by Shelton and two others--Terry Hart, a mortgage broker, and Mark Brown, an appraiser. The three allegedly conspired to inflate values on homes for the purpose of causing Staley to issue purchase-money mortgage loans using the homes as collateral, according to the complaint. CUMIS issued an employee fidelity bond to Staley that insured against dishonesty by Staley employees, including Shelton, said the complaint filed. When Staley found out about the fraudulent loan mortgage scheme, the credit union terminated Shelton’s employment and conducted an investigation into her actions. Subsequently, Shelton pleaded guilty to the charges, was convicted, and sentenced to more than 12 months in prison. After Shelton reported to prison March 2, she filed for a Chapter 7 bankruptcy and is looking to discharge all her debts. Co-defendant Brown entered into a plea agreement with the U.S. attorney and also is in prison. Co-defendant Hart committed suicide on the day he was to be sentenced, according to the court documents.

CUNA cites rates in articles picked up by media

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MADISON, Wis. (7/7/11)--Credit unions offer better interest rates than banks, the Credit Union National Association (CUNA) said in an article that was picked up by several newspapers nationwide. The article, “Shoestring Living: Banks vs. Credit Unions,” which was distributed by Gatehouse News Service, discussed some of the general differences--nonprofit, member-owned--between credit unions and banks. The last point of comparison concerns interest rates. “It all boils down to dollars and cents, doesn’t it?” the article said. “According to the Credit Union National Association, loans through credit unions have lower interest rates than banks across the board, while credit unions boast higher savings-related interest rates.” The article mentioned that credit unions now can compete with banks on programs for online bill pay, child and teen banking, and special savings accounts--such as those for holiday savings and high school prom.

Missouri governor vetoes duplicate CU bill

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JEFFERSON CITY, Mo. (7/7/11)--Missouri Gov. Jay Nixon vetoed a credit union bill in the state House that was nearly a duplicate of a bill in the state Senate, to avoid “ambiguity” (Missouri News Horizon July 5). Nixon vetoed House Bill 465, but signed Senate Bill 306 into law Tuesday. “The only difference in the two bills is the advice and consent of the Senate in the Senate bill for approval of the director of credit unions,” Peggy Nalls, senior vice president of public legislative affairs for the Missouri Credit Union Association (MCUA), told News Now. “There was no substantive change between the two bills; it was just that the House bill didn’t have that provision so [the state government] chose the Senate bill. “We supported it, and the state Credit Union Division supported it, so it was a relatively easy thing to do,” Nalls added. The bill was introduced to make clearer some language in the Credit Union Act, including:
* Clarification that the Credit Union Division is under the Department of Insurance and that the director is appointed by the governor; * Confidentiality of exam records; * Due process for removal of credit union directors and officers; * The lifting of the $25,000 limit for volunteer unsecured loans; * The removal of the outdated reserve transfer calculation; and * The allowance for electronic balloting in mergers and conversions (The Missouri difference July 5).
All provisions of the new language are effective Aug. 28, said MCUA. The Missouri Credit Union Division, in a communication to all Missouri state-chartered credit unions, said it will soon distribute guidance on how the bill will affect credit unions

