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CU System briefs (08/02/2012)

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  • PORTLAND, Maine (8/3/12)--A Maine woman pleaded guilty to acting as a getaway car driver in four credit union and bank robberies in the state earlier this year.  Maria Mattson, 30, of Westbrook is charged with interference with commerce by robbery and conspiracy to commit bank robbery (Press-Herald Aug. 1). In January and February, she allegedly drove Paul Sans, 29, also of Westbrook, to robberies at Orono-based University CU's Portland branch;  Portland-based TruChoice CU;  Portland-based Evergreen CU's Windham branch; and Auburn Savings Bank, Lewiston. (Bangor Daily News Feb. 17). Sans pleaded not guilty earlier this week to four counts of bank robbery, interference with commerce by robbery and conspiracy to commit bank robbery.  A witness at the bank robbery noted the license plate of the getaway vehicle.  If convicted, Mattson faces up to 10 years in prison and a $125,000 fine; Sans faces up to 20 years in prison and a $200,000 fine …
  • GROTON, Conn. (8/3/12)--Charter Oak FCU unveiled a 30-foot-tall advertising wrap around a two-story elevator earlier this week at a mall in Waterford, Conn.  The Groton, Conn.-based, $703 million asset credit union said the wrap in Crystal Mall is part of its new branding campaign (GateHouse News Service via Norwich Bulletin Aug. 1). The wrap covered three sides of the elevator. It sports the company's orange tree with its website address, Facebook logo and mortgage logo …
  • RALEIGH, N.C. (8/3/12)--State Employees' CU (SECU) employees, through the SECU Foundation, are providing a 10-year, $2.5 million low-interest loan to assist in construction of a Program for All-inclusive Care for the Elderly (PACE ) facility in Pittsboro, N.C.  Under development by Piedmont Health Services Inc. (PHS), the facility will provide services for older adults who meet state eligibility criteria for nursing home-level care.  The 4.5-acre site will serve residents of Chatham, Lee and southern Orange counties. PHS and the Department of Family Medicine at University of the North Carolina School of Medicine will also collaborate to establish the first teaching PACE program in the state at the center, educating medical and allied health professionals in the PACE model.  The project aligns with SECU's new initiative to help support members in the 60+ age demographic through resources for various life stage issues. That demographic is projected to increase in North Carolina by more than 400,000 people per decade, reaching 2.14 million or about 18% of the state's total population by 2030 …

CUAD videos to highlight best CU stories

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BISMARCK, N.D. (8/3/12)--The Credit Union Association of the Dakotas (CUAD), which took to the road on a summer-long credit union awareness campaign across North and South Dakota, will film videos of consumers' best credit union stories next week in Sioux Falls, S.D.

CUAD staff will film the videos at the Sioux Empire Fair, Sioux Falls, to find the next "CU on the Road TV Star."  Fairgoers can stop by the campaign's booth anytime between Monday and Aug. 12 to tell their story in one minute or less, said the association.

Later, CUAD staff will upload the videos to the CU on the Road campaign's Facebook page, so visitors can vote for the best video. Voting begins Aug. 15 and will end Aug. 22.

The three videos with the most votes will each receive $250.  CUAD will choose one video from the final three as the "CU on the Road TV Star." The winner will shoot a television commercial featuring the credit union story, and the commercial will run as part of CUAD's continued campaign later this year.

Occupy group wins board seat at Vermont FCU

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BURLINGTON, Vt. (8/3/12)--A new board member of Burlington, Vt.-based Vermont FCU is a member of a group tied to an Occupy Vermont group.

Eric Davis of South Burlington, a member of a group called Vermont FCU Member's Assembly, was elected recently to a two-year term to the board, according to Vermont Public Radio (VPR News July 17).

Davis said that although he is extremely satisfied with his experience at the credit union, more opportunities exist to build the sense of shared ownership among members that can further differentiate the credit union cooperative from the traditional banking sector.

The members' assembly grew out of long-time Vermont FCU member Matt Cropp's work with the Occupy movement after he realized many people are unaware they have an ownership stake  in a credit union and that confusion exists on what it means to be a credit union member, he said. Cropp also ran for board seat at the credit union but was defeated in the election.

The VFCU Member's Assembly has 25 to 30 members, Cropp told local media, and is negotiating with the credit union to resolve issues generated by the group's use of the credit union's name in relation to the Occupy movement.

NJCUL launches BankingYouCanTrust.com

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HIGHTSTOWN, N.J. (8/3/12)--The New Jersey Credit Union League (NJCUL) has launched BankingYouCanTrust.com, a website to inform consumers about the benefits of credit unions, help them locate a credit union in their area and also showcase some of the industry-wide grassroots advocacy efforts that credit unions are pursuing.

"We wanted to create a site that was more in line with the brand we are using in our consumer awareness campaign. This site allows us to promote the benefits of credit unions and what we are working on from an advocacy perspective," said Paul Gentile, NJCUL president/CEO.

The search engine hosted on the site is that of aSmarterChoice.org. The site's content includes articles, videos and other information related to the benefits of credit unions, and items that draw attention to any grassroots advocacy efforts.

