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CU System Archive

CU System

CU reacts to GMs return to car leasing

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NEW YORK (8/3/09)--General Motors (GM) could begin leasing vehicles again this month, according to The Wall Street Journal (July 31). About 3% of credit unions offer auto leasing. These credit unions have about 8.3% of credit union members, according to the Credit Union National Association’s Credit Union Service Profile for December 2008. Lake Michigan CU, Grand Rapids, Mich., did not react strongly to news about GM possibly leasing again. The credit union ended its leasing program last year when GMAC, Ford and other auto giants pulled out of the leasing market, Scott Wiggins, vice president of lending, told News Now. Even if GMAC starts leasing again, the credit union doesn’t anticipate offering auto leases. It’s likely that auto giants like GMAC will have to increase their lease payments and lower residuals to make it work, Wiggins said. Leasing was attractive to members who were interested in owning a certain car for a few years. In the past, leasing payments had cost some members less than auto loan payments. But the gap in savings will likely shrink, so members may reconsider the benefits of leasing a car. “If they can buy a new car for $360 a month in loan payments, rather than lease a car for $340-$345 a month, they may opt to buy and build equity,” Wiggins said. When Lake Michigan CU stopped its leasing program, it did not receive any calls from members asking them to reinstate the program. “Members were unfazed,” Wiggins said. Normally, members had sought leases through dealerships, and came to the credit union if they couldn’t get leases through dealers.

U.S. Central posts 537M net OTTI losses

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LENEXA, Kan. (8/3/09)--U.S. Central FCU Friday posted $537 million net Other-Than-Temporary-Impairment (OTTI) losses for the second quarter of the year. U.S. Central said that $38 million of the loss is applied to retained earnings and that action reduces net earnings to zero. The remaining $499 million OTTI loss is applied to membership capital share balances. Combined with membership capital share depletions resulting from first quarter of 2009 OTTI charges, that represents a cumulative 63.3% depletion of membership capital shares. At U.S. Central, two of the three available sources of capital--retained earnings and paid-in-capital--have been reduced to zero. U.S. Central also has a $1 billion capital note issued under the NCUA's Corporate Credit Union Capital Stabilization Plan. Excluding OTTI charges of $537.0 million, U.S. Central recorded net gains on financial instruments of $3.8 million in the second quarter of 2009, compared with losses of $4.3 million for the same period in 2008. Fee income totaled $5.3 million for that period, which was nearly the same as a year earlier. Among expenditure savings, U.S. Central reported that operating expenses were $12.4 million, a 21.4%, or $3.4 million, reduction compared to the same period in 2008. Expenses for salaries and benefits decreased from $7.4 million to $5.9 million, primarily as a result of staff reductions and the elimination of incentive compensation, the corporate credit union said in its report. U.S. Central also noted it placed restrictions on marketing, public relations, travel and incidental spending, which resulted in nearly $1.2 million of expense reductions. Not surprising, U.S. Central identified the primary risk currently facing its investment portfolio as credit risk--the risk that assets owned by the corporate, including investment securities, loans and short-term investments, may not pay all principal and interest according to their contractual terms due to the current economic downturn. Use the resource link below to access the full report.

CUcorp RV finance company enter marketing agreement

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LIVONIA, Mich. (8/3/09)--The Michigan Credit Union League's wholly owned subsidiary, CUcorp, has entered into a marketing agreement with recreational vehicle (RV) finance company Thor CC Inc. (TCC) to promote consumer RV loans to credit unions across the country. A University of Michigan researcher predicts that the number of RV-owning households will increase by next year because strapped consumers are turning to RVs for closer-to-home vacations. Thor CC is the captive finance company for Thor Industries Inc., the world's largest manufacturer of RVs with names such as Airstream, Breckenridge, CrossRoads, Damon Motor Coach, Dutchmen, Four Winds, Keystone and Komfort. Thor Industries maintains the largest market share for towable units. Through its 1,300 RV dealers nationwide, TCC originates secured RV loans and sells those loans to financial institutions. David Adams, CEO of CUcorp and the league, said the partnership broadens the complement of CUcorp's lending products provided to credit unions. "High-quality RV loans can help credit unions diversity their portfolio in a safe and profitable manner," he said, adding it also "provides an additional avenue to attain new members." Traditionally RV loans have outperformed mortgage and home equity portfolios, said cuCorp and Thor. For more information, contact Lisa Robinson, CUcorp vice president for marketing and sales at 800-262-6285, ext. 539 or at lisa.robinson@cucorp.com.

Lawyers sue company chaired by CU Mortgage CEO

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NEW YORK (8/3/09)--At least four law firms have withdrawn or are seeking to withdraw from a case that involves a financially troubled company formerly chaired by a man convicted of defrauding credit unions, Fannie Mae and others when he headed up the now-bankrupt U.S Mortgage Corp. and CU Mortgage. The defendant company is Dallas-based Home Solutions of America Inc., which specializes in restoring homes after disasters. Its former chairman, Michael McGrath, pleaded guilty June 11 to defrauding 19 credit unions, Fannie Mae and others of $139.6 million related to the bankruptcies of the mortgage companies. He will be sentenced on Oct. 1 (News NowJune 16). According to a July 21 summary judgment in the New York Supreme Court, Justice Emily Goodman awarded New York law firm Morgan, Lewis & Bockius $2.4 million, plus interest, for legal fees owed the firm by Home Solutions of America Inc., from 12 legal situations in 2007. The New York Supreme Court is a trial-level, lower court. The court acting as the highest court in the state is the New York Court of Appeals. Also, on July 23, Justice Goodman granted another law firm--New Jersey-based Riker, Danzig, Scherer, Hyland & Perretti LLP-- its motion to withdraw as attorney of record for Home Solutions because Home Solutions owed the firm $60,000 for work from November 2008 to April 2009. The firm had defended Home Solutions in the lawsuit filed by Morgan, Lewis & Bockius (New York Law Journal July 29). The other firms trying to withdraw are from Texas--Fulbright & Jaworski and Hallett & Perrin, said the journal. In January 2008, Home Solutions of America was delisted from the Nasdaq Stock Exchange after missing deadlines for filing quarterly reports. It had financial and legal difficulties for most of 2008 and has been selling or closing all its divisions except those in New Orleans, it said in a filing with the Securities and Exchange Commission. McGrath had offered Morgan Lewis $1 million to settle accounts but the law firm said it was owed $2.5 million. Riker Danzig had required McGrath to sign a personal guaranty for payment of fees and costs, but McGrath resigned as chairman of Home Solutions and federal prosecutors froze his assets.

Budget impasse prompts changes to Better Choice

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HARRISBURG, Pa. (8/3/09)--Pennsylvania’s budget impasse has prompted the Pennsylvania Credit Union Association (PCUA) and the state treasurer to make temporary changes to the Credit Union Better Choice program to help state employees facing payless paydays. PCUA President/CEO Jim McCormack and Pennsylvania State Treasurer Rob McCord issued a letter to 82 credit unions participating in the program. The letter asks credit unions to allow state employees to apply for a separate Better Choice loan up to a maximum of $500 on each regular payday during the impasse (Life is a Highway July 31). Credit unions also are asked to forgo the deposit of an additional amount equal to 10% of the loan to an account in the employee’s name when making second Better Choice loans, and waiving the regular application fees for second and subsequent Better Choice loans to state employees. To qualify for the Better Choice loan, the state employee must be eligible for credit union membership and have an account. Borrowers are required to repay their 90-day loans in full before being eligible to take out subsequent loans.

Phil Gramm Marci Rossell added to Economic Forum lineup

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DALLAS (8/3/09)--Marci Rossell, former economist at the Dallas Federal Reserve and former chief economist at CNBC, and Phil Gramm, former U.S. senator from Texas, have been added to the speaker lineup at Southwest Corporate’s 32nd annual Economic Form. The forum is scheduled for Oct. 27 and 28 in Dallas. Online registration for the event is now open. The forum aims to provide credit union leaders with information on how to plan for 2010 and beyond. This year’s theme is “Navigating the New Normal.” Rossell and Gramm will join:
* Gigi Hyland, National Credit Union Administration board member; * Martin Feldstein, national economist who serves on President Barack Obama’s economic recovery advisory board; * Bill Hampel, Credit Union National Association chief economist; * William Ford, former president of the Federal Reserve Bank of Atlanta and former chief economist for the American Bankers Association; and * Charles Idol, Southwest Corporate consultant and credit union industry economist.

CU System briefs (07/30/2009)

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* LANSING, Mich. (7/31/09--Two Michigan credit unions have announced their members have approved a merger, according to the Michigan Credit Union League (Michigan Monitor July 27). Trenton FCU, a $50 million asset credit union in Trenton, and Wyandotte FCU, a $80 million asset credit union in Wyandotte, said the merger will be completed by Oct. 1. The surviving credit union, which will be named Shore to Shore Community FCU, will adopt Trenton FCU's community charter. Shore to Shore Community FCU will have $135 million in assets and more than 20,000 members … * ROCHESTER, N.Y. (7/31/09)-- Kenton FCU, based in Tonawanda, N.Y., and Rochester, N.Y.-based Summit FCU are planning to merge, the credit unions announced Monday. The merger will be finalized on Oct. 1. The majority of Kenton's 3,000 members voted July 23 to approve the merger into Summit. The combined credit union will keep the Summit name and will have 59,000 members and more than $480 million in assets. Summit CEO Michael Vadala told local newspapers that the credit union expects to retain all of Kenton's employees (Democrat Chronicle.com July 25 and Buffalo Business First July 27) …

Bank failures far outnumber CUs

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WASHINGTON (7/31/09)--The number of bank failures during the first half of 2009 far outnumber credit unions that have closed or been put into conservatorship, according to statistics released by the Federal Deposit Insurance Corp. (FDIC). For the first six months of 2009, roughly 72 institutions--including seven banks from just last weekend--were either closed or taken over by regulators (Bank Info Security July 28). So far this year, failed banks total 64, which is more than double bank closures for the entire year of 2008, when 25 banks were shuttered. Troubled banks so far this year number 305, about double last year's total of 117. Total cost to FDIC's Insurance Fund is $13.553 billion. That compares with eight credit unions shuttered or put into conservatorship this year. That number is on pace with last year's numbers. In 2008, 15 credit unions were placed into conservatorship or were closed. The National Credit Union Administration did not report any impact to the National Credit Union Share Insurance Fund for the eight credit union failures, the article said. Why so few credit union failures? Many aren't exposed to commercial real estate, like banks are, and most are more conservative in their underwriting of loans. Still, they are experiencing some collateral damage from members in financial difficulties due to the4 economy. All of the current bank closures are due to under capitalization or poor loan portfolio performance. And the number of institutions closing due to economic conditions, mortgage and other loan defaults is growing, said Bank Info Security. Studies of banks indicated they have been charging off bad commercial mortgages at the fastest pace in nearly 20 years. Losses at that pace could add up to $30 billion by year end. Many of the most troubled banks have heavy exposure to commercial real estate. The states with the most failures in banks are Georgia with 16 banks, Illinois with 12, California with eight and Florida with three bank failures. Three credit union failures were in hard-hit California. Other states with one credit union failure each are West Virginia, Kansas, Florida, Michigan and Alabama. An interactive map pinpoints where the closures have occurred. Use the link to access the map from bankinfosecurity.com.

Tyndall launches online-only CU in two counties

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PANAMA CITY, Fla. (7/31/09)--Tyndall CU has launched tyndallonline, an online-only credit union that will be available solely to Okaloosa and Walton Counties in Florida. The Panama City, Fla.-based credit union said the online credit union will offer checking accounts, savings products, and several types of consumer loans and mortgages through its website, tyndallonline.com. The credit union is wholly owned by Tyndall FCU, a $950 million-plus credit union, and is insured by the National Credit Union Administration. According to Tyndall FCU President/CEO Jim Warren, "tyndallonline is designed to have very low operating costs with an industry-leading website." The credit union is offering several promotions: a 2.l99% annual percentage rate (APR) rate on new- and used-auto loans; a rebate of $450 on mortgage loan closing costs; and several certificate specials for deposits.

WesCorps June financials An OTTI hit of 541M

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SAN DIMAS, Calif. (7/31/09)--Western Corporate FCU (WesCorp) recorded an additional $541.1 million in Other-Than-Temporary-Impairment (OTTI) costs on its term portfolio for second quarter, WesCorp announced Thursday. That resulted in a net loss for the corporate credit union totaling $538.3 million in June. It was the third consecutive month that OTTI overshadowed WesCorp's positive income from core operations, which reached $2.9 million in June. Most of the OTTI originated with securities that had already experienced prior credit impairment and had further credit deterioration, WesCorp said in a news release. The OTTI on securities previously impaired totaled $519 million, while $22 million of OTTI were from securities not previously impaired. Roughly 70% of June's OTTI is from the portfolio's Option ARM sector, with another 11% from Alt-As. To date, WesCorp has recorded a total OTTI of $6.1 billion, with $4.7 billion--or 77%--stemming from Option ARMs. Net-interest income in June decreased by $700,000 while fee income rose by $1.2 million from May 2009, the corporate said. SFAS 133 expense adjustments of $2.5 million, previously recognized as income during 2007, contributed to the decrease. Adding to that was the recognition of $702,000 previously written down in December 2008 for the restoration of the National Credit Union Share Insurance Fund. Also, operating expenses increased overall by $78,000 from May 2009. "I'm disappointed but not shocked by further OTTI losses in our portfolio," said WesCorp President/CEO Philip Perkins. "Housing market conditions, loss severities, and delinquency pipelines not only failed to improve in the second quarter, there were pockets of further decline which the additional credit losses reflect." Perkins, along with Chief Financial Officer Jim Hayes and Chief Investment Officer Joseph DeMichele, hosted a WesCorp Member webcast Thursday. They provided commentary and analysis on the statements and took questions from participants. For more detail, use the link to WesCorp's website and click on the Financial Report icon.

Some banks send bailout bills to biz customers

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NEW YORK (7/31/09)--Here's yet another opportunity for credit unions to attract members fed up with banks' fees. Some banks are passing the cost of their bailout insurance assessments along to some of their business customers. In May, the Federal Deposit Insurance Corp. (FDIC) assessed the nation's banks $5.6 billion to restock its insurance fund after costly bank failures, reported Dow Jones News Service (July 29). Such costs are not passed along by credit unions to their members, said Bill Hampel, chief economist at the Credit Union National Association. "To my knowledge, credit unions do NOT pass on their share insurance costs to any specific group of members," he told News Now. Dow Jones noted that JPMorgan Chase & Co. paid $675 million out of second-quarter earnings and Wells Fargo & Co. paid $565 million. "But those two banks, along with many others, are passing their FDIC bills to some business customers," the article said. Both banks confirmed to Dow Jones that they are passing along the FDIC fees to some business customers, including some small businesses. A Wells Fargo spokesman said the fees affect business customers that account for a very small portion of its total deposit customer base. Cincinnati-based Fifth Third Bancorp said it began passing its $55 million special assessment costs along to commercial customers in March. Other banks, such as Bank of America Corp., KeyCorp., SunTrust Banks Inc., BB&T Corp. and Capital One Financial Corp., could not verify whether they charge fees to offset the assessment. The article said line-item details of the fees aren't readily visible and usually are found in "account analysis" or invoice documents, not on the account's statement. It also noted banks levy the charges in a variety of ways, including basing fees on average account balance and fixed fees that mirror a bank's assessment costs. Since banks likely will see even more assessments due to failures' impact on the FDIC insurance fund, the article said.

N.J. CUs statewide ads make impact via Comcast.net

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HIGHTSTOWN, N.J. (7/31/09)--The New Jersey Credit Unions’ Statewide Advertising Initiative began advertising in June on the e-mail login page of Comcast.net--one of the most visited pages in the state, said the New Jersey Credit Union League. Together with the Internet advertising, the league also began on-air commercials and a two-minute on-demand video (The Daily Exchange July 30). The advertising made an impact for the state’s credit unions because during the months of June and July, the click-through rate (CTR) on the Internet ads went from 0.08% to 0.26%. Comcast.net Internet advertisers usually receive, on average, 0.03% to 0.05% CTRs. New Jersey credit unions exceed the average with a 0.21% higher CTR, the league said. The CTR measures the success of an online advertising campaign. A CTR is obtained by dividing the number of users who click on an ad on a Web page by the number of times (impressions) the ad was delivered.

Corporate One reports loss in first-half 2009

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COLUMBUS, Ohio (7/31/09)--Corporate One FCU Wednesday reported an $8.2 million first-half 2009 net loss in income. The corporate said the loss stems mostly from impairment charges taken in May 2009 on mortgage-backed securities. The loss is before the net recovery of the National Credit Union Shared Insurance Fund (NCUSIF) deposit and premium assessment. The estimated impairment loss of $17.1 million represents the estimated credit loss on 30 of its mortgage related securities, the corporate said. The Columbus, Ohio-based corporate said its net income loss is a decrease of $21 million from the same period in 2008. Corporate One had losses at mid-year of $332.1 million on its total book value of $4.132 billion of securities. Roughly $222 million--or two thirds of that loss--are attributable to mortgage-backed securities. However, the corporate is reporting a positive budget variance in net income of $1.7 million for June 30, 2009, year-to-date before other-than-temporary impairment charges and the net recovery of the NCUSIF deposit and premium assessment. Also, net interest income was about $628,000 greater than budget for the first-half 2009. For more information, use the link.

MCUA forms state fed regulatory task force

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ST. LOUIS (7/31/09)--The Missouri Credit Union Association (MCUA) board of directors organized a new task force to focus on state and federal regulatory issues. The group met for the first time July 22. “Credit unions are currently experiencing very rapid regulatory and legislative changes,” said Board Chair Stan Moeckli, president/CEO of Electro Savings CU in St. Louis. “This task force is designed to help MCUA share the operational impact and credit union concerns created by legislation and regulations with the people responsible for creating them” (The Missouri difference July 24). Moeckli and the board appointed more than two dozen representatives from Missouri credit unions to the task force. The group will assess the operational impact of state and federal regulatory actions and initiatives, provide operational impact data, assist in reviewing comment letter responses and assist in meeting with state and federal regulators to convey credit union concerns, operational impact and supporting data, MCUA said. Participants were selected based on their expertise in areas such as investments, corporates, overdraft protection, mortgages, regulatory restructuring, business lending, consumer lending, credit cards, savings programs, community development and collections, the association said.

Social networks will change brand marketing

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FARMERS BRANCH, Texas (7/31/09)--Within the next four to five years, the social web is expected to morph through several stages that will change the way brands are marketed, according to a Forrester Research white paper. The paper, “The Future of the Social Web,” explains several ways that marketers should prepare for the changes. Credit unions may be interested in these changes as they continue to attract new and young members. “Today’s social experience is disjointed because consumers have separate identities in each social network they visit,” says the paper’s author, Jeremiah Owyang of Forrester Research. “A simple set of technologies that enable a portable identity could soon empower consumers to bring their identities with them” (LoneStar Leaguer July 24). In the future:
* Social networks will aggregate member activities and preferences, and leverage this data with brands; * Consumers will be able to expose all or portions of their personal and network information to the websites they visit; * Websites will be able to use the personal information to personalize consumers’ Web experiences; * Consumers will visit websites and know their communities’ usage, likes and dislikes, views of products or services; and * Social communities will feed data and insights about websites, brand experiences, product and services, and more to members on an as-wanted basis. The future social web will make “portable” the opinions, insights and knowledge of friends, which all research shows is much more trusted than any other information source.
Marketers should note that:
* Segmentation potentially will move from traditional schemes to social networks. This will be an aggregated set of individuals who tend to be like them based on habits, practices and preferences; * Influencers, or amplifiers, will become more important because they will be omnipresent. They will become portable and lead their non-amplifier friends and inform them as they travel the Web. Marketers must identify these amplifiers and develop programs to interact with and influence them; * Consumers will be able to see what their social network--either their immediate network or people like them--think of a given store, product or service, wherever they go on the Web. Marketing organizations will need to develop new tools to influence and monitor this new content; and * Consumers will come to a website, with information about themselves and their network. Brands can use this data to personalize the experience and recommend products.

WOCCU names Distinguished Service WYCUP winners

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BARCELONA, Spain (7/31/09)--Two credit union veterans--one from the U.S., the other from Canada--received the World Council of Credit Unions' (WOCCU) Distinguished Service Award during closing ceremonies at WOCCU's World Credit Union Conference Wednesday.
Click to view larger image The U.S.'s Dave Chatfield, left, receives one of two 2009 Distinguished Service Awards from the World Council of Credit Unions (WOCCU) during the World Credit Union Conference in Spain. Presenting the award is WOCCU director Ron Hance.
Click to view larger image Canada's Wayne Nygren accepts the Distinguished Service Award from WOCCU director Ron Hance during the World Credit Union Conference in Barcelona, Spain.
Click to view larger image World Council of CUs (WOCCU) presented the 2009 WOCCU Young Credit Union People (WYCUP) Program scholarships to these recipients during the World Credit Union Conference in Spain. ( Photos provided by the World Council of Credit Unions)
Also five nominees received scholarships through the WOCCU Young Credit Union People (WYCUP) Program during the conference, held in Barcelona, Spain this week. The 2009 Distinguished Service Awards, WOCCU's highest honor, went to David Chatfield, retired president/CEO of the California and Nevada Credit Union Leagues, and to Wayne Nygren, retired CEO of Credit Union Central of British Columbia. Chatfield spent his entire career in the U.S. credit union movement. Nygren is a former economist for the bank of Canada who joined the country's credit union movement in 1975. Both Chatfield and Nygren served as members of WOCCU's board of directors prior to their retirements in 2006. Nygren's service included development activities in Hungary, Thailand and Latin America. Upon Chatfield's retirement, WOCCU's Worldwide Foundation for Credit Unions established the David L. Chatfield International Training Fund to support international credit union development. Also honored were 16 WYCUP participants from nine countries. Of those, five received scholarships. They are:
* Julie Ferguson, Ireland; * Ross Lambrick, Australia; * Carolyne Luvembe, Kenya; * Jeff Rout, Canada; and * Amy Stanton, U.S.
The five will each receive an all-expenses-paid trip to The 1 Credit Union Conference, a combined event held jointly by WOCCU and the Credit Union National Association (CUNA) in Las Vegas next July. Also recognized were members of the first "international" class of Credit Union Development Educators (DE). The National Credit Union Foundation program requires those working toward the international DE classification to attend an international event, such as WOCCU's conference in Barcelona. For more highlights of the conference, use the resource link. All presentations and photos are available to download.

Network Solutions breach affects nearly 574000 cards

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HERNDON, Va. (7/30/09)--A Web services provider that caters to small and mid-sized online retail businesses announced last week that hackers had broken into its servers and stolen information on 573,928 debit and credit card accounts from 4,343 customers during the past three months. Network Solutions, based in Herndon, Va., discovered in early June that hackers had gone into services that provide e-commerce services such as website hosting and payment processing to about half of its customer base. They left a malicious code, which has been removed. Credit unions could suffer some peripheral losses if members see fraudulent expenditures on credit or debit cards they used to purchase items from the retailers involved or if they have a number of members who need their compromised cards re-issued. "It was determined that the code may have been used to transfer data on certain transactions for approximately 4,343 of our more than 10,000 merchant websites to servers outside the country," Network Solutions said on www.careandprotect.com, a website the company created to deal with questions about the hacking. "The code may have captured transaction data from approximately 573,928 cardholders for certain date periods this spring. Exposure varied by merchant, but in all cases it took place sometime between March 12, 2009 and June 8, 2009. Transactions after June 8, 2009, were not exposed to the unauthorized code," the company said. The company said that so far, it had no reports or any other reason to believe that the stolen information has been misused. It removed the code promptly. All of the e-commerce servers are functioning properly and no servers supporting Networksolutions.com customers were affected. Network Solutions has begun notifying retailers affected and is offering to notify the retailers' customers as well. It also is offering to pay for 12 months of credit monitoring service through TransUnion for each consumer whose data were compromised.

MDDCCUA testifies for Baltimore fin-lit resolution

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BALTIMORE (7/30/09)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) was among those testifying on behalf of a financial literacy resolution, which passed unanimously, at a Baltimore City Council education subcommittee hearing July 23. The resolution, introduced by Councilwoman Helen Holton and co-sponsored by 11 of the 13 members of the council, requests the new Board of School Commissioners and the CEO of Baltimore City Schools to examine the feasibility of requiring students to pass a course in financial literacy before they can graduate (FOCUS Newsletter July 27). Seven counties in Maryland already have financial literacy requirements. During his testimony, Brian Tate, MDDCCUA's vice president of legislative affairs, encouraged the council to approve it unanimously. Other supporters attending included Dorothea Stierhoff, senior public affairs specialist from MECU; Dr. Alan Cox and Mary Ann Hewitt from the Maryland Coalition of Financial Literacy; and Chris Dipetro of the Mid-Atlantic Financial Services Association. MDDCCUA is a member of the coalition and MDDCCUA CEO Mike Beall is a member of the coalition's Executive Committee. Members of the coalition include several credit union representatives. Among them, Stierhoff; Rob Windsor, CEO of First Financial FCU; Richard Webb, CEO, Atlantic Financial FCU; and Kalimah Mathews, business development manager, Signal Financial FCU. The next step will be to present the resolution before the City Council. MDDCCUA said it will continue monitoring its progress.

CU System briefs (07/29/2009)

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* WASHINGTON (7/30/09)--The District of Columbia office of the Maryland and District of Columbia Credit Union Association (MDDCCUA) has moved to 401 C Street NE, lst Floor, Washington, DC 20002. The new facility is located next to the Credit Union House and provides offices for MDDCCUA staff and meeting space. Vice President of Legislative Affairs Brian Tate and Director of Public Affairs Sarah Turner have offices in the new facility. Their phone numbers have not changed. The association said the new space keeps a strong local presence in the district, is close to Capitol Hill and is more economic (FOCUS Newsletter July 27) … * COLUMBUS, Ohio (7/30/09)--Ohio Credit Union Foundation (OCUF) says it is well on its way to its goal of providing $250,000 in grants this year. During the first six months of 2009, the foundation awarded more than $150,000 in grants to promote financial independence through credit unions. It funded six financial education grants totaling $112,901 for student education and awareness programs, student-run credit unions, production of Biz Kid$, and creation of a money skills board game. It helped 27 credit union leaders attend 10 state and national professional development opportunities. And it provided an outreach grant to secure the services of a professional grant writer to seek funds for establishing a new Latino credit union in South Toledo. OCUF also has contributed to the World Council of Credit Unions' disaster relief fund to assist credit union employees, volunteers and members affected by brushfires in Australia (eLumination Newsletter July 22) … * SEATTLE (7/30/09)--Della Dimond, a former bookkeeper at Alaska Airlines/Horizon Air Employees FCU, Seatac, Wash., was convicted Thursday of embezzling nearly $109,000 in $50 and $100 bills from the credit union between November 2001 and November 2003. U.S. District Judge John Coughenour convicted Dimond of one count of embezzlement of credit union funds and set a sentencing date of Oct. 30. Dimond began work at the credit union in 2001 and was the sole employee responsible for counting cash daily. In November 2003, credit union officials discovered a large amount missing. She quit the credit union. She faces up to 30 years in prison (Seattle Times July 27) … * BRIDGEWATER, N.J. (7/30/09)--Financial Resources FCU Foundation announced it has raised $15,000 at its annual charity event to benefit Ocean of Love, an organization dedicated to helping children with cancer and their families. Sponsoring the event were Diebold Inc. of North Canton, Ohio, and James Toyota Scion of Flemington, N.J. For the past 17 years, the credit union and its foundation have raised more than $375,000 to benefit charities and medical institutions that provide services to needy children, reported the New Jersey Credit Union League (Weekly Exchange July 20) …

Mass. CUs among initial lenders in homebuyer program

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BOSTON (7/30/09)--Massachusetts Gov. Deval Patrick announced the approved lenders that will participate in the MassHousing First-Time Homebuyer Tax Credit Loan Program. The group includes several credit unions. The program will allow first-time homebuyers to borrow up to $8,000 in advance of their federal tax credit for homes purchased with a MassHousing loan before Dec. 1. Credit unions involved with the program include:
* Greater Springfield (Mass.) CU; * Holyoke (Mass.) CU; * Metro CU, Chelsea, Mass.; and * St. Anne’s of Fall River (Mass.) CU.
To qualify, buyers must have a MassHousing mortgage through an approved lender, use the home as a principal residence for a minimum of three years, and purchase a one, two, three or four-family home from a seller unrelated to the buyer by Dec. 1. Buyers will have the principal and interest payments on the tax credit loan deferred from the time of closing until the loan due date of June 1. If they do not repay in full, it will be amortized for 10 years at the same interest rate as their first mortgage loan.

Small-biz-loan demand up Schenk tells CNBC

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NEW YORK (7/30/09)--The demand for credit union small business loans is up, a Credit Union National Association (CUNA) economist told CNBC. Mike Schenk, CUNA senior economist, told the network Tuesday that demand for small business loans at credit unions has increased 6% compared with commercial banks. CNBC also mentioned a small business owner who received a loan from a credit union at 0% interest. CUNA provided the news outlet with information that led to the interview. The loan will save business owner Harley Nobli $22,000 in interest per year. “The credit union was able to loan the money when the community and commercial banks were not,” Nobli said. CUNA has said that an increase in credit unions’ member business lending cap--currently at 12.25%--could help the country's economic recovery by providing small businesses with more of the credit they need.

CU CEOs question puts Bernanke on the record

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KANSAS CITY, Mo. (7/30/09)--Mazuma President/CEO Rob Givens put Federal Reserve Board Chairman Ben Bernanke on the record when Givens questioned Bernanke about the changing landscape of consumer protection during a special edition of “NewsHour with Jim Lehrer” Sunday.
Ben Bernanke was put on the record when a credit union CEO asked him about the changing landscape of consumer protection during a taping of PBS’ “NewsHour” Sunday in Kansas City, Mo. (Photo provided by the Missouri Credit Union Association)
During the television broadcast, Bernanke took questions from an audience in a town hall-style forum. The audience consisted of 190 Kansas City-area residents, including Givens. Givens asked Bernanke about consumer protection, including the increasing powers given to the Federal Reserve, the existing responsibilities of the Federal Deposit Insurance Corp. (FDIC), National Credit Union Administration (NCUA) examiners and the proposed Consumer Financial Protection Agency (CFPA). Bernanke said he wasn’t opposed to the agency but has some reservations. He was concerned about the overlap among the FDIC, NCUA examiners and CFPA. “It’s a tough issue, and I know Congress is going to be wrestling this for some time,” Bernanke said. Givens said he was honored to participate in the town hall and pleased that credit unions were represented (The Missouri difference July 29). “I appreciated [Bernanke’s] expressed reservations about adding yet another federal agency to the regulatory and compliance structures already imposed on credit unions,” Givens said. “Since credit unions were generally not part of the current crisis, the added costs and burdens of oversight do not seem necessary.” The material from the town hall will be included on “NewsHour” broadcasts this week. The entire taping, called “Bernanke on the Record,” is scheduled to run Friday on PBS television. Mazuma CU, Kansas City, has $368 million in assets.

Reg debate sparks WOCCU conference session

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BARCELONA, Spain (7/30/09)--The future of financial regulation will look different thanks to the current global economic crisis, said Karl Cordewener, deputy secretary general of the Basel Committee on Banking Supervision, at the World Council of Credit Unions' (WOCCU) World Credit Union Conference. What that future will look like, however, was the topic of lively debate during the 90-minute closing panel discussion on current regulatory trends and future possibilities for differ types of oversight. Cordewener was one of six international regulators WOCCU brought together for the conference this week in Barcelona, Spain. Also on the panel, which was moderated by Pete Crear, WOCCU president/CEO, were:
* Jan Engström, board member, the International Accounting Standards Board (IASB); * Brandon Khoo, executive general manager, the Australian Regulatory Authority; * Andy Poprawa, president/CEO, the Deposit Insurance Corp. of Ontario, Canada; * George Reynolds, senior deputy commissioner, Georgia Department of Banking and Finance in the U.S.; and * Lesley Titcomb, director, the Small Firms and Contact Division, and sector leader for the Retail Intermediaries and Mortgages for Great Britain's Financial Services Authority.
Click to view larger image Panel participants in the World Credit Union Conference closing session included, from left, Karl Cordewener, Jan Engstrom, Brandon Khoo, Andy Poprawa, George Reynolds, Lesley Titcomb and Pete Crear.
Click to view larger image Credit unions have an advantage because they know their members, said the Basel Committee on Banking Supervision's Karl Cordewener during a panel at the World Credit Union Conference.
Click to view larger image Profit from banks' mistakes and learn to do things right, advised National Association of State Credit Union Supervisors' George Reynolds, during a regulators' panel at the World Credit Union Conference in Barcelona, Spain. (Photos provided by the World Council of Credit Unions)
"One of the lessons we learned from the crisis is that financial institutions should know their customers," Cordewener said. "That's something we all can learn from credit unions because you know your members very well." Several regulators cited advantages credit unions held during the crisis based on their size, the quality of their member deposit-based capital and other familiar credit union features. However, all regulators cautioned that the future of regulations would change based on hard lessons learned from the crisis. "We have received two demands from the [Group of 20] nations," said IASB's Engström. “Reduce the complexity of financial reporting and push for global conversions. The markets are global but we are often under pressure from local regulators to favor local conditions over global systems." Engström also referred to the positive influence several letters from WOCCU, sent to the board earlier this year, had in helping IASB better understand the issues raised by inappropriately regulating small to medium-sized institutions, including credit unions. “IASB just issued regulations for smaller institutions, and that may be our greatest contribution in helping global operations for your businesses," he said. All participants agreed that 2008 had been a tough year for institutions and regulators worldwide. “As regulators, our job is to make sure people don't make mistakes," said Canada's Poprawa. “Sometimes we win and sometimes we lose." Unlike other countries, Canada has about a dozen provincial regulators that focus on credit unions, Poprawa said. Canada has fared better than many other countries in the face of the crisis, but the country's smaller credit unions still face sustainability issues and the threat of mergers. The situation in the U.S. is not nearly as positive, said Georgia regulator Reynolds, who also serves on the board of the National Association of State Credit Union Supervisors (NASCUS). “Last year I closed five banks," Reynolds said. “This year I have already closed 14 banks, including six banks last Friday just before leaving for Barcelona." U.S. credit unions have found themselves awash in the country's financial crisis fueled by mortgage defaults and loan losses. However, credit unions by their nature have fared better than many of their for-profit counterparts, largely due to the quality of their capital and their relative lack of involvement in commercial investments and loans. Reynolds urged participants to learn from the lessons of the past. "Profit from the experiences of banks that didn't do it right so that you can get it right in the future," he said. Credit unions in the United Kingdom avoided major losses due largely to their lack of involvement in the commercial market and minimal role in mortgage lending, according to Titcomb. Australian credit unions faced a crisis of member confidence when an irresponsible press last year began advising consumers that smaller institutions were not safe, causing a deposit flight to the bigger banks, said Khoo. Although conditions appear to be improving, many Australian credit unions still struggle with profitability and credit quality, he added. Several audience members raised issues with the panel, including whether regulators should drive reform for financial conditions that less-than-stringent oversight may have had a hand in creating. Opinions differed, but all panelists agreed that regulators would be more vigilant going forward, having learned from the lessons of the past. Opinions also differed as to whether the economy had bottomed out, a topic Crear raised with the panelists. “That's the trillion-dollar question," said Khoo.

Recession slowing growth of CU lending

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MADISON, Wis. (7/30/09)--The ongoing recession is taking its toll on credit union lending, according to a Credit Union National Association (CUNA) economist’s analysis of CUNA’s monthly sample of credit unions for June. “For the first six months of the year, credit union loan balances rose 0.7%, significantly lower than the 3.1% reported for the same period last year,” Steve Rick, CUNA senior economist told News Now. “Americans are deleveraging their balance sheets by paying down debt or slowing their debt accumulation.
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“Credit unions should expect the loan portfolio to rise 5% this year, below the past five-year average of 8.4%,” he added. Credit union loans outstanding, which totaled $584.5 billion, increased 0.2% during June. It also increased 0.7% during the first six months of 2009, down from a 3% increase during the same period of 2008. Fixed-rate mortgages led June loan growth, rising 1.5%, followed by credit card loans (1.4%), unsecured personal loans (0.9%), used-auto loans (0.7%), and home equity loans (0.2%). However, during this period, new-auto loans declined (-0.3%), as did other mortgages (-0.6%), other loans (-0.9%) and adjustable-rate mortgages (-1.6%).
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Credit union savings balances totaled $754.5 billion for June, declining 0.2%, but grew 8.2% during the first six months of 2009. During this period, money-market accounts led savings growth with a 1.5% increase, followed by regular shares, which increased 1.1%. Also during this period, one-year certificates essentially remained constant--increasing less than 0.05%--while individual retirement accounts and share drafts declined 1.1% and 5.6% respectively. “With fears of job losses on the minds of many Americans, the U.S. savings rate rose to 6.9% recently,” Rick said. “Credit union savings balances have responded with an 8.2% rise in the first half, up from 6.4% last year.” Regarding asset quality, credit union 60-plus-day delinquencies declined to 1.5% in June from 1.7% in May. The loan-to-savings ratio decreased slightly to 77.5% in June. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities-- remained constant at 20%. The movement’s overall capital-to-asset ratio increased to 9.8% in June 2009. The total dollar amount of capital is $88 billion.

Irish CU regulator stops dividends payout

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DUBLIN, Ireland (7/29/09)--Financial concerns caused Ireland's credit union regulator to intervene and prevent 76 individual credit unions from paying dividends they had originally proposed for their members last year. The move came after the regulator expressed concern that the bodies’ financial position was not strong enough to pay their target dividend or interest rebate (Sunday Business Post July 26). Some 101 credit unions contacted the regulator late last year regarding their dividends after being instructed to do so if they could not pay dividends in accordance with previous guidance from the regulator’s office. Each credit union was notifed that there was a need to strike ‘‘an appropriate balance’’ between rewarding savers and borrowers while maintaining the solvency of each credit union. The regulator, headed by Brendan Logue and part of the Financial Regulator, reassessed the scope for dividend payments in regard to the trading position, liquidity position and loan arrears of each organization, the newspaper said. Agreements were reached between the regulator and each body that reduced the total dividend among the 76 credit unions, which was instead transferred into the reserves of the credit unions in question.

