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Capital reform is this generations issue NASCUS told

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SEATTLE (8/28/08)--"Capital modernization is essential. The issue of capital reform is the issue of this generation," state regulators were told at the National Association of State Credit Union Supervisors (NASCUS) State System Summit in Seattle last week. Dennis Dollar, principal of Dollar and Associates, told the group, "If we don’t fix this now, I worry about the next generation of credit unions. The capital system for credit unions must be fixed. The time for this issue has come.” Dollar is a former chairman of the National Credit Union Administration (NCUA). The summit, which meet Aug. 21-23, provided a venue for regulators, credit union leaders and dual chartering supporters to discuss challenges and opportunities facing the state credit union system. Other highlights:
* National Credit Union Administration (NCUA) Chairman Michael E. Fryzel made his first speech since taking office at NCUA. His comments about his partnership approach with state regulators were covered in News Now's Aug. 21 (use the resource link). * Cathie Tierney, president of Community First CU, Appleton, Wis., discussed the credit union's unrelated business interest tax (UBIT) litigation, filed in January, against the Internal Revenue Service. A court date has been set for May 2009. “We are very pleased that this process is moving as quickly as it is, and we are optimistic about a positive outcome for state-chartered credit unions,” she said. * Jim Devine, CEO of Hipereon Inc., walked attendees through essential elements of a safe and sound member business lending (MBL) program. Few credit unions have studied their current membership base for existing business owners as a target audience for their MBL programs. “You should help your members build a business that is transferable,” he said, adding that MBL staff must be “business model structure experts” with long-term education. “You can’t pretend in this line of business,” he said. * Gavin Gee, director of the Idaho Department of Finance, discussed the new Nationwide Mortgage Licensing System (NMLS), which he said was essential to providing transparency and oversight of the nation’s mortgage industry. More than 20 states use or will begin using the NMLS this year. Credit union employees who are mortgage originators must register under the Housing and Economic Recovery Act of 2008. "States will have to pass legislation to meet the standards of the new law,” said Gee. A group of state regulators is working on model legislation to streamline implementation and provide uniformity, he said.
NASCUS President/CEO Mary Martha Fortney noted that "open dialogue and discussion between regulators and credit unions on the industry’s critical topics is essential to the longevity and safety and soundness of the credit union system.”

Mississippi Louisiana in full hurricane mode

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JACKSON, Miss., and HARAHAN, La. (8/28/08)--The Mississippi Credit Union Association (MSCUA) and the Louisiana Credit Union League are preparing for the possibility of a hurricane this weekend as Tropical Storm Gustav makes its way toward the Gulf Coast. The area was hit three years ago tomorrow by Hurricane Katrina. Gustav reached hurricane force in Haiti Tuesday afternoon, killing 22, then weakened into a tropical storm. It was expected to strengthen as it crosses the Gulf. Its projected path is anywhere from the Florida panhandle to Louisiana. In Mississippi, MSCUA is preparing to support credit unions, if needed, and has requested up-to-date contact information for key credit union personnel. It provided credit unions with cell phone numbers for MSCUA staff. The association also changed its board meeting, scheduled for today and Friday, to a webcast format so board members can use the traveling time to prepare their credit unions and homes. The Louisiana league and the Louisiana Office of Financial Institutions (LOFI) activated Telspan, the telephone response system for credit unions, Wednesday. Sid Seymour, who represents financial institutions on the Governor's Office of Homeland Security and Emergency Preparedness (GOHSEP), will leave the first recorded message. The league encouraged credit unions to dial in for the most current information. The league's 800 number (800-452-7221) and its website (www.lcul.com) will be in effect. The league gave a number of emergency phone numbers:
* New Orleans and Tri-Parish credit unions should contact Mary Wolfe at 504-487-8147; * Baton Rouge, Lafayette and Lake Charles credit unions should contact Jim Phillips, 225-603-2642; and * Shreveport, Alexandria and Monroe credit unions should contact Susie Fair at 318-663-7766.
It provided other league staff phone numbers and a list of emergency contact numbers for regulators, CUNA Mutual Group and disaster agencies. If the storm worsens, News Now will publish the full list of numbers on Friday. Credit unions along the Mississippi gulf coast also are busy preparing. “We are in full hurricane mode here already,” said Lora Michael, president/CEO of Jackson County CU, Pascagoula, Miss. “By Friday all preparations will be complete no matter what the predictions are,” she said. “We cannot risk a turn for the worse over the long weekend, especially being so close to the Gulf and with only one facility. We got prepared ahead of time for Katrina and it made a huge difference in the timeframe we were able to serve our members.” Singing River FCU (SRFCU), Moss Point, Miss., activated its hurricane preparedness plan Wednesday and also expects completion by close of business Friday. The plan includes, among other preparations, securing ample cash to meet post-hurricane member needs for up 10 days, as well the ability to operate manually for up to 10 work days in the event power is not restored. “As part of SRFCU’s disaster recovery plan, a satellite back-up system is in place, meaning credit union member information will be available, even if telephone lines are not restored,” said James Smith, SRFCU president/CEO. “Members will continue to have uninterrupted access to their accounts via home banking and audio response.” Other credit union preparations include plans to maintain communications with members, employees and vendors, activating disaster recovery teams and gathering emergency supplies and equipment.

