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CU System briefs (07/06/2012)

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  • CHARLOTTESVILLE, Va. (7/9/12)--For the third consecutive year, the U.S. Small Business Administration (SBA) has recognized UVA Community CU as the Top Credit Union in the Richmond, Va., District for fiscal year 2011. UVA Community had the highest number of loans originated and closed in Virginia, with the exception of the Washington, D.C., metropolitan areas. "Credit unions are a critical source for small business lending today," said Jayne E. Armstrong, district director at SBA's Richmond District office. "UVA is making a difference by expanding financing opportunities to its members interested in starting and growing their businesses." UVA Community CU President/CEO Alison DeTuncq noted that "Virginia's economic recovery depends on the ability of small businesses to gain access to the capital they need to grow and prosper."  From left are Bridget Bean, acting SBA regional administrator, Region 3; Michael D. Lyster, vice president of business services at the credit union; and Armstrong. (Photo provided by UVA Community CU)  …
  • RALEIGH, N.C. (7/9/12)--State Employees' CU (SECU) of North Carolina, which has been providing the employees of its state and their families with consumer financial services for 75 years, recently partnered with Haven House Services in Wake County to offer quarterly financial education sessions to at-risk youth ranging from 10- to 23-years old. The sessions will address subjects ranging from budgeting to credit needs and credit reports to deposit services. Haven House Outreach Coordinator Kelsey D. Mosley said many of the young people associated with Haven House have limited education and little financial experience. "We hope the instruction provided through this partnership will help lead them to sustaining positive lives as they continue on their own," she said in a release announcing the partnership. Ann Speck, vice president of SECU's Hillsborough Street branch in Raleigh, said, "SECU places a strong emphasis on financial literacy and feels it's imperative this education begin very early. SECU is happy to assist Haven House in helping youth become successful adults." …
  • SCRANTON, Pa. (7/9/12)--A third Scranton, Pa.-area credit union is offering assistance to employees of the city of Scranton after the mayor unilaterally reduced their salaries to minimum wages.  Penn East FCU, a $127 million asset credit union in Scranton, said Thursday that city employees who are members of the credit union and who have existing auto or personal loans may skip a payment during July and August (The Times-Tribune July 5). Members can also apply for a Salary Continuation Loan that would have no interest and no payments through Sept. 28. They also can refinance auto loans from other financial institutions without interest or payments through Sept. 28, and receive 1% of the refinanced amount, up to $100 cash, at closing. News Now reported on two other credit unions--Tobyhanna FCU, Scranton, and Cross Valley FCU, Wilkes-Barre--that had announced aid to the city employees because of the salary cutbacks …

CUs can help women in gender gap on fin ed

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EL SEGUNDO, Calif. (7/9/12)--The gender gap in financial literacy is widening, with women lagging behind men in two areas, according to new research. That sounds like an opportunity for credit unions to update or broaden their financial education strategies to assist in educating their members.

A study of employee financial issues by El Segundo, Calif.-based Financial Finesse, which provides workplace financial wellness programs, discovered two pervasive areas critical to women's ability to achieve financial security:

  • Basic money management, the foundation of all planning.  Roughly  43% of women surveyed reported they have an emergency fund to cover unexpected expenses, while 63% of men surveyed do. Fifty-two percent of women (compared with 71% of men) said they were comfortable with the amount of non-mortgage debt they had.
  • Investing knowledge and confidence, crucial to women's ability to build their wealth. Roughly 37% of women surveyed (compared with 57% of men) said they have taken a risk-tolerance assessment and are aware of their conservative, moderate, or aggressive investment strategy. And 25% of women reported rebalancing their investment accounts to keep their asset allocation on track, while 49% of men reported doing so.
The gap was most narrow in two areas that tend to be more proactive: retirement planning, with women showing virtual equality with men in retirement plan participation, and estate planning, an area in which women tap their natural skills, said Liz Davidson, CEO and founder of Financial Finesse.

The gap between the genders is widening in nearly every area of financial planning. "Women should actually be the ones spending more time and putting more focus on improving their finances because they face so many more challenges than men in financial planning," Davidson added. Women live about five years longer than men on average, and 90% of women will be solely responsible for their finances at some point in their lives. They also make less money over their lifetime.

Courtney Moran, executive director of the Texas Credit Union Foundation, said she is concerned about the data related to saving emergency funds. "Having adequate savings to cover unexpected emergencies, as well as plan for short- and long-term goals, is essential to achieving financial security and building wealth," she told the Texas Credit Union League's LoneStar Leaguer (July 6). "We must simply get in the habit of paying ourselves first," she added.