CU robbers impersonate police to swindle elderly woman

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CINCINNATI (7/29/09)--Two credit union robbers impersonated police to swindle an elderly woman out of $8,400 last week. A 96-year-old woman told police that a man and woman claiming to be police officers came to her home and asked her to go with them to Cinco Family Financial Center CU in Cincinnati. They told her that they were conducting an investigation on her account. Because the woman had lost money in her account several years ago, she went with them to the credit union (The Cincinnati Enquirer July 24). The robbers asked the woman to provide them with blank checks. She complied, and the man and woman took $8,400 from the woman’s account. After they took the money, they put the woman in a cab so she could return home. The woman was not injured. Earlier this month, three men claiming to be police officers kidnapped a 92-year-old man and forced him to withdraw $4,500 from his bank account. Police do not know if the incidents are related, the newspaper said. Cinco Family Financial Center CU has $120 million in assets.

Card balances shrinking says TowerGroup study

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MADISON, Wis. (7/29/09)--Credit unions may be interested in knowing that revolving balances on credit cards are shrinking at double-digit rates, according to a recent TowerGroup study. The study examined recent economic trends and consumer purchasing behaviors that are forcing financial institutions to modify their credit card lending practices. The study also indicated:
* Unused credit lines at card issuers grew 70% from 1994 to 2008 to more than $4.7 trillion; * During the first quarter of 2009, credit card issuers reported their first negative annualized return on assets since the 1970s. The industry also could be in the red for 2009; and * Consumers are saving at historic rates of more than 6% and are shifting to debit cards from credit cards as a preferred means of payment.

CU in-school branches growing

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LANCASTER, Pa. (7/29/09)--The number of credit union branches in schools is growing, and will likely increase as the recession continues, according to a Pennsylvania newspaper. The Lancaster New Era noted Monday that a Wheatland FCU branch will open in Hempfield High School this fall--the first in Lancaster County, Pa. Though the Wheatland FCU branch is the first in the area, there are many in-school branches in Pennsylvania and other states. Last year, 746 schools in 35 states had in-school credit union branches, according to the Credit Union National Association (CUNA). The figure has more than doubled in five years, the newspaper said. Phil Heckman, CUNA director of youth programs, said the increase in school branches correlates with an increase in desire by teachers and schools to teach youth about finances. The growth will continue because the recession has increased concern about savings and debt, he added. In-school branches can be “money losers,” but their goal is to educate community members, Mike Wishnow, Pennsylvania Credit Union Association (PCUA) senior vice president of communications and marketing, told the newspaper. The in-school branches give back to the community because they teach youth about finances. In Pennsylvania, the PCUA gives grants of up to $10,000 to help credit unions set up branches in schools, the newspaper said. Credit unions focus on financial education because they believe that when community members make smart decisions with their money, the credit unions will benefit, Heckman said.

CU robber goes to confession returns money

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WALNUT CREEK, Calif. (7/29/09)--A man who robbed a branch of Patelco CU turned at least part of the money he stole over to a catholic priest after taking part in confession at a church last week. Police do not know the name of the man who went to a Walnut Creek, Calif., church Sunday night and told the priest during confession that he had robbed the Walnut Creek branch of Patelco CU Thursday afternoon. He left the church after giving the priest $1,200 he said he had robbed from the credit union (Contra Costa Times July 28). After the man left, the priest called the police. “I don’t know if that was the entire amount or a percentage of the amount,” Shelly James, Walnut Creek police lieutenant, told the newspaper. “He said he felt remorse.” After handing the Patelco teller a note Thursday, the man claimed he had a gun. Police will arrest the robber when he is found, James told the paper.

N.Y. association inducts four into CU hall of fame

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ALBANY, N.Y. (7/29/09)--Four credit union officials will be inducted into the Credit Union Association of New York’s Hall of Fame Aug 5. Hall of Fame inductees are individuals who have had a significant impact on credit unions at the local, state or national level, and have dedicated their lives to the philosophy and success of the credit union movement. The ceremony will be held during the association’s annual Convention in Saratoga Springs, N.Y. Inductees are:
* Kathleen A. Frawley, who first became a member of Buffalo (N.Y.) Metropolitan in 1965. She joined the credit union’s supervisory committee and then became the first woman elected to serve on the credit union’s board of directors. She has held the positions of treasurer and first vice president and is currently the board’s second vice president. Frawley also is the membership officer, chairperson of the credit union’s education committee and an alternate on the credit committee. * Patricia H. McManus, who has devoted her life to Buffalo (N.Y.) Metropolitan FCU and the credit union’s “people helping people” philosophy. She was hired by the credit union as a frontline teller after graduating high school in 1956. In 1990, she was named manager--a position she held until her retirement in 1996. In the six years she led the credit union, McManus increased the credit union’s asset size by 19% and their loan portfolio by 25%. After retiring from 41 years of service, she accepted an invitation to join the credit union’s board of directors. She was elected secretary, a position she still holds. * Richard K. Moore, who was a founding member of Reliant Community FCU, Sodus. He joined its board of directors 15 years later in 1985 and has served as board chairman since 1986. He also is a member of the credit union’s supervisory committee. Moore stays current with credit issues, regularly attending conferences and other training programs. In 1997, he received the designation of Certified Credit Union Director from the Credit Union Executives Society. Moore is also an active member of the National Association of Credit Union Chairmen. * James E. Thierman, who was instrumental in establishing a credit union for the employees of the Dresser Clark Company and became one if its original members in 1972. In 1982, after many local mergers, the credit union converted to a community charter known today as Olean (N.Y.) Area FCU. From those first days, Thierman served as a member of the supervisory committee and later as a board member. He continued in that capacity until his official retirement in May 2008. During his board tenure, Thierman provided leadership and guidance, ensuring the credit union’s current success while providing a solid foundation for its future.

Jolette named WOCCU chair

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BARCELONA, Spain (7/29/09)--Barry Jolette, president/CEO of San Mateo CU in Redwood City, Calif., has been named chair of the World Council of Credit Unions (WOCCU). Jolette succeeds Melvin Edwards, who has represented the Caribbean Confederation of Credit Unions on the WOCCU board of directors for the past 11 years. Jolette was named chairman during Tuesday’s general session at WOCCU’s World Credit Union Conference in Barcelona, Spain. “Thomas Edison once said, ‘If we do all that we are capable of doing, we will astonish ourselves at what we can accomplish,’” Jolette said. “I've always been astonished at how far credit unions have come and how much value you bring to your members.” Joining Jolette are:
* First Vice Chair Manuel Rabines, Peru; * Second Vice Chair Grzegorz Bierecki, Poland; * Treasurer Mark Bailey, Ireland; and * Secretary Penny Reeves, Canada.
Click to view larger image Barry Jolette, new World Council of Credit Unions chair, (left) accepts the chain of office from former chair Melvin Edwards at the World Credit Union Conference in Barcelona, Spain.
Click to view larger image Eric Dillon, chief operating officer of Servus CU, Alberta, Canada (left), Mark Degotardi, panel moderator, and Luis Pastor, president/CEO of Latino Community CU in Durham, N.C., discuss growth during Tuesday’s general session at the World Credit Union Conference in Barcelona, Spain. (Photos provided by the World Council of Credit Unions)
Other changes to the WOCCU board were announced at the conference. Edwards and Neil McDonald announced that they would resign their positions as directors at the close of the World Credit Union Conference. Their terms, which will expire in July 2010, will be filled by Yvonne Ridguard, Jamaica, and Marlene Shiels, Scotland. After the new board was presented, Luis Pastor, president/CEO of Latino Community CU, Durham, N.C., and Eric Dillon, chief operating officer of Servus CU, Alberta, Canada, explained how credit unions began serving Hispanics and youth members. “We didn't know the challenges that we faced,” said Pastor, whose credit union was established to help stem the tide of growing violence against Durham's Latinos, many of whom carried cash because they lacked relationships with financial institutions. “I was asked if I had a plan B in case of failure, but I didn't even have a plan A.” What Pastor did have, he said, was a ready market waiting to be served. Latino Community grew quickly in size and sophistication, earning a Herb Wegner Memorial Award for Outstanding Organization from the National Credit Union Foundation in 2003 for making financial services available to Durham's Latino community. At Servus, Canada's third-largest credit union, concern over the graying of its membership prompted the establishment of “Young and Free Alberta.” The award-winning program reaches out to potential members, age 17-25, through an approach characterized by specific marketing imagery, products catered to younger members, an increased online presence and a spokesperson recruited from the same demographic group. “These were members who did not want to belong to their parents' or their grandparents' institution,” Dillon said. “We created a credit union within a credit union.” Both speakers said earning trust with their specific market segments was a critical factor for growth. They also cited a need to understand the nature of the “community” that each credit union was attempting to serve. “The definition of the term ‘community' has changed, especially for young people,” said Dillon. “Your community is no longer made up of the people next door; today, it's wrapped around personal values and the concept of people helping people.” “Young and Free Alberta” has spawned similar programs in Texas and South Carolina.

Charges filed against robbers who stole 250000 from CU

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MUNCIE, Ind. (7/28/09)--Formal charges were filed last week against two individuals who allegedly stole $250,000 from an Indiana credit union. John Repass and Stanley Dewayne Wills have been charged with felony armed robbery, conspiracy to commit armed robbery and theft in connection with a May 27 robbery at Industrial Centre FCU. The two allegedly stole $250,355 from the Muncie, Ind., credit union (Star Press July 26). Wills is still at large. Repass recently was arrested in Midvale City, Utah. Police are working to extradite him from Utah, the newspaper said. Wills and Repass allegedly entered the credit union around 1 p.m. Wills took the female employees to the vault, while Repass took the male employees to a back room. After taking money from the vault, the robbers fled in a car driven by Wills’ girlfriend. The woman, Maranda Conley, was arrested June 16. Police seized a garbage bag full of money from her residence. Industrial Centre FCU has $39 million in assets.

Laid-off CU employees form networking group

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APPLE VALLEY, Calif. (7/28/09)--Like credit unions, former credit union employee Clara Gaston's motto is 'people helping people,' and she believes that her motto should not change just because she no longer works for High Desert FCU. Gaston and about 11 other former employees of High Desert FCU in Apple Valley, Calif., who were laid off earlier this year, have used this motto when they formed a networking group to help other laid-off individuals with job leads and resources. The group is called the Sisterhood of Support, or the S.O.S Ladies (Daily Press July 27). The S.O.S Ladies meet once a month to discuss their situations and cope with unemployment. For one group member, Maxine Callaway, a former assistant branch manager at High Desert, a loss of income is just one part of her pain. She told the Daily Press that she misses the members. Since the group’s formation, one member has found employment, which is encouraging, the group told the newspaper. The National Credit Union Administration (NCUA) placed High Desert FCU into conservatorship in October by the National Credit Union Administration. Last month, NCUA approved Alaska FCU’s purchase of certain assets and assumption of shares and certain liabilities of the credit union. Alaska USA FCU, Anchorage, now serves High Desert members (News Now June 19).

Fraudulent checks circulating with CUs name

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MEADVILLE, PA. (7/28/09)--Fraudulent checks bearing the Meadville (Pa.) Area FCU name and a distorted logo are being mailed to various individuals nationwide. The check is made payable to the individual in the amount of $2,950.00 with a date of July 9. The item is printed on burgundy check stock and at first glance may appear valid. However, a closer look reveals that MidAtlantic is misspelled and other items are placed in the wrong locations on the face of the check (Life is a Highway July 27). The checks are accompanied by a letter from Greenwater Mystery Shopping. The recipient is asked to complete certain tasks within 48 hours. A request to call its office is listed first. Then, the recipient is asked to go to a local Sears or Wal-Mart and send a money gram to someone in Canada. Meadville Area FCU is gathering evidence to assist the U.S. Postal Investigators in their pursuit of the perpetrators. Anyone with relevant information should contact the credit union.

IWashington PostI CUs offer better rates fees

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WASHINGTON (7/28/09)--Credit unions offer higher savings rates, lower fees and great personal service when compared with bigger banks, said the Washington Post Sunday. Although big banks also want consumers’ business, they are alienating customers by charging higher fees and employing more stringent lending standards, the newspaper said. Even as competition for business increases, the bigger banks, such as Bank of America and Wachovia, continue to raise fees, the Post added. However, credit unions are different, the paper said. It also pointed readers to the Credit Union National Association’s website and research. “Credit unions focus on their members (and almost anyone can join one),” the Post said. “According to a study by the Credit Union National Association, credit unions charge an average of $25 for overdrafts; banks charge an average of $30. “To find one, check out the Credit Union National Association’s site. You may be eligible to join one where you work or live or because a family member belongs,” the paper added.

CU System briefs (07/27/2009)

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* BUFFALO, N.Y. (7/28/09)--The Summit FCU, Rochester, N.Y., is acquiring Kenton FCU, Tonawanda, N.Y. Kenton members voted in favor of the merger Thursday. The resulting credit union will have 10 branches and more than 59,000 members. The Summit also will gain $11.8 million in assets as a result of the merger. All Kenton employees will join The Summit and will begin doing business under The Summit Oct. 1 (Buffalo News July 25). Kenton serves American Axle and O Cello Sponge Corp. employees and employees of other companies in Buffalo, N.Y. Kenton has $11.8 million in assets. The Summit has $427 million in assets ... * HONOULU (7/28/09)--Ariel Chun, University of Hawaii FCU president/CEO, is set to retire at the end of the year (Honolulu Advertiser July 24). The credit union has created a search committee for Chun’s replacement. University of Hawaii FCU has $57.5 million in assets ... * MERIDEN, Conn. (7/28/09)--The Credit Union League of Connecticut’s Small Task Force has authorized the availability of ten $500 scholarships to cover the cost of registration for the league’s 2009 leadership conference Sept. 11-13. To be eligible, credit union representatives must be from a credit union with less than $20 million in assets and be affiliated with the league. The scholarships will be awarded on a first-come, first-served basis. One scholarship will be given per credit union, the league said ...

CUs are superheroes says IN.Y. TimesI blogger

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NEW YORK (7/28/09)--With the current financial crisis gripping the U.S., credit unions are stepping up like superheroes to offer better financial rates to the public, which has lost trust in large financial institutions, said an economics professor Monday in a New York Times blog. “Credit unions always seemed like Dullsville to me,” wrote Nancy Folbre, economics professor at the University of Massachusetts-Amherst. “I never bothered to check out the interest rates, much less the governance structure of credit unions I was eligible to join. “But in the wake of the financial crisis, they began to look more like Clark Kent, who turned out to be Superman,” she continued. “When the big American banks started sucking up to funds from the Troubled Asset Relief Program, or TARP, credit unions, with many fewer subprime mortgages on their balance sheets, started looking really good.” Conservative lending practices and a nonprofit status have bolstered credit unions during the financial crisis, and have allowed them to “offer higher interest rates to savers and charge lower rates to borrower than banks do,” Folbre added. When she called a local credit union, Folbre was told she could get a 4.09% annual interest rate when she opened a checking account if she agreed to cost-saving measures such as setting up an automatic payroll deposits, regularly using a debit card and receiving only electronic statements. “This is more than 10 times better than what I was getting in my Bank of America checking or savings accounts …” Folbre wrote. “Some small banks offer similar deals, and the benefits are often capped. “Still, moving my money to the UMassFive College FCU made me feel at least briefly superhuman,” she concluded.

PCUA partners with Credit Union Student Choice

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HARRISBURG, Pa. (7/28/09)--The Pennsylvania Credit Union Association (PCUA) has partnered with Credit Union Student Choice, a credit union service organization that provides private student lending services to more than 80 credit unions nationwide. Credit Union Student Choice currently works with eight credit unions in Pennsylvania. “As students and parents look to fund the gap between government-sponsored lending and the rising cost of higher education, the demand for private student loans continues to grow,” said Jim McCormack, PCUA president/CEO. “Coupled with the fact that the federal government is making broad changes to the federal student lending program and it is apparent that the student lending opportunity for credit unions falls in private student lending.” Credit Union Student Choice, launched in May 2008, also works with six credit unions to build custom graduate private student loan programs for several business schools nationwide--including the University of Pennsylvania.

Fox Crear call for personal leadership during econ crisis

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BARCELONA, Spain (7/28/09)--New levels of leadership and responsibility from all credit union executives will be key to helping the global credit union movement overcome the global economic crisis while maintaining its member service advantage. That was the message from two Monday speakers at the World Council of Credit Unions’ (WOCCU) World Credit Union Conference in Barcelona, Spain.
Click to view larger image Credit union representatives need to find their leadership within, said Vicente Fox, former president of Mexico and credit union supporter, during Monday’s general session at the World Council of Credit Unions’ World Credit Union Conference in Barcelona, Spain. (Photos provided by the World Council of Credit Unions)
“We need to discover our leadership within and commit ourselves to others,” said Vicente Fox, who spoke during the keynote address at the conference. He is a former president and Mexico and a credit union supporter. Prosperity leads to democracy, and credit unions contribute significantly to increasing prosperity, especially in developing countries, Fox added. “Credit unions are defined by two words: performance and purpose,” he said. “You perform well because you are a system strengthened by purpose, which is the key ingredient of the credit union movement.”
Click to view larger image Pete Crear, World Council of Credit Unions president/CEO, told attendees of the 2009 World Credit Union Conference that credit unions’ return on investment is in members served, and not in dollars earned.
Pete Crear, WOCCU president/CEO, echoed Fox’s thoughts. He encouraged credit union executives and volunteers to stay true to serving members. Given the global economic situation, members have never needed their credit unions more, and there are frequent indicators that the principles driving the credit union movement also have strengthened its performance, he said. “Credit unions are about people, not profits,” Crear said. “Our return on investment is never fully measured in dollars earned, but in members served, and in many cases, lives saved as a result of those efforts.” The conference kicked off Sunday with a Young Credit Union People workshop and a gathering of 80 leaders from Africa’s savings and credit cooperative movement. An opening ceremony and welcome address by WOCCU Chair Melvin Edwards also was held. “We are in service to a higher purpose of helping people worldwide gain financial strength and stability,” Edwards said. “Let us conspire here in Barcelona to solidify and strengthen the revolution of hope among the members we serve. Our mission going forward is to secure access to cooperatively owned financial institutions for all those who need and want it.”

Medill.com item on fin-lit programs notes Wis. CUs

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CHICAGO and WASHINGTON (7/27/09)--A Medill.com article about the uphill climb that making personal financial education mandatory in all U.S. schools is facing points out Wisconsin Credit Union League's work with schools as an example of financial education offered to schools at low cost. The article appeared in Medill.com (July 21), the website of the Medill School of Journalism at Northwestern University in Chicago. Financial education programs face an uphill battle due to a variety of reasons, the JumpStart Coalition for Personal Financial Literacy noted in the article. The recent change in presidential administration and the distractions of the global economic crisis problems have taken attention away from placing high school personal finance education on top of the national agenda, the coalition said. Efforts to find a national solution are thwarted by the fact that education legislation usually develops at the state or local level, said the article. Funding comes from private banks and corporations in the states. The article notes that "Wisconsin provides an example of financial education being offered to schools at low cost. Dawn Schueller, press secretary for Sen. Herb Kohl (D-Wis.), said some Wisconsin schools are partnered with the Wisconsin Credit Union League in order to receive low-cost financial education. However, the state does not yet require personal finance education in its schools."

10 is enough religious groups tell lenders

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DURHAM, N.C. (7/27/09)--Religious leaders and community organizers from throughout North Carolina demonstrated in Durham Wednesday as part of an international "10% is Enough" campaign, which seeks to cap interest rates charged by banks and credit card companies. Some credit unions agree with them. The activists had planned to march to five financial institutions, including three credit unions (The News & Observer July 23). However, two Durham-based credit unions saved them the trip. Self-Help Community CU CEO Martin Eakes and Latino Community CU CEO Luis Pastor attended the demonstration. Eakes, speaking to the crowd, said there is a reason every religion has had a prohibition against usury. "It's because the lending of money is unlike any other product. Lending money can get someone deeper into a hole just with the passage of time and no other action," he said, according to the newspaper. The activists delivered a paper developed by scholars from eight theological schools in the state to SunTrust, Mechanics and Farmers Bank, and Generations Community CU in downtown Durham. The paper provides a religious rationale for capping interest rates. The 10% cap relates to the biblical concept of tithing, or giving 10% of one's income back to the church. Interest rates for credit cards average between 12% and 14% in the past year, according to surveys. Some rates were much higher. Consumer Action's annual survey found rates as high as 22.75%. North Carolina law caps interest on some loans at 8% but a federal law passed in 1980 exempts federal banks and mortgage companies from state usary limits.

African-Americans are mobile Web pacesetters

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WASHINGTON (7/27/09)--Credit unions serving African-American members may be able to boost their online banking programs with the demographic group more than they think. New research indicates that mobile access to the Internet is growing and that African-Americans are now the most active users of mobile Internet. A new survey by Washington, D.C.-based Pew Research Center's Internet & American Life Project concluded that one-third of Americans now access the Internet from a mobile handset, such as a cell phone. More than half have connected using other wireless devices such as laptops, game consoles, and MP3 players. Forty-eight percent of African-Americans surveyed have used the Internet on a mobile device, and 29% say they go online with a handheld every day. "The notion of a digital divide for African Americans has some resonance when thinking about the wireline Internet," said John Horrigan, associate director of the Pew Internet Project and principal author of the report. "But when you introduce the mobile Internet, the picture changes, and African-Americans are pacesetters," he added (clickz.com July 22). The findings have implications for marketing programs. Credit unions using different marketing channels such as social networking sites may be able to attract the pacesetters. In the survey, 32% of U.S. adults said they used a cell or smart phone to browse the Web or use e-mail or instant messaging while on the move. That's an increase over the 24% who had done so in a similar survey in 2007. Nineteen percent of those surveyed said they accessed the Internet from a mobile device the day before this year's survey, compared with 11% in 2007. Pew Research Center attributed the growth to an increasing demand for access to information while away from home or work, and the ability to share content with others through services such as Twitter. More than 56% of respondents said they had accessed the Internet wirelessly in some shape or form. Laptop computers were the most popular methods. The survey of 2,253 people was conducted in April.

Uzbekistan CU assets up 37 members up 25

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TASHKENT, Uzbekistan (7/27/09)--Credit unions in Uzbekistan are continuing to experience growth in assets, credit portfolios and membership. The credit union system there served 125,000 members as of July 1--a 25% increase since the beginning of the year (BVV Business Report July 21). Aggregate assets of the nation’s credit unions for the first half 2009 increased by 37%. The main source for the formation of credit union resources still remains members’ deposits, the report said. Assistance for the development of credit unions is offered by the Financial Sector Development Agency under the Central Bank of the Republic of Uzbekistan, which runs a project on development of microfinancing with the Asian Development Bank. With six-year funding from the U.S. Agency for International Development, the World Council of Credit Unions (WOCCU) is working with credit unions in Uzbekistan to strengthen financial management and build a sustainable national association capable of providing a deposit insurance fund and other second-tier services for credit unions. The first credit union was licensed by the Central Bank of Uzbekistan in September 2002, WOCCU said.

S.W. CUNA Management School graduates 35

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FORT WORTH, Texas (7/27/09)--Thirty-five credit union professionals graduated Wednesday from Southwest CUNA Management School (SCMS) in Fort Worth, Texas. SCMS is a three-year course of study recognized in the credit union movement. The courses are designed to challenge and broaden financial industry knowledge and sharpen management skills for credit union professionals. This year’s graduates are from five states--Texas, Louisiana, Missouri, New Mexico and Oklahoma. SCMS took place at Texas Christian University. Graduating with honors were:
* Tamara Chambers, Complex Community FCU, Odessa, Texas, honors; * Joe Mannion, Union Square FCU, Wichita Falls, Texas, Award of Exellence; * Stephen Perry, CUNA Mutual Group, honors; and * Shawn Temple, Bossier FCU, Bossier City, La., Award of Excellence.
Other CUNA Management Schools include Madison CUNA Management School, Madison, Wis.; Southeast CUNA Management School, Athens, Ga.; and Western CUNA Management School, Claremont, Calif. To see a list of graduates, use the link.

Ohio CUs fin-lit efforts in IColumbus C.E.O.I

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COLUMBUS, Ohio (7/27/09)--Ohio credit unions and the Ohio Credit Union League are helping to improve financial literacy by working with educators and students in the classroom, according to Columbus C.E.O. magazine. The magazine noted the Ohio league’s declaration of this summer as the “Summer of Money,” where parents and youth can use the economic recession as a teachable moment about finances (Columbus C.E.O. August 2009). It also discussed the results of a statewide study the league conducted to assess Ohio’s financial literacy problems. The study found that only 10% of adults were aware of places that offer financial education. Nearly 61% of respondents said financial education was very important, but only 23% recognized efforts to encourage financial literacy in their families. About 5% said they learned about money when they were young. Parents thought schools were teaching money concepts, while schools thought parents were teaching them, according to Patrick Harris, Ohio league media relations director. “Students just aren’t getting the information,” he told the magazine. To bridge the financial literacy gap, the league developed a free financial education Website, www.moneyandstuff.info, as a resource for parents and teachers. The article noted that several Ohio credit unions, including BMI FCU, CME FCU, Members First CU and Franklin County School Employees FCU, used MoneyandStuff to teach youth financial literacy concepts. To see the full article, use the link.

CU makes 120 innovations to improve efficiency service

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BRILLION, Wis. (7/27/09)--When Best Advantage CU in Brillion, Wis., needed to relocate to a new building, it also wanted to completely change its operations. “We said, ‘How do we want our members to feel?’” Renee Maeder, Best Advantage CU business development leader, told News Now. “They need to feel great when they are here.” Best Advantage was recently mentioned in an article by the Appleton Post-Crescent about local businesses prompted to improve their efficiencies due to the economic recession. Best Advantage has increased its efficiency and provided its members with improved service as the result of 120 innovations that changed its overall operation. Best Advantage began the innovations process by partnering with Miron Construction for the construction of its new building. It then re-evaluated all of its process to look for improvements. One of the innovations involved changing staff titles. For instance, Best Advantage doesn’t have loan officers--it has financial architects, who meet with members in living rooms instead of offices. The architects have workspaces, but meet with members in much cozier, relaxing environments, Maeder said. Best Advantage also changed its traditional teller line to a “pod” environment, where members meet member specialists without the traditional teller barrier. “We’re building relationships,” Maeder said. “We really want our members to understand the difference between a credit union and a bank.” Best Advantage has realized cost savings through its innovations, such as eliminating envelopes. Instead, members donate $1 to buy reusable money holders. The money is used to plant trees. The change saves Best Advantage from buying 25,000 envelopes a year. The envelopes had an estimated life span of about three seconds before being thrown away, Maeder said. Best Advantage’s first phase of innovations took just over a year to complete. Last spring, the credit union began brainstorming about ways to improve its efficiency. The new building made the changes easier, Maeder said. The credit union is in the second phase of its innovation plan, and is now looking to change the lending department. Instead of giving each member the usual “cookie cutter” loan options, the credit union is looking to tailor options for each member. “We’re asking them, ‘What can you work into your budget?’” Maeder said. “We are not putting everyone in the same mold.” Credit unions looking to innovate should not be afraid to take chances. They also need to be aware that the planning process takes a “ton of time,” so they need to be really committed and get behind the changes, Maeder said. The changes also must involve the entire staff. Every employee was involved with Best Advantage’s changes. In one example, the member specialists created the pod environment. They took pictures of the workspace they had, and then listed what they liked, what they didn’t, and some of the things they needed. Best Advantage’s architect drew up the pods, and the credit union tried them out using model pods. With the models, the credit union was able to refine the pods and make changes. That way, when the pods were finally built, they were exactly what the staff wanted. “Had we not [used] models, it would have been a mistake,” Maeder said. The credit union also brought in Jill Greve as a team leader to help Best Advantage with its innovations process. Greve had worked at Schneider National, a shipping and trucking firm, for nine years. Best Advantage wanted Greve as a pair of fresh eyes because she hadn’t worked in the financial industry and could provide an unbiased perspective. Overall, credit unions and the financial industry in general need to change with the times and embrace technology, while still providing fantastic service to members. Some of the innovations Best Advantage completed could have been perceived as risky--but “we knew they would be a risk worth taking,” Maeder said. She also noted the importance of youth. Best Advantage receives input from its youth advisory board--which helped with the reusable money holders, for instance. “They say, ‘Look to the future--we are your future,’” Maeder said. Best Advantage has $54 million in assets.

Council conference to explore lending in stressed economy

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MADISON, Wis. (7/27/09)--Lending practices and strategies to deal with the challenges created by the current economic crisis will be addressed at the 15th Annual CUNA Lending Council Conference, Nov. 1-4 in San Diego. Participants can lean how to turn today’s challenges into tomorrow’s successes during “Earning Your Way Out,” a breakout session that will indicate the strategic and financial opportunities available to credit unions--especially in mortgage lending and housing finance. The “Lending to the Newly Credit Impaired” panel will explore the challenges and opportunities to this growing category of Americans. The panel will offer best practices for combining evaluation of members’ character and historical experience with their current credit situation. The session also will address needed risk-assessment measures for lending to borrowers, and reveal some of the most current tools for assessing credit history and credit trends. “The roller coaster ride of the past year has been enough to turn anyone’s stomach, so we’re focusing this conference on smart lending practices to help credit union professionals turn the corner and stress less,” said Bill Vogeny, co-chair of the council’s conference committee and senior vice president and chief financial officer for Ent FCU in Colorado Springs, Colo. Other conference sessions will discuss issues to help lending professionals succeed in current market conditions. They include:
* Importance of loan review; * Loan fraud in the new economy; * Regulatory compliance for 2010; * Effective consumer loan portfolio management; * Loan growth best-practices panel; * State of the auto-lending industry; and * Finance 101 for lenders.
For more information, use the link.

CU System brief (07/24/2009)

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* HIGHTSTOWN, N.J. (7/27/09)--Marianne Nancy DiNofrio, co-founder of Linwood (N.J.) Community FCU (now Jersey Shore FCU), died at home in Linwood July 21 at the age of 75, the New Jersey Credit Union League has learned. DiNofrio, who worked at Seaview Elementary School for 35 years, and her husband John established the credit union in 1979. Today Jersey Shore FCU has more than $82 million in assets. John DiNofrio is chairman of the credit union, was a longtime New Jersey Credit Union League Board member, and twice served as league chairman and as the chairman of the New Jersey Credit Union Foundation, said the league (The Weekly Exchange July 20) …

Repos fewer car loans sign of the times

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TUMWATER, Wash. (7/27/09)--Credit unions in Washington experiencing a decline in auto loans and an uptick in repossessed vehicles are attributing the trend to the recession and the slow economy. In addition to increasing bad car loans, total credit union car loans are down statewide, David Bennett, director of public relations for the Washington Credit Union League, told local newspapers (The Olympian via The News Tribune.com July 24). Washington credit unions' car loans peaked at more than $7 billion in 2007, but they dropped to $6.8 billion in 2008. They were at $6.7 billion through early March, the league said. Two Washington credit unions described their experiences. At $124 million asset O Bee CU, President/CEO Bruce Cramer noted some borrowers are voluntarily returning their cars to the Tumwater-based credit union because they can't make the payments. In a stronger economy, O Bee CU typically repossessed eight to 12 cars a year. Year to date, repossessions total 37, a small percentage of the 2,600 car loans the credit union makes each year. Of the 37 repossessions, 12 were voluntarily returned. O'Bee CU said that when a vehicle is returned, it first tries to sell the car, hoping to recover 60% to 80% of the loan. If it doesn't sell or get at least three bids, the credit union sends the vehicle to an auction company. Before selling a car, though, O Bee CU makes every effort to assist the borrower in restructuring the loan or the payment, Dave Echtle, vice president of lending, told the newspaper. To deal with 16 repossessed vehicles, Washington State Employees CU, a $1.4 billion asset credit union in Olympia, has scheduled a sale for car dealers in August. Year to date, Washington State Employees CU has repossessed 526 vehicles, compared with 700 in 2008. Of the 526 vehicles, 97 were returned voluntarily. That compares with 182 voluntary repossessions for the entire year in 2008, Ann Flannigan, spokeswoman, told the newspaper. She noted that voluntary returns are down this year so far because the credit union is working more closely with borrowers to help them keep their car.

CU raises 1.7M for slain officers families

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PITTSBURGH (7/27/09)--The Greater Pittsburgh Police FCU delivered more than $1.7 million in donations from across the nation to a trust fund set up for the families of three Pittsburgh police officers killed in an April 4 ambush while responding to domestic dispute. All the funds will go to the families of Officers Eric Kelly, Stephen Mayhle and Paul Sciullo II. Kelly and Mayhle were members of the $45 million asset credit union (Life is a Highway July 22). Nearly $10,000 of the funds came from credit unions in the Pittsburgh area. Sandy Lazzara, CEO, told the Pennsylvania Credit Union Association the credit union will continue collecting funds at several charitable events that haven't been held yet. The credit union's efforts made news when mail carriers kept delivering brick-sized packages of letters with statements of support and contributions (News Now April 8 and April 14). S C M H Employees FCU helped the Greater Pittsburgh Police FCU post millions of checks, and riverset CU provided an online T-shirt fund for the efforts. All three credit unions are based in Pittsburgh.

Spending credit card use online decreases 11

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RYE BROOK, N.Y. (7/24/09)--Overall consumer spending online for the third quarter is projected to decrease 11% to an average $277, reports a new study. That amount compares to an average $255 last quarter and $346 during third quarter last year, says the quarterly eBillme Online Spending Index conducted by Javelin Strategy & Research. The index indicates that "the recession is still impacting consumer spending and payment decisions," said Bruce Cundiff, director of payments research and consulting at Javelin. He noted that 57% of consumers plan to delay purchases because of the uncertainty in the economy. "This is almost a 20% increase from this time last year," he said. Credit unions should note another decline in credit card spending. Of those consumers surveyed, 33% expect their credit card usage to decline during the next 90 days--an increase from 25% during third quarter 2008. Half of the consumers plan to permanently reduce their use of credit cards because of changes in the economy and the new credit card legislation. "There is a visible shift in credit card usage as compared to third quarter 2008," said Marwan Forzley, president/CEO of eBillme, an online banking payment option for consumers and small businesses. "We continue to see evidence of more cash spending on our merchant sites and expect that spending and lifestyle changes will extend far beyond those economic conditions," Forzley added. Other findings:
* Consumers between the ages of 18 and 24 are twice as likely to do their back-to-school shopping online, compared with the overall consumer average of 12%. * Twenty percent of Hispanic consumers indicated they will shop online for back-to-school purchases, which was higher than the overall average.

Man found guilty in wifes death in CU lot

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OAK RIDGE, Tenn. (7/24/09)--A Knoxville man who was convicted of second-degree murder by running over his wife in the parking lot of a branch at ORNL FCU was sentenced to 35 years in prison Wednesday. Carlos Radale Cornwell, 35, protested the verdict stemming from the death of Leoned Cornwell, 42, on March 5, 2008, at an ATM outside the credit union's East Knoxville branch ( July 23 and News Now March 7, 2008) … Police had said the couple were in a car at the ATM and argued. Leoned Cornwell got out of the car, which backed over her. Prosecutors said the woman was a battered wife who was trying to stash away money to escape violence

Chrysler asks CUs aid on Cash for Clunkers

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LANSING, Mich. (7/24/09)--Chrysler incentives, including the credit union member discount, have been suspended as of Thursday, while the auto maker launches its single Cash for Clunkers campaign. The new program will run through Aug. 31. Invest in America, credit unions' auto incentive program with Chrysler Corp. and General Motors Co. (GM), has a contract with Chrysler through the end of the year. “This move by Chrysler is expected to be temporary as they restructure and get ready for the new model year," David Adams, president/CEO of CUcorp and the Michigan Credit Union League, said. CUcorp, a wholly owned subsidiary of the league, is coordinating the marketing of the Invest in America campaign. "We hope that credit unions will continue to promote Chrysler Cash for Clunkers as well as the GM CU Member discount," Adams told News Now. In the Cash for Clunkers campaign, every consumer shopping for a new vehicle within the timeframe will qualify for up to $4,500 toward the purchase of an eligible, new 2009 Model Year Chrysler, Jeep or Dodge vehicle (Life is a Highway July 23). Consumers with an eligible trade-in could qualify for double the money, or up to $9,000 for a new vehicle. Chrysler asked that credit unions support the offer under the Invest in America program during the campaign. "We will announce many ‘Invest in America’ program enhancements soon, including the expected return of CU Cash from Chrysler,” Adams said. For more details, use the link.

Hit man at CU eligible for death penalty

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NEWPORT NEWS, Va. (7/24/09)--A hired hit man convicted last week of the murder of a Navy officer outside a Virginia credit union is eligible for the death penalty, a federal jury decided Wednesday. The jury did not decide whether to sentence Runyon to death. A U.S. District Court jury ruled that David A. Runyon, 37, met the criteria to be considered for execution for his role in the April 2007 shooting death of Navy Communications officer Cory Allen Voss, 30, which took place outside a Langley FCU ATM in Newport News. The murder was designed to look like a random robbery that went awry, authorities said (Daily Press July 23). Actual sentencing will be determined in a separate hearing, which will begin Aug 19. The same 12-member jury will decide if Runyon should get the death sentence. Last year, Voss’ wife, Catherine Ann Voss, pleaded guilty to masterminding the plot so she could be with her boyfriend and collect roughly $500,000 in Voss’ death benefits. In November, she was sentenced to four life terms. Police say surveillance footage shows Runyon holding Voss at gunpoint. Voss went to the ATM at about 11 p.m. April 29. His wife reported him missing the next morning, and police found his body in the driver's seat of his pickup truck (News Now Dec. 18).

