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CU System Archive

CU System

Preparing for disaster can also save community

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MIAMI and CHARLOTTE, N.C. (9/1/11)--Not until a disaster strikes is the link between business and community truly realized, according to David Paulison, former administrator of the Federal Emergency Management Agency (FEMA). Credit unions, like other businesses, need to be prepared for disasters. While there is no clear blueprint, there are several key actions a credit union can take. Paulison is working with CUNA Strategic Services provider Agility Recovery and others to help prepare businesses and credit unions for disaster. His advice comes on the heels of Hurricane Irene and just in time to observe September as National Preparedness Month. Roughly 40% to 60% of America’s small- to medium-sized businesses close after experiencing a disaster. "These businesses are simply lost forever, never to reopen their doors to the communities they serve," Paulison said, noting that when this happens the surrounding communities are slow to respond. In 1992, Hurricane Andrew displaced more than one million people in Florida and Louisiana. Until Hurricane Katrina in 2005, Andrew’s heavy rains and tornadoes resulted in what was the most expensive hurricane in U.S. history. Countless businesses were lost and it took more than 10 years for South Dade County, Fla., to recover, said Paulison, who retired as fire chief of Miami-Dade County, Fla. in 2001. He was with FEMA from 2005 through 2009. "These events, either natural or manmade are happening all the time and with increasing frequency, most of the time with little or no warning," he said. "Most firms react too late with little or no time to prepare--most operate completely behind the curve." "Hurricane Katrina was one of the most destructive disasters the country has faced, but the faults in the response and recovery following the storm were mostly due to a lack of preparedness," he said. "Katrina was a national catastrophe--it affected the environment and the economy, our infrastructure and our national pride," he said. "However, what Hurricane Katrina really did was expose a nationwide lack of planning and preparedness. And it doesn’t stop with hurricanes." With FEMA, he evaluated disasters across the country. "I saw the same thing in almost every city--most places were not prepared. Businesses were not prepared, individuals were not prepared, and the cities themselves were not prepared." The problem exists whether it is a flood, ice storm, or tornado, he said. He breaks the failures into three deficiencies: Lack of imagination; lack of investment; and lack of willingness to act. "Individuals, businesses and government cannot imagine the types of events that can occur in their city or region and therefore are reactive in their decision making rather than proactive," Paulison said. He cites a lack of investment in preparedness, including planning, training, and assessment of the durability of facilities. "Time after time I’ve gone to hospitals that have generators stored in the basement,so any time there’s a flood, these become inoperable. Often times we recognize these things that have to be done, but we lack the willingness to act." "There is no clear blueprint to preparing your credit union for a disaster, but there are several key actions a leader should take regardless of the size of your credit union or geographic location," he advises. Among them:
* Perform a risk assessment. What in your community could cause the most damage and what is most likely to happen? When I ask local business leaders, 'Who is your local emergency manager,' 80% of the time they do not have a clue." Credit unions can use these emergency managers to determine the most vulnerable aspects of their business and what’s most likely to happen in the community. * Plan for the unknown. Be creative, yet practical. No one would have ever predicted half of the states in the northeast would go without power because someone threw the wrong switch. "Unforeseen events are going to happen, so credit unions everywhere must be prepared." * Make sure you have an emergency response plan and kit readily available in your home and office. It’s not tough to have a kit ready and well worth the investment of time and money compared to the potential losses of both. PrepareMyBusiness.org provides a checklist of items for a business disaster recovery kit, he said. * Be prepared to survive alone for at least 72 hours. "Credit unions must also be prepared to act alone in their recovery for a minimum of three days. Where are the weak points in your communication plan? Where will you relocate your branches to if one or more are inaccessible? How will you handle the increased demand for cash withdrawals?"
Ask what you personally need proof for, if you are without access to your home--passport, driver's license, credit cards, insurance papers, photos of the rooms in your house. Take all of this information and put it in a ‘go’ kit to take during an evacuation," he advised. Consider how you will contact your family and establish a central meeting location if you become separated. "The recent earthquake in Virginia affected cell networks all over the northeast, with voice calls nearly impossible in some areas. Be sure you, your family and your co-workers know that text-based messaging may be the only means of communication." Preparing for a disaster also entails the access to key assets to get your credit union up and running quickly and efficiently, Paulison said. Ensure access to things like power generators, office equipment, information technology infrastructure, and the satellite bandwidth to ensure communications. "This can be a fairly large undertaking for small and midsized businesses, so seek out a reputable business continuity solution provider to handle these needs," he said. "When you can ensure access to the tools necessary to get your operations back up and running in the first couple of days following a disaster, then the recovery happens a lot quicker. In fact, if only gas and grocery stores can remain open, that takes care of 80% of a community’s needs. Disaster preparedness is the responsibility of every part of our society--individuals and families, businesses, communities, and government. When any one of these elements fails, the whole system collapses."

