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Bank branches take a tumble in 2011

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HARRISBURG, Pa., and CHARLOTTESVILLE, Va. (8/1/12)--U.S. banks and thrifts lopped off more than 767 branches during 2011, with banks in Pennsylvania leading the exodus. However, credit union branches in that state increased, said the Pennsylvania Credit Union Association.

Pennsylvania lost the most bank branches--83--of all the states, according to SNL Financial LLC of Charlottesville, Va.  Georgia had the second-highest closures, with 51 branches cut, and Virginia, was third-highest, with 46 branches dropped in the past year. 

Four states saw gains: California gained 22 bank branches; Rhode Island, three; New Mexico, two; and Delaware, one.  Three states--New Hampshire, Alaska and North Dakota--broke even with no branch cuts or additions. The rest saw decreases in bank branches.

PCUA noted that 119 bank branches were shut in the state, while 36 new ones opened--for a net loss of 83.   But the state gained 14 credit union branches in 2011, said PCUA.  During the past five years,  credit unions have added 157 branches in the state (Life is a Highway July 31)

Pennsylvania experienced its largest growth spurt in credit union branches in 2008, when 44 new branches opened.

The metro area with the greatest number of bank branches closed--30--was the Philadelphia-Camden, N.J.-Wilmington, Del. metro area. It lost 10 more branches than did New York's metropolitan statistical area. The SNL Financial report indicated that six of the major banks with the most branch closures have large networks in Pennsylvania, said PCUA. The losses were attributed to consolidation of existing sites and closures to cut expenses.

The report also indicated that consumers have been reluctant to abandon brick and mortar branches for online or mobile branch services and that a typical bank branch employs up to 20 people. Use the link to access the report summary.

CU System briefs (07/31/2012)

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  • RUSSELLVILLE, Ark. (8/1/12)--The police department in Russellville, Ark., Friday advised area residents not to fall for  a text scam under the heading "Credit Union Alert." The text states a credit union alert has been issued and the recipient's credit or debit card canceled. It directs callers to a phone number and asks for their financial information.  The message, said the department, is a fraud.  Police reiterated that recipients should not give any information, and instead "always hang up and contact the creditor back directly to verify the call." It cautioned to find the creditor's number on a verified source, such as balance statements, the back of the credit card or online.  The department received several calls from concerned recipients (The Courier News July 28) …
  • BISMARCK, N.D. (8/1/12)--CU on the Road tour, part of the Credit Union Association of the Dakotas' (CUAD)  awareness campaign, visited the North Dakota State Fair in Minot last week. On Tuesday, CUAD President/CEO Robbie Thompson and Director of Strategic Initiatives Kristie Heit greeted fairgoers alongside the CU on the Road vehicle at the entry gates, handing out credit union information and 1,500 stickers that said "Credit Unions R Cool" to visitors, including these four teens. The CU on the Road vehicle was filled with balloons for a "guess the number" prize game. On Wednesday, Co-op Day at the Fair, volunteers including Heit and Minot area credit unions GEM FCU, Prairie FCU and Town & Country CU, served more than 800 guests breakfast--pancakes, sausage and fruit. At the credit union's booth in the Co-op tent, volunteers talked to and handed stickers out to 1,200 additional visitors. More than 1,000 people attempted to guess the number of balloons in the CU on the Road vehicle. One person guessed the number--192--and won a $100 prize. Later, the coop and credit union volunteers served more than 3,000 free ice cream cones to thank members for their support. (Photo provided by the Credit Union Association of the Dakotas) …

Chicago area CUs host Ecuadoran CU delegation

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NAPERVILLE, Ill. (8/1/12)--OSCUS, a credit union in Ecuador, last week sent four individuals to visit three Chicago area credit unions, including one with which it has a formal partnership via the World Council of Credit Unions' (WOCCU) International Partnerships Program, according to the Illinois Credit Union League (ICUL).

Leading the delegation was Joshua Fetting, WOCCU international partnerships officer.

Located in Ambato, Ecuador, a city of about 400,000 people in the country's central mountainous region, OSCUS holds $171 million in assets and serves more than 160,000 members. With 11 branches nationwide, OSCUS offers services such as savings, debit cards, consumer loans, auto loans, small-business loans and mortgages.

Four individuals from OSCUS, a credit union in Ecuador, last week visited three credit unions in the Chicago area, including a World Council of Credit Unions' (WOCCU) International Partnerships Program partner. From left, are: Front row: Jim Block, vice president, lending, Baxter CU (BCU); Santiago Martin Ortiz Nunez, chief financial officer of OSCUS; Patti Dixon, vice president, member service branch operations; BCU; Lisa Baron, senior vice president, human resources, BCU;  Rosa Marlene Marino Lescano, branch manager, OSCUS; Sarah Thorrens, vice president, talent management, BCU; and Bob Pondelicek, manager, mortgage sales, BCU. Back row, Tom Moore, chief financial officer, BCU; Chuck Smith, vice president/controller, BCU; Carey Price, vice president, sales and service, BCU; Bob McKay, chief operating officer, BCU; Mike Valentine, CEO, BCU; Joshua Fetting, international partnerships officer, WOCCU; Carlos Alonso Santamaria Sanchez, chief information officer, OSCUS; Juan Carlos Basantez Gaona, vice president, national sales, OSCUS; and Maria Garcia, manager, cards and lending operations, BCU.  (Photo provided by the Illinois Credit Union League)
 

OSCUS is the fifth-largest out of the 32 regulated credit unions in Ecuador, which collectively hold $1.9 billion in assets.  About one in five of the country's residents, or 1.8 million, are credit union members, said the league.

OSCUS holds a formal partnership with Baxter CU (BCU) in Vernon Hills, which was the first stop for the delegation. "Our team did a terrific job presenting and discussing key areas of interest with OSCUS, which included mobile technology and information technology solutions, marketing and financial operations and management among other areas," said Tom Moore, BCU senior vice president/chief financial officer.

The delegation also spent time with Mike Valentine, BCU CEO, and many BCU management team members. Next year, BCU will go to Ecuador for meetings with OSCUS management, staff and board, and talk first with OSCUS members to learn about how they are served. The visit will coincide with OSCUS' 50th anniversary.

"WOCCU has the key role to put credit unions around the world in contact so they can mutually tackle operational, structural and philosophical issues," said Victor Miguel Corro, WOCCU vice president. "The goal is to improve members' lives by providing them with the best access to financial services."

The second stop for the delegation was Motorola Employees CU (MECU) in Schaumburg. Larry Rosin, executive vice president/chief financial officer, said the visit was a good exchange, with many questions from the delegation about MECU's investment strategies.

He noted OSCUS is in a position of excess liquidity but--unlike credit unions in the U.S.-- operates within an environment of significantly higher interest rates. Rosin was joined by MECU CEO John Fiore, and staff from the credit union's lending, information technology and operations areas.

The final stop for the delegation was with Sean Rathjen, CEO of Consumers Cooperative CU in Waukegan, and his staff, who covered topics, including marketing and use of social media, liquidity planning and reporting, and how the credit union manages and prices for credit risk with its loans. Rathjen also reviewed Consumers' technology plan and the management and structure of its multi-media contact center, which integrates Web, chat, e-mail, phone and fax services, including the bilingual design.

"Anytime that you can share information, it can only benefit the credit union movement locally and on an international basis," said Dan Plauda, ICUL president/CEO.

Affinity FCU launches hybrid ARM

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BASKING RIDGE, N.J. (8/1/12)--Affinity FCU has introduced an adjustable rate mortgage (ARM) product designed to add stability for home buyers in the aftermath of the mortgage market collapse.

The 5/5 hybrid ARM locks in the original rate for five years, then makes adjustments once every five years thereafter, allowing the borrower to anticipate and budget for mortgage rate adjustments, according to the New Jersey Credit Union League (The Daily Exchange July 31).

The product protects against dramatic rate increases by limiting rate changes to no more than 2% to 3% at each adjustment period and 5% to 6% over the life of the loan, depending on the term. If market rates change 6% to 7% during a five-year period, the borrower's rate will change 2% to 3%, according to the $2.2 billion Basking Ridge, N.J.-based credit union.

The 5/5 ARM is designed to give home buyers the advantages of an ARM while providing more rate stability--a key consideration since the economic collapse, when ARMs came under criticism because borrowers had trouble adjusting to unexpected higher payments.

Affinity FCU's product allows homebuyers to take advantage of low rates at the outset while planning for possible higher rates at a predictable time, knowing that any possible increase will go only so far, the credit union said. And for those who buy during a time of higher rates, the 5/5 ARM protects them from being locked into high rates throughout the mortgage term.

Auto lending up under relaxed criteria

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BURTON, Mich. (8/1/12)--Family Community CU in Burton, Mich., has reported an ongoing 12% to 15% increase in auto loans during the past two years amid more relaxed credit conditions for consumers looking for auto loans.

On a national level, credit reporting agency Equifax reports auto lending has risen to a six-year high (Saginaw News July 29).

That's because as the economy recovers, more people can afford more and take on new financial responsibilities, Daryl Toor, Equifax assistant vice president of public relations, told the newspaper.  

The credit union has started a new auto-loan marketing campaign. The credit union fully underwrites the loans, measures a member's ability to pay, calculates which members have troubled credit, and assesses the likelihood the credit union will get paid back on its loan, Elizabeth Warden, the credit union's vice president of lending and marketing, told the paper.

Family Community CU more readily lends to people with "bruised credit" for auto loans than for unsecured loans that have no collateral or security involved, Warden added.    

In the past three years, auto loans nationwide have nearly doubled to $52.5 billion in March from $26.9 billion in March 2009, Equifax said.

Get Going microsite showcases CUs auto loans

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OKLAHOMA CITY, Okla. (8/1/12)--For the sixth straight summer, Tinker FCU is running its "Get Going" campaign to promote low-rate auto loans.

The $2.6 billion asset, Oklahoma City, Okla.-based credit union originally developed Get Going to provide both members and nonmembers an incentive during the summer to visit its branches and its web site, to learn about low-rate auto loans, according to Nancy Entz, Tinker FCU vice president of marketing (Deposit Growth Strategies July 1).

Visitors can apply for a loan through the Get Going microsite.

Tinker FCU also offers low rates for watercraft, motorcycles and other popular summertime vehicles.

Each Get Going campaign also includes a grand prize. This year's grand prize is free gas for a year, a choice made by the credit union because gas prices are a prevalent topic in today's economy, Entz said in the article.

Two Missouri CUs to merge for savings

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SPRINGFIELD, Mo. (8/1/12)--CU Community CU announced Friday that it has reached an agreement with Southwest Missouri CU (SWMCU) to merge operations following recent votes by its board of directors and membership. Both credit unions are based in Springfield, Mo.

The combined entity will go forward under the CU Community CU name once the merger receives regulatory approval and integration is complete, which is projected for December, according to a news release on CU Community CU's website.

CU Community CU is the fourth-largest asset credit union in Springfield with more than $76 million in assets and 6,400 members. Its members include employees, families and retirees of City Utilities, other select employee groups, and people who live in Greene and Christian Counties.

Economies of scale and reduced costs were cited as the main reasons for the merger.

Southwest Missouri CU's main sponsors are CoxHealth, SRC Holdings, Reckitt Benckiser, and others. Through the merger, CU Community will gain roughly 3,700 members and assets of $11 million.

Judy Hadsall will continue to serve as president/CEO of CU Community CU. Board members from SWMCU will be added to the CU Community CU board of directors.

Vantage CU closes Eureka branch

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BRIDGETON, Mo. (8/1/12)--Vantage CU, Bridgeton, Mo., has closed the second of two branches it acquired in a 2010 merger with Spirit of St. Louis CU.

Vantage CU, with $710 million in assets, closed its Eureka branch on June 29 due to a lack of "foot traffic," according to a representative for the credit union.

Members are being directed to Vantage CU's West County and Sunset Hills branches for service.

A sign on the closed branch also indicated that free CO-OP Network ATMs were available at another nearby credit union inside a Walmart Supercenter (Eureka-Wildwood Patch Jan. 31).

Vantage closed its Des Peres, Mo., branch, which it also acquired in the merger with Spirit of St. Louis CU, in February 2011. The credit union cited operational challenges, restrictive legislation, a sluggish economy and light patronage for the Des Peres branch closing.

Lowest card rates come from CUs says SNL

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CHARLOTTESVILLE, Va. (8/1/12)--
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When it comes to platinum credit cards and reward cards, credit unions have the lowest rates in the nation, beating bank and thrift rates by nearly 200 basis points, says a new study of interest rates.

The national average rates for the two card products hover around 10% to 11%, but some credit unions studied offer half that, according to Charlottesville, Va.-based SNL Financial LC, which conducted the study.

Total credit card loans at U.S. credit unions stood at $36.55 billion as of March 31--a 34.62% increase over $27.15 billion in 2006.  SNL Financial said credit card loans made up 6.31% of credit unions' total aggregate lending portfolio, compared with 5.37% in 2006.

The statistics are comparable to statistics compiled by the Credit Union National Association (CUNA) in its U.S. Credit Union Profile.  Credit unions saw a 6.7% growth rate in overall credit cards during 2011, with cards making up 6.3% of total loans, according to CUNA. To put the growth rate into perspective, the 6.7% can be compared with 7.6% cards growth rate in 2007, 6.4% in 2008, 3.1% in 2009, and 3.9% in 2010.

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For reward card rates, the 16 credit unions with the lowest rates have rates ranging from 5.25% to 7.99%. said SNL Financial.  That compares with rates for the 16 lowest-rate banks and thrifts from 7.24% to 9.24%. The average national rate is 10.86%, said the study report.

The lowest reward card rate--5.25%--is offered by Advantage FCU, Rochester, N.Y. Other credit unions offering the lowest rewards card rates are: Warren FCU, Cheyenne, Wyo., with 6.25%; Sandia Area FCU, Albuquerque, N.M., 6.49%; Apple FCU, Fairfax, Va., 6.74%; and GTE FCU, Tampa, Fla., 6.799%, said SNL Financial. (See SNL Financial chart, "U.S. credit unions with lowest reward credit card rates.)

Three banks in Louisville, Ky.; Warren, Pa.; and Columbus, Ga., tied for the lowest rate among banks and thrifts: 7.24%

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Platinum credit card rates for the 15 credit unions with the lowest rates ranged from 3.25% to 6.25%. That compares with banks and thrifts' lowest rates of 5.15% to 7.25%. Credit unions with the lowest platinum card rates were Educational Systems FCU, Greenbelt, Md., with 3.25%, followed by Town & Country FCU, South Portland, Maine, with 3.99%; Energy One FCU, Tulsa, Okla., with 4.25%; Sandia Area FCU with 4.99%; and San Francisco (Calif.) FCU with 5.15%. (See SNL Financial chart: U.S. credit unions with lowest platinum credit card rates.)

First Tennessee Bank N.A. of Memphis, Tenn., had the lowest rate among banks and thrifts, at 5.15%. Three other banks offered rates under 6%.

The data are based on regulatory filings for the quarter ended March 31 and are rates shown for the most creditworthy borrowers, said SNL Financial.

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The SNL information is just part of the story, however. In addition to providing lower interest rates on outstanding balances, credit unions also charge lower annual fees and lower late fees, according to rate and fee data on  Informa Research Services.

See Informa's Credit Card Products chart (right)  for a comparison of rates, annual fees, and maximum late fees for credit unions and banks in platinum cards and reward cards. Credit unions are lower on all fees as well as interest rates.

A consumer who has a platinum card carrying an average $7,500 balance and who is late on five payments will spend about $230 less per year at a credit union than at a bank, on average," said Mike Schenk, CUNA vice president of economics and statistics.

"A consumer who has a reward card carrying a similar average $7,500 balance, and who is late on five payments, will spend about $420 less per year at a credit union than at a bank, on average," he added.

CUs raise 200K for Boston Childrens Hospital

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BURLINGTON, Mass. (8/1/12)--More than 100 Massachusetts credit union officials took to the golf links in an event organized by EasCorp, wrapping up a year of fundraising to support Boston Children's Hospital as part of the Credit Union Kids at Heart program. Credit unions contributed $200,000 to the hospital in 2012.

Kayla Biagotti, seated, and her mother, Kris Biagiotti, plan to run the 2013 Boston Marathon together next spring as the marathon's first mother-daughter team, with support and encouragement from credit unions in Massachusetts. Pictured with them is Kris Biagiotti's finance, Brian Bridges.  (Photo provided by EasCorp)
t the event, EasCorp announced that 17-year-old Kayla Biagiotti, a life-long Children's Hospital patient and Kids at Heart partner, and her mother, Kris Biagiotti, will compete as the first mother-daughter team to run the 2013 Boston Marathon together. Kris will push Kayla in a specially designed wheelchair for the entire marathon--26.2 miles. They will rely on support and encouragement from the credit union community to race into history, said EasCorp.

The Biagiottis have been part of the Kids at Heart Program since Kayla was eight years old. To ensure that Team Biagiotti has the best and safest equipment, credit unions raised funds within a week for a $4,000 custom-built wheelchair. They will debut the new chair on Sept. 30, when they compete in the Rockfest Marathon in Hampton, N.H., in order to qualify for the Boston Marathon.

The Credit Unions Kids at Heart program began in 1996 with a small group of Massachusetts credit unions and now includes 36 sponsors from across the country. Along with the invitational golf tournament, credit unions sponsor runners in the Boston Marathon each spring and host fundraisers to benefit the hospital.  Since the program's inception, the credit union community has raised more than $3.5 million for the hospital.

CU System briefs (07/30/2012)

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  • TALLAHASSEE, Fla. (7/31/12)--Former state prison guard Kimberly Nakia Lewis, 32,  of Sneads, Fla., was sentenced Thursday to two years and one month for using inmates' names and Social Security numbers to file false tax returns claiming refunds. She allegedly provided the names and numbers to a co-defendant, Christopher Lamont Shorter, 34, of Quincy, who owned a tax service. Shorter was sentenced to seven years and two months (Associated Press via The Miami Herald July 27). Lewis and Shorter allegedly claimed $1.3 million in refunds for more than 120 inmates. Shorter had established accounts at the Tallahassee-Leon FCU, the Florida A&M University FCU, and Florida Commerce FCU and allegedly used the accounts to deposit tax refunds (WJHG.com July 27). When they became aware of the fraud, the credit unions proactively returned funds to the Internal Revenue Service. Lewis, who worked at Appalachee Correctional Institution, and Shorter pleaded guilty to conspiracy, mail fraud, filing false returns and identity theft. Shorter also pleaded guilty to wire fraud. Her was ordered to pay restitution to the federal government of $153,062, while Lewis was ordered to repay $7,295 …
  • MADISON, Wis. (7/31/12)--Dane County Habitat for Humanity in Madison, Wis., has named Valerie Johnson (formerly Valerie Breunig) as its new CEO.  Johnson most recently was executive director of the Worldwide Foundation for the World Council of Credit Unions for seven years. The foundation developed credit union programs that funded housing and community projects throughout the world.  Before joining WOCCU, she was the director of development for the Argonomic Science Foundation. She succeeds former Habitat CEO Perry Ecton, who stepped down in April to become executive director of Habitat for Humanity of Broward in Fort Lauderdale, Fla. (WKOW.com July 27) …

NYIB annual conference is this week

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NEW ORLEANS (7/31/12)--The National Youth Involvement Board's (NYIB) 2012 Annual Conference kicked off Monday in New Orleans with a leadership pre-conference workshop, an opening general session and a reception. The conference ends on Thursday.

Monday's pre-conference workshop on "Embrace The Leadership Challenge: Making the Most of Managing from the Middle," was presented by Jeffrey Cufaude, of Indianapolis-based Idea Architects.

The opening general session included NYIB members Anne-Marie Bisson and Rebecca Isaacs reviewing the year and providing lessons in collaboration, innovation and creativity.

Today's general sessions will include "Getting to the Future of Credit Unions--Attracting Gens X, Y and Z" by Sean McDonald, president of Your Full Potential LLC, and "Eight Ways to Make Financial Literacy Captivating," presented by Colin Ryan, creator of Economy of Me, Vermont Credit Unions'  youth finance movement.

Breakout sessions today include Kids and Campaigns, Keeping the Motivation Going in Your Student-Run Branch, and Branding Your Financial Education Program.

Wednesday general sessions will feature "eMerging Technologies and Mobile Marketing," with Mark Arnold, president, On the Mark Strategies; "Pay it Forward with Your Best Practice "and "Secure a Contestant Spot on the NYIB Price is Right," with Juli Lewis and Janice Quigg; and "Capturing the Most Powerful Market: MOMS," presented by Shari Storm, vice president and chief motivation officer, Verity CU.

The closing general session on Thursday will feature Lisa Carver, president, Moxie Consulting Inc., discussing "Working with Different Personalities."

N.Y. mortgage record tax appeal to be argued Sept. 4

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NEW YORK  (7/31/12)--The Court of Appeals of the State of New York is scheduled to hear oral arguments on Sept. 4 in the appeal by Hudson Valley FCU of lower court decisions related to its challenge against the state's mortgage recording tax (MRT).

Earlier this month, the Poughkeepsie, N.Y.-based, $3.2 billion asset credit union filed a reply to an amicus brief from the American Bankers Association and the New York Bankers Association in which the banks argued that federal credit unions should not be exempt from the tax. (Use the link to related story: Bank associations file amicus brief, back mortgage recording tax in the May 21st issue of News Now.)

In its reply, filed July 10, the credit union seeks reversal of the lower courts decisions that the credit union pay the tax and  noted that the banking associations' arguments "are meritless." 

The associations "have long opposed the tax-exempt status enjoyed by federal credit unions under federal law," said the court document. Hudson Valley attacked banks' argument that it was seeking a "novel interpretation" of the exemption to gain a "competitive business advantage."

"Any objective analysis of these arguments serves to illuminate and underscore the exact opposite of what the amici contend--that the Federal Credit Union Act of 1934, as amended, affords Hudson Valley and other federal credit unions constitutional as well as statutory immunity from New York's tax on mortgages, that the contrary determination of the court below is wrong as a matter of law, and that the dismissal of Hudson Valley's complaint should therefore be reversed," Hudson Valley said.

Hudson Valley made three arguments in its response:

  • Its interpretation of the law is consistent with the statute's prior construction and Congress' finding that federal credit unions are exempt from taxation because they are unlike banks and other for-profit lenders.
  • The Federal Credit Union Act, in authorizing federal credit unions to make mortgage loans and exempting federal credit unions and their property from taxation, provides a "clear statutory basis for Hudson Valley's claim of immunity from New York's mortgage tax."
  • Supreme Court precedent and other authority establish that an analysis of federal credit unions' constitutional immunity from taxation is appropriate in deciding the impact of the code on the tax at issue.
(Use the link to related story: Bank associations file amicus brief, back mortgage recording tax in the May 21st issue of News Now.)

Hudson Valley has appealed two lower courts' decisions that denied its challenge to the MRT. It had filed suit on May 12, 2009, in the New York Supreme Court, a lower trial court, against the New York State Department of Taxation and Finance.

The lower court dismissed the case, saying MRT was a tax on the "privilege" of filing the mortgage under state law. An Appellate Division upheld the lower court ruling, and the credit union appealed. The New York Court of Appeals agreed on Oct. 18, 2011, to hear the appeal.

Hudson Valley's lawsuit has been supported in various amicus briefs from the Department of Justice, Federal Housing Finance Agency, the Credit Union Association of New York, the Credit Union National Association and the National Association of Federal Credit Unions.

Interchange oral arguments set for October

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WASHINGTON (7/31/12)--Oral arguments in the lawsuit by merchants against the Federal Reserve Board of Governors over its Dodd-Frank Act-mandated debit interchange rule are set to be heard Tuesday, Oct. 2, and will include arguments from counsel who filed amicus briefs on behalf of a coalition of credit union and bank trade associations, according to court documents filed in the U.S. District Court for the District of Columbia.

Oral arguments will begin at 11 a.m. ET in the U.S. District Court for the District of Columbia. Seth P. Waxman, an attorney with Wilmer Cutler Pickering Hale and Door, a Washington, D.C., law firm, will argue on behalf of The Clearing House Association and a coalition of associations, including the Credit Union National Association (CUNA). Waxman was the Acting Solicitor General who argued the AT&T FCU field-of-membership case before the U.S. Supreme Court in 1997.

The National Association of Convenience Stores and other retail organizations filed their suit in March, seeking a summary judgment declaring the interchange rule and network non-exclusivity regulation invalid. They allege that the 21-cent cap for issuers with assets of $10 billion or more is too high and that the Fed exceeded its authority on the rule. The rule became effective in October 2011.

The financial institutions' coalition, in their brief--which was filed to reflect financial institutions' perspective on the case, maintain the cap is too low and does not allow debit card issuers to cover their costs and earn a reasonable rate of return on their investments.

The Fed, in its response to the suit, made a number of points defending its interpretations of the interchange amendment to the Dodd-Frank Wall Street Reform Act. (See "Fed response filed in interchange suit" for the full arguments.)

In addition to CUNA and The Clearing House Association, the coalition includes the Independent Community Bankers of America, National Association of Federal Credit Unions, Midsize Bank Coalition of America, Consumer Bankers Association, National Bankers Association, American Bankers Association, The Clearing House Payments Co., and The Financial Services Roundtable.

The case will be heard before U.S. District Judge Richard J. Leon in Courtroom 18. CUNA attorneys will be attending the hearing.

iNerdWalleti names top university CU fin ed programs

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MADISON, Wis. (7/31/12)--The NerdWallet finance blog recently named its top picks for university credit unions with financial literacy resources.

Credit unions and the categories they were selected for included:

  • Best for future homeowners: University FCU, Austin, Texas. The credit union's website offers "a complete set of resources for home ownership," according to the blogger, Laura Edgar.
  • Best for online security: Indiana University CU, Bloomington, Ind.  IU CU offers an online Security Center to help members learn about preventing identity theft, including ways to safeguard their computer against phishing and fraud, and tips for protecting their credit cards while traveling.
  • Best for car buyers: SIU CU, Carbondale, Ill. Members can calculate their auto loan payment online with a financial calculator, learn the basics of auto pricing and vehicle history reports, or download necessary Illinois motor vehicle forms. SIU also sells repossessed cars and trucks in conjunction with the collections department.
  • Best for loans: University of Hawaii FCU, Honolulu. Members with questions about the lending or refinancing process, or those who aren't sure what type of loan they need, can sign up for a free financial coaching session. The credit union also offers free home buying seminars.
  • Best for tax tips: UVA Community CU, Charlottesville, Va. To help members walk through the filing process, UVA Community CU offers the Tax Time Solutions page, with directions for deposit refunds, plus links to the Internal Revenue Service, the Virginia Department of Taxation, and financial planning options at the credit union. The credit union has also partnered with Turbo Tax Online, so members can file taxes directly through online banking.
  • Best for mobile security: University and State Employees FCU, San Diego. USE FCU offers a list of mobile phone security tips on its mobile banking page.
  • Best community outreach program: University of Tennessee FCU, Knoxville, Tenn. UT FCU's Helping U Succeed program conducts free financial education programs for the underserved in Knoxville's inner city. UT FCU also has two student-run branches in local high schools.
To read the complete blog entry, use the link.

League advises state on foreclosure settlement funds

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LANSING, Mich. (7/31/12)--During a work group with other financial industry and consumer advocacy representatives, the Michigan Credit Union League pressed state lawmakers tasked with distributing funds from a national mortgage settlement to focus on prevention and refinance assistance programs.

Michigan received $97.2 million as a result of the $25 billion settlement reached between state attorneys general and the country's five largest mortgage servicers due to improper lending and foreclosures (Michigan Monitor July 30).

Recommendations for distribution made by the league include:

  • Foreclosure counseling and legal aid for homeowners--$15 million;
  • Home affordable refinance program grants--$5 million;
  • Assistance to homebuyers--$15 million;
  • Blight elimination--$25 million;
  • Michigan State University extension foreclosure counseling--$5 million; and
  • Michigan housing and community development programs--more than $3.7 million.
Michigan's state Senate passed House Bill 5015 by a 31-6 vote and then returned it to the House where it was approved by a 100-3 vote. The bill had moved to the Senate in June as an empty vehicle measure to be used as the bill to appropriate the financial settlement fund money.

Senate Bill 1160 was then introduced by Sen. Tom Casperson (R-Escanaba) to set up the Homeowner Protection Fund to be administered by the Department of Treasury in consultation with the Department of the Attorney General. The bill's fund would receive the settlement funds and implement H.B. 5015. The bill was sent to the governor for signature into law.

CUNA in Reuters Combining TAG MBL bills could fit

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WASHINGTON (7/31/12)--Some members of the U.S. Senate have indicated that combining credit unions' bill to raise the member business lending (MBL) cap with a bill banks want that would extend the Transaction Account Guarantee (TAG) program for deposit insurance might be workable, the Credit Union National Association (CUNA) told Reuters  Monday.

John Magill, CUNA executive vice president, told Reuters that the senators CUNA talks to have indicated that "marrying TAG, which the banks really want, with the MBL bill, which we are lobbying for, would work." His comments were featured in the article, entitled, "Banks urge U.S. Congress to extend crisis-era deposit insurance."

Magill noted that CUNA will work to ensure that TAG will not end up passing unless the MBL bill is passed; "CUNA has been promised votes in the House and the Senate on its bill. The banks don't have a bill or a vehicle to attach one."

The American Bankers Association and the Independent Community Bankers Association said they would oppose giving credit unions more lending capability in exchange for the temporary TAG extension.

The TAG program is temporary unlimited coverage in addition to, and separate from, the coverage of at least $250,000 that is available to depositors under the Federal Deposit Insurance Corp's (FDIC) general deposit rules.

Without extending the TAG program, the FDIC's unlimited deposit insurance for "noninterest-bearing transaction accounts" would end on Dec. 31. The banks are seeking a two-year extension.

The MBL bill, which the Senate is expected to vote on this year, would raise the cap for credit unions to 27.5% of assets, from 12.25%. The House has pending legislation that would do the same. CUNA estimates that lifting the cap would create 140,000 jobs and inject $13 billion in new funds into the economy during the first year after enactment, at no cost to taxpayers.

Strong 2Q for CUNA Mutuals revenue net income

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MADISON, Wis. (7/31/12)--CUNA Mutual Group posted strong financial results through the second quarter of 2012 due to solid growth in its lending and asset accumulation businesses, the company said Monday.

CUNA Mutual Group recorded $68 million of Generally Accepted Accounting Principles (GAAP) net income through June, compared with $51 million in 2011. GAAP operating revenue grew in the first half of the year by 4.8 %, compared with 2.3% growth last year. This improvement helped offset weather-related losses in the company's auto and home businesses through the second quarter, CUNA Mutual said.

CMFG Life Insurance Co., CUNA Mutual Group's lead life insurance company, grew its statutory total adjusted capital to $1.55 billion through June, up $39 million from year-end 2011.  Strong earnings helped to further strengthen the company's capital through the second quarter. 

"Despite weather-related losses, we continue to see positive momentum in our core businesses," said Alastair Shore, CUNA Mutual chief financial officer. "We have little control over the weather and economic conditions, but we are executing well on initiatives that are within our control."

MDDCCUA officers elected for 2012-13

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COLUMBIA, Md. (7/31/12)--The Maryland & District of Columbia Credit Union Association announced the result of its board officer elections during the organization's 2012 Annual Meeting and Convention, held in Ocean City, Md.

Board officers for 2012-13 include:

  • Chairman--Rod Staatz, president/CEO, SECU, Linthicum, Md.;
  • Vice chair--Chris Conway,  president/CEO, Educational Systems FCU, Greenbelt, Md.;
  • Treasurer--Rob Windsor, president/CEO, First Financial FCU of Maryland, Lutherville, Md.; and
  • Secretary--Theresa Mann, president/CEO, The Partnership FCU, Arlington, Va.
Windsor and Mann were re-elected by acclamation. Kathleen Geary, CEO of HEW FCU, was elected to a three-year term on the board.

CU System briefs (07/28/2012)

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  • MUNCIE, Ind. (7/30/12)--Stanley Dewayne Wills, 33, of Muncie, Ind., was convicted by a jury Thursday of four charges related to the May 2009 armed robbery of Industrial Centre FCU in Muncie.  Wills was allegedly one of two masked men who held employees of the credit union at gunpoint. The men escaped with $250,000. He was charged with armed robbery, conspiracy to commit armed robbery, theft and criminal confinement (The Star Press July 27). Co-defendant John Repass, 37, testified he and Wills were the robbers, while Wills maintained he played no role in the robbery. In separate proceedings, Wills was deemed as a habitual offender, which could add up to 12 years to his sentence. Sentencing has been set for Aug. 23 …
  • WESTERVILLE, Ohio (7/30/12)--Tara Neiswonger has been appointed president/CEO of Education First CU, an $86 million asset credit union based in Westerville, Ohio, the credit union's board announced last week.  The appointment is effective immediately.  Neiswonger has served 12 years as Education First's chief financial officer (CFO). She succeeds Richard Maslyk, who retired as president/CEO at the end of June after serving the credit union for 15 years. Neiswonger has 18 years' experience in the financial services industry.  She worked three years at Society National Bank before joining the credit union movement in 1994 as an accountant at BMI FCU. She joined MidState Educators (now Education First CU) in 1998 as a senior accountant. Neiswonger has been CFO since 2002 …
  • RANCHO CUCAMONGA, Calif. (7/30/12)--CO-OP Financial Services has promoted Caroline Willard to the position of executive vice president, markets and strategy.  She will report to President/CEO Stan Hollen. Willard's duties include strategic planning, product development, marketing and market research, and the company's push into emerging technologies. Willard has more than 25 years of marketing and strategic planning experience, half of them in the credit union movement. She joined CO-OP Financial Services in July 2006 as vice president, corporate development, and was promoted in July 2006 to senior vice president, business development and marketing. Before joining CO-OP Financial Services, Willard spent five years on the executive team of American First CU, La Habra, Calif. …
  • ST. JOHN'S, Newfoundland (7/30/12)--Verafin Inc., a provider of fraud detection and anti-money laundering software FRAML, nabbed three awards highlighting successful businesses in Atlantic Canada. Verafin placed seventh on Progress Magazine's annual list of Atlantic Canada's Best Places to Work. Jamie King, Verafin's president/CEO, was named listed in Atlantic Business Magazine's Top 50 CEOs for 2012. The company also was also chosen as Exporter of the Year by the Government of Newfoundland and Labrador's Department of Innovation, Business and Rural Development. Verafin is a CUNA Strategic Services provider

Mobility devices affect productivity

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MADISON, Wis. (7/30/12)--Mobile devices to provide support and enhance worker productivity are a critical priority of 65% of enterprises in North America and Europe, according to a report issued in April.

While some credit unions are already jumping on the mobile bandwagon for members' convenience, they may get an added benefit from these in terms of employees' productivity.

The April survey conducted by Chris Shea of Forrester Research found that 65% percentage figure to be a 15% increase from 2011.

The top five benefits of mobile technology for enterprise and small-to-medium organizations, according to Forrester are:

  • Increased worker productivity (75%);
  • Better responsiveness and decision-making speed (65%);
  • Faster resolution of customer issues (48%);
  • Quicker resolution of internal information technology issues (48%); and
  • Improved customer satisfaction (42%).
A major trend is the rise of the use of tablets. In December alone, the percentage of people who own tablets jumped to 19% from 11%, according to Pew Research. 

Mobile banking and devices are in the news daily. For example, Bank of America (BofA) Thursday unveiled its mobile check-deposit product (American Banker July 26). Currently available on the iPad, Mobile Check Deposit will coming on other devices soon, BofA said.  In Thursday's announcement, the bank also said person-to-person mobile payments will be available in the bank's mobile apps for several devices.

Credit unions and credit union organizations already involved in using mobile technology include:

  • CU*Answers, a credit union service organization (CUSO), which partnered with Tennessee-based CU Mobile Apps. CU*Answers will integrate CU Mobile Apps' smartphone mobile banking application with the It's Me 247 online and mobile banking suite. CU Mobile Apps is the most recent product offered by Member Service Solutions LLC, a provider of insurance and financial solutions for credit unions and financial institutions (News Now June 25).
  • Wescom Resources Group (WRG), a CUSO that provides software and technology service solutions, will offer the Online Banking Solutions' (OBS) Messenger Financial Center to deliver business information and payment services online to its clients. In turn, OBS will offer WRG's MemberEdge electronic banking suite for consumers to credit unions implementing the OBS Messenger Financial Center. OBS Messenger Financial Center is a business e-banking platform supporting real-time account and transaction reporting, e-statement delivery, stop payments, positive pay, account transfers and payment initiation of automated clearinghouse transactions and wire transfers.The OBS Messenger Mobile Banking partner product delivers information and payment services through the mobile channel (News Now June 26).
  • University FCU, Austin, Texas, has registered its 20,000th member for mobile banking, achieving 25% adoption in the first nine months, according to mFoundry, a mobile banking and payments provider. University FCU also is processing more than $2 million mobile deposits per month, mFoundry said (News Now July 13).
  • Oceanside (N.Y.) Christopher FCU, The Catholic Credit Union, announced July 20 that it is accepting entries through Tuesday in its First-Ever Mobile Banking Sweepstakes. One grand prize winner will be named in August and receive a New iPad with Wi-Fi, a $500 retail value.
  • With the launch of its Mobile Solutions portfolio, Texas Trust CU's members will conduct secure financial business remotely through the use of a mobile phone (PRWeb July 19). The Texas Trust Mobile App is the first of many mobile banking services the credit union plans to launch within the next year. With the Texas Trust Mobile App, members of the $726 million asset Mansfield, Texas-based credit union can access account information, check account balances, transfer money between accounts, view their transaction history, and search for surcharge-free ATMs from just about anywhere, anytime, the credit union said.

Tri County Area FCU joins FHLB Pittsburgh

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PITTSBURGH (7/30/12)--Tri County Area FCU in Pottstown, Pa., is the newest member to join the Federal Home Loan Bank of Pittsburgh (FHLBank).

Tri-County becomes the 26th credit union member of FHLBank Pittsburgh--a three-state financial institution cooperative comprising credit unions, thrifts, commercial banks and insurance companies in Delaware, Pennsylvania and West Virginia (Real Estate Weekly News Aug. 3).

Membership in the privately funded FHLBank Pittsburgh augments Tri-County's liquidity with access to FHLBank's financial services such as low-cost loans (advances), which the credit union can use for general asset/liability management and financing, and community lending, the News said.

The $109.3 million asset Tri County Area FCU serves more than 16,000 members working  in 41 townships and boroughs in three counties.

CU taps social media power on grant to nonprofits

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MILWAUKIE, Ore. (7/30/12)--More than 66,000 public votes were cast on Milwaukie, Ore.-based Avantis CU's Facebook page and website to prioritize and allocate its $50,000 Advantis Grow Community Fund grants to nonprofits.

The public was asked to vote on 12 proposed projects aimed at providing long-term benefits to the community.   

Based on the votes, the $928 million asset credit union allocated seven grants to help fund:

  • A shelter for abused women and children; 
  • Equipment for serving hot meals to those in need;
  • Computers to deliver educational services to more than 80 at-risk children;
  • Shower facilities for more than 2,400 homeless people at a rescue mission;
  • New computers to better serve at-risk youth with more robust mentorships;
  • Home-energy diagnostic tools to find solutions for low-income and disabled homeowners; and
  • Equipment for pet food distribution to thousands of low-income pet owners.

Governor signs amended Ill. CU Act gets ovation

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CHICAGO (7/30/12)--Receiving a standing ovation as he did so, Illinois Governor Pat Quinn on Friday signed S.B. 3217, the Illinois Credit Union League's (ICUL) legislative initiative to amend the Illinois Credit Union Act during a meeting of the American Association of Credit Union Leagues (AACUL).

Present for the signing of S.B. 3217 by Illinois Governor Patrick Quinn (center) were Dan Plauda, right, Illinois Credit Union League (ICUL) president/CEO, and Keith Sias, left ICUL vice president, state governmental affairs. (Photo provided by the Illinois Credit Union League)
Signing of the bill, now known as Public Act 97-0855, took place at AACUL's  summer meeting at the Peninsula Hotel in Chicago in front of 150 credit union leaders from across the country. They include CEOs of the state credit union associations, senior association executives, and the executive board of the Credit Union National Association (CUNA).

During the Spring 2012 session of the Illinois General Assembly, the bill passed unanimously through both chambers (49-0 by the Illinois Senate on March 22 and 117-0 by the Illinois House on May 24).  The bill clarifies that the surviving credit union in a merger is a successor-in-interest and may enforce mortgages and other loans acquired from the merging credit union.  It also addresses board authority to establish age eligibility voting standards and  membership status if a member doesn't have at least one fully paid share.

Quinn highlighted that he is a huge supporter of credit unions and actually belongs to three. He commended conference attendees for their service to their members and recognized that the credit union industry is a movement of which he is proud to be part.  Quinn also encouraged credit unions to continue providing low-cost financial alternatives to consumers and to be a part of the economic recovery. In closing, he signed S.B. 3217 and received a standing ovation from the attendees.

