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CU System Briefs (08/02/2013)

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  • FORT WAYNE, Ind. (8/2/13)--A man was arrested in connection with a July 22 heist at Three Rivers CU in Fort Wayne, Ind., according to Fort Wayne Police. Reginald A. Greenwell, 28, of Fort Wayne, was preliminarily charged with armed robbery for the incident at the $727 million asset credit union. A surveillance system camera captured still images of a robber--wearing a dark coat with emblems and a dark Atlanta Braves hat--at the teller's counter (Journalgazette.net July 31) ...
  • LINTHICUM, Md. (8/2/13)--SECU, based in Linthicum, Md., will pay $4.75 million during the next 10 years to have the name SECU Arena placed on Towson University's new basketball facility. SECU will pay the university $475,000 annually, the $2.57 billion asset credit union said in a press conference Thursday to announce the deal. That payment also will allow the credit union to have access to one of the multi-purpose rooms and to one of the building's two large corporate suites in the $70 million, 5,200-seat arena. SECU has allocated much of its marketing budget in recent years to partnerships throughout the University System of Maryland to align itself with college students. That is because one of its core areas of concentration is financial education, Carmen David Mirabile, SECU assistant vice president of marketing, told The Baltimore Sun (July 31) ...
  • MILWAUKIE, Ore. (8/2/13)--Search and rescue volunteers at Mount Hood will have better communications, even in white-out conditions, thanks to a $10,000 donation from Milwaukie, Ore.-based Clackamas FCU. The donation purchased nearly a dozen new in-reach radio units for the Mt. Hood Search and Rescue Council. The volunteers trained on the new devices on Monday. The radios use the satellite network, which means the volunteers don't have to rely on cell coverage or any other infrastructure. Rural areas have very little or no infrastructure. The radios also give the command base the ability to direct a rescue team to a missing person during white-out conditions (KOIN.com July 30) ...
  • SUITLAND, Md. (8/2/13)--Andrews FCU based in Suitland, Md., has selected Jim Hayes as its new CEO. Hayes has served as interim CEO since September, the $900 million asset credit union said Thursday.  "With his extensive experience and proven dedication to Andrews FCU, Jim will be a strong leader as the credit union continues to grow and reach out to more members within the communities we serve," said Gen. Frank Cardile, board chairman. Hayes joined the credit union in 2010. The 105,000-member credit union said it had one of its best performing years in 2012, attracting 7,000 new members and more than doubling its loan portfolio.  Hayes previously served as senior vice president of business development and marketing at Western Corporate FCU before becoming chief financial officer in 2008 ...

NEW: CU Loans Up, Savings Down In June

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MADISON, Wis. (8/2/13, UPDATED 1:30 p.m.. CT)--Credit union loans outstanding increased in June, while savings balances dropped, according to the June monthly sample of credit unions by the Credit Union National Association.

Credit union loans outstanding grew 0.8% in June and 2% during the first half of 2013. Fixed-rate first mortgages led loan growth, rising 1.7%, followed by used-auto loans (1.6%), new-auto loans (1.5%), unsecured personal loans (1.2%), and credit card loans (1%). Adjustable-rate mortgages, home-equity loans and other mortgages declined 1.4%, 1.1%, and 0.7%, respectively.

Credit union savings balances dropped 0.4% in June, compared with a 0.8% increase in June 2012. Individual retirement accounts increased 0.8% and regular shares and money market accounts grew 0.4% and 0.1%, respectively.  Share drafts (3.9%) and one-year certificates (1%) each declined.

Regarding asset quality, credit unions' 60-plus-day delinquency rate has remained at 1% during the past five months.

With loan growth outpacing savings growth during June, the loan-to-savings ratio increased from to 67.5% in June from 66.7% in May. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--was 19% as of June 2013.

Total credit union membership grew 0.2% during June to 97.6 million.

The movement's overall capital-to-asset ratio remained at 10%, while the total dollar amount of capital is $110 billion.

Monday's News Now will have a CUNA economist's analysis of the data.

Gov. Cuomo Signs New York ATM Disclosure Bill

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ALBANY, N.Y. (8/2/13)--New York Gov. Andrew Cuomo Thursday signed credit union-supported legislation that eliminates the requirement of physical fee disclosures on ATMs and brings state law into conformity with the federal law signed last December by President Barack Obama.

The Credit Union Association of New York said it has been advocating aggressively for the state legislation, citing burdensome ATM fee disclosure regulations that created legal and financial issues for many credit unions.

The Assembly bill was introduced by Assemblywoman Annette Robinson (D-Metropolitan), and Sen. Joseph Griffo (R-Utica-Rome/Central) introduced the Senate bill.