The site hopes to feature soon member testimonials that provide a portrait of how credit unions help members, small businesses and others.

The site was designed and developed by i7Media.

CUNA Mutual CUs aid farmers in drought

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MADISON, Wis. (8/3/12)--The U.S. is experiencing the worst drought in nearly a half-century. CUNA Mutual Group's crop insurance business is there to help, but will not know the extent of claims until after the harvest.

Click to view larger image Drought-stressed corn on the Western Tennessee/Kentucky border in late July. (Photo by Crane Station)
The U.S Department of Agriculture (USDA) Wednesday added 218 counties in 12 states across the Great Plains Midwest and South to its designation of natural disaster areas, with the widespread drought scorching cropland and pastures. That means nearly 1,600 counties--more than half the counties in the U.S.--in 32 states are eligible for government assistance for losses caused primarily by the drought  (Bloomberg.com Aug. 1).

"In 2009, CUNA  Mutual decided to diversify, and crop insurance is complementary to the credit union system," she explained. "The crop insurance industry--similar to credit unions--is based on relationships. It asks how do we help American farmers protect against natural disasters or weather-related events?" 

ProAg is a national writer of crop insurance in more than 40 states. While the drought is a significant event this year, ProAg's national presence will help CUNA Mutual offset weather-related losses in states that are affected, Piechowski said.

CUNA Mutual will not know until after harvest time what type of crop yields farmers got from their fields. Farmers have until about the middle of December to report claims, she added. So, the process likely will extend into 2013, and CUNA Mutual has no specific total numbers of claims and dollar amounts at this time.

Will this summer's drought bring more future crop insurance business to CUNA Mutual?

"It is not a saturated market," Piechowski said. "We do anticipate growth levels for years to come. In addition, we anticipate that current coverage levels will increase." As an example, a farmer might have bought a basic policy this year, but might increase coverage down the road because of the drought this year, she explained. 

One issue is that an increasing number of farmers with crop insurance may file insurance claims and give up on their crops. Farmers who have bolstered insurance coverage on their crops may be preparing to file claims and plow under their damaged crops without attempting to administer costly pesticides and weed killers to salvage an emaciated harvest, said Property Casualty360 (July 20).

An increasing use of federally supported crop insurance and a movement toward bigger policies and newer schemes that safeguard revenue now place farmers in a position in which they may be better off claiming a total loss, as opposed to trying to make the best of a diminished harvest. Such a trend could worsen a 50% spike in corn prices by reducing the supply further, Property Casualty360 said.

However, CUNA Mutual is aware of that issue and has safeguards in place, Piechowski said. "The crop insurance program has been developed by a private/public [government] partnership for over 30 years," she explained. "There is very specific language regarding fraud, waste and abuse. So farmers cannot abandon their crops and file insurance claims."

If there is fraud, waste and abuse, farmers can be prosecuted by the federal government, she added. "USDA and insurance companies have very sophisticated data-mining tools and whistleblower networks to manage those aspects of the program," Piechowsksi said.

Since CUNA Mutual got into crop insurance, its diversification strategy has paid off financially. In 2010, ProAg was responsible for 50% of CMG's operating-revenue growth, Piechowski said. Also, in 2010, CUNA Mutual was able to pay state credit union leagues $5 million more than in the past, she added.

At the individual credit union level, the credit union's role is to advise farmers through tough times such as a drought, Diane Jentz, business lending manager at the Platteville, Wis., office of Heartland CU, based in Madison, Wis., told News Now.

"So much is unknown out there," Jentz  said. "We're trying to assist members to make the best decisions--such as when to get out in the fields in their combines--and to work with insurance agents to make sure the members are aware of everything. Our involvement is more of awareness raising and consulting.

"We will be able to work with farmers in refinancing, but that won't be determined until the harvest comes in, crop insurance comes in, and then [we deal with] what's left," she added. "Until the combines are rolling and the crops get cut, we don't know."

CUNA Management School graduates 75

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MADISON, Wis. (8/3/12)--Seventy-five credit union professionals are the newest graduates of CUNA Management School, held last month at the University of Wisconsin in Madison, Wis., the Credit Union National Association (CUNA) announced.

CUNA Management School consists of a three-year course of study. Students receive academic training with real-world applications designed for credit union management personnel who aspire to achieve senior-level management and leadership positions in the credit union system.

About 4,900 men and women have graduated from the program since its inception in 1954. A graduation diploma is issued in conjunction with the University of Wisconsin Graduate School of Business and is recognized throughout the credit union movement as an honor and mark of accomplishment.

Of the 232 students attending this year's program, hosted at the University of Wisconsin-Madison, 87 were first-year students, 70 were second-year students and 75 were third-year students.

This year's graduates were from 22 states. Twenty-six students graduated with honors, and seven with high honors. Use the link to see the list of graduates.