CU System briefs (07/23/2009)

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* FARMERS BRANCH, Texas (7/24/09)--The Texas Credit Union League announced its Chapter of the Year for 2008. The honors go to the Fort Worth and Big Spring chapters (LoneStar Leaguer July 23). The awards recognize chapters that excel within their asset categories on deployment of a comprehensive project of work touching seven categories: education, credit union fundraising, public relations, chapter involvement, community activism, participation in the Credit Union System and political advocacy … * BELLEVUE, Neb. (7/24/09)--SAC FCU's indirect lending program has shattered its previous record in volume, announced the $370 million asset credit union based in Bellevue, Neb. Its Indirect Lending Department posted $19.5 million in volume in June and $11.4 million in May--a 16% growth over the two-record setting months. The previous record was $11.4 million set in August 2006. Loan quality was not sacrificed and increased to 98% A & B paper. The credit union is on pace for $114 million in new-auto loans this year … * BALTIMORE (7/24/09)--MECU of Baltimore members in June received the first half of an anticipated $4.2 million cash bonus, according to the $956 million asset credit union. The loan interest rebates and extraordinary dividends were deposited into members' accounts June 30. The credit union has paid members a cash bonus every year since 1981. In 2007, the board decided to pay half the bonus in June and the second half in December. "Many of our members are teachers," said Herman Williams Jr., board chairman. By providing part of the cash bonus at the start of the summer, "it gives our teacher members some extra cash when they most need it." MECU President/CEO Bert J. Hash Jr. noted that while some area financial institutions struggled the past year, "MECU has remained well capitalized and ready to help our members with their financial needs in 2009" … * SPRINGFIELD, Mass. (7/24/09)-- STCU CU has named William "Bill" Brothers as president/CEO. He succeeds Gary Fishlock, who retired in June after six years with the $97 million asset credit union. Brothers joined STCU in January 2004 as vice president, treasurer and chief financial officer. Before then, he had more than 32 years experience in finance at two Massachusetts community banks-including vice president positions at Monson Savings Bank and Cohasset Savings Bank. He is a board member of the Pioneer Valley Chapter of the Massachusetts Credit Union League and a trustee of The Credit Union Employees Retirement Association …

Pa. CU on underserved panel at NCSL

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HARRISBURG, Pa. (7/24/09)--A Pennsylvania-based credit union was on a panel discussing the unbanked and financially underserved during the National Conference of State Legislatures in Philadelphia Wednesday.
Discussing the underserved at the National Conference of State Legislatures (NCSL) are, from left, Matt Fellowes, PEW Charitable Trust; Mike Sunseri, chairman of NCSL’s Communications, Financial Services and Interstate Commerce Committee; and Randi Marmer, associate vice president of community relations, TruMark Financial CU. (Photo provided by the Pennsylvania Credit Union Association)
Randi Marmer, associate vice president of community relations at TruMark Financial CU in Trevose, represented the credit union at the conference. She presented TruMark Financial’s history, membership, products and services. Marmer also highlighted the credit union’s community involvement and discussed its new branch in an underserved area of Philadelphia. The branch brought financial services to an area that had no financial institution for more than 60 years, said the Pennsylvania Credit Union Association (Life is a Highway July 23). On Tuesday, the conference backed the credit unions’ position on dual chartering and withdrew resolutions that favored merchants’ interchange fee positions. Chris Johnson, Credit Union National Association (CUNA) vice president of governmental affairs; and Lynn Coard, CUNA director of state advocacy, were both in attendance.

Connecticut governor signs CU student loan act

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MERIDEN, Conn. (7/24/09)--At a bill-signing ceremony Wednesday at Seasons FCU, Middletown, Conn., Gov. M. Jodi Rell signed the credit union-backed bill for a Student Loan Guarantee Program Reserve Fund.
Connecticut Gov. M. Jodi Rell and Credit Union League of Connecticut President/CEO Tony Emerson posed after Rell signed credit unions' student loan bill into law Wednesday . (Photo provided by Credit Union League of Connecticut)
Twenty-four Connecticut credit unions participate in the program, which offers low interest rates to students who live or go to school in the state and who may not qualify for traditional loans, or who already have used their resources and are having difficulty funding tuition. Rell said that in light of credit unions taking on the risk, the Connecticut Health and Education Facilities Authority (CHEFA) would provide 20% guarantees for the loans. “Credit unions remain healthy in the current economy due to key differences in our structure,” said Tony Emerson, president/CEO of the Credit Union League of Connecticut. "As cooperative financial institutions, credit unions are not reliant upon the capital markets for funding, but are instead funded through member deposits. Therefore, as the credit crunch hit much of the economy, credit unions by contrast have money that they are ready to lend out to their members," Emerson said. "In addition, it is our mission to help people make credit unions an excellent choice for a program such as Governor Rell’s Student Loan Program,” he added.

Former NCUA Vice Chair Elizabeth F. Burkhart dies

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WASHINGTON (7/24/09)--Elizabeth Flores Burkhart, 74, former vice chairman and the first woman board member of the National Credit Union Administration (NCUA), died early Thursday morning in Winston-Salem, N.C. She suffered a severe stroke on July 16. An appointee of President Ronald Reagan, Burkhart was sworn in to the NCUA Board on July 22, 1982, to complete the unexpired term of Lawrence Connell, who resigned. She served until her retirement on Aug. 17, 1990. At that time, she was NCUA's longest serving board member. During her tenure, she promoted credit union expansion, service to low income groups through the federal community development credit union program, and student-run credit unions. She worked tirelessly with youth, high schools, colleges and universities in that effort. She also championed international credit union development. "Elizabeth Flores Burkhart was a dedicated public servant who used her many life experiences--in the military, in business and in government--to serve the credit union movement to ensure its safety, soundness and development," said Dan Mica, president/CEO of the Credit Union National Association. "Our thoughts are with her family today; we appreciate all of the work she devoted to credit unions during her eight years on the board," Mica said. Before serving at NCUA, she served as associate deputy administrator for information resources management at the Veterans Administration. She arrived in Washington in 1980 as deputy treasurer of the Reagan-Bush Committee. The oldest of 13 children, Burkhart was a former U.S. Marine, teacher, and banker. She is survived by her husband, Jon, and several brothers and sisters.

Five New Orleans CEOs share views on reg reform

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NEW ORLEANS (7/23/09)--Five credit union CEOs from the New Orleans area weighed in on regulatory reform in New Orleans CityBusiness (July 20). Each CEO provided a one-sentence description of how reg reform would impact credit unions. Michelle Duhe, CEO of $87.1 million asset Shell New Orleans FCU, said the credit union industry is largely untouched by the reforms because the National Credit Union Administration (NCUA) remains an independent entity. However, credit unions likely would feel some impact with the creation of the Consumer Financial Protection Agency. Christopher Maurer, CEO of $21 million asset UNO FCU, New Orleans, noted that many of the reforms have minimal impact on credit unions. "As member-owned cooperative institutions, credit unions adhere to high standards that often don't exist at other financial institutions whose primary concern is increasing the wealth of a few large stockholders." Mark Rosa, CEO of Jefferson Financial CU, a $155 million asset credit union in Metairie, explained that the proposed financial reforms will have less of an impact on credit unions if they can keep NCUA as regulator. Janet Sanders, president/CEO of the $98 million asset Greater New Orleans FCU, Metairie, said the biggest effect would be "the increase in regulations and compliance requirements. These new regulations will require additional time and resources but will only strengthen the already successful cooperative model of credit unions." Mignhon Tourne, president/CEO of $270 million asset ASI FCU, Harahan, said the Credit Card Reform Act potentially will have little impact on credit unions because credit unions have "not participated in deceptive credit card marketing practices…We see increased consumer reform as a real credit union opportunity for industry differentiation."

USAID designates WOCCU to lead Haiti project

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MADISON, Wis. (7/23/09)--The U.S. Agency for International Development (USAID) has designated World Council of Credit Unions (WOCCU) as lead implementer for a three-year, US$34.4 million, multi-partner program to strengthen enterprise development and promote job creation in rural Haiti.
Click to view larger image World Council of Credit Unions will work with Haiti's financial institutions to bring value chain financing to Haiti's rural micro-, small and medium-sized businesses. (Photo provided by the World Council of Credit Unions)
The Haiti Integrated Financing for Value Chains and Enterprises (HIFIVE) program will work with the financial sector to bring savings, credit and remittance-linked products to underserved areas of the country and provide technical training to micro-, small and medium-sized enterprises (MSMEs). WOCCU will work with Haiti's financial institutions, including banks, to create affordable, yet profitable, financing options for MSMEs participating in established value chains. The chains are groups of individuals and/or businesses that bring a product from conception to market. OCCU will also work with the institutions to begin offering money-transfer services and remittance-linked products, as well as expand their outreach to new service areas using technologies such as point-of-sale (POS) devices, personal digital assistants (PDAs) or cell phone banking to reduce transaction costs. "Small businesses in rural Haiti face significant barriers to growth, yet they have great potential to drive economic development and bring new employment opportunities to their communities,“ said Brian Branch, WOCCU executive vice president and chief operating officer. The added the program "will bring the necessary tools--training opportunities, business connections and financial access--right to the local entities that can effect change from the ground up." Haiti is the poorest nation in the Western Hemisphere, with 80% of its population living below the poverty line. Its MSMEs are often hampered by political instability, poor infrastructure, frequent natural disasters, lack of skilled labor and limited markets, said WOCCU. While the country has shown positive economic growth in recent years, MSMEs--especially in rural areas--are still largely excluded from the formal financial system. With 70% of financial institutions concentrated in urban settings, rural households and businesses have been forced to seek less reliable funds through expensive, informal channels. WOCCU will adapt its value chain finance methodology, developed in Peru, to help Haitian financial institutions identify at which point financing brings value chain participants the best return and represents a good investment for the institution. WOCCU will provide technical assistance, mentor loan officers and offer specialized training to help commercial banks, microfinance institutions and cooperatives develop appropriate value chain financial products and services. WOCCU's field partner in the program, TechnoServe, will facilitate value chain linkages and technical assistance training among producers, producer associations, input suppliers and buyers. As a core component of the program, WOCCU will manage the distribution of USAID-funded grants to local financial institutions and business service providers to encourage the development and use of new technologies, training opportunities, partnerships with other USAID-funded programs and risk management practices. The grants are meant to encourage Haiti's conservative financial sector to innovate and grow beyond their traditional markets. WOCCU is implementing the HIFIVE program as an Academy for Educational Development (AED) sub-recipient under USAID's FIELD-Support Leader with Associates program. AED will provide oversight and documentation assistance to facilitate program activities, and Technoserve will co-implement the program with WOCCU.

Study Social medias results hard to judge

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FARMERS BRANCH, Texas (7/23/09)--Measuring the effectiveness of social media campaigns is difficult for interactive marketers, according to a new study by Forrester Research, which could have implications for credit union marketers considering use of social media channels. Of the 119 interactive marketers asked between May and June to rank such measurement capabilities on a scale of 1 to 10--“1” being “novice” and “10” being “expert”--the average response was 4.5 (LoneStar Leaguer July 22). The average is ambitious considering that social media is still less than four years old, said Emily Riley, Forrester Research analyst and report author. Few respondents reported having any established metrics for their social marketing campaigns. On average, marketers’ confidence in measuring the effect of their online brand-building wasn’t much better--5.3 out of 10. To measure the value of all types of online campaigns, marketers must focus on a customer’s engagement. However, online brand marketers rely on easy metrics, with 35% reporting they used clicks as a key performance indicator, Riley said. Engagement beyond activity can be measured for brand and direct campaigns, although only 14% of respondents reported tracking brand awareness as a key performance indicator, Riley said. Mature measurement of interactive brand marketing should include qualitative research gathered through surveys, focus groups, or listening platforms, she added. Advanced direct-response marketers should measure as far along the purchase process as possible, Forrester recommends. The University of Phoenix, for example, links its site analytics tool to its customer database to measure the quality of the leads--based on length of time enrolled--generated by its different online campaigns. Also, social media measurement should employ a variety of metrics. Marketers should start with brand-oriented--key performance indicators--for their social campaigns and then tie the involvement and interaction aspects of social media to purchase behavior, Forrester said.

Oregon CUs lobby efforts successful

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BEAVERTON, Ore. (7/23/09)--Oregon credit unions experienced successes, frustrations and opportunities as they continued to advance credit union legislative initiatives during the Oregon legislative session, which adjourned a few weeks ago, said the Credit Union Association of Oregon (CUAO). The key legislative priority for Oregon credit unions, Senate Bill 438, was signed by Gov. Ted Kulongoski on June 4. SB438 enacts several technical revisions to the Oregon Credit Union Act that will update the credit union charter in areas that include membership requirements, accounting rules, annual meeting policies and bonding requirements. The bill will allow those select employee group (SEG)-based credit unions moving to a community charter to maintain current SEG groups that would be located within their new field of membership. CUAO also introduced an amendment to SB731, which provides that funds that are exempt under federal law remain exempt when deposited in a debtor’s financial account as long as they are reasonably identifiable. “Our amendment takes the onus off of the financial institution and puts it on how the information is transmitted to us in order to determine if the funds are exempt,” said Pamela Leavitt, CUAO senior vice president of governmental affairs and public relations. “We worked the committee and came up with the votes needed for our amendment. The final bill passed and was signed into law with our language.” Also, CUAO focused on financial education by supporting legislation that highlighted the importance of financial literacy in the classroom. CUAO and credit unions testified in support of SB501, which would add “finances” to essential learning skills. The bill also requires school districts to provide curriculum in finances. SB441 is a bill that would define “finances” to mean “curriculum designed to achieve financial literacy and to give students personal financial management skills by teaching the basic principles involved with earning, spending, savings and investing money.” CUAO said it will continue efforts to promote this issue before the state legislators. State Treasurer Ben Westlund introduced SB600 to allow credit unions to accept public deposits over the current limit of $250,000 per account. The bill had a hearing, but no further action was taken. CUAO said it hopes to continue working with Westlund on the issue. CUAO participated in a work group to find compromise on SB628, a bill to require mandatory mediation between trustee and grantor before sale to a foreclosure residential trust deed. CUAO fought to have the bill changed to give the borrower a modification request form, along with the notice of sale, instead of forcing a required meeting between borrowers and lenders. CUAO succeeded in helping pass the changes. CUAO also was involved in several other legislative issues, including bills about licensing mortgage bankers and brokers, priority liens for condo and homeowner associations, robbery issues, employments issues and several lending issues. A final report on the 2009 legislative session will be completed in early fall.

Spending less is new normal to 32 of Americans

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PRINCETON, N.J. (7/23/09)--Spending less and saving more have become even more entrenched as the "new normal" for many Americans surveyed this month by the Gallup Poll. That can impact both loans and savings at credit unions. July's results show little significant change from Gallup's April spending/savings habit study. In the July study, 32% of Americans surveyed reported that spending less will become a "new normal" for them in the years ahead, while 8% say they'll be spending more. That leaves 60% of Americans who haven't changed their spending habits during the survey period. Continued savings by members will find their way into credit unions as deposits, but less spending also means consumers and members are still waiting to see what the economy will do before they finance that new car or remodel their home. "Clearly there will be at least some negative repercussions on consumer lending going forward," said Gallup's report. "But at the same time, two-thirds of Americans say that they have not changed their spending habits, that their spending changes in recent months will not be permanent in the years ahead, or that they will actually be spending more." The impact of these stated intentions depends on how much the individuals would have spent in the first place, before deciding to decrease spending. "The economy would be affected more by a decrease in spending among previously high-rolling millionaires or affluent suburban families than it would by a downward shift among the same number of low-income, low-spending senior citizens," said Gallup's report. The poll contains one surprise: There weren't major differences in the impact of the recession across income groups. Those who said their new normal is to spend less were across the board in income. However, lower-income respondents were slightly more likely than higher-income Americans to say their new normal pattern would be spending more. On the savings end, one in four Americans say saving more is their new normal. In both the April and July surveys, about one-fourth of people polled said they recently have been saving more and that this is their new normal. Roughly 10%-13% said they'll save less. Data on saving showed more variation due to income than the spending data did. Higher income people are more likely to save more because they have more discretionary income that can be earmarked for savings than lower-income Americans. Gallup did include a caveat: it is difficult to know just how firmly Americans will stick to their projections when the economy does pick up and unemployment drops. "Good intentions to restrain spending and to save more could go out the window if the U.S. returns to flush and vibrant economic times," the report said.

Pa. budget rejected CUs already disbursing funds

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HARRISBURG, Pa. (7/23/09)--The Pennsylvania State House of Representatives rejected the $27.1 billion State Senate spending plan Tuesday, and credit unions already are disbursing funds to help members deal with the disruption of the state’s budget. With a budget impasse affecting the paychecks of thousands of Pennsylvania Commonwealth employees, Pennsylvania State Employees CU (PSECU), Harrisburg, began paying out funds for the specially created PA Budget Impasse Loans on Friday (Life is a Highway July 22). To date, PSECU has disbursed over $2.9 million to more than 3,300 members as the first wave of state employees contacted PSECU for advances to supplement or take the place of their regularly scheduled pay. “The loan area has been working 12-hour days in preparation for this situation, and on this past Friday and Saturday, our phone staff answered over 5,700 calls,” said Gregory A. Smith, PSECU president. “Our staff has been working diligently to help our state employee members.” The credit union has determined it can help 96% of the nearly 34,000 member state employees identified as eligible. Also, Belco Community CU, Harrisburg, to date has helped 30 state employees with financial relief during the budget deadlock. State employees who will not be paid have been offered a special interest-free loan to help them stabilize their finances during the impasse. Belco Community’s program offers a $1,000 line of credit at 0% annual percentage rate (APR) during the 2009/2010 state budget impasse and for 60 days after the budget is signed by the governor. Any remaining balance after that time will begin to accrue interest at a 3.9% APR. To be eligible for Belco Community's offer, individuals must be credit union members with direct deposit of payroll from the state. Loans are subject to credit approval. “Many state employees have taken advantage of our loan offer, and we will continue to meet their needs as long as the budget impasse continues,” said Lonny Maurer, Belco Community president/CEO.

New minimum wage wont affect most CUs says CUNA

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MADISON, Wis. (7/23/09)--On Friday, the nation's federal minimum wage will increase to $7.25 per hour. However, the wage hike is not likely to have much effect for most credit unions. "The new minimum wage will have little effect on credit union wage costs," said Steve Rick, senior economist for the Credit Union National Association. "Most, if not all, credit unions currently pay more than the new federal minimum wage to their entry-level employees," Rick told News Now. "So the new law will not be a binding constraint on hourly wages." The increase is required by the Fair Minimum Wage Act of 2007, an amendment of the Fair Labor Standards Act. The wage applies to all non-exempt employees in 30 states. The other 20 states have minimum wages that are higher than the federal limit. The increase is the last of a three-step gradual increase mandated by the 2007 act.

CU System briefs (07/21/2009)

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* PASCAGOULA, Miss. (7/22/09)--Two Pascagoula, Miss.-based credit unions plan to merge, pending approval from the Mississippi State Banking Department and the National Credit Union Administration. The $200 million asset Navigator CU and the $3 million asset Jackson County CU (JCCU) announced that JCCU's members overwhelming approved the merger in a meeting July 14. Navigator will be the surviving credit union, serving JCCU's 700 members at all locations, including continued service at JCCU's branch. All JCCU employees have accepted positions at Navigator (The Sun Herald July 21) … * SYRACUSE, N.Y. (7/22/09)--Empower FCU, a $714 million asset credit union based in Syracuse, has acquired Telco FCU, a $22.8 million asset credit union in Elmira, N.Y. Telco will change its name to Empower. The deal was completed July 17, according to Datamonitor's Financial Deals Tracker (July 20) …

Economy dominates Michigan league convention sessions

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TRAVERSE CITY, Mich. (7/22/09)--The economy dominated several sessions during the Michigan Credit Union League's Annual Convention and Exposition last week in Traverse City as Michigan's credit unions work with members affected by manufacturing cutbacks. Michigan State University Economics Prof. Charles Ballard explained an "economic transformation," comparing cyclical events such as a few years of a downward trends to a decade of losing jobs, which means something bigger is in play (Michigan Monitor July 20). "Manufacturing has been shrinking as a percentage of our economy for at least 50, maybe 60 years, so we really have been slow to adjust to those changes," he said. "I think we can stabilize the manufacturing portion of our economy, but it's never going to regain the kind of prominence it had in the 1950s, so we're going to have to find higher-tech, higher-skill ways of making a living." His suggestions for stabilizing the economy include a progressive income tax and the reduction or elimination of the Michigan Business Tax. MCUL President/CEO David Adams discussed strategies the league and credit unions will need to develop for the near future, as the economic downturn has lawmakers turning to increased regulations to prevent another crisis. "We need to keep trying to find alignment with public policy priorities to see how we can do even more," Adams said. "Right now there is a very pro-consumer sentiment, but we don't want too much regulation or unnecessary regulation," he said. He added that the league is "in the game to strike a good balance so [credit unions] can be as helpful as they can for the consumer on issues like foreclosure prevention and reigning in bad pricing practices in the broader financial services industry, while at the same time making sure they're able to operate freely and help our members and communities." Global strategist Mike Williams spoke about the opportunities for investment that the economic downturn presents. "What we do usually is we get too greedy and don't understand risk when we should," Williams said. "When things are really good is when they're the most risky. When things are really horrible, like right now, or the early 90s, or the early 80s, the risk is actually the smallest. Whenever we have perceived extremely difficult economic times, they have actually been the seeds of something great to come," he said.

Get em young says CU liaison in IFree PressI

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DETROIT (7/22/09)--Credit Union National Association's (CUNA) preschoolers money management program, Thrive by 5, is listed among the resource websites for an article addressing teaching young children about money in the Detroit Free Press (July 20). The article also features the National Endowment for Financial Education's website, and interviews Erica Tobe, program leader for youth financial education at Michigan State University's Extension Service. Tobe is the extension's liaison to the credit union movement. She works closely with the Michigan Credit Union League and Michigan credit unions. In the article Tobe noted children ages 4 and 5 can be taught to recognize coins. Financial education is critical, she said. Children can see their money grow by having piggy banks at home, and opening savings accounts when they're older. "Shop with your child for banks or credit unions that offer the best deals. Some credit unions, in particular, offer giveaways and teaching tools for young people," Tobe said. She also noted that by budgeting, youngsters "learn that money doesn't grow on trees." To read the full article, use the link.

State legislators favor CUs on dual charter interchange

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PHILADELPHIA (7/22/09)--The National Conference of State Legislatures (NCSL) showed its backing for credit unions' position on dual chartering and withdrew resolutions that favored merchants' interchange fee positions in separate actions Tuesday during its annual legislative conference in Philadelphia. NCSL's Standing Committee on Communications, Financial Services and Interstate Commerce accepted the withdrawal of resolutions that sought government limits on interchange fees, a position pushed by the merchants. The resolutions had been scheduled for consideration. The committee's action is a win for credit unions and effectively takes the interchange issue off the table at NCSL, at least for the foreseeable future. The committee also renewed its credit union dual chartering policy, which reaffirms the importance of state-chartered credit unions in the nation's financial system and state governments' support of the private share insurance option. The dual chartering policy was accepted by a unanimous voice vote of the committee representing 25 states, said Chris Johnson, vice president of state governmental affairs at the Credit Union National Association (CUNA). The policy, which has been in effect the past six years, will continue another three years, he said. "The fact that the committee has readopted this policy is a testament to the good work that credit unions nationwide do each and every day," he told News Now. "The state credit unon leagues and individual credit union members keep state legislators well apprised of the significant benefits of credit union membership, and the committee's readoption of the dual charting policy is an overwhelming acknowledgement of how highly the legislators value credit unions' service to their members." Lynn Coard, CUNA's director of state advocacy, attended the conference for the first time and helped staff CUNA's booth at the conference. "I was so thoroughly impressed with the good will that credit unions have generated through their work. Hundreds of legislators stopped by to thank credit unions for the good works they do in their communities," Coard said. NCSL studies issues of importance to states. It prepares reports that legislatures can consider in their states and prepares policy statements intended to guide state legislatures in adopting laws and lobbying Congress on behalf of the states.

California CUs monitoring new state budget

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SACRAMENTO, Calif. (7/22/09)--Calif. Gov. Arnold Schwarzenegger and state lawmakers agreed Monday to balance the state’s $26 billion deficit by making cuts throughout the state government. The California Credit Union League and the state's credit unions are keeping tabs on the situation. Details about the budget have not been released. The budget means the state will not issue more IOUs, or registered warrants, which will affect more than 90 credit unions in the state that currently accept the IOUs. The California league is closely monitoring the situation as details emerge. The budget document is still being written, Melissa Ameluxen, California league director of state government affairs, told News Now. Monday’s budget agreement also relies on $1.3 billion from monthly three-day furloughs for state workers (The Sacramento Bee July 21). “Credit unions with members that are state employees have been working to assist those affected by furloughs and IOUs as best they can,” Tina Ramos-Ingold, California league public affairs coordinator, told News Now.

Entries sought for Excellence in Lending awards

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MADISON, Wis. (7/22/09)--The 10th annual Excellence in Lending Awards, which recognize outstanding lending results and practices by credit unions, are accepting entries. The deadline for submitting applications is Aug. 7. CUNA Mutual Group and the CUNA Lending Council established the Excellence in Lending Awards in 2000. The awards identify and share examples of lending excellence within the credit union movement by recognizing individual credit unions for their ability to serve members while sustaining sound financial performance. Credit unions demonstrating an ability to meet their members’ needs through innovation are award candidates. Credit unions may submit entries for the 2009 awards in four categories:
* Consumer Lending Excellence Award--assets under $250 million, and assets greater than $250 million; * Mortgage Lending Excellence Award--assets under $250 million, and assets greater than $250 million; * Low/Modest Means Excellence Award--any asset level; and * Business Lending Excellence Award--any asset level.
The Excellence in Lending Awards will be presented at the 15th Annual CUNA Lending Council Conference Nov. 1-4 in San Diego. Airfare, hotel and conference registration fees for one representative from each winning credit union are included with the award. For more information, use the link.

Ex-Central Valley FCU CEO charged in 1M embezzlement

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WHEELING, W.Va. (7/22/09)--A former credit union CEO was arrested Tuesday on federal charges of embezzlement from a West Virginia-based credit union. Bernie D. Metz, 56, former CEO of the now-defunct Wheeling, W.Va.-based Center Valley FCU, is accused of embezzling more than $1 million from the credit union, said U.S. Attorney Sharon L. Potter (WTOV9.com July 21). Metz's residence, three bank accounts and six vehicles were seized by authorities in an ongoing investigation into the failure of the credit union. Metz allegedly misappropriated money from Center Valley and diverted the embezzled funds to benefit herself, her husband, her children and companies that she and her husband controlled, according to information filed in the criminal complaint. Metz was released on bond, pending further court proceedings after appearing Tuesday before Magistrate Judge James E. Seibert. Charges in the criminal complaint carry a maximum penalty of 30 years in prison and a fine of $1 million.

Fire damage to Visions FCU roof is minimal

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JOHNSON CITY, N.Y. (7/22/09)--A weekend fire at a Visions FCU branch under construction caused minimal damage and will not affect the branch’s opening date, the credit union said. “[The fire] started on the roof over the weekend,” Jayne Searles, Visions associate vice president of marketing, told News Now. “It put no damper on the branch’s progress and we’re right on schedule.” The branch, JC Pavilion in Johnson City, N.Y., is scheduled to open in August. The cause of the fire is unknown, Searles said. Visions FCU, based in Endicott, N.Y., has $2.158 billion in assets.

Mass. CUs hit by economy but still maintain capital

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WORCESTER, Mass. (7/22/09)--Massachusetts' credit unions have been largely immune from the financial industry's turmoil. Although assessments to shore up the corporate credit union system and the National Credit Union Share Insurance Fund (NCUSIF) have taken their toll, the credit unions' capital remains solid. Eighty percent of the state's 221 credit unions lost money in the first quarter, according to National Credit Union Administration (NCUA) data (Worcester Business Journal July 20). Most were profitable a year ago for the same period. Much of the losses are related to an increase in deposit insurance premiums from all credit unions to replenish NCUSIF after NCUA guaranteed all shares of corporate credit unions. "The good news is that they, all the credit unions, had enough capital and could continue to do business," Robert Kimmett, executive vice president of public relations and marketing at the Massachusetts Credit Union League, told the newspaper. Normal accounting requirements would account for the increased insurance fund payment in fourth quarter of 2008 or first or second quarter of this year. However, Congress allowed NCUA to borrow up to $6 billion from the U.S. Treasury. Now credit unions can pay their premiums over seven years instead of all at once. The publication also interviewed Marlborough-based Digital FCU, which said its assessment amounted to $22.7 million. The assessment pushed it into the red for a $17.4 million loss in first quarter, Tim Garner, executive vice president of marketing and strategic planning, told the journal. He noted credit unions can put the premium back on their books in second quarter. Frederick Healey, president/CEO of Workers' CU, Fitchburg, said the credit union managed to have a profit of more than $1 million in 2008 and a first-quarter 2009 profit of $665,000. Workers' has conservative lending policies and diversified its revenue sources, which helped, he told the publication. Credit unions were not involved in the subprime mortgages and are not responsible for the problems in the financial market, Digital FCU's Garner said. However, like everyone else, they are being affected by the problems in the financial market.

Global CUs gear up for WOCCU Barcelona conference

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MADISON, Wis. (7/22/09)--More than 1,100 credit union executives, officials and supporters are expected to attend the World Council of Credit Unions’ (WOCCU) World Credit Union Conference in Barcelona, Spain, next week. Attendees at the July 26-29 event represent 62 countries--the most diverse crowd to ever attend a Europe-based WOCCU conference. Speakers at the conference include Vicente Fox, former president of Mexico and a credit union supporter; Luis Pastor, president/CEO of Latino Community CU, Durham, N.C.; Eric Dillon, chief operating officer of Servus CU, Alberta, Canada; and Pete Crear, WOCCU president/CEO. Special events include: a day-long workshop for African savings and credit cooperative executives and officials; the international Regulators’ Roundtable; and the Global Women’s Leadership Forum. Distinguished Service Awards and the WOCCU Young Credit Union People scholarship also will be presented. The conference is co-hosted by WOCCU, the Spanish Cooperative Bank, and Spain’s National Union of Credit Cooperatives.

Ent FCU leads in nine categories and best biz

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COLORADO SPRINGS, Colo. (7/22/09)--Ent FCU, Colorado Springs, Colo., was recognized as a business leader in nine categories by the Colorado Springs Business Journal. The journal asks its readership to vote for the businesses they believe are the best in several categories. Ent FCU was recognized as the best in five categories:
* Best credit union (for the sixth year in a row); * Best mortgage company; * Best commercial lender; * Best large company with the most promising future; and * Best business to support local charities.
Ent also was recognized as a runner-up in four categories:
* Best business bank; * Best corporate financial services; * Best local ad campaign; and * Best local CEO (Ent President/CEO Charles Emmer was runner-up).
Ent FCU has more than $2.8 billion in assets.

CU System briefs (07/20/2009)

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* MIRAMAR, Fla. (7/21/09)--Counterfeit cashier's checks bearing the name of Tropical Financial CU, Miramar, Fla., are in circulation, says the Federal Deposit Insurance Corp. The counterfeit items display Tropical Financial's routing number, 267077847, and are similar to authentic checks. However, the counterfeits show a security feature statement embedded in the top border and along the bottom border between two padlocks. In the top left corner, they display the logo in blue and green. Authentic checks are light blue and have blue print. Their top border displays an elongated blue circle with this security feature statement, in all capital letters: "Original check has an artificial watermark on reverse side. Hold at an angle to view." A white watermark logo is in the middle … * READING, Pa. (7/21/09)--Berks Community FCU, Reading, Pa., and Bellco FCU, Wyomissing, Pa., intend to merge, pending membership and regulatory approval. According to Berks Community FCU's website, its board approved a merger proposal on July 6. "The board of directors feels strongly that this merger is in the best interest of our members," said Chairman Forrest D. Wanner in a message to members. The $44 million asset credit union sent ballots to its 7,000 members last week and will conduct a special membership meeting July 27. Bellco FCU is a $55 million asset credit union with 8,000 members. If a merger is approved, the combined credit unions would be called Bellco FCU … * MOBILE, Ala. (7/21/09)--A former high school basketball captain who became a member of a "Hoodies" gang was sentenced to more than 11 years for two bank and credit union robberies. The sentence will be added to a 45-year sentence he already is serving for heists in Mobile County, Ala. Kenterrio Scott, 23, pleaded guilty in March to robbing a Peoples Bank in Dallas County in September 2007 and the Alabama Central CU's Creola branch in December 2007 (Press-Register July 11). He is serving the first prison sentence for robberies of a general store in Theodore in January and theatre in Mobile in 2006. Scott will not be eligible for parole for at least 17 1/2 years. He also was ordered to pay Peoples Bank $5,826 and the credit union $33,229 … * HIGHTSTOWN, N.J. (7/21/09)--Four colleges have agreed to offer private student loans through a credit union student lending program, says the New Jersey Credit Union League (The Daily Exchange July 17). New York University, William Patterson, Lehigh University and York College of Pennsylvania will promote the Ed Access Private Student Loans to their students through CU Student Loans. The colleges will promote the program by offering a link on the financial aid section of their websites … * HIGHTSTOWN, N.J. (7/21/09)--New Jersey Gov. Jon Corzine has nominated Neil Jasey to succeed Steven Goldman as commissioner of the state's Department of Banking and Insurance. Jasey began working Monday as acting commissioner, even though the nomination must still be confirmed by the New Jersey Senate. Jasey is an attorney, most recently employed at Prudential Financial in Newark. He is married to first-term Assemblywoman Mila Jasey (D-27), according to the New Jersey Credit Union League (The Daily Exchange July 20) …

SECUs free coin sorting saves charities 25000

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RALEIGH, N.C. (7/21/09)--State Employees' CU (SECU) has helped North Carolina charities save nearly $25,000 through using its no-cost coin sorter machines. Many charitable groups collect a large volume of change through penny drives and coin collection events, and need a way to count the coins, said SECU in a press release. Typically, coin sorter fees begin at 7%, with some as high as 10%, but SECU offers its sorters at no charge. To date its coin sorters have counted about $317,000 in coin from charity groups. One of the organizations that uses the coin sorter at SECU's Raleigh-Stonehenge branch is the Knights of Columbus. Knights of Columbus spokesman Jerry Powell said the group sponsors campaigns to support people with disabilities, such as its Tootsie Roll campaign. "SECU makes it practical, enabling us to deal with the coins through the use of their coin machines. The folks at SECU show they are committed to the needs of others by helping us in this manner," Powell said. Each of SECU's 225 branch offices across the state has coin sorters, which were installed in 2005. They feature FAT CAT, SECU's youth program mascot.

Former CEO pleads not guilty to embezzlement

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WISCONSIN RAPIDS, Wis. (7/21/09)--The former president of the now defunct Rapids Municipal CU in Wisconsin Rapids, Wis., pleaded not guilty Thursday in a U.S. District Court to charges of embezzling about $634,222 from the credit union. David K. Henke, 50, was charged with bank fraud and embezzlement over a period from November 1999 to October 2008 from the credit union (Wausau Daily Herald July 18). The Western District of Wisconsin U.S. Attorney's Office said Henke allegedly made false entries into general ledger accounts, added unauthorized loan amounts to members' new and existing loans without their knowledge, converted members' share certificates for his own use and used credit union checks to pay personal expenses. The credit union served employees of the city, Riverview Hospital, Family Heritage Nursing Home and the Wisconsin Rapids School District. Rapids Municipal CU was acquired Dec. 31 by another credit union, Bull's Eye CU, which is beginning work on returning the money (WisconsinRapidsTribune.com July 17). Bull's Eye President David Stark told the newspaper that its employees will contact members affected in the next few days to explain the claims process. Henke was never associated with Bull's Eye CU. If convicted, he faces a maximum 600 years in federal prison, a $1 million fine, a $2,000 special assessment and a restitution order, said the Wausau newspaper.

CUs have chance to gain new members says econ editor

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MINNEAPOLIS (7/21/09)--Credit unions have a unique opportunity to add members by giving them good service at low prices, said an economics editor for a national radio show in a column in Saturday’s Minneapolis Star Tribune. When asked what advantages a megabank has over a smaller local financial institution, Chris Farrell, economics editor for American Public Media’s Marketplace Money radio show, wrote that big banks’ behavior of increasing fees and penalties to bolster their “crumbling finances” has created an opportunity for competitors such as credit unions. “In many cases, community development banks and credit unions have low-fee and no-fee savings and checking accounts,” Farrell wrote. “And many of those local financial institutions now have excellent online services, too. “Management at community banks and credit unions has a once-in-a-lifetime opportunity to grab customers by giving them good service at a cheap price, by eliminating fees and refusing to impose unexpected charges. It always pays to shop around, but now more so than ever,” he concluded. To read the full column, use the link.

Who takes care of consumers Only CUs IFree PressI

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DETROIT (7/21/09)--Credit unions are the only lenders taking care of their consumers, noted a Saturday Detroit Free Press article. The newspaper also prominently mentioned the Michigan Credit Union League and its Invest in America program in contrast to the tightened access to credit consumers face at banks and other lenders. Credit unions financed 170,000 loans to Chrysler and General Motors (GM) customers through the Invest in America program in the first half of this year. The program offers credit union members discounts and rebates when they purchase Chrysler or GM vehicles, the Free Press said. Credit unions are the only lenders that are taking care of their customers, Joe Ricci, a former Dodge dealer who now operates a buying service, told the Free Press. The newspaper also noted that credit unions are an alternative for creditworthy borrowers rejected by banks. They offer lower interest rates and more flexibility, and they account for one of every four new car loans. Credit unions also have more money to lend, the newspaper said. A graph appearing in the article indicated that credit unions had $189.7 billion available in consumer loan cash during the first quarter. Credit unions in Michigan financed 27% of new vehicle purchases in May. New car loans at Michigan credit unions increased by 19% from Sept. 30 to March 31--when car sales plunged to their lowest levels in 30 years. The growth at credit unions is expected to continue, according to the Michigan Credit Union League (MCUL). Credit unions are nonprofit and have lower rates, added MCUL President/CEO David Adams. “We didn’t swing for the fences and end up in trouble, like many commercial banks,” he told the newspaper.

