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More CUs close as Fay gains strength

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TALLAHASSEE, Fla. (8/20/08)--More credit unions closed Tuesday as Tropical Storm Fay hit southwest Florida and traveled northeast across the state, gathering strength and spawning at least seven tornadoes. Fay was expected to become a hurricane off the coast of Daytona Beach sometime today and be at hurricane strength when it swings back over Florida again Thursday. Georgia is also under a hurricane watch (Orlando Aug. 19). More than 93,000 Florida Power & Light customers were without power in 20 counties. About one-third of the outages were in Collier County, where Fay came ashore at 5 a.m. Tuesday near Cape Romano, just south of Naples ( Aug. 19). As of 2 p.m. Tuesday, eight credit unions were in contact with the Florida Credit Union League, according to the league's website. Lee County Mosquito Control CU, a $424,483 asset credit union in Fort Myers, closed Tuesday and indicated it would open during normal hours today, "pending weather." Lee County Postal Employees CU, a $3.9 million asset credit union, also based in Fort Myers, also said it would be closed Tuesday and open on normal hours today. Community Educators CU, a $300 million asset credit union based in Rockledge, said its Palm Bay branch remained open but all other branches closed at noon Tuesday. They planned to reopen today. Sarasota Coastal CU, with $235 million asset credit union and based in Sarasota, was closed Tuesday morning but said it might be open Tuesday afternoon. All branches at these credit unions were closed until further notice: Power Financial CU, Pembroke Pines, with $455 million assets; JetStream FCU, Miami Lakes, $99.5 million assets; Tropical Financial CU, Pembroke Pines, $721.7 million assets; and Priority One CU, Sunrise, $73.3 million assets. Priority One also said its call center would be closed. However, these credit unions' reports were before the storm began strengthening. News reports said the storm's maximum sustained winds remained at 65 mph, with higher gusts. (A hurricane has winds of at least 74 mph.) A storm tracker in Moore Haven, near Lake Okeechobee, reported winds of up to 81 mph ( Aug. 19). Residents and businesses, including credit unions, were preparing for flooding generated by 10 to 15 inches of rain. One vendor, Herndon, Va.-based DigitalMailer, helped a credit union in Key West get an update to its members quickly with information on accessing their funds, branch closures and plans for the credit union's contingency operations. DigitalMailer staff created an emergency e-mail alert and distributed it to more than 3,000 members of Key FCU within minutes, said the e-mail marketing firm. "You prepare for situations like these, but when an emergency hits, there's a million things a credit union needs to take care of," said Ron Daly, president/CEO of DigitalMailer. The company's Crisis Management Notification System is an e-mail alert and text-messaging tool that distributes messages to members and employees for disaster planning and training. It replaces manual disaster-planning phone trees and paging systems. "In an emergency, traditional communication methods may not be accessible or reliable," said Daly. "But with e-mail and text, members can access messages on their laptops or mobile phones. It doesn't negate the need for recording phone messages or posting website notices, but it certainly enhances the effectiveness of communications and gets the word out quickly," he added.

Florida league on state CFOs financial action team

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TALLAHASSEE, Fla. (8/20/08)--The Florida Credit Union League (FCUL) will represent credit unions on a new Financial Action Team formed by state Chief Financial Officer Alex Sink to help Floridians get assistance in an economic crisis. Sink announced Friday that she created the team to identify federal assistance available to Florida in an effort to increase the amount of aid to Floridians facing economic crisis. The team will analyze the recently passed Housing and Economic Recovery Act of 2008 to maximize Florida's share of the billions available in federal dollars to help the state's taxpayers weather economic challenges. Florida had the second-highest number of foreclosures in the nation in July, posting 45,884 foreclosures, according to RealtyTrac's July 2008 U.W. Foreclosure Market Report. That is a 14% increase from June. Florida's foreclosure rate was the third-highest in the nation, with one foreclosure for every 186 households. Florida has a 6.1% unemployment rate, the highest since January 1995. The Agency of Workforce Innovation attributes the negative growth to a decline in construction. In addition to FCUL, members of the team include representatives from 11 other organizations.

