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CU System briefs (08/10/2010)

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* BATTLE CREEK, Mich. (8/11/10)--A person who robbed the Battle Creek, Mich., branch of American 1 FCU, shot a teller in the arm, and carjacked another employee is still at large, said the Emmett Township Department of Public Safety. The assailant entered the credit union through a window sometime after 8 p.m. Friday and confronted a teller who had arrived for work the next morning. The teller was shot while trying to escape, and his injuries were not life-threatening. Another employee arrived and the robber, who was covered head to toe, forced her from her car and stole the car. It was found later. The credit union's surveillance camera captured images of the robber. American 1 is headquartered in Jackson, Mich. (Battle Creek Enquirer Aug. 9) ... * LOS ANGELES (8/11/10)--A man convicted of helping steal nearly $80,000 from an ATM at the El Monte, Calif., branch of Los Angeles FCU was sentenced Monday to 190 months (nearly 16 years) behind bars (SGVTribune.com Aug. 9). Clinton Elwyn Thompson III, 47, was also ordered to pay restitution of about $124,000. A federal jury convicted him in May of conspiracy to use fire during the commission of a felony, bank larceny and use of fire during the commission of a felony. Several men were involved in the robbery, which involved using a high-powered thermal lance to cut an ATM in half. The robbery occurred on Jan. 28, 2008 ...

Schenk to IUSA TODAYI FIs must rebuild trust

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NEW YORK (8/11/10)--An article in Tuesday's USA TODAY about banking regulators and others encouraging low-cost bank and credit union "second chance" checking accounts featured a Credit Union National Association (CUNA) senior economist. One of the issues is the distrust that underbanked or unbanked consumers have of mainstream financial institutions and their fees, especially overdraft fees. Rebuilding trust with consumers who have had bad experiences with mainstream financial institutions "is definitely a hurdle we have to overcome," said Mike Schenk, CUNA vice president of economics and statistics, in the article. Some financial institutions are trying to clear that hurdle by teaming up with social services groups that work with low-income families. One example cited is the National League of Cities' "Bank On Cities" campaign, which helps participating communities setup partnerships with banks and credit unions to develop safe and affordable financial products for the unbanked and underbanked. Credit unions are participating in several cities. Such services provide a second chance for consumers who've bounced checks in the past, the article said.

Merchants up NSF fees by 20 says survey

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LAKE BLUFF, Ill. (8/11/10)--National retail merchants have boosted their nonsufficient funds (NSF) fees by 20% for checks consumers write that get returned for insufficient funds, according to a recent annual survey. Merchants now are charging a median fee of $30, compared with $25 in 2009, said Moebs Services, which conducted the study (alphatrade.com Aug. 10). “This is the highest percent increase we have ever seen national and retail merchants charge consumers for writing a bad check,” said Michael Moebs, CEO and economist at Moebs Service, a national economic research firm, based in Lake Bluff, Ill. Retailers’ fees now surpass banks’ and credit unions’ median fee of $27 for an NSF, he said. The Moebs study mentions two contributors to the 20% price increase:
* Merchants, like their customers, are hurting because of the economic recession. The substantial fee increase offsets costs and creates a more profitable bottom line. * Merchants do not want to be bothered with the cost of processing paper checks, and prefer debit cards and e-checks.
With the higher NSF fees coming in the midst of the back-to-school and vacation seasons, consumers need to be cautious about how they manage their checking accounts, Moebs said. Consumers should verify they have available funds to prevent double-dip fees and hits to their FICO scores, Moebs said. The new regulations on overdraft fees go into effect Sunday. Also, whether or not consumers opt-in for overdraft protection, they should sign up to receive an e-mail or text message alert when their checking account balance falls below a certain amount, he said.

