Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

CU System Archive

CU System

SEC files complaint vs. SandL with CU in Sweden

 Permanent link
NEW YORK (8/14/09)--The Securities and Exchange Commission (SEC) has charged two California residents and two companies--including an unlicensed savings and loan association that is also registered in Sweden as a "sparkassa" or credit union--with operating a Ponzi scheme that netted them $9 million from investors in four states. The SEC charged Bich Quyen Nguyen, 55, of Los Gatos, Calif.; Johnny E. Johnson, address unknown; and their entities, Sun Group and Sun Investment Savings and Loan, with securities fraud related to a multi-level marketing scheme. In the scheme, they promised returns of $35,000 a month on a $4,995 investment, according to a SEC filing May 13 in the U.S. District Court for the Central District of California. The fraud allegedly occurred from at least June 2008 to May 2009. The SEC had previously charged two other entities, Empire Capital Asset Management (ECAM) and Sun Empire, and two individuals--Delilah A.Proctor, 57, Corona, Calif., and Shauntel McCoy, 36, Fontana, Calif.--with participating in the scheme. In the filing, SEC charged they misused investors' funds for their own personal use or sent money to other entities they operated, and failed to pay investors the returns promised. The scheme solicited hundreds of investors in California, Nevada, Texas and Arizona. They offered certificates of deposit with returns as high as 10% to 19.30%. SEC obtained an emergency court order to freeze the assets of the defendants and their companies and halt the scheme, according to a press release.

CU System briefs (08/13/2009)

 Permanent link
* ANCHORAGE, Alaska (8/14/09)--A man approached a teller at an Alaska USA branch Friday, inquiring about the balance in his account. He provided his name, account number and photo ID. Then he handed over a receipt with a note on the back that said he had a gun and demanded money. The robber escaped with $600. Police used the information he provided to nab him Monday. Jarell Paul Arnold, 34, of Anchorage, is in custody on federal bank robbery charges (Associated Press Newswires Aug. 13) … * DUBLIN (8/14/09)--New rules requiring Ireland's credit unions to set aside 10% of their assets as reserves will go into effect Sept. 30. The rule will make it easier for the country's 419 credit unions to pay interest on a dividend (savings). The rule originally was opposed by the Irish League of Credit Unions and another association, who said smaller credit unions would be unable to pay a dividend if they were forced to keep the funds as reserves. The league negotiated more flexible rules, winning an extension for smaller credit unions. They will have five years to reach the 10% reserve ratio (Irish Independent Aug. 13) … * SYDNEY, Australia (8/14/09)--A merger of two South Australia credit unions will create a A$7 billion (US$5.87 billion) asset credit union. Savings & Loan CU and Australian Central CU announced the plan to merge, pending member approval. Members of the credit unions will vote in November on the proposal. Both boards have approved the merger. The two credit unions said there will be redundancies but job losses will be kept to a minimum. They have guaranteed the jobs of all member service staff (Bloomberg.com Aug. 13) …

WOCCU Remittances volume drop will affect pricing

 Permanent link
MADISON, Wis. (8/14/09)--Remittances to Latin American countries are expected to decline this year, making pricing for the services more competitive, according to the World Council of Credit Unions (WOCCU). The Wall Street Journal Wednesday reported that remittances are expected to drop 11%, to $62 billion. WOCCU offers remittance services through IRNet, a remittance service operated by WOCCU Services Group. It is doing its best to adjust to declining remittance volume, according to Saul Wolf, WOCCU remittances manager. “As total volumes drop, pricing is becoming more competitive,” Wolf told News Now. “Today, IRNet’s 1,000-plus credit union members in the U.S. and internationally are increasingly able to deliver the same quality service at lower costs to our members due to the fact our intermediary costs are dropping as well. “This is important because remittances generally fund daily necessities like food and shelter,” he continued. “Thus, lower intermediary costs mean more money for necessities for both remittance senders and receivers, people who need it most.” About 108 U.S. credit unions participate in WOCCU's IRNet. The service sends remittances in eight countries and has sent 157,000 transactions, valued at $86 million, since its inception in 2001, Wolf said. The Wall Street Journal article noted that last year, immigrants averaged 15 money transfers per year. This year, the expected figure is 12. The amount sent in transfers is expected to average $230, down from $241.

Scammers try to horn in on clunkers program

 Permanent link
WASHINGTON (8/14/09)--The Credit Union National Association (CUNA) is warning credit unions to educate their members about scammers seeking to take advantage of the recently renewed Cash for Clunkers program. The Better Business Bureau (BBB) has reported that identity thieves are using the program to skim sensitive information from consumers. The National Highway Traffic Safety Administration, prior to the passage of the Cash for Clunkers legislation earlier this year, reported websites that were soliciting for the names, addresses and Social Security numbers of potential customers, said BBB. Consumers also reportedly have been solicited by companies that offer to help fill out the paperwork needed to receive vouchers to take part in the program. The BBB has informed potential program participants that they do not need to register or receive a voucher to participate in the Cash for Clunkers program. Also, auto dealerships, not individuals, are responsible for filling out any paperwork associated with the program. The program, which gives car buyers up to $4,500 for trading in older, gas-guzzling vehicles for more fuel-efficient cars, was responsible for an estimated 250,000 new car sales in July. The BBB recommends that interested participants consult the official government site for the program, cars.gov, to answer any questions they may have. CUNA has also provided information on the program, entitled "Understand Clunkers Program--Vouchers for Fuel-Friendly Cars", in its Home & Family Finance Resource Center.