Illinois Gov. Quinn to speak at NASCUS state summit

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ARLINGTON, Va. (9/1/11)--Illinois Gov. Pat Quinn will speak at the National Association of State Credit Union Supervisers’ (NASCUS) annual gathering of the state credit union system, the 2011 State System Summit in Chicago. Quinn will address attendees on Sept. 15 during a luncheon. He was sworn in as the 41st governor of Illinois on Jan. 29, 2009. He has served the people of Illinois for more than a quarter of a century, both as a citizen and a public official, said NASCUS. The summit agenda also features state and federal regulators, policymakers, credit union leaders and other system experts discussing how state credit unions can thrive in the challenging regulatory and legislative landscape.

ASI FCU launches small business coalition

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NEW ORLEANS (9/1/11)--ASI FCU, with $302 million in assets, Harahan, La., is launching a coalition of non-profits to unveil Kiva New Orleans, a program that engages local residents to rebuild New Orleans by making microloans to local small businesses. Kiva New Orleans represents Kiva’s second locally organized initiative in the U.S. and the continuation of its nationwide “Kiva City” program, said the Louisiana Credit Union League (eNews Aug 31). The program allows the people of New Orleans and their supporters to lend as little as $25 to local small businesses. The Kiva New Orleans program is a coalition among three nonprofits:
* ASI FCU, which will work with the small businesses referred by Good Work Network, underwrite microloans, analyze loans for risk and administer approved loans. * Good Work Network, which will educate, coach and support small-business owners to help them improve their skills, realize their full potential and become active participants in the local economy. * Kiva.org, which will feature New Orleans-based borrowers on the Kiva.org website to allow the city residents and the broader Internet community to invest in and champion the success of New Orleans businesses, $25 at a time.
The coalition also includes three business partners.
* Generation Louisiana, a local business development and public relations consulting firm, will work to engage the local community; * KEEN, maker of hybrid footwear, bags and socks, will provide up to $77,000 out of its HybridLife Hope Fund to sponsor a matching fund where individual loans to Kiva New Orleans’s small businesses are matched dollar-for-dollar on Kiva.org; and * Entergy Corp., an energy company engaged primarily in electric power generation and retail distribution operations, is a major media sponsor of the nonprofit collaborative that comprises Kiva New Orleans.
The Credit Union National Association (CUNA) and credit unions are pressing Congress to increase credit unions’ member business lending (MBL) cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans to small businesses into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

