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CU System briefs (08/14/2012)

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  • DUBLIN, Ohio (8/15/12)--Republican congressional candidate Brad Wenstrup was welcomed to Atomic CU in Piketon, Ohio, earlier this month by Atomic CEO Tom Griffiths and Chief Legal Officer Aaron Michael, said the Ohio Credit Union League (eLumination Newsletter Aug. 8)l. Wenstrup is runny for Ohio's 2nd Congressional District after defeating incumbent Rep. Jean Schmidt (R-Loveland) in the state's primary.  Accompanying Wenstrup was state Rep. Cliff Rosenberger (R-Clarkesville) and former U.S. Rep Bob McEwen (R-Ohio). Wenstrup toured the credit union, met with employees and discussed the need for economic growth and development, and the importance of small businesses. Griffiths told about Atomic CU's member business lending program and restrictions credit unions face and explained how lifting the restrictions could increase business lending and jobs in Ohio at no cost to the taxpayers. Ohio league General Counsel John Kozlowski said it is important to invite elected officials to credit unions to show how credit unions serve people, businesses and the local community that make up the politician's constituents.  "It's critical that credit unions develop these relationships and tell elected officials, day in and day out, how the credit union is making a difference for their constituents …
  • DUBLIN, Ohio (8/15/12)--Ohio Credit Union League General Counsel John Kozlowski attended a roundtable earlier this month organized by U.S. Sen. Sherrod Brown (D-Ohio) to discuss helping responsible homeowners refinance their mortgages at lower rates (eLumination Newsletter, Aug. 8). Fifteen representatives from community groups, financial services and mortgage providers, as well as state, federal and local public officials, were invited to join Brown and Secretary of the U.S. Department of Housing and Urban Development Shaun Donovan at the event. Discussion centered on legislation backed by the Obama administration. That included expanding the Home Affordable Refinance Program (HARP), which would provide refinancing opportunities for families who have been paying their mortgage on time; offering simple, low-cost refinancing for borrowers whose loans are not guaranteed by the government; and helping borrowers with underwater mortgages by paying closing costs for those who choose to rebuild equity in their homes more quickly through a shorter-term loan.  The league and the Credit Union National Association are reviewing the legislation and will continue working with Brown as the bills move through Congress, ensuring that credit union interests are protected, the league said …
  • BISMARCK, N.D. (8/15/12)--The Credit Union Association of the Dakotas (CUAD) has awarded 10 Dakotas' Credit Unions High School Financial Scholarships totaling $500 each to students in North Dakota and South Dakota. All recipients plan to use their scholarship to pursue degrees in higher education. The scholarship is designed for high school seniors who are credit union members. A five-judge panel selected the winners based on essays written by the students on two topics: "How, through your involvement in the community/school activities, events or volunteer efforts have you shown the cooperative spirit?" or "What can your credit union do to continue providing you with financial solutions for a lifetime?" Five of the winners were from North Dakota and are members of Capital CU, Community CU, Dakota Plains CU, Minot Area Schools FCU and North Star Community CU. The five South Dakota winners are members of Consolidated Hub-CO FCU, Dakotaland FCU (two recipients), M-O FCU and Palace City FCU … 

Wisconsin league attacks misinformation on subsidy

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PEWAUKEE, Wis. (8/15/12)--Wisconsin credit unions' strong financial results at mid-year represents consumer savings, not "subsidy," said the Wisconsin Credit Union League, responding to misinformation from banks after the state regulator released its assessment of state-chartered credit unions' financial results.

"The broken record repeats," said league President/CEO Brett A. Thompson. "Every chance it gets, the [Wisconsin Bankers Association] WBA repeats misinformation in hopes that repetition will change the law and the facts. But their comments are no more accurate today than they were the last time, or the time before that, or the time before that," he said.

WBA has mischaracterized credit unions' net income as a tax "subsidy" and said credit unions' mission is to serve only those of modest means. The intentional mischaracterization is no accident, said the league.

The league reiterated two points:

  • Credit unions return earnings to depositors, not shareholders in the form of lower loan rates, higher savings rates and fewer fees. In 2011, they saved 2.2 million members $203 million and they save Wisconsin bank customers $66 million each year because of the competition that helps to keep bank fees and rates in line. 
  • All credit unions exist to benefit depositors. "Under Wisconsin law, the mission of every credit union is to 'encourage thrift among its members, create a source of fair credit at a fair and reasonable cost, and provide an opportunity for its members to improve their economic and social conditions," said the league.  Instead of limiting by income who credit unions can serve--as WBA suggests--state law requires credit unions to serve all members regardless of income, the league said. "Credit unions' growth is the result of all credit unions putting people before profits; it's a consequence of consumers using a locally owned, democratically controlled co-op to further their own financial interests instead of the narrow corporate interests of a few."
Thompson also criticized banks' role in the financial crisis and "relentless fee increases" that have "led consumers to pay closer attention to who realizes the perks of their patronage and where profits go.

