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Study FIs need to improve prepaid gift card sales

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NEW YORK (8/25/08)--Financial institutions need to improve their marketing of prepaid gift cards, according to a study by PULSE. The Pulse 2008 Debit Issuer Study, which surveyed 62 financial institutions including credit unions, found that only 1% of consumers buy Visa and MasterCard-branded, open-loop prepaid gift cards from financial institutions. However, 61% of financial institutions offer the cards and an additional 16% plan to enter the market. Open-loop prepaid cards are distributed better at heavy traffic locations such as supermarkets, convenience stores, and malls, says the Network Branded Prepaid Card Association (ATM & Debit News Aug. 21). The PULSE report's author, Tony Hayes, director of New York-based management consulting firm Oliver Wyman, says banks are not the best retailers. Banks, especially large ones, do better with payroll, health savings account and flexible spending account cards, the study said. The prepaid card association said many consumers also perceive giving gift cards as giving cash and they don't prefer to give cash. The association suggested that financial institutions promote their gift cards on peak gift-giving holidays, such as Christmas and Father's Day.

Bankers file brief ask for FOM reversals

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HARRISBURG, Pa. (8/25/08)--Bankers have filed a brief in the U.S. District Court in Pennsylvania asking that approvals of three field-of-membership (FOM) expansions be set aside and returned to the National Credit Union Administration (NCUA) for more review. NCUA had approved FOM expansions involving three six-county communities in central Pennsylvania in 2003. The brief was filed in response to U.S. District Court Judge Yvette Kane’s decision in July that NCUA’s record was insufficient to sustain the agency's decision to grant the six-county-area, according to the Pennsylvania Credit Union Association (Life is a Highway Aug. 22). Bankers are asking the court to return AmeriChoice FCU, Mechanicsburg; Members 1st FCU, Mechanicsburg; and New Cumberland (Pa.) FCU to their original fields of membership. The document filed by the bankers does not ask for the credit unions to divest the members who were added as a result of the six-county area approved by NCUA. NCUA and the credit unions’ responses are due Sept. 4.

CUs get a lucky break in Fay members not so lucky

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BREVARD COUNTY, Fla. (8/25/08)--Most Florida credit unions were luckier than some of their members during the Tropical Storm Fay's record-breaking deluge in the state last week. Friday credit unions in hard-hit Brevard County were operating again, while those farther north were closed in preparation for the storm to re-enter the state. "You know the saying, 'It's raining cats and dogs? Well, here it was raining elephants and gorillas," said Sara Stern, vice president of marketing at Community Educators CU, Rockledge. "We even had koi fish in the streets." "People could get around in some areas with four-wheel drives," Stern told News Now, adding that she canoed from her home to the street. "My home was an island," she said. Seven branches of Community Educators are located in Brevard County, which has 72 miles of coastline. The branches closed Tuesday and reopened at noon on Thursday. "We found no flooding damage, but a number of people who work in the facilities have damage to their homes," said Stern. "A few homes are flooded. My home was an island." Stern's mother, a credit union member, found six inches of water standing in her home and has moved in with Stern. The credit union will announce Tropical Storm Loans this week for members who need help. "We've launched this for members in the past hurricanes. It's a low-rate loan up to $3,000 to help bridge the gap before insurance kicks in," said Stern. The credit union's executive team is meeting today to determine the loan's rate. "The last time we had the loan, 400 members took advantage of them," she added. To keep communications open with members during the storm, the credit union updated its phone message system and website two to three times a day. "We tried to give alternative ways members could access their money," including ATMs and Internet banking. When the credit union opened Thursday, "members were waiting at the door," Stern said. Not all employees made it back to work on Thursday and the credit union operated through its drive-through. Everyone was at work Friday. "Everyone is helping everyone else, just like a family," Stern said. The credit union's business continuity plan worked. "Overall, the electronic services were fine and kept things going. Having connectivity to the website was very important because everyone needed access to their account and account information," Stern said. Every day, the executive team caucused and individuals were assigned their responsibilities. What would Stern change about the process? "I'd make sure to do more education on the front end for members to get them to prepare for the storm. I'd tell them to have cash and prescriptions ready when a storm is coming," she said, adding, "We learned a lot through the past hurricanes," she said. "There's not a lot of wind damage. It's more the flooding. But our branches did very well," Stern said. "Our new branch in Palm Bay came through fine." Many credit unions News Now contacted reported no damage. “It was a non-event [for us],” said Thomas Randle, CEO, Sarasota Coastal CU. “There was very little rain and wind.” Several Jacksonville credit unions were closed. VyStar CU had a message on its answering service stating that the credit union was closed and would re-open Saturday at 9 a.m. VyStar planned to have extended hours if needed. All ATMs and direct deposit services were in operation, the credit union said. Florida Telco CU said it would re-open Saturday at 9 a.m. First Florida CU planned to re-open today. Container Mutual CU, Fernandina Beach, also was not open Friday when contacted by NewsNow. Space Coast CU, Melbourne, said its primary issue wasn’t building damage, but making sure employees could get to work. “Some employees had damage,” Meredith Gibson, senior vice president of marketing, told News Now. The credit union anticipates that its members will need assistance. “This is often a wake-up call to people who don’t have flood insurance,” she said. “This type of situation is always a wake-up call of what types of things insurance covers.” Because Fay is a tropical storm and was never declared a hurricane, member's hurricane insurance deductibles will not apply, she added. There was no flooding at the credit union’s 31 branches. Space Coast’s business continuity plan went as expected. The credit union has a central resource for employees that is updated by date and time. Space Coast also uses its website and phone greeting to communicate with members. “It was a good opportunity to see how current plans work together,” she said. “Living in a hurricane area, we’ve prepared for this. It doesn’t throw us for a loop,” she said.

