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In the media CUs nonprofits bridge biz-loan credit gap

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RALEIGH, N. C. (8/14/12)--In North Carolina, nonprofit organizations associated with not-for-profit credit unions bridge the gap when small businesses need funds and can't get credit through traditional routes.

For example, Jackie Green, who started a Raleigh-area bakery in her home in 2009 could not find the capital to upgrade the cooking equipment in her kitchen, according to The News & Observer (Aug. 12).  Green was told she needed $30,000 worth of collateral and A-plus credit.

Green ended up at The Support Center, a community development financial institution (CDFI) that operates through Generations Community CU in Durham. It offers loan programs to businesses that  can't access capital through traditional means. Green received a $40,000 loan from the program. Two years later, she received a second $160,000 loan through its small business lending program, which financed the opening of her store in Apex. She expects to hire several employees to meet a growing demand.

Durham-based Self-Help is a nonprofit that works with Self-Help CU.  Self-Help refers clients needing microloans--loans for $50,000 or under-- to The Support Group when they don't fit the credit union's lending profile.

Banks have significantly tightened their credit parameters and are willing to lend to only very well-qualified borrowers, the article noted, adding that microloans are particularly problematic.

Although CDFIs can take more risk than traditional lenders, Self-Help says it does not rubber stamp loans for just anyone. But the CDFI will "dig deeper and listen to the [applicant's] story."

For the full article, use the link.

Free checking at 72 of large CUs 45 of banks

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NEW YORK (8/14/12)--Chalk up another one for credit unions in the fees arena. Roughly 72% of America's 50 largest credit unions offer free checking accounts without a minimum balance requirement, according to Bankrate.com's 2012 Credit Union Checking Survey. That compares with 45% of banks.

The 72% is down slightly, from 76% last year. An additional 10% of credit unions surveyed will waive monthly fees if account holders maintain a minimum balance ranging from $100 to $750, noted the survey, which was released Monday. Bankrate is a publisher, aggregator and distributor of personal finance content on the Internet.

"Only 45% of banks offer checking without a minimum," said the study, adding, "and their minimum balance requirements tend to be much higher--$585 for noninterest bearing accounts and a staggering $5,587 for interest checking accounts."

"Overall, 98% of the credit union checking accounts that we surveyed are either free or can become free if the accountholder meets minimum balance, direct deposit and/or e-statement requirements," said Greg McBride, Bankrate.com senior financial analyst. "So credit unions remain a viable, consumer-friendly alternative for finding a free checking account."

Most (68%) credit union checking accounts in the survey do not pay interest, Bankrate noted. Those that do yield an average of 0.12%, down from 0.17% last year, which is consistent with the ongoing declines seen in cash investments, the publisher said.

Other fees noted in the survey:

  • Credit unions consistently charge less in overdraft fees for nonsufficient funds. The average cost of the first overdraft at credit unions is up slightly, to $26.65 from last year's $26.05, compared to $30.83 at banks. The most common fees assessed at credit unions are $25 and $30, compared to the most common fee of $35 at banks.
  • Thirty percent of credit unions surveyed have either no ATM fees outside the network or provide at least one free withdrawal per week before the fee kicks in. That compares to 29% at banks.
  • Ninety-six percent of credit unions will charge a non-member for using their ATM. This year's average surcharge is $2.08, down from $2.10 last year. At bank-owned ATMs, the average surcharge is $2.40.  Credit unions' most common surcharge is $2, compared with $3 at banks.

Mahon named CEO of National Federation of CDCUs

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NEW YORK, N.Y. (8/14/12)--Cathie Mahon has been named the new CEO of the National Federation of Community Development Credit Unions (CDCUs).

Mahon previously served as the deputy commissioner for financial empowerment with the New York City Department for Consumer Affairs.

During her tenure there, she established a network of Financial Empowerment Centers providing free one-on-one financial counseling to New Yorkers in need.  She launched SAVE USA, an innovative asset building program.  Her office connected thousands of New Yorkers to safe and affordable banking products, and helped to build a national movement of municipal financial empowerment with leaders throughout the country.