CU System briefs (07/27/2012)

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  • MUNCIE, Ind. (7/27/12)--A Muncie, Ind., man went on trial this week in relation to the theft of $250,000 during a robbery three years ago at Industrial Centre FCU in Muncie. Stanley Dewayne Wills, 33, is charged with robbery, conspiracy to commit robbery, criminal confinement and theft. He faces nearly 32 years in prison. The incident occurred on May 27, 2009. One witness testified the holdup men held a gun so tightly to his forehead it left an indentation. Two other employees testified they believed the two bandits intended to shoot them. Also testifying was Wills' co-defendant, John D. Repass, 27, who pleaded guilty in April 2011 to armed robbery. He is awaiting sentencing (The Star Press July 26) …
  • LEXINGTON, Ky. (7/27/12)--The University of Kentucky FCU in Lexington, Ky., which is celebrating 75 years of service, announced it has reached its 50,000th member. It presented a $500 Visa gift card to the 50,000th member, Justin Epperson, who will attend the university this fall and plans to study electrical engineering. "Reaching 50,000 members is a huge milestone for us, and accomplishing this during our 75th anniversary makes it that much better," said David Kennedy, president/CEO of the credit union.  "We've enjoyed strong membership growth again this year, and we expect that to increase as the year continues.  We hear all the time how our members love us, and we have proven that by our growth and their continued trust in us" he added …
  • HARRISBURG, Pa. (7/27/12)--More Pennsylvania consumers are falling victim to a text messaging scam that has hit mid-state. Thousands have received text messages falsely claiming to be from Harrisburg, Pa.-based Belco Community CU. News Now reported earlier in the month on the scam (News Now July 12), which is now making another round, said WHTM.com (July 24). The scam texts say recipients' debit accounts have been deactivated and urges them to call a number, where a recording prompts them to enter their account number and personal identification number. Both members and nonmembers are receiving the messages. The station posted comments from dozens of viewers from as far away as Hawaii who said they had received them. Belco Community reemphasized that it would never ask members for that type of information. It advised viewers to disregard the messages and call only listed numbers for banks and credit unions …

CU Direct appoints Child as chief of staff

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ONTARIO, Calif. (7/30/12)--CU Direct Corp. has appointed Bob Child as its chief of staff, announced Tony Boutelle, president/CEO of CU Direct, Thursday.

CU Direct Corp. provides lending solutions to credit unions through its CDUL, Lending Insights, Lending 360, CUDL Retail and Vero brands.

Child has more than 20 years of corporate strategy experience in the auto lending and insurance marketplaces, with a focus in product positioning, marketing and program management. He served as chief of staff for Allstate Insurance and Allstate Bank, the second largest auto insurer in the U.S., said CU Direct Corp.

Most recently he was vice president of strategy and business analysis at Aviva Insurance, the second largest auto insurer in Canada and a financial services player in the U.S.

Moorhead merges with Central Minnesota CU

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MOORHEAD and MELROSE, Minn. (7/30/12)--Moorhead (Minn.) FCU, with $6 million in assets, has merged into $657 million asset Central Minnesota CU, Melrose, Minn.

As a result of the merger, Moorhead FCU members will have access to services such as commercial and agricultural loans and other consumer products (InForum July 27).

The former Moorhead FCU branch in Moorhead will remain open.

Membership in Central Minnesota CU is now open to residents of 16 Minnesota counties and two North Dakota counties.

Maine awareness campaign adds channels

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PORTLAND, Maine (7/30/12)--The Maine Credit Union League has stepped up advertising for its Statewide Awareness Campaign this summer.

The campaign added TV advertising spots in August and September. Advertising will appear during the Summer Olympics, which is airing on state NBC channels, according to the Maine Credit Union League (Weekly Update July 27).

The campaign also is among the sponsors for popular annual events, such as the KahBang Festival in Bangor and the Maine Lobster Festival in Rockland.

A radio campaign, sponsored by league subsidiary Synergent, was launched July 30. The campaign highlights ATMs, shared branching and the "convenience of credit unions" message.

Mobile ads for apps, iPhone and Android also have been placed.

Consumers get their information from a variety of sources, said Debra Trautman, corporate marketing manager for the Maine league.

"We have a solid mix that is designed to reach different audiences," Trautman said. "Our increased mobile presence is having a positive impact as we are seeing new responses and traffic from mobile Yahoo, YouTube, wmtw.com and bangordailynews.com leading to our microsite."

Young and Free Maine accounts grew 9 in June

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PORTLAND, Maine (7/30/12)--free4ME, an account targeted toward 18-25-year-olds that is offered as part of the Young and Free Maine Program, grew 9% in June.

The growth from May to June represents a 2% increase over the average monthly growth rate, according to the Maine Credit Union League (Weekly Update July 27).

Maine credit unions now hold 3,200 free4Me accounts, with 60% of them representing new relationships. Eighteen percent of the account holders have loans with the credit unions.

Since the Young and Free Maine Program was launched in June 2011, the average age of members at participating credit unions has dropped to 45 years old from 47 years old. Those credit unions saw 7.84% growth in 18- to 25-year-old members.

Overall membership of 18- to 25-year-olds in participating credit unions have rose to nearly 10% from 9.2%.

About 60% of Maine credit unions participate in the Young and Free Maine program.

"Maine credit unions have made a significant investment in the Young and Free Program, and we are seeing that it is making a difference," said John Murphy, league president.

NEW Ill. Gov. Quinn signs CU Act update at AACUL

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CHICAGO (Filed 7/27/12 at 1:30 p.m. CT)--Illinois Governor Pat Quinn this morning signed S.B. 3217, the Illinois Credit Union League's (ICUL) legislative initiative to amend the Illinois Credit Union Act.

Present for the signing of S.B. 3217 by Illinois Governor Patrick Quinn (center) were, from left, Dan Plauda, Illinois Credit Union League (ICUL) president/CEO, and Keith Sias, ICUL vice president, state governmental affairs. (Photo provided by the Illinois Credit Union League)
Signing of the bill, now known as Public Act 97-0855, took place at the American Association of Credit Union Leagues' (AACUL) summer meeting at the Peninsula Hotel in Chicago in front of 150 credit union leaders from across the country. They include CEOs of the state credit union associations, senior association executives, and the executive board of the Credit Union National Association (CUNA).

During the Spring 2012 session of the Illinois General Assembly, the bill passed unanimously through both chambers (49-0 by the Illinois Senate on March 22 and 117-0 by the Illinois House on May 24).  The bill clarifies that the surviving credit union in a merger is a successor-in-interest and may enforce mortgages and other loans acquired from the merging credit union.  It also addresses  board authority to establish age eligibility voting standards and  membership status if a member doesn't have at least one fully paid share.

Quinn highlighted that he is a huge supporter of credit unions and actually belongs to three. He commended conference attendees for their service to their members and recognized that the credit union industry is a movement of which he is proud to be part.  Quinn also encouraged credit unions to continue providing low-cost financial alternatives to consumers and to be a part of the economic recovery. In closing, he signed S.B. 3217 and received a standing ovation from the attendees.

CU System briefs (07/26/2012)

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  • MUNCIE, Ind. (7/27/12)--A Muncie, Ind., man went on trial this week in relation to the theft of $250,000 during a robbery three years ago at Industrial Centre FCU in Muncie. Stanley Dewayne Wills, 33, is charged with robbery, conspiracy to commit robbery, criminal confinement and theft. He faces nearly 32 years in prison. The incident occurred on May 27, 2009. One witness testified the holdup men held a gun so tightly to his forehead it left an indentation. Two other employees testified they believed the two bandits intended to shoot them. Also testifying was Wills' co-defendant, John D. Repass, 27, who pleaded guilty in April 2011 to armed robbery. He is awaiting sentencing (The Star Press July 26) …
  • LEXINGTON, Ky. (7/27/12)--The University of Kentucky FCU in Lexington, Ky., which is celebrating 75 years of service, announced it has reached its 50,000th member. It presented a $500 Visa gift card to the 50,000th member, Justin Epperson, who will attend the university this fall and plans to study electrical engineering. "Reaching 50,000 members is a huge milestone for us, and accomplishing this during our 75th anniversary makes it that much better," said David Kennedy, president/CEO of the credit union.  "We've enjoyed strong membership growth again this year, and we expect that to increase as the year continues.  We hear all the time how our members love us, and we have proven that by our growth and their continued trust in us" he added …
  • HARRISBURG, Pa. (7/27/12)--More Pennsylvania consumers are falling victim to a text messaging scam that has hit mid-state. Thousands have received text messages falsely claiming to be from Harrisburg, Pa.-based Belco Community CU. News Now reported earlier in the month on the scam (News Now July 12), which is now making another round, said WHTM.com (July 24). The scam texts say recipients' debit accounts have been deactivated and urges them to call a number, where a recording prompts them to enter their account number and personal identification number. Both members and nonmembers are receiving the messages. The station posted comments from dozens of viewers from as far away as Hawaii who said they had received them. Belco Community re-emphasized that it would never ask members for that type of information. It advised viewers to disregard the messages and call only listed numbers for banks and credit unions …

Court NCUAs Wall St. bank suits can proceed

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TOPEKA, Kan. (7/27/12)--A U.S. District Court judge in Kansas has given the go-ahead to continue a combined lawsuit filed by the National Credit Union Administration (NCUA) against RBS Securities Inc. and Wachovia Capital Markets Inc. over losses from mortgage-backed securities (MBS) the banks sold to the now defunct U.S. Central FCU and Western Corporate FCU.

The decision by U.S. District Judge Richard D. Rogers of the U.S. District Court for the District of Kansas was filed Wednesday in Topeka. Rogers supported NCUA on two key questions:

  • Whether NCUA had met the statute of limitations requirement in filing the suit with an extension of time, called an "extender clause";  and
  • Whether the agency had provided enough evidence to make a "plausible" claim of misrepresentation by the banks regarding the risk of the securities bought by the corporates.
"NCUA is pleased that the court recognized the central merits of our complaints and allowed the cases to move forward," said NCUA Board Chairman Debbie Matz Thursday. "The Wall Street firms that created and sold these securities materially misrepresented the inherent level of risks to investors," she said.

"We will continue to vigorously pursue these lawsuits, and the others previously filed. As liquidating agent for U.S. Central, NCUA has a duty to maximize recoveries from responsible parties, in order to limit losses to the federally insured credit union system."

The certificates in question were offered and sold to U.S. Central in 2006 and 2007, more than three years before NCUA filed the lawsuit on June 20. 2011. The banks had argued that NCUA had not met the required statute of limitations.

"But plaintiff (NCUA) was not appointed conservator or liquidator of U.S. Central until March 20, 2009 and, therefore, had littleor, as defendants allege, no time to assess whether to bring the claims it brings here, unless the time to do so was extended," said the judge in his ruling.

Rogers said the extender statute applies in NCUA's case.  "In cases involving ambiguous limitations provisions impacting actions brought by the government, courts generally construe those provisions in favor of the government," he wrote, noting that "when the sovereign elects to subject itself to a statute of limitations, the sovereign is given the benefit of the doubt if the scope of the statute is ambiguous."

Rogers said NCUA had not waited too late to file its suits. "Given the time it apparently took rating agencies to react to the delinquency and default data and the dispute between the parties concerning the time and ease of performing loan-level analysis, the court cannot say that it is irrefutably clear from this data that a reasonably diligent investor would have sufficient notice to file a plausible claim by March 2008," the court said in the ruling.

It also said government agencies such as NCUA could not have known the details of the offerings until after taking an entity into conservatorship, and the corporates could not have known at the time they purchased the securities that there were potential misstatements of fact or omissions of facts in the offering documents.

The court denied the banks' motion for dismissal of all of NCUA's arguments--except the agency's claim that credit enhancement statements in prospectus supplements of the MBS offerings were material and untrue representations. "The court does not believe the allegations in the complaint state a plausible claim that the alleged credit enhancement language was untrue and material."

The suit against North Carolina-based Wachovia was tied to actions it took before being taken over by Wells Fargo in a government-arranged sale in 2008.

U.S. Central and WesCorp in 2006 each purchased around $44 million in residential mortgage-backed securities from Wachovia, and U.S. Central bought an additional $112 million in Wachovia-underwritten securities that were originated by a third party, NovaStar Mortgage Funding Trust (News Now April 3).

NCUA has also filed similar lawsuits against Goldman Sachs & Co. and JP Morgan Chase.

N.Y. CUs grow make 695M in MBLs in 1Q

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ALBANY, N.Y. (7/27/12)--New York credit unions' growth rates for assets, savings (shares), members and loans outperformed national averages in the first quarter of 2012 while business loans increased 14.6%.

Credit union assets in the state grew more than 4% to roughly $60.37 million. Savings held at New York credit unions also increased more than 4 % to more than $52.17 million, according to the Credit Union Association of New York (CUANY).

The membership growth rate during the past 12 months for New York credit unions was 2.9%, exceeding the industry average of 1.9%. In the first quarter, more than 56,000 credit union members were added, bringing total membership to a record 4.68 million, said CUANY.

Outstanding business loans at New York credit unions increased 14.6% from March 2011 levels, with credit unions originating $695 million in member business loans in the first three months of 2012. During the same time period, outstanding small business loans at New York banks decreased, according to statistics from Callahan & Associates.

"As the numbers show, New York's credit unions have been doing a great job of working with small businesses to get them the loans they need--especially at a time when the financial crisis of the past few years has resulted in a reduction of available business credit from traditional banking outlets," said William J. Mellin, CUANY president/CEO, Credit Union Association of New York. "Credit unions have proven to be a viable solution to help fill the lending gap--not to mention a less expensive one--for small businesses looking to secure the credit they need to build and grow."

Legislation is currently pending in Congress that would allow credit unions to increase their business lending, and in turn, adding an infusion of much-needed credit into the small business lending market. It's estimated that, if passed, this provision would make approximately $13 billion in capital available and create 140,000 jobs nationwide in the first year at no cost to taxpayers, according to statistics from the Credit Union National Association (CUNA) .

"While this legislation would stimulate the economy, banks--which control about 95% of the business lending market--have been fiercely fighting its passage," Mellin said. "I strongly believe that the time has come for Congress to pass this bill for the good of our country's economy."

CUNA and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%.

Mass. league endorses Elizabeth Warren for Senate

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Massachusetts Credit Union League Board members and supporters pose with Elizabeth Warren in announcing the league's endorsement of her U.S. Senate candidacy. From left are Kathy Hutchinson, president/CEO of UMass 5 College CU; Judy Fredenberg, member Worcester CU; C. David Surface, president/CEO of St. Jean's CU; Mary Ann Clancy, general counsel and senior vice president, legislative affairs; Eugene Foley, president/CEO Harvard University Employees CU; Warren; David Plantier, president/ CEO, Mass Mutual Employees FCU; and David L'Ecuyer, president/CEO, Central One FCU.  (Photo provided by the Massachusetts Credit Union League)
WORCESTER, Mass. (7/27/12)--The Massachusetts Credit Union League Wednesday endorsed Elizabeth Warren in the U.S. Senate race in Massachusetts, saying that she will be a strong advocate to promote a level playing field for credit unions.

"Elizabeth Warren has been a strong and vocal proponent of the benefits that credit unions provide to working families across the Commonwealth and around the country," said Daniel F. Egan Jr., league president."It is our hope and expectation that Elizabeth will be a United States Senator who will ensure that credit unions and their members have an advocate in the Senate because the big banks in this country already have enough of them."

There are more than 200 credit unions in Massachusetts with over 2.5 million members, the league said.

"I'm honored to receive the endorsement of the Massachusetts Credit Union League," Warren said. "Credit unions have played a crucial role in the development of the middle class, both across America and within Massachusetts. The league and the credit unions that compose it provide valuable services to their communities. Credit unions serve their members more than viewing them as a source of revenue. That's why it's important to level the playing field for credit unions and the hard-working Americans who rely on their services."

Warren left the Consumer Financial Protection Bureau (CFPB) as special adviser to U.S. Treasury Secretary Tim Geithner on Aug. 1. Warren was long thought to be the frontrunner for the CFPB's top post, but a number of key Republicans opposed her for the CFPB position, raising doubts about her nomination clearing the U.S. Senate confirmation process (News Now July 28, 2011).

CUs Go for the Gold in time for Olympics

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MADISON, Wis. (7/27/12)--While Visa announced it is earmarking more than a quarter of its marketing budget this year to Olympics sponsorship in London, several credit unions are running promotions and activities of their own tied to the Summer Olympics. The Olympics opens today.

Some of them are:

  • Fulda (Minn.) Area CU, with $65.4 million in assets, invites all youth under 18 years of age to participate in a Free '"Go For The Gold"' Olympic-themed event Saturday. Kids can participate in carnival games, activity games and a Wii four-circuit event, create their own Olympic Medal and win door prizes. The first 100 youth in attendance will receive a Fulda Area CU water bottle. Participants in the events will be divided into several age groups. Each event will award a gold, silver and bronze medal in each age group.
  • Fairwinds CU in Orlando, Fla., ran a Visa promotion in April and May for a member to win a trip to the Summer Olympics in London (CU Insight July 24). Members of the $1.58 billion asset credit union garnered more chances to win, the more they used their Visa card.
  • VyStar CU, a $4.39 billion asset credit union based in Jacksonville, Fla., also is running a Visa credit card promotion through Aug. 31. VyStar plans to conduct the promotion every four years starting in 2016, with a different grand prize winner and guest going to each Summer Olympics (CU Insight July 24).
  • Mutual Savings CU, based in Atlanta with $68 million is assets, is making comparisons between its products and services and various aspect of the Olympics.  For example: "The 2012 summer Olympics will begin in London in the coming days. Athletes that have trained for the majority of their lives will gather to compete on the world's highest stage. Your financial path is very similar to that of an Olympic athlete and with Mutual Savings CU, you can achieve your peak performance. Let's take a closer look at the similarities."
  • Kelly Community FCU in Tyler, Texas, with $81.5 million assets, conducted a "Loan Olympics" from April through June, in which members who referred a current member or nonmember for an auto loan through the credit union received $100 as an award" (CU Insight July 24).
  • San Jose (Calif.) CU in July and August adopted an Olympic theme for it Kid$ Day$ promotions (CU Insight July 24). Kids can come to the $138 million asset credit union, which is decorated with an Olympic motif, and participate in Olympic-themed activities while learning about finances.
  • Timothy Cannon, president/CEO of 1st CU in Gainesville, Fla., with $47.9 million in assets, will attend the Summer Olympics in London his wife and two daughters (OCLA.com July 22).

CUNA council white paper discusses juggling priorities

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MADISON, Wis. (7/27/12)--The operations and branch managers who keep credit unions' branch operations in motion typically are experts in juggling priorities, according to a new CUNA Operations Sales & Service Council white paper.

"Juggling Priorities in Branch Operations Management" is based on information gathered from a variety of sources, including six operations and branch managers at four credit unions.

The white paper explores the tactics used by managers to balance multiple demands. For example, operations and branch managers must meet member needs, nurture employees, reinvent processes, pursue strategic goals, introduce new initiatives and serve a critical role on special teams and task forces.

Operations and branch managers alike play a pivotal role in driving significant changes within the credit union, said the paper. In some cases, they may help drive these changes as part of teams working on special projects that impact culture, compensation, products and services, and front-line operations. In other situations, they are responsible for helping employees adopt changes in their daily work life based on initiatives driven by other managers, the executive suite or the board. In either scenario, they play a key role in making sure that plans turn into reality in day-to-day operations, the paper said.

"You have to be a visionary person who isn't stuck on 'the way we've always done it,'" said Laura Enquist, director of branches at $1.6 billion asset Spokane (Wash.) Teachers CU. At the same time, managers must be willing to make adjustments to new ideas until they work, or even abandon them if they don't improve.

The responsibilities of branch operations managers and branch managers also can vary, depending on the size and organization of their credit union. At smaller credit unions, a branch manager may even double as the branch operations manager. Small to mid-size credit unions may also combine the operation manager's role with other responsibilities, such as collections or compliance.

Operations and branch managers interviewed for the white paper said they believe the branch will survive the increasing emphasis on electronic interaction because members still want and need face-to-face interaction in some situations. At the same time, these managers recognize that as the number of branch transactions declines, the role of the branch will evolve to focus on relationships.

Finding the right balance will be crucial as operations and branch managers work to satisfy day-to-day demands with long-term priorities, the paper said.

"You're always going to have more than you can do on your priority list," said Marshall Pipkin, branch manager at $749 million asset Firstmark CU, San Antonio. "Be strategic in the ones you decide to attack."

Virginia CUs resilient in earnings growth

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LYNCHBURG, Va. (7/27/12)--Virginia-based credit unions advanced in virtually every aspect of their operations in the first quarter, with improved earnings and loan growth leading the surge.

"Virginia's credit unions continue their good work to serve the needs of their members," said Virginia Credit Union League President Rick Pillow. "The good news is that more consumers are discovering the benefits of credit union membership. With money to lend, better rates and service, and far fewer fees, credit unions are the consumer-friendly alternative to the nation's for-profit banks."

Virginia-based credit unions added 41,900 new members and 68,000 new share draft/checking accounts during the quarter. In the first quarter of the previous 10 years, the state's credit unions added an average of 26,000 new share draft/checking accounts.

During the six months ended March 2012, the state's credit unions added 141,000 new members, a rise fueled by Bank Transfer Day and positive media coverage throughout 2011.

Net income (return on assets) for state's credit unions was 1.21%, exceeding the national average of 0.83%. Virginia's first-quarter net-income figure reflected a four basis-point slip from the fourth quarter of 2011.

On the lending front, loan growth for the year ended March 2012, was fueled by spikes in credit card lending (12%), member business loans (MBL) (10%), and used auto loans (8%).

Nearly one-quarter of Virginia's 184 credit unions offer MBLs, representing balances of $810 million. Nationally, credit unions hold $39.7 billion in MBLs.

The Credit Union National Association (CUNA) and credit unions have been urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

Commercial banks still hold a majority of U.S. business loans, but the nation's credit unions are approving a higher percentage of loan applications, according to the Biz2Credit's small-business lending index.

Credit unions approved nearly 56% of such applications last month, compared with 47.5% approval among banks with less than $10 billion in assets. The study found bigger banks approved 11.1% of such applications.

Savings growth among Virginia credit unions continued to be concentrated in short-term, liquid accounts. Share draft/checking balances rose by 14% in the year ended March 2012, with regular shares and money market accounts logging 12% and 9% increases. Individual retirement account balances saw a small rise of 4% over the past year.

Virginia-based credit unions' delinquency and charge-off rates both stood at 1.08%. Delinquency and charge-off rates for state's banks are 2.48% and 1.96%, respectively.

Former mayor pleads guilty to defrauding CU

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TOOELE, Utah (7/27/12)--The former mayor of a Utah city pleaded guilty Monday to one count of felony bank fraud against a credit union.

Eric. A. Richardson, the former mayor of Cedar Hills, was charged in an equity skimming scheme involving HeritageWest CU, Salt Lake City. Heritage West CU is a division of Chartway FCU, based in Virginia Beach, Va.

"HeritageWest has cooperated fully with this investigation and we are pleased to hear that Mr. Richardson has accepted responsibility for his actions," said Bruce Bryan, regional president of HeritageWest.  "Our members should be assured that HeritageWest was an innocent victim in this scam, and that the credit union suffered no financial loss." 

Richardson resigned from his mayoral post two days before federal charges were filed against him in the U.S. District Court for Utah for allegedly submitting a vehicle loan application containing false information, with the intention of skimming money for other uses (The Salt Lake Tribune July 25)

Richardson allegedly signed a blank vehicle loan application in 2010 for $57,144.90 to purchase a 2009 Range Rover. He claimed a monthly income of $15,000 from a firm with which he was no longer associated, according to the court documents. The actual sales price of the vehicle was less than the loan. Richardson allegedly worked in partnership with convicted scammer Christopher D. Hales.

In pleading guilty, Richardson will receive a prison sentence of a year and a day, though the final amount of prison time is to be decided by U.S. District Judge David Nuffer. Richardson is to be sentenced Nov. 14, according to Heritage West CU.

CU System briefs (07/25/2012)

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  • HARRISBURG, Pa.(7/26/12)--An Adopt-A-Highway cleanup on a recent Saturday gave employees of Chalfont, Pa.-based Merck Sharp & Dohme FCU, a chance to show how a credit union will go an extra mile in its mission of People Helping People, said the Pennsylvania Credit Union Association (Life is a Highway July 25). During its cleanup, an employee discovered a padded bag in some brush. The bag contained an original birth certificate and a newly issued Social Security card.  On Monday, staff did some research and contacted the contents' owner--a 20-year-old woman who said her laptop was stolen recently.  The young woman's mother said, "Thank goodness someone responsible stumbled on this. We're very grateful."  …
  • SAN ANTONIO (7/26/12)--Security Service FCU announced its loans have surpassed the $6 billion milestone and its membership has grown to more than 900,000 members. Both consumer and business loans increased, with auto loans leading the pack.  The $6.7 billion asset credit union attributed the growth over the years to excellent member service, affordable products and convenient service delivery channels …
  • BLOOMINGTON, Ind. (7/26/12)--Howard "Rick" Warnick, retired president of Bloomington, Ind.-based WEPCO FCU, died Monday  at  Western Regional Medical Center in Cumberland, Ind. He was 58. He is survived by two sisters and several nieces and nephews. A graveside service was conducted Wednesday. (The Cumberland Times-News July 23) …

BECU combats fraud earns media attention

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FEDERAL WAY, Wash. (7/26/12)--A large credit union's efforts to combat fraud puts it on the forefront of law enforcement cases but also gains national media attention, and that sometimes leaves a mistaken impression in the public's perception, says the Northwest Credit Union Association (NWCUA).

Case in point:  In June, Tukwila, Wash.-based BECU was reported prominently in local and national media outlets when a Dutch man was charged with stealing 44,000 credit card numbers.  Only some of the numbers belonged to BECU's members. But local media reported it in headlines such as "Dutch man charged with stealing BECU credit cards," which was oversimplified and not quite accurate, said NWCUA (Anthem July 17).

Only a handful of stolen card numbers in that case were connected to BECU, John Snodgrass, security risk manager at the nearly $10 billion asset credit union, told NWCUA.  BECU's name showed up in the police report because of its proactive, hands-on approach to identifying and preventing fraud and identity theft.  BECU's name is unfairly connected to fraud cases in instances where it is part of the solution but not at fault in the breach itself, Snodgrass said.

The credit union spends considerable time analyzing cases. If there are at least two cases that arrive with like charges, "we start looking for a common point of compromise at that point," Snodgrass told the association.  The credit union takes the approach "that if we can identify it up front, then we can identify the window of exposure, and once we know the window of exposure, we can have our monitoring system start to look for these kinds of frauds and catch them early as opposed to five, six, seven charges down the line," he said.

As a result, the credit union works a lot with law enforcement on a number of levels, including the Secret Service's Electronic Crimes Task Force.  "Our relationships have built up to the point now with law enforcement that they will take our cases," he told NWCUA.  "They know that we've done our research, and they will investigate it, I would say 99% of the time."

BECU then sends the task force a list of victims and suspected breach points. "As a result, we tend to be on the forefront on a lot of these things, which is why our name is listed so prominently in some of these case filings."

Snodgrass noted that three major skimmers (people who insert devices on ATMs and gas pumps that collect information such as personal identification numbers keyed in to the devices) were arrested recently partly due to BECU's security team.  

The devices weren't just on BECU machines, they were on other financial institutions' devices as well, said Todd Pietszch, a spokesperson at BECU. Because BECU was the one working with law enforcement, its name appeared in police reports and became public information.

Visa shares conversion CUs wont see major impact

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SAN FRANCISCO (7/26/12)--Visa is adding $150 million to a litigation escrow by converting some of its Class B shares held by credit unions and banks to help fund its share of liabilities in the aftermath of a proposed $6.05 billion settlement announced earlier this month. The move will affect credit unions, but should not have a major impact.

"My sense is there is an impact on credit unions, but not a major one," Scott Waite, senior vice president/chief financial officer for Patelco CU in Pleasanton, Calif., told News Now. Waite also is the Credit Union National Association's accounting subcommittee chair. 

Visa, MasterCard and several large banks, defendants in a lawsuit brought by groups of merchants and their trade associations, on July 13 agreed to pay billions to merchants to settle a long-standing credit card interchange fee class action lawsuit. In addition, the settlement requires a reduction in credit card interchange rate fees (IRF) of 10 basis points for an eight-month period, likely beginning in mid-2013 (News Now July 16).

The rate reduction applies to all card issuers, including credit unions. Visa's newest deposit elevates the amount in its escrow fund to $4.4 billion--which is its share of payments to be given to merchants under the terms of the pending deal.

Created as part of Visa's 2008 initial public offering, the escrow is tied to its Class B shares held by credit unions and banks that issue cards for the payment network. Those financial institutions are responsible for providing funds for the account, which protects Visa's Class A shareholders from liability. 

VISA intends to take a $4.1 billion charge for the second quarter to formally reserve its part of the deal, which still needs court approval. 

There are essentially three areas of impact, Waite explained.

The first is that there will be a 10-basis-point reduction in credit card interchange income. Visa's move will impact credit cards, not debit cards, Waite emphasized. "Credit unions probably see more purchase volume on debit than credit because most members use debit cards," he added.  

So if a credit union has $10 million per month in purchase volume, with the reduction taking place for eight months in 2013, once the settlement is finalized, there would be $80 million in purchase volume with a loss of $80,000 in interchange income ($80 million x 10 basis points = $80,000 in loss of revenue for a credit union), he said. Most earn over 1.35%, so they still would recognize $1 million net in income on the purchase volume.

The second impact: There's further erosion in the conversion rate of the Class B stock that credit unions own. "Credit unions have that stock, but they can't get their hands on it until Visa is done with the litigation," Waite explained. "So credit unions cannot cash out until 2015."

Currently credit unions' Visa Class B stock redemption rate is valued at 42.5%. The $150 million that Visa is converting and putting into escrow will further reduce that percentage, Waite said. However, the litigation escrow account already has $4 billion-plus in it. That amount over the past few years is what had driven the redemption rate to 43% from 100%.  So 57% already has been devalued because it's in the litigation escrow, Waite said. 

"So the additional $150 million on top of the $4 billion already there won't drop the conversion rate much more--from 42.5% to 42%," he added. "Visa hasn't announced the official number yet, but it will be announced soon. The upshot is the value of the Class B Stock-- once credit unions get it--will be worth less."

The third impact is that the remaining value of that Class B stock still can be used for future litigation settlements--until this particular litigation has been resolved or until any other pending litigation has been resolved, Waite said.

"The big picture is we have to continue to wait and see what the stock will be worth, if anything, in the end," he concluded.

CO-OP to CUs BofA ATM cutbacks provide opportunity

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RANCHO CUCAMONGA, Calif. (7/26/12)--With Bank of America shutting down 9% of its ATM fleet, "credit unions should jump at the opportunity to get the message across" that they offer more convenience with access to nearly 30,000 surcharge-free ATMs, said CO-OP Financial Services, which is developing a new ad campaign to tout credit unions' ATMs.

The Charlotte, N.C.-based BofA said in a regulatory filing it has shut down 1,500 ATMs this year, leaving it with 16,200 ATMs as of the end of June (Los Angeles Times July 24).

BofA's cutback is "pretty significant" and "is more than just a cost-cutting measure," said Kimberly Hester, executive vice president of network services at Rancho Cucamonga, Calif.-based CO-OP Financial Services. "This shows that BofA is going in a different direction than the past of touting convenience," she told News Now.

The cutback puts BofA behind JPMorgan Chase & Co, which has more than 18,000 ATMs. Neither has as many as credit unions' ATM network, she added.

Most of the cutbacks are in off-premise ATMs located at malls and where shops are located.  CO-OP Network has off-premises ATMs too--at 7-Eleven, Costco and Walgreen's locations. "BofA is moving away from these to having full-service ATMs just at their branches. They look at it as an expense. We look at it as a convenience," Hester said.

"The bank is going after consumers with higher balances and who have more services with the bank and can make the bank a profit. It is serving less the people who need to access cash and who are less profitable," she added.

"We need to tout the opportunities and highlight the power of cooperation and advantages [of credit union surcharge-free ATMs] to consumers so they become [credit union] members," she said.  "We may have another Bank Transfer Day when consumers realize they are getting fewer convenience services. The banks are taking away, while the consumers keep giving back."

BofA's  cutback "is not  a beginning of a trend;  it's a continuation of a trend."  She noted that credit unions certainly won't follow suit in cutting out ATMs.  "It's an excellent opportunity to highlight the competitive advantage" of credit unions.  Of the surcharge-free credit unions CO-OP has in credit unions and in retail spaces, 9,000 take deposits.

"CO-OP has a brand new, free consumer marketing campaign promoting the convenience of its 30,000 ATMs.  Clients can access the campaign materials on CO-OP's Ad Lab next week," she told News Now.

Use the resource link below next week to check for it. At the top of the home page, in the red bar, hover over "For You" and click on "Marketing/Ad Lab" on the drop-down menu. Users will see a catalog of available materials and can click thumbnails of each campaign.  If they click to download, they will be prompted for their extranet user ID and password.

Study Families struggling financial plans help

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WASHINGTON (7/26/12)--The recent recession has left more Americans struggling to make ends meet, but those with a financial plan are more confident they can meet the challenges than they were 15 years ago, according to a new report released by the Consumer Federation of America (CFA) and Certified Financial Planner Board of Standards Inc.

According to several measures of financial well-being, those with a financial plan report feeling better about their situation than those without one:

  • By a margin of 50% to 32% and for all but the lowest income bracket (under $25,000) where few have a comprehensive plan, those with a financial plan are more likely to say they are on pace to meet all of their financial goals, such as saving for retirement or for emergencies;
  • By an even wider margin of 52% to 30% and across all income brackets, planners are more likely to feel "very confident" about managing money, savings and investments than nonplanners;
  • By a margin of 48% to 22%, planners are more likely to describe themselves as living comfortably; in addition, as many planners in the $50,000-$99,999 income bracket say that they live comfortably as non-planners in the $100,000 and above bracket.
The percentage of American families who have made a comprehensive financial plan--either on their own or with professional help--has not changed significantly from 15 years ago. Overall, 31% of decision-makers today report have ever put together a plan. About 35% report having a plan to save for emergencies, down from 39% in 1997.

Like its predecessor, the new survey asked decision‐makers about their saving and investments in six specific categories. (See table.) Fewer people today report having saved toward one or more of their goals than did so 15 years ago (80% vs. 84%).

Click to view larger image Click for larger view
Most American families have a financial plan in place to help accomplish their savings goals, but few have ever put together the kind of detailed financial plan that money management experts recommend, said the report. When asked if they were implementing a plan to meet savings goals in six specific areas, 65% say they follow a plan for at least one of their savings goals.

Against the backdrop of a fluctuating stock market, a larger share of non-retired respondents report that they are behind on saving for retirement than did so in 1997. Today, about half of non-retired respondents, compared with 38% in 1997, say they are behind or should have already stared saving for retirement.

For the full report, use the link.

Financially challenged seniors will look to CUs--experts

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MADISON, Wis. (7/26/12)--A new study from AARP that found Americans age 50 and older are carrying more mortgage debt than ever before has repercussions for credit unions, experts say.

As of December, about 3.5 million mortgage loans held by people age 50 and older were underwater--they owe more than their home is worth, according to the study (News Now June 20). That means more seniors have no equity in their homes, which has long been considered as a source of financial security for the elderly.

Because the age of the average credit union member tilts toward this demographic some credit unions may be surprised how many of their members are at least on the edge of the group noted in the study, said Mike Schenk, Credit Union National Association (CUNA) vice president of economics and statistics.

"Credit unions might consider reaching out to older members--those with a mortgage at the credit unions and other older members that may have a mortgage elsewhere--to proactively offer financial counseling services," said Schenk.

Paying off a mortgage is especially critical for seniors because it affects the percentage of working income needed in retirement that financial planners so often quote, said Mark Lynch, a credit union consultant and REAL Solutions field coach, who is developing a retirement planning fair for the National Credit Union Foundation.

Seniors with high or underwater balances will require retirement incomes equal to nearly 100% of the working incomes, Lynch said.

"The best advice going forward is that credit unions should do whatever they can to help their members plan for retirement as early as possible," Lynch said.

With wealth lost as a result of the recession, financial planning is more important than ever, he added.

Among the policy solutions the study suggested was mediation, which often leads to loan modification.

"Credit unions have shown the ability or willingness to help borrowers explore options to foreclosure, including the policy solutions suggested in the paper, such as mediation, counseling and loan modifications," Schenk said.

Schenk noted that credit unions are usually agreeable with extending terms but would generally strongly object to any policy that would require principal reduction as a modification tool.

Former CU ad spokesperson Chad Everett dies

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LOS ANGELES and MADISON, Wis. (7/26/12)--Actor Chad Everett, who died Tuesday, was one of the celebrity spokespersons in the Credit Union National Association's (CUNA's) National Advertising Program during the mid-1970s.

Everett, 75,  was star of the 1970s TV series "Medical Center" as well as films and TV shows such as "Mulholland Drive" and "Melrose Place," said Associated Press (July 25).  He appeared most recently in the TV series "Castle."

The National Advertising Program ran from 1972 to 1999 and was supported by the state credit union leagues and associations. The program ads featuring Everett were created in 1973 and 1974 and, delivered the message: "Credit unions: It's Where You Belong."  He appeared in print ads, television commercials, national magazines, and brochures , urging consumers to "Join a CU. It's Where You Belong."

Former "Medical Center" star Chad Everett and Nurse Chris Hutson, a technical adviser on the program, helped credit unions celebrate International Credit Union Week in 1969 with its theme, "We Care, We Share." They were pictured taking up a collection for what was then called the CUNA International Foundation.  Everett died Tuesday at the age of 75. (CUNA photo)
Some of the lines he appeared with:

  • "My credit union taught me something you should know if you ever borrow money." (The lesson was not to compare apples and oranges in getting a loan.)
  • "Here's why a credit union is the best financial partner you can have."
  • "In times like these, your credit union can make a real difference."
Everett also helped celebrate International Credit Union Week in 1969 when he posed with a technical adviser to the "Medical Center"  program . They were shown collecting funds for the CUNA International Foundation, which aided in spreading the credit union idea around the world through charitable, scientific and educational activities.  The program's medical focus fit in with the week's theme that year--"We Care, We Share."

During his more than 40 years' acting, Everett guest starred on series such as "The Love Boat," "Murder, She Wrote," and "Without a Trace."  His film credits include "The Jigsaw Murders," "The Firechasers" and a remake of  "Psycho."

He died at his home in Los Angeles after a long battle with lung cancer.

Two New Hampshire CUs plan merger

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PORTSMOUTH, N.H. (7/26/12)--Two credit unions in New Hampshire have announced plans to merge, pending approval from regulators and members.

Berlin-based Woodlands CU, with $107 million in assets, will merge with Portsmouth-based Northeast CU, a $720 million asset credit union. Northeast will be the surviving credit union.

The combined credit union will have a combined $872 million in assets and 90,000 members served by 14 branches, with a 15th in the works (New Hampshire Union Leader July 24).

Northeast CU President/CEO Peter J. Kavalauskas will continue in that position and Woodlands CEO Timothy J. Collia will become executive vice president and chief operating officer of Northeast.

Kavalauskas told the Union Leader that the merger discussions began about a year ago. The credit unions hope to develop back office efficiencies and provide more and better services to the combined membership through the efficiencies, he said.

The merger is expected to be completed later in 2012. The credit unions will need approval from the National Credit Union Administration, the New Hampshire Banking Department, and Woodlands' membership (seacoastonline.com July 24).

NCUAs MFOEL letter reassuring CUNA Mutual

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MADISON, Wis. (7/25/12)--The National Credit Union Administration's (NCUA) July 20 letter on multi-featured open-end lending (MFOEL) and blending lending brought a reassuring response to credit unions Tuesday from CUNA Mutual Group.

NCUA's letter to federal credit unions confirms regulations that continue to allow MFOEL. However, it limits the amount of information a credit union may gather during the advance request, which will limit the use of MFOEL for some credit unions, CUNA Mutual said.

"The lending regulatory environment is evolving rapidly and more change is expected," said Bill Klewin, CUNA Mutual Group's director of regulatory compliance. "CUNA Mutual has worked with credit unions on lending compliance issues for more than 30 years and provides lending products that ensures compliance," he said.

"We will help credit unions through this change and continue to be here for them as the many new regulations emerge," Klewin said.

The Credit Union National Association and CUNA Mutual Group in February had urged the Consumer Financial Protection Bureau and the NCUA to revisit the regulation of MFOELs and to possibly provide additional guidance on these plans, noting that elements of current regulations were confusing some credit unions. (See RELATED STORY, NCUA offers guidance on multi-featured open-end loans. Use the link).

In its letter, NCUA discussed blended or multi-featured lending (MFL) plans. The agency clarified that open-end and closed-end lending are two distinct regimens and each require their own application, timing requirements and disclosures for the member-borrower.

The letter discussed blended loan programs, which combine open-end and closed-end processes and disclosures. It makes clear such an approach is not the same as a MFOEL program and that it must follow the distinct rules for open-end and closed-end lending, depending on the nature of the transaction, CUNA Mutual said.