Sharon Moore, CEO of $252 million asset City CU, Dallas, told the league her credit union is helping consumers improve their personal financial positions. Since 2007, it has hosted Dollars & Sense on WFAA's "Good Morning Texas" program, where the credit union provides financial advice and information to a broad audience.

About the gender gap study's findings, Moore said, "I see this as a real opportunity for the credit union community to intensify our efforts to ensure everyone in our communities has access and the opportunity to learn important financial information that will help them build wealth and achieve financial security."

Accountant pleads guilty in St. Paul Croatian fraud

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CLEVELAND (7/9/12)--A Cleveland accountant  pleaded guilty Thursday in a federal court  to bank fraud and money laundering charges stemming from a fraudulent loan scheme that contributed to the collapse of Eastlake, Ohio-based St. Paul Croatian FCU.

Zrino Jukic, 41, is charged with providing false information in 11 loan applications that resulted in $1.7 million in proceeds, which Jukic allegedly invested in financier A. Eddy Zai's business ventures (The Plain Dealer July 5). Jukic was named in February in a 34-count bank fraud indictment involving Zai, who is accused of stealing $16.7 million in fraudulent loans from the credit union. Zai allegedly was recipient of the largest number of fraudulent loans, according to court documents.

So far, 19 people have been charged in the fraudulent loan schemes that caused one of the biggest credit union failures in U.S. history. St. Paul Croatian FCU was placed into conservatorship by the National Credit Union Administration on April 23, 2010 and was shuttered the following May 1. Its collapse cost the National Credit Union Share Insurance Fund about $170 million.

The credit union's former CEO, Anthony Raguz, pleaded guilty to issuing the loans and accepting more than $500,000 in bribes, kickbacks and gifts from the borrowers. More than 1,000 fraudulent loans, totaling more than $70 million, were made to 300 account holders (News Now May 14 and 31).

Andrews FCU launches shared-branching initiative

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SUITLAND, Md. (7/9/12)--Andrews FCU, a $780 million asset credit union in Suitland, Md., has launched a Shared Branching initiative, with six of its U.S. branches and six overseas branches joining the network.

Three of Andrews FCU's New Jersey branches will participate in the Shared Branching Network. Also, three branches in Germany, two in Belgium and one branch in The Netherlands will join.

Through shared branching, credit unions nationwide share facilities to allow members to access services as if they were at their home credit union.

Worldwide foundations online auction goes live today

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MADISON, Wis. (7/9/12)--Worldwide Foundation for Credit Unions, the charitable arm of World Council of Credit Unions (WOCCU), opened bidding on its online charity auction today.

Bidding will take place online at www.biddingforgood.com/woccu through July 17. All proceeds will be used to expand WOCCU's credit union development work worldwide.

The online format allows everyone to bid, including friends and family outside the credit union industry.

This year's auction features hundreds of items from all over the world, from sports tickets, artwork and jewelry to one-of-a-kind experiences and travel packages.

"The credit union industry really stepped up this year and donated some extraordinary items," said Crissy Cheney, wife of Credit Union National Association President/ CEO Bill Cheney. She is co-chairing the auction this year with Judy Ensweiler, wife of Texas Credit Union League President/CEO Dick Ensweiler. "By bidding, you'll not only get something great, but you'll be supporting WOCCU's development work and expanding credit union access to people worldwide."

Auction items were donated by credit unions, state credit union leagues, credit union service organizations and vendors from throughout the worldwide movement. Donations can still be made. Donors are encouraged to post their items online rather than take them to the World Credit Union Conference in Gdańsk, Poland, since space at the conference is limited.

For more information, use the link, contact Valerie Breunig at 608-395-2055 or e-mail auction@woccu.org.

Bankruptcy filings drop 14 in first half of year

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ALEXANDRIA, Va. (7/9/12)--The number of U.S. consumers and businesses filing for bankruptcy dropped 14% during the first half of 2012, on pace with ending the year at the lowest level since before the financial crisis in 2008, according to data from Epiq Systems Inc. and the American Bankruptcy Institute (ABI).

Noncommercial filings during the period totaled 601,184, a 13% drop from 691,902 in the first half of 2011. Commercial filings during the first half of 2012 totaled 30,946, down 22% from the 39,598 filings for the same period in 2011 (Reuters July 5).

Chapter 11 filings were down 12%, to 5,313 filings from 6,070 filings during the first six months of 2011.

The statistics mean that "we are on pace for perhaps the lowest total new bankruptcies since before the financial crisis in 2008," said ABI Executive Director Samuel J. Gerdano. "With sustained low interest rates and weak consumer spending, we expect bankruptcies to stay at relatively low levels through the end of 2012."

