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Wis. league Banks urging heaping taxes on consumers

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PEWAUKEE, Wis. (8/16/11)--"There they go again," said Wisconsin Credit Union League President/CEO Brett Thompson, in a press release after the latest suggestion the Wisconsin Bankers Association (WBA) to eliminate credit unions' tax exempt status. That would "heap taxes on consumers," the league said. "Every couple of years, the WBA repeats the same false claims, meaningless numbers and intentional and flagrant mischaracterization of the law, apparently thinking that somehow that will make it true," he said. "But it's not true now, just like it wasn't the last time. Or the time before that," he added. The state banks recently sent a letter to Congress asking for increased taxes on Wisconsin consumers," he said, referring to their suggestion to eliminate credit unions' tax exemption. "The league exposed their hypocritical plea for what it was--another attempt to stamp out competition couched in feigned concern for the tax-burdened citizens they claim to want to help. Noting that eliminating credit unions' tax exemption would amount to adding a tax on Wisconsin citizens, he outlined two key points:
* The real savings for Wisconsin consumers. The additional taxes WBA says might be collected by taxing credit unions is dwarfed--nearly six times over--by the $203 million in savings credit unions deliver to members annually via lower loan rates, higher savings rates and lower and fewer fees. Credit unions save Wisconsin bank customers $66 million because competition helps keep bank fees and rates in line. More than 80 Wisconsin banks have a similar exemption from corporate income tax. The difference: Banks would have to pay twice that of credit unions, and credit unions return earnings to their members, while banks return profits to a few shareholders. * The real reasons credit unions exist. Nothing in state or federal law requires credit unions to serve primarily the poor. Wisconsin law says a credit union exists 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." The law does not limit by income who credit unions can serve but expects credit unions to serve all members regardless of income, the league said. Credit unions are taxed as they are because they are cooperatives that return earnings to all their members via more competitive pricing on financial services.
"In the recent past, banks took huge bailouts from taxpayers. Until they were stopped, many held billions of dollars of assets in other states to avoid paying their share of Wisconsin taxes," said Thompson. He pointed to a media report that one Wisconsin bank paid no state income tax from 2000 to 2009, although it booked $2.6 billion in profits during that period. A second bank paid less than 1% on its profits those years and was sold to a foreign corporation. It will be permitted to use the bank's losses from the 2008 recession to offset profits well into the future, he added. "That amounts to a shift of several million dollars a year from Wisconsin's tax coffers into the hands of investors in one of North America's biggest banks. To add insult to very serious injury, [it] has started laying off more than 400 Wisconsin workers while sending profits--untaxed--out of the country," he said. "It's time for the WBA to stop," Thompson said, inviting consumers to move their accounts to a credit union and urging them to go to www.asmarterchoice.org to find a credit union they could join.

Indiana MBLs rose 50 since 2007 league tells paper

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FORT WAYNE, Ind. (8/16/11)--Member business lending (MBL) at Indiana credit unions has risen 50% since 2007, indicating "businesses more and more are looking to credit unions for business loans," John McKenzie, president of the Indiana Credit Union League, said in the Sunday issue of the Journal-Gazette. The article, "Lenders battle for businesses," outlines credit unions' push to raise the MBL cap to 27.5% of assets from 12.25% so they can be the lenders of choice for America's small businesses while assisting the economy with a $13 billion influx in new small business loans and helping create 140 million new jobs without cost to the taxpayer. With credit unions and banks competing for small business loans, local companies might be able to lock in a loan at an attractive interest rate, said the Fort Wayne, Ind., newspaper. Since the beginning of the recession, credit union lending to businesses rose 39% nationally and 50% in the state, McKenzie told the publication. More than 50 Indiana credit unions offer business loans--a decision made by each member-owned organization. Dollarwise, Indiana credit unions have made $1.5 billion in business loans, representing 13% of all credit union lending in the state. "Businesses more and more are looking to credit unions for business loans," McKenzie said. Raising the MBL cap would raise state credit union lending capacity by $364 million in the first year of the phased-in increase and would create more than 4,000 jobs, he added, noting that businesses need access to credit. The newspaper also interviewed a Fort Wayne, Ind. credit union which said it has had to turn down some loans because it is bumping against the MBL cap and the Indiana Bankers Association about banks' opposition to lifting the MBL cap. McKenzie also pointed out that the usual lending standards apply when credit unions lend to businesses. The goal is to make good loans that get paid back, he said, adding, that businesses applying for credit union loans are solid borrowers. The Indiana Chamber of Commerce said that bank lending decreased nationally by more than 14% from Dec. 31, 2007, to March 31. During that same time, business loans from credit union rose by nearly 12%. The chamber also pointed out that credit unions' total business lending as of March 31 was less than 2% of the bank total, or $14.8 billion compared to more than $1 trillion. For the full article, use the link.