CUNA Mutual welcomes the NCUA's efforts to clarify the compliance requirements surrounding MFOEL and blending lending, Klewin said. The company will continue to support credit unions to ensure an effective balance of safety and soundness, member convenience and compliance requirements.

Its products support credit unions' requirements for compliant and efficient lending programs.  "As credit union staff review their lending policies and procedures, we are the dedicated resource to ensure selection of the best approach for credit unions and their members," Klewin said.

Credit unions with LOANLINER-related questions should contact CUNA Mutual at 800-356-5012 or e-mail at loanlinercompliance@cunamutual.com.

Law school profs op-ed on B word supports CU

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MONTPELIER, Vt. (7/25/12)--An op-ed article written by a Vermont  law professor about the battle between the state regulator and Vermont State Employees CU (VSECU) over the credit union's use of "bank" and "banking" in its marketing supports the credit union.

It also points out that the battle over words could really be a battle about taxation.

The state Department of Financial Regulation (DFR), which regulates state-chartered credit unions and banks, issued a notice June 18 of a cease-and-desist order against VSECU, prohibited it  from using the words, saying it was concerned that consumers and members are confused when the credit union uses them.

The $573 million asset VSECU requested a hearing over the matter, which centers on the use of "bank," "banker," "banking co-op," "banking cooperative," or "any other similar sounding word or name." The battle has attracted credit unions' and media attention across the nation (News Now July 19 and 20). 

Donald M. Kreis, associate director and assistant professor of law at the Institute of Energy and the Environment of Vermont Law School, noted in the Vermont Digger Monday that the question "turns on many things. But one thing it should not turn on is the subjective opinion of the commissioner of financial regulation that the legislature lets credit unions get away with not paying a tax he believes they ought to pay."

Kreis was referring to the state's bank franchise tax. He wrote that the ultimate decision-making authority [on the b-word battle] is vested in Financial Regulation Commissioner Steve Kimbell, who has made at least one public comment that "comes dishearteningly close to a suggestion that he would apply the law he is tasked with applying differently if only credit unions would volunteer to pay the franchise tax," said Kreis. The commissioner said the matter of the using the words is one of protecting the consumer so consumers know what kind of financial institution they are dealing with, said the op-ed.

Kreis was quick to point out that credit unions are exempt from the franchise tax in question.  "It's not up to the commissioner of Financial Regulation to determine whether the legislature did the right thing by exempting credit unions from a tax to which investor-owned financial institutions are subject," he wrote.

"On the merits, Kimbell should leave credit unions alone," Kreis wrote. "The plain language of the statute does not preclude credit unions from referring to banks or banking in its promotional materials. Even if the statute is ambiguous, it should be interpreted in a manner that advances its fundamental purpose--which is to protect the public from financial fraudsters, not credit unions," he added.

A credit union is a cooperative and  "the idea that consumers might confuse their local credit union with a financial institution with the word 'bank' in its name is absurd," wrote Kreis.

If the department rules against VSECU, "it will likely engender rather than resolve confusion. This is because federal law grants federally chartered credit unions the right to use the word 'banking' and its variants. The pending case applies only to state-chartered credit unions like VSECU."

"The cooperative difference provides a principled basis for the distinction Kimbell dislikes between credit unions and investor-owned banks when it comes to the bank franchise tax. The levy can, and should, be regarded as a tax on profits that would otherwise go to investors, of which credit unions have precisely none, " Kreis said.

He concluded with a "bitter irony": "the nation's oldest and perhaps its most venerable credit union happens to be in New Hampshire. The name of that state chartered credit union?  St. Mary's Bank."

To read the full article, use the link.

IReutersI Banks wont budge small biz turn to CUs

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CHICAGO (7/25/12)--Credit unions nationwide are increasing their member business lending (MBL) to small businesses, while banks commercial lending has declined, according to a Reuters article Tuesday.  

Eric McCarthy, a Phoenix entrepreneur, needed money to assemble an ice cream business, so he went to several banks, but none would help him.  

"I tried all of the big banks, literally all of them, and was shocked and surprised that I got turned down," McCarthy, who bought four Baskin Robbins stores in his area this spring with a $300,000 loan from Mountain America CU in Salt Lake City, Utah, told Reuters." The big banks didn't want to lend a little money; they wanted to lend a lot of money."

From 2008 through 2011, credit union lending surged 22%, said the article citing statistics from the National Credit Union Administration (NCUA). 

Meanwhile, commercial bank loans that are less than $1 million have dropped by more than 14%, compared with 2008 levels, according to data compiled by the Federal Deposit Insurance Corp. 

However, MBLs constitute only 4% of the roughly $1 trillion total credit union assets nationwide. Many credit unions want provide more MBLs, Reuters pointed out.

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

Debbie Matz, NCUA chairman, told Reuters the cap is "arbitrary."

"Credit unions tend to make very small business loans," she added. "Generally banks don't even make a loan that small," she said, noting the average credit union business loan is about $230,000. "They're filling a very important need for small businesses."

Trust in big banks collapses CUs see largest gain

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CHICAGO (7/25/12)--Only 21% of Americans surveyed trust the financial system, the lowest point on record since March 2009, according to the most recent Chicago Booth/Kellogg School Financial Trust Index. However, trust in credit unions increased, rising to 63% from 58%.  

The overall decrease was largely driven by a drop in trust of big national banks, said the June 2012 report issued Tuesday.

The index measures public opinion over three-month periods to track changes in attitudes. The report is the 15th quarterly update and is based on a survey conducted in June. The previous survey (March) showed that 22% of the population trusted the financial system (PR Newswire July 24).

Key findings from the latest trust index include:

  • Trust in stocks and large companies edged up, while trust in mutual funds dropped to 25% from 28% in March.
  • Most Americans have a neutral view of the stock market, with 80% of survey respondents planning to leave their investments in the stock market unchanged. Also, the fear of a stock market collapse has subsided, with more than half of respondents saying that a drop of more than 30% within the next 12 months is unlikely. (Editor's note: The survey results were released before this week's market slide as a result of economic problems in Europe.)
  • On the employment front, 15% of respondents said they fear losing their jobs in the next 12 months. This is lower than figures reported in the earliest months of the financial crisis (23% in December 2008).  The all-time high of 26% was in March 2010.
"Trust in banks has collapsed," said Paola Sapienza, co-author of the index and the Merrill Lynch Capital Markets research professor of finance at the Kellogg School of Management at Northwestern University.

"Since last quarter's issue of the Financial Trust Index, trust in banks has fallen five percentage points to a low of 27%. It's worth noting that this data was collected in late June, so this drop could be reflective of consumer attitudes toward the news about JP Morgan's multi-billion hedging losses announced in late spring," Sapienza said.

Trust in national banks fell to 23% in the June 2012 report, from 25% in March. Trust in local banks increased to 55% from 51%.

"This suggests that the national banks may be 'too big to trust,' whereas there is still a relatively high level of trust in banks at the community level," said Luigi Zingales, co-author of the index and the Robert R. McCormack Professor of Entrepreneurship and Finance at the University of Chicago Booth School of Business.

Credit unions also have scored high in other national and local surveys on trust, loyalty and member satisfaction studies this year. They include:

  • Credit unions were rated No. 1 in a survey of 5,000 consumers asked to rate the reputation of 34 business sectors in a study conducted by Denver-based Prime Performance (News Now May 14). Credit unions topped all business sectors in reputation with an average reputation score of 5.78 on a seven-point scale with seven as "very good."  They were followed by grocery stores (5.50), and community banks (5.40). Regional banks came in seventh at 5.04 and national banks 18th at 4.15.
  • Credit unions topped the list of U.S. financial institutions in member/customer satisfaction, according to the 2011 Customer Experience with Call Center Representatives Survey by Prime Performance (News Now March 9). Members/customers claim they were more satisfied last year in their interactions with credit union and bank call center representatives than in 2010. Based on a recent interaction with a call center representative, credit union members rated their overall satisfaction with a net score of 83%. The comparable score for small banks is 79%. The industry average is 70%.  Falling below that are: large banks, 66%; Chase, 62%; Wells Fargo, 61%; and Bank of America, 56%.
  • Credit unions were among the top customer satisfaction rankings in Temkin Group's release of its 2012 Temkin Customer Service Ratings, which examines how U.S. consumers rate the customer service of 174 large companies across 18 industries (News Now June 28).
  • A National Cooperative Business Association (NCBA)/Consumer Federation of America (CFA) survey found more Americans think credit unions and other cooperative businesses have the best interests of their members and customers in mind more than do for-profit businesses (News Now May 3). The survey also revealed a favorable view of cooperatives in regards to their business trustworthiness and quality of service. Co-ops received higher marks across the board than for-profit businesses.
  • Credit unions outshone banks in consumers' perceptions of safety and soundness, with 40% of respondents saying they believe credit unions are the safest financial institutions, compared to 34% naming banks (News Now Feb. 23). Nineteen percent of respondents said they trusted both types of institutions equally. The numbers are the results of the 2012 Credit Union National Association (CUNA) National Voter Survey.
  • A CUNA survey in February found that 43% of respondents said credit unions were the best place for consumers to keep their day to day savings and checking accounts (News Now Feb. 22).
The quarterly Financial Trust Index survey is conducted by Social Science Research Solutions as part of its weekly national telephone survey, EXCEL.

Report 1 in 5 consumers considered switch last year

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SAN FRANCISCO (7/25/12)--About one in five checking account holders surveyed considered switching financial institutions in the past year, according to a new Consumer Reports National Research Center survey released Tuesday.

Frustration over increased fees for routine services was the prime reason for wanting to switch, but inconveniences such as transferring automatic transfers kept about half from making the switch, the national survey found.

"Unfair bank practices and rising fees are prompting more and more consumers to consider voting with their feet and taking their money to another bank or credit union," said Suzanne Martindale, staff attorney for Consumers Union, the policy and advocacy arm of Consumer Reports. "But many consumers don't follow through because moving your money takes a lot of time and money, and some bank policies make it harder than it should be. We need to make it easier for consumers to switch banks so they have a real choice when it comes to where to keep their money."

The results would seem to indicate that more consumers are primed to make the switch to credit unions, nine months after Bank Transfer Day, Nov. 5. During the fourth quarter of 2011, credit unions saw an increase of 737,000 checking accounts, according to the Credit Union National Association (CUNA) (News Now March 5).

Overall, credit union membership grew 399,721--to 93,052,509 from 92,652,788 during the fourth quarter, CUNA said.

A Consumers Union report published earlier indicated that when a consumer decides to switch financial institutions, the first thing the consumer usually does is open a new account at another financial institution. This process can take up to two weeks. Next, the consumer transfers any direct deposits and automatic payments out of the old account into the new account. Then the consumer closes the account at the old bank and moves remaining funds into the new account. Obstacles can crop up along the way that can turn into real headaches for consumers, the report said.

Consumers who considered switching were asked to name the top two reasons for wanting to move.

Among the most frequent reasons chosen:

  • 43% cited fee increases for routine services;
  • 38% said another bank was offering better terms; and
  • 26% pointed to poor customer service experiences.
Of those consumers who considered switching banks, more than half said they were hindered from doing so. Survey respondents cited multiple reasons why they didn't switch, including:

  • 63% said that concerns about the trouble it would take to transfer all their automatic payments and deposits to a new account kept them from switching banks;
  • 37% indicated that the process would take too much time and effort to complete; and
  • 28% said they didn't want to pay any fees to transfer their own money.
Consumers Union has called on Congress and the Consumer Financial Protection Bureau to consider reforms making it easier for consumers to move their money and increase competition. The Consumer Reports survey cited policy recommendations would make consumers more likely to switch banks.

Policy recommendations that consumer cited include:

  • Offering free, same-day electronic transfer of funds from the old bank to the new bank would make 47% more likely to switch;
  • Legally requiring banks to reroute all automatic payments or direct deposits to the new account within 14 days would make 37% more likely to move; and
  • Offering a portable account number that they could take with them to a new financial institution, similar to a mobile phone number, would make 32% more likely to switch.
 

Consumers Union also recommended that banks should be required to reduce check holds so consumers can quickly access deposits in new accounts; prohibited from reopening accounts after consumers close them; required to provide customers with clear and accessible account closing procedures; and assessing unfair fees for closing accounts.

CUNA provides interest rate info for Icredit .comI

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MADISON, Wis. (7/25/12)--The Credit Union National Association (CUNA) provided information for a credit.com article Tuesday, explaining to consumers how to determine if they are being offered or are paying for a good interest rates on autos, homes, mortgages and refinancings. 

For auto loans, CUNA's Daily (financial) Rate Comparison indicates the average five-year new-auto loan rate is 3.06% at credit unions versus 4.6% at banks.

The national average four-year used-auto loan rate is 4.34%, according to Informa Reserach Service's July 17 Interest Rate Review, with the highest rate at 11.25%, and the lowest at 1.50%, based on direct fixed-rate loans of $15,000 for two-year-old used-vehicle purchases, with a four-year repayment term.

CUNA also indicates that, as of July 19, the average 30-year fixed conforming mortgage rate is 3.67% through credit unions, and 3.59% with banks.

The national average interest rate is 3.87% according to Bankrate.com.

To read the article, use the link.

Two CUs cite robberies in closing branches

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COLLINSVILLE, Ill. and SIOUX CITY, Iowa (7/25/12)--Two Midwest credit unions--Scott CU, Collinsville, Ill., and Telco Triad Community CU, Sioux City, Iowa--have announced they are closing branches because of multiple robberies.

Citing four robberies within two years, including two within the last five weeks, Scott CU announced the closing of a branch in Cahokia, Ill., on July 13 (stltoday.com July 24). The robberies at that branch were more than those at 14 other branches combined.

Among the issues the credit union's board noted in announcing the closing was that two of the last three robberies involved weapons and the suspects from the last two robberies have not been arrested.

Local authorities told the board the branch location--along a main city thoroughfare near the interstate--invites crime.

In a related robbery, a couple accused of robbing another Scott CU branch, in Belleville, Ill., April 12 was sentenced last week to one year of probation. The couple immediately turned themselves in following the robbery.

Rita Bell, 58, and Jeffrey Bell, 56, each pleaded guilty to felony theft on July 17. The original charges of robbery were dismissed.

At the second credit union announcing a branch closure, Telco Triad Community CU cited four robberies and two attempted robberies in the past four years at its Council Bluffs, Iowa, branch (Omaha.com July 24).

The branch had also experienced a drop off in loans, but safety was the main reason for the closing, CEO Kay Beyerink said.

Some employees had left the credit union because of trauma that resulted from the robberies, Beyerink told the paper.

Fresno faith-based group helps move 750K from banks

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FRESNO, Calif. (7/25/12)--A Fresno, Calif.-based faith group has led the transfer of $750,000 in deposits from Bank of America, Wells Fargo, Citigroup, JPMorgan Chase and Goldman Sachs in the Fresno, Calif. area.

Faith In Community, an interdenominational group, joined with Occupy Fresno to transfer the funds to local communities through credit unions and small banks, the groups said.

A San Francisco faith coalition moved $10 million from Wells Fargo in February, and more groups joined the movement during Lent.

About 50 people rallied at St. Anthony Claret Catholic Church in Fresno Monday. They held signs with names of people who have transferred or will transfer their money from big banks to credit unions or local banks in the Fresno area (Fresno Bee via Thinkprogress.org July 23).

As a result of Bank Transfer Day, Nov. 5, credit union membership grew 399,721--to 93,052,509 from 92,652,788--during the fourth quarter of 2011, according to the Credit Union National Association.

Faith groups were among the biggest activists, moving $55 million from Wall Street banks before last Thanksgiving.

CU System briefs (07/24/2012)

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  • HARRISBURG, Pa. (7/25/12)--A teller at First Area FCU, Lewiston, Pa., thwarted a robbery after a masked man entered the credit union, gave the teller a note asking for money in $20 bills, and said he had a gun.  The startled teller asked the suspect for an account number. The question took him off guard and he got spooked and ran from the credit union, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway July 24). A short time later, a suspect was apprehended by police.  First Area CEO Bonnie Fisher told PCUA:  "We thought something like this would never happen to us because we have busy lobby traffic, but this shows you're never really ready for a robbery. It can happen to anyone at any time." The credit union reviews its robbery training annually but likely will do it more often "so our staff is ready and knows how to react," Fisher said. "Thankfully, no one was injured and the teller is doing fine," she added …
  • SEATTLE (7/25/12)--A Russian hacker who was indicted in May 2011 for denial-of -service cyberattacks on Amazon.com, Priceline.com and eBay, was arrested July 18 in Cyprus, announced Jenny A. Durkan, U.S. attorney for the Western District of Washington. The U.S. is seeking extradiction of Dmitry Olegovich Zubakha, 25, of Moscow, who was arrested for illegal hacking and denial of service attacks in 2008. He also is charged with possessing 15 or more unauthorized access devices and aggravated identity theft for a separate incident involving possession of more than 28,000 stolen credit card numbers in October 2009, said Durkan. Among the victims of the hacking were members of BECU, Tukwila (zdnet.com July 20) ...
  • COMPTON, Calif. (7/25/12)--Compton, Calif.-based Mid Cities CU President/CEO Melia Keller, left, presented key strategies to serving underserved markets at the World Council of Credit Unions' (WOCCU) Young Credit Union People (WYCUP) session at the 2012 World Credit Union Conference in Gdansk, Poland.  Keller touched on key aspects such as transitioning the unbanked and underserved markets through products they are familiar with and then financially incentivizing them through product discounts for education.  She also spoke about "buy here pay here" dealerships in Los Angeles and how her $25 million asset credit union provided a successful auto loan product that offers credit-challenged members a below-market rate on an auto loan if they agreed to add a Global Positioning System in their vehicle. Attendees from smaller countries were interested in this because they experience heavy auto-loan delinquencies, said the credit union  (Photo provided by Mid Cities CU) …
  • ROCKVILLE, Md. (7/25/12)--Jane Pannier, CEO of the nationwide Realtors FCU will become senior vice president, effective Aug. 1, of NeighborBench, a cloud-based platform that connects credit unions with a team of compliance experts, said NeighborBench. She has 20 years' experience helping credit unions with compliance. Before joining Realtors FCU, she was partner in The Rochdale Group …
  • ALEXANDRIA, Va. (7/25/12)--Charlotte H. Cash has been chosen as president/CEO of  Commonwealth One FCU, based in Alexandria, Va. Cash has 27 years' experience at Commonwealth One in every phase of credit union operations, said credit union board Chairman Rupert Jennings. For the past 12 years, Cash has been vice president, retail sales and marketing. During that time, Commonwealth One grew to more than $300 million in assets and 35,000 members.  Cash joined the credit union in August 1985 as marketing manager and has held numerous management and executive positions since. She is vice chair of the board of the Metropolitan Area Credit Union Managers Association. Cash said that, as president, she would "focus on the major differences between credit unions and banks.  Emphasizing our core philosophy of 'people helping people' will help grow and improved our credit union in a financial environment that has become increasingly competitive and complex." …

Eleven indicted in 19M tax fraudID theft ring

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ANCHORAGE, Alaska (7/24/12)--Eleven people have been indicted in connection with a scheme to use stolen Puerto Rican identities to file tax returns and obtain $19 million in fraudulent income tax refunds in Anchorage, Alaska, said the Justice Department's Tax Division there.

They also have been charged with tax fraud, identity theft and other financial counts, as well as cocaine distribution and international money laundering (Loansafe.org and the Federal Bureau of Investigation July 20).  The charges include  making false statements to banks and credit unions, submitting false claims for refund, possessing stolen mail, making false claims of  U.S. citizenship, committing passport fraud, passing forged U.S. Treasury checks and aggravated identity theft.

The indictments alleged that between January 2012 and March 2012, the defendants engaged in a conspiracy to defraud the U.S. by filing false tax returns and claiming millions of dollars in refunds to which they were not entitled. 

The suspects, whose names were not released, allegedly obtained the names and Social Security numbers of individuals from Puerto Rico and fabricated individual income tax returns in those names. Three defendants allegedly obtained laptops loaded with the information of 2,600 stolen identities and identified $19 million in fraudulent refund claims.  The group allegedly contacted other conspirators in New Jersey and Puerto Rico, requesting that fraudulent refund checks be sent to Anchorage under false names.

The indictment alleges that the defendants negotiated the refund checks at financial institutions in Anchorage. One bank employee has been charged with assisting in the conspiracy by opening bank accounts in false names and negotiating forged U.S. Treasury checks.

Private student loans and the CFPB report a reaction

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NEW YORK (7/24/12)--The Consumer Financial Protection Bureau's (CFPB) report on improving private student lending is an "accurate, historical view of the industry prior to 2007" and its recommendations are "widely in practice now," says  Vince Passione, CEO of Fynanz, which powers the CUStudentLoans.org website.

Fynanz is a CUNA Strategic Services provider.

The CFPB report said Congress could revise the Truth in Lending Act to clarify the definition of "private student loans" to improve the market for students, families, schools and financial institutions. The report found loosened lending standards between 2005 and 2007 made private student loans risky for many consumers and led to many students borrowing more than they needed to finance their educational expenses.  CFPB is recommending full transparency in private student lending, with the loans 100% certified by the schools.

Prior to 2007, there were lax underwriting standards by some lenders, schools were not actively involved in the lending process and career preparatory schools were not ensuring students could find employment after school, Passione told News Now.  As a result many students and their parents ended up with extensive student loan debt.  "But the industry has learned from it."

"In post-2007, industry regulations and pressures on the industry shifted," he said noting that loan volume has gone down--from a $23 billion student loan industry to $11 billion and then $6 billion as all lenders tightened their underwriting standards.

Fynanz launched its private lending program, Credit Union Student Loans, in 2009 and the 215 credit unions it works with have incorporated these lessons, working with schools and with families and educating students about the student lending process so they don't go into excessive debt.  The CUStudentLoans.org website is one example of the financial education aspect of private student lending.

"The [school certification] concept is very important, and as far as our program, it's already being done. The defaults are very low, Passione said.

"The school certification is highly recommended and is widely in practice now,"  he told News Now.  "That is a good thing," he said, because "there is a need for these loans, which make up for the significant gap" between the coverage by federal loans and the actual cost of the education.

"The average cost is $34,000 per year. Even if you maximize Stafford loans, and have government involvement, families still need the ability to finance the gap," Passione said.

Of the 150 credit union lenders Fynanz works with and the 50 who do their own private student loans, all these are 100% certified by the schools and it helps ensure that the student has exhausted all the federal avenues before tapping into a private loan.

It will be important to process lending electronically to track the financial aid.  "If you have a scholarship that's $10,000, a Pell grant of $5,500 and an unsubsidized Stafford loan, and the student is applying for too big of a private student loan, the school must go back and tell the lender that the loan is too high." It gives the student full transparency, he added.

"There is a need for these loans," said Passione. "If they are done correctly, they are good for the student, good for the school, and good for the lending institutions."

iWall St. Journali CUs among best rate deals

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MADISON, Wis. (7/24/12)--In an article Saturday, The Wall Street Journal highlighted credit unions for the favorable rates they pay on certificates of deposits in comparison to banks.

An analysis of 8,300 credit unions and banks conducted for The Wall Street Journal shows that CUs often beat out banks for better rates.

Credit unions and small banks on average pay 0.4% to 0.5% percentage points more on three- and five-ear certificates of deposits than big banks, the article said. Typically, credit unions offer even better rates than smaller credit unions.

Roughly, 18% of credit unions beat the best online rates for CDs--with Fort Knox FCU, Radcliff, Ky., offering the best rates at 2.25% on a 59-month certificate.

The University of Iowa CU, Iowa City, Iowa, offers a 1.75% rate on a 22-month certificate, and a 2.5% rate on 44-month certficate, with a 0.2 percentage bonus for deposits of more than $250,000.

American Airlines FCU offers a five-year certficate at 2.27%.

Connexus CU, Wausau, Wis., pays 2% for a five-year certificate to members with active checking accounts.

Merger involves two CUs with common vision

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NORTH CANTON, Ohio (7/24/12)--Two Ohio credit unions that serve Methodists and employees of the Akron Beacon Journal newspaper merged earlier this month.

East Ohio Methodist Conference CU, based in North Canton, Ohio, with $51.5 million in assets, merged operations with West Ohio United Methodist CU in Cincinnati, with $20 million in assets, to become United Methodist Financial CU (Akron Beacon Journal July 21).

The three branches--the headquarters in North Canton, one in the Beacon Journal building in Akron and one in Cincinnati--will remain with a combined 17 employees to serve members, the newspaper said.

The merger culminates three years of discussions and will create economies of scale, with the larger credit union being better able to handle regulatory demands and bottom-line pressures, R. Wayne White, CEO of the former East Ohio United Methodist Conference CU, told the paper.

White will be the CEO of the new combined credit union. When he retires in a few years, the Rev. Russ Abbott, former CEO of West Ohio United Methodist CU and now chief operating officer of United Methodist Financial CU, will succeed White, the paper said.

South Florida CUs rated healthier

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FORT LAUDERDALE, Fla. (7/24/12)--South Florida credit unions are rated more financially sound than credit unions nationwide, according to a new report from Weiss Ratings.

Florida banks trail the U.S average, according to the South Florida Sun-Sentinel (July 23). Credit unions were less exposed to banks in bad real-estate loans, analyst said.

Nationwide, Weiss rated 70.9% of credit unions fair or better in the first quarter, an increase from 67.8 last year. Weiss rated 42 credit unions based in South Florida and 7,120 nationwide in the first quarter.

CUAD honors volunteers professional of the year

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BISMARCK, N.D. (7/24/12)--Three Dakota credit union leaders were recognized at the Credit Union Association of the Dakotas (CUAD) Annual Summit in Rapid City, S.D.

Michael J. Janke, volunteer of Dakota Plains CU, in Edgeley, N.D., was honored as the North Dakota Volunteer of the Year. Janke has served on the credit union's credit committee since 2003.  He was a loan officer at the credit union for seven years. 

Robert Feller, a director at Black Hills FCU in Rapid City, S.D., was honored as the South Dakota Volunteer of the Year. Feller has been a board member for Black Hills FCU since 1986. He has served as chair, vice chair, treasurer and secretary during his 26 years of service.

Deborah Larson, branch manager of Dakota Plains CU in Enderlin, N.D., was honored as the Professional of the Year. Larson is a member of the marketing committee for Dakota Plains CU  and is instrumental in providing financial education for local teens in conjunction with Enderlin High School.

Study Consumers would pay fees on lifestyle fin. services

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SAN ANSELMO, Calif. (7/24/12)--With the consumer backlash over the debit fees that big banks tried to charge last fall, it may come as a surprise that some consumers say they would pay a fee for certain "lifestyle" services of value, according to a new study.

More than 82% of consumers surveyed indicated they would buy identity theft alert services from their credit union or bank at an average monthly fee of $4.07. More than 73% said they likely would buy credit score reporting services at an average of $3.39 a month.

Revenue from fees for traditional banking services are shrinking. For example, income from deposit service fees declined 13% between 2007 and 2012, said Dan Geller, executive vice president of Market Rates Insight.

Traditionally, financial institutions based decisions about setting service fees on the competitive landscape for similar services, said the firm in a press release. "However, consumers have demonstrated they are no longer interested in paying fees for services that have no perceived value."  The study points to a new approach: assessing consumers' preferences on price sensitivity with the competitive landscape to reveal what consumers want, what they are willing to pay for, and where market opportunities lie.

The study encompassed seven lifestyle services: credit score services, identity theft protection, personalized couponing, prepaid reloadable cards, overdraft protection, personal money transfer and mobile remote deposit capture.

CU System briefs (07/23/2012)

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  • IDAHO FALLS, Idaho (7/24/12)--Brad Bauges has been selected as president/CEO of East Idaho C, based in Idaho Falls, announced the $253 million asset credit union's board. Bauges brings more than 12 years of experience in the financial services industry, eight of which was in senior management positions. Most recently he served as senior vice president and chief operations officer at the $850 million asset Columbia CU, Vancouver, Wash. While there he oversaw many facets, including branches, call center and employee training. He also has served at vice president of branch services at Texas Dow Employees FCU, Lake Jackson, Texas. Bauges began his position on Thursday …
  • HARRISBURG, Pa. (7/24/12)--The Pennsylvania Credit Union Association (PCUA) has added three new employees to its management staff, PCUA announced in Life is a Highway (July 23). Glenn Cermak has been named director of education and professional development. He has a background in public education and training, said PCUA.  Ryan Shumaker is director of information technology (IT) and will oversee IT functions at the association. He previously managed IT functions in several education facilities. Also, Megan Strausbaugh has been named communications specialist and will serve as Key Notes editor and perform other communication duties. Her background is in marketing and graphic design from the hotel industry …
  • HARRISBURG, Pa. (7/24/12)--Frank Alcamo, co-founder of C-B-W Schools FCU in Sidman, Pa., died July 14. He was 92.  Alcamo was one of the original seven members who each purchased a $5 share to pay the $35 fee necessary to apply for a charter. The certificate of organization was issued in November, 1956. Alcamo was the credit union's first president, said the Pennsylvania Credit Union Association (Life is a Highway July 23). While working to get the credit union solvent, Alcamo taught high school in Wilmore, Beaverdale, South Fork and Triangle. He retired as principal of Windber Area High School.  He served on the credit union's board for 56 years …

Top 10 payment trends to watch

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CINCINNATI (7/23/12)--Vying for share of wallet is the No. 1 payment processing trend shaping up for 2012 in an industry undergoing a number of changes, according to a  report from a payment processor.

Cash is still king, with 90% of consumers surveyed using cash during the winter holidays, compared with 60% using debit cards, and less than 50% using bank credit cards, store credit cards or gift cards, said the report, "Top 10 payment trends to watch in 2012,"  by  Cincinnati-based Vantiv LLC (formerly Third Processing Solutions), an integrated payment processor, and Roper.

Non cash will grow in popularity, altering the share-of-wallet across payment instruments.

Vantiv research indicated the greatest growth likely will be in prepaid cards, which will pull from credit and check payments.

Vantiv reported that credit card use will increase moderately with pent-up demand from the recession; check use will continue its decline; and, because of the Dodd-Frank Wall Street Reform Act interchange regulation, larger institutions will de-emphasize debit cards and encourage their member/customers to shift to credit and even prepaid cards.

The study said it expects the greatest growth in prepaid cards.  Those credit unions and community banks not covered by the interchange amendment "may see a market opportunity and redouble their efforts in that space," said the report.

New, emerging payment forms, most notably mobile payments, will have a long-term impact in all major spending categories, with significant percentages of respondents saying they would shift to mobile payments in these ways:

  • 10% for small in-store purchases, mostly displacing cash;
  • 11% for grocery/everyday spending, displacing most debit;
  • 8% for large in-store purchases, displacing most credit;
  • 7% for online purchases, displacing credit/debit;
  • 6% for education expenses, displacing mostly checks;
  • 9% for household expenses, displacing mostly debit; and
  • 8% for doctor visits and co-pays, displacing mostly cash and checks.
Vantiv also noted factors that drive consumers' choice of payment method.  Consumers are interested in low- or no-cost payment methods (87%); speed at the point of sale (85%); security (72%); ability to control spending (71%); ease of dispute (68%); no minimum purchase (66%); and instant deduction (65%).

The other nine trends to watch, in a nutshell, are:

  1. Security. Security is the main driver behind a lack of consumer interest in new payment types. Roughly 60% of consumers surveyed worry about security with electronic wallets and 40% do so with person-to-person payments. Fifteen percent indicated their credit or debit cards were cancelled due to a data breach in the past year, and 14% saw fraudulent charges on their accounts. EMV will be mandated by the market and will set the stage for CVV, which generates a security code for each transaction instead of a security code for the card itself.
  1. Prepaid cards.  These will increase in popularity and variety.  Of consumers surveyed, 15.5% said they expect to substitute debit/direct deposit accounts with prepaid cards in the next 12 months. General purpose reloadable cards will grow as debit use slows. However, financial institutions will need time to sort out multichannel approaches to card-loading and pricing tiers, Vantiv said. It expects 15%-20% growth for customer rebate and incentive cards and employee-reward cards. Disbursement cards will see mixed results, and the gift-card segment will continue modest growth.
  1. Smartphone payments. Just 1.5% of consumers have made mobile payments, although 61% say mobile payments will be common in five years. The wait-and-see attitude is fueled by doubts about the security of smartphones, which are vulnerable to hacking and easy to lose. Most said they would keep a traditional card as a backup for mobile payment.  Although smartphone use at the beginning of 2012 was 45% (up from 28% in 2011), in-store infrastructure for smartphone payments still is lacking at many merchants.  It is not clear that Near Field Communications capabilities will be the winning technology. Other solutions tout card-reader attachments for smartphones that let retailers use their phones to accept credit-card payments. Issuers will need to convince users to change to mobile wallets with coupon and rewards programs, location- and proximity-based marketing and tools to help consumers manage their spending.
  1. Merchant tablets.  Merchants have embraced iPads and other tablets to allow salespeople to gather customer data, help customers find what they need, let shoppers browse through their inventory, and speed up waiting in line. Some also are considering the tablet as a point-of-sale (POS) device to accept payments and as a less expensive alternative to a cash register. Seventeen percent of consumers surveyed already use roving POS for in-store payments, and Vantiv said that figure will grow quickly. It expects specialized tablets for certain functions at different  types of merchants to gain in the future.
  1. Mobile banking.  Mobile banking 3.0 will emerge. Nearly half of banks surveyed in a separate study say they will invest in mobile banking in the coming year. Mobile check deposit, where consumers take a photo of a check and send the image to the financial institution for deposit, moves to the next level. Expect the addition of wallet-based payment with as many as 250 wallets developed for the market by the end of the year. To stand out in the crowd, financial institutions have an edge: they already have consumers' personal and financial information and trust.
  1. Person-to-person (P2P) payments. In the U.S., P2P has not taken off yet. Of consumers surveyed, 47% don't see a need for it, 38.5% have security concerns, and just 22% said they were interested.  However, it has gained among individuals making payments to tradespeople or small businesses. Increased familiarity will improve the popularity, said Vantiv. Practical obstacles include: relying on the automated clearinghouse (ACH) network, which takes days to clear the payments;  making the effort needed to open P2P accounts and go online to approve incoming transfers; and providing P2P capabilities across a variety of channels at financial institutions.
  1. E-commerce. Expect e-commerce wallets to expand to brick and mortar. Consumers have a high awareness (more than 80%) for online methods of credit and debit, PayPal, ACH debit, and online bill payment, but worry about security, said Vantiv. Credit and charge cards are the preferred way to purchase online.  But there's a growing interest in moving online payment methods to e-wallet initiatives that let consumers make purchases without having to enter credit card numbers. PayPal already is working to become an acceptance option at the retail POS, Vantiv said.  Also, the trend can work in reverse: Visa launched its V.me wallet for online shopping, which lets consumers pay with a variety of credit cards.  In the past, e-commerce was conducted from the consumer's home PC. Now, it is taking place at the store itself.
  1. Social network payments. Consumers are buying more virtual goods used in online social network games. For example, they buy swords and magic wands for multi-player games or cows and tractors for Farmville, said Vantiv.  This area is growing rapidly with more than $2.3 billion spent last year on virtual goods, an increase from the $1.8 billion spend in 2009, said the report, citing statistics from Frank N. Magid Associates consulting firm. There is some overlap of the virtual world of paying and the non-virtual world. Facebook, for example, is allowing consumers to use "credits" to purchase real goods from merchants. Virtual payments will need to overcome these obstacles: they are high risk and therefore providers charge high fees to handle them; sellers wait for days for payment while the intermediary checks to ensure there are no chargebacks; they need to find approaches to pricing and timing that appeal to broader audiences; and as virtual currencies take hold and establish more value, the risk of fraud will increase.
  1. Legislation/regulation.  The ramifications of the CARD Act and the Dodd-Frank Act's impact on payments are still being sorted out. Vantiv says to expect more reporting and recordkeeping requirements on payment providers and merchants. It cited more reporting and recordkeeping mandates  on open loop prepayment cards, government agencies tailoring regulations to the emerging use of social media in financial activities, the as-yet unknown impact of the new Consumer Financial Protection Bureau and its activities, and the election year as impacting payments.
"New challenges are arising on the operational and regulatory fronts, and customer expectations for ease of use and security are rising," Vantiv said. "Success will require deeper expertise, the ability to learn from broad experience, innovation, and the agility to stay in step with changing customer attitudes and technologies," the report concluded.

The company provides credit, debit, prepaid and data security solutions related to payment activities. For the full report, use the link:

CU System briefs (07/20/2012)

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  • TEMPERANCE, Mich. (7/23/12)--The DNA of a boxer from Toledo, Ohio, led to his arrest in a 2009 robbery at the Temperance, Mich., branch of Monroe County Community CU, based in Monroe, Mich. The Federal Bureau of Investigation (FBI) said it obtained a swab used to stop a nosebleed of Martin Tucker, 32, a light welterweight, during a boxing match in April in Toledo. The FBI alleged the DNA sample from the swab matched DNA from a mask believed to be from the robbery and DNA on the steering wheel of the getaway car. Tucker, who was 1-6 in his last seven bouts, is accused of wearing the mask and using a handgun during the robbery.  About $5,400 was stolen. Another suspect was indicted in the case in November  (The Hutchinson News July 20) …
  • LATHRUP VILLAGE, Mich. (7/23/12)--Michigan First CU will host Disney Institute seminars Sept. 18-20 at its Lathrup Village headquarters to educate metro Detroit businesses and organizations about Disney's approach customer service and leadership. It will focus on quality service on Sept. 18, and leadership excellence on Sept. 19 and Sept. 20. It also has invited local college and university faculty and staff to a free 90 minute session on Sept. 20. "As an educationally focused organization, we felt it was a great opportunity to share these critical insights with the broader community," said Michigan First President/CEO Michael Poulos …
  • HARRISBURG, Pa. (7/23/12)--Frank Bongiorni, a long-time credit union volunteer and former secretary-treasurer of Visionary FCU, Bridgeville, Pa., died July 15 at the age of 92, according to the Pennsylvania Credit Union Association (Life is a Highway July 18). He served on the board of the Pittsburgh Chapter of Credit Union. In January 2011, Bongiorni was honored by the credit union on his retirement after more than 50 years of volunteer service on the board.  Funeral services were Thursday …

CU Consumers credit score ignorance no surprise

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MADISON, Wis.  (7/23/12)--While many people are attuned to how much credit card debt they carry, nearly half of U.S. adults surveyed don't know what their credit score is--and that comes as no surprise to one credit union in Texas.

Mike Roark, senior vice president of lending/collection with $302 million asset, Dallas-based Neighborhood CU, told the Texas Credit Union League that he isn't surprised by the figure, because he often has to educate members about why a credit score is important.

If the credit union can't meet a member's current loan need because of credit, "we let the member know the specific reasons," he told the league (LoneStar Leaguer July 13). "The goal is to be able to meet the member's lending needs at some point in the future. In order to accomplish this, we must educate our members. It is imperative a member knows not only what their credit score is, but how to move their score in a positive direction," he added.

The online survey, conducted for Whiting, Ind.-based CouponCabin by Harris Interactive, interviewed 2,215 U.S. adults ages 18 and older. It found that U.S. adults--especially younger adults-- don't have a grasp on their credit score. Of consumers age 18-34 surveyed, 60% are significantly more likely to not know their score while 42% of those 35 and older don't know their score.

Those surveyed were much more likely to know how much credit card debt they have:  90%  with credit card debt knew their total credit card debt, 10% didn't.  Thirty eight percent reported having less than $1,000 in debt, while 21% owed $5,001 or more on their credit cards. Twelve percent said they owe $10,001 or more in card debt.

"While some credit card users report they are keeping their debt in check, others struggle with high interest payments and looming deadlines," said Jackie Warrick, president and chief savings officer at CouponCabin.com. More than one-third of those surveyed are concerned about how long it will take to pay off their cards, Warrick said.

Roughly 56% of respondents said they have two or more credit cards, while 35% have three or more, and 7% indicated they have six or more credit cards. Nearly half (47%) said they always or often use credit cards to buy everyday items like food, gas and personal items.

Consumers' disinterest in credit scores also indicates a disinterest in checking credit reports--the information that often contributes to one's credit score.  An accurate credit report is important, and consumers have ample ability to dispute any errors on their reports, according to the National Foundation for Credit Counseling (NFCC) .

"An accurate credit report is critical to a person's financial future, and consumers need to be aware that the responsibility for reviewing their report lies with them," said Gail Cunningham, spokesperson for NFCC.  "Even though consumers can obtain their credit report free of charge, the recent NFCC Financial Literacy Survey revealed that 62% of respondents had not ordered their report in the past 12 months."

Financial education is at the forefront of countering these trends, especially among the younger adults. Credit unions' efforts in financial education are making a difference, said the Texas Credit Union Foundation.

"Credit unions are well aware of the financial literacy problem in this country and have taken up the cause," said Courtney Moran, executive director of the foundation. "In addition to teaching financial education classes in their local schools and communities, credit unions are also opening in-school branches," she told the Texas league. "It will take time to move the needle, but I know it will move."

iNews Nowi pushes your buttons

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MADISON, Wis. and WASHINGTON ( 7/23/12)--News Now stories are shared throughout the credit union world via email, Facebook, Twitter--even through printing them out and carrying them to a colleague's desk.  Now readers have two more options for sharing stories from the top source for credit union news.

