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CU System Archive

CU System

Atlantic City Press outlines CUs muni-deposit plusses

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ATLANTIC CITY, N.J. (7/8/10)--The New Jersey Credit Union League outlined the benefits of allowing credit unions in the state to accept municipal deposits as proposed in state legislature, in an article in the Press of Atlantic City (July 4) . Paul Gentile, league president/CEO, said diversifying deposits to credit unions from banks along would reduce risk. "If we've learned anything from the economic meltdown, it's that you don't want to have all of your eggs in one basket," he told the publication. Allowing credit unions to accept the deposits would benefit local government entities in these ways, he said:
* Credit unions receiving the deposits would be more likely to make deposited funds available to local businesses and consumers. While banks reduced business lending by 15% in 2009, credit unions increased their small business lending by 11% last year. * Depositors get better interest rates from credit unions, which will benefit the taxpayer, he said.
Liberalizing the deposit act would help the public realize that credit unions are full-functioned financial institutions that almost anyone can join, Gentile said. At least 20 states allow credit unions to be governmental depositories, the article said. About $16 billion is on deposit from various government entities and would be subject to the act. The Senate has passed a bill allowing municipal deposits in credit unions, and a companion bill has been introduced in the state Assembly. It is in the Financial Institutions and Insurance Committee.

Cadillac departs Invest in America

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DETROIT (7/8/10)--Cadillac, as part of its overall brand strategy, no longer will offer discounts on vehicle purchases to credit union members through the Invest in America program. Cadillac has decided to eliminate all incentive programs, the Michigan Credit Union League told News Now. Invest in America provides access to affordable financing options and special discounts for credit union members nationwide. General Motors brands Chevrolet, Buick and GMC will continue to offer discounts to credit union members through the program (The Missouri difference July 2). For more information, use the link.

Pa. CUs 1Q results outpace national CU stats

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HARRISBURG, Pa. (7/8/10)--Pennsylvania credit unions reported good financial performance in first quarter 2010, according to the Pennsylvania Credit Union Association (PCUA). The Pennsylvania Profile, First Quarter 2010 shows Pennsylvania growth rates outpaced national rates for the first quarter and for the 12-month period ending March 31 (Life is a Highway July 7). In the quarter, Pennsylvania credit union membership edged up 0.7%, greater than the national rate of 0.5%, and more than the fourth quarter 2009 increase of 0.4%. The 12-month member growth rate in the state was 2.5%, compared with 1% nationally. “The association’s iBelong campaign is definitely building awareness and strengthening the perception of credit unions,” said Jim McCormack, PCUA president/CEO, in the newsletter. “The ongoing economic challenges and consumer dissatisfaction with big banks are also positioning credit unions with opportunities to build favorable relationships with new members, existing members, and their communities.” Total savings grew 3.6% for the quarter 2010, bringing the rate for the 12-month period ending March 31 to 11%, compared with 6.6% nationally. Regular share accounts grew 7%, with money market shares growth at 6.6%. During the first quarter, Pennsylvania credit unions faced some of the weakest loan demand in more than 60 years, and recorded only 0.1% growth, better than the -1.1% change in national loan totals. Member business loans led loan growth with a 6.6% increase in the first quarter, followed by first mortgages at 3% growth. For the 12-month period, Pennsylvania credit unions outpaced national rates in member business loan growth, 24.9% to 9.1% nationally, and first mortgages, 22.2% to 3.3%. Used-auto loans were strong for the same period, 8.9% growth to 2.8% nationally. First-quarter loan delinquencies stayed at slightly more than 1%. More than 9,000 bankruptcies were recorded during the period in Pennsylvania, up from 6,537 from 2009. The state’s credit union assets grew by 10.6% in the 12-month period, compared to national growth of 4.7%. “Credit unions are prospering through the great recession, but they are also facing a new normal--regulations upon regulations, competition, changes in service delivery and technology, and income challenges--so it’s necessary to reassess and readjust to this new environment in order to successfully survive,” McCormack said.

CUAnswers premiers winning contest video

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GRAND RAPIDS, Mich. (7/8/10)--CU*Answers, a Michigan-based core data processor for credit unions, has unveiled the winner of its third annual video contest. “Your Credit Union is Everywhere” was provided by Farrah Star of Service 1 FCU, Muskegon, Mich. It promotes the convenience of credit union self-service products such as online and mobile banking. Service 1 received $1,500 for the winning entry. The video features an actor wearing a bright green shirt with the words “CREDIT UNION” on the front. The “credit union” accompanies a family through its daily routine and is ready to assist in everything from using a debit card to pay for purchases, showing account balance inquiries on a mobile phone over breakfast, and even sitting in bed with the mother and father, who discuss finances and ask, “I wonder if we can afford this?” CU*Answers premiered the video during its 19th Annual Leadership Event in Grand Rapids. To view the video, use the link.

