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CU System briefs (08/03/2009)

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* FLORENCE, S.C. (8/4/09)--A local newspaper gave Health Facilities FCU, based in Florence, S.C., a "thumbs up" for its "Don't Just Save a Tree, Plant One" campaign. This past spring, the credit union offered members a chance to sign up for eStatements and give back to the city, Keep Florence Beautiful and The Arbor Foundation by planting trees. "I never would have imagined that we would be planting 155 trees in Florence," Michelle Bailey, the credit union's marketing manager, told Morning News (Aug. 3) … * TALLAHASSEE, Fla. (8/4/09)--Three families are leading Florida Commerce CU's weLiveFIT! Challenge competitions, announced the credit union at a live show July 26 at a local Sam's Club in Tallahassee. Seven Tallahassee families are halfway through the 10-month competition toward financial fitness, which began in March. The households are competing to save money, reduce debt and improve their credit scores. More than 100 families applied for the competition. Each of the seven families chosen are assigned a financial coach to help them develop a personalized plan. They share their progress with the community through blogs and monthly webisodes. The household that improves finances the most at the end of the challenge will receive $10,000. Ann Nucatola, host of the weLiveFIT! Challenge reality show, announced the three families leading so far: David and Linley Paske, Karen Rubin, and Diana and Michael Grosh. Winners will be announced in January … * HARRISBURG, Pa. (8/4/09)--Belco Community CU based in Harrisburg is celebrating the one-year anniversary of its Critter Club, an account created for pets. To celebrate, employee and members donated $1,272 to three local animal shelters. In addition to the funds raised, they filled two truckloads of supplies, which were delivered to the Lancaster Humane League, Humane Society of the Harrisburg Area and Adams County SPCA. Employees raised funds through jeans days. Also, a team of employees took part in the Humane Society of Harrisburg's Run/Walk for the Animals (Life is a Highway July 30) … * RALEIGH, N.C. (8/4/09)--State Employees' CU (SECU) foundation, SECU Foundation, presented a $10,000 four-year college scholarship each to three Edgecombe County 2009 graduates for a total of $30,000 in award money. Recipients are SouthWest Edgecombe graduate Morgan Danielle Drake, North Edgecombe graduate Tierra Shadeh Hammiel and Tarboro High graduate Cassie Dieterich Hutaff. Drake will attend North Carolina State University; Hammiel will attend University of North Carolina at Chapel Hill, and Hutaff will attend University of North Carolina at Charlotte. SECU, a $17 billion asset credit union, is based in Raleigh, N.C. …

Members United reports 81.9M in OTTI

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WARRENVILLE, Ill. (8/4/09)--Members United Corporate FCU reported an $81.9 million loss in other than temporarily impairment (OTTI) funds in its June financial report, just released. That means its net loss for the month will be $79.3 million. At the time of the report, Members United had not applied the losses to member capital because it was waiting for the audited financials from U.S. Central FCU. Members United attributed the losses to the downgrading of several monoline insurers who continue to experience significant losses from guarantees they made on credit default swaps (CDS) and collateralized debt obligations (CDO) backed by residential mortgage securities. The corporate does not own any CDOs or hold any CDS contracts. Two monoline insurers, FGIC and Syncora Guarantee (SGI), were deemed permanently impaired and RMBS securities wrapped by these insurers were subjected to OTTI. Also, MBIA and Ambac have experienced ratings downgrades and their credit spreads are trending unfavorably, said the corporate's financial statement. Assets at Members United as of June 30 totaled $8.4 billion. Cash and overnight deposits at U.S. Central FCU totaled $2.8 billion, fair value of marketable securities represented $3.5 billion, loans to members totaled $0.9 billion, and term deposits at U.S. Central totaled about $1.1 billion. Members United's capital ratio stands at 3.93%--below the 5% regulatory requirement. However, the National Credit Union Administration issued an order recently allowing corporates to reference their Nov. 30, 2008 capital levels, which exceeded the 5% requirement for Members United. To access the report, use the resource link.