Texas University FCU helps 11 scammed homeowners

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AUSTIN, Texas (8/20/08)--Eleven Hispanic families victimized by local home purchase fraud have been thrown a lifeline by University FCU (UFCU), Austin, Texas. The credit union will provide fixed-rate mortgage loans and a property deed that will allow the homeowners to retain the residences they bought earlier this decade in what turned out to be a scam, according to Texas Attorney General Greg Abbott. The scam--conducted by Robert L. Flores of Cedar Park, Texas, and a company he operated, Galindo Trust--was directed at Hispanic home buyers who don’t speak English. Many lacked Social Security numbers or the documentation usually required of home purchasers, Abbott said. Abbott successfully sued Flores and Galindo Trust in May. Permanent injunctions with civil penalties totaling $1.4 million were ordered against the defendants. Flores’ company sold a group of homes it purchased from a healthcare organization that financed the purchase. Flores then resold the homes to buyers, but did not inform them of the pre-existing liens he owed. The homes were financed through a contract for deed--a mechanism that allows the seller to collect a down payment and monthly payments, but not deliver ownership to the buyer until the contract is paid in full. Flores collected taxes and insurance fees on the homes but failed to make payments, Abbott said. The credit union became aware of the situation in the fall of 2006 when UFCU employee Monica Muñoz alerted them to it and suggested that the credit union assist. Yvonne Lopez-Noack, mortgage lending officer at UFCU, began helping the families finance their homes through conventional means with a legitimate title. The closing of the new loans was conducted Friday at the Austin Bar Association. Why did the credit union get involved? “Part of a credit union’s mission is to help people of modest means,” Noack said. “These people made a down payment and paid their monthly installments in good faith, and they deserve to enjoy the benefits of homeownership. We’re thrilled to be able to assist them as a public service.”

Thanks to CUs Wisconsin students return eager to save

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PEWAUKEE, Wis. (8/20/08)--Wisconsin students are heading back to school this fall ready to put their money into personal savings accounts held at 77 youth-run credit unions inside the state’s elementary, junior high and high schools, according to the Wisconsin Credit Union League. The savings push is no accident, said Brett Thompson, league president. “Wisconsin is a progressive and award-winning state for financial education,” he said. Credit unions have provided financial education to students through the student-run branches and have sponsored 67 teachers at the National Institute for Financial and Economic Literacy, a summer workshop held at Edgewood College in Madison. The workshop provides teachers with resources to improve their personal finance lessons. Savings at Wisconsin credit unions increased more than 7% in the year ending in March. National savings rates were at 2.6% in the second quarter of this year. “While Americans are nowhere near to achieving the savings habit that defined today’s students’ grandparents’ generation--something our country needs right now--Wisconsin students appear to have the discipline to make some important strides in saving,” Thompson said. “The fact that young people save regularly is a sign that they grasp the need to save in light of the economic pain that’s affected families, as well as entire sectors of the economy,” he added. “Young people are recognizing the need to put one’s financial house in order.”

Sterner to receive Wegner Award posthumously

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BOULDER, Colo. (8/20/08)--The 2009 Herb Wegner Memorial Award for Lifetime Achievement will be presented posthumously to the late William Charles “Bill” Sterner. Sterner, former CEO of Boulder-based Elevations CU, died at age 66 while at the Credit Union Association of Colorado’s Legislative Forum in March (News Now April 1). The award will be presented at the 21st Annual Wegner Awards Dinner presented by the National Credit Union Foundation. Sterner was former chairman of the Credit Union Association of Colorado (CUAC) and former vice president of the Credit Union National Association (CUNA). “Bill’s memory shines on in all our lives,” said Wegner Award nominator John Dill, president/CEO of CUAC and the Credit Union Foundation of Colorado and Wyoming. “Bill’s strong commitment, vision, and innovation to foster growth in the credit union industry will continue to inspire and help advance future generations and new frontiers.” Decades before most credit unions learned to “reach out to new markets” and “serve the underserved,” Sterner taught these concepts around the world. He promoted new and sustained membership in cooperatives and helped save the Credit Union Development Education (DE) program from elimination during budget cuts. In 1990, Sterner was appointed to lead CUNA’s Credit Union Moonshot, an outreach program. He trained credit union leagues and built the first credit union template to reach the Hispanic community. In 1997, Sterner joined the University of Colorado FCU and became interim CEO in 2000. He oversaw its transition to Elevations CU, with asset growth from $350 million to $790 million, increased membership to 76,000, and recognition as Boulder's "Best Financial Institution" for nine consecutive years. “Bill’s underlying operational focus was on the basic credit union tenets: providing for the underserved and meeting the needs of members,” said Immediate Past Chair Lynn Walloch. Sterner’s memorial will be the final presentation during the Wegner Awards Dinner at the Grand Hyatt Washington on Feb. 23, opening night of CUNA’s 2009 Governmental Affairs Conference.