Members 1st CEO Structure keeps CUs strong

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HARRISBURG, Pa. (7/21/09)--Bob Marquette, president/CEO of Members 1st FCU, summed up the difference between credit unions and banks for a local newspaper in two words: "Our structure." Marquette, whose credit union is based in Mechanicsburg, Pa., said structure was the reason credit unions haven't needed to take the recession lying down (The Patriot-News July 20). "Because we have no stockholders, we're not driven to maximize profits every quarter. So we can take long-term view on things. If we want to expand branches and expand our market area, or improve our technology, and if the net result is that our net income drops, that's OK, we can do that," Marquette said. He noted that while others are retrenching to prop up their net income during the recession, the credit union doesn't have to do that. "We've not had layoffs here, ever. We don't have to take those drastic steps to increase our net income. That is a strategic advantage of ours. We're not in a market and out tomorrow." Marquette compared today's recession situation with the Great Depression, saying the Federal Credit Union Act was passed because "the for-profit financial institutions had abandoned the average American market because there were other areas where they could have less risk and be more profitable. In essence, they abandoned the average American." America's current financial situation is "scary and exciting," he said, noting that credit unions did not cause the "financial mess." The situation is an "opportunity for credit unions to show consumers what credit unions are all about." Members 1st FCU has $1.5 billion in assets. For the full story, use the link.

IWall St. JournalI features Mich. CUs push for savings

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NEW YORK (7/21/09)--The “Save to Win” program, launched earlier in 2009 for members of eight Michigan credit unions, was featured in a Saturday article in The Wall Street Journal. Author Jason Zweig mentioned the program in an article about using a lottery or gambling effect to make saving more “exciting” and as an incentive to get people to save more. The Saving to Win program, designed by Peter Tufano of the Harvard Business School, is a combination of a certificate of deposit (or share certificate) and a raffle ticket, Zweig wrote. By placing $25 or more into a Save to Win one-year certificate, members are entered into a monthly savings raffle to win prizes up to $400, plus an annual drawing for a $100,000 jackpot, Zweig explained. The certificate, which the National Credit Union Administration federally guarantees, pays interest of between 1% and 1.5%--slightly lower than conventional rates, the article said. The program has brought in roughly $3.1 million in new deposits--including from members who have been unable to save money in the past, he added. The article also quoted a member of Communicating Arts CU of Detroit and the credit union CEO. The Save to Win program is supported by a partnership among the Filene Research Institute, the D2D Fund, and the Michigan Credit Union League. “This recognition feels like being called up to the Big Leagues,” says Denise Gabel, Filene chief innovation officer. “Everyone involved has been working tirelessly to help consumers save, and it’s gratifying to earn this kind of national notice.” For the full article, use the link.

Calif. CUs bask in good publicity on IOUs

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SAN DIEGO (7/21/09)--Credit unions in California continued to bask in positive publicity after more than 80 credit unions agreed to accept the state's registered warrants, or IOUs, stemming from the stalemate on the state's budget. Banks still are garnering negative publicity for not accepting the checks. The latest article on the topic is in the San Diego Business Journal (July 20) and entitled "Banks Tell State to Keep Its IOUs; Credit Unions Rejoice." It outlines why the banks are receiving negative publicity--many wouldn't accept the IOUs and larger banks put a July 10 deadline on their acceptance, in an effort to force the legislature to a budget agreement. The resulting brouhaha over that decision prompted Citibank to extend its deadline to July 17. "It's a far different story with the state's credit unions, which have mostly accepted the warrants," said the article. California Coast CU, a $1.8 billion asset credit union based in San Diego, told the publication that so far, it had cashed 25 IOUs ranging from $12 to $3,000. The credit unions are using the fact that they're taking the IOUs to differentiate themselves from banks, said the article. Henry Kertman, spokesman for the California and Nevada Credit Union Leagues, noted that credit unions also cashed in similar warrants in 1992, the last time the state issued them. They were simply serving their members in a time of need. "It's just part of the credit union mission," Kertman told the publication, noting that credit unions have many members who are state workers, who are unemployed or who have been laid off, "and we're here to help them." Late last night, The New York Times reported that California broke its budget stalemate as lawmakers worked out an agreement with Gov. Arnold Schwarzenegger to close a $26 billion budget gap.

CUs pricing better than Wal-Mart PCUA tells media

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HARRISBURG, Pa. (7/21/09)--Credit unions offer better pricing than Wal-Mart Money Centers, the Pennsylvania Credit Union Association (PCUA) told a Pennsylvania business publication. The Central Penn Business Journal published an article Friday regarding a Wal-Mart Money Center debuting in Pennsylvania. Wal-Mart Money Centers are designed to provide financial services to consumers who do not have bank accounts and who are tired of payday lending fees. Mike Wishnow, PCUA senior vice president of marketing and communications, told the Journal that credit unions remain an attractive choice for consumers. “I think our pricing model is still better than Wal-Mart’s would be,” Wishnow said. However, he added that it’s good to see any financial services business charging fairer prices than traditional payday lenders. To see the full article, use the link.

PCUA Credit card delinquencies lower in CUs

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HARRISBURG, Pa. (7/21/09)--Credit card delinquencies are lower at surveyed credit unions than at banks, according to the Pennsylvania Credit Union Association (PCUA). PCUA reviewed the card portfolios of more than 200 credit unions it services through its service corporation. It found that although delinquencies at surveyed credit unions have increased, they have fewer delinquencies than banks. Bank card delinquencies rose 23 basis points to 4.75% of all accounts, up from 4.52% in the previous quarter, according to statistics released by a banking trade group, said PCUA. About 1.8% of the total accounts in PCUA’s program are 30 days or more delinquent--the same as June 2008. The percentage of loans outstanding, 30 days or more delinquent, is 2.9%--up slightly from 2.8% in June 2008, PCUA said. “These data confirm that credit unions are prudent lenders,” said PCUA Vice President Corinne Sherman. “Despite a downturn in the economy, credit union members are for the most part making their credit card payments.”

Baltimore City Council examining fin lit requirements

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BALTIMORE (7/21/09)--The Baltimore City Council will meet this week regarding a bill on financial literacy requirements in city schools. The bill would request that the city’s school board examine the feasibility of requiring students to pass a course in financial literacy to graduate from Baltimore City Schools. The bill is pending in the council’s Education Committee. The Maryland and District of Columbia Credit Union Association (MDDCCUA) supports efforts to promote financial literacy on behalf of the Maryland State Task Force on Financial Literacy and the Maryland Board of Education. MDDCCUA said it strongly believes that financial literacy education should be promoted within Maryland’s schools. Seven counties in Maryland already have a financial literacy requirement to graduate from high school.

Debt is down but so are some credit scores

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SAN FRANCISCO (7/20/09)--Credit unions may get questions from their members about credit scores, especially if the members have been working off their debt and find their credit score is less than a year ago. While debt for the average American is down, many are seeing lower credit scores. Credit card companies that tightened their credit available to consumers the past two years have impacted their cardholders' scores, according to a survey by Credit Karma, a San Francisco-based online research and education business. When a card company reduces the credit card limit and the consumer still uses the card the same as always, the consumer is tapping into a greater percentage of the current available credit than under the older, higher limit. This affects the credit score (BusinessWeek.com July 14 and WalletPop.com July 16). Credit score bureau Experian says that American's median score at VantageScore --a competitor to the well-known FICO score invented by Fair Isaac--fell eight points in March--down 1% from the year earlier. TransUnion's average TransRisk score showed a similar 1% decline in first quarter over first quarter 2008, reported BusinessWeek.com. In May the average U.S. consumer's credit score was 674, down nearly 20 points since 2007 according to Credit Karma and Experian. In 2007, the average credit score for the first six months was 692. Equifax, however, said that in May the average Equifax Risk Score rose 0.3% from May 2008. It attributes the slight decrease to the fact that Americans are using credit cards less frequently, are paying off balances in full, and are staying current on their payments. These consumers are balancing out the delinquent borrowers. Roughly 72% of consumers saw their scores improve or stabilize. Nearly 38% of the credit scores rose, while 34% had the same credit score in June that they had the month before. That compares to 32% who had the same credit score in May as they did in April. About 28% of those surveyed saw a decrease in their June credit score. Credit Karma reported last week that the average consumer credit card debt at the end of June declined by $134 from the first quarter. Based on the credit histories of more than 44,000 of the company's customers, the average consumer with debt had:
* $6,938 in credit card debt; * $206,427 in home mortgage loans; * $54,370 in home equity loans; * $14,539 in auto loans; and * $27,201 in student loans.
Midwesterners had the lowest amount of debt.

30 of Internet users go online to manage finances

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NEW YORK (7/20/09)--Thirty percent of U.S. Internet users recently surveyed say they go online to manage their finances. That sounds like a lot, but don't get cocky. In the scheme of things, "managing finances" isn't a popular reason to log on. In fact, it is No. 19 on a list of 21 reasons to go online. The Ruder Finn Intent Index, conducted in second quarter 2009 by the Ruder Finn public relations agency, found that the No. 1 reason to go online was to "pass the time." Of those surveyed, 100% said this was a reason they log on (eMarketer July 17). Other top reasons: educate oneself (96%), connect with others (92%), research (89%) and share (86%). The least common intentions for logging in--and here’s where credit unions may need to do a little more marketing--were to make purchases (33%), manage finances (30%), comparison shop (28%) and join a cause (26%). "Intent is the new demographic," said Kathy Bloomgarden, co-CEO of the research firm. "Delving deeper into the underlying motivations of online behavior is critical to developing proactive strategies. Just being online is not enough to leverage digital channels to drive business imperatives. Audiences must be targeted upon their intent," she added. Roughly three in five Americans (63%) log on to influence others' opinions or express contrasting or oppositional views, while 72% go online to become part of a community. Eighty percent go online to socialize--twice as many as those who log on to shop online or do business. Online business isn't dead, but marketers who can't connect with their consumers' intent do so at their own peril, said the firm in a press release. Ruder Finn divided the responses into six categories, from most common to least common:
* Learn; * Have fun; * Socialize; * Express oneself; * Advocate; * Do business; and * Shop.
Of those surveyed, men were more likely to go online for business, entertainment and to keep informed on news and current events. Women were more likely to log on to advocate for a cause or issue, express themselves and socialize. For more information, use the links.

12 N.J. CUs signed up for private student loan network

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HIGHTSTOWN, N.J. (7/20/09)--Twelve credit unions in New Jersey have signed up so far for the New Jersey Credit Union League's private student loan network. The dozen credit unions have available more than $60 million in lending capacity, said the league in its newsletter, The Daily Exchange (July 16). The network launched in mid-June with nine credit unions and more than $42 million available for lending. So far, 435 applications have been received for almost $5 million in loan requests, the league said.

Ark. foundation establishes scholarship fund in Strouds name

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LITTLE ROCK, Ark. (7/20/09)--The Arkansas Credit Union League has established a scholarship fund in the memory of Karen Stroud, league education director, who died July 5. Stroud died after a five-month battle with brain cancer. She had worked at the league since June 2004. The Karen Stroud Memorial Scholarship Fund for CU at the Top will be used to help future credit union leaders attend a year-long leadership school Stroud was instrumental in creating this past year. She began working on the program last summer and created the curriculum with the league’s Education Task Force. “This was Karen’s dream job,” said Reta Kahley, Arkansas league president. “She loved the credit union people and the movement so much; the scholarship will be a great tribute to her.”

Virginia CUs report fin ed activities

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RICHMOND and PORTSMOUTH, Va. (7/20/09)--Several Virginia credit unions have offered financial education programs in the state. One credit union reached more than 3,000 youth and adults during the second quarter. Virginia CU offered seminars to 3,082 people. Seminar topics included:
* Today’s Economy; * Building a Better Budget; * Strategies for Eliminating Debt; * Raising a Money Smart Kid; * Solving the Mystery of Credit Reports; and * Information for First Time Homebuyers.
The seminars were offered at public libraries, workplaces and at the credit union. Youth accounted for more than half of the 3,082 participants from April to June. Virginia CU Education Director Cherry Hedges developed curricula for high school and college students that covers the basics of budgeting, saving, borrowing, careers and what to know before making a major purchase. Guardian FCU, Portsmouth, offered a three-hour financial literacy workshop Thursday at the credit union. Teens attending the workshop learned how to fill in a check register and budget their money, and the difference between fixed and flexible expenses (Virginian Pilot July 17). Jackie Cross, Guardian’s financial counselor, used games and financial lessons to teach the students. In one game, students received 20 beans that they had to allot for expenses. Cross then told students that they were in a recession and had to eliminate seven beans. The students suggested cutting back on food and recreation to make up for the loss, the newspaper said. Chris Anuswith, president/CEO of the credit union, said schools and parents are not teaching financial literacy and it is more of a problem than computer illiteracy. If people were more financially literate, there may not be a mortgage crisis or problems with credit cards, Anuswith told the newspaper.

Pa. Calif. CUs stand ready to aid state workers

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HARRISBURG, Pa. (7/20/09)--Pennsylvania and California credit unions are preparing to help state workers who are not receiving paychecks due to their states’ budget impasses. About 25 Pennsylvania credit unions have created special programs to help state workers, according to the Pennsylvania Credit Union Association. Some of the programs include low- or no-interest loans, skip-a-payment, and Credit Union Better Choice loans (Life is a Highway July 17). Some state employees did not receive a paycheck Friday. Others received 70% of their pay. Bellco Community CU, Harrisburg, Pa., has helped 30 state employees so far. The credit union is offering an interest-free loan to help state workers. The loans have zero percent interest during the budget impasse and for 60 days after the budget is signed by the governor. A $1,000 line of credit is available on each pay date affected by the impasse, the credit union said in a release. California is facing a $26 billion deficit. Earlier this month, the state began issuing IOUs, or registered warrants, to businesses and others that were set to receive state payments (Bloomberg July 17). Nearly 90 credit unions in California are accepting the warrants, according to the California and Nevada Credit Union League’s website. Some financial institutions in California, such as Bank of America, Chase, Wells Fargo and Union Bank have set deadlines for accepting the warrants, but credit unions have not (News Now July 7). The failure of California’s negotiations between the governor and the lawmakers on the budget mean the state’s bonds ratings will be reduced to junk bonds--meaning the state would not be able to borrow funds.

N.Y. governor signs CU-friendly wild card bill

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ALBANY, N.Y. (7/20/09)--New York Gov. David A. Paterson signed a “wild card” extender bill July 11 that expands the authority of New York’s state-chartered credit unions to exercise the powers of their federal counterparts without first amending the law. Wild card legislation was a priority issue on the Credit Union Association of New York’s agenda, the association said. The powers effected are authorized in a resolution adopted by the New York State Banking Board. The legislation passed the New York State Assembly June 4 and the Senate June 30 in an extraordinary session. The bill was sponsored by the Senate Banks Committee Chair Brian Foley (D-Long Island) and Assembly Banks Committee Chair Darryl Towns (D-Metropolitan). It extends for two years the sunset provisions now applicable to the “wild card” banking law. The current law was set to expire Sept. 9. The “wild card” law was originally enacted in 1997 to provide competitive and regulatory parity between New York state-chartered banks and their federal counterparts. “The association extends its gratitude to Foley and Towns for their sponsorship of the legislation in their respective houses, and of course to Gov. Paterson for recognizing the importance of this legislation and signing it into law,” said William J. Mellin, president/CEO of the association.

Carolinas foundation donates 21000 to kids hospitals

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GREENSBORO, N.C. (7/20/09)--The Carolinas Credit Union Foundation has donated $21,000 to the Children’s Miracle Network as a result of funds raised through the Credit Union Cherry Blossom run. The donation will help seven children’s hospitals in North and South Carolina, according to the North Carolina Credit Union League. The foundation has given away millions of dollars to assist nonprofits that work with children (Weekly Update July 16). The hospitals benefiting from the donation are:
* Duke Children’s Hospital, Durham, N.C.; * Levine Children’s Hospital, Charlotte, N.C.; * University Health Systems Children’s Hospital, Greenville, N.C.; * Palmetto Health Children’s Hospital, Columbia, S.C.; * Medical University of South Carolina Children’s Hospital, Charleston, S.C.; * McLeod Children’s Hospital, Florence, S.C.; and * Children’s Hospital of Greenville, S.C.
“Credit unions have individually been involved with these hospitals in a variety of ways, and have shown their commitment to the community in the process,” said John Slack, president/CEO of the foundation.

CU System briefs (07/17/2009)

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* DES MOINES, Iowa (7/20/09)--The Iowa Credit Union Foundation (ICUF) recently received the 2009 State Partnership Award from the Iowa Community Action Association (ICAA). The award recognizes the foundation's leadership and collaboration with ICAA and community action agencies around the state to promote the Individual Development Account (IDA) Program. In 2008, ICUF launched the Credit Union Family Partnership IDA Program, which matches the savings of low-income Iowans. The savings and matching funds must be used to: purchase a specific asset such as a home, start or expand a small business, pay for education or job training, or purchase a vehicle to get to work. The program has nine pilot credit unions. Pictured, from left, are Lana Ross, executive director of ICAA; Marybeth Foster, executive director of the foundation; and Arlene McAtee, Mid-Iowa Community Action Inc. (Photo provided by the Iowa Credit Union League) … * WINSTON-SALEM, N.C. (7/20/09)--Truliant FCU, a $1.2 billion asset credit union based in Winston-Salem, experienced a 32% increase in the number of mortgages it closed for June, compared with June 2008 (Carolina Newswire July 15). Troy Martens, vice president of consumer and real estate lending for Truliant, said the uptick in business is due to two main factors: "we have very competitive rates, and our members know that our goal is to put them in a loan that they can actually afford" … * HERNDON, Va. (7/20/09)--The Northwest FCU Foundation awarded more than $87,000 in scholarships at its 2009 annual ceremony and luncheon. Twenty students from across the country were honored. They included 15 recipients of the $5,000 Ben DeFelice Scholarship, two of which were sponsored by Northwest Financial LLC, and five recipients of the $2,500 CIRA Scholarship, sponsored by the Central Intelligence Retirees Association. The DeFelice scholarship is named for the credit union's longest serving volunteer board member. Shown with the scholarship winners with Gerrianne Burks, president/CEO of the foundation, and Juri Valdov, vice chairman of the foundation's board. (Photo provided by the Northwest FCU Foundation) …

Economic forum speaker to address trends

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FARMERS BRANCH, Texas (7/17/09)--Speakers at the Southwest Corporate FCU's 32nd annual Economic Forum Oct. 27-28 in Dallas will address financial institution trends in helping credit unions in "Navigating the New Normal," the conference theme. Among the featured speakers will be:
* Martin Feldstein, a Harvard economics professor and president emeritus of the National Bureau of Economic Research. Feldstein served as former President Ronald Reagan's chairman of the Council of Economic Advisers and is a member of President Barach Obama's Economic Recovery Advisory Board. * William Ford, former president of the Federal Reserve Bank of Atlanta and former chief economist of the American Bankers Association. He is currently an economics professor at Middle Tennessee State University. * Bill Hampel, chief economist of the Credit Union National Association; * Gigi Hyland, board member of the National Credit Union Administration; and * Dr. Charles Idol, credit union economist.

Loan Lies pinpoints 189 mortgage-modification scams

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WASHINGTON (7/17/09)--A coordinated national law enforcement effort aimed at ending mortgage modification scams was announced Tuesday by the Federal Trade Commission (FTC) and California Attorney General Jerry Brown. Operation Loan Lies involves 189 actions by 25 federal and state agencies against companies that deceptively marketed foreclosure rescue and mortgage modification services. The scams, which affected consumers throughout the nation, originated in southern California. The FTC announced four new lawsuits, bringing the number of such cases filed to since April. Attorneys general from 23 states and other agencies participating in Operation Loan Lies are initiating action against 178 companies engaged in the mortgage deceptions. The agency also announced a settlement in one lawsuit filed in November. According to the lawsuits, defendants allegedly made false claims that they would either obtain a mortgage loan modification or stop a foreclosure, or both. Some claimed they would give refunds if they failed. The companies would charge at least one month's mortgage payment in advance, but did little or nothing to get a modification or stop foreclosure, and reneged on their promise of a refund. The FTC also is distributing a three-and-a-half-minute video of scammers' victims sharing lessons from their experiences to more than 5,000 housing counseling and consumer protection organizations throughout the country. The "Real People. Real Stories." video also is posted on FTC's website and on YouTube.

33 CUs among CDFI Fund second-round applicants

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WASHINGTON (7/17/09)--Thirty-three credit unions are among the 194 community development financial institutions (CDFI) that have applied for the U.S. Department of Treasury's CDFI Fund's fiscal year (FY) 2009 supplemental round. The applicants--from 44 states, the District of Columbia and Puerto Rico--have requested an aggregate of more than $270 million in financial assistance, said the Treasury. That, coupled with the initial FY 2009 applications, brings the total for the year to 419 applicants seeking $507 million in assistance through the program. Sixty-one or 32% of the institutions applied under Category I--SECA--for more than $33.2 million in financial assistance. Of those, 21 or 34% were credit unions, while 39 (64%) were loan funds, and one (2%) was a venture capital fund. Category II--Core funds attracted 131 or 68% of applicants seeking $237.5 million in assistance. They include 12 credit unions, which make up 9% of these applicants. Also applying were 99 loan funds (76%); 14 banks, thrifts or holding companies (11%); and six venture capital funds (5%). The CDFI Fund said that it announced all $90 million of Recovery Act funding earlier this month to accommodate the additional solicitation of applications and expedite the award dollars to low-income communities. It will make a second announcement in September, when it will award about $52 million of annual appropriations to the most highly rated applicants in a combined pool that includes those who applied in response to the amended Notice of Funds Availability (NOFA) and those who applied under the original FY 2009 NOFA but did not receive an award in the first funding announcement. About 260 applicants requested more than $237 million in the first FY 2009 application round.

Portland CUs connect to bicycle community with loans

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PORTLAND, Ore. (7/17/09)--Several credit unions in Portland, Ore., are offering loan programs to help their members finance bicycles and bike accessories. Unitus Community CU began its program more than a year ago. “Unitus recognized people in the Northwest love to be active and healthy, and we see the increasing amount of people biking,” Lori Fink, Unitus marketing manager, told News Now. “We had a connection to the bicycling community via bicycle shops and the Bicycle Transportation Alliance. Through these relationships, we discovered that there was a need for a loan for those bicyclists who were serious about long rides, races and other community events. “In some cases, the owners of these shops were putting out money to lend to their customers,” Fink added. “In other cases, people purchased their bikes with credit cards. As an effort to provide more people with the opportunity to ride a bicycle, we established a bicycle loan.” Unitus’ loan program applies to new bikes at 80% of the total purchase price, including accessories. Loans must be a minimum of $250. The maximum is $2,500. The loans have a fixed annual percentage rate of 7.99% interest. Loan terms are based on the amount borrowed, and the maximum loan term is one year. Unitus’ target audience is middle-income to blue-collar Northwest residents who care about a healthy lifestyle, and are conscious about the environment, Fink said. “Typically, the weathier folks can afford to buy the more expensive bikes,” she added. Northwest Resource FCU also offers a bike loan program, which started July 1. Although the program has only been offered a few weeks, there already has been some interest, said Kim Faucher, Northwest Resource director of marketing. One woman who was not a member of the credit union learned about the loan program on a biking blog and called the credit union for more information. She wasn’t within the credit union’s field of membership, so she got her company to sign up as a select employee group at Northwest Resource. Her company has about 250 employees. The woman is now planning to buy bikes for her whole family with the program, Faucher told News Now. Northwest Resource offers bike loans at a minimum of $500 and a maximum of $2,500. The loan is unsecured, but will be at a better rate than other unsecured loans the credit union offers, she added. Some say that you shouldn’t go into debt for a car, but is the same true for bikes? “It’s not a huge loan amount,” Faucher said. “If [members] need the bike now rather than having to save up for a year, we can help them.” Northwest Resource plans to go to local bike shops and see if they’d be interested in partnering to promote the loan program. Faucher said the program is looking to promote more than recreational biking--like biking to work and the benefits of biking for exercise and to protect the environment. The credit union serves primarily downtown Portland, and could attract many young people who want to use a bike to commute. A bike loan also could help them build credit since it is a small loan, Faucher said. She advised credit unions interested in offering a bike loan to research others’ programs and then tailor their own lending guidelines.

CU System briefs (07/16/2009)

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* MADISON, Wis. (7/17/09)--David K. Henke, former president of Rapids Municipal CU (RMCU), Wisconsin Rapids, Wis., was indicted on charges of embezzling about $634, 222 from RMCU from November 1999 through October 2008. Henke allegedly embezzled the money by making false entries into general ledger accounts at the credit union, according to the indictment. The indictment also alleges that he provided false information to the board of directors relating to delinquent loans, used RMCU members’ dormant accounts to deposit the embezzled funds and forged members' signatures on collateral pledge agreements. He also is charged with removing members--whose accounts had been subjected to unauthorized loan add-ons--from the monthly statements mailing. Henke faces a maximum penalty of 600 years in prison, a $1 million fine, five years of supervised release, a $2,000 special assessment and restitution. RMCU has since merged with Bull’s Eye CU of Wisconsin Rapids ... * MISSOULA, Mo. (7/17/09)--Peter M. Thompson, 24, pleaded guilty in U.S. District Court to charges of bank robbery and discharging a firearm to further a crime of violence during a Jan. 12 armed robbery of Missoula (Mont.) FCU. Thompson fired a shot into the ceiling of the $281.2 million-asset credit union during the robbery in which more than $11,000 was stolen, according to court records. A deputy pursued Thompson after the robbery in a car chase and when Thompson’s truck veered off a road, he fired a shot, court records said. The deputy returned fire, hitting Thompson in the face. Through a plea agreement, Thompson will be given sentencing credit for accepting responsibility for the robbery. Bank robbery carries a mandatory 20-year sentence, while the gun charge carries a mandatory 10 years in prison, consecutive to the bank robbery sentence (greatfallstribune.com July 15 ) … * LENEXA, Kan. (7/17/09)--Margaret Blankers, founder of MJB Public Relations Group, received the 2009 "Entrepreneur of the Year" award from the Kansas City/International Association of Business Communicators. The award recognizes achievements of self-employed professionals who inspire others with their skill and spirit. Blankers was honored for her diligence and success in communicating on behalf of credit union clients during the unprecedented challenges facing the financial industry. The award noted that through her public relations efforts, many credit unions and industry organizations maintained strong, positive reputations in their communities while reassuring members about the strength of their organizations. Blankers and her team work with credit unions, corporate credit unions, credit unions service organizations and related service providers, developing PR strategy and providing communications services …

Students spend summer gaining experience at CU

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ROCKVILLE, Md. (7/17/09)--While some high school students spend their summer vacation working at the beach, the pool, or at a summer camp, five teens are currently gaining banking and financial service experience through a paid internship with MCT FCU.
Dorothy Zarr, right, a former MCT FCU intern, helps Prathyusha Yanignadla, a current intern, navigate through a member’s account in the credit union’s summer internship program.
Blair Wilen, a high school student working at a paid internship this summer at MCT FCU, helps a member at one of the Rockville, Md.-based credit union’s branches. (Photos provided by MCT FCU)
MCT offers the internship program each summer to Montgomery County high school students who work for MCT’s student-run in-school branches at six schools and to students enrolled in the Academy of Finance (AOF) program. The AOF program also is offered at six high schools, helps students prepare for careers in business and finance through business-specific coursework and a required internship. “MCT offers an internship program designed to enhance our relationship with our primary membership group, Montgomery County Public Schools, and to provide students with practical work experience as part of their education,” said Sandra Gura, MCT director of organizational development. “Additionally, interns obtain skills for future employment opportunities. In fact, six current MCT employees worked here as interns at some point.” The $403 million asset, Rockville, Md.-based MCT hired five high school students as interns this summer. Three interns work in an MCT branch, one works in its contact center, and another works in the information technology department. All interns were hired in late June and underwent one to two weeks of training, depending on their department. Although most interns have only worked in their department or branch for about a week, most say they already are gaining useful skills that they can use in a future career. “I really enjoy working on a team here at the branch,” said Blair Wilen of Magruder High School. “It’s been fun learning new things from my team members and managers. Working on a team and interacting with members is good practice for my future career in communications.” Prathyusha Yanignadla of Watkins Mill High School, who hopes to become an entrepreneur or have a career in international business, views her internship experience as a stepping stone into the business world. “I’m learning about the business world firsthand just by studying MCT’s business model,” she said. “Each day, I’m learning how MCT runs itself, takes care of its members, and practices its values.”

New Hampshire first lady joins CU walk

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PORTSMOUTH, N.H. (7/17/09)--New Hampshire First Lady Dr. Susan Lynch participated in a Walk N.H. event sponsored by Service CU, Portsmouth, N.H. on Tuesday. Lynch chairs the Foundation of Healthy Communities, a nonprofit organization that works to address health issues through prevention programs. During the walk, she told Service CU employees that individuals with diabetes can reduce their death rates by one-third if they walk three to four hours a week. Walking also can help people lose weight, and reverse high blood pressure and cholesterol, she said (Seacoastonline.com July 15). Walk N.H. is one program that helps raise money for the Foundation of Healthy Communities. Service CU donated $1,500 to the cause. A large amount of the money goes toward preventing childhood obesity, Lynch said. Laurie Ainsworth and Linda Marshall were two of 35 Service CU employees who participated in Tuesday’s walk. They told the newspaper that any occasion to leave the office to help the community is a good one. Service CU’s staff is very receptive of the credit union’s community service efforts, said Karen Benedetti, Service CU vice president of marketing.

Illinois student loan program attracts 14 CUs

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NAPERVILLE, Ill. (7/16/09)--Fourteen Illinois-based credit unions will invest nearly $105 million in Illinois State Assistance Commission (ISAC)-issued securities to finance low-interest, federally secured student loans, announced the Illinois Credit Union League and ISAC Wednesday.
Mark Spenny, CEO of Peoria, Ill.-based Citzens Equity First CU (CEFCU) addressed the media during a press conference announcing the availability of $105 million in student loans from 14 credit unions in the state. (Photo provided by the Illinois Credit Union League)
The loans for Illinois students and their families will be offered through the Federal Family Education Loan Program (FFELP). They are part of the Illinois Designated Account Purchase Program (IDAPP). The announcement was made at a press conference hosted by Peoria-based Citizens Equity First CU (CEFCU) on the Illinois Central College campus in East Peoria. "Our partner credit unions and the Illinois Credit Union League have really stepped up to make sure Illinois students have access to federally backed, low-rate student loans," said ISAC Executive Director Andrew Davis, who noted there is "plenty of money to lend" students. The league played a critical role in building support for the program from credit unions. "Receiving a quality education earning a college diploma is crucial for today's students," said Dan Plauda, league president/CEO. "Credit unions are proud to partner with ISAC and invest in our state's future work force." The liquidity crunch, higher tuition costs and federal policy changes that cut lender profits have disrupted student lending programs in some states. A number of banks--including U.S. Bank, the sixth largest FFELP lender with $2.3 billion in loan volume last year--have exited the student-lending arena the past two years. "Thanks to the credit unions' support of ISAC's FFELP participation, we can continue to provide student loans to those in need while serving our mission of offering Illinois students and parents services such as college access programs, financial literacy education and loan delinquency and default prevention," Davis said. Davis said more information can be found at the IDAAP.com website. Financing for the agreement is subject to approval by the ISAC Commissioners and by the credit unions' boards at their respective meetings.

CU marketers shifting funds to interactive budgets

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MADISON, Wis. (7/16/09)--Marketers plan to grow their interactive media budgets by shifting funds from their traditional media budgets--including direct mail and newspaper advertising, says a report from Forrester Research. Travis CU, Vacaville, Calif., has cut back on its newspaper advertising because newspaper readership is dropping, Cathy Rios, vice president of marketing, told News Now. But the credit union hasn’t reduced newspaper advertising as much as it has increased online advertising, she added. The online advertising has paid off--the credit union has generated a lot of traffic on its website, and many credit union members have joined online. Travis works to target specific groups when advertising online and posts ads on a variety of sites. The credit union continually refines its online advertising based on what generates the most hits. Credit unions’ advertisements will vary based on their fields of membership, branch locations, and members’ interests, John Ferver, Travis CU product manager, told News Now. Online advertising is effective because it allows credit unions to place ads in front of people who live in a certain geographic area or who are searching for related products, he added. Travis also engages in social marketing, through Facebook and Twitter, and offers e-mail marketing with a monthly e-newsletter. Forrester’s study also said that some marketers trimmed their budgets in 2008 in the areas of online advertising, e-mail marketing and social media spending. Although the economy has caused some credit unions to tighten their budgets, Rios and Ferver encouraged credit unions to take advantage of the economic crisis. “Spend your money wisely--it’s not the time to cut,” Rios said. Both noted that spending money on marketing is effective during a recession because many others cut back. And with many consumers dissatisfied with big banks, credit unions have a great opportunity to advertise their benefits, Rios added. When transitioning from traditional media to social media, credit unions should apply similar marketing tactics with other media to online space, she said. Although 40% of marketers Forrester surveyed indicated direct mail would be the first thing they would cut, several credit unions noted direct mail is still relevant. Travis CU said it still receives a strong response from direct mailings. “Direct mail is a strong piece of the puzzle,” added Cindy Jenkins, business development specialist for NRL FCU, Oxon Hill, Md. “It works well for us. There are no plans to cut it.” Direct mail is crucial for NRL FCU’s membership drives, Jenkins told News Now. Her credit union sends out about 12 direct mailings per year. NRL, which stands for Naval Research Lab, doesn’t engage in newspaper, television or magazine advertising. “Our field of membership is pretty specific,” Jenkins said. “It’s not cost-effective.” NRL FCU uses e-mail marketing and sends bimonthly messages about upcoming events and promotions to employee groups. Members also can sign up for e-mails from the credit union, she said. The credit union hasn’t used social media sites like Facebook or Twitter, but plans to use more podcasts in the future, Jenkins said. Sarah Cecchin, assistant vice president of marketing at Pacific Service CU, Walnut Creek, Calif., and chair-elect of the Marketing Association of Credit Unions, said direct mail is relevant to credit unions. “Direct mail is still valuable,” she told News Now. “[With it], we’re able to quantify our results. We can’t afford to cut it.” Pacific Service sends about four direct mailings per month and has become much more targeted in its mailings. For example, instead of sending the same direct mail piece to all members, Pacific Service segments direct mailings to specific groups with pieces that are tailored to their needs. Though the response may not be as large with the smaller group, the return is higher in dollars, she said. Direct mail is expensive--it costs Pacific Service about $1, including postage, for each piece. Some direct mailings can cost up to $3 a piece, Cecchin said. For credit unions that need to cut their direct mail budgets, Cecchin advised to better target the mailings and make them more intelligent. Pacific Service sends out letters that speak specifically to the members who receive them, with information the credit union has about their current products and services. For instance, if the credit union knows a member has an auto loan with another institution, the credit union could send the member a letter with information about refinancing the loan. Although Forrester Research’s survey results indicate that markets may shift toward more interactive media, Cecchin said what credit unions use to market in the future will depend on what’s quantifiable. Credit unions will ask, “How are we able to best spend our money?” she said.

Missouri governor vetoes bill of interest to CUs

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JEFFERSON CITY, Mo. (7/16/09)--Missouri Gov. Jay Nixon vetoed 23 bills passed by the Missouri General Assembly, including one bill of interest to credit unions. The bill is State Bill (SB) 235, which establishes a process for converting a manufactured home from personal property to real property and back again (The Missouri difference July 15). Nixon vetoed the bill because a Guaranteed Auto Protection (GAP) insurance amendment was included, according to the Missouri Credit Union Association (MCUA). From conversations MCUA had with the governor’s office, it appears that Nixon does not find GAP insurance consumer-friendly, MCUA said. Near the end of the legislative session, a bill to allow banks to sell GAP insurance was added as an amendment to SB 235. GAP insurance covers the gap between what is owed on a car and what it is worth if the car is totaled in a covered loss, such as an accident or theft. By statute, the governor has until 45 days after the end of the legislative session to sign a bill into law or veto it, and the deadline was Tuesday. If not signed or vetoed, bills become laws Aug. 28. The bank GAP insurance language also was in SB 243, which the governor also vetoed. This does not impact GAP insurance offered by credit unions because that insurance is sold via a third party, MCUA said. Lawmakers will have the opportunity to overturn the governor’s vetoes during the veto session in Jefferson City, which begins Sept. 16.

CU System briefs (07/15/2009)

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* MEMPHIS, Tenn. (7/16/09)--A former credit union executive has filed a retaliation lawsuit against the Memphis Area Teachers CU. Judy W. Bell, a former vice president of liabilities at the $528 million asset credit union, was one of five managers whose jobs were eliminated in June in a restructuring after the credit union lost $10 million in investments. Bell's lawsuit, filed in U.S. District Court last month, alleges the credit union punished her for whistleblowing after she complained to state and federal authorities about fraud, waste and violations of regulations (The Commercial Appeal July 15) … * FARMERS BRANCH, Texas ( 7/16/09)--Marty Oschner, former CEO of Goodrich Employees FCU, Port Neches, Texas, died Tuesday, according to the Texas Credit Union League (LoneStar Leaguer July 15). Oschner was a former league director who advocated the creation of the Financial Alternatives for Consumers in Today's Society (FACTS) Campaign to counter banks' aggressive actions in the courts, the state legislature and Congress. She served as the first chair of FACTS, which eventually became the FORCE Committee. Visitation will be Friday at Forest Lawn Funeral Home, 4955 Pine St., Beaumont, Texas, from 5 p.m. to 8 p.m. Services will be at Forest Lawn beginning at 10 a.m. Saturday … * ALBUQUERQUE, N.M. (7/16/09)--Ivan Roper, manager of St. Gertrude's CU in Mora, N.M., died July 2, said the Credit Union Association of New Mexico. He was 57. Roper became manger of the 600-member credit union in the small rural village after retiring from the local community college in 2000. Besides managing the $1.6 million asset credit union, Roper was active in local water rights associations. He is survived by his mother, three children, grandchildren and one brother …

How to avoid fraud with prepaid cards

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MADISON, Wis. (7/16/09)--The growing popularity of prepaid cards worldwide is offering more opportunity for fraudsters and could lead to an increase in card fraud, according to an industry executive. However, credit unions can take steps to help prevent this fraud. The fraud would take place in the form of lost and stolen cards, counterfeit cards, and theft of personal identification numbers, said Mike Urban, senior director of fraud solutions for Fair Isaac, a Minneapolis-based company that produces the FICO credit scoring system (CardLine Global July 15). Travelex is a company that offers several products to financial institutions. It offers four prepaid cards through CUNA Strategic Services:
* Cash Passport, a prepaid MasterCard issued in three versions: British pounds sterling, Euros or U.S. dollars and accepted at most ATMs and merchants that accept MasterCard debit cards. Cash Passport can be reloaded up to 24 times at a credit union or by phone; and * TravelMoney Card, a prepaid Visa debit card that offers a safer and more convenient alternative to traveler's cheques and cash. Members can use Visa TravelMoney at ATMs and merchants worldwide. Members have unlimited reload capabilities during the 24-month card life; reloads can be completed at the credit union, by phone, or online.
At present, credit union travel cards are not having real problems with fraud, Clayton Ferrill, Travelex vice president of client relations, told News Now. “While the card-issuing industry as a whole generally holds the cardholder harmless for fraudulent activity beyond their control, prepaid cards are safer than credit or debit cards affiliated with a bank account or large credit limit,” Ferrill said. “This is primarily because they hold a specific amount so any damage from fraudulent activity is limited to the balance on the card.” However, credit unions can take steps to help mitigate fraud, he added. “Prepaid cards look like and can be used in the exact same way as credit and debit cards, which is one of the reasons they are growing in popularity,” Ferrill said. “Credit unions can help their members through consumer education about preventative measures that should be taken with all card products. “There is a card-not-present scenario in which the member may be using a card for online and telephone purchases,” he continued. “Cautioning members to only use secure portals when purchasing online is always recommended regardless of the card type--credit, debit or prepaid. When ordering merchandise or services over the telephone, consumers should be aware that merchants offer protections for using their credit or debit cards for purchases.”