Filene welcomes 16 new i3 innovators

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MADISON, Wis. (9/1/11)--The Filene Research Institute has selected 16 credit union executives to join its i3 (Ideas, Innovation, Implementation) program, which fosters the development of new ideas and innovations for credit unions. Each member will serve a two-year term and participate in semi-annual meetings arranged by Filene. The next meeting will be held October 12-14 in Kansas City, Mo. “I’m always extremely impressed by the candidates, but this year was so promising because we’re seeing more and more institutional support from the candidates’ credit unions,” says Denise Gabel, Filene’s chief innovation officer. “I think CEOs are realizing that i3 puts not just the participant, but the organization at the forefront of credit union innovation work.” Filene received more than 50 applications from qualified credit union executives. With the help of Professor Murray Barrick of Texas A&M University, each applicant was evaluated based on motivation, leadership, creativity and innovation, teamwork, and other factors, including present position, geography and type of credit union. i3 has helped launch programs such as Save to Win (prize-based savings accounts), nationwide Savings Challenges (reality TV meets wallet improvement), and Debt in Focus (an anonymous, online financial assessment tool), which has improved the way credit unions provide financial guidance to their fields of membership, said Filene. Executives have been named to the i3 team are:
* Dana Clark, assistant vice president, frontline operations, Connex CU, North Haven, Conn.; * Joline Epple, director of marketing, Target Corp. CU, Minneapolis; * Betsy Guerrero, chief financial officer, Westerra CU, Denver; * Jean Hughes, senior vice president, CommunityAmerica CU, Kansas City, Mo.; * Jennifer Kulkoski, marketing director, First Financial CU, Skokie, Ill.; * Adam Marlowe, assistant vice president, distribution channels, Georgia’s Own CU, Atlanta; * Josh McAfee, marketing eirector, Leaders CU, Jackson, Tenn.; * Michelle Merkley, director, marketing and business development, Keystone FCU, West Chester, Pa. * Sandra Sagehorn-Elliot, senior vice president/ chief operations officer, Bellco CU, Greenwood Village, Colo.; * Soma Sarkar, executive vice president/chief operations officer, Credit Union of New Jersey, Ewing, N.J.; * James Simon, senior vice president, loss and risk mitigation, Suncoast Schools CU, Tampa, Fla.; * Michael Spink, communications manager, North Carolina Local Government FCU, Raleigh, N.C.; * Ray Springsteen, senior vice president, Fort Knox CU, Radcliff, Ky.; * Steve Webb, chief operations officer, Neighbors CU, Baton Rouge, La.; * Jason Werts, vice president, member services, Unitus Community CU, Portland, Ore.; and * Linda Young, director, research and products, Coast Capital Savings, Vancouver, B.C.

Alloya Corporate exceeds capital requirement

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WARRENVILLE, Ill. (9/1/11)--Alloya Corporate FCU has exceeded the minimum capital subscriptions required to move forward on its charter plans, according to a member advisory sent Tuesday by Charter Advisory Group Chairman John Fiore. The corporate was required to generate a minimum of $70 million in contributed capital by the end of the business day on Wednesday. As of Tuesday, it had raised $71 million and is expecting additional capital contributions, said Fiore, who is president/CEO of Motorola Employees CU, Schaumburg, Ill. "We currently have more than 1,000 subscribed members--67% of our Members United Bridge's membership with an active line of credit," said Fiore's notice to members. That "will make Alloya the largest corporate credit union in terms of credit union membership in the country," he added. Reaching the capitalization milestone means that the corporate will seek the National Credit Union Administration's (NCUA) approval for Alloya's charter and merger (with Members United Bridge) application. Credit unions that have not capitalized under the terms of the private placement memorandum (PPM) can still join under the PPM terms through October. Members United Bridge is the bridge corporate entity that assumed the existing business of the Warrenville, Ill.-based Members United Corporate FCU after it was placed into conservatorship by NCUA. NCUA formed the bridge corporate in early October 2010.

iUSA Todayi CUs step up to aid Irene victims

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MADISON (9/1/11)--Chartway FCU, Virginia Beach, Va., was recognized for its efforts in aiding Hurricane Irene victims in an article that appeared on the front page of the Money section of the USA Today’s Aug. 31 edition. The article explained that Chartway is advancing personal loans to members who need to stay in hotels and pay monthly bills until they receive insurance money. “Chartway is willing to let members affected by Hurricane Irene skip loan payments. It says its plans will evolve as it hears what members need,” the article adds. “Unlike most institutions, we will not go out and decide what they want and need,” Chartway President/CEO Ron Burniske said in the article. “We can turn a product around in 12 hours.” For more on credit unions’ efforts and the launch of CUAid, see News Now’s story, “CUAid activates Irene relief, CUs rally to help.”

Freedom CU Salem FCU merge

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WARMINSTER, Pa. (9/1/11)--Freedom CU, with $498 million in assets, Warminster, Pa., has merged with Salem FCU. Freedom absorbed 449 Salem members with over $200,000 in deposits. The shares are primarily savings; however, a small number of loans were also transferred. Salem FCU exclusively served the congregation of Salem Baptist Church, in Jenkintown, Pa Salem members will have access to a Freedom branch minutes away from the Salem Baptist Church. Freedom CU, chartered in 1934, has more than 57,000 members.