June saw 99,057 total bankruptcy filings, an 18% decrease from June 2011's total of 120,698.  Noncommercial filings during the month totaled 94,437, a 17% drop from June 2011.  Total commercial filings were 4,620, a 29% decrease from June 2011. Chapter 11 filings dropped 28% from June 2011 to June 2012, to a total 718 filings.

Credit unions have seen a slight decrease so far this year in the loan delinquencies as a percent of total loans, according to the Credit Union National Association's Monthly Credit Union Estimates for May, the latest data available.

In May 2012, credit unions had 1.44% of total loans as delinquent, compared with 1.42% in April, and 1.44% in March.  In May 2011, the figure stood at 1.62% and fluctuated the rest of the year between 1.58% and 1.60%.

Proposed rules allow Canadian CUs to expand nationwide

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OTTAWA, Canada (7/9/12)--New regulations will allow Canadian credit unions to expand beyond provincial borders and compete with big banks, Canada's federal government said Friday.

The announcement was made Thursday by Canadian Federal Finance Minister Jim Flaherty, as the government released proposed regulations that could help create large credit unions and allow them to level the playing field with Canadian banks (The Globe and Mail and July 6).

"Credit unions are used by millions of Canadians for financial services similar to those offered by large banks," Flaherty said in a statement. "The proposed regulations will give credit unions the flexibility they require to grow beyond their provincial borders … as a result of these changes, [they] will be able to improve the services they offer."

Under the proposed regulations, the government would provide the option to become federally incorporated to provincially regulated credit unions, which would give them the means to better conduct business across provincial borders (Postmedia News July 6).

"Credit Union Central of Canada supports the availability of a federal option for credit unions," Gary Rodgers, vice president, Financial Policy, Credit Union Central of Canada, said in a statement. "We welcome today's announcement as another step toward enabling credit unions to choose a new option to address growth opportunities and enhance service to their members."

Canada's financial industry will have 30 days to comment on the proposed regulations, which were first announced and considered in a 2010 budget. 

If the proposal takes effect, credit unions would be placed under the purview of the Office of the Superintendent of Financial Institutions.

Global CU membership climbs to 196M WOCCU

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MADISON, Wis. (7/9/12)--The worldwide credit union movement added eight million new members in 2011, reaching 196 million members from 100 reporting countries, according to World Council of Credit Unions' (WOCCU) just-released 2011 Statistical Report.

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The annual study revealed that the number of members grew 4.3% from 188 million members reported in 2010, while the number of credit unions fell 3.5% to 51,103 in 2011 from 52,945 in 2010. The decline is an indication of the continuing trend of smaller institutions merging into larger credit unions worldwide, according to Brian Branch, WOCCU president/CEO.

"In countries around the world, smaller credit unions are merging to realize greater economies of scale and develop capabilities to deliver more services to members," Branch said. "The dramatic upturn in the number of members shows that credit unions are becoming more influential, and consumers are finding them to be better alternatives than many for-profit financial institutions."

Worldwide, credit union loans increased to $1 trillion in 2011 from $960 billion in 2010; reserves jumped to $141.3 billion from $131.7 billion; and global credit union assets grew to $1.6 trillion from $1.5 trillion. Savings volume declined slightly to $1.22 trillion from $1.23 trillion.

Global member penetration rose to 7.8% in 2011 from 7.5% in 2010.

This is the 40th consecutive year WOCCU has collected statistics on the international credit union movement. WOCCU reports data based on country responses to its annual survey and does not make estimates for non-reporting countries. The report, issued this year in electronic format, provides the most comprehensive data on the global credit union movement available and is cited widely by governments, international institutions and analysts as an expert resource, WOCCU said.

To access the report, use the link.

Maine CUs added 3300 new members in 1Q

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PORTLAND, Maine (7/9/12)--Maine credit unions added 3,300 new members in the first quarter, bringing total credit union membership in the state to 620,313 as of March 31.

The state's credit unions now have combined total assets of $5.8 billion, an increase of 3.3% from year-end, while deposits grew to $4.98 billion, a 4.3% jump for the quarter, said the Maine Credit Union League (Weekly Update July 6).

Outstanding loans increased by $11 million to $3.67 billion for the quarter. Loan originations at Maine credit unions and CUSO Mortgage Corp. increased by 34.7% over the same period in 2011--10% above the national average.

Much of the loan growth was fueled by a 70% increase in first mortgage originations from a year ago, the league said. Maine credit unions also experienced a 10% increase in member business loans over March 2011 levels.

"Maine credit unions continue to experience consistent growth, which has a positive economic impact on the lives of members and communities," said John Murphy, the league's president. "We are also gratified to see that more consumers continue to turn to credit unions for financial services through new relationships or expanding existing relationships."