Starting today, readers will see two new function buttons at the bottom of each story.  Inshare, to share stories with LinkedIn associates, and G+, to share stories via Google Plus, join the Facebook and Twitter share buttons.

Use the resource link below to sign up for a free subscription to News Now, the Credit Union National Association's daily online news service, to receive the top stories of interest to credit unions.

CU provides 38M in value benefits to members

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HAUPPAUGE, N.Y. (7/23/12)--Teachers FCU (TFCU), based in Hauppauge, N.Y., with $4 billion in assets, announced TFCU members received more than $38.76 million in direct financial benefits during 2011.

TFCU said the statistics are from the Membership Benefits Report, recently published by the Credit Union National Association (CUNA).

Those benefits are equivalent to $179 per member or $340 per member household. Also, CUNA estimates that TFCU provided each loyal high-use member household $1,449 in direct financial benefits during 2011.

The report compared TFCU's dividend rates, loan rates and fees to those of banking institutions in the state.  It combines those comparisons with TFCU's call report data to develop an overall estimate of the annual financial benefits TFCU provides members.

"TFCU excels in providing member benefits on many loan and savings products," the CUNA report said. "In particular, TFCU offers lower loan rates on the following accounts: new car loans, used-car loans, personal unsecured loans, first-mortgage fixed-rate loans, first-mortgage adjustable-rate loans, home equity loans and credit card loans. TFCU also pays its members higher dividends on the following accounts: regular savings, money market accounts, certificate accounts, and individual retirement accounts (IRAs). "

"Across New York state and the nation, members have access to over 4,500 locations, a number greater than or equal to many of the nation's largest banks," said Robert Allen, TFCU president/CEO. "The CUNA analysis confirms TFCU's commitment to quality services in spite of the lagging economic climate of 2011."

VSECU outlines implications of banking battle

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MONTPELIER, Vt. (7/23/12)--In a message to its members,Vermont State Employees CU (VSECU) has outlined the possible implications of its battle with the state's regulator over the use of the words "banking" and "bank" in its marketing.

The state Department of Financial Regulation (DFR), which regulates state-chartered credit unions and banks, issued a notice June 18 of a cease-and-desist order from using the words, saying it was concerned that consumers and members are confused when the credit union uses the words. The $573 million asset VSECU has requested a hearing over the matter (News Now July 19 and 20).

"We have worked hard over the years to educate consumers about the difference between a bank and a credit union. We have never called ourselves a bank nor have we ever tried to fool members or consumers into thinking we are a bank," VSECU CEO Steven D. Post wrote in the message posted on the credit union's website.

In a frequently asked questions section, the credit union outlined implications for state-chartered credit unions that could develop in the DFR succeeded in the ban, which "would be very unfortunate for Vermonters and set a very bad precedent in Vermont," it said.

Federal credit unions in the state "are not subject to any Vermont ruling that comes from this enforcement action and therefore can continue using the words 'banks' and 'banking' without penalty," the credit union said.

"It would mean that VSECU and other state-chartered credit unions would not be able to simply, fairly and accurately describe who they are and what kind of services they offer such as: mobile banking, banking online, banking solutions, 'you can bank at a credit union,' 'we're redefining banking,' 'our credit union is a banking alternative,'" said the credit union.

Banning the words "would clearly put VSECU and other state-chartered credit unions at a competitive disadvantage since federally chartered credit unions can use these terms freely," it said.

"Rather than protecting the Vermont consumer against confusion, it will only create confusion, since not all types of financial institutions will be able to use the same generic vocabulary in public." It also "could make it more attractive for state-chartered credit unions to convert to a federal charter and Vermont will lose more and more local oversight of its credit union industry.

Saying that switching to a federal charter would be "the last thing" it wants, VSECU added it is "is a Vermont institution, owned and controlled and regulated by Vermonters and we want to remain state-chartered.  That said, an adverse ruling on this action would force us to reconsider all of our options."

The credit union urged members who want to help to contact the department and other state officials and lawmakers or write a letter to the editor of their newspaper.

Two Baltimore CUs to merge

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BALTIMORE (7/23/12)--Mercy Health Services Employees FCU in Baltimore is poised to merge into MECU of Baltimore.

The $2.7 million asset Mercy Health Services with its nearly 1,000 members would be absorbed by the $1.2 billion asset MECU of Baltimore, which has 99,464 members (Baltimore Business Journal July 20).

Members of both credit unions must approve the merger, which would be at least the sixth merger among Baltimore-area credit unions announced or completed in the past 18 months, the Journal said.

MECU has eight branches in Baltimore and Baltimore County. Mercy has a single branch inside a building at Mercy Medical Center's downtown Baltimore campus.

Mercy members will vote Wednesday on the merger at a meeting. MECU members have until Aug. 9 to vote. The merger is expected to be finalized by the end of the year, the Journal said.

Jolette receives WOCCU Distinguished Service Award

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GDAŃSK, Poland (7/23/12)--The closing awards ceremony of the World Credit Union Conference, hosted by the World Council of Credit Unions (WOCCU), in Gdańsk, Poland was highlighted by the presentation of several awards and scholarships.

Manuel Rabines, left, presents the global industry's top honor to Barry Jolette, a former regulator, World Council of Credit Unions chair and current president/CEO of San Mateo CU, Redwood City, Calif.
Former WOCCU director Barry Jolette has been given the organization's Distinguished Service Award, the global credit union industry's highest honor.

A former National Credit Union Administration regulator, Jolette serves as president/CEO of San Mateo CU in Redwood City, Calif. In 1997, he was elected to the Credit Union National Association board of directors and named its chair in 2001. He also served on the California and Nevada Credit Union Leagues board as a director and chair, and has received the National Credit Union Foundation's Herb Wegner Memorial Award for Lifetime Achievement, the highest individual honor awarded by the U.S. credit union movement.

Jolette's involvement with (WOCCU) began in 1991. Jolette's experience with WOCCU changed his life, he said, and he urged audience members to increase their participation in the global trade group.

World Council of Credit Unions chair Manuel Rabines, left, congratulates WOCCU Young Credit Union People scholarship recipients, from left, Miriam De Dios, U.S.; Edyta Grzybowski, Poland; Brian Aalbers, Canada; Wesley Diniz Alves, Brazil; and Maire Doyle, Ireland. With them are WOCCU President/CEO Brian Branch and Director Ron Hance.
"I know you know someone who should be part of this wonderful organization, so please ask them to get involved," Jolette said. "That person could be the next crazy zealot to step forward and save some lives."

Conference co-hosts the National Association of Co-operative Savings and Credit Unions (NACSCU) also presented two Phoenix Awards, the highest honor given by the Polish credit union system. NACSCU Supervisory Board Chair Adam Jedlinski bestowed the awards on the late Polish president Lech Kaczyński, a former NACSCU Foundation director and longtime credit union supporter, and Cardinal Jozef Glemp, the Catholic primate of Gdańsk.

"The awards were presented to two wonderful people who supported the credit union movement and helped guide us out from under the shadow of a totalitarian regime," Jedlinski said.

WOCCU also awarded scholarships to five participants in the WOCCU Young Credit Union People (WYCUP) program. The scholarships enable winners to attend the 2013 World Credit Union Conference next July in Ottawa, Canada. This year's winners were Miriam De Dios, U.S.; Edyta Grzybowska, Poland; Brian Aalbers, Canada; Wesley Diniz Alves, Brazil; and Maire Doyle, Ireland.

"The hallmark of any profession is to provide for and train the next generation of leaders," said World Council Director Ron Hance, president/CEO of Heritage Family FCU in Rutland, Vt., and head of World Council's awards committee.

Grzegorz Bierecki, WOCCU First Vice Chair, presents the "Let's Gdansk" conference logo and tagline to the city of Gdańsk, Poland. (Photos provided by World Council of Credit Unions)
World Council First Vice Chair Grzegorz Bierecki, NACSCU president and CEO, announced that the rights to the conference logo and tagline "Let's Gdańsk!" would be presented to the city of Gdańsk for use in promoting the city in perpetuity.

"Let it stand in representation of the work Polish credit unions have done and of World Council's legacy of sustainability long after this conference has ended," Bierecki said. "'Let's Gdansk' tonight, tomorrow and for many years to come."

Bierecki also received a special award from the Russian Credit Union League and the Ukrainian National Association of Savings and Credit Unions for his work in helping guide the development of Poland's credit union system.

Randolph-Brooks FCU welcomes 400000th member

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LIVE OAK, Texas (7/23/12)--Among the credit unions making great strides in membership the past several years is Randolph-Brooks FCU (RBFCU), which hit the 400,000th-member milestone recently.

During the past year, the Live Oak, Texas-based credit union experienced a 12% increase in membership. It also has grown by nearly 150,000 new members during the past five years, said the credit union in a press release.

During first quarter of 2012, RBFCU also surpassed $5 billion in assets.

The credit union's growth was attributed to consumers looking for increased value in their financial dealings, according to RBFCU CEO Randy M. Smith.

"Credit unions are able to serve consumers by giving back more to their membership, charging lower fees and offering lower loan rates," Smith said. "We're continuing to grow, in both membership and assets, because we put our members first, focusing on products and services that meet their needs."

Summer of iPad initiative a success says CU

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KENTWOOD, Mich. (7/20/12)--Although the summer's not over yet, Community West CU's 'Summer of the iPad" initiative, which involves giving $25,000 worth of iPads to young adults in the community, is a success so far, says the Kentwood, Mich.-based credit union.

The initiative provides iPads to randomly selected young adults--recent high school graduates and current college undergraduates--who are furthering their education and pursuing careers.

"The response from our current young adult members has been tremendous," said CWCU President/CEO Jon Looman. "We have over 250 registered, and there is so much excitement surrounding this initiative."

So far, iPads have been presented to recipients from a variety of schools and workplaces. Among them: a student from Ferris State University studying education, a business management student from Davenport University, an athletic trainer going to Grand Valley State University, and someone working on creating fuel injectors for diesel engines.  "After the initial shock of learning they received an iPad, all recipients have been extremely grateful," said the credit union.

"Through various social media outlets, we continue to expand knowledge of the initiative, as well as our credit union," said Looman. "In the end, we want to assist all of our young adult members in understanding their finances, as well as make an impact on our community, and we believe this initiative will accomplish both items."

Grammar constitution stand in way of bank ban

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MADISON, Wis. (7/20/12)--Credit unions monitoring a situation in Vermont, where a state regulator has forbidden a state-chartered credit union from using words such as "bank" and "banking" in its marketing, can take heart. Grammar and constitution stand in the way of the ban, according to The Financial Brand.com, which pointed out the ludicrousness of banning the terms in an article Thursday.

In "War of the Words: Vermont Bankers Battle Credit Union over B-Word," the Brand tells readers that Montpelier, Vt.-based Vermont State Employees CU (VSECU) is banned from using the words after a complaint filed by Vermont bankers.  "But the credit union may be the one getting the last laugh."  It cited several offending phrases from marketing examples, including:

  • "We are a not-for-profit banking cooperative."
  • "At VSECU, we're making banking a little more exciting."
  • "It's another example of how VSECU is redefining banking."
"What about 'online banking'? Or 'mobile banking'?" the article asks. "Why should VSECU's use of these common, socially accepted, industry-wide terms be restricted, when practically every other credit union in Vermont (and the rest of the world) can use these words with impunity? Where does one draw the line?"

Trying to limit "banking" as a verb is "way beyond reason," the article said. "The words 'bank' and 'banking' are concepts that transcend a single industry. 'Bank' (as a verb) is more generally understood to mean 'save' or 'deposit' or to manage one's core finances. When consumers say, 'I bank with XYZ Financial,' that's what they mean."

Then the article brings up the U.S. Constitution, with: "Hello? Ever heard of the First Amendment? Any lawyer worth his or her salt should be able to get this thrown out on grounds of free speech. How on earth can it be constitutional to restrict one's ability to make analogies and allusions to anything? Trying to limit the use of words based on context and intent is a very, very slippery slope," said the article.

The article continues pointing out tongue-in-cheek situations where a ban just won't work. "Using the common cliché, 'You can bank on it,' could be punishable…There would be no 'bank shots' in billiards. Jet planes couldn't 'bank sharply.'" It also offers some ways the credit union could exploit the situation for marketing and poke fun at those want the ban the words.

The article's main conclusion: "People are going to call it banking, and both sides need to just get over it."

For the full article, use the link.

Older members carrying more mortgage debt

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WASHINGTON (7/20/12)--The perception of financial security among seniors is falling by the wayside--another apparent victim of the mortgage crisis, said a new study from AARP. Americans age 50 and over are carrying more mortgage debt than ever before, and more than three million are at risk of losing their homes, according to the study.

This will present challenges for credit unions in serving a segment of their membership long perceived as having wealth.

"Although mortgage delinquency rates at credit unions are much lower than those found in the AARP study, credit unions should be aware that many of their senior members will be facing challenges with mortgage debt," said Credit Union National Association Chief Economist Bill Hampel.

"In addition, members that had been counting on the equity in their homes to provide a large portion of their retirement nest egg will be looking for other ways to fund retirement.  For many that will require postponing retirement and finding a safe place to invest in the meantime.  Credit union retirement accounts can meet part of that need," he told News Now.

As of December, about 3.5 million loans held by people age 50 and over were underwater--they owe more than their home is worth, according to the AARP study. That means more seniors have no equity in their homes, which has long been considered as a source of financial security for the elderly.

Among the findings:

  • As of December 2011, 16% of loans of the 50-plus population were underwater.
  • Roughly 600,000 loans of people in this group were in foreclosure, with another 625,000 loans 90 or more days delinquent.
  • The percentage of loans that are seriously delinquent increased 456% to 6% in 2011 from this segment for 1.1% in 2007.
Of mortgage borrowers age 50-plus, middle-income borrowers have been most burdened by the financial crisis. Those with incomes ranging from $50,000 to $124,999 accounted for 53% of foreclosures of the 50-plus population in 2011. Borrowers with incomes below $50,000 accounted for 32% of foreclosures in this segment.

The percentage of Americans carrying mortgage debt as they age and the amount of that debt has increased steadily during the past 20 years. The largest increase in the percentage of older homeowners with mortgage debt is in the 75-and-over age group, but Americans 55 and older also increased their mortgage debt.

"This increase partly reflects increased borrowing that was spurred by historically low interest rates and high home values prior to the housing market collapse," the study said. "It may indicate that the oldest borrowers have tapped their home equity to finance their needs in retirement."

Foreclosure rates for first mortgages of the 50-plus population rose to 2.9% in 2011 from 0.3% in 2007. For this group, delinquency rates of more than 90 days increased to 3.03% in 2011 from 0.77% in 2007.

The increase in serious delinquency rates for the oldest borrowers is troubling, said AARP.

Several factors have contributed to this surge. The rising amount and incidence of mortgage debt, the length of time people have been living on a fixed income, and higher living expenses stress the budgets of older households, said the study.

Also, before tax income dropped 5.4% from 2007 to 2010 in real terms for households where the age of the head of household is 75 and over, AARP.

Consumers CU launches smart business services

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KALAMAZOO, Mich. (7/20/12)--Consumers CU in Kalamazoo, Mich., announced a focus on business services that includes the launch of its new BusinessPlus Checking and ePayroll Services.

"Our business portfolio is designed perfectly for the small business owner who is looking for quality personal service," said Gary Ferguson, vice president of business services. "We bring our credit union philosophy to meet the needs of business members right here in West Michigan." All decisions are made locally by Consumers for its business members.

The $364 million asset Consumers' line of business services includes:

  • New BusinessPlus Checking--with tiered rates;
  • New ePayroll Solutions--offering Automated Clearing House (direct deposit)  payroll for employees;
  • Business savings and certificates of deposit;
  • Online banking and bill pay;
  • Business loans and business mortgages; and
  • Free presentations to employees and breakroom connections.
A new feature of Consumers Business Services is BusinessPlus Checking. The account has no monthly service fee and earnings interest on daily balances that exceed $10,000. A tiered-rate structure provides greater earning potential, Consumers said.

"This enhanced business checking product is designed to simplify our members' business banking needs," Ferguson added. "Competitive rates will be earned on tiered balances with no confusing 'sweep' accounts."

Features of BusinessPlus Checking include:

  • No minimum balance, with interest tiers beginning at $10,000;
  • Free and unlimited automated clearing house credits and debits received into the account;
  • Free and unlimited check writing;
  • Free online banking and e-statements;
  • Free business debit card;
  • 150 free deposit items per month;
  • $1,500 in free daily cash deposits;
  • $1 per additional $1,000 deposited; and
  • Five free online bill payments per month.

Bethpage Bellco SECU of Md. partnership invests in member value

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BETHPAGE, N.Y.; GREENWOOD VILLAGE, Colo.; and LINTHICUM, Md. (7/20/12)--Three credit unions in New York, Colorado and Maryland plan to open a joint operations center in Baltimore, Md., and Denver, Colo., to maintain financial strength by sharing non branch-related resources.

Bethpage (N.Y.) FCU, Bellco CU, Greenwood Village, Colo.; and SECU, Linthicum, Md., announced their management teams and boards approved the plan to migrate some back-office operations to the new service centers  beginning early next year. 

They emphasized that the move to shared centers does not represent an institutional merger but an efficient sharing of resources.

"All three credit unions will remain independent organizations. We each have established management teams and local boards that will continue to focus on serving our local communities," explained Kirk Kordelski, president/CEO, Bethpage FCU.  "The main difference a shared service center provides is greater flexibility to service the growing needs of our membership. Sharing that cost over three financial institutions creates a larger scale to drive down expenses, therefore improving our value to members."

The transfer of services will be phased in over a two-year period. 

Pat  Pritchard, an experienced CEO, has been hired by the three credit unions to run the shared services centers.  Prichard will report to two boards:  the Operating Board, which is comprises the three credit union CEOs, and the Governance Board, made up of two members from the each credit union's boards.

"Three credit unions can fund jointly what an individual credit union would find unaffordable on its own," explained Doug Ferraro, president/CEO of Bellco CU." For example, with a shared resource pool, we will also be able to better manage spikes in loan demand and member service calls.  The changes our members see will be positive ones."

Rod Staatz, president/CEO of SECU, said, "With the cost savings that we will realize by sharing services, we will be able to offer members better hours, more advanced technology solutions, and better service levels--even during busy periods.  All of these changes will help SECU and the two other credit unions provide the high standard of service members have come to expect."

A fact sheet from Bethpage FCU noted that the reorganization is a major milestone in its decade-long growth strategy. The agreement means it will expand its work force by 13%, creating an estimated 158 Bethpage jobs on Long Island, N.Y. Reassigned employees will fill 91 of those positions, which are of equal or greater responsibility and compensation than their current jobs.

SECU has more than $2.4 billion in assets and serves more than 220,000 members at  its headquarters and 19 branches. Bellco, with more than $2 billion in assets, serves more than 200,000 members with 17 branches.  The $4.8 billion asset Bethpage serves more than 196,000 members with 26 branches.

Catalyst Economy requires proactive management of cash flow

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PLANO, Texas (7/20/12)--Credit unions will need to have a very proactive management of cash flow to keep available funds working in this challenging economy, according to an executive at a Catalyst Corporate FCU subsidiary.

"It will also require credit unions to retain a relatively low as possible cost of funds management in order to assimilate some form of spread," Brian Turner, Catalyst Strategic Solutions director and chief strategist, told the Texas Credit Union League (LoneStar Leaguer July 19).  

Interest rates--in light of Federal Reserve Chairman Ben Bernanke's statement Tuesday to the U.S. Senate Banking Committee--are not going to increase much during the next couple of years, Turner told the league.  

"Loan demand will continue to be moderate at best as consumers continue to temper their spending behaviors in light of uncertainty," Turner said. "Share growth will not be impacted (as to trends). Unless the employment sector again turns south, delinquencies will be unaffected while liquidity profiles will continue to strengthen."

Net margins will remain tight, Turner said. Industry trends from the first quarter will continue through the remaining months this year, he added.

"Industry stats show some improvement in earnings and loan growth but it is isolated with the larger credit unions ($500 million in total assets or greater), which although accounting for only 5% of the number of institutions, control about 65% of the assets and equity of the industry," Turner told the league.

Filene Corporate governance in Canadian U.S. CUs

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MADISON, Wis. (7/20/12)--Credit union governance can be likened to finding that elusive pivot point on a playground teeter-totter, the sweet spot that balances three different dimensions--the interests of members/owners, the oversight responsibilities of directors, and the operational role of management, according to a new Filene Research Institute report.  

Using another metaphor, the governance literature refers to these three dimensions as a three-legged stool, according to the report, "Corporate Governance in Canadian and U.S Credit Unions."

What are the credit union implications?

The findings compare major and minor details of different (and often not-so-different) approaches to governance in the three systems and among different-sized credit unions. Some differences emerged. For example, as a federated system, Desjardins excels at some aspect of board development and system governance in ways that the more atomized U.S. and Canadian credit union systems do not, said the report.

Other implications for credit unions include:

  • Most respondents in the U.S. and at centrally affiliated Canadian credit unions reported that management--not members or boards of directors--was the most important body in driving the change process at credit unions. Desjardins credit unions point to members as predominant initiators of change.
  • There is little evidence that the board holds itself or its individual members accountable for performance. Without such self-scrutiny, the only the only realistic check on governance competence is market failure or regulatory intervention--which, despite recent activism, should not be considered an integral part of healthy board governance.
  • Effective boards cannot be built through the activities of a once-a-year nominating committee appointed by the board. Credit unions should consider replacing the nominating committee with a member-elected governance committee or augmenting the role of a nominating committee to function as a full standing committee that embraces board development, improved board performance, and member engagement/education as an ongoing, year-round priority. Fully empowered supervisory committees also can play this role.
  • The cooperative philosophy and ideals, together with the credit union ethos, are the basis of cooperative governance. However, few members seem to acknowledge that basis, and without the endorsement of the membership, the validity of this governance structure must be questioned, said the report.
The report, a collaborative effort between Filene and the Credit Union Central of Canada, with participation from Quebec's Desjardins Group, follows up two recent Filene governance projects: "Tracking the Relationship Between Credit Union Governance and Performance" and a three-part series by Professor Bob Hoel about how boards can add more value.

The study includes an in-depth review of financial institution governance research and calls out the differences between credit unions and other firms. Also, the authors conducted a dozen interviews with credit unions of all sizes across all three major North American credit union systems.

For more information, use the link.

Two Rhode Island CUs set to merge

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SMITHFIELD, R.I. (7/20/12)--Two Rhode Island credit unions--Navigant CU and Columbus CU--have announced their intention to merge, with Navigant remaining as the continuing institution.

Warren, R.I.-based Columbus CU's employees will stay on as employees of Navigant CU, which is based in Smithfield, R.I., and has $1.3 billion in assets, according to the Provident Business News (July 18)

Among the reasons cited for the merger by Columbus CU, with $68 million in assets, was enhanced and expanded access to services for its members. Among the services offered by Navigant CU are a suite of commercial loans, business services and consumer products.

Columbus CU's two branches will remain open in addition to Navigant's 10 other branches in northern and eastern Rhode Island.

The merger is subject to regulatory approval and is expected to be finalized by the end of the year.

CUNA Collections and Bankruptcy School topics announced

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MADISON, Wis. (7/20/12)--Topics have been announced for the  CUNA Collections & Bankruptcy School, taking place Sept. 10-13 in San Diego.

The CUNA Collections & Bankruptcy School is offered in two parts:

Introduction: Building the Foundation

  • Introduction to Bankruptcy;
  • The Economy & Its Impact on Collections;
  • Introduction to Collections;
  • The Psychology & Communications Collections; and
  • Best Practices Roundtable Discussion.
Advanced: Expanding Your Knowledge

  • The Economy & Its Impact on Collections;
  • Hot Topics in Bankruptcy & Collections;
  • You Be the Judge: Case Law Update;
  • Technology: What's Available & What Works for the Collection Department;
  • Collections Ethics; and
  • Best Practices Roundtable Discussion.
The CUNA Collections & Bankruptcy School features breakout lectures, networking sessions and roundtable discussions led by collection and bankruptcy experts.

The CUNA Lending Council is offering scholarships of up to $2,500 for qualifying credit unions attending either the introduction or advanced part at the school. The deadline to apply is July 30.

CU System briefs (07/19/2012)

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  • COLORADO SPRINGS, Colo. (7/20/12)--In March, Colorado Springs-based Ent FCU partnered with the American Red Cross to train more than 30 Ent volunteers in the event of a local disaster. In June, they put their "Ready When the Times Comes" training to use.  Eight were called up to support shelter operations for evacuees of the recent Waldo Canyon wildfire in Colorado Springs.  The eight volunteers gave more than 160 hours of their time and served a critical role filling the gap of needed local volunteers until national assistance teams arrived, said the credit union. "Ent's volunteers were heroes," said Thomas Gonzalez, CEO of American Red Cross's Pikes Peak Chapter. Pictured are Ent's volunteers with Ent President Randy Bernstein (fifth from left) and Executive Vice President Barb Winter (fourth from right). (Photo provided by Ent FCU) …
  • HARRISBURG, Pa. (7/20/12)--Four credit unions in Pennsylvania are participating in the new "Bank On Lancaster," launched last week by the United Way of Lancaster County. The project provides opportunities for unbanked people to open accounts and receive free financial education, said the Pennsylvania Credit Union Association (Life is a Highway July 13). Participating are Wheatland FCU, Citadel FCU, Lancaster Red Rose CU, and LANCO FCU, as well as nine banks and two nonprofit organizations. Lancaster County has an estimated more than 20,000 people who are unbanked. The average unbanked person spends 5% of net income on unnecessary fees, which for a lower-to-medium income work amounts to about $40,000 over an average working life, said joinbankon.org  …
  • MANSFIELD, Texas (7/20/12)--Texas Trust  CU has launched its Mobile Solutions portfolio so members can conduct financial business remotely with their mobile phone. Members can access account information, check balances on the account, transfer money between accounts, view their transaction history and search for surcharge-free ATMs. The Texas Trust Mobile App is available for Apple, Android and Blackberry smartphones. The free app can be downloaded by visiting these companies' app stores and searching for "Texas Trust Mobile Banking." To enable the app, members must be first signed up for Texas Trust's Home Banking feature. Those with older phones can access the same information through the credit union's mobile website.  The Mansfield, Texas-based credit union also said it plans to offer more mobile banking services in the next 12 months …Texas Trust launches mobile solutions
  • JACKSONVILLE, Fla. (7/20/12)--Charles Alfred Henderson, a longtime member of the board of directors at Campus USA CU, Gainesville, Fla., died July 13 in Jacksonville. He was 85. The University of Florida professor emeritus  served on the credit union's board for 33 years, and served two terms as board chairman (The Tallahassee Democrat July 16).  He taught at University of Florida for 21 years before retiring in 1985, was a former school principal, and was active in education-related organizations.  He is survived by his wife of 61 years, Ann Messer Henderson, and several nieces and nephews …

AVCU CUs have right to use banking in ads

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COLCHESTER, Vt. (7/19/12)--The Association of Vermont Credit Unions (AVCU) is encouraging  the state credit union regulator to re-evaluate its interpretation of the word "banking" after the regulator ordered a state-chartered credit union to "cease and desist" from using the words "bank," "banking," and similar words in its marketing, communications, and advertising.

The situation came to light when Montpelier-basedVermont State Employees CU filed an appeal Monday with the state's Department of Financial Regulation (DFR) over DFR's June 18 notice of the cease-and-desist order.  It ordered the credit union to stop using "bank," "banking," "banking cooperative," and similar words in its materials. (See "Vermont CU says it's targeted in bank battle" in Wednesday's News Now.)

"Most people would agree that the term 'banking,' and variations thereof, is a common and widespread nomenclature used by most everyone to describe the generic handling of their financial matters with some type of provider of financial services," said Joe Bergeron, AVCU president, in a statement.

Although the matter is currently between the credit union and the regulator, "we support the right of any credit union to use the term," he told News Now, "just like consumers use it and the media use it."  He noted the real question should be, "Is the credit union really deceiving people into thinking it is a bank?" he said, adding it isn't.

"Consumers use the term to describe what they're doing, not particular to any type of service provider," Bergeron said in a statement later e-mailed to News Now. "They commonly say, 'I do my banking at' at ABC bank, XYZ credit union, or whatever other provider they so choose. In fact, the media itself accepts and fosters such use in hundreds of articles we all see throughout the year on advising consumers on 'where to do their banking,' or where to 'get the best deal on banking,'" he added.

"The intent of the Vermont law is to prevent persons and entities who are clearly not regulated financial institutions of any sort, from deceiving consumers into believing they are something they are not by masquerading as some form of bank," he said.

"VSECU, and every other Vermont credit union to our knowledge, is proud to be a cooperative credit union and has never tried to convince consumers it is something other than a cooperative credit union. Everyone understands that use of the word 'banking' is in reference to a consumer's action, not the form of the entity," he added.

"Restricting credit unions from using the same word their members use in reference to their credit union transactions won't prevent consumers and the media from still using such words, he said, adding, "It does, however, serve to disadvantage Vermont's local cooperative state-chartered credit unions compared to federal credit unions and all other financial service providers."

"We encourage [DFR] to re-evaluate its interpretation to correctly recognize the public's generic use of a term denoting a commonplace activity, while supporting the regulator's efforts to insure that consumers are not misled by any entity into believing it is something that it's not."

DFR regulates both state-chartered banks and credit unions.

Out of curiosity, News Now checked to see who else, besides financial institutions, uses a form of the word "bank" in their marketing. It found references to food banks, blood banks, data banks, time banks, flower banks, river banks, eye banks, left and right banks, outer banks, and health record banks, not to mention retailer Christopher and Banks, supermodel Tyra Banks, writer Russell Banks, and actress Elizabeth Banks.

Membership hike leads to job creation at CU

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PLYMOUTH, Mich. (7/19/12)--Community Financial Members FCU in Plymouth, Mich., has hired 21 new team members since January.

As part of its inaugural Community Matters Annual Community Report, the $478 million asset Community Financial reported that 2011 was a record year regarding membership, which grew by more than 10%, and for its overall member satisfaction rankings (PR NewsWire July 17).

"We are thrilled to be growing, because not only do we continue to provide great service and sound financial advice to our members, but we also have the opportunities to hire more people and give back to the communities we serve," said Bill Lawton, president/CEO of Community Financial.

Through the first quarter of 2012, credit unions nationwide combined for a record 92.5 million members, according to a recent National Credit Union Administration report.

Back-to-school costs rise CUs are helping

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MADISON, Wis. (7/19/12)--With back-to-school costs for students on the rise, several credit unions and credit union organizations nationwide are pitching in with schools supplies or programs to help defray the costs.

About 46% of consumers surveyed said that they planned to spend more this year than they did last year, according to a survey by Pricegrabber (LoneStar Leaguer July 17). Also, 63% said they were budgeting up to $500 for school-related gear--up from 48% last year, while 20% said they had between $500 and $1,000 set aside for back-to-school purchases.

Allocations for electronics are a big reason the back-to-school budget is higher, the survey indicated. The Pricegrabber survey showed 40% of respondents said they plan to buy new laptops or tablet computers for their kids; 28% of those consumers said they were looking to obtain some sort of smartphone, and 10% were considering the purchase of a new desktop computer.

Some examples of credit unions helping members are:

  • FirstLight FCU, a $760 million asset El Paso, Texas-based credit union, offers a Back-2-School credit card promotion (LoneStar Leaguer July 17). "If members use their FirstLight FCU credit card during July 1 to Aug. 31 they get a 2% drop on their annual percentage rate or double their reward points for back-to-school purchases that fall under certain merchant codes (including school supplies, books, electronics, clothing)," said  Alex Yu, marketing specialist at the El Paso-based credit union. Yu said the credit union has offered the Back-2-School credit card promotion for the past three years and it has been well-received.
  • The 100% for Kids Utah Credit Union Education Foundation awarded Beehive Elementary in Salt Lake City, Utah, with a grant to purchase books for the entire school last year. Janet Christensen, a teacher, applied for and received the grant.  She started "Read the Book, See the Movie" at Beehive at the beginning of the school year, promising the students that after they finished reading the book, they could have an outdoor movie party with their families. More than 30 students and their families showed up for the event, featuring the movie, "The City of Ember" presented on a giant, outdoor, inflatable screen on the school's lawn. Liz White, 100% for Kids Foundation director, said the foundation board was impressed with the creative idea. "It surprises me that more schools don't do something like this. There are so many books being made into movies, it's a great way to make reading fun for kids," White said.
  • Apple FCU, a $1.35 billion asset credit union base in Fairfax, Va., earlier this month launched its annual backpack and school supply drive benefiting needy kids (BusinessWire July 2). The credit union is encouraging the public to drop off backpacks and cash donations at the nearest Apple branch. For the first time, Apple said it will match up to $5,000 made in contributions.
  • Ouachita Valley FCU, a $141 million asset credit union based in West Monroe, La., this month began its eighth annual Sunny School Supply drive to gather school supplies for needy students (thenewssstar.com July 18). The credit union received more than 350 applications for school supplies and is asking the community to help it raise more than $8,000 to fulfill those applications.
Credit Union Marketing Resources' Back to School Express Loan Campaign at CU SuperMarket" is a one-stop, cost-efficient way to reach a credit union's members, said the Texas Credit Union League (LoneStar Leaguer July 17). Marketing materials available include: postcards, statement inserts, lobby posters, Web banners, T-shirts and other items. Credit unions can use the copy already written or supply their own. Credit Union Marketing Resources also will customize all marketing materials with a credit union's logo and contact information.

Illinois wraps up second year of enhanced FICEP program

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NAPERVILLE, Ill. (7/19/12)--Forty representatives from 19 Illinois credit unions are on their way to becoming Certified Credit Union Financial Counselors (CCUFC) after completing the final webinar of the REAL Solutions Enhanced Financial Counseling Certification Program (FICEP) Tuesday.

The final CCUFC designation will be awarded by the Credit Union National Association (CUNA) upon successful passage of two in-person proctored exams--the second of which took place last month.

In bringing back FiCEP for the second year, the Illinois Credit Union Foundation agreed to cover the cost of the REAL Solutions enhancement, which had been shared among participants last year. The only cost to Illinois credit unions this year was the purchase of the FiCEP books and exams from CUNA. ICUF awarded scholarships to help offset participant costs for the program.

Exams were also expanded to new testing sites for 2012, including Chicago, Danville, Gurnee, Moline, Rockford and St. Louis. Last year, Naperville was the only testing site.

As CUNA's financial counseling certification self-study program, FiCEP provides credit union staff with the knowledge and insight to help members build a stronger financial future. FiCEP is designed for credit union staff members who work in the financial counseling, collections and loan departments, or others committed to helping members gain control of their financial futures. 

Modeled after the CUNA Certified Financial Counselor Schools, FiCEP includes two parts of four learning modules each. When participants successfully complete the proctored exams for both parts (eight total modules), they become a CCUFC.

The 2012 Illinois program, which began Feb. 21, included 10 webinars--one per module, plus an orientation session, and a session dedicated to implementing financial counseling at participating credit unions; the two proctored exams, and one in-person meeting.

Speaker CUs no longer a place but an app

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GDAŃSK, Poland--The future of banking may not be a physical presence, but an "app" that makes life's processes easier, author Brett King told a World Credit Union Conference audience Wednesday.

Click to view larger imageThis is an exciting time for credit unions--but a terrifying time for credit union executives, Brett King told a World Credit Union Conference audience in Gdańsk, Poland.
For many that future is now, and credit unions not prepared for the transformation already engulfing the financial services industry will not have much of a future themselves, King said. "This is an incredibly exciting time for credit unions," said King, author of the forthcoming book Bank 3.0 and the closing speaker for the conference, presented by World Council of Credit Unions in Gdańsk, Poland. "But it is a terrifying time for credit union executives."

Technology has brought a dramatic shift to not only to how financial services are delivered, but also to the capabilities and preferences of future generations of members. For these "digital natives," technology is not new--it is all they have known. It is up to credit unions to meet the nature and needs of those consumers or lose them to the competition, King said.

"The perceptions of what credit unions are in the world will change over the next 10 years," King said. "How will you build a great journey for your members? That's the trick."

Through Internet access and especially smartphone technology, credit union business has become something members do at a time and place that suits their needs, and those needs rarely include a visit to a branch. In fact, smartphone technology has taken the place of other transaction devices, such as debit cards, due to its capability to complete transactions with the flick of an "app" and display account balance information in real time.

Audience members learned that credit unions must redefine themselves as "app" providers.
"The iPhone has become a proxy for the debit card," King said. "It's the debit card of the future." He cited the Kenyan cellphone-based transaction company M-PESA ("pesa" is Swahili for "money") as the world's fastest growing "bank," based on its widespread use and growing market penetration. Currently, 20% of Kenya's population of 40 million have financial institution accounts, while 50% have M-PESA relationships that enable them to transfer cash, pay bills and perform other basic financial services.

Kenya's figures roughly translate to those of the entire world, King said. Sixty percent of the global population are unbanked, but 85% have cellphones. He predicted that by 2017, the entire population will have smartphones and most will use them for financial transaction services, especially Generation Y members.

"By 2020, about half of your credit union member population will be Gen Y," he explained. "They will be mobile-first, and that will be their preferred way to do business."

The changing reality will spell the end to many credit union branches, said King. "If you think the branch is the place that the magic happens, where you define your relationship with your members, then you are in trouble," he added.

Generation Y members are mobile-first, which will change the way credit unions do business, King said. (Photos provided by World Council of Credit Unions.)
The best option for credit unions is to redefine themselves as providers of "apps" that enable members to gain crucial information when and where they need it. Such thinking will close the gap that is developing between credit unions and their members, and open the door for a new generation of digital natives who may even sing credit unions' praises through social media.

"It is all about the context in which you operate," said King. "Financial services need to be part of the journey, and you need to become embedded in the lives of your members."

King went into even greater depth during Wednesday's "Bacon, Eggs & Business Experts," one of the conference's two separate-fee breakfast sessions that started the day. In between, breakout session audiences looked at increasing regulatory reporting requirements, studied lessons in credit union lobbying and learned to cultivate social responsibility as part of sustainability.

The conference ended Wednesday.

WOCCU welcomes new members

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GDANSK, Poland (7/19/12)--One new credit union trade group and one newly revived one have joined the World Council of Credit Unions (WOCCU). The two new members and four organizations that have joined WOCCU since July 2011 were announced Monday at WOCCU's 2012 annual general meeting, held in conjunction with the World Credit Union Conference this week in Gdańsk, Poland.

Federación Nacional de Cooperativas de Ahorro y Crédito Financieras (FECOLFIN), which represents Colombia's largest credit unions, joined WOCCU as a direct member. FECOLFIN was chartered in March and may be the world's newest credit union association, said WOCCU. Part of the group's growth strategy includes membership in WOCCU. Jaime Chavez, the trade group's CEO, was present at the meeting to accept the WOCCU flag denoting its membership.

The Liberian Credit Union National Association (LCUNA) joined WOCCU as an affiliate member. Liberia's credit unions have existed for a while, but political conditions within the country had rendered the credit unions and their trade association inactive. With support from the Liberian government and its central bank, the country's credit unions and LCUNA are once again functional. However, no LCUNA representatives were able to attend the meeting.

Other new members approved since the 2011 annual general meeting and present at this year's meeting included the Central Association of Savings and Credit Associations (CASCA), which represents Moldova's credit unions as a direct WOCCU member. CASCA Executive Director Efim Lupanciuc accepted the WOCCU flag.

New associate members honored included Credit Union Direct, which administrates an auto lending network in the U.S.; Credit Union Shared Services Cooperative Ltd. (CUSSCO), a credit union service organization owned by Capital CU Ltd. and Scotwest CU, both located in Scotland, U.K.; and Cooperativa Médica del Valle, a cooperatively owned financial holding company based in Colombia. Credit Union Direct's Jerry Neeman and CUSSCO's Marlene Shiels were on hand to accept the WOCCU flags denoting their memberships.

The World Credit Union Conference ended Wednesday.

World Council of Credit Unions (WOCCU) Director Manfred Dasenbrock (left) presents Jaime Chavez, who represents an association of Colombia's largest credit unions, with a WOCCU flag signifying membership at the World Credit Union Conference this week in Gdańsk, Poland.  Grzegorz Bierecki (left), World Council of Credit Unions first vice chair, welcomes Efim Lupanciuc and CASCA into membership.
Former World Council of Credit Unions (WOCCU) Chair Barry Jolette (right) presents CU Direct's Jerry Neeman with a WOCCU flag.  

Louise Petschler (left), World Council of Credit Unions (WOCCU) secretary, welcomes Credit Union Shared Services Cooperative Ltd.'s Marlene Shiels, a former WOCCU director, into membership. (Photos provided by the World Council of Credit Unions)

Eagle One FCU SERVCO FCU open joint branch

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PHILADELPHIA (7/19/12)--Eagle One FCU and SERVCO FCU celebrated the opening of a joint branch in Philadelphia on Tuesday.

