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Members United Corp. overstated OTTI by 1.2M

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WARRENVILLE, Ill. (8/6/10)--Members United Corporate FCU said it made a "one-time formula error" that overstated its other-than-temporary-impairment (OTTI) charges by $1.2 million on its financials reported for April 30. In its financial statement for the end of April, Members United recorded $21.1 million of OTTI, but an internal audit of the OTTI has since uncovered the error, which meant it recorded $1.2 million more OTTI than required as of April 30. "From a financial statement perspective, the error represented less than 0.2% of the cumulative OTTI of $562.3 million recorded to date. From a depletion perspective, the percentage processed on May 25 would have been reduced from 89.7% to 88.8%," the corporate said in its unaudited portfolio update and financial reports for June 30. The report is available on Members United's website. The difference of 0.9% will either be applied to reduce any future depletions, or replenished to the membership capital share accounts, if deemed proper, the corporate said. The $8.1 billion asset Members United earned $1 million during June, increasing its retained earnings to $9.6 million. Regulatory capital, consisting of retained earnings and membership capital shares, totaled $23.2 million as of June 30. The corporate said it did not record any OTTI during June and that an OTTI review is underway. Charges were to be recorded in July and reported in the next portfolio update, it added. Preliminary results indicate that retained earnings of $9.6 million will be sufficient to absorb OTTI charges, and that Members United currently does not anticipate depleting MCS in August, the financial statement said.

Filene seeking social media survey participants

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MADISON, Wis. (8/6/10)--The Filene Research Institute is asking credit unions to participate in a new study on the business impact of credit unions' social media marketing strategies. Social media marketing using Facebook, Twitter, and other Web-based applications has created a lot of buzz, but no one has yet measured its financial impact or determined what mix works best for credit unions, the institute said. To address this issue, Filene's project will work to develop the first predictive model for credit unions to use to estimate the impact of their social media marketing strategies on measures such as membership and products per member. Participation requires about two hours during the next year and will involve four quarterly surveys between this month and July 2011 about marketing activities, as well as social media marketing. Each survey will take 25 to 30 minutes to complete. Natural person credit unions not currently using social media can participate, too. The research aims to produce a statistically tested method to predict changes in membership and products per member (or member share) based on social media activities. Aug. 20 is the deadline to sign up for the survey panel. To register, use the link.

Mass.s foreclosures bill passes legislature

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MARLBOROUGH, Mass. (8/6/10)--The Massachusetts legislature this week approved legislation that would affect mortgage foreclosures. The Massachusetts Credit Union League worked to represent the interest of both state and federally chartered credit unions on the topic. The league provided oral and written testimony on dozens of proposals before multiple legislative committees and requested a centralized, legislative task force to address the topic. Aspects of the myriad of proposals--which were successfully defeated at the request of the league and others--include mandatory judicial review of mortgage foreclosures, mediation, payment of utilities for tenants, the creation of an abandoned property database, translation of documents into multiple languages and the licensing of credit union mortgage loan originators (eWeekly Aug. 4). The league has prepared an analysis of the bill’s impact on Massachusetts credit union mortgage lenders.

Bill to remove deposit cap on Mass. governors desk

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MARLBOROUGH, Mass. (8/6/10)--A bill that would remove the deposit limits under which state-chartered Massachusetts credit unions operate is on Massachusetts Gov. Deval Patrick’s desk. The bill, S.B. 468, “An Act Relative to Credit Union Shares and Deposits,” was introduced by Sen. Benjamin B. Downing (D-Pittsfield), said the Massachusetts Credit Union League (eWeekly Aug. 4). State-chartered credit unions had limits, based on their asset size, as to the amount of deposits they could accept. The measure would give them the opportunity to meet the demands of their members who would prefer to invest a greater portion of their money with the credit union but had been denied that opportunity because of an arbitrary cap, the league said.

