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CU System Archive

CU System

Four leagues form company to boost CUs business

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FARMERS BRANCH, Texas (8/5/11)--Four leagues have joined together to form CU Partner Link, a new company focused on boosting business for credit unions, and announced its board of directors. CU Partner Link is a collaboration among the California Credit Union League, Georgia Credit Union Affiliates (GCUA), Ohio Credit Union League and Texas Credit Union League. It will identify and deliver innovative financial products focused on growing revenue and enhancing business-development efforts to credit unions across the U.S. "Credit unions have rarely faced a more challenging operating environment than they do today … a multi-year economic downturn, stagnant loan demand and an ever-increasing regulatory burden are just a few of the headwinds the industry faces" said Dick Ensweiler, president/CEO of the Texas league and chairman of the board of CU Partner Link. "But despite these challenges, there are significant prospects for new growth. And, one of our best avenues for identifying these opportunities is through collaboration." Most credit unions have spent significant energy the past few years finding ways to reduce operating expenses. The leagues believe that state-support organizations should collaborate in deeper, more meaningful ways to ensure that maximum value is returned to the credit unions they serve, said a press release. CU Partner Link believes the best prospects to improve financial performance will be realized from helping credit unions focus on growing top-line revenue. "Consolidation in the industry is changing the way credit union leaders view their opportunities for growth," said Mike Mercer, CEO of GCUA and secretary of CU Partner Link's board. "At the same time, it is causing state-support organizations to transform the ways they operate," he added. In addition to Ensweiler and Mercer, serving on the board of directors for CU Partner Link are:
* Vice chairman, Diana Dystra, CEO of the California league; * Treasurer, Paul Mercer, CEO of the Ohio league; * Darren Herrmann, CEO, San Francisco Fire CU, San Francisco, Calif.; and * Paul Trylko, CEO, Amplify FCU, Austin Texas
Leagues participating in the venture represent 1,615 credit unions or 21% of the nation's credit unions with more than $235 billion in assets or 25% of total credit union assets in the U.S.

Altura CUs net-worth ratio climbs to 6.26

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RIVERSIDE, Calif. (8/5/11)--Altura CU Tuesday reported net income of $3.1 million on total assets of $693.6 million for the quarter ended June 30, and also that its net-worth ratio climbed to 6.26%. The second-quarter net income of $3.1 million is ahead of Altura’s 2011 budget projection, and an improvement over a $1.6 million loss for the first quarter ended March 30. Year-to-date net income is $1.5 million. Altura CU is located in California’s Inland Empire area in Riverside, Calif., which was hard hit by the recession and experienced job losses and declining home values (News Now Jan. 27). “Our financial results are showing steady improvement,” said Altura CEO Mark Hawkins. “The results we are seeing are good for Altura and good for the [local area]. There are still challenges out there with consumer loan activity at historic lows, lowered real estate values and continued sluggish employment. Yet, we are seeing steady improvement and that’s a big positive.” Second-quarter results are a significant improvement over the same period last year, when Altura reported a loss of $4.1 million on assets of $832 million. For the second quarter, Altura also reported improvement in its net-worth ratio, boosting that important ratio to 6.26%, which is considered “adequately capitalized” by the National Credit Union Administration. This compares with a ratio of 5.56% for the quarter ended March 30 and 5.23% for the quarter ended June 30, 2010. Contributing to Altura’s net-worth-ratio improvement is ongoing expense reduction. Operating expenses are down $700,000 since the start of the year, Altura reported. The credit union has reduced its operating expenses significantly during the past three years, in part by closing underperforming branch locations and converting others to all-electronic branches. “The local market is clearly improving, but it’s slow,” Hawkins said. “We feel good about where our financials are, as this process winds its way out. We have good momentum, and we expect the remainder of the year to be positive.”