Guard fires shot robber flees

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ROCKFORD, Ill. (8/4/09)--A would-be robber fled the Rockford, Ill. branch of a credit union, after a credit union guard shot at him and missed. Rockford police said a man in his late teens to early 20s entered the branch of the Rantoul, Ill.-based Credit Union 1 at about 1 p.m. Friday, pointed a long-barreled handgun at the uniformed guard who was seated at a desk, and told her to "freeze." Instead, the guard drew her gun and shot at him, hitting a front window. The man fled, without any money ( July 31).

Suspicious powder in envelope turns out to be drywall

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TUSTIN, Calif. (8/4/09)--A suspicious white powder found in an envelope deposited at a California credit union has turned out to be drywall dust, officials said. Authorities were called to Schools First FCU at 8:15 a.m. Monday after an employee found the powder inside a deposit envelope (The Orange County Register Aug. 3). Two people exposed to the powder were isolated and checked by paramedics as a precaution. They did not experience any illness symptoms, said Sgt. Jeff Blair of the Tustuin Police Department. At 11:35 a.m. the hazardous materials crew determined the substance wasn't hazardous.

CUNA CUs consumers rebut IUSA TODAYI item

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NEW YORK (8/4/09)--The Credit Union National Association (CUNA) is providing resources so leagues and credit unions can answer questions that may be prompted by a front-page article in Monday's USA TODAY that was critical of some credit unions' payday loan alternatives. The article cited the loans of a single credit union in Nevada. The article alleged that some payday loan alternatives at credit unions are "not a good deal." The article quotes an attorney for the National Consumer Law Center (NCLC), who said many credit union payday loan alternatives really help consumers but others are only marginally cheaper than traditional payday loans. The story was sparked by an NCLC statement about the National Credit Union Administration's letter of guidance to credit unions on payday lending (see News Now July 30). Lois Kitsch, national program director for REAL Solutions, a program of the National Credit Union Foundation (NCUF), was interviewed for the article and countered the negative claim. Many credit unions offering the alternative loans encourage savings and allow up to 90 days to repay the loan, instead of the traditional 14-30 days, she told the newspaper. She also was interviewed Monday morning on CBS about the programs, according to NCUF. CUNA, in providing statistics, background papers and talking points for the leagues, noted that between 10% and 20% of credit union members opt to do at least some business with a payday lender, for a variety of reasons. "Consumers clearly show a need for short-term cash loans they can access quickly. Credit unions are offering reasonable and more consumer-friendly alternatives to the typical payday loan," said Dan Mica, CUNA president/CEO. He noted credit unions are a logical choice--they have a history of providing small loans to help their employer-based memberships get by until payday. "Credit union alternative payday loans are designed to help members break their payday loan habit by helping them pay off the loan," Mica said. No two short-term loans are alike at credit unions because they are customized to fit their membership's needs, which vary from credit union to credit union, he added. Of the credit unions offering payday loan alternatives, roughly 60% use open-end credit terms, while closed-end terms extend to 30, 60, or even 90 days, according to CUNA's statistics. More than nine out of 10 credit unions offering the loans require them to be paid in full before the member is provided another advance. NCUF told News Now that when the article's author contacted the organization Friday, it did not have the opportunity to provide significant background information or links to other credit unions' payday loan alternatives. On Monday, NCUF provided additional information to the writer about credit union payday lending alternatives for a future article. A few state leagues noted the newspaper article in their daily newsletters. "The story unfortunately did not do a good job in capturing all the great work credit unions do to make affordable short-term loans available. It sourced only one credit union," said New Jersey Credit Union League President/CEO Paul Gentile (The Daily Exchange Aug. 3). "The issue of whether a fee should be viewed as APY (annual percentage yield) has been debated for years with overdraft programs and short-term loans. The fact is many credit unions are making short-term loans that others won't and they are doing them to help their members through tough times." He pointed out that the article "does not provide an example of a credit union using a true payday loan alternative." Readers clogged up the newspaper's comment blog with a variety of opinions on the article. Many were favorable to credit unions. While no one professed to like their bank's products, several said they preferred their credit unions. "I've been with credit unions for almost 30 years. A bank will NEVER get my business," said one commenter.