MnCUN international visitors meet on CU difference

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ST. PAUL, Minn. (7/7/11)--The Minnesota Credit Union Network (MnCUN) welcomed participants of the International Visitor Leadership Program (IVLP) to its St. Paul office Friday.
Click to view larger image The Minnesota Credit Union Network (MnCUN) hosted participants of the International Visitor Leadership Program Friday. Mark D. Cummins (left), MnCUN president/CEO, provided participants an overview of the credit union difference and how credit unions are structured during their visit to MnCUN’s office.
Click to view larger image Hiway FCU President Jeff Schwalen (second from right) described the credit union cooperative model, how profits are passed on to members, and the benefits of shared branching to participants of the International Visitor Leadership Program during the group’s visit to the Minnesota Credit Union Network’s office. (Photo provided by the Minnesota Credit Union Network)
Seven professionals--from Argentina, Bulgaria, Israel, Malawi, Oman, the People’s Republic of China and Sri Lanka--visited MnCUN to learn more about credit unions, their role in communities, and initiatives for financial recovery. The purpose of the group’s nearly three-week visit to the U.S. was to investigate how other countries can help integrate of emerging markets into the world economy, to learn about efforts to strengthen the global economy, and to gain a better understanding of the relationship between U.S. and foreign financial systems. Participants learned the role credit unions play in the U.S. financial industry. MnCUN staff provided an overview of the network’s purpose and explained the differences between credit unions and banks. The IVLP participants asked how the economic crisis affected U.S. financial institutions. Mark Cummins, MnCUN president/CEO, explained that while a few credit unions were severely affected during the financial crisis, the impact was more greatly felt within the banking industry. Credit unions now have the opportunity to expand their market share and grow business lending, an area where banks continue to struggle, Cummins said. The seven visitors asked about how credit unions are regulated and how they operate. Jeff Schwalen, president of Hiway FCU, St. Paul, answered questions and talked about the credit union cooperative model, how profits are passed on to members and the benefits of shared branching. Following its visit to MnCUN, the group visited South Metro FCU in Prior Lake, Minn. to learn more about credit union operations and the services they offer. During their U.S. trip, IVLP participants also visited New York, Boston and Charlotte, N.C.

NYU CU uses grant to reach low-income students

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NEW YORK (7/7/11)--Through a grant from the National Credit Union Foundation (NCUF), $13 million-asset New York University FCU, New York, is offering a financial education program to help low-wealth students reach their financial goals.
Click to view larger image Through a grant from the National Credit Union Foundation, New York University FCU offers “Making Ends Meet,” a financial education program to help low-wealth students reach their financial goals. Here, university students help Mira Ness (top right), president/CEO of the credit union, with financial education seminars during the NYU’s “welcome week.” (Photo provided by New York University FCU)
The New York Credit Union Foundation also helped fund NYU FCU’s program. Since starting the program in the 2010-2011 school year, more than 5,000 students have attended one of the credit union’s “Making Ends Meet” seminars. The credit union’s delinquency and overdrafts have also decreased since the program’s inception. “Making Ends Meet” leverages targeted group financial education using the National Endowment for Financial Education curriculum. The content has been modified to change behavior related to account overdraft and late loan payments and to strategically deploy one-on-one coaching to cease the behavior and move students into credit and asset building upon graduation. “Ironically, few college students receive good financial education,” said Christopher Morris, NCUF director of communications. “Credit unions are the ideal institution to help students achieve financial freedom and NYU FCU’s program is evidence of that.” Students frequently face the stress of credit card debt and are often unequipped to handle their own personal finances. The number of 18- to 24-year-olds declaring bankruptcy has increased 96% in 10 years, according to the Richmond Credit Abuse Resistant Education (CARE) Program. NYU FCU’s program included classroom-style learning and one-on-one coaching in tandem with waived fees for participation, while working with the lifestyle of the college student. During the school year, the credit union hosted financial education seminars for the freshmen students on topics such as budgeting, credit reports and credit cards. NYU FCU also saw financial results and increased membership. The credit union’s delinquency decreased to 0.37% from 0.72% from December to March. Overdraft fees decreased to $625 from $980 and the credit union opened more than 200 student checking accounts.

