Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

CU System Archive

CU System

CUs CO-OP raise nearly 1M for hospitals

 Permanent link
RANCHO CUCAMONGA, Calif. (8/11/09)--More than 130 participating credit union organizations raised nearly $1 million during the first six months for Children's Miracle Network. The funds are the result of credit union fundraisers combined with the CO-OP Financial Services' Miracle Match program. Through June 30, credit unions have raised $517,000, and CO-OP Miracle Match donations have added $445,000 for a total of $962,000 for the Children's Miracle Network. CO-OP is committed to donating up to $1 million of matching funds in 2009, and, based on fundraisers planned for the remainder of the year, CO-OP expects this pool to be fully used, "The credit unions, who do all the work in these fundraisers, are the heroes, and we are very proud to help them support children's hospitals in their local areas," said CO-OP President/CEO Stan Hollen. "This effort to improve the level of hospital care for children is an extension of the credit union movement and its tradition of uplifting the lives of individual members and entire communities." The 130 participating credit union organizations are located in 30 states. Leading the states are California (24), Texas (16), Wisconsin (15) and Missouri (13). The donations will go to more than 50 Children's Miracle Network-sponsored children's hospitals located in the fundraisers' local communities. This year, the Miracle Match program inspired credit unions to conduct 10 new fundraisers for the network. Credit unions raised $64,000 through these events, and Miracle Match donations from CO-OP totaled $88,000. Credit unions have sponsored fundraisers in their local communities as part of the Credit Unions for Kids program, which has partnered with Children's Miracle Network since 1996. Credit unions planning a Credit Unions for Kids program can learn more about the CO-OP Miracle Match program at the resource link.

Ruling means Subchapter S banks to pay back taxes

 Permanent link
CHICAGO (8/11/09)--A ruling finalized in July would require nearly 1,500 Subchapter S banks to pay three years of back taxes on municipal bond investments. The privately held banks could end up paying tens of millions of dollars if the ruling, by Judge Maurice B. Foley in favor of the Internal Revenue Service in the U.S. Tax Court, stands (American Banker Aug. 10). The banks are taxed under the Subchapter S rules of the Internal Revenue Code. Usually profits at S Corps are taxed only at the shareholder level and the corporations reimburse their owners for tax mistakes. The cost for the banks could range from $6 to nearly $300,000, said Baker Group LP, an Oklahoma City community banking consulting firm. The firm said that total S Corp banks nationwide would have owed $21.6 million for 2008, if the tax ruling had been in effect then. The statute of limitations for overdue taxes is three years. The ruling was finalized July 13. A lawyer at Godfrey & Kahn SC in Milwaukee, which will represent the owners of First Forest Park Corp., in Illinois in its appeal, noted the case is a test case for all Subchapter S bank. Some said this is the last chance for the banks to appeal the decision.

Vancity CUs bank no longer lending online

 Permanent link
VANCOUVER, B.C. (8/11/09)--Canada's largest credit union has announced that its online banking subsidiary will leave the personal banking marketplace to focus on Visa card services and foreign exchange services for non-retail members. Vancouver City Savings CU's (Vancity) website said its subsidiary, Citizens Bank, is moving to a "more streamlined business model." Vancity also announced it has entered into an agreement to sell most of the bank's retail loans to the Toronto-Dominion Bank (TD Canada Trust). It did not disclose the value of the deal. The move is a good business decision because it returns capital that can be reinvested to enhance member services at the credit union, while focusing on what Citizens Bank does best, said Vancity President/CEO Tamara Vrooman. "We pioneered online banking in Canada, but it's become a crowded marketplace," Vrooman said (Canada Newswire Aug 5). Vrooman added that Vancity's members have repeatedly said they wanted the credit union to focus on its core strengths. "We're local, we're community-focused and our offering is based on building relationships and providing service. In a national online market, we were unable to achieve the scale necessary to succeed. Therefore, the bank's business model wasn't making full use of our strengths." The sale closed Aug. 5. Citizens Bank, which was one of the first online banks in Canada, will become a non-deposit-taking bank and will sell most of its residential mortgages, personal loans and lines of credit secured by real estate to TD Canada Trust.

Letter to editor questions CUbank merger

 Permanent link
AUGUSTA, Maine (8/11/09)--A letter to the editor appearing in the Saturday Kennebec Journal questioned Kennebec Valley FCU’s proposed merger with Kennebec Savings Bank. Kennebec Valley FCU, Augusta, Maine, proposed converting to a bank and then merging with Kennebec Savings in September. The credit union’s board has since voted in favor of it. The conversion and merger is awaiting a vote from Kennebec Valley’s membership. When the merger proposal was announced, the credit union noted that the conversion and merger would significantly expand its capacity to meet the current and future needs of members (News Now Sept. 10). In the letter to the editor, Lucille Cloutier questioned what the advantage would be for members if the credit union converted to a bank. “A huge point has been grossly overlooked: What do the members get in return for turning over all of the credit union’s assets in this merger?” she wrote. “With all of the credit unions in the area who, like Kennebec Valley, manage to survive financially in this economy, why are we being asked to give it all away? Exactly what is the advantage?” she continued. To read the letter, use the link.

Australian CUs seek 1 billion super fund

 Permanent link
AUSTRALIA (8/11/09)--More than 25 Australian credit unions are slated to meet this week with the Australian Prudential Regulation Authority to ask for a $1 billion liquidity fund. The fund, which would be called the Credit Union Mutual Fund, would offer interest-generating coupons to industry super funds. It would give credit unions an alternative source of funding to expand their market share in home lending--currently at 7%, said The Australian (Aug. 10). Credit unions rely on deposits from members as their main source of money. Banks in the country can raise money in the wholesale money market with government-backed guarantees, but credit unions cannot because they aren’t big enough to receive a credit rating, the newspaper said. Mark Genovese, Maritime Mining Power CU CEO, said the money in the fund would earn a return each quarter for the super funds. The money would be added to credit unions’ balance sheets and then lent to their members, he told the newspaper. Australia has 126 credit unions, with more than $70 billion in assets and 4.6 million members.