Irelands CUs help fight poverty in Ghana

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DUBLIN, Ireland (8/25/08)--Northern Ireland credit unions are participating in the Irish League of Credit Unions' (ILCU) campaign to fight poverty, malnutrition, HIV and AIDS in Ghana--a country in Africa. ILCU is providing nearly US$89,000 plus technical assistance to support the development of credit unions in Ghana (Belfast Telegraph July 28). Some of the funding will be used to help credit unions in Ghana become self-sustaining units that support poor local communities, according to Kevin Helferty, chairman of the ILCU Foundation, which provides assistance in developing credit unions in Third World countries. ICLU contributes more than $740,000 annually to the foundation’s efforts worldwide.

Two CU leaders in Texas tout CU difference

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FARMERS BRANCH, Texas (8/25/08)--Two credit union leaders were featured in a Texas newspaper about the credit union difference. Kay Rankin, president, Ward County Teachers CU, Monahans, Texas, and Carolyn Jones, manager, Complex Community CU’s Monahan branch, were featured in the Aug. 13 issue of The Mudville News, says the Texas Credit Union League (LoneStar Leaguer Aug. 22). “From the outside, a credit union and a bank appear similar, with both offering basic financial services, but it is within our corporate structure that we differ,” Rankin told the newspaper. Rankin and Jones explained credit unions’ non-profit status, and their mission to help people. They also assured the paper that members’ money is safe at a credit union and is backed by the National Credit Union Administration Share Insurance Fund. Credit unions avoided the subprime mortgage mess and have operated responsibly, Rankin said.

CUNA Mutual takes in child care group after fire

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MADISON, Wis. (8/25/08)--CUNA Mutual Group is offering a temporary home for Community Coordinated Child Care (4-C) after the child care group’s building was destroyed by fire. 4-C began conducting business Aug. 18 at CUNA Mutual in Madison, Wis. CUNA Mutual has converted a meeting room and provided work stations, computers, printers, fax machine and technology support to 4-C staff members until they can move into permanent office space. “In a matter of hours, we were set up with temporary computers, Internet and phone lines, all of which have helped to prevent service interruption to our clients,” said Jody Bartnick, 4-C executive director. “We are pleased to be able to help 4-Cs serve their clients so quickly after the devastating fire,” said Steve Goldberg, CUNA Mutual Foundation executive director. “They have such a positive impact on child care, since they provide training and support for most of the day care facilities in southern Wisconsin.” 4-Cs expects to have office space arranged in a few weeks. Contributions to help 4-Cs can be made on its website.