Filene to study effects of interchange shifts

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MADISON, Wis. (7/8/10)--The Filene Research Institute is launching a survey intended to define the full effects shifting interchange rules will have on credit union operations, and credit unions have until July 16 to participate in the study. The online-only survey is available now for all credit unions. Adam Levitin, professor at Georgetown University Law Center, seeks to understand interchange practices and revenue at credit unions to project how changes in the law could affect non-interest income and profitability at credit unions. Any data provided will be published only in aggregate and will not identify individual credit unions, Filene said. The final financial regulatory reform package, worked out last month by the House-Senate conference committee, includes language that would allow the government to set interchange fees. Credit unions and the Credit Union National Association (CUNA) oppose the regulatory reform bill because of the interchange provisions. Allowing the government to set the fees would have detrimental effects on credit unions’ ability to offer card products and services to members, CUNA has said. The House already has approved the regulatory reform bill, and the Senate is expected to do so when the Congress returns to session after the July 4 District Work Period. Interchange provisions would not only affect how credit unions provide access to members’ accounts, they also would increase costs to credit union members. CUNA and its affiliated credit unions continue to urge legislators to vote no on the current regulatory reform package. To take the survey, use the link.

Madison newspaper CUNA leading voice on interchange

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MADISON, Wis. (7/8/10)--The Credit Union National Association (CUNA) has “emerged as a leading voice of opposition to the financial services reform package, saying the swipe fee provision is onerous enough that the entire bill should be scrapped,” according to Sunday’s The Capital Times, a Madison, Wis.-based paper. In a letter to Congress, CUNA said that imposing a debit card fee limit “upsets the carefully constructed balance that the bill has achieved,” and would significantly harm credit unions and their members, the newspaper reported. The House version of the bill passed late last month excludes some credit unions and community banks with assets of less than $10 billion from the debit card fee limit, the paper said. However, the exclusion is rendered meaningless because of the complex ways interchange fees are calculated, and because there is no mechanism to make sure there will be a separate fee system for large and small users, the CUNA letter said. Therefore, the system eventually would include all cards and hurt the income stream for credit unions, CUNA added. To read the article, use the link.

Death-penalty trial jurors selected trial opens Monday

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DETROIT (7/8/10)--The jury has been selected and the opening statements will begin Monday in a rare trial involving the federal death penalty for the killing of an armored truck guard who was loading cash into an ATM at Dearborn FCU eight and a half years ago. Timothy Dennis O'Reilly, 36, is charged with murdering Norman "Anthony" Stephens during a Dec. 14, 2001, robbery at the credit union's ATM (The Detroit News June 29). O'Reilly and two co-defendants, Norman Herbert Duncan and Kevin C. Watson, will face the death penalty. A fourth defendant, Earl L. Johnson, was sentenced to life in prison after a jury convicted him of conspiracy, bank robbery and aiding and abetting a murder (News Now June 9). The robbery at the credit union's ATM was the first of three similar robberies involving armored trucks. In the last robbery in February 2004, a guard fired back and one robber, Eddie Cromer, died. The credit union robbery netted more than $200,000 and remained unsolved until mid-2004. Michigan banned capital punishment in 1847, the first state to do so, but the death penalty can be imposed for federal capital crimes such as a murder during a bank robbery. The last of the 66 potential jurors in the O'Reilly trial, was seated Wednesday after nearly three weeks of selection. The trial in U.S. District Court in Detroit is expected to take all of July and August.

IMSN.MoneyI spotlights CUs unbanked programs

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NEW YORK (7/8/10)--Credit unions are a good option for unbanked consumers, according to MSN.Money. In an article titled, “Think a bank won’t take you? What Now,” author Donna Freedman said that “some … credit unions are willing to work with people who have less-than-spotless financial histories.” The article mentions San Francisco-based Mission SF FCU member Mark Laws, who received a “payday alternative” loan from the credit union four years ago to clear up money problems he encountered after taking out payday loans elsewhere to cover overdrafts he incurred at Bank of America. Today, Laws has learned how to better manage his money and has improved his credit. “My credit union showed me there’s hope,” he told MSN.Money. In regard to helping consumers with troubled finances, credit unions are likely to be more flexible than banks, Mike Schenk, senior economist with the Credit Union National Association, told MSN.Money. The article directed readers to CUNA’s credit union locator. It also mentioned a woman who saw an ad on a bus for “Bank on Seattle-King County,” a program that helped get her into a credit union. To read the article, use the link.