Illinois league announces plan for small CUs

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NAPERVILLE, Ill. (8/5/11)--The Illinois Credit Union League (ICUL), through the Illinois Small Asset Size (SAS) Credit Union Advisory Group, has launched its first statewide action plan for small credit unions. The plan will facilitate a statewide collaboration, study small credit union challenges, offer solutions, and help secure the strength of the small credit union community, said the league. The announcement of the advisory group was made during ICUL’s SAS Credit Union Conference, an annual two-day event for credit unions with less than $20 million in assets. “The existence of a viable, healthy small credit union community is not only vital to the financial well-being of the members they serve, but also to the political and cooperative strength of the entire movement," said Dan Plauda, ICUL president/CEO. He noted the group will provide an “additional level of service to such an important segment of credit unions.” The advisory group is charged to create a plan that will provide an opportunity for credit unions to shape distinct and permanent SAS workgroups statewide. It includes four priorities:
* Reduce the regulatory and compliance burden. Small credit unions have identified regulatory compliance as a barrier to running an effective day-to-day operation. Assistance in this area will include providing “hot topic” multi-chapter events, enhancing and expanding the online small credit union resource center available on the league’s website, issuing e-mail updates, and developing a centralized clearinghouse of common vendors. * Promote collaboration. Small credit unions will benefit from joining together on products and services, ideas and projects. The advisory group will help build partnerships, establish peer networks, provide credit union mentoring, and coordinate a market place to catalogue available low-cost or no cost furniture and equipment. * Enhance communication. Opening an on-going dialogue within the small credit union community is essential to implement programs. Communication will facilitate initiatives such as small credit union workgroups, “hot topics” conference calls, sharing information, and using alternate communication methods such as an already-established ICUL small credit union listserv. * Increase competitiveness. Adopting sturdy plans to reach non-members will bring increased unity, growth and stability. SAS credit unions will receive help via promoting their Web presence, participating in the Illinois REAL Solutions program, using a marketing toolkit, and strengthening their niche in the marketplace.
“SAS credit unions are big business--in Illinois 72% of all credit unions have less than $25 million in assets,” said Joni Senkpeil, ICUL director of small credit union development. “It is our hope the action plan builds upon this foundation with prudent actions that support the continued growth of the small credit union community.” Members of the advisory group include: Michael Daugherty, CEO, Community Plus FCU ($14.5 million, Rantoul); Kimberly Hocking, CEO, Kaskaskia Valley Community CU ($7.8 million, Centralia); Karen Jurasek, CEO, Generations CU ($16.9 million, Rockford); and ICUL staff members Vicki Ponzo, senior vice president of member services, and Senkpeil. More than 80 credit union staff and board members turned out for the conference, which ended Wednesday at ICUL’s offices in Naperville, Ills. The conference provides an educational event to address challenges and concerns of credit unions in this particular asset group. This year’s event was sponsored by ICUL, the Illinois Credit Union Foundation and CUNA Mutual Group.

CU System briefs (08/04/2011)

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* MARQUETTE, Mich. (8/5/11)--A man who robbed Great Lakes First FCU in Rapids River, Mich. was sentenced to 66 months in federal prison on Monday (U.S. Fed News Aug. 1). Carl Alphonso Crane III, 21, pleaded guilty to a charge of armed robbery. Crane was also sentenced to 48 months of federal supervised release after his prison term is complete. The investigation showed that Crane entered the credit union, brandished what appeared to be a handgun, and demanded money from three tellers on duty. Crane was later found hiding in his father’s house and arrested … * SAGINAW, Mich. (8/5/11)--Alan Watson has been named president/CEO of Catholic FCU, Saginaw, Mich. (Saginaw NewsAug 3). Watson has been employed with Catholic Federal for 10 years, serving as acting president since Jan 1. He previously served as senior vice president and chief financial officer. Watson is a graduate of Michigan State University Eli Board College of Business and a graduate of CUNA Management School, University of Wisconsin … * ALISO VIEJO, Calif. (8/5/11)--A teller who allegedly took $70,000 from Capstone FCU in Aliso Viejo, Calif., lost the money gambling, but said he planned to win it back and return the money to the credit union before he got caught (ocregister.com Aug. 3). However, local sheriff’s officials said the plan didn’t work out and they believe Alexander Buduria Flores, 36, stole cash during a one-month period from the $36.4 million asset credit union, according to the Orange County Sheriff’s Department. Flores fled the credit union when his supervisors audited his drawer and told him he was holding too much cash. Flores later contacted a credit union employee and arranged to meet, but instead sheriff’s deputies arrived and took him into custody. Flores had worked at the credit union for three years …