CU educators reach unprecedented in 2007-08

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COLUMBIA, S.C. (8/28/08)--Credit unions had unprecedented impact in the classroom in 2007-08, reaching 374,099 students in 11,245 total presentations, according to statistics collected by the National Youth Involvement Board (NYIB). Those totals are gains of 29.4% in number of students and 14.6% in number of presentations over 2006-07 statistics (289,072 students in 9,812 classes). Increases over five years average 9% annually. In logging the data, NYIB’s network of credit union professionals far exceeded what the NYIB Executive Committee considered a stretch goal of 300,000 students reached. “What we saw this year appears to be the result of larger class sizes,” suggested NYIB Chairman Brandon Pugh, “particularly since just three more presenters than last year reported activity. "Optimistically, it’s showing that credit union volunteers are progressing, having more classes and more students in each.” It is also the reason the NYIB Executive Committee will consider another lofty goal for the coming year, Pugh said. "Chairman (John) Faries encouraged us to set the ‘stretch’ goal last year, believing there is plenty of activity going unreported. This year’s numbers represent an outstanding impact by credit union people, but they still suggest there’s more room for even bigger numbers,” Pugh added. For the second consecutive year, Marsha Lunden of Desert Schools CU, Phoenix, conducted the most classroom presentations--416. Erin Hodson of Kern Schools FCU, Bakersfield, Calif., reached the most students--22,619--in the 2007-08 reporting year. The NYIB “Top Classroom Presenter”--the person with the greatest percentage increase in classroom presentations over the previous year--was Juli Lewis of Suncoast Schools FCU, Tampa, Fla. During the 2007-08 reporting year, Lewis made 325% more presentations than in 2006-07. Likewise, “Most Students Reached” went to Jeff Williams of Educational Employees CU, Fresno, Calif., who reached 796.9% more students in 2007-08 than in 2006-07. NYIB is a volunteer organization of credit union professionals devoted to financial education and youth-oriented services. It is the only organization collecting classroom presentation data. Visitors to NYIB's website can create a “MyNYIB” profile for access to the classroom reporting feature, a searchable document sharing feature, and the ability to upload their own news stories. Membership in NYIB is voluntary and site features are at no cost to the network. NYIB's Executive Committee is accessible at www.nyib.org/contactus.php. The Credit Union National Association is tracking credit unions' adult financial education efforts. To record your adult educational sessions, go to cunapfi.org and click on "Report what you're doing."

For better banking check out a CU--IWall Street JournalI

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NEW YORK (8/28/08)--A columnist for the The Wall Street Journal is urging consumers to move their account to a local credit union. Noting that "many Americans are pretty unimpressed with the banking industry right now," Brett Arends writes, "Maybe it's a good time to look at an alternative--like moving your account to a local credit union instead" (The Wall Street Journal Aug. 26). That's just the first two paragraphs. Arends discusses credit unions' "sleepy, backwater image. They're often seen as the local libraries of banking. But that's too bad. The chances are they didn't pay their chief executive $10 million while writing off billions in subprime loans. And they can offer you some surprisingly good deals." Bankrate.com economist Greg McBride says in the article that credit unions often beat banking counterparts in rates on loans and deposits and that shoppers looking around for the best deal "has to include looking at credit unions." The lengthy article also uses statistics and historical information provided by the Credit Union National Association (CUNA) and urges readers to go to creditunion.coop to find credit unions near them. The entire article is available at the resource link.