Mahon, who previously served as the policy and program director for the federation, will assume the role of CEO effective Oct. 1.

"Cathie is a very talented, committed professional who brings the experience needed to build on the solid foundation that we have built together at the federation" said Lynda Milton, federation board chair. "She brings with her excitement and commitment for the community development credit unions we serve, and has fresh ideas on how we can continue to build on the great history and accomplishments of this organization," Milton added.

"I have seen first-hand the benefits of connecting people to safe and affordable products and services from working with my previous organization," said Mahon. "Credit unions provide real alternatives to predatory lenders and fringe service providers.  I look forward to working with the national federation to expand on the successes we have seen in communities across the country."

The federation is an organization dedicated to helping low- and moderate-income people and communities achieve financial independence through credit unions.

IWash. PostI Biz loans scarce CUs an alternative

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WASHINGTON (8/14/12)--Small-business loans have been hard to obtain from traditional banks since the credit crisis started three-and-a-half years ago, but credit unions are among the alternatives for financing, according to an Aug. 1 article in The Washington Post.

About nine out of 10 small-business loan applications are typically rejected at large banks, according to Biz2Credit. Also, the total number of bank loans to small businesses has declined 17% since September 2011, according to research at Pepperdine University.

The main reason big banks aren't lending is because they haven't completely bounced back from the 2008 financial crisis, and many were saved from closure by the Troubled Asset Relief Program, the Post said. Several of those banks still have exposure to troubled U.S. mortgages, and high-risk investments in Europe, preventing them from accepting new lending risks, the Post added. 

Credit unions and Small Business Administration (SBA) loans were listed by the Post as the first alternative for small businesses turned down by large banks. Credit union loan approvals have slightly risen, compared with those of their banking counterparts, the Post said, citing BizRate.com

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.

To read the article, use the link.

CU Miracle Day to receive Wegner Award

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MADISON, Wis. (8/14/12)--Credit Union Miracle Day (CUMD) is the winner of the 2013 Herb Wegner Memorial Award for Outstanding Program, the National Credit Union Foundation (NCUF) announced Monday.

Through its races benefiting Children's Miracle Network Hospitals, CUMD has made a significant impact in the credit union industry, NCUF said. The award was made in recognition of those efforts in raising national awareness of credit unions, local community partnerships and fundraising. 

Credit Union Miracle Day board members, sponsor officials and Children's Miracle Network Hospitals present a donation check at the start line of the Credit Union Cherry Blossom Ten Mile Run in Washington, D.C. (Photo provided by the National Credit Union Foundation)
This will be one of three Herb Wegner Memorial Awards presented at a special dinner hosted by NCUF in Washington, D.C., on Feb.  25, during the Credit Union National Association's 2013 Governmental Affairs Conference. Online registration for dinner tickets will be available later this year on the NCUF website.

"Credit Union Miracle Day is one of those rare and special events that seems to have grown into a level of influence and prominence in such as small amount of time that is hard to comprehend its entirety," said NCUF Awards and Recognition Committee Chairman Bob Schumacher. "It encompasses not only raising funds for a worthy cause, but also has an impact on credit union advocacy that is almost unmatched in its power. It is certainly a Wegner winner."

"It's been a tremendous team effort, which entails countless volunteer hours from our board and committee members, but it is all worth it for the children, the credit unions and the community," said CUMD Chairman Juri Valdov.

CUMD is the largest national credit union event for Credit Unions for Kids, a nonprofit collaboration of credit union organizations that raise funds to benefit Children's Miracle Network Hospitals. CUMD started with the 2002 credit union sponsorship of its now flagship event, the Credit Union Cherry Blossom Ten Mile Run in Washington, D.C.

Last year, CUMD added the new Credit Union SacTown Ten-Mile Run in Sacramento, Calif., and two Freedom Runs for American troops overseas, including one at Camp Arifjan, Kuwait, and one at Wiesbaden Army Garrison, Germany, all held on or around the same day.

To date, CUMD has generated more than $5.5 million for 136 Children's Miracle Network Hospitals nationwide.