Council paper CUs need employees engagement

 Permanent link
MADISON, Wis. (8/14/09)--As the financial services environment continues to become increasingly complex, competitive and crowded, engaged employees are the critical ingredient for credit union success, says a new CUNA Human Resources and Training and Development (HR/TD) Council white paper. “Employee Engagement” presents strategies credit unions can use to engage their employees during the current economic downturn and during an expansion. The paper underscores the need to tap into the discretionary energy that all employees possess, noting that many employees are working up to only part of their potential. Employee surveys indicate that there is a strong desire for management to communicate more, not less, to employees--who are seeking more opportunities to communicate and have a say in the decisions that affect their daily work lives. Credit unions can strengthen employee engagement by developing and nurturing a culture of transparency, says the council’s paper. The paper also explains how to establish a learning environment, use internal or social networks, conduct employee surveys, and looks at important aspects of the supervisor-employee relationship. For more information, use the links.

Irish league pushes for new regulator in report

 Permanent link
DUBLIN (8/14/09)--The Irish League of Credit Unions (ILCU) said credit unions in Northern Ireland could miss out on a generation of members if a recommendation to move Ireland's credit unions under the regulation of the Financial Services Authority (FSA) doesn't move through the legislative process. Currently credit unions in Ireland are regulated by DETI Companies Registry (The Irish News Aug. 12). They hope to move to FSA, like credit unions in Britain, to widen the range of products and services they can offer. British credit unions can offer a range of service including current accounts, Internet and telephone banking, electronic transfer of wages, ATMs, debit cards and bill payments. They also can participate in government savings initiatives, said the article. ILCU Northern Committee member Kevin Helferty said the inability to participate in government savings initiatives puts credit unions at a disadvantage to other financial institutions in the north. The league's comments were made at the launch of its "Investing in our Future" report on current and potential credit union services. It found that one in three people in Northern Ireland were members of a credit union.

Study CUs prices better than Sub-S C-corp banks

 Permanent link
MADISON, Wis. (8/14/09)--Credit unions have better savings and loan rates than Subchapter-S banks and C corporation banks, according to a Filene Research Institute Study.
Click to view larger image Click for larger view
The study, “A Comparison of Bank and Credit Union Pricing: Implications for Tax Benefits of Subchapter S Incorporation,” by Steve Swidler, Auburn University professor, examines the rate differences between banks and credit unions. Swidler found that credit union members benefit both on the deposit and loan side for almost every product category, compared to C corporation and Sub-S banks. Sub-S banks pass on few, if any, tax benefits to customers in the form of better rates. Sub-S banks set rates similar to C coporations. Banks incorporating as Sub-S eliminate federal taxes on corporate level earnings. Sub-S banks are profit-oriented, while credit unions receive a tax benefit to serve the needs of everyday people, the study said.

Filene report 12485 CU mergers from 1971-2008

 Permanent link
MADISON, Wis. (8/14/09)--The pace and types of credit union consolidation will increase over the next several years, according to a recent Filene Research Institute report that examines merger activity.
Click to view larger image Click for larger view
The study, “Characteristics of Credit Union Mergers: 1984-2008,” analyzes a database of credit union mergers from 1984 to the present. Researchers Luis G. Dupico and James A. Wilcox found that about 12,485 credit union mergers took place between 1971 and 2008--which translates to 2.3% of credit unions per year. The number of credit unions peaked at 23,866 in 1969, compared with 8,147 in 2008. During 1984-2008, credit union mergers transferred members and assets from institutions that didn’t perform as well as peer institutions on average. The assets of the target credit unions totaled $37.3 billion during 1984-2008. The report also touches on the influence of events such as the savings and loan crisis, regulatory changes, and the 1980 recession. “Credit union mergers are unlikely to fade away in the foreseeable future,” said Filene Chief Research Officer George Hofheimer. “Competitive, economic and regulatory factors all point toward a more intense external environment.”