"We commend Gov. Cuomo, Assemblywoman Robinson and Sen. Griffo for their outstanding leadership and support on this important issue," said CUANY President/CEO William J. Mellin. He acknowledged "the grassroots efforts of many credit union leaders, which played an important role in this legislative victory."

Credit unions and other financial institutions across the nation had experienced nuisance lawsuits from people who would remove the notices from the ATMs, then claim disclosure violations. The Credit Union National Association and state leagues advocated strongly for an amendment to the Electronic Funds Transfer Act, and the Consumer Financial Protection Bureau in March implemented a rule to eliminate redundant ATM disclosures.

CBSI Paper: Investment Relationship Boosts Loyalty 40%

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MADISON, Wis. (8/2/13)--An investment relationship with a credit union increases member loyalty by more than 40%, which helps cement the overall member relationship and lock in additional years of revenue from credit union services, according to a white paper published by CUNA Brokerage Services, Inc.
 
"The Opportunity for Credit Unions in Investment and Life Insurance Services," based on research and analysis by Kehrer-Saltzman and Associates, examines key demographic and financial characteristics of credit union households and how they use financial service providers.
 
Almost two-thirds of credit union member households surveyed would prefer a credit union to be their primary place to bank if it offered a full range of financial services, the paper said.
 
Once a credit union has established itself as the primary financial institution for a household, it enjoys a wide loyalty advantage, compared with households that look to a commercial bank for their financial services, the paper said. While 44.2% of all credit union households say they would not consider switching to another financial institution, that number jumps to 63.2% if households have purchased investments from a credit union they consider their primary place to bank. More than half of the credit union member households with purchased investments and life insurance at any credit union say they would not consider switching.
 
"This loyalty influences where the household turns when it seeks financial advice," the paper said. "Households that consider their credit union to be their primary provider are significantly more likely to turn to their credit union for advice about a windfall than are households that consider a bank to be their primary financial services provider."
 
Trust in credit unions is strongly correlated with the purchase of investment or insurance products. Households that purchased these products are 62% more likely than all U.S. households to have a great deal of trust in credit unions.
 
Household that have purchased an investment or insurance product from the credit union they consider their primary source of financial services are 74% more likely to have a great deal of trust in credit unions than the general population.
 
"The immense trust advantage that credit unions enjoy over other financial institutions must be counted among credit unions' true strengths," the paper said. "It also represents an important opportunity for credit unions to leverage their trust advantage to sell more investment and insurance products to their members."

Ill. League Recognized For Work Against Elder Abuse

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NAPERVILLE, Ill. (8/2/13)--Two state agencies have honored the Illinois Credit Union League for its support of legislation protecting elderly credit union members from financial abuse, providing credit unions required training about elder abuse and participating in the Older American Protection Network (OAPN).

The recognition was presented Wednesday by Manuel Flores, acting secretary of the Illinois Department of Financial and Professional Regulation (IDFPR), and John Holton, director of the Illinois Department of Aging, during the Second Annual Summit of the Prevention of Elder Financial Fraud and Abuse.

Flores and Tonya Sweat, consumer compliance policy and outreach director at the National Credit Union Administration, spoke highly of credit unions' efforts to address issues affecting their older members, said the league.

In 2010, the league worked with the two state agencies to negotiate the final version of Senate Bill 3267, which amended the Elder Abuse and Neglect Act. The measure required financial institutions to provide training about recognizing elder abuse for employees with direct member contact.

ICUL also assisted with development of the joint rulemaking to implement the new requirement. The league offers credit unions ongoing training required under the rule and participates in the meetings of the OAPN.

Stakeholders at the state and local level worked with the Consumer Financial Protection Bureau's Office for Older Americans to create and sustain OAPN. It is the foundation for the iFAST (Illinois Financial Abuse Specialist Team), the annual financial summit, and the development of inter-disciplinary protocols and education efforts, all focused on preventing financial abuse.

"This is an excellent example of government agencies and the league successfully working together on behalf of Illinois credit unions and their members," said Stephen R. Olson, ICUL executive vice president and general counsel.

Top 10 News Now Articles for July

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MADISON, Wis. (8/2/13)--An Wednesday article on a U.S. District Court's decision to strike down the Federal Reserve's price caps on debit interchange fees was the most-read News Now article in July. In the article, the Credit Union National Association noted the decision will have "a potentially devastating impact on the ability of small debit card issuers, particularly credit unions, to continue offering this vital payments service to their members and customers."

The Top 10 articles for the month included:
 
10. NCUA Loses Corporate CU Claims Against Barclays Capital
 
WICHITA, Kan. (7/10/13)--Saying that the claims are time-barred, a federal court in Wichita, Kan., today dismissed the National Credit Union Administration's lawsuit against  Barclays Capital over the sale of residential mortgage-backed securities (RMBS) that caused losses to U.S. Central FCU and Western Corporate FCU.
 
