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CU System briefs (07/09/2014)

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  • SANTA ANA, Calif. (7/9/14)-- Counterfeit official checks bearing the name of Orange County's CU, Santa Ana, Calif., are being circulated as part of a national survey scam for a mystery shopper program , according to the $1.1 million-asset credit union. So far, four checks in the amount of $998 have been caught. The counterfeit items display a memo with "June 2014 PYMT" and have the credit union's routing number on them. However, Orange County's CU official checks are issued through Fifth Third Bank ...
     
  • COLUMBIA, Md. (7/9/14)-- As of July 1, Gordon M. Cooley assumed the position of acting commissioner of financial regulation for the Maryland Department of Labor, Licensing and Regulation . He previously was deputy commissioner under Mark Kaufman, who stepped down after four years. The Maryland and D.C. Credit Union Association said it plans to meet with the new acting commissioner soon to make sure industry issues continue to be front and center ( The Daily Scoop June 30) ...
     
  • BOSTON (7/9/14)-- Joseph Finn, board member and clerk for Boston Firefighters CU, Dorcester, Mass., was named commissioner of the Boston Fire Department by Mayor Martin Walsh ( Daily CU Scan July 8). Finn has been on the board of the $193 million-asset credit union for eight years ...
  • MADISON, Wis. (7/9/14)-- UW CU, Madison, Wis., has installed an urban bike-sharing station at one of its branches . With the partnership between UW CU and Madison B-Cycle, members will be able to receive a discounted annual membership. "We're also committed to doing what's right for the environment by supporting this alternative form of transportation," said Brad McClain, executive vice president/chief financial officer at the $1.8 million-asset credit union ...
     
  • HARRISBURG, Pa. (7/9/14)-- Glen Yeager, who has been president/CEO of Utilities Employees CU, for 27 years, announced his retirement ( Life is a Highway July 8). Yeager became CEO in 1987, and the credit union has since grown to more than $1.1 billion from $90 million in assets. It serves 44,000 members from public utilities and energy sector companies in all 50 states, from its sole office in Wyomissing, Pa. "Together we've honed a low-cost 'virtual credit union' model that allows UECU to pay members some of the highest savings rates and rewards of any institution in the country," Yeager said. Upon Yeager's retirement Oct. 1, current Executive Vice President Patricia Zyma will become president/CEO ...
     
  • ST. PAUL, Minn. (7/9/14)-- St. Pascal Parish CU, with $383,000 in assets, has merged with another St. Paul, Minn., credit union . St. Paul FCU, with $129 million in assets, will now serve the parish, school and family members of St. Pascal Baylon Catholic Church ...

121 Financial emphasizes CU safety, soundness to WJXT-TV

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JACKSONVILLE, Fla. (7/9/14)--The regular "4 Your Money" features by 121 Financial CU on Jacksonville's WJXT-TV typically offer consumer education, but during the July 5 segment, the $449 million-asset credit union took the opportunity to dispel misconceptions brought about by a national news article on credit union lending practices.
 
Rebecca Hulett, senior vice president/chief financial officer, 121 Financial CU, Jacksonville, Fla., explains credit unions' safety and soundness to WJXT-TV host Marques White in a "4 Your Money" segment. ( WJXT-TV Photo)
The piece led off with a reference to a June 6 article in The Wall Street Journal about credit unions' interest-rate risk and if they were as safe as banks ( News Now June 9).
 
The tone quickly changed to a positive one as Rebecca Hulett, 121 Financial CU senior vice president/chief financial officer, explained more about credit unions.
 
The article was "a little bit shaded toward the worrisome side," Hulett noted, adding, "In reality, credit unions have never taken these substantial risks that happened before the bubble burst in 2008, which is why credit unions survived so well throughout the financial crisis."
 
Hulett said that credit unions are easing lending standards slightly, but she credits that to a swing back from the "bit too far" conservative standards created by the financial crisis.
 
She also affirmed the insured status of credit unions--$250,000 per account by the National Credit Union Share Insurance Fund, the same as banks under the Federal Deposit Insurance Corp.
 
Hulett took the opportunity to share the services that credit unions provide, how consumers can learn about the right credit union for them to join and the not-for-profit cooperative structure.
 
"Credit unions are member-owned, so if you hold an account at a credit union, you own the credit union and have a right to vote for the board of directors," Hulett said.

College an investment worth saving for, GCUA survey finds

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DULUTH, Ga. (7/9/14)--In a recent survey by Georgia Credit Union Affiliates (GCUA), more than 71% of respondents said saving for a college degree is worth the financial investment, with 60% answering that saving for college in general was important to them.

The Mid-Year 2014 Consumer Survey also found that only about 20% of people believe students loans are a good way to pay for a college education, a result that could be driven by ever-escalating costs to attend college.