CUNA CU presence at state legislative groups meetings important

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WASHINGTON (8/16/11)--In recognition of the impact that state legislative issues have on credit unions, the Credit Union National Association (CUNA) and state leagues participated in two national conferences of state legislators this month.
Click to view larger image The American Legislative Exchange Council (ALEC) met the week of Aug. 1 in New Orleans. The Credit Union National Association’s (CUNA) State Government Affairs department attended and participated in sessions. Pictured at the CUNA booth at the ALEC meeting were, from left, John Kozlowski, Ohio Credit Union League general counsel, and Pat Sowick, CUNA vice president of league relations. (Photo provided by CUNA)
The American Legislative Exchange Council (ALEC) met the week of Aug. 1 in New Orleans. CUNA’s State Government Affairs staff met state legislators from across the country, discussing credit union issues. “ALEC created a new financial services subcommittee and CUNA attended the first meeting,” Pat Sowick, CUNA vice president of league relations, told News Now. “It’s important to have a credit union presence in these forums where financial services issues are discussed. A highlight this year at ALEC was the attendance by more than 600 state legislators--many of whom were freshman members.” ALEC is a conservative organization comprising both Republicans and Democrats, Sowick added. The National Council of State Legislators (NCSL), a bipartisan organization, was held in San Antonio last week, and CUNA participated in several committee and task force sessions adressing issues impacting credit unions, Sowick said. The Texas league hosted special activities in the NCSL exhibit hall, visited by thousands of conference attendees. At both events, CUNA staffed a booth featuring America’s Credit Unions and aSmarter Choice, the website CUNA and the state credit union leagues have created to help consumers learn more about credit unions and locate one they are eligible to join. “Both conferences were heavily attended by the banking industry, retailers and payday lenders,” Sowick explained. “So it was important that credit unions were represented. CUNA also was joined by numerous state league representatives at both conferences.”

State orders Sacramento District Postal ECU liquidated

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SAN FRANCISCO (8/16/11)--Sacramento District Postal Employees CU (SDPECU), a privately insured, state-chartered credit union in California, has been closed, announced the California Department of Financial Institutions (DFI) Friday. Citing inadequate capital, the agency ordered the $20.7 million asset credit union to be liquidated. The regulator emphasized that members' deposits are safe and insured for up to $250,000 per account by American Share Insurance (ASI), the nation's largest private share insurance provider. DFI appointed the Dublin, Ohio-based ASI as the liquidating agent. ASI has arranged the transfer of SDPECU member share accounts to Southern California Postal CU, a $56 million asset credit union based in Long Beach, Calif., said press releases from both DFI and ASI. SoCal purchased all of SDPECU's loans and other assets and assumed all its share account liabilities, enabling SDPECU's members to receive uninterrupted credit union services, said ASI. ASI said the closed credit union reported $20 million in assets as of July 31 and served 3,800 postal workers in the Sacramento area. SoCal serves about 4,400 members who are principally postal workers in southern California. Members of the closed credit union can visit the Southern California Postal CU website at www.scpcu.org for more information about the transaction's effect on their accounts.

Synergy One Apple FCUs merger approved

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FAIRFAX, Va. (8/16/11)--The National Credit Union Administration has approved a merger between Apple FCU, Fairfax, Va., and Synergy One FCU, Manassas, Va. Because Apple FCU will absorb all of Synergy One’s employees and branches, there will be no job layoffs or branch closings related to the merger, which will be effective in November. Synergy One was established in 1970 and has $180 million in assets, two branches and more than 25,000 members. Apple FCU was established in 1956 and has $1.35 billion in assets, 19 branches and more than 118,000 members. “Apple will benefit from greater economies of scale through this merger, which should result in better loan and savings rates for members of both credit unions,” says Larry Kelly, president/CEO of Apple. “This merger will be a win-win for our employees and our members,” said William White, president/CEO of Synergy One. “Prince William County has been very hard hit by the recession and the ensuing mortgage defaults have affected our credit union, so this merger will help bring us stability.” In 2010, one in every 436 households in Prince William County was in foreclosure, according to RealtyTrac.com. U.S. Department of Labor statistics show that the county had an unemployment rate of 5.4% last year. In nearby Fairfax County, one in every 885 households was in foreclosure and the county’s unemployment rate was 4.6%.