Suncoast Schools GTE call it quits on merger

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TAMPA, Fla. (7/16/09)--Two large Tampa-based credit unions--Suncoast Schools FCU and GTE FCU--have called it quits on their proposed merger, after extensive due diligence, they announced Wednesday. The announcement, made jointly by Tom Dorety, president/CEO of Suncoast Schools FCU, and Bucky Sebastian, president/CEO of GTE FCU, said their decision to terminate the merger discussions was mutual. The decision was "based on the determination that the potential disruption in operations to both organizations was extensive enough to outweigh the potential benefits of the merger," Dorety and Sebastian said. In March, the credit unions announced they had signed a letter of intent to pursue a merger. If a merger had gone through, it would have been the largest credit union merger in history, creating an $8 billion asset credit union (News Now March 4). Suncoast Schools FCU was chartered in 1934 and serves more than 481,020 members through 50 full-service branches in 15 Florida counties. With $5.1 billion in assets, it is the largest credit union in the state and the seventh largest in the U.S. GTE FCU was chartered in 1935 and serves 205,000 members through 38 branches in 14 counties in Florida. It has $1.8 billion in assets.

Addison Avenue FCU taps Wesabe for social personal finance

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PALO ALTO, Calif. (7/16/09)--Addison Avenue FCU plans to use Wesabe to offer personal finance insights to its more than 150,000 members nationwide. Wesabe, based in California, helps financial institutions with member relations and offers online planning and tracking tools (banking-business-review.com July 15). The $2.187 billion asset, Palo Alto, Calif.-based credit union plans to launch Wesabe’s community features--known as “Groups,” in which members can share advice and support each other. Credit unions can use Web-services architecture or a fully hosted Web personal financial management solution to implement Springboard--which gives consumers a dashboard view of their account data and personal finances to help them with their savings and financial goals, Wesabe said.

Survey reveals what CUs already knew Courtesy matters

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WESTLAKE VILLAGE, Calif. (7/16/09)--Credit unions won't be surprised to learn of a new study's conclusions that courtesy and personal service matter when consumers shop for a financial institution. In fact, they matter more than the actual products or services offered. J.D. Power and Associates' 2009 Retail Bank Shopping Study, released Tuesday, found that 36% of a shopper's decision to select a particular bank is driven by the bank's brand image. Branch proximity matters to 21% of shoppers surveyed, and products and services influence 14% of those respondents. However, the branch's employees and what they do to help--or not help--account for 15% of the importance of the shopping experience. "Some crucial aspects of a bank's brand image--such as perceived financial stability and reliability--can be difficult for a bank to improve, which negatively affect the bank's likelihood of being selected," said Michael Beird, director of banking practice at the Westlake Village, Calif.-based J.D. Power and Associates. "However, branch employees can positively impact a branch's brand image by providing personal service, communicating proactively and having a customer-driven focus. These three aspects combined account for 15% of importance in the shopping process, which is even greater than the importance of bank products and services," Beird continued. Other findings:
* One third of customers who avoid a particular bank do so because of previous poor service. Other common reasons for avoiding a bank: issues with the branch's proximity or operating hours; and poor policies--such as high rates and fees. * Recommendations from others--both positive and negative--account for 31% of the importance customers place on a bank's brand awareness. Positive recommendations drive 36% of a shopper's consideration of a bank. The study does not go into whether the recommendations are from family and friends, or also from strangers, such as bloggers. * Satisfaction with the account-opening process increases if the bank employees perform simple actions to improve the customer's experience. These include: greeting the customer entering the branch; keeping wait times to five minutes or less; calling the customer by name; and providing the customer with a detailed needs assessment. Among the 19% who experienced all these actions, satisfaction scores average 890 on a 1,000-point scale--84 points above the industry's average, said the research firm.
"Making customers feel welcome throughout the new-account process and asking focused questions targeted to their specific needs and requirements are relatively easy elements that every banker responsible for new accounts should perform regularly," Beird said. "The low percentages of customers who report experiencing these behaviors highlight improvement opportunities for all banks."

Family wins 10000 in Wright-Patt CU savings race

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FAIRBORN, Ohio (7/16/09)--After eight months of working to increase savings and reduce debt, the McClellan family of Springboro, Ohio, was announced the winner of Wright-Patt CU’s first annual Savings Race.
Click to view larger imageThe McClellan family of Springboro, Ohio, won the $10,000 grand prize in Wright-Patt CU’s Savings Race. Pictured are (from left) family members and their savings coaches: Tracy Liptak, Wright Patt Member Center district manager; Nichole Lovins, Member Center assistant manager; Luke McClellan; Kaila McClellan; Pam Turpin, Member Center manager; Heather McClellan; Ken McClellan; and Aaron McClellan. (Photo provided by Wright-Patt CU)
During the race, five local families worked with teams of Wright-Patt coaches to collectively increase their savings by $80,000 and reduce their debt by $65,000. The McClellan family won $10,000, while the four other teams--the Altings, Bledsoes, Grigsbys and Studebakers--each received $2,000 for participating. “We thought we had to live paycheck to paycheck because we always had,” said Heather McClellan. “Now we know that with a little planning and some restraint in spending, we can have anything. We can pay for our kids' education, take vacations, enjoy our life and still feel the security that comes with a nice savings account.” Community members were invited to follow the participants’ progress through blogs and news segments. Wright-Patt also offered free financial education “pit stops” to encourage area families to start their own money makeover. “The Savings Race families have proved how much you make isn’t nearly as important as how you spend it,” said Doug Fecher, president/CEO of Wright-Patt. “Financial freedom is available to every one of us, no matter our income. Not only did these five families gain financial lessons that will last a lifetime, they also learned the most valuable resource they have isn’t cash--it’s the time they spend together.” The credit union plans to offer a second Savings Race in fall. Wright-Patt, based in Fairborn, Ohio, has $1.4 billion in assets.

Report Text message scams increasing

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SAN JOSE, Calif. (7/15/09)--Internet criminals are increasingly operating like successful businesses, borrowing the best strategies from legitimate companies and collaborating in partnerships with each other to make a profit off their illegal activities, says a new security report. Cisco's 2009 Midyear Security Report covers a range of threats, including a significant increase in text message scams--the "new frontier for fraud irresistible to criminals," who hope that consumers savvy enough not to fall for e-mail phishing scams may still be gullible through their mobile phone. The research notes that recently smaller financial institutions have been the focus of many text message scams "likely because customers tend to have higher levels of trust and familiarity with local banks." It cites three examples--all from credit unions (First Community CU, Jamestown, N.D.; Buffalo Metropolitan FCU, Buffalo, N.Y., and BCT FCU, Binghamton, N.Y.). Among the threats the report cites:
* Botnets--Networks of compromised computers used to launch an attack, botnets are being increasingly rented out as a service by their owners to fellow criminals to deliver spam and malicious software. * Spam--A major vehicle for spreading worms and malware and clogging Internet traffic, spam encompasses everything from legitimate sales pitches to malicious websites. More than 180 billion spam messages are sent each day-- about 90% of the world's e-mail traffic. * Worms--Credit unions interested in using social networking need to be aware that the rise of social networking has made it easier to launch worm attacks. People who social network are more likely to click links and download content they believe were sent by people they know. * Spamdexing--Packing a website with keywords or search terms so search engines will display the site more prominently, spamdexing also can send malware disguised as legitimate software. Consumers who trust the rankings on major search engines may download a fake package. * Text message scams--Since the beginning of the year at least two or three new campaigns have surfaced every week on handheld mobile devices such as cell phones. More than 4.1 billion mobile phone subscriptions worldwide mean a criminal can cast a wide net and walk away with a hefty profit, even if the attack yields only a small fraction of victims. * Insiders--With the global recession causing loss of jobs, insider threats are an increasing concern for businesses. Insiders who commit fraud can be contractors or other third parties as well as current or former employees.
The reported noted three trends to watch:
* Spam will return to record high levels; * Legitimate websites will see more attacks; and * Social networking attacks will continue;
As for recommendations, Cisco advised institutions to:
* Have security move at the speed of the crime. Don't wait to patch the credit union's operating system. * User education and security awareness are critical. * Keep an eye on "old" problems while being vigilant about new risks. * Never underestimate the insider threat. * Have strong, realistic policies for protecting sensitive data.

Corporate Central CU board officers elected

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MUSKEGO, Wis. (7/15/09)--The board of directors at Corporate Central CU recently elected its executive committee at the corporate's annual meeting, held in conjunction with the Wisconsin Credit Union League's Annual Convention and Exposition. Officers are:
* Chairman, Daniel Ige, president of Golden Rule Community CU, Ripon, Wis.; * Vice chairman, Gerald Forsythe, president of Altra FCU, Onalaska, Wis.; * Secretary, Greg Hilbert, Fox Communities CU, Appleton, Wis.; and * Treasurer, Kim Sponem, president of Summit CU, Madison.

Blogger loves her bank but oops its a CU

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MADISON, Wis. (7/15/09)--A blogger on Salon.com is in love with her "bank." "I love my bank! I'm dancing with adoration for this place that holds my money for me." The only trouble is--her "bank" is actually a credit union. If credit unions can get past the word "bank" as the Jess D. Facts blog raves about the unnamed credit union, they'll find this love letter provides examples of what credit unions do that banks don't and just how far credit unions will go to help a member in trouble. For example:
* When a workplace mixup results in her company depositing the wrong amount, the blogger accidentally deducts her car payment--twice--from her account. She needs that second payment for another bill. She calls the credit union first thing in the morning, explains the mixup and says she forgot to turn off her automated car payment. Then, "I asked if I could have my money back." After a pause and some tapping on a keyboard, the member service rep said, "Okay, there, it's done." The rep told her she'd noticed the problem and was going to call the member later that morning "in case today was one of your days off. I wanted to let you sleep in." * In May her husband used his ATM card near where he works, which is in a "shady part of town," said the blogger. The credit union called his cell phone to find out whether the transaction was legitimate, but he didn't answer. So the credit union called her. "Because he didn't answer his phone, they were now concerned for his life and didn't care anymore about the money." * In 2004, the blogger was laid off and couldn't pay her car loan, which was almost paid off. She didn't call and explain the situation "because I didn't have any money." During the period, she lost her house, but "I kept driving that car. The bank [credit union] never tried to contact me about that loan." Two years later, when she was rehired to her old position, she went to the credit union, embarrassed that it had been so long since she had made a car payment. "The woman in charge of loans listened to my apology and smiled. 'We knew you'd be back,' she said. She helped me set up the payments to come out of my check like it had been before." The blogger noted the car loan problem never made it into her credit report. "I love my bank," she said.
The blog generated a number of comments, including this one: "I feel the same way about my credit union. They are so much better at personal service than banks, I can't imagine why anyone who has access to a credit union would go anywhere else." To read the blog and comments, use the resource link.

Australian CUs new code makes 10 key promises

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WARWICK, Australia (7/15/09)--A new Code of Practice for Australian credit unions will specify how credit unions should deal with their members. The new Mutual Banking Code of Practice was developed for Australian credit unions and building societies by industry trade association Abacus-Australian Mutuals (Weekly Trader July 15). The new code was broken down into 10 key promises all accredited credit unions and mutual building societies must follow. They are:
* We will be fair and ethical in our dealings with you. * We will focus on our members. * We will give you clear information about products and services. * We will be responsible lenders. * We will deliver high customer service and standards. * We will deal fairly with any complaints. * We will recognize member rights as owners. * We will comply with our legal and industry obligations. * We will recognize our impact on the wider community. * We will support and promote this Mutual Banking Code of Practice.

CEO among first to help economys victims

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BLUE BELL, Pa. (7/15/09)--The “Get Help Now, Pennsylvania” volunteer initiative got underway July 7 to provide financial and legal help to Pennsylvanians affected by the economic downturn. Volunteers include lawyers and financial experts--including credit unions--at 13 locations statewide (Life is a Highway July 14). One of the first individuals looking for assistance at the Chester County Bar Association was helped by Helen Edwards, president/CEO of Norristown Bell CU, a $39.5 million asset, Blue Bell, Pa.-based credit union. Edwards offered suggestions on how the woman, who was laid off, could pay her bills and live on her monthly unemployment benefits. “She left here with a to-do list,” Edwards told a reporter for The Daily Local News. “She’s got a plan in mind. I think she’ll be OK.”

IUSA TODAYI offers tips on switching to CUs

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MADISON, Wis. (7/15/09)--USA TODAY offered tips Tuesday to consumers who have had enough of excessive bank fees and want to move their accounts to an alternative financial institution such as a credit union--which the newspaper said is a good alternative. “In this tight-fisted economy, there's no reason to pay more for banking services than necessary--especially when there are so many banks and credit unions vying for your affections,” wrote Sandra Block, USA TODAY “Your Money” columnist. “Some community banks and credit unions are offering interest rates of 4% or more on checking accounts if you meet certain requirements, such as using your debit card at least 10 times a month.” Block also advises readers to take advantage of “switch kits” offered by credit unions. “These kits, typically available online or at … branches, provide all the forms you need to change direct deposits and automatic payments,” she wrote. “They also contain forms you can send to your old bank and other institutions, informing them that you're closing the account.” Block tells consumers to set up online accounts at their new financial institution and to monitor them on a regular basis. “That will make it easier to determine whether your employer, mortgage lender and other businesses you deal with have switched over to your new account, said Bill Hampel, chief economist for the Credit Union National Association,” in the article. “You can also use your online accounts to move money between your new and old account as needed, he said. “If you have money in a savings account,” Hampel added in the article, “it’s not a bad idea to deposit some of it in your old bank account temporarily, just in case there are some outstanding checks or debits you’ve forgotten about.”

PCUA lauds ruling to license Web payday lenders

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HARRISBURG, Pa. (7/15/09)--The Pennsylvania Credit Union Association (PCUA) said it supports a decision made Friday by the Commonwealth Court to preserve the Pennsylvania Department of Banking's requirements that payday lenders be licensed. The court ruled that Internet payday lenders, and other out-of-state companies that issue consumer loans to Pennsylvanians, must be licensed by the Department of Banking and comply with state laws. "Everyday consumers are charged exorbitant interest rates and fees to borrow money using payday lenders," said PCUA President/CEO Jim McCormack. "We applaud the court for upholding the Pennsylvania Department of Banking rules that protect consumers from lenders who take advantage of those most vulnerable." In 2007, credit unions in the state launched the Credit Union Better Choice program, an affordable alternative to high cost payday loans, said PCUA. It noted consumers using the program can obtain a 90-day, up to $500 installment loan, at a maximum 18% interest rate, with a $25 or less application fee from a participating credit union. In addition, the program promotes wealth building and financial education. To support building wealth, the program deposits 10% of the loan being disbursed into a savings account in the borrower's name. All borrowers are offered financial counseling. The program is offered by 82 credit unions in 215 branches throughout the commonwealth.

CU System Briefs (07/14/2009)

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* CROWN POINT, Ind. (7/15/09)--Proactive, responsive member services programs, like the one observed at TECH CU, represent the members-first philosophy that assure the credit union movement a “bright future,” National Credit Union Administration (NCUA)Chairman Michael Fryzel said recently after his visit with the credit union. “This credit union has demonstrated an impressive focus on aiding [its] membership during a very difficult economic time,” Fryzel noted in a release. Shown from left are, Tech CU President/CEO Michael Hussey; Sue Landske, Indiana state senator and Tech CU board member; Fryzel; and John McKenzie, Indiana Credit Union League president. (Photo provided by the National Credit Union Administration)… * VIRGINIA BEACH, Va. (7/15/09)--Police arrested Angelo Treadwell, 32, suspected of being of one of two men who walked into Chartway FCU, Virginia, Beach Va., July 2 and robbed tellers at gunpoint. The robbers afterward fired shots at witnesses who tried to follow the pair as they fled the scene in a red sedan. Treadwell was arrested Wednesday in Norfolk, Va., on charges of heroin distribution. The next day Treadwell was charged with robbery, wearing a mask in public, attempted malicious wounding and related firearm charges, Virginia Beach police said. Police still are searching for the second suspect (The Virginian-Pilot & The Ledger Star July 14) … * AMES, Iowa (7/15/09)--An Ames, Iowa, woman was sentenced to three years in federal prison and ordered to pay more than $25,000 in restitution for bank fraud and identity theft charges after conducting unauthorized transactions at the Great Iowa Community CU, Ames, and U.S. Bank. Jennifer Wheelock-Armstrong, 30, was sentenced Friday in U.S. District Court in Des Moines, Iowa. Wheelock-Armstrong used a fraudulently procured traveler’s check to purchase a car at a dealership in Rochester, Minn., and also used a stolen credit card to rent a car in Des Moines, authorities said (chicagotribune.com July 11) … * SAN RAFAEL, Calif. (7/15/09)--Sal Medina, branch manager of Redwood CU’s (RCU) San Rafael branch, was recently elected to the board of the Hispanic Chamber of Commerce of Marin. He has been actively involved with the chamber for the past year, and will help guide its efforts in the Marin business community. Also, Medina was appointed as chair of a committee to unite financial services professionals to create financial literacy events and programs. Medina has been branch manager since 2008. He previously served as banking center manager for Bank of America … * GERMANTOWN, Md. (7/15/09)--Mid-Atlantic FCU, Germantown, Md., recently raised more than $24,000 for charities (FOCUS Newsletter July 13). The Second Annual Golf Tournament held June 3 benefited Community Services for Autistic Adults and Children (CSAAC) based in Montgomery Village, Md. Ninety-four golfers raised $15,000 for the organization. A Relay for Life benefiting the American Cancer Society was held at Montgomery County College, Rockville, May 30-31. Mid-Atlantic FCU was the top fundraising company this year. Employees raised $9,291. From left: Mid-Atlantic FCU CEO Rick Wieczorek; CSAAC Executive Director Ian Paregol; Mid-Atlantic FCU Director of Business Development Ron Dimaranan; and Mid-Atlantic FCU Senior Vice President of Lending Frank Amantia. (Photo provided by Maryland and District of Columbia Credit Union Association) … * BEL AIR, Md. (7/15/09)--HAR-CO Maryland FCU, Bel Air, Md., presented $17,000 in scholarships to 13 graduating Harford County high school seniors at a recent reception. One student from each
Click to view larger image Click for larger view
high school in the county was selected to receive a HAR-CO FCU Scholarship for $1,000 (FOCUS Newsletter July 13). Also, high school seniors planning to pursue a degree in environmental science were eligible to apply for the $1,000 Edward V. Goetz Memorial Scholarship. This year, the HAR-CO/Harford Community College Scholarship for $5,000 was available to graduating seniors who will attend Harford Community College (HCC). Pictured from left, front row: Heather A. Stachowski, Danika S. Nolan, Tynetta K. Jackson, Kathleen E. Roberson, Candace I. Freeman, Ebony J. Waters. Back row: Taylor J. Hendricks, Matthew R. Brown (Goetz recipient), Shannon L. Belzner, Stephanie N. Detorie (HCC recipient), Brooke L. Adams, Abigail E. McManus, Pooja P. Kothari, Ebony J. Waters, and Candace I. Freeman. (Photo provided by Maryland and District of Columbia Credit Union Association) …

CUs N.M. state official join to register voters

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ALBUQUERQUE, N.M. (7/15/09)--The Credit Union Association of New Mexico and New Mexico Secretary of State Mary Herrera initiated a voter registration drive at credit unions statewide this summer.
Click to view larger image A joint effort between credit unions and the New Mexico Secretary of State’s office to register voters in credit union branch offices this summer was announced Monday in Albuquerque. From left, are Credit Union Association of New Mexico (CUANM) CEO Sylvia Lyon, New Mexico Secretary of State Mary Herrera, First Financial CU CEO Ben Heyward, CUANM Vice President of Governmental Affairs Juan Fernández, and Guadalupe CU Director Linda Medina. (Photo provided by Credit Union Association of New Mexico)
Herrera made the announcement Monday at a press conference at First Financial CU in Albuquerque. Secretary of State staff will set up booths for a day in about 90 credit union branches in 12 counties and register voters throughout July and August. Herrera said her office also will train and certify branch office employees so voter registration can be an ongoing service of the participating credit unions after her employees leave. Herrera, who is on the board of directors of Rio Grande CU, Albuquerque, said that credit unions can offer a great service to their communities by providing convenient locations where residents can register to vote or make changes to their current voter information while doing their regular transactions or running errands. The posters for the voter registration campaign, designed by First Financial CU Vice President of Marketing Adonica Castellano, let members know “We will C.U. at the polls.”

Four CUs others sue MetaBank over 4M CD fraud

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SIOUX CITY, Iowa (7/14/09)--Four credit unions are among the eight groups that have sued MetaBank over fraudulent certificates of deposit (CDs) they bought from a former bank employee between 1995 and 2008, according to MetaBank's filing with the Securities and Exchange Commission (SEC). The former employee, Charlene Marie Pickhinke, 48, of Sac City, Iowa, pleaded guilty Thursday in U.S. District Court in Sioux City, Iowa, to stealing $4.2 million from as many as 50 credit unions and banks through wire fraud, making a false statement in a bank's records, money laundering and aggravated identity theft (Des Moines Register July 11). She faces up to 82 years in prison and a fine of $8 million Pickhinke worked for the bank from 1979 to May 18, 2007. In its SEC quarterly filing, MetaBank's parent company, Meta Financial Group based in Storm Lake, Iowa, disclosed the fraud. It said Pickhinke used the funds of new victims to pay off the previous victims in her scheme. The SEC filing named four credit unions among those suing to recover funds related to the phony CDs. They are:
* Guardian Angel CU, a $40 million asset credit union basedBerlin, N.H. It filed a class action complaint in the U.S. District Court in New Hampshire on July 14, 2008. The suit says the credit union deposited $99,000 in April 2005 with MetaBank in exchange for a CD. The credit union renewed the CD twice before being notified by the bank about the fraud. Its complaint estimates more than 50 institutions bought the CDs. * Coreplus FCU, a $188 million asset credit union based in Norwich, Conn. It filed a civil action in the Superior Court for New London County, Conn. on Nov. 18, 2008. The Des Moines Register said the case was dismissed by the two parties voluntarily in March. * Hamilton FCU, a $27 million asset credit union in Novato, Calif. It filed a class action suit in March in the U.S. District Court for the Northern District of California; * East Idaho CU, Idaho Falls, Idaho. The $206 million asset credit union filed its suit in District Court for the Seventh District of Idaho.
These and several cases filed by banks arose "after MetaBank was contacted by another institution but could find no record of the CD it had allegedly purchased, and commenced an investigation," said the SEC filing. The bank's parent company said that Pickhinke sold the CDs, using MetaBank's name, to the financial institutions via an independent broker. She instructed purchases to wire the purchase money into one of a number of false accounts she created at the bank.

PCUA Be Green task force makes recommendations

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HARRISBURG, Pa. (7/14/09)--A report to the Pennsylvania Credit Union Association (PCUA) outlines how the state's credit unions can practice and implement "green" programs and initiatives to benefit members. PCUA's "Be Green" task force chairs Joe Wambach and Bret Davis submitted a report and recommendations to PCUA President/CEO Jim McCormack (Life is a Highway July 13). The task force explored these areas:
* Cap-and-Trade and additional federal regulations; * Pros and cons of green construction and building renovations; * Future Commonwealth of Pennsylvania offerings and incentives through the Department of Environmental Protection; * Significance of Generation Y preference for green initiatives, marketing and lending opportunities; and * Establishment of a comprehensive list of "Be Green" best practices applicable to any size credit union and its individual members.

CUNA Mutual CEO speaks about economy strategies

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HIGHTSTOWN, N.J. (7/14/09)--The global economy and CUNA Mutual Group's strategic path were among the topics discussed by CUNA Mutual President/CEO Jeff Post during a visit with 45 New Jersey credit union leaders at an open form last week. Post said he was concerned about the economic downturn, specifically in Florida, California and Nevada, but noted that all states have signs they are hurting in areas such as housing, reported the New Jersey Credit Union League in its new daily newsletter, The Daily Exchange (July 13). Last year was the first year that the company's mortgage insurance business lost money, he told the group. This was due to the housing downturn but credit unions have felt the impact less than other lenders because of their solid underwriting and relationships with their members, Post added. Other topics he discussed:
* The company's philosophy on claims. CUNA Mutual looks for ways to pay claims, but, for the good of all credit unions, CUNA Mutual should not be in the business of paying questionable claims, Post said. The company may even need to turn some credit unions down for bond coverage if they do not have certain safeguards in place or are in financial trouble, he added. * Demutualization. CUNA Mutual has no plans to demutualize, he emphasized. Instead, it is committed to the credit union space and looks to continue as an industry partner. The company gives back roughly $50 million a year to the credit union industry, he said, noting the example of its work when a Wisconsin credit union succeeded in proving to a U.S. District Court jury that its core products should not fall under the unrelated business income tax. * Support of credit unions hit by fraud in the CU National Mortgage bankruptcy case. CUNA Mutual is providing legal support for credit unions whose mortgage loans were fraudulently sold to Fannie Mae. * A national branding campaign. Post would consider supporting a national branding campaign if the industry could provide a unified proposal. He commended New Jersey credit unions for their support of the "New Jersey Credit Unions, Banking You Can Trust" cooperative advertising campaign.

CU Central of Canada to offer Filene reports

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MADISON, Wis. (7/14/09)--Credit Union Central of Canada (CUCC), the national voice and trade association for Canada’s credit unions, announced its sponsorship of the Filene Research Institute, a consumer finance think tank for the North American credit union system. Its financial commitment makes Credit Union Central of Canada Filene’s newest Silver Benefactor. “The time for innovation has never been more urgent and our increased affiliation with the Filene Research Institute will benefit all Canadian credit unions,” said Cheryl Byrne, Credit Union Central’s vice president of knowledge services. In addition to the electronic access to seven research reports each year, CUCC’s member credit unions will have immediate access to Filene’s CU Tomorrow Project, a 13-report series completed over two years to document the emerging needs of young adult credit union members, professionals and volunteers. “Credit unions across North America share remarkably similar challenges,” said Mark Meyer, Filene CEO. “We appreciate CUCC’s confidence in the Filene Research Institute.” Credit Union Central of Canada immediately will begin work with Filene’s i3 innovation group and with the institute to identify important research topics for Canadian credit unions.

CU System briefs (07/13/2009)

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* TACOMA, Wash. (7/14/09)--Members of Tacoma-based $59 million asset MilePost CU have approved a merger with Sound CU, a $419 million asset credit union also in Tacoma, according to both credit unions' websites. MilePost, which held a special membership meeting June 30, said the approval rate was over 90%. The merger will be effective Sept. 1, said Sound CU. According to a local newspaper, the combined credit union will have about $477 million in assets. MilePost has 6,600 members and Sound has 37,400. There will be no branch closures or layoffs (The News Tribune July 11). Sound has 13 previous mergers under its belt … * YOUNGSTOWN, Ohio (7/14/09)--Two Ohio credit unions have announced they will merge, effective Aug. 1. The Greater Warren Community FCU, Warren, will become part of the Associated School Employees CU, Youngstown, and will adopt Associated School's name, they announced (Business Journal Daily). The combined credit union will have $150 million in assets and more than 20,000 members. Greater Warren Community President Brian McCue will become chief financial officer of the combined credit union, with Michael J. Kurish remaining president/CEO. All eight offices will remain open and all employees will keep their jobs, said Kurish.

Experience Learning Live Conference adds sessions

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MADISON, Wis. (7/14/09)--Credit union training and human resources topics were added to the 2009 Experience Learning Live Conference as it integrates with the Credit Union National Association’s Human Resource Management School. The new conference will be Oct. 25-28 in Nashville, Tenn., for credit union training and human resource professionals. This year’s opening general session speaker Robin Crow will outline a seven-step process for creating leaders who will make a difference. Crow, studio owner of Dark Horse Recording, will share examples from his experiences with major label recording artists. His studio has recorded albums from artists including Amy Grant, Trace Adkins, Neil Diamond, Martina McBride, Montgomery Gentry, Faith Hill and others. The closing general session, “Once Upon a Time: Using Story Telling to Build Teamwork and Inspire Passion,” will teach attendees how to tell their organization’s story in a way that enhances its public image, creates a next level branding or marketing tool, and attracts new members. Margaret Moreford, president of consulting and training company The Edge Inc., will explain how to use imagery to connect with employees and co-workers on a deeper, emotional level. Training-focused sessions will explore: four generations in one workplace, emotional intelligence, credit union university, developing internal strategic partners, instructional design, assessing the need for training and making training stick. Human resource sessions will address: conducting effective performance reviews, retention coaching, unleashing creativity, aligning human resource strategies with credit union strategic plans, conducting effective workplace investigations, human resources measurement and metrics, employment law updates, and workplace diversity. Winners of last year’s ELLy awards give presentations on their award-winning training ideas. The ELLys are the only national awards presented to credit union trainers for their work in professional staff development. For more information, use the link.

Greylock FCU offers financing for Edith Wharton home auction

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KANSAS CITY (7/14/09)--A Pittsfield, Mass., credit union is offering financing for four of five luxury condominiums that used to be American Pulitzer Prize-winning novelist Edith Wharton’s former summer home, known as Pine Acres. The condos were put up for auction Saturday. The condominiums, located in Massachusetts’ Berkshire Hills area, are now referred to as The Gables and range in size from 2,000 to 3,000 square feet (PR-inside.com July 5). As depicted in many of Wharton’s novels, including :The Age of Innocence” and “Ethan Frome,” the grandiose lifestyles of the wealthy were a cornerstone of the Berkshires in the 19th century. Online bidding for the auction was provided by Proxibed, and financing options are available through Greylock, a $1.127 billion-asset credit union and United Country Home Mortgage. Owners of the individual condominiums put them up for sale themselves, so it is not known if any were sold during Saturday’s auction, Lisa Trybus, Greylock vice president of mortgage origination, told News Now. So far, no one has applied for financing for any condo purchases through the credit union, she added.

CU pilots Va.s state employee loan program

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RICHMOND, Va. (7/14/09)--Virginia Gov. Tim Kaine announced Monday a short-term lending program that allows state employees to take out low-interest loans up to $500 to meet emergency needs during the current economic crisis. The pilot program is a partnership between Virginia CU (VACU) and the commonwealth of Virginia Campaign--a nonprofit, 501(c) organizations that coordinate the charitable giving of state workers (Richmond Times-Dispatch and WCAV19 July 13). State workers who are members of Virginia CU, a $1.689 billion asset, Richmond, Va.-based credit union, are eligible for the program, which will not cost any taxpayers money. Borrowers would have up to six months to repay the debt through payroll deductions, the newspaper said. “The governor hopes this will be a model for private companies to use for their employees,” Gordon Hickey, Kaine’s press secretary, told the paper. Meanwhile, banks and other traditional lending institutions have been reticent to extend credit as the national recession continues, and usually do not provide the smaller emergency loans that are made available through the program, the newspaper said. The program garnered the attention of Forbes.com, which picked up the story. Use the link.

IWSJI ICNNI Seek credit cards at CUs

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NEW YORK (7/14/09)--Consumers should seek credit cards at credit unions to obtain better rates and terms according to The Wall Street Journal and CNNMoney.com. A small-business owner asked Kelly Spors in her Wall Street Journal column, “Small Talk,” what to do because the owner’s credit card company announced it would stop taking new charges. “A good strategy is to approach community banks and credit unions rather than major national banks, says Ruth Sheets, a consultant to small and midsized businesses,” Spors wrote Monday. “These smaller local lending institutions suffered less from the financial mess on Wall Street and are using the credit crunch to strengthen their ties with local business owners. “Smaller banks and credit unions often carry their own branded credit cards and charge lower fees than large banks,” Spors added. “If you can’t qualify for a regular card, you may at least be able to get a secured card, which requires cash up front as collateral.” With credit card reforms signed into law by President Barack Obama in May, consumers need to protect themselves from a credit card backlash, and credit unions are an option, advised a Friday CNNMoney.com column. If consumers carry a balance [on a credit card] and have a credit score of 730 or above, they should move their big-bank card into secondary status and rotate in a regional bank or credit union card, Curtis Arnold of Card Ratings.com advised in the column. Because these institutions employ stricter underwriting standards, they offer lower rates and rarer rate hikes. While the average major bank card currently has a 13.76% interest rate, National Institutes of Health FCU, a $396.9 million asset, Rockville, Md.-based credit union, is advertising a Visa Platinum Rewards card at 8.9%, Arnold said.

Proper ATM fee disclosures can avoid lawsuits

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LAS VEGAS (7/13/09)--Lawsuits charging improper ATM fee disclosures against financial institutions--including credit unions--and others operating ATMs continue to be filed in Pennsylvania. The most recent lawsuit, filed in a U.S. District Court in Pennsylvania Wednesday, is against Global Cash Access Holdings Inc., a Las Vegas-based company that provides credit and ATM services to casinos around the country (Las Vegas Sun July 10). Recently four lawsuits against credit unions were filed claiming there were no fee disclosures on their ATMs. At least 10 lawsuits against financial institutions are making those same claims. The suits have prompted credit unions to check their disclosure notice requirements, according to the Pennsylvania Credit Union Association (PCUA) (Life is a Highway July 10). Its compliance department has received several calls about ATM fee disclosures. Credit unions operating an ATM and charging consumer fees for balance inquiries or an electronic funds transfer such as a cash withdrawal or transfer should be sure that all ATMs, including those in the lobby, comply with the fee disclosure regulations in Regulation E, said PCUA. CUNA Mutual Group provided these tips, said PCUA:
* Post a sign on or near every credit union ATM stating that fees will or may apply. If the credit union chooses to state the fee's amount on its signage, procedures should be in place to ensure the accurate charge amount is always reflected on the signs. * Rely on the ATM screen to state the actual amount of the fee. Once notified, consumers must be able to cancel the transaction and avoid the fee if they want. * Disclose the fee on the receipt. * Adopt procedures to inspect the ATMs to ensure the required signage or notices are present, current and have not been altered.

MATCU cuts five management positions

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MEMPHIS, Tenn. (7/13/09)--Memphis Area Teachers CU (MATCU) eliminated five management positions last month resulting from of a $10 million loss last year and regulators’ recommendations. Positions cut at the $527.8 million asset, Memphis-based credit union include: vice president of lending, vice president of community affairs, vice president of credit union service organization, vice president of liabilities, and chief financial officer, said James Hayslip, chairman of the MATCU board of directors (The Commercial Appeal July 10). The board’s action followed the resignation of CEO Carlos Webb in April. Once the credit union finishes its restructuring--which could result in more job cuts--it will initiate a search for a new CEO, the newspaper said. The credit union needed to operate with a more streamlined organization, so the board restructured the leadership roles, Maria McLendon, assistant vice president of marketing, told the paper. MATCU invested in bonds several years ago that nose-dived in value last year--particularly in the fourth quarter 2008. They resulted in the credit union losing $10 million, Hayslip told the paper. A call to MATCU by News Now was not returned by press time.

CUs work with members on auto delinquencies

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PERRYSBURG, SYLVANIA TOWNSHIP and HOLLAND, Ohio (7/13/09)--Several credit unions in Ohio are doing their best to work with their members who become delinquent on auto loans. Great Lakes CU, Perrysburg, Ohio, has been working to reduce the burden on its members who have had their cars repossessed. Instead of sending the cars to auction, the credit union has begun selling the vehicles itself--a situation CEO Dave Seeger describes as a “win-win.” Great Lakes received about 40 cents on the dollar when it auctioned cars. Now, the credit union receives 94% of the National Auto Dealers Association value of the cars. Auctions drove the price of the cars down, Seeger said. Although the sales process is more labor intensive for the credit union, the member, buyer and credit union receive a higher return than they would at an auction, he added. Great Lakes CU uses its website to advertise the cars it has for sale. It also has a partnership with a local tire store and parks two to three cars in the store’s lot to advertise. The credit union also may partner with a local dealership. One of the reasons the credit union’s auto sales have been successful is because the cars are in good shape. Generally, repossessed cars are in “tougher” shape because they weren’t taken care of, Seeger said. Today’s repossessions are due to job loss. The vehicles are newer, and the owners took care of them--but the owners happened to lose a job, Seeger said. When Great Lakes receives a car, it has the car detailed. Then staff look at repairing the car if there is something wrong with it. If a high rate of return is expected on the investment of the repair, the credit union will have the car fixed. Such investments have paid off, Seeger said. The credit union has sold more than 50 cars in the past year. Delinquency rates at Great Lakes have leveled off a little, but rates are higher now than they had been in previous years. However, repossessions are starting to decline, Seeger said. The most important thing a credit union can do to help members with delinquencies is to be proactive, according to Ron Patton, senior vice president of lending at Directions CU, Sylvania Township. The credit union’s real estate department will call members if they are late on their payments, Patton said. “They’re thankful we’re proactive,” Patton said. “Some are embarrassed about calling us. You can be proactive in a nice way--and it really helps to solve problems early.” When members are delinquent on their auto loans, the credit union will determine if their financial troubles are long term or short term. Often, they’re short term, he said. The credit union can modify the loan, reduce payments for a period of time, or rewrite the loan. “[We do] anything we can do to help them out, within reason,” Patton said. “It’s important to work with them as soon as you can--after two or three months, it’s really hard.” The three primary reasons for delinquencies are job loss, divorce and death. If the repossessed vehicle is in good shape, the credit union will try to sell it. If the vehicle needs repair or is in poor shape, it will be auctioned. About 60% to 65% of repossessions are taken to auction, Patton said. The money earned from the auction is not usually enough to pay off the loan--just a portion of it, he said. Jeep Country FCU, Holland, sells repossessed cars through sealed bids. After the car is repossessed, the member has 20 days to redeem it. If the car is not redeemed, the public can submit bids on it. The highest bid wins, Joyce Jones, collections manager, told News Now. The money earned from the sealed bid is seldom enough to pay off the member’s loan. The credit union also can choose not to take a bid if it’s too low, she said. Delinquencies at Jeep Country are starting to level off--but they’re still much higher than they were last year. The credit union has repossessed 27 vehicles so far this year--most of them due to job loss, Jones added. Jeep Country wants to work with members who are struggling to make payments because it does not want to repossess cars. “You call, we listen,” Jones said. “We do the best we can.”