9. Even Lawmakers Tweet: 'I Agree#DontTaxMyCU'
 
MADISON, Wis (7/24/13)--The "Don't Tax My Credit Union" message lit up Twitter yesterday--the day the Credit Union National Association declared as DontTaxMyCU Tuesday. And at least two congressmen were willing to join in--tweeting agreement with the "Don't Tax" message, and one adding that credit unions are an "essential banking option" to consumers in his state.
 
8. 'Don't Tax Tuesday' Detailed In New CUNA Video
 
WASHINGTON (7/22/13)--Credit unions and their members are urged to ignite their advocacy efforts tomorrow on "Don't Tax My CU Tuesday" and light up the social media world to get their message across, says today's edition of  "Inside Exchange," the Credit Union National Association's video dialogue on the credit union movement's hottest topics.
 
7. NCUA Reduces 2013 Spending Plan
 
ALEXANDRIA, Va. (7/25/13)--The National Credit Union Administration today approved changes to its 2013 operating budget, reducing that budget by $2.6 million.
 
6. Harland Financial Solutions To Be Sold To Davis + Henderson
 
SAN ANTONIO (7/23/13)--Harland Clarke Holdings Corp. has entered into an agreement to sell its subsidiary, Harland Financial Solutions, to Davis + Henderson Corp. for $1.2 billion in cash.
 
5. NEW From ACUC: Indirect Lending--Yea Or Nay?
 
NEW YORK  (7/2/13)--Do credit unions do a disservice to members via indirect lending? Or is this practice a powerful tool that allows members to obtain loans when and where they want?
 
4. Sen. Brown (D-Ohio) Outlines Upcoming Overdraft Bill
 
WASHINGTON (7/22/13)--Legislation that aims to prevent financial institutions from reordering account deposits and withdrawals to maximize the amount of overdraft fees that may be charged to accountholders was announced by Sen. Sherrod Brown (D-Ohio) today.
 
3. CUNA: Corporate Assessments Should End If Current Trends Continue
 
ALEXANDRIA, Va. (7/26/13)--The National Credit Union Administration approved a corporate stabilization fund assessment of eight basis points (bp) at yesterday's board meeting after reporting on strong performance of the corporate legacy assets. CUNA Chief Economist Bill Hampel believes future assessments may not be necessary, based on that performance as well as housing and economic trends.
 
2. NCUA To Re-align Regional Supervisory Authority In 2014
 
ALEXANDRIA, Va. (7/19/13)--To maximize operational efficiency, the National Credit Union Administration says it will re-align its regional supervision of federally insured credit unions in nine states, effective Jan. 1, 2014.
 
1. Court Rejects Fed Interchange Cap Rule
 
WASHINGTON (7/31/13)--The U.S. District Court for the District of Columbia issued a decision today striking down the Federal Reserve's price caps on debit interchange fees. U.S. District Court Judge Richard Leon said in his ruling that the Fed did not follow congressional intent when it implemented the cap and other changes imposed by what is known as the Durbin amendment.

Study Notes Language Shift In Hispanic Market

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WASHINGTON and FARMERS BRANCH,Texas  (8/2/13)--Credit unions with outreach programs to Hispanics in their communities will note a study that suggests a language shift--from Spanish to English--is occurring among Hispanic adults in the U.S.
 
In 2012, roughly 82% of Hispanics surveyed said they received some of their news in English, up 78% from 2006, according to a study by Washington, D.C.-based Pew Research Hispanic Center. It also found that number who get at least some news in Spanish declined--to 68% from 78% during the period.
 
Nearly one-third (32%) said they get their news exclusively in English, up from 22% in 2006, while those who received their news exclusively in Spanish decreased to 18% in 2012 from 22% six years earlier.
 
Pew says the results confirm that:
  • A growing share of Hispanics speak English well;
  • The immigration rate is slowing so the percentage of Hispanic adults who are foreign-born is declining;
  • The average number of years adult immigrants have lived in the U.S. is longer--20 years in 2011, compared with 16 years in 2000; and
  • U.S.-born Hispanic adults, who are more proficient in English, are increasing.
One of the credit unions taking note of the study is GECU, based in the border town of El Paso, Texas, where 25% of residents are foreign-born and about 80% are Hispanic, said the Cornerstone Credit Union League (Leaguer July 31).

GECU President/CEO Crystal Long said the credit union communicates to the public in both English and Spanish. The $1.7 billion asset GECU has found that older Hispanic generations tend to be Spanish-dominant, but it has more success reaching younger Hispanics by using English, she said.

In communicating with the public, the credit union uses multiple media, but finds the branch is also effective. Having a "strong and visible presence in the community is critical to earning the trust and business of the Hispanic demographic," Long told the league.

