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CU System briefs (08/18/2009)

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* SUITLAND, Md. (8/19/09)--Andrews FCU has launched "Debt in Focus," a new online debt management tool created by the Filene Research Institute. The program helps people improve credit scores and better manage debt. It takes about 10 minutes to complete and provides members with an in-depth analysis of their financial position. The serve is free to members and others visiting Andrews' website. Andrews FCU is a $878.3 million asset credit union in Suitland, Md. … * HARRISBURG, Pa. (8/19/09)--The PaCUSC Board has appointed Linda Brown, executive vice president of Service lst FCU, Danville, Pa., to fill a board seat left vacant by the death of Rob Vuono. Brown is a member of the Filene Research Institute's i3 Group, which uses innovation to prepare credit unions for the future. She worked on projects to market to young adults, developing a credit union-based 1031 Exchange and a prize-based saving program (Life is a Highway Aug 14) … * CHICAGO (8/19/09)--Werner Thiele, 88, of Chicago died recently. Thiele, a native of Germany, was former president of International Harvester Employees CU in Springfield, Ohio. He is survived by his wife Anne and son Eric. (Chicago Tribune Aug. 14) …

Cooperatives at center of health care debate

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WASHINGTON (8/19/09)--Cooperatives have become a new buzzword as legislators consider proposals to reform the health care industry. The National Cooperative Business Association (NCBA) this week educated media about what a cooperative is and mentioned credit unions prominently as a good cooperative business model the government could follow. NCBA President/CEO Paul Hazen has been featured in BusinessWeek and The Washington Times, as well as WTOP-Radio; Channel 6 News in Tulsa, Okla.; WGN-Radio's "Greg Jarrett News Show" in Chicago and Christian Broadcasting Network's CBN News during the past two days. Adam Schwartz, NCBA vice president of public affairs and member services, was featured on Minnesota Public Radio. They discussed the proposal to use co-ops instead of a government-run insurance option as part of health care reform. The proposal, that cooperatives could serve as a model for health insurance cooperatives, was made by Sen. Kent Conrad (D-N.D.), whose state gets much of its electricity through utilities cooperatives. The proposal would cost about $6 billion in startup funding in the form of federal grants or loans. While the plan is appealing, since cooperatives are owned and run by their members, the public must first understand cooperatives more clearly before making a judgment, said Hazen. Unlike today's health insurance companies, cooperatives' purpose is to provide services to people, not to maximize profit, he said. Any health care reform needs to address fundamental issues such as the escalating cost of health care. More than 300 health care cooperatives already exist in parts of the country, including Arizona, California, Minnesota, Tennessee, and Washington state. But they don't underwrite and sell health insurance. They simply negotiate the rates on pre-existing plans with health insurance companies (Business Week Aug. 17). To operate as Conrad has proposed would mean the co-ops would need to enough members to reach scale so they could competitively negotiate directly with health care providers--doctors, hospitals and drug companies--Hazen told several of the media. Many cooperatives familiar to Americans are owned and run by farmers. The model closer to what the health insurance program would look like is a credit union, he told The Washington Times (Aug. 18) and CBN News. Co-ops work best when developed from the ground up, not the top down, he told the Times. A co-op's success should be judged over a 10- to 20-year period, not as a quick fix to the nation's health care problems. NCBA can't endorse or reject the proposal until it knows exactly how the insurance cooperatives will be set up and regulated, Hazen said. The key would be how the health co-ops would be organized. "We need more information. The public cannot meaningfully engage this debate unless the (Senate) Finance Committee releases more information," he said. NCBA says there are 29,284 cooperatives in the U.S. generating more than $652 billion in revenue, $75 billion in income and more than two million jobs. Cooperatives account for roughly 1% of the U.S. Gross Domestic Product ($154 billion of $14 trillion).

Kentucky league announces state award winners

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LOUISVILLE, Ky. (8/19/09)--The Kentucky Credit Union League announced its 2009 state-level winners for the Dora Maxwell Social Responsibility Award, Louise Herring Award for Philosophy in Action and the Desjardins Youth Financial Education award. State-level Dora Maxwell winners include:
* Kentucky Employees CU, Frankfort, $20 million to $50 million asset category; * Autotruck FCU, Louisville, $50 million to $100 million; * Park Community FCU, Louisville, $200 million to $500 million; and * L&N FCU, Louisville, $500 million.
ClassAct FCU, Louisville, won the Louise Herring award in the $50 million to $250 million asset category. Park Community also received the Desjardins award in the $250 million asset category. The award programs are sponsored by the Credit Union National Association (CUNA). The first-place winners will advance to national competition. The league will recognize winners at its annual meeting in November. CUNA will recognize national winners during the annual Governmental Affairs Conference (By the Way newsletter August).