A recent evaluation of college pricing, reported by GCUA, found that as prices rise for education, so does student debt.

But considering the long-term benefits of receiving a college degree--Americans with a four-year degree make an average of 98% more than those without, according to the Economic Policy Institute in Washington--people still find it imperative to save.

"With tuition costs on the rise, it is important for consumers to begin planning their financing as soon as possible," said Laura Sterling, vice president, Georgia's Own CU, Atlanta, with $1.9 billion in assets. "Even if you have been proactively saving for college, it does not guarantee you won't need financial assistance, and student loans are a great help."

GCUA offers several college savings-related tips, including starting to save as soon as possible, seeking assistance from a financial adviser and researching different ways to save for college.

Sterling, meanwhile, suggests the types of questions those considering taking out a student loan should ask themselves before they sign on the dotted line.

"How much can you afford? Is the school worth the cost of education? How long will it take to pay back the loan?" Sterling said. "What kind of income will you make after you graduate, and what is the job market like in that field?"

Sterling also notes that federal student loans funded by the government can carry less risk and that they're often less expensive than other types of financing options.

"If you need assistance paying for college, it is generally a good rule of thumb to consider federal loans first," Sterling said.

Michaud addresses Maine league meeting

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PORTLAND, Maine (7/9/14)--The potential future governor of Maine dropped in to speak at the Maine Credit Union League's annual meeting and convention last month, discussing the positive impact credit unions have had on his life as he addressed the nearly 750 attendees at the event.

Rep. Mike Michaud (D-Maine) tells the credit union professionals in attendance at the Maine Credit Union League's annual meeting and convention that his history with credit unions is "decades long for good reason."
Rep. Mike Michaud (D-Maine), a longtime credit union member and a current board member at Eastmill FCU, East Millinocket, Maine, with $61 million in assets, described his history with credit unions as "decades long for good reason."

"Credit unions are always there to help people," said Michaud, who's been endorsed by the league in his bid for governor. "They helped me as a teenager when I needed a loan for a car and have helped me ever since. The league and credit unions have supported me in every one of my campaigns and I very much appreciate their support again this year because it will be critical to helping me become the next governor."

League President John Murphy called Michaud's understanding and support for credit unions very helpful over the years and said he has been a great friend to the movement through his days in the state Legislature, which included a stint as Senate President, and as a member of Congress for the past 12 years.

"He would be a great governor and be a leader on credit union issues," Murphy said. "As we have on his other campaigns, we will work hard to make that happen."

Bay Area CUs prepared for housing market challenges

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SAN JOSE, Calif. (7/9/14)--In the always-volatile California real-estate market, Bay Area credit unions may soon face more mortgage challenges.
 
The "b-word," as in bubble, has surfaced in several recent articles focusing on the local housing market, Dan Hapner, director of mortgage sales for $1 billion-asset Meriwest CU, San Jose, told National Mortgage News (July 7), as starter homes prices have increased to as high as $800,000.
 
Once those prices reach $1 million, most, even buyers with incomes of $250,000, will be priced out of the market, Hapner said.
 
To minimize risk, on any loan above 75% loan-to-value or $1 million, Meriwest CU requires two appraisals, according to Hapner. And the loans the credit union does make are to well-qualified borrowers, he added.
 
The median purchase price for a mortgage made by Meriwest CU in April was $808,000, and the average is above $1 million, National Mortgage News reported.
 
Considering those numbers, most of the mortgages Meriwest CU books are jumbos, which the secondary market has minimal interest in. Investors are looking for six to 12 months in payment history. That means the credit union is placing most of its mortgages in portfolio at the current time, with hopes that the secondary market will open up in the future.
 
Part of the reason for the Bay Area market explosion is foreign investment in real estate, particularly from China, said Dwight Johnston, chief economist for the California and Nevada Credit Union Leagues.
 
But Johnston did offer some good news when comparing the current housing market with the market that led to the crash of 2008: The previous crisis was caused by bad mortgages, which are not driving the current market increase.
 
Steve Donahue, vice president of mortgage origination for $1.8 million-asset Technology CU, also based in San Jose, went a step further. He said talk of a housing bubble was unfounded.
 
Donahue said the Silicon Valley housing market is hot because numerous tech companies are moving to the area, creating a demand for expensive housing. With that kind of money coming in, a drop-off is unlikely, he told National Mortgage News .
 
Vince Salinas, vice president of home loans for $4.1 billion-asset Patelco CU, Pleasanton, said that it was unlikely there enough volume in the local housing market to create a bubble. High prices do not equate to a bubble, he told National Mortgage News .