GECU will receive the league's Juntos Avanzomas designation and flag--indicating it has demonstrated its commitment to serving Hispanics--on Aug. 28, said the league.

NerdWallet Announces CU Gen Y Contest Winners

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NEW YORK (8/2/13)--Four credit unions made it to the winner's circle in NerdWallet's Credit Union Gen Y Contest, with  Roseville, Mich.-based Christian Financial CU collecting the grand prize--$2,000.
 
The contestants were judged on a "commencement speech" to 2013 graduates that provides  financial literacy advice to Gen Y and a proposal for using the funds awarded in the contest, said NerdWallet.com (July 31).
 
Christian Financial CU proposed a scavenger hunt with clues on Twitter and Facebook for young followers, said NerdWallet. The hunt would introduce the young members to the $270 million asset's products and services, then segue into an in-person scavenger hunt throughout the local community. Members would use photo clues posted by credit union staff to discover locations related to its services.  Christian Financial also proposed producing a series of financial literacy videos to better educate its GenY members.
 
Other winners:
  • Runner up--$1,000: Cooperative FCU, a $10.5 million asset credit union in Woodridge, N.Y., with a team-based Savings Challenge at three youth credit union sites during the school year;
  • Special prize--$1,000: PremierOne FCU, a $199 million asset credit union in Sunnyvale, Calif., which would turn its Credit Zone program into an interactive online community for Gen Y; and
  • Special prize--$1,000: financial One CU, a $58 million asset credit union in Columbia Heights, Minn., for distributing the message, "What's Your Number?" and a QR code to community businesses and schools that leads participants to understanding their credit scores.
For more detail and to view each credit union's financial advice in the "commencement speeches," use the link.

Supplemental Insurance Benefits Topic Of Council Paper

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MADISON, Wis. (8/2/13)--A new CUNA HR/TD Council white paper, "Employee Benefits: The Future is Voluntary," focuses on how credit unions are evaluating and incorporating supplemental insurance programs.
 
It includes information about:
  • Options in the marketplace;
  • Presenting the business case for a supplemental insurance program;
  • The concept of "make or buy"; and
  • Metrics.
The employee benefits landscape has been transformed during the past decade, by burgeoning costs, regulatory changes and new benefits options, said the council. During and after the great recession, employers reduced their benefits budgets and shifted costs and decision making to employees. Organizations have also become more creative in offering competitive benefits that help them to recruit and retain the best workers.
 
Given the risks of self-insurance, the paper notes most credit unions choose to purchase from an insurance company. In the case of life insurance, however, the Business-Owned-Life-Insurer (BOLI) structure can be attractive for credit unions, because payments to the fund--as well as capital appreciation--are tax-free. While interest rates on investments remain low, the BOLI offers a better return on investment, the paper said.
 
Choosing the right vendor partner for supplemental insurance requires due diligence, including seeking recommendations from credit union peers and state leagues, and assessing insurance carriers' financial strength, the council said.
 
This is the second white paper in a series about employee benefits, and it is a follow-up to 2012's white paper "Credit Union Benefits Programs: Meet Employees' and Your CU's Financial Needs."
 
To access a copy of the paper, use the link.

Co-op Bank, CUs In $42.3M Real Estate Loans In Alaska

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ARLINGTON, Va. (8/2/13)--National Cooperative Bank (NCB), a financial services company providing banking products to cooperatives nationwide, has partnered with two credit unions and a local bank to secure $42.3 million in financing for two commercial real estate transactions in Alaska.
 
"These transactions are the perfect example of how member-owned organizations--like NCB and credit unions--are successfully partnering to provide creative financing solutions to entities across the country," said Steven Brookner, NCB president/CEO.
 
The bank completed the purchase of a $7.25 million loan participation in a $12.25 million loan facility with $5.16 billion asset Alaska USA FCU in Anchorage for the refinancing of the KeyBank Center Midtown, also in Anchorage. The building originally was purchased in 2012 by the Bligh Island Corp., a fully-owned subsidiary of The Tatitlek Corp., an Alaska Native village corporation with 329 shareholders at Prince William Sound.
 
NCB also arranged a $35 million commercial real estate loan for 188 West Northern Lights, an office building in Midtown Anchorage. The loan will be used to refinance existing debt, fund tenant improvements and fulfill leasing commissions. In the transaction, NCB partnered with a California-based credit union and an Alaskan bank for the financing package.
 
NCB "has a long-standing relationship with native communities, like the Tatitlek shareholders, and we're proud to be a consistent source of financing for these communities who share a similar cooperative structure to NCB and credit unions," Brookner said. "It's NCB's mission to promote the growth and strength of member-owned organizations, and providing needed funding to our Alaskan Native customers is another opportunity to support this effort."