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CU System Archive

CU System

Two CUs receive first-place Calif. Desjardins awards

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RANCHO CUCAMONGA, Calif. (8/23/10)--Two California credit unions received first-place in their asset categories in the state-level Desjardins Youth Financial Education Awards, announced the California Credit Union League. Travis CU, Vacaville, and Mission SF FCU, San Francisco, were recognized for their leadership on behalf of youth financial literacy. Travis won in the $500 million and above asset category for its collaboration with a community leader coalition to connect Solano County foster youth by age 25 to opportunities to help them succeed as adults. It provided financial responsibility tools through the Money Matters program and helped 50 youth become more financially stable with training and a savings account. Mission won in the less than $50 million asset category for its Prize-linked Accounts for Youth (PLAY) program. PLAY provided children and youth with a free savings account and hands-on instruction in personal finance and building a savings habit. Five youth groups and about 50 youths participated in a pilot program this year. Each youth set a personal savings goal and learned finance basics. The credit unions reached out to an underserved and low-income population in need of financial literacy education, said Catherine Arra, league credit union growth manager and state Desjardins Award administrator. The two credit unions will advance to the national award competition presented by the Credit Union National Association. A third credit union, Redwood CU, Santa Rosa, received an honorable mention in the $500 million and above category for providing the National Endowment for Financial Education's High School Financial Planning Program to area high school students.

IMarketWatchI on refinance scams advises Join a CU

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CHICAGO (8/23/10)--A MarketWatch article warning consumers about loan-modification and auto refinance scams told readers having trouble with their auto loans to "Join a credit union." Thursday's Consumer Confidential column by Jennifer Waters described an Illinois man who got scammed by an auto finance company claiming it could reduce his $700 a month car payment to about $400 a month. His initial contacts with the company were easy, but after he paid a couple of fees, the company essentially disappeared. He took the matter to the Better Business Bureau, which helped him get an apology and his money back. The company has gone into receivership and is no longer doing business, said the article. The bureau is warning consumers to be picky and do the legwork before signing up for a company that claims it can get them out of a bad deal, the article said. "Instead, try a credit union, a group like CARS, the Consumer Federation of America or the National Foundation for Credit Counseling," said Waters. She offered several tips, including joining a credit union. "For the $5 or so membership fee, you can have your credit union review the loan and offer advice," she wrote. For the full article, use the link.

IMainstreet.comI Banks boost biz lending to keep CUs out

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WASHINGTON (8/23/10)--A blog on Mainstreet.com about credit unions' call to lift the cap on small business lending notes that big banks have begun lending more to small business to keep credit unions from business lending. Credit Union National Association President/CEO Bill Cheney says raising credit union's member business lending limit to 27.5% from 12.25% would pour $10 billion into the small business economy, creating 108,000 jobs in 2011, said the article, entitled "Credit Unions Call for Small Biz Lending Lift." While Congress "seems open to" the idea of lifting the member business lending cap as proposed in Sen. Mark Udall's (D-Colo.) amendment to the small business jobs bill, the "big banks don't like the idea," said the blog. "Bank of America and Wells Fargo have already started lending more to small businesses. So critics can say any move to raise lending limits for credit unions wouldn't have the impact CUNA says it would," the item said. "Raising the current cap on credit unions' business lending is an action which would benefit only half of one percent of all credit unions in the nation," said Rose Oswald Poels, senior vice president and counsel of the Wisconsin Bankers Association, the article reported. "Credit unions historically have not been big lenders to small business--CUNA estimates that only 23% of all U.S. credit unions offer commercial lending services," she added. The report cites a National Small Business Association study that indicates 41% of business owners can't get financing, an increase over the 22% who couldn't get financing in 2008. It also discusses points made in a recent CUNA white paper that cites "problems with the current small business financing framework in place, largely built by big banks." The points made:
* Commercial banks have no such business lending limits, and safety and soundness concerns are unfounded; * Small businesses find it increasingly difficult to obtain credit due to massive consolidation in the commercial banking arena, and those who obtain credit complain the banks' loan terms are less attractive; and * Current member business lending limits deter new entry into business lending.
For the full article, use the link.