Moving company loses box of CUs data

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MEDFORD, Mass. (8/4/09)--A moving company lost a box last year containing account information of nearly 10,000 Massachusetts members of Members Plus CU, Medford, Mass., the credit union said. Members Plus hired Olympia Moving and Storage to manage a 2008 move to a new location and rented boxes for the move from Rent-A-Crate, the credit union said in a letter sent to the state’s Office of Consumer Affairs and Business Regulation (The Boston Globe Aug. 3). On Sept. 19, Rent-A-Crate notified the credit union that one of it boxes wasn’t returned. Initially, Members Plus thought the box company’s count was incorrect. But then on April 1, the credit union discovered that a box containing unencrypted discs of account statement images--including Social Security numbers of some former credit union members--was missing, the newspaper said. After searching all of its offices, including its previous location, Members Plus could not locate the missing box. In May, the credit union told the state it had “no evidence or reason to believe that the lost information had been misused, accessed or acquired by unauthorized access,” the paper said. Members Plus did not return a phone call to News Now by press time.

Michigans Save to Win garners prominent coverage

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PLYMOUTH, Mich. (8/4/09)--The Michigan Credit Union League’s Save to Win program was the topic of a recent Fox Business News story in which league President David Adams was interviewed. The program also has been noted by The New York Times and the Wall Street Journal. Save to Win is a program piloted by eight Michigan credit unions that offers credit union members the opportunity to win prizes for each $25 they deposit into savings accounts. Since the pilot launched in January, $4 million has gone into savings, with an average deposit of $300. Many of the people participating are individuals who have never saved before and played the lottery or gambled with their money. The pilot is appealing to individuals’ desires to play a game--but in a productive way, Adams said. “People need incentives to save,” Adams told Fox Business News. “We are borrowing too much, and saving too little. [But] the more we save, the more prepared we’ll be for the future.” The Save to Win program was made possible through a partnership with the Filene Research Institute and the D2D fund. For more information, use the links.

MnCUN to IStar TribuneI CUs well capitalized

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MINNEAPOLIS (8/4/09)--Credit unions are well capitalized, Mark Cummins, Minnesota Credit Union Network president/CEO, said in a response to a recent article in the Minneapolis Star Tribune. The newspaper published an article July 27 that highlighted some of the lending challenges credit unions have recently encountered. The newspaper said some credit unions engaged in risky lending and are losing money. The article did not clarify that those credit unions’ difficulties were anomalies in the industry, as only a handful were involved in risky lending practices, Cummins said. “Minnesota credit unions have a long and proud history of lending conservatively to their members,” Cummins said. “In fact, only 2.5% of the state’s credit unions have capital levels that are below what regulators consider to be adequately capitalized.” As of March 31, the capital ratio for Minnesota credit unions was 9.8%, above the 7% threshold set by the National Credit Union Administration, he added. Money that credit union members have on deposit is insured up to $250,000. “There is no problem that could occur in the credit union industry that cannot be handled by the existing deposit insurance system,” Cummins said.

First Global Womens Leadership Forum held

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BARCELONA, Spain (8/4/09)--About 40 women leaders in the global credit union movement met last week as part of the Global Women's Leadership Network, immediately following World Council of Credit Union's (WOCCU) World Credit Union Conference in Barcelona, Spain.
Click to view larger image Kimberley Ney of Alterna Savings & Credit Union in Canada, and forum facilitator Susan Mitchell applaud the comments of another participant at a one-day forum of the Global Women's Leadership Network, held after World Council of Credit Unions’ (WOCCU) World Credit Union Conference in Barcelona, Spain, last week.
Click to view larger image Chetna Sinha of Mann Deshi Women's Bank in India shared her leadership experiences with fellow Global Women’s Leadership Network forum participants. (Photos provided by World Council of Credit Unions)
The network, launched earlier this year by WOCCU with the Canadian Co-operative Association (CCA), is the first of its kind. It brings together women credit union leaders from more than 15 countries to connect, share ideas and participate in a peer advisory program. Network members met during an inaugural one-day forum Thursday to discuss leadership issues vital to credit union growth and development worldwide. Members included CEOs, executives and board directors from credit unions and industry partners. Countries represented ranged from Australia and Belarus to Mexico and Zimbabwe. “Women worldwide play an active role in finance and economics,” said Chetna Sinha, founder and chair of India's Mann Deshi Women's Bank, network member and forum participant. “It is very important that women occupy a leadership role in this industry because women's financial leadership capabilities are extraordinary.” Despite operating in different environments, the attendees found they faced similar leadership challenges in their credit unions despite the fact their credit unions are run differently. The women discussed the critical impact they have in society and challenges they face in leadership positions. Participants also broke into small groups to discuss in-depth strategic issues such as growing market share and facilitating greater access to credit unions worldwide. WOCCU and CCA are raising funds to offer women in both developed and developing countries greater access to credit union resources that will enable them to lead in the economic development of their communities. The network provides financial support for development efforts aimed at increasing access to financial services for women in field programs. Leaders who join the network can access the peer advisory online forum and receive periodic updates on women in credit unions. “Women play a vital role in the economic well-being of families and communities worldwide,” said Brian Branch, WOCCU executive vice president and chief operating officer. “The Global Women's Leadership Network will empower women not only to increase their effectiveness, but also to bring their leadership capabilities to the forefront. And that will benefit everyone.” The 2010 Global Women's Leadership Forum will take place in Las Vegas with The 1 Credit Union Conference to be co-hosted by WOCCU and the Credit Union National Association in July. For more information, use the link.