CDCU in Syracuse granted 100000 to aid low-incomers

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SYRACUSE, N.Y. (8/28/08)--Syracuse Cooperative FCU will receive a $100,000 grant to better serve low-income communities in its area. The grant, issued to the $14 million asset, Syracuse, N.Y.-based credit union by the U.S. Department of the Treasury’s Community Development Financial Institutions Fund, was announced Tuesday by U.S. Sen. Charles E. Schumer (D-N.Y.) (Syracuse.com Aug. 27). The credit union will use the grant to open a third branch office, step up activity on the north side of Syracuse, train staff and acquire technology, Schumer said. “The Syracuse FCU already does a great job helping low-income Syracuse residents access banking and financial services,” Schumer said in a news release. “This money will go a long way in helping the credit union expand its outreach to more residents in need and in making financial services more accessible to the community.”

CU System briefs (08/27/2008)

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* RALEIGH, N.C. (8/28/08)--State Employees' CU (SECU) is enhancing its "Green" vehicle loan program to include vehicles with a higher rated fuel economy. Beginning in September, the Raleigh-based credit union's loan--which features an interest rate that's 1% lower than other new or used vehicle loans--will allow financing of new and used vehicles that have a combined city and highway miles per gallon rate of 28 mpg. Previously the loan program had been limited to new hybrid or alternative fuel vehicles. These are still eligible, provided they meet the 28 mpg combined rating, said the credit union in a press release … * PEMBROKE PINES, Fla. (8/28/08)--Power Financial CU signed up a few dozen accounts in advance of its gas card giveaway event with Mobil 1 Lube Express. The $480 million asset, Pembroke Pines-based credit union also opened several accounts during the event, which was designed to promote its new online account-opening service by giving away thousands of dollars in free gas cards and discounted oil changes. Power Financial members showed up for the free fuel injection service ($60 value) and free Purigen (nitrogen) for their tires ($30 value). Parents brought children who are NASCAR fans to meet “Sonny,” a Dale Earnhardt look-alike. Power Financial will repeat the event in November at another Mobil 1 Lube Express in Silver Lakes … * FORT WORTH, Texas (8/28/08)--U.S. Rep. Kenny Marchant (R-Texas) addressed about 50 employees on an Aug. 13 visit to a CUNA Mutual Group office in Fort Worth, Texas. After a tour of the facility, Marchant met with the group to discuss his experience working with credit unions and his background in local, state and federal government. Marchant, who serves on the Financial Services Committee, praised credit unions for their commitment to the financial needs of families and for providing quality services for the residents in his congressional district (US Fed News Aug. 13) … * HARRISBURG, Pa. (8/28/08)--A reception with credit union representatives and Jim McCormack, president/CEO of the Pennsylvania Credit Union Association was held Monday night for Kathy Dahlkemper, the Democratic nominee for Pennsylvania’s 3rd Congressional District (Life is a Highway Aug. 26). The event was chaired by McCormack; Gail Cook, president/CEO, Erie General Electric FCU; and Norb Kaczmarek, president/CEO, Erie FCU. More than 144,000 credit union members reside in Dahlkemper’s district, according to the association. From left are: Cook, Kaczmarek, Dahlkemper and McCormack. (Photo provided by the Pennsylvania Credit Union Association) ... * TULSA, Okla. (8/28/08)--Cynthia Jan Harris, 51, was charged in federal court in Tulsa with embezzling more than $1.6 million from Mayes County FCU, Pryor, Okla. Harris worked as assistant manager and chief financial officer at the credit union (Tulsa World Aug. 27). She is accused making fraudulent deposits into members’ accounts and then withdrawing the money from June 1, 2000, to July 10, 2007, the newspaper said ...

Article about financial industry courting kids cites CUNA

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MADISON, Wis. (8/28/08)--A Tuesday article in Investor’s Business Daily about the financial industry courting kids mentioned the Credit Union National Association’s (CUNA) National Financial Literacy Summit Report. The CUNA report indicated that 60% of teenagers don’t understand the difference among cash, checks and credit cards. Also, high school seniors this year correctly answered only 48% of basic questions regarding saving and investing, earning and spending in a JumpStart Coalition for Personal Financial Literacy Survey--down from 52% in 2006. The article mentions Monetta Young Investors Fund--a kids-themed mutual fund that attempts to persuade kids and young adults to adopt long-term investing. The fund uses online games and prizes, books, toys, activities and age-based financial kits to teach kids age four and up about long-term savings and investment. Also, the Treasury Department created the National Financial Literacy Challenge to inspire kids to learn about personal finance and financial literacy, the article said. More than 46,000 U.S. high school students took the voluntary 35-question test, with the average score being 56%. However, about 400 student scored a least a 94% mark on the test to earn a National Financial Literacy Award--a U.S. Treasury medal.