IEntrepreneurI CUs come to the rescue on biz loans

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WASHINGTON (8/23/10)--When their bank slashed the credit limit on their business credit card despite on-time payments, the partners of WheretoFindCare.com, a Ypsilanti, Mich., healthcare information service, moved their accounts to a local credit union and found all the services the small business needed, according to Entrepreneur magazine (Aug. 20). There, they found all the services the small business needed, said the article, entitled, "Credit Unions to the Rescue?" Another small business owner, Tom Hoebbel of Brooktondale, N.Y., described how a loan from his credit union enabled him to expand his photography business to online video services. Hoebbel needed $25,000 to purchase new equipment and found the loan his county offered took too long. The credit union helped Hoebbel apply for an interim Small Business Administration loan. This let me move much more quickly [into Web-based video sales] than if I had to wait for the county loan, which ended up taking more than nine months," he told the publication. Hel decided to work with the credit union because of its free business checking services, which saves him $15 to $20 a month, and because if offered a 12-week business course to its small-business members. Credit union lending to members for business purposes is a fast-growing segment, up 10% in 2009, Pat Keefe, vice president of communications and media outreach at the Credit Union National Association (CUNA), told the publication. The average loan is $220,000 and credit unions are limited to lending 12.25% of their assets, but a measure in Congress would increase that limit and pour $10 billion in new loans into small businesses, he said. The level of personal service that Hoebbel got is a definite advantage of credit unions, said Keefe, who noted credit unions' lower rates and stringent lending standards. In 2009, credit unions had a lower charge-off rate in business loans than banks, 0.59% vs. banks' 2.36%, he added. CUNA provided other statistics for the article, and the article referred readers to CUNA's credit union locator. For the full article, use the link.

CUs small loans build N.C. Latino businesses

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DURHAM, N.C. (8/23/10)--Latino Community CU (LCCU) in Durham, N.C., is trying to help accelerate the growth of Latino entrepreneurship in the area by introducing a microlending program to increase the number of small businesses. The $91.5 million asset LCCU--known as La Cooperativa Latina de Credita in Spanish--wants to demonstrate that Latino businesses are a good investment because they usually provide basic services that are barely affected by fluctuations in the economy (newsobserver.com Aug. 17). The credit union loans up to $10,000 and avoids high-risk businesses such as restaurants. Instead, it opts for businesses with lower overhead such as construction, janitorial and landscaping services, the newspaper said. “I would hope that what we are doing is not so strange but is normal,” Alejandro Sanchez, LCCU organizational development director, told the publication. “The whole society, in one way or another, needs [the small businesses].” Lack of credit history was one of the greatest barriers for Latino startups, according to a 2006 study conducted by the University of North Carolina’s Kenan-Flagler Business School, the paper said. LCCU’s backing by State Employees’ CU (SECU), Raleigh, N.C., and Self-Help CU, Durham, has made it a national model, according to credit union executives nationwide, the paper reported. SECU provides accounting, auditing and ATM and data-processing access. Self-Help lent technical assistance and affordable rent to LCCU when it started 10 years ago. To read the article, use the link.

Superior CU offers accounts for Kitty Fido

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COLLEGEVILLE, Pa. (8/23/10)--Superior CU, Collegeville, Pa., is offering savings products for pets. Superior CU is offering pet savings accounts with a 5% annual percentage yield on the first $500. A $5 deposit is required. Even though dogs don’t have Social Security numbers, the credit union is still opening accounts for them with their owners, said Joseph Gimble, vice president of operations (Pottsmerc.com Aug. 19). The accounts are available for any pet, including dogs, cats, horses and birds. Members are asked to bring a photo of their pet as identification when they open an account. The photos will then be added to a gallery on www.BankwithBella.com. Superior’s new site, www.BankwithBella.com, has information about its pet accounts, low-interest pet loans for pet-related business--like a vet bill--and discounts for pet insurance. The site is named after Bella, the program’s mascot. Bella is a beagle/lab mix who belongs to Kim Miller, Superior CU lifestyle adviser and who goes to work with Miller each day. Members can upload pictures of their pets to the website, read Bella’s blog and learn more about pet-related services at the credit union (Life is a Highway Aug. 20). Pets also are welcome at Superior’s offices. The $37-million-asset credit union gives away dog treats and doggie bags with water dishes and food. Superior also plans to open a dog park that will be available to the community.