CUAid activates relief efforts CUs rally in Irenes wake

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MADISON, Wis. (9/1/11)--Credit unions are rallying to provide assistance to colleagues and credit unions along the East Coast impacted by Hurricane Irene, and the National Credit Union Foundation (NCUF) has activated the online disaster relief system CUAid.coop to raise funds for credit union people affected.
Click to view larger image Extreme flooding hit Hightstown, N.J., after Hurricane Irene swept through the area. East Coast states from North Carolina through New England are struggling with the afteraffects of the storm. (Photo provided by the National Credit Union Foundation)
Certain areas on the East Coast have been devastated by the impact of the storm. For instance, Paul Gentile, president/CEO of the New Jersey Credit Union League in Hightstown, N.J., described the situation in his state this way: "New Jersey has been crippled by Hurricane Irene. Rivers in New Jersey have crested and washed out highly populated towns. Thousands of people are displaced and struggling just to get their bare necessities.” “I am thrilled CUAid is being activated. Joining together cooperatively to help those in need is the heart and soul of the credit union movement,” Gentile added. Some credit unions in the state were still without power Wednesday and have experienced minor damages caused by flooding, said the league's newsletter (The Daily Exchange Aug. 31). The NCUF announced Wednesday that credit union supporters in every state can now make donations through CUAid’s secured website, which accepts credit cards and wire transfers. (Use resource link below.) CUAid is a unique program that enables credit union employees, volunteers, and members, as well as credit unions and credit union organizations across the U.S., to contribute directly to support other credit union people. “We encourage credit union leaders all across the country to use CUAid.coop as a channel to collect donations from their employees, volunteers, and members,” said NCUF Executive Director Bucky Sebastian. “Everyone who supports CUAid is helping affected credit union people directly with critical needs, longer-term recovery needs, operational needs, and assisting credit union members.” As donations are posted through CUAid.coop, NCUF will coordinate with the state credit union leagues in the disaster-struck states to distribute money to affected credit union employees and members. CUAid was developed by NCUF in cooperation with state credit union foundations, state credit union leagues, and the Credit Union National Association’s Disaster Preparedness Committee in 2006. So far in 2011, NCUF has raised more than $250,000 in disaster relief donations that were disbursed as grants to credit union employees and members who suffered losses from tornadoes in Alabama and Missouri, as well as from flooding in North Dakota. Meanwhile, credit unions in the area are offering help to members. New Jersey credit unions that have offered help to others include ADP FCU, Roseland; Central Jersey FCU, Woodbridge; McGraw-Hill FCU, East Windsor; and Raritan Bay FCU, Sayreville, said the league. In Portsmouth, N.H., Service CU is providing disaster relief loans to qualified members facing hardship caused by the storm. The loan features a 5.49% annual percentage rate, 60-month maximum term, up to $40,000 and no payment for 90 days. The loan requires proof of loss, such as a photo of damage, professional third-party assessment/bid, or insurance claim. "It's our goal to help those in our community by offering a low-cost loan to help people quickly get back on their feet," said Gordon Simmons, president/CEO of Service CU. "Dealing with the hurricane or tropical storm damage is bad enough. Worrying about how to pay for it just adds to their stress levels. Service CU is endeavoring to alleviate that stress," he added. Service CU serves members in most of New Hampshire, four towns in Cape Cod, Mass., and all branches of the U.S. military and Department of Defense employees and their families.