Eagle One FCU CEO John King and SERVCO FCU CEO Joni Brown stand outside their newly opened joint branch office in the Rhawnhurst section of Philadelphia. (Photo provided by Pennsylvania Credit Union Association)
The joint branch is the first branch for $3 million SERVCO FCU, in addition to its main office in Bensalem, Pa. SERVCO originally served employees of the old Gulf Oil Corp., and now serves a varied membership base in the Philadelphia area, according to the Pennsylvania Credit Union Association (Life is a Highway July 18)

The branch is the fifth for $45 million Eagle One, which serves postal employees in the Philadelphia District and the communities of Fishtown in Philadelphia and Claymont, Del.

The new branch office has three teller windows and back offices for administrative staff and loan officers. The location in northeast Philadelphia will enable Eagle One to serve the large number of members who live in that area. In return, SERVCO will share the expenses of the office with Eagle One, thereby reducing the burden of operating the branch independently.

"We believe that this partnership will serve as an example for other credit unions to follow," said John F. King, Eagle One FCU CEO. "We have always held true to the idea of People Helping People."

"This is a great day for SERVCO FCU and our members," said Joni Brown, CEO/manager of SERVCO FCU. "Our first branch office will provide us the opportunity to serve our members better, and in a convenient location. We value our partnership with Eagle One. This could not have happened without their cooperation. We look forward to a long and mutually beneficial relationship."

CU System briefs (07/18/2012)

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  • PHILLIPSBURG, N.J. (7/19/12)--A former teller at Phillipsburg, N.J.-based Baker FCU has been charged with stealing more than $73,000 from the accounts of several elderly members over five years. Lisa Frace, 32, was charged with seven counts of thefts, 35 counts of forgery and 35 counts of uttering a forged document. The thefts occurred from 2007 through spring 2012 and were discovered when a member questioned an unauthorized withdrawal from her savings account and discovered more funds missing (The Morning Call July 18). During that period, said police, Frace's teller drawer allegedly was about $4,000 short and she allegedly made 75 withdrawals from the credit union, forging signatures on withdrawal slips. Also, she allegedly signed members up for online banking, cutting them off from mailed account information …
  • ALBANY, N.Y. (7/19/12)--AmeriCU CU, a $1 billion asset credit union based in Rome, N.Y., received the 2012 Ralph W. Hillman Marketing Award from Universal Sharing Network Inc. (UsNet). The award recognizes a participating UsNet credit union for exemplifying the spirit and enthusiasm exhibited by the late Hillman, a former chairman and board member of UsNet, in his support of the shared branching network. AmeriCU CU last year introduced a revised mobile application for the iPhone and Android, which integrates with smartphones' global positioning system to locate the closest CU Service Center. From left: Marc Inger, chief operating officer at UsNet presents the award to AmeriCU CU Board Chairman Ann S. Tyler. (Photo provided by Universal Sharing Network Inc.) …
  • ALEXANDRIA, Va. (7/19/12)--Charlotte H. Cash has been named as president/CEO of the CommonWealth One FCU, announced its board of directors. The appointment will be effective on Monday. Cash has been with the credit union for 27 years, serving as vice president, retail sales and marketing, for the past 12 years. She succeeds John Blair, who retires on Friday. Blair has served as president/CEO of the Alexandria, Va.-based, $300 million asset credit union for 18 years …
  • CARSON CITY, Nev. (7/19/12)--For the second consecutive year, Greater Nevada CU (GNCU) was named an Ace Award winner at the Reno-Tahoe American Marketing Association's annual awards ceremony. GNCU's "Embarrassing Care Syndrome" TV commercial was named "Best in Video." "The Embarrassing Care Syndrome kept everyone at the credit union focused on promoting our vehicle loans and helping members get the financing they need," said GNCU Vice President of Lending Patty Lewis. "Plus the concept of 'curing' people of their inefficient and unreliable vehicles was fun to play on." The ad centered on a GNCU "doctor" offering a cure for people embarrassed of driving clunkers, as well as people adopting disguises so they are not recognized in their car. The campaign increased vehicle loans to $4.1 million in November 2011, up from $1.58 million in November 2010. (Photo provided by Greater Nevada CU) …
  • BISMARCK, N.D. (7/19/12)--The Credit Union Association of the Dakotas (CUAD) continued its "CU on the Road" tour at Red River Valley Fair last weekend in Fargo, N.D. The tour is part of an awareness campaign CUAD is conducting across the state. Roughly 1,417 people stopped by its booth. Visitors were from Fargo and as far away as Canada, North Carolina and Hawaii. CUAD's Robbie Thompson and Kristie Heit were on site with the CU on the Road vehicle filled with balloons. Visitors guessed the number of balloons (163) and four guessed the correct amount. One of them won the $100 grand prize, with three others receiving $50 prizes. Heit noted the CUAD staff "dispelled a lot of myths, including one credit union member who had a savings account at a credit union for a very long time but had no idea he could get a mortgage there." Many visitors were unaware that credit unions offer  mortgage loans. They also dispelled the notion that credit unions are hard to join. (Photo provided by the Credit Union Association of the Dakotas) …

Global panel Regulatory pendulum likely to continue swing

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GDANSK, Poland (7/18/12)--
Click to view larger image Credit union trade association executives and regulators joined together for a panel discussion Tuesday at the World Credit Union Conference in Gdansk, Poland.
The recent global financial crisis has caused the pendulum of credit union regulations to continue its swing toward more stringent oversight. But its movement can affect both credit unions and regulators who oversee them. So says a panel of trade association leaders and regulators that kicked off Tuesday's general session at the World Credit Union Conference in Gdansk, Poland.

The conference, presented by the World Council of Credit Unions (WOCCU), convened Sunday and will end today.

Entitled "Point Counterpoint: Finding Regulatory Balance in the Era of International Standards," the panel was moderated by WOCCU Secretary Louise Petschler, CEO of Abacus Australian Mutuals, and included representatives from Canada, Great Britain and the U.S. 
Click to view larger image Panel participants sharing a lighter moment during discussions included, from left: Mark Lyonette and Martin Stewart of Great Britain, and Bill Cheney, president/CEO of the U.S.'s Credit Union National Association.
They were:

  • Bill Cheney, president/CEO of the Credit Union National Association (U.S.) ;
  • John Kutchey, deputy executive director and chief operating officer of the National Credit Union Administration (U.S.);
  • David Phillips, president/CEO of Credit Union Central of Canada;
  • Andy Poprawa, president/CEO of the Deposit Insurance Corp. of Ontario (Canada);
  • Mark Lyonette, chief executive of the Association of British CUs Ltd.; and
  • Martin Stewart, head of United Kingdom's Banks and Mutuals of Great Britain's Financial Services Authority.
Click to view larger image Regulators don't write the rules, they just enforce them, said Canada's Andy Poprawa.
Topics ranged from the International Credit Union Regulators' Network, which Poprawa chairs and for whichWOCCU serves as secretariat, to the impact of Basel III and the correct balance to properly enforce financial regulations that enable credit unions to operate both safely and effectively. Both sides admitted that balance was sometimes difficult to find and maintain, with a need to differentiate between complex commercial banks and consumer-focused credit unions.

"In Great Britain, we're a small segment and we're worried we'll be swept up with other financial institutions," Lyonette said. "Fortunately, credit unions are getting good political and public support."

To some panelists, the swing away from traditional "light touch" regulations to a tougher stance raised concerns about the future of the movement.

"Credit unions aren't asking for more regulation," CUNA's Cheney said. "If we continue down the path we're on without distinction between banks and credit unions, we may end up with no local financial institutions."

"Remember that regulators don't write the rules," Poprawa cautioned, speaking for regulators everywhere. "It's not us you have to convince, but your respective governments."

Click to view larger image Don't lose sight of credit unions' democratic process when selecting board members, stressed audience member Penny Reeves, Canada.
The group also discussed regulatory impact on small start-up credit unions and the need for directors educated in a broad range of skills to provide effective oversight for their institutions. A better educated and balanced board on which members have financial services industry experience will help keep the credit union on track and moving in the direction of member service, according to Stewart.

"But let's not lose sight of the fact that credit union directors are elected by the members," said Penny Reeves, a director for Canada's Servus CU and a former World Council director, who raised her question from the audience. "We can't afford to lose that democratic principle."

All regulators on the panel agreed that credit unions got good marks during the financial crisis for helping consumers instead of turning their backs on them like many banks. The resulting good will follow credit unions well into the future, according to Kutchey.

"In the U.S., credit unions were a shining symbol of service during the financial crisis," Kutchey said. "Bank Transfer Day [Nov. 5, 2011, when 1.3 million Americans began moving their money from banks to credit unions] also had a positive outcome for credit unions."

Continued global advocacy by WOCCU will be critical to helping set the regulatory tone for international groups like the Basel Committee on Banking Supervision, as well as providing appropriate reference points for local regulators to better steady the regulatory pendulum from swinging too far in the wrong direction, the panel said.

Click to view larger image We need to exercise restraint in enacting new regulations, said Canada's David Phillips as panel moderator Louise Petschler looked on. (Photos provided by the World Council of Credit Unions)
"In Canada, the prime minister established a body that operates on the one-to-one rule," Phillips said. "If you're going to draft a new regulation, you have to repeal an existing regulation that has similar financial impact. That speaks to the need for exercising some restraint on our regulatory burden."

The day continued with breakout sessions on ethical investing, attracting members through social media, creating integrated credit union system business models and the new face of technology fraud. A special session on building the credit union brand took a look at World Council-led efforts by credit union and trade association professionals in Australia, Canada and the U.S. to rebrand the global credit union movement. Results from the session will be used in the next phase of the project's development process.

The 2012 World Credit Union Conference ends today with a closing general session presentation by Bank 2.0 author Brett King, World Council's annual awards ceremony and reception at the historic Gdańsk shipyard, the birthplace of Poland's Solidarity movement.

Vermont CU says its targeted in bank battle

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MONTPELIER, Vt. (7/18/12)--Vermont State Employees CU (VSECU)  has filed an appeal with the Vermont Department of Financial Regulation (DFR)  after DFR issued a cease-and-desist order notice to prevent VSECU from using the word "banking" in its marketing, communications, and ads to describe its services.

VSECU, a $573 million asset credit union based in Montpelier, is the only credit union with statewide field of membership in Vermont and believes it is "being unfairly targeted in a battle with banks," it said in a press release Monday.  The DFR oversees both state-chartered banks and credit unions in Vermont.

The battle is over a disagreement about who can and cannot use the word "banking" to describe the services offered by a regulated financial institution. DFR believes the word is reserved for banks only and intends to forbid VSECU from using it, the release said.

DFR served a notice June 18 of intent to issue a cease-and-desist order that would prohibit VSECU from using the terms "[to] bank" and "banking" in its marketing, communications and advertising.

Over the past several months the credit union provided evidence to DFR that "clearly shows this action is misguided and will unfairly inhibit the growth of cooperative not-for-profit banking for Vermonters," the credit union said.  "DFR has not changed its position, and it is pressing forward apparently because of continuing complaints from bankers. VSECU intends to fight this notice and vigorously defend the right to freedom of speech and to advance credit union banking for all Vermonters."

"We're not sure where this issue will go from here," said VSECU CEO Steve Post. "We're prepared to follow this through to the end, regardless of how long it takes to ensure that we can continue to tell our story using a vocabulary that is simple, honest and commonly understood," he said in a written communication to VSECU members.

VSECU filed its appeal on Monday and is waiting for a hearing to be scheduled. Its petition for declaratory relief indicates that DFR's proposed order "is unsupported by law, illegal, unconstitutional on its face and as applied to VSECU, and would open VSECU to substantial future penalties and damages if it were to be entered as a final order."

The DFR in its proposed order cited Section 14103 of title 8 in the state law that says:

"No person shall advertise or put forth any sign as a bank, banking association or trust company, or in any way solicit or receive deposits or transact business as a bank, banking association, financial institution or trust company, or use the words 'bank,' 'banking association,' or 'trust company' or other similar sounding word or name unless it is a financial institution reporting to and under the supervision of the commissioner or is authorized to conduct such business in this state under federal law, or unless the commissioner approves the activity or word or name used in writing after giving due consideration for whether the activity, word or name will confuse or mislead the public as to the nature of the business of the entity."

The department's proposed order said the credit union is not one of the entities that may use these words  "or any other similar sounding word or name, including but not limited to 'banking,' 'banker,' 'banking co-op,' 'banking cooperative,' and 'not for profit banking cooperative,' to describe itself, its services, or its activities."  These words are "limited to financial institutions" and using them "is misleading and, at a minimum, significantly blurs the lines between a credit union and a bank and will confuse the public," the DFR order notice said.

Court documents filed by VSECU maintain it offers the same financial services as a bank does, is engaged in the "business of banking" or the "banking business," and is classified under Vermont and federal law as a "financial institution."  It noted the DFR had direct knowledge of its use of the word "banking" in its ads for a five-year period and did not take any regulatory action, and DFR as recently as June 13 "acknowledged that some of VSECU's use of banking and [to] bank  in its advertisements is permitted."

VSECU's  petition makes these points:

  • The state law does not prohibit a credit union from using the words "banking," "[to] bank," or "banking cooperative" to describe its activities or its form of entity.
  • State law is pre-empted by federal law, as determined by the National Credit Union Administration.
  • Applying the state law to prohibit VSECU from using "banking" and "banking co-op" would violate the Vermont Common Benefits Clause because VSECU competes directly with banks and federal credit unions in accepting deposits and lending money, which fall under the generic term, "banking."
  • The order would violate VSECU's First Amendment right of free speech, and it is vague and overly broad, violating the credit union's due process rights under the Fifth and 14th Amendments to the U.S. Constitution.
  • The department should refrain from arbitrarily asserting a new position with the use of the words to describe the activities of state chartered credit unions, the credit union argued.

Pa. CUs assets up 6 in 1Q

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HARRISBURG, Pa. (7/18/12)--Pennsylvania credit unions grew at a 6% annual rate during the first quarter to reach more than $37 billion in assets, according to the Pennsylvania Credit Union Association (PCUA).

Membership in the 520 Pennsylvania credit unions grew by 2% to a record 3.7 million members, said PCUA's new, enhanced Pennsylvania Credit Union Profile, a quarterly statistical analysis of credit unions using data from National Credit Union Administration call reports.

The report also compares credit union statistics with those of commercial banks and details other indicators such as unemployment rates, housing prices and inflation rates.

On a year-over-year basis, Pennsylvania credit unions grew: 6% in assets, 4% in loans, 6% in savings, and 2% in membership.

Nationally, credit unions grew by 7% in assets, 2% in loans, 7% in savings, and 2% in membership. There are 7,162 credit unions with more than $1 trillion in assets and 94 million members operating in the U.S.

"Providing statistical analysis regarding the state of an industry is an important function of a trade association," said PCUA President/CEO Jim McCormack. "Our improved version not only provides a snapshot of the credit union movement, but also provides comparisons of credit unions to banks, along with other economic indicators that impact operations."

Micro branch delivers in-line fin ed to underbanked

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OAKLAND, Calif. (7/18/12)--Self-Help FCU in East San Jose, Calif., is delivering "in-line" financial education to help lead low-income people to economic opportunity and security, according to the National Credit Union Foundation (NCUF).

Pictured is a flier for Self-Help FCU's "5 for me" saving account, which was developed to encourage unbanked check-cashing customers to open savings accounts and start the habit of saving regularly. It is a basic savings account with an automatic savings feature tied into check-cashing transactions. When members open this account, they agree to have $5 automatically transferred into it every time they come in to cash a check. (Photo provided by Self-Help CU)

The credit union received an NCUF Financial Education Grant this year to implement, analyze and refine its in-line education model, which delivers 'bite-size' financial management concepts at the teller line when consumers are focused on their financial decision-making. The new education model is being piloted in Self-Help FCU's Micro Branch, a check-casher credit union hybrid designed to meet the needs of unbanked families.

"By providing educational interventions during financial transactions and coupling them with access to asset-building products and services, Self-Help FCU creates opportunities to transition education into action and effectively change financial behavior," said Jeannine Esposito, Self-Help communications and development associate.

Established in January 2010, Self Help FCU's Micro Branch serves East San Jose, Calif., which consists mainly of Latino immigrant population. Based on the one-mile-radius census data around the branch's location, there are an estimated 20,000 unbanked and under-banked Latinos. In California more than 47%--or nine million--Latinos are unbanked, with nearly 200,000 in San Jose, said NCUF.

As a result, alternative providers--such as check cashers, pawn shops, consumer finance companies and payday lenders---have emerged to fills a void in financial services.

"The people in check-cashing lines are missing something valuable: a place to save money, the chance to develop or repair credit ratings, personal security from robbery, and access to responsible credit," said Lois Kitsch, NCUF national program director. "These basic financial services are the gateway to financial stability and capital access, which are critical steps toward upward economic mobility."

The Micro Branch attracts low-wealth customers where they live by:

  • Providing relevant and accessible transaction, depository and credit products;
  • Being located in their neighborhood, with the extended hours they need; and
  • Being perceived as both familiar and supportive, through design and staffing.
As customers establish relationships with the Micro Branch, member service representatives nudge them toward products and services such as credit union membership and savings accounts that can assist them in building assets and achieving financial self-sufficiency. The Micro Branch serves 1,538 customers, and 20% of them have become members of the credit union. All customers received initial education when they registered with the branch to cash checks.

In the Micro Branch's first year of operation, Self Help had a significant impact in the area and proved its ability to attract customers. Now in its third year, Self Help FCU is focused on building the financial stability of its members.

Its in-line financial education consists of:

  • Teller line interventions--Delivering targeted scripts and /or marketing materials to customers at the point of transaction that nudge them toward an account, a savings product or a credit-building loan.
  • Community outreach interventions--Using the same marketing materials and scripts when participating in local community events, including neighborhood resource fairs, volunteer income tax assistance site days, non-profit partners' open houses, and so on.
  • In-branch marketing interventions--Creating posters, post cards and other marketing collateral designed to provide "bite size" education, delivered in an interesting and thought-provoking manner. For example: "Did you know the average Micro Branch consumer spends more than $300 in check-cashing a year and that the average Micro Branch member spends an average of $65 in account fees a year?"
  • Cross-selling savings accounts--Interacting with customers during their check-cashing transactions so they will open a "5 for Me" savings account. Self Help FCU incorporated the behavioral economic concepts of frictionless savings, the power of defaults, and future commitments with its on-the-ground experience in serving the unbanked to create the savings product.
  • Evaluation and analysis--Holding regular team meetings to review successful interventions and share best practices, which augments training materials for staff.
  • Staff training--Incorporating training into weekly team meetings to review the introduction of new marketing interventions, practice teller-line interventions and review community event interventions.
Also, during the second half of 2012, Self Help FCU's in-line financial education activities will consist of:

  • Market research (quantitative)--A data-driven analysis of its customer base to determine which customers have progressed along the product suite. For example, the credit union looks at which check-cashing customers decided to open an account and how long it took.
  • Market research (qualitative)--Phone and in-person interviews or focus groups conducted to understand how customers are using products and what interventions have worked on them.
  • Customer profile flags--Flags in Self Help FCU's core processing system of potential clients who share characteristics from their success stories and are prime for cross-serving opportunities.
The long-term goal is to use the Micro Branch and in-line education model for any unbanked and underbanked population statewide and nationwide, potentially reaching millions of individuals, said NCUF.

Mexicos Ramirez receives Global Womens Athena Award

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Dolores Rivera Ramírez (center) received the 2012 Athena Award from the Global Women's Leadership Network.
GDANSK, Poland (7/18/12)--The Global Women's Leadership Network's 2012 Athena Award was given to Dolores Rivera Ramírez, general manager of Caja Zongolica in Veracruz, Mexico. Rivera was honored with the annual award at the Global Women's Leadership Forum, held in conjunction with World Council of Credit Unions' (WOCCU) World Credit Union Conference, taking place this week in Gdańsk, Poland.

The award honors outstanding achievement in support of credit union development, particularly as it relates to worldwide credit union women's leadership development.

Rivera has been a key leader in the international movement since starting a credit union in 1994 to meet the needs of poor residents in her rural community in Mexico's Veracruz state. Under her leadership, the credit union grew to more than 40,000 members.

Rivera has worked with WOCCU since 2003 to implement savings mobilization and outreach programs in Mexico. She was among the first to help pilot handheld transaction technology to deliver financial services remotely to credit union members in rural Mexico, a program that is expanding to other countries.

Gabriela Zapata (center) accepted the Athena Award for Dolores Rivera Ramirez, whose travel delays made her miss the ceremony. Zapata shares the moment with World Council of Credit Unions President/CEO Brian Branch and Global Women's Leadership Network Chair Sue Mitchell at World Credit Union Conference in Gdańsk, Poland.  (Photos provided by the World Council of Credit Unions)
"The future of financial services lies in electronic delivery to members when and where they want those services," said Brian Branch, WOCCU president/CEO. "The success of Caja Zongolica and the transferability of the lessons they learned will help move the global credit union movement forward in important and meaningful ways."

Caja Zongolica capitalized on its existing Semilla Cooperativa [Cooperative Seed] program, through which the credit union delivers services by sending representatives to members in remote areas. Rivera helped expand the World Council program and credit union outreach using handheld transaction devices, an experience she shared with Global Women's Leadership Forum participants in Las Vegas in 2010.

Based on information gained during that presentation, Ventura County CU in Ventura, Calif., adapted the program to serve local farm laborers.

International development professional Gabriela Zapata, consultant with the Consultative Group to Assist the Poor, accepted the award on behalf of Rivera, who experienced travel delays that prevented her from attending Saturday's awards ceremony.

The Global Women's Leadership Network, co-founded by WOCCU and the Canadian Co-operative Association, provides women with the opportunity and resources to make a measureable difference in each other's lives, and in their credit unions and communities. The international network, which meets annually in conjunction with the World Credit Union Conference, engages members with professional and personal development through social media and educational forums and provides the tools for women to connect and seek confidential advice from their peers.

For more information, use the link.

CUAD announces new board of directors

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BISMARCK, N.D. (7/18/12)--The Credit Union Association of the Dakotas announced the election of three board members at its annual business meeting, held June 29 in Rapid City, S.D.

Peter Butterfield, CEO of Dakota Plains FCU, Lemmon, S.D., and Shannon Webster, vice president of marketing at Town & Country CU in Minot, N.D., were newly elected to the CUAD board.

Veronica Holweger, manager of Riverfork FCU in Grand Forks, N.D., was re-elected to the board. 

Headquartered in Bismarck, N.D., CUAD serves 73 credit unions in North and South Dakota, representing more than 406,000 members, with assets in excess of $4.6 billion.

Filene report examines cooperative management

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MADISON, Wis. (7/18/12)--Modern consumers prize loyalty, particularly in the climate of distrust of financial institutions that has arisen since 2008, according to a new study from the Filene Research Institute. Loyalty is an inherent advantage of cooperatives, including credit unions, given their emphasis on democratic participation, ethics and transparency Filene said.

Loyalty can also drive growth, leading to lower costs and higher revenues, according to the Filene study, "Exploring Cooperative Management." This means loyalty should be measured systematically, the study said.

Areas that generate and build loyalty include:

  • Commitment and involvement of management to loyalty-oriented action and reinforcing behaviors;
  • Internal benchmarking;
  • Determination of member needs;
  • Analysis of the competition's capacities;
  • Ongoing measurement of member satisfaction and loyalty;
  • Analysis of feedback; and
  • Ongoing improvement.
The Filene study explores the ways credit union management should resemble and differ from the management of for-profit businesses.

Among the implications the study found for credit unions:

  • Changing need for cooperative finance. Most North American credit unions were originally organized around a group that was poorly served by existing providers. However, today most North Americans have access to an overabundance of financial services.
  • Defining a cooperative mandate. The oversupply of financial services in many communities means that credit unions must justify their existence as a cooperative in a competitive market.
  • Being risk averse. Cooperative financial institutions are, on average, more risk averse than their competitors, leading to different, market-steadying behaviors.
  • Providing reasons for growth and profitability. The traditional cooperative model has not always prioritized growth as a goal in itself, but without minimum levels of growth, profitability, and capital accumulation, the credit union business model is unsustainable.
  • Returning value to members. Boards and management have a fiduciary duty to return value to members. That value, not limited to money, may be returned in various ways, but its form should be well defined and closely monitored.
  • Engaging members. Ensuring that members' needs stay front and center is a key aspect of good cooperative leadership, said the report. To discover and address those needs in large and growing credit unions, leaders must use or, if necessary, create engagement and communication channels.

Bethpage UFCW Local 342 FCUs announce merger

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BETHPAGE, N.Y. (7/18/12)--Bethpage FCU, the largest credit union in New York, announced that the National Credit Union Administration (NCUA) has approved its merger with UFCW Local 342 FCU, Mineola, N.Y., which was effective July 1.

UFCW Local 342 FCU is a union-based credit union with $5.6 million in assets and one branch location serving 2,071 members. Its branch will close when the merger is complete, and members will be directed to the Bethpage Mineola branch or to any of its 25 other branches.

"This merger will allow former UFCW Local 342 FCU members to enjoy greatly expanded convenience, value and financial services as members of the largest credit union in New York and Long Island," said Linda Armyn, senior vice president at Bethpage.  Calling the merger "an ideal fit," Armyn noted that UFCW Local "was seeking the best solution for its members to continue to offer the extraordinary value and services of a credit union, backed by the financial standing and support of Bethpage."

Bethpage, which has more than $4.5 billion in assets, will offer 425 surcharge-free ATMs, and  full services, including commercial, residential and auto loans; home financing; title services; Individual Retirement Accounts and other savings accounts; and free checking.

Members can also obtain property and casualty insurance; homeowners and auto insurance; life, long-term care and disability insurance, and investment services through Bethpage Investment Strategies. They also will gain access to mobile and online banking and Bethpage's Shared Branching/Banking services.

CU System briefs (07/17/2012)

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  • FARMERS BRANCH, Texas(7/18/12)--Two Texas CUs--Coastal Community FCU in Galveston and Resource One CU in Dallas--will receive the Juntos Avanzamos (Together We Advance) designation for their Hispanic outreach programs from the Texas Credit Union League, the league said Tuesday (LoneStar Leaguer July 17). In August, the credit unions will be presented a flag that designates that they are committed to serving the emerging Hispanic market. "Through the process, we were able to identify opportunities for improvement, and also learn how we could better leverage our strengths," said Resource One CU President/CEO Jim Brisendine. "It is our hope that this designation as a Juntos Avanzamos credit union will illustrate our commitment to meeting the financial needs of this community," he told the league …
  • HARRISBURG, Pa. (7/18/12)--A staffer from Trevose, Pa.-based TruMark Financial CU met recently with state Rep. Curtis Thomas (D-181)  at his district office.  Randi Marmer, the credit union's assistant vice president of community relations, met with the longtime credit union supporter, who wanted to learn more about the credit unions branch and services in his district. Marmer provided insight about the North Philadelphia branch and the credit union's partnership with Asociacion Puertoriquenos en Marcha.  The credit union volunteered to assist Thomas at upcoming community forums and plans to participate in his Senior Expo on Aug. 2 to discuss the benefits of credit union membership and the scams targeting the elderly. Shown are Marmer, Thomas, and Legislative Assistant Natalie Davis. (Photo provided by the Pennsylvania Credit Union Association) …

CUANY website adds live online chat support

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ALBANY, N.Y. (7/17/12)--The Credit Union Association of New York (CUANY) announced Monday it is now offering live, online chat support through its website.

Credit unions can click the Live Support graphic on the bottom or right of most association webpages on the site to chat instantly with a member of the association's member services team.

The option will be available during CUANY's regular business hours, 8:30 a.m. to 4:30 p.m. Monday through Friday.  Users also can submit a message during offline hours, which will be addressed the next business day, said the association.

"This new feature furthers our goal of providing member credit unions with comprehensive, convenient support, said CUANY President/CEO William J. Mellin. "Whether you prefer to send an e-mail, pick up the phone or chat instantly online, our team is here to offer expertise and assistance."

CU System briefs (07/16/2012)

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  • ST. LOUIS (7/17/12)--A Riverview, Mo., man has been arrested and charged with robbing a branch of St. Louis (Mo.) Community CU Friday. Quentin A. Quinn, 35, was arrested shortly after a man entered the credit union at about 2:15 p.m. and demanded money. No weapon was displayed. Quinn was charged Saturday with robbery in the first degree (Post-Dispatch July 14) …
  • ST. HELENS, Ore. (7/17/12)--Moviegoers Friday in St. Helens, Ore., will get a treat when St. Helens Community FCU takes over the opening night of the new Batman sequel, "The Dark Knight Rises" at Columbia Theatre. The credit union will pay for the first 350 guests' movie tickets, plus drinks and popcorn. Guests also will enjoy games, a photo booth and giveaways. The event will provide the credit union an opportunity to showcase its Kasasa Cash and Kasasa Tunes free checking accounts. Kasasa accounts offer high interest or digital media downloads, and worldwide ATM fee refunds, said the $160 million asset credit union's press release …
  • PLEASANTON, Calif. (7/17/12)--Patelco CU has released a new mobile banking app feature, Anywhere Deposit, that will enable members to deposit checks into their accounts using their iPhone and Android phones. The new service will reduce the frequency of in-person branch visits and speed up the deposit process, said Ryan Misasi, interim chief operating officer at the Pleasanton, Calif.-based Patelco. "This technology is changing the way people bank, and we pride ourselves on our ability to innovate our online and mobile service offerings in response to our members' growing expectations and to reach a new generation of users," Misasi said. Anywhere Deposit will be ideal for members without flexibility to conveniently visit a branch--including those who travel frequently or who do not live or work near a branch. Patelco's online banking members can download the app to their phone, take a picture of the check with account numbers and deposit amounts visible, and send the image to Patelco. There is no fee for Anywhere Deposit; however, an individual's cellular plan may include message and data rates that would apply, said the credit union …

CUs down under exploring mobile payment platform

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CANBERRA, Australia (7/17/12)--A group of more than 20 Australian credit unions is meeting, along with mutual banks, to explore providing a mobile payment platform to its members.

Credit Union Services Corporation Australia Limited (CUSCAL), the group's collectively owned electronic banking transaction provider, is facilitating the meetings (The Australian July 17).

The meetings are in the early exploratory stage, a CUSCAL spokeswoman told the newspaper.

Credit unions are looking at the new payment platform to elevate mobile banking services and to prevent younger members from leaving for major commercial lenders, the paper said.

It is believed the group is assessing Google's Android-based mobile platform Google Wallet as one of the potential payment systems, the paper said.

In second vote Montana First members OK merger

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SPOKANE VALLEY, Wash. and MISSOULA, Mont. (7/17/12)--In a second vote, members of Montana First CU in Missoula, Mont., elected to merge with $437 million asset Horizon CU in Spokane Valley, Wash., after first voting down the proposal in January.

The website of $64 million asset Montana First confirmed the approval, with an announcement saying, "You made it happen. Thanks for your YES vote." 

Balloting was conducted June 4 through June 18, after the merger was approved in May by the National Credit Union Administration.

Montana First CU members rejected the first merger proposal because members complained about a lack of information prior to the first vote, said Montana First CEO Chris Sisco (News Now June 12). Some also were concerned about moving control to an out-of-state entity.

Before reapproving a new plan this spring, the Montana First CU board hosted five public meetings to share information and answer questions.

The credit union also had launched a marketing campaign that included TV, billboard and newspaper messages urging members to approve the merger.

Better Choice presented at Ford Foundation convene

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HARRISBURG, Pa. (7/17/12)--The Pennsylvania Credit Union Association (PCUA) presented its payday lending alternative program, Better Choice, last week at the Ford Foundation's Payday Loan Reform and Consumer Credit Innovation Convene at the Federal Reserve of Chicago.

Mike Wishnow, senior vice president, communications and marketing at the Pennsylvania Credit Union Association  (PCUA) presents PCUA's Better Choice payday lending alternative to an invitation-only innovation convene at the Ford Foundation's Payday Loan Reform and Consumer Credit Innovation Convene in Chicago. (Photo provided by the Pennsylvania Credit Union Association)
Mike Wishnow, PCUA senior vice president, communications and marketing, discussed the program at the invitation-only convene (Life is a Highway July 16).  

About 50 academicians, philanthropists and financial services providers attended the event, which was hosted by the Center for Financial Services Innovation, the Center for Responsible Lending, the National Federation of Community Development Credit Unions and Woodstock Institute.

"Pennsylvania's Better Choice program was very well-received," Wishnow said. "Members of the audience took note that it is possible to do small-dollar loans at a fair price while at the same

time [helping] consumers enter the mainstream through their financial institutions."

Since it launched in 2006, the program has issued 53,714 loans totaling nearly $26 million for members' short-term cash needs. PCUA said 79 credit unions across the commonwealth participate. When compared with traditional payday lending products, the program has saved borrowers more than $18 million, said PCUA.

Walesa highlights World CU Conference opening

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GDANSK, Poland (7/17/12)--Lech Walesa, former head of Poland's Solidarity party and the Nobel Peace Prize winner who led his country to freedom from communist suppression, called on the global credit union movement to start its own revolution, working at the local level on behalf of its members, during the opening ceremonies Sunday at the World Credit Union Conference in Gdańsk, Poland.

Walesa said he hopes to be the "last of the big revolutionaries" to carry the world into the 21st century. The conference is presented by the World Council of Credit Unions (WOCCU).

Lech Walesa, former president of Poland, closed the World Credit Union Conference opening ceremonies Sunday in Gdańsk, Poland.
Poland was one of 50 countries represented at the International Parade of Flags, which opened the World Credit Union Conference.
World Council of Credit Unions Chair Manuel Rabines emphasized credit unions' reason for being during his opening address to the World Credit Union Conference.
World Council of Credit Unions First Vice Chair Grzegorz Bierecki, Poland's credit union trade group president/CEO and former member of the Solidarity Party, thanked participants in the World Credit Union Conference for the help they have given Polish credit unions, which have become some of the most successful in the world.  (Photos provided by the World Council of Credit Unions)
"In order to lead the world into the 21st century, we need to reach for values," Walesa told a capacity crowd at the Polish Baltic Philharmonic Hall. "There is great service that you can provide in helping us achieve this revolution, and you have already started it by joining us this year in Gdańsk."

Walesa was one of three dignitaries to welcome conference participants, a crowd of nearly 1,400 attendees from 50 countries. The capacity crowd caused registration to close a week before the conference began Sunday.

Welcoming comments were given by WOCCU Chair Manuel Rabines, general manager of Federación Nacional de Cooperativas de Ahorro y Crédito del Perú (FENACREP), the trade association serving Peru's credit unions. A credit union revolution begins and ends in its ability to serve members, he said.

"We hope each of you will make a difference in the lives of your members by offering quality services," Rabines said. "We hope that you never forget that this is your reason for being."

The conference is co-hosted by the National Association of Co-operative Savings and Credit Unions (NACSCU), Poland's credit union trade group. WOCCU First Vice Chair Grzegorz Bierecki, NACSCU president/CEO, offered participants a lesson in Polish credit union history, in which the global credit union movement played an integral part.

"Twenty years ago, six young men dedicated themselves to reviving the Polish credit union movement from nothing," Bierecki said. "This year's conference gives us the opportunity to thank so many of you for the help you have given to our credit unions. It is proof that solidarity will prevail."

Prior to Sunday's opening, the conference hosted several other events, including the fourth annual forum sponsored by the Global Women's Leadership Network on Sunday. Seventy women credit union leaders worldwide gathered to network and hear from various speakers, including branding expert Jiao Zhang, partner with the U.S. firm Attune, and international development professional Gabriela Zapata, consultant with the Consultative Group to Assist the Poor.

The Worldwide Foundation for Credit Unions' Golf Outing on Saturday raised nearly $100,000 to support the network and WOCCU programs that benefit women and their families in emerging countries.

Participants in WOCCU's Young Credit Union People (WYCUP) program also held its networking and educational session Sunday afternoon, the first of several sessions devoted to meeting the needs of credit union professionals and volunteers age 35 years and under. The 37 participants heard from WYCUP alumnus Grzegorz Buczkowski, now president of the Co-operative Savings and Credit Union Mutual Insurance Society in Poland, on leadership challenges and lessons learned with the credit union movement.

The World Credit Union Conference concludes Wednesday with a closing reception at the historic Gdańsk shipyards, where the Solidarity movement won Poland's freedom from communism in 1990.

CUs Dare to be different says Harvard professor

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GDAŃSK, Poland (7/17/12)--Creating something different is often more important than creating something better, marketing expert Youngme Moon told a general session audience Monday at World Council of Credit Unions'  (WOCCU) World Credit Union Conference in Gdańsk, Poland.

When it comes to capturing market share, credit unions must differentiate themselves, marketing expert Youngme Moon told a general session audience at World Council of Credit Unions'  World Credit Union Conference in Gdańsk, Poland.
Moon, the Donald K. David Professor of Business Administration and chair of the Harvard University MBA program, shared her differentiation message with attendees at the conference, currently under way in Gdańsk.

Moon pointed her message directly at the global credit union movement, stressing the need--as well as the opportunity--for financial cooperatives to stand apart from the crowd.

"Right now there is a once-in-a-generation opportunity to grow your membership," Moon said in her keynote presentation. "There is disarray in the financial services industry, dissatisfaction among consumers, and the biggest financial institutions generate the most distrust. But are you different from your competitors in a way that's easily understood by consumers?"

Businesses have a tendency to make changes in lockstep with their competitors, Moon said, which makes them no more than another provider in an already crowded field. Companies able to capitalize on their differences--even to the point of emphasizing their perceived negatives in their product or service portfolio--stand a better chance of creating a persona unlike that of competitors and setting themselves apart. Add to that a commitment to members, and credit unions stand a better chance to differentiate their enterprises in distinctive and successful ways.

"You can't build a brand that's different without passion," Moon said. "For credit unions, differentiation comes from a sense of irreplaceability, and that will create a strong sense of loyalty."

Credit unions thrive when they consider what is best for the member, World Council of Credit Unions President/CEO Brian Branch told a general session audience at the World Credit Union Conference.
Loyalty to credit unions from members, as well as from credit unions to their members, has been an essential part of the global credit union movement's success, according to Monday opening speaker Brian Branch, WOCCU president/CEO. Branch shared credit union stories from Colombia and Mexico to Sri Lanka and Kenya, stressing the commonalities in member needs from country to country and culture to culture and how credit unions strive to meet them.

"It is all about what is best for the member," Branch told the general session audience. "As credit unions, we have a set of values that champion the common person and emphasize the financial empowerment of those members."

In recent years, two themes have emerged as critical to the future of credit union success, Branch said. The first is messaging and the growing need to articulate the credit union advantage in ways that are compelling and attractive to consumers. The second is increased accessibility, defined as delivering credit union services remotely and generally through handheld electronic devices to members whenever and wherever they need them. These and other key attributes will help define the credit union difference, he said.

Between educational sessions at the World Credit Union Conference, participants networked with their peers. (Photos provided by World Council of Credit Unions)
"We operate locally and cooperate globally," Branch added. "This is how we will build a credit union community."

Monday finished with breakout sessions that followed learning tracks on leadership and strategy, technology and innovation, compliance and regulation and international credit union movement trends. Specific sessions focused on redefining board member roles; meeting new compliance standards, including Basel III guidelines; and creating a "mobile wallet" to help introduce financial services to the rural poor.

The 2012 World Credit Union Conference runs through Wednesday. It will include a panel discussion featuring credit union leaders and regulators from three countries striving to seek common solutions, a closing general session presentation by Bank 2.0 author Brett King, World Council's annual awards ceremony and a closing night reception at the historic Gdańsk shipyard, the birthplace of Poland's Solidarity movement.

St. Helens hires new CEO terminates merger plan

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ST. HELENS, Ore. (7/1712)--With the hiring of a new CEO, St. Helens (Ore.) Community CU has called off plans to merge with Wauna FCU.

St. Helens Community CU, with $166 million assets, Friday announced the hiring of Brooke Van Vleet, a 20-year veteran of the credit union movement. Van Vleet most recently served as chief administrative officer at First Tech FCU, Palo Alto, Calif.

In her first official action, Van Vleet recommended, and the St. Helen's board agreed, that the credit union terminate plans to explore a merger with $143 million Wauna FCU, Clatskanie, Ore.  

The two credit unions signed a nonbinding letter of intent "to explore the benefits associated with merging," according to a statement released July 9 by the credit unions (News Now July 10).

"My focus needs to be on the day-to-day operations and getting up to speed quickly on current initiatives," said Van Vleet.  

"While the board still believes we should always explore strategic options that may benefit our members, we concur with Van Vleet's assessment that the credit union's energy currently needs to be focused on maximizing value to the membership through our current initiatives," said Lea Chitwood, chairman of the St. Helen's CU board.

CUNA announces ICU Day materials

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MADISON, Wis. (7/17/12)--The Credit Union National Association (CUNA) has released marketing materials for International Credit Union (ICU) Day 2012--with the theme "Members Matter Most," selected by the World Council of Credit Unions.



ICU Day will take place on Oct.18.