CU System briefs (08/22/2008)

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* TULSA, Okla. (8/25/08)--No one was hurt when an armed man robbed a Tulsa branch of the Credit Union Service Center Inc.'s shared-branching network and fired a shot into the wall as he exited the building. The bullet went through the wall and out the building, and entered the ceiling of a Taco Bell restaurant next door (Associated Press and Tulsa World Aug. 22). The man entered the credit union at about 6:20 p.m. Thursday and demanded money. He was last seen getting into a black SUV with a license plate of 910-JAO, said police. A second man was waiting in the vehicle … * FARMINGVILLE, N.Y. (8/25/08)--U.S. Rep. Timothy Bishop, left, (D-N.Y.) was keynote speaker at a breakfast meeting attended by Long Island credit union executives last week. Robert G. Allen, right, president/CEO of Teachers FCU, thanked the congressman for his active support on credit union issues. Bishop spoke about the economy, the housing crisis, and energy, and then answered credit unions' questions. Other executives attending represented Sperry Associates FCU, People's Alliance FCU, Oceanside Christopher FCU, Nassau Financial FCU, Nassau Educators FCU, Island FCU, Bethpage FCU, and the Credit Union Association of New York. (Photo provided by the Credit Union Association of New York) … * HARRISBURG, Pa. (8/25/08)--U.S. Rep. Paul Kanjorski (D-Pa.) visited three credit unions in the Wilkes-Barre area Thursday. He was accompanied by Pennsylvania Credit Union Association President/CEO Jim McCormack and Governmental Affairs Specialist Christine Seitz (Life is a Highway Aug. 22). Visits were to Choice One Community FCU, headed by CEO John Kebles; UFCW FCU, headed by CEO John Hayduk; and Cross Valley FCU, headed by CEO Len Shimko. Kanjorski met with staff, directors, and members at the first two credit unions and discussed local economic concerns and issues impacting credit unions. At the third, Board Chair Richard Shields introduced Kanjorski and announced the credit union's new community charter, covering Lackawanna, Luzerne and Wyoming counties … * MONTEREY PARK, Calif. (8/25/08)--E1 Financial CU, a $361 million asset credit union based in Monterey Park, participated in U.S. Rep. Hilda Solis' (D-Calif.) annual Community Resource Fair Aug. 16. The credit union has a new branch in East Los Angeles and was well-positioned for the event. More than 500 guests and families attended. The event showcased information and resources, including foreclosure prevention and financial education programs available at the credit union's East Los Angeles branch. From left are E1 Financial representatives Yanni Jucaban, Liza Grajeda, Luis Cisneros and Vada Vanettes, and Holis. (Photo provided by E1 Financial CU) … * ST. LOUIS (8/25/08)--12 Missouri credit unions have achieved the "You Make the Difference" Advocacy Program rewards. The newest platinum award recipients are Electro Savings CU, St. Louis, and United CU, Mexico. They reached platinum--the highest level--by taking part in activities in five key areas: political advocacy, contributions, financial education, philosophy in action, and community involvement, says the Missouri Credit Union Association (CourierNet Aug. 20) … * SAN DIEGO (8/25/08)--To reduce its ecological footprint and conserve energy, Cabrillo CU has turned up the thermostat and temporarily changed its dress code to shorts. It changed the code from "standard business" to "very business casual," allowing staff to wear cropped pants or shorts with credit union-logo shirts during summer. "We haven't forgotten the energy crises of the past, and we want to help out," said CEO Robin Lentz. "It also raises our staff members' morale as they enjoy dressing casually for a while." From left are Cabrillo employees Darcy Keener, loan account specialist; Julie Smith, lending manager; Kristin Halvin, card service and call center manager; and Marilyn Silveira, file clerk. (Photo provided by Cabrillo CU) … * MEDFORD, Ore. (8/25/08)--Rogue FCU is the state winner of the 2008 Oregon Governor's Outstanding Employee Volunteer Program. The award is presented by the Oregon Volunteers, State Commission for Voluntary Action and Service. Rogue, which also won a regional award, participates in numerous projects throughout Jackson, Josephine and Klamath counties. It encourages employees to participate in at least four hours of community service every year. Many of its employees have exceeded 100 hours of personal time volunteering each year. In 2007, staff volunteered more than 9,200 hours combined for projects such as Access Food repacking, United Way Day of Caring, and various painting projects …