WOCCU Manager Certification Program meets in Guatemala

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GUATEMALA CITY, Guatemala (8/20/08)--More than 69 participants from seven countries in Central America and South America gathered for the World Council of Credit Unions’ (WOCCU) Manager Certification Program.
Mark Cifuentes, World Council of Credit Unions technical services senior vice president, leads a second-year class at the Latin American Manager Certification program in Guatemala.
Luis Jara (standing), World Council of Credit Unions Mexico SAGARPA project director, asks Latin American Manager Certification Program students a question. (Photos provided by the World Council of Credit Unions)
The two-year program focuses on training current and aspiring credit union managers in the global credit union movement. Instructors taught first-year participants about historical trends, the regulatory environment, competition and appropriate product pricing to better forecast and drive the growth of their financial institutions. Second-year students showed progress after putting first-year lessons into practice, according to Mark Cifuentes, senior vice president and head of WOCCU’s global services efforts. Cifuentes facilitates and teaches the program with WOCCU staff. “It’s incredible to see the change in people when they learn about cooperative and financial principles,” Cifuentes said. “Now that they have completed their second year, they have a clearer vision for the future and are ready to turn their credit unions into model institutions.” The first-year class of 53 participants included representatives from credit unions in Bolivia, Columbia, Guatemala, Mexico and Nicaragua. The second-year class of 16 included attendees from the Dominican Republic, Nicaragua and Peru. The next program will be held Sept. 29-Oct. 3 in Nadi, Fiji.

PCUAs Better Choice saves consumers 3.2 million

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HARRISBURG, Pa. (8/20/08)--Since launching in October 2006, Pennsylvania's payday loan-alternative program, Credit Union Better Choice, has saved consumers more than $3.2 million dollars in interest and fees. The Pennsylvania Credit Union Association (PCUA) reported its semi-annual figures for the program, which was developed with the Pennsylvania Treasury Department. Since the program began, 73 credit unions with 198 locations have agreed to offer the loans, with additional participants continuing to sign on. Of the participating credit unions, 66 made nearly 9,500 loans totaling more than $4.47 million. The average loan amount was $470.92. "The success of the Credit Union Better Choice program continues to indicate that Pennsylvanians need access to low-cost short-term loans," said Jim McCormack, PCUA president/CEO. "I'm pleased that credit unions are fulfilling that need in Pennsylvania and clearly demonstrating our mission of People Helping People." A typical $500 payday loan costs consumers $15 for every $100 borrowed for two weeks, or roughly $450 over 90 days. The same loan would cost Credit Union Better Choice borrowers about $42.50 for 90 days, plus it would put $50 in their savings account. The program also provides financial education to consumers. Pennsylvania consumers saved an average 80 cents in loan fees and costs for every dollar borrowed through Credit Union Better Choice. That translates to more than $3.2 million consumers saved. Borrowers also placed $447,327 into savings accounts for future needs. "At a time when high gas and food prices continue to strain budgets across the Commonwealth, Pennsylvanians who need quick access to funding should not have to worry about getting trapped in a predatory debt cycle," said Robin Wiessmann, state treasurer. Wiessman noted those using the Better Choice loans received "the short-term loan they need but also practical financial skills."