High honors graduates are:

  • Christina Carter, Maine State CU, Augusta, Maine;
  • Eric Green, Peopleschoice CU, Saco, Maine;
  • Jeremiah Kossen, Lake Michigan CU, Grand Rapid, Mich.;
  • Cynthia Little, Mazuma (Mich.) CU;
  • Michelle McCourt, Bridgeway FCU, Poughkeepsie, N.Y.;
  • Christopher Phillips, Land of Lincoln CU, Decatur, Ill.; and
  • David Polet, CUNA Mutual Group, Madison, Wis.
The third-year graduating class presented $27,788 to the CMS Scholarship Fund during its graduation ceremony. The funds were raised during the three-year professional development program. The scholarship fund is earmarked to help smaller credit unions and individuals with limited financial resources become CUNA Management School attendees.

Vermont regulator sets hearing on banking CandD

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MONTPELIER, Vt. (8/3/12)--The Vermont Department of Financial Regulation (DFR) has set a prehearing conference to address the cease-and-desist order against the Vermont State Employees CU's (VSECU) use of "banking," "bank," and similar words in its marketing efforts.

The hearing will be at 9 a.m. ET on Aug. 22 at the DFR's offices, General Counsel

Clifford Peterson confirmed to News Now.  The hearing officer will be Robert Simpson, formerly of the state attorney's office in Chittenden County, he said.

VSECU CEO Steven Post told News Now that Simpson was selected by DFR Commissioner Steve Kimbell as an impartial official in the case.  The credit union's legal counsel is on vacation so the credit union's strategy hasn't been fully determined yet, he said.

The prehearing conference will address "housekeeping" chores such as determining the schedules for the later hearings addressing the cease-and-desist order, Peterson said. He added the conference is open to the public and will be on the third floor at the DFR's 89 Main St., Montpelier address.

The Association of Vermont Credit Unions (AVCU) will be present in support of the credit union, Joe Bergeron, AVCU president, told News Now in an e-mail.

VSECU was notified June 18 by DFR of the cease and desist order. It ordered the credit union to stop using "bank," "banking," "banking cooperative," and similar words in its materials.

New E-Scan highlights top 10 trends for CUs

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MADISON, Wis. (8/3/12)--The Credit Union National Assocation has released its 2012-2013 Credit Union Environmental Scan (E-Scan), a high-level view of the credit union competitive landscape that credit unions can use as strategic planning tool.

E-Scan covers trends in areas such as compliance, finance, lending and marketing.

Among the topics addressed in this year's E-Scan are 10 trends that will have implications for credit unions. They include:

1. Mobile banking. The top technology priority for credit union CEOs is mobile banking as credit unions seek to create a consistent member experience among channels.

2. Antibank sentiment. While Bank Transfer Day brought credit unions more members, it's time to solidify those relationships for the long term.

3. Consumer awareness. About 37% of consumers are "not at all" familiar with credit unions. This doesn't bode well for long-term credit union growth.

4. Earnings rebound. Modest growth and strong earnings will mean capital-to-asset ratios will increase from 10% today to about 11% by year-end 2013, approaching the record level of 11.5% set in 2006--the year before the onset of the recession.

5. Staffing. Layoffs, cutbacks, salary freezes and other belt-tightening measures have employee morale low following the recession. There could be consequences--lower productivity, less engagement, poor member service, loss of talent--without proper incentives and work-life balance.

6. Lending. After three years of essentially no loan growth, credit union loan balances should increase 4% in 2012 and 6% in 2013.

7. Governance. As the credit union business model evolves, so must its governance model. Innovative boards need a bolder approach to future challenges.

8. Membership growth. Currently, more than 21 million nonmembers younger than the age of 18 live in members' homes. Credit unions must attract Generations X and Y to ensure growth.

9. Technology. Using technology to achieve greater efficiencies was listed as another among credit union CEOs surveyed by Abound Resources.

10. Compliance. Credit unions have to anticipate regulatory changes from both state and federal agencies while placing a priority on member needs.

To access the E-Scan, use the link.

President celebrates 60 years at CU

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BISMARCK, N.D. (8/3/12)--Marvel Ebenhahn, president of Community CU, New Rockford, N.D., celebrated her 60th year with the credit union last month.

Marvel Ebenhahn, president of Community CU, New Rockford, N.D., began her career at the credit union in 1952. (Photo provided by Credit Union Association of the Dakotas.)
Ebenhahn's father was one of Community CU's original charter signers when the credit union was established in 1942 with a field of membership that included Farmer's Union Oil Co. members and patrons.

The credit union later changed to a community charter. 

She began her career in 1952 performing bookkeeping work for the credit union. Back then, the credit union paperwork "was in one four-drawer file cabinet--with a few empty drawers," Ebenhahn said. In 1952, the credit union had 18,000 in deposits and the focus was providing a place to save and borrow money for local farmers, she added.

Community CU is now a full service financial institution with 5,936 members, $407 million in assets and three locations.

The credit union experienced great growth when it established its own stand-alone building in 1965, Ebenhahn said.

When asked if she ever thinks about retiring, Ebenhahn said "retirement isn't for everyone." She enjoys taking time off and traveling, but doesn't want to do it all the time.

"As long as my head and body keep working, so will I," she said.