Texans CUSO wins right to sell development it financed

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DALLAS (6/7/11)--A federal court in Dallas has granted the mortgage lending credit union service organization (CUSO) of Texans FCU the right to sell a real estate development it financed with a $31 million loan. The CUSO, Credit Union Liquidity Services LLC (CULS), was granted its motion to dismiss an appeal from Mariah Bay Leasing Corp., which had filed for bankruptcy under Chapter 11 on Feb. 19, 2010, by the U.S. District Court for the Northern District of Texas in Dallas. Mariah Bay had appealed after the U.S. Bankruptcy Court, also in Dallas, denied its reorganization plan. The case centers around a retail development in Rockwall, Texas, which CULS financed. After Mariah Bay filed for Chapter 11 reorganization under the U.S. Bankruptcy Code, it filed an amended version of its reorganization plan. CULS had the first lien on the property, rent, proceeds and profits generated by the property, according to the court records. On Aug. 2, 2010, CULS moved to convert Mariah Bay's bankruptcy case to a liquidation under Chapter 7. Mariah Bay failed to confirm its reorganization plan on Oct. 3, 2010, and CULS foreclosed on the property. The U.S. Bankruptcy Court for the Northern District of Texas granted the motion to convert the case to a Chapter 7 and a Chapter 7 trustee assumed management . On Oct. 5, 2010, the court also denied confirmation of Mariah Bay's Chapter 11 reorganization, and Mariah Bay appealed. CULS filed its motion on March 22, 2011, to dismiss the appeal on the grounds of ripeness (the appeal improperly concerns a non-final order), mootness (the conversion of the underlying bankruptcy case to Chapter 7 renders the appeal unnecessary or the property has been foreclosed and is no longer subject to appeal) and standing (that the Chapter 7 trustee alone could appeal the decision). In its motion to dismiss, the court said that "dismissal is warranted on the grounds of mootness alone and thus does not address the parties' arguments as to standing or ripeness." In the decision, U.S. District Judge Jane J. Boyle said that "while Mariah Bay claims that the Bankruptcy Court's quickly converting to Chapter 7 denied it the opportunity to amend its Chapter 11 reorganization plan, it nevertheless did not appeal the conversion order." She said the "proper course would have been for Mariah Bay to appeal not only the denial of its reorganization plan, but also the granting of CULS' motion to convert and motion to lift stay order. However, because Mariah Bay had the opportunity to resist conversion through objection or appeal and did not, any claim based on the denial of its Chapter 11 reorganization plan is moot. "Mariah Bay's appeal of the denial of the reorganization plan is moot on either of two grounds: (1) Mariah Bay's bankruptcy case was permanently converted from a Chapter 11 reorganization case to a Chapter 7 liquidation case, making confirmation of its reorganization plan impossible; and, alternatively, (2) Mariah Bay no longer owns the real property the reorganization plan was based upon, effectively making the plan impossible to implement." Texans CU was placed into conservatorship by the National Credit Union Administration in April.

CU System briefs (07/06/2011)