Meeting addresses Desjardins model U.S. collaboration

 Permanent link
NEW YORK (8/14/09)--Credit union leaders nationwide gathered in New York City for an event last week that focused on Canada’s Desjardins cooperative credit union model and the potential of further collaboration within the U.S.
Click to view larger image Credit union representatives recently gathered to discuss Canada’s Desjardins credit union model and its applications in the U.S. From left are: Kirk Kordeleski, president/CEO, Bethpage FCU; Tom Dorety, CEO, Suncoast Schools FCU; Paul Gentile, president, New Jersey Credit Union League; Kelly Bloss, senior consultant, Stuart Levine and Associates; Tom Sargent, CEO, First Tech CU; Lucie Bouchard, Desjardins Group; and Stuart Levine, chairman/CEO, Stuart Levine and Associates. (Photo provided by the New Jersey Credit Union League)
The event was hosted by Stuart Levine and Associates, a strategic planning and merger consulting provider. Lucie Bouchard from the Desjardins Group in Montreal and Stuart Levine, chairman/CEO of Levine and Associates, spoke at the event. Paul Gentile, New Jersey Credit Union League president/CEO; Tom Sargent, CEO, First Tech CU, Beaverton, Ore.; Tom Dorety, CEO, Suncoast Schools FCU, Tampa, Fla.; and Kirk Kordeleski, president/CEO of Bethpage (N.Y.) FCU, also attended. The Desjardins model is recognized as more cooperative than the U.S. The discussion centered on understanding the Desjardins model to increase member value and reduce costs to individual credit unions and leagues in the U.S. The group also discussed standardization, which is a key component of the Desjardins model. In Canada, members can visit any credit union and be treated as they would at their hometown credit union--similar to the shared-branching concept in the U.S. Canada, however, takes this a step further through standardized products with standard pricing, Bouchard said. The current financial crisis will drive consolidation, Bouchard added. Attendees agreed that the current global crisis should and will facilitate the merger of credit unions that will succeed in the economic climate. In order to fully represent each credit union, its members and board, an independent arbitrator can facilitate the merger process to ensure that the strengths of each credit union are evaluated to formulate a new credit union that represents the best for both organizations, Levine said. He also stressed the importance of collecting data and conducting criteria-based performance evaluations of the board of directors, which is not punitive, to determine board effectiveness.

Better Choice has saved consumers 6.7 million

 Permanent link
HARRISBURG, Pa. (8/14/09)--Credit unions have issued more than 20,000 loans, for a total of $9.3 million since the Credit Union Better Choice payday loan alternative program began in 2006. By using the credit union option instead of payday lenders, consumers saved $6.7 million in the process. Since the program began, 82 credit unions with 215 locations have offered the program, with additional participants continuing to sign on, the Pennsylvania Credit Union Association (PCUA) announced Thursday. During the first six months of 2009, the program loaned 5,291 loans totaling $2.5 million, PCUA said. Pennsylvania consumers saved an average 80 cents in loan fees and costs for every dollar borrowed through the program. In addition to the $6.7 million saved from fees, borrowers placed $937,281 into savings accounts for future needs. "When consumers are in need of cash, credit unions have stepped in to fill this void with affordable short-term loans," said Jim McCormack, PCUA president/CEO. He noted the credit unions are offering financial coaching to borrowers to help them budget and manage money. The program is a partnership between PCUA and the Pennsylvania Treasury Department. It will be the topic of the next "Pennsylvania Newsmakers" program airing across the state. Keith Welks, deputy state treasurer, and Mike Wishnow, PCUA senior vice president of communications and marketing, are featured explaining the results of the Credit Union Better Choice program and how it has helped state employees who faced payless paydays last month during the state's budget impasse.

Four CUs win tech council Best Practices awards

 Permanent link
MADISON, Wis. (8/14/09)--Winners of the 2009 CUNA Technology Council Best Practices Awards included Tinker FCU, State Employees CU, Nassau Financial FCU and Envision CU. The awards were presented at the Council’s 14th Annual Summit, Aug. 5-8 in San Francisco.
Click to view larger image Team members at Nassau Financial FCU responsible for winning the Sales Management/Marketing Automation Award during CUNA Technology Council Best Practices Awards at the council’s 14th Annual Summit, Aug. 5-8 in San Francisco, are, from left, Frank Cordano, CEO; Lisa Peterson, information technology manager; Eileen Friel, marketing central information file systems consultant; and Regina Esernio, marketing manager. (Photo provided by CUNA Technology Council)
The CUNA Technology Council award recognizes outstanding approaches to technology challenges with potential for universal application throughout the credit union movement in four major categories. The categories and winners are:
* Technology Infrastructure--Tinker FCU, Tinker AFB, Okla., for the virtualization and storage area networking of its core processing system; * Information Security/Privacy--State Employees CU, Raleigh, N.C., for its member photo ID program; * Sales Management/Marketing Automation--Nassau Financial FCU, Westbury, N.Y., for its in-house marketing central information file and core-processing solution to determine household identity/member segmentation; and * Miscellaneous--Envision CU, Tallahassee, Fla., for using technologies which resulted in increased efficiencies, including a centralized data-conversion utility interface for its “legacy” data processing system; an automated and more streamlined coin and currency ordering process; and a new tool for trend analysis and account research in general ledger accounts.
Winners were selected, based on strategy, process, application and results, without regard to credit union asset size. The council also awarded three honorable mentions in these categories:
* Technology Infrastructure--Forum CU in Indianapolis, Ind., for its interactive intelligence program, and Technology CU, San Jose, Calif., for a new online banking administrative tool; and * Sales Management/ Marketing Automation--Beehive FCU, Rexburg, Idaho, for its in-branch video display software switching system.
For more information, use the link.