Truliant members share 'Life Improved' stories

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WINSTON SALEM, N.C. (7/9/14)--To illustrate its new brand--called "Life Improved"--Truliant FCU, Winston Salem, N.C., is asking members to share just how the credit union has enhanced their financial livelihoods with video testimonials.

Broken down into four categories, each featuring members at various stages of their lives, the videos represent anyone from new members to those who have been a member of the $1.7 billion-asset credit union for more than 14 years.

"We share stories internally every day about the ways members' lives are improved by a Truliant membership, but we also wanted to show it," said Karen DeSalvo, Truliant's chief marketing officer. "These videos demonstrate our 'Life Improved' brand by showing members who genuinely benefit financially from a membership with us."



For example, Troy Knight describes in his video testimonial how after being discharged from the U.S. Army, the credit union helped him refinance an auto loan and subsequently set and begin working towards his financial goals.

"The No Cost Credit Review was a great help coming out of the Army," Knight said. "It really gave me a better understanding of my personal credit situation, where I was, where I needed to be, and helped me establish goals."

Another video features a married couple who have four children and $60,000 in credit card debt that Truliant helped take charge of their financial situation.

The videos demonstrate "the guidance we give individuals to help them persevere in difficult financial situations," DeSalvo added. "Both are ways Truliant executes our mission to improve the quality of life of our members."

Young investors prefer older, experienced advisers

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NEW YORK (7/9/14)--While the digital age and social networking have raised the value of peer endorsements, experience still counts with younger generations when it comes to investing, according to one focus group.
 
And--surprise!--digitally savvy Gens X and Y would rather meet face to face with an adviser than seek investment counsel online ( ThinkAdvisor June 27).
 
Young investors value experience, a group of Gen X and Y investors told financial advisers at a recent Securities America conference. Several members of the group work with their parents' advisers and were not likely to work with an inexperienced adviser without much time or experience in the game, said Janine Wertheim, Securities America Advisors president.
 
During the conference session, a group of young investors listened to recordings of advisers describing what they do for clients. The young investors provided their immediate reactions to the advisers' thoughts.
 
The group of Gen X and Gen Y investors was diverse, and included married and single participants, and couples with and without children. Some had already worked with advisers. Others had invested on their own.
 
Young investors were most impressed with advisers who were interested in getting to know their clients and their unique circumstances, Wertheim said.
 
Among the topics they are most like to seek advice on is real estate, and whether they are better off renting, buying or investing.

Ind. joins prize-linked savings movement

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INDIANAPOLIS (7/9/14)--Indiana recently joined the growing list of states in which credit unions have the authority to offer prize-linked savings (PLS) accounts when Gov. Mike Pence formally signed into law HB 1235.
 
Click to view larger image From left: John McKenzie, Indiana Credit Union League (ICUL) president; Carrie Summers, ICUL director of advocacy; State Rep. Gail Riecken (D-Evansville); Connie Gustafson, Indiana Department of Financial Institutions general counsel; Indiana Gov. Mike Pence; Chris Beaumont, ICUL vice president of governmental affairs; Kristi Lowell, vice president of brand strategy and development, FORUM CU, Fishers, Ind.; Doug True, FORUM president/CEO and ICUL vice chair; State Rep. Woody Burton (R-Whiteland); and State Rep. Eric Koch (R-Bedford) (Indiana Credit Union League photo)
Nationally, credit unions have led the development of PLS programs by creating savings accounts and other financial literacy tools that reward members who save money by offering chances to win prizes. The programs have been developed as a way to help encourage people to save money and develop good spending and debt management habits.
 
In Indiana, legislative changes were required to ensure that PLS programs would be in compliance with state gaming laws. Previously, PLS programs had to be offered with a "no purchase necessary," sweepstakes-type approach. This meant that members had to be offered a chance to win prizes, even if they did not make deposits or otherwise participate in the programs.
 
In late 2013, State Rep. Gail Riecken (D-Evansville) approached the Indiana Credit Union League about helping her to draft legislation that would authorize credit unions to offer PLS programs without a sweepstakes approach. The legislation also was designed to clarify that credit unions' PLS programs would not fall under Indiana's gambling, lottery, promotions or charity gaming laws.
 
The league worked with Rep. Riecken to draft legislation that would create PLS programs that would be consistent with already-existing PLS programs in other states and those currently being offered by Indiana credit unions as sweepstakes. Although the bill did temporarily get caught up in some minor controversy related to other charity gaming legislation, HB 1235 received wide support from legislators as it moved through the process in the spring session and passed in its final form the day before session ended.
 
Other states that have passed PLS legislation include Connecticut, Maryland, Nebraska, North Carolina, Washington, Maine and Rhode Island. New York has passed a bill that is currently awaiting the signature of Gov. Andrew Cuomo.