Nearly 200 CUs helping Mich.s hardest-hit homeowners

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LANSING, Mich. (8/6/10)--Roughly 200 credit unions are helping Michigan homeowners through the “Helping Hardest-Hit Homeowners Fund,” which launched July 12. The $154.5 million program aims to help Michigan homeowners who are receiving unemployment compensation, who have fallen behind in their mortgage payments or taxes due to a temporary layoff or medical emergency, or who can no longer afford their mortgage payments due to lower income. The program is expected to help 17,000 Michigan homeowners avoid foreclosure. Dort FCU, Flint, Mich., was the first financial institution in the program to help a struggling homeowner, according to the Michigan Credit Union League. Nineteen individual credit unions are participating so far, in addition to 180 credit unions represented by credit union service organizations Member First Mortgage and Mortgage Center. Participating banks number around 35. There is no limit on the number of lenders that can participate. Funds are available on a first-come, first-served basis. The funds are expected to last 12 to 18 months. For a list of lenders, use the link.

CU System brief (08/05/2010)

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* LINDEN, N.J. (8/6/10)--E53 FCU, based in Linden, N.J., has changed its name to Motion FCU, announced the $90 million asset credit union. Motion FCU President/CEO Michael Greenwood told MyCentralJersey.com (Aug.5) that the term "motion" signifies energy and action, which represent "what our membership is all about." Motion FCU's tagline, "moving dreams forward," focuses on helping members achieve their individual financial vision and goals. The credit union plans to launch new services such as virtual banking and a more user-friendly website. It also is remodeling its North Brunswick branch and planning to open a new branch in Linden as part of the credit union's rebranding ...

CUs at top of the heap in new Kellogg Trust Index

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CHICAGO (8/6/10)--Credit unions are at the top of the heap--again--in the latest consumer poll on trustworthiness. This time 62% of American consumers surveyed said they trust credit unions. That compares with 57% for local banks, 35% for national banks and 27% for banks in which the government has a stake, according to the June poll by the Chicago Booth/ Kellogg School Financial Trust Index. Credit Union National Association President/CEO Bill Cheney said the index findings are timely and that he hopes they help to further raise consumer awareness about credit unions. "Especially today, in the wake of the biggest financial crisis since the Great Depression, people want a financial institution they can trust to look out for their best interests. They only need look as far as their credit union, as we have long known and emphasized, and as the latest Kellogg Trust Index results have made clear," he said.
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The poll found that trust in America's financial system is at its highest point since the survey began in 2008, with 26% of Americans saying they trust the financial system. That's a three-percentage-point hike from March's index. The percentage of consumers who trust credit unions has steadily risen since the survey began (See chart). Credit unions were four percentage points above from their position as most-trusted in March. In December, credit unions were trusted by 56% of consumers surveyed, and in March, they were trusted by 58%. "Clearly consumers--increasingly--are recognizing the great deal, sound management and safety that credit unions offer their members and their money. Our hope is that more and more Americans jump on the bandwagon and move their money to a credit union," Cheney said. In the March poll, credit unions were the only institutions that experienced an increase in consumers' trust. In the latest survey, all four types of institutions saw the level of trust rise. Banks--especially the bottom-feeder national banks and banks with a government stake--experienced bigger percentage-point increases. However, they are so low on the trustworthiness gauge they would have to travel much farther before surfacing next to credit unions' level of trustworthiness. The latest poll covers April to June.

Arizona Central CU offers disaster relief for wildfire victims

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PHOENIX (8/6/10)--Arizona Central CU, Phoenix, is offering a loan to help those affected by recent wildfires and flooding in the area. The credit union will offer a loan up to $1,500 with a 12-month repayment term and an annual percentage rate as low as 5.99%. The loan aims to serve as a temporary stop-gap to cover insurance deductibles and unexpected repair bills connected with the flooding and wildfires. Sindy Domek, Arizona Central’s Flagstaff branch manager, said she has spoken with several Flagstaff, Ariz.-area members who are struggling to pay for repairs and deductibles. “Dealing with the flooding and fires is bad enough,” she said. “Worrying about how to pay for it just adds to their stress levels.” Arizona Central CU has $410 million in assets.