Top 10 INews NowI stories for July

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MADISON, Wis. (8/4/09)--Here are the top 10 most requested News Now stories during July. Use the links to read the stories online. 10. CUNA pursues CARD Act compliance solutions WASHINGTON (7/30/09)--CUNA continues its efforts to address what is for credit unions a troublingly short compliance framework for new Federal Reserve Board rules implementing the Credit Card Accountability, Responsibility and Disclosure (CARD) Act. 9. Fed addresses CARD Act compliance problem WASHINGTON (7/16/09)--The Federal Reserve Board Wednesday issued an interim final rule under the Credit Card Accountability, Responsibility and Disclosure (CARD) Act and included supplementary information that addresses a problem regarding sending out statements 21 days before a payment is due. 8. CUNA sets July 28 audio call on CARD Act notice provision WASHINGTON (7/20/09)--On July 28 at 1:30 p.m. (ET), the Credit Union National Association (CUNA) will hook up interested credit union representatives with financial industry experts who will address concerns about a 21-day notice period under the Credit Card Accountability, Responsibility and Disclosure (CARD) Act. 7. Two more file suits on CUNA Mutual’s credit disability RAPID CITY, S.D., and GREENVILLE, S.C. (7/10/09)--Two more credit union members have filed suits against CUNA Mutual Group and CUNA Mutual Insurance Society regarding credit disability benefits. 6. GM, Chrysler CU discounts to continue through year-end LANSING, Mich. (7/13/09)--General Motors and Chrysler credit union member discounts as part of the "Invest in America" program will continue through the end of the year, the Michigan Credit Union League announced Thursday. 5. Class action suit filed against CU over investments MIAMI (7/7/09)--Attorneys for a Florida woman have filed a class action lawsuit against a Boca Raton-based credit union and four individuals that alleges they lost millions of dollars by investing in a now-defunct company that the suit terms was "a bucket shop rife with fraud." 4. Pope’s financial crisis encyclical cites CUs, love MADISON, Wis. (7/10/09)--Love and credit unions function in the same manner, said Pope Benedict XVI Tuesday in his third encyclical, "Charity in Truth," which focused on the economy, business and finance. 3. Fed explores big Reg Z changes WASHINGTON (7/24/09)--The Federal Reserve Board has proposed several major changes to Regulation Z (Truth in Lending) that would modify the disclosures required of lenders for closed-end mortgage loans and home equity lines of credit. 2. Four CUs hit by insider embezzlement schemes MADISON, Wis. (7/10/09)--Credit unions experienced a rash of insiders accused or convicted of embezzlement schemes this week. Four incidents involved a manager of a defunct credit union, a branch manager who also is a pastor, a loan officer and a clerk. The amounts taken totaled nearly $1.7 million. 1. Longer compliance time needed on CARD Act provision: CUNA WASHINGTON (7/8/09)--The Federal Reserve Board must give credit unions more time to comply with a provision of its expected rules to implement new credit card statutes if that provision is going to apply beyond credit cards, CUNA urged the federal regulator Tuesday.