GM Chrysler CU discounts to continue though year-end

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LANSING, Mich. (7/13/09)--General Motors (GM) and Chrysler credit union member discounts as part of the “Invest in America” program will continue through the end of the year, the Michigan Credit Union League announced Thursday. “Invest in America” is credit unions’ auto loan discount program with auto manufacturers General Motors Corp. (GM) and Chrysler Corp. The program started in December with a four-state pilot program for GM and a 12-state pilot for Chrysler. The program’s sales totaled 35,938 in June, the league said. Of Chrysler’s sales in June, 26% came through “Invest in America.” The number of GM and Chrysler car sales facilitated through the program so far--December through June--is 175,261. The program is on pace to sell 300,000 vehicles this year. To date, 140,209 loans value at $2.8 billion combined have been made through credit unions as part of the program.

Media blitz nets positive stories for CUs in California

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RANCHO CUCAMONGA, Calif. (7/13/09)--A media blitz conducted by the California Credit Union League netted a wealth of positive print stories about California credit unions accepting IOUs (registered warrants) during the state’s ongoing budget crisis. Stories have run or will run in several of the state’s prominent newspapers and business journals, and national news outlets such as CNNMoney.com and the Associated Press. Daniel Penrod, the league’s credit union industry analyst, and Henry Kertman, league vice president of public affairs, also have talked to public broadcasting station reporters. Dan Mica, president/CEO of the Credit Union National Association, will represent California credit unions when he speaks on the Public Broadcasting Station program “Nightly Business Report” scheduled for Tuesday evening, the league said. Many large banks said they would not accept IOUs after July 10 (Los Angeles Times July 10). Most credit unions told the league they are accepting IOUs and are not putting a time limit on them, Penrod told the Orange County Register Tuesday. The league has not found any of the 490 credit unions in the state that will not accept IOUs, he said. As of Thursday, 78 credit unions confirmed they are accepting the IOUs, the league told The Press Democrat. “Credit unions are being very proactive in letting their members know they will accept IOUs,” Penrod added. “Credit unions are owned by their members. Some have specialized memberships, such as public employees or firefighters.” Although some credit unions might not be able to accept the warrants because of pressure wrought by the credit crunch, “the vast majority have higher capital levels built in to handle situations like this,” Penrod told the Register. Since many credit unions largely avoided the risky loans that afflicted banks, they can afford to hold the IOUs until the state pays them off, said the Los Angeles Times Friday. Santa Ana, Calif.-based SchoolsFirst FCU, one of the largest U.S. credit unions with $7.750 billion in assets and more than 400,000 members, will accept IOUs until the end of July, Derek Longshore, vice president of marketing, told the newspaper. The credit union then will re-evaluate its position on a monthly basis before deciding whether to continue with IOUs, the paper added. “We'll be eating up capital when we do that, but we have conservative financial practices and have been able to amass a great deal of capital,” Longshore told the Times. “I don’t know whether secondary markets are charging fees, but we definitely are not.” The majority of credit unions have not set a deadline to stop accepting IOUs, Penrod told The San Diego Union-Tribune Wednesday. Storefronts that cash checks for a fee will compete with the banking industry for California’s IOU business, Penrod told Reuters Tuesday. “I could see a lot of bank customers turning to a third-party source and losing a lot of their paycheck,” he added.

Social media marketing topic of webinar series

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MADISON, Wis. (7/13/09)--Credit unions can learn how to effectively incorporate social media into their marketing programs through a new webinar series from the Credit Union National Association. The Social Media Webinar Series explains how to develop and incorporate a social media strategy into credit union marketing efforts by using free tools such as blogs, YouTube, Twitter, MySpace and Facebook. The four-session series runs Aug. 11-27 and is held in conjunction with the CUNA Marketing and Business Development Council (CMBDC). The series includes:
* Web 2.0 101--An Introduction to Social Media for Credit Unions. The Aug. 11 webinar is a social media primer that provides specific examples of the free online tools that are available to credit unions. It includes examples of how credit unions and others are successfully using these technologies and suggests tools that marketers should be leveraging, regardless of their level of engagement. * Results 2.0: Using Web 2.0 Tools to Achieve Real Business Objectives. The Aug. 18 webinar demonstrates how to build a Web 2.0 strategy that will accomplish credit union objectives. Jeffry Pilcher, publisher of TheFinancialBrand.com and founder of financial brand consultancy company ICONiQ, will also explain how Web tools can build a brand while selling products. Finally, he will offer his thoughts on the right and wrong way to build a strategy. * How to Tie Your Social Media Strategy into Your Overall Credit Union Objectives and Marketing Plan. The Aug. 25 webinar explores how to tie a social media strategy into currently existing channels. Using all of the lessons from this series, this offering helps determine how and where social media align with current marketing plans and other objectives and how to best integrate these plans. * Peer-to-Peer Social Media Web Roundtable. The Aug. 27 bonus session is open to those who attend the entire Social Media Webinar Series. It begins with panelists from three credit unions engaging in social media, followed by questions from participants.
Credit unions can register for individual sessions for $149 or for the entire series for $298. Members of the CUNA Councils can sign up for special discounted rates of $49 and $99, respectively, and will also receive access to an online social media discussion group included in their series registration package. For more information, use the link.

S.W. CUNA school looking for videos

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FARMERS BRANCH, Texas (7/13/09)--Southwest CUNA Management School and the Texas Credit Union League are accepting nominees for the 2009 Credit Union Movie of the Year Award (CUMA). Last year, at Southwest CUNA Management School, Larissa Walkiw, spokesperson for Commonwealth CU’s Young and Free campaign, won the first CUMA award for “The Difference Between Banks and Credit Unions--Part One.” The deadline for this year’s nominations is Thursday. The winning video will be chosen through an online vote. The winner will be announced July 21 at the school’s Alumni and Student Scholarship Auction and Networking Dinner. Eligible videos:
* Are no more than five minutes in length; * Premiered after July 2008; * Promote the credit union industry in a positive way; and * Are uploaded to a public site, such as YouTube.
For more information, use the link.

Illinois REAL Solutions CUs discuss VITA foreclosures

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NAPERVILLE, Ill. (7/13/09)--Illinois credit unions participating in the REAL Solutions program met to discuss the Volunteer Income Tax Assistance (VITA) program and resources from the state Treasurer's office regarding foreclosure and homeownership, said the Illinois Credit Union League. Duane Cole from the Center for Economic Progress and four credit unions that joined the VITA effort--NuMark CU, Sherwin Williams CU, Generations CU, and NorthSide Community FCU--briefed the group on their experiences with VITA. Foreclosure assistance was the primary topic of the meeting. Kevin Smith, director of financial education for the State Treasurer's Office, told attendees how the issue of foreclosure is affecting homeowners and communities across the state and how credit unions could act as a resource for members near foreclosure. He also highlighted tips and resources available from his office. Also from the Treasurer's office was Ben Noven, director of the Finally Home program, which helps state residents buy a home or keep their existing home from going into foreclosure. Credit unions can get involved in the program to help members with bruised credit or a high debt-to-income ratio obtain mortgage loans. The free program is open to credit unions who originate mortgages. The league and the Illinois Credit Union Foundation are working with the National Credit Union Foundation to offer the REAL Solutions for Low Wealth Households program. REAL stands for Relevant, Effective, Asset-building, Loyalty-producing solutions. (See RELATED story: "REAL Solutions CUs offer 26 products in low-wealth markets.")

REAL Solutions CUs offer 26 products in low-wealth markets

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WASHINGTON (7/13/09)--Credit unions providing REAL Solutions, the signature program of the National Credit Union Foundation (NCUF), are offering up to 26 products to serve consumers with low wealth. NCUF’s new baseline survey shows that more than half of REAL Solutions credit unions are offering the 16 most popular products. Nine of the most popular products are lending solutions. The percentage breakdowns are:
* For REAL Solutions credit unions, 91% make used-car loans to borrowers with low credit scores (D and E paper); * About 89% make small loans of $500 or less; * Some 85% offer tiered pricing so that applicants with low credit scores can be approved at risk-based rates; * Small business loans to members with low wealth and low-to-moderate income are made by 67% of the credit unions; * For young adults in the 18-30 age range, 67% of these credit unions design credit cards; * Credit unions that provide or plan to offer payday loan alternatives total 67%; * Roughly 55% provide or plan to structure mortgage programs for low-wealth and first-time homebuyers; * First-time vehicle loans for young adults from ages 18 to 30 are provided by 54%; and * Credit-builder loans to help applicants with thin credit files or no credit history are made by 54%.
Five of the most popular products are transaction services. REAL Solutions credit unions provide:
* Check cashing for members (92%); * Free checking accounts for members (86%); * Money orders for members and non-members (79%); * Checking accounts with debit cards specifically designed for young adults from ages 18-30 (77%); and * International remittances for immigrants to wire money to their families (62% provide or plan to).
Two of the most popular products are savings programs for emerging low-wealth markets:
* REAL Solutions credit unions providing special savings accounts for youth from ages 11 to 17 total 81%; and * About 68% provide or plan to offer comprehensive savings programs, including financial education to help low-wealth members save and build wealth.
NCUF’s survey also measures key criteria for determining REAL Deal credit unions, as defined by the Credit Union National Association and the American Association of Credit Union Leagues. For example:
* A total of 96% of these credit unions collaborate with other organizations to provide outreach; * Some 89% donate money to charitable programs; and * Those that provide financial literacy programs for all types of consumers total 83%.
The full survey report is available on NCUF’s REAL Solutions Impact Center.

CU System briefs (07/10/2009)

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* RIVERSIDE, Calif. (7/13/09)--The Altura Foundation, an educational arm of Altura CU in Riverside, Calif., recently awarded $46,000 in scholarships to 46 Riverside County High School college-bound seniors. The amount was $4,000 more than last year. About 44 were general scholarships and two were memorial scholarships. Since 1993, the credit union has helped more than 250 students receive scholarships. The scholarship program is funded by Altura CU members--$5 from the one-time $12 membership fee goes toward scholarships. Recipients are selected based on academic records, extracurricular activities, financial need and an essay. Altura CU has $889 million in assets ... * BURLINGTON, Vt. (7/13/09)--New England FCU has donated $25,000 to Burlington, Vt.'s Committee on Temporary Shelter (COTS), says the Association of Vermont Credit Unions (Newslines Express July 10). The presentation was made onstage before the Queen City Music Hour at the Flynn Theatre by NEFCU President John Dwyer, right. COTS' Grants Manager Beth Krueger is shown accepting the donation. COTS has provided services and shelter to families with children under age 18 for 25 years. (Photo provided by the Association of Vermont Credit Unions) … * BOULDER, Colo. (7/13/09)--Elevations CU is offering college student loans to help students fill the funding gaps left by federal financial aid, the credit union said. Students enrolled at least half-time in a degree-granting program, and with a qualified co-borrower, are eligible to apply for loans. Students can apply once and secure funding for their entire college career. If approved, students can borrow $1,000 to $30,000 per year, with a $75,000 maximum. Elevations CU, Boulder, Colo., has $898 million in assets ... * BURLINGTON, Mass., and LENEXA, Kan. (7/13/09)--EasCorp's campaign for its DeposZip consumer remote-check deposit service has needed a Bronze Quill award from the Kansas City/International Association of Business Communications (KC/IABC). The award went to EasCorp and its communications firm, MJB Public Relations Group. The Bronze Quill is given for a communications project based on content that demonstrates careful and imaginative planning; a clearly stated purpose; high and consistent editorial and design standards; and significant and measurerable results achieved. The campaign included opinion/editorials and educational articles; print publicity; select print, online and e-mail advertising; and online communications … * MADISON, Wis. (7/13/09)--CUNA Mutual Group has redesigned its
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website to improve search navigation and streamline the information. Changes were made after it received input from its users. The number of pages on the site was reduced to 105 from 2,000. “Customers told us less is more,” said Nancy Fisher, director, CUNA Mutual marketing operations and brand management. “There were too many pages with too much information on them, so we downsized dramatically.” CUNA Mutual also added a Solutions Wizard to help users locate solutions for common issues. More than four million people use the site each year, CUNA Mutual said. (Photo provided by CUNA Mutual Group) ... * CAPITOLA, Calif. (7/13/09)--A Bay FCU employee helped inspire 475 people to register to donate bone marrow during the Be The Match Registry drive the $600 million asset credit union conducted in June. Seventy donors registered in person June 13 at the Capitola branch. Another 405 registered online at www.BeTheMatch.org, the online registry of the National Marrow Donor Program. The credit union's community support team decided to host the registration drive after Amy Ivey, assistant vice president of marketing and development, donated marrow through the program in December 2008. She registered in the program in 2004 and was contacted last fall. After additional testing, Ivey was deemed a perfect match for a 25-year-old man with a prognosis of less than a year to live. He was given an 85% chance of recovery. Local media, including the Santa Cruz Sentinel and a major television state on the coast covered her story, said the credit union …

CU System briefs (07/09/2009)

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* SACRAMENTO and RANCHO CUCAMONGA, Calif. (7/10/09)--The California Department of Financial Institutions (DFI) issued guidelines after receiving inquiries on whether credit unions and other state-chartered financial institutions are subject to limitations in cashing and holding registered warrants--the IOUs the state has distributed while it deals with its budget crisis. A financial code limit on the amount of obligations one person may owe to a bank at any time is not applicable to the IOUs. Neither are sections of the financial code that limit the amount a bank may invest in the security of one obligor. Credit unions may invest in the IOUS without a specific limitation on the amount, the directive said. Meanwhile more than 63 credit unions in the state are accepting the IOUs. Use the link for a list of the credit unions … * DURHAM SPRINGS, La. (7/10/09)--LA DOTD FCU announced Thursday it is changing its name to Main Street Financial FCU, effective July 20. The change reflects the growing diversity of its membership while honoring its legacy of serving employees of the Louisiana Department of Transportation and Development. The 70-year-old credit union's membership has grown to include several communities as well as LA DOTD contractors and consultants, and more than 200 corporate partners, said President/CEO Cary J. Anderson. The $103 million asset credit union serves anyone who lives, works, worships or attends school in Livingston, Calcasieu and Cameron parishes. "We believe Main Street Financial connotes the strong family and financial values that are at the heart of the credit union," said board Chairman Judy Wascom … * DEER PARK, Texas (7/10/09)--Shell FCU, a $354 million asset credit union based in Deer Park, Texas, announced that its loans during June broke records, with the credit union closing more than $17 million in consumer loans, mortgages and credit cards. Shell attributed the growth to its summer auto loan special with 90-day deferred payments, aggressive marketing efforts and exemplary staff participation. "We're not feeling the credit crunch at Shell FCU, and we're proving it to our members with our latest marketing billboard campaign stating, 'Banks taking all YOUR credit? We give CREDIT where credit is due,'" said D'Anne Turner, vice president of lending … * ANDERSON, S.C. (7/10/09)--Anderson County Educators CU, Anderson, S.C., will merge with S.C. State CU, Columbia, the credit unions announced (The Anderson Independent Mail July 8). Educators, with one branch, has $5.5 million in assets and serves employees and retirees from several area school districts and colleges and Anderson University. State CU has $455 million in assets. Its 17 offices in 12 towns serve employees of city, county and state agencies, those enrolled in the state Retirement Systems, and students and staff of any state-chartered college, university or technical college system … * RANCHO CUCAMONGA, Calif. (7/10/09)--California Center CU (CCCU) has moved to Ontario, Calif., from Rancho Cucamonga to share the property as its sponsors, which include the California Credit Union League and CU Direct Lending (CUDL). According to the $9 million asset credit union's president/CEO, Linda Pettit, "The new location provides California Center not only the ability to be near its sponsors but also enables the credit union to position itself, for the first time in its 41-year history, in a retail center with increased visibility and the opportunity to expand and grow." Its location near the city's airport makes the credit union the first financial institution location for visitors and travelers. The credit union also updated its brand and logo …

N.C. league thanks Sen. Hagan for fin-lit bill

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GREENSBORO, N.C. (7/10/09)--The North Carolina Credit Union League has sent a letter to U.S. Sen. Kay Hagan (D-N.C.) thanking her for introducing the Financial Literacy for Students Act of 2009 (S.B. 1339). Hagan introduced the bill on June 24. The bill aims to improve financial literacy among middle and high school students by giving states federal grants for integrating financial literacy curriculum in their schools statewide. The bill provides that 80% of funds would be earmarked for curriculum, with 20% for training teachers. League President John Radebaugh wrote in the letter, "Credit unions work hard to ensure that the next generation is responsible with their financial futures, and the Financial Literacy for Students Act of 2009 can only solidify that promise." Radebaugh noted that North Carolina credit union employees each year conduct 350 financial education workshops that reach more than 15,000 students. He mentioned the National Endowment for Financial Education's High School Financial Planning Program, Biz Kid$ curriculum based on the popular PBS show about young entrepreneurs, and Credit and Money Management. The league holds a seat on the board of the North Carolina Jump$tart Coalition, and the Carolinas Credit Union Foundation helps underwrite Biz Kid$ programming as well as provides supporting materials to more than 500 middle schools. Hagan is a "big supporter of credit unions' efforts in financial literacy," the league said on its website. "As our students enter the work force," the senator said in a statement released by her office, "it is critical that they have the tools they need to make sound financial decisions when applying for credit cards, securing student loans, taking out a mortgage and managing a budget."

Two more file suits on CUNA Mutuals credit disability

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RAPID CITY, S.D., and GREENVILLE, S.C. (7/10/09)--Two more credit union members have filed suits against CUNA Mutual Group and CUNA Mutual Insurance Society (CUMIS) regarding credit disability benefits. Conrad Perovich, a member of Dacotach FCU, Rapid City, S.D., filed a lawsuit July 2 in U.S. District Court in the District of South Dakota, Western Division, against CUNA Mutual Group and CUMIS for denying him credit disability coverage. Perovich is suing CUNA Mutual and CUMIS for rejecting disability benefits regarding a claim he submitted Feb. 28, 2008, for benefits between Jan. 9, 2007, and Jan. 11, 2008. CUNA Mutual denied Perovich’s claim on March 17, on the basis that he had not filed for benefits within the time frame allowed under the certificate of insurance, the complaint said. Perovich claims that he did file within the time allowed by the certificate of insurance, which says that proof of loss must be submitted within 90 days when the claimant’s disability stops. Russell Smith, a member of Market USA FCU, Laurel, Md., also filed suit May 7 in South Carolina after CUNA Mutual Group refused to pay benefits after Smith became disabled, according to the complaint. “CUNA Mutual carefully examines each claim and pays benefits due under the policy,” said Phil Tschudy, CUNA Mutual media relations manager. “We are in a closely regulated industry, and we routinely work with regulators to review claims handling practices. We are fully transparent, and the interpretation of the policy that is being challenged was one that no court had ever disagreed with,” he told News Now. CUNA Mutual is reviewing past claims that might involve a similar situation, and will work with regulators to discuss how to best handle the situation, he added. “As a mutual insurance company, our responsibility is to administer our claims fairly, and we consistently meet that responsibility,” Tschudy said. In 2008, CUNA Mutual paid out $1.6 billion in benefits to policyholders, of which $385.6 million were in claims for credit insurance. In June, the estate of Teri Powell, who died of cancer in 2007, won a lawsuit against CUNA Mutual Group. She filed the suit after CUNA Mutual denied credit disability benefits on her home equity loan (News Now June 16). CUNA Mutual Group is considering an appeal of that decision.

Texas league media efforts result in 147 articles

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FARMERS BRANCH, Texas (7/10/09)--The Texas Credit Union League has placed 147 stories and articles about credit unions and the movement in media channels since the year began. That's not bad, considering that today is the 191st day of the year. The articles appeared in newspapers, on radio and on television, said the league (LoneStar Leaguer July 10). According to an unnamed independent service, the league exposed credit union messages to more than 5.8 million people around the country. The "ad value"--what it would have cost to purchase the space covered--was calculated at nearly $2 million worth of free publicity, the league said.

Deadline for CU training awards is Aug. 3

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MADISON, Wis. (7/10/09)--The deadline is Aug. 3 for entries in this year’s Experience Learning Live (ELLy) Training Awards program for credit unions, sponsored by the Credit Union National Association (CUNA). Awards will be presented at the 2009 Experience Learning Live conference, held Oct. 25-28 in Nashville, Tenn. The ELLys are the only national awards presented to credit union trainers who are outstanding in professional staff development. Awards will be presented in two asset divisions--less than $250 million assets and $250 million assets or above--in six categories:
* Chi Phi Delta X II Award--Represents the best development of a Credit Union University, and its effect on staff learning and performance, using CUNA’s Center for Professional Development products as the foundation; * Coach Award--Recognizes a trainer who has significantly impacted a trainee’s career and life through education, mentoring and coaching. The entry can be submitted by employees or trainers in honor of trainers who impacted their own or their co-workers’ lives and careers; * eLearning Award--Demonstrates how technology-based training was incorporated into, and enhanced, credit union training programs; * Training Champion Award--Singles out senior management staff who go beyond the call of duty to support and develop the training in their credit union; * Training Professional of the Year Award--Honors exceptional achievements in performance and learning by a credit union training professional or department; and * WOW Award--Awards the credit union with the best overall training curriculum or best training event.
For more information, use the link.

Filene selects 22 new i3 members

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MADISON, Wis. (7/10/09)--The Filene Research Institute has selected 22 credit union executives to join the institute’s i3--Ideas, Innovation, Implementation-- program, which fosters the development of new ideas and innovations for credit unions. Each member will serve a two-year term and participate in semi-annual meetings arranged by Filene. The next meeting will be Sept. 29 through Oct. 2 in Montreal, Quebec. Seventeen individuals representing 12 states were selected, Filene said. Also, for the first time, i3 will include a five-person Canadian team representing three provinces. Denise Gabel, Filene’s chief innovation officer, noted that Filene is “eager to continue our collaboration with our friends to the north and explore their financial model at our fall meeting.” Currently, i3 members are working on topics such as the American Dream, sustainability, and income generation. i3’s most recent idea is an anonymous debt management tool for members. Credit unions can test drive the tool at DebtinFocus.org and tap into the service by e-mailing innovation@filene.org. Filene received more than 60 applications from qualified credit union executives. The selection was based on innovative aptitude, experience, and other factors including present position, leadership abilities, motivation, geography and type of credit union. “Innovation is a people business,” Gabel said. “Having such a rich talent pool in these challenging economic times illustrates the industry’s strong commitment in building a better tomorrow.” New i³ members are:
* Shelly Berryman, director of member advocacy, SchoolsFirst FCU, Tustin, Calif.; * Corey Bowes, chief operating officer, OMISTA CU, Moncton, NB; * Dawn Collins, project manager, Mt. Lehman CU, Abbotsford, BC; * Julie Cosgrove, vice president of employee relations, Affinity Plus FCU, St. Paul, Minn.; * Mark Coudriet, vice president of information technology, Xceed Financial CU, El Segundo, Calif.; * Louise Delaney, manager, marketing, Salmon Arm Savings and CU, Salmon Arm, BC; * Yolanda Draine, senior vice president of human resources, First South CU, Bartlett, Tenn.; * Paul Ebisch, chief financial officer/vice president, Assemblies of God CU, Springfield, Mo.; * Jackie Edwards, business development manager, Connexus CU, Rothschild, Wis.; * Ernesto Flores, executive vice president, Camino FCU, Montebello, Calif.; * Josette Gauthier, senior vice president, human resources, Alterna Savings, Toronto, Ont.; * Matthew Henry, vice president of information technology, Elevations CU, Boulder, Colo.; * Jane Kennedy, marketing and business development manager, Utilities Employees CU, Wyomissing, Pa.; * Mike Kenzie, chief administrative officer, Patriot FCU, Chambersburg, Pa.; * Paul Kirkbride, vice president of credit services, Unitus Community CU, Portland, Ore.; * Tamela Meade, vice president of member service, American Airlines FCU, Fort Worth, Texas; * Toni Montgomery, community relations manager, Americhoice FCU, Mechanicsburg, Pa.; * Chris Phillips, director of marketing, Land Of Lincoln, CU Decatur, Ill.; * C.J. Presto, vice president of finance, Baxter CU, Vernon Hills, Ill.; * Lisa Randall, vice president, lending and marketing, Vermont FCU, Burlington, Vt.; * Domenic Vinci, senior vice president and chief operations officer, Interior Savings CU, Kelowna, B.C.; and * Alison Wolf, vice president of marketing, FAA CU, Oklahoma City, Okla.
For more information, use the link.

Ohio membership rises--first time in five years

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COLUMBUS, Ohio (7/10/09)--More than 20,000 new members were added to the rosters of Ohio credit unions between March 2008 and March 2009, according to the Ohio Credit Union Quarterly Performance Summary. It's the first membership gain in the state since 2004. The new membership is a strong indication that the economy is causing many Ohioans to review their finances, said the Ohio Credit Union League. In addition, credit union assets and lending continued their steady growth, posting gains of 8.11% and 8.26%, respectively, during that period. "Credit unions have the capital to work individually with our members to help them manage financial stress and, in many cases, have modified existing loans to ease income losses or other financial hardships. That makes us attractive to Ohioans," said Paul Mercer, league president. The average Ohio credit union capitalization level is at 11.7%, the report said. Regulators consider credit unions well-capitalized at or above 7%. The Credit Union National Association's (CUNA) "Benefits of Membership" report notes that Ohioans receiving their financial services from an Ohio credit union are benefiting financially. The report--which compares Ohio credit union and bank dividend rates, interest rates and transaction fees--notes credit unions provided more than $184 million in direct financial benefits to the state's members last year. That equals $71 per member and $135 per household. Other first-quarter indicators for the state's 407 credit unions:
* Mortgage originations rose 63.6% during the quarter; * Auto lending market share more than doubled--to 18.1%; * Asset quality remained strong despite a pickup in delinquencies (1.28%) . The delinquency rate of the state's credit unions remains below the national average and that of state banks.
Membership in Ohio credit unions totals 2.64 million. The average credit union has 6,369 members, nearly $47.5 million assets and $29.2 million in loans. They employ more than 6,800 people and contribute nearly $140 million in employee compensation annually.

CUs can make most of bank in-fighting says OCUL

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COLUMBUS, Ohio (7/10/09)--Credit unions can capitalize on increased in-fighting between large and small banks over big banks’ bailout with federal tax dollars, and banks’ reduced political lobbying and campaign contributions, according to the Ohio Credit Union League. The Independent Community Bankers of America ran a full-color ad in a June edition of Roll Call, a Capitol Hill newspaper, criticizing “irresponsible big institutions getting bailed out by the U.S. government using their tax dollars.” In contrast, it claims that “community banks exist to protect and provide for [ordinary people]" (eLumination Newsletter July 8). These trends, combined with the positive attention given to credit unions throughout the economic crisis, create one of the greatest advocacy opportunities of the decade, said John Florian, league vice president of government affairs. “Elected officials and policymakers are eager to learn about credit union differentiation, how members are empowered through affordable and accessible services, and that credit unions are local institutions that benefit their communities,” Florian said. “Additionally, it presents an ideal opportunity to educate legislators on changes needed to enable credit unions to better serve current and potential members.” Advocacy not only helps credit unions retain their tax-exempt status, but also serves to enhance credit unions’ business environments---such as increasing the cap on member business lending and revising prompt corrective actions levels, Florian added. “The bottom line is banks are distracted and have focused their attention elsewhere,” Florian said. This provides an opportunity for credit unions to ensure a thriving future for the credit union movement, he concluded.

Popes financial crisis encyclical cites CUs love

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MADISON, Wis. (7/10/09)--Love and credit unions function in the same manner, said Pope Benedict XVI Tuesday in his third encyclical, “Charity in Truth,” which focused on the economy, business and finance. “If love is wise, it can find ways of working in accordance with provident and just expediency, as is illustrated in significant ways by much of the experience of credit unions,” he wrote (The Wall Street Journal Blogs July 9). The encyclical is widely seen as being directed at G-8 world leaders gathering in Italy this week. The Pope speaks about the need to use the economy to help the poor and care for the environment. He also supports globalization as a way to lessen poverty, and he supports the idea of a free market. The pope is from Germany, where the first credit society in the world was established in 1849 by Frederick Raiffeisen, the mayor of a small town. Raiffeisen devised a credit society to help people help themselves instead of relying on charity from land barons. In 1852, Raiffeisen and Hermann Schulze-Delitzsch established the first true credit unions in Germany (Credit Union National Association).

More CUs more members worldwide--WOCCU stats

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MADISON, Wis. (7/10/09)--Credit unions worldwide are expanding at a steady pace, with more members being served by more credit unions in 2008 than in the previous year, according to the just-released World Council of Credit Unions’ (WOCCU) 2008 Statistical Report.
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Survey respondents from 97 countries reported that 53,689 credit unions served nearly 186 million members last year. In 2007, roughly 49,134 responding credit unions reported serving roughly 177 million members in the same number of countries. The number of credit unions responding to the survey grew 9% for 2008, while the number of members of those credit unions jumped by 5% compared with 2007 results published last year. First-time responses from Ethiopia and Haiti helped drive credit union and member growth in Africa and the Caribbean. Other areas of the world showed modest growth or slight declines in the number of credit unions. Global credit union assets in 2008 totaled $1.19 trillion, up from 2007 total of $1.18 trillion. Credit union savings worldwide last year reached $995.7 billion, also an increase from $987.9 billion in 2007. Loans worldwide dipped slightly to $847 billion in 2008 from $847.9 billion the previous year. “The 2008 results show us that credit unions worldwide are effectively weathering an economic storm that has had disastrous effects on some other financial sectors,“ said Pete Crear, WOCCU president/CEO. “Currency valuation changes in countries around the world may have tempered aggregate financial progress as reported in U.S. dollars, but growth in the number of institutions responding this year tells us credit unions are alive and well, and on the path to serving an ever-increasing number of members,” Crear said. WOCCU has collected annual statistics on the international credit union movement for the past 36 years to produce its annual Statistical Report.

Mortgage loans waaay up says CU Members Mortgage

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DALLAS (7/10/09)--Federal government initiatives to boost the nation’s housing market have created a lending boom for CU Members Mortgage and its credit union partners. CU Members Mortgage reported an increase of 83.2% in the number of closed loans from January through May, compared with the same period in 2008. About 4,580 loans for $756 million were closed in the first five months of 2009 compared to 2,500 units for $386 million in January through May 2008. While 77% of new mortgages take the form of refinancings, government programs also are stimulating new home purchases--especially for first-time buyers. An $8,000 first-time home buyer tax credit will apply to home purchases closed by Dec. 1 for qualified buyers. The tax incentive, combined with record low rates and an abundance of houses for sale in the market, has prompted many to buy homes for the first time, CU Members Mortgage said. “For many, low rates and incentives make ownership possible for the first time or allow them to move up to a larger home, and that is good for our country’s economic recovery,” said David Motley, president of CU Members Mortgage. “Likewise, those who are refinancing to a lower interest rate on their existing home loans typically lower their monthly payments, and that frees up cash for other needs.” CU Members Mortgage provides mortgage services to more than 900 credit unions, credit union service organizations and leagues.

Four CUs hit by insider embezzlement schemes

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MADISON, Wis. (7/10/09)--Credit unions experienced a rash of insiders accused or convicted of embezzlement schemes this week. Four incidents involved a manager of a defunct credit union, a branch manager who also is a pastor, a loan officer and a clerk. The amounts taken totaled nearly $1.7 million. The four incidents involved:
* Tampa, Fla.-based Suncoast Schools FCU loan officer/branch manager and pastor Donnell Dewitt Williams, who, along with three church members, was charged with grand theft, identity theft and money laundering. Authorities said he doled out more than $400,000 in fraudulent loans to family, friends and parishioners, and kept $50,000 for himself. Three parishioners acted as recruiters for the scam by encouraging church members or relatives in need to take out a small loan. The ring would "help" the borrowers with the application by falsifying information to get the loan approval. Of 400 accounts examined, 120 were fraudulent, said the Hillsborough County Sheriff's Office economic crimes unit. (St. Petersburg Times July 8). * Marlene Aguilera Pena, former manager of the now-defunct Marian Miami FCU in Miami, Ariz., who was indicted on 25 counts of embezzlement by an employee of a lending, credit or financial institution. The U.S. Attorney's Office in Phoenix said Pena embezzled $1.18 million between 2001 and July 2006 by creating more than 140 fictitious loans and fraudulently issuing checks to family members and friends. She had worked for the credit union since 1994 and became its manager in 2000. The embezzlement led to the collapse of the credit union, said authorities (The Associated Press via Charleston Daily Mail July 8). * Angelica Sagote, 21, a former clerk at Pacific Postal CU, who was sentenced to three years and 10 months in prison for her part in a robbery that netted more than $76,000. She provided inside information to her uncle, Sefo Sagote, and Elisara Taito after she was fired from the credit union over money missing from her cash drawer. The two men attempted to rob the credit union on Aug. 4 but fled with purses of two customers before completing the robbery. Two days later, the pair robbed the credit union of $76,000, with Angelica Sagote acting as the getaway car driver. Police recovered $32,000 when they made the arrests ( San Francisco Chronicle and Associated Press Newswires July 8). * Crystal Smith, a former loan officer at Bluegrass Community CU, Ashland, Ky., who was sentenced to 57 months in prison by U.S. District Court Judge David L. Bunning for credit union fraud, bank fraud and aggravated identity theft. Smith admitted using her position as loan officer to create fraudulent loans over 18 months beginning October 2006 by using other people's Social Security numbers. More than $165,000 was embezzled (Targeted News Service< July 7).

Regulator commends CUs efforts in Calif. budget crisis

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ALEXANDRIA, Va. (7/9/09)--While California's banks are denting their image from playing hardball on registered warrants--IOUs stemming from the state's budget crisis--credit unions received commendation from their federal regulator for their flexibility in working with the IOUs. "Credit unions are making a business decision to accept these warrants to assist their members affected by the financial situation confronting the state of California," said National Credit Union Administration Chairman Michael E. Fryzel. "I commend the credit union community in California for their willingness to prudently work with affected members, exemplifying what credit unions do best," he added. California lawmakers are wrestling a $26.3 billion state budget deficit. The state was expected to send out more than $3.3 billion in IOUs for the month to private contractors, state vendors, people getting tax refunds and local governments for social service. But banks are pressuring the legislature to end the impasse by saying they will not accept the IOUs after Friday. That tactic is earning them criticism from consumer advocates, and some say banks may lose customers to institutions willing to accept the IOUs longer--like credit unions. Credit unions have not set a deadline for accepting the IOUs, whose official redemption date is Oct. 2. According to California Credit Union League spokesman Henry Kertman, nearly 60 credit unions already have confirmed they would accept the IOUs. Only two indicated they might stop accepting them on Friday (Associated Press July 8). Credit unions are bucking the banks over the IOU issue to help their members, not to gain a share of the business now controlled by banks, said league economist Daniel Penrod (Union-Tribune July 8). Mission FCU is accepting IOU deposits of up to $5,000 from those who were members as of July 1, said Chief Financial Officer Ron Araujo. If the state warrants are larger than that amount, deposits must be approved by branch managers, he told the newspaper. At San Diego Metropolitan CU, which serves primarily city employees, a two-day hold will be placed on warrants from members who have belonged to the credit union for less than 30 days, said Linda Rossi, senior vice president of operations and marketing of the credit union. Riverside, Calif.-based Altura CU announced Tuesday it is accepting the IOUs without setting a deadline for them. "We realize that many of our members do not have the luxury of waiting months to access their money," said Ricki McManuis, senior vice president of corporate communications at Altura. "People need to be able to cash those warrants because they can't write IOUs to pay their own bills." The credit union will hold the warrants and redeem them when they mature. State Controller John Chiang's website advised Californians to contact their financial institution, and if the institution won't accept the warrants to "open an account at another financial institution that will accept registered warrants, or you will have to hold the warrant until it matures on Oct. 2." Banks are being criticized for taking multibillion dollar bailouts from the federal government while declining to lend a hand to the state's budget stalemate. Those warning they won't accept the IOUs beyond Friday include JPMorgan Chase & Co., Bank of America Corp., Wells Fargo & Co. and Citigroup Inc., as well as some regional banks, said Associated Press. Consumer advocates and government officials said banks should be more sympathetic, especially since they've benefited directly from taxpayer dollars. The IOUs carry an interest rate of 3.75%.