Materials available include:

  • Posters;
  • T-shirts;
  • Balloons;
  • Piggy banks;
  • Bottle openers;
  • Cork coasters;
  • Credit card protectors;
  • Halloween bags; and
  • Branded bags of Skittles.
 

Credit unions have celebrated ICU Day on the third Thursday of October since 1948. The day reflects upon the credit union movement's history and promotes its achievements. It is a day to recognize the dedication of those working in the credit union industry, appreciate current members and invite eligible consumers to join credit unions.

Credit unions and associations worldwide traditionally celebrate ICU Day with open houses, contests and picnics, fairs and festivals. Some hold competitions and essay or art contests for young members.

"Members are the focal point this year, just as they are every single day in credit unions," said Joanne Sepich, CUNA's ICU Day coordinator. "While credit union staff always put members first, this is an opportunity to remind members that credit unions are different by design--members are what make credit unions unique and set them apart as for-people, not-for-profit, cooperatively owned financial institutions."

Cheney attends unveiling of statues in Poland

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GDANSK, Poland (7/17/12)--Credit Union National Association (CUNA) President/CEO Bill Cheney
Click to view larger image Credit Union National Association President/CEO Bill Cheney, right, attends the unveiling of bronze statues honoring President Ronald Reagan and Pope John Paul II for their work to end communism in Poland.  The event was held Saturday in Gdansk, Poland, where the World Council of Credit Unions' World Credit Union Conference is meeting this week. At center is Gdansk Mayor Pawel Adamowicz. (Photo provided by CUNA)
attended the unveiling of a pair of bronze statues honoring President Ronald Reagan and Pope John Paul II on Saturday in Gdansk, Poland, for their work to end communism in that country.

Cheney was there to attend the World Credit Union Conference, which began Sunday in Gdansk. The conference, presented by the World Council of Credit Unions, ends Wednesday.

The U.S. president and Catholic leader have been widely credited in Poland with helping to topple communism there 23 years ago. Gdansk is the birthplace of Lech Walesa's Solidarity movement.

Also attending the event were about 120 former Solidarity activists, many of whom were imprisoned in the 1980s for their roles in organizing or taking part in strikes against the communist regime.

The bronze statue was erected in the lush seaside President Ronald Reagan Park in Gdansk.

Walesa was the conference's opening day speaker. (See related story: Walesa highlights World CU Conference).

Mazuma CU doubles Facebook likes in a month

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KANSAS CITY, Mo. (7/16/12)--A new social media campaign launched in June has doubled the number of page "likes" for Mazuma CU's Facebook page.

The Kansas City, Mo.-based Mazuma said it is not new to using social media to engage members in the greater Kansas City community but added the success of its Sponsored Story campaign on Facebook was "pleasantly surprising."

A Sponsored Story is an ad that acts much like a post from a Facebook friend. The story highlights something friends have an interest in and is shared with their network of friends on Facebook.

After a month of the Sponsored Story ads on Facebook, the credit union found that more than 24,000 people saw Mazuma's ad--doubling the page "likes" for its Facebook page. The campaign simply placed testimonial-like ads on its Friends of Friends pages.

"Mazuma's campaign objective using Facebook was to ramp up page likes and traffic to Mazuma's Facebook page," said Brandon Michaels, president/CEO of the $475 million asset credit union. "The key to success in advertising on Facebook is trying new things and seeing what works; finding out what people respond to. We're launching new ad campaigns all the time, most recently our Summer Auto Loan campaign."

The credit union employed Facebook's ad manager function to geo-target the campaign to include only people within the Kansas City metro area, which makes the ad expenditure "very efficient," said Andy Dickhut, Mazuma's account supervisor at Beyond Marketing LLC, Lenexa, Kan.

"Mazuma took advantage of Facebook's CPC (cost-per-click) budgeting tool so it only pays when someone clicks on the ad.  Mazuma can also control its budget by setting a daily spending limit," said Dickhut.

The credit union said it plans to continue to track and use Facebook Sponsored Story advertising. "It's always exciting to discover new opportunities to engage with our members and the community," Michaels said.

N.J. league working with MVC on electronic lien titling

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TRENTON, N.J. (7/16/12)--The New Jersey Credit Union League is working with the state's Motor Vehicles Commission (MVC) to bring about electronic lien titling (ELT) to help reduce costs related to providing auto loans to members, the league reported.

The league met with MVC Chief Administrator Raymond Martinez and senior management in February, and last month representatives of three credit unions met with MVC policy and operational staff to discuss the current paper-based system and potential parameters for a new electronic system (The Daily Exchange July 13).

MVC has indicated it aims to establish ELT and it will conduct indepth stakeholder meetings in August, said the league. The meetings will provide auto lenders and dealers an opportunity to weigh in on proposed procedures and potential rules.

MVC currently is surveying the state's auto lenders and dealers and consulting with other states, ELT vendors and the American Association of Motor Vehicle Administrators to identify model ELT protocols and best practices, said the league, which urged the state's credit unions to participate in the survey.

"The MVC has been very cooperative in working with us on this and appears to be ready to move forward as quickly as possible," said league President Paul Gentile.  "It's extremely important that we take advantage of this opportunity to help shape the new program and demonstrate the broad support among our members for this initiative," he said.

Catalyst adds two new board positions

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PLANO, Texas (7/16/12)--Catalyst Corporate FCU has added two new directors to its expanded board of directors.

Joining the board are Trevor Tokishi, executive vice president of Valley Isle Community FCU in Kahului, Hawaii, and Bill Before, vice president/chief financial officer (CFO) of Spokane (Wash.) Teachers CU. Tokishi has been with Valley Isle since 1999. Before has held his position since 1989.

Last week, the board had announced it had increased the number of directors to 11 from nine to provide greater representation of its expanding membership, the result of its consolidation with the former Western Bridge Corporate FCU.  The new directors are with credit unions that belonged to the Western Bridge Corporate.  They were recommended for appointment by Catalyst Corporate's Governance Advisory Council.

Other directors and officers announced at the June 22 annual meeting are:

  • Chairman, Lin Hodges, president/CEO, Associated CU, Norcross, Ga.;
  • Vice chairman, Rod Taylor, president/CEO, Barksdale FCU, Bossier City, La.;
  • Secretary, Ayn Talley, president/CEO, Houston (Texas) Police FCU;
  • Treasurer, Rick Hein, president/CEO, OSU FCU, Corvallis, Ore.;
  • Connie Cofer, senior vice president finance/CFO, Communication FCU, Oklahoma City, Okla.;
  • Syed Dinar, vice president/CFO, Texas Bay Area CU, Houston;
  • Michael Hooper, president/CEO, La Capitol FCU, Baton Rouge, La.;
  • John Papagno, CFO, Alive CU, Jacksonville, Fla.; and
  • Bobbie Threlkeld, president/CEO, Baptist Health FCU, Little Rock, Ark.

Wash. CUs plan merger assets would be 1B

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SEATTLE and LAKEWOOD, Wash. (7/16/12)--Two Seattle-area credit unions--Harborstone CU and Prevail CU--have announced a proposed merger that would create a $1 billion-plus institution, if approved.

A merger agreement has been signed by the boards of both credit unions, according to a message on the website of $784 million Harborstone CU, Lakewood Wash.

Members of the $235 million asset Prevail CU will be asked to vote on the merger this coming fall, according to the message.

A message on Prevail CU's website said both credit unions are in strong financial shape, but increasing competition has changed the financial marketplace, creating ever-bigger banks and new competition, such as retailers that offer financial products.

"As the economic landscape changes with advances in technology and consumer demand for access, it is clear, it would likely take Prevail CU many years to achieve the size and scale to thoroughly compete for greater market share in our tech-savvy region of the country," the message said.

Harborstone FCU cited access to more locations for members, strength and growth as reasons for the merger.

Maine league legislative events top state list

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PORTLAND, Maine (7/16/12)--The Maine Credit Union League is at the top of the list for spending for state leg­islative events, according to articles written by Steve Mistler, state house reporter for MaineToday Media, which examined events that organizations hosted and/or coordi­nated for legislators during the first and second session of the 125th Maine Legislature.

The Maine league spent slightly more than $8,000 in total hosting and coordinating of three legis­lative events from January 2011 through May 2012, the figures showed. The three events were the Maine Development Foundation's Leg­islative Bus Tour and two Credit Union Days at the State House in Augusta (Weekly Update July 13).

As a major sponsor of the bus tour, the league was one of the stops on the tour and hosted a dinner that was attended by nearly 60 legislators. The two Credit Union Days at the State House events featured breakfast and coffee for legislators in the Hall of Flags. Through the three events, nearly three-quarters of the state's legislators, including most leaders from both parties, connected with credit union representatives, said the league.

"One of our most important roles is to advocate and coordinate opportunities to build and strengthen relationships on behalf of Maine's credit unions," said John Murphy, league president. "These articles and findings reiterate how engaged and involved the league and Maine's credit unions are in the political pro­cess. This is one of the many reasons we have such strong relationships with many legislators and why Maine's credit unions are viewed so positively by most legislators."

WOCCU to design new reg framework in Paraguay

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ASUNCION, Paraguay (7/16/12)--Paraguay's government has selected the World Council of Credit Unions (WOCCU) to update the country's cooperative law and overall legal framework, including prudential norms for credit unions.

WOCCU--with funding from the Inter-American Development Bank--is working with the Instituto Nacional de Cooperativismo (INCOOP), Paraguay's regulator for cooperatives, during a five-month period to design a framework that will further protect credit union member savings and allow credit unions to better compete with other financial institutions.

Paraguay's cooperative law was established in 1994 and governs all cooperatives, regardless of their primary purpose. WOCCU's program involves a review of the 18-year-old law and INCOOP's application of it as it relates to the activity, management and operation of cooperatives.

WOCCU also will draw from its Model Law for Credit Unions publication, which was updated in 2011 and provides a sample legislative framework, as well as its corresponding Guide to International Credit Union Legislation, a compendium of credit union legislative and regulatory summaries for more than 100 countries and political provinces, and Model Regulations for Credit Unions, a matrix of regulations from 18 credit union sectors worldwide.

Paraguay's credit union association and WOCCU member, Central de Cooperativas del Área Nacional Ltda. (CENCOPAN), helped prepare the way for the current legislative initiative through its advocacy efforts on behalf of its member credit unions. A long-standing partnership with the Minnesota Credit Union Network through World Council's International Partnerships Program further aided efforts to update the country's regulatory framework.

WOCCU's program will focus on consolidating the many regulations and prudential norms, and streamlining them into Paraguay's new cooperative legal framework.

"Paraguay's credit unions have experienced impressive growth in terms of assets and operations in recent years," said Brian Branch, WOCCU president/CEO. "CENCOPAN, with support from the Minnesota Credit Union Network, has been at the forefront making sure the credit unions' socioeconomic impact in the country is understood and supported. Those efforts have laid the foundation for this initiative."

Paraguay has 47 credit unions with $718.6 million assets, according to WOCCU's 2011 Statistical Report. Credit unions hold the majority of assets among Paraguay's cooperatives, making the legislative and regulatory updates crucial to the overall strength and development of the cooperative sector. WOCCU will submit its proposed legislative and regulatory changes to INCOOP by the end of 2012.

N.Y. Maxwell Herring award recipients named

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ALBANY, N.Y. (7/16/12)--The Credit Union Association of New York announced eight recipients of its Dora Maxwell Social Responsibility Service Award and the three recipients of its Louise Herring Philosophy in Action Member Service Award.

Credit Union Association of New York first- and second-place winners of the Dora Maxwell Social Responsibility Service Awards are, from left: Mario DiFulvio, Horizons FCU, Binghamton; Wayne Winkler, Mid-Hudson Valley FCU, Kingston;  Mike Parsons First Source FCU, New Hartford;  Marsha Brauer, Clarence (N.Y.) Community & Schools FCU; James Pyra, Boulevard FCU, Amherst; and Rick Mantey, Ulster FCU, Kingston. (Photo provided by  the Credit Union Association of New York)

Click to view larger image
The credit unions receiving first-place 2012 Dora Maxwell Awards based on their demonstration of credit union philosophy and their community activities are:

  • Clarence (N.Y.) Community & Schools FCU in the $5 million to $20 million asset category for its community-wide Books 4 BUCK$ fundraiser, which benefited a Kenya orphanage run by two of the credit union's members. Donated books were sold during a one-day community book sale, and proceeds were used to stock the orphanage's new library with shelves and books.
  • Boulevard FCU, Amherst, $20 million to $50 million, for developing an employee-based volunteer group, which completed eight community service projects in 2011. Together, "The Difference" volunteer group raised money for six local charity organizations, volunteered at a local food pantry and provided eligible community members with free tax preparation.
  • Ulster FCU, Kingston, $50 million to $100 million, for its fundraising to benefit the American Cancer Society and the Gateway Foundation--a foundation to support to Gateway Community Industries Inc. Credit union staff helped coordinate the American Cancer Society Relay for Life and raised more than $8,000, winning the Business Team--Most Money Raised Award. They also helped coordinate three large fundraising events for the Gateway Foundation, raising more than $50,000 and earning a Lifetime Achievement Award from the foundation.
  • First Source FCU, New Hartford, $200 million to $500 million, for its efforts to raise funds for  the American Cancer Society and the Gateway Foundation. Staff helped coordinate the American Cancer Society Relay for Life, raising more than $8,000 and winning the Business Team-Most Money Raised Award. Staff helped coordinate three large fundraising events for the Gateway Foundation, raising more than $50,000 and earning a Lifetime Achievement Award from the foundation.
  • Visions FCU, Endicott, $500 million or more, for its relief efforts after last September's storms and floods. Despite suffering severe damage to several branches, the credit union sponsored two fundraising concerts and the publication of a photo documentary book to raise money for four relief organizations. The credit union also created a special, low-rate disaster relief loan to help members and the community recover.
In recognition of the practical application of the credit union philosophy, these credit unions were first-place recipients of 2012 Louise Herring Awards.

  • Cooperative Federal CU, Syracuse, $50 million and under, for its Matched Savings Program. The program provides low- and moderate-income members with Individual Development Accounts (IDAs) for first-time homeownership, microbusiness funding, higher education or vehicle purchases. IDAs are offered as matching grants, and the amount of funding depends upon how much the member has already saved. Each participant also receives a personalized education and counseling plan from the credit union. Fifty-eight members were enrolled in the Matched Savings Program as of Dec. 31, and more than $74,000 in matching grants were disbursed.
  • Visions FCU, $250 million and over. In 2011, the credit union focused on providing members with convenient service through mobile banking. By launching a comprehensive, multi-channel marketing campaign, Visions FCU built awareness about the three mobile banking platforms available to members: a mobile browser, text banking and a custom app for the iPhone, iPad or iPod touch. Using these platforms, members can manage their accounts, transfer funds, find current rates, make payments, locate a Visions FCU branch and more. By the end of last year, 3,200 members completed $1.4 million in mobile banking transactions with the credit union.
Winning entries for the awards go on to the national finals presented by the Credit Union National Association. The national results will be announced in March 2013.

CU System briefs (07/13/2012)

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  • CHESTERFIELD, Va. (7/16/12)--Preliminary hearings were held Wednesday for three men charged in the April 17 shooting death of Virginia State University student Tyrail H. Hughes in the parking lot of VSU FCU, Ettrick, Va. Witnesses, including credit union employees, testified at the hearing.  Witnesses said in their testimony that Hughes was shot four times by VSU student Ryan Christopher Simms, 19.  The incident began when co-defendant Khaliq H. Oliver, 19,  allegedly grabbed marijuana from Hughes without paying for it and ran. Hughes waived a gun and threatened Simms and others with him over the deal. Simms allegedly fired nine shots--including four that hit Hughes, one that hit a passerby in the foot, and one that hit a parked car. The judge certified to a grand jury charges of first-degree murder, malicious wounding and two felony firearms against Simms; first-degree murder and robbery counts against Oliver; and possession of a gun by a felon against Damon M. Wright, who was with Hughes and tried to drive him to the hospital before crashing his car. The judge dismissed charges of conspiracy to commit murder and conspiracy to distribute drugs against Oliver, and prosecutors withdrew a charge of conspiracy to distribute drugs against Wright (Richmond Times-Dispatch July 13) …
  • TEMPLE, Texas (7/16/12)--DeWayne Jordon, of Temple, Texas, was sentenced Wednesday to 15 months in federal prison for his role in a scheme to defraud area credit unions. In addition to the prison sentence, Waco U.S. District Court Judge Walter Smith ordered Jordon to undergo five years of supervised release after the prison term and to pay nearly $15,000 in restitution and special court assessments (KMIL.com July 12). According to court records Jordan allegedly admitted he used checks drawn on multiple bank accounts at various locations that had closed to establish accounts at other credit unions and banks. He allegedly opened an account at Scott & White Employees CU in Temple in March 2011 and immediately began withdrawing funds. An employee told police, who arrested Jordon. He also allegedly admitted similar schemes in Amarillo, Lubbock and Lamesa, said the documents …
  • HARRISBURG, Pa. (7/16/12)--Pennsylvania credit unions from the Wilkes-Barre and Scranton area met Wednesday with Matt Cartwright, a Democratic candidate for the 17th Congressional District, which changed significantly due to redistricting, said the Pennsylvania Credit Union Association (PCUA)  (Life is a Highway July 13). At the meeting, credit unions shared information about the industry and discussed legislative priorities, regulatory concerns and issues concerning the district. Cartwright commended credit unions for what they do for the community and their efforts to assist Scranton city employees during the city's financial hardship. He said he was not surprised that former U.S. Rep. Paul Kanjorski was such a champion to credit unions.  Cartwright said he looked up to the congressman and considered himself a fan "because he stood up for the little guy and gal. Each of you in this room hold that same philosophy and principle. I intend to continue that role when elected to office and stick up for credit union issues on a national stage." The event was hosted by Cross Valley FCU. From left are, Karen Wood, vice president of community relations, and Jeff Balestrini, vice president lending, both of Service 1st FCU; Cartwright; Ed Kaushas, president/CEO of Cross Valley FCU; and Christina Mihalik, vice president, governmental affairs at PCUA. (Photo provided by the Pennsylvania Credit Union Association) …

CU issues million dollar savings challenge

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TINTON FALLS, N.J. (7/16/12)--For the second consecutive summer, United Teletech Financial FCU is challenging its members to save a million dollars and help out local charities.

United Teletech Financial FCU, Tinton Falls, N.J., is offering members opportunities to save on interest and redirect the savings back to their community, according to the New Jersey Credit Union League (The Daily Exchange July 13).

The $306 million asset credit union said members can reduce interest rates on their mortgages and credit cards.

When the community has saved a million dollars in interest, the credit union will donate to four local charities. Upon the closing of a qualified loan, members select participating charity will receive their donation.

Donations are based on a percentage of total interest saved. The public can also vote for a People's Choice winner. The charity that receives the most votes for People's Choice will receive an additional $500 donation from the credit union.

The four charities receiving donations are Big Brothers Big Sisters of Monmouth and Middlesex Counties, Clean Ocean Action, FoodBank of Monmouth and Ocean Counties and The Salvation Army-Red Bank Corps.

"Knowing we are helping individuals save money and reduce debt is great, but it's even better knowing that we are able to contribute to such worthwhile charities," said Leo Ardine, United Teletech Financial CEO.

Members can also do something for themselves through the challenge, Ardine added. "This challenge goes beyond saving money on interest expense to teach individuals how to be more financially responsible," he said.

The Second Annual Million Dollar Community Challenge will run through Sept. 29. Last year the community saved more than $1.8 million in loan interest through the initiative, and the credit union donated $13,000 to participating charities.

Carolinas foundation completes scholarship cycle

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RALEIGH, N.C. (7/16/12)--The Carolinas Credit Union Foundation has awarded 58 students $63,900 in scholarships--along with $119,000 awarded separately by Local Government FCU, Raleigh, N.C.

"It's such a 'foundational,' if you'll pardon the pun, function of what we do but it doesn't get talked about much," John P. McGrail, president/CEO of the foundation told the North Carolina Credit Union League (The Weekly Conversation July 13).

"We have credit unions and the foundation aiding students across the state reach [to] their academic dreams. In the application process we have them discuss credit union principles and how they can apply to their own lives. Who knows? I hope we could be building some of our movement's future leaders," McGrail said.

North Carolina credit unions interested in building a designated scholarship fund can contact the foundation, which manages the scholarship funds and issues checks to designated schools.

Hayes named presidentCEO of CU Holding Co.

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LENEXA, Kan. (7/16/12)--Larry Hayes has been named president/CEO of CU Holding Co. LLC, a Lenexa, Kan.-based credit union service organization (CUSO), the company announced Thursday.

Hayes has 26 years of executive credit union experience in marketing and business development. Most recently he served as vice president of marketing and business development at First Service CU (formerly Right Choice CU) in Houston. Hayes also has served as vice president of marketing at HFS FCU, Hilo, Hawaii, and worked at other credit unions in Hawaii and California.

He started his career in Washington, D.C., with HUD FCU. Later he ran a business consulting firm focusing on strategic planning, marketing strategies, promotions, business development and financial statement analysis. He also taught classes for the former District of Columbia League of Credit Unions.

CU Holding Co. manages investments in six CUSOs--Beyond Marketing LLC, XtraCash LLC, TruHome Solutions, TruHome Title Solutions, Cooperative Payroll Solutions LLC and MEMBERS Development Co. CU Holding's first CUSO, Beyond Marketing, has been operating since 2003.

CU System briefs (07/12/2012)

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  • PORTLAND, Maine (7/13/12)--The Portland, Maine branch of Falmouth, Maine-based Cumberland County FCU was closed Wednesday after a car hit the building and smashed a window at the credit union, according to the Bangor Daily News (July 11). The incident occurred at about 9:30 a.m. when Stephen Wich, 28, of Portland pulled into the handicapped space at the credit union. Wich, who has a prosthetic leg, told police he struggled with the car's brake pedal as he pulled into the spot. No one was hurt …
  • HARRISBURG, Pa. (7/13/12)--A man wanted in connection with a robbery Tuesday afternoon of Harrisburg, Pa.-based  Belco Community CU, surrendered to police at 4:45 p.m. after a standoff at his home that lasted more than two hours (WHTM.com and WHPTV.com  July 11). The robbery occurred at 1 p.m., according to the Pennsylvania Credit Union Association (PCUA) (Life is a Highway July 12). Police said the robber did not use a weapon while at the credit union and fled with an undisclosed amount of money. The arrested man, who had not been formally identified by police, was tracked to the home after police received a description of the getaway vehicle. "Thankfully the credit union staff is safe and they did a great job in responding to the robbery in the right way," Charles DelMarcelle, executive vice president at Belco Community, told PCUA. He noted the credit union is making sure its employees "are taken care of in the aftermath of what is always a very traumatic experience."  …
  • TULSA, Okla. (7/13/12)--Tulsa-based Oklahoma Central CU opened its new headquarters and branch Tuesday at the former site of the Camelot Hotel, which was demolished nearly five years ago. The eight-story hotel was considered Tulsa's most distinctive hotel for decades, but it fell into disrepair and was demolished in September 2007. Quik Trip Corp. bought the site in June 2007 and intends to build a store in April. It sold four acres to Oklahoma Central, which built a 22,000-square-foot building to house financial services and its administrative and executive offices. The $446 million assets credit union's old headquarters will become its flagship branch (Tulsa World July 11) …
  • GARFIELD HEIGHTS, Ohio (7/13/12)--The Ohio Catholic FCU, a $156 million asset credit union based in Garfield Heights, Ohio, has named Todd Turner as its new CEO. The appointment was effective July 1. Tuner has been with the credit union since 2010. He served as chief lending officer and was promoted to chief retail officer (CRO) in 2011. He has been serving as interim CEO while continuing his work as CRO. His background includes serving as chief operating officer at Atlantic Financial Services in Massillon and as vice president, retail lending for Unizan Bank (now part of Huntington Bank) in Canton …
  • Gnadenhutten, Ohio (7/13/12)--Michael D. Hamilton, former president of the board at Tuscarawas School CU in Dover, Ohio, died Sunday at his home after a period of declining health. He was 75. Hamilton served as president of the credit union for more than 20 years. He was a teacher for 34 years and active in several community organizations. He is survived by his wife, Ingeborg; a brother, Gregory; five nieces, four great-nieces and two great-nephews (The Times Reporter July 10) …

Security company settles patent suit with six FIs

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PLANO, Texas (7/13/12)--A Plano, Texas-based security company specializing in Internet security technology has settled its patent infringement lawsuit with six financial institutions, including a credit union. 

Secure Axcess LLC said it has licensed its identity and access management (IAM) technology to the six institutions that settled. Its technology relates to the use of a security image for authentication, which is widely used by the banking industry to protect online members and customers from "phishing" and other forms of fraud, said the company's press release.

The technology was originally developed by engineers working at American Express and is covered by U.S. Patent No. 7,631,191, the company said.

Although six institutions settled with the company, 14 other financial institutions--including Bank of America, BBVA Compass, and ING Bank--remain as active defendants in the suit, which was filed in the U.S. District Court for the Eastern District of Texas.

The settlement announcement came just as another patent infringement suit was filed in a Texas district court by EMG Technology against Google over the mobile version of Google's Chrome browser. EMG claims Google's browser violates EMG Technology's "simplified navigation system" for smartphones and tablets  by "displaying mobile webpages on smartphones and tablets" (PC Magazine July 12). EMG says its patent, issued Oct. 21, 2008, uses unique inputs to manipulate a touch screen for zooming and scrolling.

EMG has filed patent infringement suits in the past. It sued Apple in November 2008, saying Apple's iPhone infringed on its patent for navigating the Web on cell phones. And it sued Microsoft in August 2009 over two patents one for navigating Internet control on a TV and the other for the method of manipulating a region on a wireless device screen for viewing, zooming and scrolling Internet content, said PC Magazine.

The EMG case is the latest in a series of "smartphone patent wars." Last month a U.S. District Judge in Chicago ruled Apple could not pursue an injunction against Google's Motorola Mobility unit as part of the "smartphone patent wars." (tech12.incom June 25).

Credit unions and credit union service organizations, and service providers, in their quest for advanced technologies to serve their members more conveniently, have bumped up against patent issues before. Along with the legitimate patent lawsuits, they've also run up against lawsuits by some patent owners, which, according to Bloomberg.com (June 25), use "their rights to collect license fees instead of producing products."

Catalyst Corporate FCU, for example, filed a preemptory lawsuit in a U.S. District Court in the Eastern District of Texas in April seeking a judgment that it had not infringed on any processing patents after it received a letter and "proposal to negotiate patent license" in March from IP Navigation Group (IPNav), an intellectual property advisory firm that had experience with monetizing patents (News Now April 23).

The Huffington Post Thursday reported on the parade of patent lawsuits.  "It used to be companies might threaten patent lawsuits to collect licensing fees--especially in the tech space where interoperability makes companies more dependent on each other," said the Internet newspaper. "But now, companies seem increasingly interested in licensing to third parties (patent trolls) to go after those who are competing against them. For the tech industry, the possibility of tens of thousands of patents in a single product such as a smartphone is a huge burden, risk, and ultimately a tax on innovators."

Researchers at the Boston University School of Law said in a study released last month that business costs have risen more than fourfold since 2005 over royalty demands filed by patent owners seeking quick profits. The BGOV Barometer indicates companies face $29 billion in expenses from 5,874 infringement claims filed in 2011 by "non-practicing entities, patent owners using their rights to collect license fees instead of producing products."  That is up from 1,401 claims and $6.6 billion in costs in 2005, the study said (Bloomberg.com June 25).

Companies with $1 billion or less in annual revenue were named in 59% of the claims filed in 2011. Large companies end up paying more in settlement and legal costs, but smaller companies' expenses in these cases eat up a larger portion of their revenue, the study said.

San Francisco-based RPX, which developed a lawsuit database, surveyed technology companies it works with and learned it costs on average $1.75 million for a small or medium-sized company to cover legal and settlement costs.  It costs $8.79 million for companies with more than $1 billion in annual revenue .

Mazuma CU offers photo-personalized cards

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KANSAS CITY (7/13/12)--Mazuma CU, a $452.3 million asset credit union based in Kansas City, Mo., is offering photo personalization to members with its Mazuma Visa credit and debit cards.

Using a photo of their choosing, members can personalize their cards through Mazuma online banking.

After logging in to Mazuma online banking, members follow instructions provided on the site. After the photo is approved, the personalized Visa card is mailed to the member within a few weeks.

Launched this May, Mazuma is promoting the service to members with a "Personalize Your Plastic" campaign.

"Offering the personalized card option is a fun service for our members, but also helps to increase usage of Mazuma credit and debit cards, rather than members using competitive cards," said Ginny Leritz, Mazuma director of project optimization. "It's no secret that a personalized card, with your child's picture on it for example, will be pulled out of a purse or wallet first. Mazuma's goal is to bring our cards to top-of-wallet use. 

"This should be a breeze for anyone who has ever uploaded a picture from their computer," said Rob Coacher, Mazuma call center manager. "We don't anticipate any learning curve for members."

Gov. signs Calif. homeowner bill of rights

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LOS ANGELES (7/13/12)--California Gov. Jerry Brown Wednesday signed the "Homeowner Bill of Rights" into law in Los Angeles. The bill will go into effect Jan. 1. Credit unions will be impacted by the legislation, which is the first of its kind in the U.S.

Proponents say it will protect homeowners who are involved in loan modification and foreclosure processes (Pasadena Star-News July 12). The major provisions of the bill seek to alleviate common problems people encounter when trying to retain their homes.

The bill prohibits "dual tracking" foreclosures, in which one bank department says it will help a struggling homeowner while another proceeds with the foreclosure process. It also requires that all loan documents must be verified, and asks lenders to provide a single point of contact for borrowers who want to discuss their loans and to keep them informed, the newspaper said.

"Credit unions understand that the intention of mortgage reform legislation is to help distressed borrowers who were negatively impacted by a devastating recession," the California Credit Union League said in a statement sent to News Now last week (July 6). "We share the same concern, but we also believe these reforms were proposed to address the practices of other lenders.

"We maintain strict underwriting standards, and are wary of additional burdens that would impede our ability to help struggling Californians emerge from a lingering economic downturn," the league added. "Our primary focus is to continue working with members to keep them in their homes."

CUADs awareness campaign hits Rapid City

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BISMARCK, N.D. (7/13/12)--This week, the CU on the Road tour, part of the Credit Union Association of the Dakotas' (CUAD) "We've Been Waiting for You" campaign, made three stops in the Rapid City, S.D., area.

The tour--a grass-roots effort during which CUAD staff travel throughout the Dakotas to meet with the public and talk about the benefits of credit unions--stopped in Sturgis and Deadwood on Tuesday and Rapid City on Wednesday.  Live radio remotes were broadcast throughout each two-hour event and prizes were given away.

"We've Been Waiting For You" is a campaign to create awareness about the benefits of credit unions across North and South Dakota (News Now April 5).

"This week, we spoke to over 300 people at the three locations, some credit union members already--but many more potential credit union members," said Robbie Thompson, CUAD president/CEO. "We are getting the message out there--and it is spreading."

Besides the three scheduled events, the CU on the Road Vehicle made stops at these South Dakota credit unions:

  • Dakota Territory FCU, Deadwood;
  • Med5 FCU, Rapid City;
  • Dacotah FCU, Rapid City;
  • Highmark FCU, Rapid City;
  • Rushmore Electric FCU, Rapid City;
  • Sentinel FCU, Ellsworth AFB;
  • Black Hills FCU, Rapid City;
  • Northern Hills FCU, Sturgis;
  • Simply Service FCU, Belle Fourche;
  • Minuteman Community FCU, Rapid City; and
  • Dakota Star FCU, Rapid City.
The next leg of the tour starts today and goes through Sunday. The CU on the Road Vehicle and CUAD staff will be at the Red River Valley Fair in Fargo, N.D., to promote the advantages of credit unions at an outdoor booth and will also give away prizes, including $100 for a credit union testimonial.

Irish league pushes money lender interest-rate cap

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DUBLIN (7/13/12)--The Irish League of Credit Unions (ILCU) is urging Ireland's government to institute an interest-rate cap for payday lenders there.

The majority of "moneylenders," as they are known in Ireland, charge interest rates in excess of a 100% annual percentage rates (APR), with some charging rates as high as 190% APR, according to Western People (July 4).

A survey conducted by the league found that 40% of Irish consumers surveyed have borrowed to pay their household bills in the past 12 months. Of this group, the largest portion rely on financial help from family and friends, 30% rely on a credit union, 10% use a bank and 10% turn to moneylenders.

"With the level of personal indebtedness and financial exclusion in Ireland, there is a real danger of compounding the problem by allowing legal moneylenders to charge excessive rates," said said Kieron Brennan, ILCU CEO.

CU in Texas registers 20000th mobile banker

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SAN FRANCISCO (7/13/12)--University FCU, Austin, Texas, has registered its 20,000th member for mobile banking, achieving 25% adoption in the first nine months, according to mFoundry, a mobile banking and payments provider.

University FCU also is processing more than $2 million mobile deposits per month, mFoundry said.

"Any bank or credit union can achieve similar or greater adoption results for mobile banking," said Bryan Mishkin, University FCU eServices senior manager. "If a financial institution has a great mobile solution people want to use, offers intuitive mobile enrollment, uses cross-channel marketing dedicated to mobile conversion, and operates mobile as an independent channel, they too will exceed 20% adoption in the first 12 months."

The credit union has seen adoption of mobile deposit across all demographics, Mishkin said. "Mobile deposit has also been a huge boost for mobile banking adoption--many of our members have told me they enrolled in mobile banking for that feature alone and our staff has shared numerous stories of how mobile deposit has made members' lives easier," he added. "There is no question that mobile banking is one of the most valuable tools we have at our disposal for growing and maintaining our membership long-term."

Free resource guide available for NCUF fin ed report

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MADISON, Wis. (7/13/12)--The National Credit Union Foundation (NCUF) through its REAL Solutions program has issued a resource guide for its free online report entitled "Credit Unions: Focused on Financial Capability Across the Nation," which was released earlier this year.

Click to view larger image Click for larger view
The report and guide are the result of a nearly yearlong data collection effort by NCUF and state credit union leagues to illustrate how the credit union movement is making a difference through financial education and counseling.

The new guide is designed to help credit unions and others access resources, information and curricula already created to help them offer even more financial literacy programs.

"The report was the 'what' and the new resource guide is the 'how' and 'where' for credit unions," said Lois Kitsch, NCUF National REAL Solutions program director. "When using this guide, think of how your credit union can move members to the next level. Financial education is the credit union output, but consumer behavior change that leads to financial security is the desired result."

To download the guide and the full report at no-cost, use the REAL Solutions link.  All files are in .PDF format.

The report included intervention techniques used by credit unions to provide financial counseling/education to their members. Its intent was to quantify the depth and breadth of opportunities credit unions offer members/consumers to help them gain financial decision-making skills.

NCUF has several ongoing projects to assist credit unions with the development, measurement and implementation of educational programs. NCUF and REAL Solutions plan to continue to gather and publish data about credit unions' financial education provisions to demonstrate the positive impact credit unions have on members, consumers and their communities.

For questions on the resource guide or the report itself, contact Lois Kitsch at lkitsch@ncuf.coop  or 407-616-2409.

2300 miles later co-op tour ends

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PORTLAND, Maine (7/13/12)--Nearly a thousand people gathered at Payson Park in Portland, Maine on Saturday--the United Nations' International Day of Cooperatives--to welcome bikers who participated in the Cabot Creamery Cooperative's 2012 Community Tour.

Click to view larger image 2012 Cabot Community Tour Bike Riders Bob Spiegelman, left, and Myron and Kathy Skott, right, and Roberta MacDonald, Cabot Creamery Cooperative senior vice president of marketing (sunglasses), hoist a giant globe above their heads in celebration of the conclusion of the 2012 Cabot Community Tour. MacDonald joined the riders during the final 300 miles of their 2,300-mile journey that began May 12 in Miami, and ended on July 7 in Portland, Maine. (Photo provided by PRNewsFoto/Cabot Creamery Cooperative)
The 2012 Community Tour, a 2,300-mile bicycle ride along the East Coast Greenway sponsored by Cabot Creamery, was created to spotlight the power of cooperatives--including credit unions--during the International Year of Cooperatives, as well as to celebrate those who give their hearts, time and skills to strengthen communities. The tour started in Miami on May 12.

The Portland event marked the culmination of more than eight weeks of Community Tour celebrations all along the east coast that featured eight major events in cities including: Miami; Charleston, S.C.; Durham, N.C.; Fredericksburg, Va.; Wilmington, Del.; New York City; Providence, R.I.; and Portland and dozens of smaller stops along the route.

Cabot Creamery is a farm family-owned cooperative located in Vermont producing all natural, award-winning cheeses and a sponsor of the Credit Union National Association's (CUNA) Home & Family Finance Radio.

The Community Tour's focus on community, volunteers and cooperatives was deemed a great success by Cabot, its sponsors, partners, elected officials, and the thousands of people who attended the events.

"All along the way, we spread the good word about cooperatives, celebrated communities, and honored volunteers for the work they do to make this a better world," said Roberta MacDonald, Cabot's senior vice president of marketing.

MacDonald thanked the tour's major sponsors, including CUNA, East Coast Greenway Alliance, AARP Create The Good, HandsOn Network, Marriott, National Life Group and other non-profit, volunteer and civic organizations. 

The "Celebrate Portland" event on Saturday focused on engaging families. The event featured booths, activities and organizations for kids and adults. Among the participating organizations was the Maine Credit Union League. 

U.S. Rep. Chellie Pingree (D-Maine) issued a Congressional Record statement that will be read on the floor of Congress acknowledging Cabot and the Community Tour, and recognized Cabot for its leadership role in the world of cooperatives and as an integral part of the state's dairy industry.

Three bike riders, Cathy and Myron Skott, and Bob Spiegelman, rode the entire distance of the 2,300-mile Tour.

Wisconsin CUs use variety in urging MBL-cap lift

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PEWAUKEE, Wis. (7/12/12)--Wisconsin's credit unions have done an outstanding job using many ways to share stories about the need for small business access to credit with the state's lawmakers, said the Wisconsin Credit Union League Thursday.

The credit unions are working to urge Congress to pass the Credit Union Small Business Jobs Bill, which would increase credit unions' member business lending (MBL) cap to 27.5% of assets from the current 12.25% cap.

The league said the measure would extend $453 million of new credit to Wisconsin businesses and in turn help create 4,920 new jobs in the first year--at no cost to taxpayers (The League July 12).

Wisconsin credit unions' efforts have included:

  • Letters. Central City CU, based in Marshfield, said 392 of its members signed letters to their congressmen supporting lifting the cap. Forward Financial CU in Niagara reported it achieved 100% participation from its staff and board in singing letters to senators. Lakeview CU in Neenah reported that members and local business owners sent more than 350 letters to Congress. Oakdale (Wis.) CU sent more than 20 letters.
  • E-mails. Central City CU generated 250 e-mails using the league's Grassroots Action Center, said the league.
  • Meetings. Central City CU CEO/President Pat Wesenberg and Vice President of Commercial Lending Jeff Kolstad met with and hand-delivered letters to staff of the state's U.S. senators.  Oakdale CU President Colleen Woggon met with one senator's assistant in La Crosse to provide an update on the bill, share stories and drop off letters supporting the bill.
  • Videos. Shoreline CU in Two Rivers shared videos from an industrial cutting and fabricating company, bridal shop and tavern in which members tell their small business' story. (Use the resource links to view each video). Also, Lakeview CU produced short, customized video messages for each U.S. senator  from a contractor who has a Lakeview CU small-business loan.
  • Other creative efforts. Premier Financial CU, New Holstein, took a sunglass-laden picture inspired by Tom Cruise's movie, "Risky Business," with the caption, "No Risky Business With Credit Unions."  Lakeview CU said it will soon send giant greeting cards to the state's two U.S. senators, asking for a yes vote on S. 2231.
The Credit Union National Association (CUNA) and credit unions throughout the nation have been urging Congress to pass the bill, which is currently before the U.S. Senate. CUNA estimates that lifting the MBL cap would generate nationally $13 billion in new small business loans and help create 140,000 jobs, with no cost to the taxpayer.