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* FRESNO, Calif. (7/7/11)--Carolyn Jean Jones, 45, a former mortgage servicing representative at Bakersfield, Calif.-based Kern Schools FCU, was sentenced to 12 months in prison for embezzling more than $250,000 from the credit union in 2003, according to U.S. Attorney Benjamin B. Wagner. U.S. District Judge Anthony W. Ishii also ordered she pay restitution of $245,000 and be under supervised release for 36 months. Jones was employed in the credit union's Home Loan Processing Center. From March through November 2003, she opened fraudulent lines of credit with existing members' information and diverted funds from those lines into accounts she controlled (US Fed News July 5) … * SOUTH BEND, Ind. (7/7/11)--Tremaine Grant, 26, one of three men who robbed a South Bend, Ind.-based Teachers CU branch in 2009, was sentenced to almost 18 years in federal prison. He pleaded guilty to bank robbery with a deadly weapon and carrying a firearm during a crime of violence for his role in the Dec. 7, 2009 robbery. Grant and co-defendants Armand White, 24, and Dion Davis, 27, stole more than $65,000 during the heist. They admitted to accosting a credit union employee she arrived for work, pointing a gun at her and forcing her to let them into the credit union, where two other employees were already at work. They pointed the gun in each employee's face, ordered them to the floor and threatened to kill them. White, who had no criminal history, was sentenced to 10 years in prison, and Davis, who had previous burglary and drug convictions, received 12 years in prison. Grant's sentence was longer because he had seven prior felony convictions, including two prior robberies, said U.S. District Court Judge Robert L. Miller (South Bend Tribune July 2) … * ST. LOUIS (7/7/11)--The Missouri Credit Union Association (MCUA) will host a meeting for credit unions with U.S. Sen. Claire McCaskill (D-Mo.) at McCaskill's request in St. Louis on July 18, said MCUA. The 10:30 a.m. CT meeting is key to credit unions' efforts to build a stronger relationship with the senator and move forward on issues important to the future of credit unions. After the meeting, MCUA will host a discussion on the 2012 U.S. Senate race in the state (The Missouri Difference July 5) … * ROCK HILL, S.C. (7/7/11)--1st Patriots FCU has named Tami Settlemyer as its new CEO, the Rock Hill, S.C.-based, $29 million asset credit union announced last week. Settlemyer succeeds E. Diane Catoe, who retired on March 31. Settlemyer has more than 20 years in the banking industry. She worked 10 years at Lancaster-based Founders FCU, receiving a Best All Around Branch Operations award five consecutive years and Outstanding Regional Manager of the Year award for four consecutive years (HeraldOnline.com July 3) … * CAPITOLA, Calif. (7/7/11)--Bay FCU employees raised $24,451 to help defer hospitalization and health care costs for local children through the Children's Miracle Network Hospitals, announced the Capitola, Calif.-based,over-$600 million asset credit union. One hundred percent of Bay Federal's donations will treat children through programs at Salinas Valley Memorial Hospital, including the hospital's community outreach dental and immunization programs. Employees participated in a month of fundraisers including a silent auction, pizzathon at a local pizzeria, and raffling chances to throw a pie at their favorite manager. The amount includes a $10,000 "Miracle Match" grant from the Co-op Network. "Many of our employees are parents, so the needs of ill children are particularly close to their hearts," said Bay Federal President/CEO Carrie Birkhofer … * PITTSFIELD, Mass. (7/7/11)--Pittsfield, Mass.-based Greylock FCU
Click to view larger image Click for larger view
celebrated growth by welcoming its 70,000 member, Andrew Bravo, 18, a graduate and school valedictorian of Lenox Memorial. Bravo opened his accounts at Greylock's Lee branch. Senior Vice President Pete Mirante presented a $1,000 check to Bravo to support his college education. "When we realized our 70,000th member was a college-bound senior, we felt this $1,000 award was an appropriate way to mark the occasion," Mirante said. Bravo joined during National Credit Union Youth Week in April. The $1.3 billion asset credit union's Youth Week promotion attracted more than 60 members and resulted in more than 100 accounts opened. Only 229 credit unions have reached the 70,000 member milestone, said Executive Vice President John Bissell. From left are Mirante, Bravo, and Member Service Officer Mindy Brown (Photo provided by Greylock FCU) …

Newtek touts lifting MBL on iFox Biz Newsi

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NEW YORK (7/7/11)--Barry Sloane, president/CEO of The Small Business Authority, appeared Thursday on Fox Business News as part of its series “The Government is Killing My Business” to discuss how lifting the credit union small business lending cap could infuse billions of dollars into the nation’s economy. The Small Business Authority, powered by Newtek is a CUNA Strategic Services provider. The Credit Union National Association (CUNA) and credit unions are pressing Congress to increase credit unions’ member business lending cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said. Sloane cited the $13 billion figure and emphasized the infusion would be free of government bailout funds or taxpayer subsidies. “That would be an incredible stimulus to the economy,” Sloane said. Despite the potential positive effects, banks have been lobbying to keep the credit union MBL cap at its current 12.25%, he said. The reason for the strong push-back: An increase in the credit union cap would represent a competitive threat to banks, Sloane said. The financial crisis showed that credit unions with the same exposure to residential mortgages as banks were at least as well-equipped manage the risk, Sloane said. Among the reasons for that was effective regulation by the National Credit Union Administration, he said. “Credit unions should be allowed to leverage their capital and deploy the dollars they have in small- and medium-sized business loans across the U.S., Sloane said. “Our economy has capital that can be used to go into small businesses without bailouts or subsidies.”

MWCUA launches new branch website

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PHOENIX, DENVER and CASPER, Wyo. (07/7/11)--Mountain West Credit Union Association, the recently merged tri-state association for Arizona, Colorado and Wyoming credit unions, has unveiled its brand identity and launched a new website. The new website is created to be a central location for all the communication needs among the association and member credit unions. Upon first visiting the new website, all members will be asked to create a log in and password to access member information. Media, lawmakers and consumers can browse public areas of the website for more information about the association and the credit union difference. To see the new logo, use the link.