CUs fill void as student-loan lenders retrench

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CHICAGO (7/9/09)--Credit unions' student lending programs have gained the attention of The Chronicle of Higher Education. With traditional student loans in short supply as lenders retrench through the economy, credit unions are stepping into the opportunity of private student lending, Credit Union National Association Senior Economist Mike Schenk, told the publication (July 10). "It's very clear that in general, while other lenders are retrenching and scaling back, credit unions are lending more and more," Schenk said. Twenty-two credit unions in Connecticut have signed onto private loans since June, when Connecticut passed a law providing a partial guarantee for private loans credit unions make to students who are state residents or who attend college there. Fifteen credit unions in New Jersey pooled $50 million so they could make private student loans, New Jersey Credit Union League President/CEO Paul Gentile told the Chronicle. Very few of them were offering private loans before the group collaborated. Several other states' credit unions have expressed interest in the program, he said. Others offering the loans include USC CU at the University of Southern California, Los Angeles; Harvard University Employees CU and MIT FCU, both of Cambridge, Mass.; and Stanford FCU, Palo Alto, Calif., (News Now April 17, Jan. 26, June 11). Some of the programs offer specialized graduate student loan programs for international students who don't qualify for federal aid. And Credit Union Student Choice, a credit union service organization (CUSO) that provides turnkey private student lending services to more than 82 credit unions nationwide, has noticed the uptick in interest among credit unions. Those 82 credit unions have made about 3,000 loans, with an average rate of 5.8%. None of the credit unions charged origination fees. Other lenders typically charge 0% to 6% in origination fees, said Michael J. Weber, vice president of marketing at Credit Union Student Choice. In the Chronicle's article, Weber noted that there's been more discussion and activity among credit unions about student lending that ever before. On Tuesday, Credit Union Student Choice announced the creation of two new staff positions to help develop its program and accommodate the increase in business, according to a press release from the CUSO. Why the interest in student lending?
* Credit unions' membership is aging. Student loans help attract the younger set. * Credit unions didn't sell loans on the secondary market, so now they're in good position to offer the loans--unlike the big banks that watched their secondary market dry up. * Credit unions realize it's yet another opportunity in a bad economy to show how they come through to meet their members' needs.
Meanwhile, 31 Democrats said in a letter Tuesday that rather than ending the Federal Family Education Loan (FFEL) program--the major federal student lending program--Congress should look at alternatives. President Barack Obama's Fiscal Year 2110 budget would end the program and shift all federally backed student loans into the government-funded Direct Loan Program. It would make funding for Pell Grants mandatory (Congress Daily AM July 8). Among those signing the letter were Reps. Paul Kanjorski (D-Pa), Stephanie Herseth Sandlin of South Dakota, and Allen Boyd of Florida. The letter said that jobs in the legislators' states were at stake. The congressional publication said the letter could boost an alternative plan from a coalition of student lenders that includes nonprofit, state-based guaranty agencies. The alternative plan, based on a proposal that Sallie Mae made earlier this year, would preserve an originating and servicing role for private lenders but use capital from the federal government to make student loans.

Harvard researchers extol CUs cards practices

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CAMBRIDGE, Mass. (7/9/09)--Two Harvard researchers, using their independent research, extolled the virtues of credit unions' credit card practices in an op-ed item in The New York Times (June 23). The article, by doctoral students Ryan Bubb and Alex Kaufman, pointed out that the credit card industry says the Credit Card Accountability, Responsibility and Disclosure (CARD) Act "spells the end of the credit card as we know it." However, credit unions' example "puts the lie to these claims. Credit unions conform to the new rules already, while profitably maintaining the basic features that users know and love," they wrote. They conducted a study that compared credit cards issued by banks and those issued by credit unions. "We found that credit unions are less likely to charge the fees and penalties that the new act hopes to eliminate--and when they do, they charge less than other issuers." They also found that credit unions do not increase the interest rate if the borrower fails to make a minimum payment on time, they charge on average half the amount other issues charge for exceeding credit limits, and they offer lower annual fees and longer grace periods than other cards. Credit union cards "are a great test case for how regular cards will perform under the new law," Bubb and Kaufman wrote, warning, "Any bank that attempts to pad its bottom line by, say, levying large annual fees will likely see its customers flee to credit unions or to banks that emulate the credit union model." "Credit union cards demonstrate that punishing fees are not an essential ingredient of profitable lending. This should help assuage fears that the credit card act will bring disaster for credit cards. Rather, it should nudge them toward the gentler credit union model that many Americans already enjoy." Reacting to the study, Brett Thompson, president/CEO of the Wisconsin Credit Union League, said in a press release that because the new law will send many banks scrambling to devise new ways to drive profits, it's still up to bank customers to understand the terms of their cards, read the fine print and be vigilant to protect their own interests. "This study supports what we have always said," Thompson said. "Wisconsin credit unions look out for the best interests of their 2.2 million member owners, not just protecting them from unnecessary costs for credit cards but also on savings, loans, checking accounts, ATMs and just about every other financial service working people use." The league provided several media spots about the survey featuring Chris Henzig, league director of communications, explaining the study's results.

NYIB Friday is deadline to report classroom work

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COLUMBIA, S.C. (7/9/09)--The National Youth Involvement Board reminds credit unions that the deadline for reporting classroom financial education presentation data is Friday. NYIB will recognize top presenters and states at its annual conference Aug. 3-6 in Tempe, Ariz. The NYIB website will accept continual presentation data entry, but the official reporting year is July 1, 2008, to June 30, 2009. Reported data indicate that credit unions reached 300,000 students in classrooms for the second consecutive year. Youth advocates reported 11,245 presentations reaching 374,099 students in the 2007-2008 school year, NYIB said. “Based on classroom data, this year’s challenges have not dampened credit unions’ engagement with young people,” said NYIB Chairman Brandon Pugh, who is also director of communications and public relations at the South Carolina Credit Union League. NYIB’s website allows users to set up profiles, retrieve data, and enter schools or organizations for presentation entry. Collected data is valuable to credit unions, their associations and regulators, and legislators, NYIB said. For more information, use the link.

CFO Council grants record scholarships in 2009

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MADISON, Wis. (7/9/09)--Twenty-six credit union chief financial officers (CFO) and other financial professionals received nearly $50,000 in scholarships from the CUNA CFO Council this year. The council said that earlier this year it recognized that the recession would likely mean new financial challenges and decreased training budgets for credit unions in the coming months. To provide credit unions with more options to meet these challenges, the council increased its scholarship budget to this record amount. Scholarships were awarded based on financial need and could be applied to the council’s annual conference or Credit Union National Association educational programs. For more information, use the link.

CUs new elite card deemed one-of-a-kind

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FARMERS BRANCH, Texas (7/9/09)--Texas Dow Employees CU (TDECU) and TNB Card Services have launched a card product, Onyx, which blends revolving and non-revolving credit to offer triple buying power. The card was designed to compete with elite card brands. Onyx targets members with credit scores of 720 or higher. A cardholder with a $10,000 credit limit can access up to three times the line of credit. The first $10,000 is on a revolving limit, like a traditional card. The remaining balance, or non-revolving credit, is due in full at the end of each billing cycle, said the Texas Credit Union League (LoneStar Leaguer July 8). Cardholders also earn up to 2% cash back for all purchases, including non-revolving transactions. The card also has a benefits package that includes purchase assurance, price protection, extended warranty, travel accident and baggage delay insurance, master rental and concierge service. TDECU and TNB worked together to develop the card. “We took a look at our entire membership, and selected benefits that we felt would be attractive to our members from a brand and feature perspective,” said Ron Wright, TDECU vice president of payment systems. “It wasn’t an easy task, considering we completely customized our processing for this product by developing new fraud tables and risk management strategies in order to manage the complexity and expansion of the product,” added Darby McDermott, TNB Card Services account executive. “We also deployed an advanced behavioral scoring system to routinely monitor cardholder credit and automatically set new spending thresholds based on evolving credit score.”

IKiplingersI touts CUs on service rates

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WASHINGTON (7/9/09)--Credit unions are luring refugees from big banks with better rates and personal service, according to Kiplinger’s Personal Finance Magazine in its upcoming August issue. “Big banks want your money, too, but they’re turning customers off with higher fees and tighter lending--not to mention stress tests and troubled assets,” Kiplinger’s said. “They continue to raise fees, even as the grab for business intensifies and consumers are more cost-conscious.” The magazine touted credit unions’ lower fees by citing statistics from the Credit Union National Association (CUNA) that reveal the difference between what credit unions and banks charge for services. For instance, credit unions charge an average of $25 for overdrafts, while banks charge $30. Also, interest payments on a $25,000 loan for 60 months from a credit union would be $184 less than at a bank, the magazine said. Kiplinger’s also noted credit unions’ lower rates on auto loans. It gave an example of on credit union that charges 3.99% for loans with 12- to 60-month terms. Georgia’s Own CU, Atlanta, offers loan rates as low as 5.2% for 60 months. The credit union also says it will lower rates by a half-point if a member buys a hybrid vehicle, and promises $100 if it cannot lower members’ monthly payments when refinancing car loans.

Nows time to shine--economist to mountain CUs

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POST FALLS, Idaho (7/9/09)--Credit unions have managed through 20 recessions in their 100 years of existence and are flush with opportunities to help them through this one, an industry economist told a gathering of the Mountain Regional Credit Union Roundtable Wednesday. “A down economy should be viewed as an opportunity, not an excuse," Dave Colby, chief economist at CUNA Mutual Group, told 100 attendees. "Credit unions possess so many strengths that can be leveraged in showing members the value they bring them. What we do now will define us going forward.” Colby advised focusing on existing members first. “Use uncertainty as an advantage. Many consumers have been hurt during the recession" and are looking for someone local, they can trust. "Credit unions’ key differentiators over at least the next couple of years will be trust and community.” From a lending standpoint, members are looking for guidance and credit with reasonable terms, Colby said. He advocated a number of ways to leverage those needs by re-writing consumer loans from other institutions, helping members identify great bargains on homes or vehicles and providing an alternative for members struggling with onerous terms from other lenders. “Another strategy to employ with existing members is to promote thrift as a debt alternative,” Colby added. “Some members need to learn how to save, while others are looking for asset preservation. Sell the benefits of saving – from achieving a dream through a down payment to the value of having rainy-day funds versus being forced into bad credit terms in an emergency.” Even existing members don’t know all their credit union can do for them, Colby said. “You have the financial expertise to benefit members. Provide things like financial literacy assistance, or simplify consumer finance through direct deposit or auto bill pay. Then, elevate your credit union’s status in the community by promoting member and employee successes.” Colby cautioned credit union leaders not to focus too much on the current challenges and ignore the future. “Don’t neglect strategic planning. You need to prepare now for the path you will pursue in serving your future membership. “By focusing on your members and their needs during difficult times, they will become your biggest ambassadors. They won’t forget who was there for them when the going was tough. Not only will they become more ‘sticky,’ you’ll find them to be the best marketing tool you could possibly have.”

Violent acts infrequent in CU robberies

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WASHINGTON (7/8/09)--The run-of-the-mill robbery in financial institutions last year did not involve acts of violence, according to crime statistics released Monday by the Federal Bureau of Investigation (FBI). Acts of violence were committed in 293 reported incidents--roughly 4% of the 6,849 total robberies, burglaries and larcenies that credit unions and other financial institutions experienced last year. The violent acts included 78 instances involving the discharge of firearms, 171 instances with assaults, and 52 hostage situations. More than one act of violence occurred in some incidents, the FBI said. The violence resulted in 123 injuries in 99 incidents; 21 deaths in 20 incidents; and 105 persons taken hostage in 52 situations. Of those injured, employees took the brunt--60 employees of credit unions or banks were hurt during the year. That compares with injuries to 19 member/customers, 14 robbery perpetrators, and 13 guards. Seven law officers and two "other" individuals also were injured. Robbers overwhelmingly were the group most likely to die in a robbery, burglary or larceny situation. Last year, of the 21 deaths that occurred, 17 were the robbers, one was an employee, and three were "other" people. Of the 105 hostages taken during the year, 80 were credit union or bank employees and 13 were customers or members. Three guards and two "other" individuals also ended up in hostage situations. Hostage incidents were the only category that involved employees' family. Seven family members of financial institution employees were taken hostage during the year. What mode of operation did the suspects use during the incidents? Demand notes, oral demands, and threatening the use of a weapon were what most culprits chose. That was followed closely by the actual use of a weapon, be it a firearm, other weapon (including knives, cutting instruments, hypodermic needles and clubs) or explosive device. The actual breakdown for modus operandi used is:
* Demand note used, 3,833 robberies; * Firearm used, 1,734; * Handgun, 1,656; * Other firearm, 120; * Other weapon used, 100; * Weapon threatened, 2,839; * Explosive device used or threatened, 174; * Oral demand, 3,683; * Vault or safe theft, 47; * Depository trap device, 3; and * Till theft, 95.
The statistics are as of April 23. Not all financial institution crimes are reported to the FBI, so this is not a complete statistical compilation of all bank crimes in the U.S., the FBI said.

VolCorp launches educational campaign

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NASHVILLE, Tenn. (7/8/09)--Volunteer Corporate CU (VolCorp) recently launched an educational campaign, “Strength. Stability. Service. Today and Beyond,” to educate its member credit unions about how the corporate has stayed financially stable amidst a struggling economy. As a part of the campaign, VolCorp has posted two articles on its website, “VolCorp--Today and Beyond,” and “It’s a Balancing Act.” Both were written by VolCorp CEO Rick Veach. “It is critical each member realizes that VolCorp has the financial resources to withstand the current economic turmoil and continue indefinitely into the future,” Veach said. “We have suffered losses, as almost all financial institutions have, primarily through our capital accounts at U.S. Central. VolCorp, however, has adequate retained earnings to absorb these losses without affecting its members’ capital accounts.” In the articles, Veach emphasized VolCorp’s conservative investment philosophy. According to Veach, VolCorp:
* Only purchases paper with a minimum 90% owner occupancy rate; * Only purchases bonds with loans originated prior to the housing crisis, with an average FICO score of at least 720 and a loan-to-value less than 70%; * Has securities classified as available-for-sale (AFS), instead of held-to-maturity. AFS provides more transparency for members, VolCorp said; * Has a marketable securities portfolio of about $300 million, with $6 million of unrealized losses.
VolCorp also has upgraded its hardware and software applications to offer members more efficient and up-to-date services, Veach said. “We are now in the process of installing a new core data processing system and should be live on Jan. 4,” he added. “More important, we have accomplished all of this without increases in member fees or reducing rates paid to members.” VolCorp, Nashville, Tenn., has more than $1.3 billion in assets and serves 266 credit unions.

CU System briefs (07/07/2009)

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* HOLLYWOOD, Calif. (7/8/09)--First Entertainment CU's Hollywood headquarters was closed Tuesday morning to accommodate traffic from the memorial service for pop icon Michael Jackson, said the credit union's website. Police closed Forest Lawn Drive, which is near the cemetery where the service was held. Credit union staff with identification were allowed through the barricades, but members weren't. The credit union's website had warned earlier that traffic would be heavy and urged members to go to its other branches. However, Tuesday morning, police closed off Forest Lawn Drive, blocking access to the credit union … * LANSING, Mich. (7/8/09)--The Jackson, Mich., chapter of credit unions hosted 21 credit union people at a candidates forum and legislative breakfast June 29 at CP FCU, Jackson. The forum included one candidate for a vacant District 19 seat, Mike Nofs, and a staffer of another candidate, State Rep. Marty Griffin (D-Jackson), who discussed several issues. Also attending were U.S. Rep. Mark Schauer (D-Battle Creek), shown here addressing the chapter, and State Rep. Mike Simpson (D-Jackson) and staffers. (Photo provided by the Michigan Credit Union League) … * HIGHTSTOWN, N.J. (7/8/09)--Credit unions from the second
Click to view larger image Click for larger view
congressional district in New Jersey met recently with U.S. Rep. Frank LoBiondo to thank him for his past support and brief him on how credit unions could help with the nation's economic recovery if Congress repealed credit unions' member business lending cap. They also noted the need to maintain an independent, dedicated credit union regulator (The Weekly Exchange June 29). From left are: Virginia Williams, CEO of Jersey Shore FCU; John DiNofrio, board director, Jersey Shore FCU; Ginny Fifer, CEO of Atlantic City Electric FCU; LoBiondo; Paul Gentile, president/CEO of the New Jersey Credit Union League, and Bill Kennedy, chief financial officer of Jersey Shore FCU. (Photo provided by the New Jersey Credit Union League) … * LUTHERVILLE, Md. (7/8/09)--J. Wesley Bone, director for 40 years and former chairperson for 37 years of First Financial of Maryland FCU, retired in June. He has been named chairman emeritus of the credit union, said the Maryland and District of Columbia Credit Union Association (MDDCCUA) (Focus Newsletter July 6). During Bone's tenure, the credit union grew from $2 million in assets and 4,000 members to more than $700 million in assets and 55,000 members. Bone is former treasurer and board chairman of the National Association of Credit Union Chairpersons, and helped developed a local chapter of the association in Baltimore/Washington, D.C. In 2000, he was the first volunteer appointed to the MDDCCUA board, and was elected chairman from 2007 to June 2009. He was the 2008 MDDCCUA Hall of Fame Congressman Wright Patman Memorial Award recipient …

Crime stats ID types of security used

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WASHINGTON (7/8/09)--Most of the reported crimes--robberies, burglaries and larcenies--that occurred at U.S. financial institutions in 2008 were monitored by alarm systems and surveillance cameras, according to bank crime statistics released Monday by the Federal Bureau of Investigation (FBI). The teller counter was the “hot spot”--where most robberies occurred. In 2008, of the 6,849 reported violations, 6,488 occurred at the teller counter of the financial institution. Other building areas and the number of violations that occurred included:
* Vault/safe--371; * Office area--199; * Armored vehicle--72; * Drive-in/walk-up--65; * Other--54; * Safe deposit area--22; * Night depository--9; * ATM--5; and * Courier/messenger--1.
Of the security devices maintained by the victim institutions, some 6,743--98%--had surveillance cameras, and 6,626--96%--had alarm systems. Other security devices and the number of affected institutions that maintain them included:
* Bait money--4,483; * Tear gas/dye packs--1,738; * Bullet-resistant enclosures--763; * Electronic tracking--601; and * Guards--387.
Of the security devices used during the commission of the crimes, there were 6,581 surveillance cameras activated, and 6,176 alarm systems activated. Other security devices and the number used during crimes included:
* Bait money taken--2,121; * Tear gas/dye packs taken--730; * Guards on duty--341; and * Electronic tracking activated--298.
When the crimes were committed, surveillance cameras functioned 6,477 times--95%--and the alarm systems functioned 6,110 times--89%.

CUs continue strong presence in auto lending

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ONTARIO, Calif. (7/8/09)--Credit unions continue to maintain a strong presence in the auto lending market, according to a credit union auto lending analyst. “About one in five vehicles are financed by credit unions,” said Joe James, CUDL market research analyst, who recently presented a Credit Union Direct Lending (CUDL) webcast, “Auto Lending Trends and Credit Union Analysis.” Credit unions have maintained about 22.4% of the auto lending share as of April. Auto loans continue to make up about one-third of credit unions’ loan portfolios, and credit union auto loan penetration has remained at about 17%, James added. Both charge-offs and delinquencies at credit unions for auto loans have leveled off, and are “still low compared with credit unions’ competitors,” James said. White new auto sales have taken a major hit--as of May, new auto sales were at -34.1%--credit unions may be interested in knowing that there is an increased interest in used car sales. As of May, used auto sales were 1.5%, James said. The most popular vehicles financed by CUDL are purchased from General Motors, Chrysler, Ford, Toyota and Honda, he added. CUDL, based in Ontario, Calif., is the third largest lender in the auto market and has financed more than 270,000 auto loans on its platform year-to-date.

Nearly 500 CUs were robbed in 2008

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WASHINGTON (7/8/09)--Nearly 500 U.S. credit unions were robbed in 2008, according to bank crime statistics released Monday by the Federal Bureau of Investigation (FBI). During last year, 483 credit unions experienced robberies, 121 had burglaries and 28 were victims of larcenies. For all U.S. financial institutions, there were 6,849 reported violations in 2008: 6,700 robberies, 121 burglaries and 26 larcenies. The total represents a slight decrease from the 6,933 reported violations in 2007, said Kevin Perkins, assistant director, FBI's Criminal Investigative Division. Loot was taken in 6,225 (91%) of the 6,849 incidents with a total amount stolen of nearly $62 million. Of that amount, more than $8.9 million was recovered. Investigations into the robberies have identified 3,342 of the 8,393 persons involved. Of those identified, 3,230 were male and 206 were female. Friday was the most popular day for crimes (1,407) followed by Monday (1,280) and Wednesday (1,206). For the community type where the crimes were committed, most occurred in metropolitan areas (3,388), followed by suburban (1,136), small city/town (2,189) and rural (136).

Credit emergency room cures members woes

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TALLAHASSEE, Fla. (7/8/09)--An office full of people wearing hospital scrubs, white tennis shoes and comforting smiles is not the place one would think of to apply for a loan. Flowood, Miss.-based Statewide FCU, a member of the Credit Union 24 network, used a healthcare theme for a three-month promotion to improve members' financial health.
Click to view larger image "Loan doctors" in Flowood, Miss.-based Statewide FCU's "credit emergency room" greet members visiting the local branch to apply for financial assistance. The staff donned the scrubs as part of a three-month fiscal fitness promotion that increased the credit union's loan goal by 50%. (Photo provided by Statewide FCU and Credit Union 24)
Faster than one could say "Stat!" the credit union exceeded its goals. It loaned more than $7.5 million in those three months, a 50% increase over its original goal of $5 million. Everyone from President/CEO Paul Armstrong to tellers and loan officers dressed in scrubs and asked members if they were suffering from "CARpal tunnel" or if they were experiencing "shortness of paycheck." The promotion included reduced interest rates on auto loans, credit cards and loan consolidation, and "fiscal checkups" to ensure financial health. The $69 million asset credit union solved members' financial woes by providing cash needed in a challenging economic climate. "Everyone in the country is experiencing some sort of financial ailment," said Armstrong. "Our promotion illustrated how a financial institution can contribute to members' financial health by offering promotional rates on its loans, credit counseling, and debt consolidation. We just happened to wear scrubs while doing it, which was fun and completely unique, and well-received by our members." The three-month promotion tied in with Credit Union 24's marketing campaign that featured a nurse holding a money bag to represent a newborn child, symbolizing the network's dedication to helping credit unions better care for their members' money through Credit Union 24's financial products and services. Jim Park, president/CEO of Credit Union 24 was "thrilled that Statewide FCU brought this concept further to life right in the credit union's branch. Though we are not dealing with credit union members' health, the benefits they receive through our participants' services create long-lasting financial health and well-being, transcending into a better overall quality of life."

Polish and Slavic FCU grants 350000 in scholarships

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BROOKLYN, N.Y. (7/8/09)--The Polish & Slavic CU (PSFCU), Brooklyn, gave out $350,000 in scholarship grants this year to more than 315 students. The credit union announced Monday that its grant level surpassed last year’s record of college scholarships it gave to members (PR Newswire July 6). The scholarships were awarded during two separate ceremonies--one in late May for high school graduates, and one in June for college students. “We continue to buck the trend when it comes to investing in our neighborhoods and in our members' futures,” said Bogdan Chmielewski, CEO of PSFCU. “We increased the scholarship money by a hefty $50,000 while the number of students who benefited from this vital program rose by 25%. This is one of the most important projects we undertake annually. As PSFCU’s scholarship program has grown, it has expanded its geographic reach beyond New York. The program awarded grants to students in Chicago and a dozen other cities outside PSFCU’s home region. “We’re extremely excited to be able to broaden our reach to so many cities beyond the metropolitan New York area,” said Bozena Kajewska-Pielarz, a PSFCU board member who led the credit union’s scholarship committee this year. “Thanks to our online branch, which enables us to offer membership to residents of other states, and our imminent Chicago expansion, young members from areas other than our traditional New York and New Jersey footprint will be able to benefit from the program.”

CU System briefs (07/06/2009)

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* HARRISBURG, Pa. (7/7/09)--The board of the Pennsylvania Credit Union Association (PCUA) Wednesday approved PCUA's partnering with Credit Union Student Choice to offer credit unions a private student loan plan for their members that complements existing federal student loan programs (Life is a Highway July 6). Credit Union Student Choice is a two-year-old credit union service organization offered by more than 50 credit unions nationwide and owned by nine credit unions, PSCU Financial Services, and Callahan and Associates, PCUA said … * HARRISBURG, Pa. (7/7/09)--The Pennsylvania Credit Union Foundation has two new board members--Barbara Bowker, vice president of marketing at Pennsylvania State Employees CU (PSECU), and Chris Woods, CEO of Keystone FCU. They were approved Wednesday by the Pennsylvania Credit Union Association board (Life is a Highway July 6) … * ATLANTA (7/7/09)--A man nicknamed the “Dracula Bandit” was sentenced Saturday for robbing CDC FCU, Atlanta, in 2006. Nathaniel Little Jr., 43, was sentenced to 20 years in prison, followed by five years of supervised release. He also was ordered to pay restitution of $14,669. On Aug. 23, 2006, Little entered CDC FCU wearing a Dracula mask and carrying a semi-automatic gun. He placed a bag on the credit union’s counter, pointed his gun at the tellers, and ordered them to fill the bag with money. Little also told one teller, “Don’t make me have to shoot you.” After taking the money, he fled the credit union. After a long investigation, key witnesses helped the Federal Bureau of Investigation identify Little--who had been arrested on unrelated state charges after robbing the credit union. CDC FCU has $185 million in assets (US Fed News July 4) ... * LA CROSSE, Wis. (7/7/09)--A man was ticketed $96 after he wore a hooded, masked skeleton sweatshirt into the Government Employee's CU Wednesday. Eric Harding, 33, wore the sweatshirt with the face zipped up when he rode up on his bike, but he unzipped the mask as he entered the credit union's lobby. A member at a drive through saw the masked man and called 911 (WEAU.com and Winona Daily News July 2). Harding withdrew funds for his rent from his account and left on his bike. But police intercepted him and held him as a possible robbery suspect, putting him in handcuffs. Police reports said he was uncooperative and belligerent. When police realized there was no robbery, they ticketed Harding $96 for disorderly conduct and causing a public disturbance by rushing into the building while masked. Check the link for a photo of the sweatshirt … * COLUMBIA, S.C. (7/7/09)--Eric Robinson, 19, and Joshua Stokes, 23, both of North Charleston, N.C., were sentenced Monday in federal court for armed bank robbery and firearms charges stemming from a 2008 credit union robbery, said U.S. Attorney W. Walter Wilkins. Chief U.S. District Judge David C. Norton of Charleston, sentenced Stokes to 97 months in federal prison, and Robinson to a term of 106 months. On Sept. 16, 2008, Robinson and Stokes entered South Carolina FCU, Charleston, S.C, wearing black ski masks and white gloves. Stokes brandished a silver revolver, while Robinson used what appeared to be a 9mm semi-automatic pistol. Stokes ordered everyone to get on the ground, while Robinson jumped over the teller counter. Robinson then put the barrel of his pistol to the back of the head of a teller and ordered employees to open their cash drawers. He stuffed $3,693 into a pink pillowcase. Police officers arrived at the scene almost immediately, arresting Stokes. Robinson was nabbed a short time later. Officers recovered most of the stolen money when the men dropped the pillowcase while running from the credit union (Media Newswires.com July 6) ... * DES MOINES, Iowa (7/7/09)--Reckless driving charges are being filed against a man whose pickup truck struck at car, then traveled at a high rate of speed in reverse up a street before slamming into several unoccupied vehicles in a credit union's parking lot. The incident occurred Monday at 10 a.m. when a pickup truck driven by Kirk Moon, 20, hit a car with a woman in it. When he kicked into reverse, he hit one vehicle, and pushed it into several others and downed a light pole. A passenger in the pickup was taken to a medical center with undisclosed injuries. The events ended with Moon leaving his truck and confronting a television crew trying to cover the multi-vehicle accident (Des Moines Register July 6) …

Banks CUs honor Calif. IOUs but banks add a deadline

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LOS ANGELES (7/7/09)--California banks and credit unions say they will honor state-issued "registered warrants" or IOUs --a promise to pay once the state's budget is passed. However, banks are putting deadlines on how long they'll accept the IOUs, while credit unions generally aren't setting a time limit. Bank of America (BofA), which announced it would accept the IOUs last week set a cutoff date of July 10--Friday. Other banks are following suit, with Chase, Wells Fargo & Co., and Union Bank saying they'll cash the IOUs from their customers only through Friday. Some banks, including City National, haven't set a deadline yet but didn't say they wouldn't. Credit unions, on the other hand, have agreed to accept the IOUs from members without setting a deadline, the California Credit Union League told the Los Angeles Times (July 3). News reports and bloggers' comments indicate that the banks' decision is generating some negative press. "The banks' hardball strategy will create hardships for their customers if no budget deal is struck soon and the state continues to issue IOUs instead of checks," said the Times. BofA cited two reasons for its decision, which it says is firm: the operational and financial challenge of accepting the IOUs, and its experience from the last time the state issued registered warrants in 1992. Then, the longer the warrants were accepted, the longer it took the legislature to resolve the matter, BofA said.

Members 1st FCU sues bank over trademarked M

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HARRISBURG, Pa. (7/7/09)--A Pennsylvania-based credit union has filed suit against a local bank alleging that the bank's symbol, a big red "M," infringes on the credit union's trademark. Members lst FCU, a $1.545 billion asset credit union in Mechanicsburg, filed the suit June 19 in U.S. District Court in Harrisburg, alleging that Metro Bank, which is based in Harrisburg, is using a big red M as its symbol. The complaint said that on or about March 1, 2003, the credit union began using its current red M logo. Since then, it has spent millions of dollars in advertising and marketing to promote its M logo (Pennlive.com July 6). The bank unveiled its logo in June as part of a conversion of Commerce Bank/Harrisburg to Metro Bank, said the article. Metro's M has a break in the left side of the M, while Members 1st M has a break on the right side to form part of the letter M as "1st." The two logos are so similar that both bank customers and credit union members have walked into the other institution's branches, thinking they were their own institutions, the credit union told the publication. The complaint alleges that the bank adopted the logo "in an effort to capitalize on Members lst's goodwill and thereby obtain a competitive advantage" in the midstate market. The bank said it would not comment about ongoing litigation.

Class action suit filed against CU over investments

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MIAMI (7/7/09)--Attorneys for a Florida woman have filed a class action lawsuit against a Boca Raton-based credit union and four individuals that alleges they lost millions of dollars by investing in a now-defunct company that the suit terms was "a bucket shop rife with fraud." The case--filed on behalf of Boca Raton resident and former IBM employee Claudia Schorrig against IBM Southeast Employees' FCU--"highlights the problem with respected financial institutions referring their clients to other firms without doing the necessary due diligence or closing their eyes to obvious red flags," according to the plaintiff's counsel. The complaint expressly states that it is not accusing the credit union of fraud or of knowing about the alleged fraud. The complaint was filed June 30 in the U.S. District Court for the Southern District of Florida, West Palm Beach division by three Florida law firms--Dimond Kaplan & Rothstein of Coconut Grove; Blum & Silver of Coral Springs; and Sallah & Cox LLC of Boca Raton. In addition to the credit union, defendants include Lary B. McCants, president/CEO of the credit union; and three financial services representatives of Wellstone--Christi Seay, Jay Jones and Barbara Leschander. The complaint alleges that the credit union "negligently solicited and referred" its members to Wellstone Securities LLP, a now-defunct broker-dealer. Wellstone Securities recommended and sold bonds issued by Cornerstone Ministries Investments Inc. to credit union members. Cornerstone is now in bankruptcy, having collapsed under a fraud scheme. Members who purchased the securities lost millions of dollars, said the complaint. The suit alleges that upon the credit union's recommendation, Schorrig paid $60,000 for two bonds issued by Cornerstone through Wellstone and "with the active solicitation of the credit union and at least one of the individual defendants." Schorrig lost that money when the company folded. According to the court records, the complaint maintains that had the credit union performed due diligence it would have found that Cornerstone lied in an SEC registration statement that it was approved for listing on the Chicago Stock Exchange and that several state regulators had brought action against Cornerstone for misrepresenting its stock. The credit union's law firm maintains that the complaint is misdirected and full of inaccuracies, such as the representation of the Wellstone employees as credit union employees. The credit union and its CEO is denying the allegations and intend to vigorously defend themselves in court. The lawsuit, it said, stems from a growing tide of legal actions by victims of fraud, bad judgment, or the economy who look for the nearest deep pockets to blame.

Federations 2009 CU Institute accepting applications

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MADISON, Wis. (7/7/09)--The National Federation of Community Development Credit Unions is celebrating the 10th anniversary of its CDCU Institute and accepting applications for the 2009 institute. This year it runs from Aug. 9 to 15 in Madison, Wis. Launched in 1999, the CDCU Institute has trained more than 200 credit union staff and board members. The three-year training program is designed for credit unions serving low- and moderate-income communities. With support from partner organizations, the institute focuses on credit union management and community economic development. The CDCU Institute is for credit union managers, staff, board officials and volunteers new to the community development field or who represent:
* Community development credit unions of any size seeking to improve or expand their services; * Large credit unions eager to expand their services for low- and moderate-income members; * Small credit unions with plans for significant growth; * Credit unions in operation for five years or less; * Groups completing the chartering process; and * Anyone looking to learn more about providing affordable financial services to low-income communities.
To learn more about the CDCU Institute, use the links.

Sanders announces 130000 grant for AVCU fin ed effort

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SOUTH BURLINGTON, Vt. (7/7/09)--U.S. Sen. Bernie Sanders (I-Vt.) announced last week that the Association of Vermont Credit Unions (AVCU) would receive a $130,000 federal grant to improve the financial literacy of Vermont's middle school and high school students. Sanders invited AVCU President Joe Bergeron and Vice President Bryan Kent to join him in making the announcement at a press conference in Sander’s office Wednesday. “We have a responsibility to provide young Vermonters with the tools and the education they need to make sound financial decisions later in life,” said Sanders, who has been a champion of credit unions throughout his political career. He said he hopes the program will make students aware of the realities they face when making decisions about financial institutions. “If it sounds too good to be true, the likelihood is that it is too good to be true,” he added. The association is completing grant-required documentation and determining how to maximize the opportunity that Sanders’ work has made possible, the association said. “We anticipate that this two-year grant will be used, at least in part, to contract with a statewide credit union youth financial literacy coordinator,” Bergeron said. The coordinator’s responsibilities would include the advancement of financial literacy for Vermont’s youth by using the knowledge and experiences of credit unions statewide.

CU capital and savings grow

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MADISON, Wis. (7/7/09)--Credit unions’ capital formation and savings balances are both on the rise, according to a Credit Union National Association (CUNA) economist’s evaluation of CUNA’s May monthly sample of credit unions. “Credit unions resumed capital formation in May after five consecutive months of decline,” Steve Rick, CUNA senior economist, told News Now. “The credit union movement’s capital level grew 0.5% in May, reaching $83.6 billion. This is 7.1% lower than a year earlier and $7.28 billion below the high-water mark set in November 2008.”
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Credit union savings balances increased 0.8% in May, but grew 7.3% during the first five months of 2009. Share drafts grew the fastest with a 2.5% increase, followed by money market accounts (2.4%), regular shares (1.0%), and individual retirement accounts (0.8%). One-year certificates declined 0.6% during May. “Credit union savings balances rose 7.3% in the first five months of this year, up from 6.8% for the similar period last year, and above the recent 16-year average of 4.8%,” Rick said. “Members’ concerns over job security have reduced their proclivity to spend and increased their desire to save current income. Precautionary savings balances are on the rise as witnessed by the 7.5% increase in regular shares over the last five months. “With interest rates bottoming out, the speculative demand for money is also on the rise, as witnessed by the 12% jump in money market accounts so far this year,” he added. “When market interest rates turn the corner and begin to rise over the next year, funds from both of these products will flow back into share certificates.”
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Credit union loans outstanding increased 0.2% in May and 0.5% during the first five months of 2009, down from a 2% increase during the same period of 2008. Credit card loans led growth, rising 1.2%, followed by fixed-rate mortgages (0.7%), other loans (0.6%), and used-auto loans (0.5%). “Credit union loan balance growth was very weak in the first five months of 2009; in fact it was the slowest pace since the 1992 recession,” Rick said. “During the first five months of 2009, loan balances increased only 0.51%, down from 2% for the similar period last year and lower than the past 16-year average of 2.7%. “Credit union members are deleveraging their balance sheets by paying down their consumer loans,” he added. “So far this year, credit card, unsecured and new-auto loan balances fell 2.1%, 3.8% and 2.2%, respectively. The fastest growing loan category was used-auto lending at 2.8%, followed by adjustable-rate mortgages at 2.4%.” Declining during May were unsecured personal loans (-0.1%), new-auto loans (-0.3%), and adjustable-rate mortgages (-0.4%). Other mortgages and home equity loans led the decline in May (-0.4% and -1%, respectively). Credit union 60-plus-day delinquencies grew to 1.7% in May from 1.6% in April. “Rising unemployment rates and falling home prices are the major contributing factors to the recent rise in credit union loan delinquency rates,” Rick said. “In May, 1.7% of all credit union loans were delinquent, up from 1% a year earlier. With both economic indicators expected to deteriorate for another year, credit unions should plan for further weakening in their credit quality.” The loan-to-savings ratio decreased slightly to 78% in May 2009. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities-- increased slightly to 20% from 19% in April. The movement’s overall capital-to-asset ratio remains at 9.5%. The total amount of capital is $84 billion.

Recovery will be slow Hampel tells IPoliticoI

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WASHINGTON (7/7/09)--The nation’s economic recovery is going to take some time, according to Bill Hampel, Credit Union National Association (CUNA) chief economist. Hampel was prominently quoted in a Thursday Politico article, “Where are the jobs?” about the nation’s economic outlook. He told the Washington, D.C.-based newspaper that when the economic recovery takes place, it’s “not going to be much to write home about. It’s going to be a long, slow recovery, and the economy is going to be pretty fragile,” he said. The nation’s unemployment rate has reached 9.5% and 467,000 jobs in June have been lost, Politico reported. To read the full article, use the link.