Shared branching key in disaster recovery says CU

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ATLANTA (8/20/08)--With hurricane season under way, a New Orleans-based credit union is reminding credit unions that preparation is key in providing uninterrupted account access to members during an emergency, and that shared branching can play an important role in business continuity. New Orleans Firemen’s FFCU (NOFFCU) encouraged credit unions to become part of a shared-branching network. When Hurricane Katrina battered the Gulf Coast in 2005, NOFFCU turned to CO-OP Shared Branching for assistance. While NOFFCU's offices were closed, it directed members to shared branches to get the money they direly needed. Those branches are still used by members today. “After the storm, many members were permanently scattered outside of our proprietary branch network,” says Cami Crouchet, chief operating officer of NOFFCU. “We expected a decline in membership, but instead our numbers remained flat," she said. "Shared branching was an integral part of our disaster recovery plan because our members who moved were able to keep their accounts active by making shared locations their regular branches," said Crouchet who added that members said they were "very impressed by how well they were treated at these locations.” After Katrina, Crouchet attended a conference that included bank counterparts. “In discussing the impact of Katrina, we realized we didn’t experience what banks went through, because of shared branching. We may not be as big as banks, but we’re better, and we have a wonderful sense of community.” “Credit unions really reached out when the hurricanes hit in 2005, and that compassionate spirit made us proud to be part of the movement,” says Carroll Beach, president/chief operating officer of CO-OP Shared Branching. “Credit union members needed access to shared branching in the aftermath of the storm. Maintaining the Next Generation Network switch in-house gave us the flexibility to sign up impacted credit unions, some in a matter of hours, and help get them on the road to recovery,” Beach said. CO-OP said credit unions must avoid a false sense of security--emergencies are not limited to coastal regions. Man-made or natural, large-scale or small, disasters come in many forms. Family First of New York FCU (FFFCU)is prepared to serve members through shared branching in case fires, snowstorms, or power outages close their doors for even a short period of time. “Our credit union branches are vulnerable to various events that a location 25 miles away might escape, such as an ice storm,” says Christine Peters, president/CEO of FFFCU. “It’s important for credit unions to develop the best plan they can to protect members. Why not consider shared branching for business continuity? It is well received in everyday use, and it has its place in disaster recovery.” “Large scale events, such as Katrina, elevate the need for and visibility of the benefits of disaster recovery planning,” said Peters. “Shared branching is a great way to partner with other credit unions to take advantage of each other’s branches when your members need them.” CO-OP Shared Branching offers 3,400 locations, including 120 international branches.

First-half net income up 23 at Wisconsin CUs

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MADISON, Wis. (8/20/08)--Wisconsin credit unions saw a nearly 23% rise in net income and an 8.5% increase in savings in the first half of the year. Net income totaled about $62.1 million at mid-year 2008, compared with $50.5 million for the first six months of 2007, according to the State of Wisconsin Office of Credit Unions Bulletin for mid-year 2008. Also, savings rose to more than $15 billion. “Overall, the financial indicators for Wisconsin credit unions exhibit sound financial performance for the first half of 2008 amid volatile challenging markets,” Suzanne T. Cowan, director of the Office of Credit Unions, wrote in the bulletin. Total assets as of June 30 were $17.8 billion, representing growth of $1.2 billion--a 7.4% increase--during the first half of the year. The net worth ratio remained strong at 10.78%, the bulletin said. Delinquency was 1.14%, down from 1.27% as of Dec. 31, 2007. The return on average assets grew slightly to 0.72%, compared with 0.66% in June 2007. Loans outstanding increased by $629 million and savings grew by $1.1 billion. The loan to share ratio for Wisconsin credit unions continues to be high at 92.89%, Cowan wrote in the bulletin.

Maine CUs post gains during first-half 08

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WESTBROOK, Maine (8/20/08)--The first six months of 2008 revealed that Maine’s credit unions posted increases in all major categories--assets, shares, loans and membership--they reported to the Maine Credit Union League. As of June 30, assets at Maine credit unions increased 5.86%, loans grew by 2.22%, and shares (savings) showed the highest growth at 6% from January to June. Membership at Maine’s credit unions grew by nearly 5,000 members to 600,000 statewide. Nationally, Maine has been ranked as the fifth strongest credit union state for the past six years, the league said. “During these difficult economic times, credit unions remain a safe and sound option for quality, low-cost financial services for consumers,” said John Murphy, league president. “Maine credit unions hold a trusted position in the communities they serve and that translates into more consumers taking advantage of the benefits that using a credit union offers. In recent months, Maine credit unions have responded to the worries of many Maine consumers about the high cost of heating their homes this winter. “A number of Maine credit unions have introduced no or low-interest energy assistance loans as well as weatherization loans to help make members’ homes more energy efficient,” he continued. “These special loan programs mean even more benefits and savings for credit union members on top of the millions that Maine consumers collectively saved last year by using a credit union.” The mid-year statistics also indicate that credit unions continue to outpace most competitors in convenience and access. The number of credit union locations in Maine now stands at nearly 200 across the state, the league said. Also, the Maine Credit Union SurF ATM Network has more than 200 surcharge-free ATMs, making it one of the largest networks in the state. In the first six months of the year, the Maine Credit Union shared branch network, which enables members of participating credit unions to conduct most financial transactions at other credit unions, increased 20%. It has 85 locations in Maine and 3,400 nationwide.