CUMD also conducts a special event at the Children's National Medical Center in Washington, D.C. Credit union leaders join with hospital personnel and patients to highlight the successes of children's hospitals. A similar event is hosted in California. CUMD also has inspired communities throughout the nation to create their own events. One example of this is a statewide walk in Ohio that supports Credit Unions for Kids.

Aside from the visibility on Capitol Hill, CUMD helps bring national awareness of credit unions to consumers in many ways. "CUMD has brought awareness to consumers that credit unions are an alternative financial institution," said Tom Dorety, president/CEO of Suncoast Schools FCU in Tampa, Fla.

Each year, the website, promotional material and signage for the races prominently note the credit union connection. Media exposure extends beyond Capitol Hill publications and there is live video streaming. The races are covered by national media.

The Credit Union Cherry Blossom Ten Mile Run and Credit Union SacTown Ten-Mile Run attracted 93 credit unions, 56 business partner organizations, 16‚000 runners and more than 700 volunteers who are credit union members nationwide in support for children. Credit unions from 13 states participated in this year's race activities, helping the race become more than a regional event. It is also estimated that about half of the runners are credit union members.

CU System briefs (08/13/2012)

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  • ST. LOUIS, Mo. (8/14/12)--A former employee of the St. Louis (Mo.) Community CU has been indicted by a federal grand jury in the embezzlement of nearly $105,000 from the credit union. Jamie Askew of Troy, Ill., is charged with one felony count of embezzlement from a credit union. The charge carries a maximum sentence of 30 years in prison. The thefts occurred between July 2009 and May 2012, said the Department of Justice (Department of Justice Documents, Federal Information and News Dispatch Aug. 9) …
  • LINCOLN, Neb.(8/14/12)--The Nebraska Credit Union League hosted a meet and greet for Nebraska credit unions with State Sen. Deb Fischer, who is running for a seat being vacated by U.S. Sen. Ben Nelson. Fischer, pictured in the middle with credit union representatives, discussed the importance of shrinking the federal government, including regulations that stifle business and job growth. She expressed appreciation to credit unions for their support. Credit unions attending told her about the need for Congress to lessen the regulatory burden that credit unions face and urged increasing credit unions' member business lending cap so more capital can be made available to small businesses. Fischer will face former U.S. Sen. Bob Kerrey in the November election. "This was a great opportunity for our credit union professionals and volunteers to meet with State Sen. Fischer to discuss her legislative priorities as well as those of credit unions," said Scott Sullivan, league president. (Photo provided by the Nebraska Credit Union League) …
  • HARRISBURG, Pa. (8/14/12)--eaders from several Western Pennsylvania credit unions met with the 12th congressional Republican candidate, Keith Rothfus, at Clearview FCU to educate him about credit unions, said the Pennsylvania Credit Union Association (PCUA)(Life is a Highway Aug. 13). They discussed regulatory and legislative concerns, including credit unions' tax-exempt status, raising the member business lending cap, implications of the Dodd-Frank Act on credit unions, and healthcare. Rothfus will face U.S. Rep. Mark Critz in November. Rothfus, right center, posed with Clearview FCU President/CEO Mark Brennan, a member of PCUA's Governmental Affairs Committee, fourth from right, and other attendees, including Maria LaVelle, PCUA Board Vice Chairman and GAC Chairman; Dave Ackerman, president/CEO of U$X FCU; Ray Brunner, PCUA board member; and Joe Marzullo, Washington Area Teachers FCU. (Photo provided by the Pennsylvania Credit Union Association) …
  • PLANO, Texas (8/14/12)--Catalyst Corporate FCU announced that Steven Stapp, president/CEO of San Francisco FCU, has been added to its Asset Liability Committee (ALCO). His appointment--as well as the recent appointment to Catalyst's board of Trevor Tokishi and Bill Before--means former members of the Western Bridge Corporate have representation within Catalyst's governance structure.  Tokishi is executive vice president of Valley Isle Community FCU, Kahului, Hawaii, and before is vice president/chief financial officer of Spokane (Wash.) Stapp will be joining ALCO Chairman Rick Hein, president/CEO of OSU FCU ...
  • HARRISBURG, Pa.(8/14/12)--Alfred A. Panfile, former member of the board of directors at Pottstown, Pa.-based Diamond CU, died Aug. 8.  He was 87, according to the Pennsylvania Credit Union Association (Life is a Highway Aug. 13).  Panfile served on the $380 million asset credit union's board from 1976 to 2006, and had been an active member since its founding in 1947. In 2004, Panfile was honored by the credit union as the namesake of its annual scholarship program.  He is survived by his wife, four children, seven grandchildren and eight great-grandchildren.