Newspaper Ann Arbor CUs benefit from anti-bank surge

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ANN ARBOR, Mich. (7/8/10)--Credit unions based in Ann Arbor, Mich., are benefiting from the backlash against banks, according to a local newspaper. Consumers are upset with banks for their involvement in subprime mortgages and derivatives, which triggered the financial crisis. The anger has caused consumers in Ann Arbor to join credit unions, said AnnArbor.com (July 4). Ypsilanti FCU, now Washtenaw FCU, saw its deposits jump to $30.5 million from $25 million at the end of 2008. CEO Gregory Gurka noted in the article that consumers are trying to keep their money local and feel more secure when the institution is based in their community. Overall, Michigan credit unions’ assets rose 17.5% to $38.2 billion in December 2009 from December 2007. Michigan Credit Union League CEO David Adams told the newspaper that credit unions are benefiting from dissatisfied consumers taking their business to credit unions. Credit unions have proved that banking is about service, not profit, he added. Other credit union items the newspaper noted:
* U-M CU in June purchased the former Ann Arbor News building to serve as its corporate headquarters for its expanding staff; * DFCU Financial, Dearborn, last month agreed to acquire MidWest Financial CU of Ann Arbor, which had $185 million in assets at the end of 2009. DFCU’s assets are $3 billion; * Washtenaw FCU changed its name after opening its membership to anyone who works, lives or worships in the county; and * Community Driven CU, Ypsilanti, is focusing more on auto loans as banks pull back on lending. Last year, the credit union offered $10 million in auto loans, compared with the usual $3 million.

Evergreen DIRECT CUSO singled out in fraudulent calls

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OLYMPIA, Wash. (7/8/10)--Two weeks after automated phone messages surfaced in a phishing scam that targeted Olympia, Wash.-based Evergreen DIRECT CU, the credit union still receives calls from members and nonmembers inquiring about the messages, the credit union told The Olympian (July 7). The messages claimed to be from the credit union and told recipients that their debit card had been deactivated for a variety of reasons--including billing errors and questionable activity. Most people are being contacted on their cell phones. To protect consumers, the credit union lowered the combined daily limit on ATM withdrawals and PIN-based point-of-sale (POS) transactions to $500 until further notice. To avoid the limit, members can swipe their card and "sign in" for transactions at the POS terminals. The automated message ends with an 800-toll free phone number. The calls have gone to one elderly woman, and when the newspaper tried the number, it was answered by a credit union services organization, United Solutions, which said someone else is using the telephone line and the phone carrier is working to solve the problem. Thurston County Sheriff's Office said it receives two or three reports a week from residents who received the calls, provided information, and experienced money taken from their account. The scam originates in Spain, said the sheriff's office.

TNB Card Services sold to Fifth Third Processing Solutions

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CINCINNATI (7/8/10)--Fifth Third Processing Solutions (FTPS) has acquired the assets of TNB Card Services from Town North Bank. The acquisition will expand FTPS’ commitment to provide electronic payment solutions to credit unions and their members, the companies said in a release. TNB Card Services will become part of FTPS, which is headquartered in Cincinnati. Town North Bank, Dallas, has about 1.4 million credit and debit accounts. FTPS provides transaction processing and acceptances solutions for financial institutions worldwide. TNB Card Services provides credit, debit and prepaid cards; loyalty services; consulting; and ATM driving with a suite of back-office services to more than 370 credit unions in 27 states and the District of Columbia.

CU System briefs (07/07/2010)

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* COMPTON, Calif. (7/8/10)--Mid-Cities Financial CU marked a major
Click to view larger image Click for larger view
milestone when it welcomed its 5,000th member, Mary Jones, last month. Jones was awarded a travel certificate in a small recognition ceremony at the credit union's Compton, Calif., headquarters. Mid-Cities Financial President/CEO Melia Keller noted that the credit union's increase in membership numbers "reflects the value we try to bring to the community we serve." Pictured, from left, are Keller, Branch Manager Maricela Jauregui and Jones. The credit union has more than $26 million in assets. (Photo provided by Mid-Cities Financial CU) ... * SALT LAKE CITY (7/8/10)--Mountain America CU has added a new banking application for Android smart phones. With the free app, members can access their accounts while on the go by using their Android phones. Members can check account balances, review transaction history, transfer funds between accounts and view balance graphs. They can download the app for free from the Android Market located at www.android.com/market. Mountain America, a $2.8 billion asset credit union based in West Jordan, Utah, also offers apps for iPhone, Blackberry, Palm and Windows Mobile devices. They provide SMS (short message service)/text banking and a browser-based tool, which can be found at m.macu.com ...