September is National Preparedness Month

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MADISON, Wis. (8/11/10)--September is National Preparedness Month, which encourages Americans to take steps to prepare for potential emergencies in their homes, businesses and communities. The month also is an opportunity for credit unions to review their business continuity plans. The awareness month is sponsored by the Ready Campaign in partnership with Citizen Corps and the Ad Council. The Ready Campaign has several tips that businesses and credit unions can use to prepare for emergencies. The campaign suggested that businesses:
* Know what kind of emergencies could affect them. Emergencies include more than disasters. For example, they can be a broken water pipe, a power loss or a faulty server; * Carefully assess how the business functions, internally and externally; * Stock the business with emergency supplies, like fresh water, food, clean air and warmth; * Make plans for shelter or evacuation; * Be prepared for fires, medical emergencies, and pandemics such as influenza.
All employees should be involved in emergency planning and business continuity. The campaign also encouraged writing a crisis communication plan; promoting preparedness through employees and families; practicing a disaster plan; and supporting employee health by recognizing that individuals who have experienced a disaster may have special recovery needs. CUNA Strategic Services provider Agility Recovery Solutions will offer several free webinars to help credit unions with business continuity planning. The webinars will be offered Wednesdays at 1 p.m. CT throughout September. The webinars include:
* Business Preparedness: Can You Go Alone for 72 Hours? Sept. 1, with R. David Paulson, former administrator of the Federal Emergency Management Agency (FEMA); * Private Sector Preparedness Certification Program: What are the Advantages for a Small to Medium-sized Business? Sept. 15, with Marcus Pollock, operations officer, FEMA; * Business Preparedness: Both Inside and Outside of Your Organization, Sept. 22, with Jackie Snelling of the Individual and Community Preparedness Division/Citizens Corp. * Survivors’ Panel: Businesses Who Survived Disasters Speak on Lessons Learned, Sept. 29.
For more information, use the links.

San Francisco CUs make loans for taxi medallions

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SAN FRANCISCO (8/11/10)--Three San Francisco-area credit unions and one out-of-state credit union are part of a consortium of lenders making loans to facilitate sales of San Francisco taxi medallions (licenses) by taxi drivers, a move that could add millions of dollars to city coffers. San Francisco FCU, San Francisco Fire CU, San Francisco Police CU and Montauk CU, New York City, are part of the consortium (San Francisco Business Times May 20). Under the pilot program, taxi drivers who are at least 70 years old or who have a disability can sell their medallions--which will be priced at $250,000. Drivers will keep 80% of the sales revenue, the citys municipal agency will get 15% and a drivers fund will receive the remaining 5%. Up to 300 medallion-holders could qualify to sell during the trial phase of the program, which means San Francisco could garner $11.2 million if all the medallions sell, the Times said. Since 1978, when voters codified the city taxi laws, medallions were issued to drivers in exchange for a small fee. However, until now, drivers who had medallions were not given a mechanism to cash out on the lucrative licenses, the Times said. A taxi advisory council will observe the pilot program and likely will determine in 2011 if the pool of potential medallion sellers should be expanded, the city told the Times.

Study Fewer consumers opening card accounts

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COSTA MESA, Calif. (8/11/10)--Consumers are opening 26% fewer cards than they did three years ago, according to a new study by Experian, a global information services company. “As expected with the current financial environment, we can see that the average person has fewer cards... and is using credit differently than in the past,” said Michele Raneri, senior director of analytics, Experian. “This implies that many American consumers are relying less on cards and potentially trying to pay down debt.” According to the Credit Union National Association’s U.S. Credit Union Profile for first quarter 2010, the credit card growth rate at credit unions for the first quarter of 2010 was 7.4%, compared with 6.4% in 2009 and 7.6% in 2008. The growth rate in 2007 was 13.5%. The Experian study also revealed that out of the top metropolitan areas Experian studied, the number of open-ended bank cards was typically greater than retail cards, except for Pittsburgh; Miami; Columbus, Ohio; and Atlanta. New Yorkers have the most open cards, while Phoenix residents have the fewest. The highest average monthly balance is $6,753 on revolving accounts in Atlanta. San Francisco and Houston have the lowest average monthly balances, with $5,323 and $5,328 respectively. Experian also shared some tips for using credit wisely:
* When you are extended a line of credit, use it, carefully and make payments on time; * Set up a budget and stick to it; * Shop around for credit. Lower interest rates, lower or no annual fees, cheaper service charges and additional benefits such as frequent flier miles or special insurance rates are available; and * Once you sign a credit agreement, you are responsible for it unless the creditor agrees to release you from the agreement.