CU System briefs (07/11/2012)

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  • BISMARCK, N.D. (7/12/12)--Georgia Schwartz of Glen Ullin, N.D., a longtime employee of credit union based in Williston, N.D., pleaded not guilty to charges of embezzling about $130,000 from Glen Ullin CU, now Western Cooperative CU. She is charged with embezzlement and misapplication from a credit union and making false entries.  Court records indicate that money was taken over 24 years from the credit union, and Schwartz allegedly kept two sets of records to conceal the theft. A trial is scheduled for Sept. 11 in Bismarck (SFGate.com July 11) …
  • ALBANY, N.Y. (7/12/12)--A CUNA Mutual Group Golf Tournament has raised more than $27,000 for the New York Credit Union Foundation's initiatives in financial literacy and independence for New Yorkers, said the foundation in a press release.  Roughly 140 people from credit unions across the state, plus vendors and credit union friends, turned out for the event.  In addition to CUNA Mutual as Title Sponsor, sponsors included Professional Sponsor Vining Sparks, Amateur  Sponsors SEFCU and Melrose CU; and Major Sponsors Adirondack Chapter, Alloya Corporate FCU, AmeriCU CU, Bethpage FCU, Covera, GPO FCU, Montauk FCU and The Summit FCU.  Dannemora FCU's winning foursome included, from left, Tyler Smith, Nancy Drolette, Matt Davis and Jim Dowdle. (Photo provided by the New York Credit Union Foundation) …
  • HARRISBURG, Pa. (7/12/12)--The Enterprise Inc. Foundation of St. Louis, Mo., made a $3,000 contribution to Pennsylvania Credit Union Foundation during a check presentation ceremony at TruMark Financial CU, Trevose, Pa., said the Pennsylvania Credit Union Association (Life is a Highway July 11).  Kaushika Kansara, group development manager of Enterprise's car sales division, praised the credit union movement for its advocacy of financial education and information about purchasing autos. TruMark is a business partner of Enterprise. Enterprise has contributed more than $25,000 to the foundation in the past five years.  From left, are foundation Executive Director Jo Wambach, Kansara, and Rick Stipa, TruMark Financial CU CEO and board member of the foundation. (Photo provided by the Pennsylvania Credit Union Association) …

Fla. United Way encourages poor to open accounts

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ORLANDO, Fla. (7/12/12)--Several United Way agencies in South Florida have teamed up with credit unions and banks for an asset-building campaign to help unbanked and under-banked individuals increase their financial stability.

United Ways of Broward, Miami-Dade and Palm Beach Counties Wednesday announced the launch of Bank On South Florida, which focuses on low-income households without checking or savings accounts (unbanked) or who have an account but continue to rely on alternative financial services (underbanked). Bank On South Florida is part of a national Bank On campaign operating in more than 100 communities.

The project's inaugural financial institution partners include two credit unions--City County CU, Fort Lauderdale, and Power Financial CU, Pembroke Pines--as well as 10 banks.

"An average unbanked individual will spend $1,000-$2,000 annually in fees simply to cash paychecks from check-cashing stores," said Bill Mills, director of Bank On Florida. "This is a substantial amount of money that Bank On South Florida will be helping put back into the hands of our low-income working families, and enable them to keep and grow their hard-earned dollars with mainstream banking institutions."

The Federal Reserve Bank has estimated that 8.4% of unbanked households and 16.8% of underbanked households exist in the tri-county metro area. The households rely on predatory lenders such as check-cashing stores, payday lenders and rent-to-own stores. That reliance prevents them from growing assets, said a press release from the agencies.

Participating nonprofit community organizations will provide financial education and coaching, and work with candidates to remove any barriers or obstacles impeding a banking relationship. They will then provide candidates with a qualified referral to a participating credit union or bank, which will then work with the individuals to provide affordable banking products and to grow their assets.

Inaugural nonprofit partners include South Florida Urban Ministries, Hispanic Unity of Broward County, Urban League of Broward County, Housing Partnership Inc., 211 Network and Consolidated Credit Counseling Services Inc.

Mortgage-biz casualties fall as fewer FIs fail

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DALLAS (7/12/12)--The number of mortgage-related businesses to fail or close down during the first half of 2012 has declined by more than a quarter from the same point in 2011, while fewer credit unions and banks are failing, despite an increase in departures of mortgage bankers.

During the second quarter, the failure of 25 mortgage-related entities was tracked in the Mortgage Graveyard from Mortgage Daily (PRNewswire July 9).

Failures of the entities eased from the first quarter's 27. The decline was even more significant when compared with the 37 tracked in the second quarter 2011.

Compared with the first half of last year, the first-half 2012 total was down 30% because of a one-half reduction in the number of credit unions failures and more than one-third decline in bank failures.

Failures among types financial institutions this year and last year are:

  • Credit unions: Eight (first half 2012) vs. 16 (first half 2011);
  • Banks: 31 (first half 2012) vs. 48 (first half 2011); and
  • Nonbanks: 13 (first half 2012) vs. 10 (first half 2011).
Mortgage bankers that have shuttered their doors increased 30%.

During the three months ended May 31, the Federal Deposit Insurance Corp. and the Comptroller of the Currency issued a combined 246 regulatory orders against banks, climbing from 221 orders issued in the three months ended Feb. 29. The increase suggests that the third quarter could see an uptick in bank failures, Mortgage Daily said.

Phoenix to invest 50M with local FIs

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PHOENIX (7/11/12)--The city of Phoenix will invest up to $50 million with local financial institutions, including credit unions, through federally insured deposits, city officials said.

The financial institutions must be Arizona-chartered or have a physical presence in Maricopa County, in which Phoenix is located (Tucson Citizen.com via Arizona Republic News July 10).

Phoenix is the most recent city to join several other municipal and state governments that have looked to credit unions and community banks in the aftermath of the financial crisis, the newspaper said.    

Credit unions in several states are increasingly accepting municipal deposits from city and town governments. More states are trying to pass laws to obtain that capability. Many municipalities are not aware they can use credit unions as depositories. Education is a key focus of credit unions that do accept these deposits, said several credit unions that offer the service (News Now June 29).

Phoenix officials told the newspaper they aim to help local financial institutions provide them with capital to fund loans to local businesses and individuals. The city mainly invests its money in U.S. government securities, the paper said.

To read the article, use the link.

S.C. CUs awarding mini-grants in MADTAG campaign

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COLUMBIA, S.C. (7/12/12)--Credit Unions of South Carolina are offering 20 mini-grants to state residents who are making an impact in their communities.

The $100 mini-grants are part of a pilot cooperative campaign called "Make a Difference. Tag, You're It!" (MADTAG). The campaign highlights acts of service and encourages South Carolinians to pass the goodwill along to others, according to WTOC.com (July 11).

The campaign was created under the leadership of the South Carolina Credit Union League Media Committee (News Now Feb. 21)

To apply, interested South Carolina residents must post a message on the MADTAG Facebook page describing how they would use $100 to make a difference in their communities. The post must include specifics on how the $100 would be used and the town where the funds would be used. Posts will be accepted until July 27.

Winners will be announced July 31.

Mini-grant award winners will be directed to a participating credit union in their community to collect their funds.

Winners will be asked to document by photo, video and social media how they used the $100 to make a difference.

FORUM CU creates small-biz advisory council

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INDIANAPOLIS (7/12/12)--FORUM CU, Indianapolis, has formed a small business advisory council comprising senior executives and small business owners who are also active members of the credit union.

Click to view larger image Members of the newly created FORUM CU Small Business Advisory Committee include, from left, Jay Smale, Laurie Seland, Scott Myer, Bill Mulford, Renee Lucas, Carmen Clift, Teresa Alles, and Cassandra Faurote. (Photo provided by FORUM CU)
The council's first official meeting was held in November. 

"We have been developing this concept for the past several years and are delighted to have our first council members in place," said Andy Mattingly, FORUM CU chief operating officer.

Council members serve a one-year term and meet quarterly to network with each other and provide input on FORUM product and service initiatives.

"FORUM is a cooperative credit union, so ensuring that our members' voices are an integral part of our decision making process is critical," Mattingly said. "We also want to be sure they are receiving a professional benefit from these meetings, such as networking opportunities and the ability to create meeting agendas aimed at helping them grow their businesses."

Topics addressed by the council include a new checking account that will roll out in the fall, FORUM's new online banking system that went live in March, and community involvement initiatives for small business owners.

The Credit Union National Association (CUNA) and credit unions are urging the U.S. Congress to increase credit unions' member business lending (MBL) cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

Study Mobile use not impacting financial system yet

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FRAMINGHAM, Mass. (7/12/12)--Mobile payments have more than doubled in popularity, reaching in excess of 33% of consumers surveyed--although payments have not yet made a large impact on the financial system--according to the IDC Financial Insights eighth annual Consumer Payments Survey, released Monday.

The report, "Business Strategy: Results from the 2012 Consumer Payments Survey," focused on the use of emerging payment technologies.

Of consumers who had made a mobile payment, more than half used PayPal Mobile (56%), with Amazon Payments and Apple's iTunes service tied at about 40%. Also, prepaid cards showed strong growth, particularly in the network branded and benefit submarkets.

"Based on our results, we expect to see continued growth in open-loop prepaid cards and mobile payments next year, and believe that the improvements being offered in electronic bill delivery will break electronic bill presentment and payment out of its doldrums as well," said Aaron McPherson, practice director, IDC Financial Insights. "The advent of new card-linked offer programs should increase the influence of rewards on the average consumer; however, this will depend on how many banks choose to move ahead aggressively with these programs, and how many merchants choose to support them."

He told American Banker (July 10) that mobile payment's growth has not yet made a significant impact on the financial system.

Other findings include:

  • Network-branded (open loop) prepaid cards have drawn neck and-neck with closed loop cards in consumer penetration. Strength was seen in all categories, including benefit and payroll cards. This could reflect economic and regulatory factors, as well as better marketing by financial institutions and independent issuers, said IDC Financial Insights.
  • For the second consecutive year, both biller and bank-operated online bill pay sites were used by more than 50% of the consumers surveyed. Overall, 73.5% of U.S. consumers now use online bill payment. This confirms that online bill payment is now the dominant way bills are paid in the U.S., said the report.
  • Despite the popularity of digital downloads, such as apps and music, more respondents reported buying physical goods with their phones than online services, digital goods, or virtual currency.
IDC Financial Insights emphasized the results should lend urgency to financial institutions' efforts to develop products in the prepaid cards and mobile payments areas. Demand clearly exists, and financial institutions need to make sure they are not left behind by non-financial institutions that are more narrowly focused on the opportunity, IDC Financial Insights said.

The company said reward programs are one of the strongest areas for financial institutions to build upon, because financial institutions are party to most commercial transactions and have the best data. They also have a history of offering rewards on their cards and working with retailers on cross-promotions. With the limits on debit card interchange creating a revenue gap, targeted offers provide a replacement revenue source, and can anchor ventures in the prepaid and mobile payments markets, IDC Financial Insights said.

Tornado-damaged CU to reopen in Alabama

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BIRMINGHAM, Ala. (7/12/12)--Six months after the building was severely damaged by a tornado, Secure First CU will celebrate the grand re-opening of its main branch in Birmingham, Ala., on July 19.

A tornado ripped a large portion of the roof off the building on Jan. 23 and also did structural damage to the drive-thru, second floor and front entrances (News Now Jan 25).

A ribbon-cutting ceremony is scheduled for 9 a.m. on July 19. The credit union will celebrate with its members all day with door prizes and giveaways.

"We are grateful that no one was injured and the credit union has been able to operate after sustaining such considerable damage," said Jordan Sullivan, Secure First president. 

Secure First has kept its main branch in operation during the renovation through the use of a mobile unit from Pensacola, Fla.-based Pen Air CU.

Survey Small biz short on funding suggests raising MBL cap

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WASHINGTON (7/12/12)--A survey by a trade association for small businesses--which supports expanded business lending for credit unions--indicates that many small businesses are unable to locate funding sources. Among the solutions it suggests is increasing credit unions' member business lending (MBL) cap.

Further, the survey indicates that--when small businesses do go to a credit union--they like what they get, rather than what they receive from big banks.

Cash flow issues continue to plague a significant number of small businesses in the U.S., said the 2012 Small Business Access to Capital Survey from the National Small Business Association (NSBA).

The cash flow problems of small businesses have been "exacerbated in recent years," said NSBA in the report. Nearly half  (43%) of small-business respondents said that in the past four years, their loans or lines of credit were reduced. Nearly one in 10 had their loans or lines of credit called in early by their bank. Of those who experienced the early loan call-in, 19% were given fewer than 15 days.

"Given that the average balance on a loan or line of credit is $265,060, 15 days is a death sentence for most small business," said the report. "Adding insult to injury, 60% of those who reported changes in their loans or lines of credit stated that the reason was due to the bank's internal risk assessment, and 15% weren't even given a reason."

While 60% of small businesses responding to the survey did business with a large bank, only credit unions and small community banks received a majority overall positive rating by respondents, said NSBA.  Credit unions received a 60% positive rating; small banks, 73%, and large banks, 47%.

Small businesses' clients are taking longer to pay their bills--21% of businesses surveyed reported longer payment times with a notable jump in terms of net 60 to 90 days, said the report. Fifty-five percent of small subcontractors on federal projects reported late payments from a prime contractor.

NSBA offered two bright spots from the survey.  Nineteen percent of businesses surveyed said that with the recent passage of the JOBS Act, they are more likely to seek outside investors.

"Yet more must be done to improve finance options for small business," said the report, "from increasing the lending cap on credit unions to strengthening [Small Business Administration] lending programs to reforming the way the banking industry treats small-business loans."

NSBA is a member of a coalition that recently signed a letter put together by the Credit Union National Association (CUNA) to Congress urging passage of legislation to lift credit unions' MBL cap to 27.5% of assets from the current 12.25%. Lifting the cap would generate $13 billion in new small business loans and help create 140,000 jobs.

NSBA noted that its data from "as far back as 1993," indicate a "clear correlation to a small-business owner's ability to hire and his/her ability to get financing."

Two Mass. CUs get state OK to merge

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BOSTON (7/11/12)--Massachusetts' state credit union regulator has approved the merger of Boston-based Massachusetts State Employees CU into Chelsea-based Metro CU.

The Division of Banks in the Office of Consumer Affairs and Business Regulation said in its June 29th Activity Report that it granted permission on June 12 for the two to merge, with Metro continuing as the surviving credit union. State Employees CU's sole branch will be retained as a branch office of Metro.

Metro has more than $1 billion in assets; its 13 branches serve more than 140,000 members. Massachusetts State Employees CU had $71.7 million in assets, one branch, and se4rved 12,532 members.

Scam spreading fast in Pennsylvania

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HARRISBURG, Pa. (7/11/12)--State police in Pennsylvania are investigating a series of blast texts and calls that have duped members of credit unions and bank customers into revealing their debit or credit card numbers during last weekend. In one township, victims have lost a total of $10,000.

The scam "is spreading across the Commonwealth and gaining momentum and victims," reported CBS 21 (whptv.com July 9).  Lower Paxton Township Police, which has received numerous reports from people who received the text message, said the scam is growing so fast that five credit unions in the area posted alerts on their websites (The Patriot News, via Pennlive.com July 9).

Area residents received a text message on their cell phones telling them that their Visa debit or credit card had been deactivated. Some of the texts indicated the victims should call 717-553-6918--a local number--to reactivate the card. The call is answered by what sounds like an automated answering system identifying itself as "Belco Community Credit Union 24-hour Card Activation Services."

The entity is bogus. Belco Community CU is  a $372.6 million asset credit union in Harrisburg that has no relationship with the calls, said the media reports.

Callers are prompted to enter their credit/debit card number and then directed to enter their personal identification number (PIN) and change it. If they comply, the victims usually discover that someone in California is checking their balance and making large cash withdrawals from their accounts, said police.

Several reports noted that a Halifax, Pa., couple lost $2,321 when they complied with the text and provided their debit card numbers. Belco Community said one member entered their number and $3,000 was taken from the account (whptv.com). Lower Paxton Township Police said so far residents in the township have lost $10,000.

One television station entered a bogus credit card number and the call disconnected.

A  member alert on Belco Community CU's website that said "Phishing scammers are targeting Belco and other financial institution members" with the fraudulent calls and texts.  It instructs visits to ignore the calls and texts. "They are fraudulent! No credit union or bank will ever request this information from you. This is a scam designed to get you to enter information for a valid credit or debit card."

CUs work on ATM bill noted in IN.Y. TimesI blog

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NEW YORK (7/11/12)--Prior to Monday night's passage by the U.S. House of a bill that would limit duplicative disclosure requirements about fees on ATMs, The New York Times' Bucks blog took note of efforts to pass the bill by credit unions and the Credit Union National Association (CUNA).

"Credit unions, banks and ATM operators are asking Congress to change a rule that requires them to display notices outside ATMs that warn noncustomers that they may incur fees using the ATM," the Times blog said in its lead paragraph in the article, entitled "Banks Seek Help Against ATM 'Vigilantes.'"

"The Credit Union National Association says at least 110 class-action lawsuits have been filed against credit unions over the last two years, at least 20 of which were filed in the first four months of this year," the Times blog reported.

"Banks and credit unions deem the lawsuits frivolous and have asked Congress to drop the requirement for external notices, leaving only the mandate for an on-screen device."

The bill would eliminate parts of Regulation E that require financial institutions with ATM services to display a physical notice on the ATM that a fee will be charged, and would require only a notice on screen. Some people travel around, remove physical notices, take photos of the machine without the notice and sue the institution as violating the Electronic Funds Transfer Act.

The House unanimously passed H.R. 4367 Monday night, 371-0. The measure now moves to the Senate. CUNA has urged the Senate to pass the bill. (See related story, "CUNA urges Senate to take up ATM bill," in News Now's Washington section).

To access the blog, use the link.

Midwest residents top priority Dig out of debt

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BELLEVUE, Neb. (7/11/12)--Regaining financial stability following the recession--mainly by managing debt--remains a primary area of focus for many who reside in the Midwest, according to a new survey co-sponsored by SAC FCU in Bellevue, Neb., and the Institute for Career Advancement Needs (ICAN).

More than 5,500 respondents participated in the online survey titled Leading the Way-The 2012 Leadership and Finances Survey. "Decreasing debt" was cited as the financial area they are most looking to improve upon in the year ahead as it relates to finances, taking priority over "growing personal savings," which was the second most popular response and "saving for retirement," which ranked third.

Respondents also expressed doubts regarding their financial outlook, 68% reporting they were only "somewhat confident" in the overall state of their finances. They said they are managing their finances as best they can, but feel there is room for improvement when preparing for the future.

Of those "not confident" in the overall state of their finances, 65% were women--reporting that they are not managing their finances well and are not prepared for the future.

So what is fueling this sentiment? The recession appears to be playing a role, with 44% of respondents reporting the recession and market volatility have made them rethink how they view their personal finances. Of this group, the majority said the recession made them realize that they should be more conservative with their money, and become more educated overall regarding money management.

Other findings:

  • 40% reported the recession made them realize they need to spend less and save more, and  57% of respondents in this group were women;
  • 28% said it made them realize they need to learn more about overall money management, such as budgeting, saving, debt consolidation and refinancing; and 61% of this group were women;
  • 24% reported it made them realize they need to learn more about their own financial situation and take more of an active role.
Of those who hope to improve in "decreasing debts," "growing their personal savings" and "saving for retirement" next year, 93% are either "confident" or "somewhat confident" they will meet their goals.

The $570 million asset SAC FCU offered these following tips for consumers:

  • Examine your current financial position--Perform an audit on personal finances, noting all major debts, interest percentages, amounts allocated to savings as well as impending expenses that will require additional planning, such as retirement and higher education.
  • Identify areas of opportunity--Given a financial situation, are there opportunities to consider for improving the outlook, such as refinancing major assets such as a car or home, consolidating debts or establishing a long-term savings plan?
  • Make it happen--Once key opportunities for optimizing finances have been identified, be sure to follow through. Find a financial partner to help prioritize and implement plans based on goals.

Ga. regulator orders fake CU to cease and desist

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ATLANTA (7/11/12)--The Georgia Department of Banking and Finance has issued a cease-and-desist order against an entity calling itself Georgia Entertainer's CU in Smyrna, Ga., to stop calling itself a state-chartered credit union.   

The order was made known to the credit union in a July 3 letter to Aneesah Bray-LaStrape, a representative of the credit union, sent by Kevin B. Hagler, the department's deputy commissioner for supervision.   

The letter states: "On April 12, 2012, the department sent a letter to Georgia Entertainer's CU directing this entity to cease immediately from using 'credit union' in its name and claiming to be a Georgia credit union, in organization or otherwise, in violation of Georgia law. The department required a written response to its directive by April 27, 2012. The department received a letter from you dated April 25, 2012. However, this response did not adequately address how the entity was going to comply with the department's directives."

A subsequent letter the department sent May 24 failed to elicit a satisfactory response as of July 2, so the cease-and-desist order was issued, the department explained in its July 3 letter.

In the order, the department said: "Georgia Entertainer's CU is a company which, according to documentation obtained by the department is claiming to be a credit union organization located [in] … Smyrna Ga. The department has no record of Georgia Entertainer's CU and has not approved the entity to organize a credit union and/or conduct a credit union business in Georgia. Furthermore, the department has not granted the entity permission to use 'credit union' in its name."

The department gave Georgia Entertainer's CU until July 18 to respond with the actions it has taken to comply with the order.

The Georgia Credit Union Affiliates is aware of the order but said it had no other information on the matter when contacted by News Now.

Ohio CUs consumer loans rise 37

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COLUMBUS (7/11/12)--Ohio credit unions' consumer-loan origination growth increased 37% year over year during the first quarter to $972 billion, outpacing the national average, said to the Ohio Credit Union League.

Consumer loans were a primary driver of that growth, rising 33.7% during the quarter to $1.5 billion, according to the league's Ohio Credit Union Quarterly Performance Summary.

Loan balances increased 4.7% over the previous 12 months at Ohio credit unions, more than double the national rate of 2.1%. Every component of loan originations posted an increase over the previous first quarter, the league said.

"Growth in consumer lending is a positive sign, not just for credit unions, but for the continued recovery of the economy as a whole," said Paul Mercer, league president. "It is also a sign that credit unions are helping their members manage difficult financial circumstances by offering affordable loan products that make sense for the consumer."

First-mortgage originations also were above levels reported in the first three months of 2011. Ohio credit unions originated $443 million in first mortgages in the first quarter of 2012, up 34.6% from 2011. First mortgages outstanding grew 4% annually to reach $4.3 billion at Ohio credit unions. Also, Ohio credit unions sold $202.3 million in first mortgages to the secondary market in the first quarter.

Auto loans grew 8.9% in the first quarter. Nationally, auto loan balances increased at a 2.6% annual rate. Used auto loan balances in Ohio increased 10.1% annually, while new auto balances rose 6.7% during the same time.

Credit card balances also posted annual growth, with balances growing 4% to $752.4 million at the end of the first quarter.

Business loan balances in Ohio grew 13.7% from the previous March, which is faster than the national average of 8.4% for the period. Outstanding business loan balances stood at $439.7 million at the end of the first quarter.

With business loan demand remaining strong, originations increased from levels reported in the previous March. During the first quarter, Ohio credit unions originated $29.9 million in business loans, up 5.4% from the $28.4 million in originations reported during the first quarter of 2011.

Although it represents just 3.4% of the Ohio loan portfolio, member business lending is becoming an increasingly important part of Ohio credit unions' product offerings, said the league. In the first quarter, 107 of Ohio's 374 credit unions reported outstanding business loan balances.

The Credit Union National Association (CUNA) and credit unions are urging the U.S. Congress to increase credit unions member business lending (MBL) cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said

Ohio credit unions added nearly 7,400 members during the past 12 months, with more than 4,000 of those members joining in the first quarter. This adds up to annual growth of 27 basis points, slower than the national average of 1.9%.

The rate of mergers and liquidations in Ohio during 2011 was below historical rates, with 10 credit unions in Ohio undergoing a merger or liquidation. The first three months of 2012 have shown a similar pace to 2011. During the first quarter, three credit unions merged.

NCCUL board elects exec committee

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RALEIGH, N.C. (7/11/12)--The North Carolina Credit Union League (NCCUL) board elected its executive committee for the upcoming two years, following the conclusion of its annual meeting June 12 in Pinehurst, N.C.    

The board re-elected all four directors to their previously held roles.

They are:

  • Maurice Smith, president of Local Government FCU (LGFCU) in Raleigh, who was re-elected chairman of the NCCUL board. Smith was first elected chairman in 2010. Smith will serve a two-year term. He has more than 30 years of experience in credit unions. He began his career as a loan officer with State Employees' CU, Raleigh, in 1979. He joined LGFCU as executive vice president in 1992 and was promoted to president/CEO in 1999.
  • Patty Idol, president/CEO of Mountain CU in Waynesville, who was re-elected vice chairman. Idol was first elected vice chair in 2010. She will serve a two-year term. Idol's credit union career spans 30 years. She has been president/CEO of Mountain CU since 1999.
  • Jeff Jones, president/CEO of Freedom FCU in Rocky Mount, who was re-elected NCCUL board Treasurer. Jones will serve a two-year term. His credit union career spans more than 30 years, including more than 25 years at Freedom.
  • Lola Bumbarger, manager/president of Century Employees' Savings Fund CU in Hickory, who was re-elected the board's secretary. She will serve a two-year term. Bumbarger's credit union career spans more than 30 years. She has been manager/president of the credit union since 1991.

CU System briefs (07/10/2012)

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  • HARRISBURG, Pa. (7/11/12)--TruMark Financial CU, a $1.4 billion asset credit union based in Trevose, Pa., hosted U.S. Rep. Pat Meehan (R-Pa.) at the credit union's Upper Darby branch recently, according to the Pennsylvania Credit Union Association's newsletter, Life is a Highway (July 10). TruMark Financial CU CEO Rick Stipa thanked Meehan for supporting the ATM disclosure reform bill, and discussed the member business lending and supplemental capital issues with the congressman. From left are, TruMark Financial CU Board Director Dan Dillard, Meehan, and Stipa. (Photo provided by the Pennsylvania Credit Union Association) …
  • ENTERPRISE, Kan.(7/11/12)--A former employee of Enterprise (Kan.) CU has pleaded guilty to one count of embezzling $85,000 from the $1.8 million asset credit union (The Capital-Journal and Associated Press via The Republic July 9). Deborah A. Bomia, 46, of Enterprise allegedly kited checks between accounts in her name and created false and fictitious balances. Bomia admitted making a large deposit toward the end of the month, which would be included in the general ledger but not sent to the corporate checking account until the middle of the next month. At the same time, another larger check would be drafted from Bomia's checking account at the credit union. The final deposit, totaling $85,000, was recorded in the general ledger July 29, 2011, but wasn't deposited into the corporate account. Bomia agreed to restitution of $85,000. Sentencing is set for Oct. 10 …

Small Biz Lending Index Some CUs hit MBL cap

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NEW YORK (7/11/12)--Small business lending is on the uptake at financial institutions, and credit unions continue to lead banks in business loans approved, according to the Biz2Credit Small Business Lending Index for June.

However, credit unions are hitting against their member business lending (MBL) cap, said the monthly analysis of 1,000 loan applications on Biz2credit.com. Credit unions' approval rates of business loans was 55.8% during June, compared with big banks' 11.1% and small banks' 47.5%.

The June figures are slightly lower for credit unions and alternative lenders, and slightly higher for big banks and small banks than in May. In May, credit unions accounted for 57.6% approval rate, while small banks saw 45.5% and big banks saw 10.2%.

"Some credit unions have reported they had reached their yearly lending limit, which currently is 12.25%," said Biz2Credit's press release. "Sen. Mark Udall (D-Colo.) has introduced the Credit Union Small Business Jobs Bill (S. 2231) that would raise the credit union business lending cap to 27.5% of total assets," it continued. "By raising the cap, credit unions would be able to increase the number of small business loans."

The figures indicate that "small businesses remain much more likely to be approved at a credit union than at any other lender," said Mike Schenk, Credit Union National Association (CUNA) vice president of economics and statistics. He noted that "many small businesses continue to tell researchers that access to credit is problematic.  Many hundreds of credit unions are currently constrained in their lending by the existence of the artificial--and arbitrary--cap," he told News Now.

The June 2012 figures are higher than year-ago figures for all financial institutions and alternative lenders. In June 2011, credit unions led financial institutions' business lending, approving 52.3% of business loan applications while small banks approved 42.5% and big banks approved 8.9%. Alternative lenders approved 54.9%, compared with this June's 62.9%, which dropped from May's 63.2%.  The study noted that businesses turn to alternative lenders when banks stop lending. With a slight uptick in bank lending, the alternative lenders are seeing less business.

CUNA and credit unions are urging Congress to raise credit unions' MBL cap to 27.5% of  assets. Doing so would mean credit unions could invest $13 billion in new small-business loans to continue helping the economic recovery. Raising the cap would also generate about 140,000 new jobs the first year, without costing taxpayers a dime.

Biz2Credit analyzed loan requests ranging from $25,000 to $3 million from companies in business for more than two years with an average credit score above 680.

CUAid raises 25K for Colo. wildfire victims

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MADISON, Wis. (7/11/12)--Since activating its online disaster relief system CUAid.coop on June 29, the National Credit Union Foundation (NCUF) has raised more than $25,000 to assist credit union people affected by wildfires in Colorado.

As donations are posted through CUAid.coop, NCUF is coordinating with the Mountain West Credit Union Association (MWCUA) to distribute money efficiently to credit union employees and members in the affected areas.



"It's reported that the fire is 100% contained now, which is great news," said Scott Earl, MWCUA President/CEO. "However, there were more than 340 homes destroyed. Many families have been widely affected and will continue to need assistance and support for some time as they piece their community back together. The largest need right now for most organizations helping the evacuees and victims is financial."

The Waldo Canyon Fire has burned more than 18,247 acres since it started June 23, according to the El Paso County Sheriff's Office (Denver Post July 3). On July 5, the Colorado Department of Public Safety reported five active wildfires in the state.

Wildfires have also broken out in Utah, Wyoming and Montana.

Credit union supporters in every state can make donations through CUAid, a secure website that accepts credit cards and includes information on wire transfers and mail donations.

CUAid helps credit union employees, volunteers and members, as well as credit unions and state credit union foundations nationwide to contribute directly to support other involved in the credit union movement. All of the donations through CUAid go to credit union disaster relief.

CUAid was developed by NCUF in cooperation with state credit union foundations, state credit union leagues, and the Credit Union National Association's Disaster Preparedness Committee in 2006.

Four re-elected to NCCUL Board

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RALEIGH, N.C. (7/11/12)--The North Carolina Credit Union League (NCCUL) announced the re-election of four board members at its annual meeting June 12 in Pinehurst, N.C.

The NCCUL board is composed of eight directors who are elected by their local credit union chapters, plus three directors elected at-large.

  • Bob Donley, executive vice president of Members CU, Winston-Salem, N.C., was re-elected as an at-large director. Donley, who was appointed to the NCCUL board in 2010, will serve a three-year term. He has held his position at Members CU since 1995. In addition to serving on the NCCUL board, Donley has been a member of the board of Members CU since 1996.
  • Tony Ebron, the president/CEO of Winston-Salem (N.C.) FCU, was re-elected as the director representing the Northwest Chapter. The chapter held a special election in 2011, and selected Ebron to fill its vacated board spot. He will serve a full three-year term.
  • David Elliott, the president/CEO of Fort Bragg FCU, Fayetteville, N.C., was re-elected as the director representing the Southeast Chapter. He was appointed to the NCCUL board in 2008, and elected to a full term the following year. He will serve another three-year term. Elliott has more than 30 years of credit union experience, including 16 years as president of the Fort Bragg FCU.
  • Lori Thompson, the president/CEO of Premier FCU, Greensboro, N.C., was re-elected as the director representing the North Piedmont Chapter and will serve a three-year term. Thompson was first elected to the board in 2009. Thompson has more than 20 years of experience in the credit union movement. She began her credit union career as a loan officer with Premier. She was named executive vice president in 2002, and president of the credit union in 2010.

CU System briefs (07/09/2012)

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  • MADISON, Wis. (7/10/12)--UW CU has established a $25,000 scholarship endowment fund at Madison College, the credit union announced Monday. The funds will be allocated as needs-based scholarships annually to one full-time student at the college. "Wisconsin residents have reason to be proud of our excellent universities and colleges, but there is an urgent need to make sure talented young people are not excluded simply because they can't afford to attend," said Jaimes Johnson, director of community and campus relations for the credit union.  In the past, UW CU has funded annual scholarships for students attending Madison College such as the college's 2010 "Win a Career" scholarship program. Madison College provides "real world smart" education with technical, liberal arts and sciences, adult basic education and continuing education, as well as customized training for employers …
  • ROCKVILLE, Md. (7/10/12)--The National Institutes of Health FCU, based in Rockville, Md., has launched a new education refinancing program for nurses, physical therapists, hygienists and other healthcare professionals and specialists throughout Maryland; Virginia; Washington, D.C.; and West Virginia. The CareerBuilder Education Refinancing Program offers members low variable and fixed rate options and extended loan terms to reduce monthly payments on their student loan debt. The loan also features no pre-payment penalties and discounts for direct deposit and auto pay. With more than $562 million in assets, NIHFCU is one of the largest credit unions in the Washington, D.C. metropolitan area and the nation's largest serving the biomedical industries, it said in press release …

Texas Trust CU forms council to teach teens fin ed

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MANSFIELD, Texas (7/10/12)--Texas Trust CU in Mansfield, Texas, has formed a youth council to help educate the younger generation about avoiding too much reliance on credit and a heavy debt.

The $671 million-asset Texas Trust's Youth Advisory Council aims to train high school students how to handle money and take personal financial responsibility. Twenty students will be selected to join the council, based on an application process (LoneStar Leaguer July 9).

Today's youth are technology literate, yet fall short on financial issues.

"The recession has been a financial eye-opener for a lot of consumers," Amber Danford, vice president of marketing for Texas Trust, told the Texas Credit Union League. "Many were unprepared for the downturn, resulting in a large number of personal financial crises."

Financial literacy is the key goal of the council, although members will also receive training in service leadership, marketing, public speaking and presentation development. Council members will also participate in a community service project and volunteer at community events that Texas Trust sponsors.

There will be two councils for the 2012-2013 school year. The first session runs from August through December. The second council will be from January through May. Area high school students enrolled in public, private, charter or home schools are eligible.

The credit union is accepting applications for the first council session through July 21.

Magill to IWash. PostI Participations dont affect need to raise MBL cap

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WASHINGTON  (7/10/12)--A proposal by the world's largest credit union to purchase business participation loans from smaller credit unions nearing their member business lending (MBL) limit does not mean there is less need for Congress to raise the MBL cap, the Credit Union National Association (CUNA)  told the Washington Post Monday.

Loan participations in no way "obviates the need for Congress to raise the cap," said John Magill, CUNA executive vice president of governmental affairs.  CUNA and credit unions are urging Congress to increase the MBL cap to 27.5% of assets from 12.25%. Doing so would help inject $13 billion in new small business loans into the economy and help create 140,000 new jobs, said CUNA.

Vienna, Va.-based Navy FCU, which has $49 billion in assets, unveiled its commercial loan participation program, C-Pal, in which it would purchase a portion--from 50% to 90%--of another credit union's business loan. The other credit union would service the loan, said the Post. As of first quarter, Navy Federal held 1,061 business loans with a total value of $179 million--or less than 1% of its total assets, said the article.

CUNA's Magill noted that "even if a credit union the size of Navy Federal bought up enough credit union business loans to take it to its own cap, that would only be about a year or two years' worth of small-business loan growth."

National Credit Union Administration Chairman Debbie Matz told the publication that underwriting standards for loan participations must meet or exceed the standards that purchasing credit unions use in originating their own loans, but loan participations can be a valuable tool for credit unions seeking to diversify their portfolios.

CUNA Mutual deposits 1.25M for community investment

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MADISON, Wis. (7/10/12)--CUNA Mutual Group has provided three community development credit unions (CDCUs) in California an interest-free, $1.25 million deposit to stimulate development in their underserved areas.

The three credit unions participating are Northeast Community FCU, San Francisco; Faith Based FCU, Oceanside, Calif.; and the California operations of Self-Help FCU, an affiliate of Self-Help CU, Durham, N.C.

The zero-interest deposits to credit unions from CUNA Mutual are part of the California Department of Insurance's California Organized Investment Network (COIN). Since 1997, the COIN program has spurred insurer investment in underserved and rural communities statewide by providing modest tax benefits and fair returns to investors.

The three CDCUs each received one or two deposits of $250,000 and have discretion on where to spend the investments in their areas to encourage community development. In return, CUNA Mutual and other investors in the program receive tax credits.

"This pilot program for CUNA Mutual Group is a win for everyone involved," said Cami Douglas, vice president, corporate tax, CUNA Mutual. "It helps us live out our mission of helping credit unions and their members, and gives credit unions the opportunity to provide loans or other support to small businesses and non-profits in economically disadvantaged communities."

California's insurance commissioner, Dave Jones, called out several insurers and financial institutions for their participation in the COIN program, in a press release.

"Today, we thank UnitedHealthCare, Blue Shield of California, CUNA Mutual Group and CSE for stepping up to the plate and making major community development investments," Jones said.

The COIN program allocates $2 million annually in tax credits to support $10 million in community development investments. Under the COIN tax credit program, investors invest a minimum of $50,000 as equity or a zero-interest loan with a Community Development Financial Institution (CDFI) for 60 months. In exchange, the investor receives a state tax credit.

The CDFIs use the funds to provide loans or other support to small businesses and non-profits that serve economically disadvantaged communities. After 60 months, the loans are repaid.

St. Helens Wauna sign merger intent

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ST. HELENS, Ore. (7/10/12)--Two Oregon credit unions--Wauna CU and St. Helens (Ore.) Community FCU--have announced plans to begin merger discussions.

The boards of directors for both credit unions have signed a nonbinding letter of intent "to explore the benefits associated with merging" the two entities, according to a statement released by the two credit unions.

"Officials from both organizations are committed to do what is right for their membership and the communities they serve," said Robert Blumberg, president/CEO of Wauna CU, based in Clatskanie, Ore., with $143 million in assets. "Key factors to these discussions include the impact that the economy and competition has for credit unions of our asset size, plus both credit unions share a common heritage and serve local communities."

St. Helens FCU has $166 million in assets, according to the Northwest Credit Union Association (Anthem July 9).

A merger would produce greater efficiencies and support needed technology advancements, Blumberg said.

Minn. CUs recovering faster than states banks

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ST. PAUL, Minn. (7/10/12)--Minnesota's 130 credit unions are recovering from 2008's financial collapse much faster than the state's banks.

About 78% of Minnesota's credit unions won Bauer Financial recommendations in the first quarter, bettering the national average of 73.7%, and an improvement from 64% in the first quarter of 2012, according to Finance and Commerce (July 9).

Minnesota credit unions also posted the third-fastest rate of improvement among all the states.

About 56% of Minnesota banks were recommended by Bauer this year, an improvement from 50% last year. Nationally, 65.6% of banks were recommended by Bauer.

Faster recoveries coming out recessions are typical for credit unions, Ben Rogers, chief researcher with the Filene Research Institute, told Finance and Commerce.

Minnesota credit unions were assisted by a boost in consumer confidence, which helped improve auto and home lending, Dan Stoltz, president of Spire FCU, Roseville, Minn., told the publication.

Credit unions also improved their operational efficiency, Stoltz said.

Miracle Jeans Day materials are ready

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WASHINGTON (7/10/12)--Support materials are available for Miracle Jeans Day--designated as Sept. 12--when credit union employees nationwide will wear jeans to work in exchange for a $5 donation to their local Children's Miracle Network Hospital.

Miracle Jeans Day is a national campaign for Credit Unions for Kids.

Among the materials available are:

  • Miracle Jeans Day marketing packet;
  • League marketing calendar;
  • Newsletter articles;
  • Sample chapter president e-mail; and
  • Suggested tweets.
Credit union league employees also can participate in the campaign. Georgia Credit Union Affiliates, Montana Credit Union Network and Mountain West Credit Union Association have registered their staff to participate.

Credit unions and their leagues have come up with their own ideas to promote the event. The Northwest Credit Union Association is holding a Miracle Jeans Day at its annual meeting. Last year, the League of Southeastern Credit Unions encouraged employee participation by creating a competition among departments. Miracle Hat Day and Miracle Jersey Day have both been successful at credit unions where employees already wear jeans to work.

Credit Unions for Kids, a nonprofit collaboration of credit unions, chapters, leagues/associations and business partners nationwide, raises funds for 170 Children's Miracle Network Hospitals. Credit unions are the third-largest sponsor of the hospitals, and 100% of every dollar donated goes to support research and training, purchase equipment or pay for uncompensated care for children.

CU System briefs (07/06/2012)

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

CUs can help women in gender gap on fin ed

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

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

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

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

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

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

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

Accountant pleads guilty in St. Paul Croatian fraud

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

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

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

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

Andrews FCU launches shared-branching initiative

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

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

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

Worldwide foundations online auction goes live today

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

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

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

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

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

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

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

Bankruptcy filings drop 14 in first half of year

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

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

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

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

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

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

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

Proposed rules allow Canadian CUs to expand nationwide

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

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

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

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

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

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

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

Global CU membership climbs to 196M WOCCU

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

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

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

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

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

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

To access the report, use the link.