Three re-elected to New Jersey league board

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HIGHTSTOWN, N.J. (8/23/10)--Three incumbents were re-elected to the New Jersey Credit Union League board of directors last month. Each of the three incumbents was unopposed (The Daily Exchange Aug. 20). They are:
* Tracy Sussman, Mid-State FCU, Carteret, for tier A; * Louis Vetere, Garden Savings FCU, Parsippany, for tier B; * Leo Ardine, United Teletech Financial FCU, Tinton Falls, for tier C.
The election results will be formally announced at the league annual meeting.

75 of Wisconsin voters polled support lifting MBL cap

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PEWAUKEE, Wis. (8/23/10)--The majority of Wisconsin voters polled by the Wisconsin Credit Union League--75%--say they would support an amendment before Congress to make more credit available to Wisconsin companies through credit unions. An even larger majority of those polled--84%--say they’d be more likely to support the measure knowing it would create $389 million of new credit for Wisconsin firms, add 4,229 jobs in the state and cost taxpayers nothing. The league was referring to an amendment by U.S. Sen. Mark Udall (D-Colo.) to the Small Business Lending Fund Act, H.R. 5297, which is stalled in Congress. The Udall amendment would raise the cap on credit unions’ member business lending to 27.5% of assets from 12.25% of assets. Federal regulators support the measure, in part because of credit unions’ history of responsible business lending, said the league. As of March, the delinquency rate for Wisconsin credit union business loans was 2.23% compared with banks’ 2.77%. Credit unions’ loss rate--at 0.43%--was 30% lower than that of state banks, said the league. The measure would be a boon for small businesses with modest credit needs that find it difficult to find financing, the league said. Credit unions often will grant smaller loans. The average credit union business loan in Wisconsin is just $174,772. Most credit union business loans go to households with incomes below $50,000. The Wall Street Journal reported in March that bank lending has declined at the sharpest rate since 1942. In Wisconsin, banks’ business lending decreased 19% from March 2009 to March 2010. During that period, Wisconsin credit unions increased their business lending by 11%, but many have maxed out what they can lend to businesses because of the federal cap. Udall’s amendment mirrors legislative language sent to federal lawmakers by the Treasury earlier this year, and is backed by the Obama administration. The Credit Union National Association supports raising the cap.

Minnesota names Maxwell Herring Desjardins award winners

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ST. PAUL, Minn. (8/23/10)--The Minnesota Credit Union Network (MnCUN) has announced its statewide winners of the 2010 Dora Maxwell, Louise Herring and Desjardins competitions. All three awards are sponsored by MnCUN and the Credit Union National Association. Winners of the Dora Maxwell Social Responsibility Award are:
* Star Choice CU, Bloomington, $20 million to $50 million assets category; * Greater Minnesota CU, Mora, $100 million to $200 million; * TopLine FCU, Maple Grove, $200 million to $500 million; and * Central Minnesota FCU, Melrose, more than $500 million.
Winners of the Louise Herring Award for Philosophy in Action are:
* Star Choice CU, less than $50 million in assets; and * Affinity Plus FCU, St. Paul, more than $250 million.
The Desjardins Youth Financial Education Award was won by Greater Minnesota FCU, in the $150 million to $500 million asset category. “This year, credit unions around the state were dedicated to helping Minnesotans persevere through the economic recovery,” said Mark D. Cummins, MnCUN president/CEO. “The 2010 award winners demonstrated extraordinary dedication to helping their members and communities move forward toward a brighter future.”