"Consumers have realized that they themselves benefit when earnings from their financial institutions are returned to them rather than going into the wallets of just a few. That's why the increase in net revenues of credit unions so far this year is nothing but good news for Wisconsinites," he concluded.

CUs getting global notice from rates study

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MADISON, Wis. (8/15/12)--Credit unions have received positive press in national and international media as a result of statistics released this week from Bankrate's 2012 Credit Union Checking Survey. The study noted that 72% of credit unions currently offer free checking, compared with 45% of banks.  Credit unions appeared in Forbes, Fox Business.com, Huffington Post, The Chicago Tribune, HLNTV, and more.

Some of the coverage is coupled with separate surveyt conducted by Money Rate, which reported that bank fees are rising. (See related News Now article: "Bank fees survey--Fees are rising" in today's issue).

The credit union study,  originally featured on Bankrate.com Monday,  made its way Monday and Tuesday to FoxBusiness.com; nationwide HLNTV.com, a CNN affiliate; CBS affiliate WTVR in Richmond, Va.; The Chicago Tribune; Washington Business Journal; Forbes; Huffington Post; Bank Credit News; Loansafe.com, a Better Business Bureau blog, and NBC33TV.com in Baton Rouge, La. Internationally, the story was featured on Yahoo! Singapore Finance, International Business Times in the United Kingdom, and India Investment News.

In a report Tuesday by CNN Money anchor Poppy Harlow on WTOP, a Washington, D.C., area news talk show, Harlow gave advice to consumers to consider looking at credit unions and smaller online banks to escape banks' fees.

Fox Business.com, in its article headlined "Credit unions cling to free checking accounts," wrote as its lead:  "If free checking is in decline, someone forgot to tell credit unions." It reiterated the Bankrate survey's results and noted that "banks are a different story."  "If you're on the lookout for a free checking account, then credit unions remain a viable alternative to fee-laden or high-balance-requirement checking accounts that are becoming more common in the banking community," said Greg McBride, senior financial analyst for Bankrate.com, in the article.

Aite Group LLC in Boston noted that credit unions might be missing fee income by sticking with free checking. Ron Shevlin, a senior analyst at Aite Group, noted in the Fox Business article that credit unions are looking at free checking as "competitive differentiation. They're saying, 'Hey, if these big guys are going to get rid of their free checking, we're going to keep our free checking account as a way of being able to say we're different.'"

HLNTV.com, in its article, "Want free checking? Find a credit union!" reported on the survey and instructed consumers interested in learning more about credit unions to "check out the Credit Union National Association." The article linked to CUNA's website.

Texas Trust CU purchases office park

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MANSFIELD, Texas (8/15/12)--Texas Trust CU in Mansfield, Texas, has begun the next phase of its growth strategy with the purchase of an office park, according to the Texas Credit Union League.

The $721 million asset credit union purchased two buildings in Arlington to serve as its new corporate headquarters and as a long-term financial investment (LoneStar Leaguer Aug. 14).

The office park consists of 78,660 square feet of office space, with a 66% occupancy level. Texas Trust initially will occupy a small footprint, with plans to occupy 50% or more of the total space within the next three to five years.

The new headquarters facility is part of Texas Trust's strategic plan. By 2016, the credit union plans to nearly double its membership to 100,000 from 58,000 and become a $1 billion credit union.

"The new facility gives us room to grow, which means we will be able to add employees and new services and products, so that we can better serve our current members and grow our membership," Jim Minge, Texas Trust president/CEO, told the league.

Texas Trust will move several corporate functions such as marketing to the new space within the next 90 days. The rest of the corporate staff will move in phases, starting in 2013.

Texas Trust also is expanding its full-service branches this year. In March, it opened its ninth branch in Grand Prairie. Its 10th branch, in Mansfield, will open at the end of September.

N.Y. foundation FEST highlights NEFE update

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ALBANY, N.Y. (8/15/12)--The New York Credit Union Foundation, in collaboration with Cornell Cooperative Extension, last week hosted Financial Education Summer Training, featuring an introduction to the updated National Endowment for Financial Education (NEFE) High School Financial Planning Program (HSFPP).