Michigan leads nation in classroom presentations

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LANSING, Mich. (8/14/12)--Michigan credit unions led the U.S. in the past year for youth financial education classroom presentations.

Dollar Dog visits a Wilson Elementary School in Alpena, Mich., for a financial education presentation by Alpena Alcona Area CU.

For the period ending June 30, Michigan credit union representatives made 2,001 classroom presentations, up 4.5% from the last year. Texas came in second with 1,979 presentations, according to the National Youth Involvement Board's (NYIB) annual report (Michigan Monitor Aug. 13).  

Michigan credit unions also increased the number of students reached by more than 2%, with 46,973 students reported. The total fell in second place nationwide, behind North Carolina, which reached 55,604 students.

Financial education presentations in schools are an important way for credit unions to serve the community, said one credit union presenter.

"Financial education is one of the most appropriate ways to fulfill our mission and enhance the financial well-being of our members," said Kaye Chervenak, parish and education coordinator for Michigan Catholic CU in Troy. "We want to work with parents, teachers, and the community at large to help our youth succeed by giving them the tools and education for responsible money management."

Nationwide, 413,106 students learned money management skills and heard the credit union message at 13,008 presentations for the year. While Michigan's reported youth financial education involvement activity increased slightly, the national figures represent a decrease from the last reporting year.

Fremont (Mich.) High School Students ask questions of CEO John Buckley at Fremont-based Gerber FCU, left, and Michigan State Sen. Geoff Hansen, (R-Hart), center.  (Photos provided by the Michigan Credit Union League)
The NYIB also recognized Michigan's Julie Blaylock from Community Financial CU in Plymouth, with an award for the highest percentage increase in students reached, up 412% since the last reporting year.

The top 10 states based on the number of presentations given, according to NYIB,  are:

1. Michigan--2,001;

2. Texas--1,979;

3. North Carolina--920;

4. Oregon--736;

5. Arizona--735;

6. California--693;

7. Florida--633;

8. Washington--617;

9. Montana--594; and

10. Virginia--537.

The top 10 states based on students reached:

1. North Carolina--55,604;

2. Michigan--46,973;

3. Virginia--30,589;

4. Texas--28,166;

5. Florida--25,900;

6. California--24,829;

7. Arizona--23,720;

8. Pennsylvania--17,632;

9. South Carolina--15,463; and

10. Oklahoma--13,894.

Members regulators OK merger of two Indiana CUs

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FORT WAYNE, Ind. (8/14/12)--Fort Financial CU, Fort Wayne, Ind., and Financial Members FCU, Auburn, Ind., said Friday they have received regulatory and membership approval to merge.

Fort Financial CU, formerly Dana FCU, has about $180 million in assets, and serves more than 40,000 members with 11 branches. Financial Members FCU has about $4 million in assets.

Fort Financial CU will be the continuing credit union (Journal Gazette Aug. 10).

Financial Members FCU will close its location in Auburn. All employees from that branch will be relocated to the Fort Financial Auburn branch.

A difficult economy, increased regulatory burdens and the need to expand services were among the reasons for the merger, according to Steve Collins, Fort Financial CU CEO.

Michigan Firsts social media strategy featured

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LATHRUP VILLAGE, Mich. (8/14/12)--Michigan First CU's social media strategy was highlighted in an interview with Linda Douglas, vice president of marketing, by The Financial Brand, a website dedicated to  ideas in financial services marketing.

Michigan First, with $623 million in assets, Lathrup Village, Mich., uses every major social media platform, Douglas said. The credit union is active on Facebook and Twitter. It uses YouTube as its primary video platform and uploads photos to Flickr for sharing.