As expected Ga. Corporate board votes yes to merger

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DULUTH, Ga. (9/1/11)--In the final milestone preceding the creation of Catalyst Corporate, the Georgia Corporate Board of Directors gave its formal assent Wednesday to a merger with Southwest Bridge Corporate. Earlier in the week, the transaction was approved by the National Credit Union Administration (NCUA) Board and the Southwest Bridge Corporate membership. That means Catalyst Corporate will be officially open beginning Tuesday. “Throughout this process the board has voted to approve planning components and significant actions, including approval of the merger application back in April,” said board Chairman Lin Hodges, president of Associated CU, Norcross, Ga. The vote "was a formality--but an important one for each of the directors as we contemplate how far we have come in the past year.” The board was "committed to ensuring that member interests are at the forefront of every decision,” said Hodges. “The strategy to consolidate with Southwest Bridge Corporate--a highly efficient and member-focused institution--in combination with tactics laid out in the Catalyst business plan, is the solution most capable of generating meaningful value to credit unions going forward.” Hodges, who will serve as the first Chairman of Catalyst Corporate, was a member of Georgia Corporate’s Advisory Committee--one of three member planning groups that considered more than a dozen business model options in depth during 2010 before selecting the present strategy. The others were a Strategic Steering Committee and Member Focus Group. “Member involvement throughout the planning process was essential, playing a critical role in bringing us to where we are today,” said Greg Moore, president/CEO of Georgia Corporate. More than 78% of Georgia Corporate’s previous shareholders subscribed to Catalyst, he said. “A good many credit unions want to continue to use the services of a corporate, but they have said loud and clear that they must reduce their exposure to risk,” said Dianne Addington, president/CEO of Southwest Bridge Corporate. “Catalyst Corporate represents this low-risk value proposition by minimizing the amount of capital a credit union puts at risk, and by minimizing the risk we take with those assets.” The new corporate's efficiency will ensure that Catalyst will "thrive financially, meet all of the capital and retained earnings objectives, and still take less balance sheet risk than what is possible under the old corporate model,” said Moore. "And we will achieve this without eliminating services or raising prices.” Together, the merging corporates have raised about $93 million in capital from 875 members, representing 74% of previous capital shareholders. “We do not doubt that, as soon as the merger is completed, other credit unions will seek to join Catalyst Corporate,” said Addington. The merger itself makes Southwest Bridge Corporate the first of its peers to come out of bridge status, well in advance of the two-year timeframe NCUA established last fall.

NEW CUAid launched to help CUs hit by Irene

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MADISON, Wis. (8/31/11 UPDATE 10:40 a.m. ET)--The National Credit Union Foundation (NCUF) has activated the online disaster relief system CUAid.coop to raise money for credit union people along the East Coast affected by Hurricane Irene. Certain areas on the East Coast have been devastated by the impact of the storm. For instance, Paul Gentile, President/CEO of the New Jersey Credit
Click to view larger image Extreme flooding hit Highstown, N.J., as shown in this NCUF photo, after Hurricane Irene hit the area. States from North Carolina ranging north up through New Englad are struggling with the afteraffects of the storm.
Union League in Hightstown, N.J., described the situation in his state this way: "New Jersey has been crippled by Hurricane Irene. Rivers in New Jersey have crested and washed out highly populated towns. Thousands of people are displaced and struggling just to get their bare necessities.” “I am thrilled CUAid is being activated. Joining together cooperatively to help those in need is the heart and soul of the credit union movement,” Gentile added. The NCUF announced today that credit union supporters in every state can now make donations through CUAid’s secured website, which accepts credit cards and wire transfers. (Use resource link below.) CUAid is a unique program that enables credit union employees, volunteers, and members, as well as credit unions and credit union organizations across the U.S., to contribute directly to support other credit union people. “We encourage credit union leaders all across the country to use CUAid.coop as a channel to collect donations from their employees, volunteers, and members,” said NCUF Executive Director Bucky Sebastian. “Everyone who supports CUAid is helping affected credit union people directly with critical needs, longer-term recovery needs, operational needs, and assisting credit union members.” As donations are posted through CUAid.coop, NCUF will coordinate with the state credit union leagues in the disaster-struck states to distribute money to affected credit union employees and members. CUAid was developed by NCUF in cooperation with state credit union foundations, state credit union leagues, and the Credit Union National Association’s Disaster Preparedness Committee in 2006. So far in 2011, NCUF has raised more than $250,000 in disaster relief donations that were disbursed as grants to credit union employees and members who suffered losses from tornadoes in Alabama and Missouri, as well as from flooding in North Dakota.