Barbara Henza, community educator with Cornell Cooperative Extension, presented recent updates to the National Endowment for Financial Education's High School Financial Planning Program at the New York Credit Union Foundation's Financial Education Summer Training last week. (Photo provided by the New York Credit Union Foundation).
The training, held at the Credit Union Association of New York's offices in Albany, N.Y., attracted nearly 50 participants from 19 credit unions and 13 school organizations.

NEFE HSFPP, a non-commercial, personal financial curriculum for high school students, was recently updated.

"A key goal is to provide youth and adults with the financial skills necessary for a sound financial future, said NEFE presenter Barbara Henza, community educator with Cornell Cooperative Extension.

Keynote speaker Colin Ryan, a comedian, national speaker, author and creator of the Association of Vermont Credit Unions' financial literacy program, Economy of Me, discussed presenting to high schoolers using pop culture and comedy to create engaging, entertaining and memorable conversations about money.

Laura Rog, director of training and technical assistance at generationOn, a global youth service movement, spoke about the importance of teaching philanthropy and community responsibility to youth.

Jody Carpenter, vice president of marketing and business development at UFirst FCU, Plattsburgh, N.Y., and Neil Folnsbee, youth program coordinator at Corning (N.Y.) FCU, closed out the program by sharing their experiences with reality-based teaching in classrooms.

Debit card promo alters Belvoir members spending

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WOODBRIDGE, Va. (8/15/12)--Woodbridge, Va.-based Belvoir FCU used a two-month promotion to change members' purchasing habits while giving the credit union's debit card front-of-wallet status.

"SwipeStakes" encouraged members to swipe their Belvoir FCU debit card on purchases of $5 or more and select credit/sign for their transactions. By completing routine tasks, members would automatically be entered to win an iPad, iPod, or $100 iTunes gift card in June and July. Members also were permitted unlimited entries, since each qualifying swipe counted as one entry.

After the two-month campaign ended, the credit union saw, on average, a 7% lift in overall transactions and a 10% increase in signature-based transactions, including a 9% bump in signature-based transactions over $5. There also was a 3% boost in debit cards with at least one transaction, the credit union said.

Minnesota CUs host Ecuador visitors

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ST. PAUL, Minn. (8/15/12)--A group from one of the largest credit unions in South America--Ecuador's Cooperativa COOPROGRESO--visited four Minnesota credit unions as part of an exchange program organized by the World Council of Credit Unions (WOCCU) and the Minnesota Credit Union Network (MnCUN).

Representatives from Ecuador credit union Cooperativa COOPROGRESO visited four Twin Cities credit unions as part of an exchange program organized through the the World Council of Credit Unions and the Minnesota Credit Union Network. (Photo provided by the Minnesota Credit Union Network.)
The Ecuadorian credit union representatives made stops at Hiway FCU and City & County CU in St. Paul, US FCU in Burnsville, and Postal CU in Woodbury. The hosting credit unions showed the visitors how Minnesota credit unions use new technology and how they attract and retain members with their products and services. Minnesota credit unions also shared ideas about driving membership growth and creating credit union awareness opportunities.

"As we receive more and more requests to connect credit unions around the world, we rely on strong partners and supporters such as the Minnesota Credit Union Network," said Victor Miguel Corro, Worldwide Foundation for Credit Unions vice president. "The ability to have peer-to-peer exchanges is invaluable as the information and operational best practices flow when the parties meet. When the World Council connects these different worlds, everyone in the exchange benefits."

"For our credit unions in Minnesota to be able to participate in an international exchange like this is a wonderful opportunity to share industry knowledge that helps to foster credit union development around the globe," said Mark D. Cummins, MnCUN president/CEO. "For the credit unions that hosted our partners in Ecuador, it is a great example of the 'people helping people' philosophy and the successes we can have when working together."

Bank fees survey Fees are rising

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FOSTER CITY, Calif. (8/15/12)--"The fee environment worsened for bank customers in virtually every way possible in the first half of the year," according to a new survey from MoneyRates.com that says banks' fees are rising (Money.MSN.com Aug. 14).

The survey is different from one reported Tuesday that compared bank and credit union fees and showed credit unions consistently had lower and fewer fees on checking accounts. (For more information on that survey, see related story:  "CUs get global notice from rates study.) In the new study, no credit unions were included.

Average checking account fees at banks rose in every major category tracked, according to the new Mid-2012 Bank Fees Survey, conducted in July by MoneyRates.com (Aug. 13). It compared the findings with its survey for year-end 2011. The survey is produced semi-annually.