Cash is catalyst for economic turnaround says speaker

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PLANO, Texas (8/11/10)--Business earnings will guide the U.S. economic recovery, but until corporations begin spending more cash, those earnings lack the momentum to spark a recovery, according to Don Reynolds, founder of 21st Century Forecasting and an encore presenter at Southwest Corporate FCU’s upcoming 33rd annual Economic Forum. The Federal Reserve recently reported that America’s 500 largest nonfinancial corporations have amassed $1.8 trillion in cash on their balance sheets--the highest level in nearly 50 years. Funneling that cash back into new construction, equipment and employees would go a long way toward energizing the economy, he said (eFacts Aug. 3). “According to Standard & Poor’s, these companies have an average of $1 in cash for every $10 in equity value,” Reynolds said. “They have fabulous balance sheets, and yet this cash is sitting in money market funds, because companies are uncertain which direction the country is headed.” Although business confidence is shaky, he said he believes that “over the long term, business earnings eventually will take the economy where it needs to go.” Reynolds projects that economic recovery is still five years away. He does not, however, subscribe to the belief that inflation is just around the corner (LoneStar Leaguer Aug. 9). “I don’t buy it,” he said. “Flight to quality will continue to keep downward pressure on interest rates. The giant question right now is whether deflation is coming.” Although inflation is not in his short-term forecast, he predicts an increase in energy prices as a result of growing demand. “In India, oil consumption averages two barrels per person per day. In China, oil consumption averages 0.2 barrels per person per day. Americans, on the other hand, consume an average of 25 barrels of oil per person, per day.” Reynolds identified three other questions that could impact the speed of the U.S. economic recovery. They are:
* Is China headed for an economic downturn? * Is the euro national debt crisis that began in Greece going to snowball? and * What happens when the Obama administration’s stimulus package ends?
Reynolds’ research firm concentrates on long-term global, economic, demographic and technological trends, and he is often described as a “real world economist.” He has worked for three of the nation’s largest brokerage firms, served 11 years as chairman of the investment advisory board at a $22 billion trust fund, taught at the university level for 10 years, and served on a university board of regents. Southwest Corporate FCU’s 33rd annual Economic Forum will be held Oct. 26-27 in Frisco, Texas.

LSCU plans webinarworkshop on CUs oil spill response

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TALLAHASSEE, Fla. (8/11/10)--A workshop/webinar on the "Credit Union Response to the Gulf Oil Spill" is planned for Aug. 30, according to the League of Southeastern Credit Unions (LSCU). The event will be at 1 p.m. to 4 p.m. CT at Pen Air FCU, Pensacola, Fla., and will be available with a phone-in option. "The effects of the British Petroleum (BP) oil spill in the Gulf of Mexico will be felt for years to come," said Mike Bridges, LSCU's vice president of communications. "As Labor Day approaches, the main tourist season for the Gulf Coast ends, and small businesses will need help as they try to stay afloat until industries and tourism return to the area." Credit unions have an opportunity to make small-business loans to many of the Gulf Coast businesses and serve as a resource for them as they work with BP to file claims, said the league. Bridges says the workshop/webinar stems from a meeting last month with National Credit Union Administration (NCUA) Region III Director Herb Yolles and his staff. The group discussed the devastation along the Gulf Coast and the need for flexibility in lending to those hardest hit in the area. The league is working to have regulators from Alabama, Florida and NCUA take part. The workshop will address ways credit unions can serve as resources for small businesses, best practices, and what credit unions are hearing from their members. The event will be open to all credit unions.

MDDCCUA names pro volunteer of the year

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COLUMBIA, Md. (8/11/10)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) has named its 2010 Professional and Volunteer of the Year. Lois Profili, president/CEO of First Eagle FCU, Owings Mills, was awarded the Professional of the Year Award. Herman Williams Jr., chairman of MECU of Baltimore, was awarded the Volunteer of the Year Award. Profili received her award during the MDDCCUA board meeting Aug. 6 and MECU’s vice chair accepted the award on Williams’ behalf at a conference in June.
Click to view larger image Lois Profili accepts the 2010 Professional of the Year Award presented by Maryland and District of Columbia Credit Union Association (MDDCCUA) President Mike Beall (left) and Miguel Boluda, MDDCCUA chair. (Photos provided by the Maryland and District of Columbia Credit Union Association)
Profili started as a bookkeeper at her credit union. During her tenure as CEO, which began in 2001, the credit union grew to $70 million in assets and more than 10,000 members. Williams became a volunteer in 1990, and chairman in 1992. When he found out the credit union lacked access to cash and ATMs, he changed the culture of the credit union to promote access and social responsibility and encouraged the first U.S.-United Kingdom partnership. During his tenure as chairman, the MECU of Baltimore grew to $1 billion in assets from $325 million and to more than 95,000 members from 52,000.