Crashers meet in New York

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ALBANY, N.Y. (8/23/10)--Fifteen young credit union professionals gathered in Albany for its first-ever Crash meet-up at the state level. It was coordinated by the Credit Union Association of New York’s Young Professionals Commission (YPC).
Click to view larger image Fifteen young credit union professionals gathered in Albany, N.Y., for the state’s first Crash meet-up. The event was coordinated by the Credit Union Association of New York’s Young Professionals Commission. (Photo provided by the Credit Union Association of New York)
Crash is the brainchild of Brent Dixon, young adult adviser at the Filene Research Institute. Crash started as a subversive conference for credit union professionals under 30 that met around conferences such as the Credit Union National Association’s (CUNA) Governmental Affairs Conference and The 1 Credit Union Conference, which was jointly sponsored by CUNA and the World Council of Credit Unions in July. After conversations with a group of “crashers,” Dixon realized that for Crash to work as a place where young professionals could get together to learn, network and converse with little financial commitment, there had to be movement on local levels. At the meet-up, Dixon offered an overview of Crash and information about WOCCU and Filene. Allison Barna, the association’s community development coordinator, led a conversation about the credit union community. She pointed out that credit unions are not just local; they also are national and global, and the movement presents numerous opportunities for involvement. Participants expressed a desire to see what is going on outside of their credit unions, and to use similar networking and sharing opportunities to help find their niche in the movement and potential career opportunities. The association plans more Crash meet-ups statewide, including a second one in Albany. The gatherings are free to participants with support from state association chapters. The YPC was formed earlier this year to develop strategies and practices to assist the association and credit unions in recruiting young adults as employees and volunteers. It also aims to develop and promote them for leadership positions within the New York credit union community. The commission includes about 30 credit union employees under the age of 35 from across the state.

CDFI Fund recipients Fund will help biz loans

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NEW YORK (8/23/10)--Thursday's announcement that 21 credit unions were among the 180 community development financial institutions (CDFIs) to receive CDFI Fund awards means that credit unions can step into more business lending since banks have stopped lending, said one of the award recipients.
Click to view larger image The National Federation of Community Development Credit Unions was among the recipients of the U.S. Treasury's Community Development Financial Institutions (CDFI) Fund awards in New York Thursday. From left are: U.S. Rep. Jose Serrano, U.S. Rep. Nydia Velazquez, federation President/CEO Cliff Rosenthal, and Treasury's CDFI Fund Director Donna Gambrell.
The U.S. Treasury Department's CDFI Fund announced $104.9 million in awards to 180 CDFIs at a restaurant financed by New York City's Lower East Side People's FCU, which received a $750,000 award. "The most important thing about this grant is that it will enable us to make more funds available to businesses all over the five boroughs of New York," said Linda Levy, CEO of Lower East Side Peoples FCU. "We have almost tripled our small business lending this year, and a good part of that is due to the fact that the banks have stopped lending. I think we all know this and we're all very sorry about this, and we have been trying very hard to step into the fray, but it's been hard because we don't have a lot of capital, so this is really going to help us help the community," Levy added. Also receiving a $750,000 award this round was Bethex FCU, Bronx, N.Y. Joy Cousminer, president/CEO of Bethex, explained that while some of the award would be used to expand lending to the 60-plus small businesses the credit union serves, the bulk will provide a new teller area with three windows, instead of two, and new bulletproof glass to allow members to speak without having to bend down and shout through the cash opening.
Click to view larger image U.S. Rep. Jose Serrano presents Bethex FCU President/CEO Joy Cousminer with a $750,000 award from the U.S. Treasury Department's CDFI Fund. (Photos provided by the National Federation of Community Development Credit Unions)
National Federation of Community Development Credit Unions also was among the recipients, receiving $750,000. "The CDFI Fund is an absolutely unique source of innovative funding, which has enabled us as a national entity to support hundreds of low-income credit unions across the U.S.," said federation President/CEO Cliff Rosenthal. "We've been doing this to help them build their capital during these very difficult times and to allow them to recycle their capital for additional lending," he added. He noted that this round of funding was a more equitable distribution, with some of the largest number of awards to community development credit unions in recent years, including various credit unions new to the fund. Of the 21 credit unions receiving awards in this round, 18 are members of the federation.