NASCUS celebrates state-chartered CUs 100 years

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BOSTON (8/19/09)--The National Association of State Credit Union Supervisors (NASCUS) will meet for its annual State System Summit, Thursday through Saturday in Boston. NASCUS’ events begin today with business meetings of its leadership and a joint regulators meeting with the Conference of State Bank Supervisors (CSBS). Also today, NASCUS is conducting a directors college for New England area credit union directors. The week will culminate with the State System Summit. “One hundred years ago, Massachusetts passed the first state credit union act creating an example for state and federal credit union chartering,” said NASCUS President/CEO Mary Martha Fortney. “The 2009 NASCUS Summit will recognize this milestone in state credit union history and focus on the constructive dialogue to strengthen safety and soundness, as well as improve the financial health of credit union members.” At this year’s meeting, NASCUS’ current Chairman George Reynolds (Georgia) will pass the leadership to a new chairman, Thomas Candon, deputy commissioner of banking for Vermont’s Department of Banking, Insurance, Securities and Health Care Administration. Parker Cann, senior vice president and general counsel of BECU, Tukwila, Wash., will assume the chairmanship of the NASCUS Credit Union Advisory Council, a position currently held by Mendell Thompson, America’s Christian CU, Glendora, Calif. The summit’s featured speakers include Federal Deposit Insurance Corp. board member Thomas Curry; National Credit Union Administration Vice Chair Rodney Hood, and board member and NASCUS liaison Gigi Hyland; mortgage experts Tracy Ashfield and Richard Hagar; and Callahan and Associates President Chip Filson. The agenda includes presentations on the state of the corporate credit union system, supplemental capital, vendor management, unrelated business income tax, credit union taxation, shared-branching issues and consumer-lending regulatory updates.

New mortgage loan company rises from CU Mortgage ashes

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GARFIELD, N.J. (8/19/09)--A core group of credit union mortgage professionals who worked for the now-defunct CU National Mortgage have opened Clarity Member Services, a mortgage services provider based in Garfield, N.J. They decided to create Clarity Member Services, which opened July 1, because they feel it is the best way to continue leveraging their experience with mortgages and credit unions. “We wanted to do more of what we did best,” said Jill Peterson, Clarity vice president of sales and marketing. “We love credit unions--they’re fantastic to work with and we’re looking forward to providing service to them again.” CU National Mortgage closed this year after filing for bankruptcy in February. Its president, Michael McGrath, pleaded guilty in June to defrauding about $139.6 million from 19 credit unions and Fannie Mae. McGrath admitted to conspiring with others to fraudulently sell credit union loans and use the proceeds to finance U.S. Mortgage’s operations and investments for himself and the company (News Now June 12). None of Clarity’s personnel are implicated in these events. Clarity will offer conventional, Federal Housing Administration, jumbo, condo and co-op mortgage products. Its operation will be unique because it must deliver the same level of service to clients as credit unions bring to their members, Peterson said. Clarity employees six full-time individuals, and is prepared to bring more staff on as needed. Peterson told News Now that while at CU National, she learned some invaluable lessons about what credit unions need, and what could have been done to prevent the crime that shut down the company. Phil Scialabba, Clarity president, said loan files would not be stored onsite at CU National--which had contributed to the fraud at CU National Mortgage. Original documents from Clarity will be shipped to the credit union or investor, and parent companies will not have access. Credit unions also will see the loan process from start to finish by viewing electronic files. They can view their loan files, documentation, reporting and metrics as if the loans were run by their own staff. “We’ll provide a high level of security,” Peterson said. While Clarity will maintain privacy, it also will allow credit unions to come in and look at the company’s records to keep its integrity. “The door is wide open,” Peterson said. Since it opened, Clarity has received a favorable response from its vendors, such as CUNA Mutual Group and Prime Alliance. The company hasn’t started marketing yet, but hopes to sign four or five clients by the end of the third quarter, Scialabba said. The company also will use the same system it had at CU National. There won’t be a long learning curve for staff, he added. “We’re incredibly proud of what we did at CU National,” Peterson said. “It’s extremely unfortunate that one person perpetrated an awful crime that hurt so many people and credit unions.”

Panthers QB pitches CUs financial tips

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CHARLOTTE, N.C. (8/19/09)--Jake Delhomme, National Football League quarterback for the Carolina Panthers, will provide tips on financial fees and interest rates in three television commercials for Charlotte Metro FCU. Delhomme is the type of multimillionaire who can tout a credit union’s good points, said Nathan Tothrow, marketing chief for the $184.3 million asset, Charlotte, N.C-based credit union ( Aug. 18). “He’s about as unpretentious as you can get [for] a sports figure,” Tothrow told the newspaper. Delhomme “was kind of jazzed” about doing a commercial for the credit union, David Riggs, his marketing agent at Chicago-based Priority Sports & Entertainment, told the paper. “He’s not one of those athletes who just endorses everything,” Riggs added. “The credit union was a great fit because he’s so down-to-earth. He ended up opening an account there.”

First CEO of Mid-Atlantic Corporate dies

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HARRISBURG, Pa. (8/19/09)--John H. Bixler Jr., the original president/CEO of the Mid-Atlantic Corporate FCU, has died, the corporate announced Tuesday. Bixler, along with former Pennsylvania Credit Union Association (PCUA) President Mike Judge, formed the template for what is now the corporate, said PCUA President/CEO Jim McCormack (Life is a Highway Aug. 18). The corporate was chartered in 1976 as Mid-Atlantic Central FCU, offering investments and loans. Bixler served as president/CEO until his retirement in 1989. Before that, he served as president of Pennsylvania Central FCU and CenPenn Rail FCU (now Blue Chip FCU). He was the 1988 recipient of PCUA's Lifetime Achievement Award as the William W. Pratt Professional of the Year. "John's commitment to the credit union movement was always evident, especially in his belief that the system is the solution to meet the needs of credit unions," said Jay Murray, Mid-Atlantic president/CEO. Funeral arrangements are pending.