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SCCUL diversity award goes to Greater Abbeville FCU

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ABBEVILLE, S.C. (8/23/12)--Greater Abbeville FCU, Abbeville, S.C., was honored Monday with the 2012 South Carolina Credit Union League Laura Fleming Diversity Award.

The award was presented at the North Carolina/South Carolina Credit Union National Association Leadership Conference.

The $12 million asset credit union, which serves more than 2,000 members, received the award for its implementation of the Fresh Start Checking program earlier this year.

The award, established in 2007, recognizes South Carolina credit unions that exemplify diversity and inclusion in the workplace.  Fleming was one of the league's past credit union leaders and a member of the league's original Diversity Committee.

Lithuania bank tightens CUs prudential requirements

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VILNIUS, Lithuania (8/23/12)--The central bank of Lithuania Monday unveiled tougher prudential requirements for the country's credit unions. The move is prompted by the end of rules related to the calculation of large exposure ratios.

The Bank of Lithuania board said that as of Jan. 1, 2012, all credit unions are required to include funds in credit institutions such as banks and credit unions in their calculations for maximum exposure.  The requirement limits the funds credit unions can risk from other sources, according to The Baltic Course (Aug. 20).

Also, the maximum exposure ratio will be extended and apply to all credit unions. Previously, those with adjusted capital fees of less than US$718,756 were exempt.

The central bank said the purpose of the new requirements is to encourage credit unions to invest funds cautiously and safeguard depositors' interests. It also is requiring greater experience from managers and has formulated an exam for those who do not meet the experience requirements.

Lithuania has 62 credit unions serving 124,383 members. They have combined assets totaling more than $537 million, according to the World Council of Credit Unions' statistics.

When Gen Y moves back home CUs have opportunities

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MADISON, Wis. (8/21/12)--If you are marketing by lifestyle geared toward life's big events-- birth, graduation, the first car, college, marriage, kids ,home buying, pre-retirement investing, and retirement--you may see an opportunity in the latest trend: Gen Yers moving back home and living with their parents.

Findings by a new study from US2010: Discover America in a New Century may shake up some marketing habits--or at least make marketers reconsider their assumptions about who does what and when.

Marriage, children and families are no longer individual achievements that young people rush to pursue, the study concluded. It noted that the transition to adulthood has been extended as a period of "emerging adulthood, marked by personal instability."  Young adults stay in their parental homes longer or return home after a stint of independent living.

Although the Great Recession affected nearly every demographic population segment in the U.S., young adults were hit the hardest because they were often the "last hired, first fired." Job losses mean many young adults found it comforting to double up with their parents to save money. "For young adults, various transitions and uncertainties often make the parental home as a safe haven," said the study.

Some of the key findings:

  • Of those age 20-34 in the survey, 24% lived with their parents during 2007 to 2009, up from 17% in 1980. The percentage was much higher for those under 25 years old: 43% moved in with the folks, compared with 32% in 1980. Levels of co-residence were higher for men than women, minorities more than whites, and for those with lower levels of education.
  • Delays in marriage increased the likelihood of moving back in with parents. In 2007-2009, roughly 38% of men and 47% of women aged 25 to 29 were married, a decline from 59% and 65%, respectively, in 1980.
  • Two key factors explain why young adults are living with their parents: marital status and economic reasons. Singles are more flexible in terms of moving in and out. And unemployment or low income makes independent living difficult, so doubling up with parents becomes feasible.
It is no surprise that never-married individuals had the highest percentage living with parents, said the study. About 54% of the 20-24 year olds, 37% of the 25-29 year olds, and 27% of the 30-34 year olds lived with their parents in 2007 to 2009.  "What is surprising is the high percentage at older ages when they are expected to have reached independence. More than one-fourth of 30-something adults never left home or moved back into their parents' home."