Maine CUs added 3300 new members in 1Q

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

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

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

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

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

CU System briefs (07/05/2012)

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  • WILKES-BARRE, Pa. (7/6/12)--Cross Valley FCU, Wilkes-Barre, Pa., is the second Pennsylvania credit union that has offered Scranton, Pa., city employees affected by recent budget cuts some assistance. The $160 million asset credit union is offering, among other solutions, a new Liberty Line of Credit, said the Pennsylvania Credit Union Association (Life is a Highway July 3). The service offers members affected by the city's decision up to $7,500, with no payment, no interest and no fees for the first 90 days and a low annual percentage rate to follow. Current members who already have loans will receive loan deferral options. And Cross Valley FCU will offer individual financial plan consultations. Earlier, Tobyhanna FCU, Scranton, announced it would assist city employees after Mayor Chris Doherty  unilaterally cut city employees' salaries to the federal minimum wage of $7.25 an hour (News Now July 2) …
  • BARRE, Vt. (7/6/12)--Vermont State Employees' CU, based in Montpelier, Vt., has pledged $120,000 during the next three years to help the Vermont Foodbank move food around the state (Associated Press Newswires July 3). The amount is about the cost to operate a Foodbank truck that makes a daily trip between Rutland and Burlington for a year, said the Foodbank. The budget for that truck route is roughly $40,000 a year. Foodbank delivers donated food to about 280 food shelves, meal sites, shelters, senior centers and after-school programs. The $560 million asset credit union has supported Foodbank for nearly 20 years. This is its first multi-year pledge …
  • RICHMOND, Va. (7/6/12)--Members of Richmond-based Virginia CU have begun depositing checks using their smartphones. Virginia CU Mobile Banking users deposit their check by taking a picture of it on their iPhone or Android smartphone. Although large banks and financial industry giants offer the service, the credit union said it may be the first local credit union or community bank to do so. "VACU moved quickly to offer this service because of the rapid adoption of mobile banking by its members," said Frank Carina, VACU vice president for e-services. Nearly 35,000 members have signed up for mobile banking since it was launched last summer. The $2.3 billion asset credit union was an early adopter of e-services, offering online banking and bill pay since 1997. It also recently launched VACU MoneyTracker, a free personal financial management tool that helps members manage and track income, expenses and spending. Members can categorize transactions to see where and how they spend money and use the information to establish a budget. They also can create a savings goal and monitor their progress each month …

Fraud text alerts topic of TMG paper

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DES MOINES, Iowa (7/6/12)--How financial institutions (FIs) can incorporate text messaging as a crucial communications tool in their fraud prevention programs is the topic addressed by Cards Risk Senior Manager Karen Postma in a new white paper issued by The Members Group (TMG).

The white paper also outlines four misconceptions that have made some FIs hesitant to implement fraud text alerts.

Relied on by millions of people every day, text alerts are a powerful weapon in any fraud-fighting arsenal, writes Postma, in "Turn Mobile Phone Users into Fraud Crime Stoppers."  Yet, she adds, even with the ease of use and potential fraud loss savings, some FIs worry that:

  • Cardholders may dismiss their fraud text alerts as spam;
  • Merchant names are too confusing for text alerts;
  • Members and customers already receive too many marketing-related messages via text; and
  • Text alerts are not practical unless the FI has rolled out a complete mobile strategy.
Postma's white paper addresses those perceived obstacles and summarizes the potential advantages for FIs that provide this simple, non-invasive way for cardholders to help prevent fraud.

"Text alerts reach possible victims faster and have a greater chance of inspiring a response," Postma concludes. "In the realm of fraud prevention, text messaging can become a tremendous ally for FIs battling a sophisticated contingency of card fraudsters."

For more information, use the link.

Calif. homeowner bill will slow foreclosures

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SACRAMENTO, Calif. (7/6/12)--California lawmakers Monday passed a set of foreclosure relief bills that will help hundreds of thousands of state residents facing foreclosures to stay in their homes. The bills could be a template for the rest of the U.S.  

Credit unions could be impacted by the legislation, which is the first of its kind in the U.S. The measure would end the practice of "dual tracking," in which a lender goes through foreclosure procedures, even if the homeowner is trying to obtain a modification on the terms of the loan (Houston Chronicle and The Associated Press July 30).

"Credit unions understand that the intention of mortgage reform legislation is to help distressed borrowers who were negatively impacted by a devastating recession," the California Credit Union League said in a prepared statement sent to News Now. "We share the same concern, but we also believe these reforms were proposed to address the practices of other lenders.

"We maintain strict underwriting standards, and are wary of additional burdens that would impede our ability to help struggling Californians emerge from a lingering economic downturn," the league added. "Our primary focus is to continue working with members to keep them in their homes."

The bills reflect and extend protections that came about through a nationwide settlement between 49 state attorneys general and five of the biggest U.S. banks that service mortgages, the newspaper and AP said.

The bills also would require financial institutions to provide a single point of contact for borrowers who want to discuss their loans. Another stipulation mandates that lenders either approve or deny loan-modification requests and provide a clear rationale for the decisions, the paper and AP said.  

California Gov. Jerry Brown said he would sign the bills into law.

CU development educators program marks 30 years

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Graduates of the Spring 2012 Development Education Training stand outside of the World Credit Union Center campus in Madison, Wis.
MADISON, Wis. (7/6/12)--Thirty certified Credit Union Development Educators (CUDEs) gathered in San Diego last month to celebrate the 30th anniversary of the Credit Union Development Education (DE) Program.

The credit union philosophy training program from the National Credit Union Foundation (NCUF) started in 1982 and continues to educate credit union professionals worldwide every year.

A 30th anniversary reception was held during the annual workshops for CUDEs that took place June 20-22 in conjunction with Credit Union National Association's America's Credit Union Conference.

The workshop also featured sessions on innovation, immigration issues, sustainability, community development financial institutions, advocacy, young adults, activities/projects by CUDEs, and updates on the DE program.

Graduates of the DE program attending were from training sessions ranging from the first year in 1982 to the most recent training in April.

Alumni of the Credit Union Development Education (DE) Program gather at the DE Workshop, June 20 in San Diego.
"We never dreamed the program would evolve in the way it has, and what an awesome group of dedicated credit union volunteers and professionals it has grown to be," said Susan Luke, owner of Luke Communications Group and a graduate of the first DE Training in 1982.

"It wasn't until I attended this remarkable program that I truly realized we are part of a movement," said Ruben Cisneros, chief operations officer at Border FCU, Del Rio, Texas, and a graduate of DE Training in April.

"It's a movement with social values that I strongly believe in and have applied after attending DE Training," He added.

The DE program began in 1982 with a grant to the CUNA Foundation (now the NCUF, from the U.S. Agency for International Development).

Attendees of an early Development Education Training class gather at the St. Benedict Center (now Holy Wisdom Monastery) where training was held in Middleton, Wis. (Photos provided by the National Credit Union Foundation)
Eighty-eight programs received funding over time, but the Credit Union Development Education Program is the only one still in existence.

"For 30 years, the DE Program has stayed true to its original intent and has been instrumental in increasing the awareness and support of international credit union development efforts, which has helped to strengthen credit union movements in other countries and the services offered to members everywhere," noted Lois Kitsch, NCUF national program director.

The next DE Training, at Madison, Wis., Sept. 6-13, is sold out.

However, there are two trainings scheduled for 2013, with the first taking place May 1-8.

For more information, e-mail cude@ncuf.coop.

During the week-long program, participants are involved in group exercises and field trips, are encouraged to ask questions of speakers, and must complete team projects proposing solutions for credit unions to help alleviate or eliminate challenging situations.

30-40 of consumers on e-statements use paper too

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HERNDON, Va. (7/6/12)--Although going paperless is a reason often cited for switching to online services, nearly 30% to 40% of consumers who receive financial statements and bills online also continue to receive paper statements, according to a white paper from NACHA-The Electronic Payments Association and PayItGreen.

The paper, which called the trend "double dipping," is based on a study by Javelin Strategy & Research. The trend wastes resources and creates an unnecessary burden on the environment, said Javelin. It also weakens financial organizations' return on investments and creates inefficiencies that require twice the service, said a press release from NACHA.

The most surprising find, according to the paper, was that the double dipping trend exists primarily among tech savvy Gen Y consumers (consumers between ages 18 and 32) and Early Adopters, who identify themselves as the first to try new technology.

Still, credit unions and other financial institutions may see some response if they urge their member/consumers to go completely paperless when they sign up for online statements. The study noted that 20% of Gen Y consumers simply "forgot" to terminate their paper statements when they switched.

The study also indicated that 41% of Gen Y and 48% of Early Adopters would be receptive to the automatic shutoff of paper statements when they sign up for online billing and payments.

"These findings present a significant opportunity for financial institutions and billers," said Janet O. Estep, NACHA president/CEO. "Through targeted educational programs and messaging, organizations of all types can counter the ongoing attachment to paper and encourage the adoption of paperless behaviors. By doing so, they can reduce the impact of paper-intensive processes on the environment while maximizing efficiencies."

International Co-op Day is Saturday

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MADISON, Wis. (7/6/12)--Credit unions will be among the nearly 30,000 U.S. cooperative businesses celebrating Saturday as the United Nations (U.N.) International Day of Cooperatives.

The U.N. has proclaimed that co-ops be formally recognized each year on the first Saturday of July.

This year's theme--"Cooperative enterprises build a better world"--links to the observance of 2012 as the U.N.'s International Year of Cooperatives (IYC). It seeks to encourage the growth and establishment of cooperatives worldwide, and to recognize the actions of cooperatives in helping to achieve internationally agreed-upon development goals, such as the Millennium Development Goals.

In a video commemorating U.N. IYC, U.N. Secretary General Ban Ki-moon notes the role credit unions played in supporting the global economy during the recent financial crisis.



"The global financial and economic crisis has also demonstrated the resilience of alternative financial institutions such as cooperative banks and credit unions," said Ban. "In this International Year of Cooperatives, I encourage all stakeholders to continue building awareness and pursuing policies to strengthen cooperatives everywhere."

The U.N. believes the cooperative movement helps local economies by having "citizens themselves rely on self-help and their own responsibility to meet goals that include not only economic but social and environmental objectives."

In the U.S., Americans hold more than 350 million co-op memberships, according to the National Cooperative Business Association. With assets of $3 trillion, U.S. cooperatives contribute two million jobs and $652 billion in sales to the U.S. economy.

On Saturday, the Cabot Creamery Cooperative's 2012 Community Tour will conclude at the Celebrate Portland Festival in Portland, Maine, where 2,000 to 3,000 attendees are expected. The Maine Credit Union League will be among the groups welcoming the riders.

The Cabot Creamery Cooperative 2012 Community Tour is a two-month tour to celebrate the U.N. IYC. The 366-mile tour, which departed from Miami on May 12, passed through every state along the Atlantic coastline (News Now June 7).

Another bicycle tour also is celebrating 2012 as the U.N. IYC. The Co-cycle Project is a student-led, bike-powered tour linking co-operatives across the U.S. on a west-to-east route.

The tour was organized by students of Hampshire College, and is sponsored in part by UMass College Five FCU, Amherst, Mass.

My CU is everywhere campaign adopted in Arkansas

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GRAND RAPIDS, Mich. (7/6/12)--The Arkansas Credit Union League has adopted the "My Credit Union is Everywhere" video from the Grand Rapids, Mich., credit union service organization, CU*Answers, for the league's statewide cooperative advertising campaign.

The "Everywhere" concept has generated the most grassroots participation by credit unions--more than any other campaign used in Arkansas, the league said.

Since the early 1990s, credit unions throughout Arkansas have contributed to a cooperative advertising fund designed to increase credit union awareness and membership in the state.

The fund is managed by a group of Arkansas credit union CEOs and marketers appointed by the league board of directors. The committee is charged with developing and promoting a "brand" that can be recognized and embraced by state credit unions.

Arkansas credit union employees wear green shirts to promote the "My Credit Union is Everywhere" Campaign. The Arkansas Credit Union League adopted the program from the Grand Rapids, Mich., credit union service organization CU*Answers. 
Credit union employees in Arkansas wear green "credit union" shirts the last Friday of each month and while performing community service in their respective communities. (Photos provided by the Arkansas Credit Union League)
A nationwide search for an advertising concept lead the committee to CU*Answers' Everywhere campaign.

The video was adapted for a 60-second television commercial, a 30-second radio spot and a billboard featuring the "green shirt" guy.

The campaign also included a YouTube link and postings to Facebook. Credit unions were urged to link to the commercial on their home page, and to have employees wear green "credit union" shirts, just like the guy in the commercial.

Arkansas credit union employees wear the green shirts the last Friday of each month and while performing community service in their respective communities.

Credit unions take photos of their employees in the green shirts while they perform community service. The credit unions then issue press releases with the photos to the local newspapers.

Ohio bill may impact lien powers at CUs

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COLUMBUS, Ohio (7/6/12)--The Ohio Credit Union League is monitoring a bill that would increase the exemption for property used as a residence to $500,000 from the current $20,200 as it progresses through the Ohio General Assembly.

House Bill 479, which would create the Ohio Legacy Trust Act, could impact credit unions, said the league in its newsletter (eLumination Newsletter June 27).

HB 479 could negatively affect creditors' ability to enforce and college judgment liens, said the league. "The league has been and continues to work with legislators and interested parties to address its concerns in order to minimize the effects on credit unions," the league said.

The bill states it would modify certain property rights in the Ohio Trust Code, require the recording of personal property transfers with the county recorder upon request, regulate the temporary conveyance of trust real property for financing purposes, and make changes in the state's exempt interests law, its fraudulent transfers law, a secured transactions recording law,  and a rule against perpetuities.

The Ohio legislature is recessed, and no further action is expected on the bill until after the November election, said the league.

Xtend Inc. re-elects two board directors

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GRAND RAPIDS, Mich. (7/6/12)--Credit union service organization (CUSO) Xtend Inc. stockholders re-elected two board directors from Grand Rapids, Mich.-based credit unions at its annual stockholder meeting June 19.

Re-elected to three-year terms were David Keim, CEO of Western Districts Members CU, and Brian Turmell, CEO of AAC CU. Their terms will begin Oct. 1. 

Keim has served on the Xtend board since 2003, and Turmell has served since 2006.

The CUSO is based in Grand Rapids and provides managerial, operational, marketing, technical planning and consulting services for credit unions. It is owned by 65 credit union partners.

CU 24 elects officers board members

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TALLAHASSEE, Fla. (7/6/12)--Two credit union leaders have been elected to the board of Credit Union 24, the credit-union owned ATM and point-of-sale network, and two incumbents have been re-elected. Officers of the board also were re-elected.

Officers re-elected to another one-year term during 2012-2013 include:

  • Chairman, Bradley Blake, president/CEO of Florida State University CU, Tallahassee;
  • Vice chairman, Joan Nolan, vice president of operations support at IBM Southeast Employees FCU, Boca Raton, Fla.; and
  • Secretary/treasurer, Becky Hulett, chief financial officer of 121 Financial CU, Jacksonville, Fla.
Two new board members include James Smith, president/CEO of Singing River FCU, Moss Point, Miss., elected to a three-year term, and Paul Numbers Jr., president/CEO of State Employees CU, Jacksonville, elected to a one-year term.

Incumbents Blake and Alvin Cowans, president/CEO of McCoy FCU, Orlando, Fla., were both re-elected to three-year terms on the board.

Other current board members include: 

  • David Mooney, president/CEO, Alliant CU, Chicago;
  • David Southall, president/CEO of Innovations FCU, Panama City Beach, Fla.; and
  • Dan Wollin, president/CEO of PCM CU, Green Bay, Wis.
Credit Union 24 is a credit union-owned has more than 300,000 ATM locations and offers surcharge-free ATM access at nearly 70,000 locations.

Corporate America CU CEO Bonds resigns

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IRONDALE, Ala. (7/5/12)--Corporate America CU (CACU) President/CEO Thomas Bonds has resigned, announced CACU's board of directors Tuesday.

Bonds joined the staff at the Irondale, Ala.-based corporate in 1998, and has served as president/CEO the past 11 years.  Under his leadership, CACU suffered no losses--either to their membership capital shares or paid-in-capital, said the board's announcement.

Prior to CACU, Bonds was an examiner for corporate credit unions and principal examiner for natural person credit unions with the National Credit Union Administration (NCUA). He is licensed as both a certified public accountant and an attorney in Alabama.

"It is clear that the corporate credit union industry is changing," said Bonds. "As such, I believe I can better use the skills I have acquired over the past 25 years to assist credit unions with brokerage services."

Dan Buckley, senior vice president of risk management at CACU, will serve as interim president/CEO, while a search begins for a successor to Bonds, said Board Chairman Steve Nix. Buckley joined CACU in 2010. Prior to that he worked 25 years as corporate field supervisor for NCUA.

CU System brief (07/03/2012)

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  • SOUTH BEND, Ind. (7/5/12)--Jeanette Kehrli Moeller, a former chairman of the board at Teachers CU, South Bend, Ind., died June 27 in South Bend. A former teacher, she was 85. Moeller was elected to the board at the $2 billion asset credit union in 1974. She served as board chairman from 1989 to 1998, and was a board member with the Indiana Credit Union League for three years. She was with TCU until 2011, by which time it had grown into the largest credit union in the state (South Bend Tribune June 29) …

Catalyst Western Bridge Corporates complete consolidation

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PLANO, Texas (7/5/12)--Catalyst Corporate FCU completed its consolidation with

Western Bridge Corporate last weekend. The conversion has been underway since early this year.

During the weekend, Catalyst Corporate's final conversion activities included transferring core items, billing, wire services and Internet connectivity.

"Each phase of this very complex conversion process has gone smoothly," said Catalyst Corporate President/CEO Kathy Garner. She said 315 Western Bridge members made the transition as capitalizing members.

Credit unions transitioned services such as automated clearinghouse (ACH), remote deposit and check processing. Catalyst Corporate's daily check processing volume jumped from 420,000 items a day in April to nearly 700,000 items daily in June, including one day with more than 1.2 million checks processed.  Catalyst also has converted 57 credit unions to its ACH origination service, 135 to its ACH receipt service, and 81 credit unions with nearly 4,000 securities onto its new safekeeping system.

Comedian named N.M. CUs spokester

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ALBUQUERQUE, N.M. (7/5/12)--The Credit Union Association of New Mexico announced it has a new Young & Free "spokester."

Anthony Almanzar, a broadcast journalism major at the University of New Mexico and a budding comedian, was chosen from 12 candidates to become the Credit Union Association of New Mexico's second Young & Free spokester. (Photo provided by the Credit Union Association of New Mexico)
Anthony Almanzar, a broadcast journalism major at the University of New Mexico and a budding comedian, was chosen from a group of 12 candidates who applied for the position.

The association, which sponsors the program, surprised Almanzar with the news that he had won the competition on a local morning radio show where he was on air to tout an upcoming comedy appearance.

Almanzar will use social media, videos, blogging and personal appearances to attract 18- to 25-year-olds to become credit union members. During his one-year tenure, Almanzar will have the use of a car to help him spread the credit union message. He also will receive a Mac laptop, a video camera and iPhone.

Almanzar, the second Young & and Free spokester sponsored by the association, succeeds Michelle Peterson.

Western Pa. CUs report text scams

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HARRISBURG, Pa. (7/5/12)--Members of credit unions in western Pennsylvania have reported receiving text and cell phone messages informing them that their credit cards are being deactivated, according to the Pennsylvania Credit Union Association (PCUA).

The recipients are asked to call a number in the 724 area code and provide requested account information (Life is a Highway July 3).

Sue Jackson, CEO of Family First FCU in New Castle, Pa., reported the scam to the New Castle News.

This is an example of a smishing (texting) scam, similar to phishing, PCUA said, in which an e-mail is sent to a user falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for identity theft. Once thieves have personal account information, they can steal from the accounts, charge purchases to credit cards, and access other personal information.

"Unfortunately, we hear about incidents like this more and more," said Sheba Wallish, manager of PCUA's Card Services. "The best thing credit unions can do is to continually educate their members on what to do in this type of situation, and that they should never give out their account number to an unknown party. Also, let members know that the credit union would not call them asking for account information."

Credit unions should advise members who believe they are victims of identity theft to notify the credit union immediately, PCUA said. Victims also should report incidents to the Federal Trade Commission and the Federal Bureau of Investigation.

Ohio CU chapter cash mobs a business

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COLUMBUS, Ohio (7/5/12)--The Central Ohio Credit Union Chapter hosted its second in a series of cash mobs--an event in which people are encouraged to descend on a small business and spend money.

Hosted at The Peanut Shoppe, a long-standing small business in downtown Columbus, Ohio, a steady stream of downtown workers and credit union mob supporters helped bring dozens more customers to the shop, according to The Columbus Dispatch (June 22).

On a day with similar weather conditions, the shop had only one customer arrive between 11 a.m. and noon. On June 21, the shop served 30 customers at that time, the shop's owner told the newspaper.

The chapter said it hopes to see continued success each month because supporting local business is important to the mission of all credit unions, said the Ohio Credit Union League (E-Lumination Newsletter June 27).

The chapter has future cash mobs planned for a nursery, a restaurant, a chocolate shop and several other businesses.

16 polled in Georgia Owning a home no longer a goal

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DULUTH, Ga. (7/5/12)--A Georgia Credit Union Affiliates' (GCUA) survey showed that a growing number of Georgians are putting off home ownership, reflecting a nationwide trend.

More than 16% of respondents to GCUA's 2012 Mid-Year Consumer Poll said that while owning a home used to be important, it is no longer a current goal.

Respondents indicated several factors affected their attitude about home ownership:

  • 37.8% cited earning less income;
  • 47.8% cited paying down debt; and
  • 47% cited the national economy as the reason for their shift.
Consumers nationwide are taking a cautious approach to homeownership, said Doug Duncan, vice president and chief economist of Fannie Mae, upon the release of Fannie Mae's May 2012 National Housing Survey.

"Our May consumer data show that Americans are taking a 'wait-and-see' approach about buying or selling a home," Duncan said. "This is not surprising given their assessment that their income during the past 12 months and their personal financial expectations for the next 12 have leveled off."

Although consumers may be putting off their house purchases, another survey showed that home ownership is still a long-term goal for consumers. A recent survey by Better Homes and Gardens indicated that eight out of 10 respondents still feel owning a home is an important part of the American Dream.

Polly Bell, president of MEA FCU, Columbus, Ga., has not seen a significant shift in attitude toward owning a home. "It's still the average person's basis for building future wealth," Bell said. Suppressed home prices and historically low interest rates have combined to help make the dream of home ownership more attainable, she added.

MEA FCU, with $61 million in assets, is not financing as many home loans as before recession, but it is receiving more requests to refinance or combine home equity loans and first mortgages at current low rates, Bell said.

MCUE CU loans and savings grow in May

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MADISON, Wis. (7/5/12)--Credit union loans grew at the fastest pace in nearly three years, and loan growth should continue in the near future, a Credit Union National Association (CUNA) economist said in his analysis of CUNA's Monthly Credit Union Estimates (MCUE) for May.

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"Credit union loans grew by 0.54% in May--a 6.5% annualized rate--and the fastest monthly increase since August 2009, when the federal cash-for-clunkers program was in full swing," Mike Schenk, CUNA vice president of economics and statistics, told News Now.

"Loan growth outpaced the 0.21% growth in savings balances--2.5% annualized--in the month. As a consequence, the movement's aggregate loan-to-savings ratio increased from 67.1% in April to 67.3% at the end of May--the second straight month that reflected an increase," Schenk said.

"Seasonally strong borrowing should bring a continuation of this pattern in the coming months, which--all else equal--should have a positive influence on credit union bottom-line results as short-term, liquid investments yielding close to zero are replaced with higher-yielding assets," he added.

Credit union loans totaled $592.7 billion in May, compared with $576.3 billion in May 2011.

Used-auto loans and adjustable-rate mortgages led loan growth, each with a 0.8% increase, according to the MCUE. Fixed-rate mortgages and new-auto loans rose 0.7% each. Credit card loans were up 0.6%, unsecured personal loans grew 0.1%, and home equity loans fell 0.5%.

Asset quality--credit unions' 60-plus-day delinquency rate--deteriorated, but only marginally as dollar delinquencies inched up from 1.42% in April to 1.44% in May, Schenk said. The increase represents the first increase after four consecutive months of decline.

"Going forward, we expect continued, though slow, improvement in economic conditions, with a continuation of labor market improvement, marginal income gains and more loan growth. If that scenario plays out, credit unions should expect a re-emergence of the trend of improving asset quality," he explained. "More important, the improvements are likely to push the expected aggregate delinquency rate back down near the 1% long-run norm by 2013."

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Earnings,or return on assets (ROA), declined slightly from an annualized rate of 0.96% in April to 0.83% in May, Schenk said. Overall, credit unions collectively posted a 0.80% ROA in the first five months of 2012--0.86% in full year 2011 (0.68% with corporate stabilization expense).

The movement's overall capital-to-asset ratio increased, to 10.15% at the end of May from 10.11% in April, Schenk added. The total dollar amount of capital is $104 billion.

Credit union savings in April totaled $880.9 billion--or $51.7 billion more than the $829.2 billion in May 2011. Credit union savings balances grew 0.2% in May compared to a 0.6% decrease in April, the MCUE indicated. Money market accounts grew 0.8% and regular shares increased 0.7%. One-year certificates fell 0.1%, individual retirement accounts dropped 0.2%, and share drafts declined 1.2%.

"Total memberships passed the 95 million mark for the first time in May," Schenk said. "Membership growth continued at strong pace--though somewhat slower than that recorded in the wake of Bank Transfer Day. Overall memberships increased 0.26% in May, a 3.1% annualized rate, the second-fastest monthly change this year. Since the start of the year, memberships are up 1.2%--2.8% annualized--the third-fastest five-month increase in the past 10 years."

Weather creates havoc in Mid-Atlantic states

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WASHINGTON (7/3/12)--While credit unions geared up CUAid to help Colorado credit unions and members affected by wildfires, credit unions along the Mid Atlantic experienced a different scenario: power outages related to fas- moving storms with hurricane-force winds that hit Friday and Sunday, creating power outages for millions in stifling heat, at least 17 deaths,  downed trees in six states, and dangerous commuting conditions for some on Monday.

Early reports indicate that there were no major disruptions in credit unions' service. However, is too early to gauge the full impact on credit unions and their members. Credit union leagues in Virginia, North Carolina and Ohio said they had not received enough information to determine whether all credit unions in their state had power or were open. News Now was unable to make contact with Maryland/D.C. Credit Union Association and the West Virginia Credit Union League to determine the status of credit unions in those states.

The Credit Union National Association's (CUNA) Washington, D.C., office was open Monday. While the area was working hard to restore power, some CUNA staffers remained without power in their home Monday. Some had challenges commuting to work because of tree damage clogging roads amd signal outages on the Metro, which slowed some trains on the D.C. metropolitan-area subway system.

The National Credit Union Administration, located in Alexandria in hard-hit northern Virginia, was "open for business as usual," said John Zimmerman, NCUA public affairs specialist, when asked by News Now. "Many employees made it into work despite lacking electricity at their homes or dealing with the traffic hazards on the way in." He noted that "federal employees were given the opportunity to take unscheduled leave."

The Virginia Credit Union League attempted to reach out to credit unions' CEOs and senior staff Monday, said Lewis Wood, league vice president of public relations and communications. "Being a holiday week, I'm certain that some [credit union senior staff]  planned to be out of the office. I'm sure there are those without power, as well, given the fact the outages are still so widespread," he told News Now.  "The good news is that we've had no reports, at present, of any significant damage to credit union facilities/branches," he added.

DuPont Community CU in Waynesboro, Va., had minor network connectivity and phone issues, but was the only financial institution in that area open on Saturday, Wood said.  DuPont Community posted a 3 p.m. Monday update that said its home banking is available, and that ATMs are available in Lucy Lane, West Maine, Stuarts Draft, Community Way, Reservoir, Kaylor, Verona and Woodstock.  "We continue to work with our power and Telco vendors to restore service at our Riverside and Terry Court locations," the site said. Members were advised to get cash back in stores that have that option and to continue checking the site for updates.

Another credit union in Arlington said one of its branches was closed Monday because it was without power. "With the holiday approaching, we anticipate call volume and branch traffic to be high," said Arlington (Va.) Community FCU in a service-status update to its members after the storm. It has disaster preparation and recovery plans in place and was able to quickly restore access to vital systems and services with a few limitations, the credit union said.

A branch on Glebe Road did not have power Monday and was closed. Incoming phone calls to the credit union weren't working Monday morning but were expected to be functional within the hour, with reduced capacity for volume. "Expect longer hold times," the credit union told members.

Arlington Community also noted its Access 24 was not available Monday, but Online Banking and Web Pay were functioning. Its Columbia Pike branch was open Monday, but it had limited printer, fax and phone system capabilities and was expecting an overflow of volume from the closed Glebe Road branch. The credit union said it would provide updates on its website.

In Baltimore, more than 220,000 BGE customers--homes and businesses--in Central Maryland remained without power Monday, said the The Baltimore Sun (July 2).  The majority will be restored to power Thursday or Friday, but some may take longer, said BGE.

West Virginia media reported that 60% of the state, or 263,845 customers of Appalachian Power, was without power Monday afternoon (The Charleston Gazette July 2). More than 257,000 American Electric Power (AEP) customers there also still had no power Monday afternoon (The Herald Dispatch July 2).  More than 50 of AEP's substations were damaged Friday and it is estimated power will be fully restored in Cabell, Wayne and Putnam counties by late Friday. The southern part of the state was hit both Friday and again Sunday by storms.  In Kentucky, about 39,000 were without power statewide.

The Herald Dispatch, said that overall Ohio has 399,910 customers without power Monday afternoon.

The Ohio Credit Union League told News Now Monday afternoon it sent a message to credit unions "first thing in the morning, trying to get an assessment of the situation and letting them know that the league, and the foundation, is there to help," said Patrick Harris, league director of media relations. "We received only a few responses, and from what we can gather, only a few are experiencing any issues--power outages, system reboots" and so on. "We have not heard of any branches or offices closing as a result of the storm," he told News Now.

In North Carolina, the website of Raleigh-based State Employees' CU, which has branches all over the state, did not have any reference to closed branches or power outages. Jeff Hardin, director of communications at the North Carolina Credit Union League said the league had not heard from credit unions about damages or closures.

CUNA Calls for entries for Community CU of Year

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MADISON, Wis. (7/3/12)--The Credit Union National Association (CUNA) will award the Community Credit Union of the Year Award to outstanding community credit unions that serve as positive role models in the field of service and exemplify the principles of the credit union movement. CUNA is making a call for entries.

The awards will be presented at the CUNA Community Credit Union & Grwoth Confernce Oct. 23-26 in Denver. Along with being recognized at the conference, winners will receive a profile in Credit Union Magazine, complimentary registration to the conference, the opportunity to co-present a Best Practices session at the 2013 conference and the privilege of announcing next year's award winners. Entries must be received by Aug. 6. 

Reserved for community credit unions and/or multi-select employee group credit unions, the award honors credit unions that consistently excel in the advancement of the ideals of the credit union movement, are proactive in their community and provide services that meet the needs of their diverse communities.

Four outstanding credit unions receive the award each year, with a first-place and honorable-mention winner in each asset category of less than $250 million and more than $250 million.

The CUNA Community Credit Union & Growth Conference provides the tools for credit unions to put their ideas into action and find new strategies to drive membership growth. Attendees will create ready-to-implement action plans to help their credit union reach its full potential.

For more information, use the links.

MidFlorida members letter to editor tells CU difference

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LAKELAND, Fla. (7/3/12)--A letter to the editor from a Florida couple espousing the credit union difference was published Monday in the TheLedger.com.

Nelson and Mary Burke shared their positive experiences as members of MidFlorida CU, Lakeland, Fla.

"While purchasing a new vehicle, we turned to a variety of loan sources," the Burkes wrote. "Every single bank was totally uncooperative, while credit unions were more than happy to have our business. In fact, MidFlorida CU, went above and beyond in making the deal happen in the least amount of time with the most favorable interest rate."

The Burkes also complemented MidFlorida CU for the great member service they received.

"Advantages of a credit union are local service, employees who truly care about their customers and keeping the money locally, so that our community benefits," they wrote.

For the full letter, use the link.

Portlands latest public deposits in Unitus Community

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PORTLAND, Ore. (7/3/12)--Unitus Community CU in Portland, Ore., is the most recent Oregon credit union to receive a public funds deposit from the city of Portland, according to the Northwest Credit Union Association.

The city passed a Responsible Banking Resolution in May, beginning a process of working more closely with local financial institutions. OnPoint Community CU, a $2.93 billion asset Portland credit union, and Advantis CU, an $810 million asset credit union based in Milwaukie, Ore., each received deposits in May (Anthem June 28).

Eight financial institutions had received deposits from the city as of the end of last month, according to information posted on the city's website. Unitus, an $834 million asset credit union, was one of two additional institutions listed that had not yet taken a deposit.

Portland City Treasurer Jennifer Cooperman said the process had already started. "We couldn't legally say that the deposit was made as of May 31, so as of May 31, the two credit unions that had money on deposit from the city of Portland were Advantis and OnPoint. If you look in a couple weeks when we post the June 30 information, you will see some updates, some additions to that."

Laurie Kresl, Unitus' vice president of planning and business development, confirmed that the credit union received a public funds deposit in June. Cooperman couldn't disclose the details but said that "during the course of the month, we did make additional deposits." The eight deposits reported by the city in May were each for $250,000.

CUNA closed Wednesday no INews NowI

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WASHINGTON and MADISON, Wis. (7/23/12)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association will be closed Wednesday in observance of the Fourth of July holiday.

News Now will not publish an issue on Wednesday but will resume regular publication on Thursday.

Miyashiro Porter appointed to CO-OP board

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RANCHO CUCAMONGA, Calif. (7/3/12)--Shruti Miyashiro of Orange County's CU in Santa Ana, Calif., and Benson Porter of BECU in Tukwila, Wash., have joined the board of CO-OP Financial Services to complete the terms of two retiring members.

Both Miyashiro and Porter were appointed by the board, with Miyashiro replacing Rick Craig of America First FCU in Riverdale, Utah, for a term extending to 2015, and Porter replacing Gary Oakland of BECU, whose term extends to 2014. Both new members took office, effective Sunday. 

Miyashiro had previously served as chair of CO-OP's independent, six-member Audit Committee since April 2010. She is president/CEO of Orange County's CU, a post she has held since 2007. She formerly was president/CEO at Pasadena (Calif.) FCU.

Porter not only succeeds Oakland on the CO-OP Board, but also as president/CEO of BECU, a position he assumed in April. He previously had served in the same capacity at First Tech FCU in Palo Alto, Calif.

CU System briefs (07/02/2012)

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  • SPRINGBORO, Ohio (7/3/12)--Wright-Patt CU (WPCU), based in Fairborn, Ohio, and Irongate Inc. Realtors, Centerville, have taken first steps to jointly restart Southern Ohio Mortgage, to promote local economic development and strengthen local communities through home ownership. Southern Ohio Mortgage operates in six Irongate Realtors offices in Englewood, Beavercreek, Centerville, Kettering, Washington Township, and Springboro.  "This partnership is a great example of how local companies can join together to help not only stimulate the local economy, but to help area residents achieve their dreams. And, when residents are successful, so are our communities," said Doug Fecher, president/CEO of WPCU. From left are Fecher; Tim Mislansky, president, myCU Mortgage, and senior vice president/chief lending officer of WPCU; and Greg Gillen and Steve Brown, both broker/owners of Irongate Inc. (Photo provided by Wright-Patt CU) …
  • RALEIGH, N.C. (7/3/12)--Coastal FCU announced the election of Joan Nelson as board chairwoman and the appointment of Chuck Purvis as Coastal's new president/CEO. Nelson brings 17 years of service on the board, since 1995, and previously served as vice chair. She has been a volunteer since 1993. She succeeds Richard Bloom, who was chairman for 38 of the past 39 years. Bloom will remain on the board as vice chair.  Purvis brings 30 years of industry experience , having previously served as executive vice president/chief operating officer. He succeeds Larry Wilson, who is retiring after serving as president/CEO of Coastal for 38 years. Purvis is former chairman of the National Credit Union Foundation and served on its board from 1995 to 2007. From 1992 to 2000 he has served as a member of the senior management team at various credit union organizations …
  • SAN ANTONIO (7/3/12)--San Antonio-based SACU announced that Pat Evans, SACU mortgage compliance officer, has been installed as president of Credit Professionals International (CPI) in a ceremony at CPI's conference in St. Louis, Mo. Evans has been a member of CPI since 2003. She has served as president, vice president and parliamentarian of CPI District 8.  At the local level, she has held numerous offices at the Alamo Chapter, including president, vice president, parliamentarian and treasurer. She was named International Credit Professional of the Year in 2010.  Evans, a member of the $2.9 billion asset SACU since 1973, has worked at the credit union for 27 years, spending much of her career in lending, managing direct, indirect and mortgage loan processing …
  • SUITLAND, Md. (7/3/12)--Col. Clifford E. Reese, USMC (ret.), who served on the board of directors at Andrews FCU, Suitland, Md., for more than 18 years, died April 9, according to the credit union. He was 84.  Reese was a member of the credit union movement for 55 years. He was known as a visionary leader, staunch member advocate and champion of U.S. military forces worldwide. He once served as chairman of the credit union's Supervisory Committee and chairman of Andrews Federal Corp.  "We are saddened by the loss of a true credit union advocate and supporter," said Chris McDonald, Andrews FCU president/CEO.  "Mr. Reese's commitment and devotion will long be remembered by all whose lives he touched." …

iNerd Walleti spotlights seven CUs fin lit programs

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MADISON, Wis. (7/3/12)--Seven credit unions were featured in a financial literacy blog post on Nerd Wallet, a personal Finance website committed to promoting financial literacy.

The blog, titled "Spotlight on Credit Unions" featured seven credit unions that provide resources for financial literacy on their websites.

"Your local credit union is an excellent resource for financial literacy materials," the article said. "That might sound surprising, but it actually makes a lot of sense. Here's why: credit unions are not-for-profit financial institutions. They offer all the same products and services as banks, but they're not owned by corporate shareholders. All credit union members are co-owners, so your local branch is eager to help you make smart financial decisions."

The Nerd Wallet blog also noted that credit unions make decisions in the best interests of their members.

The credit unions cited included:

  • Financial Center FCU, Indianapolis;
  • AmeriChoice FCU, Mechanicsburg, Pa.;
  • Metro CU, Boston;
  • UW CU, Madison, Wis.;
  • Kauai Community CU, Lihue, Hawaii;
  • BrightStar CU, Fort Lauderdale, Fla.; and
  • DuTrac Community CU, Dubuque, Iowa;
To read the full article, use the link.

Top 10 iNews Nowi stories for June (07/02/2012)

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MADISON, Wis. (7/3/12)--An article about how credit unions have outpaced banks in making small-business loans during the past year was the most-read News Now article in June.

The top 10 articles in June included:

10. ACUC: Achor--Train your brain for happiness, success

SAN DIEGO (6/20/12)--People can rewire their brains for higher levels of happiness--and in the process become more successful in business and relationships, Shawn Achor told America's Credit Union Conference attendees Tuesday morning.

9. CU signs consent decree in ADA-ATM lawsuit

PITTSBURGH (6/13/12)--Century Heritage FCU, based in Pittsburgh, signed a consent decree last week before a federal court in Pennsylvania, which will dismiss a class-action lawsuit alleging its ATMs violated the Americans with Disabilities Act.

8. Court upholds mortgage loan officers' overtime ruling

WASHINGTON (6/26/12)--A U.S. District judge in Washington, D.C., has upheld a Department of Labor administrative interpretation that says mortgage loan officers are not exempt from overtime under the Fair Labor Standards Act.

7. Federal Reserve to buy $267 billion in Treasuries

WASHINGTON (6/20/12)--The Federal Reserve's Open Market Committee today said it would extend "Operation Twist" by purchasing $267 billion in long-term Treasuries to reduce borrowing costs for American consumers and businesses.

6. Court explains denying ATM fee 'class action'

SAN ANTONIO (6/7/12)--A federal judge in San Antonio has denied an individual's class action certification in one of the lawsuits brought against financial institutions alleging they violated the Electronic Funds Transfer Act (EFTA) by failing to post notices of ATM surcharges.

5. Restaurant chain, LinkedIn hit by breaches

DAYTON, Ohio and MOUNTAIN VIEW, Calif. (6/8/12)--A restaurant chain in Ohio warned of a data breach in five of its restaurants in an area already seeing a spike in debit-card fraud, and credit unions using social media networks learned that the LinkedIn social network and  eHarmony site were compromised in other data breaches announced this week.

4. Put it on the map: NCUA's CU data by state

ALEXANDRIA, Va. (6/6/12)--Arizona is leading the way in average return-on-assets for the nation's credit unions, the National Credit Union Administration revealed in a new quarterly state-by-state review of the financial performance of credit unions.

3. NCUA hits exam issues at Fla. Listening Session

ORLANDO, Fla. (6/15/12)--It was another productive meeting, Credit Union National Association Deputy General Counsel Mary Dunn said of the National Credit Union Administration Listening Session she attended here this week, with examination issues and a possible revised definition of "small" credit union, in particular, front and center.

2. Man deposits 20 years' worth of coins at CU

HERNDON, Va. (6/12/12)--George Shoemaker, a member of Northwest FCU, Herndon, Va., is proof that saving pocket change can pay off.

1. Index: CUs outdo banks in small-biz loans

MADISON, Wis. (6/7/12)--Credit unions in the U.S. have outdone banks in the past year when it comes to small-business loans, according to the Biz2Credit Small Business Lending Index, an analysis of 1,000 loan applications on Biz2Credit.com., the company said.