Check payments by online users at lowest point in six years

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BROOKFIELD, Wis. (8/28/08)--With more Americans paying their bills online rather than writing checks, credit unions will need to offer even more online banking services to members. An estimated 63.1 million households--75% of all U.S. households--are paying bills online, according to a survey by CheckFree, part of Fiserv, Inc., a provider of information technology services to the financial industry (BusinessWire Aug. 27). Among survey respondents who use the Internet, check payments dropped to their lowest level in six years--accounting for 31% of the total volume of household bill payments, compared with 34% in 2007. The survey also indicates that consumers have more confidence in online security because Americans are becoming more experienced in using Internet services, and therefore security concerns are not a much of a barrier to online bill payment adoption as they were in the past, said CheckFree. Other survey findings include:
* Households using the Internet pay about 11 bills per month. Consumers use an average of three different ways to pay bills with online, check, automatic debit and in-person at the heading the list of bill-payment methods. Online bill payments at bank and biller websites account for 42% of total monthly payments, compared with 31% of bills paid by check. * The environment was cited by 51% of survey respondents as a reason for choosing to view and pay bills online. Of these, 72% identified the lack of paper and clutter as main benefits, followed by tree conservation (19%) and reduction in gas consumption (16%). * Saving time and obtaining control over finances were major online bill-payment benefits cited by 44% of respondents. Those surveyed also cited other main reasons for paying bills online, including eliminating the hassle of writing checks; enabling them to pay all bills in one step; and saving on the cost of stamps.

Vantage CU makes it easy to register to vote

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ST. LOUIS (8/28/08)--Vantage CU has applications for residents to register to vote in the presidential elections this November. Voter registration applications will be accepted at all 15 Vantage branches through Sept. 29. The credit union will submit the applications as they are received to the proper election authority. Bridgeton, Mo.-based Vantage also launched the Missouri Kids Voting initiative, which teaches students the value of voting. Posters featuring St. Louis Cardinals pitcher Adam Wainwright were distributed to teach youth about the voting process. The initiative aims to reverse declining voter turnout in the U.S. Vantage has more than $500 million in assets.

60 of CU CEOs have supplemental retirement plans

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MADISON, Wis. (8/28/08)--More CEOs at larger credit unions have supplemental executive retirement plans than ever before, but the numbers still lag behind the financial services industry as a whole, reports a new Credit Union National Association (CUNA) survey.
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According to CUNA’s 2008-2009 CEO Total Compensation Survey, 61% of CEOs at credit union with $100 million or more in assets had a supplemental executive retirement plan (SERP) in place in 2007, up from 55% in 2006. In comparison, 86% of executives in the financial services industry have a supplemental executive retirement plan, according to CUNA Mutual Group. . As tax-exempt organizations, credit unions can offer two types of SERPs: 457(b), or “deferred compensation,” and 457(f). For an executive, a 457(b) plan is similar to an employee's 401(k) with limited contributions--up to $12,000 in 2003. A 457(f) plan has more flexibility with no contribution limits, but also has substantial risk that deferred funds could be forfeited before they are vested (News Now Nov. 17, 2004). In the past, 457(b) plans were more commonly offered to credit union CEOs, but 457(f) plans have gained in popularity in the past two years. In 2007, credit unions were nearly as likely to offer 457(f) plans as they were to offer 457(b) plans--37% versus 39%, respectively. “SERP numbers have remained fairly flat at credit unions over the last several surveys, but these gains are coming at a good time,” said Kristina Grebener, director of research and advisory services in CUNA’s center for research and advice. “As the pool of leadership talent continues to shrink, driving loyalty through executive benefit plans will be critical for retention.” The report provides nationwide data for credit unions with $100 million or more in assets and details CEO compensation, including: base pay, bonuses and incentives, perks and benefits, executive retirement plans, and employment contracts and severance. The report also includes estimated values of the CEO total compensation package comprised of cash compensation (base salary plus variable pay), the cost of benefits and perquisites provided by the credit union, and the average annual value of car and car allowances received. For general peer comparisons, the survey data is presented by seven asset categories (from $100 million to $150 million in assets to $1 billion or more in assets), region, contract status, number of branch offices, number of full-time employees, loans outstanding, and number of members. A customized peer analysis is also available to compare a credit union to aggregated data from 10 or more peers.