So, how does all this affect the credit union's marketing strategy? Think education opportunity. Provide resources families can use. Here are a few possibilities:

  • Articles in the credit union's newsletter. Offer tips for negotiating a contract much like a rental contract, specifying the move-in terms and what the offspring and parents will or will not contribute.
  • Financial fairs. Make this situation one of the topics. Many parents welcome their offspring back but then reality hits. Who pays for the jobless daughter's emergency car repair?  What are the financial consequences if the son or daughter gets sick or is injured and isn't on the parent's health insurance plan? What if they never move out? Credit unions can help them weigh the pros and cons.
  • Budgeting help for the new reality. During the recession, many young adults and their parents received a wake-up call. They are being forced to reevaluate their goals and financial capabilities. They may need help with considering options (how best to stretch the pre-retirement dollars, buying a used car instead of a new one, a shorter vacation than the two weeks in Italy).  Provide them the tools to reevaluate their budgets and calculate all the what-ifs.
  • Special savings plans and loans. Maybe an emerging adulthood loan to finance the start up expenses of renting at a new place, or savings plan attached to a loan that rewards the young adult for saving.
The possibilities are endless, with just a few tweaks to a credit union's marketing.

Ohio CUs find ways to lend

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COLUMBUS, Ohio (8/23/12)--Credit unions in Ohio saw their consumer-loan-origination growth beat the national average, according to the Ohio Credit Union Quarterly Performance Summary.

Growth increased 37.1%  from March 2011 to March 2012, with consumer loans driving overall origination growth--which increased 33.7% to $1.5 billion during the same time period (Toledo Business Journal Aug. 1).

The summary provides encouraging news from a loan growth standpoint, according to the Ohio Credit Union League (eLumination Newsletter Aug. 8). Despite economic growth indicators which suggested a drawn-out recovery, loan growth at Ohio credit unions from March 30, 2011, to March 30, 2012, increased 4.7%. That is the strongest first-quarter growth performance since 2008-2009, which saw 8.26% growth, the league said.

Credit unions looked for creative ways to make the loans. KEMBA Financial CU in Gahanna expects 20% loan growth in 2012, CEO Jerry Guy told Columbus Business First, the league reported.

Mark Decello, KEMBA executive vice president and chief operating officer, said the credit union's growth strategy is focused on five key principles:

1. Transitioning from a transaactional sales approach to a relational approach;

2. Implementing a relationship pricing straegy to reward members based on their contribution to the cooperative;

3. Ensuring sales-oriented associates occupy all member-facing positions, from the call center to tellers to member services representatives.

4. Continuing a highly targeted matrix mailing program to reach members with pre-determiend needs, and carefully measuring the result; and

5. Taking advantage of what the marketplace affords, in a timley fashion.

KEMBA Financial's approach may seem sales-focused to an outsider, but the focus is still on the member, Decello said.

"Sale isn't a bad word," he told the league. "Our results are the true gauge of whether we are fulfilling our obligation to improve our members' financial lives. For example, we don't simply sell an auto loan to a member because they think it's their best option, we will review their financial situation and determine if it's the best way to save or make the member money."

Ohio's credit unions also saw strong growth in first mortgage originations (up 34.6%) and business loan balances (up 13.7%).

VSECU banking cease-desist hearing to be set

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MONTPELIER. Vt. (8/23/12)--A pre-conference hearing was held Wednesday with representatives of Vermont State Employees CU (VSECU) and the Vermont Department of Financial Regulation (DFR) about a possible cease-and-desist order over VSECU's use of the words "bank" and "banking" in its marketing materials.

At the pre-conference hearing attended by about 15 people, independent hearing officer Robert Simpson, a retired Chittendon County State Attorney, took care of the "housekeeping" chores. He introduced attorneys for both sides, Joe Bergeron, president of the Association of Vermont Credit Unions, who attended the hearing, told News Now.  

"Not a lot happened," Bergeron said. "Simpson told both parties to work out an agreement for processes, dates and timelines among themselves and to get back to him by the end of this week. The parties also discussed what to keep confidential and what not to."

The final hearing could be as late as the second half of October, Bergeron said.

Cliff Peterson, DFR general counsel, was the lead attorney representing the state, and Jackie Hughes, of KSE partners, represented VSECU. Some Occupy Wall Street people also attended, Bergeron said.

DFR, which regulates state-chartered credit unions and banks, issued a notice June 18 to the Montpelier-based VSECU of its intent to issue a cease-and-desist order barring VSECU from using the words. DFR said it was concerned that consumers and members are confused when the credit union uses the words. The $573 million asset VSECU requested a hearing over the matter (News Now July 19 and 20).

"We have worked hard over the years to educate consumers about the difference between a bank and a credit union. We have never called ourselves a bank nor have we ever tried to fool members or consumers into thinking we are a bank," VSECU CEO Steven D. Post wrote in the message posted on the credit union's website last month.