Membership Growth Series North East Texas CU

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LONE STAR, Texas (8/25/08)--By using “very direct forms of marketing,” striving to be the first in the area in technology, and designing programs that target specific groups, North East Texas CU (NETCU) has realized solid membership growth, which it projects will continue. The $94 million asset, Lone Star, Texas-based credit union experienced 5.7% membership growth from 2006 to 2007, and projects 8.2% growth this year. NETCU is a community credit union serving members who live or work in Morris, Marion and Upshur counties, and anyone who lives, works or attends school in Titus County. This is the eighth installment of News Now’s Membership Growth series of interviews with fast-growing-membership credit unions. The series is part of an initiative of the Credit Union National Association (CUNA) Membership Growth Task Force. The series focuses on fast "organic" membership growth, not growth by merger or indirect loans. The task force, chaired by Dick Ensweiler, president of the Texas Credit Union League, was convened at the request of CUNA's Immediate Past Board Chair Allan Kemp McMorris. Its purpose is to investigate, report on, and encourage credit unions to embrace opportunities, techniques and processes that will increase credit unions' membership retention and growth. By conducting direct visits with small groups, and participating in community events both formal and informal, NETCU has successfully reached out to members, Kay Stewart, president/CEO of the credit union, told News Now. “We are located in a rural area, and we found that these very direct forms of marketing have better served us than print and broadcast advertising,” Stewart explained. “We tried TV commercials, but the TV viewing area is so broad that the advertising went out of our area. And it was so expensive. It wasn’t cost effective. “The key for us is working in the community and community events,” she added. “For example, it is raining today. So we are handing out free rainwear containing our credit union logo. We also hand out our rainwear at football games. Whatever fits with an event, we try to get involved somehow.” The credit union targets Hispanics, youth and small businesses, and “anyone else we can find,” Stewart said. For Hispanic members, NETCU uses financial literature and loan applications printed in Spanish, and an audio response system that allow members to choose English or Spanish when they call in for information or to check on accounts. “We also have Hispanic employees at all our branches and a Hispanic loan officer,” Stewart said. Regarding the youth market, the credit union has always offered a youth savings account, but also started a program called “Dollar Dog,” for kids up to 12 years old, in three schools. Now it is in seven. One NETCU employee dresses up in a Dollar Dog costume and goes into schools to tell students about NETCU’s youth savings program. Students in this age group can open a savings account with as little as $5 and can make deposits as small as 25 cents. They also can go the NETCU website and play games. Students initially receive program T-shirts, and the credit union goes to the schools once a month to take students’ deposits and present students with little gifts for making the deposits. From January to May of this year, 150 new youth members signed up, and their average account balance was $100, Stewart said. Two new NETCU youth programs will start this fall. One is called Cha-Ching, which targets 13- to 17-year-olds. The program will feature a website for participants to download music, and will teach them how to open a checking account. As part of the program, credit union employees also will go to schools to teach financial literacy using materials from the National Endowment for Financial Education program. NETCU also will introduce the Edge Account program in the fall for 18- to 24-year-olds. The program will offer young adults their first credit cards and first loans, and will in essence be a bridge into financial adulthood. All three youth programs will have spots on NETCU’s website, which allows participants to enhance their financial education online. The credit union also goes directly to small businesses to recruit members. “We’ll go anywhere to get in front of people,” Stewart said. “We buy lunch for employees at their place of work and make presentations with PowerPoint. We have had a lot of success with this. We’ll sign people up for the credit union on the spot. ” Not only does NETCU attempt to attract employees, it also tries to attract small businesses as a whole. “We have maxed out our small-business loans, and we’ve started our own CUSO (credit union service organization) to make more business loans,” Stewart said. NETCU became a community credit union in 2000 when it went from a federal to a state-charter to serve a broader area of people, Stewart said. NETCU has always strived to be the first in technology in its area, and this is a key priority for the credit union. “We’ve been the first to use ATMs and an audio response system,” Stewart explained. The credit union also sends e-alerts to notify members when their accounts drop down to a certain amount so they don’t get overdrawn. Another technology first for NETCU is its online banking product called Net Teller. The credit union is upgrading the product in 2009 so members can join the credit union and obtain loans online. In a month, NETCU will start its Easy Saver Program, in which NETCU will deposit funds in the savings account of members for every debit card purchase they make. NETCU, which has five branches and one real estate office, will add one more branch by the end of the year. “We’re in the process of installing electronic informational signs at all seven locations to advertise and to disseminate information to our members,” Stewart said. To contact the CUNA Membership Growth Task Force, e-mail its account at