Among the findings in the six areas the study tracked:

  • Minimum required to open an account. Banks required an average $408.76 to open a checking account, up from $391.41 in the previous survey.  Money Rates noted that the higher the minimum, the more likely poorer customers may be forced to go unbanked.
  • Monthly service fees. Of the banks surveyed that charge a monthly fee, the average fee was $12.08 a month, up from $11.28 a month. That totals nearly $145 a year and can take a bite out of a savings account, Money Rates said.
  • Minimum balance for fee waiver. The minimum amount needed to keep the bank from charging fee on deposits is rising to $4,446.57, up from $3,590.83.
  • Overdraft fees.  At banks, overdraft fees were on average $29.83, an increase from $29.23 in year-end 2011.
"Previous surveys have tended to show more of a mixed bag, with some fees rising and others falling," said Richard Barrington, Money Rates senior financial analyst. "But the latest survey shows a comprehensive trend toward checking accounts becoming more expensive."

Fee structures differed between large and small banks, and between traditional branch-based institutions and online banks.

Barrington made several suggestions for consumers, including shopping around, considering an online bank, considering a smaller institution, and matching one's needs with the bank's fees.

A number of media covering this study also mentioned a Bankrate.com study that found credit unions are a haven for fee-sensitive consumers.

Elevations CU donates 36K to wildfire victims

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BOULDER, Colo. (8/15/12)--Elevations CU and Elevations Foundation in Boulder, Colo., Tuesday presented the Long Term Recovery Group of Northern Colorado with a check for $36,312 in the aftermath of a large wildfire in Colorado.

The High Park wildfire, which began June 9 and was the second-most destructive fire in Colorado history, grew to 87,284 acres (The Denver Post July 5). The fire killed one person and destroyed 259 homes, the Post said. The fire was 100% contained in early July.

"As the tragedy of the High Park Fire unfolded it became clear to us that we needed to mobilize and establish a fire relief fund for our neighbors to the north," said Dennis Paul, vice chair of the Elevations Foundation. The fund was specifically earmarked for temporary housing for individuals and families displaced by the fire. "Getting victims into a stable environment where they can begin to look to the future is critically important," Paul added.

The fund was launched on June 16 with a $10,000 Challenge Grant from the Elevations Foundation, the philanthropic arm of the $1.15 billion asset Elevations CU.

The foundation reported that Elevations members and business partners contributed $26,312.59 during the fund-raising period, which ended on July 6. With guidance from the United Way of Larimer County and the Fort Collins Housing Authority, the foundation was able to get resources into the right hands.

IFox BizI IBankrateI Consumers turning to CUs

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MADISON, Wis. (8/15/12)--U.S. consumers are turning to credit unions, as they tire of rising fees and scandals at banks, according to a Monday Fox Business article, picked up from Bankrate.com.

Credit unions added 1.3 million new members last year to a record-high total that well exceeds 90 million nationally, according to statistics compiled by the Credit Union National Association (CUNA) and cited in the article. 

It listed five advantages of using a credit union for personal finances:

1. A not-for-profit status fosters a member-first mentality. Credit unions have superior member service. "Credit unions are cooperatives owned by their members," Pat Keefe, CUNA vice president of communications and media, said in the article. "Their mission is to provide their members with affordable financial services--not to gouge them as profit centers." Credit unions ranked better than banks in all categories in the most recent Prime Performance Bank and Credit Union Customer Satisfaction Survey, with customers rating their overall satisfaction at a new score of 89%, seven points greater than the industry average, said Fox Business.

2. Consumers can find lower credit card interest rates at credit unions. Credit unions usually pass on savings from their not-for-profit status throughout their complete product line, offering members higher rates on savings accounts and lower rates on loans and credit cards, said Greg McBride, Bankrate.com senior financial analyst.

3. Consumers can dodge minimum balance rules. Credit union accounts have fewer requirements. While many accountholders at banks are forced to adjust to higher minimum balance requirements, 72% of financial institutions surveyed in the 2012 Bankrate Credit Union Checking Survey had no minimum balance requirements to avoid fees.

4. Lower fees still are rising, and credit union fees are lower than at most banks. Many credit unions have flexibility in how much they charge, and many try to keep costs low for their members, McBride said. For example, credit unions may eliminate products or services to cut costs rather than add fees, McBride explained. That flexibility adds up to big savings. Keefe said credit union members nationwide collectively saved nearly $6.3 billion last year by doing business at a credit union instead of a bank.

5. Credit unions have shared ATMs and branches to access cash. Large banks advertise the convenience of their ATMs or nearby branches, but some credit unions have joined forces to offer their members cash access with the CO-OP ATM network and a shared branch alliance. The CO-OP ATM network includes nearly 30,000 cash machines, and shared branching gives members the ability to conduct in-person transactions at nearly 4,700 branches nationwide, Keefe said.

To read the article, use the link.