In a frequently asked questions section, the credit union outlined implications for state-chartered credit unions that could develop if the DFR succeeded in the ban, which "would be very unfortunate for Vermonters and set a very bad precedent in Vermont," it said.

Federal credit unions in the state "are not subject to any Vermont ruling that comes from this enforcement action and therefore can continue using the words "banks" and "banking" without penalty," the credit union said.

"It would mean that VSECU and other state-chartered credit unions would not be able to simply, fairly and accurately describe who they are and what kind of services they offer such as: mobile banking, banking online, banking solutions, 'you can bank at a credit union,' 'we're redefining banking,' 'our credit union is a banking alternative,'" said the credit union.

Banning the words "would clearly put VSECU and other state-chartered credit unions at a competitive disadvantage since federally chartered credit unions can use these terms freely," it said.

Rivermark Community CU to close two more branches

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BEAVERTON, Ore. (8/23/12)--Rivermark Community CU, Beaverton, Ore., will close two branches this fall, a reflection of growing member adoption of its remote services, the credit union said.

Rivermark Community CU, with $550 million in assets, will close its Clackamas and Newberg branches on Nov. 9. The credit union closed its Salem branch in June.

"Our members like the convenience of online and mobile banking and knowing that it's become an easy, safe and secure option," said Scott Burgess, Rivermark Community CU's president/CEO. "Our decision to close two branches reflects a vision to be a technology-savvy credit union."

In the past year, the number of members using Rivermark's online banking service has increased 34% and its mobile banking service grow 86%. At the same time, the number of in-branch transactions has declined, with 30% of members having visited a Rivermark branch in the past month at some locations.

Rivermark Community CU introduced mobile deposit in March. In five months, more than 9,300 members have deposited more than 31,000 paper checks using their iPhone or Android mobile device, Burgess said.

Coopera Prepaid cards help CUs attract underserved

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DES MOINES, Iowa (8/23/12)--Prepaid cards can serve as a credit union's entry to growing markets, including Generation Y and the underserved, according to a new a new white paper from Coopera.

Coopera is an Iowa-based economic development firm focused on the emerging Hispanic market, which presents unique growth opportunities for credit unions.

Coopera works in partnership with the Credit Union National Association (CUNA) and credit unions to help credit unions nationwide grow by serving the Hispanic community. They designed El Poder es Tuyo (The Power is Yours), a customizable, Spanish-language personal finance website for Hispanic credit union members and potential members. For more information, use the resource link.

CUANY introduces Online Voters Resource Center

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ALBANY, N.Y. (8/23/12)--The Credit Union Association of New York has created an online resource center to assist credit union professionals, volunteers and members in identifying political candidates that support credit unions.

"Our members want to know if their lawmakers support credit unions," said William J. Mellin, the association's president/CEO. "This online resource center will help credit union members make informed choices as they make their voices heard in the primaries and when they go to the polls in November."

The Voter's Resource Center details state legislators' records on bills affecting credit unions and their 4.6 million members statewide.  It also includes voter resources, such as:

Voter Information:

  • New York State Board of Elections;
  • Absentee Ballot Request;
  • Credit Union National Association (CUNA) Elections Action Center;
  • Locate Your Lawmakers;
  • VoteNY (new voting machine information);
  • Project Vote Smart; and
  • Vote411.org.
State Primary Election Candidates:

  • New York State Senate; and
  • New York State Assembly.
General Election Candidates:

  • U.S. Senate--N.Y.; and
  • U.S. Congress--NY.
Political Action Committee Information:

  • Supporting pro-credit union candidates
The CUNA Elections Action Center includes materials and links to help voters register, request an early vote ballot, mobilize credit union members, and activate on behalf of pro-credit union candidates in the upcoming 2012 elections.

MnCUN partnership assists CUs with public deposits

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ST. PAUL, Minn. (8/23/12)--The Minnesota Credit Union Network's (MnCUN) Network Service Corp. this week furthered its initiative to strengthen credit unions' ability to accept public deposits through a newly signed partnership agreement with American Deposit Management LLC (ADM).

ADM, a treasury management and financial services company, provides Minnesota credit unions a safe and profitable fund where they can place large deposits, MnCUN said.

ADM is a deposit placement service that provides full Federal Deposit Insurance Corp. (FDIC)/National Credit Union Administration (NCUA) insurance through a network of financial institutions. Through this program, credit unions send large deposits to ADM. The deposits are then placed in separate financial institutions that have FDIC/NCUA insurance. The product provides credit unions a combination of deposit protection and competitive returns on funds, said MnCUN.