The credit union initiated its social media strategy in April 2009 in tandem with its enhanced online banking service, Douglas told the publication. The new banking product included personal financial management capabilities and social media, including Twitter and Facebook, were employed to publicize the roll out.

Day-to-day management of social media was handled in partnership a public relations agency. Michigan First CU's marketing staff developed a social media calendar and provided content. The agency provided ongoing monitoring and third-party content.

In May, Michigan First hired Janelle O'Hara, its first full-time employee dedicated to social media. O'Hara previously served as the credit union's Young & Free spokesperson, a role in which she created content, attended events on behalf of Michigan First, and built up the credit union's following among Gen Y.

Now, O'Hara manages Michigan First's social media content and multimedia daily. She also produces video content and works with the credit unions public relations agency.

O'Hara has helped Michigan First achieve what Douglas calls the credit union's greatest accomplishment in social media: 24 x 7 monitoring and diligence in responding to members. "We ensure that each post is acknowledged as quickly as possible, and dig in to identify members posting anonymously using a variety of tools," Douglas told The Financial Brand. "With regular follow-up both in social media and offline, we've been able to turn perceived problems into positive customer service experiences."

One of those problems developed when the credit union unintentionally offended some older and more conservative members with videos that were intended to attract Gen Y members, Douglas told The Financial Brand. The credit union has since moderated the videos and taken a more targeted approach to any youth-oriented videos, Douglas said.

In the interview with The Financial Brand, Douglas said Facebook is the most important social media vehicle in use today. "Facebook has reached critical mass and is such an integrated part of our members' lives," Douglass said. "With Facebook, we are able to enter more involved conversations with members and directly share multimedia content that paints a more complete picture of who Michigan First is."

To read the full interview, use the link.

Survey Smartphone users report more tech problems

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MADISON, Wis. (8/14/12)--As more credit unions introduce mobile banking, they may become entangled within the technical problems smartphone users are experiencing with their phones.

Smartphone owners--who compose about half of cell phone owners--experienced a higher frequency of tech problems than those with "simple feature" phones, according to a survey conducted by the Internet and American Life Project of the Pew Research Center in April.

About 88% of American adults have cell phones, the survey found.

Of those surveyed, about 35% of smartphone users struggled with dropped calls at least weekly, compared with 28% for other cell phone owners.

Roughly 79% of cell phone owners said they use text messaging. About 29% of smartphone owners received unwanted texts or spam messages at least weekly, compared with 20% of other cell phone users.

Some 55% of cell phone owners say they use their phones to go online--to browse the Internet, exchange e-mails, or download apps. Roughly 49% of smartphone users experienced slow download speeds, compared with 31% of other cell phone users.

Despite the technology challenges, credit unions nationwide are reporting success with mobile banking.

More than 1,000 member of $2.3 billion Virginia CU, Richmond, Va., made a deposit using a smartphone in July--the largest number of mobile depositors since the credit union began offering the service in April.

Since rolling out mobile banking to its full membership in May, $2.1 billion Coastal FCU, Raleigh, N.C., has enlisted 8,900 members for its service, according to the Detroit News (Aug. 6).

State Employees' CU, also located in Raleigh, with $25 billion in assets, has offered mobile banking since 2008, according to the Detroit News. More than 150,000 of the credit union's 1.8 million members use the service, a 52% increase from a year ago.

Credit unions also are adding more features and capabilities to their mobile banking service lines.

American Airlines FCU, with $5.5 billion in assets, Fort Worth, Texas, updated its CUAcce$$ Mobile smartphone apps to include a check deposit feature. The new feature allows members with camera-enabled mobile devices to take photos of the front and back of their checks to make remote deposits.

McGraw-Hill FCU launched a mobile banking iPad app. The $293 million asset East Windsor, N.J. credit union is among the roughly 4% of credit unions nationally to implement a tablet application.

Its mobile banking suite is also accessible through iPhone and Android smartphones. About 40% of the credit union's membership use smartphone mobile banking.