CU System briefs (08/15/2011)

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* PHOENIX (8/16/11)--The Mountain West Credit Union Association's
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(MWCUA) Valley of the Sun Chapter in Arizona held its annual bowling tournament recently to raise awareness, funds and supplies to benefit Credit Unions for Kids, which supports Children's Miracle Network Hospitals, Phoenix Children's Hospital and Tucson Medical Center. Funds raised this year will go to Phoenix Children's Hospital's One Darn Cool School program. The chapter's credit unions are the primary sponsor for the full-service, K-12 school at the hospital and available to all patients. More than $750 was raised through raffle ticket sales. Attendees also contributed to an on-site supply drive, collecting backpacks, books and other school items. Among the 156 participants at the event, held in Glendale, Ariz., were, from left, Kayla Ward and Jennifer Sedler, Miss Arizona. (Photo provided by the Mountain West Credit Union Association) … * LOS ANGELES (8/16/11)--Los Angeles FCU (LAFCU) has revved up its auto sales engine by teaming with Enterprise Car Sales to offer special weekend vehicle sales throughout August. They will offer savings on domestic and import vehicles, with loan rates from 1.99% annual percentage rate, $1,000 over Kelley Blue Book on vehicle trade-ins, and a $500 Gas Card Raffle. Buyers can preview the vehicles in the inventory on Enterprise's website. Also available: Up to 120% vehicle financing with up to 84 months to repay, no money down, and convenient payments. Other sales the $695 million asset LAFCU will offer this month and in September include sales with Carsfor Members.com, Credit Union Direct Lending (CUDL)-associated dealers, LAFCU Auto Buying Service, and Longo Toyota-Scion-Lexus dealers … * NAPERVILLE, Ill. (8/16/11)--Representatives from the Illinois
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Credit Union League met with staff from Region IV of the National Credit Union Administration (NCUA) at the ICUL headquarters in Naperville, Ill., last week. The discussion centered on current issues and how the two entities can work together to better serve Illinois credit unions. The league also shared information about a challenging Illinois legislative environment and how credit unions maintained a strong voice before the Illinois General Assembly during its Spring session. From left: Dan Plauda, ICUL president/chief executive officer; Don Edwards, ICUL senior vice president, federal governmental affairs; George Fiegle, executive vice president, ICUL Service Corp.; Patrick Smith, vice president, communications and regulatory affairs; Steve Olson, ICUL executive vice president, general counsel and chief operating officer; Keith Morton, NCUA Region IV regional director; Larry Blankenberger, NCUA associate regional director-programs; NCUA supervisory examiners Richard Klecun and Gerald Schulz; and Tom Kane, ICUL executive vice president and chief administrative officer. Also attending but not pictured was NCUA supervisory examiner Linda Vick. (Photo provided by the Illinois Credit Union League) …

CU rep at todays White House economic forum

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IOWA CITY, Iowa (8/16/11)--Credit unions will be represented at the White House Rural Economic Forum at Northeast Iowa Community College in Peosta, Iowa. Among those in attendance will be Jeff Disterhoft, president/CEO of University of Iowa Community CU, Iowa City, Iowa. The forum will bring together small-business owners, private sector leaders, rural organizations and government officials to discuss ideas and initiatives to promote economic growth, accelerate hiring, and spur innovation in rural communities and small towns nationwide. The president will hear directly from rural leaders from across the nation to discuss the importance of growing small businesses and strengthening the middle class in rural America. Obama administration officials have said they will focus on a number of small initiatives that could benefit the economy, a theme the president has emphasized in recent speeches (The New York Times Aug. 13). The Credit Union National Association (CUNA) and credit unions are pressing Congress to increase credit unions’ member business lending (MBL) cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

New Catalyst Corporate slates its first event

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DULUTH, Ga. (8/16/11)--Catalyst Corporate FCU’s first annual Economic Symposium in September, “Engaging a New Era,” will provide Georgia credit unions an opportunity to begin forming economic strategies to guide their institutions during the next 12 months. They also will have a chance to engage the new era ushered in by the launch of Catalyst Corporate FCU in Duluth, Ga. Scheduled three weeks after the projected merger of Georgia Corporate FCU and Southwest Bridge Corporate FCU, the Economic Symposium will be Catalyst Corporate’s first public event. The event is set for Sept. 28-29 at the Twelve Centennial Park Hotel in Atlanta. Six economists/financial industry experts will address symposium participants. Speakers include:
* Roger Tutterow, chief economic adviser to The Henssler Financial Group and professor of economics at Mercer University, who will provide an outlook on the local economy; * Tim Lerew, technology consultant, who will explore electronic wallets and other emerging technologies; * Tun Wai, vice president of research and chief economist for National Association of Federal Credit Unions, who will provide an economic outlook for the credit union industry; * Ben Rogers, research director for the Filene Research Institute, who will discuss recent credit union industry research and trend analysis; and * Cory Johnston, vice president of investment sales, and Brian Turner, director of advisory services, of Catalyst Strategic Solutions, who will discuss strategies for effectively managing credit union balance sheets.
The Economic Symposium is open to all credit unions. Catalyst will award up to five continuing professional education credits for attendance at this year’s Economic Symposium. For more information and to register, use the link.