Earlier this year, MnCUN played a role in a push for the inclusion of credit unions in the language of a bill involving deposits from public entities. While the bill was signed into law in April, many Minnesota credit unions lacked the tools necessary to fully take advantage of the legislative change. MnCUN's partnership with ADM provides credit unions an investment tool for municipal deposits.

"By utilizing this product, credit unions can reaffirm their connection to and support of local communities," said John Ferstl, MnCUN vice president- Network Service Corporation.

Headquartered in Milwaukee, Wis., with offices in Minneapolis, ADM works with more than 400 credit unions and banks nationwide.

CU System briefs (08/22/2012)

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  • HERNDON, Va., and SUITLAND, Md. (8/23/12)--Chris McDonald has been selected as the new CEO of Herndon, Va.-based Northwest FCU (NWFCU), succeeding Gerrianne D. "Winky" Burks, announced NWFCU's board of directors on Tuesday. Burks will retire in mid-January after a 41-year career at NWFCU. McDonald has resigned his post as president/CEO of Suitland, Md.-based Andrews FCU, effective Sept. 14. McDonald's career with credit unions has spanned more than 28 years.  He began his career as a state regulator before becoming executive vice president/vice president of finance and information systems at First Community CU, Houston. For the past 12 years McDonald has led credit unions in Texas and Maryland. He has been with Andrews FCU since 2008. Under his tenure at the $897 million asset Andrews FCU, he oversaw three new branches opened in Germany, New Jersey and Maryland and positive trends in membership, loans and deposits while expanding its ATM network and enhancing products lines. Andrews' board said it would make an announcement soon about an interim president/CEO …
  • ARLINGTON, Va. (8/23/12)--National Association of State Credit Union Supervisors (NASCUS) President/CEO Mary Martha Fortney announced Wednesday that Kate Hartig is leaving NASCUS to join the District of Columbia Department of Insurance, Securities and Banking as its public information officer later this month.  Hartig, as NASCUS's vice president for public relations and legislative affairs for nearly eight years, was responsible for NASCUS' communications and media relations, as well as congressional relations …
  • BINGHAMTON, N.Y. (8/23/12)--A mother and son from Pennsylvania have pleaded guilty to a $14 million loan fraud scheme that forced the closure of Binghamton, N.Y.-based Broome County Teachers' FCU (Associated Press Newswires Aug. 21). Scott Lonzinski, 32, and Laura Conarton, 46, of Great Bend, Pa., were charged with bank felony fraud related to allegedly creating phony documents, forging signatures and inventing fictitious people to get 10 loans over two years from the credit union. They allegedly convinced the credit union that Lonzinski's bogus certificates of deposit were worth what they claimed for a security for the loans. The loans allegedly were used to finance Lonzinski's construction business, where Conarton was manager and bookkeeper. The scheme was discovered during an examination by the National Credit Union Administration (NCUA) in June 2011. NCUA sold the credit union's assets to another credit union. No members lost money as a result of the liquidation …
  • SYRACUSE, N.Y. (8/23/12)--Christopher Vanetten, 37, of Cicero, N.Y., was sentenced to serve three to six years in prison for allegedly cheating credit unions and others in a check-writing scam. Vanetten also was ordered to pay nearly $44,700 in restitution. He pleaded guilty in July to felony charges of third-degree grand larceny and first-degree scheme to defraud. He allegedly opened accounts at various area credit unions in Onondaga County and then wrote numerous bad checks on the accounts, said prosecutors. Vanetten also faces similar charges in Oswego County (The Post-Standard Aug. 21) …
  • WARRENVILLE, Ill. (8/23/12)--The board of directors of Alloya Corporate FCU, based in Warrenville, Ill., has appointed Matt Davidson, executive vice president for Kern Schools FCU, Bakersfield, Calif., to its volunteer Supervisory Committee. Davidson, whose credit union experience spans more than 23 years, previously has served as a chief executive for a number of credit unions and as executive vice president for the California and Nevada Credit Union Leagues. Kern Schools FCU has $1.3 billion in assets and serves nearly 170,000 members. The committee also includes Michael Daugherty, president/manager of Community Plus FCU in Rantoul, Ill., and Charles H. Rogers, chief operating officer for Progressive CU in New York, N.Y. …