Missouri congressman begins in-district meetings

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ST. LOUIS (8/5/11)--U.S. Rep. William Lacy Clay (D-Mo.) took part in the first of a series of in-district meetings with Missouri credit unions this summer.
U.S. Rep. William Lacy Clay (D-Mo.) took part in the first of a series of in-district meetings with Missouri credit unions this summer. Pictured, from left, are: Jennifer Wright, Arsenal CU, Arnold; Laura Alfeldt, First Community CU, Chesterfield; Charlie Waalkes Anheuser-Busch Employees’ CU, St. Louis; Lisa Farnen, Electro Savings CU, St. Louis; Steven Engelhardt, a Clay staff member; Mike O’Brien, St. Louis Community CU; Richard Dillard West Community CU, O’Fallon; and Amy McLard, Missouri Credit Union Association. (Photo provided by the Missouri Credit Union Association)
Clay, who remained in Washington, D.C., for the debt ceiling discussions and votes, met July 27 with seven credit union representatives via teleconference in his St. Louis County office, said the Missouri Credit Union Association (MCUA). Discussions centered on the Small Business Lending Enhancement Act (H.R. 1418 and S. 509), which would raise the member business lending (MBL) limit on credit unions to 27.5% of assets from 12.25%. Attendees also discussed supplemental capital, and the possibility for legislation to be introduced this session (The Missouri difference Aug. 2). Clay urged credit unions to share stories that demonstrate the impact they are having on small-business owners and the potential growth available if the artificial limit is lifted. “When small businesses are able to get access to the money they need to grow, we will be able to see businesses hire more workers and move the economy forward,” he said. People who took part in the meeting with Clay were:
* Laura Alfeldt, First Community CU, Chesterfield; * Richard Dillard, West Community CU, O’Fallon; * Lisa Farnen, Electro Savings CU, St. Louis; * Mike O’Brien, St. Louis Community CU; * Charlie Waalkes, Anheuser-Busch Employees’ CU, St. Louis; * Jennifer Wright, Arsenal CU, Arnold; and * Amy McLard, MCUA.
The Credit Union National Association (CUNA) and credit unions are pressing Congress to increase credit unions’ MBL cap to open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

Filene seeks 40 CUs for CEO leadership study

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MADISON, Wis. (8/5/11)--The Filene Research Institute is seeking 40 credit unions to participate in a research study to help credit unions understand and plan for leadership challenges. “Predicting Organizational Performance: The Role of the CEO, the Senior Management Team, and Work Engagement” by Prof. Murray Barrick of Texas A&M University aims to identify personality traits and leadership styles of effective credit union CEOs and senior management teams. The research will:
* Identify the personality traits, types of engagement goals, and leadership styles of highly effective CEOs and senior management teams; * Assess the motivating potential of a credit union’s work environment by measuring management support, high-performance work practices, and methods of task-design by managers; and * Examine how the attributes of the CEO and other senior managers interact with the motivating potential of the work environment to predict the most important outcome: the credit union’s overall performance.
The deadline for participants to register is Aug. 19. Participating credit unions will be admitted to the study on a first-come, first-served basis. Credit unions of all sizes in the U.S. and Canada are eligible. The findings will be published by the Filene Research Institute. “As we navigate this ‘new normal’ economy, leadership that can infuse every layer of the credit union is essential,” said Mark Meyer, Filene CEO. “This study will help CEOs understand not just their own styles, but how those styles trickle down through their organizations.” Participating credit unions will receive specific feedback and access to the final report, even if they are not Filene members. There is no cost to participate. The data that participants contribute will always be private; Filene’s public report will present anonymous aggregate findings.

Irish CUs using courts to pursue delinquent loans

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DUBLIN, Ireland (8/5/11)--Irish credit unions are using the courts more frequently in pursuing delinquent loans. There were 89 judgments registered by credit unions in July compared with 43 during the same month last year (Irish Examiner Aug. 4). The total amount of the judgments jumped to $1,659,214 last month from 768,673 in July 2010. Irish credit unions will typically use legal proceedings only as a last resort, according to a spokesperson for the Irish League of Credit Unions. Recently, the Central Bank of Ireland imposed lending sanctions on some credit unions due to concerns over rising delinquencies. In June, Ireland’s credit union regulator, Registrar James O'Brien, indicated his agency would lead a wave of mergers across the sector in a move that could reduce the country's more than 400 credit unions to roughly half (News Now June 16). At the time, Paul Walsh, chief executive of the insurer, CUNA Mutual Europe, said credit unions will have a bright future only if they change their current practices and collaborate on cost cutting and improving efficiencies.