CU gathers comments about Why I left bank

 Permanent link
SEATTLE (8/11/09)--Seattle (Wash.) Metropolitan CU is gathering comments from its members about why they chose to leave their bank and join a credit union. The comments are a part of Seattle Metropolitan’s “Intentionally Left Bank” campaign, which targets consumers who switched to credit unions from banks. The credit union said it has seen an increase in the number of new members as a result of the campaign (Seattle Business Journal Aug. 7). Members are sending comments to Seattle Metropolitan’s website about why they left banks. Some of the comments include:
* “My bank was inflexible, unapproachable and charged me for everything from my checking account to banking in person.” * “I get higher interest rates on my savings and lower interest on my loans at the credit union. The banks don’t offer anything I need that I can’t get at the credit union so what’s the point? I have not used a bank in almost 40 years.” * “I left my bank because when I went in to get a car loan they said I had to go home and call the 800 number or apply online and they would get back to me. At SMCU I walked in, talked to someone and left with a car loan and a smile on my face.” * “Bank? What’s a bank? I’ve been with SMCU for 20 years.”
Seattle Metropolitan CU’s website indicated that more than 100 members had submitted comments so far.

Oakdale CU damaged by lightning fire

 Permanent link
TOMAH, Wis. (8/11/09)--Oakdale CU’s lobby was damaged after a lightning strike and fire in the early morning hours of Aug. 3. The credit union, located in Tomah, Wis., is still operating. The Oakdale Fire Department responded to a fire at the credit union around 3:18 a.m. on Aug. 3 and saw signs of a lightning strike (The Tomah Journal Aug. 6). The $40-million-asset credit union is functioning through the back portion of its building in its community room. The system and phones are operating, Oakdale Operations Manager Jesse Braman told the newspaper. Estimated fire damage is at 30%. The credit union’s building will be remodeled and the lobby should re-open in one to two months, Braman said. Oakdale’s drive-through was temporarily closed and was expected to be open by now.

Heartland breach price tag 32 million so far

 Permanent link
PRINCETON, N.J. (8/11/09)--The price tag so far for history's largest data breach--the breach announced Jan. 20 by Heartland Payment Systems--is $32 million so far, the company said in its filing Friday with the Securities and Exchange Commission (SEC). According to the filing, the Princeton, N.J.-based payments processor expensed $32 million in the six months ended June 30 for expenses from the breach. Most of the charges--totaling $22.1 million--related to fines imposed by Visa and MasterCard in April against its company and its sponsor banks. Although the company said it believed it had a strong case, it has made a settlement offer to avoid the costs and uncertainty of litigation. In the document, Heartland said it was prepared to defend itself against all claims of liability that may be asserted or assessments that may be imposed by the card brands. The processor has not received a response to its settlement offer. Heartland said the accrual of fines and the settlement offer resulted in its recording a $14.4 million reserve for processing system intrusion as of June 30. That included $19.4 million expensed for the three months ended June 30. The breach compromised roughly 100 million credit and debit cards--the largest breach reported in history. It affected credit unions and their members--as well as other consumers and financial institutions--nationwide. The data breach spawned at least 31 lawsuits on behalf of consumers, investors, banks and credit unions. The class action lawsuits were consolidated by a judicial panel in June and will be heard in the Southern District Court of Texas in Houston. As late as July, credit unions were still reissuing members' cards compromised in the breach.

CU System briefs (08/10/2009)

 Permanent link
* DALLAS (8/11/09)--Texans CU, based in Richardson, Texas, helped raise $135,000 for the Juvenile Diabetes Research Foundation through its Texans CU Swing for a Cure golf tournament in Plano. Former Dallas Cowboy Cliff Harris, right, shown with Texans CU Chief Operating Officer Greg Gallant, hosted the tournament. Harris was joined by local celebrities Mike Modano, Rudy Gatlin, Pat Green, Rocket Ismail, Toby Peterson and Everson Walls. Texans was the title sponsor, supported by Dr Pepper, Snapple Group, Texas Western Hospitality, Andrews Distributing, Brazos Gas Co. and Lockheed Martin. (Photo provided by Texans CU) … * LAWRENCEVILLE, Ga. (8/11/09)--Gwinnett FCU and Aurora Theatre have
Click to view larger image Click for larger view
expanded their partnership with a five-year $125,000 pledge and season sponsorship from the credit union. The theatre will name its studio theatre the Gwinnett FCU Studio in honor of the $119 million asset, Lawrenceville-based credit union. Their partnership began a year ago when the credit union sponsored the drama, "Dracula." At the check presentation are, from left: Anthony Rodriguez, Aurora Theatre producing artistic director; Marshall Boutwell, president/CEO of Gwinnett Federal; Ann-Carol Pence, Aurora Theatre associate producer; and Katie Sweeney, Gwinnett Federal assistant vice president of business development. (Photo provided by Gwinnett FCU) … * ALBANY, N.Y. (8/11/09)--Miles Kucera, former founder and board director of Suffolk FCU in Medford, N.Y., and who was killed last week in a car crash, was also former chair of the Credit Union Association of New York, said the association Monday. Kucera began the credit union from the trunk of his car more than 40 years ago. He served on the association's board from 1986 to 2000 and as its chair from 1995 to 1997. He was inducted into the association's Hall of Fame in 2004. In 2007, the credit union's new headquarters was dedicated in Kucera's name. His death was reported in Monday's News Now