MnCUN CUs must overcome modesty spread word

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MINNEAPOLIS (7/7/09)--Credit unions can’t allow themselves to be a secret that’s passed from generation to generation, according to Mark Cummins, CEO of the Minnesota Credit Union Network. Rather, they need to spread the word. “We want [credit union membership] to be an option for anybody who lives in Minnesota,” he told Finance and Commerce (July 3), a Minneapolis-based business publication. Cummins emphasized credit unions’ strengths while explaining their challenges in the struggling economy. Credit unions with a lot of real estate loans are seeing declining values and job losses--but their underwriting is more conservative, so their losses aren’t as great as other lenders, he said. “We weren’t into exotic [mortgages] because we have other deals with our members--car loans, second mortgages--so it’s in our best interest to make sure the first mortgage fits well,” he added. Credit unions in low-income areas are taking major hits as their members lose jobs, but most credit unions will survive the losses because their capital levels are strong. Minnesota’s capital average for credit unions was 10.5% at the end of 2008, above the 7% threshold set by regulators, Cummins told the newspaper. Real estate lending is strong, although credit unions’ bread-and-butter auto loans are stagnant. “It’s a matter of consumer confidence; if you don’t feel confident that you’ll have your job, you aren’t going to trade for a new car,” Cummins said. Despite stagnant auto lending and members’ job losses, deposits are growing. “People see us as a safe haven,” he added.

Pa. CUs loan balances savings growth up

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HARRISBURG, Pa. (7/7/09)--Pennsylvania credit unions reported strong deposit growth for the first quarter of 2009, according to the Pennsylvania Credit Union Association (PCUA). Money market shares grew 8.8%. Regular share account balances grew 7.8%. Compared with national statistics, Pennsylvania credit unions are ahead in overall savings (Life is a Highway July 6). Loan balances at credit unions increased 1.2%. First mortgage loans increased 4.4%, compared with 1.4% nationally. New auto loans grew 1% and used auto loans increased 2.4% in Pennsylvania, PCUA said. PCUA also advised credit unions to plan for rising delinquency rates in 2010. The figures were taken from the Pennsylvania Profile First Quarter 2009 report.

Dupaco offers interest-free loans to small biz

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DUBUQUE, Iowa (7/7/09)--Dupaco Community CU is helping Dubuque, Iowa, area businesses having difficulty meeting expenses in the economy. It's offering interest-free, short-term loans through the U.S. Small Business Administration's (SBA) America's Recovery Capital Loan (ARC) Program. The program can provide up to $35,000 in short-term relief for viable small businesses facing immediate financial hardship to help ride out the uncertain economic times and return to profitability, according to Steve Baumhover, the credit union's vice president of business lending and development. The program, launched in mid-June, has these features:
* Available for existing businesses only; * 0% interest rate on the loan; * No guaranty fee; * Up to six months to draw funds; * No payments for the first 12 to 18 months; * Payments of principal only scheduled over the next 60 months; and * Loan proceeds used only for payment of loan payments no more than 60 days old.
Baumhover says ARC loans provide an immediate infusion of capital to small businesses to assist with making payments of principal and interest on existing debt. "These loans allow borrowers to redirect cash flow from making loan payments to investing in their businesses, to help sustain the business and retain jobs," said Baumhover. "For example, making loan payments on existing loans with proceeds from an ARC loan can allow the business to focus more funds on core operations, such as buying inventory or making payroll. He noted that the best candidates for ARC loans are small businesses that in the past were profitable but are currently struggling, yet have been making loan payments or are just beginning to miss loan payments due to financial hardship. The program lasts as long as SBA has funding available or until Sept. 30, 2010, whichever comes first, says SBA. To get the loan, small businesses must be an established business, have financial statements stating it was profitable in one of the past two years, and be able to project sufficient cash flow to meet current and future loan payments over a two-year period from loan approval. Dupaco Community CU is a $660 million asset credit union based in Dubuque.

New Jersey league CEO explains CU difference on TV

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HIGHTSTOWN, N. J. (7/7/09)--Paul Gentile, president/CEO of the New Jersey Credit Union League, was interviewed for “It’s Your Money,” a personal finance show that airs on a statewide New Jersey news channel. Gentile discussed the benefits of credit unions, how it’s never been easier to join a credit union, and the importance of the league’s statewide advertising initiative--“New Jersey’s Credit Unions, Banking You Can Trust.” He also talked about a bill the league has been advocating in Trenton that would add credit unions to institutions eligible for public deposits. Credit unions are not global and national financial firms--rather, they are local institutions, Gentile said. He also noted the nonprofit status of credit unions, their volunteer boards of directors, and the fact that they do not have shareholders to please. Focusing on credit unions’ cooperative nature, Gentile also spoke about the benefits of shared branching networks, and illustrated the conveniences of belonging to a credit union. “Being interviewed for ‘It’s Your Money’ is just one way we are pushing the credit union message into the state,” Gentile said. “With our potential membership at more than nine million people here in New Jersey, the more we can do to educate the population, the greater the increase in credit union membership will be. To be on a statewide news show and advocating credit unions is just one more way we’re getting the word out.” The league’s multimedia advertising “Banking You Can Trust” campaign uses print, radio and television outlets to explain what credit unions are and how they can help consumers. “We play off of the word ‘trust’ because trust is so important today, given the events in the financial services industry,” Gentile said. “We also use ‘banking’ to instantly explain what we do. Credit unions offer low-cost, high-quality banking services. We have to convey those basics to consumers.”

New board members elected at Mid-America CUA

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BISMARCK, N.D. (7/6/09)--The Mid-America Credit Union Association elected one new board member and re-elected two board members during its Annual Summit in Grand Forks, N.D., June 11-13. Newly elected was Darrell Olson, CEO of Town & Country CU, Minot, N.D. Re-elected to the board were Darla Schafer, manager of Flasher (N.D.) Community CU, and Marietta Wahl, manager of Northland Educators FCU, Fargo, N.D. The association serves 87 credit unions in North and South Dakota. They serve more than 412,000 members with assets in excess of $3 billion.

CU System briefs (07/05/2009)

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* KENNEWICK, Wash. (7/6/09)--Mortgage lending by Washington State credit unions increased by 313% over the last decade, with those credit unions providing a total of $10.5 billion in mortgage loans to their members during that time span. Washington State credit unions lent $3.3 billion in mortgage loans during the previous decade. Auto loans and savings deposits also increased over the last ten years. (The Tri-City Herald July 1) … * MIAMI, Fla. (7/6/09)--A class action suit has been filed by IBM employees in the U.S. District Court in Miami, alleging that their credit union lost their money by investing with Wellstone Securities, a now-defunct company that underwrote bonds from Cornerstone Ministry Investments. Cornerstone is a religious affiliated group that specialized in real estate investments. It filed for Chapter 11 bankruptcy protection earlier this year. The lawsuit was filed against Boca Raton-based IBM Southeast Employees FCU and four of its employees. The complaint says the members relied on the advice of credit union employees who had a business relationship with Wellstone that prevented impartial investment advice (Palm Beach Daily Business Review July 2) … * WICHITA, Kan. (7/6/09)--Mid American CU, a $141.5 million asset credit union based in Wichita, Kan., is in merger talks with the $3.3 million asset, Arkansas City-based Sunflower CU, according to Mid American President/CEO Jim Holt (The Wichita Eagle July 2). Both credit unions' boards have approved the proposed merger plan. Mid American will conduct a special member meeting July 27 to discuss the plan, which would make Mid American the surviving institution. A merger would give it its first physical presence in Arkansas City and Cowley County. The credit union has some members in that area already. Sunflower members would gain access to more services if a merger is approved by the Kansas Department of Credit Unions. Pending approval, the merger could be completed as early as the end of the third quarter (The Wichita Eagle July 2) … * TAMPA, Fla. (7/6/09)--Florida Central CU in Tampa has selected Laida E. Garcia as its new president/CEO. Garcia has been executive vice president of the $250 million asset credit union for eight years. She succeeds Ed Gallagly, who died in March. Garcia is also a board member of the Credit Union National Foundation board and serves as treasurer of the board of the National Credit Union Foundation. The credit union serves about 36,000 members and more than 1,000 select employee groups (MoneyCentral.MSN July 1) … * DEL MAR, Calif. (7/6/09)-- Michael Buecher, board member and Supervisory Committee chairman at San Antonio, Texas-based Air Force FCU, has been appointed to the board of directors of the National Association of Credit Union Supervisory and Auditing Committees (NACUSAC). Buecher was appointed during NACUSAC's 2009 Annual Business Meeting on June 19. Buecher is a former Region IV board member for the organization, which serves credit union supervisory and auditing committees exclusively. He will fill a one-year unexpired term …

Texas CUs offer payday loan alternatives

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DALLAS (7/6/09)--Credit unions in north Texas are working together to develop a payday loan alternative that will cap the interest rate paid by borrowers at 18% (Fort Worth Start-Telegram and Lone Star Leaguer July 2). Credit unions in the Texas Credit Union League (TCUL) are developing the payday loan program as part of the league’s participation in the National Credit Union Foundation’s REAL Solutions program. Representatives of the participating Texas credit unions are currently examining credit union payday loan alternatives developed in Iowa, New Mexico and Pennsylvania. For example, $44.9 million-asset Hershey FCU in Hummelstown, Pa., offers loans of up to $500, which must be repaid in 90 days at 18% interest plus a $25 fee. Ten percent of the loan amount is deposited in a savings account. Loan applicants must be credit union members for 90 days, provide proof of income and be employed for six months. The Texas group hopes to launch its own payday alternative by year-end. Credit unions planning to participate include $5.7 billion-asset Guardian First FCU, Fort Worth; $49 million Security One FCU, Arlington; $36.5 million First Class American CU, Fort Worth; and $5.322 billion American Airlines FCU, Dallas. Payday lenders typically charge interest rates of 300% to 400%. Fifteen states have capped the interest rate at 36%, but a 2008 attempt to limit payday loan interest rates in the Texas legislature failed.

Mid-America CU Association announces awards

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BISMARCK, N.D. (7/6/09)--The Mid-America Credit Union Association recognized the work done by exemplary credit unions as well as by outstanding credit union professionals and volunteers at its annual summit in June. Three credit unions were recognized by the association, which serves credit unions in the Dakotas:
* Capital CU, Bismarck, received the Champion Award for its commitment to the political well-being of the credit union movement, based on the percentage by which it surpassed annual fundraising goals. * Town and Country CU, Minot, N.D., received the Five Star Award for its work in education, legislative activities, public relations/marketing, member contact and community service. * Healthcare Plus FCU, Aberdeen, S.D., received the Growth and Progress Award for exceeding the state growth percentage in assets, members, loans and savings.
Professionals and volunteers were also honored for their work. They included:
* Melva Oak, who was inducted into the Mid-America Credit Union Hall of Fame. She was a key contributor to the success of First Community CU, Jamestown, N.D. * Truman Henry, a volunteer at Healthcare Plus FCU, was named South Dakota Volunteer of the Year. * Mary E. Nelson, a volunteer at First Community CU, was honored as the North Dakota Volunteer of the Year. * Tim Brown, CEO of Dakota Plains CU, Edgeley/Ellendale/Enderlin, N.D., was named North Dakota Professional of the Year. * Dave Gleason, manager of Coteau Valley FCU, Sisseton, S.D., was recognized as South Dakota Professional of the Year. * Roxanne Mullenberg, member service representative at Postal Family FCU, Fargo, N.D., was selected as the Young Credit Union Professional Network’s Cutting Edge Professional of the Year.

Cherry Blossom Race honors Capitol Hill competition winners

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WASHINGTON (7/6/09)--Markey’s Glacial Pacers from the office of U.S. Rep. Ed Markey (D-Mass.) posted the best team time among the 29 teams competing in the Capitol Hill Competition of the Credit Union Cherry Blossom Ten-Mile Race.
Click to view larger image Members of the Markey’s Glacial Pacers team received the 2009 Capitol Hill Competition Cup from the Credit Union Cherry Blossom Ten-Mile Run's credit union sponsors. The group included, from left, Jennifer Wahlen, National Association of Federal Credit Unions; Charlie Mallon, Wright Patman Congressional FCU; team members Morgan Gray, Danielle Baussan, Ellen Connell, Mitch Robinson and Eben Burnham Snyder; Susan Enis of United States Senate FCU; and Pat Keefe of the Credit Union National Association. (Photo provided by CUNA)
House teams placing in the event included Arcuri’s Utica Club from the office of Rep. Michael Arcuri (D-N.Y.) and Fab Five from the office of the House Veterans Affairs Committee. Senate teams placing in the event were Run Io-way with Me from the office of the Senate Agriculture Committee, FRENZI from the office of Sen. Michael Enzi (R-Wyo.) and Sax In The City from the office of Sen. Saxby Chambliss (R-Ga.). Capitol Hill Competition sponsors are the Credit Union National Association (CUNA), the National Association of Federal Credit Unions (NAFCU), and the two credit unions serving Capitol Hill: Wright Patman Congressional FCU and United States Senate FCU. The competition represents a “race within a race” for teams drawn from congressional offices. Overall, the Credit Union Cherry Blossom Ten-Mile Run draws about 500 congressional staff and members of Congress. Credit Union Miracle Day Inc. sponsors the run, which raised $1 million for the Children’s Miracle Network in 2009.

League poll Texas voters rank CUs high

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FARMERS BRANCH, Texas (7/6/09)--Credit unions ranked high according to results of a Texas Credit Union League (TCUL) telephone poll of Texas voters on their perceptions of the state’s top issues, elected leadership, the Texas economy, the economic crisis and other financial issues. “Texas voters are more optimistic than the rest of the country about our state’s economy and surviving their national current financial crisis,” said Buddy Gill, TCUL chief advocacy officer. “We’re delighted, but not surprised, to continue to see credit unions consistently rank as the most popular of any financial services institutions today. “Credit unions weren’t part of the problems that caused the national financial crisis, but we can be part of the solution to get our country back on its feet,” he added (The Advocate June 30). Findings of the poll indicated:
* Credit unions are not viewed as part of the country’s economic problems. * The popularity of credit unions remains high. The image of credit unions has remained virtually unchanged at 75% favorable and 8% unfavorable--statistically the same as the 2004 finding of 77% favorable and 9% unfavorable. What is noteworthy, said TCUL, is that credit unions are popular far beyond their own membership levels, nearly half (45%) of all Texas voters are members of Texas credit unions--up slightly from 42% in 2004. * Voters favored eliminating the 12.25%-of-assets cap on member business loans that Congress placed on credit unions 11 years ago. Voters see small-business loans as a workable way to help get credit into entrepreneurs’ hands while other financial institutions cut back on lending during the recession, TCUL said.
The poll of 800 registered Texas voters was conducted April 23, 25 and 26 by a bipartisan political polling team of Public Opinion Strategies, a Republican company based in Virginia, and Hamilton Campaigns, a Democratic firm based in Florida.

CUs for Kids had huge impact report says

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SALT LAKE CITY (7/6/09)--Credit Unions for Kids has issued an impact report showing credit unions’ contributions over the years to Children’s Miracle Network hospitals. Credit Unions for Kids ranks third behind Wal-Mart and Costco for corporate giving at Children’s Miracle Network. The credit unions raised a record $9.3 million in 2008--a 17% increase over 2007, according to Joe Dearborn, Children’s Miracle Network senior director. More than 170 Children’s Miracle Network hospitals benefit from Credit Unions for Kids’ contributions, which have increased annually. In 1996, the organization raised $1.5 million. This amount was more than tripled in 2000 with donations of $4.9 million. In 2005, Credit Unions for Kids raised $6.3 million, bringing the total amount of money raised from 1996 to 2008 to about $73 million. The report also noted individual highlights from 2008:
* With support from Children’s Miracle Network and Credit Unions for Kids, Gillette Children’s Specialty Healthcare opened an Advanced Imaging Center in June 2008 that is designed for children with disabilities. The center offers MRI, CT, fluoroscopy and ultrasound exams. Gillette performed more than 4,500 exams in the summer of 2008. * IDADIV CU, Nampa, Idaho, raised $8,291 at a charity golf tournament for St. Luke’s Children’s Hospital in Boise. CO-OP Financial Services’ Miracle Match Program raised the total to $16,583. * Mid-Atlantic Corporate FCU, Middletown, Pa., raised more than $10,000 for Children’s Miracle Network through the corporate’s members. * Pennsylvania State Employees CU, Harrisburg, Pa., raised more than $12,000 through a baseball fundraiser. * Credit Unions for Kids supported the Carolyn and Scott Rainbow House at Children’s Hospital and Medical Center in Omaha, Neb. The home offers guest rooms for patient families of the children’s hospital. * CO-OP Financial Services raised $1.5 million through its Miracle Match program, launched in 2008. * Georgia Credit Unions and Affiliates raised more than $31,000 through cookbook sales--which was matched by $10,000 from CO-OP Financial Services. * The Arizona Credit Union League helped put CO-OP’s Miracle Match program $33,000 over its $500,000 goal.
Texas ranked No. 1 of the top 10 states for fundraising with a 2008 total of $1.01 million. Portland, Ore., ranked as No. 1 in the top 10 markets with a contribution totaling $702,025. Credit Unions for Kids also was featured in media campaigns in 38 markets and submarkets, with a campaign value of nearly $3.3 million. Children’s Miracle Network helps 17 million patients per year. The distribution of funds includes:
* 39% to immediate medical needs; * 30% to charitable care; * 15% to research; * 11% to equipment; and * 5% to preventative education.

NCUF funds resources to keep homeowners independent

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WASHINGTON (7/6/09)–America’s credit unions, through an Innovation Grant from the National Credit Union Foundation (NCUF), are offering a DVD and website with resources for struggling homeowners to avoid foreclosure and remain independent. The “Right at Home” video and accompanying website feature information about:
* Budgeting for any situation; * Finding the right mortgage, and; * Rebuilding credit after foreclosure.
Testimonials from three homeowners who avoided foreclosure are profiled in the video. “The success stories from real homeowners are truly inspiring,” said NCUF Deputy Director Steve Bosack. “The DVD presents living proof that with the right information, struggling homeowners can save their homes. And the website provides resources that could help millions more consumers regain control of their financial future.” The website includes a downloadable workbook with problem-solving guides for problems homeowners face: income losses, increased mortgage payments, and other financial challenges. Detailed money management information and links connect homeowners with programs that offer free advice and mortgage relief, including the U.S. Department of Housing and Urban Development (HUD). Budget tools, including budget forms, are also available for download. The website and video were produced by CU Village, a web design and multimedia subsidiary of the Michigan Credit Union League. The video can also be viewed through the website chapter by chapter. Credit unions, members and consumers can purchase the DVD for a nominal fee. There are no other products for sale on the site--only tools to help families stay in their homes. NCUF Innovation Grants are funded by the Community Investment Fund (CIF), an award-winning system of investments that help credit unions earn dividends while donating to charities.

Googolplexs new youth editorial board at work

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MADISON (7/6/09)--New members of the Googolplex youth editorial board delivered their first evaluations of the latest stories and games to appear in the Credit Union National Association’s (CUNA) online periodical for credit union members under 18. Next year, the board--whose members range in age from 9 to 16--will critique content about money and consumer issues. Each board member also will write a Googolplex article, to ensure that the Web magazine remains relevant and interesting to subscribing credit unions’ young members. “Our editorial board members keep us on track with their feedback,” said Managing Editor Rena Crispin. “When they don’t like something, they’re blunt about it, which makes their praise all the more satisfying. They take their responsibility to represent our readers’ interests very seriously, and help keep Googolplex informative, interesting and fun for credit union members throughout the K-12 grades.” Youth board members have diverse backgrounds and are scattered nationwide. Staff of CUNA’s Center for Personal Finance selected members for their ability to provide frank and detailed criticism of what appears on Googolplex’s three age levels. CUNA also considered communication skills and writing ability.
Representative members from the three levels of the 2009-10 Googolplex editorial board:
* 5-Spot: Mary, 9, is an elementary school student who is a member of CEFCU, Peoria, Ill. She enjoys baking and recently started her own business, “Mary’s Sweet Treats.” She wants to become a teacher. “I want to help others to learn new things,” she said. * AJ’s: Tommy, 13, is a member of the NRL FCU, Oxon Hill, Md. He has a strong desire to learn more about “being smart with money.” Tommy plays on his middle school's football and basketball teams, and announces sports games for his school via the Internet. * C-Note: Alexandra, 14, is a high-school student and member of Suncoast Schools FCU, Tampa, Fla. She excels at the arts and was nominated for Young Artist of the Year through a local organization. She also is active with her local church--teaching an art class that she started and helping with “Southwest Florida Outreach,” a group that provides food, clothing and financial assistance for the homeless.
Googolplex includes three customizable websites that feature interactive games, videos and stories dealing with money matters and life issues, including the benefits of credit union membership. They are available with a single annual subscription.

WesCorp announces staff layoffs

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SAN DIMAS, Calif. (7/6/09)--Western Corporate FCU (WesCorp) President/CEO Philip Perkins detailed Wednesday the final action of several cost-saving initiatives--including roughly 90 layoffs--that aim to roll back expenses to 2003 levels. The initiatives include belt-tightening measures resulting from reviews of the processes supporting WesCorp’s product lines, including appropriate staffing levels and employee benefits. The goal, said Perkins, is to ensure WesCorp’s ability to continue to efficiently provide service to its 1,000-plus member credit unions. The decisions announced Wednesday will impact about 30 employees at WesCorp’s headquarters in San Dimas, Calif. Staff reductions will also affect another 60-plus people at branch locations. About one-third of the layoffs are effective immediately. The remainder will take effect over the next 12 months, as four branch locations devoted to check settlement are phased out at the time their leases expire, and operational processes are migrated away. WesCorp’s staff will drop by roughly 22% from beginning-of-year levels to when all of the planned branch location closings are completed by the middle of 2010. “We, like our members, recognize that business and economic conditions have changed profoundly,” Perkins explained. “We looked at the entire scope of our organization with a critical eye for increasing efficiencies and scaling staffing to match business levels. We are making these tough decisions in order to continue a high level of commitment to the products and services our members expect from WesCorp.” The analysis prompted WesCorp to advance some strategic plans already in place, such as those associated with converting to image check processing and phasing out branch processing facilities. It also allowed WesCorp to realign and reduce staffing and organizational resources to support WesCorp’s core competencies. “WesCorp regrets the impact these decisions will have upon its work force,” Perkins added. “We join, however, with many of our members in making the tough expense and staffing decisions necessary to meet today’s economic conditions.”

CU System briefs (07/01/2009)

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* CRANSTON, R.I. (7/2/09)--Cranston-based Coastway CU officially became Coastway Community Bank Wednesday. The 89-year-old credit union, founded as Telephone Workers CU, had 21,000 members and about $284 million in assets as of Tuesday. The credit union decided to convert to a mutual savings bank because it wanted to do more business lending than it was allowed under the 12.5% of assets cap required of credit unions. In April, 80% of voting members endorsed the conversion. (The Providence Journal July 2 and Warwick Online June 30) … * FORT WORTH, Texas (7/2/09)--OmniAmerican Bank--the former OmniAmerican CU based in Fort Worth--said Tuesday it will offer an initial public offering (IPO) to convert from a mutual savings bank to a publicly held company. The bank converted from a credit union charter on Jan. 1, 2006, to a mutual bank charter. Depositors with the bank as of March 31, 2008, would be eligible to participate in the IPO, which would be completed during the first quarter of 2010. The bank was founded in 1956 as Carswell FCU serving Carswell Air Force Base. It has $1.06 million in assets--less than the $1.6 billion in assets it had when it converted from a credit union to a bank (Fort Worth Business Press and Star-Telegram June 30) …

Minnesota Senate Minority leader meets with CUs

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ROCHESTER, Minn. (7/2/09)--Ten Minnesota credit union representatives met with state Senate Minority Leader Dave Senjem (R-Rochester) Tuesday at a legislative "Meet and Greet" hosted by the Minnesota Credit Union Network (MnCUN).
Click to view larger image Minnesota Senate Minority Leader Dave Senjem (R-Rochester) met with credit union representatives during a legislative "meet and greet" Tuesday. From left are Neil Christy, Minnesota Credit Union Network (MnCUN) vice president of education and credit union development; Senjem; Mayo Employees FCU Chief Financial Officer Ken Blazing and CEO Mary Hansen; and Mark D. Cummins, MnCUN president/CEO. (Photo provided by the Minnesota Credit Union Network)
The second of two summer political meetings, the event provided an opportunity to discuss topics important to credit unions, communities and the state. Credit unions shared the effects the struggling economy and housing market are having on them and their members. "I encourage you to keep the lines of communication open," said Senjem, a long-time credit union proponent. Senjem served on the board of Mayo Employees FCU in Rochester for 23 years. He has been in the state Senate for seven years and has held the position of Senate minority leader since 2006. Throughout his years in the legislature, he repeatedly has professed a dedication to maintaining Minnesota credit unions' tax exempt status, said McCUN. During the meeting, Senjem shared his perspective on the state's "grave fiscal problems." Minnesota has a $2.7 billion budget shortfall stemming from financial instability that will impact citizens for many years, he said. He said the state can restore itself fiscally by investing in job growth. "It is through long-standing relationships with legislators like Sen. Senjem that Minnesota credit unions are able to strengthen our presence in Minnesota politics," said Mara Humphrey, MnCUN vice president-governmental affairs. On Monday, Minnesota credit unions met with the state Speaker of the House Margaret Anderson Kelliher (DFL-Minneapolis).

CUNA closed Friday for holiday no INews NowI

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WASHINGTON and MADISON, Wis. (7/2/09)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association (CUNA) will be closed Friday in observance of the Independence Day holiday. News Now will not publish an edition Friday but will resume regular publication on Monday.

Pa. CUs to aid state employees in budget impasse

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HARRISBURG, Pa. (7/2/09)--Nine credit unions in Pennsylvania have announced plans to offer special low-interest loans and lines of credit to help members who are state employees cope with the potential loss of their paychecks. Pennsylvania lawmakers were still negotiating a new budget when the state’s fiscal year ended Tuesday. If legislators remain locked in a budget stalemate after July 17, paychecks would be withheld from 69,000 state employees, according to the Pennsylvania Credit Union Association (Life is a Highway July 1). Speaking at a press conference, Gov. Ed Rendell and Secretary of Banking Steve Kaplan praised the leadership shown by Pennsylvania State Employees CU and highlighted the efforts of three additional credit unions: AmeriChoice FCU and Members 1st FCU, both based in Mechanicsburg, and Oil Country FCU, based in Titusville. Other credit unions developing special programs include Altoona VA Hospital FCU, Altoona; Belco Community CU, Harrisburg; Grove City (Pa.) Area FCU; NE PA Community FCU, Stroudsburg; and Your Choice FCU, Altoona. State employees are required to remain on the job even if the budget is still in limbo. They are then paid for their work retroactively after a budget is signed. Pennsylvania has been unable to meet the annual July 1 budget deadline since 2002. This year, lawmakers have split over Rendell’s proposal to help close a $3.2 billion deficit by increasing the personal income tax rate.

iBelong raises CU awareness in Mississippi

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JACKSON, Miss. (7/2/09)--An “iBelong” television and radio campaign is boosting credit union awareness among Mississippi residents. Created by the Pennsylvania Credit Union Association, “iBelong” began running in Mississippi in January, according to the Mississippi Credit Union Association. A survey completed in May 2009 showed respondents had increased awareness of credit union eligibility, increased favorable perceptions of credit unions and had recently heard positive news about credit unions, when compared to 2007 survey results. Favorable perceptions about credit unions outweighed unfavorable impressions by a 4 to 1 ratio. For example, the number of respondents saying the description “cares more about people than profits” describes credit unions rather than banks increased 300% in 2009. In addition, the “iBelong” campaign is credited with helping boost credit union membership. Mississippi credit unions’ first quarter 2009 member-growth rate was five times greater than the growth rate for all of 2008. The “iBelong” campaign is also being used in Pennsylvania, Illinois and Vermont.

IBoston GlobeI When lender says no turn to CUs

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BOSTON (7/2/09)--Credit unions are a good alternative to traditional mortgage financing as credit markets overall have tightened up, the Boston Globe said in a Tuesday article. Credit unions were listed as the No. 1 alternative of five options mentioned by the newspaper. “Unlike banks and mortgage companies that sell their loans on the secondary market, many credit unions actually keep the loans they make in their own portfolio,” the article said. “The secondary money market purchases bundles of loans from lenders. These loans must meet specific guidelines such as those set by [the Federal Housing Administration], Freddie Mac and/or Fannie Mae. Once the primary lender sells the loan, the lender is now in the position to make another loan to a new borrower,” the article said. Credit unions that don’t sell the loan on the secondary money market can set their own loan requirements, the article added.

Pay It Forward winner announced

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MADISON, Wis. (7/2/09)--Summit CU, Madison, Wis., has announced the winner of its grassroots charity effort contest, Pay It Forward. The winning video pledge, “Giving Relative,” received the highest ranking out of 798 entries in the Pay It Forward contest. Members were taped at Summit’s 20 branches between March 23 and May 14. They explained what they would do for someone else if Summit gave them $10. Winner Elizabeth Lease said she would donate the $10 to a struggling relative. When she received the $10, she contacted her sister, who recently had to quit her job because of increased symptoms associated with lupus. “I asked if she could use some extra cash for groceries, which she needed,” Lease said. I went to her home and gave her $10 to buy some groceries. Needless to say, she was extremely appreciative and at the time it was exactly what she needed to take her mind off of her medical issues.” Lease will receive $500 for her entry, and Summit will donate $500 to her charity of choice--the Lupus Foundation of America--Wisconsin Chapter in Madison. Summit also will donate $500 to the Waunakee Neighborhood Connection, the charity of choice for the second and third place entries. Both were filmed at Summit’s Waunakee branch. Voting took place on Summit’s website June 1-15. Community members were invited to rate the entries on a scale of one to five stars. Summit CU has $1.3 billion in assets. To view the winning video, click on the photo.

Heartland tests new encryption

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PRINCETON, N.J. (7/2/09)--Heartland Payment Systems, one of the nation’s largest payments processors, successfully completed the first phase of its end-to-end encryption pilot project Monday in response to last year’s data breach. The company announced in January that its processing system was breached last year, compromising millions of credit cards and affecting credit unions and their members nationwide. Credit unions in Alabama, California, Florida, Louisiana and Texas have joined in class action lawsuits seeking damages related to the Heartland breach (News Now Jan. 21, March 2 and April 2). The first step of the company’s pilot involved transmitting live Advanced Encryption Standard (AES)-encrypted card transactions from a merchant to Heartland’s processing platform. AES is the highest level of encryption and is on track to replace Data Encryption Standard (DES) and Triple DES as the desired standard for sensitive data, said Heartland (BusinessWire June 30). To his knowledge, this is the first time encrypted transactions have been sent from a merchant’s card reader to and through a major processor’s payments network, said Robert O. Carr, Heartland chairman/CEO. “[Monday’s] transactions involved a Texas-based merchant and multiple credit card, prepaid and signature debit card transactions testing each of the major card brands,” Carr said. “These cards were read by our newly developed pilot tamper-resistant security module (TRSM) terminal. The data was encrypted as the electronic digits left the magnetic stripe and entered the TRSM hardware device. The data was then successfully transmitted to and through our processing platform for authorization and settlement. “Typically, cardholder data is unencrypted as it leaves a merchant’s terminal and is not encrypted until it is either tokenized in a gateway or at rest in the processing platform’s data warehouse,” Carr continued. Cardholder data in transit is at risk of being compromised if cyber criminals or hackers use methods such as network or memory sniffer malware to get the data. “To protect data throughout the life cycle of a credit, debit or prepaid card transaction, Heartland is developing end-to-end encryption technology we call E3 that is designed to encrypt the transaction from the card read through our network and ultimately through transmission to the card brands,” he added. Credit unions are still reissuing members’ cards compromised in Heartland’s data breach. For example, Omaha (Neb.) Police FCU is replacing 1,167 of its members’ debit cards after being notified that the cards were among those compromised in the Heartland data breach (Omaha World-Herald June 30).

Top 10 News Now stories for June

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MADISON, Wis. (7/2/09)--Here are the top 10 most requested News Now stories during June. Use the links to read the entire stories online. 10. Frank advocates expanded powers for CUs BOSTON, Mass.(6/23/09)--Credit unions should be given expanded powers, House Financial Services Committee Chairman Barney Frank told Massachusetts Credit Union League members on Monday. 9. Top 10 emerging risks for CUs outlined at ACUC BOSTON (6/23/09)--Today's fraud landscape is becoming more complex, featuring extensive intertwined risks--some old but with new wrinkles and some emerging at the pace of new technologies. The emerging risks will require credit unions to adopt rigorous, cross-channel fraud monitoring strategies, a CUNA Mutual risk expert said Monday. 8. Banks eyeing checking accounts for fees NEW YORK (6/1/09)--While credit card rates are under scrutiny in Washington, banks are already looking for other ways to boost their fee income. They are raising fees on checking accounts. 7. CUs weigh pros, cons of employees on Facebook MADISON, Wis. (6/16/09)--Using Facebook to build social networks can offer consumers many advantages--such as the chance to re-connect or build new relationships with others, and to promote themselves or other causes. 6. Does Facebook pose security issues for CUs? MADISON, Wis. (6/15/09)--With accounts of hackers and spammers infiltrating social networking sites such as Facebook, credit unions will be happy to learn that some of their colleagues using the sites for online banking have not experienced security problems. 5. Treasury wants NCUA independent WASHINGTON (6/18/09)--The U.S. Treasury's report on financial regulatory reform, released to the public on Wednesday, would allow the National Credit Union Administration (NCUA) to maintain its safety and soundness authority over credit unions. 4. Miller v. BoA decision favors financial institutions WASHINGTON (6/2/09)--The California Supreme Court Monday backed Bank of America's (BoA) position and ruled that state law permits BoA and other depository institutions in California to cover overdrafts and overdraft fees from Social Security funds and other protected public benefit deposits. 3. Remittance reforms are on House agenda WASHINGTON (6/4/09)--Rep. Luis Gutierrez (D-Ill.) in a Wednesday House subcommittee hearing said that he would soon introduce legislation aimed at remittance-related reforms. 2. NCUA sets webinar on new law implementation ALEXANDRIA, Va. (6/1/09)--The National Credit Union Administration will present its guidance on implementing its new corporate credit union stabilization plan in a webinar scheduled for June 24. 1. New corp stabilization plan implemented by NCUA ALEXANDRIA, Va. (6/19/09)--The National Credit Union Administration will immediately borrow $1 billion of the total $6 billion offered by the U.S. Treasury to shore up the corporate credit union system after the board at its monthly meeting voted to implement the temporary corporate credit union stabilization fund.

New York CUs Marker Man stage awareness alert

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ALBANY, N.Y. (7/02/09)--More than 40 New York credit union
Click to view larger image Spreading the word about the credit union difference helped “Marker Man” make new friends during a recent awareness event in Albany, N.Y. “Marker Man” is the mascot for the Credit Union Association of New York’s creditunionsFORYOU.com awareness campaign. (Photo provided by the Credit Union Association of New York)
volunteers raised the awareness of legislative staffers, state and private employees, and pedestrians as they roamed the streets surrounding the state’s capitol and legislative building. The volunteers recently spent the day in Albany as part of the Credit Union Association of New York’s awareness campaign, called creditunionsFORYOU.com. “Marker Man,” the campaign mascot, helped draw attention to the volunteers as they held doors open for state workers and chatted with passers-by. The volunteers also manned booths in the Capitol Concourse and outdoors at West Capitol Park. Volunteers were given a credit union awareness T-shirt to wear for the day and were equipped with talking points about the credit union difference, as well as markers to use as giveaways, said the association.

Dupaco Community CU hosts Sen. Grassley

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DUBUQUE, Iowa (7/2/09)--Credit union leaders urged Sen. Charles Grassley (R-Iowa) to preserve current credit card interchange rules and safeguard credit unions’ independent federal regulator at a Dubuque County town hall meeting Tuesday. Iowa credit union representatives asked Grassley not to support proposed federal legislation--H.R. 2695, H.R. 2382 and S. 1212--that would shift the costs of providing credit card transactions, or interchange, from merchants to financial institutions such as credit unions, according to Dupaco Community CU President/CEO Bob Hoefer. “Merchants simply want to pay less for payment card acceptance while still receiving significant benefits,” Hoefer said. “If merchants pay less in interchange fees, this cost would ultimately be shifted to all financial institutions, including Iowa credit unions and, ultimately back to all consumers, including Iowans, who use debit and credit cards.”
Click to view larger image Dupaco Community CU President/CEO Bob Hoefer (left) expresses credit unions’ position on interchange legislation to U.S. Sen. Charles Grassley (R-Iowa) before the start of a public town hall meeting at the credit union.
Click to view larger image More than 125 people attended Sen. Charles Grassley’s town hall meeting Tuesday at Dupaco Community CU’s Asbury branch. (Photos provided by Dupaco Community CU)
Interchange fee rates have remained constant for the past several years and they are a fair rate for merchants using a complex system, added Hoefer. “Despite problems in the financial sector, there has not been one consumer complaint that the payment networks have somehow failed to perform efficiently and effectively, even as consumers go to hundreds of thousands of retailers throughout the world and complete a transaction in seconds,” he said. Through the current system, merchants bear no risk of fraud and interchange rates assist in covering the cost borne by financial institutions. Risks can range from data security breaches to fraudulent transactions, and financial institutions protect against this fraud through interchange rates, he said. Credit union leaders also asked Grassley to maintain the National Credit Union Administration (NCUA) as an independent regulator as Congress looks to overhaul the financial services regulatory system. “There is a huge difference between not-for-profit, cooperative credit unions and for-profit banks,” Hoefer said. “Credit unions largely were not involved in the types of lending practices with which Congress has concerns.” Hoefer underscored that the taxpayer’s cost of operating NCUA is zero. “U.S. credit unions fund the agency through insurance premiums, examination fees, and investment revenue of the National Credit Union Share Insurance Fund,” he said. The credit union charter could be weakened if credit unions were placed under the regulatory authority of a single, consolidated federal bank regulator, Hoefer added. “Such action would only result in increased loan rates, decreased savings rates, higher fees, and the loss of the not-for-profit credit union alternative for Iowa’s 900,000 credit union members,” he said. More than 125 individuals, including 25 credit union representatives from Dupaco Community CU, DuTrac Community CU, and Alliant CU, of Dubuque, attended the event. Julie Vande Hoef, director of government affairs for the Iowa Credit Union League, said Tuesday’s event reflects the strong support of Iowa credit unions in their legislative advocacy efforts. “The future of credit unions depends on their ability to engage lawmakers and articulate the credit union message,” she said. “Elected officials' decisions can influence greatly the future direction of credit unions and their ability to serve members.”